B-154653, NOV. 27, 1964

B-154653: Nov 27, 1964

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TO BE LOCK INSTRUMENT COMPANY: REFERENCE IS MADE TO YOUR LETTER OF JULY 2. RFQ-5079 WAS ISSUED BY THE AERONAUTICAL SYSTEMS DIVISION (ASD) OF THE AIR FORCE SYSTEMS COMMAND. RFQ-5003 WAS ISSUED BY ASD. WHICH WAS ORIGINALLY SET FOR AUGUST 10. WHICH WAS ISSUED TO YOU AND TO THE SPERRY GYROSCOPE COMPANY. WHICH DISCLOSED THAT YOU WERE LOW ON ONE ITEM WHILE SPERRY WAS LOW ON THE OTHER. IT WAS DETERMINED BY ASD THAT A SPLIT AWARD MIGHT RESULT IN A SAVING TO THE GOVERNMENT. ASD DISPATCHED MESSAGES TO YOU AND TO SPERRY STATING THAT THE "ALL OR NOTHING" PROVISION WAS DELETED FROM THE RFQ AND THAT. FOR SUBMISSION OF REVISED PROPOSALS WAS PRESCRIBED. IT WAS DETERMINED BY ASD THAT A SINGLE AWARD WOULD BE MADE.

B-154653, NOV. 27, 1964

TO BE LOCK INSTRUMENT COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF JULY 2, 1964, AND SUBSEQUENT CORRESPONDENCE, IN WHICH YOU PROTEST THE REFUSAL OF THE DEPARTMENT OF THE AIR FORCE TO PERMIT CORRECTION OF AN ALLEGED MISTAKE IN A PROPOSAL SUBMITTED BY YOU UNDER REQUEST FOR QUOTATIONS NO. 33-657-64-5079, DATED MAY 27, 1964. YOU ALSO CONTEND THAT THE REQUIREMENT OF THAT PROCUREMENT SHOULD BE COMBINED WITH THE REQUIREMENTS UNDER RFQ NO. 33 657-65-5003, ISSUED JUNE 30, 1964.

RFQ-5079 WAS ISSUED BY THE AERONAUTICAL SYSTEMS DIVISION (ASD) OF THE AIR FORCE SYSTEMS COMMAND, PURSUANT TO THE "PUBLIC EXIGENCY" AUTHORITY IN 10 U.S.C. 2304 (A) (2), FOR THE PROCUREMENT OF TWO COMPONENTS (END ITEMS) OF THE STANDARD AN/APN-59B RADAR SET. RFQ-5003 WAS ISSUED BY ASD, PURSUANT TO THE "TECHNICAL OR SPECIAL PROPERTY" PURCHASE AUTHORITY IN 10 U.S.C. 2304 (A) (14), FOR THE PROCUREMENT OF SMALL QUANTITIES OF ROUTINE SUPPORT ITEMS FOR THE SAME RADAR SYSTEM. THE FINAL DATE FOR SUBMISSION OF PROPOSALS ON THE LATTER PROCUREMENT, WHICH WAS ORIGINALLY SET FOR AUGUST 10, 1964, HAS BEEN EXTENDED.

RFQ-5079, WHICH WAS ISSUED TO YOU AND TO THE SPERRY GYROSCOPE COMPANY, AS THE ONLY APPROVED SOURCES OF THE TWO ITEMS INVOLVED, ORIGINALLY SOLICITED OFFERS ON AN "ALL OR NOTHING" BASIS, CONTEMPLATING A SINGLE CONTRACT AWARD TO THE LOWER BIDDER ON AN AGGREGATE BASIS. HOWEVER, AFTER EVALUATION ON JUNE 11 OF THE TWO OFFERS, WHICH DISCLOSED THAT YOU WERE LOW ON ONE ITEM WHILE SPERRY WAS LOW ON THE OTHER, IT WAS DETERMINED BY ASD THAT A SPLIT AWARD MIGHT RESULT IN A SAVING TO THE GOVERNMENT. THEREFORE, ON JUNE 12, ASD DISPATCHED MESSAGES TO YOU AND TO SPERRY STATING THAT THE "ALL OR NOTHING" PROVISION WAS DELETED FROM THE RFQ AND THAT, IF NECESSARY, REVISED QUOTATIONS SHOULD BE SUBMITTED. IN ADDITION, IN ACCORDANCE WITH ARMED SERVICES PROCUREMENT REGULATION 3-805.1/B), A FINAL DATE--- JUNE 15- -- FOR SUBMISSION OF REVISED PROPOSALS WAS PRESCRIBED.

