B-171609, MAY 12, 1971, 50 COMP GEN 788

B-171609, MAY 12, 1971, 50 COMP GEN 788

CONTRACTS - NEGOTIATION - REQUEST FOR PROPOSALS - MINIMUM NEEDS REQUIREMENT - SAME FOR ALL OFFERORS IN THE PROCUREMENT UNDER A REQUEST FOR PROPOSALS OF A GROUND SIMULATOR TO BE USED TO SUPPORT THE TRAINING OF NAVIGATORS WHERE PROPOSAL DEFICIENCIES WERE IDENTIFIED, CLARIFIED, THE GOVERNMENT WORK STATEMENT CHANGED, AND CONTRACTORS ALLOWED TO DETERMINE THE MANNER OF CORRECTION, SINCE THE MINIMUM REQUIREMENTS IN SEVERAL CRITICAL HIGH COST AREAS ESTABLISHED BY ORAL CLARIFICATION WITH ONE OFFEROR WERE NOT REFLECTED IN ANY FORMAL AMENDMENT, THE POSSIBILITY THAT ALL OFFERORS WERE NOT COMMITTED TO THE SAME MINIMUM REQUIREMENTS HAS BEEN DISPELLED BY THE INDEPENDENT EXAMINATION MADE BY THE NATIONAL BUREAU OF STANDARDS OF THE TECHNICAL PROPOSALS, AN EXAMINATION CONDUCTED BY THE BUREAU AS THE UNITED STATES GENERAL ACCOUNTING OFFICE WAS NOT EQUIPPED TO EVALUATE THE UNDERTAKINGS REPRESENTED IN THE TECHNICAL PROPOSALS SUBMITTED. CONTRACTS - NEGOTIATION - EVALUATION FACTORS - PRICE ELEMENTS FOR CONSIDERATION A PROVISION IN A SOLICITATION FOR THE NEGOTIATION OF A FIXED PRICE, MULTI -YEAR CONTRACT FOR A GROUND SIMULATOR WHICH PROVIDES THAT IN THE EVALUATION OF PROPOSALS THE GOVERNMENT WOULD ASSESS THE REASONABLENESS, REALISM, AND COMPLETENESS OF PRICE PROPOSALS AND THAT COST ANALYSIS AND NEGOTIATION WOULD BE EMPLOYED IN THE INTEREST OF ESTABLISHING SOUND PRICES DOES NOT REQUIRE REJECTION OF AN UNREALISTICALLY LOW OFFER AS THE PROVISION SERVES ONLY AS AN AID IN DETERMINING WHETHER AN OFFEROR UNDERSTANDS THE SCOPE OF THE WORK, AND IN UNCOVERING MISTAKES AND "BUY INS" IN VIOLATION OF PARAGRAPH 1-311 OF THE ARMED SERVICES PROCUREMENT REGULATION. ALTHOUGH THE MULTI-YEAR PROCUREMENT CONTAINS AN OPTION THAT MINIMIZES "BUY-IN," THE CONTRACT INCLUDES A SPECIAL CLAUSE TO PROTECT AGAINST RECOUPMENT OF LOSSES THROUGH CHANGE ORDERS, AND THE SUBMISSION OF DIFFERENT FREEZE DATES THAT GOVERN THE FINANCIAL RESPONSIBILITY FOR ENGINEERING CHANGE ORDERS HAS NO SIGNIFICANT EFFECT ON SOURCE SELECTION. CONTRACTS - NEGOTIATION - EVALUATION FACTORS - CRITERIA WHERE ALL PROPOSALS ARE EVALUATED ON THE BASIS OF THE SAME PERFORMANCE CRITERIA, THE OMISSION OF THE PRECISE NUMERICAL WEIGHTS TO BE USED IN THE EVALUATION PROCESS DOES NOT REFLECT ON THE ADEQUACY OF THE EVALUATION CRITERIA STATED IN THE REQUEST FOR PROPOSALS FOR A GROUND SIMULATOR. MOREOVER, ANY DOUBT AS TO THE RELATIVE IMPORTANCE OF THE EVALUATION SHOULD HAVE BEEN DISCUSSED AND RESOLVED BEFORE THE CLOSING DATE SET FOR RECEIPT OF PROPOSALS. ALSO, THE USE OF THE NEGOTIATING PROCEDURE AUTHORIZED IN 10 U.S.C. 2304(A) FOR THE MULTI YEAR PROCUREMENT WAS PROPER BECAUSE THE INSUFFICIENCY OF PERFORMANCE SPECIFICATIONS DID NOT PERMIT ADVERTISING FOR BIDS OR USING THE TWO STEP PROCEDURE, AND THE "CLEAN-UP" SESSIONS HELD AFTER THE PRESCRIBED CUTOFF DATE TO CLARIFY MATTERS VERBALLY AGREED UPON WAS NOT PREJUDICIAL TO ANY OFFEROR, AND THE SESSIONS DO NOT CONSTITUTE A VIOLATION OF PARAGRAPH 3-805.1(B) OF THE ARMED SERVICES PROCUREMENT REGULATION.

