B-171600, MAY 19, 1971

B-171600, MAY 19, 1971

BID PROTEST - SUBCONTRACTS - BRAND NAME OR EQUAL DECISION DENYING PROTEST AGAINST AWARD OF A SUBCONTRACT FOR THREE SHIPSETS OF AN ANCHOR HANDLING SYSTEM TO BALDT ANCHOR AND CHAIN UNDER A SOLICITATION ISSUED BY INGALLS WEST DIVISION OF LITTON INDUSTRIES, PRIME CONTRACTOR WITH THE DEPARTMENT OF THE NAVY. WHILE THE PRIME CONTRACTOR WAS NOT ACTING AS PURCHASING AGENT FOR THE GOVERNMENT AND ITS SUBCONTRACTS ARE THEREFORE GENERALLY NOT SUBJECT TO THE STATUTORY AND REGULATORY REQUIREMENTS WHICH GOVERN DIRECT PROCUREMENT BY THE UNITED STATES, IT SHOULD BE NOTED THAT WHERE THE INITIAL SOLICITATION UTILIZED A "BRAND NAME OR EQUAL" SPECIFICATION WHICH DID NOT SET OUT THE SALIENT CHARACTERISTICS OF THE ITEM TO BE PURCHASED, WHEN AN EQUIVALENT WAS FOUND THIS INFORMATION WAS PROPERLY MADE AVAILABLE TO THE OFFERORS AND EACH WAS GIVEN AN OPPORTUNITY TO SUBMIT A PRICE OR MODIFY A PRICE ALREADY SUBMITTED. THEREFORE, THERE IS NO BASIS TO QUESTION THE PROPRIETY OF THE PROCUREMENT.

TO WASHINGTON CHAIN & SUPPLY COMPANY, INC.:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 24, 1970, AND SUBSEQUENT CORRESPONDENCE AND THE LETTER OF MARCH 29, 1971, FROM YOUR COUNSEL, PROTESTING AGAINST THE AWARD OF A SUBCONTRACT TO ANOTHER CONCERN UNDER A SOLICITATION ISSUED BY INGALLS WEST DIVISION OF LITTON INDUSTRIES (INGALLS) WHICH HAS A PRIME CONTRACT (NO. N00024-69-C-0283) WITH THE DEPARTMENT OF THE NAVY.

THE PRIME CONTRACT IS A MULTI-YEAR FIXED PRICE INCENTIVE (SUCCESSIVE TARGETS) CONTRACT FOR THE CONSTRUCTION OF NINE GENERAL PURPOSE AMPHIBIOUS ASSAULT VESSELS (LHA). IN THE PERFORMANCE THEREOF, INGALLS, ON JUNE 24, 1970, ISSUED A SOLICITATION TO 18 POTENTIAL SUPPLIERS FOR THREE SHIPSETS OF AN ANCHOR HANDLING SYSTEM WITH AN OPTION TO PURCHASE SIX MORE SHIPSETS. THE SOLICITATION CALLED FOR SEVEN OF THE NINE COMPONENTS OF THE ANCHOR HANDLING SYSTEM TO BE "DIE LOCK CHAIN OR EQUAL."

TWO OFFERS WERE RECEIVED. BALDT ANCHOR AND CHAIN (BALDT) OFFERED THE DESIGNATED "DIE LOCK" CHAIN WHILE WASHINGTON CHAIN OFFERED AS AN EQUAL "STUD-LINK WELDED CHAIN." FOR THE NINE FULL SHIPSETS, WASHINGTON CHAIN'S PRICE WAS SOME $650,000 LOWER THAN BALDT'S; FOR THE THREE REQUIRED SHIPSETS WASHINGTON CHAIN'S PRICE WAS SOME $195,000 LOWER THAN BALDT'S.

INGALLS HAS ADVISED THE NAVAL SHIP SYSTEMS COMMAND THAT AN ENGINEERING EVALUATION WAS NECESSARY TO DETERMINE WHETHER "STUD-LINK" WAS EQUAL TO "DIE-LOCK." THIS EVALUATION, COMPLETED ON OCTOBER 15, 1970, FOUND THAT THE TWO CHAINS WERE EQUAL. HOWEVER, INGALLS DETERMINED THAT THE TWO OFFERS WERE NOT COMPARABLE SINCE THE "STUD LINK" WELDED TYPE OF CHAIN IS LESS COSTLY THAN "DIE-LOCK" CHAIN. THEREFORE, INGALLS DECIDED TO RESOLICIT OFFERS FROM BOTH FIRMS ON THE "STUD-LINK" TYPE OF CHAIN.

ON OCTOBER 19, 1970, BALDT SUBMITTED AN OFFER ON "STUD-LINK" CHAIN IN RESPONSE TO A SOLICITATION OF OCTOBER 16. ON OCTOBER 28, 1970, INGALLS SENT A TELEGRAM TO YOUR CONCERN ADVISING THAT BALDT HAD BEEN SOLICITED FOR THE "STUD-LINK" CHAIN AND GIVING WASHINGTON THE OPPORTUNITY TO REVISE ITS PRICE ON "STUD-LINK." WASHINGTON SUBMITTED A REVISED QUOTATION ON NOVEMBER 5, 1970.

