B-154301, OCT. 7, 1964

B-154301, OCT. 7, 1964

TO CAMALIER, FROSH, NELLIS AND DORSEY:

WE REFER TO A LETTER DATED MAY 25, 1964, FROM HEWLETT-PACKARD COMPANY, 1501 PAGE MILL ROAD, PALO ALTO, CALIFORNIA, AND YOUR LETTERS DATED JULY 31 AND AUGUST 10, 1964, ON BEHALF OF HEWLETT-PACKARD PROTESTING THE AWARD OF A CONTRACT TO SYSTRON-DONNER CORPORATION, 888 GALINDO STREET, CONCORD, CALIFORNIA, UNDER INVITATION FOR BIDS NO. 156 541-64.

THIS INVITATION WAS ISSUED BY THE SUPPLY DEPARTMENT, NAVAL AIR ENGINEERING CENTER, PHILADELPHIA, PENNSYLVANIA, ON JANUARY 22, 1964, FOR THE PROCUREMENT OF SIX DATA ACQUISITION AND RECORDING SYSTEMS AND RELATED INSTRUCTION MANUALS IN ACCORDANCE WITH LISTED PERFORMANCE TYPE SPECIFICATIONS. PAGES 3 AND 4 OF THE INVITATION REQUIRED THAT DESCRIPTIVE LITERATURE BE SUBMITTED BY BIDDERS PRIOR TO BID OPENING. AMENDMENT NO. 2, DATED FEBRUARY 14, 1964, PROVIDED THAT THE FUNCTION, RANGE AND CHANNEL SELECTION OF THE DATA ACQUISITION AND RECORDING SYSTEM BE CAPABLE OF BEING REMOTELY CONTROLLED. BIDS WERE OPENED ON FEBRUARY 28, 1964, AND EIGHT BIDS WERE RECEIVED OF WHICH THE SIX LOWEST ARE AS FOLLOWS:

TABLE

BIDDER UNIT PRICES

AERO GEO ASTRO CORPORATION $11,250

SYSTRON-DONNER CORPORATION 12,000

ELECTRO INSTRUMENTS, INCORPORATED 12,200

NON-LINEAR SYSTEMS 12,232

DATA TECHNOLOGY CORPORATION 13,325

HEWLETT-PACKARD COMPANY 14,593

AFTER OPENING, THE BIDS AND THE DESCRIPTIVE LITERATURE REQUIRED BY THE INVITATION WERE TRANSMITTED TO THE BUREAU OF WEAPONS INDUSTRIAL OFFICE AT THE NAVAL AIR ENGINEERING CENTER, PHILADELPHIA, PENNSYLVANIA, FOR A TECHNICAL EVALUATION. PURSUANT TO THIS EVALUATION IT WAS FOUND THAT THE BID OF AERO GEO ASTRO CORPORATION WAS TECHNICALLY NONRESPONSIVE SINCE THIS BIDDER TOOK SPECIFIC EXCEPTIONS TO THE SPECIFICATIONS. THE BUREAU OF WEAPONS DETERMINED THAT SYSTRON DONNER'S BID WAS TECHNICALLY RESPONSIVE. ON APRIL 27, 1964, HEWLETT PACKARD DIRECTED A LETTER TO THE NAVAL AIR ENGINEERING CENTER PROTESTING AN AWARD TO OTHER THAN THAT CONCERN ALLEGING THAT ITS BID WAS THE ONLY BID WHICH CONFORMED TO THE TECHNICAL REQUIREMENTS OF THE SPECIFICATIONS. ON MAY 13, 1964, THE NAVAL AIR ENGINEERING CENTER ADVISED HEWLETT-PACKARD THAT AN AWARD HAD BEEN MADE TO SYSTRON-DONNER ON MAY 6, 1964, WITHOUT REFERRING THE MATTER TO OUR OFFICE PURSUANT TO ARMED SERVICES PROCUREMENT REGULATIONS SEC. 2-407.9 (3) (1) WHICH PROVIDES IN PERTINENT PART THAT WHERE A WRITTEN PROTEST AGAINST THE MAKING OF AN AWARD IS RECEIVED, THE AWARD SHALL NOT BE MADE UNTIL THE MATTER IS RESOLVED UNLESS THE CONTRACTING OFFICER DETERMINES THAT THE ITEMS TO BE PROCURED ARE URGENTLY NEEDED. PRIOR TO AWARD THE NAVY DETERMINED THAT THE PROCUREMENT OF THESE ITEMS WAS URGENTLY REQUIRED.

