B-162321, DEC. 21, 1967

B-162321: Dec 21, 1967

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BIDS WERE OPENED ON APRIL 27. THE FOLLOWING BIDS WERE RECEIVED: PICKER NUCLEAR $32. 000 THE INVITATION INCLUDES AT PAGE 3 A CLAUSE ENTITLED "BIDDER'S QUALIFICATIONS" WHICH PROVIDES: "BIDDER'S QUALIFICATIONS: "BIDS WILL ONLY BE CONSIDERED FROM THOSE FIRMS THAT ARE REGULARLY ESTABLISHED IN THE ACCELERATOR EQUIPMENT MANUFACTURING BUSINESS. WHO CAN DEMONSTRATE THAT THEY HAVE SUCCESSFULLY MANUFACTURED AND DELIVERED ACCELERATOR EQUIPMENT OF LIKE OR SIMILAR TYPE. "FAILURE TO FURNISH THIS INFORMATION WITH THE BID WILL RENDER THE BID NONRESPONSIVE". WERE SUBMITTED BY PICKER NUCLEAR TO THE PROCURING OFFICE PRIOR TO BID OPENING IN CONNECTION WITH THIS PROCUREMENT. THAT PICKER NUCLEAR WAS THIS MANUFACTURER'S SOLE DISTRIBUTOR FOR THAT TYPE OF EQUIPMENT AND THAT PICKER NUCLEAR ASSUMED ALL RESPONSIBILITY FOR DELIVERY.

B-162321, DEC. 21, 1967

TO TEXAS NUCLEAR CORPORATION:

WE REFER TO YOUR LETTER OF AUGUST 18, 1967, PROTESTING AGAINST THE AWARD OF A CONTRACT TO PICKER NUCLEAR DIVISION OF PICKER X-RAY CORPORATION UNDER THE ADVERTISED SOLICITATION NO. F 19650-67-B-1342, ISSUED ON MARCH 31, 1967, BY THE DEPARTMENT OF THE AIR FORCE, ELECTRONIC SYSTEMS DIVISION (AFSC), L. G. HANSCOM FIELD, BEDFORD, MASSACHUSETTS, FOR THE PROCUREMENT OF AN ACCELERATOR SYSTEM INCLUDING A 300 KV ACCELERATOR. BIDS WERE OPENED ON APRIL 27, 1967, AND THE FOLLOWING BIDS WERE RECEIVED:

PICKER NUCLEAR $32,972

TEXAS NUCLEAR 36,436

HIGH VOLTAGE ENGINEERING

CORPORATION 59,000

THE INVITATION INCLUDES AT PAGE 3 A CLAUSE ENTITLED "BIDDER'S QUALIFICATIONS" WHICH PROVIDES: "BIDDER'S QUALIFICATIONS: "BIDS WILL ONLY BE CONSIDERED FROM THOSE FIRMS THAT ARE REGULARLY ESTABLISHED IN THE ACCELERATOR EQUIPMENT MANUFACTURING BUSINESS, FOR A PERIOD OF NOT LESS THAN ONE (1) YEAR, AND WHO CAN DEMONSTRATE THAT THEY HAVE SUCCESSFULLY MANUFACTURED AND DELIVERED ACCELERATOR EQUIPMENT OF LIKE OR SIMILAR TYPE, AS CALLED FOR IN THIS BID. BIDDERS SHALL SUBMIT WITH THEIR BID A STATEMENT OF FACTS INDICATING THE FOLLOWING:

"1. THE TYPE AND DESIGN OF ACCELERATOR EQUIPMENT MANUFACTURED.

2. NAME/S) OF FIRM/S) AND LOCATION OF SAME FURNISHED SUCH EQUIPMENT (STREET, CITY AND STATE).

3. CONTRACT OR ORDER NUMBER, DATE, TIME AND PLACE OF DELIVERY. "FAILURE TO FURNISH THIS INFORMATION WITH THE BID WILL RENDER THE BID NONRESPONSIVE".

