B-151481, JUN. 28, 1963

B-151481, JUN. 28, 1963

TO THE SECRETARY OF THE AIR FORCE:

WE HAVE TWO LETTERS DATED MAY 31 AND JUNE 17, 1963, AND ENCLOSURES, FROM THE ASSISTANT SECRETARY OF THE AIR FORCE AND THE DEPUTY FOR PROCUREMENT MANAGEMENT, RESPECTIVELY, SUBMITTING REPORTS ON A PROTEST FILED WITH OUR OFFICE BY DAWSON, GRIFFEN, PICKENS AND RIDDELL, ATTORNEYS FOR RENTAR PACKAGING COMPANY, INC., (RENTAR), GLENDALE, NEW YORK, AGAINST THE PROPOSED AWARD OF A CONTRACT TO THE J. I, THOMPSON AND COMPANY (JITCO) ON A SOLE-SOURCE BASIS.

THE PROPOSED CONTRACT CALLS FOR PACKING SERVICES, STORAGE AND DISTRIBUTION OF AIR FORCE PUBLICATIONS AND FORMS FOR FISCAL YEAR 1964. SPECIFICALLY THE CONTRACT IS FOR THE OPERATION OF THE AIR FORCE PUBLICATIONS DISTRIBUTION CENTER. THE WORK PERFORMED BY THE CENTER IS OUTLINED IN A REPORT BY THE AIR FORCE, IN PERTINENT PART, AS FOLLOWS:

"1. THE AIR FORCE PUBLICATIONS DISTRIBUTION CENTER IS A FACILITY THAT DISTRIBUTES BOTH PUBLICATIONS AND FORMS TO USAF BASES AND ORGANIZATIONS IN THE UNITED STATES AND THOSE DEPLOYED OUTSIDE THE UNITED STATES. PROVIDES THE MEANS BY WHICH HQ USAF CAN DISSEMINATE NEW POLICY DIRECTIVES, AND REVISIONS THERETO, TO ALL AIR FORCE UNITS SIMULTANEOUSLY. IT SERVES AS A DEPOT FROM WHICH AIR FORCE UNITS CAN DRAW THEIR REQUIRED SUPPLY OF PUBLICATIONS AND FORMS, INCLUDING TABULATING CARDS AND TABULATING PAPER. IT IS THE SOLE SOURCE FOR THE ITEMS WHICH IT HANDLES. IT OPERATES UNDER THE CONCEPT THAT POLICY DIRECTIVES MUST BE DISTRIBUTED QUICKLY TO ALL AIR FORCE ACTIVITIES AND THAT ADDITIONAL COPIES OF THESE DIRECTIVES, AND OF BLANK FORMS, ARE FURNISHED SPEEDILY ON DEMAND IN ORDER THAT (1) THE OPERATIONAL EFFECTIVENESS OF THE AIR FORCE IS NOT IMPAIRED AND (2) THAT AIR FORCE UNITS ARE NOT UNNECESSARILY BURDENED BY BEING FORCED TO MAINTAIN LARGE LOCAL RESERVES OF THESE ITEMS. THE CENTER IS AN OPERATING ELEMENT OF THE AIR FORCE LOGISTICS COMMAND, UNITED STATES AIR FORCE, WRIGHT PATTERSON AIR FORCE BASE, OHIO, ALTHOUGH IT IS LOCATED IN THE WASHINGTON, D.C. AREA.

"2. THE SPECIFIC JOB OF THE DISTRIBUTION CENTER IS TO MAINTAIN A FILE OF REQUIREMENTS FOR RECURRING DISTRIBUTION OF PUBLICATIONS, TO STORE PUBLICATIONS AND FORMS AND TO RESPOND TO THE REQUESTS FROM 750 PUBLICATIONS DISTRIBUTION OFFICES, LOCATED WORLD-WIDE.

