B-172702, AUG 26, 1971

B-172702: Aug 26, 1971

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THE NAVIGATION SET UPON WHICH THE INTERCHANGEABILITY REQUIREMENT WAS BASED. BIDS WERE SUBMITTED BY ARVIN INDUSTRIES. WHICH WAS COMPARABLE WITH PRICES PAID TO ARVIN AND REPUBLIC UNDER OTHER CONTRACTS FOR THE SAME EQUIPMENT. 361.00 WAS APPROXIMATELY 50 PERCENT HIGHER THAN THAT WHICH HAD BEEN PAID TO REPUBLIC UNDER THREE SIMILAR CONTRACTS DURING THE LAST TWO YEARS. WE NEED NOT DISCUSS THE MERITS OF THE EPSCO BID BECAUSE IT WAS NOT CONSIDERED FOR AWARD. AS YOU WERE ADVISED BY LETTER OF JULY 16. AFTER A FORMAL DETERMINATION THAT THE ITEMS TO BE PROCURED ARE URGENTLY NEEDED. THE PURPOSE FOR SUPPLYING THE MODEL WAS TO ASSURE THAT THE SUPPLIES FURNISHED WOULD BE INTERCHANGEABLE WITH THE COMPONENTS OF THE NAVIGATION SETS NOW BEING SUPPLIED TO ASO.

B-172702, AUG 26, 1971

BID PROTEST - BID RESPONSIVENESS - INTERCHANGEABILITY REQUIREMENT - WAIVER OF IFB TERMS DENYING PROTEST OF REPUBLIC ELECTRONIC INDUSTRIES CORP. AGAINST THE AWARD OF A CONTRACT TO ARVIN INDUSTRIES UNDER AN IFB ISSUED BY THE NAVY AVIATION SUPPLY OFFICE (ASO) FOR COMPONENTS FOR NAVIGATION SETS. NOTHING IN ARVIN'S BID REVEALS THAT IT WOULD NOT SATISFY THE INTERCHANGEABILITY REQUIREMENT EVEN THOUGH ARVIN DID NOT POSSESS, AT THE TIME IT SUBMITTED ITS BID, THE NAVIGATION SET UPON WHICH THE INTERCHANGEABILITY REQUIREMENT WAS BASED. ASO DID NOT VIOLATE COMPETITIVE BIDDING REGULATIONS BY SENDING ARVIN A MODEL OF THE LATEST DESIGN CONFIGURATION AFTER BIDS HAD BEEN SUBMITTED BECAUSE ARVIN HAD BEEN EXCEPTED FROM RECEIVING THE MODEL ONLY FOR THE CONVENIENCE OF THE GOVERNMENT (BASED ON THE FAULTY BELIEF OF THE CONTRACTING OFFICER THAT ARVIN POSSESSED AN ADEQUATE MODEL). THEREFORE, THE PROVISION OF THE IFB COULD BE WAIVED BY ASO ON ITS OWN VOLITION.

TO REPUBLIC ELECTRONIC INDUSTRIES CORPORATION:

OUR OFFICE HAS CONSIDERED YOUR PROTEST AGAINST THE AWARD OF A CONTRACT UNDER INVITATION FOR BIDS (IFB) N00383-71-B-0742, DATED MARCH 23, 1971, ISSUED BY THE NAVY AVIATION SUPPLY OFFICE (ASO). THE INVITATION REQUESTED BIDS FOR SUPPLYING ELEVEN COMPONENTS AND SPARE PARTS FOR THE AN/ARN-52(V) TACAN NAVIGATION SET. BIDS WERE SUBMITTED BY ARVIN INDUSTRIES, ELECTRONIC SYSTEMS DIVISION (ARVIN), BY REPUBLIC ELECTRONIC INDUSTRIES CORPORATION (REPUBLIC), AND BY EPSCO, INCORPORATED (EPSCO). ARVIN SUBMITTED THE LOW BID OF $1,989,644.76, WHICH WAS COMPARABLE WITH PRICES PAID TO ARVIN AND REPUBLIC UNDER OTHER CONTRACTS FOR THE SAME EQUIPMENT. REPUBLIC'S BID OF $2,763,361.00 WAS APPROXIMATELY 50 PERCENT HIGHER THAN THAT WHICH HAD BEEN PAID TO REPUBLIC UNDER THREE SIMILAR CONTRACTS DURING THE LAST TWO YEARS. WE NEED NOT DISCUSS THE MERITS OF THE EPSCO BID BECAUSE IT WAS NOT CONSIDERED FOR AWARD. AS YOU WERE ADVISED BY LETTER OF JULY 16, 1971, THE NAVY HAS AWARDED THE CONTRACT TO ARVIN PURSUANT TO THE PROVISIONS OF PARAGRAPH 2-407.8(B)(3) OF THE ARMED SERVICES PROCUREMENT REGULATION. THAT SUBSECTION AUTHORIZES THE CONTRACTING OFFICER TO AWARD A CONTRACT, ALTHOUGH A WRITTEN PROTEST AGAINST THE AWARD HAS NOT BEEN RESOLVED, AFTER A FORMAL DETERMINATION THAT THE ITEMS TO BE PROCURED ARE URGENTLY NEEDED.

