B-152027, DECEMBER 4, 1963, 43 COMP. GEN. 465

B-152027: Dec 4, 1963

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CONTRACTS - SPECIFICATIONS - SAMPLES - PREPRODUCTION SAMPLE REQUIREMENT CAPACITY TO PERFORM UNDER AN ADVERTISED PROCUREMENT FOR RADIOLOGICAL EQUIPMENT THAT WAS PARTIALLY SET ASIDE FOR SMALL BUSINESS. A REQUIREMENT FOR THE SUBMISSION OF SAMPLES BEFORE BID OPENING TO TEST THE BIDDER'S CAPABILITY TO PRODUCE EQUIPMENT MEETING THE DETAILED SPECIFICATIONS NOT ONLY RESULTS IN THE USE OF BID SAMPLES TO DETERMINE THE RESPONSIVENESS OF THE BID WHICH IS NOT SANCTIONED BY THE FEDERAL PROCUREMENT REGULATIONS BUT RESULTS IN QUALIFYING SMALL BUSINESS BIDDERS ON THE BASIS OF CAPABILITY WHICH IS INCONSISTENT WITH THE AUTHORITY OF THE SMALL BUSINESS ADMINISTRATION UNDER 15 U.S.C. 637 (B) (7) TO MAKE FINAL DETERMINATIONS AS TO THE CAPACITY OF SMALL BUSINESS CONCERNS UNDER THE CERTIFICATE OF COMPETENCY PROCEDURE AND.

B-152027, DECEMBER 4, 1963, 43 COMP. GEN. 465

CONTRACTS - SPECIFICATIONS - SAMPLES - PREPRODUCTION SAMPLE REQUIREMENT CAPACITY TO PERFORM UNDER AN ADVERTISED PROCUREMENT FOR RADIOLOGICAL EQUIPMENT THAT WAS PARTIALLY SET ASIDE FOR SMALL BUSINESS, A REQUIREMENT FOR THE SUBMISSION OF SAMPLES BEFORE BID OPENING TO TEST THE BIDDER'S CAPABILITY TO PRODUCE EQUIPMENT MEETING THE DETAILED SPECIFICATIONS NOT ONLY RESULTS IN THE USE OF BID SAMPLES TO DETERMINE THE RESPONSIVENESS OF THE BID WHICH IS NOT SANCTIONED BY THE FEDERAL PROCUREMENT REGULATIONS BUT RESULTS IN QUALIFYING SMALL BUSINESS BIDDERS ON THE BASIS OF CAPABILITY WHICH IS INCONSISTENT WITH THE AUTHORITY OF THE SMALL BUSINESS ADMINISTRATION UNDER 15 U.S.C. 637 (B) (7) TO MAKE FINAL DETERMINATIONS AS TO THE CAPACITY OF SMALL BUSINESS CONCERNS UNDER THE CERTIFICATE OF COMPETENCY PROCEDURE AND, THEREFORE, THE REJECTION OF A LOW SMALL BUSINESS CONCERN BID FOR SAMPLE FAILURE WITHOUT REFERRAL TO THE SMALL BUSINESS ADMINISTRATION FOR POSSIBLE ISSUANCE OF A CERTIFICATE OF COMPETENCY IS NOT PROPER.

TO THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, DECEMBER 4, 1963:

WE REFER TO THE PROTEST IN BEHALF OF THE LANDSVERK ELECTROMETER COMPANY AGAINST THE AWARD OF A CONTRACT FOR MODEL V-742 DOSIMETERS TO THE BENDIX CORPORATION, WHICH MATTER WAS THE SUBJECT OF REPORTS DATED AUGUST 23 AND OCTOBER 10, 1963, FROM YOUR AGENCY.

AS THE RECORD SHOWS, INVITATION NO. FPNVH-Z-48237-/2/-A-4-9-63, ISSUED ON JANUARY 15, 1963, AND OPENED ON APRIL 9, 1963, CALLED FOR (ITEM NO. 2) 900,000 MODEL CDV-742 RADIOLOGICAL DOSIMETERS (225,000 OF WHICH WERE SET ASIDE FOR SMALL BUSINESS) IN ACCORDANCE WITH OFFICE OF CIVIL DEFENSE STANDARD ITEM SPECIFICATION CDV-742, REVISED DECEMBER 19,1962. THREE BIDS WERE RECEIVED, AS FOLLOWS:

TABLE

THE LANDSVERK ELECTROMETER COMPANY

675,000 UNITS AT $3.68 PER UNIT

450,000 UNITS AT $4.15 PER UNIT

INDUSTRIAL ELECTRONIC HARDWARE CORPORATION

$4.25 PER UNIT LESS 1/2 OF

1 PERCENT--- 20-DAY DISCOUNT

BENDIX CORPORATION

$4.24 PER UNIT

(BOTH LANDSVERK AND INDUSTRIAL ELECTRONIC ARE SMALL BUSINESS CONCERNS AND BENDIX IS A LARGE BUSINESS CONCERN.)

