B-162876, JUN. 6, 1968

B-162876: Jun 6, 1968

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SECRETARY: REFERENCE IS MADE TO A LETTER DATED MARCH 21. WHEN A REQUEST FOR AN OPPORTUNITY TO PRESENT A PROPOSAL WAS MADE TO COLONEL DANIEL F. CONGRESSMAN CRAIG HOSMER WAS ADVISED BY NORMAN S. THAT THERE WAS NO PRESENT AIR FORCE REQUIREMENT FOR C-119 AIRCRAFT JET PODS. A PROGRAM TO CONVERT C-119 AIRCRAFT TO GUNSHIP CONFIGURATION WAS PLANNED WITH FISCAL 1968 FUNDS TO BE PERFORMED BY FAIRCHILD HILLER'S AIRCRAFT SERVICE DIVISION. THIS PROGRAM WAS TO BE FOLLOWED. STEWARD-DAVIS WAS ADVISED BY SENATOR ALBERT GORE OF ASSURANCE RECEIVED FROM AIR FORCE OFFICIALS THAT ALTHOUGH AN EXPERIMENTAL AC-119K HAD BEEN DEMONSTRATED IN CONNECTION WITH THE MILITARY ASSISTANCE PROGRAM (MAP). NO POSITIVE PROGRAM WAS PLANNED.

B-162876, JUN. 6, 1968

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED MARCH 21, 1968, AFSPPCA, WITH ENCLOSURES, FURNISHING A REPORT CONCERNING THE PROTEST OF STEWARD DAVIS, INCORPORATED, AGAINST AWARD OF CONTRACT NO. F09603-68-C-1633, WHICH INCLUDED THE PROCUREMENT OF JET PODS FOR INSTALLATION ON C-119 AIRCRAFT.