A PROVISION IN THE INVITATION REQUIRED THAT THE EQUIPMENT COVERED BY THE INVITATION SHOULD 'BE INTERCHANGEABLE WITH UNITS OF A DESIGNATED MODEL OF THE LATEST DESIGN CONFIGURATION PREVIOUSLY MANUFACTURED AND SUPPLIED TO THE GOVERNMENT BY REPUBLIC." THE SOLICITATION ALSO PROVIDED THAT THE GOVERNMENT WOULD FURNISH, UPON REQUEST FROM THE SUCCESSFUL BIDDER, A MODEL OF THE LATEST DESIGN CONFIGURATION OF THE NAVIGATION SET. THE PURPOSE FOR SUPPLYING THE MODEL WAS TO ASSURE THAT THE SUPPLIES FURNISHED WOULD BE INTERCHANGEABLE WITH THE COMPONENTS OF THE NAVIGATION SETS NOW BEING SUPPLIED TO ASO. A NOTE IN THE SOLICITATION EXCEPTED REPUBLIC AND ARVIN FROM RECEIVING THE MODEL AND RELATED TECHNICAL DATA IF EITHER OF THEM SHOULD BECOME THE SUCCESSFUL BIDDER. IN THIS REGARD, THE CONTRACTING OFFICER WAS OF THE OPINION THAT ARVIN AS WELL AS REPUBLIC ALREADY HAD MODELS OF THE MOST RECENT DESIGN CONFIGURATION AND, FOR THAT REASON, THEY BOTH COULD ASSESS THE INTERCHANGEABILITY OF THE COMPONENTS AND SPARE PARTS.

A BRIEF CONSIDERATION OF THE PROCUREMENT HISTORY OF THESE NAVIGATION SETS IS HELPFUL TO AN UNDERSTANDING OF THE PROTEST. IN FEBRUARY OF 1967 ASO AWARDED A 3-YEAR CONTRACT TO ARVIN TO SUPPLY THESE NAVIGATION SETS. THAT TIME, A MODEL OF THE LATEST REPUBLIC DESIGN CONFIGURATION WAS SENT TO ARVIN FOR USE IN SATISFYING THE INTERCHANGEABILITY REQUIREMENT OF THE CONTRACT. IN MAY OF 1968 A SET OF THE LATEST REPUBLIC DRAWINGS FOR THE NAVIGATION SET WAS ALSO SENT TO ARVIN. WHILE ARVIN WAS UNDER THE 3-YEAR CONTRACT TO SUPPLY THE NAVIGATION SETS, REPUBLIC ALSO RECEIVED COMPETITIVE AWARDS OF FOUR CONTRACTS TO SUPPLY EQUIPMENT WHICH WAS ALSO INTERCHANGEABLE WITH THE REPUBLIC MODEL OF THE LATEST DESIGN CONFIGURATION. THE ADMINISTRATIVE REPORT NOTES THAT THREE ENGINEERING CHANGE PROPOSALS WERE APPROVED IN 1967. THE REPORT STATES FURTHER THAT THE CONTRACTING OFFICER WAS UNAWARE THAT EQUIPMENT SUPPLIED BY REPUBLIC WAS NOT INTERCHANGEABLE WITH THE REPUBLIC MODEL SUPPLIED TO ARVIN IN FEBRUARY OF 1967 AND HE CONCLUDED THAT ARVIN ALREADY POSSESSED THE MOST RECENT DESIGN CONFIGURATION. SUBSEQUENT ENGINEERING CHANGE PROPOSALS FROM REPUBLIC HAVE NOT YET BEEN APPROVED BY THE CONTRACTING OFFICER FOR INCORPORATION INTO THE NAVIGATION SETS.

THE ADMINISTRATIVE REPORT INCLUDES A LETTER OF JUNE 4, 1971, FROM REPUBLIC TO THE NAVAL AIR SYSTEMS COMMAND, IN WHICH REPUBLIC DISCUSSED ENGINEERING IMPROVEMENTS IT HAD MADE WHILE MAINTAINING INTERCHANGEABILITY FOR THE 5-YEAR PERIOD FROM 1966. THE LETTER ALSO STATES THAT IN 1970 REPUBLIC OFFERED TO SELL TO THE NAVY DRAWINGS FOR THE LATEST DESIGN CONFIGURATION WHICH INCORPORATED "SIGNIFICANT" IMPROVEMENTS. THE LETTER ALLEGES THAT ASO WAS NOT REQUIRING ARVIN TO MEET THIS LATEST DESIGN CONFIGURATION AND THAT REPUBLIC WAS "REQUIRED TO MEET MUCH MORE STRINGENT REQUIREMENTS." THE LETTER THEN URGES THE NAVY TO REQUIRE ALL SUPPLIERS TO MEET THE SAME STANDARDS FOR THE LATEST DESIGN CONFIGURATION PREPARED BY REPUBLIC AND NOW IN THE NAVY'S POSSESSION.

