B-167291(1), DEC. 1, 1969

B-167291(1): Dec 1, 1969

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WAS NOT LEGALLY IMPROPER SINCE CONTRACTING OFFICER'S DECISION IS NOT BELIEVED TO HAVE BEEN CLEARLY ARBITRARY OR CAPRICIOUS. ACTION TAKEN BY PROCURING AND REQUIRING DEPARTMENTS CONCERNED IS NOT BELIEVED CONDUCIVE TO STIMULATING MAXIMUM COMPETITION FOR THIS PROCUREMENT. TO IMC MAGNETICS CORPORATION: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 18. ALTHOUGH YOU WERE THE LOW OFFEROR. AWARD WAS MADE TO NORTHFIELD BECAUSE OF THE INABILITY OF THE GOVERNMENT TO DETERMINE FROM THE INFORMATION FURNISHED WITH YOUR PROPOSAL. IF YOUR PRODUCT WAS TECHNICALLY ACCEPTABLE. ASSERTING THAT YOU HAVE PREVIOUSLY SUPPLIED THE PRODUCT TO THE GOVERNMENT. THE INSTANT PROCUREMENT WAS INITIATED BY THE DEFENSE CONSTRUCTION SUPPLY CENTER (DCSC) UPON RECEIPT OF A MILITARY INTERDEPARTMENTAL PURCHASE REQUEST (MIPR) FROM THE DEPARTMENT OF THE NAVY.

B-167291(1), DEC. 1, 1969

SPECIFICATIONS--CONFORMABILITY OF EQUIPMENT, ETC; OFFERED--TECHNICAL DEFICIENCIES--NEGOTIATED PROCUREMENT UNDER REQUEST REQUIRING INDICATION OF MANUFACTURING SITUATION APPLICABLE TO OFFERED PRODUCT, REJECTION OF PROPOSAL (AT SUBSTANTIALLY LOWER UNIT PRICE) OF PRIOR SUPPLIER WHO FAILED TO INDICATE MANUFACTURING SITUATION APPLICABLE DESPITE REQUEST WARNING SUCH OMISSION MIGHT PRECLUDE CONSIDERATION, AND WHO FAILED TO FURNISH ADEQUATE SUPPORTING DATA, WAS NOT LEGALLY IMPROPER SINCE CONTRACTING OFFICER'S DECISION IS NOT BELIEVED TO HAVE BEEN CLEARLY ARBITRARY OR CAPRICIOUS, BUT ACTION TAKEN BY PROCURING AND REQUIRING DEPARTMENTS CONCERNED IS NOT BELIEVED CONDUCIVE TO STIMULATING MAXIMUM COMPETITION FOR THIS PROCUREMENT, ABSENT DISCUSSIONS PRIOR TO REJECTION WITH OFFERORS WITHIN COMPETITIVE RANGE, PRICE AND OTHER FACTORS (INCLUDING TECHNICAL ACCEPTABILITY) CONSIDERED.

TO IMC MAGNETICS CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 18, 1969, PROTESTING AGAINST AWARD TO NORTHFIELD ELECTRIC MOTOR COMPANY (NORTHFIELD) OF A CONTRACT PURSUANT TO REQUEST FOR PROPOSALS (RFP) NO. DSA 700-69-R-4718, ISSUED BY THE DEFENSE SUPPLY AGENCY, DEFENSE CONSTRUCTION SUPPLY CENTER, COLUMBUS, OHIO. ALTHOUGH YOU WERE THE LOW OFFEROR, AWARD WAS MADE TO NORTHFIELD BECAUSE OF THE INABILITY OF THE GOVERNMENT TO DETERMINE FROM THE INFORMATION FURNISHED WITH YOUR PROPOSAL, AND OTHER AVAILABLE DATA, IF YOUR PRODUCT WAS TECHNICALLY ACCEPTABLE. ASSERTING THAT YOU HAVE PREVIOUSLY SUPPLIED THE PRODUCT TO THE GOVERNMENT, YOU QUESTION THE PROPRIETY OF THE AWARD.

