B-150524, MAR. 11, 1963

B-150524: Mar 11, 1963

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TO SEISCOR: REFERENCE IS MADE TO TELEGRAMS DATED DECEMBER 27. THESE PROPOSALS WERE REVISED BY A SUPPLEMENT DATED OCTOBER 3. THERE WAS SENT TO HASTINGS-RAYDIST. A WIRE WAS SENT SEISCOR INDICATING THAT ITS PROPOSAL WOULD BE COMPARED WITH OTHER PROPOSALS AND OFFERING IT AN OPPORTUNITY TO MAKE ANY REVISIONS AND REQUESTING THAT THE COSTS BE PROPOSED ON A PER YEAR AND PER OPERATION BASIS. AT THAT TIME EACH OFFEROR WAS GIVEN AN OPPORTUNITY TO EXPLAIN ITS PROPOSAL AND TO ASK QUESTIONS AND TO OBTAIN CLARIFICATIONS. AT THESE INFORMAL MEETINGS INFORMATION NOT AVAILABLE AT THE TIME PROPOSALS WERE REQUESTED WAS TRANSMITTED TO EACH OF THE OFFERORS FOR CONSIDERATION IN THE PREPARATION OF PROPOSALS. THE PROPOSALS FOR THE LORAC AND RAYDIST SYSTEMS WERE REVIEWED BY SPECIAL PROJECTS ENGINEERS WHO DETERMINED THAT THE PROPOSALS WERE TECHNICALLY RESPONSIVE AND THAT THE SYSTEMS WERE EQUALLY EFFECTIVE.

B-150524, MAR. 11, 1963

TO SEISCOR:

REFERENCE IS MADE TO TELEGRAMS DATED DECEMBER 27, 1962, AND TO LETTER DATED JANUARY 8, 1963, PROTESTING AWARD BY THE NAVY OF A CONTRACT TO OFFSHORE RAYDIST, INC., FOR ELECTRONIC POSITIONING SERVICES IN THE AREA OF CERTAIN SHIPYARDS.

ON AUGUST 27, 1962, THE NAVY SPECIAL PROJECTS OFFICE UNDER REFERENCE SPN- 9:FLS:FH WROTE A LETTER TO SEISCOR, A DIVISION OF SEISMOGRAPH SERVICE CORPORATION, REQUESTING A DEFINITIVE COST PROPOSAL FOR COMPLETE POSITIONING SERVICE, INCLUDING PERSONNEL, EQUIPMENT, FACILITIES, INSTALLATION, OPERATION AND MAINTENANCE, REQUIRED FOR THE SUCCESSFUL OPERATION IN THE AREA OF FOUR SPECIFIED SHIPYARDS OF FOUR LORAC TYPE A NETWORKS DEVELOPED BY THE SEISMOGRAPH SERVICE CORPORATION. THE LETTER PROVIDED THAT EACH OF THE FOUR NETWORKS WOULD BE REQUIRED ON A 24-HOUR DAY BASIS FOR APPROXIMATE PERIODS INDICATED IN A SCHEDULE OF SHIPS TRIALS OPERATIONS ATTACHED TO THE LETTER. ON SEPTEMBER 24, 1962, SEISCOR SUBMITTED A PROPOSAL FOR THE TYPE A LORAC SERVICES AND AN ALTERNATE FOR TYPE B SYSTEMS WHICH IT STRONGLY RECOMMENDED. THESE PROPOSALS WERE REVISED BY A SUPPLEMENT DATED OCTOBER 3, 1962.

