B-161862, SEP. 14, 1967

B-161862, SEP. 14, 1967

BIDS - NEGOTIATION - SOLE SOURCE DECISION CONCERNING PROTEST BY COLUMBIA HELICOPTERS, INC., AGAINST SOLE- SOURCE PROCUREMENT WITH BELL HELICOPTER CO. FOR TWO HELICOPTERS FOR BONNEVILLE POWER ADMINISTRATION. A DETERMINATION TO PROCURE TWO REPLACEMENT HELICOPTERS UNDER A SOLE SOURCE NEGOTIATED PROCUREMENT WHICH DETERMINATION INDICATED THAT SUCH SOURCE WAS THE ONLY ONE MEETING MINIMUM NEEDS HAS BEEN REVIEWED AND SINCE THE DETERMINATION IS SUPPORTED BY THE FINDINGS THERE IS NO LEGAL BASIS FOR QUESTIONING THE ACTION. WITH RESPECT TO THE CONTENTION THAT THE HELICOPTER OPERATION SHOULD BE ON A CONTRACTUAL BASIS RATHER THAN AS AN "IN-HOUSE" OPERATION MATTER IS NOT COVERED BY ANY STATUTE OR REGULATION WHICH WOULD PLACE THE RESOLUTION OF SUCH QUESTIONS WITHIN THE DECISION AUTHORITY OF THE COMPTROLLER GENERAL AND, THEREFORE NO OBJECTION TO THE ADMINISTRATIVE DETERMINATION IS MADE. 42 COMP. GEN. 640.

TO KRAUSE, LINDSAY AND NAHSTOLL:

REFERENCE IS MADE TO YOUR LETTERS OF JUNE 20 AND JULY 10, 1967, WITH ENCLOSURES, PROTESTING ON BEHALF OF COLUMBIA HELICOPTERS, INC., PORTLAND, OREGON (1) THE PURCHASE OF TWO HELICOPTERS BY THE BONNEVILLE POWER ADMINISTRATION FOR PATROL AND MAINTENANCE OF ELECTRIC TRANSMISSION LINES, INSTEAD OF OBTAINING COMPETITIVE BIDS ON CHARTER SERVICES FOR SUCH WORK; AND (2) THE NEGOTIATION OF A CONTRACT WITH BELL HELICOPTER COMPANY FOR THE HELICOPTERS (MODEL NO. 206A) ON A SOLE SOURCE BASIS INSTEAD OF SOLICITING BIDS UNDER SPECIFICATIONS WHICH WOULD NOT RESTRICT BIDDERS TO A SINGLE SUPPLIER.

REGARDING THE NEGOTIATION OF THE CONTRACT FOR THE HELICOPTERS WITH BELL HELICOPTER COMPANY ON A SOLE-SOURCE BASIS, 41 U.S.C. 252 (C) (10) AUTHORIZES THE NEGOTIATION OF PURCHASES AND CONTRACTS ,FOR PROPERTY OR SERVICES FOR WHICH IT IS IMPRACTICABLE TO SECURE COMPETITION.' IMPLEMENTING REGULATIONS ARE CONTAINED IN PARAGRAPH 1-3.210 (A) (1) OF THE FEDERAL PROCUREMENT REGULATIONS WHICH PROVIDES FOR THE USE OF SUCH AUTHORITY "WHEN PROPERTY OR SERVICES CAN BE OBTAINED FROM ONLY ONE PERSON OR FIRM (SOLE SOURCE OF SUPPLY)," AND THE CONTRACT IS SUPPORTED BY AN APPROPRIATE DETERMINATION AND FINDINGS JUSTIFYING USE OF THE AUTHORITY AS REQUIRED BY PARAGRAPH 1-3.210 (B).

THE "FINDINGS AND DETERMINATION FOR PROCUREMENT OF HELICOPTER AIRCRAFT" BY THE CONTRACTING OFFICER JUSTIFYING NEGOTIATIONS WITH BELL HELICOPTER COMPANY FOR MODEL 206A HELICOPTERS, A COPY OF WHICH IS UNDERSTOOD TO HAVE BEEN FURNISHED TO YOU AT THE TIME, IS AS FOLLOWS: "FINDINGS "THE BONNEVILLE POWER ADMINISTRATION HAS FOR MANY YEARS UTILIZED TWO-PLACE HELICOPTERS IN PATROLLING TRANSMISSION LINES. THE BONNEVILLE POWER ADMINISTRATION TRANSMISSION LINE SYSTEM TRAVERSES MOUNTAINOUS, TIMBERED, FARM, DESERT AND POPULATED TERRAIN AT ALTITUDES RANGING FROM SEA LEVEL TO 10,000 FEET. WE ARE ENGAGED IN CONSTRUCTING LINES TO INTERCONNECT THE PACIFIC NORTHWEST AND THE PACIFIC SOUTHWEST. THIS INVOLVES EXTRA HIGH VOLTAGE LINES COVERING GREAT DISTANCES THROUGH EXCEPTIONALLY REMOTE AREAS. THERE ARE CASES IN WHICH BECAUSE OF STREAMS AND TERRAIN FEATURES TRAVEL OF 25 TO 50 MILES BY SURFACE ROUTE WILL BE REQUIRED TO MOVE FROM ONE TOWER TO THE NEXT TOWER TO PERFORM MAINTENANCE. IN WINTER SEASONS THE SNOW WILL BE SO DEEP IN SOME AREAS THAT ACCESS BY SURFACE TRANSPORTATION WILL BE POSSIBLE ONLY WITH SPECIAL EQUIPMENT AFTER LONG ARDUOUS HOURS OF TRAVEL. IN THE SPRING WHEN THE FROST GOES OUT OF THE GROUND, SOME OF THE SAME AREAS WILL BECOME QUAGMIRES MAKING ACCESS TO THE LINES EXTREMELY HAZARDOUS AND DIFFICULT. "THE TRANSMISSION LINES WILL BE CARRYING LARGE POWER LOADS. WHEN REPAIRS TO THE LINES ARE NEEDED