B-166705, JUL. 30, 1969

B-166705: Jul 30, 1969

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PROTESTANT WHO WAS THE INCUMBENT CONTRACTOR PROTESTS LACK OF COMMON STANDARD FOR MINIMUM WAGE RATES REQUIRED BY GREEK LAW. EACH CONTENTION IS DISCUSSED AND FOUND TO BE WITHOUT BASIS FOR OBJECTION TO AWARD. TO PAUL AND GORDON: REFERENCE IS MADE TO YOUR TELEGRAM OF APRIL 18. GOVERNMENT ESTIMATE OF MANNING REQUIREMENTS: THE GOVERNMENT'S ESTIMATE OF THE NUMBER OF EMPLOYEES PROBABLY NECESSARY FOR SATISFACTORY ACCOMPLISHMENT OF THE CONTRACT IS SET FORTH BELOW. ESTIMATE IS SHOWN FOR EACH APPENDIX AND ORGANIZATION. BECAUSE ANY SUCH FIGURE WOULD BE SO ARBITRARY AS TO HAVE NO MEANING. THIS ESTIMATE IS MADE ONLY FOR THE PURPOSE OF ASSISTING THE BIDDERS AND THE GOVERNMENT ACCEPTS NO RESPONSIBILITY FOR THE ACCURACY OF THE FIGURES.

B-166705, JUL. 30, 1969

BID PROTEST - OVERSEAS MAINTENANCE SERVICE CONTRACT DECISION DENYING PROTEST OF THE TUMPANE CO., INC., ONE OF TWO LOW OFFERORS, AGAINST AWARD UNDER NEGOTIATED PROCEDURES ISSUED FOR MAINTENANCE SERVICES FOR AN AIR FORCE BASE IN ATHENS, GREECE TO PACIFIC ARCHITECTS AND ENGINEERS. PROTESTANT WHO WAS THE INCUMBENT CONTRACTOR PROTESTS LACK OF COMMON STANDARD FOR MINIMUM WAGE RATES REQUIRED BY GREEK LAW, REQUEST FOR PROPOSALS PERMITTED OFFERORS TO MAKE THEIR OWN ESTIMATES OF MANNING REQUIREMENTS AND POSSIBLE "BUY IN" BY THE SUCCESSFUL CONTRACTOR. EACH CONTENTION IS DISCUSSED AND FOUND TO BE WITHOUT BASIS FOR OBJECTION TO AWARD.

TO PAUL AND GORDON:

REFERENCE IS MADE TO YOUR TELEGRAM OF APRIL 18, 1969, AND YOUR LETTERS OF APRIL 23 AND 30 AND JUNE 10 AND 20, 1969, PROTESTING ON BEHALF OF THE TUMPANE COMPANY, INC., AGAINST THE AWARD OF A CONTRACT TO ANY OTHER COMPANY UNDER REQUEST FOR PROPOSALS (RFP) NO. F61173-69-R 0018, ISSUED BY THE BASE PROCUREMENT OFFICE, 7206TH SUPPORT GROUP, APO NEW YORK 09223 (UNITED STATES AIR FORCE, ATHENS, GREECE).

THE SUBJECT RFP, ISSUED ON NOVEMBER 18, 1968, SOLICITED OFFERS FOR BASE MAINTENANCE SERVICES IN GREECE AND CRETE AND ADJACENT 486L SITES. INSTRUCTIONS TO PROPOSERS UNDER THE RFP PROVIDED AS FOLLOWS UNDER PARAGRAPH 8, AS AMENDED: "8. GOVERNMENT ESTIMATE OF MANNING REQUIREMENTS: THE GOVERNMENT'S ESTIMATE OF THE NUMBER OF EMPLOYEES PROBABLY NECESSARY FOR SATISFACTORY ACCOMPLISHMENT OF THE CONTRACT IS SET FORTH BELOW. ESTIMATE IS SHOWN FOR EACH APPENDIX AND ORGANIZATION. THE ESTIMATION EXCLUDES ANY CONSIDERATION OF THE MANPOWER NECESSARY FOR SUPERVISORY OR GENERAL MANAGEMENT FUNCTIONS, BECAUSE ANY SUCH FIGURE WOULD BE SO ARBITRARY AS TO HAVE NO MEANING. THIS ESTIMATE IS MADE ONLY FOR THE PURPOSE OF ASSISTING THE BIDDERS AND THE GOVERNMENT ACCEPTS NO RESPONSIBILITY FOR THE ACCURACY OF THE FIGURES. EACH BIDDER MAY USE THE ESTIMATE IN WHATEVER MANNER HE DEEMS NECESSARY IN MAKING HIS OWN ESTIMATE OF NECESSARY MANNING:

"APPENDIX ORGANIZATION NUMBER OF PERSONNEL

A 7206TH SUPPORT GROUP 180-240

A DET 3, 7206TH SUPPORT GROUP 7-9

A DET 4, 7206TH SUPPORT GROUP 6-8

A DET 5, 7206TH SUPPORT GROUP 6-8

A DET 6, 7206TH SUPPORT GROUP 5-7

A 6931ST SECURITY GROUP 105-145

B 7206TH SUPPORT GROUP 95-125

B DET 3, 7206TH SUPPORT GROUP 2-4

B DET 4, 7206TH SUPPORT GROUP 2-4

B DET 5, 7206TH SUPPORT GROUP 2-4

B DET 6, 7206TH SUPPORT GROUP 2-4

B 6931ST SECURITY GROUP 37-45

C 7206TH SUPPORT GROUP 2-4

D 6931ST SECURITY GROUP 36-46

D DET 3, 7206TH SUPPORT GROUP 3-5

DDET 4, 7206TH SUPPORT GROUP 3-5

D DET 5, 7206TH SUPPORT GROUP 3-5

D DET 7, 7206TH SUPPORT GROUP 3-5

E 6931ST SECURITY GROUP 1-3" PARAGRAPH 15 OF THE INSTRUCTIONS FURTHER PROVIDED, IN PERTINENT PART, THAT: "B. PART II, THE MANAGEMENT PROPOSAL

"/4) * * * PROPOSERS WILL INCLUDE SPECIFIC CONTINUING AND INHERENT ORGANIZATIONAL AND MANAGEMENT ACTIONS CONTEMPLATED TO ACHIEVE, WITHIN THE WORKFORCE, A LEVEL OF COMPETENCE THROUGH WHICH STANDARDS OF SERVICE EQUIVALENT TO THOSE IMPLIED THROUGH INCORPORATED UNITED STATES REGULATIONS AND MANUALS WILL BE REALIZED. * * * FURTHER, THIS PLAN WILL INDICATE ORGANIZATIONAL AND MANAGEMENT ACTIONS CONTEMPLATED TO ACHIEVE MAXIMUM EFFICIENCY FROM THE PROPOSED WORKFORCE * * * TO ACHIEVE MAXIMUM EFFICIENCY. * * *"

ALSO PERTINENT TO YOUR PROTEST, THE RFP INCLUDED THE FOLLOWING PROVISION UNDER SECTION 7 OF THE SCOPE OF WORK: "SECTION 7, LABOR RELATIONS AND STANDARDS

"A. THE PROVISIONS OF THIS CONTRACT AND PERFORMANCE HEREUNDER SHALL BE SUBJECT TO AND IN ACCORDANCE WITH THE LAWS OF THE GOVERNMENT OF GREECE, WHICH GOVERN THE HOURS, WAGES, LABOR RELATIONS, INCLUDING WORKMEN'S COMPENSATION, WORKING CONDITIONS, AND OTHER MATTERS PERTAINING TO LABOR. WAGE RATES MUST BE EQUAL TO OR BETTER THAN THE GREEK MINISTRY OF LABOR REQUIREMENTS FOR THE JOB CLASSIFICATION WHERE WAGES ARE SPECIFIED.' ADDITION, PARAGRAPH 6 OF THE INSTRUCTIONS TO PROPOSERS REQUIRED THAT ALL PROSPECTIVE PROPOSERS ATTEND A PREPROPOSAL BRIEFING AND VISIT CERTAIN SITES AT WHICH THE CONTRACT WOULD BE PERFORMED.

