B-174725, NOV 7, 1972, 52 COMP GEN 253

B-174725, NOV 7, 1972, 52 COMP GEN 253

CONTRACTS - NEGOTIATION - SOLE SOURCE BASIS - REPLACEMENT CONTRACT FOR DIVERTED ITEMS - MILITARY ASSISTANCE TO FOREIGN COUNTRIES THE DETERMINATION THAT IT WAS PROPER TO NEGOTIATE A SOLE SOURCE REPLACEMENT CONTRACT WITH THE CONTRACTOR WHO HAD DIVERTED AIRCRAFT PRODUCTION TO SATISFY THE REQUIREMENTS OF A FOREIGN MILITARY SALE PURSUANT TO THE MODIFICATION OF AN ARMY CONTRACT THAT HAD BEEN ACCEPTED BY THE CONTRACTOR WITH THE UNDERSTANDING IT WOULD RECEIVE A SEPARATE NEGOTIATED REPLACEMENT CONTRACT AT A PRICE THAT WOULD CONSTITUTE THE FOREIGN SALE PRICE WAS NOT AN ERRONEOUS CONCLUSION OF LAW FOR HAD THE CHANGE ORDER PROCEDURE BEEN USED, THE CONTRACTOR'S REFUSAL TO ACCEPT AN EQUITABLE PRICE ADJUSTMENT WOULD NOT HAVE CONSTITUTED A QUESTION OF FACT UNDER THE DISPUTES CLAUSE SINCE THE DIVERSION WAS A CARDINAL CHANGE BEYOND THE SCOPE OF THE CONTRACT PLACING THE CONTRACTOR IN A POSITION TO INSTITUTE AN ACTION FOR BREACH OF CONTRACT DAMAGES UNDER THE "CARDINAL CHANGE" DOCTRINE.

TO ALVORD AND ALVORD, NOVEMBER 7, 1972:

REFERENCE IS MADE TO YOUR LETTERS OF JULY 7 AND 17, AND AUGUST 8, 1972, ON BEHALF OF HUGHES TOOL COMPANY - AIRCRAFT DIVISION (HUGHES), REQUESTING RECONSIDERATION OF OUR DECISION B-174725, JUNE 16, 1972.

THE PRIMARY ISSUE PRESENTED BY THE PROTEST WAS:

*** WHETHER BELL WAS INDUCED TO DIVERT AIRCRAFT FROM ITS ARMY PRODUCTION, TO SATISFY THE REQUIREMENTS OF A FOREIGN MILITARY SALE, IN THE BELIEF THAT THE REPLACEMENT OF THE DIVERTED AIRCRAFT AND THE PRICE TO THE FOREIGN CUSTOMER WOULD BE CONCLUDED THROUGH THE SUBSEQUENT NEGOTIATION OF A CONTRACT WITH BELL AS THE SOLE SOURCE.

WE CONCLUDED THAT:

*** BELL AGREED TO (THE DIVERSION) MODIFICATION P00123 TO CONTRACT - 1699 AND THEREBY MATERIALLY ALTERED ITS POSITION UNDER THAT COTNTRACT, ONLY BECAUSE OF ITS UNDERSTANDING THAT IT WOULD RECEIVE A SEPARATE NEGOTIATED CONTRACT FOR REPLACEMENT AIRCRAFT, THE PRICE OF WHICH WOULD CONSTITUTE THE CANADIAN SALE PRICE.***

UPON CONSIDERATION OF ALL THE FACTS AND CIRCUMSTANCES OF THIS CASE, INCLUDING THE FACT THAT BELL MATERIALLY CHANGED ITS POSITION UNDER CONTRACT - 1699 IN THE BELIEF THAT A SEPARATE CONTRACT WOULD BE NEGOTIATED WITH IT AS A SOLE SOURCE, WE MUST AGREE WITH BELL'S CONTENTION THAT IT IS LEGALLY ENTITLED TO HAVE ITS PRICE FOR THE HELICOPTERS DELIVERED TO CANADA DETERMINED ON THE BASIS OF THE PRICE (NOT IN EXCESS OF $88,750)(THE DEPARTMENT OF THE ARMY) IS ABLE TO NEGOTIATE FOR 74 OH-58A REPLACEMENT HELICOPTERS.

