B-149351, NOV. 5, 1962

B-149351, NOV. 5, 1962

TO CYRIL L. WESTON, ESQUIRE:

REFERENCE IS MADE TO THE BRIEF THAT YOU SUBMITTED IN PERSON ON OCTOBER 8, 1962, AND TO PRIOR CORRESPONDENCE CONCERNING THE PROTEST OF QUAKER FABRICATORS, INC., UNDER RFB 36-600-62-5337.

THE SUBJECT REQUEST FOR PROPOSALS, ISSUED ON JANUARY 17, 1962, BY THE MIDDLETOWN AIR MATERIEL AREA, OLMSTED AIR FORCE BASE, MIDDLETOWN, PENNSYLVANIA, SOLICITED OFFERS FOR FURNISHING SERVICES AND SUPPLIES, AS CALLED FOR BY THE GOVERNMENT DURING THE LIFE OF THE CONTRACT, FOR THE OVERHAULING AND REINSPECTION OF CERTAIN AUTOMATIC PILOT COMPONENTS. TEN COMPLETE PROPOSALS WERE RECEIVED AND WERE EVALUATED ON JANUARY 30, 1962. QUAKER FABRICATORS, INC., WAS DETERMINED TO HAVE SUBMITTED THE LOWEST PROPOSAL. ON THE SAME DAY, FOLLOWING THE EVALUATION OF PROPOSALS, THE PHILADELPHIA CONTRACT MANAGEMENT DISTRICT WAS REQUESTED TO SURVEY THE QUAKER FABRICATORS FACILITIES TO DETERMINE WHETHER IT WAS CAPABLE OF PERFORMING THE WORK REQUIRED BY THE REQUEST FOR PROPOSALS. A FAVORABLE REPORT, DATED FEBRUARY 8, 1962, WAS RECEIVED BY THE CONTRACTING OFFICER ON FEBRUARY 12, 1962. UPON RECEIPT OF THE REPORT, FURTHER ACTION WAS TAKEN TO COMPLETE THE PROCUREMENT ACTION. AT THIS TIME, CONTRACTING PERSONNEL OBSERVED THAT THE QUAKER FABRICATORS PROPOSAL WAS SIGNED BY A MR. C. W. ETTENGER AS VICE PRESIDENT. SINCE A COLONEL ETTENGER HAD RECENTLY RETIRED FROM ACTIVE SERVICE AS A REGULAR AIR FORCE OFFICER, INQUIRIES WERE MADE TO THE OFFICE OF MILITARY PERSONNEL AT OLMSTED AIR FORCE BASE WHICH DISCLOSED THAT MR. ETTENGER WHO SIGNED THE PROPOSAL AND COLONEL ETTENGER WHO HAD RECENTLY RETIRED WERE ONE AND THE SAME PERSON.

ON THE BASIS OF THIS INFORMATION, A POSSIBLE VIOLATION BY COLONEL ETTENGER OF AIR FORCE REGULATION 30-30, PERTAINING TO CONFLICT OF INTEREST, WAS INDICATED. THE CONTRACTING OFFICER, THEREFORE, REQUESTED A RULING FROM THE STAFF JUDGE ADVOCATE AT THE BASE AS TO WHETHER THE PROPOSAL RECEIVED FROM QUAKER FABRICATORS COULD BE CONSIDERED FOR AWARD. THE CONTRACTING OFFICER WAS ADVISED THAT THE PROPOSAL WAS ILLEGAL AND SHOULD BE DISREGARDED. HE WAS FURTHER ADVISED TO PROCEED WITH THE AWARD ON THE BASIS OF THE OTHER PROPOSALS RECEIVED AND HE ACTED ACCORDINGLY.