ON MAY 25, 1964, HEWLETT-PACKARD PROTESTED THE AWARD TO SYSTRON DONNER TO OUR OFFICE ALLEGING THAT THIS BIDDER DID NOT COMPLY WITH THE TECHNICAL REQUIREMENTS OF THE SPECIFICATIONS. SPECIFICALLY IT WAS ALLEGED THAT TWO OF THE COMPONENTS OF THE SYSTRON-DONNER SYSTEM, THE INPUT SELECTOR AND JUNCTION BOX WERE MARKED ON SYSTRON-DONNER'S DRAWING AS BEING "USER" SUPPLIED, AND THAT SYSTRON-DONNER'S SYSTEM WITHOUT THE INPUT SELECTOR AND JUNCTION BOX WOULD NOT BE CAPABLE OF PERFORMING THE REMOTELY CONTROLLED "FUNCTION" REQUIRED BY AMENDMENT NO. 2 TO THE INVITATION FOR BIDS. HEWLETT-PACKARD ADVISED THAT AFTER BID OPENING SYSTRON-DONNER OFFERED TO FURNISH THE INPUT SELECTOR FOR AN ADDITIONAL $300. HEWLETT-PACKARD ALSO ALLEGED THAT SYSTRON-DONNER TOOK EXCEPTION TO THE SPECIFICATION REQUIREMENTS THAT THE SYSTEM WAS TO HAVE COMMON MODE NOISE REJECTION OF 100 DB AND SCANNER-FREQUENCY BANK PASS OF DC TO 10 MC.

IN ANSWER TO HEWLETT-PACKARD'S CONTENTIONS NAVY INITIALLY ADVISED OUR OFFICE AS FOLLOWS:

"THE SYSTRON-DONNER OFFERING WAS NOT "ADMITTEDLY INCOMPLETE.' THIS MISCONCEPTION IS EVIDENTLY BASED ON A MISINTERPRETATION BY THE HEWLETT PACKARD CO. OF SYSTRON-DONNER DWG. NO. 891-C131 DATED 3 NOV. 1963, WHICH IS A BLOCK DIAGRAM OF THE SYSTEM OFFERED. THE ACTUAL SYSTEM TO BE SUPPLIED BY SYSTRON-DONNER WILL CONSIST OF 6, NOT 8, EQUIPMENT COMPONENTS. THESE COMPONENTS ARE AS FOLLOWS:

1. INPUT SCANNER CUNNINGHAM MODEL SQ-10C2D2

2. AC/OHMS CONVERTER SYSTRON-DONNER MODEL 1246

3. VOLTAGE TO FREQUENCY CONVERTER SYSTRON-DONNER MODEL 1232A

4. COUNTER/INDICATOR-DONNER MODEL 1011A

5. DIGITAL RECORDER SYSTRON-DONNER MODEL 1404S

6. DIGITAL CLOCK SYSTRON-DONNER MODEL 1025S

"THE ABOVE COMPONENTS ARE SHOWN ON SYSTRON-DONNER DWG. NO. 891-C131, A COPY OF WHICH IS ENCLOSED, AS THOSE BLOCKS WITH A HEAVY BLUE BORDER AROUND TWO SIDES. THE TWO BLOCKS MARKED "USER SUPPLIED" REPRESENT COMPONENTS NOT NEEDED FOR THE FUNCTIONING OF THE ABOVE SIX COMPONENTS AS A COMPLETE SYSTEM MEETING ALL SPECIFICATION REQUIREMENTS.