TO GADSBY AND HANNAH, MAY 12, 1971:

THIS IS IN REPLY TO YOUR LETTER DATED JANUARY 14, 1971, AND SUBSEQUENT CORRESPONDENCE, PROTESTING ON BEHALF OF THE LINK DIVISION OF SINGER- GENERAL PRECISION, INC. (LINK), AGAINST THE PROPOSED AWARD OF A NEGOTIATED CONTRACT BY THE AIR FORCE TO HONEYWELL, INC., FOR THE GROUND SIMULATOR PORTION OF THE UNDERGRADUATE NAVIGATIONAL TRAINING SYSTEM (UNTS).

ESSENTIALLY, IT IS YOUR POSITION THAT HONEYWELL'S PROPOSAL IS NOT RESPONSIVE TO THE SAME MINIMUM REQUIREMENTS ON WHICH THE GOVERNMENT NEGOTIATED WITH LINK, AS EVIDENCED BY THE FACT THAT HONEYWELL IS PROPOSING A 15 TO 20 MILLION DOLLAR SYSTEM WHICH IS UNREALISTIC AND SIGNIFICANTLY LOWER PRICED THAN THE LINK PROPOSAL. IN THE ALTERNATIVE YOU STATE THAT HONEYWELL MAY BE ATTEMPTING TO "BUY-IN," IN VIOLATION OF ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-311 AND DESPITE THE PROVISION FOR REALISTIC AND SOUND PRICING IN THE REQUEST FOR PROPOSALS. IN ADDITION, YOUR PROTEST ALSO RAISES QUESTIONS REGARDING THE ADEQUACY OF THE EVALUATION CRITERIA STATED IN THE REQUEST FOR PROPOSALS, AND YOU CONTEND THE AIR FORCE CONTRAVENED SIGNIFICANT GOVERNING PROCUREMENT REGULATIONS AND INAPPROPRIATELY APPLIED OR FAILED TO APPLY CERTAIN OTHER REGULATIONS. YOUR CONTENTIONS WILL BE CONSIDERED IN THE ORDER THEY ARE SET OUT ABOVE.

BRIEFLY STATED, THE GROUND SIMULATOR IS TO BE USED TO SUPPORT THE TRAINING OF NAVIGATORS IN THE BASIC SKILLS, KNOWLEDGE AND DISCIPLINE REQUIRED TO OPERATE PRESENT AND FUTURE NAVIGATION EQUIPMENT. THE SIMULATOR MUST PROVIDE TRAINING FOR THE OPERATIONAL USE OF ALL CONTROLS, DISPLAYS AND INSTRUMENTS ASSOCIATED WITH THIS TRAINING DEVICE. IT IS TO BE COMPOSED OF 46 STUDENTS STATIONS, WITH PROVISIONS FOR TWO ADDITIONAL STUDENT STATIONS, 12 INSTRUCTOR CONSOLES, APPLICABLE OPERATOR CONSOLES AND ASSOCIATED SIMULATOR SUBSYSTEMS.

THIS PROCUREMENT CALLED FOR A FIXED PRICE, MULTI-YEAR CONTRACT. PERFORMANCE SPECIFICATIONS WERE DEVELOPED BY THE AIR FORCE AND ISSUED TO ALL OFFERORS. IT WAS RECOGNIZED FROM THE START BY THE AIR FORCE AND ALL OFFERORS THAT THERE COULD BE SEVERAL DESIGN APPROACHES TO MEET THE REQUIREMENTS OF THE AIR FORCE STATEMENT OF WORK.

