B-170094, DEC. 1, 1970

B-170094, DEC. 1, 1970

CONTRACTS - PROCUREMENT REGULATIONS DECISION DIRECTING CHANGE IN POLICY THAT WOULD ELIMINATE ANY CONFLICT BETWEEN AIR FORCE SYSTEMS COMMAND MANUAL, AFSCM 80-10 AND ASPR 1 705.4. THE CONTENTION THAT AFSCM/OARM 80-10, RELATING TO EVALUATION PROCEDURES, IS BEING USED TO EVALUATE THE CAPACITY OF AN OFFEROR UNDER A PROCEDURE SET UP TO EVALUATE THE TECHNICAL ASPECTS OF PROPOSALS AND THEREFORE VIOLATES THE INTENT OF ASPR 1-705.4(B) WHICH SEPARATES THE EVALUATION OF TECHNICAL APPROACH FROM CAPACITY IS WELL TAKEN. TO REMEDY THE SITUATION THE USE OF POINTS, DURING THE TECHNICAL EVALUATION, HAS BEEN LIMITED TO FACTORS OTHER THAN CAPACITY, THIS ACTION BEING IN ACCORD WITH 46 COMP. GEN. 893, 1967, HOLDING THE PROVISIONS OF ASPR 1-705.4(B) TO BE CONTROLLING.

TO ANALYTICAL SYSTEMS CORPORATION:

WE REFER AGAIN TO YOUR LETTER DATED AUGUST 20, 1970, WITH ENCLOSURES, REQUESTING OUR VIEWS REGARDING AN ALLEGED CONFLICT BETWEEN AIR FORCE SYSTEMS COMMAND MANUAL AFSCM 80-10, THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-705.4, AND PROVISIONS OF PUBLIC LAW 85-536. SPECIFICALLY, YOU MENTION THE CONSISTENT IMPROPER APPLICATION OF EVALUATION PROCEDURES SET FORTH IN AFSCM 80-10 DIRECTIVES WHICH ALLEGEDLY CONFLICT WITH AND ARE CONTRARY TO THE PROVISIONS OF ASPR 1 705.4 AND SECTION 8(B)(7) OF THE SMALL BUSINESS ACT, PUBLIC LAW 85 536.

ASPR 1-705.4 PROVIDES IN PART AS FOLLOWS:

"(A) SBA HAS STATUTORY AUTHORITY TO CERTIFY THE COMPETENCY OF ANY SMALL BUSINESS CONCERN AS TO CAPACITY AND CREDIT. 'CAPACITY' MEANS THE OVERALL ABILITY OF A PROSPECTIVE SMALL BUSINESS CONTRACTOR TO MEET QUALITY, QUANTITY, AND TIME REQUIREMENTS OF A PROPOSED CONTRACT AND INCLUDES ABILITY TO PERFORM, ORGANIZATION, EXPERIENCE, TECHNICAL KNOWLEDGE, SKILLS, 'KNOW-HOW,' TECHNICAL EQUIPMENT AND FACILITIES OR THE ABILITY TO OBTAIN THEM. *** (CONTRACTING OFFICERS SHALL ACCEPT SBA CERTIFICATES OF COMPETENCY AS CONCLUSIVE OF A PROSPECTIVE CONTRACTOR'S CAPACITY (SEE 1- 903.1(II) AND 1-903.2) AND CREDIT (SEE 1 903.1(I)), UNLESS THE CONTRACTING OFFICER HAS SUBSTANTIAL DOUBT AS TO THE CONCERN'S ABILITY TO PERFORM, IN WHICH CASE THE PROCEDURES IN (F) AND (G) APPLY.)

