B-151967, JAN. 2, 1964

B-151967: Jan 2, 1964

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED JULY 3. THAT THE GOVERNMENT WILL BE IMPROPERLY RECEIVING AND USING PROPRIETARY INFORMATION WHICH HAD BEEN PREVIOUSLY DISCLOSED BY YOU TO THE SUCCESSFUL OFFEROR IN CONFIDENCE. SEVERAL RESPONSIVE QUOTATIONS WERE RECEIVED BY THE GOVERNMENT IN THIS CASE AND THE PROPOSALS WERE EVALUATED BY A TECHNICAL EVALUATION COMMITTEE. A DETERMINATION WAS MADE TO CONDUCT NEGOTIATIONS WITH YOUR COMPANY AND ANOTHER COMPANY AS THE HIGHEST RATED OFFERORS FROM THE STANDPOINT OF THEIR INDICATED TECHNICAL ABILITIES. IT WAS DETERMINED THAT THE CONTRACT AWARD SHOULD BE MADE TO YOUR COMPETITOR ON THE BASIS THAT ACCEPTANCE OF ITS FINAL OFFER WOULD RESULT IN THE LOWEST OVER-ALL COSTS TO THE GOVERNMENT FOR SATISFACTORY PERFORMANCE OF THE PROPOSED WORK.

B-151967, JAN. 2, 1964

TO J. A. MAURER, INC.

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED JULY 3, 1963, AND LETTER DATED JULY 10, 1963, PROTESTING THE AWARD OF A CONTRACT TO ANOTHER COMPANY BY THE DEPARTMENT OF THE ARMY FOR THE CONDUCT OF A PARTICULAR RESEARCH PROGRAM. YOU CONTEND THAT THE GOVERNMENT FAILED TO PROVIDE AN EQUAL OPPORTUNITY TO YOUR COMPANY TO COMPETE FOR THE CONTRACT, AND THAT THE GOVERNMENT WILL BE IMPROPERLY RECEIVING AND USING PROPRIETARY INFORMATION WHICH HAD BEEN PREVIOUSLY DISCLOSED BY YOU TO THE SUCCESSFUL OFFEROR IN CONFIDENCE.

SEVERAL RESPONSIVE QUOTATIONS WERE RECEIVED BY THE GOVERNMENT IN THIS CASE AND THE PROPOSALS WERE EVALUATED BY A TECHNICAL EVALUATION COMMITTEE. A DETERMINATION WAS MADE TO CONDUCT NEGOTIATIONS WITH YOUR COMPANY AND ANOTHER COMPANY AS THE HIGHEST RATED OFFERORS FROM THE STANDPOINT OF THEIR INDICATED TECHNICAL ABILITIES. AFTER NEGOTIATIONS WITH BOTH FIRMS, IT WAS DETERMINED THAT THE CONTRACT AWARD SHOULD BE MADE TO YOUR COMPETITOR ON THE BASIS THAT ACCEPTANCE OF ITS FINAL OFFER WOULD RESULT IN THE LOWEST OVER-ALL COSTS TO THE GOVERNMENT FOR SATISFACTORY PERFORMANCE OF THE PROPOSED WORK.

YOUR FIRST GROUND OF PROTEST IS THAT THE DEPARTMENT OF THE ARMY DID NOT FOLLOW AN ALLEGEDLY CONTEMPLATED COST-PLUS-A-FIXED-FEE ARRANGEMENT WITH THE SUCCESSFUL OFFEROR, AND THAT THE CONTRACT AWARD WAS MADE ON A FIXED PRICE BASIS WITHOUT NOTICE TO YOU DURING THE COURSE OF THE NEGOTIATIONS THAT A FIXED PRICE PROPOSAL WOULD BE GIVEN CONSIDERATION.

