B-134625, MARCH 25, 1958, 37 COMP. GEN. 628

B-134625: Mar 25, 1958

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CONTRACTS - NEGOTIATION - IMPRACTICABLE TO OBTAIN COMPETITION - AMENDMENT OF NEGOTIATED CONTRACT TO INCLUDE RELATED SERVICES THE AMENDMENT OF A NEGOTIATED AIRCRAFT MAINTENANCE CONTRACT TO INCLUDE RELATED MAINTENANCE WORK WHICH HAD BEEN PERFORMED PREVIOUSLY UNDER A CONTRACT AWARDED PURSUANT TO FORMAL ADVERTISING FOR COMPETITIVE BIDS IS NOT IMPROPER UNDER THE AUTHORITY FOR NEGOTIATION OF CONTRACTS WHERE IT IS IMPOSSIBLE TO OBTAIN COMPETITION IN 10 U.S.C. 2304 (A) (10). ISSUED REQUESTS FOR PROPOSALS TO 30 PROSPECTIVE CONTRACTORS FOR " MATS SYSTEMATIC AIRCRAFT MAINTENANCE" OF 64 (C-118 TYPE) AIRCRAFT LOCATED AT MCGUIRE AIR FORCE BASE AND THAT A CONTRACT FOR SUCH WORK WAS SUBSEQUENTLY NEGOTIATED WITH FLIGHT ENTERPRISES.

B-134625, MARCH 25, 1958, 37 COMP. GEN. 628

CONTRACTS - NEGOTIATION - IMPRACTICABLE TO OBTAIN COMPETITION - AMENDMENT OF NEGOTIATED CONTRACT TO INCLUDE RELATED SERVICES THE AMENDMENT OF A NEGOTIATED AIRCRAFT MAINTENANCE CONTRACT TO INCLUDE RELATED MAINTENANCE WORK WHICH HAD BEEN PERFORMED PREVIOUSLY UNDER A CONTRACT AWARDED PURSUANT TO FORMAL ADVERTISING FOR COMPETITIVE BIDS IS NOT IMPROPER UNDER THE AUTHORITY FOR NEGOTIATION OF CONTRACTS WHERE IT IS IMPOSSIBLE TO OBTAIN COMPETITION IN 10 U.S.C. 2304 (A) (10), WHICH INCLUDES SITUATIONS WHERE AS HERE THE MILITARY DEPARTMENT HAS DETERMINED THAT IT WOULD NOT BE PRACTICAL OR FEASIBLE TO MAKE AN AWARD PURSUANT TO AN ADVERTISED PROCUREMENT, IN VIEW OF THE MORE EFFICIENT AND ECONOMICAL "PACKAGE" CONCEPT OF HAVING ALL MAINTENANCE AND RELATED SERVICE PERFORMED BY ONE CONTRACTOR AT EACH INSTALLATION.

TO EDWARD K. WHEELER, MARCH 25, 1958:

A REPORT HAS BEEN RECEIVED FROM THE DEPARTMENT OF THE AIR FORCE RELATIVE TO THE PROTEST MADE IN YOUR LETTER OF DECEMBER 9, 1957, TO OUR OFFICE, ON BEHALF OF THE COASTAL AVIATION COMPANY OF WEST TRENTON, NEW JERSEY, AGAINST A NEGOTIATED AIR FORCE CONTRACT WITH FLIGHT ENTERPRISES, INC., CONTRACT NO. AF 33 (600/-35851, AS AMENDED, SO FAR AS IT INCLUDES A REQUIREMENT FOR BETWEEN-FLIGHTS CORROSION CONTROL AND EXTERNAL AND INTERIOR CLEANING OF C-118A AIRCRAFT AT MCGUIRE AIR FORCE BASE, BEGINNING ON OR ABOUT NOVEMBER 1, 1957.