THE RECORD SHOWS THAT SEVEN FIRMS RESPONDED TO THE RFP. INITIAL PROPOSALS WERE RECEIVED FROM TUMPANE IN THE AMOUNT OF $1,619,837 AND FROM PACIFIC ARCHITECTS AND ENGINEERS (PAE) IN THE AMOUNT OF $1,326,665. THE FIVE OTHER PROPOSALS RECEIVED RANGED IN AMOUNTS FROM $1,766,979 TO $1,996,424. IN ACCORDANCE WITH THE REQUIREMENTS OF PARAGRAPH 3-805.1/A) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), NEGOTIATIONS WERE CONDUCTED WITH TUMPANE AND PAE, THE TWO LOW OFFERORS WITHIN A COMPETITIVE RANGE, PRICE AND OTHER FACTORS CONSIDERED. FOLLOWING SUCH NEGOTIATION, REVISED PROPOSALS WERE SUBMITTED IN THE AMOUNTS OF $1,816,100 AND $1,650,266 FROM TUMPANE AND PAE, RESPECTIVELY. THEREAFTER, AWARD OF CONTRACT WAS MADE TO PAE AS THE LOWEST RESPONSIBLE OFFEROR ON APRIL 15, 1969.

IN YOUR TELEGRAM OF APRIL 18, 1969, TO OUR OFFICE, YOU PROTESTED AGAINST AWARD OF CONTRACT TO ANY COMPANY OTHER THAN TUMPANE BECAUSE OF "SIGNIFICANT IRREGULARITIES" IN THIS PROCUREMENT. YOUR FIRST CONTENTION IS THAT THERE EXISTED NO COMMON STANDARD FOR PROPOSERS WITH REGARD TO MINIMUM WAGE RATES AND BENEFITS SINCE TUMPANE WAS REQUIRED BY GREEK LAW TO PROPOSE AND TO PAY HIGHER WAGE RATES AND BENEFITS THAN ANY OTHER PROPOSER. AS A RESULT, YOU ASSERT THAT TUMPANE, AS THE INCUMBENT CONTRACTOR, WAS PLACED IN AN UNFAIR COMPETITIVE POSITION, SINCE OTHER PROPOSERS COULD, IN THEORY, BASE THEIR BID PRICES ON MINIMUM GREEK WAGE RATES. WHILE IT IS TRUE THAT SECTION 7 OF THE RFP SCHEDULE PROVIDED THAT PROPOSED WAGE RATES MUST BE EQUAL TO OR BETTER THAN THE GREEK MINISTRY OF LABOR REQUIREMENTS FOR JOB CLASSIFICATION, WE DO NOT FEEL THAT THIS REQUIREMENT WAS PREJUDICIAL TO YOUR FIRM. AS A MATTER OF FACT, BOTH TUMPANE AND PAE PROPOSED WAGES HIGHER THAN THE MINIMUM WAGES REQUIRED BY GREEK LAW. IN THIS RESPECT, THE RECORD SHOWS THE ANNUAL WAGES TO BE PAID GREEK NATIONAL LABORERS BY TUMPANE AND PAE IN 16 JOB CLASSIFICATIONS. THESE 16 CLASSIFICATIONS REPRESENT OVER 46 PERCENT OF THE POSITIONS HELD BY GREEK NATIONALS UNDER TUMPANE'S PRIOR CONTRACT. IN 13 OF THESE 16 CLASSIFICATIONS, THE DIFFERENCE IN ANNUAL WAGES PROPOSED BY PAE AND TUMPANE IS LESS THAN $200. IN FACT, PAE PROPOSED THE HIGHER RATE IN 8 CLASSIFICATIONS AND TUMPANE PROPOSED THE HIGHER RATE IN 4 CLASSIFICATIONS. OF THE REMAINING THREE CLASSIFICATIONS, PAE PROPOSED AN ANNUAL WAGE OF $622 HIGHER THAN TUMPANE FOR DRAFTSMEN AND TUMPANE PROPOSED TO PAY UP TO AN ANNUAL WAGE OF $630 MORE FOR EACH OF THE TWO JOB CLASSIFICATIONS FOR COOKS. THEREFORE, AS A PRACTICAL MATTER, PAE'S PROPOSED WAGE RATES DID NOT VARY SIGNIFICANTLY FROM THOSE PROPOSED BY TUMPANE. HENCE, FROM THE RECORD BEFORE US, WE MAY NOT CONCLUDE THAT YOUR FIRM WAS PLACED IN AN UNFAIR POSITION VIS-A-VIS PAE IN RESPECT TO THE RFP FOREIGN WAGE REQUIREMENT.