THE INSTANT PROCUREMENT WAS INITIATED BY THE DEFENSE CONSTRUCTION SUPPLY CENTER (DCSC) UPON RECEIPT OF A MILITARY INTERDEPARTMENTAL PURCHASE REQUEST (MIPR) FROM THE DEPARTMENT OF THE NAVY. THE MIPR TRANSMITTED A REQUIREMENT FOR 100 ELECTRIC MOTORS (SUBSEQUENTLY INCREASED TO 220), TO BE IN ACCORDANCE WITH AMPEX CORPORATION PART NUMBER DRAWING D8127 REV D. THE MIPR LISTED YOUR FIRM, NORTHFIELD, AND ASHLAND ELECTRIC PRODUCTS AS ALTERNATE SOURCES OF SUPPLY FOR MOTORS CONFORMING TO THE AMPEX DRAWING. THE MIPR DID NOT REFLECT ANY PRIOR PURCHASES OF THE MOTORS FROM YOUR FIRM, NOR DID IT LIST ANY ACCEPTABLE PART NUMBER OTHER THAN THE AMPEX NUMBER.

DCSC THEN INQUIRED OF THE NAVY ELECTRONICS SUPPLY OFFICE, GREAT LAKES, ILLINOIS (ESO) WHETHER THE AVAILABLE DATA WOULD PERMIT FORMAL ADVERTISING. BY WIRE DATED DECEMBER 9, 1968, ESO ADVISED THAT THE AMPEX DRAWING WAS NOT ADEQUATE FOR FORMAL ADVERTISING. A DETERMINATION AND FINDINGS WERE MADE TO SUPPORT PROCUREMENT BY NEGOTIATION UNDER 10 U.S.C. 2304 (A) (10) AS IMPLEMENTED BY ARMED SERVICES PROCUREMENT REGULATION (ASPR) 3-210.2 (XIII). THE RFP, ISSUED ON DECEMBER 31, 1968, CONTAINED THE FOLLOWING DESCRIPTION OF THE MOTORS:

"FSN 2N 6105-348-6787

MOTOR, A.C.

MANUFACTURED BY OR SUPPLIED UNDER THE FOLLOWING PART NUMBER/S) -

ASHLAND ELECTRIC PRODUCTS, INC. - P/N D8127 REV. D

NORTHFIELD ELECTRONICS - P/N D8127-REV.

IMC MAGNETICS - P/N D8127REV.D

TO BE COMPLETED BY ALL OFFERORS, OFFER BASED ON -

MANUFACTURER'S NAME --------------------

PART NUMBER --------------------.'

IN ADDITION, THE FOLLOWING PROVISION RELEVANT TO YOUR PROTEST APPEARED IN THE RFP:

"CLAUSE 2.102 - PRODUCTS OFFERED

"/A) PRODUCTS OFFERED MUST EITHER BE IDENTICAL OR FUNCTIONALLY, PHYSICALLY, MECHANICALLY AND ELECTRICALLY INTERCHANGEABLE WITH THE PRODUCTS CITED IN EACH ITEM DESCRIPTION OF THIS SOLICITATION.