TWO LETTERS, DATED APRIL 14 AND APRIL 18, 1967, WERE SUBMITTED BY PICKER NUCLEAR TO THE PROCURING OFFICE PRIOR TO BID OPENING IN CONNECTION WITH THIS PROCUREMENT. TOGETHER WITH THE LETTERS, PICKER NUCLEAR FORWARDED LITERATURE, SPECIFICATION SHEETS, AND DRAWINGS ITS PROPOSED ACCELERATOR SYSTEM. THE LETTER OF APRIL 18 ADVISED THAT THE PROPOSED ACCELERATORS WOULD BE MANUFACTURED BY ACCELERATORS, INCORPORATED, AUSTIN, TEXAS; THAT PICKER NUCLEAR WAS THIS MANUFACTURER'S SOLE DISTRIBUTOR FOR THAT TYPE OF EQUIPMENT AND THAT PICKER NUCLEAR ASSUMED ALL RESPONSIBILITY FOR DELIVERY, SALES AND SERVICES ON THE PROPOSED SYSTEM. A LISTING OF SOME OF THE USERS OF ACCELERATORS FURNISHED BY PICKER NUCLEAR WAS TRANSMITTED WITH THE LETTER OF APRIL 14. PICKER NUCLEAR ALSO ADVISED THAT IT HAD MANUFACTURED PORTABLE NEUTRON GENERATORS SINCE 1961 AND THAT ACCELERATORS, INCORPORATED, HAS MANUFACTURED ACCELERATORS FOR OVERTWO YEARS.

PURSUANT TO A PREAWARD SURVEY IT WAS FOUND THAT PICKER NUCLEAR IS A DIVISION OF PICKER X-RAY CORPORATION, WHICH IS A WHOLLY OWNED SUBSIDIARY OF C.I.T. CORPORATION; THAT THE ACCELERATOR SYSTEM WOULD BE MANUFACTURED FOR PICKER NUCLEAR BY ACCELERATORS, INCORPORATED; THAT PICKER NUCLEAR WAS THE SOLE DISTRIBUTOR FOR ACCELERATORS, INCORPORATED, AND THAT PICKER NUCLEAR TAKES FULL TITLE AND RESPONSIBILITY FOR THE INSTRUMENTS. THE PREAWARD SURVEY WAS, THEREFORE, PERFORMED ON ACCELERATORS, INCORPORATED, AND IT WAS FOUND THAT THIS CONCERN WAS EXPERIENCED AND CAPABLE OF MANUFACTURING THE SPECIFIED EQUIPMENT. PICKER NUCLEAR WAS FOUND TO BE FINANCIALLY RESPONSIBLE AND THE PREAWARD SURVEY INCLUDED A RECOMMENDATION THAT AWARD BE MADE TO PICKER NUCLEAR. IN VIEW OF THE FAVORABLE RECOMMENDATION IN THE PREAWARD SURVEY AND PICKER NUCLEAR'S ASSUMPTION OF RESPONSIBILITY TO SELL, DELIVER AND SERVICE THE EQUIPMENT OF ACCELERATORS, INCORPORATED, AN AWARD WAS MADE TO PICKER NUCLEAR ON AUGUST 3, 1967. THE DEPARTMENT OF THE AIR FORCE HAS ADVISED THAT ACCELERATORS, INCORPORATED, IS A COMPANY REGULARLY ESTABLISHED AS A MANUFACTURER OF THE SPECIFIED EQUIPMENT FOR MORE THAN A YEAR.

