B-146294, B-146596, AUG. 25, 1961

B-146294, B-146596, AUG. 25, 1961

TO R AND D CONSULTANTS, INC.:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 3, 1961, PROTESTING THE AWARD MADE TO LOCKHEED AIRCRAFT SERVICES--- NEW YORK, INC., FOR THE MAINTENANCE OF AIRCRAFT AT THE NATIONAL AVIATION FACILITIES EXPERIMENTAL CENTER, ATLANTIC CITY, NEW JERSEY, UNDER REQUEST FOR QUOTATIONS NO. BRD-AC-61-1, ON THE BASIS THAT YOUR QUOTATION WAS LOWER THAN THE AMOUNT SPECIFIED IN THE CONTRACT AS AWARDED.

QUOTATIONS WERE REQUESTED FOR SERVICES FOR THE MAINTENANCE, FUELING, AND AIRCRAFT COMPONENTS DURING THE PERIOD JULY 1, 1961, THROUGH JUNE 30, 1962, UNDER A COST-PLUS-A-FIXED-FEE CONTRACT. OFFERORS WERE REQUIRED TO QUOTE FIXED AMOUNTS FOR PHASE-IN COSTS AND FEE FOR PERFORMING THE SERVICES. THEY WERE ALSO REQUIRED TO SET FORTH TOTAL ESTIMATED COSTS ON THE BASIS OF A PROPOSED PLAN OF OPERATIONS. HOWEVER, SINCE THE OPERATIONAL COSTS WERE TO BE REIMBURSED, THE PLAN OF OPERATIONS AND THE ESTIMATED COSTS THEREUNDER WERE PRIMARILY FOR THE PURPOSE OF ENABLING THE CONTRACTING AGENCY TO DETERMINE THE COMPETENCY OF THE OFFEROR TO PERFORM THE SERVICES.

THE RECORD SHOWS THAT YOU SUBMITTED A QUOTATION OF $139,200 FOR FIXED FEE AND $29,566.08 FOR PHASE-IN COSTS, OR A TOTAL FIXED COST OF $168,766.08. THE REIMBURSABLE OPERATIONAL COSTS WERE ESTIMATED AT $899,543.23. LOCKHEED AIRCRAFT SERVICES--- NEW YORK, INC., QUOTED FIXED COSTS OF $71,242 FOR THE FEE AND NOTHING FOR PHASE-IN COSTS. REIMBURSABLE OPERATING COSTS WERE ESTIMATED AT $921,865.92, BASED ON A PROPOSED STAFF OF 142 EMPLOYEES. IN THE NEGOTIATION WITH LOCKHEED AIRCRAFT SERVICES IT WAS ESTIMATED THAT THE TOTAL COSTS FOR THE ENTIRE YEAR, INCLUDING FIXED FEE, WOULD BE $1,200,328.72. HOWEVER, NO CHANGE WAS MADE IN THE ORIGINAL AMOUNT OF THE FIXED COSTS OF $71,242. THE TOTAL ESTIMATED COST IS PRIMARILY FOR BUDGETARY PURPOSES, AS THE ACTUAL COST WILL DEPEND ON CIRCUMSTANCES OCCURRING DURING THE YEAR. IN THIS CONNECTION IT IS REPORTED THAT THE TOTAL COSTS FOR THE PAST YEAR WERE APPROXIMATELY $1,100,000.

THE PRIMARY CONSIDERATION IN THE AWARD OF THE CONTRACT WAS THE TECHNICAL COMPETENCE AND EXPERIENCE OF THE CONTRACTOR AND THE AMOUNT OF THE FIXED COSTS, SINCE UNDER THE TERMS OF THE CONTRACT THE GOVERNMENT HAS CONTROL OVER THE REIMBURSABLE COST ITEMS. AS HEREINBEFORE STATED, THE FIXED COSTS OF LOCKHEED AIRCRAFT SERVICES WERE $71,242 AGAINST YOUR QUOTED FIXED COSTS OF $168,766.08. THEREFORE, YOUR OFFER WAS NOT IN FACT THE LOWEST RECEIVED AND THERE IS NO BASIS TO QUESTION THE REJECTION OF YOUR OFFER BY THE FEDERAL AVIATION AGENCY.