B-167227, AUG. 1, 1969

B-167227, AUG. 1, 1969

BID PROTEST - FIRST ARTICLE TESTING DECISION TO HYDROMATICS, INC., DENYING PROTEST AGAINST AWARD BY NAVY TO FLO-TORK DIVISION, ALLEN ELECTRIC AND EQUIPMENT CO. FOR FURNISHING ACTUATORS FOR SUBMARINE REPAIR WORK UNDER TWO-STEP PROCUREMENT. RECORD SUPPORTS WAIVER OF FIRST ARTICLE TESTING AND PROCUREMENT PROCEDURE.

TO HYDROMATICS, INCORPORATED:

REFERENCE IS MADE TO YOUR TELEGRAM OF JUNE 12, 1969, PROTESTING AWARD OF CONTRACT TO FLO-TORK UNDER INVITATION FOR BIDS NO. N00102-69-B 0043. YOU ALLEGE THAT FLO-TORK DIVISION, ALLEN ELECTRIC AND EQUIPMENT COMPANY, WAS IMPROPERLY PERMITTED TO BID UNDER THE INVITATION FOR BIDS, THAT THE CONTRACTING OFFICER MADE THE AWARD TO FLO-TORK AFTER RECEIVING YOUR PROTEST IN CONTRAVENTION OF ARMED SERVICES PROCUREMENT REGULATION 2-407.9, AND THAT PROCURING ACTUATORS FROM FLO-TORK WILL RESULT IN STANDARDIZATION OF AN INFERIOR PRODUCT BY THE GOVERNMENT.

THE ADMINISTRATIVE REPORT INDICATES THAT PORTSMOUTH NAVAL SHIPYARD WAS ASSIGNED THE TASK OF PROCURING LONG LEAD TIME MATERIAL NECESSARY FOR THE ACCOMPLISHMENT OF SUBSAFE OVERHAULS ON THE SSN'S 603 - 607. IT WAS DETERMINED THAT A NECESSARY PORTION OF THIS TASK WAS THE REPLACEMENT OF ALL SEA WATER BALL VALVES. THESE VALVES WHICH WERE TO BE REPLACED WERE OF A PROPRIETARY DESIGN AND IT WAS DETERMINED TO BE IN THE BEST INTEREST OF THE GOVERNMENT THAT THESE VALVES SHOULD BE REPLACED WITH THE NAVY STANDARD BALL VALVE. THE REPLACEMENT OF THE VALVES REQUIRED REPLACEMENT OF THE ACTUATORS, WHICH LED TO THE INSTANT PROCUREMENT.

IT APPEARS THAT FLO-TORK IS THE ONLY SOURCE WHICH HAS PREVIOUSLY PROVIDED SATISFACTORY ACTUATORS WITH THE NAVY STANDARD VALVE. SINCE LEAD TIME WAS INSUFFICIENT TO ACQUIRE THE FIRST THREE SHIPSETS OF ACTUATORS ON A COMPETITIVE BASIS, A CONTRACT FOR THE PROCUREMENT OF THEM WAS NEGOTIATED WITH FLO-TORK. THE REMAINING TWO SHIPSETS OF ACTUATORS WERE TO BE PROCURED COMPETITIVELY BY TWO STEP FORMAL ADVERTISING.

REQUEST FOR TECHNICAL PROPOSALS WAS ISSUED ON SEPTEMBER 6, 1968. SEVEN PROPOSALS WERE RECEIVED AND AFTER EXTENSIVE NEGOTIATIONS THREE WERE DETERMINED TO BE ACCEPTABLE. INVITATION FOR BIDS WAS ISSUED ON MAY 20, 1969, TO THE THREE PROSPECTIVE CONTRACTORS HAVING SUBMITTED ACCEPTABLE PROPOSALS UNDER STEP ONE. SINCE THE GOVERNMENT HAD PREVIOUSLY ACCEPTED ACTUATORS OF THE DESIGN OFFERED BY FLO-TORK, AND THESE ACTUATORS HAD PROVEN SATISFACTORY IN THE SAME END USE OVER A 6-8 YEAR PERIOD, PROVISION WAS MADE IN THE IFB FOR FLO-TORK TO SUBMIT A BID ON THE BASIS OF WAIVER OF FIRST ARTICLE APPROVAL.

YOU ALLEGE THAT FLO-TORK WAS IMPROPERLY PERMITTED TO BID AS HAVING QUALIFIED EACH SIZE OF ACTUATOR. THE STIPULATION IN THE REQUEST FOR TECHNICAL PROPOSALS (STEP ONE), THAT A PROTOTYPE WOULD HAVE TO MEET THE QUALIFICATION TEST REQUIREMENTS IS INSERTED FOR THE PROTECTION OF THE GOVERNMENT TO INSURE THAT THE PRODUCT WILL PERFORM ACCORDING TO SPECIFICATIONS. IN THE IFB (STEP TWO), A CLAUSE PROVIDING FOR THE WAIVER OF FIRST ARTICLE APPROVAL AND FOR NOT WAIVING FIRST ARTICLE APPROVAL IS NOTED. FLO-TORK WAS PERMITTED TO BID UNDER THE WAIVER AND THE OTHER BIDDERS WERE NOT.

