B-155123, MAY 14, 1965

TO LEWIS, MACDONALD AND VARIAN:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 14, 1964, CONTENDING ON BEHALF OF STEWART AVIONICS, INC., THAT NO AWARD SHOULD BE MADE UNDER INVITATION NO. 41-608-64-817, ISSUED BY THE DIRECTORATE OF PROCUREMENT AND PRODUCTION, SAN ANTONIO AIR MATERIEL AREA, KELLY AIR FORCE BASE.

THE INVITATION, A TOTAL SET-ASIDE FOR SMALL BUSINESS, SOLICITED BIDS TO BE OPENED JULY 10, 1964, FOR FURNISHING, SUBJECT TO FIRST ARTICLE APPROVAL AND TEST REPORTS, 117 EACH TANK AND PUMP UNIT TO BE MANUFACTURED IN ACCORDANCE WITH MILITARY SPECIFICATION MIL-T 38266/USAF), DATED JANUARY 31, 1964. FIRST ARTICLE CERTIFIED TEST REPORT WAS REQUIRED TO BE FURNISHED TO THE GOVERNMENT WITHIN 90 DAYS AFTER RECEIPT OF THE CONTRACT AND THE CONTRACT ARTICLES WERE REQUIRED TO BE DELIVERED WITHIN 150 DAYS THEREAFTER.

THE INVITATION PROVIDED IN SECTION II, PART VIII, OF THE SCHEDULE THAT, IF A BID SUBMITTED IN RESPONSE THERETO SHOULD BE FAVORABLY CONSIDERED, A SURVEY TEAM MIGHT CONTACT THE BIDDER'S FACILITY TO DETERMINE ITS ABILITY TO PERFORM. EXAMPLES OF THE TYPE OF MATTERS THE SURVEY TEAM MIGHT EXAMINE AND EVALUATE, AS GIVEN IN THE INVITATION, INCLUDED "ABILITY TO MEET REQUIRED DELIVERY SCHEDULE; " "APPARENT UNDERSTANDING OF SPECIFICATION REQUIREMENTS; " "REALISM OF LEAD TIME ESTIMATES; " "ENGINEERING CAPABILITY; " AND "ANY OTHER AREAS PERTINENT TO POSSIBLE PERFORMANCE OF THE PROSPECTIVE CONTRACT.'

IT APPEARS THAT STEWART AVIONICS, INC., SUBMITTED THE LOW BID UNDER THE INVITATION, BUT THAT A PREAWARD SURVEY CONDUCTED BY AIR FORCE REPRESENTATIVES FROM WRIGHT-PATTERSON AIR FORCE BASE AND NEW YORK CONTRACT MANAGEMENT DISTRICT RESULTED IN THE ISSUANCE OF A NEGATIVE FACILITY CAPABILITY REPORT (FCR) ON THE COMPANY. THE RECORD INDICATES THAT THE AIR FORCE'S NEGATIVE FINDING WITH RESPECT TO THE CAPABILITY OF STEWART TO PERFORM THE CONTRACT WAS MADE LARGELY BECAUSE A DESIGN PROBLEM EXISTED AND THE SURVEY PERSONNEL WERE UNABLE TO CONCLUDE, AFTER CONFERRING WITH STEWART'S PRINCIPAL OFFICERS AND CHIEF ENGINEER, THAT STEWART WOULD BE ABLE TO FURNISH THE CONTRACT ARTICLES WITHIN THE TIME REQUIRED DUE TO ITS INABILITY, OR LACK OFA DEVELOPED PLAN, TO OVERCOME THE PROBLEMS OF DESIGNING A PUMPING UNIT CAPABLE OF DISPENSING MIL-L-7808 TYPE OIL AT TEMPERATURES DOWN TO MINUS 65 DEGREES FAHRENHEIT, AS REQUIRED BY THE SPECIFICATIONS.

