B-158356, MAR. 31, 1966

B-158356: Mar 31, 1966

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ATTORNEYS AND COUNSELORS: REFERENCE IS MADE TO YOUR TELEGRAM OF JANUARY 17. THE SUBJECT IFB WAS ISSUED AS THE SECOND STEP OF A TWO-STEP FORMALLY ADVERTISED PROCUREMENT UNDER SECTION II. IN THE FIRST STEP OF THE PROCUREMENT 55 PROSPECTIVE BIDDERS WERE INVITED BY LETTER DATED APRIL 30. UNDER THE REQUIREMENTS AND CRITERIA FOR TECHNICAL PROPOSALS PROVISION OF THE SOLICITATION EACH TECHNICAL PROPOSAL WAS REQUIRED TO SET FORTH THE COMPLETE TECHNICAL METHOD AND ENGINEERING APPROACH PROPOSED THEREIN BY THE PROSPECTIVE BIDDER AND TO INCLUDE. EACH BIDDER WAS REQUIRED TO FURNISH UNDER THE FIRST STEP A METHODS AND MANAGEMENT PROPOSAL CLEARLY DEMONSTRATING ITS CAPABILITY TO PERFORM THE CONTEMPLATED WORK.

B-158356, MAR. 31, 1966

TO SELLERS, CONNER AND CUNEO, ATTORNEYS AND COUNSELORS:

REFERENCE IS MADE TO YOUR TELEGRAM OF JANUARY 17, 1966, AND TO YOUR AMPLIFYING LETTER OF JANUARY 28 PROTESTING AS ATTORNEYS FOR BENDIX CORPORATION AGAINST ANY AWARD OF A CONTRACT FOR SONAR SYSTEMS TO EDO CORPORATION UNDER NAVY IFB NO. 600-340-66-S. THE SUBJECT IFB WAS ISSUED AS THE SECOND STEP OF A TWO-STEP FORMALLY ADVERTISED PROCUREMENT UNDER SECTION II, PART 5, ARMED SERVICES PROCUREMENT REGULATION, AND CALLED FOR AN INTRICATE ELECTRONIC COMPONENT (THE SONAR) COMBINED WITH A COMPLEX MECHANICAL COMPONENT (THE HOIST MECHANISM).

IN THE FIRST STEP OF THE PROCUREMENT 55 PROSPECTIVE BIDDERS WERE INVITED BY LETTER DATED APRIL 30, 1965, TO SUBMIT UNPRICED TECHNICAL PROPOSALS FOR EVALUATION INCLUDING ALTERNATE TECHNICAL PROPOSALS FOR THE WHOLE OR ANY ELEMENT OF THE PROPOSED SYSTEM WHICH DESCRIBED A DIFFERENT DESIGN AND TECHNICAL APPROACH. UNDER THE REQUIREMENTS AND CRITERIA FOR TECHNICAL PROPOSALS PROVISION OF THE SOLICITATION EACH TECHNICAL PROPOSAL WAS REQUIRED TO SET FORTH THE COMPLETE TECHNICAL METHOD AND ENGINEERING APPROACH PROPOSED THEREIN BY THE PROSPECTIVE BIDDER AND TO INCLUDE, AMONG OTHER DETAILS,"A WORK BREAKDOWN STRUCTURE AND SUMMARY PERT NETWORK.' ADDITION, EACH BIDDER WAS REQUIRED TO FURNISH UNDER THE FIRST STEP A METHODS AND MANAGEMENT PROPOSAL CLEARLY DEMONSTRATING ITS CAPABILITY TO PERFORM THE CONTEMPLATED WORK. RECOGNIZING THAT THE PROSPECTIVE BIDDERS WERE ELECTRONIC EQUIPMENT MANUFACTURERS WHO MIGHT SUBCONTRACT THE HOIST MECHANISM, THE REQUIREMENTS FOR METHODS AND MANAGEMENT PROPOSAL PROVISION PROVIDED THAT, IN SUCH EVENT, THE HOIST MANUFACTURER SHOULD BE DESIGNATED AND ITS MANAGEMENT CAPABILITY SHOWN. THE SUBMISSION OF ALTERNATE PROPOSALS BASED UPON ARRANGEMENTS WITH DIFFERENT HOIST SUBCONTRACTORS WAS PERMITTED.

