B-165084, B-165691, APR. 11, 1969

B-165084, B-165691, APR. 11, 1969

TO MR. SECRETARY:

ENCLOSED IS A COPY OF OUR DECISION OF TODAY CONCERNING THE PROTEST SUBMITTED TO OUR OFFICE BY BURTEK, INC., UNDER REQUEST FOR PROPOSALS (RFP) NO. F33657-68-R-0749 AND UNDER A PROPOSED LETTER CONTRACT F33657 69-C- 0471, ISSUED BY THE AERONAUTICAL SYSTEMS DIVISION (ASD), WRIGHT PATTERSON AIR FORCE BASE, OHIO. THESE PROTESTS WERE THE SUBJECT OF REPORTS DATED DECEMBER 3, 1968, AND FEBRUARY 18, 1969, FROM W. F. KRAEMER, DEPUTY CHIEF, PROCUREMENT OPERATIONS DIVISION.

WHILE FOR THE REASONS STATED WE DO NOT FEEL THAT WE SHOULD REQUIRE CANCELLATION OF THE CONTRACT AWARDED UNDER RFP -0749, WE CANNOT APPROVE THE PROCEDURE FOLLOWED IN THE SUBJECT PROCUREMENTS.

AT THE TIME THE PROPOSALS WERE RECEIVED UNDER THE AMENDED RFP -0749 ON MAY 16, 1968, BURTEK'S OFFER WAS ON ITS FACE THE MOST FAVORABLE TO THE GOVERNMENT, SINCE IT WAS NEARLY $130,000 LOWER THAN THE PRICE OFFERED BY LINK, AND THERE IS NO INDICATION THAT IT WAS AT THAT TIME DEEMED DEFICIENT IN OTHER RESPECTS. WHILE SUFFICIENT EVIDENCE MAY THEREAFTER HAVE BEEN OBTAINED TO WARRANT A DETERMINATION OF BURTEK'S NON-RESPONSIBILITY, IN ACCORDANCE WITH THE PROCEDURES LISTED IN ASPR 1 904.1, NO SUCH DETERMINATION WAS IN FACT MADE, NOR WAS THE MATTER OF BURTEK'S NON- RESPONSIBILITY PROPERLY REFERRED TO THE SMALL BUSINESS ADMINISTRATION IN ACCORD WITH ASPR 1-705.4 (C).

DESPITE THE FACT THAT BURTEK WAS THE LOWEST OFFEROR AS TO PRICE, AND WAS NOT DETERMINED TO BE EITHER NON-RESPONSIVE OR NON-RESPONSIBLE, AWARD WAS MADE TO LINK AFTER DELETION OF A MATERIAL REQUIREMENT OF THE AMENDED SPECIFICATIONS AND A SUBSTANTIAL MODIFICATION OF ITS ORIGINALLY QUOTED PRICE, WITHOUT ANY NOTICE TO OR DISCUSSIONS WITH BURTEK. WE BELIEVE THAT SUCH ACTION WAS UNQUESTIONABLY A CLEAR VIOLATION OF 10 U.S.C. 2304 (G), WHICH REQUIRES THAT WRITTEN OR ORAL DISCUSSIONS BE CONDUCTED WITH ALL RESPONSIBLE OFFERORS SUBMITTING PROPOSALS WITHIN A COMPETITIVE RANGE. THE PROVISO, THAT SUCH REQUIREMENTS NEED NOT BE APPLIED WHERE IT CAN BE CLEARLY DEMONSTRATED THAT ACCEPTANCE OF AN INITIAL PROPOSAL WITHOUT DISCUSSION WOULD RESULT IN FAIR AND REASONABLE PRICES, CANNOT REASONABLY BE READ AS AUTHORIZING ACCEPTANCE OF ANYTHING OTHER THAN AN INITIAL PROPOSAL AS IT WAS SUBMITTED, NOT IN A SUBSTANTIALLY MODIFIED FORM. READ ASPR 3-805.1 (A) (V) AS AUTHORIZING ANY DIFFERENT ACTION WOULD REQUIRE IT TO BE CONSIDERED AS UNAUTHORIZED AND VOID. EVEN THOUGH BURTEK MAY NOT HAVE BEEN IN A POSITION TO SUBMIT A PROPOSAL ON THE BASIS OF NO FIRST ARTICLE TESTING, IT SHOULD HAVE BEEN GIVEN AN OPPORTUNITY TO SUBMIT A PRICE MODIFICATION WITH KNOWLEDGE OF THE FACT THAT PROPOSALS ON THAT BASIS WOULD BE CONSIDERED, ALTHOUGH NOT PERMITTED BY THE RFP. IN FAILING TO GIVE BURTEK SUCH NOTICE AND OPPORTUNITY WE BELIEVE THE CONTRACTING OFFICER ACTED ERRONEOUSLY.