PROPOSAL EVALUATION WAS ACCOMPLISHED SUBSTANTIALLY IN ACCORDANCE WITH THE SOURCE SELECTION PROCEDURES CONTAINED IN AIR FORCE MANUAL 70-10. AS PART OF THE EVALUATION, VALIDATION, AND CONTRACT NEGOTIATION PROCESS, CONTRACTOR'S DEFICIENCIES WERE IDENTIFIED AND EACH OFFEROR WAS INDIVIDUALLY NOTIFIED THEREOF. AT TIMES THE AIR FORCE REQUESTED CLARIFICATIONS FROM OFFERORS REGARDING THEIR PROPOSALS AS WELL AS MODIFICATIONS WHEN A CHANGE IN THE GOVERNMENT'S WORK STATEMENT WAS REQUIRED. EACH MODIFICATION REQUEST WAS ISSUED TO ALL CONTRACTORS. THE DECISION TO CORRECT DEFICIENCIES AND THE MANNER IN WHICH THE CORRECTION WOULD BE ACCOMPLISHED WAS THE DECISION OF EACH OFFEROR.

ONE OF YOUR BASIC ARGUMENTS IS THAT IN SEVERAL CRITICAL HIGH COST AREAS THE AIR FORCE WORK STATEMENT WAS OPEN TO SEVERAL INTERPRETATIONS AND THAT BY ORAL CLARIFICATION A CLEAR MINIMUM REQUIREMENT WAS ESTABLISHED BETWEEN THE AIR FORCE AND LINK. IT IS CONTENDED THAT THIS MINIMUM REQUIREMENT NEVER WAS REFLECTED IN ANY FORMAL AMENDMENT TO THE AIR FORCE WORK STATEMENT OR, IN ALL LIKELIHOOD, IN ANY OF THE SPECIFICATIONS PREPARED BY THE OTHER OFFERORS. LINK HAS REQUESTED THAT WE INDEPENDENTLY EXAMINE THESE CRITICAL AREAS IN ALL OFFERORS' PROPOSALS, AND PARTICULARLY IN THE FINAL HONEYWELL SPECIFICATION (WHICH IS THE KEY CONTRACTUAL DOCUMENT) TO DETERMINE IF HONEYWELL AND THE OTHER OFFERORS HAVE COMMITTED THEMSELVES TO THE SAME UNDERTAKING AS LINK.

SINCE THIS OFFICE IS NOT EQUIPPED TO EVALUATE THE UNDERTAKINGS REPRESENTED IN THE VARIOUS TECHNICAL PROPOSALS WE REQUESTED AND OBTAINED ASSISTANCE FROM THE NATIONAL BUREAU OF STANDARDS (NBS). WITH RESPECT TO YOUR PROTEST WE REQUESTED NBS TO PERFORM AN INDEPENDENT EXAMINATION TO DETERMINE WHETHER OR NOT HONEYWELL HAS BASED ITS PROPOSAL ON THE SAME REQUIREMENTS AS LINK IN THE CONTESTED CRITICAL AREAS STATED IN YOUR PROTEST. SINCE IT IS OUR OPINION THAT CONSIDERATION OF THE PROPOSED CONTRACT WITH HONEYWELL IS SUFFICIENT TO DETERMINE WHETHER YOU WOULD BE PREJUDICED BY THE PROPOSED AWARD, WE DID NOT REQUEST AN EXAMINATION OF ALL PROPOSALS SUBMITTED.

NBS HAS SUBMITTED A REPORT OF ITS FINDINGS, A COPY OF WHICH IS ATTACHED AND INCORPORATED HEREIN AS PART OF OUR DECISION. WE BELIEVE THAT THE VIEWS EXPRESSED IN THAT REPORT CLEARLY SHOW THAT THERE IS NO SUBSTANTIAL BASIS TO THIS PORTION OF YOUR PROTEST.

YOU ALSO CONTEND THAT HONEYWELL MAY BE ATTEMPTING TO "BUY-IN" IN VIOLATION OF ARMED SERVICES PROCUREMENT REGULATION 1-311 AND DESPITE THE PROVISION FOR REALISTIC AND SOUND PRICING IN THE REQUEST FOR PROPOSALS.

