B-167389 (1), FEB. 12, 1970

B-167389 (1), FEB. 12, 1970

BID PROTEST--NEGOTIATED AWARD PROCEDURES--PROPRIETY DECISION DENYING PROTEST ON BEHALF OF MODULUX, INC. AGAINST AWARD OF NEGOTIATED CONTRACT TO ELDER-OILFIELD, INC; BY AIR FORCE SECURITY SERVICE, SAN ANTONIO, TEXAS FOR FURNISHING TWO FAMILY HOUSING UNITS. IN ABSENCE OF A STATUTORY OR REGULATORY REQUIREMENT THAT ALL MEMBERS OF A SOURCE SELECTION BOARD MUST ATTEND ALL BID EVALUATION SESSIONS, A BIDDER MAY NOT HAVE AN EVALUATION MADE BY A BOARD WHO HAD ONE MEMBER ABSENT DECLARED INVALID ON ACCOUNT OF THE ABSENCE. RECORD DOES NOT SHOW THAT PROTESTANT WAS PREJUDICED BY ABSENCE OF MEMBER OF SELECTION BOARD. WITH RESPECT TO CONTENTION THAT THERE WAS NOT ENOUGH TIME TO REVISE PROPOSAL, THERE IS NO REQUIREMENT FOR A SPECIFIED MINIMUM TIME. NEGOTIATED PROCUREMENTS ARE CHARACTERIZED BY FLEXIBLE AND INFORMAL PROCEDURES. TIME AFFORDED OFFEROR DOES NOT APPEAR UNREASONABLE. ALTHOUGH THERE IS DOUBT THAT THE PRIORITY DESIGNATOR UNDER THE UNIFORM MATERIEL MOVEMENT AND ISSUE PRIORITY SYSTEM (UMMIPS) FOR NEGOTIATION OF A TURNKEY CONTRACT FOR CONSTRUCTION IS PROPER SINCE SUCH PROCEDURES WERE OBSERVED AND CONTRACTOR HAS PERFORMED OBJECTION AT THIS TIME WOULD NOT BE PROPER.

TO COVINGTON & BURLING:

REFERENCE IS MADE TO YOUR LETTERS OF AUGUST 28, 1969, OCTOBER 1 AND 20, 1969, AND NOVEMBER 10, 1969, SUBMITTED IN SUPPORT OF THE PROTEST OF MODULUX, INC; AGAINST THE AWARD OF A CONTRACT TO ELDER-OILFIELD, INC; UNDER REQUEST FOR PROPOSALS (RFP) NO. F41621-69-R-0348, ISSUED BY THE UNITED STATES AIR FORCE SECURITY SERVICE, SAN ANTONIO, TEXAS. THE PROTEST WAS INITIATED BY A TELEGRAM DATED JUNE 27, 1969, FROM MODULUX; WE SUBSEQUENTLY RECEIVED FURTHER TELEGRAMS AND THREE LETTERS FROM THAT COMPANY RELATIVE TO THE PROTEST.

THIS REQUEST FOR PROPOSALS WAS ISSUED TO 31 FIRMS ON FEBRUARY 27,1969, COVERING A QUANTITY OF 200 MODULAR PREFABRICATED TWO-STORY FAMILY HOUSING UNITS, IN ACCORD WITH REFERENCED DRAWING AND SPECIFICATIONS. INCLUDED WAS A REQUIREMENT THAT THE CONTRACTOR FURNISH ALL NECESSARY SUPPLIES AND SERVICES "TO FABRICATE, PACKAGE, SHIP, AND ERECT HOUSING UNITS F.O.B. KARAMURSEL AIR STATION, TURKEY, ON A 'TURN-KEY' BASIS." A 50-PERCENT OPTION CLAUSE WAS ALSO INCLUDED. AMENDMENT NO. 2 TO THE RFP, DATED MARCH 25, 1969, ADDED AN ITEM FOR 180 MORE UNITS ON AN F.O.B. ORIGIN BASIS AND DELETED THE 50-PERCENT OPTION. ONLY TWO OFFERS WERE RECEIVED IN RESPONSE TO THE RFP--ONE FROM MODULUX, THE OTHER FROM ELDER-OILFIELD, INC. (E-O).

SEVERAL QUESTIONS HAVE BEEN RAISED BY THIS PROTEST. IN ORDER TO PROVIDE A CLEARER FRAME OF REFERENCE FOR CONSIDERATION OF THE INDIVIDUAL ISSUES, ADDITIONAL FACTS WILL BE DETAILED UNDER THE RELEVANT HEADING.

EVALUATION OF PROPOSALS

PARAGRAPH H-6 OF THE RFP WAS MODIFIED BY AMENDMENT NO. 2 TO READ, IN PERTINENT PART, AS FOLLOWS:

"H-6 EVALUATION OF PROPOSALS:EACH PROPOSAL WILL BE EVALUATED ON THE BASIS OF INFORMATION SUBMITTED WITH THE PROPOSAL. FACTORS TO BE CONSIDERED AND MAXIMUM WEIGHT FACTORS ARE AS FOLLOWS:

(A) SITE CONSIDERATION 5%

(B) TYPE OF CONSTRUCTION 25%

(C) EASE OF ERECTION/DISASSEMBLY 10%

(D) FUNCTIONAL ARRANGEMENTS 25%

(E)MAINTENANCE CONSIDERATION 10%

(F) TOTAL PRICE 25%

"IT IS ANTICIPATED THAT THE AWARD SHALL BE MADE TO THAT OFFEROR RECEIVING THE HIGHEST EVALUATION PERCENTAGE, USING THE ABOVE MENTIONED EVALUATION STANDARDS."

A SOURCE SELECTION BOARD WAS ESTABLISHED BY HEADQUARTERS UNITED STATES AIR FORCE SECURITY SERVICE (HQ USAFSS) SPECIAL ORDER M-9, DATED APRIL 17, 1969. THAT DOCUMENT PROVIDED:

"THE FOLLOWING NAMED PERSONNEL ARE APPOINTED TO DUTIES AS INDICATED FOR THE PURPOSES OF CARRYING OUT THE RESPONSIBILITIES FOR MANAGEMENT OF THE FY66 KARAMURSEL AND FY65 IRAKLION FAMILY HOUSING CONSTRUCTION PROJECTS AS SPECIFIED IN LETTERS, HQ USAF, 'FAMILY HOUSING PROJECTS FY66 KARAMURSEL AND FY65 IRAKLION AIR STATIONS' DATED 7 OCTOBER 1968, 15 JANUARY 1969, AND 24 FEBRUARY 1969. PERSONNEL FROM OTHER ORGANIZATIONS ARE APPOINTED WITH CONCURRENCE OF THEIR RESPECTIVE ORGANIZATIONS. THE SOURCE SELECTION BOARD WILL EVALUATE PROPOSALS IN ACCORDANCE WITH REFERENCES ABOVE, AND RECOMMEND SOURCES IN ORDER OF PRIORITY TO THE CONTRACTING OFFICER FOR NEGOTIATIONS IN ACCORDANCE WITH ASPR 3-801.2.

