You refer to our decisions 8 Comp. Gen. 284 (1928); 10 id. 510 (1931); 14 id. 106 (1934); 40 id. 590 (1961); 44 id. 623 (1965); and 46 id. 554 (1966), all of which articulate the general rule that excess costs recovered from defaulting contractors or their sureties are required by section 3617, Revised Statutes, 31 U.S. Code 484, to be deposited into the Treasury as miscellaneous receipts. However, you state that in none of the decisions that you have reviewed have you found specific discussion clarifying whether amounts earned and not paid must be deposited as a collection. The decision appearing in 8 Comp. Gen. 284 is stated to be the closest but you feel that it is ambiguous and you are not sure that there properly was considered therein the difference between unexpended funds and collections or recoveries. While the decision in 8 Comp. Gen. 284 required that an amount earned by and withheld from the defaulting contractor be deposited into the Treasury as miscellaneous receipts, the question primarily involved therein was whether or not the amount should instead be deposited into the reclamation fund pursuant to a statutory provision providing generally that all moneys received in connection with operations of the reclamation law be deposited into the reclamation fund.

The decisions 10 Comp. Gen. 510 and 14 Comp. Gen. 106 likewise concerned amounts earned by and withheld from defaulting contractors and which were required to be deposited as miscellaneous receipts; however there was not discussed therein any distinction between amounts earned but unpaid and amounts otherwise recovered from defaulting contractors.

The case in 44 Comp. Gen. 623 concerned, in part, an earned but withheld amount to be taken into consideration for the purpose of computing the amount of excess costs to be recovered from the defaulting contractor. While it was not specifically stated in that decision that the amount withheld properly might remain in the appropriation or whether it must be deposited as miscellaneous receipts, the general rule with respect to disposition of excess costs was set out therein and reference was made to 8 Comp. Gen. 284 and 14 id. 106 which, as stated above, required such amounts earned but withheld to be deposited as miscellaneous receipts.

The most recent decision which you referred to, 46 Comp. Gen. 554 (1966), concerned the withholding of an amount owing to the defaulting contractor under a contract other than the contract under default. While that amount as well as any that might otherwise be collected as excess costs were directed to be deposited as miscellaneous receipts, no distinction was drawn between amounts withheld and those otherwise recovered.

The remaining decision referred to in your letter, 40 Comp. Gen. 590, as partially quoted in the letter permitted the balance remaining under the defaulted contract to be used for reprocurement, but no portion of such balance had been earned by the defaulting contractor.

The decision also repeated the general rule that amounts recovered from defaulting contractors are required to be deposited into the Treasury as miscellaneous receipts. It found no authority whereby any excess costs recovered from the defaulting contractor or his surety could be used to reimburse the appropriation involved but held that such excess costs need not be considered in computing statutory maximum cost limitations. There were not for consideration any amounts earned by the defaulting contractor but not paid to him. Such case, therefore, is not relevant to the matter here involved.

We agree with your observation that in the decisions involving recovery of excess costs there has been little or no discussion regarding the distinction to be made between amounts earned by but withheld from defaulting contractors and those recovered through voluntary payments, litigation, or otherwise, nor, in general, do we believe any distinction properly can be made.

Accordingly, and if otherwise correct, the voucher which is returned herewith properly may be certified.

[B-174012]

Contracts-Negotiation-Competition-Aggregate Award Basis

Effect

The cancellation of a request for proposals (RFP) for the inspection, maintenance, and repair of three types of electron microscopes because the specifications were considered inadequate for competitive procurement, and the reissuance of the RFP on the basis an award "would be made in the aggregate, price, and other factors considered," did not result in the price competition contemplated by section 1-3.807-1(b) (1) of the Federal Procurement Regulations since separate awards under the initial RFP would have obtained the services for less. Therefore, since justification for an aggregate award is sound only if the Government realizes a substantial savings from the consolidation, the aggregate award requirement was both unnecessary and improper, and rejection of the low offeror (on two items) who had not complied with the aggregate requirement was not justified.