SYSTEM LOADS MAY BE CURTAILED. REPAIRS AT THE EARLIEST POSSIBLE TIME ARE VITAL. ALSO INVOLVED ARE MAINTENANCE AND REPAIR OF COMMUNICATIONS FACILITIES MOST OF WHICH ARE LOCATED ON RELATIVELY INACCESSIBLE MOUNTAIN TOPS. "IN PLANNING FOR MAINTENANCE OF THE PACIFIC INTERTIE LINES NOW UNDER CONSTRUCTION AND FOR OTHER EHV LINES ON THE SYSTEM, CONSIDERATION HAS BEEN GIVEN TO TYPES OF AIRCRAFT AVAILABLE FOR CRITICAL MAINTENANCE AND REPAIR WORK AT ANY TIME OF THE YEAR. AVAILABILITY AND CAPABILITY FOR IMMEDIATE AND EFFECTIVE USE ARE ESSENTIAL. THE AIRCRAFT (HELICOPTER) MUST BE ABLE TO PROCEED FROM ITS HANGAR OR STORAGE POINT TO REMOTE REPAIR AREAS ON THE SYSTEM AND RETURN WITHOUT NECESSITY OF REFUELING. "THE HELICOPTERS NOW USED BY BPA ARE LARGE ENOUGH TO CARRY ONLY A PILOT AND AN OBSERVER AND HAVE A LIMITED ADDITIONAL LOAD CARRYING CAPABILITY FOR REPAIR PARTS AND TOOLS. UNTIL RECENT MONTHS, THE NEXT LARGER CLASS OF HELICOPTER HAS BEEN OF A MUCH LARGER SIZE, CAPABLE OF CARRYING TEN OR MORE PASSENGERS. THE INITIAL COST OF THIS EQUIPMENT AND THE COSTS OF OPERATION MADE IT PROHIBITIVE FOR OUR PURPOSES. HOWEVER, USE OF A HELICOPTER CAPABLE OF CARRYING A PILOT AND A REPAIR CREW OF APPROXIMATELY FOUR MEN WITH TOOLS AND EQUIPMENT IS CONSIDERED FEASIBLE AND HIGHLY DESIRABLE. SUCH MACHINES ARE NOW AVAILABLE, HAVING BEEN CERTIFIED BY THE FAA LATE IN 1966. "REPLACEMENT IS NECESSARY OF TWO OF FOUR HELICOPTERS NOW IN USE BY BPA. THE TWO HELICOPTERS TO BE REPLACED ARE NINE YEARS OLD AND EACH HAS FLOWN APPROXIMATELY 5,000 HOURS. THE AIRCRAFT INDUSTRY RECOMMENDS REPLACEMENT OF HELICOPTERS IN FROM FOUR TO SEVEN YEARS, DEPENDING ON THE SEVERITY OF SERVICE. REPLACEMENT HELICOPTERS SHOULD BE OF A SIZE AND TYPE MEETING OUR CURRENT AND PROJECTED NEEDS FOR THE FUTURE IN THE LIFE PERIOD OF THE AIRCRAFT. "ONE OF THE CONSIDERATIONS FOR SELECTING A HELICOPTER MUST BE ITS COMPATIBILITY WITH EXISTING STORAGE AND HANGAR FACILITIES. AIRCRAFT WHICH WOULD NECESSITATE SUBSTANTIAL AND COSTLY ALTERATIONS IN BUILDINGS OR WHICH WOULD PRESENT PROBLEMS FOR OVERNIGHT STORAGE NECESSARILY WOULD BE LESS DESIRABLE AND APPROPRIATE FOR OUR USE. ,THE MINIMUM INTERNAL CARRYING CAPACITY MUST BE SUFFICIENT TO PERMIT INSTALLATION OF SYSTEM RADIO EQUIPMENT TO FURNISH COMMUNICATIONS WITH THE MICROWAVE FACILITIES BEYOND THAT NEEDED FOR THE OPERATION OF THE AIRCRAFT AND TO CARRY BAGGAGE INCLUDING MAINTENANCE TOOLS AND EQUIPMENT REQUIRED FOR LINE REPAIRS. "FOR EXAMPLE, THE MACHINE SHOULD HAVE INTERNAL SPACE AND LIFTING ABILITY TO CARRY A PILOT, A CREW OF FOUR LINEMEN DRESSED IN HEAVY WINTER WORK CLOTHING AND APPROXIMATELY 200 POUNDS OF TOOLS AND REPAIR PARTS. THE CABIN SHOULD BE SPACIOUS ENOUGH TO CARRY THE PASSENGER LOAD WITHOUT RESTRICTING THE PILOT'S FREEDOM OF MOVEMENT. THIS IS PARTICULARLY CRITICAL SINCE MANY FLIGHTS WILL BE IN HAZARDOUS LOCATIONS AND NEAR ENERGIZED FACILITIES. "TO BE RESPONSIVE TO BPA'S SAFETY STANDARDS, MAXIMUM MARGINS IN POWER, AIRFRAME STRENGTH, AND LOAD CARRYING CAPABILITY ARE ESSENTIAL WITHIN THE RANGE OF MACHINES UNDER CONSIDERATION. AN AIRCRAFT WHICH HAS CAPABILITY OF BEING BROUGHT TO THE GROUND SAFELY FROM A PATROLLING ALTITUDE UNDER 100 FT. IN CASE OF POWER LOSS IS ESSENTIAL. CONTROLS MUST BE SENSITIVE TO ALLOW THE PILOT TO MOVE THE SHIP SHORT DISTANCES VERTICALLY AND HORIZONTALLY SO AS TO PERMIT CLOSE OBSERVATION OF TRANSMISSION LINE TOWERS AND CONDUCTOR. AT THE SAME TIME, CONTROLS MUST OPERATE EASILY TO REDUCE PILOT FATIGUE FROM LONG OPERATING HOURS IN PATROLS AND EMERGENCY LINE REPAIRS. "THE TYPE OF SERVICE PLANNED FOR THIS AIRCRAFT NECESSITATES A MACHINE WHICH IS RUGGED AND WHICH IS CERTIFIED FOR AMPLE POWER FOR