B-180954, SEP 24, 1974, 54 COMP GEN 231

B-180954: Sep 24, 1974

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CONTRACTS - NEGOTIATION - REQUESTS FOR PROPOSALS - RESTRICTIVE OF COMPETITION ALTHOUGH PROTEST ON BASIS OF SOLE-SOURCING IS DIRECTED NOMINALLY AGAINST PRIME CONTRACTOR. IN ACTUALITY IT IS AGAINST RESTRICTIVE REQUIREMENT IN GOVERNMENT REQUEST FOR PROPOSALS AND IS THEREFORE WITHIN CLASS DESCRIBED IN SECTION 20.1(A) OF INTERIM BID PROTEST PROCEDURES AND STANDARDS AND FOR CONSIDERATION BY GENERAL ACCOUNTING OFFICE. CONTRACTS - NEGOTIATION - SOLE SOURCE BASIS - REQUESTS FOR PROPOSALS ISSUANCE CONTRACTING AGENCY ACTED REASONABLY IN RESTRICTING COMPONENT OF END ITEM IN REQUEST FOR PROPOSALS TO PREVIOUS MANUFACTURER WHERE DETAILED MANUFACTURING DRAWINGS WERE NOT AVAILABLE AND AGENCY DETERMINED THAT IT WOULD ADD UNDUE RISK TO TIMELY COMPLETION OF TOTAL PROCUREMENT TO ALLOW PROTESTER TO DESIGN PRODUCT TO EXISTING DATA.

B-180954, SEP 24, 1974, 54 COMP GEN 231

CONTRACTS - NEGOTIATION - REQUESTS FOR PROPOSALS - RESTRICTIVE OF COMPETITION ALTHOUGH PROTEST ON BASIS OF SOLE-SOURCING IS DIRECTED NOMINALLY AGAINST PRIME CONTRACTOR, IN ACTUALITY IT IS AGAINST RESTRICTIVE REQUIREMENT IN GOVERNMENT REQUEST FOR PROPOSALS AND IS THEREFORE WITHIN CLASS DESCRIBED IN SECTION 20.1(A) OF INTERIM BID PROTEST PROCEDURES AND STANDARDS AND FOR CONSIDERATION BY GENERAL ACCOUNTING OFFICE. CONTRACTS - NEGOTIATION - SOLE SOURCE BASIS - REQUESTS FOR PROPOSALS ISSUANCE CONTRACTING AGENCY ACTED REASONABLY IN RESTRICTING COMPONENT OF END ITEM IN REQUEST FOR PROPOSALS TO PREVIOUS MANUFACTURER WHERE DETAILED MANUFACTURING DRAWINGS WERE NOT AVAILABLE AND AGENCY DETERMINED THAT IT WOULD ADD UNDUE RISK TO TIMELY COMPLETION OF TOTAL PROCUREMENT TO ALLOW PROTESTER TO DESIGN PRODUCT TO EXISTING DATA.

IN THE MATTER OF CALIFORNIA MICROWAVE, INC., SEPTEMBER 24, 1974:

CALIFORNIA MICROWAVE, INC. (CMI), PROTESTED THE REFUSAL OF THE PHILCO FORD CORPORATION, WESTERN DEVELOPMENT LABORATORIES DIVISION (PHILCO), TO ISSUE IT A REQUEST FOR PROPOSALS TO QUOTE ON A SUBCONTRACT COVERING UP AND DOWN CONVERTERS FOR USE IN AN/MSC-60 SATELLITE COMMUNICATION TERMINALS.

