B-156520, JUL. 2, 1965, 45 COMP. GEN. 4

B-156520, JUL. 2, 1965, 45 COMP. GEN. 4

BIDDERS - QUALIFICATIONS - EXPERIENCE - RESPONSIBILITY V. RESPONSIVENESS UNDER AN INVITATION FOR BIDS TO FURNISH HIGHLY SPECIALIZED AND COMPLEX RADAR DEVICES, REQUIRING AN EXTENSIVE PERIOD OF TECHNICAL DEVELOPMENT, PREPRODUCTION PREPARATION AND TESTING, AND EVIDENCE OF BIDDER ABILITY AND CAPACITY TO PERFORM, THE FAILURE OF THE LOW BIDDER TO MEET THE LITERAL EXPERIENCE QUALIFICATION OF THE INVITATION DOES NOT REQUIRE BID REJECTION WHERE A PREAWARD SURVEY EVIDENCES THE LOW BIDDER IS QUALIFIED TO PERFORM ON THE BASIS OF MANAGEMENT AND LABOR CAPABILITIES, INCLUDING A POOL OF HIGH LEVEL ENGINEERING AND SCIENTIFIC PERSONNEL, PHYSICAL FACILITIES, PAST AND PRESENT CONTRACTUAL PERFORMANCE AND EXISTING BACKLOG, PRODUCTION AND QUALITY CONTROL, AND DELIVERY ABILITY, A DETERMINATION THAT IS NOT CONTROVERTED BY THE BID EVALUATION REPORT OF BIDDER NONRESPONSIVENESS FOR FAILING TO MEET THE LITERAL EXPERIENCE REQUIREMENTS OF THE INVITATION--- A MATTER OF RESPONSIBILITY--- THEREFORE, NOTWITHSTANDING THE SCOPE OF ADMINISTRATIVE DISCRETION IN DETERMINING BIDDER RESPONSIBILITY, ABSENT FACTUAL INFORMATION TO CONTROVERT THE PREAWARD SURVEY OF BIDDER RESPONSIBILITY, THE LOW BID SHOULD BE CONSIDERED FOR AWARD.

TO THE SECRETARY OF THE NAVY, JULY 2, 1965:

REFERENCE IS MADE TO THE LETTER OF MAY 26, 1965, AND ENCLOSURES, FROM THE ACTING ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, REPORTING ON THE PROTESTS OF LFE ELECTRONICS, A DIVISION OF LABORATORY FOR ELECTRONICS, INC., LORAL ELECTRONIC SYSTEMS, A DIVISION OF LORAL ELECTRONIC CORPORATION, AND GPL DIVISION, GENERAL PRECISION, INC., EACH OBJECTING TO AWARD OF A CONTRACT BY THE NAVY PURCHASING OFFICE UNDER INVITATION FOR BIDS NO. 600-454-65 TO ANY OTHER BIDDER. THESE PROTESTS WERE ALSO THE SUBJECT OF ADDITIONAL CORRESPONDENCE FROM THE BUREAU OF NAVAL WEAPONS UNDER DATE OF JUNE 16, 1965. AWARD OF A CONTRACT UNDER THIS INVITATION IS BEING HELD IN ABEYANCE PENDING DECISION OF OUR OFFICE ON THE RESPECTIVE PROTESTS.

THE SUBJECT INVITATION, ISSUED FEBRUARY 11, 1965, BY THE NAVY PURCHASING OFFICE, AS PROCURING AGENCY FOR THE BUREAU OF NAVAL WEAPONS ON THIS REQUIREMENT, CALLED FOR BIDS ON FURNISHING STATED MINIMUM TO MAXIMUM QUANTITIES OF AN/APN-153 (V) DOPPLER NAVIGATION RADAR SETS, CONSISTING OF SPECIFIED COMPONENTS, AS WELL AS CERTAIN OPTION ITEMS, SUPPORT EQUIPMENT, SUPPLY ITEMS, DESIGN DATA, AND ENGINEERING DRAWINGS. THE INVITATION ALSO PROVIDES FOR FURNISHING AND TESTING A PREPRODUCTION MODEL, WITH THE FINAL TEST REPORT TO BE SUBMITTED FOR APPROVAL NOT LATER THAN JANUARY 17, 1966. DELIVERY IS REQUIRED IN ACCORDANCE WITH AN ESTABLISHED SCHEDULE COMMENCING IN MAY 1966. IN ADDITION, THE INVITATION CONTAINED AN EXPERIENCE QUALIFICATION CLAUSE WHICH, AS AMENDED, READS AS FOLLOWS: CAUTION TO BIDDERS

THE NAVIGATION SETS CALLED FOR BY THIS INVITATION ARE HIGHLY SPECIALIZED AND COMPLEX RADAR DEVICES, UTILIZING THE DOPPLER PRINCIPLE AND ELECTRO- MECHANICAL ANALOG DEVICES. AS OF THIS DATE, VERY FEW CONCERNS HAVE SUCCESSFULLY PRODUCED THIS TYPE OF EQUIPMENT. THE PRODUCTION OF THIS EQUIPMENT WOULD REQUIRE AN EXTENSIVE PERIOD OF TECHNICAL DEVELOPMENT AND PREPARATION FOR MANUFACTURE INCLUDING THAT FOR BUILDING AND TESTING A PRE- PRODUCTION MODEL. PRIOR TO ANY AWARD RESULTING FROM THIS INVITATION FOR BIDS, BIDDERS MUST:

(A) DEMONSTRATE EXISTENCE OF, OR ABILITY TO INSTITUTE RAPIDLY, A QUALITY CONTROL PROGRAM MEETING REQUIREMENTS OF MIL-Q-9858A.

