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B-157734, JAN. 4, 1966

B-157734 Jan 04, 1966
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TO THE COSMODYNE CORPORATION: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED SEPTEMBER 29. IT IS YOUR CONTENTION THAT CRYO SONICS. DOES NOT HAVE THE FACILITIES OR THE TECHNICALLY EXPERIENCED PERSONNEL TO PERFORM THE HIGHLY SPECIALIZED PROCESS SYSTEM ENGINEERING. LETTER REQUEST FOR PROPOSALS SA-5-16333 WAS ISSUED MAY 11. THE REQUIREMENT WAS FOR MODIFICATION OF 29 TRAILER MOUNTED. THE MODIFIED PLANTS ARE FOR USE TO SUPPLY BREATHING OXYGEN FOR PILOTS IN SOUTHEAST ASIA. FOUR TECHNICAL PROPOSALS WERE RECEIVED WHICH WERE ACCEPTABLE CONTINGENT UPON MINOR CORRECTIONS. THE TOTAL REQUIREMENT WAS UPGRADED TO EMERGENCY PRIORITY STATUS UNDER PERTINENT AUTHORITY. AS DELIVERY AT THAT POINT HAD BECOME PARAMOUNT THE DECISION WAS MADE TO REMOVE THE SMALL BUSINESS SET-ASIDE DESIGNATION AND ABANDON TWO-STEP PROCEDURES IN FAVOR OF COMPETITIVE NEGOTIATION WITH THE FOUR FIRMS WHICH HAD SUBMITTED CONDITIONALLY ACCEPTABLE TECHNICAL PROPOSALS AS WELL AS THE ORIGINAL EQUIPMENT MANUFACTURER.

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B-157734, JAN. 4, 1966

TO THE COSMODYNE CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED SEPTEMBER 29, 1965, PROTESTING AWARD OF A CONTRACT TO CRYO-SONICS, INC., BY THE DEPARTMENT OF THE AIR FORCE AFTER NEGOTIATION SUBSEQUENT TO WITHDRAWAL OF REQUEST FOR PROPOSALS SA-5-16333. IT IS YOUR CONTENTION THAT CRYO SONICS, INC., DOES NOT HAVE THE FACILITIES OR THE TECHNICALLY EXPERIENCED PERSONNEL TO PERFORM THE HIGHLY SPECIALIZED PROCESS SYSTEM ENGINEERING, MANUFACTURING AND TESTING WORK REQUIRED TO INSURE THE TIMELY EXECUTION OF THIS PROGRAM.

LETTER REQUEST FOR PROPOSALS SA-5-16333 WAS ISSUED MAY 11, 1965, AND SUBSEQUENTLY AMENDED WITH FINAL DATE FOR RECEIPT OF PROPOSALS SET AT JUNE 22, 1965. THE REQUIREMENT WAS FOR MODIFICATION OF 29 TRAILER MOUNTED, 1- TON-PER-DAY CAPACITY, LIQUID OXYGEN-NITROGEN (LOX/LIN) GENERATING PLANTS TO A SKID MOUNTED 1 1/2 TON CONFIGURATION. THE MODIFIED PLANTS ARE FOR USE TO SUPPLY BREATHING OXYGEN FOR PILOTS IN SOUTHEAST ASIA. FOUR TECHNICAL PROPOSALS WERE RECEIVED WHICH WERE ACCEPTABLE CONTINGENT UPON MINOR CORRECTIONS. ON JULY 19, 1965, THE TOTAL REQUIREMENT WAS UPGRADED TO EMERGENCY PRIORITY STATUS UNDER PERTINENT AUTHORITY.

SINCE THE REQUIREMENT HAS BEEN DESIGNATED AN EMERGENCY, TIME DID NOT PERMIT THE DELAYS NECESSARY TO CORRECT DISCREPANT TECHNICAL PROPOSALS PRIOR TO INITIATION OF THE SECOND STEP OF THE PROCUREMENT, THUS THE PROCUREMENT NO LONGER MET THE MINIMUM CONDITIONS FOR USE OF TWO-STEP FORMAL ADVERTISING PROCEDURES PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-502. AS DELIVERY AT THAT POINT HAD BECOME PARAMOUNT THE DECISION WAS MADE TO REMOVE THE SMALL BUSINESS SET-ASIDE DESIGNATION AND ABANDON TWO-STEP PROCEDURES IN FAVOR OF COMPETITIVE NEGOTIATION WITH THE FOUR FIRMS WHICH HAD SUBMITTED CONDITIONALLY ACCEPTABLE TECHNICAL PROPOSALS AS WELL AS THE ORIGINAL EQUIPMENT MANUFACTURER, A LARGE BUSINESS FIRM. A TELEGRAPHIC REQUEST FOR PROPOSALS WAS TRANSMITTED TO THE FIVE SOURCES ON JULY 21, AND AMENDED JULY 23, 1965, BY LETTER EXTENDING TIME FOR RECEIPT OF PROPOSALS TO JULY 29, 1965.

