B-164418, AUG. 19, 1968

B-164418, AUG. 19, 1968

TO COMPUTER MEASUREMENTS COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTERS OF MAY 22 AND MAY 28, 1968, PROTESTING AN AWARD TO ANOTHER BIDDER UNDER INVITATION FOR BIDS NO. N00039 -68-B-2038, ISSUED BY THE UNITED STATES NAVY ON MAY 8, 1968.

THE SUBJECT INVITATION SOLICITED BIDS FOR THE MANUFACTURE AND SUPPLY OF 458 TRANSISTORIZED ELECTRONIC COUNTERS WITH ASSOCIATED TECHNICAL MANUALS, SPARE AND REPAIR PARTS AND TECHNICAL DOCUMENTATION. ELIGIBILITY TO SUBMIT OFFERS WAS LIMITED TO THOSE BIDDERS WHO HAD QUALIFIED THEIR PRODUCTS ON THE QUALIFIED PRODUCTS LIST MIL-C-24165 (SHIPS) DATED JUNE 6, 1967, PRIOR TO BID OPENING.

BIDS WERE OPENED AS SCHEDULED ON MAY 24, 1968. THE BIDS WERE AS FOLLOWS:

458 UNITS BIDDER EACH AMOUNT ELECTROMAGNETIC TECHNOLOGY CORP. (A SUBSIDIARY OF AMERICAN ELECTRONICS LABORATORIES, INC.) (AEL) $2,911.50 $1,333,467.00 COMPUTER MEASUREMENTS COMPANY (A DIVISION OF PACIFIC INDUSTRIES, INC.) (CMC) $3,950.00 $1,809,100.00

AFTER BID OPENING, THE PROCURING ACTIVITY EVALUATED THE BID OF AEL AND FOUND IT TO BE RESPONSIVE IN ACCORDANCE WITH THE REQUIREMENTS OF SECTION 2 -301 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR).

THEREAFTER, ON MAY 29, 1968, THE CONTRACTING OFFICER REQUESTED THE DEFENSE CONTRACT ADMINISTRATION SERVICES REGION (DCASR) TO CONDUCT A PRE- AWARD SURVEY OF AEL'S ABILITY TO PERFORM THE PROPOSED CONTRACT. ON JUNE 14, 1968, DCASR, AFTER COMPLETING ITS PRE-AWARD SURVEY, RECOMMENDED COMPLETE AWARD TO AEL. ACCORDINGLY, PURSUANT TO THE REQUIREMENTS OF ASPR 2-407.9 (2), AWARD WAS MADE TO AEL ON JUNE 28, 1968.

THE BASES OF YOUR PROTEST ARE THAT AEL WAS NOT A RESPONSIBLE PROSPECTIVE CONTRACTOR IN VIEW OF AN ALLEGED BACKLOG OF DELIVERIES IT HAD UNDER THREE PRIOR CONTRACTS, AND THAT AEL HAD NOT QUALIFIED ITS PRODUCT THROUGH ALL PERFORMANCE AND ENVIRONMENTAL TESTS. YOU ALSO SUGGEST THAT POTENTIAL CLAIMS OF CMC FOR POSSIBLE PATENT INFRINGEMENT IN CONNECTION WITH THE CIRCUITRY USED IN THE AN/USM 207 COUNTER SHOULD BE CONSIDERED IN MITIGATION OF ANY DIFFERENCE IN THE AMOUNTS BID.

WITH REFERENCE TO YOUR ALLEGATION THAT AEL HAD NOT QUALIFIED ITS PRODUCTS, THE RECORD BEFORE US SHOWS THAT AEL WAS ON THE QUALIFIED PRODUCTS LIST OF PRODUCTS QUALIFIED UNDER MILITARY SPECIFICATION MIL-C 24165-2 (SHIPS) FOR THIS PRODUCT DATED JUNE 6, 1967, WHICH SIGNIFIES COMPLETE COMPLIANCE BY AEL WITH THE PERFORMANCE AND ENVIRONMENTAL TESTS NECESSARY FOR QUALIFICATION. TEST OR QUALIFICATION REFERENCE CITED IN THE QPL WAS NASL RPT. 925-WH, LAB. PROJ. 9200-199 OF MAY 25, 1966. THE SAME REPORT WAS CITED FOR QUALIFICATION OF YOUR EQUIPMENT.

