B-180893, SEP 12, 1974

B-180893: Sep 12, 1974

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INVITATION FOR BIDS PROPERLY CANCELLED BY AGENCY WHEN IFB SPECIFICATIONS WERE BASED ON DESIGN OF UNIT WHICH AGENCY DETERMINED NO LONGER MET GOVERNMENT NEEDS AND WHICH IN FACT CAUSED UNITS BASED ON DESIGN TO BE DISCARDED BY FIELD PERSONNEL. REINSTATEMENT AND AWARD UNDER CANCELLED IFB IS NEITHER REQUIRED NOR PROPER. 2. GAO REVIEW OF RECORD INDICATES CONTRACT NEGOTIATED ON PUBLIC EXIGENCY BASIS AND AWARDED ON SOLE SOURCE BASIS WAS PROPER WHERE SUPPLY OF ITEM WAS EXHAUSTED. ONLY ONE FIRM WAS KNOWN TO MANUFACTURE ITEM MEETIG GOVERNMENT'S NEEDS. DATA SUFFICIENT FOR COMPETITIVE PROCUREMENT WAS NOT AVAILABLE. DSA700-74-R-3656 WAS ISSUED ON MARCH 5. THE SOLICITATION WAS ISSUED PURSUANT TO 10 U.S.C. 2304(A)(2).

B-180893, SEP 12, 1974

1. INVITATION FOR BIDS PROPERLY CANCELLED BY AGENCY WHEN IFB SPECIFICATIONS WERE BASED ON DESIGN OF UNIT WHICH AGENCY DETERMINED NO LONGER MET GOVERNMENT NEEDS AND WHICH IN FACT CAUSED UNITS BASED ON DESIGN TO BE DISCARDED BY FIELD PERSONNEL. SEE ASPR 2-404.1(B)(I). THEREFORE, REINSTATEMENT AND AWARD UNDER CANCELLED IFB IS NEITHER REQUIRED NOR PROPER. 2. GAO REVIEW OF RECORD INDICATES CONTRACT NEGOTIATED ON PUBLIC EXIGENCY BASIS AND AWARDED ON SOLE SOURCE BASIS WAS PROPER WHERE SUPPLY OF ITEM WAS EXHAUSTED, BACKLOG OF ORDERS EXISTED, ONLY ONE FIRM WAS KNOWN TO MANUFACTURE ITEM MEETIG GOVERNMENT'S NEEDS, AND DATA SUFFICIENT FOR COMPETITIVE PROCUREMENT WAS NOT AVAILABLE.

ENGINEERING RESEARCH, INCORPORATED:

REQUEST FOR PROPOSALS (RFP) NO. DSA700-74-R-3656 WAS ISSUED ON MARCH 5, 1974, BY THE DEFENSE CONSTRUCTION SUPPLY CENTER, DEFENSE SUPPLY AGENCY (DSA), COLUMBUS, OHIO, FOR A QUANTITY OF 22,400 HIGH PRESSURE INFLATING AIR CHUCK ASSEMBLIES. THE SOLICITATION WAS ISSUED PURSUANT TO 10 U.S.C. 2304(A)(2), AND ARMED SERVICES PROCUREMENT REGULATION (ASPR) 3-202.1, AS A SOLE-SOURCE PROCUREMENT FROM SCHRADER AUTOMOTIVE PRODUCTS, SCOVILL MANUFACTURING COMPANY (SCHRADER), BECAUSE, ACCORDING TO DSA, SPECIFICATIONS ADEQUATE FOR A COMPETITIVE PROCUREMENT WERE NOT AVAILABLE AND ONLY THE SCHRADER AIR CHUCK WAS CONSIDERED AS MEETING THE GOVERNMENT'S NEEDS. ON THE BASIS OF A REPORTED URGENT NEED FOR THE AIR CHUCKS, AWARD WAS MADE TO SCHRADER AUTOMOTIVE PRODUCTS ON APRIL 15, 1974, ALTHOUGH ENGINEERING RESEARCH, INCORPORATED, PROTESTED AGAINST ANY AWARD BY LETTER OF MARCH 14, 1974.

AS BACKGROUND, ON NOVEMBER 13, 1973, DSA ISSUED INVITATION FOR BIDS (IFB) NO. DSA700-74-B-1340 FOR 22,400 AIR CHUCKS, FOR THE SAN ANTONIO AIR MATERIEL AREA (SAAMA), AND THE PROTESTER WAS THE LOW BIDDER. THE AIR CHUCKS WERE TO BE MANUFACTURED IN ACCORDANCE WITH SAAMA DRAWING NO. 69E35397 (REVISION C). DSA REPORTS, HOWEVER, THAT WHILE IT WAS EVALUATING THE BIDS RECEIVED UNDER THIS SOLICITATION, SAAMA CONCLUDED THAT FIELD PERSONNEL HAD LOST CONFIDENCE IN THE AIR CHUCKS PRESENTLY BEING DELIVERED IN ACCORDANCE WITH THE CITED DRAWING, AND THAT THIS LOSS OF CONFIDENCE WAS DUE TO A POOR DESIGN. THUS, SAAMA BEGAN WORK ON DEVELOPING DESIGNS FOR USE IN FUTURE PROCUREMENTS. AS THE SUBJECT IFB REQUIRED THE AIR CHUCKS TO BE MANUFACTURED IN ACCORDANCE WITH THAT DRAWING, DSA CANCELLED THE PROCUREMENT ON FEBRUARY 28, 1974, AND, ON THE ADVICE OF SAAMA, DECIDED TO MAKE A ONE-TIME INTERIM PURCHASE OF AIR CHUCKS IN ACCORDANCE WITH SCHRADER AUTOMOTIVE PRODUCTS PART NO. 5784. THEREFORE, RFP NO. DSA700-74-R-3656 WAS ISSUED, AND THE ABOVE REFERENCED AWARD MADE THEREUNDER.

