B-174544, FEB 8, 1972

B-174544: Feb 8, 1972

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PROTESTANT CONTENDS THAT THE SPARE PARTS REQUIREMENT WAS PREJUDICIAL IN THAT "BRAND NAME" BIDDERS WERE PRECLUDED FROM SELECTING COMPARABLY EQUAL BUT LESS COSTLY SPARE PARTS. THE FACT THAT VARIOUS PROPOSAL UNITS DID NOT REQUIRE EXACT SPARE PARTS COMPLEMENTS WAS COMPENSATED FOR BY THE EQUAL EVALUATION OF ALL BIDS. THE PROTEST IS DENIED AND PROTESTANT'S ALLEGATION OF POSSIBLE PATENT INFRINGEMENT SHOULD BE DIRECTED TOWARDS THE COURT OF CLAIMS UNDER 28 U.S.C. 1498. INCORPORATED: REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 22. THE SOLICITATION WAS FOR 30 HIGH PRESSURE WATER CLEANERS. WAS ISSUED ON A "BRAND NAME OR EQUAL" BASIS. THE BRAND NAME SPECIFIED WAS YOUR AMERICAN WATER BLASTER MODEL WBD-70.

B-174544, FEB 8, 1972

BID PROTEST - COMPETITIVE ADVANTAGE - SPARE PARTS REQUIREMENT DECISION DENYING PROTEST OF AMERICAN AERO INDUSTRIES, INC., AGAINST AWARD OF A CONTRACT TO TRITAN CORPORATION UNDER AN RFP ISSUED BY THE ARMY WEAPONS COMMAND FOR HIGH PRESSURE WATER CLEANERS ON A "BRAND NAME OR EQUAL" BASIS. PROTESTANT CONTENDS THAT THE SPARE PARTS REQUIREMENT WAS PREJUDICIAL IN THAT "BRAND NAME" BIDDERS WERE PRECLUDED FROM SELECTING COMPARABLY EQUAL BUT LESS COSTLY SPARE PARTS. THE FACT THAT VARIOUS PROPOSAL UNITS DID NOT REQUIRE EXACT SPARE PARTS COMPLEMENTS WAS COMPENSATED FOR BY THE EQUAL EVALUATION OF ALL BIDS. ACCORDINGLY, THE PROTEST IS DENIED AND PROTESTANT'S ALLEGATION OF POSSIBLE PATENT INFRINGEMENT SHOULD BE DIRECTED TOWARDS THE COURT OF CLAIMS UNDER 28 U.S.C. 1498.

TO AMERICAN AERO INDUSTRIES, INCORPORATED:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 22, 1971, PROTESTING AWARD OF A CONTRACT UNDER RFP DAAF01-72-R-0542, ISSUED BY THE UNITED STATES ARMY WEAPONS COMMAND, ROCK ISLAND ARSENAL, ROCK ISLAND, ILLINOIS.

THE SOLICITATION WAS FOR 30 HIGH PRESSURE WATER CLEANERS, PLUS SPARE PARTS, AND WAS ISSUED ON A "BRAND NAME OR EQUAL" BASIS. THE BRAND NAME SPECIFIED WAS YOUR AMERICAN WATER BLASTER MODEL WBD-70. THE RFP STATES THAT OFFERS WOULD BE EVALUATED ON THE PRICE OF THE BASIC MACHINES PLUS SPARE PARTS REQUIRED FOR BOTH THREE MONTHS AND NINE MONTHS. AFTER NEGOTIATIONS WERE CONDUCTED WITH YOU AND SEVERAL OTHER OFFERORS, A CONTRACT WAS AWARDED TO TRITAN CORPORATION, THE LOW PROPOSER, FOR AN "OR EQUAL" PRODUCT.

THE ESSENCE OF YOUR PROTEST CONCERNS THE REQUIREMENT FOR SPARE PARTS. PART II, SECTION F OF THE SOLICITATION PROVIDED AS FOLLOWS:

"THE FOLLOWING LISTINGS REPRESENT KNOWN SPARE PARTS REQUIREMENTS NECESSARY TO MAINTAIN PRESENT WATER CLEANING EQUIPMENT IN VIETNAM, AT THE LEVELS OF OPERATION SPECIFIED ON PAGE 29.

