B-177122, FEB 22, 1973, 52 COMP GEN 546

B-177122: Feb 22, 1973

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

THE RESTRICTION OF THE PROCUREMENT TO A NAMED-PART NUMBER WAS IN THE ABSENCE OF ADEQUATE SPECIFICATION DATA IN ACCORD WITH 10 U.S.C. 2304(A)(10) AND PARAGRAPH 3- 210.2(XV) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR). WHICH REQUIRES SALIENT CHARACTERISTICS TO BE LISTED WHEN A BRAND NAME OR EQUAL PROVISION IS USED. THE PROCUREMENT DID NOT RESTRICT COMPETITION SINCE PROPOSALS FROM UNAPPROVED SOURCES WERE NOT PROHIBITED. OFFERS ON OTHER THAN THE NAMED PART WERE CONSIDERED. 1973: THIS IS IN REFERENCE TO YOUR LETTER OF SEPTEMBER 27. WAS FOR 2. PROPOSALS IN RESPONSE THERETO WERE RECEIVED ON OCTOBER 3. YOU ASSERT THAT IT WAS IMPROPER TO ISSUE AN "RFP" RATHER THAN AN "IFB" FOR THIS PROCUREMENT BECAUSE THERE "IS A REASONABLE FORECAST OF COMPETITION" FOR AN ITEM THAT IS NOT "SO COMPLEX OR INDEFINITE IN DESCRIPTION THAT NUMEROUS FIRMS COULD NOT SATISFY THE AIR FORCE'S NEEDS.".

B-177122, FEB 22, 1973, 52 COMP GEN 546

CONTRACTS - NEGOTIATION - COMPETITION - EFFECT OF NEGOTIATION PROCEDURES THE PROCUREMENT OF IDLER PULLEYS BY NEGOTIATION RATHER THAN BY FORMAL ADVERTISING AND THE USE OF A BRAND NAME OR EQUAL PURCHASE DESCRIPTION, THE SOLICITATION OF OFFERS FROM APPROVED SOURCES ONLY, AND THE RESTRICTION OF THE PROCUREMENT TO A NAMED-PART NUMBER WAS IN THE ABSENCE OF ADEQUATE SPECIFICATION DATA IN ACCORD WITH 10 U.S.C. 2304(A)(10) AND PARAGRAPH 3- 210.2(XV) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), WHICH AUTHORIZES NEGOTIATION FOR REPLACEMENT PARTS OR COMPONENTS IN SUPPORT OF SPECIALLY DESIGNED EQUIPMENT, WITH ASPR 1 313(C), WHICH PROVIDES FOR THE PROCUREMENT OF REPLACEMENT PARTS FROM SOURCES THAT SATISFACTORILY MANUFACTURED OR FURNISHED PARTS IN THE PAST, AND WITH ASPR 1-1206.2(B), WHICH REQUIRES SALIENT CHARACTERISTICS TO BE LISTED WHEN A BRAND NAME OR EQUAL PROVISION IS USED, AND THE PROCUREMENT DID NOT RESTRICT COMPETITION SINCE PROPOSALS FROM UNAPPROVED SOURCES WERE NOT PROHIBITED, AND OFFERS ON OTHER THAN THE NAMED PART WERE CONSIDERED.

TO FRIED, FRANK, HARRIS, SHRIVER & KAMPELMAN, FEBRUARY 22, 1973:

THIS IS IN REFERENCE TO YOUR LETTER OF SEPTEMBER 27, 1972, AND SUBSEQUENT CORRESPONDENCE, PROTESTING ON BEHALF OF ARTKO CORPORATION AGAINST THE PROVISIONS OF REQUEST FOR PROPOSALS F34601-73-R-2821, ISSUED BY THE OKLAHOMA CITY AIR MATERIEL AREA (OCAMA), TINKER AFB, OKLAHOMA.

THE SOLICITATION, ISSUED ON SEPTEMBER 8, 1972, WAS FOR 2,428 IDLER PULLEYS, "HONEYWELL, INC. P/N 944136-1." PROPOSALS IN RESPONSE THERETO WERE RECEIVED ON OCTOBER 3, 1972, FROM HONEYWELL AND FROM U.S. DYNAMICS CORPORATION. ARTKO DID NOT SUBMIT A PROPOSAL BUT INSTEAD FILED ITS PROTEST PRIOR TO THE OCTOBER 3, 1972, DATE FOR RECEIPT OF PROPOSALS, CLAIMING THAT THE RFP PRECLUDED COMPETITION AND REQUESTING THAT A NEW SOLICITATION BE ISSUED "ON A TRULY COMPETITIVE BASIS." AWARD HAS NOT YET BEEN MADE.

