B-176852, FEB 13, 1973

B-176852: Feb 13, 1973

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USE OF GOVERNMENT PROPERTY HELD BY A CONTRACTOR UNDER A FACILITIES CONTRACT IS PROPER IF THE COMPETITIVE ADVANTAGE AFFORDED THE CONTRACTOR BY SUCH USE IS EQUALIZED IN ACCORDANCE WITH ASPR 13-503. SUCH USE OF GOVERNMENT PROPERTY IS IN CONSONANCE WITH THE STATED DEPARTMENT OF DEFENSE POLICY OF PUTTING SUCH PROPERTY TO THE GREATEST POSSIBLE USE. OTHER OFFERORS NEED NOT BE ADVISED THAT THIS CONTRACTOR PROPOSES TO USE GOVERNMENT PROPERTY IN PERFORMANCE OF THE CONTRACT IF THE CONTRACTOR'S RESULTANT COMPETITIVE ADVANTAGE IS EQUALIZED IN THE EVALUATION OF THE PROPOSALS. 46 COMP. THERE IS NO RIGID RULE OF BID RESPONSIVENESS SINCE THE PROCEDURES FOR SUCH PROCUREMENTS ARE DESIGNED TO BE FLEXIBLE AND INFORMAL. 47 COMP.

B-176852, FEB 13, 1973

BID PROTEST - EVALUATION FOR GOVERNMENT FURNISHED EQUIPMENT - RESPONSIBILITY DECISION DENYING THE PROTEST OF SOUTHERN ENTERPRISES, INC., AGAINST THE AWARD OF A CONTRACT TO AMERICAN GEAR AND PINION CORPORATION UNDER AN RFP ISSUED BY THE U.S. ARMY MUNITIONS COMMAND, JOLIET, ILL., FOR BOOSTERS. USE OF GOVERNMENT PROPERTY HELD BY A CONTRACTOR UNDER A FACILITIES CONTRACT IS PROPER IF THE COMPETITIVE ADVANTAGE AFFORDED THE CONTRACTOR BY SUCH USE IS EQUALIZED IN ACCORDANCE WITH ASPR 13-503. SEE B-152723, DECEMBER 30, 1963. MOREOVER, SUCH USE OF GOVERNMENT PROPERTY IS IN CONSONANCE WITH THE STATED DEPARTMENT OF DEFENSE POLICY OF PUTTING SUCH PROPERTY TO THE GREATEST POSSIBLE USE. ASPR 13-401. OTHER OFFERORS NEED NOT BE ADVISED THAT THIS CONTRACTOR PROPOSES TO USE GOVERNMENT PROPERTY IN PERFORMANCE OF THE CONTRACT IF THE CONTRACTOR'S RESULTANT COMPETITIVE ADVANTAGE IS EQUALIZED IN THE EVALUATION OF THE PROPOSALS. 46 COMP. GEN. 578 (1966). ALSO, IN NEGOTIATED PROCUREMENTS, THERE IS NO RIGID RULE OF BID RESPONSIVENESS SINCE THE PROCEDURES FOR SUCH PROCUREMENTS ARE DESIGNED TO BE FLEXIBLE AND INFORMAL. 47 COMP. GEN. 459, 461 (1968). FINALLY, A CERTIFICATE OF COMPETENCY ISSUED BY THE SBA IS DETERMINATIVE ON THE ISSUE OF RESPONSIBILITY WHERE ALL NEGATIVE FINDINGS REGARDING SUCH RESPONSIBILITY MADE IN A PRE-AWARD SURVEY WERE RELATED TO A BIDDER'S CREDIT AND CAPACITY.

TO SOUTHERN ENTERPRISES, INC.:

REFERENCE IS MADE TO YOUR PROTEST OF AUGUST 24, 1972, AGAINST THE AWARD OF A CONTRACT TO AMERICAN GEAR AND PINION CORPORATION (AGP), UNDER REQUEST FOR PROPOSALS (RFP) NO. DAAA09-72-R-0086, ISSUED BY THE UNITED STATES ARMY MUNITIONS COMMAND (MUCOM), JOLIET, ILLINOIS, ON MARCH 31, 1972, FOR A QUANTITY OF 2,198,980 M125A1 BOOSTERS.

