B-174384, MAY 9, 1972

B-174384, MAY 9, 1972

BID PROTEST - ALLEGED IMPROPER SOLICITATION DECISION DENYING THE PROTEST OF STANDARD-THOMSON CORPORATION AGAINST AWARD OF A CONTRACT TO A. C. BALL COMPANY UNDER AN RFP INITIALLY ISSUED ON A SOLE-SOURCE BASIS BY THE ARMY MISSILE COMMAND FOR A QUANTITY OF HYDRAULIC COOLER ASSEMBLIES. THE RFP WAS SENT TO BALL AT ITS REQUEST, PURSUANT TO ASPR 1-1002.1. SINCE STANDARD-THOMSON WAS AWARE OF BALL'S PROTEST, THE GOVERNMENT'S FAILURE TO MAKE FORMAL NOTIFICATION, AS REQUIRED BY ASPR 3-509 AND 2 407.8, MAY BE CONSIDERED A MINOR PROCEDURAL DEFECT. BOTH FIRMS SUBMITTED PROPOSALS BASED ON THE SAME DELIVERY PERIOD AND BOTH CERTIFIED THAT THEIR ITEMS WOULD BE INTERCHANGEABLE WITH EXISTING EQUIPMENT. PURSUANT TO ASPR 1-1902, A DETERMINATION AS TO WHETHER FIRST ARTICLE TESTING SHOULD BE REQUIRED IS SUBJECT TO CONSIDERATIONS OF COST, RISK, AND TIME OF DELIVERY. SUCH DETERMINATION IS PRIMARILY WITHIN THE DISCRETION OF THE CONTRACTING OFFICER AND WILL ONLY BE QUESTIONED WHEN THE DECISION RESTRICTS COMPETITION OR VIOLATES APPLICABLE LAW AND REGULATIONS. FOR THE FOREGOING REASONS, THE PROTEST MUST BE DENIED.

TO STANDARD-THOMSON CORPORATION:

THIS IS IN REPLY TO LETTERS DATED JANUARY 25 AND APRIL 3, 1972, WITH ENCLOSURES, FROM YOUR ATTORNEYS SETTING FORTH THE BASIS FOR YOUR PROTEST AGAINST THE AWARD OF CONTRACT NO. DAAH01-72-C-0514, BY THE ARMY MISSILE COMMAND (MICOM), TO A. C. BALL COMPANY FOR 160 HYDRAULIC OIL COOLER ASSEMBLIES.

A REQUEST FOR PROPOSAL (RFP) WAS ISSUED TO YOUR FIRM ON OCTOBER 12, 1971, WITH A CLOSING DATE OF OCTOBER 29, 1971. THE RECORD SHOWS THAT THE SOLICITATION CONTAINED DETAILED PERFORMANCE SPECIFICATIONS AND WAS LIMITED TO YOUR FIRM SINCE YOU WERE THE PRIOR MANUFACTURER OF THE ITEM AND THE GOVERNMENT HAD NOT OBTAINED ALL DESIGN AND MANUFACTURING DETAILS. IN THIS RESPECT THE RFP INCLUDED DD FORM 1707, INFORMATION TO OFFERORS, WHICH STATED THAT THE PROCUREMENT WAS RESTRICTED TO YOUR FIRM. IT SHOULD BE NOTED, HOWEVER, THAT THE SPECIFICATIONS DID NOT REQUIRE THAT THE EQUIPMENT BE MANUFACTURED BY YOUR FIRM.

