B-182819, APR 30, 1975, 54 COMP GEN 930

B-182819: Apr 30, 1975

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CONTRACTS - NEGOTIATION - COMPETITION - QUALIFICATION PROGRAM FOR NEW SOURCES AWARD UNDER NEGOTIATED PROCUREMENT WAS IMPROPER WHERE OPPORTUNITY TO QUALIFY ITEMS FOR PROCUREMENT GIVEN TO TWO FIRMS WAS NOT EXTENDED TO PRIOR SOLE SOURCE SUPPLIER OF ITEM EVEN THOUGH CONTRACTING OFFICIALS WERE ON NOTICE THAT PRIOR SUPPLIER INTENDED TO OFFER SUBSTITUTE FOR PREVIOUSLY FURNISHED COMPONENT. WILL NOT BE CONSIDERED ON MERITS. ALL OF WHICH ARE COMPONENTS OF THE LIQUID QUANTITY FUEL GAUGING SYSTEM OF THE AIR FORCE'S B-52D AIRCRAFT. AVIEN CONTENDS THAT IT SHOULD HAVE BEEN AWARDED THE CONTRACT FOR THE NON-SET-ASIDE QUANTITY. WHICH WAS AWARDED TO ANOTHER FIRM. THE PROTEST IS SUSTAINED. THE B-52D PROBES WERE PROCURED FROM AVIEN ON A SOLE-SOURCE BASIS.

B-182819, APR 30, 1975, 54 COMP GEN 930

CONTRACTS - NEGOTIATION - COMPETITION - QUALIFICATION PROGRAM FOR NEW SOURCES AWARD UNDER NEGOTIATED PROCUREMENT WAS IMPROPER WHERE OPPORTUNITY TO QUALIFY ITEMS FOR PROCUREMENT GIVEN TO TWO FIRMS WAS NOT EXTENDED TO PRIOR SOLE SOURCE SUPPLIER OF ITEM EVEN THOUGH CONTRACTING OFFICIALS WERE ON NOTICE THAT PRIOR SUPPLIER INTENDED TO OFFER SUBSTITUTE FOR PREVIOUSLY FURNISHED COMPONENT. CONTRACTS - PROTESTS - TIMELINESS - NEGOTIATED CONTRACT ALLEGATION REGARDING ACTIVITY'S DETERMINATION TO SET ASIDE LIKE QUANTITIES OF LINE ITEMS FOR EXCLUSIVE SMALL BUSINESS PARTICIPATION, HAVING FIRST BEEN MADE AFTER SUBMISSION OF PROPOSALS, WILL NOT BE CONSIDERED ON MERITS.

IN THE MATTER OF AVIEN, INC., APRIL 30, 1975:

AVIEN, INCORPORATED (AVIEN) HAS FILED A PROTEST UNDER REQUEST FOR PROPOSALS (RFP) F41608-75-80187, A 50 PERCENT SMALL BUSINESS SET-ASIDE, ISSUED BY THE SAN ANTONIO AIR LOGISTICS CENTER (SAALC), KELLY AIR FORCE BASE, TEXAS, FOR THE PURCHASE OF 16 LINE ITEMS OF LIQUID QUANTITY TRANSMITTERS (PROBES) AND ONE SIMULATOR, ALL OF WHICH ARE COMPONENTS OF THE LIQUID QUANTITY FUEL GAUGING SYSTEM OF THE AIR FORCE'S B-52D AIRCRAFT. ESSENTIALLY, AVIEN CONTENDS THAT IT SHOULD HAVE BEEN AWARDED THE CONTRACT FOR THE NON-SET-ASIDE QUANTITY, WHICH WAS AWARDED TO ANOTHER FIRM, AS WELL AS THE REMAINING ITEMS UNDER THE SET-ASIDE PORTION OF THE PROCUREMENT YET TO BE AWARDED. AS EXPLAINED BELOW, THE PROTEST IS SUSTAINED.