"PROGRAM MANAGER

COL KENNETH J PAYNE, FR9533 (HQ USAFSS/IDC)

GS-15 JOHN H WILSON (DEPUTY) (HQ USAFSS/IDC-T)

"SOURCE SELECTION BOARD

GS-15 JOHN H WILSON, CHAIRMAN (HQ USAFSS/IDC-T)

MAJ ROBERT L CAREY, FR30466 (HQ USAF/AFOCE-N)

GS-11 WORTH A SHELTON (HQ USAFSS/LDP)

GS-12 MARY H BILLS, (WRAMA/PWVA)

CAPT STANLEY A BOHINC, FR3084569 (HQ USAFSS/IDC-T-(H) )

"ADVISORY COMMITTEE

"TECHNICAL

GS-13 CALVIN C POER, ELECTRICAL ENGINEER (HQ USAFSS/IDC-TH) )

GS-13 JOE H ENGLISH, MECHANICAL ENGINEER (HQ USAFSS/IED-C)

GS-13 MANUEL J PERCHES, MECH/ELEC ENGINEER (HQ USAFSS/IED)

GS-13 RICHARD V ROCHE, ARCHITECT-ENGINEER (HQ USAFSS/IRD)

GS-13 CELESTINO R VILLARREAL, STRUCTURAL ENGR (HQ USAFSS/IED-E)

MAJ WINTERS G H ALDERMAN, FR3008930, TRANSPORTATION (HQ USAFSS/LST)

"PROCUREMENT

GS-14 CECIL H MYNIER, (HQ USAFSS/LDP)

"LEGAL

GS-12 WILLIAM J. CONDON, CHIEF INTERNATIONAL LAW (HQ USAFSS/JAC)

"ACCOUNTING AND FINANCE

GS-13 WILLIAM D PITMAN, SYSTEMS ACCOUNTANT (HQ USAFSS/FAD)"

IT IS REPORTED THAT ONLY MR. WILSON, MAJOR CAREY, AND CAPTAIN BOHINC WERE QUALIFIED TO EVALUATE THE TECHNICAL MERITS OF EACH PROPOSAL. MR. WILSON IS REPORTEDLY A PROFESSIONAL ENGINEER REGISTERED IN ARIZONA, COLORADO, NEVADA, AND UTAH. MAJOR CAREY IS IDENTIFIED AS A GRADUATE ARCHITECT AND WAS AT THE TIME HERE INVOLVED THE DEPUTY CHIEF OF THE TECHNICAL BRANCH, FAMILY HOUSING DIVISION, UNITED STATES AIR FORCE; AND CAPTAIN BOHINC IS A REGISTERED ARCHITECT IN COLORADO.

ON APRIL 22, 1969, AN "INSTRUCTION FOR SOURCE SELECTION BOARD" WAS FURNISHED TO EACH MEMBER OF THE BOARD. THE WRITTEN RECORD DOES NOT MAKE IT ENTIRELY CLEAR HOW THIS INSTRUCTION CAME INTO BEING; HOWEVER, IT APPEARS TO HAVE BEEN AN INTERNALLY GENERATED STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY THE BOARD.

THE ADMINISTRATIVE FILE REVEALS THAT THERE WERE FOUR OCCASIONS WHEN PROPOSALS WERE EVALUATED. THERE IS SET OUT BELOW THE POINT EVALUATION OF THE TWO PROPOSALS, REFERENCED TO PARAGRAPH H-6, SUPRA, FROM THE DATE OF INITIAL PROPOSAL EVALUATION THROUGH NEGOTIATIONS WHICH CULMINATED ON JUNE 20, 1969.

EVALUATIONS

APRIL 23-29 MAY 23 JUNE 17 JUNE 20 FACTORS E-O MODULUX E-O MODULUX E-O MODULUX E-O MODULUX

(A) 3.73 4.20 3.73 4.20 5.00 5.00 5.00 5.00

(B) 22.82 24.35 22.82 24.35 24.62 24.67 24.62 24.67

(C) 7.43 10.00 7.60 9.91 8.93 9.90 8.93 9.90

(D) 25.00 24.65 25.00 24.65 25.00 24.90 25.00 24.90

(E) 8.52 8.83 8.52 8.83 9.58 9.00 9.58 9.00

(F) 24.64 25.00 25.00 23.14 25.00 23.64 25.00 24.21

TOTAL 92.14 97.03 92.67 95.08 98.13 97.11 98.13 97.68

THE ADMINISTRATIVE REPORT DISCLOSES THAT MAJOR CAREY WAS PRESENT AT HQ USAFSS FOR THE APRIL EVALUATION ALONE AND THAT MR. WILSON AND CAPTAIN BOHINC ATTENDED ALL FOUR RATING SESSIONS. IT IS ARGUED THAT THE EVALUATIONS MADE IN THE ABSENCE OF MAJOR CAREY WERE IMPROPER. THE REASONING IS THAT THE BOARD WAS COMPOSED OF MEMBERS HAVING DIFFERENT AREAS OF EXPERTISE AND THAT, THEREFORE, THE INSTRUCTIONS TO THE BOARD PLAINLY ENVISAGED THAT A COMPETENT EVALUATION WOULD RESULT ONLY IF ALL THE BOARD MEMBERS PARTICIPATED. IT IS CONTENDED FURTHER THAT, WHILE IT IS IMPOSSIBLE TO KNOW WHAT WOULD HAVE RESULTED FROM AN EVALUATION BY THE FULL BOARD, THE SCORES WERE SO CLOSE THAT IT CANNOT BE SAID THAT MODULUX WAS NOT PREJUDICED BY THE ABSENCE OF MAJOR CAREY FROM THE LAST THREE EVALUATION SESSIONS.

HOWEVER, WE ARE UNAWARE OF ANY LEGAL OR REGULATORY REQUIREMENT THAT ALL MEMBERS OF A SOURCE SELECTION BOARD MUST ATTEND EACH EVALUATION SESSION. NOTHING IN THE ADMINISTRATIVE DOCUMENTS, NOR IN DOD DIRECTIVE 4105.62 (WHICH ESTABLISHES DEPARTMENT OF DEFENSE OBJECTIVES, PRINCIPLES, AND POLICY FOR THE EVALUATION OF PROPOSALS AND THE SELECTION OF CONTRACTUAL SOURCES) APPEARS TO SUPPORT THE PROPOSITION THAT A RECOMMENDATION OF LESS THAN THE COMPLETE BOARD IS INVALID. THE QUESTION THEREFORE IS REDUCED TO ONE OF PREJUDICE: WERE THE EVALUATIONS CONDUCTED BY THE BOARD SUBSEQUENT TO THE INITIAL ONE IN APRIL UNFAIR TO MODULUX?

