B-144137, FEB. 16, 1961

B-144137, FEB. 16, 1961

TO CHICAGO AERIAL INDUSTRIES, INCORPORATED:

BY LETTERS DATED OCTOBER 3 AND NOVEMBER 4, 1960, YOU PROTESTED AGAINST THE AWARD OF A CONTRACT TO VIEWLEX, INC., UNDER INVITATION FOR BIDS NO. 33 -660-6152, ISSUED ON AUGUST 18, 1960, BY THE AMC AERONAUTICAL SYSTEMS CENTER, WRIGHT-PATTERSON AIR FORCE BASE, OHIO.

THE INVITATION, AS AMENDED, SCHEDULED FOR OPENING ON SEPTEMBER 20, 1960, REQUESTED BIDS FOR 52 KA-30 CAMERA ASSEMBLIES, AND AN ADDITIONAL 52 LENS CONE GROUPS FOR THE CAMERAS, IN ACCORDANCE WITH MIL-C 22181/AER) DATED OCTOBER 27, 1959, AND A LIST OF EXCEPTIONS DATED JULY 27, 1960. BIDS WERE ALSO REQUESTED ON A NUMBER OF SUBITEMS OF RELATED EQUIPMENT, DRAWINGS AND DATA. THE INVITATION PROVIDED FOR A FIRST ARTICLE PREPRODUCTION SAMPLE EVALUATION AND APPROVAL; A DELIVERY SCHEDULE WHICH SUBSTANTIALLY MET THE NEEDS OF THE USING ACTIVITY; AND THE BAILMENT TO THE SUCCESSFUL BIDDER OF A MODEL OF THE CAMERA AND LENS CONE GROUP, BUT WARNED BIDDERS THAT THE GOVERNMENT MADE NO WARRANTY THAT EITHER THE MODEL SHOWN PROSPECTIVE BIDDERS OF MODELS WHICH MIGHT BE BAILED TO THE CONTRACTOR OR THE MANUFACTURER'S DRAWINGS THAT ARE AVAILABLE ARE EITHER COMPLETE OR SUFFICIENT TO PRODUCE THE SUPPLIES IN COMPLIANCE WITH THE SPECIFICATIONS.

TWO BIDS WERE RECEIVED AND OPENED ON SEPTEMBER 20, 1960. CAI BID A UNIT PRICE OF $11,477.05 FOR THE CAMERAS, A UNIT PRICE OF $5,957.57 FOR THE LENS CONE GROUPS, $59,654.96 FOR PRODUCTION DRAWINGS AND $10,881.59 FOR REPAIR STANDARDS LITERATURE. THUS, THE TOTAL BID OF CAI WAS $977,136.79. VIEWLEX BID A UNIT PRICE OF $12,480 FOR THE CAMERA, $4,800 FOR EACH LENS CONE GROUP AND OFFERED TO FURNISH ALL REQUIRED PRODUCTION DRAWINGS AND DATA AT NO CHARGE. THE TOTAL BID OF VIEWLEX WAS $898,560, LESS A DISCOUNT OF 1/4 PERCENT, THEREBY REDUCING ITS NET BID TO $896,313.60, OR $80,823.19 LESS THAN THAT BID BY CAI.

IN ACCORDANCE WITH APPLICABLE PROCEDURES AND REGULATIONS, A SURVEY WAS CONDUCTED OF THE FACILITIES AND CAPABILITY OF VIEWLEX TO PERFORM THE PROPOSED CONTRACT. THE SURVEY RESULTED IN A FAVORABLE REPORT SHOWING THAT VIEWLEX HAS THE NECESSARY FACILITIES, PRODUCTION AND ENGINEERING CAPACITY, AVAILABLE MATERIALS, AVAILABLE MANPOWER, AND NECESSARY FINANCIAL RESOURCES TO PERFORM THE CONTRACT AND MEET THE REQUIRED DELIVERY SCHEDULE. ON THE BASIS OF ITS LOW BID AND THE FAVORABLE FACILITIES CAPABILITY REPORT, THE CONTRACT WAS AWARDED TO VIEWLEX ON OCTOBER 3, 1960, AND RELEASED TO VIEWLEX ON OCTOBER 25, 1960.

A COPY OF THE DEPARTMENT OF THE AIR FORCE REPORT DATED NOVEMBER 2, 1960, WAS FURNISHED INFORMALLY TO YOU FOR COMMENT AND BY LETTER DATED NOVEMBER 9, 1960, YOU DETAILED YOUR COMMENTS THEREON. WE HAVE CONSIDERED ALL OF YOUR OBSERVATIONS IN THE LIGHT OF THE ENTIRE RECORD OF THIS PROCUREMENT AND WE MUST CONCLUDE THAT NO LEGAL BASIS EXISTS FOR QUESTIONING THE AWARD MADE TO VIEWLEX UNDER THE SUBJECT INVITATION.

YOUR COMMENTS RELATING TO THE PRIOR PROCUREMENT HISTORY OF SERIAL CAMERAS BY THE DEPARTMENT OF THE AIR FORCE HAVE NO DIRECT RELATIONSHIP TO THE INSTANT PROCUREMENT WHICH WAS LET AFTER FORMAL ADVERTISING TO THE LOWEST RESPONSIBLE, RESPONSIVE BIDDER. HENCE, WE DO NOT BELIEVE IT NECESSARY TO DISCUSS YOUR ALLEGATIONS IN THAT REGARD EXCEPT AS THEY MAY PERTAIN TO THE INSTANT PROCUREMENT.

