B-171920(1), SEP 2, 1971

B-171920(1): Sep 2, 1971

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CONTRACTS FOR COMMUNICATIONS SERVICES ARE SPECIFICALLY EXEMPTED FROM GOLD FLOW CONSIDERATIONS UNDER ASPR 6-805.2(A)(VIII)(A)(2) AND IT WAS THEREFORE UNNECESSARY TO INCREASE SUCCESSFUL OFFEROR'S PRICE FOR EVALUATION PURPOSES. WESTERN UNION'S BID WAS THE LOWEST PRICE OFFERED. FINDS NO LEGAL OBJECTION TO THE DETERMINATION BY DECCO THAT WESTERN UNION WAS ELIGIBLE FOR AWARD. INC.: THIS IS IN REFERENCE TO YOUR PROTEST AGAINST THE AWARD OF A CONTRACT DATED FEBRUARY 11. WITH THE IMPLEMENTATION OF THE IJCS-PAC CUTOVER PLAN THE 20 PHILIPPINES-JAPAN CIRCUITS HAVE BEEN REPLACED BY 24 INDIVIDUAL CIRCUITS UTILIZING A NEW PHILIPPINES OVERSEAS TELECOMMUNICATIONS CORPORATION TROPO-SCATTER SYSTEM BETWEEN THE PHILIPPINES AND TAIWAN.

B-171920(1), SEP 2, 1971

BID PROTEST - EVALUATION FACTORS - ELIGIBILITY FOR AWARD DECISION DENYING PROTEST AGAINST AWARD OF A CONTRACT TO WESTERN UNION INTERNATIONAL, INC., UNDER A SOLICITATION ISSUED BY THE DEFENSE COMMERCIAL COMMUNICATIONS OFFICE (DECCO) FOR COMMUNICATIONS SERVICE BETWEEN THE PHILIPPINES AND TAIWAN. CONTRACTS FOR COMMUNICATIONS SERVICES ARE SPECIFICALLY EXEMPTED FROM GOLD FLOW CONSIDERATIONS UNDER ASPR 6-805.2(A)(VIII)(A)(2) AND IT WAS THEREFORE UNNECESSARY TO INCREASE SUCCESSFUL OFFEROR'S PRICE FOR EVALUATION PURPOSES. FURTHER, BASED ON A FULL THREE YEARS OF OPERATION, WESTERN UNION'S BID WAS THE LOWEST PRICE OFFERED, AND SINCE THE PROCURING AGENCY BELIEVES WESTERN UNION UNIQUELY QUALIFIED TO PROVIDE THE SERVICES, THE COMP. GEN. FINDS NO LEGAL OBJECTION TO THE DETERMINATION BY DECCO THAT WESTERN UNION WAS ELIGIBLE FOR AWARD.

TO ITT WORLD COMMUNICATIONS, INC.:

THIS IS IN REFERENCE TO YOUR PROTEST AGAINST THE AWARD OF A CONTRACT DATED FEBRUARY 11, 1971, BY THE DEFENSE COMMERCIAL COMMUNICATIONS OFFICE (DECCO) TO WESTERN UNION INTERNATIONAL, INC. (WUI), FOR CERTAIN COMMUNICATIONS SERVICES BETWEEN THE PHILIPPINES AND TAIWAN AS SPECIFIED IN DECCO COMPETITIVE INQUIRY DA-22 JAN 71-305/I D346-27 AND AMENDMENTS.

THE PROCUREMENT IMPLEMENTS THE INTEGRATED JOINT COMMUNICATIONS SYSTEM PACIFIC (IJCS-PAC) CUTOVER PLAN WHICH REALIGNED COMMUNICATIONS CIRCUITRY LOCATED IN THE WESTERN PACIFIC AREA. PRIOR TO THIS PLAN, DECCO LEASED FROM RCA GLOBAL COMMUNICATIONS, INC. (RCA), AND ITT WORLD COMMUNICATIONS, INC. (ITT), 20 INDIVIDUAL CIRCUITS BETWEEN THE PHILIPPINES AND JAPAN. TWELVE OF THOSE CIRCUITS TERMINATED IN VARIOUS LOCATIONS WITHIN JAPAN AND THE REMAINING EIGHT EXTENDED FROM JAPAN TO OKINAWA VIA GOVERNMENT-OWNED OVER-THE-HORIZON RADIO SYSTEM. WITH THE IMPLEMENTATION OF THE IJCS-PAC CUTOVER PLAN THE 20 PHILIPPINES-JAPAN CIRCUITS HAVE BEEN REPLACED BY 24 INDIVIDUAL CIRCUITS UTILIZING A NEW PHILIPPINES OVERSEAS TELECOMMUNICATIONS CORPORATION TROPO-SCATTER SYSTEM BETWEEN THE PHILIPPINES AND TAIWAN. THESE CIRCUITS ARE EXTENDED TO OKINAWA AND JAPAN VIA GOVERNMENT FACILITIES. THE FOUR ADDITIONAL CHANNELS WERE UTILIZED BY ESTABLISHING THREE PHILIPPINES-OKINAWA AND ONE PHILIPPINES-TAIPAI CIRCUITS THAT WERE FORMERLY PROVIDED BY GOVERNMENT RADIO FACILITIES.

