B-155714, FEB. 3, 1965

B-155714, FEB. 3, 1965

TO THE HONORABLE SECRETARY OF THE AIR FORCE:

WE REFER TO THE LETTERS WITH ENCLOSURES FROM YOUR DEPARTMENT DATED JANUARY 15, JANUARY 25, 1965 (REFERENCE AFSPPCA) AND A MEMORANDUM SUBMITTED INFORMALLY ON JANUARY 28, 1965, IN CONNECTION WITH THE PROTEST FROM AEROSPACE SERVICES, INCORPORATED, P.O. BOX 2483, AIRPORT STATION, OAKLAND, CALIFORNIA, TO THE PROPOSED AWARD OF A CONTRACT UNDER REQUEST FOR PROPOSALS NO. 65-07510 TO OTHER THAN THAT CONCERN.

THIS RFP WAS ISSUED BY THE DIRECTORATE OF PROCUREMENT AND PRODUCTION, SACRAMENTO AIR MATERIAL AREA, MCCLELLAN AIR FORCE BASE, CALIFORNIA, FOR THE COMPLETE RECONDITIONING AND CLASS IV MODIFICATION OF 8 EACH OF T-33A-5 AND 6 EACH OF T-33A-10 AIRCRAFT. PRICES FOR THIS REQUIREMENT WERE REQUESTED BY ITEM 1 OF THE RFP. ITEM LA OF THE RFP REQUESTED PRICES FOR AN OPTIONAL ADDITIONAL QUANTITY OF UP TO 16 OF THE AIRCRAFT AND THE REQUIREMENTS UNDER THIS ITEM WERE SUBSTANTIALLY THE SAME AS ITEM 1. PRICES QUOTED FOR THE OPTIONAL ADDITIONAL QUANTITIES WERE NOT TO BE CONSIDERED IN THE EVALUATION OF PROPOSALS. WE ARE ADVISED THAT BECAUSE OF CHANGED REQUIREMENTS NO AWARD WILL BE MADE FOR THE OPTIONAL ADDITIONAL QUANTITIES.

AEROSPACE'S PROPOSAL QUOTED A PRICE FOR ITEM 1 OF $86,663 AND THE AVERAGE UNIT PRICE FOR EACH AIRCRAFT WAS $6,190. THE PRICE FOR ITEM 1 IN THE PROPOSAL SUBMITTED BY FAIRCHILD HILLER CORPORATION, AIRCRAFT SERVICES DIVISION, ST. AUGUSTINE, FLORIDA, WAS $84,437 AND THE AVERAGE UNIT PRICE FOR EACH AIRCRAFT WAS $6,031. AEROSPACE'S PROPOSAL EVALUATED AS TO PRICE PURSUANT TO THE COST FACTORS LISTED ON PAGE 12 OF THE RFP WAS $128,403. FAIRCHILD'S PROPOSAL SO EVALUATED WAS $128,905.

ON NOVEMBER 18, 1964, THE LOS ANGELES REGIONAL OFFICE OF THE SMALL BUSINESS ADMINISTRATION ISSUED A CERTIFICATE OF COMPETENCY TO AEROSPACE. THE POSITION OF YOUR DEPARTMENT IS THAT AEROSPACE SHOULD BE DETERMINED TO BE NOT RESPONSIBLE FOR REASONS OUTSIDE THE COC SUCH AS LACK OF INTEGRITY, PERSEVERANCE OR TENACITY. THE AIR FORCE FACILITY CAPABILITY SURVEY REPORT (FCR) OF NOVEMBER 3, 1964, RECOMMENDED A NEGATIVE ANSWER REGARDING THE CAPACITY OF AEROSPACE TO PERFORM A CONTRACT UNDER THIS RFP. THE ACTIVITY WHICH ISSUED THE FCR REFERRED THE MATTER TO THE SMALL BUSINESS ADMINISTRATION FOR ISSUANCE OF A COC. BASED UPON OTHER AVAILABLE INFORMATION THE CONTRACTING OFFICER SUBSEQUENTLY DETERMINED THAT AEROSPACE WAS NOT RESPONSIBLE FOR REASONS OUTSIDE THE SCOPE OF A COC.

