B-160153, JAN. 25, 1967

B-160153, JAN. 25, 1967

TO SPERRY GYROSCOPE COMPANY:

WE REFER AGAIN TO YOUR LETTERS DATED SEPTEMBER 27, AND DECEMBER 6, 1966, PROTESTING AGAINST THE PROPOSED AWARD OF CONTRACT TO ELECTRONIC CONCEPTS, INCORPORATED, CHARLOTTESVILLE, VIRGINIA, UNDER INVITATION FOR BIDS NO. CG- 15,657-A, ISSUED JULY 25, 1966, BY THE UNITED STATES COAST GUARD, WASHINGTON, D.C.

THE INVITATION REQUESTED BIDS FOR FURNISHING 50 AN/SPS-53 RADAR SETS IN ACCORDANCE WITH PURCHASE DESCRIPTION NO. EEE-25-63 (ITEM NO. 10); 1 PROTOTYPE MODEL (ITEM NO. 1), AND 40 PRODUCTION MODEL AN/SPS-53 ( ( DVST (DIRECT VIEW STORAGE TUBE) RADAR SETS IN ACCORDANCE WITH PURCHASE DESCRIPTION NO. EEE-30-66 (ITEM NO. 2); AND ATTENDANT SOFT WARE FOR THE PRODUCTION RADAR SETS. AT THE OPENING ON SEPTEMBER 6, 1966, BIDS HAD BEEN RECEIVED FROM ELECTRONIC CONCEPTS, INCORPORATED (HEREAFTER ECI), SPERRY PIEDMONT COMPANY DIVISION OF SPERRY RAND CORPORATION (HEREAFTER SPERRY), AND BE LOCK ELECTRONICS COMPANY. THE CONTRACTING OFFICER DETERMINED THAT THE APPARENT LOW BIDDER WAS ECI, AND THE APPARENT SECOND LOW BIDDER WAS SPERRY.

INCLUDED WITH THE BID SUBMITTED BY ECI WAS THE FOLLOWING LETTER DATED SEPTEMBER 6, 1966, SIGNED BY THE CORPORATION'S PRESIDENT:

"SUBJECT: INVITATION FOR BID NUMBER CG-15,657-A

CONDITION OF BID

"DEAR SIR:

IT IS OUR BELIEF THAT THERE ARE SOME AREAS THAT THE GOVERNMENT FURNISHED EQUIPMENT MAY NOT MEET ALL OF THE SPECIFICATIONS (REF. PARA. 3.1.1.1. EEE-30-66).

OUR BID DOES NOT INCLUDE AN AMOUNT FOR REDESIGN, IF NECESSARY,OF THE AN/SPN-53 (SIC.) TO MEET THE CONDITIONS OF PARA. 3.1.1.1. OF EEE-30 66.'

PARAGRAPH 1.1 OF PURCHASE DESCRIPTION EEE-30-66, DATED MAY 20, 1966, STATES THAT THIS PURCHASE DESCRIPTION COVERS THE DETAIL REQUIREMENTS FOR THE AN/SPS-53 ( ( X-BAND SURFACE SEARCH RADAR SET (ITEMS 1 AND 2). THIS SET IS TO CONSIST OF AN AN/SPS-53 RADAR AND A DIRECT VIEW STORAGE TUBE (DVST) INDICATOR WHICH REPLACES THE INDICATOR OF THE AN/SPS-53 RADAR PRESENTLY USED BY THE COAST GUARD. THE PURCHASE DESCRIPTION PROVIDES THAT ALL UNITS OF THE RADAR SYSTEM SHALL BE ELECTRICALLY AND MECHANICALLY INTERCHANGEABLE WITH THE AN/SPS-53 RADAR SET NOW IN USE.

