B-155656, JAN. 26, 1965

B-155656: Jan 26, 1965

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INC.: REFERENCE IS MADE TO YOUR TELEGRAM OF NOVEMBER 24. QUOTATIONS FROM FOUR COMPANIES WERE RECEIVED. YOUR PROPOSAL WAS THE SECOND LOWEST RECEIVED. "YOUR TECHNICAL PROPOSAL WILL BE A PRIMARY FACTOR IN DETERMINING AWARD.'. ALL QUOTATIONS RECEIVED WERE INITIALLY ANALYZED BY COGNIZANT BUREAU OF SHIPS PERSONNEL. ONLY VITRO LABORATORIES WAS CONSIDERED TO BE TECHNICALLY QUALIFIED TO PERFORM THE SERVICES WITHIN THE TIME REQUIRED AND A RECOMMENDATION WAS MADE THAT THE CONTRACT BE AWARDED TO VITRO. IT IS REPORTED THAT THE FOLLOWING ANALYSIS OF VITRO'S QUOTATION WAS MADE: "A. THEY HAVE THE TECHNICAL PERSONNEL AND FACILITIES TO ACCOMPLISH THIS IN TIME CYCLE REQUIRED. THIS COMPANY IS THE MAJOR WEAPON SYSTEMS COORDINATING AGENCY FOR THE BUREAU OF WEAPONS AND IS TECHNICALLY THE SOURCE OF THE MISSILE WEAPON SYSTEMS FUNCTIONAL REQUIREMENTS.

B-155656, JAN. 26, 1965

TO ELCOM, DIVISION OF AUDIGER, INC.:

REFERENCE IS MADE TO YOUR TELEGRAM OF NOVEMBER 24, 1964, IN REGARD TO THE CONTEMPLATED REJECTION OF YOUR PROPOSAL SUBMITTED IN RESPONSE TO REQUEST FOR QUOTATIONS P.R. 622D-42418/S) ISSUED AUGUST 13, 1964, BY THE BUREAU OF SHIPS, DEPARTMENT OF THE NAVY.

THE INVOLVED REQUEST FOR QUOTATIONS INVITED QUOTATIONS ON A COST PLUS-A- FIXED-FEE BASIS FOR SERVICES INVOLVED IN THE DESIGN AND DEVELOPMENT OF WEAPON CONTROL SWITCHBOARD SCHEMATIC WIRING DIAGRAMS. QUOTATIONS FROM FOUR COMPANIES WERE RECEIVED. YOUR PROPOSAL WAS THE SECOND LOWEST RECEIVED, BASED ON AN ESTIMATED COST OF $97,200 PLUS $4,471 FOR A FIXED FEE, OR A TOTAL OF $101,671.

PARAGRAPH 2 OF SUPPLEMENTAL REQUIREMENTS PROVIDED AS FOLLOWS:

"/2) TECHNICAL DISSERTATION. YOU SHALL FURNISH WITH, AND AS A PART OF, YOUR QUOTATION, A TECHNICAL PROPOSAL IN QUADRUPLICATE, CONTAINING THE FOLLOWING:

"/A) DETAILS OF THE MANNER IN WHICH YOU PROPOSE TO PROCEED WITH THE DEVELOPMENT REQUIRED BY THE SPECIFICATIONS.

"/B) STATEMENT OF EXPERIENCE IN THIS OR RELATED FIELDS.

"/C) PERSONNEL AVAILABLE FOR THE PROGRAM.

"YOUR TECHNICAL PROPOSAL WILL BE A PRIMARY FACTOR IN DETERMINING AWARD.'

ALL QUOTATIONS RECEIVED WERE INITIALLY ANALYZED BY COGNIZANT BUREAU OF SHIPS PERSONNEL. ONLY VITRO LABORATORIES WAS CONSIDERED TO BE TECHNICALLY QUALIFIED TO PERFORM THE SERVICES WITHIN THE TIME REQUIRED AND A RECOMMENDATION WAS MADE THAT THE CONTRACT BE AWARDED TO VITRO. IT IS REPORTED THAT THE FOLLOWING ANALYSIS OF VITRO'S QUOTATION WAS MADE:

"A. VITRO LABORATORIES: THIS COMPANY'S PROPOSAL INDICATES A THOROUGH UNDERSTANDING OF THIS PROBLEM. THEY HAVE THE TECHNICAL PERSONNEL AND FACILITIES TO ACCOMPLISH THIS IN TIME CYCLE REQUIRED. THIS COMPANY IS THE MAJOR WEAPON SYSTEMS COORDINATING AGENCY FOR THE BUREAU OF WEAPONS AND IS TECHNICALLY THE SOURCE OF THE MISSILE WEAPON SYSTEMS FUNCTIONAL REQUIREMENTS. THEY HAVE ALSO DEVELOPED THE SWITCHING GUIDANCE DRAWINGS FOR THE POLARIS MISSILE ON SSBN SUBMARINES, ON THE AS31 TO 34, TYPHON MISSILE ON AVM-1. THEY HAVE AN EXCELLENT TECHNICAL COMPLEMENT AND EXPERIENCE TO ACCOMPLISH THIS EFFORT.'

