B-175208, MAY 22, 1972

B-175208, MAY 22, 1972

PROCUREMENT LAW - PROPOSED ISSUANCE OF RFP - LEGALITY - ANTI-DEFICIENCY STATUTES CONCERNING A PROTEST OF AVCO CORPORATION AGAINST THE PROPOSED ISSUANCE OF AN RFP BY THE AIR FORCE FOR THE OPERATION AND MAINTENANCE OF GLASGOW AFB, MONT. THE ANTI-DEFICIENCY STATUTES (41 U.S.C. 11; 31 ID. 665(A); ID. 712(A)) GENERALLY PRECLUDE OFFICIALS FROM BINDING THE GOVERNMENT TO CONTRACTUAL OBLIGATIONS FOR EXPENDITURES BEYOND THE PERIOD OF AVAILABILITY. 42 COMP. GEN. 272 (1962). ACCORDINGLY, THERE IS NO LEGAL BASIS FOR OBJECTION TO THE PROPOSED ISSUANCE OF THE SUBJECT RFP.

TO AVCO CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 10, 1972, PROTESTING THE PROPOSED ISSUANCE BY THE DEPARTMENT OF THE AIR FORCE OF A REQUEST FOR PROPOSALS (RFP) FOR THE OPERATION AND MAINTENANCE OF GLASGOW AIR FORCE BASE, MONTANA.

YOU STATE THAT YOU LEASED GLASGOW AFB FROM THE AIR FORCE FOR A FIVE YEAR PERIOD BEGINNING JUNE 1, 1969, AND THAT YOU WERE ALSO AWARDED A CONTRACT FOR THE OPERATION AND MAINTENANCE OF THE BASE, WHICH CONTRACT WAS TO BE RENEWED ANNUALLY "TO CORRESPOND WITH THE TERMS OF THE LEASE." YOU FURTHER STATE THAT THE GOVERNMENT HAS ATTEMPTED TO TERMINATE THE LEASE BUT THAT YOU ARE CONTESTING SUCH ACTION AS ILLEGAL AND AS A BREACH OF CONTRACT. YOU REQUEST THAT THE AIR FORCE BE PREVENTED FROM ISSUING THE RFP UNTIL THE VALIDITY OF THE LEASE TERMINATION IS SETTLED, BECAUSE THE AWARD OF A CONTRACT TO A COMPANY OTHER THAN AVCO WOULD BE IN "DIRECT VIOLATION OF THE LEASE AGREEMENT BY ALLOWING THIRD PARTIES TO ENTER INTO THE LEASED PREMISES *** THUS VIOLATING THE RIGHT OF QUIET ENJOYMENT INHERENT IN THE LESSEE" AND COULD RESULT IN A THIRD PARTY OCCUPYING THE PREMISES WITHOUT PAYING RENT UNDER THE LEASE.

THE RECORD BEFORE US REVEALS THAT ON JANUARY 6, 1969, THE DEPARTMENT OF THE ARMY ENTERED INTO A PRODUCTION CONTRACT WITH AVCO CALLING FOR AVCO TO OPERATE A GOVERNMENT-OWNED AMMUNITION REHABILITATION PLANT AT GLASGOW AFB. A MODIFICATION TO THE CONTRACT, ALSO SIGNED JANUARY 6, 1969, RECITED AN AGREEMENT BY AVCO AND THE GOVERNMENT TO ENTER INTO A BASE OPERATIONS AND MAINTENANCE CONTRACT FOR GLASGOW AFB AND ALSO A COMMERCIAL LEASE OF THE AIR BASE, AND SET FORTH THE BASIC TERMS TO BE INCLUDED IN THE CONTRACT AND THE LEASE. THE OPERATION AND MAINTENANCE CONTRACT, EFFECTIVE JUNE 2, 1969, PROVIDED FOR ANNUAL RENEWALS AT THE OPTION OF THE GOVERNMENT WITH THE TOTAL DURATION OF THE CONTRACT PERIOD NOT TO EXTEND PAST MAY 31, 1974. THE LEASE WAS FOR A TERM OF 5 YEARS BEGINNING JUNE 1, 1969, WITH AN OPTION IN THE LESSEE TO RENEW FOR AN ADDITIONAL TWO YEARS. BOTH OF THESE CONTRACTS WERE ENTERED INTO BY YOUR FIRM WITH THE DEPARTMENT OF THE AIR FORCE.

