B-173422, NOV 15, 1971

B-173422: Nov 15, 1971

Additional Materials:

Contact:

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

 

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

NEGOTIATIONS WERE CONDUCTED SOLELY WITH HOL-GAR IN ACCORDANCE WITH DETERMINATION AND FINDINGS OF ASSISTANT SECRETARY OF THE NAVY UNDER 10 U.S.C. 2304(A)(13) THAT SOLE-SOURCE PROCUREMENT WAS NECESSARY FOR STANDARDIZATION AND INTERCHANGEABILITY OF PARTS. ABSENT A SHOWING THAT SUCH A DETERMINATION WAS MADE WITHOUT SUBSTANTIAL EVIDENCE. WILL NOT QUESTION AWARD UNDER 10 U.S.C. 2304(A)(13). THE PROCUREMENT WAS FOR 61 30-KW. NEGOTIATIONS WERE CONDUCTED SOLELY WITH HOL-GAR IN ACCORDANCE WITH THE DETERMINATION AND FINDINGS OF THE ASSISTANT SECRETARY OF THE NAVY MADE UNDER 10 U.S.C. 2304(A)(13) THAT THE HOL-GAR MODEL GENERATOR SET WAS NECESSARY FOR STANDARDIZATION AND INTERCHANGEABILITY OF PARTS. THESE NEGOTIATIONS WERE CONDUCTED EVEN THOUGH BOGUE ELECTRIC MANUFACTURING COMPANY (BOGUE) SUBMITTED AN OFFER ON THE PROCUREMENT.

B-173422, NOV 15, 1971

CONTRACTS - SOLE-SOURCE PROCUREMENT FOR STANDARDIZATION AND INTERCHANGEABILITY OF PARTS DECISION DENYING PROTEST OF BOGUE ELECTRIC MANUFACTURING COMPANY AGAINST A SOLE-SOURCE PROCUREMENT FROM HOL-GAR DIVISION OF YARDLEY ELECTRIC CORPORATION UNDER RFP ISSUED BY DEFENSE SUPPLY AGENCY, DEFENSE SUPPLY CENTER, RICHMOND, VIRGINIA, FOR DIESEL ENGINE DRIVEN GENERATORS. NEGOTIATIONS WERE CONDUCTED SOLELY WITH HOL-GAR IN ACCORDANCE WITH DETERMINATION AND FINDINGS OF ASSISTANT SECRETARY OF THE NAVY UNDER 10 U.S.C. 2304(A)(13) THAT SOLE-SOURCE PROCUREMENT WAS NECESSARY FOR STANDARDIZATION AND INTERCHANGEABILITY OF PARTS. ABSENT A SHOWING THAT SUCH A DETERMINATION WAS MADE WITHOUT SUBSTANTIAL EVIDENCE, THE COMP. GEN. WILL NOT QUESTION AWARD UNDER 10 U.S.C. 2304(A)(13).

TO BOGUE ELECTRIC MANUFACTURING COMPANY:

WE REFER TO YOUR LETTER OF AUGUST 31, 1971, AND PRIOR CORRESPONDENCE, PROTESTING AGAINST A SOLE-SOURCE PROCUREMENT FROM THE HOL-GAR DIVISION OF THE YARDNEY ELECTRIC CORPORATION (HOL-GAR), UNDER REQUEST FOR PROPOSALS (RFP) DSA-400-71-R-4314, ISSUED BY THE DEFENSE SUPPLY AGENCY, DEFENSE GENERAL SUPPLY CENTER, RICHMOND, VIRGINIA.

