B-169535, JUL. 15, 1970

B-169535: Jul 15, 1970

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FINK: REFERENCE IS MADE TO YOUR LETTER OF JULY 6. YOU EXPRESS THE OPINION THAT OUR DECISION IS UNFAIR TO GE IN TWO WAYS: (1) THERE WAS A DISCLOSURE OF GE DATA WHICH GIVES THE OTHER BIDDER (FAIRCHILD- HILLER CORPORATION) A COMPETITIVE ADVANTAGE IN THE PROPOSED REPROCUREMENT BY NASA. NASA PREPARED A DETAILED ADMINISTRATIVE REPORT WHICH WAS SUBMITTED TO US IN RESPONSE TO THE ALLEGATIONS OF FAIRCHILD PROTESTING NASA'S SELECTION OF GE FOR THE ATS CONTRACT. THE ADMINISTRATIVE REPORT INCLUDED CERTAIN DOCUMENTATION ASSOCIATED WITH THE SOURCE SELECTION WHICH WAS CONSIDERED BY THE NASA DIRECTOR OF PROCUREMENT TO BE ADMINISTRATIVELY CONFIDENTIAL. WE WERE REQUESTED NOT TO RELEASE PROPOSED PRICES. THE NASA RESTRICTIONS WERE ENFORCED BY US.

B-169535, JUL. 15, 1970

TO MR. DAVID J. FINK:

REFERENCE IS MADE TO YOUR LETTER OF JULY 6, 1970, CONCERNING OUR DECISION OF JULY 2, 1970, B-169535, WHICH RECOMMENDED TO THE ADMINISTRATOR OF NASA THAT THE PROPOSED AWARD TO GENERAL ELECTRIC COMPANY OF THE CONTRACT FOR THE ADVANCED TECHNOLOGY SATELLITES (F AND G), BE RECONSIDERED. YOU EXPRESS THE OPINION THAT OUR DECISION IS UNFAIR TO GE IN TWO WAYS: (1) THERE WAS A DISCLOSURE OF GE DATA WHICH GIVES THE OTHER BIDDER (FAIRCHILD- HILLER CORPORATION) A COMPETITIVE ADVANTAGE IN THE PROPOSED REPROCUREMENT BY NASA; AND (2) THE DECISION CONTAINS SOME OBSERVATIONS WHICH MIGHT BE READ AS SUGGESTING THAT GE DID SOMETHING WRONG IN THE NEGOTIATIONS.

AS STATED IN YOUR LETTER, NASA PREPARED A DETAILED ADMINISTRATIVE REPORT WHICH WAS SUBMITTED TO US IN RESPONSE TO THE ALLEGATIONS OF FAIRCHILD PROTESTING NASA'S SELECTION OF GE FOR THE ATS CONTRACT. THE ADMINISTRATIVE REPORT INCLUDED CERTAIN DOCUMENTATION ASSOCIATED WITH THE SOURCE SELECTION WHICH WAS CONSIDERED BY THE NASA DIRECTOR OF PROCUREMENT TO BE ADMINISTRATIVELY CONFIDENTIAL. THIS INCLUDED SOURCE EVALUATION BOARD REPORTS AS WELL AS CORRESPONDENCE AND MINUTES OF THE ORAL DISCUSSIONS DEALING WITH THE VARIOUS PROPOSALS. IN ADDITION, WE WERE REQUESTED NOT TO RELEASE PROPOSED PRICES, EVALUATED PRICES, AND TECHNICAL SCORES. DESPITE STRONG URGINGS BY FAIRCHILD FOR ACCESS TO THIS INFORMATION, THE NASA RESTRICTIONS WERE ENFORCED BY US.

THE NASA ADMINISTRATIVE REPORT ALSO INCLUDED MATERIAL WHICH WAS NOT RESTRICTED FOR DISTRIBUTION. INCLUDED IN THIS MATERIAL WAS AN EXHIBIT COMPRISING NASA'S DISCUSSION OF 14 POINTS OF TECHNICAL TRANSFUSION ALLEGED BY FAIRCHILD. THE ONLY RESTRICTION NASA IMPOSED ON THIS MATERIAL WAS IN REGARD TO A GE PROPOSED PRICE CONTAINED IN A LETTER DATED SEPTEMBER 17, 1969, WHICH WAS CONTAINED IN THE NASA MATERIAL. THIS PART OF THE NASA ADMINISTRATIVE REPORT, WITH THE GE PRICE BLANKED OUT, WAS FURNISHED TO BOTH FAIRCHILD AND GE.