"(B) IN PROCUREMENT WHERE THE HIGHEST COMPETENCE OBTAINABLE OR THE BEST SCIENTIFIC APPROACH IS NEEDED, AS IN CERTAIN NEGOTIATED PROCUREMENT OF RESEARCH AND DEVELOPMENT, HIGHLY COMPLEX EQUIPMENT, OR PERSONAL OR PROFESSIONAL SERVICES, THE CERTIFICATE OF COMPETENCY PROCEDURE IS NOT APPLICABLE TO THE SELECTION OF THE SOURCE OFFERING THE HIGHEST COMPETENCE OBTAINABLE OR BEST SCIENTIFIC APPROACH. HOWEVER, IF A SMALL BUSINESS CONCERN HAS BEEN SELECTED ON THE BASIS OF THE HIGHEST COMPETENCE OBTAINABLE OR BEST SCIENTIFIC APPROACH AND, PRIOR TO AWARD, THE CONTRACTING OFFICER DETERMINES THAT THE CONCERN IS NOT RESPONSIBLE BECAUSE OF LACK OF CAPACITY OR CREDIT, THE CERTIFICATE OF COMPETENCY PROCEDURE IS APPLICABLE."

AFSCM/OARM 80-10, CHAPTER 4, ENTITLED "EVALUATION PROCEDURES," PROVIDES THAT: "FOR NEGOTIATED PROCUREMENTS, ALL PROPOSALS ARE EVALUATED, INDIVIDUALLY RATED IN ACCORDANCE WITH A PREVIOUSLY ESTABLISHED STANDARD, AND RANKED ACCORDING TO THEIR RELATIVE TECHNICAL MERITS. ***" THE EVALUATION PROCEDURES ARE DIVIDED INTO TWO TYPES, NAMELY, THOSE APPLICABLE TO "(1) 'HARDWARE' PROCUREMENTS, INCLUDING RESEARCH, DEVELOPMENT, AND SERVICE-TEST/DEVELOPMENT ENGINEERING, AND, (2) 'NONHARDWARE' PROCUREMENTS, INCLUDING RESEARCH, DEVELOPMENT, AND OTHER CONTRACTOR SERVICES *** ." BOTH TYPES OF PROCUREMENT ARE RATED BY TECHNICAL EVALUATION CRITERIA UNDER AFSC FORM 1 AND 1A IN THE FOLLOWING MANNER:

"1. SCIENTIFIC/ENGINEERING APPROACH (40-60)

"2. QUALIFICATIONS BASED ON USAF EXPERIENCE

"3. QUALIFICATIONS BASED ON OFFERORS DATA (40-60)"

ONLY ITEMS (1) AND (3) USE THE NUMERICAL WEIGHTED FACTORS IN COMPILING A RATING SCORE. ITEM (3) INCLUDES SPECIFIC EXPERIENCE, TECHNICAL ORGANIZATION AND SPECIAL TECHNICAL FACILITIES OF THE OFFEROR AND IS GIVEN EQUAL RATING TO THAT OF ITEM (1).

IT IS YOUR CONTENTION THAT, IN EFFECT, ITEM (3) IS BEING USED TO EVALUATE THE CAPACITY OF AN OFFEROR UNDER A PROCEDURE SET UP TO EVALUATE THE TECHNICAL ASPECTS OF PROPOSALS. IN THIS REGARD, YOU ALLEGE THAT THIS ACTION VIOLATES THE INTENT OF ASPR 1-705.4(B), WHICH SEPARATES THE EVALUATION OF TECHNICAL APPROACH FROM CAPACITY, EVEN IN R&D PROCUREMENTS. YOU FURTHER POINT OUT THAT A SMALL BUSINESS OFFEROR MAY PROVIDE OUTSTANDING TECHNICAL COMPETENCE BASED ON THE CRITERIA UNDER ITEM (1), ONLY TO HAVE THIS HIGH RATING "DERATED" BY APPLYING THE CAPACITY CRITERIA OF ITEM (3).

