B-149672, JUN. 3, 1963

B-149672, JUN. 3, 1963

TO PATTISON, WRIGHT AND PATTISON:

WE HAVE YOUR LETTERS OF AUGUST 8 AND SEPTEMBER 27, 1962, AND FEBRUARY 11, 1963, CONTENDING ON BEHALF OF THE R. E. DARLING COMPANY, INC., THAT CONTRACTS AWARDED BY THE U.S. NAVY AVIATION SUPPLY OFFICE, PHILADELPHIA, PENNSYLVANIA, TO SPACE AERO PRODUCTS COMPANY, INC., PURSUANT TO INVITATIONS FOR BIDS NOS. 383-1062-62 AND 383-1124-62, SHOULD BE CANCELED FOR THE REASONS SET OUT BELOW.

THE PROCUREMENTS IN QUESTION COVER THE PURCHASE OF LOW PRESSURE OXYGEN AND AIR HOSE ASSEMBLIES. BEFORE CONSIDERING THE SPECIFIC MATTERS AT ISSUE IT IS NECESSARY TO REVIEW THE HISTORY OF PROCUREMENTS FOR THESE ITEMS SINCE JANUARY 1962.

ON JANUARY 30, 1962, THE PROCUREMENT OFFICE ISSUED JD-IFB-383-828-62 FOR A QUANTITY OF ASSEMBLIES CONFORMING TO STATED AIR CREW EQUIPMENT LABORATORY (ACEL) DRAWINGS WHICH REQUIRED, IN PART, THE USE OF A NONREMOVABLE AND NONREPARABLE PIN. BIDS WERE OPENED AS SCHEDULED ON MARCH 1, 1962. THE BIDDERS AND THEIR UNIT PRICES WERE AS FOLLOWS:

TABLE

BIDDER UNIT PRICE BID

R. E. DARLING COMPANY, INC. $28.10

SPACE AERO PRODUCTS COMPANY, INC. 28.18

DAYCO CORPORATION 33.19

THE INVITATION WAS CANCELLED ON APRIL 25, 1962, BECAUSE IT WAS DETERMINED THAT THE SPECIFICATIONS SHOULD BE CHANGED TO REQUIRE A HOSE ASSEMBLY INCORPORATING REMOVABLE PINS TO SUBSTANTIALLY LENGTHEN THE SERVICE LIFE OF THE UNIT BY PERMITTING REPLACEMENT OF THE PIN UPON DESTRUCTION OR DAMAGE.

YOU CONTEND, IN THE LETTER OF FEBRUARY 11, 1963, THAT THE NONREPLACEABLE PINS WHICH WERE DEVELOPED BY R. E. DARLING IN 1960 AT NO COST TO THE NAVY HAD NOT BROKEN OR FAILED IN SUCH NUMBERS AS TO JUSTIFY THE SPECIFICATION CHANGE. IT IS CONTENDED THAT THE SPECIFICATION CHANGE WAS MADE AFTER BID OPENING TO AFFORD SPACE AERO A COMPETITIVE ADVANTAGE AND/OR TO JUSTIFY THE ERROR WHICH YOUR CLIENT ALLEGES THE NAVY PREVIOUSLY MADE IN AWARDING A NEGOTIATED CONTRACT TO SPACE AERO UNDER WHICH APPROXIMATELY $40,000 WAS PAID FOR ENGINEERING DRAWINGS AND RIGHTS FOR THE REPLACEABLE AND REMOVABLE PIN.

THE NAVY DISAGREES WITH YOUR STATEMENT THAT NO PROBLEM EXISTED WITH RESPECT TO PIN FAILURE AND BREAKAGE UNDER THE SPECIFICATION INCORPORATED INTO JD-IFB-383-828-62 AND HAS PRESENTED RECORDS INDICATING THAT SEVERAL HUNDRED OF THE ASSEMBLIES HAD TO BE DISCARDED BECAUSE OF PIN FAILURE. THAT AS IT MAY, THE ESTABLISHMENT OF SPECIFICATIONS WHICH WILL MEET THE NEEDS OF THE GOVERNMENT IS PRIMARILY WITHIN THE JURISDICTION OF THE ADMINISTRATIVE AGENCY CONCERNED, AND WE WILL NOT SUBSTITUTE OUR JUDGMENT FOR THAT OF SUCH AGENCY IN THE ABSENCE OF A CLEAR AND CONVINCING SHOWING THAT THE SPECIFICATIONS WILL NOT IN FACT MEET THE GOVERNMENT'S NEEDS. SEE 40 COMP. GEN. 294; 297; 17 COMP. GEN. 554, 557. FURTHER, UNDER 10 U.S.C. 2305 (C) ALL BIDS MAY BE REJECTED WHENEVER IT IS DETERMINED THAT SUCH ACTION IS IN THE PUBLIC INTEREST. UNDER THE CIRCUMSTANCES, WE FIND NO BASIS FOR QUESTIONING THE LEGALITY OF THE ACTION TAKEN BY THE PROCUREMENT AGENCY WITH RESPECT TO JD-IFB-383-828-62.

