B-180732, B-181971, B-182091, JULY 1, 1975, 55 COMP.GEN. 1

B-180732,B-182091,B-181971: Jul 1, 1975

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CONTRACTS - SPECIFICATIONS - QUALIFIED PRODUCTS - LISTING - RESTRICTIVE INTERPRETATION AGENCY'S POSITION THAT ONLY BIDS SUBMITTED BY MANUFACTURERS OR THEIR AUTHORIZED DISTRIBUTORS UNDER QUALIFIED PRODUCTS LIST (QPL) PROCUREMENTS CAN BE CONSIDERED RESPONSIVE IS OVERLY RESTRICTIVE INTERPRETATION OF QPL REQUIREMENTS CONTAINED IN ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1- 1101 ET SEQ. IS RESPONSIVE TO INVITATION FOR BIDS (IFB). OFFERED - TESTS - QUALIFIED PRODUCTS ACCEPTANCE TEST REQUIREMENTS - APPLICABLE TO ALL BIDDERS QUALIFIED PRODUCTS LIST ACCEPTANCE TEST REQUIREMENTS IN MILITARY SPECIFICATION INCORPORATED INTO IFB FOR SUPPLY OF QPL PRODUCTS ARE APPLICABLE TO ALL BIDDERS. EVEN THOUGH TESTS MAY HAVE ONCE BEEN PERFORMED BY MANUFACTURER TO GOVERNMENT'S SATISFACTION OR PRODUCTS ARE FORMER GOVERNMENT SURPLUS PROPERTY.

B-180732, B-181971, B-182091, JULY 1, 1975, 55 COMP.GEN. 1

CONTRACTS - SPECIFICATIONS - QUALIFIED PRODUCTS - LISTING - RESTRICTIVE INTERPRETATION AGENCY'S POSITION THAT ONLY BIDS SUBMITTED BY MANUFACTURERS OR THEIR AUTHORIZED DISTRIBUTORS UNDER QUALIFIED PRODUCTS LIST (QPL) PROCUREMENTS CAN BE CONSIDERED RESPONSIVE IS OVERLY RESTRICTIVE INTERPRETATION OF QPL REQUIREMENTS CONTAINED IN ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1- 1101 ET SEQ., AND WOULD CONSTITUTE QPL A QUALIFIED BIDDERS LIST. BIDS - OMISSIONS - INFORMATION - QUALIFIED PRODUCTS INFORMATION - TEST NUMBER IDENTIFICATION BIDDER UNDER QPL PROCUREMENT, WHO FAILS TO IDENTIFY MANUFACTURER OR APPLICABLE QPL TEST NUMBER, BUT WHO IDENTIFIES PRODUCT'S MANUFACTURER'S DESIGNATION, IS RESPONSIVE TO INVITATION FOR BIDS (IFB), AND OMISSIONS MAY BE WAIVED AS MINOR INFORMALITIES. CONTRACTS - SPECIFICATIONS - CONFORMABILITY OF EQUIPMENT, ETC., OFFERED - TESTS - QUALIFIED PRODUCTS ACCEPTANCE TEST REQUIREMENTS - APPLICABLE TO ALL BIDDERS QUALIFIED PRODUCTS LIST ACCEPTANCE TEST REQUIREMENTS IN MILITARY SPECIFICATION INCORPORATED INTO IFB FOR SUPPLY OF QPL PRODUCTS ARE APPLICABLE TO ALL BIDDERS, NOT JUST MANUFACTURERS, EVEN THOUGH TESTS MAY HAVE ONCE BEEN PERFORMED BY MANUFACTURER TO GOVERNMENT'S SATISFACTION OR PRODUCTS ARE FORMER GOVERNMENT SURPLUS PROPERTY. CONTRACTS - SPECIFICATIONS - TESTS - NECESSARY AMOUNT OF TESTING - ADMINISTRATIVE DETERMINATION NO PROBATIVE EVIDENCE HAS BEEN PRESENTED WHICH WOULD SHOW QPL ACCEPTANCE TESTS IN MILITARY SPECIFICATION INCORPORATED INTO IFB FOR SUPPLY OF QPL PRODUCTS ARE NOT NECESSARY TO DETERMINE PRODUCTS' ACCEPTABILITY. RESPONSIBILITY FOR ESTABLISHMENT OF TESTS AND PROCEDURES IS WITHIN AMBIT OF TECHNICAL ACTIVITY RESPONSIBLE FOR QUALIFICATION OF QPL PRODUCTS. CONTRACTS - SPECIFICATIONS - MILITARY - ACCEPTANCE TEST REQUIREMENTS - QUALIFIED PRODUCTS CONTRACTOR, WHO SUPPLIES PRODUCTS UNDER QPL PROCUREMENT, IS NOT RELIEVED FROM ITS OBLIGATION TO PERFORM ACCEPTANCE TESTS REQUIRED BY MILITARY SPECIFICATION ON BASIS THAT PRODUCT PASSED QUALIFICATION TESTS. BIDDERS - QUALIFICATIONS - PREAWARD SURVEYS - INFORMATION TIMELINESS CONTRACTING OFFICER'S DETERMINATION THAT BIDDER WAS NONRESPONSIBLE FOR QPL PROCUREMENT, WHICH WAS BASED ON NEGATIVE PREAWARD SURVEY CONDUCTED OVER 5 MONTHS PREVIOUS FOR PROCUREMENT OF DIFFERENT ARTICLE, HAD NO REASONABLE BASIS. BIDS - EVALUATION - CONTRARY TO TERMS OF SOLICITATION - PRESUMPTION OF UNACCEPTABILITY AGENCY'S PRESUMPTION THAT BIDDERS OFFERING SURPLUS MATERIAL CAN MEET QPL REQUIREMENTS ONLY IF BIDDER AFFIRMATIVELY VOLUNTEERS AND SHOWS IN ITS BID THAT IT COULD MEET ACCEPTANCE TEST, QPL, AND OTHER GOVERNMENT REQUIREMENTS, IS CONTRARY TO BASIC PROCUREMENT POLICY. CONTRACTS - SPECIFICATIONS - CONFORMABILITY OF EQUIPMENT, ETC., OFFERED - NONCOMPLIANCE - REJECTION OF BID BIDDER FOR NAVY QPL PRODUCTS, WHO OFFERS PRODUCTS ON WHICH ELASTOMER COMPONENTS EXCEED AGE LIMITATIONS ALLOWED UNDER APPLICABLE SHELF LIFE REQUIREMENTS, WHICH HAVE NOT BEEN SHOWN TO BE UNREASONABLE, IS NONRESPONSIVE. ALLEGEDLY DIFFERENT AIR FORCE SHELF LIFE REQUIREMENTS ARE NOT NECESSARILY DETERMINATIVE OF NAVY'S SHELF LIFE REQUIREMENTS. BIDDERS - RESPONSIBILITY V. BID RESPONSIVENESS - BIDDER ABILITY TO PERFORM QUESTION WHETHER SURPLUS BIDDERS UNDER SOLICITATIONS FOR AIRCRAFT AND AIRCRAFT RELATED PARTS-- INCORPORATING ANA BULLETIN NO. 438C (AGE CONTROLS FOR AGE-- SENSITIVE ELASTOMERIC ITEMS)-- CAN COMPLY WITH BULLETIN REQUIREMENTS FOR IDENTIFICATION, MARKING, AND STORAGE OF PARTS CONTAINING ELASTOMERIC COMPONENTS IS ONE AFFECTING RESPONSIBILITY. CONTRACTS - SPECIFICATIONS - "NEW MATERIAL" CLAUSE - EXCEPTION - NEW, UNUSED SURPLUS "NEW MATERIAL" CLAUSE IN SOLICITATION DOES NOT PRECLUDE BIDS OFFERING NEW UNUSED UNRECONDITIONED SURPLUS MATERIAL WHICH IS NOT OVERAGE OR DETERIORATED. CONTRACTS - SPECIFICATIONS - GOVERNMENT SURPLUS CLAUSE - FAILURE TO INCLUDE - EFFECT NAVY'S CONTENTION THAT SURPLUS MATERIAL CAN NEVER BE CONSIDERED UNLESS IT HAS BEEN SPECIFICALLY INVITED BY SOLICITATION IS OVERLY RESTRICTIVE INTERPRETATION OF ASPR 1-1208(C). PROVISION STATES THAT NO SPECIAL CONSIDERATION OR WAIVER OF CONTRACT REQUIREMENTS CAN BE EXTENDED TO SURPLUS MATERIAL BY VIRTUE OF FACT THAT IT ONCE WAS OWNED BY GOVERNMENT. THEREFORE, AGENCY MUST DETERMINE WHETHER SURPLUS IS ACCEPTABLE FOR EACH PROCUREMENT AND INCLUDE APPROPRIATE LIMITATION IN SOLICITATION IF IT IS DETERMINED THAT SURPLUS IS NOT ACCEPTABLE. FAILURE TO INCLUDE "GOVERNMENT SURPLUS" CLAUSE IS NOT SUFFICIENT NOTICE TO BIDDERS THAT SURPLUS IS NOT ACCEPTABLE. CONTRACTS - SPECIFICATIONS "NEW MATERIAL" CLAUSE - RECONDITIONING V. REFURBISHING UPON EXAMINATION OF PART, WHICH REVEALED IT COULD BE EASILY AND QUICKLY DISASSEMBLED AND REASSEMBLED BY NONTECHNICAL PEOPLE, AND IN ABSENCE OF ANY APPARENT CRITICAL TOLERANCES FOR REASSEMBLY, GENERAL ACCOUNTING OFFICE (GAO) HAS DOUBTS WHETHER BIDDER'S PROPOSED REPLACEMENT OF OVERAGE ELASTOMER COMPONENTS IN NEW UNUSED "CRITICAL" AIRCRAFT RELATED PART WOULD CONSTITUTE "RECONDITIONING" IN VIOLATION OF "NEW MATERIAL" CLAUSE. HOWEVER, GAO CANNOT DISAGREE WITH ASO DETERMINATION THAT ELASTOMER REPLACEMENT IN DIFFERENT AIRCRAFT PART CONSTITUTED "RECONDITIONING." BIDS - REJECTION - NONRESPONSIVE - BIDDER'S INTENT NOT INDICATED BIDDER, WHO INTENDS TO "REFURBISH" NEW UNUSED PARTS BY REPLACING ELASTOMER COMPONENTS, BUT WHO DOES NOT INDICATE THIS INTENT IN ITS BID, MAY BE REJECTED AS NONRESPONSIVE WHERE BID INDICATES THAT PARTS BIDDER IS OFFERING WOULD EXCEED ALLOWABLE SHELF LIFE UNLESS ELASTOMERS ARE REPLACED. CONTRACTS - SPECIFICATIONS - QUALIFIED PRODUCTS - CHANGES - MACHINERY, PRODUCTS, ETC. ALTHOUGH IT IS WITHIN DISCRETION OF QPL PREPARING ACTIVITY TO DETERMINE WHETHER REPLACEMENT OF ELASTOMER COMPONENTS IN QPL AIRCRAFT AND AIRCRAFT RELATED PARTS HAS SUFFICIENTLY CHANGED THE PARTS SO AS TO CONSIDER THEM NO LONGER QUALIFIED, THERE IS SOME QUESTION WHETHER THEY REMAIN QUALIFIED PRODUCTS IN VIEW OF DISASSEMBLY AND REASSEMBLY PROCESSES NECESSARY TO REPLACE ELASTOMERS. BIDS - INVITATION FOR BIDS CANCELLATION - NOT PREJUDICIAL TO OTHER BIDDERS ALTHOUGH IT WOULD SEEM THAT CONTRACTING OFFICER, WHO CANCELED IFB FOR SUPPLY OF AIRCRAFT PARTS AFTER DETERMINING THAT NONRESPONSIVE BID OFFERING SURPLUS MATERIAL MET GOVERNMENT'S ACTUAL MINIMUM NEEDS FOR MUCH LOWER COST AND WHO NEGOTIATED SOLE-SOURCE CONTRACT WITH SURPLUS BIDDER ON "PUBLIC EXIGENCY" BASIS, ACTED IMPROPERLY IN FAILING TO SOLICIT OTHER BIDDERS ON SAME BASIS, OTHER BIDDERS WERE NOT PREJUDICED SINCE IT IS UNLIKELY THEY WOULD HAVE OFFERED SURPLUS AND LOW SURPLUS BID WAS RESPONSIVE TO IFB. CONTRACTS - SPECIFICATIONS - QUALIFIED PRODUCTS - SOLE SOURCE NEGOTIATION LOW BIDDER OFFERING SURPLUS PARTS UNDER IFB FOR SUPPLY OF QPL AIRCRAFT PARTS APPEARS TO BE RESPONSIVE BIDDER, INASMUCH AS SURPLUS BIDS WERE NOT PRECLUDED IN QPL PROCUREMENTS AND BID OFFERING NEW, UNUSED, UNRECONDITIONED, NONDETERIORATIVE SURPLUS PARTS WAS NOT IN VIOLATION OF "NEW MATERIAL" CLAUSE. DECISION TO CANCEL AND NEGOTIATE SOLE-SOURCE AWARD ON VIRTUALLY SAME BASIS TO SURPLUS BIDDER WAS PROPER. CONTRACTS - SPECIFICATIONS - MILITARY - CONFORMANCE REQUIREMENT ALTHOUGH AGENCY'S DETERMINATION WHETHER EXISTING MILITARY SPECIFICATIONS WILL MEET ITS ACTUAL NEEDS WILL NOT BE QUESTIONED UNLESS SHOWN TO HAVE NO REASONABLE BASIS, MILITARY SPECIFICATIONS ARE MANDATORY, AND PROCURING AGENCY SHOULD, UNDER ASPR 1-1108, ASK QPL PREPARING ACTIVITY FOR WAIVER OF THOSE REQUIREMENTS (INCLUDING CONTRACT ACCEPTANCE TEST REQUIREMENTS) INCLUDED IN MILITARY SPECIFICATION DEFINING QUALIFIED PRODUCT, WHICH ARE NOT TO BE REQUIRED OF SOLE-SOURCE CONTRACTOR RECEIVING AWARD AFTER CANCELLATION OF QPL SOLICITATION. CONTRACTS - SPECIFICATIONS - QUALIFIED PRODUCTS - REQUIREMENT - WAIVER CANCELLATION OF IFB AND NEGOTIATION OF SOLE-SOURCE AWARD TO LOW BIDDER OFFERING SURPLUS MATERIAL WAS NOT IMPROPER, EVEN THOUGH CONTRACTING OFFICER FAILED TO ASK QPL PREPARING ACTIVITY FOR REQUIRED WAIVER OF THOSE QPL REQUIREMENTS, WHICH WERE NOT REQUIRED OF BIDDER, PURSUANT TO ASPR 1- 1108; HOWEVER, RECOMMENDATION IS MADE THAT WAIVER BE GOTTEN PRIOR TO EXERCISE OF OPTION UNDER CONTRACT. BIDDERS - QUALIFICATIONS - MANUFACTURER OR DEALER - DETERMINATION PROTEST THAT SURPLUS DEALER IS NOT "REGULAR DEALER" WITHIN PURVIEW OF WALSH-HEALEY PUBLIC CONTRACTS ACT, 41 U.S.C. 35-45, AND RELATED IMPLEMENTING REGULATIONS, ASPR 12-601 AND 12-607, AND THEREFORE IS INELIGIBLE FOR AWARD, IS NOT FOR CONSIDERATION, SINCE SUCH DETERMINATIONS ARE EXCLUSIVELY VESTED WITH CONTRACTING OFFICER SUBJECT TO FINAL REVIEW BY DEPARTMENT OF LABOR. BIDS - COMPETITIVE SYSTEM - RESTRICTIONS ON COMPETITION - PROHIBITION - SURPLUS MATERIAL NAVY "BLANKET" PROHIBITION OF ALL SURPLUS MATERIAL (WHETHER NEW AND UNUSED SURPLUS OR RECONDITIONED SURPLUS) IS NOT IN COMPLIANCE WITH REQUIREMENTS FOR "FREE AND OPEN" COMPETITION AND DRAFTING SPECIFICATIONS STATING GOVERNMENT'S ACTUAL NEEDS. NAVY CONTRACTING OFFICER AND COGNIZANT TECHNICAL PERSONNEL SHOULD DETERMINE, IF POSSIBLE UNDER CIRCUMSTANCES OF PARTICULAR PROCUREMENT, AT TIME SOLICITATION IS ISSUED WHETHER SURPLUS AND/OR RECONDITIONED MATERIAL WILL MEET ITS ACTUAL NEEDS.

IN THE MATTER OF D. MOODY & COMPANY, INC.; ASTRONAUTICS CORPORATION OF AMERICA, JULY 1, 1975:

TABLE OF CONTENTS

PAGE

INTRODUCTION . . . 4

IFB N00383-74-B-0332 (B-180732) . . . 5

IFB N00383-74-B-0515 (B-181971) . . . 6

IFB N00383-74-B-0596 (B-182091) . . . 7

QPL REQUIREMENTS . . . 9

SUFFICIENCY OF IDENTIFICATION OF QPL PRODUCT OFFERED . . . 13

QPL ACCEPTANCE TEST REQUIREMENTS AND BIDDER RESPONSIBILITY . . . 15

SHELF LIFE LIMITATIONS . . . 20

"NEW MATERIAL" CLAUSE . . . 22

"RECONDITIONED" MATERIAL . . . 25

SUMMARY OF B-180732 AND B-181971 . . . 28

B-182091 . . . 28

WALSH-HEALEY ACT . . . 34

CONCLUSIONS . . . 35

INTRODUCTION

THIS DECISION CONCERNS PROTESTS OF THREE PROCUREMENTS OF AIRCRAFT AND AIRCRAFT RELATED PARTS BY THE UNITED STATES NAVY AVIATION SUPPLY OFFICE (ASO), PHILADELPHIA, PENNSYLVANIA. THESE PROTESTS GENERALLY INVOLVE THE REQUIREMENTS IN THESE PROCUREMENTS THAT THE ITEMS FURNISHED THEREUNDER BE APPROVED FOR INCLUSION ON A QUALIFIED PRODUCTS LIST (QPL) AND ASO'S POLICY CONCERNING BIDS OFFERING SURPLUS PARTS UNDER QPL PROCUREMENTS. INASMUCH AS WE HAVE FOUND THAT ASO IS ERRONEOUSLY AND OVERLY RESTRICTIVELY INTERPRETING THE APPLICABLE REGULATIONS, WE WILL TAKE THIS OPPORTUNITY TO REVIEW ASO'S POLICY IN THIS REGARD.

WE BELIEVE IT APPROPRIATE TO TREAT THESE PROTESTS TOGETHER, EVEN THOUGH DIFFERENT PARTIES ARE INVOLVED UNDER EACH PROCUREMENT, SINCE THE ISSUES INVOLVED SUBSTANTIALLY OVERLAP. NONE OF THE INTERESTED PARTIES HAS BEEN PREJUDICED BY THIS TREATMENT, SINCE THEY WERE GIVEN FULL OPPORTUNITY TO COMMENT ON THE ISSUES AND OUR TREATMENT OF THESE PROTESTS IS CONSISTENT.

INVITATION FOR BIDS (IFB) N00383-74-B-0332

(OUR REFERENCE: B-180732)

IFB N00383-74-B-0332 WAS ISSUED BY ASO ON DECEMBER 7, 1973, FOR THE PROCUREMENT OF 42 AIRCRAFT HYDROPNEUMATIC PRESSURE ACCUMULATORS, FEDERAL STOCK NUMBER (FSN) 1R 1650-640-8486 YX, GOVERNMENT DESIGNATION MS 28700- 4. CLAUSE F-621 OF THE IFB REQUIRED THAT THE ARTICLES FURNISHED WERE TO BE IN ACCORDANCE WITH MILITARY SPECIFICATION MIL-A 5498C (ASG) OF FEBRUARY 25, 1957, AND MILITARY STANDARD MS-28700. PARAGRAPH 3.1 OF MIL-A-5498C (ASG) REQUIRED:

THE ACCUMULATORS FURNISHED UNDER THIS SPECIFICATION SHALL BE A PRODUCT WHICH HAS BEEN TESTED AND HAS PASSED THE QUALIFICATION TESTS SPECIFIED HEREIN.

THE APPLICABLE QPL FOR MIL-A-5498C (ASG) IS QPL 5498-18 OF MAY 9, 1970.

IN SECTION L-1200 PART II OF THE IFB, THE "NEW MATERIAL" CLAUSE SET OUT IN ARMED SERVICES PROCUREMENT REGULATION (ASPR) SEC. 7-104.48 (1973 ED.) WAS INCORPORATED BY REFERENCE. SEE ASPR SEC. 1-1208(A) (1973 ED.). THE "NEW MATERIAL" CLAUSE PROVIDES GENERALLY THAT THE BIDDER FURNISH " * * * NEW (NOT USED OR RECONDITIONED, AND NOT OF SUCH AGE OR SO DETERIORATED AS TO IMPAIR THEIR USEFULNESS OR SAFETY) * * * " ARTICLES UNDER THE CONTRACT UNLESS PROVISION IS MADE FOR OTHER THAN NEW MATERIAL IN THE IFB. THERE WAS NO PROVISION FOR THE FURNISHING OF OTHER THAN NEW MATERIAL UNDER THE CONTRACT.