YOUR NEXT CONTENTION IS THAT THE RFP (PARAGRAPH 8) REQUIRED PROPOSERS TO MAKE THEIR OWN ESTIMATES OF MANNING NEEDED TO PERFORM THE CONTRACT YET, DURING NEGOTIATIONS, TUMPANE WAS DIRECTED" BY CONTRACTING OFFICIALS TO INCREASE ITS OWN ESTIMATE OF MANNING. THIS, YOU CONTEND, WAS ACCOMPLISHED WITHOUT WRITTEN AMENDMENT OF THE RFP IN VIOLATION OF ASPR 3-505 (C) AND 3- 805.1 (E).

UNDER THE RFP, THE SUCCESSFUL PROPOSER MUST SUPERVISE AND CONTROL THE EMPLOYEES TO ACHIEVE MAXIMUM EFFICIENCY AND PAYMENT UNDER THE RESULTING CONTRACT IS BASED ON THE PERFORMANCE OF THE SERVICES REQUIRED AND NOT THE NUMBER OF PERSONNEL EMPLOYED. HOWEVER, A MAJOR FACTOR IN DETERMINING THE CAPACITY OF A FIRM TO PERFORM THESE SERVICES IS THE NUMBER AND TYPES OF PERSONNEL PROPOSED TO PERFORM THE REQUIRED SERVICES AT EACH LOCATION. ASSIST PROPOSERS IN ESTIMATING MANNING REQUIREMENTS THAT THE GOVERNMENT CONSIDERED PROBABLY NECESSARY TO SATISFACTORILY ACCOMPLISH THE CONTRACT, SECTION 8 OF THE INSTRUCTIONS TO PROPOSERS ENTITLED "GOVERNMENT ESTIMATE OF MANNING REQUIREMENTS" WAS INCLUDED IN THE RFP. THIS PROVISION ESTIMATED THE BROAD RANGE OF PERSONNEL THE GOVERNMENT CONSIDERED PROBABLY NECESSARY FOR SATISFACTORY ACCOMPLISHMENT OF THE SERVICES CALLED FOR UNDER THE PROPOSED CONTRACT AND CLEARLY INSTRUCTED PROPOSERS TO SUBMIT THEIR OWN ESTIMATE OF NECESSARY MANNING. AN ACCEPTABLE NUMBER OF EMPLOYEES WAS NOT REQUIRED BY THE RFP AND THE GOVERNMENT ESTIMATE WAS MADE ONLY FOR THE PURPOSE OF ASSISTING OFFERORS IN PREPARING THEIR PROPOSALS FOR FURTHER NEGOTIATION. ALSO, PROSPECTIVE PROPOSERS HAD BEEN INSTRUCTED THAT COMPANIES PROPOSING A MANNING FIGURE NEAR THE LOWER ESTIMATED NUMBER (500) OF EMPLOYEES WOULD HAVE TO EXPLAIN IN DETAIL HOW THAT PROPOSER EXPECTED TO PERFORM THE REQUIRED SERVICE.