AS A RESULT OF THE RESOLICITATION, BALDT'S PRICE FOR THE NINE ITEMS AND THE THREE ITEMS OF SHIPSETS WAS SOME $39,000 AND $14,000 LOWER, RESPECTIVELY, THAN YOUR PRICES FOR THESE ITEMS. AWARD WAS MADE TO BALDT AS THE LOW OFFEROR. THE CLAUSE RELATING TO "SUBCONTRACTS" SET FORTH IN ARMED SERVICES PROCUREMENT REGULATION (ASPR) 23-201.1 WAS INCLUDED IN INGALLS' CONTRACT AND PURSUANT TO THE CLAUSE THE CONTRACTING OFFICER CONSENTED TO THE AWARD TO BALDT ON DECEMBER 21, 1970.

IT IS URGED IN YOUR PROTEST THAT BALDT INITIALLY COULD HAVE SUBMITTED ALTERNATIVE OFFERS ON BOTH "DIE-LOCK" AND "STUD-LINK" TYPE OF CHAIN AND THAT THERE IS NO BASIS FOR INGALLS' CONCLUSION THAT THE OFFERS FROM BALDT AND YOUR CONCERN WERE NOT COMPARABLE. YOUR PROTEST IS AGAINST THE RESOLICITATION OF OFFERS AND IT IS YOUR CONTENTION THAT AWARD SHOULD HAVE BEEN MADE TO YOUR CONCERN UNDER THE INITIAL SOLICITATION.

THERE IS NOTHING IN THE RECORD TO INDICATE THAT INGALLS WAS ACTING AS A PURCHASING AGENT FOR THE GOVERNMENT RATHER THAN IN AN INDEPENDENT CAPACITY. WHERE THE PRIME CONTRACTOR HAS INDEPENDENT STATUS, WE HAVE RECOGNIZED THAT THE PRACTICES AND PROCEDURES EMPLOYED IN THE AWARD OF SUBCONTRACTS BY PRIME CONTRACTORS OF THE UNITED STATES ARE GENERALLY NOT SUBJECT TO THE STATUTORY AND REGULATORY REQUIREMENTS WHICH WOULD GOVERN DIRECT PROCUREMENT BY THE UNITED STATES. 49 COMP. GEN. 668 (1970), AND CASES CITED THEREIN. NEVERTHELESS, APPROVAL OF THE SUBCONTRACT AWARD REQUIRED BY THE TERMS OF THE PRIME CONTRACT SHOULD NOT BE GRANTED BY THE GOVERNMENT CONTRACTING OFFICER WHERE SUCH AWARD WOULD BE CONTRARY TO THE INTERESTS OF THE GOVERNMENT. 37 COMP. GEN. 315 (1957).

WE ARE ADVISED THAT INGALLS' INITIAL SOLICITATION WHICH UTILIZED A "BRAND NAME OR EQUAL" TYPE OF SPECIFICATION DID NOT SET OUT THE SALIENT CHARACTERISTICS OF, OR OTHERWISE DEFINITELY DESCRIBE, THE ITEM TO BE PURCHASED. OFFERORS THEREFORE COULD NOT BE SURE WHAT WOULD BE REGARDED AS THE EQUAL TO "DIE-LOCK." AFTER IT WAS ASCERTAINED THAT FOR PURPOSES OF THE PROCUREMENT "STUD-LINK" WAS THE EQUIVALENT OF "LIE-LOCK" THIS INFORMATION WAS PROPERLY MADE AVAILABLE TO THE OFFERORS AND EACH WAS GIVEN AN OPPORTUNITY TO SUBMIT A PRICE ON OR MODIFY A PRICE ALREADY SUBMITTED ON "STUD-LINK." IT IS PERHAPS UNFORTUNATE THAT INTERESTED PARTIES WERE NOT ADVISED INITIALLY THAT "STUD-LINK" WOULD SATISFY THE PURPOSES OF THE PROCUREMENT. HOWEVER, NOT TO HAVE REMEDIED THE DEFECT WHEN IT WAS RECOGNIZED WHERE THE COST OF THE SUBCONTRACT MAY AFFECT THE ULTIMATE COST TO THE GOVERNMENT, IN OUR VIEW, WOULD HAVE BEEN IMPROPER. IN SUM, BOTH OFFERORS WERE GIVEN THE OPPORTUNITY TO SUBMIT REVISED PRICES ON THE "STUD- LINK" WELDED CHAIN; BALDT SUBMITTED THE LOW OFFER TO THE RESOLICITATION AND THAT AWARD WAS MADE ON THE LOW OFFER.

PURSUANT TO OUR REVIEW, WE FIND NO BASIS TO QUESTION THE PROPRIETY OF THE PROCUREMENT OR THE CONTRACTING OFFICER'S CONSENT THERETO.