YOU BELIEVE THAT THE NASA TECHNICAL DISCUSSION DISCLOSED IMPORTANT DETAILS OF THE GE PROPOSALS, "THUS INDIRECTLY PROVIDING OUR COMPETITION THE KIND OF ADVANTAGE WHICH IT ERRONEOUSLY CONTENDED HAD BEEN GIVEN US." IT SHOULD BE NOTED, HOWEVER, THAT THE NASA DISCUSSION WAS NOT LIMITED TO THE GE PROPOSALS. IT ALSO COVERED THE FAIRCHILD PROPOSALS. THE INFORMATION WAS FURNISHED BY NASA IN AN ATTEMPT TO RESPOND TO THE FAIRCHILD ALLEGATIONS TO THE FULLEST EXTENT POSSIBLE AND AT THE SAME TIME TO PRESERVE THE COMPETITIVE ENVIRONMENT IN THE EVENT OF FURTHER COMPETITIVE NEGOTIATIONS.

YOU ALSO STATE THAT YOU HAD NO OPPORTUNITY TO ANSWER THE FAIRCHILD REBUTTAL TO THE NASA REPORT AND WERE REFUSED THE FAIRCHILD PRESENTATION ON THE GROUND THAT "FAIRCHILD DID NOT WANT GE TO HAVE IT." YOU WERE FURNISHED WITH A COPY OF THE BASIC FAIRCHILD ALLEGATIONS AS CONTAINED IN ITS LEGAL MEMORANDUM OF APRIL 21, 1970, AND, AS STATED ABOVE, THE NONRESTRICTED PORTION OF THE NASA ADMINISTRATIVE REPORT WAS GIVEN TO BOTH PARTIES. YOU WERE ALSO INVITED BY US THROUGHOUT THIS CASE TO SUBMIT ANY COMMENTS YOU DEEMED PERTINENT. IN THIS REGARD, A NUMBER OF MEETINGS WERE HELD BETWEEN YOUR OFFICIALS AND MEMBERS OF OUR STAFF. AS PREVIOUSLY MENTIONED, ALL PARTIES INVOLVED WERE CONCERNED WITH THE POSSIBLE DISCLOSURE OF INFORMATION OF A CONFIDENTIAL NATURE. WITH REGARD TO THE FAIRCHILD REBUTTAL, WE INFORMED YOU THAT FAIRCHILD HAD SUBMITTED A LETTER DATED JUNE 18, 1970, WITH ENCLOSURES. FAIRCHILD ADVISED US, HOWEVER, THAT IN VIEW OF THE FACT IT HAD BEEN DENIED ACCESS TO CERTAIN INFORMATION WHICH IT DEEMED PERTINENT TO ITS PROTEST, FAIRCHILD FELT THAT ITS MATERIAL SHOULD ALSO BE RESTRICTED.

ON JUNE 30, 1970, A MEETING WAS HELD WITH YOUR REPRESENTATIVES AT OUR OFFICE. WE BELIEVE THAT THERE WAS A FRANK AND OPEN DISCUSSION OF ALL THE PERTINENT ISSUES INVOLVED IN OUR CONSIDERATION OF THE CASE AT THE MEETING INCLUDING A DETAILED DISCUSSION OF THE CIRCUMSTANCES SURROUNDING THE SUBMISSION OF THE FINAL REVISED PROPOSALS. I AM INFORMED THAT DURING THE COURSE OF THE MEETING THE MATTER OF FAIRCHILD'S REBUTTAL LETTER WAS MENTIONED AND YOUR REPRESENTATIVES WERE ADVISED OF FAIRCHILD'S OBJECTION TO ITS RELEASE. IT WAS ALSO STATED THAT IN OUR VIEW FAIRCHILD HAD NOT RAISED ANY NEW ISSUES IN THE REBUTTAL. IT IS MY UNDERSTANDING THAT YOUR REPRESENTATIVES WERE TOLD THEY COULD PURSUE THIS MATTER FURTHER BUT THAT THIS WAS NOT DONE. AT THE CONCLUSION OF THIS MEETING WE WERE SATISFIED THAT ALL THE PERTINENT INFORMATION RELATING TO THE PROTEST HAD BEEN FURNISHED TO GE.

