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TO PACKERS ENGINEERING CORPORATION: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF DECEMBER 2. THE RECORD INDICATES THAT THESE ITEMS WERE ORIGINALLY REQUISITIONED FROM THE DEFENSE SUPPLY AGENCY (DSA) BY THE NAVY IN JULY 1964. THE IFB WAS SUBSEQUENTLY CANCELLED. AS IT WAS DETERMINED THAT AVAILABLE DATA WAS NOT ADEQUATE FOR AN ADVERTISED PROCUREMENT. THAT THE ITEM REQUIRED WAS TO BE IN ACCORDANCE WITH A NAVY BUREAU OF ORDNANCE DRAWING LISTING GUIDE INDUSTRIES AS THE ONLY APPROVED SOURCE. IT WAS THEREFORE DECIDED TO NEGOTIATE THE PROCUREMENT PURSUANT TO THE AUTHORITY OF 10 U.S.C. 2304 (A) (10). WHICH PROVIDES THAT A PURCHASE MAY BE NEGOTIATED WHERE "IT IS IMPRACTICABLE TO OBTAIN COMPETITION.'.

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B-155700, MAR. 18, 1965

TO PACKERS ENGINEERING CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF DECEMBER 2, 1964, AND SUBSEQUENT CORRESPONDENCE, PROTESTING AGAINST AWARD OF A CONTRACT TO GUIDE INDUSTRIES, INC., UNDER REQUEST FOR PROPOSALS (RFP) DSA 9-65 1984 ISSUED BY THE DEFENSE ELECTRONICS SUPPLY CENTER, DAYTON, OHIO, FOR SUPPLYING 276 METER MOVEMENT RELAYS.

THE RECORD INDICATES THAT THESE ITEMS WERE ORIGINALLY REQUISITIONED FROM THE DEFENSE SUPPLY AGENCY (DSA) BY THE NAVY IN JULY 1964, AFTER WHICH DSA ISSUED AN INVITATION FOR BIDS (IFB). THE IFB WAS SUBSEQUENTLY CANCELLED, PRIOR TO OPENING, AS IT WAS DETERMINED THAT AVAILABLE DATA WAS NOT ADEQUATE FOR AN ADVERTISED PROCUREMENT, AND THAT THE ITEM REQUIRED WAS TO BE IN ACCORDANCE WITH A NAVY BUREAU OF ORDNANCE DRAWING LISTING GUIDE INDUSTRIES AS THE ONLY APPROVED SOURCE. PROCUREMENT FROM ANY OTHER SOURCE COULD NOT BE MADE WITHOUT APPROVAL OF THE BUREAU OF ORDNANCE. IT WAS THEREFORE DECIDED TO NEGOTIATE THE PROCUREMENT PURSUANT TO THE AUTHORITY OF 10 U.S.C. 2304 (A) (10), AND IMPLEMENTING REGULATIONS, WHICH PROVIDES THAT A PURCHASE MAY BE NEGOTIATED WHERE "IT IS IMPRACTICABLE TO OBTAIN COMPETITION.' ARMED SERVICES PROCUREMENT REGULATION (ASPR) 3-210.2 (XV) PROVIDES, AS ILLUSTRATIVE OF CIRCUMSTANCES WHERE THE AUTHORITY TO NEGOTIATE MAY BE ERCISED,"WHEN THE PROCUREMENT IS FOR PARTS OR COMPONENTS BEING PROCURED AS REPLACEMENT PARTS IN SUPPORT OF EQUIPMENT SPECIFICALLY DESIGNED BY THE MANUFACTURER, WHERE THE DATA AVAILABLE IS NOT ADEQUATE TO ASSURE THAT, THE PART OR COMPONENT WILL PERFORM THE SAME FUNCTION IN THE EQUIPMENT AS THE PART OR COMPONENT IT IS TO REPLACE.'

THE RFP WAS ISSUED ON OCTOBER 12, 1964, WITH A CLOSING DATE OF NOVEMBER 2, 1964. IT WAS THEREIN PROVIDED THAT THE ITEM, AS SPECIFIED, WAS TO BE MANUFACTURED IN ACCORDANCE WITH BUREAU OF ORDNANCE DRAWING P/N 2036714, REVISION L. IT ALSO PROVIDED THAT BECAUSE THE GOVERNMENT DID NOT HAVE SUFFICIENT DATA AVAILABLE TO EVALUATE ALTERNATE ITEMS, ALTERNATE PROPOSALS MAY BE REJECTED WITHOUT FURTHER CONSIDERATION UNLESS SUCH PROPOSALS INCLUDED:

"/A) COMPLETE INFORMATION ON THE REQUIRED ITEM AND

"/B) COMPLETE INFORMATION ON THE PROPOSED ITEM INCLUDING THE NAME OF THE ACTUAL MANUFACTURER AND HIS PART NUMBER.'