THE REQUEST FOR PROPOSALS DID NOT IN ITSELF SPECIFY THAT ONLY COST PLUS-A -FIXED-FEE PROPOSALS WOULD BE CONSIDERED. IT PROVIDED THAT QUOTATIONS SHOULD BE SUBMITTED INITIALLY ON THE MOST FAVORABLE TERMS WHICH EACH OFFEROR COULD SUBMIT FROM A PRICE AND TECHNICAL STANDPOINT. HOWEVER, PROSPECTIVE OFFERORS WERE ADVISED BY TRANSMITTAL LETTERS THAT IT WAS CONTEMPLATED THE CONTRACT RESULTING FROM THE REQUEST FOR PROPOSALS WOULD BE OF A COST-PLUS-A-FIXED-FEE TYPE, INCLUDING POSSIBLE INCENTIVE PROVISIONS. WE DO NOT CONSIDER SUCH INFORMATION AS HAVING BOUND THE GOVERNMENT TO ANY SPECIFIC TYPE OF CONTRACT WHEN NEGOTIATING WITH THE TWO HIGHEST RATED OFFERORS. SEE 37 COMP. GEN. 430, AND SECTION 3-403 OF THE ARMED SERVICES PROCUREMENT REGULATION WHICH STATES THAT THE SELECTION OF CONTRACT TYPE IN NEGOTIATED PROCUREMENTS IS GENERALLY A MATTER FOR NEGOTIATION AND REQUIRES THE EXERCISE OF JUDGMENT.

THE DEPARTMENT OF THE ARMY HAS DENIED YOUR ALLEGATION THAT DURING THE NEGOTIATIONS YOU WERE NOT AFFORDED AN OPPORTUNITY TO SUBMIT A FIXED PRICE PROPOSAL. ACCORDING TO THE DEPARTMENTAL REPORT, YOU WERE REQUESTED TO CONSIDER CONVERSION TO A FIXED PRICE OFFER AND YOU REJECTED THIS SUGGESTION ON THE GROUND THAT THE NATURE OF THE WORK WAS SUCH THAT IT WOULD NOT BE APPROPRIATE FOR YOU TO SUBMIT A FIXED PRICE OFFER. AT A CONFERENCE WITH YOUR ATTORNEY AFTER THE RECEIPT OF THE DEPARTMENTAL REPORT ON YOUR PROTEST, IT WAS INDICATED BY HIM THAT YOU WOULD PROVIDE ADDITIONAL INFORMATION ON THIS POINT BUT WE HAVE NOT RECEIVED ANY FURTHER COMMUNICATION FROM YOU IN SUPPORT OF THE PROTEST.

WITH RESPECT TO YOUR SECOND GROUND OF PROTEST, WE ARE NOT IN A POSITION TO QUESTION THE VIEW OF THE DEPARTMENT OF THE ARMY THAT IT CANNOT READILY BE ASCERTAINED WHETHER THE CONTRACTOR HAS MISAPPROPRIATED YOUR PROPRIETARY RIGHTS AND THAT YOU SHOULD TAKE APPROPRIATE LEGAL ACTION IF YOU BELIEVE THAT YOUR COMPETITOR HAS VIOLATED SUCH RIGHTS.

BY LETTER DATED AUGUST 8, 1963, YOU REQUESTED AN OPPORTUNITY FOR ONE OF YOUR REPRESENTATIVES TO EXAMINE THE PROPOSAL OF THE SUCCESSFUL OFFEROR. HOWEVER, FOR THE REASONS FURNISHED TO YOUR ATTORNEY AT THE TIME OF HIS VISIT TO THIS OFFICE, WE WOULD NOT BE AUTHORIZED TO PERMIT SUCH AN EXAMINATION OF THE PROPOSAL INVOLVED TO BE MADE.

ON THE BASIS OF THE EXISTING RECORD, WE FIND NO LEGAL BASIS FOR TAKING EXCEPTION TO THE CONTRACT AWARD IN THIS CASE AND YOUR PROTEST WITH RESPECT THERETO IS THEREFORE DENIED.