B-148952, B-149253, OCT. 18, 1962

B-148952,B-149253: Oct 18, 1962

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ADAIR: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF MAY 18. A RESPONSE TO EACH OF YOUR PROTESTS WILL BE INCORPORATED IN THIS COMMUNICATION. WE HAVE REVIEWED THE VOLUMINOUS RECORD OF THE PROCUREMENT AND FIND NO BASIS FOR OBJECTING TO THE ADMINISTRATIVE ACTION. UNDER THE PROPOSAL FIFTY-ONE SOURCES WERE SOLICITED AND SEVEN PROPOSALS WERE RECEIVED. THE PROPOSALS WERE EVALUATED BY AIR FORCE TECHNICAL PERSONNEL IN ACCORDANCE WITH AN EVALUATION PROCEDURE AND CRITERIA ESTABLISHED BEFORE THE REQUEST FOR PROPOSAL WAS ISSUED. THIS EVALUATION RESULTED IN A DETERMINATION THAT ONLY ONE PROPOSAL WAS FULLY ACCEPTABLE. WERE NOT CONSIDERED QUALIFIED FOR THAT PURPOSE. WE ARE SATISFIED THAT THE DETERMINATION FOR THE USE OF TWO-STEP FORMAL ADVERTISING WAS THE RESULT OF CONSIDERABLE STUDY AND CONSIDERATION OF THE GOVERNMENT'S NEED AND THE TECHNICAL PROBLEMS INVOLVED.

B-148952, B-149253, OCT. 18, 1962

TO MR. ROBERT G. ADAIR:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF MAY 18, 1962, AND SUBSEQUENT CORRESPONDENCE, PROTESTING AGAINST THE EXCLUSION OF YOUR CORPORATION FROM PARTICIPATION IN THE SECOND STEP OF PROCUREMENT OF ENVIRONMENTAL CONTROL SYSTEMS FOR MINUTEMAN WING II LAUNCHING FACILITIES UNDER TECHNICAL PROPOSAL AF 04/694/-62-2, ISSUED FEBRUARY 12, 1962,BY THE BALLISTIC SYSTEMS DIVISION, DEPARTMENT OF THE AIR FORCE. WE REFER ALSO TO YOUR LETTER OF JUNE 20, 1962, PROTESTING AGAINST THE CRITERIA ESTABLISHED FOR ELIGIBILITY FOR PARTICIPATION IN THE TWO-STEP PROCUREMENT OF ENVIRONMENTAL CONTROL SYSTEMS FOR MINUTEMEN WINGS III AND IV. A RESPONSE TO EACH OF YOUR PROTESTS WILL BE INCORPORATED IN THIS COMMUNICATION.

WITH RESPECT TO YOUR FIRST COMPLAINT, CONCERNING THE EXCLUSION OF YOUR FIRM FROM PARTICIPATION IN THE SECOND STEP UNDER THE TECHNICAL PROPOSAL ISSUED BY THE BALLISTIC SYSTEMS DIVISION, WE HAVE REVIEWED THE VOLUMINOUS RECORD OF THE PROCUREMENT AND FIND NO BASIS FOR OBJECTING TO THE ADMINISTRATIVE ACTION. UNDER THE PROPOSAL FIFTY-ONE SOURCES WERE SOLICITED AND SEVEN PROPOSALS WERE RECEIVED. THE PROPOSALS WERE EVALUATED BY AIR FORCE TECHNICAL PERSONNEL IN ACCORDANCE WITH AN EVALUATION PROCEDURE AND CRITERIA ESTABLISHED BEFORE THE REQUEST FOR PROPOSAL WAS ISSUED. THIS EVALUATION RESULTED IN A DETERMINATION THAT ONLY ONE PROPOSAL WAS FULLY ACCEPTABLE, NAMELY, THE ONE SUBMITTED BY AMERICAN AIR FILTER COMPANY, INC., ROCK ISLAND, ILLINOIS. IN ORDER TO IMPROVE THE GOVERNMENT'S NEGOTIATING POSITION AND INSURE PRICE COMPETITION, THE BALLISTIC SYSTEMS DIVISION UNDERTOOK FURTHER ACTION IN ACCORDANCE WITH ASPR 2-503.1 (B) (V) TOWARDS QUALIFYING ONE OR MORE OF THE SIX REMAINING PROPOSALS. BASED ON AN EXTENSIVE REVIEW OF THESE OTHER PROPOSALS, THE COGNIZANT AIR FORCE TECHNICAL PERSONNEL DETERMINED THAT ONLY ONE, NAMELY, THE PROPOSAL SUBMITTED BY THE CARRIER AIR CONDITIONING COMPANY, SYRACUSE, NEW YORK, MERITED FURTHER CONSIDERATION FOR THE PURPOSE OF POSSIBLY UPGRADING IT TO AN ACCEPTABLE STATUS. ALL OTHER PROPOSALS, INCLUDING THE ONE SUBMITTED BY YOUR CORPORATION, WERE NOT CONSIDERED QUALIFIED FOR THAT PURPOSE.