ENGINEERING RESEARCH CONTENDS THAT IT HAS IN THE PAST SUCCESSFULLY MANUFACTURED A LARGE NUMBER OF AIR CHUCKS, AND HAS IN FACT INITIATED A NUMBER OF ENGINEERING IMPROVEMENTS IN THE DESIGN OF THE UNIT. THUS, THE PROTESTER OBJECTS TO THE DETERMINATION BY DSA THAT SCHRADER WAS THE ONLY ACCEPTABLE SOURCE UNDER THE SOLICITATION IN QUESTION. IN THIS REGARD, THE PROTESTER CONTENDS THAT DSA FAILED TO SUPPLY ENGINEERING RESEARCH WITH SCHRADER DRAWING NO. 5784 SO THAT IT COULD EVALUATE THE DRAWING AND SUBMIT AN OFFER UNDER THIS SOLICITATION, AND THAT SUCH ACTION WAS IMPROPER. THEREFORE, THE PROTESTER ARGUES THAT DSA SHOULD CANCEL RFP-3656, AND MAKE AN AWARD TO ENGINEERING RESEARCH AS THE LOW RESPONSIBLE BIDDER UNDER IFB- 1340.

IN RESPONSE TO THE PROTESTER'S ARGUMENTS, DSA CONTENDS THAT ITS ACTIONS IN CANCELLING IFB-1340 AND ISSUING RFP-3656 AND MAKING AN AWARD THEREUNDER WERE PROPER. IN RELATION TO THE NEED TO CANCEL THE IFB AND REVISE SAAMA DRAWING NO. 69E35397, DSA STATES THAT BECAUSE OF REPORTS OF FAILURE OF A RETAINING RING THAT SECURED THE NUT ON ONE END OF THE AIR CHUCK AND DIFFICULTIES THAT HAD BEEN ENCOUNTERED IN REPLACING THE RING IN THE FIELD, PERSONNEL USING THE AIR CHUCK HAD LOST CONFIDENCE IN ITS RELIABILITY AND MANY OF THE UNITS WERE BEING DISCARDED. THEREFORE, CONTINUED USE OF THE DESIGN IN QUESTION WAS CONSIDERED IMPROPER BECAUSE IT DID NOT MEET THE GOVERNMENT'S NEEDS. CONCERNING THE PROPRIETY OF NEGOTIATING THE CONTRACT, DSA REPORTS THAT THE DISCARDING OF THE AIR CHUCKS BY FIELD PERSONNEL HAD ELIMINATED EXISTING SUPPLIES AND CREATED A LARGE BACKLOG OF ORDERS. THUS, IT WAS DETERMINED THAT THE URGENCY OF THE SITUATION WOULD NOT PERMIT THE DELAY INCIDENT TO ADVERTISING THE PROCUREMENT. THE RECORD INDICATES THAT DSA BASED ITS DECISION TO PURCHASE THE SCHRADER PART ON THE FACT THAT ITS DESIGN WAS FREE FROM THE PROBLEMS INHERENT IN THE UNACCEPTABLE SAAMA DESIGN AND IT HAD A GOOD REPUTATION AMONG USER PERSONNEL. AS NO OTHER DESIGN WAS KNOWN TO SO QUALIFY, AND SINCE SAAMA'S REVISED DESIGN WAS NOT AT THAT TIME COMPLETED, DSA DECIDED TO MAKE A PURCHASE IN ACCORDANCE WITH SCHRADER PART NO. 5784. DSA JUSTIFIES THE SOLE-SOURCE AWARD TO SCHRADER ON THE BASIS THAT, PURSUANT TO ASPR 1-1206.1(A), THE SCHRADER-MANUFACTURED PART WAS THE ONLY KNOWN AIR CHUCK TO MEET DSA'S REQUIREMENTS AND IT WAS THEREFORE ESSENTIAL TO THE GOVERNMENT'S NEEDS. IN THIS REGARD, DSA REPORTS THAT WHILE IT DOES HAVE COPIES OF SCHRADER DRAWING NO. 5784, IT IS AN ASSEMBLY DRAWING ONLY AND IS NOT ADEQUATE FOR MANUFACTURE OF THE SCHRADER AIR CHUCK. THUS, COPIES OF THE DRAWING WERE NOT FURNISHED TO PROSPECTIVE SUPPLIERS. IT SHOULD BE NOTED THAT SUBSEQUENT TO THE AWARD TO SCHRADER, THE SAAMA'S REVISED DESIGN WAS COMPLETED AND A COMPETITIVE PROCUREMENT INITIATED.

