B-164263, JUL. 25, 1968

B-164263, JUL. 25, 1968

TO M. STEINTHAL AND COMPANY, INCORPORATED:

REFERENCE IS MADE TO YOUR TELEGRAM OF MAY 8, 1968, AND SUBSEQUENT LETTER OF JUNE 7, 1968, PROTESTING AGAINST THE SOURCE RESTRICTIONS INCLUDED IN DRAWING 4-1047-18, JULY 28, 1967, BY THE UNITED STATES ARMY LIMITED WAR LABORATORY, ABERDEEN PROVING GROUND, MARYLAND. THE SUBJECT DRAWING WAS A PART OF SOLICITATION PACKAGE NO. DAAD05-68-R-0099 ISSUED FEBRUARY 12, 1968, BY THE ABERDEEN PROVING GROUND, ABERDEEN PROVING GROUND, ABERDEEN PROVING GROUND, MARYLAND, WHICH RESULTED IN A LETTER CONTRACT ISSUED APRIL 11, 1968, TO NORTHROP CAROLINA, INCORPORATED, TO PRODUCE PARACHUTE FLARE ASSEMBLIES. THE DRAWING IN QUESTION, FOR THE PARACHUTE COMPONENT OF THE PARACHUTE FLARE ASSEMBLY, DESIGNATED RAVEN INDUSTRIES AS THE ONLY APPROVED SOURCE FOR THAT ITEM.

ACCORDING TO THE JULY 2, 1968, REPORT FROM THE UNITED STATES ARMY MATERIEL COMMAND, WASHINGTON, D. C., TO THIS OFFICE, NORTHROP CAROLINA, INCORPORATED, WAS REQUIRED TO PURCHASE THE 177,000 PARACHUTES NEEDED TO COMPLETE THE FLARE ASSEMBLIES FROM RAVEN INDUSTRIES DUE TO THE NECESSITY FOR STANDARDIZATION DURING FIELD TESTING AND BECAUSE OF THE URGENCY OF THE PROJECT DUE TO THE MILITARY NEEDS IN SOUTHEAST ASIA.

THE SUBCONTRACT YOU ALLEGE TO BE UNNECESSARILY RESTRICTIVE IS A PART OF A CONTRACT TO PROCURE A LARGE NUMBER OF A RECENTLY DEVELOPED FLARE UNIT FOR FURTHER EVALUATION AND TESTING IN THE FIELD. BECAUSE OF THIS URGENT NEED FOR THE ITEM, THE PROCUREMENT WAS ASSIGNED AN ISSUE PRIORITY DESIGNATOR 02, THE HIGHEST POSSIBLE FOR THIS DEVELOPMENT COMMAND.

THE PROCURING ACTIVITY, THE ABERDEEN PROVING GROUND, ABERDEEN PROVING GROUND, MARYLAND, APPROVED, PURSUANT TO 10 U.S.C. 2304 (A) (2), SOLE SOURCE NEGOTIATIONS WITH NORTHROP CAROLINA, THE CONTRACTOR WHO HAD WORKED IN CONJUNCTION WITH THE LIMITED WAR LABORATORY IN DEVELOPING THE PARACHUTE FLARE ASSEMBLY, TO PRODUCE THE QUANTITIES DEEMED NECESSARY FOR FULL FIELD TRIALS.

CONSISTENT WITH THIS OVERALL AUTHORIZATION FOR A SOLE SOURCE PROCUREMENT, THE CONTRACT AWARDED TO NORTHROP CAROLINA DESIGNATED MANUFACTURERS FOR A NUMBER OF THE COMPONENT PARTS, INCLUDING RAVEN INDUSTRIES AS THE DESIGNATED MANUFACTURER OF THE REQUIRED PARACHUTES.

YOU CONTEND THAT UNDER ASPR 7-104.40, WHICH DIRECTS CONTRACTORS TO SELECT SUBCONTRACTORS "ON A COMPETITIVE BASIS TO THE MAXIMUM EXTENT PRACTICAL CONSISTENT WITH THE OBJECTIVES AND REQUIREMENTS OF THE CONTRACT" , THE SOLE SOURCE RESTRICTIONS ON THIS PROCUREMENT ARE IMPROPER.

FURTHER, YOU POINT OUT THAT ASPR 3-211.1 IS THE PERTINENT REGULATION PERMITTING THE USE OF NEGOTIATION FOR THE PROCUREMENT OF PRODUCTS NEEDED FOR RESEARCH, DEVELOPMENT AND TESTING. YOU CONTEND THAT A PROCUREMENT INVOLVING 177,000 PARACHUTES MUST BE CONSIDERED A QUANTITY PRODUCTION RUN WHICH IS EXPRESSLY PROHIBITED BY THE LIMITATION UPON NEGOTIATED PROCUREMENTS OF ARTICLES FOR TESTING AND EVALUATION PURPOSE SET OUT IN ASPR 3-211.3.

FINALLY, YOU ALLEGE THAT THE PARACHUTES IN QUESTION ARE RELATIVELY SIMPLE ITEMS READILY MANUFACTURED BY ANY COMPETENT PRODUCER AND THAT THEIR MANUFACTURE IS WELL WITHIN THE SKILL AND EXPERTISE OF YOUR FIRM, WHICH PRODUCES VARIOUS COMPLEX PARACHUTES FOR OTHER MORE DEMANDING MILITARY APPLICATIONS.

