Goodyear Tire & Rubber Co. B-247363.6 October 23, 1992 72 Comp.Gen. 28
B-247363.6: Oct 23, 1992
Procurement Bid Protests GAO procedures Protest timeliness 10-day rule Procurement Contractor Qualification Approved sources Qualification Standards The General Accounting Office will consider timely protest that agency improperly waived certain qualification requirements in listing the awardee's product on a qualified products list in the context of a protest of a sealed bid procurement for the qualified product. Procurement Contractor Qualification Approved sources Qualification Waiver In a sealed bid procurement for tank track components that were required to be qualified for inclusion on a qualified products list (QPL) prior to award. A protest allegation that award was made to an offeror whose product was improperly placed on the QPL is sustained where the agency waived material qualification requirements to qualify the awardee's product.
Goodyear Tire & Rubber Co. B-247363.6 October 23, 1992 72 Comp.Gen. 28
Procurement Bid Protests GAO procedures Protest timeliness 10-day rule Procurement Contractor Qualification Approved sources Qualification Standards The General Accounting Office will consider timely protest that agency improperly waived certain qualification requirements in listing the awardee's product on a qualified products list in the context of a protest of a sealed bid procurement for the qualified product. Procurement Contractor Qualification Approved sources Qualification Waiver In a sealed bid procurement for tank track components that were required to be qualified for inclusion on a qualified products list (QPL) prior to award, a protest allegation that award was made to an offeror whose product was improperly placed on the QPL is sustained where the agency waived material qualification requirements to qualify the awardee's product. Procurement Contractor Qualification Approved sources Alternate sources Approval Procurement Contractor Qualification Approved sources Alternatives Pre-qualification Testing Although Department of Defense (DOD) Federal Acquisition Regulation Supplement Sec. 225.872-3(f)(1) and a memorandum of understanding with a qualifying country require a DOD agency to consider for qualification the products of a qualifying country that have been tested by that country, the agency may not accept the product for listing on a qualified products list (QPL), based on the qualified country's certified test results, unless the DOD agency is reasonably assured the tests were performed in accordance with the QPL requirements.
We sustain the protest.
The IFB was issued on December 9, 1991, with a bid opening date of January 14, 1992, and contemplated the award of a 12-month requirements contract for pin assemblies with bushings for delivery to RRAD to be used in rebuilding the T-156 track shoe. The T-156 track shoe is used on the Abrams Main Battle Tank. RRAD is currently the only facility rebuilding T-156 track shoes. In rebuilding the track shoes, RRAD replaces the old pin assemblies with new ones. Because the pin assembly affects the tank's mobility, it is considered a critical item.
The IFB provided that the pin assemblies must conform to MIL-T-11891B, amendment 3, and be previously tested and approved for inclusion on the applicable qualified products list (QPL) by the U.S. Army Tank-Automotive Command (TACOM). The IFB contained the standard "Qualifications Requirements" clause, as set forth in Federal Acquisition Regulation (FAR) Sec. 52.209-1, which provides notice that award is limited to bidders offering products on a specified QPL. The clause also states that (1) products must be qualified at the time of award whether or not the product is actually listed on the QPL and (2) if, after the award, the contracting officer learns that an applicable qualification requirement has not been met at the time of award, the contracting officer may either terminate the contract for default or allow perfor- mance if that is in the government's best interest and adequate consideration is offered. Goodyear's and Varec's products were identified in the IFB as qualified; however, at bid opening, only Goodyear's product was listed on the QPL. Although Varec's product had previously been considered qualified by TACOM, the product was actually added to the QPL on January 23.
At the January 14 bid opening, the following bids were received from Goodyear, Varec, and Florida Ordnance Corporation (FOC):
FOC $1,065,289.20 Varec 1,100,558.91 Goodyear 1,104,157.86
The Army notified FOC that it intended to reject its bid because FOC's product had not been qualified, although it was currently undergoing qualification testing. FOC protested to our Office on January 9, but withdrew its protest based upon a January 28 agreement with the agency that the agency would allow FOC an additional 8 weeks to qualify its product.