THE ABOVE-CITED REGULATION DEFINES "BUY-IN" AS FOLLOWS:

(A) "BUYING IN" REFERS TO THE PRACTICE OF ATTEMPTING TO OBTAIN A CONTRACT AWARD BY KNOWINGLY OFFERING A PRICE OR COST ESTIMATE LESS THAN ANTICIPATED COSTS WITH THE EXPECTATION OF EITHER (I) INCREASING THE CONTRACT PRICE OR ESTIMATED COST DURING THE PERIOD OF PERFORMANCE THROUGH CHANGE ORDERS OR OTHER MEANS, OR (II) RECEIVING FUTURE "FOLLOW ON" CONTRACTS AT PRICES HIGH ENOUGH TO RECOVER ANY LOSSES ON THE ORIGINAL "BUY-IN" CONTRACT. SUCH A PRACTICE IS NOT FAVORED BY THE DEPARTMENT OF DEFENSE SINCE ITS LONG-TERM EFFECTS MAY DIMINISH COMPETITION AND IT MAY RESULT IN POOR CONTRACT PERFORMANCE. WHERE THERE IS REASON TO BELIEVE THAT "BUYING IN" HAS OCCURRED, CONTRACTING OFFICERS SHALL ASSURE THAT AMOUNTS THEREBY EXCLUDED IN THE DEVELOPMENT OF THE ORIGINAL CONTRACT PRICE ARE NOT RECOVERED IN THE PRICING OF CHANGE ORDERS OR OF FOLLOW-ON PROCUREMENTS SUBJECT TO COST ANALYSIS.

IT IS YOUR POSITION THAT A "BUY-IN" IS ILLEGAL BECAUSE OF THE MANDATORY LANGUAGE IN ASPR 1-311(A) STATING THAT THE CONTRACTING OFFICER "SHALL ASSURE" THAT THERE IS NO "GET-WELL" OR "BAILING OUT" OF THE CONTRACTOR.

WITH RESPECT TO THE IMPACT OF THIS REGULATION, WE HAVE CONSISTENTLY HELD THAT IT DOES NOT AFFORD A BASIS FOR REJECTION OF A BID, THERE BEING NO SPECIFIC PROVISION THEREFOR IN THE REGULATION, BUT ONLY PROVISIONS FOR OTHER SPECIFIC ACTIONS TO BE TAKEN BY THE CONTRACTING OFFICER IN THE EVENT "BUYING IN" IS THOUGHT TO BE OCCURRING, OR HAS OCCURRED. B-164951, SEPTEMBER 30, 1968, AND B-167312, SEPTEMBER 19, 1969.

YOU ALSO CONTEND THAT TO PERMIT A "BUY-IN" WOULD BE ILLEGAL IN THIS CASE SINCE THE TERMS OF THE AIR FORCE SOLICITATION REQUIRED REALISTIC AND SOUND PRICING. IN THIS RESPECT YOU HAVE DIRECTED OUR ATTENTION TO ATTACHMENT 3 TO THE SOLICITATION ENTITLED "SOURCE SELECTION AND EVALUATION CRITERIA FOR UNDERGRADUATE NAVIGATION TRAINING SYSTEM," PARAGRAPH IVF). THE PROVISION REFERRED TO PROVIDES THAT IN EVALUATING PROPOSALS THE GOVERNMENT WOULD ASSESS THE REASONABLENESS, REALISM AND COMPLETENESS OF THE BIDDERS' PRICE PROPOSALS AND THAT COST ANALYSIS AND NEGOTIATION WOULD BE EMPLOYED IN THE INTEREST OF ESTABLISHING SOUND PRICES. SINCE THERE ARE VARIOUS VALID MOTIVATIONS WHICH MIGHT INFLUENCE AN OFFEROR TO BID A LOWER PRICE THAN HE COULD SUPPORT WITH COST OR PRICING DATA, WE DO NOT THINK THE LANGUAGE OF PARAGRAPH IVF) CAN REASONABLY BE CONSTRUED AS INDICATING AN INTENTION OR REQUIREMENT ON THE PART OF THE GOVERNMENT TO REJECT ALL OFFERS WHICH, UPON COST OR PRICE ANALYSIS, APPEAR TO BE LOWER THAN THE OFFEROR COULD JUSTIFY. RATHER, WE FEEL THAT IN EVALUATING SUCH PROPOSALS THE COST REALISM IS MORE IMPORTANT TO AID IN DETERMINING WHETHER THE OFFEROR UNDERSTANDS THE SCOPE OF THE WORK REQUIRED, UNCOVERING EVIDENCE OF A MISTAKE, AND ALERTING THE GOVERNMENT TO THE POSSIBILITY OF AN ATTEMPTED "BUY-IN" IN ORDER TO TAKE PRECAUTIONS AGAINST ITS POSSIBLE ADVERSE EFFECTS.

