gard to the "spare parts" requirement, Siems states that the ability to obtain spare parts is an implicit requirement where the successful bidder will be required to inspect, maintain and repair equipment, and RFP-335CC required the contractor to furnish manufacturer's approved repair parts. Concerning the "technical personnel" addition, the protestant states that this adds nothing to the procurement, but merely adds criteria for determining whether it was qualified in this particular area, a determination which SBA already made, under RFP-335CC, in Siems' favor. The protestant further states that none of the remaining provisions which were added to RFP-120CC have an effect on the present procurement.

It is protestant's view that since the only substantive difference between the two solicitations is the requirement that award be made in the aggregate, the only point at issue is whether it is necessary and proper that the award be made in the aggregate. Protestant does not feel that award in the aggregate is either necessary or justified under the circumstances of the present case. Additionally, Siems alleges that it was the intent of NIH under both solicitations to make an unauthorized sole source solicitation award to Siemens.

We agree with Siems that the initial question with which we must deal is whether award in the aggregate was necessary or proper. In this regard, both the contracting officer and the Director of Procurement and Materiel Management stated that award in the aggregate was necessary "to provide an economic inducement for the contractor to provide emergency service within 24 hours for all types of equipment." However, there is nothing in the record to justify a conclusion that either Siemens or Siems could not reasonably have been expected to offer 24-hour emergency service in the event the solicitation had provided for awarding contracts for servicing less than all of the microscopes. Moreover, the record fails to establish that the bidders could reasonably have been expected to offer, or that they did offer, these services at a lesser price when award in the aggregate was required. Conversely, Siemens' offer under RFP-120CC, requiring award in the aggregate, was identical to its offer under RFP335CC, which did not require that award be in the aggregate. Moreover, the record indicates that other Government installations using the same three types of microscopes have awarded separate contracts to Seims and Siemens, one for servicing Models 1 and 1A, and the other for servicing Model 101. There is no indication that emergency service was not promptly performed under these contracts or that contract prices were adversely affected thereby.

In addition, FPR 1-1.301-1 requires that procurements be made. on a competitive basis to the maximum practicable extent. Here, the record does not establish that separate awards were not practicable and, contrary to the established policy of obtaining competition in procurements, use of the aggregate award provision precludes re

522-985 O-74-6

ceipt of a responsive offer from the only apparent source of competition for Siemens on Models 1 and 1A. Without affording Siems the opportunity to compete for the servicing of Models 1 and 1A, it is apparent that the only possibility of obtaining price competition for those models, as contemplated by FPR 1-3.807–1(b)(1), was eliminated. Also, see subsection (ii) (a) of that regulation which makes an exception to a presumption of adequate price competition when the solicitation is made under conditions that unreasonably deny to one or more known and qualified offerors an opportunity to compete.

The desirability of consolidating requirements to the maximum extent possible is also given as a justification for an aggregate award. While consolidation of requirements is considered to be a sound procurement practice in those instances where the Government can expect. to realize a substantial savings as a result of such consolidation, the record does not indicate that NIH had any such expectation at the time it was decided to issue a resolicitation requiring award in the aggregate. This is evidenced by the fact that by making two separate awards under RFP-335CC, i.e., an award to Siems for Models 1 and 1A, and an award to Siemens for Model 101, the Government could have obtained the required services for approximately $4,200 less than could be realistically expected from an aggregate award to Siemens, who offered, under RFP-335CC, to service the fourteen 1 and 1A models for $1,600 per microscope while Siems offered to service the same microscopes for $1,300 per microscope. We are unable to conclude that NIH could, in good faith, have expected Siemens to lower its offer on a resolicitation, since undoubtedly Siemens realized that it would be the only firm making an aggregate offer under the resolicitation.