On January 22, Goodyear learned that the qualification tests of Varec's product had been performed and certified by the Belgian ministry of defense. On January 22, Goodyear protested Varec's qualification to us, arguing that Varec's product should not have been included on the QPL because it had not been qualified in accordance with MIL-T-11891B and applicable Department of Defense (DOD) requirements. Goodyear withdrew its protest to file an agency-level protest with the Army on February 4, within 10 working days of the date that Goodyear learned how Varec's product had been qualified. The Army denied Goodyear's protest on March 4, and Goodyear refiled its protest with us on March 17, within 10 working days of the denial of its agency-level protest. We dismissed Goodyear's protest because Goodyear had not protested an award to FOC, which was undergoing qualification testing, and, therefore, a protest of an award to Varec, the second low bidder, was premature. Goodyear requested reconsideration of the dismissal, which we denied on March 23.
On April 13, the Army determined that FOC's bid could not be accepted for award because FOC's product had yet to be qualified, and made award to Varec. FOC and Goodyear filed timely protests with us contesting, respectively, the rejection of FOC's bid and the award to Varec. On May 26, we closed Goodyear's protest without action based upon Goodyear's and the Army's agreement that the agency would suspend Varec's performance of the contract while we decided the issue of Varec's acceptability for other procurements involving the same parties and issue. Subsequently, the other protests were dismissed (because one procurement was canceled and Goodyear received an award under the other). On June 17, Goodyear timely refiled with us its protest against the qualification of Varec's product under the IFB. Performance of Varec's contract continues to be suspended pending our decision in this matter. On August 31, we denied FOC's protest in part and dismissed it in part in Florida Ordnance Corp., B-247363.4, Aug. 31, 1992, 92-2 CPD Para. 138.
As an initial matter, the Army argues that we should dismiss Goodyear's protest because, given our role in ensuring that requirements for full and open competition are met, we should not review protests that would result in a restriction of competition. The agency also argues that we should dismiss the protest because qualification requirements are for the benefit of the government and therefore the agency should:
"[B]e allowed to routinely grant waivers to increase competition . . . where . . . the agency is satisfied that the products offered will meet the [g]overnment's minimum needs, even if there may be some flaw in the qualification process."
Finally, both the Army and Varec contend that the process of qualifying products for inclusion on a QPL involves an offeror's responsibility and therefore the qualification of Varec's product was an affirmative determination of Varec's responsibility, which we should not review, given Goodyear's failure to allege fraud or bad faith by agency officials or that definitive responsibility criteria have not been met. See 4 C.F.R. Sec. 21.3(m)(5) (1992). We disagree that Goodyear's protest is dismissable for any of the reasons advanced by the agency or Varec.
The purpose of the QPL system is to allow the efficient procurement of items which require substantial testing to demonstrate compliance with specification requirements. D. Moody & Co., Inc.; Astronautics Corp. of Am., 55 Comp. Gen. 1 (1975), 75-2 CPD Para. 1. The procurement of qualified products is a two-step process in which (1) products are tested for compliance with specifications and, if found in compliance, listed on the appropriate QPL, and (2) products on the QPL may be then procured. T.G.L. Rubber Co., Ltd., B-206923, Sept. 20, 1982, 82-2 CPD Para. 239. While the QPL system is intended to be used prior to, and independent of, any specific procurement action, see FAR Sec. 9.203(a), it nevertheless is "one facet of the integral system of procuring qualified products." D. Moody & Co., Inc.; Astronautics Corp. of Am., supra.
The use of a QPL in the procurement of qualified products is inherently restrictive of competition. McGean-Rohco, Inc., 64 Comp.Gen. 752 (1985), 85-2 CPD Para. 140. Nonetheless, where, as here, the government's minimum needs require the qualification of products for inclusion on an applicable QPL (and statutory and regulatory requirements have been satisfied), the restriction of a procurement to a product on the QPL is not improper. See 51 Comp.Gen. 47 (1971), where we found that:
"[S]ince the best interests of the [g]overnment require maintenance of full and free competition commensurate with the [g]overnment's needs, we are of the opinion that while regulations implementing the use of [QPLs] should be interpreted to insure procurement of products meeting the [g]overnment's needs they should not be interpreted in such a manner as to place unnecessary restrictions on competition." Id. at 49.
In this regard, we will not consider protests against an agency's determination not to restrict a procurement to products contained on a QPL. See Anderson Power Prods., B-227502, Sept. 10, 1987, 87-2 CPD Para. 230.
