B-164893, DECEMBER 23, 1968, 48 COMP. GEN. 420

B-164893, DECEMBER 23, 1968, 48 COMP. GEN. 420

CONTRACTS - SPECIFICATIONS - FAILURE TO FURNISH SOMETHING REQUIRED - INFORMATION - DESCRIPTIVE DATA SUFFICIENCY WHILE A FINDING OF RESPONSIVENESS TO AN INVITATION REQUESTING BIDS FOR A "MICROWAVE SYSTEM" IN ACCORDANCE WITH ONE OF FOUR CONFIGURATIONS, BIDS TO BE EVALUATED IN NUMERICAL ORDER WITH AWARDS TO THE LOWEST RESPONSIVE BIDDER UNDER THE SCHEDULE SELECTED, REGARDLESS OF COST, IS A FACTUAL DETERMINATION TO BE MADE BY THE CONTRACTING AGENCY, THE MANNER OF EVALUATION IS SUBJECT TO REVIEW BY THE UNITED STATES GENERAL ACCOUNTING OFFICE, AND WHERE IN THE EVALUATION OF THE THIRD LOW BID SUBMITTED ON CONFIGURATION I--- THE FIRST TWO BIDS HAVING BEEN REJECTED FOR FAILURE TO COMPLY WITH THE TECHNICAL AND DELIVERY REQUIREMENTS OF THE SPECIFICATIONS- -- INFORMATION OUTSIDE THE BID AND THE REQUIRED DESCRIPTIVE LITERATURE IS CONSIDERED, THE DETERMINATION THAT THE BID WAS RESPONSIVE WAS NOT IN COMPLIANCE WITH THE STATUTORY AND REGULATORY PROVISIONS GOVERNING PROCUREMENT BY FORMAL ADVERTISING. BIDS - COMPETITIVE BIDDING - EFFECT OF ERRONEOUS AWARDS ALTHOUGH A CONTRACT AWARDED TO A BIDDER WHOSE BID WAS NOT IN COMPLIANCE WITH THE "FULL AND FREE" COMPETITION ENVISIONED BY STATUTE AND REGULATIONS GOVERNING PROCUREMENT BY FORMAL ADVERTISING, CANCELLATION OF THE AWARD MADE TO THE BIDDER, A MONTH BEFORE COMPLETION OF A 7-MONTH DELIVERY SCHEDULE WOULD SERVE NO USEFUL PURPOSE WHERE THE ONLY TWO OTHER BIDDERS UNDER THE INVITATION WERE NONRESPONSIVE. HOWEVER, THE ENTIRE PROCUREMENT SHOULD BE CAREFULLY REVIEWED TO PRECLUDE A REOCCURRENCE OF THE SITUATION.

TO THE SECRETARY OF THE ARMY, DECEMBER 23, 1968:

REFERENCE IS MADE TO A LETTER DATED AUGUST 27, 1968, FROM THE ACTING DEPUTY DIRECTOR OF PROCUREMENT AND PRODUCTION, HEADQUARTERS UNITED STATES ARMY MATERIEL COMMAND, REPORTING ON THE PROTESTS OF THE RAYTHEON COMPANY AND THE COLLINS RADIO COMPANY AGAINST THE REJECTION OF THEIR BIDS AND THE AWARD OF A CONTRACT TO LENKURT ELECTRIC CO., INC., UNDER SOLICITATION DAAG -08-68-B-2730.

THE SOLICITATION, ISSUED MAY 27, 1968, BY THE SACRAMENTO ARMY DEPOT, REQUESTED BIDS FOR A ,MICROWAVE SYSTEM" IN ACCORDANCE WITH ONE OF FOUR CONFIGURATIONS DESCRIBED THEREIN FOR USE BY THE ARMED FORCES KOREAN NETWORK. PROSPECTIVE BIDDERS WERE ADVISED IN A HEADNOTE TO THE DESCRIPTION OF THE FOUR CONFIGURATIONS THAT: THE GOVERNMENT WILL CONSIDER EACH SCHEDULE IN NUMERICAL ORDER, BEGINNING WITH SCHEDULE I, BUT RESERVES THE RIGHT TO AWARD A CONTRACT UNDER THE SCHEDULE WHICH IT DETERMINES TO BE IN ITS BEST INTEREST REGARDLESS OF DOLLAR VALUE BID ON OTHER SCHEDULES, ONLY ASSURING AWARD TO THE LOWEST RESPONSIVE BIDDER UNDER THE SCHEDULE SELECTED. IN ADDITION TO SETTING FORTH NUMEROUS TECHNICAL REQUIREMENTS FOR THE CONTEMPLATED MICROWAVE SYSTEM WHICH WILL BE DISCUSSED HEREAFTER, AS NECESSARY, ARTICLE 11 OF THE SCHEDULE PROVIDED THAT: REQUIREMENT FOR DESCRIPTIVE LITERATURE (OCT. 1960) (ASPR 2-202.5)

(A) DESCRIPTIVE LITERATURE AS SPECIFIED IN THIS INVITATION FOR BIDS MUST BE FURNISHED AS A PART OF THE BID AND MUST BE RECEIVED BEFORE THE TIME SET FOR OPENING BIDS. THE LITERATURE FURNISHED MUST BE IDENTIFIED TO SHOW THE ITEM IN THE BID TO WHICH IT PERTAINS. THE DESCRIPTIVE LITERATURE IS REQUIRED TO ESTABLISH, FOR THE PURPOSES OF BID EVALUATION AND AWARD, DETAILS OF THE PRODUCTS THE BIDDER PROPOSES TO FURNISH AS TO DESCRIPTIVE LITERATURE OF EQUIPMENT TO BE SUPPLIED AND A LIST OF TYPE AND QUANTITY OF ALL EQUIPMENT, AND ACCESSORIES.

