B-167049-2, SEP. 3, 1969

B-167049-2, SEP. 3, 1969

BID PROTEST - NEGOTIATION - STANDARDIZATION DECISION TO JETA POWER, INC. DENYING PROTESTS AGAINST PROCUREMENT OF GENERATOR SETS UNDER SEVERAL NAVY AND DEFENSE SUPPLY AGENCY REQUESTS FOR PROPOSALS. WITH RESPECT TO ALLEGATION AGAINST STANDARDIZATION, IT MUST BE DENIED ON THE BASIS OF ADEQUATE SUPPORT FOR STANDARDIZATION DETERMINATION. FAILURE OF PROCURING AGENCY TO INDICATE IN ITS SYNOPSES THAT PROCUREMENTS WERE STANDARDIZED AND THAT ONLY ONE FIRM WAS BEING SOLICITED HAS BEEN ACKNOWLEDGED AS OVERSIGHT. ALTHOUGH IT IS UNFORTUNATE THAT SYNOPSES WERE NOT CORRECT, AWARD DOES NOT APPEAR TO HAVE BEEN IMPROPER AND STEPS ARE BEING TAKEN TO PREVENT RECURRENCE OF DEFECIENCY. WHETHER COMPETITIVE PROCUREMENT IS GOOD OR BAD DEPENDS UPON FACTS AND CIRCUMSTANCES IN EACH CASE. RESTRICTION TO A SINGLE SOURCE IS NOT ALWAYS DETERMINED TO THE TAXPAYER. BY PROVIDING FOR STANDARDIZATION UNDER NEGOTIATION AUTHORITY IN 10 U.S.C. 2304 (A) (13) AND 10 U.S.C. 2451 CONGRESS HAS RECOGNIZED BENEFITS CAN RESULT.

TO MR. RICHARD LAUFER, PRESIDENT:

REFERENCE IS MADE TO YOUR LETTER OF JULY 14, 1969, PROTESTING THE SOLE- SOURCE RESTRICTION IN DEFENSE SUPPLY AGENCY REQUEST FOR PROPOSALS DSA400- 69-R-7615 FOR GENERATOR SETS TO LIBBY WELDING ., INC.

YOU PROTEST THE RESTRICTION ON THE GROUNDS THAT THE EQUIPMENT TO BE PRODUCED IS NOT TECHNICAL EQUIPMENT AND THAT THE AIR FORCE HAS PROCURED THOUSANDS OF GENERATOR SETS THROUGH COMPETITIVE PROCUREMENT.

THE GENERATOR SETS ARE BEING PROCURED IN ACCORDANCE WITH THE DETERMINATION AND FINDINGS OF THE ASSISTANT SECRETARY OF THE NAVY MADE UNDER 10 U.S.C. 2304 (A) (13) THAT THE EQUIPMENT OF LIBBY WELDING COMPANY IS NECESSARY FOR STANDARDIZATION AND INTERCHANGEABILITY.

SECTION 2304 OF TITLE 10, U.S.C. PROVIDES:

"/A) PURCHASES OF AND CONTRACTS FOR PROPERTY OR SERVICES COVERED BY THIS CHAPTER SHALL BE MADE BY FORMAL ADVERTISING IN ALL CASES IN WHICH THE USE OF SUCH METHOD IS FEASIBLE AND PRACTICABLE UNDER THE EXISTING CONDITIONS AND CIRCUMSTANCES. IF USE OF SUCH METHOD IS NOT FEASIBLE AND PRACTICABLE, THE HEAD OF THE AGENCY, SUBJECT TO THE REQUIREMENTS FOR DETERMINATIONS AND FINDINGS IN SECTION 2310, MAY NEGOTIATE SUCH A PURCHASE OR CONTRACT, IF --

"/13) THE PURCHASE OR CONTRACT IS FOR EQUIPMENT THAT HE DETERMINES TO BE TECHNICAL EQUIPMENT WHOSE STANDARDIZATION AND THE INTERCHANGEABILITY OF WHOSE PARTS ARE NECESSARY IN THE PUBLIC INTEREST AND WHOSE PROCUREMENT BY NEGOTIATION IS NECESSARY TO ASSURE THAT STANDARDIZATION AND INTERCHANGEABILITY; "

SECTION 2310, REFERENCED ABOVE, PROVIDES THAT DETERMINATIONS MADE TO NEGOTIATE UNDER 10 U.S.C. 2304 (A) (13) ARE FINAL.