THE MAY RESCORING INVOLVED TWO EVALUATION FACTORS, "EASE OF ERECTION/DISASSEMBLY" AND "TOTAL PRICE." WITH RESPECT TO THE FACTOR "EASE OF ERECTION/DISASSEMBLY," THE PARTICULAR ITEM FOR RESCORING, WEIGHT AND CUBE OF SHIPPING PACKAGES, WAS RECOMPUTED IN ACCORDANCE WITH THE FOLLOWING FORMULA: "LET 'A' DENOTE PROPOSAL OF LEAST MEASURED TONNAGE (MT) PER HOUSING UNIT; LET 'B' DENOTE PROPOSAL BEING EVALUATED. THEN

B'S SCORE A'S MT DIVIDED BY B'S MT X 1.0 PTS" CONCERNING THE FACTOR "TOTAL PRICE," THE SCORE WAS DETERMINED IN ACCORDANCE WITH THIS FORMULA: "LET 'A' DENOTE PROPOSAL WITH LOWEST PRICE; LET 'B' DENOTE PROPOSAL BEING EVALUATED. THEN

B'S SCORE A'S PRICE DIVIDED BY B'S PRICE X 25 PTS" HENCE, IT APPEARS THAT BOTH OF THESE ITEMS WERE SCORED ACCORDING TO SIMPLE PREDETERMINED MATHEMATICAL FORMULAE WHICH DID NOT INVOLVE THE EXERCISE OF TECHNICAL JUDGMENT. ACCORDINGLY, MAJOR CAREY'S ABSENCE ON THE OCCASION OF THE MAY RESCORING OF PROPOSALS CANNOT, IN ANY SENSE, BE VIEWED AS INJURIOUS TO THE INTERESTS OF MODULUX.

ON THE OTHER HAND, THE JUNE 17, 1969, EVALUATION APPEARS TO HAVE CONSTITUTED A FUNDAMENTAL REASSESSMENT OF THE RELATIVE MERITS OF THE TWO PROPOSALS. THE MEMORANDUM OF THIS RATING SESSION, SIGNED BY MR. WILSON, RECITES THAT E-O HAD BEEN AFFORDED AN OPPORTUNITY TO IMPROVE UPON ITS INITIAL PROPOSAL, AND THAT THE E-O REVISED PROPOSAL FULLY COMPLIED WITH THE REQUIREMENTS AND STANDARDS SPECIFIED IN THE RFP. IN ADDITION, THE REVISED MODULUX PROPOSAL WAS STATED TO BE "FULLY ACCEPTABLE AND IN COMPLIANCE WITH ALL OF THE PROVISIONS OF THE RFP." IMMEDIATELY AFTER THESE RECITATION, THE FOLLOWING APPEARS IN THE MEMORANDUM:

"THE SUPPLEMENTED/RECTIFIED PROPOSALS OF MODULUX, INC. * * * AND ELDER- OILFIELD, INC. * * * HAVE BEEN EVALUATED FROM A TECHNICAL AND PRICE POINT OF VIEW BY A MAJORITY OF THE SOURCE SELECTION BOARD * * *. EACH SUBMITTAL WAS CONSIDERED IN ITS ENTIRETY BY EACH OF THE BOARD MEMBERS PARTICIPATING AND POINTS ASSIGNED AGAINST A POSSIBLE TOTAL OF 100 POINTS IN THE AMOUNTS AND APPLIED AGAINST ITEMS AS LISTED IN THE RFP AND AMENDMENTS THERETO." COMPARISON OF THE MAY SCORES WITH THE JUNE 17 SCORES INDICATES THAT CHANGES OCCURRED AS TO MODULUX IN ALL SIX CATEGORIES SPECIFIED IN PARAGRAPH H-6 OF THE RFP. FOUR OF E-O'S SCORES WERE CHANGED. THE POINTS AWARDED FOR "FUNCTIONAL ARRANGEMENTS" AND "TOTAL PRICE" REMAINED AT 25.00 FOR EACH CATEGORY.

BECAUSE THE JUNE 17 EVALUATION WAS A COMPLETE REASSESSMENT OF THE TWO PROPOSALS, WE MUST VIEW IT AS ENTIRELY SUPERSEDING THE APRIL AND MAY EVALUATIONS. IN THIS CONTEXT, WE DO NOT CONSIDER THAT THERE IS ANY INHERENT PREJUDICE IN THE JUNE 17 REEVALUATION. THE BOARD MIGHT HAVE INCLUDED ONLY TWO TECHNICALLY QUALIFIED PERSONS ORIGINALLY; WE ATTACH NO MATERIAL SIGNIFICANCE TO THE ORIGINAL APPOINTMENT OF THREE SUCH PERSONS TO THE BOARD. BOTH MAJOR CAREY AND CAPTAIN BOHINC ARE ARCHITECTS, AND THEREFORE THE ABSENCE OF MAJOR CAREY ON JUNE 17 DID NOT DEPRIVE THE BOARD OF ARCHITECTURAL EXPERTISE. MAJOR CAREY DOES NOT APPEAR TO HAVE HAD ANY PARTICULAR TECHNICAL QUALIFICATIONS NOT POSSESSED BY EITHER MR. WILSON OR CAPTAIN BOHINC. FURTHERMORE, WE SHOULD NOTE THAT E-O'S PROPOSAL WAS SCORED BY EXACTLY THE SAME PERSONNEL AS SCORED MODULUX; THEREFORE, THE CIRCUMSTANCE OF MAJOR CAREY'S ABSENCE HAD EQUAL IMPACT ON THE TWO COMPANIES. WE THEREFORE ARE UNABLE TO CONCLUDE THAT MODULUX WAS PREJUDICED BY THE JUNE 17 EVALUATION.

THE FINAL RESCORING ON JUNE 20 WAS ACCOMPLISHED WITHOUT MAJOR CAREY. THE ONLY ITEM CHANGED, HOWEVER, WAS THE MODULUX RATING FOR "TOTAL PRICE," WHICH WAS INCREASED FROM 23.64 TO 24.21 POINTS. AS OBSERVED EARLIER IN CONNECTION WITH THE MAY REEVALUATION, SCORING FOR THIS ITEM WAS PERFORMED IN ACCORDANCE WITH A PREDETERMINED MATHEMATICAL FORMULA. THEREFORE, MODULUX SUFFERED NO PREJUDICE AS A RESULT OF MAJOR CAREY'S ABSENCE ON THE OCCASION OF THE JUNE 20 RESCORING.