IN ITS INITIAL PROPOSAL, TUMPANE PROPOSED TO PERFORM THE REQUIRED SERVICES WITH 509 EMPLOYEES. THIS WAS 15 PERCENT LESS THAN THE NUMBER OF PERSONNEL ACTUALLY UTILIZED BY TUMPANE IN PERFORMING THE EXISTING CONTRACT FOR PRACTICALLY THE SAME SERVICES. THIS PROPOSED QUANTITY WAS NEAR THE LOWER LIMITS (500) OF THE TOTAL NUMBER OF PERSONNEL ESTIMATED BY THE GOVERNMENT AS NECESSARY TO PERFORM THE SERVICES. DURING NEGOTIATIONS, THE CONTRACTING OFFICER CALLED TUMPANE'S ATTENTION TO AREAS WHERE THE CONTRACTING OFFICER BELIEVED TUMPANE'S MANNING MIGHT BE INADEQUATE. AS A RESULT THEREOF, TUMPANE INCREASED ITS MANNING PROPOSAL TO 570 PERSONNEL.

YOU HAVE CITED ASPR 3-505 (C) AND 3-805.1 (E) FOR THE PROPOSITION THAT AN AMENDMENT TO THE RFP SHOULD HAVE BEEN ISSUED BY THE PROCUREMENT OFFICE TO SET FORTH THE ACTUAL NUMBER OF PERSONNEL DEEMED NECESSARY BY THE GOVERNMENT TO PERFORM THE CONTRACT REQUIREMENTS. ASPR 3-805.1 (E) PROVIDES IN PERTINENT PART THAT:

"/E) WHEN, DURING NEGOTIATIONS, A SUBSTANTIAL CHANGE OCCURS IN THE GOVERNMENT'S REQUIREMENTS OR A DECISION IS REACHED TO RELAX, INCREASE OR OTHERWISE MODIFY THE SCOPE OF THE WORK OR STATEMENT OF REQUIREMENTS, SUCH CHANGE OR MODIFICATION SHALL BE MADE IN WRITING AS AN AMENDMENT TO THE REQUEST FOR PROPOSAL OR REQUEST FOR QUOTATIONS, AND A COPY FURNISHED TO EACH PROSPECTIVE CONTRACTOR. SEE 3-505 AND 3-507. * * *"

HOWEVER, NOTHING IN THE RECORD SHOWS THAT ANY SUBSTANTIAL CHANGE IN THE GOVERNMENT'S ESTIMATE OF MANNING REQUIREMENTS AROSE THEREBY NECESSITATING THE ISSUANCE OF AN AMENDMENT. RATHER, IT IS QUITE CLEAR THAT THE AMOUNT OF MANNING WAS GENERALLY LEFT TO THE INDIVIDUAL PROPOSERS WITHIN THE GUIDELINES PRESCRIBED BY THE RFP. ALSO, MANNING PROPOSALS WHICH VARIED FROM THE GOVERNMENT'S ESTIMATE WITHIN REASONABLE LIMITS WERE PROPER SUBJECTS OF NEGOTIATION UNDER THE ASPR. THE PROCUREMENT AGENCY CONDUCTED NEGOTIATIONS WITH BOTH TUMPANE AND PAE AND AFTER THE CLOSE OF NEGOTIATIONS AND EVALUATION AWARDED THE CONTRACT TO PAE BECAUSE ITS FINAL PRICE WAS LOWER THAN TUMPANE-S. MOREOVER, THE NEGOTIATING TEAM DID NOT RESTRICT ITS DESIRES AS TO ADDITIONAL MANNING TO TUMPANE ALONE. THE NEGOTIATING TEAM ALSO QUESTIONED PAE'S PROPOSED MANNING WHERE WARRANTED. THIS IS SHOWN BY CHANGES IN THE REVISED MANNING PROPOSAL SUBMITTED BY PAE WHEREIN IT INCREASED ITS PROPOSED MANNING FROM 593 TO 600 PERSONNEL. WHILE THIS APPEARS TO BE ONLY AN OVERALL INCREASE OF 7 PERSONS, PAE'S REVISED MANNING FIGURES FOR APPENDIX "A" WORK AT CRETE WAS INCREASED BY 25 PERSONNEL.