"UTILIZING THIS LISTING AS A BASE, ALL OFFERORS ARE REQUESTED TO FURNISH COMPARABLE LISTS OF SPARE PARTS WHICH WOULD BE REQUIRED TO MAINTAIN THEIR PROPOSED WATER CLEANER, AT THE SAME LEVEL OF OPERATION, FOR ONE YEAR.

"LISTS SHALL SET FORTH QUANTITIES REQUIRED, UNIT PRICE AND TOTAL PRICE FOR EACH ITEM OF SPARES."

FOLLOWING THIS LANGUAGE WAS A DETAILED LISTING OF SPECIFIC QUANTITIES OF SPARE PARTS FOR A THREE-MONTHS SUPPLY, WHICH WAS TO BE SHIPPED CONCURRENTLY WITH EACH MACHINE, AND FOR A NINE-MONTHS SUPPLY, TO BE SHIPPED IN ONE LOT. SECTION F ALSO STATED THAT THE "GOVERNMENT RESERVES THE RIGHT TO ADD TO OR DELETE FROM SPARE PARTS LISTINGS."

YOU CLAIM THAT THESE PROVISIONS PREVENTED A FAIR EVALUATION BECAUSE THE SPARE PARTS REQUIREMENTS COULD NOT APPLY TO THE "OR EQUAL" PROPOSALS AND THE PROPOSERS COULD CONTROL THE TOTAL VALUE OF THEIR PROPOSALS BY CHOOSING THE ITEMS AND QUANTITIES TO BE INCLUDED IN THE SPARE PARTS LISTINGS. YOU STATE THAT WHILE YOU SUBMITTED BOTH A "BRAND NAME" PROPOSAL AND AN "OR EQUAL" PROPOSAL, CHANGING ONLY THE DIESEL ENGINE IN YOUR "OR EQUAL" UNIT, REQUIREMENTS LIST OF THE RFP, TRITAN'S "OR EQUAL" PROPOSAL CONSISTED OF A DIFFERENT PUMP, DIFFERENT ENGINE, AND A DIFFERENT GUN AND CONTROLS SYSTEM, WHICH PERMITTED TRITAN TO SELECT ALL OF THE ITEMS AND QUANTITIES FOR THE SPARE PARTS LISTINGS. YOU INDICATE THAT THIS SPARE PARTS REQUIREMENT WAS THE CONTROLLING FACTOR IN THE AWARD AND THAT THIS WAS PREJUDICIAL TO YOU. YOU POINT OUT THAT YOUR INITIAL "OR EQUAL" PROPOSAL WAS SUBSTANTIALLY LOWER THAN TRITAN'S PROPOSAL, BUT THAT THE CONTRACTING OFFICER INSISTED THAT SINCE YOUR "OR EQUAL" PROPOSAL INCLUDED THE SAME PUMP AS THE BRAND NAME UNIT, THE QUANTITIES OF SPARE PARTS FURNISHED FOR IT WOULD HAVE TO EQUAL THE QUANTITIES LISTED IN THE RFP, WHICH RESULTED IN A SIGNIFICANT INCREASE IN YOUR PRICE. YOU CONTEND THAT YOU WERE THEREFORE NOT PERMITTED TO ESTABLISH THE SPARE PARTS REQUIREMENTS FOR YOUR "OR EQUAL" UNIT, WHILE TRITAN, PROPOSING AN ENTIRELY DIFFERENT PUMP, WAS ALLOWED TO DO SO.

YOU ALSO STATE THAT THERE WAS NO PROVISION FOR RELIABILITY OF THE SPARE PARTS REQUIREMENTS SUBMITTED AND THAT A CONTRACTOR "COULD NOT BE HELD LIABLE FOR UNDERSTATING THE NEEDS IN THE SPARE PARTS REQUIREMENTS."

AS THIS WAS A "BRAND NAME OR EQUAL" PROCUREMENT, IT WAS NOT UNREASONABLE FOR THE RFP TO INCLUDE A SPARE PARTS LISTING BASED ON EXPERIENCE WITH THE BRAND NAME ITEM. THE RFP SPECIFICALLY REQUESTED A "COMPARABLE" LISTING FOR THE "OR EQUAL" PRODUCTS PROPOSED, AND RESERVED TO THE GOVERNMENT THE RIGHT TO ADD TO OR SUBTRACT FROM THE LISTING. TAKEN TOGETHER, WE THINK THESE PROVISIONS CLEARLY INDICATE THAT BEFORE A CONTRACT WOULD BE AWARDED THE GOVERNMENT WOULD HAVE TO BE SATISFIED THAT THE PROPOSED SPARE PARTS LISTINGS WOULD ADEQUATELY MEET ITS NEEDS.