THE SOLICITATION CONTEMPLATED AN AWARD TO AN APPROPRIATE U.S. INTERNATIONAL RECORD CARRIER WHICH WOULD BE RESPONSIBLE FOR PROVIDING THE END-TO-END SERVICE SPECIFIED AND ASSURING THE TECHNICAL SUFFICIENCY OF THE SERVICE. THE STANDARD PROVISIONS INCORPORATED INTO THE SOLICITATION STATE THAT THE SERVICE MIGHT BE PROVIDED SOLELY BY THE COORDINATING CARRIER OR MIGHT, FOR SOME PORTIONS OF THE SERVICE, REQUIRE THE FACILITIES OF ANOTHER U.S. INTERNATIONAL CARRIER, A FOREIGN CORRESPONDENT, A DOMESTIC CARRIER OR THE U.S. GOVERNMENT.

YOUR CORRESPONDENCE CITES SEVERAL BASES FOR PROTESTING, ALL OF WHICH ARE CONSIDERED IN TURN BELOW.

FIRST, IT IS YOUR CONTENTION THAT WUI SHOULD NOT HAVE BEEN PERMITTED TO COMPETE FOR THIS PROCUREMENT. YOU STATE THAT, UNLIKE ITT AND RCA, WUI IS NOT AUTHORIZED BY THE FOREIGN GOVERNMENTS INVOLVED TO PROVIDE THE SERVICE AT EITHER OF THE TWO TERMINAL POINTS, AND SINCE IT DOES NOT WORK WITH ANY OF THE AMERICAN OWNED SYSTEMS BETWEEN THE TWO POINTS IT MUST OBTAIN SUCH SERVICES FROM A FOREIGN CORRESPONDENT. YOU FURTHER STATE THAT, CONTRARY TO THE INQUIRY, DECCO IS OVERLOOKING THE FACTOR OF AMERICAN OWNERSHIP AND THE INHERENT QUALITY CONTROL AND DISCIPLINE THAT IS OFFERED BY ITT AND RCA. MOREOVER, YOU STATE THAT "AUTHORIZED" CARRIERS WERE REQUIRED, AS EVIDENCED BY THE INSTRUCTIONS ISSUED IN A MESSAGE FROM THE DEFENSE COMMUNICATIONS AGENCY (DCA) TO DECCO, WHICH STATES THAT "LEASING ACTION IS TO BE ACCOMPLISHED WITH THE CONTRACT ISSUED TO AN APPROPRIATE U.S. INTERNATIONAL RECORD CARRIER (IRC)."

WE CANNOT AGREE WITH YOUR POSITION IN THIS MATTER. WUI IS LISTED AS A CARRIER TO BE CONSIDERED FOR AWARDS IN DECCO INTERNATIONAL LEASING PROCEDURES (DECCO INSTRUCTION 340-135-1, 6 MARCH 1968, IN EFFECT AT THE TIME THE INQUIRY WAS ISSUED, AND THE SUPERSEDING INSTRUCTION 300-70 5). THE CITED DECCO INSTRUCTIONS SPECIFICALLY AUTHORIZE THE CONTRACTOR, OR OVERALL COORDINATOR, TO UTILIZE FACILITIES OTHER THAN THOSE OWNED BY THE COORDINATING CARRIER. WHILE THE INSTRUCTIONS SEEM TO CONTEMPLATE THE USE OF SOME OF THE CONTRACTOR'S OWN FACILITIES, THERE IS NO ACTUAL REQUIREMENT IN THE PERTINENT PROCEDURES THAT IT DO SO. IT APPEARS THAT THE MAIN CONSIDERATION BY DECCO IN DETERMINING WUI'S ELIGIBILITY FOR THE AWARD WAS WHETHER THAT FIRM COULD PROVIDE THE REQUIRED SERVICES TO THE GOVERNMENT, EITHER THROUGH USE OF ITS OWN FACILITIES OR THROUGH THE FACILITIES OF OTHER CARRIERS. THE PROCURING AGENCY BELIEVED WUI TO BE UNIQUELY QUALIFIED TO PROVIDE THE SERVICES, AND WE CANNOT CONCLUDE THAT DECCO'S DETERMINATION THAT WUI WAS ELIGIBLE FOR THE AWARD IS SUBJECT TO LEGAL OBJECTION BY THIS OFFICE. IN THIS CONNECTION, DCA REPORTS THAT WUI MET THE SERVICE DATE AND HAS BEEN PERFORMING SATISFACTORILY.

