B-168366, FEB. 25, 1970

B-168366, FEB. 25, 1970

BID PROTEST--TECHNICAL EVALUATION--COST FACTOR DECISION DENYING PROTEST OF AERO DESIGN PRODUCTS CORPORATION QUESTIONING AWARD OF COST-PLUS-A-FIXED-FEE CONTRACT TO PRESTOLITE CO. UNDER REQUEST FOR QUOTATIONS ISSUED BY ARMY TANK-AUTOMOTIVE COMMAND FOR FURNISHING IGNITION SYSTEMS. AN OFFEROR WHOSE PROPOSAL WAS RATED 11TH OUT OF 12 PROPOSALS SO THAT ITS COST DATA WAS NOT FURNISHED TO THE EVALUATION TEAM DOES NOT HAVE A BASIS TO QUESTION REASONABLENESS OF EVALUATION. SINCE RECORD SHOWS PROPOSALS WERE THOROUGHLY AND CAREFULLY EVALUATED AND ALTHOUGH PRICING SHOULD NOT BE DISREGARDED IT DID NOT BECOME A FACTOR UNTIL THE PROPOSALS HAD BEEN TECHNICALLY EVALUATED. ALSO SINCE PROTESTANT FAILED TO COMPLY WITH RIGHTS IN DATA REQUIREMENT OF SOLICITATION THERE IS NO BASIS FOR QUESTIONING AWARD AND PROTEST IS DENIED.

TO AERO DESIGN PRODUCTS CORPORATION:

WE REFER TO YOUR PROTEST FORWARDED HERE QUESTIONING THE AWARD OF A COST- PLUS-A-FIXED-FEE CONTRACT TO THE PRESTOLITE COMPANY UNDER REQUEST FOR QUOTATIONS NO. DAAE07-69-Q-0892, ISSUED BY THE UNITED STATES ARMY TANK- AUTOMOTIVE COMMAND.

THE REQUEST FOR QUOTATIONS REQUIRED THE SUCCESSFUL OFFEROR TO DEVELOP, FABRICATE AND DELIVER 12 PROTOTYPE SOLID STATE CAPACITOR DISCHARGE IGNITION SYSTEMS AND 100 ANNULAR GAP SPARK PLUGS AND TO PREPARE SPECIFICATIONS AND DRAWINGS. THE PROTOTYPE AND SPARK PLUGS WERE FOR GOVERNMENT ENDURANCE TESTING OF THE SYSTEM. PARAGRAPH XI OF THE INSTRUCTIONS FOR PREPARATION OF QUOTATION LISTED THE FOLLOWING FACTORS FOR EVALUATION OF PROPOSALS IN THEIR DESCENDING ORDER OF WEIGHT:

1. TECHNICAL APPROACH

A. RELIABILITY

B. MAINTAINABILITY

C. TECHNICAL DATA DOCUMENTATION

D. PRODUCTION AND ECONOMICS

E. OVERALL SIZE AND WEIGHT

F. POWER CONSUMPTION

G. ENVIRONMENTAL

H. SHIELDING TESTS

2. ORGANIZATION

A. EXPERIENCE

B. EVIDENCE OF GOOD ORGANIZATION

C. QUALIFICATION OF PERSONNEL

D. ADEQUACY OF FACILITIES

E. RECORD OF PAST EXPERIENCE

F. GEOGRAPHIC LOCATION

3. RESPONSIVENESS

A. COMPREHENSION OF PROBLEMS

B. COMPLETENESS

C. RESPONSE TO TERMS

4. COST

A THREE-MAN EVALUATION COMMITTEE WAS ESTABLISHED TO TECHNICALLY EVALUATE THE PROPOSALS SUBMITTED. TWELVE PROPOSALS WERE SUBMITTED IN RESPONSE TO THE SOLICITATION. INITIAL EVALUATION WAS MADE WITHOUT CONSIDERATION OF THE COST FACTOR AND ESTABLISHED TECHNICAL ACCEPTABILITY OF THREE OF THE TWELVE PROPOSALS IN THE FOLLOWING ORDER OF PREFERENCE:

AMERICAN BOSCH

PRESTOLITE COMPANY

SILICON SYSTEMS, INCORPORATED THE PROPOSAL FROM AERO DESIGN PRODUCTS CORPORATION WAS NOT CONSIDERED WITHIN THE ZONE OF CONSIDERATION. RATING THE TECHNICAL ASPECTS OF THE TWELVE PROPOSALS RECEIVED, THE EVALUATION TEAM RANKED AERO DESIGN PRODUCTS CORPORATION'S PROPOSAL AS ELEVENTH. IN VIEW OF THIS FACT, THE CONTRACTING OFFICER DID NOT FURNISH AERO DESIGN'S COST DATA FROM THEIR PROPOSAL TO THE EVALUATION TEAM. SUBSEQUENT EVALUATION OF THE COST FACTOR AND THE TECHNICAL MERIT OF THE PROPOSALS THAT WERE WITHIN THE AREA OF CONSIDERATION RESULTED IN THE PROPOSALS BEING LISTED IN THE FOLLOWING ORDER OF DESCENDING MERIT:

PRESTOLITE COMPANY

SILICON SYSTEMS, INCORPORATED

AMERICAN BOSCH AFTER NEGOTIATIONS WERE CONDUCTED WITH THE ABOVE THREE OFFERORS, THE CONTRACT WAS AWARDED TO THE PRESTOLITE COMPANY ON SEPTEMBER 24, 1969, IN THE AMOUNT OF $76,801.

IN ACCORDANCE WITH ARMED SERVICES PROCUREMENT REGULATION (ASPR) 4 106.4, AERO DESIGN'S PROPOSAL WAS EVALUATED FOR ITS TECHNICAL APPROACH AND FOUND TECHNICALLY DEFICIENT. THIS REGULATION PROVIDES THAT RESEARCH AND DEVELOPMENT CONTRACTS SHOULD GENERALLY BE AWARDED TO THOSE ORGANIZATIONS WHICH HAVE THE HIGHEST COMPETENCE IN THE SPECIFIC FIELD OF SCIENCE OR TECHNOLOGY INVOLVED. IT HAS BEEN POINTED OUT THAT AERO DESIGN'S PROPOSAL IN THE AMOUNT OF $23,305 WAS MUCH LESS THAN THE AWARD OF $76,801 TO PRESTOLITE COMPANY. ALTHOUGH ASPR 4-106.5 STATES THAT COST OR PRICING SHOULD NOT BE DISREGARDED IN SELECTION OF A PROPOSED CONTRACTOR, THE COST OR PRICING ESTIMATE IN THE INSTANT CASE DID NOT BECOME A FACTOR UNTIL THE PROPOSAL HAD BEEN TECHNICALLY EVALUATED. ON THE RECORD, IT APPEARS THAT THE PROPOSALS HAVE BEEN AS CAREFULLY AND THOROUGHLY EVALUATED AS IS CONSONANT WITH EXPEDITIOUS PROCUREMENT. NUMEROUS ASPECTS OF EACH PROPOSAL WERE NUMERICALLY RATED BY THE THREE-MEMBER EVALUATION TEAM ON THE BASIS OF THE CRITERIA SET FORTH ABOVE. THE SELECTION OF EVALUATION CRITERIA AND THE DETERMINATION OF THE RELATIVE IMPORTANCE ATTACHED TO EACH FACTOR ARE PRIMARILY THE RESPONSIBILITY OF THE PROCURING ACTIVITY, ESPECIALLY WHEN TECHNICAL EVALUATIONS WHICH REQUIRE THE EXERCISE OF SUBJECTIVE JUDGMENT ARE INVOLVED. UNDER THE CIRCUMSTANCES, WE FIND NO BASIS TO QUESTION THE REASONABLENESS AND FAIRNESS OF THE EVALUATION OF PROPOSALS OR TO OTHERWISE JUSTIFY DISTURBING THE AWARD.