SUBSEQUENTLY, THE A. C. BALL COMPANY REQUESTED THAT IT BE FURNISHED AN RFP PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1 1002.1. THIS REGULATION PROVIDES, IN PERTINENT PART, THAT

"WHEN A SOLICITATION FOR PROPOSALS HAS BEEN LIMITED AS A RESULT OF A DETERMINATION THAT ONLY A SPECIFIED FIRM OR FIRMS POSSESS THE CAPABILITY TO MEET THE REQUIREMENTS OF A PROCUREMENT, REQUESTS FOR PROPOSALS SHALL BE MAILED OR OTHERWISE PROVIDED UPON REQUEST TO FIRMS NOT SOLICITED, BUT ONLY AFTER ADVICE HAS BEEN GIVEN TO THE FIRM MAKING THE REQUEST AS TO THE REASONS FOR THE LIMITED SOLICITATION AND THE UNLIKELIHOOD OF ANY OTHER FIRM BEING ABLE TO QUALIFY FOR A CONTRACT AWARD UNDER THE CIRCUMSTANCES

ON OCTOBER 21 A COPY OF THE RFP WAS FURNISHED BALL AND AN AMENDMENT TO THE SOLICITATION WAS ISSUED EXTENDING THE CLOSING DATE TO NOVEMBER 8, 1971.

TWO OFFERS WERE RECEIVED FOR 160 COOLERS; A. C. BALL COMPANY WAS LOW AT A UNIT PRICE OF $402.50 EACH, WHILE YOUR FIRM OFFERED A PRICE OF $580 EACH. AFTER RECEIPT OF OFFERS, AN INVESTIGATION WAS COMMENCED TO DETERMINE BALL'S CAPABILITY AND THE SUFFICIENCY OF ITS DRAWINGS FOR ADEQUATE PERFORMANCE. BALL ASSURED THE GOVERNMENT THAT THE COMPANY WOULD MEET THE SPECIFICATIONS AND WOULD FURNISH COMPONENTS INTERCHANGEABLE WITH THOSE OF YOUR FIRM WHICH WERE THEN IN THE SYSTEM. THIS ASSURANCE WAS APPARENTLY BASED UPON STUDIES ("REVERSE ENGINEERING") CONDUCTED BY BALL ON A COOLER UNIT AT AN ARMY DEPOT WHICH RESULTED IN THE UPDATING OF BALL'S DRAWINGS FOR THE UNIT.

AS A RESULT, THE CONTRACTING OFFICER CONCLUDED THAT BALL POSSESSED A FULL UNDERSTANDING OF THE REQUIREMENT AND COULD FURNISH AN ACCEPTABLE ITEM. CONTRACT WAS AWARDED TO BALL ON DECEMBER 29, 1971.

YOUR PROTEST IS MADE ON SEVERAL BASES WHICH ARE CONSIDERED IN TURN. FIRST YOU TAKE THE POSITION THAT THE GOVERNMENT ERRONEOUSLY FAILED TO ADVISE YOU OF BALL'S PROTEST AGAINST THE RESTRICTED PROCUREMENT, AS REQUIRED BY ASPR 3-509 AND 2-407.8, AND THAT THE GOVERNMENT WAS IN ERROR IN FAILING TO AMEND DD FORM 1707 TO INDICATE THAT THE PROCUREMENT WAS NO LONGER RESTRICTED TO YOUR FIRM.

