B-169924, B-170426, FEB 10, 1971

B-169924, B-170426, FEB 10, 1971

CONTRACTS - AWARDS - ERRONEOUS RECONSIDERATION OF A DECISION, IN LIGHT OF SUBSEQUENTLY AVAILABLE INFORMATION, WHERE IT WAS HELD THAT THE INCLUSION OF THE LOG FTC IN THE SOLICITATIONS FOR 30 MODIFICATION KITS FOR GROUND CONTROLLED APPROACH RADAR AND THE REQUIREMENT THAT IT BE PURCHASED FROM ITT, GILFILLAN, ONE OF THE TWO BIDDERS, MADE THE PROCUREMENT NON-COMPETITIVE, COMPELS THE ADDITIONAL CONCLUSION THAT THE AIR FORCE DID NOT HAVE A JUSTIFIABLE LEGAL BASIS FOR INCLUDING A SOLE-SOURCE ITEM IN THE SOLICITATION INVOLVED. IN THE PRIOR DECISION IT WAS NOTED THAT THE LOG FTC REPRESENTED LESS THAN 20% OF THE TOTAL VALUE UNDER ONE SOLICITATION AND A LITTLE OVER 10% UNDER ANOTHER. SINCE IT WAS KNOWN FROM A PRE-AWARD SURVEY THAT COMPETITION WAS PRACTICAL AS TO OVER 80% OF THE DOLLAR VALUE OF ITEMS BEING PROCURED, FAILURE TO SECURE COMPETITION WAS IN CONTRAVENTION OF STATUTORY REQUIREMENTS. ADDITIONAL INFORMATION TO THE EFFECT THAT THE BASELINE MODIFICATION KIT HAD BEEN PREVIOUSLY PURCHASED WITHOUT THE LOG FTC FURTHER BRINGS INTO QUESTION THE LEGAL PROPRIETY OF THE AIR FORCE REQUIREMENT THAT THE LOG FTC'S MUST BE FURNISHED AS A PACKAGE DEAL. THEREFORE, THE AWARD TO GILFILLAN, WHICH WAS ALLOWED BY THE FIRST DECISION, SHOULD BE CANCELLED, OR ALTERNATIVELY THE CONTRACT FOR 15 OPTIONAL KITS SHOULD BE AWARDED TO THE SECOND BIDDER.

TO MR. SECRETARY:

PROPOSALS WERE SOLICITED BY YOUR DEPARTMENT IN JANUARY AND FEBRUARY 1970, FOR FURNISHING 30 MODIFICATION KITS (RFP F34601-70-R-2269) AND SPARE COMPONENTS (RFP F34601-70-R-2286) FOR GROUND CONTROLLED APPROACH (GCA) RADARS. THE PROPOSALS WERE ISSUED ON A SOLE SOURCE BASIS BECAUSE ITT GILFILLAN, THE ONLY PRIOR PRODUCER, WAS ASSUMED TO BE THE ONLY AVAILABLE SUPPLIER.

STERLING LABORATORIES CONTESTED THIS ASSUMPTION AND WAS FURNISHED COPIES OF THE SOLICITATION PACKAGES. BOTH STERLING AND GILFILLAN SUBMITTED TIMELY OFFERS ON BOTH PROPOSALS ON THREE SEPARATE OCCASIONS, THE LAST BEING ON JULY 15, 1970. BOTH SOLICITATIONS INCLUDED ONE COMPONENT WHICH BOTH GILFILLAN AND YOUR DEPARTMENT CHARACTERIZE AS PROPRIETARY TO GILFILLAN.

STERLING'S OFFER TO FURNISH A COMPONENT OF ITS OWN MANUFACTURE EQUAL TO THE GILFILLAN PROPRIETARY COMPONENT (THE LOG FTC) WAS REJECTED BY THE AIR FORCE. STERLING'S OFFER ON BOTH SOLICITATIONS WAS LOWER THAN GILFILLAN'S, AND THE PRE-AWARD SURVEY FOUND STERLING TO BE RESPONSIBLE EXCEPT FOR ITS INABILITY TO SECURE TIMELY DELIVERY FROM GILFILLAN OF THE PROPRIETARY COMPONENT AND SOME QUESTION WHETHER IT COULD OBTAIN EARLIER THAN 90-DAY DELIVERY OF ANOTHER COMPONENT FROM A SUPPLIER USED BY BOTH STERLING AND GILFILLAN.

STERLING PROTESTED TO OUR OFFICE AND ON NOVEMBER 24, 1970, WE ISSUED A DECISION WHICH HELD THAT THE REQUIREMENT FOR FURNISHING A COMPONENT MANUFACTURED BY ONE OF THE BIDDERS EFFECTIVELY PRECLUDED COMPETITION UNLESS THAT COMPONENT WAS MADE AVAILABLE, EITHER BY GILFILLAN OR THE AIR FORCE, IN TIME TO MEET DELIVERY REQUIREMENTS. WE SAID THAT THIS APPARENTLY WAS NOT POSSIBLE WITHIN THE TIME AVAILABLE FOR DELIVERY OF URGENTLY NEEDED ITEMS.