PARAGRAPH 3.1.1 OF THE PURCHASE DESCRIPTION PROVIDES THAT AN AN/SPS 53 RADAR WILL BE FURNISHED ON LOAN TO THE CONTRACTOR AS GOVERNMENT FURNISHED EQUIPMENT (GFE). PARAGRAPH 3.1.1.. PROVIDES:

"CONDITION OF THE GFE. ON RECEIPT OF THE GFE IT SHALL BE THE RESPONSIBILITY OF THE CONTRACTOR TO CONDUCT NECESSARY TESTS AND INSPECTIONS TO DETERMINE WHETHER ANY CONFLICT OR INCONSISTENCY EXISTS BETWEEN THE GFE AND THIS PURCHASE DESCRIPTION. THE CONTRACTOR SHALL, IMMEDIATELY UPON DISCOVERING ANY SUCH CONFLICT OR INCONSISTENCY, NOTIFY THE U.S. COAST GUARD IN WRITING GIVING FULL DETAILS. * * *"

PARAGRAPH 3.1.2 GIVES THE GENERAL DESCRIPTION OF THE SURFACE SEARCH RADAR SET. THE SET IS TO CONSIST OF FOUR GROUPS DESCRIBED AS FOLLOWS:

"A. RECEIVER-TRANSMITTER. CONTAINS TRANSMITTER, MODULATOR, RECEIVER, AND ASSOCIATED POWER SUPPLIES. PROVIDES TRIGGER AND VIDEO TO THE CONTROL INDICATOR.

"B. ANTENNA GROUP. INCLUDES RADIATING ELEMENT, PEDESTAL, DRIVE MOTOR, SYNCHRO TRANSMITTER, SPACE HEATER, AND ANTENNA SAFETY SWITCH.

"C. SIGNAL DATA CONVERTER. CONTAINS STEP MOTOR, SYNCHRO DIFFERENTIAL TRANSMITTER, AND COMPASS CARD.

"D. CONTROL INDICATOR. INCLUDES DIRECT VIEW STORAGE TUBE, SWEEP GENERATORS, TIMING CIRCUITS, VIDEO AMPLIFIERS, POWER SUPPLIES AND FUNCTION CONTROLS. THE GFE INDICATOR IS PROVIDED WITH A TYPE 10 WP7A FPI TUBE. THIS CONTRACT REQUIRES DEVELOPMENT OF A DVST INDICATOR THAT IS INTERCHANGEABLE WITH THE GFE INDICATOR.'

PARAGRAPH 3.1.3, ENTITLED "INTERCHANGEABILITY," PROVIDES THAT GROUPS A., B. AND C. ABOVE SHALL BE MECHANICALLY, ELECTRICALLY AND FUNCTIONALLY INTERCHANGEABLE WITH THE CORRESPONDING ITEMS IN THE GFE. GROUP D. IS TO BE FUNCTIONALLY INTERCHANGEABLE WITH THE CORRESPONDING ITEM OF THE GFE, AND MECHANICALLY INTERCHANGEABLE TO THE EXTENT THAT CABINET DIMENSIONS, FORM FACTOR AND MOUNTING ARRANGEMENTS ARE IDENTICAL TO THE GFE.

PARAGRAPH 4.1, ENTITLED "EXCEPTIONS," PROVIDES THAT "BID PROPOSALS CONTAINING ANY EXCEPTIONS TO THE REQUIREMENTS OF THIS PURCHASE DESCRIPTION WILL BE CONSIDERED NON-RESPONSIVE.'

PARAGRAPH 1.1 OF PURCHASE DESCRIPTION EEE-3-GEN/CG), DATED JULY 1, 1965, IS STATED BY THE INVITATION TO FORM A PART OF PURCHASE DESCRIPTION EEE-25- 63, DATED JANUARY 3, 1963, AND COVERS THE GENERAL REQUIREMENTS FOR ELECTRONIC EQUIPMENTS WHICH ARE TO BE A DUPLICATION OF GOVERNMENT FURNISHED EQUIPMENT. PURCHASE DESCRIPTION EEE-35-63 AND EEE-3-GEN CONSTITUTE THE SPECIFICATIONS FOR THE AN/SPS-53 RADAR SET (ITEM 10).