NONRESPONSIBILITY

IN THE MODULUX LETTER OF AUGUST 19, 1969, THE ARGUMENT IS ADVANCED THAT:

"THE CONTRACTING OFFICER'S DETERMINATION, IF ANY, OF RESPONSIBILITY OF THE SUCCESSFUL PROPOSER WAS NOT MADE IN ACCORDANCE WITH THE STANDARDS AND PROCEDURES OF THE ASPR; ELDER SHOULD HAVE BEEN FOUND NOT RESPONSIBLE."

ALTHOUGH THE WRITTEN DETERMINATION REQUIRED BY ASPR 1-904.1 WAS NOT INCLUDED IN THE ORIGINAL ADMINISTRATIVE REPORT, IT WAS FORWARDED AS PART OF THE SUPPLEMENTAL REPORT DATED SEPTEMBER 23, 1969. THE DETERMINATION STATES AS FOLLOWS:

"1. BASED ON REVIEW OF DSA PRE-AWARD SURVEY NO. 07894010S DATED 29 APRIL 1969, WHICH RECOMMENDED COMPLETE AWARD, TELEPHONE CONVERSATION WITH MR. J. W. WARD, JR. PRE-AWARD SURVEY MONITOR, DCASR, HOUSTON, MRS. MARY H. BILLS, CONTRACT NEGOTIATOR, WRAMA, WHO HAS PREVIOUSLY NEGOTIATED CONTRACTS WITH THE COMPANY AND LT COL SIDNEY KEY, DCS/ENGINEERING, USAFSS, WHO ACCOMPANIED THE PRE-AWARD SURVEY TEAM, ELDER-OILFIELD, INC; HOUSTON, TEXAS, IS DETERMINED TO BE RESPONSIBLE WITHIN THE MEANING OF ASPR 1-902 AND 1-903.

"2. I HAVE SCREENED THE CURRENT AIR FORCE CONTRACTOR EXPERIENCE LIST AND ATTACHMENTS THERETO TO DETERMINE WHETHER OR NOT THE PROSPECTIVE CONTRACTOR IS LISTED THEREON."

THE AUGUST 19 LETTER FROM MODULUX SET FORTH TWO GROUNDS UPON WHICH THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) IS SAID TO HAVE BEEN VIOLATED:

1. THE CONTRACTING OFFICER FAILED TO FOLLOW THE PROCEDURES SPECIFIED IN ASPR 1-905 TO OBTAIN SUFFICIENT INFORMATION ABOUT E-O AND ITS SUBCONTRACTOR, MAGNOLIA HOMES, INC; ON WHICH TO BASE AN ADEQUATE DETERMINATION OF RESPONSIBILITY; 2. ALTERNATIVELY, THE CONTRACTING OFFICER WAS AWARE OF RECENT UNSATISFACTORY PERFORMANCE BY E-O AND MAGNOLIA AND THEREFORE HE SHOULD HAVE DETERMINED THEM TO BE NONRESPONSIBLE BECAUSE THE INFORMATION AVAILABLE DID NOT INDICATE "CLEARLY" THAT E-O AND MAGNOLIA WERE RESPONSIBLE AS IS REQUIRED BY ASPR 1-902.

SUBSEQUENT TO THE TIME THESE CONTENTIONS WERE MADE, A COPY OF THE DETERMINATION QUOTED ABOVE WAS MADE AVAILABLE TO YOU FOR COMMENTS, WHICH COMMENTS WERE SUPPLIED BY LETTER OF OCTOBER 1, 1969. WHILE WE DO NOT NECESSARILY READ YOUR REMARKS AS IMPLICITLY ABANDONING THE FIRST ALTERNATIVE STATED IN THE LETTER OF AUGUST 19, WE NOTE THAT NO SPECIFIC PROCEDURAL IRREGULARITY IS POINTED OUT. IT APPEARS THAT YOUR EMPHASIS IS NOW ENTIRELY UPON THE SECOND ALTERNATIVE, REGARDING THE SUBSTANTIVE QUESTION OF RESPONSIBILITY. IN ANY EVENT, OUR REVIEW HAS REVEALED NO DEVIATION FROM THE PROCEDURAL GUIDELINES ESTABLISHED BY ASPR 1-905, AND WE THEREFORE MUST DISMISS THE FIRST ALTERNATIVE CONTENTION WITHOUT FURTHER COMMENT.

THE SUBSTANTIVE ARGUMENT RELATIVE TO E-O'S RESPONSIBILITY IS PREDICATED ON THE FOLLOWING:

"* * * THE CONTRACTING OFFICER HAS BEEN AWARE ALL ALONG THAT THE GREATER PART OF THE EFFORT REQUIRED UNDER THE CONTRACT WITH ELDER WOULD BE AND HAS BEEN SUBCONTRACTED BY ELDER TO MAGNOLIA HOMES, INC; WHICH IS NOT AFFILIATED WITH ELDER. THE PROTOTYPE HOUSE REQUIRED BY THE CONTRACT WILL BE ERECTED AT MAGNOLIA'S VICKSBURG, MISSISSIPPI PLANT WHERE ALL THE OTHER HOUSES WILL ALSO BE ASSEMBLED AND PACKAGED. MODULUX HAS BEEN INFORMED THAT THIS SAME COMBINATION OF ELDER-OILFIELD AND MAGNOLIA HAS PERFORMED UNSATISFACTORILY FOR THE GOVERNMENT IN THE PAST. FOR EXAMPLE, MODULUX HAS BEEN INFORMED THAT IN 1967, THIS COMBINATION RECEIVED AN AWARD FROM THE AIR FORCE TO FABRICATE, SHIP AND ERECT RELOCATABLE DISPENSARIES FOR INSTALLATION IN THAILAND AND VIETNAM; THAT ACTUAL IN-COUNTRY DELIVERY OF THE DISPENSARIES WAS ABOUT A YEAR LATER THAN CALLED FOR BY THE CONTRACT; AND THAT PROBLEMS OF QUALITY RESULTED IN ALMOST ANOTHER YEAR'S DELAY IN SATISFACTORY INSTALLATION. ALL THIS OCCURRED DESPITE WHAT ONE WOULD SUPPOSE WERE SPECIAL EXPEDITING EFFORTS BY BOTH THE AIR FORCE AND THE CONTRACTOR DUE TO THE FACT THAT MEDICAL FACILITIES FOR A WAR ZONE WERE INVOLVED." YOU CONTEND THAT, ASSUMING THE ACCURACY OF THE INFORMATION, "THERE WAS NOT THE CLEAR INDICATION OF RESPONSIBILITY REQUIRED BY THE ASPR AS A PREREQUISITE TO A FINDING OF RESPONSIBILITY."

