B-172219, JUL 20, 1971, 51 COMP GEN 47

B-172219: Jul 20, 1971

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DOES NOT VIOLATE PARAGRAPH 1-1107.1 OF THE ARMED SERVICES PROCUREMENT REGULATION WHICH PRESCRIBES THAT ONLY BIDS "OFFERING PRODUCTS WHICH ARE QUALIFIED FOR LISTING ON THE APPLICABLE QUALIFIED PRODUCTS LIST AT THE TIME SET FOR OPENING OF BIDS" SHALL BE CONSIDERED IN MAKING AWARDS. THE REGULATION SHOULD BE INTERPRETED TO INSURE THE PROCUREMENT OF PRODUCTS MEETING GOVERNMENT NEEDS IN A MANNER THAT WILL NOT PLACE UNNECESSARY RESTRICTIONS ON COMPETITION. THE INVITATION WAS ISSUED ON DECEMBER 14. THE INVITATION PROVIDED: "BIDS WILL BE CONSIDERED FOR SUCH PRODUCTS AS HAVE. BEEN TESTED AND APPROVED FOR INCLUSION IN THE MILITARY PRODUCTS LIST WHETHER OR NOT SUCH PRODUCTS HAVE ACTUALLY BEEN SO LISTED BY THAT DATE.".

B-172219, JUL 20, 1971, 51 COMP GEN 47

CONTRACTS - SPECIFICATIONS - QUALIFIED PRODUCTS - TIME FOR QUALIFICATION THE AWARD OF A CONTRACT TO THE LOW BIDDER WHOSE PRODUCT DID NOT RECEIVE QUALIFICATION APPROVAL FOR LISTING ON THE MILITARY PRODUCTS LIST PRIOR TO BID OPENING, ALTHOUGH THE PRODUCT - ELECTRON TUBES - HAD BEEN TESTED AND FOUND QUALIFIED FOR LISTING ON A SPECIFIED DATE PRIOR TO BID OPENING BUT THE MINISTERIAL ACT OF APPROVAL HAD NOT BEEN ACCOMPLISHED, DOES NOT VIOLATE PARAGRAPH 1-1107.1 OF THE ARMED SERVICES PROCUREMENT REGULATION WHICH PRESCRIBES THAT ONLY BIDS "OFFERING PRODUCTS WHICH ARE QUALIFIED FOR LISTING ON THE APPLICABLE QUALIFIED PRODUCTS LIST AT THE TIME SET FOR OPENING OF BIDS" SHALL BE CONSIDERED IN MAKING AWARDS, AS THE REGULATION DOES NOT IMPOSE A REQUIREMENT FOR FORMAL "APPROVAL" PRIOR TO BID OPENING, AND, MOREOVER, THE REGULATION SHOULD BE INTERPRETED TO INSURE THE PROCUREMENT OF PRODUCTS MEETING GOVERNMENT NEEDS IN A MANNER THAT WILL NOT PLACE UNNECESSARY RESTRICTIONS ON COMPETITION.

TO THE FAIRCHILD CAMERA AND INSTRUMENT CORPORATION, JULY 20, 1971:

WE REFER TO YOUR TELEGRAM OF MARCH 17, 1971, AND YOUR LETTER OF MAY 24, 1971, RELATING TO YOUR PROTEST AGAINST AWARD TO ANOTHER FIRM UNDER INVITATION FOR BIDS 71-71-A, ISSUED BY THE U.S. COAST GUARD SUPPLY CENTER, BROOKLYN, NEW YORK.

THE INVITATION WAS ISSUED ON DECEMBER 14, 1970, FOR BIDS ON ELECTRON TUBES, TYPE 7012, QUALIFIED ON THE MILITARY PRODUCTS LIST. WITH RESPECT TO THE QUALIFICATION APPROVAL, THE INVITATION PROVIDED: "BIDS WILL BE CONSIDERED FOR SUCH PRODUCTS AS HAVE, PRIOR TO THE TIME OF BID OPENING, BEEN TESTED AND APPROVED FOR INCLUSION IN THE MILITARY PRODUCTS LIST WHETHER OR NOT SUCH PRODUCTS HAVE ACTUALLY BEEN SO LISTED BY THAT DATE."

