TITLE:  ï¿½Use of Fiscal Year 2003 Funds for Boeing 737 Aircraft Lease Payments, B-300222, March 28, 2003
BNUMBER:  B-300222
DATE:  March 28, 2003
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 Use of Fiscal Year 2003 Funds for Boeing 737 Aircraft Lease Payments, B-300222,
March 28, 2003

    
B-300222
    
    
    
    
March 28, 2003
    
The Honorable John McCain
United States Senate

   Subject:  Use of Fiscal Year 2003 Funds for Boeing 737 Aircraft Lease
Payments
    
Dear Senator McCain:
    
This responds to your letter of October 28, 2002, concerning section 8147
of the Department of Defense Appropriations Act for Fiscal Year 2003, Pub.
L. No. 107-248, 116 Stat. 1519, 1572 (2002).  Section 8147 provides that
none of the funds appropriated by the Department of Defense Appropriations
Act for Fiscal Year 2003 may be used for leasing of transport/VIP aircraft
*under any contract entered into under any procurement procedures other
than pursuant to the Competition [in] Contracting Act.*  You asked whether
the Department of Defense, in light of section 8147, is authorized to use
fiscal year 2003 funds to incur or liquidate obligations for lease
payments for Boeing 737 aircraft.  For the reasons given below, we
conclude that section 8147 does not preclude the Department of Defense
from using fiscal year 2003 funds to incur or liquidate obligations for
lease payments for Boeing 737 aircraft since DOD conducted the procurement
under the provisions of the Competition In Contracting Act of 1984
(CICA)[1], which by its own terms authorizes the use of noncompetitive
procedures. 
    
BACKGROUND
    
Section 8159 of the Department of Defense (DOD) Appropriations Act for
Fiscal Year 2002 provided as follows:
    
The Secretary of the Air Force may, from funds provided in this Act or any
future appropriations Act, establish and make payments on a multi-year
pilot program for leasing general purpose Boeing 767 aircraft and Boeing
737 aircraft in commercial configuration.
    
Defense Appropriations Act for Fiscal Year 2002, Pub. L. No. 107-117, S:
8159(a), 115 Stat. 2230, 2284 (2002).  On March 15, 2002, the Air Force
synopsized[2] its intent to award under section 8159 a sole-source
contract to the Boeing Company for the lease of, and maintenance support
for, *four commercial Boeing 737 special mission aircraft (C-40B/C),* on
the basis that *[t]he Boeing Company is the manufacturer of the C-40B and
C-40C special mission aircraft and the only contractor that has
demonstrated the expertise and working knowledge necessary to provide
these aircraft.*  Federal Business Opportunities (FedBizOpps), Mar. 15,
2002.  On June 5, 2002, the Assistant Secretary of the Air Force for
Acquisition executed a justification and approval (J&A) for award of a
contract to Boeing on a sole-source basis for up to four Boeing 737 (C-40)
aircraft.  The J&A justified use of noncompetitive procedures on the basis
that Boeing was the only source capable of furnishing the aircraft and
services.  On September 17, 2002, the agency awarded a contract to Boeing
for the lease of two C-40 aircraft, with options for two additional
aircraft.
    
On October 23, 2002, the DOD Appropriations Act for Fiscal Year 2003 was
enacted.  Section 8147 of that Act provides that: *None of the funds
appropriated by this Act may be used for leasing of transport/VIP aircraft
under any contract entered into under any procurement procedures other
than pursuant to the Competition [in] Contracting Act.* Pub. L. No.
107-248, S: 8147, 116 Stat. 1519, 1572 (2002).  On October 28, 2002, you
requested our opinion on whether, in light of section 8147, the Department
of Defense is authorized to use fiscal year 2003 funds to incur or
liquidate obligations for lease payments for Boeing 737 aircraft.  By
letter of November 4, 2002, we asked the General Counsel of DOD for his
opinion on the question and for further information regarding the Air
Force's lease of the Boeing 737 aircraft.[3]  Letter from Susan A. Poling,
Managing Associate General Counsel, GAO, to William J. Haynes III, General
Counsel, DOD, Nov. 4, 2002.
    
On December 23, 2002, EADS North America, Inc. filed a bid protest with
GAO under authority of CICA, 31 U.S.C. S:S: 3551-3556,[4] alleging, in
part, that DOD's obligation of fiscal year 2003 funds for the lease
payments to Boeing for Boeing 737 aircraft violated section 8147.  In both
its response to our letter on January 14, 2003, and in its reply to the
EADS protest required by CICA, 31 U.S.C. S: 3553(b)(2), DOD defended its
actions stating that it complied fully with CICA in awarding the lease
contract.  Letter from Douglas P. Larsen, Deputy General Counsel
(Acquisition & Logistics), DOD, to Susan A. Poling, Managing Associate
General Counsel, GAO, Jan. 14, 2003.  Because of the similarity of the
issue raised in the EADS protest and the question you asked us, and in
order to protect EADS' statutory right under CICA to a decision on the bid
protest, we explained to your staff in early January that we would await
resolution of the bid protest before responding to your request. 
    