IN 46 COMP. GEN. 651, 658-659 (1967), WE STATED THE PRINCIPLE WHICH GOVERNS THIS ISSUE:

"* * * WHILE THE DETERMINATION OF RESPONSIBILITY IS PRIMARILY AN ADMINISTRATIVE FUNCTION AND WILL NOT BE DISTURBED BY THIS OFFICE ABSENT A SHOWING THAT THE DETERMINATION IS ARBITRARY, CAPRICIOUS OR WITHOUT SUBSTANTIAL BASIS IN FACT, * * * WE CANNOT HELP BUT NOTE THAT PRIOR DELINQUENCIES OF WHATEVER NATURE ARE ONE OF THE IMPORTANT FACTS TO BE CONSIDERED IN DETERMINING RESPONSIBILITY, ESPECIALLY IN A CASE WHERE EARLIEST POSSIBLE DELIVERY IS STATED TO BE CRUCIAL. * * *"

THE PREAWARD SURVEY REFERENCED IN THE CONTRACTING OFFICER'S DETERMINATION OF RESPONSIBILITY HAS BEEN FURNISHED TO OUR OFFICE. THE SURVEY WAS PERFORMED IN TWO PARTS, ONE ON E-O, THE OTHER ON MAGNOLIA. THE FACTS REVEALED BY THE REPORT FULLY SUPPORT THE RECOMMENDATION OF COMPLETE AWARD. IN PARTICULAR, THE SECONDARY SURVEY ON MAGNOLIA STATES:

"MAGNOLIA HOMES, INC; ARE MANUFACTURERS OF MOBILE HOMES, PRE FABRICATED HOUSES, OFFICES, DRIVER TRAINING UNITS, AND RELOCATABLE SCHOOL HOUSES. THEY COMPLETED CONTRACT F09603-67-C-3911 FOR HOSPITAL UNITS SATISFACTORILY. * * *" AT ANOTHER PLACE IN THE REPORT, CONTRACT F09603-67 -C-3911 IS IDENTIFIED AS AN AIR FORCE CONTRACT. IN ADDITION, UNDER "PERFORMANCE RECORD," THE INDUSTRIAL SPECIALIST'S NARRATIVE REPORT STATES:

"MAGNOLIA HOMES, INC. HAS BUILT SIMILAR ITEMS SINCE 1953. THEY HAVE ALSO BUILT MOBILE HOMES COMMERCIALLY. REVIEW OF GOVERNMENT CONTRACTS WITH THE DEPARTMENT OF INTERIOR AND U.S. FOREST SERVICE REVEALS THAT THESE CONTRACTS WERE PERFORMED SATISFACTORILY. MAGNOLIA HOMES, INC. WAS SUBCONTRACTOR TO ELDER-OILFIELDS ON CONTRACT F09603-67 C-3911 AND PRODUCTION WAS COMPLETED SATISFACTORILY." FURTHERMORE, MAGNOLIA'S ABILITY TO MEET THE AIR FORCE SCHEDULE WAS RATED "SATISFACTORY" ON THE BASIS THAT THE PROPOSED SUBCONTRACTOR HAD THE NECESSARY PLANT FACILITIES, TECHNICAL CAPABILITY, EQUIPMENT, LABOR AND PURCHASING CAPABILITY TO MEET THE GOVERNMENT'S STATED NEEDS WITH RESPECT TO THE TOTAL QUANTITY OF 380 UNITS FOR KARAMURSEL AND IRAKLION.

WE CONCLUDE, THEREFORE, THAT THE RECORD BEFORE OUR OFFICE PROVIDES NO BASIS TO QUESTION THE PROPRIETY OF THE CONTRACTING OFFICER'S DETERMINATION OF RESPONSIBILITY.

CONDUCT OF NEGOTIATIONS

AFTER RECEIPT OF THE INITIAL PROPOSALS OF MODULUX AND E-O ON APRIL 22, 1969, THE FIRST EVALUATION OF OFFERS WAS CONDUCTED WITH THE RESULT THAT MODULUX RECEIVED THE HIGHER SCORE. THE AUGUST 7, 1969, AIR FORCE REPORT STATES THAT THE CONTRACTING OFFICER ACCORDINGLY DECIDED TO NEGOTIATE ONLY WITH MODULUX, AND THAT A CONFERENCE TOOK PLACE AT HQ USAFSS ON APRIL 29, 1969. THE REPORT FURTHER RELATES THAT:

"* * * THERE WERE A NUMBER OF TECHNICAL DISCREPANCIES AND OMISSIONS IN THE MODULUX PROPOSAL. AT THE CONCLUSION OF THE MEETING, MODULUX AGREED TO REMEDY THESE DEFICIENCIES AT NO INCREASE IN ITS AGGREGATE PRICE." THE MINUTES OF THAT MEETING WERE SIGNED BY MR. WILSON, CHAIRMAN OF THE SOURCE SELECTION BOARD, AND BY TWO MODULUX REPRESENTATIVES. THE MINUTES INDICATE THAT A CONSIDERABLE NUMBER OF TECHNICAL MATTERS WERE DISCUSSED AND THAT MODULUX AGREED TO SUPPLEMENT AND REVISE ITS INITIAL TECHNICAL PROPOSAL IN A NUMBER OF RESPECTS.

ON MAY 9, 1969, THE FIFTH AMENDMENT TO THE RFP WAS ISSUED. IT MODIFIED THE STATED SHIPPING REQUIREMENTS AND SET THE TIME FOR RECEIPT OF NEW OFFERS AT 9 A.M; C.D.T; MAY 19, 1969. IT IS REPORTED THAT MODULUX PROPERLY ACKNOWLEDGED RECEIPT OF THIS AMENDMENT, BUT MADE NO CHANGE IN PRICE. E-O, HOWEVER, IS REPORTED TO HAVE REDUCED ITS PRICE AT THIS TIME, DISPLACING MODULUX AS THE LOW OFFEROR. NEVERTHELESS, AS WE HAVE OBSERVED, THE MODULUX PROPOSAL RETAINED ITS POSITION AS THE HIGHEST EVALUATED OFFER.

ON MAY 26, 1969, THE CONTRACTING OFFICER AND A RESPONSIBLE MODULUX OFFICIAL SIGNED STANDARD FORM 26, "AWARD/CONTRACT." THIS CONSTITUTED A CONDITIONAL AWARD OF A CONTRACT TO MODULUX, INASMUCH AS PARAGRAPH I 2 ON PAGE 21 OF THE RFP PROVIDED THAT:

"* * * THIS CONTRACT SHALL BE SUBJECT TO THE WRITTEN APPROVAL OF THE SECRETARY OF THE AIR FORCE OR HIS DULY AUTHORIZED REPRESENTATIVE AND SHALL NOT BE BINDING UNTIL SO APPROVED." IT IS FURTHER REPORTED THAT, AT THE TIME THE DOCUMENT WAS SIGNED, THE ATTENTION OF THE MODULUX SIGNATORY WAS DIRECTED TO THIS PROVISION; THAT THE MODULUX OFFICIAL WAS ADVISED THAT THE DOCUMENT WOULD BE HAND-CARRIED TO HEADQUARTERS AIR FORCE LOGISTICS COMMAND (HQ AFLC), FOR THE REQUIRED APPROVAL; AND THAT THE CONTRACT WAS NOT TO BE CONSIDERED AS AWARDED UNTIL SUCH TIME AS THE APPROVAL WAS GRANTED.

