B-173196(1), B-174035(1), DEC 8, 1971

B-173196(1),B-174035(1): Dec 8, 1971

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WHILE IT IS AGREED THAT HYFORE MANUFACTURING COMPANY AND NASCO ENGINEERING COMPANY WERE ORIGINALLY QUALIFIED ON THE BASIS OF LESS RIGOROUS TESTING. BOTH HYFORE AND NASCO HAVE QUALIFIED UNDER BOTH VERSIONS OF THE TEST PROGRAM. THE AIR FORCE HAS ADVISED THAT THE REQUIREMENTS OF ASPR 13-105 RELATIVE TO REIMBURSEMENT FOR USE OF GOVERNMENT-OWNED TEST EQUIPMENT WILL BE IMPLEMENTED IN FUTURE QUALIFICATION TESTS. THE PROTEST IS DENIED. RFP -3181 WAS ISSUED ON APRIL 7. P/N 9525598" ON INCREMENTAL BASES: INCREMENTAL QUANTITY "A" WAS 28. INCREMENTAL QUANTITIES "B" AND "C" WERE 22. INCREMENTAL QUANTITY "D" WAS 13. THE DETERMINATION AND FINDINGS CITED 10 U.S.C. 2304(A)(10) AS THE AUTHORITY TO NEGOTIATE THE PROCUREMENT ON THE BASIS THAT COMPETITION WAS PRECLUDED BECAUSE OF THE EXISTENCE OF PATENT RIGHTS.

B-173196(1), B-174035(1), DEC 8, 1971

BID PROTEST - QUALIFICATION PROCEDURES - USE OF GOVERNMENT-OWNED EQUIPMENT DENIAL OF PROTEST BY THE GOODYEAR TIRE & RUBBER COMPANY AGAINST THE AWARD OF A CONTRACT TO ANY OTHER FIRM UNDER TWO RFPS ISSUED BY THE OGDEN AIR MATERIEL AREA, HILL AFB, UTAH. WHILE IT IS AGREED THAT HYFORE MANUFACTURING COMPANY AND NASCO ENGINEERING COMPANY WERE ORIGINALLY QUALIFIED ON THE BASIS OF LESS RIGOROUS TESTING, THAT FAULT HAS BEEN CORRECTED BY IMPOSING A TEST STANDARD AS RIGID AS THAT IMPOSED ON THE ORIGINAL VENDOR (GOODYEAR). FURTHERMORE, BOTH HYFORE AND NASCO HAVE QUALIFIED UNDER BOTH VERSIONS OF THE TEST PROGRAM. SINCE THE FREE USE OF GOVERNMENT-OWNED TEST EQUIPMENT OCCURRED UNDER A NOW COMPLETED CONTRACT, NO BASIS EXISTS TO IMPOSE A CHARGE ON HYFORE AND NASCO. HOWEVER, THE AIR FORCE HAS ADVISED THAT THE REQUIREMENTS OF ASPR 13-105 RELATIVE TO REIMBURSEMENT FOR USE OF GOVERNMENT-OWNED TEST EQUIPMENT WILL BE IMPLEMENTED IN FUTURE QUALIFICATION TESTS. ACCORDINGLY, THE PROTEST IS DENIED.

TO THE GOODYEAR TIRE & RUBBER COMPANY:

WE REFER TO YOUR LETTERS OF JUNE 10, 1971, AND SEPTEMBER 7, 1971, AND SUBSEQUENT CORRESPONDENCE, PROTESTING AWARD OF A CONTRACT TO ANOTHER FIRM UNDER REQUESTS FOR PROPOSALS (RFP) F42600-71-R-3181 AND F42600-72 14200, ISSUED BY THE OGDEN AIR MATERIEL AREA (OOAMA), HILL AIR FORCE BASE, UTAH.