IN RESPONSE TO THE IFB, THREE TIMELY BIDS (PARKER-HANNIFIN CORPORATION'S BID WAS LATE AND DETERMINED TO BE NOT ACCEPTABLE) WERE RECEIVED BY BID OPENING, JANUARY 8, 1074, AS FOLLOWS: (TABLE OMITTED)

YORK AND SPRAGUE BOTH HAD PRODUCTS QUALIFIED FOR LISTING ON QPL-5498 18 UNDER MS-28700-4. IN ITS BID, MOODY OFFERED:

* * * 42 EA. 1650-640-8486YX ACCUMULATOR P/N (PART NUMBER) 1008700-4 AT $97.00 EA. NEW SURPLUS OBTAINED FROM AF SURPLUS APPROXIMATELY MAY '70.

UPON PERUSING THE QPL, IT CAN BE ASCERTAINED THAT THE BENDIX CORPORATION (BENDIX) IS LISTED THE MANUFACTURER OF P/N 1008700-4 UNDER MS-28700-4. HOWEVER, MOODY IS NOWHERE LISTED ON THE QPL.

ASO REJECTED MOODY'S BID BECAUSE MOODY WAS NOT INCLUDED ON THE APPLICABLE QPL, THE SURPLUS MATERIAL OFFERED BY MOODY WAS FOUND TO BE IN VIOLATION OF THE "NEW MATERIAL" CLAUSE AND MOODY WAS FOUND TO BE NOT A RESPONSIBLE CONTRACTOR. SUBSEQUENTLY, MOODY PROTESTED TO OUR OFFICE AGAINST THE REJECTION OF ITS BID.

IFB N00383-74-B-0515 (OUR REFERENCE: B-181971)

IFB N00383-74-B-0515 WAS ISSUED BY ASO ON MARCH 18, 1974, FOR THE PROCUREMENT OF 555 OXYGEN MASK HOSE CONNECTORS, TYPE MC-3A, FSN 1R 1660 694-8121 LX, GOVERNMENT DESIGNATION MS-22016. CLAUSE F-621 REQUIRED THAT THE ARTICLES FURNISHED WERE TO BE IN ACCORDANCE WITH MILITARY SPECIFICATION MIL-C-19246C AND QPL 19246-4 OF JANUARY 25, 1973. THE "NEW MATERIAL" CLAUSE WAS ALSO INCORPORATED BY REFERENCE INTO THE IFB AND NO PROVISION WAS MADE FOR OTHER THAN "NEW" MATERIAL.

IN RESPONSE TO THE IFB, FOUR BIDS WERE RECEIVED BY BID OPENING, APRIL 9, 1974, AS FOLLOWS: (TABLE OMITTED)

FLUID AND SIERRA BOTH HAD PRODUCTS QUALIFIED FOR LISTING ON QPL 19246-4. IN ITS BID MOODY OFFERED:

* * * 555 EA. 1660-694-8121 LX CONNECTOR SIERRA P/N 224-01 TYPE MC 3A AT $4.24 EA. NEW SURPLUS OBTAINED FROM AF SURPLUS APPROXIMATELY JUNE '69.

SIERRA P/N 224-01 IS A PART LISTED ON THE QPL. HOWEVER, MOODY IS NOWHERE LISTED ON THE QPL.

ASO REJECTED MOODY'S BID BECAUSE MOODY WAS NOT INCLUDED ON THE APPLICABLE QPL AND MOODY'S OFFER OF SURPLUS MATERIAL WAS IN VIOLATION OF THE "NEW MATERIAL" CLAUSE. ASO ALSO NOTED THAT THE ELASTOMER COMPONENTS IN THE SURPLUS MATERIAL OFFERED EXCEEDED THE 12-MONTH AGE REQUIREMENTS OF PARAGRAPH 3.3.1.1 OF MIL-C-19246C. SUBSEQUENTLY, MOODY PROTESTED TO OUR OFFICE AGAINST THE REJECTION OF ITS BID STATING THAT IT WAS INTENDING TO "REFURBISH" THE OXYGEN MASK HOSE CONNECTORS BY REPLACING THE ELASTOMER COMPONENTS. HOWEVER, ASO HAS STATED THAT THIS "RECONDITIONING" OF THE CONNECTORS STILL COULD NOT MAKE MOODY'S BID ACCEPTABLE.

IFB N00383-74-B-0596 (OUR REFERENCE: B-182091)

IFB N00383-74B-0596 WAS ISSUED BY ASO ON APRIL 30, 1974, REQUESTING BIDS ON FIVE STEPLADDER QUANTITIES (8 EA., 10 EA., 12 EA., 25 EA., 50 EA.) ATTITUDE INDICATORS, ARU-2B/A, IN ACCORDANCE WITH MILITARY SPECIFICATION MIL-I-27193B (USAF) OF MARCH 8, 1963, AND ONE LOT OF RELATED DATA. SECTION 3.1 OF MIL-I-27193B (USAF) REQUIRED:

THE INDICATORS FURNISHED UNDER THIS SPECIFICATION SHALL BE A PRODUCT WHICH HAS BEEN TESTED, AND PASSED THE QUALIFICATION TESTS SPECIFIED HEREIN, AND HAS BEEN LISTED ON OR APPROVED FOR LISTING ON THE APPLICABLE QUALIFIED PRODUCTS LIST.

THE APPLICABLE QPL FOR MIL-I-27193B (USAF) IS QPL 27193-6 OF JANUARY 2, 1970. THE "NEW MATERIAL" CLAUSE WAS ALSO INCORPORATED BY REFERENCE INTO THE IFB, BUT NO PROVISION WAS MADE FOR OTHER THAN "NEW" MATERIAL.

THE THREE BIDS RECEIVED BY BID OPENING JUNE 5, 1974, WERE EVALUATED ON THE BASIS OF FURNISHING 12 INDICATORS AS FOLLOWS: (TABLE OMITTED)

ASTRONAUTICS AND LSI BOTH HAD PRODUCTS QUALIFIED FOR LISTING ON QPL 27193 -6. IN ITS BID ALDEN OFFERED ITEMS WITH MANUFACTURER'S P/N 102379 MANUFACTURED BY ASTRONAUTICS IN ACCORDANCE WITH QPL-27193-6 AND MIL-I 27193 WITH FSN 6610-939-5237. ALDEN STATED THAT THE INDICATORS OFFERED WERE IN:

NEW CONDITION, FORMER GOV'T SURPLUS PURCHASED FROM MCCLELLAN AIR FORCE BASE SEALED BID SALE. THE ABOVE PRICE INCLUDES ANY REFURBISHING, TESTING, AND PACKING IN ACCORDANCE WITH CONTRACT.

THE NAVY CONSIDERED ALDEN'S BID TO BE NONRESPONSIVE TO THE IFB SINCE ALDEN WAS NOT LISTED ON THE APPLICABLE QPL AND ITS OFFER OF SURPLUS MATERIAL WAS IN VIOLATION OF THE "NEW MATERIAL" CLAUSE. HOWEVER, IN VIEW OF THE DIFFERENCE BETWEEN THE BID PRICES OF ALDEN AND ASTRONAUTICS, THE CONTRACTING OFFICER REQUESTED THE DEFENSE CONTRACT ADMINISTRATIVE SERVICES REGION (DCASR), BALTIMORE, MARYLAND, TO CONDUCT A PREAWARD SURVEY ON ALDEN AND ANSWER CERTAIN QUESTIONS REGARDING THE HISTORY, CONDITION AND SOURCE OF THE ARTICLES BEING OFFERED BY ALDEN. IN RESPONSE TO THESE QUESTIONS, DCASR IDENTIFIED THE PROPERTY OFFERED AND STATED THAT THE SURPLUS PARTS WERE NEW AND UNUSED MATERIAL ACQUIRED FROM TINKER AIR FORCE BASE, OKLAHOMA. DCASR ALSO FOUND "FROM VISUAL OBSERVATION ONLY, ZERO REFURBISHING WILL BE REQUIRED. ORIGINAL MANUFACTURER'S TAGS WERE STILL ATTACHED TO FEW UNITS." ASO STATES THAT THEN:

* * * THE CONTRACTING OFFICER ASKED COGNIZANT TECHNICAL PERSONNEL AT ASO WHETHER THE OFFERED SURPLUS MATERIAL COULD BE CONSIDERED ACCEPTABLE. THEIR REVIEW OF THE MATTER, ASO TECHNICAL PERSONNEL TALKED WITH ACO PERSONNEL TO FURTHER INQUIRE AS TO THE CONDITION OF THE MATERIAL, TALKED WITH THE COMMODITY MANAGER AT TINKER AIR FORCE BASE TO ASSURE THAT THE PROPERTY WASN'T DISPOSED OF BECAUSE IT WAS DEFECTIVE, AND TALKED TO NARF (NAVAL AIR REWORK FACILITY) PENSACOLA, PERSONNEL AND ENGINEERS AT NAD (NAVAL AMMUNITION DEPOT), CRANE, INDIANA TO ASCERTAIN THE EXTENT OF REFURBISHING AND TESTS THEY CONSIDERED NECESSARY PRIOR TO ACCEPTANCE OF THE MATERIAL. BASED UPON THIS REVIEW, COGNIZANT ASO TECHNICAL PERSONNEL ADVISED THE CONTRACTING OFFICER THAT THE MATERIAL COULD BE ACCEPTED PROVIDED:

A. THE MATERIAL IS IN A NEW AND UNUSED CONDITION.

B. THE MATERIAL SHOWS NO SIGNS OF CRACKS, WEAR, DAMAGE, OR CORROSION.

C. ALL DETAILED ITEMS WHICH ARE CONSIDERED DETERIORATIVE IN NATURE, I.E., O RINGS, RUBBER GROMMETS, DEFECTIVE BEARINGS, ETC., ARE REPLACED WITH ORIGINAL MANUFACTURER'S PARTS.

D. FINAL INSPECTION AND ACCEPTANCE OF MATERIAL ARE CONDUCTED BY NARF PENSACOLA, FLORIDA, WITH ALL UNITS SUBJECTED TO THE ACCEPTANCE TESTS SET FORTH IN PARAGRAPHS 4.6.1. THROUGH 4.6.25, 4.6.27, 4.6.29, 4.6.32, AND 4.6.39 OF THE SPECIFICATION AND ANY OTHER INSPECTIONS AND TEST PROCEDURES DEEMED NECESSARY TO INSURE THE RECEIPT OF ACCEPTABLE MATERIAL.

E. MATERIAL WHICH FAILS TO MEET ABOVE REQUIREMENTS ARE RETURNED TO ALDEN FOR REPLACEMENT.

THEY ALSO ADVISED THAT THEY COMPUTED THAT THE INSPECTION COSTS TO BE INCURRED BY NARF PENSACOLA IN INSPECTION AND TEST OF THE MATERIAL WAS $960 AND THAT THEY WERE PREPARED TO TRANSFER SUCH FUNDS TO NARF IN THE EVENT A CONTRACT WAS AWARDED TO ALDEN.

THE NAVY ALSO FOUND THAT:

* * * THE CONTRACTING OFFICER CONSIDERS IT WITHIN HIS AUTHORITY TO CANCEL THE SOLICITATION AND TO PROCURE THE SURPLUS MATERIAL IF COGNIZANT TECHNICAL PERSONNEL ADVISE THAT THEY CONSIDER THE MATERIAL ACCEPTABLE AND IF SIGNIFICANT SAVINGS MAY RESULT THEREFROM. SINCE THE DIFFERENCE BETWEEN ALDEN'S BID AND ASTRONAUTICS' BID IS $31,694, AND THE COST OF TESTING TO THE GOVERNMENT IS ONLY $960, IT IS APPARENT THAT, IF THE SURPLUS MATERIAL WERE ACCEPTABLE TO THE GOVERNMENT, THE GOVERNMENT WOULD REALIZE A SIGNIFICANT SAVINGS IN THE PROCUREMENT OF THE SURPLUS MATERIAL. ACCORDINGLY, SINCE COGNIZANT TECHNICAL PERSONNEL HAVE ADVISED THAT THEY CONSIDER THAT, IF THE REFURBISHING AND TESTING REQUIREMENTS THEY OUTLINE ARE MET, THE OFFERED MATERIAL WOULD BE ACCEPTABLE, THE CONTRACTING OFFICER INTENDS TO CANCEL THE SOLICITATION AND TO PROCURE THE SURPLUS MATERIAL FROM ALDEN. IN THE CONTRACT EXECUTED WITH ALDEN, THE CONTRACTING OFFICER WILL REQUIRE COMPLIANCE WITH THE SPECIFICATION REQUIREMENTS SET FORTH ABOVE.

ASTRONAUTICS PROTESTED ANY AWARD TO ALDEN AS BEING IN VIOLATION OF THE "NEW MATERIAL" CLAUSE AND THE QPL REQUIREMENTS. ASTRONAUTICS ALSO NOTED THAT THE ACCEPTANCE TESTS UNDER THE PROPOSED SOLE-SOURCE AWARD TO ALDEN APPARENTLY OMITTED MANY OF THE TESTS LISTED IN MIL-I-27193B (USAF), WHICH ARE ESSENTIAL FOR DETERMINING THE FITNESS OF THE EQUIPMENT FOR ITS INTENDED USE. ASTRONAUTICS ALSO CONTENDS THAT THE CANCELLATION OF THE IFB AND THE RESULTANT AWARD TO ALDEN SUBVERTED THE COMPETITIVE PROCESS. ASTRONAUTICS ALSO ALLEGES THAT ALDEN IS NOT A "REGULAR DEALER" AS REQUIRED BY ASPR SEC. 12-601 (1974 ED.) AND SEC. 12-603.2 (1974 ED.) AND IS THEREFORE INELIGIBLE FOR AWARD.

NOTWITHSTANDING ASTRONAUTICS' PROTEST, ASO ON NOVEMBER 29, 1974, GAVE NOTICE OF ITS INTENT TO MAKE AN AWARD BECAUSE OF URGENCY AS FOLLOWS:

A. THE ATTITUDE INDICATOR ARU-2B/A UNDER IFB N00383-74-B-0596 ARE URGENTLY REQUIRED FOR INSTALLATION IN PRODUCTION AIRCRAFT KC-130R AND EC- 130Q. TO DATE, APPROXIMATELY SIX (6) MONTHS HAS ELAPSED SINCE THE BID OPENING. DELIVERIES OF THIS ITEM ARE REQUIRED COMMENCING IN JANUARY 1975 THROUGH JUNE 1975. THE PROCUREMENT LEAD TIME FOR NEW MATERIAL FROM AN ESTABLISHED QPL SOURCE IS 180 DAYS. THE PROCUREMENT LEAD TIME FROM SURPLUS SHOULD BE SUBSTANTIALLY SHORTENED SINCE THE ARTICLES ARE IN EXISTENCE AND ONLY TESTING IS REQUIRED. THE NAVY HAS NO STOCK FROM WHICH TO SUPPLY THE REQUIREMENTS SINCE THE KC-130R AND EC 130Q ARE AIR FORCE AIRCRAFT, WHICH AIRCRAFT THE NAVY IS PROCURING FOR SPECIAL PURPOSES. THE AIR FORCE WAS CONTACTED AND THEY TOO ADVISED THAT THESE REQUIREMENTS COULD NOT BE FILLED FROM AIR FORCE STOCK.

B. FURTHER DELAY IN THE AWARD OF A CONTRACT WILL CREATE ADDITIONAL COSTS TO THE GOVERNMENT FOR OUT-OF-PHASE INSTALLATIONS AND/OR STORAGE COSTS FOR AIRCRAFT WHICH CANNOT BE DELIVERED FOR LACK OF THE REQUIRED GFAE (GOVERNMENT-FURNISHED AERONAUTIC EQUIPMENT), OR WILL REQUIRE AN EMERGENCY PROCUREMENT OF A LESS ECONOMICAL QUANTITY AT SUBSTANTIALLY HIGHER PRICES THAN THAT BEING PROCURED HEREUNDER.

WE HAVE BEEN INFORMED THAT THE CONTRACT WAS AWARDED ON JANUARY 16, 1975, AND THE INITIAL QUANTITY OF 12 INDICATORS HAS BEEN DELIVERED. THE CONTRACT ALSO INCLUDED AN OPTION, WHICH HAS BEEN EXTENDED TO BE EXERCISED BY JULY 15, 1975. QPL REQUIREMENTS

AS INDICATED ABOVE, THE THREE IFB'S ONLY INVITED BIDS OFFERING QPL PRODUCTS. ASPR SEC. 1-1107.1(A) (1974 ED.) PROVIDES THAT WHENEVER QUALIFIED PRODUCTS ARE TO BE PROCURED BY THE GOVERNMENT, ONLY BIDS OR PROPOSALS OFFERING PRODUCTS WHICH HAVE QUALIFIED PRIOR TO THE OPENING OF BIDS OR AWARD OF NEGOTIATED CONTRACTS CAN BE CONSIDERED FOR AWARDS.

ASO HAS CLAIMED THAT A BID UNDER A QPL PROCUREMENT IS RESPONSIVE ONLY IF THE BIDDER OFFERING THE QPL PRODUCT IS THE PRODUCT'S MANUFACTURER OR AN AUTHORIZED DISTRIBUTOR OF THE MANUFACTURER. IN SUPPORT OF THIS PROPOSITION, ASO MAKES REFERENCE TO ASPR SEC. 1-1101(A) (1974 ED.) WHICH STATES:

(A) IT IS SOMETIMES NECESSARY TO TEST PRODUCTS IN ADVANCE OF ANY PROCUREMENT ACTION TO DETERMINE IF A PRODUCT IS AVAILABLE THAT WILL MEET SPECIFICATION REQUIREMENTS. IN SUCH CASES, THE SPECIFICATION MAY REQUIRE QUALIFICATION OF THE PRODUCT. QUALIFICATION IS THE ENTIRE PROCESS BY WHICH PRODUCTS ARE OBTAINED FROM MANUFACTURERS OR DISTRIBUTORS, EXAMINED AND TESTED FOR COMPLIANCE WITH SPECIFICATION REQUIREMENTS, AND THEN IDENTIFIED ON A LIST OF QUALIFIED PRODUCTS. QUALIFICATION IS PERFORMED IN ADVANCE AND INDEPENDENT OF ANY SPECIFIC PROCUREMENT ACTION.

ASO INDICATES THAT THE TERM "DISTRIBUTOR" IS DEFINED AT PARAGRAPH 4 103(B) OF CHAPTER IV OF THE DEFENSE STANDARDIZATION MANUAL 4120.3-M, JANUARY 1972 (WHICH IS INCORPORATED INTO ASPR BY ASPR SEC. 1-1101(C) (1974 ED.)) AS A DISTRIBUTOR AUTHORIZED BY THE MANUFACTURER TO DISTRIBUTE THE MANUFACTUERER'S PRODUCT. ASO STATES ITS RATIONALE FOR LIMITING RESPONSIVE BIDS UNDER QPL PROCUREMENTS TO THOSE SUBMITTED BY MANUFACTURERS AND AUTHORIZED DISTRIBUTORS AS FOLLOWS:

* * * THE CONTRACTING OFFICER CONSIDERS THAT ONCE A QUALIFIED PRODUCT LEAVES THE GOVERNMENT AS SURPLUS MATERIAL, CONTROL OVER THE ARTICLE IS LOST AND THE CONDITIONS UNDER WHICH THE ARTICLES ARE HELD ARE NOT KNOWN. CONFIDENCE IN THE MATERIAL COULD ONLY BE RE-ESTABLISHED BY-- AT THE VERY LEAST-- A COMPLETE EXAMINATION AND TEST OF THE ITEMS. HOWEVER, THE SOLICITATION DID NOT CONTAIN A PROVISION THEREFOR AND IT IS NOT CONSIDERED FEASIBLE TO DO SO. * * *

THE PURPOSE OF THE QPL SYSTEM IS TO ALLOW THE GOVERNMENT TO EFFICIENTLY PROCURE ITEMS ON WHICH SUBSTANTIAL TESTING WOULD BE REQUIRED TO INSURE THAT THEY WOULD MEET THE GOVERNMENT'S REQUIREMENTS OR CRITICAL ITEMS OF WHICH SAFE OPERATION IS IMPERATIVE, BY PERMITTING THE EXTENSIVE TESTS NEEDED TO SHOW THAT THE PARTICULAR PRODUCT WILL MEET THE GOVERNMENT'S REQUIREMENTS TO BE CONDUCTED PRIOR TO THE ACTUAL PROCUREMENT ACTION. ASPR SEC. 1-1103 (1974 ED.) SPECIFICALLY PROVIDES THAT QPL REQUIREMENTS MAY BE INCLUDED IN SPECIFICATIONS ONLY WHEN ONE OR MORE OF THE FOLLOWING CONDITIONS EXISTS:

(I) THE TIME REQUIRED TO CONDUCT ONE OR MORE OF THE EXAMINATIONS AND TESTS TO DETERMINE COMPLIANCE WITH ALL THE TECHNICAL REQUIREMENTS OF THE SPECIFICATION WILL EXCEED 30 DAYS (720 HOURS). * * *

(II) QUALITY CONFORMANCE INSPECTION WOULD REQUIRE SPECIAL EQUIPMENT NOT COMMONLY AVAILABLE.

