B-166315, AUG. 15, 1969

B-166315: Aug 15, 1969

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A POTENTIAL PRIME CONTRACTOR WHOSE NAME WAS INADVERTENTLY OMITTED FROM THE LISTING OF POTENTIAL CONTRACTORS IN THE COMMERCE BUSINESS DAILY WOULD NOT HAVE THE SAME NATIONWIDE SUBCONTRACT OPPORTUNITIES AS THOSE LISTED AND. SUCH CONTRACTOR IS REGARDED AS HAVING BEEN PREJUDICIED BY THE OMISSION. THE REQUIREMENT IN ASPR FOR PUBLICATION OF TECHNICALLY ACCEPTABLE POTENTIAL CONTRACTORS IS NOT SATISFIED BY MERELY SUBMITTING THE INFORMATION FOR PUBLICATION WITHOUT FURTHER STEPS TO INSURE THAT THE INFORMATION IS PUBLISHED FULLY AND CORRECTLY. SINCE PROTESTANT RECEIVED ORAL CLARIFICATION AND OTHER TWO BIDDERS WERE PREJUDICED ALLEGATION OF AMBIGUITY IS NOT UPHELD. THE INVITATION WAS ISSUED ON JANUARY 16.

B-166315, AUG. 15, 1969

BID PROTEST - BIDDER LISTING DECISION TO SECRETARY OF THE AIR FORCE CONCERNING PROTEST OF FAIRCHILD HILLER CORP. AGAINST AWARD UNDER TWO-STEP PROCUREMENT OF REQUIREMENTS-TYPE CONTRACT FOR AIR CONDITIONERS FOR AIRCRAFT. A POTENTIAL PRIME CONTRACTOR WHOSE NAME WAS INADVERTENTLY OMITTED FROM THE LISTING OF POTENTIAL CONTRACTORS IN THE COMMERCE BUSINESS DAILY WOULD NOT HAVE THE SAME NATIONWIDE SUBCONTRACT OPPORTUNITIES AS THOSE LISTED AND, THEREFORE, SUCH CONTRACTOR IS REGARDED AS HAVING BEEN PREJUDICIED BY THE OMISSION. HOWEVER SINCE AWARD HAS BEEN MADE AND PERFORMANCE COMMENCED TOGETHER WITH FACT THAT THE OTHER THREE POTENTIAL CONTRACTORS HAD NATIONWIDE SUBCONTRACT OPPORTUNITIES, CANCELLATION OF AWARD AND READVERTISEMENT WOULD NOT BE JUSTIFIED. THE REQUIREMENT IN ASPR FOR PUBLICATION OF TECHNICALLY ACCEPTABLE POTENTIAL CONTRACTORS IS NOT SATISFIED BY MERELY SUBMITTING THE INFORMATION FOR PUBLICATION WITHOUT FURTHER STEPS TO INSURE THAT THE INFORMATION IS PUBLISHED FULLY AND CORRECTLY. WITH RESPECT TO ALLEGATION OF AMBIGUITY IN INVITATION AS TO CIRCUMSTANCES UNDER WHICH CERTAIN DESIGNATED BIDS WOULD APPLY, SINCE PROTESTANT RECEIVED ORAL CLARIFICATION AND OTHER TWO BIDDERS WERE PREJUDICED ALLEGATION OF AMBIGUITY IS NOT UPHELD. TWO OTHER ALLEGATIONS CONSIDERED AND DISMISSED.

TO MR. SECRETARY:

WE MAKE REFERENCE TO A LETTER (WITH ATTACHMENT) DATED APRIL 25, 1969, AND TO A SUBSEQUENT LETTER DATED JULY 22, 1969, FROM THE CHIEF OF THE PROCUREMENT OPERATIONS DIVISION, DIRECTORATE OF PROCUREMENT POLICY, DEPUTY CHIEF OF STAFF, SYSTEMS AND LOGISTICS, REPORTING ON THE PROTEST OF FAIRCHILD HILLER CORPORATION AGAINST THE AWARD OF A REQUIREMENTS TYPE CONTRACT TO ANOTHER COMPANY UNDER INVITATION FOR BIDS NO. F41608 69-B- 0878, ISSUED BY THE SAN ANTONIO AIR MATERIEL AREA, KELLY AIR FORCE BASE, TEXAS.

THE INVITATION WAS ISSUED ON JANUARY 16, 1969, TO FOUR COMPANIES. THE INVITATION WAS THE SECOND STEP IN A TWO-STEP FORMALLY ADVERTISED PROCUREMENT, UNDER THE FIRST STEP OF WHICH THE FOUR COMPANIES HAD SUBMITTED TECHNICALLY ACCEPTABLE PROPOSALS. ITEM NO. 1 ON THE BIDDING SCHEDULE WAS AN AIR CONDITIONER FOR AIRCRAFT GROUND SUPPORT, IDENTIFIED BY MODEL NUMBER "AIR CYCLE A/M 32C-10A.' ITEM NO. 5 WAS A SIMILAR AIR CONDITIONER, MODEL "AIR CYCLE A/M 32C-10.' OTHER ITEMS CONCERNED RELATED DATA AND SPARES FOR THE TWO AIR-CONDITIONER MODELS. THREE BIDS WERE RECEIVED AND OPENED ON FEBRUARY 17, 1969.

FAIRCHILD HILLER HAS RAISED FOUR POINTS OF PROTEST. EACH WILL BE DEALT WITH SEPARATELY UNDER THE APPROPRIATE HEADING.

FAILURE TO PUBLISH FAIRCHILD HILLER'S NAME IN THE COMMERCE BUSINESS DAILY

IN THE JANUARY 23, 1969 ISSUE OF THE COMMERCE BUSINESS DAILY, A SYNOPSIS OF THE INSTANT PROCUREMENT WAS PUBLISHED, LISTING ALL POTENTIAL CONTRACTORS EXCEPT FAIRCHILD HILLER. THE APRIL 25 REPORT CONCERNING THIS PROTEST STATES THAT THIS "UNFORTUNATE" MISTAKE "CAN NOT BE CONSIDERED PREJUDICIAL TO FAIRCHILD HILLER, AT LEAST NOT TO SUCH AN EXTENT AS TO JUSTIFY CANCELLATION OF THE IFB AND INITIATING A NEW COMPETITION.' THE REPORT EMPHASIZES THE PREJUDICE THAT WOULD BEFALL THE LOW BIDDER WHOSE PRICES HAVE BEEN EXPOSED AS OUTWEIGHING FAIRCHILD HILLER'S INTEREST IN A CANCELLATION. FINALLY, FAIRCHILD HILLER'S FAILURE TO OBJECT TO THIS OMISSION PRIOR TO BID OPENING IS CONSIDERED INDICATIVE THAT FAIRCHILD HILLER DID NOT AT THAT TIME BELIEVE THE OMISSION TO BE PREJUDICIAL; AND THE CONCLUSION IS REACHED THAT THE COMPANY SHOULD BE HELD TO HAVE WAIVED ITS OBJECTION.

