B-164764, SEP. 30, 1968

B-164764: Sep 30, 1968

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TO SANGAMO ELECTRIC COMPANY: THERE WAS REFERRED TO OUR OFFICE FOR CONSIDERATION YOUR LETTER DATED JUNE 18. DA28 043-AMC-01693 (E) YOU CONTEND THAT THE SANGAMO LINE EQUALIZER (LC-1) IS COMPATIBLE WITH ALL STANDARD COMMUNICATION EQUIPMENT AND IS TECHNICALLY EQUIVALENT TO OR BETTER THAN THE ACTON MODEL 476-A. YOU ESTIMATED THAT THE GOVERNMENT WILL BE SPENDING IN EXCESS OF $56. WE HAVE BEEN FURNISHED A DOCUMENTED ADMINISTRATIVE REPORT ON YOUR PROTEST FROM THE DEPARTMENT OF THE ARMY AND THE RECORD SHOWS THAT THE QUANTITY OF LINE EQUALIZERS REQUIRED IN CONNECTION WITH THE VIETNAM PROJECT INVOLVED IN CONTRACT NO. WHICH WAS AWARDED TO ACTON LABORATORIES. DELIVERIES WERE SCHEDULED FOR THE MONTHS OF SEPTEMBER 1968 THROUGH AUGUST 1969 AND IT IS REPORTED THAT THE CONTRACTOR DELIVERED 28 UNITS IN JUNE 1968 AND 55 UNITS IN JULY 1968.

B-164764, SEP. 30, 1968

TO SANGAMO ELECTRIC COMPANY:

THERE WAS REFERRED TO OUR OFFICE FOR CONSIDERATION YOUR LETTER DATED JUNE 18, 1968, TO THE HONORABLE PAUL FINDLEY, MEMBER OF CONGRESS, RELATIVE TO YOUR PROTEST AGAINST THE PURCHASE FROM ACTON LABORATORIES, INCORPORATED, ACTON, MASSACHUSETTS, OF A QUANTITY OF LINE EQUALIZERS EQUIVALENT IN PERFORMANCE TO THE ACTON MODEL 476-A, TO BE SUPPLIED AS GOVERNMENT- FURNISHED EQUIPMENT UNDER A CONTRACT FOR ENGINEERING SERVICES BEING PERFORMED IN THE REPUBLIC OF VIETNAM (CONTRACT NO. DA28 043-AMC-01693 (E)

YOU CONTEND THAT THE SANGAMO LINE EQUALIZER (LC-1) IS COMPATIBLE WITH ALL STANDARD COMMUNICATION EQUIPMENT AND IS TECHNICALLY EQUIVALENT TO OR BETTER THAN THE ACTON MODEL 476-A. YOU STATED THAT YOUR LC-1 LINE EQUALIZER HAS AN OPERATIONAL RANGE OF FROM 250 TO 3,500 CYCLES PER SECOND; THAT, WHEN OPERATING IN TANDEM, IT CAN PROVIDE EQUALIZATION OF UP TO SEVEN (7) MILLISECONDS; AND THAT, IN ADDITION, THE LC-1 CAN INSERT UP TO 26 DELAY SECTIONS INTO THE VOICE CHANNEL SIMULTANEOUSLY, WHEREAS THE ACTON MODEL 476-A CAN PROVIDE ONLY 12 DELAY SECTIONS SIMULTANEOUSLY. YOU ESTIMATED THAT THE GOVERNMENT WILL BE SPENDING IN EXCESS OF $56,000 MORE THAN NECESSARY ON THE VIETNAM PROJECT INVOLVED IN CONTRACT NO. DA28-043- AMC-01693 (E), AND YOU STATED THAT THE CHOICE OF THE ACTON LINE EQUALIZER COULD RESULT IN A LOSS OF $2 MILLION TO THE GOVERNMENT.

WE HAVE BEEN FURNISHED A DOCUMENTED ADMINISTRATIVE REPORT ON YOUR PROTEST FROM THE DEPARTMENT OF THE ARMY AND THE RECORD SHOWS THAT THE QUANTITY OF LINE EQUALIZERS REQUIRED IN CONNECTION WITH THE VIETNAM PROJECT INVOLVED IN CONTRACT NO. DA28-043-AMC-01693 (E) CONSTITUTES A PART OF THE TOTAL PROCUREMENT OF LINE EQUALIZERS TO BE MADE UNDER CONTRACT NO. DAAB05-68-C- 0922, WHICH WAS AWARDED TO ACTON LABORATORIES, INCORPORATED, ON MARCH 18, 1968. THAT CONTRACT, AS AMENDED ON JUNE 12, 1968, REQUIRES THE PRODUCTION AND DELIVERY OF 640 LINE EQUALIZERS DESCRIBED AS "ENVELOPE DELAY EQUALIZER CN-1234A/GCC," TO BE IN ACCORDANCE WITH STRATEGIC TECHNICAL SPECIFICATION SCC-65017 DATED JULY 27, 1964, AS AMENDED. DELIVERIES WERE SCHEDULED FOR THE MONTHS OF SEPTEMBER 1968 THROUGH AUGUST 1969 AND IT IS REPORTED THAT THE CONTRACTOR DELIVERED 28 UNITS IN JUNE 1968 AND 55 UNITS IN JULY 1968, INDICATING THAT ALL REQUIRED DELIVERIES PROBABLY WILL BE ACCOMPLISHED IN ADVANCE OF THE CONTRACT DELIVERY REQUIREMENTS.

