B-173690, DEC 29, 1971

B-173690: Dec 29, 1971

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PROTESTANT CONTENDS THAT SEVEN OF THE SUPPLY CLASSES ARE ALREADY COVERED UNDER THEIR TIME AND MATERIALS REQUIREMENTS CONTRACT WITH THE U.S. SINCE PROTESTANT'S CONTRACT WITH AMEC IS FOR THE "OVERFLOW" REQUIREMENTS WHICH MIGHT RESULT FROM THE PHASE OUT OF THE CURRENT CONTRACTOR TO THE NEW ONE UNDER THE SAAMA CONTRACT. THERE IS NO LEGAL BASIS FOR QUESTIONING THE AWARD TO DUNLAP. TO MARIANNA AIR MOTIVE CORPORATION: REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 4. THE PROTEST IS DENIED. WHICH WILL EXPIRE ON DECEMBER 31. A MEMORANDUM OF UNDERSTANDING PRELIMINARY TO A DEFENSE MAINTENANCE INTERSERVICE SUPPORT AGREEMENT WAS CONSUMMATED BETWEEN SAAMA INVENTORY MANAGEMENT AND THE DEPARTMENT OF THE ARMY.

B-173690, DEC 29, 1971

BID PROTEST - "OVERFLOW" CONTRACTS DENIAL OF PROTEST AGAINST AWARD OF A CONTRACT TO DUNLAP SERVICES, INC., UNDER AN RFP ISSUED BY THE SAN ANTONIO AIR MATERIEL AREA (SAAMA), KELLY AFB, TEX., FOR A FIRM FIXED PRICE REQUIREMENTS CONTRACT FOR THE REPAIR AND OVERHAUL OF SUBSTANTIALLY ALL ITEMS WITHIN 23 FEDERAL SUPPLY CLASSES OF AEROSPACE GROUND EQUIPMENT. PROTESTANT CONTENDS THAT SEVEN OF THE SUPPLY CLASSES ARE ALREADY COVERED UNDER THEIR TIME AND MATERIALS REQUIREMENTS CONTRACT WITH THE U.S. ARMY MOBILITY EQUIPMENT COMMAND (AMEC). SINCE PROTESTANT'S CONTRACT WITH AMEC IS FOR THE "OVERFLOW" REQUIREMENTS WHICH MIGHT RESULT FROM THE PHASE OUT OF THE CURRENT CONTRACTOR TO THE NEW ONE UNDER THE SAAMA CONTRACT, THERE IS NO LEGAL BASIS FOR QUESTIONING THE AWARD TO DUNLAP. HOWEVER, THE COMP. GEN. BELIEVES THAT SUCH CONTRACTS SHOULD, IN THE FUTURE, EXPLICITLY ADVISE PROSPECTIVE CONTRACTORS OF THE SPECIFIC NATURE OF THE CONTEMPLATED CONTRACT.

TO MARIANNA AIR MOTIVE CORPORATION:

REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 4, 1971, AND PRIOR CORRESPONDENCE, PROTESTING THE AWARD OF A CONTRACT TO DUNLAP SERVICES, INC., UNDER REQUEST FOR PROPOSALS (RFP) NO. F41608-71-R-BF34, ISSUED BY THE DEPARTMENT OF THE AIR FORCE, SAN ANTONIO AIR MATERIEL AREA (SAAMA), KELLY AIR FORCE BASE, TEXAS.

FOR THE REASONS HEREINAFTER STATED, THE PROTEST IS DENIED.

THE RFP, ISSUED ON JULY 1, 1971, SOLICITED OFFERS FOR A FIRM FIXED PRICE REQUIREMENTS CONTRACT WITH PROVISION FOR MATERIALS REIMBURSEMENT FOR THE REPAIR AND OVERHAUL OF SUBSTANTIALLY ALL ITEMS WITHIN 23 FEDERAL SUPPLY CLASSES OF AEROSPACE GROUND EQUIPMENT. THE PROCUREMENT REPRESENTED A FOLLOW-ON TO A CONTRACT CURRENTLY IN EXISTENCE COVERING THE SAME SERVICES WITH THE B. B. SAXON COMPANY, INC., WHICH WILL EXPIRE ON DECEMBER 31, 1971. MARIANNA CLAIMS THAT CONTRACTUAL COVERAGE ALREADY EXISTS FOR SEVEN OF THE 23 CLASSES OF EQUIPMENT LISTED IN THE RFP UNDER ITS TIME AND MATERIALS REQUIREMENTS CONTRACT COVERING THE PERIOD OF JULY 1, 1971, TO JUNE 30, 1972, WITH THE UNITED STATES ARMY MOBILITY EQUIPMENT COMMAND (AMEC).

