TITLE:  Crescent Helicopters, B-284706; B-284707; B-284734; B-284735, May 30, 2000
BNUMBER:  B-284706; B-284707; B-284734; B-284735
DATE:  May 30, 2000
**********************************************************************
Crescent Helicopters, B-284706; B-284707; B-284734; B-284735, May 30, 2000

Decision

Matter of: Crescent Helicopters

File: B-284706; B-284707; B-284734; B-284735

Date: May 30, 2000

Dean H. Shealy for the protester.

Sherry Kinland Kaswell, Esq., Department of Interior, for the agency.

Katherine I. Riback, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1. Agency properly determined, based on market research, that helicopter
services could be acquired under Federal Acquisition Regulation part 12
commercial item procedures because the services solicited are the type of
services offered and sold competitively by the aviation industry in
substantial quantities to commercial entities; none of the requirements
pertaining to pilot and mechanic qualifications and invoicing, which were
included in the solicitations, transformed the type of services sought here
to something other than a commercial item.

2. Protest that agency improperly included in commercial item solicitation
for helicopter services pilot and mechanic qualification requirements that
were inconsistent with commercial practice is denied where the record showed
that commercial contracts had similar requirements, and for those
requirements that were not in commercial contracts, the agency properly
issued waiver in accordance with Federal Acquisition Regulation sect. 12.302(c).

DECISION

Crescent Helicopters protests the terms of requests for proposals (RFP) Nos.
8000-03, 8000-04, 8000-05, and 8000-16, issued by the Department of the
Interior, Office of Aircraft Services (OAS), for helicopter services.

We deny the protests.

The RFPs, issued pursuant to the commercial item procedures of Federal
Acquisition Regulation (FAR) part 12, are for the acquisition of helicopter
flight services, fully operated and maintained by the contractor, in four
different locations. The helicopter services will be used to support a
variety of Interior resource programs, most importantly wildland fire
suppression. The RFPs contemplate the award of fixed-price, with economic
price adjustment, contracts for a base year with 2 option years. Each RFP
lists the aviation services to be provided under the contract and includes
20 pages of technical specifications, which, among other things, include
pilot and mechanic qualifications. Each RFP also includes FAR sect. 52.212-2,
Evaluation--Commercial Items, which provides that the government will award
a single contract based on the offer that represents the best value to the
government based on the merits of the acceptability of the offer, the
aircraft questionnaire, the evaluated price, and the offeror's relative
capability. RFP sect. D2.1. [1]

The protester first contends that the RFPs were wrongfully issued as
commercial item acquisitions under FAR part 12 because the services being
acquired under the RFPs cannot properly be considered commercial items.

Consistent with the Federal Acquisition Streamlining Act of 1994 (FASA), 41
U.S.C. sect.sect. 264a, 264b, 403(12)F) (1994), FAR sect. 2.101 defines "commercial
item" with respect to services as follows:

Services of a type offered and sold competitively in substantial quantities
in the commercial marketplace based on established catalog or market prices
for specific tasks performed under standard commercial terms and conditions.

Determining whether a product or service is a commercial item is largely
within the discretion of the contracting agency, and such a determination
will not be disturbed by our Office unless it is shown to be unreasonable.
Aalco Forwarding, Inc., et al., B-277241.8, B-277241.9, Oct. 21, 1997, 97-2
CPD para. 110 at 11.

FAR part 12 prescribes policies and procedures unique to the acquisition of
commercial items and implements the preference established by, and the
specific requirements in FASA for the acquisition of commercial items that
meet the needs of an agency. FAR part 12 was intended to establish
acquisition policies more closely resembling those of the commercial
marketplace as well as other considerations necessary for proper acquisition
planning, solicitation, evaluation, and award of contracts for commercial
items. FAR part 12 specifies the solicitation provisions and clauses to be
used when acquiring commercial items.

