B-161448, APR. 12, 1968

B-161448, APR. 12, 1968

TO RADALAB, INCORPORATED:

REFERENCE IS MADE TO THE PROTEST OF UNIVERSAL INDUSTRIES AGAINST AWARD OF CONTRACT NO. DAAB-05-67-C-1223 TO YOUR FIRM BY THE UNITED STATES ARMY ELECTRONICS COMMAND.

WE HAVE CAREFULLY CONSIDERED YOUR LETTER OF APRIL 6, 1968, STATING YOUR REASONS FOR DISAGREEMENT WITH OUR DECISION OF FEBRUARY 7, 1968. THAT DECISION CONCLUDED THAT THE PROCUREMENT PROCEDURES RESULTING IN AWARD TO YOU OF CONTRACT NO. DAAB-05-67-C-1223 DEVIATED FROM LEGAL AND REGULATORY REQUIREMENTS IN MATTERS MATERIAL ENOUGH TO WARRANT CANCELLATION OF THE AWARD. AMONG THE DEVIATIONS WE MENTIONED WAS THE FAILURE TO OBTAIN CERTIFIED COST AND PRICING DATA FROM YOUR FIRM.

YOU NOW STATE THAT COST AND PRICING DATA WERE IN FACT OBTAINED, AND THE CLAUSE PRESCRIBED BY ASPR 7-104.29, PRICE REDUCTION FOR DEFECTIVE COST OR PRICING DATA, WAS INCLUDED IN YOUR CONTRACT. YOU STATE THAT SUCH DATA WERE FURNISHED IN RESPONSE TO A REQUEST THEREFOR BY THE CONTRACTING OFFICER IN A LETTER DATED FEBRUARY 27, 1967. IT IS INTERESTING TO NOTE THAT AS OF THAT TIME, WHICH WAS A MONTH AFTER THE CLOSING DATE FOR PROPOSALS, THERE HAD BEEN NO DETERMINATION THAT ANY OF THE THREE LOW PROPOSERS WERE NOT RESPONSIBLE, ALTHOUGH SURVEYS HAD BEEN REQUESTED. DO NOT UNDERSTAND WHY THE CONTRACTING OFFICER SHOULD HAVE REQUESTED COST AND PRICING DATA, SINCE SUCH DATA IS NOT REQUIRED WHERE ADEQUATE PRICE COMPETITION EXISTS.

BE THAT AS IT MAY, THE FACT REMAINS THAT THE DATA YOU FURNISHED WAS NOT CERTIFIED, WHICH RAISES DOUBT AS TO THE ENFORCEABILITY OF THE CONTRACT PRICE REDUCTION CLAUSE SINCE THAT CLAUSE CAN BE ARGUED TO BE APPLICABLE ONLY TO DEFECTS IN "CERTIFIED" DATA. WE MUST TAKE ISSUE, ALSO, WITH YOUR STATEMENT THAT WE CHARACTERIZED THIS AS THE "MOST SERIOUS" FAULT IN THE PROCUREMENT. WE DID STATE WE FELT IT TO BE MORE SERIOUS THAN THE CONTRACTING OFFICER'S FAILURE TO CONSIDER UNIVERSAL'S ,LATE" PRICE REDUCTION, AFTER HE HAD REQUESTED UNIVERSAL TO EXTEND THE TIME FOR ACCEPTANCE OF ITS PROPOSAL WITHOUT NOTIFICATION THAT UNIVERSAL'S PRIOR PRICE REDUCTION WAS NOT TO BE CONSIDERED. AS A PRACTICAL MATTER, IN VIEW OF THE CONCLUSION WE HAVE REACHED IN THE CASE, IT WOULD SERVE NO USEFUL PURPOSE TO HAVE RADALAB CERTIFY ITS DATA AT THE PRESENT TIME.

NOR DO WE BELIEVE IT NECESSARY TO DISCUSS ALL THE ERRORS OF JUDGMENT WHICH WERE MADE IN THE PROCUREMENT. IT WAS AND STILL IS OUR FIRM OPINION THAT FURTHER NEGOTIATIONS SHOULD HAVE BEEN CONDUCTED WITH BOTH RADALAB AND UNIVERSAL, AND POSSIBLY WITH VIEWLEX. THE MOST SERIOUS DEFECT IN THE PROCEDURES FOLLOWED WAS THE UNEQUAL TREATMENT ACCORDED RADALAB AND UNIVERSAL PRIOR TO THE AWARD. THE DATE ON WHICH RADALABWAS FINALLY DETERMINED TO BE RESPONSIBLE WAS A MONTH AFTER A NEGATIVE DETERMINATION HAD BEEN MADE ON UNIVERSAL, AND UNIVERSAL'S POSITION HAD IMPROVED SIGNIFICANTLY IN THAT TIME.

UNIVERSAL HAD RECEIVED APPROVAL OF ITS PREPRODUCTION MODEL ON NOVEMBER 3, 1966. ITS FIRST PRODUCTION DELIVERY WAS MADE THE FIRST PART OF MAY 1967, ABOUT 180 DAYS THEREAFTER. AS OF THE DATE RADALAB WAS FINALLY FOUND RESPONSIBLE, BASED ON 480-DAY DELIVERY OF FIRST PRODUCTION, BECAUSE OF THE NEED FOR IT TO FURNISH A PREPRODUCTION MODEL, UNIVERSAL WAS WITHIN 30 DAYS OF MAKING ITS FIRST 180-DAY DELIVERY UNDER ITS CURRENT CONTRACT. SOME 60 DAYS PRIOR TO THIS FIRST DELIVERY, UNIVERSAL HAD BEEN FOUND UNABLE TO BEGIN DELIVERY UNDER THE PRESENT PROCUREMENT WITHIN 300 DAYS. WE DO NOT UNDERSTAND HOW SUCH A DETERMINATION COULD HAVE BEEN MADE IF ADEQUATE INQUIRY HAD BEEN MADE CONCERNING ITS THEN CURRENT PRODUCTION POSITION.

WE DID NOT INTEND, IN OUR DECISION OF FEBRUARY 7, 1968, TO QUESTION RADALAB'S CAPABILITY OR INTEGRITY. OBVIOUSLY, THE PRESENT SITUATION IS NOT ONE OF ITS MAKING. THIS DOES NOT ALTER THE FACT THAT VERY SERIOUS ERRORS OCCURRED IN THE PROCEDURES RESULTING IN AWARD TO IT.

WE THEREFORE BELIEVE THAT THE REMEDIAL ACTION RECOMMENDED IN OUR DECISION OF TODAY TO THE SECRETARY OF THE ARMY IS PROPER. A COPY OF THAT DECISION IS ENCLOSED.