B-147758, APR. 16, 1962

B-147758, APR. 16, 1962

TO THE J-F MACHINE, DIESEL AND ELECTRONICS, INC:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 2, 1962, STATING THE BASIS FOR YOUR PROTEST AGAINST AWARD OF A CONTRACT TO CURTISS-WRIGHT CORPORATION UNDER REQUEST FOR PROPOSAL NO. P.R. 622A-13163, ISSUED ON JULY 13, 1961, BY THE BUREAU OF SHIPS, DEPARTMENT OF THE NAVY, WASHINGTON, D.C.

THE REQUEST COVERED TWO 250 KILOWATT, DIRECT CURRENT, DIESEL ENGINE DRIVEN GENERATOR SETS, TOGETHER WITH RELATED SUPPLIES AND SERVICES, WHICH CONSTITUTE THE MAIN PROPULSION POWER SYSTEM OF A DEEP SUBMERGENCE SUBMARINE BEING CONSTRUCTED AT THE PORTSMOUTH NAVAL SHIPYARD. YOU CONTEND THAT THE NAVY ERRED IN CONSIDERING THE ENGINE YOU PROPOSED AS BEING OF UNCONVENTIONAL DESIGN AND EXPERIMENTAL. YOU STATE THAT DEVELOPMENT OF YOUR ENGINE BEGAN IN 1940, PARTLY FINANCED BY THE NAVY, AND THAT YOU WERE AWARDED A CONTRACT FOR THREE OF SUCH ENGINES IN 1944 AFTER DEMONSTRATION OF A PROTOTYPE MODEL. YOU FURTHER STATE THAT THE ENGINES WERE COMPLETED AND READY FOR TEST WHEN THE NAVY CANCELLED THE CONTRACT DUE TO THE END OF THE KOREAN WAR. YOU ADD THAT THE NAVY PAID A CANCELLATION SETTLEMENT OF $36,000 WHICH RESULTED IN A LOSS OF $90,000 TO YOUR FIRM.

YOU CONTEND THAT THE CURTISS-WRIGHT ENGINE WAS DEVELOPED IN A DIFFERENT CONFIGURATION FOR THE NAVY BY PACKARD UNDER THE GERMAN LICENSE AND THAT CURTISS-WRIGHT HAS NEVER PRODUCED A DIESEL ENGINE. IN ADDITION, YOU CONTEND THAT THE CURTISS-WRIGHT ENGINE WEIGHS 15 TO 20 POUNDS PER HORSEPOWER AS OPPOSED TO 2 POUNDS PER HORSEPOWER FOR YOUR ENGINE AND THAT THE TOTAL WEIGHT OF YOUR ENGINE WITH A STANDARD GENERATOR IS 3,800 POUNDS WHILE THE CURTISS-WRIGHT ENGINE WITH THE SAME GENERATOR WEIGHS 10,000 POUNDS, EXCEEDING THE SPECIFIED WEIGHT BY 2,300 POUNDS.

YOU CONTEND FURTHER THAT THE NAVY WAS INCORRECT IN STATING THAT YOUR PROPOSED ENGINE HAD NOT BEEN BUILT AND TESTED, THAT NO INFORMATION WAS AVAILABLE CONCERNING DETAILS OF YOUR PROPOSED ENGINE'S FRESH WATER SYSTEM, AND THAT SPECIFIC OPERATIONS CURVES AND DATA WERE NOT FURNISHED. YOU INSIST THAT VOLUMINOUS TEST DATA AND SCIENTIFIC ANALYSES COVERING 15 YEARS OF RESEARCH AND DEVELOPMENT WERE FURNISHED, AS WELL AS NUMEROUS OPERATING CURVES AND TEST DATA. YOU CONCLUDE THAT THE GOVERNMENT SHOULD NOT SPEND MORE MONEY FOR AN OBSOLETE ENGINE BASED ON FOREIGN PATENTS AND LICENSE WHEN IT COULD SPEND LESS MONEY FOR A HIGHLY ADVANCED AND MODERN MOVER.