WHILE YOU WERE NOT GIVEN FORMAL NOTICE OF BALL'S PROTEST AS CONTEMPLATED BY THE REGULATIONS, WE NOTE THAT AFTER RECEIPT OF THE SOLICITATION AMENDMENT WHICH EXTENDED THE CLOSING DATE YOU CALLED A GOVERNMENT REPRESENTATIVE AT MICOM AND WERE ADVISED THAT A PROTEST HAD BEEN LODGED AGAINST RESTRICTING THE PROCUREMENT TO YOUR FIRM. INASMUCH AS YOU HAD BEEN ADVISED INFORMALLY OF THE PROTEST AND THE SUBSTANCE THEREOF, WE BELIEVE THAT THE CONTRACTING OFFICER'S FAILURE TO FOLLOW THE PROCEDURES CONTEMPLATED BY ASPR 2-407.8 IS A MINOR PROCEDURAL DEFECT NOT AFFECTING THE LEGALITY OF THE AWARD. IN CONNECTION WITH THE GOVERNMENT'S FAILURE TO AMEND THE INFORMATION APPEARING ON DD FORM 1707, WE ARE OF THE OPINION THAT THE PURPOSE OF THE FORM IS TO GIVE NOTICE OF THE RESTRICTION SO AS NOT TO MISLEAD OR ENCOURAGE PROPOSALS FROM OTHER CONCERNS WHO DO NOT POSSESS THE NECESSARY CAPABILITIES FOR SUPPLYING THE ITEM. WE FIND NO BASIS FOR CONCLUDING THAT THE CONTRACTING OFFICER WAS REQUIRED TO REMOVE THE RESTRICTION BEFORE RECEIPT OF OFFERS SINCE IT WAS ONLY AFTER THE CLOSING DATE AND THE INVESTIGATION OF BALL'S CAPABILITIES THAT HE WAS AWARE THAT COMPETITION WAS AVAILABLE FOR THE PROCUREMENT. ALSO, WE MUST CONCUR IN THE AGENCY'S POSITION THAT THE DIFFERENCE IN THE OFFERED PRICES WAS SO SUBSTANTIAL THAT NOTICE OF THE REMOVAL OF THE SOLE-SOURCE RESTRICTION WOULD NOT HAVE INFLUENCED A REPUTABLE CONCERN SUCH AS STANDARD -THOMSON TO REDUCE ITS PRICE BELOW THE PRICE LEVEL OF BALL'S OFFER. THEREFORE, WE DO NOT BELIEVE A SHOWING HAS BEEN MADE THAT YOU WERE PREJUDICED BY THE CONTRACTING OFFICER'S FAILURE TO NOTIFY YOU PRIOR TO THE AWARD THAT ONE OR MORE ADDITIONAL OFFERS WERE BEING CONSIDERED AND AFFORD YOU A FURTHER OPPORTUNITY TO NEGOTIATE.

YOUR PROTEST STATES THAT THE AWARD TO BALL WAS ON THE BASIS OF A DELIVERY PERIOD OF 215 DAYS, WHEREAS YOU OFFERED DELIVERY IN 175 DAYS IN ACCORDANCE WITH THE TERMS OF THE RFP. THE RECORD SHOWS THAT THE ANNOUNCEMENT OF AWARD TO BALL ON THE BASIS OF A 215-DAY DELIVERY PERIOD WAS MADE IN THE COMMERCE BUSINESS DAILY BUT THAT SUCH INFORMATION IS ERRONEOUS. OUR EXAMINATION OF BALL'S CONTRACT SHOWS THAT THE DELIVERY PERIOD SPECIFIED THEREIN IS ACTUALLY 175 DAYS.

IT IS ALSO YOUR POSITION THAT AT THE TIME YOU SUBMITTED YOUR OFFER REASONABLE GROUNDS EXISTED FOR BELIEVING THAT MICOM'S BIDDING PROCEDURES AND THE SPECIFICATIONS THEMSELVES REQUIRED THAT THE COMPONENTS OF THE COOLER ASSEMBLIES BE INTERCHANGEABLE WITH THOSE OF YOUR FIRM WHICH WERE THEN IN THE SYSTEM. WHILE COUNSEL FOR THE PROCURING ACTIVITY HAS EXPRESSED THE VIEW IN THE REPORT TO THIS OFFICE THAT INTERCHANGEABILITY WAS NOT A REQUIREMENT OF THE SPECIFICATIONS, YOU CONTEND THAT THE SPECIFICATIONS SPECIFICALLY PROVIDE FOR INTERCHANGEABILITY IN DRAWING D 9091516, AND IN ANY EVENT YOU WOULD HAVE PROPOSED A LESS EXPENSIVE DESIGN HAD YOU BEEN AWARE OF MICOM'S INTERPRETATION OF THE SPECIFICATIONS. THUS, YOU PROTEST THE LACK OF ANY COMPETITION FOR UNITS INCORPORATING PARTS WHICH ARE INTERCHANGEABLE WITH EXISTING COMPONENTS.