THE RECORD REVEALS THAT PART OF THIS QUANTITY REMAINED FROM CONTRACT DAAA09-71-C-0228, ENTERED INTO WITH DEFENSE ORDNANCE CORPORATION (DOC) ON FEBRUARY 19, 1971, AND SUBSEQUENTLY TERMINATED FOR DEFAULT ON MARCH 15, 1972. AN ADDITIONAL QUANTITY OF BOOSTERS COVERED BY THE SOLICITATION REPRESENTED THE ADDITIONAL AMOUNT AVAILABLE FOR PROCUREMENT AT THE TIME WHEN THE SOLICITATION WAS ISSUED.

IN ADDITION TO THE QUANTITY OF BOOSTERS, THE SOLICITATION INITIALLY CONTEMPLATED THE USE BY THE SUCCESSFUL CONTRACTOR AT HIS OPTION OF THE GOVERNMENT-OWNED FACILITIES AND TOOLING PHYSICALLY LOCATED AT THE DOC PLANT, AND HELD BY DOC PURSUANT TO FACILITIES CONTRACT DAAA09-68-C 0343, AS WELL AS THE LAND AND BUILDING OWNED BY DOC SUBJECT TO THE APPLICATION OF AN EVALUATION FACTOR DESIGNED TO ELIMINATE THE COMPETITIVE ADVANTAGE WHICH WOULD OTHERWISE RESULT FROM SUCH USE. HOWEVER, BECAUSE LITIGATION AROSE WITH RESPECT TO THE BUILDING AND THE LAND, IT WAS DECIDED TO EXCLUDE USE OF THE LAND AND BUILDING FROM THE SOLICITATION AND TO PROVIDE INSTEAD FOR THE SHIPMENT OF THE GOVERNMENT OWNED FACILITIES AND TOOLING TO THE PLANT OF THE SUCCESSFUL CONTRACTOR AT THE EXPENSE OF THE CONTRACTOR IN THE EVENT THE CONTRACTOR CHOSE TO UTILIZE ANY OF THE GOVERNMENT PROPERTY. THE SOLICITATION ALSO PROVIDED THAT AN APPROPRIATE FACILITIES CONTRACT WOULD BE ENTERED WITH THE SUCCESSFUL SUPPLY CONTRACTOR IN SUCH EVENT. FINALLY, THE SOLICITATION PROVIDED FOR THE USE OF GOVERNMENT PRODUCTION AND RESEARCH PROPERTY ALREADY IN THE OFFEROR'S POSSESSION, SUBJECT TO THE APPLICATION OF AN APPROPRIATE EVALUATION FACTOR AND REQUIRED APPROVALS OF COGNIZANT CONTRACTING OFFICERS.

TWELVE PROPOSALS WERE RECEIVED ON MAY 9, 1972. NEGOTIATIONS WERE CONDUCTED WITH TEN OF THE FIRMS SUBMITTING PROPOSALS (TWO FIRMS HAVING WITHDRAWN THEIR PROPOSALS), AND WERE CLOSED ON JUNE 20, 1972. AGP SUBMITTED THE LOWEST EVALUATED UNIT PRICE. HOWEVER, SINCE AGP WAS DETERMINED TO BE NONRESPONSIBLE ON THE BASIS OF A NEGATIVE PREAWARD SURVEY, REFERRAL WAS MADE TO THE SMALL BUSINESS ADMINISTRATION (SBA) OFFICE IN ATLANTA, GEORGIA, FOR A CERTIFICATE OF COMPETENCY (COC) ON JULY 7, 1972, AS REQUIRED BY ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1- 705.4. THE WASHINGTON OFFICE OF SBA ISSUED A COC ON AUGUST 21, 1972. AUTHORITY TO MAKE THE AWARD TO AGP PRIOR TO THE RESOLUTION OF SOUTHERN ENTERPRISES, INCORPORATED'S (SEI) PROTEST WAS REQUESTED FROM HIGHER AUTHORITY ON AUGUST 28, 1972, BASED ON URGENCY. AUTHORITY TO PROCEED WITH THE AWARD WAS GRANTED ON AUGUST 31, 1972, BY THE ASSISTANT SECRETARY OF THE ARMY (INSTALLATIONS AND LOGISTICS), AND AWARD WAS MADE TO AGP ON THAT DATE.

