B-167213, SEP 16, 1969

B-167213, SEP 16, 1969

BID PROTEST - QUALIFIED PRODUCTS LIST DECISION TO SECRETARY OF AIR FORCE SUSTAINING PROTEST OF GENERAL AERO PRODUCTS CORP. AGAINST AWARD TO INSTRUMENT SPECIALTIES CO., INC., LOW OFFEROR, FOR FURNISHING OIL PRESSURE INDICATIORS. ALTHOUGH AWARD TO LOW OFFEROR WHO WAS OFFERING RECLAIMED SURPLUS ITEMS NOT ON QUALIFIED PRODUCTS LIST BUT AS REQUIRED WAS CONTRARY TO 1 1107.1 (A) OF ASPR, CONTRACT IS NOT VOID. THEREFORE COUNTERVAILING FACTORS SUCH AS DELIVERY COMPLETION AND EQUIPMENT MEETING PERFORMANCE NEEDS MILITATE AGAINST CANCELLATION. IN FUTURE SIMILAR LAX PROCUREMENT PRACTICES SHOULD BE AVOIDED AND COMPLIANCE WITH REGULATIONS SHOULD BE INSURED.

MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED AUGUST 29, 1969, FROM THE CHIEF, PROCUREMENT OPERATIONS DIVISION, DIRECTORATE OF PROCUREMENT POLICY, DEPUTY CHIEF OF STAFF, SYSTEMS AND LOGISTICS, REPORTING UPON THE PROTEST BY GENERAL AERO PRODUCTS CORP. AGAINST THE AWARD OF A CONTRACT TO INSTRUMENT SPECIALTIES CO., INC., UNDER REQUEST FOR PROPOSALS (RFP) NO. F34601-69-R- 1333, ISSUED BY THE OKLAHOMA CITY AIR MATERIEL AREA, TINKER AIR FORCE BASE, OKLAHOMA.

THE SUBSTANCE OF THE PROTEST IS TWOFOLD: THAT INSTRUMENT SPECIALTIES IS SUPPLYING RECLAIMED SURPLUS ITEMS NOT LISTED ON THE APPLICABLE QUALIFIED PRODUCTS LIST (QPL); AND THAT SINCE THE ITEMS WERE MANUFACTURED OVER 10 YEARS AGO AND ARE BEING RECONDITIONED, THEY MAY BE UNABLE TO MEET THE SPECIFIED RELIABILITY AND SAMPLING TESTS.

THE RFP SOUGHT OFFERS ON 489 OIL PRESSURE INDICATORS, IN ACCORDANCE WITH MIL-I-7087 (DATED JANUARY 29, 1951) AND DRAWING MS28010. WE OBSERVE IN PASSING THAT MIL-I-7087A WAS ISSUED ON NOVEMBER 15, 1968, SUPERSEDING MIL- I-7087. THE RFP'S DATE OF ISSUE WAS FEBRUARY 28, 1969, SOME 3 1/2 MONTHS AFTER MIL-2-7087 HAD BEEN SUPERSEDED. WE HAVE NOT BEEN PROVIDED WITH ANY EXPLANATION AS TO WHY THE UPDATED VERSION OF THE SPECIFICATION WAS NOT REFERENCED IN THE INSTANT RFP.

MIL-I-7087 WAS THE BASIS FOR THE ESTABLISHMENT OF QPL 7087-9. ACCORDINGLY, THE FOLLOWING CLAUSE APPEARED ON PAGE 7 OF THE RFP:

"6. NOTICE - QUALIFIED END PRODUCTS (DEC. 1965)

"AWARDS FOR ANY END ITEMS WHICH ARE REQUIRED TO BE QUALIFIED PRODUCTS WILL BE MADE ONLY WHEN SUCH ITEMS HAVE BEEN TESTED AND ARE QUALIFIED FOR INCLUSION IN A QUALIFIED PRODUCTS LIST IDENTIFIED BELOW (WHETHER OR NOT ACTUALLY INCLUDED IN THE LIST) AT THE TIME SET FOR OPENING OF BIDS, OR THE TIME OF AWARD IN THE CASE OF NEGOTIATED CONTRACTS. OFFERORS SHOULD CONTACT THE OFFICE DESIGNATED BELOW TO ARRANGE TO HAVE THE PRDUCTS WHICH THEY INTEND TO OFFER TESTED FOR QUALIFICATIONS.

"THE OFFEROR SHALL INSERT THE ITEM NAME AND THE TEST NUMBER (IF KNOWN) OF EACH QUALIFIED PRODUCT IN THE BLANK SPACES BELOW.