IN REGARD TO THIS ISSUE, THE PRINCIPAL CONTENTION OF YOUR REQUEST FOR RECONSIDERATION IS THAT THE ABOVE-QUOTED CONCLUSION IS ERRONEOUS AS A MATTER OF LAW. IN THIS CONNECTION, YOU POINT OUT THAT CONTRACT - 1699 CONTAINS THE STANDARD CHANGES CLAUSE, PRESCRIBED BY ARMED SERVICES PROCUREMENT REGULATION (ASPR) 7-103.2, WHICH PROVIDES:

CHANGES (1958 JAN)

THE CONTRACTING OFFICER MAY AT ANY TIME, BY A WRITTEN ORDER, AND WITHOUT NOTICE TO THE SURETIES, MAKE CHANGES, WITHIN THE GENERAL SCOPE OF THIS CONTRACT, IN ANY ONE OR MORE OF THE FOLLOWING: (1) DRAWINGS, DESIGNS, OR SPECIFICATIONS, WHERE THE SUPPLIES TO BE FURNISHED ARE TO BE SPECIALLY MANUFACTURED FOR THE GOVERNMENT IN ACCORDANCE THEREWITH; (II) METHOD OF SHIPMENT OR PACKING; AND (III) PLACE OF DELIVERY. IF ANY SUCH CHANGE CAUSES AN INCREASE OR DECREASE IN THE COST OF, OR THE TIME REQUIRED FOR THE PERFORMANCE OF ANY PART OF THE WORK UNDER THIS CONTRACT, WHETHER CHANGED OR NOT CHANGED BY ANY SUCH ORDER, AN EQUITABLE ADJUSTMENT SHALL BE MADE IN THE CONTRACT PRICE OR DELIVERY SCHEDULE, OR BOTH, AND THE CONTRACT SHALL BE MODIFIED IN WRITING ACCORDINGLY. ANY CLAIM BY THE CONTRACTOR FOR ADJUSTMENT UNDER THIS CLAUSE MUST BE ASSERTED WITHIN 30 DAYS FROM THE DATE OF RECEIPT BY THE CONTRACTOR OF THE NOTIFICATION OF CHANGE, PROVIDED, HOWEVER, THAT THE CONTRACTING OFFICER, IF HE DECIDES THAT THE FACTS JUSTIFY SUCH ACTION, MAY RECEIVE AND ACT UPON ANY SUCH CLAIM ASSERTED AT ANY TIME PRIOR TO FINAL PAYMENT UNDER THIS CONTRACT. WHERE THE COST OF PROPERTY MADE OBSOLETE OR EXCESS AS RESULT OF A CHANGE IS INCLUDED IN THE CONTRACTOR'S CLAIM FOR ADJUSTMENT, THE CONTRACTING OFFICER SHALL HAVE THE RIGHT TO PRESCRIBE THE MANNER OF DISPOSITION OF SUCH PROPERTY. FAILURE TO AGREE TO ANY ADJUSTMENT SHALL BE A DISPUTE CONCERNING A QUESTION OF FACT WITHIN THE MEANING OF THE CLAUSE OF THIS CONTRACT ENTITLED "DISPUTES." HOWEVER, NOTHING IN THIS CLAUSE SHALL EXCUSE THE CONTRACTOR FROM PROCEEDING WITH THE CONTRACT AS CHANGED.