SUBSEQUENT TO RECEIPT OF THE SEISCOR PROPOSAL, THE SPECIAL PROJECTS OFFICE ASCERTAINED THAT HASTINGS-RAYDIST, INC., AND ITS AFFILIATE, OFFSHORE RAYDIST, INC., COULD PERFORM POSITIONING SERVICES AS WELL. THUS, ON OCTOBER 4, 1962, THERE WAS SENT TO HASTINGS-RAYDIST, INC., A LETTER SUBSTANTIALLY THE SAME AS THAT WRITTEN TO SEISCOR, EXCEPT FOR THE REQUIREMENT OF RAYDIST INSTEAD OF LORAC NETWORKS. ALSO, ON OCTOBER 9, 1962, A WIRE WAS SENT SEISCOR INDICATING THAT ITS PROPOSAL WOULD BE COMPARED WITH OTHER PROPOSALS AND OFFERING IT AN OPPORTUNITY TO MAKE ANY REVISIONS AND REQUESTING THAT THE COSTS BE PROPOSED ON A PER YEAR AND PER OPERATION BASIS. ON OCTOBER 19, 1962, THE SPECIAL PROJECTS OFFICE RECEIVED A REVISED PROPOSAL FROM SEISCOR AND AN ORIGINAL PROPOSAL FROM HASTINGS-RAYDIST, INC. ON OCTOBER 24, 1962, EACH COMPANY GAVE A FORMAL PRESENTATION TO SPECIAL PROJECTS PERSONNEL. AT THAT TIME EACH OFFEROR WAS GIVEN AN OPPORTUNITY TO EXPLAIN ITS PROPOSAL AND TO ASK QUESTIONS AND TO OBTAIN CLARIFICATIONS. ALSO, PRIOR TO THE RECEIPT OF PROPOSALS, SEVERAL INFORMAL MEETINGS HAD BEEN HELD BETWEEN SPECIAL PROJECTS PERSONNEL AND REPRESENTATIVES OF EACH COMPANY. AT THESE INFORMAL MEETINGS INFORMATION NOT AVAILABLE AT THE TIME PROPOSALS WERE REQUESTED WAS TRANSMITTED TO EACH OF THE OFFERORS FOR CONSIDERATION IN THE PREPARATION OF PROPOSALS.

THE PROPOSALS FOR THE LORAC AND RAYDIST SYSTEMS WERE REVIEWED BY SPECIAL PROJECTS ENGINEERS WHO DETERMINED THAT THE PROPOSALS WERE TECHNICALLY RESPONSIVE AND THAT THE SYSTEMS WERE EQUALLY EFFECTIVE. IN THE LATTER CONNECTION, BOTH SEISCOR AND RAYDIST HAVE PERFORMED SIMILAR SERVICES FOR THE NAVY BEFORE. SEISCOR HAD PERFORMED FOR THE NAVY FOR MORE THAN THREE YEARS AND RAYDIST FOR MORE THAN ONE.

THE PRICES PROPOSED BY EACH COMPANY WERE EVALUATED ALSO. PREDICATED UPON THE SCHEDULE OF SHIPS TRIALS, WHICH EXTENDED FROM THE BEGINNING OF 1963 THROUGH THE BEGINNING OF 1965, SEISCOR'S PROPOSALS WERE MORE THAN $1,390,000 HIGHER THAN RAYDIST'S PROPOSAL OF $1,167,168 AND ON THE BASIS OF ESTIMATED TRIALS DURING 1963 WAS MORE THAN $524,000 HIGHER THAN RAYDIST'S PROPOSAL OF $618,461. IN COMPARING THE PRICES OF THE TWO PROPOSERS, THE VALUATORS FOUND THAT SEISCOR'S HIGHER PROPOSALS WERE LARGELY DUE TO THE FACT THAT THE LORAC SYSTEMS UTILIZE MORE STATIONS AND THEREBY REQUIRE MORE EQUIPMENT, MORE INSTALLATIONS, MORE INSTALLATION SITES AND MORE REMOVALS PRODUCING GREATER OPERATIONAL COSTS; THAT SEISCOR HAD THE EXPENSE OF SETTING UP A SYSTEM IN THE NEWPORT NEWS SHIPYARD AREA WHEREAS RAYDIST HAD A SYSTEM IN OPERATION THERE; AND THAT SEISCOR PROPOSED STANDBY COSTS FOR TIME WHEN THE SYSTEMS WOULD NOT BE IN OPERATION WHEREAS RAYDIST DID NOT.

