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B-168725, MAY 12, 1971

B-168725 May 12, 1971
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IN RECONSIDERING THE PROTEST BY OCEAN ELECTRIC CORPORATION IT APPEARS THAT NO MANUFACTURER OTHER THAN WESTINGHOUSE ELECTRIC CORPORATION IS PRESENTLY CAPABLE OF SUPPLYING THE REQUIRED EQUIPMENT AND ALTHOUGH WESTINGHOUSE ADVISED THE CONTRACTING OFFICER TO THE CONTRARY. IT APPEARS THAT OFFERORS HAVE ENCOUNTERED DIFFICULTY IN OBTAINING INFORMATION FOR OFFER FORMULATION. WERE NOT SUBJECT TO QUESTION BY OUR OFFICE. WERE "PROPRIETARY. THE BASIS FOR THIS CONTENTION WAS THAT THE SPECIFICATION REQUIREMENT FOR STIPULATED EXPERIENCE. ALTHOUGH THE NEW SUPERVISORY CONTROL EQUIPMENT IS REPORTEDLY A RELATIVELY MINOR PORTION OF THE NEW EQUIPMENT REQUIRED. IT WAS THE POSITION OF OCEAN ELECTRIC THAT THE LUMP-SUM PRICE ALLEGEDLY QUOTED BY WESTINGHOUSE.

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B-168725, MAY 12, 1971

BID PROTEST - COMPETITION ADVISING THAT IN FUTURE PROCUREMENTS FOR EQUIPMENT SIMILAR TO OR IDENTICAL WITH MODIFICATION OF SUPERVISORY CONTROL EQUIPMENT AT THE NORFOLK NAVAL SHIPYARD, THE AMOUNT OF COMPETITION TRULY AVAILABLE SHOULD FIRST BE DETERMINED. IN RECONSIDERING THE PROTEST BY OCEAN ELECTRIC CORPORATION IT APPEARS THAT NO MANUFACTURER OTHER THAN WESTINGHOUSE ELECTRIC CORPORATION IS PRESENTLY CAPABLE OF SUPPLYING THE REQUIRED EQUIPMENT AND ALTHOUGH WESTINGHOUSE ADVISED THE CONTRACTING OFFICER TO THE CONTRARY, IT APPEARS THAT OFFERORS HAVE ENCOUNTERED DIFFICULTY IN OBTAINING INFORMATION FOR OFFER FORMULATION. THE ABOVE PROBLEMS SHOULD BE RESOLVED PRIOR TO INITIATING NEW PROCUREMENTS.

TO MR. SECRETARY:

BY LETTER DATED AUGUST 27, 1970, FILE 0211C/RP:KAM, THE NAVAL FACILITIES ENGINEERING COMMAND FURNISHED US WITH A REPORT ON THE REQUEST OF THE OCEAN ELECTRIC CORPORATION FOR RECONSIDERATION OF OUR DECISION OF FEBRUARY 27, 1970, B-168725, TO THE EFFECT THAT SPECIFICATIONS UNDER CONTRACT NO. N62470-69-C-0713, ISSUED BY THE NORFOLK NAVAL SHIPYARD, WERE NOT SUBJECT TO QUESTION BY OUR OFFICE.

THE ORIGINAL PROTEST CONCERNED ALLEGATIONS BY OCEAN ELECTRIC THAT SPECIFICATIONS FOR MODIFICATION OF EXISTING SUPERVISORY CONTROL EQUIPMENT, INCLUDING THE INSTALLATION OF NEW SUPERVISORY CONTROL EQUIPMENT TO BE COMPATIBLE WITH EXISTING SUPERVISORY CONTROL EQUIPMENT, ORIGINALLY MANUFACTURED BY WESTINGHOUSE ELECTRIC CORPORATION, WERE "PROPRIETARY," I.E., RESTRICTIVE, TO WESTINGHOUSE. THE BASIS FOR THIS CONTENTION WAS THAT THE SPECIFICATION REQUIREMENT FOR STIPULATED EXPERIENCE, COUPLED WITH A REQUIREMENT THAT THE NEW SUPERVISORY CONTROL EQUIPMENT BE INSTALLED IN ACCORDANCE WITH THE ORIGINAL MANUFACTURER'S DRAWINGS AND THAT THE NEW EQUIPMENT BE COMPATIBLE WITH EXISTING EQUIPMENT, EFFECTIVELY PRECLUDED FIRMS OTHER THAN WESTINGHOUSE FROM SUPPLYING THAT EQUIPMENT.