PRIOR TO THE ISSUANCE OF THE SUBJECT RFP, THE B-52D PROBES WERE PROCURED FROM AVIEN ON A SOLE-SOURCE BASIS. HOWEVER, AS A RESULT OF AN EXCESSIVE PRICE ESTIMATE SUBMITTED BY AVIEN FOR BUDGETARY PURPOSES IN PLANNING FOR THE SUBJECT PROCUREMENT, THE PROCURING ACTIVITY DECIDED TO SEEK ADDITIONAL SOURCES FOR THE PLANNED PROCUREMENT OF THE PROBES. GULL AIRBORNE INSTRUMENTS, INC. (GAI), AND SIMMONDS PRECISION, INC., BOTH OF WHOM PROVIDED SIMILAR TANK UNITS (PROBES) TO THE AIR FORCE FOR OTHER MODELS OF TE B-52, WERE INVITED TO FABRICATE AND TEST TO GENERAL MILITARY SPECIFICATION MIL-G-26988C AND PERFORM A FORM, FIT AND FUNCTION TEST TO BECOME QUALIFIED SOURCES FOR THE ITEMS IN QUESTION. BOTH FIRMS COMPLIED WITH THE PROCURING ACTIVITY'S REQUEST AND QUALIFIED THEIR RESPECTIVE PRODUCTS. IT SHOULD BE NOTED THAT AVIEN'S PREVIOUSLY QUALIFIED PROBE WAS CONSTRUCTED PRIMARILY OF FIBERGLASS, WHILE METAL WAS USED AS THE BASE MATERIAL FOR THE PROBES OF THE TWO NEWLY QUALIFIED SOURCES. BOTH MATERIALS WERE DETERMINED BY THE PROCURING ACTIVITY TO BE EQUALLY ACCEPTABLE. THE RECORD INDICATES THAT AVIEN NOTIFIED THE CONTRACTING OFFICER BOTH BEFORE AND AFTER ISSUANCE OF THE RFP AND PRIOR TO THE SUBMISSION OF ANY PROPOSALS THAT IT INTENDED TO SUBMIT AN ALTERNATE PROPOSAL OFFERING A PROBE CONSTRUCTED OF METAL WHICH IT CONTENDED HAD BEEN QUALIFIED AND MANUFACTURED IN THE PAST FOR THE B-52 AIRCRAFT. THE CONTRACTING OFFICER REPORTS THAT HE ASSUMED THAT AVIEN WOULD SUBMIT NECESSARY DATA WITH ANY SUCH OFFER TO SHOW THAT ITS METAL PROBES WOULD BE ACCEPTABLE.

THE RFP WAS ISSUED ON SEPTEMBER 12, 1974, PURSUANT TO 10 U.S.C. 2304(A)(10), AS IMPLEMENTED BY PARAGRAPH 3-210.2(XV) (1974 ED.) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), UPON THE CONTRACTING OFFICER'S DETERMINATION THAT ADEQUATE DATA WAS NOT AVAILABLE FOR FORMAL ADVERTISING AND THAT NEGOTIATION WAS THEREFORE REQUIRED. THE AFOREMENTIONED PROVISIONS AUTHORIZED THE USE OF NEGOTIATION IN LIEU OF FORMAL ADVERTISING WHEN "THE CONTEMPLATED PROCUREMENT IS FOR PARTS OR COMPONENTS BEING PROCURED AS REPLACEMENT PARTS IN SUPPORT OF EQUIPMENT SPECIALLY DESIGNED BY THE MANUFACTURER, WHERE DATA AVAILABLE IS NOT ADEQUATE TO ASSURE THAT THE PART OR COMPONENT WILL PERFORM THE SAME FUNCTION IN THE EQUIPMENT AS THE PART OR COMPONENT IT IS TO REPLACE." THE SOLICITATION IDENTIFIED EACH QUALIFIED ITEM BY INDICATING THE MANUFACTURER AND THE APPROPRIATE PART NUMBER AND REQUIRED THAT EACH PROSPECTIVE CONTRACTOR SUBMIT AN OFFER ON ONE OF THE THREE PART NUMBERS FOR EACH LINE ITEM SET FORTH IN THE SCHEDULE.

