B-162682, B-162758, B-162759, B-162760, B-162825, DEC. 26, 1967

B-162682, B-162758, B-162759, B-162760, B-162825, DEC. 26, 1967

BIDS - NEGOTIATED - SOLE SOURCE DECISION TO STELMA INC., RE PROTEST AGAINST AWARD BY DEPT. OF THE NAVY OF 5 NEGOTIATED CONTRACTS TO TELEDATA, INC. FOR ELECTRONIC ASSEMBLIES FOR REPLACEMENT IN DATA ANALYSIS CENTER. A MANUFACTURER WHO HAD BEEN SOLE SUPPLIER OF COMPLEX COMPUTER EQUIPMENT COMPONENTS AND WHO OBJECTS TO SOLICITATION FROM ANOTHER SUPPLIER WHO HAS DEMONSTRATED AN ABILITY TO FURNISH THE COMPONENTS AT SUBSTANTIALLY LOWER PRICES HAS NOT FURNISHED ANY BASIS TO INDICATE THAT COMPETITION PROCUREMENT IS NOT FEASIBLE UNDER ASPR 3-102 (C). ALTHOUGH IT MIGHT HAVE BEEN GOOD PROCUREMENT POLICY TO HAVE ADDED "OR EQUAL" TO THE PURCHASE DESCRIPTIONS SUCH OMISSION FROM A NEGOTIATED SOLICITATION DOES NOT PRECLUDE CONSIDERATION OF OFFERS OF "EQUAL" ITEMS.

TO STELMA, INCORPORATED:

REFERENCE IS MADE TO YOUR PROTEST BY LETTER DATED OCTOBER 11, 1967, AS SUPPLEMENTED BY LETTERS DATED OCTOBER 17 AND 24, AGAINST THE AWARD BY THE DEPARTMENT OF THE NAVY OF FIVE NEGOTIATED CONTRACTS TO TELEDATA, INC. (TELEDATA), UNDER VARIOUS REQUESTS FOR PROPOSALS (RFP) AND REQUESTS FOR QUOTATIONS (RFQ) ISSUED BY THE NAVY ELECTRONICS SUPPLY OFFICE, GREAT LAKES, ILLINOIS, DURING THE PERIOD JUNE 1, 1967 TO SEPTEMBER 12, 1967. THE PROCUREMENT ITEMS ARE ELECTRONIC ASSEMBLIES AND PRINTED CIRCUIT ASSEMBLIES, WHICH WERE IDENTIFIED IN EACH SOLICITATION ONLY BY YOUR PART NUMBERS AND FEDERAL STOCK NUMBERS, AND THEY ARE TO BE USED AS REPLACEMENTS FOR LIKE ITEMS IN THE DAC-V DATA ANALYSIS CENTER EQUIPMENT. EXCEPT AS OTHERWISE INDICATED, NEGOTIATION WAS BASED ON THE AUTHORITY CONTAINED IN 10 U.S.C. 2304 (A) (10) RELATING TO PURCHASES OR CONTRACTS FOR PROPERTY OR SERVICES FOR WHICH IT IS IMPRACTICABLE TO OBTAIN COMPETITION.

