B-167654, JAN. 19, 1970

B-167654, JAN. 19, 1970

BID PROTEST--NEGOTIATIONS--CLOSING DECISION DENYING PROTEST OF AERODEX, INC; AGAINST AWARD TO JET POWER, SMALL BUSINESS FIRM AND LOW BIDDER, UNDER NEGOTIATED PROCUREMENT FOR REPAIR OF TURBINE ENGINES FOR OKLAHOMA CITY AIR MATERIEL AREA. ALTHOUGH NEGOTIATIONS WERE NEVER FORMALLY CLOSED, A NOTICE, AFTER NEGOTIATIONS WITH ALL OFFERORS, THAT BIDDING IS CLOSED AND NO FURTHER REVISIONS WOULD BE ACCEPTED MAY BE VIEWED AS AN INFORMAL CLOSE OF NEGOTIATIONS. CONTRACTING AGENCY HAS ADVISED THAT INSTRUCTIONS WILL BE ISSUED TO INSURE COMPLIANCE WITH ASPR 3-805.1(B) IN FUTURE. SINCE SUCCESSFUL OFFEROR, SMALL BUSINESS CONCERN, HAD RIGHT TO HAVE CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY SUBMITTED TO SMALL BUSINESS ADMINISTRATION FOR CERTIFICATE OF COMPETENCY AS OF DATE OF CLOSING, PROTESTANT MAY NOT BE CONSIDERED "OTHERWISE SUCCESSFUL OFFEROR" FOR CONSIDERATION OF LATE MODIFICATION. THE RECORD SHOWS ALL OFFERS SUBMITTED ON SAME BASIS AND NEGOTIATIONS WERE CONDUCTED WITH EACH OFFEROR SO THERE IS NO EVIDENCE OF PREJUDICE BY AWARD TO LOW OFFEROR WHO WAS ISSUED CERTIFICATE OF COMPETENCY.

TO SMATHERS, MERRIGAN & O'KEEFE:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 7, 1969, A SUPPORTING BRIEF OF THE SAME DATE AND A SUPPLEMENTARY BRIEF DATED OCTOBER 13, 1969, BOTH SUPPLIED BY AERODEX INC; PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANOTHER FIRM UNDER REQUEST FOR PROPOSAL (RFP) NO. F34601-69 R-1125, ISSUED BY THE OKLAHOMA CITY AIR MATERIEL AREA (OCAMA).

THE RFP WAS ISSUED ON MARCH 7, 1969, TO SEVEN SOURCES, INCLUDING AERODEX, AND SOLICITED PRICE PROPOSALS FOR THE REPAIR, OVERHAUL AND MODIFICATION OF 140B/141B GAS TURBINE ENGINES AND RELATED ITEMS, AS REQUIRED BY THE GOVERNMENT DURING FY 1970 OR FROM DATE OF AWARD THROUGH JUNE 30, 1970. EIGHT ADDITIONAL SOURCES, INCLUDING JET POWER, REQUESTED RFPS. ON APRIL 15, 1969, THE CLOSING DATE, THE FOLLOWING PROPOSALS WERE RECEIVED:

COMPANY TOTAL PRICES

JET POWER $ 714,031

AIRCRAFT TURBINE 723,223

AERODEX INC. 885,950

CONTINENTAL AVIATION 1,032,772

AMERICAN AIR MOTIVE 1,057,928

DURING THE PERIOD MAY 5-7, 1969, PRIOR TO NEGOTIATIONS, OCAMA REPRESENTATIVES VISITED THE THREE LOWEST BIDDERS FOR THE PURPOSE OF ASSESSING THEIR TECHNICAL CAPABILITIES. THE FOURTH LOWEST BIDDER, CONTINENTAL AVIATION, WHILE CONSIDERED TO BE WITHIN THE COMPETITIVE RANGE FOR NEGOTIATION, WAS NOT VISITED SINCE IT IS THE INCUMBENT CONTRACTOR. AMERICAN AIR MOTIVE WAS CONSIDERED TO BE OUT OF THE COMPETITIVE RANGE FOR NEGOTIATIONS AND CONSEQUENTLY WAS NOT VISITED. AS A RESULT OF THESE VISITS AERODEX AND AIRCRAFT TURBINE WERE CONSIDERED TO HAVE SUFFICIENT CAPABILITY TO BE INCLUDED IN NEGOTIATIONS. HOWEVER, IT WAS DETERMINED THAT JET POWER HAD NEITHER ADEQUATE FACILITIES NOR ADEQUATE MANPOWER TO PERFORM THE SERVICES CALLED FOR BY THE RFP AND CONSEQUENTLY IT WAS EXCLUDED FROM THE NEGOTIATIONS. FROM MAY 12-14 NEGOTIATIONS WERE CONDUCTED WITH AERODEX, AIRCRAFT TURBINE AND CONTINENTAL AVIATION AND ALL THREE CONCERNS WERE INVITED TO SUBMIT REVISED PROPOSALS BY MAY 16, 1969, THE CLOSING DATE. HOWEVER, PRIOR TO CLOSING DATE THE PROCURING ACTIVITY REEVALUATED ITS POSITION ON JET POWER AND CONCLUDED THAT SINCE JET POWER WAS EXCLUDED FROM THE NEGOTIATIONS ON THE BASIS OF AN INFORMAL DETERMINATION (APPARENTLY OCAMA DID NOT MAKE A FORMAL WRITTEN DETERMINATION), OCAMA DECIDED TO REQUEST A PRE-AWARD SURVEY OF JET POWER BY THE DEFENSE CONTRACT ADMINISTRATION SERVICES (DCAS). THUS, SHOULD THE PRE-AWARD SURVEY BE NEGATIVE IT COULD BE SUBMITTED TO THE SMALL BUSINESS ADMINISTRATION (SBA) FOR A FINAL DETERMINATION OF JET POWER'S RESPONSIBILITY, SINCE JET POWER IS A SMALL BUSINESS.

ON MAY 16, THE FOLLOWING PROPOSALS WERE RECEIVED:

COMPANY TOTAL PRICE

AERODEX INCORPORATED $671,763.93

AIRCRAFT TURBINE 693,385.50

CONTINENTAL AVIATION 995,952.89

A PRE-AWARD SURVEY OF JET POWER WAS CONDUCTED ON MAY 19 AND 20 WHICH RESULTED IN A NEGATIVE FINDING, BASED ON A REQUIREMENT FOR DELIVERY OF FIRST UNITS WITHIN 90 DAYS. DCAS INDICATED THAT IF THE DELIVERY WAS REQUIRED WITHIN 120 DAYS INSTEAD OF 90 DAYS, THE PRE AWARD SURVEY WOULD BE AFFIRMATIVE. IN VIEW OF THE NEGATIVE PRE-AWARD SURVEY ON JET POWER, A PRE -AWARD SURVEY WAS CONDUCTED ON AERODEX ON MAY 21 WHICH WAS AFFIRMATIVE.

HOWEVER, AT THIS POINT IN THE NEGOTIATIONS, OCAMA DECIDED TO OBTAIN PROPOSALS FOR FY 71 AND FY 72 REQUIREMENTS AS WELL AS FY 70 REQUIREMENTS. AERODEX, AIRCRAFT TURBINE AND CONTINENTAL AVIATION WERE REQUESTED TO SUBMIT REVISED PROPOSALS BY MAY 28, 1969, THE CLOSING DATE. JET POWER WAS NOT ASKED TO SUBMIT A PROPOSAL DUE TO THE NEGATIVE PRE-AWARD SURVEY. HOWEVER, IT WAS REALIZED THAT THIS NEGATIVE DETERMINATION WOULD HAVE TO BE SUBMITTED TO SBA AND THERE WAS A POSSIBILITY THAT SBA MIGHT ISSUE JET POWER A CERTIFICATE OF COMPETANCY (COC) WHICH WOULD BE BINDING ON OCAMA. CONSEQUENTLY, ON JUNE 11, 1969, JET POWER WAS ASKED TO SUBMIT A PROPOSAL FOR FY 70 REQUIREMENTS AND ALSO TO INCLUDE FIRM OPTION PRICES FOR FY 71 AND FY 72. JET POWER SUBMITTED ITS REVISED PROPOSAL ON JUNE 16. THE REVISED PROPOSALS WERE AS FOLLOWS:

COMPANY TOTAL

JET POWER INCORPORATED $1,561,580.02

AERODEX INCORPORATED 1,833,772.00

AIRCRAFT TURBINE 1,977,312.00

CONTINENTAL AVIATION 2,443,833.00

SINCE JET POWER WAS STILL LOW AND HAD RECEIVED A NEGATIVE PRE-AWARD SURVEY, A FORMAL REFERRAL OF THE NEGATIVE FINDING WAS SUBMITTED TO SBA ON JUNE 16, 1969. OCAMA DECIDED THAT NEGOTIATIONS SHOULD BE CLOSED. ACCORDINGLY, ON JUNE 17 THE FOLLOWING MESSAGE WAS SENT TO ALL FOUR OFFERORS:

"YOU ARE HEREBY NOTIFIED THAT ALL BIDDING IS CLOSED ON RFP F34601 69-R- 1125. NO FURTHER REVISIONS WILL BE ACCEPTED. THIS OFFICE IS NOW IN THE PROCESS OF EVALUATING THOSE BIDS RECEIVED AND YOU WILL BE ADVISED OF RESULTS WHEN AWARD IS MADE."

ON JUNE 19 THE SBA BEGAN ITS SURVEY OF JET POWER, AND OCAMA WAS SUBSEQUENTLY ADVISED BY SBA THAT ITS SURVEY SUPPORTED A RECOMMENDATION FOR ISSUANCE OF A COC. ON JUNE 24, 25, AND 27 FURTHER INFORMATION WAS REQUESTED FROM AERODEX CONCERNING AVAILABILITY OF EQUIPMENT AND CAPABILITY TO PRODUCE WITHIN 60 DAYS AFTER AWARD. AS A RESULT OF A MEETING BETWEEN SBA AND OCAMA ON JUNE 30, BETWEEN OCAMA AND SAAMA (SAN ANTONIO AIR MATERIEL AREA, WHICH HAD BEEN CONSULTED SINCE IT WOULD HAVE THE RESPONSIBILITY OF ADMINISTERING THE CONTRACT AFTER THE AWARD) ON JULY 7, AND SEVERAL DISCUSSIONS BETWEEN OCAMA AND VARIOUS OTHER ELEMENTS OF THE AIR FORCE, IT WAS AGREED BY ALL PARTIES THAT JET POWER WOULD BE CAPABLE OF PERFORMING IF IT WERE GRANTED 120 DAYS TO DELIVER THE FIRST 10 OVER-HAULED ENGINES. THIS WAS ALSO THE POSITION OF DCAS. BY JULY 14 IT WAS AGREED BY ALL PARTIES THAT JET POWER SHOULD RECEIVE THE AWARD. ON JULY 16, OCAMA RECEIVED AN UNSOLICITED REVISED PROPOSAL FROM AERODEX, IN WHICH AERODEX REDUCED ITS PROPOSAL BY APPROXIMATELY $321,000, FROM $1,833,772 TO $1,512,483.88, WHICH IS APPROXIMATELY $49,000 LOWER THAN JET POWER'S PROPOSAL.

IT WAS SUBSEQUENTLY DECIDED THAT AERODEX'S PROPOSAL COULD NOT BE ACCEPTED WITHOUT FURTHER NEGOTIATIONS WITH ALL OFFERORS WITHIN A COMPETITIVE RANGE, AND THAT THEREFORE A NEW ROUND OF NEGOTIATIONS SHOULD BE CONDUCTED WITH THE FOUR COMPANIES. IN REQUESTING NEW PROPOSALS, THE TYPE OF CONTRACT WAS ALSO CHANGED FROM A REQUIREMENTS TYPE TO AN INDEFINITE QUANTITY TYPE, AT THE REQUEST OF SAAMA. THE REQUEST FOR REVISED PROPOSALS WAS ISSUED ON JULY 23 WITH A CLOSING DATE OF JULY 30.

ON JULY 24 OCAMA SENT THE FOLLOWING MESSAGE TO SBA:

"REFERENCE DISCUSSIONS HELD BETWEEN AIR FORCE AND DCASD REPRESENTATIVES ON 7 AND 8 JULY. AS A RESULT OF THAT MEETING AND OTHER CONSIDERATION AND THEIR EVALUATION OF THIS PROCUREMENT, THE NEED FOR SBA TO CONSIDER A COC IS NO LONGER REQUIRED. THEREFORE, PURSUANT TO ASPR 1-705.4(F)(I) OUR ORIGINAL REFERRAL TO YOUR OFFICE IS HEREBY WITHDRAWN."