(III) IT COVERS LIFE SURVIVAL OR EMERGENCY LIFE SAVING EQUIPMENT. * * *

OUR OFFICE HAS CONSISTENTLY HELD THAT THE QPL METHOD OF PROCUREMENT IS ORDINARILY PROPER IN VIEW OF THE AUTHORITY CONTAINED IN THE ARMED SERVICES PROCUREMENT ACT OF 1947, 10 U.S.C. 2305 (1970) AND THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, 41 U.S.C. 253 (1970), WHICH VEST INDIVIDUAL AGENCIES WITH A REASONABLE DEGREE OF DISCRETION TO DETERMINE THE EXTENT OF COMPETITION THAT MAY BE REQUIRED CONSISTENT WITH THE INDIVIDUAL AGENCY'S NEEDS. 36 COMP.GEN. 809 (1957); 43 ID. 223 (1963); B- 178478, JUNE 29, 1973. NEVERTHELESS, WE HAVE RECOGNIZED THAT THE USE OF A QPL, WHILE PROPER UNDER CERTAIN CIRCUMSTANCES, IS INHERENTLY RESTRICTIVE OF COMPETITION AND HAVE OBJECTED TO THE IMPROPER USE OF THESE REQUIREMENTS. 38 COMP.GEN. 357 (1958); 40 ID. 348 (1960); 43 ID., SUPRA; 51 ID. 47 (1971). ALSO, IN VIEW OF THE RESTRICTIVE NATURE OF THE QUALIFIED PRODUCTS SYSTEM OF PROCUREMENT, WE HAVE HELD THAT ITS PROVISIONS SHOULD BE LIBERALLY CONSTRUED SO AS NOT TO UNNECESSARILY RESTRICT COMPETITION. SEE B-158096. MARCH 8, 1966; 51 COMP.GEN., SUPRA.

WITH A VIEW TO THE FOREGOING, WE BELIEVE THAT ASO IS MAKING AN UNDULY RESTRICTIVE INTERPRETATION OF THE QPL REQUIREMENTS. SEE B 174350(2), JUNE 16, 1972; B-179232, DECEMBER 5, 1973. CONTRARY TO THE INTERPRETATION GIVEN IT BY ASO, WE READ THE CLEAR AND UNAMBIGUOUS LANGUAGE OF ASPR SEC. 1 -1101(A) (1974 ED.), QUOTED ABOVE, AS EXPLAINING THE QUALIFICATION PROCESS BY WHICH MANUFACTURERS AND DISTRIBUTORS QUALIFY THEIR PRODUCTS, AND NOT AS A LIMITATION ON BIDDERS ELIGIBLE TO BID ON QPL PROCUREMENTS. INDEED, THIS DISTINCTION IS MADE CLEAR IN ASPR SEC. 1-1101(A) (1974 ED.) ITSELF AS FOLLOWS:

* * * QUALIFICATION IS PERFORMED IN ADVANCE AND INDEPENDENT OF ANY SPECIFIC PROCUREMENT ACTION.

THE QPL PROCUREMENT PROCESS IS A TWO STEP PROCESS: THE FIRST STEP IS THE PROCESS OF QUALIFYING THE PRODUCT AND THE SECOND STEP IS THE AGENCY'S PROCUREMENT OF THE QUALIFIED PRODUCT. THESE STEPS ARE MUTUALLY EXCLUSIVE, AND A FIRM WHICH PASSES THE TESTS QUALIFYING THE PRODUCT NEED NOT BE THE SAME FIRM THAT BIDS THE QUALIFIED PRODUCT. IN THIS CONNECTION, WE HAVE CONSISTENTLY HELD THAT THE MERE LISTING OF A PRODUCT ON A QPL DOES NOT RELIEVE A CONTRACTOR FROM ITS OBLIGATION OF DELIVERING AN ITEM WHICH MEETS THE SPECIFICATIONS. 41 COMP.GEN. 124 (1961); 43 ID., SUPRA.

MOREOVER, THE QPL REQUIREMENTS RECOGNIZE THE VALIDITY OF BIDS SUBMITTED BY BIDDERS OTHER THAN MANUFACTURERS OR DISTRIBUTORS IN ASPR SEC. 1- 1107.1(C)(3) (1974 ED.), WHICH PROVIDES:

(3) IN PROCURING QUALIFIED PRODUCTS BY FORMAL ADVERTISING, INVITATIONS FOR BIDS WILL BE DISTRIBUTED TO SUPPLIERS IN THE SAME MANNER AS IF A QUALIFIED PRODUCT WERE NOT INVOLVED, AND WILL NOT BE RESTRICTED TO SUPPLIERS WHOSE PRODUCTS HAVE BEEN QUALIFIED.

ALSO, PARAGRAPH 4-202.3 OF CHAPTER IV OF THE DEFENSE STANDARDIZATION MANUAL 4120.3-M STATES:

FURNISHING PRODUCTS NOT REQUIRING ADDITIONAL LISTING. A SUPPLIER, TO BE ELIGIBLE FOR AWARD OF CONTRACT TO FURNISH A QUALIFIED PRODUCT MANUFACTURED BY A FIRM OTHER THAN THE SUPPLIER AND MARKED WITH THE BRAND DESIGNATION OF THE MANUFACTURER, IS REQUIRED TO STATE IN HIS BID THE NAME OF THE ACTUAL MANUFACTURER, THE BRAND DESIGNATION AND THE QUALIFICATION TEST REFERENCE. ADDITIONAL LISTING IN THE QPL IS REQUIRED ONLY WHEN THE PRODUCT IS REBRANDED WITH THE BRAND DESIGNATION OF THE DISTRIBUTOR (SEE PAR. 4- 202.2).

FINALLY, IN B-174350(2), SUPRA, WE FOUND THAT THE GENERAL SERVICES ADMINISTRATION'S SIMILAR INTERPRETATION OF THE FEDERAL PROCUREMENT REGULATIONS' QPL REQUIREMENTS AS LIMITING RESPONSIVE BIDS IN QPL PROCUREMENTS TO THOSE OTHERWISE PROPER BIDS SUBMITTED BY MANUFACTURERS OR AUTHORIZED DISTRIBUTORS WAS INCORRECT AND OVERLY RESTRICTIVE ON COMPETITION. AS WE STATED IN B-179232, SUPRA, WHICH INVOLVED A DEFENSE SUPPLY AGENCY (DSA) PROCUREMENT, " * * * WE AGREE THAT IT IS NOT ESSENTIAL THAT THE SUPPLIER BE LISTED ON THE QPL * * * " IN ORDER TO BE ELIGIBLE FOR AWARD UNDER A QPL PROCUREMENT.

ASO'S OVERLY RESTRICTIVE INTERPRETATION OF THE QPL REQUIREMENTS WOULD MAKE A QPL A QUALIFIED BIDDERS LIST. OUR OFFICE HAS HELD THAT SUCH PREQUALIFICATION OF BIDDERS (AS OPPOSED TO PRODUCTS) RESULTS IN AN UNWARRANTED RESTRICTION ON THE FREE AND FULL COMPETITION CONTEMPLATED BY THE APPLICABLE STATUTES. SEE 52 COMP.GEN. 569 (1973); ID. 987 (1973); 53 ID. 209 (1973); LOGICON, INC., B-181616, NOVEMBER 8, 1974; DEPARTMENT OF AGRICULTURE'S USE OF MASTER AGREEMENT, 54 COMP.GEN. 606 (1975); METIS CORPORATION, 54 COMP.GEN. 612 (1975).

ASO HAS RATIONALIZED ITS PRECLUSION OF BIDDERS, OTHER THAN MANUFACTURERS AND AUTHORIZED DISTRIBUTORS, FROM COMPETING ON QPL PROCUREMENTS ON ITS GREATER CONFIDENCE THAT A MANUFACTURER OR AUTHORIZED DISTRIBUTOR WILL OFFER THE REQUIRED QUALIFIED PRODUCT AND ITS LACK OF SIMILAR CONFIDENCE IN BIDDERS, SUCH AS MOODY AND ALDEN, WHO OFFER SURPLUS PRODUCTS WHICH HAVE LEFT THE CONTROL OF THE GOVERNMENT, MANUFACTURER, OR THE MANUFACTURER'S AUTHORIZED DISTRIBUTOR. ASO BASES THIS LACK OF COMPLETE KNOWLEDGE AS TO WHAT HAPPENED TO THE QPL PRODUCTS ONCE THEY HAVE LEFT THE CONTROL OF THE "QUALIFIED" BIDDERS OR THE GOVERNMENT (E.G., THE PRODUCTS MIGHT HAVE BEEN ABUSED OR STORED UNDER ADVERSE CONDITIONS), OR AS TO THE SOURCE OF THESE PRODUCTS (E.G., THEY MAY HAVE COME FROM A BATCH OF THE PRODUCT WHICH WAS NOT QUALIFIED OR THEY MIGHT HAVE BEEN SOLD AS DEFECTIVE BY THE GOVERNMENT).

HOWEVER, THERE IS NOTHING IN THE QPL REGULATIONS WHICH IN ANY WAY PRECLUDES BIDS OFFERING SURPLUS MATERIAL. ALSO, THE IFB'S DID NOT SPECIFICALLY STATE THAT SURPLUS MATERIAL WAS NOT ACCEPTABLE. IT WOULD SEEM, ABSENT SPECIFIC IDENTIFICATION REQUIREMENTS IN THE IFB WITH WHICH A BIDDER DID NOT COMPLY, THAT A PARTICULAR BIDDER'S INABILITY TO MEET THE CONTRACT REQUIREMENTS IS A MATTER OF CONTRACTOR RESPONSIBILITY, WHICH MUST BE DETERMINED ON THE FACTS AND CIRCUMSTANCES OF THE SPECIFIC CASE AND THE ABILITIES AND CAPABILITIES OF THE SPECIFIC BIDDER, AND WHICH SHOULD NOT BE DETERMINED WITH A "BLANKET" PRESUMPTION OF PRODUCT UNACCEPTABILITY AND A PRECLUSION OF A CLASS OF BIDDERS FROM COMPETITION, ESPECIALLY CONSIDERING THAT THIS PRESUMPTION IS BASED UPON AN ERRONEOUS INTERPRETATION OF THE RELEVANT ASPR PROVISIONS. (RESPONSIBILITY OF BIDDERS OFFERING SURPLUS MATERIAL IS DISCUSSED BELOW.)

ASO HAS ESSENTIALLY CREATED ONE STANDARD FOR TREATING THE BIDS OF MANUFACTURERS AND DISTRIBUTORS, AND ANOTHER STANDARD FOR TREATING THE BIDS OF OTHER BIDDERS (ESPECIALLY SURPLUS DEALERS). SUCH A DUAL STANDARD IS NOWHERE SANCTIONED BY THE APPLICABLE REGULATIONS. WITH REGARD TO A SIMILAR UNSTATED DUAL STANDARD WHICH WAS APPLIED BY DSA IN A PROTESTED PROCUREMENT WHICH WAS THE SUBJECT OF OUR DECISION IN B 162931, FEBRUARY 21, 1968, WE STATED:

* * * THE PRINCIPAL ADMINISTRATIVE OBJECTION TO THE AWARD TO WHITE IS THAT THE GOVERNMENT DOES NOT HAVE DATA FROM WHICH IT CAN ASCERTAIN THAT THE SURPLUS HARTMAN PARTS OFFERED BY WHITE ARE OF THE SAME QUALITY AS THE HARTMAN PARTS OFFERED BY HARTMAN AND OTHER OFFERORS. IT IS SUGGESTED THAT THE SURPLUS PARTS MAY HAVE DETERIORATED IN STORAGE, MAY HAVE BEEN SUBJECTED TO ROUGH HANDLING, MAY BE FROM REJECTED LOTS, ETC. HOWEVER, THESE SAME CONDITIONS COULD VERY WELL EXIST IN RESPECT TO THE PARTS OFFERED BY THE NAME BRAND MANUFACTURER OR OTHER OFFERORS OF ITS PRODUCTS, AND THE GOVERNMENT APPARENTLY DOES NOT SEEK ASSURANCES FROM THESE OFFERORS AGAINST THESE CONTINGENCIES AND APPARENTLY IT WOULD HAVE NO MEANS OF ASCERTAINING ANY DEFICIENCIES, SINCE ADMITTEDLY IT HAS NO DATA WHICH CAN BE USED FOR TESTING THE PARTS.

* * * MOREOVER, THE RFP AFFORDED SUFFICIENT PROTECTION AND REMEDIES TO THE GOVERNMENT RESPECTING THE FURNISHING AND RECEIPT OF NEW AND UNUSED GOVERNMENT SURPLUS PROPERTY AS WOULD HAVE AFFORDED A BASIS FOR AN AWARD AT A LOWER PRICE TO WHITE.

SIMILARLY, THE QPL REQUIREMENTS IN EACH OF THE IFB'S IN QUESTION HERE REQUIRED INTENSIVE TESTS (BOTH INDIVIDUAL AND SAMPLING), WHOSE PURPOSE WOULD SEEM TO BE TO INSURE THAT THE GOVERNMENT RECEIVED AN ACCEPTABLE PRODUCT MEETING ITS NEEDS. THEREFORE, SO LONG AS MOODY AND ALDEN CAN PASS THE ACCEPTANCE TESTS, MEET THE QPL IDENTIFICATION AND INFORMATIONAL REQUIREMENTS OF THE IFB, AND RECEIVE AN AFFIRMATIVE PREAWARD SURVEY, WE DO NOT BELIEVE THAT IT COULD BE REASONABLY FOUND THAT THE PRODUCTS MOODY AND ALDEN WERE OFFERING DID NOT MEET THE IFB QPL REQUIREMENTS, AND WE BELIEVE COMPLIANCE WITH THESE REQUIREMENTS SHOULD RESTORE ASO'S CONFIDENCE IN THE PRODUCTS BEING OFFERED BY SUCH SURPLUS DEALERS.

SUFFICIENCY OF IDENTIFICATION OF QPL PRODUCT OFFERED

ASO ALSO ARGUES THAT MOODY'S BID UNDER THE IFB IN B-180732 MUST BE CONSIDERED NONRESPONSIVE, SINCE IT FAILED TO IDENTIFY THE APPLICABLE QPL TEST NUMBER UNDER WHICH THE PRODUCT MOODY IS OFFERING IS QUALIFIED. ASO CONSIDERS THAT, WITHOUT MOODY FURNISHING THIS TEST NUMBER, THE CONTRACTING OFFICER CANNOT CONCLUDE THAT THE PRODUCT IDENTIFIED BY MOODY IS THE SAME PART THAT WAS QUALIFIED BY THE PRODUCT'S MANUFACTURER AND THAT THIS OMISSION CANNOT BE WAIVED AS A MINOR INFORMALITY.

WHERE QPL PRODUCTS ARE TO BE PROCURED, ASPR SEC. 1-1107.2(A) REQUIRES THE USE OF APPROPRIATE LANGUAGE IN THE SOLICITATION TO GIVE NOTICE TO POTENTIAL BIDDERS OR OFFERORS THAT ONLY BIDS OR PROPOSALS OFFERING PRODUCTS QUALIFIED PRIOR TO BID OPENING OR THE AWARD OF A NEGOTIATED CONTRACT WOULD BE CONSIDERED FOR AWARD. THIS CLAUSE (SECTION B-220 OF EACH OF THE IFB'S IN QUESTION HERE) STATES IN PERTINENT PART:

NOTICE-- QUALIFIED END PRODUCTS (1969 DEC)

AWARDS FOR ANY END ITEMS WHICH ARE REQUIRED TO BE QUALIFIED PRODUCTS WILL BE MADE ONLY WHEN SUCH ITEMS HAVE BEEN TESTED AND ARE QUALIFIED FOR INCLUSION IN A QUALIFIED PRODUCTS LIST IDENTIFIED BELOW (WHETHER OR NOT ACTUALLY INCLUDED IN THE LIST) AT THE TIME SET FOR OPENING OF BIDS, OR THE TIME OF AWARD IN THE CASE OF NEGOTIATED CONTRACTS. OFFERORS SHOULD CONTACT THE OFFICE DESIGNATED BELOW TO ARRANGE TO HAVE THE PRODUCTS WHICH THEY INTEND TO OFFER TESTED FOR QUALIFICATION.

THE OFFEROR SHALL INSERT THE ITEM NAME AND THE TEST NUMBER (IF KNOWN) OF EACH QUALIFIED PRODUCT IN THE BLANK SPACES BELOW.

ITEM NAME . . .

TEST NUMBER . . .

OFFERORS OFFERING PRODUCTS WHICH HAVE BEEN TESTED AND QUALIFIED, BUT WHICH ARE NOT YET LISTED, ARE REQUESTED TO SUBMIT EVIDENCE OF SUCH QUALIFICATION WITH THEIR BIDS OR PROPOSALS, SO THAT THEY MAY BE GIVEN CONSIDERATION. IF THIS IS A FORMALLY ADVERTISED PROCUREMENT, ANY BID WHICH DOES NOT IDENTIFY THE QUALIFIED PRODUCT BEING OFFERED, EITHER ABOVE OR ELSEWHERE IN THE BID, WILL BE REJECTED. * * * INASMUCH AS ASPR SEC. 1 -1107 (1974 ED.) WAS ISSUED PURSUANT TO THE ARMED SERVICES PROCUREMENT ACT OF 1947, 10 U.S.C. 2301 ET SEQ. (1970), IT HAS THE FORCE AND EFFECT OF LAW AND IS BINDING NOT ONLY ON BIDDERS BUT ALSO ON THE PROCURING AGENCIES. SEE PAUL V. UNITED STATES, 371 U.S. 245 (1963).

CONSEQUENTLY, A BIDDER'S FAILURE TO INDICATE THE IDENTITY OF THE PRODUCT IT IS OFFERING IN SUCH A MANNER AS TO PERMIT THE PROCURING AGENCY TO DETERMINE THAT ITS PRODUCT IS QUALIFIED MUST BE CONSIDERED A MATERIAL OMISSION RENDERING ITS BID NONRESPONSIVE. 45 COMP.GEN. 397 (1966); B- 158197, APRIL 5, 1966; B-161779, AUGUST 7, 1967; B-163575, MARCH 26, 1968; B-166255, AUGUST 1, 1969; 51 COMP.GEN. 415 (1972); B 179232, SUPRA.

HOWEVER, AS WE STATED IN B-161779, SUPRA:

IN DETERMINING WHETHER A BID SUFFICIENTLY IDENTIFIES A QUALIFIED PRODUCT WE ARE MINDFUL THAT WE HAVE CRITICIZED CERTAIN PRACTICES ADOPTED IN THE ADMINISTRATION OF QUALIFIED PRODUCTS PROCUREMENTS WHICH RESTRICTED COMPETITION UNNECESSARILY. SEE 38 COMP.GEN. 357; 40 COMP.GEN. 348. CONSEQUENTLY, IN ORDER TO PREVENT A FURTHER, UNNECESSARY RESTRICTION OF COMPETITION BY ADOPTING UNIFORM REQUIREMENTS AS TO WHAT CONSTITUTES SUFFICIENT PRODUCT IDENTIFICATION, WE HAVE PROCEEDED ON AN AD HOC BASIS IN RESOLVING THIS QUESTION. FOR EXAMPLE, WE HAVE HELD THAT THE MERE FAILURE OF A BIDDER TO LIST THE TEST NUMBER OF HIS QUALIFIED PRODUCT DOES NOT NECESSARILY RENDER HIS BID NONRESPONSIVE IF HE HAS INCLUDED THE PLACE OF MANUFACTURE OF HIS OFFERED PRODUCT SO AS TO ALLOW THE CONTRACTING OFFICER TO DETERMINE THE PRODUCT WAS QUALIFIED. 45 COMP.GEN. 397. WHERE IDENTIFICATION OF THE PRODUCT IN THE ITEM NAME BLANK OF THE QUALIFIED PRODUCTS CLAUSE WOULD HAVE MEANT MERE REPETITION OF THE DESCRIPTION OF THE PRODUCT AS DETAILED IN THE INVITATION, A BID WAS NOT RENDERED NONRESPONSIVE BECAUSE IT FAILED TO CONTAIN THE ITEM NAME AND TEST NUMBER OF THE OFFERED PRODUCT. B-158197, APRIL 5, 1966. * * *

ALSO SEE 53 COMP.GEN. 249 (1973), WHERE WE FOUND THAT SINCE THE AGENCY KNEW THE IFB SPECIFICATIONS, QPL NUMBER, TYPE AND SIZE OF THE ITEM, AND THE FACT THAT THE BIDDER WAS THE ITEM'S MANUFACTURER, IT COULD ASCERTAIN THE ITEM'S NAME AND THE APPLICABLE QPL TEST NUMBER AND IDENTIFY THE ITEM OFFERED BY THE BIDDER, WHO FAILED TO FILL IN THE TEST NUMBER AND THE ITEM'S NAME IN THE "NOTICE-QUALIFIED END PRODUCTS" CLAUSE. IN VIEW OF THE FOREGOING, IT IS CLEAR THAT THE IDENTIFICATION OF A PRODUCT OFFERED BY A BIDDER WHO FAILS TO FILL IN THE BLANKS IN THE "NOTICE-QUALIFIED END PRODUCTS" CLAUSE CAN RESULT FROM THE CONJUNCTIVE USE OF SUCH INFORMATION AS PRODUCT DESIGNATION, MANUFACTURERS NAME, QPL TEST NUMBER, AND QPL LIST NUMBER. SEE 51 COMP.GEN. 415, 418 (1972).

