B-180740, DEC 11, 1974

B-180740: Dec 11, 1974

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PROTESTS ARE UNTIMELY UNDER SECTION 20.2(A) OF BID PROTEST PROCEDURES AND STANDARDS INSOFAR AS THEY CONCERN ANTENNA PROCUREMENT HISTORY PRIOR TO ISSUANCE OF PRESENT TIMELY PROTESTED REQUEST FOR PROPOSALS. SINCE PRIORITY DESIGNATOR 02 WAS ASSIGNED TO ANTENNA PROCUREMENT AND ASPR SECS. 3- 202.2(VI) AND 3-202.4 PROVIDE THAT EXCEPTION MAY BE USED WITHOUT FURTHER JUSTIFICATION IF PURCHASE REQUEST CARRIES ISSUE PRIORITY DESIGNATORS 01 THROUGH 06. 3. THERE IS NO REASON TO DISAGREE WITH NAVY DECISION NOT TO PURCHASE ANTENNA FROM GSA SCHEDULE. 4. L. NO. 93-189 REMOVED FROM SECTION 22 OF FOREIGN MILITARY SALES ACT PROHIBITION OF SALES OF UNCLASSIFIED DEFENSE ARTICLES TO FOREIGN GOVERNMENTS UNLESS ARTICLES SOLD ARE NOT GENERALLY AVAILABLE FOR PURCHASE FROM DOMESTIC COMMERCIAL SOURCES.

B-180740, DEC 11, 1974

1. PROTESTS ARE UNTIMELY UNDER SECTION 20.2(A) OF BID PROTEST PROCEDURES AND STANDARDS INSOFAR AS THEY CONCERN ANTENNA PROCUREMENT HISTORY PRIOR TO ISSUANCE OF PRESENT TIMELY PROTESTED REQUEST FOR PROPOSALS, SINCE PRESENT PROTEST MUST BE JUDGED SOLELY ON BASIS OF FACTS AND CIRCUMSTANCES SURROUNDING PRESENT PROCUREMENT. 2. NAVY HAD PROPER BASIS FOR DECISION TO NEGOTIATE ANTENNA REQUIREMENT UNDER "PUBLIC EXIGENCY" EXCEPTION TO FORMAL ADVERTISING, SINCE PRIORITY DESIGNATOR 02 WAS ASSIGNED TO ANTENNA PROCUREMENT AND ASPR SECS. 3- 202.2(VI) AND 3-202.4 PROVIDE THAT EXCEPTION MAY BE USED WITHOUT FURTHER JUSTIFICATION IF PURCHASE REQUEST CARRIES ISSUE PRIORITY DESIGNATORS 01 THROUGH 06. 3. COMMERCIAL MODEL OF PREVIOUS NAVY ANTENNA SUPPLIER ON GSA SCHEDULE NEEDED TO BE SIGNIFICANTLY UPGRADED TO MEET GOVERNMENT'S MINIMUM NEEDS AND, THEREFORE, THERE IS NO REASON TO DISAGREE WITH NAVY DECISION NOT TO PURCHASE ANTENNA FROM GSA SCHEDULE. 4. EVEN THOUGH PUB. L. NO. 93-189 REMOVED FROM SECTION 22 OF FOREIGN MILITARY SALES ACT PROHIBITION OF SALES OF UNCLASSIFIED DEFENSE ARTICLES TO FOREIGN GOVERNMENTS UNLESS ARTICLES SOLD ARE NOT GENERALLY AVAILABLE FOR PURCHASE FROM DOMESTIC COMMERCIAL SOURCES, SIMILAR LIMITATION IN DOD'S REGULATIONS CONTINUES TO HAVE FULL FORCE AND EFFECT OF LAW, INASMUCH AS DOD, AS DELEGATEE OF PRESIDENT, STILL HAS POWER TO DETERMINE WHEN IT IS IN NATIONAL INTEREST TO SELL TO FOREIGN GOVERNMENT AND SINCE REGULATIONS, WHICH ARE NOT INCONSISTENT WITH PUB. L. NO. 93 189, HAVE CONTINUED IN FORCE. 5. UNDER DOD GUIDELINES REGARDING PROHIBITION OF SALES OF UNCLASSIFIED DEFENSE ARTICLES TO FOREIGN GOVERNMENTS UNLESS ARTICLES SOLD ARE NOT GENERALLY AVAILABLE FOR PURCHASE FROM DOMESTIC COMMERCIAL SOURCES, REFUSAL OF FOREIGN GOVERNMENT TO DEAL WITH DOMESTIC SOURCES. NECESSITY OF ASSURING SALE OF AMERICAN-MANUFACTURED ARTICLES AND COMPLIANCE WITH GOVERNMENT-TO-GOVERNMENT AGREEMENTS, FOUND BY DOD TO BE COMPELLED BY NATIONAL INTEREST, MAY CONSTITUTE OVERRIDING REASONS WHICH DICTATE SALE BY DOD, NOTWITHSTANDING THAT ARTICLE MAY BE "COMMERCIALLY AVAILABLE" IN ORDINARY SENSE. 6. NAVY PROCURING ACTIVITY WAS NOT IN VIOLATION OF ASPR SEC. 3-408 AND ACTED REASONABLY IN AWARDING LETTER CONTRACT WITH NO DEFINITIZED PRICE TO SOLE OFFEROR UNDER RFP, SINCE IT RECEIVED WRITTEN ADVANCE APPROVAL PRIOR TO AWARD IN ACCORDANCE WITH NAVY PROCUREMENT DIRECTIVES, WHICH INCLUDED PERMISSION TO EXTEND DEFINITIZATION DATE FROM 180 TO 191 DAYS AND TO INCREASE MAXIMUM GOVERNMENT LIABILITY UNDER CONTRACT FROM 50 TO 60 PERCENT OF CONTRACT'S CEILING PRICE.

HY-GAIN ELECTRONICS CORPORATION ANTENNA PRODUCTS COMPANY:

THE NAVAL ELECTRONICS SYSTEMS COMMAND ISSUED REQUEST FOR PROPOSALS (RFP) N00039-74-R-0005(S) ON APPROXIMATELY JANUARY 18, 1974, FOR 41 HIGH FREQUENCY ROTATABLE LOG PERIODIC ANTENNAS (RLPA) AND ASSOCIATED ANCILLARY EQUIPMENT AND DATA. THE RLPA'S WERE BEING PROCURED PRIMARILY FOR THE NAVY ANTI-SUBMARINE WARFARE (ASW) PROGRAM. HOWEVER, 11 RLPA'S WERE BEING PROCURED FOR SALE TO SAUDI ARABIA (8) AND BRAZIL (3) UNDER SEC. 22 OF THE FOREIGN MILITARY SALES ACT OF 1968 (FMSA), 22 U.S.C. SEC. 2762 (1970), AS AMENDED, 87 STAT. 730 (1973).

THE NAVY RLPA REQUIREMENTS WERE SOLICITED PREVIOUSLY UNDER INVITATION FOR BIDS (IFB) N00039-73-B-0240, WHICH WAS ISSUED ON NOVEMBER 8, 1972. THE NAVY STATED THAT THE IFB CONTEMPLATED A WIRE-STRUNG ARRAY DESIGN FOR THE RLPA IN ACCORDANCE WITH MILITARY SPECIFICATION MIL-A-28772A (EC) DATED SEPTEMBER 11, 1972, AS AMENDED, AND CERTAIN DRAWINGS INCORPORATING THE BASIC DESIGN CONCEPT OBTAINED BY THE NAVY UNDER CONTRACT N00039-67-C-1405, WHICH WAS AWARDED TO GRANGER ASSOCIATES (GRANGER) ON JUNE 13, 1967, UNDER WHICH GRANGER SUPPLIED RLPA MODEL AS 2187/FRC, EXCEPT INSOFAR AS THE DRAWINGS CONFLICTED WITH MIL-A 28772AEC). THE NAVY FOUND THAT THE TWO LOW BIDS UNDER THE IFB SUBMITTED BY THE ANTENNA PRODUCTS COMPANY (APC) AND HY- GAIN ELECTRONICS CORPORATION (HY-GAIN) WERE NONRESPONSIVE, SINCE THEY WERE BASED ON SUPPLYING A TUBULAR ARRAY RLPA. HOWEVER, THE NAVY CONCEDED THAT THE "NONRESPONSIVENESS" MAY HAVE BEEN CAUSED BY AMBIGUITIES IN THE IFB. THE OTHER TWO BIDS SUBMITTED BY GRANGER AND RADIATION SYSTEMS, INC., ALTHOUGH APPARENTLY RESPONSIVE, OFFERED BID PRICES SIGNIFICANTLY HIGHER THAN APC AND HY-GAIN, WHICH THE NAVY FOUND TO BE UNREASONABLY HIGH .FURTHER, THE NAVY STATED THAT IT REEVALUATED ITS MINIMUM NEEDS IN VIEW OF THE PRICES OFFERED IN RESPONSE TO THE IFB AND DECIDED TO REDUCE THE SPECIFICATION REQUIREMENTS TO ALLOW A TUBULAR ARRAY RLPA. IN VIEW OF THE FOREGOING AND IN ACCORDANCE WITH ARMED SERVICES PROCUREMENT REGULATION (ASPR) SEC. 2-404.1 (1973 ED.), THE NAVY CANCELED THE IFB ON JUNE 29, 1973.

