B-128237, JUL. 31, 1956

B-128237, JUL. 31, 1956

TO MIAMI AIRLINE, INC.:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM RECEIVED JUNE 12, 1956, PROTESTING AWARDS OF CONTRACTS BY THE AIR MATERIAL COMMAND, UNITED STATES AIR FORCE, DAYTON, OHIO, TO THE AMERICAN AIR EXPORT AND IMPORT COMPANY AND THE RIDDLE AIRLINES FOR AIR TRANSPORTATION SERVICES DURING A 3-YEAR PERIOD BEGINNING JULY 1, 1956, IT BEING STATED THAT YOUR BIDS WERE THE LOWEST RECEIVED AND NOT ALL REQUIREMENTS WITH THE ADDED FACTOR OF YOUR PERSONAL GUARANTY.

IT APPEARS FROM THE RECORD FORWARDED BY THE DEPARTMENT OF THE AIR FORCE THAT THE ADVERTISED SERVICES WERE FOR THE AIR TRANSPORTATION OF HIGH PRIORITY CARGO BETWEEN 34 AIR FORCE DEPOTS AND BASES THROUGHOUT THE UNITED STATES. FOR PURPOSES OF ADVERTISING, ROUTES WERE CONSOLIDATED INTO FIVE PATTERNS OR SEGMENTS WITH PATTERN I UTILIZING C-54 TYPE AIRCRAFT AND PATTERNS II THROUGH V UTILIZING C-46F TYPE AIRCRAFT. IN ADDITION TO QUOTING ON THE 1957 FISCAL YEAR REQUIREMENTS, BIDDERS WERE REQUESTED TO SUBMIT ALTERNATE PROPOSALS FOR A 3-YEAR PERIOD BEGINNING JULY 1, 1956. THE ALTERNATE PROPOSALS RECEIVED WERE ACCEPTED AND THE CONTRACTS WERE WRITTEN FOR THE FISCAL YEAR 1957 WITH PRICE OPTIONS FOR EACH OF THE TWO SUCCEEDING YEARS. AWARDS WERE MADE TO THE LOWEST RESPONSIBLE BIDDERS BASED ON THE 3-YEAR AVERAGE RATE. YOU SUBMITTED PROPOSALS FOR PATTERNS II, III, AND IV. THE FOLLOWING TABULATION SHOWS YOUR 3-YEAR AVERAGE RATES PER MILE AND THE RATES OF THE SUCCESSFUL BIDDERS:

CHART

"PATTERN II MIAMI AIRLINE, INC., MIAMI, FLORIDA .6316 CAPITOL AIRWAYS, INC., NASHVILLE, TENN. .56845

"PATTERN III MIAMI AIRLINE, INC., MIAMI, FLORIDA .634 RIDDLE AIRLINES, INC., MIAMI, FLORIDA .66

"PATTERN IV MIAMI AIRLINE, INC., MIAMI, FLORIDA .633 AMERICAN AIR EXPORT AND IMPORT CO., MIAMI, FLORIDA .6323"

IT WILL THUS BE SEEN THAT YOU QUOTED THE LOWEST RATE FOR PATTERN III ONLY. THE DEPARTMENT REPORTS, HOWEVER, THAT IT WAS NECESSARY BEFORE AN AWARD COULD BE MADE TO DETERMINE YOUR CAPABILITY TO PERFORM, PARTICULARLY IN VIEW OF THE FACT THAT IN ORDER TO PERFORM THE SERVICES UNDER PATTERN III APPROXIMATELY 10 C-46F TYPE AIRCRAFT, 60 OPERATIONAL PERSONNEL AND ADEQUATE MAINTENANCE FACILITIES WOULD BE REQUIRED. AS EVIDENCE THAT THE DEPARTMENT ACTED IN GOOD FAITH, IT SHOULD BE POINTED OUT THAT CAPITAL AIRWAYS, INC., WAS CONSIDERABLY LOWER THAN YOUR BID ON PATTERN III. THE DEPARTMENT REPORTS THAT "DESPITE THE FACT, HOWEVER, THAT CAPITAL AIRWAYS IS A GOING CONCERN, HAS BEEN A SUCCESSFUL CONTRACTOR AND HAD A SPLENDID NUCLEUS OF AIRCRAFT AND TRAINED PERSONNEL,IT WAS NOT FELT THAT CAPITOL'S CAPACITY FOR POTENTIAL EXPANSION CAPABILITY WAS SUCH AS TO JUSTIFY THE AWARD TO CAPITOL AIRWAYS ON PATTERN III AS WELL AS ON PATTERN II.' WITH RESPECT TO YOUR CAPABILITY THE DEPARTMENT'S REPORT CONTINUES AS FOLLOWS:

"THE FACILITY CAPABILITY SURVEY REVEALED THAT NINE (9) OF THE AIRCRAFT INDICATED BY MIAMI AIRLINE, INC. AS BEING AVAILABLE FOR LEASE WERE C-46A'S AND C-46D-S. THE ONE (1) AIRPLANE THAT WAS A C-46F WAS ON THE FIELD IN A DISMANTLED CONDITION. ALSO, A CHECK WITH THE OWNERS OF THE AIRCRAFT INDICATED THAT MIAMI AIRLINE, INC. DID NOT HAVE FIRM LEASE AGREEMENTS ON A NUMBER OF THEM AND THAT TWO (2) OF THEM WERE ACTUALLY IN LITIGATION. FURTHERMORE, IT WOULD REQUIRE APPROXIMATELY TWO (2) MONTHS TO MODIFY EARLIER C-46 MODELS INTO C-46F AIRPLANES, WHICH WOULD MAKE IT IMPOSSIBLE FOR MIAMI TO COMMENCE OPERATIONS ON THE REQUIRED STARTING DATE. ADDITION THE SURVEY INDICATED THAT THE COMPANY DID NOT HAVE ADEQUATE MAINTENANCE FACILITIES TO KEEP THE AIRCRAFT FLYING, OR PERSONNEL WITH WHICH TO OPERATE THE AIRCRAFT OR FACILITIES.

"IN AWARDING CONTRACTS FOR AIRLIFT, IT HAS BEEN CONSISTENT AIR FORCE POLICY TO SELECT SOURCES WHICH NORMALLY OPERATE THE TYPE OF EQUIPMENT TO BE UTILIZED IN SUBSTANTIALLY THE NUMBER NECESSARY TO MEET THE REQUIREMENTS. WE HAVE FOUND THAT SUCH A POLICY ASSURES A SOUND, EFFICIENT OPERATION WITHOUT LIMITING THE USE OF A FREE AND HEALTHY COMPETITION.'

THE ESTABLISHED RULE IS THAT THE DETERMINATION OF THE QUALIFICATIONS OF BIDDERS IS PRIMARILY THE FUNCTION OF THE ADMINISTRATIVE AND CONTRACTING OFFICIALS OF THE GOVERNMENT CONCERNED WITH THE MAKING OF AWARDS OF CONTRACTS. IN THE ABSENCE OF ANY SHOWING OF FRAUD OR COLLUSION OR BAD FAITH OR LACK OF A PROPER FACTUAL BASIS FOR THE DETERMINATION MADE IN ANY CASE, WE ARE NOT REQUIRED TO QUESTION THE ACTION TAKEN THEREON. ON THE RECORD BEFORE US IN THE PRESENT MATTER WE FIND NO BASIS FOR OBJECTING TO THE AWARDS AS MADE.