B-170708, JUN 2, 1971

B-170708: Jun 2, 1971

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

THIS DOES NOT CONFIRM PROTESTANT'S ALLEGATION THAT OTHER COMPANIES WERE NOT MISLED THEREBY. RESOLICITATION WAS PROPER. THAT IT WAS MISLED IN BIDDING. CHRISTOPHER AND PHILLIPS: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED AUGUST 28. FOUR BIDS WERE RECEIVED AND OPENED AS SCHEDULED ON JUNE 2. WAS DEFECTIVE IN THAT SUCH SPECIFICATION DID NOT SPECIFY THE MINIMUM. THAT SUCH ITEMS AS DELIVERED HAVE SATISFACTORILY ATTAINED FLEET OPERATIONAL REQUIREMENTS FOR THESE EQUIPMENTS. "2. THAT THE DRAWINGS INCORPORATED UNDER THE ABOVE REFERENCED SOLICITATION ARE PATENTLY IN CONFLICT WITH THE SPECIFICATIONS AND AS SUCH WOULD REQUIRE EITHER A SUBSTANTIAL REVISION IN ORDER TO ACHIEVE THESE EMI SPECIFICATION PARAMETERS OR THAT SUCH REQUIREMENTS MUST BE WAIVED.

B-170708, JUN 2, 1971

BID PROTEST - RESOLICITATION - OVERSTATEMENT OF GOVERNMENT'S NEEDS DECISION DENYING PROTEST BY LOW BIDDER AGAINST CANCELLATION AND RESOLICITATION OF AN IFB ISSUED BY NAVAL AVIATION SUPPLY OFFICE (NASO), FOR A QUANTITY OF DISPENSING SETS. THE ORIGINAL IFB OVERSTATED THE NEEDS OF THE GOVERNMENT. ALTHOUGH NASO HAD PREVIOUSLY CONTRACTED FOR ITEMS UNDER SOLICITATIONS GIVING THE SAME SPECIFICATIONS BY GRANTING WAIVERS, THIS DOES NOT CONFIRM PROTESTANT'S ALLEGATION THAT OTHER COMPANIES WERE NOT MISLED THEREBY. RESOLICITATION WAS PROPER, NO EVIDENCE CONTRADICTING THE ASSERTION BY TRACOR, INC., THAT IT WAS MISLED IN BIDDING.

TO HILL, CHRISTOPHER AND PHILLIPS:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED AUGUST 28, 1970, AND YOUR SUPPLEMENTING LETTERS DATED AUGUST 31, SEPTEMBER 22, OCTOBER 1, AND NOVEMBER 2, 1970, ON BEHALF OF ELECTROSPACE CORPORATION, PROTESTING AGAINST THE CANCELLATION OF INVITATION FOR BIDS NO. N00383-70-B-0993, ISSUED BY THE NAVAL AVIATION SUPPLY OFFICE (ASO), PHILADELPHIA, PENNSYLVANIA, AND THE SUBSEQUENT READVERTISEMENT OF THE PROCUREMENT.

THE INVITATION, ISSUED MAY 8, 1970, SOLICITED BIDS FOR FURNISHING STEP- LADDER QUANTITIES OF AN/ALE-29 DISPENSING SET. THE SCHEDULE PROVIDED THAT WHEN A PERFORMANCE REQUIREMENT OF ANY SPECIFICATION CONFLICTS WITH ANY INTERCHANGEABILITY REQUIREMENTS OF THE SAME SPECIFICATION, THE PERFORMANCE REQUIREMENT TAKES PRECEDENCE. FOUR BIDS WERE RECEIVED AND OPENED AS SCHEDULED ON JUNE 2, 1970. ELECTROSPACE SUBMITTED THE LOW BID AND TRACOR SUBMITTED THE SECOND LOW BID. NEITHER ELECTROSPACE NOR TRACOR TOOK EXCEPTION TO THE SPECIFICATION AS SET FORTH IN THE INVITATION. HOWEVER, BY LETTER DATED JUNE 9, 1970, TRACOR PROTESTED AGAINST AN AWARD BEING MADE UNDER THE INVITATION, ALLEGING AS THE BASIS FOR ITS PROTEST THE FOLLOWING:

"1. THAT SPECIFICATION MIL D-81445 (AS), AS AMENDED BY AMENDMENT NO. 1 THERETO, DATED JULY 15, 1968, INCORPORATED UNDER THE ABOVE REFERENCED SOLICITATION, WAS DEFECTIVE IN THAT SUCH SPECIFICATION DID NOT SPECIFY THE MINIMUM, ACTUAL NEEDS OF THE UNITED STATES NAVY. SPECIFICALLY UNDER CONTRACTS N00019-67-C-0113 AND N00019-68-C-0279, TRACOR, INC., HAS DELIVERED THE SAME ITEMS AS REQUIRED BY THIS SOLICITATION UNDER A GRANT OF WAIVER FROM THE EMI REQUIREMENTS OF THE AFORESAID SPECIFICATION FOR THE SEQUENCER SWITCH, AND THAT SUCH ITEMS AS DELIVERED HAVE SATISFACTORILY ATTAINED FLEET OPERATIONAL REQUIREMENTS FOR THESE EQUIPMENTS.

"2. THAT THE DRAWINGS INCORPORATED UNDER THE ABOVE REFERENCED SOLICITATION ARE PATENTLY IN CONFLICT WITH THE SPECIFICATIONS AND AS SUCH WOULD REQUIRE EITHER A SUBSTANTIAL REVISION IN ORDER TO ACHIEVE THESE EMI SPECIFICATION PARAMETERS OR THAT SUCH REQUIREMENTS MUST BE WAIVED. SUCH WAIVER IS CONTEMPLATED UNDER THIS PROCUREMENT IT WOULD BE PREJUDICIAL TO TRACOR, INC., IN THAT ITS BID WAS BASED UPON MEETING THESE EMI REQUIREMENTS BY APPROPRIATELY MODIFYING THE DRAWINGS FOR THE SEQUENCER SWITCH."

THE RECORD SHOWS THAT AN INQUIRY BY THE ASO PURCHASE DIVISION RESULTED IN THE ASO TECHNICAL DIVISION ADVISING THAT THE INVITATION HAD INCORPORATED CERTAIN EMI REQUIREMENTS IN EXCESS OF FLEET REQUIREMENTS AND THAT, UNKNOWN TO ASO AT THE TIME OF ISSUING THE INVITATION AND OPENING THE BIDS, BOTH TRACOR AND ELECTROSPACE HAD BEEN GRANTED WAIVERS FROM THE EXCESS EMI REQUIREMENTS UNDER PRIOR CONTRACTS BY NAVY AIR SYSTEMS COMMAND (NAVAIRSYSCOM).

BY LETTER DATED JULY 9, 1970, ASO INQUIRED OF ELECTROSPACE WHETHER THE DISPENSING EQUIPMENT ELECTROSPACE WAS THEN MANUFACTURING INCORPORATED A DESIGN MEETING ALL EMI REQUIREMENTS APPLICABLE TO THE INVITATION AND, IF NOT, THE EXTENT REDESIGN WAS NECESSARY TO SATISFY THOSE REQUIREMENTS. LETTER DATED JULY 24, 1970, ELECTROSPACE RESPONDED IN PERTINENT PART AS FOLLOWS:

"THE DESIGN CONTROLLING MANUFACTURE UNDER OUR CURRENT CONTRACTS DOES NOT MEET ALL SPECIFICATION PERFORMANCE REQUIREMENTS AS SET FORTH IN THE IFB. SPECIFICALLY THE DESIGN DOES NOT MEET THE REQUIREMENTS SPECIFIED FOR CONDUCTED AND RADIATED (SHORT DURATION) BROADBAND INTERFERENCE UNDER ANY TEST PROCEDURES WHICH NAFI HAS BEEN WILLING TO APPROVE.

"AS YOU MAY KNOW WE WERE GRANTED WAIVERS RESPECTING THESE TWO PARAMETERS BY THE NAVAL AIR SYSTEMS COMMAND UNDER OUR CURRENT CONTRACTS. THOSE WAIVERS GRANT A 25 DB RELAXATION BETWEEN 60 AND 100 MC FOR RADIATED AND A 30 DB RELAXATION BETWEEN 3.0 AND 20 MC FOR CONDUCTED INTERFERENCE.

