B-150442, APR. 15, 1963

B-150442: Apr 15, 1963

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ESQUIRE: REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 18. THE WORK COVERED BY THE REQUEST FOR PROPOSALS IS TO BE ACCOMPLISHED IN THREE PHASES. IN THE FIRST PHASE THE CONTRACTOR IS TO STUDY THE AGENCY'S NEEDS AND TO PREPARE SPECIFICATIONS BASED UPON THOSE NEEDS. THE CONTRACTOR IS TO ACCOMPLISH THE WORK UNDER THE SPECIFICATIONS DEVISED DURING THE FIRST PHASE. THE PROPOSALS WERE ANALYZED BY A TEAM OF SEVEN TECHNICAL EVALUATORS. THREE PROPOSALS WERE APPROVED AS TECHNICALLY ACCEPTABLE. THE PRICE SUMMARY AND TECHNICAL POINT SCORES OF THOSE THREE PROPOSALS WERE AS FOLLOWS: TABLE TOTAL PRICE POINT SCORE GOODYEAR AIRCRAFT $ 449. THE FEDERAL AVIATION AGENCY DECIDED THAT IT WAS JUSTIFIED IN MAKING AN AWARD TO GOODYEAR AND IT ADVISED THAT IT INTENDED TO EXECUTE A CONTRACT ON MARCH 19.

B-150442, APR. 15, 1963

TO BARRY PHILLIPS, ESQUIRE:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 18, 1963, AND OTHER CORRESPONDENCE FROM AEROSCIENCE ELECTRONICS, INC., PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANOTHER PROPONENT UNDER FEDERAL AVIATION AGENCY REQUEST FOR PROPOSALS NAFEC-1360, AS AMENDED BY SUPPLEMENTS 1 AND 2, COVERING THE DESIGNING, DEVELOPING AND FURNISHING OF AN AIRBORNE ANALOG DATA COLLECTING SYSTEM.

THE WORK COVERED BY THE REQUEST FOR PROPOSALS IS TO BE ACCOMPLISHED IN THREE PHASES. IN THE FIRST PHASE THE CONTRACTOR IS TO STUDY THE AGENCY'S NEEDS AND TO PREPARE SPECIFICATIONS BASED UPON THOSE NEEDS. IN THE SECOND AND THIRD PHASES, THE CONTRACTOR IS TO ACCOMPLISH THE WORK UNDER THE SPECIFICATIONS DEVISED DURING THE FIRST PHASE.

THE REQUEST FOR PROPOSALS SOLICITED OFFERS FOR THE ACCOMPLISHMENT OF ALL THREE PHASES. IT REQUESTED PROPONENTS TO SUBMIT A TECHNICAL DISSERTATION AND A COST ANALYSIS. IT INDICATED THAT OFFERS SUBMITTED ON A COST-PLUS- FIXED-FEE BASIS WOULD BE CONSIDERED, BUT THAT SPECIAL CONSIDERATION WOULD BE GIVEN TO PROPOSALS BASED ON THE CONTRACTOR SHARING COSTS AND ALSO TO FIRM FIXED-PRICE PROPOSALS. IT PROVIDED FURTHER THAT IN THE EVALUATION OF EACH PROPOSAL THERE WOULD BE CONSIDERED THE INFORMATION SUBMITTED WITH THE PROPOSAL AS WELL AS THE PRICE.

FIFTEEN PROPONENTS RESPONDED WITH PROPOSALS. THE PROPOSALS WERE ANALYZED BY A TEAM OF SEVEN TECHNICAL EVALUATORS. THREE PROPOSALS WERE APPROVED AS TECHNICALLY ACCEPTABLE. THE PRICE SUMMARY AND TECHNICAL POINT SCORES OF THOSE THREE PROPOSALS WERE AS FOLLOWS:

TABLE

TOTAL PRICE POINT SCORE

GOODYEAR AIRCRAFT $ 449,496 73.0

AEROSCIENCE ELECTRONICS 737,782 61.3

GENERAL ELECTRIC 1,012,327 69.2

THE GOODYEAR PROPOSAL, WHICH HAS THE HIGHEST TECHNICAL SCORE AND THE LOWEST PRICE, HAS A MAXIMUM COST LIMITATION WHICH LIMITS THE GOVERNMENT'S POTENTIAL MAXIMUM LIABILITY TO LESS THAN $500,000. AFTER CONSIDERATION OF THESE FACTORS AND REVIEW OF THE AEROSCIENCE PROTEST AND THE ADMINISTRATIVE ACTIONS, THE FEDERAL AVIATION AGENCY DECIDED THAT IT WAS JUSTIFIED IN MAKING AN AWARD TO GOODYEAR AND IT ADVISED THAT IT INTENDED TO EXECUTE A CONTRACT ON MARCH 19, 1963.

IN LETTER OF FEBRUARY 18, 1963, YOU INDICATE THE AEROSCIENCE PROTEST IS GROUNDED ON THREE BASES. THE FIRST BASIS IS THAT THE REQUEST FOR PROPOSALS DID NOT CONTAIN SUFFICIENT INFORMATION TO ENABLE A PROSPECTIVE OFFEROR TO PREPARE A QUOTATION PROPERLY ON THE SECOND AND THIRD PHASES AND FOR THAT REASON WAS IN VIOLATION OF FPR 1-3.802 (C). IN THAT CONNECTION, YOU POINT OUT THAT THE SPECIFICATIONS THAT ARE TO BE UTILIZED IN THE SECOND AND THIRD PHASES OF THE CONTRACT ARE TO BE DEVELOPED DURING THE INITIAL PHASE AND THAT THE ABSENCE OF SUCH SPECIFICATIONS LEAVES IT TO EACH PROPONENT'S CONJECTURE AS TO THE SIZE AND TYPE SYSTEM WHICH MIGHT ULTIMATELY BE REQUIRED TO COMPLETE THE FINAL STAGES OF THE CONTRACT. YOU SUGGEST, THEREFORE, THAT COMPETITION ON AN EQUAL BASIS WAS NOT POSSIBLE ON THE SECOND AND THIRD PHASES SINCE THERE WAS NOT THE REMOTEST POSSIBILITY THAT TWO OFFERORS WOULD PROPOSE THE SAME SIZE AND TYPE SYSTEM AND EQUIPMENT. HOWEVER, YOU BELIEVE THAT AN AWARD FOR JUST THE FIRST PHASE WOULD HAVE BEEN PROPER.

THE CONTRACTING AGENCY HAS RESPONDED TO YOUR CONTENTIONS BY POINTING OUT THAT THE MATTER OF HOW MUCH WORK IS TO BE INCLUDED IN A SINGLE PROCUREMENT IS A MATTER OF JUDGMENT AND THAT IN ITS BEST JUDGMENT IT WAS BETTER TO ACCOMPLISH THIS PROCUREMENT UNDER A SINGLE CONTRACT. FURTHER, WHILE FPR 1 -3.802 (C) PROVIDES THAT "REQUESTS FOR PROPOSALS SHALL CONTAIN THE INFORMATION NECESSARY TO ENABLE A PROSPECTIVE OFFEROR TO PREPARE A QUOTATION PROPERLY," THE AGENCY HAS POINTED OUT THAT THE REGULATION ALSO STATES THAT "THE REQUEST FOR PROPOSALS SHALL BE AS COMPLETE AS POSSIBLE," THE INFERENCE BEING THAT COMPLETE DEFINITION OF SPECIFICATIONS IS NOT REQUIRED WHEN IT IS NOT AVAILABLE, BUT ONLY SO MUCH INFORMATION AND DATA AS IS KNOWN WHEN THE REQUEST FOR PROPOSALS IS ISSUED. ATTENTION ALSO IS DIRECTED TO THE FACT THAT FPR 1-3.210 PERMITS THE NEGOTIATION PROCESS TO BE EMPLOYED IN CASES WHERE IT IS IMPOSSIBLE TO STATE PRECISE REQUIREMENTS. IN THAT CONNECTION, PARAGRAPH (A) (11) OF FPR 1-3.210 CITES, AS AN ILLUSTRATION WHEN NEGOTIATION MAY BE RESORTED TO, CIRCUMSTANCES "WHEN IT IS IMPOSSIBLE TI DRAFT FOR AN INVITATION FOR BIDS ADEQUATE SPECIFICATIONS OR ANY OTHER ADEQUATELY DETAILED DESCRIPTION OF THE REQUIRED PROPERTY OR SERVICES.' IT WOULD APPEAR, THEREFORE, THAT THE REGULATIONS PERTAINING TO NEGOTIATION DO NOT REQUIRE IN ALL CIRCUMSTANCES THE KIND OF EQUAL COMPETITION YOU BELIEVE IS NECESSARY.

