B-176675, DEC 4, 1972

B-176675, DEC 4, 1972

BID PROTEST - AWARD OF SUBCONTRACT - SOLE-SOURCE BASIS DECISION DENYING THE PROTEST OF SPECTRA-ELECTRONICS, INC., AGAINST AWARD OF A SUBCONTRACT TO CALIFORNIA MICROWAVE, INC., BY WESTINGHOUSE ELECTRIC CORPORATION UNDER ITS FIXED PRICE BASIC ORDERING AGREEMENT WITH THE U.S. NAVY FOR MICROWAVE SIGNAL ANALYZER TEST SETS. SINCE THE SUBCONTRACT INVOLVED A MAJOR DESIGN CHANGE, THE CONTRACTOR WOULD BE JUSTIFIED IN AWARDING IT ON A SOLE-SOURCE BASIS TO THE ONLY FIRM WITH SUFFICIENT EXPERIENCE AND EXPERTISE TO MEET THE SUBCONTRACT'S REQUIREMENTS. MOREOVER, GAO WILL RARELY CONSIDER PROTESTS CONCERNING SUBCONTRACT AWARDS WHERE THE PRIME CONTRACTOR WAS NOT ACTING AS A PURCHASING AGENT FOR THE GOVERNMENT AND NO FRAUD OR BAD FAITH ON THE PART OF THE CONTRACTING OFFICER IN APPROVING THE AWARD IS SHOWN. B 173146, JUNE 15, 1972, 51 COMP. GEN. .

TO SPECTRA-ELECTRONICS, INC.:

FURTHER REFERENCE IS MADE TO YOUR PROTEST RELATING TO A SUBCONTRACT FOR AN/AWM-57B MICROWAVE SIGNAL ANALYZER (MSA) TEST SETS AWARDED TO CALIFORNIA MICROWAVE, INC. (CMI), BY WESTINGHOUSE ELECTRIC CORPORATION (WESTINGHOUSE) UNDER ITS FIXED PRICE BASIC ORDERING AGREEMENT (BOA) WITH THE UNITED STATES NAVY.

ESSENTIALLY YOUR PROTEST IS THAT THE SUBJECT PROCUREMENT IS FOR A MODIFIED AN/AWM-57A MSA TESTER, FOR WHICH WESTINGHOUSE HAS A DATA PACKAGE THAT SHOULD BE SUFFICIENT TO PERMIT A SECOND SOURCE TO BID ON THE MODIFIED 57B VERSION.

IN ITS REPORT TO OUR OFFICE THE DEPARTMENT OF THE NAVY STATES IN PERTINENT PART:

"IT IS THE POSITION OF THE COGNIZANT NAVAIR TECHNICAL PERSONNEL THAT THE 'B' CONFIGURATION OF THE AN/AWM-57 TESTER IS NOT SIMPLY A MINOR MODIFICATION OF 'A' CONFIGURATION, BUT RATHER THAT IT CONSTITUTES A MAJOR DESIGN CHANGE. THIS CHANGE HAS GREATLY BROADENED THE INTENDED USE OF THE TESTER. THE 57A IS USED ONLY ON THE FLIGHT DECK OF CARRIERS TO GIVE A 'GO -NO GO' CHECK ON THE MISSILE CONTROL SYSTEM. IN OTHER WORDS, THE 57A INDICATES WHETHER A SYSTEM IS OPERATING CORRECTLY. IT WILL NOT, HOWEVER, SHOW WHAT IS WRONG WHEN THE SYSTEM IS NOT WORKING. THIS FUNCTION, IDENTIFYING THE SPECIFIC PROBLEM (OR IN NAVY PARLANCE, 'FAULT ISOLATION'), IS WHAT THE 57B IS TO ACCOMPLISH. NOT ONLY WILL IT GIVE A QUICK 'GO-NO GO' CHECK OF THE SYSTEM, BUT IT WILL ALSO IDENTIFY AND 'FAULT ISOLATE' THE PROBLEM TO ITS LOWEST REPARABLE COMPONENT AND THEN AFTERWARDS CHECK TO DETERMINE WHETHER THE CORRECTIVE ACTION WAS PROPERLY PERFORMED.

"IT IS NAVAIR'S OPINION, THEREFORE, THAT THESE AND OTHER CHANGES INCORPORATED INTO THE AN/AWM-57B MSA TESTER ARE SO EXTENSIVE THAT THE USE OF THE COMMON AND COMPARABLE PORTIONS OF THE 57A DATA PACKAGE WOULD NOT ENABLE A COMPANY WITHOUT PREVIOUS DEVELOPMENT AND PRODUCTION EXPERIENCE ON THE 57A TO FABRICATE AND PRODUCE THE 57B TO THE NAVY'S SCHEDULE AND HARDWARE REQUIREMENTS.