SIX COMPANIES SUBMITTED TECHNICAL PROPOSALS AND AFTER THOROUGH EVALUATION THE TECHNICAL PROPOSALS OF EDO CORPORATION, BENDIX CORPORATION AND WESTINGHOUSE COMPANY WERE DEEMED ACCEPTABLE, AND THEIR METHODS AND MANAGEMENT PROPOSALS, COVERING THE NONTECHNICAL ASPECTS INVOLVED IN PROVIDING THE SYSTEMS, WERE DETERMINED TO BE SATISFACTORY. THE PROPOSALS OF EACH OF THE THREE COMPANIES INCLUDED ALTERNATE PROPOSALS ON THE BASIS OF ARRANGEMENTS WITH EITHER MCKIERNAN-TERRY DIVISION OF LITTON INDUSTRIES OR WESTERN GEAR CORPORATION AS THE HOIST GROUP SUBCONTRACTOR.

ON NOVEMBER 22, 1965, THE INVITATION FOR BIDS (STEP 2) WAS ISSUED TO EDO, BENDIX AND WESTINGHOUSE AND SPECIFICALLY PROVIDED ON PAGE 3 OF THE SCHEDULE THAT "AWARD WILL BE MADE ON THE BASIS OF THE LOWEST OVERALL EVALUATED TOTAL CONTRACT COST TO THE GOVERNMENT * * * THE EVALUATION WILL BE BASED UPON CONSIDERATION OF THE FACTORS OF UNIT PRICES AND DISCOUNTS.' THE IFB CONTAINED STANDARD FORM 33-A, BIDDING INSTRUCTIONS, TERMS, AND CONDITIONS, WHICH PROVIDES UNDER PARAGRAPH 2 THAT ANY INFORMATION GIVEN TO A PROSPECTIVE BIDDER WILL BE FURNISHED TO ALL PROSPECTIVE BIDDERS, AS AN AMENDMENT TO THE INVITATION, IF SUCH INFORMATION IS NECESSARY TO BIDDING OR THE LACK OF IT WOULD BE PREJUDICIAL TO UNINFORMED BIDDERS, AND THAT ORAL EXPLANATIONS OR INSTRUCTIONS GIVEN BEFORE AWARD WILL NOT BE BINDING. ON PAGE 2 OF THE SCHEDULE, SECTION 2--- SUPPLIES AND/OR SERVICES AND PRICES, BIDDERS WERE ADVISED:

"* * * ANY BIDDER WHO HAS SUBMITTED ACCEPTABLE ALTERNATE TECHNICAL PROPOSALS IN THE FIRST STEP OF THIS TWO-STEP PROCUREMENT AND/OR SATISFACTORY ALTERNATE METHODS AND MANAGEMENT PROPOSALS MAY SUBMIT A SEPARATE BID COVERING EACH SUCH ACCEPTABLE TECHNICAL PROPOSAL AND SATISFACTORY METHODS AND MANAGEMENT PROPOSAL, PROVIDED, THAT EACH BID SHALL IDENTIFY AND SPECIFY THE TECHNICAL PROPOSAL AND THE METHODS AND MANAGEMENT PROPOSAL TO WHICH IT APPLIES.'

A SIMILAR STATEMENT PERMITTING SEPARATE BIDS ON ALTERNATE PROPOSALS WAS CONTAINED IN THE LETTER OF APRIL 30 SOLICITING THE UNPRICED PROPOSALS.

PROVISION WAS MADE ON PAGE 54 OF THE SCHEDULE, SECTION E--- INSPECTION AND ACCEPTANCE, FOR IDENTIFYING THE MANUFACTURER OF THE ITEMS AND THE PLACE OF INSPECTION, AND ON PAGE 68 THE FOLLOWING INFORMATION WAS SET FORTH UNDER PARAGRAPH (20):

"PERT/TIME MANAGEMENT INFORMATION SYSTEM WILL BE UTILIZED TO MONITOR ANY CONTRACT WHICH MAY RESULT FROM THIS REQUEST FOR PROPOSALS/INVITATION FOR BIDS.

