B-171286, FEB 17, 1971

B-171286: Feb 17, 1971

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FAILURE TO REFER THE FINDING THAT PROTESTANT WAS NONRESPONSIBLE TO THE SMALL BUSINESS ADMINISTRATION WAS JUSTIFIED. INCORPORATED: FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST AWARD OF A CONTRACT TO FAIRCHILD HILLER CORPORATION BY THE SACRAMENTO AIR MATERIEL AREA. AS PROVIDED IN THE RFP A BRIEFING FOR PROSPECTIVE OFFERORS WAS CONDUCTED ON OCTOBER 21. THE CLOSING DATE FOR RECEIPT OF PROPOSALS WAS OCTOBER 30. AT WHICH TIME FIVE OFFERS WERE RECEIVED. NEGOTIATIONS WERE CONDUCTED BY TELEPHONE FROM OCTOBER 31. FAIRCHILD HILLER'S PROPOSAL WAS EVALUATED SECOND LOWEST. CONCURRENT PREAWARD SURVEYS OF YOUR FIRM AND FAIRCHILD HILLER WERE CONDUCTED NOVEMBER 2 THROUGH NOVEMBER 6. AWARD WAS MADE TO THE LATTER ON NOVEMBER 10.

B-171286, FEB 17, 1971

BID PROTEST - BIDDER RESPONSIBILITY - SMALL BUSINESS ADMINISTRATION DENIAL OF PROTEST OF I.C.E.S., INC., AGAINST THE AWARD OF A NEGOTIATED CONTRACT ISSUED BY THE SACRAMENTO AIR MATERIEL AREA, MCCLELLAN AIR FORCE BASE, CALIF., FOR RECONDITIONING AND MODIFYING T-28 AIRCRAFT TO T-28D-0 AIRCRAFT CONFIGURATIONS TO FAIRCHILD HILLER CORPORATION. SINCE REFERRAL OF A DETERMINATION OF NON-RESPONSIBILITY ON A SMALL BUSINESS FIRM WOULD DELAY AIRCRAFT OUTPUT BY AT LEAST 26 CALENDAR DAYS AND AIRCRAFT DELIVERY HAS BEEN PROMISED BY THE U.S. TO OTHER COUNTRIES WHO URGENTLY NEED THEM FOR COMBAT PURPOSES, FAILURE TO REFER THE FINDING THAT PROTESTANT WAS NONRESPONSIBLE TO THE SMALL BUSINESS ADMINISTRATION WAS JUSTIFIED.

TO I.C.E.S., INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST AWARD OF A CONTRACT TO FAIRCHILD HILLER CORPORATION BY THE SACRAMENTO AIR MATERIEL AREA, MCCLELLAN AIR FORCE BASE, CALIFORNIA, PURSUANT TO REQUEST FOR PROPOSALS NO. F04606-71-R-0146.

THE SUBJECT RFP, ISSUED OCTOBER 15, 1970, SOLICITED PROPOSALS ON RECONDITIONING AND MODIFYING T-28 AIRCRAFT TO T-28D-0 AIRCRAFT CONFIGURATIONS IN ACCORDANCE WITH DETAILED SPECIFICATIONS. AS PROVIDED IN THE RFP A BRIEFING FOR PROSPECTIVE OFFERORS WAS CONDUCTED ON OCTOBER 21, 1970, FOR THE PURPOSE OF CLARIFYING ANY QUESTIONS CONCERNING THE PROCUREMENT. THE CLOSING DATE FOR RECEIPT OF PROPOSALS WAS OCTOBER 30, 1970, AT WHICH TIME FIVE OFFERS WERE RECEIVED. NEGOTIATIONS WERE CONDUCTED BY TELEPHONE FROM OCTOBER 31, 1970, THROUGH NOVEMBER 2, 1970. YOU SUBMITTED THE LOWEST EVALUATED PROPOSAL, AND FAIRCHILD HILLER'S PROPOSAL WAS EVALUATED SECOND LOWEST. CONCURRENT PREAWARD SURVEYS OF YOUR FIRM AND FAIRCHILD HILLER WERE CONDUCTED NOVEMBER 2 THROUGH NOVEMBER 6, 1970. AS A RESULT THEREOF, THE CONTRACTING OFFICER DETERMINED YOUR FIRM NON-RESPONSIBLE AND FAIRCHILD HILLER RESPONSIBLE. AWARD WAS MADE TO THE LATTER ON NOVEMBER 10, 1970.

