B-151436, JUNE 20, 1963, 42 COMP. GEN. 717

B-151436: Jun 20, 1963

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CONTRACTS - SPECIFICATIONS - FAILURE TO FURNISH SOMETHING REQUIRED - INFORMATION A REQUIREMENT IN AN INVITATION THAT ONLY NEW SUPPLIERS HAVE TO FURNISH PREPRODUCTION SAMPLES AND TESTING. IS NOT IN VIOLATION OF THE COMPETITIVE BIDDING PRINCIPLES. THE TERMS OF THE COMPETITION ARE CLEARLY SET FORTH IN THE INVITATION. A BID FROM A PREVIOUS SUPPLIER WHO SUBMITS PRICES ON ALL ITEMS INCLUDING THE PREPRODUCTION SAMPLE AND TESTING ITEMS MAY BE EVALUATED WITHOUT INCLUSION OF THOSE ITEMS ON THE BASIS OF A DETERMINATION THAT THOSE ITEMS ARE UNNECESSARY FROM ESTABLISHED PREVIOUS SUPPLIERS. AN ADMINISTRATIVE PROGRESS REPORT WHICH WAS NOT PRICED SEPARATELY BY ANY OF THE BIDDERS IS REGARDED AS INFORMATION INCIDENTAL TO CONTRACT ADMINISTRATION UNDER PARAGRAPHS 9-201 AND 9 203.1 OF THE ARMED SERVICES PROCUREMENT REGULATION WHICH EXCLUDE SUCH REPORTS AND INFORMATION FROM THE DEFINITION OF DATA AND.

B-151436, JUNE 20, 1963, 42 COMP. GEN. 717

BIDS - COMPETITIVE SYSTEM - UNEQUAL FACTORS. BIDS - EVALUATION - ITEM EXCLUSION. CONTRACTS - SPECIFICATIONS - FAILURE TO FURNISH SOMETHING REQUIRED - INFORMATION A REQUIREMENT IN AN INVITATION THAT ONLY NEW SUPPLIERS HAVE TO FURNISH PREPRODUCTION SAMPLES AND TESTING, WHILE CREATING A DISPARITY AMONG BIDDERS, IS NOT IN VIOLATION OF THE COMPETITIVE BIDDING PRINCIPLES, IF THE ACCEPTABILITY OF THE PRODUCT CANNOT BE DETERMINED WITHOUT SUCH ACTUAL DEMONSTRATION OR TESTING, AND PROVIDED, THAT, THE TERMS OF THE COMPETITION ARE CLEARLY SET FORTH IN THE INVITATION. UNDER AN INVITATION WHICH REQUIRES NEW SUPPLIERS ONLY TO SUBMIT PRELIMINARY SAMPLES AND TESTING, A BID FROM A PREVIOUS SUPPLIER WHO SUBMITS PRICES ON ALL ITEMS INCLUDING THE PREPRODUCTION SAMPLE AND TESTING ITEMS MAY BE EVALUATED WITHOUT INCLUSION OF THOSE ITEMS ON THE BASIS OF A DETERMINATION THAT THOSE ITEMS ARE UNNECESSARY FROM ESTABLISHED PREVIOUS SUPPLIERS. UNDER AN INVITATION ISSUED BY THE NAVY REQUIRING A SEPARATE PRICE FOR EACH ITEM FOR DATA, AN ADMINISTRATIVE PROGRESS REPORT WHICH WAS NOT PRICED SEPARATELY BY ANY OF THE BIDDERS IS REGARDED AS INFORMATION INCIDENTAL TO CONTRACT ADMINISTRATION UNDER PARAGRAPHS 9-201 AND 9 203.1 OF THE ARMED SERVICES PROCUREMENT REGULATION WHICH EXCLUDE SUCH REPORTS AND INFORMATION FROM THE DEFINITION OF DATA AND, THEREFORE, SINCE THE INVITATION DID NOT REQUIRE A PRICE FOR THE ADMINISTRATIVE REPORT, THE FAILURE TO FURNISH A PRICE ON THAT ITEM MAY BE WAIVED.

