B-164593, AUG. 27, 1968

B-164593, AUG. 27, 1968

TO MECHTRON CORPORATION:

REFERENCE IS MADE TO YOUR LETTERS OF JUNE 13 AND JUNE 28, 1968, PROTESTING A PROCUREMENT OF NAVIGATION SETS (LAND, VEHICULAR) ON A SOLE- SOURCE BASIS FROM AVIATION ELECTRIC COMPANY LIMITED BY THE UNITED STATES ARMY MOBILITY EQUIPMENT COMMAND UNDER REQUEST FOR PROPOSAL NO. DAAK01-68-R -7538 ISSUED MAY 24, 1968. WHILE YOUR PROTEST WAS MADE PRIOR TO THE AWARD, APPROVAL TO PROCEED WITH THE AWARD WAS OBTAINED FROM THE APPROPRIATE DEPARTMENTAL LEVEL AND THIS OFFICE WAS ADVISED OF SUCH PROPOSED ACTION IN ACCORDANCE WITH PARAGRAPH 2-407.9 (B) (2) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR).

THE REQUIREMENT WAS SYNOPSIZED IN THE COMMERCE BUSINESS DAILY, AND THE BASIS FOR SOLE-SOURCE PROCUREMENT WAS SET FORTH THEREIN AS "SUPPLY REQUIRED IS A CRITICAL ITEM WHICH MUST BE OBTAINED FROM THE MANUFACTURER WHO DEVELOPED THE DUAL SYSTEM INCLUDING INSTALLATION KITS FOR VARIOUS MILITARY VEHICLES.' A NOTE TO THE ADVERTISEMENT STATED THAT THE NOTICE DID NOT SOLICIT ADDITIONAL PROPOSALS BUT WAS ISSUED FOR THE BENEFIT OF PROSPECTIVE SUBCONTRACTORS.

YOU STATE THAT YOU HAVE DEVELOPED A VEHICLE POSITION LOCATOR WHICH WILL FULFILL ALL OF THE REQUIREMENTS OF THE PROCUREMENT, AND THAT "THE SO CALLED -DUAL SYSTEM- IS NO MORE THAN THE SUBSTITUTION OF A MAGNETIC COMPASS FOR THE NORTH-SEEKING GYROSCOPE, AS THE DIRECTION SENSING DEVICE IN THE NAVIGATION SYSTEM.' YOU SAY THAT SUCH SUBSTITUTION INVOLVES THE REPLACEMENT OF ONE PURCHASED COMPONENT FOR ANOTHER WHICH LEAVES ONLY THE INSTALLATION KITS AS THE BASIS FOR SOLE-SOURCE PROCUREMENT. YOU FURTHER CONTEND THAT THE INSTALLATION MOUNTING BRACKET WOULD TAKE ONLY AN HOUR OF DESIGN TIME TO DUPLICATE, AND THAT "THE UNIQUENESS IMPLIED BY THE NOTIFICATION OF SOLE-SOURCE PROCUREMENT SIMPLY DOES NOT EXIST AND IS AN ATTEMPT TO DIRECT PROCUREMENT IN VIOLATION OF THE LAWS ENACTED TO INSURE OPEN COMPETITION.'

THE HISTORY OF THE DEVELOPMENT OF THE DUAL CAPABILITY NAVIGATION SYSTEM, AND THE JUSTIFICATION FOR ITS PROCUREMENT ON A SOLE-SOURCE BASIS ARE SET OUT IN THE ADMINISTRATIVE REPORT TO THIS OFFICE AS FOLLOWS:

"A PROCUREMENT WORK DIRECTIVE (PWD) WAS ISSUED ON 8 AUGUST 1966 FOR 155 NAVIGATION SETS, LAND, VEHICULAR. A SOLICITATION WAS ISSUED TO 24 COMPANIES ON 20 MARCH 1967. THE ITEM BEING PROCURED WAS THE GYROCOMPASS AUTOMATIC NAVIGATION (GAN) SYSTEM.