"A PRELIMINARY WORK BREAKDOWN STRUCTURE AND A PRELIMINARY PERT NETWORK IN ACCORDANCE WITH TYPES I AND II RESPECTIVELY OF MILITARY SPECIFICATION MIL- P-23189A (NAVY) SHALL BE SUBMITTED WITH THE PROPOSAL/BID. ITS ADEQUACY AS EVIDENCE OF THE OFFEROR-S/BIDDER'S ABILITY TO MANAGE THE CONTRACT SO AS TO ASSURE ITS PERFORMANCE IN A TIMELY, EFFECTIVE AND ECONOMICAL MANNER WILL BE A PRIMARY CONSIDERATION IN MAKING AWARD.'

DURING DECEMBER 1965, ONE OF THE BIDDERS INQUIRED OF THE DESIGNATED NAVY REPRESENTATIVE AS TO THE PURPOSE TO BE SERVED BY SUBMISSION OF ALTERNATE BIDS INVOLVING SEPARATE SUBCONTRACTORS. SUCH REPRESENTATIVE HAS STATED THAT AFTER CONSULTING WITH HIS SUPERIORS HE TELEPHONED EACH OF THE THREE BIDDERS ON THE SAME DAY AND ADVISED THEM THAT:

"1. ALTERNATE BIDS WOULD HAVE TO SPELL OUT THE TECHNICAL PROPOSALS INVOLVED.

"2. SINCE AWARD WAS TO BE MADE ON THE BASIS OF THE LOWEST PRICE, IN ORDER FOR ALTERNATE BIDS TO BE CONSIDERED FOR AWARD THEY WOULD HAVE TO BE IDENTICAL IN PRICE.

"3. IF THE LOW BIDDERS SUBMITTED IDENTICALLY PRICED ALTERNATE BIDS, EACH OF WHICH SPELLED OUT ACCEPTABLE TECHNICAL PROPOSALS, THE AWARD WOULD BE MADE TO THE LOW BIDDER, WHO WOULD ALSO HAVE THE OPTION TO CHOOSE THE ACCEPTABLE PROPOSAL.'

SUCH ADVICE WAS NOT CONFIRMED IN WRITING INASMUCH AS IT WAS CONSIDERED INHERENT IN THE IFB, AND DID NOT CHANGE THE IFB OR MAKE ANY DEPARTURE THEREFROM.

PRICED BIDS WERE RECEIVED FROM ALL THREE FIRMS AND OPENED ON JANUARY 14, 1966. EDO MADE NO DISTINCTION IN PRICE BETWEEN ITS TWO BIDS BASED ON SEPARATE ARRANGEMENTS WITH EITHER MCKIERNAN-TERRY OR WESTERN GEAR AS ITS HOIST GROUP SUBCONTRACTOR, AND IT STATED IN THE BID TRANSMITTAL LETTER DATED JANUARY 13, 1966, THAT EDO WOULD SELECT THE SUPPORTING SUBCONTRACTOR IN ANY AWARD RESULTING FROM ITS BID. BENDIX OFFERED DIFFERENT PRICES FOR ITS SEPARATE ARRANGEMENTS WITH THE SAME TWO SUBCONTRACTORS FOR THE MECHANICAL PORTION OF THE WORK. WESTINGHOUSE BID ONLY ON AN ARRANGEMENT WITH MCKIERNAN-TERRY. THE SUBJECT BID PRICES WERE ESSENTIALLY AS FOLLOWS:

(MCKIERNAN-TERRY) (WESTERN GEAR)

EDO 22,906,337 22,906,337

BENDIX 25,661,066 28,242,785

WESTINGHOUSE 37,628,548

DUE TO THE REPORTED URGENCY OF THE REQUIREMENT FOR THE EQUIPMENT AND IN VIEW OF AN ADMINISTRATIVE DETERMINATION THAT YOUR PROTEST, AS PRESENTED IN YOUR COMMUNICATIONS OF JANUARY 17 AND 28, HAD NO VALID BASIS IN FACT, AWARD OF THE CONTRACT WAS APPROVED ON FEBRUARY 8 UNDER THE PROVISIONS OF ASPR 2-407.9 (B) (2), AND THE CONTRACT WAS AWARDED TO EDO CORPORATION ON FEBRUARY 10, 1966, ON THE BASIS OF ITS LOW COST TO THE GOVERNMENT, AS PROVIDED IN THE IFB. WE HAVE BEEN INFORMALLY ADVISED THAT UNDER CONTRACT MODIFICATION NO. 1, ALSO OF FEBRUARY 10, EDO ELECTED TO PERFORM IN ACCORDANCE WITH ITS PROPOSAL SHOWING MCKIERNAN-TERRY AS THE HOIST SUBCONTRACTOR.