RFP -3181 WAS ISSUED ON APRIL 7, 1971, SOLICITING PROPOSALS BY MAY 6, 1971, FOR FEDERAL STOCK NUMBER (FSN) "16302262373, WEAR PAD, P/N 9525598" ON INCREMENTAL BASES: INCREMENTAL QUANTITY "A" WAS 28,720 UNITS, INCREMENTAL QUANTITIES "B" AND "C" WERE 22,126 UNITS, AND INCREMENTAL QUANTITY "D" WAS 13,188 UNITS. THE PART NUMBER REFERS TO THE GOODYEAR TIRE AND RUBBER COMPANY (GOODYEAR) PART DESIGN AS LISTED IN THE DEPARTMENT OF DEFENSE, USAF FEDERAL SUPPLY CATALOG, MASTER CROSS REFERENCE LIST. THE RFP CONTAINED AN OPTION PROVISION FOR ADDITIONAL QUANTITIES NOT TO EXCEED 200 PERCENT OF INCREMENT "A".

THE DETERMINATION AND FINDINGS CITED 10 U.S.C. 2304(A)(10) AS THE AUTHORITY TO NEGOTIATE THE PROCUREMENT ON THE BASIS THAT COMPETITION WAS PRECLUDED BECAUSE OF THE EXISTENCE OF PATENT RIGHTS, COPYRIGHTS, SECRET PROCESSES, CONTROL OF BASIC RAW MATERIAL, OR SIMILAR CIRCUMSTANCES.

PROPOSALS WERE SENT TO THREE FIRMS LISTED WITH THE AIR FORCE AS QUALIFIED TO MANUFACTURE THIS PART: GOODYEAR, HYFORE MANUFACTURING COMPANY (HYFORE), AND NASCO ENGINEERING COMPANY (NASCO). ALL OFFERORS SUBMITTED PROPOSALS TIMELY. THEREAFTER, ON JULY 11, 1971, THE PURCHASE REQUEST WAS AMENDED TO CREATE AN URGENT PRIORITY BECAUSE THE AIR FORCE STOCK OF THESE WEAR PADS WAS PROJECTED FOR DEPLETION IN SEPTEMBER 1971, WHICH REPORTEDLY WOULD NECESSITATE F-4 AIRCRAFT GROUNDING. THIS DETERMINATION WAS SUPPORTED BY A CERTIFICATE OF URGENCY FROM THE DEPUTY CHIEF, LANDING GEAR, TNR EQUIPMENT, IM DIVISION, DIRECTORATE, MATERIEL MANAGEMENT. CONSEQUENTLY, OUR OFFICE WAS NOTIFIED ON SEPTEMBER 7, 1971, THAT DUE TO THE URGENCY OF THE REQUIREMENT, AWARD OF INCREMENT "A" WAS MADE TO NASCO AT $.275 PER WEAR PAD, NOTWITHSTANDING THE PENDENCY OF THE PROTEST WITH OUR OFFICE. SEE ASPR 2-407.9(B)(3).

RFP -14200 ALSO WAS NEGOTIATED PURSUANT TO 10 U.S.C. 2304(A)(10), BUT ORAL OFFERS WERE SOLICITED FROM GOODYEAR, HYFORE AND NASCO ON SEPTEMBER 3, 1971, PURSUANT TO ASPR 3-501(D)(2). WE NOTE, HOWEVER, THAT ALTHOUGH ASPR 3-501(D)(2) REQUIRES PRIOR APPROVAL AT A LEVEL HIGHER THAN THE CONTRACTING OFFICER FOR THIS METHOD OF SOLICITATION, REQUISITE APPROVAL WAS NOT GIVEN UNTIL FIVE DAYS AFTER THE ORAL SOLICITATION.

TIMELY OFFERS WERE SUBMITTED BY SEPTEMBER 8, 1971, FROM GOODYEAR ($.62), HYFORE ($.463), AND NASCO ($.282). AWARD WAS MADE ON SEPTEMBER 9, 1971, TO NASCO FOR 9,465 WEAR PADS AT $.282 PER UNIT PURPORTEDLY UNDER THE DETERMINATION OF URGENCY APPROVED UNDER RFP -3181, WHICH URGENCY DETERMINATION, IT IS MAINTAINED, INCLUDED THE QUANTITY UNDER RFP -14200.

