B-165933, AUG. 26, 1969

B-165933, AUG. 26, 1969

BID PROTEST - SPECIFICATIONS - REVISION DECISION TO BOGUE ELECTRIC MANUFACTURING COMPANY DENYING PROTEST AGAINST NEGOTIATED AWARD TO STEWART-WARNER CORP. FOR COMPRESSORS FOR 152MM GUN- LAUNCHERS FOR WATERVLIET ARSENAL. WHERE SPECIFICATIONS WERE IN PROCESS OF REEVALUATION AFTER PREAWARD SURVEY DISCLOSED PROTESTANT AS LOW OFFEROR AND DURING PERIOD PROTESTANT AND COMPETITOR WERE QUALIFYING UNITS BUT PROTESTANTS FAILED, URGENCY OF NEED SUPPORTS JUSTIFICATION FOR NOT PROCEEDING UNDER ORIGINAL REQUEST FOR PROPOSALS. A NEGOTIATED AWARD AFTER ISSUANCE OF AN AMENDMENT INCORPORATING REVISED SPECIFICATIONS AND INCREASING THE QUANTITY WILL NOT BE DISTURBED.

TO BOGUE ELECTRIC MANUFACTURING COMPANY:

FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST THE AWARD OF A CONTRACT BY THE WATERVLIET ARSENAL TO STEWART-WARNER CORPORATION PURSUANT TO REQUEST FOR PROPOSALS NO. DAAF07-69-R-0052.

THE SUBJECT RFP WAS ISSUED ON NOVEMBER 6, 1968, WITH A CLOSING DATE OF NOVEMBER 20, 1968, AND SOLICITED OFFERS FOR A QUANTITY OF 225 COMPRESSORS FOR 152MM GUN-LAUNCHERS IN ACCORDANCE WITH DRAWING NO. K 11644482,

REVISION A. SOLICITATION OF OFFERS WAS LIMITED TO YOUR FIRM AND WALTER KIDDE AND COMPANY, INCORPORATED, BASED ON THE PROJECT MANAGER'S DETERMINATION THAT THE TECHNICAL DATA PACKAGE WAS NOT ADEQUATE FOR FULL COMPETITION AND ONLY YOU AND KIDDE HAD DEMONSTRATED CAPABILITY TO PRODUCE THE ITEM. THE RFP PROVIDED FOR PROPOSALS ON BOTH FIRST ARTICLE APPROVAL AND FIRST ARTICLE APPROVAL EXCLUDED BASES. YOU AND KIDDE BOTH SUBMITTED OFFERS ON A COMPRESSOR ASSEMBLY COMPOSED OF A KIDDE COMPRESSOR AND BOGUE ELECTRIC MOTOR. YOUR PROPOSAL WAS LOW ON BOTH BASES. BEFORE AN AWARD HAD BEEN MADE, THE SPECIFICATIONS WERE REVISED. THE PRIMARY REVISION WAS "STOP/START AND DURABILITY LIFE CYCLE TESTING" REQUIREMENT. BOTH YOU AND KIDDE WERE ADVISED OF THE REVISIONS AND GIVEN UNTIL DECEMBER 12, 1968, TO AMEND YOUR PROPOSALS AS TO PRICE AND DELIVERY. YOU CONFIRMED YOUR PROPOSAL AS SUBMITTED. KIDDE ACCEPTED MANY OF THE REVISIONS, BUT QUESTIONED OTHERS, PARTICULARLY THE 5000 MINUMUM STOP/START CYCLE OF THE DURABILITY LIFE CYCLE REQUIREMENT.

