B-158136, MAR. 28, 1966

B-158136, MAR. 28, 1966

TO THE BENDIX CORPORATION:

REFERENCE IS MADE TO YOUR LETTERS DATED DECEMBER 2, 1965, AND DECEMBER 3, 1965, WHICH PROTESTED AGAINST THE AWARD OF A CONTRACT TO VAP-AIR DIVISION OF VAPOR CORPORATION (VAPOR) BASED ON REQUEST FOR PROPOSALS (RFP) AMC/A/36 -038-66-274/WFN) ISSUED BY THE UNITED STATES ARMY, FRANKFORD ARSENAL, ON SEPTEMBER 17, 1965.

THIS RFP REQUESTED PROPOSALS FOR A TOTAL OF 293 INVERTER UNITS CONSISTING OF IDENTICAL ITEMS 1 AND 2 EXCEPT FOR THE F.O.B. DELIVERY POINTS. ITEM 1 CALLED FOR 256 INVERTERS WITH DELIVERY F.O.B. ORIGIN. ITEM 2 WAS FOR 37 INVERTERS F.O.B. DESTINATION. PROPOSALS WERE TO BE SUBMITTED BY 5 P.M. EDT, OCTOBER 26, 1965, AND IT WAS ANTICIPATED THAT AWARD WOULD BE MADE BY NOVEMBER 30, 1965. ON THE BACK OF THE COVER PAGE OF THE RFP, FORM DD 746, THE PROVISIONS REGARDING LATE PROPOSALS REQUIRED BY SECTION 3-506 OF THE ARMED SERVICES PROCUREMENT REGULATION ARE SET FORTH IN ARTICLE 3. LATE PROPOSALS OR MODIFICATIONS, IT IS STATED, WHICH ARE RECEIVED "AFTER THE CLOSE OF BUSINESS ON THE DATE SET FOR RECEIPT THEREOF * * * WILL NOT BE CONSIDERED UNLESS * * *" (THEREAFTER SEVERAL EXCEPTIONS ARE SET FORTH NONE OF WHICH IS RELEVANT). ARTICLE 7 CONTAINS PROVISIONS RELATING TO THE ACCEPTANCE OF PROPOSALS, INCLUDING STATEMENTS, INTER ALIA, THAT AWARD WILL BE MADE TO THE RESPONSIBLE OFFEROR WHOSE PROPOSAL WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED; THAT PURSUANT TO 10 U.S.C. 2304 (G) THE GOVERNMENT MAY AWARD A CONTRACT BASED ON INITIAL PROPOSALS RECEIVED WITHOUT DISCUSSION; AND THAT INITIAL PROPOSALS SHOULD BE SUBMITTED ON THE MOST FAVORABLE TERMS FROM A PRICE AND TECHNICAL STANDPOINT.

THIS LAST MENTIONED PROVISION OF FORM DD 746 WAS SUBSTANTIALLY REPEATED ON PAGE 2 OF THE RFP WHEREIN IT STATED:

"METHOD OF AWARD: THERE IS A POSSIBILITY THAT AWARD MAY BE MADE WITHOUT DISCUSSION OF PROPOSAL RECEIVED; HENCE, PROPOSALS SHOULD BE SUBMITTED INITIALLY ON THE MOST FAVORABLE TERMS, FROM A PRICE AND TECHNICAL STANDPOINT, WHICH THE OFFEROR CAN SUBMIT TO THE GOVERNMENT.'

IN RESPONSE TO THE RFP FIVE PROPOSALS WERE RECEIVED AS FOLLOWS:

CHART

UNIT PRICES

ITEM 1 ITEM 2

VAP-AIR DIVISION--- VAPOR CORPORATION $ 576 $ 576.75

BENDIX CORPORATION 637.91 637.91

GARRETT MFG. LIMITED 795795

AMERICAN MACHINE AND FOUNDRY CO. 1105 1105

AMERICAN CYSTOSCOPE MAKERS, INC. 1499 1499

PRIOR TO THE DATE OF AWARD AND AT APPROXIMATELY 11 A.M. ON NOVEMBER 23, 1965, A MR. DEADAMO OF YOUR COMPANY IN A TELEPHONE CONVERSATION INFORMED MR. PAVONI, A CONTRACT NEGOTIATOR AT FRANKFORD ARSENAL, THAT AFTER A REVIEW OF THE PRICE YOU HAD SUBMITTED AND BASED ON CERTAIN VALUE ENGINEERING STUDIES CONDUCTED, IT WAS DESIRED TO REVISE YOUR PRICE. THE GOVERNMENT REPRESENTATIVE ADVISED THAT ANY REVISION TO YOUR INITIAL SUBMISSION SHOULD BE SUBMITTED BY TELEGRAM AND THAT UPON RECEIPT THEREOF IMMEDIATE ACTION WOULD BE TAKEN TO EVALUATE ITS ACCEPTABILITY. LATER ON THE SAME DAY A TELEGRAM WAS RECEIVED WHICH REDUCED YOUR UNIT PRICES FOR THE 293 INVERTERS TO $535 EACH NET F.O.B. EATONTOWN, NEW JERSEY (LOCATION OF YOUR CORPORATION).

AFTER THE RECEIPT OF YOUR REVISED PROPOSAL IT WAS DECIDED BY THE CONTRACTING OFFICER THAT IT WAS A LATE MODIFICATION WITHIN THE MEANING OF ASPR 3-506 AND COULD NOT BE ACCEPTED. THIS DECISION WAS BASED ON THE RFP PROVISIONS (QUOTED ABOVE) REQUIRING OFFERORS TO INITIALLY SUBMIT THEIR BEST PRICE AND ADVISING THEM OF THE POSSIBILITY THAT AWARD MIGHT BE MADE ON THE BEST OFFER RECEIVED WITHOUT FURTHER NEGOTIATION, AND THE CONTRACTING OFFICER'S CONCLUSION THAT THE PRICE QUOTED BY THE LOW OFFEROR WAS FAIR AND REASONABLE, PLUS THE URGENCY OF PLACING THE PROCUREMENT. THIS LATTER REASON WAS CONSIDERED BY THE CONTRACTING AGENCY TO BE THE OVERRIDING CONSIDERATION, SINCE ANY DELAY CAUSED BY OPENING NEGOTIATIONS TO ALL OFFERORS WOULD HAVE CREATED A SLIPPAGE IN THE DELIVERY SCHEDULE OF THIS ITEM. FURTHERMORE, AS THE INVERTER WAS A COMPONENT OF THE FIRE CONTROL PROGRAM FOR THE MAIN BATTLE TANK M60A1 THE DELIVERY SCHEDULE FOR THE M60A1 MIGHT ALSO BE DELAYED.

BASED ON THE FOREGOING REASONS THE CONTRACTING OFFICER ON NOVEMBER 23, 1965, INFORMED YOUR COMPANY BY TELEGRAM THAT YOUR REVISED PROPOSAL COULD NOT BE ACCEPTED, AS IT CONSTITUTED A LATE MODIFICATION UNDER THE PROVISIONS OF ASPR 3-506. THE AWARD OF CONTRACT NO. DA 36-038-AMC 3419/W) BASED ON THE RFP WAS THEREUPON MADE TO VAPOR CORPORATION ON NOVEMBER 24, 1965, FOR THE 293 INVERTERS ON THEIR INITIAL PROPOSAL OF $576 PER UNIT FOR ITEM 1 AND $576.75 PER UNIT FOR ITEM 2.

IN YOUR LETTER OF DECEMBER 2, 1965, TO THIS OFFICE YOU REFERRED TO PARAGRAPH 6.3 OF MILITARY SPECIFICATION NO. MIL-I-60166/MU) STATIC INVERTERS, DATED MAY 14, 1964, WHICH READS:

"6.3 QUALIFICATION. WITH RESPECT TO PRODUCTS REQUIRING QUALIFICATION, AWARDS WILL BE MADE ONLY FOR SUCH PRODUCTS AS HAVE, PRIOR TO THE TIME SET FOR OPENING OF BIDS, BEEN TESTED AND APPROVED FOR INCLUSION IN THE APPLICABLE QUALIFIED PRODUCTS LIST WHETHER OR NOT SUCH PRODUCTS HAVE ACTUALLY BEEN SO LISTED BY THAT DATE.'

