BNUMBER: B-277660
DATE: November 4, 1997
TITLE: Sun Dial and Panel Corporation, B-277660, November 4, 1997
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DOCUMENT FOR PUBLIC RELEASE
The decision issued on the date below was subject to a GAO Protective
Order. This redacted version has been approved for public release.
Matter of:Sun Dial and Panel Corporation
File: B-277660
Date:November 4, 1997
Thomas L. McGovern III, Esq., Hogan & Hartson, for the protester.
Timothy S. Kerr, Esq., Elliott, Reihner, Siedzikowski & Egan, for
Control Products Corporation, an intervenor.
Stephen Stastny, Esq., Defense Logistics Agency, for the agency.
Peter A. Iannicelli, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Agency reasonably did not invite protester to compete for emergency
contract to provide a relatively small quantity of instrument mounting
bezels for use in helicopters until agency can make award of a
contract for a large number of bezels pursuant to a competitive
procurement where: (1) bezels are critical to flying the helicopters
safely; (2) agency had no bezels in its inventory and a large number
of bezels were on back-order; (3) a number of helicopters were already
grounded because of lack of bezels and more were expected to be
grounded in the immediate future; (4) protester had never supplied
these bezels to the agency and its bezels would, therefore, have to
pass first article testing before the agency would consider them
acceptable; and (5) in view of urgent circumstances, agency was
unwilling to incur delay associated with first article testing and
risk that the protester's bezels might not pass first article tests.
DECISION
Sun Dial and Panel Corporation protests the Defense Supply Center
Richmond's (DSCR) issuance, on a sole-source basis, of purchase order
No. SPO440-97-M-PP02 for instrument mounting bezels (national stock
number 6695-01-342-3191)[1] to Control Products Corporation (CPC)
pursuant to request for quotations No. SPO440-97-Q-TF20.[2] The
protester contends that the agency improperly did not solicit a
quotation from it to fulfill the agency's urgent requirement for
bezels even though the agency was aware that Sun Dial was interested
in and fully qualified to manufacture the parts.
We deny the protest.
On July 16, 1997, the DSCR inventory management section requested an
emergency purchase of 63 bezels for use as part of the horizontal
situation indicators in UH--60A "Blackhawk" helicopters. The purchase
request stated that the bezels were essential to the Blackhawk
helicopter's mission and requested that every effort be made to obtain
the fastest delivery possible. That same day, a DSCR contract
specialist contacted CPC and orally requested that CPC submit a
quotation containing its best price and delivery terms for 63 bezels.
CPC's initial quotation stated a price of $1,300 per unit with
delivery of all units 160 days after receipt of an order (ARO). The
next day, the contract specialist orally requested that CPC provide
faster delivery because some aircraft were already grounded. CPC
responded that it would commit to delivering all units 120 days ARO
and that it would try to deliver 10 units sooner. As CPC had
previously supplied the bezels and had no record of any quality
problems, the agency considered an award to CPC acceptable. Citing
the statutory authority of 10 U.S.C. sec. 2304(c)(2) (1994)--the unusual
and compelling urgency exception to the general statutory requirement
for full and open competition--the contracting officer determined on
July 17 that a sole-source award to CPC was justified. On July 23,
the agency issued a purchase order to CPC for 63 bezels at a total
price of $81,900, and Sun Dial filed this protest shortly thereafter.
The protester contends that DSCR should have asked it to submit a
quotation for the 63 urgently needed bezels. The protester asserts
that, even though cognizant agency personnel stated that this was an
"emergency buy" necessitating a sole-source purchase from CPC, the
agency was aware of Sun Dial's interest in supplying bezels because,
at the time of the sole-source purchase from CPC, Sun Dial was (and
still is) actively participating in another procurement for the same
type of bezels that DSCR is presently conducting as a competitive
procurement.[3] The protester also asserts that the agency knew that
Sun Dial was interested in and was capable of supplying quality bezels
in a timely manner because the engineering support activity (i.e., the
United States Army Communications-Electronics Command) had, in fact,
determined that Sun Dial's bezels were acceptable on July 16, 1997,
just 1 week before the purchase order was issued to CPC on a
sole-source basis.