THE ITEM SPECIFIED IN THE CONTRACT OF MARCH 18, 1968, MAY BE IN CERTAIN RESPECTS SIMILAR TO THE ACTON MODEL 476-A, PARTICULARLY SINCE THE GOVERNMENT'S SPECIFICATION STATES THAT THE ITEM "SHALL BE EQUIVALENT IN PERFORMANCE TO ACTON MODEL 476-A.' HOWEVER, THE CONTRACT DOES NOT CALL FOR DELIVERIES OF THAT MODEL OF EQUIPMENT AND IT IS REPORTED THAT THE ACTON MODEL 476-A WAS NOT PROCURED AND WILL NOT BE SUPPLIED AS GOVERNMENT- FURNISHED EQUIPMENT UNDER CONTRACT NO. DA28 043-AMC-01693 (E).

THE UNITS SCHEDULED FOR DELIVERY UNDER CONTRACT NO. DAAB05-68-C-0922 ARE REQUIRED TO BE IN ACCORDANCE WITH A GOVERNMENT SPECIFICATION WHICH APPARENTLY COULD NOT BE MET BY THE FURNISHING OF A COMMERCIAL MODEL OF EQUIPMENT. ACTON LABORATORIES, INCORPORATED, QUALIFIED AS A PRODUCER OF THE CN-1234A/GCC LINE EQUALIZER MEETING THE GOVERNMENT'S SPECIFICATION, IN CONNECTION WITH THE PERFORMANCE OF A PRIOR CONTRACT DATED MARCH 9, 1966, WHICH WAS AWARDED TO ACTON LABORATORIES, INCORPORATED, UNDER THE SECOND STEP OF A TWO-STEP FORMALLY ADVERTISED PROCUREMENT INITIATED BY THE ISSUANCE OF STEP I ON JULY 20, 1965. YOUR COMPANY DID NOT PARTICIPATE IN THAT PROPOSED PROCUREMENT WHICH INVOLVED A REQUIREMENT FOR 24 LINE EQUALIZERS.

ACTON LABORATORIES, INCORPORATED, PROCEEDED WITH THE PERFORMANCE OF THE CONTRACT DATED MARCH 9, 1966, BUT THE REQUIRED "FIRST ARTICLE" APPROVAL WAS NOT OBTAINED UNTIL ABOUT THE MONTH OF OCTOBER 1967 WHEN THERE WAS UNDER CONSIDERATION A REQUISITION FOR 68 ADDITIONAL UNITS AND, SUBSEQUENTLY, DURING THE SAME MONTH, A REVISED REQUISITION FOR THE PROCUREMENT OF 540 ADDITIONAL UNITS. THE REQUISITIONING ACTIVITY RECOMMENDED THAT A CONTRACT BE NEGOTIATED WITH ACTON LABORATORIES, INCORPORATED, SINCE IT APPEARED TO BE THE ONLY CURRENT PRODUCER OF THECN- 1234A/GCC LINE EQUALIZER AND IT WAS BELIEVED THAT THE DELAYS NORMALLY ASSOCIATED WITH COMPETITIVE SOLICITATIONS, THE EVALUATION OF COMPETITIVE BIDS AND COMPLETE FIRST ARTICLE TESTING SHOULD NOT BE PERMITTED IN VIEW OF THE URGENT NEED FOR THE 540 ADDITIONAL UNITS.

THE CONTRACTING OFFICER DETERMINED THAT IT WOULD BE PROPER IN THE PARTICULAR CIRCUMSTANCES TO NEGOTIATE A CONTRACT WITH ACTON LABORATORIES, INCORPORATED, AS THE SOLE SOURCE FOR OBTAINING TIMELY DELIVERIES OF THE REQUIRED 540 LINE EQUALIZERS, PURSUANT TO THE NEGOTIATION AUTHORITY OF EXCEPTION (2) OF SUBSECTION 2304 (A), TITLE 10, U.S.C. AND SECTION 3-202 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR). UNDER EXCEPTION (2) OF SUBSECTION 2304 (A), TITLE 10, UNITED STATES CODE, NEGOTIATION OF A PURCHASE OR CONTRACT BY A MILITARY DEPARTMENT IS AUTHORIZED ON THE BASIS OF A DETERMINATION THAT "THE PUBLIC EXIGENCY WILL NOT PERMIT THE DELAY INCIDENT TO ADVERTISING; " AND UNDER ASPR 3-202, THE USE OF THE PUBLIC EXIGENCY EXCEPTION IS PERMITTED WHEN THERE IS A COMPELLING AND URGENT NEED FOR THE PARTICULAR SUPPLIES OR SERVICES AND IT IS DETERMINED THAT THEY COULD NOT BE PROCURED WITHIN THE REQUIRED TIME BY MEANS OF FORMAL ADVERTISING.