EACH OF THE THREE QUALIFIED FIRMS SUBMITTED OFFERS ON THEIR RESPECTIVE PART NUMBERS BY THE OCTOBER 4, 1974, CLOSING DATE FOR RECEIPT OF PROPOSALS. IN ADDITION, AVIEN, AS PREVIOUSLY INDICATED, SUBMITTED AN ALTERNATE PROPOSAL OFFERING A PROBE CONSTRUCTED OF METAL BY USING THE SAME PART NUMBER AS ITS LISTED FIBERGLASS, WITH THE EXCEPTION THAT THE LETTER "M" WAS INSERTED IN THE PART NUMBER IDENTIFYING IT AS METAL. ALL OFFERS WERE CONSIDERED WITHIN THE COMPETITIVE RANGE AND ON OCTOBER 16, 1974, THE THREE FIRMS WERE NOTIFIED THAT THE GOVERNMENT DID NOT INTEND TO CONDUCT FURTHER NEGOTIATIONS OR DISCUSSIONS CONCERNING THEIR PROPOSALS AND BEST AND FINAL OFFERS WERE REQUESTED TO BE SUBMITTED BY OCTOBER 21, 1974. AVIEN'S OFFER OF $93,749.88 ON ITS ALTERNATE PROPOSAL FOR THE LINE ITEMS OF THE NON-SET-ASIDE PORTION OF THE PROCUREMENT WAS LOW. THE NEXT LOW OFFER IN THE AMOUNT OF $124,730.00 WAS SUBMITTED BY GAI. HOWEVER, SAN ANTONIO TECHNICAL PERSONNEL REPORTED THAT AVIEN'S ALTERNATE PROPOSAL COULD NOT BE ACCEPTED SINCE THE PART NUMBERS LISTED IN THE SOLICITATION COULD NOT BE IDENTIFIED AND NO DATA WAS SUPPLIED WITH THE OFFER OR AVAILABLE TO EVALUATE THE PRODUCT TO INDICATE WHETHER IT HAD PREVIOUSLY BEEN MANUFACTURED, QUALIFIED OR OFFERED FOR SALE AS A SUBSTITUTE FOR THE PART NUMBER SPECIFIED IN THE SOLICITATION AND RECOGNIZED AS BEING CONSTRUCTED OF FIBERGLASS. IN ADDITION, IT WAS STATED THERE WAS INSUFFICIENT TIME, DUE TO THE URGENCY OF THE PROCUREMENT, FOR COMPLETE QUALIFICATION TESTING IN ACCORDANCE WITH MIL G-26988C AND TO PERFORM COMPATABILITY SYSTEM TESTS ON A B-52D AIRCRAFT. BASED ON THIS REPORT, THE PROCURING ACTIVITY DETERMINED THAT AVIEN'S ALTERNATE PROPOSAL OFFERING A PROBE FABRICATED OF METAL WOULD NOT BE CONSIDERED BECAUSE THE UNIT HAD NOT BEEN TESTED OR QUALIFIED AS A SUBSTITUTE FOR ITS PREVIOUSLY QUALIFIED FIBERGLASS PRODUCT. ACCORDINGLY, ON NOVEMBER 22, 1974, THE CONTRACT FOR THE NON-SET- ASIDE QUANTITIES OF THE LINE ITEMS LISTED IN THE SOLICITATION WAS AWARDED TO GAI.

AVIEN PROTESTS THE REJECTION OF ITS ALTERNATE PROPOSAL, ESSENTIALLY ON THE GROUND THAT ON NUMEROUS OCCASIONS DURING THE COURSE OF THE PROCUREMENT THE CONTRACTING OFFICIALS INFORMED THE FIRM THAT THE USE OF FIBERGLASS OR METAL IN THE FABRICATION OF THE ITEMS TO BE PROCURED WOULD BE EQUALLY ACCEPTABLE. MOREOVER, THE PROTESTER POINTS OUT THAT THE SOLICITATION MADE NO REFERENCE TO A REQUIREMENT FOR PREQUALIFICATION OF THE PROPOSED ITEMS OR THE SUBMISSION OF DATA TO SUBSTANTIATE COMPLIANCE WITH MIL-G-26988C. IN THIS REGARD, THE PROTESTOR CONTENDS THAT MIL-G-26988C IS NOT APPLICABLE TO THE INSTANT PROCUREMENT SINCE BOTH ITS FIBERGLASS AND METAL UNITS HAVE BEEN FULLY QUALIFIED TO MIL-G-7818, AND THE EXISTING FUEL QUANTITY GAUGE SYSTEM ON THE B-52D AIRCRAFT HAS BEEN PROCURED OR MANUFACTURED UNDER MIL-G -7818. FINALLY, THE PROTESTER ALLEGES THAT THE AWARD TO GAI WAS IMPROPER SINCE ITS UNITS WERE NEVER QUALIFIED UNDER MIL-G-7818, WHICH THE PROTESTER REASSERTS IS THE ONLY APPLICABLE SPECIFICATION FOR REPLACEMENT COMPONENTS OF THE MIL-G-7818 GAUGES ON THE B-52D AIRCRAFT.