THE PROTEST FURTHER COMPLAINED THAT WESTINGHOUSE REFUSED TO FURNISH PRIME OFFERORS WITH PRICE QUOTATIONS FOR THE NEW SUPERVISORY CONTROL EQUIPMENT SEPARATE FROM THE OTHER NEW EQUIPMENT REQUIRED BY THE CONTRACT. ALTHOUGH THE NEW SUPERVISORY CONTROL EQUIPMENT IS REPORTEDLY A RELATIVELY MINOR PORTION OF THE NEW EQUIPMENT REQUIRED, IT WAS THE POSITION OF OCEAN ELECTRIC THAT THE LUMP-SUM PRICE ALLEGEDLY QUOTED BY WESTINGHOUSE, COUPLED WITH THE NAVY REFUSAL TO FURNISH WESTINGHOUSE SHOP DRAWINGS CONCERNING EXISTING EQUIPMENT, MADE FORMULATION OF PROPER PRIME OFFEROR ESTIMATES OF MATERIAL AND LABOR FOR THIS PHASE OF THE CONTRACT DIFFICULT IF NOT IMPOSSIBLE. OCEAN ELECTRIC ALSO COMPLAINED THAT WESTINGHOUSE ENGINEERING ASSISTANCE REQUIRED BY THE CONTRACT FOR INSTALLATION OF THE NEW SUPERVISORY CONTROL EQUIPMENT WAS IMPOSSIBLE TO ESTIMATE.

THE REPORT FURNISHED OUR OFFICE BY THE NAVAL FACILITIES ENGINEERING COMMAND ON THE ORIGINAL PROTEST STATED THAT WESTINGHOUSE WAS NOT THE ONLY ACCEPTABLE EQUIPMENT MANUFACTURER, AS EVIDENCED BY QUOTATIONS FROM THE GENERAL ELECTRIC COMPANY TO PRIME OFFERORS FOR THE SUPPLY OF THE REQUIRED EQUIPMENT; THAT WESTINGHOUSE HAD ADVISED THAT IT STOOD READY TO FURNISH EQUIPMENT COST BREAKDOWNS UPON REQUEST (NO REQUEST HAVING BEEN MADE BY ANY PRIME OFFERORS); AND THAT THE FURNISHING OF WESTINGHOUSE SHOP DRAWINGS WOULD RESTRICT PURCHASE BY PRIME OFFERORS OF NEEDED EQUIPMENT FROM WESTINGHOUSE ONLY. ON THIS BASIS, OUR OFFICE CONCLUDED IN THE FEBRUARY 27, 1970, DECISION THAT "SUFFICIENT JUSTIFICATION FOR THE USE OF THE SPECIFICATIONS AS PRESENTLY DRAFTED" HAD BEEN PROVIDED.

OCEAN ELECTRIC CONTESTS OUR CONCLUSION BY ITERATING ITS CONTENTION THAT WESTINGHOUSE, AS A MATTER OF COURSE, REFUSES TO PROVIDE COST BREAKDOWNS BEFORE THE SUBMISSION OF OFFERS WHICH WOULD ENABLE PRIME OFFERORS TO USE COMPONENT PARTS, OTHER THAN THOSE REQUIRED FOR SUPERVISORY CONTROL EQUIPMENT, OF MANUFACTURERS OTHER THAN WESTINGHOUSE IN FORMULATING THEIR OFFERS. WHILE IT IS CONCEDED BY OCEAN ELECTRIC THAT WESTINGHOUSE WILL CONSENT TO SUPPLY SUPERVISORY CONTROL EQUIPMENT SEPARATE FROM OTHER COMPONENTS AFTER THE AWARD OF A PRIME CONTRACT BASED ON THE USE OF OTHER MANUFACTURERS' EQUIPMENT, THE POSITION OF OCEAN ELECTRIC IS THAT WITHOUT KNOWLEDGE AT THE TIME OF PREPARATION OF OFFERS AS TO WHAT WESTINGHOUSE WILL LATER CHARGE FOR ITS SUPERVISORY CONTROL EQUIPMENT AND FOR ENGINEERING LABOR REQUIRED FOR ITS INSTALLATION, A PRIME OFFEROR IS AT A LOSS TO PROPERLY FORMULATE ITS OFFER.

FOR EXAMPLE, OCEAN ELECTRIC POINTS OUT THAT, IN THE INSTANT PROCUREMENT, WHILE WESTINGHOUSE INFORMED THE NAVY THAT THE REQUIRED SUPERVISORY CONTROL EQUIPMENT WAS WORTH APPROXIMATELY $10,000, AFTER AWARD IT WAS ABLE TO NEGOTIATE A PRICE OF $4,872 WITH WESTINGHOUSE FOR THAT EQUIPMENT. FURTHER, OCEAN ELECTRIC HAS INDICATED THAT THERE WAS A PRICE DIFFERENTIAL OF $82,500 BETWEEN THE WESTINGHOUSE LUMP-SUM PRICE AND THE PRICE OF PURCHASING ALL THE EQUIPMENT, EXCEPT THE SUPERVISORY EQUIPMENT, FROM OTHER SOURCES, MAKING IT PROBLEMATICAL FOR THE CONTRACTOR TO ESTIMATE THE AMOUNT TO BE INCLUDED IN THE OFFER FOR THE SUPERVISORY EQUIPMENT.