YOU MAINTAIN THAT THE CHANGES IN SPECIFICATIONS AND DELIVERY ACCOMPLISHED BY MODIFICATION P00123 TO CONTRACT - 1699 COULD HAVE BEEN REQUIRED BY BELL BY THE ISSUANCE OF A UNILATERAL CHANGE ORDER UNDER THIS CLAUSE. THEREFORE, YOU STATE:

*** SINCE THE SUBSTANCE OF MODIFICATION P00123 COULD HAVE BEEN UNILATERALLY IMPOSED UPON BELL THROUGH THE CHANGES CLAUSE WITHOUT ITS ACQUIESCENCE, NO MATERIAL CHANGE OF POSITION CAN BE GLEANED FROM BELL'S AGREEMENT TO MODIFICATION P00123. IN EFFECT, BY THIS MODIFICATION BELL MERELY VOLUNTARILY AGREED TO PERFORM THE CONTRACT IN THE SAME FASHION WHICH THE ARMY COULD HAVE COMPELLED BELL TO HAVE SO PERFORMED. THIS CANNOT BE DEEMED A SUFFICIENT CHANGE IN POSITION TO SUPPORT AN ESTOPPEL.

YOU FURTHER MAINTAIN THAT IN THE EVENT A CHANGE ORDER HAD BEEN ISSUED, BELL WOULD HAVE BEEN PERMITTED EQUITABLE ADJUSTMENTS IN THE CONTRACT PRICE AND DELIVERY SCHEDULE TO COMPENSATE FOR THE INCREASED COST AND TIME REQUIRED FOR PERFORMANCE OF THE CONTRACT. YOU ALSO CONTEND THAT ANY FAILURE BY BELL TO HAVE AGREED TO SUCH ADJUSTMENTS WOULD HAVE CONSTITUTED A QUESTION OF FACT UNDER THE DISPUTES CLAUSE OF THE CONTRACT, AND YOU THEREFORE CONCLUDE THAT SINCE BELL AGREED TO DO NOTHING MORE THAN WHAT THE ARMY COULD HAVE UNILATERALLY IMPOSED THROUGH A CHANGE ORDER, AND ALSO AGREED TO THE TYPE OF RELIEF AVAILABLE TO IT UNDER THE DISPUTES PROCEDURE, BELL GAVE UP NOTHING AND SUFFERED NO CHANGE IN POSITION BY ITS EXECUTION OF MODIFICATION P00123.

BELL ADDRESSED THIS ISSUE IN ITS INITIAL LETTER OF PROTEST TO OUR OFFICE DATED DECEMBER 10, 1971. THEREIN, BELL AGREED THAT IF THE CHANGES PROVIDED FOR BY MODIFICATION P00123 "WERE ISOLATED MATTERS UNRELATED TO THE BASIC OBJECTIVE OF SATISFYING CANADIAN NEEDS," THEN THE ISSUANCE OF A CHANGE ORDER AND THE DETERMINATION OF AN EQUITABLE ADJUSTMENT THEREUNDER WOULD HAVE BEEN APPROPRIATE. HOWEVER, BELL ARGUED:

BUT THE SUPPLEMENT DOES SOMETHING MUCH MORE FUNDAMENTAL THAN MERELY TO EFFECT A ROUTINE CHANGE SUBJECT TO EQUITABLE ADJUSTMENT. INSOFAR AS THE 74 HELICOPTERS COVERED BY THE SUPPLEMENT ARE CONCERNED, THE SUPPLEMENT ALTERED THE BASIC NEEDS THAT BELL WAS ACTING TO FULFILL UNDER CONTRACT - 1699. THE HELICOPTERS ARE BEING USED TO MEET NOT THE NEEDS OF THE ARMY BUT THE NEEDS OF CANADA.