YOU ALSO CONTEND THAT WUI'S BID SHOULD BE INCREASED BY 50 PERCENT FOR EVALUATION PURPOSES BECAUSE OF GOLD FLOW CONSIDERATIONS PURSUANT TO THE PROVISIONS OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) 6-800 ET SEQ. THESE PROVISIONS IMPLEMENT THE DEPARTMENT OF DEFENSE POLICY IN FURTHERANCE OF THE BALANCE OF PAYMENTS PROGRAM WITH RESPECT TO ALL PROCUREMENTS OF SUPPLIES AND SERVICES REQUIRED FOR USE OUTSIDE THE UNITED STATES. HOWEVER, ASPR 6-805.2(A)(VIII)(A)(2) LISTS COMMUNICATIONS SERVICES AS AN EXCEPTION TO GOLD FLOW CONSIDERATIONS, PROVIDED THE SERVICES DO NOT DUPLICATE OR REPLACE EXISTING ORGANIC SERVICE CAPABILITY. THE SERVICES BEING PROVIDED BY THE CONTRACT UNDER PROTEST REPLACE SERVICES WHICH WERE PROVIDED BY COMMERCIAL MEANS AND NOT BY AN EXISTING ORGANIC SERVICE CAPABILITY. WHILE YOU HAVE CITED OUR DECISION B-168708, MARCH 10, 1970 (49 COMP. GEN. 562 (1970)), IN SUPPORT OF YOUR POSITION, THAT DECISION INVOLVED A CONTRACT FOR A SUBMARINE CABLE SUBSYSTEM AND IS READILY DISTINGUISHABLE FROM THE PRESENT CONTRACT FOR COMMUNICATIONS SERVICES, WHICH SERVICES ARE SPECIFICALLY EXEMPTED BY THE ASPR.

YOU HAVE QUESTIONED WHETHER WUI'S BID REFLECTS THE LOWEST COST TO THE GOVERNMENT SINCE WUI QUOTED A HIGHER PRICE THAN ITT FOR THE FIRST FIVE MONTHS OF OPERATION. IN THIS CONNECTION THE SOLICITATION, AS AMENDED, PROVIDED FOR A THREE YEAR CONTRACT AND ON THIS BASIS THE RECORD SHOWS THAT WUI OFFERED THE LOWEST PRICE FOR THE TOTAL SERVICE PERIOD.

WE HAVE NOTED YOUR ALLEGATION THAT THE GOVERNMENT FAILED TO APPLY THE POLICIES STATED IN OFFICE OF MANAGEMENT AND BUDGET CIRCULAR A-76. IT HAS CONSISTENTLY BEEN OUR POSITION THAT THE DIRECTIVES INCORPORATED THEREIN ARE MATTERS OF EXECUTIVE POLICY. IN THAT CONNECTION THE CIRCULAR GENERALLY PROVIDES THAT IT IS THE PRIMARY RESPONSIBILITY OF THE AGENCIES IN THE EXECUTIVE BRANCH TO DETERMINE WHETHER A PARTICULAR PROGRAM SHOULD BE CARRIED OUT ON AN INDEPENDENT CONTRACTOR BASIS OR BY MEANS OF A REGULAR GOVERNMENT OPERATION WITH ITS OWN EMPLOYEES. SEE 42 COMP. GEN. 640 (1963) AND B-170079, SEPTEMBER 15, 1970.

WE HAVE ALSO NOTED YOUR CONTENTION THAT THE MONETARY ADVANTAGES STEMMING FROM THIS IMPLEMENTATION OF THE REALIGNED COMMUNICATIONS CIRCUITRY MIGHT BE NULLIFIED IF A CERTAIN AUTOVON AGREEMENT BETWEEN THE DEPARTMENT OF DEFENSE AND THE JAPANESE FIRM, KOKOSAI DENSHIN DENWA (KDD) IS REVISED UPWARDS AS A RESULT OF THE GOVERNMENT'S DISCONTINUANCE OF THE 20 CIRCUITS BETWEEN THE PHILIPPINES AND JAPAN. IN THIS CONNECTION THE DIRECTOR, DCA, HAS ADVISED THAT THE MATTER HAS BEEN DISCUSSED WITH KDD AND THERE IS NO REASON TO EXPECT ANY ADVERSE IMPACT ON OTHER COMMUNICATIONS PROGRAMS IN THE PACIFIC AS A RESULT OF THIS PROCUREMENT.

FINALLY, YOU STATE THAT DECCO HAS NOT JUSTIFIED THE CONSIDERATION AND ACCEPTANCE OF AN "AMENDMENT" TO WUI'S OFFER WHICH WAS RECEIVED ON FEBRUARY 8, 1971, AFTER THE CLOSING DATE FOR RECEIPT OF OFFERS. WE NOTE THAT WUI'S COMMUNICATION OF FEBRUARY 8 DOES NOT ACTUALLY CONSTITUTE AN AMENDMENT TO ITS OFFER BUT IS MERELY A CLARIFICATION OF ITS OFFER IN RESPONSE TO AN INQUIRY BY DECCO.

FOR THE REASONS STATED ABOVE, WE PERCEIVE NO LEGAL OBJECTION TO THE CONTRACT AWARDED IN THIS CASE.