THE JOB TO BE DONE. A MACHINE WITH AN AIRFRAME CAPABLE OF UTILIZING A LARGER ENGINE WILL BE HIGHLY DESIRABLE. THIS WILL PERMIT INSTALLATION OF A MORE POWERFUL ENGINE UNDER DEVELOPMENT BY THE ENGINE MANUFACTURER FOR HEAVIER WORK WITHOUT NECESSITY OF REPURCHASE OF HEAVIER AIRCRAFT. "IN RECENT YEARS THE DEPARTMENT OF DEFENSE LIGHT OBSERVATION HELICOPTER (LOH) PROGRAM HAS ENABLED THE INDUSTRY TO PRODUCE HELICOPTERS FOR COMMERCIAL SALE ESSENTIALLY DESIGNED FOR THE CLASS OF USE CONTEMPLATED IN OUR REQUIREMENTS. THERE ARE THREE MANUFACTURERS WHO HAVE DEVELOPED HELICOPTERS OF THIS GENERAL TYPE: THE BELL HELICOPTER CO. (MODEL 206A); THE HUGHES TOOL COMPANY 500 (MODEL 369H) AND THE FAIRCHILD HILLER COMPANY (MODEL 1100). BPA STAFF WHO ARE REQUIRED TO WORK WITH THE HELICOPTERS HAVE STUDIED ALL INFORMATION MADE AVAILABLE BY THESE COMPANIES INCLUDING DEMONSTRATION RIDES IN THE BELL AND HILLER AIRCRAFT. THE HUGHES COMPANY HAS NOT TO DATE MADE AN AIRCRAFT AVAILABLE FOR DEMONSTRATION RIDES IN THIS AREA DESPITE BPA EFFORTS AND ENCOURAGEMENT FOR OVER A YEAR. THE INFORMATION AVAILABLE INDICATES THAT THE MODEL 206A PROPOSED BY THE BELL HELICOPTER COMPANY IS THE ONLY MODEL WHICH MEETS OUR REQUIREMENTS. "ALL THREE OF THE AIRCRAFT CONSIDERED ARE DESIGNED FOR USE OF THE ALLISON MODEL 250-C18, TURBO SHAFT ENGINE WHICH IS FAA CERTIFIED FOR 317 SHAFT HORSEPOWER FOR TAKE OFF AND FOR 270 HORSEPOWER MAXIMUM CONTINUOUS. THIS ENGINE WAS DEVELOPED FOR THE DEFENSE DEPARTMENT IN THE LOH PROGRAM. REPRESENTATIONS HAVE BEEN MADE BY TWO OF THE MANUFACTURERS, BELL AND HILLER, THAT ALLISON IS IN PROCESS OF DEVELOPING A MODEL 250 ENGINE WHICH WILL PRODUCE MORE HORSEPOWER WITHOUT APPRECIABLE INCREASED WEIGHT. "THE BELL AIRCRAFT IS CERTIFIED BY FAA AS MEETING AIR WORTHINESS REQUIREMENTS FOR USE AT TAKE-OFF OF THE FAA CERTIFIED POWER LIMITS OF THE ENGINE. THE HILLER AIRCRAFT IS CERTIFIED FOR ONLY 274 HORSEPOWER TAKEOFF, 233 HORSEPOWER MAXIMUM CONTINUOUS AND THE HUGHES IS CERTIFIED FOR 250 HORSEPOWER TAKEOFF AND 212 HORSEPOWER MAXIMUM CONTINUOUS. THE THREE AIRCRAFT VARY SLIGHTLY IN EMPTY WEIGHTS. HOWEVER, FAA OPERATING LIMITATIONS, UNDER STANDARD CATEGORY, APPLIED TO THE CARRYING CAPACITY, MINUS THE EMPTY WEIGHT, RESULTS IN USEFUL LOAD CAPABILITY OF 1600 LBS. FOR THE BELL AIRCRAFT, 1350 LBS. FOR THE HILLER AND 1370 LBS. FOR THE HUGHES. "THE INTERNAL VOLUME OR CABIN SPACE OF THE THREE AIRCRAFT ALSO IS DIFFERENT. THE BELL AIRCRAFT PROVIDES FOR A PILOT AND ONE PASSENGER FORWARD AND THREE PASSENGERS IN THE AFT SEAT AND IS THE ROOMIEST OF THE THREE AIRCRAFT. THE HUGHES HAS THREE SEATS FORWARD AND TWO SEATS AFT. THIS MEANS THAT THE PILOT WOULD BE CRAMPED WHEN A FULL LOAD OF PASSENGERS IS CARRIED. THE HILLER HAS TWO SEATS FORWARD AND THREE SEATS AFT WITH AFT SEATS SO ARRANGED THAT THE CENTER SEAT IS SLIGHTLY FORWARD TO AVOID A HOUSING WHICH PROTRUDES INTO THE CABIN NECESSITATING CONSIDERABLE CROWDING WHEN CARRYING FOUR PASSENGERS. "THE HUGHES MAKES NO PROVISION FOR A SEPARATE BAGGAGE COMPARTMENT, SPACE IS PROVIDED UNDER AND BETWEEN THE AFT SEATS FOR SUITCASES. THE HILLER HAS A SEPARATE CARGO COMPARTMENT WHICH PROVIDES 6.6 CU. FT. OF STORAGE SPACE. THE BELL AIRCRAFT HAS A SEPARATE BAGGAGE COMPARTMENT PROVIDING 16 CU. FT. OF STORAGE SPACE AND IT HAS A SHELF SPACE BEHIND THE AFT SEATS WITH APPROXIMATELY 4 CUBIC FEET CAPACITY. INSTALLATION OF BPA SYSTEM RADIO EQUIPMENT WOULD BE VERY DIFFICULT IN THE HUGHESMACHINE AND WOULD REDUCE THE AVAILABLE LUGGAGE SPACE IN THE HILLER MACHINE TO AN UNSATISFACTORY LEVEL. THE GREATER AVAILABLE SPACE PROVIDED IN THE BELL MACHINE WILL MEET OUR MINIMUM NEEDS. "IN ADDITION TO ABOVE MENTIONED FEATURES, CONSIDERATION