ON OCTOBER 24, 1973, THE NAVY MADE ITS DETERMINATIONS AND FINDINGS (D&F) FOR THE RFP. IN THE D&F, THE NAVY DETERMINED THAT THE RLPA REQUIREMENTS SHOULD BE NEGOTIATED PURSUANT TO 10 U.S.C. SEC. 2304(A)(2) (1970) BECAUSE "THE PUBLIC EXIGENCY WILL NOT PERMIT THE DELAY INCIDENT TO FORMAL ADVERTISING." ALSO, THE D&F FOUND THAT PRIORITY DESIGNATOR 02 WAS ASSIGNED TO THE PROCUREMENT IN ACCORDANCE WITH THE UNIFORM MATERIAL MOVEMENT AND ISSUE PRIORITY SYSTEM (UMMIPS).

THE NAVY STATED THE "PUBLIC EXIGENCY" SITUATION WAS CAUSED IN PART BY THE CANCELLATION OF THE PREVIOUS IFB. ALSO, DELAY COULD CAUSE DEGRADATION IN THE NAVY ASW PROGRAM. IN ADDITION, THE NAVY MADE REFERENCE TO THE PRIOR PROBLEMS IN PROCURING THE EQUIPMENT UNDER THE RIGID STRUCTURE OF AN IFB WHICH IT BELIEVES HAVE DEMONSTRATED THE NEED FOR FLEXIBILITY AND TRADEOFFS IMPLICIT IN NEGOTIATED PROCUREMENTS IN ORDER TO OBTAIN THE GOVERNMENT'S BASIC REQUIREMENTS AT REASONABLE PRICES.

THE RFP ALLOWED OFFERORS TO SELECT ONE OF THREE OPTIONS IN SUBMITTING PROPOSALS FOR RLPA'S:

"OPTION A EQUIPMENTS MEETING BOTH MIL-A-28772AEC) DATED 11 SEPTEMBER 1972, AS AMENDED AND THE MANUFACTURING DRAWINGS CONTAINED ON REEL NOS. 28151A AND 28151B SIMULTANEOUSLY, EXCEPT THAT IN THE EVENT OF CONFLICT, MIL-A-28772A SHALL GOVERN.

"OPTION B EQUIPMENTS MEETING ONLY MIL-A-28772AEC) DATED 11 SEPTEMBER 1972, AS AMENDED.

"OPTION CEQUIPMENTS MEETING MIL-A-28772AEC) DATED 11 SEPTEMBER 1972, AS AMENDED AND PORTIONS OF THE MANUFACTURING DRAWINGS ON REEL NOS 28151A AND 28151B TO THE EXTEND IDENTIFIED IN THE TECHNICAL PROPOSAL, WITH MIL-A- 28772A GOVERNING."

OPTION "A" REQUIRED A WIRE-STRUNG ARRAY; OPTION "B" ALLOWED ANY CONFIGURATION (INCLUDING TUBULAR ARRAY) SO LONG AS THE PERFORMANCE REQUIREMENTS IN MIL-A-28772AEC), AS MODIFIED, WERE MET; AND OPTION "C" ALSO ALLOWED ANY CONFIGURATION AND OFFERORS COULD SELECT SPECIFIC PARTS OF THE MANUFACTURING DRAWINGS TO ALLOW FOR POSSIBLE WAIVER OF CERTAIN FIRST ARTICLE TESTS BY THE NAVY.

IN ADDITION, THE GENERAL INSTRUCTIONS FOR THE REQUIREMENTS FOR PROPOSAL IN THE RFP STATED:

"2. ANY PROPOSED EXCEPTIONS TO OR DEVIATIONS FROM THE SPECIFICATIONS TOGETHER WITH THE REASONS AND JUSTIFICATION FOR PROPOSED EXCEPTIONS OR DEVIATIONS, INCLUDING DETAILS CONCERNING THE EFFECT THEREOF ON SPECIFIED REQUIREMENTS AND COST, SHALL BE EXPLICITLY STATED IN ALTERNATE PROPOSALS ONLY. THE PROCURING ACTIVITY IS PARTICULARLY INTERESTED IN ALTERNATE PROPOSALS WHICH SUBSTANTIALLY REDUCE COSTS WHILE ONLY HAVING MINIMAL IMPACT ON REQUIREMENTS."

FURTHER, THE SPECIFIC INSTRUCTIONS FOR THE REQUIREMENTS FOR PROPOSAL IN THE RFP STATED:

"7. ALTERNATE PROPOSALS ON ANY REQUIREMENT FOR WHICH THE COST SPECIFICATION TRADEOFF IS NOT CONSIDERED OPTIMAL ARE ENCOURAGED, WITH EACH ALTERNATIVE PRICED OUT."

PROPOSALS WERE TO BE EVALUATED AS FOLLOWS:

"EVALUATION CRITERIA

"(7) PROPOSALS WILL BE EVALUATED ON ENGINEERING APPROACH, QUALIFICATIONS BASED ON EXPERIENCE, AND PROPOSAL DATA IN DESCENDING ORDER:

"EVALUATION OF ENGINEERING APPROACH WILL CONSIDER, IN DESCENDING ORDER, COMPLIANCE WITH SPECIFICATION REQUIREMENTS, SPECIAL TECHNICAL FACTORS (SEE BELOW), SOUNDNESS OF APPROACH, AND UNDERSTANDING OF THE PROBLEM. THE SPECIAL TECHNICAL FACTORS TO BE CONSIDERED WILL BE RELIABILITY, DURABILITY, USE OF STANDARD DESIGN TECHNIQUES, SIMPLICITY OF DESIGN, ABSENCE OF HIGH FAILURE ITEMS SUCH AS ROTARY JOINTS, STEPPING RELAYS, ETC., AND UNIQUE IDEAS.

"EVALUATION OF QUALIFICATIONS BASED ON EXPERIENCE WILL INCLUDE QUALITY OF PRODUCT, ATTITUDE TOWARD MEETING REQUIREMENTS AND ATTITUDE TOWARD CORRECTING FAULTS, IN THAT DESCENDING ORDER.

"EVALUATION OF THE SUFFICIENCY OF THE DATA SUBMITTED IN RESPONSE TO 'THE REQUIREMENTS OF THE TECHNICAL PROPOSAL' ON PAGES 26 THRU 28 OF THE RFP.

"NOTE: PROPOSALS WILL BE RANKED TECHNICALLY BASED ON THE ABOVE CRITERIA. TOTAL PRICE AND VALIDITY OF PRICE WILL ALSO BE CONSIDERED AND WILL BE A FACTOR IN DETERMINING OFFER MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS INCLUDED.

"OFFERS MUST BE SUBMITTED IN A MANNER PERMITTING THE TECHNICAL PROPOSAL TO BE EASILY SEPARABLE FROM THE COST PROPOSAL IN ORDER TO EXPEDITE EVALUATION."

HY-GAIN, BY TELEFAX DATED FEBRUARY 26, 1974, AND APC BY TELEFAX DATED MARCH 7, 1974, PROTESTED TO OUR OFFICE THE NATURE AND SPECIFICATIONS OF THE RFP AS WELL AS THE PAST RLPA PROCUREMENT HISTORY. THE PROTESTERS CONTENDED ESSENTIALLY THAT THE NAVY UNFAIRLY FAVORS AND HAS ACCORDED PREFERENTIAL TREATMENT TO GRANGER AND THAT THE RFP IS GEARED FOR GRANGER'S WIRE-STRUNG ARRAY RLPA. THE PROTESTERS FURTHER ALLEGED THAT GRANGER'S RLPA IS UNRELIABLE AS EVIDENCED BY ITS REPEATED FAILURES IN THE FIELD. THE PROTESTERS ALSO COMPLAINED THAT CERTAIN REQUIREMENTS IN THE RFP AND MIL-A-28772A (EC) WERE OVERLY RESTRICTIVE, UNREASONABLE AND IMPRACTICAL AND WERE PROMULGATED IN ORDER TO INSURE THAT GRANGER WOULD RECEIVE THE AWARD.

FINALLY, THE PROTEST WAS MADE THAT, IN VIEW OF THE PAST PROCUREMENT HISTORY, THE DECISION TO NEGOTIATE RATHER THAN FORMALLY ADVERTISE MUST HAVE BEEN MADE TO ALLOW GRANGER TO BE THE SUCCESSFUL OFFEROR. THE PROTESTERS STATED THAT THE DECISION TO NEGOTIATE SINCE "THE PUBLIC EXIGENCY WILL NOT PERMIT THE DELAY INCIDENT TO FORMAL ADVERTISING" IS ARBITRARY AND ERRONEOUS IN VIEW OF THE LENGTH OF TIME TAKEN BY THE NAVY TO PROCURE THE REQUIREMENT AND THE PAST PROCUREMENT HISTORY.

IN RESPONSE TO THE PROTESTS, THE NAVY STATED THAT, AFTER DISCUSSIONS WITH POTENTIAL OFFERORS AND EXTENSIVE STUDY AND EVALUATION, IT RESTRUCTURED THE RFP BY ISSUING AMENDMENT NO. 0003 ON APRIL 23, 1974. AMENDMENT NO. 0003 DELETED OPTION "A" SINCE THE NAVY REGARDED IT TO BE REDUNDANT AND INCLUDED IN OPTION "C". OPTION "C" WAS RESTATED AS FOLLOWS:

"(B) *** EQUIPMENT MEETING MIL-A-28772AEC) DATED 11 SEPTEMBER 1972, AS AMENDED, AND UTILIZING CERTAIN PORTIONS OF THE GOVERNMENT FURNISHED DRAWINGS. THE DRAWINGS TO BE USED WILL BE IDENTIFIED IN SECTION F OF THE CONTRACT AT THE TIME OF AWARD. WHERE THERE IS A CONFLICT BETWEEN THE DRAWINGS AND THE SPECIFICATION, THE SPECIFICATION SHALL GOVERN."

