B-157084, FEB. 10, 1966, 45 COMP. GEN. 487

B-157084: Feb 10, 1966

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WHICH CONTEMPLATING THAT NOT ALL TECHNICAL PROPOSALS WILL BE FULLY ACCEPTABLE AS ORIGINALLY SUBMITTED. OR QUANTITY IS A MAJOR DEVIATION REQUIRING BID REJECTION. 1966: REFERENCE IS MADE TO REPORTS DATED OCTOBER 5 AND DECEMBER 20. WHICH IS TO BE IMPROVED OR REPLACED BY THE EQUIPMENT BEING PROCURED UNDER THE IFB. WHICH WAS NOT CHANGED FOR THE SECOND STEP OF THE PROCUREMENT. ARE THAT THE PROPOSAL SHALL BE SUFFICIENTLY DETAILED TO MAKE A THOROUGH EVALUATION OF THE PROPOSED EQUIPMENT AND A SOUND DETERMINATION THAT IT WILL HAVE A REASONABLE LIKELIHOOD OF MEETING THE REQUIREMENTS AND OBJECTIVES OF THE GOVERNMENT AS SET FORTH IN THE SPECIFICATIONS. PARAGRAPH C STATES THAT ACCEPTABILITY OF EACH TECHNICAL PROPOSAL WILL BE BASED ON ITS COMPLIANCE WITH THE REQUIREMENTS OF PARAGRAPHS A AND B AND ON AN ENGINEERING EVALUATION THAT THE PROPOSED EQUIPMENT WILL HAVE A REASONABLE LIKELIHOOD OF MEETING THE REQUIREMENTS AND OBJECTIVES SET FORTH IN THE SPECIFICATIONS.

B-157084, FEB. 10, 1966, 45 COMP. GEN. 487

BIDS - TWO-STEP PROCUREMENT, ETC. - TECHNICAL PROPOSAL DEFICIENCIES - TIME FOR CORRECTION WHERE THE CONTRACTING OFFICER AFTER THE OPENING OF BIDS UNDER THE SECOND STEP OF A PROCUREMENT FOR EQUIPMENT BECOMES AWARE OF A DEFICIENCY IN THE TECHNICAL PROPOSAL OF THE FIRM OFFERING THE LOWEST PRICE, THE INVITATION FOR BIDS HAVING BEEN ISSUED WITHOUT ANY DISCUSSION WITH THE ONLY TWO FIRMS SUBMITTING THE UNPRICED TECHNICAL PROPOSALS SOLICITED, THE ACCEPTANCE AFTER BID PRICE DISCLOSURE, WITH OR WITHOUT PRICE REVISION, OF A SUBSTITUTE ITEM REQUIRING CLARIFICATION AND REVISION IN ORDER TO CONFORM TO SPECIFICATIONS WOULD NOT ONLY AFFORD THE LOW BIDDER AN UNFAIR ADVANTAGE, PREJUDICIAL TO THE OTHER BIDDER, BUT WOULD BE CONTRARY TO THE TWO-STEP PROCUREMENT PROCEDURE PRESCRIBED BY PARAGRAPHS 2-503.1 (D) AND (E) OF THE ARMED SERVICES PROCUREMENT REGULATION, WHICH CONTEMPLATING THAT NOT ALL TECHNICAL PROPOSALS WILL BE FULLY ACCEPTABLE AS ORIGINALLY SUBMITTED, PERMITS THE REVISION OF TECHNICAL PROPOSALS DURING FIRST-STEP NEGOTIATIONS TO MAKE THEM ACCEPTABLE PRIOR TO PROCEEDING WITH SECOND-STEP NEGOTIATIONS, AND THE DEVIATION AFFECTING PRICE, QUALITY, OR QUANTITY IS A MAJOR DEVIATION REQUIRING BID REJECTION.

