B-174482(1), MAR 24, 1972

B-174482(1): Mar 24, 1972

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THERE EXISTS NO BASIS TO QUESTION THE NEGOTIATION OF THIS AWARD SINCE ONLY AEROQUIP WAS ABLE TO FURNISH ITEMS WHICH DID NOT HAVE EXCESSIVE FAILURES. THE SECRETARY OF THE ARMY WILL BE ADVISED THAT. C. BALL COMPANY: FURTHER REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 4. THAT THE BREAKAGE WAS DETERMINED TO BE RELATED TO THE THICKNESS AND THE PLY OF THE BELLOWS' WALL. THE SUBJECT RFP WAS ISSUED TO AEROQUIP CORPORATION PURSUANT TO A DETERMINATION AND FINDINGS WHICH CITED THE PUBLIC EXIGENCY EXCEPTION IN 10 U.S.C. 2304(A)(2) AS THE BASIS FOR NEGOTIATING THE SUBJECT REQUIREMENT. THAT IT WAS PROCEEDING WITH PARTIAL AWARDS FOR 126 OF THE ITEMS. BECAUSE THE ITEMS WERE URGENTLY NEEDED. IT IS THE DEPARTMENT'S POSITION THAT THE DRAWINGS FOR THE PREVIOUS PROCUREMENTS OF THE ASSEMBLIES WERE INADEQUATE AND THE ASSEMBLIES FURNISHED BY CONCERNS OTHER THAN AEROQUIP FAILED EXCESSIVELY.

B-174482(1), MAR 24, 1972

BID PROTEST - PROPRIETY OF SOLE SOURCE PROCUREMENT DECISION DENYING THE PROTEST OF A. C. BALL COMPANY AGAINST AWARD OF A SOLE-SOURCE PROCUREMENT TO THE AEROQUIP CORPORATION UNDER AN RFP ISSUED BY THE ARMY MISSILE COMMAND, REDSTONE ARSENAL, ALABAMA, FOR A BELLOWS ASSEMBLY. THERE EXISTS NO BASIS TO QUESTION THE NEGOTIATION OF THIS AWARD SINCE ONLY AEROQUIP WAS ABLE TO FURNISH ITEMS WHICH DID NOT HAVE EXCESSIVE FAILURES, AND THE URGENCY OF THE REQUIREMENT PRECLUDED THE REVISION OF DRAWINGS TO INCORPORATE A SPECIFICATION FOR WALL THICKNESS. ACCORDINGLY, THE PROTEST MUST BE DENIED. HOWEVER, THE SECRETARY OF THE ARMY WILL BE ADVISED THAT, IN THE OPINION OF THE COMP. GEN., THE PRESENT RECORD DOES NOT JUSTIFY THE ISSUANCE OF SIMILAR SOLE-SOURCE PROCUREMENTS IN THE FUTURE.

TO A. C. BALL COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 4, 1971, IN WHICH YOU PROTEST AGAINST A SOLE-SOURCE PROCUREMENT UNDER REQUEST FOR PROPOSAL (RFP) DAAH01-72-R-0262, ISSUED TO THE AEROQUIP CORPORATION ON OCTOBER 20, 1971, BY THE U.S. ARMY MISSILE COMMAND, REDSTONE ARSENAL, ALABAMA, FOR 252 EACH, BELLOWS ASSEMBLY.

THE DEPARTMENT HAS ADVISED THIS OFFICE THAT THE ITEM IN QUESTION HAS BEEN PREVIOUSLY FURNISHED BY YOUR COMPANY, AEROQUIP, FLEXIBLE METAL HOSE, INC., AND METAL BELLOWS, INC.; THAT EXCESSIVE FAILURES (BREAKAGE) OCCURRED WITH BELLOWS ASSEMBLIES FURNISHED BY OTHER THAN AEROQUIP; THAT THE BREAKAGE WAS DETERMINED TO BE RELATED TO THE THICKNESS AND THE PLY OF THE BELLOWS' WALL; THAT NEITHER THE THICKNESS NOR THE PLY OF THE WALL HAD BEEN SPECIFIED IN PREVIOUS PROCUREMENTS; AND THAT THE SUBJECT REQUIREMENT CARRIED AN 02 PRIORITY UNDER THE UNIFORM MATERIEL MOVEMENT AND ISSUE PRIORITY SYSTEM (UMMIPS). CONSEQUENTLY, THE DEPARTMENT REPORTS IT DETERMINED THAT, PENDING REVISION OF THE DRAWINGS FOR THE ITEM, THE SUBJECT REQUIREMENT SHOULD BE OBTAINED FROM AEROQUIP.

ON OCTOBER 20, 1971, THE SUBJECT RFP WAS ISSUED TO AEROQUIP CORPORATION PURSUANT TO A DETERMINATION AND FINDINGS WHICH CITED THE PUBLIC EXIGENCY EXCEPTION IN 10 U.S.C. 2304(A)(2) AS THE BASIS FOR NEGOTIATING THE SUBJECT REQUIREMENT. ON NOVEMBER 8, 1971, THE CLOSING DATE FOR RECEIPT OF AEROQUIP'S PROPOSAL, THE COMPANY SUBMITTED A PRICE OF $12,846.96 FOR THE REQUIREMENT.

