B-176526, NOV 8, 1972

B-176526, NOV 8, 1972

BID PROTEST - FIRST ARTICLE WAIVER - ALTERNATIVE BIDS - RIGHT TO TEST SUPPLIES DECISION DENYING THE PROTEST OF INSTRUTEK, INC., AGAINST AWARD OF A CONTRACT TO CHESAPEAKE INSTRUMENT CORPORATION UNDER AN IFB ISSUED BY THE DEPARTMENT OF THE NAVY FOR HULL MOUNTED RODMETERS. WHERE A BIDDER IS ELIGIBLE FOR FIRST ARTICLE WAIVER UNDER THE TERMS OF THE SOLICITATION, SINCE THE BIDDER HAS SUPPLIED SIMILAR ARTICLES WHICH WERE ACCEPTED BY THE GOVERNMENT, THE SOLICITATION SHALL PERMIT THE SUBMISSION OF ALTERNATIVE BIDS, ONE INCLUDING A FIRST ARTICLE APPROVAL TEST AND THE OTHER INCLUDING THIS TEST "A PROVISION GIVING THE GOVERNMENT THE RIGHT TO REJECT ALL SUPPLIES IF THEY ARE OTHERWISE NOT IN CONFORMITY WITH THE CONTRACT," ALSO GIVES THE GOVERNMENT THE RIGHT TO TEST SUPPLIES FOR CONFORMITY WITH SPECIFICATIONS, SEE CROWN COAT FRONT CO. V. UNITED STATES, 292 F.2D 290 (1961).

TO INSTRUTEK, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR TELEFAX OF JULY 17, 1972, AND SUBSEQUENT CORRESPONDENCE, CONCERNING YOUR PROTEST UNDER INVITATION FOR BIDS (IFB) NO. N00024-72-B-7621 FOR HULL MOUNTED RODMETERS, TYPES IC/E24- 6YH AND IC/E28-6, ISSUED BY THE DEPARTMENT OF THE NAVY ON MAY 26, 1972.

THE FIRST ARTICLE APPROVAL CLAUSE OF THE IFB STATED THAT FIRST ARTICLE TESTS WOULD BE REQUIRED FOR ITEM 0003, FOUR UNITS OF RODMETERS, TYPE IC/E24-6YH, AND ITEM 0008, FOUR UNITS OF RODMETERS, TYPE IC/E28 6. SECTION D, EVALUATION AND AWARD FACTORS, OF THE IFB, AS AMENDED BY AMENDMENT NO. 0002, DATED JUNE 30, 1972, FURTHER STIPULATED THAT ONLY CHESAPEAKE INSTRUMENT CORPORATION WAS ELIGIBLE FOR WAIVER OF THE FIRST ARTICLE REQUIREMENTS, AND ASSOCIATED DATA ITEMS, OF THE IFB AS FOLLOWS:

"SECTION D - EVALUATION AND AWARD FACTORS

1. WAIVER OF FIRST ARTICLE REQUIREMENTS (ITEMS 0003 AND 0008 AND DATA (ITEMS 0004, 0006 AND 0009) FOR PREVIOUS SUPPLIERS ONLY:

(A) THE PREVIOUS SUPPLIERS) LISTED BELOW HAVE (HAS) SUPPLIED ONE (1) OR MORE HULL MOUNTED RODMETERS, TYPES IC/E24-6Y AND IC/E28-6 FIRST ARTICLE OR PRODUCTION EQUIPMENTS, WHICH IN THE CASE OF A FIRST ARTICLE HAS BEEN APPROVED OR CONDITIONALLY APPROVED BY THE GOVERNMENT AND IN THE CASE OR PRODUCTION EQUIPMENT HAS BEEN ACCEPTED BY THE GOVERNMENT. THE LISTED PREVIOUS SUPPLIERS) ARE (IS) THE ONLY PROSPECTIVE OFFERORS) WHO ARE (IS) ELIGIBLE FOR WAIVER OF THE FIRST ARTICLE REQUIREMENTS AND SAID DATA ITEMS OF THIS SOLICITATION.

PREVIOUS SUPPLIERS)

CHESAPEAKE INSTRUMENT CORPORATION

TERMINAL OF ATWELL ROAD

SHADYSIDE, MARYLAND 20867

THE GOVERNMENT WILL WAIVE THE FIRST ARTICLE REQUIREMENTS AND SAID DATA ITEMS FOR OFFERORS) WHO ARE (IS) LISTED ABOVE BUT WILL NOT WAIVE SAID REQUIREMENTS FOR ANY OTHER OFFEROR.

(B) OFFERORS) LISTED ABOVE MAY OFFER ON THE BASIS OF OFFER A (FIRST ARTICLE REQUIREMENTS AND SAID DATA ITEMS WAIVED AND EXCLUDED), OR OFFER B (FIRST ARTICLE REQUIREMENTS AND SAID DATA ITEMS NOT WAIVED BUT INCLUDED), OR BOTH OFFER A AND OFFER B. OFFERORS) NOT LISTED ABOVE SHOULD OFFER ON THE BASIS OF OFFER B ONLY AS OFFERS BY NON-LISTED OFFERORS) ON THE BASIS OF OFFER A WILL NOT BE CONSIDERED."

