B-163382, MAR. 21, 1968

B-163382: Mar 21, 1968

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T. MURRAY TOOMEY: REFERENCE IS MADE TO YOUR TELEGRAM AND LETTER OF JANUARY 23. THE LETTER SOLICITATION WAS ADDRESSED TO HOL-GAR AND REQUESTED A PRICE PROPOSAL FOR 791 EACH. THIS REQUIREMENT WAS TO BE ADDED TO CONTRACT DAAK01-67-C-1425 WITH HOL-GAR BY SUPPLEMENTAL AGREEMENT. NEGOTIATION WAS CONDUCTED SOLELY WITH HOL-GAR UNDER THE STANDARDIZATION AND INTERCHANGEABILITY NEGOTIATION AUTHORITY OF 10 U.S.C. 2304 (A) (13) AND PARAGRAPH 3-213.1 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR). YOUR PROTEST IS ON THE BASIS THAT THE PROCUREMENT DOES NOT QUALIFY FOR AWARD OF THE CONTRACT BY NEGOTIATION AND YOU CONTEND THAT: "* * * STANDARDIZATION IS BEING SOUGHT AND USED TO LIMIT COMPETITION FOR AN ITEM THAT IS A NONSOPHISTICATED AND ELEMENTARY SIMPLE TYPE GENERATOR SET THAT COULD BE ASSEMBLED AND MANUFACTURED BY ANY COMPANY IN THE INDUSTRY.

B-163382, MAR. 21, 1968

TO MR. T. MURRAY TOOMEY:

REFERENCE IS MADE TO YOUR TELEGRAM AND LETTER OF JANUARY 23, 1968, PROTESTING, ON BEHALF OF LIBBY WELDING CO., INC. (LIBBY), AGAINST SOLE SOURCE NEGOTIATIONS WITH HOL-GAR MANUFACTURING CO., INC. (HOL-GAR), UNDER A LETTER SOLICITATION (PRON 44-8-A1409), RELEASED BY THE UNITED STATES ARMY MOBILITY EQUIPMENT COMMAND, ST. LOUIS, MISSOURI, ON JANUARY 31, 1968.

THE LETTER SOLICITATION WAS ADDRESSED TO HOL-GAR AND REQUESTED A PRICE PROPOSAL FOR 791 EACH, 30KW GENERATOR SETS, 60HZ, HOL-GAR MODEL CE301- AC/WK, FSN 6115-077-8600. THIS REQUIREMENT WAS TO BE ADDED TO CONTRACT DAAK01-67-C-1425 WITH HOL-GAR BY SUPPLEMENTAL AGREEMENT. NEGOTIATION WAS CONDUCTED SOLELY WITH HOL-GAR UNDER THE STANDARDIZATION AND INTERCHANGEABILITY NEGOTIATION AUTHORITY OF 10 U.S.C. 2304 (A) (13) AND PARAGRAPH 3-213.1 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR). YOUR PROTEST IS ON THE BASIS THAT THE PROCUREMENT DOES NOT QUALIFY FOR AWARD OF THE CONTRACT BY NEGOTIATION AND YOU CONTEND THAT:

"* * * STANDARDIZATION IS BEING SOUGHT AND USED TO LIMIT COMPETITION FOR AN ITEM THAT IS A NONSOPHISTICATED AND ELEMENTARY SIMPLE TYPE GENERATOR SET THAT COULD BE ASSEMBLED AND MANUFACTURED BY ANY COMPANY IN THE INDUSTRY. STANDARDIZATION WAS NOT INTENDED FOR THIS PURPOSE, AND IT IS IN THE BEST INTEREST OF THE GOVERNMENT TO PERMIT COMPETITION FOR THE PROCUREMENT IN QUESTION.'

IT APPEARS FROM THE RECORD THAT THIS REQUIREMENT HAS AN URGENCY PRIORITY DESIGNATOR 02 AND THE GENERATOR SETS ARE TO BE USED FOR PROVIDING THE ELECTRICAL POWER SOURCE IN MISSILE SYSTEMS AND FOR RADAR AND COMPUTERS IN THE STRATEGIC ARMY COMMUNICATION SYSTEMS IN SOUTHEAST ASIA, ALASKA, HAWAII, AND OTHER AREAS OUTSIDE THE UNITED STATES.

PURSUANT TO THE AUTHORITY CONTAINED IN 10 U.S.C. 2304 (A) (13), STANDARDIZATION OF THESE 30KW GENERATOR SETS WAS APPROVED BY THE ASSISTANT SECRETARY OF THE ARMY (INSTALLATIONS AND LOGISTICS) ON FEBRUARY 20, 1967, FOR A PERIOD OF 2 YEARS, AND THEREAFTER A "DETERMINATION AND FINDINGS" WAS EXECUTED BY THE ASSISTANT SECRETARY OF THE ARMY ON DECEMBER 18, 1967, IN WHICH HE FOUND THAT THE EQUIPMENT WAS TECHNICAL EQUIPMENT; THAT THE PROCUREMENT THEREOF WITHOUT ADVERTISING WAS NECESSARY TO ASSURE STANDARDIZATION AND INTERCHANGEABILITY OF PARTS; AND THAT SUCH STANDARDIZATION AND INTERCHANGEABILITY WAS NECESSARY IN THE PUBLIC INTEREST. THE JUSTIFICATION THEREFOR AND THE PURPOSE OF STANDARDIZATION WAS TO LIMIT THE TYPES OF ITEMS IN THE SUPPLY SYSTEM, THEREBY ACCOMPLISHING THE MAXIMUM INTERCHANGEABILITY OF PARTS WITH THE RESULTANT SAVINGS IN THE COST OF THE PREPARATION OF TECHNICAL MANUALS, ELIMINATION OF THE REQUIREMENT FOR THE INITIAL PURCHASE OF REPAIR PARTS, AND A REEVALUATION OF REPAIR PARTS IN STOCK AND IN STORAGE. INCREASED SYSTEM EFFICIENCY WAS ALSO EXPECTED DUE TO THE REDUCTION IN THE MAINTENANCE PIPELINE WHICH WOULD BE REQUIRED WITH THE LIMITED TYPES OF ITEMS IN THE SYSTEM.