IN ADDITION, THE METHOD OF EVALUATING PROPOSALS WAS SIGNIFICANTLY CHANGED TO READ AS FOLLOWS:

"TECHNICAL PROPOSALS WILL BE EVALUATED BASED ON COMPLIANCE WITH THE EQUIPMENT SPECIFICATIONS AND COMPLIANCE WITH SECTION C 'REQUIREMENTS FOR PROPOSALS'. AWARD WILL BE MADE TO THE OFFEROR WHO (1) HAS AN ACCEPTABLE TECHNICAL PROPOSAL; (2) SUBMITS THE LOWEST EVALUATED TOTAL PRICE AFTER ALL EVALUATION FACTORS HAVE BEEN APPLIED; (3) IS FOUND TO BE RESPONSIBLE."

THE EFFECT OF THE CHANGE IN EVALUATION CRITERIA WAS TO MAKE COST THE DETERMINATIVE FACTOR IN MAKING THE AWARD SO LONG AS AN ACCEPTABLE TECHNICAL PROPOSAL WAS SUBMITTED. THE AMENDMENT ALSO REDUCED THE NUMBER OF RPLA'S BEING PROCURED FROM 41 TO 23, CHANGED THE QUANTITIES OF CERTAIN OF THE ANCILLARY ITEMS, ADDED CERTAIN OPTIONS AND CHANGED THE DELIVERY SCHEDULES.

AN OFFERORS' CONFERENCE WAS ALSO HELD ON APRIL 23, 1974, TO EXPLAIN THE AMENDMENT AND TO ANSWER ALL QUESTIONS REGARDING THE RFP. THIS CONFERENCE WAS ATTENDED BT HY-GAIN, APC AND GRANGER. ON APRIL 29, 1974, THE NAVY EXTENDED THE CLOSING DATE FOR RECEIPT OF PROPOSALS TO MAY 28, 1974.

HOWEVER, THESE AMENDMENTS AND THE OFFERORS' CONFERENCE DID NOT SATISFY THE PROTESTERS, WHO ELECTED TO CONTINUE THEIR PROTESTS. CERTAIN OTHER BASES OF PROTEST WERE SUBSEQUENTLY FILED BY THE PROTESTERS. ALL BASES OF PROTEST WILL BE DISCUSSED IN DETAIL BELOW.

ONLY GRANGER SUBMITTED A PROPOSAL UNDER THE RFP. GRANGER SUBMITTED A PRIMARY PROPOSAL IN THE AMOUNT OF $1,493,689 AND AN ALTERNATE PROPOSAL IN THE AMOUNT OF $753,950 PLUS SPECIFIED ADDITIVES. IN ADDITION, IN THE PRIMARY PROPOSAL, GRANGER OFFERED TO LOWER THE PRICE TO $1,197,058 IF ALL FIRST ARTICLE TEST REQUIREMENTS WERE ELIMINATED. THE PRIMARY PROPOSAL WAS FOUND TO BE ACCEPTABLE, BUT THE DIFFERENCE IN APPROACH BETWEEN THE PRIMARY AND ALTERNATE PROPOSALS WAS NOT CONSIDERED TO JUSTIFY THE PRICE IN THE PRIMARY PROPOSAL AND IT WAS FOUND TO BE TOO HIGH COMPARED TO THE ALTERNATE PROPOSAL PRICE. IN THE PRIMARY PROPOSAL, GRANGER OFFERED TO MEET ALL THE RFP SPECIFICATIONS. IN THE ALTERNATE PROPOSAL, IT OFFERED ITS COMMERCIAL MODEL 1730-3K WITH CERTAIN IMPROVEMENTS IN ORDER TO MEET THE ESSENTIAL REQUIREMENTS OF MIL A-28772AEC) AND THE STATEMENT OF WORK (SOW). IT IS OUR UNDERSTANDING THAT MODEL 1730-3K IS BASICALLY A COMMERICAL VERSION OF THE PREVIOUSLY PROCURED AS-2187/FRC.

CONSEQUENTLY, TECHNICAL AND PRICE DISCUSSIONS WERE HELD WITH GRANGER ON THE BASIS OF THE ALTERNATE PROPOSAL SINCE IT WAS DETERMINED THAT THE DIFFERENCES BETWEEN THE ALTERNATE PROPOSAL AND THE PRIMARY PROPOSAL WERE NOT OF SUCH SUBSTANCE AS TO PRECLUDE NEGOTIATIONS WITH GRANGER ALONE. DURING DISCUSSIONS, THE NAVY REQUIRED CERTAIN OTHER IMPROVEMENTS TO GRANGER'S OFFERED UPGRADED 1730-3K RLPA. MOREOVER, CERTAIN SPECIFICATIONS WERE WAIVED SINCE THEY WERE NOT CONSIDERED COST EFFECTIVE OR CRITICAL TO THE PERFORMANCE OF THE RLPA. GRANGER AND THE NAVY CLAIM THAT THE IMPROVEMENTS IN THE 1730-3K MODEL MAKE IT FUNCTIONALLY EQUIVALENT TO THE AS-2187/FRC, AS UPGRADED BY MIL-A 28772AEC) AND THE SOW.

IN ADDITION, MOST OF THE FIRST ARTICLE TESTS WERE WAIVED IN VIEW OF THE ALMOST $300,000 COST SAVINGS, SINCE THE NAVY ASSURED ITSELF OF THE OFFERED MODIFIED 1730-3K'S FUNCTIONAL EQUIVALENCY TO THE PREVIOUSLY PROCURED AS- 2187/FRC INSOFAR AS THE REFERENCED RFP DRAWINGS WERE TO BE FOLLOWED. HOWEVER, FIRST ARTICLE TESTS ARE TO BE MADE ON CERTAIN PARTS WHICH WERE NOT ON THE MANUFACTURING DRAWINGS AND WHICH WERE REQUIRED BY THE UPGRADING OF THE NAVY RLPA REQUIREMENTS FROM THE PREVIOUS PROCUREMENT. THESE TESTS WILL BE CONDUCTED ON AN EXISTING NAVY AS 2187/FRC.

ALSO, DUE TO FUNDING PROBLEMS, THE NUMBER OF RLPA'S REQUIRED UNDER THE CONTRACT WAS DECREASED TO 19 BY REDUCTION OF FOUR UNITS, INCLUDING THE THREE DESIGNATED FOR BRAZIL. THE FINAL NEGOTIATED CEILING PRICE ON THE BASIS OF THE REVISED ALTERANTE PROPOSAL WAS $781,424 FOR 19 RLPA'S.

AWARD OF CONTRACT N00039-75-C-0014 WAS MADE TO GRANGER ON AUGUST 21, 1974. THE GRANGER CONTRACT WAS A LETTER CONTRACT WHICH DID NOT HAVE A DEFINITIZED PRICE. THE NAVY DECIDED THAT A LETTER CONTRACT WAS JUSTIFIED, SINCE THE DELAY IN WAITING FOR A DEFINITIVE CONTRACT WOULD BE UNACCEPTABLE IN VIEW OF THE PAST PROCUREMENT DELAYS AND DEGRADATION OF THE NAVY ASW PROGRAM WOULD RESULT IF PRODUCTION OF THE RLPA'S SHOULD BE FURTHER DELAYED. THE CEILING PRICE OF THE CONTRACT WAS $781,424 AND THE MAXIMUM GOVERNMENT LIABILITY PRIOR TO DEFINITIZING THE CONTRACT PRICE WAS $467,654 (60 PERCENT OF THE CEILING PRICE). IN VIEW OF THE FACT THAT ONLY GRANGER HAD SUBMITTED A PROPOSAL, NO ADEQUATE PRICE COMPETITION EXISTED AND CERTIFIED COST OF PRICING DATA WAS CONSEQUENTLY REQUIRED OF GRANGE. AUDIT OF ACTUAL COSTS INCURRED BY GRANGER WILL BE CONDUCTED BY THE NAVY PRIOR TO DEFINITIZING THE CONTRACT PRICE. THE DEFINITIZATION SCHEDULE IS AS FOLLOWS: CONTRACT AWARDED AUGUST 21, 1974

SUBMIT COST PROPOSAL DECEMBER 20, 1974

RECEIVE AUDIT FEBRUARY 3, 1975

COMMENCE NEGOTIATION FEBRUARY 10, 1975

CONTRACT EXECUTED FEBRUARY 28, 1975

THE PERIOD FOR DEFINITIZING THE CONTRACT INTO A FIRM FIXED-PRICE CONTRACT IS 191 DAYS.

ON OCTOBER 4, 1974, OPTIONS WERE EXERCISED UNDER THE CONTRACT FOR AN ADDITIONAL NINE RLPA'S INCLUDING THE THREE RLPA'S DESIGNATED FOR BRAZIL. THE LIMITATION ON GOVERNMENT LIABILITY WAS CONSEQUENTLY INCREASED TO $525,923.60 AND THE CEILING PRICE WAS INCREASED TO $1,046,288.30.

HY-GAIN'S AND APC'S PROTESTS ARE UNTIMELY UNDER SECTION 20.2(A) OF OUR BID PROTEST PROCEDURES AND STANDARDS (4 C.F.R. SEC. 20.2(A) (1974), INSOFAR AS THEY CONCERN THE RLPA PROCUREMENT HISTORY PRIOR TO THE IMMEDIATE PROCUREMENT. THE MERIT OF THE PRESENT TIMELY PROTESTS MUST BE JUDGED SOLELY ON THE BASIS OF THE FACTS AND CIRCUMSTANCES SURROUNDING THE INSTANT PROCUREMENT. THEREFORE, WE MUST DECLINE TO CONSIDER THE RLPA PROCUREMENT HISTORY FROM THE AWARD OF THE 1967 GRANGER CONTRACT THROUGH THE CANCELLATION OF THE IFB IN JUNE 1973. SEE 46 COMP. GEN. 606, 611 (1967).