THERE IS SOME QUESTION WHETHER OOAMA RECEIVED NOTIFICATION OF THE PROTEST BEFORE AWARD WAS CONSUMMATED. WE HAVE BEEN INFORMED BY THE DIRECTORATE OF PROCUREMENT POLICY THAT OOAMA WAS ORALLY ADVISED OF THE PROTEST ON SEPTEMBER 8, 1971. AND, FROM OUR REVIEW OF THE RECORD, WE FIND NO FACTUAL BASIS FOR OOAMA'S STATEMENT THAT AUTHORIZATION TO PROCEED WITH AWARD UNDER RFP -14200 WAS CONTAINED IN THE AUTHORIZATION TO PROCEED WITH AWARD UNDER RFP -3181. WHILE THE REQUEST FOR AUTHORIZATION TO PROCEED WITH AWARD RELATIVE TO RFP -3181 LISTS THE SAME QUANTITY AS CONTAINED IN RFP -14200 AS UNEXERCISED OPTION AMOUNTS TO BE CONSIDERED IN EVALUATING THE URGENCY OF RFP -3181, THE REQUEST NEVER ALLUDES TO RFP -14200 AND THE TELEGRAM FROM AIR FORCE HEADQUARTERS AUTHORIZING AWARD UNDER RFP -3181 LIKEWISE MAKES NO MENTION OF THE LATTER RFP. ALTHOUGH AWARD TO NASCO WAS MADE WITHOUT THE BENEFIT OF A CERTIFICATE OF URGENCY OR AUTHORIZATION TO PROCEED WITH AWARD NOTWITHSTANDING THE PROTEST, WE VIEW THE DEFICIENCY AS PROCEDURAL. HOWEVER, BY SEPARATE LETTER OF TODAY TO THE SECRETARY OF THE AIR FORCE, WE ARE BRINGING THE MATTER TO HIS ATTENTION FOR CORRECTIVE ACTION.

ALTHOUGH THE MODE OF SOLICITATION DIFFERED BETWEEN THE TWO PROCUREMENTS, THE BASES OF YOUR PROTEST ARE IDENTICAL. YOU MAINTAIN THREE BASIC GROUNDS OF PROTEST: (1) THE QUALIFICATION PROGRAM FOR NEW SOURCES DID NOT CONFORM TO THE REQUIREMENTS OF MILITARY STANDARD (MIL) 5013 AND USAF DRAWING 62J4031; (2) THE QUALIFICATION PROGRAM WAS NOT PROPERLY ADMINISTERED BY THE COGNIZANT TECHNICAL ACTIVITY IN ACCORDANCE WITH AFR 57-6, DEPARTMENT OF DEFENSE, HIGH DOLLAR SPARE PARTS BREAKOUT PROGRAM, MARCH 1969, AND ASPR 9-202.2(G); AND (3) ECONOMIC ADVANTAGES WERE AFFORDED OTHER OFFERORS IN THE FORM OF FREE USE OF GOVERNMENT OWNED TEST EQUIPMENT WHICH WAS DENIED GOODYEAR.

THE ESTABLISHMENT OF TESTING PROCEDURES, IF ANY, TO QUALIFY ADDITIONAL SOURCES TO MANUFACTURE PARTS TO A PRIVATE CONTRACTOR'S DRAWINGS WHICH HAVE BEEN OBTAINED BY THE GOVERNMENT ON A LIMITED RIGHTS BASIS TO INSURE PART SAFETY, DEPENDABILITY, INTERCHANGEABILITY AND SPECIFICATION AND COMPOSITION COMPLIANCE IS WITHIN THE TECHNICAL DISCRETION OF THE ENGINEERING ACTIVITY DELEGATED RESPONSIBILITY OVER A GIVEN PART SO LONG AS THE LIMITED RIGHTS DATA IS NOT IMPROPERLY DIVULGED. IN THIS INSTANCE, THE ACTIVITY RESPONSIBLE FOR PART COMPLIANCE IS THE AERONAUTICS ACQUISITIONS SYSTEMS DIVISION (ASD), THE ACTIVITY ORIGINALLY CHARGED WITH THE RESPONSIBILITY OF DESIGN APPROVAL OF THE BRAKE ASSEMBLIES OF WHICH THE WEAR PADS HERE INVOLVED ARE AN INTEGRAL PART, EVEN THOUGH THE PROCUREMENT ACTIVITY IS OOAMA, HILL AIR FORCE BASE, UTAH.