A REVIEW CONDUCTED BY THE SMALL BUSINESS ADMINISTRATION AND THE DEPARTMENT OF THE AIR FORCE CONFIRMS YOUR CONTENTIONS THAT HERETOFORE THE LANGUAGE AND PROCEDURES UNDER AFSCM 80-10 WERE SUSCEPTIBLE OF INTERPRETATION BY CONTRACTING OFFICERS WHICH MIGHT PERMIT CIRCUMVENTION OF THE CERTIFICATE OF COMPETENCY PROCEDURE UNDER ASPR 1-705.4.

BY LETTER DATED SEPTEMBER 4, 1970, HEADQUARTERS AIR FORCE SYSTEMS COMMAND ISSUED THE FOLLOWING DIRECTIVE TO ALL AFSC DIVISIONS WHICH STATES IN TECHNICAL PART:

"1. AFSCM 80-10 REQUIRES THE TECHNICAL EVALUATORS TO RANK COMPETITIVE PROPOSALS RECEIVED ON THE BASIS OF THE RELATIVE TECHNICAL MERITS WHICH INCLUDES TECHNICAL CAPACITY. ASPR 1-705.4 REQUIRES THE CONTRACTING OFFICER TO OBTAIN FROM THE SMALL BUSINESS ADMINISTRATION, IN CERTAIN CIRCUMSTANCES, A CERTIFICATION OF CAPACITY AND CREDIT FOR SMALL BUSINESS CONCERNS. THE CONTRACTING OFFICER IS PRECLUDED FROM COMPLYING WITH ASPR WHERE THE TECHNICAL EVALUATION IS BASED ON CAPACITY OR CREDIT AND A LOW RATING HAS DISQUALIFIED THE PROPOSER.

"2. THEREFORE, EFFECTIVE IMMEDIATELY, THE EVALUATION PROCEDURES OF AFSCM 80-10 ARE AMENDED AS FOLLOWS:

"A. ELIMINATE THE USE OF POINTS IN THE 'QUALIFICATIONS BASED ON OFFERORS DATA' SECTION OF AFSC FORMS 1 AND 1A.

"B. FURNISH THE COMPLETED COMPOSITE WORKSHEET, AFSC FORM 1 OR 1A, TO THE PROCUREMENT ACTIVITY AT THE TIME THE NARRATIVE EVALUATION IS PROVIDED.

"3. AFSCM 80-10 IS BEING REVISED TO RESOLVE ANY CONFLICT WITH THE ASPR. PENDING REVISION, TECHNICAL EVALUATORS WILL LIMIT THEIR NUMERICAL WEIGHTING AND RANKING OF PROPOSERS TO THE 'SCIENTIFIC/ENGINEERING APPROACH' (SEE FORMS 1 AND 1A) FACTORS ONLY. THE 'QUALIFICATIONS BASED ON USAF EXPERIENCE' AND 'QUALIFICATIONS BASED ON OFFERORS DATA' SECTIONS WILL BE COMPLETED IN ACCORDANCE WITH THE PRESENT INSTRUCTIONS BUT THE FACTORS WILL NOT BE USED FOR RANKING OF PROPOSERS. CONTRACTING OFFICERS WILL USE THIS INFORMATION FOR DETERMINING THE FINAL QUALIFICATION OF THE RANKED PROPOSERS AND TAKE ALL THE NECESSARY ACTIONS REQUIRED IN ACCORDANCE WITH ASPR PRIOR TO THE AWARD OF A CONTRACT."

SINCE THE ABOVE POLICY HAS BEEN INITIATED WHICH LIMITS THE USE OF POINTS, DURING THE TECHNICAL EVALUATION, TO FACTORS OTHER THAN CAPACITY OR CREDIT, WE VIEW THE ACTION TO BE IN ACCORD WITH OUR DECISION 46 COMP. GEN. 893, 1967, WHEREIN WE HELD THE PROVISIONS OF ASPR 1-705.4(B) TO BE CONTROLLING IN SIMILAR CIRCUMSTANCES.

WE APPRECIATE YOUR BRINGING THE MATTER TO OUR ATTENTION.