B-172232, AUG 2, 1971

B-172232, AUG 2, 1971

BID PROTEST - BRAND NAME OR EQUAL - DEFECTIVE SPECIFICATIONS - CANCELLATION OF AWARD DECISION DENYING PROTEST BY FOURTH LOW BIDDER AGAINST AWARD OF A CONTRACT TO HOLT INSTRUMENT LABORATORIES, INC., THIRD LOW BIDDER, AND DENYING REQUEST THAT AWARD BE MADE TO MICRODOT, INC., UNDER A SOLICITATION ISSUED BY THE ARMY ELECTRONICS COMMAND, PHILA., PA., FOR 200 AUDIO SINE GENERATORS ON A BRAND NAME "MICRODOT, MODEL F 370A" OR EQUAL BASIS. WHERE THE GOVERNMENT DOES NOT ACCURATELY DETAIL THOSE CHARACTERISTICS OF THE BRAND NAME ITEM WHICH ARE CONSIDERED TO BE REQUIRED TO MEET THE MINIMUM NEEDS OF THE GOVERNMENT, SO THAT EVEN THE BRAND NAME PRODUCT DOES NOT MEET THE REQUIREMENT, THE PROPER ACTIONS TO TAKE ARE TO CANCEL THE AWARD TO HOLT, AND TO RESOLICIT THE PROCUREMENT UNDER REVISED SPECIFICATIONS WHICH WILL ASSURE FULL AND FREE COMPETITION.

TO PAUL AND GORDON:

FURTHER REFERENCE IS MADE TO YOUR PROTEST ON BEHALF OF MICRODOT, INC. (MICRODOT) AGAINST THE AWARD OF A CONTRACT TO HOLT INSTRUMENT LABORATORIES, INC. (HOLT) UNDER SOLICITATION NO. DAAB05-71-B-0172, ISSUED ON NOVEMBER 13, 1970, BY THE UNITED STATES ARMY ELECTRONICS COMMAND, PHILADELPHIA, PENNSYLVANIA.

THE SOLICITATION REQUESTED BIDS FOR 200 AUDIO SINE GENERATORS TO BE IN ACCORDANCE WITH THE BRAND NAME, "MICRODOT, INC., MODEL F 370A OR EQUAL", WITH CERTAIN MINIMUM SALIENT TECHNICAL CHARACTERISTICS TO WHICH ANY OFFERED ITEM MUST COMPLY, AS CITED UNDER NOTE 11, SECTION F, OF THE SOLICITATION, AND CERTAIN OTHER SPECIAL NOTES UNDER THAT SECTION. BIDDERS, EXCEPT FOR THE BRAND NAME FIRM, WERE REQUIRED TO DELIVER A BID SAMPLE PRIOR TO BID OPENING DATE FOR EVALUATION AND TESTING IN ACCORDANCE WITH THE GOVERNMENT'S STATED REQUIREMENTS.

ALTHOUGH FORTY FIRMS WERE SOLICITED, WHEN BIDS WERE OPENED ON DECEMBER 23, 1970, ONLY FOUR FIRMS HAD SUBMITTED BIDS. OF THESE, THE LOWEST BID WAS REJECTED FOR FAILURE TO COMPLY WITH VARIOUS SPECIFICATION REQUIREMENTS, AND THE SECOND LOW BID WAS REJECTED FOR FAILURE TO SUBMIT A BID SAMPLE. BASED UPON A REPORT DATED FEBRUARY 3, 1971, FROM THE CHIEF OF THE TEST EQUIPMENT AND POWER SERVICE DIVISION AT FORT MONMOUTH, NEW JERSEY, TO THE EFFECT THAT HOLT'S BID, OFFERING ITS MODEL 409-1, MET ALL OF THE REQUIREMENTS OF THE SOLICITATION, THE CONTRACTING OFFICER MADE THE AWARD TO THAT FIRM ON MARCH 15, 1971, AS THE LOW RESPONSIVE, RESPONSIBLE BIDDER. AS DISCUSSED BELOW, IT WAS LATER REVEALED THAT THE REFERENCED REPORT CONCERNING THE CONFORMITY OF HOLT'S ITEM WAS IN ERROR. FOLLOWING YOUR INITIAL PROTEST ON BEHALF OF MICRODOT ON MARCH 17, 1971, HOLT AGREED TO A NO-COST SUSPENSION OF WORK ON THE CONTRACT UNTIL APRIL 30, 1971. IS REPORTED THAT A UNILATERAL STOP-WORK ORDER WAS ISSUED BY THE DEPARTMENT OF THE ARMY ON MAY 3, 1971, PENDING A RESOLUTION OF THE PROTEST.