YOU STATE THAT THE DAC-V IS A GROUP OF FIVE UNITS OF COMPLEX DIGITAL COMPUTER-TYPE EQUIPMENT, WHICH WAS DEVELOPED BY YOU AT PRIVATE EXPENSE AND IS COVERED BY FIVE PATENTS ISSUED TO YOU. YOU FURTHER STATE THAT FOR THE PAST SEVEN YEARS YOU HAVE BEEN THE SOLE SUPPLIER TO THE GOVERNMENT OF MORE THAN 1,000 "EQUIPMENTS" AND THAT NO SPECIFICATIONS OR OTHER INFORMATION ARE AVAILABLE FOR THE MANUFACTURE OF THE ITEMS BY ANY ONE OTHER THAN YOU, THE GOVERNMENT HAVING DECLINED YOUR OFFER, MADE IN DECEMBER 1964, TO FURNISH A PROCUREMENT DATA PACKAGE FOR COMPETITIVE PURPOSES. CONSEQUENTLY, YOU CONTEND, ABSENT SPECIFICATIONS OR TESTING REQUIREMENTS IN THE SOLICITATIONS, TELEDATA NEED NOT COMPLY WITH ANY MANUFACTURING SPECIFICATIONS OR PERFORMANCE TEST REQUIREMENTS, NEED NOT ASSURE THE GOVERNMENT THAT ITS SPARE PARTS WILL OPERATE SATISFACTORILY IN THE END EQUIPMENT WITH WHICH THEY ARE ASSOCIATED WITHOUT COMPROMISING THE COMPLEX TOLERANCES OF THE OVER-ALL DAC-V, AND NEED NOT INCLUDE IN ITS PRICES EITHER TESTING COSTS OR OTHER COSTS INHERENT IN THE CRITICAL MANUFACTURING TOLERANCES REQUIRED FOR PROPER PERFORMANCE OF THE SPARE ASSEMBLY. CONVERSELY, YOU CONTEND, AS THE SOLE MANUFACTURER OF THE END EQUIPMENT AND THE COMPANY WHOSE PART NUMBER IS SPECIFICALLY DESIGNATED IN THE SOLICITATIONS, YOU ARE AUTOMATICALLY RESPONSIBLE FOR THE PROPER PERFORMANCE OF THE SPARE PART AND ITS ASSOCIATED END EQUIPMENT AND MUST INCLUDE TEST COSTS IN YOUR PRICE. IN ADDITION, YOU POINT OUT THAT THE BENEFIT OF YOUR WARRANTY ON THE DAC-V END EQUIPMENT, WHICH REMAINS IN EFFECT WHEN YOU FURNISH THE SPARE PARTS, IS LOST TO THE GOVERNMENT WHEN THE EQUIPMENT IS ADVERSELY AFFECTED BY A TELEDATA-SUPPLIED PART NOT MANUFACTURED TO THE CORRECT TOLERANCES.

BASED ON THE FOREGOING, IT IS YOUR POSITION THAT TO THE EXTENT THE SOLICITATIONS DID NOT IMPOSE UPON TELEDATA THE SAME OBLIGATIONS WHICH YOU WOULD BEAR HAD YOU RECEIVED THE AWARDS, I.E., TESTING AT YOUR OWN EXPENSE AND ASSURANCE OF PROPER PERFORMANCE AND COMPATIBILITY WITH THE END EQUIPMENT, THE SOLICITATIONS WERE DEFECTIVE AND THE AWARDS MADE THEREUNDER WERE NOT IN ACCORD WITH THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), WERE PREJUDICIAL TO THE GOVERNMENT AND TO YOU, AND WERE CLEARLY NOT IN THE BEST INTEREST OF THE GOVERNMENT. ACCORDINGLY, YOU REQUEST THAT EACH OF THE CONTRACTS AWARDED TO TELEDATA BE RESCINDED.

THE RECORD INDICATES THAT UNTIL LESS THAN TWO YEARS AGO, THE PROCURING ACTIVITY PROCURED COMPONENTS FOR THE DAC-V FROM YOU ON A SOLE SOURCE BASIS. THE HISTORY OF THE PROCUREMENTS, HOWEVER, DISCLOSES THAT GOVERNMENT PROCUREMENT PERSONNEL ENCOUNTERED EXTREME DIFFICULTY IN ATTEMPTING TO OBTAIN FROM YOU TIMELY PROPOSALS, ADEQUATE COST DATA OR ANY COST DATA AT ALL, RESPONSIVE AND TIMELY RESPONSES TO TELEPHONE CALLS AND LETTERS, AND DELIVERY IN ACCORDANCE WITH CONTRACT TERMS. FURTHER, SEVERE UNEXPLAINED DELINQUENCY IN DELIVERY OF CRITICAL MATERIAL WAS A CONSTANT PROBLEM.

THE RECORD FURTHER INDICATES THAT AROUND MAY 1966, TELEDATA PERSONNEL COMMUNICATED WITH THE PROCURING ACTIVITY AND STATED THAT BY USING THEIR OWN TECHNICAL KNOWLEDGE AND AVAILABLE GOVERNMENT DRAWINGS AND TECHNICAL MANUALS FOR THE COMPONENTS OF THE DAC-V, TELEDATA COULD PRODUCE AND DELIVER TO THE GOVERNMENT, AT MUCH LOWER COST THAN YOUR CONTRACT PRICES, COMPONENTS IDENTICAL TO THOSE BEARING YOUR PART NUMBERS. FOLLOWING SUBSEQUENT CONFERENCES, AT WHICH TELEDATA TECHNICAL PERSONNEL PRESENTED CONVINCING VERBAL EVIDENCE TO THE PROCURING ACTIVITY THAT IT COULD DELIVER MATERIAL IDENTICAL TO YOUR PART NUMBERS AT MUCH LOWER COST TO THE GOVERNMENT, THE PROCURING ACTIVITY COMMENCED SOLICITING TELEDATA FOR OFFERS TO FURNISH THE ITEMS.