(B) FAILURE OF DESCRIPTIVE LITERATURE TO SHOW THAT THE PRODUCT OFFERED CONFORMS TO THE SPECIFICATIONS AND OTHER REQUIREMENTS OF THIS INVITATION FOR BIDS WILL REQUIRE REJECTION OF THE BID. FAILURE TO FURNISH THE DESCRIPTIVE LITERATURE BY THE TIME SPECIFIED IN THE INVITATION FOR BIDS WILL REQUIRE REJECTION OF THE BID, EXCEPT THAT IF THE MATERIAL IS TRANSMITTED BY MAIL AND IS RECEIVED LATE, IT MAY BE CONSIDERED UNDER THE PROVISIONS FOR CONSIDERING LATE BIDS, AS SET FORTH ELSEWHERE IN THIS INVITATION FOR BIDS.

BIDS WERE OPENED ON JUNE 12, 1968, WITH THE FOLLOWING RESULTS:

CONFIGURATION

BIDDER I II III IV

------ - -- --- -- LENKURT $717,576 $623,401 $503,129 $427,567 COLLINS 656,821 526,207 457,283

420,476 RAYTHEON 594,011 496,844 453,327 385,682

PURSUANT TO THE PRESCRIBED METHOD OF BID EVALUATION, THE CONTRACTING OFFICIALS ELECTED TO MAKE AWARD TO THE LOW RESPONSIVE BIDDER UNDER CONFIGURATION I OF THE SOLICITATION DESCRIBED AS A ,DUPLEX FREQUENCY DIVERSITY HETERODYNE SYSTEM.' THE TWO LOW BIDDERS, RAYTHEON AND COLLINS, WERE DETERMINED TO BE NONRESPONSIVE TO THE TERMS AND CONDITIONS OF THE SOLICITATION. ACCORDINGLY, A CONTRACT FOR CONFIGURATION I WAS AWARDED TO LENKURT AS THE LOW RESPONSIVE, RESPONSIBLE BIDDER ON JUNE 29, 1968, IN THE TOTAL AMOUNT OF $717,576.

COLLINS AND RAYTHEON, BY LETTER OF JULY 18 AND TELEGRAM OF JULY 20, 1968, RESPECTIVELY, PROTESTED THE REJECTION OF THEIR BIDS AND THE AWARD TO LENKURT ON THE GROUNDS THAT THEIR BIDS WERE, IN FACT, FULLY RESPONSIVE TO THE SOLICITATION, AND THAT THE AWARD TO LENKURT WAS IMPROPER BECAUSE THAT BIDDER FAILED TO SUBMIT SUFFICIENT DATA WITH ITS BID AS REQUIRED BY THE DESCRIPTIVE LITERATURE CLAUSE, SUPRA, AND DID NOT SPECIFICALLY OFFER TO COMPLY WITH ALL OF THE TECHNICAL REQUIREMENTS OF CONFIGURATION I.

COLLINS, IN A LETTER ATTACHED TO ITS BID, CONDITIONED ACCEPTANCE THEREOF UPON DELIVERY OF THE ADVERTISED MICROWAVE SYSTEM "TWO-HUNDRED AND TEN (210) DAYS AFTER RECEIPT OF THE CONTRACT," WHEREAS, THE DELIVERY CLAUSE OF THE SOLICITATION CALLED FOR DELIVERY "210 CALENDAR DAYS AFTER DATE OF AWARD DOCUMENTS.' SINCE COLLINS OFFERED DELIVERY OF THE CONTEMPLATED SYSTEM AT OTHER THAN THE SPECIFIED DATE, ITS BID WAS REJECTED BY THE CONTRACTING OFFICER PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-404.2 (C) WHICH PROVIDES THAT "ANY BID WHICH FAILS TO CONFORM TO THE DELIVERY SCHEDULE * * * SHALL BE REJECTED AS NONRESPONSIVE.' 158335, APRIL 1, 1966, AND CASES CITED THEREIN. SEE, ALSO, 36 COMP. GEN. 181, 183, WHERE WE STATED THAT:

THE CONTRACT AWARDED TO THE SUCCESSFUL BIDDER MUST BE THE SAME OFFERED IN THE INVITATION. 34 COMP. GEN. 119. WHILE THE CONTRACTING OFFICER MAY WAIVE INFORMALITIES IN BIDS, THIS AUTHORITY DOES NOT EXTEND TO THE WAIVER OF MATERIAL VARIATIONS TO THE TERMS AND CONDITIONS OF THE INVITATION. * * * A PROVISION OF AN INVITATION WHICH ON ITS FACE ESTABLISHES A DEFINITE REQUIREMENT AS TO TIME OF DELIVERY IS MATERIAL. CF. B-104418, AUGUST 23, 1951. THE ACCEPTANCE OF A BID NOT COMPLYING WITH SUCH MATERIAL PROVISION IS UNAUTHORIZED AND DOES NOT BIND THE GOVERNMENT. 17 COMP. GEN. 554, 555. * * *

SEE, 46 COMP. GEN. 368, FOR THE PROPOSITION THAT A COVER LETTER ENCLOSED WITH, AND REFERRING TO, A BID MUST BE EVALUATED AS A PART OF THE BID AND ANY QUALIFICATION IN THE LETTER AFFECTING THE TERMS OF THE BID WITH REFERENCE TO THE INVITATION WILL, A FORTIORI, REQUIRE REJECTION OF THE BID AS NONRESPONSIVE.

RAYTHEON'S BID WAS EVALUATED BY THE GOVERNMENT ENGINEER ASSIGNED TO ASSIST THE CONTRACTING OFFICER AND FOUND TO BE NONCONFORMING TO TWO OF THE TECHNICAL SPECIFICATIONS OF CONFIGURATION I. IT APPEARS IN THIS REGARD THAT RAYTHEON OFFERED A MIXTURE OF REMODULATING AND HETERODYNE EQUIPMENT, WHEREAS CONFIGURATION I SPECIFIED A COMPLETE HETERODYNE SYSTEM. ALSO, RAYTHEON OFFERED PATCHING OF AUDIO SUBCARRIERS AS OPPOSED TO PATCHING OF AUDIO AS SPECIFIED. RAYTHEON CONTENDS THAT THE SOLICITATION PERMITS AND, IN FACT, REQUIRES THE UTILIZATION OF EQUIPMENT OF THE NATURE OFFERED IN ITS BID. HOWEVER, THE CONTRACTING OFFICER REAFFIRMED THE REJECTION OF RAYTHEON'S BID FOR FAILURE TO COMPLY WITH THE TWO REFERENCED TECHNICAL SPECIFICATIONS OF CONFIGURATION I FOR THE SAME REASONS HERETOFORE STATED.