ON DECEMBER 13, 1971, AND FEBRUARY 8, 1972, THE DEPARTMENT ADVISED THIS OFFICE, IN ACCORDANCE WITH ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2- 407.8(B)(2), THAT IT WAS PROCEEDING WITH PARTIAL AWARDS FOR 126 OF THE ITEMS, NOTWITHSTANDING THE PENDING PROTEST, BECAUSE THE ITEMS WERE URGENTLY NEEDED.

YOU STATE THAT YOUR CONCERN PREVIOUSLY SUPPLIED BELLOWS ASSEMBLIES IN ACCORDANCE WITH ALL THE SPECIFICATIONS SET FORTH BY THE DEPARTMENT AND, THEREFORE, THE PRESENT REQUIREMENT, AS WELL AS FUTURE REQUIREMENTS, FOR THE ASSEMBLIES SHOULD BE PROCURED ON A COMPETITIVE BASIS.

AS NOTED ABOVE, IT IS THE DEPARTMENT'S POSITION THAT THE DRAWINGS FOR THE PREVIOUS PROCUREMENTS OF THE ASSEMBLIES WERE INADEQUATE AND THE ASSEMBLIES FURNISHED BY CONCERNS OTHER THAN AEROQUIP FAILED EXCESSIVELY. IN THIS REGARD, THE DEPARTMENT HAS SUBMITTED THE FOLLOWING ANALYSIS AND PROCUREMENT HISTORY OF THE ITEMS:

"THERE IS PRESENTLY 2 BELLOWS ASSEMBLIES AT THIS COMMAND WHICH HAVE FAILED, AND THESE ASSEMBLIES ARE MARKED WITH MANUFACTURER'S CODE 19731, WHICH IS A. C. BALL. ONE MORE ASSEMBLY IS AT THIS COMMAND AND ONE ON THE WEST COAST WHICH HAVE FAILED THAT ARE MARKED WITH MANUFACTURER'S CODE 30009, HYSPAN PRECISION PRODUCTS. HYSPAN PRECISION PRODUCTS' REPRESENTATIVE, MR. HEYE, WAS CONTACTED AND ADVISED WE HAD ITEMS MARKED WITH HIS MANUFACTURER'S CODE (30009) IN THE SYSTEM AND THAT WE HAD NO RECORD OF THE PROCUREMENTS FROM HIS FIRM. MR. HEYE ADVISED HE HAD FURNISHED THE ITEM SEVERAL TIMES TO A. C. BALL COMPANY ON GOVERNMENT ORDERS AND CONTRACTS 5272, 1678, 0189, AND 1599. PURCHASE ORDER DAAH01 71 -P-5272 AND CONTRACT DAAH01-71-C-0189 CAN BE IDENTIFIED AS BELONGING TO REDSTONE ARSENAL PROCUREMENTS.

"PROCUREMENT HISTORY: RECORDS SHOW THAT THE BELLOWS ASSEMBLIES HAVE BEEN PROVIDED BY FOUR DIFFERENT VENDORS AS FOLLOWS:

"VENDOR QUANTITY USE WALL THICKNESS PRODUCED BY

AEROQUIP 39 1ST BUY 3 PLIES/.006" PLY ADP-F

AEROQUIP 115 2ND BUY " "

AEROQUIP 21 SPARES " "

FLEXIBLE METAL HOSE 172 3RD BUY 1 PLY/.012" "

METAL BELLOWS 125 4TH BUY 1 PLY/.007" "

FLEXIBLE METAL HOSE 3 COMPLETE 1 PLY/.012" "

4TH BUY

HYSPAN PRECISION 63 SPARES BY 1 PLY/.004"MICOM

PRODUCTS (A. C. MICOM

BALL)

METAL BELLOWS 15 SPARES 1 PLY/.007" "

FAILURE ANALYSIS: INVESTIGATION AND ANALYSIS SHOW THAT THE BREAKAGE IS RELATED TO WALL THICKNESS. NO FAILURES HAVE BEEN CONFIRMED FROM THE FIRST AND SECOND BUY FIRE UNITS. EXCESSIVE FAILURE RATES ARE REPORTED FROM THIRD BUY FIRE UNITS. APPARENTLY SOME PERIOD OF AGING OCCURS BEFORE FAILURE OF THE THIRD BUY UNITS. EXCESSIVE FAILURE RATES ARE REPORTED FROM FOURTH BUY FIRE UNITS WITH SHORT LIFE. EXCESSIVE FAILURE RATES WITH SHORT LIFE FOR THE MICOM SPARES PROCURED TO DATE IS INDICATED. THE PRESENT DRAWING DOES NOT SPECIFICALLY CONTROL THE WALL THICKNESS OF THE BELLOWS."