IN EXPLANATION OF THE ABOVE MESSAGE, OCAMA ON JULY 28 SENT ANOTHER MESSAGE TO SBA STATING THAT AN UNSOLICITED REVISED PROPOSAL HAD BEEN RECEIVED FROM ONE OF THE OFFERORS. CONSEQUENTLY, IT HAD BEEN DETERMINED THAT THIS PROPOSAL WOULD HAVE TO BE CONSIDERED AND THAT EACH COMPANY WITHIN A COMPETITIVE RANGE HAD TO BE GIVEN AN EQUAL OPPORTUNITY TO SUBMIT A REVISED PROPOSAL, WHICH HAD BEEN DONE. IT WAS FURTHER EXPLAINED THAT IN THE EVENT JET POWER WAS THE LOW RESPONSIVE OFFEROR AWARD WOULD BE MADE TO THAT COMPANY SINCE IT HAD BEEN DETERMINED THAT JET POWER WAS A RESPONSIBLE OFFEROR. THUS,THERE NO LONGER WAS ANY NEED FOR REFERRAL TO SBA FOR A COC.

HOWEVER, ON JULY 28, 1969, THE AIR FORCE DECIDED TO SUSPEND THE REQUEST FOR PROPOSALS OF JULY 23, 1969, PENDING A REVIEW OF THE PROCUREMENT. JULY 31, 1969, IT WAS DETERMINED THAT AWARD SHOULD BE MADE TO THE LOW OFFEROR AS OF JUNE 17, 1969, AT WHICH TIME THE OFFERORS HAD BEEN ADVISED THAT BIDDING WAS CLOSED. THE ASSISTANT DEPUTY FOR SMALL BUSINESS ADMINISTRATION, USAF, WAS REQUESTED TO PROCEED WITH THE ISSUANCE OF THE COC. NOTICE OF AWARD WAS ISSUED TO JET POWER ON AUGUST 4, 1969. IT IS AERODEX'S CONTENTION THAT THE AWARD TO JET POWER IS IMPROPER AND SHOULD BE WITHDRAWN.

THE QUESTION OF WHETHER THE AWARD TO JET POWER SHOULD BE SUSTAINED RESOLVES ITSELF INTO TWO BASIC ISSUES. FIRST, GIVEN THE CIRCUMSTANCES OF THIS PROCUREMENT, WAS THE JUNE 17 NOTICE OF CLOSING SUFFICIENT TO RENDER ANY SUBSEQUENT PROPOSAL A "LATE PROPOSAL" AS CONTEMPLATED BY ARMED SERVICES PROCUREMENT REGULATION (ASPR) 3-506? SECOND, DID THE AIR FORCE PROPERLY DECIDE TO REFRAIN FROM CONSIDERING THE JULY 16 PROPOSAL OF AERODEX? THE AIR FORCE SUBMITS THAT THE ANSWER TO BOTH OF THESE QUESTIONS MUST BE AFFIRMATIVE, WHILE AERODEX CONTENDS THAT THE ANSWER TO BOTH QUESTIONS MUST BE NEGATIVE.

IT IS AERODEX'S CONTENTION THAT THE JUNE 17 NOTICE OF CLOSING WAS NOT SUFFICIENT NOTICE TO CLOSE NEGOTIATIONS AS CONTEMPLATED BY ASPR 3 805.1(B) SINCE IT DID NOT ADVISE THOSE SELECTED OFFERORS OF A PROSPECTIVE SPECIFIC DATE BY WHICH ANY REVISIONS TO THEIR PROPOSALS MUST BE SUBMITTED. ASPR 3- 805.1(B) STATES, IN PERTINENT PART, THAT:

* * * WHENEVER NEGOTIATIONS ARE CONDUCTED WITH SEVERAL OFFERORS, WHILE SUCH NEGOTIATIONS MAY BE CONDUCTED SUCCESSIVELY, ALL OFFERORS SELECTED TO PARTICIPATE IN SUCH NEGOTIATIONS (SEE (A) ABOVE) 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. ALL SUCH OFFERORS SHALL BE INFORMED THAT ANY REVISION RECEIVED AFTER SUCH DATE SHALL BE TREATED AS A LATE PROPOSAL IN ACCORDANCE WITH THE 'LATE PROPOSALS' PROVISIONS OF THE REQUEST FOR PROPOSALS. (IN THE EXCEPTIONAL CIRCUMSTANCES WHERE THE SECRETARY CONCERNED AUTHORIZES CONSIDERATION OF SUCH A LATE PROPOSAL, RESOLICITATION SHALL BE LIMITED TO THE SELECTED OFFERORS WITH WHOM NEGOTIATIONS HAVE BEEN CONDUCTED.) IN ADDITION, ALL SUCH OFFERORS SHALL BE INFORMED THAT AFTER THE SPECIFIED DATE FOR THE CLOSING OF NEGOTIATION, NO INFORMATION OTHER THAN NOTICE OF UNACCEPTABILITY OF PROPOSAL, IF APPLICABLE (SEE 3-508), WILL BE FURNISHED TO ANY OFFEROR UNTIL AWARD HAS BEEN MADE."

ADMITTEDLY THE NOTICE OF JUNE 17 WAS NOT IN CONFORMITY WITH THE FORMAL REQUIREMENTS OF ASPR 3-805.1(B), IN THAT THE OFFERORS WERE NOT ADVISED OF A PROSPECTIVE DATE CLOSING NEGOTIATIONS AND THAT ANY REVISIONS TO THEIR PROPOSALS MUST BE SUBMITTED BY THAT DATE, NOR WERE THE OFFERORS ADVISED THAT ANY REVISIONS RECEIVED AFTER THAT DATE WOULD BE TREATED AS LATE PROPOSALS. ALSO, THE NOTICE FAILED TO INFORM THE OFFERORS THAT AFTER THE CLOSING DATE NO INFORMATION OTHER THAN NOTICE OF UNACCEPTABILITY OF PROPOSAL WOULD BE FURNISHED UNTIL AWARD. HOWEVER, IN VIEW OF THE CLEAR LANGUAGE OF THE NOTICE, AND THE FACT THAT NEGOTIATIONS HAD BEEN CONDUCTED WITH ALL OF THE OFFERORS PRIOR TO JUNE 17, WE CAN ONLY CONCLUDE THAT WHILE THE NEGOTIATIONS WERE NEVER FORMALLY CLOSED, ALL OF THE OFFERORS BELIEVED OR SHOULD HAVE BELIEVED THAT JUNE 17 WAS THE CUTOFF DATE AND THAT, IN THE PARTICULAR CIRCUMSTANCES OF THIS CASE, THAT DATE CAN BE VIEWED AS AN INFORMAL CLOSE OF NEGOTIATIONS. SEE B-165837, MARCH 28, 1969. MOREOVER, THERE IS NO EVIDENCE THAT THE NEGOTIATIONS PRIOR TO JUNE 17 WERE CONDUCTED IN SUCH A MANNER AS TO DENY ANY OFFEROR THE OPPORTUNITY TO REDUCE ITS PROPOSAL TO ITS LOWEST REASONABLE FIGURE. HOWEVER, WE HAVE BEEN ADVISED THAT HEADQUARTERS, AIR FORCE LOGISTICS COMMAND HAS BEEN INSTRUCTED TO TAKE STEPS TO ENSURE THAT CONTRACTING OFFICERS COMPLY WITH THE FORMALITIES SET OUT IN ASPR 3-805.1(B) IN FUTURE PROCUREMENTS.

IN ITS LETTER OF OCTOBER 13 AERODEX CONTENDS THAT ASPR 3-506 DOES NOT APPLY TO THE PRESENT SITUATION. IT IS CONTENDED THAT 3-506 APPLIES ONLY TO THE ORIGINAL DATE SET FOR RECEIPT OF BIDS AND MODIFICATIONS TO SUCH BIDS PRIOR TO THE SPECIFIC DATE OF OPENING. IT IS POINTED OUT THAT PARAGRAPH (H) OF ASPR 3-506 STATES THAT "THE NORMAL REVISIONS OF PROPOSALS BY SELECTED OFFERORS OCCURRING DURING THE USUAL CONDUCT OF NEGOTIATIONS WITH SUCH OFFERORS ARE NOT TO BE CONSIDERED AS LATE PROPOSALS OR LATE MODIFICATIONS BUT SHALL BE HANDLED IN ACCORDANCE WITH 3-805.1(B)."