ALSO, IT IS REPORTED THAT THE FOLLOWING TECHNICAL ANALYSIS OF YOUR QUOTATION WAS MADE:

"C. AUDIGER, INC., ELCOM DIVISION: IT APPEARS THAT THERE IS SOME, BUT NOT THOROUGH UNDERSTANDING OF THE BASIC PROBLEM. THE PERSONNEL INDICATED IN THE PROPOSAL WHICH WOULD BE ASSIGNED TO THIS PROJECT DO NOT HAVE A CLOSE ASSOCIATION WITH WEAPON CONTROL SWITCHING PROBLEMS. THE PLAN OF IMPLEMENTATION IS EXTREMELY VAGUE AND GENERAL. FOR THE ABOVE REASONS, IT IS CONSIDERED THAT THIS COMPANY COULD NOT PERFORM IN TIME CYCLE REQUIRED.'

SUBSEQUENT TO THE INITIAL TECHNICAL EVALUATION A CONTRACT AWARD REVIEW PANEL WAS CONVENED AND THIS PANEL CONCLUDED THAT VITRO OFFERED THE HIGHEST COMPETENCE AVAILABLE AND THAT IS PROPOSAL WAS MOST ADVANTAGEOUS TO THE GOVERNMENT.

IT HAS BEEN PROPOSED TO AWARD THE CONTRACT TO VITRO WHICH THE ADMINISTRATIVE OFFICE CONSIDERS WILL BE IN ACCORDANCE WITH PARAGRAPHS 3- 805.1/D) AND 3-805.2 OF THE ARMED SERVICES REGULATION (ASPR), AS FOLLOWS:

"/D) THE PROCEDURES SET FORTH IN (A), (B), AND (C) ABOVE MAY NOT BE APPLICABLE IN APPROPRIATE CASES WHEN PROCURING RESEARCH AND DEVELOPMENT, OR SPECIAL SERVICES (SUCH AS ARCHITECT-ENGINEER SERVICES) OR WHEN COST- REIMBURSEMENT TYPE CONTRACTING IS ANTICIPATED. AWARD OF A CONTRACT MAY BE PROPERLY INFLUENCED BY THE PROPOSAL WHICH PROMISES THE GREATEST VALUE TO THE GOVERNMENT IN TERMS OF POSSIBLE PERFORMANCE, ULTIMATE PRODUCIBILITY, GROWTH POTENTIAL AND OTHER FACTORS RATHER THAN THE PROPOSAL OFFERING THE LOWEST PRICE OF PROBABLE COST AND FIXED FEE.

"3-805.2 COST-REIMBURSEMENT TYPE CONTRACTS. IN SELECTING THE CONTRACTOR FOR A COST-REIMBURSEMENT TYPE CONTRACT, ESTIMATED COSTS OF CONTRACT PERFORMANCE AND PROPOSED FEES SHOULD NOT BE CONSIDERED AS CONTROLLING, SINCE IN THIS TYPE OF CONTRACT ADVANCE ESTIMATES OF COST MAY NOT PROVIDE VALID INDICATORS OF FINAL ACTUAL COSTS. THERE IS NO REQUIREMENT THAT COST -REIMBURSEMENT TYPE CONTRACTS BE AWARDED ON THE BASIS OF EITHER (1) THE LOWEST PROPOSED COST, (2) THE LOWEST PROPOSED FEE, OR (3) THE LOWEST TOTAL ESTIMATED COST PLUS PROPOSED FEE. THE AWARD OF COST-REIMBURSEMENT TYPE CONTRACTS PRIMARILY ON THE BASIS OF ESTIMATED COSTS MAY ENCOURAGE THE SUBMISSION OF UNREALISTICALLY LOW ESTIMATES AND INCREASE THE LIKELIHOOD OF COST THE COST ESTIMATE IS IMPORTANT TO DETERMINE THE PROSPECTIVE CONTRACTOR'S OVERRUNS. THE COST ESTIMATE IS IMPORTANT TO DETERMINE THE PROSPECTIVE CONTRACTOR'S UNDERSTANDING OF THE PROJECT AND ABILITY TO ORGANIZE AND PERFORM THE CONTRACT. THE AGREED FEE MUST BE WITHIN THE LIMITS PRESCRIBED BY LAW AND APPROPRIATE TO THE WORK TO BE PERFORMED (SEE 3-808). BEYOND THIS, HOWEVER, THE PRIMARY CONSIDERATION IN DETERMINING TO WHOM THE AWARD SHALL BE MADE IS: WHICH CONTRACTOR CAN PERFORM THE CONTRACT IN A MANNER MOST ADVANTAGEOUS TO THE GOVERNMENT.'

YOUR PROTEST DOES NOT FURNISH ANY DETAIL AS TO WHY YOU CONSIDER THAT YOU ARE ENTITLED TO AN AWARD. YOU MERELY ALLEGE THAT YOU WERE THE "LOWEST RESPONSIBLE RESPONSIVE BIDDER.' HOWEVER, A LOWER QUOTATION WAS RECEIVED FROM VITRO, BASED ON AN ESTIMATED COST OF $94,485 PLUS $6,400 FOR A FIXED FEE. IN REGARD TO THE CONSIDERATION OF YOUR BID THE ADMINISTRATIVE OFFICE REPORTS THAT THE EVALUATION PROCEDURES SET FORTH IN ASPR 4-205 WERE FOLLOWED.

UNDER THE CIRCUMSTANCES, WE DO NOT FIND THAT THE CONTRACTING AGENCY IS ACTING IMPROPERLY IN ITS PROPOSED SELECTION OF A CONTRACTOR IN THIS NEGOTIATION.