IN THIS CONNECTION, THE CONTRACTING OFFICER HAS SUBMITTED THE FOLLOWING REPORT:

"BECAUSE A. C. BALL COMPANY WAS LOW OFFEROR, BUT A QUESTION EXISTED AS TO THE SUFFICIENCY OF THE TECHNICAL DATA PACKAGE, A CONFERENCE WAS HELD 7 DECEMBER 1971 AT THE A. C. BALL PLANT TO DETERMINE CONTRACTOR CAPABILITY AND SUFFICIENCY OF DRAWINGS FOR A. C. BALL TO PERFORM. GOVERNMENT REPRESENTATIVES WERE MR. W. M. BULLOCK, CONTRACTING OFFICER; MR. BILLY CHAPPELL, LEGAL REPRESENTATIVE; AND MR. JAMES FARRISH, TECHNICAL REPRESENTATIVE; MR. LELAND COHEN, QUALITY ASSURANCE REPRESENTATIVE FROM DCASR, SAN FRANCISCO, CALIF.; REPRESENTING A. C. BALL COMPANY AT THE CONFERENCE WERE MESSRS. RONALD C. BALL, BARRY L. TROSPER AND PAUL PERKINS. THE CONTRACTING OFFICER CONCLUDED THAT A. C. BALL COMPANY HAD FULL UNDERSTANDING OF THE REQUIREMENT AND COULD FURNISH SAME IN ACCORDANCE WITH THE TECHNICAL DATA PACKAGE AS ORIGINALLY ISSUED. A. C. BALL COMPANY VERBALLY ASSURED THE GOVERNMENT REPRESENTATIVE THAT PARTS WOULD BE INTERCHANGEABLE. A. C. BALL'S REPRESENTATIVE STATED THAT THEY HAD MADE FIELD TRIPS WHEREIN THEY HAD STUDIED A COOLER UNIT AT AN ARMY DEPOT, HAD PERFORMED SOME REVERSE ENGINEERING, AND HAD UPDATED THEIR OWN DRAWINGS, ETC. THIS WAS THE BASIS OF THEIR ASSURANCE OF INTERCHANGEABILITY. THE GOVERNMENT REPRESENTATIVES WERE IMPRESSED WITH THE EXPRESSING OF CONFIDENCE ON A. C. BALL'S PART THAT HE COULD MEET THE SPECIFICATION AND FURNISH COMPONENTS INTERCHANGEABLE WITH THOSE (STANDARD-THOMSON) IN THE SYSTEM. BOTH OFFERORS WERE CONTACTED AND ASKED TO REVIEW THEIR OFFERS ON PRICE AND DELIVERY. BOTH COMPANIES CONFIRMED IN WRITING THAT THEIR OFFERS WERE FIRM."

WHILE WE MAKE NO DETERMINATION AS TO WHETHER THE SPECIFICATIONS REQUIRED INTERCHANGEABILITY, IT IS APPARENT FROM THE ABOVE-QUOTED REPORT THAT THE CONTRACTING OFFICIALS CONSIDERED INTERCHANGEABILITY TO BE A MATERIAL FACTOR AT THAT TIME AND THAT BALL CLEARLY WARRANTED THAT THE PARTS OF ITS ITEM WOULD BE INTERCHANGEABLE WITH THE STANDARD THOMSON PARTS IN THE SYSTEM. ACCORDINGLY, SINCE BOTH YOUR PROPOSAL AND THE BALL PROPOSAL WERE PREPARED, AND NEGOTIATIONS CONDUCTED THEREON, IN ACCORDANCE WITH A UNIFORM UNDERSTANDING BY ALL CONCERNED THAT THE PARTS WOULD PROVIDE FOR INTERCHANGEABILITY, WE CANNOT HOLD THAT THE COMPETITION WAS NOT ON A COMMON BASIS OR THAT YOU WERE PREJUDICED IN SUCH RESPECT.