YOU ASSERT THAT IT WAS IMPROPER TO ISSUE AN "RFP" RATHER THAN AN "IFB" FOR THIS PROCUREMENT BECAUSE THERE "IS A REASONABLE FORECAST OF COMPETITION" FOR AN ITEM THAT IS NOT "SO COMPLEX OR INDEFINITE IN DESCRIPTION THAT NUMEROUS FIRMS COULD NOT SATISFY THE AIR FORCE'S NEEDS." YOU STATE THAT THE ITEM HAS PREVIOUSLY BEEN FURNISHED BY BOTH HONEYWELL AND U.S. DYNAMICS, AND THAT ARTKO HAS DRAWINGS FOR THE MANUFACTURE OF THE PULLEYS WHICH HAVE BEEN APPROVED BY THE AIR FORCE. YOU ALSO ASSERT THAT A "BRAND NAME OR EQUAL" PURCHASE DESCRIPTION SHOULD HAVE BEEN USED AND THAT RESTRICTING THE PROCUREMENT TO THE HONEYWELL PART NUMBER WAS CONTRARY TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-1206.1(A). YOU ALSO TAKE EXCEPTION TO THE PROVISION OF THE RFP WHICH STATED:

ONLY THOSE SOURCES FOR THIS ITEM PREVIOUSLY APPROVED BY THE GOVERNMENT HAVE BEEN SOLICITED. THE TIME REQUIRED FOR APPROVAL OF A NEW SUPPLIER IS NORMALLY SUCH THAT AWARD CANNOT BE DELAYED PENDING APPROVAL OF THE NEW SOURCE. IF YOU HAVE NOT BEEN SOLICITED AND YOU CAN FURNISH PROOF OF YOUR PRIOR APPROVAL AS A SUPPLIER OF THIS ITEM, PLEASE NOTIFY THE PCO IN WRITING, FURNISHING SAID PROOF ALONG WITH YOUR REQUEST FOR A SOLICITATION.

YOU CLAIM THAT SINCE THE PULLEYS ARE NOT ON A QUALIFIED PRODUCTS LIST, THIS PROVISION IMPROPERLY EXCLUDES EVERY SUPPLIER EXCEPT HONEYWELL AND U.S. DYNAMICS (THE PRIOR SUPPLIERS FOR THIS ITEM) FROM HAVING THEIR PROPOSALS CONSIDERED FOR THIS PROCUREMENT. YOU STATE THAT ARTKO'S ABILITY TO SUPPLY THE REQUIRED ITEM IS A MATTER OF RESPONSIBILITY THAT CANNOT BE PREDETERMINED BY SUCH A PROVISION, BUT INSTEAD MUST BE DETERMINED BY THE SMALL BUSINESS ADMINISTRATION SINCE ARTKO IS A SMALL BUSINESS. YOU ASSERT THAT THERE IS NO "LAWFUL JUSTIFICATION FOR LIMITING COMPETITION TO PRE- SELECTED 'QUALIFIED SOURCES.'"

THE AIR FORCE REPORTS THAT BOTH HONEYWELL AND U.S. DYNAMICS ARE APPROVED SOURCES FOR THE IDLER PULLEYS, AND THAT "THE LISTING OF ONLY THE HONEYWELL PART NUMBER WAS ENTIRELY INADVERTENT" AND PROBABLY DUE TO THE FACT THAT THE TWO PARTS MANUFACTURED BY THE TWO COMPANIES ARE IDENTICAL. THE AIR FORCE REPORT FURTHER STATES THAT THE IDLER PULLEY IN QUESTION IS AN IMPORTANT COMPONENT OF THE PRESSURE RATIO TRANSDUCER UTILIZED IN THE B-52 AIRCRAFT; THAT IN ORDER TO MAINTAIN REQUIRED QUALITY AND PERFORMANCE CONTROL FOR THIS PART, IT MAY BE PURCHASED ONLY FROM APPROVED SOURCES; THAT THE AIR FORCE DOES NOT OWN SUFFICIENT DATA RIGHTS TO THIS PART TO PERMIT THE DRAFTING OF SATISFACTORY DESIGN SPECIFICATIONS; THAT THE ONLY DESCRIPTION OF THE PART AVAILABLE TO THE AIR FORCE CONSISTED OF AN AIR FORCE STOCK NUMBER AND THE PART NUMBERS OF THE APPROVED SOURCES; AND THAT THESE CIRCUMSTANCES DICTATED DRAFTING THE ITEM DESCRIPTION IN THE SOLICITATION IN TERMS OF THE STOCK NUMBER AND PART NUMBER OF THE SOURCE.