PARAGRAPH NO. 8 OF THE INVITATION STATED AS FOLLOWS:

8. SAMPLES--- PREPRODUCTION MODELS: BIDDER SHALL SUBMIT TO GENERAL SERVICES ADMINISTRATION, * * * FOR ARRIVAL NOT LATER THAN THE TIME SET FOR PUBLIC BID OPENING, * * * FIVE EACH CDV-742 RADIOLOGICAL DOSIMETERS PREPRODUCTION MODELS OF THE ITEMS BEING OFFERED. SAME WILL BE TESTED TO ESTABLISH WHETHER OR NOT THE ITEMS MEET THE NEEDS OF THE GOVERNMENT, AND ALSO TO DETERMINE COMPLIANCE WITH SPECIFICATIONS, PRIOR TO AWARDING A CONTRACT UNDER THIS INVITATION. * * * NON-ARRIVAL OF PREPRODUCTION MODELS AT THE DESIGNATED ADDRESS BY BID OPENING TIME, OR SUBMISSION OF PREPRODUCTION MODELS NOT COMPLYING WITH SPECIFICATIONS, WILL RESULT IN REJECTION OF THE BID. * * * PRIOR TO AWARD OF CONTRACT, THE PREPRODUCTION MODELS WILL BE TESTED BY EITHER THE OFFICE OF CIVIL DEFENSE OR ITS DESIGNATED AGENT. THE OFFICE OF CIVIL DEFENSE SHALL THEN DETERMINE FROM THE RESULTS OF SUCH TESTING WHETHER OR NOT THE BIDDER HAS DEMONSTRATED HIS CAPABILITY TO MANUFACTURE THE REQUIRED ITEMS. PRODUCTION INSTRUMENTS DELIVERED UNDER ANY RESULTING CONTRACT SHALL CONFORM TO AND BE IDENTICAL TO THE APPROVED PREPRODUCTION MODELS. APPROVAL OF PREPRODUCTION MODELS WILL NOT DETRACT FROM THE GOVERNMENT'S RIGHT TO TEST MATERIAL DELIVERED OR OFFERED FOR DELIVERY UNDER RESULTING CONTRACT TO DETERMINE COMPLIANCE WITH SPECIFICATIONS. * * *

IN ACCORDANCE WITH PARAGRAPH 8, THE FIVE SAMPLE MODEL V-742 DOSIMETERS SUBMITTED BY LANDSVERK AND BENDIX (INDUSTRIAL ELECTRONIC HAD FAILED TO SUBMIT SAMPLES) WERE SENT TO THE NATIONAL BUREAU OF STANDARDS, THE AGENT DESIGNATED BY THE OFFICE OF CIVIL DEFENSE (THE USING AGENCY) FOR TESTING OF THESE SAMPLES. THE NBS ISSUED ITS TEST REPORTS ON MAY 22, 1963. REPORTED THAT THE LANDSVERK SAMPLE GROUP WAS NOT IN COMPLIANCE WITH PARAGRAPH 4.1 OF THE SPECIFICATION,"OPERATIONAL TEMPERATURE," AND PARAGRAPH 4.5,"THERMO MECHANICAL EQUILIBRIUM.' (IT IS INDICATED THAT ALL FIVE LANDSVERK SAMPLES FAILED THE TEMPERATURE OPERATING TEST, PAR. 4.1A.) THE BENDIX SAMPLE GROUP WAS REPORTED TO BE IN COMPLIANCE UNDER THE TESTS CONDUCTED.

THE NBS TEST RESULTS WERE REPORTED TO THE OFFICE OF CIVIL DEFENSE, RADIOLOGICAL INSTRUMENT EVALUATION COMMITTEE. BY LETTER OF JUNE 7, 1963, THE COMMITTEE REPORTED TO THE GSA CONTRACTING OFFICER AS FOLLOWS:

IN FORMAL MEETING ON TUESDAY, MAY 28, 1963, THE OCD RADIOLOGICAL INSTRUMENT EVALUATION COMMITTEE REVIEWED THE ENCLOSED NATIONAL BUREAU OF STANDARDS TEST REPORTS AND INSPECTED THE BID SAMPLES OF CDV-742 DOSIMETER FURNISHED IN RESPONSE TO THIS INVITATION FOR BIDS. CONCLUSIONS OF THIS COMMITTEE ARE AS FOLLOWS:

(A) THE NATIONAL BUREAU OF STANDARDS TEST REPORT INDICATES THAT THE BID SAMPLES SUBMITTED BY THE LANDSVERK ELECTROMETER COMPANY DO NOT MEET THE TECHNICAL REQUIREMENTS OF THE OCD SPECIFICATION. FAILURE OF BID SAMPLES ON 4.1A OPERATIONAL TEMPERATURE AND 4.5 THERMO-MECHANICAL EQUILIBRIUM TESTS ARE CONSIDERED A DESIGN DEFICIENCY.

(B) THE COMMITTEE FAILED TO FIND ANY SUBMISSION OF DRAWINGS, SAMPLES, AND MATERIAL SPECIFICATIONS AS REQUIRED BY PARAGRAPH 2.4.2 AND 2.5 OF THE OCD SPECIFICATION.

(C) THE NATIONAL BUREAU OF STANDARDS TEST REPORT INDICATES THAT THE BID SAMPLES SUBMITTED BY THE BENDIX CORPORATION MEET THE TECHNICAL REQUIREMENTS OF THE OCD SPECIFICATION.

(D) THE COMMITTEE ON INSPECTION FOUND EXTERIOR PAINT AND DECAL DEFICIENCIES ON THE BENDIX BID SAMPLES. THESE DEFICIENCIES WOULD REQUIRE CORRECTION ON THE INITIAL PRODUCTION SAMPLES.

BASED ON THE FACTORS PRESENTED ABOVE, IT IS THE RECOMMENDATION OF THE OFFICE OF CIVIL DEFENSE THAT AWARD OF CONTRACT BE MADE TO THE BENDIX CORPORATION, CINCINNATI, OHIO, FOR THE DELIVERY OF CDV-742 DOSIMETERS CALLED FOR ON THIS INVITATION FOR BIDS.

