B-154715, MAR. 24, 1965

B-154715: Mar 24, 1965

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INC.: REFERENCE IS MADE TO YOUR LETTERS OF JULY 13. A PRE-BID CONFERENCE WAS CONDUCTED AT TRAVIS AFB ON APRIL 21 AND 22. AFTER WHICH THE REQUEST FOR QUOTATIONS WAS AMENDED ON MAY 4 TO INCORPORATE SUGGESTED CHANGES. TOGETHER WITH A STATEMENT OF THE NUMBER OF MANHOURS UPON WHICH THE QUOTATIONS WERE BASED PLUS DETAILED BREAKOUTS OF THE HOURLY RATES AND MANHOURS SPECIFIED. FIXED HOURLY RATES WERE REQUIRED TO BE QUOTED FOR CERTAIN OTHER ITEMS OF REPAIR NOT COVERED IN THE 23 ENUMERATED. 45 AIRCRAFT WERE USED AS THE BASE QUANTITY. SIX OFFERS WERE RECEIVED BY MAY 18. THE HOUR ESTIMATES AND TOTAL PRICE OF EACH OFFEROR WERE AS FOLLOWS: CHART U.S. THE CONTRACTING OFFICER WAS CONCERNED THAT THE OFFERS OF EAGLE.

B-154715, MAR. 24, 1965

TO MANEY AIRCRAFT PARTS, INC.:

REFERENCE IS MADE TO YOUR LETTERS OF JULY 13, JULY 19 AND OCTOBER 8, 1964, PROTESTING AGAINST THE AWARDING OF A CONTRACT TO ANYONE OTHER THAN YOUR FIRM UNDER REQUEST FOR QUOTATIONS NO. 09-603-64-2853, ISSUED APRIL 9, 1964, FOR IRAN (INSPECT AND REPAIR AS NECESSARY) AND MODIFICATION WORK ON C-124 AIRCRAFT AT TRAVIS AIR FORCE BASE, CALIFORNIA.

A PRE-BID CONFERENCE WAS CONDUCTED AT TRAVIS AFB ON APRIL 21 AND 22, 1964, TO REVIEW THE WORK REQUIREMENTS OF THE PROGRAM WITH PROSPECTIVE CONTRACTORS, AFTER WHICH THE REQUEST FOR QUOTATIONS WAS AMENDED ON MAY 4 TO INCORPORATE SUGGESTED CHANGES. THE SOLICITATION REQUIRED THE SUBMISSION OF UNIT PRICES FOR 23 SPECIFIED ITEMS OR OPERATIONS UNDER EACH QUANTITY INCREMENT BASED UPON A MINIMUM OF 34 TO A MAXIMUM OF 68 AIRCRAFT, TOGETHER WITH A STATEMENT OF THE NUMBER OF MANHOURS UPON WHICH THE QUOTATIONS WERE BASED PLUS DETAILED BREAKOUTS OF THE HOURLY RATES AND MANHOURS SPECIFIED. IN ADDITION, FIXED HOURLY RATES WERE REQUIRED TO BE QUOTED FOR CERTAIN OTHER ITEMS OF REPAIR NOT COVERED IN THE 23 ENUMERATED. FOR COMPARATIVE EVALUATION OF THE OFFERS, 45 AIRCRAFT WERE USED AS THE BASE QUANTITY, AND FOR THE COMPUTATION OF EACH OFFEROR'S TOTAL PRICE THE CONTRACTING OFFICER USED A COMPOSITE OF ESTIMATED HOURS REQUIRED FOR THE VARIOUS ITEMS OF WORK TO BE DONE TO ARRIVE AT A TOTAL PRICE FOR THE OFFEROR.

SIX OFFERS WERE RECEIVED BY MAY 18, 1964, THE CLOSING DATE FOR PROPOSALS. USING THE FOREGOING PROCEDURE, THE HOUR ESTIMATES AND TOTAL PRICE OF EACH OFFEROR WERE AS FOLLOWS:

CHART

U.S. EAGLE CO. 3780 HOURS $ 850,665

MANEY AIRCRAFT PARTS, INC. 4226 HOURS 863,506

DYNALECTRON CORP. 4198 HOURS 1,021.256

(INTERNATIONAL AIR SERVICES,

INC. (WITHDREW PROPOSAL) 5667 HOURS 1,326,485)