TO B. J. PYREK, DEPARTMENT OF THE NAVY, JUNE 20, 1963:

THIS REFERS TO YOUR LETTER OF APRIL 30, 1963 (REFERENCE IFB-600-585 63'S SER 159-7), WITH ENCLOSURE, REQUESTING OUR DECISION CONCERNING THE PROPRIETY OF AN AWARD PROPOSED TO BE MADE BY YOUR DEPARTMENT TO ELECTRO- NEUTRONICS, UNDER INVITATION FOR BIDS NO. 600-585-63-S, COVERING AIR PARTICLE SAMPLERS AND RELATED SUPPLIES.

YOU REPORT THAT THE BIDS WERE OPENED ON MARCH 1, 1963, AND 4 BIDS WERE RECEIVED, 2 OF WHICH QUOTED PRICES SUFFICIENTLY HIGH TO ELIMINATE THEM FROM CONSIDERATION.

THE INVITATION SCHEDULE LISTED THE FOLLOWING ITEMS:

CHART

QUANTITY ITEM NUMBER OF

UNIT

NO. SUPPLIES OR SERVICES UNITS UNIT PRICE AMOUNT ---- -------------------

1 HD-251 ( ( (UD AIR PARTICLE 2 EACH $ $

SAMPLER (PREPRODUCTION)

2 HD-251 ( ( (UD AIR PARTICLE 66 EACH $ $

SAMPLER (PRODUCTION)

3 MIL-E 17362D PROVISIONING 1 SET $

TECHNICAL DOCUMENTATION

FOR ITEM 2

4 STOCK REPAIR PARTS FOR ITEM 2 1 LOT (SEE NOTE A)

(OPTION ITEM, NO BID)

5 TECHNICAL MANUALS FOR ITEM 2 428 EACH $ $

(2 PER EQUIPMENT PLUS BULK

QUANTITY OF 300)

6 REPLENISHMENT MATERIAL FOR 1 SET $

ITEM 5

7 MANUSCRIPT CATALOG SHEETS 2 SET $ $

8 PRELIMINARY ENGINEERING 1 SET $

DRAWINGS, TYPE I, CLASS B

9 FINAL ENGINEERING DRAWINGS, 1 SET $

TYPE I, CLASS B 10 DD 375, PARTS I AND II WITH MONTHLY

NAVEKOS 3856

PRICE (EXCLUSIVE OF REPAIR --------- ----------- ------- $

PARTS)

PRICING OF DATA:

(A) A SEPARATE PRICE

MUST BE STATED FOR

EACH LINE ITEM SETTING

FORTH A REQUIREMENT FOR

DATA (DRAWINGS,

MANUALS, ETC.), UNLESS

OTHERWISE STATED IN THIS

SCHEDULE. (B) FAILURE

TO COMPLY WITH (A) ABOVE

MAY RESULT IN REJECTION

OF A BID AS NONRESPONSIVE.

THE INVITATION PROVIDED (SCHEDULE PAGE 7) THAT AWARD WOULD BE MADE TO ONLY ONE BIDDER, AND STATED: "BIDS THEREFORE MUST BE ON THE BASIS OF FURNISHING (I) ALL UNITS OF ITEMS 1,2,3,5 THRU 10, AND (II) SUBJECT TO EXERCISE OF OPTION FOR ELECTRONIC REPAIR PARTS, ITEM 4.'