THE ARMY'S ADMINISTRATIVE REPORT STATES THAT THE EVALUATION OF THE PROPOSALS WITHIN THE ZONE OF CONSIDERATION SPECIFICALLY INCLUDED THE SPARE PARTS REQUIREMENTS. THE REPORT FURTHER STATES:

"IN ORDER TO ASSURE THAT THE SPARE PARTS WERE BEING PROPERLY EVALUATED, THE CONTRACTING OFFICER BROKE DOWN EACH AND EVERY REPAIR PART AS REQUIRED BY THE SOLICITATION AND COMPARED IT TO THE SPARE OFFERED BY EACH OF THE COMPETITORS ON THE THREE MONTH REQUIREMENT. *** . A RESUME OF AWARD WAS PREPARED, WHICH SETS FORTH THIS EVALUATION *** AND *** EACH OF THE OFFERORS WAS INFORMED AS TO THE METHOD THAT SPARE PARTS WOULD BE EVALUATED

THE RESUME OF AWARD, ENCLOSURE 22 OF THE ARMY'S REPORT, REVEALS THAT EXTENSIVE EVALUATION OF THE SPARE PARTS REQUIREMENTS WAS MADE. THE RESUME STATES:

"INITIAL EVALUATION OF OFFERS IN THE COMPETITIVE RANGE INDICATED THAT MOST OFFERS HAD TAKEN LIBERTIES WITH SPARE PARTS REQUIREMENTS. *** IN VIEW OF THE FOREGOING, IT WAS DETERMINED THAT AN ON-SITE EVALUATION OF ALL OFFERS IN COMPETITION WOULD HAVE TO BE MADE. ***DURING NEGOTIATION *** ALL OFFERORS WERE EXPLICITLY INFORMED AS FOLLOWS: ALL ITEMS OF SPARES WHICH ARE EITHER ALIKE OR FUNCTIONALLY THE SAME IN EVERY MACHINE OFFERED MUST BE FURNISHED IN THE SAME QUANTITIES AS SET FORTH IN THE SOLICITATION. ONLY ITEMS PECULIAR TO THE CONFIGURATION OF THE INDIVIDUAL MACHINE OFFERED ARE SUBJECT TO DISCUSSION. QUANTITIES OF THESE ITEMS AS SET FORTH BY THE OFFEROR WILL BE EVALUATED BY THE NEGOTIATION TEAM TO DETERMINE IF THEY ARE ADEQUATE. GOVERNMENT REPRESENTATIVE'S DECISION WILL BE FINAL. ALL OFFERORS AGREED THAT THIS WAS FAIR. *** PRELIMINARY VISITS ESTABLISHED *** QUANTITIES AND ITEMS OF SPARES REQUIRED FOR EACH OFFEROR. *** ALL OFFERORS SUBMITTED REVISED PROPOSALS *** . THESE WERE EVALUATED TO DETERMINE IF SPARE PARTS WERE OFFERED EXACTLY AS NEGOTIATED."

THE RECORD FURTHER INDICATES THAT THE ROCK ISLAND ARSENAL BOARD OF AWARDS CAREFULLY CONSIDERED THE SPARE PARTS REQUIREMENTS WITH RESPECT TO QUANTITY AND COMPARABILITY OF SPARE PARTS PRICES. THE MINUTES OF THE BOARD'S MEETING OF NOVEMBER 1, 1971, REVEAL THAT THE DIFFERENCES IN THE VARIOUS OFFERS WERE CAREFULLY EXPLORED, AND THAT THE BOARD UNDERSTOOD THAT THE BASIC DIFFERENCE IN DESIGN CONFIGURATION INVOLVING AN ELECTRICAL VERSUS A HYDRAULIC SYSTEM "RESULTED IN A DIFFERENCE AS TO TYPE AND IN SOME INSTANCES QUANTITY OF SPARE PARTS REQUIRED. HOWEVER, THE SPARE PARTS REQUIREMENTS WERE SO ALIGNED AS TO SUPPORT THE ITEM FROM A FUNCTIONAL POINT OF VIEW FOR THE TYPE AND QUANTITY OF PART REQUIRED."

