B-168499, JAN. 20, 1970

B-168499, JAN. 20, 1970

BID PROTEST--EQUIPMENT MEETING MINIMUM NEEDS--NEGOTIATION FEDERAL SUPPLY SCHEDULE ITEMS DECISION DENYING PROTEST OF OPTICAL SCANNING CORPORATION AGAINST PROCUREMENT OF PUNCHED CARD EQUIPMENT FROM IBM BY AIR TRAINING COMMAND, RANDOLPH AIR FORCE BASE. A PROCUREMENT BY THE AIR FORCE FROM A SOURCE UNDER A GSA FEDERAL SUPPLY SCHEDULE CONTRACT DOES NOT REQUIRE FURTHER NEGOTIATION OR ADVERTISING TO ESTABLISH EQUIPMENT RENTAL RATES BECAUSE SUCH RATES HAD ALREADY BEEN NEGOTIATED BY GSA WHEN IT EXECUTED THE FSS CONTRACTS. ALTHOUGH PROTESTANT'S EQUIPMENT MAY HAVE BEEN EQUIVALENT TO OR BETTER THAN EQUIPMENT PURCHASED, DETERMINATION THAT EQUIPMENT MET MINIMUM NEEDS OF AGENCY AT LOWER RENTAL COST IS MATTER PRIMARILY FOR PROCURING AGENCY.

TO OPTICAL SCANNING CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 10, 1969, WITH ENCLOSURE, TO SENATOR HUGH SCOTT, PROTESTING THE PROCUREMENT OF PUNCHED CARD ACCOUNT MACHINE (PCAM) EQUIPMENT FROM THE INTERNATIONAL BUSINESS MACHINES CORPORATION (IBM) BY THE AIR TRAINING COMMAND, RANDOLPH AIR FORCE BASE, TEXAS. SENATOR SCOTT REFERRED YOUR PROTEST TO US FOR CONSIDERATION UNDER OUR BID PROTEST REGULATIONS CODIFIED AT 4 C.F.R. 20.

YOU CONTEND THAT THIS PROCUREMENT WAS MADE WITHOUT REGARD TO COMPETITIVE BIDDING PRACTICES AND, IN EFFECT, CONSTITUTED A "SOLE SOURCE" PROCUREMENT. YOU CLAIM THAT A REPRESENTATIVE OF YOUR FIRM WAS TOLD BY UNSPECIFIED PERSONNEL AT HEADQUARTERS AIR FORCE THAT THE IBM OPTICAL MARK SCANNER HAD ERRONEOUSLY BEEN CLASSIFIED AS PCAM EQUIPMENT. FINALLY, YOU MAINTAIN THAT THE PROCUREMENT OF OPTICAL MARK EQUIPMENT SHOULD HAVE BEEN ACCOMPLISHED BY HANSCOM FIELD (HANSCOM) UNDER COMPETITIVE BIDDING PROCEDURES AND NOT BY ATC AT RANDOLPH AIR FORCE BASE.

WE HAVE BEEN ADVISED BY THE AIR FORCE THAT ITS NEEDS COULD ADEQUATELY BE MET WITH EQUIPMENT HAVING ONLY PUNCHED-CARD OUTPUT CAPABILITY SINCE A TOTAL PROJECTED VOLUME OF 800 TO 900 CARDS PER DAY WAS ANTICIPATED. MEET THIS REQUIREMENT, ORDERS WERE PLACED WITH IBM IN APRIL AND SEPTEMBER 1969, AGAINST ITS GSA SUPPLY SCHEDULE CONTRACT (GS-00S-76198) FOR 12 AND ONE IBM 1230 MACHINES, RESPECTIVELY, WITH 534 CARD PUNCH AND ASSOCIATED FEATURES. AT THE TIME THESE ORDERS WERE PLACED, THE OPTICAL SCANNING CORPORATION'S (OPSCAN) 100 DC PUNCHED-CARD SYSTEM WAS THE MINIMUM SYSTEM WITH CARD PUNCHING CAPABILITY LISTED ON OPSCAN'S GSA SUPPLY SCHEDULE CONTRACT GS-00S 76162, AND, AS SUCH, WAS DETERMINED TO BE THE MINIMUM OPSCAN SYSTEM MEETING ATC REQUIREMENTS. THE IBM SYSTEM RENTED FOR $457 A MONTH WHILE THE OPSCAN SYSTEM RENTED FOR $995 A MONTH. (THIS FIGURE WAS REDUCED TO $829 A MONTH BY OPSCAN'S GSA SUPPLY SCHEDULE CONTRACT GS-00S- 79852, SIGNED OCTOBER 6, 1969.)