BELL MAINTAINED THAT THE FULFILLMENT OF CANADIAN NEEDS WAS BEYOND THE SCOPE OF CONTRACT-1699; THAT ISSUANCE OF A CHANGE ORDER TO SATISFY THOSE NEEDS WOULD REQUIRE OF BELL PERFORMANCE WHICH WAS NOT "ESSENTIALLY THE SAME WORK AS THE PARTIES BARGAINED FOR WHEN THE CONTRACT WAS AWARDED," ARAGONA CONSTR. CO. V. UNITED STATES, 165 CT. CL. 382, 391(1964); AND REQUIRING BELL TO SUPPLY THE CANADIAN NEEDS UNDER A CHANGE ORDER WOULD THEREFORE HAVE CONSTITUTED A BREACH OF CONTRACT UNDER THE "CARDINAL CHANGE" DOCTRINE.

IN MARDEN CORP. V. UNITED STATES, 442 F.2D 364, 194 CT. CL. 799, THE COURT STATED THAT THE PURPOSE OF THE CARDINAL CHANGE DOCTRINE:

*** IS TO PROVIDE A BREACH REMEDY FOR CONTRACTORS WHO ARE DIRECTED BY THE GOVERNMENT TO PERFORM WORK WHICH IS NOT WITHIN THE GENERAL SCOPE OF THE CONTRACT. IN OTHER WORDS, A CARDINAL CHANGE IS ONE WHICH, BECAUSE IT FUNDAMENTALLY ALTERS THE CONTRACTUAL UNDERTAKING OF THE CONTRACTOR, IS NOT COMPREHENDED BY THE NORMAL CHANGES CLAUSE. 442 F.2D AT 369.

THE COURT THEN OBSERVED THAT SINCE THE CONTRACTOR'S CARDINAL CHANGE CLAIM WAS NOT ENCOMPASSED BY THE CHANGES CLAUSE OR ANY OTHER CONTRACT PROVISION:

*** WE MUST NECESSARILY CONCLUDE THAT THE CLAIM IS NOT REDRESSABLE UNDER THE CONTRACT. THE (ARMED SERVICES BOARD OF CONTRACT APPEALS) THEREFORE, WAS WITHOUT JURISDICTION TO CONSIDER THE CLAIM. EVEN THOUGH THE BOARD EVIDENTLY WAS OF THE OPINION THAT THE CLAIM WAS PROPERLY BEFORE IT, ITS FINDINGS OF FACT ON THAT CLAIM WERE GRATUITOUS AND SUCH FINDINGS DO NOT PRECLUDE OR LIMIT A TRIAL DE NOVO ON THE MERITS OF (THE BREACH OF CONTRACT CLAIM) IN THIS COURT. 442 F.2D AT 370.

IN THE INSTANT CASE, HAD THE CONTRACTING OFFICER ISSUED A CHANGE ORDER UNDER CONTRACT-1699 DIRECTING THE MODIFICATION AND DIVERSION OF AIRCRAFT TO SATISFY THE NEEDS OF THE GOVERNMENT OF CANADA, BELL WOULD HAVE BEEN IN A POSITION TO INSTITUTE AN ACTION IN THE COURT OF CLAIMS FOR BREACH OF CONTRACT DAMAGES UPON THE BASIS THAT THE CHANGE WAS CARDINAL IN NATURE. AS INDICATED IN MARDEN CORP. V. UNITED STATES, SUPRA, SUCH A CLAIM WOULD NOT HAVE BEEN REDRESSABLE UNDER THE PROVISIONS OF THE CONTRACT, AND THEREFORE WOULD NOT BE COGNIZABLE UNDER THE ADMINISTRATIVE DISPUTES PROCEDURE. THUS, THE RELIEF SOUGHT BY BELL WOULD NOT BE LIMITED TO THAT AFFORDED BY THE EQUITABLE ADJUSTMENT PROVISIONS OF THE CHANGES CLAUSE.