"/B) FOR EVALUATION PURPOSES OFFERORS MUST INDICATE, BY MARKING THE APPROPRIATE BLOCK/S), WHICH OF THE FOLLOWING SITUATIONS IS APPLICABLE TO EACH ITEM WHICH THEY ARE OFFERING AND FURNISH WHATEVER SUPPORTING INFORMATION IS REQUIRED BELOW. -FAILURE TO FURNISH COMPLETE DATA AND INFORMATION REQUIRED TO SUPPORT SITUATIONS (2), (3) AND (4) BELOW MAY PRECLUDE CONSIDERATION OF YOUR PROPOSAL.- ( ( (1) FOR ITEMS ---------- WILL FURNISH THE CITED MANUFACTURER'S PRODUCT BEARING THE NUMBER SPECIFIED. NOTE: IF MORE THAN ONE MANUFACTURER'S NUMBER IS SPECIFIED IN THE SCHEDULE, THE OFFEROR MUST INSERT BENEATH THE APPLICABLE ITEM/S) OF THE SCHEDULE THE MANUFACTURER'S NAME AND NUMBER WHICH HE IS OFFERING. ( ( (2) FOR ITEMS ---------- WILL FURNISH A PRODUCT MANUFACTURED IN ACCORDANCE WITH THE CITED MANUFACTURER'S DRAWING OR SPECIFICATION, BUT BEARING A DIFFERENT NUMBER. NOTE: THIS BLOCK MUST BE COMPLETED BY OFFERORS MANUFACTURING THE ITEM DESCRIBED IN THE SCHEDULE FOR THE COMPANY OR FIRM WHOSE NAME AND NUMBER IS SPECIFIED. OFFERORS MUST INSERT BENEATH THE APPLICABLE ITEM OF THE SCHEDULE THE SUBSTITUTED MANUFACTURER'S NAME AND PART NUMBER. IN ADDITION, THE OFFEROR MUST FURNISH A COPY OF THE DRAWING OR SPECIFICATION FOR THE PART NUMBER CITED IN THE SCHEDULE OR OTHER INFORMATION TO ESTABLISH THAT THE OFFEROR WILL FURNISH THE SAME ITEM AS DESCRIBED IN THE SCHEDULE BUT HAVING A DIFFERENT NUMBER. ( ( (3) FOR ITEMS ---------- WILL FURNISH A PRODUCT DETERMINED UNDER PRIORITY MILITARY CONTRACTS, EITHER AS A PRIME OR SUBCONTRACTOR TO BE FUNCTIONALLY, PHYSICALLY, MECHANICALLY AND ELECTRICALLY INTERCHANGEABLE WITH THE PRODUCT CITED IN THIS SOLICITATION THOUGH NOT MANUFACTURED IN ACCORDANCE WITH THE CITED MANUFACTURER'S DRAWING OR SPECIFICATION. NOTE: OFFERORS RELYING ON THIS PARAGRAPH (3) MUST INSERT BENEATH THE APPLICABLE ITEM OF THIS SOLICITATION THE SUBSTITUTED MANUFACTURER'S NAME AND NUMBER, AND, IN ADDITION, FURNISH SUFFICIENT DATA TO SUITABLY SUBSTANTIATE THE ITEM AS ACCEPTABLE, E.G., (1) COPY OF CONTRACT OR PURCHASE ORDER UNDER WHICH FURNISHED, (2) COPY OF A DRAWING TO WHICH MADE, (3) COPY OF LETTER OR CERTIFICATE OF APPROVAL, ETC. ( ( (4) FOR ITEMS ---------- WILL FURNISH A PRODUCT WHICH IS EQUAL IN ALL MATERIAL RESPECTS TO THE PRODUCT REFERENCED IN THE ITEM DESCRIPTION. NOTE: THE GOVERNMENT DOES NOT HAVE DETAILED DATA FOR THE ITEM REFERENCED IN THE ITEM DESCRIPTION. THEREFORE, OFFERORS RELYING ON THIS PARAGRAPH (4) MUST FURNISH WITH THEIR OFFERS DRAWINGS AND OTHER DATA WHICH WILL CLEARLY DESCRIBE THE CHARACTERISTICS AND FEATURES OF THEIR PRODUCT. IN ADDITION, OFFERORS MUST FURNISH DRAWINGS OR OTHER DATA COVERING DESIGN, MATERIALS, PERFORMANCE, ETC., OF THE PRODUCT CITED IN THE SCHEDULE SUFFICIENT TO ENABLE THE GOVERNMENT TO DETERMINE THAT THE OFFEROR'S PRODUCT IS EQUAL TO THE PRODUCT NAMED IN THE SCHEDULE.'