PROPOSALS WERE RECEIVED FROM YOUR COMPANY, FROM CRYO-SONICS, INC., PROJECT FABRICATION CORPORATION, AIR PRODUCTS AND CHEMICALS, INC., AND GAS EQUIPMENT ENGINEERING CORPORATION. THE TWO LOW OFFERORS, CRYO SONICS AND AIR PRODUCTS AND CHEMICALS WERE RESOLICITED FOR A FINAL ,BEST-EFFORT" OFFER IN SEPTEMBER 1965, AND ALTHOUGH AIR PRODUCTS AND CHEMICALS NOW HAD OFFERED THE LOWEST PRICE ITS DELIVERY SCHEDULE WAS NOT SUBSTANTIALLY IMPROVED AND WAS NOT ACCEPTABLE TO THE INITIATING ACTIVITY.

A COMPLETE FACILITY CAPABILITY REPORT (FCR) WAS OBTAINED ON CRYO SONICS, INC., THE SECOND LOW OFFEROR, WHICH OFFERED AN ACCEPTABLE DELIVERY SCHEDULE, WITH REPRESENTATIVES OF THE PROCURING ACTIVITY PARTICIPATING. THE FCR WAS AFFIRMATIVE AND THE CONTRACT WAS AWARDED TO CRYO-SONICS ON SEPTEMBER 21, 1965.

THE DEPARTMENT OF THE AIR FORCE CONCLUDED THAT UPON THE BASIS OF THE INFORMATION OBTAINED AS A RESULT OF THE FCR, CRYO-SONICS, INC., MET THE MINIMUM STANDARDS FOR RESPONSIBLE PROSPECTIVE CONTRACTORS SET FORTH IN ASPR 1-903. ADDITIONALLY, THE TECHNICAL PROPOSAL SUBMITTED BY CRYO-SONICS AS A RESULT OF THE ORIGINAL TWO-STEP PROCEDURE WAS THOROUGHLY REVIEWED BY SAN ANTONIO AIR MATERIEL AREA PERSONNEL, AND IT IS REPORTED THAT THE PROPOSAL INDICATED A CLEAR UNDERSTANDING OF THE TASK REQUIRED AND A COMPREHENSIVE APPROACH TO THE COMPLETION OF THAT TASK WHICH COULD ONLY HAVE BEEN COMPILED BY PERSONNEL WITH A THOROUGH KNOWLEDGE OF CRYOGENICS.

THE RESPONSIBILITY AND QUALIFICATIONS OF A PROPOSED CONTRACTOR INVOLVE QUESTIONS OF FACT WHICH ARE PRIMARILY FOR DETERMINATION BY THE CONTRACTING AGENCY AND ARE NOT QUESTIONED BY THIS OFFICE IN THE ABSENCE OF A SHOWING OF BAD FAITH OR LACK OF A REASONABLE BASIS FOR THE DETERMINATION. COMP. GEN. 131; 37 COMP. GEN. 430; ID. 798. ON THE BASIS OF ALL THE INFORMATION OF RECORD WE ARE UNABLE TO CONCLUDE THAT THE CONTRACTING OFFICER'S DETERMINATION OF RESPONSIBILITY WAS UNREASONABLE OR WITHOUT SUBSTANTIAL SUPPORT. FURTHER, NO BAD FAITH OR OTHER IMPROPRIETY IN MAKING THE AWARD HAS BEEN SHOWN OR ALLEGED. SUCH A DETERMINATION INVOLVES THE EXERCISE OF A CONSIDERABLE RANGE OF DISCRETION AND IN THE LIGHT OF THE FACTS PRESENTED, WE DO NOT FEEL THAT THERE WOULD BE ANY LEGAL JUSTIFICATION FOR OBJECTION BY OUR OFFICE TO THE ACTION TAKEN BY THE ADMINISTRATIVE OFFICE IN THE MATTER.

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