TO THE SECRETARY OF THE NAVY, FEBRUARY 10, 1966:

REFERENCE IS MADE TO REPORTS DATED OCTOBER 5 AND DECEMBER 20, 1965, FROM THE DIRECTOR OF CONTRACTS, BUREAU OF SHIPS, RELATIVE TO A PROTEST BY LEAR SIEGLER, INCORPORATED, AGAINST CONSIDERATION OF A BID SUBMITTED BY THE MONTEK DIVISION OF MEMCOR, INCORPORATED, FORMERLY MODEL ENGINEERING AND MANUFACTURING CORPORATION (MONTEK-MEMCOR), UNDER INVITATION FOR BIDS (IFB) NO. 600-977-65-S, ISSUED JUNE 7, 1965, BY THE NAVY PURCHASING OFFICE (NPO).

THE IFB REPRESENTS THE SECOND STEP IN A PROCUREMENT OF 43 PACKAGES (FIVE ITEMS TO EACH PACKAGE) OF TECHNICAL EQUIPMENT FOR UPGRADING OF THE AN/URN- 3 AND 3A AND AN/SRN-6 TACTICAL AIR NAVIGATION (TACAN) EQUIPMENT, HEREINAFTER CALLED URN-3 EQUIPMENT, ON NAVY SHIPS. THE URN 3 EQUIPMENT FURNISHES RANGE AND ASIMUTH (DISTANCE AND BEARING) INFORMATION TO AIRCRAFT AND INCORPORATES VARIOUS SPECIAL TEST EQUIPMENT, WHICH IS TO BE IMPROVED OR REPLACED BY THE EQUIPMENT BEING PROCURED UNDER THE IFB.

AS THE FIRST STEP IN THE PROCUREMENT, NPO ISSUED TO ALL SOURCES ON THE APPROPRIATE BIDDERS' LIST A REQUEST LETTER DATED APRIL 2, 1965, SOLICITING UNPRICED TECHNICAL PROPOSALS ON THE EQUIPMENT IN ACCORDANCE WITH EXHIBIT "A," REQUIREMENTS AND CRITERIA OF TECHNICAL PROPOSAL P.R. 627G3-57434 (Q), AND EXHIBIT "B," THE CONTEMPLATED INVITATION FOR BIDS, WHICH WAS NOT CHANGED FOR THE SECOND STEP OF THE PROCUREMENT. THE REQUEST LETTER ADVISED PROSPECTIVE BIDDERS THAT ONLY THOSE FIRMS OFFERING TECHNICALLY ACCEPTABLE PROPOSALS WOULD BE ISSUED IFBS IN THE SECOND STEP. THE PROTEST RELATES TO ONLY ONE OF THE FIVE ITEMS IN THE EQUIPMENT PACKAGE, AN OSCILLOSCOPE DESIGNATED AS ITEM NO. 4 IN THE IFB.

PARAGRAPH A OF EXHIBIT "A" SETS FORTH THE GENERAL REQUIREMENTS FOR THE TECHNICAL PROPOSAL, WHICH, IN ESSENCE, ARE THAT THE PROPOSAL SHALL BE SUFFICIENTLY DETAILED TO MAKE A THOROUGH EVALUATION OF THE PROPOSED EQUIPMENT AND A SOUND DETERMINATION THAT IT WILL HAVE A REASONABLE LIKELIHOOD OF MEETING THE REQUIREMENTS AND OBJECTIVES OF THE GOVERNMENT AS SET FORTH IN THE SPECIFICATIONS. PARAGRAPH B LISTS FIVE MAJOR ELEMENTS FOR INCORPORATION IN THE TECHNICAL PROPOSAL, INCLUDING ENGINEERING APPROACH AND TECHNICAL METHODS PROPOSED TO MEET THE PERFORMANCE REQUIREMENTS AND DESIGN OBJECTIVES OF SPECIFICATION SHIPS T-4792. PARAGRAPH C STATES THAT ACCEPTABILITY OF EACH TECHNICAL PROPOSAL WILL BE BASED ON ITS COMPLIANCE WITH THE REQUIREMENTS OF PARAGRAPHS A AND B AND ON AN ENGINEERING EVALUATION THAT THE PROPOSED EQUIPMENT WILL HAVE A REASONABLE LIKELIHOOD OF MEETING THE REQUIREMENTS AND OBJECTIVES SET FORTH IN THE SPECIFICATIONS.