YOUR PROTEST RELATES PRIMARILY TO THE DETERMINATION OF NON RESPONSIBILITY AND TO YOUR CONTENTION THAT AWARD TO YOUR FIRM WOULD HAVE SAVED THE GOVERNMENT OVER $500,000. WITH REGARD TO THE MATTER OF RESPONSIBILITY, YOU POINT OUT THAT THE SHORT TIME FROM THE DATE OF ISSUANCE OF THE RFP ON OCTOBER 15 TO THE CLOSING DATE ON OCTOBER 30 AFFORDED SUCH LITTLE TIME TO PREPARE A PROPOSAL, PREPARE FOR A PREAWARD SURVEY AND ESTABLISH A LINE OF CREDIT, THAT YOU WERE MUCH LESS PREPARED THAN USUAL. YOU POINT OUT THAT WHILE THE SURVEY WAS IN PROGRESS YOU WERE IN THE PROCESS OF OBTAINING THE NECESSARY CREDIT, AND ADVISED A GOVERNMENT REPRESENTATIVE ON NOVEMBER 6 AND 9 THAT YOU HAD RAISED OVER $600,000. FURTHERMORE, YOU STATE THAT IN THE PAST YOU SUCCESSFULLY PERFORMED SEVERAL GOVERNMENT CONTRACTS INVOLVING WORK COMPARABLE TO THAT CALLED FOR UNDER THE SUBJECT RFP, AND ARE PRESENTLY PERFORMING CONTRACTS FOR THE SAN ANTONIO AIR MATERIEL AREA AND THE NAVAL AIR SYSTEMS COMMAND. ALSO, YOU POINT OUT THAT ON OCTOBER 29 YOU ADVISED THE PROCUREMENT AGENCY THAT IN THE EVENT OF A NEGATIVE SURVEY YOU WANTED THE MATTER REFERRED TO THE SMALL BUSINESS ADMINISTRATION FOR CERTIFICATE OF COMPETENCY CONSIDERATION, AND YOU CONTEND THAT THE FAILURE TO DO SO WAS CONTRARY TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1- 705. MOREOVER, YOU ASSERT THAT THE CONTRACT MAY HAVE BEEN AWARDED ON NOVEMBER 7, 1970, WHICH WAS PRIOR TO THE TIME THE SURVEY REPORT WAS COMPLETED AND PRESENTED TO THE SURVEY BOARD FOR EVALUATION.

WITH RESPECT TO THE PRICE DIFFERENTIAL, IT IS YOUR CONTENTION THAT YOUR PROPOSAL WAS MORE THAN $377,000 LESS THAN FAIRCHILD HILLER'S. FURTHERMORE, YOU POINT OUT THAT YOU OFFERED TO REDUCE YOUR PRICE 4.18 PERCENT ($130,000) IF PROGRESS PAYMENTS WERE AUTHORIZED. IN THIS CONNECTION, YOU CONTEND THAT THE FAILURE OF THE RFP TO INCLUDE A PROVISION FOR PROGRESS PAYMENTS WAS IN VIOLATION OF ASPR E-502.1.