THE PRIMARY BASIS OF YOUR PROTEST IS YOUR CONTENTION THAT AGP, WITHOUT "LEGAL RIGHT," CONDITIONED ITS PROPOSAL ON THE USE OF CERTAIN GOVERNMENT- FURNISHED EQUIPMENT (GFE), OTHER THAN THAT LISTED IN THE SOLICITATION, WHICH HAD BEEN SHIPPED TO ITS PLANT BY THE ARMY UNDER DOC FACILITIES CONTRACT -0343 PURSUANT TO REQUESTS BY DOC. IT APPEARS TO BE YOUR POSITION THAT THIS ADDITIONAL EQUIPMENT WAS IMPROPERLY HELD BY AGP INASMUCH AS AGP WAS NOT A PARTY TO THE FACILITIES CONTRACT BETWEEN THE GOVERNMENT AND DOC AND HELD NO SEPARATE FACILITIES CONTRACT IN ITS OWN RIGHT, AND INASMUCH AS IT IS YOUR OPINION THAT IN ANY EVENT THE DOC FACILITIES CONTRACT PROPERLY SHOULD HAVE BEEN TERMINATED AT THE SAME TIME THE DOC SUPPLY CONTRACT WAS TERMINATED, THEREBY APPARENTLY REMOVING THE GFE IN QUESTION FROM AGP'S CONTROL. YOU MAINTAIN THAT AGP WAS AFFORDED A COMPETITIVE ADVANTAGE AS A RESULT OF ITS PROPOSED USE OF THE GFE QUESTIONED BY YOU, APPARENTLY ON THE GROUND THAT THIS GFE WAS NOT OFFERED TO OTHER OFFERORS OR OTHERWISE MENTIONED IN THE RFP. ALSO, YOU ALTERNATIVELY COMPLAIN THAT AGP'S FAILURE TO SUBMIT WITH ITS OFFER APPROVAL FOR USE OF THE QUESTIONED GFE FROM THE CONTRACTING OFFICER WITH COGNIZANCE OVER IT WAS A FATAL DEFECT. ALTHOUGH IT HAS NO BEARING ON YOUR PROTEST AGAINST AWARD OF THE SUBJECT CONTRACT TO AGP, YOU FURTHER ALLEGE THAT THE COMPANY HAS USED THE GFE IN QUESTION FOR MANUFACTURE OF COMPONENTS TO BE SUPPLIED TO OTHER GOVERNMENT PRIME CONTRACTORS WITHOUT PROPER GOVERNMENT AUTHORIZATION.

IN ADDITION TO YOUR COMPLAINTS ABOUT THE GFE HELD BY AGP, YOU COMPLAIN GENERALLY THAT THE SBA COC DETERMINING THAT AGP WAS RESPONSIBLE AS REGARDS CAPACITY AND CREDIT WAS NOT ISSUED IN A TIMELY MANNER PURSUANT TO THE REQUIREMENTS OF ASPR 1-705.4(C); THAT AGP WILL EXCEED SHIFT LIMITATIONS STIPULATED BY THE RFP WITH RESPECT TO COMPONENT AND END ITEM MANUFACTURE; THAT AGP WILL NOT BE ABLE TO CONFORM TO SPECIFICATIONS BECAUSE AGP MANUFACTURES PINIONS BY TWO DIFFERENT MANUFACTURING METHODS, CONTRARY TO RFP PROVISIONS WHICH REQUIRE THAT EACH INSPECTION LOT OF CONTRACT END ITEMS BE PRODUCED BY A SINGLE MANUFACTURING PROCESS; AND THAT THE INTERIM SOLE SOURCE AWARD OF A LETTER CONTRACT FOR A QUANTITY OF THE SUBJECT BOOSTERS TO THE INGRAHAM CORP. RESULTED IN THE UNNECESSARY EXPENDITURE OF FUNDS.

