B-152039, JAN. 20, 1964

B-152039: Jan 20, 1964

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ESQUIRE: REFERENCE IS MADE TO TELEGRAMS OF JULY 15 AND 16. EACH PROPOSAL WAS REVIEWED AND RATED INDEPENDENTLY BY EACH MEMBER OF AN EVALUATION TEAM OF ENGINEERS. THE PROPOSALS WERE GRADED AS FOLLOWS: CHART GRADE TELEVISO ELECTRONICS 192 POINTS RAYTHEON COMPANY 116 POINTS LITTON INDUSTRIES 94 POINTS AVCO91 POINTS HAZELTINE COMPETITION 89 POINTS MADIGAN 81 POINTS AUTOMATION LABORATORIES UNSATISFACTORY ITT UNSATISFACTORY PHILCO UNSATISFACTORY DEPCO UNSATISFACTORY THE DEPCO PROPOSAL WAS GRADED "UNSATISFACTORY" BECAUSE THE DESIGN PROPOSED WAS CONSIDERED DEFICIENT IN THAT IT WAS BASED UPON APPLICATION OF AN EXISTING VIDICON CAMERA TUBE TECHNIQUE IN THE DEVELOPMENT OF THE SYSTEM. WHILE TWO OTHER METHODS WERE REFERENCED IN THE PROPOSAL.

B-152039, JAN. 20, 1964

TO GREGORY C. KARAS, ESQUIRE:

REFERENCE IS MADE TO TELEGRAMS OF JULY 15 AND 16, 1963, AND TO LETTERS OF THE SAME DATES AND AUGUST 5, 1963, FROM DAYTON ELECTRONIC PRODUCTS COMPANY, INC. (DEPCO), PROTESTING AWARD BY THE FEDERAL AVIATION AGENCY OF A COST-PLUS-A-FIXED-FEE CONTRACT FOR A VIDEO MAPPER SYSTEM TO TELEVISO ELECTRONICS UNDER REQUEST FOR PROPOSAL 4OR-3-1485.

TEN COMPANIES SUBMITTED PROPOSALS FOR A VIDEO MAPPER SYSTEM. EACH PROPOSAL WAS REVIEWED AND RATED INDEPENDENTLY BY EACH MEMBER OF AN EVALUATION TEAM OF ENGINEERS. AS A RESULT OF THE TEAM'S EVALUATION, THE PROPOSALS WERE GRADED AS FOLLOWS:

CHART

GRADE

TELEVISO ELECTRONICS 192 POINTS

RAYTHEON COMPANY 116 POINTS

LITTON INDUSTRIES 94 POINTS

AVCO91 POINTS

HAZELTINE COMPETITION 89 POINTS

MADIGAN 81 POINTS

AUTOMATION LABORATORIES UNSATISFACTORY

ITT UNSATISFACTORY

PHILCO UNSATISFACTORY

DEPCO UNSATISFACTORY

THE DEPCO PROPOSAL WAS GRADED "UNSATISFACTORY" BECAUSE THE DESIGN PROPOSED WAS CONSIDERED DEFICIENT IN THAT IT WAS BASED UPON APPLICATION OF AN EXISTING VIDICON CAMERA TUBE TECHNIQUE IN THE DEVELOPMENT OF THE SYSTEM. WHILE TWO OTHER METHODS WERE REFERENCED IN THE PROPOSAL, THE INFORMATION FURNISHED ABOUT THEM WAS CONSIDERED INSUFFICIENT TO PERMIT EVALUATION.

THE ADMINISTRATIVE OBJECTION TO THE VIDICON SYSTEM IS THAT IT IS DEFICIENT AS FOLLOWS:

1. THE MAP MAY BECOME "BURNED IN" ON THE MOSAIC SCREEN OF THE PICTORIAL DISPLAY TUBE, PRESENTING THUS A PERMANENT IMAGE WHICH DEFACES THE SCREEN AND PREVENTS ITS USE FOR CHANGED MAP POSITIONS OR DIFFERENT MAPS.