Here, however, the Army has determined that its minimum needs require the procurement of a product that has been qualified for inclusion on a QPL, and no objection, timely or otherwise, has been raised to this determination. Accordingly, award should be made only to a bidder whose offered product, at the time of award, has been tested and properly qualified for inclusion on the QPL; in this regard, where an IFB requires a qualified product, a bid that offers a product that has not been tested and approved for listing on the appropriate QPL is nonresponsive to a material IFB requirement and may not be accepted. See 40 Comp.Gen. 352 (1960); Wirt Inflatable Specialists, Inc., B-204673, Dec. 31, 1981, 81-2 CPD Para. 523.
Contrary to the Army's arguments, the crux of Goodyear's protest is not a challenge to the scope of the competition but to the agency's award to a bidder whose offered product allegedly was not properly included on the QPL. Goodyear's protest concerns the fairness of the Army's conduct of this procurement, that is, whether the agency treated bidders unequally by relaxing a material solicitation requirement for one bidder. In this regard, we have found that:
"There can be no question that a product prequali- fication provision in an invitation goes to the essence of the procurement, and we have held so in similar situations. . . . It is fundamental that the award of a contract . . . must be made upon the same specifications offered to all bidders, and that an award pursuant to a bid deviating substantially from the advertised specifications does not result in a valid and binding contract." 45 Comp.Gen. 71, 75 (1965). [Citations omitted.]
Nevertheless, the Army argues that we should not consider Goodyear's protest because qualification requirements are for the benefit of the government and therefore the agency should be allowed to waive the qualification requirements as to Varec in order to foster increased competition.
It is true that qualification requirements are considered to be for the benefit of the government, see McGean-Rohco, Inc., supra, and that a procuring agency, in setting forth its minimum needs in a solicitation, may choose to waive in total or in part a product's qualification requirements. This does not mean, however, that an agency can waive the qualification requirements stated in a solicitation without notice and an opportunity to others to satisfy the agency's new requirements. See 45 Comp.Gen., supra; D. Moody & Co., Inc.; Astronautics Corp. of Am., supra. The essence of a fair competitive procurement system is that bidders and offerors will be treated equally, and we will thus consider a protest, such as Goodyear's, that contends that an agency is treating bidders unequally.
We also disagree with the Army and Varec that Goodyear's protest is actually a challenge to the agency's affirmative determination of Varec's responsibility. The issue of whether an item was properly included on a QPL does not concern a bidder's or offeror's responsibility. See American Athletic Equip. Div., AMF Inc., 58 Comp.Gen. 381 (1979), 79-1 CPD Para. 216. Responsibility refers to a bidder's or offeror's apparent ability and capacity to perform all contract requirements. See FAR Sec. 9.104; Sage Assocs. Gen. Contractors, Inc., B-235497, Aug. 15, 1989, 89-2 CPD Para. 141. The inclusion of an item on a QPL, rather than involving the ability or capacity of an offeror to perform contract requirements, involves the testing of a product to demonstrate compliance with specification requirements. American Athletic Equip. Div., AMF Inc., supra. While it is true that the ability of an offeror to supply a qualified product concerns an offeror's responsibility, the actual qualification of the product concerns its acceptability and eligibility for award under the solicitation. See Master Power, Inc., B-238468.2, Nov. 28, 1990, 90-2 CPD Para. 434. Since Goodyear does not challenge Varec's ability or capacity to produce a qualified pin and bushing assembly, but objects to the qualification of Varec's product, its protest does not concern the agency's affirmative determination of Varec's responsibility.
As stated above, Goodyear protested that Varec's product was not properly qualified under MIL-T-11891B, which was an IFB requirement. MIL-T-11891B states the agency's requirements for two types of rubberized track shoe assemblies for use on military track vehicles and sets forth the tests that track shoe assemblies, sets, pads, pins and bushings must satisfy to be found qualified. Generally, an offeror's rubber tread and bushing compound must satisfy (1) road tests, (2) laboratory tests, and (3) bushing qualification tests. In pertinent part, MIL-T-11891B provides that the bushing qualification tests shall be conducted on eight bushings (for each rubber compound for which qualification is sought) by the government on an approved test machine and that:
"Test specimens shall be subjected to radial load- ing of 1800 psi [pounds per square inch] at a frequency of 64 cpm [cycles per minute] and to torsional twist of [plus or minus] 15 [degrees] at a frequency of 256 cpm. The duration of the cyclic radial load relative to the cyclic torsional deflection shall be maintained on a [1 to 4] ratio with failure defined as the point the total radial deflection reaches 0.144 inches."
The bushing qualification test is designed to test the overall reliability of bushings under conditions similar to those applied in actual service use. Bushings that cannot satisfy the fatigue requirements of MIL-T-11891B could fail more often than permitted by the agency's needs.
