B-165570, MAR. 24, 1969

B-165570, MAR. 24, 1969

TO S.M.S. INSTRUMENTS, INCORPORATED:

REFERENCE IS MADE TO THE LETTERS OF NOVEMBER 1, 1968, NOVEMBER 11, 1968, JANUARY 2, 1969, AND FEBRUARY 14, 1969, PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANOTHER CONCERN UNDER REQUEST FOR PROPOSALS (RFP) NO. F41608- 68-R-2875, ISSUED ON APRIL 23, 1968, BY KELLY AIR FORCE BASE FOR THE REPAIR AND OR OVERHAUL OF AN INDEFINITE QUANTITY OF DRIVE GEARBOXES FOR THE T-38 AND F-5 AIRCRAFT AND APPLICABLE DATA.

THE LETTER OF NOVEMBER 1, 1968, REQUESTS THAT OUR OFFICE REVIEW WHETHER THE PROCUREMENT PROCEDURES WERE IN ACCORDANCE WITH APPLICABLE LAW AND REGULATIONS. THE LETTER OF NOVEMBER 11, 1968,QUESTIONS WHETHER IT WAS PROPER FOR THE PROCURING ACTIVITY TO MAKE AN AWARD WHILE YOUR PROTEST WAS PENDING WITH THIS OFFICE. IN THE LETTER OF JANUARY 2, 1969, THE CONTENTION IS MADE THAT THE CONTRACTOR, MISSOURI RESEARCH LABORATORIES, INCORPORATED (MRL), WILL NOT BE ABLE TO ACQUIRE THE NECESSARY TESTING EQUIPMENT. THE LETTER OF FEBRUARY 14, 1969, RAISES CERTAIN QUESTIONS IN REGARD TO WHETHER THE ITEMS ARE BEING TESTED IN ACCORDANCE WITH THE REQUIREMENTS IN THE TECHNICAL ORDERS. A QUESTION WAS ALSO RAISED IN THE CONFERENCE BETWEEN YOU AND REPRESENTATIVES OF THIS OFFICE ON FEBRUARY 13, 1969, REGARDING WHETHER THE ESTIMATED TOTAL AMOUNT OF $262,170 IN THE CONTRACT AWARD DOCUMENT IS CORRECT.

THE SCHEDULED TIME FOR THE SUBMISSION OF OFFERS IN THE RFP WAS MAY 23, 1968. THE RFP PROVIDED THAT THE GOVERNMENT SHOULD ORDER A MINIMUM QUANTITY IN THE AMOUNT OF $1,000. THE ESTIMATED MAXIMUM QUANTITY WAS TO BE INSERTED AT THE TIME OF AWARD BASED ON THE "AGGREGATE PRICE" WHICH WAS THE BASIS FOR AWARD WITHOUT CONSIDERATION OF THE COSTS OF TRANSPORTATION. THE GOVERNMENT'S ESTIMATE OF THE MAXIMUM QUANTITY WAS $450,000.

ON MAY 20, 1968, THE PROCURING ACTIVITY ISSUED AMENDMENT NO. 1 WHICH ADDED THE ATTACHED DATA REQUIREMENT (DD FORM 1423) TO THE EXISTING DATA REQUIREMENTS IN THE RFP. THE AMENDMENT EXTENDED THE SUBMISSION DATE FOR OFFERS TO JUNE 7, 1968. THE DD FORM 1423 ATTACHED TO THIS AMENDMENT CORRECTED SEQUENCE NO. 005 ON PAGE 2 OF DD FORM 1423, DATED MARCH 14, 1968 (THE FORM INITIALLY INCLUDED WITH THE RFP). AMENDMENT NO. 2 WHICH HAD AN EFFECTIVE DATE OF JUNE 17, 1968, CLARIFIED CERTAIN ASPECTS OF PART XXIII, ON PAGE 11 OF SCHEDULE SECTION I. AMENDMENT NO. 3 WITH AN EFFECTIVE DATE OF JUNE 28, 1968, INCORPORATED THE DD FORM 1423 ATTACHED TO THAT AMENDMENT INTO THE RFP. THE CHANGES TO DD FORM 1423, MARCH 14, 1968, WERE THAT SEQUENCE NOS. A 003 AND A 005 WERE DELETED AND SEQUENCE NO. 010 WAS ADDED. THIS AMENDMENT EXTENDED THE DATE FOR THE SUBMISSION OF OFFERS UNTIL JULY 12, 1968.