THE PROCUREMENT OF P/N 9525598 HAD BEEN SOLE SOURCE FROM GOODYEAR UNTIL RFP F42600-70-R-3358 WAS ISSUED ON A COMPETITIVE BASIS IN JULY 1970, FOR A QUANTITY OF 15,253 WEAR PADS. QUALIFICATION APPROVAL WAS GRANTED TO NASCO ON OCTOBER 8, 1970, AND TO HYFORE ON OCTOBER 15, 1970, BY THE CHIEF, AEROSPACE VEHICLE ALIGHTING SYSTEMS BRANCH, SERVICE ENGINEERING DIVISION, DIRECTORATE OF MATERIEL MANAGEMENT, OOAMA. BOTH PARTS WERE DEEMED BY THE TECHNICAL EVALUATORS TO HAVE MET THE REQUIREMENTS OF USAF DRAWING 62J4031. WHILE THE TESTS WERE PERFORMED BY OOAMA, HILL AFB, ASD ACQUIESCED IN THE QUALIFICATION APPROVAL, AT LEAST INITIALLY. CONSEQUENTLY, CONTRACT NO. F42600-71-C-1282 WAS AWARDED TO HYFORE ON OCTOBER 22, 1970, FOR 15,253 UNITS, SUBSEQUENTLY INCREASED BY AN ADDITIONAL 15,253 UNITS BY OPTION EXERCISED ON DECEMBER 22, 1970. GOODYEAR WAS NOTIFIED OF AWARD ON DECEMBER 16, 1970.

ON MAY 27, 1971, HOWEVER, A TWX FROM THE AIR FORCE LOGISTICS COMMAND (AFLC) TO OOAMA INDICATED THAT ASD INTENDED TO WITHDRAW QUALIFICATION GRANTED HYFORE AND NASCO FOR P/N 9525598 ON THE BASIS THAT THE QUALIFICATION PROCEDURES EMPLOYED IN QUALIFYING THOSE FIRMS WERE NOT AS STRINGENT AS THE QUALIFICATION PROCEDURES REQUIRED OF THE ORIGINAL SUPPLIER. THEREAFTER, A MEETING BETWEEN ASD AND OOAMA DURING THE WEEK OF JUNE 7, 1971, PRODUCED CONCURRENCE AS TO THE TESTING NECESSARY TO QUALIFY NEW SOURCES. IT WAS DETERMINED THAT FROM THAT DATE FORWARD ALL PARTS OVER WHICH ASD HAS ENGINEERING TECHNICAL RESPONSIBILITY, SUCH AS P/N 9525598, MUST UNDERGO TESTING EQUAL TO OR GREATER THAN THE QUALIFICATION TESTS REQUIRED OF THE ORIGINAL VENDOR; THAT VENDORS OTHER THAN THE ORIGINAL VENDOR MUST ESTABLISH QUALITY CONTROL AND INSPECTION PROCEDURES EQUAL TO OR GREATER THAN THOSE REQUIRED OF THE ORIGINAL VENDOR, AND THAT QUALIFICATION TESTING MUST NOT BE COMPLEMENTED BY THE USE OF SIMILAR OR LIKE PARTS OF ANOTHER VENDOR OF THE SAME ASSEMBLY. PURSUANT TO THE NEW GUIDELINES, ADDITIONAL TESTS WERE PERFORMED ON THE HYFORE AND NASCO PARTS RESULTING IN THE GRANTING OF CONTINUED QUALIFICATION APPROVAL ON JULY 14, 1971, BEFORE CONTRACTS WERE AWARDED UNDER EITHER OF THE RFPS HERE IN QUESTION, BY THE CHIEF, OPERATIONS AND SUPPORT BRANCH, DIRECTORATE OF MATERIEL MANAGEMENT, ON THE GROUND THAT THOSE PARTS MET THE REQUIREMENTS OF MIL-M-5013E AND MILITARY DRAWING 62J4031.

