Bids-Evaluation-Contrary to Terms of Solicitation-Presumption of Unacceptability Agency's presumption that bidders offering surplus material can meet QPL requirements only if bidder affirmatively volunteers and shows in its bid that it could meet acceptance test, QPL, and other Government requirements, is contrary to basic procurement policy. Contracts Specifications-Conformability of Equipment, etc., Offered Noncompliance-Rejection of Bid Bidder for Navy QPL products, who offers products on which elastomer components exceed age limitations allowed under applicable shelf life requirements, which have not been shown to be unreasonable, is nonresponsive. Allegedly different Air Force shelf life requirements are not necessarily determinative of Navy's shelf life requirements. Bidders-Responsibility v. Bid Responsiveness-Bidder Ability To Perform Question whether surplus bidders under solicitations for aircraft and aircraft related parts-incorporating ANA Bulletin No. 438c (age controls for agesensitive elastomeric items)-can comply with Bulletin requirements for identification, marking, and storage of parts containing elastomeric components is one affecting responsibility. Contracts-Specifications-"New Material" Clause-Exception— New, Unused Surplus "New Material" clause in solicitation does not preclude bids offering new unused unreconditioned surplus material which is not overage or deteriorated. Contracts Specifications-Government Surplus Clause-Failure To Include-Effect Navy's contention that surplus material can never be considered unless it has been specifically invited by solicitation is overly restrictive interpretation of ASPR 1-1208 (c). Provision states that no special consideration or waiver of contract requirements can be extended to surplus material by virtue of fact that it once was owned by Government. Therefore, agency must determine whether surplus is acceptable for each procurement and include appropriate limitation in solicitation if it is determined that surplus is not acceptable. Failure to include "Government Surplus" clause is not sufficient notice to bidders that surplus is not acceptable. Contracts-Specifications "New Material" Clause-Reconditioning v. Refurbishing Upon examination of part, which revealed it could be easily and quickly disassembled and reassembled by nontechnical people, and in absence of any apparent critical tolerances for reassembly, General Accounting Office (GAO) has .doubts whether bidder's proposed replacement of overage elastomer components in new unused "critical" aircraft related part would constitute "reconditioning" in violation of "New Material" clause. However, GAO cannot disagree with ASO determination that elastomer replacement in different aircraft part constituted "reconditioning." Bids—Rejection-Nonresponsive-Bidder's Intent Not Indicated Bidder, who intends to "refurbish" new unused parts by replacing elastomer components, but who does not indicate this intent in its bid, may be rejected as nonresponsive where bid indicates that parts bidder is offering would exceed allowable shelf life unless elastomers are replaced. Contracts-Specifications-Qualified Products-Changes-Machinery, Products, etc. Although it is within discretion of QPL preparing activity to determine whether replacement of elastomer components in QPL aircraft and aircraft related parts has sufficiently changed the parts so as to consider them no longer qualified, there is some question whether they remain qualified products in view of disassembly and reassembly processes necessary to replace elastomers. Bids Invitation for Bids-Cancellation-Not Prejudicial to Other Bidders Although it would seem that contracting officer, who canceled IFB for supply of aircraft parts after determining that nonresponsive bid offering surplus material met Government's actual minimum needs for much lower cost and who negotiated sole-source contract with surplus bidder on "public exigency" basis, acted improperly in failing to solicit other bidders on same basis, other bidders were not prejudiced since it is unlikely they would have offered surplus and low surplus bid was responsive to IFB. Contracts Specifications-Qualified Products-Sole Source Negotiation Low bidder offering surplus parts under IFB for supply of QPL aircraft parts appears to be responsive bidder, inasmuch as surplus bids were not precluded in QPL procurements and bid offering new, unused, unreconditioned, nondeteriorative surplus parts was not in violation of "New Material" clause. Decision to cancel and negotiate sole-source award on virtually same basis to surplus bidder was proper. Contracts-Specifications-Military-Conformance Requirement Although agency's determination whether existing Military Specifications will meet its actual needs will not be questioned unless shown to have no reasonable basis, Military Specifications are mandatory, and procuring agency should, under ASPR 1-1108, ask QPL preparing activity for waiver of those requirements (including contract acceptance test requirements) included in Military Specification defining qualified product, which are not to be required of sole-source contractor receiving award after cancellation of QPL solicitation. Contracts-Specifications-Qualified Products-Requirement— Waiver Cancellation of IFB and negotiation of sole-source award to low bidder offering surplus material was not improper, even