HOWEVER, WE HAVE REVIEWED THE PRESENT PROCUREMENT AND HAVE CONSIDERED ALL CONTENTIONS RAISED IN THAT CONNECTION BY THE PROTESTERS. IN THAT REGARD, WE HAVE CONDUCTED AN ON-SITE INVESTIGATION OF THE NAVY CONTRACT FILES FOR THE PROCUREMENT. ALSO, A GENERAL ACCOUNTING OFFICE (GAO) ENGINEER MADE AN INDEPENDENT REVIEW OF THE TECHNICAL ENGINEERING ISSUES SURROUNDING THE PROCUREMENT. OUR REVIEW HAS REVEALED NO UNDUE FAVORITISM FOR GRANGER BY THE NAVY. FURTHERMORE, WE DO NOT FIND THAT THE NAVY PROCUREMENT ACTIONS VIOLATED FEDERAL PROCUREMENT LAW. THEREFORE, WE CONCLUDE THAT THE PROTESTS ARE WITHOUT MERIT AND THEY ARE DENIED FOR THE REASONS STATED HEREAFTER.

AS INDICATED ABOVE, THE NAVY DECISION TO NEGOTIATE RATHER THAN FORMALLY ADVERTISE THE PROCUREMENT HAS BEEN PROTESTED. HOWEVER, WHERE, AS HERE, A PURCHASE REQUEST FOR SUPPLIES CARRIES AN ISSUE PRIORITY DESIGNATOR 1 (01) THROUGH 6 (06), ASPR SECS. 3-202.2(VI) AND 3-202.3 (1973 ED.) PROVIDE THAT THE "PUBLIC EXIGENCY" EXCEPTION TO THE REQUIREMENT FOR FORMAL ADVERTISING, CONTAINED IN 10 U.S.C. 2304(A)(2) (1970), MAY BE USED WITHOUT FURTHER JUSTIFICATION. SEE B-162344, NOVEMBER 8, 1967; B-172542, JULY 2, 1971. THEREFORE, THE NAVY HAD A PROPER BASIS FOR UTILIZING THE "PUBLIC EXIGENCY" EXCEPTION.

MOREOVER, IN OUR REVIEW OF THE RECORD, WE FOUND NO INDICATION THAT THE NAVY DECISION TO NEGOTIATE WAS TO ALLOW GRANGER TO BE THE SUCCESSFUL OFFEROR. ALSO, EVEN THOUGH THE "PUBLIC EXIGENCY" SITUATION WAS CAUSED, IN PART, BY THE PAST PROCUREMENT DELAYS, WE FOUND NO INDICATION THAT THE NAVY INTENTIONALLY CAUSED THESE PAST DELAYS IN ORDER TO HAVE AN EXCUSE TO NEGOTIATE. FURTHERMORE, WHAT IS MORE IMPORTANT THAN PAST DELAYS IN FINDING WHETHER A "PUBLIC EXIGENCY" SITUATION EXISTS IS THE REALITY OF THE PRESENT NEED. IN THIS REGARD, THE NAVY HAS FOUND THAT IT URGENTLY REQUIRES THE RLPA'S IN ORDER TO PREVENT THE DEGRADATION OF THE ASW PROGRAM.

AS INDICATED ABOVE, THE PROTESTERS RAISED SEVERAL SPECIFIC OBJECTIONS TO THE SPECIFICATIONS IN MIL-A-28772AEC) AND THE SOW, WHICH HAVE BEEN REVIEWED BY A GAO ENGINEER. THE PROTESTERS CONTENDED SPECIFICALLY THAT IT IS UNREASONABLE TO REQUIRE IN PARAGRAPH 1.2 OF THE SOW THAT CERTAIN OF THE RLPA'S BE ABLE TO WITHSTAND WIND LOADS UP TO 155 MILES PER HOUR (M.P.H.). HOWEVER, IT IS NOTED THAT THE REQUIREMENT APPLIED TO ONLY FOUR OF THE TOTAL NUMBER OF ANTENNAS PROCURED. MOREOVER, THE REQUIREMENT WAS BASED UPON THE WEATHER CHARACTERISTICS OF EACH SITE WHERE THE FOUR ANTENNAS WERE TO BE INSTALLED AND PUBLISHED NAVY DESIGN CRITERIA AND STRUCTUAL ENGINEERING TABLES AND DATA. THEREFORE, THE REQUIREMENT WAS REASONABLE AND DID NOT GIVE GRANGER AN UNFAIR COMPETITIVE ADVANTAGE.

THE PROTESTERS ALSO OBJECT TO PARAGRAPH 3.17.1.1 OF MIL-A-28772AEC), WHICH STATES:

"3.17.1.1 BACKLASH. THE BACKLASH IN THE ROTATOR ASSEMBLY SHALL NOT PERMIT BOOM ROTATION EXCEEDING 20 MINUTES OF ARC, AND SHALL NOT REQUIRE ADJUSTMENT TO MAINTAIN THE TOLERANCE MORE FREQUENTLY THAN EVERY 6 MONTHS. CHAIN OR BELT DRIVES SHALL NOT BE USED."

THE SPECIFICATION EVIDENTLY HAS BEEN MISINTERPRETED TO MEAN THAT THE TIP END OF THE HORIZONTAL BOOM CANNOT DEFLECT MORE THAN 20 MINUTES OF ANGLE IN A 155-M.P.H. WIND. APPARENTLY IT IS BELIEVED THE REQUIREMENT WAS INTENDED TO MAINTAIN EXTREME ACCURACY IN THE DIRECTIONAL HEADING OF THE ANTENNA DESPITE HIGH WINDS.

HOWEVER, THE SPECIFICATION ACTUALLY REQUIRES THAT ANY MOVEMENT OF THE BOOM CAUSED BY BACKLASH IN THE ROTATOR ASSEMBLY NOT PERMIT BOOM ROTATION EXCEEDING 20 MINUTES OF ARC RELATIVE TO THE ROTATOR ASSEMBLY HOUSING. THE PURPOSE OF THIS REQUIREMENT IS TO PREVENT DAMAGE TO THE ROTATOR ASSEMBLY WHICH COULD BE CAUSED BY GUSTS OF WIND BUILDING UP MOMENTUM ON THE BOOM, WHICH, IF NOT PROPERLY CONTROLLED IN THE ROTATOR ASSEMBLY, COULD CAUSE THAT ASSEMBLY TO BE DAMAGED.

THE MEANING, AS WELL AS THE PURPOSE OF THE REQUIREMENT, IS EVIDENT IN THAT IT IS LOCATED UNDER "3.17 ROTATOR, CONTROL AND ANCILLARY EQUIPMENT" AND "3.17.1 ROTATOR ASSEMBLY" IN MIL-A-28772AEC). THE REQUIREMENT ALSO WAS CLARIFIED AS FOLLOWS AT THE OFFERORS' CONFERENCE ATTENDED BY THE PROTESTERS:

"WHAT IS MEANT BY 20 MINUTES OF BACKLASH IN PARAGRAPH 3.17.1.1 OF THE SPECIFICATION?

"ANSWER: THE 20 MINUTES OF ARC REFERS ONLY TO THE BACKLASH ALLOWED BY THE ROTATOR ASSEMBLY. THE SPECIFICATION IS NOT MEANT TO REQUIRE THAT THE TIP OF THE BOOM CANNOT MOVE MORE THAN 20 MINUTES; IT DOES MEAN, HOWEVER, THAT ANY MOVEMENT ALLOWED BY THE BACKLASH OF THE ROTATOR ASSEMBLY (RELATIVE TO THE ROTATOR ASSEMBLY HOUSING) WILL BE LESS THAN 20 MINUTES OF ARC."

APC HAS CONTENDED THAT THE BACKLASH MOMENTUM FORCE ON THE ROTATOR ASSEMBLY CAUSED BY WIND CONDITIONS ONLY APPLIES WHERE THE ANTENNA HAS A TOP-MOUNTED ROTATOR, AS DOES THE GRANGER ANTENNA, AND THAT BASE-MOUNTED ROTATORS USED IN APC ANTENNAS ARE NOT VULNERABLE TO THIS FORCE. HOWEVER, IN THE RECORD BEFORE US, WE HAVE FOUND NO REASON WHY THE FORCE ON THE ROTATOR ASSEMBLY WOULD NOT ALSO BE APPLICABLE TO A BASE-MOUNTED ROTATOR, ALTHOUGH IT APPEARS THERE WOULD BE SOME FORCE LOSS IN THE TRANSMISSION FROM THE HORIZONTAL BOOM TO A BASE-MOUNTED ROTATOR DUE TO TORSIONAL STRAIN IN THE TOWER SHAFT.

IN VIEW OF THE FOREGOING, WE BELIEVE THE REQUIREMENT SHOULD HAVE BEEN CLEAR TO POTENTIAL OFFERORS. FURTHERMORE, FROM OUR REVIEW, WE HAVE NO REASON TO BELIEVE THAT THE REQUIREMENT WAS UNREASONABLE OR THAT IT OVERLY RESTRICTED COMPETITION. IN THIS REGARD, IT SHOULD BE NOTED THAT THE RFP PERMITTED AN OFFEROR TO TAKE EXCEPTION TO THE REQUIREMENT, PROVIDED THAT IT PROPOSED A VIABLE ALTERNATE APPROACH TO PREVENT THE POSSIBILITY OF THE ROTATOR ASSEMBLY PROBLEM AND IT DEMONSTRATED THE APPROACH TO BE FEASIBLE. WE ALSO NOTE THAT GRANGER STATED NO EXCEPTION TO THE REQUIREMENT.