"THE INPUT SELECTOR, WHICH SYSTRON-DONNER OFFERED AS AN OPTION BY TWX, PRIOR TO BID OPENING, IS AN INTERNAL PROGRAMMING BOARD PROPOSED AS A MEANS OF ENHANCING THE VERSATILITY OF THE SYSTEM. HOWEVER, SINCE AN INTERNAL PROGRAMMING CAPABILITY WAS NOT A SPECIFICATION REQUIREMENT, THE INPUT SELECTOR WAS CORRECTLY OFFERED AS AN OPTION. HEWLETT-PACKARD, IN THEIR BID SUBMITTAL, ALSO OFFERED AN INTERNAL PROGRAMMING DEVICE AS AN OPTION; THEIR MODEL DY-2911C PROGRAMMER. THEREFORE, THE OFFERING BY SYSTRON- DONNER OF THE INPUT SELECTOR IN NO WAY INDICATES A LACK OF REMOTE PROGRAMMING CAPABILITY. THE SELECTION BY REMOTE CONTROL OF FUNCTION, RANGE AND CHANNEL IN THE SYSTRON-DONNER SYSTEM CAN BE MADE BY MEANS OF EXTERNAL CONTACT CLOSURES. THE USE OF AN INPUT SELECTOR IS NOT REQUIRED. THIS REMOTE CONTROL CAPABILITY IS CLEARLY INDICATED IN SYSTRON-DONNER DWG. NO. 891-C131 WHEREIN REMOTE PROGRAMMING CAPABILITY IS SCHEMATICALLY INDICATED BY ARROW LINES RUNNING TO THE EQUIPMENT BLOCKS BEING CONTROLLED.

"THE JUNCTION BOX SHOWN ON SYSTRON-DONNER DWG. NO. 891-C131 IS CLEARLY INDICATED AS AN OPTION AND WAS OFFERED AS A MEANS OF INCREASING SYSTEM VERSATILITY. HENCE, THE SYSTRON-DONNER SYSTEM IS COMPLETE WITHOUT THE OPTIONAL JUNCTION BOX. THE SIGNALS FROM THE COUNTER/INDICATOR AND DIGITAL CLOCK CAN BE ROUTED DIRECTLY TO THE DIGITAL RECORDER. THE JUNCTION BOX, THEREFORE, IS NOT NEEDED TO CONVERT AND SYNCHRONIZE THE OUTPUTS OF THE SYSTRON MODEL 1011A COUNTER AND MODEL 1404S RECORDER. THE MODEL 1011A COUNTER INTERNALLY CONVERTS SIGNALS TO BINARY-CODED DECIMAL DIGITAL OUTPUT VOLTAGES SUITABLE FOR DRIVING THE MODEL 1404S RECORDER DIRECTLY. FURTHERMORE, SYNCHRONIZATION CAPABILITIES ARE INHERENT BOTH IN THE COUNTER AND RECORDER AS INDICATED ON SYSTRON-DONNER DWG. NO. 891-C131 BY THE ARROW LINE LABELED "SYNC" SCHEMATICALLY CONNECTING THE COUNTER TO BE THE RECORDER.

"THE FACT THAT SYSTRON-DONNER DID NOT "PARROT-BACK" THE TWO TECHNICAL REQUIREMENTS, 100 DB COMMON-MODE NOISE REJECTION AND SCANNER FREQUENCY BANDPASS OF DC TO 10 MC, CAN IN NO WAY BE CONSTRUED AS A CLEAR OR IMPLIED EXCEPTION TO THE SPECIFICATION. NO AFFIRMATIVE EXCEPTION WAS MADE. THROUGH THE APPLICATION OF ACCEPTED RULES OF ELECTRONICS AND KNOWLEDGE OF EQUIPMENT BEING PRODUCED IN THE INDUSTRY TODAY, THIS ACTIVITY DETERMINED THAT BOTH OF THE AFOREMENTIONED TECHNICAL REQUIREMENTS ARE SATISFIED BY THE SYSTRON-DONNER SYSTEM.