Bidders zation

Qualifications-Capacity, Etc.-Technical Criteria Utili

Where offerors were not required to submit technical proposals to service electron microscopes but only to offer to conform to the best practices of the industry, and the factors making up the technical criteria were evaluation of capacity factors, the determination an offeror was technically unacceptable amounted, in essence, to a determination of nonresponsibility for reasons of capacity that required a referral to the Small Business Administration (SBA) under paragraph 1-1.708.3 of the Federal Procurement Regulations. Furthermore, the award of the nonpersonal service, fixed price, contract to the offeror determined capable of providing the highest quality services was without authority and, therefore, if the SBA will issue a Certificate of Competency to the rejected offeror, the award made should be terminated for the convenience of the Government.

To the Secretary of Health, Education, and Welfare, July 25, 1972: Reference is made to letters dated December 16, 1971, and March 9, 1972, from the Director of Procurement and Materiel Management, OASAM, furnishing us a report and a supplemental report in connection with a protest by Siems International Electron Microscope Serv

ice (Siems) against the cancellation of request for proposal (RFP) NIH-71-P(T)-335CC (hereafter RFP-335CC), the resolicitation of the requirement, and the award to another firm under RFP No. NIH-72-P(T)-120CC (hereafter RFP-120CC) by the National Institutes of Health (NIH).

RFP-335CC, issued on March 29, 1971, was for the inspection, maintenance and repair of seventeen Siemens electron microscopes, Models 1, 1A and 101, under Item Nos. 1, 2 and 3, for the period April 1, 1971, through March 31, 1972. According to the record, RFP-335CC was issued only to the Siemens Corporation, the manufacturer of the microscopes, since a noncompetitive procurement was contemplated, and the RFP was synopsized in the Commerce Business Daily for informational purposes only. However, Siems requested a copy of the solicitation prior to closing date for the purpose of submitting an offer. Siems submitted an offer of $1,300 per instrument for Models 1 and 1A, while Siemens made an offer of $1,600 per instrument for Models 1 and 1A, and $2,000 for Model 101.

After an evaluation of the Siems proposal, NIH did not consider Siems' service adequate to meet requirements. NIH based this conclusion on the fact that (1) Siems would not have access to spare parts or the latest training techniques essential to servicing updated instruments; (2) Mr. Siemer Siems' prior service, as an employee of Siemens, had not been completely satisfactory; and (3) on occasions Mr. Siems, who was also the founder of the Siems firm, while an employee of Siemens, found it necessary to contact the company for assistance, which he would be unable to do as an independent operator. NIH pointed out that its scientists required "high resolution" microscopy which exceeded ordinary service and necessitated the service of outstanding technicians. NIH further stated that award in the aggregate was necessary to provide an economical inducement for the contractor to provide proper servicing for all types of equipment, although the solicitation permitted awards on an item basis (par. 10, Standard Form 33A).

The contracting officer subsequently determined that Siems was not responsible and this determination was referred to the Small Business Administration (SBA), pursuant to Federal Procurement Regulations (FPR) 1-1.708. SBA issued Siems a Certificate of Competency (COC) on June 15, 1971, subject to reconsideration if the award was not made within 60 days. The contracting officer, pursuant to FPR 1-1.708.3, requested that SBA reconsider its decision to issue a COC. A meeting was held in connection with the COC which was attended by representatives from SBA, NIH, and the Department of Health, Education, and Welfare (DHEW). While SBA refused to withdraw the COC, it apparently agreed with the NIII and DHEW representatives that if the specifications were inadequate, as NIH maintained,

the specifications should be revised and the requirement resolicited. It would also appear that those present at the meeting were in agreement that an aggregate award might be appropriate and, if so, should be included in the new specifications.