DURING THE PERIOD BETWEEN RECEIPT OF PROPOSALS AND THE REVISIONS REFERRED TO ABOVE, KIDDE HAD BEEN SUPPLYING AN ASSEMBLY COMPRISED OF A KIDDE COMPRESSOR AND EMMCO MOTOR TO THE VEHICLE MANUFACTURER AND YOU HAD BEEN SUPPLYING THE SAME COMPRESSOR ASSEMBLY OFFERED UNDER THE SUBJECT RFP TO THE VEHICLE MANUFACTURER. WHEN YOUR COMPRESSOR ASSEMBLY WAS SUBJECTED TO THE DURABILITY LIFE CYCLE TESTING BY THE VEHICLE MANUFACTURER, IT FAILED. HOWEVER, THE KIDDE COMPRESSOR ASSEMBLY APPEARED TO BE ON THE WAY TO A SATISFACTORY COMPLETION OF THE TESTING, INCLUDING THE DURABILITY LIFE CYCLE TESTING. AT THIS POINT IT WAS DECIDED THAT BECAUSE OF THE URGENCY OF THE PROCUREMENT, NEGOTIATIONS SHOULD BE UNDERTAKEN WITH KIDDE SINCE IT APPEARED THAT ONLY ITS COMPRESSOR ASSEMBLY WOULD MEET THE REQUIREMENTS OF THE RFP. HOWEVER, ON JANUARY 9, 1969, YOU FILED A PROTEST WITH OUR OFFICE AND FURTHER NEGOTIATIONS WITH KIDDE WERE SUSPENDED. IN THE MEANTIME, THE REQUIREMENT FOR THE NUMBER OF COMPRESSORS HAD INCREASED TO 700 UNITS AND IT WAS DETERMINED ESSENTIAL THAT PRODUCTION BEGIN ON AT LEAST 300 UNITS TO MEET THE DEPLOYMENT SCHEDULES OF VEHICLES AWAITING THE COMPRESSOR ASSEMBLIES. SINCE ONLY KIDDE HAD PROGRESSED SATISFACTORILY IN TESTING ITS UNIT, A SOLE-SOURCE AWARD FOR 300 UNITS WAS AUTHORIZED BY THE ASSISTANT SECRETARY OF THE ARMY FOR INSTALLATIONS AND LOGISTICS.

ON MARCH 31, 1969, AMENDMENT NO. 1 TO THE RFP WAS ISSUED. THE AMENDMENT PROVIDED FOR SUBMISSION OF PROPOSALS ON APRIL 30, 1969, AND INCREASED THE QUANTITY TO BE PROCURED TO 400 UNITS. IN ADDITION, THE AMENDMENT DELETED THE REQUIREMENT FOR FIRST ARTICLE APPROVAL, REVISED THE SPECIFICATIONS, AND PROVIDED FOR QUALIFICATION TESTING OF THE OFFERED COMPRESSORS. AS A RESULT OF REEVALUATION OF DRAWING NO. K 11644482, IT WAS DETERMINED THAT IT WAS HIGHLY UNLIKELY THAT ANY MANUFACTURER COULD MEET THE QUALIFICATIONS IMPOSED THEREIN. THEREFORE, AMENDMENT NO. 1 REDUCED FROM 5,000 TO 1,000 THE STOP/START CYCLES UNDER THE DURABILITY LIFE CYCLE TESTING REQUIREMENT. IN VIEW OF THIS MODIFICATION, IT APPEARED YOUR COMPRESSOR UNIT COULD QUALIFY AND YOU WERE GIVEN AN OPPORTUNITY TO SUBMIT ANOTHER PROPOSAL. STEWART-WARNER WAS ALSO CONSIDERED A POTENTIAL SOURCE SINCE ITS COMPRESSORS APPEARED TO HAVE THE CAPABILITY OF MEETING THE REVISED TESTING REQUIREMENTS. BY AMENDMENT NO. 2, THE RFP WAS AMENDED TO INCLUDE REVISION B TO DRAWING NO. K 11644482. AMENDMENTS 3, 4, AND 5 EXTENDED THE TIME WITHIN WHICH PROOF OF QUALIFICATION WAS REQUIRED, THE FINAL DATE BEING JUNE 9, 1969. ALL THREE FIRMS QUALIFIED THEIR UNITS AND WERE ADVISED TO SUBMIT THEIR BEST AND FINAL OFFER BY 1:00 P.M., E.D.S.T., JUNE 10, 1969. ALL THREE FIRMS RESPONDED ON TIME, WITH STEWART-WARNER BEING LOW AND KIDDE BEING SECOND LOW. AWARD WAS MADE TO STEWART-WARNER ON JUNE 16, 1969.