IN A FILE MEMORANDUM DATED JUNE 11, 1963, CONCERNING THIS PROCUREMENT, THE CONTRACTING OFFICER STATED AS FOLLOWS:

TESTS CONDUCTED BY THE NATIONAL BUREAU OF STANDARDS INDICATED THAT THE LANDSVERK ELECTROMETER COMPANY BID SAMPLES DO NOT CONFORM TO THE SPECIFICATIONS IN TWO MAJOR AREAS WHICH CONSTITUTE A DESIGN DEFICIENCY. THIS BIDDER ALSO FAILED TO SUBMIT DRAWING SAMPLES AND MATERIAL SPECIFICATIONS REQUIRED WITH THE BID SAMPLES. FOR THESE REASONS, THE OFFICE OF CIVIL DEFENSE RECOMMENDED REJECTION OF THE LANDSVERK BID.

THE NATIONAL BUREAU OF STANDARDS TEST REPORT ON THE BENDIX SAMPLES REVEALED TWO MINOR DEFICIENCIES WITH RESPECT TO THE INSTRUMENT EXTERIOR PAINT AND OCD DECALS WHICH COULD EASILY BE CORRECTED DURING INITIAL PRODUCTION. OCD HAS DETERMINED THAT THE BENDIX CORPORATION SAMPLES COMPLY WITH THE TECHNICAL REQUIREMENTS OF THE OCD SPECIFICATIONS AND HAS RECOMMENDED A CONTRACT TO BE AWARDED TO THE BENDIX CORPORATION.

THE BENDIX CORPORATION AND THE LANDSVERK ELECTROMETER COMPANY ARE THE ONLY TWO KNOWN PRODUCERS OF THE CDV-742 DOSIMETERS. ALTHOUGH INDUSTRIAL ELECTRONIC HARDWARE CORPORATION HAD BID ON THIS REQUIREMENT, IT HAS NOT PREVIOUSLY PRODUCED THIS INSTRUMENT. THE BENDIX CORPORATION IS CURRENTLY DELIVERING CDV-742 INSTRUMENTS TO THE OCD UNDER GSA CONTRACTS GS-OOS-37733 AND GS-OOS-37944. THE LANDSVERK ELECTROMETER COMPANY HAS COMPLETED SHIPMENT OF 390,000 CDV-742 DOSIMETERS TO OCD DEPOTS ON MAY 29, 1963. WILL BE NOTED THAT THE INSTRUMENTS COVERED BY THE ABOVE CONTRACTS ARE IN ACCORDANCE WITH A SUPERSEDED OCD SPECIFICATION AND THE 900,000 INSTRUMENTS REQUIRED TO BE FURNISHED UNDER THIS IFB ARE COVERED BY A REVISED IMPROVED OCD SPECIFICATION.

AS THE SITUATION STANDS, THERE IS NO SMALL BUSINESS CONCERN ELIGIBLE FOR NEGOTIATION OF THE SMALL BUSINESS SET-ASIDE PORTION OF THE IFB, 225,000 EACH DOSIMETERS. IN VIEW OF THIS AND THE FACTS OUTLINED HEREIN, AND SINCE FUNDS FOR THIS PROCUREMENT MUST BE OBLIGATED PRIOR TO JUNE 30, 1963, IT IS DEEMED IN THE BEST INTEREST OF THE GOVERNMENT TO REJECT ALL BIDS RECEIVED, DISSOLVE THE SMALL BUSINESS SET-ASIDE, AND PROCURE THE ENTIRE QUANTITY OF 900,000 DOSIMETERS BY NEGOTIATION FROM BENDIX CORPORATION. IT IS THE OPINION OF THE CONTRACTING OFFICER THAT A BETTER QUALITY INSTRUMENT CAN BE OBTAINED FROM BENDIX AT A CONSIDERABLE SAVINGS IN PRICE. NEGOTIATIONS WOULD BE CONDUCTED PURSUANT TO THE PROVISIONS OF SECTION 302 (C) (10) OF PUBLIC LAW 152.

ON JUNE 28, 1963, A CONTRACT FOR THE TOTAL QUANTITY OF 900,000 UNITS WAS AWARDED TO THE BENDIX CORPORATION, PURSUANT TO SECTION 1-3.210 OF THE FEDERAL PROCUREMENT REGULATIONS--- IMPRACTICABLE TO SECURE COMPETITION BY FORMAL ADVERTISING--- AT A NEGOTIATED PRICE OF $4.21 PER UNIT. (AN ADDITIONAL 88,616 UNITS WERE PURCHASED UNDER AN OPTION PROVIDED IN THE CONTRACT.)

LANDSVERK QUESTIONS WHETHER IT WAS PROPER TO REJECT ITS LOW BID BECAUSE OF A SAMPLE FAILURE WITHOUT SUBMITTING THE MATTER TO THE SMALL BUSINESS ADMINISTRATION UNDER THE CERTIFICATE OF COMPETENCY PROCEDURE.

IN RESPONSE TO THIS PROTEST, THE OFFICE OF CIVIL DEFENSE REPORTS THAT THE BID SAMPLE REQUIREMENT ON PROCUREMENTS OF ITEMS OF THIS NATURE WAS INTRODUCED IN 1958 (AFTER GSA HAD STARTED LARGE-QUANTITY PROCURING OF RADIOLOGICAL EQUIPMENT FOR OCD IN 1954) AS A RESULT OF THE FOLLOWING EXPERIENCES:

A. DIFFICULTIES EXPERIENCED BY SMALL CONTRACTORS IN COMPREHENDING THE TECHNICAL COMPLEXITIES OF THE SPECIFICATIONS, RESULTING IN TWO CONTRACTS HAVING BEEN DEFAULTED.