EXHIBIT "B" INCLUDES THE FOLLOWING PERTINENT STATEMENT ON SCHEDULE PAGE 14:

PRODUCTION EQUIPMENT: ITEMS 1 THRU 5 SHALL BE IN ACCORDANCE WITH BUREAU OF SHIPS CONTRACT SPECIFICATION SHIPS-T-4792 DATED 20 JULY 1964 MODIFIED AS SET FORTH BELOW, AND THE CONTRACTOR'S TECHNICAL PROPOSAL AND ANY AMENDMENTS THERETO SUBMITTED IN RESPONSE TO REQUEST FOR UNPRICED TECHNICAL PROPOSALS P.R. 627G3-57434 (Q) DATED 2 APRIL 1965, PROVIDED THAT IN THE EVENT OF ANY INCONSISTENCY BETWEEN SAID SPECIFICATION AS SO MODIFIED AND SAID PROPOSAL, THE FORMER SHALL GOVERN. * * *

A COPY OF SPECIFICATION SHIPS-T-4792 WAS ENCLOSED WITH THE EXHIBITS.

ON MAY 18, THE CLOSING DATE FOR RECEIPT OF TECHNICAL PROPOSALS, ONLY TWO PROPOSALS, ONE FROM LEAR SIEGLER AND ONE FROM MONTEK-MEMCOR, HAD BEEN RECEIVED. THE NAVY ENGINEERING EVALUATION PANEL FOUND NO MAJOR AREAS OF INADEQUACY IN EITHER PROPOSAL AND THEREFORE RECOMMENDED THAT AN IFB BE ISSUED TO EACH FIRM. ACCORDINGLY, WITHOUT ANY DISCUSSION, WRITTEN OR ORAL, OF THE RESPECTIVE PROPOSALS WITH EITHER FIRM, BOTH PROPOSALS WERE FOUND TO BE ACCEPTABLE AND THE IFB WAS ISSUED TO LEAR SIEGLER AND MONTEK- MEMCOR ON JUNE 7.

ON JUNE 23, BIDS WERE OPENED AS SCHEDULED. MONTEK-MEMCOR'S BID, QUOTING A TOTAL PRICE OF $323,883, WAS LOWER BY $33,970 THAN LEAR SIEGLER'S BID QUOTING A TOTAL PRICE OF $357,803. ON THE SAME DATE, LEAR SIEGLER DISPATCHED TO OUR OFFICE A TELEGRAM PROTESTING AWARD TO ANY OTHER BIDDER AND STATING THAT LEAR SIEGLER WAS THE ONLY BIDDER WHO WAS RESPONSIVE TO THE IFB. IN A SUPPLEMENTARY LETTER OF JUNE 25, LEAR SIEGLER STATED THAT THE OSCILLOSCOPE WHICH MONTEK-MEMCOR PROPOSED TO USE WOULD NOT MEET THE SPECIFICATION REQUIREMENTS IN SEVERAL DESIGNATED AREAS. THE LETTER INCLUDES THE FOLLOWING STATEMENTS:

IT IS OUR UNDERSTANDING THAT MONTEK'S TECHNICAL PROPOSAL, PROPOSED THE USE OF TEKTRONIX INC. OSCILLOSCOPE MODEL 422, MODIFIED. THIS INFORMATION WAS GLEANED FROM DISCUSSIONS WITH TEKTRONIX INC. FROM WHOM LSI REQUESTED A QUOTATION ON THEIR MODEL 422 OSCILLOSCOPE MODIFIED TO MEET THE ABOVE MENTIONED SPECIFICATION REQUIREMENTS. TEKTRONIX ADVISED LSI HOWEVER, THAT ALTHOUGH MONTEK WAS PROPOSING THE USE OF THE MODEL 422 OSCILLOSCOPE MODIFIED, ON THE SAME PROCUREMENT, THAT, IN ACTUALITY, THE MODEL 422 OSCILLOSCOPE COULD NOT BE MODIFIED TO MEET THE MORE STRINGENT REQUIREMENTS OF SPECIFICATION SHIPS-T-4792.

ACCORDINGLY, LEAR SIEGLER CONTENDS THAT MONTEK-MEMCOR'S BID SHOULD BE REJECTED AS NONCONFORMING TO THE SPECIFICATIONS IN STEP ONE OF THE PROCUREMENT.

IN THE LIGHT OF LEAR SIEGLER'S STATEMENTS AND SINCE MONTEK-MEMCOR'S PRICE ON THE OSCILLOSCOPE (UNIT $2,249, TOTAL $96,707), WHICH WAS LOWER BY $58,953 THAN LEAR SIEGLER'S TOTAL PRICE OF $155,660 (UNIT PRICE $3,620) ON THE ITEM, WAS CONSIDERED TO BE TOO LOW FOR AN OSCILLOSCOPE WHICH WOULD MEET THE SPECIFICATIONS EVEN WITH MODIFICATIONS, IT APPEARED THAT THERE MIGHT BE A MISTAKE IN EITHER THE MODEL OR TYPE OF OSCILLOSCOPE MONTEK- MEMCOR PROPOSED TO FURNISH OR IN THE PRICE QUOTED BY MONTEK FOR THE ITEM. ACCORDINGLY, THE BUREAU OF SHIPS, AS AUTHORIZED BY ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2 406.1, ADDRESSED A LETTER TO MONTEK-MEMCOR ON JUNE 29, POINTING OUT THE POSSIBLE MISTAKE AND REQUESTING INFORMATION AS FOLLOWS:

(I) WHAT MODEL OR TYPE TEKTRONIX OSCILLOSCOPE WAS PROPOSED,

(II) WHAT ARE THE MODIFICATIONS TO THIS OSCILLOSCOPE PROPOSED TO BE MADE,

(III) WHO WILL ACCOMPLISH THE MODIFICATIONS, AND

(IV) WHETHER A MISTAKE WAS MADE IN THE PRICE QUOTED FOR ITEM 4, THE OSCILLOSCOPE.

IN THIS CONNECTION, THE BUREAU STATES THAT IN MONTEK-MEMCOR'S 67 PAGE TECHNICAL PROPOSAL, IT HAD IDENTIFIED THE OSCILLOSCOPE AS ITS MM 505 AND HAD DESCRIBED THE ITEM, IN GENERAL, AS "A 15 MC TRANSISTORIZED SPECIAL PURPOSE OSCILLOSCOPE, DESIGNED SPECIFICALLY FOR USE WITH TACAN TRANSPONDER SYSTEMS AND MEETS THE REQUIREMENTS OF SHIPS---4792. * * *" IT IS FURTHER STATED THAT NOWHERE DID MONTEK-MEMCOR'S TECHNICAL PROPOSAL INDICATE THE MODEL OR TYPE NUMBER OF THE OSCILLOSCOPE AS UNMODIFIED, NOR DID IT SET FORTH THE MODIFICATIONS ALREADY MADE OR TO BE MADE.

