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JR.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JANUARY 22. IN YOUR PROTEST YOU HAVE EXPRESSED DOUBTS AS TO THE ABILITY OF HALLMARK TO PERFORM UNDER THE CONTRACTS AT ITS BID PRICES OR TO MEET THE REQUIREMENTS OF THE INVITATIONS AS TO THE RATIO OF FOUR STUDENTS TO ONE INSTRUCTOR AND STATE THAT THIS WILL AFFECT THE QUALITY OF ITS PRODUCTION. YOU STATE FURTHER THAT IT IS OBVIOUS THAT HALLMARK WILL ASK FOR A NEGOTIATED UPGRADING OF ITS BIDS AND PROTEST THAT THIS RENEGOTIATION NOT BE ALLOWED BECAUSE OF ITS BELOW-COST BIDS AND LACK OF GOOD FAITH EVIDENCED BY ITS BID PRICES. YOU HAVE MADE THE SAME ALLEGATIONS RESPECTING ALL THE INVITATIONS CITED IN YOUR PROTEST. A SUMMARY OF THE PREBID CONFERENCES WAS FURNISHED WHICH SHOWS THAT HALLMARK WAS APPRISED OF PERTINENT AREAS OF THE INVITATION AND THAT THE VARIOUS ELEMENTS INVOLVED WERE BROUGHT TO ITS ATTENTION.

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B-155993, APR. 28, 1965

TO MESSRS. D. O. HENSON AND R. R. JENNINGS, JR.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JANUARY 22, 1965, PROTESTING THE AWARD OF CONTRACTS TO HALLMARK ACADEMY, INC., UNDER INVITATION FOR BIDS NOS. 41-641-65-18, 41-685-65-25 AND 01-602-65-20. IN YOUR PROTEST YOU HAVE EXPRESSED DOUBTS AS TO THE ABILITY OF HALLMARK TO PERFORM UNDER THE CONTRACTS AT ITS BID PRICES OR TO MEET THE REQUIREMENTS OF THE INVITATIONS AS TO THE RATIO OF FOUR STUDENTS TO ONE INSTRUCTOR AND STATE THAT THIS WILL AFFECT THE QUALITY OF ITS PRODUCTION. YOU STATE FURTHER THAT IT IS OBVIOUS THAT HALLMARK WILL ASK FOR A NEGOTIATED UPGRADING OF ITS BIDS AND PROTEST THAT THIS RENEGOTIATION NOT BE ALLOWED BECAUSE OF ITS BELOW-COST BIDS AND LACK OF GOOD FAITH EVIDENCED BY ITS BID PRICES.

YOU HAVE MADE THE SAME ALLEGATIONS RESPECTING ALL THE INVITATIONS CITED IN YOUR PROTEST. REGARDING YOUR ALLEGATION OF A "BELOW-COST" BID MADE BY THE LOW BIDDER THE DEPARTMENT OF THE AIR FORCE HAS TAKEN SEVERAL PRECAUTIONS TO INSURE REALISTIC BIDS. A SUMMARY OF THE PREBID CONFERENCES WAS FURNISHED WHICH SHOWS THAT HALLMARK WAS APPRISED OF PERTINENT AREAS OF THE INVITATION AND THAT THE VARIOUS ELEMENTS INVOLVED WERE BROUGHT TO ITS ATTENTION. IN ADDITION, ON FEBRUARY 1, 1965, THE PRESIDENT OF HALLMARK ACADEMY VERIFIED HIS UNDERSTANDING OF THE PROVISIONS OF THE INVITATION. FURTHER, THE UNIT PRICES BID BY HALLMARK UNDER THE ABOVE INVITATIONS WERE $13.87, $14.87 AND $15.87, RESPECTIVELY, FALLING INTO THE PRICE RANGE OF THE FIVE LOWEST BIDS RECEIVED ON EACH INVITATION. THESE WERE, UNDER INVITATION NO. 41-641 65-18, $13.87, $17.05, $18.15, $19.00 AND $22.97; UNDER INVITATION NO. 41-685-65-25, $14.87, $17.20, $17.93, $20 AND $21.36 AND UNDER INVITATION NO. 01-602-65-20 THEY WERE $15.87, $17, $18.54, $22.16 AND $22.28 PER FLYING HOUR.