"ON 6 APRIL 1967, THIS COMMAND WAS NOTIFIED THAT THE SYSTEM HAD BEEN TYPE CLASSIFIED FOR LIMITED PRODUCTION (LP), AND THE TYPE CLASSIFICATION WAS FOR A DUAL CAPABILITY SYSTEM, GAN AND MAGNETIC AUTOMATIC NAVIGATION (MAN). ON 14 APRIL 1967, THE SOLICITATION WAS CANCELLED.

"AVIATION ELECTRIC COMPANY LIMITED, MONTREAL, CANADA HAS BEEN INVOLVED WITH THE DEVELOPMENT AND PRODUCTION OF A LAND NAVIGATION SYSTEM FOR THE CANADIAN ARMY SINCE 1959. AS OF EARLY 1968 THEY HAD SUPPLIED 110 SYSTEMS TO THE CANADIAN ARMY, 235 SYSTEMS TO THE BRITISH ARMY AND TOKEN QUANTITIES TO SEVERAL OTHER NATO NATIONS FOR EVALUATION.

"IN 1961, COMPARISON TESTING BETWEEN THE CANADIAN AND U.S. DEVELOPED SYSTEMS REQUESTED BY CONARC WERE PERFORMED BY THE ARMOR ENGINEER BOARD AT FORT KNOX. THE FINAL REPORT RECOMMENDED THAT THE CANADIAN SYSTEM BE TYPE CLASSIFIED FOR LIMITED PRODUCTION AND THAT R-AND-D FUNDS FOR THE U.S. PROGRAM BE TERMINATED. FUNDING FOR THE U.S. NAVIGATION PROGRAM CEASED EARLY IN 1962 BUT IT WAS DECIDED TO WITHHOLD TYPE CLASSIFICATION OF THE CANADIAN SYSTEM UNTIL ADDITIONAL TESTING WAS PERFORMED. IN 1964 THE U.S. REQUESTED FROM THE CANADIAN GOVERNMENT A LOAN OF 10 SYSTEMS FOR FURTHER EVALUATION. IN FULL COOPERATION WITH THE U.S., THE CANADIAN GOVERNMENT LOANED THE SYSTEMS REQUESTED AND A SERIES OF TESTS WERE PERFORMED UNDER THE DIRECTION OF CDC AND COMPLETED BY THE END OF 1964. THE RESULTS OF THESE TESTS ARE SUMMARIZED IN A SERIES OF THREE (3) REPORTS WRITTEN BY THE EVALUATING TEAMS AND A RECOMMENDATION BASED ON THESE REPORTS TO TYPE CLASSIFY THE SYSTEM FOR LIMITED PRODUCTION, SUBJECT TO CERTAIN MODIFICATIONS, WAS ISSUED BY CDC ON 19 JULY 1965.

