B-167446, OCT. 31, 1969

B-167446, OCT. 31, 1969

SPECIFICATIONS--MINIMUM NEEDS REQUIREMENT--ADMINISTRATIVE DETERMINATION UNSUCCESSFUL OFFEROR'S PROTEST TO AWARD FOR WHOLE BLOOD SHIPPING CONTAINERS IS DENIED SINCE OFFEROR'S CONTAINER WAS AT VARIANCE WITH SPECIFICATIONS AND NONRESPONSIVE. RESPONSIBILITY OF DRAFTING SPECIFICATIONS TO REFLECT MINIMUM NEEDS OF GOVERNMENT AND WHETHER ARTICLES OFFERED BY BIDDERS ADEQUATELY MEET SPECIFICATIONS IS PRIMARILY FOR DETERMINATION BY ADMINISTRATIVE AGENCY CONCERNED, IT IS GAO'S DUTY TO DETERMINE ONLY WHETHER SPECIFICATIONS ARE UNDULY RESTRICTIVE OF COMPETITION AND INABILITY OR UNWILLINGNESS OF BIDDER TO MEET MINIMUM REQUIREMENTS IS NOT SUFFICIENT TO WARRANT CONCLUSION OF RESTRICTIVENESS BUT, SINCE TWO-STEP PROCUREMENT WILL BE INITIATED BASED ON PERFORMANCE SPECIFICATIONS, OFFEROR SHOULD HAVE OPPORTUNITY TO OFFER ANY CONTAINER IT BELIEVES WILL MEET REQUIRED PERFORMANCE.

TO PHILLIPS-FOSCUE CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST THE AWARD OF A CONTRACT TO LIFE-LIKE PRODUCTS, INC., BY THE DEFENSE PERSONNEL SUPPORT CENTER, PHILADELPHIA, PENNSYLVANIA, PURSUANT TO SOLICITATION NO. DSA 120-69-R- 3915, FOR THE PROCUREMENT OF WHOLE BLOOD SHIPPING CONTAINERS.

THE SUBJECT SOLICITATION, A TOTAL SMALL BUSINESS SET-ASIDE, WAS ISSUED ON JUNE 30, 1969, WITH AN OPENING DATE, AS AMENDED, OF JULY 24, 1969, AND CALLED FOR BIDS ON A QUANTITY OF 13,800 CONTAINERS IN ACCORDANCE WITH DEFENSE MEDICAL PURCHASE DESCRIPTION NO. 1, DATED MAY 12, 1969, FEDERAL STOCK NO. 8115-935-9761, INCLUDED IN THE SOLICITATION PACKAGE. THE SOLICITATION INCLUDED A REQUIREMENT FOR FIRST ARTICLE APPROVAL OR WAIVER OF THE REQUIREMENT UNDER STATED CIRCUMSTANCES AND REQUIRED DELIVERIES TO COMMENCE WITHIN 120 DAYS FROM DATE OF AWARD AND BE COMPLETED WITHIN 240 DAYS THEREAFTER. THE SOLICITATION ALSO INCLUDED A 50 PERCENT INCREASE OPTION PROVISION. FIVE OFFERS WERE RECEIVED AND AWARD WAS MADE TO LIFE- LIKE PRODUCTS ON AUGUST 29, 1969, AT A UNIT PRICE OF $3.55. YOUR OFFER WAS THIRD LOWEST AT $4.09. HOWEVER, YOUR OFFER WAS BASED ON A CONTAINER AT VARIANCE WITH THE STATED SPECIFICATIONS AND, THEREFORE, NONRESPONSIVE.