ON JUNE 15, YOU ELECTED TO STAND BY YOUR ORIGINAL OFFER. SPERRY, HOWEVER, SUBMITTED A REVISED PROPOSAL AND BECAME LOW OFFEROR ON BOTH ITEMS. ACCORDINGLY, IT WAS DETERMINED BY ASD THAT A SINGLE AWARD WOULD BE MADE, AND AFTER A FACILITY CAPABILITY REPORT WAS OBTAINED ON SPERRY, AUTHORIZATION FOR THE ISSUANCE OF A CONTRACT TO SPERRY WAS APPROVED ON JUNE 23.

ALSO, ON JUNE 23, YOUR REPRESENTATIVE ALLEGED THAT YOU HAD MADE A MATHEMATICAL MISTAKE IN THE CALCULATION OF YOUR QUOTATION ON ONE OF THE ITEMS. AFTER CONSIDERATION OF THE EVIDENCE SUBMITTED BY YOU, ASD DETERMINED THAT CORRECTION OF THE MISTAKE, WHICH WOULD HAVE DISPLACED THE LOW OFFER ON THE ITEM, SHOULD NOT BE PERMITTED SINCE THE MISTAKE WAS NOT APPARENT ON THE FACE OF YOUR PROPOSAL. THEREFORE, IT WAS CONSIDERED THAT YOUR REQUEST FOR REVISION OF YOUR PROPOSAL AMOUNTED TO A LATER MODIFICATION AND THAT REOPENING OF NEGOTIATIONS, WHICH WOULD HAVE REQUIRED ADDITIONAL TIME IN ACCORDANCE WITH ASPR 3-505 TO PERMIT SPERRY TO SUBMIT ANOTHER REVISED QUOTATION, WAS NOT WARRANTED IN VIEW OF THE URGENCY OF THE PROCUREMENT AND SINCE THE MISTAKE WAS NOT A MATTER OF EXTREME IMPORTANCE AS CONTEMPLATED BY ASPR 3-505. ACCORDINGLY, ON JULY 1, A CONTRACT WAS ISSUED TO SPERRY FOR BOTH ITEMS.

IN CONNECTION WITH RFQ-5079, YOU STATE THAT YOUR WRITTEN ALLEGATION OF MISTAKE WAS TIMELY, AND YOU CITE A PRIOR ADVERTISED PROCUREMENT OF THE SAME ITEM BY ASD, IN WHICH, YOU STATE, THE PROCUREMENT WAS DELAYED FOR TEN WEEKS PENDING RESOLUTION OF A BIDDER'S PROTEST. THEREFORE, YOU INFER, ASD EMPLOYS A DOUBLE STANDARD.

IN ADDITION, YOU ALLEGE THAT SPERRY HAD ACCESS TO INFORMATION REGARDING THE CONTRACT REQUIREMENTS AS EARLY AS MAY 15, OR TWELVE DAYS PRIOR TO THE ISSUANCE OF THE RFQ. THEREFORE, YOU ALLEGE, SPERRY HAD FIFTEEN DAYS MORE THAN YOU TO PREPARE AN "EMERGENCY PROCUREMENT.'

CONCERNING RFQ-5003, YOU CONTEND THAT IT WOULD BE MORE ECONOMICAL TO COMBINE THE TWO PROCUREMENTS AND TO SOLICIT NEW QUOTATIONS FOR THE TOTAL REQUIREMENTS. FURTHER, YOU CLAIM, THE COMPANY WHICH WAS AWARDED THE EARLIER PROCUREMENT HAS A COMPETITIVE ADVANTAGE OVER YOU SINCE IT WILL BE IN A POSITION TO COMBINE THE ITEMS IN BOTH PROCUREMENTS WHEREAS YOU "CANNOT EFFECT PURCHASED PARTS AND MANUFACTURE EFFICIENCIES WITH SUCH LIMITED QUANTITIES.' THEREFORE, YOU CONTEND, THE PROCUREMENTS SHOULD BE COMBINED TO PERMIT YOU TO COMPLETE ON AN EQUAL BASIS.