After further analysis it was decided that the specifications were inadequate for competitive procurement and on September 17, 1971, both Siems and Siemens were advised that no award would be made on RFP-335CC and that the requirement would be resolicited at a later date. RFP-120CC was subsequently issued for the inspection, maintenance and repair of Siemens, Model 1, 1A and 101, electron microscopes for the period January 1, 1972, through December 31, 1972. The solicitation specifically stated that award would be in the aggregate, price and other factors considered. The covering letter accompanying RFP-120CC issued November 29, 1971, stated that an aggregate award was contemplated and any offer not quoting on all three microscopes would be declared nonresponsive. The covering letter also provided:

Each offer must be accompanied with appropriate documentation in sufficient detail to permit evaluation by the Government in the following areas of significant interest:

TECHNICAL EVALUATION CRITERIA

1. Pool of skilled service technicians and engineers in terms of numbers and qualifications. Submit names of individuals actually to be assigned to service the instruments, and a list of potential substitutes (reasonable number) together with a resume of their experience and educational backgrounds. NIH requires best possible assistance in solving difficult technical problems. 30 points. 2. Sufficiency of stock of spare parts and ability to quickly obtain the quantity and variety of spare parts which could conceivably be reasonably required in service of the instruments. 20 points.

3. Cognizance of new design changes and improvements in servicing techniques developed by the manufacturer of the instruments. Experience and ability to service the needs of high resolution microscopists. Submit names, organization and phone numbers of "high resolution" microscopists who have been service customers, 25 points.

4. Response to emergency situations and potential for remedying the problem with minimum down time. See specifications for response time to calls for service. 25 points.

You are requested to submit any new material which will aid in the technical evaluation together with copies of data previously submitted. Mere reference to data previously submitted will not suffice.

Award may be made without discussion of proposals received, hence, proposals should be submitted initially on the most favorable terms from a price and technical standpoint which the offeror can submit to the Government.

The specifications for RFP-120CC included provisions requiring that the successful contractor (1) provide service under "high resolution" conditions, (2) maintain an adequate supply of spare parts, and (3) have a reasonable number of qualified personnel to respond to emergency situations within 24 hours. The "High Resolution" provision defined that term as bringing the electron microscope to the guaranteed resolution of Siemens electron microscopes, point to point, and required that offers be accompanied by a certification and/or recommendation as to the offeror's ability to service and test instruments of that caliber without resorting to trial and error methods.

In a letter dated December 15, 1971, Siems protested the proposed aggregate award for the servicing and maintenance of all three models. It was the contention of Siems that it was not necessary to quote on all three models on the original solicitation and that NIH, knowing that Siems was not familiar with Model 101, had asserted, in RFP120CC, the requirement that offerors quote on all three models. It was contended by Siems that this was done in order to eliminate that firm from competition. Siems mentioned several institutions where contracts were awarded covering Models 1 and 1A, while separate contracts were awarded covering Model 101.

The proposals were opened as scheduled on December 20, 1971. Siems submitted a quote of $1,000 per instrument for Models 1 and 1A, while Siemens submitted a quote of $1,600 per instrument for Models 1 and 1A, and $2,000 per instrument for Model 101. Both offers were submitted to an evaluation committee made up of prominent NIH scientific personnel who evaluated the offers in accordance with the criteria set forth in the contracting officer's covering letter. The Siems offer received substantially fewer points from each of the committee members than did Siemens' offer. According to the contracting officer, it was determined that in view of the decision reached by the evaluation committee and the fact Siems had not quoted on all three models, that Siems' offer was not only technically unacceptable, but nonresponsive to the solicitation.

The latest 3-month extension of Siemens' contract (NIH-71-7) expired on December 31, 1971, and on January 3, 1972, NIH made a determination to award the contract to Siemens, prior to resolution of the protest. The basis for this determination was stated to be an urgent need for services as stated in the evaluation committee's recommendation for immediate award to Siemens as the sole responsive offeror. No explanation was given as to why NIH did not seek another extension of Siemens' prior contract, although it appears that Siemens had accepted three 3-month extensions of its contract under which (according to informal advice received from your agency) the services had been satisfactorily performed at prices of $1,312.65, for Models 1 and 1A, and $1,575 for Model 101.

It is Siems' contention that with the exception of the requirement that the award be made in the aggregate, there is no substantive difference between the two solicitations, and even the requirement in RFP120CC that the successful contractor provide services under "high resolution" conditions adds nothing to the solicitation, but merely describes the skill level required in servicing the microscopes. We note, in this connection, that the specifications of both solicitations required all necessary adjustments: the maintenance to be comparable with the best practices of the industry, and the workmanship performed by the contractor to be of a quality acceptable to the Government. In re