Rejection of Low Bid as Nonresponsive Because of Equipment Offered

B-176053(1): Nov 13, 1972

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THE INVITATION REQUIREMENT FOR A STANDARD PRODUCTION ITEM IS NOT MET BY THE SUBMISSION OF A PROTOTYPE. SINCE IT IS WITHIN THE AUTHORITY OF PROCUREMENT AGENCIES TO REQUIRE BIDDERS TO PROFFER EVIDENCE OF EQUIPMENT RELIABILITY. THE PROTEST IS DENIED. INC.: REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 20. PROTESTING THAT A CONTRACT SHOULD NOT HAVE BEEN AWARDED TO THE HEWLETT-PACKARD COMPANY UNDER INVITATION FOR BIDS (IFB) NO. A PROTOTYPE WILL NOT BE ACCEPTABLE.". THE LOW BID FROM YOUR COMPANY WAS REJECTED BY THE CONTRACTING OFFICER AS NONRESPONSIVE ON THE BASIS THAT THE EQUIPMENT OFFERED WAS NOT A STANDARD PRODUCTION ITEM PROVEN IN INDUSTRY. THE BASIS FOR THE CONTRACTING OFFICER'S DETERMINATION WAS THAT THE IFB SPECIFIED A 100 MHZ BANDWIDTH OSCILLOSCOPE AND YOU OFFERED A 60 MHZ BANDWIDTH OSCILLOSCOPE.

B-176053(1), NOV 13, 1972

BID PROTEST - STANDARD PRODUCTION ITEM - NONRESPONSIVE BID - AMBIGUITY IN BID DECISION DENYING THE PROTEST OF TEKTRONIX, INC., AGAINST THE AWARD OF A CONTRACT TO THE HEWLETT-PACKARD COMPANY UNDER AN IFB ISSUED BY THE DEFENSE NUCLEAR AGENCY, KIRTLAND AFB, N.M. THE INVITATION REQUIREMENT FOR A STANDARD PRODUCTION ITEM IS NOT MET BY THE SUBMISSION OF A PROTOTYPE. SINCE IT IS WITHIN THE AUTHORITY OF PROCUREMENT AGENCIES TO REQUIRE BIDDERS TO PROFFER EVIDENCE OF EQUIPMENT RELIABILITY, THE IFB SHOULD PROVIDE GUIDELINES AS TO HOW "STANDARD" OR AT WHAT POINT IN "PRODUCTION" THE EQUIPMENT MUST BE. ALSO, TEKTRONIX'S FAILURE TO SPECIFY IN ITS BID THAT THE PLANT PART NUMBERS WOULD COMPLY WITH THE SPECIFICATIONS CREATES AN AMBIGUITY WHICH, IF UNRESOLVED, RENDERS THE BID NONRESPONSIVE. ACCORDINGLY, THE PROTEST IS DENIED.

TO TEKTRONIX, INC.:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 20, 1972, AND PRIOR CORRESPONDENCE, PROTESTING THAT A CONTRACT SHOULD NOT HAVE BEEN AWARDED TO THE HEWLETT-PACKARD COMPANY UNDER INVITATION FOR BIDS (IFB) NO. DNA002-72- B-0011, AS AMENDED, ISSUED BY THE DEFENSE NUCLEAR AGENCY, FIELD COMMAND, PURCHASING & CONTRACTING DIVISION (FCIG-B), KIRTLAND AIR FORCE BASE, NEW MEXICO.

THE IFB SPECIFICATION PROVIDED:

"STANDARD END ITEM - THE END PRODUCT MUST BE PROVEN IN INDUSTRY AND SHALL BE A STANDARD PRODUCTION ITEM. A PROTOTYPE WILL NOT BE ACCEPTABLE."

THE LOW BID FROM YOUR COMPANY WAS REJECTED BY THE CONTRACTING OFFICER AS NONRESPONSIVE ON THE BASIS THAT THE EQUIPMENT OFFERED WAS NOT A STANDARD PRODUCTION ITEM PROVEN IN INDUSTRY. THE BASIS FOR THE CONTRACTING OFFICER'S DETERMINATION WAS THAT THE IFB SPECIFIED A 100 MHZ BANDWIDTH OSCILLOSCOPE AND YOU OFFERED A 60 MHZ BANDWIDTH OSCILLOSCOPE. THE CONTRACTING OFFICER STATED THAT YOU MUST PERFORM EXTENSIVE MODIFICATIONS TO ACHIEVE THE SPECIFIED BANDWIDTH AND AS THERE WAS NO EVIDENCE THAT WHAT YOU PROPOSED TO FURNISH HAD BEEN PROVEN IN INDUSTRY, IT WAS CONSIDERED A PROTOTYPE NOT ACCEPTABLE WITHIN THE PURVIEW OF THE INVITATION. ON THE OTHER HAND, THE CONTRACTING OFFICER DETERMINED THAT THE EQUIPMENT OFFERED BY HEWLETT-PACKARD WAS A STANDARD END ITEM WHICH HAS BEEN TESTED IN INDUSTRY. IT IS STATED THAT BECAUSE THE OSCILLOSCOPE IS DESTINED FOR USE AT THE NEVADA TEST SITE TO RECORD DATA FROM TEST EVENTS, IT IS IMPERATIVE THAT THE GOVERNMENT RECEIVE A PROVEN SYSTEM.

