B-174026, FEB 8, 1972

B-174026, FEB 8, 1972

BID PROTEST - SOLE-SOURCE PROCUREMENT - BUY AMERICAN ACT DECISION DENYING PROTEST OF OPTICS TECHNOLOGY, INC., AGAINST AWARD OF A CONTRACT TO THE EALING CORPORATION UNDER AN RFP INVOLVING THE SOLE SOURCE PROCUREMENT OF AN ELECTRO-OPTICAL TRANSFER SYSTEM FOR THE NAVAL RECONNAISSANCE AND TECHNICAL SUPPORT CENTER, ISSUED BY THE NAVY PURCHASING OFFICE. THE PROCURING ACTIVITY DETERMINED THAT SATISFACTORY ELECTRO-OPTICAL EQUIPMENT COULD ONLY BE OBTAINED THROUGH A FOREIGN MANUFACTURER AND RECEIVED APPROVAL FOR AN EXCEPTION TO THE RESTRICTIONS OF THE BUY AMERICAN ACT FROM THE ASSISTANT SECRETARY OF THE NAVY. WHERE THE CIRCUMSTANCES SO DEMAND, SUCH EXCEPTIONS ARE ALLOWABLE UNDER ASPR 6 103.2. SINCE THE CONTRACTING AGENCY IS IN THE BEST POSITION TO DETERMINE ITS SPECIFIC NEEDS, ABSENT SOME COMPELLING REASON, ITS DECISIONS WILL NOT BE INTERFERED WITH. 44 COMP. GEN. 590 (1965). ACCORDINGLY, THE PROTEST IS DENIED.

TO OPTICS TECHNOLOGY, INC.:

REFERENCE IS MADE TO YOUR LETTERS OF SEPTEMBER 2 AND 8, 1971, PROTESTING THE AWARD OF A CONTRACT TO THE EALING CORPORATION (EALING) UNDER REQUEST FOR PROPOSALS (RFP) N00600-71-R-5669, ISSUED BY THE UNITED STATES NAVY PURCHASING OFFICE (NPO), WASHINGTON, D.C.

THE RFP INVOLVED THE SOLE-SOURCE PROCUREMENT OF AN ELECTRO-OPTICAL TRANSFER SYSTEM FOR THE NAVAL RECONNAISSANCE AND TECHNICAL SUPPORT CENTER, REFERRED TO BY THE NAVY IN MATERIAL QUOTED BELOW AS NAVRECONTECHSUPPCEN. SINCE THE SYSTEM REQUIRED WAS MANUFACTURED IN ENGLAND, NPO REQUESTED AND RECEIVED FROM THE ASSISTANT SECRETARY OF THE NAVY, INSTALLATION AND LOGISTICS, APPROVAL FOR AN EXCEPTION TO THE RESTRICTIONS OF THE BUY AMERICAN ACT (ACT), 41 U.S.C. 10 A-D, AS IMPLEMENTED BY SECTION 6- 103.2(C)(I) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR). THE BASIS UPON WHICH THE EXCEPTION WAS GRANTED WAS THE NONAVAILABILITY OF COMPARABLE ELECTRO-OPTICAL EQUIPMENT OF DOMESTIC ORIGIN AND THE CONSIDERABLE AMOUNT OF DEVELOPMENT WORK AND OPERATIONAL DELAYS THAT WOULD RESULT IN INTEGRATING ANY SIMILAR DOMESTIC EQUIPMENT INTO THE EXISTING SYSTEM.

IN ACCORDANCE WITH 10 U.S.C. 2304(A)(2), A DETERMINATION AND FINDINGS WAS ISSUED JUSTIFYING THE USE OF NEGOTIATION BECAUSE THE PUBLIC EXIGENCY WOULD NOT PERMIT THE DELAY INCIDENT TO FORMAL ADVERTISING. JUSTIFICATION FOR PROCEEDING ON A SOLE-SOURCE BASIS CONSISTED OF A DETERMINATION THAT ONLY EALING MANUFACTURED A SYSTEM FULFILLING THE REQUIREMENTS OF THE USING ACTIVITY.

YOU PROTEST THE WAIVER OF THE BUY AMERICAN ACT AND CONTEND THAT COMPARABLE EQUIPMENT IS MANUFACTURED IN THE UNITED STATES.