SECTION 2304 (A) (13) OF TITLE 10, U.S.C. AUTHORIZES THE HEAD OF A DEFENSE AGENCY TO NEGOTIATE A CONTRACT IF THE PURCHASE OR CONTRACT IS FOR EQUIPMENT THAT HE DETERMINES TO BE TECHNICAL EQUIPMENT WHOSE STANDARDIZATION AND THE INTERCHANGEABILITY OF WHOSE PARTS ARE NECESSARY IN THE PUBLIC INTEREST AND WHOSE PROCUREMENT BY NEGOTIATION IS NECESSARY TO ASSURE SUCH STANDARDIZATION AND INTERCHANGEABILITY. UNDER 10 U.S.C. 2310 (A), SUCH DETERMINATION TO NEGOTIATE IS FINAL AS A MATTER OF LAW.

ASPR 3-213.2, WHICH SETS FORTH THE POLICIES AND PROCEDURES TO BE EMPLOYED IN PROCUREMENTS TO BE NEGOTIATED UNDER 10 U.S.C. 2304 (A) (13), READS, IN PART, AS FOLLOWS:

"3-213.2 APPLICATION.

"/A) THE AUTHORITY OF THIS PARAGRAPH 3-213 MAY BE USED FOR PROCURING ADDITIONAL UNITS AND REPLACEMENT ITEMS OF SPECIFIED MAKES AND MODELS OF TECHNICAL EQUIPMENT AND PARTS, WHICH ARE ITHER: (I) FOR TACTICAL USE, OR (II) AND INTEGRAL PART OF OR USED IN DIRECT SUPPORT OF A WEAPONS SYSTEM, OR (III) FOR USE IN ALASKA, HAWAII OR OUTSIDE THE REMAINDER OF THE UNITED STATES, IN THEATERS OF OPERATIONS, ON BOARD NAVAL VESSELS, OR AT ADVANCED OR DETACHED BASES; AND WHICH HAVE BEEN ADOPTED AS STANDARD ITEMS OF SUPPLY IN ACCORDANCE WITH PROCEDURES PRESCRIBED BY EACH RESPECTIVE DEPARTMENT. CURRENT OR RECURRING PROCUREMENT REQUIREMENT FOR THE ITEM SHALL BE PRESENT.

"/B) THIS AUTHORITY WOULD APPLY, FOR EXAMPLE, WHENEVER IT IS NECESSARY:

"/I) TO LIMIT THE VARIETY AND QUANTITY OF PARTS THAT MUST BE CARRIED IN STOCK;

"/II) TO MAKE POSSIBLE, BY STANDARDIZATION, THE AVAILABILITY OF PARTS THAT MAY BE INTERCHANGED AMONG ITEMS OF DAMAGED EQUIPMENT DURING COMBAT OR OTHER EMERGENCY;

"/III) TO PROCURE FROM SELECTED SUPPLIERS TECHNICAL EQUIPMENT WHICH IS AVAILABLE FROM A NUMBER OF SUPPLIERS BUT WHICH WOULD HAVE SUCH VARYING PERFORMANCE OR DESIGN CHARACTERISTICS (NOTWITHSTANDING DETAILED SPECIFICATIONS AND RIGID INSPECTION) AS WOULD PREVENT STANDARDIZATION AND INTERCHANGEABILITY OF PARTS; "

WE HAVE BEEN ADVISED THAT THESE GENERATOR SETS ARE NEEDED TO PROVIDE ELECTRICAL POWER FOR MISSILE SYSTEMS AND FOR RADAR AND COMPUTERS IN THE STRATEGIC ARMY COMMUNICATION SYSTEMS. WE HAVE HELD THAT THE TERM "TECHNICAL EQUIPMENT" USED IN 10 U.S.C. 2304 (A) (13) IS NOT RESTRICTED TO EQUIPMENT LISTED IN ASPR 3-108 AS MILITARY-TYPE EQUIPMENT BUT IS SUFFICIENTLY BROAD TO INCLUDE MOST MECHANICAL EQUIPMENT USED FOR MILITARY OR DEFENSE PURPOSES. SEE B-150756, MAY 9, 1963.

BASED ON THE FACTS AS REPORTED TO US, WE MUST CONCLUDE THAT THE PROCUREMENT IN QUESTION IS IN ACCORDANCE WITH THE APPLICABLE LAW AND THE REGULATIONS. ON THE RECORD, OUR OFFICE WOULD NOT BE JUSTIFIED IN QUESTIONING EITHER THE STANDARDIZATION ACTION OR THE NEGOTIATION CONDUCTED SOLELY WITH HOL-GAR. SINCE STANDARDIZATION AND INTERCHANGEABILITY OF THE GENERATOR SETS WAS DETERMINED TO BE "NECESSARY IN THE PUBLIC INTEREST," AND SINCE THAT DETERMINATION IS FINAL BY FORCE OF STATUTE, THE FACT THAT IT WAS FOUND NECESSARY TO LIMIT THE PROCUREMENT TO ONE MANUFACTURER (HOL- GAR) IN ORDER TO ACHIEVE SUCH STANDARDIZATION AND INTERCHANGEABILITY DOES NOT AFFORD A VALID BASIS FOR US TO OBJECT TO THIS PROCUREMENT. SEE 37 COMP. GEN. 24.