TREATING YOUR LAST CONTENTION FIRST, TO THE BEST OF OUR KNOWLEDGE, YOUR FIRM WOULD HAVE BEEN COMPETENT TO MANUFACTURE THE PARACHUTES UNDER THE SUBCONTRACT HAD THE GOVERNMENT BEEN IN A POSITION TO OPEN THIS PROCUREMENT TO COMPETITIVE BIDDING. HOWEVER, THE ARMY'S DECISION TO RESTRICT THIS PROCUREMENT TO CERTAIN NAMED MANUFACTURERS WAS PREMISED UPON CONSIDERATIONS OTHER THAN WHETHER ONLY THE NAMED FIRMS WERE TECHNICALLY CAPABLE OF PRODUCING THE DESIRED ITEMS.

PRIMARY AMONG THE CONSIDERATIONS LEADING TO THE SUBJECT SOURCE RESTRICTIONS WAS THE NEED TO FIELD TEST THE FLARES, FOR IT IS THE POLICY OF THE UNITED STATES ARMY TEST AND EVALUATION COMMAND TO TEST NEW ITEMS UNDER FIELD OPERATING CONDITIONS, IN ADDITION TO WHATEVER TESTS THE ITEM MAY HAVE UNDERGONE IN LABORATORIES AND DEVELOPMENT CENTERS.

TO INSURE THAT THE ARTICLE WHICH UNDERGOES FIELD TESTING AND EVALUATION IS THE SAME AS THAT DEVELOPED IN THE LABORATORY, THE ARTICLES ARE PRODUCED UNDER AS CLOSELY SIMILAR CIRCUMSTANCES AS POSSIBLE. THE ARMY THEREFORE RESTRICTS THE PROCUREMENT OF THE ITEMS NEEDED FOR FIELD EVALUATION TO THOSE MANUFACTURERS WHO PARTICIPATED IN THE DEVELOPMENT OF THE ITEM.

FOR THIS REASON THE CONTRACT TO PRODUCE THE FLARE ASSEMBLIES FOR ENGINEERING TEST/SERVICE TEST, AS THE FULL FIELD EVALUATION IS TERMED, WAS LIMITED TO NORTHROP CAROLINA, THE CONTRACTOR WHICH PRODUCED THE EXPERIMENTAL UNITS.

SIMILARLY, NORTHROP CAROLINA WAS OBLIGED TO PURCHASE DESIGNATED COMPONENTS, FROM THE SOURCES WHICH HAD PRODUCED THE COMPONENTS USED IN THE DEVELOPMENT UNITS, INCLUDING RAVEN INDUSTRIES IN THE CASE OF THE PARACHUTES.

THE ARMY REPORT FURTHER ADVISES THAT THE QUANTITIES IN THIS PROCUREMENT WERE INCREASED BY THE INCLUSION OF ADDITIONAL TEST UNITS FOR TWO OTHER SERVICES, AT THEIR REQUEST.

UNDER THE CIRCUMSTANCES HERE, OF THE PRESSING NEED OF THE MILITARY SERVICES FOR A SUITABLE FLARE FOR THEIR OPERATIONS IN SOUTHEAST ASIA, IT WOULD APPEAR THAT A LARGE NUMBER OF OPERATIONAL EXPERIENCES COULD BE OBTAINED WITH THE FLARE OVER A RELATIVELY SHORT TIME SPAN BY MEANS OF A WIDE DISTRIBUTION OF THE NEW ASSEMBLIES IN THE FIELD. IN VIEW OF THIS FACT, WHAT WOULD BE UNDER ORDINARY CIRCUMSTANCES AN UNREASONABLY LARGE PROCUREMENT FOR EVALUATION PURPOSES, BECOMES UNDERSTANDABLE WHEN CONSIDERED IN THE CONTEXT OF THE MILITARY'S NEED FOR A QUICK EVALUATION.

IN ADDITION, THE ARMY POINTS OUT THAT THE TECHNICAL DATA AND DRAWINGS NECESSARY FOR A COMPETITIVE PROCUREMENT ARE STILL BEING COMPILED, AND THAT THE CONSIDERATION OF ALTERNATE PRODUCTS WOULD HAVE ENTAILED ADDITIONAL TESTING BEFORE ACCEPTANCE. BOTH OF THESE FACTORS WOULD HAVE FURTHER DELAYED THE PROCUREMENT, AND THEREFORE POSTPONED THE FIELD EVALUATION.

THIS OFFICE HAS APPROVED THE USE OF SOLICITATIONS CONTAINING SOLE SOURCE RESTRICTIONS IN CASES WHERE THE CIRCUMSTANCES SHOWED THAT IT WAS IN THE BEST INTERESTS OF THE GOVERNMENT DESPITE THE LIMITATION ON COMPETITION INVOLVED. B-154317, SEPTEMBER 14, 1964; B-158705, JUNE 6, 1966; B-158418, AUGUST 8, 1966.

ACCORDINGLY, WE CANNOT SAY THAT THE ARMY'S DECISION TO PROCURE THE SUBJECT PARACHUTE COMPONENTS OF THE FLARE ASSEMBLIES NEEDED FOR EVALUATION PURPOSES WAS ARBITRARY, CAPRICIOUS OR UNREASONABLE UNDER THESE PARTICULARLY URGENT CIRCUMSTANCES. FOR THIS REASON, WE HAVE NO LEGAL OBJECTION TO THE SOURCE RESTRICTION COMPLAINED OF IN YOUR LETTER OF JUNE 7, 1968.

FOR YOUR INFORMATION, WE UNDERSTAND THAT PLANS AND SPECIFICATIONS ADEQUATE FOR COMPETITIVE PROCUREMENT OF THE ENTIRE FLARE ASSEMBLY ARE PRESENTLY BEING PREPARED BY THE ARMY, AND THAT FUTURE REQUIREMENTS OF THIS ITEM, SHOULD IT PROVE SUCCESSFUL, WILL BE PROCURED THROUGH FULLY COMPETITIVE ADVERTISED BIDDING.