B-163476, MAR. 29, 1968

B-163476: Mar 29, 1968

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INCORPORATED: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED FEBRUARY 2. WAIVER OF FIRST ARTICLE TESTING WAS SPECIFICALLY GRANTED TO SOURCES LISTED ON THE REFERENCED HUGHES DRAWING BUT ITT JENNINGS. WAS THE ONLY SOURCE SO LISTED. IN THE EVENT AWARD WAS TO BE MADE TO A BIDDER REQUIRED TO FURNISH FIRST ARTICLE TEST REPORTS. THE BID ON THE SECOND ALTERNATIVE WAS PREDICATED UPON CONTRACT DSA-900-68-C-1106 AWARDED TO YOU ON JULY 27. CONTRACT 1106 TEST REPORTS WERE BEING EVALUATED BY THE DESC TECHNICAL DIVISION. IF AWARD COULD HAVE BEEN MADE ON A FIRST ARTICLE APPROVAL WAIVER BASIS TO YOUR COMPANY A CONSIDERABLE SAVING WOULD HAVE RESULTED. THE CONTRACTING OFFICER DETERMINED IT TO BE IN THE BEST INTEREST OF THE GOVERNMENT TO POSTPONE AWARD UNTIL EVALUATION OF YOUR TEST REPORTS WAS COMPLETED.

B-163476, MAR. 29, 1968

TO TORR LABORATORIES, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED FEBRUARY 2, 1968, PROTESTING AGAINST ANY AWARD ADVERSE TO YOUR INTEREST MADE BY THE DEFENSE ELECTRONIC SUPPLY CENTER (DESC), DAYTON, OHIO, UNDER INVITATION FOR BIDS NO. DSA-900-68-B-1906.

THAT INVITATION REQUESTED BIDS ON A FIRST ARTICLE APPROVAL NOT REQUIRED (1AA) OR A FIRST ARTICLE APPROVAL REQUIRED (1AB) BASIS FOR INCREMENTAL QUANTITIES OF RELAY, ARMATURE TO BE MANUFACTURED LAW HUGHES AIRCRAFT DWG NO. 719023-2, REV. A, MIL-R-5757D, 20 SEPT. 60 AND AMEND NO. 4, 18 MAR. 65. WAIVER OF FIRST ARTICLE TESTING WAS SPECIFICALLY GRANTED TO SOURCES LISTED ON THE REFERENCED HUGHES DRAWING BUT ITT JENNINGS, THE OTHER BIDDER, WAS THE ONLY SOURCE SO LISTED. THE GOVERNMENT ALSO RESERVED THE RIGHT TO WAIVE FIRST ARTICLE TESTING FOR A BIDDER WHO HAD PREVIOUSLY MET THE PREPRODUCTION TESTING REQUIREMENTS. IN THE EVENT AWARD WAS TO BE MADE TO A BIDDER REQUIRED TO FURNISH FIRST ARTICLE TEST REPORTS, SUCH REPORTS WOULD BE DUE 75 DAYS AFTER THE EFFECTIVE DATE OF THE CONTRACT.

YOUR COMPANY BID ALTERNATIVELY ON A FIRST ARTICLE APPROVAL REQUIRED BASIS AND ON A WAIVER BASIS AS HAVING PREVIOUSLY MET PREPRODUCTION TESTING REQUIREMENTS. THE BID ON THE SECOND ALTERNATIVE WAS PREDICATED UPON CONTRACT DSA-900-68-C-1106 AWARDED TO YOU ON JULY 27, 1967, FOR IDENTICAL ITEMS REQUIRING THE SUBMISSION OF PREPRODUCTION TEST REPORTS. AT THE TIME OF BID OPENING ON THE INSTANT PROCUREMENT, CONTRACT 1106 TEST REPORTS WERE BEING EVALUATED BY THE DESC TECHNICAL DIVISION. IF AWARD COULD HAVE BEEN MADE ON A FIRST ARTICLE APPROVAL WAIVER BASIS TO YOUR COMPANY A CONSIDERABLE SAVING WOULD HAVE RESULTED. FOR THAT REASON, THE CONTRACTING OFFICER DETERMINED IT TO BE IN THE BEST INTEREST OF THE GOVERNMENT TO POSTPONE AWARD UNTIL EVALUATION OF YOUR TEST REPORTS WAS COMPLETED.