THE QUESTION AS TO WHETHER THE REFERENCED TECHNICAL PERFORMANCE REQUIREMENTS ARE NECESSARY TO MEET THE MINIMUM NEEDS OF THE PROCURING ACTIVITY AND THE QUESTION AS TO THE MATERIALITY OF THE DIFFERENCES BETWEEN RAYTHEON'S OFFERED SYSTEM AND THE ONE CALLED FOR BY THE SPECIFICATIONS ARE NOT FOR RESOLUTION BY OUR OFFICE. SEE B-149207, SEPTEMBER 12, 1962. THIS REGARD, WE HELD IN OUR DECISIONS B-139830, AUGUST 19, 1959, AND B- 143389, AUGUST 26, 1960, RESPECTIVELY, AS FOLLOWS:

THIS OFFICE HAS NEITHER AN ENGINEERING STAFF NOR A TESTING LABORATORY TO EVALUATE THE TECHNICAL ASPECTS OF SPECIFICATIONS. MOREOVER IN DISPUTES OF FACT BETWEEN A PROTESTANT AND A GOVERNMENT AGENCY, WE USUALLY ARE REQUIRED TO ACCEPT THE ADMINISTRATIVE REPORT AS CORRECT. WHETHER A PARTICULAR BID IS RESPONSIVE TO THE TECHNICAL DETAILS OF THE SPECIFICATIONS IS NOT A MATTER, ORDINARILY, FOR OUR DETERMINATION. * * *

THE QUESTION AS TO THE ACTION, IF ANY, WHICH OUR OFFICE SHOULD TAKE IN CASES INVOLVING THE EVALUATION OF TECHNICAL REQUIREMENTS OF SPECIFICATIONS, ETC., HAS BEEN THE SUBJECT OF A NUMBER OF DECISIONS BY OUR OFFICE. YOUR PROTEST IS BASED UPON SUCH AN EVALUATION. OF NECESSITY OUR OFFICE HAS ESTABLISHED A RULE GOVERNING SUCH SITUATIONS. IN A DECISION DATED JANUARY 8, 1938, TO THE PRESIDENT, BOARD OF COMMISSIONERS, DISTRICT OF COLUMBIA, PUBLISHED AT 17 COMP. GEN. 554, 557, WE SET FORTH THE FOLLOWING RULE WHICH WE CONSIDER TO BE CONTROLLING IN THE INSTANT MATTER:

"IT IS IN THE PROVINCE OF THE ADMINISTRATIVE OFFICERS TO DRAFT PROPER SPECIFICATIONS NECESSARY TO SUBMIT FOR FAIR COMPETITIVE BIDDING PROPOSED CONTRACTS TO SUPPLY GOVERNMENTAL NEEDS AND TO DETERMINE FACTUALLY WHETHER ARTICLES OFFERED MEET THESE SPECIFICATIONS. * * *"

THE RECORD REASONABLY ESTABLISHES THAT RAYTHEON'S CONTEMPLATED MICROWAVE SYSTEM FOR CONFIGURATION I DIFFERED IN A DEMONSTRATIVE MANNER FROM THE GOVERNMENT SPECIFICATIONS WHICH WERE SET FORTH CLEARLY IN THE SOLICITATION. THE CONTRACTING OFFICER AND THE COGNIZANT GOVERNMENT ENGINEER IN SEPARATE REPORTS DATED OCTOBER 25, 1968, STATE THAT THESE DIFFERENCES WOULD CAUSE RAYTHEON'S SYSTEM TO OPERATE IN A MANNER NOT CONTEMPLATED BY THE SPECIFIED PERFORMANCE REQUIREMENTS. CONTRACTING OFFICERS HAVE THE RIGHT TO INSIST UPON STRICT COMPLIANCE WITH THE SPECIFICATIONS AND ARE NOT REQUIRED TO PERMIT SUBSTITUTION OF ITEMS WHICH ARE NOT ACTUALLY IN ACCORDANCE WITH THE SPECIFICATIONS, EVEN IF A DEVIATING SUBSTITUTE MAY BE EQUIVALENT TO THE ITEMS SPECIFIED. ADDITION, 10 U.S.C. 2305 (C) PRESCRIBES THAT "AWARD SHALL BE MADE * * * TO THE RESPONSIBLE BIDDER WHOSE BID CONFORMS TO THE INVITATION.' SEE, ALSO, ASPR 2-404.2 (A) AND ARTICLE 10 (A) OF THE SOLICITATION INSTRUCTIONS AND CONDITIONS. IN VIEW THEREOF, AND FOR THE REASONS SET OUT IN THE ABOVE- CITED CASES, WE MUST CONCLUDE THAT RAYTHEON'S BID WAS PROPERLY REJECTED BECAUSE IT DID NOT COMPLY WITH THE TECHNICAL SPECIFICATIONS OF THE SOLICITATION.

IN ADDITION TO THE FOREGOING, RAYTHEON AND COLLINS CONTEND THAT LENKURT FAILED TO SUBMIT SUFFICIENT DATA WITH ITS BID AS REQUIRED BY THE DESCRIPTIVE LITERATURE CLAUSE, SUPRA, TO ENABLE THE CONTRACTING OFFICIALS TO FULLY EVALUATE THE OFFERED SYSTEM AND TO DETERMINE POSITIVELY THAT IT COMPLIED WITH ALL OF THE TECHNICAL EQUIPMENT AND PERFORMANCE REQUIREMENTS OF THE SOLICITATION. THE PROTESTING BIDDERS ALSO ARGUE THAT LENKURT FAILED TO BID A DIVERSITY SWITCH AND TO OFFER TO MEET THE REQUIRED FADE MARGIN AS SPECIFIED, RESPECTIVELY, BY ARTICLES 10 AND 8 OF THE MICROWAVE SYSTEM SPECIFICATIONS. ALSO, RAYTHEON CONTENDS THAT LENKURT FAILED TO OFFER TO MEET THE VIDEO SIGNAL-TO-NOISE REQUIREMENT AT ARTICLE 8 AND TO BID AN ORDER WIRE AS CONTEMPLATED BY ARTICLE 10 OF THE SPECIFICATIONS.