HAS BEEN GIVEN TO VISIBILITY AVAILABLE FOR LINE PATROL, CONVERTIBILITY OF AFT SECTIONS TO CARGO CARRYING, AND POSITIONING OF ENGINE EXHAUST SYSTEMS. THE BELL AND HILLER AIRCRAFT ARE COMPARABLE IN VISIBILITY AND BOTH PROVIDE EXHAUST PORTS WHICH DIRECT HOT GASSES UPWARDS. THE HUGHES MACHINE PROVIDES MUCH SMALLER VIEWING WINDOWS FOR REAR SEAT PASSENGERS AND THE CABIN SUPPORTS AND DOOR FRAME FOR THE FRONT SEAT AREA RESTRICT VISIBILITY IN THE FORWARD QUARTER. THE EXHAUST PORTS OF THE HUGHES MODEL 369H DIRECTS HOT GASSES AT AN ANGLE DOWNWARD AND TO THE REAR WHICH WOULD BE A POTENTIAL FIRE HAZARD WHEN OPERATING IN DRY GRASSY AREAS. ALL THREE MODELS ARE DESIGNED FOR CONVERSION OF THE AFT SEAT AREA TO A CARGO CARRYING COMPARTMENT. "THE ADVERTISED PRICES OF THE THREE HELICOPTERS ARE APPROXIMATELY $90,000 FOR THE BELL MODEL 206A, $85,000 FOR THE HILLER MODEL 1100 AND $79,000 FOR THE HUGHES MODEL 369H. "THE BPA HANGARS AND STORAGE FACILITIES FOR HELICOPTERS HAVE BEEN DESIGNED TO ACCOMMODATE TWO-BLADE HELICOPTERS WHICH WE HAVE OPERATED FOR MANY YEARS. WHEN THE ROTOR IS POSITIONED FORE AND AFT, TWO-BLADE HELICOPTERS CAN BE STORED IN SPACE EQUAL TO THE WIDTH OF THE MACHINE. OF THE THREE MACHINES UNDER CONSIDERATION THE BELL AND HILLER AIRCRAFT ARE TWO-BLADE TYPE BUT THE HUGHES IS FOUR-BLADED. THIS MEANS THAT WITHOUT ALTERATION TO THE ROTOR ON THE HUGHES MODEL, IT WOULD BE NECESSARY TO HAVE HANGAR OR STORAGE SPACE CAPABLE OF TAKING THE FULL DIAMETER OF THE ROTOR BLADES. THE HUGHES COMPANY PROVIDES A FOLDING ARRANGEMENT FOR THE BLADES, HOWEVER, THEIR LOCAL REPRESENTATIVE (A HELICOPTER PILOT) AGREED THAT IT WOULD BE IMPRACTICAL TO USE THE FOLDING FEATURE IN THE EVERY-DAY OPERATIONS PLANNED. ITS DESIGN PURPOSE PROBABLY IS FOR OCCASIONAL USE IN FOLDING THE BLADES WHEN TRANSPORTING THE AIRCRAFT AS IN LARGE MILITARY TRANSPORTS. "CONSIDERING THE JOB WE HAVE FOR THESE MACHINES, THE CREWS WE MUST CARRY IN THEM, OPERATING MARGINS AVAILABLE FOR SAFETY, AND THE PARTS AND REPAIR TOOLS THAT THE MAINTENANCE CREWS WILL NEED, IT IS APPARENT THAT THE BELL MODEL IS THE ONLY ONE OF THE THREE UNDER CONSIDERATION WHICH WILL MEET OUR MINIMUM REQUIREMENTS. GREATER CAPABILITY IS AVAILABLE IN A LARGER CLASS OF HELICOPTERS AT A PRICE APPROXIMATELY $200,000 MORE PER MACHINE, MORE THAN CAN BE JUSTIFIED FOR OUR PURPOSES. SAFETY, REASONABLE OPERATING COST FOR PATROL AS WELL AS EFFECTIVE LINE MAINTENANCE CREW UTILIZATION DICTATE MAXIMUM PERFORMANCE CAPABILITY AND MARGINS IN CONSIDERING THE THREE AVAILABLE MACHINES. ,AFTER CAREFULLY CONSIDERING OUR NEEDS, WE ISSUED OUR INVITATION FOR BIDS NO. 671 FOR TWO FIVE-PLACE HELICOPTER AIRCRAFT. THAT INVITATION SPECIFIED MINIMUM REQUIREMENTS WHICH CORRESPOND WITH THE FAA CERTIFIED CAPABILITY OF THE AIRCRAFT OFFERED BY BELL. WE BELIEVED THAT ISSUANCE OF THIS INVITATION FOR BIDS WOULD PROVIDE OPPORTUNITY FOR THE OTHER MANUFACTURERES WHO MIGHT BE ABLE TO PROVIDE AIRCRAFT WITH EQUIVALENT CAPABILITIES. HOWEVER, THE HUGHES COMPANY AND THE FAIRCHILD-HILLER COMPANY HAVE MADE STRONG REPRESENTATIONS ASKING FOR RECONSIDERATION OF OUR REQUIREMENTS AND RELAXATION OF OUR SPECIFICATIONS SO AS TO PERMIT THEIR BIDDING ON THEIR STANDARD PRODUCTION MODELS. THESE DO NOT MEET OUR MINIMUM NEEDS. "IN CIRCUMSTANCES WHERE THERE IS ONLY ONE MANUFACTURER OF EQUIPMENT MEETING MINIMUM REQUIREMENTS FOR THE JOB, THE COMPTROLLER GENERAL HAS INDICATED NEGOTIATION OF THE PROCUREMENT SHOULD BE CONSIDERED. IN DECISION NO. B153404 FOUND AT 44 COMP. GEN. 27 THE COMPTROLLER GENERAL RULED ON A MATTER CONCERNING PURCHASE BY THE NAVY OF SOME SPECIAL FOOD MIXING MACHINES. "THE NAVY HAD ISSUED SPECIFICATIONS AROUND A MACHINE