ONLY NORTHFIELD AND IMC MAGNETICS SUBMITTED OFFERS. NORTHFIELD'S OFFER WAS BASED ON THE SPECIFIED PART NUMBER D8127 REV. D AT A UNIT PRICE OF $157.50, AND NORTHFIELD CHECKED BLOCK 1 OF RFP CLAUSE 2.102, QUOTED ABOVE. YOU OFFERED YOUR PART NUMBER FBC2920H-2 AT A UNIT PRICE OF $108.50, AND ALTHOUGH YOU ENCLOSED AN OUTLINE DRAWING OF YOUR MOTOR, YOU DID NOT CHECK BLOCK 2, 3, OR 4 OF CLAUSE 2.102 TO SHOW THE PRECISE BASIS FOR SUPPLYING THAT DRAWING. ON JANUARY 31, 1969, DCSC SENT TO ESO FOR EVALUATION THE OUTLINE DRAWING ENCLOSED WITH YOUR OFFER. BY LETTER OF FEBRUARY 12, 1969, ESO REPLIED THAT IT WAS IMPOSSIBLE TO EVALUATE AS TO THE ACCEPTABILITY OF YOUR PROPOSAL, AS YOUR DRAWING WAS CONSIDERED TO BE INADEQUATE ALONG WITH THE AMPEX DRAWING. THE CONTRACTING OFFICER THEN REJECTED YOUR OFFER AND MADE AWARD TO NORTHFIELD.

UPON NOTIFICATION OF AWARD TO NORTHFIELD, YOU PROTESTED ON THE BASIS THAT YOU HAD PREVIOUSLY SUPPLIED THE MOTOR TO THE NAVY UNDER CONTRACT NO. N00126-69-C-0055, DATED JULY 31, 1968. THE SUPPLIES FURNISHED UNDER THAT CONTRACT WERE DESCRIBED AS:

"MOTOR, A.C.:

IT. 4 OF DRAWING D-8127 TO READ

-MS3108B-16S-1P-.

IMC MAGNETICS CORP.

ASHLAND ELECTRIC PRODUCTS INC.

NORTHFIELD REF. NO. 2565 PER

AMPEX REF. NO. 8127-10

FSN 2N 6105-348-6787.' DCSC THEN ASKED ESO (1) WHETHER THE NAVY HAD APPROVED YOUR PART NUMBER FBC2920H-2; (2) WHETHER THE PART HAD BEEN EVALUATED FOR THE PRIOR PROCUREMENT AND IF SO, WHY IT WAS DISAPPROVED; AND (3) WHETHER THE PART HAD BEEN APPROVED BY THE NAVY AT THE TIME OF YOUR PROTEST. BY WIRE OF JULY 2, 1969, ESO ADVISED THAT YOUR PART NUMBER FBC2920H-2 HAD NOT BEEN APPROVED AND THAT NO EVALUATION OF IT HAD BEEN MADE FOR THE PRIOR CONTRACT BECAUSE THERE YOU OFFERED AN ITEM IN ACCORDANCE WITH THE AMPEX DRAWING. SINCE YOU HAD NOT OFFERED AN ALTERNATE PART, NO EVALUATION WAS DEEMED NECESSARY IN THE 1968 PROCUREMENT. DCSC CONTINUED ITS EFFORTS TO HAVE THE NAVY EVALUATE YOUR PRODUCT AND YOU WERE REQUESTED TO SUBMIT DATA TO ESO FOR THIS PURPOSE. HOWEVER, BY WIRE OF SEPTEMBER 10, 1969, ESO INFORMED DCSC:

"* * * IMC OUTLINE DWG FOR PN FBC 2920H-2 RECEIVED 26 AUG 69 IS INADEQUATE TO EVALUATE FOR INTERCHANGEABILITY. SAME DWG RECEIVED FOR REVIEW ON DSA 700-69-C-9612. (INSTANT CONTRACT.)

"* * * ON CONTRACT DSA 700-69-C-9612 IMC OFFERED THEIR PN FBC 2920H 2 IN LIEU OF AMPEX D8127 REV D AS STATED * * * ABOVE IMC DWG INADEQUATE TO EVALUATE. IMC OFFER NOT ACCEPTABLE.

"* * * IMC WILL BE CONSIDERED A SOURCE OF SUPPLY ONLY WHEN THEY BID TO THE AMPEX DWG D8127 REV " THUS, THE PRESENT RECORD IS INCONCLUSIVE AS TO WHETHER YOUR PART NUMBER FBC2920H-2 IS, IN FACT, INTERCHANGEABLE WITH AMPEX PART NUMBER D8127 REV. D, ALTHOUGH THERE IS NO INDICATION OF MATERIAL DISCREPANCY REPORTS ON THE MOTORS SUPPLIED UNDER YOUR CONTRACT OF JULY 31, 1968.

