B-164675, SEPT. 17, 1968

B-164675: Sep 17, 1968

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TO DATA TECHNOLOGY CORPORATION: REFERENCE IS MADE TO YOUR TELEGRAM OF JUNE 24. THE DFS SYSTEMS ARE DESCRIBED IN THE SPECIFICATIONS AS ELECTRO OPTICAL DEVICES FOR SIMULATING EFFECTS OF RIFLE AND LARGE CALIBRE WEAPONS IN PSEUDO COMBAT EXPERIMENTS WITH INPUT AND OUTPUT DATA HANDLING CAPABILITY. PROVIDED AT PAGE 6 AS FOLLOWS: "QUOTATIONS WILL BE ACCEPTED FOR EITHER A FIRM FIXED PRICE (FFP) AND/ORA FIXED-PRICE- INCENTIVE. SHARING ARRANGEMENT AND CEILING WILL BE PROPOSED BY THE CONTRACTOR. MULTIPLE TECHNICAL PROPOSALS WILL BE ACCEPTED.'. THE TECHNICAL EVALUATION CRITERIA WERE SET FORTH ON PAGE 16 OF THE RFQ. THE NEGOTIATION AUTHORITY CITED FOR THE INSTANT PROCUREMENT WAS 10 U.S.C. 2304 (A) (10).

B-164675, SEPT. 17, 1968

TO DATA TECHNOLOGY CORPORATION:

REFERENCE IS MADE TO YOUR TELEGRAM OF JUNE 24, 1968, AND LETTERS OF JUNE 26, 1968, WITH ENCLOSURES, AND JULY 9, 1968, PROTESTING AGAINST THE AWARD OF A CONTRACT TO HOLOBEAM, INCORPORATED, UNDER REQUEST FOR QUOTATIONS NO. DAAG07-68-Q-2520, ISSUED ON JANUARY 23, 1968, FOR 6 ITEMS INCLUDING EQUIPMENT AND SERVICES FOR DIRECT FIRE SIMULATOR (DFS) SYSTEMS AS DESCRIBED ON PAGE 1 OF THE RFQ.

THE DFS SYSTEMS ARE DESCRIBED IN THE SPECIFICATIONS AS ELECTRO OPTICAL DEVICES FOR SIMULATING EFFECTS OF RIFLE AND LARGE CALIBRE WEAPONS IN PSEUDO COMBAT EXPERIMENTS WITH INPUT AND OUTPUT DATA HANDLING CAPABILITY. BY LETTER DATED DECEMBER 27, 1967, THE PROCURING ACTIVITY ADVISED PROSPECTIVE OFFERORS OF ITS INTENTION TO PURCHASE THE DFS SYSTEMS. THIS LETTER ALSO GAVE THE LOCATION AND TIME OF A PRESOLICITATION CONFERENCE.

THE RFQ, ISSUED BY THE UNITED STATES ARMY SOUTHWEST PROCUREMENT AGENCY, PASADENA, CALIFORNIA, PROVIDED AT PAGE 6 AS FOLLOWS: "QUOTATIONS WILL BE ACCEPTED FOR EITHER A FIRM FIXED PRICE (FFP) AND/ORA FIXED-PRICE- INCENTIVE, FIRM TARGET (FPIF) CONTRACT. TARGET COST, TARGET PROFIT, SHARING ARRANGEMENT AND CEILING WILL BE PROPOSED BY THE CONTRACTOR. MULTIPLE TECHNICAL PROPOSALS WILL BE ACCEPTED.' THE TECHNICAL EVALUATION CRITERIA WERE SET FORTH ON PAGE 16 OF THE RFQ. THE NEGOTIATION AUTHORITY CITED FOR THE INSTANT PROCUREMENT WAS 10 U.S.C. 2304 (A) (10).