ONE OF THE EARLY SOLICITATIONS TO WHICH TELEDATA RESPONDED WAS RFP N00126 -67-R-025912, ISSUED AUGUST 8, 1966, WITH A CLOSING DATE OF SEPTEMBER 7, 1966, WHICH COVERED 24 ITEMS IDENTIFIED ONLY BY YOUR NAME AND PART NUMBERS. TELEDATA'S PROPOSAL, WHICH WAS TIMELY, OFFERED PRICES WHICH WERE SUBSTANTIALLY LOWER THAN THE PRICES OFFERED IN YOUR COMPETING PROPOSAL, WHICH WAS NOT SUBMITTED UNTIL 50 DAYS AFTER THE CLOSING DATE. THE PRICE VARIANCES ON SOME OF THE ITEMS WERE MORE THAN 100 PERCENT. IN ADDITION, THE DEFENSE CONTRACT ADMINISTRATION SERVICES (DCAS) MADE A COMPLETE PRE- AWARD SURVEY OF TELEDATA, WHICH DISCLOSED THAT TELEDATA SPECIALIZED IN THE MANUFACTURE OF TELEGRAPHIC COMMUNICATIONS EQUIPMENT AND COAXIAL SWITCHES AND WAS CURRENTLY SUPPLYING THE ITEMS LISTED IN THE RFP TO THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION AND OTHER GOVERNMENT AGENCIES, AND DCAS THEREFORE MADE A FAVORABLE RECOMMENDATION FOR AWARD TO TELEDATA WITHOUT ANY EXCEPTION. ACCORDINGLY, TELEDATA WAS AWARDED CONTRACT NO. N00126-67-C 1136/FBM) ON NOVEMBER 21, 1966, AND THE PROCURING ACTIVITY REPORTS THAT MANY OF THE CONTRACT ITEMS HAVE BEEN COMPLETELY DELIVERED WITH NO REPORTS OF REJECTION OR UNSATISFACTORY PERFORMANCE FROM EITHER THE SOURCE INSPECTOR OR THE RECEIVING ACTIVITY AND THAT PERFORMANCE OF THE BALANCE OF THE CONTRACT IS PROCEEDING IN A SATISFACTORY MANNER.

IT IS REPORTED ALSO THAT SUBSEQUENT TO THE AWARD OF CONTRACT NO. N00126- 67-C-1136/FBM), TELEDATA WAS AWARDED MANY CONTRACTS AND PURCHASE ORDERS FOR SIMILAR ITEMS IDENTIFIED ONLY BY YOUR PART NUMBERS, ALL OF WHICH HAVE BEEN SATISFACTORILY COMPLETED (INCLUDING APPROXIMATELY 12 CONTRACTS AND 11 PURCHASE ORDERS COMPLETED DURING FISCAL YEAR 1967) WITH NO REPORTS FROM THE END USERS OF UNSATISFACTORY PERFORMANCE OF THE ITEMS IN THE EQUIPMENT, AND THAT SUCH CONTRACTS HAVE RESULTED IN A SUBSTANTIAL SAVING TO THE GOVERNMENT AND FASTER DELIVERY THAN COULD HAVE BEEN OBTAINED FROM ANY OTHER SOURCE. THE ACTIVITY OBSERVES, IN THIS CONNECTION, THAT WHILE THE COMPETITION HAS DRASTICALLY REDUCED THE ORIGINAL VARIANCES BETWEEN YOUR PRICES AND THE PRICES OFFERED BY TELEDATA FOR IDENTICAL ITEMS, SUBSTANTIAL VARIANCES STILL EXIST.

THE ELECTRONICS SUPPLY OFFICE HAS MADE COMMENTS ON EACH OF THE FIVE PROCUREMENTS WITH WHICH YOUR PROTEST IS CONCERNED, AND ADVISES THAT THE COMMENTS OF A GENERAL NATURE INCLUDED IN ITS STATEMENTS REGARDING RFP NO. N00126-68-R-X-4809 ARE EQUALLY APPLICABLE TO ALL FIVE PROCUREMENTS. THE SUBSTANCE OF THE ADMINISTRATIVE COMMENTS IS SET FORTH BELOW.

