B-139610, AUG. 13, 1959

B-139610: Aug 13, 1959

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

INC.: REFERENCE IS MADE TO YOUR LETTER OF MAY 13. AS YOU WERE ADVISED IN LETTER OF MAY 20. IN THAT REPORT IT IS STATED THAT THE ASSISTANT SECRETARY OF THE NAVY GRANTED AUTHORITY TO NEGOTIATE A CONTRACT PURSUANT TO 10 U.S.C. 2304 (A) (11) AND A QUESTIONNAIRE WAS SENT TO APPROXIMATELY 100 FIRMS WHICH MIGHT BE INTERESTED IN PROVIDING THE SERVICES. NINE FIRMS WERE SELECTED AS THE BEST SOURCES FROM WHICH TO SOLICIT PROPOSALS. NO EFFORT WAS MADE AT THAT TIME TO SURVEY IN DETAIL THEIR QUALIFICATIONS IN THE THREE SERVICE AREAS TO BE PERFORMED. THE EXCLUSION OF THE OTHER EIGHT FIRMS WAS BASED PRIMARILY ON THE FACT THAT THEY LACKED EXPERIENCE AND PERSONNEL REQUIRED FOR THE TYPE OF SERVICES SPECIFIED.

B-139610, AUG. 13, 1959

TO ASSOCIATED AERO SCIENCE LABORATORIES, INC.:

REFERENCE IS MADE TO YOUR LETTER OF MAY 13, 1959, PROTESTING AGAINST THE AWARD OF CONTRACT NO. N123 (61756) 19425A (PMR), BY THE NAVY PURCHASING OFFICE, LOS ANGELES, CALIFORNIA, TO LAND-AIR, INC., CHICAGO, ILLINOIS, FOR FURNISHING PERSONNEL AND MATERIALS TO ACCOMPLISH DATA REDUCTION, MATHEMATICAL AND ENGINEERING SERVICES. YOU REQUEST THAT THE ABOVE CONTRACT BE SET ASIDE AND AWARD MADE TO YOU SINCE YOU SUBMITTED THE LOWEST BID IN RESPONSE TO THE INVOLVED INVITATION.

AS YOU WERE ADVISED IN LETTER OF MAY 20, 1959, WE REFERRED THE MATTER OF YOUR PROTEST TO THE SECRETARY OF THE NAVY WITH A REQUEST FOR A COMPLETE REPORT THEREON, AND IN RESPONSE TO SUCH REQUEST WE RECEIVED A REPORT DATED JULY 23, 1959, WITH SUPPORTING DOCUMENTS, FROM THE ASSISTANT SECRETARY OF THE NAVY.

IN THAT REPORT IT IS STATED THAT THE ASSISTANT SECRETARY OF THE NAVY GRANTED AUTHORITY TO NEGOTIATE A CONTRACT PURSUANT TO 10 U.S.C. 2304 (A) (11) AND A QUESTIONNAIRE WAS SENT TO APPROXIMATELY 100 FIRMS WHICH MIGHT BE INTERESTED IN PROVIDING THE SERVICES. SEVENTEEN FIRMS RESPONDED TO THE QUESTIONNAIRE AND, AFTER SCREENING FOR GENERAL EXPERIENCE BY THE NAVY PURCHASING OFFICE, LOS ANGELES, AND TECHNICAL PERSONNEL OF THE PACIFIC MISSILE RANGE, NINE FIRMS WERE SELECTED AS THE BEST SOURCES FROM WHICH TO SOLICIT PROPOSALS. NO EFFORT WAS MADE AT THAT TIME TO SURVEY IN DETAIL THEIR QUALIFICATIONS IN THE THREE SERVICE AREAS TO BE PERFORMED; NAMELY, DATA REDUCTION, MATHEMATICAL SERVICES, AND ENGINEERING SERVICES. THE EXCLUSION OF THE OTHER EIGHT FIRMS WAS BASED PRIMARILY ON THE FACT THAT THEY LACKED EXPERIENCE AND PERSONNEL REQUIRED FOR THE TYPE OF SERVICES SPECIFIED. THE REQUEST FOR PROPOSALS WAS ISSUED ON DECEMBER 16, 1958, AND PROPOSALS WERE RECEIVED FROM EIGHT OF THE NINE PROSPECTIVE CONTRACTORS SOLICITED.