IT IS THE AIR FORCE'S POSITION THAT SAALC DID NOT AFFORD AVIEN AN EQUAL OPPORTUNITY TO QUALIFY ITS METALLIC PROBE FOR THE B-52D AIRCRAFT EITHER BEFORE ISSUANCE OF THE SOLICITATION, DURING WHICH TIME THE OTHER OFFERORS WERE QUALIFYING THEIR PROBES, OR DURING THE COURSE OF NEGOTIATIONS. NEVERTHELESS, THE AIR FORCE STATES THAT BECAUSE THE ITEMS CALLED FOR UNDER THE NON-SET-ASIDE PORTION OF THE CONTRACT AWARDED TO GAI ARE URGENTLY NEEDED TO FULFILL PRODUCTION LINE REQUIREMENTS, TERMINATION OF THE CONTRACT WOULD NOT BE IN THE BEST INTERESTS OF THE GOVERNMENT BECAUSE IT WOULD RESULT IN A PRODUCTION LINE STOPPAGE AT THE CONTRACTOR FACILITY PERFORMING THE MODIFICATION ON THE B-52D AIRCRAFT. THE AIR FORCE PROPOSES THAT AVIEN BE GIVEN THE OPPORTUNITY TO QUALIFY ITS METAL PROBES PRIOR TO A RESOLICITATION OF THE REMAINING ITEMS UNDER THE SET-ASIDE PORTION, WITH THE EXCEPTION OF 21 LINE ITEMS WHICH WILL BE ADDED TO GAI'S EXISTING CONTRACT IN ORDER TO PREVENT FURTHER PRODUCTION LINE STOPPAGE.

AT THIS POINT IT SHOULD BE NOTED THAT IN ITS RESPONSE TO THE AIR FORCE'S REPORT, GAI CONTENDS THAT AVIEN WAS GIVEN AN EQUAL OPPORTUNITY TO QUALIFY A METALLIC PROBE ON THE BASIS THAT THE APPLICABLE SPECIFICATION DOES NOT LIMIT OR PRECLUDE THE METHOD TO BE UTILIZED BY A PROBE MANUFACTURER AND FOR THE PAST 20 YEARS AVIEN CHOSE TO SUPPLY A PROBE CONSTRUCTED OF FIBERGLASS. IT IS GAI'S VIEW THAT "THE LACK OF ACTION ON AVIEN'S PART OVER THE LAST TWENTY YEARS TO REQUALIFY MORE COST EFFECTIVE COMPONENTS (E.G. BY RESTRICTING THE USE OF FIBERGLASS) IN THE GOVERNMENT'S INTEREST CANNOT BE A VALID CAUSE IN THIS INSTANCE TO UPSET EITHER THE EXISTING CONTRACT OR THE INTENDED PROCUREMENT OF THE SET-ASIDE PORTION." FURTHERMORE, GAI ARGUES THAT THE ISSUANCE OF AMENDMENT 0002, SETTING ASIDE A LIKE QUANTITY OF SUCH LINE ITEMS FOR EXCLUSIVE SMALL BUSINESS PARTICIPATION, WAS CONTRARY TO THE ORIGINAL INTENT OF THE AIR FORCE, AND ALSO QUESTIONS AVIEN'S FINANCIAL RESPONSIBILITY AND CAPABILITY, TO UNDERTAKE AND PROPERLY SUPPORT THE PROGRAM REQUIRED BY THE AIR FORCE.