THE CONTRACTING OFFICER WAS NOT REQUIRED TO RESORT TO THE ISSUANCE OF A CHANGE ORDER TO FULFILL THE CANADIAN REQUIREMENT BECAUSE THE PARTIES ENTERED INTO A BILATERAL AGREEMENT THEREFOR THROUGH THE EXECUTION OF MODIFICATION P00123. OF COURSE, BELL HAS MADE THE CONTENTION, WITH WHICH WE AGREED IN OUR DECISION OF JUNE 16, THAT IT WAS INDUCED TO EXECUTE MODIFICATION P00123 IN THE BELIEF THAT IT WOULD RECEIVE A SEPARATE NEGOTIATED CONTRACT FOR REPLACEMENT AIRCRAFT. THUS, BELL AGREED TO PERFORM WORK UNDER CONTRACT-1699 WHICH IT MIGHT OTHERWISE HAVE MAINTAINED WAS BEYOND THE SCOPE OF THAT CONTRACT. THE EFFECT OF PERFORMANCE BY A CONTRACTOR OF WORK WHICH MIGHT BE DEEMED BEYOND THE SCOPE OF A CONTRACT WAS DISCUSSED IN SILBERBLATT & LASKER, INC. V. UNITED STATES, 101 CT. CL. 54, 79-80(1944):

PLAINTIFF SAYS THAT THESE CHANGES WERE BEYOND THE SCOPE OF THE CONTRACT AND, THEREFORE, DO NOT COME WITHIN THE PROVISIONS OF (THE CHANGES CLAUSE) THEREOF PERMITTING THE CONTRACTING OFFICER TO MAKE CHANGES WITHIN THE GENERAL SCOPE OF THE CONTRACT. THE CHANGE WAS MERELY FROM ONE CHARACTER OF STONE TO ANOTHER, AND IN OUR OPINION WAS WITHIN THE GENERAL SCOPE OF THE CONTRACT. EVEN IF THE CHANGE WAS BEYOND THE SCOPE OF THOSE PERMITTED, THE PLAINTIFF ACQUIESCED IN THE MAKING OF IT; IT CLAIMED NO BREACH OF CONTRACT, BUT CONTINUED PERFORMANCE OF IT AS CHANGED. THE CHANGE MADE, THEREFORE, IS GOVERNED BY (THE CHANGES AND DISPUTES CLAUSES) OF THE CONTRACT.

SIMILARLY, IN TEXAS TRUNK CO., ASBCA NO. 3681, NOVEMBER 20, 1957, 57-2 BCA 1528, IT WAS STATED:

WHILE THE GOVERNMENT DID NOT HAVE A RIGHT UNDER THE CONTRACT TO REQUIRE THE CONTRACTOR TO PRODUCE REPLACEMENT SUPPLIES, AND A REFUSAL BY THE CONTRACTOR TO COMPLY WITH THE DIRECTIONS OF THE CONTRACTING OFFICER WOULD NOT HAVE BEEN A BREACH OF CONTRACT, NEVERTHELESS, WHEN THE CONTRACTOR DID ACCEPT THE ORDER OF THE CONTRACTING OFFICER FOR REPLACEMENT SUPPLIES AND COMMENCED PERFORMANCE, AN ORDER FOR EXTRA SERVICES AND SUPPLIES WAS ESTABLISHED UNDER THE CONTRACT.

WHEN A CONTRACTING OFFICER ORDERS EXTRA SERVICES WHICH ARE BEYOND THE SCOPE OF WHAT THE GOVERNMENT HAS A RIGHT TO REQUIRE BY UNILATERAL ACTION UNDER THE "CHANGES" CLAUSE, BUT THE CONTRACTOR ACCEPTS THE ORDER AND PERFORMS THE SERVICES, THE CONTRACTOR THEREBY WAIVES HIS RIGHT TO OBJECT, AND THE CONTRACTOR MAY BE COMPENSATED FOR THE SERVICES BY PRICE ADJUSTMENT UNDER THE "CHANGES" CLAUSE.