MONTEK-MEMCOR'S REPLY TO THE BUREAU CONFIRMED ITS TOTAL BID PRICE BUT MADE NO REFERENCE TO ITS UNIT OR TOTAL OSCILLOSCOPE PRICES. THE ITEM, HOWEVER, WAS IDENTIFIED AS THE TEKTRONIX MODEL 422 WITH FIVE SPECIFIED IMPROVEMENTS. IN ADDITION, MONTEK-MEMCOR MADE THE FOLLOWING PERTINENT STATEMENTS:

BASED UPON THE BUREAU'S ACCEPTANCE OF SUBJECT TECHNICAL PROPOSAL WHICH WAS SUBMITTED IN RESPONSE TO THE REFERENCED TWO-STEP PROCUREMENT, WE HAVE DEMONSTRATED THAT WE CAN MEET THE TECHNICAL REQUIREMENTS OF SHIPS-T-4792. THE TEKTRONIX OSCILLOSCOPE THAT MEMCOR/MONTEK PROPOSES TO PROVIDE WILL MEET THE OSCILLOSCOPE ( ( (URN 3 REQUIREMENTS CALLED FOR IN SHIPS-T-4792.

FOLLOWING RECEIPT OF MONTEK-MEMCOR'S REPLY, THE BUREAU MADE A DETAILED ENGINEERING ANALYSIS OF THE TEKTRONIX TYPE 422 OSCILLOSCOPE, WHICH INDICATED THAT TO MEET THE BUREAU'S SPECIFICATION REQUIREMENTS THE NECESSARY MODIFICATIONS WOULD TOTAL TWENTY RATHER THAN ONLY FIVE AS CONTEMPLATED BY MONTEK-MEMCOR; ALSO, SOME OF SUCH MODIFICATIONS, IN THE ENGINEERING AND TECHNICAL JUDGMENT OF THE BUREAU, WOULD BE SO EXTENSIVE AS TO BE INCONSISTENT WITH GOOD ENGINEERING PRACTICE, WOULD BE IMPRACTICABLE, AND WOULD RESULT IN AN OSCILLOSCOPE OF QUESTIONABLE DESIGN FOR ITS INTENDED PURPOSE OF IMPROVING THE EXISTING OSCILLOSCOPE OF THE URN-3. THEREFORE, THE BUREAU CONCLUDED, EVEN ASSUMING THAT MONTEK-MEMCOR PROPOSED TO HAVE ALL TWENTY NECESSARY MODIFICATIONS MADE, ITS PROPOSAL TO SUPPLY A MODIFIED TEKTRONIX TYPE 422 OSCILLOSCOPE IS TECHNICALLY UNACCEPTABLE.

IN A LETTER DATED SEPTEMBER 7 TO THE BUREAU, MONTEK-MEMCOR STATED THAT IT WOULD FURNISH A MODIFIED TEKTRONIX TYPE 647 OSCILLOSCOPE IN LIEU OF THE MODIFIED TYPE 422 ORIGINALLY OFFERED. THE OFFER WAS REPEATED IN A LETTER DATED OCTOBER 22 TO OUR OFFICE, IN WHICH MONTEK MEMCOR REBUTS LEAR SIEGLER'S STATEMENTS CONCERNING THE AREAS IN WHICH A MODIFIED TYPE 422 OSCILLOSCOPE WOULD NOT BE ACCEPTABLE; CONTENDS THAT QUESTIONS CONCERNING COMPLIANCE OF ITS PROPOSAL WITH THE BUREAU'S SPECIFICATION SHOULD HAVE BEEN RAISED PRIOR TO THE ISSUANCE OF THE IFB; AND ASSURES THAT THE TEKTRONIX TYPE 647 OSCILLOSCOPE WILL MEET ALL OF THE REQUIREMENTS OF SPECIFICATION SHIPS-T-4792.