APC ALSO PROTESTED THE REQUIREMENT STATED IN PARAGRAPH 3.11.10 OF MIL A- 28772AEC) THAT 3/1/8-INCH COAXIAL CABLE BE USED IN THE TYPE "3" RLPA BEING PROCURED, WHICH HAS A 20-KOLOWATT (KW) AVERAGE POWER OUTPUT AND 40-KW PEAK POWER. APC STATED THAT 1-5/8-INCH COAXIAL CABLE IS AN INDUSTRY STANDARD SUITABLE FOR AN RLPA WITH THAT POWER OUTPUT.

WE HAVE REVIEWED CABLE MANUFACTURERS' PUBLISHED POWER RATING CURVES AND TABLES ON COAXIAL CABLE IN CONSIDERING THIS CONTENTION. OUR REVIEW INDICATED THAT 1-5/8-INCH COAXIAL CABLE MAY BE INSUFFICIENT FOR A TYPE "3" RLPA WHEN STANDARD ENGINEERING RESERVES FOR TEMPERATURE, PRESSURE, CABLE TRANSMISSION CHARACTERISTICS AND PEAK POWER POSSIBILITIES ARE TAKEN INTO ACCOUNT. MOREOVER, 3-1/8-INCH COAXIAL CABLE IS RECOMMENDED TO THE NAVY FOR A TYPE "3" RLPA BY THE ANDREW CORPORATION, A LEADING MANUFACTURER OF COAXIAL CABLE. IN ADDITION, THE NAVY IS STANDARDIZING ON 3-1/8-INCH COAXIAL CABLE FOR RLPA'S WITH THIS POWER OUTPUT SINCE IN THE PAST THE COAXIAL CABLE HAS BEEN A "WEAK LINK" IN THE RLPA. WHILE THE IMPACT OF THIS REQUIREMENT MAY BE GREATER ON THOSE RLPA MANUFACTURERS NOW USING 1- 5/8-INCH COAXIAL CABLE FOR POWER TRANSMISSIONS OF THIS MAGNITUDE, THE NAVY DOES NOT APPEAR TO BE UNREASONABLE IN REQUIRING 3-1/8-INCH CABLE.

THE PROTESTERS ALSO OBJECTED TO THE SOW REQUIREMENTS FOR A STRUCTURAL ANALYSIS ON EACH CLASS ANTENNA BEING PROCURED AND OTHER EXTENSIVE AND COSTLY SUBMISSIONS. THE NAVY HAS STATED IN THIS REGARD:

"IT HAS BEEN ALLEGED THAT THE RFP IMPOSES EXTENSIVE AND COSTLY SUBMISSIONS WITH PROPOSALS. HOWEVER, THOSE SUBMISSIONS SPECIFICALLY REQUIRED BY THE SOLICITATION ARE BOTH NECESSARY AND REASONABLE IN PROCURING THIS SPECIALIZED TYPE OF MILITARY HARDWARE IN ORDER TO DEMONSTRATE THAT THE OFFEROR CAN MEET THE NAVY'S MINIMUM NEEDS. THEY REFLECT AREAS OF CRITICAL IMPORTANCE IN ANTENNA DESIGN AND PERFORMANCE AND HAVE BEEN REQUIRED IN SIMILAR TYPE PROCUREMENTS FOR MANY YEARS."

THE NAVY ALSO EXPLAINED THAT A STRUCTURAL ANALYSIS IS AN ACCEPTED AND NECESSARY PROCEDURE FOR DESIGNING ANTENNAS ABLE TO WITHSTAND APPROPRIATE WIND FORCES. SUCH AN ANALYISIS WAS ESPECIALLY REQUIRED UNDER THIS RFP, SINCE THE RFP MANDATED NO PARTICULAR RLPA CONFIGURATION.

IT HAS BEEN HELD CONSISTENLTY BY OUR OFFICE THAT THE DRAFTING OF SPECIFICATIONS TO MEET THE GOVERNMENT'S MINIMUM NEEDS IS PROPERLY THE FUNCTION OF THE PROCURING AGENCY. 38 COMP. GEN. 190 (1958); B-178288, MAY 24, 1973. WE WILL NOT QUESTION AN AGENCY'S DETERMINATIONS IN THIS REGARD UNLESS THERE IS A SHOWING THAT THE DETERMINATIONS HAVE NO REASONABLE BASIS. B-169868, SEPTEMBER 17, 1970; B-174775, MARCH 29, 1972; B-176708, FEBRUARY 2, 1973; MATTER OF MANUFACTURING DATA SYSTEMS INCORPORATED, B- 180586, JULY 9, 1974. WE DO NOT FIND AN ABSENCE OF A REASONABLE BASIS FOR THE PROTESTED RFP REQUIREMENTS DISCUSSED ABOVE.

THE PROTESTERS RAISED VARIOUS CONTENTIONS REGARDING ALLEGED UNRELIABLE SERVICE AND REPEATED FAILURES IN THE FIELD BY GRANGER'S WIRE STRUNG ARRAY RLPA'S. OUR REVIEW OF THE NAVY CONTRACT FILES HAS REVEALED THAT REPORTED CATASTROPHIC FAILURE OCCURRED IN APPROXIMATELY SEVEN GRANGER AS-2187/FRC RLPA'S OUT OF THE 115 RLPA'S PURCHASED. IN ALL OF THE CASES, EXCEPT TWO, THE CATASTROPHIC FAILURE WAS FOUND TO HAVE BEEN CAUSED SOLELY BY ON-SITE PERSONNEL ERROR DURING THE ERECTION OR LOWERING OF THE RLPA. IN ONE CASE, CATASTROPHIC FAILURE, WHICH OCCURRED DURING ERECTION OR LOWERING, REPORTEDLY WAS CAUSED BY A DEFECT IN THE ANTENNA, I.E., AN OVERSIZED GUY GRIP. IN THAT CASE, GRANGER REPORTEDLY SUPPLIED NEW PARTS TO REPLACE THE DAMAGED PARTS. IN ANOTHER CASE, THE CATASTROPHIC FAILURE WAS UNOBSERVED AND IT COULD NOT BE DETERMINED WHETHER THE FAILURE TO PROPERLY MAINTAIN THE RLPA, SOME DEFECT IN THE RLPA OR SOME OTHER REASON. THERE ARE NO REPORTED FAILURES IN THE NAVY'S RECORDS OF GRANGER'S AS-2187/FRC RLPA'S CAUSED BY THEIR INABILITY TO WITHSTAND THE WIND LOAD REQUIREMENTS. SUMMARY, THE NAVY DOES NOT BELIEVE THE PROTESTERS' CONTENTIONS CONCERNING THE ALLEGED INADEQUACIES OF THE GRANGER WIRE-STRUNG ARRAY RLPA REGARDING POSSIBLE CATASTROPHIC FAILURES, AS COMPARED TO THE TUBULAR ARRAY RLPA'S ARE BORNE OUT BY ITS FIELD (TROUBLE REPORTS." FROM OUR REVIEW OF THE RECORD, WE CONCUR WITH THE NAVY.

APC ALLEGES THAT GRANGER'S RLPA'S ARE OVERLY COMPLEX AND AWKWARD TO INSTALL AND RAISE OR LOWER FOR REQUIRED PERIODIC MAINTENANCE OR REPAIR, WHICH ENHANCES THE POSSIBILITY OF CATASTROPHIC FAILURE OF THE ANTENNA DUE TO ON-SITE PERSONNEL ERROR. HOWEVER, WE HAVE BEEN UNABLE TO SUBSTANTIATE THE ALLEGATION THAT GRANGER'S WIRE-STRUNG ARRAY RLPA IS ANY MORE PRONE TO CATASTROPHIC FAILURE CAUSED BY ON-SITE PERSONNEL ERROR THAN ANY OTHER SINGLE TOWER RLPA.

FURTHERMORE, CONTRARY TO THE ALLEGATIONS OF THE PROTESTERS, THE NAVY IN PARAGRAPHS 3.9.4, 3.18.1 AND 10.4.11 OF MIL-A-28772AEC), AS MODIFIED BY PARAGRAPH 3.13(C) OF THE SOW AND PARAGRAPH 1 OF AMENDMENT NO. 0003 HAS UPGRADED ITS REQUIREMENTS OVER THE PREVIOUSLY PROCURED GRANGER RLPA TO REQUIRE REDUNDANCIES IN THE RLPA TO HELP PREVENT CATASTROPHIC FAILURE IN CASE OF ON-SITE PERSONNEL ERROR IN JUDGMENT. WE NOTE THAT THE REDUNDANCIES WERE APPLICABLE TO ALL POSSIBLE PROPOSED RLPA CONFIGURATIONS, NOT JUST TO GRANGER'S WIRE-STRUNG ARRAY CONFIGURATION. THESE IMPROVEMENTS SHOULD HELP PREVENT FUTURE RLPA CATASTROPHIC FAILURES DUE TO PERSONNEL ERROR.

THE PROTESTERS CONTENDED THAT THE NAVY SHOULD HAVE PURCHASED GRANGER'S 1730-3K RLPA ON THE GENERAL SERVICES ADMINISTRATION (GSA) SCHEDULE, SINCE THERE WOULD HAVE BEEN A SIGNIFICANT COST SAVINGS TO THE GOVERNMENT OVER THE PRICE GRANGER OFFERED UNDER THE RFP. HOWEVER, THE NAVY DETERMINED THAT THE 1730-3K RLPA NEEDED TO BE SIGNIFICANTLY UPGRADED IN ORDER TO MEET ITS MINIMUM NEEDS SO IT WOULD HAVE BEEN UNABLE TO TAKE ADVANTAGE OF GRANGER'S LISTING ON THE SCHEDULE. FROM OUR REVIEW OF THE RECORD, WE FIND NO REASON TO DISAGREE WITH THE NAVY POSITION IN THIS REGARD. IN ANY CASE, WE UNDERSTAND THAT GRANGER'S LISTING ON THE GSA SCHEDULE EXPIRED ON JUNE 30, 1974, AND THAT THE ANTENNA IS NOT LISTED ON THE CURRENT GSA SCHEDULE.