"3. THE SPACE REQUIRED BY THE CENTER IS ABOUT 175,000 SQUARE FEET WITH A WAREHOUSE CAPABLE OF STORING ABOUT 750,000 CUBIC FEET OF PRINTED MATTER. SINCE A PORTION OF THE MATERIAL IS EITHER CLASSIFIED AS SECRET OR CONFIDENTIAL, OR IS CONTROLLED BY SERIAL NUMBER BY COPY, BOTH A VAULT AND AN ADDITIONAL SECURED AREA ARE NEEDED. THE VAULT MUST BE LARGE ENOUGH TO STORE 15,000 CUBIC FEET OF SECRET OR CONFIDENTIAL MATERIAL. THE ADDITIONAL SECURED AREA MUST BE LARGE ENOUGH TO STORE 50,000 CUBIC FEET OF CONTROLLED MATERIAL.

"4. THE WORKLOAD FACTORS ARE AS FOLLOWS. THE CENTER MAKES ABOUT 200 INITIAL DISTRIBUTIONS OF NEW PUBLICATIONS EACH MONTH WITHIN 16 HOURS OF RECEIPT FROM THE PRINTER. IT FILLS ABOVE 80,000 REQUISITIONS PER MONTH, WITHIN 10 DAYS OF RECEIPT. SOME 20,000 CHANGES TO THE REQUIREMENTS FILE ARE RECEIVED EACH MONTH. THE CENTER RECEIVES 60 TO 100 TONS OF MATERIAL EACH DAY AND IT DISPATCHES 10 TO 25 TONS OF MAIL AND 50 TO 75 TONS OF FREIGHT, EACH WORK DAY. THERE ARE BETWEEN 7,500 AND 10,000 TONS IN STORAGE. THE CENTER MUST ACCOUNT FOR ALL MATERIAL HANDLED AND COLLECTED AND MAINTAIN A RECORD OF ISSUES IN ORDER TO PROVIDE ACCURATE CONSUMPTION FORECASTS TO HEADQUARTERS USAF, ON WHICH THEIR $12,000,000 BUDGET IS LARGELY BASED.'

BY TELEGRAM DATED MAY 7, 1963, THE ATTORNEYS FOR RENTAR PROTESTED AGAINST THE NEGOTIATION OF THE PROPOSED CONTRACT WITH JITCO ON THE BASIS THAT THE AIR FORCE SHOULD HAVE AFFORDED OTHER QUALIFIED CONTRACTORS AN OPPORTUNITY TO SUBMIT BIDS ON A COMPETITIVE BASIS. IN THIS CONNECTION, THE RECORD BEFORE US SHOWS THAT THERE ARE SEVERAL PACKAGING FIRMS WHO HAVE EXPRESSED A DESIRE TO COMPETE ON THE PRESENT CONTRACT AND HAVE SO NOTIFIED THE AIR FORCE. RENTAR'S ATTORNEYS ALLEGE THAT THE ORIGINAL CONTRACT WITH JITCO WAS NEGOTIATED ON A NONCOMPETITIVE BASIS IN 1959 AND THAT NUMEROUS PROMISES WERE MADE BY RESPONSIBLE AIR FORCE OFFICIALS IN THE SUCCEEDING YEARS THAT THE CONTRACT WOULD BE OPENED FOR COMPETITION IN THE SUCCEEDING YEARS, BUT EACH YEAR, DESPITE THESE PROMISES AND COMPLETE KNOWLEDGE ON THE PART OF AIR FORCE OFFICIALS, THE CONTRACT HAS BEEN RENEGOTIATED ON A SOLE SOURCE BASIS.

IN HIS LETTER OF MAY 31, 1963, THE ASSISTANT SECRETARY REPORTS THAT THE INITIAL PROCUREMENT OF THESE SERVICES WAS MADE BY COMPETITIVE NEGOTIATED PROCEDURES. IT IS STATED THAT REQUESTS FOR PROPOSALS WERE SENT TO 18 SOURCES AND THAT AFTER RECEIPT OF SEVEN RESPONSES CONTRACT NO. AF 33/600/- 38247 WAS AWARDED TO JITCO AS THE LOWEST RESPONSIVE AND RESPONSIBLE OFFEROR FOR THE PERIOD OCTOBER 1, 1958 THROUGH JUNE 30, 1959.