B. TWO CONTRACTORS FINALLY HAVING TO SUBCONTRACT THIS WORK OUT, CAUSING MUCH DELAY IN THE PROGRAM.

C. LARGE QUANTITIES OF MARGINAL OR FAULTY EQUIPMENT BEING DELIVERED. OCD CONCLUDED THAT BID SAMPLES COULD ELIMINATE THESE DIFFICULTIES IN FUTURE CONTRACTS; AND IT STATES THAT THE USE OF BID SAMPLES SINCE 1958 HAS RESULTED IN IMPROVED CONTRACT PERFORMANCE, ALTHOUGH, AS STATED, THE ONLY PRODUCERS HAVE BEEN BENDIX AND LANDSVERK.

AS BACKGROUND, OCD EXPLAINS THAT RADIOLOGICAL INSTRUMENTS, BECAUSE OF THEIR USE IN THE DETECTION AND MEASUREMENT IN MICROMICRO AMPERES (10 TO THE 12TH POWER AMPERES) OF THE MINUTE ELECTRICAL SIGNALS CAUSED BY THE INTERACTION OF THE RADIATION WITH THE DETECTOR OR SENSITIVE ELEMENT OF THE INSTRUMENT, ARE REGARDED NOT AS ORDINARY ELECTRONIC DEVICES BUT AS HIGHLY SOPHISTICATED PRECISION INSTRUMENTS UTILIZING CLASSICAL PHYSICAL PRINCIPLES. OCD FURTHER EXPLAINS THAT SINCE THESE INSTRUMENTS ARE USED BY VOLUNTEERS AND ARE STORED IN SHELTER AREAS WHICH OFTEN ARE EXTREMELY DAMP, MAINTENANCE IS NECESSARILY POOR, AND, THEREFORE, THAT THE INSTRUMENT MUST BE DESIGNED TO WITHSTAND HARSH ENVIRONMENTAL CONDITIONS.

IN DRAFTING SPECIFICATIONS FOR THE INSTRUMENT, OCD DECIDED--- AFTER CONSULTATIONS WITH PRIVATE INDUSTRY--- THAT A PERFORMANCE SPECIFICATION WOULD BE BEST, SINCE THERE WAS DOUBT WHETHER A SATISFACTORY DETAILED TYPE SPECIFICATION COULD BE PREPARED; ALSO, IT WAS CONSIDERED DESIRABLE TO ALLOW THE INDIVIDUAL MANUFACTURER LATITUDE IN THE DESIGN OF THE EQUIPMENT. DUE TO THE USE OF THE PERFORMANCE TYPE SPECIFICATION, OCD CONCLUDED THAT BID SAMPLES WERE ESSENTIAL FOR THE FOLLOWING REASONS:

1. TO SHOW THE CHARACTERISTICS OF THE PRODUCT OFFERED.

2. TO MAKE SURE THAT THE MANUFACTURER UNDERSTOOD THE REQUIREMENTS OF THE COMPLICATED SPECIFICATIONS.

3. THE CORRECT MINOR DEFICIENCIES WHICH WOULD BE COMPOUNDED UNDER THE ACTUAL CONTRACT.

4. TO ASSURE THE OCD THAT THE BIDDER'S OFFER TO SUPPLY MET OCD REQUIREMENTS BY PROPER DESIGN CHARACTERISTICS AND CONSTRUCTION MATERIALS.

OCD FINDS THAT THE USE OF BID SAMPLES HAS HAD THE SALUTARY EFFECT OF ENCOURAGING, RATHER THAN RESTRICTING, COMPETITION. AS AN EXAMPLE, OCD CITES THE FY 1963 PROCUREMENT OF THE CDV-781, AERO SURVEY METER, WHERE BID SAMPLES WERE REQUIRED, AND THREE NEW SOURCES, NUCLEAR CHICAGO, RCA- BURLINGTON AND GE-SAN JOSE, SUBMITTED BIDS. (NUCLEAR CHICAGO RECEIVED AN AWARD.)

WITH SPECIFIC REGARD TO THE CDV-742 INSTRUMENT, OCD STATES THAT IT MUST HAVE BID SAMPLES TO DETERMINE WHETHER OR NOT THE MANUFACTURER'S PROPOSED OFFERING IS IN KEEPING WITH THE OCD SPECIFICATION. IT REPORTS THAT MANY OF THE KEY ELEMENTS IN THE DESIGN OF THE DOSIMETER ARE BASED UPON THE USE OF SPECIALIZED MATERIALS AND THE ASSEMBLY OF COMPONENT PARTS IN WAYS KNOWN ONLY TO THE PARTICULAR MANUFACTURERS; AND THAT THE WIDEST COMPETITION IS OBTAINED BY THE USE OF A PERFORMANCE SPECIFICATION. OCD POINTS TO PARAGRAPH 3.5.3 OF THE PRESENT SPECIFICATION, WHICH USES SUCH TERMS AS "READILY SEEN," "CLEARLY RESOLVED," AND "THE FOCUS OF," ALL OF WHICH, IT STATES, REQUIRE A SUBJECTIVE EVALUATION. OCD ALSO POINTS TO PARAGRAPH 4.1, THE FIRST SENTENCE OF WHICH STATES: "THE DOSIMETERS SHALL MEET THE REQUIREMENTS OF THE SPECIFICATION * * *.' OCD BELIEVES THAT PARAGRAPH 4.1 IS OPEN TO INTERPRETATION OF THE TEST RESULTS.