BY LETTER OF AUGUST 18, 1967, YOU PROTESTED AGAINST THE AWARD TO PICKER NUCLEAR. YOU CONTEND THAT PICKER NUCLEAR WAS NOT QUALIFIED FOR AWARD SINCE THIS BIDDER DOES NOT MEET THE REQUIREMENTS OF THE "BIDDER'S QUALIFICATIONS" CLAUSE. IN THIS CONNECTION, YOU ADVISE THAT YOU HAVE DOCUMENTED REASONS TO BELIEVE THAT PICKER NUCLEAR IS NOT A MANUFACTURER OF ACCELERATORS AND IF PICKER NUCLEAR, AUSTIN, TEXAS, WAS DESIGNATED AS THE PLACE OF MANUFACTURE, IT COULD EASILY BE VERIFIED THAT THIS INFORMATION IS ERRONEOUS. YOU RAISE THE QUESTION WHETHER PICKER NUCLEAR IS, IN FACT, THE MANUFACTURER OF THE ACCELERATORS FOR THE USERS LISTED IN THE ENCLOSURE TO ITS LETTER OF APRIL 14. YOU CONTEND THAT THE BID SPECIFICATIONS REQUIRE STANDARD COMMERCIAL EQUIPMENT WHICH COULD NOT BE FURNISHED BY PICKER NUCLEAR OR ITS PROPOSED SUBCONTRACTORS WITHIN THE SPECIFIED DELIVERY TIME. IT IS YOUR ASSERTION THAT A 120-DAY DELIVERY SCHEDULE IS NOT REALISTIC WHEN THE MANUFACTURE OF A PROTOTYPE IS INVOLVED. YOU CONTEND THAT THE INSTANT AWARD CONSTITUTES PREFERENTIAL TREATMENT FOR PICKER NUCLEAR SINCE GOVERNMENT FUNDS ARE BEING USED TO DEVELOP A PROTOTYPE FOR THIS BIDDER AND THAT YOU INVESTED SOME $300,000 FOR SUCH DEVELOPMENT. YOU ADVISE THAT A 150 KV ACCELERATOR NEUTRON GENERATOR IS NOT SIMILAR TO A 300 KV RESEARCH ACCELERATOR AND THAT SUBMISSION OF A LIST OF USERS OF 150 KV ACCELERATORS SHOULD NOT HAVE BEEN CONSTRUED AS PROPER SUPPORT OF VENDOR QUALIFICATIONS. YOU CONTEND THAT IT WOULD TAKE 4 TO 5 MONTHS TO DELIVER A COMMERCIAL HIGH VOLTAGE POWER SUPPLY SYSTEM SIMILAR TO THE TYPE REQUIRED BY THE SPECIFICATIONS.

IT SHOULD BE NOTED THAT THE LOW BID CONTAINED NO EXCEPTION TO THE SPECIFICATIONS. THEREFORE, PICKER NUCLEAR IS OBLIGATED TO FURNISH AN ACCELERATOR SYSTEM AS SPECIFIED AND IN ACCORDANCE WITH THE DELIVERY SCHEDULE, AND FAILURE TO COMPLY COULD BE A BREACH OF CONTRACT.

YOU HAVE RAISED QUESTIONS THAT CONCERN BOTH THE LEGALITY OF THE AWARD TO PICKER NUCLEAR AND THE ADMINISTRATION OF PICKER NUCLEAR'S CONTRACT. WILL ADDRESS OURSELVES INITIALLY TO THE LEGALITY OF THE AWARD MADE TO PICKER NUCLEAR.

IN THIS CASE THE PROSPECTIVE PRIME CONTRACTOR COULD NOT BY ITSELF MEET ALL THE REQUIREMENTS OF THE "BIDDER'S QUALIFICATIONS" CLAUSE; HOWEVER, THE PREAWARD SURVEY DISCLOSED THAT WHEN THE QUALIFICATIONS OF THE PRIME CONTRACTOR ARE CONSIDERED IN CONNECTION WITH THE QUALIFICATIONS OF ITS SUBCONTRACTOR, THE PROSPECTIVE PRIME CONTRACTOR IS FOUND RESPONSIBLE. VIEW OF THE DISTRIBUTORSHIP ARRANGEMENT BETWEEN PICKER NUCLEAR AND ITS MANUFACTURER, THERE SEEMS TO BE NO DOUBT THAT PICKER NUCLEAR CAN FURNISH ACCELERATORS PRODUCED BY ACCELERATORS, INCORPORATED.

