B-166628, MAY 20, 1969

B-166628: May 20, 1969

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THIS REQUEST FOR QUOTATIONS WAS ISSUED ON FEBRUARY 7. THE REQUEST WAS FOR THE PROCUREMENT BY THE ARMY METROLOGY AND CALIBRATION CENTER OF 156 POWER AMPLIFIERS FOR USE AS "STANDARD EQUIPMENT" IN THE VERIFICATION OF THE ACCURACY OF ARMY TEST EQUIPMENT. YOU HAVE STATED THAT THE POWER AMPLIFIERS IN QUESTION WERE PRIVATELY DEVELOPED BY HEWLETT-PACKARD IN 1961 AND HAVE BEEN STOCK COMMERCIAL ITEMS FOR THE PAST EIGHT YEARS. THE STOCK ITEMS TO MEET THE ARMY REQUIREMENTS ARE SAID TO NEED CERTAIN MODIFICATIONS OR OPTIONS SUCH AS SLIDE PULL-OUTS FOR SERVICING THE INSTRUMENT AND THE RELOCATION OF A REPLACEABLE FUSE FROM THE BACK PANEL TO THE FRONT PANEL. YOU HAVE ADVISED THAT HEWLETT PACKARD IN THE PAST SUPPLIED POWER AMPLIFIERS WITH THESE MODIFICATIONS TO THE ARMY'S FRANKFORD ARSENAL.

B-166628, MAY 20, 1969

TO WILMER, CUTLER AND PICKERING:

THIS CONCERNS YOUR REQUEST BY LETTER OF APRIL 8, 1969, ON BEHALF OF HEWLETT-PACKARD COMPANY FOR CANCELLATION OF REQUEST FOR QUOTATIONS NO. DAAH01-69-Q-0258, ISSUED BY THE UNITED STATES ARMY MISSILE COMMAND, REDSTONE ARSENAL, ALABAMA.

THIS REQUEST FOR QUOTATIONS WAS ISSUED ON FEBRUARY 7, 1969, AFTER PRIOR SOLICITATION OF SMALL BUSINESS CONCERNS FAILED TO YIELD OFFERS. THE REQUEST WAS FOR THE PROCUREMENT BY THE ARMY METROLOGY AND CALIBRATION CENTER OF 156 POWER AMPLIFIERS FOR USE AS "STANDARD EQUIPMENT" IN THE VERIFICATION OF THE ACCURACY OF ARMY TEST EQUIPMENT. THE REQUEST FOR QUOTATIONS AS ISSUED DESCRIBED BY PERFORMANCE SPECIFICATIONS A POWER AMPLIFIER WITH REQUIREMENT FOR FIRST ARTICLE APPROVAL. THIS METHOD OF PROCUREMENT AND IN PARTICULAR THE USE OF FIRST ARTICLE APPROVAL FORM THE BASIS FOR THE REQUEST FOR CANCELLATION OF THE SOLICITATION.

ON BEHALF OF YOUR CLIENT, YOU HAVE STATED THAT THE POWER AMPLIFIERS IN QUESTION WERE PRIVATELY DEVELOPED BY HEWLETT-PACKARD IN 1961 AND HAVE BEEN STOCK COMMERCIAL ITEMS FOR THE PAST EIGHT YEARS. THE STOCK ITEMS TO MEET THE ARMY REQUIREMENTS ARE SAID TO NEED CERTAIN MODIFICATIONS OR OPTIONS SUCH AS SLIDE PULL-OUTS FOR SERVICING THE INSTRUMENT AND THE RELOCATION OF A REPLACEABLE FUSE FROM THE BACK PANEL TO THE FRONT PANEL. FURTHER, YOU HAVE ADVISED THAT HEWLETT PACKARD IN THE PAST SUPPLIED POWER AMPLIFIERS WITH THESE MODIFICATIONS TO THE ARMY'S FRANKFORD ARSENAL. INASMUCH AS THE AMPLIFIERS ARE PRIVATELY DEVELOPED ITEMS AVAILABLE FROM MORE THAN ONE SOURCE AND THE GOVERNMENT DOES NOT HAVE NECESSARY DATA WITH UNLIMITED RIGHTS FOR USE IN SPECIFICATIONS FOR COMPETITIVE PROCUREMENT, YOU ASSERT THESE AMPLIFIERS SHOULD HAVE BEEN PROCURED AS PRIVATELY DEVELOPED ITEMS IN ACCORD WITH ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-304 AND NOT IN THE MANNER PRESENTLY USED BY THE ARMY MISSILE COMMAND.