IN THE PRESENT CASE, AVIEN WAS NOT GIVEN ADEQUATE NOTICE EITHER PRIOR TO ISSUANCE OF THE SOLICITATION OR PRIOR TO THE CLOSING DATE FOR RECEIPT OF PROPOSALS OF THE NEED TO QUALIFY ITS METALLIC PROBE IN ORDER TO MAKE ITS LOW ALTERNATE PROPOSAL ACCEPTABLE. THE RECORD CLEARLY INDICATES THAT THE CONTRACTING OFFICER WAS ON NOTICE THAT AVIEN INTENDED TO SUBMIT AN ALTERNATE PROPOSAL OFFERING A PROBE CONSTRUCTED OF METAL, AND WHILE HE ASSUMED THAT THE PROTESTER WOULD SUBMIT NECESSARY DATA WITH SUCH OFFER TO INDICATE THAT THE PROPOSED ITEMS WOULD BE ACCEPTABLE TO THE GOVERNMENT, THE RFP DID NOT REQUIRE SUCH DATA AND THE INVITATION WHICH WAS EXTENDED TO GAI AND SIMMONDS TO FABRICATE AND TEST TO MIL-G-26988C TO BECOME QUALIFIED SOURCES WAS NOT EXTENDED TO AVIEN. THE FAILURE OF THE CONTRACTING OFFICIALS TO INDICATE TO AVIEN THE NECESSITY FOR PREQUALIFICATION TESTING AND/OR SUBMISSION OF PERTINENT TECHNICAL DATA QUALIFYING ITS METAL PROBE FOR USE IN THE PROCUREMENT, DENIED AVIEN THE OPPORTUNITY AFFORDED THE OTHER OFFERORS TO QUALIFY ITS METALLIC PROBE. FURTHERMORE, THE AIR FORCE ACKNOWLEDGES IN ITS REPORT THAT ITS "REQUIRED SOURCE APPROVAL" CLAUSE RECENTLY DEVELOPED FOR PROCUREMENTS OF THIS NATURE, WHICH SETS FORTH THE RIGHTS AND OBLIGATIONS OF PROSPECTIVE OFFERORS, WAS INADVERTENTLY OMITTED FROM THE SOLICITATION. WHILE THE OMISSION OF THIS CLAUSE REQUIRING OFFERORS TO SUBMIT SUCH DATA AS MAY BE REQUIRED FOR EVALUATION PURPOSES DID NOT PREJUDICE EITHER GAI OR SIMMONDS, SINCE THEIR RESPECTIVE PROBES WERE QUALIFIED PRIOR TO THE ISSUANCE OF THE SOLICITATION, AVIEN WAS PREJUDICED IN THAT IT WAS NOT SELECTED FOR AWARD ON THE BASIS OF ITS FAILURE TO SUBMIT DATA WHICH WAS NEITHER REQUIRED BY THE RFP NOR REQUESTED BY THE AIR FORCE.

IN VIEW OF THE EVIDENCE SUBMITTED BY THE AIR FORCE CLEARLY INDICATING THAT A TERMINATION OF GAI'S CONTRACT FOR THE NON-SET-ASIDE QUANTITIES OF THE LINE ITEMS LISTED IN THE SOLICITATION'S SCHEDULE WOULD CAUSE A SERIOUS PRODUCTION LINE STOPPAGE AT THE CONTRACTOR FACILITY PERFORMING THE MODIFICATION ON THE B-52D AIRCRAFT, WE DO NOT BELIEVE IT IS IN THE GOVERNMENT'S BEST INTEREST TO DISTURB THE AWARD TO GAI. FURTHERMORE, WE WILL NOT OBJECT TO THE ADDITION TO GAI'S CONTRACT OF 21 LINE ITEMS FROM THE SET-ASIDE PORTION OF THE PROCUREMENT AS NECESSARY TO PREVENT A FURTHER PRODUCTION LINE STOPPAGE. HOWEVER, REGARDING THE REMAINDER OF THE LINE ITEMS SET ASIDE FOR EXCLUSIVE SMALL BUSINESS PARTICIPATION, IN ACCORDANCE WITH THE AIR FORCE'S RECOMMENDATION, WE BELIEVE THE REQUIREMENT SHOULD BE RESOLICITED.

IN THIS CONNECTION, REGARDING GAI'S ARGUMENTS RELATIVE TO THE AIR FORCE'S DECISION TO SET-ASIDE A LIKE QUANTITY OF THE LINE ITEMS FOR EXCLUSIVE SMALL BUSINESS PARTICIPATION, ANY OBJECTION TO THE ISSUANCE OF AMENDMENT 0002 SHOULD HAVE BEEN RAISED PRIOR TO THE DATE FOR RECEIPT OF PROPOSALS AND IS THEREFORE UNTIMELY AND WILL NOT BE FURTHER CONSIDERED BY OUR OFFICE. SEE 4 C.F.R. 20.2(A).

AS TO AVIEN'S FINANCIAL RESPONSIBILITY AND CAPABILITY TO PERFORM THE PROPOSED CONTRACT, WE REGARD THE MATTER TO BE MOOT SINCE NO AWARD WAS MADE TO AVIEN. SIMILARLY, WE VIEW AVIEN'S PROTEST REGARDING THE USE OF MIL-G- 26988C IN THE INSTANT PROCUREMENT TO BE MOOT SINCE WE HAVE BEEN ADVISED BY THE AIR FORCE THAT AVIEN HAS AGREED TO QUALIFY ITS ALTERNATE PROBE IN ACCORDANCE WITH THAT SPECIFICATION.