WITH REGARD TO YOUR COMPLAINT THAT TOO LITTLE TIME WAS ALLOWED FOR PREPARING YOUR PROPOSAL, PREPARING FOR A SURVEY, AND ARRANGING FOR FINANCING, THE CONTRACTING OFFICER REPORTS THAT THE PROCUREMENT WAS URGENT AS EVIDENCED BY THE "CERTIFICATE OF URGENCY" (WHICH IS QUOTED BELOW) EXECUTED IN CONNECTION WITH NONREFERRAL OF THE MATTER OF RESPONSIBILITY TO SBA. IN ADDITION, HE REPORTS THAT YOU AND OTHER PROSPECTIVE BIDDERS WERE INVITED TO AND DID ATTEND A PRESOLICITATION CONFERENCE ON OCTOBER 1 AND 2, 1970, IN WHICH THE MAGNITUDE AND SCHEDULE OF THE PROCUREMENT WERE EXPLAINED; THAT CONFERENCE ATTENDEES WERE FURNISHED DRAFT COPIES OF THE ENGINEERING SPECIFICATIONS AND APPENDIX A, WORK SPECIFICATION; THAT YOU WERE ADVISED BY TELEPHONE ON OCTOBER 9, 1970, THAT THE RFP AND A DATA PACKAGE WEIGHING ABOUT 150 - 200 POUNDS WOULD BE READY ON OCTOBER 15, 1970, AND COULD BE PICKED UP AT SMAMA; THAT YOU REQUESTED IT BE MAILED; AND THAT YOU WERE FURNISHED A COPY OF THE BID SET WHEN YOU ATTENDED THE CONFERENCE ON OCTOBER 21, 1970, AS YOU HAD NOT RECEIVED IT IN THE MAIL. ALSO, HE POINTS OUT THAT ALL BIDDERS WERE OPERATING UNDER THE SAME TIME RESTRAINTS.

UNDER ASPR 1-902 CONTRACTS ARE TO BE AWARDED ONLY TO RESPONSIBLE PROSPECTIVE CONTRACTORS. A RESPONSIBLE PROSPECTIVE CONTRACTOR IS ONE WHO MEETS THE STANDARDS SET FORTH IN ASPR 1-903. AMONG THE STANDARDS SET FORTH THEREIN ARE ADEQUATE FINANCIAL RESOURCES, ABILITY TO COMPLY WITH THE REQUIRED DELIVERY SCHEDULE, AND THE NECESSARY ORGANIZATION, EXPERIENCE, TECHNICAL SKILLS, EQUIPMENT AND FACILITIES, OR THE ABILITY TO OBTAIN THEM. WHEN A BID OR OFFER IS TO BE REJECTED BECAUSE THE PROSPECTIVE CONTRACTOR IS FOUND NONRESPONSIBLE, THE CONTRACTING OFFICER IS REQUIRED BY ASPR 1-904 TO EXECUTE A DETERMINATION OF NONRESPONSIBILITY. WHERE HE DETERMINES A SMALL BUSINESS BIDDER OR OFFEROR NONRESPONSIBLE AS TO CAPACITY OR CREDIT, HE IS REQUIRED TO REFER THE MATTER TO THE SMALL BUSINESS ADMINISTRATION UNLESS HE CERTIFIES THAT THE AWARD MUST BE MADE WITHOUT DELAY PURSUANT TO ASPR 1 705.4(C)(IV).

ON THE MATTER OF RESPONSIBILITY THE CONTRACTING OFFICER EXECUTED THE FOLLOWING DOCUMENTS PURSUANT TO ASPR 1-904 AND 1-705.4(C)(IV), RESPECTIVELY:

"DETERMINATION OF NON-RESPONSIBILITY

"1. PURSUANT TO THE PROVISIONS OF ASPR 1-904 AND BASED UPON THE NO AWARD RECOMMENDATION OF PRE-AWARD SURVEY NO. SM 0-1031-297 I HEREBY DETERMINE THAT INTERCONTINENTAL ENGINE SERVICE IS NOT A RESPONSIBLE CONTRACTOR FOR THIS PROCUREMENT WITHIN THE MEANING OF ASPR 1-902 AND 1 903, IN THAT THE CONTRACTOR;

"A. DOES NOT HAVE ADEQUATE FINANCIAL RESOURCES AND HAS NO ACCEPTABLE PLAN FOR OBTAINING SUCH RESOURCES.

"B. DOES NOT HAVE ADEQUATE INPLANT CAPABILITY OR EXISTING SUBCONTRACT ARRANGEMENTS TO MEET THE PRODUCTION REQUIREMENTS OF THIS PROGRAM.