THE ASSISTANT SECRETARY REPORTS THAT, PURSUANT TO APPROPRIATE DETERMINATIONS AND FINDINGS, FOLLOW-ON PROCUREMENTS FOR EACH SUCCESSIVE FISCAL YEAR HAVE BEEN ACCOMPLISHED BY SUPPLEMENTAL AGREEMENTS TO THE INITIAL BASIC CONTRACT AND THAT THE CURRENT SUPPLEMENTAL AGREEMENT NO. 11 FOR FISCAL YEAR 1963 IS A COST-PLUS-INCENTIVE-FEE TYPE ON THE BASIS OF A TARGET COST OF $2,060,626 AND A TARGET FEE OF $82,455--- AN INCENTIVE FEE CEILING OF SIX PERCENT AND A FLOOR OF THREE PERCENT OF THE TARGET COST. IT IS STATED THAT THE TARGET COSTS AND FEES WERE NEGOTIATED ON THE BASIS OF AUDIT INFORMATION AND A LIAISON OFFICER'S KNOWLEDGE OF COSTS WHICH ARE PREDOMINANTLY DIRECT LABOR COSTS.

THE ASSISTANT SECRETARY STATES THAT THESE FOLLOW-ON SUPPLEMENTAL AGREEMENTS WITH JITCO (WHICH WERE NEGOTIATED PURSUANT TO THE AUTHORITY CONTAINED IN 10 U.S.C. 2304 (A) (10) ( WERE CONSIDERED NECESSARY BECAUSE OF THE INABILITY OF THE GOVERNMENT TO OBTAIN A SATISFACTORY GOVERNMENT- OWNED OR LEASED FACILITY FOR THE PUBLICATIONS DISTRIBUTION CENTER IN THE WASHINGTON, D.C., AREA IN ORDER TO PRECLUDE THE CHANGING OF OPERATING LOCATION EACH YEAR. IT IS POINTED OUT THAT IF THE AIR FORCE WERE TO CHANGE CONTRACTORS ANNUALLY OR BIENNIALLY, THE COST OF MOVING APPROXIMATELY 7,500 TONS OF INVENTORY MATERIAL AND EQUIPMENT WOULD, DIRECTLY OR INDIRECTLY, INEVITABLY BE BORNE BY THE GOVERNMENT SINCE EITHER THE SUCCESSFUL BIDDER WOULD BE OBLIGED TO INCLUDE SUCH A COST IN ITS BID PRICE OR, IF THE COSTS WERE TO BE BORNE DIRECTLY BY THE GOVERNMENT, IT WOULD HAVE TO BE CONSIDERED IN THE EVALUATION OF BIDS. IN THIS CONNECTION, THE DEPUTY FOR PROCUREMENT MANAGEMENT, IN HIS LETTER OF JUNE 17, 1963, STATES THAT ON THE BASIS OF PRESENT INFORMATION AND ESTIMATES, THE RELOCATION OF THE CENTER INTO ANOTHER FACILITY WOULD RESULT IN ADDITIONAL COSTS TO THE GOVERNMENT, OR COMPETING CONTRACTORS, IN AN AMOUNT WHICH MAY RUN AS HIGH AS ONE MILLION DOLLARS. THE BASIS FOR THIS FIGURE, AND THE REASONS WHY IT WAS DECIDED NOT TO COMPETE THE 1964 FISCAL YEAR CONTRACT, ARE EXPLAINED IN THE ASSISTANT SECRETARY'S LETTER AS FOLLOWS:

"THE COGNIZANT PROCUREMENT ACTIVITY, MIDDLETOWN AIR MATERIAL AREA (MAAMA) HAS ESTIMATED THAT IT WOULD COST APPROXIMATELY $1 MILLION IT IT WERE REQUIRED TO MAKE MORE THAN ONE MOVE OF THE EXISTING MATERIAL AND EQUIPMENT. DURING A RELOCATION, TWO DISTRIBUTION FACILITIES MUST BE OPERATED, ONE PHASING OUT, THE OTHER PHASING IN. THE LENGTH OF TIME REQUIRED TO MAKE THE MOVE IS PRIMARILY DEPENDENT UPON THE CAPABILITY TO TRANSFER MATERIAL AND EQUIPMENT, AND SECONDARILY ON THE LEAD TIME REQUIRED FOR THE NEW FACILITY TO BECOME OPERATIONAL. THE COST OF MAKING A MOVE IS THE SUM TOTAL OF THE OPERATING COST OF TWO FACILITIES FOR THE MOVING PERIOD PLUS THE DRAYAGE CHARGES. CONSIDERING THE ASPECTS OF OCCUPYING A BUILDING, PLANNING ITS INTERNAL LAYOUT, ACQUIRING THE REQUIRED FIXTURES AND EQUIPMENT, AND HIRING AND TRAINING PERSONNEL, 120 CALENDAR DAYS WOULD BE A REASONABLE TIME FOR A NEW FACILITY TO BECOME OPERATIONAL.