INITIALLY, WE NOTE THAT THE PROTESTER REQUESTS THAT RFP-3656 BE CANCELLED AND AN AWARD BE MADE TO IT UNDER IFB-1340. WITH REGARD TO THE LATTER POINT, IT IS OUR VIEW THAT IFB-1340 WAS PROPERLY CANCELLED BECAUSE OF THE REPORTED DEFECT IN THE DESIGN SPECIFICATIONS. SEE ASPR 2-404.1(B)(I). THE DESIGN CALLED FOR BY THE DERAWING INCLUDED IN THE SOLICITATION HAD RESULTED IN AIR CHUCKS WHICH DID NOT MEET THE GOVERNMENT'S NEEDS AND WHICH IN FACT WERE BEING DISCARDED BY FIELD PERSONNEL. THEREFORE, DSA DECIDED THAT A PURCHASE OF AIR CHUCKS BASED ON THIS SPECIFICATION WOULD BE IMPROPER. AFTER A REVIEW OF THE RECORD, WE CANNOT CONCLUDE THAT IT WAS IMPROPER FOR DSA TO CANCEL IFB-1340 ON THE BASIS THAT IT INCLUDED DEFECTIVE SPECIFICATIONS. THEREFORE, REINSTATEMENT OF THE IFB AND AWARD THEREUNDER IS NEITHER PROPER NOR REQUIRED.

WITH REGARD TO THE AWARD UNDER RFP 3656, 10 U.S.C. 2304(A)(2) AUTHORIZES THE NEGOTIATION OF A CONTRACT IF THE PUBLIC EXIGENCY WILL NOT PERMIT THE DELAY INCIDENT TO ADVERTISING. SINCE NO EVIDENCE CONTRADICTING THE URGENCY DETERMINATION HAS BEEN PRESENTED, WE MUST CONCLUDE THAT NEGOTIATION WAS AUTHORIZED. HOWEVER, EVEN THOUGH A PROCUREMENT MAY BE NEGOTIATED, CONTRACTING OFFICIALS MUST, WITHIN THE TIME ALLOWED, OBTAIN COMPETITION TO THE MAXIMUM EXTENT POSSIBLE. 10 U.S.C. 2304(G). THUS, RELIANCE ON THE "PUBLIC EXIGENCY" EXCEPTION TO FORMAL ADVERTISING DOES NOT PER SE AUTHORIZE A SOLE SOURCE AWARD; IT DOES, HOWEVER, CLOTHE THE CONTRACTING OFFICER WITH CONSIDERABLE DISCRETION TO DETERMINE THE METHOD BEST SUITED TO SATISFY THE URGENT NEEDS OF THE GOVERNMENT. 52 COMP. GEN. 57, 62 (1972). THIS OFFICE WILL NOT QUESTION THE DECISION TO MAKE A SOLE SOURCE AWARD UNLESS IT IS CLEAR FROM THE WRITTEN RECORD THAT THE CONTRACTING OFFICER ACTED IN AN UNREASONABLE MANNER. B-174968, DECEMBER 7, 1972. DSA JUSTIFIES THE DECISION TO MAKE A SOLE SOURCE AWARD ON THE GROUNDS THAT ONLY THE SCHRADER PART WAS KNOWN TO MEET THE GOVERNMENT'S NEEDS, AND THAT IT DID NOT HAVE DATA AND DRAWINGS ADEQUATE TO PERMIT OTHER SUPPLIERS TO MANUFACTURE THE SCHRADER AIR CHUCK. WHERE ONLY ONE SOURCE CAN SATISFY GOVERNMENT NEEDS, CONTRACTING OFFICIALS ARE NOT REQUIRED TO MODIFY OR COMPROMISE PROCUREMENT STANDARDS SO AS TO OBTAIN COMPETITION. 177960(1), AUGUST 17, 1973. THIS OFFICE HAS CONSISTENTLY HELD THAT WHERE ADEQUATE DATA IS NOT AVAILABLE TO AN AGENCY TO ENABLE IT TO CONDUCT A COMPETITIVE PROCUREMENT WITHIN THE NECESSARY TIME FRAME, WE WILL NOT TAKE EXCEPTION TO THE LEGALITY OF A SOLE SOURCE AWARD TO THE ONLY FIRM WHICH THE AGENCY BELIEVED CAPABLE OF PRODUCING THE ITEM. B 178536, NOVEMBER 27, 1973; B-174968, SUPRA; B-173063, SEPTEMBER 22, 1971. SINCE THERE IS NO EVIDENCE OF RECORD CONTRADICTING THE AGENCY'S POSITION IN REGARD TO THE NECESSITY FOR A SOLE SOURCE AWARD TO SCHRADER, THERE IS NO BASIS FOR OUR OFFICE TO OBJECT TO THE ACTION TAKEN.