THE NEGATIVE FCR ON STEWART WAS REFERRED TO THE NEW YORK REGIONAL OFFICE OF THE SMALL BUSINESS ADMINISTRATION (SBA) FOR THE POSSIBLE ISSUANCE OF A CERTIFICATE OF COMPETENCY (COC). THE DEPARTMENT OF THE AIR FORCE WAS INFORMED BY SBA ON OCTOBER 7, 1964, THAT A COC HAD BEEN DENIED. IN THE MEANTIME, STEWART HAD BY TELEGRAM OF SEPTEMBER 4, 1964, PROTESTED TO THIS OFFICE AGAINST THE AWARD OF A CONTRACT TO ANY OTHER BIDDER UNDER THE INVITATION.

IN YOUR LETTER OF OCTOBER 14, 1964, IN SUPPORT OF THE PROTEST, YOU CONTENDED THAT THE REQUIRED ITEM COULD NOT BE PRODUCED IN ACCORDANCE WITH THE APPLICABLE SPECIFICATIONS WITHOUT WAIVER OF CERTAIN PROVISIONS THEREOF, AND THAT THE INVITATION SHOULD, THEREFORE, BE CANCELLED AND THE PROCUREMENT READVERTISED UNDER REVISED SPECIFICATIONS. IN SUPPORT OF THIS CONTENTION, YOU SUBMITTED AN AFFIDAVIT OF STEWART'S CHIEF ENGINEER.

THE SUBSTANCE OF THE CONTENTIONS SET FORTH IN THE AFFIDAVIT OF STEWART'S CHIEF ENGINEER IS DEALT WITH IN A REPORT OF NOVEMBER 3, 1964, FROM SYSTEMS ENGINEERING GROUP, RESEARCH AND TECHNICAL DIVISION, AIR FORCE SYSTEMS COMMAND, UNITED STATES AIR FORCE, WRIGHT-PATTERSON AIR FORCE BASE, AS FOLLOWS:

"5. THIS DIRECTORATE DOES NOT CONCUR WITH THE PROTESTANT'S OPINION OF PARAGRAPH A) OF REFERENCE C. ABOVE, THAT WITHOUT REMOVAL OF THE FILTER THE SYSTEM COULD NOT BE MADE TO PERFORM AT -65 DEGREES F. SOME COMPARISON OF OIL VISCOSITIES MAY CLARIFY THIS PROBLEM AREA. THE VISCOSITY OF MIL-L- 7808 IS REQUIRED TO BE BELOW 13,000 CENTISTOKES AT 65 DEGREES F AND RANGES DOWN TO 9,000 CENTISTOKES AT THIS TEMPERATURE. BY COMPARISON THE VISCOSITY OF SAE 1OW LUBRICATING OIL IS 9,000 CENTISTOKES AT APPROXIMATELY -25 DEGREES F. SAE 1OW OIL IS USED IN AUTOMOTIVE ENGINES FOR SERVICE AT AMBIENT TEMPERATURE OF -25 DEGREES F AND IS FILTERED THROUGH AUTOMOTIVE TYPE PAPER FILTERS WHICH DO NOT INCORPORATE NEAR THE STRUCTURAL INTEGRITY AS CHARACTERISTIC OF THE TYPE OF FILTER USED ON THE OIL PUMPING UNIT. THE SPECIFICATION IS RELATIVELY UNRESTRICTIVE FROM THE STANDPOINT THAT THE TYPE OF FILTER CALLED OUT IS AVAILABLE IN FOUR DIFFERENT SIZES AND COMPLETELY UNRESTRICTIVE ON THE MEDIA CONFIGURATION OF THE FILTER ELEMENT. THESE FILTERS ARE AVAILABLE AS CATALOGUE ITEMS IN FOUR SIZES, WITH AND WITHOUT BYPASS AND IN SEVERAL ELEMENT STYLES AND STRUCTURAL CONFIGURATIONS. THESE FILTERS ARE AVAILABLE FOR HYDRAULIC FLUID, MIL-L- 7808 OIL AND OTHER PRODUCTS OVER AN OPERATING TEMPERATURE RANGE OF -65 DEGREES TO 160 DEGREES F. THE REQUIRED FLOW PERFORMANCE OF THE UNIT IS DOWNGRADED FROM 2 GPM AT 70 DEGREES F TO 1/4 GPM AT -65 DEGREES F IN RECOGNITION OF THE INCREASED VISCOSITY AT THE EXTREME LOW TEMPERATURE. PREVIOUSLY PROCURED SIMILAR ITEM SUBSTANTIALLY EXCEEDED THIS LOW TEMPERATURE PERFORMANCE. ACCORDING TO THE PROJECT ENGINEER ON THE PREVIOUS MB-2 UNIT; MR. S. C. DAVIES SAAMA (SANERH), THERE WAS NO WAIVER GRANTED TO REMOVE THE FILTER FOR THE LOW TEMPERATURE TEST AND THERE IS NO EVIDENCE TO INDICATE THE FILTER HAD BEEN REMOVED.