THE CONTRACTING OFFICER'S STATEMENT OF FACTS AND FINDINGS, EXHIBIT "C" TO THE APRIL 25 REPORT, RELATES THAT THE AIR FORCE COMMUNICATION TO THE COMMERCE BUSINESS DAILY CONTAINED FAIRCHILD HILLER'S NAME. THE REASON FOR THE OMISSION IS APPARENTLY UNKNOWN TO THE AIR FORCE. THE CONTRACTING OFFICER STATES THAT FAIRCHILD HILLER'S ALLEGATION OF PREJUDICE IS "CONJECTURE" AND THAT AS A PRIOR PRODUCER OF AIR CYCLE A/M 32C-10 (ITEM 5 OF THE INVITATION), THE COMPANY SHOULD KNOW WHERE IT CAN PURCHASE ALL THE COMPONENT PARTS AT THE LOWEST POSSIBLE PRICE. THE STATEMENT ASSERTS IN ADDITION THAT THE PRIMARY PURPOSE FOR PUBLICATION OF THE SECOND STEP OF TWO-STEP FORMAL ADVERTISING IS TO BENEFIT POTENTIAL SUBCONTRACTORS AND THAT SINCE FAIRCHILD HILLER WAS NOT A PROSPECTIVE SUBCONTRACTOR, PUBLICATION WAS NOT FOR ITS BENEFIT AND IT COULD NOT HAVE BEEN PREJUDICED BY THE OMISSION OF ITS NAME FROM THE COMMERCE BUSINESS DAILY.

FAIRCHILD HILLER'S POSITION ON THIS ISSUE IS AS FOLLOWS. WHILE THE IMMEDIATE PURPOSE OF THE PUBLICATION REQUIREMENT IS TO ALLOW SMALL BUSINESSES TO SHARE MORE FULLY IN GOVERNMENT DEFENSE PROGRAMS BY BROADENING SUBCONTRACT OPPORTUNITIES, IT IS ALSO BENEFICIAL TO THE GOVERNMENT IN THAT IT EXPANDS THE COMPETITIVE BASE AND INSURES THE RECEIPT OF THE LOWEST AVAILABLE BID PRICES. THE COMPANY CONTENDS THEREFORE THAT THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) PROVISIONS SHOULD NOT BE READ AS LITERALLY AS THE AIR FORCE READS THEM. THE COMPANY FURTHER STATES THAT THERE IS A VERY SIGNIFICANT NUMBER OF SUBCONTRACTING OPPORTUNITIES IN THIS PROCUREMENT. FAIRCHILD HILLER ALSO DISAGREES WITH THE CONTRACTING OFFICER'S POSITION THAT THE COMPANY'S STATUS AS A PRIOR PRODUCER OF ITEM 5 GAVE IT ACCESS TO THE BEST SOURCES OF SUBCONTRACTING. THE COMPANY ARGUES, TO THE CONTRARY, THAT THE PROCUREMENT ALSO INVOLVES A NEW STYLE AIR CONDITIONER (ITEM 1) REQUIRING NEW SOURCES OF SUPPLY NOT PRESENTLY IN ITS NORMAL PURCHASING CHANNELS. IN THIS RESPECT, FAIRCHILD HILLER ELABORATES: "ANYONE ASSOCIATED WITH THE COMPETITIVE BID PROCESS IS AWARE THAT ANY COMBINATION OF SHOP LOAD, NEW TECHNOLOGY AND/OR DESIRE TO ENTER NEW FIELDS OF ENDEAVOR ARE THE VERY CATALYSTS THAT MAKE THE COMPETITIVE BID SYSTEM WORK SO EFFECTIVELY FOR THE GOVERNMENT.' THE COMPANY STATES IN ADDITION: "* * * A COMPARISON OF THE PRICE FOR THE CURRENT AIR CONDITIONER AND THE NEW AIR CONDITIONER WILL READILY REVEAL THAT THE PRICE DIFFERENTIAL BETWEEN THE TWO IS SUBSTANTIAL AND THIS DISPARITY CAN BE DIRECTLY ATTRIBUTED TO PRICING SUBMITTED BY NEW SOURCES OF SUPPLY. * * *" FAIRCHILD HILLER'S CONCLUSION IS THAT, SINCE THE EFFECT OF THE OMISSION WAS TO GRANT PREFERENCE TO THOSE BIDDERS WHOSE NAMES WERE LISTED IN THE COMMERCE BUSINESS DAILY, THE MAINTENANCE OF THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM REQUIRES CANCELLATION OF THE SECOND STEP.

THE RELEVANT ASPR PROVISION CONCERNING TWO-STEP FORMAL ADVERTISING IS 2- 503.2 (IV), WHICH TATES:

"UPON COMPLETION OF STEP ONE, A FORMALLY ADVERTISED PROCUREMENT IN ACCORDANCE WITH PARTS 2, 3, AND 4 OF THIS SECTION WILL BE CONDUCTED EXCEPT THAT INVITATIONS FOR BIDS --

"/IV) WILL NOT BE SYNOPSIZED (SEE SECTION I, PART 10) OR PUBLICLY POSTED (SEE 2-203.2), EXCEPT THAT THE NAMES OF FIRMS WHICH HAVE SUBMITTED ACCEPTABLE TECHNICAL PROPOSALS IN THE FIRST STEP OF TWO-STEP FORMAL ADVERTISING WILL BE LISTED IN THE COMMERCE BUSINESS DAILY FOR THE BENEFIT OF PROSPECTIVE SUBCONTRACTORS IN ACCORDANCE WITH 1-1003.6 (A) (2).' ASPR 1-1003.6 (A) (2) PROVIDES AS FOLLOWS:

"CONTRACTING OFFICERS SHALL, UNLESS NOT IN THE GOVERNMENT'S INTEREST OR SUBCONTRACTING OPPORTUNITIES DO NOT EXIST, PUBLISH IN THE COMMERCE BUSINESS DAILY THE NAMES AND ADDRESSES OF FIRMS WHICH HAVE SUBMITTED ACCEPTABLE TECHNICAL PROPOSALS IN THE FIRST STEP OF TWO-STEP FORMAL ADVERTISING AND WILL THEREFORE BE ISSUED INVITATIONS FOR BIDS IN THE SECOND STEP (SEE 2-503). SUCH LISTS SHOULD BE FOLLOWED BY A STATEMENT SUBSTANTIALLY AS FOLLOWS: "IT IS SUGGESTED THAT SMALL BUSINESS FIRMS OR OTHERS INTERESTED IN SUBCONTRACTING OPPORTUNITIES IN CONNECTION WITH THIS PROCUREMENT MAKE DIRECT CONTACT WITH THE ABOVE FIRMS.'