PARAGRAPH 3-213 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) CONTAINS THE REGULATIONS PERTAINING TO PROCUREMENT BY NEGOTIATION OF TECHNICAL EQUIPMENT REQUIRING STANDARDIZATION AND INTERCHANGEABILITY OF PARTS. PARAGRAPH 3-213.2 (A) PROVIDES THAT THE AUTHORITY OF ASPR 3-213 MAY BE USED FOR PROCURING ADDITIONAL UNITS AND REPLACEMENT ITEMS OF SPECIFIED MAKES AND MODELS OF TECHNICAL EQUIPMENT AND PARTS.

UNDER THE FOREGOING STATUTE, EACH AGENCY IS AUTHORIZED TO DETERMINE WHETHER PROCUREMENT BY NEGOTIATION IS NECESSARY TO ASSURE STANDARDIZATION AND INTERCHANGEABILITY AND UNDER THE ASPR THAT AUTHORITY MAY BE USED TO STANDARDIZE TO SPECIFIED MAKES AND MODELS OF TECHNICAL EQUIPMENT. ALSO, AS INDICATED ABOVE, THE DETERMINATION TO NEGOTIATE IS FINAL. SEE, ALSO, B -163382, MARCH 21, 1968, WHEREIN, IN RESPONSE TO A PROTEST FROM LIBBY WELDING CO., INC., AGAINST SOLE-SOURCE NEGOTIATIONS WITH HOL-GAR MANUFACTURING CO., INC., ON THE GROUNDS THAT THE GENERATOR SETS COULD BE ASSEMBLED AND MANUFACTURED BY ANY COMPANY IN THE INDUSTRY, OUR OFFICE HELD THAT THE FACT THAT IT WAS FOUND NECESSARY TO LIMIT THE PROCUREMENT TO ONE MANUFACTURER IN ORDER TO ACHIEVE STANDARDIZATION AND INTERCHANGEABILITY DID NOT AFFORD A VALID BASIS FOR US TO OBJECT TO THE PROCUREMENT.

IN THE IMMEDIATE CASE, OUR OFFICE HAS BEEN ADVISED THAT THE NAVY'S DECISION TO STANDARDIZE UNDER THE PROVISIONS OF 10 U.S.C. 2304 (A) (13) WAS BASED ON THE CONSIDERATION THAT RELATIVELY SMALL QUANTITIES OF THE GENERATOR SETS ARE REQUIRED FOR NAVY USE AND THAT THE COST OF DEVELOPING A COMPETITIVE PACKAGE (INCLUDING ADDITIONAL TESTS WHICH WOULD BE REQUIRED OF DIFFERENT MANUFACTURERS) FOR PROCUREMENT OF A SPECIFIC MODEL OF GENERATOR SET WOULD EXCEED ANY ANTICIPATED SAVINGS LIKELY FROM COMPETITION. FURTHER, ADVICE HAS BEEN FURNISHED THAT THE PRESENT SYSTEM OF STANDARDIZATION WILL BE TERMINATED IN THE NEAR FUTURE AND THAT, EFFECTIVE WITH FISCAL YEAR 1971 FUNDS, ALL SERVICES REQUIREMENTS WILL BE PLACED WITH THE "DEPARTMENT OF DEFENSE DIESEL FAMILY" AND ALL SERVICES WILL UTILIZE THE SAME SPECIFICATION.

WHILE COMPETITION FOR GOVERNMENT PROCUREMENT IS DESIRABLE, IN VIEW OF THE EXPLANATION OFFERED BY THE NAVY, AND AS AUTHORITY EXISTS FOR STANDARDIZING TO SPECIFIED MAKES AND MODELS OF TECHNICAL EQUIPMENT (SEE 10 U.S.C. 2451), THERE IS NO LEGAL BASIS FOR OUR OFFICE TO OBJECT TO THE ADMINISTRATIVE DETERMINATION TO STANDARDIZE TO PARTICULAR GENERATOR SETS.

FURTHER, IN B-163382, SUPRA, WE HELD THAT THE TERM "TECHNICAL EQUIPMENT," AS USED IN 10 U.S.C. 2304 (A) (13) IS NOT RESTRICTED TO EQUIPMENT LISTED IN ASPR 3-108 AS MILITARY TYPE EQUIPMENT BUT IS SUFFICIENTLY BROAD TO INCLUDE MOST MECHANICAL EQUIPMENT USED FOR MILITARY OR DEFENSE PURPOSES.