FINALLY, YOU CONTEND THAT THERE IS CONVINCING EVIDENCE THAT THE CONTRACT WAS AWARDED TO BALL IN ERROR, IN THAT FIRST ARTICLE INSPECTION WAS NOT, BUT SHOULD HAVE BEEN, REQUIRED OF THE NEW VENDOR AND THE COST OF SUCH INSPECTION SHOULD HAVE BEEN ADDED TO BALL'S OFFER FOR EVALUATION PURPOSES. YOU POINT OUT THAT A FORMALLY ADVERTISED SOLICITATION FOR THIS ITEM, ISSUED IN MARCH 1971, REQUIRED FIRST ARTICLE INSPECTION OF ALL BIDDERS EXCEPT STANDARD-THOMSON SINCE YOU WERE THE ORIGINAL DESIGNER AND QUALIFIED VENDOR OF THE EQUIPMENT. MOREOVER, YOU CONTEND THAT THE REQUIREMENT FOR FIRST ARTICLE TESTING WAS ERRONEOUSLY DELETED FROM THE SUBJECT NEGOTIATED PROCUREMENT SINCE THE SOLICITATION WAS ORIGINALLY RESTRICTED TO YOUR FIRM. YOU STATE THAT IF A REQUIREMENT FOR FIRST ARTICLE INSPECTION WAS INTENTIONALLY OMITTED FOR BALL, IT IS MOST LIKELY THAT THE GOVERNMENT WILL NOT RECEIVE COOLER ASSEMBLIES WHICH FULFILL THE FUNCTIONS REQUIRED BY DRAWING D 9091516.

WITH RESPECT TO FIRST ARTICLE TESTING, ASPR 1-1902 PROVIDES THAT IN DETERMINING WHETHER IT SHOULD BE A REQUIREMENT, CONSIDERATION SHALL BE GIVEN TO THE INCREASED COST AND TIME OF DELIVERY RESULTING FROM THE TEST; THE RISK TO THE GOVERNMENT IN FOREGOING SUCH TESTS; AND THE AVAILABILITY TO THE GOVERNMENT OF OTHER LESS COSTLY METHODS OF ACHIEVING THE DESIRED QUALITY. IN THIS CONNECTION THE ADMINISTRATIVE REPORT POINTS OUT THAT THE GOVERNMENT EXPECTS TO USE "QUALITY VERIFICATION" INSPECTION AS PROVIDED IN THE CONTRACT FOR DETERMINING WHETHER ANY CONDITION OR CHARACTERISTIC OF THE ITEM EXISTS WHICH IS NOT IN COMPLIANCE WITH THE REQUIREMENTS OF THE CONTRACT. IN ADDITION, THE REPORT STATES THAT INSPECTION AND ACCEPTANCE PROCEDURES AT THE CONTRACTOR'S PLANT WILL BE GIVEN CAREFUL ATTENTION WITHIN THE BOUNDS OF THE CONTRACT REQUIREMENTS. SINCE DETERMINATIONS AS TO THOSE PROVISIONS WHICH SHOULD BE INCLUDED IN A SOLICITATION TO ASSURE THAT ARTICLES BEING PROCURED WILL MEET THE GOVERNMENT'S NEEDS ARE PRIMARILY WITHIN THE PROVINCE OF THE JUDGMENT OF THE AGENCY OFFICIALS, WHICH DETERMINATIONS WE DO NOT QUESTION EXCEPT WHERE THEY UNDULY RESTRICT COMPETITION OR ARE OTHERWISE IN VIOLATION OF LAW OR REGULATIONS, WE WILL NOT OBJECT TO THE AGENCY'S POSITION THAT THE CONTRACT PROVIDES SUFFICIENT SAFEGUARDS, WITHOUT FIRST ARTICLE TESTING, FOR OBTAINING THE REQUIRED PRODUCT.

FOR THE REASONS STATED, YOUR PROTEST MUST BE DENIED.