IN B-180732, MOODY DID NOT IDENTIFY THE MANUFACTURER OR THE APPLICABLE QPL TEST NUMBER. HOWEVER, WITHOUT ANY UNDUE ADMINISTRATIVE BURDEN, ASO CAN EASILY DETERMINE THESE DESIGNATIONS, SINCE IT KNOWS THE APPLICABLE QPL LIST NUMBER (QPL-5498-18), BY NOTING AND LOCATING THE MANUFACTURER'S DESIGNATION IDENTIFIED BY MOODY IN ITS BID (1008700-4) ON THE QPL AND BY SIMPLY LOOKING ACROSS THAT COLUMN TO ASCERTAIN THE MANUFACTURER (BENDIX) AND THE TEST NUMBER (BUAER 1TR. AER-AE-189 OF JUNE 26, 1957). CONSEQUENTLY, WE BELIEVE THAT MOODY'S BID IN THIS CASE SUFFICIENTLY IDENTIFIED THE PRODUCT IT WAS OFFERING AND ITS OMISSION OF THE NAME OF THE MANUFACTURER AND THE APPLICABLE TEST NUMBER MAY BE REGARDED AS A WAIVABLE MINOR INFORMALITY NOT RENDERING MOODY'S BID NONRESPONSIVE.

WE DO NOT REGARD THE INSERTION OF THE QPL TEST NUMBER AS BEING OF SUCH SIGNIFICANCE, IN AND OF ITSELF, AS TO MAKE ITS OMISSION FROM A BID AN INDICATION THAT THE BIDDER MAY NOT OR CANNOT OFFER A PRODUCT WHICH HAS BEEN QUALIFIED. IN THIS REGARD, WE NOTE THAT MOODY OR ANY OTHER BIDDER COULD JUST AS EASILY ITSELF PERUSED THE APPLICATION QPL AND HAVE PLACED THE APPROPRIATE TEST NUMBER APPEARING THERE IN ITS BID. WE ALSO NOTE THAT THE "NOTICE-QUALIFIED END PRODUCTS" CLAUSE ITSELF INDICATES THAT THE INSERTION OF THE QPL TEST NUMBER IS NOT ABSOLUTELY ESSENTIAL INASMUCH AS IT ONLY REQUIRES INSERTION OF THE QPL TEST NUMBER "(IF KNOWN)."

ALSO, WE BELIEVE IT IS CLEAR THAT UNDER THE TERMS AND CONDITIONS OF THE IFB, MOODY WAS, BY VIRTUE OF ITS BID, OBLIGATED TO FURNISH A PRODUCT WHICH HAD BEEN QUALIFIED AND WHICH CONFORMED TO THE IFB SPECIFICATIONS. COMP.GEN. 124; 43 ID. SUPRA; 49 ID. 224 (1969); B 169290, JUNE 1, 1970. AS INDICATED ABOVE AND DISCUSSED BELOW, IF IT CAN BE SHOWN THAT MOODY OR ANY OTHER BIDDER CANNOT DELIVER A CONFORMING PRODUCT, IT CAN BE FOUND TO BE NONRESPONSIBLE. THEREFORE, IN VIEW OF THE FOREGOING, WE CANNOT FIND THAT MOODY'S FAILURE TO IDENTIFY THE QPL TEST NUMBER OBLIGATED IT TO MEET LESS THAN THE CONDITIONS AND SPECIFICATIONS REQUIRED IN THE IFB.

ALSO, SINCE ASO COULD HAVE DETERMINED THE IDENTITY OF THE PRODUCT MOODY WAS OFFERING BY PERUSING MOODY'S BID, THE IFB AND THE QPL INCORPORATED INTO THE IFB, WE CANNOT VIEW THE MANDATORY LANGUAGE OF THE "NOTICE- QUALIFIED END PRODUCTS" CLAUSE AND PARAGRAPH 4-202.3 OF CHAPTER IV OF THE DEFENSE STANDARDIZATION MANUAL 4120.3-M (WHICH IS SET FORTH ABOVE) AS REQUIRING REJECTION OF ITS BID.

IT SHOULD ALSO BE NOTED THAT THE FOREGOING REASONING WOULD ALSO APPLY TO THE IFB PROTESTED UNDER B-181971, WHERE MOODY ALSO FAILED TO LIST THE QPL TEST NUMBER.

QPL ACCEPTANCE TEST REQUIREMENTS AND BIDDER RESPONSIBILITY

ASO ALSO STATES THAT MOODY COULD NOT COMPLY WITH THE ACCEPTANCE TEST REQUIREMENTS OF BOTH B-180732 AND B-181971, WHICH WERE SPECIFICALLY INCORPORATED INTO THE IFB'S BY MIL-A-5498CASG) AND MIL-C-19246C RESPECTIVELY. THE ACCEPTANCE TESTS IN MIL-A-5498CASG) CONSISTED OF BOTH INDIVIDUAL AND SAMPLING TESTS AND ARE SET OUT IN PARAGRAPH 4.3. THE FIRST ARTICLE INSPECTION AND QUALITY CONFORMANCE INSPECTIONS AND TESTS IN MIL-C- 19246C ARE SET OUT IN PARAGRAPHS 4.4 AND 4.5.

ASO BASES ITS DETERMINATION THAT MOODY IS UNABLE TO MEET THE ACCEPTANCE TEST REQUIREMENTS ON A PREAWARD SURVEY CONDUCTED BY DCASR, OKLAHOMA CITY, OKLAHOMA, ON MOODY'S FACILITIES FOR A PREVIOUS SOLICITATION, AND THE FACT THAT MOODY DID NOT IN ITS BID SPECIFICALLY INDICATE ITS ABILITY TO COMPLY WITH THESE TESTS. IN ADDITION, ASO CLAIMS THE PREAWARD SURVEY REVEALED THAT MOODY WAS ALSO NONRESPONSIBLE BECAUSE IT HAS AN INADEQUATE INSPECTION SYSTEM AND A BAD PAST PERFORMANCE RECORD.

ASO HAS ALSO TAKEN THE POSITION THAT A BIDDER OFFERING SURPLUS MATERIAL IN UNSPECIFIED CONDITION WITHOUT A SHOWING IN ITS BID THAT IT MEETS ALL OF THE GOVERNMENT'S REQUIREMENTS CANNOT CONSTITUTE AN OFFER TO DELIVER MATERIAL MEETING THE SPECIFICATIONS.

IN RESPONSE, MOODY CLAIMS THAT IT WAS NOT REQUIRED TO COMPLY WITH THE TESTS SINCE THEY ARE ONLY APPLICABLE TO THE MANUFACTURER, AND SINCE THESE ITEMS ARE QPL ITEMS, IT MUST BE PRESUMED THAT THEY WERE PROPERLY TESTED. IN THIS REGARD, MOODY NOTES THAT THE GOVERNMENT IS MORE INTIMATELY AWARE OF THE CIRCUMSTANCES OF THE PRODUCTION, ACCEPTANCE AND SALE AS SURPLUS OF THE QPL ITEMS THAN A SURPLUS BIDDER AND SINCE ASO HAD NOT SPECIFICALLY ALLEGED THAT THE ARTICLES MOODY WAS OFFERING WERE SOLD BY THE GOVERNMENT AS DEFECTIVE THAT IT CAN ONLY BE ASSUMED THAT NO DISABILITY IN THE ARTICLES EXISTS AND THAT TESTING IS NOT REQUIRED. MOODY ALSO NOTES THAT THE PREAWARD SURVEY WAS OUTDATED AND THEREFORE NO LONGER A VALID BASIS FOR FINDING MOODY NONRESPONSIBLE. MOODY ALSO CLAIMS IT HAS AN ADEQUATE INSPECTION SYSTEM AND REFERS TO A STATEMENT BY THE GOVERNMENT'S QUALITY ASSURANCE REPRESENTATIVE (QAR) FOR MOODY'S PLANT AS FOLLOWS:

I CONCUR THAT D. MOODY & CO., INC. IS QUALIFIED UNDER MIL-I-45208A INSPECTION (AND TEST) SYSTEM REQUIREMENTS.

WE BELIEVE IT IS CLEAR THAT THE ACCEPTANCE, FIRST ARTICLE, AND QUALITY CONFORMANCE TESTS CONTAINED IN MIL-A-5498CASG) OF B-180732 AND MIL-C- 19246C OF B-181971 WERE MANDATORY REQUIREMENTS OF THE CONTRACTS AWARDED UNDER EACH OF THE IFB'S. (JUST AS IS THE CASE OF THE ACCEPTANCE TEST REQUIREMENTS IN SECTION 4.5 OF MIL-I-27193B (USAF), WHICH IS INCORPORATED INTO THE IFB UNDER B-182091.) IN THIS REGARD, WE ARE OF THE VIEW THAT THE FOLLOWING STATEMENTS IN THE MILITARY SPECIFICATIONS IN QUESTION HERE LEAVE NO DOUBT THAT THESE TESTS ARE REQUIREMENTS OF EACH CONTRACT AWARDED:

MIL-A-5498CASG)-- SECTION 4.3.1-- INDIVIDUAL TESTS.-- EACH ACCUMULATOR SUBMITTED FOR ACCEPTANCE UNDER CONTRACT SHALL BE SUBJECTED TO THE FOLLOWING TESTS * * * .

MIL-A-5498CASG)

4.3.2.1 ACCUMULATORS.-- ACCUMULATORS, UP TO 2 PERCENT OF THE ORDER, BUT NOT LESS THAN ONE ACCUMULATOR, WHICH HAVE PASSED THE INDIVIDUAL TESTS SPECIFIED IN 4.3.1 MAY BE SELECTED BY THE INSPECTOR FOR FURTHER TESTS TO DETERMINE CONFORMANCE WITH ANY OF THE REQUIREMENTS OF THIS SPECIFICATION AS MAY BE CONSIDERED NECESSARY.

MIL-C-19246C-- SECTION 4.2

(B) FIRST ARTICLE INSPECTION-- FIRST ARTICLE INSPECTION CONSISTS OF EXAMINATIONS AND TESTS PERFORMED ON SAMPLES WHICH ARE REPRESENTATIVE OF THE PRODUCTION ITEM AFTER AWARD OF A CONTRACT TO DETERMINE THAT THE PRODUCTION ITEM MEETS THE REQUIREMENTS OF THIS SPECIFICATION.

(C) QUALITY CONFORMANCE INSPECTION-- QUALITY CONFORMANCE INSPECTION CONSISTS OF EXAMINATIONS AND TESTS PERFORMED ON INDIVIDUAL PRODUCTS OR LOTS TO DETERMINE CONFORMANCE OF THE PRODUCTS OR LOTS WITH THE REQUIREMENTS SET FORTH IN THIS SPECIFICATION.

THESE TEST REQUIREMENTS ARE NOT LIMITED TO MANUFACTURERS AS IS CONTENDED BY MOODY. THIS IS TRUE EVEN THOUGH THESE TESTS MAY HAVE ONCE BEEN COMPLETELY AND SATISFACTORILY PERFORMED FOR A PREVIOUS ORDER MADE TO THE GOVERNMENT UNDER A QPL CONTRACT. AS NOTED BY ASO, THERE IS A LEGITIMATE NEED FOR TESTING SURPLUS QPL ITEMS WHICH HAVE BEEN OUTSIDE THE CONTROL OF THE QPL MANUFACTURER OR THE GOVERNMENT AND WHICH MAY HAVE BEEN ABUSED OR IMPROPERLY STORED. IT IS ALSO POSSIBLE THAT THE QPL ACCEPTANCE TESTS WERE WAIVED FOR THE PREVIOUSLY PROCURED ITEMS. ALSO, THE FACT THAT THE GOVERNMENT HAD CONTROL OVER THE ITEMS AND HAD RECORDS OF WHETHER OR NOT THEY WERE PURCHASED UNDER A QPL PROCUREMENT AND HAD PASSED ALL ACCEPTANCE TESTS CANNOT BE CONSIDERED A SUBSTITUTE FOR THESE TEST REQUIREMENTS BECAUSE IT IS POSSIBLE THAT THE PARTS MAY HAVE BEEN MISHANDLED, IMPROPERLY STORED, OR SIMPLY DETERIORATED WITH AGE WHILE IN THE POSSESSION OF THE SURPLUS DEALER, MANUFACTURER OR THE GOVERNMENT. IN ANY CASE, ASPR SEC. 1- 1208(C) (1974 ED.), WHICH IS DISCUSSED BELOW, MAKES IT CLEAR THAT FORMER GOVERNMENT SURPLUS MUST FULLY COMPLY WITH ALL OF THE SPECIFICATIONS AND OTHER CONTRACT REQUIREMENTS (E.G., TEST REQUIREMENTS) OR ELSE IT CANNOT BE ACCEPTED. FINALLY, THIS IS NOT AN IMPROPER DUAL STANDARD OF TREATMENT FOR MANUFACTURERS AND SURPLUS DEALERS, AS DISCUSSED ABOVE, SINCE MANUFACTURERS ARE REQUIRED TO MEET THE SAME ACCEPTANCE TEST REQUIREMENTS AS SURPLUS DEALERS.

WITH REGARD TO THE PRIORITY OF REQUIRING THESE TESTS, OUR OFFICE HAS CONSISTENTLY TAKEN THE POSITION THAT THE PROCUREMENT AGENCIES HAVE THE PRIMARY RESPONSIBILITY FOR DRAFTING SPECIFICATIONS REFLECTING THEIR ACTUAL NEEDS. 38 COMP.GEN. 190 (1958); 44 ID. 302 (1964); B-178288, MAY 24, 1973. WHEN A SPECIFICATION LENDS ITSELF TO FREE AND OPEN COMPETITION, AS REQUIRED BY APPLICABLE STATUTES, AND IT IS SHOWN THAT ANY RESTRICTIVE PROVISIONS THEREIN ARE NO GREATER THAN NECESSARY TO PROTECT A LEGITIMATE INTEREST OF THE GOVERNMENT, OUR OFFICE WILL NOT QUESTION THE SPECIFICATION. SEE B-176708, FEBRUARY 2, 1973; HY-GAIN ELECTRONICS CORP., B-180740, DECEMBER 11, 1974; MANUFACTURING DATA SYSTEMS, INC., B-180586, B -180608, JANUARY 6, 1975. IN THIS REGARD, WE HAVE CONSISTENTLY HELD THAT THE RESPONSIBILITY FOR THE ESTABLISHMENT OF TESTS AND PROCEDURES NECESSARY TO DETERMINE PRODUCT ACCEPTABILITY IS WITHIN THE AMBIT OF THE EXPERTISE OF THE COGNIZANT TECHNICAL ACTIVITY. SEE B-174868, JULY 14, 1972; B-176256, NOVEMBER 30, 1972; B-177312, APRIL 19, 1973; B-178584, AUGUST 29, 1973; B- 179205, DECEMBER 4, 1973; B-178498, DECEMBER 11, 1973.

IN B-180732 AND B-181971, MOODY HAS NOT PRESENTED ANY PROBATIVE EVIDENCE WHICH WOULD TEND TO SHOW THAT THE ACCEPTANCE TESTS REQUIRED BY THE TECHNICAL ACTIVITY RESPONSIBLE FOR THE QUALIFICATION OF THE PRODUCTS UNDER MIL-A-5498C (ASG) AND MIL-C-19246C (NAVAL AIR SYSTEMS COMMAND (NAVAIR)) ARE NOT NECESSARY TO INSURE THAT THE PRODUCTS OFFERED ARE ACCEPTABLE. THE FACT THAT SOME OF THE TESTS MAY BE PREPRODUCTION OR PRODUCTION TESTS WHICH ONLY CAN BE PERFORMED BY THE MANUFACTURER IS NOT A SUFFICIENT REASON FOR OUR OFFICE TO QUESTION THE REQUIREMENT.

ALSO, THE FACT THAT AN ITEM PASSED QUALIFICATION TESTS DOES NOT RELIEVE A CONTRACTOR FROM PERFORMING THE ACCEPTANCE TESTS WHICH THE COGNIZANT TECHNICAL ACTIVITY RESPONSIBLE FOR QUALIFYING AND LISTING QUALIFIED PRODUCTS BELIEVES NECESSARY TO INSURE THE GOVERNMENT'S RECEIPT OF A PRODUCT MEETING ITS MINIMUM REQUIREMENTS. AS NOTED ABOVE, THE FACT THAT A BIDDER IS OFFERING AN ITEM QUALIFIED FOR LISTING ON A QPL DOES NOT RELIEVE IT OF ITS OBLIGATION OF COMPLYING WITH THE TERMS, CONDITIONS AND REQUIREMENTS OF THE CONTRACT AND OFFERING A PRODUCT ACCEPTABLE TO THE GOVERNMENT. 41 COMP.GEN. 124; 49 ID. 224.

ASO BASED ITS DETERMINATION THAT MOODY COULD NOT COMPLY WITH THE QPL ACCEPTANCE TEST AND INSPECTION SYSTEM REQUIREMENTS UNDER THE IFB'S IN B 180732 AND B-181971 ON A PREAWARD SURVEY CONDUCTED BY DCASR ON JULY 31, 1973, IN RESPONSE TO A NAVY REQUEST ARISING OUT OF MOODY'S LOW BID UNDER ASO'S NOO383-73B-0759 FOR THE PROCUREMENT OF PRESSURE INDICATORS FOR THE A -1 AND P/SP-2H AIRCRAFT. THIS PREAWARD SURVEY REVEALED, FROM THE INSPECTION OF A SAMPLE OF THE PRESSURE INDICATORS OFFERED BY MOODY, THAT THE SAMPLE HAD BEEN USED AND OVERHAULED IN VIOLATION OF THE IFB'S "NEW MATERIAL" CLAUSE AND THAT MOODY DID NOT POSSESS THE CAPABILITY TO MANUFACTURE OR PROPERLY TEST THE PRESSURE INDICATORS. DCASR ALSO NOTED THAT MOODY'S PAST PERFORMANCE RECORD WAS UNSATISFACTORY AND RECOMMENDED THAT AWARD NOT TO BE MADE TO MOODY. BASED ON THE PREAWARD SURVEY, ASO FOUND MOODY TO BE A NONRESPONSIBLE BIDDER ON THE IFB'S PROTESTED UNDER B- 180732 AND B-181971. IN WESTERN ORDNANCE, INC., B-182938, DECEMBER 23, 1974, WE STATED:

OUR OFFICE HAS CONSISTENTLY HELD THAT THE QUESTION OF A PROSPECTIVE CONTRACTOR'S RESPONSIBILITY IS A MATTER FOR DETERMINATION BY THE CONTRACTING OFFICER INVOLVED. SEE MATTER OF RIOCAR, B-180361, MAY 23, 1974, AND CASES CITED THEREIN. ONE OF THE IMPORTANT ELEMENTS OF A BIDDER'S RESPONSIBILITY IS THE CAPABILITY TO PERFORM IN ACCORDANCE WITH THE REQUIREMENTS SET FORTH IN THE SOLICITATION, WHICH INCLUDES SUCH FACTORS AS EQUIPMENT AND PERSONNEL. RESOLVING THIS QUESTION OF FACT NECESSARILY INVOLVES THE EXERCISE OF A CONSIDERABLE RANGE OF JUDGMENT AND DISCRETION BY THE CONTRACTING OFFICER. IT IS NOT THE FUNCTION OF OUR OFFICE TO DETERMINE WHETHER WESTERN ORDNANCE HAS DEMONSTRATED A CAPABILITY TO PERFORM THIS CONTRACT; RATHER, OUR FUNCTION IS TO REVIEW THE RECORD TO DETERMINE WHETHER THE CONTRACTING OFFICER'S EXERCISE OF JUDGMENT AND DISCRETION IN FINDING WESTERN ORDNANCE NONRESPONSIBLE WAS REASONABLE UNDER THE CIRCUMSTANCES. IN THIS REGARD, WE HAVE STATED THAT A CONTRACTING OFFICER'S DETERMINATION OF RESPONSIBILITY OR NONRESPONSIBILITY WILL NOT BE DISTURBED ABSENT A REASONABLE BASIS THEREFOR. SEE MATTER OF LEASCO INFORMATION PRODUCTS, INC. ET AL., 53 COMP.GEN. 932; 51 COMP.GEN. 233 (1971).

IT IS ALSO CLEAR THAT A CONTRACTOR, WHO IS FOUND NOT TO HAVE THE ABILITY TO MEET THE IFB TEST REQUIREMENTS TO DELIVER A QUALIFIED PRODUCT OTHERWISE MEETING THE CONTRACT REQUIREMENTS, CAN BE FOUND TO BE NONRESPONSIBLE FOR THE PARTICULAR PROCUREMENT. SEE B-150427, FEBRUARY 5, 1963; B-174350(1), JUNE 16, 1972; B-176318, SEPTEMBER 29, 1972; B 176708, SUPRA.