IN ADDITION, IT IS STATED THAT ON MAY 14, 1965, YOUR PRODUCT WAS OFFICIALLY QUALIFIED IN ACCORDANCE WITH THIS SPECIFICATION.

THE CONTRACTING AGENCY'S REPORT INDICATES THAT THE STATIC INVERTER WAS ONE OF SEVERAL ITEMS ORIGINALLY REQUESTED UNDER RFP AMC/A/36-038 65- 1161/WFN) ISSUED MAY 28, 1965. HOWEVER, AS ONLY YOUR COMPANY WAS A QUALIFIED SOURCE FOR THE INVERTER AND SEVERAL OTHER COMPANIES HAD OFFERED PRODUCTS FOR QUALIFICATION TESTING, IT WAS FELT THAT A LOWER PRICE COULD BE OBTAINED IF THE INVERTER ITEM WAS DELETED FROM THE RFP AND PROCURED SEPARATELY. THESE CIRCUMSTANCES RESULTED IN THE ISSUANCE ON SEPTEMBER 17, 1965, OF THE RFP IN QUESTION, AMC/A/36-038-66 274/WFN), WITH THE ASSUMPTION THAT BY THE TIME OF AWARD OTHER COMPANIES WOULD BE ABLE TO OFFER A QUALIFIED INVERTER PRODUCT.

IT IS TO BE NOTED IN CONNECTION WITH THE REFERENCED QUALIFIED PRODUCTS LIST, THAT ON NOVEMBER 5, 1965, THE AMENDED QPL-60166-2 WAS RELEASED TO COVER THE FOLLOWING QUALIFIED FIRMS FOR THE INVERTER UNIT PART NO. 10516412:

A. THE BENDIX CORPORATION

RED BANK DIVISION

EATONTOWN, NEW JERSEY

B. AMERICAN MACHINE AND FOUNDRY CO.

LELAND AIRBORNE PRODUCTS DIVISION

VANDALIA, OHIO

C. VAP-AIR DIVISION

VAPOR CORPORATION

6420 W. HOWARD STREET

CHICAGO, ILLINOIS

ACCORDINGLY, THERE IS NO QUESTION BUT THAT VAPOR WAS OFFERING A QUALIFIED PRODUCT, AND THE BASIS OF YOUR PROTEST THEREFORE APPEARS TO BE THAT IT WOULD BE IN THE BEST INTEREST OF THE GOVERNMENT TO ACCEPT YOUR REVISED PROPOSAL SUBMITTED BEFORE AWARD, SINCE IT WOULD HAVE SAVED THE GOVERNMENT MORE THAN $12,000.

WITH RESPECT TO THE QUESTION WHETHER OR NOT YOUR REVISED PROPOSAL MAY BE CONSIDERED A LATE MODIFICATION WITHIN THE MEANING OF ASPR 3 506,IT IS OUR BELIEF THAT THE RFP AND ASPR PROVISIONS ARE CONTROLLING ON THIS POINT. PROPOSALS WERE TO BE RECEIVED UNTIL 5 P.M. EDT ON OCTOBER 26, 1965. ANY PROPOSALS RECEIVED THEREAFTER ARE LATE PROPOSALS AND AS SUCH MAY NOT GENERALLY BE CONSIDERED. ASPR 3-506 (G) PROVIDES THAT:

"MODIFICATION OF PROPOSALS (OTHER THAN THE NORMAL REVISIONS OF PROPOSALS BY THE SELECTED OFFERORS DURING THE USUAL CONDUCT OF NEGOTIATIONS WITH SUCH OFFERORS) WHICH ARE RECEIVED IN THE OFFICE DESIGNATED IN THE REQUESTS FOR PROPOSALS AFTER THE TIME SPECIFIED FOR SUBMISSION OF PROPOSALS ARE "LATE MODIFICATIONS.'"

IT IS CLEAR THAT SINCE NO FURTHER NEGOTIATIONS HAD BEEN UNDERTAKEN OR WERE CONTEMPLATED BY THE CONTRACTING OFFICER, AND YOUR COMPANY'S REVISED PROPOSAL WAS COMPLETELY UNSOLICITED, IT WAS PROPERLY CLASSIFIED AS A LATE MODIFICATION.