THE NEXT PARAGRAPH, HOWEVER, WAS AS FOLLOWS:

DELETION OF PREPRODUCTION AND ENGINEERING DRAWINGS REQUIREMENTS FOR PREVIOUS SUPPLIERS ONLY: THE CLAUSE OF THIS SCHEDULE ENTITLED "PREPRODUCTION EQUIPMENT" AND ALL OTHER REFERENCES TO PREPRODUCTION EQUIPMENT AND ENGINEERING DRAWINGS IN THIS INVITATION FOR BIDS, INCLUDING PROVISIONS FOR DELIVERY AND PREPARATION FOR DELIVERY OF PREPRODUCTION EQUIPMENT AND ENGINEERING DRAWINGS, SHALL NOT BE A PART OF ANY CONTRACT AWARDED PURSUANT TO THIS INVITATION FOR BIDS TO A BIDDER WHO HAS MANUFACTURED AND DELIVERED UNDER ANY CONTRACT ISSUED BY THE BUREAU OF SHIPS ONE OR MORE HD-251/UD AIR PARTICLE SAMPLER AS PREPRODUCTION AND/OR PRODUCTION EQUIPMENT WHICH, IN THE CASE OF PREPRODUCTION EQUIPMENT, HAS BEEN APPROVED OR CONDITIONALLY APPROVED BY THE GOVERNMENT PRIOR TO THE DATE OF OPENING OF THIS INVITATION FOR BIDS OR, IN THE CASE OF PRODUCTION EQUIPMENT, HAS BEEN ACCEPTED BY THE GOVERNMENT PRIOR TO SAID DATE OF OPENING. IN THE EVENT OF AWARD TO SUCH A BIDDER, BUT ONLY IN THAT EVENT, THE AWARD SHALL STATE IN SUBSTANCE THAT THE "PREPRODUCTION EQUIPMENT" CLAUSE AND ALL OTHER REFERENCES TO PREPRODUCTION EQUIPMENT AND ENGINEERING DRAWINGS ARE DELETED. EACH BIDDER WHO HAS MANUFACTURED AND DELIVERED HD- 251/UD AIR PARTICLE SAMPLER AS ABOVE PROVIDED, BUT ONLY SUCH A BIDDER, SHOULD LIST THE NUMBER/S) OF THE CONTRACT OR CONTRACTS UNDER WHICH HE HAS DONE SO.

CONTRACT NUMBER/S)

EXCEPT AS RECITED ABOVE, THE INVITATION CONTAINED NO INDICATION OF THE BASIS OF EVALUATION AND AWARD EXCEPT THE STANDARD FORM 30 PROVISION (8 (A) ( THAT "THE CONTRACT WILL BE AWARDED TO THAT RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE INVITATION FOR BIDS, WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED.'

THE TWO LOW BIDS WERE AS FOLLOWS:

CHART ITEM NO. ELECTRO-NEUTRONICS GULF AEROSPACE --------

1 2 UNITS AT $685 EQUALS $1,370 2 UNITS AT $1,500 EQUALS $3,000

2 66 UNITS AT $685 EQUALS 45,210 66 UNITS AT 675 EQUALS 44,550

3 N.C. N.C.

4 NO BID NO BID

5 $856 N.C.

6 100 N.C.

7 50 N.C.

8 1,000200

9 50 300

10 N.C.

TOTAL BID $48,636 $48,050

YOU REPORT THAT WHILE GULF AEROSPACE IS NOT A PREVIOUS SUPPLIER FOR THESE ITEMS, ELECTRO-NEUTRONICS IS AND SO SIGNIFIED IN ITS BID, UNDER THE DELETION CLAUSE, REFERENCING BUREAU OF SHIPS CONTRACT NOBSR-87274, COVERING 20 HD-251/UD AIR PARTICLE SAMPLERS.

YOU PROPOSE TO EVALUATE THE ELECTRO-NEUTRONICS BID BY EXCLUDING ITEM NO. 1, AND IF THERE ARE NO DRAWING REVISIONS, ITEM NOS. 8 AND 9 ALSO, FROM THE TOTAL BID PRICE OF $48,636. THE DELETION OF ITEM NO. 1, ALONE, WOULD MAKE ELECTRO-NEUTRONICS THE LOW BIDDER.

