B-171407(1), APR 13, 1971

B-171407(1), APR 13, 1971

BID PROTEST - BUY IN BID DECISION DENYING PROTEST AGAINST AWARD OF CONTRACT TO GOODYEAR AEROSPACE CORPORATION BY THE DEPARTMENT OF THE NAVY FOR A TYPE OF WARHEAD. BECAUSE THE PRICE ADVANTAGE TO THE GOVERNMENT WAS SUBSTANTIAL, IT OUTWEIGHED FACTORS FAVORING AWARD TO PROTESTANT, THE RESEARCH AND DEVELOPMENT CONTRACTOR, AND SUCH A POSSIBILITY IS CONTEMPLATED BY ASPR 3- 108. FURTHER, A BUY-IN BID DOES NOT CONSTITUTE SUFFICIENT REASON FOR CANCELING THE AWARD AND THE DETERMINATION OF SUCCESSFUL BIDDER'S RESPONSIBILITY IS A MATTER FOR AGENCY DETERMINATION.

TO GOODWIN, PROCTER & HOAR:

REFERENCE IS MADE TO YOUR LETTERS OF FEBRUARY 24, 1971, AND PRIOR CORRESPONDENCE, ON BEHALF OF HYCOR, INC. (HYCOR), PROTESTING AGAINST THE AWARD OF CONTRACT NO. N00123-71-C-0563 BY THE DEPARTMENT OF THE NAVY TO THE GOODYEAR AEROSPACE CORPORATION (GAC).

THERE IS ENCLOSED HEREWITH A COPY OF OUR LETTER OF TODAY TO THE SECRETARY OF THE NAVY WITH FURTHER REFERENCE TO THE PROTEST.

WITH RESPECT TO THE CONTENTION THAT GAC "BOUGHT IN" THE CONTRACT, HYCOR ADMITS THAT A "BUY-IN" DOES NOT CONSTITUTE A SUFFICIENT REASON FOR CANCELING AN AWARD. B-169977(1), JULY 23, 1970, 50 COMP. GEN. . MOREOVER, WE HAVE STATED THAT IT IS THE RESPONSIBILITY OF THE CONTRACTING OFFICE TO MINIMIZE "BUY-INS" AS PART OF ITS CONTRACT MANAGEMENT DUTIES. SEE B- 169258, MAY 8, 1970.

FURTHER, HYCOR MAINTAINS THAT IT MEETS ALL THE REQUIREMENTS OF PARAGRAPH 3-108 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), WHICH PROVIDES FOR THE NEGOTIATION OF INITIAL PRODUCTION CONTRACTS FOR TECHNICAL OR SPECIALIZED SUPPLIES WITH THE RESEARCH AND DEVELOPMENT CONTRACTOR AND THAT THE PRODUCTION CONTRACT SHOULD HAVE THEREFORE BEEN AWARDED TO HYCOR. HOWEVER, ASPR 3-108 PERMITS THE INITIAL PRODUCTION CONTRACT TO BE AWARDED TO ANOTHER SUPPLIER WHEN THE PRICE ADVANTAGE TO THE GOVERNMENT IS SO SUBSTANTIAL AS TO OUTWEIGH FACTORS FAVORING AN AWARD TO THE RESEARCH AND DEVELOPMENT CONTRACTOR. SINCE THERE WAS A SUBSTANTIAL PRICE DIFFERENCE BETWEEN THE HYCOR AND THE GAC OFFERS, THE DETERMINATION TO MAKE AN AWARD TO GAC DOES NOT APPEAR TO BE WITHOUT A PROPER BASIS.

ALTHOUGH HYCOR CONCEDES THE RESPONSIBILITY OF GAC GENERALLY, IT MAINTAINS THAT, WITH RESPECT TO THIS PARTICULAR CONTRACT, THE CONTRACTING OFFICER COULD NOT REASONABLY HAVE DETERMINED GAC TO BE RESPONSIBLE. HYCOR POINTS OUT THAT THE PROCUREMENT ACTIVITY ORIGINALLY CONTEMPLATED A SOLE-SOURCE AWARD TO IT BECAUSE HYCOR WAS THE ONLY CONTRACTOR WITH PRODUCTION EXPERIENCE WITH THE WARHEAD; THAT AS THE ONLY PRODUCER, IT ALONE HAS KNOWLEDGE OF POTENTIAL PITFALLS AND LONG LEAD TIME ITEMS; AND THAT TO PRODUCE EVEN ONE UNIT REQUIRES THE DESIGN AND FABRICATION OF SPECIALIZED PRODUCTION EQUIPMENT. HYCOR POINTS OUT THAT AN ASSUMPTION THAT GAC WAS COMPETENT TO PERFORM THIS CONTRACT BECAUSE OF ITS EXPERIENCE WITH ITS OWN CHAFFROC UNIT IS UNWARRANTED SINCE THAT UNIT IS COMPLETELY DISSIMILAR IN EVERY ASPECT OF ITS INTERIOR DESIGN TO THE HYCOR WARHEAD.

THE DETERMINATION OF RESPONSIBILITY IS A MATTER OF JUDGMENT. IN THE ABSENCE OF A SHOWING THAT THE CONTRACTING OFFICER ACTED IN BAD FAITH OR WITHOUT A REASONABLE BASIS FOR THE DETERMINATION OF RESPONSIBILITY, WE WOULD NOT BE JUSTIFIED IN OBJECTING TO SUCH AFFIRMATIVE DETERMINATION. SEE 49 COMP. GEN. 553 (1970). ALTHOUGH IT WAS ORIGINALLY CONTEMPLATED THAT A SOLE-SOURCE AWARD WOULD BE MADE TO HYCOR, UPON SUBSEQUENT ADVICE FURNISHED BY TECHNICAL PERSONNEL WHO WERE FAMILIAR WITH THE CAPABILITY OF GAC, THE CONTRACTING OFFICER DETERMINED THAT GAC WAS RESPONSIBLE TO PERFORM THE CONTRACT. THEREFORE, THE CONTRACTING OFFICER DOES NOT APPEAR TO HAVE ACTED IN BAD FAITH OR WITHOUT A REASONABLE BASIS FOR THE DETERMINATION.

FOR THE REASONS STATED HEREIN AND IN THE ACCOMPANYING LETTER TO THE SECRETARY OF THE NAVY, THE PROTEST IS DENIED.