AS NOTED IN OUR DECISION THE QUESTIONABLE PROPRIETY OF THESE ACTIONS WAS NOTED UPON REVIEW BY COLONEL N. W. GRAVES, DIRECTOR OF PROCUREMENT POLICY, DCS/PROCUREMENT AND PRODUCTION, IN A MEMORANDUM DATED OCTOBER 9, 1968, IN WHICH HE MAINTAINED THAT THE SOUNDNESS OF THE CONTRACTING OFFICER'S DECISION TO MAKE AN AWARD UNDER THESE CIRCUMSTANCES SHOULD BE EXAMINED. NEVERTHELESS, THE INITIAL REPORT ON THE PROTEST WAS NOT FORWARDED TO US UNTIL DECEMBER 3, 1968. WE BELIEVE THAT ONCE AN APPROPRIATE LEVEL OF REVIEW WITHIN YOUR DEPARTMENT HAS ARRIVED AT SUCH A DETERMINATION THE REPORT ON THE PROTEST SHOULD BE FORWARDED TO OUR OFFICE IMMEDIATELY, SINCE IT IS THE STATUTORY OBLIGATION OF THE GENERAL ACCOUNTING OFFICE TO CONDUCT SUCH AN EXAMINATION. SUCH PROLONGED DELAY IN THE TRANSMISSION OF AN ADMINISTRATIVE REPORT AS APPARENTLY OCCURRED IN THE INSTANT CASE EFFECTIVELY PRECLUDES US FROM TAKING PROPER REMEDIAL ACTION, NO MATTER HOW CLEARLY JUSTIFIED. SUCH DELAYS HAVE BECOME A SERIOUS CONCERN OF THE CONGRESS, AS WELL AS OF THIS OFFICE, AND WE TRUST THAT AN APPROPRIATE ADMINISTRATIVE REMEDY WILL BE FOUND.

WITH RESPECT TO THE LETTER CONTRACT ISSUED TO LINK IN OCTOBER 1968, WE CANNOT CONSIDER THE AWARD IMPROPER, BUT BELIEVE THE CIRCUMSTANCES JUSTIFYING SOLE SOURCE NEGOTIATION, INVOLVING THE VARIOUS TIME PERIODS EXPECTED TO BE INCURRED IN OBTAINING DELIVERY OF THE TRAINERS, AS SPECIFIED BY THE CONTRACTING OFFICER, BARELY SUSTAIN THE PROPRIETY OF THIS DETERMINATION. AS NOTED IN THE DECISION WE QUESTION THE CONTRACTING OFFICER'S ESTIMATION OF THE ADMINISTRATIVE LEAD TIME INVOLVED IN UNDERTAKING A COMPETITIVELY NEGOTIATED PROCUREMENT, INVOLVING ONLY LINK AND BURTEK, AND HIS FAILURE TO HAVE FORMULATED WITH MORE PRECISION THE FIRST ARTICLE APPROVAL TIME THAT WOULD HAVE BEEN EXPECTED OF BURTEK UNDER SUCH A CONTRACT.

WHILE WE ASSUME THAT ENOUGH ADDITIONAL TIME WOULD HAVE BEEN CONSUMMED IN NEGOTIATING A COMPETITIVE AWARD TO BURTEK AND OBTAINING DELIVERY OF THE AIRCRAFT FROM THE COMPANY TO JUSTIFY SOLE SOURCE NEGOTIATIONS WITH LINK IN THE INSTANT CASE, WE BELIEVE CONTRACTING OFFICERS SHOULD BE INSTRUCTED TO FORMULATE SUCH TIME PERIODS MORE PRECISELY IN FUTURE URGENT PROCUREMENTS IN ORDER TO PRECLUDE ANY POSSIBILITY THAT A COMPETITIVELY NEGOTIATED PROCUREMENT COULD BE EFFECTED.

WE BELIEVE IT SHOULD ALSO BE NOTED THAT, WHILE THE CONTRACTING OFFICER'S UNCONSUMMATED DETERMINATION OF NON-RESPONSIBILITY IN THE FIRST PROCUREMENT, (WHICH MUST ALSO HAVE INFLUENCED HIS DECISION TO NEGOTIATE SOLE SOURCE FOR THE LATER REQUIREMENT) APPEARS TO HAVE BEEN BASED UPON THE OPINIONS OF THE TECHNICAL MEMBERS OF THE SURVEY TEAM WHICH QUESTIONED BURTEK'S ABILITY TO COMPLETELY DESIGN A SOLID STATE AMPLIFIER WITHIN THE TIME PROPOSED BY IT, NO CONSIDERATION IS REPORTED TO HAVE BEEN GIVEN EITHER BY HIM OR HIS TECHNICAL ADVISERS TO BURTEK'S LETTER OF JULY 12, 1968, TO MR. SHELLABARGER, WHICH WOULD APPEAR TO SHOW THAT THE MAGNITUDE OF BURTEK'S EFFORT IN THIS RESPECT WOULD BE MUCH LESS THAN PREVIOUSLY SUPPOSED. WE QUESTION WHETHER A DETERMINATION OF NON-RESPONSIBILITY COULD HAVE BEEN JUSTIFIED WITHOUT SUCH CONSIDERATION.

THE FILES FORWARDED WITH THE REPORTS OF DECEMBER 3, 1968, AND FEBRUARY 18, 1969, ARE RETURNED.