1. RFP NO. N00126-68-R-X-4809, OUR REFERENCE B-162682. THE SOLICITATION, WHICH WAS ISSUED ON AUGUST 7, 1967, TO FOUR PROSPECTIVE SOURCES, INCLUDING TELEDATA AND YOU, SPECIFIED A CLOSING DATE OF SEPTEMBER 6. THERE WERE FOUR PROCUREMENT ITEMS, THREE OF WHICH WERE FOR VARIOUS QUANTITIES OF ELECTRONIC ASSEMBLIES AND ONE WAS FOR PRINTED CIRCUIT ASSEMBLIES. TELEDATA SUBMITTED A TIMELY OFFER WITH UNIT PRICES RANGING FROM $170 TO $220, WHICH WERE CONSIDERED REASONABLE FOR ALL FOUR ITEMS IN THE LIGHT OF THE HISTORY OF PRIOR PROCUREMENTS FROM TELEDATA OF THE SAME OR SIMILAR MATERIAL. YOUR OFFER, WHICH WAS RECEIVED BY THE PROCURING ACTIVITY SUBSEQUENT TO THE CLOSING DATA, WAS THEREFORE DETERMINED TO BE LATE AND WAS RETURNED TO YOU AS UNACCEPTABLE AFTER IT HAD BEEN OPENED AND EVALUATED AS PROVIDED IN ASPR 3-506 (C) (III). COMPARISON OF YOUR LATE OFFER WITH TELEDATA'S TIMELY OFFER SHOWED THAT TELEDATA QUOTED ON THE TOTAL PROCUREMENT, A PRICE APPROXIMATELY $3,000 LOWER THAN YOURS.

ALTHOUGH A WRITTEN DETERMINATION OF TELEDATA'S RESPONSIBILITY WAS NOT REQUIRED UNDER ASPR 1-904.2 (I) SINCE THE ESTIMATED PURCHASE UNDER THE RFP WAS LESS THAN $10,000, THE ABILITY OF TELEDATA TO DELIVER THE REQUIRED MATERIAL IN ACCORDANCE WITH CONTRACT SPECIFICATIONS AND WITHIN THE SPECIFIED DELIVERY SCHEDULE WAS CAREFULLY CONSIDERED BY THE PROCURING ACTIVITY PRIOR TO THE AWARD TO TELEDATA, ON SEPTEMBER 27, OF CONTRACT NO. N00126-68-C-4817. FURTHER, DISCUSSIONS WHICH WERE HELD WITH TELEDATA, BOTH PRIOR AND SUBSEQUENT TO THE AWARD, CONFIRMED THE VIEW OF THE PROCURING ACTIVITY THAT THE COMBINATION OF OUTLINE DRAWINGS FURNISHED BY THE ACTIVITY, THE NAVY TECHNICAL MANUAL RELATING TO THE DAC-V ANALYSIS CENTER EQUIPMENT AND TELEDATA'S OWN INTIMATE KNOWLEDGE OF REQUIRED TEST PROCEDURES WAS SUFFICIENT TO ENABLE TELEDATA TO DELIVER MATERIAL IDENTICAL TO THE MATERIAL DESCRIBED BY YOUR PART NUMBERS, AND THE PROCURING ACTIVITY STATES THAT ACTUAL EXPERIENCE EVIDENCES WITHOUT DOUBT THAT SUCH MATERIAL WILL PERFORM SATISFACTORILY IN THE DAC-V EQUIPMENT. AS AN ADDED PRECAUTION, HOWEVER, ALL EXISTING TELEDATA CONTRACTS ARE BEING MODIFIED TO REQUIRE SUBMISSION FOR APPROVAL TO THE CONTRACTING OFFICER OF THE TELEDATA TEST PROCEDURES AND ASSOCIATED PERTINENT QUALITY CONTROL DATA SUFFICIENT TO ASSURE PERFORMANCE OF DELIVERED MATERIAL IN THE EQUIPMENT, AND SUCH DATA IS BEING DELIVERED WITHOUT CHARGE TO THE GOVERNMENT WITH LIMITED RIGHTS.

