B-175221, SEP 20, 1972

B-175221: Sep 20, 1972

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BID PROTEST - RESTRICTIVE SPECIFICATIONS - TEST FOR VALIDITY DENIAL OF PROTEST BY STANDARD AIR PARTS AGAINST A DETERMINATION THAT THEY WERE INELIGIBLE FOR AWARD UNDER AN IFB ISSUED BY THE DEFENSE INDUSTRIAL SUPPLY CENTER. STRESSES THE NECESSITY OF ASCERTAINING THAT THE ITEMS OFFERED ARE FROM A HOMOGENEOUS INSPECTION LOT. IS UNABLE TO DISCERN ANY REASON WHY THE GOVERNMENT'S NEEDS IN THIS AREA SHOULD BE ANY LESS STRINGENT FOR A SUPPLIER THAN A MANUFACTURER. THE FACT THAT A PARTICULAR BIDDER MAY BE UNABLE OR UNWILLING TO MEET THE MINIMUM REQUIREMENTS FOR FURNISHING THE GOVERNMENT'S NEEDS IS NOT SUFFICIENT TO WARRANT A CONCLUSION THAT THE SPECIFICATIONS ARE UNDULY RESTRICTIVE. IN VIEW OF THE CRITICAL NATURE OF THE WORK FOR WHICH THE RIVETS ARE TO BE USED.

B-175221, SEP 20, 1972

BID PROTEST - RESTRICTIVE SPECIFICATIONS - TEST FOR VALIDITY DENIAL OF PROTEST BY STANDARD AIR PARTS AGAINST A DETERMINATION THAT THEY WERE INELIGIBLE FOR AWARD UNDER AN IFB ISSUED BY THE DEFENSE INDUSTRIAL SUPPLY CENTER, PHILADELPHIA, PA., FOR A QUANTITY OF BLIND RIVETS. NATIONAL AEROSPACE STANDARD (NAS) 1675, WHEN CONSIDERED IN ITS ENTIRETY, STRESSES THE NECESSITY OF ASCERTAINING THAT THE ITEMS OFFERED ARE FROM A HOMOGENEOUS INSPECTION LOT. THE COMP. GEN. IS UNABLE TO DISCERN ANY REASON WHY THE GOVERNMENT'S NEEDS IN THIS AREA SHOULD BE ANY LESS STRINGENT FOR A SUPPLIER THAN A MANUFACTURER. THE FACT THAT A PARTICULAR BIDDER MAY BE UNABLE OR UNWILLING TO MEET THE MINIMUM REQUIREMENTS FOR FURNISHING THE GOVERNMENT'S NEEDS IS NOT SUFFICIENT TO WARRANT A CONCLUSION THAT THE SPECIFICATIONS ARE UNDULY RESTRICTIVE. INSTEAD, IT MUST BE DETERMINED WHETHER THE RESTRICTION SERVES A BONA FIDE NEED OF THE GOVERNMENT. SEE 51 COMP. GEN. 315 (1971). IN VIEW OF THE CRITICAL NATURE OF THE WORK FOR WHICH THE RIVETS ARE TO BE USED, IT CANNOT BE CONCLUDED THAT THE INCLUSION OF NAS 1675 AND ITS REQUIREMENT FOR A HOMOGENEOUS INSPECTION LOT DOES NOT SERVE A BONA FIDE NEED OF THE GOVERNMENT.

TO STANDARD AIR PARTS:

REFERENCE IS MADE TO YOUR TELEGRAM OF FEBRUARY 15, 1972, AND SUBSEQUENT CORRESPONDENCE, PROTESTING THE DETERMINATION THAT YOUR FIRM IS INELIGIBLE FOR AWARD UNDER INVITATION FOR BIDS (IFB) DSA500-72-B 1018, ISSUED NOVEMBER 11, 1971, BY THE DEFENSE SUPPLY AGENCY, DEFENSE INDUSTRIAL SUPPLY CENTER (DISC), PHILADELPHIA, PENNSYLVANIA.

THE SUBJECT IFB REQUIRED THE DELIVERY OF SPECIFIED QUANTITIES OF BLIND RIVETS, FEDERAL SUPPLY NUMBERS 5320-068-8416, 5320-559-8515, AND 5320-802- 7174.

