B-139762, JUNE 23, 1959, 38 COMP. GEN. 861

B-139762: Jun 23, 1959

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DID NOT REACH THE CONTRACTING OFFICE UNTIL AFTER THE DEADLINE FOR PROPOSALS HAD EXPIRED DOES NOT HAVE ANY RIGHT TO REQUIRE THE CONTRACTING OFFICER TO NEGOTIATE IN PERSON WITH HIM. THE DUTY OF THE CONTRACTING OFFICER IN A NEGOTIATED PROCUREMENT BEING DISCHARGED WHEN NEGOTIATIONS ARE CONDUCTED TO THE BEST ADVANTAGE OF THE GOVERNMENT AND AWARD IS MADE TO THE OFFEROR SUBMITTING THE BEST FINAL PROPOSAL. OFFERORS WERE REQUESTED TO QUOTE PRICES FOR SIMILAR SERVICES IN CONNECTION WITH AN ESTIMATED 103 BUILDINGS EXPECTED TO BE ADDED TO THE CENTRAL HEATING DISTRIBUTION SYSTEM DURING THE CONTRACT PERIOD AND AN ADDITIONAL 81 UNITS OF UNDERGROUND STEAM DISTRIBUTION SYSTEM TO BE USED WITH THE NEW BUILDINGS.

B-139762, JUNE 23, 1959, 38 COMP. GEN. 861

CONTRACTS - NEGOTIATION - CONTRACTING OFFICER'S DUTY AN OFFEROR WHO, AFTER BEING GIVEN AN OPPORTUNITY TO REDUCE HIS SECOND LOW OFFER FOR FURNISHING SERVICES UNDER A PROCUREMENT NEGOTIATED UNDER 10 U.S.C. 2304 (A) (6), FAILS TO RESPOND AND WHO, BECAUSE OF AN AIRPLANE DELAY, DID NOT REACH THE CONTRACTING OFFICE UNTIL AFTER THE DEADLINE FOR PROPOSALS HAD EXPIRED DOES NOT HAVE ANY RIGHT TO REQUIRE THE CONTRACTING OFFICER TO NEGOTIATE IN PERSON WITH HIM, THE DUTY OF THE CONTRACTING OFFICER IN A NEGOTIATED PROCUREMENT BEING DISCHARGED WHEN NEGOTIATIONS ARE CONDUCTED TO THE BEST ADVANTAGE OF THE GOVERNMENT AND AWARD IS MADE TO THE OFFEROR SUBMITTING THE BEST FINAL PROPOSAL.

TO THE UNITED STATES MAINTENANCE CORPORATION, JUNE 23, 1959:

WE REFER AGAIN TO YOUR LETTER OF JUNE 1, 1959, WITH ENCLOSURES, PROTESTING AN AWARD TO ANY OTHER OFFEROR PURSUANT TO REQUEST FOR QUOTATION NO. 59-SVC-26 FOR OPERATION AND MAINTENANCE OF THE CENTRAL HEAT AND POWER PLANT AT GOOSE AIR BASE, LABRADOR.

THE REQUEST FOR QUOTATION, DATED MARCH 17, 1959, SOLICITED OFFERS TO FURNISH ALL LABOR, EQUIPMENT AND MATERIALS (WITH SOME EXCEPTIONS) AND TO PERFORM ALL SERVICES NECESSARY FOR THE OPERATION AND MAINTENANCE OF THE CENTRAL HEAT AND POWER PLANT AND MISCELLANEOUS FACILITIES. IN ADDITION, OFFERORS WERE REQUESTED TO QUOTE PRICES FOR SIMILAR SERVICES IN CONNECTION WITH AN ESTIMATED 103 BUILDINGS EXPECTED TO BE ADDED TO THE CENTRAL HEATING DISTRIBUTION SYSTEM DURING THE CONTRACT PERIOD AND AN ADDITIONAL 81 UNITS OF UNDERGROUND STEAM DISTRIBUTION SYSTEM TO BE USED WITH THE NEW BUILDINGS. OFFERS WERE TO BE SUBMITTED BY APRIL 16, 1959.

TWO OFFERS WERE RECEIVED WHICH PROVED TO BE WORTHY OF ADDITIONAL CONSIDERATION: YOURS AT $268,881 ( CANADIAN) ON THE BASIC BID AND NO CHARGE FOR SERVICES IN CONNECTION WITH THE OPTIONAL ITEMS; AND THE OFFER OF P.M.W. CONSTRUCTION, LTD., AT $250,000 ( CANADIAN) ON THE BASIC BID AND $75 PER MONTH ON EACH UNIT OF THE OPTIONAL ITEMS.