THE SECOND BASIS OF THE AEROSCIENCE PROTEST IS THAT THE CONTRACT ADMINISTRATOR VIOLATED THE FEDERAL PROCUREMENT REGULATIONS IN REFUSING TO PERMIT ANY REVISION OF AEROSCIENCE'S TECHNICAL OR COST PROPOSAL. SUPPORT OF THAT GROUND, RELIANCE IS PLACED UPON FPR 1-3.805 (A) (2) WHICH PROVIDES:

"WHERE SEVERAL RESPONSIBLE OFFERORS SUBMIT OFFERS WHICH ARE GROUPED SO THAT A MODERATE CHANGE IN EITHER THE PRICE OR THE TECHNICAL PROPOSAL WOULD MAKE ANY ONE OF THE GROUP THE MOST ADVANTAGEOUS OFFER TO THE GOVERNMENT, FURTHER NEGOTIATIONS SHOULD BE CONDUCTED WITH ALL OFFERORS IN THAT GROUP.'

FURTHER, IT IS SUGGESTED THAT FPR 1-3.805 (B) WAS VIOLATED IN THAT IT REQUIRES THAT, IF AN AWARD IS TO BE MADE ON THE BASIS OF THE SUBMITTED PROPOSALS, THE REQUEST FOR PROPOSALS NOTIFY ALL OFFERORS OF THAT POSSIBILITY.

IN RESPONSE TO YOUR SECOND CONTENTION, THE CONTRACTING AGENCY HAS INDICATED THAT IT WAS NOT PROCEEDING UNDER FPR 1-3.805 (A) (2). RATHER IT HAS REPORTED THAT IT PROCEEDED UNDER FPR 1-3.805 (A) (1) WHICH PROVIDES:

"WHERE A RESPONSIBLE OFFEROR SUBMITS A RESPONSIVE PROPOSAL WHICH, IN THE CONTRACTING OFFICER'S OPINION, IS CLEARLY AND SUBSTANTIALLY MORE ADVANTAGEOUS TO THE GOVERNMENT THAN ANY OTHER PROPOSAL, NEGOTIATIONS MAY BE CONDUCTED WITH THAT OFFEROR ONLY; * * *"

THE REASON THE AGENCY DID NOT FOLLOW FPR 1-3.805 (A) (2) WAS BECAUSE IT CONSIDERED THAT AEROSCIENCE'S PROPOSAL WAS NOT SUCH THAT A "MODERATE" CHANGE IN EITHER ITS PRICE OR ITS TECHNICAL PROPOSAL WOULD MAKE IT "THE MOST ADVANTAGEOUS OFFER," SINCE ON THE WEIGHTED EVALUATION IT WAS ABOUT 20 PERCENT UNDER THE HIGH POINT SCORE AND ON PRICE IT WAS ABOUT 64 PERCENT HIGHER THAN THE LOW PROPOSAL.