"AS INDICATED ABOVE, THE DELAY IN PROCURING THESE SERVICES COMPETITIVELY UNTIL NOW WAS DUE TO THE ATTEMPT TO OBTAIN A SUITABLE GOVERNMENT-OWNED FACILITY WHICH WOULD ELIMINATE AS A CONSIDERATION IN MAKING AN AWARD, THE COST OF DELAYS INVOLVED IN MOVING THE LARGE INVENTORY FROM ONE LOCATION TO ANOTHER ON A RECURRING BASIS. HOWEVER, BECAUSE OF THE KEEN INTEREST DISPLAYED BY ONE POTENTIAL SOURCE TO BE AFFORDED AN OPPORTUNITY TO COMPETE FOR THESE SERVICES EVEN UNDER THE CIRCUMSTANCES DESCRIBED ABOVE, I HAVE DETERMINED THAT NOTWITHSTANDING THE PROBLEM IT PRESENTS, STEPS WILL BE TAKEN TO COMPETE THIS PROCUREMENT FOR THE FISCAL YEAR 1965.

"THE DECISION FOR NOT COMPETING IT FOR FISCAL YEAR 1964 IS BASED UPON THE FACT THAT INSUFFICIENT TIME REMAINS FOR EFFECTING AN ADEQUATE PROCUREMENT IN FAIRNESS TO ALL COMPETING SOURCES, BY PROVIDING A FULL YEAR'S OPERATION UNDER THE RESULTING CONTRACT. WHEN I WAS CALLED UPON TO MAKE A DECISION IN THIS MATTER AT THE BEGINNING OF THE MONTH, I ESTIMATED THAT THE TIME REQUIRED TO PREPARE A PROPER COMPETITIVE SOLICITATION WHICH MUST INCLUDE A CAREFULLY DRAFTED PERFORMANCE TYPE WORK STATEMENT AND EVALUATION STANDARDS AND PROCEDURE WOULD INVOLVE NO LESS THAN NINETY DAYS AT BEST. BECAUSE A SERVICE CONTRACT OF THIS TYPE IS LIMITED TO A FISCAL YEAR BID BY REASON OF FUNDING REQUIREMENTS, ANY ATTEMPT AT THAT TIME TO CONTRACT FOR THE FISCAL YEAR 1964 WOULD NECESSARILY HAVE BEEN LIMITED TO A PERIOD SUBSTANTIALLY LESS THAN ONE YEAR. SUCH A REDUCED CONTRACT TERM WOULD NOT PROVIDE FIRMS A FAIR AND REASONABLE BASIS FOR BIDDING ON A FIXED-PRICE CONTRACT. MUST RECOGNIZE THAT ANY NEW SOURCES SHOULD BE AFFORDED A REASONABLE OPPORTUNITY TO AMORTIZE DURING A CONTRACT BID, ITS MOVING, START-UP, AND PHASE-IN COSTS. THE COST THAT ONE SOURCE MAY HAVE INDICATED THAT IT IS WILLING TO SPECULATE ON LESS THAN THE MAXIMUM AVAILABLE TIME FOR AMORTIZING SUCH EXPENSE WOULD BE NO ANSWER TO OTHER POTENTIALLY INTERESTED FIRMS WHO COULD EASILY DEMONSTRATE THAT A BID OF LESS THAN A YEAR WOULD BE PREJUDICIAL TO THEM. THE PRINCIPLE OF FULL AND FREE COMPETITION AND OPPORTUNITY TO BID MUST BE AFFORDED TO ALL.'

