B-154401, AUG. 21, 1964

B-154401, AUG. 21, 1964

TO MIDWESTERN INSTRUMENTS, INC.:

REFERENCE IS MADE TO A LETTER DATED JUNE 16, 1964, FROM YOUR ATTORNEYS, PROTESTING THE AWARD OF A CONTRACT TO CENTURY ELECTRONICS AND INSTRUMENTS, INC., UNDER REQUEST FOR PROPOSALS NO. E-19176, ISSUED BY THE SUPPLY DEPARTMENT, PUGET SOUND NAVAL SHIPYARD, BREMERTON, WASHINGTON.

THE REQUEST FOR PROPOSALS SOLICITED PROPOSALS FROM THREE FIRMS FOR TWO ITEMS OF OSCILLOGRAPHS (ITEMS 1 AND 13) IN ACCORDANCE WITH BUORD DRAWINGS 1313040 AND 2436248 AND SPECIFICATIONS MIL-O-23560, O-23560/2 AND O- 23560/4 AND TWO ITEMS OF PREPRODUCTION SAMPLES (ITEMS 2 AND 4) FOR ITEMS 1 AND 3. THE REVERSE SIDE OF THE COVER SHEET OF THE REQUEST FOR PROPOSALS PROVIDED IN PERTINENT PART AS FOLLOWS:

"1. ACCEPTANCE--- (A) THE GOVERNMENT MAY ACCEPT ANY ITEM OR GROUP OF ITEMS OF ANY PROPOSAL UNLESS QUALIFIED BY SPECIFIC LIMITATION OF THE OFFEROR.

"/B) UNLESS OTHERWISE PROVIDED IN THE SCHEDULE, PROPOSALS MAY BE SUBMITTED FOR ANY QUANTITIES LESS THAN THOSE SPECIFIED: AND THE GOVERNMENT RESERVES THE RIGHT TO MAKE AN AWARD ON ANY ITEM FOR A QUANTITY LESS THAN THE QUANTITY PROPOSED AT THE UNIT PRICE OFFERED UNLESS THE OFFEROR SPECIFIED OTHERWISE IN ITS PROPOSAL.

"/C) THE GOVERNMENT MAY ACCEPT WITHIN THE TIME SPECIFIED THEREIN, ANY PROPOSAL (OR PART THEREOF AS PROVIDED IN (A) AND (B) ABOVE), WHETHER OR NOT THERE ARE NEGOTIATIONS SUBSEQUENT TO ITS RECEIPT, UNLESS THE PROPOSAL IS WITHDRAWN IN WRITING PRIOR TO ACCEPTANCE. SUCH SUBSEQUENT NEGOTIATIONS SHALL NOT CONSTITUTE A REJECTION OR COUNTER OFFER ON THE PART OF THE GOVERNMENT.

"/D) IT IS CONTEMPLATED THAT A CONTRACT WILL BE AWARDED TO THAT RESPONSIBLE OFFEROR WHOSE PROPOSAL WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. THE RIGHT IS RESERVED TO ACCEPT OTHER THAN THE LOWEST PROPOSAL AND TO REJECT ANY OR ALL PROPOSALS.'

ON PAGE 4 OF THE REQUEST FOR PROPOSALS UNDER THE HEADING "AWARD INFORMATION" APPEARED THE FOLLOWING STATEMENT:

"AWARD INFORMATION: A CONTRACT MAY BE AWARDED ON THE BASIS OF MOST FAVORABLE INITIAL PROPOSAL SUBMITTED WITHOUT SUBSEQUENT ORAL OR WRITTEN DISCUSSION. FIRMS ARE ADVISED, THEREFORE, TO COMPLETE THEIR PROPOSAL SHOWING THEIR MOST FAVORABLE TERMS, FROM A PRICE AND TECHNICAL STANDPOINT, WHICH THEY CAN SUBMIT TO THE GOVERNMENT.'

WITH REGARD TO REQUIREMENTS FOR PREPRODUCTION SAMPLES, PAGE 10 OF THE REQUEST FOR PROPOSALS PROVIDED IN PERTINENT PART AS FOLLOWS:

"THE GOVERNMENT RESERVES THE RIGHT TO WAIVE REQUIREMENTS FOR PRE PRODS WHEN AWARD IS MADE TO A FIRM WHICH HAS PREVIOUSLY FURNISHED SIMILAR ITEMS.'