IN VIEW OF THE FACT THAT THE 540 UNITS WERE REQUIRED TO BE IN ACCORDANCE WITH A GOVERNMENT SPECIFICATION WHICH APPARENTLY COULD NOT HAVE BEEN MET BY ANY COMMERCIAL MODELS OF EQUIPMENT, AND SINCE A CONSIDERABLE PERIOD OF TIME ELAPSED BEFORE ACTON LABORATORIES, INCORPORATED, OBTAINED A FIRST ARTICLE APPROVAL UNDER ITS CONTRACT OF MARCH 9, 1966, IT APPEARS THAT THE CONTRACTING OFFICER EXERCISED REASONABLE JUDGMENT IN CONCURRING WITH THE RECOMMENDATION OF THE REQUISITIONING ACTIVITY THAT A CONTRACT BE NEGOTIATED WITH THE CURRENT PRODUCER OF THE CN-1234A/GCC LINE EQUALIZER.

THE CONTRACTING OFFICER STATED THAT ONE OF THE CRITICAL FEATURES OF THE MILITARY REQUIREMENTS IN THIS CASE IS THE REQUIREMENT FOR CONTINUOUS VARIABLE COMPENSATION OVER A FREQUENCY RANGE OF 300 TO 3,400 CYCLES PER SECOND FOR ANY INPUT ENVELOPE DELAY DISTORTION OF UP TO 7 MILLISECONDS; AND THAT THE SANGAMO LC-1 LACKS THE 7 MILLISECOND CAPABILITY ALTHOUGH THE REQUIREMENT COULD BE MET BY THE USE OF TWO OR MORE LC-1'S OPERATED IN TANDEM. IN THAT CONNECTION, THE CONTRACTING OFFICER STATED THAT TWO OR MORE LC-1'S WOULD BE NECESSARY AT ANY TIME EQUALIZATION IN THE RANGE ABOVE 3.5 MILLISECONDS TO 7 MILLISECONDS IS REQUIRED, WHEREAS ONLY ONE CN- 1234A/GCC IS REQUIRED TO ACCOMPLISH UP TO AND INCLUDING 7 MILLISECONDS. THE CONTRACTING OFFICER ALSO REPORTED THAT, SINCE EACH SANGAMO LC-1 CONTAINS 13 TIME DELAY CIRCUITS OR SECTIONS, THE USE OF TWO LC-1'S OPERATING IN TANDEM WILL DOUBLE THE DELAY SECTIONS TO 26, WHEREAS THE USE OF TWO CN-1234A/GCC LINE EQUALIZERS WOULD DOUBLE THE DELAY SECTIONS TO 24.

ASIDE FROM THE APPARENTLY RELATIVE SIMILARITY OF THE TWO TYPES OF LINE EQUALIZERS SO FAR AS CONCERNS THE TIME DELAY CIRCUITS OR SECTIONS, THE LC- 1 EQUALIZER APPARENTLY DOES NOT MEET WHAT THE DEPARTMENT OF THE ARMY CONSIDERS TO BE A CRITICAL FEATURE OF A LINE EQUALIZER (THE 7 MILLISECOND REQUIREMENT) WHICH CONFORMS TO THE GOVERNMENT'S SPECIFICATION SCC-65017, AS AMENDED. IT HAS CONSISTENTLY BEEN THE POSITION OF OUR OFFICE THAT IT IS THE RESPONSIBILITY OF THE CONTRACTING AGENCY CONCERNED TO PREPARE SPECIFICATIONS WHICH WILL REFLECT THE GOVERNMENT'S ACTUAL REQUIREMENTS AND, IN 36 COMP. GEN. 251, IT WAS HELD THAT THERE IS NO REQUIREMENT THAT THE GOVERNMENT PURCHASE EQUIPMENT WHICH, IN THE CONSIDERED JUDGMENT OF THE CONTRACTING AGENCY, DOES NOT MEET THE AGENCY'S NEEDS.

IT WOULD APPEAR THAT THE ONLY POSSIBLE BASIS FOR A PROTEST OF YOUR COMPANY CONCERNING THE CONTRACT WITH ACTON LABORATORIES, INCORPORATED, WOULD BE THAT YOU WERE NOT AFFORDED AN OPPORTUNITY TO BID ON THE 540 LINE EQUALIZERS MEETING THE GOVERNMENT'S SPECIFICATION BEFORE THE CONTRACT WITH ACTON LABORATORIES, INCORPORATED, WAS NEGOTIATED. HOWEVER, IN THE CIRCUMSTANCES RELATING TO THE NEGOTIATION OF THAT CONTRACT, IT DOES NOT SEEM PROBABLE THAT YOU COULD HAVE DELIVERED ACCEPTABLE ITEMS WITHIN SUFFICIENT TIME TO MEET THE GOVERNMENT'S REPORTEDLY URGENT DELIVERY REQUIREMENTS, AND WE FIND NO BASIS FOR CONCLUDING THAT THE NEGOTIATED AWARD TO ACTON LABORATORIES, INCORPORATED, WAS IMPROPER IN ANY RESPECT.