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Government Contracts Monitor

If an "Exact Product" Is Required, Make Sure You Clearly Offer One

January 10, 2018

By: Lindsay Simmons

Faithful readers of the Government Contracts Monitor have been repeatedly reminded of an offeror’s responsibility to submit a well-written quotation clearly demonstrating its ability to comply with the solicitation’s requirements. (Here, for example.) Unfortunately, protesters continue to lose protests because of the failure to submit adequate offers. The recent Government Accountability Office decision in Twin Services, Inc., B-415418 (January 9, 2018) presents another such tale of woe.

The protest involved a challenge by Twin Services, Inc. (TSI) to the issuance of a purchase order to Aero Engineering Manufacturing (Aero) under request for quotations (RFQ) No. SPE4A7-17-T-F607, issued by the Defense Logistics Agency (DLA), for the supply of aircraft window curtains. The RFQ incorporated the terms and conditions of the DLA Master Solicitation for Automated Simplified Acquisitions Revision (Master Solicitation). The Master Solicitation in turn incorporated Procurement Note L04, Offers for Part Numbered Items. Pursuant to the Master Solicitation, the Procurement Note applies to solicitations, like the RFQ here, that identify an item only by the name of the approved source’s commercial and government entity (CAGE) code, a part number, and a brief description.

The Procurement Note provides, in pertinent part:

(b) Exact product means a product described by the name of an approved source and its corresponding part number cited in the item description; and manufactured by, or under the direction of, that approved source. An offeror of an exact product must meet one of the descriptions below.

* * * * *

(3) A manufacturer who produces the offered item under the direction of an approved source; and has authorization from that approved source to manufacture the item, identify it as that approved source’s name and part number, and sell the item directly to the Government.

(4) A dealer/distributor offering the product of a manufacturer that meets the description in subparagraph (3) above.

In this case, the solicitation identified Aero and Lockheed Martin as the two sources approved to provide the product, and listed their respective product numbers and CAGE codes.

In its quotation, TSI indicated that it is a dealer offering an exact product under Lockheed Martin’s CAGE code (98897), and identified the CAGE code for the actual manufacturer as Frazier Aviation (Frazier), CAGE code 23162. In response, DLA included a notice in the quotation summary on its Internet Bid Board System (DIBBS) stating, “You have indicated that you/your supplier intend to manufacture this item, but are not CAGE 98897 [Lockheed Martin].” According to DLA, in order to confirm the technical acceptability of its offer, TSI “must, if requested, furnish evidence sufficient to demonstrate that CAGE 98897: (A) is overseeing and involved in the production of the item; and (B) has authorized you/your supplier to produce the item, identify it by CAGE 98897 [and item number] and sell the item directly to the Government.” The notice also clearly indicated that any product not meeting the criteria of an “exact product” would be considered an alternate product even though it may be manufactured in accordance with the drawings and/or specifications of CAGE 98897, and indicated that failure to provide adequate evidence upon request may result in the rejection of TSI’s quotation as technically unacceptable.

That is precisely what happened here. During its evaluation of quotations submitted in response to the RFQ, the agency determined that TSI’s quotation did not offer an exact product from an approved manufacturer. TSI timely protested to the GAO, contending that it had offered a product that met the solicitation’s requirement to offer an “exact product” from an approved source and challenging DLA’s evaluation of its quotation. More particularly, TSI argued that it met the requirement of section (b)(4) of the Procurement Note because TSI was a dealer offering the product of a manufacturer (Frazier) that was authorized by Lockheed Martin (CAGE code 98897), an approved source, to manufacture the item and to sell it directly to the government and, therefore, met the requirements of section (b)(3).

DLA responded that TSI’s quotation failed to show that Frazier was authorized by Lockheed Martin to identify the item by Lockheed Martin’s name and part number. According to the agency, the identification of Frazier’s CAGE code—instead of Lockheed Martin’s—in TSI’s quotation as the actual manufacturer of the product led the agency to conclude that TSI’s quotation was offering a product from Frazier, a manufacturer that was not an approved source identified in the RFQ. DLA went on to explain the importance of a manufacturer’s ability to identify a part by the approved source’s name, pursuant to section (b)(3) of the Procurement Note: it essentially ensures that the agency can meet its mission to provide spare part support for US military aircraft by supplying parts from either a manufacturer that has been approved by the military to manufacture the part, or from a firm that has been authorized by the approved source to represent the product as the approved source’s product.

The GAO made short work of TSI’s arguments and found DLA’s evaluation unobjectionable. Noting that the Procurement Note required offerors to propose an exact product from an approved source by meeting either section (b)(3) or (b)(4) and that Lockheed Martin was one of the approved sources, the GAO pointed out that TSI’s quotation identified Frazier, not Lockheed Martin, as the manufacturer of the product, and failed to include information showing that Frazier was authorized to identify the part by Lockheed Martin’s name and part number. It also found no merit to the TSI’s argument that the government misunderstood or misapplied the Procurement Note by allegedly failing to request evidence from TSI or Lockheed Martin to show that TSI and Frazier could meet the requirements of the Procurement Note, or the criteria outlined in the DIBBS quotation summary.

At the end of the day, the GAO’s answer to TSI was to remind it of the general rule stated at the outset of this article: it was TSI’s responsibility to submit a well-written quotation clearly demonstrating its ability to comply with the solicitation’s requirements. Since failure to prepare and submit such an offer will not often be curable at the protest stage, offerors must work to ensure that their submissions clearly answer all the questions raised in the solicitation.

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