BY SUPPLEMENTAL REPORT DATED OCTOBER 25, 1968, RESPONDING FURTHER TO THE RAYTHEON PROTEST, BUT ACTUALLY RESPONSIVE TO BOTH PROTESTS IN THIS RESPECT, THE CONTRACTING OFFICER RESTATED HIS DETERMINATION THAT THE DATA FURNISHED BY LENKURT WITH ITS BID ADEQUATELY FULFILLED THE REQUIREMENT FOR DESCRIPTIVE LITERATURE AS SET FORTH IN THE SOLICITATION. SPECIFICALLY, THAT REPORT CONCLUDES THAT: THE LENKURT ELECTRIC CO., INC., LITERATURE DOES CONTAIN INFORMATION CLEARLY SHOWING THE CHARACTERISTICS AND CONSTRUCTION OF THE LENKURT ELECTRIC CO., INC., EQUIPMENT TO BE FURNISHED FOR THE SYSTEM. THE CHARACTERISTICS ARE DETAILED ON THE FREQUENCY PLAN SHEETS AND THE CONSTRUCTION OF THE EQUIPMENT IS DETAILED IN THE TECHNICAL DESCRIPTION, * * *, TOGETHER WITH ILLUSTRATIONS OF TYPICAL CONSTRUCTION.

THE REPORT OF OCTOBER 25 ALSO POINTS OUT THAT "THE REQUIREMENT TO FURNISH -A LIST OF TYPE AND QUANTITY OF ALL EQUIPMENT, AND ACCESSORIES' WAS COMPLIED WITH BY LENKURT ELECTRIC CO., INC., IN THEIR DETAILED MATERIAL LIST FOR SCHEDULE I, CONFIGURATION I, WHEREIN THE TYPE OF THE EQUIPMENT IN THE SYSTEM IS LISTED AND THE QUANTITY FOR EACH SITE IS SET FORTH"

THE PROTESTS BY THE TWO UNSUCCESSFUL BIDDERS WITH RESPECT TO THE ADEQUACY OF THE DESCRIPTIVE LITERATURE SUPPLIED BY LENKURT WITH ITS BID ARE PREDICATED SOLELY ON THE ARGUMENT THAT THE CONTRACTING OFFICER'S DETERMINATION AS TO THE ADEQUACY OF THE LITERATURE SUPPLIED IS PATENTLY ERRONEOUS.

AS STATED ABOVE, IT IS WELL RECOGNIZED THAT THE FACTUAL DETERMINATION AS TO WHETHER THAT WHICH IS OFFERED BY THE BIDDER CONFORMS TO THE SPECIFICATIONS IS TO BE DECIDED PRIMARILY BY THE CONTRACTING AGENCY, 17 COMP. GEN. 554, 557. WE ALSO STATED AT 43 COMP. GEN. 77, 80, THAT WHEREAS THE FOREGOING "RULE HAS REFERENCE TO THE END PRODUCT WE SEE NO REASON WHY IT IS NOT ALSO FOR APPLICATION WITH RESPECT TO DATA SUBMITTED PURSUANT TO THE TERMS OF THE INVITATION.' SEE, ALSO, B-158299, APRIL 19, 1966, WHERE WE SAID:

THE ADEQUACY OF DESCRIPTIVE DATA SUBMITTED WITH A BID AND THE SIGNIFICANCE OF DEVIATIONS THEREIN OFTEN, AS IN THIS CASE, INVOLVE HIGHLY TECHNICAL ENGINEERING AND SCIENTIFIC ISSUES. IN THIS KIND OF SITUATION WE MUST RELY ON THE FINDINGS OF THE CONTRACTING AGENCY WHICH, AS INDICATED ABOVE, HAS UTILIZED SCIENCIFICALLY TRAINED PERSONNEL WHO THOROUGHLY ANALYZED THE TECHNICAL ASPECTS OF THE BIDS. * * * SEE 35 COMP. GEN. 174 SUPPORTING AWARD MADE UPON AN AGENCY'S TECHNICAL EVALUATION OF BIDS WHERE NO FAVORTISM OR ARBITRARY OR CAPRICIOUS ACTION HAD BEEN SHOWN.

THEREFORE, AND SINCE THE SOLE DISPUTE IN THIS RESPECT APPEARS TO BE AN HONEST DIFFERENCE OF OPINION BETWEEN THE PROTESTING BIDDERS AND THE CONTRACTING OFFICER AS TO THE ADEQUACY OF THE LENKURT DESCRIPTIVE LITERATURE FOR PURPOSES OF BID EVALUATION AS TO WHICH WE CAN ASCRIBE NO ULTERIOR MOTIVES TO THE ACTIONS OF THE CONTRACTING OFFICIALS IN DETERMINING THAT THE DATA SUBMITTED BY LENKURT WAS, IN FACT, ADEQUATE, OUR OFFICE MAY NOT UNDERTAKE TO DISTURB THAT DETERMINATION. THE PROTESTS AGAINST THE OTHER ALLEGED INADEQUACIES OF LENKURT'S BID; I.E., FAILURE TO BID A DIVERSITY SWITCH AND ORDER WIRE, AND FAILURE TO MEET THE FADE MARGIN AND VIDEO SIGNAL-TO-NOISE REQUIREMENTS WILL BE DISCUSSED BELOW, SERIATIM.