IN RESPONSE TO THIS CONTENTION, THE NPO REPORT ON YOUR PROTEST TO OUR OFFICE ADVISES:

"4. THE ALLEGATION THAT THE EQUIPMENT DESCRIBED IS AVAILABLE FROM UNITED STATES MANUFACTURERS IS NOT PROVEN NOR TRUE IN THE PROFESSIONAL OPINION OF THE NAVRECONTECHSUPPCEN PHYSICIST STAFF AND PROCUREMENT STAFF. THE PARTICULAR ASPECT OF THIS REQUIREMENT NOT MET BY ANY KNOWN U.S. COMMERCIALLY AVAILABLE EQUIPMENT IS THE CONCURRENT MEASUREMENT OF PHASE AND MODULATION TRANSFER FUNCTIONS. IT IS KNOWN BY THE NAVRECONTECHSUPPCEN STAFF THAT MANY U.S. OPTICAL RESEARCHERS HAVE MADE SUCH MEASUREMENTS IN LABORATORY ENVIRONMENTS, USING EXPERIMENTAL EQUIPMENT; AND FURTHER, THAT MANY U.S. ENGINEERS ARE COMPETENT TO DESIGN SUCH EQUIPMENTS. HOWEVER, OUR UNDERSTANDING IS THAT NO SUCH DESIGNS HAVE BEEN REDUCED TO PRACTICE IN THE FORM OF COMMERCIALLY AVAILABLE MEASUREMENT SYSTEMS, WITH THE REQUIRED CALIBRATION ACCURACY TRACABLE TO ANY NATIONAL STANDARDS AUTHORITY.

"THE REQUIRED IMAGE ANALYSIS MOUNTING SYSTEM, CONSISTING OF A SURFACE TABLE AND OF WAYS AND MOUNTS FOR USE WITH THE OPTICAL TRANSFER FUNCTION EQUIPMENT, NECESSARILY REQUIRED DETAILED SPECIFICATION IN ORDER TO ENSURE THE FULL COMPATIBILITY IN ALL DETAIL WITH THE OTF EQUIPMENT.

"IT IS UNDERSTOOD THAT SUCH EQUIPMENT COULD BE MANUFACTURED BY MANY U.S. VENDORS WHEN GIVEN THE APPROPRIATE SPECIFICATIONS. AS THESE DETAILED ENGINEERING PRODUCTION SPECIFICATIONS AND DIMENSIONS WERE NOT KNOWN TO NAVRECONTECHSUPPCEN STAFF, THEY WERE NOT ABLE TO PROVIDE PROCUREMENT DATA FOR PIECEMEAL PROCUREMENT FROM U.S. VENDORS. NOR COULD THEY COMPILE A SET OF ACCEPTANCE TEST PROCEDURES WHICH WOULD ENSURE COMPATIBILITY WITH THE OTF EQUIPMENT UNTIL THE OTF EQUIPMENT WAS PROCURED AND MEASURED EXTENSIVELY TO DECIDE ON THE QUALITIES NECESSARY IN THE MOUNTING SYSTEM TO ENSURE THAT THE REQUIRED ACCURACIES WOULD BE AVAILABLE FROM THE OTF. THE HIGHLY SPECIALIZED ENGINEERING SKILLS REQUIRED TO SO SPECIFY THE MOUNTING SYSTEM ARE NOT AVAILABLE WITHIN THE STAFF OF THE NAVRECONTECHSUPPCEN."

WHILE IT IS A GENERAL REQUIREMENT OF LAW AND REGULATION TO OBTAIN GOODS PRODUCED OR MANUFACTURED IN THE UNITED STATES, IT MUST BE RECOGNIZED THAT THE PRIMARY OBJECTIVE OF THE SPECIFICATIONS SET FORTH BY NPO IS TO REFLECT THE ACTUAL NEEDS OF THE GOVERNMENT. WHERE THE LEGITIMATE NEEDS OF THE GOVERNMENT CAN BE SATISFIED ONLY BY PRODUCTS PRODUCED IN FOREIGN COUNTRIES, THE STATUTE AND IMPLEMENTING REGULATIONS SPECIFICALLY PERMIT A CONTRACTING AGENCY TO OBTAIN AN EXCEPTION TO THE PROVISIONS OF THE ACT. SEE ASPR 6-103.2 ENTITLED "NONAVAILABILITY IN THE UNITED STATES," WHICH READS IN PERTINENT PART, AS FOLLOWS:

"(A) THE BUY AMERICAN ACT DOES NOT APPLY TO ARTICLES, MATERIALS, OR SUPPLIES OF A CLASS OR KIND WHICH THE GOVERNMENT HAS DETERMINED ARE NOT MINED, PRODUCED, OR MANUFACTURED IN THE UNITED STATES IN SUFFICIENT AND REASONABLY AVAILABLE COMMERCIAL QUANTITIES AND OF A SATISFACTORY QUALITY.