(B) DEMONSTRATE THAT IT HAS PRODUCED IN QUANTITY AND UNDER QUANTITY PRODUCTION TECHNIQUES, AIRBORNE ELECTRONICS EQUIPMENT TO MILITARY SPECIFICATIONS, K-BAND RADIO FREQUENCY EQUIPMENT, AND AIRBORNE GROUND VELOCITY SENSORS USING THE DOPPLER PRINCIPLE AND ELECTRO-MECHANICAL ANALOG DEVICES.

(C) DEMONSTRATE AVAILABILITY OF FACILITIES (A) TO SATISFY THE "QUALITY ASSURANCE PROVISIONS" FOR THE JAN/APN-153 (V), AS SET FORTH IN SECTION 4 OF MIL-N-23407A (WEP) AND (B) THAT ARE CAPABLE OF A PRODUCTION RATE OF 70 AN/APN-153 (V) SYSTEMS PER MONTH.

(D) DEMONSTRATE PLANS FOR ACQUISITION OF TOOLING, SPECIAL TOOLING AND TEST EQUIPMENT.

NOTE:

THE EVIDENCE TO BE PROVIDED UNDER THE ABOVE PARAGRAPH SHOULD BE FURNISHED WITH THE BID, AND IN ANY EVENT, MUST BE MADE AVAILABLE PRIOR TO AWARD, IF REQUESTED BY THE GOVERNMENT. THE ADEQUACY OF SUCH EVIDENCE OF THE BIDDER'S ABILITY TO PERFORM THE PROPOSED CONTRACT WILL BE A PRIMARY FACTOR IN DETERMINING THE RESPONSIBILITY OF THE BIDDER.

OF THE THIRTEEN BIDS RECEIVED AND OPENED ON MARCH 29, 1965, THE SIX LOWEST BIDS, AS EVALUATED, ARE AS FOLLOWS:

1. LORAL ELECTRONIC SYSTEMS

2. LFE ELECTRONICS

3. OREGON TECHNICAL PRODUCTS DIVISION

4. TEXAS INSTRUMENTS, INC.

5. THE MAGNAVOX COMPANY

6. GPL DIVISION THE CONTRACTING OFFICER HAS STATED THAT HE WAS UNABLE TO MAKE AN AFFIRMATIVE DETERMINATION OF LORAL'S RESPONSIBILITY BECAUSE IT DID NOT DEMONSTRATE COMPLIANCE WITH THE CAUTION TO BIDDERS CLAUSE. THEREFORE PROPOSES TP MAKE AWARD TO LFE AS THE LOWEST RESPONSIBLE BIDDER.

THE CONTRACTING OFFICER'S DETERMINATION, PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-904.1, CONCERNING THE RESPONSIBILITY OF THE TWO LOWEST BIDDERS IS EMBODIED IN HIS STATEMENT OF FACTS DATED MAY 26, 1965, FROM WHICH WE QUOTE PARAGRAPHS NINE AND ELEVEN:

9. THE PROTEST OF LORAL ELECTRONIC SYSTEMS REFERENCE (B), IS BASED ON ITS CONTENTION THAT IT IS THE LOW BIDDER, THAT IT HAS DEMONSTRATED FULLY ITS CAPABILITY OF PRODUCING THE REQUIRED EQUIPMENT AND THAT THE SURVEY BY THE INSPECTOR OF NAVAL MATERIAL, NEW YORK, FULLY SUPPORTS THIS POSITION. THE INSPECTOR OF NAVAL MATERIAL IN THE CONCLUSION OF HIS REPORT, ENCLOSURE (10), FINDS LORAL QUALIFIED TO PRODUCE UNDER IFB600-454-65. HOWEVER, ON PAGE 4 UNDER PRODUCTION, PARAGRAPH D (3), THE REPORT STATES IN PART ...'MANY MEMBERS OF THIS ENGINEERING STAFF APPEAR TO HAVE REASONABLY GOOD DOPPLER RADAR NAVIGATION AND MAPPING SYSTEM EXPERIENCE THOUGH CORPORATE EXPERIENCE APPEARS LIMITED TO A RECENT PROTOTYPE DEVELOPMENT UNDERWATER DOPPLER SONAR VELOCITY SENSOR FOR AN AIRCRAFT TYPE NAVIGATION SYSTEM INSTALLED IN A SUBMERSIBLE VEHICLE.'

11. RESULTS OF THE TECHNICAL REVIEW OF ALL THE DATA SUBMITTED BY THE THREE LOWEST BIDDERS AS DETAILED IN BUREAU OF NAVAL WEAPONS LETTER DATED 19 MAY 1965, ENCLOSURE (12), INDICATE THAT THE LOW BIDDER, LORAL ELECTRONIC SYSTEMS, WAS UNABLE TO DEMONSTRATE, AS REQUIRED UNDER "CAUTION TO BIDDERS" PARAGRAPH (B), THAT IT HAD PRODUCED IN QUANTITY AND UNDER QUANTITY PRODUCTION TECHNIQUES AIRBORNE GROUND VELOCITY SENSORS USING THE DOPPLER PRINCIPLE AND ELECTRO-MECHANICAL ANALOG DEVICES. IN VIEW OF THE TECHNICAL REVIEW OF THE TECHNICAL EXPERIENCE OF LORAL, THE CONTRACTING OFFICER WAS UNABLE TO MAKE A POSITIVE DETERMINATION THAT LORAL COULD RESPONSIBLY MEET THE DELIVERY REQUIREMENTS OF THE IFB. THE TECHNICAL REVIEW FURTHER INDICATES THAT LFE, THE SECOND LOW BIDDER, MEETS THE MINIMUM CRITERIA ESTABLISHED UNDER THE "CAUTION TO BIDDERS," AND THE CONTRACTING OFFICER HAS CONCLUDED, THEREFORE, THAT LFE IS THE LOW RESPONSIBLE BIDDER.