IN RESPONSE TO OUR REQUEST FOR A REPORT ON THIS MATTER, THE ARMY HAS COMMENTED IN PART AS FOLLOWS: "1. IN RESPONSE TO HEWLETT PACKARD'S CONTENTION THAT IRREGULAR BID PROCEDURES WERE EMPLOYED IN THE SUBJECT PROCUREMENT IN THAT THE PROVISIONS OF ASPR 1-304 SHOULD HAVE BEEN EMPLOYED SINCE THIS IS THE PROCUREMENT OF A -PRIVATELY DEVELOPED ITEM,- THE FOLLOWING FACTS AND ANALYSIS ARE SUBMITTED:

"A. THIS OFFICE SUBMITS THAT THIS PROCUREMENT DOES NOT FALL WITHIN THE PURVIEW OF ASPR 1-304 (B) (1) BECAUSE THE PERFORMANCE SPECIFICATIONS DO NOT SUGGEST A -BRAND NAME- ITEM. WHILE THE PERFORMANCE SPECIFICATIONS FOR THE SUBJECT ITEM ARE SIMILAR TO THOSE OF HEWLETT-PACKARD'S MODEL 230A POWER AMPLIFIER, THERE ARE CRITICAL ENVIRONMENTAL REQUIREMENTS WHICH ARE NOT AVAILABLE IN THE HEWLETT PACKARD MODEL. WHILE HEWLETT-PACKARD STATES THAT THESE ADDITIONAL REQUIREMENTS ARE MERE MODIFICATIONS TO ITS MODEL 230A POWER AMPLIFIER, WHICH MODIFICATIONS ARE MORE APTLY DESCRIBED AS - OPTIONS,- WE CANNOT AGREE WITH THIS. IT IS ABSOLUTELY ESSENTIAL THAT THESE ITEMS ARE ABLE TO PERFORM UNDER THE SPECIFIED NON-OPERATIONAL ENVIRONMENTAL CONDITIONS. IN VIEW OF THIS, IT DOES NOT FOLLOW THAT THE CHANGES WHICH WOULD HAVE TO BE MADE TO THE HEWLETT-PACKARD MODEL IN ORDER TO MEET THE PERFORMANCE SPECIFICATIONS CAN BE TERMED MERE -OPTIONS.- (IT SHOULD BE NOTED THAT THE TECHNICAL EVALUATION SHOWS HEWLETT-PACKARD'S RESPONSE TO BE TECHNICALLY UNACCEPTABLE AS TO NON-OPERATIONAL ENVIRONMENTAL REQUIREMENTS WHICH WILL REQUIRE SUBSTANTIAL DISCUSSION AND TECHNICAL NEGOTIATIONS WITH THAT COMPANY IN AN ATTEMPT TO IMPROVE COMPETITION BY GIVING IT THE OPPORTUNITY TO AMEND ITS RESPONSE.)

"B. HEWLETT-PACKARD FURTHER CONTENDS THAT IT HAS SUPPLIED THE ARMY WITH A MODEL 230A AMPLIFIER HAVING THE SAME MODIFICATIONS AS THOSE WHICH WOULD BE REQUIRED BY THIS PROCUREMENT. ALTHOUGH THE ARMY DID PURCHASE A MODIFIED VERSION OF MODEL 230A POWER AMPLIFIER IN 1966, THOSE MODIFICATIONS WERE NOT THE SAME ONES WHICH WOULD BE REQUIRED IN THIS PROCUREMENT. THE SUBJECT PROCUREMENT WOULD REQUIRE MODIFICATIONS IN ADDITION TO THOSE REQUIRED UNDER THE 1966 PROCUREMENT. ALSO, THE AMPLIFIER PURCHASED IN 1966 WAS USED FOR TESTING PURPOSES WHEREAS THE ONES BEING PROCURED HERE ARE TO BE DEPLOYED IN THE FIELD.

