B-168485 (2), MAR. 30, 1970

B-168485 (2), MAR. 30, 1970

CONTRACTS--NEGOTIATION--DISCLOSURE OF PRICE, ETC.--AUCTION TECHNIQUE PROHIBITION AIR FORCE DISCLOSURE OF COMPETITOR'S PRICE TO PROTESTANT OFFEROR IN LETTER DENYING ITS PROTEST TO PROPOSED CONTRACT AWARD WAS UNNECESSARY, BECAUSE PROTESTANT HAD NOT BEEN REJECTED ON BASIS OF PRICE AND IN EVENT FURTHER NEGOTIATIONS ARE REQUIRED PRIOR TO AWARD SUCH PRICE DISCLOSURES WOULD COMPROMISE PROCUREMENT INTEGRITY BY ENCOURAGING AUCTION TECHNIQUES WHICH ARE TO BE AVOIDED. ADDITIONALLY, PROTESTANT SHOULD HAVE BEEN ADVISED OF SPECIFIC QUESTIONS TO BE ASKED OF IT PRIOR TO NEGOTIATIONS, OR PROVIDED OPPORTUNITY TO REVISE PROPOSAL AFTER IT HAD BEEN APPRISED OF PROBLEM AREAS THROUGH ORAL NEGOTIATIONS. SEE 47 COMP. GEN. 336 (1967).

TO MR. SECRETARY:

ENCLOSED IS A COPY OF OUR DECISION OF TODAY TO ADCOM (A TELEDYNE COMPANY), RELATIVE TO ITS PROTEST AGAINST THE PROPOSED AWARD OF A CONTRACT TO ANOTHER OFFEROR UNDER REQUEST FOR QUOTATIONS NO. F30602-69 Q-0260, ISSUED BY THE ROME AIR DEVELOPMENT CENTER (RADC). THE PROTEST WAS THE SUBJECT OF A REPORT DATED FEBRUARY 19, 1970, FROM THE CHIEF, CONTRACT PLACEMENT DIVISION, DIRECTORATE, PROCUREMENT POLICY, DCS/S&L.

WHILE FOR THE REASONS STATED WE DENIED THE PROTEST, WE BRING TO YOUR ATTENTION THE FACT THAT IN THIS CASE THE PROTESTOR WAS ADVISED, IN EFFECT, OF ITS COMPETITOR'S PRICE BY THE AIR FORCE LETTER OF NOVEMBER 19, 1969, WHICH DENIED THE PROTEST. SUBSEQUENTLY, THE COMPANY FILED A PREAWARD PROTEST WITH THIS OFFICE, AND SINCE THE PROTEST WAS ULTIMATELY DENIED WE DO NOT FEEL THE GOVERNMENT WAS PREJUDICED BY THE PRICE DISCLOSURE IN THIS CASE. WE WISH TO POINT OUT, HOWEVER, THAT THE DISCLOSURE MADE IN THIS CASE WAS NOT NECESSARY SINCE THE PROTESTOR HAD NOT BEEN REJECTED ON THE BASIS OF PRICE. MOREOVER, IN A PROPER CASE THIS OFFICE MIGHT WELL CONCLUDE THAT FURTHER NEGOTIATIONS ARE REQUIRED PRIOR TO AWARD AND IN THAT EVENT SUCH A DISCLOSURE OF A COMPETITOR'S PRICE WOULD COMPROMISE THE INTEGRITY OF THE PROCUREMENT BY ENCOURAGING AUCTION TECHNIQUES. ACCORDINGLY, WE REQUEST THAT SUCH DISCLOSURES BE AVOIDED IN THE FUTURE.

WE ALSO NOTE THAT IN THE PRESENT CASE ADCOM QUESTIONED THE ADEQUACY OF THE NEGOTIATIONS BETWEEN RADC AND THE COMPANY. WHILE IT WAS NOT NECESSARY TO EXPAND UPON THIS OBJECTION IN OUR DECISION TO ADCOM, WE WISH TO BRING TO YOUR ATTENTION CERTAIN OBSERVATIONS IN THIS REGARD. WE NOTE THAT THE COMPANY APPARENTLY WAS ADVISED PRIOR TO THE NEGOTIATION SESSION ONLY THAT RADC DESIRED TO DISCUSS ITS TECHNICAL PROPOSAL IN AN ATTEMPT TO UPGRADE ITS ACCEPTABILITY. IT SEEMS TO US THAT FOR COMPETITIVE NEGOTIATIONS TO BE MEANINGFUL AND EFFECTIVE, NEGOTIATIONS SHOULD INFORM OFFERORS AS TO THE AREAS IN WHICH THEIR PROPOSALS ARE BELIEVED TO BE DEFICIENT TO THE END THAT COMPETITIVE OFFERORS ARE GIVEN AN OPPORTUNITY TO SUPPORT OR REVISE THEIR PROPOSALS TO SATISFY THE GOVERNMENT'S REQUIREMENTS. SEE 47 COMP. GEN. 336, 342 (1967). WHILE WE CAN APPRECIATE THAT INFERIOR ASPECTS OF RESEARCH AND DEVELOPMENT PROPOSALS MAY NOT BE EASILY AMENABLE TO MEANINGFUL NEGOTIATIONS WITHOUT IMPROPERLY DISCLOSING THE SUBSTANCE OF THE SUPERIOR PROPOSAL, WE FEEL THAT ADCOM COULD HAVE BEEN ADVISED IN ADVANCE OF THE SPECIFIC QUESTIONS TO BE ASKED OF IT OR, IN THE ALTERNATIVE, PROVIDED AN OPPORTUNITY TO REVISE ITS PROPOSAL AFTER IT HAD BEEN APPRISED OF THE PROBLEM AREAS BY VIRTUE OF THE ORAL NEGOTIATIONS.