WHEN BIDS WERE OPENED ON JULY 10, 1972, IT WAS NOTED THAT CHESAPEAKE HAD SUBMITTED THE LOWEST BID, BASED ON WAIVER OF ALL THE FIRST ARTICLE REQUIREMENTS, AND THAT YOUR CONCERN HAD SUBMITTED THE SECOND LOWEST BID WITHOUT WAIVER OF SUCH REQUIREMENTS. IN VIEW THEREOF, AND INASMUCH AS THE DEPARTMENT CONSIDERS CHESAPEAKE TO BE A RESPONSIBLE BIDDER, IT HAS ANNOUNCED ITS INTENTION TO WAIVE FIRST ARTICLE TESTING AND MAKE AN AWARD TO THAT CONCERN.

YOU STATE THAT SECTION D OF THE IFB PROVIDES FOR WAIVER OF FIRST ARTICLE REQUIREMENTS FOR PREVIOUS SUPPLIERS; THAT CHESAPEAKE HAS NOT PREVIOUSLY SUPPLIED RODMETER -6YH; AND THAT THE CONTRACTING OFFICER THEREFORE COULD NOT WAIVE FIRST ARTICLE TESTING FOR THIS RODMETER.

WE NOTE THAT PARAGRAPH 1(A) OF SECTION D SPECIFICALLY STATED THAT CHESAPEAKE WAS ELIGIBLE FOR WAIVER OF FIRST ARTICLE REQUIREMENTS (ITEMS 0008 AND 0003, WITH ASSOCIATED DATA) BASED ON ITS PRIOR PRODUCTION OF RODMETERS -6Y AND E28-6. WE THINK THE LISTING OF RODMETER -6Y IN THIS PARAGRAPH CLEARLY INDICATED THE DEPARTMENT'S JUDGMENT THAT CHESAPEAKE'S PRIOR PRODUCTION OF SUCH RODMETER MADE IT A "PREVIOUS SUPPLIER" OF AN ITEM WHICH WAS SIMILAR TO RODMETER -6YH, NOTWITHSTANDING THE ABSENCE OF AN EXPRESS STATEMENT TO THIS EFFECT IN THE IFB, AND, THEREFORE, GAVE THE GOVERNMENT THE RIGHT TO WAIVE FIRST ARTICLE REQUIREMENTS FOR RODMETER - 6YH. SUCH LISTING WOULD HAVE BEEN MEANINGLESS UNDER YOUR INTERPRETATION OF THE PARAGRAPH, FOR IT IS APPARENT THAT THE DEPARTMENT COULD HAVE DENIED CHESAPEAKE WAIVER OF FIRST ARTICLE REQUIREMENTS FOR RODMETER -6YH MERELY BY OMITTING ANY REFERENCE TO RODMETER -6Y IN THE PARAGRAPH. IN VIEW OF THE FOREGOING, WE CANNOT CONCLUDE THAT SECTION D OF THE IFB DENIED THE GOVERNMENT THE RIGHT TO WAIVE FIRST ARTICLE REQUIREMENTS FOR RODMETER -6YH AS YOU CONTEND.

CONCERNING YOUR COLLATERAL ARGUMENT THAT THE IFB WOULD NOT HAVE ALLOWED CHESAPEAKE TO SUBMIT A BID ON THE BASIS OF OFFER B (FIRST ARTICLE TESTING REQUIRED) FOR RODMETER -6YH IF IT WAS THE DEPARTMENT'S INTENT TO WAIVE SUCH TESTING, ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-1903(A) PROVIDES THAT WHERE ONE OR MORE BIDDERS MAY BE ELIGIBLE FOR FIRST ARTICLE WAIVER THE SOLICITATION SHALL PERMIT THE SUBMISSION OF ALTERNATIVE BIDS, ONE INCLUDING FIRST ARTICLE APPROVAL TESTS AND THE OTHER EXCLUDING SUCH TESTS. SINCE THE REGULATION CLEARLY REQUIRES SOLICITATIONS TO PERMIT THE SUBMISSION OF ALTERNATIVE BIDS WHERE IDENTICAL OR SIMILAR SUPPLIES HAVE PREVIOUSLY BEEN ACCEPTED BY THE GOVERNMENT, WE CANNOT AGREE THAT THE INSTANT SOLICITATION, BY PERMITTING CHESAPEAKE TO SUBMIT OFFER B (FIRST ARTICLE TESTING REQUIREMENTS REQUIRED) INDICATES AN INTENT TO PRECLUDE CHESAPEAKE FROM SUBMITTING OFFER A (FIRST ARTICLE WAIVED).