THE DEPARTMENTAL REPORTS SHOWS THAT ON APRIL 30, 1957, HEADQUARTERS, AIR MATERIEL COMMAND, WRIGHT-PATTERSON AIR FORCE BASE, OHIO, ISSUED REQUESTS FOR PROPOSALS TO 30 PROSPECTIVE CONTRACTORS FOR " MATS SYSTEMATIC AIRCRAFT MAINTENANCE" OF 64 (C-118 TYPE) AIRCRAFT LOCATED AT MCGUIRE AIR FORCE BASE AND THAT A CONTRACT FOR SUCH WORK WAS SUBSEQUENTLY NEGOTIATED WITH FLIGHT ENTERPRISES, INC. ON OCTOBER 10, 1957, A LETTER CONTRACT DESIGNATED SUPPLEMENTAL AGREEMENT NO. 2 TO BASIC CONTRACT AF 33 (600/-35851 WAS ISSUED TO FLIGHT ENTERPRISES, INC. THIS SUPPLEMENTAL AGREEMENT CALLED FOR THE PERFORMANCE OF " DROP-IN" MAINTENANCE AS REQUIRED BY MILITARY AIR TRANSPORT SERVICE MAINTENANCE UNITS AT MCGUIRE AIR FORCE BASE. CLEANING, WASHING AND CORROSION CONTROL OPERATIONS WERE INCLUDED AMONG THE REQUIREMENTS FOR UNSCHEDULED MAINTENANCE OF TRANSIENT AIRCRAFT TO BE PERFORMED UNDER THE " DROP-IN" PORTION OF THE AMENDED NEGOTIATED CONTRACT.

IN YOUR LETTER OF DECEMBER 9, 1957, REFERENCE IS MADE TO THE FACT THAT THE LETTER CONTRACT ISSUED TO FLIGHT ENTERPRISES, INC., CITES SECTION 2 (C) (10) OF THE ARMED SERVICES PROCUREMENT ACT OF 1947 AND 10 U.S.C. 2304 (A) (10), AS AUTHORITY FOR ITS ISSUANCE. THE CITED PROVISIONS OF LAW PERMIT THE ARMED FORCES TO NEGOTIATE A CONTRACT INSTEAD OF MAKING AN AWARD PURSUANT TO FORMAL ADVERTISING WHEN "IT IS IMPRACTICABLE TO OBTAIN COMPETITION.'

YOU STATE THAT AT A CONFERENCE WITH AIR FORCE OFFICIALS ON NOVEMBER 5, 1957, IT WAS POINTED OUT THAT THERE WAS NOTHING IMPRACTICABLE ABOUT OBTAINING COMPETITIVE SEALED BIDS FOR THE WASHING, CLEANING AND CORROSION CONTROL WORK SINCE THE COASTAL AVIATION COMPANY HAD OBTAINED ITS CONTRACT PURSUANT TO A FORMAL ADVERTISEMENT FOR BIDS AND HAD REQUESTED AN OPPORTUNITY TO REBID ON THE PARTICULAR WORK. IT IS ALLEGED THAT AT THIS MEETING THERE WERE ALSO DISCUSSED VARIOUS NONSTATUTORY REASONS ASSIGNED FOR NEGOTIATING THE SUPPLEMENTAL AGREEMENT WITH FLIGHT ENTERPRISES, INC., INCLUDING DUPLICATION OF ADMINISTRATION AND INSPECTION, POSSIBLE LABOR AND SECURITY PROBLEMS AND THE POSSIBILITY OF SCHEDULING WORK ON ONE WASH RACK. IT IS ALSO STATED IN YOUR LETTER THAT "AFTER THESE NONSTATUTORY MAKE-WAITS WERE DISPENSED WITH, COLONEL BROWN, THE OFFICER REPRESENTING MATS HEADQUARTERS, STATED THAT MATS WANTED ONLY ONE CONTRACTOR ON EACH BASE AND THAT THAT WAS THE WAY IT WAS GOING TO BE UNLESS HE WAS OVERRULED.'

THE REPORT OF THE DEPARTMENT OF THE AIR FORCE EXPRESSES THE OPINION THAT THE CITATIONS TO SECTION 2 (C) (10) OF THE ARMED SERVICES PROCUREMENT ACT OF 1947, AND 10 U.S.C. 2304 (A) (10), AS AMPLIFIED BY ARMED SERVICES PROCUREMENT REGULATION 3-210.2 (IX) AND AIR FORCE PROCUREMENT INSTRUCTION 3-210.2 (I), AS AUTHORITY TO NEGOTIATE THE SUPPLEMENTAL AGREEMENT WITH FLIGHT ENTERPRISES, INC., WERE PROPER.

ALTHOUGH IT IS ADMITTED THAT THE DEPARTMENT COULD HAVE ADVERTISED FOR BIDS FOR AIRCRAFT WASHING AND CLEANING SERVICES AS BEFORE, IT IS STATED THAT THE DEPARTMENT DID NOT WISH TO DO SO BECAUSE THIS SERVICE IS ONLY A SMALL PORTION OF, AND INCIDENTAL TO, ALL OF THE REQUIRED SERVICES UNDER THE MATS-SAM ( SYSTEMATIC AIRCRAFT MAINTENANCE) "PACKAGE" CONCEPT OF AIRCRAFT RECONDITIONING AND MAINTENANCE. WITH RESPECT TO YOUR CRITICISM OF SUCH PACKAGE CONCEPT, THE DEPARTMENTAL REPORT STATES THAT THE PACKAGE CONCEPT OF AIRCRAFT MAINTENANCE AND RELATED SERVICES "IS THE MOST ECONOMICAL AND EFFICIENT APPROACH TO MINIMIZING THE PROBLEM OF "DOWN-TIME" ON OUR AIRCRAFT.' IN SUPPORT OF THIS STATEMENT, THE FOLLOWING INFORMATION HAS BEEN FURNISHED:

IN FISCAL YEAR 1957 FINAL ARRANGEMENTS WERE MADE BY HEADQUARTERS, UNITED STATES AIR FORCE; MILITARY AIR TRANSPORT SERVICE; AND HEADQUARTERS, AIR MATERIEL COMMAND TO IMPLEMENT THE MATS-SAM CONCEPT OF MAINTENANCE IN FISCAL YEAR 1958 AT SEVERAL MILITARY AIR TRANSPORT SERVICE BASES. THIS MAINTENANCE CONCEPT WAS DESIGNED TO OBTAIN HIGHER UTILIZATION OF THE MILITARY AIR TRANSPORT SERVICE TRANSPORT FLEET AT A LOWER ULTIMATE COST TO THE GOVERNMENT. THIS CONCEPT IS QUITE SIMILAR TO AIRLINE-TYPE MAINTENANCE IN THAT DEPOT-LEVEL MAINTENANCE IS PERFORMED IN INCREMENTS AT FREQUENT TIME INTERVALS AND THE MAINTENANCE IS PERFORMED ON THE BASE WHERE THE AIRCRAFT ARE STATIONED. THE CONTRACTOR WHO FURNISHES THE MAINTENANCE SERVICE PROVIDES ONLY MANAGEMENT, MANPOWER, AND MECHANIC'S TOOL KITS. PRACTICALLY EVERYTHING ELSE, SUCH AS FACILITIES, GROUND HANDLING EQUIPMENT, AND CERTAIN OFFICE EQUIPMENT IS FURNISHED BY THE GOVERNMENT. THE CONTRACTOR IS RESPONSIBLE FOR PROVIDING THE FOLLOWING SERVICES:

A. DEPOT-LEVEL MAINTENANCE TO BE PERFORMED ON EACH AIRCRAFT APPROXIMATELY ONCE EACH YEAR. THE WORK IS TO BE PERFORMED WITHIN 10 TO 20 WORKING DAYS AFTER THE AIRCRAFT ENTERS THE CONTRACTOR'S CONTROL. IN ADDITION TO PERFORMING DEPOT-LEVEL MAINTENANCE, THE CONTRACTOR IS RESPONSIBLE FOR PERFORMING DEFERRED SQUADRON AND GROUP LEVEL MAINTENANCE (1ST AND 2ND ECHELON) THAT HAS NOT BEEN ACCOMPLISHED BY MILITARY AIR TRANSPORT SERVICE.

B. PERFORMING TECHNICAL ORDER MODIFICATIONS AUTHORIZED BUT WHICH HAVE NOT BEEN PREVIOUSLY PERFORMED. THIS WORK WILL EITHER BE DONE WHEN THE AIRCRAFT IS RECEIVING SCHEDULED DEPOT-LEVEL MAINTENANCE OR WHENEVER THE AIRCRAFT CAN OTHERWISE BE MADE AVAILABLE TO THE CONTRACTOR BY MILITARY AIR TRANSPORT SERVICE.

C. PROCUREMENT OF SUPPLIES WHEN THEY ARE NOT AVAILABLE FROM AIR FORCE ASSETS.

D. PERFORMANCE OF, NORMALLY, SQUADRON AND GROUP LEVEL," DROP-IN" (UNSCHEDULED) MAINTENANCE THAT, FOR ONE OR MORE REASONS, IS BEYOND THE CAPABILITY OF THE MILITARY AIR TRANSPORT SERVICE UNITS. THE SCOPE OF THIS WORK IS, OF NECESSITY, VERY BROAD AND AFFECTED BY UNCERTAINTIES.