NOTWITHSTANDING THE FOREGOING, WE BELIEVE IT WAS IMPROPER FOR ASO TO HAVE RELIED ON THIS JULY 31, 1973, NEGATIVE PREAWARD SURVEY TO FIND MOODY NONRESPONSIBLE FOR THE IFB'S PROTESTED HERE, WHICH HAD BID OPENINGS DATED JANUARY 8, 1974, AND APRIL 9, 1974, RESPECTIVELY. A CONTRACTING OFFICER MAY NOT SOLELY RELY ON A PREAWARD SURVEY CONDUCTED ON A POTENTIAL CONTRACTOR'S FACILITIES FOR A PRIOR PROCUREMENT OF A DIFFERENT ARTICLE OVER 5 MONTHS PRIOR TO AN IFB'S BID OPENING (OVER 8 MONTHS IN THE CASE OF THE IFB UNDER B-181971) TO FIND THE CONTRACTOR NONRESPONSIBLE. AS WE STATED IN WESTERN ORDNANCE, INC., SUPRA:

* * * THE FACT THAT WESTERN ORDNANCE WAS DETERMINED TO BE NONRESPONSIBLE FOR THE IMMEDIATE PROCUREMENT DOES NOT REFLECT IN ANY WAY UPON THE FIRM'S ELIGIBILITY FOR FUTURE CONTRACTS, SINCE DETERMINATION OF RESPONSIBILITY ARE REQUIRED TO BE MADE ON "AS CURRENT A BASIS AS FEASIBLE WITH RELATION TO THE DATE OF CONTRACT AWARD." SEE ASPR SEC. 1-905.2 (1974 ED.)

MOREOVER, DCASR FOUND THAT MOODY ONLY LACKED ADEQUATE TEST FACILITIES FOR THE PRESSURE INDICATORS BEING PROCURED UNDER IFB N00383 73-B-0759. THE ACCEPTANCE TESTS FOR THE ACCUMULATORS AND CONNECTORS PROCURED (B-180732 AND B-181971) ARE DIFFERENT THAN THOSE REQUIRED FOR THE INDICATORS. ALSO, IT MAY HAVE BEEN POSSIBLE FOR MOODY TO HAVE SUBCONTRACTED THE QPL ACCEPTANCE TEST REQUIREMENTS. IN ADDITION, MOODY COULD SHOW COMPLIANCE WITH ANY PREPRODUCTION OR PRODUCTION ACCEPTANCE TEST BY SHOWING THAT THEY WERE PROPERLY PERFORMED BY THE MANUFACTURER.

ALTHOUGH MOODY'S INSPECTION SYSTEM WAS FOUND UNACCEPTABLE BASED ON ITS APPARENT INABILITY TO PROPERLY TEST AND INSPECT THE ITEMS BEING PURCHASED FOR THAT PROCUREMENT AT THAT TIME, WE DO NOT BELIEVE THAT IT WAS REASONABLE FOR THE CONTRACTING OFFICER TO RELY ON AN OUTDATED PREAWARD SURVEY TO FIND MOODY'S INSPECTION SYSTEM INADEQUATE FOR THE PROCUREMENTS DOCKETED UNDER B-180732 AND B-181971. IN ADDITION, MOODY'S INSPECTION SYSTEM WAS FOUND BY THE PREAWARD SURVEY TO MEET THE MINIMUM QUALITY ASSURANCE AND INSPECTION REQUIREMENTS FOR SURPLUS DEALERS, A FACT WHICH HAS BEEN SUBSEQUENTLY CONFIRMED IN THE QAR'S STATEMENT FURNISHED BY MOODY. HOWEVER, IT WOULD SEEM THAT THIS FINDING WOULD NOT NECESSARILY PRECLUDE FUTURE FINDINGS OF INADEQUACY OF MOODY'S INSPECTION SYSTEM FOR A QPL ITEM.

THEREFORE, BASED ON THE FOREGOING, WE MUST CONCLUDE THAT ASO'S FINDING THAT MOODY WAS NONRESPONSIBLE HAD NO REASONABLE BASIS. WE NOTE, HOWEVER, THAT ASO HAS STATED THAT WITH RESPECT TO FUTURE PROCUREMENTS NEW PREAWARD SURVEYS WOULD BE CONDUCTED.

MOREOVER, THE STATED PRESUMPTION BY ASO OF THE UNACCEPTABILITY OF SURPLUS MATERIAL OFFERED BY A BIDDER, WHO DOES NOT IN ITS BID SPECIFY THE EXACT CONDITION OF THE MATERIAL OFFERED AND AFFIRMATIVELY VOLUNTEER AND SHOW THAT IT COULD MEET ALL OF THE IFB REQUIREMENTS (INCLUDING QPL AND TEST REQUIREMENTS), IS NOT BOTTOMED ON ESTABLISHED PROCUREMENT PRINCIPLES. THERE WERE NO REQUIREMENTS IN THE IFB'S FOR THE SUBMISSION OF SUPPORTING DATA CONCERNING THE OFFERING OF SURPLUS PROPERTY AS A CONDITION OF ELIGIBILITY FOR AWARD. BY SUBMITTING UNQUALIFIED BIDS UNDER AN IFB, BIDDERS OFFERING SURPLUS PROPERTY WOULD BE RESPONSIVE TO THE ADVERTISED REQUIREMENTS SUBJECT ONLY TO RESPONSIBILITY FINDINGS. SEE B-155524, JANUARY 14, 1965; B-160377, MAY 31, 1967; B-162931, SUPRA; B-165809, JANUARY 24, 1969. A BIDDER CANNOT BE EXPECTED TO RESPOND IN ITS BID TO INFORMATIONAL REQUIREMENTS CONCERNING ITS ABILITY TO MEET THE IFB SPECIFICATIONS WHERE THESE REQUIREMENTS ARE NOT CALLED FOR IN THE IFB. UNDER SUCH CIRCUMSTANCES, IF THE CONTRACTING OFFICER REQUIRES INFORMATION, WHICH HAS NOT BEEN REQUIRED TO BE SUBMITTED IN A BID, CONCERNING THE EXACT CONDITION OR SOURCE OF THE SURPLUS MATERIAL OFFERED BY A LOW BIDDER OR THE LOW BIDDER'S ABILITY TO PERFORM IN ACCORDANCE WITH THE IFB SPECIFICATIONS, HE MAY INQUIRE OF THE SURPLUS BIDDER AS TO HOW IT WILL COMPLY WITH THE SPECIFICATIONS, AND IF THAT BIDDER IS UNABLE TO MEET THE IFB REQUIREMENTS, THE BIDDER COULD BE DETERMINED TO BE NON-RESPONSIBLE.

SHELF LIFE LIMITATIONS

ASO ALSO CLAIMS THAT THE ARTICLES MOODY OFFERED UNDER THE IFB'S DOCKETED UNDER B-180732 AND B-181971 DID NOT COMPLY WITH THE SHELF LIFE LIMITATIONS OF THE ARTICLES' ELASTOMER COMPONENTS. THIS ALSO MEANT THAT THE OFFERED MATERIALS WERE IN VIOLATION OF THE "NEW MATERIAL" CLAUSE (DISCUSSED BELOW).

IN THIS REGARD, ASO REFERS TO THE IFB SCHEDULE INVOLVED IN B-180732 WHICH REFERENCES THE SHELF LIFE OF THE ACCUMULATORS AS 3 YEARS, AFTER WHICH DETERIORABLE PARTS MUST BE REPLACED. ALSO, PARAGRAPH 5.1(B) OF THE AIR FORCE-NAVY AERONAUTICAL (ANA) BULLETIN NO. 438C, DATED FEBRUARY 15, 1965, ENTITLED AGE CONTROLS OF AGE-SENSITIVE ELASTOMERIC ITEMS, PROVIDES THAT THE ELASTOMERIC O-RINGS IN THE UNUSED ACCUMULATORS MAY NOT EXCEED 4 QUARTERS (12 MONTHS). THIS BULLETIN WAS INCORPORATED BY REFERENCE BY SECTION G-700-G OF THE IFB'S HERE UNDER CONSIDERATION (B 180732 AND B- 181971). MOODY'S BID WAS NOT IN COMPLIANCE WITH THESE REQUIREMENTS, INASMUCH AS MOODY STATED IN ITS BID THAT IT ACQUIRED THE ACCUMULATORS FROM THE AIR FORCE IN 1970, OR MORE THAN 3 YEARS FROM THE DATE THE ACCUMULATORS WERE ASSEMBLED.

MOODY QUESTIONS THE VALIDITY OF THE 3-YEAR SHELF LIFE LIMITATION AND ALLEGES THAT SINCE THE ACCUMULATORS WERE AIR FORCE SURPLUS AND THE AIR FORCE CONSIDERS THEM NONDETERIORATIVE, THAT ASO CANNOT LIMIT THE SHELF LIFE. IT IS CLEAR THAT THE AIR FORCE'S MINIMUM NEEDS ARE NOT NECESSARILY DETERMINATIVE OF ASO'S MINIMUM NEEDS. SEE B-178584, SUPRA. SINCE MOODY HAS PRESENTED NO PROBATIVE EVIDENCE WHICH WOULD SHOW THAT THE 3-YEAR SHELF LIFE LIMITATION IS UNREASONABLE, WE MAY NOT QUESTION THIS REQUIREMENT.

PARAGRAPH 3.3.1.1 OF MIL-C-19246C INVOLVED IN B-181971 STATES:

3.1.1.1 AGE-- ELASTOMER COMPONENTS SHALL NOT BE MORE THAN 12 MONTHS OLD FROM THE DATE OF MANUFACTURE TO THE DATE OF DELIVERY TO ANY GOVERNMENT SERVICE OR TO ANY AIRFRAME OR ACCESSORY MANUFACTURER.

WE HAVE NO BASIS TO FIND THIS REQUIREMENT UNREASONABLE. MOREOVER, MOODY ADMITS THAT IT WOULD HAVE TO REPLACE THE ELASTOMER COMPONENTS IN THE OXYGEN MASK HOSE CONNECTORS IN ORDER TO COMPLY WITH THIS LIMITATION. THE ACCEPTABILITY OF MOODY'S PROPOSED "REFURBISHMENT" OF THE CONNECTORS IS CONSIDERED BELOW.

ASO MAINTAINS THAT MOODY CANNOT MEET THE CURE AND ASSEMBLY DATE MARKING, MANUFACTURING IDENTITY, AND STORAGE REQUIREMENTS FOR AGE CONTROL OF AGE- SENSITIVE ELASTOMERIC ITEMS SET OUT IN PARAGRAPHS 5.3, 5.4, AND 5.5 OF ANA BULLETIN NO. 438C, AND THAT MOODY MUST DEMONSTRATE IN ITS BID ITS COMPLIANCE WITH THE BULLETIN.

THESE PARAGRAPHS PROVIDE IN PERTINENT PART:

5.3.1 PRIOR TO ASSEMBLY, THE AGE CONTROL OF UNINSTALLED ELASTOMER ITEMS AND PRODUCTS SHALL BE BASED ON THE CURE DATE. CURE DATE SHALL BE MARKED ON CONTAINERS IN ACCORDANCE WITH MIL-STD-129 * * *

5.3.2 THE AGE CONTROL OF AN ASSEMBLY CONTAINING ELASTOMER ITEMS SHALL BE BASED ON THE ASSEMBLY DATE. ASSEMBLY DATE SHALL BE PHYSICALLY MARKED ON THE ASSEMBLY * * * ASSEMBLY-DATE INFORMATION SHALL ALSO BE INDICATED ON UNIT, INTERMEDIATE, AND SHIPPING CONTAINERS CONTAINING A SINGLE LINE ITEM. EXTERIOR SHIPPING CONTAINERS CONTAINING MAJOR ASSEMBLIES COMPRISING TWO OR MORE SUBASSEMBLIES THAT EMBODY RUBBER ITEMS SHALL BE IDENTIFIED BY THE DATE OF THE OLDEST ASSEMBLY CONTAINED THEREIN. * * *

5.3.3 PACKAGES WHICH INCLUDE MIXED CATEGORIES OF CURED RUBBER ITEMS SHALL BE PHYSICALLY MARKED WITH THE ASSEMBLY DATE OF THE OLDEST ASSEMBLY IN THE PACKAGE AND THIS ASSEMBLY DATE SHALL BE INDICATED ON THE UNIT, INTERMEDIATE, AND SHIPPING CONTAINERS FOR THE ITEMS.

5.4 MANUFACTURING IDENTITY.-- IN ALL CASES, THE MANUFACTURER OR THE DISTRIBUTOR SHALL MAINTAIN COMPLETE MANUFACTURER IDENTITY (MANUFACTURER'S NAME, CURE DATE, ASSEMBLY DATE, SPECIFICATIONS ON CURE DATED ITEMS) OF THE ITEMS, PRODUCTS, OR ASSEMBLIES FOR SUBSEQUENT TRANSMITTAL WHEN SOLD TO A CONTRACTOR, SUBCONTRACTOR, OR THE GOVERNMENT.

5.5 STORAGE.-- RUBBER ITEMS, PRODUCTS, AND ASSEMBLIES THAT CONTAIN AGE- SENSITIVE POLYMERS SHALL BE PROTECTED FROM CIRCULATING AIR, SUNLIGHT, FUEL, OIL, WATER, DUST, AND OZONE (WHICH IS GENERATED BY ELECTRIC ARCS, FLUORESCENT LAMPS, AND SIMILAR ELECTRICAL EQUIPMENT). THE STORAGE TEMPERATURE SHOULD NOT EXCEED 100 DEGREES F. AND SHALL NOT EXCEED 125 DEGREES F.

WE BELIEVE PARAGRAPHS 5.3.1 AND 5.4 AND THE FIRST PART OF PARAGRAPH 5.3.2 OF ANA BULLETIN NO. 438C CONCERNING PRODUCT AND MANUFACTURER IDENTIFICATION ARE APPLICABLE ONLY TO THE MANUFACTURER OR AUTHORIZED DISTRIBUTOR OF THE PRODUCT, WHILE THE LAST PART OF PARAGRAPH 5.3.2 AND PARAGRAPHS 5.3.3 AND 5.5 ARE APPLICABLE TO ALL SUPPLIERS. HOWEVER, IT MAY BE THAT MOODY WOULD REQUIRE SOME OF THE INFORMATION MAINTAINED BY MANUFACTURERS AND AUTHORIZED DISTRIBUTORS UNDER PARAGRAPH 5.4 IN ORDER TO COMPLY WITH PARAGRAPHS 5.3.2 AND 5.3.3.

ALSO, WE AGREE WITH ASO THAT IF MOODY CANNOT COMPLY WITH THE ABOVE QUOTED MARKING AND STORAGE REQUIREMENTS, IT MAY BE NONRESPONSIBLE. HOWEVER, AS WE HAVE PREVIOUSLY STATED, WE DO NOT FEEL THAT MOODY MUST RESPOND IN ITS BID TO IDENTIFICATION REQUIREMENTS NOT OTHERWISE REQUIRED BY THE IFB. THESE MATTERS SHOULD HAVE BEEN RESOLVED BY A TIMELY PRE-AWARD SURVEY AFTER BID OPENING. WE HAVE FOUND NO INDICATION, ON THE BASIS OF THE RECORD BEFORE US (WHICH INCLUDES THE OLD PREAWARD SURVEY), THAT MOODY COULD NOT HAVE COMPLIED WITH THE MARKING AND STORAGE REQUIREMENTS APPLICABLE TO IT IN EITHER OF THE TWO PROCUREMENTS CONSIDERED HERE.

IF MOODY WAS UNABLE TO IDENTIFY THE CURE OR ASSEMBLY DATES OF THE ACCUMULATORS OR CONNECTORS (ASSUMING ARGUENDO THAT IT WAS NOT KNOWN THAT THE ELASTOMERS EXCEEDED THEIR APPLICABLE SHELF LIFE), THEN THERE WOULD BE FOR APPLICATION PARAGRAPH 5.1(D) OF ANA BULLETIN NO. 438C:

(D) ELASTOMER ITEMS CONTROLLED BY THIS BULLETIN SHALL BE REJECTED WHEN THE CURE DATE CANNOT BE DETERMINED.

"NEW MATERIAL" CLAUSE

ASO CONTENDS THAT MOODY'S BIDS AND ALDEN'S BID UNDER THESE PROCUREMENTS (ALL OF WHICH OFFERED SURPLUS MATERIAL) MUST BE REJECTED AS NONRESPONSIVE BECAUSE THEY CONTRAVENE THE "NEW MATERIAL" CLAUSE OF THE IFB'S. ASO FURTHER MAINTAINS THAT ANY BID OFFERING SURPLUS IS NONRESPONSIVE UNLESS THE IFB SPECIFICALLY INVITES BIDS OFFERING SURPLUS ITEMS, AND A BID OFFERING SURPLUS MATERIAL CANNOT BE CONSIDERED WHERE THE "GOVERNMENT SURPLUS" CLAUSE IS NOT INCLUDED IN THE IFB, AS WAS THE CASE HERE. ASO ALSO OBSERVES THAT SINCE THE PARTS OFFERED BY MOODY CLEARLY EXCEEDED THE SHELF LIFE OF THE ACCUMULATORS AND THE CONNECTORS, RESPECTIVELY, CONSIDERATION OF ITS BIDS INVOLVED IN B-180732 AND B 181971 WAS PRECLUDED BY THE "NEW MATERIAL" CLAUSE PROHIBITION OF MATERIALS "OF SUCH AGE OR SO DETERIORATED AS TO IMPAIR THEIR USEFULNESS OR SAFETY."

ASPR SEC. 1-1208 (1974 ED.), WHICH GOVERNS THE PROCUREMENT OF USED AND RECONDITIONED MATERIAL AND FORMER GOVERNMENT SURPLUS PROPERTY AND WHICH SETS OUT THE CIRCUMSTANCES FOR USE OF THE "NEW MATERIAL" CLAUSE AND THE "GOVERNMENT SURPLUS" CLAUSE, STATES:

PROCUREMENT OF USED AND RECONDITIONED MATERIAL AND FORMER GOVERNMENT SURPLUS PROPERTY.

(A) GENERALLY, ALL SUPPLIES OR COMPONENTS THEREOF, INCLUDING FORMER GOVERNMENT PROPERTY, PURCHASED, SHALL BE NEW (NOT USED OR RECONDITIONED, AND NOT OF SUCH AGE OR SO DETERIORATED AS TO IMPAIR THEIR USEFULNESS OR SAFETY). HOWEVER, THE NEEDS OF THE GOVERNMENT MAY SOMETIMES BE MET, AND ECONOMIES EFFECTED, THROUGH THE PURCHASE OF ITEMS WHICH ARE NOT NEW. SOLICITATIONS SHALL INCLUDE THE NEW MATERIAL CLAUSE IN 7-104.48, EXCEPT WHEN THE CLAUSE WOULD SERVE NO USEFUL PURPOSE. THIS CLAUSE IS APPROPRIATE FOR USE NOT ONLY IN SUPPLY CONTRACTS, BUT ALSO IN SERVICE CONTRACTS WHICH MAY INVOLVE AN INCIDENTAL FURNISHING OF PARTS, SUCH AS CONTRACTS FOR OVERHAUL, MAINTENANCE OR REPAIR.

(B) IN ALL PROCUREMENTS IN WHICH THE CONTRACTING OFFICER HAS DETERMINED THAT SUPPLIES AND COMPONENTS WHICH ARE USED OR RECONDITIONED BUT WHICH FULL COMPLY WITH THE SPECIFICATIONS AND OTHER CONTRACT REQUIREMENTS ARE ACCEPTABLE, THE SOLICITATION SHALL INCLUDE PROVISIONS CLEARLY INDICATED THE SUPPLIES OR COMPONENTS WHICH NEED NOT BE NEW, AND DETAILS CONCERNING THEIR ACCEPTABILITY. IN DETERMINING WHETHER SUCH SUPPLIES AND COMPONENTS MAY BE PURCHASED, THE FOLLOWING CRITERIA SHALL BE CONSIDERED: (I) SAFETY OF PERSONS OR PROPERTY;

(II) FINAL COST TO THE GOVERNMENT (INCLUDING MAINTENANCE, INSPECTION, TESTING, AND USEFUL LIFE);

(III) PERFORMANCE REQUIREMENTS; AND (IV) AVAILABILITY AND COST OF NEW SUPPLIES AND COMPONENTS (FOR EXAMPLE, OUT-OF-PRODUCTION ITEMS).