WE ARE SATISFIED THAT THE DETERMINATION FOR THE USE OF TWO-STEP FORMAL ADVERTISING WAS THE RESULT OF CONSIDERABLE STUDY AND CONSIDERATION OF THE GOVERNMENT'S NEED AND THE TECHNICAL PROBLEMS INVOLVED, AND THAT THE FACTORS PERTINENT TO THE PREPARATION AND EVALUATION OF PROPOSALS WERE ADEQUATELY SET FORTH. IN THIS CONNECTION, THE CHIEF, PROCUREMENT DIVISION, REPORTS IN PART AS FOLLOWS:

"* * * ADMITTEDLY, THE AIR FORCE IN THIS INSTANCE HAD DEVELOPED A BASICALLY SATISFACTORY ENVIRONMENTAL CONTROL SYSTEM, WITH A DEVELOPMENTAL CONTRACTOR (AMERICAN AIR FILTER) FULLY CAPABLE OF PRODUCING THE UNITS DESIRED FOR MINUTEMAN WING II. HOWEVER, TO DEVELOP COMPETITION, IT WAS DETERMINED TO SEEK OTHER SOURCES. BUT COMPETITION WAS NOT THE ONLY FACTOR INVOLVED. OUR TECHNICAL PERSONNEL DESIRED AN IMPROVED SYSTEM OVER THAT PRODUCED FOR WING I. SPECIFICALLY, EQUIPMENT WAS DESIRED WHICH WOULD INCREASE THE MEAN TIME BETWEEN FAILURES (MTFB) FROM 14,000 HOURS TO 22,000 HOURS, TERMED "RELIABILITY UPGRADING.' FURTHER, CONFIGURATION CONTROL CONSIDERATIONS DICTATED THOROUGH TECHNICAL EVALUATION OF BIDS AND CAREFUL SOURCE SELECTION. IT FOLLOWS THAT TWO-STEP FORMAL ADVERTISING PURSUANT TOASPR 2-501 ET SEQ. WAS AN EXPEDITIOUS AND PROPER CHOICE OF PROCUREMENT PROCEDURE. THE DIFFICULTY AROSE FROM KECO'S APPARENT MISUNDERSTANDING OF THE OVERALL AIR FORCE OBJECTIVES TO EFFECT MAXIMUM COMPETITION IN THIS VITAL PROCUREMENT, WHILE ACHIEVING SIGNIFICANT QUALITATIVE PRODUCT IMPROVEMENT UNDER ATTENDANT CONFIGURATION CONTROL, ALL TO BE ACCOMPLISHED WITHIN A RIGID TIME SCHEDULE.'