LOCKHEED AIRCRAFT SERVICES CO. 7196 HOURS 1,619,315

LEAR SIEGLER, INC. 7739 HOURS 1,852,603

IN VIEW OF A GOVERNMENT ESTIMATE THAT 6055 HOURS WOULD BE REQUIRED TO ACCOMPLISH THE IRAN WORK FOR EACH PLANE IN ACCORDANCE WITH THE SPECIFICATIONS, THE CONTRACTING OFFICER WAS CONCERNED THAT THE OFFERS OF EAGLE, MANEY AND DYNALECTRON WERE SO LOW AS TO INDICATE A LACK OF UNDERSTANDING OF THE WORK REQUIREMENTS. CONFERENCES WERE THEREAFTER CONDUCTED WITH EACH OF THE THREE LOW OFFERORS DURING WHICH ALL REQUIREMENTS WERE REVIEWED IN DETAIL AND THE OFFERORS WERE GIVEN AN OPPORTUNITY TO SHOW THAT THEY COULD PERFORM THE WORK IN THE AMOUNT OF TIME ESTIMATED OR TO AMEND THEIR PROPOSALS. UPON COMPLETION OF SUCH CONFERENCES THE CONTRACTING OFFICER STILL CONSIDERED THE PROPOSALS OF THE THREE LOW OFFERORS TO CONTAIN UNREALISTIC MANHOURS AND CONCLUDED THAT THERE WAS NO REASONABLE BASIS TO EXPECT THAT THE DELIVERY SCHEDULE WOULD BE MET BY THOSE FIRMS. SINCE THE AIRCRAFT WERE NEEDED FOR LOGISTIC SUPPORT FOR PACIFIC OPERATIONS INCLUDING VIETNAM AND IT WAS CONSIDERED ESSENTIAL THAT THE RESULTANT MAINTENANCE CONTRACTOR BE HIGHLY RESPONSIBLE AND ABLE TO MEET THE DELIVERY SCHEDULES WITH GOOD QUALITY WORK, THE CONTRACTING OFFICER CONDUCTED NEGOTIATIONS WITH THE FOURTH AND FIFTH LOW OFFERORS AS WELL AS FURTHER NEGOTIATIONS WITH DYNALECTRON, THE THIRD LOW OFFEROR. THE CONFERENCE RESULTS AND THE RESULTS OF ALL EVALUATIONS, ALONG WITH A RECOMMENDATION NOT TO CONSIDER THE THREE LOW OFFERORS FOR AWARD, WERE FORWARDED THROUGH ADMINISTRATIVE CHANNELS, AND FURTHER DISCUSSIONS WITH EAGLE AND MANEY REPRESENTATIVES WERE HELD BY PERSONNEL OF THE OFFICE OF THE ASSISTANT SECRETARY OF DEFENSE. THEREAFTER THE MATTER WAS REFERRED BACK TO THE CONTRACTING OFFICER FOR OBTAINING FACILITY CAPABILITY SURVEYS TO ASCERTAIN WHETHER THE LOW OFFERORS MET THE REQUIREMENTS OF A RESPONSIBLE PROSPECTIVE CONTRACTOR FOR THE AWARD AS SET FORTH IN SECTION I, PART 9 OF THE ARMED SERVICES PROCUREMENT REGULATION.

THE FACILITY CAPABILITY REPORTS ON THE THREE LOW OFFERORS WERE QUALIFIED IN CRITICAL AREAS. FOR MANEY THE FOLLOWING NEGATIVE FACTORS INDICATING NONRESPONSIBILITY WERE LISTED, AMONG OTHERS, AS A BASIS FOR REJECTING ITS PROPOSAL:

"A. PROPOSAL IS CONSIDERED IMPROVIDENT AND NONRESPONSIVE IN THAT MANHOURS PROPOSED BY MANEY IS APPROXIMATELY 2000 MANHOURS PER AIRCRAFT LESS THAN THE GOVERNMENT'S ESTIMATE.

"B. CONTRACTOR HAS NO AIRCRAFT MAINTENANCE EXPERIENCE.

"C. CONTRACTOR'S PREVIOUS EXPERIENCE IS LIMITED TO MANUFACTURE OF PARTS AND A SMALL AMOUNT OF COMPONENT OVERHAUL WORK.

"D. CONTRACTOR FAILED TO DEMONSTRATE AFFIRMATIVELY A CAPABILITY TO MEET THE REQUIREMENTS OF THE PROPOSED CONTRACT.

"E. CONTRACTOR'S PAST PERFORMANCE ON AIR FORCE CONTRACTS HAS NOT BEEN SATISFACTORY.

"F. CONTRACTOR FAILED TO REFLECT POSITIVE ATTITUDE TOWARD MEETING THEIR COMMITMENTS FOR COMPLETING CONTRACTS ON TIME.'