TWO BIDS WERE RECEIVED AT THE PUBLIC BID OPENING ON JANUARY 13, 1971. ITT ELECTRON TUBE DIVISION OF INTERNATIONAL TELEPHONE CORPORATION SUBMITTED THE LOWEST UNIT PRICES FOR THE OPTIONAL QUANTITIES SPECIFIED AND THE LOWEST TOTAL PRICE OF $86,080. THE BID FROM YOUR FIRM SET FORTH HIGHER UNIT PRICES AND A TOTAL PRICE OF $95,600.

YOUR LETTER OF JANUARY 19, 1971, TO THE CONTRACTING OFFICER FURNISHED A COPY OF A NOTICE OF QUALIFICATION APPROVAL FOR YOUR PRODUCT DATED DECEMBER 30, 1970, FROM THE NAVAL ELECTRONICS SYSTEMS COMMAND, BASED ON YOUR IN- PLANT REPORT NO. 70FD5 DATED DECEMBER 18, 17970. YOU ALLEGED IN YOUR LETTER THAT ITT HAD NOT RECEIVED QUALIFICATION APPROVAL PRIOR TO BID OPENING AS REQUIRED IN THE IFB.

AFTER RECEIVING YOUR LETTER OF JANUARY 19, 1971, THE CONTRACTING OFFICER OBTAINED A COPY OF ITT'S TEST REPORT NO. PT-111 DATED JANUARY 7, 1971. THE PURPOSE OF THE TEST WAS FOR REQUALIFICATION TO A REINSTATED SPECIFICATION, AND ITT'S TUBES TESTED PASSED EACH OF THE SPECIFIC QUALIFICATION REQUIREMENTS WITH NO ABNORMALITIES OR FAILURES. THE TEST REPORT WAS FORWARDED TO THE NAVAL ELECTRONICS SYSTEMS COMMAND ON THE SAME DATE IT WAS COMPLETED, JANUARY 7, 1971, AND WE ARE ADVISED IT WAS RECEIVED BY THE COMMAND ON JANUARY 12.

NOTICE OF QUALIFICATION APPROVAL WAS SENT BY LETTER OF JANUARY 25, 1971, FROM THE NAVAL ELECTRONICS SYSTEMS COMMAND TO ITT AND FURNISHED TO THE CONTRACTING OFFICER BY LETTER OF JANUARY 28, 1971. THE LETTER STATED THAT "QUALIFICATION APPROVAL IS HEREBY GRANTED YOUR PRODUCT ... " IT WILL APPEAR ON QUALIFIED PRODUCTS LIST QPL-1 AS FOLLOWS:

GOVERNMENT MANUFACTURER'S TEST OR MANUFACTURE'S

DESIGNATION DESIGNATION QUALIFICATION NAME AND ADDRESS

REFERENCE

7012 IN-PLANT RPT. NO. ITT ELECTRON TUBE

PT-111 DTD 7 DIVISION,

JAN 1971. P.O. BOX 100,

EASTON, PA. 18043.

PLANT: SAME

ADDRESS.

THE CONTRACTING OFFICER DECIDED THAT WHETHER NOTICE OF APPROVAL WAS RECEIVED BEFORE OR AFTER BID OPENING WAS OF NO SIGNIFICANCE, SINCE APPROVAL OF ITT'S TYPE 7012 TUBE, OCCURRED ON JANUARY 7, 1971, UPON SUCCESSFUL COMPLETION OF THE TEST. SINCE IT WAS THE CONTRACTING OFFICER'S CONCLUSION THAT ITT BID ON A PRODUCT WHICH HAD BEEN TESTED AND APPROVED FOR INCLUSION IN THE MILITARY PRODUCTS LIST PRIOR TO BID OPENING, HE MADE AWARD TO ITT AS THE LOW BIDDER UNDER THE INVITATION ON MARCH 15, 1971.