ON THE QUESTION OF THE GFE IN AGP'S POSSESSION AND THE PROPRIETY OF ITS USE UNDER THE INSTANT CONTRACT, THE ARMY MATERIEL COMMAND ADMINISTRATIVE REPORT CONCEDES THAT THE EQUIPMENT IN QUESTION WAS INITIALLY FURNISHED AGP DURING THE PERFORMANCE OF THE EARLIER DOC SUPPLY CONTRACT FOR AGP'S USE AS A SUBCONTRACTOR TO DOC. IN THIS REGARD, THE REPORT STATES THAT ON AUGUST 31, 1971, WHILE DOC'S EARLIER CONTRACT WITH MUCOM WAS IN EFFECT, DOC REQUESTED CERTAIN EQUIPMENT FROM MUCOM TO AID IT IN THE PRODUCTION OF PINIONS. ON SEPTEMBER 10, 1971, DOC DIRECTED THAT THIS EQUIPMENT BE SHIPPED TO AGP, WHICH WAS GOING TO BE DOC'S PINION SUPPLIER. AUTHORITY TO USE THIS EQUIPMENT WAS GRANTED TO DOC ON OCTOBER 4, 1971. THIS ACTION WAS FORMALIZED ON NOVEMBER 15, 1971, BY MODIFICATION OF DOC'S FACILITIES CONTRACT. A SHORT TIME LATER DOC'S AGENT APPROACHED MUCOM WITH A REQUEST FOR ADDITIONAL EQUIPMENT. THIS ADDITIONAL EQUIPMENT ALSO WAS TO BE SENT TO AGP FOR PRODUCTION OF PINIONS FOR DOC. THE REQUEST ALSO CITED THE DOC FACILITY CONTRACT AS THE DOCUMENT UNDER WHICH ACCOUNTABILITY FOR THE EQUIPMENT WAS TO BE MADE.

IT IS THE POSITION OF AMC, HOWEVER, THAT THE EQUIPMENT HELD BY AGP, AS WELL AS THE OTHER FACILITIES AND TOOLING LOCATED AT DOC'S PLANT AND LATER INCLUDED IN THE INSTANT RFP, WAS PROPERLY MAINTAINED UNDER THE DOC FACILITIES CONTRACT, NOTWITHSTANDING THE TERMINATION OF DOC'S SUPPLY CONTRACT, INASMUCH AS IT WAS DESIRED TO RETAIN THE EQUIPMENT AS PART OF THE MOBILIZATION BASE AND THE FACILITIES CONTRACT WAS THE PROPER VEHICLE TO ASSURE ACCOUNTABILITY TO THE GOVERNMENT PENDING OTHER ARRANGEMENTS. NOTE IN THIS REGARD THAT THE INSTANT RFP CONTEMPLATED THE AWARD OF A FACILITIES CONTRACT FOR ANY GFE USED UNDER THE SUPPLY CONTRACT TO BE AWARDED.

ON THE QUESTION OF AGP'S PURPORTED COMPETITIVE ADVANTAGE, THE REPORT STATES THAT THE EQUIPMENT HELD BY AGP WAS EXCLUDED FROM THE RFP PURPOSELY BECAUSE IT WAS DETERMINED THAT THE AGP FACILITY WAS TO BE RETAINED AS A "MOBILIZATION PLANNED PRODUCER (COMMON SUBCONTRACTOR) FOR PRECISION COMPONENTS" WHETHER OR NOT IT RECEIVED AWARD UNDER THE SUBJECT RFP. TOWARD THIS END, IT IS REPORTED THAT A MOBILIZATION AGREEMENT HAS BEEN EXECUTED BETWEEN AGP AND THE GOVERNMENT. ALSO, THE REPORT POINTS OUT THAT ALTHOUGH INFORMATION WITH RESPECT TO THE PROPERTY HELD BY AGP WAS NOT DETAILED IN THE RFP, THE RFP DID ALLOW THE OFFER OF GFE IN THE POSSESSION OF AN OFFEROR BUT NOT CALLED OUT IN THE RFP SUBJECT TO THE APPLICATION OF AN APPROPRIATE EVALUATION FACTOR AND THE GRANTING OF PERMISSION BY THE CONTRACTING OFFICER HAVING COGNIZANCE OF THE PROPERTY FOR ITS USE. FURTHER, IT IS REPORTED THAT THE AGP-HELD PROPERTY, AS WELL AS THE PROPERTY DETAILED IN THE RFP, WAS PROPERLY EVALUATED IN ACCORDANCE WITH ASPR SECTION 13, PART 5, IN ORDER TO ELIMINATE ANY COMPETITIVE ADVANTAGE, AND THAT THE EVALUATION FACTOR APPLIED TO THE AGP PROPOSAL WAS APPROXIMATELY THREE TIMES THAT APPLIED TO ANY OTHER OFFEROR. THE REPORT TAKES THE POSITION THAT PERMISSION FOR USE OF THIS EQUIPMENT WAS PROPERLY FURNISHED DURING NEGOTIATIONS, NOTWITHSTANDING THE RFP REQUIREMENT THAT IT BE FURNISHED WITH THE OFFER, CITING 46 COMP. GEN. 578 (1966), AND STATES THAT COMPENSATION WILL BE SECURED FROM AGP FOR ANY PRIOR UNAUTHORIZED USE OF THE EQUIPMENT.