WITH REGARD TO THE ALLEGATION THAT THE TYPE OF AWARD TENDS TO PRECLUDE DESIGN IMPROVEMENT AND LOCKS IN A SINGLE-SOURCE PROCUREMENT, WE QUOTE FROM THE CONTRACTING OFFICER'S STATEMENT DATED JANUARY 16, 1970:

"A. THE GOVERNMENT IS CONTINUING TO CONSIDER THE UTILIZATION OF A SOLID STATE CAPACITOR DISCHARGE IGNITION SYSTEM IN ITS FUTURE VEHICLE PROCUREMENTS. THIS CONTRACT, AS AWARDED TO THE PRESTOLITE COMPANY, WILL DETERMINE THE PERFORMANCE OF SUCH A SYSTEM TO THE 1/4 TON VEHICLE FLEET AND ASSIST IN DETERMINING ITS FEASIBILITY FOR USE WITH OTHER TYPES OF VEHICLES. THE XM705 VEHICLE PROCUREMENT IS FOR DEVELOPMENT AND PRODUCTION OF A 1-1/4 TON CARGO TRUCK AND DOES INCLUDE THE REQUIREMENT FOR A SYSTEM OF THIS TYPE. THE CONTRACT WAS AWARDED TO GENERAL MOTORS, CHEVROLET DIVISION ON 27 DECEMBER 1968. GENERAL MOTORS HAS THE RESPONSIBILITY FOR DEVELOPING AND FURNISHING THE ENTIRE VEHICLE SYSTEM, WHICH INCLUDES THE IGNITION SYSTEM.

"B. THE EVALUATION BY THE GOVERNMENT WAS TO THE MILITARY SYSTEM PROPOSAL BY AERO DESIGN PRODUCTS CORPORATION AND NOT OF THAT COMMERCIALLY AVAILABLE FROM EITHER AERO DESIGN PRODUCTS OR THE PRESTOLITE COMPANY. GENERAL MOTORS DID NOT PROPOSE SO ANY COMPARISON TO A GM PRODUCT COULD NOT BE MADE. DATA WAS NOT FURNISHED BY AERO DESIGN TO INDICATE THAT THEIR SYSTEM, EITHER COMMERCIALLY OR AS PROPOSED, HAD GREATER RELIABILITY. THE PRODUCTION UNIT COST COULD NOT BE COMPARED BECAUSE NEITHER SYSTEM IS IN PRODUCTION. A COMPARISON OF THE PRICES OF EITHER COMMERCIAL SYSTEM WAS NOT A REQUIREMENT NOR COULD IT NECESSARILY DETERMINE THE LOWEST PRODUCTION UNIT COST FOR THE MILITARY SYSTEM REQUIRED.

"C. THE GOVERNMENT, IN ITS EVALUATION AND IN ACCORDANCE WITH THE PROCEDURES SET FORTH IN TAB E, TOOK INTO CONSIDERATION PERSONNEL WHO WERE TO PERFORM THE WORK REQUIRED. THE AERO DESIGN PROPOSAL INDICATED FOUR PEOPLE WHO WERE MEMBERS OF THEIR ORGANIZATION AND FURNISHED TWO RESUMES OF THE PEOPLE WHO WERE TO BE PRIMARILY RESPONSIBLE FOR THE PROGRAM. THE DATA FURNISHED ON THE TWO PEOPLE WAS NOT OF SUCH A NATURE FOR THE GOVERNMENT TO BE ABLE TO DETERMINE THAT THEY COULD ACCOMPLISH THE WORK LEADING TO A SUCCESSFUL PROGRAM.