WITH REGARD TO THE PROCUREMENT OF THE ANTENNAS FOR SALE TO BRAZIL AND SAUDI ARABIA, HY-GAIN HAS PROTESTED THAT THE NAVY WAS IN VIOLATION OF SECTION 22 OF THE FMSA, 22 U.S.C. SEC. 2762 (1970), AS AMENDED, AND CHAPTER "H," COMMERCIAL AVAILABILITY OF THE MILITARY ASSISTANCE AND SALES MANUAL (MASM), PART III. BEFORE THE ACT WAS AMENDED BY THE FOREIGN ASSISTANCE ACT OF 1973, PUB. L. NO. 93-189, SECTION 22 OF THE FMSA PROVIDED IN PERTINENT PART:

"THE PRESIDENT MAY, WITHOUT REQUIREMENT FOR CHARGE TO ANY APPROPRIATION OR CONTRACT AUTHORIZATION OTHERWISE PROVIDED, ENTER INTO CONTRACTS FOR THE PROCUREMENT OF DEFENSE ARTICLES OR DEFENSE SERVICES FOR SALE FOR UNITED STATES DOLLARS TO ANY FRIENDLY COUNTRY OR INTERNATIONAL ORGANIZATION IF SUCH COUNTRY OR INTERNATIONAL ORGANIZATION PROVIDES THE UNITED STATES GOVERNMENT WITH A DEPENDABLE UNDERTAKING ***. NO SALES OF UNCLASSIFIED DEFENSE ARTICLES SHALL BE MADE TO THE GOVERNMENT OF ANY ECONOMICALLY DEVELOPED NATION UNDER THE PROVISIONS OF THIS SECTION UNLESS SUCH ARTICLES ARE NOT GENERALLY AVAILABLE FOR PURCHASE BY SUCH NATIONS FROM COMMERCIAL SOURCES IN THE UNITED STATES: PROVIDED, HOWEVER, THAT THE PRESIDENT MAY WAIVE THE PROVISIONS OF THIS SENTENCE WHEN HE DETERMINES THAT THE WAIVER OF SUCH PROVISIONS IS IN THE NATIONAL INTEREST." HOWEVER, PUBL. L. NO. 93 189 AMENDED SECTION 22 TO PROVIDE AS FOLLOWS: "SEC. 22, PROCUREMENT FOR CASH SALES. - (A) EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION, THE PRESIDENT MAY, WITHOUT REQUIREMENT FOR CHARGE TO ANY APPROPRIATION OR CONTRACT AUTHORIZATION OTHERWISE PROVIDED, ENTER INTO CONTRACTS FOR THE PROCUREMENT OF DEFENSE ARTICLES OR DEFENSE SERVICES FOR SALE FOR UNITED STATES DOLLARS TO ANY FOREIGN COUNTRY OR INTERNATIONAL ORGANIZATION IF SUCH COUNTRY OR INTERNATIONAL ORGANIZATION PROVIDES THE UNITED STATES GOVERNMENT WITH A DEPENDABLE UNDERTAKING (1) TO PAY THE FULL AMOUNT OF SUCH CONTRACT WHICH WILL ASSURE THE UNITED STATES GOVERNMENT AGAINST ANY LOSS ON THE CONTRACT AND (2) TO MAKE FUNDS AVAILABLE IN SUCH AMOUNTS AND AT SUCH TIMES AS MAY BE REQUIRED TO MEET THE PAYMENTS REQUIRED BY THE CONTRACT, AND ANY DAMAGES AND COSTS THAT MAY ACCRUE FROM THE CANCELLATION OF SUCH CONTRACT, IN ADVANCE OF THE TIME SUCH PAYMENTS, DAMAGES, OR COSTS ARE DUE.

"(B) THE PRESIDENT MAY, WHEN HE DETERMINES IT TO BE IN THE NATIONAL INTEREST, ACCEPT A DEPENDABLE UNDERTAKING OF A FOREIGN COUNTRY OR INTERNATIONAL ORGANIZATION WITH RESPECT TO ANY SUCH SALE, TO MAKE FULL PAYMENT WITHIN 120 DAYS AFTER DELIVERY OF THE DEFENSE ARTICLES OR THE RENDERING OF THE DEFENSE SERVICES. APPROPRIATIONS AVAILABLE TO THE DEPARTMENT OF DEFENSE MAY BE USED TO MEET THE PAYMENTS REQUIRED BY THE CONTRACTS FOR THE PROCUREMENT OF DEFENSE ARTICLES AND DEFENSE SERVICES AND SHALL BE REIMBURSED BY THE AMOUNTS SUBSEQUENTLY RECEIVED FROM THE COUNTRY OR INTERNATIONAL ORGANIZATION TO WHOM ARTICLES OR SERVICES ARE SOLD."

THE PROHIBITION AGAINST THE SALE OF UNCLASSIFIED DEFENSE ARTICLES UNLESS SUCH ARTICLES ARE NOT GENERALLY AVAILABLE FOR PURCHASE BY SUCH NATIONS FROM COMMERCIAL SOURCES IN THE UNITED STATES WAS REMOVED FROM SECTION 22 BY PUB. L. NO. 93-189.

THE NAVY CONTENDED THAT THE AMENDMENT MEANS THAT THERE IS NO LONGER ANY "COMMERCIAL AVAILABILITY" PROHIBITION ON SALES TO FOREIGN COUNTRIES. FOR THE REASONS STATED HEREAFTER, WE DISAGREE WITH THE NAVY POSITION, ALTHOUGH WE DO NOT FIND THAT THE NAVY VIOLATED THE LAW OR REGULATIONS PERTAINING TO FOREIGN SALES.

THE DEPARTMENT OF DEFENSE (DOD), WHICH HAS BEEN DELEGATED THE PRESIDENT'S AUTHORITY UNDER SECTION 22 OF THE FMSA (SEE EXEC. ORDER NO. 11501, SECTION 1(C), 34 FED. REG. 20169 (1969), AS AMENDED, EXEC. ORDER NO. 11685, 37 FED. REG. 20155 (1972)) HAS NOT CHANGED ITS REGULATIONS IMPLEMENTING SECTION 22 OF THE FMSA, EVEN THOUGH PUB. L. NO. 93-189 WAS ENACTED ON DECEMBER 17, 1973. THESE REGULATIONS ARE STILL INCORPORATED BY ASPR SEC 6 -705 (1974 ED.). ASPR SEC 6-705.2 (1974 ED.) STATES THAT THE DOD'S POLICIES AND PROCEDURES IMPLEMENTING THE ACT ARE CONTAINED IN MASM CHAPTER "H." MASM AND THE MEMORANDUM FROM THE SECRETARY OF DEFENSE, DATED AUGUST 7, 1970, SET CERTAIN LIMITATIONS, SUCH AS THE "COMMERCIAL AVAILABILITY " PROHIBITION, ON SALES TO FOREIGN GOVERNMENTS.

THE PRESIDENT AND HIS DELEGATEES STILL HAVE THE POWER TO DETERMINE WHEN IT IS IN THE NATIONAL INTEREST TO SELL DEFENSE ARTICLES TO FOREIGN COUNTRIES. THUS, THEY HAVE THE RIGHT TO SET LIMITATIONS, SUCH AS THE "COMMERCIAL AVAILABILITY" PROHIBITION, ON THEIR POWER. CONSEQUENTLY, SINCE ASPR SEC 6-705 (1974 ED.) AND CHAPTER "H" OF MASM HAVE CONTINUED IN FORCE IN THE FACE OF THE PASSAGE OF PUB. L. NO. 93-189 AND INASMUCH AS THE REGULATIONS ARE IN NO WAY INCONSISTENT WITH PUB. L. NO. 93-189, THE REGULATIONS HAVE THE FULL FORCE AND EFFECT OF LAW AND ARE APPLICABLE TO THE IMMEDIATE PROCUREMENT. INDEED, THE LIMITATION IS ENTIRELY CONSISTENT WITH THE INTENT OF CONGRESS IN ENACTING PUB. L. NO. 93-189. THIS IS MANIFESTED BY THE PUB. L. NO. 93-189 AMENDMENT OF SECTION 1 OF THE FMSA TO ADD THE FOLLOWING PROVISION:

"IN ORDER TO REDUCE THE FOLE OF THE UNITED STATES GOVERNMENT IN THE FURNISHING OF DEFENSE ARTICLES AND DEFENSE SERVICES TO FOREIGN COUNTRIES AND INTERNATIONAL ORGANIZATIONS, AND RETURN SUCH TRANSACTIONS TO COMMERCIAL CHANNELS, THE UNITED STATES GOVERNMENT SHALL REDUCE ITS SALES, CREDIT SALES, AND GUARANTIES OF SUCH ARTICLES AND DEFENSE SERVICES AS SOON AS, AND TO THE MAXIMUM EXTENT, PRACTICABLE."

THE SECRETARY OF DEFENSE HAS DEFINED A COMMERCIALLY AVAILABLE ITEM AS FOLLOWS:

"3. AN ITEM NORMALLY WILL BE CONSIDERED GENERALLY AVAILABLE DIRECTLY FROM COMMERCIAL SERVICES IN THE U.S. WHEN, AS A PRACTICAL MATTER, SUCH SOURCES ARE FULLY CAPABLE OF MEETING THE FOREIGN COUNTRY'S REQUIREMENTS AND THE FOLLOWING CRITERIA ARE MET.