AS SHOWN BY THE INVITATION, THE PREPRODUCTION EQUIPMENT AND DRAWINGS ARE A REQUIRED PART OF THE CONTRACT PERFORMANCE FOR A NEW SUPPLIER UNDER THIS INVITATION, WHEREAS UNDER THE TERMS OF THE INVITATION THEY WOULD NOT BE REQUIRED OF A PREVIOUS SUPPLIER. CONSEQUENTLY, UNDER YOUR PROPOSED METHOD OF EVALUATION IT COULD BE CONSIDERED THAT THE PREVIOUS SUPPLIER'S PRICE FOR 66 OF THE ARTICLES BEING PROCURED IS BEING EVALUATED AGAINST COMPETING BIDDERS' PRICES FOR 68. ON THE OTHER HAND (SINCE THE PREPRODUCTION ITEMS WILL NOT BE USABLE AFTER TESTING), THE GOVERNMENT WILL ACTUALLY RECEIVE ONLY 66 UNITS TO MEET ITS NEEDS UNDER A CONTRACT WITH ANY BIDDER.

IT IS A RULE OF COMPETITIVE BIDDING THAT ALL BIDDERS SHOULD HAVE EQUAL OPPORTUNITY TO BID ON A COMMON BASIS. SEE UNITED STATES V. BROOKRIDGE FARM, 111 F.2D 461, 463. WE HAVE APPLIED THIS RULE TO REQUIRE, INTER ALIA, THAT INVITATIONS FOR BIDS SHOULD CLEARLY SET FORTH THE BASIS FOR BID EVALUATION (41 COMP. GEN. 599); THAT AWARDS SHOULD NOT BE MADE UPON CONDITIONS ESSENTIALLY DIFFERENT FROM THOSE ADVERTISED (17 COMP. GEN. 554, 558-559); THAT BIDDERS SHOULD NOT BE PERMITTED TO VARY THEIR PROPOSALS AFTER THE BIDS ARE OPENED (36 COMP. GEN. 535); AND THAT INVITATIONS SHOULD NOT CONTAIN PROVISIONS WHICH ARE UNDULY RESTRICTIVE (33 COMP. GEN. 573).

HOWEVER, WE HAVE RECOGNIZED THAT COMPETITION MAY BE RESTRICTED BY THE GOVERNMENT CONSISTENT WITH ITS NEEDS. SEE 36 COMP. GEN. 809, 815 816, WHERE WE UPHELD THE USE OF A QUALIFIED PRODUCTS SYSTEM; AND 40 COMP. GEN. 35, WHERE WE SUSTAINED THE USE OF THE TWO-STEP PROCUREMENT PROCEDURE. OBVIOUSLY, THE GOVERNMENT SHOULD NOT BE REQUIRED TO PURCHASE FROM UNQUALIFIED SOURCES. 26 COMP. GEN. 676. NOR SHOULD IT HAVE TO PURCHASE WHAT IT DOESN-T NEED OR INCLUDE IN EVALUATION OF A BID ITEMS WHICH WILL NOT IN FACT BE INCLUDED IN A CONTRACT AWARD.