The record shows that Varec's bushings, pads, and track shoes were subjected to qualification tests in 1983 in Belgium under the supervision of the Belgian military, and that MIL-T-11891B was the specification to which the rubberized pads, track shoes, and bushings were tested. No Army or other United States government official was present during the qualification testing of Varec's product. In 1989, the Belgian ministry of defense certified that Varec's track shoes, pads, bushings and wheels for tracked vehicles satisfied the quality requirements of Allied Quality Assurance Publication (AQAP)-4. In 1990, Varec submitted to TACOM the certified test results and detailed test data of the Belgian military's testing of its bushings, pads, and track shoes and sought inclusion on the QPL. On April 16, 1991, TACOM approved Varec's product for inclusion on the QPL on the basis of TACOM's review of the certified test data. As stated above, Varec's product was not actually added to the QPL until January 1992.
Goodyear primarily challenges the inclusion of Varec's product on the QPL because Varec's bushings, allegedly, were not properly qualified under the requirements of MIL-T-11891B, but were instead subjected to significantly less stringent testing. Goodyear also contends that Varec failed to satisfy MIL-T-11891B's road test requirement because the wear on Varec's product's rubber pad exceeded the maximum allowable.
MIL-T-11891B, as incorporated in the IFB, requires that the bushing qualification tests be conducted by the government on an approved machine. Currently, the only approved test machine in the United States for bushing qualification is owned by the government and located at Keweenaw Research Center (KRC) at Michigan Technological University; KRC conducts the agency's bushing qualification tests for the government on the government-owned test machine. Video Transcript of Hearing (VT) at 17:39. Prior to its location at KRC, the bushing qualification test machine was located at and operated by TACOM. VT at 17:39-40. Goodyear's bushings were originally tested and qualified by TACOM when it had possession of the KRC test machine. VT at 15:16-17.
The KRC test machine performs the required bushing qualification test by applying a torsional load; that is, by twisting a pin with the rubber bushings at 256 cpm, where each cycle consists of the pin being twisted in an arc between plus 15 degrees and minus 15 degrees. Simultan- eously, a radial load is applied; that is, pressure of 1800 psi is applied to the side of the pin at a frequency of 64 cpm. VT at 17:15-17. As stated above, MIL-T-11891B requires that the torsional load to radial load be maintained at a ratio of four cycles to one. The KRC test machine meets the foregoing requirements by means of a mechanical linkage that assures that the torsional and radial loads are applied in-phase. VT at 15:21-23, 15:31. That is, for every radial load cycle, the peak radial load of 1800 psi is experienced when the bushing is being subjected to the greatest torsional stress, that being at the plus or minus 15 degree deflection. Furthermore, the KRC test machine applies the radial load over a "square curve"; that is, the radial load builds to 1800 psi over one torsional cycle, is held at nearly 1800 psi for two torsional cycles, and is released over one cycle. VT at 15:19, 17:40. The shape of the radial load curve is important because it defines the amount of time that the load is applied to the bushings. VT at 16:41-42.
MIL-T-11891B does not specifically describe the operation of the bushing qualification test machine, other than to require that the torsional and radial load cycles be applied in a 4 to 1 ratio. It also does not provide any procedure for approving nongovernment-owned test machines, VT at 11:58, but MIL-T-11891B does expressly require that the bushing tests be conducted by the government on an approved machine.
During January 1984 through February 1988, revision B of MIL-T-11891 was superseded by revisions C and then D; these revisions allowed contractor-conducted bushing qualification tests so long as the tests were conducted on a test machine that the government had approved. To be approved under these revisions, a contractor-owned and/or operated test machine was required to operate as the government-owned machine operated; that is, the contractor's bushing test machine was required to apply the torsional and radial load cycles, in-phase, at a 4 to 1 ratio, and to apply the radial load in a square curve over two torsional cycles.
During this period, Goodyear, although its product was already qualified and on the QPL, received approval for its own bushing qualification test machine under revision D. VT at 12:05. To obtain this approval, Goodyear was required to demonstrate that its machine, just like the government-owned machine, applied the torsional and radial load cycles in-phase and that the radial load was applied in square curve over two torsional cycles. VT at 15:20. In this regard, the agency provided to Goodyear a printout, dated March 4, 1977, from its own test machine that showed the application of a square radial load curve over two torsional cycles and in-phase cycle loading; this printout identified MIL-T-11891B as the applicable military standard. Revision D was rescinded in February 1988 because the government found that no contractors, including those previously qualified under revision B, could satisfy the more stringent road test requirement contained therein--a requirement that was not related to the bushing qualification test requirements. VT at 14:59-15:00. After 1988, MIL-T-11891B was the applicable military standard, and was in effect at all relevant times concerning Varec's qualification tests in 1983 and source approval in 1991. VT at 12:07, 15:00.