YET IT APPEARS THAT INTERCHANGEABILITY WAS MAINTAINED FOR THE ENTIRE PERIOD WHETHER OR NOT ARVIN, WHEN IT SUBMITTED ITS PRESENT BID, POSSESSED WHAT REPUBLIC CONSIDERED TO BE ITS LATEST DESIGN CONFIGURATION. REPUBLIC'S LETTER OF JUNE 4, 1971, CONFIRMS THE FACT THAT INTERCHANGEABILITY WAS MAINTAINED. FURTHERMORE, THE ARVIN CONTRACTS FOR REPAIR OF THE NAVIGATION SETS AND ITS REPAIR RECORDS THEMSELVES REQUIRE THE CONCLUSION THAT INTERCHANGEABILITY HAS BEEN MAINTAINED. ARVIN HAS SERVICED AND PROVIDED PARTS FOR ALL NAVIGATION SETS OF THIS TYPE, INCLUDING SETS IDENTIFIED BY SERIAL NUMBERS AS THE MOST RECENT DESIGN CONFIGURATION PRODUCED BY REPUBLIC. ARVIN'S CORRESPONDENCE STRESSES THAT ITS PARTS AND SUBASSEMBLIES WERE COMPLETELY INTERCHANGEABLE AND THAT EACH REPAIR MET ALL MILITARY PERFORMANCE STANDARDS FOR THE EQUIPMENT DURING THE 2-YEAR PERIOD FROM JUNE OF 1969 TO JUNE OF 1971.

THE EVIDENCE PRESENTED LEADS TO THE CONCLUSION THAT ARVIN CAN PRODUCE AND IS ACTUALLY SUPPLYING PARTS FULLY INTERCHANGEABLE FOR ALL NAVIGATION SETS OF THIS TYPE, INCLUDING THOSE MOST RECENTLY MANUFACTURED BY REPUBLIC. BUT IT ALSO APPEARS THAT, WHEN IT SUBMITTED ITS BID UNDER THE PROTESTED IFB, ARVIN DID NOT POSSESS EITHER AN ACTUAL MODEL OR DRAWINGS OF REPUBLIC'S LATEST DESIGN CONFIGURATION WHICH INCORPORATED "SIGNIFICANT" IMPROVEMENTS WHICH, ACCORDING TO REPUBLIC, WOULD IMPROVE THE RELIABILITY OF THE NAVIGATION EQUIPMENT WITHOUT AFFECTING ITS INTERCHANGEABILITY.

THE CONTRACTING OFFICER WROTE TO ARVIN ON JUNE 8, 1971, TO ASSURE THAT ARVIN KNEW THAT THE IFB REQUIRED THAT THE SUCCESSFUL BIDDER MAINTAIN INTERCHANGEABILITY. HE ALSO STATED THAT, NOTWITHSTANDING THE STATEMENT IN THE IFB THAT THE MODEL WOULD NOT BE SENT TO ARVIN, IT WOULD BE NECESSARY FOR THE GOVERNMENT TO FURNISH THE LATEST REPUBLIC DESIGN CONFIGURATION TO ARVIN IF THE CONTRACT WERE AWARDED TO IT. THE CONTRACTING OFFICER ALSO REQUESTED ARVIN TO CONFIRM THAT ITS BID WAS BASED ON PRODUCING COMPONENTS AND PARTS OF THE LATEST DESIGN CONFIGURATION. IN A LETTER RECEIVED BY ASO ON JUNE 18, 1971, ARVIN CONFIRMED THAT ITS BID DID ANTICIPATE SUPPLYING PARTS INTERCHANGEABLE WITH THE LATEST REPUBLIC DESIGN CONFIGURATION. THINK THAT THESE ACTIONS WERE PROPER UNDER THE CIRCUMSTANCES OF THIS PROCUREMENT.