PHILCO WAS SELECTED BY THE GOVERNMENT CONTRACTING OFFICER AS THE SOLE SOURCE CONTRACTOR FOR THE AN/MSC-60 SATELLITE COMMUNICATION TERMINALS. REQUEST FOR PROPOSALS DAB07-74-R-0271, SOLICITING AN OFFER ON A 3-YEAR, FIXED-PRICE-INCENTIVE BASIS WAS ISSUED TO PHILCO ON DECEMBER 14, 1973. SHORTLY THEREAFTER, CMI SUBMITTED AN INFORMAL PROPOSAL TO PHILCO FOR THE CONVERTERS AND REQUESTED AN OPPORTUNITY TO RESPOND TO A FORMAL REQUEST FOR PROPOSALS. IN MARCH 1974, CMI RENEWED THE REQUEST. PHILCO ADVISED CMI BY LETTER OF MARCH 28, 1974, THAT A REQUEST FOR PROPOSALS COULD NOT BE ISSUED TO IT. THE BASIS FOR THE DENIAL WAS THAT THE SPECIFICATIONS IN THE GOVERNMENT REQUEST FOR PROPOSALS REQUIRED CONVERTERS MANUFACTURED BY COMTECH LABORATORIES, INC. (COMTECH), AND PERMITTING A DESIGN PROGRAM FOR THE CONVERTERS BY CMI WOULD INTRODUCE A SIGNIFICANT RISK TO A TIGHT DELIVERY SCHEDULE FOR THE TERMINALS. CMI PROTESTED THE PHILCO REFUSAL TO OUR OFFICE.

THE CONTRACTING AGENCY WAS ADVISED OF THE PROTEST BUT UPON REVIEW, DETERMINED TO PROCEED WITH THE AWARD TO PHILCO PRIOR TO THE RESOLUTION OF THE PROTEST. AWARD WAS MADE TO PHILCO ON APRIL 19, 1974.

IN THE REPORT TO OUR OFFICE ON THE PROTEST, THE CONTRACTING AGENCY, RELYING ON B-168522, JUNE 2, 1970, AND B-170324, APRIL 19, 1971, CONTENDS THAT CMI IS PROTESTING AGAINST AN ACTION BY A GOVERNMENT PRIME CONTRACTOR AND THEREFORE HAS NO STANDING TO HAVE THE PROTEST CONSIDERED BY OUR OFFICE. SECTION 20.1(A) OF OUR INTERIM BID PROTEST PROCEDURES AND STANDARDS PROVIDES:

AN INTERESTED PARTY WISHING TO PROTEST THE PROPOSED AWARD OF A CONTRACT, OR THE AWARD OF A CONTRACT, BY OR FOR AN AGENCY OF THE FEDERAL GOVERNMENT WHOSE ACCOUNTS ARE SUBJECT TO SETTLEMENT BY THE GENERAL ACCOUNTING OFFICE MAY DO SO BY A TELEGRAM OR LETTER TO THE GENERAL COUNSEL, GENERAL ACCOUNTING OFFICE, WASHINGTON, D.C. 20548.

ALTHOUGH THE CMI PROTEST WAS DIRECTED NOMINALLY AGAINST PHILCO, IT WAS THE GOVERNMENT REQUEST FOR PROPOSALS WHICH REQUIRED COMTECH'S PRODUCT AND WHICH PHILCO FOLLOWED IN REFUSING TO RECEIVE A PROPOSAL FROM CMI. THUS, IN ACTUALITY, CMI WAS PROTESTING AGAINST THE AWARD BY THE GOVERNMENT OF A CONTRACT TO PHILCO WHICH RESTRICTED THE SOURCE OF SUPPLY OF THE CONVERTERS. THEREFORE, THE DECISIONS RELIED UPON BY THE CONTRACTING AGENCY ARE INAPPLICABLE TO THE IMMEDIATE SITUATION. THE PROTEST IS WITHIN THE CLASS DESCRIBED IN SECTION 20.1(A), SUPRA, AND IS FOR CONSIDERATION BY OUR OFFICE.

PRIOR TO THE ISSUANCE OF THE GOVERNMENT REQUEST FOR PROPOSALS, THE GOVERNMENT HAD EVALUATED AN AN/MSC-60 PROTOTYPE CONVERTER DEVELOPED BY PHILCO AND CONVERTERS PROCURED FROM COMTECH FOR THE AN/MSC-46. SIMPLICITY OF DESIGN, MAINTAINABILITY AND LIFE CYCLE COSTS WERE CONSIDERED. DECISION WAS MADE TO USE THE AN/MSC-46 CONVERTER IN THE AN/MSC-60 TERMINALS IN ORDER TO AVOID HAVING TWO DISSIMILAR TYPES OF EQUIPMENT PERFORMING THE SAME FUNCTION IN THE MILITARY SYSTEM. BASED ON THESE CONSIDERATIONS, THE COMTECH CONVERTER WAS MADE A REQUIREMENT OF THE GOVERNMENT REQUEST FOR PROPOSALS.