ASPR 3-506 VIEWED ALONE AND ABSENT PARAGRAPH (H) WOULD BE APPLICABLE ONLY TO THE ORIGINAL DATE SET FOR RECEIPT OF PROPOSALS AND MODIFICATIONS TO SUCH PROPOSAL, SINCE IN THE ABSENCE OF PARAGRAPH (H) ANY PROPOSAL OR MODIFICATION OF A PROPOSAL RECEIVED AFTER THE ORIGINAL DATE SPECIFIED IN THE RFP WOULD BE A LATE PROPOSAL OR MODIFICATION WHICH COULD NOT BE CONSIDERED (UNLESS ITS LATE RECEIPT WAS EXCUSABLE UNDER THE REVISIONS OF PARAGRAPH (B) OF ASPR 3-506). CONSEQUENTLY, THE SITUATION THAT WE HAVE IN THE PRESENT CASE COULD NEVER OCCUR. HOWEVER, PARAGRAPH (H) EXEMPTS THOSE "LATE" PROPOSALS AND MODIFICATIONS SUBMITTED BY OFFERORS WHO HAVE BEEN SELECTED FOR NEGOTIATIONS. THESE PROPOSALS AND MODIFICATIONS ARE TO BE HANDLED IN ACCORDANCE WITH ASPR 3-805.1(B), WHICH STATES, IN REFERENCE TO THE CLOSING OR CUTOFF DATE, THAT "ALL SUCH OFFERORS SHALL BE INFORMED THAT ANY REVISION RECEIVED AFTER SUCH DATE SHALL BE TREATED AS A LATE PROPOSAL IN ACCORDANCE WITH THE 'LATE PROPOSAL' PROVISIONS OF THE REQUEST FOR PROPOSALS." THE LATE PROPOSAL PROVISIONS REFERRED TO ARE PART OF ASPR 3- 506, AND ARE A MANDATORY PART OF THE RFP. SEE B-164581, APRIL 29, 1969. THUS, IT WOULD APPEAR THAT ASPR 3-506 IS APPLICABLE TO THE PRESENT SITUATION, SINCE WE HAVE DETERMINED THAT THE JUNE 17 NOTICE OF CLOSING WAS SUFFICIENT TO CLOSE NEGOTIATIONS AND TO RENDER ANY SUBSEQUENT PROPOSAL A "LATE PROPOSAL" AS CONTEMPLATED BY ASPR 3 506.

IN ITS LETTER OF OCTOBER 13, 1969, AERODEX STATES THAT SINCE OCAMA, SAAMA AND DCAS, THROUGHOUT THE NEGOTIATIONS UP UNTIL JULY 7, CONSIDERED JET POWER INCAPABLE OF MEETING THE FIRST DELIVERY SCHEDULE OF 90 DAYS REQUIRED BY THE RFP AND THAT, THEREFORE, THE AWARD TO JET POWER WAS MADE ON THE BASIS OF A 120 DAY DELIVERY SCHEDULE, CONTRARY TO THE 90 DAY RFP REQUIREMENT. FIRST OF ALL IT MUST BE POINTED OUT THAT OCAMA, SAAMA AND DCAS ALL CONSIDERED JET POWER, A SMALL BUSINESS CONCERN, INCAPABLE OF MEETING THE 90 DAY DELIVERY SCHEDULE BECAUSE OF LACK OF FACILITIES AND MANPOWER, FACTORS GOING TO ITS CAPACITY. IN THOSE INSTANCES WHERE A PROSPECTIVE CONTRACTOR IS A SMALL BUSINESS CONCERN, THE MATTER OF ITS CAPACITY AND CREDIT MUST, WITH CERTAIN EXCEPTIONS NOT APPLICABLE IN THE PRESENT CASE, BE SUBMITTED TO THE SMALL BUSINESS ADMINISTRATION (SBA), SINCE SBA HAS STATUTORY AUTHORITY TO CERTIFY THE COMPETENCY OF ANY SMALL BUSINESS CONCERN AS TO CAPACITY AND CREDIT. SHOULD SBA ISSUE A CERTIFICATE OF COMPETENCY (COC) TO A CONCERN, THE CONTRACTING OFFICER MUST ACCEPT THE COC AS CONCLUSIVE OF THAT CONCERN'S CAPACITY, REGARDLESS OF HIS VIEWS OR THOSE OF ANY OTHER ACTIVITY, ON THE MATTER. 38 COMP. GEN. 864 (1959); 37 COMP. GEN. 798 (1958). (SEE ASPR 1-705.4).