IN CASES TO A GREATER DEGREE SIMILAR TO THE PROCUREMENT UNDER CONSIDERATION WE HAVE HELD THAT IT IS NOT IMPROPER TO REQUIRE PRIOR PRODUCERS TO BID ON A SHORTER DELIVERY SCHEDULE THAN WOULD BE ALLOWED A NONPRODUCER WHO WOULD BE REQUIRED UNDER THE TERMS OF THE INVITATION TO SUBMIT AND TEST PREPRODUCTION MODELS BEFORE GOING INTO PRODUCTION (41 COMP. GEN. 788); AND THAT AN OFFER BY A PRIOR PRODUCER TO REDUCE HIS BID PRICE IF PREPRODUCTION TESTING WERE WAIVED WAS PROPERLY FOR CONSIDERATION, ALTHOUGH THE INVITATION CONTAINED NO SPECIFIC STIPULATION THAT THE TESTING MIGHT NOT BE REQUIRED (B-140361, NOVEMBER 10, 1959, AND FEBRUARY 3, 1960). WE BELIEVE THAT THE PRINCIPLES FOLLOWED IN THOSE CASES CLEARLY SUPPORT THE ACTION PROPOSED BY YOU IN THE PRESENT CASE, AND THAT DEPARTURE THEREFROM WOULD ADVERSELY AFFECT THE EFFORTS OF THE MILITARY AGENCIES TO MINIMIZE SOLE SOURCE AND OTHER NEGOTIATED PROCUREMENTS IN ACCORDANCE WITH CONGRESSIONAL POLICY AS EXPRESSED IN THE PROCUREMENT STATUTES AND EMPHASIZED IN PUBLIC LAW 87 653, 10 U.S.C. 2304.

AS POINTED OUT IN THE DECISIONS REFERRED TO, THERE IS NO QUESTION BUT THAT THE DEVELOPER OR FIRST PRODUCER OF A SPECIALIZED PIECE OF EQUIPMENT NORMALLY HAS A SUBSTANTIAL COMPETITIVE ADVANTAGE OVER WOULD BE COMPETITORS, AND SHOULD BE ABLE TO FURNISH IT AT A LOWER PRICE. THE GOVERNMENT PRESUMABLY HAS PAID EITHER DIRECTLY OR INDIRECTLY THE COST OF THE INITIAL DEVELOPMENT AND OF THE FIRST PRODUCER'S KNOW-HOW, AND SHOULD BE ABLE TO REALIZE ON ITS INVESTMENT WITHOUT SUBSTANTIALLY DUPLICATING IT TO SET UP ANOTHER PRODUCER. HOWEVER, EXPERIENCE HAS AMPLY DEMONSTRATED THAT SO LONG AS A SINGLE PRODUCER IS PERMITTED TO MAINTAIN HIS MONOPOLY POSITION HIS PRICE TENDS TO REMAIN SUBSTANTIALLY HIGHER THAN WHEN HE IS REQUIRED TO MEET COMPETITION, AND IT IS IN RECOGNITION OF THIS FACT THAT THE CONGRESS HAS ADOPTED THE POLICY OF MAXIMUM COMPETITION.

IN THE EXTREME CASE, WHERE THE SETTING UP OF AN ADDITIONAL PRODUCER OR SOURCE OF SUPPLY IS IN THE INTEREST OF NATIONAL DEFENSE, A CONTRACT MAY BE NEGOTIATED UNDER 10 U.S.C. 2304 (A) (16), AND UNDER THAT AUTHORITY ANY ADDITIONAL COST INVOLVED COULD BE ASSUMED BY THE GOVERNMENT, WITHOUT REGARD TO PRICES AVAILABLE FROM PRIOR PRODUCERS.

AT THE OTHER EXTREME, WHERE IT IS DETERMINED THAT A SUBSTANTIAL INITIAL INVESTMENT OR AN EXTENDED PERIOD OF PREPARATION WOULD BE REQUIRED FOR PRODUCTION OF TECHNICAL OR SPECIAL ARTICLES AND THAT FORMAL ADVERTISING MIGHT REQUIRE DUPLICATION OF INVESTMENT OR PREPARATION ALREADY MADE AND THUS INCREASE THE COST TO THE GOVERNMENT, OR UNDULY DELAY PROCUREMENT, NEGOTIATION WITH PRIOR PRODUCERS IS AUTHORIZED BY 10 U.S.C. 2304 (A) (14).