ONLY COMTECH POSSESSES COMPLETE DETAILED MANUFACTURING DRAWINGS OF THE CONVERTERS. THESE DRAWINGS ARE NOT DUE TO BE DELIVERED TO THE GOVERNMENT UNTIL MARCH 1975. IT IS CONTEMPLATED THAT, AFTER THE DRAWINGS ARE RECEIVED AND VALIDATED, PROCUREMENTS FOR THE CONVERTERS WILL BE ON A COMPETITIVE BASIS UTILIZING THE DRAWINGS. THERE ARE AVAILABLE SOURCE CONTROL DRAWINGS SPECIFYING THE MECHANICAL AND ELECTRICAL PERFORMANCE REQUIREMENTS, BUT THE CONTRACTING AGENCY DOES NOT CONSIDER THAT THOSE DRAWINGS ARE ADEQUATE TO ACCOMPLISH THE PROCUREMENT OF CONVERTERS WITHIN THE EXISTING TIME FRAME. THE CONTRACTING AGENCY HAS CONSIDERED THE OFFER OF CMI TO SUPPLY CONVERTERS THAT ARE ELECTRICALLY AND MECHANICALLY INTERCHANGEABLE WITH THOSE DRAWINGS. THE CONTRACTING AGENCY HAS INDICATED THAT WITHOUT THE COMPLETE MANUFACTURING DRAWING PACKAGE, CMI WOULD HAVE TO ENTER INTO A DEVELOPMENT PROGRAM WHICH THE TIME CONSTRAINTS OF THE GOVERNMENT REQUEST FOR PROPOSALS UNDER WHICH THE CONVERTERS ARE TO BE DELIVERED WOULD NOT ALLOW. THE CONTRACTING AGENCY HAS INDICATED THAT IN ORDER TO MEET THE URGENT END ITEM DELIVERY REQUIREMENT, PHILCO MUST HAVE DELIVERY OF THE CONVERTERS 8 MONTHS AFTER THE AWARD OF THE SUBCONTRACT. BASED ON THE PRIOR EXPERIENCE OF COMTECH, THE CONTRACTING AGENCY HAS ESTIMATED THAT IT WOULD TAKE 12 TO 15 MONTHS FOR CMI TO DESIGN, FABRICATE, HAVE TESTED AND BEGIN DELIVERY WHILE COMTECH WILL COMMENCE DELIVERIES WITHIN 8 MONTHS. IN VIEW OF THE TIGHT SCHEDULE FOR THE CONVERTERS, IT WAS DETERMINED THAT IT WOULD BE TOO RISKY TO PERMIT CMI TO ENTER INTO A DESIGN PROGRAM FOR THE CONVERTERS.

THE PROCURING ACTIVITY HAS THE PRIMARY RESPONSIBILITY FOR DRAFTING SPECIFICATIONS WHICH REFLECT THE MINIMUM NEEDS OF THE AGENCY. WHILE THE PROCUREMENT STATUTES REQUIRE THAT SPECIFICATIONS BE DRAWN SO AS TO PERMIT THE GREATEST AMOUNT OF COMPETITION CONSISTENT WITH THE NEEDS OF THE PROCURING ACTIVITY, NEITHER THE LETTER NOR SPIRIT OF THE PROCUREMENT STATUTES IS VIOLATED BECAUSE ONLY ONE FIRM IS ABLE TO SUPPLY ITS NEEDS, PROVIDED THE SPECIFICATIONS ARE REASONABLE AND NECESSARY TO MEET THE AGENCY'S ACTUAL NEEDS. WE HAVE ALSO HELD THAT WHERE THE LEGITIMATE NEEDS OF THE GOVERNMENT CAN BE SATISFIED FROM ONLY A SINGLE SOURCE THE LAW DOES NOT REQUIRE THAT THOSE NEEDS BE COMPROMISED IN ORDER TO OBTAIN COMPETITION. SEE B-178288, MAY 24, 1973.

BASED ON THE RECORD, THE CONTRACTING AGENCY APPEARS TO HAVE ACTED REASONABLY IN RESTRICTING THE REQUIREMENT TO COMTECH CONVERTERS. 178179, JULY 27, 1973.

ACCORDINGLY, THE PROTEST IS DENIED.