B-168071, APR 2, 1971

B-168071: Apr 2, 1971

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SEVERAL DEFICIENCIES IN THIS PROCUREMENT ARE NOTED. THE REQUIREMENT FOR A BID SAMPLE WAS CONTRARY TO REGULATION WHERE THE ITEM WAS COVERED BY COMPLETE AND DETAILED TECHNICAL SPECIFICATIONS. THE PROTESTANT WAS EXCLUDED FROM NEGOTIATIONS ON THE BASIS OF THE "BID SAMPLE" FAILURE WITHOUT IDENTIFYING THE CAUSES THEREOF OR WITHOUT CONSIDERATION OF "COMPETITIVE RANGE". IT APPEARS THE RESTRICTIVE SPECIFICATIONS SO CLOSELY PARALLEL HEWLETT-PACKARD PRODUCTION CAPABILITIES THAT THE RFP SHOULD HAVE BEEN ISSUED ON A BRAND NAME OR EQUAL BASIS. SECRETARY: FURTHER REFERENCE IS MADE TO THE PROTEST OF WINSLOW TELE-TRONICS. WHICH WAS THE SUBJECT OF A REPORT DATED OCTOBER 14. THE SUBJECT SOLICITATION WAS ISSUED ON MAY 14.

B-168071, APR 2, 1971

BID PROTEST - RESTRICTIVE SPECIFICATIONS DECISION CONCERNING THE PROTEST OF WINSLOW TELE-TRONICS, INC., AGAINST THE AWARD OF A CONTRACT TO HEWLETT-PACKARD COMPANY FOR 400 UHF/VHF GENERATORS UNDER AN RFP ISSUED BY THE ARMY ELECTRONICS COMMAND. ALTHOUGH PERFORMANCE OF THE SUBJECT CONTRACT HAS BEEN COMPLETED THUS PRECLUDING REMEDIAL ACTION, SEVERAL DEFICIENCIES IN THIS PROCUREMENT ARE NOTED. THE RECORD DOES NOT JUSTIFY THE REQUIREMENT THAT ITEMS COMPLY WITH CERTAIN TEST PROCEDURES THUS EXCLUDING ITEMS WHICH ADMITTEDLY MET THE GOVERNMENT'S MINIMUM REQUIREMENTS; THE REQUIREMENT FOR A BID SAMPLE WAS CONTRARY TO REGULATION WHERE THE ITEM WAS COVERED BY COMPLETE AND DETAILED TECHNICAL SPECIFICATIONS; THE PROTESTANT WAS EXCLUDED FROM NEGOTIATIONS ON THE BASIS OF THE "BID SAMPLE" FAILURE WITHOUT IDENTIFYING THE CAUSES THEREOF OR WITHOUT CONSIDERATION OF "COMPETITIVE RANGE"; FINALLY, IT APPEARS THE RESTRICTIVE SPECIFICATIONS SO CLOSELY PARALLEL HEWLETT-PACKARD PRODUCTION CAPABILITIES THAT THE RFP SHOULD HAVE BEEN ISSUED ON A BRAND NAME OR EQUAL BASIS. STEPS SHOULD BE TAKEN TO PRECLUDE A RECURRENCE OF THESE DEFICIENCIES.

TO MR. SECRETARY:

FURTHER REFERENCE IS MADE TO THE PROTEST OF WINSLOW TELE-TRONICS, INCORPORATED, AGAINST THE AWARD OF A CONTRACT TO HEWLETT-PACKARD COMPANY BY THE UNITED STATES ARMY ELECTRONICS COMMAND PURSUANT TO SOLICITATION NO. DAAB05-69-R-1200, WHICH WAS THE SUBJECT OF A REPORT DATED OCTOBER 14, 1970, FROM THE ASSISTANT GENERAL COUNSEL, UNITED STATES ARMY MATERIEL COMMAND (AMC), AND PRIOR CORRESPONDENCE FROM AMC.

