B-161521, APR. 29, 1968

B-161521: Apr 29, 1968

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TO GENERAL HEDLUND: WE HAVE. DCSC IS DIRECTLY RESPONSIBLE FOR SOME 447. FOR THOUSANDS OF ITEMS WHICH DO NOT HAVE A FEDERAL STOCK NUMBER. FOR NO OTHER DESCRIPTIVE DATA IS AVAILABLE. FOR IT IS PROPRIETARY AND MAY ONLY BE USED FOR MAINTENANCE AND CATALOG PURPOSES. THE REPORT FURTHER ADVISES THAT DCSC ADMINISTRATIVELY SCREENS THE ITEMS IT MANAGES IN ORDER TO ELIMINATE THOSE SOLE-SOURCE PROCUREMENTS WHICH ARE NOT SUPPORTABLE AT A RATE OF TEN PER WEEK. IT IS UNCLEAR WHETHER THIS IS IN IMPLEMENTATION OF THE HIGH DOLLAR PROGRAM OR OF SOME OTHER PROGRAM. IT IS EVIDENT THAT SUCH SCREENING WILL NOT COVER VERY MANY OF THE 300. 000 ITEMS FOR WHICH DATA IS NOT AVAILABLE. THERE IS AN OBVIOUS NEED FOR ADDITIONAL MEANS OF BROADENING COMPETITION.

B-161521, APR. 29, 1968

TO GENERAL HEDLUND:

WE HAVE, BY OUR DECISION OF TODAY, COPY ENCLOSED, DENIED THE PROTEST ENTERED BEFORE THIS OFFICE BY MILTON C. GRACE ON BEHALF OF HUNT-SPILLER MANUFACTURING DIVISION, POWER PRODUCTS, INCORPORATED AGAINST THE REJECTION OF THAT FIRM'S OFFER UNDER REQUEST FOR PROPOSALS NO. DSA-700-67-R-4579 ISSUED NOVEMBER 17, 1966, BY THE DEFENSE CONSTRUCTION SUPPLY CENTER, (DCSC) COLUMBUS, OHIO.

ALTHOUGH OUR DECISION OF TODAY HAS DENIED THIS PROTEST, WE BELIEVE CERTAIN ASPECTS OF THIS PROCUREMENT WARRANT COMMENT.

THE CONTRACTING OFFICER'S REPORT CONTAINED IN THE DEFENSE SUPPLY AGENCY (DSAH-G) REPORT OF SEPTEMBER 6, 1967, TO THIS OFFICE DISCUSSES VARIOUS REASONS WHY DCSC DOES NOT POSSESS ADEQUATE DESCRIPTIVE DATA TO PREPARE THE SPECIFICATIONS NEEDED FOR FULLY COMPETITIVE PROCUREMENT.

ACCORDING TO THIS REPORT, DCSC IS DIRECTLY RESPONSIBLE FOR SOME 447,496 DCSC-MANAGED ITEMS. IN ADDITION THIS CENTER PROCURES FOR APPROXIMATELY 131,000 SERVICE-MANAGED ITEMS, AND FOR THOUSANDS OF ITEMS WHICH DO NOT HAVE A FEDERAL STOCK NUMBER.

DCSC ESTIMATES THAT 67 PERCENT OF THE 447,496 DCSC-MANAGED ITEMS CAN ONLY BE DESCRIBED BY THE MANUFACTURER'S NAME AND PART NUMBER, FOR NO OTHER DESCRIPTIVE DATA IS AVAILABLE. THE REPORT FURTHER STATES THAT IN MANY INSTANCES WHERE DCSC DOES POSSESS ADEQUATE DESCRIPTIVE DATA, IT CANNOT BE USED FOR PROCUREMENT PURPOSES, FOR IT IS PROPRIETARY AND MAY ONLY BE USED FOR MAINTENANCE AND CATALOG PURPOSES.