EXTENSIVE AND WELL REASONED PRESENTATIONS OF THE THREE PROTESTING BIDDERS' POINTS AND CONTENTIONS HAVE BEEN SUBMITTED BY THEIR RESPECTIVE REPRESENTATIVES. IN SUBSTANCE, IT IS LORAL'S CONTENTION THAT, UNDER CITED DECISIONS OF OUR OFFICE, IT MAY NOT BE CONSIDERED NONRESPONSIBLE FOR FAILING TO MEET ALL OF THE REQUIREMENTS OF THE EXPERIENCE QUALIFICATION CLAUSE SINCE THE ONLY VALID DETERMINATION OF ITS RESPONSIBILITY WAS THE AFFIRMATIVE DETERMINATION OF THE INSPECTOR OF NAVAL MATERIAL (INSMAT). LFE SAYS, IN SUBSTANCE, THAT THE "ESTABLISHED PRINCIPLE" OF OUR OFFICE NOT TO QUESTION THE CONTRACTING OFFICER'S DETERMINATION OF RESPONSIBILITY WHERE SUCH DETERMINATION HAS A "REASONABLE FACTUAL BASIS" IS FOR APPLICATION HERE AND THAT BOTH THE BUWEPS REPORT AND THE INSMAT REPORT SUPPORT SUCH A DETERMINATION. GPL'S POSITION IS THAT NEITHER LORAL NOR LFE ARE QUALIFIED AND THAT NEITHER WAS RESPONSIVE TO ALL OF THE REQUIREMENTS OF THE EXPERIENCE QUALIFICATION CLAUSE. THEREFORE, IT SAYS IT IS THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER AND SHOULD RECEIVE THE AWARD.

WHILE THE STATUTES GOVERNING PUBLIC PROCUREMENT BY FORMAL ADVERTISING PERMIT AWARD ONLY TO THE RESPONSIBLE BIDDER SUBMITTING THE LOWEST RESPONSIVE BID, IT IS NEITHER THE PROVINCE NOR THE INTENTION OF OUR OFFICE TO DETERMINE THE RESPONSIBILITY OF PROSPECTIVE GOVERNMENT CONTRACTORS. RESPONSIBILITY IS A QUESTION OF FACT TO BE DETERMINED BY THE CONTRACTING OFFICER AND NECESSARILY INVOLVES THE EXERCISE OF A CONSIDERABLE RANGE OF DISCRETION. HOWEVER, IT IS THE FUNCTION AND JURISDICTION OF OUR OFFICE TO INSURE THAT GOVERNMENT PROCUREMENTS ARE MADE IN ACCORDANCE WITH APPLICABLE LAW, AND THIS NECESSARILY INVOLVES REVIEW OF THE ADMINISTRATIVE DISCRETION TO THE EXTENT NECESSARY TO SEE THAT IT HAS BEEN EXERCISED WITHIN PROPER LIMITS. IN THIS REGARD, IT IS OUR DUTY TO DETERMINE FROM THE RECORD BEFORE US WHETHER THE INFORMATION AND DATA RELIED UPON BY THE CONTRACTING OFFICER IN FINDING THE LOW BIDDER, LORAL, TO BE NONRESPONSIBLE AS TO THIS PARTICULAR PROCUREMENT REASONABLY SUPPORT THAT FINDING. IN THIS CONNECTION, IT SHOULD BE NOTED THAT WE HAVE ADOPTED THE RULE IN PRIOR CASES THAT WE WILL NOT SUBSTITUTE OUR JUDGMENT FOR THAT OF THE CONTRACTING OFFICER, UNLESS IT IS SHOWN BY CONVINCING EVIDENCE THAT THE FINDING OF NONRESPONSIBILITY WAS ARBITRARY, CAPRICIOUS, OR NOT BASED ON SUBSTANTIAL EVIDENCE. 43 COMP. GEN. 257; 38 COMP. GEN. 778, 781. IN THE INSTANT CASE, THE FOREGOING PRINCIPLES MUST BE APPLIED SO AS TO GIVE EFFECT BOTH TO THE STATUTORY MANDATE THAT AWARD BE MADE TO THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER, AND TO THE EXPERIENCE QUALIFICATION CLAUSE WHICH WAS INCORPORATED INTO THE PRESENT IFB, AS QUOTED ABOVE UNDER THE HEADING "CAUTION TO BIDDERS.'

RESPONSIBILITY HAS BEEN DEFINED AS INCLUDING, AMONG OTHER THINGS, ORGANIZATION, TECHNICAL EXPERIENCE, KNOWLEDGE, SKILLS,"KNOW-HOW," TECHNICAL EQUIPMENT, AND FACILITIES. 38 COMP. GEN. 864. WHILE WE HAVE HELD THAT CONSIDERATION FOR THE AWARD OF A CONTRACT MAY BE LIMITED, WHERE THE INTERESTS OF THE GOVERNMENT WOULD BE SERVED THEREBY, TO THOSE BIDDERS MEETING SPECIFIED QUALITATIVE AND QUANTITATIVE EXPERIENCE REQUIREMENTS IN A SPECIALIZED FIELD WHERE THE BIDDING CONDITIONS SO PROVIDE, 37 COMP. GEN. 196, ID. 420, WE HAVE ALSO HELD THAT THE PURPOSE OF EXPERIENCE QUALIFICATION CLAUSES SUCH AS IN THE SUBJECT INVITATION IS TO FACILITATE THE DETERMINATION OF RESPONSIBILITY BY THE CONTRACTING OFFICER. 37 COMP. GEN. 420. HOWEVER, IT IS BASICALLY THE POSITION OF OUR OFFICE THAT THE BIDS OF RESPONSIBLE BIDDERS MAY NOT BE REJECTED MERELY FOR FAILURE TO MEET THE LITERAL REQUIREMENTS OF SUCH PROVISIONS, BUT THAT WHERE THERE IS ANY REASONABLE GROUND FOR DOUBT THERE MUST BE A SPECIFIC DETERMINATION OF NONRESPONSIBILITY, BASED UPON CONSIDERATION OF THE QUALIFICATIONS OF THE PARTICULAR BIDDER. SEE 39 COMP. GEN. 173 AND CASES THERE CITED. AS WAS STATED AT PAGE 178 OF THE FOREGOING DECISION,"THE STATEMENT OF SUCH QUALIFICATIONS SHOULD NOT BE CONSIDERED AS HAVING THE EFFECT OF TRANSFORMING THE PURELY FACTUAL QUESTION OF RESPONSIBILITY INTO A LEGAL QUESTION OF CONFORMITY TO THE INVITATION.' IN OTHER WORDS, SINCE THE EXPERIENCE REQUIREMENTS STATED IN THE "CAUTION TO BIDDERS" CLAUSE OF THE PRESENT INVITATION GO TO MATTERS OF RESPONSIBILITY, AS DEFINED HERETOFORE, THE LORAL BID MAY NOT BE REJECTED MERELY BECAUSE IT IS NONRESPONSIVE TO SUCH CLAUSE. QUOTING FURTHER FROM PAGE 178 OF THE FOREGOING DECISION,"EVEN THOUGH THE BIDDER MAY FAIL TO MEET SOME OF THE QUALIFICATIONS PRESCRIBED BY THE INVITATION, WE BELIEVE THAT REJECTION OF THE LOW BID AND AWARD TO ANY OTHER BIDDER SHOULD BE SUPPORTED BY A SPECIFIC DETERMINATION, BASED UPON CONSIDERATION OF THE QUALIFICATIONS OF THE PARTICULAR BIDDER, THAT THE LOW BIDDER WAS NOT A "RESPONSIBLE" BIDDER WITHIN THE MEANING OF THE STATUTE.'