ON AUGUST 4, 1969, SBA ISSUED A COC CONCERNING JET POWER, CERTIFYING IT COMPETENT AS TO CAPACITY AND CREDIT TO PERFORM THE PROCUREMENT COVERED BY RFP F34601-69-R-1125, WHICH CALLS FOR A FIRST DELIVERY 90 DAYS AFTER ISSUANCE OF THE INITIAL DELIVERY ORDER. THE CONTRACT, NO. F34601-70-D- 0320, WHICH WAS AWARDED TO JET POWER ON THE SAME DATE, ALSO CALLED FOR FIRST DELIVERY 90 DAYS AFTER ISSUANCE OF THE INITIAL DELIVERY ORDER. THUS, ALTHOUGH OCAMA, SAAMA AND DCAS, WERE OF THE OPINION THAT JET POWER WAS INCAPABLE OF MEETING THE 90 DAY DELIVERY SCHEDULE, THE SBA DETERMINATION AS TO JET POWER'S CAPACITY WAS BINDING UPON THE CONTRACTING OFFICER, SUBJECT ONLY TO AN APPEAL TO HIGHER AUTHORITY, PURSUANT TO ASPR 1 -705.4 (F)(II), WHICH HE DID NOT CHOOSE TO PURSUE. CONSEQUENTLY, IT COULD NOT BE SAID AS A MATTER OF LAW THAT, AS OF JUNE 17, AERODEX WAS THE LOW RESPONSIBLE OFFEROR, SINCE JET POWER, A SMALL BUSINESS CONCERN, HAD THE RIGHT TO HAVE THE CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY SUBMITTED TO SBA UNDER THE CERTIFICATE OF COMPETENCY PROCEDURES. THUS, ASPR 3 506(G), WHICH PERMITS THE CONSIDERATION OF LATE MODIFICATIONS FAVORABLE TO THE GOVERNMENT IF RECEIVED FROM THE OTHERWISE SUCCESSFUL OFFEROR, IS NOT APPLICABLE IN THE PRESENT SITUATION, SINCE AERODEX WAS NOT THE "OTHERWISE SUCCESSFUL OFFEROR." MOREOVER, IN LIGHT OF THE FACT THAT JET POWER SUBMITTED ITS OFFER ON THE BASIS OF THE 90 DAY DELIVERY SCHEDULE FOR THE FIRST 10 ENGINES AS REQUIRED BY THE RFP, SBA ISSUED ITS COC ON THIS BASIS, AND THE CONTRACT WAS AWARDED ON THIS BASIS, WE FAIL TO SEE HOW AERODEX OR ANY OF THE OTHER OFFERORS WERE PREJUDICED SINCE THEY ALL SUBMITTED OFFERS ON THE SAME BASIS AND NEGOTIATIONS WERE CONDUCTED WITH ALL OF THE OFFERORS PRIOR TO JUNE 17.

CONCERNING THE ALLEGATION THAT THE AIR FORCE CONTINUED TO NEGOTIATE WITH AERODEX SUBSEQUENT TO JUNE 17, WE ASSUME THAT AERODEX IS REFERRING TO ITS LETTERS OF JUNE 24 AND 27, AND THE TELEPHONE CALLS OF JUNE 26 AND 27. THE LETTER OF JUNE 24 APPEARS TO BE NO MORE THAN A CONFIRMATION OF A COMMITMENT OR PROPOSAL MADE ON JUNE 4 AND WOULD NOT BE CONSIDERED A CONTINUATION OF NEGOTIATIONS. WITH RESPECT TO THE TELEPHONE CALLS, WE ARE ADVISED THAT THEY WERE FOR THE PURPOSE OF VERIFYING AVAILABILITY OF TOOLING TO PERFORM IN ACCORDANCE WITH AERODEX'S PROPOSAL, WHICH AERODEX'S LETTER OF JUNE 27 APPEARS TO CONFIRM AND, THUS, WOULD NOT CONSTITUTE CONTINUATION OF NEGOTIATIONS.

FOR THE ABOVE REASONS WE FIND NO ADEQUATE LEGAL BASIS TO DISTURB THE AWARD MADE, AND YOUR PROTEST MUST BE DENIED.