AEROSPACE IS A NEW CORPORATION HAVING SUBSTANTIALLY THE SAME MANAGEMENT AS INTERNATIONAL ATLAS SERVICES DIVISION (IAS), FORMERLY OF THE ATLAS CORPORATION. ATLAS HAS DISCONTINUED OPERATION OF IAS. A COMPARISON OF THE FORMER MANAGEMENT OF IAS AND THE PRESENT MANAGEMENT OF AEROSPACE FURNISHED BY YOUR DEPARTMENT FOLLOWS:

TABLE

"AEROSPACE SERVICES, INC. INTERN-L. ATLAS SERVICES ROBERT J. LANG PRESIDENT AND GENERAL VICE PRESIDENT OF OPERATIONS

MANAGER H. J. BARRETT VICE PRESIDENT AND PLANT OAKLAND DIVISION MANAGER

MANAGER JOSIAH SIBLEY SECRETARY-TREASURER ASSISTANT AND PRODUCTION

PLANNING MANAGER CHARLES K. HUM PRODUCTION CONTROL MANAGER PRODUCTION PLANNING MANAGER JAMES A. THOMAS QUALITY CONTROL MANAGER QUALITY CONTROL MANAGER"

IN SUPPORT OF THE POSITION THAT AEROSPACE IS NOT RESPONSIBLE FOR REASONS OUTSIDE OF THE SCOPE OF A COC YOUR DEPARTMENT HAS BROUGHT TO OUR ATTENTION THE PERFORMANCE OF IAS UNDER CONTRACT NO. AF 04 (606/ 13007. YOUR DEPARTMENT ADVISES AS FOLLOWS:

"MANAGEMENT PERSONNEL OF AEROSPACE AS THE PREDECESSOR FIRM, INTERNATIONAL ATLAS SERVICES, IN THEIR PERFORMANCE OF CONTRACT AF 04 (606/-13007 FOR THE RECONDITIONING OF T-33 AIRCRAFT PERFORMED THE WORK CALLED FOR UNDER THE CONTRACT IN SUCH A MANNER THAT IT WAS NECESSARY TO SEND AIR FORCE TECHNICAL PERSONNEL TO THE HOST COUNTRY TO RECTIFY THE EXCESSIVE NUMBER OF DISCREPANCIES FROM CONTRACT REQUIREMENTS ON SOME OF THE AIRCRAFT. THESE DISCREPANCIES INVOLVED INADEQUATE WIRING, PATCHING, FITTINGS, RIVETING, AS WELL AS OTHER DEFICIENCIES. THIS IS THE ONLY SITUATION OF THIS TYPE ON RECORD CONCERNING T-33 AIRCRAFT, WITH ONE EXCEPTION, WHEN IT WAS NECESSARY TO SEND A TECHNICIAN TO ANOTHER MILITARY ASSISTANCE COUNTRY TO ACCOMPLISH A MINOR ADJUSTMENT REGARDING THE WORK PERFORMED ON A T-33 AIRCRAFT BY ANOTHER CONTRACTOR. DISPATCHING AIR FORCE TECHNICAL PERSONNEL TO HOST COUNTRIES TO CORRECT CONTRACTOR DEFICIENCIES ON WORK OF THIS TYPE IS A RARE AND UNUSUAL ACTION ON THE PART OF THE AIR FORCE.'

ALSO, YOUR DEPARTMENT HAS BROUGHT TO OUR ATTENTION THE PERFORMANCE OF IAS UNDER CONTRACT NO. AF 04 (606/-126040, THE "HIRE WIRE" PROJECT FOR THE RECONDITIONING OF F-100 AIRCRAFT. WE ARE ADVISED THAT THIS CONTRACT WITH IAS WAS TERMINATED FOR DEFAULT AND THAT NUMEROUS DEFICIENCIES WERE FOUND ON MANY OF THE AIRCRAFT WHICH HAD BEEN DELIVERED PRIOR TO THE TERMINATION.