PARAGRAPHS 3.3, 3.4 AND 3.5 OF PURCHASE DESCRIPTION EEE-3-GEN PROVIDE:

"3.3 PERFORMANCE: THE PERFORMANCE OF THE EQUIPMENT SHALL BE IN ACCORDANCE WITH THE PROVISIONS OF THE INDIVIDUAL EQUIPMENT PURCHASE DESCRIPTION TO THE EXTENT THAT THE GFE MEETS THIS INDIVIDUAL EQUIPMENT PURCHASE DESCRIPTION. ON THE RECEIPTS OF THE GFE IT SHALL BE THE RESPONSIBILITY OF THE CONTRACTOR TO CONDUCT NECESSARY TESTS TO DETERMINE WHETHER ANY CONFLICT OR INCONSISTENCY EXISTS BETWEEN THE GFE AND THE INDIVIDUAL EQUIPMENT PURCHASE DESCRIPTION. THE CONTRACTOR SHALL, IMMEDIATELY UPON DISCOVERING ANY SUCH CONFLICT OR INCONSISTENCY, NOTIFY THE U.S. COAST GUARD IN WRITING GIVING FULL DETAILS. * * * THE COAST GUARD WILL THEN MODIFY THE GFE SO THAT IT WILL MEET THE INDIVIDUAL EQUIPMENT PURCHASE DESCRIPTION OR WILL AUTHORIZE A WAIVER IN THE PURCHASE DESCRIPTION.

"3.4 DESIGN: THE DESIGN OF THE EQUIPMENT SHALL BE THE SAME AS THE GFE, UNLESS OTHERWISE SPECIALLY APPROVED BY THE U.S. COAST GUARD. SUBSTANTIAL DESIGN CHANGES AND CHANGES INVOLVING INTERCHANGEABILITY OF UNITS WITH THE GFE WILL GENERALLY NOT BE APPROVED.

"3.5 CONSTRUCTION: THE CONSTRUCTION OF THE EQUIPMENT SHALL BE THE SAME AS THAT OF THE GFE UNLESS A CONFLICT OR INCONSISTENCY EXISTS BETWEEN THE INDIVIDUAL EQUIPMENT PURCHASE DESCRIPTION AND THE GFE. IN THIS INSTANCE THE COAST GUARD SHOULD BE NOTIFIED IN WRITING GIVING FULL DETAILS. THIS CORRESPONDENCE WILL BE ADDRESSED AS INDICATED ABOVE IN PARAGRAPH 3.3. THE COAST GUARD WILL THEN REVIEW THE MATTER AND MAY ISSUE A WAIVER TO THE PURCHASE DESCRIPTION IF REQUIRED.'

THE RECORD INDICATES THAT INSOFAR AS THE SPECIFICATIONS FOR THE RECEIVER TRANSMITTER, ANTENNA GROUP, AND SIGNAL DATE CONVERTER ARE CONCERNED, PURCHASE DESCRIPTION EEE-30-66 IS THE SAME AS PURCHASE DESCRIPTION EEE-25- 63. THERE IS, HOWEVER, A DIFFERENCE BETWEEN THE PROVISIONS OF EEE-30-66, PARAGRAPH 3.1.1.1, AND EEE-3-GEN, PARAGRAPHS 3.3, 3.4 AND 3.5. PROVISION IS MADE IN THE FORMER PURCHASE DESCRIPTION WHEREBY THE COAST GUARD WILL MODIFY THE GFE SO THAT IT WILL MEET THE INDIVIDUAL EQUIPMENT PURCHASE DESCRIPTION NOR IS THERE A PROVISION WHEREBY THEY WILL AUTHORIZE A WAIVER IN THE PURCHASE DESCRIPTION IF A CONFLICT OR INCONSISTENCY EXISTS.