IN DETERMINING THE VALIDITY OF THE CONTRACTING OFFICER'S FINDING THAT LORAL WAS NOT A RESPONSIBLE BIDDER WE MUST THEREFORE LOOK TO THE INFORMATION AND DATA AVAILABLE TO AND RELIED UPON BY HIM. THE CONTRACTING OFFICER REQUESTED A PARTIAL PREAWARD SURVEY OF LORAL BY THE INSPECTOR OF NAVAL MATERIAL, NEW YORK, PURSUANT TO NAVY PROCUREMENT DIRECTIVES (NPD) 1- 905.4. THE SURVEY WAS CONDUCTED AT THE BRONX, NEW YORK FACILITIES OF LORAL ON APRIL 26, 27, AND 28, BY SIX REPRESENTATIVES OF INSMAT, SOME OR ALL OF WHOM ARE ALLEGED TO HAVE HAD SOME PART IN SUPERVISING OR ADMINISTERING PRIOR CONTRACTS FOR THIS OR SIMILAR EQUIPMENT BY GPL. THE RESULTS OF THE SURVEY WERE REPORTED TO THE NAVY PURCHASING OFFICE BY A LETTER DATED MAY 13, 1965, WITH TWELVE SUPPORTING ENCLOSURES. THE SURVEY INCLUDED CONSIDERATION OF LORAL'S CAPABILITY WITH RESPECT TO ITS MANAGEMENT AND LABOR, PHYSICAL FACILITIES, PAST AND PRESENT CONTRACTUAL PERFORMANCE AND EXISTING BACKLOG, PRODUCTION, AND QUALITY CONTROL. PROFILE OF KEY PERSONNEL WAS SUBMITTED AS AN ENCLOSURE WITH THE COMMENT THAT A "REVIEW OF THE PROFILES INDICATES A HIGH LEVEL OF ENGINEERING AND SCIENTIFIC POOL WHICH CAN BE CONSIDERED PARTICULARLY APPROPRIATE FOR UTILIZATION ON THE APN/153 PROGRAM. A HIGH LEVEL OF ACHIEVEMENT IN PULSE TRAIN SEPARATION TECHNIQUES AND K-BAND ANTENNA RANGE (AN/ALQ-53) EXPERIENCE SHOULD PROVE TO BE A DEFINITE ADVANTAGE IN THE CRITICAL AREAS OF DESIGN AND MANUFACTURE.' ANOTHER IMPORTANT OBSERVATION OF THE SURVEY TEAM INDICATIVE OF LORAL'S CAPABILITY IS THE FOLLOWING FROM PARAGRAPH D/3), INDICATIVE OF LORAL'S CAPABILITY IS THE FOLLOWING FROM PARAGRAPH D (3), PAGE 4, OF THE REPORT:

(3) THE ENGINEERING STAFF APPEARS TO BE AN EXCELLENT RISK TO SUPPORT QUANTITY MANUFACTURE OF ,AIRBORNE GROUND VELOCITY SENSORS USING THE DOPPLER PRINCIPLE AND ELECTROMECHANICAL ANALOG EVICES" FROM PERFORMANCE TYPE MILITARY SPECIFICATIONS AND MIL-D-70327 CLASS II GUIDANCE PLANS. MANY MEMBERS OF THIS ENGINEERING STAFF APPEAR TO HAVE REASONABLY GOOD DOPPLER RADAR NAVIGATION AND MAPPING SYSTEM EXPERIENCE THOUGH CORPORATE EXPERIENCE APPEARS LIMITED TO A RECENT PROTOTYPE DEVELOPMENT UNDERWATER DOPPLER SONAR VELOCITY SENSOR FOR AN AIRCRAFT TYPE NAVIGATION SYSTEM INSTALLED IN A SUBMERSIBLE VEHICLE. THE WEALTH OF CORPORATE EXPERIENCE WITH AIRBORNE ELECTRONICS COUNTERMEASURES, NAVIGATION AND ANTISUBMARINE SYSTEMS EMPLOYING ELECTRO-MECHANICAL ANALOG AND DIGITAL DEVICES TENDS TO AFFIRM QUALIFICATION TO SUPPORT QUANTITY MANUFACTURE OF "AIRBORNE GROUND VELOCITY SENSORS USING THE DOPPLER PRINCIPLE AND ELECTROMECHANICAL ANALOG DEVICES.' IT IS CLEAR THAT THE SURVEY TEAM ALSO CONSIDERED LORAL'S PAST AND PRESENT PRODUCTION OF AIRBORNE EQUIPMENT, INCLUDING K-BAND RADIO FREQUENCY EQUIPMENT AND ELECTRO-MECHANICAL ANALOG DEVICES, TO BE IMPORTANT QUALIFYING EXPERIENCE FOR THE SUBJECT PROCUREMENT. WE REFER TO PARAGRAPHS C (1) AND D (2) ON PAGE 4 OF THE REPORT, AND PARTICULARLY TO THE LAST SENTENCE OF THE LATTER PARAGRAPH WHICH READS AS FOLLOWS:* * *. THE TECHNOLOGICAL RELEVANCY OF THIS PAST EXPERIENCE SERVES TO SUPPORT THE ABILITY OF THE CONCERN TO PERFORM ON SUBJECT BID.