"(B) ANY PROCUREMENT OF FOREIGN ARTICLES, MATERIALS OR SUPPLIES, *** SHALL BE MADE ONLY AFTER A DETERMINATION OF NONAVAILABILITY HAS BEEN MADE IN ACCORDANCE WITH DEPARTMENTAL PROCEDURES. EACH DETERMINATION ALSO SHALL INCLUDE A REFERENCE TO THE BUY AMERICAN ACT (41 U.S.C. 10A-D), A DESCRIPTION OF THE ITEM OR ITEMS BEING PROCURED, THE UNIT, QUANTITY, AND ESTIMATED DELIVERY COST, A BRIEF STATEMENT ESTABLISHING THE NECESSITY FOR THE PROCUREMENT AND THE NONAVAILABILITY OF A SIMILAR ITEM OR ITEMS OF DOMESTIC ORIGIN. A SIGNED COPY OF THE DETERMINATION SHALL BE MADE PART OF THE CONTRACT FILE. WHEN A DETERMINATION HAS BEEN MADE THAT THE RESTRICTIONS OF THE BUY AMERICAN ACT ARE INAPPLICABLE FOR THE END PRODUCTS BEING PURCHASED, NOTIFICATION TO THIS EFFECT SHALL BE INCLUDED IN THE SOLICITATION AND CONTRACT."

IN THIS INSTANCE THE USING ACTIVITY HAS DETERMINED THAT EQUIPMENT MEETING ITS MINIMUM NEEDS IS NOT MADE IN THE UNITED STATES IN SUFFICIENTLY AVAILABLE COMMERCIAL QUANTITIES OF THE REQUISITE QUALITY. OUR REVIEW OF THE RECORD INDICATES THERE WERE SUFFICIENT GROUNDS FOR REACHING THIS DETERMINATION AND WE THEREFORE HAVE NO BASIS UPON WHICH TO OBJECT TO THE ABOVE DETERMINATION. IN REGARD TO YOUR ALLEGATION THAT SIMILAR UNITED STATES MANUFACTURED EQUIPMENT COULD BE INTEGRATED INTO THE EXISTING SYSTEM AT THE USING ACTIVITY WITHOUT CREATING SIGNIFICANT DELAYS, THE NPO REPORT STATES, AS FOLLOWS: " *** THE PROFESSIONAL OPINION OF THE NAVRECONTECHSUPPCEN PHYSICIST STAFF IS THAT INTEGRATION OF U.S. MANUFACTURED EQUIPMENT COULD INVOLVE CONSIDERABLE DEVELOPMENTAL WORK AND THAT ACCESS TO THE EQUIPMENT ONCE INSTALLED IS NECESSARILY LIMITED, ON A STRICT NEED-TO-KNOW BASIS, TO NAVY PERSONNEL. FURTHER, ON THE BASIS OF A REVIEW OF THE NAVRECONTECHSUPPCEN ORGANIZATIONAL AND OPERATIONAL PLANNING IN AREAS WHICH ARE DIRECTLY IMPACTED BY THE AVAILABILITY OF THE FULL INTEGRATED ELECTRO/OPTICAL SYSTEM, IT IS FELT THAT INTEGRATION WOULD INVOLVE SIGNIFICANT OPERATIONAL DELAYS WHICH WOULD EXTEND INTO YEARS.