WHILE IT IS APPARENT THAT THE TESTING PROGRAM TO QUALIFY P/N 9525598 WAS MADE MORE STRINGENT BY THE ACTIONS OUTLINED ABOVE, THE FACT REMAINS THAT THE HYFORE AND NASCO PARTS SUCCESSFULLY COMPLETED QUALIFICATION TESTING UNDER BOTH VERSIONS OF THE TESTING PROGRAM AND THERE ACCORDINGLY WAS NO POINT IN TIME SUBSEQUENT TO INITIAL QUALIFICATION WHEN THOSE FIRMS WERE NOT QUALIFIED IN THE OPINION OF THE COGNIZANT ENGINEERING ACTIVITY. WHILE THE TWX OF MAY 27, 1971, INDICATED AN INTENTION TO WITHDRAW THE HYFORE AND NASCO QUALIFICATION, NO SUCH ACTION WAS EVER CONSUMMATED. FURTHER, EVEN THOUGH THE RIGOROUSNESS OF TESTING HAS BEEN ELEVATED ON THE BASIS OF A TECHNICAL DETERMINATION, SUCH ELEVATION DOES NOT CARRY WITH IT AUTOMATIC REVOCATION OF QUALIFICATIONS PREVIOUSLY DETERMINED TO COMPLY WITH FORMER STANDARDS. IN ANY EVENT, BOTH HYFORE AND NASCO ARE NOW REPORTED TO BE FULLY QUALIFIED TO THE STANDARDS REQUIRED OF THE ORIGINAL VENDOR AND TO THE SATISFACTION OF ASD, WHICH IN THIS CASE, AS STATED ABOVE, IS THE COGNIZANT ENGINEERING ACTIVITY.

CONCERNING YOUR ALLEGATION THAT NEW SOURCES ARE BEING PROVIDED ECONOMIC ADVANTAGES IN THE FORM OF FREE ACCESS TO GOVERNMENT-OWNED TEST FACILITIES, WE HAVE BEEN ADVISED BY THE AIR FORCE THAT THE REQUIREMENTS OF ASPR 13- 105, RELATIVE TO ADEQUATE REIMBURSEMENT COMPARABLE TO COMMERCIAL CHARGES FOR USE OF GOVERNMENT-OWNED TEST FACILITIES, WILL BE IMPLEMENTED IN FUTURE QUALIFICATION TESTS. SINCE THE TESTS OF WHICH YOU COMPLAIN WERE ACCOMPLISHED UNDER CONTRACT F42600-71-C-1282, WHICH HAS BEEN COMPLETED, NO BASIS EXISTS TO IMPOSE SUCH A CHARGE UNDER THAT CONTRACT AT THIS TIME.

YOU ALSO ALLEGE THAT THE APPLICABLE SECTIONS OF AFR 57-6, CONCERNING THE PREPARATION OF A DATA PACKAGE, WERE NOT MET. SPECIFICALLY, YOU CONTEND THAT THE REQUIREMENTS CONCERNING REVERSE ENGINEERING BY THE GOVERNMENT WERE CIRCUMVENTED. HOWEVER, BY REPORT DATED JULY 28, 1971, FROM THE DEPUTY CHIEF OF CONTRACT PLACEMENT, DEPUTY CHIEF OF STAFF, PROCUREMENT, IT IS REPORTED:

" *** WHILE THE CONTRACTORS VERY POSSIBLY DID REVERSE ENGINEER THE ITEMS, THIS WORK WAS NOT DONE BY THE GOVERNMENT NOR DID EITHER HYFORE OR NASCO RECEIVE ANY CONTRACTUAL INSTRUMENT FROM THE AIR FORCE REQUESTING THEM TO REVERSE ENGINEER THE ITEM. SINCE NO REVERSE ENGINEERING WAS DONE BY OR CONTRACTED FOR BY THE AIR FORCE, THERE WAS NO NEED TO OBTAIN APPROVAL BY THE HEAD OF THE PROCURING ACTIVITY FOR THE ACTION TAKEN."