IN THE ABSENCE OF A SPECIFIC PROVISION IN THE INVITATION EITHER LIMITING OR PRECLUDING SUBCONTRACTING FOR JUSTIFIABLE REASONS, WE HAVE NO LEGAL OBJECTION TO THE MANUFACTURE OF THE ITEM BY A SUBCONTRACTOR. IT IS SETTLED THAT REQUIREMENTS IN A CLAUSE SUCH AS THE "BIDDER'S QUALIFICATIONS" CLAUSE DEAL WITH THE RESPONSIBILITY OF A BIDDER. SEE 43 COMP. GEN. 275. WE HAVE HELD THAT AWARD OF A CONTRACT MAY BE LIMITED TO THOSE BIDDERS MEETING SPECIFIED QUALITATIVE AND QUANTITATIVE EXPERIENCE REQUIREMENTS IN A SPECIALIZED FIELD WHERE THE BIDDING CONDITIONS SO PROVIDE AND A DETERMINATION HAS BEEN MADE THAT THE INTERESTS OF THE GOVERNMENT WOULD BE SERVED THEREBY. SEE 37 COMP. GEN. 196. HOWEVER, IN 39 COMP. GEN. 173, WE INDICATED THAT OUR OFFICE DOES NOT CONDONE THE REJECTION OF BIDS OF RESPONSIBLE BIDDERS BECAUSE AS A TECHNICAL MATTER THEY DO NOT MEET PRESCRIBED EXPERIENCE REQUIREMENTS. A BIDDER'S EXPERIENCE IS ONLY ONE OF SEVERAL FACTORS TO BE CONSIDERED IN DETERMINING A BIDDER'S RESPONSIBILITY. WITH RESPECT TO ADMINISTRATIVE DETERMINATIONS OF A BIDDER'S RESPONSIBILITY, IT IS AN ESTABLISHED PRINCIPLE THAT SUCH DETERMINATIONS WILL NOT BE QUESTIONED BY OUR OFFICE UNLESS SHOWN TO BE ARBITRARY, CAPRICIOUS OR MADE IN BAD FAITH. THE QUESTION FOR CONSIDERATION THEN, IS NOT WHETHER PICKER NUCLEAR SPECIFICALLY MEETS THE EXPERIENCE REQUIREMENTS OF THE "BIDDER'S QUALIFICATIONS" CLAUSE, BUT WHETHER THE ADMINISTRATIVE OFFICE ACTED REASONABLY IN MAKING ITS DETERMINATION THAT PICKER NUCLEAR WAS A RESPONSIBLE BIDDER. ALSO FOR CONSIDERATION IS WHTHER THE QUALIFICATIONS OF PICKER NUCLEAR'S MANUFACTURER COULD BE CONSIDERED IN MAKING THE DETERMINATION REGARDING THE RESPONSIBILITY OF PICKER NUCLEAR.

