B-197204, AUG 8, 1980

B-197204, AUG 8, 1980

DIGEST: 1. CONTRACT IS NOT VOID AB INITIO WHERE AWARD WAS MADE TO CONTRACTOR BASED ON AGENCY'S INDEPENDENT FINDING THAT BIDDER WAS RESPONSIBLE AND WAS NOT DEPENDENT ON BIDDER'S ALLEGED MISSTATEMENTS. 2. EXTENSION IN DELIVERY SCHEDULE UNDER CONTRACT CLAUSE WHICH IS NOT DUE TO CHANGES IN SPECIFICATIONS IS MATTER OF CONTRACTING ADMINISTRATION WHICH IS RESPONSIBILITY OF CONTRACT AGENCY, AND GAO DECISIONS INVOLVING CONTRACT MODIFICATIONS WHICH IMPROPERLY CIRCUMVENT COMPETITIVE PROCUREMENT STATUTES DO NOT APPLY.

GULL AIRBORNE INSTRUMENTS, INC.:

GULL AIRBORNE INSTRUMENTS, INC. (GULL), HAS ASKED THIS OFFICE TO DIRECT TERMINATION OF CONTRACT NO. N00383-78-C-0831 ENTERED INTO BY THE DEPARTMENT OF THE NAVY (NAVY) AND CONSOLIDATED AIRBORNE SYSTEMS, INC. (CAS). CAS, THE BENDIX CORPORATION AND THE NAVY SUBSEQUENTLY ENTERED INTO A NOVATION AGREEMENT.

THIS OFFICE DENIED GULL'S PROTEST AGAINST THE AWARD OF THE CONTRACT TO CAS. GULL AIRBORNE INSTRUMENTS, INC., 57 COMP.GEN. 67 (1977), 77-2 CPD 344; AFFIRMED ON RECONSIDERATION, B-188743, MARCH 21, 1978, 78-1 CPD 217. GULL'S PROTEST WAS BASED, IN PART, ON ALLEGATIONS THAT CAS WAS NOT A RESPONSIBLE BIDDER BECAUSE CAS WOULD NOT BE ABLE TO PRODUCE A PRODUCT TO COMPLY WITH THE REQUIREMENTS OF THE IFB WITHIN THE TIME CONSTRAINTS OF THE DELIVERY SCHEDULE. THOSE ALLEGATIONS WERE CONSIDERED AND DISCUSSED IN THE ABOVE DECISIONS.

GULL ASSERTS THAT THE AFFIRMATIVE DETERMINATION BY THE NAVY THAT CAS WAS RESPONSIBLE WAS MADE BECAUSE OF FALSE STATEMENTS BY THE CONTRACTOR, WHICH HAS BEEN CONFIRMED BY THE DIFFICULTIES ENCOUNTERED DURING PERFORMANCE. BECAUSE OF THIS, GULL ALLEGES THAT THE CONTRACT OBTAINED BY CAS THROUGH FALSE REPRESENTATIONS IS VOID AB INITIO. ACCORDING TO GULL, CAS INTENTIONALLY MISSTATED TO THE NAVY THAT IT HAD DESIGNED A PRODUCT THAT MET OR ALMOST MET THE GOVERNMENT'S SPECIFICATIONS PRIOR TO AWARD OF THE CONTRACT.

THE NAVY RESPONDS THAT IT FULLY UNDERSTOOD CAS'S CAPABILITIES WHEN IT ENTERED INTO THE CONTRACT BECAUSE THREE PREAWARD SURVEYS MADE THE NAVY AWARE THAT CAS HAD NOT YET FULLY DEVELOPED A PRODUCT THAT WAS ABLE TO MEET THE SPECIFICATIONS. THE NAVY BELIEVES THAT, AT MOST, CAS "OVERSTATED ITS CASE" AND THAT IT DOES NOT BELIEVE THAT THERE WAS ANY INTENTIONAL WRONGDOING ON THE PART OF CAS.

WHILE THE DIFFICULTIES IN PERFORMING THE CONTRACT APPEAR TO HAVE BORNE OUT GULL'S ORIGINAL PROTEST, A CONTRACT IS NOT VOID AB INITIO UNLESS AWARD OF THE CONTRACT WAS "PLAINLY" OR "PALPABLY" ILLEGAL. LANIER BUSINESS PRODUCTS, B-187969, MAY 11, 1977, 77-1 CPD 366. IN ORDER TO BE REGARDED AS PLAINLY OR PALPABLY ILLEGAL, THE AWARD MUST HAVE BEEN MADE CONTRARY TO STATUTE OR REGULATION BECAUSE OF SOME ACTION OR STATEMENT BY THE CONTRACTOR OR THE CONTRACTOR MUST HAVE BEEN ON DIRECT NOTICE THAT THE PROCEDURES FOLLOWED IN AWARDING THE CONTRACT WERE INCONSISTENT WITH STATUTORY OR REGULATORY REQUIREMENTS. 52 COMP.GEN. 215 (1972). SINCE THERE IS NO EVIDENCE THAT CAS ACTED INTENTIONALLY TO MISLEAD THE GOVERNMENT AND THE GOVERNMENT'S DETERMINATION THAT CAS WAS RESPONSIBLE WOULD HAVE BEEN MADE IN ANY CASE, THERE IS NO BASIS UPON WHICH TO FIND THAT THIS CONTRACT IS VOID AB INITIO.

GULL ALSO PROTESTS THAT THE LONG EXTENSION IN THE DELIVERY SCHEDULE HAS SO CHANGED THE CONTRACT THAT IT CONSTITUTES A NEW PROCUREMENT REQUIRING A NEW SOLICITATION, CITING AMERICAN AIR FILTER, CO., INC., 57 COMP.GEN. 285 (1978), 78-1 CPD 136.

THE NAVY ADVISES THAT THE EXTENSION IN THE DELIVERY SCHEDULE DUE TO PERFORMANCE DIFFICULTIES IS UNDER ITS AUTHORITY TO ADMINISTER THE CONTRACT AND WITHIN THE SCOPE OF THE "FIRST ARTICLE APPROVAL CLAUSE." THE "FIRST ARTICLE APPROVAL CLAUSE" PERMITS EXTENSIONS IN THE DELIVERY SCHEDULE TO TEST THE PRODUCTS SUBMITTED AND TO INSURE DELIVERY OF A SATISFACTORY PRODUCT TO THE AGENCY. IN ADDITION, THE NAVY STATES THAT THERE HAS BEEN NO RELAXATION OR TIGHTENING OF CONTRACT SPECIFICATION REQUIREMENTS. THEREFORE, THE NAVY'S DECISION TO PERMIT EVEN A LONG DELAY IS A MATTER OF CONTRACT ADMINISTRATION WHICH IS THE RESPONSIBILITY SOLELY OF THE CONTRACTING AGENCY, AND OUR DECISIONS INVOLVING CONTRACT MODIFICATIONS WHICH IMPROPERLY CIRCUMVENT COMPETITIVE PROCUREMENT STATUTES DO NOT APPLY. INTER-ALLOYS CORPORATION, B-182890, FEBRUARY 4, 1975, 75-1 CPD 79; DYNETERIA INC., B-186828, JULY 22, 1976, 76-2 CPD 72.

THE PROTEST IS DENIED.