BNUMBER: B-271429
DATE: July 18, 1996
TITLE: Precision Logistics, Inc.
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Matter of:Precision Logistics, Inc.
File: B-271429
Date:July 18, 1996
David K. Eary for the protester.
Benjamin G. Perkins, Esq., and Niketa L. Wharton, Esq., Defense
Logistics Agency, for the agency.
Paula A. Williams, Esq., John Van Schaik, Esq., and Michael R. Golden,
Esq., Office of the General Counsel, GAO, participated in the
preparation of the decision.
DIGEST
Protest is sustained where procuring agency failed to promptly forward
protester's technical data package for alternate product to the office
which conducts evaluations of alternate products for the flight
critical aircraft part and failed to request expedited processing of
the package, thereby depriving the protester of an opportunity to
compete and resulting in a sole source award.
DECISION
Precision Logistics, Inc. protests the award of a contract to Wyvern
Technologies, Inc. under request for proposals (RFP) No.
SPO460-96-R-0509, issued by the Defense Logistics Agency, Defense
Supply Center Richmond (DSCR), for electrical distribution boxes for
the F-5 aircraft. Precision alleges DSCR unreasonably delayed the
evaluation of its alternate product and thereby prevented Precision's
alternate product from being evaluated in time for contract award.
We sustain the protest.
The RFP was issued on November 24, 1995, for a quantity of electrical
distribution boxes described with a part number of Northrup Grumman
Corporation.[1] The function of the distribution box is to rid the
F-5 aircraft of heavy materials, including missiles, bombs, and
electronic equipment not critical to control of the aircraft when the
pilot needs to escape danger quickly. The RFP advised that the
distribution box is a critical application item the failure of which
could injure personnel or jeopardize a vital agency mission and only
Wyvern's product was approved.
The RFP required offerors to specify whether they were offering the
exact product listed in the item description or an alternate product.
Alternate product offers were required to include all drawings,
specifications, and data necessary to demonstrate the acceptability of
the alternate product before award. The RFP also stated that if the
agency could not determine that an alternate item was acceptable
before the contract award date, the alternate offer would not be
considered for this procurement. The RFP stated that award would be
made to the offeror whose proposal represented the best value to the
government, considering price and past performance.
By the December 26 closing date, DSCR received proposals from Wyvern,
Precision, and Hill Aerospace Defense, the latter two offering
alternate products. Precision's proposal included a technical data
package for its alternate product and was significantly lower priced
than Wyvern's. Hill did not submit a technical data package with its
proposal; therefore, the buyer requested and, on January 17, received
a technical data package from that firm. On January 18, the buyer
forwarded both technical data packages to DSCR's technical operations
division for review. That office reviewed the data packages and
subsequently, on February 14, forwarded them to the Engineering
Support Activity (ESA) at Kelly Air Force Base, Texas to evaluate and
determine the technical acceptability of both alternate products. The
ESA office was asked to complete its evaluation within 45 days.
Also on February 14, in response to the contracting officer's request,
the buyer checked with the using activity and was informed that the
distribution boxes were in backorder status. The contracting officer
decided to proceed with award since the distribution box is a critical
application item. Award was made on March 7 to Wyvern pursuant to 10
U.S.C. sec. 2304(c)(1) (1994), as the only known responsible source
available to provide 13 items which the agency needed to fill existing
backorders and to maintain an in-stock status. The award was for a
unit price of $27,491.81 and a total price of $357,393.53.[2]
The ESA completed its review and approved Precision's alternate
product on March 15. The approval notice was received by the
contracting officer on March 19. DSCR has suspended performance of
the contract pending resolution of the protest.
Precision contends that it was denied an opportunity to compete for
the award because the agency unreasonably failed to promptly process
its December 26 technical data package for an alternate product. The
protester notes that DSCR did not forward its technical data package
to the ESA when its proposal was received. Instead, the buyer waited
until Hill submitted a technical data package and, on January 18, sent
the data package to DSCR's technical operations division. Almost 4
weeks later, the technical operations division forwarded both
technical data packages to the ESA office for evaluation. These
delays, the protester states, frustrated its right to compete and
resulted in a sole source award to Wyvern.
