B-161245, SEP. 12, 1967

B-161245, SEP. 12, 1967

BIDS - SPECIFICATIONS - RESTRICTIVE DECISION TO FREMONT DIV., DYNAMICS CORP. OF AMERICA, RE LETTER REQUEST FOR PROPOSALS FOR GAS TURBINE GENERATOR BY SACRAMENTO AIR MATERIAL AREA. A TWO-STEP PROCUREMENT FOR GAS TURBINE GENERATORS INCLUDING ALTERNATORS ON A "BRAND NAME OR EQUAL" BASIS SPECIFYING "G.E. OR BENDIX" OR EQUAL IS NOT RESTRICTIVE AS A MATTER OF LAW SINCE ALTHOUGH THE TWO NAMED MANUFACTURERS' PRODUCTS WERE DEVELOPED FOR THE GOVT. AND WERE THE ONLY TWO KNOWN TO MEET THE REQUIREMENTS, ANY PROPOSAL CONTAINING DATA TO QUALIFY ANOTHER MANUFACTURER'S ALTERNATOR WOULD HAVE BEEN ACCEPTABLE. WITH RESPECT TO THE NECESSITY FOR FURNISHING DETAILED DATA AT THE FIRST STEP OF A TWO-STEP PROPOSAL SUCH REQUIREMENT IS CONSISTENT WITH ASPR 2-501 (1) AND (II) WHICH VEST CONSIDERABLE DISCRETION IN THE CONTRACTING OFFICIALS IN DETERMINING THE QUANTITY OF TECHNICAL INFORMATION TO BE SUBMITTED. THEREFORE, DATA REQUIREMENTS MAY NOT BE CONSIDERED UNJUSTIFIED.

TO FERMONT DIVISION, DYNAMICS CORPORATION OF AMERICA:

THIS IS IN REFERENCE TO YOUR LETTER OF APRIL 10, 1967, IN WHICH YOU QUESTION THE PROPRIETY OF CERTAIN REQUIREMENTS INCORPORATED IN LETTER REQUEST FOR TECHNICAL PROPOSALS (LRFTP) NO. F04606-67-R-9877 ISSUED BY THE SACRAMENTO AIR MATERIEL AREA, ON FEBRUARY 28, 1967. THE LRFTP REQUESTED OFFERORS TO SUBMIT DETAILED TECHNICAL PROPOSALS ON A REQUIREMENT FOR GAS TURBINE DRIVEN GENERATOR SETS AND POWER PLANTS, INCLUDING ALTERNATORS WHICH WERE TO BE EQUAL IN PERFORMANCE TO THOSE MANUFACTURED BY THE GENERAL ELECTRIC COMPANY AND THE BENDIX CORPORATION.

PRECEDING ISSUANCE OF THE LRFTP COGNIZANT AIR FORCE PERSONNEL HAD DETERMINED THIS REQUIREMENT COULD BE MOST FEASIBLY PROCURED BY UTILIZING THE TWO-STEP METHOD OF ADVERTISING SPECIFIED IN ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-501, SINCE GENERATOR SETS AND POWER PLANTS OF THIS PARTICULAR TYPE HAD NEVER BEEN PREVIOUSLY PROCURED. IN ORDER TO GIVE ADVANCE NOTICE OF THIS PROCUREMENT THE BASIC SPECIFICATION OF THE REQUIREMENT WAS RELEASED TO INDUSTRY ON JANUARY 11, 1967, AS A LONG RANGE PROCUREMENT ESTIMATE, IN ACCORD WITH ASPR 1 1007. IT IS THE POSITION OF THE AIR FORCE THAT A 45 DAY PROPOSAL PERIOD WAS DEEMED ADEQUATE CONSIDERING THE ADVANCE NOTICE, AND THE CLOSING DATE FOR RECEIPT OF PROPOSALS WAS THEREFORE SET FOR APRIL 14, 1967.

YOU CONTEND THAT SPECIFICATION OF THE ALTERNATORS ON A "BRAND NAME OR EQUAL BASIS" RESTRICTED COMPETITION UNNECESSARILY AND PREVENTED YOU FROM SUBMITTING A FULLY DETAILED PROPOSAL IN ACCORD WITH THE LRFTP. TO SUPPORT THESE ALLEGATIONS YOU ASSERT THAT GENERAL ELECTRIC REFUSED TO QUOTE YOU A PRICE ON ITS PRODUCT AND THAT, DUE TO THE LIMITED TIME AVAILABLE, BENDIX WAS UNABLE TO COMPLY WITH THE DETAILED DATA REQUIREMENTS LISTED IN THE LRFTP, SO AS TO QUALIFY YOUR PROPOSAL BASED UPON USE OF THE BENDIX ALTERNATOR.