"C. DOES NOT HAVE ADEQUATE TECHNICAL CAPABILITY IN THAT THE CONTRACTOR HAS AN ENGINEERING STAFF OF ONE (1) ENGINEER WHO IS ALSO PRODUCTION CONTROL MANAGER. SUBCONTRACT ARRANGEMENTS WITH MR. YEOMAN, CONSULTING ENGINEER, IS UNSATISFACTORY IN THAT MR. YEOMAN OPERATES AS AN INDIVIDUAL AND HAS NO STAFF. THE ENGINEERING ORGANIZATION DESCRIBED BY THE CONTRACTOR IS TOTALLY INADEQUATE TO ACCOMPLISH THE CONTRACT REQUIREMENTS.

"D. THE CONTRACTOR'S SAFETY PROGRAM IS DEFICIENT AND EVIDENCE INDICATES THAT THE CONTRACTOR DOES NOT OPERATE TO PRESCRIBED SAFETY REQUIREMENTS. THERE IS NO AFFIRMATIVE EVIDENCE THAT THE CONTRACTOR CAN OPERATE IN COMPLIANCE WITH THE APPENDIX C OR RFP F04606-71-R-0146.

"2. I HAVE REVIEWED THE AIR FORCE CONTRACTOR EXPERIENCE LIST AND THE EL PASO FACILITY OF ICES IS LISTED THEREON. THIS FACILITY IS OPERATED UNDER THE SAME GENERAL MANAGEMENT AS THE BROWNSVILLE FACILITY."

"CERTIFICATE OF URGENCY

DETERMINATION NOT TO REFER TO S.B.A.

"1. RFP F04606-71-[-0146 IS FOR RECONDITION AND MODIFICATION OF 50 EACH T-28 AIRCRAFT IN SUPPORT OF PROJECT PEACE PROP. THIS PROGRAM HAS BEEN ASSIGNED FAD II PRECEDENCE 1-11.

"2. THE MILESTONE SCHEDULE FOR CONTRACT AWARD HAS BEEN DEVELOPED BY HQ AFLC AND COORDINATED WITH CSAF. IT IS IMPERATIVE THAT THESE MILESTONES BE MET IN ORDER TO ACCOMPLISH OUTPUT OF AIRCRAFT ON SCHEDULE. THE NEED FOR THESE AIRCRAFT IS CRITICAL. SPECIFICS ARE SET FORTH IN SECRET DPCHJUSMAG MSG 290630Z AUG 70.*

"3. REFERRAL OF A DETERMINATION OF NON-RESPONSIBILITY ON A SMALL BUSINESS FIRM REQUIRES 15 WORKING DAYS. AN ADDITIONAL 5 WORKING DAYS WOULD BE REQUIRED FOR FILE PREPARATION PENDING THE OUTCOME OF THE REFERRAL. THIS DELAY WOULD DELAY AIRCRAFT OUTPUT BY AT LEAST 26 CALENDAR DAYS. AN EQUIVALENT SLIPPAGE IN AIRCRAFT OUTPUT AS PROVIDED IN THE RFP WOULD RESULT.

"4. AIRCRAFT DELIVERY HAS BEEN PROMISED BY THE U.S. GOVERNMENT TO OTHER COUNTRIES. SINCE THESE ARE COMBAT AIRCRAFT AND ARE URGENTLY REQUIRED BY THE RECIPIENT COUNTRIES, SERIOUS INTERNATIONAL PROBLEMS COULD RESULT FROM DELAY IN DELIVERY.

"5. BASED UPON THE ABOVE THE UNDERSIGNED HEREBY CERTIFIES THAT THIS PROCUREMENT IS OF SUCH URGENCY THAT PURSUANT TO ASPR 1-705.4(C)(IV) REFERRAL OF THE DETERMINATION OF NON-RESPONSIBILITY ON INTERCONTINENTAL ENGINE SERVICES, BROWNSVILLE, TEXAS TO THE SMALL BUSINESS ADMINISTRATION NEED NOT BE MADE.

(SIGNED) WILLIAM R. SWARS 9 NOV 1970

WILLIAM R. SWARS

CONTRACTING OFFICER

APPROVED:

(SIGNED) NIVEN T. CRAWFORD

NIVEN T. CRAWFORD, ACTING

DIRECTOR OF PROCUREMENT AND PRODUCTION

*CONTINUED URGENCY OF THE REQUIREMENTS AS OF 7 NOV 70 IS CONFIRMED BY AFLC CONFIDENTIAL MESSAGE 072010Z NOV 70."