IN EXAMINING THE ACTIONS OF THE DCSC CONTRACTING OFFICER, IT MUST BE BORNE IN MIND THAT THE FUNCTIONS OF THE PROCURING AGENCY (DEFENSE SUPPLY AGENCY) IN THIS INTERDEPARTMENTAL PROCUREMENT ARE TO PLAN THE PROCUREMENT, EXECUTE THE CONTRACT, AND ARRANGE FOR CONTRACT ADMINISTRATION, ASPR 5- 1102. HOWEVER, THE DEFINITION OF THE GOVERNMENT'S NEEDS AND TECHNICAL GUIDANCE ARE FURNISHED BY THE REQUIRING DEPARTMENT (NAVY). ASPR 5-1106.5, ENTITLED "SPECIFICATIONS, DRAWINGS AND OTHER PURCHASE DATA," STATES IN PERTINENT PART:

"THE REQUIRING DEPARTMENT SHALL FURNISH TO THE PROCURING DEPARTMENT A LIST (OR COPIES) OF SPECIFICATIONS, DRAWINGS, AND OTHER DATA, AS APPROPRIATE, REQUIRED FOR THE PROCUREMENT. * * * UNDER NO CIRCUMSTANCES SHALL THE PROCURING DEPARTMENT DIRECT OR AUTHORIZE DEVIATIONS OR WAIVERS FROM THE SPECIFICATIONS, DRAWINGS, OR OTHER PURCHASE DATA INCLUDED IN THE MIPR WITHOUT EXPRESS AUTHORITY OF THE REQUIRING DEPARTMENT (WITH AN EXCEPTION NOT MATERIAL HERE).' IT WAS ENTIRELY PROPER FOR THE CONTRACTING OFFICER TO SUBMIT YOUR OUTLINE DRAWING OF PART NUMBER FBC2920H-2 FOR THE NAVY'S EVALUATION AND APPROVAL. THE CONTRACTING OFFICER, WHO HAD NO KNOWLEDGE OF THE PREVIOUS PROCUREMENT, WAS ADVISED BY THE NAVY THAT THE ACCEPTABILITY OF YOUR PROPOSAL COULD NOT BE EVALUATED FROM THE DRAWINGS INVOLVED. IT WAS UPON THIS ADVICE THAT HE DECIDED YOUR PROPOSAL OFFERED AN ALTERNATE PART, AND REJECTED YOUR OFFER ON THE BASIS THAT IT COULD NOT BE EVALUATED.

BOTH 10 U.S.C. 2304 (G) AND ASPR 3-805.1 (A) GENERALLY REQUIRE DISCUSSIONS WITH OFFERORS WHO SUBMIT PROPOSALS WITHIN A COMPETITIVE RANGE, PRICE AND OTHER FACTORS CONSIDERED. "OTHER FACTORS" HAS BEEN HELD TO INCLUDE THE TECHNICAL ACCEPTABILITY OF PROPOSALS. 46 COMP. GEN. 606 (1967). IN OUR OPINION, A PROPOSAL MUST BE REGARDED AS BEING WITHIN A COMPETITIVE RANGE UNLESS IT IS SO TECHNICALLY DEFICIENT OR OUT OF LINE IN PRICE AS TO PRECLUDE FURTHER MEANINGFUL NEGOTIATIONS. PARTICULARLY WITH RESPECT TO TECHNICAL CONSIDERATIONS, HOWEVER, WE RECOGNIZE A REASONABLE DEGREE OF ADMINISTRATIVE DISCRETION IN DETERMINING WHETHER A PROPOSAL IS WITHIN THE COMPETITIVE RANGE. B 163024, AUGUST 27, 1968. WHILE WE DO NOT CONCLUDE THAT THE CONTRACTING OFFICER'S DECISION WAS CLEARLY ARBITRARY OR CAPRICIOUS, WE BELIEVE THAT THE ACTIONS TAKEN BY DCSC AND THE DEPARTMENT OF THE NAVY WERE NOT CONDUCIVE TO OBTAINING MAXIMUM COMPETITION FOR THE PROCUREMENT.