In view of the above, we can only conclude that the aggregate award requirement in the present case was both unnecessary and improper. Since failure of an offer to comply with an improper requirement in the solicitation will not justify its rejection on the grounds of nonresponsiveness, we must also conclude that Siems' offer under RFP120CC was improperly rejected, since the only reason given for the determination that Siems' offer was nonresponsive was that it failed to offer to service all three types of microscopes.

With respect to the evaluation committee's conclusion that Siems" offer was "technically unacceptable," the record does not indicate that either Siems or Siemens actually submitted a technical proposal, as such proposals are generally constituted, although both firms did list (1) qualified personnel who would or could work on the contract; (2) response time to emergency calls; and (3) their spare parts capacity. Conversely, it appears that both concerns merely offered to service and maintain the microscopes in the manner required by the solicitation for a fixed amount of money per microscope. The record does not

indicate that when NIH sent out the RFPs it either solicited or expected to receive differing technical approaches on how to service and maintain the microscopes, but only that the servicing and maintenance offered should conform to the best practices of the industry, and be of a quality acceptable to the Government, which could include bringing the microscopes to the manufacturer's guaranteed resolution. In regard to the technical evaluation criteria listed in the covering letter accompanying RFP-120CC, we believe there is merit in the protestant's position that the factors making up the criteria are factors which are properly for consideration in the evaluation of Siems' capability or capacity to perform the services offered. Matters of capacity reflecting on an offeror's responsibility do not change in character merely by having been expressed in terms of responsiveness in the solicitation. 39 Comp. Gen. 173, 178 (1959); 45 Comp. Gen. 4, 7 (1965). Concerning the changes in the second solicitation (RFP-120CC) which constitute the principal bases advanced as to the necessity for cancellation of RFP-335CC, the first change that we note is a requirement that the contractor provide service under "high resolution" conditions. While this provision requires the contractor to bring the microscopes to the resolution guaranteed for the microscopes, we are not persuaded that this action could not also be reasonably required of the contractor under the specifications of both solicitations which provide that the contractor shall make all necessary adjustments; furnish maintenance comparable with the best practices of the industry; perform workmanship of a quality acceptable to the Government; and promptly rectify any instances of nonacceptable service at no extra cost to the Government. In any event, whether Siems is capable of meeting this requirement is clearly a question of capacity to be finally decided by SBA.

Regarding the change which requires the contractor to have an adequate supply of spare parts, we note that one of the reasons given in support of the procuring activity's determination, under RFP335CC, that Siems' service was inadequate to meet their requirements was that Siems did not have access to spare parts. SBA was not convinced that such was the case, as indicated by the issuance of a COC. Similarly, in connection with the change requiring a reasonable number of qualified technicians and engineers, it would appear that SBA was of the opinion that Siems had a sufficient number of qualified personnel to perform the services or it would not have issued a COC to Siems.

Thus, the determination by the proposal evaluation committee that Siems' offer was technically unacceptable amounted, in essence, to a determination that Siems was not responsible for reasons of capacity which, when adopted by the contracting officer, was a matter subject to referral to SBA under FPR 1-1.708.3.

We believe the record before us requires a conclusion that the motivating factor for not making an award to Siems under RFP-335CC, and for the cancellation of that RFP, was the procuring activity's belief that the services furnished by Siemens would be of a higher quality than the services furnished by Siems. While there is evidence that this could be true, the record does not establish that Siems could not have satisfactorily met the essential minimum needs of NIH as to Models 1 and 1A, especially since that firm was issued a COC which was not withdrawn even after reconsideration by SBA at the request of NIH. It is well established that there is no authority to base the award of a nonpersonal service, fixed price, contract on a determination that a certain bidder is believed to be capable of providing the highest quality of services. See 43 Comp. Gen. 353; 41 Comp. Gen. 484. In view of our conclusion that rejection of Siems' offer as nonresponsive was improper, and our conclusion that the technical defects. found by the evaluation committee reflected upon Siems' capacity, it is our opinion that the question of Siems' capacity to service the Model 1 and 1A microscopes must now be submitted to SBA for a determination as to whether Siems is entitled to a COC covering that portion of the services on which it bid. If SBA issues a COC as to those services, that portion of Siemens' contract should be terminated for the convenience of the Government and an award for such terminated portion should be made to Siems.