2. THE VIDOCON TUBE HAS A VERY SHORT LIFE AND THUS OPERATING COSTS ARE HIGH.

3. MAP POSITIONING IS DONE MECHANICALLY RATHER THAN ELECTRONICALLY.

4. THE SYSTEM HAS POOR RELIABILITY AND STABILITY, AND RESOLUTION IS MARGINAL.

DEPCO CONTENDED THAT THE AWARD SHOULD NOT HAVE BEEN MADE TO TELEVISO, BUT SHOULD HAVE BEEN MADE TO IT INSTEAD. IT HAS STATED THAT IT PRESENTED IN ITS PROPOSAL THREE DIFFERENT APPROACHES FROM WHICH THE AGENCY COULD HAVE MADE AN INTELLIGENT CHOICE AND THAT ITS PROPOSED ESTIMATED COST OF $120,429.89 FOR ANY ONE OF THE APPROACHES WAS MORE ADVANTAGEOUS THAN THE $296,223 COST FINALLY ESTIMATED BY TELEVISO. FURTHER, DEPCO HAS SUGGESTED SOME IRREGULARITY IN THE AGENCY ACTION IN MAKING AN AWARD TO TELEVISO BECAUSE DEPCO HAS ENGINEERING KNOW-HOW AND WAS NEVER CONTACTED FOR NEGOTIATION AFTER IT SUBMITTED ITS PROPOSAL. DEPCO SUGGESTED ALSO THAT ALL THE TECHNICAL PROPOSALS SHOULD HAVE BEEN SUBMITTED FOR EVALUATION BY A DISINTERESTED PARTY POSSESSING TECHNICAL KNOWLEDGE IN THE FIELD OF ELECTRONICS INVOLVED.

IN VIEW OF THE COST-REIMBURSEMENT TYPE CONTRACT CONTEMPLATED, DEPCO'S PROPOSAL IN THE NEGOTIATED PROCUREMENT CANNOT BE REGARDED IN THE SAME LIGHT AS A BID ON A FIXED PRICE CONTRACT. THE PROPOSAL OF $120,429.89 IS NOT IN ANY SENSE A LOWER OFFER THAN THE PROPOSAL OF $296,223 FROM THE SUCCESSFUL PROPONENT FOR THE REASON THAT NEITHER PROPONENT WOULD BE BOUND BY ITS COST ESTIMATES. REGARDLESS OF THE ESTIMATES SUBMITTED, THE GOVERNMENT IS BOUND TO PAY ACTUAL COSTS IN THE EVENT OF AN AWARD UNDER THE COST-REIMBURSEMENT TYPE OF CONTRACT CONTEMPLATED IN THIS PROCUREMENT. THEREFORE, IN SITUATIONS SUCH AS THESE, PROCUREMENT PERSONNEL MUST EXERCISE JUDGMENT AS TO WHETHER SUBMITTED PROPOSALS ARE REALISTIC AND DEMONSTRATE AN ADEQUATE UNDERSTANDING OF THE WORK INVOLVED. SUCH JUDGMENT MUST PROPERLY BE LEFT TO THE ADMINISTRATIVE DISCRETION OF THE CONTRACTING AGENCIES PROPONENT'S UNDERSTANDING AND MUST BEAR THE MAJOR BRUNT OF ANY DIFFICULTIES OR EXPENSES EXPERIENCED BY REASON OF THE CONTRACTOR'S LACK OF UNDERSTANDING.

THAT DEPCO WAS NOT CONTACTED FOR NEGOTIATION AFTER SUBMISSION OF ITS ORIGINAL PROPOSAL IS NOT AN IMPROPER OMISSION, SINCE FEDERAL PROCUREMENT REGULATIONS 1-3.805/A) (1) PROVIDES THAT 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 PROCUREMENT IN THIS CASE WAS MADE UNDER NEGOTIATED PROCEDURES PERMITTING PROCUREMENT PERSONNEL A CONSIDERABLY BROAD RANGE OF DISCRETION. WE THEREFORE DO NOT FIND THAT THERE WAS ANY LEGAL OBLIGATION FOR THE CONTRACTING AGENCY TO MAKE AN AWARD TO DEPCO.

THE ENCLOSURES THAT ACCOMPANIED THE AUGUST 5 LETTER ARE RETURNED AS REQUESTED.