THE SUBJECT SOLICITATION WAS ISSUED ON MAY 14, 1969, AS A NEGOTIATED PROCUREMENT PURSUANT TO THE AUTHORITY OF 10 U.S.C. 2304(A)(2), AND ARMED SERVICES PROCUREMENT REGULATION (ASPR)3-202.2(VI). THE RFP CALLED FOR OFFERS ON A QUANTITY OF 400 UHF/VHF (SNR) GENERATORS IN ACCORDANCE WITH EXHIBIT TE-101, TECHNICAL REQUIREMENTS AND TEST PROCEDURE, AND COMPONENT PARTS AND ANCILLARY ITEMS. IT IS REPORTED THAT THE PROCUREMENT WAS TO BE A ONE-TIME BUY TO REPLACE SHORTAGES OF THE AN/USM-44A GENERATOR DEVELOPED BY AND NORMALLY PROCURED BY THE NAVY. IN THIS CONNECTION, THE CONTRACTING OFFICER REPORTS THAT ALTHOUGH DRAWINGS AND SPECIFICATIONS WERE AVAILABLE, PRODUCTION LEAD TIME OF 22-36 MONTHS WOULD HAVE BEEN REQUIRED TO PROCURE THE GENERATORS THROUGH THE NAVY. NOTE 1 OF SECTION B OF THE RFP REQUIRED THE SUBMISSION OF A "BID SAMPLE" PRIOR TO THE DATE SET FOR OPENING, AND THE BID SAMPLE PROVISION PRESCRIBED BY ASPR 2-202.4(E) WAS INCLUDED IN SECTION H OF THE RFP. THE RFP ALSO REQUIRED A FIRST ARTICLE APPROVAL TEST REPORT WITHIN 120 DAYS AFTER AWARD.

SEVEN FIRMS WHICH REPORTEDLY PRODUCE "SIMILAR EQUIPMENT" WERE SOLICITED. THE PROCUREMENT WAS ALSO SYNOPSIZED IN THE COMMERCE BUSINESS DAILY AND 33 ADDITIONAL FIRMS REQUESTED AND RECEIVED COPIES OF THE RFP. THE FOLLOWING PROPOSALS WERE RECEIVED BY THE CLOSING DATE OF JUNE 13, 1969:

RADALAB $479,500

WINSLOW $527,160

HEWLETT-PACKARD $691,974 RADALAB'S PROPOSAL WAS REJECTED AS NONRESPONSIVE FOR FAILURE TO SUBMIT A BID SAMPLE. WINSLOW'S BID SAMPLE WAS SUBJECTED TO EVALUATION AND TESTING AND FOUND NONRESPONSIVE TO THE TECHNICAL SPECIFICATIONS. HEWLETT-PACKARD'S SAMPLE MET ALL REQUIREMENTS. NEGOTIATIONS WERE CONDUCTED ONLY WITH HEWLETT-PACKARD AND A CONTRACT WAS AWARDED TO THAT FIRM ON SEPTEMBER 30, 1969, IN THE AMOUNT OF $686,762. DELIVERIES UNDER THE CONTRACT WERE COMPLETED ON JULY 13, 1970.