YOUR PROTEST IS BASED ON THREE PRIMARY CONTENTIONS WHICH ARE SUBSTANTIALLY AS FOLLOWS:

(1) EDO RESERVED THE OPTION TO CHOOSE ITS OWN SUBCONTRACTORS IN SPITE OF THE FACT THAT THE IFB REQUIRED THAT THE NAMING OF ALTERNATE SUBCONTRACTORS BE IN THE FORM OF SEPARATE BIDS THUS RESERVING TO THE GOVERNMENT THE RIGHT TO CHOOSE THE SUBCONTRACTORS. EDO'S RESERVATION OF AN OPTION TO SELECT ITS OWN SUBCONTRACTORS DEPRIVES THE GOVERNMENT OF THIS RIGHT PRESERVED BY THE IFB. TO ALLOW THIS OPTION TO EDO WOULD RESULT IN SERIOUS PREJUDICE TO BENDIX CORPORATION.

(2) THE EDO BID FAILED TO IDENTIFY AND SPECIFY THE TECHNICAL PROPOSALS AND MANAGEMENT METHODS APPLICABLE TO EITHER OF ITS BIDS.

(3) EDO FAILED TO SUPPLY THE REQUIRED WORK STRUCTURES AND PERT SCHEDULES.

IN SUPPORT OF YOUR FIRST CONTENTION YOU STATE THAT BY REQUIRING EACH BID TO "IDENTIFY AND SPECIFY THE TECHNICAL PROPOSAL AND THE METHODS AND MANAGEMENT PROPOSAL TO WHICH IT APPLIES" NAVY RETAINED THE RIGHT TO SELECT THE MOST ADVANTAGEOUS TECHNICAL PROPOSAL, WHICH ACTION IS SAID TO BE IN KEEPING WITH THE NATURE OF THE PROCUREMENT AND WHICH WAS DENIED NAVY UNDER THE EDO BID, WHEREIN THE SELECTION OF THE SUPPORTING CONTRACTOR WAS RESERVED BY THE BIDDER. IN REPORTING ON SUCH CONTENTION (PARTICULAR), NAVY MADE THE FOLLOWING OBSERVATIONS IN ITS LETTER TO THIS OFFICE OF MARCH 3, 1966, A COPY OF WHICH HAS BEEN FURNISHED YOU:

"THE "PARTICULAR" IS FACTUALLY ERRONEOUS, AND THE AMPLIFICATION IN THE LETTER MISUNDERSTANDS BOTH THE NATURE OF THE TWO-STEP PROCUREMENT AND THE INTENTION OF THE GOVERNMENT REGARDING THE SELECTION OF SUBCONTRACTORS IN THIS PROCUREMENT. THE GOVERNMENT DID NOT INTEND AND DID NOT IN FACT RESERVE ANY RIGHT TO CHOOSE SUBCONTRACTORS IN THIS PROCUREMENT. TWO-STEP PROCUREMENT IS A FORMAL ADVERTISED PROCUREMENT PROCEDURE (ASPR SECTION II, PART 5), WITH AWARD BEING MADE UNDER STEP 2 TO THE RESPONSIVE, RESPONSIBLE BIDDER ON THE BASIS OF THE LOWEST PRICE QUOTED IN THE BIDS, IN THE SAME MANNER AS ANY OTHER FORMALLY ADVERTISED PROCUREMENT. FORMAL ADVERTISING WOULD APPEAR TO BE INTRINSICALLY INCOMPATIBLE WITH THE RESERVATION OF A RIGHT IN THE GOVERNMENT "TO CHOOSE THE SUBCONTRACTORS.' CONTRARY TO THE BENDIX ASSERTION (PAGE 5 OF THE LETTER OF JANUARY 28TH), SUCH A RIGHT WOULD NOT HAVE BEEN "IN KEEPING WITH THE NATURE OF THE PROCUREMENT.' UNLIKE NEGOTIATION, UNDER THE TWO-STEP FORMAL ADVERTISING PROCEDURE HERE EMPLOYED, THE GOVERNMENT COULD NOT HAVE ,RETAINED THE RIGHT TO SELECT THE MOST ADVANTAGEOUS TECHNICAL PROPOSAL" AS ALLEGED BY BENDIX ON PAGE 5 OF ITS LETTER. THIS PROCUREMENT PROCESS DOES NOT AT ANY POINT INCLUDE THE TERM OR EMBODY THE CONCEPT OF "MOST ADVANTAGEOUS TECHNICAL PROPOSAL.' UNDER STEP 1 OF THIS PROCUREMENT, TECHNICAL PROPOSALS WERE EVALUATED FOR ACCEPTABILITY AS SPECIFIED ON PAGE 1 OF ENCLOSURE (1). THIS ANALYSIS AND EVALUATION UNDER STEP 1 DISCLOSED DEFICIENCIES IN ALL THE PROPOSALS WHICH MADE THEM UNACCEPTABLE, AND IN ACCORDANCE WITH THE POLICY STATED IN ASPR 2 -503.1 (D), BIDDERS WERE AFFORDED REASONABLE OPPORTUNITY TO UPGRADE THE PROPOSALS TO ACHIEVE THE NECESSARY ACCEPTABILITY. CONSIDERATION OF THE TECHNICAL PROPOSALS WAS COMPLETED UNDER STEP 1 BY THE DETERMINATION OF ACCEPTABILITY OR UNACCEPTABILITY OF THE MODIFIED PROPOSALS. THEREAFTER, THE CONTINUATION OF THE PROCUREMENT PROCESS UNDER STEP 2 INVOLVED ONLY PRICING. THOSE OFFERORS WHOSE TECHNICAL PROPOSALS HAD BEEN DETERMINED UNACCEPTABLE DROPPED OUT OF THE CONTINUING PROCUREMENT PROCESS. THIS HAPPENED TO THREE OF THE ORIGINAL SIX OFFERORS WHO SUBMITTED TECHNICAL PROPOSALS. THE REMAINING THREE OFFERORS WERE INVITED TO SUBMIT BIDS UNDER STEP 2, WITH AWARD TO BE "MADE ON THE BASIS OF THE LOWEST OVERALL EVALUATED TOTAL CONTRACT COST TO THE GOVERNMENT," AS SET OUT ON SCHEDULE PAGE 3 OF THE IFB.

"THE CORRECT NATURE OF TWO-STEP PROCUREMENT IS RECOGNIZED IN THE OPINION OF YOUR OFFICE, B-157454, NOVEMBER 1, 1965, CITED IN THE BENDIX LETTER FOR ANOTHER PURPOSE. THE OPINION STATES:

"UNDER TWO-STEP ADVERTISING PROCEDURES, BIDDERS WHOSE FIRST-STEP TECHNICAL PROPOSALS ARE FINALLY ACCEPTED BY THE GOVERNMENT ARE SOLELY ELIGIBLE TO BID IN COMPLIANCE WITH THEIR OWN TECHNICAL PROPOSALS AND RELATED GOVERNMENT SPECIFICATIONS. IN EFFECT, WHEN A TECHNICAL PROPOSAL IS FINALLY ACCEPTED BY THE GOVERNMENT, THE ONLY ELEMENT OF COMPETITION REMAINING OPEN IS THE SCALED PRICING SOLICITATION. THUS, THE SECOND STEP OF THIS PROCEDURE, AS CONTEMPLATED BY THE ARMED SERVICES PROCUREMENT REGULATION (ASPR 2-501, IS RESTRICTED TO PRICE COMPETITION BETWEEN ELIGIBLE OFFERORS WHO HAVE OBLIGATED THEMSELVES TO PERFORM IN ACCORDANCE WITH THEIR OWN TECHNICAL PROPOSALS AND RELATED GOVERNMENT SPECIFICATIONS.'