THE RECORD SHOWS THAT THE AIR FORCE BELIEVES HONEYWELL'S PRICE MAY BE UNREALISTICALLY LOW AND, THEREFORE, HAS ATTEMPTED TO INSURE THAT THE LOW PRICE IS NOT THE PRODUCT OF A MISTAKE OR MISUNDERSTANDING. ALSO, A SPECIAL CLAUSE HAS BEEN DEVELOPED FOR INCLUSION IN THE CONTRACT TO PROTECT AGAINST ANY ENDEAVOR TO RECOUP LOSSES THROUGH CHANGE ORDERS AND CLAIMS BASED UPON MISTAKE OR IMPOSSIBILITY OF PERFORMANCE. WHILE YOU ARGUE THAT THE GUARANTEES IN SUCH AN EXCULPATORY CLAUSE ARE ILLUSORY, WE BELIEVE THE CLAUSE CAN REASONABLY BE EXPECTED TO PROTECT THE GOVERNMENT AGAINST THE CONTINGENCIES TO WHICH IT IS DIRECTED. MOREOVER, IN ACCORDANCE WITH THE ABOVE-CITED REGULATION THE OPPORTUNITY FOR "BUYING IN" HAS BEEN MINIMIZED SINCE THIS IS A MULTI-YEAR PROCUREMENT AND IT CONTAINS AN OPTION FOR ALL ANTICIPATED REQUIREMENTS. IN THIS CONNECTION, YOU STATE THAT YOU HAVE LEARNED THAT THERE MAY BE INCREASED REQUIREMENTS OVER AND ABOVE THE PRESENT OPTION QUANTITY. HOWEVER, THE AIR FORCE HAS ADVISED THAT AS LATE AS MARCH 30, 1971, THERE WAS NO FORESEEABLE REQUIREMENT IN ADDITION TO THE OPTION QUANTITY IN THE REQUEST FOR PROPOSALS.

WE HAVE NOTED YOUR REQUEST THAT WE INQUIRE INTO WHETHER THE PROPOSALS OF HONEYWELL AND LINK CONTAIN DIFFERENT "FREEZE DATES," SINCE THESE DATES GOVERN WHICH PARTY HAS THE FINANCIAL RESPONSIBILITY FOR ENGINEERING CHANGE ORDERS. WHILE THE RECORD SHOWS THAT HONEYWELL'S DATA DESIGN FREEZE DATE IS IN FACT LATER THAN LINK'S AND THEREFORE MORE ADVANTAGEOUS TO THE GOVERNMENT, WE DO NOT BELIEVE THIS WOULD BE A VALID BASIS FOR OBJECTING TO THE PROPOSED AWARD, SINCE IT IS SPECULATIVE AND IMPROBABLE THAT A CONTRACTOR CAN RECOVER AMOUNTS HE UNDERBID THROUGH ENGINEERING CHANGES, AND SINCE CONTRACTING OFFICERS ARE CHARGED UNDER ASPR 1-311(A) WITH A DUTY TO INSURE AGAINST THE RECOVERY OF AMOUNTS FOR PROMISED PERFORMANCE IN THE PRICING OF CHANGE ORDERS. YOU ALSO STATE THAT THE EXISTENCE OF DIFFERENT FREEZE DATES WOULD BE PROOF THAT OFFERORS WERE ASKED TO RESPOND TO MATERIALLY DIFFERENT PERFORMANCE REQUIREMENTS. HOWEVER, THE AIR FORCE HAS ADVISED US THAT EACH CONTRACTOR ESTABLISHED ITS OWN FREEZE DATES AND, IN ANY EVENT, THESE DATES WERE NOT CONSIDERED TO HAVE A SIGNIFICANT EFFECT ON SOURCE SELECTION.