CONCERNING FACTOR "E" IT IS REPORTED THAT OF THE 27 DELAYS ON WHICH DELINQUENCY REPORTS HAD BEEN ISSUED DURING THE PERIOD JANUARY 2 TO JULY 22, 1964, ON CONTRACTS HELD BY YOUR FIRM, 22 DELAYS WERE ATTRIBUTABLE TO MANAGEMENT. IN CONNECTION WITH FACTOR "F" IT WAS FOUND THAT THE RECORD OF YOUR FIRM'S PAST PERFORMANCE CONTAINS A LONG LIST OF DELINQUENCIES AND FOR THE PURPOSE OF CURING SUCH DELINQUENCIES NEW DELIVERY SCHEDULES WERE BOUGHT IN A ROUTINE MANNER AS A NORMAL BUSINESS PRACTICE. SUCH A PRACTICE WAS SAID TO BE CLEARLY NOT ACCEPTABLE IN PROGRAMS OF THE NATURE HERE INVOLVED WHERE THE TIMELY REPAIR OF THE AIRCRAFT IS ESSENTIAL TO THE NATIONAL DEFENSE INTERESTS.

THE CONTRACTING OFFICER CONSIDERED THAT THE SAME GENERAL CONDITIONS EXISTED IN SOME DEGREE WITH RESPECT TO THE PROPOSALS OF EAGLE AND DYNALECTRON. UPON REVIEW, HOWEVER, SUCH NEGATIVE FINDINGS WERE DETERMINED NOT ACCEPTABLE WITH RESPECT TO DYNALECTRON. BY COMPARISON WITH EAGLE'S AND MANEY'S LACK OF EXPERIENCE IN THE WORK REQUIREMENTS, DYNALECTRON WAS FOUND TO HAVE TEN YEARS EXPERIENCE ON VARIOUS AIRCRAFT REPAIR AND MODIFICATION WORK INCLUDING IRAN ON C-124 AIRCRAFT. IN VIEW OF THIS EXPERIENCE, WHICH WEIGHED HEAVILY IN THE CONSIDERATIONS, AND SINCE THE FIRM THEN HAD A CURRENT RECORD OF PERFORMANCE ON A CONTRACT FOR IRAN WORK AT LAKE CHARLES, LOUISIANA, FURTHER NEGOTIATIONS AND DISCUSSIONS WERE CONDUCTED WITH DYNALECTRON AFTER WHICH THE AIR FORCE BECAME CONVINCED OF THE FIRM'S RESPONSIBILITY AND CAPABILITY TO PERFORM THE WORK IN A SATISFACTORY MANNER. BASED ON SUCH FURTHER EVALUATION AND IN ACCORDANCE WITH THE PROVISIONS OF ASPR 1-904.1 THE CONTRACTING OFFICER THEN DETERMINED DYNALECTRON TO BE A RESPONSIBLE CONTRACTOR AND AWARD WAS MADE TO THAT FIRM.

WE HAVE CONSISTENTLY HELD THAT THE DETERMINATION OF WHETHER A PROSPECTIVE GOVERNMENT CONTRACTOR MEETS THE STATUTORY REQUIREMENT OF A RESPONSIBLE BIDDER IS PRIMARILY A FUNCTION OF THE CONTRACTING AGENCY AND NOT OF THE GENERAL ACCOUNTING OFFICE, AND THAT THE ADMINISTRATIVE DETERMINATION IS BINDING ON OUR OFFICE IN THE ABSENCE OF ANY SHOWING OF BAD FAITH OR LACK OF A REASONABLE BASIS FOR THE DETERMINATION MADE. 33 COMP. GEN. 549; 37 ID. 430; 38 ID. 131; 39 ID. 705. HERE THE DEPARTMENT FOUND AFTER A THOROUGH INVESTIGATION OF YOUR FIRM'S BACKGROUND THAT THE INFORMATION DEVELOPED NOT ONLY FAILED TO SHOW EXPERIENCE QUALIFICATIONS IN IRAN WORK SUFFICIENT TO JUSTIFY AN AFFIRMATIVE DETERMINATION OF RESPONSIBILITY, BUT REFLECTED AN UNSATISFACTORY RECORD OF MEETING DELIVERY SCHEDULES ON PAST AND CURRENT GOVERNMENT CONTRACTS AWARDED TO YOUR FIRM. THE LATTER FINDING IS CLEARLY FOR CONSIDERATION UNDER SECTION 1-903.1 (III) OF THE ARMED SERVICES PROCUREMENT REGULATION WHICH PROVIDES FOR SPECIAL CONSIDERATION OF DELINQUENCIES IN CURRENT CONTRACT PERFORMANCE IN DETERMINING RESPONSIBLE PROSPECTIVE CONTRACTORS.