THEREFORE, IT WOULD APPEAR THAT BELL'S ACQUIESCENCE IN, AND PERFORMANCE OF, THE CANADIAN MODIFICATIONS AND DIVERSION WOULD PRECLUDE BELL FROM SUBSEQUENTLY MAINTAINING A BREACH OF CONTRACT ACTION UNDER THE CARDINAL CHANGE DOCTRINE. THE MERITS OF SUCH AN ACTION, OR THE LIKELIHOOD OF BELL'S SUCCESS THEREIN, WOULD NOT BE CONTROLLING IN DECIDING WHETHER BELL'S RELINQUISHMENT OF ITS RIGHT TO INSTITUTE AN ACTION BASED UPON THE THEORY OF CARDINAL CHANGE CONSTITUTED LEGAL CONSIDERATION. SEE 1 WILLISTON ON CONTRACTS, THIRD EDITION, SECTION 135A; 1 CORBIN ON CONTRACTS, SECTION 140(1963). IN VIEW THEREOF, AND AFTER CONSIDERATION OF YOUR PRESENT ARGUMENTS, WE REMAIN OF THE OPINION THAT BELL SUBSTANTIALLY ALTERED ITS LEGAL POSITION, AS SET OUT ABOVE, BY EXECUTING MODIFICATION P00123.

YOU FURTHER MAINTAIN THAT OUR DECISION UPON THE PRINCIPAL ISSUE IN THE CASE WAS BASED UPON AN INCOMPLETE, AND THEREFORE MISLEADING, RECORD. SPECIFICALLY, YOU SUGGEST THAT BELL WAS AWARE OF THE ARMY'S INTEREST IN EXERCISING THE CONTRACT-1699 OPTION AT AN EARLIER POINT IN TIME THAN STATED IN OUR DECISION, AND THAT BELL HAD BEEN ADVISED MORE FULLY THAN WE HAD INDICATED THAT THEIR STATEMENTS OF DECEMBER 1 AND 18, 1970, SET FORTH ON PAGES 6 AND 7 OF OUR DECISION, WERE IN ERROR.

IN ITS INITIAL LETTER OF PROTEST, BELL ALLEGED THAT IN EARLY FEBRUARY, 1971:

*** THE ARMY FIRST INDICATED TO BELL THAT IT WAS SERIOUSLY CONSIDERING USING THE OPTION CLAUSE OF CONTRACT 1699 TO FILL THE GAP IN THE ARMY INVENTORY THAT WOULD BE LEFT BY THE DIVERSION OF THE 74 HELICOPTERS TO CANADA.

IN THE ABSENCE OF ANY REFUTATION OF THIS ASSERTION IN THE ADMINISTRATIVE REPORT AND SUPPORTING DOCUMENTS, WE STATED ON PAGE 9 OF OUR DECISION OF JUNE 16 THAT:

THE CONTRACTING OFFICER'S COMMUNICATIONS IN EARLY FEBRUARY 1971 WERE THE FIRST INDICATION TO BELL THAT THE ARMY WAS CONSIDERING EXERCISE OF THE OPTION UNDER CONTRACT -1699 IN CONNECTION WITH THE CANADIAN MILITARY SALES CASE, ALTHOUGH THIS COURSE OF ACTION HAD BEEN CONTEMPLATED BY THE ARMY IN 1969 AND 1970.

THIS STATEMENT, YOU CONTEND, IS IN ERROR AND YOU HAVE INDICATED THAT INQUIRIES TO THE CONTRACTING OFFICER, HIS LEGAL OFFICER, AND A FORMER PROJECT MANAGER WILL REVEAL THAT BELL WAS INFORMED AS FAR BACK AS 1969 THAT THE ARMY WAS CONTEMPLATING EXERCISE OF THE CONTRACT -1699 OPTION. YOU ASSERT THAT THIS SHOWS BELL WAS NOT INDUCED BY THE ARMY TO CHANGE ITS POSITION UNDER THAT CONTRACT. EVEN IF IT WERE ESTABLISHED THAT BELL WAS ADVISED BY AVSCOM PERSONNEL IN 1969 AND 1970 THAT EXERCISE OF THE OPTION WAS BEING CONSIDERED, WE DO NOT BELIEVE THAT THIS WOULD SUFFICIENTLY ALTER THE TOTAL FACTUAL CIRCUMSTANCES SO AS TO REQUIRE OR JUSTIFY ANY CHANGE IN OUR BASIC CONCLUSION.