PAGE 1 OF THE RFQ REQUESTED THAT QUOTATIONS BE FURNISHED TO THE ISSUING OFFICE PRIOR TO 4:00 P.M., PST, MARCH 19, 1968. SIX PROPOSALS WERE RECEIVED AND ABSTRACTED. AN INITIAL TECHNICAL EVALUATION OF THE PROPOSALS RECEIVED MADE BY THE UNITED STATES ARMY COMBAT DEVELOPMENTS COMMAND AT FORT ORD, CALIFORNIA, WAS COMPLETED ON APRIL 17, 1968. PURSUANT TO THIS EVALUATION IBM WAS GIVEN FIRST TECHNICAL PREFERENCE; HOLOBEAM WAS GIVEN SECOND TECHNICAL PREFERENCE; AND DATA TECHNOLOGY WAS GIVEN THIRD TECHNICAL PREFERENCE.

IT WAS DETERMINED THAT THE ABOVE THREE OFFERORS WERE IN A COMPETITIVE RANGE AND THAT NEGOTIATIONS SHOULD BE CONDUCTED WITH ALL THREE. DATA TECHNOLOGY'S PROPOSAL WHICH WAS SUBMITTED ON A FIXED PRICE INCENTIVE BASIS CONTAINED TARGET COSTS, A CEILING PRICE AND A PROFIT SHARING FORMULA. HOLOBEAM SUBMITTED A PROPOSAL ON A FIRM FIXED PRICE BASIS.

THE FOLLOWING PARAGRAPHS FROM THE CONTRACTING OFFICER'S REPORT SET FORTH IN DETAIL THE EVENTS WHICH LED UP TO THE SELECTION OF HOLOBEAM AS THE SUCCESSFUL OFFEROR: "9. FURTHER DISCUSSIONS WERE HELD WITH EACH OF THE THREE COMPANIES DETERMINED TO BE WITHIN THE ZONE OF CONSIDERATION, * * *, FOR THE PURPOSE OF CLARIFYING DELIVERY SCHEDULES AND THEIR TECHNICAL PROPOSALS. MORE PRECISELY, SUCH DISCUSSIONS WERE CONDUCTED WITH HOLOBEAM ON 6 MAY 1968; IBM ON 8 MAY 1968 AND DATA TECHNOLOGY ON 10 MAY 1968. DURING THESE DISCUSSIONS EACH COMPANY WAS GIVEN AMENDMENT SHEET NO. 2 * * * WHICH FURTHER MODIFIED AND CLARIFIED THE SPECIFICATION FOR THE DIRECT FIRE SIMULATOR. EACH FIRM WAS ALSO ORALLY ADVISED THAT THEY WOULD BE GIVEN UNTIL 24 MAY 1968 TO FORMALLY REVISE THEIR TECHNICAL AND PRICE PROPOSALS, IF THEY SO DESIRED. NONE OF THE FIRMS OBJECTED TO THE NEW DATE. INDEED, EACH COMPANY DID REVISE ITS TECHNICAL AND PRICE PROPOSAL AND SUBMITTED SUCH REVISIONS BY 24 MAY 1968. SUCH REVISIONS OF TECHNICAL PROPOSALS, AGAIN, WERE SENT TO THE COMBAT DEVELOPMENTS COMMAND FOR THEIR REVIEW, ANALYSIS AND COMMENTS. "10. UPON NOTIFICATION FROM THE COMMAND THAT EVALUATION OF THE REVISED TECHNICAL PROPOSALS HAD BEEN COMPLETED, A TELETYPE WAS SENT TO THE THREE (3) COMPETITORS ADVISING THEM THAT REVISED PRICES RECEIVED BEFORE 5 JUNE 1968, 4:00 PM PDT, WOULD BE CONSIDERED * * *. NONETHELESS, NO ADDITIONAL PRICE REVISIONS WERE RECEIVED AFTER 24 MAY 1968. "11. THE REVISED PRICED PROPOSALS, AS RECEIVED AND ABSTRACTED, REFLECT THE FOLLOWING RESULTS:

"CONTRACTOR F.F.P. FPIF

TARGET PRICE CEILING

HOLOBEAM $534,983.00

DATA TECHNOLOGY $500,000 $582,000

IBM $687,000 $718,000 "12. BY LETTER DATED 10 JUNE 1968 * * *, CDCEC ADVISED THIS AGENCY THAT HOLOBEAM, INC., SUBMITTED THE BEST TECHNICAL PROPOSAL. "13. ON THE BASIS OF THE RESULTS OF THE TECHNICAL EVALUATION, THE PRICES RECEIVED AND THE INFORMATION RECEIVED FROM THE PRE-AWARD SURVEY, THE CONTRACTING OFFICER CONCLUDED THAT IT WAS IN THE GOVERNMENT'S BEST INTERESTS TO MAKE AN AWARD TO HOLOBEAM, INC. ACCORDINGLY, A CONTRACT WAS EXECUTED BY THE CONTRACTING OFFICER ON 21 JUNE 1968.'