We would appreciate advice of whatever action is taken on our recommendation.

The files transmitted with the letters dated December 16, 1971, and March 9, 1972, from the Director of Procurement and Materiel Management are returned.

Funds-Foreign-United

Earned

[B-176281]

States Owned

Currencies-Interest

The interest on loans of excess foreign currencies made under section 234 (c) of the Foreign Assistance Act of 1961, as amended (22 U.S.C. 2196)-currencies that are general assets of the United States held in the accounts of the Treasury-and the interest accrued on foreign currency acquired in the administration of insurance or guaranty portfolios and held in interest bearing depositories designated by the Treasurer of the United States pending their sale for dollars need not be deposited into the general fund of the Treasury as miscellaneous receipts pursuant to 31 U.S.C. 484, but may be retained by the Overseas Private Investment Corporation to carry out its purposes since the interest constitutes "revenues and income transferred to or earned by the corporation from whatever source derived" within the meaning of section 236 of the act, which authorizes their retention by the corporation.

To the President, Overseas Private Investment Corporation, July 26, 1972:

Reference is made to your letter of June 16, 1972, in which you request a ruling on two questions as follows:

1. Does the Overseas Private Investment Corporation retain interest on loans of excess foreign currencies made under Section 234 (c) of the Foreign Assistance Act of 1961, as amended, (“FAA”);

2. Does the Overseas Private Investment Corporation retain the interest accrued on foreign currency acquired in the administration of its insurance or guaranty portfolios and held in interest bearing depositories.

In the absence of legislation authorizing otherwise, the amounts involved would be for depositing into the general fund of the Treasury as miscellaneous receipts in accordance with section 3617 of the Revised Statutes, codified in 31 U.S. Code 484. The questions arise because of doubt as to whether those amounts constitute "revenues and income transferred to or earned by the Corporation from whatever source derived" within the meaning of section 236 of the Foreign Assistance Act of 1961, as amended, 22 U.S. Code 2196, which authorizes the Overseas Private Investment Corporation to retain them.

With reference to the first question, subsection 234 (c) was added to the Foreign Assistance Act of 1961, by that part of the Foreign Assistance Act of 1969, approved December 30, 1969, Public Law 91-175, 83 Stat. 805, 22 U.S.C. 2162, which created the Overseas Private Investment Corporation. That subsection specifically authorizes the Corporation

To make loans in United States dollars repayable in dollars or loans in foreign currencies (including without regard to section 1415 of the Supplemental Appropriation Act, 1953, such foreign currencies which the Secretary of the Treasury may determine to be excess to the normal requirements of the United States and the Director of the Bureau of the Budget may allocate) to firms privately owned or of mixed private and public ownership upon such terms and conditions as the Corporation may determine. ***

The excess currencies made available to the Corporation under subsection 234 (c) are general assets of the United States held in accounts in the Treasury. As explained in one of the Memoranda of Law attached to your letter, these currencies are derived from a variety of sources including repayment of loans made under the Mutual Security Act of 1954, as amended, the Foreign Assistance Act of 1961, as amended, and the Agricultural Trade Development and Assistance Act of 1954, as amended (Public Law 480). In addition to other restrictions loans made with these currencies may be restricted by provisions in the acts under which they were first accrued. It is not suggested that retention of repayments of principal of excess currency loans is authorized as the retention authority of section 236 refers only to "revenues and income."

The second question, involving interest on foreign currencies received by the Corporation in the administration of its insurance or guarantee portfolios, relates to currencies which have been deposited into depositories designated by the Treasurer of the United States pending their sale for dollars.

Section 236 of the Foreign Assistance Act of 1961 was also included in that part of the Foreign Assistance Act of 1969 approved Decem