ON JULY 1, 1970, WE RECEIVED A LETTER FROM GE MAKING REFERENCE TO THE JUNE 30 MEETING AND CONFIRMING GE'S LEGAL ARGUMENTS WITH RESPECT TO THE FINAL SUBMISSION OF PROPOSALS. THE LETTER CONCLUDED AS FOLLOWS:

"FINALLY, SINCE NONE OF THE FAIRCHILD HILLER MATERIAL HAS BEEN MADE AVAILABLE TO GENERAL ELECTRIC, EXCEPT FOR THE SUMMARY OF THEIR PROTEST, I WOULD APPRECIATE YOUR NOT MAKING EITHER THIS LETTER OR THE SUBSTANCE THEREOF AVAILABLE TO FAIRCHILD HILLER FOR COMMENT OR OTHERWISE."

BASED ON THE RECORD AND THE FACTS REPORTED TO ME I BELIEVE THAT BOTH GE AND FAIRCHILD WERE GIVEN FULL AND EQUAL OPPORTUNITY TO RESPOND TO ALL THE ISSUES CONSIDERED IN OUR DECISION AND, IN FACT, THE PARTIES DID RESPOND TO THESE ISSUES.

YOUR OTHER CONCERN RELATES TO CERTAIN STATEMENTS CONTAINED IN OUR DECISION OF JULY 2, 1970. WITH REGARD TO THE DISTRIBUTION OF THE FAIRCHILD PROPOSAL, PRIOR TO THE TIME GE'S PROPOSAL WAS RECEIVED, OUR LETTER STATES:

"WE AGREE THAT THERE IS NO EVIDENCE OF A LEAK. ON THE OTHER HAND IT CANNOT BE CONCLUSIVELY STATED THAT THERE WAS NO LEAK. A SITUATION WAS CREATED WHERE A LEAK WHICH MIGHT HAVE AFFECTED THE RESULTS OF THE COMPETITION WAS POSSIBLE. AND THE DANGER OF SUCH A LEAK EXISTED NOT ONLY DURING THE TWO OR THREE DAY PERIOD REFERRED TO, BUT DURING THE ENTIRE WEEK THAT INTERVENED BETWEEN SUBMISSION OF THE TWO PROPOSALS." YOU BELIEVE THAT OUR STATEMENT IMPLIES THAT A LEAK MIGHT WELL HAVE OCCURRED AND THEREFORE TENDS TO PUT GE IN AN UNFAVORABLE LIGHT. WE THINK YOU HAVE MISUNDERSTOOD OUR COMMENTS.

THE EVIDENCE OF RECORD DID NOT REVEAL THE EXISTENCE OF A LEAK AND WE SO STATED IN OUR DECISION AS QUOTED ABOVE. IT MUST BE RECOGNIZED, HOWEVER, THAT THERE IS ALWAYS A DANGER OF PREMATURE DISCLOSURE OF INFORMATION DURING THE COURSE OF A NEGOTIATED COMPETITIVE PROCUREMENT, AND FOR THIS REASON THE CONCEPTS OF CUTOFF DATES AND LATENESS WERE INTRODUCED INTO THE NEGOTIATION PROCESS. IN THIS CASE GODDARD FAILED TO FOLLOW PROPER PROCEDURES AND THEREBY CREATED A SITUATION WHERE PREMATURE DISCLOSURE OF INFORMATION IN THE FAIRCHILD PROPOSAL WAS POSSIBLE. THE COMMENTS IN OUR DECISION WERE DIRECTED TO THE AGENCY ACTION. WE DID NOT THEN AND DO NOT NOW IMPLY THERE WERE ANY IMPROPRIETIES ON THE PART OF GE.