YOUR PROTEST, RECEIVED IN THE GENERAL ACCOUNTING OFFICE SEPTEMBER 29, 1966, IS BASED SPECIFICALLY ON THE AFOREMENTIONED DIFFERENCE IN THE PROVISIONS OF THE INVITATION. YOU CONTEND THAT ECI'S BID FOR ITEMS 1 AND 2 INCLUDES ONLY THE COST OF DUPLICATING THE GFE'S COMPONENTS A., B. AND C. (I.E. RECEIVER TRANSMITTER, ANTENNA GROUP, AND SIGNAL DATA CONVERTER), AS WELL AS DESIGN COST OF A DVST INDICATOR, BUT THAT ITS BID DOES NOT INCLUDE COST FOR ANY REDESIGN WHICH MAY BE NECESSARY SO THAT COMPONENTS A., B. AND C. MEET THE REQUIREMENTS OF PURCHASE DESCRIPTION EEE-30-66. YOU MAINTAIN THAT WITH REGARD TO ITEMS 1 AND 2 THE INVITATION CALLS FOR A RADAR SET TO BE BUILT TO SPECIFICATIONS, BUT FOR ITEM 10 THE INVITATION CALLS FOR A RADAR SET TO BE A DUPLICATION OF THE GOVERNMENT FURNISHED EQUIPMENT, THEREFORE, THE ECI BID ON ITEMS 1 AND 2, BEING LIMITED TO DUPLICATING THE GFE'S COMPONENTS A., B. AND C. WAS NOT RESPONSIVE TO THE INVITATION.

THE CONTRACTING OFFICER, IN HIS STATEMENT OF FACTS AND CIRCUMSTANCES RELATIVE TO THE PROTEST, MADE THE FOLLOWING COMMENTS:

"7. PURCHASE DESCRIPTION EEE-30-66 REQUIREMENTS, RELATING TO THE GFE ARE IDENTICAL TO THE REQUIREMENTS UPON WHICH THE GFE WAS MANUFACTURED. THE PURPOSE OF REQUIRING THE CONTRACTOR TO INSPECT AND TEST THE GFE RADAR IS TO ESTABLISH AS A FACT THAT IT MEETS ALL THE REQUIREMENTS SINCE PRODUCTION UNITS ARE INSPECTED AND TESTED BY LOTS. IN THE EVENT A PERFORMANCE DEFICIENCY IS REPORTED, THE CONTRACTOR COULD NOT COMPLY WITH PARAGRAPH 1.1 OF PURCHASE DESCRIPTION EEE-30-66 AS TO THE MECHANICAL AND ELECTRICAL INTERCHANGEABILITY AND MEET THE REQUIRED PERFORMANCE REQUIREMENTS. THIS TIME THE COAST GUARD WOULD ELECT TO HAVE THE GFE UNIT REPLACED OR REPAIRED AT COAST GUARD EXPENSE. THIS PREVENTS DISCOVERING THE DEFICIENCY DURING PRODUCTION AND/OR AFTER THE CONTRACTOR HAS EXPENDED TIME AND FUNDS TO NO AVAIL THEREBY ELIMINATING A POSSIBLE DISPUTE AND/OR CLAIM.

"10. SPERRY GYROSCOPE COMPANY LETTER OF 27 SEPTEMBER 1966 PROTESTED AWARD TO ELECTRONIC CONCEPT INC. ON THE BASIS THAT ELECTRONIC CONCEPTS, INC. LETTER OF 6 SEPTEMBER 1966 CONDITIONED THEIR BID AND THEREFORE WAS NON- RESPONSIVE.

"11. ELECTRONIC CONCEPTS, INC. LETTER OF 6 SEPTEMBER 1966 IS NOT CONSIDERED AS CONDITIONING THEIR BID BUT ACTUALLY CONVEYS THE INTENT OF THE COAST GUARD IN FURNISHING THE GFE. IT ASSURES THE BIDDERS THAT THE GFE MEETS THE REQUIREMENTS OF PURCHASE DESCRIPTION EEE-30-66.'