IN BETWEEN THOSE EXTREMES, WE KNOW OF NO SATISFACTORY SUBSTITUTE FOR FORMAL ADVERTISING AND COMPETITIVE BIDDING, DESPITE THE FACT THAT A PRIOR PRODUCER MAY HAVE A SUBSTANTIAL COMPETITIVE ADVANTAGE. IT HAS BEEN OBSERVED THAT IN MANY CASES PRIOR NON-PRODUCERS HAVE QUOTED PRICES CLOSELY COMPETITIVE WITH THOSE OF BIDDERS WHO HAVE PREVIOUSLY SUPPLIED THE IDENTICAL ITEM; IT MAY BE SURMISED THAT IN SUCH CASES THE WILLINGNESS OF THE ONE BIDDER TO ABSORB SOME OR ALL OF THE INITIAL COSTS OF QUALIFYING HIMSELF AS A PRODUCER TENDS TO BALANCE THE NORMAL DESIRE OF THE OTHER TO MAINTAIN HIS PRICE AS HIGH AS HE THINKS HE CAN WITHOUT JEOPARDIZING HIS PREVIOUS MONOPOLY. IN ANY EVENT, WE BELIEVE THAT THE INTRODUCTION OF THE THREAT OF COMPETITION MAY BE MORE EFFECTIVE IN LOWERING THE PRICE OF AN EXISTING PRODUCER THAN ANY NEGOTIATING TECHNIQUES.

IN APPROPRIATE CIRCUMSTANCES, THE GOVERNMENT MAY INTRODUCE FACTORS TENDING TO OFFSET OR EQUALIZE TO SOME EXTENT THE COMPETITIVE ADVANTAGES OF PRODUCERS, AS WAS DONE IN THE CASE MENTIONED ABOVE WHERE DIFFERENT DELIVERY TIMES WERE PROVIDED; HOWEVER, AS WAS HELD IN B 140361 OF FEBRUARY 3, 1960, THERE IS NO REQUIREMENT THAT ANY SUCH EQUALIZING FACTORS OR HANDICAPS BE PROVIDED.

ON THE OTHER HAND, THE DISPARITY BETWEEN PROSPECTIVE BIDDERS SHOULD NOT BE INCREASED BY THE IMPOSITION OF UNNECESSARY REQUIREMENTS SUCH AS PRELIMINARY SAMPLES OR TESTING NOT CLEARLY NECESSARY. WHERE THE SUBJECT OF THE PROCUREMENT IS COVERED BY COMPLETE AND DETAILED TECHNICAL SPECIFICATIONS AND NO CLEAR REASON APPEARS WHY AN EXPERIENCED MANUFACTURER IN THE PARTICULAR FIELD INVOLVED COULD NOT PRODUCE A SATISFACTORY ARTICLE THEREFROM, THE QUESTION OF AWARD WOULD APPEAR TO BE FOR SOLUTION PRIMARILY ON THE BASIS OF THE BIDDERS' OVERALL RESPONSIBILITY. IF, HOWEVER, THE TECHNICAL OR PERFORMANCE REQUIREMENTS ARE SO NOVEL OR EXACTING THAT ACCEPTABILITY OF THE PRODUCT CANNOT REASONABLY BE ANTICIPATED WITHOUT ACTUAL DEMONSTRATION OR TESTING, WE DO NOT FEEL THAT THE STATEMENT IN AN INVITATION FOR BIDS OF A REQUIREMENT THEREFOR, ALTHOUGH NOT EQUALLY APPLICABLE TO ALL BIDDERS, SHOULD BE CONSIDERED TO BE A VIOLATION OF COMPETITIVE BIDDING PRINCIPLES, SO LONG AS THE TERMS OF THE COMPETITION ARE CLEARLY SET FORTH.