THE FIRST ROUND OF NEGOTIATIONS BEGAN ON AUGUST 16, 1968. SPECIAL EMPHASIS WAS PLACED ON THE PROPOSALS OF MRL AND ANOTHER OFFEROR WHICH APPEARED UNREASONABLY LOW WHEN COMPARED TO PREVIOUS PROCUREMENTS. THE CUT -OFF DATE FOR REVISED OR VERIFIED PROPOSALS WAS AUGUST 23, 1968. ONE OF THE TWO INITIAL LOW OFFERORS REVISED ITS PRICES TO AN AMOUNT WHICH WAS BEYOND A COMPETITIVE RANGE AND THIS OFFER WAS NOT CONSIDERED FURTHER. MRL REVISED ITS PRICE UPWARD BUT STILL REMAINED THE LOW OFFEROR. THE RECORD INDICATES THAT THE CONTRACTING OFFICER FELT THAT THIS REVISED PRICE WAS STILL BELOW THE PRICE OF THE KNOWN LEVEL OF EFFORT REQUIRED TO PERFORM THE WORK. YOUR CONCERN CONFIRMED THE PRICES IN YOUR PROPOSAL AS SUBMITTED. ONE OTHER OFFEROR CONFIRMED THE PRICES IN ITS PROPOSAL AS SUBMITTED.

THE SECOND ROUND OF NEGOTIATIONS BEGAN ON AUGUST 29, 1968, WITH SEPTEMBER 5, 1968, ESTABLISHED AS THE DEADLINE FOR ANY REVISIONS OR VERIFICATIONS. THE KNOWN LEVEL OF EFFORT AS IT PERTAINED TO THE VARIOUS TASKS WAS POINTED OUT TO MRL AND THIS OFFEROR STATED THAT THE PRICES WERE CORRECT BUT TRANSPOSED. THE PRICE IN YOUR PROPOSAL WAS REDUCED IN THIS ROUND OF NEGOTIATION; HOWEVER, THE EVALUATED PRICE OF MRL WAS STILL LOW. AT THE CONCLUSION OF THIS ROUND OF NEGOTIATION THE CONTRACTING OFFICER REQUESTED A PRE-AWARD SURVEY ON MRL.

THE PRE-AWARD SURVEY ON MRL WAS CONDUCTED BY THE DEFENSE CONTRACT ADMINISTRATIVE SERVICES REGION (DCASR), ST. LOUIS, MISSOURI, AND MRL WAS UNQUALIFIEDLY RECOMMENDED FOR AWARD. THIS RECOMMENDATION WAS BASED IN PART ON MRL'S UNDERSTANDING THAT ALL SPECIAL TOOLING AND TEST EQUIPMENT WOULD BE CONTRACTOR FURNISHED AND THE ORAL ASSURANCES FROM MRL THAT THE TOOLING AND EQUIPMENT WOULD BE PURCHASED, FABRICATED OR EXISTING STOCK MODIFIED FOR THE PERFORMANCE OF ANY RESULTING CONTRACT. AT THE TIME OF THE AWARD TO MRL IT WAS THE OPINION OF THE CONTRACTING OFFICER BASED ON AVAILABLE INFORMATION THAT MRL HAD THE POTENTIAL FOR DEVELOPING PRODUCTIVE CAPABILITY IN TIME TO MEET AIR FORCE'S REQUIREMENTS AND THAT WITH AN ORDERLY PLAN FOR PHASING-IN AND PHASING OUT OF THE NEW AND OLD CONTRACTORS THE T-38 AND F-5 MISSIONS WOULD NOT BE ADVERSELY AFFECTED. AWARD WAS MADE TO MRL ON NOVEMBER 7, 1968.

