B-160324, APR. 5, 1967

B-160324, APR. 5, 1967

TO POLARAD ELECTRONICS CORPORATION:

REFERENCE IS MADE TO A LETTER DATED MARCH 9, 1967, AND SUBSEQUENT CORRESPONDENCE, REQUESTING RECONSIDERATION OF OUR DECISION B-160324, FEBRUARY 16, 1967, WHEREIN WE HELD THAT THE SINGER COMPANY, METRICS DIVISION, SHOULD BE PERMITTED TO PARTICIPATE IN STEP TWO OF INVITATION FOR BIDS (IFB) NO. 600-1075-66, ISSUED BY THE NAVY PURCHASING OFFICE (NPO) FOR THE PROCUREMENT OF 37 MICROWAVE SPECTRUM ANALYZERS. THE FACTS PERTAINING TO THIS SOLICITATION, WHICH ARE APPARENTLY NOT DISPUTED BY YOU, ARE FULLY DISCUSSED IN OUR DECISION OF FEBRUARY 16, 1967, AND AND THEY WILL NOT BE RESTATED HERE.

IN OUR DECISION OF FEBRUARY 16, 1967, WE CONSIDERED THE PROPRIETY OF THE CONTRACTING OFFICER'S SOLICITATION "IN THE BEST INTEREST OF THE GOVERNMENT" OF A FURTHER PROPOSAL FROM SINGER WITHOUT REFERENCE TO THE LATE PROPOSALS PROVISIONS OF ARMED SERVICES PROCUREMENT REGULATION 2 503.1 (A) (VI), THE TECHNICAL EVALUATION OF SUCH PROPOSAL ON ITS MERITS, AND THE DETERMINATION THAT IT WAS ACCEPTABLE UNDER STEP ONE OF THE INVITATION. THEREAFTER, HOWEVER, THE CONTRACTING OFFICER CONCLUDED THAT IT CONSTITUTED A NEW BASIC TECHNICAL APPROACH COMPLETELY DIFFERENT FROM SINGER'S ORIGINAL PROPOSAL AND, FOR SUCH REASON, THE SECOND PROPOSAL WAS TREATED AS A LATE PROPOSAL AND REJECTED IN ACCORDANCE WITH THE "LATE PROPOSALS" CLAUSE OF THE IFB. ALTHOUGH WE DID NOT AGREE WITH THE CONTRACTING OFFICER'S ACTION, WE CONCLUDED THAT:

"TAKING INTO CONSIDERATION THE NATURE OF THE FIRST STEP IN A TWO STEP PROCUREMENT, AND THE PURPOSE OF RESTRICTING THE CONSIDERATION OF TECHNICAL PROPOSALS TO A DEFINITE TIME, INCLUDING TIME FOR RESUBMITTALS AND REEVALUATIONS, WE THINK THAT THE LATER SUMMARY REJECTION OF SINGER'S TECHNICALLY ACCEPTABLE PROPOSAL ON AN OVERLITERAL READING OF THE LATE PROPOSALS PROVISIONS WITHOUT DUE REGARD FOR THE SPIRIT AND PURPOSE OF THE TWO-STEP PROCEDURES WAS IN DEROGATION OF THE GOVERNMENT'S INTEREST IN SECURING MAXIMUM COMPETITION FROM QUALIFIED SOURCES. * * *"

INITIALLY, YOU MAINTAIN THAT THE CONTRACTING OFFICER WAS NOT AUTHORIZED TO REQUEST AN ADDITIONAL PROPOSAL FROM SINGER BEYOND THE TIME SPECIFIED IN THE IFB FOR RECEIPT OF TECHNICAL PROPOSALS SINCE ITS ORIGINAL PROPOSAL WAS "UNACCEPTABLE" WITHIN THE MEANING OF ASPR 2 503.1 (E) (III). AND YOU CONTEND THAT THE PARTICIPATION OF SINGER IN STEP TWO ON THE BASIS OF ITS SECOND TECHNICAL PROPOSAL WOULD BE VIOLATIVE OF THE INTENT AND PURPOSE OF THE TWO-STEP FORMAL ADVERTISING PROCEDURE, AND PREJUDICIAL TO THE OTHER OFFERORS SINCE SINGER HAS HAD A TIME ADVANTAGE IN THE PREPARATION AND DEVELOPMENT OF THE EQUIPMENT OFFERED IN ITS SECOND PROPOSAL.