ARTICLE 10 OF THE TECHNICAL SPECIFICATIONS, ENTITLED "DIVERSITY SWITCH," PROVIDES THAT "A DIVERSITY SWITCH FOR THE FREQUENCY DIVERSITY CHANNELS TO SELECT ONE OR THE OTHER MICROWAVE CHANNELS SHALL BE PROVIDED.' BY LETTER DATED JULY 18, 1968, COLLINS STATES THAT INSTEAD OF OFFERING A DIVERSITY SWITCH AS SPECIFIED FOR CONFIGURATION I, IT IS APPARENT THAT LENKURT INTENDS TO UTILIZE A "COMBINER" TO PERFORM THE FUNCTION OF THE DIVERSITY SWITCH. IN THIS REGARD COLLINS ADVISES THAT "IT IS ALMOST AXIOMATIC THAT A COMBINER AND A DIVERSITY SWITCH ARE COMPLETELY SEPARATE AND DISTINCT EQUIPMENTS WITH DIFFERENT OPERATIONAL CHARACTERISTICS.' COLLINS THEREFORE BELIEVES THAT LENKURT'S BID CONTAINED A MATERIAL DEVIATION TO THE SPECIFICATIONS. BY LETTER OF SEPTEMBER 16, 1968, RAYTHEON, IN COMMENTING ON THE ABOVE REPORT OF AUGUST 14, ALSO PROTESTED THE AWARD FOR THE SAME REASONS. THE SUPPLEMENTAL ADMINISTRATIVE REPORT OF OCTOBER 25 STATES IN PERTINENT PART THAT:

THE DIVERSITY SWITCH IS CALLED OUT IN THE FIRST PARAGRAPH ENTITLED "DIVERSITY SWITCH" ON PAGE III-10 OF LENKURT ELECTRIC CO. INC.'S DESCRIPTIVE LITERATURE SUBMITTED WITH THE IFB. FURTHER, THE DIVERSITY SWITCH IS CONTAINED ON THE DETAILED MATERIAL LIST AS AN INTEGRAL PART OF THE 75 FD RADIO TERMINAL. * * * THE CONTRACTING OFFICER AGREES THAT A COMBINER IS CALLED OUT IN THE LENKURT ELECTRIC CO. INC.'S DESCRIPTIVE LITERATURE ON PAGE III-3, BUT THE CONTRACTING OFFICER DOES NOT AGREE THAT THE COMBINER IS FOR THE SAME APPLICATION AS THE DIVERSITY SWITCH. IN THE LENKURT ELECTRIC CO. INC., DETAILED MATERIAL LIST FOR CONFIGURATION I, SHEET 1 OF 4 SHEETS, THERE IS NO LISTING FOR A COMBINER OR EQUIPMENT IN WHICH A COMBINER IS AN INTEGRAL PART. CONSEQUENTLY, THE COMBINER DISCUSSED ON PAGE III-3 UNDER PATH PROTECTION DOES NOT FORM A PART OF CONFIGURATION I OFFERED BY LENKURT ELECTRIC CO. INC., * * *

ARTICLE 10 ENTITLED "ORDER WIRE," PROVIDES THAT:

AN ORDER WIRE SHALL BE PROVIDED TO INTERCONNECT ALL STATIONS TO PROVIDE FOR SERVICE CHANNEL AND FAULT-ALARM FACILITIES. THE ORDER WIRE SUBCARRIER SHALL BE LOCATED ABOVE THE VIDEO BASEBAND ON ONE OF THE SUBCARRIER FREQUENCIES NOMINALLY UTILIZED BY A PROGRAM CHANNEL SUBCARRIER.

IN ITS LETTER OF JULY 9, 1968, RAYTHEON CONTENDS THAT LENKURT'S BID WAS NONRESPONSIVE TO THE SECOND SENTENCE OF THE ABOVE-QUOTED ORDER WIRE REQUIREMENT BECAUSE THE LENKURT DESCRIPTIVE DATA INCIDATES THAT THE SERVICE CHANNEL DOES NOT OPERATE WITHIN THE SPECIFIED RANGE. THE AUGUST 14 ADMINISTRATIVE REPORT CONCLUDES, HOWEVER, THAT A COMPREHENSIVE ANALYSIS OF THE DATA IN ACCORDANCE WITH CERTAIN STANDARDS COMMON TO THE INDUSTRY SHOWS CLEARLY THAT LENKURT PROPERLY BID AN ORDER WIRE WITHIN THE SPECIFIED RANGE.

RAYTHEON FURTHER CONTENDS THAT AN ANALYSIS OF THE LENKURT PATH CALCULATION DATA SHOWS THAT THE VIDEO SIGNAL-TO-NOISE REQUIREMENT OF THE "SYSTEM PERFORMANCE" SPECIFICATIONS WAS NOT MET. ARTICLE 8 OF THE SPECIFICATIONS PROVIDES IN PERTINENT PART THAT "THE END TO END SIGNAL TO- NOISE RATIO FOR THE OUTBOUND CHANNEL SHALL NOT BE LESS THAN 62 DB FLAT WEIGHTED (5MHZ).' RAYTHEON STATES IN ITS LETTER OF JULY 9 (AND COLLINS IN ITS LETTER OF JULY 18) THAT LENKURT ALSO FAILED TO MEET THE FADE MARGIN REQUIREMENT OF THE SPECIFICATION. ARTICLE 8 PROVIDES, IN THIS RESPECT, THAT:

ALL MICROWAVE RADIO PATHS SHALL BE DESIGNED WITH FADE MARGINS TO A 33 DB FLAT WEIGHTED MINIMUM SIGNAL-TO-NOISE RATIO * * *. FADE MARGINS SHALL BE EQUAL TO OR GREATER THAN THE FOLLOWING FOR THE OUTBOUND CHANNEL:

PATHS LESS THAN 35 KM 30 DB

PATHS 35-55 KM 40 DB

PATHS OVER 55 KM 43 DB

SPECIFICALLY, COLLINS STATES THAT LENKURT ERRONEOUSLY DISCUSSED 33 DECIBELS ADJUSTED (DBA) IN ITS DESCRIPTIVE LITERATURE INSTEAD OF A FLAT SIGNAL-TO-NOISE RATIO AS REQUIRED AND THAT "WHEN THE SIGNAL-TO-NOISE RATIO OF EACH RECEIVER IS WEIGHTED AS SPECIFIED BY LENKURT, * * * THE RESULTING FADE MARGIN IS BELOW, AND DOES NOT COMPLY WITH, THE SPECIFICATIONS.' THE ALTERNATIVE, COLLINS CONTENDS THAT IF LENKURT INTENDED TO BID AN UNWEIGHTED SIGNAL-TO-NOISE RATIO (DB), THE OFFERED FADE MARGIN IS THEORETICALLY IMPOSSIBLE BECAUSE OF OTHER CONTINGENCIES.

