B-170503, OCT. 8, 1970

B-170503, OCT. 8, 1970

BID PROTEST - PROPRIETY RIGHTS DENIAL OF PROTEST OF PETTIBONE MULLIKEN CORP., AGAINST THE NEGOTIATED AWARD OF CONTRACT FOR RADIATORS TO LIFT PARTS, INC., LOW BIDDER, BY THE DEFENSE CONSTRUCTION SUPPLY CENTER, COLUMBUS, OHIO, ON BASIS THAT PROTESTANT HAD EXCLUSIVE RIGHT TO DRAWINGS. WHERE PRIOR TO ISSUANCE OF REQUEST FOR PROPOSALS A PART OTHER THAN ONE MANUFACTURED BY PROTESTANT WHO DESIGNED THE PART WAS FOUND TO MEET THE NEEDS OF THE AGENCY AND TO HAVE A SATISFACTORY PERFORMANCE RECORD NOTWITHSTANDING THAT DRAWINGS WERE NOT FURNISHED BY PROTESTANT, A DETERMINATION THAT A COMPETITIVE PROCUREMENT IS NOT FEASIBLE CANNOT BE UPHELD.

TO PETTIBONE MULLIKEN CORPORATION:

WE REFER TO YOUR LETTER OF JULY 30, 1970, PROTESTING AWARD TO ANOTHER COMPANY UNDER RFP NO. DSA 700-70-R-5506, ISSUED BY THE DEFENSE CONSTRUCTION SUPPLY CENTER, COLUMBUS, OHIO.

THE PROCUREMENT WAS NEGOTIATED UNDER AUTHORITY CONTAINED IN 10 U.S.C. 2304(A)(10) RELATING TO PURCHASES FOR WHICH IT IS IMPRACTICABLE TO OBTAIN COMPETITION. THE REQUEST FOR PROPOSALS WAS ISSUED ON MAY 14, 1970, FOR A TOTAL QUANTITY OF 74 RADIATORS, FSN 3930-00-200-8094. THREE MANUFACTURERS' PARTS NUMBERS WERE ACCEPTABLE FOR THE FEDERAL STOCK NUMBER IN QUESTION, AND WERE LISTED ON PAGE 3 OF THE SOLICITATION AS FOLLOWS:

PETTIBONE-MULLIKEN CORP. - P/N 1A224-22

GENERAL RADIATOR INC. - P/N R1666

LIFT PARTS MFG. INC. - P/N OKFR1666

TWO PROPOSALS WERE RECEIVED, ONE FROM LIFT PARTS OFFERING ITS PART FOR A UNIT PRICE OF $141.79 EACH AND ONE FROM YOUR COMPANY OFFERING YOUR PART FOR A UNIT PRICE OF $197.10. ON JUNE 30, 1970, THE CONTRACTING AGENCY MADE AWARD TO LIFT PARTS FOR THE TOTAL QUANTITY OF 74 RADIATORS AT THE OFFERED PRICE OF $141.79 EACH.

ON JULY 8, U970, YOU PROTESTED TO THE CONTRACTING AGENCY AGAINST AWARD TO LIFT PARTS AND REQUESTED THE AWARD BE SET ASIDE AND A CONTRACT AWARDED TO YOUR COMPANY. AS A BASIS FOR YOUR PROTEST YOU STATED THAT YOUR COMPANY AND GENERAL RADIATOR DESIGNED THE PART IN QUESTION IN 1962 TO MEET THE REQUIREMENTS OF SPECIFICATION MIL-T-40632, THAT YOUR COMPANY HAD SUCCESSFULLY COMPLETED THE ENDURANCE TEST REQUIRED BY SUCH SPECIFICATION WHILE LIFT PARTS HAD NOT, THAT YOUR AGREEMENT WITH GENERAL RADIATOR IS THAT THEY WILL MAKE THE PART EXCLUSIVELY FOR YOUR COMPANY AND THAT LIFT PARTS DOES NOT HAVE THE RIGHT TO YOUR DRAWINGS.

THE CONTRACTING OFFICER DENIED YOUR PROTEST IN HIS LETTER OF JULY 23, 1970, AND POINTED OUT THAT MIL-T-40632, AND THE ENDURANCE TEST SPECIFIED THEREIN, IS NOT APPLICABLE TO THIS PROCUREMENT. THE CONTRACTING OFFICER FURTHER STATED THAT THE DEFENSE GENERAL SUPPLY CENTER WHICH FORMERLY HANDLED PROCUREMENT OF THIS ITEM HAD DETERMINED THE LIFT PARTS NUMBER TO BE SATISFACTORY FOR FSN 3930-200-8094 AND HAD PREVIOUSLY PURCHASED A SUBSTANTIAL NUMBER OF THESE RADIATORS FROM LIFT PARTS WITH NO REPORTS OF UNSATISFACTORY PERFORMANCE.