"ITEM NAME TEST NO.

"OFFERORS OFFERING PRODUCTS WHICH HAVE BEEN TESTED AND QUALIFIED, BUT WHICH ARE NOT YET LISTED, ARE REQUESTED TO SUBMIT EVIDENCE OF SUCH QUALIFICATION WITH THEIR BIDS OR PROPOSALS, SO THAT THEY MAY BE GIVEN CONSIDERATION. IF THIS IS A FORMALLY ADVERTISED PROCUREMENT, ANY BID WHICH DOES NOT IDENTIFY THE QUALIFIED PRODUCT BEING OFFERED, EITHER ABOVE OR ELSEWHERE IN THE BID, WILL BE REJECTED.

"QPL: 7087-9

"P/N

"MANUFACTURER

"QUALIFYING AGENCY: COMMANDING OFFICER

U. S. NAVAL AIR STATION

JOHNSVILLE, PENNSYLVANIA"

EIGHT BUSINESS CONCERNS RESPONDED TO THE RFP. THE THREE LOWEST WERE AS FOLLOWS:

FIRM TOTAL BID PRICE

INSTRUMENT SPECIALTIES $12,811.80

ADVANCED SYSTEMS INC. 14,352.15

GENERAL AERO PRODUCTS 15,330.15

THE LOW OFFEROR INITIALLY PROPOSED TO FURNISH BENDIX PART NUMBER 25101- A2A-1-A1, WHICH WAS NOT LISTED ON QPL 7087-9. ON APRIL 2, 1969, 2 DAYS AFTER THE RECEIPT OF INITIAL PROPOSALS, INSTRUMENT SPECIALTIES TELEGRAPHICALLY MODIFIED ITS OFFER TO INDICATE AN INTENTION TO COMPLY WITH MIL-I-7087A, TO FURNISH THREE SAMPLE INSTRUMENTS FOR ENGINEERING EVALUATION, AND TO FURNISH BENDIX PART NUMBER 25100-A2C-1-B1. THIS LATTER PART NUMBER WAS ALSO NOT INCLUDED ON QPL 7087-9. IN ADDITION, INSTRUMENT SPECIALTIES APPARENTLY FAILED TO FURNISH ANY EVIDENCE, EITHER WITH ITS ORIGINAL OFFER OR LATER, THAT THE OFFERED PRODUCT WAS QUALIFIED FOR INCLUSION ON THE LIST.

THE PROVISION OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) WHICH IS GOVERNING IN THIS SITUATION IS SECTION 1-1107.1(A), WHICH STATES:

"(A) WHENEVER QUALIFIED PRODUCTS ARE TO BE PROCURED BY THE GOVERNMENT AS END ITEMS, ONLY BIDS OR PROPOSALS OFFERING PRODUCTS WHICH ARE QUALIFIED FOR LISTING ON THE APPLICABLE QUALIFIED PRODUCTS LIST AT THE TIME SET FOR OPENING OF BIDS OR AWARD OF NEGOTIATED CONTRACTS SHALL BE CONSIDERED IN MAKING AWARDS."

THE AWARD OF A CONTRACT ON THE BASIS OF AN OFFER OF A PRODUCT NOT LISTED ON THE APPLICABLE QPL, WHERE THE OFFEROR HAD NOT AFFIRMATIVELY SHOWN THAT THE PRODUCT WAS QUALIFIED FOR LISTING, VIOLATED THE QUOTED ASPR PROVISION. HOWEVER, THE INSTANT CONTRACT WAS NOT THEREBY RENDERED ABSOLUTELY VOID. CERTAIN COUNTERVAILING FACTORS EXIST WHICH, IN OUR OPINION, PROHIBIT OUR OFFICE FROM TAKING ANY ACTION AT THIS TIME.

NOT LEAST AMONG THESE CONSIDERATIONS IS THE FACT THAT DELIVERIES UNDER THE CONTRACT WILL BE COMPLETED AT AN EARLY DATE. IN ADDITION, BENDIX PART NUMBER 25100-A2C-1-B1 IS REPORTED TO HAVE BEEN LISTED ON QPL 7087-5 IN 1968. FURTHER, IN A LETTER DATED JULY 23, 1969, THE HEADQUARTERS OF THE AIR FORCE LOGISTICS COMMAND AT WRIGHT-PATTERSON AIR FORCE BASE (THE ACTIVITY REAPONSIBLE FOR THIS QPL) STATED AS FOLLOWS:

"5. THE GOVERNING SPECIFICATION FOR THE SOLICITATION WAS MIL-I-7087, DATED 29 JANUARY 1951. THIS SPECIFICATION REMANINED UNCHANGED THROUGHOUT NINE ISSUES OF QUALIFIED PRODUCTS LIST 7087. NEW ISSUES OF THE LIST WERE PUBLISHED TO REFLECT ADDITIONAL QUALIFIED PRODUCTS OR TO SUBSTITUTE NEW MANUFACTURERS' PART NUMBERS. THUS, BENDIX PART NUMBER 25100-A2C-1-B1, WHICH WAS INCLUDED ON QPL 7087-5, MAY BE CONSIDERED A QUALIFIED PRODUCT EVEN THOUGH IT DOES NOT APPEAR ON THE QPL WHICH WAS CURRENT AT THE TIME THAT THE SOLICITATION WAS DISTRIBUTED. IT DOES APPEAR, HOWEVER, THAT THE CONTRACTING OFFICER SHOULD HAVE OBTAINED IDENTIFICATION OF THE TEST REPORT WHICH QUALIFIED BENDIX PART NUMBER 25100-A2C-1-B1 BEFORE AWARDING THE CONTRACT."

SUCH A REPRESENTATION FROM THE RESPONSIBLE TECHNICAL AGENCY IS OF COURSE ENTITLED TO GREAT WEIGHT.

THE SECOND MATTER RAISED BY THIS PROTEST IS THE ASSERTED INABILITY OF THE ITEMS OFFERED BY INSTRUMENT SPECIALTIES TO MEET THE SPECIFIED TESTS. THE QUESTION POSED IS ONE WHOSE ANSWER REQUIRES TECHNICAL EXPERTISE AND ENGINEERING JUDGMENT. WHILE THE ADMINISTRATIVE RECORD IS NOT ENTIRELY CLEAR ON THIS POINT, IT APPEARS THAT COGNIZANT AIR FORCE PERSONNEL HAVE DETERMINED THAT THE RECLAIMED GOVERNMENT SURPLUS BENDIX INDICATORS BEING FURNISHED BY THE CONTRACTOR WILL FUNCTION AS REQUIRED AND ARE SATISFACTORY. IT HAS LONG BEEN RECOGNIZED THAT THE FACTUAL DETERMINATION AS TO WHETHER THAT WHICH IS OFFERED CONFORMS TO THE SPECIFICATIONS IS TO BE DECIDED PRIMARILY BY THE CONTRACTING AGENCY. B 164893, DECEMBER 23, 1968, 48 COMP GEN. ----------; 17 COMP. GEN. 554. FURTHERMORE, MATTERS INVOLVING QUESTIONS OF A TECHNICAL NATURE ARE NOT SUSCEPTIBLE OF DETERMINATION BY OUR OFFICE AND WE ACCEPT THE AGENCY'S POSITION IN THE ABSENCE OF EVIDENCE SHOWING CLEARLY THAT SUCH A POSITION IS ARBITRARY. SEE B-164615, AUGUST 26, 1968. WE SEE NO BASIS TO QUESTION THE VALIDITY OF THE TECHNICAL CONCLUSION REACHED BY THE AIR FORCE PERSONNEL.

IT IS CLEAR FROM THE ADMINISTRATIVE REPORT THAT THE CONTRACTING OFFICER KNEW, PRIOR TO AWARD, THAT RECONDITIONED SURPLUS UNITS WERE BEING OFFERED BY INSTRUMENT SPECIALTIES. THE RFP INCORPORATED BY REFERENCE THE FOLLOWING ASPR CLAUSES:

ASPR 1-1208 (A)

"NEW MATERIAL (1965 JAN.)

"EXCEPT AS TO ANY SUPPLIES AND COMPONENTS WHICH THE SPECIFICATION OR SCHEDULE SPECIFICALLY PROVIDES NEED NOT BE NEW, THE CONTRACTOR REPRESENTS THAT THE SUPPLIES AND COMPONENTS INCLUDING ANY FORMER GOVERNMENT PROPERTY IDENTIFIED PURSUANT TO THE 'GOVERNMENT SURPLUS' CLAUSE OF THIS CONTRACT TO BE PROVIDED UNDER THIS CONTRACT ARE NEW (NOT USED OR RECONDITIONED, AND NOT OF SUCH AGE OR SO DETERIORATED AS TO IMPAIR THEIR USEFULNESS OR SAFETY). IF AT ANY TIME DURING THE PERFORMANCE OF THIS CONTRACT, THE CONTRACTOR BELIEVES THAT THE FURNISHING OF SUPPLIES OR COMPONENTS WHICH ARE NOT NEW IS NECESSARY OR DESIRABLE, HE SHALL NOTIFY THE CONTRACTING OFFICER IMMEDIATELY, IN WRITING, INCLUDING THE REASONS THEREFOR AND PROPOSING ANY CONSIDERATION WHICH WILL FLOW TO THE GOVERNMENT IF AUTHORIZATION TO USE SUCH SUPPLIES IS GRANTED."