THE RECORD INDICATES THAT YOU OFFERED TO FURNISH THE GENERATOR SETS AT A PRICE LOWER THAN THE PRICE OFFERED BY CURTISS-WRIGHT. YOUR PROPOSAL WAS REVIEWED AND A TECHNICAL CONFERENCE WAS HELD BETWEEN YOU AND THE BUREAU OF SHIPS ON SEPTEMBER 19, 1961, AFTER YOU HAD BEEN INFORMED OF THE POINTS TO BE DISCUSSED. THE REASONS STATED BY THE NAVY DEPARTMENT FOR REJECTING YOUR LOW PROPOSAL ARE SUMMARIZED AS FOLLOWS:

"IN SUM, MR. FIEDLER DID NOT SUBMIT THE REQUIRED CURVES FOR THE BACK PRESSURE AND INTAKE VACUUM SET FORTH IN THE SPECIFICATIONS, WHICH CURVES ARE VITAL FOR EVALUATION OF ANY ENGINE FOR SUBMARINE SERVICE BECAUSE OF THE SPECIAL CONDITIONS ENCOUNTERED IN SUCH SERVICE; HE DID NOT SUPPLY A WEIGHT BREAKDOWN OF ENGINE, GENERATOR AND ACCESSORIES; HE DID NOT GIVE A DETAILED DESCRIPTION OF HIS PROPOSED UNIT INCLUDING FRESH WATER COOLING SYSTEM. INSTEAD HE SHOWED HE HAD NEVER BUILT AN ENGINE IN THE CONFIGURATION PROPOSED, AND THERE WERE NUMEROUS QUESTIONABLE ASPECTS HE WOULD HAVE TO LOOK INTO. THE BASIC FIEDLER DESIGN MAY HAVE ASPECTS WITH FUTURE POTENTIAL. TO PUT THE PROPOSED ENGINE IN ITS PRESENT UNEVALUATED AND UNTRIED STATE INTO THE AGSS 555 AS THE MAIN PROPULSION PLANT WOULD JEOPARDIZE THE MISSION OF THIS SUBMARINE AND THE LIVES OF ITS CREW. SUCH A RISK IS COMPLETELY UNJUSTIFIED AND UNNECESSARY.'

THE NAVY CITES SEVERAL CONTRACTS OVER THE PAST FEW YEARS WHERE CURTISS- WRIGHT HAS PERFORMED WORK OF A NATURE SIMILAR TO THE WORK REQUIRED HERE. SPECIFICALLY MENTIONED ARE CONTRACT NO. NOBS-72108, DATED APRIL 4, 1956, WHEREBY CURTISS-WRIGHT COMPLETED A PROTOTYPE ENGINE, AND CONTRACT NO. NOBS -77118, DATED APRIL 1, 1959, FOR THE DEVELOPMENT OF A QUIET SCHNORKEL, NOISE ISOLATED 1,050KW DIESEL GENERATOR SET. ALSO 18 12V-142 ENGINES WERE BUILT BY CURTISS-WRIGHT UNDER AMENDMENTS TO CONTRACT NO. NOBS-73759, DURING 1959 AND 1960.