WITH RESPECT TO THE NATURE OF THE REVIEW BY THIS OFFICE OF THE DETERMINATION BY THE PROCURING ACTIVITY THAT MRL WAS A QUALIFIED OFFEROR, WE QUOTE THE FOLLOWING FROM B-163859, APRIL 17, 1968, WHICH ALSO CONCERNED A SITUATION WHERE AN OFFEROR PROTESTED AGAINST AN AFFIRMATIVE ADMINISTRATIVE DETERMINATION REGARDING THE RESPONSIBILITY OF THE LOW OFFEROR:

"OUR OFFICE HAS CONSISTENTLY HELD THAT THE DETERMINATION OF A BIDDER'S OVERALL RESPONSIBILITY IS PRIMARILY THE FUNCTION OF THE CONTRACTING AGENCY AND NOT OF THE GENERAL ACCOUNTING OFFICE. 38 COMP. GEN. 131; 33 ID. 549. WHETHER A BIDDER IS, OR IS NOT, CAPABLE OF PRODUCING IN ACCORDANCE WITH CONTRACT REQUIREMENTS IS A QUESTION OF FACT, AND ABSENT EVIDENCE THAT THE DETERMINATION OF A BIDDER'S CAPABILITIES WAS BASED ON ERROR, FRAUD, OR FAVORITISM, OUR OFFICE WILL ACCEPT THE FINDINGS OF THE CONTRACTING AGENCY. 40 COMP. GEN. 294. WE HAVE ALSO STATED THAT THE PROJECTION OF A BIDDER'S ABILITY TO PERFORM IF AWARDED A CONTRACT IS OF NECESSITY A MATTER OF JUDGMENT, WHICH, WHILE IT SHOULD BE BASED ON FACT AND ARRIVED AT IN GOOD FAITH, MUST PROPERLY BE LEFT LARGELY TO THE SOUND ADMINISTRATIVE DISCRETION OF THE CONTRACTING OFFICERS INVOLVED, SINCE THEY ARE IN THE BEST POSITION TO ASSESS RESPONSIBILITY, THEY MUST BEAR THE MAJOR BRUNT OF ANY DIFFICULTIES EXPERIENCED BY REASON OF THE CONTRACTOR'S LACK OF ABILITY, AND THEY MUST MAINTAIN THE DAY-TO-DAY RELATIONS WITH THE CONTRACTOR ON BEHALF OF THE GOVERNMENT. FOR THESE REASONS, WE HAVE HELD THAT IT WOULD BE UNREASONABLE TO SUPERIMPOSE THE JUDGMENT OF OUR OFFICE OR ANY OTHER AGENCY OR GROUP ON THAT OF THE CONTRACTING OFFICIALS. 39 COMP. GEN. 705, 711.

"UNDER ASPR 1-905, THE DETERMINATION OF THE RESPONSIBILITY OF A PROSPECTIVE CONTRACTOR IS REQUIRED TO BE MADE ON THE BASIS OF CURRENTLY VALID INFORMATION ON FILE OR WITHIN THE KNOWLEDGE OF PERSONNEL IN THE DEPARTMENT OF DEFENSE, AND GENERALLY THE INFORMATION REGARDING THE PROSPECTIVE CONTRACTOR'S RESPONSIBILITY, INCLUDING PREAWARD SURVEYS WHEN DEEMED NECESSARY, MUST BE OBTAINED PROMPTLY AFTER BID OPENING OR RECEIPT OF PROPOSALS. UNDER ASPR 1-905.4, A PREAWARD SURVEY IS DEFINED AS AN EVALUATION BY A CONTRACT ADMINISTRATION OFFICE OF A PROSPECTIVE CONTRACTOR'S CAPABILITY TO PERFORM UNDER THE TERMS OF A PROPOSED CONTRACT, AND WHEN SUCH A SURVEY IS MADE, THE CONTRACTING OFFICER IS REQUIRED TO USE THE EVALUATION IN DETERMINING THE PROSPECTIVE CONTRACTOR'S RESPONSIBILITY.'