THE RECORD BEFORE OUR OFFICE INDICATES AN INTEREST BY STEWARD-DAVIS IN PODDING JETS FOR C-119 AIRCRAFT AS EARLY AS DECEMBER 12, 1966, WHEN A REQUEST FOR AN OPPORTUNITY TO PRESENT A PROPOSAL WAS MADE TO COLONEL DANIEL F. SHARP. IN RESPONSE TO AN INQUIRY ON BEHALF OF STEWARD DAVIS, CONGRESSMAN CRAIG HOSMER WAS ADVISED BY NORMAN S. PAUL, ACTING SECRETARY OF THE AIR FORCE, BY LETTER OF JANUARY 10, 1967, THAT THERE WAS NO PRESENT AIR FORCE REQUIREMENT FOR C-119 AIRCRAFT JET PODS; HOWEVER, ARRANGEMENTS HAD BEEN MADE FOR A STEWARD-DAVIS PRESENTATION AGAINST A POSSIBLE FUTURE REQUIREMENT. THE INDUSTRY MAGAZINE, AVIATION WEEK AND SPACE TECHNOLOGY, THEN REPORTED IN ITS AUGUST 14, 1967, ISSUE THAT, PROBABLY FOR SOUTHEAST ASIA SERVICE, A PROGRAM TO CONVERT C-119 AIRCRAFT TO GUNSHIP CONFIGURATION WAS PLANNED WITH FISCAL 1968 FUNDS TO BE PERFORMED BY FAIRCHILD HILLER'S AIRCRAFT SERVICE DIVISION, ST. AUGUSTINE, FLORIDA; THIS PROGRAM WAS TO BE FOLLOWED, TENTATIVELY, WITH AN IMPROVED AC-119K MODEL FITTED WITH TWO AUXILIARY PODDED GENERAL ELECTRIC J85-17 ENGINES. SUBSEQUENT TO PUBLICATION OF THAT ARTICLE, STEWARD-DAVIS MADE KNOWN TO VARIOUS MEMBERS OF CONGRESS AND OUR OFFICE THEIR FEAR THAT PROCUREMENT OF JET PODS FOR C- 119 AIRCRAFT WOULD TAKE PLACE WITHOUT COMPETITIVE BIDDING. ON NOVEMBER 10, 1967, STEWARD-DAVIS WAS ADVISED BY SENATOR ALBERT GORE OF ASSURANCE RECEIVED FROM AIR FORCE OFFICIALS THAT ALTHOUGH AN EXPERIMENTAL AC-119K HAD BEEN DEMONSTRATED IN CONNECTION WITH THE MILITARY ASSISTANCE PROGRAM (MAP), NO POSITIVE PROGRAM WAS PLANNED, BUT IF ANY SUBSTANTIAL PROCUREMENT TOOK PLACE COMPETITIVE BIDS WOULD BE OBTAINED. ON DECEMBER 7, 1967, HAROLD BROWN, SECRETARY OF THE AIR FORCE, ADVISED CONGRESSMAN HOSMER THAT THE FEASIBILITY OF AUGMENTING C 119 AIRCRAFT WITH JET PODS HAD BEEN STUDIED; HOWEVER, THE AVAILABILITY OF C-119 AIRCRAFT FOR MAP (A PREREQUISITE TO MODIFICATION) DID NOT MATERIALIZE BECAUSE THE AIRCRAFT HAD NOT BEEN PHASED OUT OF THE AIR FORCE. SECRETARY BROWN FURTHER ADVISED THAT WHILE SOME CONSIDERATION WAS GIVEN TO THE MODIFICATION OF A LIMITED NUMBER OF C-119 AIRCRAFT FOR OUR FORCES AND ONE AIRCRAFT WAS MODIFIED FOR EVALUATION AND DEMONSTRATION PURPOSES BY FAIRCHILD HILLER, THE AIR FORCE HAD NO CURRENTLY APPROVED MODIFICATION PROGRAM TO UTILIZE THE C-119 AIRCRAFT WITH JET PODS INSTALLED. IT WAS RECOGNIZED, HOWEVER, THAT SUCH A PROGRAM MIGHT BE UNDERTAKEN IN THE FUTURE. THIS INFORMATION WAS ALSO FURNISHED SENATOR THOMAS H. KUCHEL; CONGRESSMAN JAMES C. CORMAN, CHAIRMAN, PROCUREMENT SUBCOMMITTEE, SELECT COMMITTEE ON SMALL BUSINESS, HOUSE OF REPRESENTATIVES; AND CONGRESSMAN CHET HOLIFIED, CHAIRMAN, MILITARY OPERATIONS SUBCOMMITTEE, GOVERNMENT OPERATIONS COMMITTEE, HOUSE OF REPRESENTATIVES. THE SAME ADVICE WAS GIVEN THIS OFFICE ON DECEMBER 19, 1967, AND WAS PASSED ON BY OUR LETTERS OF DECEMBER 29, 1967, TO STEWARD- DAVIS AND SENATOR GEORGE MURPHY, WHO HAD EXPRESSED AN INTEREST.

