Assets Recovery Systems, Inc.

B-275332 Feb 10, 1997 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST General Accounting Office is authorized to exercise jurisdiction over protest against award under solicitation providing for exchange of property since an exchange necessarily involves acquisition of property by the government. The protester contends that it was entitled to award because its proposal represented the best value to the government. Offerors were instructed that any combination of aircraft and/or cash would be acceptable. Offerors were instructed to describe in detail how the planes would be equipped and to identify the "time between overhaul" status of the major components. The proposal failed to specify what would happen in the event that the auction proceeds were in excess of the amount required to purchase one plane. View Decision Matter of: Assets Recovery Systems, Inc. File: B-275332 Date: February 10, 1997 DIGEST Attorneys DECISION Assets Recovery Systems, Inc. (ARSI) protests the award of a contract to K & K Aircraft under request for proposals (RFP) No. DAAJ09-96-R-0681, issued by the Department of the Army Aviation and Troop Command for the exchange and/or sale of 124 government-owned U-21 aircraft for one or more Beechcraft 1900D aircraft and/or cash. The protester contends that it was entitled to award because its proposal represented the best value to the government. We deny the protest. BACKGROUND In conducting this procurement, the agency sought to achieve two goals: ridding itself of an inventory of aged aircraft and components no longer suitable for the agency's mission and acquiring one or more newer aircraft. To this end, the solicitation provided for the exchange [1] or sale of 124 U-21 aircraft and associated components for one or more Beechcraft 1900D series aircraft and/or cash. Offerors were instructed that any combination of aircraft and/or cash would be acceptable, and that award would be made to the offeror whose proposal (taking into account the value of any aircraft offered) represented the best value to the government. [2] To enable the Army to determine the value of the particular aircraft offered, offerors were instructed to describe in detail how the planes would be equipped and to identify the "time between overhaul" status of the major components. Five offerors submitted proposals by the September 13, 1996 closing date. Of the three offerors other than the awardee and the protester, one offered a new aircraft, which the agency valued at $4.4 to $4.6 million; another offered a new aircraft (valued at $4.4 to $4.6 million) plus flight training for two pilots and maintenance training for one mechanic; [3] and a third offered a used aircraft which it valued at $4,947,000, plus $33,274 in cash, for a total offer value of $4,980,274. K & K offered a new aircraft that the agency valued at $5.4 million [4] and a cash payment of $782,000, giving its offer an overall value of $6,182,000. ARSI's offer consisted of a four-page "Proposal for Absolute Auction," accompanied by the following two-sentence entry in Block 18a [5] of the solicitation cover page (Standard Form 1449): "Gauranty One Beech 1900D aircraft NEW or more . . . Outfitted Per. Army Request See Enclosed." (sic) In its "Proposal for Absolute Auction," ARSI offered to sell via auction the U-21 aircraft and components and use the proceeds, less expenses and a commission of 7 percent, to purchase up to four new, standard Beechcraft 1900D aircraft for the seller. In an addendum to the proposal, the protester's president opined that his company might "be able to retrieve between 15 Million to 35 Million dollars on a worldwide scale" for the inventory. The proposal failed to specify what would happen in the event that the auction proceeds were in excess of the amount required to purchase one plane, but not enough to purchase two (or more than enough to purchase two, but not enough to purchase three, etc.). In other words, the proposal did not provide for the payment of any such proceeds to the agency. Since ARSI's proposal, read as a whole, guaranteed only one aircraft--the purchase of others being contingent upon the proceeds of the auction--the Army valued it at $4.4-$4.6 million. On September 19, the Army awarded a contract to K & K. [6] JURISDICTION As a preliminary matter, both parties have requested that our Office exercise jurisdiction over this protest, and we see no legal impediment to doing so. To the extent that the solicitation provides for an exchange of property, property is necessarily being acquired by the government, and our Office is authorized by statute to exercise jurisdiction over protests concerning the acquisition of property by the government. Competition in Contracting Act, 31 U.S.C. Sec. 3551(1)(a) (1994), as amended by Pub. L. No. 104-106, Sec. 4321(d)(1), 110 Stat. 186, 674 (1996); 31 U.S.C.Sec. 3552, as amended by Pub. L. No. 104-106, Sec. 5603, 110 Stat.