UNDER THE CIRCUMSTANCES, WE FIND NO BASIS FOR CONCLUDING THAT THE AIR FORCE WAS REQUIRED TO REJECT ANY FIRM FIXED PRICE OFFER SOLELY BECAUSE IT MAY BE BELOW COST. WHETHER SUCH AN OFFER SHOULD BE REJECTED IS A MATTER OF JUDGMENT, AND WE DO NOT FEEL THAT WE MAY TAKE ANY LEGAL OBJECTION TO THE EXERCISE OF SUCH JUDGMENT WHERE, AS HERE, THE RISKS TO THE GOVERNMENT HAVE BEEN CAREFULLY EVALUATED AND REASONABLE MEASURES HAVE BEEN TAKEN TO PROTECT THE GOVERNMENT'S INTERESTS.

YOUR PROTEST ALSO QUESTIONS THE ADEQUACY OF THE EVALUATION CRITERIA STATED IN THE REQUEST FOR PROPOSALS. THE SOLICITATION INCORPORATED A COMPREHENSIVE NARRATIVE DESCRIPTION OF THE GENERAL AND SPECIFIC EVALUATION CRITERIA. WITH RESPECT TO THE ORDER OF IMPORTANCE OF THESE CRITERIA THE FOLLOWING GENERAL EXPLANATION WAS PROVIDED IN THE SOLICITATION.

1. THE ABILITY OF THE GROUND SIMULATOR TO PERFORM THE AIR TRAINING COMMAND'S TRAINING SUPPORT TASKS.

2. DELIVERY OF A FULLY OPERATIONAL AND SUPPORTABLE SYSTEM WITHIN THE ESTABLISHED ACQUISITION SCHEDULE.

3. TOTAL COST TO THE GOVERNMENT.

YOU HAVE OBJECTED TO THE ABSENCE OF ANY INDICATION OF THE ACCEPTABLE TRADE-OFFS AMONG THE FACTORS LISTED, AND TO THE LACK OF A PRECISE INDICATION OF THE RELATIVE WEIGHTS ATTACHED TO THE FACTORS. YOU STATE THAT IN THE ABSENCE OF SUCH INFORMATION, OFFERORS HAD NO RATIONAL BASIS UPON WHICH TO PRICE COMPETITIVE PROPOSALS, AND THE FINAL CHOICE BETWEEN DIFFERENT EQUIPMENT WITH SUBSTANTIAL COST DIFFERENTIALS WAS ARBITRARY AND SUBJECTIVE.

WHILE WE HAVE HELD THAT OFFERORS SHOULD BE INFORMED OF THE RELATIVE WEIGHT OR IMPORTANCE ATTACHED TO EVALUATION CRITERIA, WE DO NOT REQUIRE THE DISCLOSURE OF THE PRECISE NUMERICAL WEIGHTS USED IN THE EVALUATION PROCESS. SEE 50 COMP. GEN. 390, DECEMBER 16, 1970. MOREOVER, WE BELIEVE ANY DOUBT YOU MAY HAVE HAD AS TO THE RELATIVE IMPORTANCE OF THE EVALUATION CRITERIA SHOULD HAVE BEEN DISCUSSED AND RESOLVED BEFORE THE CLOSING DATE SET FOR RECEIPT OF PROPOSALS. IN ANY EVENT, OUR REVIEW OF THIS PROCUREMENT, PARTICULARLY THE EVALUATIONS AND REPORTS PREPARED BY THE SOURCE SELECTION EVALUATION BOARD (SSEB) AND THE SOURCE SELECTION ADVISORY COUNSEL (SSAC), SUBSTANTIATES THAT THE AIR FORCE THOROUGHLY REVIEWED AND EVALUATED ALL PROPOSALS ON THE BASIS OF THE SAME PERFORMANCE CRITERIA.