(C) ITEMS PREVIOUSLY SOLD AS GOVERNMENT SURPLUS SHALL NOT BE ACCEPTED UNLESS IT IS DETERMINED THAT THE SURPLUS PROPERTY OFFERED FULLY MEETS THE APPLICABLE SPECIFICATIONS AND OTHER CONTRACT REQUIREMENTS. IN ADDITION, CARE MUST BE EXERCISED TO INSURE THAT THE PRICES PAID FOR SUCH ITEMS ARE REASONABLE GIVING DUE CONSIDERATION TO OVERALL COST SAVINGS TO THE GOVERNMENT WITHOUT AFFECTING QUALITY. WHERE A CONTRACT CALLS FOR MATERIAL TO BE FURNISHED AT COST, THE ALLOWABLE CHARGE FOR ANY GOVERNMENT SURPLUS PROPERTY FURNISHED SHALL BE THE COST AT WHICH THE CONTRACTOR OR HIS AFFILIATE ACQUIRED THE PROPERTY.

(D) THE SOLICITATIONS SHALL INCLUDE THE GOVERNMENT SURPLUS CLAUSE IN 7- 104.49, EXCEPT WHEN THE CLAUSE WOULD SERVE NO USEFUL PURPOSE.

THE "NEW MATERIAL" CLAUSE STATES:

EXCEPT AS TO ANY SUPPLIES AND COMPONENTS WHICH THE SPECIFICATION OR SCHEDULE SPECIFICALLY PROVIDES NEED NOT BE NEW, THE CONTRACTOR REPRESENTS THAT THE SUPPLIES AND COMPONENTS INCLUDING ANY FORMER GOVERNMENT PROPERTY IDENTIFIED PURSUANT TO THE "GOVERNMENT SURPLUS" CLAUSE OF THIS CONTRACT TO BE PROVIDED UNDER THIS CONTRACT ARE NEW (NOT USED OR RECONDITIONED, AND NOT OF SUCH AGE OR SO DETERIORATED AS TO IMPAIR THEIR USEFULNESS OR SAFETY). IF AT ANY TIME DURING THE PERFORMANCE OF THIS CONTRACT, THE CONTRACTOR BELIEVES THAT THE FURNISHING OF SUPPLIES OR COMPONENTS WHICH ARE NOT NEW IS NECESSARY OR DESIRABLE, HE SHALL NOTIFY THE CONTRACTING OFFICER IMMEDIATELY, IN WRITING, INCLUDING THE REASONS THEREFOR AND PROPOSING ANY CONSIDERATION WHICH WILL FLOW TO THE GOVERNMENT IF AUTHORIZATION TO USE SUCH SUPPLIES IS GRANTED.

THE "GOVERNMENT SURPLUS" CLAUSE STATES:

(A) IN THE EVENT THE BID OR PROPOSAL IS BASED ON FURNISHING ITEMS OR COMPONENTS WHICH ARE FORMER GOVERNMENT SURPLUS PROPERTY OR RESIDUAL INVENTORY RESULTING FROM TERMINATED GOVERNMENT CONTRACTS, A COMPLETE DESCRIPTION OF THE ITEMS OR COMPONENTS, QUANTITY TO BE USED, NAME OF GOVERNMENT AGENCY FROM WHICH ACQUIRED, AND DATE OF ACQUISITION SHALL BE SET FORTH ON A SEPARATE SHEET TO BE ATTACHED TO BID OR PROPOSAL. NOTWITHSTANDING ANY INFORMATION PROVIDED IN ACCORDANCE WITH THIS PROVISION, ITEMS FURNISHED BY THE CONTRACTOR MUST COMPLY IN ALL RESPECTS WITH THE SPECIFICATIONS CONTAINED HEREIN.

(B) EXCEPT AS DISCLOSED BY THE CONTRACTOR IN (A) ABOVE, NO PROPERTY OF THE TYPE DESCRIBED HEREIN SHALL BE FURNISHED UNDER THIS CONTRACT UNLESS APPROVED IN WRITING BY THE CONTRACTING OFFICER.

UNDER THESE REGULATIONS-- IN THE ABSENCE OF LANGUAGE IN THE IFB'S INDICATING THAT THE ITEMS BEING PROCURED NEED NOT BE NEW-- THE FURNISHING OF NEW ITEMS AS REQUIRED BY THE "NEW MATERIAL" CLAUSE IS MANDATORY. COMP.GEN. 390, 396 (1968); D. MOODY & CO., INC., B 178591, B-178970, FEBRUARY 4, 1974. CONSEQUENTLY, SINCE THERE IS NOTHING IN THE THREE IFB'S IN QUESTION HERE AUTHORIZING ANYTHING BUT NEW MATERIALS, BIDDERS HAD TO OFFER NEW ITEMS IN ORDER TO BE ELIGIBLE FOR AWARD.

HOWEVER, CONTRARY TO ASO'S ASSERTIONS THAT NO SURPLUS MATERIAL CAN EVER BE OFFERED UNDER THE "NEW MATERIAL" CLAUSE, THE CLEAR AND UNAMBIGUOUS LANGUAGE OF THIS CLAUSE ENVISIONS THAT EITHER NEW MANUFACTURED OR NEW SURPLUS ITEMS WOULD BE ACCEPTABLE UNDER THE IFB'S. SEE B-155524, SUPRA; B- 162931, SUPRA; 47 COMP.GEN., SUPRA; D. MOODY & CO., INC., SUPRA. THE CLAUSE DEFINES "NEW" TO BE "NOT USED OR RECONDITIONED, AND NOT OF SUCH AGE OR SO DETERIORATED AS TO IMPAIR THEIR (THE ITEMS) USEFULNESS OR SAFETY." THE CLAUSE DOES NOT PRECLUDE THE PROCUREMENT OF NEW UNUSED UNRECONDITIONED SURPLUS MATERIAL WHICH IS NOT TOO OLD AND WHICH HAS NOT DETERIORATED. COMPARE 47 COMP.GEN., SUPRA, WHERE IT WAS FOUND THAT "OVERHAULED CERTIFIED" SURPLUS MATERIAL DID NOT QUALIFY AS "NEW."

IN SUPPORT OF ITS CONTENTION THAT NO OFFER OF SURPLUS CAN BE CONSIDERED UNDER AN IFB UNLESS IT IS SPECIFICALLY INVITED BY THE IFB, ASO REFERS TO ASPR SEC. 1-1208(C) (1974 ED.), QUOTED ABOVE. THIS IS AN OVERLY RESTRICTIVE INTERPRETATION OF THE REGULATION SINCE THE REGULATION ONLY STATES THAT FORMER GOVERNMENT SURPLUS CANNOT BE ACCEPTED UNLESS IT FULLY MEETS THE CONTRACT REQUIREMENTS AS THEY ARE SET OUT IN THE IFB. INTERPRET THIS TO MEAN THAT NO SPECIAL CONSIDERATIONS OR WAIVERS OF CONTRACT REQUIREMENTS CAN BE GIVEN TO SURPLUS ITEMS BECAUSE THEY MAY HAVE ONCE BEEN OWNED BY THE GOVERNMENT, AND THAT SURPLUS ITEMS MUST MEET THE SAME REQUIREMENTS AS ANY OTHER ITEMS OFFERED UNDER THE CONTRACT.

THESE OVERLY RESTRICTIVE INTERPRETATIONS OF ASPR SEC. 1-1208 (1974 ED.) ARE APPARENTLY RELATED TO ASO'S BASIC DISTRUST OF SURPLUS ITEMS, WHICH, AS WE INDICATED ABOVE, IS NOT, IN AND OF ITSELF, SUFFICIENT REASON TO ELIMINATE SURPLUS ITEMS FROM AWARD CONSIDERATION UNLESS THE CONTRACTING OFFICER AND COGNIZANT TECHNICAL PERSONNEL DETERMINE, ON A REASONABLE BASIS, THAT SURPLUS MATERIAL WOULD NOT BE ACCEPTABLE. SEE B 162931, SUPRA. A WRITTEN DETERMINATION OF THE UNACCEPTABILITY OF SURPLUS MATERIAL SHOULD BE INCLUDED IN THE IFB (WHERE APPLICABLE). IN THIS REGARD, WE HAVE HELD THAT BIDDERS CANNOT BE EXPECTED TO BE AWARE OF A CONTRACTING OFFICER'S DISCRETIONARY DETERMINATION REGARDING THE INCLUSION OR NONINCLUSION OF CONTRACT CONDITIONS OR LIMITATIONS, SUCH AS WHETHER SURPLUS MATERIAL WOULD BE ACCEPTABLE, EXCEPT FROM PERUSING THE IFB ITSELF; NOR CAN THEY COMPETE ON AN EQUAL BASIS UNLESS THEY KNOW IN ADVANCE THE BASIS ON WHICH THEIR BIDS WILL BE EVALUATED. SEE 36 COMP.GEN. 380 (1956); DPF INCORPORATED, B-180292, SEPTEMBER 12, 1974; GRUNLEY-WALSH CONSTRUCTION COMPANY, INC., B-181593, OCTOBER 24, 1974.

SIMILARLY, WE CANNOT AGREE WITH ASO'S ASSERTION THAT THE NONINCLUSION OF THE "GOVERNMENT SURPLUS" CLAUSE IN THE IFB'S PREVENTS CONSIDERATION OF BIDS OFFERING SURPLUS. ALTHOUGH ASO EVIDENTLY BELIEVED THAT THE INCLUSION OF THE CLAUSE WOULD SERVE NO USEFUL PURPOSE BECAUSE SURPLUS MATERIAL COULD NOT BE ACCEPTED UNDER A QPL PROCUREMENT, WE BELIEVE THE ONLY EFFECT OF NONINCLUSION WOULD BE THAT A BIDDER OFFERING SURPLUS MATERIAL WOULD NOT HAVE TO INCLUDE IN ITS BID THE INFORMATION CALLED FOR IN THE "GOVERNMENT SURPLUS" CLAUSE REGARDING THE DESCRIPTION AND SOURCE OF THE OFFERED SURPLUS MATERIAL. ALTHOUGH IT WOULD SEEM THAT THE CLAUSE SHOULD NOT BE INCLUDED IN AN IFB WHERE IT WAS DETERMINED BEFORE ISSUANCE THAT SURPLUS WOULD NOT BE ACCEPTABLE, A BIDDER SHOULD NOT BE EXPECTED TO "FERRET" OUT THE REASONS WHY THE CONTRACTING AGENCY FAILED TO INCLUDE A NORMALLY STANDARD CLAUSE IN AN IFB. SEE GRUNLEY-WALSH CONSTRUCTION COMPANY, INC., SUPRA.

IN VIEW OF THE FOREGOING, WE NEED NOT CONSIDER MOODY'S ARGUMENT THAT ASO IMPLICITLY RECOGNIZED THAT GOVERNMENT SURPLUS WAS ACCEPTABLE UNDER THE IFB'S BY VIRTUE OF PARAGRAPH I-926 ("INSPECTION" CLAUSE) IN EACH OF THE IFB'S, ALTHOUGH IT IS NOTED THAT WE HAVE HELD THAT THE "INSPECTION" CLAUSE DOES NOT MODIFY IN ANY WAY THE "NEW MATERIAL" CLAUSE SO AS TO ALLOW THE ACCEPTANCE OF "RECONDITIONED" OR OVERAGE MATERIAL. SEE 47 COMP.GEN., SUPRA.

AS WAS INDICATED ABOVE, SINCE WE CANNOT, ON THE RECORD BEFORE US, OBJECT TO THE STATED SHELF LIFE REQUIREMENTS FOR ACCUMULATORS AND CONNECTORS, WE MUST CONCLUDE THAT THE ITEMS MOODY WAS OFFERING UNDER THE IFB'S CONSIDERED UNDER B-180732 AND B-181971 VIOLATED THE "NEW MATERIAL" CLAUSE'S PROHIBITION OF MATERIALS "OF SUCH AGE OR SO DETERIORATED AS TO IMPAIR THEIR USEFULNESS OR SAFETY."

"RECONDITIONED" MATERIAL

AFTER ITS INITIAL PROTEST HAD BEEN FILED IN B-181971, MOODY CLAIMED THAT IT HAD INTENDED TO "REFURBISH" THE OXYGEN MASK HOSE CONNECTORS IT WAS OFFERING BY REPLACING AND OUTDATED ELASTOMER COMPONENTS WITH APPROPRIATELY CURE-DATED AND TESTED ELASTOMERS. THIS WOULD MEAN THAT THE "REFURBISHED" CONNECTORS WOULD NO LONGER EXCEED THEIR APPLICABLE SHELF LIFE OR VIOLATE THE "NEW MATERIAL" CLAUSE. MOODY CLAIMS THAT THIS IS A WELL-KNOWN AND COMMON PRACTICE IN MILITARY SUPPLY AGENCIES. MOODY DRAWS A DISTINCTION BETWEEN "REFURBISHED" AND "RECONDITIONED" MATERIALS-- THE LATTER OF WHICH ARE ALSO NOT "NEW" AS REQUIRED BY THE "NEW MATERIAL" CLAUSE. MOODY STATES THAT "RECONDITIONING" CONTEMPLATES REWORKING TO "LIKE NEW" CONDITION AN ITEM WORN OUT BY USE OR MADE OF UNSTABLE AND DECAYED ELEMENTS, I.E., REPAIRING THE ITEM. MOODY DOES NOT BELIEVE THAT THE REPLACING OF TWO ELASTOMER COMPONENTS-- WHICH IT STATES IS A SIMPLE TASK-- IS "RECONDITIONING" WITHIN THE MEANING OF THE "NEW MATERIAL" CLAUSE.

THE NAVY HAS RESPONDED THAT THE "REFURBISHING" MOODY CLAIMED IT WAS TO PERFORM ON THE CONNECTORS CAME UNDER THE "NEW MATERIAL" CLAUSE'S "RECONDITIONING" PROHIBITION. ASO ARGUES THAT A CONNECTOR WITH REPLACED COMPONENTS (ELASTOMER OR OTHERWISE) MUST BE REGARDED AS A "RECONDITIONED" CONNECTOR. ASO ALSO NOTES THAT THIS ITEM IS VERY CRITICAL, SINCE IT CONTAINS A VALVE THAT CONTROLS OXYGEN FLOW TO THE AIRPLANE PILOT, AND IS CODED AS CONSUMABLE AND IS DISPOSED OF RATHER THAN REPAIRED WHEN CONSIDERED UNSAFE FOR USE, DUE TO THE CONNECTOR'S LOW COST AND CRITICAL APPLICATION. IN THIS CONNECTION, ASO DOES NOT STOCK REPLACEMENT ELASTOMER COMPONENTS FOR THE CONNECTORS, NOR DOES IT HAVE ANY TECHNICAL MANUALS OR MAINTENANCE PLANS THEREFOR. ASO ALSO NOTES THAT THE QUALIFY OF THE ELASTOMER COMPONENTS IS CRITICAL TO THE SAFE OPERATION OF THE CONNECTORS.

ALTHOUGH MOODY DID NOT SO OFFER IN ITS BID INVOLVED IN B-180732, IT COULD ALSO HAVE REPLACED THE FOUR ELASTOMER COMPONENTS IN THE HYDROPNEUMATIC ACCUMULATORS (ALSO ALLEGEDLY A RELATIVELY SIMPLE PROCESS) IN WHICH CASE THE SAME BASIC ARGUMENTS SET OUT ABOVE COULD BE MADE. IN THIS REGARD, ASO STATES THAT THE ACCUMULATORS ARE USED IN THE C-130 AIRCRAFT'S BRAKING SYSTEM TO PREVENT HYDRAULIC SURGES, AND ARE, THEREFORE, CRITICAL TO THE AIRCRAFT'S SAFE OPERATION.

MOODY SUPPLIED AN OXYGEN MASK HOSE CONNECTOR TO OUR OFFICE. WE FOUND IT WAS AN EASY TASK FOR NONTECHNICAL PEOPLE TO COMPLETELY AND PROPERLY DISASSEMBLE AND REASSEMBLE THE ITEM. IN ADDITION, THIS SAMPLE, WHICH APPEARED TO BE NEW AND UNUSED, WAS EXAMINED BY A GENERAL ACCOUNTING OFFICE ENGINEER. BASED UPON OUR EXAMINATION, WE HAVE DOUBT WHETHER THE REPLACEMENT OF THE ELASTOMERS IN THIS ITEM CONSTITUTES "RECONDITIONING." MOREOVER, EVEN IF IT COULD BE CONSIDERED "RECONDITIONING," WE HAVE DOUBTS AS TO THE PROPRIETY OF THE PROHIBITION OF THE REPLACEMENT OF THE ELASTOMERS IN THE PROCURED CONNECTORS, ESPECIALLY CONSIDERING THAT THERE ARE APPARENTLY NO CRITICAL TOLERANCES IN REPLACING THE ELASTOMERS OR REASSEMBLING THE CONNECTORS (UNLIKE THE SITUATION IN D. MOODY & CO., INC., 53 COMP.GEN. 742 (1974), WHERE REASSEMBLY OF THE SOLENOID VALVE HAD TO BE DONE TO A .0025-INCH TOLERANCE).

IT WOULD SEEM, THEREFORE, THAT NEW AND UNUSED CONNECTORS, IN WHICH THE ELASTOMERS (WHICH WERE CURE-DATED AND TESTED IN ACCORDANCE WITH THE APPLICABLE REQUIREMENTS) HAVE BEEN REPLACED, AFTER WHICH EACH OF THE CONNECTORS WAS SUBJECTED TO THE REQUIRED INTENSIVE QPL INDIVIDUAL ACCEPTANCE TESTS OF MIL-C-19246C, COULD WELL MEET THE GOVERNMENT'S REQUIREMENTS, NOTWITHSTANDING THE CONNECTORS' CRITICAL SAFETY APPLICATION. IN ANY CASE, WE BELIEVE THAT SOME CONSIDERATION SHOULD BE GIVEN TO NOT DISCARDING THESE ITEMS, WHERE THEY ARE NEW AND UNUSED, BECAUSE THEY HAVE AN AGE OF OVER A YEAR.

AS FOR THE ACCUMULATORS INVOLVED IN B-180732, WE CANNOT, ON THE BASIS OF THE RECORD BEFORE US (WE HAVE NOT PHYSICALLY EXAMINED THIS PART), DISAGREE WITH ASO'S POSITION THAT MOODY'S REPLACEMENT OF THE ELASTOMER COMPONENTS WOULD BE "RECONDITIONING" AND AS SUCH PRECLUDED BY THE "NEW MATERIAL" CLAUSE. IN THIS REGARD, WE WOULD TEND TO AGREE WITH ASO THAT, IN THE ORDINARY CASE, REPLACING COMPONENTS NECESSARY FOR THE SAFE AND PROPER FUNCTIONING OF "CRITICAL" AIRCRAFT AND AIRCRAFT RELATED PARTS, WHICH CAN ONLY BE ACCOMPLISHED BY DISASSEMBLING AND REASSEMBLING THE PART, WOULD BE CONSIDERED "RECONDITIONING."

IN VIEW OF THE FOREGOING, WE DO NOT FEEL THAT IT IS NECESSARY TO DRAW A FINE LINE OF DISTINCTION BETWEEN THE TERMS "RECONDITION" AND "REFURBISH."

ASO POINTS OUT THAT, EVEN ASSUMING THAT THESE "REFURBISHED" ITEMS WERE NOT "RECONDITIONED," MOODY MUST STATE IN ITS BID THAT IT WILL REPLACE THE ELASTOMER COMPONENTS IN ORDER FOR IT TO BE BOUND TO DO SO UNDER THE CONTRACTS AWARDED PURSUANT TO THE IFB'S. ON THE OTHER HAND, MOODY CLAIMS THAT IT NEED NOT SPECIFICALLY STATE IN ITS BID THAT IT PLANS TO "REFURBISH" THE ITEMS IT IS OFFERING, SINCE A BIDDER BINDS ITSELF BY ITS BID TO DELIVER CONFORMING AND ACCEPTABLE ARTICLE UNLESS IT QUALIFIES ITS BID (WHICH MOODY DID NOT DO).