IN A REPORT DATED OCTOBER 23, 1964, FROM THE DEPARTMENT OF THE AIR FORCE, IT IS STATED THAT THE PRODUCTION LEAD-TIME FOR THE ITEMS COVERED BY RFQ- 5079, PURCHASE OF WHICH WAS REQUESTED IN MARCH 1964 AND WHICH WERE NEEDED IN NOVEMBER 1964, HAD BEEN SIX MONTHS IN PREVIOUS PROCUREMENTS, BUT IT WAS THE OPINION OF ASD PURCHASING PERSONNEL THAT BOTH YOU AND SPERRY WERE CAPABLE OF REDUCING THE LEAD TIME TO FIVE MONTHS. TO INSURE DELIVERY OF THE ITEMS BY THE REQUIRED DATE, THEREFORE, AWARD OF A CONTRACT (OR CONTRACTS) WAS NECESSARY PRIOR TO JUNE 30. SINCE THE SHORTENED LEAD-TIME NECESSARILY INVOLVED REDUCTION FROM 30 TO 15 DAYS OF THE NORMAL PERIOD FOR SUBMISSION OF PROPOSALS, BOTH YOU AND SPERRY WERE ASKED PRIOR TO THE ISSUANCE OF THE RFQ WHETHER YOU COULD PREPARE QUOTATIONS WITHIN 15 DAYS, AND YOUR REPLIES WERE AFFIRMATIVE. ACCORDINGLY, THE REQUEST OF THE PROCURING ACTIVITY FOR A SHORTENED BID PREPARATION PERIOD WAS APPROVED ON MAY 15.

IN CONNECTION WITH SUCH PRELIMINARY DISCUSSIONS WHICH WERE CONDUCTED BY TELEPHONE, ASD REPORTS THAT AT NO TIME DURING THE CONVERSATIONS WAS ANY INFORMATION WHATSOEVER AS TO A SPECIFIC FUTURE REQUIREMENT OR SPECIFIC QUANTITIES GIVEN BY ASD PERSONNEL TO EITHER SPERRY OR TO YOU. FURTHER, IT IS REPORTED, THE SPERRY REPRESENTATIVE EXPRESSED SURPRISE AT THE SIZE OF THE PROCUREMENT AFTER THE RFQ WAS ISSUED ON MAY 27.

AS TO THE URGENCY OF THE FIRST PROCUREMENT, ASD REPORTS THAT THE USING ACTIVITY, WHICH ORIGINALLY REQUESTED DELIVERIES IN MARCH 1964, ADVISED THAT THERE IS A SEVERE SHORTAGE OF THE TWO ITEMS, AND, THEREFORE, THE NOVEMBER 1964 DELIVERY DATE COULD NOT BE SLIPPED. THE SECOND PROCUREMENT, HOWEVER, INVOLVES ROUTINE SUPPORT ITEMS AND HAS NO ELEMENT OF URGENCY. PURCHASE REQUESTS FOR SOME OF THE ITEMS WERE NOT EVEN ORIGINATED UNTIL JUNE 1964, AND FUNDS HAD NOT BEEN ALLOCATED FOR ALL OF THEM AT THE TIME OF THE AWARD UNDER THE EARLIER RFQ. WE ARE ALSO ADVISED BY THE PROCUREMENT OFFICE THAT ASD HAS BEEN INSTRUCTED TO FURNISH YOU WITH ALL AVAILABLE DRAWINGS AND TO EXTEND NEGOTIATIONS FOR A REASONABLE TIME TO PERMIT YOU AND OTHER FIRMS AN OPPORTUNITY TO SUBMIT PROPOSALS.

ASPR 3-805.1/B) PROVIDES THAT WHENEVER NEGOTIATIONS ARE CONDUCTED WITH MORE THAN ONE OFFEROR, NO INDICATION SHALL BE MADE TO ANY OFFEROR OF A PRICE WHICH MUST BE MET TO OBTAIN FURTHER CONSIDERATION, SINCE SUCH PRACTICE CONSTITUTES AN AUCTION TECHNIQUE WHICH MUST BE AVOIDED. ACCORDINGLY, THE CONTRACTING OFFICER MAY ONLY ADVISE OFFERORS THAT REVISED PROPOSALS WILL BE CONSIDERED, AND EACH OFFEROR MUST DETERMINE WHETHER ITS QUOTATION WILL BE REVISED. THE ACTION OF THE PROCURING ACTIVITY IN ADVISING YOU AND SPERRY REGARDING THE SUBMISSION OF REVISED PROPOSALS WITHOUT DISCLOSURE AS TO THE PRICES OFFERED IN THE INITIAL QUOTATIONS WAS THEREFORE IN ACCORD WITH THE REGULATIONS. FURTHERMORE, SINCE SPERRY WAS ABLE TO PREPARE A REVISED PROPOSAL DURING THE TIME WHICH ELAPSED BETWEEN THE DATE THE RFQ WAS AMENDED BY THE JUNE 12 MESSAGE AND JUNE 15, THE DATE OF CLOSING OF THE PERIOD FOR SUBMISSION OF REVISED QUOTATIONS, IT CANNOT BE SAID THAT THERE WAS NOT SUFFICIENT TIME FOR YOU TO REVIEW YOUR QUOTATION AND REVISE IT IF DESIRED, EITHER TO CORRECT ERRORS OR TO OFFER DIFFERENT PRICES.