WE VIEW THE INFORMATION TO BE SECURED FROM AN OFFEROR'S MANNING CHART AS AN AID TO THE CONTRACTING OFFICER IN DETERMINING WHETHER THE OFFEROR IS WITHIN A COMPETITIVE RANGE FOR NEGOTIATION PURPOSES. THE GOAL OF THIS NEGOTIATED PROCUREMENT WAS TO PROCURE SERVICES FROM A RESPONSIBLE SOURCE AT FAIR AND REASONABLE PRICES WHICH ARE CALCULATED TO RESULT IN THE LOWEST ULTIMATE OVERALL COST TO THE GOVERNMENT. SEE ASPR 3-801.1. IN ADDITION, ASPR 3-806 (A) STATES THAT "THE OBJECTIVE OF THE CONTRACTING OFFICER SHALL BE TO NEGOTIATE FAIR AND REASONABLE PRICES IN WHICH DUE WEIGHT IS GIVEN TO ALL RELEVANT FACTORS, INCLUDING THOSE IN 3-101.' ASPR 3-101 STATES THAT WHEN NEGOTIATIONS ARE ENTERED INTO DUE ATTENTION SHALL BE GIVEN TO A NUMBER OF FACTORS, INCLUDING "CONSIDERATION OF THE SOUNDNESS OF PROSPECTIVE CONTRACTORS' MANAGEMENT OF LABOR RESOURCES, INCLUDING WAGE RATES, NUMBER OF WORKERS AND TOTAL ESTIMATED LABOR HOURS.' ASPR 3-101 (XV). THUS, IT IS EVIDENT THAT THE DETERMINATION OF AN APPROPRIATE LEVEL OF MANNING NECESSARY TO PERFORM THE WORK UNDER A PROPOSED PROCUREMENT IS A LEGITIMATE AND NECESSARY SUBJECT FOR NEGOTIATION.

TUMPANE ALSO MAINTAINS THAT, AS A DIRECT CONSEQUENCE OF THE GOVERNMENT'S ACTION OF QUESTIONING ITS MANNING FIGURES DURING NEGOTIATIONS, IT INCREASED ITS ORIGINAL PRICE OF $1,619,837, WHICH WAS LOW, TO $1,816,100, AND FOLLOWING NEGOTIATIONS INCREASED ITS PROPOSED MANNING FROM 509 TO 570 PERSONNEL. THESE PRICES INCLUDE THE PRICES OF LABOR, ALL INDIRECT EXPENSES AND PROFIT. HOWEVER, THE RECORD SHOWS THAT THE PRICE FOR ALL LABOR INITIALLY PROPOSED BY TUMPANE WAS $1,356,213 AS COMPARED TO THE PRICE OF $1,251,186 INITIALLY PROPOSED BY PAE. TUMPANE'S PROPOSAL WAS INITIALLY HIGHER ON THIS BASIS BY $105,027. HOWEVER, FOLLOWING NEGOTIATIONS, TUMPANE PROPOSED A REVISED TOTAL PRICE FOR LABOR OF $1,524,846, WHICH IS $33,979 LESS THAN PAE'S REVISED PRICE OF $1,558,825 FOR LABOR. WE FIND NOTHING IN THESE PRICE REVISIONS WHICH SUGGESTS THAT TUMPANE WAS TREATED INEQUALLY IN THE NEGOTIATION PROCESS OR THEREAFTER. IN CONNECTION WITH THE FOREGOING PRICES, TUMPANE INITIALLY PROPOSED $263,624 FOR ALL INDIRECT COST AND PROFIT AS AGAINST A PROPOSAL OF $75,479 BY PAE. AFTER NEGOTIATIONS, PAE INCREASED ITS PRICE FOR THESE ITEMS TO $91,441. CONSIDERING THE FACT THAT REQUIRED CONTRACT PHASEOUT COSTS OF $61,416 GAVE TUMPANE AN ADDITIONAL OPPORTUNITY AS THE INCUMBENT CONTRACTOR, SINCE THESE PHASEOUT COSTS COULD ONLY BE ADDED TO PRICES OFFERED BY PROPOSED NEW CONTRACTORS, IT APPEARS THAT THE TUMPANE PRICES PROPOSED FOR INDIRECT EXPENSES AND PROFIT WERE SUBSTANTIALLY HIGHER THAN PAE'S PRICES IN THOSE AREAS. THIS APPARENTLY WAS THE PRIME AREA OF PRICE COMPETITION, AND IT WAS THESE PRICE PROPOSALS ON INDIRECT EXPENSES AND PROFIT THAT ULTIMATELY RESULTED IN TUMPANE'S PROPOSAL BEING HIGHER THAN PAE-S.

