B-167661 (1), B-167661 (2), MAR. 10, 1970

B-167661 (1), B-167661 (2), MAR. 10, 1970

CONTRACTS--NEGOTIATION--SOLE-SOURCE BASIS--AUTHORITY--CONCLUSIVENESS SOLE-SOURCE AWARD OF TWO RESEARCH AND DEVELOPMENT (R & D) CONTRACTS UNDER PURCHASE REQUESTS OF CONTRACTS ORIGINALLY AWARDED TO SAME CONTRACTOR UNDER COMPETITIVE PROPOSALS WAS NOT IMPROPER SINCE AWARD WAS PURSUANT TO FINDINGS AUTHORIZED IN 10 U.S.C. 2304 (A) (11) R & D EXCEPTION TO FORMAL ADVERTISING, WHICH ARE MADE FINAL IN SEC. 2310 (B). WHILE R & D EXCEPTION IN ITSELF DOES NOT AUTHORIZE SOLE SOURCING, ITS PROPER USE NECESSARILY INVOLVES CONSIDERABLE DISCRETION IN CONTRACTING OFFICER, AND ABSENT EVIDENCE OF DISCRETION'S ABUSE, DETERMINATION TO SOLE-SOURCE IS NOT CONSIDERED IMPROPER. MOREOVER, IN CIRCUMSTANCES WHERE FACTORS OTHER THAN PRICE ARE SUBSTANTIALLY SIGNIFICANT, AND LEGITIMATE GOVERNMENT NEEDS CAN BEST BE SATISFIED FROM SINGLE SOURCE, LAW DOES NOT REQUIRE COMPROMISE OF GOVT.'S NEEDS TO OBTAIN COMPETITION. SEE COMP. GEN. DECS. CITED.

TO DIGITAL PROGRAMMING SERVICES, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 5, 1969, AND SUBSEQUENT CORRESPONDENCE PROTESTING SOLE SOURCE AWARDS OF TWO CONTRACTS TO ANALYSIS AND COMPUTER SYSTEMS, INC. (ACSI) BY THE AIR FORCE CAMBRIDGE RESEARCH LABORATORIES (AFCRL), ONE FOR RESEARCH AND DEVELOPMENT OF MATHEMATICAL MODELS AND PHYSICAL MODELS TO INVESTIGATE SCIENTIFIC RESEARCH IN SPACE EXPLORATION UNDER PURCHASE REQUEST NO. PR CRL-02085, AND THE OTHER FOR DEVELOPMENT OF COMPLEX ROUTINES FOR THE ANALYSIS, RECEIPT IDENTIFICATION, FORMATTING AND MERGING OF SATELLITE PROBE OUTPUTS UNDER PURCHASE REQUEST NO. PR CRL-02088. BOTH PURCHASE REQUESTS COVERED FOLLOW- ON PROCUREMENTS TO CONTRACTS UNDER WHICH WORK ON THE PROJECTS INVOLVED HAD BEEN PREVIOUSLY PERFORMED BY ACSI UNDER CONTRACTS ORIGINALLY AWARDED TO ACSI ON COMPETITIVE PROPOSALS.

WHILE MANY CONTENTIONS ARE RAISED IN YOUR LETTERS TO THE AIR FORCE AND OUR OFFICE, THE ESSENTIAL BASIS OF YOUR PROTEST IS THAT THE GOVERNMENT'S FAILURE TO PERMIT COMPETITION IN THESE PROCUREMENTS WAS UNJUSTIFIED AND CONTRARY TO APPLICABLE REGULATIONS.

THE PROCURING ACTIVITY ADVISES THAT THE AUTHORITY OF 10 U.S.C. 2304 (A) (11) WAS THE BASIS USED FOR NEGOTIATING BOTH OF THE CONTRACTS RESULTING FROM THE REFERENCED PURCHASE REQUESTS. THE ADMINISTRATIVE REPORT FURNISHED OUR OFFICE EXPANDED FURTHER UPON THE NECESSITY FOR SOLE-SOURCE PROCUREMENTS FROM ACSI, AS FOLLOWS:

"* * * THESE TASKS CANNOT BE COMPLETED BY ANY OTHER WORK FORCE CONTRACTOR OR IN-HOUSE. THE PRESENT STAGE OF DEVELOPMENT OF THESE TASKS REPRESENTS THE DETAILED INVOLVEMENT OF ACSI PERSONNEL THROUGH THE INITIAL EVALUATION OF TECHNICAL FACTORS BEARING UPON EACH OF THE TASKS; THE DEVELOPMENT OF CONCEPTUAL APPROACHES AND THE EVALUATION OF EACH APPROACH TO SELECT THE MOST APPROPRIATE ONE; THE FORMULATION OF SPECIFIC TECHNIQUES TO APPLY THE CHOSEN APPROACH TO THE CRL WORK SITUATION AND THE DEVELOPMENT OF A SPECIFIC COMPUTER-BASED SYSTEMIZED APPROACH TO THE SOLUTION OF THE PROBLEM. EACH OF THE TASKS IDENTIFIED IN THE PR AS ITEMS OF WORK IS A MAJOR ANALYTICAL EFFORT COMBINING COMPLEX MATHEMATICS AND ORGANIZATION OF COMPUTER SYSTEMS CAPABILITIES AS SPECIFICALLY MODIFIED TO FIT THE CRL SITUATION. AS SUCH, IT IS OUR POSITION THAT ONLY ACSI CAN PERFORM THE SPECIFIC ITEMS OF WORK CALLED FOR UNDER THIS PR NOTWITHSTANDING THE GENERAL COMPETENCE OF DPSI OR ANY OTHER FIRM IN THE AREAS OF ANALYSIS OF RESEARCH DATA AND ASSOCIATED SCIENTIFIC PROGRAMMING."

IN RESPONSE TO YOUR LETTER OF OCTOBER 10, 1969, WHICH CONTAINED YOUR REBUTTAL REMARKS TO THE ADMINISTRATIVE REPORT, AFCRL STATED IN PART:

"THE PROTESTOR ALLEGES THAT 'THE NATURE OF THE WORK BEING PERFORMED IS NOT SUCH THAT ONLY THE COMPANY DOING THE ORIGINAL WORK CAN THEREAFTER CONTINUE THE EFFORT.' THESE LABORATORIES DISAGREE EMPHATICALLY WITH THIS GENERALIZED AND IMPRECISE CONTENTION ON THE BASIS THAT THE PROTESTOR IS IN NO POSITION TO SUSTAIN SUCH AN ARGUMENT SINCE DPSI IS NEITHER DOING THE SPECIFIC WORK CALLED FOR UNDER THE CONTRACT NOR ARE THEY MONITORING THE CONTRACTOR'S EFFORT. IT IS THE POSITION OF AFCRL AS REPRESENTED BY THE ORIGINAL SOLE SOURCE JUSTIFICATION AND RELATED MATERIAL SUPPLIED TO THE CONTRACTING OFFICER * * * THAT ONLY ANALYSIS AND COMPUTER SYSTEMS, INC. POSSESSES THE SPECIFIC TECHNICAL KNOWLEDGE AND NECESSARY INSIGHT INTO THE SCIENTIFIC DATA EXCLUSIVELY RELATED TO THAT FIRM'S PREVIOUS EFFORTS ON THOSE EXACT AFCRL TECHNICAL INVESTIGATIONS PERFORMED UNDER CONTRACT AF19(628) 6144.

"DPSI, IN THEIR 10 OCTOBER LETTER, EXPRESSES ON PAGE 3, THE FISCAL CONCEPT THAT ONE MAY JUDGE THE VALIDITY OF A SOLE SOURCE ACTION WHICH IS DESIGNED TO 'FINISH UP, NON-COMPLETED PROBLEMS' IF THE AMOUNT OF FUNDS IN THE INITIAL CONTRACT IS SUBSTANTIALLY GREATER THAN IN ANY SUBSEQUENT SOLE SOURCE FOLLOW-ON CONTRACTS. THIS ASSUMPTION IS INVALID, AS IS THE RELATED ASSUMPTION REGARDING STAFFING PATTERNS, BASED UPON THE EXPERIENCE OF THESE LABORATORIES IN THE APPLICATION OF DATA ANALYSIS TECHNIQUES TO MAJOR AREAS OF INVESTIGATION OVER THE LIFE SPAN OF A PARTICULAR TECHNICAL EFFORT. MANY ANALYTICAL SITUATIONS WHEREIN THE DESIRED SOLUTION BEING SOUGHT UNDER CONTRACT IS INFLUENCED BY A COMBINATION OF UNKNOWN VARIABLES SUCH AS ARE TYPICAL OF A RESEARCH SITUATION, IT IS EXTREMELY DIFFICULT TO PREDICT THE SCOPE AND DURATION OF CONTRACTUAL OR IN-HOUSE EFFORTS. IT IS NOT AT ALL UNCOMMON TO ADD SUBSTANTIALLY GREATER FUNDS TO EFFORTS BASED UPON THE TECHNICAL RESULTS ACHIEVED IN THE FIRST PERIOD OF PERFORMANCE. THE DPSI ASSUMPTION IS ERRONEOUS REGARDING AFCRL OPERATIONS BECAUSE THE CONTRACTOR DOES NOT UNDERSTAND THE NATURE OF THOSE OPERATIONS.

