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.