B-171067, MAR 18, 1971

B-171067, MAR 18, 1971

BID PROTEST - NONAPPROPRIATED FUNDS - JURISDICTION REAFFIRMING PRIOR DECISION DENYING PROTEST OF FREQUENCY ENGINEERING LABORATORIES AGAINST THE AWARD OF A NEGOTIATED CONTRACT ISSUED BY THE U.S. ARMY PROCUREMENT CENTER, FRANKFURT, GERMANY FOR THE PURCHASE OF RADIO EQUIPMENT TO ARF PRODUCTS, INC. PURCHASE OF THE EQUIPMENT DEVOLVED UPON THE FEDERAL REPUBLIC OF GERMANY; THEREFORE, NO PROTEST CAN BE HEARD WHEN THE PROCUREMENT DOES NOT INVOLVE APPROPRIATED FUNDS OF UNITED STATES GOVERNMENT.

TO FREQUENCY ENGINEERING LABORATORIES:

THIS REFERS TO YOUR LETTER DATED NOVEMBER 24, 1970, PROTESTING AGAINST THE AWARD OF A CONTRACT TO ARF PRODUCTS, INCORPORATED, (ARF) UNDER REQUEST FOR PROPOSALS NO. DAJA37-70-R-0558, ISSUED BY THE UNITED STATES ARMY PROCUREMENT CENTER, FRANKFURT, GERMANY.

YOU HAD PREVIOUSLY PROTESTED THIS PROCUREMENT AND ON NOVEMBER 10, 1970, YOU WERE ADVISED BY OUR OFFICE THAT SINCE THE PROCUREMENT DID NOT INVOLVE APPROPRIATED FUNDS OF THE UNITED STATES GOVERNMENT, OUR OFFICE HAD NO JURISDICTION TO RENDER AN AUTHORITATIVE DECISION ON YOUR PROTEST.

IN YOUR LETTER OF NOVEMBER 24, 1970, YOU URGE THAT THIS PROCUREMENT DOES INVOLVE APPROPRIATED FUNDS AND YOU QUESTION ARF'S CAPACITY TO PERFORM. REQUESTED A FULL REPORT ON THE MATTERS RAISED IN YOUR LETTER OF NOVEMBER 24.

THE CONTRACTING OFFICER'S REPORT CONTAINS THE FOLLOWING DETAILS CONCERNING YOUR PROTEST:

" *** PURCHASE OF AN/GRC-50 RADIO EQUIPMENT DEVOLVED UPON THE FEDERAL REPUBLIC OF GERMANY AS THEIR CONTRIBUTION TO THE NATO EFFORT. THE US ARMY PROCUREMENT AGENCY, EUROPE WAS DIRECTED BY THE COMMANDER-IN CHIEF UNITED STATES ARMY EUROPE TO MAKE THE PURCHASE THROUGH CONTRACT NEGOTIATION ON BEHALF OF THE GERMAN GOVERNMENT. FUNDS FOR THE PROCUREMENT OF RADIO, MULTIPLES AND TEXT EQUIPMENT IN THE TOTAL AMOUNT OF $1,101,928.40 HAVE BEEN PROVIDED BY THE GERMAN GOVERNMENT BY DEPOSITING SAID AMOUNT WITH THE US DISBURSING OFFICER, PARIS, FRANCE *** . IT IS SPECIFIED THAT NO PART OF THIS PURCHASE WILL BE PAID WITH O&MA OR OTHER TYPE OF APPROPRIATED FUNDS. THE REFERENCE OF FEL TO US FUNDING IN THE AMOUNT OF 40% HAS NO BASIS IN FACT. THE CONTENTION OF FEL THAT US APPROPRIATED FUNDS ARE INVOLVED BY REASONS OF THE US CLAUSES IN THE CONTRACT IS NOT TENABLE. NON- APPROPRIATED FUND REGULATIONS REQUIRE CERTAIN US CLAUSES AND OTHER CLAUSES IN APPLICABLE PROCUREMENT REGULATIONS BE INCLUDED IN CONTRACTS DESPITE THE FACT THAT NON-APPROPRIATED FUNDS ARE USED. THE SUM AND SUBSTANCE REMAINS THAT US APPROPRIATED FUNDS WILL NOT BE USED FOR CONTRACT PAYMENT. THE POSITION OF THIS AGENCY CONCERNING THE SUBJECT DISCUSSED IN THE REMAINING PARAGRAPHS OF THE FEL LETTER AS TO THE RESPONSIBILITY OF A.R.F. PRODUCTS REMAINS UNCHANGED AS THE ALLEGATIONS MADE WERE DETERMINED TO BE UNFOUNDED IN FACT. A.R.F. CAPABILITY TO PERFORM WAS VERIFIED BY THE COGNIZANT DCASR OFFICE AT DALLAS TEXAS AT SEVERAL INSTANCES *** . THE CONCLUDING STATEMENT IN FEL'S LETTER OF 13 NOVEMBER 1970 *** COULD NOT BE VERIFIED DESPITE SEVERAL ATTEMPTS TO DO SO."