REGARDING THE FIVE LANDSVERK SAMPLES, OCD STATES THAT THE FAILURE OF ALL FIVE SAMPLES UNDER PARAGRAPH 4.1 INDICATED TO OCD THAT THE CAUSE MUST BE DUE TO ELECTRICAL LEAKAGE RATHER THAN TO OTHER POSSIBLE CAUSES. NBS REPORTS THAT IT MADE NO EFFORT TO DETERMINE THE PRESENCE OF ELECTRICAL LEAKAGE DURING THE 4.1 TESTS BECAUSE THE OBJECT OF PAR. 4.1 IS TO DETERMINE THE RESULTANT CHANGE IN RESPONSE OF THE INSTRUMENT TO RADIATION EXPOSURE AT DIFFERENT TEMPERATURES, RATHER THAN THE CAUSE OF THESE CHANGES; BUT THAT IF LEAKAGE CAUSES A CHANGE, THEN THIS IS ONE OF THE EFFECTS OF TEMPERATURE. OCD STATES THAT ELECTRICAL LEAKAGE IS THE ONE PARAMOUNT FLAW IN A DOSIMETER WHICH CANNOT BE TOLERATED; THAT BECAUSE OF LANDSVERK'S FAILURE OF ALL FIVE BID SAMPLES ON THE PARAGRAPH 4.1 TEST, IT WAS JUDGED THAT THE LANDSVERK BID WAS UNACCEPTABLE; AND THAT ALTHOUGH PARAGRAPH 4 COULD BE STRICTLY INTERPRETED TO REQUIRE THAT ALL INSTRUMENTS CONFORM TO THE ELECTRICAL LEAKAGE REQUIREMENT OF PARAGRAPH 2.7 (5 PERCENT AND 2 PERCENT INSTEAD OF 10 PERCENT) AT THE TEMPERATURE EXTREMES, OCD ALLOWS FOR LEAKAGE TO INCREASE BY A REASONABLE AMOUNT WITHIN THE LIMITS IMPOSED BY PARAGRAPH 4.1. OCD CONCLUDES ON THE MATTER OF BID SAMPLES AS FOLLOWS:

BECAUSE OF THE UNIQUE SOPHISTICATED NATURE OF RADIOLOGICAL INSTRUMENTS; BECAUSE IT IS IMPOSSIBLE AND IMPRACTICAL TO PROVIDE COMPLETELY DETAILED ENGINEERING TYPE SPECIFICATIONS FOR THIS TYPE OF INSTRUMENTATION; BECAUSE OF THE PAST DIFFICULTIES IN THE PROCUREMENT OF RELIABLE EQUIPMENT OF THIS TYPE; BECAUSE OF THE SEVERITY OF THE CIVIL DEFENSE ENVIRONMENT AND THE DUBIOUS NATURE OF THE VOLUNTEER LOGISTICAL SUPPORT AT THE LOCAL POLITICAL SUBDIVISIONS; BECAUSE OF THE LARGE QUANTITIES OF INSTRUMENTS PROCURED; THE OCD HAS FOUND IT ESSENTIAL TO PROCURE SUCH INSTRUMENTATION USING THE BID SAMPLE REQUIREMENT. THIS REQUIREMENT IS BASED ON ACTUAL EXPERIENCE AND NOT ON ARBITRARY DECISIONS.

MOREOVER, THERE ARE STRONG FEELINGS WITHIN OCD THAT ALL CONTRACTS FOR RADIOLOGICAL EQUIPMENT SHOULD BE NEGOTIATED. AS A MATTER OF FACT, THE VAGARIES OF THE APPLICABLE SPECIFICATIONS CAN PROVIDE SUFFICIENT JUSTIFICATION FOR USE OF THIS PROCUREMENT ROUTE AND CONSIDERATION WILL BE GIVEN TO THE USE OF NEGOTIATION IN THE FUTURE WHERE PROPER CONDITIONS SO INDICATE.

IT IS BELIEVED THAT THE FOREGOING CONSTITUTES SUFFICIENT JUSTIFICATION FOR THE DETERMINATION BY GSA THAT BID SAMPLES BE SUBMITTED WITH ALL BIDS FOR RADIOLOGICAL EQUIPMENT.

IT IS NOTED THAT IN THE FY 1962 CDV-742 DOSIMETER PROCUREMENTS, BID SAMPLES WERE NOT REQUIRED (OCD SAYS THAT TIME DID NOT ALLOW FOR ADEQUATE TESTING DURING THE FY 1962 PROCUREMENTS). OCD STATES THAT THE RESULTS OF THE FY 1962 PROCUREMENTS HAVE BEEN UNSATISFACTORY AS TO DELIVERY AND PERFORMANCE, AND ATTRIBUTES RESULTS TO WAIVING BID SAMPLES.

WE HAVE LONG RECOGNIZED THAT SAMPLES MAY PROPERLY BE REQUIRED AS A PART OF THE BID WHERE THEY ARE NEEDED TO SHOW EXACTLY WHAT THE BIDDER PROPOSES TO FURNISH AND THE SPECIFICATIONS CANNOT BE STATED WITH SUFFICIENT CLARITY TO PERMIT BID ACCEPTANCE WITHOUT THE SAMPLES. SEE 17 COMP. GEN. 940. HOWEVER, IN THE CITED CASE WE RECOGNIZED AS THE GENERAL RULE THAT BID SAMPLES ORDINARILY SHOULD NOT BE REQUIRED UNDER ADVERTISED BIDDING. STATED THE MATTER (P. 944) AS FOLLOWS:

THAT IS TO SAY, COMPLIANCE WITH THE REQUIREMENTS OF SECTION 3709, REVISED STATUTES, DOES NOT ORDINARILY PERMIT THE SUBSTITUTION OF SAMPLES FOR SPECIFICATIONS, AND IT FOLLOWS THAT WHERE NEEDED ARTICLES HAVE BEEN OR MAY BE ADEQUATELY COVERED BY SPECIFICATIONS, APPROPRIATIONS MAY NOT LEGALLY BE OBLIGATED BY THE ACCEPTANCE OF OTHER THAN THE LOW BIDDER, ON THE GROUND THAT THE LOW BIDDER, THOUGH PROPOSING TO FURNISH ARTICLES STRICTLY MEETING THE ADVERTISED SPECIFICATIONS, FAILED TO SUBMIT SAMPLES OF SUCH ARTICLES BEFORE THE BIDS WERE OPENED.

