B-167312, SEP. 19, 1969

B-167312, SEP. 19, 1969

BID PROTEST - "BUYING IN" DECISION TO PHILIPPINE AIR LINES CURRENT CONTRACTOR DENYING PROTEST AGAINST AWARD TO ANOTHER FIRM FOR INSPECTION AND REPAIR OF C-7A AIRCRAFT IN COMBAT OPERATION IN VIETNAM ISSUED BY AIR FORCE PROCUREMENT REGION IN THE FAR EAST. SINCE EVIDENCE SUBSTANTIATES LOW OFFEROR'S QUALIFICATIONS, AND THERE IS NO EVIDENCE OF BAD FAITH THE NEGOTIATED AWARD OF CONTRACT TO SUCH OFFEROR WILL NOT BE QUESTIONED. ALLEGATION THAT LOW OFFEROR MAY BE "BUYING IN" TO OBTAIN CONTRACT ADJUSTMENTS AFTER AWARD DOES NOT REQUIRE REJECTION. UNDER ASPR 1-311 CONTRACTING OFFICERS ARE REQUIRED TO ASSURE THAT AMOUNTS EXCLUDED IN DEVELOPMENT OF ORIGINAL PRICE ARE NOT RECOVERED UNDER CHANGE ORDER PRICING OR FOLLOW ON PROCUREMENTS SUBJECT TO COST ANALYSIS.

TO PHILIPPINE AIR LINES:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAMS OF JUNE 24 AND JULY 17, 1969, AND TO YOUR LETTER DATED JUNE 28, 1969, PROTESTING THE AWARD OF A CONTRACT TO ANOTHER FIRM UNDER REQUEST FOR PROPOSALS (RFP) NO. F62531 69-R-0010, ISSUED BY THE UNITED STATES AIR FORCE, AIR PROCUREMENT REGION, FAR EAST.

THE SUBJECT RFP SOLICITED OFFERS FOR SERVICES TO ACCOMPLISH INSPECTION AND REPAIR AS NECESSARY (IRAN) AND ANALYTICAL CONDITION INSPECTION OF AIR FORCE C-7A AIRCRAFT IN DIRECT SUPPORT OF COMBAT OPERATIONS IN VIETNAM. FIXED UNIT PRICE WAS REQUIRED TO BE SUBMITTED FOR THE SPECIFIED IRAN SERVICES, AS WELL AS AN HOURLY RATE TO BE APPLIED TO ANY SERVICES PERFORMED OVER AND ABOVE THAT SPECIFIED UNDER THE FIXED PRICE PORTION OF THE CONTRACT. THE SOLICITATION ALSO REQUIRED OFFERORS TO CITE THE NUMBER OF FIXED MANHOURS EACH PROPOSED TO EXPEND UNDER THE FIXED PRICE PORTION OF THE WORK SPECIFIED. EVALUATION OF PROPOSALS WAS TO BE ACCOMPLISHED PURSUANT TO THE FORMULAE SPELLED OUT IN THE SOLICITATION, AND THE SOLICITATION ADVISED OFFERORS THAT THE CONTRACTING OFFICER COULD ELECT TO NEGOTIATE WITH ONLY THE OFFEROR OR OFFERORS CONSIDERED TO BE WITHIN A COMPETITIVE RANGE.

BY LETTER OF JUNE 14, 1969, YOUR COMPANY WAS ADVISED BY THE CONTRACTING OFFICER THAT YOUR PROPOSAL WAS NOT WITHIN A COMPETITIVE RANGE OF OTHER PROPOSALS RECEIVED AND, THEREFORE, NEGOTIATIONS WOULD NOT BE CONDUCTED WITH YOU. THIS APPARENTLY GENERATED YOUR PROTEST TO THIS OFFICE.

ESSENTIALLY, IT IS YOUR POSITION THAT ANY OFFEROR PROPOSING TO SATISFY THE REQUIREMENTS SPECIFIED IN THE SOLICITATION WITH APPRECIABLY LESS MANHOURS THAN PROPOSED IN YOUR OFFER, EITHER LACKS EXPERIENCE, DOES NOT APPRECIATE FULLY THE TECHNICAL REQUIREMENTS, OR MAY BE ATTEMPTING TO ,BUY IN" WITH THE INTENTION OF OBTAINING CONTRACT ADJUSTMENTS AFTER AWARD. YOU HAVE NOTED YOUR PAST EXPERIENCES IN PERFORMING THE SPECIFIED SERVICES AND IT IS YOUR STATED OPINION THAT IT WOULD NOT BE IN THE INTEREST OF THE GOVERNMENT TO PERMIT AN UNTRIED CONTRACTOR TO UNDERTAKE THIS WORK.