The Competition in Contracting Act (CICA) permits the use of
noncompetitive procedures where the agency's need for the property or
services is of such an unusual and compelling urgency that the United
States would be seriously injured unless the agency is permitted to
limit the number of sources from which it solicits proposals. 10
U.S.C. sec. 2304(c)(2). While CICA requires the agency to request offers
from as many potential sources as is practicable under the
circumstances, 10 U.S.C. sec. 2304(e), the agency may still limit the
procurement to the only firm it reasonably believes can properly
perform the work in the available time. Electro-Methods, Inc.,
B-250931, Feb. 26, 1993, 93-1 CPD para. 181 at 4.
In view of the circumstances existing at the time the purchase order
was issued, DSCR reasonably determined that its immediate need for an
interim quantity of bezels was of such an unusual and compelling
urgency that an emergency, sole-source purchase from CPC was
justified. It is clear from the record, and undisputed by the
protester, that DSCR had an urgent need for a relatively small
quantity of bezels (i.e., 63 units) for use in Blackhawk helicopters
until a larger quantity (i.e., 245 units) could be obtained by the
agency pursuant to the competitive procurement and that bezels are
critical to the Blackhawk helicopter's mission; the helicopter cannot
be flown safely without them.[4] The record shows that, at the time
the purchase order was issued to CPC, DSCR had no bezels of this type
in its inventory stock, 147 bezels were back-ordered, and DSCR
expected more back-orders for bezels to accumulate quickly. Of the
147 bezels that were back-ordered, 35 were classified as issue
priority group 1, which includes only the most urgently needed items.
In fact, at the time the purchase order was issued,
10 helicopters were already grounded due to the lack of any bezels in
stock.[5] Furthermore, based upon historical usage rates, the agency
estimated that approximately 41 additional bezels would be needed
during the 3-month period following the order from CPC.
The protester questions the agency's requiring that its bezels pass
first article testing before the agency will accept them, since the
engineering support activity had conducted a review of its technical
data package and determined that Sun Dial's bezel was an acceptable
part for use in Blackhawk helicopters. Our Office will not question
an agency's determination that first article testing is required
unless the determination is the result of bad faith or fraud, or there
is a clear showing of abuse of discretion by the agency. Brunswick
Corp., Defense Div., B-231996, Oct. 13, 1988, 88-2 CPD para. 349 at 6. No
such showing was made here.
The contemporaneous record shows that, subsequent to the engineering
support activity's approving Sun Dial's bezel based on the technical
data that Sun Dial submitted, the engineering support activity
expressed a desire for DSCR to include a first article test
requirement in the competitive RFP so that any manufacturer that had
not previously manufactured this bezel would be required to prove that
its product is acceptable. In fact, the contracting officer reports
that the approving engineer specifically told him that he approved Sun
Dial's bezel with the expectation that it would be required to undergo
first article testing and that he desired that the bezel be subjected
to such testing. Because the engineering support activity's approval
of Sun Dial's drawing/engineering package was contingent upon the
bezels passing first article testing, and because Sun Dial had never
supplied this particular bezel to DSCR, we think the agency reasonably
decided not to waive the first article test requirement on behalf of
Sun Dial.
Sun Dial contends that, even if its bezels were required to undergo
first article testing, the agency should have solicited a quotation
from it for the emergency buy, since, according to the protester, it
could have completed production and testing of a first article and
still have delivered all 63 bezels within 120 days ARO as required
under the agency's accelerated delivery schedule. The agency responds
that, since Sun Dial had never supplied these bezels to it before, it
could not be sure that Sun Dial's bezels would pass the first article
tests. In view of the critical need for these parts, the agency
reports that it could not risk the additional delay that failure to
pass first article tests would cause. Notwithstanding a firm's claim,
such as Sun Dial's here, that it can meet the leadtime required for
first article testing of an urgently needed item, an agency is not
obligated to take the risk that the product will not pass first
article testing, since such a failure would delay delivery. Rotair
Indus., 69 Comp. Gen. 684, 688 (1990), 90-2 CPD para. 154 at 5. In view
of its extremely urgent need for quick delivery of bezels, and because
Sun Dial had never supplied these particular bezels before, the
agency, reasonably in our opinion, was unwilling to incur the delay
associated with first article testing and approval and the risk that
Sun Dial's bezel would not pass first article tests.