WINSLOW TAKES ISSUE WITH THE CONTRACTING OFFICER'S STATEMENT THAT A LEAD TIME OF 22-36 MONTHS WOULD HAVE BEEN NECESSARY TO PROCURE THIS ITEM THROUGH THE NAVY. IN THIS REGARD, WINSLOW STATES THAT IT HAS BEEN MANUFACTURING AND SUPPLYING THE AN/USM-44A GENERATOR TO THE NAVY SINCE 1963, AND IS CAPABLE OF PRODUCING A LARGE QUANTITY WITHIN 90 DAYS. WINSLOW ALSO POINTS OUT THAT IF THE PROCUREMENT WAS TO REPLACE SHORTAGES OF THE AN/USM-44A GENERATOR, AS REPORTED BY THE CONTRACTING OFFICER, THE SPECIFICATIONS DID NOT REPRESENT THE MINIMUM ESSENTIAL CHARACTERISTICS THAT COULD BE MET BY AVAILABLE COMMERCIAL ITEMS PRODUCED BY IT AND SEVERAL OTHER COMPANIES. FURTHERMORE, IT IS CONTENDED THAT THE SPECIFICATIONS WERE RESTRICTIVE IN THAT THEY PARALLELED SPECIFICATIONS KNOWN TO BE WITHIN THE PRODUCTION CAPABILITY OF HEWLETT-PACKARD. WINSLOW ALSO CONTENDS THAT IT WAS IMPOSSIBLE FOR ANY COMPANY BUT HEWLETT-PACKARD TO SUBMIT A CONFORMING SAMPLE WITHIN THE 30 DAYS PERMITTED. IN THIS CONNECTION, IT POINTS OUT THAT ALTHOUGH 40 COMPANIES RECEIVED THE RFP, ONLY 3 SUBMITTED PROPOSALS AND ONLY 2 OF THOSE SUBMITTED SAMPLES. OF THE TWO SUBMITTING SAMPLES, ONE WAS HEWLETT-PACKARD AND THE OTHER WAS WINSLOW, WHOSE SAMPLE WAS FOUND NOT TO CONFORM.

IN OUR OPINION THERE IS SUBSTANTIAL MERIT IN WINSLOW'S CONTENTION THAT THE SPECIFICATIONS WERE UNDULY RESTRICTIVE OF COMPETITION. THE CONTRACTING OFFICER ADMITS THAT THIS WAS A ONE-TIME PROCUREMENT TO REPLACE SHORTAGES OF THE AN/USM-44A GENERATOR NORMALLY PROCURED THROUGH THE NAVY. ACCORDING TO THE CONTRACTING OFFICER, THE URGENCY OF THE PROCUREMENT WOULD NOT PERMIT THE DELAY NECESSITATED BY A PRODUCTION LEAD TIME OF 22 TO 36 MONTHS TO PROCURE THE ITEM THROUGH THE NAVY. THIS IS THE ONLY REASON GIVEN FOR NOT PROCURING THE GENERATORS AS IN THE PAST. IN THESE CIRCUMSTANCES, WE MUST ASSUME THAT THE AN/USM-44A GENERATOR ADEQUATELY MEETS THE MINIMUM NEEDS OF THE GOVERNMENT. FROM THE RECORD BEFORE US IT APPEARS THAT THERE ARE SEVERAL FIRMS IN ADDITION TO WINSLOW THAT COULD HAVE MET THE AN/USM-44A SPECIFICATION REQUIREMENTS WITHIN THE DELIVERY CONSTRAINTS OF THE PROCUREMENT, AT LEAST THE RFP SHOULD HAVE BEEN WORDED TO PERMIT OFFERS ON THAT ITEM WITHIN THE DELIVERY REQUIREMENTS. THEREFORE, THERE APPEARS TO BE NO JUSTIFICATION FOR REQUIRING COMPLIANCE WITH THE TE-101 SPECIFICATIONS AND EXCLUDING PROPOSALS ON AN ITEM WHICH ADMITTEDLY MET THE GOVERNMENT'S MINIMUM REQUIREMENTS.

