B-154230, AUG. 11, 1964

B-154230, AUG. 11, 1964

TO MAXWELL ELECTRONICS CORPORATION:

WE REFER TO YOUR LETTER OF MAY 18, 1964, PROTESTING AGAINST THE AWARD PROCEDURE FOLLOWED UNDER INVITATION FOR BIDS NO. 09-603-64-630 (STEP II), ISSUED BY THE DEPARTMENT OF THE AIR FORCE ON OCTOBER 24, 1963, AND OPENED ON MAY 14, 1964, FOR THE AN/URC-10, RADIO SET, WITH EQUIPMENT, DRAWINGS AND DATA.

YOU REPORT THAT YOU RECEIVED A COPY OF THIS INVITATION ON NOVEMBER 6, 1963, FROM THE SMALL BUSINESS AND CONTRACTORS RELATIONS OFFICE OF THE DALLAS CONTRACT MANAGEMENT DISTRICT, AND THAT YOU THEN WROTE TO THE PROCURING ACTIVITY ADVISING THAT YOU WOULD BUILD THESE RADIOS FOR LESS THAN $135.00 EACH. YOU PROTEST THAT YOU WERE NOT SUBSEQUENTLY INVITED TO SUBMIT A BID UNDER THIS PROCUREMENT. YOU ALSO PROTEST AGAINST THE USE OF THE TWO-STEP PROCEDURE IN THIS PROCUREMENT IN LIEU OF THE USUAL INVITATION FOR BIDS.

THE RECORDS SHOW THAT STEP I OF THIS PROCUREMENT, LETTER REQUEST FOR TECHNICAL PROPOSAL NO. WR-3-5821-6499-4852, WAS ISSUED ON MAY 29, 1963, WITH A CLOSING DATE OF JULY 15, 1963. THE AIR FORCE REPORTS THAT 47 FIRMS WERE SOLICITED FOR THE PROCUREMENT, AND THAT WHILE YOUR FIRM WAS NOT ON ITS SOURCE LIST, THE PROCUREMENT WAS SYNOPSIZED IN THE COMMERCE BUSINESS DAILY PSA 3316, JUNE 6, 1963. AIR FORCE FURTHER REPORTS THAT 11 TECHNICAL PROPOSALS WERE RECEIVED UNDER STEP I; THAT 7 OF THESE WERE FOUND TO BE ACCEPTABLE, BUT ONLY 5 OF THESE FIRMS SUBMITTED BIDS UNDER THE STEP II INVITATION; THAT THE INVITATION WAS ORIGINALLY SCHEDULED FOR BID OPENING ON NOVEMBER 13, 1963, BUT WAS POSTPONED UNTIL MAY 14, 1964, BECAUSE OF SOME SIX AMENDMENTS; AND THAT BENDIX CORPORATION WAS FOUND TO BE THE LOW BIDDER, RECEIVING THE AWARD ON JUNE 26, 1964, IN THE TOTAL AMOUNT OF $2,840,694.92. AIR FORCE ADVISES THAT THE CONTRACTING OFFICER HELD YOUR PROTEST LETTER OF NOVEMBER 11, 1963, UNOPENED UNTIL THE BID OPENING DATE OF MAY 14, 1964.

REGARDING ITS USE OF THE TWO-STEP PROCEDURE ON THIS PROCUREMENT, AIR FORCE STATES AS FOLLOWS:

"A. SPECIFICATION MIL-R-273818 (USAF) AND AMENDMENT 3 WAS NOT SUFFICIENTLY DEFINITE TO PERMIT FULL AND FREE COMPETITION WITHOUT ENGINEERING EVALUATION.

"B. A DEFINITE CRITERIA WAS AVAILABLE FOR EVALUATING TECHNICAL PROPOSALS.

"C. MORE THAN ONE TECHNICALLY QUALIFIED SOURCE WAS EXPECTED TO BE AVAILABLE BOTH INITIALLY AND AFTER TECHNICAL EVALUATION.'

THIS OFFICE HAS SANCTIONED THE USE OF THE TWO-STEP PROCUREMENT PROCEDURE. 40 COMP. GEN. 35. ASPR 2-502 SETS FORTH THE CONDITIONS FOR ITS USE, AND IT APPEARS THAT THE PROCEDURE WAS PROPERLY UTILIZED BY THE CONTRACTING OFFICER IN THIS CASE. THIS PROCEDURE REQUIRES THAT ONLY TECHNICAL PROPOSALS DETERMINED TO BE ACCEPTABLE UNDER STEP I MAY BE CONSIDERED UNDER THE STEP II ADVERTISEMENT. 40 COMP. GEN. 40; ASPR 2-501 (II).

THE TWO-STEP PROCUREMENT PROCEDURE IS DESIGNED TO INCREASE THE USE AND OBTAIN THE BENEFITS OF FORMAL ADVERTISING WHERE INADEQUATE SPECIFICATIONS PRECLUDE THE USE OF CONVENTIONAL FORMAL ADVERTISING. ON THIS PROCUREMENT, FOR EXAMPLE, THE RECORD INDICATES THAT AN INVITATION WAS INITIALLY ISSUED ON THIS ITEM (INVITATION FOR BIDS NO. 09-603-63-967) ON APRIL 16, 1963, BUT WAS CANCELLED ON MAY 14, 1963, BECAUSE AIR FORCE DID NOT HAVE SUFFICIENT DATA ON THE ITEM TO ASSURE RECEIPT OF A SATISFACTORY PRODUCT OR TO PERMIT INTELLIGENT BIDDING; AND THAT THE TWO-STEP PROCEDURE WAS THEN ADOPTED INSTEAD OF A RESTRICTIVE, SOLE-SOURCE PROCUREMENT. FURTHER, THE RECORD SHOWS THAT THE PROCUREMENT WAS SYNOPSIZED. IT DOES NOT APPEAR THAT YOUR FIRM WAS IMPROPERLY EXCLUDED FOR THE PROCUREMENT.

ACCORDINGLY, YOUR PROTEST IS DENIED. HOWEVER, WE TRUST THAT YOU WILL PARTICIPATE IN FUTURE PROCUREMENTS FOR THIS ITEM.