THE DEPUTY FOR PROCUREMENT MANAGEMENT STATES THAT THE AIR FORCE HAS MADE EXTENSIVE EFFORTS DURING THE LAST TWO YEARS TO ACQUIRE A GOVERNMENT-OWNED FACILITY IN A NEAR-BY GEOGRAPHICAL AREA THAT WOULD NOT ENTAIL TOO GREAT A MOVING COST, BUT THESE EFFORTS HAVE FAILED. HIS REPORT CONTINUES:

"* * * WE ARE STILL CONTINUING IN OUR EFFORTS. HOWEVER, IN VIEW OF THE REPEATED AND INSISTENT CLAIMS OF SEVERAL SOURCES IN INDUSTRY THAT THEY ARE CAPABLE AND WILLING OF COMPETING FOR THIS CONTRACT UNDER THE EXISTING CONDITIONS, WE HAVE DECIDED TO COMPETE FOR THESE SERVICES AT THE EARLIEST PRACTICABLE DATE.

"WE HAVE PREPARED A PROCUREMENT PLAN TO ACCOMPLISH THIS OBJECTIVE, A COPY OF WHICH IS ATTACHED. UNDER THIS PLAN, WE INTEND TO ISSUE REQUESTS FOR PROPOSALS ON 1 JULY 1963 AND HAVE ESTABLISHED A TIME TABLE FOR ALL ACTIONS NECESSARY TO AWARD A CONTRACT, WHICH REQUIRES THAT ALL SUCH ACTIONS BE TAKEN ON AN EXPEDITED BASIS. YOU WILL NOTE FROM THIS PLAN THAT, IN ORDER TO ALLOW PROSPECTIVE OFFERORS AN OPPORTUNITY TO PREPARE REALISTIC OFFERS, TO ALLOW THE GOVERNMENT TIME TO CONDUCT ALL NECESSARY ACTIONS TO EVALUATE THE OFFERS, TO NEGOTIATE FURTHER TO DETERMINE WHICH OFFER IS IN THE BEST INTEREST OF THE GOVERNMENT AND OBTAIN THE NECESSARY APPROVAL OF THE PROPOSED CONTRACT, THE AWARD CANNOT BE MADE UNTIL 17 FEBRUARY 1964. OFFERORS WILL BE REQUESTED TO STATE IN THEIR TECHNICAL PROPOSALS THE PERIOD OF TIME REQUIRED TO PHASE-IN THE NEW CONTRACT AND THE COST OF SUCH PHASING-IN, WITH THE REQUIREMENT THAT THE SUCCESSFUL CONTRACTOR SHALL HAVE COMPLETELY PHASED-IN BY 1 JULY 1964 AND SHALL COMMENCE OPERATIONS ON THAT DATE. WE DO NOT BELIEVE IT FEASIBLE FOR A NEW CONTRACT TO COMMENCE OPERATIONS PRIOR TO THAT DATE.'

THE PROCUREMENT PLAN REFERRED TO CONTEMPLATES UTILIZATION OF A ONE YEAR TERM (WITH TWO ONE YEAR OPTIONS) CONTRACT OF A FIXED PRICE TYPE AND CONTAINS THE FOLLOWING PROCUREMENT STEPS AND TARGET DATES:

TABLE

"REQUEST FOR TECHNICAL PROPOSAL - MAILED - 1 JULY 1963

TECHNICAL PROPOSALS RECEIVED - MAP - 1 AUGUST 1963

TECHNICAL EVALUATION - COMPLETED - 16 AUGUST 1963

REQUEST FOR COST PROPOSAL - MAILED - 23 AUGUST 1963

COST PROPOSALS RECEIVED - MAP - 16 SEPTEMBER 1963

PRICE ANALYSIS-FIELD AUDIT RETURNED - MAP- 16 OCTOBER 1963

NEGOTIATION (IF REQUIRED) - 21 OCTOBER 1963

FACILITY CAPABILITY REPORT - 28 OCTOBER 1963

PREPARATION OF CONTRACT - 31 OCTOBER 1963

PRINTING OF CONTRACT - 22 NOVEMBER 1963

JAG REVIEW (MAAMA) - 17 DECEMBER 1963

PRELIMINARY REVIEW - 17 DECEMBER 1963

PROCUREMENT COMMITTEE (MAAMA) - 17 DECEMBER 1963 CONTRACTOR SIGNATURE - 13 JANUARY 1964

EXECUTION GOVERNMENT - 15 JANUARY 1964

FINAL REVIEW (MAAMA), (AFLC, MCPC) - 14 FEBRUARY 1964

DISTRIBUTION - 17 FEBRUARY 1964"