IT IS YOUR PRIMARY CONTENTION THAT AWARD SHOULD HAVE BEEN MADE TO YOUR FIRM UNDER THE RFP AS INITIALLY ISSUED SINCE YOU WERE THE LOW RESPONSIBLE OFFEROR. YOU ALSO CONTEND THAT REPEATED EXTENSIONS FOR QUALIFYING THE COMPRESSOR WERE GRANTED FOR THE SOLE BENEFIT OF STEWART WARNER. FINALLY, YOU OBJECT TO THE SOLE-SOURCE PROCUREMENT OF 300 UNITS FROM KIDDE, WHICH HAD NOT QUALIFIED A UNIT, AT A PRICE HIGHER THAN YOURS.

ALTHOUGH YOU SUBMITTED THE LOWEST OFFER AND WERE DETERMINED A RESPONSIBLE PROSPECTIVE CONTRACTOR PURSUANT TO A PREAWARD SURVEY, NO AWARD WAS MADE PRIOR TO DECEMBER 12, 1968, BECAUSE THE SPECIFICATIONS WERE IN THE PROCESS OF REVISION BASED ON A REEVALUATION OF THE GOVERNMENT'S NEEDS. DURING THIS PERIOD BOTH YOU AND KIDDE WERE QUALIFYING COMPRESSOR UNITS FOR THE VEHICLE MANUFACTURER AND KIDDE'S UNIT WAS PROGRESSING SATISFACTORILY IN THE TESTING WHEREAS YOUR UNIT HAD FAILED. AT ABOUT THE SAME TIME THE GOVERNMENT'S NEEDS HAD INCREASED TO 700 UNITS AND IT WAS DETERMINED THAT PRODUCTION OF 300 UNITS SHOULD BEGIN IMMEDIATELY TO MEET THE DEPLOYMENT SCHEDULES FOR VEHICLES AWAITING THE COMPRESSOR ASSEMBLIES. IN THESE CIRCUMSTANCES, WE BELIEVE THERE WAS AMPLE JUSTIFICATION FOR THE CONTRACTING OFFICER'S FAILURE TO PROCEED WITH AN AWARD TO YOU UNDER THE ORIGINAL RFP.

IN VIEW OF THE SUBSTANTIAL CHANGES IN THE SPECIFICATIONS AND THE INCREASED QUANTITY OF COMPRESSORS NEEDED, THE CONTRACTING OFFICER WOULD HAVE BEEN JUSTIFIED IN REJECTING ALL OFFERS PURSUANT TO PARAGRAPH 10 (B) OF THE INSTRUCTIONS AND CONDITIONS OF THE RFP AND RESOLICITING PROPOSALS ON THE BASIS OF THE NEW REQUIREMENTS. IN THIS EVENT, HE WOULD HAVE BEEN OBLIGATED TO SOLICIT PROPOSALS FROM THE MAXIMUM NUMBER OF QUALIFIED SOURCES, WHICH INCLUDED STEWART-WARNER. ARMED SERVICES PROCUREMENT REGULATION 3-101 AND 3-102 (C). HOWEVER, RATHER THAN CANCELLING THE RFP AND ISSUING A NEW ONE INCORPORATING THE REVISED SPECIFICATIONS AND INCREASED QUANTITY THE CONTRACTING OFFICER ACCOMPLISHED THE SAME RESULT BY ISSUING AMENDMENT NO. 1 TO THE RFP AND INVITING PROPOSALS FROM THE THREE FIRMS HE CONSIDERED QUALIFIED SOURCES. IN THIS CONNECTION, ASPR 3-805.1 (E), PROVIDES:

"/E) WHEN, DURING NEGOTIATIONS, A SUBSTANTIAL CHANGE OCCURS IN THE GOVERNMENT'S REQUIREMENTS OR A DECISION IS REACHED TO RELAX, INCREASE OR OTHERWISE MODIFY THE SCOPE OF THE WORK OR STATEMENT OF REQUIREMENTS, SUCH CHANGE OR MODIFICATION SHALL BE MADE IN WRITING AS AN AMENDMENT TO THE REQUEST FOR PROPOSAL OR REQUEST FOR QUOTATIONS, AND A COPY SHALL BE FURNISHED TO EACH PROSPECTIVE CONTRACTOR. SEE 3-505 AND 3-507. ORAL ADVICE OF CHANGE OR MODIFICATION MAY BE GIVEN IF (I) THE CHANGES INVOLVED ARE NOT COMPLEX IN NATURE, (II) ALL PROSPECTIVE CONTRACTORS ARE NOTIFIED SIMULTANEOUSLY (PREFERABLY BY A MEETING WITH THE CONTRACTING OFFICER), AND (III) A RECORD IS MADE OF THE ORAL ADVICE GIVEN. IN SUCH INSTANCES, HOWEVER, THE ORAL ADVICE SHOULD BE PROMPTLY FOLLOWED BY A WRITTEN AMENDMENT VERIFYING SUCH ORAL ADVICE PREVIOUSLY GIVEN. THE DISSEMINATION OF ORAL ADVICE OF CHANGES OR MODIFICATIONS SEPARATELY TO EACH PROSPECTIVE BIDDER DURING INDIVIDUAL NEGOTIATION SESSIONS SHOULD BE AVOIDED UNLESS PRECEDED, ACCOMPANIED, OR IMMEDIATELY FOLLOWED BY A WRITTEN AMENDMENT TO THE REQUEST FOR PROPOSAL OR REQUEST FOR QUOTATIONS EMBODYING SUCH CHANGES OR MODIFICATIONS.'

WITH REGARD TO THE SOLE-SOURCE PROCUREMENT OF 300 UNITS FROM KIDDE, ASPR 3-210.2 SETS FORTH ILLUSTRATIVE CIRCUMSTANCES UNDER WHICH THE AUTHORITY TO NEGOTIATE MAY BE USED. UNDER ASPR 3-210.2 (I) CONTRACTS MAY BE NEGOTIATED WHERE THE SUPPLIES CAN BE OBTAINED FROM ONLY ONE PERSON OR FIRM. THE RECORD SHOWS THAT AT THE TIME KIDDE RECEIVED THE AWARD THERE WAS AN URGENT NEED FOR PRODUCTION TO BEGIN TO MEET THE DEPLOYMENT SCHEDULES FOR VEHICLES AWAITING THE COMPRESSOR ASSEMBLIES AND KIDDE WAS THE ONLY SOURCE THEN CONSIDERED CAPABLE OF MEETING THE REQUIREMENT.

WITH REGARD TO YOUR COMPLAINT THAT REPEATED EXTENSIONS IN THE QUALIFYING TIME WERE GRANTED FOR THE SOLE BENEFIT OF STEWART-WARNER, THE RECORD DOES NOT INDICATE THE REASON FOR THE EXTENSIONS. HOWEVER, WE SEE NO BASIS FOR OUR OFFICE TO TAKE EXCEPTION TO THE EXTENSIONS SINCE IT WAS IN THE GOVERNMENT'S INTEREST TO QUALIFY AS MANY SOURCES AS POSSIBLE AND IT DOES NOT APPEAR THAT THE EXTENSIONS PREJUDICED EITHER YOU OR KIDDE SO FAR AS CONCERNS THE PRICES QUOTED.

ACCORDINGLY, WE SEE NO BASIS UPON WHICH OUR OFFICE MAY PROPERLY DISTURB THE CONTRACT AWARDED TO STEWART-WARNER.