"THE EQUIPMENT SUPPLIERS PROCEEDED TO INTRODUCE THESE MODIFICATIONS INTO THE EQUIPMENT BUT TESTS WERE NOT PERFORMED ON THE MODIFIED EQUIPMENT BY THE U.S. ARMY. THE CANADIAN ARMY DID PERFORM A SERIES OF TESTS ON THE EQUIPMENT AND CONCURRED WITH MOST OF THE CDC RECOMMENDATIONS, HOWEVER; THE ADDITIONAL FEATURES HAD RAISED THE PRICE OF THE GYROCOMPASS TO APPROXIMATELY $11,000 AND THE COMPUTING EQUIPMENT TO $6,000 RAISING THE TOTAL SYSTEM COST TO ABOUT $17,000. THIS IS THE SYSTEM REFLECTED IN THE TYPE CLASSIFICATION ACTION OF 9 MARCH 1966. IT WAS DECIDED IN THE COURSE OF TYPE CLASSIFICATION THAT THE U.S. WOULD PAY NO MORE FOR A SYSTEM THAN THE CANADIAN OR BRITISH GOVERNMENTS WHICH HAD PAID APPROXIMATELY $12,000 PER SYSTEM AND THE TYPE CLASSIFICATION PART NUMBERS NO LONGER IDENTIFIED THE SYSTEM THAT THE U.S. WAS WILLING TO BUY. IN THE INTERVENING PERIOD FROM 1965 TO THE PRESENT, AVIATION ELECTRIC, SUBSIDIZED IN PART BY THE CANADIAN GOVERNMENT, INTRODUCED SEVERAL MODIFICATIONS INTO THEIR SYSTEMS, CHANGING THE PART NUMBERS OF THE BASIC COMPONENTS BUT KEEPING THE COST AT APPROXIMATELY $12,000 BY USING AN ARMA BROWN MARINE GYROCOMPASS IN LIEU OF THE MILITARY DESIGNED ARMA GYROCOMPASS. IN MARCH 1967 THEY INTRODUCED A MAGNETIC HEADING REFERENCE TO REPLACE THE GYROCOMPASS FOR SOME VEHICLES AND PRELIMINARY TESTS HAVE YIELDED EXCELLENT RESULTS. THE INTRODUCTION OF A MAGNETIC HEADING REFERENCE HAS GIVEN RISE TO A NEW SERIES OF PART NUMBERS FOR THE COMPUTING AND DISPLAY COMPONENTS FOR WHICH MODIFICATIONS WERE NECESSARY IN ORDER TO INTERCHANGE HEADING REFERENCES ON THE SYSTEM. BASED ON THE RESULTS OF PRELIMINARY TESTING, THE U.S. ARMY MOBILITY EQUIPMENT RESEARCH AND DEVELOPMENT CENTER RECOMMENDED THAT THE U.S. ARMY PROCURE A SYSTEM WITH A DUAL CAPABILITY IN ORDER TO EVALUATE AND DETERMINE THE LIMITATIONS OF EACH HEADING REFERENCE. THE ADVANTAGE OF PROCURING A SYSTEM WITH A DUAL CAPABILITY WAS STATED TO BE AN ACCELERATED EVALUATION OF THE TWO HEADING REFERENCES AND MINIMIZING THE LOGISTIC SUPPORT NECESSARY FOR FIELD EVALUATION.

"THE TERMINATION OF THE U.S. R-AND-D EFFORT IN 1962 RESULTED IN A LOSS OF INTEREST BY POTENTIAL SUPPLIERS SINCE THERE WAS NO APPARENT MARKET AND NO WORKING FUNDS. AS A RESULT, THE AVIATION ELECTRIC COMPANY WAS DETERMINED TO BE THE ONLY COMPANY IN A POSITION TO SUPPLY A SYSTEM WITH A DUAL CAPABILITY THAT WOULD MEET THE MILITARY CHARACTERISTICS.

"THE U.S. ARMY MOBILITY EQUIPMENT RESEARCH AND DEVELOPMENT CENTER (MERDC) TESTED A PROTOTYPE POSITION LOCATOR MANUFACTURED BY MECHTRON. THE POSITION LOCATOR PROVIDED A DIGITAL READOUT FOR NORTHINGS AND EASTINGS POSITION. NO PROVISION WAS INCLUDED IN THEIR DESIGN FOR USE OF A POSITION PLOTTER OR USE OF TWO TYPES OF HEADING REFERENCES.

"A PWD WAS INITIATED ON 20 MAY 1968 FOR THE DUAL CAPABILITY SYSTEM. THE PWD WAS AN 02 PRIORITY FOR AN URGENT REQUIREMENT FOR SOUTHEAST ASIA.