BY LETTER DATED JUNE 6, 1969, HQ AFLC ADVISED HQ USAFSS THAT CONTRACT APPROVAL HAD BEEN WITHHELD FOR THE REASON THAT ADEQUATE PRICE COMPETITION DID NOT EXIST BETWEEN MODULUX AND E-O. THE LETTER FURTHER STATED:

"3. THE PROPOSED AWARD OF THE CONTRACT TO MODULUX IS BASED UPON YOUR HEADQUARTERS PREMISE THAT COMPETITION EXISTED IN THIS PROCUREMENT BETWEEN THE MODULUX COMPANY AND ELDER-OILFIELD, INC. ON THE ASSUMPTION THAT PRICE COMPETITION EXISTED YOUR HEADQUARTERS DID NOT DEEM IT NECESSARY TO REQUEST AN AUDIT, PRICE OR COST ANALYSIS AND CERTIFICATE OF CURRENT COST OR PRICING DATA AS WOULD BE REQUIRED UNDER ASPR 3-809 AND 3-807 RESPECTIVELY.

"4. OUR REVIEW AND DISCUSSIONS WITH YOUR AFOREMENTIONED REPRESENTATIVES AFFIRMATIVELY INDICATES TO US THAT ADEQUATE PRICE COMPETITION DID NOT EXIST IN THIS CASE. THIS CONCLUSION IS BASED UPON THE FACT THAT THE ELDER -OILFIELD, INC. TECHNICAL PROPOSAL DID NOT COMPLY IN ALL RESPECTS WITH THE REQUIREMENTS OF THE WORK SPECIFICATION. INASMUCH AS ELDER OILFIELD, INC. TECHNICAL PROPOSAL WAS NOT ACCEPTABLE, NO COMPETITION ACTUALLY EXISTED BETWEEN THAT COMPANY AND MODULUX. THEREFORE, THE REQUIREMENTS OF ASPR 3- 809 AND 3 807 SHOULD HAVE BEEN COMPLIED WITH.

"5. OUR AFOREMENTIONED REVIEW ALSO INDICATED THAT BOTH CONTRACTORS WERE DEEMED TO BE TECHNICALLY QUALIFIED. FURTHER, THAT THE 'ELDER' TECHNICAL PROPOSAL COULD BE DEEMED ACCEPTABLE IF THAT CONTRACTOR WAS GIVEN AN OPPORTUNITY TO RECTIFY THE DEFICIENCIES THEREIN. THIS COULD HAVE BEEN ACCOMPLISHED UNDER THE PROVISIONS OF ASPR 3-804 AND 3-805.

"6. THE FOLLOWING COURSES OF ACTION CAN BE ACCOMPLISHED IN THIS MATTER:

"A. ELDER-OILFIELD, INC. CAN BE CALLED IN TO YOUR HEADQUARTERS AND THE DEFICIENCIES OF ITS TECHNICAL PROPOSAL POINTED OUT TO THE COMPANY AND INFORMATION REQUESTED AS TO WHETHER THE CONTRACTOR DESIRES TO REVISE THE TECHNICAL PROPOSAL. IF SO, CONTRACTOR SHOULD ALSO BE GIVEN AN OPPORTUNITY TO SUBMIT A REVISED PRICE PROPOSAL.

"B. IF THE PROCEDURE IN SUBPARAGRAPH A ABOVE IS FOLLOWED, THEN MODULUX, INCORPORATED SHOULD ALSO BE GIVEN AN OPPORTUNITY TO SUBMIT A REVISED PRICE PROPOSAL.

"C. IF THE PROCEDURES IN SUBPARAGRAPHS A AND B ARE FOLLOWED, THEN THE ADMONITIONS CONTAINED IN ASPR 3-804 AND 3-805 MUST BE FOLLOWED.

"D. IF, FOR SUBSTANTIVE REASONS, IT IS NOT DEEMED ADVISABLE BY YOUR ACTIVITY TO FOLLOW THE PROCEDURES IN SUBPARAGRAPHS A, B AND C ABOVE AND IT IS DEEMED BEST BY YOUR ACTIVITY TO CONSIDER ONLY MODULUX, INCORPORATED THEN THE CONTRACTOR SHOULD BE REQUESTED TO SUBMIT ITS PRICE PROPOSAL ON DD FORM 633 (ASPR 16-206) TOGETHER WITH THE NECESSARY SUPPORTING INFORMATION. THE REQUIRED AUDIT AND PRICE/COST ANALYSIS SHOULD BE ACCOMPLISHED.

"7. UPON ACCOMPLISHMENT OF EITHER OF THE SUGGESTIONS CONTAINED IN THE PRECEDING PARAGRAPH THE PROPOSED CONTRACT MAY BE RE-SUBMITTED FOR RECONSIDERATION AND APPROVAL."

PURSUANT TO THIS JUNE 6 LETTER, A MEETING TOOK PLACE ON JUNE 9, 1969, AT HQ USAFSS BETWEEN THE CONTRACTING OFFICER AND MR. WILSON, AND SEVERAL REPRESENTATIVES OF E-O, FOR THE PURPOSE OF CORRECTING DEFICIENCIES IN THAT COMPANY'S TECHNICAL PROPOSAL. THE MINUTES OF THE CONFERENCE ARE PART OF THE RECORD AND REVEAL THAT A LARGE NUMBER OF PROBLEMS WERE DISCUSSED. E-O SUBMITTED A REVISED TECHNICAL PROPOSAL BY LETTER DATED JUNE 10, 1969. IS REPORTED BY THE CONTRACTING OFFICER THAT THIS WAS CONSIDERED TECHNICALLY ADEQUATE AND THAT E-O WAS THEREFORE ENTITLED TO SUBMIT A REVISED PRICE PROPOSAL. THE PRICE REVISIONS WERE FORWARDED BY LETTER DATED JUNE 16, 1969, AND RECEIVED BY HQ USAFSS THE SAME DAY.

WE HAVE ALREADY OBSERVED THE FACT THAT ON JUNE 17, 1969, A REEVALUATION BY THE SOURCE SELECTION BOARD OF THE REVISED PROPOSALS SUBMITTED BY THE TWO COMPETITORS RESULTED IN E-O'S OFFER REPLACING THAT OF MODULUX AS THE OFFER MOST ADVANTAGEOUS TO THE GOVERNMENT. IN ADDITION, ON JUNE 17 A COLONEL PAYNE TELEPHONED AN OFFICIAL OF MODULUX TO REQUEST "A LAST AND FINAL BID" AND TO ADVISE THAT A MESSAGE TO THIS EFFECT WAS BEING SENT.