As noted above, the Army accepted, without witnessing, Varec's bushing qualification test results from Varec's own test machine, which had not been approved by the Army, despite the specific requirements of MIL-T-11891B that tests be conducted by the government on an approved machine. VT at 11:30. For the reasons stated below, we find, from our review of the record, that the qualification test results of Varec's bushings demonstrate that the test was not conducted as contemplated by MIL-T-11891B.
First, we conclude that Varec bushing test was not conducted with in-phase loading. The certified test results provided to the agency show that for six of the required eight bushings the radial and torsional cycles were not maintained in an exact 4 to 1 ratio. This demonstrates that the cycles were not applied in-phase, since if the respective loads were applied in-phase, the 4 to 1 ratio would necessarily have been maintained because of the testing machine's mechanical linkage. VT at 15:40. Varec, although responding to a number of challenges concerning its testing machine and bushing qualification tests (i.e., the age and temperature of the test bushings), does not assert that the test machine that it used applied the radial and torsional loads in-phase; instead, Varec asserts that in-phase loading is not a requirement of MIL-T-11891B.
We also are unpersuaded that Varec's bushing test machine applied the radial load as a square curve over two torsional cycles, even though Varec, in comments to the agency after our hearing, asserted, for the first time, that its test machine applied a square radial load curve similar to that of the government-owned test machine, and provided a hand-drawn illustration of its radial load curve, dated July 10, 1992, that it asserts was applied in qualifying its bushings. Varec repeated this assertion to us in an affidavit that included the hand-drawn curve.
Varec has produced no contemporaneous evidence of the radial load curve actually applied by its test machine in 1983. In contrast, the evidence produced to substantiate the radial load curves applied by Goodyear's and the government's test machines are printouts generated by the test machines themselves. As noted by Goodyear, it would be impossible to accurately plot, without an electronic recording device, pressure versus time for a load that completes its cycle in less than 1 second, as is the case for the cycles on the bushing test machines.
In addition, the test data provided by Varec for its bushing qualification tests call into question whether a square radial load curve was applied. Unlike the results of testing on Goodyear's bushings, Varec's bushings, although tested over more cycles than required, showed minimal signs of deflection (or fatigue). VT at 15:50-57. Varec and the agency argue that Varec's bushings must have evidenced only nominal deflection because the bushings are so much better than required by the agency's qualification test standards. The test results show that Varec's bushings showed nominal deflection over the life of the test, while the test results for Goodyear's qualified bushings showed a steady deflection over the life of the test until eventual failure well beyond the required test limits. We concur with the testimony of Goodyear's engineer that the most likely explanation for this is not that Varec produced "super" bushings, but that the Varec bushings were not tested in accordance with MIL-T-11891B. VT at 15:56-57, 16:13-14.
Finally, Varec does not state how in 1983 it knew the shape of the required radial load curve to be applied or that it was to be applied over two torsional cycles, since Varec's qualification tests were conducted prior to the release of the C and D versions of MIL-T-11891, which for the first time specifically informed bidders of the required shape of the radial load curve. Also, there is no representation from the Belgian ministry of defense that a square radial load curve was applied by Varec's test machine during the qualification tests of Varec's bushings, although an affidavit has been provided from a member of the Belgian military who witnessed the qualification tests, which generally states that Varec passed the bushing tests required by MIL-T-11891B. Given the lack of supporting evidence that the tests were conducted in accordance with the agency's minimum requirements, we find that Varec's qualification tests were less stringent than those required of other bidders.
The Army and Varec argue that MIL-T-11891B does not expressly require that the radial and torsional loads in the bushing qualification test be applied in-phase or that the radial load be applied as a square curve. However, as noted above, MIL-T-11891B contemplated that all bushing qualification tests would be conducted by the government on its own test machine. Thus, it must be kept in mind that in interpreting the requirements of MIL-T-11891B, these requirements are based on testing on a particular government machine. Since the government-owned test machine applies the radial and torsional loads in-phase and the radial load on a square curve, and the Army does not contend that its own bushing test machine tests for characteristics beyond the requirements of MIL-T-11891B, we find that MIL-T-11891B contemplates that the bushing qualification test be applied in-phase and that the radial load be applied as a square curve.