ON MARCH 23 AND APRIL 18, 1962, THE PROCUREMENT AGENCY ISSUED INVITATIONS FOR BIDS NOS. 383-1062-62 AND 383-1124-62, RESPECTIVELY, BOTH ORIGINALLY CALLING FOR THE OLD NONREPLACEABLE PIN. BOTH, HOWEVER, WERE AMENDED PRIOR TO OPENING (MAY 15 AND 24, 1962, RESPECTIVELY,) TO REQUIRE A REPLACEABLE PIN PURSUANT TO SAPCO DRAWING NO. P10018 WHICH WAS MADE PART OF THE SPECIFICATIONS. IN EACH CASE BIDS WERE RECEIVED BOTH FROM DARLING AND SPACE AERO AND, IN EACH CASE, AWARD WAS MADE TO THE LOW BIDDER, SPACE AERO, ON MAY 27, 1962, AND JUNE 20, 1962, RESPECTIVELY.

DELIVERIES WERE SCHEDULED TO BE COMPLETED ABOUT DECEMBER 10, 1962, UNDER THE EARLIER CONTRACT AND ABOUT JANUARY 2, 1963, UNDER THE LATTER CONTRACT. WE WERE ADVISED BY LETTER OF NOVEMBER 16, 1962, FROM THE OFFICE OF THE SECRETARY OF THE NAVY THAT DELIVERIES WERE EXPECTED TO BE COMPLETED IN MARCH OF 1963 IN THE CASE OF THE EARLIER CONTRACT AND JANUARY 1963 FOR THE LATTER CONTRACT.

YOU STATE THAT DARLING WAS FIRST APPRISED OF THE USE OF THE SAPCO DRAWING UPON RECEIPT OF ONE OF THE AMENDMENTS DESCRIBED ABOVE WHICH WAS ISSUED ON APRIL 17, 1962. IT IS REPORTED THAT SPECIFIC DEFECTS AND DEFICIENCIES WERE NOTED IN THE DRAWING AND PROMPTLY BROUGHT TO THE ATTENTION OF ACEL WHICH OFFICE THEN PREPARED AND ISSUED ACEL DRAWING 33C1218, REVISION A, UNDER DATE OF APRIL 30, 1962, WHICH WAS ESSENTIALLY THE ITEM DEPICTED IN THE SAPCO DRAWING WITH THE CORRECTION OF THE DEFICIENCIES NOTED BY DARLING. NOTWITHSTANDING THE NOTIFICATION AND THE ISSUANCE OF THE ACEL DRAWING WELL BEFORE AWARD, THE PROCUREMENT AGENCY DID NOT REJECT ALL BIDS AND READVERTISE AS IN THE CASE OF THE FIRST INVITATION DESCRIBED BUT, AS ALREADY INDICATED, MADE AWARD TO SAPCO.

SUBSEQUENTLY, THREE ADDITIONAL INVITATIONS FOR THE SAME KIND OF SUPPLIES (IFB-383-1140-62, ISSUED MAY 3, 1962; IFB-383-1344-62, ISSUED JUNE 12, 1962; AND IFB-383-1357-62, ISSUED MAY 28, 1962), ALL OF WHICH ORIGINALLY INCLUDED THE SAPCO DRAWING AS PART OF THE SPECIFICATIONS, WERE CANCELED ON JULY 5, 1962, IN EACH CASE AFTER OPENING, SO THAT THE PROCUREMENTS COULD BE READVERTISED USING THE ACEL DRAWING.