IN YOUR LETTER OF PROTEST TO OUR OFFICE ON JULY 30, 1970, YOU EXPRESSED YOUR BELIEF THAT THESE PARTS ARE PROPRIETARY ITEMS, THAT NO OTHER SUPPLIER CAN FURNISH RADIATORS EQUAL TO YOUR ORIGINAL EQUIPMENT AND THEREFORE, REPLACEMENTS SHOULD BE PURCHASED ONLY FROM YOUR COMPANY. YOU ALSO STATED THAT IT APPEARED TO YOU ONE STANDARD WAS USED TO QUALIFY YOUR PARTS AND ANOTHER TO QUALIFY LIFT PARTS ITEMS, A PROCEDURE UNFAIR TO YOUR COMPANY. YOU ASKED THAT THE AWARD TO LIFT PARTS BE SET ASIDE AND AWARD BE MADE TO YOUR COMPANY.

THE RECORD INDICATES THAT PRIOR TO 1968, INVITATIONS FOR PROCUREMENT OF THIS RADIATOR LISTED ONLY THE GENERAL RADIATOR PART NUMBER AND YOUR PART NUMBER AS ACCEPTABLE FOR FSN 3930-200-8094. IN 1968, HOWEVER, LIFT PARTS RESPONDED TO RFP DSA 400-68-R65154 WITH AN OFFER TO FURNISH ITS OWN PART NUMBER AT A UNIT PRICE OF $179.80 WHILE YOUR OFFER UNDER THE SAME REQUEST WAS FOR A UNIT PRICE OF $217.48. ON MAY 24, 1968, THE DIRECTOR OF TECHNICAL OPERATIONS OF DEFENSE GENERAL SUPPLY CENTER FOUND LIFT PARTS' OFFER TO BE ACCEPTABLE AND A CONTRACT WAS SUBSEQUENTLY AWARDED TO LIFT PARTS FOR 120 RADIATORS. THEREAFTER, LIFT PARTS' RADIATOR WAS FOUND TO BE ACCEPTABLE IN THREE OTHER PROCUREMENTS. THERE IS NO EVIDENCE THAT ANY RADIATORS PURCHASED FROM LIFT PARTS WERE DEFICIENT. IN EACH OF THE PROCUREMENTS, AWARDS TO LIFT PARTS RESULTED IN SUBSTANTIAL SAVINGS TO THE GOVERNMENT.

UNDER THE PROVISIONS OF 10 U.S.C. 2304(G), THE DEFENSE CONSTRUCTION SUPPLY AGENCY IS CHARGED WITH THE RESPONSIBILITY, IN A PROCUREMENT OF THIS TYPE, OF SOLICITING PROPOSALS FROM THE MAXIMUM NUMBER OF QUALIFIED SOURCES CONSISTENT WITH THE NATURE AND REQUIREMENTS OF THE SUPPLIES TO BE PROCURED. ASPR 3-101 REPEATS THE LANGUAGE OF THE STATUTE IN THIS REGARD AND ASPR 3-102(C) SETS FORTH GENERAL REQUIREMENTS FOR NEGOTIATION AS FOLLOWS:

"(C) NEGOTIATED PROCUREMENTS SHALL BE ON A COMPETITIVE BASIS TO THE MAXIMUM PRACTICAL EXTENT. WHEN A PROPOSED PROCUREMENT APPEARS TO BE NECESSARILY NONCOMPETITIVE, THE PURCHASING ACTIVITY IS RESPONSIBLE NOT ONLY FOR ASSURING THAT COMPETITIVE PROCUREMENT IS NOT FEASIBLE, BUT ALSO FOR ACTING WHENEVER POSSIBLE TO AVOID THE NEED FOR SUBSEQUENT NONCOMPETITIVE PROCUREMENTS. THIS ACTION SHOULD INCLUDE BOTH EXAMINATION OF THE REASONS FOR THE PROCUREMENT BEING NONCOMPETITIVE AND STEPS TO FOSTER COMPETITIVE CONDITIONS FOR SUBSEQUENT PROCUREMENTS, PARTICULARLY AS TO THE AVAILABILITY OF COMPLETE AND ACCURATE DATA, REASONABLENESS OF DELIVERY REQUIREMENTS (1-305.2(A)), AND POSSIBLE BREAKOUT OF COMPONENTS FOR COMPETITIVE PROCUREMENT. EXCEPT FOR PROCUREMENT OF ELECTRIC POWER OR ENERGY, GAS (NATURAL OR MANUFACTURED), WATER, OR OTHER UTILITY SERVICES, AND PROCUREMENT OF EDUCATIONAL SERVICES FROM NONPROFIT INSTITUTIONS, CONTRACTS IN EXCESS OF $10,000 SHALL NOT BE NEGOTIATED ON A NONCOMPETITIVE BASIS WITHOUT PRIOR REVIEW AT A LEVEL HIGHER THAN THE CONTRACTING OFFICER TO ASSURE COMPLIANCE WITH THIS SUBPARAGRAPH."