TWO PROPOSALS WERE RECEIVED. YOU QUOTED A UNIT PRICE OF $947.95 FOR EACH OF THE FOUR ITEMS INVOLVED, OR A TOTAL OF $405,722.60. CENTURY ELECTRONICS AND INSTRUMENTS, INC., QUOTED A UNIT PRICE OF $867 FOR EACH OF THE FOUR ITEMS, OR A TOTAL OF $371,076. ALSO, CENTURY SUBMITTED AN ALTERNATE PROPOSAL BY ADDING A RELIABILITY PROGRAM AND IT QUOTED A UNIT PRICE OF $905.03 THEREFOR, OR A TOTAL OF $387,352.84. THE PROPOSALS WERE RECEIVED BY PERSONNEL OF THE NAVAL TORPEDO STATION, KEYPORT, WASHINGTON, FOR TECHNICAL EVALUATION AND RECOMMENDATION. IT WAS DETERMINED THAT ACCEPTANCE OF THE ALTERNATE PROPOSAL SUBMITTED BY CENTURY WHICH WAS IN STRICT ACCORDANCE WITH THE SPECIFICATIONS WITH THE ADDITION OF A RELIABILITY PROGRAM WAS IN THE BEST INTERESTS OF THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. THE REQUIREMENT FOR PREPRODUCTION MODELS WAS WAIVED BASED ON THE FACT THAT SIMILAR SATISFACTORY UNITS HAD BEEN PREVIOUSLY SUPPLIED BY CENTURY.

IN THE LETTER OF PROTEST, IT IS CONTENDED THAT THE CENTURY OSCILLOGRAPHS HAVE AN OPTICAL ARM WHICH MEASURES 6.58 INCHES PLUS OR MINUS 1/4 INCH, WHILE THE SPECIFICATIONS REQUIRE 7 INCHES WITH A PERMISSIBLE VARIATION OF 2 PERCENT. IN REGARD TO THIS CONTENTION, THE PURCHASING ACTIVITY HAS STATED THAT THE PROPOSAL SUBMITTED BY CENTURY OFFERED MATERIAL IN STRICT ACCORDANCE WITH THE SPECIFICATIONS AND NO WAIVERS OR DEVIATIONS WERE REQUESTED OR GRANTED. ALSO, IT IS CONTENDED THAT THE PROPOSAL SUBMITTED BY CENTURY WAS ACCEPTED AFTER NEGOTIATING THE PREPRODUCTION SAMPLES (ITEMS 2 AND 4) OUT OF THE CONTRACT. NO NEGOTIATION WAS REQUIRED OR CONDUCTED WITH CENTURY AS THE PREPRODUCTION SAMPLES WERE OMITTED IN ACCORDANCE WITH THE CITED PROVISION AT THE BOTTOM OF PAGE 10 OF THE REQUEST FOR PROPOSALS SINCE IT IS REPORTED THAT CENTURY HAS PREVIOUSLY SUPPLIED SIMILAR SATISFACTORY UNITS. THE PROVISION IN THE REQUEST FOR PROPOSALS THAT A CONTRACT MAY BE AWARDED ON THE BASIS OF THE MOST FAVORABLE INITIAL PROPOSAL SUBMITTED WITHOUT SUBSEQUENT ORAL OR WRITTEN DISCUSSION WAS AUTHORIZED BY PARAGRAPH 3-805.1 OF THE ARMED SERVICES PROCUREMENT REGULATION. SINCE THE PARTIES INTERESTED IN SUBMITTING PROPOSALS WERE NOTIFIED IN ADVANCE THAT THEIR INITIAL PROPOSALS WERE TO REFLECT THEIR MOST FAVORABLE TERMS, FROM A PRICE STANDPOINT, IT MUST BE PRESUMED THAT YOUR UNIT PRICE OF $947.95 REPRESENTED THE LOWEST PRICE YOU COULD QUOTE AS COMPARED WITH THE UNIT PRICE OF $867 OFFERED BY CENTURY.

IN THE LETTER OF PROTEST, IT IS ALSO CONTENDED THAT THE ADDITION OF THE RELIABILITY PROGRAM WAS A CHANGE IN THE GOVERNMENT'S REQUIREMENTS AND SHOULD HAVE REQUIRED COMPETITION SO THAT MIDWESTERN SHOULD HAVE BEEN AFFORDED AN OPPORTUNITY TO QUOTE ON THIS PROGRAM. IT IS NOTED THAT IN A PRIOR ADVERTISEMENT FOR OSCILLOGRAPHS WHICH WAS THE SUBJECT OF OUR DECISION OF JUNE 18, 1964, B-154261, YOU QUOTED "NO CHARGE" FOR A RELIABILITY PROGRAM WHEREAS CENTURY QUOTED A PRICE OF $46,729. THIS INDICATES THAT YOUR PRICE WOULD NOT HAVE BEEN REDUCED IF YOU WERE TO OFFER A RELIABILITY PROGRAM. IN THE INSTANT CASE, CENTURY'S PRICE FOR THE OSCILLOGRAPHS WITH A RELIABILITY PROGRAM WAS ONLY $905.03 EACH WHEREAS YOUR PRICE WITHOUT SUCH A PROGRAM WAS $947.95 EACH. THUS, THE GOVERNMENT IS NOT PAYING ANY AMOUNT IN EXCESS OF THAT FOR WHICH YOU COULD HAVE FURNISHED THE OSCILLOGRAPHS WITH A RELIABILITY PROGRAM.