THE RECORD ESTABLISHES THAT MARIANNA HAS SUCH A CONTRACT WITH AMEC TO PROVIDE SERVICES FROM JULY 1, 1971, TO JUNE 30, 1972. WE QUOTE FROM THE SAAMA CONTRACTING OFFICER'S STATEMENT OF FACTS AND FINDINGS, WHICH SETS FORTH THE HISTORICAL CONTEXT AND JUSTIFICATION FOR THESE TWO APPARENTLY OVERLAPPING CONTRACTS FOR THE SAME SERVICES:

"3. IN ORDER TO ASSURE ADEQUATE COVERAGE FOR THE REPAIR AND OVERHAUL OF AEROSPACE GROUND EQUIPMENT PRIME AT SAAMA, A MEMORANDUM OF UNDERSTANDING PRELIMINARY TO A DEFENSE MAINTENANCE INTERSERVICE SUPPORT AGREEMENT WAS CONSUMMATED BETWEEN SAAMA INVENTORY MANAGEMENT AND THE DEPARTMENT OF THE ARMY, MOBILITY EQUIPMENT COMMAND, ST. LOUIS, MO. THIS AGREEMENT CONTEMPLATED THE AWARD OF CONTRACTS BY THE ARMY FOR REPAIR OF CERTAIN CLASSES OF AEROSPACE GROUND EQUIPMENT. ON THE BASIS OF THIS MEMORANDUM OF UNDERSTANDING THE ARMY AWARDED 7 CONTRACTS FOR THE REPAIR AND OVERHAUL OF 7 OF THE 23 CLASSES OF EQUIPMENT LISTED IN RFP 71-R-BF34. ***

"4. THE CONTRACT WHICH WAS ISSUED TO MARIANNA AIR MOTIVE CORPORATION BY THE MOBILITY EQUIPMENT COMMAND, DEPARTMENT OF THE ARMY, WAS REQUESTED BY THE SAAMA PRODUCTION MANAGEMENT BRANCH, MMRP, TO PROVIDE OVERFLOW REPAIR CAPABILITY OF ITEMS CURRENTLY BEING REPAIRED ON KELLY AFB BY B. B. SAXON COMPANY. SAAMA EXPERIENCE HAS SHOWN THAT THE ON BASE CONTRACTOR HAS NOT ALWAYS BEEN COMPLETELY ABLE TO RESPOND SATISFACTORILY TO THE SAAMA REPAIR REQUIREMENTS IN THAT IT HAS BEEN UNABLE TO MEET OUR REQUIRED TURN-AROUND TIMES BY REASON OF PLANT OVERLOADING OR LACK OF TOOLING OR TEST EQUIPMENT. FURTHER, RFP F41608 71-R-BF34 IS SOLICITING FOR PROPOSALS ON THE BASIS OF PERFORMANCE AT A CONTRACTOR-FURNISHED FACILITY NOT ON KELLY AFB. OUR PROPOSED CONTRACT CONTEMPLATES A PERIOD OF SEVERAL MONTHS FOR BOTH THE PHASE-OUT OF THE CURRENT ON-BASE CONTRACT AND THE START-UP OF THE NEW OFF-BASE CONTRACT. THEREFORE, BACKUP AND/OR INTERIM COVERAGE IS CONSIDERED NECESSARY DURING THESE PHASING PERIODS AND TO INSURE REPAIR CAPABILITY IN EVENT OF PRODUCTION PROBLEMS WITH THE NEW OFF-BASE CONTRACTOR. THE PROCUREMENT CONTEMPLATED BY R-BF34 IS A LONG RANGE PROGRAM WITH A VIEW TOWARD FIVE SUCCESSIVE YEARS OF CONTRACTOR PERFORMANCE BASED UPON A 'FIVE-YEAR POLICY' CONTRACT. THEREFORE, IT IS CONSIDERED ESSENTIAL THAT THE ITEMS REMAIN IN ABOVE SOLICITATION FOR PURPOSE OF PROGRAM CONTINUITY. THIS IS ESPECIALLY SO SINCE THE PROPOSED SAAMA CONTRACT WILL BE BASED UPON A FIXED PRICE TYPE CONTRACT WITH MATERIAL REIMBURSEMENT AS OPPOSED TO THE TIME AND MATERIAL CONTRACT WHICH HAS BEEN AWARDED BY THE DEPARTMENT OF THE ARMY."