MANUFACTURED BY THE HOBART MANUFACTURING COMPANY AND OTHER MANUFACTURERS OF SIMILAR EQUIPMENT OBJECTED TO THE RESTRICTIVE NATURE OF THE SPECIFICATIONS. IN THAT CASE HE ADVISED THE PROTESTER AS FOLLOWS: -WHILE YOU ASSERT THAT THE INVITATION SPECIFICATIONS CONTAINED RESTRICTIVE PROPRIETARY FEATURES AND YOU FEAR THAT SUCH FEATURES MAY BE MADE A PART OF FUTURE INVITATIONS FOR BIDS, WHICH APPEARS LIKELY IF NAVY'S RECOMMENDATION FOR CHANGES IN THE EXISTING FEDERAL AND MILITARY SPECIFICATIONS FOR FOOD MIXING MACHINE IS ADOPTED, IT IS WELL ESTABLISHED THAT THE GOVERNMENT DOES NOT VIOLATE EITHER THE LETTER OF THE SPIRIT OF THE COMPETITIVE BIDDING STATUTES MERELY BECAUSE ONLY ONE FIRM CAN SUPPLY ITS LEGITIMATE NEEDS.- IN THAT SAME DECISION THE COMPTROLLER GENERAL STATED THAT THERE IS NO REQUIREMENT THAT THE U.S. PURCHASE EQUIPMENT MERELY BECAUSE IT IS OFFERED AT A LOWER PRICE WITHOUT INTELLIGENT REFERENCE TO THE PARTICULAR NEEDS TO BE SERVED. "IN THE DECISION NO. B157726 FOUND AT 45 COMP. GEN. 462 ON THE SUBJECT OF RESTRICTIVE SPECIFICATIONS THE COMPTROLLER GENERAL ADVISED THAT IF PARTICULAR DESIGN FEATURES OF A SPECIFIC MANUFACTURER ARE NECESSARY TO THE MINIMUM NEEDS OF THE GOVERNMENT, PROCUREMENT SHOULD BE NEGOTIATED. "AS A RESULT OF THE FOREGOING CONSIDERATION INCLUDING THE OBJECTIONS MADE BY HILLER AND HUGHES TO THE SPECIFICATIONS OF INVITATION FOR BIDS NO. 671 THE INVITATION WAS CANCELLED TO PERMIT RECONSIDERATION OF THIS AIRCRAFT PROCUREMENT. THE BELL HELICOPTER COMPANY DEALS DIRECTLY WITH THE USER, THEREFORE, COMPETITION AS AMONG REPRESENTATIVES IS NOT AVAILABLE. HELICOPTER COMPANY IS THE ONLY SOURCE FOR A HELICOPTER AIRCRAFT MEETING THE MINIMUM NEEDS OF THE GOVERNMENT AND THAT NO USEFUL PURPOSE WOULD BE SERVED IN READVERTISING THE REQUIREMENT. "NEGOTIATIONS WILL BE CONDUCTED FOR THE PURCHASE OF TWO AIRCRAFT UNDER THE PROVISIONS OF 302 (C) (10) OF THE FEDERAL PROPERTY ACT, AND OF THE "DETERMINATION "BASED UPON THE FOREGOING FINDINGS, I HEREBY DETERMINE THAT THE BELL BONNEVILLE PROJECT ACT AS AMENDED.' WE ARE ADVISED THAT THE "DETERMINATION AND FINDINGS" WAS REVIEWED AND CONCURRED IN BY THE SECRETARY OF THE INTERIOR.

SINCE THE DECISION TO NEGOTIATE A CONTRACT FOR THE BELL MODEL 206A HELICOPTERS WAS SUPPORTED BY FINDINGS IN ACCORD WITH THE PERTINENT LAW AND REGULATIONS, AND DOES NOT APPEAR TO HAVE BEEN ARBITRARY OR UNWARRANTED UNDER THE CIRCUMSTANCES, WE PERCEIVE NO LEGAL BASIS FOR QUESTIONING THE DEPARTMENT'S ACTION IN SUCH RESPECT.

WITH RESPECT TO YOUR CONTENTION THAT THE HELICOPTER OPERATION SHOULD BE PLACED ON A CONTRACTUAL OR CHARTER BASIS RATHER THAN AS AN IN-HOUSE OPERATION BY BPA ITSELF YOU HAVE CITED VARIOUS PROVISIONS OF BUREAU OF THE BUDGET CIRCULAR NO. A-76, MARCH 3, 1966, CONCERNING "POLICIES FOR ACQUIRING COMMERCIAL OR INDUSTRIAL PRODUCTS AND SERVICES FOR GOVERNMENT USE," WHICH REPLACES THE STATEMENT OF POLICY SET FORTH IN BUREAU OF THE BUDGET BULLETIN NO. 60-2 DATED SEPTEMBER 21, 1959. THE CIRCULAR RESTATES THE GUIDELINES AND PROCEDURES TO BE APPLIED BY EXECUTIVE AGENCIES IN DETERMINING WHETHER COMMERCIAL AND INDUSTRIAL PRODUCTS AND SERVICES USED BY THE GOVERNMENT ARE TO BE PROVIDED BY PRIVATE SUPPLIERS OR BY THE GOVERNMENT ITSELF IN FURTHERANCE OF THE STATED GENERAL POLICY OF RELYING ON THE PRIVATE ENTERPRISE SYSTEM TO SUPPLY THE GOVERNMENT'S NEEDS.

WE ARE ADVISED THAT THIS MATTER WAS REVIEWED BY THE SECRETARY OF THE INTERIOR AS THE RESULT OF YOUR PROTEST TO BPA OF MARCH 27, AND THAT YOU WERE ADVISED BY HIS LETTER OF MAY 19 OF HIS CONCLUSION THAT "THE INTERESTS OF THE UNITED STATES ARE BETTER SERVED BY THE ACQUISITION AND POSITIVE OPERATIONAL CONTROL OF THE HELICOPTERS.'