IT IS OBVIOUS THAT SECTION 2-503.2 (IV), IN USING THE PHRASE "FOR THE BENEFIT OF PROSPECTIVE SUBCONTRACTORS," WAS DESIGNED WITH THE INTERESTS OF THE NAMED GROUP IN MIND. HOWEVER, TO CONCLUDE THAT SUBCONTRACTORS ALONE ARE BENEFITED BY PUBLICATION IN THE COMMERCE BUSINESS DAILY IS, IN OUR OPINION, TOO NARROW A VIEW. SUCH PUBLICATION IS ALSO BENEFICIAL TO THE GOVERNMENT IN THAT PROSPECTIVE PRIME CONTRACTORS CAN ENTER THEIR BIDS ON THE BASIS OF COMPETITIVE QUOTATIONS FROM INTERESTED SUBCONTRACTORS, WITH THE CONSEQUENCE THAT THE RESULTING PRIME CONTRACT WILL BE AT THE LOWEST AVAILABLE COMPETITIVE PRICE.

BUT THE REAL QUESTION IS NOT FOR WHOSE BENEFIT PUBLICATION IS REQUIRED. RATHER, THE QUESTION IS WHETHER FAIRCHILD HILLER'S COMPETITIVE POSITION WAS PREJUDICED BY THE LISTING OMISSION. WE HAVE NO DOUBT THAT THE POSSIBILITY OF PREJUDICE WAS CREATED. HOWEVER, THE PRECISE DOLLAR EXTENT OF THE ACTUAL PREJUDICE TO FAIRCHILD HILLER IS OPEN TO SPECULATION. APPEARS THAT UNDER SUCH CIRCUMSTANCES THE EXACT EXTENT OF ACTUAL PREJUDICE MAY NOT BE DETERMINED. FOR THE SAME REASON, THE DEGREE IN WHICH THE GOVERNMENT'S INTEREST IN FULL AND FREE COMPETITION WAS PREJUDICED IS CONJECTURAL AND IMPRECISE. SINCE AWARD HAS BEEN MADE AND PERFORMANCE HAS BEEN COMMENCED, THERE ARE OBVIOUS COUNTERVAILING CONSIDERATIONS WHICH, IN THE PRESENT CIRCUMSTANCES, WE BELIEVE TO BE PARAMOUNT. SPECIAL WEIGHT SHOULD BE ACCORDED THE FACT THAT THE OTHER THREE POTENTIAL CONTRACTORS DID HAVE AVAILABLE NATIONWIDE SUBCONTRACT OPPORTUNITIES, AND THEREFORE THERE WAS FULL AND FREE COMPETITION AS BETWEEN THOSE TWO BIDDERS WHO SUBMITTED BIDS. THEREFORE, CANCELLATION OF THE AWARD AND READVERTISEMENT WOULD NOT NOW BE JUSTIFIED BECAUSE OF THE OMISSION OF FAIRCHILD HILLER'S NAME FROM THE COMMERCE BUSINESS DAILY.

WE HAVE OBSERVED NOTHING IN THE RECORD BEFORE US THAT SHOWS THAT ANY CHECK WAS MADE TO DETERMINE WHETHER THE INFORMATION PUBLISHED IN THE COMMERCE BUSINESS DAILY WAS COMPLETE AND ACCURATE. HAD THIS BEEN DONE, THE ERROR COULD HAVE BEEN CORRECTED IN SUFFICIENT TIME TO PREVENT THE POSSIBILITY OF ECONOMIC DISADVANTAGE TO FAIRCHILD HILLER AND THE ATTENDANT PREJUDICE TO THE GOVERNMENT'S INTEREST IN OBTAINING THE MAXIMUM PRACTICABLE COMPETITION. IN THIS CONNECTION, IT IS TO BE OBSERVED THAT IN ACCORDANCE WITH ASPR 2-503, THE CONTRACTING OFFICER "SHALL PUBLISH" THE NAMES OF THE TECHNICALLY ACCEPTABLE POTENTIAL CONTRACTORS. WE DO NOT CONCEIVE THAT IT IS THE INTENT OF SUCH MANDATORY LANGUAGE THAT THE CONTRACTING OFFICER MAY PERFORM THIS FUNCTION BY MERELY SUBMITTING THE INFORMATION FOR PUBLICATION WITHOUT TAKING REASONABLE STEPS TO INSURE THAT IN FACT THE INFORMATION IS PUBLISHED FULLY AND CORRECTLY. OF COURSE, THE DETERMINATION OF A PROPER PROCEDURE IN THIS REGARD IS FOR THE ADMINISTRATIVE AGENCY TO MAKE, AND THE MATTER IS BEING BROUGHT TO YOUR ATTENTION FOR THAT PURPOSE.

AMBIGUITY IN THE INVITATION

FAIRCHILD HILLER CONTACTED THE CONTRACTING OFFICER ON SEVERAL OCCASIONS BETWEEN JANUARY 27 AND 31, 1969, TO EXPRESS ITS APPREHENSION THAT ITS COMPETITORS INTENDED TO EMPLOY A "WICK TYPE" LUBRICATION SYSTEM IN THEIR AIR CONDITIONERS. FAIRCHILD HILLER'S ACCEPTABLE TECHNICAL PROPOSAL HAD BEEN BASED ON A "PNEUMATIC TYPE" LUBRICATION SYSTEM WHICH IS EVIDENTLY MUCH MORE EXPENSIVE THAN THE "WICK TYPE.' THE CONTRACTING OFFICER DETERMINED THAT IT WOULD BE UNFAIR TO REQUIRE FAIRCHILD HILLER TO SUPPLY THE PNEUMATIC SYSTEM WHEN THE COMPETITION WAS ALLOWED TO USE A WICK SYSTEM, AND THAT FAIRCHILD HILLER SHOULD THEREFORE BE GIVEN THE OPTION OF USING EITHER LUBRICATION SYSTEM.