Consistent with the foregoing interpretation of the MIL-T-11891B qualification testing requirements, Goodyear contends that the Defense Standardization Manual DOD 4120.3-M (August 1978), "Defense Standardization and Specification Program Policies, Procedures and Instructions," and the Defense Standardization and Specification Program Manual SD-6 (June 1986), "Provisions Governing Qualification," provide that qualification testing of foreign-made products be done in the United States at an approved facility and that:
"Test data generated as a result of qualification testing in accordance with SD-6, Provisions Governing Qualification, shall be the only test data evaluated during the qualification process. Test data generated prior to authorization of, or outside the purview of, qualification tests (e.g., from first article tests unless generated under the cognizance of the qualifying activity) may not be used in lieu of qualification test data."
DOD 4120.3-M, which controls the QPL process, states that it is "mandatory for use by all DOD activities," and FAR Sec. 9.203(c) provides that "[i]nstructions concerning qualification procedures" are included in DOD 4120.3-M. As Goodyear points out, if Varec's bushings were tested in accordance with DOD 4120.3-M and MIL-T-11891B, they would have been tested on the KRC test machine and subjected to radial and torsional cycle loading that was in-phase and to a square radial load curve.
The record shows that the Army, in accepting the Belgian certified test results, did not comply with the above provisions of DOD 4120.3-M. The Army contends, however, that it was required to accept Varec's certified test results, despite the failure of Varec to obtain the agency's prior approval to conduct qualification testing, because of a memorandum of understanding (MOU) between the United States and Belgian governments that required full consideration of Varec's application for qualification and because DFARS Sec. 225.872-3(f)(1) required that the agency:
"Consider the adequacy of qualifying country ser- vice testing on a case-by-case basis. Departments or agencies that must limit solicitations to sources whose items have been service tested and evaluated by the department/agency shall consider supplies from qualifying country sources that have been tested and accepted by the qualifying country for service use."
In our view, the Belgian MOU and DFARS Sec. 225.872-3 permit the agency to accept certified test results from the Belgian ministry of defense in some circumstances. Specifically, DFARS Sec. 225.872-3(f) instructs the agency to consider the adequacy of qualifying country testing on a case-by-case basis and to consider the acceptability of supplies from sources that have been tested and accepted by the qualifying country. The MOU also requires that the agency give full consideration to applications for qualification.
However, this regulation and MOU do not provide, or imply, automatic acceptance of qualification test results certified by Belgian authorities. See T.G.L. Rubber Co., Ltd., supra (TACOM reasonably refused to qualify the protester's product despite test results certified by the Israeli ministry of defense). Rather, DFARS Sec. 225.872-3(f) and the MOU only allow the Army to accept, for the purpose of evaluating a product for potential qualification for listing on a QPL, the certified test results of the Belgian ministry of defense if the Army can be reasonably assured that the tests were performed in accordance with its requirements. In this case, since Varec has been permitted to test its own bushings on a nongovernment machine, contrary to the express requirements of DOD 4120.3-M and MIL-T-11891B, the Army was required to ensure that Varec and the Belgian ministry of defense were aware of the operational requirements that the bushing qualification test must satisfy and that the tests were actually performed in accordance with those requirements before the Army qualified the product for listing on the QPL.
As discussed above, the record here shows that Varec and the Belgian ministry of defense were not aware of the requirement that in-phase cycle loading be performed or that they were aware of the requirement that the radial load curve be applied as a square curve over two torsional cycles. The record also shows that these deviations from the qualification tests contemplated by MIL-T-11891B, to which all other qualified products have been subjected, are material. In this regard, the Army admits that if the torsional and radial load cycles are not maintained in-phase, the bushing qualification test is less severe than if the loads are applied in-phase.
Nevertheless, the agency argues that even if Varec's bushings were not tested with the torsional and radial load cycles being maintained in a 4 to 1 ratio and in-phase, the data presented was sufficient for the agency to conclude that Varec's bushings would satisfy its requirements. Specifically, the agency argues that Varec's bushings passed qualification testing over approximately 175,000 cycles while MIL-T-11891B only requires testing over 150,000 cycles. In the agency's view, the longer test ensures that, even though the loads were not applied in-phase, the maximum pressure on the bushing was applied often enough to be equivalent to in-phase testing over 150,000 cycles.