IT IS YOUR CONTENTION, IN THE LIGHT OF THE FOREGOING, THAT UNLESS THE TWO CONTRACTS AWARDED TO AERO SPACE WHICH INCLUDED THE SAPCO DRAWING AS PART OF THE SPECIFICATIONS ARE CANCELLED, THE NAVY WILL BE REQUIRED TO ACCEPT HARDWARE WHICH EITHER DOES NOT COMPLY WITH THE SPECIFICATIONS OR WHICH WILL NOT SERVE THE PURPOSES FOR WHICH PROCURED. ON THE OTHER HAND, WE HAVE BEEN ADVISED BY THE DEPARTMENT OF THE NAVY, THAT WHILE DEFICIENCIES IN THE SAPCO DRAWING WERE RECOGNIZED AT THE TIME OF AWARD, THE CONTRACTS WERE NEVERTHELESS AWARDED BECAUSE THE ITEMS WERE THEN IN SHORT SUPPLY AND AN INDEPENDENT MACHINE SHOP DETERMINED THAT MOST MANUFACTURERS COULD PRODUCE THE PART IN QUESTION WITHOUT DIFFICULTY. IT IS FURTHER REPORTED BY THE DEPARTMENT THAT THE REVISIONS OF THE DRAWINGS WERE MADE TO DELINEATE AND SPECIFY MORE DETAILED REQUIREMENTS RATHER THAN TO MAKE MATERIAL CHANGES IN THE NATURE OF THE ITEM. FINALLY, IT IS REPORTED THAT PARTS FURNISHED UNDER THE CONTRACTS WERE IN COMPLIANCE WITH THE DRAWINGS AND HAVE PERFORMED SATISFACTORILY IN SERVICE.

THE RULE IS WELL SETTLED THAT SPECIFICATIONS IN AN ADVERTISED PROCUREMENT MUST BE DRAWN SO AS TO REFLECT THE ACTUAL NEEDS OF THE GOVERNMENT. COMP. GEN. 294, 297. FURTHERMORE, SUCH SPECIFICATIONS MUST BE SET FORTH CLEARLY AND ACCURATELY SO THAT BIDDERS MAY COMPETE ON AN EQUAL FOOTING. 17 COMP. GEN. 790. WHILE ALL PARTIES AGREE THAT THE USE OF THE SAPCO DRAWING RESULTED IN A SPECIFICATION WHICH WAS FAR FROM IDEAL, IT MUST BE RECOGNIZED THAT ONLY THE UNUSUAL PROCUREMENT, OR AN INVITATION FOR THE SIMPLEST KIND OF PRODUCT, IS LIKELY TO INCORPORATE A SPECIFICATION WHICH SETS OUT THE GOVERNMENT'S NEEDS SO CLEARLY AND PRECISELY THAT NO QUESTION COULD BE RAISED AS TO THE PROPER INTERPRETATION OF ANY PART. IN OUR JUDGMENT THE VALIDITY OF A SPECIFICATION FOR PURPOSES OF ADVERTISED PROCUREMENT MUST BE BASED NOT ON WHETHER IT CONFORMS TO THE IDEAL BUT WHETHER THE GOVERNMENT'S ACTUAL NEEDS WILL THEREBY BE MET WITHOUT ANY UNDUE RESTRICTION ON COMPETITION. SEE B-145771, OCTOBER 17, 1961.

IN VIEW OF THE EVIDENCE PRESENTED TO THE EFFECT THAT A SUITABLE ITEM COULD BE FASHIONED ON THE BASIS OF THE SAPCO DRAWING NOTWITHSTANDING THE ADMITTED DEFICIENCIES, THAT SATISFACTORY PRODUCTS WERE IN FACT OBTAINED, THAT THE DEFICIENCIES APPARENTLY WERE NOT REGARDED SO AS GRAVE AS TO PREVENT DARLING FROM SUBMITTING A BID IN EACH CASE, AND THAT NO PROTEST WAS RECEIVED FROM ANY OTHER POSSIBLE SUPPLIER, WE MUST CONCLUDE THAT THE SPECIFICATION WAS NOT SO DEFECTIVE AS TO RENDER THE AWARDS INVALID. DO, HOWEVER, NOTE WITH APPROVAL THE SUBSTITUTION OF THE CORRECTED DRAWING IN THE LATER PROCUREMENTS. WE THINK THAT SUCH ACTION WOULD ALSO HAVE BEEN APPROPRIATE WITH RESPECT TO THE TWO PROCUREMENTS IN QUESTION HAD THE NEEDS OF THE GOVERNMENT PERMITTED THE DELAY WHICH WOULD OF NECESSITY HAVE BEEN EXPERIENCED. HOWEVER, UNDER THE CIRCUMSTANCES AND WITH DUE REGARD TO THE WIDE DISCRETION AUTHORIZED TO BE EXERCISED BY THE ADMINISTRATIVE AGENCY NOTED EARLIER, WE CANNOT FIND THAT THE DISCRETION WAS ABUSED.