YOU ALSO OBJECT TO OUR COMMENTS ON PAGE 8 OF THE DECISION ON FAIRCHILD'S ALLEGATION THAT A "COACHING" PROCEDURE WAS USED TO BRING GE INTO A WINNING POSITION. YOU BELIEVE THAT OUR DECISION WAS IN THE VEIN OF SUGGESTING THAT SUCH A PRACTICE WAS INDULGED IN. AS YOU KNOW, THIS ALLEGATION HAD BEEN MADE BY FAIRCHILD, AND OUR SOLE PURPOSE IN COMMENTING ON IT IN OUR DECISION WAS TO POINT OUT TO NASA THAT NEITHER THE GENERAL ACCOUNTING OFFICE NOR THE NASA PROCUREMENT REGULATION DIRECTIVE NO. 69-5 REQUIRED A PROCEDURE WHEREBY INFORMATION WHICH WOULD GIVE AN UNFAIR COMPETITIVE ADVANTAGE TO ANY PROPOSER WOULD BE DISCLOSED DURING THE NEGOTIATION PROCESS. HOWEVER, WE EXPRESSED NO OPINION ON THE MERITS OF THE FAIRCHILD ALLEGATION, AND IT IS NOT CORRECT TO DRAW ANY INFERENCE FROM OUR DECISION THAT WE DID.

WITH REFERENCE TO THE PROPOSED PRICES, WHICH YOU INDICATE ON PAGE 2 OF YOUR LETTER HAVE NOW BEEN DISCLOSED, THE DECISION STATED ON PAGE 5 THAT "ON AN EVALUATION OF CONTRACTOR-PROPOSED COST IT WAS DETERMINED THAT GE WAS APPROXIMATELY 2 PERCENT LOWER THAN FAIRCHILD." THE 2 PERCENT DIFFERENCE IS NOT THE DIFFERENCE IN THE ESTIMATED COST PROPOSALS SUBMITTED BY GE AND FAIRCHILD BUT IS THE DIFFERENCE IN ESTIMATED COSTS AFTER ADJUSTMENTS BY NASA OF GE AND FAIRCHILD'S PROPOSED COSTS. THE NASA ADJUSTMENTS TO EACH PROPOSAL WERE NOT DISCLOSED AND OUR DECISION DOES NOT MENTION THE COST PROPOSALS OF EITHER GE OR FAIRCHILD.

AN ADDITIONAL POINT I WANT TO MENTION IS THE IMPLICATION THAT OUR DECISION MAY HAVE BEEN INFLUENCED BY POLITICAL CONSIDERATIONS. THIS WAS NOT SAID BY GE REPRESENTATIVES BUT IT IS MENTIONED IN THE ARTICLE CARRIED BY THE EVENING STAR ON JULY 7, 1970. I WANT TO ASSURE YOU THAT OUR CONCLUSION WAS REACHED ONLY AFTER AN IMPARTIAL REVIEW AND ANALYSIS OF THE FACTS INVOLVED. IN THE MANY YEARS IN WHICH THIS OFFICE HAS BEEN RENDERING DECISIONS ON BID PROTESTS I BELIEVE THAT IT HAS EARNED A REPUTATION FOR FAIRNESS AND OBJECTIVITY, AND IT IS WELL ESTABLISHED THAT OUR DECISIONS ARE NOT MADE ON THE BASIS OF POLITICAL CONSIDERATIONS.

IN THE LAST PARAGRAPH OF YOUR LETTER YOU REQUEST THAT NASA BE PROVIDED WITH ALL INFORMATION FURNISHED FAIRCHILD SO THAT THE AGENCY MAY BE ABLE TO EVALUATE ALL OF THE FACTS IN FORMULATING RULES FOR THE REPROCUREMENT AND THAT SUCH INFORMATION ALSO BE MADE AVAILABLE TO YOU. ALL INFORMATION FURNISHED TO FAIRCHILD WAS ALSO FURNISHED TO GE. WE BELIEVE THAT NASA IS AWARE OF THE INFORMATION FURNISHED. HOWEVER, I AM SENDING THE ADMINISTRATOR A COPY OF THIS LETTER WITH THE SUGGESTION THAT IF NASA HAS ANY QUESTION CONCERNING THE INFORMATION FURNISHED FAIRCHILD IT SHOULD LET US KNOW.

Nov 21, 2017

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    We dismiss the protest because it raises a matter of contract administration over which we do not exercise jurisdiction.
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