IN YOUR PROTEST TO OUR OFFICE, YOU TAKE EXCEPTION TO THE CONCLUSION OF THE CONTRACTING OFFICER. IN SUPPORT OF YOUR POSITION, YOU QUOTE FROM NAVY'S PUBLICATION SD-6, PROVISIONS GOVERNING QUALIFICATION, TO THE EFFECT THAT CERTIFICATION BY THE GOVERNMENT REPRESENTATIVE THAT THE TESTS WERE MONITORED SHALL NOT BE CONSTRUED AS MEANING THAT THE TESTS ARE ACCEPTABLE TO THE GOVERNMENT FOR QUALIFICATION OF THE PRODUCT AND THAT THE PREPARING ACTIVITY WILL DETERMINE WHETHER THE PRODUCT CONFORMS TO THE REQUIREMENTS OF THE SPECIFICATION. YOU ADVISE THAT IT HAS BEEN YOUR EXPERIENCE THE PREPARING ACTIVITY PERFORMS A COMPLETE ENGINEERING REVIEW OF THE DATA SUBMITTED PRIOR TO APPROVAL. YOU CONTEND THEREFORE THAT THE REQUIRED APPROVAL FOR INCLUSION IN THE QUALIFIED PRODUCTS LIST OCCURRED ON JANUARY 25, 1971, AND THE BID OF ITT WAS NOT ELIGIBLE FOR CONSIDERATION AT THE TIME OF BID OPENING ON JANUARY 13, 1971.

WE DO NOT REGARD THE PUBLICATION TO WHICH YOU REFER AS CONTROLLING WITH RESPECT TO THE ISSUE PRESENTED BY YOUR PROTEST. THE DETERMINATION BY THE CONTRACTING OFFICER THAT QUALIFICATION WAS COMPLETE ON THE DATE OF THE TESTING WAS NOT BASED ON THE FACT THAT THE TESTING WAS MONITORED BY A GOVERNMENT REPRESENTATIVE, BUT RATHER UPON THE TEST RESULTS. IN ANY EVENT, THE PUBLICATION WAS DISTRIBUTED, AS YOU INDICATED IN YOUR LETTER, AT THE TIME OF AUTHORIZATION TO CONDUCT QUALIFICATION TESTING AND WAS NOT A PART OF THE INVITATION OR THE APPLICABLE SECTIONS OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR).

ASPR 1-1102 STATES THAT THE PREPARING ACTIVITY IS RESPONSIBLE FOR QUALIFICATION BUT DOES NOT SET FORTH THE METHOD OF DISCHARGING THIS RESPONSIBILITY. ASPR 1-1107.1 PROVIDES THAT WHEN THE GOVERNMENT IS PROCURING QUALIFIED PRODUCTS, ONLY BIDS "OFFERING PRODUCTS WHICH ARE QUALIFIED FOR LISTING ON THE APPLICABLE QUALIFIED PRODUCTS LIST AT THE TIME SET FOR OPENING OF BIDS" SHALL BE CONSIDERED IN MAKING AWARDS. REQUIREMENT FOR A FORMAL "APPROVAL" PRIOR TO BID OPENING IS IMPOSED BY ASPR, THE ONLY REQUIREMENT BEING THAT THE PRODUCT IS QUALIFIED FOR LISTING.

