B-174037, DEC 29, 1971

B-174037, DEC 29, 1971

BID PROTEST - IMPROPER EXPENDITURE OF PUBLIC FUNDS DECISION DENYING PROTEST OF AEROSONIC CORPORATION AGAINST A SOLICITATION ISSUED BY NASA CONCERNING THE DEVELOPMENT OF AN ALTITUDE REPORTING ENCODER. PROTESTANT ALLEGES AN IMPROPER EXPENDITURE OF PUBLIC FUNDS FOR THE BENEFIT OF JAPANESE MANUFACTURERS. THIS PROCUREMENT WOULD PROVIDE AMERICAN INDUSTRY WITH AN OPPORTUNITY TO DEVELOP AN ITEM WHICH MIGHT BE USED ON ALL MAKES OF ALTIMETERS. SINCE THERE SEEMS TO BE NO STATUTORY VIOLATION, THE PROTEST IS DENIED.

TO AEROSONIC CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR PROTEST UNDER SOLICITATION NO. L63 2065, ISSUED ON JUNE 15, 1971, BY THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION'S (NASA) LANGLEY RESEARCH CENTER (LARC).

THE INSTANT PROCUREMENT, THE FIRST STEP OF A TWO-STEP FORMALLY ADVERTISED PROCUREMENT, REQUESTED TECHNICAL PROPOSALS FOR THE DESIGN, DEVELOPMENT AND FABRICATION OF ONE DEMONSTRATION MODEL OF AN ALTITUDE REPORTING ENCODER THAT CAN BE ADAPTED TO GENERAL AVIATION-TYPE ALTIMETERS. THIS SOLICITATION FOLLOWS THE CANCELLATION OF SOLICITATION NO. L63-1862, AFTER A PREVIOUS PROTEST BY YOUR FIRM TO NASA ALLEGING AN IMPROPER EXPENDITURE OF PUBLIC FUNDS IN FURTHERANCE OF THE DEVELOPMENT OF AN ENCODING SYSTEM FOR JAPANESE FIRMS.

IT IS ADMINISTRATIVELY REPORTED THAT THE EARLIER SOLICITATION COVERED THE SAME TYPE OF REQUIREMENT EXCEPT THAT IT CALLED FOR INTERFACE DESIGN, RETROFITTING, AND PERFORMANCE TESTING AROUND THE UNITED INSTRUMENTS MODEL UI-5932 ALTIMETER. THE COGNIZANT TECHNICAL PERSONNEL CHOSE THIS PARTICULAR ALTIMETER AS REPRESENTATIVE OF THOSE PRESENTLY BEING PROVIDED IN NEW GENERAL AVIATION AIRCRAFT, WITHOUT KNOWLEDGE OF ITS FOREIGN MANUFACTURE. CONSEQUENTLY, THE PRESENT SOLICITATION WAS ISSUED WITHOUT REFERENCE TO ANY SPECIFIC ALTIMETER MODEL, AND WITHOUT ANY PARTICULAR INTERFACE OR RETROFIT REQUIREMENTS. FURTHER, THE NEW SOLICITATION MADE IT CLEAR THAT THE PROCUREMENT GOAL WAS TO DEVELOP AND PROVE AN ENCODE DESIGN WHICH COULD BE ADAPTED TO THE WIDEST POSSIBLE VARIETY OF ALTIMETERS IN GENERAL AVIATION USE. ALTHOUGH YOUR COMPANY WAS RESOLICITED, NO PROPOSAL WAS SUBMITTED BY IT. OF THE FIVE AMERICAN FIRMS SUBMITTING PROPOSALS TWO WERE DEEMED TECHNICALLY ACCEPTABLE. TO DATE THE SECOND STEP IFB HAS NOT BEEN ISSUED.

YOUR PROTEST BEFORE OUR OFFICE ASSERTS THAT:

" *** THE TAX PAYERS OF THE UNITED STATES ARE SPENDING MONEY TO HAVE AN ITEM DEVELOPED THAT WILL ONLY OPERATE ON JAPANESE MANUFACTURED PRODUCTS

IN RESPONSE, NASA HAS OBSERVED:

" *** RESPONSIBLE TECHNICAL AND PROCUREMENT PERSONNEL REVIEWED AEROSONIC'S MOST RECENT LETTER OF SEPTEMBER 2, 1971, TO THE GENERAL ACCOUNTING OFFICE, AND CONCLUDE THAT THE ALLEGATIONS MADE BY THE PROTESTOR ARE NOT VALID. AS STATED HERETOFORE, THE ULTIMATE OBJECTIVE OF THE PROCUREMENT WAS TO PRODUCE ONE DEMONSTRATION MODEL OF AN ALTITUDE- REPORTING ENCODER FOR IN-HOUSE EVALUATION OF THE STATE-OF-ART OF THE TECHNOLOGY AND TECHNIQUE AND NOT TO ASSIST THE JAPANESE GOVERNMENT AND THE JAPANESE MANUFACTURERS IN COMPETING AGAINST AMERICAN PRODUCTS. THE FACT REMAINS, HOWEVER, THAT JAPANESE-MANUFACTURED ALTIMETERS DO EXIST IN THE AMERICAN GENERAL AVIATION FLEET AND IN THE INTEREST OF AERONAUTICAL SAFETY CANNOT BE IGNORED; THUS, THE ENCODER TECHNIQUES MUST EVENTUALLY INCLUDE CONSIDERATION OF FOREIGN-MADE ALTIMETER MECHANICAL ARRANGEMENTS. SHOULD BE NOTED THAT ALL OF THE FIRMS WHO SUBMITTED PROPOSALS IN THE FIRST STEP ARE AMERICAN FIRMS. IT IS OUR BELIEF THAT THROUGH THIS EFFORT INDUSTRY EVENTUALLY WILL BE AFFORDED AN OPPORTUNITY TO MANUFACTURE PROFIT- PRODUCING ITEMS FOR USE ON ALL MAKES OF ALTIMETERS THROUGH THE RETROFIT PROCESS. THIS CENTER DOUBTS THAT 'EVERY AMERICAN AIRCRAFT INSTRUMENT MANUFACTURER HAS ALREADY DEVELOPED THIS PROGRAM.' AS STATED HERETOFORE, A NUMBER OF ALTIMETER ENCODERS HAVE BEEN OR ARE BEING DEVELOPED FOR COMMERCIAL AND MILITARY APPLICATIONS, BUT TO OUR KNOWLEDGE, NO SIMPLE OPTICALLY COUPLED ENCODER OF LOW COST HAS BEEN DEVELOPED WHICH CAN BE ADAPTED TO MOST OF THE EXISTING ALTIMETERS INSTALLED ON THE APPROXIMATELY 100,000 SINGLE-ENGINE AIRCRAFT IN THE UNITED STATES GENERAL AVIATION FLEET."

WHILE IT MAY BE TRUE THAT JAPANESE FIRMS PRESENTLY ENJOY A CONSIDERABLE PERCENTAGE OF THE AMERICAN MARKET FOR ALTIMETERS, WE ARE NOT CONVINCED, FROM OUR REVIEW OF THE RECORD BEFORE US, THAT THE INSTANT PROCUREMENT FOR RESEARCH AND DEVELOPMENT OF A DEMONSTRATION MODEL OF AN ENCODER IS DESIGNED TO DEVELOP JAPANESE FIRMS TO COMPETE AGAINST AMERICAN FIRMS. RATHER, IT WOULD APPEAR THAT AMERICAN INDUSTRY WILL HAVE EVERY OPPORTUNITY TO DESIGN AN ITEM FOR USE ON ALL MAKES OF ALTIMETERS, BE THEY DOMESTIC OR FOREIGN. WE THINK IT SIGNIFICANT THAT FIVE AMERICAN FIRMS EVIDENTLY SAW THIS POTENTIAL. WHETHER THE DESIGN FINALLY SELECTED WILL COST MORE THAN THE $300 PRESENTLY ENVISAGED BY NASA AND, IF SO, THE MANNER IN WHICH DOMESTIC MANUFACTURERS WILL BE REQUIRED TO COMPETE WITH FOREIGN MANUFACTURERS, MUST BE LEFT INITIALLY FOR DETERMINATION BY THE PROCURING AGENCIES UNDER THEIR REGULATIONS WHICH IMPLEMENT THE BUY AMERICAN ACT, 41 U.S.C. 10A-D, OR TO THE CONGRRESS UNDER ANY AMENDMENTS THERETO WHICH IT MAY ENACT.

AT PRESENT, WE CAN FIND NO VIOLATION OF ANY OF THE PERTINENT PROCUREMENT STATUTES OR REGULATIONS, AND YOUR PROTEST MUST THEREFORE BE DENIED.