"THE FOREGOING WAIVERS WERE GRANTED IN RECOGNITION OF THE FACT THAT THE SPECIFIED PERFORMANCE REQUIREMENTS IN THESE AREAS, WHICH ARE THE SAME UNDER OUR CURRENT CONTRACTS AND THE IFB IN QUESTION, ARE PHYSICALLY IMPOSSIBLE TO ACHIEVE WITHIN THE CONFINES OF BOTH THE SPECIFIED DESIGN FOR THE EQUIPMENT AND ANY TEST PROCEDURES WHICH NAFI HAS BEEN WILLING TO APPROVE. INDEED, THE SPECIFIED PERFORMANCE REQUIREMENTS HAVE HAD TO BE WAIVED UNDER ALL EARLIER CONTRACTS FOR THIS EQUIPMENT.

"ACCORDINGLY, REDESIGN WOULD BE REQUIRED IF THE EQUIPMENT WERE TO MEET THESE SPECIFIED PERFORMANCE REQUIREMENTS IN THESE AREAS.

"ALTERNATIVELY, IT MIGHT BE POSSIBLE TO MEET THOSE CRITERIA UNDER THESE SPECIFIED DESIGNS, OR AT LEAST IMPROVE UPON PRESENT TEST RESULTS, BY ALTERING THE PRESENT TEST SET UP THROUGH USE OF SHIELDED CABLE AND OTHER MODIFICATIONS. HOWEVER, THE TEST METHODS ARE STILL SUBJECT TO NAFI APPROVAL UNDER THE PRESENT CONTRACTS AND NAFI HAS RESISTED SUCH CHANGES IN THE PAST.

"WE ARE AND HAVE BEEN AWARE THAT NAVAIR HAS PLACED UNUSUAL EMPHASIS IN THE PROCUREMENT OF THIS EQUIPMENT ON THE REQUIREMENT FOR INTERCHANGEABILITY WITH ALL OTHER EQUIPMENT IN THE FIELD. THIS DEMAND FOR INTERCHANGEABILITY HAS EVEN EXTENDED TO THE "BITS AND PIECES" LEVEL. UNDER THE CIRCUMSTANCES, AND PARTICULARILY UNDER THE CIRCUMSTANCES OF THIS BID, WE ASSUMED THAT NAVAIR WOULD UNDOUBTEDLY INSIST ON SUCH INTERCHANGEABILITY, AS IS CONTEMPLATED IN THE PRO FORMA CONTRACT, EVEN IF IT RESULTED IN IMPOSSIBILITY OF MEETING THE DETAILED PERFORMANCE SPECIFICATIONS. THE VERY FACT THAT THE WAIVERS WHICH WE RECEIVED ON OUR PRIOR CONTRACTS WERE ALSO GRANTED ON ALL PREVIOUS CONTRACTS OBVIOUSLY BUTTRESSED THE CONCLUSION THAT NAVAIR WOULD AGAIN GRANT WAIVERS AS IT ALWAYS HAS IN THE PAST, IN ORDER TO ACHIEVE THE DEMANDED INTERCHANGEABILITY.

"WE ARE NOT CERTAIN WHETHER REDESIGN IS EVEN POSSIBLE, NOR THE EXTENT TO WHICH IT WOULD BE NECESSARY IN ORDER TO MEET THE UNAMENDED SPECIFICATION REQUIREMENTS WITHOUT THE ANTICIPATED WAIVERS. OUR SUPPLIER FOR THE SEQUENCER SWITCH, LEDEX, ADVISES US THAT IT BELIEVES THE PROBLEM RESPECTING CONDUCTED INTERFERENCE CAN BE CURED BY ADDING A LARGER FILTER TO THAT COMPONENT. HOWEVER, EVEN THIS CHANGE WOULD NOT BE EFFECTIVE WITHOUT CHANGING THE EXISTING TEST SET UP, WHICH NAFU HAS BEEN UNWILLING TO PERMIT. FURTHER, THE PROBLEM RESPECTING RADIATED INTERFERENCE IN BOTH THE SWITCH AND PROGRAMMER, IF AT ALL POSSIBLE, COULD ONLY BE ACHIEVED BY METHODS WHICH WOULD INVOLVE CHANGING THEIR CONFIGURATION (INCLUDING THEIR SIZES).

"THUS, WHILE WE DO NOT HAVE THE PRESENT MEANS TO ESTIMATE MORE PRECISELY WHAT WOULD BE INVOLVED IN REDESIGNING THE COMPONENTS, WE DO KNOW THAT ANY REDESIGN OF THE EQUIPMENT ITSELF WOULD INVOLVE REDESIGN OF BOTH THE PROGRAMMER AND THE SWITCH SEQUENCER AND WOULD REQUIRE SIGNIFICANT DEPARTURE FROM THE CONFIGURATION PRESENTLY SPECIFIED. HENCE, SUCH REDESIGN COULD NOT BE ACHIEVED WITHOUT COMPROMISING THE INTERCHANGEABILITY REQUIREMENT OF THE IFB."