ALSO, IN A REPORT DATED MAY 31, 1962, THE DEPUTY CHIEF, PROCUREMENT AND PRODUCTION OFFICE, EXPLAINED AS FOLLOWS:

"THE TECHNICAL SYMPOSIUM CONDUCTED BY THE GOVERNMENT FOR CONTRACTORS SUBSEQUENT TO THE DISTRIBUTION OF THE INVITATION TO BID WAS AN HONEST EFFORT TO EDUCATE AND DISSEMINATE INFORMATION IN REGARD TO THE PROJECT. IT WAS NOT THE INTENT OF THE SYMPOSIUM TO CONVEY THE IMPRESSION THAT ADVERTISEMENT WAS A MERE FORMALITY OR THAT THE PRESENT CONTRACTOR'S SELECTION WAS A FOREGONE CONCLUSION.

"THE IFB CONTAINED SUFFICIENT INFORMATION FOR A PROPER RESPONSE. THE REQUIREMENTS OF THE TECHNICAL PROPOSAL WERE CLEAR AS TO DRAWINGS, TESTS AND DATA. THE RESPONSE OF THE CONTESTANT WAS INADEQUATE AND DEFINITELY NOT REASONABLY SUSCEPTIBLE TO BEING MADE ACCEPTABLE. FULL CONSIDERATION AND ATTENTION WAS GIVEN THE CONTESTANT'S PROPOSAL AND THE EVALUATION CRITERIA USED TO REACH A DECISION OF UNACCEPTABILITY WAS THE SAME PREDETERMINED EVALUATION CRITERIA USED FOR ALL THE TECHNICAL PROPOSALS SUBMITTED. A STUDY OF THE TECHNICAL PROPOSAL IN ISSUE LEAVES NO DOUBT THAT IT WOULD REQUIRE AN UNREASONABLE AMOUNT OF TIME AND EFFORT ON THE PART OF THE GOVERNMENT TO BRING THE PROPOSAL TO AN UNREASONABLE AMOUNT OF TIME AND EFFORT ON THE PART OF THE GOVERNMENT TO BRING THE PROPOSAL TO AN ACCEPTABLE STATUS. THE DECISION OF "UNACCEPTABILITY" SHOWS GOOD DISCRETION, SOUND JUDGMENT AND ONE MADE AFTER CAREFUL AND ADEQUATE ATTENTION.'

IN THE TECHNICAL EVALUATION OF THE INITIAL PROPOSALS RECEIVED FROM SEVEN BIDDERS IN EARLY MARCH, 1962, ONLY AMERICAN AIR FILTER COMPANY WAS FOUND TO BE ACCEPTABLE. THE OTHER SIX PROPOSALS, ALL OF WHICH GAVE RISE TO DOUBTS IN VARYING DEGREE AS TO THEIR ABILITY TO MEET THE EXTREMELY CRITICAL PERFORMANCE, INSTALLATION AND RELIABILITY REQUIREMENTS OF THE MINUTEMAN WEAPON SYSTEM, WERE EVALUATED ON A COMMON BASIS AND ON THIS EVALUATION IT WAS CONCLUDED THAT ONLY THE CARRIER PROPOSAL, WHICH RATED HIGHEST OF THE SIX, JUSTIFIED FURTHER CONSIDERATION. IN THIS CONNECTION, DR. MCMILLAN, ASSISTANT SECRETARY, AIR FORCE RESEARCH AND DEVELOPMENT, IN A REPORT DATED MAY 21, 1962, STATED AS FOLLOWS:

"WITH THE OBJECTIVES OF COMPLYING WITH OSD SPECIFIC DIRECTION AND IMPROVING THE GOVERNMENT'S POSITION BY INSURING PRICE COMPETITION, AFBSD UNDERTOOK FURTHER ACTION TOWARDS QUALIFYING, IF POSSIBLE, ONE OR MORE OF THE SIX REMAINING PROPOSALS. BASED UPON AN EXTENSIVE REVIEW OF THE PROPOSALS, THE CARRIER AIR CONDITIONING CO., THE CONTRACTOR RATED NUMBER TWO IN THE ORIGINAL EVALUATION, WAS DETERMINED TO BE THE ONLY COMPANY QUALIFIED FOR UPGRADING CONSIDERATION AS A POTENTIAL ADDITIONAL SOURCE. IT WAS DETERMINED THAT CARRIER'S PROPOSAL WAS MARGINAL BUT SUSCEPTIBLE TO UPGRADING BUT THAT ALL OTHERS INCLUDING KECO COULD NOT BE UPGRADED TO THE POINT OF ACCEPTABILITY. CARRIER IS RECOGNIZED TO BE THE LARGEST AND BEST KNOWN COMPANY IN THE AIR CONDITIONING FIELD. NEVERTHELESS, IT REQUIRED APPROXIMATELY SIX WEEKS OF CONCENTRATED EFFORT BY THE AIR FORCE, TWO RESUBMITTALS OF TECHNICAL DATA BY CARRIER AND A SERIES OF CONFERENCES TO UPGRADE THIS COMPANY TO A LEVEL OF ACCEPTABILITY.