WE NOTE THAT DUNLAP WAS AWARDED A CONTRACT UNDER THE RFP ON OCTOBER 8, 1971, FOR THE PERIOD OF JANUARY 1, 1972, TO DECEMBER 31, 1972. WE ALSO NOTE THAT UNDER ITS CONTRACT WITH AMEC, MARIANNA IS ENTITLED TO FIRST PREFERENCE FOR ONLY ONE OF THE SEVEN CLASSES INVOLVED AND THAT DUNLAP HAS FIRST PREFERENCE FOR THE OTHER SIX CLASSES. IN THIS REGARD, WE HAVE BEEN ADVISED THAT THE CLASS FOR WHICH MARIANNA HAS FIRST PREFERENCE CONSTITUTES ONLY, ON A BEST ESTIMATED QUANTITY BASIS, 6,480 OUT OF 493,543 TOTAL MAN- HOURS UNDER THE CONTRACT. OF COURSE, IT MUST BE RECOGNIZED THAT, IF THE FIRST-PREFERENCE CONTRACTOR (DUNLAP) ON THE AMEC CONTRACT FOR THE OTHER CLASSES CANNOT RESPOND TO THE "OVERFLOW" REQUIREMENTS, MARIANNA WOULD BE ENTITLED TO FULFILL THE REQUIREMENTS AS THE SECOND-PREFERENCE CONTRACTOR ON FIVE OF THE SEVEN CLASSES.

THE FILE REFLECTS DISAGREEMENT BETWEEN MARIANNA AND SAAMA AS TO WHETHER THE FIRM WAS AWARE OF THE "OVERFLOW" NATURE OF THESE AMEC CONTRACTS. NEITHER THE MARIANNA-AMEC CONTRACT, THE MEMORANDUM OF UNDERSTANDING BETWEEN THE TWO DEFENSE AGENCIES, NOR ANY CONTEMPORANEOUS DOCUMENTATION EXPLICITLY SETS FORTH THE "OVERFLOW" NATURE OF THE AMEC CONTRACT. HOWEVER, WE BELIEVE THAT THESE AMEC CONTRACTS IMPOSE NO OBLIGATION UPON SAAMA TO EXCLUSIVELY UTILIZE MARIANNA OR ANY OTHER AMEC CONTRACTOR TO FULFILL ITS REPAIR AND OVERHAUL REQUIREMENTS FOR THE SEVEN CLASSES IN QUESTION. IN THIS REGARD, THE REQUIREMENTS CLAUSE OF THE AMEC CONTRACT WITH MARIANNA STATES, IN PERTINENT PART, AS FOLLOWS:

"J 7. REQUIREMENTS (1966 OCT)

"(A) THIS IS A REQUIREMENTS CONTRACT FOR THE SUPPLIES OR SERVICES SPECIFIED IN THE SCHEDULE, AND FOR THE PERIOD SET FORTH THEREIN. DELIVERY OF SUPPLIES OR PERFORMANCE OF SERVICES SHALL BE MADE ONLY AS AUTHORIZED BY ORDERS ISSUED IN ACCORDANCE WITH THE CLAUSE ENTITLED 'ORDERING.' EXCEPT AS MAY BE OTHERWISE PROVIDED HEREIN, IN THE EVENT THE GOVERNMENT'S REQUIREMENTS FOR SUPPLIES OR SERVICES SET FORTH IN THE SCHEDULE DO NOT RESULT IN ORDERS IN THE AMOUNTS OR QUANTITIES DESCRIBED AS 'ESTIMATED' OR 'MAXIMUM' IN THE SCHEDULE, SUCH EVENT SHALL NOT CONSTITUTE THE BASIS FOR AN EQUITABLE PRICE ADJUSTMENT UNDER THIS CONTRACT.

"(B) EXCEPT AS OTHERWISE PROVIDED IN THIS CONTRACT, THE GOVERNMENT SHALL ORDER FROM THE CONTRACTOR ALL THE SUPPLIES OR SERVICES SET FORTH IN THE SCHEDULE WHICH ARE REQUIRED TO BE PURCHASED BY THE GOVERNMENT ACTIVITY IDENTIFIED IN THE 'ORDERING' CLAUSE, EXCLUDING THOSE ITEMS WHICH FALL WITHIN THE PURVIEW OF MANDATORY FEDERAL SUPPLY SCHEDULES AS SET FORTH IN ASPR 5-102.

"(G) SUBJECT TO ANY LIMITATIONS ELSEWHERE IN THIS CONTRACT, THE CONTRACTOR SHALL FURNISH TO THE GOVERNMENT ALL SUPPLIES AND SERVICES SET FORTH IN THE SCHEDULE WHICH ARE CALLED FOR BY DELIVERY ORDERS ISSUED IN ACCORDANCE WITH THE 'ORDERING' CLAUSE OF THIS CONTRACT."

THE ORDERING CLAUSE OF THE AMEC CONTRACT READS AS FOLLOWS:

"J 9. ORDERING (1968 JUN)

"(A) SUPPLIES OR SERVICES TO BE FURNISHED UNDER THIS CONTRACT SHALL BE ORDERED BY THE ISSUANCE OF DELIVERY ORDERS BY THE U.S. ARMY MOBILITY EQUIPMENT COMMAND. ORDERS MAY BE ISSUED UNDER THIS CONTRACT FROM DATE OF AWARD THROUGH EXPIRATION OF THE CONTRACT TERM."