CONCERNING YOUR ALLEGATION THAT AEL HAD NOT STARTED DELIVERY OF PRODUCTION UNITS, HAD A BACKLOG OF 1,558 UNITS, AND WAS SERIOUSLY DELINQUENT ON DELIVERIES, THE DCASR PRE-AWARD SURVEY TEAM, INFORMED OF THE NATURE OF YOUR PROTEST, FURNISHED A DETAILED REPORT ON THE THREE PRIOR CONTRACTS HELD BY AEL FOR THE SAME ITEM. THAT REPORT SHOWS THAT CONTRACT NO. N024-67C-1334 CALLED FOR THE PRODUCTION AND DELIVERY OF 592 UNITS TO ACCUMULATE 180 FOR MAY 1968 DELIVERY AND 60 EACH MONTH THEREAFTER UNTIL COMPLETION. AS OF THE DATE OF JUNE 14, 1968, THE SURVEY TEAM FOUND THAT 59 UNITS HAD BEEN SHIPPED AND 250 UNITS WERE COMPLETED AND WERE IN FINAL TESTS. CONTRACT NO. N024-67C-1429 CALLED FOR 614 UNITS TO ACCUMULATE 120 FOR MAY 1968 DELIVERY AND 60 EACH MONTH THEREAFTER UNTIL COMPLETION. THE PRE-AWARD SURVEY TEAM REPORTED THAT NO DELIVERIES HAD BEEN MADE BECAUSE AEL WAS AWAITING SHIPPING INSTRUCTIONS. THE STATED REASONS FOR THE ORIGINAL DELAY WERE THAT AELWAS ENGAGED IN THE PRODUCTION OF HIGHER PRIORITY ORDERS AND EXTENSIVE TEST TIME ON ENVIRONMENTAL CONFORMANCE TEST, INCLUDING A LATE ISSUE OF STOCK NUMBERS FROM THE GOVERNMENT, WAS REQUIRED. CONTRACT NO. N039-68C-2531, WHICH REQUIRES THE PRODUCTION AND DELIVERY OF 352 UNITS DOES NOT REQUIRE DELIVERY OF THE FIRST 20 UNITS UNTIL DECEMBER 1968. THE TEAM ALSO FOUND THAT AEL WAS IN FULL PRODUCTION AND THAT SAID CONTRACTOR HAD THE TECHNICAL CAPABILITY, SKILLED AND ADEQUATE PERSONNEL AND CAPACITY TO MEET THE REQUIREMENTS OF THE CONTRACT IN QUESTION.

IN RESPONSE TO YOUR ALLEGATION CONCERNING YOUR POSSIBLE PATENT INFRINGEMENT CLAIM, THE ADMINISTRATIVE REPORT STATES AS FOLLOWS: "IN REGARD TO THE ALLEGATION OF POSSIBLE PATENT INFRINGEMENT CLAIMS REFERRED TO BY COMPUTER MEASUREMENTS COMPANY IN THEIR MAY 28, 1968 LETTER TO YOU, EXAMINATION HAS BEEN MADE OF PRIOR CONTRACTS BETWEEN THE DEPARTMENT OF THE NAVY AND COMPUTER MEASUREMENTS COMPANY. THESE CONTRACTS WHICH PROVIDE FOR THE SUPPLY OF THE SAME TYPE OF EQUIPMENT AS THE PRESENT CONTRACT AND WHICH CONTAINED THE CLAUSE ENTITLED RIGHTS TO TECHNICAL DATA- AS PRESCRIBED BY ASPR 9-203 (B), DO NOT INDICATE THE RETENTION OF ANY PROPRIETARY OR LIMITED RIGHTS TO DATA BY COMPUTER MEASUREMENTS OR THAT THE GOVERNMENT DID NOT OBTAIN ALL RIGHTS TO DATA THEREUNDER.'

IN ADDITION, IT IS THE POSITION OF THIS OFFICE THAT UNDER FORMAL ADVERTISING PROCEDURE AWARD OF A CONTRACT MUST BE MADE TO THE LOWEST BIDDER MEETING THE SPECIFICATIONS, WITHOUT REGARD TO POSSIBLE PATENT INFRINGEMENT. SEE 38 COMP. GEN. 276.

DETERMINATIONS OF THE QUALIFICATIONS AND RESPONSIBILITY OF A PROPOSED CONTRACTOR IS PRIMARILY THE FUNCTION OF THE PROCUREMENT AGENCY (37 COMP. GEN. 430; 37 COMP. GEN. 798; 38 ID. 248; 39 ID. 468; 39 COMP. GEN. 705; 43 ID. 228), AND SUCH DETERMINATION WILL NOT BE QUESTIONED BY THIS OFFICE IN THE ABSENCE OF A SHOWING OF BAD FAITH OR LACK OF SUBSTANTIAL EVIDENCE. COMP. GEN. 42; 37 ID. 430; 37 COMP. GEN. 798; 38 ID. 131; 38 COMP. GEN. 778.

THUS, THIS OFFICE HAS FREQUENTLY HELD THAT THE DETERMINATION OF A PROSPECTIVE CONTRACTOR'S PROBABLE ABILITY TO PERFORM A CONTRACT TO BE AWARDED INVOLVES A FORECAST WHICH MUST, OF NECESSITY, BE A MATTER OF JUDGMENT. SUCH JUDGMENT SHOULD, OF COURSE, BE BASED ON FACT AND REACHED IN GOOD FAITH; HOWEVER, IT IS ONLY PROPER THAT IT BE LEFT LARGELY TO THE SOUND ADMINISTRATIVE DISCRETION OF THE CONTRACTING OFFICER INVOLVED SINCE HE IS IN THE BEST POSITION TO ASSESS RESPONSIBILITY. ALSO, HE IS THE OFFICIAL WHO MUST BEAR THE MAJOR BRUNT OF DIFFICULTIES EXPERIENCED IN OBTAINING REQUIRED PERFORMANCE AND THE ONE WHO MUST MAINTAIN DAY-TO-DAY RELATIONS WITH THE CONTRACTOR ON THE GOVERNMENT'S BEHALF. 39 COMP. GEN. 705, 711; 43 ID. 228, 230.

IN THIS CASE, SINCE THE NAVY DETERMINED AFTER A CAREFUL INVESTIGATION AND FULL CONSIDERATION OF ALL THE FACTS THAT AEL WAS A RESPONSIBLE BIDDER, AND SINCE SAID DETERMINATION WAS BASED UPON SUBSTANTIAL EVIDENCE AND THERE HAS BEEN NO SHOWING OF BAD FAITH, WE FIND NO LEGAL BASIS UPON WHICH WE MAY PROPERLY OBJECT TO THE DETERMINATION OR DISTURB THE AWARD AS MADE.