WE AGREE WITH ASO THAT MOODY SHOULD HAVE INDICATED IN ITS BID THAT IT WOULD REPLACE THE ELASTOMER COMPONENTS IN THE ITEMS IN QUESTION, IF IT INTENDED TO DO SO. MOODY'S BID CLEARLY INDICATES THAT MOODY HAD ACQUIRED BOTH THE ACCUMULATORS AND CONNECTORS MORE THAN 4 YEARS PREVIOUSLY WHILE THE SHELF LIFE WAS APPARENTLY ONLY 3 YEARS FOR THE ACCUMULATORS AND ONLY 1 YEAR FOR THE CONNECTORS. CONSEQUENTLY, WE BELIEVE THAT, WITHOUT FURTHER EXPLANATION IN ITS BID INDICATING THAT IT INTENDED TO REPLACE THE ELASTOMER COMPONENTS, MOODY'S BID COULD BE INTERPRETED TO MEAN THAT MOODY WAS OFFERING ITEMS THAT HAD NOT BEEN REWORKED AND WHICH EXCEEDED THE SHELF -AGE LIMITATIONS SET BY THE GOVERNMENT. THEREFORE, WE CANNOT SAY THAT MOODY'S BID OBLIGATED IT TO "REFURBISH" THOSE PARTS AND, AT BEST, MOODY'S BID MUST BE CONSIDERED AMBIGUOUS IN THIS REGARD, SINCE THERE IS NO SPECIFIC CONDITION IN THE IFB'S PROVIDING FOR SUCH REWORKING OF THE ITEMS. IT IS WELL-SETTLED THAT AN AMBIGUOUS BID MAY NOT BE EXPLAINED AFTER BID OPENING WITH EXTRANEOUS EVIDENCE IN ORDER TO MAKE IT RESPONSIVE TO THE IFB REQUIREMENTS, SINCE THE BIDDER WOULD THEN, IN EFFECT, HAVE AN ELECTION AS TO WHETHER OR NOT IT WISHED TO HAVE ITS BID CONSIDERED BY EXPLAINING THE BID IN SUCH MANNER AS TO EITHER MEET THE IFB REQUIREMENTS OR NOT MEET SUCH REQUIREMENTS. SEE 40 COMP.GEN. 393 (1961); 50 ID. 302 (1970); A. D. ROE COMPANY, INC., 54 COMP.GEN. 271 (1974). THE GENERAL OBLIGATION OF A BIDDER TO CONFORM TO THE IFB REQUIREMENTS (WHICH WE DISCUSSED ABOVE) IS NOT APPLICABLE TO CASES WHERE THE FACE OF THE BID CONTAINS INFORMATION IN APPARENT DEROGATION OF A MATERIAL IFB REQUIREMENT. SEE 50 COMP.GEN. 8 (1970); B-175178, MAY 25, 1972; B 177258, FEBRUARY 7, 1973. THEREFORE, WE AGREE THAT ASO COULD HAVE REJECTED MOODY'S BID AS NONRESPONSIVE FOR EXCEEDING THE SHELF-AGE LIMITATIONS, SINCE WE CANNOT SAY THAT MOODY OBLIGATED ITSELF BY ITS BID TO REPLACE THE ELASTOMER COMPONENTS.

THERE MAY ALSO BE SOME QUESTION AS TO WHETHER THE "REFURBISHED" ACCUMULATORS AND CONNECTORS OFFERED BY MOODY ARE STILL QUALIFIED PRODUCTS. IT IS CLEAR THAT THE QPL AND MILITARY SPECIFICATION PREPARING ACTIVITY (IN THESE CASES, NAVAIR) HAS THE DISCRETION TO DETERMINE WHETHER THE "REFURBISHING" BY MOODY HAS SUFFICIENTLY CHANGED THE PRODUCT AS TO REMOVE ITS QUALIFICATION. SEE PARAGRAPH 4-109, DEFENSE STANDARDIZATION MANUAL 4120.3-M; B-176159, SEPTEMBER 26, 1972, AFFIRMED AT B-176159, JANUARY 24, 1973. WE HAVE RECOGNIZED THAT A CHANGE OF PLACE OF MANUFACTURE OR ASSEMBLY OF A ONCE QUALIFIED ITEM CAUSES IT TO BE SUBJECT TO REQUALIFICATION (OR REMOVAL FROM THE QPL) BEFORE IT AGAIN WOULD BE ELIGIBLE FOR AWARD UNDER A QPL PROCUREMENT, AND THAT IF IT HAS NOT BEEN REQUALIFIED BEFORE BID OPENING, IT MUST BE REJECTED. SEE B-167304, AUGUST 27, 1969; B-171558, FEBRUARY 11, 1971; 52 COMP.GEN. 142 (1972); 53 ID. 249. SINCE THE ACCUMULATORS AND CONNECTORS ARE BEING DISASSEMBLED, THE ELASTOMERS REPLACED, AND REASSEMBLED BY MOODY, AND NOT AT THE PLANT AT WHICH THEY WERE QUALIFIED, WE HAVE SOME DOUBT THAT THEY CAN STILL BE CONSIDERED QUALIFIED PRODUCTS.

SUMMARY OF B-180732 AND B-181971

ALTHOUGH WE HAVE RAISED OBJECTIONS TO ASO'S OVERLY RESTRICTIVE INTERPRETATIONS OF THE APPLICABLE REGULATIONS GOVERNING THE PROCUREMENT OF QUALIFIED AND/OR SURPLUS ITEMS AND TO ASO'S DETERMINATION THAT MOODY WAS NONRESPONSIBLE, WE CANNOT OBJECT TO ASO'S ULTIMATE DECISION THAT MOODY'S BIDS UNDER THE IFB'S DOCKETED UNDER B-180732 AND B-181971 COULD NOT BE ACCEPTED DUE TO THEIR NONRESPONSIVENESS. THE ITEMS OFFERED BY MOODY WERE IN EXCESS OF THEIR APPLICABLE SHELF LIFE AND, CONSEQUENTLY, WERE UNACCEPTABLE UNDER THE "NEW MATERIAL" CLAUSE. ALSO, ASO HAS ADVISED (ALBEIT AFTER THE AWARDS HAD BEEN MADE) THAT COGNIZANT TECHNICAL PERSONNEL HAVE DETERMINED THAT THE ACCUMULATORS AND CONNECTORS ARE SO CRITICAL THAT SURPLUS COULD NEVER HAVE BEEN DETERMINED ACCEPTABLE IN THESE CASES. ANY EVENT, PERFORMANCE UNDER THESE PROCUREMENTS HAS LONG SINCE BEEN COMPLETED.

B-182091

IN B-182091, ALTHOUGH ASO REGARDED THE LOW BIDDER TO BE NONRESPONSIVE BY VIRTUE OF ITS OFFER OF SURPLUS MATERIAL, IT DECIDED, IN VIEW OF THE OVER $30,000 DIFFERENCE BETWEEN ALDEN'S BID AND THE NEXT LOW BID, AND AFTER A POSITIVE PREAWARD SURVEY AND A DETERMINATION BY COGNIZANT TECHNICAL PERSONNEL THAT SURPLUS MATERIAL WAS ACCEPTABLE, TO CANCEL THE IFB AND NEGOTIATE A SOLE-SOURCE AWARD ON A "PUBLIC EXIGENCY" BASIS TO ALDEN. THE COMPLETE FACTS AND RATIONALE FOR ASO'S ACTIONS IN THIS REGARD ARE SET OUT ABOVE.

IN A SUPPLEMENTAL REPORT SEPTEMBER 25, 1974, ON B-180732, ASO SETS FORTH ITS GENERAL POLICY CONCERNING ITS RESPONSE WHEN IT RECEIVES WHAT IT REGARDS AS "UNSOLICITED" SURPLUS BIDS AS FOLLOWS:

* * * SINCE THE MATERIALS PROCURED BY ASO ARE ESSENTIALLY AERONAUTICAL ITEMS ON WHICH SURPLUS MATERIAL COULD NOT BE ACCEPTED UNLESS COMPLETE ASSURANCE WERE HAD WITH RESPECT TO THE QUALITY OF THE ITEMS, THE CONTRACTING OFFICER DOES NOT CONSIDER IT POSSIBLE TO INVITE BIDS OFFERING SURPLUS MATERIAL. * * * THIS IS SO BECAUSE SURPLUS MATERIAL CAN BE ACCEPTED ONLY AFTER SUCH TESTS AND EVALUATION AS ARE CONSIDERED NECESSARY CONSIDERING THE AGE AND CONDITION OF THE MATERIAL. ACCORDINGLY, WHERE AN UNINVITED OFFER OF SURPLUS MATERIAL IS RECEIVED UNDER AN IFB AT ASO, THE CONTRACTING OFFICER REFERS THE QUESTION TO THE COGNIZANT TECHNICAL PERSONNEL AND REQUESTS ADVICE AS TO WHETHER SURPLUS MATERIAL MIGHT BE CONSIDERED. IF THE PRICE OFFERED BY THE BIDDER OFFERING SURPLUS MATERIAL SHOWS THAT A SIGNIFICANT GIVING MIGHT BE REALIZED THROUGH THE PURCHASE OF MATERIAL (AFTER CONSIDERED TESTING COSTS AND OTHER COSTS THE GOVERNMENT MIGHT INCUR THROUGH THE USE OF SURPLUS MATERIAL), THE COGNIZANT TECHNICAL PERSONNEL VISIT, OR REQUEST REPRESENTATIVES OF THE ACO TO VISIT, THE CONTRACTOR'S FACILITY TO EXAMINE THE SURPLUS MATERIAL TO DETERMINE ITS AGE AND CONDITION. IN SOME CASES WHERE THE ITEMS OFFERED ARE DYNAMIC COMPONENTS, THE ITEMS CANNOT BE PURCHASED UNLESS A COMPLETE HISTORY OF THE USE OF THE ITEMS, INCLUDING NUMBER OF OPERATING HOURS TAKEN FROM A LOG BOOK OR OTHER SUBSTANTIATING DOCUMENT, AND OTHER INFORMATION RELATIVE TO THE USE OF THE PART IS FURNISHED. DEPENDING UPON THE AGE AND CONDITION OF THE MATERIAL, COGNIZANT TECHNICAL PERSONNEL WILL THEN ADVISE WHETHER THE MATERIAL MAY BE CONSIDERED ACCEPTABLE AND WHAT TESTING OR REFURBISHING IS REQUIRED TO MAKE THE OFFERED MATERIAL ACCEPTABLE. WHERE, AS A RESULT OF THE FOREGOING, IT APPEARS IN THE INTEREST OF THE NAVY TO CONSIDER PROCUREMENT OF SUCH SURPLUS MATERIAL, THE INVITATION FOR BIDS IS CANCELLED. THE MATERIAL IS THEN PROCURED UNDER A NEGOTIATED CONTRACT AFTER THE SOLICITATION OF A PRICE FROM THE SURPLUS DEALER THAT IS BASED UPON ITS COMPLIANCE WITH THE QUALITY ASSURANCE PROVISIONS DEVELOPED FOR THE OFFERED SURPLUS MATERIAL. IF THE PRICES BID IN RESPONSE TO THE CANCELLED IFB BY CONCERNS OFFERING NEW MATERIAL INDICATES THE POSSIBILITY OF THEIR FURNISHING NEW MATERIAL AT PRICES COMPETITIVE WITH THE APPROXIMATE PRICE EXPECTED TO BE OFFERED BY THE SURPLUS DEALER, OFFERS ARE ALSO SOLICITED FROM SUCH CONCERNS. THE FOREGOING CANNOT BE ACCOMPLISHED BEFORE THE INITIAL SOLICITATION OF BIDS SINCE, EVEN IF IT WERE POSSIBLE TO DEVELOP GENERAL SPECIFICATIONS FOR THE REFURBISHING OF A PARTICULAR ITEM OF SURPLUS MATERIAL IRRESPECTIVE OF THE AGE OR CONDITION OF THE MATERIAL, THE VOLUME OF PROCUREMENTS AT ASO WOULD PRECLUDE THE POSSIBILITY OF PREPARING SUCH SPECIFICATIONS TO COVER THE VERY FEW INSTANCES (OF COURSE, UNKNOWN IN ADVANCE) IN WHICH BIDS OFFERING SURPLUS MATERIAL ARE RECEIVED. IN VIEW OF THE FOREGOING, WE CANNOT AND DO NOT INVITE BIDS OFFERING SURPLUS MATERIAL IN ANY SOLICITATION INITIALLY ISSUED BY ASO, BUT, WHERE A BID IS RECEIVED THAT OFFERS SURPLUS MATERIAL, WILL INVESTIGATE ITS ACCEPTABILITY AND, IF ACCEPTABLE, RESOLICIT THE PROCUREMENT AS OUTLINED ABOVE.

WHILE WE HAVE SERIOUS RESERVATIONS AS TO THE PROPRIETY OF THIS POLICY, AS WILL BE DISCUSSED BELOW, WE BELIEVE THAT ASO'S ACTIONS TAKEN HERE ARE CONSISTENT WITH THIS POLICY, AND THAT MOODY APPARENTLY IS NOT BEING "SINGLED OUT" IN THESE CASES FOR ADVERSE TREATMENT. IN THIS REGARD, ASO HAS COMPARED ITS ACTION INVOLVED IN B-181971 AND B-182091 BY NOTING THAT THE DIFFERENCE BETWEEN THE BID PRICES IN F-182091 WAS OVER $30,000 (NOT INCLUDING THE $960 COST OF GOVERNMENT TESTING WHICH ASO BELIEVED WAS NECESSARY TO INSURE RECEIPT OF AN ACCEPTABLE PRODUCT) WHILE THE DIFFERENCE BETWEEN THE BIDS IN B-181971 WAS ONLY $2,242 (NOT INCLUDING THE COST OF GOVERNMENT TESTING OF $2,500).

THE APPLICATION OF THIS POLICY AS TO DOCKET B-182091 IS SOMEWHAT ANALOGOUS TO THE SITUATIONS IN B-164481, SEPTEMBER 30, 1968, AND B 171226, JANUARY 8, 1971, IN WHICH WE RECOGNIZED GENERALLY THE PROPRIETY OF AN AGENCY'S REEVALUATING ITS MINIMUM NEEDS UPON RECEIPT OF A LOW NONCONFORMING PROPOSAL UNDER A REQUEST FOR PROPOSALS, AND DECIDING THAT OTHER THAN "NEW" MATERIAL WOULD BE ACCEPTABLE AND MAKING AN AWARD ON THAT BASIS TO THE LOW OFFEROR, SO LONG AS THE AGENCY GAVE THE OTHER OFFERORS AN EQUAL OPPORTUNITY TO COMPETE ON THE BASIS. IN THE PRESENT CASE, BASED ON ASO'S BELIEF THAT ALDEN'S BID WAS NONRESPONSIVE TO THE IFB BY VIRTUE OF ITS OFFER OF SURPLUS MATERIAL, IT WOULD SEEM THAT ASO SHOULD HAVE SOLICITED THE OTHER BIDDERS TO GIVE THEM AN OPPORTUNITY TO SUBMIT OFFERS ON THE SAME BASIS AS ALDEN BEFORE IT AWARDED THE SOLE SOURCE CONTRACT TO ALDEN. HOWEVER, UNLIKE B-164481, SUPRA, WE ARE UNABLE TO FIND THAT THE OTHER BIDDERS WERE PREJUDICED BY THIS APPARENT OVERSIGHT, SINCE IT WOULD SEEM UNLIKELY IN THIS PARTICULAR CASE THAT THE OTHER BIDDERS, WHO ARE MANUFACTURERS OF THE ATTITUDE INDICATORS, WOULD HAVE OFFERED SURPLUS MATERIAL. INDEED, ASTRONAUTICS IN ITS PROTEST HAS NEVER CLAIMED THAT IT WOULD HAVE OFFERED SURPLUS MATERIAL, EVEN IF IT HAD BEEN GIVEN THE OPPORTUNITY.

HOWEVER, ON THE BASIS OF THE RECORD BEFORE US, WE DO NOT BELIEVE THAT ALDEN'S BID WAS NONRESPONSIVE TO THE IFB; NOR DO WE BELIEVE THAT ALDEN WAS A NONRESPONSIBLE PROSPECTIVE CONTRACTOR. IN THIS REGARD, AS WE INDICATED ABOVE, A BIDDER OFFERING SURPLUS MATERIAL IS NOT AUTOMATICALLY PRECLUDED FROM BIDDING ON A QPL PROCUREMENT SO LONG AS THE PRODUCT IT IS OFFERING IS QUALIFIED AND CAN OTHERWISE MEET THE IFB REQUIREMENTS. ALSO, SINCE IT WAS FOUND THAT THE ITEMS THAT ALDEN WAS OFFERING WERE NEW AND UNUSED, THOSE ITEMS DID NOT VIOLATE THE "NEW MATERIAL" CLAUSE.

FURTHERMORE, ALDEN SPECIFICALLY INDICATED IN ITS BID THAT IT WOULD PERFORM ALL OF THE REQUIRED QPL ACCEPTANCE TESTS. ALDEN HAS SINCE INDICATED THAT ALL OF THESE TESTS WERE SATISFACTORILY PERFORMED, EXCEPT SOME OF THOSE TESTS LISTED IN PARAGRAPH 4.5.2.2 (SAMPLING PLAN B) OF MIL-I -27193B (USAF), WHICH WOULD BE HARMFUL OR DESTRUCTIVE TO THE INDICATORS TESTED. (SINCE THE INITIAL CONTRACT QUANTITY WAS LESS THAN 15, "SAMPLING PLAN B" TESTS WOULD NOT SEEM TO BE REQUIRED FOR THIS INITIAL ORDER.)

ALDEN ALSO INDICATED IN ITS BID THAT IT WOULD "REFURBISH" THE INDICATORS, IF NECESSARY; HOWEVER, IT APPEARS THAT NOTHING HAD TO BE DONE TO THE INDICATORS WHICH WOULD QUALIFY AS "RECONDITIONING," OR WHICH WOULD OTHERWISE BE IN VIOLATION OF THE "NEW MATERIAL" CLAUSE. IN THIS REGARD, WE HAVE BEEN INFORMED THAT THE ATTITUDE INDICATORS ARE CLASSIFIED AS NONDETERIORATIVE, INASMUCH AS THEY ARE "HERMETICALLY" SEALED. SEE PARAGRAPH 6.3.1 OF MIL-I-27193(B) (USAF).

MOREOVER, THE PREAWARD SURVEY WAS POSITIVE AND ALDEN WAS FOUND TO HAVE THE ABILITY TO OFFER ACCEPTABLE MATERIAL MEETING THE CONTRACT REQUIREMENTS. FURTHERMORE, THERE WAS NO FINDING THAT ALDEN HAD INADEQUATE TEST FACILITIES OR ANY INABILITY TO PERFORM THE REQUIRED TESTS. CONSEQUENTLY, ON THE BASIS OF THE RECORD BEFORE US, WE BELIEVE THAT AWARD COULD HAVE BEEN MADE UNDER THE IFB TO ALDEN, NOTWITHSTANDING ASO'S CONTRARY BELIEF.

HOWEVER, ASO'S DECISION TO CANCEL THE IFB WOULD APPEAR TO PROPERLY FALL UNDER ASPR SEC. 2-404.1(B)(B) (1974 ED.) WHICH PERMITS CANCELLATION WHERE THE BIDS RECEIVED INDICATE THAT THE NEEDS OF THE GOVERNMENT CAN BE SATISFIED BY A LESS EXPENSIVE ARTICLE THAN THAT WHICH THE IFB ORIGINALLY INVITED. SEE B-162487, DECEMBER 29, 1967. ALSO, IN VIEW OF OUR BELIEF THAT ALDEN WAS THE LOW RESPONSIVE AND RESPONSIBLE BIDDER UNDER THE IFB, WE CANNOT OBJECT TO THE DECISION TO NEGOTIATE A SOLE-SOURCE AWARD TO ALDEN AND CANNOT FIND THAT THE AWARD TO ALDEN PREJUDICED THE OTHER BIDDERS. EVEN IF ALDEN'S BID WAS NONRESPONSIVE, WE WOULD BE UNABLE TO FIND THAT ASO'S DECISION TO NEGOTIATE ON A "PUBLIC EXIGENCY" BASIS WITH ALDEN HAD NO REASONABLE BASIS, SINCE, AS INDICATED IN DETAIL ABOVE, ASO HAS STATED THAT ALTHOUGH THE INDICATORS WERE URGENTLY NEEDED AND REQUIRED TO BE DELIVERED COMMENCING IN JANUARY 1975 TO JUNE 1975, NEITHER THE NAVY NOR THE AIR FORCE HAD ENOUGH OF THIS ITEM IN STOCK TO SATISFY REQUIREMENTS.

ASO ADMITS THAT THE QPL ACCEPTANCE TESTS UNDER THE IFB WERE MANDATORY AND MATERIAL CONTRACT REQUIREMENTS NECESSARY TO INSURE THE QUALITY OF THE MATERIAL RECEIVED. HOWEVER, NOTWITHSTANDING ITS BELIEF AT THE TIME OF AWARD THAT SOME OF THESE MATERIAL QPL TEST REQUIREMENTS WOULD NOT BE PERFORMED AND THAT IT WOULD NOT RECEIVE A QUALIFIED PRODUCT FROM ALDEN AS WAS REQUIRED BY MIL-I-27193B (USAF), IT DID NOT ASK THE PREPARING ACTIVITY RESPONSIBLE FOR THE LISTING AND QUALIFICATION OF THE ATTITUDE INDICATORS (WRIGHT PATTERSON AIR FORCE BASE, OHIO) FOR A WAIVER OF THE QUALIFICATION REQUIREMENTS AS REQUIRED BY ASPR SEC. 1-1108 (1974 ED.), WHICH STATES:

WAIVER OF QUALIFICATION REQUIREMENT

WHEN PROCURING A PRODUCT UNDER A SPECIFICATION WHICH INCLUDES QUALIFICATION REQUIREMENTS EITHER FOR THE END ITEM OR FOR COMPONENTS OF THE END ITEM, SUCH QUALIFICATION REQUIREMENTS CAN BE WAIVED ONLY BY THE ACTIVITY THAT PREPARED THE SPECIFICATION. IN APPROPRIATE CASES, WHEN REQUESTED BY THE CONTRACTING OFFICER, THE PREPARING ACTIVITY MAY WAIVE QUALIFICATION REQUIREMENTS. A NOTICE, ISSUED BY THE PREPARING ACTIVITY, DIRECTING A WAIVER OF THE QUALIFICATION REQUIREMENT, CONSTITUTES ADEQUATE AUTHORIZATION FOR WAIVER OF PRODUCT QUALIFICATION REQUIREMENTS. WHERE WAIVERS HAVE BEEN GRANTED, SOLICITATIONS SHALL SPECIFICALLY INDICATE THAT THE QUALIFICATION REQUIREMENT IS INAPPLICABLE. SUCH INFORMATION SHALL ALSO BE INCLUDED IN ANY SYNOPSIS OF THE PROCUREMENT.