though contracting officer failed to ask QPL preparing activity for required waiver of those QPL requirements, which were not required of bidder, pursuant to ASPR 1-1108; however, recommendation is made that waiver be gotten prior to exercise of option under contract. Bidders Qualifications-Manufacturer or Dealer-Determination Protest that surplus dealer is not "regular dealer" within purview of WalshHealey Public Contracts Act, 41 U.S.C. 35-45, and related implementing regula tions, ASPR 12-601 and 12-607, and therefore is ineligible for award, is not for Bids-Competitive System-Restrictions on Competition-Prohibi- Navy "blanket" prohibition of all surplus material (whether new and unused In the matter of D. Moody & Company, Inc.; Astronautics Corpora- Table of Contents Page This decision concerns protests of three procurements of aircraft and aircraft related parts by the United States Navy Aviation Supply Office (ASO), Philadelphia, Pennsylvania. These protests generally involve the requirements in these procurements that the items furnished thereunder be approved for inclusion on a qualified products list (QPL) and ASO's policy concerning bids offering surplus parts under QPL procurements. Inasmuch as we have found that ASO is erroneously and overly restrictively interpreting the applicable regula- tions, we will take this opportunity to review ASO's policy in this We believe it appropriate to treat these protests together, even though different parties are involved under each procurement, since the issues involved substantially overlap. None of the interested parties has been prejudiced by this treatment, since they were given full opportunity to comment on the issues and our treatment of these protests is consistent. INVITATION FOR BIDS (IFB) N00383-74-B-0332 (Our Reference: B-180732) IFB N00383-74-B-0332 was issued by ASO on December 7, 1973, for the procurement of 42 aircraft hydropneumatic pressure accumulators, Federal Stock Number (FSN) 1R 1650-640-8486 YX, Government Designation MS 28700-4. Clause F-621 of the IFB required that the articles furnished were to be in accordance with Military Specification MIL-A-5498C (ASG) of February 25, 1957, and Military Standard MS-28700. Paragraph 3.1 of MIL-A-5498C (ASG) required: The accumulators furnished under this Specification shall be a product which In section L-1200 part II of the IFB, the "New Material" clause set out in Armed Services Procurement Regulation (ASPR) §7104.48 (1973 ed.) was incorporated by reference. See ASPR § 11208 (a) (1973 ed.). The "New Material" clause provides generally that the bidder furnish "*** new (not used or reconditioned, and not of such age or so deteriorated as to impair their usefulness or safety) ***" articles under the contract unless provision is made for other than new material in the IFB. There was no provision for the furnishing of other than new material under the contract. In response to the IFB, three timely bids (Parker-Hannifin Corporation's bid was late and determined to be not acceptable) were received by bid opening, January 8, 1074, as follows: York and Sprague both had products qualified for listing on QPL5498-18 under MS-28700-4. In its bid, Moody offered: *** 42 ea. 1650-640-8486YX Accumulator P/N [part number] 1008700-4 at $97.00 ea. new surplus obtained from AF Surplus approximately May '70. Upon perusing the QPL, it can be ascertained that The Bendix Corporation (Bendix) is listed as the manufacturer of P/N 1008700-4 under MS-28700-4. However, Moody is nowhere listed on the QPL. ASO rejected Moody's bid because Moody was not included on the applicable QPL, the surplus material offered by Moody was found to be in violation of the "New Material" clause and Moody was found to be not a responsible contractor. Subsequently, Moody protested to our Office against the rejection of its bid. IFB N00383-74-B-0515 (Our reference: B-181971) IFB N00383-74-B-0515 was issued by ASO on March 18, 1974, for the procurement of 555 oxygen mask hose connectors, type MC-3A, FSN 1R 1660-694-8121 LX, Government Designation MS-22016. Clause F-621 required that the articles furnished were to be in accordance with Military Specification MIL-C-19246C and QPL 19246-4 of January 25, 1973. The "New Material" clause was also incorporated by reference into the IFB and no provision was made for other than "new" material. In response to the IFB, four bids were received by bid opening, April 9, 1974, as follows: Fluid and Sierra both had products qualified for listing on QPL 19246-4. In its bid Moody offered: *** 555 ea. 1660-694-8121 LX Connector Sierra P/N 224-01 Type MC-3A at $4.24 ea. new surplus obtained from AF Surplus approximately June '69. Sierra P/N 224-01 is a part listed on the QPL. However, Moody is nowhere listed on the QPL. ASO rejected Moody's bid because Moody was not included on the applicable QPL and Moody's offer of surplus material was in violation of the "New Material" clause. ASO also noted that the elastomer components in the surplus material offered exceeded the 12-month age requirements of paragraph 3.3.1.1 of MIL-C-19246C. Subsequently, Moody protested to our Office against the rejection of its bid stating that it was intending to "refurbish" the oxygen mask hose connectors by replacing the elastomer components. However, ASO has stated that this "reconditioning" of the connectors still could not make Moody's bid acceptable. |