THE TWO-STEP PROCEDURE WAS INITIATED AND INTENDED TO EXTEND THE BENEFITS OF COMPETITIVE ADVERTISING TO PROCUREMENTS WHICH PREVIOUSLY WERE EITHER NEGOTIATED OR CONDUCTED ON A SOLE-SOURCE BASIS. WHILE THE SECOND STEP OF THIS PROCEDURE IS CONDUCTED IN ACCORDANCE WITH THE RATHER RIGOROUS RULES OF FORMAL ADVERTISING PROCEDURES (ASPR 2-503.2), THE FIRST STEP, IN FURTHERANCE OF THE GOAL OF MAXIMIZED COMPETITION, CONTEMPLATES THE QUALIFICATION OF AS MANY SOURCES AS POSSIBLE. THIS GOAL MUST HOWEVER BE BALANCED BY THE NEED OF THE PROCURING ACTIVITIES TO FULFILL THEIR REQUIREMENTS WITHIN GIVEN TIME LIMITS. IN THIS REGARD, WE INDICATED IN OUR DECISION THAT THE PURPOSE OF LIMITING THE CONSIDERATION OF PROPOSALS TO A SPECIFIED TIME IS PRIMARILY FOR THE GOVERNMENT'S BENEFIT. AGAINST THE OBJECTION THAT THE TWO-STEP PROCEDURE WAS RESTRICTIVE OF FULL AND FREE COMPETITION, WE RECOGNIZED THE NECESSITY FOR PROCUREMENT OFFICIALS TO REASONABLY RESTRICT THE CONSIDERATION OF PROPOSALS "IF THEY ARE TO ACHIEVE THEIR EVALUATION AND CONSUMMATE THEIR COMMITMENTS WITHIN THEIR TIME LIMITATIONS.' 40 COMP. GEN. 35; ID. 40. THUS, HAD THE CONTRACTING OFFICER REFUSED FURTHER CONSIDERATION TO SINGER AFTER NOTIFICATION THAT ITS ORIGINAL PROPOSAL WAS "UNACCEPTABLE" WITHIN THE MEANING OF ASPR 2- 503.1 (E) (III), OUR OFFICE WOULD NOT HAVE OBJECTED TO SUCH ACTION. HOWEVER, AT THE SEPTEMBER 22 MEETING BETWEEN SINGER AND NPO REPRESENTATIVES A FURTHER PROPOSAL WAS AFFIRMATIVELY SOLICITED AFTER SINGER DESCRIBED IN COMPLETE PHYSICAL AND ELECTRICAL DETAIL THE EQUIPMENT OFFERED IN ITS SEPTEMBER 29, 1966, SUBMISSION. WE HAVE RECOGNIZED THAT UNDER NORMAL CIRCUMSTANCES THE POSITION STATED IN THE CITED DECISIONS SHOULD NOT BE CONSIDERED AS GRANTING AN OPTION TO DEPART FROM THE STATED TIME LIMITATION SINCE SUCH AN OPTION WOULD RESULT IN ALLEGATIONS OF UNEQUAL TREATMENT, AND THE POSSIBILITY OF RESULTANT PREJUDICE TO OTHER QUALIFIED OFFERORS. OUR OFFICE HAS, HOWEVER, NOT OBJECTED TO AN AWARD TO A LOW BIDDER WHO WAS ALLOWED TO AMEND A TECHNICAL PROPOSAL AFTER HE HAD BEEN NOTIFIED OF ITS "UNACCEPTABILITY.' 43 COMP. GEN. 255. CF. 45 ID. 24.