In response, DSCR insists that it acted reasonably promptly in
processing Precision's technical data package since, measured from
December 26, 1995, only 34 working days elapsed between the receipt of
the protester's proposal and submission of the technical data packages
to the ESA office for evaluation. The agency explains that the
solicitation closed during the Christmas holidays while the buyer for
this item was on leave; however, upon her return on January 3, the
buyer reviewed the two alternate offers, requested and received a
technical data package from Hill on January 17, and submitted both
offers to DSCR's technical operations office for evaluation. The
agency reports that the buyer has no technical expertise to make a
determination concerning the technical acceptability of an alternate
product based on the technical data package so it is the agency's
normal procedure to send technical data packages to its technical
operations office for review. That office then determines whether the
data packages are adequate, whether its technical personnel can review
and evaluate the data packages or whether it is a matter for the ESA
to review and evaluate. Here, because the required item is a critical
application item, DSCR reports that its technical operations office
determined that the technical data packages needed to be reviewed and
evaluated by the ESA and forwarded both data packages for evaluation
by the ESA, 19 working days after the technical operations office
received the data packages from the buyer and 34 working days after
receipt of Precision's proposal. Finally, DSCR argues that it was not
required under 10 U.S.C. sec. 2319(c)(5) to delay award until Precision's
alternate product was approved.
The Competition in Contracting Act of 1984 (CICA), 10 U.S.C. sec. 2304,
with certain limited exceptions, requires contracting officers to
"promote and provide for full and open competition in soliciting
offers and awarding contracts." Federal Acquisition Regulation sec.
6.101(a). When an agency restricts a procurement to approved
products, 10 U.S.C. sec. 2319(b) requires the agency to give offerors
proposing alternate products a reasonable opportunity to demonstrate
that their products can qualify. BWC Technologies, Inc., B-242734,
May 16, 1991, 91-1 CPD para. 474. Implicit in this requirement is an
obligation on the part of the agency to review alternate offers in a
reasonably prompt manner. ABA Indus., Inc., B-250186, Jan. 13, 1993,
93-1 CPD para. 38. Where a procuring agency is not itself responsible for
the evaluation and approval of an alternate product, it must promptly
provide a request for approval to the agency responsible for
evaluation so as not to deprive an offeror of a reasonable opportunity
to qualify its product and compete for award. Advanced Seal
Technology, Inc., B-249855.2, Feb. 15, 1993, 93-1 CPD para. 137.
What constitutes a reasonable opportunity depends on the facts and
circumstances of each particular case. For example, we have denied
protests concerning agency delays in processing approval requests
where the delay was longer than that involved in this case. See Tura
Mach. Co., B-241426, Feb. 4, 1991, 91-1 CPD para. 114 (delay of
approximately 3-1/2 months was not an unreasonable time to qualify
alternate product). In this case, however, because contracting
officials made no effort to assure prompt handling of Precision's
technical data package, we think the agency did not meet its
obligation to provide Precision with a reasonable opportunity to
demonstrate its products could qualify. See BWC Technologies, Inc.,
supra.
First, we believe DSCR was not as diligent as it should have been in
forwarding Precision's technical data package for review and
evaluation. Although the buyer first reviewed the proposals on
January 3 (after receiving them on December 26), the buyer did not
immediately send Precision's technical data package to DSCR's
technical operations office for review. Rather, the buyer held
Precision's data package until January 18, an additional 2 weeks, in
order to obtain a technical data package from Hill, which had failed
to submit the required package with its proposal. The agency explains
that the buyer held up Precision's data package because she
erroneously believed it would take the ESA 60 to 90 days to respond to
the request for evaluation of an alternate product and therefore did
not believe that holding up Precision's package would prejudice
Precision. In addition, the buyer believed that it would be "more
efficient" for the agency to send both technical data packages for
review and evaluation as opposed to submitting them separately.
While the buyer explains that she was attempting to promote
competition by holding Precision's data package until it could be
submitted with a data package from Hill, the result was that Precision
was denied an opportunity to have its technical data package evaluated
and approved in time for award. In our view, it simply made no sense
to hold up the evaluation process on Precision's alternate product
while waiting for a data package from Hill. The buyer apparently held
up Precision's data package because it was more convenient to submit
both packages at the same time. Given that at that point only one
offeror was eligible for award and prompt processing of Precision's
alternate offer was required for there to be competition on this
procurement, we do not think the convenience of the buyer was a
reasonable basis to delay the processing. The focus and thrust of
CICA and 10 U.S.C. sec. 2319 is to enhance competition and preclude sole
source awards as much as possible and to preclude necessary
qualification requirements from restricting competition as much as
possible. Under the circumstances here, although the buyer believed
Precision would not be prejudiced because it would take 60 to 90 days
for the ESA to complete its evaluation, in fact, since the ESA
approved Precision's alternate product within 1 week of the award, the
2-week delay prevented Precision from being eligible for award.