WE FEEL THAT THE ABOVE COMMENTS SHOW CLEARLY THAT A RESERVATION BY THE GOVERNMENT OF THE RIGHT TO CHOOSE THE SUBCONTRACTORS WAS NOT CONTEMPLATED BY NAVY IN THIS PROCUREMENT. FURTHER, WE DO NOT CONSIDER THE LANGUAGE QUOTED FROM PAGE 2 OF THE SCHEDULE--- REQUIRING IN THE CASE OF SEPARATE BIDS ON ALTERNATE PROPOSALS THAT EACH BID IDENTIFY THE PROPOSAL CONCERNED- -- AS SPECIFICALLY RESERVING ANY RIGHT OF SELECTION TO THE GOVERNMENT OR NECESSARILY IMPLYING THAT SUCH IS THE INTENT.

CONCERNING YOUR SECOND CONTENTION, WE NOTE THAT IN EDO'S BID TRANSMITTAL LETTER OF JANUARY 13, WHICH CONSTITUTES A PART OF THE BIDDING DOCUMENTS, ITS BIDS AND PROPOSALS WERE IDENTIFIED AS FOLLOWS:

"1. IN RESPONSE TO REFERENCE (A) AS MODIFIED BY REFERENCES (B) THROUGH (F), EDO CORPORATION SUBMITS, HEREWITH, OUR COMPLETELY CONFORMING QUOTATION UNDER ENCLOSURE (A) AND A COMPLETELY CONFORMING ALTERNATE QUOTATION UNDER ENCLOSURE (B). ENCLOSURES (C) THROUGH (I) ARE SUBMITTED, HEREWITH, IN SUPPORT OF THIS CONTRACTOR'S QUOTATIONS. APPROPRIATE ENCLOSURES HAVE BEEN PROPERLY EXECUTED. * * * * * * *

"4. ENCLOSURE (C) IDENTIFIES THE SUBCONTRACTOR TEAMS FOR EDO'S PRIME BID, ENCLOSURE (A) AND ALTERNATE BID, ENCLOSURE (B). BECAUSE OF INADEQUATE SPACE IN THE BID PAPERS, ENCLOSURE (C) ALSO PROVIDES APPROPRIATE NAMES AND ADDRESSES INDICATING APPROPRIATE PLANS OF ACCEPTANCE AND DELIVERY BY ITEM OF EQUIPMENT AS REQUESTED IN SECTION "E" , PAGE 54 OF THE SCHEDULE.

"5. ENCLOSURE (D) IS A LIST OF PRESCRIBED ACCEPTABLE TECHNICAL AND MANAGEMENT PROPOSALS, OF EDO CORPORATION AND PROPOSED SUBCONTRACTS AS APPROVED BY THE BUREAU OF SHIPS. THIS LIST IS APPLICABLE TO THIS CONTRACTOR'S PRIME BID AND ALTERNATE BID AS APPROPRIATE.

"6. AS NOTED HEREIN, ENCLOSURE (A) IS THIS CONTRACTOR'S PRIME BID WHILE ENCLOSURE (B) IS THIS CONTRACTOR'S ALTERNATE BID. ENCLOSURE (A) PROVIDES THE SELECTION OF MCKIERNAN-TERRY DIVISION OF LITTON INDUSTRIES AS THE HOIST GROUP SUBCONTRACTOR WITH APPROPRIATE SHIPPING POINTS WHILE ENCLOSURE (B) PROVIDES THE SELECTION OF WESTERN GEAR CORPORATION AS THE SUPPORTING HOIST GROUP SUBCONTRACTOR WITH APPROPRIATE SHIPPING POINTS. PRICES FOR THIS CONTRACTOR'S PRICE BID, ENCLOSURE (A) AND ALTERNATE BID, ENCLOSURE (B), ARE IDENTICAL. CONSISTENT WITH CONCLUSION REACHED IN DISCUSSIONS WITH THE CONTRACTING OFFICER UNDER THIS IFB, THE FINAL DECISION WITH RESPECT TO SELECTION OF SUPPORTING SUBCONTRACTOR WILL REST WITH THE EDO CORPORATION IN ANY AWARD RESULTING HERE FROM.' SUCH INFORMATION LEAVES NO SERIOUS QUESTION AS TO THE IDENTITY OF EITHER THE TECHNICAL OR MANAGEMENT PROPOSALS OR THE RELATED SUBCONTRACTORS APPLICABLE TO EACH OF EDO'S SEPARATE BIDS. IT SHOULD ALSO BE NOTED IN CONNECTION WITH YOUR ADDITIONAL CONTENTION--- THAT EDO'S BIDS DID NOT COMPLY WITH THE REQUIREMENT OF SECTION E, PAGE 54 OF THE SCHEDULE, FOR IDENTIFYING THE MANUFACTURER OF ITEMS AND PLACE OF INSPECTION--- THAT SUCH INFORMATION WAS FURNISHED AS ENCLOSURE (C) OF THE LETTER AS MENTIONED IN PARAGRAPH 4 THEREOF.