IN ADDITION, THE CONTRACTING OFFICER HAS REPORTEDLY RECEIVED ASSURANCE THAT TELEDATA IS NOT USING ANY OF YOUR DRAWINGS TO PERFORM THE CONTRACTS BUT IS RELYING ENTIRELY ON THE NAVY-FURNISHED DRAWINGS AND TECHNICAL MANUAL AND ITS OWN TECHNICAL KNOWLEDGE. CONCERNING THE FACT THAT PORTIONS OF THE EQUIPMENT ARE COVERED BY PATENTS, THE PROCURING ACTIVITY POINTS OUT THAT ALL OF THE TELEDATA CONTRACTS INCLUDE THE PATENT INDEMNITY CLAUSE SET FORTH IN ASPR 9-103.1 (A) FOR THE PROTECTION OF THE GOVERNMENT, THE USE OF WHICH IS PERMITTED IN NEGOTIATED CONTRACTS PURSUANT TO ASPR 9-103.3.

2. RFQ NO. M73245/67, OUR REFERENCE B-162759. THIS SOLICITATION, WHICH WAS ISSUED ON JUNE 1, 1967, SPECIFIED A CLOSING DATE OF JULY 3. THERE WERE THREE PROCUREMENT ITEMS, TWO FOR VARIOUS PRIMARY AND ALTERNATE QUANTITIES OF ELECTRONIC ASSEMBLIES AND ONE FOR VARIOUS PRIMARY AND ALTERNATE QUANTITIES OF PRINTED CIRCUIT ASSEMBLIES. TIMELY QUOTATIONS WERE RECEIVED FROM YOU AND TELEDATA, THE ONLY SOURCES SOLICITED. TELEDATA OFFERED COMPLETE DELIVERY OF ALL ITEMS, F.O.B. DESTINATION, WITHIN 120 DAYS AFTER RECEIPT OF ORDER AS OPPOSEDTO YOUR OFFER OF COMPLETE DELIVERY OF ALL ITEMS, F.O.B. ORIGIN, WITHIN 240 DAYS AFTER RECEIPT OF ORDER. TELEDATA'S UNIT PRICES WERE LOWER BY 40 PERCENT OR MORE THAN YOURS ON BOTH THE PRIMARY QUANTITIES AND THE ALTERNATE QUANTITIES. FURTHER, AFTER NEGOTIATION OF PRICE AND QUANTITY, TELEDATA WAS AWARDED CONTRACT NO. N00126-68-C-4376 ON AUGUST 28, 1967, FOR THE PRIMARY QUANTITY OF ONE ITEM AND ALTERNATE QUANTITIES OF THE OTHER TWO ITEMS AT THE UNIT PRICE OF $180, WHICH WAS THE ORIGINAL UNIT PRICE OFFERED BY TELEDATA ON THE PRIMARY QUANTITY OF THE ITEM SO AWARDED BUT WAS SUBSTANTIALLY LOWER THAN ANY OF THE UNIT PRICES WHICH TELEDATA HAD QUOTED ON THE OTHER TWO ITEMS FOR EITHER THE PRIMARY OR ALTERNATE QUANTITIES THEREOF. PERFORMANCE OF THE CONTRACT IS REPORTED TO BE PROCEEDING IN A SATISFACTORY MANNER, AND PARTIAL DELIVERIES HAVE ALREADY BEEN MADE.

3. RFP NO. N00126-67-R-M80921, OUR REFERENCE B-162758. THIS SOLICITATION, WHICH WAS ISSUED AS A TOTAL SMALL BUSINESS SET-ASIDE ON JULY 3, 1967, SPECIFIED A CLOSING DATE OF AUGUST 7, WAS SENT TO TELEDATA AND YOU ONLY, AND RESULTED IN SUBMISSION OF TIMELY PROPOSALS BY BOTH TELEDATA AND YOU. THERE WERE EIGHT PROCUREMENT ITEMS, FIVE FOR VARIOUS QUANTITIES OF ELECTRONIC ASSEMBLIES AND THREE FOR VARIOUS QUANTITIES OF PRINTED CIRCUIT ASSEMBLIES. TELEDATA WAS LOW ON THE SIX ITEMS COVERED BY ITS OFFER, AND WAS AWARDED CONTRACT NO. N00126-68-C 4581 ON SEPTEMBER 5, 1967, FOR ALL SIX ITEMS. ALTHOUGH DELIVERIES ARE NOT YET DUE, IT IS REPORTED THAT TELEDATA HAS ALREADY MADE PARTIAL DELIVERIES. THE REMAINING TWO ITEMS, ON WHICH NO PRICES WERE QUOTED BY TELEDATA, WERE AWARDED TO YOU ON SEPTEMBER 1, 1967, UNDER CONTRACT NO. N00126-68-C-4568.