THE NAVY INFORMED DCSC ON FEBRUARY 12, 1969, THAT YOUR DRAWING WAS CONSIDERED TO BE INADEQUATE ALONG WITH THE AMPEX DRAWING. HOWEVER, DURING THE FOUR-MONTH PERIOD FROM THE RECEIPT OF THIS ADVICE UNTIL AWARD TO NORTHFIELD, NEITHER DCSC NOR THE NAVY ATTEMPTED TO OBTAIN MORE DETAILED DRAWINGS OR INFORMATION CONCERNING THE PRODUCTS INVOLVED. A CONCERTED EFFORT TO EVALUATE THE ACCEPTABILITY OF YOUR PRODUCT OCCURRED ONLY AFTER AWARD AND YOU HAD PROTESTED TO THIS OFFICE. UNDER THE RATHER STRICT AND RIGID RULES OF FORMAL ADVERTISING, A BID WHICH DID NOT CONFORM TO THE MATERIAL REQUIREMENTS OF THE INVITATION WOULD NECESSARILY BE REJECTED AS NONRESPONSIVE. HOWEVER, THE RULES APPLICABLE TO NEGOTIATED PROCUREMENTS ARE BY DESIGN MORE FLEXIBLE AND CONTEMPLATE NEGOTIATIONS, WITH CERTAIN EXCEPTIONS NOT RELEVANT HERE. WE BELIEVE THE AGENCIES SHOULD HAVE MADE FURTHER EFFORTS TO DETERMINE WHETHER YOUR MOTOR WAS TECHNICALLY ACCEPTABLE, ESPECIALLY SINCE NORTHFIELD'S UNIT PRICE WAS SUBSTANTIALLY HIGHER THAN YOURS.

IT ALSO APPEARS THAT YOUR OFFER WAS REJECTED NOT ONLY BECAUSE YOUR OUTLINE DRAWING WAS INADEQUATE FOR EVALUATION BUT ALSO BECAUSE THE AMPEX OUTLINE DRAWING -- WHICH FORMED THE SPECIFICATION IN THIS RFP -- WAS ALSO INADEQUATE. OFFERORS WERE THUS REQUIRED TO SUPPLY PRODUCTS IN ACCORDANCE WITH A DRAWING WHICH WAS NOT SUFFICIENT TO PERMIT EVALUATION OF ALTERNATE PRODUCTS THAT MIGHT BE OFFERED. WE HAVE CONCLUDED THAT THE CONTINUED USE OF SUCH A DESCRIPTION OF THE ITEMS BEING PROCURED WOULD NOT BE PROPER IN A SEPARATE LETTER OF TODAY TO THE SECRETARY OF THE NAVY, AND WE ARE ALSO RECOMMENDING TO THE DIRECTOR, DEFENSE SUPPLY AGENCY, THAT IN FUTURE NEGOTIATED PROCUREMENTS MORE CONSIDERATION BE GIVEN TO OBTAINING ADDITIONAL INFORMATION FROM THE LOW OFFERORS THAT MAY BE NECESSARY IN ORDER TO MAKE A PROPER EVALUATION OF THEIR PROPOSALS PRIOR TO REJECTION OF THEIR PROPOSALS.

WHILE WE BELIEVE THAT THE COMPETITIVE ASPECTS OF THIS PROCUREMENT COULD HAVE BEEN IMPROVED, WE CANNOT CONCLUDE THAT THE REJECTION OF YOUR PROPOSAL WAS LEGALLY IMPROPER. ALTHOUGH CLAUSE 2.102 OF THE RFP SPECIFICALLY REQUIRED EACH OFFEROR TO INDICATE THE MANUFACTURING SITUATION APPLICABLE TO ITS PRODUCT, YOU DID NOT DESIGNATE THE APPROPRIATE SITUATION AND FAILED TO SUPPLY ADEQUATE SUPPORTING DATA EVEN THOUGH OFFERORS WERE WARNED IN THAT CLAUSE THAT SUCH A FAILURE MIGHT PRECLUDE CONSIDERATION OF PROPOSALS.