"IN ORDER TO EXPEDITE THE INTRODUCTION OF NAVIGATION EQUIPMENT INTO THE U.S. ARMY SUPPLY SYSTEM, AND TO MINIMIZE LOGISTIC SUPPORT IN THE FIELD, IT WAS DETERMINED THAT THE DUAL CAPABILITY SYSTEM BE PROCURED ON A SOLE- SOURCE BASIS FROM AVIATION ELECTRIC. IN THIS MANNER, THE CRITICAL NEED FOR THIS EQUIPMENT FOR USE IN VIETNAM COULD BE MET IN THE SHORTEST POSSIBLE TIME AND IN THE BEST INTEREST OF THE U.S. GOVERNMENT.

"SOLE-SOURCE PROCUREMENT FROM AVIATION ELECTRIC COMPANY WAS FURTHER JUSTIFIED BECAUSE THEIR SYSTEM IS OPERATIONAL, HAVING BEEN PREVIOUSLY FURNISHED TO THE CANADIAN AND BRITISH GOVERNMENTS. EXTENSIVE TESTING HAS FURTHER ESTABLISHED ITS ACCEPTABILITY. IT REPRESENTS THE MOST ADVANCED STATE OF THE ART AVAILABLE AT THIS TIME. A MINIMUM OF ONE YEAR WOULD BE REQUIRED FOR ANOTHER SOURCE TO PRODUCE AN ACCEPTABLE ITEM. THE COMPELLING NEED IN SOUTHEAST ASIA PRECLUDES PROCUREMENT OF ANY OTHER LAND NAVIGATION SET.

"DUE TO THE PRESSING NEED FOR THE SUPPLIES, THE RFP WAS ISSUED PURSUANT TO 10 U.S.C. 2304 (A) (2), PUBLIC EXIGENCY. THE PROPOSED PROCUREMENT WAS SYNOPSIZED (TAB C). THE SYNOPSIS STRESSED THE CRITICAL NATURE OF THE REQUIREMENT. THE SYNOPSIS AS IT APPEARED IN THE COMMERCE BUSINESS DAILY, DID NOT MAKE IT CLEAR THAT A DUAL SYSTEM WAS BEING PROCURED.

"MECHTRON CONTENDS THAT THE DUAL CAPABILITY SYSTEM IS MERELY SUBSTITUTION OF A MAGNETIC COMPASS FOR A NORTH-SEEKING GYROSCOPE, AND THAT THE INSTALLATION KITS ARE RELATIVELY SIMPLE MOUNTING BRACKETS.'

AS STATED IN THE ABOVE REPORT THE PROCUREMENT WAS ASSIGNED PRIORITY DESIGNATOR NO. 2 UNDER THE UNIFORM MATERIEL MOVEMENT AND ISSUE PRIORITY SYSTEM, AND WAS NEGOTIATED PURSUANT TO A DETERMINATION BY THE CONTRACTING OFFICER UNDER THE AUTHORITY OF 10 U.S.C. 2304 (A) (2), AS DELEGATED BY THE SECRETARY, THAT THE PUBLIC EXIGENCY WOULD NOT PERMIT THE DELAY INCIDENT TO FORMAL ADVERTISING. IMPLEMENTING REGULATIONS ARE CONTAINED IN ASPR 3- 202.2 AND PROVIDE FOR USE OF SUCH AUTHORITY IN CASES WHERE IT IS DETERMINED THAT THE NEED IS COMPELLING AND OF UNUSUAL URGENCY. SUCH FINDINGS ARE MADE FINAL BY THE PROVISIONS OF 10 U.S.C. 2310 (B).