"AS TYPICAL FACETS OF THE FORESEEN OPERATIONAL DELAYS WHICH WOULD RESULT FROM THE SYSTEM INTEGRATION PROCESS DISCUSSED ABOVE WE CITE: FIRST, THE DELAY IN OBTAINING THE THREE ELEMENTS OF THE PROCUREMENT, *** . (OPTICAL TRANSFER FUNCTION MEASURING SYSTEM, UNIVERSAL IMAGE ANALYSIS MOUNTING SYSTEM, AND PRECISION OPTICAL BENCH TEST SYSTEM). THE SUCCESSIVE PROCUREMENT DELAYS INVOLVED WOULD NECESSARILY AFFECT THE OPERATIONAL MISSION OF NAVRECONTECHSUPPCEN. THE DELAY WOULD BE CAUSED SINCE THE ELEMENTS WOULD HAVE TO BE PROCURED IN A SEQUENTIAL MANNER WITH THE SPECIFICATIONS OF EACH SUCCESSIVE PART BEING DETERMINED BY MEASUREMENTS MADE ON THE LAST PART DELIVERED.

"SECONDLY, IT IS INTENDED THAT THE OPTICAL BENCH *** SHOULD BE USED IN TESTS OF RESPONSE OF SUCH OPTICAL SYSTEMS TO CERTAIN CLASSES OF VERY COMPLEX TARGETS. THE RESULTS OF THESE TESTS SHOULD BE CORRELATED WITH THE RESULTS OF THE MEASUREMENTS OF THE FULL OTF, NOT MERELY MTF, WHICH ARE TO BE MADE ON THE SYSTEM RESULTING FROM THE INTEGRATION OF THE (FIRST TWO ELEMENTS SET FORTH IN BRACKETS, SUPRA) ELEMENTS DESCRIBED *** . ADDITIONALLY, AND VERY SIGNIFICANT, DELAY WILL RESULT IF THE PROCESS OF CORRELATION IS COMPLICATED BY THE NEED TO DETERMINE, BY A PROCESS OF VERY TEDIOUS AND PAINSTAKING INVESTIGATION, THE OPTICAL RESULTS OF THE USE OF NON-COMPATIBLE MOUNTING AND MOVING ELEMENTS IN THE TWO PHASES OF THIS WORK.

"FURTHER, IT IS INTENDED TO USE THE RESULTS OF TEST AND INVESTIGATIONS MADE ON THE INTEGRATED SYSTEM IN THE SETTING UP OF REQUIREMENTS AND SPECIFICATIONS FOR NEW, AND SOMETIMES NOVEL, ELECTRO OPTICAL SYSTEMS FOR USE BY THE NAVAL INTELLIGENCE COMMAND. IN THE INTERPRETATION OF THESE RESULTS, IT IS MOST IMPORTANT THAT INVESTIGATORS ENJOY PROFESSIONAL CONTACT WITH THE USERS OF SIMILAR EQUIPMENTS IN OTHER CENTERS OF OPTICAL TESTING AND INVESTIGATION. THE TRANSFER AND APPLICATION OF THE RESULTS OF THESE INVESTIGATIONS TO MATTERS OF NAVY CONCERN WOULD BE RENDERED MORE DIFFICULT, AND THIS TO AN EXTENT CAUSING VERY LONG DELAYS AND CONSIDERABLE EXPENSE, IF THE INTEGRATED SYSTEM IN USE AT NAVRECONTECHSUPPCEN DIFFERED SIGNIFICANTLY IN EITHER ITS ENGINEERING DETAILS OR IN ITS METHOD OF DETERMINING OPTICAL PARAMETERS FROM THE EQUIPMENTS USED IN THE OTHER CENTERS OF INVESTIGATION."

THE ABOVE-QUOTED STATEMENT IS THE CONSIDERED OPINION OF THE USING ACTIVITY BASED UPON THE TECHNICAL EXPERTISE AVAILABLE TO IT THAT THE INTEGRATION OF UNITED STATES MANUFACTURED EQUIPMENT IS NOT PRACTICABLY FEASIBLE. WE BELIEVE THAT THE STATEMENT ADEQUATELY DEMONSTRATES THAT THE USING ACTIVITY DID NOT ACT IMPROPERLY IN DETERMINING THAT A SIMILAR DOMESTIC MANUFACTURE SYSTEM COULD NOT BE INTEGRATED IN A FEASIBLE MANNER BECAUSE SIGNIFICANT OPERATIONAL DELAYS WOULD BE INVOLVED. THAT BEING THE CASE, THE CONTRACTING AGENCY PROPERLY EFFECTED THE PROCUREMENT ON A SOLE- SOURCE BASIS TO ASSURE THE DESIRED COMPATIBILITY OF THE ITEMS BEING PROCURED WITH EXISTING EQUIPMENT. SEE B-173683, NOVEMBER 29, 1971.