THE TESTING REQUIREMENTS FOR FIRST ARTICLE APPROVAL IN THE IFB WERE THE SAME SHOWN ON THE ORIGINAL SHIP BUILDER'S DRAWINGS UNDER WHICH FLO TORK ACTUATORS WERE PROCURED AND THE SAME AS THOSE GIVEN ON THE DRAWINGS PROVIDED IN STEP ONE. IT APPEARS FROM THE RECORD THAT WAIVER OF FIRST ARTICLE APPROVAL AND THE QUALIFICATION TESTS, WHICH ARE THE SAME, WAS COMPLETELY JUSTIFIED IN VIEW OF ASPR 1-1903 (A) WHICH PROVIDES, IN EFFECT, FOR WAIVER OF FIRST ARTICLE APPROVAL BY THE GOVERNMENT "WHERE SUPPLIES IDENTICAL OR SIMILAR TO THOSE CALLED FOR HAVE BEEN PREVIOUSLY FURNISHED BY THE BIDDER OR OFFEROR AND HAVE BEEN ACCEPTED BY THE GOVERNMENT.'

AS WAS BEFORE MENTIONED, FLO-TORK WAS A PREVIOUS SUPPLIER OF THESE ACTUATORS, WHICH HAD BEEN ACCEPTED BY THE GOVERNMENT AND PROVED SATISFACTORY OVER A NUMBER OF YEARS. IN VIEW OF THE SUCCESSFUL PERFORMANCE OF THESE ACTUATORS UNDER PREVIOUS GOVERNMENT CONTRACTS, WHICH WERE IDENTIFIED ON THE IFB BY FLO-TORK, WE THINK THE ACTION OF THE CONTRACTING OFFICER IN WAIVING THE TEST REQUIREMENTS FOR FLO-TORK WAS CORRECT.

COPIES OF THE TELEGRAMS SENT BY YOU TO THE PORTSMOUTH NAVAL SHIPYARD AND A REPORT OF THE TELEPHONE CONVERSATION YOU HAD WITH MRS. ABBOTT WERE SUBMITTED WITH THE ADMINISTRATIVE REPORT. THESE SUBMISSIONS INDICATE THAT AWARD WAS MADE TO FLO-TORK ON JUNE 10, 1969. ALSO, ON JUNE 10, 1969, AT 4:15 P.M. THE CONTRACTING OFFICER WAS INFORMED OF YOUR TELEPHONE CALL RECEIVED AT 3:55 P.M. INDICATING THAT YOU HAD FILED A PROTEST. HOWEVER, AT THIS TIME THE AWARD HAD ALREADY BEEN MADE. ON JUNE 11, 1969, YOUR TELEGRAM OF PROTEST WAS RECEIVED BY THE CONTRACTING OFFICER AND A REPLY WAS SENT TO YOU. BASED ON THESE REPORTS WE SEE NO MERIT IN YOUR ALLEGATION THAT THE CONTRACTING OFFICER'S ACTIONS WERE CONTRARY TO ASPR 2- 407.9, SINCE THE AWARD HAD BEEN MADE BEFORE YOUR PROTEST WAS RECEIVED.

CONCERNING YOUR ALLEGATION THAT AWARD TO FLO-TORK WILL RESULT IN THE STANDARDIZATION OF AN INFERIOR PRODUCT, THE ADMINISTRATIVE REPORT INDICATES THAT THE WEIGHT OF OPINION AMONG GOVERNMENT TECHNICAL PERSONNEL RESPONSIBLE FOR THE DESIGN AND CONSTRUCTION OF SUBMARINES SEEMS TO BE TO THE CONTRARY. THE USE OF FLO-TORK ACTUATORS WAS STANDARDIZED BY SECRETARIAL DETERMINATION AND FINDINGS PURSUANT TO 10 U.S.C. 2304 (A) (13) FOR ATTACK SUBMARINES OF THE SSN 637 CLASS. THIS CLASS SUBMARINE IS A MORE MODERN VERSION OF THE SAME SUBMARINES FOR WHICH THIS PROCUREMENT WAS MADE. IN FACT, ONE OF THE PURPOSES OF THE OVERHAUL PROGRAM FOR WHICH THIS PROCUREMENT WAS MADE IS TO BRING THE SSN'S 603 - 607 UP TO THE DESIGN STANDARDS OF THE SSN 637 IN CERTAIN RESPECTS.