"6. THIS DIRECTORATE DOES NOT CONCUR WITH THE PROTESTANT'S OPINION OF PARAGRAPH B) THAT THE SPECIFICATIONS ARE MUTUALLY EXCLUSIVE AND CONTRADICTORY AS TO WHETHER PRESSURIZING OF THE RESERVOIR WOULD BE PERMITTED. PARAGRAPH 3.7.1.2 REQUIRES AN AIR VENT TO PREVENT PRESSURE OR VACUUM LOCK WHEN OIL IS BEING PUMPED INTO OR OUT OF THE TANK. PARAGRAPH 3.6.2 OF THE SPECIFICATION REQUIRES THE TANK TO WITHSTAND AN INTERNAL PRESSURE OF 10 PSI OR 200 PERCENT OF THE OPERATING PRESSURE WHICHEVER IS GREATER. THE SPECIFICATION ALLOWS THE CONTRACTOR TO PURSUE A DESIGN APPROACH WHICH CAN UTILIZE A PRESSURIZED OR UNPRESSURIZED TANK, BUT DOES NOT DIRECT WHICH APPROACH THAT MUST BE FOLLOWED. IN THE EVENT THE TANKS ARE VENTED AT NORMAL ATMOSPHERIC PRESSURE THE TANKS WOULD BE REQUIRED TO WITHSTAND AN INTERNAL PRESSURE OF AT LEAST 10 PSI. IF THE MANUFACTURER SELECTS A DESIGN IN WHICH THE TANKS ARE NORMALLY PRESSURIZED THE VENTS WOULD RELIEVE AT A PREDETERMINED PRESSURE ABOVE ATMOSPHERIC PRESSURE AND THE TANKS WOULD BE DESIGNED TO WITHSTAND AT LEAST 200 PERCENT OF THE OPERATING PRESSURE.

"7. AS STATED ABOVE THE SPECIFICATION IS NOT ONLY POSSIBLE OF PERFORMANCE BUT CAN PROBABLY BE MET BY SELECTION OF PROPERLY DESIGNED BASICALLY "OFF- THE SHELF" TYPE COMPONENTS. THE PREVIOUSLY PROCURED UNITS EXCEEDED THE PERFORMANCE REQUIREMENTS CALLED OUT IN THE PRESENT SPECIFICATION.'