"WITH ONLY ONE CONTRACTOR GIVING CLEAR EVIDENCE INITIALLY OF HIS ACCEPTABILITY, THE AIR FORCE WAS FACED IN MID MARCH WITH A CHOICE OF THE BEST WAY TO APPLY THE EFFORT NECESSARY TO MAKE A SECOND SOURCE ACCEPTABLE FOR COMPETITION. IT CHOSE TO APPLY THIS EFFORT TO CARRIER CORPORATION, OVER ANY OF THE OTHER INITIAL BIDDERS, AND IN PARTICULAR OVER KEGO INDUSTRIES, BECAUSE IT WAS FELT THAT EFFORT DEVOTED TO UPGRADING CARRIER, AND TO INQUIRING FURTHER INTO HIS UNDERSTANDING OF THE REQUIREMENTS, WOULD BE MOST LIKELY TO RESULT SUCCESSFULLY, AND SOON, IN MAKING A SECOND BIDDER ACCEPTABLE.

"THE JUDGMENT THAT CARRIER CORPORATION WAS THE SECOND PROPOSER MOST LIKELY TO BE MADE ACCEPTABLE WITH REASONABLE EFFORT IN A REASONABLE TIME WAS BASED ON FACTORS BROUGHT OUT IN THE EVALUATION OF THE INITIAL PROPOSALS. CARRIER'S PROPOSAL, THOUGH RATED INFERIOR TO THE AMERICAN AIR FILTER-S, WAS STILL SECOND IN RATING AND THEREFORE, IN PARTICULAR, WAS SUPERIOR TO KEGO-S. THIS IN ITSELF INDICATES CARRIER'S CLOSER APPROACH TO ACCEPTABILITY INITIALLY, AND LEADS DIRECTLY TO THE JUDGMENT IN QUESTION. MOST SIGNIFICANT, HOWEVER, ARE TWO FACTORS WHICH BEAR DIRECTLY ON THE QUESTION, WHETHER THE CONTRACTOR APPEARS CAPABLE OF REPAIRING THE WEAKNESSES EVIDENT IN HIS ORIGINAL PROPOSAL AND CAPABLE OF ACHIEVING IN HIS ORIGINAL PROPOSAL AND CAPABLE OF ACHIEVING ULTIMATE ACCEPTANCE AS A BIDDER. THESE FACTORS ARE THE CONTRACTOR'S PREVIOUS EXPERIENCE WITH WORK OF SIMILAR DIFFICULTY AND COMPLEXITY, AND THE SIZE OF THE ENGINEERING STAFF HE HAS AVAILABLE TO APPLY TO THE TASK, AND IN PARTICULAR TO APPLY TO THE PROBLEMS ON WHICH HE HAS REVEALED SIGNIFICANT WEAKNESSES.