UPON ANALYSIS OF THE PROPOSAL SUBMITTED BY ASSOCIATED AERO SCIENCE LABORATORIES, INC., THE TECHNICAL EVALUATORS FOUND THAT THE PROPOSAL FAILED IN SEVERAL RESPECTS ADEQUATELY TO MEET THE REQUIREMENTS SPELLED OUT IN THE REQUEST FOR PROPOSALS AND THE SPECIFICATIONS. SPECIFICALLY, IT IS REPORTED THAT WHILE IT WAS DETERMINED THAT THE EXPERIENCE AND BACKGROUND OF YOUR FIRM IN THE FIELD OF BASIC DATA REDUCTION WORK WAS ACCEPTABLE, THE PROPOSAL WAS UNACCEPTABLE IN THE SIZE OF THE TEAM PROPOSED TO BE FURNISHED TO CARRY THE ESTIMATED WORKLOAD IN THE AREA. THE GOVERNMENT RECORDS INDICATED THAT YOUR FIRM UTILIZED 96 PEOPLE TO DO THE BASIC REDUCTION WORK FOR THE ACTIVITY IN 1953, WHEREAS UNDER THE INSTANT PROCUREMENT YOU PROPOSED TO USE 47 PEOPLE TO ACCOMPLISH A GREATER VOLUME OF MORE COMPLEX DATA REDUCTION WORK DURING THE FIRST YEAR OF THE CONTRACT. IT IS POINTED OUT THAT IN SPITE OF THE PROGRESS MADE SINCE 1953 IN PROCESSING DATA REDUCTION BY IMPROVED METHODS AND MACHINES, THE VOLUME AND COMPLEXITY OF THE WORK HAD INCREASED SO GREATLY SINCE 1953 THAT AT THE TIME OF EVALUATION OF THE PROPOSALS, THE BASIC DATA REDUCTION WORK AT THE ACTIVITY WAS BEING ACCOMPLISHED BY THE INCUMBENT CONTRACTOR WITH A COMPLEMENT OF APPROXIMATELY 100 PEOPLE. COMPARISON OF YOUR FIRM'S PROPOSAL WITH THOSE OF THE THREE COMPANIES DETERMINED TO BE MOST TECHNICALLY ACCEPTABLE; NAMELY, LAND AIR, RCA, AND TELECOMPUTING, DISCLOSED THAT YOU PROPOSED TO ACCOMPLISH ALL THE WORK ESTIMATED TO BE REQUIRED DURING THE FIRST YEAR WITH A STAFF OF 63 PEOPLE WHEREAS THE CITED COMPANIES CONSIDERED 113, 116, AND 153, RESPECTIVELY, AS THE MINIMUM STAFFING NECESSARY. THE GOVERNMENT HAD ESTIMATED THAT 120 PEOPLE WOULD BE REQUIRED TO MEET THE FIRST YEAR'S ANTICIPATED WORKLOAD IN ALL CATEGORIES. FURTHERMORE, YOUR PROPOSAL WAS FOUND TO BE INADEQUATE IN REGARD TO THE NUMBER OF QUALIFIED KEY PERSONNEL IN THE HIGHER LEVEL MATHEMATICAL WORK CATEGORIES. FOR INSTANCE, YOU PROPOSED TO USE ONE PROFESSIONAL MATHEMATICIAN, TWO COMPUTER PROGRAMMERS, AND ONE MATHEMATICAL AIDE WHEREAS LAND-AIR, RCA, AND TELECOMPUTING PROPOSED TO USE 8, 14, AND 8; 22, 8, AND 15; AND 4, 23, AND 27, RESPECTIVELY.

ON FEBRUARY 6, 1959, THE PACIFIC MISSILE RANGE FORWARDED TO THE NAVY PURCHASING OFFICE ITS TECHNICAL RECOMMENDATION FOR AWARD TO LAND AIR,INC., OF A CONTRACT FOR THE REQUIRED SERVICES. THE TECHNICAL RECOMMENDATION WAS DOCUMENTED BY AN ENUMERATION OF THE CRITERIA USED IN MAKING THE TECHNICAL EVALUATION. THE PURCHASING OFFICE AFTER CAREFUL STUDY OF THE TECHNICAL RECOMMENDATION CONCLUDED THAT YOUR PROPOSAL WAS INADEQUATE FROM THE POINT OF VIEW OF LABOR UTILIZATION, ORGANIZATIONAL STRUCTURE AND COMPOSITION, AND THE QUALIFICATIONS OF LABOR CLASSIFICATIONS ESPECIALLY IN KEY POSITIONS. ON THE BASIS OF THIS REVIEW THE NAVY PURCHASING OFFICE REVIEW BOARD APPROVED THE RECOMMENDATION OF AWARD TO LAND-AIR.

THE SUBJECT CONTRACT WAS NEGOTIATED PURSUANT TO 10 U.S.C. 2304 (A) (11) WHICH AUTHORIZES THE HEAD OF THE AGENCY TO NEGOTIATE WITHOUT FORMAL ADVERTISING A PURCHASE OR CONTRACT, IF THE PURCHASE OR CONTRACT IS FOR PROPERTY OR SERVICES THAT HE DETERMINES TO BE FOR EXPERIMENTAL, DEVELOPMENT, OR RESEARCH WORK, OR FOR MAKING OR FURNISHING PROPERTY FOR EXPERIMENT, TENT, DEVELOPMENT, OR RESEARCH. WHEN THE AUTHORITY TO NEGOTIATE APPLIES AND IS USED THE TERMS AND CONDITIONS UPON WHICH PROPOSALS ARE REQUESTED AND EVALUATED ARE MATTERS PRIMARILY FOR DETERMINATION BY THE AGENCY, AND THE RULES OF FORMALLY ADVERTISED COMPETITIVE BIDDING ARE NOT APPLICABLE. UNDER THE AUTHORITY TO NEGOTIATE, THE AUTHORIZED CONTRACTING OFFICIALS LEGALLY MAY TAKE INTO CONSIDERATION NOT ONLY PRICE BUT ALL FACTORS AFFECTING THE NEEDS AND INTERESTS OF THE GOVERNMENT.

MOREOVER, THE DRAFTING OF SPECIFICATIONS WHICH WILL MEET THE MINIMUM NEEDS OF THE GOVERNMENT AND THE FACTUAL DETERMINATION AS TO WHETHER THE SERVICES AND MATERIALS OFFERED COMPLY WITH THOSE NEEDS AND SPECIFICATIONS ARE PRIMARILY THE RESPONSIBILITY OF THE ADMINISTRATIVE OFFICE. UNDER THE FACTS OF RECORD AND APPLICABLE LAW WE FEEL THAT THE EVALUATION BY THE DEPARTMENT OF THE NAVY CONSTITUTES A BONA FIDE DETERMINATION ADEQUATELY SUPPORTED BY SUBSTANTIAL EVIDENCE.

IN VIEW THEREOF, IT MUST BE CONCLUDED THAT THERE IS NO LEGAL BASIS FOR CANCELING THE ABOVE AGREEMENT AND DIRECTING THE AWARD OF A SIMILAR CONTRACT TO YOUR CORPORATION.