THIS MESSAGE WAS RECEIVED BY MODULUX ON JUNE 18, 1969, AND STATED:

"1. REFERENCE IS MADE TO YOUR PROPOSAL FOR CONSTRUCTION OF FAMILY HOUSING AT KARAMURSAL/TURKEY AND IRAKLION/CRETE UNDER THE TERMS OF RFP F41621-69-R -0348-005. REQUEST THAT YOU CONFIRM THAT THE PROPOSAL SUBMITTED BY YOU ON 7 MAY 69 IS YOUR FINAL AND BEST OFFER ON A FIRM FIXED PRICE BASIS.

"2. IN ORDER THAT WE MAY ARRIVE AT A DECISION AS TO AWARD CONSISTENT WITH THE TERMS OF THE RFP/REQUEST YOUR REPLY REACH THE CONTRACTING OFFICER BY 1200 HOURS CDT 20 JUNE 1969."

IT APPEARS THAT MODULUX TELEPHONICALLY ACKNOWLEDGED RECEIPT OF THIS MESSAGE IN THE AFTERNOON OF JUNE 19. AT NOON, JUNE 20, 1969, MODULUX TELEPHONED A PRICE REDUCTION OF $199,728, STATING THAT A CONFIRMATORY WIRE WOULD FOLLOW. THE WIRE WAS SENT, AND ALSO RECEIVED BY HQ USAFSS, LATER IN THE DAY. HOWEVER, THIS PRICE REDUCTION DID NOT DISPLACE E-O AS THE LOWEST OFFEROR. SEE THE POINT EVALUATION TABLE, SUPRA.ON JUNE 19, 1969, A CONTRACT DOCUMENT WAS SIGNED BOTH BY E-O AND THE CONTRACTING OFFICER, SUBJECT, OF COURSE, TO THE SAME CONDITION CONCERNING WRITTEN APPROVAL FROM HQ AFLC. ON JUNE 20, THE SOURCE SELECTION BOARD RESCORED THE TWO OFFERS IN LIGHT OF THE MODULUX PRICE REDUCTION OF THE SAME DAY, WITH THE EVALUATION RESULTS AS NOTED PREVIOUSLY. THE REQUIRED APPROVAL BY HQ AFLC OF THE E-O CONTRACT WAS GRANTED UNDER DATE OF JUNE 23, 1969.

YOU ARGUE THAT MODULUX WAS NOT PROVIDED WITH AN ADEQUATE OPPORTUNITY TO REVISE ITS PROPOSAL. THE DISCUSSIONS WITH MODULUX, CONDUCTED PURSUANT TO THE JUNE 6 DISAPPROVAL LETTER FROM HQ AFLC, ARE CHARACTERIZED AS "A SHAM WHICH VIOLATED THE ASPR." THE CONTENTION WAS PROPOUNDED MOST FULLY IN THE LETTER OF AUGUST 19, 1969, AND THE THRUST OF THE COMPLAINT APPEARS TO BE THAT THE TIME FRAME AFFORDED TO MODULUX ON JUNE 18 FOR REVISION OF ITS PROPOSAL WAS UNREASONABLY SHORT. THE LETTER ELABORATES:

"IN THIS CONNECTION, IT IS IMPORTANT TO RECOGNIZE THAT THIS WAS A MULTIMILLION DOLLAR PROCUREMENT INVOLVING, IN A SINGLE PACKAGE, NOT JUST FABRICATION OF HOUSING BUT TRANSPORTATION TO AND ERECTION AT OVERSEAS LOCATIONS. THUS, THE DIFFERENT ELEMENTS OF COST INVOLVED WERE NOT ONLY NUMEROUS BUT IN SOME CASES SUBJECT TO RAPID CHANGE. QUOTATIONS FROM SUBCONTRACTORS AND SHIPPING COMPANIES CANNOT BE EXPECTED TO STAND STILL INDEFINITELY, AND IT IS PATENTLY UNREASONABLE TO GIVE A COMPETITOR ONLY EIGHT TO TEN HOURS TO ATTEMPT TO REASSESS COSTS POSTULATED SEVEN WEEKS EARLIER. (BY WAY OF COMPARISON, IT IS APPROPRIATE TO NOTE THAT EARLIER MODULUX HAD BEEN GIVEN FROM APRIL 29 TO MAY 7 TO REVISE ITS PRICE QUOTATION, AND ELDER FROM JUNE 10 TO AT LEAST JUNE 16 TO DO THE SAME.)" IT IS ASSERTED THAT HAD MODULUX BEEN AFFORDED A LONGER PERIOD OF TIME TO RESPOND ON PRICE, IT WOULD HAVE BEEN ABLE TO SUBMIT A REDUCTION WHICH WOULD HAVE MADE IT THE SUCCESSFUL OFFEROR. HOWEVER, WE ARE NOT PERSUADED THAT THE FACTS OUTLINED ABOVE REPRESENT A BASIS FOR INTERPOSING A LEGAL OBJECTION TO THE AWARD MADE TO E-O. THE MODULUX TECHNICAL PROPOSAL WAS REVISED ON APRIL 29 AND AMENDMENT NO. 5 TO THE RFP WAS ISSUED ON MAY 9. MODULUX WAS PERMITTED TO SUBMIT A REVISED PRICE PROPOSAL BASED ON ITS TECHNICAL REVISIONS AND THE AMENDMENT AS LATE AS MAY 19. THE COMPANY WAS THEREBY AFFORDED A PERIOD OF 20 DAYS TO RECONSIDER ITS PRICE IN LIGHT OF THE REVISIONS IN ITS TECHNICAL PROPOSAL. BY WAY OF CONTRAST, E-O'S REVISED TECHNICAL PROPOSAL WAS SUBMITTED ON JUNE 10 AND AT SOME UNSPECIFIED TIME THEREAFTER WAS ASKED TO SUBMIT PRICE REVISIONS; HOWEVER, SINCE E-O'S REVISED PRICE PROPOSAL WAS SUBMITTED IN A LETTER DATED JUNE 16, IT MUST BE CONCLUDED THAT E-O HAD 6 DAYS TO RECONSIDER ITS PRICE, AS OPPOSED TO THE 20 DAYS AFFORDED TO MODULUX. WHILE MODULUX WAS ADMITTEDLY GIVEN A FAIRLY SHORT PERIOD TO SUBMIT A "BEST AND FINAL" OFFER, WE CANNOT IGNORE THE FACT THAT THE COMPANY WAS IN FACT ABLE TO OFFER A PRICE REDUCTION. ALSO, WE OBSERVE THAT NO COMPLAINT CONCERNING THE ADEQUACY OF THE TIME ALLOWED WAS VOICED BY MODULUX PRIOR TO THE NOTICE OF AWARD.

