B-148711, SEP. 14, 1962

B-148711: Sep 14, 1962

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INC.: REFERENCE IS MADE TO YOUR TELEGRAM OF APRIL 19. THE ABOVE WORK WAS REQUIRED IN ORDER TO ENABLE LOCKHEED AIRCRAFT CORPORATION TO USE THE BUILDING IN THE PERFORMANCE OF CONTRACTS FOR THE MANUFACTURE OF C-130 AND C-141 AIRCRAFT. IT WAS THOUGHT THAT THE NECESSARY WORK WOULD BE A MINOR PROJECT AND LOCKHEED SECURED THE SERVICES OF AN ARCHITECT-ENGINEER TO PREPARE SPECIFICATIONS. BIDS WERE REQUESTED FOR PERFORMING THE DIFFERENT PHASES OF THE WORK. BEFORE ANY CONTRACTS WERE LET IT WAS DETERMINED BY THE AIR FORCE THAT. THERE WAS AN ACUTE SHORTAGE OF SPACE AND UNTIL BUILDING B-27 COULD BE CONVERTED TO A MATERIAL PROCESSING FACILITY IT WAS NECESSARY TO USE WIDELY SCATTERED AREAS. WHICH WAS BOTH COSTLY AND INEFFICIENT.

B-148711, SEP. 14, 1962

TO THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA, INC.:

REFERENCE IS MADE TO YOUR TELEGRAM OF APRIL 19, 1962, AND LETTER DATED MAY 7, 1962, PROTESTING THE METHOD OF CONTRACTING FOR THE RENOVATION AND REHABILITATION OF BUILDING B-27 AT AIR FORCE PLANT NO. 6, MARIETTA, GEORGIA.

THE ABOVE WORK WAS REQUIRED IN ORDER TO ENABLE LOCKHEED AIRCRAFT CORPORATION TO USE THE BUILDING IN THE PERFORMANCE OF CONTRACTS FOR THE MANUFACTURE OF C-130 AND C-141 AIRCRAFT. INITIALLY, IT WAS THOUGHT THAT THE NECESSARY WORK WOULD BE A MINOR PROJECT AND LOCKHEED SECURED THE SERVICES OF AN ARCHITECT-ENGINEER TO PREPARE SPECIFICATIONS. BIDS WERE REQUESTED FOR PERFORMING THE DIFFERENT PHASES OF THE WORK, BUT BEFORE ANY CONTRACTS WERE LET IT WAS DETERMINED BY THE AIR FORCE THAT, IN ORDER TO PRESERVE THE BUILDING AND USE IT ECONOMICALLY, CONSIDERABLE ADDITIONAL WORK MUST BE DONE, WHICH CHANGED THE CLASSIFICATION OF THE PROJECT TO "MAJOR CONSTRUCTION OR REHABILITATION.' THE NEED FOR THE CONVERTED BUILDING ALSO BECAME PRESSING DUE TO STEPPED-UP DELIVERY SCHEDULES AND THE LIKELIHOOD OF FURTHER STEP-UPS. THERE WAS AN ACUTE SHORTAGE OF SPACE AND UNTIL BUILDING B-27 COULD BE CONVERTED TO A MATERIAL PROCESSING FACILITY IT WAS NECESSARY TO USE WIDELY SCATTERED AREAS, WITH CONTINUAL MOVING, A CONSIDERABLE AMOUNT OF OVERTIME, AND THE RENTAL OF SPACE AT HIGH RATES, WHICH WAS BOTH COSTLY AND INEFFICIENT.

BECAUSE OF THE URGENT NEED FOR THE FACILITY IT WAS DETERMINED THAT IT WOULD BE UNWISE TO WAIT FOR THE PREPARATION OF SPECIFICATIONS NECESSARY TO ADVERTISE FOR BIDS AND LOCKHEED WAS THEREFORE AUTHORIZED TO NEGOTIATE FOR THE WORK IN QUESTION. A STATEMENT OF WORK WAS PREPARED AND SEVEN CONSTRUCTION CONTRACTORS WERE INVITED TO SUBMIT PROPOSALS ON THE BASIS OF THIS STATEMENT. THREE PROPOSALS WERE SUBMITTED AND AN AWARD WAS MADE TO ONE PROPOSER.

YOU HAVE EXPRESSED OPPOSITION TO WHAT YOU HAVE TERMED THE "SEPARATE CONTRACTS METHOD," UNDER WHICH IT WAS ORIGINALLY INTENDED THAT THE WORK BE PERFORMED. YOU ALSO ALLEGE THAT THE STATEMENT OF WORK IS TOO GENERAL, THAT IT IS AMBIGUOUS, AND THAT THE PROVISION FOR GIVING STRONG CONSIDERATION TO FUTURE MAINTENANCE COST ASPECTS OF ALL PHASES OF THE PROJECT MAKES IT POSSIBLE TO SELECT THE GENERAL CONTRACTOR ON THE BASIS OF PERSONAL PREFERENCE BY RELATING INTENT TO AWARD TO SOME MAINTENANCE COST ASPECT WHICH MIGHT HAVE QUESTIONABLE REASONING BEHIND IT. YOUR CHIEF CONCERN, HOWEVER, STEMS FROM YOUR IMPRESSION THAT FUTURE AIR FORCE PROJECTS FOR MAJOR CONSTRUCTION WORK WILL BE HANDLED SIMILARLY.