THE OPENING BIDS ON NOVEMBER 30, 1971, REVEALED THE SUBMISSION OF BIDS FROM FIVE FIRMS, INCLUDING YOURS. YOUR FIRM SUBMITTED THE LOWEST PRICES FOR ITEMS 0001 AND 0002, WHICH CONSTITUTED THE RIVETS IDENTIFIED BY THE FIRST TWO REFERENCED FEDERAL SUPPLY NUMBERS.

IN YOUR BID, YOU REPRESENTED YOURSELF AS A REGULAR DEALER, RATHER THAN A MANUFACTURER, OF THE SUBJECT ITEMS. ACCORDINGLY, YOU PROPOSED TO OFFER RIVETS MANUFACTURED BY THE NATIONAL SCREW AND MANUFACTURING COMPANY, LOS ANGELES, CALIFORNIA. THE SECOND-LOW BIDDER ON ITEM 0001, SKYLINE INDUSTRIES, INC., REPRESENTED ITSELF AS A REGULAR DEALER, AND OFFERED RIVETS WHICH HAD BEEN MANUFACTURED BY THE NATIONAL SCREW AND MANUFACTURING COMPANY AT ITS CLEVELAND, OHIO, FACILITIES. NATIONAL SCREW AND MANUFACTURING COMPANY, THE THIRD-LOW BIDDER ON ITEM 0001 AND THE SECOND- LOW BIDDER ON ITEM 0002, REPRESENTED ITSELF TO BE A MANUFACTURER OF THE ITEMS AND OFFERED RIVETS FROM STOCK WHICH HAD BEEN MANUFACTURED AT ITS FACILITY IN LOS ANGELES, CALIFORNIA. THE RECORD INDICATES THAT THE CONTRACTING OFFICER DETERMINED THAT YOUR BID MUST BE REJECTED DUE TO YOUR INABILITY TO COMPLY WITH CERTAIN INSPECTION AND QUALITY ASSURANCE REQUIREMENTS OF THE SUBJECT IFB.

CONCERNING THE QUALITY ASSURANCE REQUIREMENTS, IT IS FURTHER REPORTED THAT YOUR FIRM WAS UNABLE TO COMPLY WITH CERTAIN PROVISIONS OF THE NATIONAL AEROSPACE STANDARD (NAS) 1675, JUNE 1964, WHICH THE IFB MADE APPLICABLE TO ALL THREE ITEMS. SECTION 4 OF THAT SPECIFICATION SETS FORTH REQUIREMENTS PERTAINING TO QUALITY ASSURANCE. WHILE THIS SECTION PERMITS THE SUPPLIER TO UTILIZE HIS OWN OR ANY OTHER ADEQUATE FACILITIES TO TEST THE ITEMS, IT ALSO PROVIDES FOR THE ESTABLISHMENT OF HOMOGENEOUS LOTS FROM WHICH THE ITEMS WILL BE FURNISHED AND SAMPLES SELECTED FOR INSPECTION AND TESTING. A COMPONENT PRODUCTION LOT IS DESCRIBED IN PARAGRAPH 4.2.1 AS A QUANTITY OF BLIND FASTENER COMPONENTS OF IDENTICAL CONFIGURATION FABRICATED FROM THE SAME HEAT OF MATERIAL BY THE SAME PROCEDURES, HEAT TREATED AND PROCESSED AS A CONTROLLED BATCH. PARAGRAPH 4.2.2 DEFINES AN ASSEMBLY PRODUCTION LOT AS A QUANTITY OF BLIND FASTENER COMPONENTS IN WHICH EACH OF THE THREE COMPONENTS REPRESENTS A SINGLE COMPONENT PRODUCTION LOT, AND REQUIRES THE PRODUCER TO MAINTAIN A RECORD DEFINING THE COMPONENT PRODUCTION LOTS WHICH MAKE UP EACH ASSEMBLY PRODUCTION LOT. AN INSPECTION LOT (4.2.3) IS THAT PORTION OF AN ASSEMBLY PRODUCTION LOT WHICH IS PROCURED AS ONE PURCHASE ORDER ITEM. IT IS REPORTED THAT YOUR FIRM WAS UNABLE TO PROVIDE EVIDENCE OF THE COMPONENT PRODUCTION LOTS OF THE ITEMS WHICH YOU OFFERED OR TO ESTABLISH THAT THE ITEMS WERE FROM AN INSPECTION LOT WHICH WAS, IN FACT, HOMOGENEOUS; I.E., "HEAT TREATED AND PROCESSED AS A CONTROLLED BATCH."