In sum, even though the engineering support activity had reviewed and
approved Sun Dial as a qualified source for the bezels based upon the
technical data package that Sun Dial had submitted to the agency in
connection with the competitive procurement, DSCR reasonably decided
that, for the emergency purchase, it would not consider a quotation
from Sun Dial or any other firm that had not actually manufactured
these bezels before. Because this part is critical to the Blackhawk
helicopter's ability to fly safely, and because a number of the
helicopters were already grounded and others were expected to be
grounded in the near future, we have no reason to question the
agency's decision not to invite Sun Dial to compete for the interim,
emergency purchase. See BlueStar Battery Sys. Corp., B-270111.2,
B-270111.3, Feb. 12, 1996, 96-1 CPD para. 67 at 4-5.
In its comments on the agency's report, Sun Dial raises a new protest
ground--i.e., that the urgent need for the interim quantity of bezels
was the direct result of a lack of advance planning on the agency's
part. Referring to the allegedly overlong period of time that had
elapsed since the issuance of the competitive RFP, Sun Dial states:
Examining the overall circumstances of this procurement--which
actually started in February 1996--it is clear that DSCR itself
created the urgency by wasting months of time (for no apparent
reason) in procuring these items.
In support of this argument, Sun Dial points out that, at the time the
purchase order was issued to CPC, DSCR had been in the process of
conducting the competitive procurement for roughly 17 months and
evaluating Sun Dial's bezel for roughly 16 months, and neither process
had been completed. In view of the fact that bezels are critical and
that the lack of them eventually caused the grounding of some
helicopters, the protester asserts that the agency should have done
something to speed up either the competitive procurement or the
product approval process. This protest ground is untimely. Sun Dial
knew when it filed its initial protest that the agency had justified
its sole-source award to CPC on the basis of urgency and, as Sun Dial
had participated in the competitive procurement from its inception and
submitted its data package for approval just 1 month later, Sun Dial
also knew of the delays associated with the competitive procurement
and product approval process. Nevertheless, Sun Dial did not raise
this issue in its initial protest but, instead, waited until it filed
its comments on the agency report to raise this issue. Because Sun
Dial knew at the time of its initial protest filing that there
appeared to be an inconsistency between the urgency of the sole-source
award and the alleged dilatory nature of the agency's actions in
conducting the competitive procurement and evaluation of Sun Dial's
bezel, Sun Dial should have raised this issue in its initial protest.
As Sun Dial waited more than 10 days after it should have known this
protest basis to file this new protest ground, this protest ground is
dismissed as untimely. Bid Protest Regulations, 4 C.F.R. sec. 21.2(a)(2)
(1997); AT&T, B-251177, B-251177.2, Mar. 16, 1993, 93-1 CPD para. 236 at
5-6.
The protest is denied.
Comptroller General
of the United States
1. Bezels are metal rims that hold the transparent covering of
aircraft instruments in place; bezels protect and illuminate critical
indicators on the aircraft's instrument panel.
2. While this is the agency's designated solicitation number, the
procurement was conducted orally and no written request for quotations
was issued.
3. Request for proposals (RFP) No. SPO440-97-R-0843 was issued on
February 21, 1996, using competitive procedures to purchase 245 of the
same type of bezels with an option to increase the quantity up to 100
percent of the original quantity. Sun Dial submitted a proposal in
response to this competitive RFP. In connection with this competitive
procurement, Sun Dial states that it used reverse engineering to
produce a complete drawing/engineering package which it submitted to
the agency in March 1996 in order to have its bezels qualified as
acceptable alternates to the brand names listed in the RFP. No award
has been made to date.
4. It is undisputed that bezels are critical to the safety of
Blackhawk helicopters and those flying in them.
5. The number of grounded helicopters increased to 16 by August 1.