WE HAVE BEEN FURTHER ADVISED BY THE DEPARTMENT OF THE AIR FORCE UNDER DATE OF MARCH 10, 1965, THAT A CONTRACT (AF 41/608/-31181) FOR FURNISHING THE ITEMS INVOLVED WAS AWARDED TO ENERTRAN, NC., FORT WAYNE, INDIANA, THE SECOND LOW BIDDER ON NOVEMBER 5, 1964. RELATIVE TO THE CONTENTIONS CONTAINED IN STEWART'S LETTER OF OCTOBER 14, 1964, AND SUPPORTING AFFIDAVIT, CONCERNING ENERTRAN'S PERFORMANCE UNDER A PRIOR CONTRACT, IT IS REPORTED THAT CONTRACT AF-40/604/-12116, REQUIRING FIRST ARTICLE APPROVAL AND DELIVERY OF 62 EACH TANK AND PUMP UNIT, TYPE MB-2, FSN 4930-061-9867, WAS AWARDED TO ENERTRAN ON DECEMBER 4, 1962; THAT THE ITEM, WHICH WAS REQUIRED TO BE MANUFACTURED IN ACCORDANCE WITH MIL-T-26858A/USAF) DATED FEBRUARY 14, 1961, WAS SIMILAR TO AND THE PREDECESSOR OF THE ITEM CALLED FOR UNDER THE SUBJECT INVITATION; AND THAT THE CONTRACTOR EXPERIENCED DIFFICULTY IN PRODUCING AN ITEM IN ACCORDANCE WITH THE SPECIFICATIONS. HOWEVER, AS THE RESULT OF NEGOTIATIONS BETWEEN ENERTRAN AND THE AIR FORCE, CHANGES TO THE SPECIFICATIONS WERE EFFECTED AND DELIVERY OF THE UNITS WAS COMPLETED IN JUNE 1964. SPECIFICATION MIL-T-26858A HAS SINCE BEEN REPLACED BY MIL-T-38266/USAF) DATED JANUARY 31, 1964.

IT FURTHER APPEARS THAT BECAUSE OF THE DELAY IN THE SUBJECT PROCUREMENT OCCASIONED BY YOUR PROTEST, CONTRACT AF 41/608/-32433 WAS NEGOTIATED WITH ENERTRAN ON OCTOBER 13, 1964, FOR THE FURNISHING OF 62 OF THE UNITS HERE INVOLVED TO MEET AN EMERGENCY NEED. THE CONTRACT CONTAINED THE SAME FIRST ARTICLE APPROVAL REQUIREMENT AS THE SUBJECT INVITATION. THE AIR FORCE REPORT STATES THAT THE FIRST ARTICLE UNDER THIS CONTRACT WAS APPROVED ON OR ABOUT DECEMBER 16, 1964; THAT INITIAL DELIVERIES WERE TO BEGIN ON FEBRUARY 1, 1965; AND THAT PERFORMANCE OF THE CONTRACT IS ON SCHEDULE, WITH NO DEVIATIONS HAVING BEEN GRANTED.

IT IS STATED IN THE REPORT FROM THE DEPARTMENT OF THE AIR FORCE THAT NO DEVIATIONS OR WAIVERS HAVE BEEN GRANTED TO ENERTRAN ON SPECIFICATION MIL-T -38266 AND CONTRACT AF 41/608/-31181, AND THAT ON THE BASIS OF ENERTRAN'S SUCCESSFUL PERFORMANCE IN FURNISHING THE FIRST ARTICLE UNDER CONTRACT AF 41/608/-32433, CONTRACT AF/608/-31181 WAS AMENDED ON JANUARY 12, 1965, BY DELETING THE FIRST ARTICLE REQUIREMENT AND PROVIDING FOR AN APPROPRIATE REDUCTION IN CONTRACT PRICE. IN ADDITION, ENERTRAN HAS SHORTENED THE ORIGINAL DELIVERY SCHEDULE FROM 150 DAYS AFTER APPROVAL OF THE FIRST ARTICLE TO 50 UNITS ON FEBRUARY 5, 1965, AND 50 UNITS EACH MONTH THEREAFTER UNTIL COMPLETION. AS OF MAY 5 WE ARE ADVISED THAT 175 UNITS HAVE BEEN DELIVERED AND THAT THE REMAINDER ARE SCHEDULED FOR SHIPMENT ON MAY 7.

IN VIEW OF THE REPORTED FACTS HEREINABOVE SET OUT, YOUR PROTEST APPEARS TO BE WITHOUT MERIT AND MUST BE DENIED.