YOU ALSO ARGUE THAT THE DIFFERENCES BETWEEN RODMETERS -6Y AND -6YH ARE SO SUBSTANTIAL THAT THE DEPARTMENT SHOULD NOT HAVE PERMITTED CHESAPEAKE THE WAIVER IN QUESTION. IN THIS REGARD, THE DEPARTMENT MAINTAINS THAT THE RODMETERS ARE SIMILAR, NOTWITHSTANDING CERTAIN DIFFERENCES IN THE MATERIAL AND IN THE RAKE ANGLE OF THE DEVICES, AND THAT FIRST ARTICLE WAIVER FOR RODMETER TYPE 6YH WAS PROPERLY GRANTED TO CHESAPEAKE IN ACCORDANCE WITH ASPR 1-1903(A). THAT REGULATION PROVIDES, IN EFFECT, THAT FIRST ARTICLE APPROVAL TESTS MAY BE WAIVED WHERE SUPPLIES "IDENTICAL OR SIMILAR" TO THOSE CALLED FOR HAVE BEEN PREVIOUSLY FURNISHED BY THE BIDDER. SINCE THIS IS A QUESTION INVOLVING TECHNICAL JUDGMENT, THE DEPARTMENT NEED ONLY DEMONSTRATE THAT ITS CONCLUSION IS NOT ARBITRARY OR CAPRICIOUS. BASED ON OUR REVIEW OF THE PRESENT RECORD, WE MUST CONCLUDE THAT THERE IS A SUBSTANTIAL BASIS FOR THE DEPARTMENT'S POSITION, AND WE THEREFORE MUST ACCEPT ITS CONCLUSION THAT THE ARTICLES ARE "SIMILAR."

YOU ALSO ALLEGE THAT THE GOVERNMENT IS ACTING IMPROPERLY IN FAILING TO TEST FIRST ARTICLES FOR CONFORMITY TO THE "SHEARING" REQUIREMENT, AND YOU DISAGREE WITH THE DEPARTMENT'S POSITION THAT IT HAS THE RIGHT, UNDER THE INSPECTION CLAUSE OF TH IFB, TO REQUIRE CHESAPEAKE TO DEMONSTRATE ITS CONFORMITY WITH THE "SHEARING" REQUIREMENT FOR RODMETER -6YH, WHICH WAS SET FORTH IN SECTION F, DESCRIPTION/SPECIFICATIONS, OF THE IFB AS FOLLOWS:

"(G)(1) *** THE RODMETER SHALL SHEAR OFF WHEN SUBJECTED TO A MOMENT OF 40,000 INCH-POUNDS OR MORE."

THE INSPECTION CLAUSE OF THE IFB WAS SET FORTH IN STANDARD FORM (SF) 32, GENERAL PROVISIONS, OF THE CONTRACT IN PERTINENT PART, AS FOLLOWS:

"5. INSPECTION

(A) ALL SUPPLIES *** SHALL BE SUBJECT TO INSPECTION AND TEST BY THE GOVERNMENT, TO THE EXTENT PRACTICABLE AT ALL TIMES AND PLACES INCLUDING THE PERIOD OF MANUFACTURE, AND IN ANY EVENT PRIOR TO ACCEPTANCE.

(B) IN CASE ANY SUPPLIES OR LOTS OF SUPPLIES ARE DEFECTIVE IN MATERIAL OR WORKMANSHIP OR OTHERWISE NOT IN CONFORMITY WITH THE REQUIREMENTS OF THIS CONTRACT, THE GOVERNMENT SHALL HAVE THE RIGHT EITHER TO REJECT THEM *** OR TO REQUIRE THEIR CORRECTION ***.

(C) IF ANY INSPECTION OR TEST IS MADE BY THE GOVERNMENT ON THE PREMISES OF THE CONTRACTOR OR A SUBCONTRACTOR, THE CONTRACTOR WITHOUT ADDITIONAL CHARGE SHALL PROVIDE ALL REASONABLE FACILITIES AND ASSISTANCE FOR THE SAFETY AND CONVENIENCE OF THE GOVERNMENT INSPECTORS IN THE PERFORMANCE OF THEIR DUTIES."

THE CLAUSE CLEARLY GIVES THE GOVERNMENT THE RIGHT TO REJECT ALL SUPPLIES IF THEY ARE "OTHERWISE NOT IN CONFORMITY WITH THE REQUIREMENTS OF THE CONTRACT." IN VIEW THEREOF, WE BELIEVE SUCH PROVISION AFFORDS THE GOVERNMENT THE RIGHT TO TEST SUPPLIES FOR CONFORMITY WITH ALL IFB REQUIREMENTS, INCLUDING THE "SHEARING" SPECIFICATION. SEE CROWN COAT FRONT CO. V. UNITED STATES, 292 F.2D 290 (1961).

FOR THE REASONS SET FORTH ABOVE YOUR PROTEST MUST BE DENIED.