IT IS REPORTED THAT THE ASSIGNMENT OF THE 02 PRIORITY WAS MADE SO THAT A CRITICAL NEED FOR THE EQUIPMENT IN VIETNAM COULD BE MET IN THE SHORTEST POSSIBLE TIME. CONTRARY TO YOUR CONTENTION THAT YOU HAVE AN AVAILABLE VEHICLE POSITION LOCATOR WHICH FULFILLS ALL THE ESSENTIAL REQUIREMENTS OF ARMY'S NEEDS FOR A DUAL CAPABILITY SYSTEM, IT IS THE ADMINISTRATIVE POSITION THAT A MINIMUM OF ONE YEAR WOULD BE REQUIRED FOR ANOTHER SOURCE TO PRODUCE AN ACCEPTABLE ITEM, AND THAT AVIATION ELECTRIC COMPANY'S SYSTEM IS THE ONLY SYSTEM TESTED THAT MEETS THE MILITARY REQUIREMENTS. WHILE YOU CONTEND THAT THE DUAL CAPABILITY SYSTEM IS NO MORE THAN THE SUBSTITUTION OF A MAGNETIC COMPASS FOR THE NORTH-SEEKING GYROSCOPE AND THAT THE KITS ARE RELATIVELY SIMPLE MOUNTING BRACKETS, IT IS NOTED THAT THE ARMY REPORTS:

"THE DUAL SYSTEM PROVIDES USE OF EITHER A GYROCOMPASS OR A MAGNETIC SENSOR HEADING REFERENCE. THE COMPUTER AND THE POWER SUPPLY ARE REQUIRED TO OPERATE WITH EITHER HEADING REFERENCE. THE SYSTEM ALSO INCLUDES ALL THE KITS FOR INSTALLING THE SYSTEM IN EACH TYPE OF VEHICLE, I.E., M113, M114, M37, M151, M125A1, M577, AND M60 TANK. EACH KIT WAS DESIGNED AS A RESULT OF SPACE STUDIES CONDUCTED AND MAGNETIC SIGNATURES DETERMINED ON EACH VEHICLE. THIS REQUIRED OVER 1 YEAR OF EXTENSIVE TESTS AND DESIGN OF SPECIAL HARDWARE AND WIRING HARNESS.'

IT IS WELL ESTABLISHED THAT PROCURING ACTIVITIES OF THE GOVERNMENT HAVE PRIMARY RESPONSIBILITY FOR DETERMINING THEIR NEEDS FOR EQUIPMENT AND FOR DETERMINING WHETHER OFFERED EQUIPMENT MEETS SUCH NEEDS, AND THAT IN THE ABSENCE OF A CLEAR SHOWING OF ARBITRARY OR CAPRICIOUS ACTION BY THE PROCUREMENT OFFICIALS THEIR DETERMINATIONS IN SUCH MATTERS ARE CONTROLLING. HERE, FOR THE REASONS SHOWN ABOVE AND PURSUANT TO THE AUTHORITY VESTED IN HIM, THE CONTRACTING OFFICER FOUND THAT THERE WAS AN URGENT AND COMPELLING NEED FOR THE SYSTEMS WHICH COULD NOT BE SATISFIED WITHIN THE REQUIRED TIME BY PROCUREMENT FROM ANY SOURCE OTHER THAN AVIATION ELECTRIC COMPANY. WE HAVE REVIEWED THE MATERIAL SUBMITTED WITH YOUR PROTEST AND WE CANNOT CONCLUDE THAT THE CONTRACTING OFFICER'S DETERMINATION AND FINDINGS WERE IN ANY WAY THE RESULT OF ARBITRARY OR CAPRICIOUS ACTION, OR THAT THEY ARE CLEARLY UNSUPPORTABLE.

ACCORDINGLY, SINCE THE PROCUREMENT WAS NEGOTIATED PURSUANT TO BASIC STATUTORY AUTHORITY PROVIDED BY 10 U.S.C. 2304 (A) (2), AS IMPLEMENTED BY APPROPRIATE REGULATIONS, UNDER DETERMINATIONS OF CIRCUMSTANCES WHICH APPEAR TO BE WITHIN THE CONTEMPLATION THEREOF, WE FIND NO LEGAL BASIS FOR QUESTIONING THE ADMINISTRATIVE ACTION IN THIS MATTER.