COLUMBIA HELICOPTER'S LETTER OF MAY 24 REQUESTED THE SECRETARY TO RECONSIDER HIS DECISION IN THE LIGHT OF CERTAIN ARGUMENTS AND POINTS ADVANCED BY YOU ON ITS BEHALF. ON JUNE 6 THE SECRETARY CONFIRMED HIS EARLIER DECISION, AND BONNEVILLE POWER ADMINISTRATION PROCEEDED WITH THE PROCUREMENT OF THE TWO HELICOPTERS FROM BELL HELICOPTER COMPANY. THE CONTRACT FOR THE PROCUREMENT OF THE HELICOPTERS WAS ENTERED INTO JUNE 7, DELIVERY TO BE MADE WITHIN 120 DAYS FROM THE DATE OF THE ORDER.

IN RESPONSE TO YOUR CONTENTIONS CONCERNING THE ECONOMIC FACTORS OF HELICOPTER OPERATION BY BPA OR BY CONTRACT, THE DEPUTY ASSISTANT SECRETARY FOR ADMINISTRATION, DEPARTMENT OF THE INTERIOR, COMMENTS AS FOLLOWS: "ALTHOUGH BPA HAS A SOUND ECONOMIC CASE FOR THE OPERATION OF ITS OWN HELICOPTERS FOR LINE PATROL PURPOSES, WE WISH TO MAKE CLEAR THAT COST CONSIDERATIONS DID NOT FURNISH, EITHER THE PRIMARY OR ULTIMATE BASIS FOR THE SECRETARY'S DECISION AUTHORIZING BPA TO PURCHASE THE HELICOPTERS IN QUESTION. HELICOPTER USAGE HERE IS AN INTEGRAL, INDIVISIBLE PART OF BPA'S POWER OPERATION AND MAINTENANCE RESPONSIBILITY. THE HELICOPTER IS ESSENTIAL EQUIPMENT SUBJECT IN LOGIC AND FACT TO THE EXCLUSIVE OPERATIONAL CONTROL OF THE LEGALLY RESPONSIBLE AGENCY AS TO WHEN AND HOW USED, SAFETY POLICIES, AND ALL OTHER PROPER CONSIDERATIONS. "THE PROTESTANT'S LETTER OF JULY 10 CITES SEVERAL PARAGRAPHS FROM BUREAU OF THE BUDGET CIRCULAR A- 76 CLAIMING THAT THEY SUPPORT THE CONTENTIONS OF THEIR APPEAL. THE PLANNED REPLACEMENT OF THE TWO HELICOPTERS WAS PART OF THE ADMINISTRATION'S APPROVED BUDGET PRESENTATION REQUEST TO CONGRESS INITIATED PRIOR TO THE ISSUANCE OF CIRCULAR A-76. ALTHOUGH THIS ASPECT OF THE MATTER DOES NOT PRECLUDE THE SUBSEQUENT APPLICATION OF THE PROCUREMENT CONCEPTS SET FORTH IN A-76, THE SECRETARY IN HIS RESPONSE TO THE PROTESTOR CLEARLY INDICATED THE ADVERSE EFFECT OF CONTRACTING OUT FOR THE PROCUREMENT OF THESE PARTICULAR SERVICES TO SUPPORT BPA PROGRAM OPERATIONS. THE ALTERNATIVE METHOD OF USING OUTSIDE CONTRACTORS TO FULFILL THIS HIGHLY CRITICAL SUPPORT SERVICE FOR MAINTENANCE OF A VITAL PUBLIC RESPONSIBILITY-ORIENTED FUNCTION WOULD, IN OUR OPINION, BE OF A DISRUPTIVE NATURE. WE BELIEVE THAT THESE PUBLIC STEWARDSHIP RESPONSIBILITIES CLEARLY SUPPORT THE VIEW THAT THESE SERVICES MAY BE GOVERNMENT-FURNISHED AS PROVIDED BY CIRCULAR A-76. "THE PROTESTANT STATES THAT ACCESS TO BPA'S BOOKS HAS NOT BEEN PROVIDED. THIS IS TRUE NOT BECAUSE THEY HAVE BEEN DENIED ACCESS, BUT BECAUSE THEY HAVE NOT REQUESTED ACCESS. BPA'S RECORDS WILL BE MADE AVAILABLE IF THEY DESIRE TO EXAMINE THEM. A COPY OF BPA'S TEN-YEAR COST SUMMARY DERIVED FROM ITS ACCOUNTING RECORDS AND DISCLOSING THE FACTORS WHICH WERE CONSIDERED IN DETERMINING ITS AVERAGE HOURLY COST OF HELICOPTER OPERATIONS HAS BEEN FURNISHED THE PROTESTANT. "BPA'S RECORDS ARE KEPT IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND STANDARDS PRESCRIBED BY YOUR OFFICE. THE PROTESTOR CONCEDES THAT THEY ARE ADEQUATE FOR RATE MAKING PURPOSES OF THE FEDERAL POWER COMMISSION AND FOR FEDERAL BUDGETING PURPOSES; HOWEVER, IT IS CONTENDED THAT THEY ARE NOT ADEQUATE FOR PURPOSES OF COST ACCOUNTING. BPA'S RECORDS DO REFLECT THE COST OF AUTOMOBILES, SALARIES, SHOP EXPENSE, MAINTENANCE, DEPRECIATION, INTEREST AND OTHER ITEMS OF OVERHEAD ABOUT WHICH THE PROTESTOR IS IN DOUBT; BUT ITS RECORDS DO NOT PURPORT TO SHOW A SEPARATE PROFIT AND LOSS STATEMENT FOR EACH SEGMENT OF BPA'SOPERATIONS. "COMMENTS HAVE BEEN PROVIDED REGARDING THE ABSENCE OF INSURANCE PREMIUMS IN BPA'S COST RECORDS. BPA ADMITS THAT IT DOES NOT INCLUDE INSURANCE PREMIUMS IN ITS COST FIGURES BECAUSE IT IS A SELF INSURER, BUT IT DOES NOT