THE BASIS OF YOUR PROTEST IS THAT HOLT'S MODEL 409-1 WEIGHED MORE THAN 45 POUNDS, WHICH IS IN EXCESS OF THE UNIT WEIGHT OF APPROXIMATELY 25 POUNDS SET FORTH IN NOTE 11(11) OF SECTION F AS A MINIMUM SALIENT TECHNICAL CHARACTERISTIC.

AFTER RECEIPT OF YOUR PROTEST, IT WAS REPORTED BY THE COGNIZANT ENGINEERING OFFICE THAT WHILE HOLT'S SAMPLE WEIGHED 47 POUNDS, THIS DEVIATION WAS CONSIDERED MINOR SINCE THEIR SAMPLE INCLUDED POTTED TRANSFORMERS, WHICH ADDED CONSIDERABLE WEIGHT. SINCE OPEN TYPE TRANSFORMERS CAN BE USED IN NORMAL PRODUCTION WITHOUT ADDITIONAL ENGINEERING, IT WAS FELT THAT HOLT'S PRODUCTION UNIT WOULD MEET THE WEIGHT REQUIREMENTS OF THE INVITATION. IT IS NOTED, HOWEVER, THAT THE SAMPLE WAS REQUIRED TO BE AN OPERATING MODEL OF THE EQUIPMENT THE CONTRACTOR PROPOSED TO FURNISH. SINCE THE RECORD DOES NOT INDICATE THAT HOLT INTENDED TO SUPPLY A UNIT DIFFERENT FROM THE SAMPLE, IT IS DOUBTFUL THAT SUCH FIRM COULD BE REQUIRED UNDER ITS CONTRACT TO SUPPLY PRODUCTION UNITS MEETING THE WEIGHT SPECIFICATION.

THE CONTRACTING OFFICER IS NOW OF THE OPINION THAT AN IMPROPER AWARD WAS MADE TO HOLT BECAUSE ITS BID SAMPLE EXCEEDED THE APPROXIMATE WEIGHT SET FORTH IN THE TECHNICAL SALIENT CHARACTERISTICS, AND THAT A MISTAKE WAS MADE IN ACCEPTING THE NONRESPONSIVE BID SUBMITTED BY HOLT. ALTHOUGH HE RECOMMENDS THAT THE AWARD TO HOLT BE CANCELLED, THE CONTRACTING OFFICER IS OF THE VIEW THAT AWARD SHOULD NOT BE MADE TO MICRODOT INASMUCH AS MICRODOT'S SAMPLE, ALBEIT THE BRAND NAME, ALSO DOES NOT MEET THE REQUIREMENTS OF THE SOLICITATION BECAUSE OF THE FOLLOWING INCONSISTENCIES BETWEEN THE SOLICITATION CHARACTERISTICS AND MICRODOT'S SAMPLE MODEL:

SOLICITATION MICRODOT, INC.

HEIGHT - 12-3/4 OR - 1.0 IN.) 5.22 IN.

DEPTH - 15-1/2 OR - 1.0 IN.) APPROXIMATE 13 IN.

WIDTH - 20-3/4 OR - 1.0 IN.) 17 IN.