4. RFP NO. N00126-68-R-M84291, OUR REFERENCE B-162760. THIS SOLICITATION WAS ISSUED ON JULY 18, 1967, WITH A CLOSING DATE OF AUGUST 17, AND EIGHT PROSPECTIVE SOURCES WERE SOLICITED, INCLUDING TELEDATA AND YOU, THE ONLY SOURCES WHO SUBMITTED PROPOSALS. THE FOUR PROCUREMENT ITEMS, IDENTIFIED BY YOUR PART NUMBERS, CONSISTED OF TWO ITEMS OF VARIOUS QUANTITIES OF PRINTED CIRCUIT ASSEMBLIES AND TWO ITEMS OF VARIOUS QUANTITIES OF ELECTRONIC ASSEMBLIES. TELEDATA'S OFFER, COVERING ONLY TWO OF THE ITEMS, QUOTED UNIT PRICES OF LITTLE MORE THAN FIFTY PERCENT OF THOSE QUOTED BY YOU, WITH COMPLETE DELIVERY WITHIN 180 DAYS AFTER RECEIPT OF CONTRACT, AS AGAINST YOUR OFFER OF DELIVERY WITHIN 240 DAYS AFTER RECEIPT OF CONTRACT. ACCORDINGLY, TELEDATA WAS AWARDED BOTH SUCH ITEMS UNDER CONTRACT NO. N00126-68-C 4734 ON SEPTEMBER 25, 1967. THE REMAINING TWO ITEMS, ON WHICH YOU WERE THE SOLE OFFEROR, WERE AWARDED TO YOU UNDER CONTRACT NO. N00126- 68 C-4746 ON SEPTEMBER 26, 1967. 5. RFQ NO. 7-X-B279, OUR REFERENCE B 162825. THIS SOLICITATION, WHICH WAS ISSUED ON SEPTEMBER 12, 1967, WITH A CLOSING DATE OF OCTOBER 12, 1967, LISTED ONLY ONE ITEM, COVERING A PRIMARY QUANTITY OF EIGHT UNITS AND THREE LARGER VARYING ALTERNATE QUANTITIES OF ASSEMBLIES. BOTH TELEDATA AND YOU, THE ONLY SOURCES SOLICITED, RETURNED QUOTATIONS. TELEDATA OFFERED TO DELIVER THE PRIMARY QUANTITY AT A UNIT PRICE OF $190, F.O.B. DESTINATION WITHIN 180 DAYS AFTER RECEIPT OF ORDER. YOU OFFERED TO SUPPLY THE SAME QUANTITY AT A UNIT PRICE OF $232.34, DELIVERY F.O.B. ORIGIN WITHIN 240 DAYS AFTER RECEIPT OF ORDER. ACCORDINGLY, PURCHASE ORDER NO. N00126-68-M-DU55, DATED OCTOBER 25, 1967, WAS ISSUED TO TELEDATA AS THE LOW OFFEROR UNDER THE NEGOTIATION AUTHORITY IN 10 U.S.C. 2304 (A) (3) RELATING TO PURCHASES OF LESS THAN $2,500.

BASED ON THE FOREGOING, IT IS THE POSITION OF THE PROCURING ACTIVITY THAT ALL FIVE SOLICITATIONS AND THE RELATED AWARDS ARE VALID UNDER THE EXISTING REGULATIONS, PARTICULARLY ASPR 1-300.1 AND 3-101, AND THEREFORE SHOULD BE SUSTAINED.

UNDER 10 U.S.C. 2304 (G), THE CONTRACTING AGENCY IS CHARGED WITH THE RESPONSIBILITY, WHEN NEGOTIATING PROCUREMENTS IN EXCESS OF $2,500 IN WHICH RATES OR PRICES ARE NOT FIXED BY LAW OR REGULATION AND IN WHICH TIME OF DELIVERY WILL PERMIT, OF SOLICITING PROPOSALS FROM THE MAXIMUM NUMBER OF QUALIFIED SOURCES CONSISTENT WITH THE NATURE AND REQUIREMENTS OF THE SUPPLIES OR SERVICES TO BE PROCURED. ASPR 3-101, RELATING TO NEGOTIATED PROCUREMENTS, INCLUDES SIMILAR LANGUAGE. ASPR 1 300.1 SETS FORTH THE BASIC POLICY OF THE DEPARTMENT OF DEFENSE THAT ALL PROCUREMENTS, WHETHER BY FORMAL ADVERTISING OR BY NEGOTIATION, SHALL BE MADE ON A COMPETITIVE BASIS TO THE MAXIMUM PRACTICABLE EXTENT. ASPR 3-102 (C), RELATING TO GENERAL REQUIREMENTS FOR NEGOTIATION, READS AS FOLLOWS:

"/C) NEGOTIATED PROCUREMENTS SHALL BE ON A COMPETITIVE BASIS TO THE MAXIMUM PRACTICAL EXTENT. WHEN A PROPOSED PROCUREMENT APPEARS TO BE NECESSARILY NONCOMPETITIVE, THE PURCHASING ACTIVITY IS RESPONSIBLE NOT ONLY FOR ASSURING THAT COMPETITIVE PROCUREMENT IS NOT FEASIBLE, BUT ALSO FOR ACTING WHENEVER POSSIBLE TO AVOID THE NEED FOR SUBSEQUENT NONCOMPETITIVE PROCUREMENTS. THIS ACTION SHOULD INCLUDE BOTH EXAMINATION OF THE REASONS FOR THE PROCUREMENT BEING NONCOMPETITIVE AND STEPS TO FOSTER COMPETITIVE CONDITIONS FOR SUBSEQUENT PROCUREMENTS, PARTICULARLY AS TO THE AVAILABILITY OF COMPLETE AND ACCURATE DATA, REASONABLENESS OF DELIVERY REQUIREMENTS (1-305.2 (A) (, AND POSSIBLE BREAKOUT OF COMPONENTS FOR COMPETITIVE PROCUREMENT. EXCEPT FOR PROCUREMENT OF ELECTRIC POWER OR ENERGY, GAS (NATURAL OR MANUFACTURED), WATER, OR OTHER UTILITY SERVICES, AND PROCUREMENT OF EDUCATIONAL SERVICES FROM NONPROFIT INSTITUTIONS, CONTRACTS IN EXCESS OF $10,000 SHALL NOT BE NEGOTIATED ON A NONCOMPETITIVE BASIS WITHOUT PRIOR REVIEW AT A LEVEL HIGHER THAN THE CONTRACTING OFFICER TO ASSURE COMPLIANCE WITH THIS SUBPARAGRAPH.'

ASPR 1-1206.1 (A) PERMITS THE USE OF A PURCHASE DESCRIPTION IN LIEU OF A SPECIFICATION, SUBJECT TO RESTRICTION AGAINST REPETITIVE USE, WHERE NO APPLICABLE SPECIFICATION EXISTS, BUT PROVIDES THAT, GENERALLY, THE MINIMUM ACCEPTABLE PURCHASE DESCRIPTION IS THE IDENTIFICATION OF A REQUIREMENT BY USE OF A BRAND NAME FOLLOWED BY THE WORDS "OR EQUAL.' ASPR 1-1206.5 (B) PROVIDES THAT THE BRAND NAME OR EQUAL PROVISIONS PRESCRIBED FOR USE IN FORMAL ADVERTISED PROCUREMENTS MAY BE SUITABLY MODIFIED FOR USE IN REQUESTS FOR PROPOSALS IN NEGOTIATED PROCUREMENTS, BUT REQUIRES, WHERE SUCH PROVISIONS ARE NOT INCLUDED IN THE RFP, THAT THE CONTRACTING AGENCY INFORM PROSPECTIVE CONTRACTORS THAT PROPOSALS OFFERING SUPPLIES DIFFERING FROM THOSE IDENTIFIED BY BRAND NAME WILL BE CONSIDERED IF THE CONTRACTING OFFICER DETERMINES THAT SUCH OFFERED SUPPLIES ARE EQUAL IN ALL MATERIAL RESPECTS TO THE SUPPLIES IDENTIFIED BY BRAND NAME. ASPR 1-1206.4 (A) PROVIDES THAT BIDS OR PROPOSALS SHALL NOT BE REJECTED BECAUSE OF MINOR DIFFERENCES IN DESIGN, CONSTRUCTION, OR FEATURES WHICH DO NOT AFFECT THE SUITABILITY OF THE SUPPLIES OFFERED.