FURTHERMORE, THE RECORD INDICATES THAT YOU ARE UNABLE TO COMPLY WITH PARAGRAPH 4.5.1 WHICH REQUIRES THAT EACH INSPECTION LOT BE ACCOMPANIED BY TWO COPIES OF THE MANUFACTURER'S INSPECTION REPORT, SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE MANUFACTURER, STATING THAT THE FASTENERS ARE FROM AN ASSEMBLY PRODUCTION LOT WHICH WAS MANUFACTURED, INSPECTED AND ACCEPTED IN ACCORDANCE WITH THE REQUIREMENTS OF NAS 1675 (INCLUDING 4.2.1, 4.2.2, AND 4.2.3).

WHILE YOU CONFESS YOUR INABILITY TO SUPPLY THE MANUFACTURER'S INSPECTION REPORT REQUIRED BY 4.5.1, YOU CONTEND THAT 4.5.1 WAS INTENDED FOR APPLICATION ONLY WITH REGARD TO MANUFACTURERS AND NOT TO SUPPLIERS SUCH AS YOURSELVES. YOUR EXPRESSED BELIEF IS THAT IT WAS NOT THE INTENT OF NAS 1675 TO LIMIT THE SOURCE OF FASTENERS TO MANUFACTURERS ONLY.

WITH REGARD TO YOUR CONTENTION THAT THE REQUIREMENTS OF 4.5.1 ARE RESTRICTED TO MANUFACTURERS ONLY, WE HAVE REVIEWED NAS 1675 AND ARE UNABLE TO DISCERN ANY REASONABLE BASIS FOR AN INTERPRETATION WHICH WOULD EXCEPT SUPPLIERS FROM ITS REQUIREMENTS. TO THE CONTRARY, 4.5.1 APPEARS TO REINFORCE THE INTENT OF PARAGRAPHS 4.2.1-3 THAT THE END ITEMS BE DERIVED FROM IDENTIFIABLE LOTS WHICH HAVE PASSED THE QUALIFICATION TESTS SET FORTH ELSEWHERE IN NAS 1675. IT IS THEREFORE OUR CONCLUSION THAT NAS 1675, WHEN CONSIDERED IN ITS ENTIRETY, STRESSES THE NECESSITY OF ASCERTAINING THAT THE ITEMS OFFERED ARE FROM A HOMOGENEOUS INSPECTION LOT. ACCORDINGLY, WE ARE UNABLE TO DISCERN ANY REASON WHY THE GOVERNMENT'S NEEDS SHOULD BE REGARDED AS BEING LESS STRINGENT DEPENDING ON WHETHER THE BIDDER IS A SUPPLIER RATHER THAN A MANUFACTURER.

IT IS APPARENT THAT THE ULTIMATE EFFECT OF THE INCORPORATION OF NAS 1675 INTO THE PROCUREMENT SOLICITATION IS TO RESTRICT COMPETITION TO MANUFACTURERS AND ONLY THOSE SUPPLIERS TO WHOM THE MANUFACTURERS HAVE ISSUED INSPECTION REPORTS. WHILE 4.5.1 MAY BE RESTRICTIVE OF COMPETITION, IT IS THE FUNCTION OF OUR OFFICE TO DETERMINE WHETHER SPECIFICATIONS ARE UNDULY RESTRICTIVE OF COMPETITION SO AS TO RENDER A SOLICITATION DEFECTIVE. IN THIS REGARD, THE FACT THAT A PARTICULAR BIDDER MAY BE UNABLE OR UNWILLING TO MEET THE MINIMUM REQUIREMENTS FOR SUPPLYING THE GOVERNMENT'S NEEDS IS NOT SUFFICIENT TO WARRANT A CONCLUSION THAT THE SPECIFICATIONS ARE UNDULY RESTRICTIVE. SEE B 164160, MAY 28, 1968, AND CASES CITED THEREIN. INSTEAD, IT MUST BE DETERMINED WHETHER THE RESTRICTION SERVES A BONA FIDE NEED OF THE GOVERNMENT. SEE 51 COMP. GEN. 315, 321 (1971). THUS, IF THE RESTRICTIONS EMBODIED IN AN INVITATION APPEAR TO BE ADEQUATELY JUSTIFIED, EVEN A PROCUREMENT ON A SOLE-SOURCE BASIS WOULD NOT BE IMPROPER. B-164160, MAY 28, 1968.

