B-144641, FEB. 16, 1961

B-144641, FEB. 16, 1961

TO BLANK, ENDENKO, KLAUS AND ROME:

ON BEHALF OF THE M AND T COMPANY, YOU HAVE BY LETTER OF DECEMBER 15, 1960, PROTESTED AGAINST THE AWARD OF A CONTRACT TO ANY OTHER BIDDER UNDER INVITATION NO. 04-687-61-1, ISSUED OCTOBER 7, 1960, BY THE DEPARTMENT OF THE AIR FORCE FOR THE PROCUREMENT OF SERVICES IN CONNECTION WITH LANDINGS OF GOVERNMENT AIRCRAFT AT WAKE ISLAND FOR THE PERIOD JANUARY 1 THROUGH DECEMBER 31, 1961.

THE SERVICES TO BE FURNISHED BY THE CONTRACTOR ARE BROKEN DOWN INTO 15 ITEMS OF WHICH 10 INVOLVE GOVERNMENT COSTS. THESE ITEMS GENERALLY REQUIRE THE FURNISHING OF ALL LABOR, EQUIPMENT, MATERIALS AND SUPPLIES FOR SERVICING AIRCRAFT LANDINGS, AND FOR THE INSPECTION, REPAIR AND MAINTENANCE OF AIRCRAFT IN ADDITION TO CERTAIN INCIDENTAL SERVICES WITH RESPECT TO THE CARE OF PERSONNEL AND PASSENGERS OF SUCH AIRCRAFT.

IN ITS ORIGINAL FORM, THE INVITATION IN CONNECTION WITH THE FIRST ITEM, AIRCRAFT LANDING SERVICES, REQUIRED THE SUBMISSION OF BIDS ON A PER UNIT BASIS DEPENDING UPON THE NUMBER OF SUCH UNITS IN EACH MONTH. THUS, SPACE WAS PROVIDED FOR THE INSERTION OF A UNIT PRICE IF THE LANDINGS IN ANY GIVEN MONTH FELL WITHIN THE 250 TO 300 RANGE, ANOTHER UNIT PRICE FOR THE 301 TO 360 RANGE, ETC. THE INVITATION IN ITS ORIGINAL FORM PROVIDED A PARALLEL RANGE WITH RESPECT TO THE SECOND ITEM, SERVICE AND MAINTENANCE OF AIRCRAFT. BY AMENDMENT NO. 2, ISSUED NOVEMBER 5, 1960, THE FIRST TWO ITEMS WERE CHANGED. FOR THE FIRST ITEM BIDDERS WERE ASKED TO SUBMIT A UNIT PRICE WHEN THE NUMBER OF LANDINGS FELL WITHIN THE 401 TO 450 RANGE. THE INVITATION THEN PROVIDED THAT WHEN THE NUMBER OF LANDINGS PER MONTH FELL OUTSIDE THAT RANGE, AND WITHIN OTHER DESIGNATED RANGES, THE AMOUNT THE GOVERNMENT WOULD PAY PER LANDING WOULD BE A STATED PERCENTAGE OF THE PRICE BID ON THE 401 TO 450 RANGE. THE PERCENTAGES WERE SO ARRANGED THAT WHEN THE STANDARD WAS EXTENDED THE UNIT PRICE WOULD BE LESS, AND WHEN THE NUMBER OF LANDINGS FELL BELOW THE STANDARD THE UNIT PRICE WOULD BE MORE, APPARENTLY ON THE THEORY THAT THE GREATER THE NUMBER OF LANDINGS THE LOWER THE UNIT COST SHOULD BE. THE SAME CHANGE WAS MADE WITH RESPECT TO THE SECOND ITEM, EXCEPT THAT THE STANDARD RANGE WAS ESTABLISHED AT BETWEEN 326 AND 350 SERVICES AND REPAIRS PER MONTH.