"THE CONTRACTOR'S PREVIOUS RELIABILITY AND FIELD INSTALLATION EXPERIENCE, AND THE SIZE OF HIS ENGINEERING STAFF, ARE MATTERS OF FACT, NOT OF JUDGMENT. PREVIOUS EXPERIENCE WAS RATED EXPLICITLY IN THE INITIAL EVALUATION OF PROPOSALS, AND KEGO INDUSTRIES WAS RATED SHARPLY INFERIOR TO CARRIER CORP. ON THIS ITEM; THIS COMPARATIVE RATING IS FULLY IN ACCORD WITH THE FACTS. IT IS, FURTHERMORE, FACT THAT CARRIER CORPORATION'S ENGINEERING STAFF IS MANY TIMES LARGER THAN KECO-S. THIS FACT WAS ALSO CONSIDERED IN EVALUATING THE POTENTIAL ACCEPTABILITY OF CONTRACTORS OTHER THAN AMERICAN AIR FILTER CO.'

WE CONSISTENTLY HAVE TAKEN THE POSITION THAT THE DETERMINATION OF THE RESPONSIBILITY OR CAPABILITY OF BIDDERS IS PRIMARILY THE FUNCTION OF THE ADMINISTRATIVE OFFICIALS OF THE PROCURING AGENCIES OF THE GOVERNMENT, AND THAT THIS OFFICE WILL NOT SUBSTITUTE ITS JUDGMENT FOR THAT OF THE CONTRACTING AGENCY UNLESS THERE IS CLEAR AND CONVINCING EVIDENCE THAT THE AGENCY OPINION IS IN ERROR. WE BELIEVE THAT THE SAME PRINCIPLE IS APPLICABLE TO DETERMINATIONS AS TO THE MERITS OF PROPOSALS RECEIVED IN THE FIRST STAGE OF TWO-STEP PROCUREMENTS SUCH AS THE ONE HERE IN QUESTION, WHERE THERE ARE INVOLVED SUCH FACTORS AS EXPERIENCE, TECHNICAL QUALIFICATIONS AND CAPABILITIES OF PERSONNEL, AND ADEQUACY OF THE BIDDERS' COMPREHENSION OF THE PROBLEMS PRESENTED AS EVIDENCED BY THEIR PROPOSALS. THE CONTRACTING AUTHORITIES ARE NECESSARILY VESTED WITH A CERTAIN AMOUNT OF DISCRETION IN SUCH MATTERS, AND IN THE ABSENCE OF A SHOWING OF FAVORITISM, BAD FAITH OR A COMPLETE DISREGARD OF THE FACTS WE WOULD NOT BE WARRANTED IN HOLDING THAT THE ADMINISTRATIVE ACTION WAS ILLEGAL. IN THE INSTANT CASE THE RECORDS INDICATE THAT THE CONTRACTING OFFICIALS EXERCISED METICULOUS CARE IN ARRIVING AT THE DETERMINATIONS FINALLY REACHED, AND WE FIND THEREIN NO BASIS FOR CHARGING THEM WITH FAVORITISM, OR ARBITRARY OR CAPRICIOUS ACTION. MOREOVER, THE RECORD FURTHER INDICATES THAT SUCH DETERMINATIONS WERE CAREFULLY REVIEWED AND PASSED UPON BY THE SECRETARY OF THE AIR FORCE, WHO CONCLUDED THAT SUCH ACTION WAS IN THE BEST INTEREST OF THE UNITED STATES.

IN THE LIGHT OF THE FOREGOING, THEREFORE, IT MUST BE CONCLUDED THAT WE WOULD NOT BE JUSTIFIED IN HOLDING THAT THE ADMINISTRATIVE ACTION WAS ILLEGAL OR IMPROPER.

WITH RESPECT TO YOUR SECOND COMPLAINT AGAINST THE CRITERIA ESTABLISHED FOR ELIGIBILITY FOR PARTICIPATION IN THE TWO-STEP PROCUREMENT OF ENVIRONMENTAL CONTROL SYSTEMS FOR MINUTEMAN WINGS III AND IV, WE HAVE BEEN INFORMED BY THE DEPUTY FOR PROCUREMENT MANAGEMENT, DEPARTMENT OF THE AIR FORCE, THAT NOTWITHSTANDING THE ALLEGATION OF SIMPLICITY MADE BY YOUR COMPANY IN ITS LETTER OF JUNE 20, 1962, REGARDING THE PROCUREMENT OF ENVIRONMENTAL CONTROL EQUIPMENT FOR MINUTEMAN WINGS III AND IV, THIS IS A COMPLEX REQUIREMENT IN WHICH THE AIR FORCE IS SEEKING DESIGN, DEVELOPMENT, AND MANAGEMENT CAPABILITY TO ASSURE ACHIEVEMENT OF THE REQUIRED OBJECTIVE WITHIN THE STATED TIME PERIOD AT REASONABLE COST.