DURING THE MONTH OF JANUARY 1968, CONSIDERABLE CORRESPONDENCE TOOK PLACE BETWEEN STEWARD-DAVIS AND THE AIR FORCE IN WHICH THE FORMER REQUESTED TO BE LISTED AS A SOURCE AND TO BE ALLOWED TO BRIEF AIR FORCE OFFICIALS ON THEIR PRODUCT, WHILE THE LATTER STATED THAT STEWARD DAVIS WAS SOURCE LISTED AND ALTHOUGH FAIRCHILD HILLER HAD A CONTRACT FOR A TEST PROTOTYPE, THERE WAS THEN NO REQUIREMENT FOR A PRODUCTION MODEL, SO NO BRIEFING WAS REQUIRED. ON JANUARY 31, 1968, COLONEL W. S. ROBINSON, DEPUTY DIRECTOR, DIRECTORATE, PROCUREMENT POLICY, ADVISED STEWARD-DAVIS THAT THERE WAS NO CURRENTLY APPROVED MODIFICATION PROGRAM TO INSTALL JET PODS ON THE C-119 BUT IF SUCH A REQUIREMENT SHOULD DEVELOP AND IF THE DECISION WAS MADE TO SOLICIT COMPETITIVE BIDS OR PROPOSALS, STEWARD-DAVIS WAS SOURCE LISTED AND WOULD BE AFFORDED AN OPPORTUNITY TO PARTICIPATE. ON FEBRUARY 2, 1968, AIR FORCE HEADQUARTERS ADVISED STEWARD-DAVIS THAT ANY DECISION TO AUGMENT C- 119 AIRCRAFT WITH JET PODS WOULD BE MADE BY AIR FORCE LOGISTICS COMMAND AND, THEREFORE, NO PRESENTATION TO HEADQUARTERS WAS NECESSARY. BY LETTER DATED FEBRUARY 12, 1968, STEWARD-DAVIS REQUESTED AN OPPORTUNITY TO BRIEF WARNER ROBBINS AIR MATERIEL COMMAND CONCERNING THEIR JET PODS FOR C-119 AIRCRAFT IN VIEW OF INFORMATION THAT THE AIR FORCE WAS PREPARING 15 C-119 GUNSHIPS WITHOUT JET PODS.

ON FEBRUARY 16, 1968, THE CONTRACTING OFFICER DETERMINED THAT THERE WAS AN URGENT NEED TO MODIFY 51 C-119G AIRCRAFT, INCLUDING INSTALLATION IN THE AC-119K AIRCRAFT OF JET PODS, SINCE THESE MODIFIED AIRCRAFT HAD BEEN COMMITTED TO PERFORM A VITAL PART IN OPERATIONS ESSENTIAL TO THE DEFENSE STRUCTURE IN SOUTHEAST ASIA AND THAT DUE TO THE CIRCUMSTANCES, THE PUBLIC EXIGENCY WOULD NOT PERMIT THE DELAY INCIDENT TO FORMAL ADVERTISING AND THAT NEGOTIATION OF A CONTRACT FOR THESE SERVICES WAS AUTHORIZED PURSUANT TO 10 U.S.C. 2304 (A) (2) AS IMPLEMENTED BY ASPR 3-202.2 (VI). THIS PROCUREMENT WAS ASSIGNED A PRIORITY PRECEDENCE RATING OF 1-7 AND THE NEGOTIATION WAS APPROVED BY THE DIRECTOR, PROCUREMENT AND PRODUCTION ON FEBRUARY 16, 1968, WHO, ON THE SAME DATE, ALSO APPROVED NEGOTIATION ON A SOLE SOURCE BASIS WITH FAIRCHILD HILLER BECAUSE ITS PRIOR EXPERIENCE AND PRESENT CONTRACT GAVE IT A THREE MONTH EFFORT ADVANTAGE AND NO OTHER CONTRACTOR COULD MEET THE PRODUCTION SCHEDULE. ON MARCH 5, 1968, STEWARD- DAVIS PROTESTED THIS CONTRACT AWARD WITHOUT COMPETITIVE BIDDING IN LETTERS TO THE AIR FORCE AND OUR OFFICE.

SUPPLIES AND SERVICES FOR THE GOVERNMENT ARE REQUIRED TO BE PROCURED BY FORMAL ADVERTISING WHENEVER THE USE OF SUCH METHOD IS PRACTICABLE AND FEASIBLE. 10 U.S.C. 2304 (A). IN SOME CIRCUMSTANCES, HOWEVER, THE USE OF NEGOTIATION IS AUTHORIZED. THUS 10 U.S.C. 2304 (A) (2) AUTHORIZES NEGOTIATION WHERE THE PUBLIC EXIGENCY WILL NOT PERMIT THE DELAY INCIDENT TO FORMAL ADVERTISING. THAT AUTHORITY WAS INVOKED BY THE CONTRACTING OFFICER IN THIS CASE. ASPR 3-202 LIMITS THE USE OF THE PUBLIC EXIGENCY EXCEPTION TO THOSE CASES WHERE THE GOVERNMENT WOULD BE SERIOUSLY INJURED IF THE SUPPLIES OR SERVICES WERE NOT FURNISHED BY A CERTAIN DATE AND THAT DATE COULD NOT BE ACHIEVED THROUGH FORMAL ADVERTISING. UNDER 10 U.S.C. 2310 (B), THE DETERMINATION TO NEGOTIATE A CONTRACT WHEN A PUBLIC EXIGENCY EXISTS IS FINAL AS A MATTER OF LAW.