THE FACTS PRESENTED OF RECORD INDICATE THAT PRIOR TO ISSUANCE OF THE RFP TO WHICH YOUR PROTEST RELATES, LIFT PARTS FURNISHED TO THE GOVERNMENT, UNDER NEGOTIATED PROCUREMENTS CONTAINING ONLY YOUR PART NUMBER AND THAT OF GENERAL RADIATOR, A SUBSTANTIAL NUMBER OF RADIATORS WHICH HAVE PERFORMED SATISFACTORILY DESPITE THE ABSENCE OF DRAWINGS OR SPECIFICATIONS FURNISHED BY YOU. LIFT PARTS' PRICES WERE SUBSTANTIALLY LOWER THAN YOUR PRICES AND RESULTED IN APPRECIABLE SAVINGS TO THE GOVERNMENT. IN OUR OPINION, SUCH FACTS PRECLUDE A FINDING THAT COMPETITIVE PROCUREMENT IS NOT FEASIBLE, WHICH WOULD HAVE BEEN REQUIRED UNDER ASPR 3-102(C) TO JUSTIFY NONCOMPETITIVE PROCUREMENT FROM YOU.

WE HAVE CONSIDERED THE QUESTION OF DEVELOPING COMPETITION FOR PROCUREMENT OF REPLACEMENT PARTS UNDER APPLICABLE STATUTORY AND REGULATORY REQUIREMENTS, AND WE HAVE HELD THAT PROCUREMENT PROCEDURES WHICH FOSTER COMPETITION IN NEGOTIATIONS ARE IN THE BEST INTEREST OF THE GOVERNMENT AND IN ACCORD WITH THE INTENT OF SUCH STATUTES AND REGULATIONS. SUCH PROCEDURES DO NOT FORM THE BASIS FOR A SUCCESSFUL PROTEST ON THE PART OF A FORMER SOLE SOURCE SUPPLIER. B-162682, DECEMBER 26, 1967.

WITH REGARD TO YOUR CONTENTION THAT DIFFERENT STANDARDS WERE USED FOR YOUR EQUIPMENT AND FOR THAT OF LIFT PARTS, CLAUSE 2.102 ON PAGE 9 OF THE SOLICITATION REQUIRES ONLY THAT "PRODUCTS OFFERED MUST EITHER BE IDENTICAL OR FUNCTIONALLY, PHYSICALLY, MECHANICALLY AND ELECTRICALLY INTERCHANGEABLE WITH THE PRODUCTS CITED IN EACH CLIN DESCRIPTION OF THIS SOLICITATION." SINCE BOTH YOUR COMPANY AND LIFT PARTS OFFERED PRODUCTS IDENTICAL TO PRODUCTS DESCRIBED AS ACCEPTABLE, AND SINCE MIL-T 40632 IS NOT APPLICABLE TO THIS PROCUREMENT, IT IS OUR OPINION THAT YOU WERE BOTH BOUND TO THE SAME STANDARD.

FOR THE REASONS STATED WE ARE UNABLE TO CONCLUDE THAT THE PROCEDURES FOLLOWED BY THE PROCURING AGENCY WERE NOT IN THE BEST INTEREST OF THE GOVERNMENT, OR WERE NOT IN ACCORD WITH THE INTENT OF THE PROCUREMENT STATUTE AND REGULATIONS THAT THE MAXIMUM PRACTICABLE COMPETITION BE OBTAINED IN NEGOTIATED PROCUREMENTS. ACCORDINGLY, YOUR PROTEST MUST BE DENIED.