CONCERNING MONTEK-MEMCOR'S TECHNICAL PROPOSAL OFFERING THE TEKTRONIX TYPE 422 OSCILLOSCOPE, THE BUREAU STATES:

* * * WE REGRET THAT CLARIFICATION OF MONTEK'S ORIGINAL TECHNICAL PROPOSAL WAS NOT SOUGHT. IF SUCH INFORMATION HAD BEEN INCLUDED IN MONTEK'S ORIGINAL TECHNICAL PROPOSAL OR BEEN FURNISHED PURSUANT TO ACTION TAKEN BY THE BUREAU TO OBTAIN CLARIFICATION, THE PROPOSAL WOULD HAVE BEEN DETERMINED TO BE TECHNICALLY UNACCEPTABLE, BUT MONTEK WOULD THEN HAVE BEEN AFFORDED AN OPPORTUNITY, AS PART OF THE FIRST STEP, TO REVISE ITS TECHNICAL PROPOSAL TO MAKE IT FULLY, ACCEPTABLE.

THE BUREAU FURTHER STATES THAT THE MID-1966 TEKTRONIX CATALOG LISTS ITS TYPE 422 OSCILLOSCOPE, WITH CERTAIN ACCESSORIES, AT $1,325 AND ITS TYPE 647 OSCILLOSCOPE, LESS PROBES AND ACCESSORIES, AT $2,925. ACCORDINGLY, THE LIST PRICE OF THE TYPE 647 IS MORE THAN TWICE THE LIST PRICE OF TYPE 422 AND IS ALSO SUBSTANTIALLY IN EXCESS OF THE UNIT PRICE OF $2,249 QUOTED IN MONTEK-MEMCOR'S TECHNICAL PROPOSAL AND IN ITS BID FOR A MODIFIED TYPE 422. THEREFORE, IT IS STATED, SHOULD MONTEK MEMCOR FURNISH THE TYPE 647, IT WILL BE FURNISHING A MORE EXPENSIVE ITEM AND, IN EFFECT, WILL BE REDUCING ITS BID PRICE.

REGARDING THE SUITABILITY OF THE TYPE 647 OSCILLOSCOPE, THE BUREAU STATES THAT EVEN WITH NECESSARY ACCESSORIES, WHICH ARE NOT INCLUDED IN THE TEKTRONIX DESIGNATION "TYPE 647," THE ITEM REQUIRES MODIFICATIONS TO MEET ALL THE REQUIREMENTS OF THE GOVERNMENT SPECIFICATION. ACCORDINGLY, BEFORE ANY AWARD COULD BE MADE TO MONTEK-MEMCOR, IT WOULD BE NECESSARY TO CLARIFY THE DETAILS OF ITS SUBSTITUTE OFFER AND TO REVISE THE TECHNICAL PROPOSAL TO MAKE IT ACCEPTABLE. HOWEVER, PENDING OUR DECISION ON THE LEAR SIEGLER PROTEST, THE BUREAU HAS NOT DISCUSSED SUCH MATTERS WITH MONTEK-MEMCOR.

THE PRINCIPLES AND PROCEDURES GOVERNING TWO-STEP ADVERTISED PROCUREMENTS ARE SET FORTH IN SECTION II, PART 5, ASPR. ASPR 2-503.1 (D) AND (E), REVISION 14, DECEMBER 1, 1965, PROVIDE AS FOLLOWS:

(D) TECHNICAL EVALUATION OF THE PROPOSALS SHALL BE BASED UPON THE CRITERIA CONTAINED IN THE REQUEST FOR TECHNICAL PROPOSALS AND SUCH EVALUATION SHALL NOT INCLUDE CONSIDERATION OF CAPACITY OR CREDIT AS DEFINED IN 1-705.4. UPON COMPLETION OF THE TECHNICAL EVALUATION, EACH PROPOSAL SHALL BE CATEGORIZED AS ACCEPTABLE OR UNACCEPTABLE. PROPOSALS SHALL NOT BE CATEGORIZED AS UNACCEPTABLE WHEN A REASONABLE EFFORT ON THE PART OF THE GOVERNMENT TO OBTAIN CLARIFICATION OR ADDITIONAL INFORMATION COULD BRING THE PROPOSALS TO AN ACCEPTABLE STATUS AND THUS INCREASE COMPETITION. THE CONTRACTING OFFICER SHALL ARRANGE FOR ANY NECESSARY DISCUSSIONS WITH SOURCES SUBMITTING TECHNICAL PROPOSALS. WHEN AFTER DISCUSSION, CLARIFICATION, AND SUBMISSION OF NECESSARY DOCUMENTATION FOR INCORPORATION IN THE PROPOSAL, TECHNICAL PROPOSALS ARE DETERMINED TO BE ACCEPTABLE, THEY SHALL BE SO CATEGORIZED. IF, HOWEVER, IT IS DETERMINED AT ANY TIME THAT A TECHNICAL PROPOSAL IS NOT REASONABLY SUSCEPTIBLE TO BEING MADE ACCEPTABLE, IT SHOULD BE CLASSIFIED AS UNACCEPTABLE AND FURTHER DISCUSSION OF IT IS UNNECESSARY.

(E) UPON FINAL DETERMINATION THAT A TECHNICAL PROPOSAL IS UNACCEPTABLE, THE CONTRACTING OFFICER SHALL PROMPTLY NOTIFY THE SOURCE SUBMITTING THE PROPOSAL OF THAT FACT. THE NOTICE SHALL STATE THAT REVISION OF HIS PROPOSAL WILL NOT BE CONSIDERED, AND SHALL INDICATE, IN GENERAL TERMS, THE BASIS FOR THE DETERMINATION FOR EXAMPLE, THAT REJECTION WAS BASED ON FAILURE TO FURNISH SUFFICIENT INFORMATION OR ON AN UNACCEPTABLE ENGINEERING APPROACH.

THE SAME LANGUAGE WAS USED IN ASPR 2-503.1 (C) AND (D), REVISION 8, NOVEMBER 1, 1964, AND REVISION 12, AUGUST 1, 1965.