IT WAS ALSO FOUND THAT LORAL EITHER HAD "IN-HOUSE" STANDARD AND SPECIAL TEST EQUIPMENT NECESSARY TO SUPPORT THE AN/APN-153 PROGRAM OR THE ABILITY TO PRODUCE OR PURCHASE SUCH EQUIPMENT. THE REPORT IS ALSO POSITIVE WITH RESPECT TO LORAL'S QUALITY CONTROL CAPABILITY. IT APPEARS THAT THE TEAM INITIALLY HAD SOME QUALMS ABOUT LORAL'S ABILITY TO MEET THE "TIGHT" DELIVERY SCHEDULE. HOWEVER, ANY DOUBTS IN THIS AREA WERE RESOLVED TO THE SATISFACTION OF THE SURVEY TEAM UPON EXAMINATION AND CONSIDERATION OF LORAL'S PRODUCTION PROGRAM CHART, PRODUCTION DELIVERY SCHEDULE, OPEN CAPACITY, ADEQUATE FACILITIES AND TEST EQUIPMENT, AND ABILITY AND INTENTION TO UTILIZE MULTI-SHIFTS IF NECESSARY. BASED UPON THE SURVEY, THE INSPECTOR OF NAVAL MATERIAL CONCLUDED THAT LORAL WAS QUALIFIED TO PERFORM IN ACCORDANCE WITH ALL THE REQUIREMENTS OF THE SUBJECT INVITATION.

THE CONTRACTING OFFICER ALSO REQUESTED AND RECEIVED A REVIEW AND EVALUATION OF THE BIDS OF LORAL AND LFE, AS WELL AS THE THIRD LOW BIDDER, OREGON TECHNICAL PRODUCTS, FROM THE BUREAU OF NAVAL WEAPONS. THE EVALUATIONS WERE FORWARDED TO THE NAVY PURCHASING OFFICE UNDER DATE OF MAY 19, 1965, SOME SIX DAYS AFTER THE INSMAT REPORT TO THE PURCHASING OFFICE WAS DATED. WHILE THE INSMAT REPORT IS NOT LISTED AMONG THE REFERENCES CONSIDERED IN MAKING THE EVALUATION OF LORAL, AND IT IS STATED IN THE SECOND PARAGRAPH OF THE BUREAU'S LETTER THAT THE EVALUATIONS AND FINDINGS ARE BASED ON THE INFORMATION FURNISHED BY THE BIDDERS, WE WERE ADVISED IN THE COURSE OF A CONFERENCE WITH THE BUREAU AND PURCHASING OFFICE PERSONNEL THAT THEY HAD SEEN AND DISCUSSED THE INSMAT REPORT BEFORE MAKING THE EVALUATIONS. AT ANY RATE, THEIR EVALUATION OR LORAL IS AS FOLLOWS: LORAL ELECTRONICS SYSTEMS

THE BIDDER HAS NOT MET THE CRITERIA OF SUBMITTING DOCUMENTATION OR OTHER EVIDENCE TO DEMONSTRATE EXPERIENCE IN PRODUCING AIRBORNE GROUND VELOCITY SENSORS USING THE DOPPLER PRINCIPLE.

AIRBORNE GROUND VELOCITY SENSORS SUCH AS THE AN/APN-153 (V) ARE RELATIVELY NEW AND COMPLEX DEVICES. THE DATA PROCESSING REQUIRED TO EXTRACT THE GROUND VELOCITY FROM THE RECEIVED ELECTROMAGNETIC SIGNAL IS NOT FOUND IN OTHER TYPES OF AIRBORNE EQUIPMENT. THIS CONTRACTOR WITH NO EXPERIENCE IN THE MANUFACTURE OF AIRBORNE GROUND VELOCITY SENSORS WOULD NOT BE ALERT TO THE POTENTIAL PROBLEMS AND PECULIARITIES ASSOCIATED WITH THE EQUIPMENT AND MAY NOT BE PREPARED TO COUNTER THESE THREATS WITHOUT RESULTANT UNTIMELY DELAYS IN DELIVERIES. THIS IS FORTIFIED BY THE FACT THAT NO IMMEDIATE ENGINEERING EXPERIENCE IN THE TYPE OF EQUIPMENT WAS EVIDENCED EVEN THOUGH THE CONTRACTOR DID EVIDENCE AN ULTIMATE POTENTIAL IN THIS AREA BASED ON HIS PAST RECORD IN UNDERWATER DOPPLER AND AIRBORNE K- BAND. HOWEVER SUCH POTENTIAL DOES NOT MEET THE CRITERIA OF CURRENT EXPERIENCE IN EITHER ENGINEERING MODEL OR QUANTITY MANUFACTURING.