"IT IS THE OPINION OF NAVAIR THAT THE AWARD TO CALIFORNIA MICROWAVE FULFILLS THIS TEST. (I.E., WHETHER THE AWARD OF THE SUBCONTRACT IS PREJUDICIAL TO THE INTERESTS OF THE UNITED STATES. 37 COMP. GEN. 315 (1957)). AS THE DESIGNER AND DEVELOPER OF THE AN/AWM-57A TESTER, CALIFORNIA MICROWAVE IS THE ONLY FIRM WITH SUFFICIENT EXPERIENCE AND EXPERTISE TO PROVIDE THE AN/AWM-57B IN ACCORDANCE WITH THE GOVERNMENT'S REQUIREMENTS. IN OTHER WORDS, HAD THE GOVERNMENT BEEN IN THE POSITION OF MAKING THE SAME PROCUREMENT DIRECTLY, WE BELIEVE THAT THE CIRCUMSTANCES DESCRIBED ABOVE WOULD HAVE JUSTIFIED A SOLE SOURCE PROCUREMENT TO CALIFORNIA MICROWAVE IN ACCORDANCE WITH THE PROVISIONS OF ASPR 3- 210.2(I)."

ADDITIONALLY, WESTINGHOUSE HAS ADVISED THIS OFFICE AS FOLLOWS:

"WESTINGHOUSE PROCESSED THIS PROCUREMENT IN ACCORDANCE WITH ITS GOVERNMENT APPROVED PROCUREMENT PROCEDURES, DETERMINED THAT WITH ITS DESIRED NEED IN SOUTHEAST ASIA, THE PREVIOUS PERFORMANCE OF CALIFORNIA MICROWAVE (AN/AWM-57A, 75 LOT PRODUCTION ORDER DELIVERED AHEAD OF SCHEDULE), THE SIGNAL SOURCES (A CRITICAL COMPONENT) BEING PROPRIETARY TO CMI, THE NEED FOR EXTENSIVE KNOWLEDGE OF THE AN/AWM-57A FOR THE MORE THAN 50% DESIGN CHANGE REQUIRED TO MEET THE SPECIFICATION OF AN/AWM 57B, IT WAS NECESSARY TO MAKE THE SUBCONTRACT AWARD ON A SOLE SOURCE BASIS.

"IT IS WESTINGHOUSE'S OPINION THAT TO DEVELOP A 'B' VERSION FROM A CONCEPTUAL STAGE OR UTILIZING LIMITED INFORMATION FROM ANOTHER SOURCE WOULD ENCOMPASS MORE THAN ONE YEAR. WESTINGHOUSE IS CONTRACTUALLY OBLIGATED UNDER RISK OF DEFAULT BY THE GOVERNMENT TO COMMENCE DELIVERIES IN FEBRUARY 1973, SEVEN (7) MONTHS AFTER AUTHORIZATION TO PROCEED."

SINCE THE PROTEST INVOLVES THE AWARD OF A SUBCONTRACT BY A PRIME CONTRACTOR OF THE GOVERNMENT AND NOT BY THE GOVERNMENT ITSELF, THERE IS FOR CONSIDERATION THE RATIONALE OF OUR DECISION IN B-173146, JUNE 15, 1972, 51 COMP. GEN. , WHERE, AFTER OBSERVING THAT OUR BID PROTEST PROCEDURES DID NOT PROVIDE FOR THE ADJUDICATION OF PROTESTS BY BIDDERS AGAINST SUBCONTRACT AWARDS MADE BY PRIME CONTRACTORS WHO ARE NOT ACTING AS PURCHASING AGENTS FOR THE GOVERNMENT, WE STATED:

"*** WHILE WE HAVE, ON OCCASIONS, ENTERTAINED SUCH PROTESTS, WE BELIEVE THAT IN SITUATIONS SUCH AS ARE PRESENT IN THE INSTANT PROCUREMENT - WHERE THE PRIME CONTRACTOR IS NOT ACTING AS A PURCHASING AGENT, AND WHERE THE AWARD HAS BEEN MADE AND NEITHER FRAUD NOR BAD FAITH ON THE PART OF THE CONTRACTING OFFICER IN APPROVING THE AWARD IS ALLEGED - THE POSSIBILITY OF FINDING ADEQUATE JUSTIFICATION TO SUPPORT CANCELLATION OF THE SUBCONTRACT IS SO REMOTE THAT CONSIDERATION OF SUCH PROTESTS UNDER OUR BID PROTEST PROCEDURES WOULD BE UNWARRANTED. WHILE WE WILL, OF COURSE, GIVE APPROPRIATE ATTENTION IN OUR AUDIT FUNCTIONS INVOLVING THE PRIME CONTRACT TO ANY EVIDENCE INDICATING THAT THE COST TO THE GOVERNMENT WAS UNDULY INCREASED BECAUSE OF IMPROPER PROCUREMENT ACTIONS BY THE PRIME CONTRACTOR, IN VIEW OF THE FOREGOING WE MUST DECLINE TO PASS UPON THE MERITS OF YOUR PROTEST AGAINST THE AWARD OF THE SUBCONTRACT TO MARTIN."

IN VIEW THEREOF, AND OF THE POSITIONS OF THE CONTRACTING AGENCY AND THE PRIME CONTRACTOR, AS SET OUT ABOVE, WE FIND NO VALID BASIS ON WHICH TO DISAGREE WITH THE AWARD OF THE SUBCONTRACT TO CMI.