THE SUBSTANCE OF YOUR PROTEST IS CONTAINED IN THE FOLLOWING QUOTATION FROM YOUR LETTER OF JULY 10, 1969: "IN ESSENCE, THESE DOCUMENTS SHOW THAT: 1) THE BLOOD SHIPPING CONTAINER WAS DESIGNED IMPROPERLY AND WITHOUT CONSULTATION WITH GOVERNMENT TECHNICAL PACKAGING/TRANSPORTATION PERSONNEL OR WITH INDUSTRY; 2) THE PROCUREMENT WAS MADE OVER INDUSTRY PROTESTS EVEN THOUGH PHILLIPS-FOSCUE OFFERED A CONTAINER FOR LESS MONEY, A FASTER DELIVERY, AND A GUARANTEED PERFORMANCE THAT CONFORMED TO THE LONGSTANDING DPSC SPECIFICATION FOR THERMAL CONTAINERS-MEDICAL MATERIAL; 3) THE FIRST ARTICLE QUALIFICATION TESTS COMPLETELY FAILED AS PREDICTED BY INDUSTRY; 4) THE MEDICAL PROFESSIONALS THEN WAIVED ALL PERFORMANCE REQUIREMENTS OF THE CONTAINER UNDER CONTRACT; AND 5) DSA REJECTED INDUSTRY OBJECTIONS AND FELT THEIR HANDLING OF THE MATTER WAS IN KEEPING WITH GOOD BUSINESS PRACTICE AND INDUSTRY RELATIONS.' THE "DOCUMENTS" REFERRED TO IN THE ABOVE QUOTATION ARE YOUR LETTERS AND DEPARTMENT OF DEFENSE REPLIES THERETO, AS WELL AS YOUR HISTORY OF PROCUREMENT OF THE CONTAINERS. IN ADDITION, YOUR CORRESPONDENCE DETAILS THE DESIGN FEATURES WHICH YOU CONTEND ARE RESTRICTIVE AND INEFFICIENT AND YOUR OBJECTIONS TO THE PERFORMANCE REQUIREMENTS WHICH YOU CONTEND ARE"MODEST" AND BELOW THE CAPABILITY OF INDUSTRY.

YOU ALSO CONTEND THAT PREVIOUS SUPPLIERS OF THE CONTAINER WERE FAVORED BY THE FAILURE OF THE SOLICITATION PACKAGE TO INCLUDE REFERENCED DRAWINGS, THE SHORT PERIOD ALLOWED FOR SUBMISSION OF OFFERS, AND THE PROVISION FOR WAIVING FIRST ARTICLE APPROVAL. YOU ALSO OBJECT TO THE SMALL BUSINESS SIZE STANDARD OF 500 EMPLOYEES AND CONTEND THAT 250 EMPLOYEES WOULD BE MORE MEANINGFUL IN RESTRICTING THE PROCUREMENT TO SMALL BUSINESS CONCERNS. IN ADDITION, YOU CONTEND THAT THE SUBJECT PROCUREMENT IS CONTRARY TO THE ASSURANCE YOU RECEIVED FROM THE ASSISTANT SECRETARY OF THE DEPARTMENT OF DEFENSE, INSTALLATIONS AND LOGISTICS, AT THE TIME OF THE LAST PROCUREMENT OF THE CONTAINERS THAT THE NEXT PROCUREMENT WOULD NOT USE THE "JAPANESE DESIGN," BUT WOULD FOLLOW TWO-STEP PROCEDURES.

AFTER YOU WERE FURNISHED A COPY OF THE ADMINISTRATIVE REPORT, YOU RESPONDED BY REAFFIRMING YOUR POSITION AS SUMMARIZED ABOVE AND STATING THAT DSA'S EXPLANATION OF ITS HANDLING OF THE PROCUREMENTS OF THESE CONTAINERS IS INCOMPLETE AND UNSATISFACTORY. YOU REEMPHASIZE YOUR POSITION THAT THE PRIMARY OBJECTIONS TO YOUR CONTAINER (THE LACK OF V GROOVES AND OF A SEPARATE OUTER CONTAINER) ARE NOT VALID AND THAT YOUR DESIGN IS "LIGHTER IN WEIGHT, HAS FEWER PARTS, IS EASIER TO USE IN THE FIELD, IS LESS EXPENSIVE ON LIGHT-USE BASIS, BUT MOST IMPORTANTLY PROVIDES A GREATER DEGREE OF PROTECTION FOR THE WHOLE BLOOD.' FINALLY, YOU REQUEST OUR OFFICE TO (1) TERMINATE THIS PROCUREMENT, (2) DIRECT DSA TO PROCURE ONLY A SIX MONTHS' SUPPLY, (3) DIRECT THAT THE FORTHCOMING TWO-STEP PROCUREMENT BE OPEN TO ALL BIDDERS WHO CAN MEET A GIVEN PERFORMANCE STANDARD RATHER THAN A RESTRICTED DESIGN, AND (4) DIRECT DOD TO CONSIDER LIFETIME PROCUREMENT-USE COSTS.