THE RECORD OF THIS PROCUREMENT INDICATES THAT YOUR EVALUATED PRICE IS MORE THAN 58 PERCENT HIGHER THAN THE PRICE PROPOSED BY THE LOW OFFEROR. ALSO, THE MANHOURS PROPOSED BY THE LOW OFFEROR ARE SUBSTANTIALLY LESS THAN THE MANHOURS PROPOSED BY YOUR COMPANY, BUT IT IS SIGNIFICANT THAT THE FORMER'S PROPOSAL IS WITHIN RANGE OF THE MANHOURS PROPOSED BY TWO OTHER OFFERORS. THE AIR FORCE HAS ALSO REPORTED THAT AN ESTIMATE MADE BY THE WARNER ROBINS AIR MATERIEL AREA CONCERNING MANHOURS NECESSARY TO ACCOMPLISH AN IRAN OF C-7A AIRCRAFT BY STATESIDE CONTRACTORS IS APPRECIABLY LESS THAN THAT PROPOSED BY THE LOW OFFEROR, AND IT IS NOTED THAT THE LOW OFFEROR HAS SATISFACTORILY PERFORMED IRAN CONTRACTS FOR TWO YEARS ON OTHER TYPES OF AIRCRAFT. FURTHER, THE RECORD ALSO INDICATES THAT AIR FORCE TECHNICAL PERSONNEL CONDUCTED A PRE-AWARD SURVEY OF THE LOW OFFEROR AND WERE PROVIDED WITH ADEQUATE EVIDENCE TO ESTABLISH THAT IT POSSESSED AN UNDERSTANDING OF THE TECHNICAL REQUIREMENTS, EXHIBITS, SPECIFICATIONS AND DRAWINGS PERTAINING TO THIS PROCUREMENT. THE SURVEY TEAM FULLY AGREED THAT THE AWARD SHOULD BE MADE TO THE LOW OFFEROR.

WITH RESPECT TO YOUR OBJECTION THAT THE LOW OFFEROR MAY HAVE ATTEMPTED TO "BUY IN" TO THE CONTRACT AT A LOW PRICE WITH THE INTENTION OF OBTAINING CONTRACT ADJUSTMENTS AFTER AWARD, OUR PAST DECISIONS ON THIS POINT HAVE HELD THAT AN "ATTEMPTED BUYING-IN" BY A BIDDER DOES NOT AFFORD A BASIS FOR REJECTION OF A BID, SINCE THE ARMED SERVICES PROCUREMENT REGULATION 1-311 DOES NOT PROVIDE FOR REJECTION IN SUCH CIRCUMSTANCES BUT ONLY PROVIDES THAT CONTRACTING OFFICERS ASSURE THAT AMOUNTS EXCLUDED IN THE DEVELOPMENT OF THE ORIGINAL CONTRACT PRICE ARE NOT RECOVERED IN THE PRICING OF CHANGE ORDERS OR IN FOLLOW-ON PROCUREMENTS SUBJECT TO COST ANALYSIS. B-158326, MAY 5, 1966.

AS YOU MAY BE AWARE, COMPETITION IN THE INSTANT PROCUREMENT WAS ENCOURAGED AND ATTAINED PURSUANT TO THE STATUTORY REQUIREMENT IN 10 U.S.C. 2304G, WHICH PROVIDES, IN PERTINENT PART, THAT IN ALL NEGOTIATED PROCUREMENTS IN EXCESS OF $2500 PROPOSALS MUST BE SOLICITED, IF TIME PERMITS, FROM THE MAXIMUM NUMBER OF QUALIFIED SOURCES CONSISTENT WITH THE NATURE AND REQUIREMENTS OF THE SUPPLIES OR SERVICES TO BE PROCURED. MOREOVER, IT HAS BEEN THE CONSISTENT POSITION OF THIS OFFICE THAT AN AGENCY'S DETERMINATION OF A CONTRACTOR'S QUALIFICATIONS WILL NOT BE QUESTIONED IN THE ABSENCE OF EITHER CLEAR EVIDENCE OF BAD FAITH OR A CONVINCING SHOWING THAT NO SUBSTANTIAL GROUNDS EXIST FOR THE ADMINISTRATIVE DETERMINATION. 37 COMP. GEN. 430. IN THE SUBJECT PROCUREMENT WE FIND SUBSTANTIAL EVIDENCE IN THE RECORD TO SUBSTANTIATE THE ADMINISTRATIVE DETERMINATION AS TO THE LOW OFFEROR'S QUALIFICATIONS, AND WE THEREFORE FIND NO VALID BASIS ON WHICH TO QUESTION THE ACTION OF THE AIR FORCE IN AWARDING THE CONTRACT TO THE LOW OFFEROR.