EADS argued that DOD's obligation of fiscal year 2003 funds for the lease
payments to Boeing for Boeing 737 aircraft violated section 8147 because
that contract was not entered into on the basis of full and open
competition, which EADS believed section 8147 mandates.  We issued our bid
protest decision on March 26, 2003, dismissing the protest on the grounds
that EADS' protest furnished no basis for GAO to challenge DOD's actions
with respect to the C-40/Boeing 737 lease contract awarded to Boeing. 
EADS North America, Inc., B-291805, Mar. 26, 2003.
    
ANALYSIS
    
By its plain terms, section 8147 provides that none of the funds
appropriated by the Act may be used for leasing of transport/VIP aircraft
*under any contract entered into under any procurement procedures other
than pursuant to the Competition [in] Contracting Act.* Pub. L. No.
107-248, S: 8147, 116 Stat. 1519, 1572.  CICA, to which the section
apparently refers, permits an agency to *use procedures other than
competitive procedures* under certain limited circumstances.  10 U.S.C. S:
2304(c).  These circumstances include where the property and services
needed by the agency are available from only one responsible source.  10
U.S.C. S: 2304(c)(1).  Therefore, CICA does not require that an agency
acquire goods and services only through the use of competitive
procedures.   The J&A executed by the Assistant Secretary of the Air Force
for Acquisition justified the sole-source award to Boeing on the grounds
that only Boeing could furnish the property and services needed by the
agency.[5]  Since section 8147 required only that the transport/VIP
aircraft lease in issue here be entered into pursuant to CICA * making no
mention of the use of competitive versus noncompetitive procedures * and
DOD conducted the procurement under the provisions of CICA authorizing the
use of noncompetitive procedures, DOD's actions were consistent with
section 8147. 
    
We recognize that statements in the Act's legislative history encourage us
to read section 8147 as requiring procurement of the lease through
competitive procedures.  See, e.g., 148 Cong. Rec. S7709 (July 31, 2002);
148 Cong. Rec. S10520 (Oct. 16, 2002).  In matters concerning the
interpretation of a statute, the first question is whether the statutory
language provides an unambiguous expression of the intent of the
Congress.  If it does, the matter ends there, for the unambiguously
expressed intent of the Congress must be given effect.  See Chevron U.S.A.
Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43
(1984); B-289209, May 31, 2002 (referring to the obligation to give an
act's words their plain and ordinary meaning).  While views expressed in a
statute's legislative history may sometimes be relevant in statutory
interpretation, those views are not a substitute for the statute itself
where the meaning of the statute appears plain on its face.  AAA Eng'g and
Drafting, Inc.,
B-225605, May 7, 1987, 87-1 CPD P: 488 at 5.   Since section 8147, by its
plain terms, only requires compliance with CICA, and does not provide that
competitive procedures must be used for the leasing of transport/VIP
aircraft, we find no basis for reading such a requirement into the
provision. 
    
CONCLUSION
    
Section 8147 does not preclude DOD from using fiscal year 2003 funds to
incur or liquidate obligations for lease payments for Boeing 737 aircraft
where DOD conducted the procurement under the provisions of CICA
authorizing the use of noncompetitive procedures. 
    
I trust that you will find this opinion useful.  If you have any questions
regarding this matter, please telephone Susan A. Poling or Thomas H.
Armstrong of my staff at
202-512-5644.
    
Sincerely yours,
    
    
           /signed/
    
Anthony H. Gamboa
General Counsel
    
    
    
    
    
B-300222
    
DIGEST
    
    
    
Statutory provision precluding the use of appropriated funds to lease
aircraft *under any contract entered into under any procurement procedures
other than pursuant to* the Competition in Contracting Act of 1984 (CICA)
does not preclude the Department of Defense from using fiscal year 2003
funds to incur or liquidate obligations for lease payments for aircraft
where the Department of Defense awarded the lease under the provisions of
CICA authorizing the use of noncompetitive procedures.
    
    
    
    
    
    

   ------------------------

   [1] Pub. L. No. 98-369, Div. B, tit. VII, S:S: 2701-2753, 98 Stat. 1175
(1984) (among other things, the Competition in Contracting Act amended
Title 31 of the U.S. Code to give the General Accounting Office bid
protest authority and Title 10 of the U.S. Code with regard to
requirements for defense agency procurements).
[2] Both statutory and regulatory provisions require agencies to publish
(synopsize) proposed contract actions, in this case the award of a
sole-source contract, to allow interested parties the opportunity to
participate or bid on the contract.  41 U.S.C. S: 416 and 48 C.F.R. S:
5.201 (2002).
[3] As we explained to your staff at that time, our practice, whenever
possible, is to seek and consider the views of relevant agency counsel in
developing our decisions and opinions.
[4] Pub. L. No. 98-369, Div. B, tit. VII, S: 2741(a), 98 Stat. 1175, 1201
(1984).
[5] It appears from a review of the J&A and discussions with the Air
Force, that only one additional source replied to the Air Force's synopsis
of its proposed action.  Apparently, that source determined that it was
not interested in meeting the Air Force's needs.  Under these
circumstances, the Air Force is not required to seek additional sources. 
See generally Amtech Systems Corp., B-252414, Jun. 29, 1993,
93-1 CPD P: 500.