OF COURSE, THE CONSIDERATION OF SUPPLEMENTAL INFORMATION OR ADDITIONAL PROPOSALS AND THE CORRECTION OF DEFICIENCIES AFTER THE OPENING OF BIDS PURSUANT TO STEP TWO STAND ON A DIFFERENT GROUND. QUITE CLEARLY, TO PERMIT THE ACCEPTANCE OF A SUBSTITUTE ITEM AFTER BID OPENING, WHEN PRICES ARE REVEALED, WOULD RESULT IN AN UNFAIR ADVANTAGE WHICH WOULD BE PREJUDICIAL TO THE OTHER BIDDERS. 45 COMP. GEN. 487. HOWEVER, THE CONSIDERATION OF TECHNICAL PROPOSALS UNDER STEP ONE AFTER THE TIME FIXED FOR THE SUBMISSION OF TECHNICAL PROPOSALS WOULD NOT NECESSARILY RESULT IN PREJUDICE TO THE OTHER OFFERORS. IN RESPONDING TO THE QUESTION OF WHETHER SINGER OBTAINED A PREJUDICIAL TIME ADVANTAGE, WE STATED IN OUR DECISION OF FEBRUARY 16, 1967, THAT:

"* * * UNDER THESE PARTICULAR CIRCUMSTANCES, NO PREJUDICE TO THE OTHER QUALIFIED SOURCES WOULD NECESSARILY RESULT IF SINGER WERE PERMITTED TO PARTICIPATE IN STEP TWO SINCE THE RECORD DOES NOT INDICATE THAT THE USE OF TRANSISTORIZED EQUIPMENT BY SINGER WOULD PLACE EITHER AUL OR POLARAD AT A DISADVANTAGE IN RESPONDING TO THE SECOND STEP, OR THAT THE DEVELOPMENT OF SINGER'S TECHNICAL APPROACH WAS ATTRIBUTABLE ALONE TO THE CONTRACTING OFFICER'S EXTENSION OF THE TIME FOR THE RECEIPT OF PROPOSALS. * * *"

WE ALSO NOTE THAT SINGER CONTINUES TO MAINTAIN THAT IT ORIGINALLY WITHHELD AN OFFER OF ITS PROTOTYPE TRANSISTORIZED EQUIPMENT BECAUSE OF UNCERTAINTY AS TO THE REQUIREMENTS OF THE PURCHASE DESCRIPTION. FURTHER, IT IS CLEAR THAT, IN VIEW OF THE PURPOSE OF THE FIRST STEP, THE MERE FACT OF INCREASED COMPETITION CANNOT BE SAID TO BE PREJUDICIAL TO THE ALREADY QUALIFIED OFFERORS. INSOFAR AS YOU SUGGEST THAT YOUR FIRM HAS LOST A COMPETITIVE ADVANTAGE BY REASON OF SINGER'S PARTICIPATION, WE MUST REJECT THE INFERENCE THAT IT WAS PREJUDICIAL. MOREOVER, WE HAVE BEEN INFORMALLY ADVISED BY NPO THAT, CONSISTENT WITH OUR DECISION OF FEBRUARY 16, YOU WERE AFFORDED AN OPPORTUNITY, BUT DECLINED BY YOU, TO SUPPLEMENT YOUR ORIGINAL PROPOSAL TO OFFER ADDITIONAL EQUIPMENTS IN CONFORMITY WITH THE PURCHASE DESCRIPTION. WE THEREFORE ADHERE TO OUR DECISION THAT THE PARTICIPATION OF SINGER IN STEP TWO IS PROPER UNDER ALL THE CIRCUMSTANCES.

YOU NEXT CONTEND THAT, IN ANY CASE, SINGER'S SECOND TECHNICAL PROPOSAL OFFERING A PROTOTYPE TRANSISTORIZED SPECTRUM ANALYZER DID NOT COMPLY WITH PARAGRAPH 3.1 OF THE PURCHASE DESCRIPTION, WHICH PROVIDES AS FOLLOWS:

"GENERAL.

"3.1. IT IS INTENDED THAT OFF-THE-SHELF COMMERCIALLY AVAILABLE EQUIPMENTS WITH PROVEN RELIABILITY AND MAINTAINABILITY BE PROVIDED WITH SUCH MINOR MODIFICATIONS AS ARE REQUIRED TO MEET THE REQUIREMENTS ESTABLISHED HEREIN.'