YOU ALLEGED THAT IN MAKING AWARD TO VIEWLEX THE AIR FORCE THREW AWAY A $1,700,000 GOVERNMENT INVESTMENT IN SPARES, TEST EQUIPMENT, DATA AND HANDBOOKS TO SECURE SAVINGS OF ABOUT $80,000. IT IS NOTED THAT THE ACTUAL SAVINGS REALIZED AS A RESULT OF FORMAL COMPETITION, AS OPPOSED TO CONTINUING TO NEGOTIATE ON A SOLE SOURCE BASIS WITH CAI, ARE COMPUTED AT APPROXIMATELY $312,000. THIS IS FAR DIFFERENT FROM THE SAVINGS SUGGESTED BY YOU WHICH REPRESENT ONLY THE DIFFERENCE BETWEEN YOUR BID AND THAT OF VIEWLEX, AFTER COMPETITION HAD BEEN INTRODUCED INTO THIS PROCUREMENT. MOREOVER, THERE IS NO FACTUAL BASIS FOR YOUR ALLEGATION THAT THE AIR FORCE DISREGARDED THE ALLEGED $1,700,000 INVESTMENT WHEN IT AWARDED THE CONTRACT TO VIEWLEX. CONTRACT NO. AF33 (600) 42279 WITH VIEWLEX, INC., IS A FIXED- PRICE CONTRACT AND THE SEVERAL HUNDRED THOUSAND DOLLARS IN DATA AND HANDBOOKS INCLUDED IN YOUR FIGURE OF $1,700,000 WOULD BE INCLUDED IN THE CONTRACT PRICE INSOFAR AS APPLICABLE. PRODUCTION TEST EQUIPMENT IS ALSO INCLUDED IN THE FIXED PRICE OF SUCH CONTRACT AND FIELD TEST EQUIPMENT WHICH REPRESENTS THE LARGEST PORTION OF THE $1,700,000 FIGURE WILL BE LARGELY COMPATIBLE WITH THE VIEWLEX-BUILT KA-30 CAMERA SYSTEM.

NEITHER IS THERE ANY EVIDENCE TO SUPPORT YOUR CONTENTION THAT A LARGE AMOUNT OF SUPPORT EQUIPMENT, BUILT TO BE COMPATIBLE WITH THE LATEST CAI KA -30 CAMERAS, WILL BE RENDERED OBSOLETE OR SURPLUS BY THE ADDITION OF THE VIEWLEX-BUILT KA-30 CAMERAS INTO THE SUPPLY SYSTEM. AN ADDITIONAL FACTOR WHICH WAS CONSIDERED IN ESTABLISHING A SECOND SOURCE FOR THESE CAMERAS, OTHER THAN THE DRASTIC PRICE REDUCTIONS BEING ACHIEVED, WAS THAT IN THE EVENT OF AN EMERGENCY THEY WOULD BE READY TO PRODUCE WITHOUT THE USUAL GET -READY TIME.

YOUR CONTENTION THAT VIEWLEX MAY NOT BE THE LOW BIDDER BECAUSE SPARE PARTS WILL BE NEGOTIATED AT A LATER DATE IS INVALID. THE NEGOTIATION OF SPARE PARTS IS AN ENTIRELY SEPARATE TRANSACTION, IN EFFECT A NEW CONTRACT AND IS MADE A PART OF THE PRESENT CONTRACT MERELY AS A VEHICLE TO ESTABLISH A REQUIREMENT FOR SPARE PARTS DOCUMENTATION. SPARES WOULD HAVE BEEN REQUIRED HAD THE CONTRACT BEEN PLACED WITH CAI OR ANY OTHER CONTRACTOR AND THE PRICING ARRANGEMENTS WOULD HAVE BEEN THE SAME. ACTUALLY, PLACING A CONTRACT WITH A SECOND SOURCE SHOULD RESULT IN A REDUCTION IN SPARE PARTS COSTS BY INTRODUCING COMPETITION IN THE PROCUREMENT OF COMMON SPARE PARTS.

WITH RESPECT TO THE ALLEGATION THAT THE AIR FORCE IMPROPERLY USED PROPRIETARY DRAWINGS IN CONNECTION WITH THE INSTANT PROCUREMENT, IT APPEARS THAT SUCH ALLEGATION WAS COMPLETELY REFUTED BY LETTER DATED NOVEMBER 17, 1960, FROM HEADQUARTERS, AIR MATERIEL COMMAND, TO YOUR MR. RUFFIN. IT IS NOTED THAT EACH OF THE DRAWINGS INVOLVED IN YOUR COMPLAINT BORE THE FOLLOWING LEGEND:

"THIS DOCUMENT HAS BEEN PURCHASED BY THE GOVERNMENT AND MAY BE REPRODUCED AND USED IN CONNECTION WITH ANY GOVERNMENT PROCUREMENT OR MAINTENANCE OPERATION.'

WITH REFERENCE TO YOUR ALLEGATION THAT VIEWLEX CONTEMPLATED SUBCONTRACTING WITH LARGE BUSINESS CONTRARY TO THE INTENT OF THE SMALL BUSINESS ACT, YOU ARE ADVISED THAT ONLY 40 PERCENT SUBCONTRACTING IS INTENDED BY VIEWLEX. IN ADDITION, THE SUBCONTRACTING IS LIMITED TO THE PROCUREMENT OF COMPONENTS FOR THE CAMERA ASSEMBLY, SUCH AS LENS, MOTOR, CASTINGS, GEARS AND MISCELLANEOUS ELECTRICAL PARTS FROM SOURCES NOT GENERALLY RECOGNIZED AS LARGE BUSINESS. SPECIFICALLY, THE FAIRCHILD CAMERA AND INSTRUMENT CORPORATION IS NOT INCLUDED AMONG THESE SOURCES, AND WE ARE ADVISED THAT THEY WILL NOT PARTICIPATE IN THE PERFORMANCE OF THIS CONTRACT.