B-161448, AUG. 15, 1968

B-161448, AUG. 15, 1968

TO ENGLISH, CIANCIULLI, REISMAN AND PEIREZ:

WE REFER TO YOUR LETTER OF MAY 21, 1968, ON BEHALF OF RADALAB, INCORPORATED, RESPECTING OUR DECISIONS B-161448 DATED FEBRUARY 7, 1968,AND APRIL 12, 1968, WHEREIN THIS OFFICE RECOMMENDED THAT THE SECRETARY OF THE ARMY TERMINATE HALF OF THE QUANTITY OF ITEMS UNDER CONTRACT DAAB-05-67-C- 1223 AWARDED RADALAB AND TO MAKE AWARD OF THAT QUANTITY TO UNIVERSAL INDUSTRIES, INCORPORATED. IT IS YOUR CONTENTION THAT THE CONCLUSION REACHED IN THE ABOVE DECISION SHOULD BE MODIFIED BECAUSE IT WAS PREDICATED UPON THE ERRONEOUS INFORMATION THAT UNIVERSAL HAD RECEIVED PRE-PRODUCTION APPROVAL, COMMENCED PRODUCTION DELIVERIES AND COMPLETED DELIVERIES UNDER ITS PRIOR AN/TCC 50 CONTRACT, IN ACCORDANCE WITH THE SCHEDULE, AND THAT FURTHER:

"THE PRESENT CONTRACT, CALLING FOR THE GRADE 4 TRANSFORMERS IS NOT ONLY MORE COSTLY, BUT ITS ELECTRICAL CHARACTERISTICS AND PHYSICAL STRUCTURE CAUSE DIFFERENCES IN THE OVERALL CAPACITANCE RESULTING IN DESIGN AND OPERATIONAL CHANGES, AND THE USE OF THE GRADE 4 TRANSFORMER NECESSARILY RESULTS IN GREATER SELECTIVITY IN THE MANUFACTURE AND PRODUCTION OF THE AN/TCC-50.'

INASMUCH AS THE ABOVE ALLEGATIONS RAISED QUESTIONS OF FACT, WE REQUESTED A REPORT FROM THE DEPARTMENT OF THE ARMY AND WERE ADVISED IN SUBSTANCE AS FOLLOWS.

THE PRIOR CONTRACT, DA-36-039-AMC-09018 (E), WAS AWARDED TO UNIVERSAL INDUSTRIES ON MARCH 31, 1966, FOR URGENT DELIVERIES UNDER THE DEPARTMENT OF THE ARMY ACCELERATED PROGRAM. THE DELIVERY SCHEDULE WAS EXTREMELY TIGHT AND REQUIRED THAT THE FIRST ARTICLE TEST REPORT BE SUBMITTED FOR APPROVAL BY SEPTEMBER 6, 1966, WITH DELIVERY OF PRODUCTION QUANTITIES TO BEGIN BY SEPTEMBER 27, 1966, AND BE COMPLETED BY JANUARY 26, 1967. MODIFICATION NO. 3, DATED JUNE 23, 1967, TOOK INTO CONSIDERATION EXCUSABLE DELAYS AND REVISED THE DELIVERY SCHEDULE TO START ON MAY 31, 1967, WITH COMPLETION BY JANUARY 31, 1968. ACTUAL DELIVERIES STARTED IN MAY 1967 AND WERE COMPLETED IN APRIL 1968, THREE MONTHS LATER THAN THE REVISED COMPLETION DATE. THE CIRCUMSTANCES CONTRIBUTING TO THE THREE MONTHS' DELINQUENCY WERE REVIEWED BY THE DEFENSE CONTRACT ADMINISTRATION SERVICES REGION AND DETERMINED TO BE INEXCUSABLE. WHILE UNIVERSAL DID NOT IN FACT COMPLETE DELIVERIES IN ACCORDANCE WITH THE SCHEDULE,UNIVERSAL DID BEGIN DELIVERIES IN MAY 1967. ITS DELINQUENCY DOES NOT ALTER THE CONCLUSION IN OUR LETTER OF APRIL 12, 1968, WHEREIN WE STATED:

"UNIVERSAL HAD RECEIVED APPROVAL OF ITS PREPRODUCTION MODEL ON NOVEMBER 3, 1966. ITS FIRST PRODUCTION DELIVERY WAS MADE THE FIRST PART OF MAY 1967, ABOUT 180 DAYS THEREAFTER. AS OF THE DATE RADALAB WAS FINALLY FOUND RESPONSIBLE, BASED ON 480-DAY DELIVERY OF FIRST PRODUCTION, BECAUSE OF THE NEED FOR IT TO FURNISH A PREPRODUCTION MODEL, UNIVERSAL WAS WITHIN 30 DAYS OF MAKING ITS FIRST 180-DAY DELIVERY UNDER ITS CURRENT CONTRACT. SOME 60 DAYS PRIOR TO THIS FIRST DELIVERY, UNIVERSAL HAD BEEN FOUND UNABLE TO BEGIN DELIVERY UNDER THE PRESENT PROCUREMENT WITHIN 300 DAYS. WE DO NOT UNDERSTAND HOW SUCH A DETERMINATION COULD HAVE BEEN MADE IF ADEQUATE INQUIRY HAD BEEN MADE CONCERNING ITS THEN CURRENT PRODUCTION POSITION.' (UNDERSCORING SUPPLIED.)

THIS CONCLUSION IS VALID EVEN IF THE FIRST PRODUCTION AS WELL AS THE FINAL DELIVERY HAD BEEN 3 MONTHS OR 90 DAYS LATE. THIS WOULD RESULT IN A 270-DAY DELIVERY OF FIRST PRODUCTION UNDER THE PREVIOUS CONTRACT, WELL WITHIN THE 300 DAYS IT OFFERED ON THE PRESENT PROCUREMENT.

RESPECTING THE USE OF GRADE 4 TRANSFORMERS, WE WERE ADVISED THAT THE SPECIFICATIONS FOR THE SYSTEM ARE THE SAME AND REMAIN UNCHANGED REGARDLESS OF THE TYPE OF TRANSFORMERS USED. THE GRADE 4 TRANSFORMER IS SUPERIOR TO THE GRADE 5 TRANSFORMER FOR SOME OF THE REASONS YOU STATED. AVAILABLE INFORMATION INDICATES THAT THE PREVIOUS PRODUCTION OF THE SYSTEMS BY UNIVERSAL CONTAINED A MIXTURE OF GRADE 4 AND GRADE 5 TRANSFORMERS. IT IS RECOGNIZED THAT THERE IS A CAPACITANCE DIFFERENCE BETWEEN TRANSFORMERS WHICH MUST BE CONSIDERED IN THIS PRODUCTION, AND THAT THE GRADE 4 TRANSFORMER IS A MORE RUGGED, RELIABLE AND COSTLY ITEM. HOWEVER, INASMUCH AS THE EQUIPMENT PERFORMANCE REQUIREMENTS HAVE NOT CHANGED, UNIVERSAL HAS PREVIOUSLY USED SOME GRADE 4 TRANSFORMERS, AND THE REQUIREMENT OF GRADE 4 TRANSFORMERS IS IMPOSED BY CONTRACT ON BOTH CONTRACTORS, THIS DOES NOT PREVENT OR DICTATE AWARD TO EITHER CONTRACTOR.

WE FIND NO BASIS IN THESE FACTS, AS SET FORTH BY THE DEPARTMENT OF THE ARMY, WHICH REQUIRES MODIFICATION OF OUR PRIOR DECISION. AS STATED IN OUR LETTER OF APRIL 12, 1968, TO RADALAB.

"* * * THE MOST SERIOUS DEFECT IN THE PROCEDURES FOLLOWED WAS THE UNEQUAL TREATMENT ACCORDED RADALAB AND UNIVERSAL PRIOR TO THE AWARD. * * *"

OUR CONCLUSION WAS NOT BASED UPON UNIVERSAL'S BEING MORE OR LESS CAPABLE TO PERFORM THAN RADALAB, RATHER THAT THE PROCEDURES FOLLOWED DID NOT RESULT IN A FAIR DETERMINATION OF THE RESPONSIBILITY OF UNIVERSAL AS OF THE POINT IN TIME AT WHICH AWARD WOULD BE MADE CONSIDERING THE DELIVERIES REQUIRED.