IN THIS CONNECTION, IT IS NOTED THAT THE BASIC AUTHORITY TO AWARD MILITARY NEGOTIATED PROCUREMENTS WITHOUT WRITTEN OR ORAL DISCUSSIONS AFTER SUBMISSION OF INITIAL PROPOSALS STEMS FROM 10 U.S.C. 2304 (G). THEREIN, IN PERTINENT PART, IT IS PROVIDED THAT:

"* * * WRITTEN OR ORAL DISCUSSIONS NEED NOT BE APPLIED TO PROCUREMENTS * * * WHERE IT CAN BE CLEARLY DEMONSTRATED FROM THE EXISTENCE OF ADEQUATE COMPETITION OR ACCURATE PRIOR COST EXPERIENCE WITH THE PRODUCT, THAT ACCEPTANCE OF AN INITIAL PROPOSAL WITHOUT DISCUSSIONS WOULD RESULT IN FAIR AND REASONABLE PRICES AND WHERE THE REQUEST FOR PROPOSALS NOTIFIES ALL OFFERORS OF THE POSSIBILITY THAT AWARD MAY BE MADE WITHOUT DISCUSSION.'

THE CONTRACTING AGENCY HAS INDICATED THAT THE PROPOSAL RECEIVED FROM VAPOR WAS FAIR AND REASONABLE. IN VIEW OF THIS FACT AND THE NOTIFICATION IN THE RFP THAT AWARD MIGHT BE MADE WITHOUT DISCUSSIONS AFTER INITIAL PROPOSALS WERE SENT IN, IT CANNOT BE CONTENDED THAT UNDER 10 U.S.C. 2304 (G) THE AWARD OF A CONTRACT WITHOUT FURTHER NEGOTIATIONS WAS NOT WITHIN THE AUTHORITY OF THE CONTRACTING OFFICER.

NEVERTHELESS, WHETHER YOUR REVISED PROPOSAL WAS LATE OR NOT, YOU IMPLY IT MAY STILL HAVE BEEN IN THE BEST INTEREST OF THE GOVERNMENT TO HAVE CONSIDERED IT. WHILE SUCH ACTION MIGHT HAVE RESULTED IN A SAVING, IT MUST BE KEPT IN MIND THAT PRICE IS ONLY ONE FACTOR USED IN DETERMINING WHAT IS IN THE BEST INTEREST OF THE GOVERNMENT IN NEGOTIATED PROCUREMENTS. THE CONTRACTING OFFICER HAS INDICATED THAT THE OVERRIDING CONSIDERATION IN DECIDING NOT TO NEGOTIATE AFTER INITIAL PROPOSALS WERE SUBMITTED WAS THE URGENCY OF THE PROCUREMENT. HAD YOUR LATE MODIFICATION BEEN TAKEN INTO CONSIDERATION IN MAKING AN AWARD, THE PROVISIONS OF ASPR 3-805.1 WOULD THEN HAVE REQUIRED THAT ALL OFFERORS BE GIVEN AN EQUITABLE OPPORTUNITY TO SUBMIT REVISED PROPOSALS. THIS, OF COURSE, WOULD HAVE DELAYED AWARD AND DELIVERY OF THE INVERTERS. UNDER THE CIRCUMSTANCES, THE ADMONITION IN THE RFP THAT AWARD MIGHT BE MADE WITHOUT FURTHER NEGOTIATIONS WAS ADEQUATE WARNING TO YOUR COMPANY TO SUBMIT ITS LOWEST PROPOSAL INITIALLY, AND WE ARE UNABLE TO SAY THAT THE ACTION TAKEN BY THE CONTRACTING OFFICER IN REJECTING YOUR REVISED PROPOSAL WAS CONTRARY TO LAW OR REGULATION OR THAT IT WAS NOT IN THE BEST INTEREST OF THE GOVERNMENT.

IT IS UNFORTUNATE THAT THE GOVERNMENT WAS UNABLE TO TAKE ADVANTAGE OF THE VALUE ENGINEERING CHANGES CONDUCTED BY YOUR COMPANY WHICH REDUCED THE UNIT PRICE OF THE INVERTERS. HOWEVER, IN VIEW OF THE DELIVERY REQUIREMENTS PRESENT HERE AND THE SPECIFIC PROVISIONS OF THE RFP THIS WAS NOT POSSIBLE.