B-165012, OCT. 11, 1968

B-165012, OCT. 11, 1968

TO GARY AIRCRAFT CORPORATION:

REFERENCE IS MADE TO YOUR TELEGRAM OF AUGUST 8, 1968, AND LETTER OF SEPTEMBER 23, 1968, PROTESTING AGAINST THE CANCELLATION OF REQUEST FOR PROPOSALS (RFP) NO. F41608-68-R-4432, DATED MARCH 19, 1968, AND THE ISSUANCE OF A SUPERSEDING RFP NO. F41608-69-R-4090, DATED AUGUST 9, 1968, BY THE DIRECTORATE, PROCUREMENT AND PRODUCTION, SAN ANTONIO AIR MATERIEL AREA, KELLY AIR FORCE BASE, TEXAS. THE SUBSTANCE OF YOUR PROTEST IS THAT YOU SUBMITTED THE LOWEST PROPOSAL ON THE ORIGINAL SOLICITATION AND THAT THERE WAS NO JUSTIFICATION FOR THE CANCELLATION AND THE SUBSEQUENT NEW SOLICITATION.

THE PROCUREMENT INVOLVES THE PERFORMANCE OF THE GOVERNMENT'S REQUIREMENTS FOR OVERHAUL OF AN INDEFINITE QUANTITY OF R-3350 PISTON TYPE ENGINES DURING THE TIME PERIOD SPECIFIED. THE FIRST SOLICITATION, VIA AN AMENDMENT DATED JUNE 3, 1968, STATED THAT WITH A MINIMUM OF 100 ENGINES, THE BEST ESTIMATED QUANTITY FOR THE 15-MONTH CONTRACT PERIOD WAS 397 ENGINES, AND THAT THE CONTRACT WOULD CONTAIN A 90-DAY OPTION CLAUSE COVERING AN ADDITIONAL MINIMUM QUANTITY OF 20 ENGINES PER MONTH AND A MAXIMUM OF 65 ENGINES PER MONTH.

GARY AIRCRAFT CORPORATION SUBMITTED THE LOWEST PRICED PROPOSAL OF THE SIX PROPOSALS RECEIVED. A PRE-AWARD SURVEY DATED JULY 18, 1968, RECOMMENDED AWARD TO GARY AIRCRAFT CORPORATION BUT CONTAINED THE FOLLOWING STATEMENT:

"IN EVENT OF AWARD AND INCREASE OF DELIVERY REQUIREMENT ABOVE THE RECOMMENDED QUANTITY, IT IS REQUESTED THAT A REASSESSMENT OF THE CONTRACTOR'S CAPABILITY BE MADE TO AFFORD A DETERMINATION OF AVAILABILITY OF ADEQUATE RESOURCES NOT LIMITED TO, BUT SPECIFICALLY INCLUDING MANPOWER BEFORE REQUIREMENTS ARE IMPOSED. MOREOVER, IN REGARD TO 90-DAY OPTION QUANTITY NOT TO EXCEED 65 ENGINES PER MONTH, IT IS OUR CONSIDERED OPINION BIDDER CANNOT MEET THE LEVEL OF PRODUCTION UNTIL APPROXIMATELY DECEMBER 1969.'

THE CONTRACTING OFFICER ON AUGUST 9, 1968, NOTIFIED ALL PARTIES SUBMITTING PROPOSALS THAT THE FIRST SOLICITATION WAS CANCELLED AND SUPERSEDED BY THE RFP DATED AUGUST 9, 1968. THIS SOLICITATION STATED THAT THE BEST ESTIMATED QUANTITY FOR A SPECIFIED 13-MONTH CONTRACT PERIOD WAS 697 ENGINES.

ASSUMING POSSIBLE FULL CONVERSION OF THE OPTION IN THE FIRST SOLICITATION AS TO THE OUTPUT MAXIMUM, THE TWO REQUESTS FOR PROPOSALS AS REPORTED TO THIS OFFICE, CAN BE COMPARED AS FOLLOWS:

OUTPUT OUTPUT BEST

MINIMUM MAXIMUM ESTIMATED QUANTITY F41608-68-R-4432 100 975 397F41608-69- R-4090 197 774 697

YOU CLAIM THAT CANCELLATION OF THE FIRST SOLICITATION WAS UNNECESSARY IN THAT THERE IS NOT A SIGNIFICANT DIFFERENCE IN SCHEDULING OF THE ENGINES ON THE NEW SOLICITATION FROM THE STANDPOINT OF PERCENTAGE INCREASE OF WORK AT THE CONTRACTOR'S PRODUCTION FACILITY, AND WITHOUT SOME POSITIVE COMMITMENT AS TO A LARGER MINIMUM NUMBER OF ENGINES IT IS NOT LOGICAL TO EXPECT THAT A CHANGE IN PRICING WOULD BE SUBMITTED BY ANY BIDDER MERELY BECAUSE THE POSSIBLE MAXIMUM QUANTITY ON AN INDEFINITE QUANTITY CONTRACT HAD BEEN INCREASED.

IT IS REPORTED BY THE ADMINISTRATIVE AGENCY THAT THE R-3350 ENGINE IS CRITICAL IN THAT IT IS USED ON SOUTHEAST ASIAN ACTIVE C119/CRC121 AIRCRAFT. THE CONTRACTING OFFICER, AFTER THE RECEIPT OF THE PRE-AWARD SURVEY AND PRIOR TO THE AWARD OF THE PROPOSED PROCUREMENT, WAS ADVISED THAT THE DELIVERY SCHEDULE ESTABLISHED IN THE SOLICITATION FOR THESE ENGINES WOULD NOT SUPPORT THE AIR FORCE'S PRODUCTION NEEDS, BY REASON OF A SUDDEN INCREASE IN REQUIREMENTS THAT WOULD INVOLVE THE POSSIBILITY OF SHIPMENTS AS HIGH AS 95 ENGINES PER MONTH DUE TO A DOUBLING OF THE PREVIOUS FORECAST OF ESTIMATED FLYING HOURS BY THE ADDITION OF A TOTALLY NEW PROGRAM IN SUPPORT OF SOUTHEAST ASIA. IT IS NOTED THAT THE INCUMBENT CONTRACTOR UNDER A SIMILAR CONTRACT FOR THE IMMEDIATELY PRECEDING PERIOD HAD REFUSED TO ACCEPT ANY ADDITIONAL ENGINES.