SINCE THE RAYDIST SYSTEM WAS TECHNICALLY ACCEPTABLE AND CONSIDERABLY LESS COSTLY THAN LORAC SYSTEMS, THE SPECIAL PROJECTS OFFICE DECIDED TO PLACE A CONTRACT FOR THE POSITIONING SERVICES WITH RAYDIST. BEFORE ANY AWARD WAS MADE TO THE COMPANY, A PROTEST WAS RECEIVED FROM SEISCOR. IT WAS REVIEWED BY SPECIAL PROJECTS PERSONNEL WHO DETERMINED THAT IT WAS WITHOUT MERIT. MOREOVER, IT WAS DECIDED THAT ANY FURTHER DELAY IN THE AWARD OF A CONTRACT WOULD BE UNACCEPTABLE BECAUSE OF OVERRIDING SCHEDULE REQUIREMENTS. THEREFORE, PURSUANT TO REGULATION, THE MATTER WAS SUBMITTED TO HIGHER AUTHORITY AND WAS CLEARED FOR AWARD BY THE ASSISTANT CHIEF FOR CONTRACTS AND THE SECRETARY OF THE NAVY.

SEISCOR PROTESTED THE AWARD ON SEVERAL GROUNDS. FIRST, IT CONTENDED THAT THE REQUEST FOR THE PROPOSAL WAS VAGUE AND INDEFINITE IN THAT IT DID NOT SPECIFY SYSTEM PERFORMANCE AND EQUIPMENT REQUIREMENTS. WHILE IT IS TRUE THAT THE REQUEST FOR PROPOSAL DID NOT SPELL OUT IN DETAIL ALL THE CHARACTERISTICS OF THE EQUIPMENT THAT SHOULD BE UTILIZED BY SEISCOR, IN VIEW OF THE FACT THAT SEISCOR HAS BEEN PROVIDING POSITIONING SERVICES TO THE NAVY FOR MORE THAN THREE YEARS, IT DOES NOT APPEAR THAT SEISCOR WAS UNINFORMED AS TO WHAT WOULD BE REQUIRED TO PROVIDE COMPLETE POSITIONING SERVICE TO THE NAVY. AS THE DEVELOPER AND UTILIZER OF THE LORAC SYSTEM, IT SEEMS THAT SEISCOR SHOULD KNOW WHAT EQUIPMENT AND MANPOWER IT TAKES TO OPERATE AND MANAGE THE SYSTEM TO ASSURE COMPLETE POSITIONING SERVICE. IT DID NOT UNDERSTAND WHAT WAS NEEDED BY THE NAVY, IT APPEARS THAT IT WAS PROVIDED WITH AN OPPORTUNITY TO OBTAIN AND MAY HAVE IN FACT OBTAINED ANY NECESSARY CLARIFICATIONS THROUGH THE MEETINGS WITH SPECIAL PROJECTS PERSONNEL. THAT IT DID UNDERSTAND WHAT THE NAVY SOUGHT TO OBTAIN IS MADE MANIFEST BY THE FACT THAT IT DID SUBMIT A PROPOSAL THAT WAS DETERMINED TO BE TECHNICALLY RESPONSIVE BY EVALUATING PERSONNEL.

THE SECOND MAIN CONTENTION IS THAT THE REQUEST FOR PROPOSAL FROM SEISCOR WAS NOT IDENTICAL TO THE REQUEST FOR PROPOSAL FROM RAYDIST AND THEREFORE THE PROPOSALS WERE NOT CAPABLE OF COMPARISON. AS HAS BEEN NOTED, THE REQUEST FOR PROPOSAL FROM EACH COMPANY WAS SUBSTANTIALLY THE SAME EXCEPT THAT SEISCOR WAS REQUESTED TO UTILIZE A LORAC NETWORK WHILE RAYDIST WAS ASKED TO UTILIZE ITS PROPRIETARY NETWORK. ALTHOUGH THE NETWORKS MAY BE DISSIMILAR, THEY ARE BOTH CONSIDERED CAPABLE OF PERFORMING THE SAME POSITIONING SERVICE, WHICH IN SUM IS ALL THAT THE NAVY SOUGHT TO OBTAIN. SINCE THE EQUIPMENT OF EITHER FIRM IS CAPABLE OF PERFORMING THE TASK INVOLVED, A COMPARISON ON A COST BASIS TO THE NAVY IS PROPER. ON THAT BASIS, FOR THE PERFORMANCE OF THE SAME SERVICE AS SEISCOR, RAYDIST WAS CONSIDERABLY CHEAPER.