OF THE FOUR PROPOSALS RECEIVED, ONLY YOURS AND GUIDE'S WERE SUCH AS TO RECEIVE FURTHER CONSIDERATION. BECAUSE YOUR PROPOSAL TO FURNISH YOUR MODEL NO. 104 DID NOT INCLUDE THE EVALUATION INFORMATION REQUIRED BY THE ABOVE PROVISION, YOU WERE CALLED BY THE CONTRACTING OFFICER AND REQUESTED TO FURNISH SUCH INFORMATION. YOUR LETTER OF NOVEMBER 5, 1964, IN RESPONSE THERETO WAS NOT CONSIDERED ADEQUATE, AND YOU WERE AGAIN CONTACTED, AFTER WHICH YOUR REPRESENTATIVE EXHIBITED A DRAWING OF THE ITEM YOU PROPOSED TO FURNISH TO MR. MERVIN HARDMAN, THE PROJECT ENGINEER, AT A CONFERENCE ON NOVEMBER 12. HOWEVER, YOUR REPRESENTATIVE DECLINED TO LEAVE THE DRAWING WITH MR. HARDMAN FOR THE STATED REASON THAT IT CONTAINED PROPRIETARY INFORMATION. SHORTLY THEREAFTER, IT WAS DETERMINED BY THE ENGINEERS AT THE DEFENSE ELECTRONICS SUPPLY CENTER THAT THEY COULD NOT MAKE THE EVALUATION REQUIRED, AND SUCH TECHNICAL INFORMATION AS YOU HAD FURNISHED WAS FORWARDED TO THE BUREAU OF ORDNANCE FOR FURTHER EVALUATION TO DETERMINE WHETHER YOU QUALIFIED AS AN APPROVED SOURCE. THE CONTRACTING OFFICER THEN LEARNED THAT THE NAVY WOULD IN ANY EVENT REQUIRE A PREPRODUCTION SAMPLE OF THE ITEM OFFERED BY YOU FOR EVALUATION PURPOSES, AND, IN ADDITION, THAT BACK ORDERS IN EXCESS OF 200 EXISTED. IN THESE CIRCUMSTANCES, THE CONTRACTING OFFICER DECIDED THAT FURTHER DELAY TO QUALIFY YOUR PRODUCT WOULD NOT BE IN THE BEST INTERESTS OF THE GOVERNMENT. THEREFORE, PRICE NEGOTIATIONS WERE BEGUN WITH THE ONLY APPROVED SOURCE, GUIDE, WHICH ULTIMATELY RESULTED IN AWARD TO IT AT A PRICE OF $275 PER UNIT.

WHILE YOUR CORRESPONDENCE TO OUR OFFICE AND THE PROCURING ACTIVITY HAS PRESENTED SEVERAL MATTERS WHICH WE WILL CONSIDER, YOUR PRIMARY CONCERN SEEMS TO BE EMBODIED IN YOUR TELEGRAM OF DECEMBER 2, 1964, TO DESC WHEREIN IT IS STATED THAT YOU WERE THE "ORIGINALLY LOW BIDDER AND TECHNICALLY QUALIFIED.' IN THIS CONNECTION, IT MUST BE BORNE IN MIND THAT THIS WAS A NEGOTIATED PROCUREMENT, RATHER THAN ONE CONDUCTED BY FORMAL ADVERTISING, IN WHICH CASE THERE IS NO IMPROPRIETY EITHER IN DEVELOPMENT FURTHER DATA AS TO THE ITEM OFFERED OR IN NEGOTIATING FOR A PRICE REDUCTION AFTER THE OPENING OF PROPOSALS. SINCE THE PROCUREMENT WAS NEGOTIATED BY DSA IN ACCORDANCE WITH APPLICABLE REGULATIONS AND THE BASIC AUTHORITY PROVIDED BY 10 U.S.C. 2304 (A) (10), HERETOFORE CITED, AND UNDER CIRCUMSTANCES WHICH APPEAR TO BE WITHIN THE CONTEMPLATION OF THAT STATUTE, THERE WOULD APPEAR TO BE NO LEGAL BASIS FOR OUR OFFICE QUESTIONING EITHER THE NEGOTIATIONS WITH YOUR FIRM REGARDING THE TECHNICAL CHARACTERISTICS OF YOUR PRODUCT OR THE NEGOTIATIONS WITH GUIDE REGARDING ITS OFFERED PRICE. IN FACT, THE CONTRACTING OFFICER WOULD HAVE BEEN REMISS HAD HE NOT CONDUCTED SUCH NEGOTIATIONS. SEE 10 U.S.C. 2304 (G) AND PARAGRAPH 3-805.1 (A) OF THE ARMED SERVICES PROCUREMENT REGULATION.