THE TELEGRAM REFERRED TO IN PARAGRAPH 10 APPARENTLY WAS SENT SIMULTANEOUSLY TO THE THREE OFFERORS SELECTED FOR NEGOTIATION.

BASICALLY, THE COMPLAINT IN THE LETTERS OF JUNE 26 AND JULY 9, 1968, IS THAT THE NEGOTIATED AWARD TO HOLOBEAM WAS NOT MADE ON A FAIR AND EQUITABLE BASIS. IN THIS CONNECTION A NUMBER OF CONTENTIONS AND QUESTIONS HAVE BEEN BROUGHT TO OUR ATTENTION WHICH WE HAVE SUMMARIZED AS FOLLOWS:

(1) HOLOBEAM SHOULD BE DISQUALIFIED SINCE REPRESENTATIVES OF THAT CONCERN DID NOT ATTEND A PRE-PROPOSAL CONFERENCE SCHEDULED IN THE RFQ.

(2) DATA TECHNOLOGY WAS THE LOW INITIAL OFFEROR AND THE "BIDDING WAS RE- OPENED THROUGH A TRIVIAL CHANGE IN SPECIFICATIONS". THE QUESTION ASKED IS "WHY WAS THE BIDDING RE-OPENED?

(3) WAS DATA TECHNOLOGY GIVEN THE SAME OPPORTUNITY TO REVISE ITS PROPOSAL AS THE OTHER OFFERORS?

(4) DATA TECHNOLOGY'S PROPOSAL WAS LOW IN REGARD TO PRICE AND ALSO TECHNICALLY ACCEPTABLE AND, THEREFORE, IT WAS IMPROPER TO MAKE THE AWARD TO HOLOBEAM.

(5) DATA TECHNOLOGY WAS NOT GIVEN THE OPPORTUNITY BY ARMY TO EXPLAIN THE PRICE IN ITS PROPOSAL. THE LETTER OF JULY 9 STATES "IT APPEARS THAT THE GOVERNMENT WAS NOT INTERESTED IN EVALUATING THE CONFIDENCE WE HAD IN OUR TARGET PRICE OF $500,000.'

A QUESTION HAS ALSO BEEN RAISED WITH RESPECT TO THE QUALIFICATIONS OF HOLOBEAM TO PERFORM THIS CONTRACT. IN THIS CONNECTION IT IS URGED THAT HOLOBEAM'S QUALIFICATIONS TO PERFORM MUST BE EVALUATED AS OF THE DATE OF THE ISSUANCE OF THE SOLICITATION AND THAT IT WAS IMPROPER TO TAKE INTO CONSIDERATION THE QUALIFICATIONS POSSESSED BY HOLOBEAM AT THE TIME OF THE PRE-AWARD SURVEY. ALSO A PRELIMINARY PROSPECTUS ON HOLOBEAM DATED MAY 10, 1968, HAS BEEN BROUGHT TO OUR ATTENTION WHICH INDICATES ON PAGE 5 THAT HOLOBEAM DOES NOT HAVE DEMONSTRATION OR PROTOTYPE MODELS OF THE TYPE SPECIFIED IN THE INSTANT PROCUREMENT.

IN CONSIDERING WHETHER THE AWARD TO HOLOBEAM WAS PROPER, EACH OF YOUR CONTENTIONS WILL BE EXAMINED TO DETERMINE IF THERE WAS ANY VIOLATION BY THE PROCURING ACTIVITY OF APPLICABLE STATUTES AND REGULATIONS.