IN THE PRESENT CASE WE ASSUME THAT THE NECESSITY FOR THE REQUIRED PREPRODUCTION SAMPLES AND TESTING WAS FULLY CONSIDERED AND ESTABLISHED, AND FOR THE REASONS STATED WE CONCLUDE THAT THE ACTION PROPOSED BY YOU IS CORRECT, ALTHOUGH WE SEE NO COMPELLING REASON WHY THE PRODUCTION MODELS WERE SCHEDULED AS A SEPARATE ITEM FOR BIDDING. TURNING SPECIFICALLY TO YOUR PROPOSED EVALUATION OF THE ELECTRO NEUTRONICS BID: ALTHOUGH THE BIDDER DID SUBMIT PRICES ON ITEM NOS. 1, 8 AND 9, IT ALSO LISTED ITS PRIOR CONTRACT NUMBER UNDER THE PREVIOUS SUPPLIER CLAUSE. THIS INDICATES THAT THE BIDDER INTENDED TO QUALIFY AS A PREVIOUS SUPPLIER. AND, SINCE THE BIDDER (ELECTRO-NEUTRONICS) DOES QUALIFY AS A PREVIOUS SUPPLIER, ITS BID MAY PROPERLY BE EVALUATED WITHOUT THE INCLUSION OF ITEM NO. 1, OR OF ITEM NOS. 8 AND 9 IF THESE ITEMS ARE DETERMINED TO BE UNNECESSARY. AS MAY BE NOTED FROM THE ABOVE SCHEDULE OF BID PRICES, YOU REPORT THAT ELECTRO- NEUTRONICS DID NOT INSERT ANYTHING OPPOSITE ITEM NO. 10 IN ITS BID. YOU STATE THAT THIS ITEM (FORM DD 375) IS AN ADMINISTRATIVE PROGRESS REPORT AND NO DOLLAR SIGN IS SET FORTH OPPOSITE IT. IN THIS CONNECTION, YOU REPORT THAT GULF AEROSPACE INSERTED "N.C.' OPPOSITE THIS ITEM, AND OTHER TWO BIDDERS, LIKE ELECTRO-NEUTRONICS, ALSO DID NOT INSERT ANYTHING OPPOSITE ITEM NO. 10.

THE INVITATION SCHEDULE, QUOTED ABOVE, PROVIDES UNDER "PRICING MUST BE STATED FOR EACH ITEM SETTING FORTH A REQUIREMENT FOR DATA (DRAWINGS, MANUALS, ETC.); AND THAT A FAILURE TO COMPLY WITH THIS REQUIREMENT MAY RESULT IN REJECTION OF THE BID. YOU NOTE THAT AS STATED IN ARMED SERVICES PROCUREMENT REGULATIONS 9-201 AND 9-203.1, THE TERM "DATA * * * DOES NOT INCLUDE FINANCIAL REPORTS, COST ANALYSIS, AND OTHER INFORMATION INCIDENTAL TO CONTRACT ADMINISTRATION.' IT IS YOUR POSITION THAT IN LIGHT OF THE ASPR PROVISIONS (EXCLUDING INFORMATION INCIDENTAL TO CONTRACT ADMINISTRATION FROM THE DEFINITION OF "DATA"), TOGETHER WITH THE ABSENCE OF A DOLLAR SIGN IN THE PRICE OR AMOUNT COLUMN OPPOSITE ITEM NO. 10, NO SEPARATE PRICE WAS REQUIRED FOR ITEM NO. 10, WHICH MUST BE FURNISHED WITH OR WITHOUT A SEPARATE PRICE. THEREFORE, YOU PROPOSE TO WAIVE THE ABSENCE OF A BID PRICE OPPOSITE ITEM NO. 10.

WE AGREE WITH YOUR INTERPRETATION THAT ITEM NO. 10 AND (DD 375) DOES NOT FALL WITHIN THE TERM ,DATA" AS CONTAINED IN THE "PRICING OF DATA" PROVISION OF THE SCHEDULE; AND THAT THE INVITATION DID NOT REQUIRE THE QUOTATION OF A PRICE THEREFOR.

ACCORDINGLY, ON FACTS REPORTED, THE ELECTRO-NEUTRONICS BID MAY BE CONSIDERED FOR AWARD AS PROPOSED. WE ARE FORWARDING A COPY OF THIS DECISION TO THE SECRETARY OF THE NAVY.