IN CONTRAST TO THE PROCUREMENT TIMETABLE OUTLINED ABOVE, RENTAR CONTENDS THAT THE PROCUREMENT INVOLVED HERE (FOR FISCAL YEAR 1964) IS NOT COMPLEX AND CAN BE ACCOMPLISHED WITHIN A RELATIVELY SHORT TIME (I.E. WITHIN 30 TO 45 DAYS). IN SUPPORT OF THESE CONTENTIONS, RENTAR, BY LETTER OF JUNE 14, 1963, STATES THAT IT "COULD SET UP AND BEGIN OPERATIONS APPROXIMATELY 30 DAYS AFTER THE AWARD * * *.' AND THAT IT WOULD TAKE ITS ENGINEERING DEPARTMENT "APPROXIMATELY TWO WEEKS AFTER THE RECEIPT OF INVITATION TO BID TO SUBMIT OUR FIGURES TO THE AIR FORCE REGARDLESS OF THE TYPE OF BID OR THE BASIS THAT THE AIR FORCE WANTED US TO BID ON--- RE: FIXED PRICE, NEGOTIATED COST PLUS FIXED FEE.' THE EXPORT PACKING AND CRATING COMPANY, INC., BROOKLYN, NEW YORK, BY TELEGRAM DATED JUNE 17, 1963, ALSO STATES THAT IT COULD BEGIN PERFORMANCE WITHIN 30 DAYS OF AWARD, WITH A TWO WEEK BIDDING PERIOD. TOSE, INC., BRIDGEPORT, PENNSYLVANIA, IN A LETTER OF JUNE 20, 1963, STATES THAT "WE CAN PREPARE A BID ON THIS SERVICE IN APPROXIMATELY TWO WEEKS FROM DATE OF INQUIRY AND ASSURE OPERATIONS IN APPROXIMATELY FOUR TO SIX WEEKS AFTER AWARD IS MADE.'

MOREOVER, RENTAR'S ATTORNEYS CHALLENGE THE AIR FORCE ESTIMATE THAT ONE MILLION DOLLARS IN ADDITIONAL COSTS WOULD BE INCURRED WERE THE CONTRACT TO BE AWARDED TO A FIRM OTHER THAN JITCO. THEY CONTEND THAT, AS TO THE COSTS ATTRIBUTABLE OF MOVING OF MATERIAL AND EQUIPMENT, NO MORE THAN $30,000 WOULD BE REQUIRED ON THE BASIS OF $4.00 PER TON FOR 7,500 TONS.

IN VIEW OF THE RECORD BEFORE US, A FEW PRELIMINARY OBSERVATIONS APPEAR APPROPRIATE. OUR OFFICE HAS CONSISTENTLY TAKEN THE POSITION IN REGARD TO PURCHASING BY THE GOVERNMENT THAT THE INTERESTS OF THE UNITED STATES ARE BEST SERVED WHEN MAXIMUM COMPETITION IS OBTAINED WHETHER THAT PURCHASING IS ACCOMPLISHED BY FORMAL ADVERTISING OR BY NEGOTIATION. CONSISTENT WITH THIS POSITION, WE BELIEVE THAT SOLE SOURCE PROCUREMENT SHOULD BE AVOIDED WHENEVER POSSIBLE SINCE, AS THIS CASE ILLUSTRATES, RESORT TO SUCH PRACTICE LEADS TO CONFUSION, SUSPICION, AND CHARGES OF FAVORITISM ON THE PART OF THE GOVERNMENT'S PROCUREMENT OFFICIALS. WHILE WE NEED NOT, AND DO NOT, DETERMINE THAT THE PREVIOUS CONTRACTS WERE IMPROPERLY AWARDED ON A SOLE SOURCE BASIS, WE THINK THAT THE RECORD CREATES CONSIDERABLE DOUBT AS TO THE NECESSITY FOR THE SOLE SOURCE PRACTICE UTILIZED. IN THIS CONNECTION, RENTAR HAS UNEQUIVOCALLY STATED THAT RESPONSIBLE AIR FORCE OFFICIALS HAD, ON SEVERAL OCCASIONS, ASSURED THEM THAT THE PROCUREMENT WOULD BE OPENED TO COMPETITION IN SUCCEEDING YEARS. THE ACCURACY OF THESE STATEMENTS HAS NOT BEEN CHALLENGED BY THE AIR FORCE. IF THESE ASSURANCES WERE GIVEN AFTER CAREFUL CONSIDERATION OF THEN EXISTING CONDITIONS, AND WE BELIEVE THEY WERE, IT WOULD APPEAR THAT COMPETITION IN THESE PRIOR PROCUREMENTS WAS POSSIBLE. THIS OBSERVATION IS FURTHER SUPPORTED BY THE PRESENT DECISION ON THE PART OF THE AIR FORCE TO COMPETE THE PROCUREMENT FOR FISCAL YEAR 1965. HOWEVER, THE QUESTION BEFORE US IS NOT WHETHER IT IS PROPER TO COMPETE THE 1965 PROCUREMENT, OR WHETHER THE PRIOR FISCAL YEAR PROCUREMENTS SHOULD HAVE BEEN COMPETED. THE QUESTION TO WHICH RENTAR'S PROTEST IS DIRECTED IS WHETHER THE 1964 FISCAL YEAR PROCUREMENT SHOULD BE OPENED UP TO COMPETITION.