IN SUPPORT OF YOUR POSITION THAT SINGER'S PROTOTYPE DID NOT CONFORM TO THE CITED PARAGRAPH, YOU NOTE THAT SINGER HAS JUST RECENTLY ANNOUNCED AS READY FOR MARKETING THE SPECTRUM ANALYZER OFFERED IN ITS SEPTEMBER 29, 1966, PROPOSAL. HOWEVER, IN REGARD TO THE INTENDED EFFECT OF THIS CLAUSE, WE HAVE BEEN ADVISED BY NPO AS FOLLOWS:

"2. THIS PARAGRAPH WAS INCLUDED AS A GENERAL INTRODUCTION TO THE PURCHASE DESCRIPTION. AT THE TIME THIS SOLICITATION WAS ISSUED, THE NAVY DID NOT KNOW OF A COMMERCIALLY AVAILABLE MODEL WHICH WOULD MEET THE REQUIREMENTS OF THE PURCHASE DESCRIPTION. ON THE OTHER HAND, THE NAVY DID NOT BELIEVE THAT IT WOULD BE FEASIBLE FOR ANY FIRM TO DESIGN AND ENGINEER A UNIT FROM THE GROUND UP WITHIN THE TIME FRAME OF THIS PROCUREMENT. THEREFORE, PARAGRAPH 3 WAS INSERTED IN THE PURCHASE DESCRIPTION TO SUGGEST TO PROSPECTIVE OFFERORS THAT THE MOST PRACTICAL WAY TO MEET THE NAVY'S REQUIREMENT WOULD BE TO APPLY MINOR MODIFICATIONS TO A UNIT WHICH HAD ALREADY BEEN DESIGNED AND ENGINEERED. THROUGH A TECHNICAL DESCRIPTION OF THE BASIC EQUIPMENT AND THE MODIFICATIONS THERETO, OFFERORS WERE EXPECTED TO DEMONSTRATE THE REQUISITE RELIABILITY AND MAINTAINABILITY IN THE STEP ONE PROPOSAL. PARAGRAPH 3 OF THE PURCHASE DESCRIPTION WAS NOT INTENDED TO CONSTITUTE A SPECIFICATION REQUIREMENT THAT THE SPECTRUM ANALYZER TO BE FURNISHED UNDER A RESULTING CONTRACT, BE INCLUDED IN A COMMERCIAL CATALOGUE, OR HAVE A HISTORY OF SUBSTANTIAL COMMERCIAL SALES.'

YOU PRESENT ESSENTIALLY THE SAME CONTENTION PREVIOUSLY URGED BY SINGER WITH RESPECT TO THE PROPOSALS SUBMITTED BY YOUR FIRM, AUL INSTRUMENTS, INC., AND LAVOIE LABORATORIES, INC., AND REJECTED BY OUR OFFICE AS A MATTER PRIMARILY FOR DETERMINATION BY THE TECHNICAL PERSONNEL OF THE PROCURING ACTIVITY. 40 COMP. GEN. 35; 19 ID. 587; 17 ID. 554. IN REGARD TO THE TECHNICAL EVALUATION OF SINGER'S SECOND PROPOSAL, WE HAVE BEEN ADVISED BY NPO THAT "THE EQUIPMENT PROPOSED WAS SO DESCRIBED IN TERMS WITH RESPECT TO THE PURCHASE DESCRIPTION THAT NAVELEX TECHNICAL EVALUATORS WERE SATISFIED THAT THE EQUIPMENT OFFERED WOULD MEET THE REQUIREMENTS OF PROVEN RELIABILITY AND MAINTAINABILITY.' IN VIEW OF THIS DETERMINATION AND SINCE WE HAVE BEEN ADVISED THAT ALL PROPOSALS WERE EVALUATED ON THE SAME BASIS IN REFERENCE TO THE CITED PARAGRAPH OF THE PURCHASE DESCRIPTION, WE WOULD NOT BE JUSTIFIED IN QUESTIONING THE CONTRACTING AGENCY'S TECHNICAL EVALUATION OF SINGER'S SECOND PROPOSAL.