WITH RESPECT TO CONTENTION NO. 1 ABOVE, WE HAVE REVIEWED ARMED SERVICES PROCUREMENT REGULATION (ASPR) 3-504, WHICH SETS FORTH THE PROCEDURES FOR PRE-PROPOSAL CONFERENCES. THERE IS NOTHING IN THIS SECTION OF ASPR OR IN THE SOLICITATION WHICH MAKES ATTENDANCE AT THE PRE-PROPOSAL CONFERENCE A CONDITION FOR QUALIFICATION FOR COMPETITION. CONSEQUENTLY, HOLOBEAM'S FAILURE TO ATTEND THE PRE PROPOSAL CONFERENCE WOULD NOT CONSTITUTE A BASIS FOR DISQUALIFICATION.

WE ASSUME THAT THE OBJECTION IN CONTENTION NO. 2, ABOVE, RELATES TO AMENDMENT NO. 2 WHICH WAS GIVEN TO THE THREE OFFERORS QUALIFIED FOR NEGOTIATION DURING THE NEGOTIATION DISCUSSIONS. IN ASPR 3-505 (A) IT IS PROVIDED THAT SIGNIFICANT CHANGES IN SPECIFICATIONS SHALL BE ACCOMPLISHED BY THE ISSUANCE OF AN AMENDMENT TO THE SOLICITATION WHETHER OR NOT A PRE- PROPOSAL CONFERENCE IS HELD. IT IS ALSO PROVIDED THAT THE AMENDMENT MUST BE FURNISHED TO ALL OFFERORS. WE HAVE REVIEWED AMENDMENT NO. 2 TO THE RFQ WHICH WAS MADE AVAILABLE TO ALL OFFERORS AND WE HAVE NOTED THEREIN A NUMBER OF SPECIFICATION CHANGES AND CLARIFICATIONS. CONSEQUENTLY, WE DISAGREE THAT ARMY WAS NOT JUSTIFIED IN ISSUING AMENDMENT NO. 2 IN ACCORDANCE WITH ASPR 3-505 (A).

WITH RESPECT TO CONTENTION NO. 3, ASPR 3-805.1 (B) PROVIDES:

"* * * WHENEVER NEGOTIATIONS ARE CONDUCTED WITH SEVERAL OFFERORS, WHILE SUCH NEGOTIATIONS MAY BE CONDUCTED SUCCESSIVELY, ALL OFFERORS SELECTED TO PARTICIPATE IN SUCH NEGOTIATIONS * * * SHALL BE OFFERED AN EQUITABLE OPPORTUNITY TO SUBMIT SUCH PRICE, TECHNICAL, OR OTHER REVISIONS IN THEIR PROPOSALS AS MAY RESULT FROM THE NEGOTIATIONS. ALL SUCH OFFERORS SHALL BE INFORMED OF THE SPECIFIED DATE (AND TIME IF DESIRED) OF THE CLOSING OF NEGOTIATIONS AND THAT ANY REVISIONS TO THEIR PROPOSALS MUST BE SUBMITTED BY THAT DATE. * * *"

A REVIEW OF THE RECORD AS SET FORTH IN PARAGRAPHS 9 AND 10 OF THE CONTRACTING OFFICER'S REPORT, QUOTED ABOVE, INDICATES THAT THE CUTOFF DATE FOR NEGOTIATIONS FOR ALL OFFERORS WAS THE SAME AND IT DOES NOT SEEM THAT ANY OFFEROR WAS GIVEN ANY UNDUE ADVANTAGE IN THIS REGARD. CONSEQUENTLY, CONTENTION NO. 3 DOES NOT CONSTITUTE A BASIS FOR QUESTIONING THE AWARD TO HOLOBEAM.

CONTENTIONS NO. 4 AND 5 WHICH ARE SOMEWHAT OVERLAPPING WILL BE DISCUSSED SIMULTANEOUSLY. HOLOBEAM'S PROPOSAL WAS DETERMINED TO BE THE MOST ADVANTAGEOUS TO THE GOVERNMENT SINCE IT RECEIVED THE HIGHEST PREFERENCE PURSUANT TO THE TECHNICAL EVALUATION AND SINCE HOLOBEAM'S FIRM FIXED-PRICE FOR THE ITEMS WAS LOWER THAN THE CEILING PRICE IN YOUR PROPOSAL.