IN ADDITION, THE INVITATION AS ORIGINALLY ISSUED REQUIRED COMPLETE FIRST ARTICLE TESTING. HOWEVER, FAIRCHILD HILLER WAS A PRIOR PRODUCER OF THE AIR CONDITIONER BEING PROCURED UNDER ITEM 5. DUE TO THE SIMILARITY BETWEEN ITEMS 1 AND 5, IT WAS DECIDED THAT ONLY PARTIAL TESTING WOULD BE NECESSARY WITH RESPECT TO FAIRCHILD HILLER. THEREFORE, ON FEBRUARY 3, 1969, THE INVITATION WAS AMENDED. PAGE 2 OF THE AMENDMENT CONTAINED THE FOLLOWING LANGUAGE: "IN ADDITION TO TECHNICAL PROPOSALS PREVIOUSLY SUBMITTED AND APPROVED, THE FOLLOWING IS ADDED TO THE ITEM DESCRIPTION OF ITEMS 1 AND 5: "WITH RESPECT TO LUBRICATION SYSTEM, BIDDERS MAY SUBMIT BIDS ON ITEMS 1 AND 5 BASED ON EITHER PNEUMATIC LUBRICATION OR WICK SYSTEM. HOWEVER, BIDDERS ARE CAUTIONED THAT ANY CHANGE IN METHOD OF LUBRICATION MAY NOT OTHERWISE CHANGE THE APPROVED TECHNICAL PROPOSAL. BIDDERS ARE FURTHER ADVISED THAT ANY CHANGE IN LUBRICATION METHOD WILL NOT BE CONSIDERED AS BASIS FOR ANY FUTURE CLAIMS FOR INCREASED COSTS.' THE AMENDMENT ALSO CHANGED THE PHRASE "COMPLETE FIRST ARTICLE TESTING REQUIRED OF ALL BIDDERS" AS TO ITEM 1 TO READ "BID A FIRST ARTICLE TESTING REQUIRED.'

UNDER ITEM 5 THE AMENDMENT ADDED A PROVISION CONCERNING LUBRICATION METHODS IDENTICAL IN LANGUAGE TO THE PREVIOUSLY QUOTED PROVISION APPEARING UNDER ITEM 1. FINALLY, IN ADDITION TO THE ABOVE CHANGES, THE AMENDMENT ADDED TO THE INVITATION FOUR NEW PAGES, 8A, 8B, 8C, AND 8D AND AMENDED THE ORIGINAL PAGE 8 TO CHANGE THE PHRASE "COMPLETE FIRST ARTICLE TESTING REQUIRED OF ALL BIDDERS" TO READ "BID A FIRST ARTICLE TESTING REQUIRED.'

PAGE 8A ADDED TO ITEM 5 A "BID -B-" UNDER WHICH ONLY PARTIAL FIRST ARTICLE TESTING WAS REQUIRED, INCLUDING ALL PREPRODUCTION TESTS WITH CERTAIN LISTED EXCEPTIONS. PAGE 8B RELATED TO A "BID -C-" ALSO INVOLVING ONLY PARTIAL FIRST ARTICLE TESTING TO CONSIST OF ONLY THE TESTS SPECIFICALLY LISTED THEREUNDER. AT THE BOTTOM OF PAGE 8B WAS THIS SENTENCE: "BIDS SUBMITTED UNDER BID A, BID B OR UNDER BID C ARE EQUALLY ACCEPTABLE TO THE GOVERNMENT, AS APPLICABLE, AND AWARD WILL BE MADE THEREON WITH THE BEST INTEREST OF THE GOVERNMENT CONSIDERED.'

PAGE 8C PROVIDED IN PART AS FOLLOWS:

"NOTICE TO BIDDERS "THE BIDDER AGREES TO A --- PERCENT REDUCTION IN UNIT PRICES IN THE EVENT HE RECEIVES AWARD OF BOTH ITEMS 1 AND 5.' PAGE 8D CONTAINED THIS PROVISION:

"FIRST ARTICLE APPLICABILITY APPLICABLE TO ITEM 5 ONLY "/A) BIDDERS WHO MEET THE CONDITION OF PARA (B) (1) OR (2) BELOW SHALL SUBMIT A BID ON BID -B- OR BID -C- WHICH DOES NOT INCLUDE FULL COMPLIANCE WITH THE FIRST ARTICLE APPROVAL PROVISION SHOWN IN PART VII HEREOF.''B) BIDDERS NOT MEETING THE CONDITION OF PARA (1) OR (2) BELOW SHALL SUBMIT A BID ON BID - A- WHICH INCLUDES COMPLIANCE WITH THE FIRST ARTICLE APPROVAL PROVISION SHOWN IN PART VII HEREOF.

"/1) BIDDERS CURRENTLY IN PRODUCTION OF THE SAME ARTICLES ON AN AIR FORCE CONTRACT, WHO HAVE RECEIVED FIRST ARTICLE APPROVAL UNDER THE CONTRACT PRESENTLY BEING PRODUCED.

"/2) BIDDERS PREVIOUSLY GIVEN FIRST ARTICLE APPROVAL WHO PROPOSE TO PRODUCE THE SAME ARTICLES, PROVIDED THAT NOT MORE THAN 12 MONTHS HAVE ELAPSED SINCE COMPLETION OF THE CONTRACT.''C) BIDDERS ARE REQUESTED TO INDICATE, IN THE SPACE PROVIDED BELOW, WHICH CONDITION IN (B) ABOVE APPLIES AND THE CONTRACT UNDER WHICH THE ARTICLE WAS FURNISHED. IF NO CONDITION CITED IN (B) ABOVE APPLIES, BIDDERS ARE REQUESTED TO SO INDICATE IN THE APPROPRIATE BLOCK BELOW.'' ( CONDITION (B) --- APPLIES UNDER CONTRACT NO. --- DATED ---.'' ( CONDITIONS CITED IN (B) ABOVE DO NOT APPLY.' FAIRCHILD HILLER ARGUES AS FOLLOWS IN ITS LETTER OF FEBRUARY 21, 1969: "* * * SUCH PARAGRAPH ENTITLED -NOTICE TO BIDDERS' APPARENTLY IS SUBJECT TO SEVERAL INTERPRETATIONS. ONE INTERPRETATION IS THAT IT APPLIES TO ITEM 5 BID C ONLY, AND ONLY THOSE BIDDERS ABLE TO COMPLY WITH ITEM 5 BID C ARE ELIGIBLE FOR A RESPONSE TO THIS -NOTICE TO BIDDERS-. THIS WAS A SIGNIFICANT FACTOR IN OUR ULTIMATE DECISION TO BID AGAINST BID C OF ITEM 5 RATHER THAN BID B OF ITEM 5. THE GROUND RULES AS TO BIDDING AGAINST BID B OR BID C ARE FAR FROM CLEAR IN THE BID PACKAGE BY ITSELF, BUT THROUGH PREVIOUS COMMUNICATION WITH THE BUYING OFFICE, IT WAS OUR UNDERSTANDING THAT BID B APPLIED IF A -WICK TYPE- LUBRICATION SYSTEM WAS TO BE USED AND BID C APPLIED IF A PNEUMATIC TYPE- LUBRICATION SYSTEM WAS TO BE USED. THROUGH SUCH PREVIOUS COMMUNICATIONS IT SHOULD BE APPARENT TO THE GOVERNMENT THAT THIS CONTRACTOR INTENDED TO BID USING A -WICK LUBRICATION SYSTEM- RATHER THAN A -PNEUMATIC LUBRICATION SYSTEM- AND, ONLY BY VIRTUE OF OUR INTERPRETATION OF THE APPLICABILITY OF THE ABOVE MENTIONED -NOTICE TO BIDDERS' DID WE DETERMINE THAT BID C WOULD BE OUR BEST OFFER.'ON THE BASIS OF BID OPENING INFORMATION, OTHER INTERPRETATIONS OF THIS BRIEF NOTICE TO BIDDERS' APPARENTLY WERE MADE BY OTHER BIDDERS. INTERPRETATIONS THAT THIS CLAUSE APPLIES TO BID A OF ITEM 5 WERE MADE * * *" THE COMPANY WROTE IN ITS JUNE 6, 1969, LETTER: "REGARDING THE QUESTION OF AMBIGUITY: THERE IS OBVIOUS AMBIGUITY IN THIS IFB. IT IS IMPOSSIBLE TO READ THIS IFB, PARTICULARLY THAT PORTION CONCERNING BID ITEM 5, WITHOUT THE ASSISTANCE OF THE CONTRACTING OFFICER AS TO JUST WHAT BIDS A, B, AND C ACTUALLY MEAN, AND THE APPLICATION OF THE PERCENTAGE FACTOR TO EACH OF THESE BIDS. HOWEVER, WHILE THIS CONFUSION MAY NOT BE SUFFICIENT OF ITSELF TO WARRANT A SET ASIDE, IT IS ONE MORE ASPECT TO BE CONSIDERED IN THE TOTALITY OF DEFECTS AS TO AMOUNT TO AN ILLEGAL AWARD UNDER 10 U.S.C. 2305 (B)"