THE PROCUREMENT WAS FOR 61 30-KW., SKID-MOUNTED, 60/50 CYCLE, DIESEL ENGINE DRIVEN GENERATOR SETS, HOL-GAR MODEL CE301 AL/WK1, TO BE IN ACCORDANCE WITH THE CLASS 2 UTILITY REQUIREMENTS DESIGNATED IN MIL-STD 1332. NEGOTIATIONS WERE CONDUCTED SOLELY WITH HOL-GAR IN ACCORDANCE WITH THE DETERMINATION AND FINDINGS OF THE ASSISTANT SECRETARY OF THE NAVY MADE UNDER 10 U.S.C. 2304(A)(13) THAT THE HOL-GAR MODEL GENERATOR SET WAS NECESSARY FOR STANDARDIZATION AND INTERCHANGEABILITY OF PARTS. THESE NEGOTIATIONS WERE CONDUCTED EVEN THOUGH BOGUE ELECTRIC MANUFACTURING COMPANY (BOGUE) SUBMITTED AN OFFER ON THE PROCUREMENT. ONLY BOGUE AND HOL -GAR RESPONDED TO THE SOLICITATION. DUE TO THE EXIGENCY OF THE PROCUREMENT, PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2- 407.8(B)(3), AWARD OF THE CONTRACT WAS MADE TO HOL GAR ON JULY 19, 1971, WHILE THE PROTEST WAS PENDING.

YOU PROTESTED THE SOLE-SOURCE NEGOTIATION AND AWARD OF THE CONTRACT ON THE GROUNDS THAT YOUR FIRM WAS THE APPARENT LOW BIDDER ON THE PROCUREMENT; THAT THE INFORMATION SHEET ATTACHED TO THE RFP INDICATED THE PROCUREMENT TO BE UNRESTRICTED RATHER THAN SOLE-SOURCE; THAT IT IS UNLIKELY THAT THE HOL-GAR SETS CAN COMPLY WITH SPECIFICATION MIL-STD 1332; AND THAT THE PROCEDURES EMPLOYED BY THE PROCURING AGENCY ABROGATE THE DECISION OF THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA IN SCHOONMAKER V RESOR; BOGUE V RESOR, DOCKET NOS. 24706 AND 24708, DECIDED JUNE 23, 1971, AND OUR DECISIONS B-169205, MAY 22 AND JUNE 23, 1970. YOU ALLEGE THAT THESE DECISIONS HOLD THAT "GENERATOR SETS REQUIRED FOR THE DOD FAMILY ... SHOULD BE PROCURED AS PART OF THE ORIGINAL MULTI-YEAR PACKAGE."

AS REGARDS YOUR CONTENTION THAT BOGUE WAS APPARENT LOW BIDDER UNDER THE RFP, WE HAVE BEEN ADVISED THAT YOU INFORMED THE BUYER BY TELEPHONE ON JUNE 24, 1971, THAT YOU WERE BIDDING ON AN "OR EQUAL BASIS". CONSEQUENTLY, BECAUSE YOU WERE NOT BIDDING TO SUPPLY THE REQUIRED HOL GAR MODEL, YOUR BID WAS NOT CONSIDERED FOR AWARD. THE GOVERNMENT IS NOT REQUIRED TO PURCHASE EQUIPMENT NOT CONFORMING TO THE SPECIFICATIONS GOVERNING THE PROCUREMENT MERELY BECAUSE IT IS OFFERED AT A LOWER PRICE. NOR IS THE GOVERNMENT TO BE PLACED IN THE POSITION OF ALLOWING BIDDERS TO DICTATE SPECIFICATIONS WHICH WILL PERMIT ACCEPTANCE OF EQUIPMENT WHICH DOES NOT REASONABLY MEET THE CONTRACTING AGENCY'S NEEDS. WE THEREFORE CONCLUDE THAT YOUR PROPOSAL WAS PROPERLY REJECTED.