THE CONTRACTING AGENCY HAS RELIED UPON 18 U.S.C. 281, DOD DIRECTIVE 5500.7, DATED DECEMBER 12, 1961, AND AIR FORCE REGULATION 30-30, DATED FEBRUARY 6, 1962, FOR THE ACTION TAKEN. IT HAS STATED THAT 18 U.S.C. 281 PROHIBITS A RETIRED REGULAR OFFICER FROM REPRESENTING ANY PERSON IN THE SALE OF ANYTHING TO THE GOVERNMENT THROUGH THE DEPARTMENT IN WHOSE SERVICE HE HOLDS A RETIRED STATUS. IT HAS STATED FURTHER THAT THE STATUTORY PROHIBITION ON RETIRED REGULAR OFFICERS IS INCLUDED IN THE DOD DIRECTIVE AND THE AIR FORCE REGULATION CITED. FURTHER, IT POINTS TO THE SPECIFIC RESTRICTIONS IN PARAGRAPHS 16 AND 8 OF THE AIR FORCE REGULATION. PARAGRAPH 16B PROVIDES:

"B. SELLING OR CONTRACTING FOR SALE. NO REGULAR RETIRED AIR FORCE OFFICER WILL SELL, CONTRACT FOR THE SALE OF, OR NEGOTIATE FOR THE SALE OF ANYTHING TO THE AIR FORCE AT ANY TIME. * * * FOR THE PURPOSE OF THIS PARAGRAPH,"SELLING" MEANS:

(1) SIGNING A BID, PROPOSAL, OR CONTRACT, * * *"

PARAGRAPH 8 PROVIDES:

"8. POLICY ON DEALING WITH PRESENT AND FORMER MILITARY AND CIVILIAN PERSONNEL. AIR FORCE PERSONNEL WILL NOT KNOWINGLY DEAL WITH MILITARY OR CIVILIAN PERSONNEL, OR FORMER MILITARY OR CIVILIAN PERSONNEL OF THE GOVERNMENT, IF SUCH ACTION WILL RESULT IN A VIOLATION OF A STATUTE OR POLICY SET FORTH IN THIS REGULATION.'

YOU HAVE PROTESTED THE ACTION TAKEN BY THE CONTRACTING AGENCY BECAUSE YOU BELIEVE THAT IT WAS ARBITRARY AND CAPRICIOUS. YOU CONTEND THAT THE PURPOSE OF 18 U.S.C. 281 IS TO PREVENT RETIRED OFFICERS FROM EXERTING INFLUENCE UPON THE DETERMINATIONS OF GOVERNMENT OFFICERS AND THAT SUCH PURPOSE WAS NOT ABUSED IN THAT THE PROCUREMENT OFFICIALS HAD DECIDED TO MAKE AN AWARD TO QUAKER FABRICATORS BEFORE THEY WERE AWARE OF MR. ETTENGER'S RETIRED STATUS IN THE AIR FORCE. YOU, THEREFORE, CONTEND THAT THE DENIAL OF A CONTRACT WAS IMPROPER AND THAT THE PROTESTANT SHOULD BE ALLOWED TO RECOVER THE EXPENSE SUSTAINED THEREBY.

WE DO NOT FIND THAT THE ACTION TAKEN BY THE CONTRACTING OFFICER IN DENYING AN AWARD TO QUAKER FABRICATORS WAS EITHER ARBITRARY OR CAPRICIOUS, SINCE THE ACTION WAS TAKEN ONLY AFTER CONSULTATION WITH MILITARY COUNSEL AND IN THE BELIEF THAT IT WAS REQUIRED, IF NOT PRESCRIBED, BY THE STATUTE AND REGULATIONS CITED. WHILE IT MAY BE THAT THE PURPOSE OF THE STATUTE INVOLVED IS TO PRECLUDE AWARDS IN SITUATIONS WHERE UNDUE INFLUENCE IS MANIFEST, IT IS NOT A CONDITION OF THE PROHIBITION IN THE STATUTE THAT THE RETIRED OFFICER MUST BE SHOWN TO HAVE EXERTED UNDUE INFLUENCE. THEREFORE, WE CANNOT PROPERLY SAY THAT THE ADMINISTRATIVE INTERPRETATION OF THE STATUTE OR THE REGULATIONS BASED UPON THE STATUTE WAS TOTALLY INCORRECT OR WITHOUT SOME FOUNDATION. FURTHER, IT IS TO BE NOTED THAT THE SUBJECT PROCUREMENT WAS A NEGOTIATED PROCUREMENT WHICH IS NOT CONTROLLED BY THE ADVERTISING STATUTES THAT ORDINARILY REQUIRE THE AWARD TO BE MADE TO THE LOWEST BIDDER. IN THE CIRCUMSTANCES, WE HAVE NO ALTERNATIVE BUT TO FOLLOW THE ADMINISTRATIVE RECOMMENDATION THAT THE ..END :