Agencies are required to conduct market research pursuant to FAR part 10 to
determine whether commercial items are available that could meet the
agency's requirements. FAR sect. 12.101. If market research establishes that the
government's needs can be met by a type of item (including services)
customarily available in the commercial marketplace that would meet the
definition of a commercial item at FAR sect. 2.101, the contracting officer is
required to solicit and award any resulting contract using the policies and
procedures in FAR part 12. FAR sect.sect. 10.002(d)(1), 12.102(a). One of the
techniques for conducting market research is to contact knowledgeable
individuals in government and industry regarding market capability to meet
the requirements. FAR sect. 10.002(b)(2)(i).

The record here shows that OAS reasonably concluded, based on its market
research, including information obtained from professional trade
associations, that the helicopter services it seeks qualify as a commercial
item because this type of service is offered and sold competitively by the
aviation industry in substantial quantities to corporations and other
private entities. See Agency Report, Tab M, Statement in Response to
Crescent Protests, Mar. 1, 2000, and Tab M1, Determination of Commercial
Item Availability for Aviation Services, Dec. 2, 1999.

Here, the protester does not argue that the "type" of services being
procured are not commercially available; rather, the protester argues that
the aviation services being procured under the subject solicitations are
custom tailored to such an extent as to be unavailable in the commercial
marketplace. Protester's Comments at 1.

The RFP requirements, which are assertedly inconsistent with customary
commercial practices, are not of such a nature as to transform the type of
services sought here to something other than a commercial item. In this
regard, we note that the FAR definition of commercial item speaks in terms
of services of a "type" offered and sold in the commercial marketplace under
standard commercial terms and conditions; it does not require that the
services be identical to what offerors provide their commercial customers.
Aalco Forwarding, Inc., supra, at 15-17. In fact, as noted below, similar
requirements to those asserted to be inconsistent with commercial practice
exist in commercial contracts. While, as discussed below, there is one
requirement in the RFPs that may not be consistent with commercial practice,
it is permissible for a commercial item solicitation to have noncommercial
terms and still remain a solicitation for a commercial item. Id. at 16.

As noted, Crescent argues that many of the RFP provisions are inconsistent
with commercial practice. Specifically, Crescent contends that the RFP
requirements for pilots and mechanics exceed those mandated by the Federal
Aviation Administration and are not present in commercial contracts.
Crescent also alleges that the RFP-mandated invoicing procedures are
impermissibly custom tailored in a manner inconsistent with commercial
practice. [2]

FAR sect. 12.301(a) provides that:

contracts for the acquisition of commercial items shall, to the maximum
extent practicable, include only those clauses--

(1) Required to implement provisions of law or executive orders applicable
to the acquisition of commercial items; or

(2) Determined to be consistent with customary commercial practice.

FAR sect. 12.301(b)(3) provides for the inclusion of FAR sect. 52.212-4 in
solicitations and contracts for commercial items, which "includes terms and
conditions which are, to the maximum extent practicable, consistent with
customary commercial practices." FAR sect. 12.301(b)(3) further provides that
the "contracting officer may tailor" the terms of FAR sect. 52.212-4 in
accordance with FAR sect. 12.302. In pertinent part, FAR
sect. 12.302(a), provides that:

[b]ecause of the broad range of commercial items acquired by the Government,
variations in commercial practices, and the relative volume of the
Government's acquisitions in the specific market, contracting officers may,
within the limitations of this subpart, and after conducting appropriate
market research, tailor the provision

at . . . [FAR sect.] 52.212-4 . . . to adapt to the market conditions for each
acquisition.

FAR sect. 12.302(c) provides:

The contracting officer shall not tailor any clause or otherwise include any
additional terms or conditions in a solicitation or contract for commercial
items in a manner that is inconsistent with customary commercial practice
for the item being acquired unless a waiver is approved in accordance with
agency procedures.

With regard to the pilot and mechanic qualifications included in the RFP,
the agency has provided a commercial aviation services contract that has
many similar provisions. For example, the RFPs require pilots to possess at
least a current second class medical certificate, RFP sect. B3.3.2, and the
agency-provided commercial contract requires the captain (pilot) to possess
a current first class medical certificate or equivalent. Agency Report, Tab
L, Commercial Contract, at 2. Also, the RFPs require mechanics to have 12
months total experience maintaining aircraft of the same category specified
in the contracts, RFP sect. B3.6.2, and the commercial contract contains the
same requirement. Agency Report, Tab L, Commercial Contract, at 2. As
illustrated by the foregoing examples, our review indicates that, with one
exception, the RFP's pilot and mechanic qualification requirements have
counterparts in commercial contracts, and thus cannot be said to be
inconsistent with customary commercial practice.