IN RESPONSE TO YOUR PROTEST, DSA HAS FURNISHED OUR OFFICE A COMPREHENSIVE REPORT OF BOTH THIS AND LAST YEAR'S PROCUREMENTS, AS WELL AS A HISTORY OF DEVELOPMENT OF THE CONTAINER. IN 1964 THE ARMY'S MEDICAL EQUIPMENT RESEARCH AND DEVELOPMENT LABORATORY (MERDL) UNDERTOOK A PROJECT TO DESIGN AND DEVELOP A BLOOD SHIPPING CONTAINER IN ACCORDANCE WITH PERFORMANCE REQUIREMENTS ESTABLISHED BY THE MILITARY BLOOD PROGRAM AGENCY. FIFTEEN FIRMS WERE SOLICITED FOR THE R-AND-D CONTRACT AND FIVE SUBMITTED OFFERS. A CONTRACT WAS AWARDED TO AVCO CORPORATION ON NOVEMBER 1, 1964, AND TERMINATED IN 1966 BECAUSE AVCO WAS UNABLE TO MEET THE REQUIREMENTS. 1966 DPSC PERSONNEL DISCOVERED THAT A CONTAINER HAD BEEN DEVELOPED BY AN AMERICAN UNIT STATIONED IN JAPAN. IT WAS FOUND THAT THIS CONTAINER WAS SUPERIOR TO THE CONTAINER THEN IN USE, ALTHOUGH NOT UP TO THE EARLIER ESTABLISHED REQUIREMENTS.

AN ALTERNATE DESIGN WAS DEVELOPED BY MERDL IN 1967, AND A PROCUREMENT BASED ON THIS DESIGN WAS INITIATED IN 1968. HOWEVER, THE RFP WAS CANCELLED TO EFFECT SOME CHANGES. SOME OF THE CHANGES YOUR FIRM SUGGESTED WERE ACCEPTED, BUT THE FEATURES YOU OBJECTED TO MOST (THE INSIDE CONFIGURATION AND DIMENSIONS OF THE INSERT, THE V-GROOVES, AND THE TWO-BOX CONCEPT) WERE RETAINED. A NEW SOLICITATION RESULTED IN AN AWARD TO RADVA PLASTICS CORPORATION. YOUR OFFER WAS NONRESPONSIVE TO THE SPECIFICATIONS. RADVA'S FIRST ARTICLE DID NOT MEET ALL OF THE TEST REQUIREMENTS. IT DID NOT MEET THE SPECIFIED TEMPERATURE EXCEPT IN THE CENTER POSITION THERMOCOUPLE. NONE OF THE OTHER BOXES TESTED BY MERDL, AT THAT TIME OR AS LATE AS JULY 1969, INCLUDING YOURS AND THE "JAPANESE" CONTAINER, HAVE MET THE TEMPERATURE REQUIREMENTS. HOWEVER, THE RADVA CONTAINER PERFORMED AS WELL OR BETTER THAN THE JAPANESE CONTAINER WHICH HAD PROVEN SATISFACTORY IN SERVICE. THEREFORE, IT WAS ACCEPTED. THE PRESENT PROCUREMENT IS BASED ON ESSENTIALLY THE SAME SPECIFICATIONS AND PERFORMANCE REQUIREMENTS AS ACCEPTED UNDER THE RADVA CONTRACT.

THE DSA REPORT INCLUDES SPECIFIC REPLIES TO VARIOUS COMPLAINTS MADE BY YOU. THESE ARE SUMMARIZED BELOW. THE CONTAINER WHICH IS CALLED FOR UNDER THE PRESENT SPECIFICATIONS NEEDS 12 POUNDS OF ICE RATHER THAN 20 POUNDS. ALTHOUGH YOUR CONTAINERS ARE SMALLER AND REQUIRE LESS ICE, THEY ARE NOT EQUAL IN PERFORMANCE TO THE DPSC CONTAINER AS DETERMINED BY TWO DIFFERENT EVALUATIONS. IN ADDITION TO BETTER TEMPERATURE HOLDING CAPABILITY, THE DPSC CONTAINER BETTER PROTECTS THE BLOOD BAGS FROM DAMAGE. THE CLOSING DATE WAS EXTENDED FROM JULY 15 TO JULY 24 BECAUSE ANOTHER FIRM WAS ALSO HAVING TROUBLE GETTING COPIES OF THE DRAWINGS, WHICH ARE NOT NORMALLY INCLUDED IN THE RFP. HOWEVER, THE RFP INCLUDED INFORMATION AS TO WHERE THEY COULD BE OBTAINED. WAIVER OF FIRST ARTICLE APPROVAL IS AUTHORIZED BY THE ARMED SERVICES PROCUREMENT REGULATION, AND WAS INCLUDED IN THE RFP AS A MEANS OF POSSIBLY EFFECTING A SAVING TO THE GOVERNMENT. THERE ARE NO SMALL BUSINESS SIZE STANDARDS OF LESS THAN 500 EMPLOYEES. THE REQUIREMENT FOR V-GROOVES IN THE CONTAINER WAS RETAINED BECAUSE TESTING INDICATES, ALTHOUGH NOT CONCLUSIVELY, THAT AIR CIRCULATION HELPS MAINTAIN A CONSTANT TEMPERATURE THROUGHOUT THE CONTAINER. IT IS FELT THAT THIS ADVANTAGE MORE THAN OFFSETS ANY REDUCED INSULATING CAPACITY OR WEAKENING OF THE CONTAINER. THE INSERT CONCEPT WAS RETAINED FOR REASONS OF SANITATION AND CLEANLINESS, AND THE OUTER FIBERBOARD BOX ALSO PROVIDES ADDITIONAL PROTECTION FOR THE BLOOD BAGS. REMOVAL OF THE OUTER CONTAINER AT THE POINTS OF DESTINATION HELPS THE USING ACTIVITIES PREVENT SOILING AND CONTAMINATION OF BOTH THE BLOOD SUPPLY AND THE REFRIGERATORS.