CONCERNING THE PROPRIETY OF ADVERTISING ON A "BRAND NAME OR EQUAL" BASIS, WE ARE ADVISED THAT THE 30 KW AND 60 KW ALTERNATORS SPECIFIED IN MIL-G- 52421A WERE DEVELOPED FOR THE GOVERNMENT AND ARE THE ONLY EXISTING ALTERNATORS WHICH ARE KNOWN TO MEET THE REQUIREMENTS OF BOTH THE ARMY AND THE AIR FORCE. THE REFERENCED MANUFACTURERS WERE THEREFORE SPECIFIED IN ORDER TO IDENTIFY THE TWO CONCERNS WHICH HAD ALREADY QUALIFIED THEIR DEVICES THROUGH PARTICIPATION IN EXTENSIVE TESTING PROGRAMS; HOWEVER, ANY PROPOSAL CONTAINING SUFFICIENT DATA TO QUALIFY AN ALTERNATOR MANUFACTURED BY ANOTHER CONCERN WOULD HAVE BEEN CONSIDERED ACCEPTABLE IN THIS REGARD. CONSIDERING THESE FACTORS THE "BRAND NAME OR EQUAL" SPECIFICATION SEEMS TO REPRESENT A DESCRIPTION OF THE AGENCY'S ACTUAL REQUIREMENTS, AND WE THEREFORE FAIL TO SEE HOW IT COULD BE CONSIDERED RESTRICTIVE AS A MATTER OF LAW. IN ANY EVENT THIS ISSUE WOULD APPEAR TO BE MOOT IN VIEW OF THE AGENCY'S ADVICE THAT IT APPROVED YOUR PROPOSAL INSOFAR AS USE OF BENDIX EQUIPMENT WAS CONCERNED,AND THAT YOUR PROPOSAL WAS DEEMED TECHNICALLY UNACCEPTABLE DUE TO DESIGN DEFICIENCIES IN THE PALLET FOR THE POWER PLANT SYSTEM.

YOU ALSO QUESTIONED THE NECESSITY FOR FURNISHING DETAILED DATA AT THE FIRST STEP IN A TWO STEP PROPOSAL. ON THIS QUESTION IT IS THE POSITION OF THE AIR FORCE THAT DETAILED TECHNICAL DATA WAS ABSOLUTELY NECESSARY FOR AN ACCURATE DETERMINATION OF PROPOSAL ACCEPTABILITY, AND THAT CONTRACT PERFORMANCE AND PROGRAM REQUIREMENTS WOULD HAVE BEEN JEOPARDIZED BY ENTERING THE SECOND STEP OF THE PROCUREMENT WITH ANYTHING OTHER THAN A PROVEN TECHNICAL DESIGN. THIS APPROACH WOULD APPEAR TO BE ENTIRELY CONSISTENT WITH ASPR 2-501 (I) AND (II) WHICH CLEARLY CONTEMPLATE THE POSSIBILITY THAT ONE OR MORE PROPOSALS MAY BE FOUND TECHNICALLY UNACCEPTABLE PURSUANT TO AN EXTENSIVE EVALUATION, INCLUDING AN EXAMINATION OF ENGINEERING APPROACHES, MANUFACTURING PROCESSES AND TESTING TECHNIQUES REQUIRED TO BE PROPOSED. THE REFERENCED SECTIONS ARE QUOTED AS FOLLOWS:

"2-501GENERAL. TWO-STEP FORMAL ADVERTISING IS A METHOD OF PROCUREMENT DESIGNED TO EXPAND THE USE AND OBTAIN THE BENEFITS OF FORMAL ADVERTISING WHERE INADEQUATE SPECIFICATIONS PRECLUDE THE USE OF CONVENTIONAL FORMAL ADVERTISING. IT IS ESPECIALLY USEFUL IN PROCUREMENTS REQUIRING TECHNICAL PROPOSALS, ESPECIALLY THOSE FOR COMPLEX ITEMS. IT IS CONDUCTED IN TWO STEPS:

"/I)STEP ONE CONSISTS OF THE REQUEST FOR, AND SUBMISSION, EVALUATION, AND, IF NECESSARY, DISCUSSION OF A TECHNICAL PROPOSAL, WITHOUT PRICING, TO DETERMINE THE ACCEPTABILITY OF THE SUPPLIES OR SERVICES OFFERED. AS USED IN THIS CONTEXT, THE WORD -TECHNICAL- HAS A BROAD CONNOTATION AND INCLUDES ENGINEERING APPROACH, SPECIAL MANUFACTURING PROCESSES, AND SPECIAL TESTING TECHNIQUES. WHEN IT IS NECESSARY IN ORDER TO CLARIFY BASIC TECHNICAL REQUIREMENTS, RELATED REQUIREMENTS SUCH AS MANAGEMENT APPROACH, MANUFACTURING PLAN, OR FACILITIES TO BE UTILIZED MAY BE CLARIFIED IN THIS STEP. CONFORMITY TO THE TECHNICAL REQUIREMENTS IS RESOLVED IN THIS STEP, BUT CAPACITY AND CREDIT, AS DEFINED IN 1-705.4, ARE NOT.

"/II) STEP TWO IS A FORMALLY ADVERTISED PROCUREMENT CONFINED TO THOSE WHO SUBMITTED ACCEPTABLE TECHNICAL PROPOSALS IN STEP ONE. BIDS SUBMITTED IN STEP TWO ARE EVALUATED AND THE AWARDS MADE IN ACCORDANCE WITH PARTS 3 AND 4 OF THIS SECTION.' THESE PROVISIONS WOULD APPEAR TO VEST CONSIDERABLE DISCRETION IN RESPONSIBLE AGENCY OFFICIALS IN DETERMINING THE QUANTITY OF TECHNICAL INFORMATION REQUIRED TO BE SUBMITTED BY BIDDERS IN THE INITIAL STAGE OF TWO-STEP PROCUREMENTS. IN VIEW THEREOF, AND OF THE RATIONALE ADVANCED IN SUPPORT OF THE TECHNICAL DATA REQUIRED BY THE LRFTP, WE CANNOT CONCLUDE THAT THE DATA REQUIREMENTS WERE UNJUSTIFIED.

ACCORDINGLY, WE FIND NO MATERIAL BASIS FOR OBJECTING TO THE PROCEDURES FOLLOWED IN THIS PROCUREMENT.