WHILE THE RULES OF FORMAL COMPETITIVE BIDDING ARE NOT APPLICABLE TO NEGOTIATED PROCUREMENTS, IT IS OUR VIEW THAT NEGOTIATIONS SHOULD BE CONDUCTED TO THE BEST ADVANTAGE OF THE GOVERNMENT. MOREOVER, IN NEGOTIATED PROCUREMENTS, PRICE IS ONLY ONE OF THE FACTORS FOR CONSIDERATION IN MAKING AWARD, AND WE HAVE HELD IN CIRCUMSTANCES SIMILAR TO THESE THAT A CHANGE IN PRICE ALONE DOES NOT REQUIRE CONSIDERATION OF A LATE PROPOSAL. B-154206, JULY 30, 1964. THEREFORE, HAVING IN MIND THE URGENCY OF THE PROCUREMENT AND THE ADDITIONAL FACT THAT CORRECTION OF THE MISTAKE IN YOUR QUOTATION, WHICH YOU DID NOT ALLEGE UNTIL EIGHT DAYS AFTER THE PERIOD FOR SUBMISSION OF QUOTATIONS HAD EXPIRED AND WHICH CANNOT BE ASCERTAINED FROM THE REQUEST FOR QUOTATIONS EXECUTED BY YOU, WOULD DISPLACE SPERRY'S TIMELY SUBMITTED LOW OFFER ON THE ITEM IN QUESTION, WE FIND NO GROUND FOR OBJECTION TO THE DENIAL OF YOUR REQUEST FOR CORRECTION. MOREOVER, SUCH ACTION IS IN ACCORD WITH THE RULE APPLICABLE TO ADVERTISED PROCUREMENTS, WHICH PERMITS A DOWNWARD CORRECTION THAT WILL DISPLACE A LOW BID ONLY WHEN BOTH THE ERROR AND THE AMOUNT INTENDED ARE ASCERTAINABLE FROM THE INVITATION AND BID ITSELF. SEE ASPR 2-406.3 (A) (3).

WITH RESPECT TO WHETHER DOUBLE STANDARDS WERE FOLLOWED BY ASD (IN THE PROCUREMENT UNDER RFQ-5079 AND IN THE PRIOR ADVERTISED PROCUREMENT TO WHICH YOU REFER) IN DELAYING AWARDS DURING PENDENCY OF PROTESTS, THE ADMINISTRATIVE STATEMENT REGARDING THE URGENCY OF THE RFQ-5079 PROCUREMENT INDICATES THAT THERE WAS SUFFICIENT BASIS FOR THE DECISION NOT TO POSTPONE THE AWARD IN THE INSTANT CASE. FURTHERMORE, THE USE OF ADVERTISING IN THE PRIOR PROCUREMENT WOULD, IN ITSELF, APPEAR TO INDICATE THAT THE PROCUREMENT WAS NOT AS URGENT AS THE RFQ-5079 PROCUREMENT. IN ADDITION, ASD REPORTS THAT IT WAS SURPRISED THAT YOU HAD NOT SUBMITTED A REVISED PROPOSAL, BECAUSE IN A SIMILAR NEGOTIATED PROCUREMENT IN 1963 (RFQ 64-300- WVB) A REVISED PROPOSAL SUBMITTED BY YOU ON THE DATE FOR CLOSING OF NEGOTIATIONS WAS ACCEPTABLE, AND UPON SUBSEQUENT REOPENING OF NEGOTIATIONS A SECOND REVISED PROPOSAL FROM YOU WAS ACCEPTED BY ASD. SUCH FACTS INDICATE THAT ASD'S PROCEDURE CONCERNING CONSIDERATION OF PROTESTS IN NEGOTIATED PROCUREMENTS IS NOT INCONSISTENT, THE DECISION NOT TO DELAY IN THE RFQ-5079 PROCUREMENT BEING SUPPORTED BY THE URGENCY OF THE PURCHASE.

FROM THE FOREGOING, IT WOULD NOT APPEAR THAT THERE WAS ANY IRREGULARITY IN THE CONDUCT OF THE RFQ-5079 PROCUREMENT, AND THAT THE URGENT NEED FOR THE ITEMS INVOLVED PRECLUDED THE CONSOLIDATION OF THAT PROCUREMENT WITH THE REQUIREMENTS OF RFQ-5003. IN THE CIRCUMSTANCES, WE FIND NO BASIS TO QUESTION THE PROPRIETY OF THE ACTION OF ASD IN THE CONDUCT OF EITHER PROCUREMENT.