YOU ALLEGE, IN EFFECT, THAT THE LOW BIDDER HAS KNOWINGLY OFFERED A PRICE LESS THAN ITS ANTICIPATED COSTS WITH THE EXPECTATION OF INCREASING THE CONTRACT PRICE DURING THE PERIOD OF CONTRACT PERFORMANCE THROUGH CHANGE ORDERS OR OTHER MEANS. THERE IS NOTHING IN THE RECORD TO SUPPORT THIS ALLEGATION, AND THE DEPARTMENT REPORTS THAT THIS WILL NOT BE PERMITTED. IN THAT CONNECTION, ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-311 CLEARLY STATES THAT THE DUTY OF THE CONTRACTING OFFICER IS TO INSURE THAT ANY AMOUNTS POSSIBLY EXCLUDED IN THE ORIGINAL CONTRACT PRICE ARE NOT RECOVERED IN THE PRICING OF CHANGE ORDERS.

YOUR ALLEGATIONS PERTAINING TO HALLMARK INSTRUCTOR PILOTS USING THEIR OFF -DUTY TIME IN CONDUCTING PRIVATE FLYING LESSONS AS AFFECTING THE REQUIREMENT OF A FOUR-TO-ONE STUDENT/INSTRUCTOR RATIO WOULD APPEAR TO BE WITHOUT MERIT. THE AIR FORCE REPORTS THAT HOW THE CONTRACTOR'S CIVILIAN PERSONNEL UTILIZE THEIR OFF-DUTY TIME IS OF NO CONCERN TO THAT DEPARTMENT SO LONG AS THEIR ACTIONS DO NOT ADVERSELY AFFECT THE AIR FORCE IN APPEARANCE AND CONTRACT PERFORMANCE. THE QUALITY CONTROL OF THE FEDERAL AVIATION AUTHORITY CERTIFIED INSTRUCTOR PILOTS TO BE USED IN THE AIR FORCE PROGRAM WILL BE MAINTAINED THROUGH CLOSE SUPERVISION ON THE PART OF THE TECHNICAL REPRESENTATIVES OF THE CONTRACTING OFFICER.

WE ARE ADVISED THAT A THOROUGH AND COMPREHENSIVE AFFIRMATIVE FACILITY CAPABILITY REPORT ON HALLMARK WAS PERFORMED PURSUANT TO AIR FORCE PROCUREMENT INSTRUCTION 1-902 ON JANUARY 19-21, 1965. IT WAS CONDUCTED BY THE DALLAS CONTRACT MANAGEMENT DISTRICT THROUGH THE SAN ANTONIO CONTRACT MANAGEMENT OFFICE. THE CONTRACTING OFFICER HAS DETERMINED THAT HALLMARK IS THE LOW RESPONSIVE AND RESPONSIBLE BIDDER UNDER EACH OF THE INVITATIONS, HAVING MET THE MINIMUM STANDARDS FOR RESPONSIBLE PROSPECTIVE CONTRACTORS AS SET FORTH IN ASPR 1-903. THE SELECTION OF CONTRACTORS AND THE DETERMINATION OF THEIR QUALIFICATIONS IS PRIMARILY THE RESPONSIBILITY OF THE ADMINISTRATIVE OFFICERS CONCERNED AND, IN THE ABSENCE OF EVIDENCE OF BAD FAITH OR LACK OF A REASONABLE BASIS FOR THE ACTION TAKEN, WE ARE NOT REQUIRED TO OBJECT THERETO. THE RECORDS IN THE INSTANT CASES INDICATE THAT THESE ADMINISTRATIVE ACTIONS WERE TAKEN IN GOOD FAITH AND AFTER CAREFUL CONSIDERATION OF THE QUALIFICATIONS OF THE LOW BIDDER, IN CONFORMITY WITH THE CONTRACTING STATUTES AND REGULATIONS.

IN VIEW OF THE FOREGOING THERE IS NO PROPER BASIS PRESENTED BY YOUR PROTESTS FOR OBJECTION TO THE ACTION OF THE ADMINISTRATIVE OFFICE IN MAKING THE AWARDS UNDER THE CITED INVITATIONS.

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