BASED ON THE FOREGOING FACTS, THE CONTRACTING OFFICER DETERMINED THAT THE INVITATION SHOULD BE CANCELLED PURSUANT TO THE AUTHORITY SET FORTH IN ARMED SERVICE PROCUREMENT REGULATION (ASPR) 2-404.1(B) (II) WHICH AUTHORIZES SUCH ACTION WHEN "SPECIFICATIONS HAVE BEEN REVISED." BIDDERS WERE NOTIFIED OF THE CANCELLATION BY LETTER DATED AUGUST 26, 1970.

ELECTROSPACE, THROUGH ITS ATTORNEY'S LETTER DATED SEPTEMBER 22, 1970, WITH ENCLOSURES, FORCEFULLY PROTESTS THE CANCELLATION OF ALL BIDS UNDER THE INVITATION ON THE GROUNDS THAT THE CHANGE IN THE SPECIFICATIONS DID NOT CHANGE THE BASIC WORK REQUIREMENTS; THAT THE DISCLOSURE OF ITS LOW BID GIVES AN ADVANTAGE TO ITS COMPETITORS; AND THAT BOTH THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM AND ELECTROSPACE ARE SERIOUSLY PREJUDICED.

THE NAVAL SUPPLY SYSTEMS COMMAND (NSSC) CONTENDS THAT THE INVITATION SOUGHT BIDS ON EQUIPMENT IN EXCESS OF THE GOVERNMENT'S MINIMUM REQUIREMENTS AND THERE IS NO VALID BASIS FOR DETERMINING WHAT BID PRICES WOULD HAVE BEEN HAD THE SOLICITATION SOUGHT BIDS FOR FURNISHING ONLY THE MINIMUM REQUIREMENTS OF THE GOVERNMENT. ON THIS BASIS IT IS STATED THAT THE UNCERTAINTY AS TO THE EXTENT REDESIGN OF THE EXISTING EQUIPMENT WAS NECESSARY TO HAVE MET ALL OF THE EMI REQUIREMENTS APPLICABLE TO THE CANCELED SOLICITATION MAY HAVE CAUSED ONE OR MORE CONCERNS TO HAVE DECLINED SUBMITTING A BID UNDER THE SOLICITATION. IN ADDITION, OUR OFFICE HAS BEEN INFORMALLY ADVISED BY NSSC THAT IT IS NOT KNOWN WHETHER THE TEST REQUIREMENT IS AN IMPOSSIBILITY.

WE HAVE OFTEN OBSERVED THAT THE CANCELLATION OF AN INVITATION, AFTER BID OPENING, AND AFTER EACH BIDDER OR PROSPECTIVE BIDDER HAS LEARNED HIS COMPETITORS' PRICES, IS A SERIOUS MATTER AND SUCH CANCELLATION SHOULD BE MADE ONLY FOR COGENT REASONS. HOWEVER, WHERE IT IS DETERMINED THAT THE SPECIFICATIONS AS ADVERTISED FAIL TO ACCURATELY STATE THE ACTUAL NEEDS OF THE GOVERNMENT (B-165302, DECEMBER 12, 1968; B-162067(2), OCTOBER 24, 1967; B-161622, AUGUST 7, 1967) OR OVERSTATE THOSE NEEDS (B-139196, JUNE 4, 1959; B-134424, DECEMBER 19, 1957) WE HAVE HELD A COGENT REASON EXISTS FOR REJECTING ALL BIDS AND READVERTISING.

YOU STATE THAT OUR DECISION 49 COMP. GEN. 211 (1969), SUPPORTS YOUR CONTENTION THAT NO COGENT REASON EXISTS FOR READVERTISING. IN THAT CASE, AN IFB FOR "200 RATIO" WIRE ELICITED FOUR BIDS RANGING FROM $96,590 TO $117,000. HOWEVER, THE LOW BID WAS BASED UPON LESS EXPENSIVE "180 RATIO" WIRE. IN VIEW OF A DETERMINATION THAT THE 180 WIRE WOULD SATISFY THE GOVERNMENT'S NEEDS, AND THAT THE 200 WIRE WAS APPROXIMATELY $373 HIGHER IN PRICE THAN 180 WIRE, THE PROCURING ACTIVITY CONCLUDED THAT THE INVITATION SHOULD BE CANCELED AND READVERTISED ON SPECIFICATIONS CALLING FOR 180 WIRE. IN HOLDING THAT AWARD SHOULD BE MADE UNDER THE ORIGINAL IFB, WE STATED:

"WE CAN APPRECIATE THAT THE GOVERNMENT'S NEEDS, AT A MINIMUM, MIGHT BE SATISFIED BY SPECIFYING 180-RATIO WIRE AT A SLIGHTLY LESSER COST BUT WE FEEL THAT READVERTISING THE PROCUREMENT AFTER BIDS HAVE BEEN EXPOSED WOULD BE FAR MORE PREJUDICIAL TO THE COMPETITIVE BIDDING SYSTEM THAN AN AWARD UNDER THE 200-RATIO SPECIFICATION. WHILE THE ATTORNEYS FOR (THE THIRD LOW BIDDER) ARGUE THAT REINSTATEMENT OF THE INITIAL SOLICITATION WOULD BE IMPROPER UNLESS THERE IS COGENT EVIDENCE TO SHOW THAT THE DOLLAR SAVINGS ON READVERTISEMENT WOULD BE RELATIVELY SMALL, WE ARE OF THE VIEW THAT THE SAVINGS POSSIBLE ON READVERTISEMENT WHICH, AT THE BEST, ARE PURELY SPECULATIVE, ARE NOT FOR CONSIDERATION UNDER CIRCUMSTANCES SUCH AS INVOLVED HERE. RATHER, THE PRIMARY CONSIDERATION IN THIS TYPE OF SITUATION SHOULD BE THE COST TO THE GOVERNMENT IN THE EVENT OF AN AWARD UNDER THE INITIAL SOLICITATION. SINCE ADEQUATE COMPETITION WAS OBTAINED IN THIS CASE; SINCE THE DIFFERENCE BETWEEN THE TWO LOW BIDS IS RELATIVELY SMALL; AND SINCE THERE IS NO EVIDENCE TO INDICATE THAT THE REQUIREMENT FOR WIRE OF 200 RATIO PRECLUDED OTHER POTENTIAL BIDDERS FROM SUBMITTING RESPONSIVE BIDS, WE BELIEVE THAT THE CIRCUMSTANCES REQUIRE AN AWARD UNDER THE INITIAL SOLICITATION."

WE BELIEVE THAT THE FACTS IN THE PRESENT CASE CAN BE DISTINGUISHED FROM THOSE IN 49 COMP. GEN. 211. IN THE LATTER CASE, AWARD WAS MADE ON THE LOW RESPONSIVE BID COMPLYING WITH THE ADVERTISED SPECIFICATIONS OF 200-RATIO WIRE, WHICH, PRESUMABLY, WAS ACTUALLY FURNISHED UNDER THE CONTRACT. EXCEPT FOR THE BID OFFERING 180-RATIO WIRE, WHICH WAS DETERMINED TO BE NONRESPONSIVE, ALL BIDS OFFERED THE WIRE SPECIFIED. SINCE THE DIFFERENCE IN THE PRICE OF THE NONRESPONSIVE BID (WHICH, HOWEVER, OFFERED A PRODUCT CONSIDERED ACCEPTABLE) AND THE LOW RESPONSIVE BID WAS ONLY $373, AWARD UNDER THAT INVITATION TO THE LOW RESPONSIVE BIDDER WAS CONSIDERED TO BE IN THE BEST INTEREST OF THE GOVERNMENT. IN THE PRESENT CASE, THE DIFFERENCE BETWEEN THE TWO LOW BIDS ON THE FIRST SOLICITATION WAS $36,722.