WHILE 10 U.S.C. 2304 (G) AND ASPR 3-202.2 REQUIRE THAT EVEN WHERE AUTHORITY EXISTS TO NEGOTIATE PROCUREMENTS, PROPOSALS SHOULD BE SOLICITED FROM THE MAXIMUM NUMBER OF SOURCES CONSISTENT WITH THE NATURE AND REQUIREMENT OF THE SUPPLIES AND SERVICES TO BE PROCURED, THE PUBLIC EXIGENCY EXCEPTION CLOTHES THE CONTRACTING OFFICER WITH A CONSIDERABLE DEGREE OF DISCRETION IN DETERMINING THE EXTENT OF NEGOTIATION CONSISTENT WITH THE URGENCY OF THE SITUATION. SEE 44 COMP. GEN. 590, 593, WHEREIN WE STATED:

" * * * IN THE ABSENCE OF EVIDENCE INDICATING AN ARBITRARY OR CAPRICIOUS EXERCISE OF THE DISCRETION PERMITTED, OUR OFFICE IS NOT REQUIRED TO OBJECT THERETO.'

WE RECOGNIZE THAT THE AUGMENTATION OF C-119 AIRCRAFT WITH JET PODS REPRESENTS A MINOR PORTION OF THE TOTAL PROCUREMENT AND THAT A CURRENT REAL NEED EXISTS FOR THESE AIRCRAFT IN SOUTHEAST ASIA. FURTHER, WE RECOGNIZE THAT EVEN WITHOUT THE PUBLIC EXIGENCY A GOOD CASE COULD BE MADE FOR NOT BREAKING OUT THE JET PODS AS A SEPARATE PROCUREMENT. THEREFORE, AND IN VIEW OF THE FINALITY OF THE EXIGENCY DETERMINATION WE FIND NO LEGAL OBJECTION TO THE AWARD TO FAIRCHILD HILLER. NEVERTHELESS, WE FIND IT DIFFICULT TO UNDERSTAND THE COURSE OF EVENTS DESCRIBED ABOVE WHICH PRECEDED THAT AWARD. A TRADE MAGAZINE REPORTED A PLANNED PROCUREMENT, THE REASONS THEREFOR, AND THE IDENTITY OF THE CONTRACTOR SOME SIX MONTHS BEFORE RESPONSIBLE OFFICIALS OF THE AIR FORCE, REACTING TO RECENT INCREASES OF ENEMY HOSTILE ACTIONS, RECOGNIZED THE NEED FOR SUCH A PROCUREMENT. IN THE CIRCUMSTANCES WE THINK IT NOT UNREASONABLE TO SUGGEST THE POSSIBLE NEED FOR EXAMINING INTO THE ADEQUACY OF THE DEPARTMENT'S INTERNAL COMMUNICATIONS.

BECAUSE OF THE CONTINUING CONGRESSIONAL INTEREST EXPRESSED IN THIS MATTER, WE ARE FORWARDING COPIES OF THIS LETTER TO THE MILITARY OPERATIONS SUBCOMMITTEE OF THE COMMITTEE ON GOVERNMENT OPERATIONS, HOUSE OF REPRESENTATIVES; THE PROCUREMENT SUBCOMMITTEE, SELECT COMMITTEE ON SMALL BUSINESS, HOUSE OF REPRESENTATIVES; AND TO THE SEVERAL MEMBERS OF THE CONGRESS WHO HAVE EXPRESSED AN INTEREST THEREIN.