WITH REGARD TO THE CONTENTION THAT YOU WERE TOLD A YEAR AGO THAT THE NEXT PROCUREMENT OF THIS ITEM WOULD BE EFFECTED UNDER TWO-STEP PROCEDURES, WE NOTE THAT THE LETTER OF JULY 6, 1968, FROM THE OFFICE OF THE ASSISTANT SECRETARY OF DEFENSE, INSTALLATIONS AND LOGISTICS, STATES ONLY THAT THE ARMY MEDICAL RESEARCH AND DEVELOPMENT COMMAND IS CONDUCTING A REVIEW OF THE TYPE OF CONTAINER TO BE USED BY THE MILITARY.

THE RESPONSIBILITY FOR DRAFTING PROPER SPECIFICATIONS WHICH REFLECT THE MINIMUM NEEDS OF THE GOVERNMENT AND FOR DETERMINING FACTUALLY WHETHER ARTICLES OFFERED BY BIDDERS MEET THESE SPECIFICATIONS IS PRIMARILY THAT OF THE ADMINISTRATIVE AGENCY CONCERNED. 17 COMP. GEN. 554 (1938). WHILE IT IS THE DUTY OF OUR OFFICE TO DETERMINE WHETHER SPECIFICATIONS AS WRITTEN ARE UNDULY RESTRICTIVE OF COMPETITION, THE FACT THAT A PARTICULAR BIDDER MAY BE UNABLE OR UNWILLING TO MEET THE MINIMUM REQUIREMENTS FOR SUPPLYING THE GOVERNMENT'S NEEDS IS NOT SUFFICIENT TO WARRANT THE CONCLUSION THAT THE SPECIFICATIONS ARE UNDULY RESTRICTIVE. 36 COMP. GEN. 251 (1956). BASED ON THE RECORD BEFORE OUR OFFICE, WE ARE UNABLE TO CONCLUDE THAT THE SPECIFICATIONS OF THE SUBJECT SOLICITATION WERE UNDULY RESTRICTIVE, OR THAT THERE WAS ANY IMPROPRIETY IN THE ESTABLISHMENT OF THOSE SPECIFICATIONS. THEREFORE, THERE IS NO BASIS FOR OUR OFFICE TO DISTURB THE CONTRACT AWARDED TO LIFE-LIKE PRODUCTS, INC.

WITH REGARD TO FUTURE PROCUREMENTS OF THIS ITEM, WE NOTE THAT IN A LETTER DATED AUGUST 19, 1969, THE OFFICE OF THE ASSISTANT SECRETARY OF DEFENSE, INSTALLATIONS AND LOGISTICS, HAS STATED THAT A TWO-STEP PROCUREMENT WOULD BE INITIATED ABOUT THE MIDDLE OF SEPTEMBER 1969, AND THAT IT WOULD BE BASED UPON PERFORMANCE SPECIFICATIONS. THEREFORE, YOU SHOULD HAVE AN OPPORTUNITY TO OFFER ANY CONTAINER YOU BELIEVE WILL MEET THE REQUIRED PERFORMANCE. WE BELIEVE THIS IS A PROPER COURSE OF ACTION IN VIEW OF THE CLAIMS YOU HAVE MADE AS TO THE SUPERIORITY OF YOUR CONTAINERS.

IN THESE CIRCUMSTANCES, WE FIND NO BASIS TO TAKE EXCEPTION TO THIS PROCUREMENT.