AS TO THE NOTICE REQUIREMENT IN FPR 1-3.805 (B), THAT SECTION PROVIDES:

"THERE ARE CERTAIN CIRCUMSTANCES WHERE FORMAL ADVERTISING IS NOT POSSIBLE AND NEGOTIATION IS NECESSARY. IN THE CONDUCT OF SUCH NEGOTIATIONS, WHERE A SUBSTANTIAL NUMBER OF CLEARLY COMPETITIVE PROPOSALS HAS BEEN OBTAINED AND WHERE THE CONTRACTING OFFICER IS SATISFIED THAT THE MOST FAVORABLE PROPOSAL IS FAIR AND REASONABLY PRICE, AWARD MAY BE MADE ON THE BASIS OF THE INITIAL PROPOSALS WITHOUT ORAL OR WRITTEN DISCUSSION; PROVIDED, THAT THE REQUEST FOR PROPOSALS NOTIFIES ALL OFFERORS OF THE POSSIBILITY THAT AWARD MAY BE MADE WITHOUT DISCUSSION OF PROPOSALS RECEIVED AND, HENCE, THAT PROPOSALS SHOULD BE SUBMITTED INITIALLY ON THE MOST FAVORABLE TERMS, FROM A PRICE AND TECHNICAL STANDPOINT, WHICH THE OFFEROR CAN SUBMIT TO THE GOVERNMENT. * * *"

HOWEVER, SECTION FPR 1-3.805 (A) PROVIDES THAT THE "NORMAL PROCEDURE" IS TO INCLUDE SUCH DISCUSSIONS AS ARE REQUIRED TO OBTAIN THE MOST ADVANTAGEOUS AGREEMENT FOR THE GOVERNMENT AND SUBSECTION (1) UNDER THAT PROVISION PERMITS NEGOTIATIONS WITH A SINGLE OFFEROR PRIOR TO AWARD. THEREFORE, IT SEEMS THAT FPR 1-3.805 (B) IS INTENDED TO APPLY TO A SITUATION WHERE IT IS CONTEMPLATED THAT THERE WILL NOT BE ANY DISCUSSION WITH ANY PROPONENT AFTER THE SUBMISSION OF PROPOSALS AND IS APPARENTLY INTENDED AS AN ALTERNATIVE TO FPR 1-3.805 (A) (1) REPORTED TO HAVE BEEN FOLLOWED BY THE AGENCY IN THIS CASE.

THE FINAL BASIS OF THE AEROSCIENCE PROTEST IS THAT CERTAIN OF THE PRICE AND COST ANALYSIS PROVISIONS OF THE FPR WERE NOT FOLLOWED BY THE AGENCY CONTRACTING PERSONNEL.

HOWEVER, SECTION 1-3.808-1 OF THE FPR PROVIDES THAT THE POLICIES PERTAINING TO PRICE AND COST ANALYSIS MAY BE APPLIED IN A VARIETY OF WAYS AND THAT THE EXTENT TO WHICH ANY PARTICULAR METHOD OR COMBINATION OF METHODS SHOULD BE USED WILL DEPEND UPON THE JUDGMENT OF THE CONTRACTING OFFICER. AND IN THIS LATTER CONNECTION, THE AGENCY HAS ADVISED THAT ALL STEPS WERE CONSIDERED APPROPRIATE WERE FOLLOWED IN THIS CASE.

IN LETTER OF MARCH 30, 1963, AEROSCIENCE SUGGESTS THAT CONTRACT ARDS-557, WHICH IT HAS WITH THE AGENCY, IS TO BE TERMINATED AS A REPERCUSSION FOR PROTESTING THE AWARD UNDER THE IMMEDIATE REQUEST FOR PROPOSALS. TERMINATION ACTION FOR THE REASON ALLEGED, IF ESTABLISHED, WOULD PRESENT A SERIOUS PROBLEM BUT ONE WHICH WOULD NOT BE RELEVANT TO CONSIDERATION WHETHER THE AWARD MADE UNDER REQUEST FOR PROPOSALS NAFEC 1360 WAS PROPER.

IN VIEW OF THE FOREGOING, WE FIND NO LEGAL BASIS TO OBJECT TO THE ACTION TAKEN BY THE FEDERAL AVIATION AGENCY IN THIS CASE.