"DPSI ALLEGES THAT CONTRACTUAL EFFORTS IN SUPPORT OF THE AFCRL RESEARCH MISSION ARE ESSENTIALLY SELF-PERPETUATING TO THE EXTENT THAT DPSI MAY NOT COMPETE FOR THESE EFFORTS. THIS ALLEGATION IS NOT TRUE. THE NATURE OF ANALYTICAL WORK IN THE RESEARCH ENVIRONMENT IS SUCH THAT IT IS NOT SUSCEPTIBLE OF SHORT TERM COMPLETION AND, THEREFORE, PHASED PROCUREMENTS ARE ESSENTIAL TO AVOID LOSS OF TIME AND MONEY; HOWEVER, COMPETITIVE PROCUREMENTS ARE INITIATED WHENEVER POSSIBLE. THE FY70 PROCUREMENT PLANS OF CRMCA CALL FOR FOUR COMPETITIVE PROCUREMENTS AND DPSI WILL BE INCLUDED ON THE LIST OF RECOMMENDED SOURCES PREPARED BY CRMCA."

ALTHOUGH THE STATUTES AND THE REGULATIONS EMPHASIZE THAT PROCUREMENTS ACCOMPLISHED BY NEGOTIATION ARE REQUIRED TO BE ON A COMPETITIVE BASIS, THE PRIMARY OBJECTIVE OF SPECIFICATIONS IS TO REFLECT THE ACTUAL NEEDS OF THE GOVERNMENT. IN CIRCUMSTANCES WHERE FACTORS OTHER THAN PRICE ARE OF SUBSTANTIAL SIGNIFICANCE, THE REQUIREMENT FOR COMPETITION MAY PROPERLY BE RELAXED TO PERMIT SOLE SOURCE PROCUREMENT, AND WHERE AS HERE THE LEGITIMATE NEEDS OF THE GOVERNMENT CAN BE SATISFIED FROM ONLY A SINGLE SOURCE, WE DO NOT THINK THE LAW REQUIRES THAT THOSE NEEDS BE COMPROMISED TO OBTAIN COMPETITION. B-161700, SEPTEMBER 5, 1967.

THE CONTRACTS HERE INVOLVED WERE NEGOTIATED PURSUANT TO A CLASS DETERMINATION AND FINDINGS ISSUED BY THE ASSISTANT SECRETARY OF THE AIR FORCE FOR RESEARCH AND DEVELOPMENT DATED MAY 13, 1969, UNDER AUTHORITY OF 10 U.S.C. 2304 (B) (11). UNDER 10 U.S.C. 2310 (B) SUCH DETERMINATION AND FINDINGS ARE FINAL. WHILE THE RESEARCH AND DEVELOPMENT EXCEPTION IN 10 U.S.C. 2304 (A) (11) DOES NOT, IN AND OF ITSELF, AUTHORIZE SOLE-SOURCE PROCUREMENTS, THE PROPER USE OF THAT EXCEPTION NECESSARILY INVOLVES THE EXERCISE OF A CONSIDERABLE AMOUNT OF DISCRETION BY THE CONTRACTING OFFICER, AND UNLESS IT IS CLEAR FROM THE WRITTEN RECORD THAT HE HAS ABUSED THE DISCRETION VESTED IN HIM, WE WILL NOT OBJECT TO HIS DECISION. COMP. GEN. 590 (1965); B-166325, MAY 28, 1969, AND B-166579, JULY 18, 1969.

THE REPORTED FACTS EVIDENCE THAT CONTINUITY OF THE SERVICES IN QUESTION WAS REQUIRED IN THE GOVERNMENT'S INTEREST, AND THAT A CONSIDERABLE PERIOD OF TIME WOULD HAVE BEEN REQUIRED TO QUALIFY CONTRACTOR WHO HAD NOT PREVIOUSLY PARTICIPATED IN THE PRECEDING STAGES OF THE PROJECTS INVOLVED. IN THE LIGHT OF SUCH FACTORS, WE CANNOT CONCLUDE ON THE BASIS OF THE RECORD BEFORE US THAT AFCRL'S DECISION TO RESTRICT THE NEGOTIATIONS TO ACS RATHER THAN TO SOLICIT COMPETITION, AND ITS DECISION TO PROCEED WITH AWARDS PRIOR TO OUR DECISION, WERE NOT PROPER UNDER THE APPLICABLE REGULATIONS. IN THE CIRCUMSTANCES, WE FIND NO LEGAL BASIS TO QUESTION THE EXTENSION OF THE ACS CONTRACTS FOR THE PERIODS INVOLVED, AND YOUR PROTEST IS ACCORDINGLY DENIED.