IT IS REPORTED THAT THE DIMENSIONS OUTLINED IN THE SOLICITATION REPRESENT THOSE OF A HEWLETT-PACKARD COMPANY TUBE VERSION GENERATOR (AS OPPOSED TO A SOLID STATE TYPE) WHICH WAS PROCURED SOLE SOURCE FROM THAT FIRM PRIOR TO A 1968 AWARD TO DATA ROYAL COMPANY WHOSE GENERATOR LINE WAS SUBSEQUENTLY PURCHASED BY MICRODOT. THE WEIGHT OF THE HEWLETT PACKARD TUBE TYPE GENERATOR HAD VARIED FROM 56 TO 65 POUNDS, AND THE SPECIFICATIONS PRIOR TO THE 1968 AWARD TO DATA ROYAL STIPULATED A WEIGHT OF 65 POUNDS. DATA ROYAL DELIVERED UNDER THE 1968 CONTRACT A SOLID STATE TYPE UNIT WHICH WEIGHED 25 POUNDS AND SUBSEQUENTLY THE ARMY CHANGED THE WEIGHT REQUIREMENTS IN THE SPECIFICATIONS TO READ "25 POUNDS APPROXIMATE" BUT DID NOT CHANGE THE DIMENSIONS TO CORRESPOND WITH A SOLID STATE TYPE GENERATOR.

THE CONTRACTING OFFICER HAS THEREFORE CONCLUDED THAT THE SOLICITATION MUST BE CONSIDERED DEFECTIVE, AND THAT IT DOES NOT STATE THE ACTUAL MINIMUM NEEDS OF THE GOVERNMENT SINCE EITHER A SOLID STATE OR TUBE TYPE UNIT, WHICH DOES NOT EXCEED 56 POUNDS AND THE DIMENSIONS SET OUT IN THE SOLICITATION, IS ACCEPTABLE TO THE GOVERNMENT. IN THIS REGARD, THE ADMINISTRATIVE REPORT TO OUR OFFICE OBSERVES THAT HEWLETT-PACKARD AND AT LEAST ONE OTHER SUPPLIER WHO HAD PREVIOUSLY FURNISHED A TUBE TYPE GENERATOR WERE PRECLUDED FROM OFFERING A TUBE TYPE GENERATOR ON THE SUBJECT INVITATION BECAUSE OF THE 25-POUND WEIGHT LIMITATION OF THE SOLICITATION, SINCE SUCH LIMITATION PERMITTED THE FURNISHING OF UNITS ONLY OF A SOLID STATE DESIGN. HOWEVER, IT IS ALSO REPORTED THAT THE ITEM AS SOLICITED FAILS TO MEET THE ACTUAL NEEDS OF THE GOVERNMENT IN THAT ENVIRONMENTAL PERFORMANCE REQUIREMENTS DEEMED NECESSARY TO ASSURE SUITABILITY OF THE ITEM FOR ISSUE WERE NOT INCLUDED THEREIN.

IN VIEW OF THE TECHNICAL REQUIREMENTS NOW DETERMINED TO BE NECESSARY TO MEET THE ACTUAL NEEDS OF THE GOVERNMENT, THE CONTRACTING OFFICER IS OF THE OPINION THAT THE BID SAMPLE PROVISION SHOULD NOT HAVE BEEN UTILIZED IN THE SOLICITATION, AS THE DESIRED PRODUCT CAN BE ADEQUATELY DEFINED USING A DETAILED PURCHASE DESCRIPTION WHICH WOULD INCLUDE THE NECESSARY ENVIRONMENTAL PERFORMANCE REQUIREMENTS NOT PRESENT IN THE CURRENT SOLICITATION. IT IS CONSIDERED THAT THIS METHOD WOULD ASSURE A MAXIMUM AMOUNT OF COMPETITION SINCE IT WOULD OFFER A COMPETITIVE OPPORTUNITY TO THOSE COMPANIES WHICH POSSESS THE NECESSARY ENGINEERING CAPABILITY TO PRODUCE THE EQUIPMENT BUT ARE NOT IN A POSITION TO FABRICATE AND SUBMIT A BID SAMPLE WITHIN THE ALLOWABLE SOLICITATION PERIOD.