WE THINK THIS RECORD CLEARLY DEMONSTRATES THAT PROPOSERS WERE REQUIRED TO FURNISH ALL NECESSARY SPARE PARTS IN QUANTITIES SUFFICIENT TO MAINTAIN THE UNITS AT THE DESIRED OPERATING LEVEL AND THAT NO OFFEROR WAS ABLE TO HAVE CONSIDERED A PROPOSAL THAT DID NOT ADEQUATELY MEET THE NEEDS OF THE GOVERNMENT. THE FACT THAT THE VARIOUS PROPOSAL UNITS DID NOT ALL REQUIRE THE EXACT COMPLEMENT OF SPARE PARTS DID NOT RENDER UNFAIR EITHER THE SOLICITATION OR THE EVALUATION THEREUNDER. ALL PROPOSALS WERE EVALUATED EQUALLY, AND ALL "OR EQUAL" PROPOSALS WERE REQUIRED TO MEET THE RFP'S EXACT SPARE PARTS REQUIREMENTS WHEREVER POSSIBLE. IN FACT, AS YOU POINT OUT, IT WAS JUST SUCH A REQUIREMENT THAT LED TO AN UPWARD REVISION OF YOUR PRICE PROPOSAL BECAUSE YOUR INITIAL "OR EQUAL" PROPOSAL DID NOT INCLUDE SOME REQUIRED SPARE PARTS.

ALTHOUGH YOU CLAIM THAT THE SPARE PARTS REQUIREMENTS SHOULD HAVE BEEN EXPRESSED AS A PERCENTAGE OF THE END ITEM RATHER THAN IN SPECIFIC QUANTITIES GEARED TO A DESIRED OPERATING LEVEL, WE THINK THE CONTRACTING OFFICER COULD REASONABLY DECIDE THAT SPECIFIC QUANTITIES WERE NECESSARY FOR THIS PROCUREMENT. IT IS REPORTED THAT EVALUATION BASED ON "A PERCENTAGE OF THE END ITEM WAS NOT DEEMED APPROPRIATE DUE TO THE DIFFERENCES IN CONFIGURATIONS AND DESIGNS OFFERED." WE SEE NO REASON WHY THE GOVERNMENT SHOULD BE PUT IN THE POSITION OF HAVING TO ACQUIRE TOO FEW OR TOO MANY SPARE PARTS FOR A PARTICULAR UNIT BECAUSE THAT NUMBER OF SPARE PARTS WAS NECESSARY FOR A DIFFERENT UNIT; BUT THIS COULD HAVE BEEN THE RESULT HAD THE RFP SOLICITED SPARE PARTS ON THE BASIS YOU SUGGEST.

YOU ALSO ALLEGE THAT YOU HAVE FURNISHED LARGE QUANTITIES OF SPARE PARTS UNDER PREVIOUS CONTRACTS WHICH ARE IN THE MILITARY SUPPLY SYSTEM, AND THAT AWARD TO TRITAN WILL REQUIRE DUPLICATION OF THE GOVERNMENT'S SPARE PARTS INVENTORY. THE ARMY REPORTS THAT THERE WILL BE NO DUPLICATION BECAUSE EACH WATER BLASTER WILL BE MAINTAINED WITH PARTS PROCURED SPECIFICALLY FOR IT.

YOUR PROTEST ALSO INCLUDES AN ALLEGATION THAT YOU ARE THE OWNER OF PATENTS ON EQUIPMENT COVERED BY THIS PROCUREMENT AND THAT THERE MAY BE PATENT INFRINGEMENT BY TRITAN IN THE PERFORMANCE OF THE CONTRACT. EVEN ASSUMING THAT PERFORMANCE BY TRITAN WOULD RESULT IN PATENT INFRINGEMENT, THIS WOULD NOT AFFECT THE LEGALITY OF THE AWARD. 38 COMP. GEN. 276 (1958); B-171349, NOVEMBER 17, 1971. YOUR REMEDY FOR PATENT INFRINGEMENT IS LIMITED TO A SUIT AGAINST THE UNITED STATES IN THE COURT OF CLAIMS UNDER 28 U.S.C. 1498 OR TO FILING AN ADMINISTRATIVE CLAIM UNDER ASPR 9- 404.

FOR THE FOREGOING REASONS, YOUR PROTEST IS DENIED.