ARMED SERVICES PROCUREMENT REGULATION (ASPR) SEC. 1-906 SPECIFICALLY RECOGNIZES THAT TO THE EXTENT A PROSPECTIVE CONTRACTOR PROPOSES TO PERFORM THE CONTRACT BY SUBCONTRACTING, DETERMINATION OF A PROSPECTIVE SUBCONTRACTOR'S RESPONSIBILITY MAY BE NECESSARY IN ORDER TO DETERMINE THE RESPONSIBILITY OF THE PROSPECTIVE PRIME CONTRACTOR. IT IS OUR VIEW THAT IN THIS SITUATION THE RESPONSIBILITY OF PICKER NUCLEAR WAS PROPERLY DETERMINED BASED IN PART ON A CONSIDERATION OF THE SUBCONTRACTOR'S QUALIFICATIONS. SEE 46 COMP. GEN. 326, 330. CONSEQUENTLY, WE HAVE NO OBJECTION TO THE PREAWARD SURVEY OF ACCELERATORS, INCORPORATED, AND SINCE THE RECORD DOES NOT SHOW THAT THE CONTRACTING OFFICER'S DETERMINATION REGARDING PICKER NUCLEAR'S RESPONSIBILITY WAS ARBITRARY, CAPRICIOUS OR MADE IN BAD FAITH, WE HAVE NO LEGAL BASIS FOR QUESTIONING THE AWARD MADE.

THE OTHER ALLEGATIONS MADE BY YOU HAVE BEEN BROUGHT TO THE ATTENTION OF THE DEPARTMENT OF THE AIR FORCE. AS INDICATED, IF PICKER NUCLEAR DOES NOT MEET THE REQUIREMENTS OF THE SPECIFICATIONS, INCLUDING THE DELIVERY SCHEDULE, THE CONTRACT COULD BE TERMINATED FOR DEFAULT. THIS, HOWEVER, WOULD BE A MATTER OF CONTRACT ADMINISTRATION. SINCE PICKER NUCLEAR'S PERFORMANCE WILL HAVE TO BE WITHIN THE DEFINED LIMITS OF THE CONTRACT AND THERE IS NO INDICATION THAT THE AIR FORCE WILL ACCEPT LESS THAN WHAT IS REQUIRED, IT HAS NOT BEEN ESTABLISHED THAT GOVERNMENT FUNDS ARE BEING USED UNFAIRLY TO DEVELOP A PROTOTYPE FOR PICKER NUCLEAR. WITH RESPECT TO YOUR ALLEGATION REGARDING THE MANUFACTURER'S ADDRESS, ACCELERATORS, INCORPORATED, THE MANUFACTURER OF THE ITEM, IS LOCATED IN AUSTIN, TEXAS. EXCEPT FOR YOUR UNSUPPORTED ALLEGATION, WE HAVE NO INFORMATION THAT THE ACCELERATORS REFERRED TO IN PICKER NUCLEAR'S LIST OF USERS WERE MANUFACTURED BY OTHER THAN PICKER NUCLEAR OR ITS SUBCONTRACTOR. PURSUANT TO OUR REVIEW WE HAVE NOT FOUND ANY SPECIFIC REQUIREMENT THAT THE ITEM MUST BE COMMERCIALLY AVAILABLE EQUIPMENT. THE CONTRACTING OFFICER STATES THAT UPON ADVICE FROM TECHNICAL PERSONNEL, IT HAS BEEN DETERMINED THAT A 150 KV ACCELERATOR MANUFACTURED BY PICKER NUCLEAR (OR ITS SUBCONTRACTOR) IS SIMILAR ELECTRICALLY TO THE 300 KV MACHINE SPECIFIED IN THE INVITATION AND THAT A 150 KV MACHINE CAN BE UPGRADED TO 300 KV BY PRESSURIZING THE ACCELERATOR AND USING A HIGH VOLTAGE TRANSFORMER. THE CONTRACTING OFFICER HAS BROUGHT TO OUR ATTENTION A TELEGRAM FROM A MANUFACTURER WHICH INDICATES THAT THE CRITICAL ELECTRICAL COMPONENT CAN BE DELIVERED WITHIN 45 DAYS AFTER RECEIPT OF ORDER. WITH RESPECT TO THE 120-DAY DELIVERY SCHEDULE, NONE OF THE BIDDERS TOOK EXCEPTION TO THE REQUIREMENT, AND EXCEPT FOR YOUR ALLEGATION WE HAVE NO INDICATION THAT A 120-DAY DELIVERY SCHEDULE WAS UNREALISTIC.