WITH REGARD TO YOUR STATEMENTS CONCERNING THE ENGINE OFFERED BY CURTISS- WRIGHT, THE NAVY REPORTS THAT INSTEAD OF A WEIGHT OF 15 TO 20 POUNDS PER HORSEPOWER, THE ENGINE PROPOSED BY CURTISS-WRIGHT INCLUDING ACCESSORIES IS APPROXIMATELY 4.5 POUNDS PER HORSEPOWER. INSTEAD OF A TOTAL WEIGHT WITH GENERATOR OF 10,000 POUNDS, EXCEEDING SPECIFICATION LIMITS OF 2,300 POUNDS, THIS ENGINE, INCLUDING GENERATOR AND ACCESSORIES (BUT LESS FOUNDATION RAILS WHICH ARE PROPERLY A PART OF THE VESSEL HULL RATHER THAN THE GENERATOR SET) HAS AN ESTIMATED DRY WEIGHT OF 7,591 POUNDS WHICH IS WELL BELOW THE SPECIFIED DRY WEIGHT LIMIT OF 7,650 POUNDS AND, SINCE ESSENTIALLY THIS SAME EQUIPMENT HAS BEEN PREVIOUSLY FURNISHED TO THE NAVY, THE ESTIMATE OF WEIGHT IS KNOWN TO BE A VERY GOOD ONE.

THE PREVIOUS NAVY CONTRACT YOU REFER TO IS REPORTED TO BE CONTRACT NO. NOBS-25438, DATED NOVEMBER 7, 1945, ISSUED BY THE BUREAU OF SHIPS TO FIEDLER-SELLERS CORPORATION, FOR TWO (NOT THREE) MARINE DIESEL ENGINES OF 250 HORSEPOWER AT 2,400 REVOLUTIONS PER MINUTE AT A UNIT PRICE OF $24,438.54 AND A TOTAL FIXED PRICE INCLUDING SPARE PARTS AND INSTRUCTION BOOKS OF $49,950. THE NAVY REPORTS THAT ON SEPTEMBER 17, 1946, THIS CONTRACT WAS TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT. THE GROSS SETTLEMENT WAS IN THE AMOUNT OF $38,947.80 (WITH A PROPERTY DISPOSAL CREDIT OF $150).

IN A NEGOTIATED PROCUREMENT, IT IS THE DUTY OF THE GOVERNMENT'S CONTRACTING OFFICIALS TO PLACE THE CONTRACT WITH THE CONTRACTOR MAKING THE BEST FINAL PROPOSAL IN TERMS OF THE NEEDS OF THE GOVERNMENT. PRICE IS MERELY ONE FACTOR WHICH ENTERS INTO THE AWARD DETERMINATION. 37 COMP. GEN. 855. THE SELECTION OF THE BEST QUALIFIED CONTRACTOR FOR THE AWARD IS A MATTER FOR THE ADMINISTRATIVE OFFICE CONCERNED IN THE EXERCISE OF ITS BEST JUDGMENT AS TO THE INTERESTS OF THE GOVERNMENT. B 143702, SEPTEMBER 27, 1960.

THE NAVY DEPARTMENT REPORTS THAT THE SUBJECT CONTRACT WAS NEGOTIATED PURSUANT TO 10 U.S.C. 2304 (A) (11), WHICH AUTHORIZES THE HEAD OF THE AGENCY TO NEGOTIATE WITHOUT FORMAL ADVERTISING A PURCHASE OR CONTRACT, IF THE PURCHASE OR CONTRACT IS FOR PROPERTY OR SERVICES THAT HE DETERMINES TO BE FOR EXPERIMENTAL, DEVELOPMENT, OR RESEARCH WORK, OR FOR MAKING OR FURNISHING PROPERTY FOR EXPERIMENT, TEST, DEVELOPMENT, OR RESEARCH. APPEARS FROM THE RECORD THAT THE CONTRACTING OFFICIALS HAVE GIVEN THE MATTER OF SELECTING THE BEST PROPOSAL CAREFUL CONSIDERATION. IN VIEW OF THE DISCRETION PLACED WITH THE CONTRACTING OFFICIALS IN NEGOTIATED PROCUREMENTS OF THIS CHARACTER, AND SINCE THE RECORD DOES NOT SHOW ANY FAILURE ON THE PART OF THE CONTRACTING OFFICIALS TO EXERCISE THEIR BEST JUDGMENT IN MAKING THE AWARD, WE FIND NO BASIS TO QUESTION THE ACTION OF