WE TURN NOW TO YOUR ALLEGATION THAT THE AWARD TO EALING ON A SOLE SOURCE BASIS WAS IMPROPER BECAUSE COMPETITION WAS AVAILABLE.

THE DETERMINATION AND FINDINGS, WHICH GRANTED THE AUTHORITY TO NEGOTIATE THE CONTRACT, REFERENCED THE CITING OF AN 06 PRIORITY DESIGNATOR BY THE USING ACTIVITY IN THE ORIGINAL PURCHASE REQUIREMENT. ASPR 3-202.3 STATES THAT A DETERMINATION AND FINDINGS AUTHORIZING NEGOTIATION NEED ONLY STATE THE EXISTENCE OF A PRIORITY DESIGNATOR 1 THROUGH 6 IN ORDER TO JUSTIFY USE OF THE PUBLIC EXIGENCY EXCEPTION. FURTHER, A DETERMINATION UNDER THAT EXCEPTION IS ACCORDED FINALITY BY THE PROVISIONS OF 10 U.S.C. 2310(B), AND IS, THEREFORE, NOT SUBJECT TO QUESTION BY OUR OFFICE. WHILE A DETERMINATION AND FINDINGS UNDER THAT EXCEPTION DOES NOT, IN AND OF ITSELF, AUTHORIZE SOLE-SOURCE PROCUREMENT, THE VALID USE OF THAT EXCEPTION RESERVES A CONSIDERABLE AMOUNT OF DISCRETION IN THE CONTRACTING AGENCY. OUR OFFICE WILL NOT QUESTION THE DECISION TO MAKE A SOLE-SOURCE AWARD UNLESS IT IS CLEAR FROM THE RECORD THAT THE CONTRACTING OFFICER HAS EXERCISED THE DISCRETION VESTED IN HIM IN AN ARBITRARY OR CAPRICIOUS MANNER. 44 COMP. GEN. 590 (1965); B-161224, AUGUST 9, 1967; B-158134, MARCH 3, 1966. OUR REVIEW OF THE RECORD REVEALS NO ARBITRARY OR CAPRICIOUS EXERCISE OF DISCRETION IN THE NPO DECISION TO EFFECT THE PROCUREMENT ON A SOLE-SOURCE BASIS.

IN REGARD TO YOUR ALLEGATION THAT THE REQUIREMENT FOR A SYSTEM WITH A 240 -DAY DELIVERY SCHEDULE IS EXCESSIVE AND THEREFORE NOT A PUBLIC EXIGENCY, WE HAVE FREQUENTLY STATED THAT THE CONTRACTING AGENCY IS IN THE BEST POSITION TO DETERMINE ITS SPECIFIC NEEDS AND OUR OFFICE WILL NOT OVERRULE THEIR DETERMINATION EXCEPT FOR SOME COMPELLING REASON. IN THE PRESENT MATTER IT APPEARS THAT IN VIEW OF THE COMPLEX NATURE OF THE EQUIPMENT BEING PROCURED THE TIME ALLOTTED FOR DELIVERY IS NOT EXCESSIVE. FURTHERMORE, IT IS REPORTED THAT THE PUBLIC EXIGENCY EXISTS DUE TO THE TASKING, STAFFING AND ORGANIZATIONAL SCHEDULE OF USING ACTIVITY. IN VIEW OF THIS, WE WOULD NOT BE JUSTIFIED IN CONCLUDING THAT UNDER THE CIRCUMSTANCES THE TIME ALLOTTED FOR DELIVERY WAS EXCESSIVE. IN YOUR CORRESPONDENCE YOU CLAIM TO HAVE FURNISHED THE TYPE OF EQUIPMENT BEING PROCURED IN LESS THAN HALF THE SPECIFIED DELIVERY TIME. HOWEVER, YOU HAVE SUPPLIED NO EVIDENCE TO SUPPORT THIS STATEMENT, AND NPO HAS ADVISED US THAT THEY ARE UNAWARE OF YOUR HAVING DONE SO.

ACCORDINGLY, FOR THE REASONS SET FORTH ABOVE, YOUR PROTEST MUST BE DENIED.