FOR REASONS DISCUSSED BELOW, WE MUST CONCLUDE THAT THE CONSIDERATION OF THE AGP-HELD EQUIPMENT IN THIS INSTANCE IS NOT SUBJECT TO QUESTION.

FIRST, WE CANNOT AGREE WITH YOUR CONTENTION THAT AGP WAS NOT LEGALLY ENTITLED TO HOLD THE PROPERTY IN ITS POSSESSION OR TO PROPOSE ITS USE UNDER THE SUBJECT RFP SINCE THAT PROPERTY WAS CHARGED TO DOC UNDER FACILITIES CONTRACT -0343. IN THIS REGARD, SECTION 13 OF ASPR PROVIDES FOR THE USE OF GOVERNMENT PROPERTY BY PRIME AND SUBCONTRACTORS WHERE PROPER, SUBJECT ONLY TO THE EQUALIZATION OF COMPETITIVE ADVANTAGE BY THE PAYMENT OF RENT OR THE APPLICATION OF APPROPRIATE PREAWARD EVALUATION FACTORS, AND TO THE PROTECTION OF THE GOVERNMENT'S INTEREST BY ASSURING PROPER MAINTENANCE AND ULTIMATE RETURN TO THE GOVERNMENT'S CONTROL. THE GOVERNMENT'S INTEREST IN SUCH CONTRACTOR-HELD PROPERTY IS ORDINARILY PROTECTED BY MEANS OF A FACILITIES CONTRACT. HOWEVER, SO LONG AS THE GOVERNMENT'S RIGHTS ARE ADEQUATELY PROTECTED BY THE EXISTENCE OF A FACILITIES CONTRACT PROVIDING ENFORCEABLE RIGHTS AGAINST THE PARTY CHARGED WITH RESPONSIBILITY FOR MAINTAINING THE PROPERTY, WE ARE AWARE OF NO PROHIBITION AGAINST THE OFFER OF THAT PROPERTY FOR USE ON OTHER CONTRACTS EITHER BY THE HOLDER OF THE FACILITIES CONTRACT OR BY HIS SUBCONTRACTOR. IN THIS CASE THERE IS NO INDICATION THAT THE GOVERNMENT'S RIGHTS UNDER THE DOC FACILITIES CONTRACT COULD NOT BE ENFORCED, EITHER AGAINST DOC DIRECTLY, OR THROUGH DOC AGAINST AGP.

FURTHER, REVIEWS BY OUR OFFICE OF AUTHORIZATIONS TO USE GOVERNMENT OWNED EQUIPMENT OR PROPERTY IN THE PERFORMANCE OF GOVERNMENT CONTRACTS ARE NECESSARILY LIMITED TO DETERMINING WHETHER SUCH AUTHORIZATION MAY HAVE RESULTED IN A COMPETITIVE ADVANTAGE TO THE USER AND WHETHER THE GOVERNMENT RECEIVES REASONABLE CONSIDERATION IN RETURN FOR SUCH USE. B 152723, DECEMBER 30, 1963. OUR REVIEW OF THE INSTANT PROCUREMENT INDICATES THAT THE GFE IN AGP'S PROPOSAL WAS PROPERLY EVALUATED IN ACCORDANCE WITH THE PROVISIONS OF ASPR 13-503, AND THAT, AS INDICATED ABOVE, THE FACTOR APPLIED TO THE AGP PROPOSAL WAS ALMOST THREE TIMES THAT OF THE OTHER OFFERORS TO ACCOUNT FOR THE PROPERTY IN ITS POSSESSION. WE THEREFORE CANNOT CONCLUDE THAT THE GOVERNMENT WILL NOT RECEIVE REASONABLE CONSIDERATION IN RETURN FOR THE USE OF THIS EQUIPMENT.