"A. THE FOREIGN COUNTRY IS CONSIDERED CAPABLE OF MAKING A PRUDENT PURCHASE OF THE ITEM DIRECTLY FROM COMMERCIAL SOURCES IN THE U.S.

"B. PROCUREMENT DIRECTLY FROM U.S. COMMERCIAL SOURCES IMPOSES NO UNDUE FINANCIAL, ECONOMIC, OR LOGISTICAL HARDSHIP ON THE PURCHASER WHICH WOULD NOT ACCRUE IF THE SALE IS MADE BY DOD.

"C. SALE THROUGH COMMERCIAL CHANNELS CONFORMS TO THE OBJECTIVES OF THE FOREIGN MILITARY SALES ACT AND THERE ARE NO OVERRIDING REASONS WHICH DICTATE SALE BY DOD."

UNDER THESE GUIDELINES, THE REFUSAL OF A FOREIGN GOVERNMENT TO DEAL WITH DOMESTIC BUSINESSES, THE NECESSITY OF ASSURING THE SALE OF AMERICAN- MANUFACTURED ARTICLES AND COMPLIANCE WITH INTERNATIONAL AGREEMENTS MAY CONSTITUTE "OVERRIDING REASONS WHICH DICTATE SALE BY DOD." THEREFORE, EVEN IF AN ITEM IS "COMMERCIALLY AVAILABLE" IN THE ORDINARY SENSE, IT IS NOT CONSIDERED "COMMERCIALLY AVAILABLE" UNDER DOD'S GUIDELINES IF DOD DETERMINES A GOVERNMENT-TO-GOVERNMENT AGREEMENT IS COMPELLED BY THE NATIONAL INTEREST.

THE NAVY HAS EXPLAINED THE AUTHORITY FOR SELLING THE RLPA'S TO BRAZIL AND SAUDI ARABIA AS FOLLOWS:

"WITH REGARD TO THE ANTENNAS DESTINED FOR SALE TO BRAZIL, A STUDY HAD BEEN UNDERTAKEN EARLIER BY THE UNITED STATES TO UPGRADE THE COMMUNICATIONS SYSTEMS IN MEMBER COUNTRIES OF THE INTER AMERICAN TELECOMMUNICATIONS NET, WHICH INCLUDED BRAZIL. AS A RESULT OF THIS STUDY, IT WAS DETERMINED THAT THE SPECIFICATIONS REQUIREMENTS THAT HAD BEEN DRAFTED FOR THE INSTANT SOLICITATION WOULD BEST SATISFY THE BRAZILIAN REQUIREMENTS. THE AGREEMENT BY WHICH THESE ANTENNAS WOULD BE FURNISHED BRAZIL WAS APPROVED BY THE DEFENSE SECURITY ASSISTANCE AGENCY AND BY THE OFFICE OF SECRETARY OF DEFENSE.

"WITH REGARD TO THE ANTENNAS SCHEDULED TO BE SOLD TO SAUDI ARABIA, THE SPECIFICATIONS FOR SUCH EQUIPMENT WERE DEVELOPED BY THE UNITED STATES AND SAUDI ARABIA AFTER AN EXTENSIVE EXAMINATION OF THAT COUNTRY'S PARTICULAR NEEDS AND COMMUNICATIONS SYSTEM. THESE ANTENNAS ARE TO BE DELIVERED AND INSTALLED ON SITE BY THE UNITED STATES GOVERNMENT."

ALSO, THE NAVY HAS INFORMED US THAT A GOVERNMENT-TO-GOVERNMENT AGREEMENT, DD FORM 1513, EXISTS FOR THIS SALE TO SAUDI ARABIA.

INASMUCH AS THE NAVY HAS INDICATED TO OUR OFFICE THAT THERE ARE GOVERNMENT-TO-GOVERNMENT AGREEMENTS WITH BOTH BRAZIL AND SAUDI ARABIA, WE CONCLUDE THAT THIS PROCUREMENT FALLS WITHIN A VALID EXCEPTION TO THE "COMMERCIAL AVAILABILITY" PROHIBITION. SEE MATTER OF SENTINEL ELECTRONICS, INC., B-181268, NOVERMBER 13, 1974; B-174725, JUNE 16, 1972; AND B-160870, JULY 27, 1967, FOR OTHER INSTANCES WHERE OUR OFFICE HAS RECOGNIZED THAT SUCH AGREEMENTS CONSTITUTE VALID EXCEPTIONS TO THIS PROHIBITION.

APC ALSO CONTENDED THAT THE AWARD OF THE LETTER CONTRACT WAS NOT IN ACCORDANCE WITH ASPR SEC 3-408 (1974 ED.) WHICH PROVIDES IN PERTINENT PART:

"3-408 LETTER CONTRACT.

"(A) DEFINITION. A LETTER CONTRACT IS A WRITTEN PRELIMINARY CONTRACTUAL INSTRUMENT WHICH AUTHORIZED IMMEDIATE COMMENCEMENT OF MANUFACTURE OF SUPPLIES, OR PERFORMANCE OF SERVICES, INCLUDING, BUT NOT LIMITED TO, PREPRODUCTION PLANNING AND THE PROCUREMENT OF NECESSARY MATERIALS.

"(B) APPLICATION. A LETTER CONTRACT MAY BE ENTERED INTO WHEN (I) THE INTERESTS OF NATIONAL DEFENSE DEMAND THAT THE CONTRACTOR BE GIVEN A BINDING COMMITMENT SO THAT WORK CAN BE COMMENCED IMMEDIATELY, AND (II) NEGOTIATION OF A DEFINITIVE CONTRACT IN SUFFICIENT TIME TO MEET THE PROCUREMENT NEED IS NOT POSSIBLE, AS, FOR EXAMPLE, WHEN THE NATURE OF THE WORK INVOLVED PREVENTS THE PREPARATION OF DEFINITIVE REQUIREMENTS, SPECIFICATIONS, OR COST DATA.

"(C) LIMITATIONS.

"(1) A LETTER CONTRACT SHALL BE USED ONLY AFTER A WRITTEN DETERMINATION THAT NO OTHER TYPE OF CONTRACT IS SUITABLE.

"(2) A LETTER CONTRACT SHALL NOT BE ENTERED INTO WITHOUT COMPETITION WHEN COMPETION IS PRACTICABLE. WHERE A LETTER CONTRACT AWARD IS BASED ON PRICE COMPETITION, AN OVERALL PRICE CEILING SHALL BE INCLUDED IN THE LETTER CONTRACT.

"(3) A LETTER CONTRACT SHALL INCLUDE AN AGREEMENT BETWEEN THE GOVERNMENT AND THE CONTRACTOR AS TO THE DATE BY WHICH DEFINITIZATION IS EXPECTED TO BE COMPLETED AND A DEFINITIZATION SCHEDULE, AS REQUIRED BY 7-802.5. THIS DATE SHALL BE PRIOR TO:

"(I) THE EXPIRATION OF 180 DAYS FROM THE DATE OF THE LETTER CONTRACT; OR

"(II) FORTY PERCENT (40%) OF THE PRODUCTION OF THE SUPPLIES, OF THE PERFORMANCE OF THE WORK, CALLED FOR UNDER THE CONTRACT, WHICHEVER OCCURS FIRST.

"IN EXTREME CASES, AN ADDITIONAL PERIOD MAY BE AUTHORIZED.

"(4) THE MAXIMUM LIABILITY OF THE GOVERNMENT STATED IN THE LETTER CONTRACT WILL BE THE AMOUNT ESTIMATED TO BE NECESSARY TO COVER THE CONTRACTOR'S REQUIREMENTS FOR FUNDS PRIOR TO DEFINIZATION, BUT THIS AMOUNT SHALL NOT EXCEED FIFTY PERCENT (50%) OF THE TOTAL ESTIMATED COST OF THE PROCUREMENT UNLESS ADVANCE APPROVAL IS OBTAINED FROM THE OFFICIAL AUTHORIZING THE LETTER CONTRACT."

THE BASIS FOR THE CONTENTION IS THAT THE DATE BY WHICH DEFINITIZATION OF THE CONTRACT PRICE WAS EXPECTED WAS 191 DAYS (NOT 180 DAYS) FROM THE DATE OF THE AWARD OF THE LETTER CONTRACT AND THE MAXIMUM GOVERNMENT LIABILITY WAS SET AT 60 PERCENT (NOT 50 PERCENT) OF THE CONTRACT'S CEILING PRICE.

HOWEVER, THE PROCURING ACTIVITY RECEIVED WRITTEN ADVANCE APPROVAL FROM THE CONTRACT CLEARANCE APPROVAL BRANCH OF THE OFFICE OF NAVAL MATERIAL BEFORE AWARDING THE LETTER CONTRACT. THE ADVANCE APPROVAL WAS GIVEN ON AUGUST 15, 1974, IN ACCORDANCE WITH NAVY PROCUREMENT DIRECTIVE (NPD) SEC. 1-403.51(B)(2)(II)(1974 ED.), SINCE FURTHER DELAY AWAITING DEFINITIZATION OF THE CONTRACT PRICE COULD HAVE CAUSED DEGRADATION OF THE ASW PROGRAM. THE APPROVAL INCLUDED PERMISSION TO ALLOW 191 DAYS FOR DEFINITIZATION AND 60-PERCENT MAXIMUM GOVERNMENT LIABILITY UNDER THE CONTRACT. SINCE ASPR SEC. 3-408 (1974 ED.) PERMITS EXCEPTIONS TO THE DEFINITIZATION DATE AND THE PERCENTAGE OF MAXIMUM GOVERNMENT LIABILITY WHEN AUTHORIZED, THERE IS NO BASIS FOR A LEGAL OBJECTION UNDER THE REGULATIONS TO THE INCREASE IN TIME AND PERCENTAGE INCLUDED IN THE LETTER CONTRACT.