THE REPORT FURTHER STATES THAT ARTKO WAS NOT AN APPROVED SUPPLIER BECAUSE SAMPLES SUBMITTED BY ARTKO AFTER AIR FORCE HAD APPROVED ITS DRAWINGS WERE FOUND TO DEVIATE FROM THE DRAWINGS AND ARTKO HAD NEVER SUBMITTED ADDITIONAL SAMPLES FOR EVALUATION, DESPITE ITS BEING INFORMED BY LETTERS OF JUNE 12 AND JULY 21, 1972, THAT IT WOULD BE ADDED TO THE APPROVED SOURCE LIST UPON RESUBMISSION AND QUALIFICATION OF OTHER SAMPLES. AIR FORCE ALSO DENIES THAT THE PROCUREMENT WAS RESTRICTED TO HONEYWELL AND U.S. DYNAMICS, AND STATES THAT NEGOTIATION RATHER THAN FORMAL ADVERTISING WAS SELECTED BECAUSE THE GOVERNMENT DOES NOT HAVE THE RIGHTS TO DATA NECESSARY TO PREPARE ADEQUATE SPECIFICATIONS.

10 U.S.C. 2304(A)(10) AND ASPR 3-210.2(XV) AUTHORIZE THE USE OF NEGOTIATION IN LIEU OF FORMAL ADVERTISING WHEN "THE CONTEMPLATED PROCUREMENT IS FOR PARTS OR COMPONENTS BEING PROCURED AS REPLACEMENT PARTS IN SUPPORT OF EQUIPMENT SPECIALLY DESIGNED BY THE MANUFACTURER, WHERE DATA AVAILABLE IS NOT ADEQUATE TO ASSURE THAT THE PART OR COMPONENT WILL PERFORM THE SAME FUNCTION IN THE EQUIPMENT AS THE PART OR COMPONENT IT IS TO REPLACE." IT WAS PURSUANT TO THESE PROVISIONS THAT THE CONTRACTING OFFICER FOUND THAT ADEQUATE DATA WAS NOT AVAILABLE AND DETERMINED THAT NEGOTIATION WAS REQUIRED. THE CONTRACTING OFFICER'S FINDINGS IN SUPPORT OF THE DECISION TO NEGOTIATE ARE MADE FINAL BY 10 U.S.C. 2310(B) AND ARE NOT SUBJECT TO QUESTION BY OUR OFFICE. FURTHERMORE, THE FACT THAT MORE THAN ONE FIRM COULD PROVIDE THE REQUIRED ITEM WOULD NOT PRECLUDE THE USE OF NEGOTIATION ALTHOUGH SUCH NEGOTIATION IS REQUIRED BY 10 U.S.C. 2304(G) TO BE COMPETITIVE TO THE EXTENT POSSIBLE.

IT IS YOUR CLAIM, HOWEVER, THAT THE PROCUREMENT IS NOT COMPETITIVE IN THAT CONSIDERATION OF OFFERS IS RESTRICTED ONLY TO THOSE SUBMITTED BY FIRMS PREVIOUSLY FOUND TO BE QUALIFIED, IN THIS CASE HONEYWELL AND U.S. DYNAMICS. WE DO NOT AGREE THAT ONLY THOSE COMPANIES' PROPOSALS COULD BE CONSIDERED FOR AWARD. THE RFP PROVISION YOU REFER TO WARNS POTENTIAL OFFERORS THAT NORMALLY TIME WILL NOT PERMIT APPROVAL OF NEW SOURCES PRIOR TO AWARD; HOWEVER, IT DOES NOT PROHIBIT SUBMISSION AND CONSIDERATION OF PROPOSALS FROM PREVIOUSLY UNAPPROVED SOURCES. B 176256, NOVEMBER 30, 1972. THUS, WE HAVE UPHELD AWARD TO A FIRM FOUND TO BE CAPABLE OF FURNISHING AN ACCEPTABLE PRODUCT NOTWITHSTANDING SOLICITATION LANGUAGE WHICH APPEARED TO RESTRICT THE PROCUREMENT TO A SPECIFIED MANUFACTURER. -174384, MAY 9, 1972. SEE B-172901, OCTOBER 14, 1971. WE BELIEVE, HOWEVER, THAT THE RFP PROVISION COULD HAVE BEEN INTERPRETED BY POTENTIAL OFFERORS AS RESTRICTING CONSIDERATION OF OFFERS TO PREVIOUSLY APPROVED SOURCES. ACCORDINGLY, WE ARE SUGGESTING TO THE SECRETARY OF THE AIR FORCE THAT THE PROVISION BE REWRITTEN TO MAKE IT CLEAR THAT COMPETITION IS NOT LIMITED TO PRIOR SUPPLIERS.