SECONDLY, IN OUR OPINION WHAT WAS DONE IN THIS CASE IS IN CONSONANCE WITH THE LANGUAGE SET FORTH IN ASPR 13-401 WHICH STATES AS FOLLOWS:

"IT IS THE POLICY OF THE DEPARTMENT OF DEFENSE TO PUT GOVERNMENT PRODUCTION AND RESEARCH PROPERTY WHICH IS IN THE POSSESSION OF A CONTRACTOR OR SUBCONTRACTOR TO THE GREATEST POSSIBLE USE IN THE PERFORMANCE OF GOVERNMENT CONTRACTS OR SUBCONTRACTS, SO LONG AS SUCH USE DOES NOT CONFER A COMPETITIVE ADVANTAGE ON THE CONTRACTOR OR SUBCONTRACTOR CONTRARY TO THE POLICIES SET FORTH IN PART 5."

SIMILARLY, WE HAVE NO DIFFICULTY WITH THE GRANTING OF PERMISSION TO USE THIS OFFEROR-HELD EQUIPMENT BY THE COGNIZANT CONTRACTING OFFICER DURING NEGOTIATIONS RATHER THAN REQUIRING THAT THE PERMISSION BE FURNISHED WITH THE INITIAL PROPOSAL, AS CONTEMPLATED BY THE RFP, SINCE IN THIS INSTANCE THE CONTRACTING OFFICER WITH COGNIZANCE OVER THE EQUIPMENT AND THE PROCURING CONTRACTING OFFICER WERE ONE AND THE SAME. FURTHERMORE, THE RIGID RULE OF BID RESPONSIVENESS APPLICABLE TO FORMALLY ADVERTISED PROCUREMENTS IS NOT CONTROLLING IN NEGOTIATED PROCUREMENTS. IN THIS REGARD, SEE 47 COMP. GEN. 459, 461 (1968), WHEREIN WE STATED:

"*** IN A NEGOTIATED PROCUREMENT, SUCH AS IS INVOLVED HERE, THE RULES OF COMPETITIVE BIDDING ARE NOT GENERALLY APPLICABLE, ALTHOUGH THEY MAY SERVE AS GENERAL GUIDELINES IN CASES WHERE THEIR APPLICATION SERVES THE BEST INTEREST OF THE GOVERNMENT. IN THIS REGARD, SEE 47 COMP. GEN. 279, NOVEMBER 21, 1967, IN WHICH THE FOLLOWING STATEMENT APPEARS:

"'NEGOTIATION PROCEDURES, UNLIKE THOSE REQUIRED FOR FORMAL ADVERTISING, ARE DESIGNED TO BE FLEXIBLE AND INFORMAL. THESE PROCEDURES PROPERLY PERMIT THE CONTRACTING OFFICER TO DO THINGS IN THE AWARDING OF A NEGOTIATED CONTRACT THAT WOULD BE A RADICAL VIOLATION OF THE LAW IF THE PROCUREMENT WERE BEING ACCOMPLISHED BY FORMAL ADVERTISING.'"