THE ADMINISTRATIVE REPORT STATES THAT IT IS PLAIN THAT THE "NOTICE TO BIDDERS" APPLIES TO ALL BIDS UNDER ITEMS 1 AND 5 WITHOUT REGARD TO THE FIRST ARTICLE TESTING BASIS UPON WHICH THE BID WAS SUBMITTED. IT IS ALSO POINTED OUT THAT FAIRCHILD HILLER'S CONTENTION ON THIS ISSUE, IF CORRECT, WOULD LEAVE ONLY THAT COMPANY ELIGIBLE TO OFFER A PERCENTAGE PRICE REDUCTION IN THE EVENT OF A SINGLE AWARD FOR BOTH ITEMS 1 AND 5, SINCE IT IS REPORTED THAT ONLY FAIRCHILD HILLER AS A PRIOR PRODUCER COULD HAVE RESPONDED TO BID "C" OF ITEM 5.

WE MUST AGREE WITH THE POSITION TAKEN IN THE ADMINISTRATIVE REPORT. FAIRCHILD HILLER HAS NOT POINTED OUT NOR DO WE SEE ANYTHING IN THE INVITATION WHICH GIVES REASONABLE SUPPORT TO THE FAIRCHILD HILLER INTERPRETATION, EXCEPT POSSIBLY THE PHYSICAL LOCATION OF THE NOTICE IN THE INVITATION. HOWEVER, IF THE GOVERNMENT HAD ACTUALLY INTENDED THE MEANING SUGGESTED BY FAIRCHILD HILLER, A MEANING WHICH WOULD BE CONTRARY TO THE GOVERNMENT'S INTEREST, SUCH AN INTENT WOULD REASONABLY BE EXPECTED TO HAVE BEEN STATED EXPLICITLY.

ON THE OTHER HAND, WE CONSIDER FAIRCHILD HILLER TO BE JUSTIFIED IN CRITICIZING THE INVITATION FOR FAILING TO MAKE CLEAR THE RESPECTIVE CIRCUMSTANCES UNDER WHICH BID "B" AND BID "C" WOULD APPLY. IT DOES NOT APPEAR THAT THIS IS AN OBSCURITY WHICH COULD BE CLARIFIED BY A REASONED STUDY OF THE INVITATION ITSELF. CF. B-165892, MAY 27, 1969, 48 COMP. GEN. ---. BUT SINCE FAIRCHILD HILLER WAS GIVEN ORAL CLARIFICATION BY THE CONTRACTING OFFICER OF THE DISTINCTION BETWEEN BID "B" AND BID "C" -- EXTENT OF FIRST ARTICLE TESTING -- AND SINCE NEITHER OF THE OTHER TWO BIDDERS APPEARS TO HAVE BEEN PREJUDICED BY THESE TERMS OF THE INVITATION, WE FIND NO SUBSTANTIAL BASIS TO AGREE WITH THE POSITION OF FAIRCHILD HILLER.

REAL ULTIMATE COST ANALYSIS

THE THIRD ISSUE PRESENTED BY THIS PROTEST CONCERNS THE REAL ULTIMATE COST METHOD OF EVALUATING BIDS TO DETERMINE WHICH OFFER REPRESENTS THE LOWEST COST TO THE GOVERNMENT. THE MECHANICS OF THE REAL ULTIMATE COST ANALYSIS ARE SET OUT IN PART XIII OF THE INVITATION: "PART XIII - BASIS FOR AWARD: "1. BASIS FOR AWARD. AWARD WILL BE MADE UNDER THE SOLICITATION NO. F41608-69-B-0878 TO THE BIDDER/OFFEROR WHOSE BID OR PROPOSAL WILL RESULT IN THE LOWEST ULTIMATE COST TO THE GOVERNMENT AFTER PRICE AND OTHER FACTORS, INCLUDING LOGISTIC COST, ARE CONSIDERED. THE LOGISTICS B-166315 AND OTHER IMPACT COST FACTORS THAT WILL BE CONSIDERED IN THE EVALUATION OF BIDS/PROPOSALS UNDER THIS SOLICITATION ARE SET FORTH IN PARAGRAPHS 1A AND B, BELOW, AND WILL BE ADDED TO THE BASIC QUOTED PRICE. THE TERMS -PART- AND -ASSEMBLY- ARE AS DEFINED IN CHAPTER 5 AND IN MIL-STD-280. ANY BID OR PROPOSAL WHICH FAILS TO PROVIDE REAL-COST DATA REQUIRED IN THE SOLICITATION WILL BE REJECTED AS BEING NONRESPONSIVE.

"A. STANDARD FACTORS:

"/1) FOR EACH PART INITIALLY INTRODUCED INTO THE INVENTORY - $171.01.

"/2) FOR EACH ASSEMBLY INITIALLY INTRODUCED INTO THE INVENTORY - $233.09.