That one exception involves the RFP requirement that, at the discretion of
the contracting officer's technical representative, each pilot pass an
agency flight evaluation to demonstrate the pilot's proficiency on the make
and model of aircraft to be flown during the contract using all of the
equipment required by the RFP.
RFP sect.sect. B3.3.5, B3.3.6. We were unable to find any similar provision in the
commercial contracts provided by the agency. However, during the course of
this protest, OAS executed a waiver pursuant to FAR sect. 12.302(c) to allow for
agency flight evaluation for pilots in the event that these provisions were
determined to be inconsistent with customary commercial practice. Class
Justification To Include Pilot Proficiency Check Rides In Aviation Services
Contracts Involving Special
Use Missions, May 5, 2000.

The protester has challenged the validity of the May 5 waiver on procedural
grounds. While waivers such as this are subject to a test of reasonableness,
Aalco Forwarding, Inc., supra, at 18, we think the protester has failed to
provide a valid basis here to challenge the waiver. FAR sect. 12.302(c)
provides:

The request for waiver must describe the customary commercial practice found
in the marketplace, support the need to include a term or condition that is
inconsistent with that practice and include a determination that use of the
customary commercial practice is inconsistent with the needs of the
Government. A waiver may be requested for an individual or class of
contracts for that specific item.

There is no prohibition in the regulation against the granting of waivers
following the issuance of the RFP. Additionally, our review of the
memorandum supporting the waiver shows that all the information required by
the regulation was included in the waiver or was considered by the
authorized official who granted the waiver, including why these requirements
are necessary. [3]

Finally, Crescent argues that the mandatory use of OAS Form 23 (Aircraft Use
Report) as an invoice impermissibly tailored the FAR provision concerning
invoices in a manner inconsistent with commercial practice. The agency
responded to this protest contention by issuing an amendment to each
solicitation stating that the OAS Form 23 may be used as an invoice. Agency
Report, Tab K, RFP amend. 1, at 2. Therefore, according to the agency, the
contractor is to complete OAS Form 23 to describe the daily services it has
provided in support of the agency, and the contractor may use the same form
as an invoice, if it elects to do so. Agency Report at 3. In response to the
amendment and agency's explanation, Crescent labels OAS Form 23 a "de facto
invoice," since the form still must be used to describe the daily services
provided. Protester's Comments at 2-3. However, the fact remains that the
OAS Form 23 is not a required invoicing form, so it cannot be said to
impermissibly tailor the invoicing terms and conditions.

The protests are denied.

Comptroller General

of the United States

Notes

1. Because the solicitations are very similar but may not be identical in
paragraph and page number references, all citations are to RFP No. 8000-03.

2. The protester also lists in its protest 88 clauses that appear in the
RFPs that it contends, without any further explanation, are inconsistent
with customary commercial practice. Protest at 2-3. The agency responded in
its report by examining a portion of the clauses to which Crescent objected,
and noting and documenting comparable provisions found in various commercial
contracts. Contracting Officer's Statement at 5. Since Crescent did not
further discuss this contention in its comments responding to the report, we
deem these issues abandoned and will not consider them further.
International Management and Communications Corp., B-272456, Oct. 23, 1996,
96-2 CPD para. 156 at 2-3 n.2.

3. We see nothing improper with approval of this waiver by the Director of
OAS. Under FAR sect. 12.302(c), waivers are to be considered in accordance with
agency procedures. The Director of OAS has been delegated full authority to
discharge a broad range of duties on behalf of the Secretary of the Interior
on all matters relating to contracting for aviation services. See 205
Department of Interior Departmental Manual (DM) 11.1 (Apr. 20, 1987); 112 DM
12.1, 12.3 (Dec. 17, 1997). According to these agency documents, the
Director of OAS appears to be the department-wide authority of aircraft and
aircraft-related service contracts and appears to be the appropriate
official to make the findings and determination on behalf of the Department
supporting the waiver.