THEREFORE, LACKING EXPERIENCE IN THE PRODUCTION OF AIRBORNE GROUND VELOCITY SENSORS USING THE DOPPLER PRINCIPLE, LORAL IS NOT CONSIDERED RESPONSIVE UNDER THAT PORTION OF THE CRITERIA SET FORTH IN THE IFB. IT IS CLEAR FROM THE ABOVE THAT THE ONLY DETERMINATION MADE BY THE BUREAU AND SUBMITTED TO THE CONTRACTING OFFICER, INSOFAR AS IS STATED, WAS THAT LORAL WAS NOT RESPONSIVE TO THE EXPERIENCE QUALIFICATION REQUIREMENT OF THE INVITATION WITH RESPECT TO PRODUCTION OF AIRBORNE GROUND VELOCITY SENSORS USING THE DOPPLER PRINCIPLE. NO DETERMINATION CONCERNING LORAL'S RESPONSIBILITY OR LACK OF IT WAS MADE. HOWEVER, THE STATEMENT WAS MADE THAT LORAL "DID EVIDENCE AN ULTIMATE POTENTIAL IN THIS AREA BASED ON HIS PAST RECORD IN UNDERWATER DOPPLER AND AIRBORNE K-BAND," BUT IT WAS CONCLUDED THAT "SUCH POTENTIAL DOES NOT MEET THE CRITERIA OF CURRENT EXPERIENCE IN EITHER ENGINEERING MODEL OR QUANTITY MANUFACTURING.'

WE ARE COGNIZANT OF THE FACT THAT THE CONTRACTING OFFICER IS NOT BOUND TO ACCEPT THE DETERMINATION OF RESPONSIBILITY MADE BY INSMAT, BUT IS FREE TO CONSIDER OTHER SOURCES OF INFORMATION AND DATA IN MAKING HIS DETERMINATION. THIS PRINCIPLE IS RECOGNIZED BY NPD 1-905.4 UNDER WHICH THE INSMAT SURVEY WAS INITIATED, WHERE IT IS STATED IN SUBPARAGRAPH (C) THAT "THE FINAL DETERMINATION AND RESPONSIBILITY AS TO A CONTRACT AWARD IS THAT OF THE CONTRACTING OFFICER.' HOWEVER, THIS REGULATION ALSO PROVIDES IN SUBPARAGRAPH (A) THAT THE CONTRACTING OFFICER "SHALL UTILIZE SUCH SURVEYS TO THE MAXIMUM EXTENT PRACTICABLE IN THE EVALUATION OF A RESPONSIBLE PROSPECTIVE CONTRACTOR (SEE ASPR 1 903).' CERTAINLY, WHERE THERE ARE CONFLICTING SURVEYS AS TO THE QUESTION OF RESPONSIBILITY, AND OTHER FACTUAL INFORMATION AND DATA AVAILABLE, IT IS THE PREROGATIVE OF THE CONTRACTING OFFICER TO CONSIDER AND WEIGH ALL THESE EVIDENTIARY DATA AND TO MAKE THE DETERMINATION REQUIRED BY THE APPLICATION OF HIS OWN BEST JUDGMENT THERETO. HOWEVER, IN THE INSTANT CASE IT IS OUR OPINION THAT THE CONTRACTING OFFICER HAD NO SUCH CONFLICT OF SURVEYS, INFORMATION, OR DATA. THERE WAS NEVER ANY CONTENTION THAT LORAL MET LITERALLY THE EXPERIENCE REQUIREMENTS WITH RESPECT TO PRODUCTION OF AIRBORNE GROUND VELOCITY SENSORS USING THE DOPPLER PRINCIPLE. ON THE OTHER HAND, THE ONLY CONSIDERATION AND EVALUATION OF THE SPECIFIC CAPABILITIES OF LORAL RESULTED IN A DEFINITE FINDING THAT IT WAS FULLY QUALIFIED AND CAPABLE OF PERFORMING THE WORK TO BE CONTRACTED FOR. THIS DETERMINATION WAS BASED ON A TECHNICAL EVALUATION OF LORAL'S ABILITY AND QUALIFICATIONS TO MEET ALL ASPECTS OF THE PROCUREMENT, INCLUDING ENGINEERING, PRODUCTION AND TESTING, AND QUALITY CONTROL, WITHIN THE DELIVERY SCHEDULE PRESCRIBED BY THE INVITATION, AND SUCH DETERMINATION WAS UNCONTROVERTED. IN THESE CIRCUMSTANCES, WE CANNOT SAY THAT THE CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY, BASED ONLY UPON THE PRECONCEIVED OPINION OF THE BUREAU OF WEAPONS THAT THE CONTRACT REQUIREMENTS COULD NOT BE MET BY ANY BIDDER WHO HAD NOT HAD THE PARTICULAR DEGREE AND KIND OF EXPERIENCE STATED IN THE INVITATION, WAS REACHED UPON SUBSTANTIAL GROUNDS.

DURING OUR CONSIDERATION OF THIS MATTER, THIS DISTINCTION BETWEEN RESPONSIBILITY AND RESPONSIVENESS WAS DISCUSSED WITH THE BUREAU OF NAVAL WEAPONS AND NAVY PURCHASING OFFICE PERSONNEL, AND UPON THEIR EXPRESSING THE OPINION THAT LORAL WAS, IN FACT, NONRESPONSIBLE EVEN THOUGH THEY HAD FAILED TO TO STATE IN THEIR EVALUATION, THEY WERE AFFORDED AN OPPORTUNITY TO SUBMIT, AMONG OTHER THINGS, A SPECIFIC FINDING, SUPPORTED BY REASONS, AS TO LORAL'S RESPONSIBILITY. WE SUBSEQUENTLY RECEIVED A COPY OF A LETTER DATED JUNE 16, 1965, FROM THE BUREAU TO THE NAVY PURCHASING OFFICE. ALTHOUGH THE REASONS JUSTIFYING THE USE OF THE EXPERIENCE REQUIREMENT ARE AMPLY STATED AND NOT QUESTIONED BY OUR OFFICE, WE CANNOT SAY THE SAME FOR THE CONCLUSION THAT LORAL IS NOT RESPONSIBLE. THE FOLLOWING IS THE SUPPLEMENTAL EVALUATION OF LORAL: SUPPLEMENTAL EVALUATION OF LORAL ELECTRONICS