IN VIEW THEREOF, AND ASSUMING THAT YOUR ASSEMBLIES CONFORMED TO ALL THE SPECIFICATIONS FOR THE UNITS LISTED BY THE DEPARTMENT IN PREVIOUS SOLICITATIONS, WE CANNOT CONCLUDE THAT THE DRAWINGS FOR THE ITEM WERE ADEQUATE TO PROCURE THE ASSEMBLIES ON A COMPETITIVE BASIS.

WITH RESPECT TO THE POSSIBILITY OF PROCURING FUTURE REQUIREMENTS ON A COMPETITIVE BASIS THE DEPARTMENT STATES THAT IT INSTRUCTED THE PHILCO FORD CORPORATION, AERONUTRONIC DIVISION, THE PRIME CONTRACTOR FOR THE SYSTEM IN WHICH THE ASSEMBLIES ARE USED, TO UPDATE THE DRAWINGS FOR THE UNITS. HOWEVER, THE DEPARTMENT STATES THAT SUCH EFFORT WAS UNSUCCESSFUL BECAUSE THE DATA CONCERNING THE INTERNAL STRUCTURES OF THE AEROQUIP ASSEMBLIES, WHICH HELPED THE UNITS TO WORK, ARE NOT AVAILABLE TO THE GOVERNMENT OR THE PRIME CONTRACTOR. FURTHER, THE DEPARTMENT STATES THAT IF IT HAD TO CORRECT THESE DRAWINGS WITHOUT HAVING AEROQUIP'S DATA, THE COST OF A GOVERNMENT TESTING PROGRAM WOULD BE AS FOLLOWS:

"TIME CONSUMING AND COSTLY TESTS WOULD BE REQUIRED TO ESTABLISH DEFINITIVE TECHNICAL REQUIREMENTS TEST AND QUALITY CONTROL DATA REQUIRED FOR SUCCESSFUL COMPETITIVE PROCUREMENT.

"A MINIMUM TEST PROGRAM IS ESTIMATED AS FOLLOWS. TWO MAN-YEARS OF EFFORT PLUS ASSOCIATED TEST EQUIPMENT INCLUDING 1 GFE FIRE UNIT PLUS INSTRUMENTATION AND OTHER DATA GATHERING HARDWARE. TESTING WOULD REQUIRE TIME ON ROAD TEST FACILITIES AS WELL AS LABORATORY TESTING. AFTER GATHERING DATA REQUIREMENTS WOULD BE ESTABLISHED UNITS PURCHASED SUBJECTED TO TESTS AND THE RESULTS VERIFIED. THIS TASK WOULD TAKE 1 YEAR AND APPROXIMATELY $150,000."

THE DEPARTMENT ALSO REPORTS THAT AEROQUIP IS WILLING TO NEGOTIATE THE SALE OF A TECHNICAL DATA PACKAGE TO THE GOVERNMENT, BUT THAT THE COST OF ACQUIRING THE DATA IS NOT KNOWN AT THIS TIME. IN ANY EVENT, THE DEPARTMENT MAINTAINS THAT IT WOULD STILL INCUR THE COSTS OF THE ABOVE TESTING PROGRAM EVEN IF THE DATA SHOULD BE ACQUIRED.

ADDITIONALLY, THE PROCURING ACTIVITY ESTIMATES THAT THE GOVERNMENT WOULD ONLY SAVE $9,000 THROUGH COMPETITIVE PROCUREMENTS BASED ON THE PROJECTED REQUIREMENTS FOR THE UNITS FOR THE NEXT FEW YEARS. IN VIEW THEREOF, THE DEPARTMENT STATES THAT IT IS IN THE BEST INTEREST OF THE GOVERNMENT TO CONTINUE SOLE-SOURCE PROCUREMENTS FOR THE ITEMS WITH AEROQUIP.

SINCE THE PROCUREMENT HISTORY OF THE ASSEMBLIES INDICATES THAT ONLY AEROQUIP CORPORATION FURNISHED ITEMS WHICH DID NOT HAVE EXCESSIVE FAILURES, AND INASMUCH AS THE SUBJECT REQUIREMENT WAS ASSIGNED AN 02 PRIORITY UNDER THE UMMIPS SYSTEM, WE FIND NO BASIS TO QUESTION THE DETERMINATION TO NEGOTIATE AN AWARD FOR THE SUBJECT REQUIREMENT WITH AEROQUIP. HOWEVER, BY LETTER OF TODAY, COPY ENCLOSED, WE ARE ADVISING THE SECRETARY OF THE ARMY THAT WE CANNOT CONCUR, ON THE BASIS OF THE PRESENT RECORD, WITH THE DECISION TO ISSUE FUTURE SOLE-SOURCE PROCUREMENTS TO AEROQUIP.

FOR THE REASONS SET FORTH ABOVE, YOUR PROTEST, INSOFAR AS IT REQUESTS CANCELLATION OF THE SUBJECT REQUIREMENT, MUST BE DENIED.