THE RECORD ADVISES THAT THE BLIND RIVETS ARE TO BE UTILIZED IN THE REPAIR OF AIRCRAFT ALUMINUM SKINS, AND THEIR UNIQUE DESIGN PERMITS THE FASTENING OF THE SKIN TO THE AIRCRAFT STRUCTURE FROM THE OUTSIDE ONLY. THE CONTRACTING OFFICER REPORTS THAT IMPERFECT MANUFACTURE OF THESE ITEMS MAY RESULT IN THEIR BREAKAGE DURING THE STRETCHING OF THE SKIN INCURRED WHILE THE AIRCRAFT IS IN FLIGHT. IT IS FURTHER STATED THAT THE LOSS OF SAID RIVETS IN FLIGHT WOULD POSE A HAZARD TO THE SAFETY OF THE PLANE, THE PERSONNEL ABOARD AND THE ACCOMPLISHMENT OF MISSION OBJECTIVES. IT IS ALSO STATED THAT THE RIVETS TO BE DEPLOYED IN FASTENING THE SKIN TO THE AIRCRAFT ARE NOT SUSCEPTIBLE TO COMPLETE TESTING SINCE THE TESTS ARE DESTRUCTIVE OF THE ITEMS.

ACCORDINGLY, IT IS NECESSARILY A MATTER OF PARAMOUNT IMPORTANCE THAT THOSE RIVETS COMPRISING A SAMPLE WHICH HAS SUCCESSFULLY PASSED THE SPECIFIED QUALIFICATION TESTS, AND WHICH HAVE BEEN DESTROYED IN THE PROCESS, BE AS REPRESENTATIVE AS POSSIBLE OF THE REMAINING RIVETS IN THE INSPECTION LOT FROM WHICH THE SAMPLE WAS DRAWN. IT IS APPARENTLY FOR THIS REASON THAT THE REFERENCED SECTIONS OF NAS 1675 STRIVE TO ESTABLISH HOMOGENEITY OF THE INSPECTION LOT, AND CERTIFICATION THEREOF.

IT FOLLOWS, THEREFORE, THAT IF A SAMPLE IS DRAWN FROM AN INSPECTION LOT COMPRISED OF MIXED ASSEMBLY PRODUCTION LOTS, THE POSSIBILITY THAT THE SAMPLE WOULD BE LESS REPRESENTATIVE OF THE REMAINDER AND, THEREFORE, LESS RELIABLE WOULD BE MORE LIKELY THAN IF THE SAMPLE HAD BEEN DRAWN FROM A HOMOGENEOUS INSPECTION LOT. THUS, A TEST INDICATING A CERTAIN PERCENTAGE OF DEFECTIVE ITEMS IN A SAMPLE DRAWN FROM A MIXED LOT WOULD BE LESS LIKELY TO ASSURE THE PROCURING ACTIVITY THAT THE PERCENTAGE OF DEFECTIVE ITEMS IN THE REMAINDER WAS NO GREATER THAN THAT OF THE SAMPLE, THAN HAD THE SAMPLE BEEN DRAWN FROM A HOMOGENEOUS LOT.

THE RECORD STATES THAT YOUR FIRM ACQUIRED THESE ITEMS FROM ANOTHER DEALER WHICH HAD GONE OUT OF BUSINESS. THERE IS NOTHING IN THE RECORD TO INDICATE THAT THE MANUFACTURER FURNISHED THAT DEALER WITH THE REPORTS REQUIRED BY 4.5.1, THEREBY RAISING THE POSSIBILITY THAT NOT ONLY MAY YOUR STOCK BE COMPOSED OF MIXED PRODUCTION LOTS, BUT THAT IT MAY HAVE CONTAINED MORE THAN THE PERMISSIBLE PERCENTAGE OF DEFECTIVE ITEMS TO QUALIFY FOR SUCH A MANUFACTURER'S INSPECTION REPORT.

IN VIEW OF THE CRITICAL NATURE OF THE WORK FOR WHICH THE SUBJECT RIVETS ARE TO BE USED, WE CANNOT CONCLUDE THAT THE INCLUSION OF NAS 1675 AND ITS REQUIREMENT FOR A HOMOGENEOUS INSPECTION LOT DOES NOT SERVE A BONA FIDE NEED OF THE GOVERNMENT.

SINCE YOUR PROTEST MUST BE, AND IS, DENIED FOR THE ABOVE REASONS, THE QUESTION OF WHETHER YOUR INSPECTION SYSTEM PROVIDES A FURTHER BASIS FOR THE REJECTION OF YOUR BID IS CONSIDERED TO BE ACADEMIC.