THE NAVY EXPLAINED THE DEFINITIZATION SCHEDULE AS FOLLOWS:

"*** FORMAL DEFINITIZATION IS NOT SCHEDULED TO TAKE PLACE UNTIL APPROXIMATELY 191 DAYS AFTER THE EFFECTIVE DATE OF THE LETTER CONTRACT. THIS ADDITIONAL 11 DAY PERIOD, OVER THE 180 DAY TARGET SET OUT IN ASPR, WAS AGREED TO BY MUTUAL AGREEMENT OF THE PARTIES AS REASONABLE UNDER ALL THE CIRCUMSTANCES. GRANGER ASSOCIATES ADVISED THIS COMMAND THAT IT COULD NOT SUBMIT COST OR PRICING DATA PRIOR TO 120 DAYS AFTER EXECUTION OF THE LETTER CONTRACT AND IT WOULD NOT ACCEPT THE CONTRACT WITH ANY LESS PERIOD OF TIME FOR SUBMISSION OF THE DATA. THE PROCEDURES TO BE UNDERTAKEN BY THE GOVERNMENT PRIOR TO DEFINITIZATION, SUCH AS AN AUDIT AND NEGOTIATION, ARE 'KEYED' TO THE DATE OF RECEIPT OF THE COST OR PRICING DATA FROM GRANGER ASSOCIATES. THE DEFINITIZATION SCHEDULE SET OUT IN THE LETTER CONTRACT IS CONSIDERED TO BE THE BEST POSSIBLE SCHEDULE UNDER THE CIRCUMSTANCES."

THE 11-DAY EXTENSION FOR DEFINITIZATION DOES NOT APPEAR UNREASONABLE IN THE CIRCUMSTANCES.

THE NAVY EXPLAINED ITS NEED FOR INCREASING THE GOVERNMENT'S MAXIMUM LIABILITY UNDER THE CONTRACT AS FOLLOWS:

"*** IT IS ESTIMATED THAT SIXTY PERCENT OF THE CEILING PRICE REPRESENTS MATERIAL COSTS WHICH WILL BE INCURRED PRIOR TO DEFINITIZATION. THIS SIXTY PERCENT FIGURE IS THEREFORE NOT COMMENSURATE WITH PERFORMANCE OF WORK UNDER THE CONTRACT BUT RATHER REPRESENTS 'FRONT LOADED' MATERIAL COSTS. NEITHER CAN THIS FIGURE REPRESENT THE PROBABILITY OF AN ULTIMATE OVERRUN SITUATION IN THIS CONTEMPLATED FIRM-FIXED PRICE CONTRACT. PROCUREMENT OF MATERIAL FOR PRODUCTION IN ADVANCE OF FIRST ARTICLE APPROVAL WAS AUTHORIZED IN THE LETTER CONTRACT."

IN VIEW OF THE ESCALATING MATERIAL COSTS, THE NAVY ALSO APPEARS TO HAVE ACTED REASONABLY IN ALLOWING FOR "FRONT LOADED" MATERIAL COSTS BY GRANGER.

APC OBJECTED TO GRANGER'S APPARENT FAILURE TO SUBMIT A COST PROPOSAL BY THE CLOSING DATE FOR RECEIPT OF PROPOSALS. GRANGER DID SET OUT ITS PRICES FOR THE ITEMS UNDER THE RFP; HOWEVER, SINCE THERE TURNED OUT TO BE NO COMPETITION, CERTIFIED COST OR PRICING DATA ALSO WAS REQUIRED TO BE SUBMITTED. THE NAVY WILL AUDIT THE COSTS INCURRED BY GRANGER IN BUYING ITS MATERIALS AND THE PRICE FINALLY SET WILL NOT EXCEED THE CEILING PRICE SET IN THE CONTRACT.

APC HAS NOTED THE POSSIBILITY THAT GRANGER MAY HAVE "BOUGHT IN" IN ITS PREVIOUS RLPA CONTRACT WITH THE NAVY AND BRINGS ATTENTION TO THE FACT THAT THE NAVY IS REQUIRED BY ASPR SEC. 1-311 (1974 ED.) TO INSURE THAT GRANGER DOES NOT REAP THE BENEFITS OF ITS PREVIOUS "BUY IN." HOWEVER, WE NOTE THAT THE NAVY CAN PREVENT GRANGER FROM BENEFITTING FROM A "BUY IN," IF ONE DID OCCUR, BY VIRTUE OF ITS DEFINITIZING THE CONTRACT COSTS ONLY AFTER AN AUDIT OF GRANGER'S ACTUAL COSTS UNDER THE LETTER CONTRACT. THE EXTENDED DELIVERY SCHEDULE UNDER THE AWARDED CONTRACT HAS BEEN NOTED BY THE PROTESTERS AS INDICATING THAT A "PUBLIC EXIGENCY" SITUATION DOES NOT EXIST. HOWEVER, CONSIDERING THAT GRANGER WAS THE SOLE OFFEROR AND IN VIEW OF CURRENT MATERIAL SHORTAGES AND MARKET CONDITIONS, THE EXTENDED DELIVERY SCHEDULE DOES NOT APPEAR UNREASONABLE AND DOES NOT NECESSARILY NEGATE THE "PUBLIC EXIGENCY."

WE HAVE REVIEWED THE CONTRACT AWARDED TO GRANGER AND BELIEVE THE PERFORMANCE REQUIREMENTS ARE GENERALLY IN ACCORDANCE WITH THE TERMS OF THE RFP. SEVERAL RFP SPECIFICATIONS WERE WAIVED; HOWEVER, THESE WAIVERS HAVE A RELATIVELY MINOR EFFECT ON THE RLPA, WHICH THE NAVY WAS ASKING FOR IN THE RFP, AND THESE CHANGES WERE IN ACCORDANCE WITH THE RFP'S SPECIFIC ENCOURAGEMENT OF COST EFFECTIVE ALTERNATE PROPOSALS SHOULD MEETING EVERY SPECIFICATION DETAIL PROVE EXPENSIVE.

ALSO, IN VIEW OF THE APPARENT COST SAVINGS OF ALMOST $300,000, AND SINCE THE NAVY HAS FOUND THAT THE OFFERED UPGRADED 1730-3K IS FUNCTIONALLY EQUIVALENT TO THE AS-2187/FRC, AND IS TO BE CONSTRUCTED IN ACCORDANCE WITH THE MANUFACTURING DRAWINGS, THE WAIVER OF MOST OF THE FIRST ARTICLE TESTS DOES NOT APPEAR TO BE UNREASONABLE OR AN INDICATION OF UNDUE FAVORITISM BY THE NAVY FOR GRANGER AND ITS PRODUCT. IT MAY BE THAT THE WAIVER HAS INCREASED THE RISK OF THE NAVY IN OBTAINING RLPA'S CAPABLE OF PERFORMING IN ACCORDANCE WITH THE RFP REQUIREMENTS, SINCE THE NAVY, IN FACT, IS TO RECEIVE GRANGER'S UPGRADED COMMERCIAL MODEL 1730-3K RATHER THAN THE PREVIOUSLY PROCURED MILITARY MODEL AS 2187/FRC. HOWEVER, THIS IS A MATTER WITHIN THE REASONABLE DISCRETION OF THE NAVY.

IN SUMMARY, OUR REVIEW OF THIS PROCUREMENT HAS REVEALED NO INDICATION THAT THE NAVY IMPROPERLY FAVORED GRANGER OR THAT IT UNFAIRLY TREATED THE PROTESTERS. ALSO, WE HAVE FOUND NO INDICATION OF ANY EVIDENCE WHICH WOULD TEND TO DETRACT FROM THE INTEGRITY OR COMPETENCE OF NAVY TECHNICAL AND CONTRACTING PERSONNEL. IN ADDITION, WE BELIEVE IT IS CLEAR THAT THE RFP DID NOT PRECLUDE THE SUBMISSION OF ACCEPTABLE PROPOSALS BY TUBULAR ARRAY RLPA MANUFACTURERS.

FURTHERMORE, WE BELIEVE THE NAVY HAS DEMONSTRATED ITS BONA FIDE DESIRE TO SOLICIT MORE COMPETITION UNDER THE RFP, INCLUDING RECEIVING PROPOSALS FROM TUBULAR ARRAY RLPA MANUFACTURERES, AS CAN BE SEEN FROM ITS ENCOURAGEMENT UNDER THE RFP OF COST EFFECTIVE ALTERNATE PROPOSALS NOT FULLY MEETING ALL OF THE RFP'S PERFORMANCE SPECIFICATIONS, ITS AMENDING OF THE RFP TO PROVIDE FOR AWARD TO THE ACCEPTABLE PROPOSAL WHICH OFFERS THE LOWEST PRICE, AND ITS ALLOWING OF ANY RLPA CONFIGURATION SO LONG AS THE OFFERED RLPA MET THE RFP PERFORMANCE SPECIFICATIONS. INDEED, WE BELIEVE THE DESIRE TO ALLOW THE LOWER PRICED TUBULAR ARRAY RLPA TO COMPETE FOR THE REQUIREMENT WAS ONE OF THE MAJOR REASONS FOR THE NAVY'S CANCELLATION OF THE PREVIOUS IFB AND OPENING UP OF COMPETITION UNDER THE RFP.

IN VIEW OF THE FOREGOING, THE PROTESTS OF APC AND HY-GAIN ARE DENIED.