YOU ALSO CONTEND THAT THE AIR FORCE CONTRAVENED SIGNIFICANT GOVERNING PROCUREMENT REGULATIONS AND INAPPROPRIATELY APPLIED OR FAILED TO APPLY CERTAIN OTHER REGULATIONS. PARTICULAR EMPHASIS IS PLACED UPON THE FAILURE OF THE AIR FORCE TO APPLY THE PROVISIONS OF DEPARTMENT OF DEFENSE (DOD) DIRECTIVE 3200.9, AS IMPLEMENTED BY AIR FORCE REGULATION (AFR) 80-20, WHICH ESTABLISH AND IMPLEMENT DOD POLICIES GOVERNING CONCEPT FORMULATION AND CONTRACT DEFINITION IN CERTAIN SPECIFIED DEVELOPMENT PROJECTS. INASMUCH AS THIS PROGRAM IS NOT FINANCED WITH RESEARCH, DEVELOPMENT, TESTING AND ENGINEERING FUNDS, APPLICATION OF THE ABOVE-CITED REGULATIONS WAS NOT REQUIRED. SEE DOD DIRECTIVE 3200.9, PARAGRAPH (VI)(B). MOREOVER, IN THIS CASE THE PROCURING ACTIVITY WAS NOT DIRECTED TO APPLY THE REFERENCED REGULATIONS AS PROVIDED THEREIN, AND AFR 80-20 HAS BEEN RESCINDED. YOU ALSO CONTEND THAT EVEN IF THESE REGULATIONS DID NOT TECHNICALLY GOVERN THIS SITUATION, AS A PRACTICAL MATTER A PRIOR CONTRACT DEFINITION PHASE MIGHT HAVE ELIMINATED ANY PREJUDICE TO LINK WHICH RESULTED FROM THE ALLEGED FAILURE OF THE AIR FORCE TO APPLY COMMON SPECIFICATIONS TO ALL OFFERORS. IN THIS CONNECTION WE NOTE THAT THE INDEPENDENT EVALUATION BY NBS DOES NOT SUBSTANTIATE YOUR ALLEGATIONS OF PREJUDICE RESULTING FROM THE FAILURE TO PROVIDE COMMON SPECIFICATIONS.

YOU STATE THAT EITHER PURPOSELY OR INADVERTENTLY THE AIR FORCE CONDUCTED THIS SOLICITATION AS A TOTAL PACKAGE PROCUREMENT, BUT THAT IT FAILED TO COMPLY WITH THE GOVERNING REGULATIONS IN ASPR 1-330 THROUGH 1 330.6, THEREBY CONTRIBUTING TO THE LACK OF COMMONALITY IN SPECIFICATIONS. NOTE THAT YOU RECOGNIZE THAT THE ABOVE-CITED REGULATIONS WERE CANCELED ON SEPTEMBER 30, 1970, BUT YOU CONTEND, NEVERTHELESS, THAT THE AIR FORCE WAS BOUND BY THE REGULATION PROVISIONS. SINCE OUR INVESTIGATION HAS NOT SHOWN THAT, AS BETWEEN LINK AND HONEYWELL, DIFFERENT PERFORMANCE REQUIREMENTS OR GUIDANCE WAS GIVEN WHICH RESULTED IN PREJUDICE TO LINK, WE SEE NO SUBSTANTIAL BASIS FOR OBJECTING TO THE PROCUREMENT PLAN EMPLOYED IN THIS CASE.

IT IS STATED IN YOUR PROTEST THAT INSOFAR AS THIS WAS A NEGOTIATED PROCUREMENT IT IS INCONSISTENT WITH THE MULTI-YEAR PROCUREMENT SECTIONS OF THE ASPR WHICH EXPRESS A PREFERENCE FOR THE USE OF FORMAL ADVERTISING. MOREOVER, YOU BELIEVE THERE IS A FURTHER INCONSISTENCY HERE SINCE THE RFP, CONTRARY TO REGULATION, EXPRESSLY DE-EMPHASIZED THE IMPORTANCE OF PRICE. OUR REVIEW OF THE RECORD OF THIS CASE ESTABLISHES THAT THE USE OF NEGOTIATION PROCEDURES WAS AUTHORIZED PURSUANT TO 10 U.S.C. 2304(A)(10), AS IMPLEMENTED BY ASPR 3-210.1, BECAUSE THE CONTRACTING OFFICER DETERMINED THAT THE PERFORMANCE SPECIFICATIONS WERE INSUFFICIENTLY DETAILED TO PERMIT ADVERTISED BIDDING OR TWO-STEP FORMAL ADVERTISING PROCEDURES. WITH RESPECT TO THE AIR FORCE INTENTION NOT TO AWARD SOLELY ON THE BASIS OF THE LOWEST PRICE AS EXPRESSED IN THE RFP, THE PROCURING ACTIVITY REQUESTED AND OBTAINED A DEVIATION FROM THE INCONSISTENT PROVISION IN ASPR 1-322.4(A).