WHEN BIDS WERE OPENED ON NOVEMBER 15, 1960, IT WAS FOUND THAT THE AIRCRAFT ENGINEERING AND MAINTENANCE COMPANY (AEMCO), A DIVISION OF INTERNATIONAL AIRCRAFT, INCORPORATED, OFFERED A UNIT PRICE OF $99 FOR THE STANDARD RANGE UNDER ITEM 1 AND $255 FOR THE STANDARD RANGE UNDER ITEM 2. ANOTHER BIDDER OFFERED UNIT PRICES OF $112.91 UNDER ITEM 1 AND $270.23 UNDER ITEM 2. M AND T BID $116 UNDER ITEM 1 AND $340 UNDER ITEM 2. COVERING LETTER TO THE M AND T BID PROVIDED THAT A DISCOUNT OF 25 PERCENT WOULD BE APPLIED TO THE PRICES BID ON ITEMS 1 AND 2 WHENEVER THE ACTUAL NUMBER OF LANDINGS WITHIN THE MONTH FELL WITHIN THE STANDARD RANGE. FOR ALL ITEMS OTHER THAN 1 AND 2 THE AEMCO BID WAS EVALUATED AT A COST OF $69,108.27 PER MONTH AND FOR THE SAME ITEMS THE M AND T BID WAS EVALUATED AT $72,526.45 PER MONTH.

THE CONTRACTING AGENCY CONSIDERED, FOR REASONS SET OUT BELOW, THAT AEMCO WAS THE LOW BIDDER. IN ACCORDANCE WITH STANDARD PROCEDURES A SURVEY WAS THEN CONDUCTED TO DETERMINE THE CAPABILITY OF THE LOW BIDDER TO PERFORM. RESULTS OF THE SURVEY WERE FAVORABLE AND IT WAS CONCLUDED THAT AEMCO HAS ALL OF THE QUALIFICATIONS NECESSARY TO SATISFACTORILY CARRY OUT THE CONTRACT. HOWEVER, BEFORE AN AWARD COULD BE MADE, ALLEGATIONS WERE RECEIVED WITH RESPECT TO ALLEGED IRREGULARITIES IN THE BIDDING. BECAUSE OF THE SERIOUS NATURE OF THE CHARGES, AWARD WAS WITHHELD PENDING A THOROUGH INVESTIGATION BY THE AIR FORCE INSPECTOR GENERAL. BASED ON THE RESULTS OF THAT INVESTIGATION, THE AIR FORCE HAS CONCLUDED THAT THERE WERE IN FACT NO IRREGULARITIES IN CONNECTION WITH THE BIDDING. THE SUMMARY OF THE FINDINGS FURNISHED TO US PROVIDES NO BASIS FOR QUESTIONING THAT CONCLUSION.

YOU HAVE PRESENTED TWO OBJECTIONS TO AN AWARD TO AEMCO. FIRST, YOU STATE "* * * THAT A REVIEW OF THEIR FINANCIAL CONDITION AND OWNERSHIP WILL DEMONSTRATE THAT THEY DO NOT HAVE THE QUALIFICATIONS OF A RESPONSIBLE BIDDER.' THE QUESTION OF THE QUALIFICATIONS OF A PROPOSED CONTRACTOR IS PRIMARILY WITHIN THE JURISDICTION OF THE CONTRACTING AGENCY AND WE WOULD BE JUSTIFIED IN QUESTIONING THAT DETERMINATION ONLY UPON A SHOWING OF BAD FAITH OR LACK OF REASONABLE BASIS. 37 COMP. GEN. 430, 435. NO GROUNDS HAVE BEEN ASSERTED TO JUSTIFY A CONCLUSION ON OUR PART THAT THE ADMINISTRATIVE DETERMINATION LACKED A REASONABLE BASIS OR WAS MADE IN BAD FAITH. ACCORDINGLY, WE ACCEPT THE ADMINISTRATIVE DETERMINATION AS TO AEMCO'S QUALIFICATIONS.

YOU NEXT CONTEND THAT M AND T IS IN FACT THE LOW BIDDER. A COMPARISON OF THE AEMCO AND M AND T BIDS REVEALS THAT THE TOTAL COST OF THE CONTRACT FOR A 12-MONTH PERIOD, IF AWARDED TO M AND T, WOULD BY REASON OF THE DISCOUNT OFFER BE APPROXIMATELY $20,000 LESS THAN IF AWARDED TO AEMCO, PROVIDED THAT THE NUMBER OF UNITS UNDER ITEMS 1 AND 2 FELL WITHIN THE STANDARD RANGE IN ALL 12 MONTHS. HOWEVER, THE AEMCO BID WOULD RESULT IN THE LOWEST COST TO THE GOVERNMENT IF EITHER THE NUMBER OF UNITS UNDER ITEM 1 FELL OUTSIDE THE STANDARD RANGE THREE OR MORE MONTHS OF THE PERIOD OR THE NUMBER OF UNITS UNDER ITEM 2 FELL OUTSIDE THE STANDARD RANGE FOR ONLY ONE MONTH OF THE PERIOD.