THE REPORT OF THE CONTRACTING OFFICER STATES THAT THE UNIT PRICE FOR THE ADDITIVE ITEMS IN THE P.M.W. OFFER WAS AN APPARENT ERROR SINCE THE UNITS WERE NEW AND WOULD BE UNDER CONSTRUCTION CONTRACTOR'S WARRANTY FOR ONE YEAR AFTER GOVERNMENT ACCEPTANCE. IT IS STATED THAT THE FOREGOING INFORMATION WAS CONVEYED TO P.M.W. FOR CONFIRMATION, AND IN REPLY THE FOLLOWING TELEGRAM WAS SENT BY P.M.W. TO THE PROCUREMENT OFFICE:

XPMWT 149 ATTENTION CAPT. KELLY REFERENCE QUOTATION NUMBER 59-SVC 26 PURCHASE AUTHORITY IE-E-60-1 OUR PROPOSAL DATED 6 APRIL 1959 AND INCORPORATING AMENDMENT THERE TO PER OUR TEL DATED 9 APRIL COLON WE HEREWITH AMEND OUR PROPOSAL BY DELETING UNIT PRICES PER MONTH AS SHOWN ON SHEET TWO OF TWO AND INSERTING ONE DOLLAR EACH PER MONTH INSTEAD STOP THIS CHANGE IS, DUE TO CLERICAL ERROR IN ORIGINAL UNIT PRICE COMPUTATIONS WHICH WAS INADVERTENTLY INCORPORATED IN OUR PROPOSAL END.

THE CHANGE MADE THE P.M.W. OFFER THE LOWER OF THE TWO UNDER CONSIDERATION. BY TELEGRAM OF APRIL 30, 1959, YOUR FIRM WAS ADVISED BY THE PROCUREMENT OFFICE AS FOLLOWS:

RE OUR REQUEST FOR QUOTATION 59-SVC-26 OPERATION AND MAINTENANCE OF CENTRAL HEAT AND POWER PLANT AND YOUR QUOTATION DATED 16 APRIL 1959 THIS HEADQUARTERS IS FINALIZING NEGOTIATIONS ON REFERENCED PROJECT. INASMUCH AS YOUR CORPORATION IS NOT PRESENTLY THE LOW BIDDER THE GOVERNMENT IS AFFORDING YOU THE OPPORTUNITY OF SUBMITTING A REVISED BID. THE PRESENT LOW BIDDER IS PMW CORPORATION OF NEW YORK. PMW CORPORATION REVISED THEIR ORIGINAL QUOTATION AND YOUR CORPORATION IS BEING AFFORDED THE SAME OPPORTUNITY. IF YOU INTEND TO REDUCE YOUR QUOTATION PLEASE INDICATE SO BY RETURN WIRE. HOWEVER, IT IS BROUGHT TO YOUR ATTENTION THAT YOU ARE UNDER NO OBLIGATION WHATSOEVER TO REDUCE YOUR BID. WE REQUEST AN AFFIRMATIVE OR NEGATIVE REPLY NO LATER THAN 6TH MAY. IF A REPLY IS NOT RECEIVED BY THIS DATE THE GOVERNMENT WILL ASSUME THAT YOUR ORIGINAL BID STANDS.

SINCE YOU DID NOT SUBMIT A LOWER OFFER WITHIN THE TIME LIMIT AS EXTENDED (NOR TO THE BEST OF OUR KNOWLEDGE HAVE YOU SUBMITTED A LOWER OFFER TO THIS DATE), IT IS PROPOSED TO MAKE AWARD TO THE P.M.W. COMPANY.

IN YOUR LETTER OF MAY 29, 1959, TO THE OFFICE OF THE SECRETARY OF THE AIR FORCE, A COPY OF WHICH WAS ENCLOSED WITH YOUR LETTER OF JUNE 1, 1959, YOU STATE THAT UPON RECEIVING NOTICE OF THE REDUCTION IN THE P.M.W. BID YOU REQUESTED REVENUE TRAVEL ORDERS IN ORDER TO RETURN TO GOOSE BAY FROM SAN FRANCISCO FOR CONTRACT NEGOTIATIONS. YOU STATE FURTHER THAT YOUR REQUESTED AN EXTENSION OF THE DEADLINE IN THE CONTRACTING OFFICER'S TELEGRAM TO GIVE YOU THE OPPORTUNITY TO OBTAIN YOUR CONTRACT FILES AND COST DATA WHICH WERE THEN IN WASHINGTON. THE CONTRACTING OFFICER EXTENDED HIS DEADLINE TO NOON OF MAY 7. HOWEVER, BECAUSE OF DELAYS IN AIRCRAFT DEPARTURE FROM SAN FRANCISCO YOU STATE THAT YOU DID NOT ACTUALLY ARRIVE IN WASHINGTON UNTIL AFTER THE DEADLINE AND SENT TO THE CONTRACTING OFFICER A TELEGRAM STATING IN PART:

* * * I INSIST ON OUR RIGHT TO PERSONALLY NEGOTIATE WITH YOU * * *. AM RETURNING TO GOOSE ON OR ABOUT MAY 15 FOR FURTHER CONTRACT NEGOTIATIONS AND INSIST THAT YOU TAKE NO ACTION ADVERSE TO OUR INTERESTS PRIOR TO MY ARRIVAL. AS THE LOWEST QUALIFIED BIDDER WE ARE ENTITLED TO FULL OPPORTUNITY FOR NEGOTIATION. REFUSAL TO PERMIT FURTHER PERSONAL NEGOTIATION WOULD BE PREJUDICIAL TO OUR INTERESTS AND IN FAVOR OF OUR COMPETITOR. IN YOUR LETTER TO THE OFFICE OF THE SECRETARY OF THE AIR FORCE YOU STATE THE FOLLOWING AS THE BASIS FOR YOUR PROTEST:

AS A SUBSTANTIATION OF OUR FORMAL PROTEST, WE CHARGE THAT THE ABOVE PROCEDURES WHICH ARE DOCUMENTED BY THE ATTACHED ENCLOSURES AMOUNTED TO (1) AN AUCTION OF THE BIDS WHICH IS CONTRARY TO AIR FORCE PROCUREMENT POLICY, AND (2) A VIOLATION OF OUR CONTRACTUAL RIGHTS UNDER PUBLIC LAW AND ADVERSE TO THE INTERESTS OF THE U.S. GOVERNMENT IN THAT THE PROCEDURES TO EFFECT THE LOWEST POSSIBLE COST TO THE GOVERNMENT HAD NOT BEEN FOLLOWED, AND THAT, INTENTIONALLY OR UNINTENTIONALLY, FAVORITISM HAS BEEN SHOWN TO ANOTHER BIDDER, WHICH IS PREJUDICIAL TO OUR INTERESTS.

AN ADMINISTRATIVE DECISION APPEARS PROPERLY TO HAVE BEEN MADE IN THIS CASE TO NEGOTIATE FOR THE SERVICES IN QUESTION UNDER THE PROVISION OF 10 U.S.C. 2304 (A) (6). THE TERM "NEGOTIATION" IS DEFINED AT 10 U.S.C. 2302 AS TO "MAKE WITHOUT FORMAL ADVERTISING.' IN SUCH PROCUREMENTS IT IS OUR VIEW THAT THE CONTRACTING OFFICER IS UNDER A DUTY TO CONDUCT THE NEGOTIATION TO THE BEST ADVANTAGE OF THE GOVERNMENT AND TO PLACE THE CONTRACT WITH THE OFFEROR MAKING THE BEST FINAL PROPOSAL.

IN THIS CASE, THE ATTENTION OF THE P.M.W. COMPANY WAS DIRECTED TO THE FACT THAT ITS BID ON THE OPTIONS APPEARED UNREALISTIC IN VIEW OF THE CONSTRUCTION CONTRACTOR'S WARRANT APPLICABLE TO THE ADDITIVE ITEMS OF THE CONTRACT. YOU RECEIVED AMPLE NOTICE OF THE FACT THAT YOUR OFFER, OF THOSE UNDER ACTIVE CONSIDERATION, BECAME SECOND LOW. YOU WERE GIVEN A REASONABLE OPPORTUNITY TO REDUCE YOUR OFFER BUT YOU HAVE FAILED TO DO SO. AS INDICATED ABOVE, THE TERM "NEGOTIATION" IS VERY BROADLY DEFINED. ARE UNAWARE OF ANY REQUIREMENT, WHETHER BY STATUTE, REGULATION, OR OTHERWISE, WHICH WOULD IMPOSE UPON THE CONTRACTING OFFICER THE DUTY OF CONDUCTING SUCH NEGOTIATIONS IN PERSON ACROSS A TABLE FROM THE PROSPECTIVE CONTRACTOR. INDEED, IN THIS INSTANCE, IT APPEARS THAT SUCH PROCEDURE AS YOU CONTEND FOR MIGHT, IN VIEW OF THE TRANSPORTATION DIFFICULTIES EXPERIENCED, HAVE SO DELAYED CONTRACT EXECUTION AS TO MAKE IT IMPOSSIBLE FOR A CONTRACTOR OTHER THAN THE INCUMBENT TO BE IN A POSITION TO BEGIN OPERATIONS ON THE FIRST DAY OF THE CONTRACT PERIOD.

AS ALREADY NOTED, THE CONTRACTING OFFICER'S DUTY IN CONDUCTING NEGOTIATIONS IS TO OBTAIN THE BEST CONTRACT FOR THE UNITED STATES. THERE IS NO INDICATION THAT THE CONTRACTING OFFICER FAILED TO GIVE ANY OFFEROR A REASONABLE OPPORTUNITY TO SUBMIT AN OFFER AT A PRICE MORE IN THE INTEREST OF THE GOVERNMENT THAN THAT SUBMITTED BY P.M.W.

YOU ALSO CONTEND THAT P.M.W. WAS DISQUALIFIED FROM THE SAME WORK LESS THAN A YEAR AGO DUE TO A BOILER EXPLOSION WHICH OCCURRED IN MAY 1958, WHILE THE OPERATION OF THE BOILER AND PLANT WAS IN THE CUSTODY AND CONTROL OF P.M.W. THE STATEMENT OF THE CONTRACTING OFFICER INDICATES THAT HE HAS BEEN UNABLE TO FIND ANY SUBSTANTIATION FOR YOUR ALLEGATION.

IN ACCORDANCE WITH THE FOREGOING, WE MUST CONCLUDE THAT THERE HAS NOT BEEN PRESENTED ANY BASIS UPON WHICH WE MAY QUESTION THE LEGALITY OF THE PROPOSED AWARD TO P.M.W. ..END :