FINALLY, IT IS ARGUED THAT THE AIR FORCE VIOLATED ASPR 3-805.1(B) IN FAILING TO PRESCRIBE A CUTOFF DATE FOR NEGOTIATIONS. YOU STATE THAT A MEMORANDUM TO ALL OFFERORS FROM THE CHAIRMAN OF THE SSEB STATED THAT AUGUST 31, 1970, WAS A FIRM DATE FOR SUBMISSION OF SPECIFICATIONS, AND THAT THIS COMMUNICATION WAS THE CLOSEST THING TO THE CLOSING OF NEGOTIATIONS IN THIS PROCUREMENT. WE ARE UNABLE TO AGREE WITH YOUR ANALYSIS IN THIS REGARD. THE RECORD SHOWS THAT ALL CONTRACTORS MET WITH THE AIR FORCE DURING THE PERIOD FROM SEPTEMBER 9 THROUGH NOVEMBER 6, 1970, AND THAT APPROXIMATELY 7 WORKING DAYS WERE SPENT WITH EACH OFFEROR. THE CONTRACTING OFFICER HAS STATED THAT AS THESE NEGOTIATIONS ENDED EACH OFFEROR WAS AWARE OF THE SYSTEM PERFORMANCE REQUIREMENTS AND THAT SPECIFICATION NEGOTIATIONS WERE CONCLUDED. ON NOVEMBER 12 THE CONTRACTING OFFICER ISSUED A REQUEST FOR FINAL AND FIRM PRICES TO BE SUBMITTED BY DECEMBER 7, AND BY DECEMBER 16, 1970, ALL CONTRACT DOCUMENTS WERE SIGNED. THE CONTRACTING OFFICER STATES THAT THERE WAS A NEED FOR FURTHER CLARIFICATIONS BECAUSE EACH OFFEROR NEGLECTED TO REVISE WORDING AS PREVIOUSLY AGREED, AND TO THIS EXTENT FINAL SPECIFICATION "CLEAN-UP" TOOK PLACE WITH EACH OFFEROR FROM DECEMBER 16 THROUGH DECEMBER 22. WE NOTE THAT YOU DO NOT CONTEND THAT THE "CLEAN UP" SESSION WITH LINK INVOLVED MATTERS WHICH HAD NOT BEEN PREVIOUSLY AGREED TO. UNDER THESE CIRCUMSTANCES IT IS OUR OPINION THAT NEGOTIATIONS WERE EFFECTIVELY CLOSED WITH THE SUBMISSION OF FINAL PRICES ON DECEMBER 7, AND THAT NO OFFEROR WAS PREJUDICED BY THE "CLEAN UP" SESSIONS SINCE VERBAL AGREEMENT HAD ALREADY TAKEN PLACE.

WE HAVE NOTED THAT YOUR PROTEST RAISES THE POINT THAT PRICE NEGOTIATIONS WERE NOT CONDUCTED WITH LINK. WHILE SUCH NEGOTIATIONS MIGHT HAVE BEEN ADVISABLE, OUR REVIEW OF THIS MATTER DOES NOT INDICATE ANY ATTEMPT WAS MADE TO NEGOTIATE A CHANGE OF PRICE WITH ANY OFFEROR. MOREOVER, IT DOES NOT APPEAR THAT SUCH NEGOTIATORS WOULD HAVE CHANGED YOUR COMPETITIVE POSITION WITH RESPECT TO HONEYWELL.

FOR THE REASONS STATED ABOVE, YOUR PROTEST IS DENIED.