IN THE INSTANT CASE, THE TWO LOW BIDS ON THE INITIAL INVITATION WERE RESPONSIVE ON THEIR FACE. HOWEVER, YOU HAVE ASSERTED THAT THE SPECIFICATIONS IN THAT IFB "ARE PHYSICALLY IMPOSSIBLE TO ACHIEVE WITHIN THE CONFINES OF BOTH THE SPECIFIED DESIGN FOR THE EQUIPMENT AND ANY TEST PROCEDURES WHICH NAFI HAS BEEN WILLING TO APPROVE." THE NAVY DOES NOT CONTEND THAT THIS IS WRONG AND INDEED, IN THREE PRIOR PROCUREMENTS UNDER THE SAME SPECIFICATIONS THE NAVY HAS GRANTED WAIVERS REVEALING, IF NOT A RECOGNITION OF IMPOSSIBILITY, AT LEAST A CONCESSION THAT THE SPECIFICATIONS OVERSTATE THE REAL NEEDS OF THE GOVERNMENT. THIS IS CONFIRMED BY THE RESOLICITATION OF THE PROCUREMENT UTILIZING SPECIFICATIONS WHICH, IN EFFECT, INCORPORATE SUCH WAIVERS. PARENTHETICALLY, WE BELIEVE THAT PRUDENCE IN PROTECTING ITS OWN INTERESTS - IF NOT AN ACTUAL OBLIGATION - WOULD CALL FOR THE BIDDER TO MAKE KNOWN TO THE CONTRACTING OFFICER BEFORE BID OPENING ANY INSTANCE OF IMPOSSIBLE OR IMPROPER SPECIFICATIONS. FAILURE TO TAKE SUCH ACTION MAY WELL BE PREJUDICIAL TO THE INTERESTS OF THE BIDDER AND THE COMPETITIVE BID SYSTEM.

BASIC TO THE SYSTEM OF FORMAL ADVERTISING IS THE CONCEPT THAT THE SPECIFICATIONS INCLUDED IN THE IFB WILL REFLECT THE ACTUAL NEEDS OF THE GOVERNMENT STATED ON A BROAD BASIS IN ORDER TO ACHIEVE MAXIMUM COMPETITION. IT IS CONCEDED THAT THIS WAS NOT DONE HERE. ORDINARILY, SUCH FAILURE WOULD REQUIRE RESOLICITATION. SOME EXCEPTIONS ARE RECOGNIZED, HOWEVER, SUCH AS IN 49 COMP. GEN. 211 (1969) OR WHERE ALL INTERESTED PARTIES UNDERSTAND THE GOVERNMENT'S ACTUAL REQUIREMENTS AND BID ON THAT BASIS NOTWITHSTANDING CONTRARY OR UNCLEAR LANGUAGE IN THE IFB. SEE B-139673, JUNE 26, 1959. YOU CONTEND THAT THE PARTIES IN CONTENTION WERE NOT MISLED HERE. TRACOR DENIES THIS. WHILE WE CANNOT, OF COURSE, OBJECTIVELY ESTABLISH THE STATE OF MIND WHICH PRODUCED THE TRACOR BID, WE ARE NOT IN A POSITION TO REFUTE THEIR SUBSEQUENTLY EXPRESSED STATEMENT OF INTENTION; THEREFORE, WE FIND NO BASIS TO INVALIDATE THE RESOLICITATION. IN REACHING THIS CONCLUSION, WE HAVE NOT OVERLOOKED THE PROVISION OF THE INITIAL IFB TITLED "INTERCHANGEABILITY OF REORDERED UNITS" WHICH INDICATES IN THE FIRST SENTENCE THAT THE UNITS DELIVERED UNDER THE IFB SHALL BE INTERCHANGEABLE WITH PREVIOUSLY MANUFACTURED EQUIPMENT. THIS MAY BE INTERPRETED TO MEAN THAT THE UNITS TO BE PRODUCED SHALL BE INTERCHANGEABLE WITH THOSE PREVIOUSLY FURNISHED, I.E., THOSE MANUFACTURED UNDER THE WAIVER. WE NOTE ALSO, HOWEVER, THAT THE PROVISION RECOGNIZES THE POSSIBILITY THAT A PERFORMANCE REQUIREMENT MAY CONFLICT WITH THE INTERCHANGEABILITY REQUIREMENT. THE PROVISION CONTEMPLATES THE POSSIBILITY THAT A CHANGE ORDER MAY BE CALLED FOR IF THE CONTRACTOR IS REQUIRED TO MEET THE SPECIFICATIONS WHILE ATTAINING INTERCHANGEABILITY. ACCORDINGLY, WE DO NOT BELIEVE THAT THE CITED PROVISION CAN BE CONSTRUED AS AN IMPLICIT INCORPORATION OF THE EARLIER WAIVERS INTO IFB NO. N00383-70 -B-0993.

WE, THEREFORE, ARE OF THE VIEW THAT THE CANCELLATION OF THE INITIAL INVITATION AND AWARD ON THE READVERTISEMENT ARE PROPER UNDER THE CIRCUMSTANCES, AND YOUR PROTEST MUST BE DENIED.