SBA HAS ADVISED THAT THE RECORD OF THE FACILITY ADVISORY BOARD ACTION, DEPARTMENT OF THE AIR FORCE, DATED OCTOBER 27, 1964, FURNISHED BY YOUR DEPARTMENT TO THAT AGENCY IN CONNECTION WITH THE SUBMISSION FOR A COC, INDICATED THAT THE F-100 PROGRAM WITH IAS WAS DEFAULTED BUT THAT THE T-33 AND C-121 PROGRAMS WITH IAS WERE SATISFACTORILY COMPLETED ON SCHEDULE.

YOUR DEPARTMENT ADVISES THAT THIS PROCUREMENT IS URGENTLY REQUIRED TO FULFILL THE NEEDS OF MILITARY ASSISTANCE PROGRAM COUNTRIES AND THAT AWARD WILL NOT BE MADE UNTIL AEROSPACE'S PROTEST HAS BEEN RESOLVED BY OUR OFFICE.

THE COC ISSUED BY THE SMALL BUSINESS ADMINISTRATION PURSUANT TO THE STATUTE IS RECOGNIZED BY THE ARMED SERVICES PROCUREMENT REGULATION 1 705.4 (A), AS CONCLUSIVE ON THE CONTRACTING OFFICER WITH RESPECT TO A BIDDER'S OVERALL ABILITY TO MEET QUALITY, QUANTITY, AND TIME REQUIREMENTS OF THE PROCUREMENT INCLUDING ABILITY TO PERFORM, ORGANIZATION, TECHNICAL EXPERIENCE, KNOWLEDGE, SKILLS,"KNOW-HOW," TECHNICAL EQUIPMENT AND FACILITIES OR THE ABILITY TO OBTAIN THEM. SEE 38 COMP. GEN. 864. RECORD OF PAST DELINQUENCIES OR DEFAULTS BY A COMPANY TO WHOM A COC HAD BEEN ISSUED WOULD PROVIDE NO BASIS FOR REFUSING TO MAKE AN AWARD IF SUCH DELINQUENCIES OR DEFAULTS WERE DUE TO FACTORS INCLUDED IN CAPACITY OR CREDIT. SEE 38 COMP. GEN. 289.

IN 43 COMP. GEN. 257, 262, WE STATED:

"* * * WHERE A COC HAS BEEN ISSUED, A DETERMINATION OF NONRESPONSIBILITY BECAUSE OF FACTORS NOT INCLUDED IN THE COC MUST BE SUPPORTED BY SUBSTANTIAL EVIDENCE TO ESTABLISH NOT ONLY THAT A SITUATION EXISTS TO JUSTIFY THE DETERMINATION BUT THAT THE SITUATION RESULTS FROM SUCH FACTORS AS LACK OF INTEGRITY, TENACITY OR PERSEVERANCE.'

WE STATED IN 43 COMP. GEN. 298, 300:

"THE CERTIFICATION AUTHORITY OF THE SMALL BUSINESS ADMINISTRATION WAS INTENDED TO SIGNIFICANTLY LIMIT THE AUTHORITY OF THE CONTRACTING OFFICER IN DETERMINING THE RESPONSIBILITY OF A SMALL BUSINESS BIDDER. WE DO NOT THINK SUCH LIMITATION CAN BE OVERCOME BY SIMPLY CONCLUDING THAT THE REASONS FOR THE CONTRACTING OFFICER'S NEGATIVE DETERMINATION BELONG IN THE CATEGORY OF FACTORS WHICH WOULD NOT BE COVERED BY THE SBA CERTIFICATION.'