THE STANDARD RANGES FOR ITEMS 1 AND 2 WERE ESTABLISHED BY AVERAGING PRIOR EXPERIENCE FOR A PERIOD OF TWO YEARS. THOSE TWO YEARS OF EXPERIENCE SHOW, HOWEVER, THAT THE NUMBER OF UNITS FELL WITHIN THE STANDARD RANGE FOR ITEM 1 ONLY FOUR TIMES OUT OF 24 MONTHS AND ITEM 2 ONLY ONCE OUT OF THE 24 MONTHS. THE NUMBER OF UNITS WHICH WILL BE CHARGED UNDER THE FIRST TWO ITEMS FOR EACH MONTH IN THE CONTRACT PERIOD IS TO A CONSIDERABLE EXTENT A MATTER OF SPECULATION. ASSUMING, HOWEVER, THAT THE PRIOR EXPERIENCE FORECASTS THE FORTHCOMING YEAR WITH ANY REASONABLE DEGREE OF ACCURACY, THE POSSIBILITY THAT THE LOWEST COST TO THE GOVERNMENT CAN BE ACHIEVED BY AWARD TO M AND T WOULD BE EXTREMELY REMOTE.

WE HAVE TAKEN THE POSITION THAT THE BASIS FOR THE EVALUATION OF BIDS SHOULD BE CLEAR AND EXACT AND SHOULD BE MADE KNOWN TO THE BIDDERS IN ADVANCE OF BID PREPARATION. 36 COMP. GEN. 380, 385. WE DO NOT BELIEVE THIS CRITERION WOULD HAVE BEEN MET HAD ITEMS 1 AND 2 BEEN LEFT IN THEIR ORIGINAL FORM, SINCE IT WOULD HAVE BEEN DIFFICULT, IF NOT IMPOSSIBLE, TO ESTABLISH THE RANGES TO BE SELECTED IN ESTIMATING THE TOTAL AMOUNT OF THE BID. THAT TYPE OF BID WOULD HAVE BEEN SIMILAR TO THAT DESCRIBED IN OUR DECISION, 35 COMP. GEN. 689, IN WHICH WE AGREED THAT EVALUATION WOULD BE IMPOSSIBLE. ITEMS 1 AND 2, AS AMENDED, WERE PREDICATED UPON PROVIDING A REASONABLE BASIS FOR EVALUATION AND, WHILE IT MAY BE THAT SOME SLIGHT ADDITIONAL COMPETITION COULD HAVE BEEN ATTAINED HAD EVERY BIDDER BEEN LEFT TO ESTABLISH HIS OWN PERCENTAGES FOR UNITS PER MONTH OUTSIDE THE STANDARD RANGE, TO PERMIT SUCH FREEDOM WOULD AGAIN HAVE POSED AN IMPOSSIBLE BID EVALUATION SITUATION.

WE DO NOT CONSIDER IT NECESSARY TO DECIDE WHETHER THE M AND T BID SHOULD BE REGARDED AS RESPONSIVE TO THE TERMS OF THE INVITATION. CERTAINLY THERE IS SERIOUS DOUBT ON THIS POINT. EVEN CONCEDING THE RESPONSIVENESS OF THAT BID, THE POSSIBILITY THAT AN AWARD ON THAT BID WOULD RESULT IN THE LOWEST COST TO THE GOVERNMENT IS SO REMOTE IN COMPARISON WITH THE AEMCO BID AS TO WARRANT ITS REJECTION.

THEREFORE, WE CONCLUDE THAT THERE HAS BEEN PRESENTED NO SUFFICIENT BASIS TO JUSTIFY A DETERMINATION ON OUR PART THAT AWARD TO AEMCO WOULD BE IMPROPER.