THE STATEMENT IN FEL'S LETTER OF NOVEMBER 13, 1970, REFERRED TO IN THE LAST SENTENCE IN THE ABOVE QUOTATION IS THE ASSERTION THAT THE ARF PLANT HAS BEEN CLOSED AND THAT THE GOVERNMENT HAS BEEN NOTIFIED THAT ARF WILL OR HAS FILED A PETITION UNDER CHAPTER 11 OF THE BANKRUPTCY LAWS. A TELEGRAM FROM DCASR, DALLAS, DATED NOVEMBER 7, 1970, STATES THAT THE CONTRACTOR'S ABILITY TO PERFORM WAS CONFIRMED AND THAT THE CONTRACTOR HAD ADVISED DCASR THAT IT HAD NOT NOTIFIED ANY GOVERNMENT AGENCY OF AN INTENT TO FILE A PETITION IN BANKRUPTCY. OUR OFFICE WAS ADVISED BY ARMY ON FEBRUARY 24, 1971, THAT A REPORT FROM DCASR, DALLAS, DATED JANUARY 7, 1971, INDICATED THAT NO DIFFICULTIES WITH THE CONTRACTOR WERE BEING ENCOUNTERED. ARMY ALSO ADVISED THAT NO DELAY IN DELIVERY IS ANTICIPATED. INFORMATION HAS BEEN RECEIVED FROM THE CONTRACTING OFFICER, UNITED STATES PROCUREMENT AGENCY, EUROPE, ADVISING THAT THE DIFFERENCE IN THE DATES FOR DELIVERY IN THE SOLICITATION AND THE CONTRACT WAS DUE TO A DELAY IN MAKING THE AWARD OCCASIONED BY THE NECESSITY FOR CLARIFYING CERTAIN TECHNICAL MATTERS AND COORDINATING WITH DCASR, DALLAS, ON CERTAIN PRICING FACTORS. THE DIFFERENCE IN THE DELIVERY DATES IN THE SOLICITATION AND CONTRACT CORRESPONDS TO THESE DELAYS.

PURSUANT TO OUR REVIEW OF YOUR LETTER OF NOVEMBER 24 AND ARMY'S REPORT, WE FIND THAT THIS PROCUREMENT DOES NOT INVOLVE APPROPRIATED FUNDS OF THE UNITED STATES GOVERNMENT. THEREFORE, AS WE HAVE PREVIOUSLY ADVISED YOU, OUR OFFICE DOES NOT HAVE JURISDICTION WITH REGARD TO THIS MATTER. WITH RESPECT TO ARF'S PRODUCTION AND FINANCIAL CAPABILITIES, A PROPOSED CONTRACTOR'S RESPONSIBILITY, EVEN WHERE THE CONTRACT WOULD INVOLVE THE EXPENDITURE OF APPROPRIATED FUNDS, IS PRIMARILY FOR DETERMINATION BY THE CONTRACTING AGENCY.