WHILE IT IS NOTED THAT YOU CERTIFIED YOUR FIRM AS A SMALL BUSINESS CONCERN THE AIR FORCE DID NOT CONSIDER IT NECESSARY TO REFER THE QUESTION OF YOUR RESPONSIBILITY TO THE SMALL BUSINESS ADMINISTRATION FOR ISSUANCE OF A CERTIFICATE OF COMPETENCY IN VIEW OF THE PROVISIONS CONTAINED IN ASPR 1-705.4. SUBPARAGRAPH (B) (III) THEREOF PROVIDES THAT SUCH A PROCEDURE DOES NOT APPLY WHERE A SMALL BUSINESS CONCERN IS FOUND NONRESPONSIBLE FOR A REASON OTHER THAN LACK OF CAPACITY OR CREDIT. WHERE IT IS DETERMINED THAT A CONCERN DOES NOT MEET THE REQUIREMENTS OF ASPR 1-903.1 (III) AS TO A SATISFACTORY RECORD OF PERFORMANCE, THE PROCEDURE IS MANDATORY ONLY IF THE UNSATISFACTORY RECORD OF PERFORMANCE WAS DUE SOLELY TO INADEQUATE CAPACITY OR CREDIT. CONCERNING THE APPLICATION OF SUCH PROVISIONS TO THE MATTER AT HAND THE DEPARTMENT OF THE AIR FORCE REPORTS AS FOLLOWS:

"WE CONSIDER THE PROVISIONS OF APSR 1-705.4 (III) TO BE SIGNIFICANT WITH RESPECT TO OUR DETERMINATION NOT TO REFER THE CASE TO THE SBA FOR CONSIDERATION OF A COC. THE FILE DISCLOSES THAT THE CONTRACTOR'S PAST PERFORMANCE AS TO DELIVERY FAILS TO REFLECT POSITIVE PRACTICES IN MANEY BUSINESS OPERATIONS FOR MEETING DELIVERY SCHEDULE COMMITMENTS. A LONG RECORD OF DELINQUENCIES BY MANEY IS CONTAINED IN THE ATTACHED FILE. THE MEETINGS WITH THE CONTRACTOR IN CONNECTION WITH THE FCR SURVEY, THE REASONS GIVEN BY MANEY FOR THE DELINQUENCIES ARE NOT FOUNDED IN THE ELEMENTS OF CAPACITY OR CREDIT, BUT RATHER RELATE TO POOR BUSINESS PRACTICES. AS THE FILE DISCLOSES, MANEY BUYS NEW DELIVERY SCHEDULES AS A MEANS OF CURING DELINQUENCIES IN A ROUTINE MANNER AND AS A NORMAL BUSINESS PRACTICE. OUR SUBMISSION OF 19 NOVEMBER 1964 DESCRIBED IN DETAIL WHY PRACTICES OF THIS NATURE ARE UNACCEPTABLE IN OUR AIRCRAFT IRAN PROGRAM.'

SEE IN THIS CONNECTION 37 COMP. GEN. 798 WHEREIN WE HELD THAT WHEREA BIDDER IS FOUND NOT TO BE RESPONSIBLE BECAUSE OF PRIOR UNSATISFACTORY CONTRACT PERFORMANCE WHICH THE CONTRACTING OFFICER PROPERLY DOES NOT ATTRIBUTE TO LACK OF CAPACITY OR CREDIT, THE QUESTION OF COMPETENCY NEED NOT BE SUBMITTED TO THE SMALL BUSINESS ADMINISTRATION.

SINCE THE REPORTED FACTS AND CIRCUMSTANCES OF THIS CASE DO NOT REFLECT ANY ARBITRARY OR UNAUTHORIZED ACTION BY THE AIR FORCE EITHER AS TO THE DETERMINATION OF MANEY'S (AND EAGLE-S) NONRESPONSIBILITY OR AS TO THE AFFIRMATIVE DETERMINATION THAT DYNALECTRON, THE NEXT LOW OFFEROR, IS RESPONSIBLE WITHIN THE MEANING OF THE PERTINENT REGULATIONS, AND SINCE THOSE DETERMINATIONS APPEAR SUPPORTED BY SUBSTANTIAL EVIDENCE AFTER THOROUGH CONSIDERATION OF THE QUALIFICATIONS OF THE OFFERORS CONCERNED, WE SEE NO BASIS ON WHICH WE MAY OBJECT TO SUCH ADMINISTRATIVE FINDINGS.