B-173197, SEP 29, 1971

B-173197, SEP 29, 1971

BID PROTEST - SOLE SOURCE PROCUREMENT DENIAL OF PROTEST AGAINST THE AWARD OF A CONTRACT TO DANA LABORATORIES, INC., BY THE U.S. ARMY MISSILE COMMAND FOR THE SOLE SOURCE PROCUREMENT OF SIXTY VOLTMETERS. IT IS THE RESPONSIBILITY OF THE PROCUREMENT AGENCY TO DRAFT SPECIFICATIONS WHICH REFLECT THE MINIMUM NEEDS OF THE GOVERNMENT. THE AGENCY ALSO HAS THE RESPONSIBILITY FOR DETERMINING WHICH PRODUCT WILL BEST MEET ITS ACTUAL NEEDS. UPON REVIEW OF THE RECORD, GAO FINDS NO BASIS TO OBJECT TO THE PROCEDURES FOLLOWED IN SOLICITING A PROPOSAL FOR THE VOLTMETER FROM A SINGLE SOURCE.

TO NON-LINEAR SYSTEMS, INC.:

WE REFER TO YOUR LETTER OF JUNE 1, 1971, PROTESTING AGAINST THE AWARD OF CONTRACT DAAH01-71-C-1198 TO DANA LABORATORIES, INC. (DANA), BY THE UNITED STATES ARMY MISSILE COMMAND (REDSTONE ARSENAL) FOR THE SOLE SOURCE PROCUREMENT OF SIXTY VOLTMETERS.

REDSTONE ARSENAL ISSUED REQUEST FOR PROPOSALS DAAH01-71-R-0862 (RFP) ON MARCH 22, 1971, FOR SIXTY AC/DC VOLTMETER/RADIOMETERS NEEDED BY THE ARMY METROLOGY AND CALIBRATION CENTER (AMCC). AMCC REQUIRED THAT THE NEW VOLTMETERS BE IDENTICAL WITH THOSE ALREADY IN USE TO PRESERVE THE CONTINUITY OF ITS PROGRAM. THEREFORE THE PROCUREMENT, LIKE FIVE PREVIOUS PURCHASES OF REPLACEMENTS FOR THIS VOLTMETER, WAS RESTRICTED TO DANA WHICH ORIGINALLY PRODUCED THE EQUIPMENT UNDER CONTRACT DAAH01 69-C-0037, AWARDED JULY 12, 1968, AS A RESULT OF COMPETITIVE BIDDING. IN THIS REGARD, WE ARE ADVISED THAT A COST-EFFECTIVENESS STUDY CONDUCTED BY REDSTONE ARSENAL IN 1969 CONCLUDED THAT THE MOST ECONOMICAL AND EFFICIENT METHOD FOR SUPPLYING CALIBRATION AND METROLOGICAL EQUIPMENT WAS TO ISSUE A COMPETITIVE SOLICITATION FOR EACH NEW TYPE OF EQUIPMENT AND TO MAKE SOLE-SOURCE PURCHASES THEREAFTER FROM THE ORIGINAL MANUFACTURER FOR ADDITIONAL ORDERS AND REPAIR PARTS. THIS POLICY WAS JUSTIFIED ON THE GROUND THAT IT WOULD INSURE THE COMPATIBILITY OF CALIBRATION SYSTEMS ALREADY IN THE INVENTORY.

A NONCOMPETITIVE SOLICITATION FOR VOLTMETERS IDENTICAL TO THOSE ALREADY IN USE WAS APPROVED ON MARCH 4, 1971, FOR ISSUANCE TO DANA. DANA SUBMITTED A PROPOSAL WITH A UNIT PRICE OF $6,256, OR A TOTAL COST OF $375,360. NON-LINEAR SYSTEMS, INC. (NLS) SUBMITTED AN UNSOLICITED PROPOSAL WITH AN OFFER OF A PRODUCT WHICH IT SAID WOULD " *** FULLY COMPLY WITH ALL THE SALIENT SPECIFICATIONS ***" OF THE INVITATION AT A UNIT PRICE OF $4,685 OR A TOTAL COST OF $281,100.

WHEN THE PROPOSAL BY NLS WAS RECEIVED AT REDSTONE ARSENAL, THE CONTRACTING OFFICER REQUESTED THAT AMCC EVALUATE IT AND CONFIRM THE NECESSITY OF THE REQUIREMENT THAT IDENTICAL VOLTMETERS BE PURCHASED FROM THE ORIGINAL MANUFACTURER, DANA. AMCC RESPONDED THAT THE PROPOSAL BY NLS WAS TECHNICALLY DEFICIENT AND THAT USE OF ITS EQUIPMENT WOULD REQUIRE A MAJOR MODIFICATION OF THE CURRENT PROGRAM. AMCC ESTIMATED THAT, ALTHOUGH A SAVING OF $94,260 WOULD RESULT FROM PURCHASE OF THE NLS VOLTMETER INSTEAD OF THE DANA MODEL, CONVERSION OF THE ESTABLISHED CALIBRATION SYSTEM TO ACCOMMODATE THE NLS VOLTMETER WOULD INVOLVE THE EXPENDITURE OF $99,551 TO COVER COSTS ADMINISTRATIVELY DETERMINED TO BE RELATED TO SUCH CONVERSION.

NLS HAS PROTESTED AGAINST THE AWARD OF THIS CONTRACT BECAUSE THE PROCUREMENT WAS SOLICITED FROM ONLY ONE SOURCE EVEN THOUGH NLS AND SEVERAL OTHER COMPANIES COULD HAVE FURNISHED THE SAME EQUIPMENT AT A LOWER COST THROUGH COMPETITIVE PROCUREMENT. NLS STATES THAT IT IS ABLE TO SUPPLY EQUIPMENT CONFORMING TO THE SPECIFICATIONS OF THIS RFP AND IS CURRENTLY UNDER CONTRACT TO SUPPLY SIMILAR INSTRUMENTS TO THE ARMY.

IT IS THE RESPONSIBILITY OF THE PROCUREMENT AGENCY TO DRAFT SPECIFICATIONS WHICH REFLECT THE MINIMUM NEEDS OF THE GOVERNMENT. THE AGENCY ALSO HAS PRINCIPAL RESPONSIBILITY FOR DETERMINING WHICH PRODUCT WILL BEST MEET ITS ACTUAL NEEDS. UPON REVIEW OF THE RECORD, WE FIND NO BASIS TO OBJECT TO THE PROCEDURES FOLLOWED IN SOLICITING A PROPOSAL FOR THE VOLTMETERS FROM A SINGLE SOURCE. FURTHERMORE, IT HAS BEEN DETERMINED THAT THE PROCUREMENT OF THIS EQUIPMENT FROM A SOURCE OTHER THAN DANA WOULD RESULT IN ADDITIONAL COSTS GREATER THAN THOSE WHICH MIGHT BE SAVED IF THE PROPOSAL SUBMITTED BY NLS WERE ACCEPTED. SEE B 161700, SEPTEMBER 5, 1967.

ACCORDINGLY, THE PROTEST IS DENIED. SEE, ALSO, B-170377, FEBRUARY 19, 1971.