FURTHER, IT IS REPORTED THAT SINCE HYFORE AND NASCO REQUESTED THAT THE AIR FORCE TEST THEIR PARTS FOR QUALIFICATION AND "SUBMITTED A COPY OF THE DRAWINGS FROM WHICH THEY PROPOSED TO MANUFACTURE THE HARDWARE ITEMS AND SUBMITTED SUCH ITEMS FOR GOVERNMENT TESTING, IT WAS NOT NECESSARY TO DEVELOP A DATA PACKAGE OR ACCOMPLISH REVERSE ENGINEERING WITHIN THE PURVIEW OF AFR 57-6, SECTION III, PART 2." INASMUCH AS THE SECTIONS OF AFR 57-6 CITED BY YOU DEAL WITH THE QUESTION OF THE ACQUISITION BY THE GOVERNMENT OF SUFFICIENT UNLIMITED RIGHTS DATA TO ENABLE COMPETITIVE PROCUREMENT BY MEANS OF PURCHASE OF UNLIMITED RIGHTS, REVERSE ENGINEERING, ETC., WITH RELATED ANALYSIS OF THE RELATIVE COST TO THE GOVERNMENT OF THE VARIOUS METHODS OF DATA ACQUISITION AVAILABLE, WE AGREE THAT THEY DO NOT APPLY TO A SITUATION, AS HERE, WHERE ADEQUATE UNLIMITED RIGHTS DATA IS OFFERED TO THE GOVERNMENT BY A SOURCE OR SOURCES NOT RELATED TO THE ORIGINAL SUPPLIER.

IN THIS REGARD, IN OUR DECISION 49 COMP. GEN. 471 (1970), WE SPECIFICALLY CONFIRMED THAT THE INTENT OF ASPR 9-203(B) HAS CONTINUOUSLY BEEN TO PERMIT THE GOVERNMENT TO USE LIMITED RIGHTS CONTRACTOR DRAWINGS INTERNALLY FOR COMPARISON PURPOSES TO QUALIFY NEW SOURCES. WE CANNOT CONCLUDE THAT ANY PROPRIETARY RIGHTS OF GOODYEAR HAVE BEEN VIOLATED IN THIS RESPECT.

FINALLY, YOU ALLEGE THAT GOODYEAR DID NOT RECEIVE THE SAME DATA RELATIVE TO THIS PROCUREMENT AS THE OTHER OFFERORS BUT THAT HYFORE AND NASCO RECEIVED ONLY OUTLINE DRAWINGS WITH NO REQUIREMENTS FOR MATERIALS, PROCESSING OR PERFORMANCE. HOWEVER, SINCE HYFORE AND NASCO SUBMITTED THEIR DRAWINGS WHICH WERE DETERMINED TO BE EQUIVALENT TO GOODYEAR'S DRAWINGS AND SUBMITTED ARTICLES FOR QUALIFICATION WHICH WERE ALSO DETERMINED TO BE EQUIVALENT TO GOODYEAR'S ARTICLES, IT CANNOT BE DEMONSTRATED THAT HYFORE OR NASCO WERE COMPETING ON DIFFERENT BASES THAN GOODYEAR. IT APPEARS THAT ALL OFFERS PROPOSED EQUIVALENT PARTS AND WE WILL NOT, THEREFORE, INTERPOSE ANY OBJECTIONS TO THE PROCUREMENT.

ACCORDINGLY, YOUR PROTEST IS DENIED.