FEEL THAT THE ADDITION OF SUCH AN AMOUNT FOR INSURANCE GENERALLY CARRIED WOULD MAKE AN APPRECIABLE DIFFERENCE IN ITS COST FIGURES. HELICOPTER LIABILITY INSURANCE OF $500,000 TO $1,000,000 CAN BE PURCHASED FOR ABOUT $350 PER YEAR FOR A TWO-PLACE CRAFT AND FOR ABOUT $425 FOR A THREE-PLACE CRAFT. HELICOPTER HULL INSURANCE, ON THE OTHER HAND, IS MORE EXPENSIVE. BUT FOR THAT VERY REASON, IT IS NOT CARRIED BY MANY OPERATORS. THIS FACT WAS CONCEDED AT A MEETING BETWEEN BPA, THE PROTESTOR, AND HIS REPRESENTATIVES. "THE JUNE 20 LETTER STATES THAT COLUMBIA HELICOPTERS, INC., WILL FURNISH THE REQUESTED SERVICE, USING A TWO-PLACE HELICOPTER, FOR $60.00 PER HOUR IF GIVEN A GUARANTEE OF 600 HOURS PER YEAR AND THAT THE HOURLY RATE FOR A THREE-PLACE HELICOPTER WOULD BE $80.00. THE LETTER STATES ALSO THAT -BONNEVILLE WOULD NOTICE A STARTLING REDUCTION IN BIDS FOR CHARTER SERVICE IF ANNUAL CONTRACTS WITH A MINIMUM NUMBER OF HOURS WERE TO BE OFFERED, AS WE THINK THEY SHOULD BE.- BPA, IN ITS RECENT INVITATION 795, REQUESTED BIDS FOR THREE-PLACE HELICOPTER SERVICE FOR SOME NONCRITICAL FLYING WHICH DOES NOT INCLUDE LINE PATROL AND OTHER SPECIALIZED BPA HELICOPTER OPERATION. IN THAT INVITATION BPA PROVIDED FOR A MINIMUM OF SIX MONTHS' OPERATION WITH AN ESTIMATE OF 50 HOURS PER MONTH, THE TOTAL CONTRACT TO COVER A PERIOD OF 13 MONTHS. AFTER THE FIRST FIVE MONTHS OF OPERATION THE CONTRACT COULD BE CANCELLED BY BPA ON 30 DAYS' NOTICE. IN THIS INVITATION WHICH PROVIDED A MINIMUM GUARANTEE FOR THE FIXED COSTS, THERE WAS NO STARTLING REDUCTION- IN THE BID PRICES. THE COST PER ESTIMATED HOUR RANGES FROM A LOW OF $98.95 PER HOUR TO A HIGH OF $179.20 PER HOUR. COLUMBIA HELICOPTERS, INC., OFFERED TO PERFORM THIS SERVICE FOR $114.62 AN HOUR. IN DISCUSSIONS WITH BPA PERSONNEL, REPRESENTATIVES OF COLUMBIA HELICOPTERS, NC., WERE ABLE TO OFFER NO REASON WHY AN INVITATION CONTAINING A GUARANTEE OF PAYMENT FOR FIXED COSTS FOR SIX MONTHS WITH ADDITIONAL COMPENSATION FOR ESTIMATED FLYING TIME OF 50 HOURS PER MONTH, AND CONTINUING POSSIBLY FOR 13 MONTHS, WOULD NOT RESULT IN THE -STARTLING REDUCTION- REFERRED TO ABOVE. IF A MINIMUM NUMBER OF HOURS IN THE AMOUNT OF 600 FOR ONE YEAR WOULD RESULT IN A STARTLING REDUCTION,- IT WOULD CERTAINLY APPEAR THAT THE CONTRACT OFFERING THE EQUIVALENT OF 300 HOURS FOR SIX MONTHS, AND POSSIBLY 650 HOURS FOR 13 MONTHS, WOULD PRODUCE A SIMILAR RESULT. WE BELIEVE THAT THE OFFERS RECEIVED UNDER BPA'S INVITATION NO. 795 SHOW CLEARLY THAT NEITHER COLUMBIA HELICOPTERS, INC., NOR ANY OTHER CHARTER OPERATOR IS PREPARED TO FURNISH HELICOPTER SERVICE AT A PRICE COMPARABLE TO BPA'S COST OF OPERATIONS. "THE PROTEST COMMUNICATION STATES THAT BPA MAKES A -TACIT ADMISSION- THAT IT DOES USE CHARTER SERVICES FROM TIME TO TIME. THIS BPA FREELY ADMITS BUT IT DOES NOT FOLLOW THAT ALL OF BPA'S NEEDS FOR HELICOPTERS MAY PROPERLY BE CONTRACTED. BPA USES CHARTER OPERATORS FOR WORK SUCH AS AERIAL SPRAYING AND SEEDING AND FOR MAKING PRELIMINARY LINE SURVEYS. SUCH CASES THERE IS A LESSER DEGREE OF DANGER TO THE OPERATORS, AND THE WORK DOES NOT HAVE A DIRECT BEARING ON THE OPERATION OF THE BPA SYSTEM. BPA'S POLICY IS TO USE THE SERVICES OF CHARTER OPERATORS WHEREVER PRACTICAL. BUT FOR REASONS SET FORTH ABOVE, THE USE OF CHARTER SERVICES FOR LINE PATROL OPERATIONS IS NOT CONSISTENT WITH THE BEST INTEREST OF THE BPA SYSTEM, AND IT DOES NOT USE THEM FOR THAT PURPOSE. "THE FINDINGS AND DETERMINATION OF THE ADMINISTRATOR CLEARLY EXPLAINS WHY BPA NEEDS FIVE- PLACE HELICOPTERS AND STATES THOSE HELICOPTERS WILL REPLACE TWO OF THE OLDER AND SMALLER MODELS. THE TYPE OF MACHINES PROPOSED TO BE FURNISHED BY THE PROTESTOR ARE COMPARABLE TO