THE RECORD SHOWS THAT THE AIR FORCE TERMINATED THE LEASE PURSUANT TO PARAGRAPH 21A OF THE LEASE AGREEMENT WHICH PROVIDES THAT THE GOVERNMENT MAY TERMINATE "(1) AT ANY TIME DURING A NATIONAL EMERGENCY *** ." THE LESSEE'S RIGHTS FOR LOSSES INCURRED AS A RESULT OF SUCH TERMINATION ARE RECOGNIZED IN PARAGRAPH 21A(3) OF THE AGREEMENT. AS INDICATED BY THE RECORD THE AIR FORCE HAS INVITED YOUR FIRM TO FILE A CLAIM FOR SUCH LOSSES WITH THE CONTRACTING OFFICER, BUT YOU CONTEND THAT THE TERMINATION IS CONTRARY TO BOTH LAW AND THE INTENT OF THE PARTIES, AND YOU STATE THAT YOUR FIRM WILL CONTEST THIS "BREACH OF CONTRACT" BY AIR FORCE.

YOU ARE NOT ASKING OUR OFFICE TO DECIDE THE LEGAL MERITS OF YOUR LEASE CONTROVERSY, NOR HAVE YOU FURNISHED US WITH A LEGAL MEMORANDUM ON THIS QUESTION. INDEED, WE NOTE THAT THE LEASE AGREEMENT INCLUDES A DISPUTES PROVISION. RATHER, YOU ARE ASKING OUR INTERVENTION TO PREVENT THE AIR FORCE FROM COMPETING THE ANNUAL OPERATION AND MAINTENANCE CONTRACT AT GLASGOW AIR FORCE BASE PENDING SETTLEMENT OF THE LEASE CONTROVERSY. IT IS YOUR POSITION THAT THIS ANNUAL OPERATION AND MAINTENANCE CONTRACT IS COMMITTED TO YOUR FIRM FOR THE PERIOD OF THE LEASE.

THE AIR FORCE ARGUES THAT AN EXPERIENCED GOVERNMENT CONTRACTING FIRM SUCH AS YOURS MUST BE AWARE THAT THE AIR FORCE LACKS AUTHORITY TO ENTER INTO A FIVE-YEAR OPERATION AND MAINTENANCE CONTRACT, OR TO PROVIDE BINDING ASSURANCES THAT AN ANNUAL CONTRACT OF THIS NATURE WILL BE RENEWED FOR ANY FUTURE YEAR. IT POINTS TO PARAGRAPH 21B(2) OF THE LEASE AGREEMENT WHICH GIVES YOUR FIRM THE UNILATERAL RIGHT TO TERMINATE THE LEASE WITHOUT NOTICE IN THE EVENT YOU DID NOT RECEIVE THE ANNUAL OPERATION AND MAINTENANCE CONTRACT. AIR FORCE BELIEVES IT IS EVIDENT FROM THIS PROVISION THAT AT NO TIME DID THE PARTIES CONTEMPLATE THAT YOU WERE TO BE GUARANTEED THE OPERATION AND MAINTENANCE CONTRACT FOR ANY FUTURE YEAR.

AS PREVIOUSLY INDICATED, WE DO NOT INTEND TO RULE ON THE MERITS OF YOUR LEASE CLAIM. IN REGARD TO THE MATTER BEFORE US, HOWEVER, WE AGREE WITH THE AIR FORCE POSITION THAT THE ANNUAL OPERATION AND MAINTENANCE CONTRACT CANNOT LEGALLY BE COMMITTED TO YOUR FIRM FOR ANY FUTURE YEAR. THE ANTI- DEFICIENCY STATUTES (41 U.S.C. 11; 31 ID. 665(A); ID. 712(A) GENERALLY PRECLUDE OFFICIALS FROM BINDING THE GOVERNMENT TO CONTRACTUAL OBLIGATIONS FOR EXPENDITURES OR LIABILITIES BEYOND THE PERIOD OF AVAILABILITY OR THE AMOUNT OF THE APPLICABLE APPROPRIATIONS. SEE 42 COMP. GEN. 272 (1962). THEREFORE, AND REGARDLESS OF THE MERITS OF YOUR CLAIM ON THE LEASE TERMINATION, WE FIND NO LEGAL OBJECTION TO THE ISSUANCE BY THE AIR FORCE OF AN RFP FOR THE ANNUAL OPERATION AND MAINTENANCE OF THE GLASGOW AIR FORCE BASE AT THIS TIME.

A COPY OF THIS LETTER IS BEING SENT TO YOUR WASHINGTON COUNSEL, REAVIS, POGUE, NEAL & ROSE, AS REQUESTED.