We are also concerned that the need for prompt consideration of
Precision's data package was not communicated to the officials
responsible for evaluation of alternate products. In this respect,
although the contracting officer decided in February that award could
not be delayed because there were seven backorders for the
distribution boxes, there had been seven backorders when the
solicitation was issued in November 1995. In spite of that
situation--in which orders for this critical application item could
not be met--no urgency was conveyed to the personnel responsible for
evaluation of alternate products. Rather, although the form used by
the buyer to forward Precision's technical data package permitted the
requester to indicate that the matter was "URGENT," the form indicated
the items were for "STOCK." In addition, although the form requesting
support from the ESA permitted the requester to fill in an "ESA
Response Time Required," and to state that the request was an
emergency, the form used to request processing of Precision's data
package allowed 45 days. Again, since there was no competition for
this item, and since there was some urgency in the agency's need for
this critical application item, we think the office which could see to
prompt processing of the data package should have been informed of
the urgency.
We also believe it would have been prudent for contracting officials
to communicate with the office responsible for evaluation of alternate
products prior to award to ascertain whether one or both of the
alternate products had been approved at that time or whether approval
was imminent. Had the buyer simply made a phone call to the ESA prior
to the March 7 award, the buyer night have learned that Precision's
alternate product would be approved shortly and under these
circumstances the contracting officer might well have delayed the
award for a few days in the interest of obtaining competition for the
requirement. While the agency explains it is not its practice to
contact the ESA regarding evaluation of alternate products,
contracting officials have a duty to promote and provide for
competition and to obtain the most advantageous contract for the
government. In other words, contracting officials must act
affirmatively to obtain and safeguard competition. See generally
Compliance Corp.--Recon., B-239252.3, Nov. 28, 1990, 90-2 CPD para. 435.
They cannot take a docile approach and remain in a sole source
situation when they could reasonably take steps to enhance
competition. See TeQcom, Inc., B-224664, Dec. 22, 1986, 86-2 CPD para.
700. Since the agency was faced with a sole source situation unless
one or both of the alternate offers, both with substantially lower
prices than Wyvern's, qualified, we think it was unreasonable for the
agency not to inquire as to the status of the pending ESA evaluation
before awarding the contract.
Finally, even where competition does not exist for a requirement, but
will exist in the near future, the mandate of CICA for full and open
competition requires agencies to purchase, in a noncompetitive
environment, only what is necessary to satisfy needs that cannot await
a competitive environment. See Ricoh Corp., 68 Comp. Gen. 531 (1989),
89-2 CPD para. 3. In this case, to the extent there was an urgent need
for the distribution boxes when the agency decided to award the
contract, there was no urgent need for all 13 of the units purchased.
As the agency explains, on February 22, there were backorders for
seven items and it purchased 13 in order to fill the backorders and
provide stock at the rate of one item per quarter. Even had a
noncompetitive award been justified, there was no justification for
the purchase of 18 months worth of stock (six additional items which
are used at the rate of one per quarter) on a sole source basis.
We sustain the protest and recommend that the agency terminate the
contract awarded to Wyvern and, if necessary, conduct discussions with
Wyvern and Precision and request best and final offers. The agency
should then make award to the offeror whose proposal represents the
best value to the government. In addition, Precision is entitled to
recover the costs of filing and pursuing this protest. 4 C.F.R. sec.
21.8(d)(1) (1996). In accordance with 4 C.F.R. sec. 21.8(f)(1),
Precision's certified claim for such costs, detailing the time
expended and costs incurred, must be submitted directly to the agency
within 90 days after receipt of this decision.
The protest is sustained.
Comptroller General
of the United States
1. The acquisition was initially issued under small purchase
procedures in October 1994. That solicitation was canceled when
the buyer determined that the procurement would exceed the small
purchase threshold.
2. Precision's unit price was $9,640, and its total price was
$125,320.