IT IS FURTHER REPORTED THAT PROPOSALS RECEIVED UNDER THIS SOLICITATION WILL BE SUBJECTED TO FORMAL SOURCE SELECTION PROCEDURES BY AN EVALUATION BOARD OF EXPERT PERSONNEL AND IN THE EVALUATION CONSIDERATION WILL BE GIVEN TO SUCH THINGS AS THE FIRM'S UNDERSTANDING OF THE TECHNICAL PROBLEMS FACED, THE DEVELOPMENT PLAN PRESENTED IN THE PROPOSAL, THE REALISM OF COST ESTIMATES INCLUDED THEREIN, THE ORGANIZATION AND FACILITIES OF THE CONTRACTOR WHICH HE REPRESENTS IN HIS PROPOSAL TO BE ALLOCATED TO THE TASK, THE NUMBER AND EXPERIENCE OF THE PEOPLE TO BE USED ON THE PROJECT AND THE FIRM'S BACKGROUND AND EXPERIENCE IN THIS FIELD.

WE HAVE BEEN INFORMED THAT AT THE TIME OF YOUR COMPLAINT THE BALLISTIC SYSTEMS DIVISION WAS IN THE PROCESS OF DEVISING FIRM CRITERIA FOR USE BY THE SOURCE SELECTION BOARD IN THE SCREENING OF PROSPECTIVE SUPPLIERS FOR THE FURNISHING OF ENVIRONMENTAL CONTROL EQUIPMENT FOR MINUTEMAN WINGS III AND IV, AND THAT THE CRITERIA PRESENTED IN YOUR LETTER AND IMPLIED THEREIN AS FIRM FOR THE PROSPECTIVE PROCUREMENT WERE CONTAINED ONLY IN A PRELIMINARY DRAFT. THE AGENCY ADVISED THAT THIS IS A NORMAL COURSE OF ACTION IN ITS PROCUREMENT OPERATIONS AND THAT THE DRAFT CONSTITUTED ONLY AN INITIAL EFFORT TOWARD ARRIVING AT FIRM OBJECTIVE CRITERIA. IT IS STATED THAT SUCH DRAFTS ARE SUBJECTED TO REVIEW AND REVISION AT VARIOUS MANAGEMENT LEVELS TO ASSURE THE ATTAINMENT OF THE MANY OBJECTIVES INVOLVED IN COMPLEX PROCUREMENTS SUCH AS THIS, INCLUDING SUPPORT OF OVERALL DEPARTMENT OF THE AIR FORCE POLICY IN REGARD TO THE SMALL BUSINESS PROGRAM, AND IT IS FURTHER EXPLAINED THAT THE ULTIMATE CRITERIA PLANNED FOR USE IN SCREENING PROSPECTIVE RECIPIENTS OF THE REQUEST FOR PROPOSALS FOR THIS PROCUREMENT WERE NOT INTENDED TO PRECLUDE A SMALL BUSINESS FIRM FROM QUALIFYING TO RECEIVE A REQUEST FOR PROPOSAL. AND, IN CONCLUSION, WE ARE INFORMED THAT THE REQUEST FOR PROPOSAL REGARDING THIS PROCUREMENT HAS NOW BEEN RELEASED, AND AMONG THE SIXTEEN FIRMS SELECTED FOR RECEIPT THEREOF ARE FIVE SMALL BUSINESS FIRMS, INCLUDING YOUR COMPANY. ACCORDINGLY, IN VIEW OF THIS EXPLANATION, WE PERCEIVE OF NO ACTION TO BE REQUIRED BY THIS OFFICE AT THE PRESENT TIME.