IT IS STATED IN THE AUGUST 14 ADMINISTRATIVE REPORT THAT "33 DBA" PERTAINS ONLY TO TELEPHONE COMMUNICATIONS AND IS NEVER APPLICABLE TO TELEVISION SYSTEMS, SUCH AS BEING PROCURED HERE. THEREFORE, BY TREATMENT OF THE OFFERED RATIO AS FLAT WEIGHTED AND BY THE APPLICATION OF RECOGNIZED FORMULAS, THE FIGURES FURNISHED BY LENKURT FOR THE VIDEO SIGNAL-TO-NOISE AND FADE MARGIN WERE RESPONSIVE TO THE SOLICITATION. IN HIS REPORT OF OCTOBER 25, ADDRESSED TO THE RAYTHEON PROTEST, THE CONTRACTING OFFICER STATES THAT HE DID NOT RELY ON THE APPLICATION OF RECOGNIZED FORMULAS TO DETERMINE THE RESPONSIVENESS OF LENKURT'S BID BUT ONLY TO VERIFY THE DETERMINATION OF RESPONSIVENESS. IN THIS RESPECT, THE CONTRACTING OFFICER ADVISES THAT THE COMPUTATIONS SUPPLIED IN HIS REPORT OF AUGUST 14 WERE INCORRECT, AS POINTED OUT BY RAYTHEON AND COLLINS, BUT STATES THAT THE CALCULATIONS CONTAINED IN THE GOVERNMENT ENGINEER'S AFFIDAVIT CONFIRM LENKURT'S RESPONSIVENESS TO THE PERFORMANCE REQUIREMENTS.

THE MANNER OF EVALUATION OF LENKURT'S BID IN ORDER TO DETERMINE COMPLIANCE WITH THE TECHNICAL EQUIPMENT AND PERFORMANCE SPECIFICATIONS MUST NECESSARILY BE GOVERNED BY THE LANGUAGE OF THE DESCRIPTIVE LITERATURE CLAUSE SET FORTH IN THE SOLICITATION. THAT CLAUSE PROVIDES THAT THE FAILURE OF THE DATA SUBMITTED TO SHOW THAT THE OFFERED MICROWAVE SYSTEM CONFORMS TO THE SPECIFICATIONS WILL REQUIRE REJECTION OF THE BID. THE COMPUTATIONS THAT WERE APPLIED BY THE CONTRACTING OFFICIALS TO DETERMINE THE RESPONSIVENESS OF LENKURT'S BID REQUIRED THE UTILIZATION OF CERTAIN FIGURES AND OTHER DATA THAT WERE NOT INCLUDED IN LENKURT'S BID OR DESCRIPTIVE LITERATURE. SPECIFICALLY, THE GOVERNMENT ENGINEER, IN HIS AFFIDAVIT OF OCTOBER 25, REPORTS THAT IN EVALUATING LENKURT'S BID, HIS CALCULATIONS REVEALED A 30.8 DB VIDEO SIGNAL-TO-NOISE RATIO. THE DIFFERENCE BETWEEN 30.8 DB AND 33 DB HAD TO BE ADEQUATELY ACCOUNTED FOR TO PROVE LENKURT'S FADE MARGINS AS BEING RESPONSIVE TO THE PERFORMANCE SPECIFICATIONS. THE GOVERNMENT ENGINEER REPORTS THAT THIS WAS READILY ACCOMPLISHED BY INCREASING THE POWER OUTPUT OF THE TRANSMITTERS TO PLUS 40 DBM, WHICH IS POSSIBLE, BECAUSE "IT IS A KNOWN FACT THAT LENKURT 75B TRANSMITTERS ARE RATED FOR OUTPUTS OF UP TO PLUS 40 DBM.' IT IS NOTED IN THIS REGARD THAT LENKURT DATA SPECIFIED POWER OUTPUTS OF ONLY UP TO PLUS 37 DBM ON ALL PATHS EXCEPT ONE WHERE TRANSMITTER POWER IS SET AT PLUS 38 DBM. RESTATED, IN ORDER TO GUARANTEE THAT THE OFFERED LENKURT MICROWAVE SYSTEM WOULD FULLY MEET THE FADE MARGIN PERFORMANCE SPECIFICATION OF THE SOLICITATION, IT WILL BE NECESSARY TO INCREASE THE POWER OUTPUT OF THE TRANSMITTERS TO BEYOND THAT OUTPUT SPECIFIED BY LENKURT. THE CONTRACTING OFFICER STATES THAT THE UTILIZATION OF A HIGHER POWER OUTPUT IN THE FADE MARGIN CALCUALTIONS THAN THAT SPECIFIED BY LENKURT IS PERMISSIBLE BECAUSE IT IS KNOWN THAT THE INCREASED POWER OUTPUT COULD, IN FACT, BE REACHED. TO VERIFY THIS FACT, THE GOVERNMENT ENGINEER CHECKED A LENKURT BROCHURE WHICH HAD PREVIOUSLY BEEN SUBMITTED TO THE PURCHASING ACTIVITY UNDER A PRIOR PLANNING REQUEST FOR QUOTATIONS. THEREFORE, CONTRARY TO THE INTENT OF THE DESCRIPTIVE LITERATURE CLAUSE, LENKURT'S BID WAS DETERMINED TO BE RESPONSIVE ONLY AFTER CONSIDERATION OF INFORMATION AVAILABLE TO THE GOVERNMENT ENGINEER BUT NOT INCLUDED IN THE DATA SUBMITTED WITH LENKURT'S BID.

WHILE IT IS TRUE, FOR THE REASONS STATED ABOVE, THAT A FINDING OF RESPONSIVENESS IS A FACTUAL DETERMINATION TO BE MADE BY THE CONTRACTING AGENCY, THE MANNER OF EVALUATION IS SUBJECT TO OUR REVIEW AND, AS SUCH, MUST BE IN ACCORDANCE WITH THE STATUTORY AND REGULATORY PROVISIONS GOVERNING PROCUREMENT BY FORMAL ADVERTISING.