THE CONTRACTING OFFICER HAS FURNISHED OUR OFFICE COPIES OF THE PRE AWARD SURVEY REPORT AND THE PRE-AWARD SURVEY REVIEW BOARD FINDINGS, BOTH DATED NOVEMBER 8, 1970, UPON WHICH HIS DETERMINATION OF NONRESPONSIBILITY WAS BASED. THE PRE-AWARD SURVEY REPORT IS COMPREHENSIVE AND THE NEGATIVE FINDINGS IN THE AREAS OF TECHNICAL CAPABILITY, PRODUCTION CAPABILITY, FINANCIAL CAPABILITY, PLANT SAFETY, MANAGEMENT CAPABILITY, AND ABILITY TO MEET THE REQUIRED SCHEDULE ARE WELL DOCUMENTED. THE REPORT IS TOO EXTENSIVE TO QUOTE IN ITS ENTIRETY. HOWEVER, QUOTED BELOW IS THE MONITOR'S REPORT, WHICH SUMMARIZES THE CONCLUSIONS OF THE COGNIZANT MEMBERS OF THE SURVEY TEAM IN THEIR RESPECTIVE AREAS OF RESPONSIBILITY:

"NEGATIVE FACTORS - DD 1524-5, MONITORS REPORT

TECHNICAL CAPABILITY (ENGINEERING)

"1. THE I.C.E.S. ENGINEERING STAFF CONSISTS OF ONE MAN, MR. BAKER, WHO IS ALSO PRODUCTION CONTROL MANAGER. THE CONTRACTOR PROPOSED TO SUBCONTRACT THE ENGINEERING EFFORT TO KEN YOEMAN OF SAN ANTONIO WHO IS AN INDEPENDENT CONSULTING ENGINEER. MR. YOEMAN WOULD HAVE TO EMPLOY OTHER ENGINEERS AS THE NEED AROSE TO SUPPORT THE PROGRAM. MR. BAKER AND MR. YOEMAN WERE NOT FAMILIAR WITH THE REQUIREMENTS OF THE SOLICITATION, DRAWINGS OR OTHER TECHNICAL DATA PROVIDED. THE PROPOSED ENGINEERING AND TECHNICAL SUPPORT BOTH IN MANPOWER AND PLANNING WAS INADEQUATE TO MEET THE REQUIREMENTS OF THIS PROGRAM. REFERENCE DETAILED REPORT ON FACTOR 1.

"2. PRODUCTION CAPABILITY.

"THE PROPOSED LAYOUT AND FUNCTIONS OF THE RECONDITION/MODIFICATION LINE CHANGED CONTINUALLY DURING THE SURVEY. THE LINE LAYOUT INDICATED A LACK OF UNDERSTANDING OF THE VOLUME OF THE EFFORT AND SPACE REQUIRED DURING PEAK BUILDUP PERIODS. THE CONTRACTOR'S BACK UP SHOPS WERE INADEQUATE TO SUPPORT THE LINE IN THE AREAS OF SHEETMETAL MANUFACTURE, TUBE BENDING, HYDRAULIC, PROPELLER AND GOVERNOR, CASTING AND FORGINGS, ENGINE BUILDUP, MACHINING AND ARMAMENT SHOPS. THE CONTRACTOR PROPOSED TO RELY ON APPROXIMATELY 14 SUBCONTRACTORS LOCATED AT VARIOUS DISTANCES UP TO 850 MILES FROM THE I.C.E.S. PLANT. THE CONTRACTOR PROPOSED FOR THE CRITICAL SUPPORT IN SHEETMETAL MANUFACTURE AND TUBE BENDING WAS SURVEYED AND FOUND TO BE INCAPABLE OF EITHER SHEETMETAL OR TUBING PRODUCTION. LACK OF FIRM COMMITMENTS ON THE PART OF OTHER SUBCONTRACTORS MAKE THIS CAPABILITY A QUESTIONABLE FACTOR. THE PROPOSED MANNING FOR THE LINE AND SHOPS, PARTICULARLY IN THE MANAGEMENT AREA IS CONSIDERED INADEQUATE FOR THE VOLUME OF THIS PROGRAM, DUE TO EXCESSIVE RELIANCE ON ONE MAN. REFERENCE DETAILED REPORT ON FACTOR 2.