AS DEFINED IN FPR 1-2.202 A "BID SAMPLE" MEANS A SAMPLE REQUIRED BY THE INVITATION "TO BE FURNISHED BY A BIDDER AS A PART OF HIS BID TO SHOW THE CHARACTERISTICS OF A PRODUCT OFFERED IN HIS BID. THE TERM DOES NOT INCLUDE ANY TYPE OF SAMPLE SUBMITTED AFTER BID OPENING "SUCH AS ONE SUBMITTED TO EVIDENCE A MANUFACTURER'S ABILITY TO PRODUCE.' THE POLICY GOVERNING THE USE OF BID SAMPLES IS STATED IN FPR 1-2.202-4 AS FOLLOWS:

(B) POLICY. BIDDERS SHALL NOT BE REQUIRED TO FURNISH A BID SAMPLE OF A PRODUCT THEY PROPOSE TO FURNISH UNLESS THERE ARE CERTAIN CHARACTERISTICS OF THE PRODUCT WHICH CANNOT BE DESCRIBED ADEQUATELY IN THE APPLICABLE SPECIFICATION OR PURCHASE DESCRIPTION, THUS NECESSITATING THE SUBMISSION OF A SAMPLE TO ASSURE PROCUREMENT OF AN ACCEPTABLE PRODUCT. IT MAY BE APPROPRIATE TO REQUIRE BID SAMPLES, FOR EXAMPLE, WHERE THE PROCUREMENT IS OF PRODUCTS THAT MUST BE SUITABLE FROM THE STANDPOINT OF BALANCE, FACILITY OF USE, GENERAL "FEEL," COLOR, OR PATTERN, OR THAT HAVE CERTAIN OTHER CHARACTERISTICS WHICH CANNOT BE DESCRIBED ADEQUATELY IN THE APPLICABLE SPECIFICATIONS. HOWEVER, WHERE MORE THAN A MINOR PORTION OF THE CHARACTERISTICS OF THE PRODUCT CANNOT BE ADEQUATELY DESCRIBED IN THE SPECIFICATION, THE PRODUCT SHOULD BE PROCURED BY NEGOTIATION IN ACCORDANCE WITH SECTION 1 3.210.

OCD JUSTIFIES THE USE OF BID SAMPLES FOR THIS PROCUREMENT ON THE BASIS THAT, WITH THIS SPECIFICATION, IT WAS NECESSARY TO TEST THE BIDDER'S EQUIPMENT IN ORDER TO DETERMINE WHAT THE BIDDER WAS OFFERING AND WHETHER IT WAS ACCEPTABLE. POINTING TO THE LANDSVERK SAMPLES AS AN ILLUSTRATION, OCD EXPLAINS THAT PARAGRAPH 2.7 OF THE DOSIMETER SPECIFICATION DID NOT DEAL WITH THE PROBLEM OF ELECTRICAL LEAKAGE WHICH SHOWED UP IN THE PARAGRAPH 4.1 TEST PATTERN; AND THAT IN ORDER TO DETERMINE WHETHER OR NOT LANDSVERK HAD OFFERED EQUIPMENT WHICH WAS ACCEPTABLE WITH REGARD TO DESIGN, IT WAS FIRST NECESSARY TO TEST SAMPLES AND INTERPRET THE TEST PATTERNS.

FPR 1.2.202 SANCTIONS THE USE OF BID SAMPLES FOR THE PURPOSE OF CLARIFYING MINOR CHARACTERISTICS OF A PRODUCT WHICH CANNOT ADEQUATELY BY DESCRIBED IN THE SPECIFICATIONS. THE DOSIMETER SPECIFICATIONS USED IN THIS INSTANCE ARE PRIMARILY OF THE PERFORMANCE TYPE, IN THAT THEY CONSIST PRINCIPALLY OF A STATEMENT OF THE RESULTS TO BE OBTAINED, RATHER THAN OF DETAILS OF DESIGN OR CONSTRUCTION. IN GENERAL, IT HAS BEEN OUR OBSERVATION THAT IN CONNECTION WITH THE USE OF SUCH SPECIFICATIONS FOR PROCUREMENT OF ITEMS OF A TECHNICAL OR SCIENTIFIC NATURE IT IS MORE COMMON TO REQUIRE THE SUBMISSION WITH BIDS OF DESCRIPTIVE MATERIAL SETTING FORTH, IN SUCH DETAIL AS MAY BE CALLED FOR, INFORMATION CONCERNING THE DESIGN, MATERIALS, COMPONENTS, CONSTRUCTION, TC., WHICH THE BIDDER PROPOSES TO USE TO ACCOMPLISH THE DESIRED RESULT. THIS INFORMATION IS THEN USED TO EVALUATE THE BIDDER'S UNDERSTANDING OF THE SUBJECT MATTER AND THE TECHNICAL MERITS OF THE PROPOSED DESIGN, CONSTRUCTION, ETC., AND CONTRACT AWARD IS MADE ON THE BASIS OF SUCH EVALUATION, USUALLY WITH PROVISION FOR SUBMISSION BY THE CONTRACTOR OF PREPRODUCTION MODELS OR SAMPLES FOR TESTING AND INSPECTION AFTER AWARD.

THE SUBJECT INVITATION CONTAINS (P. 5, ARTICLE 4) SUCH A PROVISION FOR FURNISHING BY THE CONTRACTOR OF "INITIAL PRODUCTION SAMPLES" FOR INSPECTION AND TESTING, AND THE DELIVERY SCHEDULE IS BASED UPON THE TIME OF NOTICE OF APPROVAL OF THESE SAMPLES. THIS DUPLICATION OF SAMPLE TESTING APPEARS TO SERVE NO USEFUL PURPOSE, IF THE PREAWARD SAMPLE TESTING IS TO BE REGARDED AS CONCLUSIVE OF THE COMPLETE CONFORMITY OF THE BIDDER'S ARTICLE WITH THE SPECIFICATIONS.