THE PURCHASING OF RADAR SETS BY THE COAST GUARD IS GOVERNED BY THE ARMED SERVICES PROCUREMENT ACT OF 1947, 10 U.S.C. 2301 ET SEQ., WHICH AT SECTION 2305 PROVIDES IN PART:

"/A) * * * THE SPECIFICATIONS AND INVITATIONS FOR BIDS SHALL PERMIT SUCH FREE AND FULL COMPETITION AS IS CONSISTENT WITH THE PROCUREMENT OF THE PROPERTY AND SERVICES NEEDED BY THE AGENCY CONCERNED.

"/B) THE SPECIFICATIONS IN INVITATIONS FOR BIDS MUST CONTAIN THE NECESSARY LANGUAGE AND ATTACHMENTS, AND MUST BE SUFFICIENTLY DESCRIPTIVE IN LANGUAGE AND ATTACHMENTS, TO PERMIT FULL AND FREE COMPETITION. IF THE SPECIFICATIONS IN AN INVITATION FOR BIDS DO NOT CARRY THE NECESSARY DESCRIPTIVE LANGUAGE AND ATTACHMENTS, OR IF THOSE ATTACHMENTS ARE NOT ACCESSIBLE TO ALL COMPETENT AND RELIABLE BIDDERS, THE INVITATION IS INVALID AND NO AWARD MAY BE MADE.

"/C) * * * AWARDS SHALL BE MADE WITH REASONABLE PROMPTNESS BY GIVING WRITTEN NOTICE TO THE RESPONSIBLE BIDDER WHOSE BID CONFORMS TO THE INVITATION AND WILL BE THE MOST ADVANTAGEOUS TO THE UNITED STATES, PRICE AND OTHER FACTORS CONSIDERED. HOWEVER, ALL BIDS MAY BE REJECTED IF THE HEAD OF THE AGENCY DETERMINES THAT REJECTION IS IN THE PUBLIC INTEREST.'

THE IMPLEMENTING ARMED SERVICES PROCUREMENT REGULATION EXPANDING UPON THE CONCEPTS IMPLICIT IN THE STATUTE, REQUIRES THAT:

"2-301 RESPONSIVENESS OF BIDS.

"/A) TO BE CONSIDERED FOR AWARD, A BID MUST COMPLY IN ALL MATERIAL RESPECTS WITH THE INVITATION FOR BIDS SO THAT, BOTH AS TO THE METHOD AND TIMELINESS OF SUBMISSION AND AS TO THE SUBSTANCE OF ANY RESULTING CONTRACT, ALL BIDDERS MAY STAND ON AN EQUAL FOOTING AND THE INTEGRITY OF THE FORMAL ADVERTISING SYSTEM MAY BE MAINTAINED.'

A BID WHICH HAS BEEN CONDITIONED MAY NOT HAVE THE CONDITION WAIVED IF IT GOES TO THE SUBSTANCE OF THE BID OR WORKS AN INJUSTICE TO OTHER BIDDERS. ASPR 2-404.2. THIS OFFICE HAS DEFINED A SUBSTANTIAL DEVIATION AS ONE WHICH AFFECTS EITHER THE PRICE, QUANTITY, OR QUALITY OF THE ARTICLE OFFERED. 43 COMP. GEN. 209, 212.

IT IS MATERIAL TO THIS CASE TO EXPLORE THE RELATIONSHIP AND EXPERIENCE OF BOTH ECI AND SPERRY TO THE MANUFACTURE OF THE TYPE RADAR SETS CALLED FOR BY THIS INVITATION. THE ORIGINAL AN/SPS-53 RADAR SETS WERE BUILT BY SPERRY PIEDMONT IN CHARLOTTESVILLE, VIRGINIA. CONSEQUENTLY, THE GFE UNIT FURNISHED BY THE COAST GUARD FOR THE PROCUREMENT IN QUESTION WILL BE A SPERRY BUILT UNIT. OFFICERS OF ECI, HAVING HAD PRIOR EXPERIENCE WITH BOTH THE DESIGN AND CONSTRUCTION OF AN/SPS-53 RADAR SETS WHILE WORKING FOR SPERRY PIEDMONT ALSO HAVE AN INTIMATE KNOWLEDGE OF THE VARIOUS CONFIGURATIONS IN THE GOVERNMENT FURNISHED EQUIPMENT. FOLLOWING EXTENSIVE INVESTIGATION INTO THIS PROTEST WE ARE CONVINCED THAT BOTH BIDDERS WERE FULLY AWARE OF THE SPECIFICATIONS FOR PRODUCING A STANDARD AN/SPS-53 RADAR SET.