WITH RESPECT TO THE PROPRIETY OF ACCEPTING AN OFFER PREDICATED ON THE USE OF OFFEROR-HELD EQUIPMENT WITHOUT ADVISING OTHER OFFERORS, SEE OUR DECISION AT 46 COMP. GEN. 578 (1966), WHERE WE HELD THAT THERE WAS NO PREJUDICE TO OTHER OFFERORS EVEN THOUGH THE SOLICITATION INVOLVED WAS NEVER AMENDED TO INDICATE THAT THE USE OF A GOVERNMENT-OWNED FACILITY WOULD BE PERMITTED AND EVEN THOUGH A PROPOSAL WAS ACCEPTED WHICH INCLUDED THE PROPOSED USE OF A RENT-FREE GOVERNMENT-OWNED FACILITY ALREADY IN THE POSSESSION OF THE OFFEROR UNDER ANOTHER GOVERNMENT CONTRACT. OUR DECISION WAS PREDICATED ON THE USE OF AN APPROPRIATE EVALUATION FACTOR AS A MEANS OF ELIMINATING ANY COMPETITIVE DISADVANTAGE. IN ADDITION, AS INDICATED ABOVE, IN THIS CASE OFFERORS WERE IN FACT ADVISED IN THE RFP THAT OFFERS OF OFFEROR-HELD GOVERNMENT OWNED PRODUCTION AND RESEARCH PROPERTY WOULD BE CONSIDERED. FINALLY, WE CONSIDER THE ADMINISTRATIVE STATEMENT THAT COMPENSATION WILL BE SECURED FROM AGP FOR ANY PRIOR UNAUTHORIZED USE OF THE SUBJECT EQUIPMENT TO BE AN ADEQUATE ANSWER TO YOUR COMPLAINT ON THAT QUESTION. CONCERNING YOUR OTHER ALLEGATIONS, WE MUST CONCLUDE THAT THE REASONS ADVANCED BY THE AMC REPORT, PREVIOUSLY FURNISHED YOU, ARE SUFFICIENT. IN THIS REGARD, THE REPORT MAINTAINS FIRST THAT THE COC ISSUED BY THE SBA ON AUGUST 21, 1972, WAS DETERMINATIVE OF THE ISSUE OF AGP'S RESPONSIBILITY SINCE ALL NEGATIVE FINDINGS IN THE AGP PREAWARD SURVEY RELATED TO AGP'S CAPACITY OR CREDIT, RESERVED BY 15 U.S.C. 637(B)(7), TO SBA'S EXCLUSIVE JURISDICTION. WE NOTE ALSO THAT ASPR 7- 105.4(C), CITED BY YOU IN SUPPORT OF YOUR CONTENTION THAT THE COC WAS NOT TIMELY ISSUED, DOES NOT PLACE ANY TIME LIMIT ON COC ISSUANCE, BUT RATHER REQUIRES THAT AWARD BE WITHHELD FOR 15 DAYS PENDING SBA ACTION ON A COC, AFTER WHICH TIME, REJECTION OF A SMALL BUSINESS OFFEROR FOR REASONS OF CAPACITY OR CREDIT WOULD NOT BE SUBJECT TO QUESTION.

NEXT THE REPORT DISMISSES YOUR CONTENTIONS REGARDING SPECIFICATION COMPLIANCE WITH RESPECT TO SHIFT LIMITATIONS AND MANUFACTURING METHODS BY POINTING OUT THAT AGP IS CONTRACTUALLY BOUND TO MEET SHIFT LIMITATIONS AND HAS BEEN DETERMINED TO POSSESS THE REQUISITE CAPACITY TO DO SO, AND THAT THE ONLY SPECIFICATION REQUIREMENT WITH RESPECT TO MANUFACTURING METHODS IS THAT PINIONS MANUFACTURED BY DIFFERENT METHODS MAY NOT BE INCLUDED IN THE SAME INSPECTION LOTS. THEREFORE, PINIONS MANUFACTURED BY AGP BY TWO DIFFERENT METHODS WILL BE ACCEPTABLE UNDER THE SPECIFICATIONS SO LONG AS THEY ARE FURNISHED IN DIFFERENT LOTS.

FINALLY, THE REPORT'S POSITION ON THE INTERIM AWARD FOR BOOSTERS IS SIMPLY THAT DUE TO UNAVOIDABLE DELAYS IN AWARDING A CONTRACT UNDER THE SOLICITATION, WHICH IS THE SUBJECT OF YOUR PROTEST, THE POSTURE OF THE M557 FUZE (OF WHICH THE BOOSTER HERE INVOLVED IS A PACING COMPONENT) WAS CRITICAL. YOU HAVE OFFERED NO EVIDENCE THAT THIS WAS NOT THE CASE. THEREFORE, ON THE BASIS OF THE RECORD, WE BELIEVE THIS EXPLANATION TO BE ENTIRELY ACCEPTABLE.

ACCORDINGLY, FOR THE REASONS SET FORTH ABOVE, YOUR PROTEST IS DENIED.