THE REPORT FURTHER ADVISES THAT DCSC ADMINISTRATIVELY SCREENS THE ITEMS IT MANAGES IN ORDER TO ELIMINATE THOSE SOLE-SOURCE PROCUREMENTS WHICH ARE NOT SUPPORTABLE AT A RATE OF TEN PER WEEK. IT IS UNCLEAR WHETHER THIS IS IN IMPLEMENTATION OF THE HIGH DOLLAR PROGRAM OR OF SOME OTHER PROGRAM, SUCH AS THAT REQUIRED BY DSA REGULATION NO. 4105.9 OF FEBRUARY 17, 1966,"MINIMIZING NONCOMPETITIVE PROCUREMENTS" WHICH CONCERNS SOLE-SOURCE ITEMS WITH AN ANNUAL PROCUREMENT VALUE IN EXCESS $2,500. IT IS EVIDENT THAT SUCH SCREENING WILL NOT COVER VERY MANY OF THE 300,000 ITEMS FOR WHICH DATA IS NOT AVAILABLE.

WHILE WE APPRECIATE THE FACT THAT MANAGERIAL EMPHASIS MUST BE PLACED UPON THOSE ITEMS WITH HIGH DOLLAR VALUES, THERE IS AN OBVIOUS NEED FOR ADDITIONAL MEANS OF BROADENING COMPETITION.

AS NOTED IN OUR DECISION OF TODAY TO MR. GRACE, CLAUSE 2.102 (B) (4), PAGE A 202, DCSC CONTRACT CLAUSE BOOK, EDITION 2, OF APRIL 1, 1967, PERMITS OFFERORS A WIDER DEGREE OF LATITUDE IN THE EVIDENCE NEEDED TO ESTABLISH EQUIVALENCY BETWEEN THEIR PART AND THE ORIGINAL MANUFACTURER'S PART, BY PROVIDING THAT "OTHER DATA COVERING DESIGN, MATERIALS, PERFORMANCE, ETC.' MAN BE SUBMITTED, OUR DECISION TO THE PROTESTANT STATES THAT, IN OUR OPINION, THIS LANGUAGE PERMITTING ALTERNATIVE METHODS OF DEMONSTRATING EQUIVALENCY IS SUFFICIENT TO SATISFY THE REQUIREMENT THAT COMPETITION BE ENCOURAGED TO THE FULLEST EXTENT PRACTICABLE UNDER THE CIRCUMSTANCES.

HOWEVER, THE CONTRACTING OFFICER'S REPORT, PAGE 9 AND 10, IN DISCUSSING AN EARLIER AWARD UNDER RFP DSA-700-66-NEG-7761, CREATES THE IMPRESSION THAT THE COMPETITIVE ASPECTS OF CLAUSE 2.102 (B) (4) MAY BE NULLIFIED IN PRACTICE BY A REFUSAL OF THE RESPONSIBLE TECHNICAL PERSONNEL TO CONSIDER REASONABLE ALTERNATIVE TECHNIQUES FOR ESTABLISHING EQUIVALENCY BETWEEN PRODUCTS. IN THAT CASE, THE ENGINEERING SUPPORT ACTIVITY ADVISED DCSC THAT THE DESIRED CYLINDER HEADS MUST BE PROCURED FROM THE ORIGINAL MANUFACTURER UNTIL SUCH TIME AS A COMPLETE AND DETAILED SPECIFICATION WAS DEVELOPED.

IT WOULD APPEAR THAT TECHNIQUES OTHER THAN THE PREPARATION OF A COMPLETE SPECIFICATION OR SUBMISSION OF THE ORIGINAL MANUFACTURER'S DRAWING MIGHT BE SUFFICIENT FOR DETERMINING THE EQUIVALENCY OF SUCH RELATIVELY COMMON PLACE ITEMS AS COMMERCIAL DIESEL ENGINE PARTS. AMONG POSSIBLE ALTERNATIVE METHODS FOR PROTECTING THE GOVERNMENT'S INTEREST IN INSURING THAT A PART PROPOSED BY AN ALTERNATE PRODUCER WILL PERFORM THE SAME TASK AS THE ORIGINAL MANUFACTURER'S PART IS THE SUBMISSION OF EVIDENCE OF SATISFACTORY USE BY COMMERCIAL ACTIVITIES, OR APPROVAL FOR USE BY A COMMERCIAL USER'S ASSOCIATION ON THE BASIS OF SUCCESSFUL USE BY MEMBERS. IF, AS WE ASSUME, MANY OF THE ITEMS PURCHASED BY DCSC ARE USED BY PRIVATE INDUSTRY, IN CONSTRUCTION AND ELSEWHERE, IT WOULD SEEM THAT SATISFACTORY COMMERCIAL USE MIGHT BE CONSIDERED AS A WORKABLE STANDARD OF EVALUATION.