THE REQUIREMENTS FOR THE STANDARD DESCRIPTIVE LITERATURE CLAUSE, SET FORTH AT ASPR 2-202.5, PROVIDE IN PART THAT:

(D) REQUIREMENTS OF INVITATION FOR BIDS.

(1) WHEN DESCRIPTIVE LITERATURE IS REQUIRED, THE INVITATION FOR BIDS SHALL CLEARLY STATE WHAT DESCRIPTIVE LITERATURE IS TO BE FURNISHED, THE PURPOSE FOR WHICH IT IS REQUIRED, THE EXTENT TO WHICH IT WILL BE CONSIDERED IN THE EVALUATION OF BIDS, AND THE RULES WHICH WILL APPLY IF A BIDDER FAILS TO FURNISH IT BEFORE BID OPENING OR IF THE LITERATURE FURNISHED DOES NOT COMPLY WITH THE REQUIREMENTS OF THE INVITATION FOR BIDS. WHERE DESCRIPTIVE LITERATURE IS NOT CONSIDERED NECESSARY AND A WAIVER OF THE LITERATURE REQUIREMENTS OF A SPECIFICATION HAS BEEN AUTHORIZED, A STATEMENT SHALL BE INCLUDED IN THE INVITATION FOR BIDS THAT NOTWITHSTANDING THE REQUIREMENTS OF THE SPECIFICATIONS, DESCRIPTIVE LITERATURE WILL NOT BE REQUIRED.

(E) WAIVER OF REQUIREMENTS FOR DESCRIPTIVE LITERATURE.

(1) THE PROVISION PRESCRIBED IN (D) (1) ABOVE MAY BE MODIFIED TO PROVIDE THAT THE REQUIREMENTS FOR FURNISHING DESCRIPTIVE LITERATURE MAY BE WAIVED AS TO A PARTICULAR BIDDER IF (I) THE BIDDER STATES IN HIS BID THAT THE PRODUCT HE IS OFFERING TO FURNISH IS THE SAME AS A PRODUCT PREVIOUSLY OR CURRENTLY BEING FURNISHED TO THE PURCHASING ACTIVITY AND (II) IT IS DETERMINED BY THE CONTRACTING OFFICER THAT SUCH PRODUCT COMPLIES WITH THE SPECIFICATION REQUIREMENTS OF THE CURRENT INVITATION FOR BIDS. * * *

IN THE PRESENT CASE, THE CONTRACTING OFFICER REPORTS THAT SINCE THIS WAS THE INITIAL PROCUREMENT OF THE ADVERTISED MICROWAVE SYSTEM, THE STANDARD WAIVER PROVISION OF THE DESCRIPTIVE LITERATURE CLAUSE WAS INTENTIONALLY OMITTED IN THE SOLICITATION. THE EFFECT OF THE OMISSION OF THE WAIVER PROVISION THEREFORE LIMITS THE EVALUATION OF BIDS TO THE CONSIDERATION ONLY OF DESCRIPTIVE INFORMATION SUBMITTED BY EACH BIDDER WITH ITS BID.

IN JUSTIFYING HIS CONSIDERATION OF DATA NOT SUBMITTED WITH LENKURT'S BID IN EVALUATING THE FADE MARGIN AND VIDEO SIGNAL-TO-NOISE RATIO REQUIREMENT, THE CONTRACTING OFFICER CITES OUR DECISION 39 COMP. GEN. 595. IN THAT CASE, WE CONSIDERED THE LEGAL EFFECT OF THE FAILURE OF A BIDDER TO SUPPLY THE REQUIRED CALCULATIONS EVEN THOUGH HE OTHERWISE SUPPLIED ALL OF THE NECESSARY DATA. WE HELD THAT THE CHALLENGED BID IN THAT CASE "SHOULD NOT BE REJECTED FOR FAILURE TO FURNISH THE MERE MATHEMATICAL COMPUTATIONS INCLUDED AS A PART OF THE DESCRIPTIVE DATA REQUIREMENT" BECAUSE THE AUTOMATIC REJECTION OF A BID FOR A FAILURE TO CONFORM TO A PURELY TECHNICAL OR OVERLITERAL READING OF THE SPECIFICATIONS MAY BE AS ARBITRARY AS A WAIVER OF NONRESPONSIVENESS TO A MATERIAL AND SUBSTANTIAL REQUIREMENT. IN SO STATING, WE POINTED OUT THAT:

* * * A DISTINCTION MUST BE DRAWN BETWEEN DATA WHICH REPRESENT A RELATIVELY FREE CHOICE BY THE BIDDER, AND DATA WHICH ARE BOUND BY THE APPLICATION OF INFORMATION FURNISHED IN THE INVITATION OR THE BID TO THE LIMITATIONS OF A RECOGNIZED MATHEMATICAL FORMULA OR RULE OF PHYSICS OR CHEMISTRY. STRICT APPLICATION OF THE GENERAL PRINCIPLE IN THE LATTER CASE WOULD APPEAR TO SERVE LITTLE PURPOSE OTHER THAN TO DETERMINE THE ABILITY OF THE BID PREPARER TO APPLY THE FORMULA OR RULE TO THE GIVEN INFORMATION. * * * FOR EXAMPLE, A BID COULD HARDLY BE REJECTED FOR THE BIDDER'S FAILURE TO PROVIDE A TOTAL FIGURE IN HIS DESCRIPTIVE LITERATURE, EVEN THOUGH REQUIRED BY THE TERMS OF THE INVITATION, IF SUCH TOTAL CLEARLY REPRESENTED NOTHING MORE THAN THE SUM OF THE SEVERAL ITEMS LISTED. THE REASON FOR THIS IS THAT THE TOTAL FIGURE IS NOT SUBJECT TO VARIANCE AFTER BID SUBMISSION AT THE OPTION OF THE BIDDER BUT IS FIXED BY THE OTHER INFORMATION SUBMITTED AND THE APPLICATION OF A RECOGNIZED MATHEMATICAL PRINCIPLE. REJECTION OF A BID IN THAT INSTANCE, NOTWITHSTANDING THE LANGUAGE OF THE DESCRIPTIVE LITERATURE REQUIREMENT, WOULD BE UNJUSTIFIED.