"B. OTHER COSTS:

"FOR EVALUATION PURPOSES THERE WILL BE ADDED TO CONTRACTOR'S BID/PROPOSAL THE COST OF ONE DEPOT AND 30 FIELD SETS OF NEW ITEMS OF PECULIAR AGE (AEROSPACE GROUND EQUIPMENT) IDENTIFIED BY THE CONTRACTOR IN RESPONSE TO PARAGRAPH 2E, BELOW.'2. EVALUATION DATA. FOR THE PURPOSE OF THE BASIS FOR AWARD (PARAGRAPH 1 ABOVE), THE FOLLOWING WILL BE FURNISHED AS SEPARATE DOCUMENTS CONCURRENTLY WITH THE BID/PROPOSALS:

"A. A LIST IN FIVE COPIES OF ALL PARTS AND BULK ITEMS TO BE USED IN EACH END ITEM AND PECULIAR AGE. THE LISTINGS WILL INCLUDE VENDOR'S (OR MANUFACTURER-S) PART NUMBER, ITEM NAME (BASIC NOUN WITH SIGNIFICANT ADJECTIVE), FEDERAL MANUFACTURER'S CODE, AND FSN (IF KNOWN). INDICATE ON THE FOREGOING LISTING THE RECOMMENDED MAINTENANCE SPARE PARTS, BY LINE ITEM, EXCLUDING BULK ITEMS, THAT THE GOVERNMENT SHOULD STOCK FOR REPAIR OR OVERHAUL OF THE END ITEM AND THE PECULIAR AGE. THE CODE -P- WILL BE USED TO INDICATE EACH RECOMMENDED ITEM.

"B. AN 80-COLUMN PUNCHED CARD FOR EACH PART NUMBER IDENTIFIED TO EACH RECOMMENDED MAINTENANCE SPARE PART. INSTRUCTIONS FOR CARD PUNCHING ARE CONTAINED IN PART HEREIN ENTITLED -BASIS FOR AWARD-.

"C. DRAWINGS, SKETCHES, SPECIFICATIONS, AND TECHNICAL DESCRIPTIONS SUITABLE FOR EVALUATION AND DETERMINATION OF THE LOGISTICS COST FACTOR.

"D. THREE COPIES OF A NUMERICAL MASTER INDEX OF PART NUMBERS FOR ALL ITEMS CONTAINED IN THE LIST REQUIRED BY PARAGRAPH 2A ABOVE.

"E. A LINE-ITEM LISTING OF EACH PECULIAR AND NONSTANDARD ITEM OF FIELD AND DEPOT AGE TO SUPPORT THE END ITEM IN ACCORDANCE WITH THE MAINTENANCE CONCEPT ATTACHED HEREIN. THE LISTING WILL INCLUDE:

"/1) NUMBER OF UNITS.

"/2) PART NUMBER AND NOMENCLATURE.

"/3) UNIT PRICE.

"/4) EXTENDED PRICE.

"F. A LIST OF ITEMS OF PECULIAR AGE PREVIOUSLY PROCURED AND IN THE AIR FORCE INVENTORY TO MAINTAIN AND OVERHAUL THE END ITEM. IN SUBMITTING THE LIST REQUIRED BY THIS PARAGRAPH, THE CONTRACTOR SHALL NOT INCLUDE STANDARD ITEMS NOW IN THE AIR FORCE INVENTORY. IF THE GOVERNMENT DETERMINES DURING THE PERFORMANCE OF THE CONTRACT RESULTING FROM THIS SOLICITATION THAT ADDITIONAL PECULIAR AGE IS REQUIRED NOT RESULTING FROM GOVERNMENT-DIRECTED CHANGES OR ADDITIONAL REQUIREMENTS IN ORDER TO FULLY SUPPORT THE EQUIPMENT BEING PROCURED HEREUNDER, THE CONTRACTOR AGREES TO FURNISH SUCH ADDITIONAL AGE AT CONTRACTOR'S COST WITHOUT PROFIT.

"SCREENING AND KEY-PUNCHING INSTRUCTIONS "*1. PURPOSE OF SCREENING. SCREENING WILL BE ACCOMPLISHED ON A PART NUMBER BASIS TO DETERMINE THE EXISTENCE OF FEDERAL STOCK NUMBERS IN THE AIR FORCE LOGISTICS SYSTEM.'*2. SCREENING ACTIVITY. SCREENING WILL BE ACCOMPLISHED BY HQ AFLC (SGDDPL) AGAINST THE MASTER ITEM IDENTIFICATION CONTROL SYSTEM. SGDDPL WILL, UPON RECEIPT OF DATA REQUESTS FOR REAL COST SOLICITATIONS, GANG-PUNCH AN ALPHA IN POSITION 11 OF EACH CARD DECK TO PROVIDE A CONTROL NUMBER PECULIAR TO EACH BIDDER'S INPUT.'*3. ACTION REQUIRED OF THE CONTRACTOR. THE CONTRACTOR WILL SUBMIT FOR SCREENING ALL PART NUMBERS IDENTIFIED AS RECOMMENDED MAINTENANCE SPARE PARTS. SCREENING DATA WILL BE SUBMITTED BY 80-COLUMN PUNCHED CARD PREPARED IN THE FOLLOWING FORMAT:

* * * * * * * "*4. ACTION REQUIRED OF END-ITEM AMA. TRANSACTION CODE 1501 INDICATES AN UNMATCHED ITEM AND WILL BE CONSIDERED A NEW ITEM IN THE LOGISTICS SYSTEM. ALL OTHER TRANSACTION CODES INDICATE A MATCH CONDITION AND SUCH ITEMS WILL BE CONSIDERED AS ALREADY IN THE AIR FORCE LOGISTICS SYSTEM. ANY INQUIRIES REGARDING THESE PROCEDURES WILL BE DIRECTED TO AFLC (MCSI).'