IN VIEW OF THE FOREGOING FACTORS, IT IS THE POSITION OF THE DEPARTMENT OF THE ARMY THAT THE PROPER ACTIONS TO TAKE IN THIS CASE ARE TO CANCEL THE AWARD MADE TO HOLT, AND TO RESOLICIT THE PROCUREMENT UNDER REVISED SPECIFICATIONS WHICH WILL ASSURE FULL AND FREE COMPETITION AND, AT THE SAME TIME, ASSURE THAT THE GOVERNMENT PROCURES EQUIPMENT ON A BASIS WHICH WILL NOT EXCEED ITS ACTUAL MINIMUM NEEDS.

YOU CONTEND THAT THE CONTRACT SHOULD BE AWARDED TO MICRODOT AND THAT A RESOLICITATION WOULD BE PREJUDICIAL TO THE COMPETITIVE SYSTEM AND CONTRARY TO OUR DECISION REPORTED AT 49 COMP. GEN. 211 (1969). HOLT ADMITS THAT IN RETROSPECT THE SOLICITATION COULD HAVE BEEN MORE CLEARLY WRITTEN, SIMPLIFIED AND LESS AMBIGUOUS, AND THAT ANY PROTEST PREDICATED UPON A DEFECTIVE INVITATION RATHER THAN THE ISSUE OF RESPONSIVENESS OF ANOTHER BIDDER, SUBMITTED WITHIN A REASONABLE TIME AFTER ISSUANCE OF THE INVITATION, WOULD "BEAR SOME MERIT WORTHY OF CONSIDERATION." HOWEVER, HOLT CONTENDS THAT THE DISPUTE CENTERS AROUND COMPLIANCE WITH A TECHNICAL SPECIFICATION (WHICH IT ARGUES IT MET), NOT A POINT OF LAW, AND THAT THE DECISION ON RESPONSIVENESS, IN THIS CASE, IS A TECHNICAL DECISION, NOT A LEGAL ONE. HOLT ALSO ASSERTS THAT A PROVISION FOR SUBMISSION OF A BID SAMPLE IMPLIES THAT THE SALIENT SPECIFICATIONS WERE ONLY GUIDELINES, WHILE SUITABILITY OF THE PRODUCT OFFERED TO THE GOVERNMENT'S REQUIREMENTS WAS TO BE DETERMINED BY THE BID SAMPLE EVALUATION.

WE BELIEVE THE POINT IS WELL SETTLED THAT, EVEN WHEN TECHNICAL DETERMINATIONS ARE INVOLVED, THE QUESTION OF THE RESPONSIVENESS OF A BID IS A MATTER OF LAW. THERE IS NO REFUTATION OF THE FACT THAT NEITHER MICRODOT NOR HOLT'S UNITS COMPLIED WITH ALL OF THE SALIENT PHYSICAL CHARACTERISTICS OF THE SOLICITATION AS WRITTEN AND, AS SUCH, WERE NONRESPONSIVE TO THOSE STATED MATERIAL REQUIREMENTS. ALSO, WE DO NOT AGREE WITH HOLT'S CONTENTION THAT A REQUIREMENT FOR BID SAMPLES CONVERTS SPECIFICATIONS STATED AS ESSENTIAL CHARACTERISTICS TO MERE GUIDELINES. THIS CONNECTION, SECTION C.30(C) PROVIDED: "PRODUCTS DELIVERED UNDER ANY RESULTING CONTRACT SHALL CONFORM TO THE APPROVED SAMPLE AS TO THE CHARACTERISTICS LISTED FOR TEST OR EVALUATION AND SHALL CONFORM TO THE SPECIFICATIONS AS TO ALL OTHER CHARACTERISTICS."

CONCERNING HOLT'S ARGUMENT THAT WEIGHT OF THE TRANSFORMER WAS NOT CRITICAL, WE THINK IT SUFFICIENT TO OBSERVE THAT THE SPECIFIED WEIGHT WAS LISTED AS A SALIENT CHARACTERISTIC, EVEN THOUGH IT WAS LATER DISCOVERED THAT SUCH STATED WEIGHT REQUIREMENT WAS IN ERROR AND DID NOT REFLECT AN ACTUAL NEED OF THE GOVERNMENT. IN THIS REGARD, TUBE TYPE GENERATORS COULD NOT MEET THE WEIGHT REQUIREMENT OF THE GOVERNMENT, AS SOLICITED. CONSEQUENTLY, WE FEEL THAT FULL AND FREE COMPETITION WAS NOT OBTAINED SINCE THE SPECIFICATION REQUIREMENT, THAT THE UNIT WEIGH APPROXIMATELY 25 POUNDS, COULD HAVE DETERRED AT LEAST THE TWO PRIOR SUPPLIERS OF TUBE TYPE UNITS FROM COMPETING FOR THE INSTANT PROCUREMENT.