ON JANUARY 4, 1968, THE TECHNICAL DIVISION RELEASED ITS EVALUATION OF THE CONTRACT 1106 TEST REPORTS CONCLUDING THAT IN VIEW OF FAILURES AND TEST DEFICIENCIES, IT WAS UNLIKELY THE CONTRACTOR WOULD BE ABLE TO MEET THE TEST REQUIREMENTS ON A REDESIGNED ITEM. IT WAS ALSO NOTED THAT RETESTING OR PREPRODUCTION TESTING OF ANOTHER COMPANY WOULD REQUIRE A PERIOD OF 417 DAYS. THIS ELONGATED TEST PERIOD WAS NECESSITATED BY THE LIFE TEST REQUIREMENT FOR 10,000 CONSECUTIVE HOURS WHICH HAD PREVIOUSLY BEEN ERRONEOUSLY UNDERSTOOD TO BE ONLY 1,000 HOURS. AS A RESULT OF THIS, SUBMISSION OF TEST REPORTS WITHIN 75 DAYS AFTER AWARD UNDER CONTRACT 1106 AND THE PRESENT INVITATION WAS IMPOSSIBLE. THE CONTRACTING OFFICER FOR CONTRACT 1106 DETERMINED THAT THE TEST REPORT FAILURES IN AREAS UNRELATED TO THE LIFE TEST WERE SO WIDESPREAD AS TO MAKE THE TORR UNIT UNACCEPTABLE IN ANY EVENT AND ON JANUARY 29, 1968, SENT YOUR COMPANY A TELEGRAPHIC NOTICE OF DEFAULT BASED ON FAILURE TO MAKE DELIVERY OF AN ACCEPTABLE FIRST ARTICLE TEST REPORT. FURTHER, IN VIEW OF THE DEFECT IN THE INVITATION WHICH MADE AWARD ON A FIRST ARTICLE APPROVAL BASIS IMPOSSIBLE, THE CONTRACTING OFFICER DETERMINED TO CANCEL THE INVITATION FOR BIDS. YOUR COMPANY AND ITT JENNINGS WERE NOTIFIED BY LETTER ON FEBRUARY 7, 1968, THAT THE INVITATION WAS SO CANCELLED.

THE ADMINISTRATIVE AGENCY HAS THE PRIMARY RESPONSIBILITY FOR DRAFTING SPECIFICATIONS TO REFLECT THE ACTUAL NEEDS OF THE GOVERNMENT IN SUCH TERMS AS WILL PERMIT THE BROADEST FIELD OF COMPETITION CONSISTANT WITH THOSE NEEDS. THE EXERCISE OF DISCRETION BY THE PROCUREMENT ACTIVITY IN DETERMINING THE ACTUAL NEEDS OF THE GOVERNMENT IS NOT SUBJECT TO OUR REVIEW IN THE ABSENCE OF BAD FAITH. SEE 45 COMP. GEN. 365. CLEARLY, NEITHER YOUR COMPANY, NOR ANY OTHER, COULD MEET THE SPECIFICATION REQUIRING PREPRODUCTION TESTING, INCLUDING A 10,000 HOUR LIFE TEST, WITHIN 75 DAYS. YOUR FIRM ALSO COULD NOT QUALIFY AS BEING LISTED ON THE REFERENCED HUGHES DRAWING AS ONLY ITT JENNINGS WAS LISTED. THE ONLY OTHER METHOD OF CONFORMING TO THE SPECIFICATIONS WAS BY RECEIVING A WAIVER OF PREPRODUCTION TESTING AS A BIDDER OFFERING A PRODUCT WHICH HAD PREVIOUSLY MET THE PREPRODUCTION TESTING REQUIREMENTS, HAD BEEN PREVIOUSLY ACCEPTED BY THE GOVERNMENT AND HAD PERFORMED SATISFACTORILY UNDER OPERATIONAL CONDITIONS. SEE PAGE 2 OF ATTACHMENT B TO INVITATION FOR BIDS. WHILE THERE IS SOME EVIDENCE THAT YOU DISPUTE THE VALIDITY OF THE REJECTION OF YOUR PRODUCT BY PREPRODUCTION TESTING UNDER CONTRACT 1106, IT IS UNDISPUTED THAT THE GOVERNMENT REFUSED ACCEPTANCE OF YOUR PRODUCT AND THAT YOUR COMPANY DID NOT SATISFACTORILY (OR OTHERWISE) PERFORM UNDER OPERATIONAL CONDITIONS. ACCORDINGLY, AWARD COULD NOT BE MADE TO YOUR COMPANY UNDER THIS INVITATION NOR COULD YOUR FAILURE TO SATISFY THE TESTING REQUIREMENT BE WAIVED AS A MINOR INFORMALITY. 17 COMP. GEN. 554.

FOR THE ABOVE REASON AND IN VIEW OF THE DETERMINATION OF THE CONTRACTING OFFICER TO CANCEL THIS INVITATION PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION 2-404.1 FOR INADEQUATE SPECIFICATIONS, WE MUST DENY YOUR PROTEST.