WE INTERPRET THESE CLAUSES TO OBLIGE ONLY AMEC, NOT SAAMA, TO FULFILL ITS REQUIREMENTS FOR THE CLASSES IN QUESTION UNDER THE CONTRACT. IN THIS REGARD, THE TERMS OF THE MEMORANDUM OF UNDERSTANDING PROVIDE THAT MILITARY INTERDEPARTMENTAL PURCHASE REQUESTS (MIPR'S) FURNISHED AMEC BY THE AIR FORCE WILL BE HANDLED ACCORDING TO THE TERMS OF THE MEMORANDUM; THAT IS, UNDER REQUIREMENTS CONTRACTS SIMILAR TO THE TYPE HELD BY MARIANNA. HOWEVER, THERE IS NO BASIS TO CONCLUDE THAT ALL OF THE AIR FORCE'S REQUIREMENTS MUST BE FULFILLED UNDER AMEC'S CONTRACTS.

FURTHER, SAAMA HAS REAFFIRMED ITS POSITION THAT THE AMEC CONTRACTS PROVIDE COVERAGE FOR THE "OVERFLOW" SERVICES WHICH MIGHT RESULT, AND WHICH, IN FACT, HAVE RESULTED, FROM THE PHASING-OUT OF THE CURRENT CONTRACTOR (B. B. SAXON) AND THE PHASING-IN OF THE NEW CONTRACTOR (DUNLAP) AS PART OF A 5-YEAR PROGRAM. IN FACT THE MARIANNA-AMEC CONTRACT STATED THAT IT IS "EXPRESSLY UNDERSTOOD AND AGREED THAT THE GOVERNMENT GUARANTEES THE CONTRACTOR NO MINIMUM AMOUNT OF SUCH SERVICES DURING THE CONTRACT TERM." CONCERNING THE "OVERFLOW" NATURE OF THE AMEC CONTRACTS, SAAMA ADVISES THAT FOR THE PAST 9 YEARS, THE ARMY AND SAAMA HAVE UTILIZED "OVERFLOW" CONTRACTS WHILE MAINTAINING ON-BASE CONTRACTS. IN ADDITION, SAAMA AND AMEC HAVE ADVISED THAT ALL ORDERS PLACED UNDER THE LATTER'S CONTRACTS HAVE BEEN FOR THE "OVERFLOW" REQUIREMENTS OF SAAMA. FURTHERMORE, THE MEMORANDUM OF UNDERSTANDING AND AMEC CONTRACTS RESULTING THEREFROM COVER ONLY THOSE CLASSES WHEREIN AN "OVERFLOW" SITUATION IS CONTEMPLATED. THUS, A COURSE OF CONDUCT HAS BEEN ESTABLISHED WHEREUNDER AMEC'S REQUIREMENTS, ALTHOUGH CONTROLLED BY SAAMA, HAVE A SEPARATE AND DISTINCT CHARACTER FROM THOSE OF SAAMA.

THEREFORE, WE DO NOT FIND A LEGAL BASIS UPON WHICH WE COULD QUESTION THE SAAMA ACTIONS IN INITIATING AND EFFECTING THE AWARD TO DUNLAP. SEE B- 153450, MAY 6, 1964, COPY HEREWITH, INVOLVING A SOMEWHAT ANALOGOUS SITUATION. WE RECOGNIZE THAT SUBSEQUENT TO JANUARY 1, 1972, DUNLAP WILL HAVE BOTH THE BASIC SAAMA CONTRACT AND FIRST PREFERENCE ON SIX OF THE SEVEN CLASSES UNDER THE AMEC CONTRACTS. HOWEVER, SAAMA HAS DETERMINED THAT DUNLAP HAS THE CAPABILITY TO PERFORM UNDER THE SAAMA CONTRACT. WOULD APPEAR, AS SAAMA HAS CONFIRMED, THAT THIS SITUATION MIGHT VERY WELL RESULT IN ADDITIONAL BUSINESS TO MARIANNA, AS WELL AS OTHER CONTRACTORS, IF DUNLAP CANNOT HANDLE THE ANTICIPATED "OVERFLOW" REQUIREMENTS.

WHILE WE WILL NOT OBJECT TO THE AWARD MADE TO DUNLAP, WE BELIEVE THAT ANY FUTURE "OVERFLOW" REQUIREMENTS PROCUREMENTS SHOULD EXPLICITLY ADVISE ALL PROSPECTIVE CONTRACTORS OF THE SPECIFIC NATURE OF THE CONTEMPLATED CONTRACT. WE ARE BRINGING THIS MATTER TO THE ATTENTION OF THE SECRETARY OF THE AIR FORCE.