BELL'S MESSAGE OF DECEMBER 1, 1970, AND ITS PROPOSAL DATED DECEMBER 18, 1970, FOR THE MODIFICATION AND DIVERSION OF AIRCRAFT FOR CANADA EXPRESSED AN UNDERSTANDING THAT THE DIVERTED AIRCRAFT WOULD BE REPLACED UNDER A SEPARATE CONTRACT. THESE STATEMENTS WERE SET FORTH IN BELL'S INITIAL LETTER OF PROTEST DATED DECEMBER 10, 1971. FROM OUR EXAMINATION OF THE ADMINISTRATIVE REPORT, WE CONCLUDED THAT NO RESPONSE HAD BEEN MADE TO THE DECEMBER 1 MESSAGE AND THAT THE ARMY DISAGREED WITH THE PROVISION OF THE DECEMBER 18 PROPOSAL IN SUCH A MANNER AND UNDER SUCH CIRCUMSTANCES AS TO NOT CLEARLY NEGATE BELL'S UNDERSTANDING.

YOU NOW SUGGEST THAT AN INQUIRY OF THE CONTRACTING OFFICER WILL SHOW OUR DECISION IS ERRONEOUS IN THIS RESPECT. WHEN, AS IN THIS CASE, AN ALLEGATION HAS BEEN CLEARLY MADE, AND RESPONSIBLE OFFICIALS OF THE CONTRACTING AGENCY HAVE HAD THE OPPORTUNITY TO REFUTE IT, IN THE ABSENCE OF A REQUEST FOR RECONSIDERATION FROM THAT AGENCY, WE MUST DECLINE TO QUESTION THE ADMINISTRATIVE POSITION.

UPON CONSIDERATION OF THE ARGUMENTS WHICH YOU HAVE RAISED, WE REMAIN OF THE OPINION THAT OUR DECISION UPON THE PIVOTAL ISSUE IN THIS PROTEST WAS CORRECT. SINCE THIS ISSUE IS DISPOSITIVE OF THE PROTEST WE DEEM IT UNNECESSARY TO DECIDE THE MERITS OF THE SUBSIDIARY ISSUES PRESENTED BY YOUR REQUEST FOR RECONSIDERATION.

HOWEVER, IN VIEW OF THE EMPHASIS WHICH YOU PLACED THEREON, WE OFFER THE FOLLOWING COMMENT REGARDING OUR CONCLUSION THAT IFB -0235 DID "NOT PROVIDE AN ADEQUATE COMPETITIVE BASIS UPON WHICH TO MAKE AN AWARD." IT WAS OUR OPINION "THAT THE FUNDAMENTAL IMPROPRIETY OF IFB -0235 REQUIRING ITS CANCELLATION IS THAT IT WAS IMPROPERLY ISSUED, SINCE ITS PURPOSE WAS TO TEST THE MARKET AGAINST AN OPTION WHICH MAY NOT BE EXERCISED." THUS, EVEN IF THE TECHNICAL CONTROVERSY REGARDING THE DOORS-OFF FLIGHT CAPABILITY OF THE OH-6A WERE RESOLVED IN HUGHES' FAVOR, IT WOULD BE AN ACADEMIC MATTER SINCE THIS ISSUE WAS A SECONDARY REASON FOR FINDING IFB -0235 SHOULD BE CANCELED. WE THEREFORE BELIEVE IT WOULD BE INAPPROPRIATE TO UNDERTAKE ANY FURTHER EXAMINATION OF THIS ISSUE.

IN VIEW OF THE FOREGOING, THE DECISION OF JUNE 16 IS AFFIRMED.