IT MAY BE THAT IN THE PRESENT STATE OF DEVELOPMENT, A COMPLETE RADIOLOGICAL DOSIMETER SPECIFICATION SUITABLE FOR ADVERTISED BIDDING IS NOT AVAILABLE. HOWEVER, WITH REFERENCE TO THE LANDSVERK SAMPLE ILLUSTRATION, WE DO NOT FIND THAT THE SPECIFICATION WAS INCOMPLETE FOR PURPOSES OF BIDDING. PARAGRAPH 4.1 SETS FORTH A STANDARD OF PERFORMANCES FOR THE EQUIPMENT. (UNDER THIS TYPE OF SPECIFICATION, THE CONTRACTOR GENERALLY ASSUMES THE BURDEN OF ACCOMPLISHING THE PERFORMANCE, BUT HE RETAINS SOME LEEWAY ON HOW HE MAY ACHIEVE THE REQUIRED PERFORMANCE.) DO NOT SEE WHY THE OCD NEEDS A SAMPLE TO CLARIFY WHETHER OR NOT A BIDDER OFFERS TO COMPLY WITH THE PERFORMANCE STANDARDS OF PARAGRAPH 4.1. THE STATEMENT IN PARAGRAPH 4.1 THAT THE DOSIMETER SHALL MEET THE REQUIREMENTS OF THE SPECIFICATION IS STATED TO MEAN THAT THE INSTRUMENTS MUST STAY WITHIN 10 PERCENT OF CALIBRATION DURING EXPOSURE TO TEMPERATURE EXTREMES.

PARAGRAPHS 4.1 AND 4.5 OF THE SPECIFICATION DO NOT COVER CHARACTERISTICS WHICH "CANNOT BE DESCRIBED ADEQUATELY.' THE REQUIREMENTS OF PARAGRAPHS 4.1 AND 4.5 ARE PRECISE, AND IT WOULD, THEREFORE, BE IMPROPER UNDER FPR 1- 2.202 TO REQUIRE A BID SAMPLE FOR THE PURPOSE OF DEMONSTRATING COMPLIANCE WITH THOSE REQUIREMENTS. IT IS CLEAR FROM PARAGRAPH 8 OF THE INVITATION THAT PRODUCTION ITEMS UNDER THE CONTRACT WILL BE REQUIRED TO MEET NO MORE NOR LESS THAN THE REQUIREMENTS OF PARAGRAPHS 4.1 AND 4.5 OF THE SPECIFICATION, REGARDLESS OF WHETHER THE BID SAMPLES EXCEED OR FALL SHORT OF THOSE REQUIREMENTS. IN OTHER WORDS, THE BID SAMPLES CANNOT BE INTENDED TO ESTABLISH WHAT THE BIDDER IS OBLIGATED TO FURNISH UNDER THE CONTRACT, SO FAR AS THE REQUIREMENTS OF PARAGRAPHS 4.1 AND 4.5 ARE CONCERNED.

WHAT PURPOSE IS SERVED BY TESTING BID SAMPLES FOR CHARACTERISTICS WHICH ARE ADEQUATELY DESCRIBED IN THE SPECIFICATION? AS STATED ABOVE, IT IS NOT FOR THE PURPOSE OF ESTABLISHING WHAT MUST BE FURNISHED UNDER THE CONTRACT. IT SEEMS OBVIOUS THEREFORE THAT THE PURPOSE MUST BE TO MAKE CERTAIN THAT BIDDERS AVOID ONE OR MORE OF THE CAUSES WHICH COULD RESULT IN FAILURE OF THE SAMPLES TO MEET THE REQUIREMENTS OF THE SPECIFICATION. WHAT ARE THESE CAUSES? ONE WHICH IMMEDIATELY COMES TO MIND IS THE BIDDER'S INABILITY TO MANUFACTURE A SPECIFICATION PRODUCT. ANOTHER MIGHT BE THE BIDDER'S MISUNDERSTANDING OF OR FAILURE TO UNDERSTAND THE SPECIFICATION REQUIREMENTS. A BIDDER MIGHT POSSIBLY SUBMIT SAMPLES WHICH HE KNEW DID NOT MEET SPECIFICATIONS, ALTHOUGH THERE WOULD SEEM TO BE LITTLE POINT TO THIS UNLESS HE ALSO STATED SPECIFICALLY THAT HE INTENDED TO PERFORM IN ACCORDANCE WITH HIS SAMPLES RATHER THAN THE SPECIFICATIONS. ALSO, IT IS POSSIBLE THAT SAMPLE FAILURES COULD BE DUE TO CARELESSNESS OR LACK OF QUALITY CONTROL IN THEIR MANUFACTURE.