IT WOULD SEEM THAT THE PURPOSE OF THIS "WAIVER" REQUIREMENT IS TO MAINTAIN THE TECHNICAL INTEGRITY OF QPL'S AND THE MILITARY SPECIFICATIONS DEFINING QUALIFIED PRODUCTS BY ALLOWING THE PREPARING ACTIVITY TO REVIEW AND GRANT WAIVERS OF QPL REQUIREMENTS BY PURCHASING ACTIVITIES. SEE ASPR SECS. 1-1202(D) AND (E) (1974 ED.); DEFENSE STANDARDIZATION MANUAL 4120.3- M, CHAPTER II, PARAGRAPH 2-101; B-162449, NOVEMBER 2, 1967, AFFIRMED B- 162449, JANUARY 23, 1968; B-164780, SEPTEMBER 12, 1968, AFFIRMED AT B- 164780, NOVEMBER 4, 1968. A LITERAL READING OF THIS REQUIREMENT MAY LEAD ONE TO BELIEVE THAT WAIVER NEED ONLY BE REQUESTED WHERE THE PROCURING ACTIVITY PROPOSES TO WAIVE REQUIREMENTS FOR QUALIFICATION TESTING AND QPL LISTING (AS OPPOSED TO ACCEPTANCE TESTS REQUIRED BY A MANDATORY QPL MILITARY SPECIFICATION). HOWEVER, WE BELIEVE THE REGULATION REASONABLY CONTEMPLATES THAT THE TERM "QUALIFICATION REQUIREMENT" ENCOMPASSES ALL OF THE MANDATORY REQUIREMENTS RELATING TO QPL PROCUREMENTS. THE QUALIFICATION PROCESS IS BUT ONE FACET OF THE INTEGRAL SYSTEM FOR PROCURING QUALIFIED PRODUCTS. IN OUR VIEW, THIS SYSTEM ALSO NECESSARILY INCLUDES A CONTRACTOR'S COMPLIANCE WITH ALL APPLICABLE REQUIREMENTS (INCLUDING ACCEPTANCE TEST REQUIREMENTS) OF THE MILITARY SPECIFICATION DEFINING THE QUALIFIED PRODUCT. TO OTHERWISE INTERPRET THIS REQUIREMENT WOULD SUBVERT THE PURPOSE FOR HAVING SUCH A WAIVER REQUIREMENT. JUST AS A PROCURING ACTIVITY MAY JEOPARDIZE THE TECHNICAL INTEGRITY OF A QUALIFIED PRODUCT BY FAILING TO REQUIRE DELIVERY OF A PRODUCT QUALIFIED FOR LISTING ON A QPL WITHOUT RECEIVING AN APPROPRIATE WAIVER, THE PROCURING ACTIVITY MAY EQUALLY JEOPARDIZE THE TECHNICAL INTEGRITY OF A QUALIFIED PRODUCT BY FAILING TO REQUIRE DELIVERY OF A PRODUCT QUALIFIED FOR LISTING ON A QPL WITHOUT RECEIVING AN APPROPRIATE WAIVER, THE PROCURING ACTIVITY MAY EQUALLY JEOPARDIZE THE PRODUCT'S TECHNICAL INTEGRITY BY NOT ALLOWING THE ACTIVITY RESPONSIBLE FOR PREPARING AND MAINTAINING THE APPLICABLE MILITARY SPECIFICATION AND QPL AN OPPORTUNITY TO REVIEW THE EFFECT THAT A PARTICULAR PROPOSED WAIVER OF MILITARY SPECIFICATION REQUIREMENTS WOULD HAVE ON THE QUALIFY OR RELIABILITY OF THE QUALIFIED PRODUCT PRIOR TO AN AWARD BASED ON A RELAXATION OF SUCH MANDATORY REQUIREMENTS.

AS0 STATES THAT THE CONTRACTING OFFICER DID NOT OBTAIN A WAIVER OF THE QPL REQUIREMENTS FROM THE PREPARING ACTIVITY PRIOR TO THE EXECUTION OF THE CONTRACT WITH ALDEN BECAUSE HE DID NOT CONSIDER A WAIVER REQUIRED; THAT IS, HE DID NOT BELIEVE HE WAS PROCURING QPL ARTICLES TO THE MILITARY SPECIFICATION. ASO POINTS OUT, IN THE ALTERNATIVE, THAT THE MILITARY SPECIFICATION WAS NOT CONSIDERED ADEQUATE FOR THE PROCUREMENT OF SURPLUS INDICATORS AND THAT UNDER SUCH CIRCUMSTANCES OUR OFFICE HAS RECOGNIZED THAT THE USE OF A MILITARY SPECIFICATION IS NOT MANDATORY. SEE 44 COMP.GEN. 27 (1964) AND AMPEX CORPORATION, 54 COMP.GEN. 488 (1974).

WE HAVE RECOGNIZED THAT ASPR SEC. 1-1202(A) (1974 ED.) MANDATES THE UTILIZATION OF A MILITARY SPECIFICATION, WHERE AVAILABLE, AS IS THE CASE HERE. 43 COMP.GEN. 680 (1964); 44 ID., SUPRA; 50 ID. 691 (1971); 53 ID. 295 (1973). ASPR SEC. 1-1202(B) (1974 ED.) LISTS CERTAIN EXCEPTIONS TO THIS REQUIREMENT, NONE OF WHICH APPEARS TO BE APPLICABLE HERE.

ALSO, WE HAVE RECOGNIZED THAT DETERMINATIONS AS TO WHETHER AN EXISTING FEDERAL SPECIFICATION OR MILITARY SPECIFICATION WILL MEET THE ACTUAL NEEDS OF THE AGENCY IN A PARTICULAR SITUATION AND THE DRAFTING OF APPROPRIATE CONTRACT SPECIFICATIONS TO REFLECT THOSE NEEDS ARE PRIMARILY THE RESPONSIBILITY OF THE AGENCY CONCERNED, WHICH OUR OFFICE WILL NOT QUESTION UNLESS SUCH DETERMINATIONS CAN BE SHOWN TO HAVE NO REASONABLE BASIS. COMP.GEN., SUPRA; AMPEX CORPORATION, SUPRA. HOWEVER, 44 COMP.GEN., SUPRA, AND AMPEX CORPORATION, SUPRA, DO NOT STAND FOR THE PROPOSITION, AS IS SUGGESTED BY ASO, THAT MILITARY SPECIFICATIONS ARE NOT MANDATORY, NOR DO THESE DECISIONS IN ANY WAY IMPLY THAT THE PROCURING AGENCY IS EXCUSED FROM OBTAINING A QPL WAIVER WHERE THE MILITARY SPECIFICATION WILL, IN FACT, SATISFY THE GOVERNMENT'S REQUIREMENTS. 43 COMP.GEN. 680; B-152861(2), APRIL 10, 1964; B-159550, NOVEMBER 25, 1966; 53 COMP.GEN. 295. IN THIS REGARD, IN B-153404(2), JULY 23, 1964, THE FORWARDING LETTER TO THE SECRETARY OF THE NAVY ACCOMPANYING 44 COMP.GEN., SUPRA, WE CRITICIZED THE NAVY FOR ITS FAILURE IN THAT CASE TO MAKE A PROPER REVIEW FOR DEVIATING FROM THE FEDERAL SPECIFICATION IN THE IFB, AND NOTED THAT SUCH DEVIATIONS SHOULD BE AUTHORIZED ONLY ON A CONVINCING SHOWING OF COMPELLING NEEDS.

IT SHOULD ALSO BE NOTED THAT IN BOTH 44 COMP.GEN., SUPRA, AND AMPEX CORPORATION, SUPRA, IT WAS FOUND THAT THE MILITARY SPECIFICATIONS WERE NOT ADEQUATE TO MEET THE GOVERNMENT'S REQUIREMENTS, WHEREAS HERE (B 182091) THERE IS NO QUESTION BUT THE QPL ITEMS ON WHICH THE IFB WAS BASED SATISFIED ASO'S ACTUAL NEEDS. AS WE HAVE PREVIOUSLY INDICATED, WE ARE NOT PERSUADED BY ASO'S CONTENTION THAT NO SURPLUS DEALER CAN ADEQUATELY DEMONSTRATE THAT IT CAN MEET QPL REQUIREMENTS. INDEED, IT WOULD APPEAR, ON THE BASIS OF THE RECORD BEFORE US, THAT ALDEN HAS DEMONSTRATED THAT IT IS OFFERING A QPL PRODUCT AND THAT IT CAN MEET ALL QPL EXCEPTANCE TEST REQUIREMENTS. CONSEQUENTLY, WE DO NOT BELIEVE THAT ASO HAS SHOWN THAT THE MILITARY SPECIFICATION IS NOT ADEQUATE FOR THE PROCUREMENT OF THIS SURPLUS MATERIAL, ESPECIALLY IN VIEW OF THE FACT THAT IT APPEARS THAT NO ADDITIONAL CONTRACT REQUIREMENTS HAVE BEEN IMPOSED ON ALDEN THAT WERE NOT SET FORTH IN THE IFB OR THE MILITARY SPECIFICATION.

PROPER PROCUREMENT PROCEDURES REQUIRED ASO TO OBTAIN AN APPROPRIATE QPL WAIVER FROM THE COGNIZANT AIR FORCE ACTIVITY PRIOR TO AWARD OF THE ALDEN CONTRACT. HOWEVER, WE DO NOT BELIEVE THIS FAILURE UNDER THE CIRCUMSTANCES OF THIS CASE WAS PREJUDICIAL TO THE OTHER OFFERORS. IN B 158096, MARCH 8, 1966, WE STATED:

THE ESTABLISHMENT OF A QUALIFIED PRODUCTS LIST IS SOLELY FOR THE GOVERNMENT'S BENEFIT, AND THE GOVERNMENT MAY ELECT UNDER ASPR 1-1109 NOT TO USE IT. THERE ARE NO ASSURANCES MADE TO QUALIFIED FIRMS THAT THE GOVERNMENT WILL PURCHASE QPL ITEMS ONLY FROM SUCH FIRMS. HENCE, WHEN THE GOVERNMENT ELECTS NOT TO USE A QPL AS THE BASIS FOR PROCUREMENT, A QUALIFIED SOURCE CANNOT HAVE AN AWARD SET ASIDE AS BEING INVALID NOTWITHSTANDING THE LACK OF PRECISE COMPLIANCE WITH ADMINISTRATIVE PROCEDURES.

SIMILARLY, WE BELIEVE AN OVERLY STRICT APPLICATION OF THE ASPR SEC. 1- 1108 (1974 ED.) PROCEDURES WOULD BE UNWARRANTED UNDER THE CIRCUMSTANCES OF THE PRESENT CASE. SEE B-162449, SUPRA; B-164780, SUPRA; B-167554, DECEMBER 9, 1969. COMPARE 53 COMP.GEN.295, WHERE THE NAVY FAILED TO UTILIZE A MILITARY SPECIFICATION IN A PROCUREMENT DESPITE THE FACT THAT IT WAS APPRISED OF THE EXISTENCE OF THIS SPECIFICATION, WHICH MET ITS ACTUAL NEEDS, OVER 6 MONTHS PRIOR TO AWARD, WHICH WAS PREJUDICIAL TO AN OFFEROR, WHO, WITH THE KNOWLEDGE OF THE NAVY, WENT TO THE TIME AND EXPENSE OF QUALIFYING ITS PRODUCT TO COMPETE UNDER THE PROCUREMENT.

IN THE PRESENT CASE, THERE IS NO INDICATION THAT ANY BIDDER WENT TO ANY EXPENSE RELYING ON ASO'S IFB REQUIREMENT THAT ALL ACCEPTANCE TESTS WOULD BE PERFORMED. MOREOVER, AWARD PROBABLY COULD WELL HAVE BEEN MADE TO ALDEN UNDER THE IFB AND NONE OF THE TESTS WAIVED. IN ANY EVENT, PERFORMANCE AND DELIVERY OF THE INITIAL QUANTITY OF INDICATORS HAS BEEN COMPLETED.

HOWEVER, AN OPTION IS SCHEDULED TO BE EXERCISED ON THIS CONTRACT BY JULY 15, 1975. IF THE OPTION QUANTITY IS IN EXCESS OF 15, "SAMPLING PLAN B" WOULD APPEAR TO BE REQUIRED BY MIL-I-27193B (USAF), WHICH, WITH ONE EXCEPTION, ASO HAS PREVIOUSLY INDICATED THAT IT DID NOT REQUIRE OF ALDEN. (IF OPTION QUANTITY IS UNDER 15, "SAMPLING PLAN B" TESTS WOULD NOT APPEAR TO BE REQUIRED.) WE ALSO NOTE THAT ASO HAS PREVIOUSLY INDICATED THAT 5 OF THE REQUIRED "SAMPLING PLAN A" TESTS WERE NOT GOING TO BE PERFORMED BY ALDEN, ALTHOUGH ALDEN HAS INDICATED THAT IT PERFORMED ALL OF THE "SAMPLING PLAN A" TESTS AND MANY OF THE "SAMPLING PLAN B" TESTS ON THE INITIAL CONTRACT QUANTITY. CONSEQUENTLY AND IN VIEW OF OUR DETERMINATION THAT ASO IMPROPERLY FAILED TO OBTAIN A WAIVER UNDER ASPR SEC. 1-1108 (1974 ED.) WHEN IT APPARENTLY DID NOT REQUIRE ALDEN TO PERFORM ALL OF THE QPL ACCEPTANCE TESTS, WE RECOMMEND THAT CONSIDERATION BE GIVEN TO REQUIRING ALL APPLICABLE QPL ACCEPTANCE TESTS BE PERFORMED BY ALDEN ON THE OPTION QUANTITY AND ALL OTHER MILITARY SPECIFICATION REQUIREMENTS BE COMPLIED WITH, OR, IN THE ALTERNATIVE, THAT A WAIVER BE OBTAINED FROM THE COGNIZANT AIR FORCE TECHNICAL AUTHORITY, PRIOR TO EXERCISE OF THE OPTION, OF THOSE TESTS WHICH ASO FEELS ARE UNNECESSARY OR UNECONOMICAL.

WALSH-HEALEY ACT

ASTRONAUTICS HAS ALSO PROTESTED THAT ALDEN IS NOT A "REGULAR DEALER," AS IT CERTIFIED IN ITS BID, AND IS THEREFORE INELIGIBLE FOR AWARD UNDER THE WALSH-HEALEY PUBLIC CONTRACTS ACT, 41 U.S.C. 35-45 (1970), AND RELATED IMPLEMENTING REGULATIONS, ASPR SEC. 12-601 ET SEQ. (1974 ED.). THE WALSH- HEALEY ACT PROVIDES, INTER ALIA, WITH CERTAIN EXCEPTIONS NOT HERE MATERIAL, THAT EVERY CONTRACT EXCEEDING $10,000 IN AMOUNT ENTERED INTO BY ANY GOVERNMENT AGENCY FOR THE PROCUREMENT OF SUPPLIES SHALL CONTAIN A STIPULATION THAT THE CONTRACTOR IS A MANUFACTURER OF, OR REGULAR DEALER IN, SUCH SUPPLIES. OUR OFFICE IS NOT AUTHORIZED TO REVIEW DETERMINATIONS OF WHETHER A PARTICULAR FIRM IS A REGULAR DEALER OR MANUFACTURE WITHIN THE PURVIEW OF THE WALSH-HEALEY ACT AND THE RELATED IMPLEMENTING REGULATIONS, AND WE HAVE CONSISTENTLY DENIED JURISDICTION IN THIS AREA, SINCE SUCH DETERMINATIONS ARE EXCLUSIVELY VESTED WITH THE CONTRACTING OFFICER SUBJECT TO FINAL REVIEW BY THE DEPARTMENT OF LABOR. SEE CORBIN SALES CORPORATION, B-181454, JULY 10, 1974; TRAND ADVERTISING COMPANY, B-182212, FEBRUARY 19, 1975, F & H MANUFACTURING CORPORATION, B-183491, APRIL 29, 1975.

CONCLUSIONS

WE DO NOT RECOMMEND DISTURBING ANY OF THE THREE AWARDS INVOLVED HERE, ALTHOUGH WE HAVE RECOMMENDED AS TO B-182091 THAT ASO EITHER REQUIRE COMPLIANCE WITH THE APPLICABLE MILITARY SPECIFICATION REQUIREMENTS IF THE OPTION IN THAT CONTRACT IS EXERCISED, OR ASK FOR A WAIVER FROM THE QPL PREPARING ACTIVITY, PRIOR TO EXERCISE OF THE OPTION, OF THOSE QPL REQUIREMENTS WITH WHICH ASO HAD DETERMINED COMPLIANCE TO BE UNNECESSARY. NEVERTHELESS, WE ARE CONCERNED WITH ASO'S OVERLY RESTRICTIVE INTERPRETATIONS OF THE QPL REQUIREMENTS AND THE "NEW MATERIAL" CLAUSE AND ITS USE OF AN OUTDATED PREAWARD SURVEY TO FIND A BIDDER NONRESPONSIBLE.

WE ARE ALSO CONCERNED AS TO ASO'S GENERAL POLICY CONCERNING BIDS OFFERING SURPLUS MATERIAL. FOR THE MOST PART, ASO APPARENTLY HAS A "BLANKET" PROHIBITION AGAINST ALL SURPLUS MATERIAL (WHETHER NEW AND UNUSED SURPLUS OR "RECONDITIONED" SURPLUS) UNDER ITS PROCUREMENTS FOR "ESSENTIALLY AERONAUTICAL" ITEMS. THIS PROHIBITION IS NOT CALLED FOR NOR SANCTIONED BY REGULATION, AND ASO DOES NOT SPECIFICALLY INFORM BIDDERS IN ITS SOLICITATIONS THAT SURPLUS MATERIAL WOULD NOT BE ACCEPTABLE. THIS POLICY IS AT ODDS WITH THE STATUTORY REQUIREMENT FOR "FREE AND OPEN" COMPETITION AND IS NOT REFLECTIVE OF THE GOVERNMENT'S ACTUAL NEEDS. ASPR SEC. 1-1201 (1974 ED.) STATES IN PERTINENT PART:

(A) PLANS, DRAWINGS, SPECIFICATIONS OR PURCHASE DESCRIPTIONS FOR PROCUREMENTS SHALL STATE ONLY THE ACTUAL MINIMUM NEEDS OF THE GOVERNMENT AND DESCRIBE THE SUPPLIES AND SERVICES IN A MANNER WHICH WILL ENCOURAGE MAXIMUM COMPETITION AND E'IMINATE, INSOFAR AS POSSIBLE, ANY RESTRICTIVE FEATURES WHICH MIGHT LIMIT ACCEPTABLE OFFERS TO ONE SUPPLIER'S PRODUCT, OR THE PRODUCTS OF A RELATIVELY FEW SUPPLIERS. ITEMS TO BE PROCURED SHALL BE DESCRIBED BY REFERENCE TO THE APPLICABLE SPECIFICATIONS OR BY A DESCRIPTION CONTAINING THE NECESSARY REQUIREMENTS. * * *

THE CONTRACTING OFFICER AND HIS COGNIZANT TECHNICAL PERSONNEL, IF POSSIBLE UNDER THE CIRCUMSTANCES OF THE PARTICULAR PROCUREMENT, SHOULD DETERMINE AT THE TIME SOLICITATIONS ARE ISSUED WHETHER SURPLUS AND/OR RECONDITIONED MATERIAL WILL MEET THE GOVERNMENT'S ACTUAL NEEDS FOR A PARTICULAR PROCUREMENT. OF COURSE, THE DETERMINATION SHOULD BE BASED ON THE ACTUAL CONDITIONS UNDER WHICH THE SUPPLIES HAVE BEEN USED IN THE PAST AND HOW THEY MIGHT BE USED IN THE FUTURE. SEE PARTICLE DATA, INC., B- 179762, B-178718, MAY 15, 1974; MANUFACTURING DATA SYSTEMS INCORPORATED, SUPRA.

WE APPRECIATE ASO'S LEGITIMATE CONCERN THAT SURPLUS MATERIAL SHOULD NOT BE ACCEPTED FOR AERONAUTICAL ITEMS UNLESS THERE IS COMPLETE ASSURANCE OF THE QUALITY OF THE SURPLUS ITEMS. WE ARE, HOWEVER, CONCERNED WITH ASO'S PRACTICE OF RESTRICTING "FREE AND OPEN" COMPETITION IN CONDUCTING THESE PROCUREMENTS IN THE CASE OF BIDDERS OFFERING SURPLUS AND/OR RECONDITIONED MATERIAL. THIS DEFICIENCY IS BEING BROUGHT TO THE ATTENTION OF THE AGENCY FOR CORRECTIVE ACTION.