FAIRCHILD HILLER HAS STATED ITS BELIEF THAT THIS EVALUATION METHOD IS INAPPROPRIATE TO FORMAL ADVERTISING AND WILL NOT ACHIEVE THE DESIRED GOAL OF IDENTIFYING THE TRUE COSTS OF A GIVEN BID. THE OBJECTIVE, IT IS CLAIMED, CAN BE FRUSTRATED BY A BIDDER FAILING TO DECLARE ALL ITEMS WHICH WOULD CONSTITUTE NEW ADDITIONS TO INVENTORY, AND THIS FACT ALLEGEDLY PREVENTS EVALUATION OF THE BIDS WITHIN THE FOUR CORNERS OF THE BID PACKAGE. FAIRCHILD HILLER BELIEVES THAT THIS SYSTEM WORKS TO THE ADVANTAGE OF THE UNSCRUPULOUS BIDDER. THE COMPANY FURTHER STATES THAT USE OF THIS METHOD OF EVALUATION IN ADVERTISED PROCUREMENT WOULD BE APPROPRIATE IF ACCOMPANIED BY SAFEGUARDS TO INSURE THAT EACH SUBMISSION IS "RESPONSIVE TO THE BID REQUIREMENT WITHOUT PREJUDICE TO OTHER BIDDERS.' FAIRCHILD HILLER FURTHER CONTENDS THAT: "IF ONE BIDDER ELECTS NOT TO DECLARE ALL THE NEW PARTS IN HIS SYSTEM BUT MAKES A JUDGMENT THAT IT IS IN HIS BEST INTEREST NOT TO DO SO, HE CAN SELECT THOSE ITEMS HAVING A LARGE DOLLAR IMPACT ON HIS PROFIT, DECLARE THESE, AND OMIT THE LOW PRICED ITEMS SINCE THE PENALTIES USED ARE NOT BASED ON A DOLLAR VALUE OF THE PARTS OMITTED BUT ON A FLAT CHARGE * * *

* * * * * * * "THERE IS NOTHING IN THIS PARTICULAR IFB WHICH ALLOWS FOR AN EVALUATION TO ASSURE THAT A TRUE AND FULL DECLARATION HAS BEEN MADE. IN FACT, IT CANNOT BE MADE WITH ANY CERTAINTY SINCE MANY PARTS WILL HAVE TO REST ON THE JUDGMENT OF EACH BIDDER AS TO WHETHER A NEW PART IS REQUIRED OR AN OLD ONE WILL MEET THE NEED. AND, SINCE THE DECISION CAN BE MADE WITH LITTLE IMPACT ON THE BIDDER'S PRICE, THE JUDGMENT WILL ALWAYS BE IN THE BIDDER'S FAVOR. SECONDLY, WHEREAS HERE, IT IS A TWO STEP PROCUREMENT, NO REAL COMPARISON CAN BE MADE BETWEEN EACH BIDDER'S SUBMITTALS TO ASSURE COMPLIANCE WITH THE INTENT OF THE REQUIREMENT, FOR EACH BIDDER IS BIDDING HIS OWN SYSTEM INDEPENDENT OF OTHER BIDDERS.'

FAIRCHILD HILLER CONCLUDES THAT WHAT RESULTS FROM THIS EVALUATION PROCESS IS NOT A FIXED-PRICE CONTRACT SINCE THE DOLLAR AMOUNT IS NOT READILY DETERMINABLE AT THE TIME OF AWARD; THAT THIS VIOLATES THE FIRM FIXED-PRICE REQUIREMENT OF ASPR 2-104.1; AND THAT THE ADVERTISED PROCUREMENT IS THEREFORE TRANSFORMED INTO A NEGOTIATED PROCUREMENT.

THE ADMINISTRATIVE REPORT EMPHASIZES THAT WITHOUT THE APPLICATION OF THE REAL ULTIMATE COST ANALYSIS THE DIFFERENCE BETWEEN THE FAIRCHILD HILLER BID AND THAT OF THE LOW BIDDER WOULD HAVE BEEN GREATER BECAUSE THE LOW BID WAS FOUND TO INTRODUCE MORE NEW ITEMS INTO THE AIR FORCE INVENTORY THAN FAIRCHILD HILLER'S AND, THEREFORE, THE EVALUATION FACTOR ADDED TO FAIRCHILD HILLER'S BID WAS LESS THAN THAT ADDED TO THE OTHER COMPANY'S BID. THE REPORT ALSO STATES THAT THE EVALUATION METHOD IS APPROPRIATE FOR USE IN FORMALLY ADVERTISED PROCUREMENTS SINCE IT HELPS DETERMINE THE AWARD MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. 10 U.S.C. 2305 (C).

THE AIR FORCE REPORT CONTAINS A LETTER CONCERNING ANOTHER PROCUREMENT IN WHICH THE REAL ULTIMATE COST METHOD OF EVALUATION WAS EMPLOYED. THAT LETTER OUTLINES THE PURPOSE AND BASIS OF THE EVALUATION: "5. THE PURPOSE OF AFSCR 400-1/AFLCR 400-20 IS TO OBTAIN FOR THE AIR FORCE THE POTENTIAL BENEFITS OF COMPETITIVE PROCUREMENTS WHILE ACHIEVING AS MUCH STANDARDIZATION AS POSSIBLE TO KEEP THE NUMBER OF ITEMS IN THE AF INVENTORY AT A MINIMUM. TO ACHIEVE THIS, IT IS NECESSARY FOR THE AF TO BASE ITS ITEM ACQUISITION DECISION UPON CONSIDERATION OF REAL OR ULTIMATE COSTS IN ADDITION TO LOWEST BID PRICE. CONSIDERATION MUST, THEREFORE, INCLUDE IDENTIFIABLE MAJOR COSTS NOT ONLY CONCERNED WITH THE INTRODUCTION OF NEW ITEMS INTO THE AF INVENTORY, BUT THOSE COSTS ASSOCIATED WITH THE MANAGEMENT, SUPPLY, MAINTENANCE AND TRANSPORTATION FUNCTIONS PLUS THE COSTS ASSOCIATED WITH CATALOGUING, STANDARDIZING, RECEIVING, RECORDING AND STORING THE ITEMS.'6. THE SAN ANTONIO AIR MATERIEL AREA, WITH THE APPROVAL OF HQ AIR FORCE LOGISTICS COMMAND, HAS DETERMINED THAT THE GENERATING AND CHARGING PLANT CALLED FOR UNDER THIS SOLICITATION MET THE CRITERIA FOR APPLICATION OF THE REAL COST COMPETITION CONCEPT OUTLINED IN THE REGULATION. PROVISIONS WERE INCLUDED IN THE SOLICITATION ADVISING PROSPECTIVE BIDDERS OF THE METHOD BY WHICH ULTIMATE OR REAL COSTS WOULD BE USED IN THE EVALUATION OF BIDS AND OF THE DATA TO BE FURNISHED BY BIDDERS FOR THIS PURPOSE. THE SOLICITATION REQUIRES DATA IN SUFFICIENT DETAIL TO PERMIT COMPARISON OF ITEMS OFFERED BY EACH BIDDER WITH ITEMS PRESENTLY IN THE AF INVENTORY AS SET FORTH IN THE AF MASTER ITEM IDENTIFICATION SYSTEM COMPUTER FILE TO DETERMINE WHICH ITEMS BID, ARE NEW ITEMS. TO ACCOMPLISH THIS IT IS NOT REQUIRED THAT BIDDERS KNOW WHAT ITEMS ARE IN THE AIR FORCE INVENTORY. AN ITEM IS CONSIDERED NEW WHEN A FEDERAL STOCK NUMBER (FSN) IS NOT IN EXISTENCE FOR THE ITEMS OFFERED. MOREOVER, IT IS POSSIBLE THAT NUMEROUS MANUFACTURER'S PART NUMBERS ARE APPLICABLE TO ONE FSN.' ALTHOUGH FAIRCHILD HILLER BELIEVES THAT AN UNSCRUPULOUS OR DESPERATE BIDDER CAN TAKE UNFAIR ADVANTAGE OF THE REAL ULTIMATE COST METHOD OF EVALUATION, WE DO NOT SEE SUCH A RESULT AS BEING LIKELY OR EVEN REASONABLY POSSIBLE. THE CONTRARY, WE BELIEVE THAT THERE ARE SUFFICIENT SAFEGUARDS IN THIS EVALUATION METHOD TO ASSURE HONEST BIDDERS THAT THEIR COMPETITIVE POSITIONS WILL NOT BE PREJUDICED BY AN IRRESPONSIBLE AND UNETHICAL BIDDER UNDERSTATING THE NUMBER OF NEW PARTS WHICH WOULD BE INTRODUCED INTO THE AIR FORCE INVENTORY BY ACCEPTANCE OF HIS BID. THE FIRST NOTEWORTHY POINT IS THAT THE BIDDER IS NOT THE ONE WHO DIRECTLY DETERMINES WHETHER OR NOT A GIVEN PART WILL REPRESENT AN ADDITION TO THE AIR FORCE INVENTORY. THE DETERMINATION IS MADE BY A COMPUTERIZED SCREENING OPERATION CONDUCTED BY HEADQUARTERS, AIR FORCE LOGISTICS COMMAND. SEE IN THIS REGARD PARAGRAPHS 2 AND 4 OF THE "SCREENING AND KEY-PUNCHING INSTRUCTIONS," QUOTED ABOVE.