YOUR LETTER OF JULY 9 COMPLAINS THAT THE GOVERNMENT WAS NOT INTERESTED IN EVALUATING THE CONFIDENCE YOU HAD IN YOUR TARGET COST. A MEMORANDUM OF THE DEBRIEFING CONFERENCE BETWEEN YOUR CONCERN AND THE PROCURING ACTIVITY ON JUNE 27, 1968, STATES THAT DATA TECHNOLOGY'S REPRESENTATIVES WERE ADVISED AT THE NEGOTIATION MEETING THAT SINCE THE PROCUREMENT WAS A COMPETITIVE ONE, DATA TECHNOLOGY SHOULD QUOTE ITS PRICES IN THE MANNER BEST SUITED FOR ITS OPERATIONS. THE MEMORANDUM FURTHER INDICATES THAT DATA TECHNOLOGY'S REPRESENTATIVES WERE FURTHER ADVISED AT THE NEGOTIATION MEETING THAT THE GOVERNMENT WOULD NOT DISCUSS THE BASIS FOR ITS PRICE, THAT DATA TECHNOLOGY WOULD NOT BE GIVEN INFORMATION REGARDING THE COMPARISION OF ITS PROPOSAL TO OTHER PROPOSALS AND THAT GENERALLY THE GOVERNMENT DECLINED TO GIVE ANY SUGGESTIONS REGARDING THE MANNER IN WHICH DATA TECHNOLOGY'S PROPOSAL SHOULD BE PREPARED.

UNDER 10 U.S.C. 2306 (A) WHERE NEGOTIATION IS AUTHORIZED, THE HEAD OF AN AGENCY MAY, WITH CERTAIN EXCEPTIONS NOT HERE APPLICABLE,"MAKE ANY KIND OF CONTRACT THAT HE CONSIDERS WILL PROMOTE THE BEST INTERESTS OF THE UNITED STATES". ASPR 3-404.4 (C) LIMITS THE USE OF THE FIXED PRICE INCENTIVE TYPE CONTRACT, AS REQUIRED BY 10 U.S.C. 2306 (C), TO THOSE SITUATIONS IN WHICH A DETERMINATION HAS BEEN MADE THAT SUCH METHOD OF CONTRACTING IS LIKELY TO BE LESS COSTLY THAN OTHER METHODS OR WHEN IT IS IMPRACTICABLE TO SECURE THE KIND OF SUPPLIES AND SERVICES REQUIRED WITHOUT THE USE OF SUCH TYPE OF CONTRACT. ASPR 3-404.4 (B) PROVIDES THAT FIXED-PRICE INCENTIVE CONTRACTS ARE APPROPRIATE WHEN USE OF THE FIRM FIXED-PRICE CONTRACT IS INAPPROPRIATE.

UNDER THE FIXED-PRICE INCENTIVE CONTRACT (FIRM TARGET), AS DESCRIBED IN ASPR 3-404.4 (A) (2), A TARGET COST, A TARGET PROFIT, A PRICE CEILING (BUT NOT A PROFIT CEILING OR FLOOR), AND A FORMULA FOR ESTABLISHING FINAL PROFIT AND PRICE ARE NEGOTIATED AT THE OUT-SET. AFTER PERFORMANCE OF THE CONTRACT, THE FINAL COST IS NEGOTIATED AND THE FINAL CONTRACT PRICE IS THEN ESTABLISHED IN ACCORDANCE WITH THE FORMULA. PURSUANT TO THE FIRM FIXED-PRICE TYPE OF CONTRACT AS DESCRIBED IN ASPR 3-404.2, THE CONTRACTOR ASSUMES FULL RESPONSIBILITY, IN THE FORM OF PROFITS OR LOSSES, FOR ALL COSTS UNDER OR OVER THE FIRM FIXED-PRICE AND THEREFORE THE CONTRACTOR HAS A MAXIMUM PROFIT INCENTIVE FOR EFFECTIVE COST CONTROL AND CONTRACT ADMINISTRATION. USE OF THE FIRM FIXED-PRICE CONTRACT IMPOSES A MINIMUM ADMINISTRATIVE BURDEN ON THE CONTRACTING PARTIES.

THE ABOVE DISCUSSION INDICATES THAT GENERALLY A FIRM FIXED-PRICE TYPE OF CONTRACT IS PREFERRED TO THE FIXED-PRICE INCENTIVE TYPE OF CONTRACT.