PURSUANT TO OUR REVIEW OF THE MATTER WE FIND THAT THE INFORMATION SUBMITTED BY YOUR DEPARTMENT IS NOT SUFFICIENT TO SUPPORT A DETERMINATION THAT AEROSPACE IS NOT RESPONSIBLE BECAUSE OF LACK OF INTEGRITY, PERSEVERANCE OR TENACITY TO PERFORM. IN THIS CONNECTION THE RECORD AS PRESENTED DOES NOT SHOW THAT THE DEFICIENCIES ON THE T 33 AIRCRAFT DELIVERED UNDER CONTRACT NO. AF 04 (606/-13007 WERE DUE TO LACK OF INTEGRITY OR PERSEVERANCE OR TENACITY RATHER THAN DUE TO SOME FACTOR RELATED TO CAPACITY OR CREDIT. WITH RESPECT TO THE F-100 "HIRE WIRE" PROJECT WITH IAS UNDER CONTRACT NO. AF 04 (606/-126040, WE HAVE MANY RESERVATIONS WHETHER THE DEFAULT AND DEFICIENCIES UNDER THIS CONTRACT WERE ATTRIBUTABLE TO LACK OF INTEGRITY OR PERSEVERANCE OR TENACITY TO PERFORM ON THE PART OF IAS OR SOME FACTOR RELATED TO CAPACITY AND CREDIT. IT HAS NOT BEEN SHOWN THAT IAS DELIVERED ANY F 100 AIRCRAFT WITHOUT DEFICIENCIES UNDER CONTRACT NO. AF 04 (606/ 126040 NOR HAS IT BEEN SHOWN THAT IAS EVER SUCCESSFULLY COMPLETED A CONTRACT FOR THE RECONDITIONING OF F-100 AIRCRAFT. THE APPARENT DIFFERENCE IN COMPLEXITY IN MANY OF THE OPERATIONS IN THE RECONDITIONING OF A F-100 AIRCRAFT COMPARED TO THE RECONDITIONING OF A T-33 AIRCRAFT IS ALSO SOME INDICATION THAT THE DEFICIENCIES UNDER THE F-100 CONTRACT MAY HAVE BEEN ATTRIBUTABLE TO LACK OF CAPACITY RATHER THAN LACK OF INTEGRITY, PERSEVERANCE OR TENACITY.

IN VIEW OF THE URGENCY OF THIS PROCUREMENT THERE IS NOT SUFFICIENT TIME FOR THE DEVELOPMENT OF ALL OF THE INFORMATION WHICH MAY BE RELEVANT TO THIS MATTER. IF THERE WERE SUFFICIENT TIME WE WOULD HAVE REQUESTED AND REVIEWED A FULL REPORT ON THIS MATTER FROM SBA. OF COURSE, OUR DECISION MUST BE PREDICATED ON THE RECORD PRESENTED AND WE CANNOT SPECULATE WHAT OUR DECISION MIGHT HAVE BEEN IF ALL PERTINENT INFORMATION WERE BEFORE OUR OFFICE FOR CONSIDERATION. HOWEVER, THE MATTERS WHICH YOUR DEPARTMENT HAS BROUGHT TO OUR ATTENTION INDICATE THAT FURTHER DEVELOPMENT OF CERTAIN ASPECTS OF THE FILE MIGHT HAVE DISCLOSED ADDITIONAL INFORMATION FAVORABLE TO YOUR POSITION. THESE ASPECTS OF THE CASE WERE INFORMALLY DISCUSSED WITH YOUR REPRESENTATIVES.

IN VIEW OF THE MANNER IN WHICH THIS MATTER WAS SUBMITTED TO SBA FOR ISSUANCE OF A COC AND THE REQUIREMENTS SET FORTH IN ASPR 1-705.4, WE SUGGEST A REVIEW OF THE INTERNAL PROCEDURES OF YOUR DEPARTMENT REGARDING THE SUBMISSION OF COC MATTERS TO SBA. IN THIS CONNECTION ASPR 1-705.4 (B) INDICATES THAT ALL MATTERS REGARDING RESPONSIBILITY WHICH DO NOT RELATE TO CAPACITY OR CREDIT SHOULD BE SETTLED BEFORE THE MATTER IS REFERRED TO SBA FOR ISSUANCE OF A COC.

THE FILE TRANSMITTED WITH THE LETTERS OF JANUARY 15 AND JANUARY 25, 1965, IS RETURNED.