IT IS TRUE THAT THE SCREENING OPERATION IS APPLIED ONLY TO PARTS WHICH THE BIDDER HAS ,RECOMMENDED" FOR STOCKING BY THE GOVERNMENT FOR REPAIR OR OVERHAUL OF THE END ITEM AND THE PECULIAR AND NONSTANDARD ITEMS OF FIELD AND DEPOT AGE ASSOCIATED WITH THE END ITEM. IT IS THEREFORE ARGUABLE THAT THE UNDESIRABLE RESULT FORESEEN BY FAIRCHILD HILLER COULD COME ABOUT BY A BIDDER FAILING TO RECOMMEND FOR STOCKING A PART WHICH HE KNOWS OR BELIEVES IS NOT IN THE AIR FORCE INVENTORY. HOWEVER, WE THINK THAT THIS VIEW OVERLOOKS SEVERAL IMPORTANT FACTS.

FIRST, EACH BIDDER MUST FURNISH, UNDER PARAGRAPH 2 (A) OF PART XIII, FIVE COPIES OF A LIST OF ALL PARTS TO BE USED IN EACH END ITEM AND PECULIAR AGE. CERTAIN DETAILED INFORMATION IS REQUIRED WITH RESPECT TO EVERY ITEM ON THE LIST. SECOND, PARAGRAPH 2 (C) REQUIRES SUBMISSION OF "DRAWINGS, SKETCHES, SPECIFICATIONS, AND TECHNICAL DESCRIPTIONS SUITABLE FOR EVALUATION AND DETERMINATION OF THE LOGISTICS COST FACTOR.' IT IS THEREFORE APPARENT THAT THE PURPOSE OF THE REQUIREMENT IN PARAGRAPH 2 (C) IS TO AFFORD A BASIS FOR AN INDEPENDENT EVALUATION OF THE REAL ULTIMATE COST FACTOR. HAD THE GOVERNMENT INTENDED TO RELY SOLELY UPON THE RECOMMENDATIONS OF THE BIDDERS AS TO SPARE PARTS TO BE STOCKED, PARAGRAPH 2 (C) WOULD SEEM TO BE SUPERFLUOUS. AT A MINIMUM, THE REQUIREMENT FOR DRAWINGS AND OTHER TECHNICAL DATA "SUITABLE" FOR EVALUATING THE LOGISTICS COST FACTOR WOULD PERMIT REVIEW BY GOVERNMENT TECHNICAL PERSONNEL OF THE BIDDER'S RECOMMENDATIONS TO DETERMINE WHETHER THEY ARE REALISTIC AND REASONABLY SUFFICIENT. THEREFORE, IN OUR OPINION, THE AVAILABILITY OF A METHOD TO REVIEW A BIDDER'S RECOMMENDATIONS CONCERNING SPARE PARTS PROVIDES REASONABLE ASSURANCE THAT BIDDERS' RECOMMENDATIONS WILL BE FAIR AND RELIABLE AND THAT THE REAL ULTIMATE COST ANALYSIS WILL NOT OPERATE TO THE ADVANTAGE OF THE UNETHICAL BIDDER AT THE EXPENSE OF THE HONEST BIDDERS.

NEVERTHELESS, THERE IS ONE ASPECT OF THE METHOD WHICH WE BELIEVE NEEDS SOME ATTENTION. THERE IS NO EXPRESS PROVISION GOVERNING A SITUATION WHERE THE PROCUREMENT AGENCY DETERMINES, ON THE BASIS OF DATA SUPPLIED PURSUANT TO PARAGRAPH 2 (C), THAT A BIDDER'S RECOMMENDATIONS CONCERNING SPARES TO BE STOCKED ARE UNREALISTICALLY LOW IN LIGHT OF REASONABLY PREDICTABLE REPAIRS. IT APPEARS DESIRABLE TO STATE CLEARLY WHAT ACTION WOULD BE APPROPRIATE IN THE CASE OF SUCH A BIDDER.

AWARD BASED ON URGENCY

FAIRCHILD HILLER IN ITS LETTER OF JUNE 6, 1969, ARGUES VIGOROUSLY THAT AWARD OF A CONTRACT ON BOTH ITEMS 1 AND 5 ON THE BASIS OF URGENCY IS NOT JUSTIFIABLE. IN VIEW OF THE CONCLUSIONS REACHED ON THE THREE OTHER ISSUES IN THIS CASE, AND SINCE THE MATTER OF URGENCY IS NOT ORDINARILY SUBJECT TO QUESTION BY BIDDERS, WE DO NOT THINK IT NECESSARY FOR US TO GIVE DETAILED TREATMENT TO THIS ISSUE. IN THIS CONNECTION, SEE ASPR 2-407.9 (B) (3) (I).

THEREFORE, WE FIND NO BASES FOR OBJECTION TO THE VALIDITY OF THE CONTRACT AWARDED TO UNITED AIRCRAFT PRODUCTS, INC. ..END :