YOU CONTEND THAT THE MODIFICATIONS YOU PROPOSED WERE MINOR AND THAT THE INVITATION REQUIREMENT FOR A STANDARD PRODUCTION ITEM PROVEN IN INDUSTRY WAS AN ARBITRARY REQUIREMENT.

OUR OFFICE HAS UPHELD THE RIGHT OF PROCUREMENT AGENCIES IN PARTICULAR CASES TO REQUIRE BIDDERS TO EVIDENCE THAT OFFERED EQUIPMENT HAS CERTAIN DEMONSTRATED RELIABILITY. SEE B-175493, APRIL 20 AND JULY 6, 1972. PREVIOUSLY NOTED, IN THIS CASE THE CONTRACTING OFFICER HAS INDICATED THAT RELIABILITY IS CRITICAL BECAUSE OF THE INTENDED USE OF THE EQUIPMENT AT THE NEVADA TEST SITE. THUS, THE INCLUSION OF THE RELIABILITY REQUIREMENT DOES NOT APPEAR TO HAVE BEEN ARBITRARY. HOWEVER, WHERE AS IN THIS CASE THERE IS A STANDARD PRODUCTION REQUIREMENT IN AN IFB, IT SHOULD PROVIDE GUIDEPOSTS AS TO HOW "STANDARD" OR AT WHAT POINT IN "PRODUCTION" THE EQUIPMENT MUST BE. B 149250, SEPTEMBER 11, 1962.

NEVERTHELESS, IT IS OUR OPINION THAT THE BID SHOULD HAVE BEEN REJECTED AS NONRESPONSIVE TO THE IFB BECAUSE IT CITED MODEL NUMBERS THAT WERE NOT CONTAINED IN YOUR STANDARD CATALOGS. THE IFB DID NOT SOLICIT MODEL NUMBERS IN THE BIDS. YOU HAVE ALLEGED THAT THE CONTRACTING OFFICER REQUESTED YOU TO INCLUDE THE NUMBERS IN THE BID. HOWEVER, THE CONTRACTING OFFICER HAS DENIED HAVING MADE SUCH A REQUEST. MOREOVER, WE NOTE THAT PARAGRAPH 3 OF THE SOLICITATION INSTRUCTIONS AND CONDITIONS PROVIDES THAT ORAL EXPLANATIONS OR INSTRUCTIONS ARE NOT BINDING AND THAT INFORMATION NECESSARY TO OFFERORS IN SUBMITTING OFFERS ON THE SOLICITATION WILL BE FURNISHED AS AN AMENDMENT. THE NUMBERS THAT WERE CITED IN YOUR BID WERE "TEKTRONIX, INC., TYPE R7403N720A OSCILLOSCOPE WITH 7A15N720A, 7A15N720B & 7B50720A PLUG-INS." THE CONTRACTING OFFICER CONSULTED YOUR INSTRUMENT CATALOGS AND FOUND THAT THE TYPE R7403N OSCILLOSCOPE HAD A 60 MHZ BANDWIDTH RATHER THAN A 100 MHZ BANDWIDTH CALLED FOR IN THE SPECIFICATIONS. FURTHER, THERE WAS NO REFERENCE IN THE CATALOGS TO THE R7403N OSCILLOSCOPE IN THE 100 MHZ CAPABILITY. ADDITIONALLY, PROPOSED TYPE NUMBERS R7403N720A, 7A15N720A, 7A15N720B AND 7B50720A WERE NOT LISTED IN THE CATALOGS. AFTER THE BID OPENING, YOU WERE REQUESTED TO FURNISH A CLARIFICATION OF WHAT YOU WERE OFFERING THE GOVERNMENT. IT WAS THROUGH SUCH CLARIFICATION THAT IT BECAME APPARENT THAT YOU INTENDED TO MODIFY YOUR 60 MHZ OSCILLOSCOPE TO MEET THE 100 MHZ REQUIREMENT.

IN OUR OPINION, NO CLARIFICATION OF YOUR BID SHOULD HAVE BEEN REQUESTED. IN 50 COMP. GEN. 8 (1970), IT WAS HELD THAT A BID WHICH OFFERED AN INTERNAL PART NUMBER WAS NOT FOR CONSIDERATION. IN THAT DECISION, IT WAS STATED:

"*** WE HAVE CONSIDERED THE PROBLEM PRESENTED BY FPD'S INSERTIONS IN A NUMBER OF OTHER CASES. SEE B-152808, JANUARY 2, 1964; B-151849, SEPTEMBER 10, 1963; B-143084, JUNE 22, 1960. AND OUR DECISION IN B 152808, SUPRA, IS IN ALL MATERIAL RESPECTS ANALOGOUS TO THE PRESENT SITUATION. IN THAT DECISION, WE QUOTED WITH APPROVAL THE FOLLOWING COMMENTS SUBMITTED BY A CONTRACTING OFFICER IN CONNECTION WITH B 151849, SUPRA:

"'*** SOME BIDDERS, WHEN INTENDING TO SUPPLY MATERIAL IN COMPLETE CONFORMANCE WITH THE SPECIFICATIONS, HAVE INCLUDED THEIR PART NUMBERS FOR THEIR READY REFERENCE IN THE EVENT OF AN AWARD, WHILE OTHERS HAVE INCLUDED THEIR PART NUMBERS FOR THE PURPOSE OF OFFERING A SIMILAR BUT MATERIALLY DIFFERENT ITEM, WHICH MIGHT OR MIGHT NOT MEET THE APPLICABLE SPECIFICATIONS AND THE NEEDS OF THE GOVERNMENT. WHEN PART NUMBERS ARE INSERTED IN BIDS, THE CONTRACTING OFFICER HAS NO WAY TO DETERMINE WHETHER THE BIDDER IS OFFERING MATERIAL IN COMPLETE CONFORMANCE WITH THE SPECIFICATIONS. ***'

"THE FOREGOING APTLY STATES THE PRECISE DIFFICULTY APPARENT FROM AN EXAMINATION OF FPD'S BID, AND WE MUST INITIALLY CONCLUDE, AS WE DID IN B- 151849, THAT, IN THE ABSENCE OF AN EXPRESS STATEMENT BY FPD IN ITS BID THAT THE SPECIFIED PLANT PARTS NUMBERS WOULD COMPLY WITH THE SPECIFICATIONS, THERE IS AN INITIAL AMBIGUITY AS TO WHETHER FPD AGREED TO OFFER AN ITEM WHICH WOULD COMPLY WITH THE SPECIFICATIONS SET FORTH IN THE INVITATION.

"FAILURE, AS HERE, TO ESTABLISH CONFORMANCE OF THE PLANT PARTS NUMBERS TO THE SPECIFICATIONS PRIOR TO BID OPENING LEAVES UNRESOLVED THE AMBIGUITY. FURTHERMORE, THE APPARENT RELIANCE BY THE CONTRACTING OFFICER ON FPD'S POST-BID-OPENING LETTER OF MAY 19, WHILE, IN OUR OPINION, ESSENTIAL TO HIS CONCLUSION, IS NOT PROPER. AS WE HAVE INDICATED IN NUMEROUS CASES, RELIANCE ON SUCH INFORMATION AFFORDS THE BIDDER AN OPTION TO AFFECT THE RESPONSIVENESS OF ITS BID - AN OPTION WHICH IS DETRIMENTAL TO THE COMPETITIVE BIDDING SYSTEM. 36 COMP. GEN. 705 (1967); 37 ID. 110, 112 (1957)."

YOU HAVE STATED THAT IF YOUR BID WAS NONRESPONSIVE FOR INCLUDING PART NUMBERS, THEN THE HEWLETT-PACKARD BID WAS EQUALLY NONRESPONSIVE BECAUSE CERTAIN PART DESIGNATIONS THEREIN ARE NOT LOCATED IN ANY PUBLISHED CATALOGS. SPECIFICALLY, YOU STATE:

"1. THE DESIGNATION C-10 CANNOT BE LOCATED IN ANY PUBLISHED CATALOG INFORMATION.

"2. THE DESIGNATION H-10 CANNOT BE LOCATED IN ANY PUBLISHED CATALOG INFORMATION.

"3. THE TYPE 1820B IS NOT LISTED IN THEIR 1972 CATALOG BUT APPEARS IN THE 1970 CATALOG (THEREBY RAISING THE QUESTION OF SALE OF OBSOLETE INSTRUMENTS; ALSO CAN THE INSTRUMENTS IN A 2 YEAR OLD CATALOG REALLY BE CLASSED AS OF NEW MANUFACTURE AS PER REQUIREMENTS OF THE NEW MATERIAL CLAUSE WHEN SELLING TO THE GOVERNMENT?)"

HOWEVER, AN EXAMINATION OF THE HEWLETT-PACKARD BID REVEALS THAT IT WAS ACCOMPANED BY A COVER LETTER. THE COVER LETTER RECOGNIZES THE ABSENCE OF PUBLISHED LITERATURE ON THE C-10 AND H-10 DESIGNATIONS AND CONTAINS DATA WITH RESPECT TO SUCH DESIGNATIONS.

WITH REGARD TO YOUR THIRD POINT, THE AGE OF THE EQUIPMENT ABOVE IS NOT DETERMINATIVE OF WHETHER THE EQUIPMENT IS UNACCEPTABLE. SOMETHING MORE MUST BE PRESENT. THE EQUIPMENT MUST BE OF SUCH AGE AS TO IMPAIR ITS USEFULNESS OR SAFETY. ASPR 1-1208(A). THE FACT THAT THE EQUIPMENT IS LISTED IN A 1970, AND NOT A 1972, CATALOG DOES NOT ESTABLISH ANY IMPAIRMENT UPON THE LATTER FACTORS.

ACCORDINGLY, THE PROTEST IS DENIED.