ASPR 1-1208 (D)

"GOVERNMENT SURPLUS (1965 JAN)

"(A) IN THE EVENT THE BID OR PROPOSAL IS BASED ON FURNISHING ITEMS OR COMPONENTS WHICH ARE FORMER GOVERNMENT SURPLUS PROPERTY OR RESIDUAL INVENTORY RESULTING FROM TERMINATED GOVERNMENT CONTRACTS, A COMPLETE DESCRIPTION OF THE ITEMS OR COMPONENTS, QUANTITY TO BE USED, NAME OF GOVERNMENT AGENCY FROM WHICH ACQUIRED, AND DATE OF ACQUISITION SHALL BE SET FORTH ON A SEPARATE SHEET TO BE ATTACHED TO BID OR PROPOSAL. NOTWITHSTANDING ANY INFORMATION PROVIDED IN ACCORDANCE WITH THIS PROVISION, ITEMS FURNISHED BY THE CONTRACTOR MUST COMPLY IN ALL RESPECTS WITH THE SPECIFICATIONS CONTAINED HEREIN.

"(B) EXCEPT AS DISCLOSED BY THE CONTRACTOR IN (A) ABOVE, NO PROPERTY OF THE TYPE DESCRIBED HEREIN SHALL BE FURNISHED UNDER THIS CONTRACT UNLESS APPROVED IN WRITING BY THE CONTRACTING OFFICER."

WITH RESPECT TO INSTRUMENT SPECIALTIES' OFFER OF RECLAIMED SURPLUS INDICATORS, THE AUGUST 29 COVER LETTER STATED AS FOLLOWS:

"7. THE PROTESTOR FURTHER ALLEGES THAT THE LOW OFFEROR IS FURNISHING RECLAIMED MATERIAL. IN THIS CONNECTION AIR FORCE LOGISTICS COMMAND ADVISES THAT THE CONTRACTING OFFICER STATED THAT THE NEW AND UNUSED INDICATORS WILL BE REHABILITATED TO COMPLY WITH SPECIFICATION REQUIREMENTS. WE ARE NOT COMPLETELY SATISFIED THAT THE OFFERED EQUIPMENT FULLY MEETS THE REQUIREMENTS OF THE 'NEW MATERIAL' PROVISION OF THE CONTRACT SINCE THE SUPPLIES ARE OF SUCH AN AGE AS TO REQUIRE REHABILITATION. IN VIEW OF THE TIME ELAPSED SINCE AWARD AND THE IMMINENCE OF CONTRACTOR'S DELIVERY OF THE REQUIRED END ITEMS, IT DOES NOT APPEAR TO BE IN THE BEST INTERESTS OF THE GOVERNMENT TO CANCEL THE AWARD TO INSTRUMENT SPECIALTIES. WE HAVE REQUESTED THE AIR FORCE LOGISTICS COMMAND TO TAKE APPROPRIATE ACTION TO ASSURE THAT IN FUTURE PROCUREMENTS OF THESE SUPPLIES NEW AND UNUSED PRODUCTS THAT ARE OF SUCH AN AGE AS TO REQUIRE REHABILITATION ARE REJECTED AS NONRESPONSIVE TO THE 'NEW MATERIAL' PROVISION OF THE SOLICITATION."

THE AWARD IN THIS CASE WAS MADE IN CONTRAVENTION OF ASPR 1-1208(A). HOWEVER, WE AGREE THAT THE GOVERNMENT'S BEST INTERESTS WOULD NOT BE SERVED BY A CANCELLATION AT THIS LATE DATE.

IN SUMMARY, THE LAX PROCUREMENT PRACTICES FOLLOWED IN THIS CASE SHOULD BE AVOIDED IN THE FUTURE. THE STATED EFFORTS TO INSURE COMPLIANCE WITH ASPR 1-1208(A) SHOULD BE EXPANDED TO COVER COMPLIANCE WITH ASPR 1-1107.1(A). IN ADDITION, THE USE OF A SUPERSEDED MILITARY SPECIFICATION INDICATES THAT PRESENT PROCEDURES FOR ADVISING CONTRACTING OFFICERS OF REVISIONS IN SUCH SPECIFICATIONS MAY NEED TO BE STRENGTHENED.