"C. SINCE IT APPEARS THAT HEWLETT-PACKARD HAS NOT MANUFACTURED AN AMPLIFIER WHICH MEETS THE PERFORMANCE SPECIFICATION AND NEITHER HAS ANY OTHER COMPANY TO OUR KNOWLEDGE, IT FOLLOWS THAT A -BRAND NAME OR EQUAL- PROCUREMENT WAS NOT APPROPRIATE HERE. "2. AS TO THE CONTENTION THAT THE ITEM IN QUESTION IS AVAILABLE AS A -STOCK COMMERCIAL ITEM- AND THEREFORE UNDER ASPR 1-1902 (B) (III), FIRST ARTICLE APPROVAL IS NOT NECESSARY OR APPROPRIATE, FOR THE REASONS SET FORTH BELOW, THIS ASPR PROVISION IS INAPPLICABLE.

"A. AS POINTED OUT IN PARAGRAPH 2, TO OUR KNOWLEDGE, NEITHER HEWLETT- PACKARD NOR ANY OTHER MANUFACTURER HAS EVER PRODUCED AN AMPLIFIER WHICH WOULD MEET THE REQUIRED PERFORMANCE SPECIFICATIONS. ALTHOUGH THE HEWLETT- PACKARD MODEL DOES MEET MANY OF THESE SPECIFICATIONS, IT DOES NOT MEET A VERY CRITICAL ONE, I.E., NON OPERATIONAL ENVIRONMENTAL REQUIREMENTS.

"B. MOREOVER, IT APPEARS THAT THIS PROCUREMENT COMES WITHIN ASPR 1 1902 (A) (I) (C) WHICH PRESCRIBES FIRST ARTICLE APPROVAL TESTS WHEN THE PRODUCT IS DESCRIBED BY A PERFORMANCE SPECIFICATION. HERE THE AMPLIFIER IS DESCRIBED BY PERFORMANCE SPECIFICATIONS (MIS-10267) RATHER THAN BY DRAWINGS. ALSO THIS PROCUREMENT COMES WITHIN THE PROVISIONS OF ASPR 1- 1902 (B) (IV) WHICH PRESCRIBES THE FIRST ARTICLE APPROVAL WHERE THE PERFORMANCE REQUIREMENTS ARE SO EXACTING THAT IT CANNOT REASONABLY BE ANTICIPATED THAT THE SUPPLIES WILL MEET PERFORMANCE REQUIREMENTS WITHOUT FIRST ARTICLE APPROVAL. SINCE THE ITEM IS USED AS -STANDARDS EQUIPMENT- IN THE VERIFICATION OF ACCURACY OF A VARIETY OF ARMY TEST EQUIPMENT, FULL PERFORMANCE MUST BE ASSURED. THEREFORE, IT IS NECESSARY TO VERIFY THROUGH THE USE OF A FIRST ARTICLE THAT THE MODIFICATIONS PERFORMED ON A COMMERCIAL INSTRUMENT RESULT IN AN ITEM THAT WILL MEET FULL PERFORMANCE SPECIFICATIONS.'

WHILE BOTH YOUR LETTER OF APRIL 8, 1969, AND THE ADMINISTRATIVE REPORT FROM ARMY DISCUSS IN GREAT DETAIL THE RESPECTIVE FAVORED METHODS OF PROCUREMENT, THE REASONS THEREFOR, AND THE APPLICABLE REGULATIONS, IT IS EVIDENT FROM THE LETTER AND THE REPORT THAT THE MATTER INVOLVES A CLEAR DISPUTE OF FACT. THE APPROPRIATENESS OF THE PROCUREMENT METHOD USED DEPENDS UPON THE ACTUAL FACTS. WE CANNOT SAY, ON THE BASIS OF THE RECORD BEFORE US, THAT THE ADMINISTRATIVE VERSION OF THE FACTS HAS BEEN DEMONSTRATED TO BE WRONG. CONSEQUENTLY, WE CANNOT SAY THE USE OF THE PROCUREMENT METHOD SET OUT IN ASPR 1-1902 ET SEQ. WAS ERRONEOUS.

FOR THE ABOVE REASON, YOUR REQUEST ON BEHALF OF HEWLETT-PACKARD FOR CANCELLATION OF THE REQUEST FOR QUOTATIONS MUST BE DENIED.