"4. FINANCIAL CAPABILITY

"I.C.E.S. IS IN A PRECARIOUS FINANCIAL CONDITION WITH ($119,370) WORKING CAPITAL AND A ($136,420) NET WORTH AS OF 30 SEPTEMBER 1970 AUDIT REPORT. A SBA LOAN BALANCE OF APPROXIMATELY $106,000 IS AVAILABLE PROVIDING THE SBA CAN FIND A BANK THAT WILL ACCEPT THE RISK. THE CONTRACTOR'S ATTEMPT TO RECEIVE APPROVAL TO SELL $450,000 OF DEBENTURE BONDS HAS BEEN UNSUCCESSFUL. THE COMPANY WAS GIVEN THE OPPORTUNITY DURING THE SURVEY TO PRESENT NEW FINANCIAL INFORMATION, BUT WAS UNABLE TO DO SO. THE COMPLETE LACK OF INTERESTED FINANCIAL BACKING AND DIFFICULTIES EXPECTED IN MEETING THE PAYROLL ETC. AND IN VIEW OF THE FACT THAT PROGRESS PAYMENTS ARE NOT A PART OF THE SOLICITATION, ADD UP TO A CRITICAL NEGATIVE RECOMMENDATION ON THIS ESSENTIAL FACTOR. REFERENCE DETAIL REPORTS ON FACTOR 4.

"9. PLANT SAFETY

"THE AREAS OF INDUSTRIAL SAFETY AND FIRE PROTECTION WERE FOUND INADEQUATE DUE TO A NON-EXISTENT INDUSTRIAL SAFETY PROGRAM AND DANGEROUS FIRE CONDITIONS IN THE BUILDINGS, THE CONTRACTOR LEASES FROM THE CITY. REFERENCE DETAILED INDUSTRIAL SAFETY AND FIRE PROTECTION REPORTS ON FACTOR 9.

"13. ABILITY TO MEET REQUIRED SCHEDULE

"THE CONTRACTOR DOES NOT HAVE ANY IN-BEING ENGINEERING CAPABILITY OR UNDERSTANDING OF TECHNICAL REQUIREMENTS TO MEET THE SCHEDULE OF THE SOLICITATION WHICH IS A CRITICAL NEGATIVE FACTOR IN HIS ABILITY TO MEET SCHEDULE. THE PROPOSED PRODUCTION PLAN AND CAPABILITY IS INADEQUATE IN THE AREAS OF RECONDITIONING/MODIFICATION LINE LAYOUT, BACKUP SHOPS, SUBCONTRACTING, ABILITY TO MANUFACTURE TOOLING AND EQUIPMENT AND PROPOSED SKILLS AND MANNING. MANAGEMENT CAPABILITY IS ALSO CONSIDERED INADEQUATE FOR TIMELY IDENTIFICATION AND CORRECTION OF PROBLEMS INHERIT IN A PROGRAM OF THIS VOLUME AND COMPLEXITY. THE CONTRACTORS CRITICAL NEGATIVE FINANCIAL CONDITION WOULD FURTHER DETRACT FROM HIS ABILITY TO CORRECT SERIOUS DEFICIENCIES IN TECHNICAL AND PRODUCTION CAPABILITY. REFERENCE DETAIL REPORTS ON FACTORS 1, 2 AND 4. "14. MANAGEMENT

