B-157700, FEB. 17, 1967

B-157700, FEB. 17, 1967

TO HALLEY, CORNELL AND WOLLENBERG:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 7, 1966, ON BEHALF OF YOUR CLIENT, ROBERT C. HOKE, A BIDDER ON DEPARTMENT OF THE AIR FORCE INVITATION FOR BIDS NO. 04-602-65-143.

TO REVIEW THE FACTS, THE DEPARTMENT OF THE AIR FORCE AWARDED A CONTRACT ON JUNE 29, 1965, TO THE SECOND LOW BIDDER ON THE ABOVE INVITATION, CALLING FOR CUSTODIAL SERVICES AT HAMILTON AIR FORCE BASE, CALIFORNIA. THE PROCUREMENT HAD BEEN SET ASIDE FOR SMALL BUSINESS, AND MR. HOKE (WHO HAD BEEN THE NEXT LOW BIDDER) PROTESTED THE AWARD, CONTENDING THAT THE CONTRACTOR HAD INCORRECTLY CERTIFIED ITSELF AS A SMALL BUSINESS CONCERN. THE SMALL BUSINESS ADMINISTRATION VERIFIED THAT SUCH WAS THE CASE, AND THE DEPARTMENT OF THE AIR FORCE ADVISED US THAT, IN VIEW OF THIS DEVELOPMENT, IT PROPOSED TO CANCEL THE CONTRACT BUT CONTINUE THE INCUMBENT CONTRACTOR ON A QUANTUM MERUIT BASIS PENDING A REPROCUREMENT OF THE REQUIREMENT. LETTER DATED NOVEMBER 15, 1965, WE ADVISED YOU THAT THE SECRETARY OF THE AIR FORCE COULD PROPERLY READVERTISE FOR BIDS FOR THE REMAINING PERIOD OF THE CANCELLED CONTRACT IN LIEU OF ACCEPTING MR. HOKE'S BID, WHICH THE AIR FORCE FELT TO BE UNREASONABLE AS TO PRICE. (THE CONTRACT PRICE HAD BEEN $73,776, AND MR. HOKE HAD BID $99,127.20.) BY LETTER DATED JANUARY 4, 1966, WE AGAIN EXPLAINED TO YOU THAT THIS OFFICE COULD NOT JUSTIFIABLY INTERFERE WITH THE ANNOUNCED INTENTION OF THE DEPARTMENT TO READVERTISE THE REQUIREMENT.

YOUR MOST RECENT LETTER OF DECEMBER 7, 1966, ALLEGES THAT THE AIR FORCE PROCRASTINATED AND DELAYED, FINALLY CANCELLING THIS CONTRACT IN JANUARY 1966, AND ULTIMATELY RELETTING THE CONTRACT AT A GREATER OR LARGER PRO RATA COST.

WE HAVE REVIEWED A REPORT ON THE MATTER FROM THE DEPARTMENT OF THE AIR FORCE. THE DEPARTMENT INFORMS US THAT INVITATION FOR BIDS NO. 04 602-66- 51 FOR REPROCUREMENT OF SERVICES WAS ISSUED DECEMBER 10, 1965, OPENING DATE ON DECEMBER 28, 1965, WITH SERVICES TO COMMENCE ON FEBRUARY 1, 1966, IN ORDER TO ALLOW ADEQUATE TIME BETWEEN BID OPENING AND AWARD TO PERMIT SBA TO PASS UPON THE COMPETENCY OF SMALL BUSINESS BIDDERS. THE EXISTING CONTRACT WAS TERMINATED EFFECTIVE MIDNIGHT DECEMBER 31, 1965, AND SERVICES FOR THE PERIOD BETWEEN TERMINATION AND THE NEW CONTRACT WERE PERFORMED UNDER A PURCHASE ORDER AT THE SAME MONTHLY RATE AS PROVIDED IN THE INITIAL CONTRACT. THE DECISION NOT TO CANCEL THE INITIAL CONTRACT IMMEDIATELY WAS MADE ON THE BASIS OF THE FOLLOWING REASONS: (1) IT WAS NOT CONSIDERED FEASIBLE TO CHANGE CONTRACTORS PENDING THE REPROCUREMENT; (2) THE EXISTING CONTRACTOR AGREED TO CONTINUE SERVICES WITHOUT CHANGE IN PRICE, AND (3) CONTINUATION OF THE SERVICES UNDER THE QUANTUM MERUIT PROCEDURE PROBABLY WOULD HAVE RESULTED IN HIGHER PRICES.

A CONTRACT FOR THE REMAINING CONTRACT PERIOD WAS AWARDED JANUARY 13, 1966, TO THE LOW BIDDER AT $41,343.35. THE AIR FORCE EXPLAINS THAT THE HIGHER PRO RATA COST RESULTED BECAUSE THE CONTRACT WAS FOR A FIVE MONTH PERIOD AND COVERED THREE ADDITIONAL BUILDINGS, WITH INCREASED FREQUENCIES FOR PERFORMING THE SERVICES.

WE FIND NO UNDUE DELAY BY THE AIR FORCE IN CONNECTION WITH THE REPROCUREMENT. AS YOU KNOW, OUR DECISION WAS ISSUED ON NOVEMBER 15, 1965, AND THE AIR FORCE ISSUED ITS NEW INVITATION ON DECEMBER 10, 1965, MAKING AWARD ON JANUARY 13, 1966. WE UNDERSTAND THAT MR. HOKE WAS FURNISHED WITH A COPY OF THE BID DOCUMENTS IN AMPLE TIME TO PREPARE A BID FOR THE REPROCUREMENT. REASONABLY ENOUGH, THE AIR FORCE WANTED TO AVOID A REPETITION OF THE INITIAL CONTRACT EXPERIENCE, AND THEREFORE SCHEDULED THE COMMENCEMENT OF SERVICES SO THAT THE SBA WOULD HAVE ADEQUATE TIME TO PASS ON ANY SIZE DETERMINATION.

WE HAVE REPORTED TO YOU AIR FORCE'S REASONS FOR RETAINING THE INCUMBENT CONTRACTOR DURING THE INTERIM PERIOD. IN OUR OPINION, THE AIR FORCE ACTED IN THE BEST INTERESTS OF THE GOVERNMENT. THE NEW CONTRACT DID INVOLVE HIGHER RATES, BUT, AS THE AIR FORCE EXPLAINS, THE SCOPE OF THE WORK WAS INCREASED AND THE CONTRACT PERIOD WAS SHORTER.

ACCORDINGLY, ON THE BASIS OF THE RECORD, WE FIND NO REASON TO OBJECT TO THE SUBJECT REPROCUREMENT ACTION.