AS TO YOUR OTHER CONTENTIONS, THE RFP CLEARLY INDICATED THAT THE PROCUREMENT WAS NOT "RESTRICTED" TO A SURPLUS LABOR AREA, TO SMALL BUSINESS CONCERNS, OR TO RESTRICTIONS OF A LIKE NATURE. THAT A PROCUREMENT IS NOT SO RESTRICTED, HOWEVER, HAS NO BEARING ON THE DETERMINATION THAT ONLY THE HOL-GAR GENERATOR SET WOULD SATISFY THE GOVERNMENT'S NEEDS IN THIS INSTANCE. SECONDLY, A DETERMINATION WHETHER THE HOL-GAR SETS WILL OR WILL NOT MEET THE REQUIREMENTS OF MIL-STD-1322 IS PRIMARILY THE RESPONSIBILITY OF THE PROCURING ACTIVITY, AND SUCH DETERMINATION WILL NOT BE QUESTIONED EXCEPT WHEN NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. B-170636, NOVEMBER 10, 1970, AND FEBRUARY 17, 1971. WE FIND NO BASIS ON THE PRESENT RECORD TO CONCLUDE THAT A DETERMINATION THAT THE HOL-GAR SETS DO MEET THE REQUIREMENTS OF THE SPECIFICATION WOULD BE UNWARRANTED. FINALLY, AS TO YOUR CONTENTION THAT THE PRESENT PROCUREMENT IS CONTRARY TO THE CITED DECISIONS OF THE COURT OF APPEALS AND OUR OFFICE, WE NOTE THAT THE HOLDINGS FOUND THEREIN HAVE NO BEARING WHATSOEVER IN THIS INSTANCE AS THOSE DECISIONS CONSIDERED ONLY THE EFFECT OF DEFECTS IN A SPECIFIC INVITATION FOR BIDS AND REACHED NO CONCLUSIONS WITH RESPECT TO THE MANNER IN WHICH GENERATOR SETS IN GENERAL SHOULD BE PROCURED.

SECTION 2304(A)(13) OF TITLE 10, U.S.C. AUTHORIZES THE HEAD OF AN AGENCY TO NEGOTIATE A CONTRACT IF THE PURCHASE "IS FOR EQUIPMENT THAT HE DETERMINES TO BE TECHNICAL EQUIPMENT WHOSE STANDARDIZATION AND THE INTERCHANGEABILITY OF WHOSE PARTS ARE NECESSARY IN THE PUBLIC INTEREST, AND WHOSE PROCUREMENT BY NEGOTIATION IS NECESSARY TO ASSURE THAT STANDARDIZATION AND INTERCHANGEABILITY *** ." THE FINDING BY THE ASSISTANT SECRETARY IN THE PRESENT CASE IN SUPPORT OF HIS DETERMINATION TO NEGOTIATE CLEARLY ILLUSTRATES THE CONDITIONS OF 10 U.S.C. 2304(A)(13) QUOTED ABOVE. THAT FINDING IS MADE FINAL BY 10 U.S.C. 2310.

OUR OFFICE HAS BEEN ADVISED THAT THE DECISION TO STANDARDIZE UNDER THE PROVISION OF 10 U.S.C. 2304(A)(13) WAS MADE SO AS TO MATERIALLY REDUCE THE QUANTITY OF SPARE AND REPAIR PARTS REQUIRED TO BE CARRIED, WHICH WILL RESULT IN SAVINGS IN TIME, MANPOWER, STORAGE SPACE, AND COSTS; TO FACILITATE REPAIR AND MAINTENANCE THROUGH INTERCHANGEABILITY OF PARTS AND THE POSSIBLE CANNIBALIZATION OF DAMAGED EQUIPMENT; TO MAKE EASIER THE TRAINING OF OPERATING AND MAINTENANCE PERSONNEL; AND TO INSURE THE READINESS, MAINTAINABILITY, AND RELIABILITY OF THE EQUIPMENT. THESE CONSIDERATIONS ARE IN ACCORDANCE WITH ASPR 3-213.2. THEREFORE, WE CONCLUDE THAT THE PRESENT PROCUREMENT WAS IN CONFORMITY WITH THE APPLICABLE LAW AND REGULATIONS. SEE B-163382, MARCH 21, 1968, AND B- 167049(1) AND (2), SEPTEMBER 3, 1969.

ACCORDINGLY, THE PROTEST IS DENIED.