ON THIS LATTER QUESTION THE AIR FORCE HAS DECIDED NOT TO COMPETE THE PROCUREMENT FOR FISCAL YEAR 1964 DUE TO THE FACT THAT INSUFFICIENT TIME REMAINS FOR EFFECTING AN ADEQUATE PROCUREMENT IN FAIRNESS TO ALL COMPETING SOURCES. IN THAT CONNECTION, THE ASSISTANT SECRETARY'S LETTER STATES THAT THE TIME REQUIRED TO PREPARE A PROPER COMPETITIVE SOLICITATION, WHICH MUST INCLUDE A CAREFULLY DRAFTED PERFORMANCE TYPE WORK STATEMENT AND EVALUATION STANDARDS, WOULD INVOLVE NO LESS THAN 90 DAYS. THE PROCUREMENT PLAN SUBMITTED BY THE DEPUTY FOR PROCUREMENT MANAGEMENT OUTLINES A PROCUREMENT TIMETABLE REQUIRING APPROXIMATELY SEVEN MONTHS AND TWO WEEKS. ON THE OTHER HAND, INTERESTED SOURCES HAVE EXPRESSED THE OPINION THAT OPERATIONS UNDER THE CONTRACT COULD COMMENCE WITHIN 45 DAYS. ALTHOUGH THERE IS A CONSIDERABLE DIFFERENCE OF OPINION AS TO THE AMOUNT OF TIME REQUIRED TO ACCOMPLISH THE PROCUREMENT IN QUESTION, WE RECOGNIZE THAT A DETERMINATION ON THIS MATTER IS THE PRIMARY RESPONSIBILITY OF THE PROCUREMENT AGENCY. DETERMINATION MADE BY AN AGENCY WITH REGARD TO THIS QUESTION SHOULD NOT BE LIGHTLY DISTURBED SINCE, OBVIOUSLY, THE AGENCY BEST KNOWS ITS OWN NEEDS AND THE AMOUNT OF TIME ADMINISTRATIVELY REQUIRED TO ACCOMPLISH A SOUND AND ORDERLY PROCUREMENT. ALTHOUGH THERE MAY BE JUSTIFICATION FOR THE SERIOUS CRITICISMS DIRECTED AT THE AIR FORCE PROCUREMENT OFFICIALS BY RENTAR FOR FAILURE TO INITIATE THE 1964 FISCAL YEAR PROCUREMENT AT AN EARLIER DATE, WE CANNOT, ON THAT ACCOUNT, CONCLUDE THAT THE PRESENT TIMETABLE PROPOSED BY THE AIR FORCE IS UNREASONABLE OR THAT IT CAN BE SHORTENED SO AS TO ALLOW COMPETITION FOR A CONTRACT TERM OF LESS THAN ONE YEAR. THEREFORE, WE WILL NOT OBJECT TO THE EXERCISE OF THE ONE-YEAR OPTION PROVIDED FOR IN THE JITCO CONTRACT.