REPUBLIC ASSERTS THAT THERE IS A "SUBSTANTIAL DIFFERENCE" BETWEEN THE REPUBLIC NAVIGATION SET GIVEN TO ARVIN FOR ASSESSMENT OF THE INTERCHANGEABILITY REQUIREMENT UNDER ITS 1967 CONTRACT AND REPUBLIC'S LATEST DESIGN CONFIGURATION. THUS, REPUBLIC ALLEGES THAT ARVIN'S BID IS NOT RESPONSIVE TO THE CURRENT INVITATION BECAUSE, WITHOUT A REPUBLIC MODEL OF THE LATEST DESIGN CONFIGURATION, ARVIN CANNOT SATISFY THE INTERCHANGEABILITY REQUIREMENT, A MATERIAL PART OF THE INVITATION. REPUBLIC ALLEGES THAT ASO GAVE ARVIN AN UNFAIR ADVANTAGE OVER ITS COMPETITORS BY FURNISHING TO ARVIN A REPUBLIC MODEL OF THE LATEST DESIGN CONFIGURATION, CONTRARY TO THE LANGUAGE OF THE SOLICITATION, AND BY GIVING ARVIN AN OPPORTUNITY TO MAKE A SECOND BID BY REQUESTING THAT ARVIN CONFIRM THE BASIS FOR THE PRICE AND DELIVERY OF ITS FIRST BID.

THE ALLEGATION THAT THERE IS A "SUBSTANTIAL DIFFERENCE" BETWEEN THE REPUBLIC MODEL IN ARVIN'S POSSESSION WHEN IT SUBMITTED ITS BID AND REPUBLIC'S LATEST DESIGN CONFIGURATION IS NOT WELL-FOUNDED. THE ADMINISTRATIVE REPORT STATES THAT NO ENGINEERING CHANGE PROPOSALS HAVE BEEN APPROVED FOR THE NAVIGATION SET SINCE 1967. ARVIN RECEIVED A COMPLETE SET OF THE LATEST REPUBLIC DRAWINGS FOR THE NAVIGATION SETS IN MAY OF 1968. ALTHOUGH REPUBLIC CLAIMS TO HAVE MADE MORE RECENT ENGINEERING CHANGES TO IMPROVE THE RELIABILITY OF THE NAVIGATION SET, THE SPECIFICATIONS APPROVED BY ASO HAVE REMAINED THE SAME SINCE 1967. THE IFB REQUIRED THAT THE NAVIGATION SETS CONFORM TO MILITARY SPECIFICATION MIL-N- 22239C, DECEMBER 1, 1967, AND RESERVED TO THE PROCUREMENT OFFICE ALL AUTHORITY CONCERNING ENGINEERING CHANGES.

THE ADMINISTRATIVE AGENCY HAS PRIMARY RESPONSIBILITY FOR DRAFTING SPECIFICATIONS AND DETERMINING WHETHER ARTICLES OFFERED BY THE BIDDER MEET THE SPECIFICATIONS. THE AGENCY SHOULD NOT BE PLACED IN THE POSITION OF ALLOWING BIDDERS TO DICTATE SPECIFICATIONS EITHER MORE OR LESS RESTRICTIVE THAN THOSE ADVERTISED BY THE AGENCY. 36 COMP. GEN. 251, 252 (1956); 48 ID. 306, 308 (1968). FURTHERMORE, REPUBLIC ITSELF, IN A LETTER OF JUNE 4, 1971, AFFIRMS THAT IT HAS MAINTAINED THE INTERCHANGEABILITY OF THE NAVIGATION SETS FOR THE 5-YEAR PERIOD FROM 1966 TO THE PRESENT.

REPUBLIC ASSERTS THAT INTERCHANGEABILITY IS THE MATERIAL ISSUE TO WHICH ARVIN IS NOT RESPONSIVE. BUT THERE WAS NOTHING IN ARVIN'S BID WHICH INDICATED THAT IT WOULD NOT SATISFY THIS MATERIAL REQUIREMENT.

REPUBLIC HAS ALSO ALLEGED THAT ASO VIOLATED COMPETITIVE BIDDING REGULATIONS BY SENDING TO ARVIN, CONTRARY TO THE LANGUAGE OF THE IFB, A MODEL OF THE LATEST DESIGN CONFIGURATION AFTER BIDS HAD BEEN SUBMITTED. THE PROVISION IN THE IFB WHICH EXCEPTED REPUBLIC AND ARVIN FROM RECEIVING MODELS OF THE LATEST DESIGN CONFIGURATION WAS WRITTEN FOR THE CONVENIENCE AND ECONOMY OF THE GOVERNMENT, NOT TO LIMIT THE ABILITY OF EITHER FIRM TO COMPLY WITH THE REQUIREMENTS OF THE IFB. THEREFORE, IT COULD BE WAIVED BY THE AGENCY BY THE ACT OF FURNISHING, ON ITS OWN VOLITION, A MODEL TO ARVIN. WE THINK THAT SUCH ACTION WAS NOT PREJUDICIAL TO ANY OTHER BIDDER OR OTHERWISE AFFECTED THE RESPONSIVENESS OF ARVIN'S BID.

ACCORDINGLY, FOR THE REASONS SET OUT ABOVE, YOUR PROTEST IS DENIED.