ALTHOUGH THERE ARE FOUR SEPARATE ITEMS OF WORK LISTED ABOVE, IN ACTUAL PRACTICE THERE CAN BE NO SUCH CLEAR DISTINCTION. WHAT WE HAVE IN EFFECT IS A CONTRACTOR WHO IS RESPONSIBLE FOR PERFORMING ALL MAINTENANCE BEYOND THE CAPABILITIES OF THE MILITARY AIR TRANSPORT SERVICE UNITS. HE IS RESPONSIBLE FOR PERFORMING THIS MAINTENANCE AT SUCH TIMES AS WILL RESULT IN AIRCRAFT BEING OUT OF COMMISSION FOR MAINTENANCE AS LITTLE AS POSSIBLE. AS A RESULT, MODIFICATION WORK CAN OFTEN BE PERFORMED WHEN THE CONTRACTOR IS PERFORMING SQUADRON AND GROUP LEVEL MAINTENANCE AND VICE VERSA. CONTRACTOR PERSONNEL IN MAINTENANCE SHOPS WILL BE OVERHAULING COMPONENTS REQUIRED FOR DEPOT LEVEL WORK AS WELL AS FOR SQUADRON AND GROUP LEVEL WORK. BECAUSE THE INDIVIDUAL FACETS OF THE MANY REQUIRED WORK ELEMENTS CANNOT BE ECONOMICALLY AND EFFICIENTLY SEGREGATED TO PERMIT SEVERAL INDIVIDUAL CONTRACTORS TO PARTICIPATE IN ONLY THAT LIMITED PART UPON WHICH THEY FEEL FULLY QUALIFIED, IT HAS ALWAYS BEEN OUR INTENT TO EVENTUALLY HAVE ONE AND ONLY ONE CONTRACTOR ON A MILITARY AIR TRANSPORT SERVICE AIR FORCE BASE PERFORMING THE MATS-SAM CONCEPT OF MAINTENANCE REQUIREMENTS. THE COMPLETE "PACKAGE" WITH ITS VARIETY OF WORK REQUIREMENTS ENABLES THE SINGLE CONTRACTOR, FULLY QUALIFIED IN ALL PHASES OF OUR REQUIREMENTS, TO MAINTAIN A RELATIVELY STABLE WORK FORCE GAINFULLY EMPLOYED. THE EXTRA COST OF DEFRAYING THE OVERHEAD OF TWO OR MORE CONTRACTORS WITH FRAGMENTS OF THE WHOLE; PROBLEMS OF MANAGEMENT OF BOTH THE AIR FORCE AND THE CONTRACT USING THE SAME HANGERS, WORK AREAS, AND MAINTENANCE SHOPS, ADDITIONAL ADMINISTRATIVE AND RELATED "TOP HEAVINESS" ALL MILITATED AGAINST SEVERANCE OF PIECES OF THE WHOLE MERELY TO AFFORD LIMITED, QUALIFIED CONTRACTORS TO COMPETE FOR THESE SEGMENTS.

WE ARE OF THE OPINION THAT THE STATUTORY AUTHORITY OF THE ARMED SERVICES TO NEGOTIATE CONTRACTS ,FOR PROPERTY OR SERVICES FOR WHICH IT IS IMPRACTICABLE TO OBTAIN COMPETITION" CLEARLY COVERS SITUATIONS NOT ONLY WHERE IT MAY HAVE BEEN IMPOSSIBLE TO OBTAIN COMPETITION BUT ALSO THOSE SITUATIONS WHERE THE MILITARY ESTABLISHMENTS HAVE MADE REASONABLE DETERMINATIONS TO THE EFFECT THAT IT WOULD NOT BE PRACTICAL OR FEASIBLE TO MAKE AN AWARD PURSUANT TO FORMAL ADVERTISING FOR COMPETITIVE BIDS. WE ARE ALSO OF THE OPINION THAT THE SO-CALLED AIR FORCE "PACKAGE" CONCEPT OF CONTRACTING FOR RELATED SERVICES TO BE PERFORMED AT A PARTICULAR MILITARY INSTALLATION IS NOT LEGALLY OBJECTIONABLE.

IN THE CIRCUMSTANCES, AND CONSIDERING THAT A CONTRACT HAD ALREADY BEEN NEGOTIATED WITH FLIGHT ENTERPRISES, INC., COVERING A CONSIDERABLE AMOUNT OF AIRCRAFT MAINTENANCE WORK TO BE PERFORMED AT MCGUIRE AIR FORCE BASE, YOU ARE ADVISED THAT WE FIND NO PROPER BASIS FOR TAKING EXCEPTION TO THE AMENDMENT OF SUCH NEGOTIATED CONTRACT SO AS TO PROVIDE FOR THE FUTURE PERFORMANCE OF ADDITIONAL AIRCRAFT MAINTENANCE WORK AT THE BASE, INCLUDING SERVICES OF THE TYPE PREVIOUSLY PERFORMED BY THE COASTAL AVIATION COMPANY UNDER THE TERMS OF ITS CONTRACT WHICH EXPIRED ON OCTOBER 31, 1957.