IN VIEW OF THESE CIRCUMSTANCES, WE SAID THERE SHOULD BE A RE EVALUATION OF THE NEED FOR THE ITEMS, AND A SOLE SOURCE PROCUREMENT MADE OF THOSE ITEMS OBTAINABLE ONLY FROM GILFILLAN WITHIN THE TIME THEN REQUIRED. STATED THAT COMPETITION SHOULD BE OBTAINED ON THOSE ITEMS AS TO WHICH TIME PERMITTED.

OUR DECISION WAS IMPLEMENTED BY YOUR DEPARTMENT BY THE AWARD TO GILFILLAN ON DECEMBER 3, 1970, OF 100% OF ALL ITEMS COVERED BY BOTH SOLICITATIONS.

RECONSIDERATION OF OUR DECISION OF NOVEMBER 24, 1970, IN THE LIGHT OF INFORMATION SINCE MADE KNOWN TO US, COMPELS US TO CONCLUDE THAT THE AIR FORCE DID NOT HAVE A JUSTIFIABLE LEGAL BASIS FOR INCLUDING A SOLE SOURCE ITEM IN THE SOLICITATIONS INVOLVED. THIS ITEM, THE LOG FTC, REPRESENTED LESS THAN 20 PERCENT OF THE TOTAL VALUE OF THE GILFILLAN OFFER UNDER SOLICITATION -2269 AND A LITTLE OVER 10 PERCENT OF THE VALUE OF SOLICITATION -2286. UNDER THE LAST PRIOR PROCUREMENT, THE LOG FTC WAS PURCHASED SEPARATELY. AS WE STATED IN OUR DECISION, THE INCLUSION OF THE LOG FTC IN THE SOLICITATIONS AND THE REQUIREMENT THAT IT BE PURCHASED FROM GILFILLAN MADE THE PROCUREMENTS NON-COMPETITIVE. IT WAS KNOWN, AS THE RESULT OF A PRE-AWARD SURVEY CONDUCTED ON STERLING, THAT COMPETITION WAS PRACTICAL AS TO OVER 80 PERCENT OF THE DOLLAR VALUE OF THE ITEMS BEING PROCURED. WE BELIEVE THAT THE FAILURE TO SECURE COMPETITION THUS KNOWN TO BE PRACTICAL WAS IN CONTRAVENTION OF THE STATUTORY REQUIREMENT (AND ASPR 3 -102(C)) TO OBTAIN THE MAXIMUM COMPETITION FEASIBLE.

OUR DECISION OF NOVEMBER 24, 1970, CLEARLY STATED THAT THIS PROCUREMENT WAS NOT COMPETITIVE SO LONG AS STERLING WAS REQUIRED TO PURCHASE LOG FTC'S FROM GILFILLAN. IN THE LIGHT OF THE ADDITIONAL KNOWLEDGE OF THE SUBJECT NOW BEFORE US, AND UPON RECONSIDERATION, WE QUESTION THE LEGAL PROPRIETY OF THE AIR FORCE REQUIREMENT THAT THIS BE DONE, AND THAT THE LOG FTC'S MUST BE FURNISHED AS A "PACKAGE DEAL" ALONG WITH THE PARAMETRIC AMPLIFIERS AND THE MOVING TARGET INDICATORS. THESE LATTER TWO ITEMS, WHICH COMPRISE THE BASELINE MODIFICATION KIT, HAD PREVIOUSLY BEEN PURCHASED WITHOUT THE LOG FTC. STERLING HAD BEEN GIVEN AN AFFIRMATIVE RATING BY THE PRE-AWARD SURVEY TEAM AS TO ITS ABILITY TO FURNISH THE BASELINE KITS WITHIN 90 DAYS AFTER RECEIPT OF ORDER. THE ACTION TAKEN HAS RESULTED IN THE PERPETUATION OF A SOLE SOURCE FOR THE EQUIPMENTS AT A CONSIDERABLY HIGHER COST AND PRECLUDED COMPETITION WHICH DEMONSTRABLY COULD HAVE BEEN OBTAINED FOR OVER 80 PERCENT OF THEIR VALUE. SUCH COMPETITION WAS REQUIRED BOTH BY THE LAW AND IMPLEMENTING REGULATIONS. WE MUST, THEREFORE, CONCLUDE THAT THE AWARD OF BOTH SOLICITATIONS TO GILFILLAN WAS LEGALLY INVALID.

THERE IS, HOWEVER, A POSSIBLE ALTERNATIVE TO CANCELLATION OF SOLICITATION -2269. THE SOLICITATION INCLUDED AN OPTION FOR 15 ADDITIONAL KITS. THESE ARE NOW AWARDED TO STERLING, THE LOW BIDDER, WE THINK THIS WILL OFFSET, IN PART AT LEAST, THE PRIOR IMPROPER ACTION. SINCE THE URGENCY ALLEGED IN JUSTIFICATION OF THE AWARD OF THE 30 PRIOR KITS DOES NOT APPLY IN THE CASE OF THESE 15 KITS, ANY PROBLEMS REGARDING THE PRODUCTION OF THE INCLUDED LOG FTC'S CAN BE RESOLVED THROUGH NORMAL NEGOTIATION PROCEDURES GIVING CONSIDERATION TO PRICE AND REASONABLE DELIVERY TIMES AVAILABLE UNDER THE THREE POSSIBLE WAYS IN WHICH THEY COULD BE SUPPLIED. WE BELIEVE THIS COURSE OF ACTION SHOULD BE TAKEN AND SO RECOMMEND.