LORAL ELECTRONIC SYSTEMS HAS NOT HAD NOR HAS DEMONSTRATED ANY PRIOR EXPERIENCE IN THE PRODUCTION OF AIRBORNE GROUND VELOCITY SENSORS USING THE DOPPLER PRINCIPLE. A REVIEW OF BRIEF RESUMES OF LORAL KEY ENGINEERING PERSONNEL FAILS TO SHOW ANY DEPTH OF EXPERIENCE IN AIRBORNE GROUND VELOCITY SENSORS USING THE DOPPLER PRINCIPLE. ALTHOUGH THEIR BACKGROUND AND EXPERIENCE IN THE PRODUCTION OF MILITARY ELECTRONIC EQUIPMENT MAY BE OTHERWISE SATISFACTORY AS SHOWN BY THEINM SURVEY, IT IS THE DETERMINATION OF THE BUREAU OF NAVAL WEAPONS THAT LORAL LACKS EXPERIENCE IN THE FIELD OF AIRBORNE GROUND VELOCITY SENSORS USING THE DOPPLER PRINCIPLE AS REQUIRED. CONSEQUENTLY, LORAL ELECTRONICS SYSTEM IS NOT CONSIDERED A RESPONSIBLE BIDDER. IT IS CLEAR THAT THIS EVALUATION DIFFERS IN ONLY TWO RESPECTS FROM THE EARLIER EVALUATION. THIS EVALUATION CONCLUDES THAT LORAL IS NONRESPONSIBLE BECAUSE IT HAS NOT HAD EXPERIENCE IN THE FIELD OF AIRBORNE GROUND VELOCITY SENSORS USING THE DOPPLER PRINCIPLE, RATHER THAN MERELY NONRESPONSIVE, AS WAS THE EARLIER CONCLUSION, FOR THE LACK OF SUCH EXPERIENCE. IN ADDITION, THE BUREAU CONSIDERS THE LORAL KEY ENGINEERING PERSONNEL LACKING IN DEPTH OF EXPERIENCE IN AIRBORNE GROUND VELOCITY SENSORS USING THE DOPPLER PRINCIPLE. WHILE THESE TWO FACTORS CERTAINLY HAVE A BEARING ON THE QUESTION OF LORAL'S RESPONSIBILITY, WE DO NOT THINK THE CONCLUSION OF NONRESPONSIBILITY BASED THEREON CAN BE ACCEPTED AS A STRICTLY FACTUAL DETERMINATION CONFLICTING WITH THE AFFIRMATIVE DETERMINATION OF INSMAT WHICH WAS BASED UPON AN INTENSIVE AND COMPLETE SURVEY OF MANY OF THE FACTS OF RESPONSIBILITY BY MEN CONNECTED WITH THE PRIOR PRODUCTION OF SIMILAR EQUIPMENT AND PRESUMABLY FAMILIAR WITH THE PRODUCTION PROBLEMS INVOLVED.

IN SUPPORT OF ITS CONTENTION THAT THE CONTRACTING OFFICER'S DETERMINATION OF LORAL'S NONRESPONSIBILITY HAS A REASONABLE FACTUAL BASIS AND IS THEREFORE NOT SUBJECT TO QUESTION BY OUR OFFICE, LFE HAS SUBMITTED AN EXTENSIVE AND COMPREHENSIVE BRIEF. THE CRUX OF THE ARGUMENT IS THAT BOTH THE BUWEPS AND INSMAT REPORTS INDICATE THAT LORAL'S LACK OF EXPERIENCE IN THE "RADAR DOPPLER FIELD" MAKE ITS ABILITY TO PRODUCE AND DELIVER THE EQUIPMENT ON TIME HIGHLY QUESTIONABLE, AND THAT IT IS THEREFORE NONRESPONSIBLE. WE AGREE THAT THIS IS A REASONABLE STATEMENT OF THE BUWEPS POSITION AS EXPRESSED IN ITS SUPPLEMENTAL EVALUATION. HOWEVER, AS ABOVE INDICATED, WE DO NOT FEEL THAT THE BUWEPS DETERMINATION OF NONRESPONSIBILITY MAY PROPERLY BE ACCORDED THE WEIGHT IT WOULD COMMAND IF IT WERE UNCONTROVERTED OR BASED UPON MORE THAN LORAL'S LACK OF EXPERIENCE IN PRODUCING THIS PARTICULAR ITEM. WE FEEL THAT THE BUWEPS EVALUATION WAS NOT BASED UPON A COMPLETE INVESTIGATION OF LORAL'S QUALIFICATIONS, BUT RATHER UPON AN ARBITRARY DETERMINATION THAT NO BIDDER OTHER THAN A PAST PRODUCER OF THE EQUIPMENT COULD QUALIFY. ALTHOUGH WE HAVE GIVEN DUE CONSIDERATION TO LFE'S ARGUMENT THAT THE INSMAT CONCLUSION THAT LORAL IS RESPONSIBLE IS AT VARIANCE WITH ITS SPECIFIC FINDINGS, WE DO NOT AGREE THAT THIS IS THE CASE. FOR EXAMPLE, ON PAGE 9 OF LFE'S LETTER OF JUNE 3, 1965, THE WORDS "RISK," "CALCULATED RISK," AND "EXTREMELY TIGHT" ARE TAKEN OUT OF CONTEXT IN RELATION TO THEIR USE IN THE INSMAT REPORT TO CREATE THE ILLUSION THAT THE INSMAT FINDINGS ARE, IN FACT, THAT IT IS HIGHLY UNLIKELY THAT LORAL CAN MEET THE DELIVERY REQUIREMENTS. THE PHRASE "CALCULATED RISK" IS USED BY INSMAT TO DESCRIBE LORAL'S PLAN TO PROCURE PRODUCTION MATERIAL PRIOR TO APPROVAL OF ITS PREPRODUCTION MODEL TO INSURE THAT PRODUCTION AND DELIVERY WILL NOT BE DELAYED FOR THE LACK OF MATERIAL TO WORK WITH. THE WORD "RISK" IS USED ON PAGE 4, PARAGRAPH 3 (3), OF THE INSMAT REPORT IN REFERRING TO THE ENGINEERING STAFF AS AN ,EXCELLENT RISK TO SUPPORT QUANTITY MANUFACTURE OF "AIRBORNE GROUND VELOCITY SENSORS USING THE DOPPLER PRINCIPLE AND ELECTROMECHANICAL ANALOG DEVICES"....' WITH RESPECT TO THE FURTHER STATEMENT ON PAGE 9 OF LFE'S LETTER THAT, THE REPORT ADMITS THAT LORAL DOES NOT HAVE REQUIRED SPECIAL PRODUCTION TEST EQUIPMENT BUT WILL HAVE TO FABRICATE IT," WE DIRECT ATTENTION TO PAGE 5, PARAGRAPH 3 (2) OF THE INSMAT REPORT, WHERE IT IS STATED:

(2) THE CONTRACTOR, IN HIS INVENTORY OF ELECTRICAL AND MECHANICAL INSTRUMENTS, IS WELL EQUIPPED TO HANDLE MOST OF THE TESTING AND GAGING ASPECTS FOR THE EQUIPMENT IN QUESTION. WHERE SPECIAL TEST EQUIPMENT AND TOOLS ARE REQUIRED, THE CONTRACTOR IS CAPABLE OF OF BUILDING OR WILL PURCHASE, AS APPROPRIATE.

FURTHER REFERENCE IS MADE IN EXHIBIT A OF THE JUNE 3 LETTER TO LORAL'S LACK OF THE NECESSARY TEST EQUIPMENT AND INABILITY TO OBTAIN OR PRODUCE SUCH EQUIPMENT, AND THE INABILITY TO CONDUCT THE REQUIRED TESTS. WE THINK THESE CONTENTIONS ARE ANSWERED BY THE ABOVE QUOTED PASSAGE, AS WELL AS BY THE FOLLOWING FROM PAGE 3, PARAGRAPH B (5):

(5) IT IS ESSENTIAL TO REALIZE, THAT IN THIS PROPOSED PROCUREMENT, THAT THE VARIOUS TEST PROGRAMS REQUIRED TO SUPPORT THE AN/APN-153 PROGRAM ARE ALL WITHIN THE SCOPE OF SIMILAR REQUIREMENTS ON EXISTING PROGRAMS AT LORAL. ONE SUCH TEST IS THE RELIABILITY ASSURANCE TEST (AGREE), WHICH IS CURRENTLY BEING PERFORMED SUCCESSFULLY ON AN/ANK-2 (SIC) EQUIPMENTS UTILIZING IN-HOUSE LORAL FACILITIES. EXISTING ENVIRONMENTAL FACILITIES WOULD PERMIT ALL PRE-PRODUCTION QUALIFICATION TESTS OTHER THAN SHOCK, EXPLOSIVE, SAND/DUST AND SALT SPRAY. THIS IN HOUSE CAPABILITY PROVIDES BETTER CONTROL FOR THE SCHEDULING OF THE PROGRAM. A CONSIDERABLE PART OF EXHIBIT A IS DEVOTED TO A REFUTATION OF INSMAT'S CONCLUSION THAT "TECHNOLOGICAL RELEVANCY OF ... PAST EXPERIENCE SERVES TO SUPPORT THE ABILITY OF THE CONCERN TO PERFORM ON SUBJECT BID.' SINCE OUR OFFICE IS WITHOUT THE TECHNICAL EXPERTISE TO MAKE A QUALIFIED DETERMINATION OF A DISPUTE OF THIS NATURE, WE ARE CONSTRAINED TO ACCEPT THE INSMAT DECISION IN THIS REGARD. THIS ENTIRE MATTER HAS BEEN CAREFULLY CONSIDERED BY OUR OFFICE WITH DUE REGARD FOR THE SCOPE OF ADMINISTRATIVE DISCRETION PROPERLY INVOLVED IN DETERMINING THE RESPONSIBILITY OF BIDDERS ON GOVERNMENT WORK; HOWEVER, FOR THE REASONS STATED ABOVE THE PRESENT RECORD DOES NOT IN OUR OPINION FURNISH ADEQUATE FACTUAL OR LEGAL BASIS FOR THE PROPOSED REJECTION OF THE LOW BID OF LORAL. THEREFORE, IN THE ABSENCE OF OTHER FACTUAL INFORMATION CONTROVERTING THE FINDING OF THE INSPECTOR OF NAVAL MATERIAL WE BELIEVE THAT THE BID OF LORAL SHOULD BE CONSIDERED FOR AWARD.

IN VIEW OF OUR CONCLUSION CONCERNING LORAL'S BID UNDER THE SUBJECT INVITATION, IT IS NOT NECESSARY FOR US TO CONSIDER THE CONTENTIONS OF LORAL AND GPL REGARDING LFE'S EXPERIENCE IN QUANTITY PRODUCTION OF "K BAND RADIO FREQUENCY EQUIPMENT.'

THE FILE FORWARDED WITH THE LETTER OF MAY 26, 1965, IS RETURNED WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S STATEMENT OF FACTS, BUREAU OF NAVAL WEAPONS' LETTERS OF MAY 19, 1965, AND JUNE 16, 1965, AND THE INSPECTOR OF NAVAL MATERIAL LETTER OF MAY 13, 1965.