WE ARE IN AGREEMENT WITH YOUR STATEMENT IN PARAGRAPH 9 OF YOUR LETTER OF DECEMBER 6, 1966, WHEREIN YOU ASSERT THAT THE COAST GUARD SHOULD NOT ATTEMPT TO MODIFY THE INVITATION FOR BIDS RETROACTIVELY TO CONFORM IT TO THE BID OF A PARTICULAR BIDDER. THERE IS NO QUESTION THAT A BIDDER, THROUGH HIS BID, MUST AGREE TO BE BOUND BY THE ADVERTISED TERMS AND CONDITIONS OF THE INVITATION. WE DO NOT BELIEVE, HOWEVER, THAT THE ISSUE IN THIS CASE IS THE QUESTION WHETHER ECI INCLUDED IN ITS BID ANY COSTS FOR REDESIGN OF COMPONENTS A., B. AND C. FOR ITEMS 1 AND 2. ECI SAYS IT INCLUDED THE AFORE STATED LETTER WITH ITS BID BECAUSE THE INVITATION WAS NOT CLEAR TO THEM AS TO WHETHER THE COAST GUARD OR THE CONTRACTOR WOULD BE OBLIGATED TO MODIFY THE GFE IN THE EVENT THAT AN INCONSISTENCY OR DEFICIENCY EXISTED BETWEEN THE GFE AND THE PURCHASE DESCRIPTION. THIS IS SUPPORTED BY THE FACT THAT IT CITES PARAGRAPH 3.1.1.1 OF THE PURCHASE DESCRIPTION, WHICH PARAGRAPH IS TITLED,"CONDITION OF THE GFE.' THE OBVIOUS OMISSION OF COAST GUARD'S PROMISE TO MODIFY OR WAIVE CONTAINED IN PARAGRAPH 3.3 OF THE PURCHASE DESCRIPTION APPLICABLE TO ITEM 10, APPARENTLY WAS OF CONCERN TO ECI. WHAT ECI DID, IN EFFECT, WAS TO CONDITION ITS BID AS TO SOMETHING WHICH IT WAS NOT OBLIGATED TO DO IN THE FIRST PLACE. A LEGAL OBLIGATION CANNOT BE IMPOSED UNLESS IT IS SPECIFICALLY SET OUT IN THE INVITATION AND RESULTING CONTRACT. WHILE THE INVITATION DOES REQUIRE THE DVST RADAR TO BE BUILT TO SPECIFICATION, IT DOES NOT REQUIRE THE CONTRACTOR TO MODIFY THE GFE IF THE GFE IS DEFICIENT. SO INTERPRETED, THE CONDITION TAKEN BY ECI IS NOT SUBSTANTIVE OR MATERIAL IN ANY SENSE.

FOR THESE REASONS, IT IS OUR CONCLUSION THAT THE ECI BID DID CONFORM TO THE INVITATION FOR BIDS AND THAT THE EXCEPTION TAKEN BYECI DID NOT RENDER ITS BID NONRESPONSIVE. AN AWARD TO ECI WOULD NOT VIOLATE ANY OF THE APPLICABLE LAWS OR REGULATIONS CITED ABOVE AND WOULD RESULT IN A VALID AND BINDING CONTRACT. YOUR PROTEST IS, THEREFORE, DENIED.