WHICH OF THESE CAUSES ARE DUE TO A BIDDER'S LACK OF "CAPACITY," AS THAT TERM IS USED IN SECTION 8 (B) (7) OF THE SMALL BUSINESS ACT, 15 U.S.C. 637 (B) (7/? FAILURE DUE TO THE BIDDER'S INABILITY TO DO BETTER CLEARLY IS. FAILURE BECAUSE THE BIDDER KNOWINGLY INTENDED NOT TO COMPLY WITH SPECIFICATIONS CLEARLY IS NOT. UNINTENTIONAL FAILURE BECAUSE OF CARELESSNESS OR INADEQUATE QUALITY CONTROL IN PRODUCING THE SAMPLES SEEMS TO BE FAIRLY ATTRIBUTABLE TO A SHORTCOMING IN ,CAPACITY.' THE REMAINING CAUSE, FAILURE FULLY TO UNDERSTAND THE SPECIFICATIONS, MAY BE DUE EITHER TO THE BIDDER'S CARELESSNESS IN READING THE SPECIFICATIONS OR HIS INABILITY TO UNDERSTAND THEIR MEANING. IT SEEMS TO US THAT A BIDDER'S ABILITY OR INABILITY TO UNDERSTAND SPECIFICATIONS IS PART OF HIS "CAPACITY" TO PERFORM. CARELESSNESS IN READING THE SPECIFICATIONS, WHICH MIGHT RESULT, FOR EXAMPLE, IN AN ASSUMPTION BY THE BIDDER THAT HIS STANDARD COMMERCIAL PRODUCT CONFORMS TO THE SPECIFICATIONS, IS NOT NECESSARILY ANY INDICATION OF THE BIDDER'S ABILITY, OR EVEN HIS WILLINGNESS, TO PERFORM IN ACCORDANCE WITH THE SPECIFICATIONS. IT MAY SHOW A LACK OF CAPACITY TO PREPARE A BID PROPERLY, BUT WE DO NOT BELIEVE IT DEMONSTRATES A LACK OF CAPACITY TO PERFORM THE CONTRACT.

WITH REFERENCE TO THE INSTANT CASE, THE QUESTION IS WHICH OF THESE POSSIBLE CAUSES FOR FAILURE OF BID SAMPLES WERE INTENDED TO BE AVOIDED BY THE TESTING OF THE SAMPLES UNDER PARAGRAPHS 4.1 AND 4.5 OF THE DOSIMETER SPECIFICATION? SINCE THESE PARAGRAPHS SET OUT SPECIFIC MATHEMATICAL MEASUREMENTS OF REQUIRED PERFORMANCE, BOTH CARELESS READING AND INABILITY TO COMPREHEND APPEAR TO BE RULED OUT AS THE REASON FOR TESTING TO DETERMINE COMPLIANCE WITH THESE PARAGRAPHS. IT COULD NOT HAVE BEEN TO ASCERTAIN WHETHER A BIDDER KNOWINGLY INTENDED NOT TO COMPLY WITH THE SPECIFICATION, SINCE THIS INTENTION WOULD HAVE HAD TO BE STATED IN THE BID OR ELSE THE BIDDER WOULD BE BOUND TO COMPLY BECAUSE OF THE LANGUAGE OF PARAGRAPH 8 OF THE INVITATION. THIS LEAVES AS REASONS CARELESSNESS ON THE PART OF BIDDERS IN MAKING THE SAMPLES OR INABILITY TO MANUFACTURE SPECIFICATION ITEMS.

IN VIEW OF THE PAST HISTORY OF DOSIMETER PROCUREMENTS, WHICH OCD STATES RESULTED IN THE DELIVERY OF LARGE QUANTITIES OF MARGINAL OR FAULTY EQUIPMENT AND THE INABILITY OF FOUR CONTRACTORS TO MANUFACTURE ACCEPTABLE DOSIMETERS, IT SEEMS RATHER CLEAR THAT THE MAIN PURPOSE OF THE TESTING WAS TO DETERMINE PRECISELY WHAT IS STATED IN PARAGRAPH 8 OF THE INVITATION, NAMELY,"WHETHER OR NOT THE BIDDER HAS DEMONSTRATED HIS CAPABILITY TO MANUFACTURE THE REQUIRED ITEMS.'

THE FEDERAL PROCUREMENT REGULATIONS DO NOT SANCTION THE USE OF BID SAMPLES FOR THE PURPOSE OF DETERMINING WHETHER A BIDDER HAS THE CAPABILITY TO MANUFACTURE AN ITEM WHICH WILL MEET PRODUCT CHARACTERISTICS CLEARLY DEFINED IN THE SPECIFICATIONS. SUCH A REQUIREMENT IS ALSO INCONSISTENT WITH THE AUTHORITY OF THE SMALL BUSINESS ADMINISTRATION TO MAKE FINAL DETERMINATIONS AS TO THE ,CAPACITY" OF SMALL BUSINESS CONCERNS UNDER THE "CERTIFICATE OF COMPETENCY" PROCEDURE. SEE 40 COMP. GEN. 106, 111.

WE RECOGNIZE THAT IN CERTAIN CASES, WHERE THE TECHNICAL OR PERFORMANCE REQUIREMENTS ARE PARTICULARLY NOVEL OR EXACTING SO THAT ACCEPTABILITY OF THE PRODUCT CANNOT REASONABLY BE ANTICIPATED WITHOUT ACTUAL DEMONSTRATION OR TESTING, PREAWARD SAMPLES FOR TESTING MAY APPROPRIATELY BE REQUIRED. SEE B-151436, JUNE 20, 1963, 42 COMP. GEN. 717. FOR SUCH SITUATIONS, WE HAVE APPROVED THE USE OF A QUALIFIED PRODUCTS PROCEDURE. SEE 36 COMP. GEN. 809. HOWEVER, UNDER EXISTING PROVISIONS OF LAW AND REGULATION THERE IS NO SANCTION FOR THE USE OF BID SAMPLES UNDER AN INVITATION FOR BIDS FOR THE PURPOSE OF QUALIFYING SMALL BUSINESS BIDDERS ON THE GROUND OF CAPABILITY. WE THEREFORE BELIEVE THAT THE LANDSVERK BID SHOULD NOT HAVE BEEN REJECTED WITHOUT FIRST REFERRING THE MATTER TO SBA FOR THE POSSIBLE ISSUANCE OF A CERTIFICATE OF COMPETENCY.