THE AIR FORCE ALSO ADVISES THAT THE PROCUREMENT OF PUNCHED-CARD EQUIPMENT ALONE DOES NOT REQUIRE THAT THE PROCUREMENT BE MADE BY HANSCOM. WHILE HANSCOM WAS INVOLVED IN A PRIOR PROCUREMENT OF OPTICAL MARK EQUIPMENT, IN THAT INSTANCE THE REQUIREMENTS TO BE MET NECESSITATED THE PROCUREMENT OF A SYSTEM WITH MORE SOPHISTICATED CAPABILITIES THAN MERELY PUNCHED-CARD OUTPUT. IN THIS CONNECTION, WE NOTE THE AIR FORCE'S STATEMENT THAT WHILE THE GENERAL CLASS OF EQUIPMENT KNOWN AS OPTICAL MARK READING EQUIPMENT IS NOT NECESSARILY PUNCHED-CARD EQUIPMENT, CERTAIN MAKES AND MODELS, SUCH AS THE IBM 1230 WITH CARD PUNCH AND THE OPSCAN 100 DC PUNCHED-CARD SYSTEM, ARE CONSIDERED TO BE PCAM.

FINALLY, THE AIR FORCE STATES IT HAS NO KNOWLEDGE AS TO THE STATEMENT YOU CLAIM WAS MADE BY HEADQUARTERS AIR FORCE PERSONNEL CONCERNING THE ALLEGED ERRONEOUS CATEGORIZATION OF THE IBM OPTICAL MARK SCANNER AS PCAM. TO THE EXTENT YOUR POSITION IS CONTRARY TO THAT OF THE AIR FORCE WITH REGARD TO WHETHER SUCH A STATEMENT WAS MADE, A DISPUTE OF FACT EXISTS WHICH MUST BE RESOLVED IN FAVOR OF THE ADMINISTRATIVE AGENCY. SEE 40 COMP. GEN. 178 (1960); B-167302, OCTOBER 17, 1969. IN ANY EVENT, IF ANY SPECIAL ADVANTAGE ACCRUED TO THE IBM SYSTEM BY VIRTUE OF ITS CATEGORIZATION, THE SAME ADVANTAGE MUST HAVE INURED TO OPSCAN'S SYSTEM SINCE BOTH SYSTEMS WERE CONSIDERED BY THE AIR FORCE TO BE PCAM.

ALTHOUGH WE FEEL THAT THE NONINVOLVEMENT OF HANSCOM HAS BEEN ADEQUATELY EXPLAINED BY THE AIR FORCE, THE USE OF THAT FACILITY FOR CERTAIN PROCUREMENTS MERELY REFLECTS AN AIR FORCE POLICY WHICH IS PRIMARILY THE CONCERN OF THE AGENCY. SEE B-167244, DECEMBER 4, 1969.

FURTHERMORE, WE CANNOT AGREE WITH YOUR CONTENTION THAT ATC'S FAILURE TO USE COMPETITIVE BIDDING PROCEDURES RESULTED IN A SOLE SOURCE PROCUREMENT. UNDER PARAGRAPH 5-102.3(A) OF THE ARMED SERVICES PROCUREMENT REGULATION THE AIR FORCE IS REQUIRED TO PROCURE PUNCHED CARD MACHINE EQUIPMENT FROM AN APPROPRIATE FEDERAL SUPPLY SCHEDULE (FSS) CONTRACTOR. BOTH IBM AND OPSCAN HAD NEGOTIATED CONTRACTS WITH GSA WHICH ESTABLISHED MONTHLY RENTALS FOR THEIR RESPECTIVE EQUIPMENT. THE INSTANT PROCUREMENT WAS IN FACT MADE UNDER A FSS CONTRACT WITH IBM. FURTHER NEGOTIATION OR THE USE OF FORMAL ADVERTISING TO ESTABLISH RENTAL RATES WAS NOT REQUIRED OF ATC BECAUSE THE RATES HAD ALREADY BEEN NEGOTIATED BY GSA WHEN IT EXECUTED THE GSA SUPPLY SCHEDULE CONTRACTS.

WHILE OPSCAN'S SYSTEM MAY HAVE BEEN EQUIVALENT TO, OR EVEN HAD MORE CAPABILITIES THAN THE IBM SYSTEM, THE FACT REMAINS THAT THE AIR FORCE DETERMINED THAT THE IBM SYSTEM ADEQUATELY MET ITS MINIMUM NEEDS AT A RENTAL SIGNIFICANTLY LOWER THAN YOUR OWN. DETERMINATIONS AS TO THE NEEDS OF AN AGENCY AND WHICH PRODUCTS MEET THOSE NEEDS ARE MATTERS PRIMARILY WITHIN THE JURISDICTION OF THE PROCURING AGENCY WITH WHICH WE WILL NOT INTERFERE UNLESS THEY CLEARLY APPEAR TO INVOLVE BAD FAITH OR ARE NOT BASED ON SUBSTANTIAL EVIDENCE. SEE B-149917, OCTOBER 19, 1962. NO SUCH SHOWING HAS BEEN MADE HERE.