THE FACTS SET FORTH ABOVE INDICATE THAT PRIOR TO THE ISSUANCE OF THE FIVE SOLICITATIONS WITH WHICH YOUR PROTEST IS CONCERNED AND NOTWITHSTANDING THE ABSENCE OF SPECIFICATIONS OR DRAWINGS FURNISHED BY YOU, TELEDATA SUPPLIED TO THE GOVERNMENT, UNDER NEGOTIATED SOLICITATIONS WHICH INCLUDED PURCHASE DESCRIPTIONS CITING YOUR NAME AND PART NUMBERS, VARIOUS COMPONENTS OF THE DAC-V, WHICH HAVE PERFORMED SATISFACTORILY IN THE END EQUIPMENT; THAT TELEDATA'S PRICES, WHICH WERE SUBSTANTIALLY LOWER THAN YOUR PRICES, RESULTED IN A CONSIDERABLE SAVING TO THE GOVERNMENT; AND THAT DELIVERY OF THE ITEMS WAS FASTER THAN COULD HAVE BEEN OBTAINED FROM ANY OTHER SOURCE. SUCH EVIDENCE, IN OUR OPINION, WARRANTS THE CONCLUSION THAT THERE EXISTED NO BASIS FOR THE JUSTIFICATION TO THE EFFECT THAT COMPETITIVE PROCUREMENT IS NOT FEASIBLE WHICH WOULD HAVE BEEN REQUIRED BY ASPR 3-102 (C) TO SUPPORT NONCOMPETITIVE PROCUREMENTS FROM YOU, AND THEREFORE THE CONDUCT OF THE FIVE PROCUREMENTS ON A COMPETITIVE BASIS MUST BE VIEWED AS HAVING BEEN IN ACCORD WITH THE STATUTE AND THE REGULATIONS.

WHILE IT MIGHT HAVE BEEN GOOD PROCUREMENT POLICY FOR THE PROCURING ACTIVITY TO HAVE ADDED THE WORDS "OR EQUAL" TO THE PURCHASE DESCRIPTIONS, THE OMISSION OF SUCH WORDS FROM A NEGOTIATED SOLICITATION DOES NOT PRECLUDE CONSIDERATION OF OFFERS OF "EQUAL" ITEMS ABSENT A PROHIBITION IN THE SOLICITATION TO SUCH EFFECT, THE OFFERORS IN SUCH CASE BEING FREE TO OFFER ITEMS MEETING THE GOVERNMENT'S REQUIREMENTS AND THE CONTRACTING AGENCY BEING FREE TO DISCUSS SUCH OFFERS AND TO MAKE AWARDS BASED THEREON IF DETERMINED TO BE IN THE BEST INTEREST OF THE GOVERNMENT. B-148288, JUNE 1, 1962; B-148575, AUGUST 1, 1962; B 160424, MARCH 29, 1967.

IN ADDITION, THE REPORTED FACTS SHOW NOT ONLY THAT TELEDATA IS BEING REQUIRED TO FURNISH TEST INFORMATION AND QUALITY CONTROL DATA WHICH WILL ASSURE THE GOVERNMENT THAT THE DELIVERED COMPONENTS WILL PERFORM SATISFACTORILY IN THE END EQUIPMENT, BUT THAT TELEDATA HAS OFFERED TO FURNISH THE DATA TO THE GOVERNMENT AT NO CHARGE WITH LIMITED RIGHTS. ACCORDINGLY, THERE APPEARS TO BE NO SUPPORT FOR YOUR CONTENTION THAT TELEDATA WILL BE HELD TO LESSER STANDARDS THAN WOULD HAVE BEEN REQUIRED OF YOU TO THE DISADVANTAGE OF EITHER YOU OR THE GOVERNMENT. THE VARIOUS OTHER ISSUES WHICH YOU HAVE RAISED ARE, IN OUR OPINION, ADEQUATELY RESOLVED BY THE STATEMENTS OF THE PROCURING ACTIVITY AS SET FORTH ABOVE AND THEREFORE APPEAR TO REQUIRE NO DISCUSSION BY OUR OFFICE.

FOR THE REASONS STATED, WE SEE NO VALID BASIS TO QUESTION THE PROCUREMENT PROCEDURES EMPLOYED BY THE PROCURING ACTIVITY OR THE VALIDITY OF THE AWARDS TO TELEDATA, ALL OF WHICH HAVE BEEN SHOWN TO HAVE BEEN MADE WITH THE GOVERNMENT'S INTEREST IN MIND AND IN ACCORDANCE WITH THE INTENT OF THE PROCUREMENT STATUTE AND REGULATIONS THAT COMPETITION BE SOUGHT TO THE MAXIMUM PRACTICABLE EXTENT IN THE PARTICULAR CIRCUMSTANCES. ACCORDINGLY, YOUR PROTESTS ARE DENIED.