FROM THE FOREGOING, IT IS APPARENT THAT THE TWO-STEP PROCUREMENT PROCEDURE CONTEMPLATES THAT NOT ALL TECHNICAL PROPOSALS WILL BE FULLY ACCEPTABLE AS ORIGINALLY SUBMITTED, AND, THEREFORE, DURING THE FIST STEP NEGOTIATIONS ARE PERMITTED, WHERE POSSIBLE,FOR THE PURPOSE OF REVISING TECHNICAL PROPOSALS TO MAKE THEM ACCEPTABLE PRIOR TO THE CONDUCT OF THE SECOND STEP OF THE PROCUREMENT. THE BASIC QUESTION FOR OUR DETERMINATION, THEREFORE, IS WHETHER SUCH PROCEDURE MAY BE EMPLOYED WHERE THE CONTRACTING OFFICER FIRST BECOMES AWARE OF A DEFICIENCY IN A TECHNICAL PROPOSAL AFTER THE BIDS HAVE BEEN SUBMITTED AND OPENED UNDER STEP TWO OF THE PROCUREMENT. THE FACTS SET FORTH SHOW THAT MONTEK-MEMCOR'S TECHNICAL PROPOSAL WAS DEFICIENT TO THE EXTENT THAT THE TEKTRONIX TYPE 422OSCILLOSCOPE, EVEN WITH MODIFICATIONS, WOULD NOT MEET THE REQUIREMENTS OF SPECIFICATION SHIPS-T 4792 AS PROVIDED IN THE IFB DESIGNATED AS EXHIBIT "B" IN THE FIRST STEP OF THE PROCUREMENT. SUCH DEFICIENCY COULD, OF COURSE, HAVE BEEN CORRECTED IF IT HAD BEEN NOTED BY EITHER THE BIDDER OR THE CONTRACTING OFFICER PRIOR TO THE OPENING OF BIDS UNDER STEP TWO. FURTHER, IT WOULD APPEAR THAT MONTEK-MEMCOR MAY WELL HAVE BEEN OBLIGATED, UNDER THE ,PRODUCTION EQUIPMENT" PROVISIONS OF EXHIBIT "B" QUOTED ABOVE, TO FURNISH AN OSCILLOSCOPE WHICH DID MEET THE REQUIREMENTS OF SPECIFICATION SHIPS-T-4792 IF THE CONTRACTING OFFICER HAD AWARDED A CONTRACT TO MONTEK-MEMCOR WITHOUT NOTICE OF THE ERROR IN ITS TECHNICAL PROPOSAL. HOWEVER, ONCE THE CONTRACTING OFFICER WAS PLACED ON NOTICE THAT MONTEK-MEMCOR HAD BASED BOTH ITS TECHNICAL PROPOSAL AND ITS BID PRICE UPON THE ERRONEOUS ASSUMPTION THAT THE TEKTRONIX TYPE 422 OSCILLOSCOPE COULD BE MODIFIED TO MEET SPECIFICATION SHIPS-T-4792, IT IS OUR OPINION THAT HE COULD NOT, BY AN AWARD BASED UPON SUCH BID PRICE, OBLIGATE MONTEK-MEMCOR TO FURNISH AN OSCILLOSCOPE WHICH DID MEET THE SPECIFICATION. NASON COAL COMPANY V. UNITED STATES, 64 CT.CL. 533; SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505. WHETHER THE TECHNICAL PROPOSAL MAY NOW BE REVISED AT THE BIDDER'S REQUEST, SO AS TO OBLIGATE MONTEK-MEMCOR TO MEET THE SPECIFICATIONS AT ITS BID PRICE, THEREFORE REQUIRES CONSIDERATION OF WHETHER SUCH REVISION WOULD BE SO MATERIAL AS TO BE PREJUDICIAL TO THE RIGHTS OF THE OTHER BIDDER. IN THIS CONNECTION THE RULE IS WELL SETTLED THAT ANY DEVIATION FROM THE REQUIREMENTS OF THE SPECIFICATIONS WHICH AFFECTS THE PRICE, QUALITY OR QUANTITY OF THE ITEMS BID UPON MUST BE CONSIDERED A MAJOR DEVIATION REQUIRING REJECTION OF THE BID. 30 COMP. GEN. 179; 40 ID. 679. FROM THE COMPARATIVE PRICING DATA OF THE TEKTRONIX TYPES 422 AND 647 OSCILLOSCOPES AS SET OUT ABOVE, WE MUST CONCLUDE THAT MONTEK MEMCOR'S BID PRICE SHOULD CERTAINLY HAVE BEEN HIGHER IF IT HAD BEEN BASED UPON FURNISHING A MODIFIED TYPE 647, AND THAT SUCH INCREASE MAY WELL HAVE BEEN SUFFICIENT SO THAT ITS BID PRICE WOULD NO LONGER HAVE BEEN LOWER THAN THAT SUBMITTED BY LEAR SIEGLER. IT NECESSARILY FOLLOWS THAT TO PERMIT A REVISION OF MONTEK-MEMCOR'S TECHNICAL PROPOSAL, EITHER WITH OR WITHOUT A REVISION IN ITS BID PRICE, AFTER BID PRICES HAVE BEEN DISCLOSED WOULD AFFORD AN UNFAIR COMPETITIVE ADVANTAGE TO MONTEK-MEMCOR AND MUST THEREFORE BE CONSIDERED PREJUDICIAL TO LEAR SIEGLER'S RIGHTS.

IN VIEW OF THE FOREGOING, IT IS OUR OPINION THAT MONTEK-MEMCOR'S BID MUST BE REJECTED AS NONRESPONSIVE TO THE SPECIFICATION REQUIREMENTS, AND THE PROTEST BY LEAR SIEGLER AGAINST AN AWARD BASED UPON SUCH BID IS THEREFORE SUSTAINED.