"MANAGEMENT WAS NOT KNOWLEDGEABLE OF THE TERMS OF THE SOLICITATION. DEPARTMENT HEADS WERE NOT INFORMED OF WHAT OTHER DEPARTMENTS WERE THINKING OR PLANNING. AT THE BEGINNING OF THE SURVEY NO TECHNICAL, (ENGINEERING), AND PRODUCTION PLANS WERE AVAILABLE FOR REVIEW AND WERE SUBSEQUENTLY PREPARED IN INSUFFICIENT DETAIL TO SUPPORT THE IN-DEPTH EVALUATION REQUIRED. KEY MANAGEMENT PERSONNEL CONTINUALLY CHANGED THEIR MINDS WHEN QUESTIONED ON HOW THE PLANT WAS TO BE LAYED OUT AND THE WORK PERFORMED. THEIR PREVIOUS LACK OF EXPERIENCE WITH ENGINEERING REQUIREMENTS OF THE TYPE REQUIRED FOR THE T-28 PROGRAM WOULD SERIOUSLY COMPLICATE INADEQUATE CAPABILITY IN PRODUCTION AND FINANCIAL FACTORS. THE CONTRACTOR DID NOT RECOGNIZE A NEED FOR INCREASED MANAGEMENT DEPTH WHICH IS PRESENTLY INADEQUATE WITH EXCESSIVELY HEAVY RELIANCE ON TWO KEY PEOPLE. THE DETERIORATING FINANCIAL CONDITION OF THE CORPORATION WOULD FURTHER COMPLICATE THEIR ABILITY TO MANAGE THE PROGRAM TO MEET THE CRITICAL PRODUCTION SCHEDULE. REFERENCE DETAILED REPORTS ON FACTORS 1, 2 AND 4."

ALTHOUGH YOU FURNISHED CERTAIN ADDITIONAL INFORMATION BEARING ON THE QUESTION OF FINANCIAL CAPABILITY SUBSEQUENT TO THE NEGATIVE RECOMMENDATION IN THIS AREA, THE CONTRACTING OFFICER REPORTS THAT THIS INFORMATION DID NOT REQUIRE A CHANGE IN HIS DETERMINATION OF NONRESPONSIBILITY WHICH WAS BASED PRIMARILY ON THE NEGATIVE RECOMMENDATIONS IN THE OTHER AREAS OF CAPABILITY. ALSO, AS NOTED ABOVE, THE CONTRACT WAS NOT AWARDED AS YOU CONTEND PRIOR TO COMPLETION AND PRESENTATION OF THE SURVEY REPORT.

WITH RESPECT TO YOUR CONTENTION THAT YOU HAVE PERFORMED, AND ARE PRESENTLY PERFORMING SUCCESSFULLY CONTRACTS OF THE SAME TYPE FOR THE GOVERNMENT, THE CONTRACTING OFFICER STATES:

"ICES FURTHER ALLEGES THAT THEY HAVE SUCCESSFULLY PERFORMED AND ARE PRESENTLY PERFORMING ON GOVERNMENT CONTRACTS FOR THE SAME TYPE OF WORK CALLED FOR IN THIS PROCUREMENT. ICES' CURRENT WORKLOAD OF MAINTENANCE ON AF T-29/C-131 AND NAVY T-34 AIRCRAFT WAS EVALUATED FOR COMPLEXITY IN COMPARISON TO THE T-28 MODIFICATION/RECONDITIONING PROGRAM. WORKBOOKS FOR BOTH AIRCRAFT WERE CHECKED AND THE WORK WAS FOUND TO BE ROUTINE MAINTENANCE AND COMPONENT REPLACEMENT. THE WORK BEING PERFORMED DID NOT INCLUDE DESIGN AND DEVELOPMENT ENGINEERING OF MODIFICATIONS, MODIFICATION INSTALLATIONS, COMPLETE ELECTRICAL SYSTEM REWIRE OR ARMAMENT SYSTEMS INSTALLATION AND CHECKOUT WHICH ARE ESSENTIAL REQUIREMENTS OF THE T-28 PROGRAM. THE PRESENT DELIVERY SCHEDULE ON THE T-29/C-131, T-34 AIRCRAFT OF APPROXIMATELY 7 AIRCRAFT IN WORK AT ONE TIME IS NOT COMPARABLE TO THE COMPLEXITY OF THE T-38 SCHEDULE WHICH WOULD REQUIRE 30 TO 35 AIRCRAFT IN WORK AT THE SAME TIME. ICES HAS BEEN ABLE TO MEET THE DELIVERY SCHEDULE WITH SATISFACTORY QUALITY DUE TO THE ROUTINE NATURE OF THE WORK PERFORMED AND THE RELAXED DELIVERY REQUIREMENTS. ICES HAS NOT PERFORMED AIRCRAFT DESIGN AND DEVELOPMENT ENGINEERING WHICH IS A MOST CRITICAL REQUIREMENT OF THE T-28 PROGRAM."