CONCERNING THE CONTENTION THAT YOUR PRODUCT WAS TECHNICALLY QUALIFIED, THE RESPONSIBILITY BOTH FOR DRAFTING PROPER SPECIFICATIONS WHICH REFLECT THE NEEDS OF THE GOVERNMENT AND FOR DETERMINING FACTUALLY WHETHER ARTICLES OFFERED MEET THOSE SPECIFICATIONS IS PRIMARILY THAT OF THE ADMINISTRATIVE AGENCIES CONCERNED. 17 COMP. GEN. 554. IN THE INSTANT CASE, BECAUSE THIS ITEM HAD PREVIOUSLY BEEN PROCURED FROM ONLY ONE SOURCE, THE RFP SPECIFICALLY REQUIRED PROPOSALS OFFERING AN ALTERNATE ITEM TO BE ACCOMPANIED WITH DETAILED TECHNICAL INFORMATION TO MAKE EVALUATION POSSIBLE. THIS WAS ONE OF THE PRIMARY REASONS WHY THE PROCUREMENT WAS NEGOTIATED RATHER THAN ACCOMPLISHED UNDER FORMAL ADVERTISING PROCEDURES. BECAUSE YOUR PROPOSAL DID NOT FURNISH SUFFICIENT INFORMATION FOR EVALUATION PURPOSES, FURTHER CONSIDERATION OF THE ITEM YOU OFFERED WAS DELAYED UNTIL SUCH TIME AS THIS WAS OBTAINED. ONLY AFTER THIS INFORMATION WAS SECURED BY DESC WERE ITS ENGINEERS ABLE TO DETERMINE THAT EVALUATION WOULD HAVE TO BE MADE BY THE NAVY, WHICH WROTE THE SPECIFICATIONS AND WOULD BE THE USER OF THE ITEM. AT THIS POINT THE CONTRACTING OFFICER DECIDED THAT FURTHER DELAY COULD NOT BE TOLERATED BECAUSE BACK ORDERS ALMOST TO THE EXTENT OF THE ORIGINAL NUMBER REQUISITIONED THEN EXISTED AND, IN ADDITION, THE NAVY HAD ADVISED HIM THAT THEY WOULD NEED A PREPRODUCTION ITEM FOR TESTING TO COMPLETE EVALUATION. WE DO NOT THINK WE MAY PROPERLY SUBSTITUTE OUR JUDGMENT FOR THAT OF THE CONTRACTING OFFICER UNDER THESE CIRCUMSTANCES AND SAY THAT THIS PROCUREMENT SHOULD BE HELD IN ABEYANCE INDEFINITELY FOR FURTHER TESTING AND EVALUATION OF YOUR EQUIPMENT. IN THIS CONNECTION, IT SHOULD BE NOTED THAT, AT THE TIME OF THE AWARD THE BUREAU OF ORDNANCE HAD NOT MADE AN EVALUATION OF YOUR ITEM, AND STILL HAD NOT A MONTH LATER.

YOU HAVE ALSO EXPRESSED CONCERN OVER OTHER MATTERS CONNECTED WITH THIS PROCUREMENT WHICH ARE DISCUSSED BELOW. WITH RESPECT TO COMMENTS MADE BY THE VICE PRESIDENT OF GUIDE INDICATING THAT HE HAD CERTAIN INFORMATION, AS SET FORTH IN YOUR LETTER OF JANUARY 4, 1965, IT APPEARS THAT THE ALLEGATIONS OF IMPROPRIETY SUGGESTED BY YOU IN SAID LETTER HAVE BEEN INVESTIGATED ON TWO SEPARATE OCCASIONS BY THE PROCURING ACTIVITY. THE INFORMATION FURNISHED OUR OFFICE FROM THESE INVESTIGATIONS FAILS TO INDICATE THAT ANY OF THE GOVERNMENT PERSONNEL CONNECTED WITH THIS PROCUREMENT DIVULGED ANY INFORMATION CONCERNING YOUR PROPOSAL TO ANYONE OUTSIDE THE GOVERNMENT SERVICE.

IT ALSO APPEARS FROM THE RECORD IN THIS CASE THAT SOME ACTION WAS TAKEN BY YOU WITH RESPECT TO FABRICATING A PREPRODUCTION ITEM FOR EVALUATION PURPOSES. WE HAVE BEEN INFORMED THAT AT NO TIME WERE YOU EITHER DIRECTLY OR INDIRECTLY REQUESTED TO DO SO BY THE GOVERNMENT PERSONNEL CONNECTED WITH THIS PROCUREMENT, AND YOUR CORRESPONDENCE INDICATES THAT SUCH ACTION WAS VOLUNTARY ON YOUR PART. THE GOVERNMENT IS THEREFORE NOT RESPONSIBLE FOR ANY COSTS INCURRED IN THIS CONNECTION.

SOME REFERENCE HAS BEEN MADE TO THE APPLICABILITY OF PARAGRAPH 50, EVALUATION OF PROPOSALS, OF THE RFP TO THIS PROCUREMENT. THE SHORT ANSWER TO THIS IS THAT SINCE THE GOVERNMENT IS NOT, AND DID NOT CONTEMPLATE, MAKING MULTIPLE AWARDS FOR THIS PROCUREMENT THIS PROVISION IS NOT APPLICABLE.

ACCORDINGLY, WE SEE NO BASIS FOR DISTURBING THE CONTRACT AWARDED TO GUIDE INDUSTRIES, INC., AND YOUR PROTEST IS THEREFORE DENIED.

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