WE ARE OF THE OPINION THAT THE EXCEPTION STATED IN THE ABOVE-QUOTED DECISION TO THE GENERAL RULE GOVERNING THE EVALUATION OF DESCRIPTIVE LITERATURE IS NOT APPLICABLE IN THIS INSTANCE. WE HAVE NO ARGUMENT WITH THE APPLICATION BY THE GOVERNMENT ENGINEER OF A RECOGNIZED MATHEMATICAL FORMULA TO THE ACTUAL DATA SUPPLIED IN THE EVALUATION OF LENKURT'S BID TO DETERMINE THE RESPONSIVENESS THEREOF TO THE FADE MARGIN AND VIDEO SIGNAL- TO-NOISE RATION REQUIREMENTS. BUT, AS WE PREVIOUSLY NOTED, IN ORDER TO CERTIFY LENKURT'S OFFERED SYSTEM TO BE IN FULL COMPLIANCE WITH THE PERFORMANCE SPECIFICATIONS, IT WAS NECESSARY TO USE DATA IN EXCESS OF THAT CONTAINED IN LENKURT'S DESCRIPTIVE LITERATURE. THE INCREASED POWER OUTPUT FIGURE SUPPLIED BY THE GOVERNMENT ENGINEER DOES NOT OBLIGATE LENKURT TO FURNISH A TRANSMITTER HAVING A POWER OUTPUTUP TO PLUS 40 DBM BECAUSE "A RECOGNIZED MATHEMATICAL FORMULA OR RULE OF PHYSICS OR CHEMISTRY" WAS APPLIED TECHNICALLY TO ITS DATA. RATHER, THE OUTPUT FIGURE REPRESENTS A RELATIVELY "FREE CHOICE" BY THE BIDDER AS PROVEN BY THE FACT THAT LENKURT SPECIFICALLY LIMITED THE AMOUNT OF TRANSMITTER OUTPUT POWER TO PLUS 37 AND 38 DBM, INSTEAD OF PLUS 40 DBM FOUND NECESSARY BY THE GOVERNMENT ENGINEER TO RENDER LENKURT'S BID FULLY RESPONSIVE. AS STATED ABOVE, WE HAVE OFTEN OBSERVED THAT THE DRAFTING OF PROPER SPECIFICATIONS TO MEET THE MINIMUM REQUIREMENTS OF THE GOVERNMENT AND THE FACTUAL DETERMINATION WHETHER ANY PRODUCT OFFERED THEREUNDER CONFORMS TO THOSE SPECIFICATIONS, ARE MATTERS PRIMARILY WITHIN THE JURISDICTION OF THE PROCUREMENT ACTIVITY. HOWEVER, IN THE REPORTED CIRCUMSTANCES, IT APPEARS THAT LENKURT'S BID WAS NOT IN COMPLIANCE WITH THE REQUIREMENT FOR "FULL AND FREE" COMPETITION AS ENVISIONED BY THE STATUTE AND REGULATIONS GOVERNING PROCUREMENT BY FORMAL ADVERTISING. 46 COMP. GEN. 275, 277. HOWEVER, SINCE THE CONTRACT WAS ENTERED INTO ON JUNE 29, 1968, WITH DELIVERY SCHEDULED 210 DAYS THEREAFTER, AND SINCE THE BIDS OF THE OTHER RESPONDING BIDDERS WERE TECHNICALLY NONRESPONSIVE FOR THE REASONS STATED ABOVE, NO USEFUL PURPOSE WOULD BE SERVED BY DISTURBING THE AWARD AT THIS TIME. WE SUGGEST THAT THE ENTIRE PROCUREMENT BE CAREFULLY REVIEWED TO PRECLUDE A RECURRENCE OF THE PROTESTS DISCUSSED HERE.

WE REFER TO LETTER OF OCTOBER 10, 1968, AND ENCLOSURE, FROM THE HONORABLE THOMAS D. MORRIS, ASSISTANT SECRETARY OF DEFENSE (INSTALLATIONS AND LOGISTICS). THE LETTER CONCERNS THE AUTHORITY OF THE DEPARTMENT OF DEFENSE UNDER EXISTING LAW TO SHIP MILITARY TROOP SUPPORT CARGO ON FOREIGN VESSELS OPERATING FROM GREAT LAKES PORTS.

WE ARE ASKED TO GIVE OUR VIEWS ON THE PROPRIETY OF CHANGING EXISTING DEPARTMENT OF DEFENSE POLICY AND PRACTICES IN ORDER TO PERMIT THE USE OF GREAT LAKES PORTS AND FOREIGN VESSELS FOR SHIPMENT OVERSEAS OF MILITARY TROOP SUPPORT CARGO. A SUPPORTING MEMORANDUM OF LAW, FORWARDED WITH THE LETTER, CONCLUDES THAT WHERE AN INITIAL ANALYSIS INDICATES ROUTING OF A SHIPMENT THROUGH A TIDEWATER PORT UTILIZING U.S. FLAG SHIPPING WOULD RESULT IN GREATER TOTAL COSTS TO THE GOVERNMENT THAN ROUTING THE OBTAINABLE, THEN A SECOND ANALYTICAL STEP, INVOLVING A COMPARISON OF TOTAL COSTS FOR EACH ROUTE, EMPLOYING IN THIS COMPARISON THE LOWEST COST OCEAN FREIGHT RATES OBTAINABLE IN EACH AREA UNDER COMPARISON WOULD BE PERMISSIBLE.

IT IS EXPLAINED THAT THIS SECOND STEP WOULD BE DESIGNED TO IDENTIFY THOSE COSTS ATTRIBUTABLE TO "SEEKING OUT" AMERICAN FLAG SHIPPING. CARGO WOULD BE ROUTED THROUGH THE GREAT LAKES PORTS WHEN THIS SECOND STEP INDICATED THAT A ROUTING THROUGH A TIDEWATER PORT WOULD RESULT IN SIGNIFICANTLY GREATER COSTS. HOWEVER, IF THE PORT SELECTION COMPUTATION SHOWED THAT A ROUTING THROUGH A PORT WITH AVAILABLE AMERICAN SHIPPING WOULD RESULT IN LOWER COSTS, THAT ROUTING WOULD BE USED.