IN THE INSTANT PROCUREMENT, AN ADMINISTRATIVE DECISION HAD BEEN MADE TO CONDUCT THE PROCUREMENT AS A NEGOTIATION UNDER 10 U.S.C. 2304 (A) (10). NEGOTIATION IS DEFINED IN 10 U.S.C. 2302 AS MEANING TO "MAKE WITHOUT FORMAL ADVERTISING" , THAT IS, WITHOUT REGARD TO THE PROCEDURES APPEARING IN 10 U.S.C. 2305 AND IN THE IMPLEMENTING REGULATIONS. IN SUCH PROCUREMENTS, THE RULES, PROCEDURES AND REGULATORY CRITERIA OF FORMALLY ADVERTISED COMPETITIVE BIDDING ARE NOT FOR APPLICATION. IT IS THE DUTY OF THE CONTRACTING OFFICER TO CONDUCT NEGOTIATIONS TO THE BEST ADVANTAGE OF THE GOVERNMENT AND TO PLACE THE CONTRACT WITH THE PROPOSER MAKING THE BEST FINAL PROPOSAL IN THE LIGHT OF ALL RELEVANT CONSIDERATIONS. CF. B-148807, AUGUST 30, 1962.

PURSUANT TO OUR REVIEW WE FIND NO BASIS TO QUESTION ARMY'S DETERMINATION THAT HOLOBEAM'S PROPOSAL WAS MOST ADVANTAGEOUS TO THE GOVERNMENT; WE HAVE FOUND NO VIOLATION OF THE STATUTES AND REGULATIONS BY THE PROCURING ACTIVITY IN CONDUCTING NEGOTIATIONS WITH QUALIFIED OFFERORS; CONSEQUENTLY, CONTENTIONS NO. 1 THROUGH 5 ABOVE DO NOT CONSTITUTE A BASIS FOR DISTURBING THE AWARD MADE. WITH RESPECT TO HOLOBEAM'S QUALIFICATIONS TO PERFORM, THE CONTRACTING OFFICER'S REPORT ADVISES AS FOLLOWS: "8. AFTER THE RECEIPT OF THE PROPOSALS ON 19 MARCH 1968, AND PRIOR TO RECEIPT OF THE REPORT REGARDING THE TECHNICAL EVALUATIONS, PRE-AWARD SURVEYS WERE REQUESTED FOR HOLOBEAM AND DATA TECHNOLOGY * * *. PERTINENT TO THIS PROTEST IS ONLY THE SURVEY REPORT ON HOLOBEAM. THAT REPORT WAS DATED 5 APRIL 1968, AND, IN ACCORDANCE WITH THE REQUEST OF THIS AGENCY, REFLECTED AN EXHAUSTIVE AND COMPREHENSIVE REVIEW OF THE CAPABILITY AND RESPONSIBILITY OF HOLOBEAM. THE REPORT ON HOLOBEAM ASSERTED UNEQUIVOCALLY THAT THE FIRM HAD A SUFFICIENT NUMBER OF EMPLOYEES OR COULD EASILY OBTAIN THE SERVICES OF ADDITIONALLY REQUIRED EMPLOYEES FROM THE LOCAL LABOR MARKET; THAT ITS PLANT FACILITIES WERE ADEQUATE; THAT IT POSSESSED THE REQUIRED NUMBER OF MAJOR TYPES OF MANUFACTURING EQUIPMENT AND THAT SUCH EQUIPMENT WAS IN GOOD CONDITION; THAT ITS MATERIAL CONTROL AND PRODUCTION CONTROL PROCEDURES WERE SATISFACTORY; THAT FIRM QUOTATIONS FOR TIMELY DELIVERIES OF PURCHASED MATERIALS HAD BEEN RECEIVED; THAT IT COULD COMPLY WITH REQUIRED QUALITY CONTROL AND INSPECTION PROCEDURES; THAT ITS FINANCIAL POSITION WAS STRONG AND THAT ITS KEY PERSONNEL HAVE HAD -CONSIDERABLE EXPERIENCE IN THE FIELDS OF ELECTRONICS AND LASERS AND HAVE PERFORMED ON SIMILAR EQUIPMENTS UNDER GOVERNMENT AND COMMERCIAL CONTRACTS WITH OTHER MAJOR CORPORATIONS ENGAGED IN ELECTRONICS AND LASER EFFORT-. * * * THE SURVEY REPORT ALSO CONTAINED AN UNQUALIFIED RECOMMENDATION FOR AWARD TO HOLOBEAM.'