IT HAS LONG BEEN OUR POSITION THAT IT IS NEITHER THE PROVINCE NOR THE INTENTION OF OUR OFFICE TO DETERMINE THE RESPONSIBILITY OF PROSPECTIVE CONTRACTORS, SUCH DETERMINATION BEING A QUESTION OF FACT PRIMARILY FOR DETERMINATION BY THE CONTRACTING OFFICER CONCERNED. 45 COMP. GEN. 4, 6, 7 (1965), AND CASES CITED. IN THOSE AND OTHER DECISIONS WE HAVE TAKEN THE POSITION THAT SUCH DETERMINATION NECESSARILY INVOLVES THE EXERCISE OF A CONSIDERABLE RANGE OF DISCRETION AND JUDGMENT, WHICH SHOULD NOT BE DISTURBED BY OUR OFFICE IN THE ABSENCE OF CONVINCING EVIDENCE THAT THE DETERMINATION HAD NO REASONABLE BASIS. UNDER THAT STANDARD WE ARE REQUIRED TO ACCEPT THE DETERMINATION OF NONRESPONSIBILITY.

WITH REGARD TO THE CONTENTION THAT YOUR PROPOSAL WAS MORE THAN $377,000 BELOW THAT OF FAIRCHILD HILLER, THE CONTRACTING OFFICER REPORTS THE FOLLOWING:

" *** IT IS ASSUMED THAT ICES ARRIVED AT THIS AMOUNT BY SUBTRACTING THEIR OFFER FOR CONTRACT ITEMS 1 THROUGH 9 ($3,133,858.64) FROM THE TOTAL AWARD AMOUNT ($3,510,311.38). THE $3,510,311.38 WAS ARRIVED AT BY ADDING THE FAIRCHILD HILLER PROPOSAL OF $3,038,803.88 FOR ITEMS 1 THROUGH 9, ESTIMATED WORK REQUEST COSTS OF $189,007.50. (21,750 HRS X PROPOSED RATE OF $8.69 PER HOUR) AND ESTIMATED CAP MATERIAL COST OF $282,500. HAD THE AWARD BEEN MADE TO ICES THE TOTAL AWARD AMOUNT WOULD HAVE BEEN $3,133,858.64 (PROPOSED FOR ITEMS 1 THROUGH 9) PLUS WORK REQUEST OF $102,660.00 (21,750 HRS X PROPOSED RATE OF $4.72 PER HOUR) AND $282,500. ESTIMATED CAP MATERIAL COST FOR A TOTAL OF $3,519,018.64. THEREFORE, THE ALLEGATION MADE BY ICES THAT THEIR PROPOSAL WAS $377,000 LOWER IN PRICE IS IN ERROR. ICES'S TOTAL PROPOSAL WAS IN FACT EVALUATED AT $11,364.14 LOWER THAN THAT OF FAIRCHILD HILLER."

THE CONTRACTING OFFICER STATES THAT FURTHER NEGOTIATIONS WOULD HAVE BEEN HELD ON YOUR OFFER TO REDUCE YOUR PRICE BY 4.18 PERCENT IF PROGRESS PAYMENTS WERE AUTHORIZED EXCEPT FOR THE NEGATIVE DETERMINATION ON RESPONSIBILITY. IN VIEW OF THE DETERMINATION OF NONRESPONSIBILITY, WE DO NOT BELIEVE IT NECESSARY TO CONSIDER WHETHER THE RFP SHOULD HAVE PROVIDED FOR PROGRESS PAYMENTS.

IN THE CIRCUMSTANCES REPORTED ABOVE, THERE IS NO BASIS FOR OUR OFFICE TO DISTURB THE AWARD TO FAIRCHILD HILLER.