ARMED SERVICES PROCUREMENT REGULATION (ASPR) 3-805.1 (E), RELATING TO THE SELECTION OF OFFERORS FOR NEGOTIATION AND AWARD, READS IN PERTINENT PART AS FOLLOWS:

"/E) WHEN, DURING NEGOTIATIONS, A SUBSTANTIAL CHANGE OCCURS IN THE GOVERNMENT'S REQUIREMENTS OR A DECISION IS REACHED TO RELAX, INCREASE OR OTHERWISE MODIFY THE SCOPE OF THE WORK OR STATEMENT OF REQUIREMENTS, SUCH CHANGE OR MODIFICATION SHALL BE MADE IN WRITING AS AN AMENDMENT TO THE REQUEST FOR PROPOSAL OR REQUEST FOR QUOTATIONS, AND A COPY SHALL BE FURNISHED TO EACH PROSPECTIVE CONTRACTOR.'

THERE SHOULD BE NO QUESTION THAT CHANGING THE REQUIREMENTS FROM AN OUTPUT MINIMUM OF 100 TO 197 ENGINES, AND THE POSSIBLE MONTHLY OUTPUT MAXIMUM FROM 65 TO 95 ENGINES, WITH THE BEST ESTIMATED QUANTITY INCREASING FROM 397 TO 697 ENGINES, IS A SUBSTANTIAL CHANGE IN THE GOVERNMENT'S REQUIREMENT. THEREFORE, THE CONTRACTING OFFICER WAS REQUIRED BY THE CITED ASPR TO AMEND THE REQUEST FOR PROPOSALS AND FURNISH A COPY TO EACH PROSPECTIVE CONTRACTOR. B-151886, AUGUST 16, 1963. IN THIS CASE WE SEE NO BASIS FOR CONSIDERING THE CANCELLATION OF THE ORIGINAL SOLICITATION AND THE ISSUANCE OF A REPLACEMENT AS DIFFERING IN ANY SUBSTANTIAL OR MATERIAL WAY FROM THE ISSUANCE OF THE SAME REVISED SOLICITATION IN THE FORM OF AN AMENDMENT TO THE ORIGINAL.

YOUR CLAIM THAT THE SCHEDULING UNDER THE NEW SOLICITATION IS NOT A SIGNIFICANT DIFFERENCE FROM THE STANDPOINT OF PERCENTAGE INCREASE IN WORK AT A CONTRACTOR'S PRODUCTION FACILITY, IGNORES THE SUBSTANTIAL CHANGE IN THE GOVERNMENT'S REQUIREMENTS CONCERNING THE ENGINES, PARTICULARLY WITH RESPECT TO THE POSSIBLE MAXIMUM MONTHLY PERFORMANCE RATE.

WHETHER OR NOT YOU ARE CORRECT IN YOUR CONTENTION THAT IT IS NOT LOGICAL TO EXPECT THAT A CHANGE IN PRICING WOULD BE SUBMITTED BY ANY BIDDER MERELY BECAUSE THE POSSIBLE MAXIMUM QUANTITY ON AN INDEFINITE QUANTITY CONTRACT HAD BEEN INCREASED IN THE ABSENCE OF A POSITIVE COMMITMENT TO A HIGH NUMBER OF ENGINES, ASPR 3-805.1 (E) REQUIRED THE CONTRACTING OFFICER TO SEEK NEW PROPOSALS ON THE BASIS OF THE SUBSTANTIAL CHANGE IN THE GOVERNMENT REQUIREMENTS.

SINCE IT IS OUR FEELING THAT THE CONTRACTING OFFICER WAS CORRECT IN REQUESTING NEW PROPOSALS, YOUR CONTENTIONS AS TO THE LACK OF JUSTIFICATION FOR THE SURVEY TEAM'S STATEMENT AS TO YOUR INABILITY TO MEET A SCHEDULE OF 65 ENGINES PER MONTH IS NOW UNTIMELY, IN THAT A NEW PREAWARD SURVEY AND FINDING WILL BE REQUIRED UNDER THE REVISED SOLICITATION.

YOUR STATEMENT THAT YOU NOW HAVE FOUR ENGINES OF THIS MODEL IN YOUR PLANT AND ARE PRESENTLY SETTING UP AN OVERHAUL AND PRODUCTION LINE SO THAT YOU WILL BE IN A POSITION TO MOVE WHEN THE AIR FORCE ENGINES ARE MADE AVAILABLE, EFFECTIVELY ANSWERS YOUR COMPLAINT THAT THE NEW SOLICITATION AUTOMATICALLY RULES OUT ANYONE BUT THE INCUMBENT CONTRACTOR BECAUSE THERE WOULD BE INSUFFICIENT TIME TO SET A PRODUCTION LINE AND CALIBRATE TEST CELLS.

FOR ALL OF THE ABOVE REASONS, WE CONCLUDE THAT NO LEGAL BASIS EXISTS FOR OBJECTING TO THE PROCUREMENT ACTION TAKEN BY THE AIR FORCE IN THIS CASE AND YOUR PROTEST MUST THEREFORE BE DENIED.