The problem with the agency's analysis is that it assumes that the radial load pressure applied on Varec's bushings was by a square curve over two torsional cycles. If such a square radial load curve were not applied during the test, then the maximum pressure on the bushing would occur much less often than assumed by the agency. Moreover, the agency's chief engineer testified that the shape of the radial load curve was probably more important than the in-phase requirement, and that there would be a difference between test results of bushings that received the radial load pressure over a triangle curve rather than a square curve. VT at 17:25, 17:35. As noted above, we are unpersuaded that a square radial load curve was used to test Varec's bushings. Under the circumstances, although Varec's bushings passed tests that occurred over 175,000 cycles, rather than the required 150,000 cycles, we do not find that this provides a reasonable basis to conclude that Varec's bushings would similarly pass proper testing on a test machine that used the much more stringent testing procedure of applying the torsional and radial load cycles on a 4 to 1 ratio, in-phase, and applying the radial load as a square curve. In this regard, the agency's witnesses testified that they had no way of translating the Varec test results into results that could be expected from the KRC test machine without more evidence comparing the two test machines. VT at 13:52, 17:27.
The Army argues that even if it waived certain QPL requirements for Varec, Goodyear was not prejudiced thereby. We will not disturb a procuring agency's award absent a prejudicial violation of procurement laws or regulations. MTS Sys. Corp., B-238137, Apr. 27, 1990, 90-1 CPD Para. 434. As noted above, the use of a QPL is inherently restrictive of competition, but is properly permitted where a QPL is necessary to satisfy an agency's minimum needs. Here, the Army consistently represents that the acquisition of qualified tank components, as included on the QPL, is a firm agency requirement. Nevertheless, as we found above, the Army has waived certain QPL requirements for only Varec. Other firms may have sought to compete if the same requirements were to be waived for all bidders; for that matter, FOC may well have been able to qualify its product in time to receive award if the same bushing qualification requirements were waived for it. Furthermore, Goodyear contends that it would have offered a much lower bid price had it known that the Army was going to waive certain bushing qualification test requirements "to account for the fact that it would be competing with companies that had not been required to meet or maintain the QPL requirement, which involves substantial expense." Given the fact that FOC took more than 6 months to find a rubber compound that would satisfy the bushing qualification tests performed at KRC, see Florida Ordnance Corp., supra, we have no basis to question Goodyear's assertion. Under these circumstances, we find that Goodyear was prejudiced by the Army's waiver of certain qualification requirements without amending the solicitation or QPL. See MTS Sys. Corp., supra.
In sum, we find that the agency had no reasonable basis for qualifying Varec's product and including it on the QPL. Since Varec's product was not properly on the QPL, the agency's acceptance of Varec's bid under the IFB was improper. See 40 Comp.Gen., supra (award may not be made to a bidder listed on a QPL where the bidder did not meet certain qualification requirements; agency may resolicit requirement based on any relaxed requirements).
Goodyear also contends that Varec's rubber tread compound failed to satisfy the road test requirement of MIL-T-11891B because the wear on its rubber pad exceeded the maximum allowable. MIL-T-11891B provides that after the road test "the original total bearing area of rubber chevrons or pads shall be reduced by not more than 7 percent." Varec's certified test data shows that its rubber pads wore 7.35 percent after the road test. The Army agrees that Varec's test data shows that its pad wear exceeded the maximum allowable by MIL-T-11891B, but contends that it was nevertheless acceptable because the pad wear test was not particularly precise and Varec's results were close enough to that required. VT at 17:09.
The record is unclear as to the relative precision or imprecision of the pad wear test. Notwithstanding the Army's contentions regarding the imprecision of the test, we note that Varec's test data uses fairly precise numbers (to the hundredth decimal point) to express the pad wear shown. The record is also unclear as to the materiality of this devia- tion from the MIL-T-11891B requirements. Furthermore, the Army informs us that the ground pressure exerted by the test vehicle is one significant factor in pad wear, VT at 17:13, but the record is unclear regarding the ground pressure applied during Varec's testing, although there was some testimony that Varec's testing was done on a Leopard tank that applied less ground pressure than an M-60 tank would apply. VT at 17:47. Given the lack of clarity in the record, we do not address this issue. If the agency, however, resumes qualification testing of Varec's bushings, it should reconsider whether Varec has indeed satisfied the pad wear requirements of MIL-T-11891B.