EVEN IF THERE WAS JUSTIFICATION FOR RESTRICTING COMPETITION TO THE TE 101 SPECIFICATION, WHICH IS NOT APPARENT FROM THE FILE, THERE WERE OTHER DEFICIENCIES IN THE PROCUREMENT. THE REQUIREMENT FOR A "BID SAMPLE" WAS CONTRARY TO REGULATION AND THE CONCEPT OF NEGOTIATION. UNDER ASPR 2-202.4 BID SAMPLES ARE TO BE REQUIRED ONLY WHERE THERE ARE CERTAIN CHARACTERISTICS OF THE PRODUCT WHICH CANNOT BE DESCRIBED ADEQUATELY IN SPECIFICATIONS OR A PURCHASE DESCRIPTION. WHERE THE ITEM TO BE PROCURED IS COVERED BY COMPLETE AND DETAILED TECHNICAL SPECIFICATIONS, AS HERE, NO CLEAR REASON APPEARS WHY AN EXPERIENCED MANUFACTURER IN THE PARTICULAR FIELD INVOLVED COULD NOT PRODUCE A SATISFACTORY ITEM THEREFROM. FURTHERMORE, THE RFP INCLUDED A FIRST ARTICLE APPROVAL REQUIREMENT. SINCE THE FIRST ARTICLE TESTING DETERMINES CONFORMITY OF THE ITEM WITH THE SPECIFICATIONS, THERE WOULD BE A DUPLICATION OF TESTING WHICH APPEARS TO SERVE NO USEFUL PURPOSE.

UNDER 10 U.S.C. 2304(G), AS IMPLEMENTED BY ASPR 3-805.1, FOR APPLICATION IN NEGOTIATED PROCUREMENTS IN EXCESS OF $2,500 WITH CERTAIN EXCEPTIONS NOT APPLICABLE HERE, ORAL OR WRITTEN DISCUSSIONS ARE REQUIRED WITH ALL RESPONSIBLE OFFERORS WITHIN A COMPETITIVE RANGE. WE RECOGNIZE THAT THE DETERMINATION AS TO WHICH FIRMS ARE WITHIN A COMPETITIVE RANGE IS A MATTER OF ADMINISTRATIVE DISCRETION, NOT TO BE QUESTIONED BY OUR OFFICE UNLESS CLEARLY ARBITRARY. HOWEVER, IN THE INSTANT CASE IT APPEARS THAT WINSLOW WAS AUTOMATICALLY EXCLUDED FROM NEGOTIATIONS ON THE BASIS OF THE "BID SAMPLE" FAILURE WITHOUT IDENTIFYING THE CAUSES THEREOF OR WITHOUT CONSIDERATION OF "COMPETITIVE RANGE." WE BELIEVE SUCH ACTION IS INCONSISTENT WITH THE STATUTE AND REGULATION. 47 COMP. GEN. 29, 53 (1967).

WINSLOW HAS MADE ANOTHER POINT WHICH WE BELIEVE RAISES SERIOUS DOUBT AS TO THE PROPRIETY OF THE PROCUREMENT. WINSLOW CONTENDS THAT TE-101 SO CLOSELY PARALLELED SPECIFICATIONS KNOWN TO BE WITHIN THE PRODUCTION CAPABILITIES OF HEWLETT-PACKARD THAT IN ORDER TO MEET THE REQUIREMENTS OF TE-101, IT WOULD HAVE BEEN NECESSARY TO SUBMIT A MECHANICAL AND ELECTRICAL DUPLICATE OF HEWLETT-PACKARD'S GENERATOR. ALTHOUGH OUR OFFICE IS NOT IN A POSITION TO JUDGE THE VALIDITY OF THIS CONTENTION, YOUR DEPARTMENT HAS NOT DENIED IT. IF THE CONTENTION IS CORRECT, THE PURCHASE DESCRIPTION SHOULD, AT THE LEAST, HAVE BEEN ISSUED ON A BRAND NAME OR EQUAL BASIS, LISTING THE SALIENT CHARACTERISTICS OF THE NAMED BRAND.

SINCE PERFORMANCE OF THE SUBJECT CONTRACT HAS BEEN COMPLETED, REMEDIAL ACTION IS NOT NOW POSSIBLE. HOWEVER, THE DEFICIENCIES IN THIS PROCUREMENT SHOULD BE BROUGHT TO THE ATTENTION OF THE RESPONSIBLE PERSONNEL AND STEPS TAKEN TO PRECLUDE A RECURRENCE.