"D. AS A RESULT OF THE AWARD OF THE CONTRACT TO THE PRESTOLITE COMPANY, DESIGN DRAWINGS ARE TO BE FURNISHED IN ACCORDANCE WITH MIL-D 1000, CATEGORY A, FORM 3. THIS MEANS THE DESIGN DRAWINGS FURNISHED UNDER THIS CONTRACT ARE FOR DESIGN EVALUATION TO EVALUATE DESIGN OR DOCUMENT RESEARCH AND DEVELOPMENT WORK AND ARE PREPARED TO MINIMUM MILITARY CONTROLS. THE DRAWINGS WILL HAVE TO BE FURTHER REFINED IN ORDER TO PERMIT PRODUCTION OF THE SYSTEM. IN PROCUREMENT OF PRODUCTION UNITS, THE GOVERNMENT DESIRES A 'FIXED DESIGN' TO ENSURE STANDARDIZATION AND THAT THE ITEMS IN THE LOGISTICS SYSTEMS ARE IN THE CONFIGURATION DESIRED. ANY SYSTEM THAT IS ONLY FUNCTIONALLY DESIGNED MAY NOT BE CAPABLE OF MULTIPLE INSTALLATIONS AND WOULD REQUIRE A MULTIPLE SYSTEMS FOR REPLENISHMENT PURPOSES. RIGHTS IN TECHNICAL DATA ARE VESTED IN THE GOVERNMENT FOR DEVELOPMENT EFFORT CONTRACTED FOR BY THE GOVERNMENT AND ARE AVAILABLE FOR UTILIZATION IN COMPETITIVE PROCUREMENTS. THE AERO DESIGN PRODUCTS CORPORATION PROPOSAL, COST AND ADMINISTRATIVE PORTION, STATES:

'"THIS OFFER TO SELL CONTEMPLATED SYSTEMS DOES NOT CONSTITUTE AN OFFER TO SELL, GRANT, OR OTHERWISE CONVEY TO THE GOVERNMENT ANY PROPRIETARY DESIGN EMBODIED IN SAID SYSTEM.

'"AERO DESIGN PRODUCTS IS, HOWEVER, COGNIZANT OF THE GOVERNMENT'S REQUIREMENTS FOR COMPETITIVE PRICING AND THE ABILITY TO PRODUCE ADEQUATELY TO SUSTAIN GOVERNMENT REQUIREMENTS AND WILL OFFER THE GOVERNMENT A ROYALTY FREE LICENSE TO HAVE SUCH SYSTEMS PRODUCED IN THE EVENT THAT AERO DESIGN PRODUCTS FAILS TO PERFORM IN ANY FUTURE CONTRACT FOR THE PRODUCTION OF SUCH SYSTEMS.

'"IN VIEW OF THE FACT THAT THERE ARE, WITHIN THE UNITED STATES, AT LEAST TEN OTHER BUSINESS FIRMS OFFERING SUCH SYSTEMS COMMERCIALLY, AERO DESIGN PRODUCTS DOES NOT OFFER ROYALTY FREE LICENSE TO THE GOVERNMENT MERELY FOR COMPETITIVE PRICING PURPOSES SINCE MUCH OF THE COMPETITIVE FEATURES OF OUR SYSTEM IS EMBODIED IN THE DESIGN.' "BASED UPON THE ABOVE, THE SYSTEM PROPOSED BY AERO DESIGN PRODUCTS WOULD HAVE RESULTED IN THE SINGLE-SOURCE PROCUREMENT NOTED BY AERO DESIGN."

BASED ON THE FOREGOING, PARTICULARLY YOUR REFUSAL TO COMPLY WITH THE RIGHTS IN TECHNICAL DATA REQUIREMENT OF THE SOLICITATION, WE FIND NO LEGAL BASIS TO QUESTION THE CONTRACT AWARD MADE UNDER THIS PROCUREMENT. ACCORDINGLY, YOUR PROTEST IS DENIED.