WITH RESPECT TO WHETHER THE QUALIFICATIONS POSSESSED BY HOLOBEAM AT THE TIME OF THE PRE-AWARD SURVEY WERE PROPERLY CONSIDERED IN THE RECOMMENDATION THAT HOLOBEAM WAS QUALIFIED FOR AWARD, THERE IS NO REGULATORY REQUIREMENT THAT THE SUCCESSFUL OFFEROR MUST HAVE THE NECESSARY FACILITIES AND EQUIPMENT TO PERFORM A CONTRACT ON THE DATE OF THE ISSUANCE OF THE SOLICITATION. CF. B-162888, JANUARY 4, 1968.

IN THIS CONNECTION TWO SECTIONS UNDER ASPR 1-903.2 INDICATE THAT THERE IS NO REQUIREMENT THAT A PROSPECTIVE CONTRACTOR MUST HAVE THE REQUISITE CAPABILITIES AT THE TIME OF THE ISSUANCE OF THE SOLICITATION. FOR EXAMPLE, IT IS PROVIDED THAT A PROSPECTIVE CONTRACTOR MUST: "HAVE THE NECESSARY ORGANIZATION, EXPERIENCE, OPERATIONAL CONTROLS AND TECHNICAL SKILLS, OR THE ABILITY TO OBTAIN THEM * * *". IN THE SAME REGARD A PROSPECTIVE CONTRACTOR MUST: "HAVE THE NECESSARY PRODUCTION, CONSTRUCTION, AND TECHNICAL EQUIPMENT AND FACILITIES, OR THE ABILITY TO OBTAIN THEM * *

OUR OFFICE HAS CONSISTENTLY HELD THAT THE MATTER OF THE OVERALL RESPONSIBILITY OF A PROSPECTIVE CONTRACTOR TO PERFORM THE RESULTING CONTRACT IS PRIMARILY FOR DETERMINATION BY THE CONTRACTING OFFICER. COMP. GEN. 549. SUCH A DETERMINATION NECESSARILY INVOLVES A CONSIDERABLE RANGE OF DISCRETION AND WHERE THE DETERMINATION IS BASED UPON SUBSTANTIAL EVIDENCE, AS HERE, THERE IS NO VALID BASIS UPON WHICH WE MAY SUBSTITUTE OUR JUDGMENT FOR THAT OF THE CONTRACTING OFFICER. 39 COMP. GEN. 705. THE PRESENT CASE WE CANNOT CONCLUDE THAT THE CONTRACTING OFFICER'S DETERMINATION THAT HOLOBEAM WAS A RESPONSIBLE PROSPECTIVE CONTRACTOR BASED ON THE FINDINGS IN THE PRE-AWARD SURVEY WAS ARBITRARY OR CAPRICIOUS; CONSEQUENTLY, WE ACCEPT THE ADMINISTRATIVE DETERMINATION THAT THE SUCCESSFUL OFFEROR IS FINANCIALLY ABLE AND TECHNICALLY CAPABLE OF PERFORMING THE CONTRACT.

WE HAVE REVIEWED THE PRELIMINARY PROSPECTUS ON HOLOBEAM DATED MAY 10, 1968, SUBMITTED WITH YOUR PROTEST. IT IS URGED THAT HOLOBEAM CANNOT BE CONSIDERED AS QUALIFIED SINCE HOLOBEAM HAS NO DEMONSTRATION OR PROTOTYPE MODELS OF PRODUCTS OF THE TYPE SPECIFIED IN THE INSTANT PROCUREMENT. VIEW OF THE QUALIFICATIONS OF THE KEY PERSONNEL OF HOLOBEAM AS FOUND BY THE PRE-AWARD SURVEY, IT CANNOT BE SAID THAT THIS CONTENTION ESTABLISHES THAT HOLOBEAM DOES NOT HAVE THE ABILITY TO PERFORM THE CONTRACT FOR THE INSTANT PROCUREMENT.