"COMMON-MODE NOISE REJECTION IS ACHIEVED BY THE USE OF FLOATED GUARDED INPUT CIRCUITS IN THE SYSTEM COMPONENTS. SYSTRON-DONNER UTILIZES THIS TYPE OF CIRCUITRY WHICH IS ALSO COMMON TO HEWLETT PACKARD. SYSTRON-DONNER IN ITS LIST OF DETAILED SPECIFICATIONS SPECIFIES AC AND DC ACCURACIES OF PLUS OR MINUS 0.1 PERCENT OF FULL SCALE. TO ACHIEVE SUCH ACCURACIES, THE APPLICATION OF GOOD ENGINEERING DESIGN WOULD REQUIRE A COMMON-MODE NOISE REJECTION OF AT LEAST 100 DB. ELECTRICAL NOISE WOULD INTERFERE WITH THE SIGNALS BEING MEASURED AND VOID THE GUARANTEED ACCURACIES IF GOOD NOTICE REJECTION WAS NOT DESIGNED INTO THE SYSTEM. HENCE, THE FAILURE OF SYSTRON DONNER TO SPECIFICALLY STATE THE COMMON-MODE NOISE REJECTION OF 100 DB WAS IMMATERIAL AND COULD NOT BE CONSTRUED AS BEING AN EXCEPTION TO THE SPECIFICATION. * * *

"THE HEART OF THE SCANNER IS THE CUNNINGHAM CROSS-BAR SWITCH, AND ALL TYPES OF CUNNINGHAM CROSS-BAR SWITCHES, HAVING A BASIC FREQUENCY BANDPASS OF DC TO 10 MC. WITH FREQUENCY BANDPASS INHERENT IN THE CROSS-BAR SWITCH AND NOT DEPENDENT ON ADDITIONAL COMPONENTS AND CIRCUITRY FOR PURPOSES OF COMPLIANCE WITH THE SPECIFICATION, THIS ACTIVITY CONSIDERED THE OMISSION OF FREQUENCY BANDPASS DATA FROM THE SYSTEM PROPOSAL, AN OMISSION OF THE OBVIOUS.'

NAVY'S TECHNICAL EVALUATION CONCLUDED AS FOLLOWS:

"* * * THE TWO REQUIREMENTS, COMMON-MODE NOISE REJECTION AND SCANNER FREQUENCY BANDPASS, WHEREIN HEWLETT-PACKARD CHARGES SYSTRON DONNER WITH NON-CONFORMANCE TO THE DESCRIPTIVE DATA REQUIREMENTS, ARE EASILY DEDUCIBLE AS BEING INHERENT IN THE SYSTRON-DONNER SYSTEM THROUGH THE APPLICATION OF BASIC ENGINEERING PRINCIPLES AND A KNOWLEDGE OF THE STATE OF THE ART TODAY. OMISSION OR LACK OF "PARROTING BACK" CANNOT BE CONSTRUED AS NON- CONFORMANCE TO THE DESCRIPTIVE DATA REQUIREMENT.'

ON AUGUST 28, 1964, WE WERE INFORMALLY ADVISED BY THE NAVAL AIR ENGINEERING CENTER, PHILADELPHIA, PENNSYLVANIA, THAT ADDITIONAL INFORMATION REGARDING THIS MATTER WOULD BE FURNISHED TO OUR OFFICE. SEPTEMBER 18, 1964, A LETTER WAS DIRECTED TO OUR OFFICE FROM MR. ROBERT B. GARNETT, COUNSEL, NAVAL AIR ENGINEERING CENTER, SUMMARIZING AN ENCLOSED TECHNICAL MEMORANDUM FROM THE CENTER AS FOLLOWS:

"IT WOULD CLEARLY APPEAR FROM MR. SACKS MEMORANDUM (FROM THE BUREAU OF WEAPONS INDUSTRIAL OFFICE) THAT THE SPECIFIC CUNNINGHAM PART NUMBER CALLED OUT IN THE SYSTRON-DONNER BID WOULD NOT, UNLESS IT WERE MODIFIED OR OTHERWISE ADAPTED, PROVIDE THE FREQUENCY RESPONSE OF DC TO 10 MC CALLED FOR UNDER THE SPECIFICATIONS OF THE IFB. IT IS ALSO EQUALLY CLEAR THAT NEITHER THE CONTRACTING OFFICER, NOR THE BWIO TECHNICAL PERSONNEL ON WHOM THE CONTRACTING OFFICER RELIED FOR TECHNICAL ADVICE, WERE AWARE OF THIS CONDITION AT THE TIME OF THE AWARD OF CONTRACT. I THINK IT ALSO CLEAR THAT THE CONTRACTOR INTENDED TO PROVIDE A SCANNER WHICH WOULD MEET THE SPECIFICATION REQUIREMENTS. IN THIS CONNECTION, ATTENTION IS DRAWN TO THE SYSTRON-DONNER TELEGRAM OF 28 APRIL 1964 CONFIRMING THAT HIS BID CONFORMED, WITHOUT EXCEPTION, TO THE IFB REQUIREMENTS. ATTENTION IS ALSO CALLED TO THE FACT, AS SET FORTH IN MR. SACK'S MEMORANDUM, THAT SYSTRON- DONNER HAS INCORPORATED INTO THE EQUIPMENTS TO BE DELIVERED UNDER THE CONTRACT A CUNNINGHAM SCANNER WHICH DOES HAVE THE DC TO 10 MC CAPACITY, THUS REFLECTING THE CONTRACTOR'S INTERPRETATION THAT SUCH A SCANNER IS REQUIRED UNDER THE CONTRACT. ALL SIX EQUIPMENTS UNDER THE CONTRACTS ARE SCHEDULE FOR SHIPMENT TO THE GOVERNMENT BY 26 SEPTEMBER 1964.

"I HAVE BEEN ADVISED, TODAY, BY A REPRESENTATIVE OF NAVAL AVIONICS FACILITY (THE CONSIGNEE OF THE EQUIPMENTS) WHO IS PRESENTLY AT THE PLANT OF SYSTRON-DONNER THAT FINAL TESTS ON THE FIRST EQUIPMENT SHOULD BE COMPLETED TODAY, AND THAT SUCH EQUIPMENT IS EXPECTED TO BE SHIPPED TO THE GOVERNMENT IMMEDIATELY FOLLOWING SUCH TESTS. SUCH REPRESENTATIVE ANTICIPATES THAT TESTING OF THE REMAINING UNITS WILL BE COMPLETED IN THE VERY NEAR FUTURE AND THAT SHIPMENT OF SUCH UNITS WILL BE COMPLETED BY 26 SEPTEMBER OR VERY SHORTLY THEREAFTER.'

PURSUANT TO THE INITIAL REPORT FROM THE NAVY TO OUR OFFICE AND YOUR COMMENTS THEREON WE COULD NOT SAY THAT NAVY'S DETERMINATION THAT THE SYSTRON-DONNER MODEL CONFORMED TO THE TECHNICAL REQUIREMENTS OF THE SPECIFICATIONS WAS ERRONEOUS. IT HAS NOW BEEN DETERMINED BY THE NAVY THAT THE PARTICULAR CUNNINGHAM CROSS-BAR SWITCH WHICH SYSTRON-DONNER PROPOSED TO FURNISH PURSUANT TO ITS DRAWINGS WOULD NOT MEET THE SCANNER BANDPASS FREQUENCY SPECIFIED. IN THESE CIRCUMSTANCES WE FIND IT UNFORTUNATE THAT THE INFORMATION REGARDING THE SYSTRON-DONNER MODEL WHICH HAS NOW BEEN BROUGHT TO OUR ATTENTION, WAS NOT ASCERTAINED PRIOR TO THE AWARD TO SYSTRON-DONNER OR WITHIN A REASONABLE TIME THEREAFTER. A REVIEW OF THE RECORD INDICATES THAT THE AWARD TO SYSTRON-DONNER WAS IN GOOD FAITH BASED ON A DETERMINATION BY THE NAVAL AIR ENGINEERING CENTER THAT THE SYSTRON- DONNER MODEL CONFORMED TO THE TECHNICAL REQUIREMENTS OF THE SPECIFICATIONS. THE RECORD ALSO INDICATES THERE WAS NO BAD FAITH ON THE PART OF SYSTRON-DONNER IN PROPOSING THE SPECIFIC CUNNINGHAM CROSS-BAR SWITCH WHICH HAS NOW BEEN FOUND NOT TO HAVE THE REQUIRED SCANNER BANDPASS FREQUENCY. CONSEQUENTLY, IN VIEW OF THE STAGE OF COMPLETION OF THE CONTRACT AWARDED TO SYSTRON-DONNER, WE FIND THAT CANCELLATION AT THIS TIME WOULD NOT BE IN THE BEST INTEREST OF THE UNITED STATES.