OUR OFFICE HAS RECOGNIZED THAT USE OF QUALIFIED PRODUCTS LISTS, WHILE ACCEPTABLE AS A METHOD OF PROCUREMENT IN CERTAIN INSTANCES, IS A METHOD INHERENTLY RESTRICTIVE OF COMPETITION. 36 COMP. GEN. 809 (1957); 43 ID. 223 (1963). IN VIEW THEREOF, AND SINCE THE BEST INTERESTS OF THE GOVERNMENT REQUIRE MAINTENANCE OF FULL AND FREE COMPETITION COMMENSURATE WITH THE GOVERNMENT'S NEEDS, WE ARE OF THE OPINION THAT WHILE REGULATIONS IMPLEMENTING THE USE OF QUALIFIED PRODUCTS LISTS SHOULD BE INTERPRETED TO INSURE PROCUREMENT OF PRODUCTS MEETING THE GOVERNMENT'S NEEDS THEY SHOULD NOT BE INTERPRETED IN SUCH A MANNER AS TO PLACE UNNECESSARY RESTRICTIONS ON COMPETITION.

IN THE PARTICULAR CIRCUMSTANCES PRESENT IN THE INSTANT CASE, WHERE THE PRODUCT WAS BEING TESTED FOR REQUALIFICATION TO A REINSTATED SPECIFICATION AND WHERE THE TESTS WERE COMPLETED, AS AUTHORIZED BY THE PREPARING ACTIVITY, WITHOUT ANY FAILURES OR ABNORMALITIES, IT IS APPARENT THAT ITT'S PRODUCT MET THE NEEDS OF THE GOVERNMENT, AND THEREFORE WAS "QUALIFIED FOR LISTING" ON THE DATE THE TEST REPORT WAS ISSUED. IT IS OUR OPINION, THEREFORE, THAT ISSUANCE OF A LETTER OF APPROVAL IN THIS INSTANCE SHOULD BE CONSIDERED A MINISTERIAL ACT, AND WE DO NOT BELIEVE THE GOVERNMENT SHOULD BE DEPRIVED OF THE BENEFIT OF CONSIDERING ITT'S BID MERELY BECAUSE IT HAD NOT COMPLETED ITS PAPERWORK AT THE TIME OF BID OPENING.

WE RECOGNIZE THAT, IN OTHER CIRCUMSTANCES, WE HAVE HELD THE EFFECTIVE DATE OF QUALIFICATION TO BE THE DATE OF THE LETTER GRANTING APPROVAL. SEE B-143282, AUGUST 18, 1960. HOWEVER, IN THAT CASE, THE TESTS COMPLETED BEFORE BID OPENING WERE ONLY PARTIALLY SUCCESSFUL, RESULTING IN QUALIFICATION OF 18 OF 22 ITEMS TESTED, AND THE APPROVAL WHICH OCCURRED AFTER BID OPENING CONTAINED AN ELEMENT OF DISCRETION NOT PRESENT HERE. THE SAME EFFECT, SEE B-155358, JANUARY 4, 1965. MOREOVER, IN BOTH OF THESE CASES, PRODUCTS WERE LISTED ON THE QPL WITHOUT REFERENCE TO THE DATE OF TESTING, WHILE IN THE PRESENT CASE THE PROPOSED LISTING SET FORTH IN THE LETTER OF APPROVAL SPECIFICALLY REFERS TO THE DATE OF QUALIFICATION TESTING AND TO NO OTHER DATE.

IN VIEW OF THE FOREGOING, WE BELIEVE THE METHOD OF LISTING USED IN THE INSTANT PROCUREMENT COULD REASONABLY BE INTERPRETED, AS THE CONTRACTING OFFICER DID, TO ESTABLISH THE DATE OF QUALIFICATION AS THE DATE OF THE TEST REPORT, RATHER THAN THE DATE OF THE LETTER OF APPROVAL. WE ARE THEREFORE UNABLE TO CONCLUDE THAT THE ACTIONS OF THE CONTRACTING OFFICER WERE UNREASONABLE IN THE CONTEXT OF THIS PARTICULAR FACT SITUATION, OR THAT HIS AWARD TO ITT DID NOT RESULT IN A VALID, BINDING CONTRACT. ACCORDINGLY, YOUR PROTEST MUST BE DENIED.