THOSE BEING REPLACED BY BPA AND ARE NOT THE TYPE OF MACHINES BPA NEEDS. EVEN IF COLUMBIA HELICOPTERS, INC., WERE ABLE TO SHOW THAT THEY COULD FURNISH TWO AND THREE-PLACE MACHINES AT COSTS LOWER THAN GOVERNMENT-OWNED SERVICES, IT WOULD NOT NECESSARILY FOLLOW THAT THEY COULD FURNISH FIVE-PLACE MACHINES AT A LOWER FIGURE. WE DO NOT KNOW WHETHER COLUMBIA HELICOPTERS, INC., COULD FURNISH A FIVE-PLACE TURBINE POWERED CRAFT ON A CHARTER BASIS TO BPA, BUT IF IT COULD WE ASSUME THE CHARGE WOULD BE REASONABLY NEAR THE PREVAILING RATE (CALIFORNIA, WYOMING, UTAH AND NEVADA) WHICH IS $185 PER HOUR. "BPA HAS FOREGONE THE DEVELOPMENT OF A SPECIFIC COST COMPARISON OF GOVERNMENT OWNERSHIP VS. LEASE FOR HELICOPTER SERVICES INASMUCH AS BONNEVILLE, AS PREVIOUSLY STATED ABOVE, IS PLACING PARAMOUNT RELIANCE UPON SPECIFIC PROGRAM RESPONSIBILITIES. BPA HAS REPORTED AND PROVIDED A COST ANALYSIS OF ITS HELICOPTER OPERATIONS INCLUDING COSTS OF INTEREST AND PROVISION FOR DEPRECIATION ON INVESTMENT. USING ITS RECORDED HISTORICAL COSTS AND PROJECTING THIS EXPERIENCE ON THE BASIS OF THE LARGER AIRCRAFT TO BE ACQUIRED, BPA ESTIMATES THAT ITS COST OF OPERATIONS WILL BE LESS THAN $75.00 PER HOUR BASED ON 600 HOURS OF OPERATION PER YEAR. THUS, WE SEE NOTHING TO SUPPORT THE PROPOSITION THAT THE PROTESTOR CAN FURNISH NEEDED SERVICE OF THE LARGER HELICOPTERS AT LESS COST THAN THAT OF BPA. "IN THE TOTAL CONTEXT OF THIS REPORT AS WELL AS THE COMPARATIVE COST CONTEXT, WE AGAIN EMPHASIZE THAT THE CONTROLLING CONSIDERATION IN USE OF BPA-OWNED HELICOPTERS FOR TRANSMISSION SYSTEM O AND M IS OPERATIONAL CONTROL AND ALL THAT IT IMPLIES. WHILE WE HAVE SHOWN THAT THE ECONOMICS FAVOR BPA OWNERSHIP OUR POSITION WOULD BE THE SAME EVEN IF STRAINED COMPARISONS MIGHT REFLECT SOME SLIGHT COST ADVANTAGE ON THE CHARTER SIDE. IN SHORT WE FIND NO BASIS UPON WHICH BPA SHOULD OR COULD FORFEIT OR DILUTE ITS PUBLIC OPERATING RESPONSIBILITY; NOR IS THERE ANY STATUTORY OR EXECUTIVE REQUIREMENT - IN BOB CIRCULAR A-76 OR ELSEWHERE - THAT SUCH AN ACTION BE TAKEN.' THE QUESTION OF WHETHER A DEPARTMENT OR ESTABLISHMENT OF THE EXECUTIVE BRANCH OF THE GOVERNMENT MAY PROPERLY PERFORM "IN HOUSE" THE TYPE OF OPERATIONS HERE CONCERNED, OR SHOULD CONTRACT WITH COMMERCIAL COMPANIES FOR SUCH SERVICES, IS NOT COVERED BY ANY SPECIFIC STATUTE OF WHICH WE ARE AWARE, OR REGULATION OR INSTRUCTION ISSUED PURSUANT THERETO, WHICH WOULD PLACE THE RESOLUTION OF SUCH QUESTIONS WITHIN THE DECISION FUNCTIONS OF THE GENERAL ACCOUNTING OFFICE. THE DIRECTIVES INCORPORATED IN BUREAU OF THE BUDGET CIRCULAR NO. A-76, ARE MATTERS OF EXECUTIVE POLICY, PRESCRIBED BY THE BUREAU OF THE BUDGET AS THE AGENT OF THE PRESIDENT DESIGNATED BY EXECUTIVE ORDER NO. 8248 OF SEPTEMBER 8, 1939, TO ASSIST THE PRESIDENT IN THE FORMULATION AND ADMINISTRATION OF THE FISCAL PROGRAM OF THE GOVERNMENT AND TO ADVISE THE EXECUTIVE DEPARTMENTS AND AGENCIES IN THE AREAS OF ADMINISTRATIVE ORGANIZATION AND PRACTICE. SEE 43 COMP. GEN. 217; ALSO 42 COMP. GEN. 640, WHEREIN WE CONCLUDED, IN REFERENCE TO THE PREDECESSOR BUREAU OF THE BUDGET BULLETIN NO. 60-2, AS FOLLOWS: "THUS, THE PROPRIETY OF A DETERMINATION BY AN EXECUTIVE AGENCY AS TO WHETHER SERVICES OR PRODUCTS SHOULD BE OBTAINED UNDER CONTRACT WITH PRIVATE ENTERPRISE OR THROUGH THE USE OF GOVERNMENT-OWNED FACILITIES IS NOT A MATTER PERMITTING OF A RULING IN TERMS OF LEGAL RIGHTS AND RESPONSIBILITIES. WE THEREFORE FIND NO LEGAL BASIS FOR OBJECTION TO THE PROPOSED ADMINISTRATIVE ACTION, AND WE MUST DECLINE TO RULE UPON THE POLICY QUESTION INVOLVED, WHICH WE DEEM TO BE A MATTER FOR RESOLUTION WITHIN THE EXECUTIVE BRANCH.' WE CONSIDER SUCH VIEWS TO BE EQUALLY APPLICABLE HERE.