PURSUANT TO OUR REVIEW WE FIND THAT THERE WAS AN ADEQUATE FACTUAL BASIS FOR THE ADMINISTRATIVE DETERMINATION THAT MRL WAS A RESPONSIBLE PROSPECTIVE CONTRACTOR; CONSEQUENTLY, THIS DETERMINATION WILL NOT BE QUESTIONED BY OUR OFFICE.

WE AGREE THAT CONSIDERING THE NATURE OF THE PROCUREMENT AN UNUSUALLY LONG PERIOD OF TIME ELAPSED BETWEEN THE ISSUANCE OF THE RFP AND THE AWARD TO MRL. HOWEVER, WE DO NOT FIND ANY SUBSTANTIVE EVIDENCE THAT THE PROCURING ACTIVITY DELIBERATELY EMPLOYED STALLING TACTICS IN ORDER TO FAVOR SOME PARTICULAR OFFEROR. CONSEQUENTLY, THE VALIDITY OF THE AWARD CANNOT BE QUESTIONED ON THIS BASIS.

WITH REGARD TO THE CONTENTION THAT THE PROCURING ACTIVITY SHOULD NOT HAVE MADE AN AWARD BEFORE OUR OFFICE RESOLVED YOUR PROTEST, YOU ARE ADVISED THAT THERE IS NO REQUIREMENT UNDER ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-407.9, THAT AN AWARD MUST BE WITHHELD UNTIL FINAL DISPOSITION OF A PROTEST BY THIS OFFICE. PURSUANT TO OUR REVIEW WE HAVE NOT FOUND ANY DELIBERATE VIOLATION OF ASPR 2-407.9.

WITH RESPECT TO WHETHER MRL HAS THE NECESSARY TEST EQUIPMENT, KELLY AIR FORCE BASE HAS ADVISED AS FOLLOWS IN A TELEGRAM WHICH WAS FORWARDED TO OUR OFFICE WITH THE LETTER FROM AIR FORCE HEADQUARTERS DATED MARCH 10, 1969:

"CONCERNING REQUEST FOR PROPOSAL F41608-68-R-2875 AND THE RESULTING CONTRACT F41608-69-D-1032 WHICH WAS AWARDED TO MISSOURI RESEARCH LABORATORIES ST CHARLES MO. THE FOLLOWING INFORMATION IS PROVIDED. MISSOURI RESEARCH LABORATORIES INC. DOES HAVE THE EQUIPMENT AND CAPABILITY NECESSARY TO PERFORM ALL TESTS REQUIRED OF THE GEARBOX BY THE TECHNICAL ORDERS, INCLUDING THAT WHICH REQUIRES A HIGH RPM RANGE. TECHNICIANS AND ENGINEERS FROM SAAMA WHO HAVE VISITED THE CONTRACTOR'S PLANT HAVE VERIFIED THIS CAPABILITY WHICH IS FURTHER ATTESTED TO BY THE FACT THAT A TOTAL OF 35 GEARBOXES WERE DELIVERED BY THE CONTRACTOR IN THE MONTH OF FEBRUARY.' IN THE ABSENCE OF SUBSTANTIVE EVIDENCE THAT THE ABOVE IS ERRONEOUS WE HAVE NO BASIS FOR QUESTIONING THIS INFORMATION.

IN THE SAME TELEGRAM AS THE ONE REFERRED TO IN THE PRECEDING PARAGRAPH, THE PROCURING ACTIVITY HAS ADVISED THAT THE EVALUATED PRICE OF MRL WAS $150,150 AND THAT YOUR EVALUATED PRICE WAS $192,000. THE DIFFERENCE BETWEEN THE TOTAL EVALUATED PRICE AND THE TOTAL CONTRACT PRICE IS DUE TO THE AMOUNT OF FUNDS OBLIGATED FOR REIMBURSEMENT OF MATERIALS. IN THIS CONNECTION SEE PART XI OF SCHEDULE SECTION I WHICH PROVIDES THAT THE GOVERNMENT WILL REIMBURSE THE CONTRACTOR ITS ACTUAL COSTS FOR DIRECT MATERIALS FURNISHED.