IN YOUR LETTER OF JUNE 20, 1969, YOU HAVE SUGGESTED A POSSIBLE "BUY IN" BY PAE WITHIN THE CONTEMPLATION OF ASPR 1-311, WITH THE EXPECTATION THAT PAE MIGHT ATTEMPT TO RECOUP ANY LOSSES BY VIRTUE OF FUTURE CHANGE ORDERS. IN THIS RESPECT, ASPR 1-311 PROVIDES, IN PERTINENT PART, THAT:

"/A) -BUYING IN- REFERS TO THE PRACTICE OF ATTEMPTING TO OBTAIN A CONTRACT AWARD BY KNOWINGLY OFFERING A PRICE OR COST ESTIMATE LESS THAN ANTICIPATED COSTS WITH THE EXPECTATION OF EITHER (I) INCREASING THE CONTRACT PRICE OR ESTIMATED COST DURING THE PERIOD OF PERFORMANCE THROUGH CHANGE ORDERS OR OTHER MEANS, OR (II) RECEIVING FUTURE -FOLLOW ON- CONTRACTS AT PRICES HIGH ENOUGH TO RECOVER ANY LOSSES ON THE ORIGINAL -BUY -IN- CONTRACT. SUCH A PRACTICE IS NOT FAVORED BY THE DEPARTMENT OF DEFENSE SINCE ITS LONG-TERM EFFECTS MAY DIMINISH COMPETITION AND IT MAY RESULT IN POOR CONTRACT PERFORMANCE. WHERE THERE IS REASON TO BELIEVE THAT -BUYING IN- HAS OCCURRED, CONTRACTING OFFICERS SHALL ASSURE THAT AMOUNTS THEREBY EXCLUDED IN THE DEVELOPMENT OF THE ORIGINAL CONTRACT PRICE ARE NOT RECOVERED IN THE PRICING OF CHANGE ORDERS OR OF FOLLOW-ON PROCUREMENTS SUBJECT TO COST ANALYSIS.

"/C) IN ADDITION TO THE USE OF THE TECHNIQUES NOTED IN (B) ABOVE, IT IS IMPORTANT THAT OTHER SAFEGUARDS BE PROVIDED AGAINST THE CONTRACTOR'S RECOVERING, THROUGH SUBSEQUENT OVERPRICING, FROM ANY INITIAL LOSS SITUATION DUE TO -BUYING IN.- * * *" WE HAVE BEEN ASSURED INFORMALLY BY THE PROCUREMENT AGENCY THAT DUE CONSIDERATION WAS GIVEN TO ASPR 1-311 IN MAKING THE AWARD TO PAE, AND THAT MANAGEMENT OF THE CONTRACT WILL BE MONITORED TO ASSURE COMPLIANCE WITH THE SAFEGUARDS CONTAINED IN ASPR 1- 311.