WE BELIEVE THE PRESENT CASE CAN BE DISTINGUISHED FROM 49 COMP. GEN. 211, WHICH YOU CITE TO SUPPORT AN AWARD TO MICRODOT WITHOUT RESOLICITATION. THAT DECISION WE INDICATED THAT CANCELLATION OF AN INVITATION WAS PROPER WHEN AN AWARD UNDER THE ORIGINAL SPECIFICATION WOULD NOT SERVE THE GOVERNMENT'S ACTUAL NEEDS. IN THIS CASE, THE AGENCY HAS DETERMINED THAT THE ITEM AS SOLICITED FAILS TO MEET THE ACTUAL NEEDS OF THE GOVERNMENT, SINCE THE SPECIFICATIONS DO NOT INCLUDE THE NECESSARY ENVIRONMENTAL PERFORMANCE REQUIREMENTS. ACCORDINGLY, CANCELLATION OF THE INVITATION UNDER SUCH CIRCUMSTANCES WOULD NOT SEEM CONTRARY TO THE CITED DECISION.

BRAND NAME OR EQUAL PROCUREMENTS ARE OFTEN TROUBLESOME AND ARE DOUBLY SO WHEN, AS HERE, THE GOVERNMENT DOES NOT ACCURATELY DETAIL THOSE CHARACTERISTICS OF THE BRAND NAME ITEM WHICH ARE CONSIDERED TO BE REQUIRED TO MEET THE MINIMUM NEEDS OF THE GOVERNMENT, SO THAT EVEN THE BRAND NAME PRODUCT DOES NOT MEET THE REQUIREMENTS. WE HAVE HELD THAT IF THE CITED SALIENT CHARACTERISTICS ARE NOT MATERIAL, THE BRAND NAME OR EQUAL SOLICITATION MUST BE CONSIDERED AS UNDULY RESTRICTIVE. 44 COMP. GEN. 302 (1964). IT FOLLOWS THAT SPECIFICATIONS WHICH ARE FOUND TO BE UNDULY RESTRICTIVE OF COMPETITION, ARE LEGALLY DEFECTIVE, AND THE PROPER COURSE TO FOLLOW IN THAT TYPE OF CASE IS TO READVERTISE ON THE BASIS OF SPECIFICATIONS WHICH SET OUT THE ACTUAL NEEDS OF THE GOVERNMENT, AND WHICH WILL THEREFORE PERMIT THE BROADEST FIELD OF COMPETITION. 33 COMP. GEN. 567 (1954). THUS WE SAID IN 41 COMP. GEN. 348, 351 (1961):

"THE ADVERTISING STATUTES HAVE CONSISTENTLY BEEN HELD TO REQUIRE THAT EVERY EFFORT SHOULD BE MADE BY THE PROCUREMENT AGENCIES *** TO STATE SPECIFICATIONS IN TERMS THAT WILL PERMIT THE BROADEST FIELD OF COMPETITION WITHIN THE NEEDS REASONABLY REQUIRED, NOT THE MAXIMUM DESIRED. *** "

ACCORDINGLY, WE CONCUR WITH THE ACTION, AS PROPOSED BY THE DEPARTMENT OF THE ARMY, TO CANCEL THE AWARD TO HOLT AND READVERTISE THE PROCUREMENT UNDER SPECIFICATIONS WHICH CORRECTLY REFLECT THE DEPARTMENT'S ACTUAL NEEDS. YOUR PROTEST ON BEHALF OF MICRODOT MUST THEREFORE BE DENIED.