PROTEST IS MADE ALSO BECAUSE SEISCOR WAS NOT GIVEN AN OPPORTUNITY TO NEGOTIATE COST WITH THE CONTRACT NEGOTIATOR. IN THIS CONNECTION, IT HAS BEEN OBSERVED THAT AFTER SEISCOR SUBMITTED ITS ORIGINAL AND SUPPLEMENTARY PROPOSALS IT WAS ADVISED THAT ITS PROPOSALS WOULD BE COMPARED WITH OTHER PROPOSALS AND IT WAS OFFERED AN OPPORTUNITY TO MAKE ANY REVISIONS IN ITS PROPOSALS AS IT SAW FIT AND IT DID IN FACT SUBMIT A REVISED PROPOSAL. FURTHER, AS AFTER EVALUATION, THE PROPOSAL WAS NOT CONSIDERED TO BE WITHIN THE COMPETITIVE RANGE OF THE RAYDIST PROPOSAL AND AS ASPR 3-805.1 (A) PROVIDES FOR WRITTEN OR ORAL DISCUSSIONS WITH ALL RESPONSIBLE OFFERORS WHO SUBMIT PROPOSALS WITHIN A COMPETITIVE PRICE RANGE, THERE DOES NOT APPEAR TO HAVE BEEN ANY DISREGARD OF THE ESTABLISHED NEGOTIATING PROCEDURES.

FURTHER OBJECTION IS STATED BECAUSE CERTAIN INFORMATION WAS FURNISHED TO SEISCOR INFORMALLY AND WAS NEVER CONFIRMED IN WRITING. HOWEVER, IT DOES NOT APPEAR THAT THE FURNISHING OF THE INFORMATION IN THIS INFORMAL MANNER IN ANY WAY PREJUDICED THE PREPARATION OF THE SEISCOR PROPOSAL AS THE ONE SUBMITTED BY IT WAS DETERMINED TO BE COMPLETELY RESPONSIVE.

FINALLY, SEISCOR PROTESTS THAT NO COMPARATIVE EVALUATION WAS MADE OF THE FACILITIES AND CAPABILITIES OF THE RESPECTIVE PROPOSERS. AS BOTH OFFERORS OVER EXTENDED PERIODS HAVE PERFORMED SIMILAR SERVICE FOR THE NAVY SATISFACTORILY, A DETAILED SURVEY WAS NOT CONSIDERED NECESSARY. HOWEVER, SPECIAL PROJECTS OFFICE TECHNICAL PERSONNEL DID CONSULT WITH PERSONNEL OF SHIPYARDS WHICH HAVE USED THE SERVICES OF BOTH COMPANIES ANDALSO MADE AN ON-THE-SITE EVALUATION OF RAYDIST EQUIPMENT AND ARE SATISFIED THAT THE CONTRACTOR HAS THE NECESSARY PERSONNEL, FACILITIES, ETC., WITH WHICH TO PERFORM THE REQUIRED TASKS.

THE SUBJECT PROCUREMENT WAS A NEGOTIATED PROCUREMENT. IN THE CASE OF SUCH PROCUREMENTS THE RULES OF FORMALLY ADVERTISED COMPETITIVE BIDDING DO NOT APPLY AND THE TERMS AND CONDITIONS UPON WHICH PROPOSALS ARE REQUESTED AND THE SELECTION OF CONTRACTORS ARE DETERMINED ARE MATTERS FOR THE ADMINISTRATIVE OFFICE CONCERNED IN THE EXERCISE OF ITS BEST JUDGMENT AS TO THE INTERESTS OF THE GOVERNMENT.

IN VIEW OF THE WIDE DISCRETION AND BROAD LATITUDE VESTED IN THE ADMINISTRATIVE OFFICIALS IN NEGOTIATED PROCUREMENTS, IT IS CONCLUDED THAT THE CIRCUMSTANCES INVOLVED HERE PROVIDE NO BASIS FOR OBJECTION TO THE ACTIONS OF THE ADMINISTRATIVE OFFICIALS IN THIS NEGOTIATION.