We recommend that the agency remove Varec's product from the QPL until the product is properly qualified, as explained in this decision. We also recommend that the agency terminate Varec's contract for the convenience of the government and make award to Goodyear, if the agency finds that Goodyear's price is reasonable. We also find that Goodyear is entitled to its costs of filing and pursuing the protest, including reasonable attorneys' fees. 4 C.F.R. Sec. 21.6(d)(1). Goodyear should submit its certified claim for its protest costs directly to the agency within 60 working days of receipt of this decision. 4 C.F.R. Sec. 21.6(f)(1).
The protest is sustained.
1. FOC's product was qualified approximately 2 weeks after its bid was rejected by the Army.
2. The Army and Goodyear have entered a number of agreements by which Goodyear has withdrawn timely, pre-bid opening protests of the qualification of Varec's product under other solicitations for tank track components.
3. FOC was unable to pass the bushing qualification test and thus to qualify its product within the time allowed by the agency, and we found that the agency did not act unreasonably in refusing to allow FOC additional time to pass the qualification testing.
4. In the agency's view, if we were to sustain Goodyear's protest, this would effectively result in a sole-source award to Goodyear. We note that FOC's product has now been qualified and presumably FOC will seek to compete for future awards of tank track components, such as the pin and bushing assembly.
5. The Army cites Hiltronics Corp., B-241450 et al., Jan. 18, 1991, 91-1 CPD Para. 57, in support of its argument that QPL requirements can be waived. In that case, we found that the agency could waive qualification requirements to obtain competition where the QPL specifically provided for such waiver and the agency would be receiving a first article that could be tested for specification compliance. Unlike Hiltronics Corp., the IFB and QPL here do not specifically provide for a waiver of the qualification requirements or request first articles.
6. As noted above, the Army has consistently maintained that the QPL requirements represent its minimum requirements.
7. AQAP-4, which is promulgated by the NATO International Staff-Defence Support Division, provides inspection system requirements that are roughly equivalent to the inspection system requirements of MIL-I-45208A. In pertinent part, AQAP-4 requires contractors to have the latest applicable drawings and specifications for use in inspection testing.
8. A hearing was conducted pursuant to 4 C.F.R. Sec. 21.5 to receive testimony regarding the requirements of MIL-T-11891B, the agency's review of Varec's certified test data, and whether Varec's product satisfied the requirements of MIL-T-11891B for inclusion on the QPL.
9. A square curve could also be described as a flat curve where the radial load is applied at a nearly constant level over two torsional cycles. In a "triangle curve," on the other hand--which Goodyear asserts was likely used in the conduct of Varec's bushing tests--the radial load builds rapidly to a peak and then is rapidly taken off, rather than being maintained at a required peak load for several cycles.
10. Revisions C and D contained other detailed instructions concerning the required operation of the bushing qualification test machine, i.e., the use of a flex plate to compensate for a machines given flex resistance. VT at 15:27.
11. While the Army asserts that the Varec bushing test was sufficiently close to a 4 to 1 ratio to be acceptable to the Army, the primary point is, as detailed below, that this evidences that the Varec bushing qualification test was materially less stringent than that contemplated by MIL-T-11891B.
12. As noted above, FOC was unable to pass the bushing qualification test on the government-owned test machine in time to receive award under the IFB.
13. The agency states that the intent of DOD 4120.3-M and SD-6 is to ensure the reliability of qualification test data.
14. The MOU between the United States and Belgium is set out as appendix T:139 to the DOD FAR Supplement (DFARS).
15. We note in this regard that DFARS Sec. 225.872-4(a) requires that qualifying country sources be responsive to the terms and conditions of solicitations, such as QPL requirements.
16. We note that another bidder's (FOC's) bushings were tested to these stringent requirements on the government-owned test machine and failed to qualify in time to receive award under this IFB. See Florida Ordnance Corp., supra.
17. The agency specifically qualifies this argument by this assumption.
18. There also was testimony that the bushing test results would vary from machine to machine, even if the tested bushings are of the same rubber compound. VT at 16:59-17:00.
19. In this regard, the Army has informed us that it currently has applications for qualification of tank track components from other MOU signatory countries and that it intends to qualify these countries' products in the same fashion that it qualified Varec's.
20. In any case, as noted above, Goodyear has withdrawn several other timely, pre-bid-opening protests of the agency's inclusion of Varec's product on the QPL based upon the parties' agreement to await our decision in this protest.