B-161038, DEC. 8, 1967

B-161038, DEC. 8, 1967

BIDS - PROPRIETARY DATA, ETC. DECISION AFFIRMING OPINION OF JULY 10, 1967, AND DENYING REQUEST OF COMET EQUIPMENT CO., INC. THAT MILITARY SPECIFICATION REQUIRING USE OF PATENTED COMET SWIVEL HOOKS REMAIN IN EFFECT UNTIL THOMAS HOOKS HAVE BEEN TESTED AND PROVEN. EVALUATION OF RELATIVE MERITS OF DIFFERENT PRODUCTS AND FORMULATION OF STANDARDS ARE MATTERS IN CONNECTION WITH ADDITIONAL TESTING. UNDER THE GOVERNMENT'S PATENT LICENSE OTHER BIDDERS MAY ELECT EITHER TO PURCHASE THE SWIVEL HOOK FROM COMET OR TO MANUFACTURE THE HOOK UNDER THE GOVT. LICENSE WHICH WOULD INVOLVE A BID EVALUATION FACTOR OF ONLY 1 CENT PER HOOK, THEREFORE COMET'S ALLEGATION OF IMPAIRMENT OF ITS FINANCIAL FUTURE IS NOT UNDERSTOOD. IN A LETTER TO THE SEC. OF ARMY, IT WAS CONCLUDED THAT SINCE THE ADMINISTRATIVE NEED SOLELY FOR THE COMET HOOK HAS NOT BEEN FULLY OR FAIRLY ESTABLISHED THE USE OF PROPRIETARY COMET SWIVEL HOOK IN A PROCUREMENT TO MEET URGENT NEEDS IS NOT APPROVED.

TO MR. SECRETARY:

REFERENCE IS MADE TO LETTER DATED NOVEMBER 15, 1967, FROM THE DIRECTOR OF MATERIEL ACQUISITION, OFFICE OF THE ASSISTANT SECRETARY, REQUESTING THAT WE PERMIT THE PROCUREMENT OF IMMEDIATE MILITARY REQUIREMENTS OF TIRE CHAIN ASSEMBLIES UNDER MILITARY SPECIFICATION MIL C-62040/MO), INCORPORATING THE PROPRIETARY COMET SWIVEL HOOK FEATURE WHICH WAS HELD TO BE UNAUTHORIZED BY OUR DECISION OF JULY 10, 1967, 47 COMP. GEN.---, B-161038. THE SOLICITATION PROPOSED WOULD BE FOR 11,788 PAIRS OF TIRE CHAIN ASSEMBLIES WHICH WOULD INCLUDE 602,836 COMET SWIVEL HOOKS COMPRISING AN ESTIMATED ONE -THIRD OF THE COST OF THE CHAIN ASSEMBLIES. THE LETTER ALSO REFERS TO A NEED FOR 27,106 CROSS CHAINS, HOWEVER, THERE IS NO INDICATION THAT THE COMET SWIVEL HOOK IS TO BE PROCURED AS A PART OF SUCH CROSS CHAINS SO AS TO BRING THE CROSS CHAINS WITHIN THE PROSCRIPTION OF THAT DECISION.

IT IS STATED THAT, WHILE PLANS HAVE BEEN FORMULATED TO TEST COMPETITIVE SWIVEL HOOKS, SUCH TESTS ARE NOT EXPECTED TO BE COMPLETED AND EVALUATED UNTIL JUNE 25, 1968, AND THE PROPOSED SOLICITATION WOULD TIDE THE ARMY OVER FROM THE PRESENT TIME THROUGH THE FIVE-MONTHS REORDER TIME OF A SECOND PROCUREMENT AFTER COMPLETION OF THE TEST PROGRAM. THE LETTER FURTHER STATES:

"OF COURSE, THE ARMY COULD SOLICIT BIDS IMMEDIATELY FOR TIRE CHAINS BASED ON THE OLD SPECIFICATION NOT REQUIRING THE COMET SWIVEL HOOKS. NEITHER COMET OR OTHER SWIVEL HOOK MANUFACTURERS COULD PARTICIPATE IN SUCH PROCUREMENT AND TIME-CONSUMING PROTESTS WOULD PROBABLY FOLLOW. HOWEVER, MORE IMPORTANTLY, IT WOULD MEAN A RETURN TO NON-ROTATING CROSS CHAINS WHICH TESTS HAVE SHOWN TO HAVE LESS THAN HALF THE WEAR LIFE AND WHICH REQUIRE MORE MAINTENANCE TIME AND EFFORT. OVER A PERIOD OF TIME, THESE FACTORS TRANSLATE INTO SUBSTANTIAL INCREASED COSTS. IN ADDITION, THE NEW SPECIFICATION HAS BEEN ISSUED TO THE FIELD AND TO RETURN TO THE OLD CHAINS AT THIS TIME WOULD CREATE CONSIDERABLE CONFUSION AND PROBLEMS IN THE SUPPLY SYSTEM.

"THE POSSIBILITIES OF SOLICITING ON A -COMET HOOK OR EQUAL BASIS' OR ON THE BASIS OF PERFORMANCE SPECIFICATIONS HAVE ALSO BEEN EXAMINED. THESE METHODS ARE NOT CONSIDERED FEASIBLE, AS THERE IS NO SATISFACTORY BASIS TO QUALIFY OR REJECT ANY SWIVEL HOOK OTHER THAN COMET EXCEPT BY SUBJECTING THEM TO THE SAME TYPE OF RIGOROUS TEST PROGRAM THAT WAS USED TO QUALIFY THE COMET OK.'

WE FIND LITTLE IN THE ABOVE CONTENTIONS WHICH WAS NOT PRESENTED AND CONSIDERED DURING THE FORMULATION OF THE SUBJECT DECISION, OR WHICH RELATES TO THE PRINCIPAL FACTORS ON WHICH THAT DECISION WAS BASED.

AS STATED IN THE DIRECTOR'S LETTER OF NOBEMBER 15, WE EXPRESSED THE VIEW IN THE SUBJECT DECISION THAT:

"* * * THE CIRCUMSTANCES RELATING TO THE EXCLUSION OF THE THOMAS COMPANY HOOK, AND APPARENTLY ANOTHER AVAILABLE SWIVEL DEVICE, FROM THE TEST PROGRAM ARE SUCH THAT THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM REQUIRES THAT FURTHER USE OF THE SPECIFICATION RESTRICTING PROCUREMENT OF CHAIN ASSEMBLIES OR SPARE PARTS TO THOSE USING THE COMET HOOK BE SUSPENDED UNTIL OTHER AVAILABLE COMPETITIVE ARTICLES SHALL HAVE BEEN TESTED AND EVALUATED.' THE COMPETITIVE BIDDING SYSTEM REFERRED TO THEREIN, AND COVERED BY 10 U.S.C. 2305, REQUIRES IN FORMAL ADVERTISING THAT SPECIFICATIONS AND INVITATIONS FOR BIDS SHALL PERMIT SUCH FREE AND FULL COMPETITION AS IS CONSISTENT WITH THE PROCUREMENT OF THE PROPERTY AND SERVICES NEEDED BY THE AGENCY CONCERNED. THE RECORD RECITED IN OUR DECISION SHOWED THAT IN 1960 AFTER EXTENSIVE TESTS OF KNOWN MAKES OF SWIVEL HOOKS, IT HAD BEEN DECIDED BY ATAC TO STICK TO THE CONVENTIONAL TYPE CHAINS WHICH HAD BEEN IN USE FOR YEARS, AND HAD BEEN ANNOUNCED THAT SWIVEL HOOKS WOULD NOT BE ADOPTED. IN THE LIGHT OF OUR CONCLUSIONS AS TO THE IMPROPRIETY OF THE PROCEDURES WHICH RESULTED IN THE SUBSEQUENT ADOPTION OF THE SPECIFICATION UNDER CONSIDERATION, WE CANNOT CONCLUDE THAT AN ADMINISTRATIVE NEED SOLELY FOR THE COMET HOOK HAS BEEN FULLY OR FAIRLY ESTABLISHED SO AS TO JUSTIFY OUR ACQUIESCENCE IN THE PROPOSED PROCUREMENT. ALTHOUGH IN OUR PRIOR DECISION WE REFRAINED, BECAUSE OF YOUR DEPARTMENT'S REPRESENTATIONS OF THE URGENCY OF ARMY'S NEEDS FOR TIRE CHAINS, FROM INTERFERING WITH THAT PROCUREMENT, IT DOES NOT APPEAR THAT ANY UNDUE DELAY WOULD NOW BE INVOLVED IN PROCURING TIRE CHAIN ASSEMBLIES ON SPECIFICATIONS PREVIOUSLY USED, UNDER WHICH WE ASSUME THAT BY FAR THE GREATER PART OF EXISTING STOCKS WERE PROCURED. EVEN IF THE REQUIREMENT OF SWIVEL HOOKS IS PROPER, IT SEEMS TO BE RECOGNIZED IN THE LAST SENTENCE OF THE ABOVE-QUOTED PARAGRAPHS FROM THE DIRECTOR'S LETTER THAT THERE IS NO ADEQUATE BASIS FOR REJECTING THE THOMAS, AND OTHER UNTESTED COMPETITIVE SWIVEL HOOKS, FROM COMPETITION IN PROVIDING ANY NEEDS WHICH ARMY MAY HAVE FOR SUCH TYPE OF HOOK.

WHILE USE OF THE SPECIFICATIONS INCORPORATING THE COMET HOOK MAY BE ADMINISTRATIVELY CONSIDERED THE MOST DESIRABLE, AND POSSIBLY THE MOST ECONOMICAL, APPROACH TO THE FULFILLMENT OF ARMY'S CURRENT NEEDS FOR TIRE CHAIN ASSEMBLIES, THE PREVENTION OF ANY SUSPICION OF FAVORITISM AND MAINTENANCE OF THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM HAS BEEN CONSISTENTLY RECOGNIZED AS BEING MORE BENEFICIAL TO THE GOVERNMENT THAN A PECUNIARY GAIN IN A GIVEN CASE.

CONCERNING THE MATTER OF POSSIBLE TIME-CONSUMING PROTESTS AGAINST ANY PROCUREMENTS OF TIRE CHAIN ASSEMBLIES BASED ON SPECIFICATIONS OTHER THAN THOSE SPECIFYING USE OF THE COMET SWIVEL HOOK, THERE IS ENCLOSED A COPY OF OUR LETTER OF TODAY TO THE ATTORNEYS FOR COMET EQUIPMENT COMPANY AFFIRMING THE SUBJECT DECISION. ALSO, YOUR ATTENTION IS DIRECTED TO THE FINAL PARAGRAPH OF THE THOMAS COMPANY LETTER OF MAY 22, 1967 (ENCLOSED WITH OUR LETTER TO YOU, B-161038 DATED JULY 10, 1967), WHEREIN THAT FIRM EXPRESSED ITS INTENTION TO PROTEST ANY SUBSEQUENT INVITATION FOR BIDS BASED UPON THE CLOSED COMET SPECIFICATIONS.

ACCORDINGLY, THE REQUEST OF YOUR DIRECTOR OF MATERIEL ACQUISITION FOR OUR APPROVAL OF THE PROPOSED PROCUREMENT OF 11,788 PAIRS OF TIRE CHAIN ASSEMBLIES INCORPORATING THE PROPRIETARY COMET SWIVEL HOOK FEATURE IS DENIED.