IN SUBSTANTIATION OF ITS CONTENTIONS, OCEAN ELECTRIC HAS SUBMITTED LETTERS FROM OTHER BIDDERS TO THE EFFECT THAT THE SUBJECT SUPERVISORY CONTROL EQUIPMENT IS ONLY AVAILABLE FROM WESTINGHOUSE AND THAT WESTINGHOUSE WOULD NOT OFFER THAT EQUIPMENT FOR SALE INDEPENDENTLY OF OTHER REQUIRED COMPONENTS AVAILABLE ELSEWHERE. ONE LETTER WAS FROM THE GENERAL ELECTRIC COMPANY, NEWPORT NEWS, VIRGINIA, WHICH STATED AS FOLLOWS:

"THE GENERAL ELECTRIC COMPANY CANNOT MATCH ITS COMPONENTS INTO AN INTEGRATED SYSTEM WITH THE EXISTING SUPERVISORY EQUIPMENT INSTALLED AT THE NORFOLK NAVAL SHIPYARD IN PORTSMOUTH, VIRGINIA WITHOUT CONSIDERABLE RESEARCH, ENGINEERING AND FIELD MODIFICATION WORK.

"WE THEREFORE, DID NOT QUOTE THE ADD-ON SUPERVISORY PORTION OF THIS JOB USING OUR OWN COMPONENTS. HOWEVER, WE DID OBTAIN A VENDOR PRICE FROM WESTINGHOUSE ELECTRIC COMPANY THROUGH OUR NORMAL PURCHASING CHANNELS IN ORDER TO OFFER A PACKAGE."

ADDITIONALLY, OCEAN ELECTRIC POINTS OUT THAT THE NAVY PREVIOUSLY REFERRED TO THE WESTINGHOUSE SUPERVISORY CONTROL EQUIPMENT AS "PROPRIETARY" WHILE THE CURRENT NAVY POSITION IS THAT THE EQUIPMENT IS NOT "PROPRIETARY" AND IS THEREFORE SUBJECT TO COMPETITIVE PROCUREMENT. THE TERM "PROPRIETARY" IS USED BY THE PROTESTANT AND BY THE NORFOLK NAVAL SHIPYARD TO REFER TO THE NEED OF THE GOVERNMENT FOR A SPECIALIZED ITEM OF EQUIPMENT MANUFACTURED BY A SPECIFIC SOURCE RATHER THAN TO REFER TO THE RESTRICTION PLACED BY A MANUFACTURER ON THE DISCLOSURE BY THE GOVERNMENT OF DATA TO SOURCES OUTSIDE THE GOVERNMENT. IN THIS REGARD, OCEAN ELECTRIC HAS SUBMITTED LETTERS FROM THE ACQUISITION DEPARTMENT, ATLANTIC DIVISION, NAVAL FACILITIES ENGINEERING COMMAND, TO OCEAN ELECTRIC, DATED FEBRUARY 21, 1968, AND JANUARY 9, 1969, REFERRING TO THE SYSTEM INVOLVED AS "PROBABLY PROPRIETARY" AND "PROPRIETARY."

FINALLY, OCEAN ELECTRIC STATES THAT WESTINGHOUSE SUPERVISORY CONTROL EQUIPMENT WAS FURNISHED AS GOVERNMENT-FURNISHED EQUIPMENT UNDER CONTRACT NO. NBY-46660, A 1963 CONTRACT FOR SIMILAR MODIFICATION WORK, ALTHOUGH THE INSTALLATION OF THE EQUIPMENT, WITH NECESSARY WESTINGHOUSE ENGINEERING ASSISTANCE, REMAINED THE DUTY OF THE CONTRACTOR.

IN VIEW OF THE STATEMENT OF GENERAL ELECTRIC, QUOTED ABOVE, TO THE EFFECT THAT GENERAL ELECTRIC COULD NOT FURNISH ITS OWN COMPONENTS FOR USE WITH THE WESTINGHOUSE EQUIPMENT, IT APPEARS THAT NO MANUFACTURER OTHER THAN WESTINGHOUSE IS PRESENTLY CAPABLE OF SUPPLYING THE REQUIRED SUPERVISORY CONTROL EQUIPMENT. FURTHER, ALTHOUGH WESTINGHOUSE ADVISED THE CONTRACTING OFFICER TO THE CONTRARY, IT APPEARS THAT OFFERORS, WITH THE POSSIBLE EXCEPTION OF GENERAL ELECTRIC, HAVE ENCOUNTERED DIFFICULTY IN OBTAINING INFORMATION NECESSARY FOR OFFER FORMULATION FROM WESTINGHOUSE.

IN THE CIRCUMSTANCES, WE BELIEVE THAT THE CONTRACTING OFFICE MAY HAVE BEEN UNDER THE ERRONEOUS IMPRESSION THAT THERE IS COMPETITION AVAILABLE ON SUPERVISORY CONTROL EQUIPMENT AND THAT WESTINGHOUSE HAS BEEN FURNISHING OFFERORS ALL THE INFORMATION NECESSARY TO PREPARE AN INTELLIGENT OFFER. WE RECOMMEND, THEREFORE, THAT THIS MATTER, DISCUSSED ABOVE, BE RESOLVED PRIOR TO INITIATING NEW PROCUREMENTS FOR SIMILAR OR IDENTICAL EQUIPMENTS.

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