THE DEPARTMENT OF THE AIR FORCE ADVISED THAT IT IS NOT ITS POLICY TO CONTRACT SEPARATELY FOR DIFFERENT PHASES OF A CONSTRUCTION JOB, IF IT APPEARS THAT THE GOVERNMENT'S INTEREST WOULD BE BETTER SERVED BY A SINGLE CONTRACT. HOWEVER, WHERE THE PROJECT IS MINOR, AS ORIGINALLY CONTEMPLATED IN THIS INSTANCE, AND WHERE THE ITEMS OF WORK ARE NOT TOO CLOSELY RELATED, IT MAY WELL BE THAT THE JOB COULD BE COMPLETED WITH EQUAL FACILITY AND GREATER ECONOMY WITHOUT A GENERAL CONTRACTOR.

SINCE PROPOSALS WERE REQUESTED WITHOUT WAITING FOR THE PREPARATION OF DETAILED SPECIFICATIONS, THE STATEMENT OF WORK WAS NECESSARILY OF A MORE GENERAL NATURE AND GAVE THE PROPOSERS GREATER LATITUDE BY INVITING DEVIATIONS FROM THE GENERAL REQUIREMENTS WHICH WOULD CONTRIBUTE TO CONSTRUCTION EFFICIENCY AND THEREBY BENEFIT THE GOVERNMENT. THE STATEMENT OF WORK WAS, HOWEVER, SUFFICIENTLY DETAILED TO PERMIT ADEQUATE COMPETITION, AND WHILE IT MAY, OF NECESSITY, NOT HAVE BEEN TOO SPECIFIC, WE DO NOT BELIEVE THAT IT WAS AMBIGUOUS.

AS TO THE POSSIBILITY OF MAKING AN AWARD ON THE BASIS OF PERSONNEL PREFERENCE, IT MUST BE RECOGNIZED THAT IN A NEGOTIATED PROCUREMENT, WHERE PRICE IS ONLY ONE OF MANY FACTORS TO BE CONSIDERED, THE CONTRACTING OFFICIALS ARE VESTED WITH CONSIDERABLE DISCRETION IN THE DETERMINATION OF THESE FACTORS AND THE CHOICE OF A CONTRACTOR. IF FUTURE MAINTENANCE COSTS ARE DETERMINED TO BE IMPORTANT, THEIR CONSIDERATION CAN HARDLY BE ELIMINATED ON THE GROUND THAT THEY MIGHT BE USED AS A COVER-UP. SINCE A NUMBER OF FACTORS COULD BE SIMILARLY USED, WE MAY ONLY RELY ON THE JUDGMENT AND INTEGRITY OF THE NEGOTIATING AND CONTRACTING PERSONNEL AND ON THE SAFEGUARDS PROVIDED BY REVIEW OF THE ACTION TAKEN.

WITH REFERENCE TO YOUR CONCERN THAT THE ACTION IN THIS CASE INDICATES A TREND AWAY FROM COMPETITIVE BIDDING AND THAT FUTURE MAJOR PROJECTS WILL BE HANDLED BY THE TYPE OF NEGOTIATION THAT OCCURRED IN THIS PROCUREMENT, WE HAVE THE ASSURANCE OF THE DEPARTMENT OF THE AIR FORCE THAT YOUR FEARS ARE GROUNDLESS. PARAGRAPH 13-2503.3 OF THE AIR FORCE PROCUREMENT INSTRUCTION REQUIRES FORMAL ADVERTISING IN THE ACCOMPLISHMENT OF MAJOR CONSTRUCTION OR REHABILITATION PROJECTS AND SETS FORTH THE PROCEDURE TO BE FOLLOWED, INCLUDING THE SELECTION OF AN ARCHITECT-ENGINEERING FIRM TO PREPARE DRAWINGS AND SPECIFICATIONS AND SUPERVISE THE CONSTRUCTION; THE PREPARATION OF PRELIMINARY DRAWINGS AND OUTLINE SPECIFICATIONS; THE PREPARATION OF DETAILED PLANS AND SPECIFICATIONS, AFTER APPROVAL OF THE PRELIMINARIES; AND ADVERTISING FOR BIDS ON THE BASIS OF THE DETAILED PLANS AND SPECIFICATIONS. THIS PROCEDURE SHOULD AND NORMALLY WILL BE FOLLOWED IN HANDLING THESE PROCUREMENTS. TO THIS END, THE AIR FORCE SYSTEMS COMMAND, WHICH HAS JURISDICTION OVER THE PROCURING ACTIVITY, HAS BEEN REQUESTED TO TAKE SUCH ACTION AS IT DEEMS APPROPRIATE TO ELIMINATE ANY UNNECESSARY DELAYS IN THE FUTURE WHICH MIGHT RESULT IN OTHER THAN COMPETITIVE PROCUREMENTS BASED ON DETAILED PLANS AND SPECIFICATIONS.

YOUR INTEREST IN THIS MATTER IS APPRECIATED AND YOU MAY BE SURE THAT THIS OFFICE WILL DO ALL IN ITS POWER TO PRESERVE FORMAL COMPETITION IN GOVERNMENT CONTRACTING.