WE THINK THE TYPE OF QUALIFICATION PROCEDURES USED HERE TO WHICH YOU ALSO OBJECT, IS CONTEMPLATED BY ASPR 1-313(C). THAT SECTION AUTHORIZES PROCUREMENT OF REPLACEMENT PARTS "ONLY FROM SOURCES THAT HAVE SATISFACTORILY MANUFACTURED OR FURNISHED SUCH PARTS IN THE PAST, UNLESS FULLY ADEQUATE DATA *** TEST RESULTS, AND QUALITY ASSURANCE PROCEDURES, ARE AVAILABLE WITH THE RIGHT TO USE FOR PROCUREMENT PURPOSES.***." THINK THE AIR FORCE COULD PROPERLY REQUIRE A PROSPECTIVE OFFEROR TO FURNISH DATA AND SAMPLES FOR EXAMINATION AND POSSIBLE TESTING AS A PREREQUISITE TO RECEIVING AWARD FOR THE NEEDED PARTS, SINCE AWARD COULD BE LIMITED TO APPROVED SOURCES. THE USE OF THE QUALIFICATION PROCEDURE FOR DETERMINING APPROVED SOURCES HAS BEEN RECOGNIZED AS AN APPROPRIATE WAY TO QUALIFY A NEW SOURCE. B-176256, NOVEMBER 30, 1972. WE NOTE THAT ON A PREVIOUS PROCUREMENT, WHICH YOU ALSO PROTESTED, U.S. DYNAMICS BECAME AN APPROVED SOURCE AND WAS AWARDED A CONTRACT PURSUANT TO THIS TYPE OF QUALIFICATION PROCEDURE. 51 COMP. GEN. 755(1972). SUBSEQUENT TO THAT PROCUREMENT, AS INDICATED ABOVE, ARTKO RECEIVED APPROVAL OF ITS DRAWING, BUT THE AIR FORCE DID NOT APPROVE ITS SAMPLES. ARTKO HAS NOT FURNISHED ADDITIONAL SAMPLES, ALTHOUGH AIR FORCE HAS STATED ITS WILLINGNESS TO APPROVE ARTKO AS A SUPPLIER UPON SUBMISSION OF ACCEPTABLE SAMPLES.

WITH REGARD TO YOUR ASSERTION REGARDING USE OF A BRAND NAME OR EQUAL PROVISION, THE USE OF SUCH A PURCHASE DESCRIPTION WOULD REQUIRE THE LISTING OF SALIENT CHARACTERISTICS OF THE DESIRED ITEM (ASPR 1 1206.2(B) AND 49 COMP. GEN. 274(1969)) AND WE UNDERSTAND THE AIR FORCE POSITION TO BE THAT ITS LACK OF SUFFICIENT DATA FOR USE IN THE PROCUREMENT WOULD PRECLUDE SUCH A LISTING. SEE B-173230, SEPTEMBER 27, 1971.

ALSO, WE THINK YOUR ARGUMENT REGARDING THE DETERMINATION OF ARTKO'S RESPONSIBILITY BY THE SMALL BUSINESS ADMINISTRATION IS NOT APPLICABLE, SINCE ARTKO WAS NOT PRECLUDED FROM SUBMITTING A PROPOSAL UNDER THIS RFP OR FROM RECEIVING AWARD UPON A DETERMINATION THAT IT WAS A QUALIFIED SOURCE.

FINALLY, WHILE IT IS CLEAR THAT THE SOLICITATION SHOULD HAVE SPECIFIED THE U.S. DYNAMICS' PART NUMBER AS WELL AS THE HONEYWELL PRODUCT, ARTKO WAS NOT PREJUDICED BY THIS OMISSION, AND THE CONTRACTING OFFICER STATES THAT THE OMISSION WAS INADVERTENT AND THAT THE U.S. DYNAMICS' PROPOSAL IS BEING CONSIDERED.

FOR THE FOREGOING REASONS, THE PROTEST IS DENIED.