NO PROVISION OF STATUTE OR REGULATION, NOR ANY DECISION OF OUROFFICE, HAS BEEN CITED FOR THE PROPOSITION THAT THE GOVERNMENT MUST PROVIDE A CERTAIN MINIMUM TIME FOR SUBMISSION OF A "BEST AND FINAL" OFFER. WE DO NOT BELIEVE THAT SOUND PROCUREMENT POLICY DICTATES THE ESTABLISHMENT OF A MINIMUM TIME FOR THE SUBMISSION OF PRICE REVISIONS. RATHER, IT WOULD APPEAR TO BE CLEARLY PREFERABLE TO LEAVE IT TO THE SOUND DISCRETION OF THE PROCUREMENT OFFICIALS TO AFFORD WHATEVER PERIOD IS CONSIDERED NECESSARY, IN VIEW OF THE PERTINENT FACTORS, INCLUDING TIME, INVOLVED IN THE INDIVIDUAL CASE. SUCH A VIEW IS IN ACCORD WITH THE GENERAL PRINCIPLE THAT NEGOTIATED PROCUREMENTS ARE TO BE CHARACTERIZED BY "FLEXIBLE AND INFORMAL" PROCEDURES WHICH "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." 47 COMP. GEN. 279, AT 284 (1967). SEE, ALSO, B-163630, APRIL 22, 1968, WHERE, UNDER THE PARTICULAR FACTS PRESENTED, WE CONCLUDED THAT IT WAS NOT IMPROPER FOR A CONTRACTING OFFICER, WHO HAD RECEIVED INITIAL PROPOSALS ON A FRIDAY, TO CONDUCT AND TERMINATE DISCUSSIONS ON THE SUCCEEDING MONDAY. SEE,IN ADDITION, B-160642, MARCH 8, 1967, AND B 164253, JULY 24, 1968.

WE DO NOT MEAN TO IMPLY THAT THERE IS NO STANDARD FOR REVIEW OF SUCH MATTERS BY OUR OFFICE, NOR DO WE BELIEVE THAT THERE CAN BE NO CIRCUMSTANCES IN WHICH WE WOULD OBJECT TO A NEGOTIATED AWARD WHERE A PROTEST IS BASED ON AN INADEQUATE OPPORTUNITY TO SUBMIT A REVISED PROPOSAL. THE APPLICABLE STANDARD FOR REVIEW IS ONE OF REASONABLENESS UNDER THE CIRCUMSTANCES, AND OUR INQUIRY NECESSARILY WOULD BE WHETHER, AS A MATTER OF LAW, THE PERIOD OF TIME AFFORDED WAS UNREASONABLE AND PREJUDICIAL TO A COMPETITIVELY SITUATED OFFEROR. SUCH A STANDARD WAS TACITLY APPLIED IN B-163630, B-160642 AND B-164253, CITED ABOVE. SEE, ALSO, B-167185, SEPTEMBER 3, 1969, 49 COMP. GEN. , WHERE A TELEGRAM ASKING FOR THE BEST AND FINAL OFFER, REQUIRING A RESPONSE WITHIN 3 HOURS, WAS HELD NOT TO BE LEGALLY INADEQUATE. WE HOLD IN THIS CASE THAT THE TIME AFFORDED MODULUX WAS NOT UNREASONABLE UNDER THE FACTS PRESENT HERE.

YOU HAVE ADDITIONALLY ALLEGED THAT THERE WAS NO JUSTIFICATION FOR THE AIR FORCE'S USE OF THE "PUBLIC EXIGENCY" EXCEPTION (10 U.S.C. 2304 (A) (2) ) AS THE BASIS FOR NEGOTIATING THIS CONTRACT. HOWEVER, THE CONTRACTING OFFICER EXECUTED THE REQUIRED "DETERMINATION AND FINDINGS" (D&F) ON FEBRUARY 25, 1969, RECITING THE FACT THAT THE PURCHASE REQUEST CITED A PRIORITY DESIGNATOR OF 01 UNDER THE UNIFORM MATERIEL MOVEMENT AND ISSUE PRIORITY SYSTEM (UMMIPS). ASPR 3-202.2 (VI) PROVIDES THAT ONE OF THE CIRCUMSTANCES AUTHORIZING NEGOTIATION UNDER THE PUBLIC EXIGENCY EXCEPTION IS A PROCUREMENT IN WHICH THE PURCHASE REQUEST CITES A UMMIPS PRIORITY DESIGNATOR 01 THROUGH 06. FURTHERMORE, ASPR 3-202.3 SPECIFICALLY PROVIDES THAT THE D&F NEED ONLY CITE THE ISSUE PRIORITY DESIGNATOR AS JUSTIFICATION FOR UNDERTAKING PROCUREMENT BY NEGOTIATION. SEE OUR DECISIONS 45 COMP. GEN. 374 (1966) AND B-166886, AUGUST 7, 1969, INDICATING OUR APPROBATION OF THIS PROCEDURE.

WE HAVE EXAMINED THE VARIOUS PURCHASE REQUESTS AND THE OTHER DOCUMENTS PERTAINING TO THE QUESTION OF AUTHORITY TO NEGOTIATE THIS PROCUREMENT. DO HAVE SERIOUS DOUBT THAT THE UMMIPS SYSTEM, AS ESTABLISHED AND DEFINED BY DOD INSTRUCTION 4410.6 (AUGUST 24, 1966), IS OR WAS INTENDED TO BE PROPERLY APPLICABLE TO A TURNKEY CONTRACT FOR CONSTRUCTION OF MILITARY FAMILY HOUSING. BY SEPARATE LETTER OF TODAY, WE ARE SOLICITING THE VIEWS OF THE SECRETARY OF THE AIR FORCE ON THIS POINT. HOWEVER, IN VIEW OF THE FACT THAT THE CONTRACTING OFFICER APPEARS TO HAVE OBSERVED THE PROCEDURES REQUIRED BY REGULATION TO SUPPORT HIS AUTHORITY TO NEGOTIATE AND BECAUSE THE CONTRACTOR HAS ACHIEVED CONSIDERABLE PERFORMANCE, WE PERCEIVE OF NO BASIS FOR INTERPOSING AT THIS TIME A LEGAL OBJECTION TO THE VALIDITY OF THE CONTRACT AWARDED TO E-O, AND NO BASIS ON WHICH WE WOULD FEEL JUSTIFIED IN DIRECTING CANCELLATION OF THE CONTRACT REGARDLESS OF THE OUTCOME OF OUR PRESENT INQUIRY TO THE AIR FORCE.

FOR THE ABOVE-STATED REASONS, YOU ARE ADVISED THAT THE PROTEST MUST BE DENIED.