UPON RECEIPT OF THE AWARD EDO WAS OBLIGATED TO PERFORM IN ACCORDANCE WITH ONE OF ITS TWO PREVIOUSLY APPROVED TECHNICAL PROPOSALS USING EITHER MCKIERNAN-TERRY OR WESTERN GEAR AS THE HOIST GROUP SUBCONTRACTOR, AND SINCE BOTH OF SUCH PROPOSALS HAD BEEN APPROVED AS ACCEPTABLE IT WAS NOT MATERIAL TO THE NAVY, AS INDICATED IN ITS REPORT, WHICH PROPOSAL EDO SELECTED FOR PERFORMANCE. ALTHOUGH YOU STATE THAT EDO WAS ALLOWED AN OPTION NOT PERMITTED OTHER BIDDERS TO THEIR COMPETITIVE DISADVANTAGE, WE FIND NOTHING IN THE LANGUAGE OF THE INVITATION WHICH PROHIBITS ANY BIDDER FROM QUOTING THE SAME PRICE FOR EITHER OF ITS APPROVED ALTERNATE PROPOSALS OR EXPRESSLY DENIES SUCH A LOW BIDDER THE OPPORTUNITY TO SELECT THE PROPOSAL TO BE FULFILLED. WE FIND IT PARTICULARLY SIGNIFICANT THAT NAVY ORALLY ADVISED EACH PROSPECTIVE BIDDER IN THAT SPECIFIC RESPECT, AS SET OUT ABOVE. ALTHOUGH AMPLE TIME WAS AVAILABLE NO OBJECTION OR QUESTION IN CONNECTION THEREWITH, OR REQUEST THAT THE STATEMENTS BE REDUCED TO WRITING, WAS PRESENTED BY ANY OF THE BIDDERS PRIOR TO BID OPENING, NOR IS THERE A SHOWING THAT BENDIX WAS MISLED IN ANY WAY BY SUCH STATEMENTS IN THE PREPARATION OF ITS BIDS.

IN VIEW OF THE FOREGOING, WE CANNOT CONCLUDE THAT THE BIDDERS WERE NOT AFFORDED AN EQUAL OPPORTUNITY TO COMPETE ON THE SAME BASIS. SEE 45 COMP. GEN. - , B-158132, JANUARY 12, 1966, WHEREIN WE STATED:

"THE FINAL QUESTION TO BE DECIDED CONCERNS THE BIDS OF BRAY OIL COMPANY AND PENNSYLVANIA REFINING COMPANY WHICH OFFERED EITHER OF TWO QUALIFIED PRODUCTS AT THEIR OPTION FOR A PARTICULAR ITEM. AMERICAN OIL AND SUPPLY COMPANY URGES THAT ONLY ONE QUALIFIED PRODUCT CAN BE SPECIFIED OTHERWISE THE BIDDER IS GIVEN AN UNFAIR COMPETITIVE ADVANTAGE. IN THIS CONNECTION, IT IS STATED THAT WHERE FOR A PARTICULAR ITEM A BIDDER HAS TWO QUALIFIED PRODUCTS AND TWO COMPETING RAW MATERIAL SUPPLIERS, THE BIDDER COULD, IF LOW, REOPEN NEGOTIATIONS WITH THE COMPETING RAW MATERIAL SUPPLIERS AND REALIZE GREATER PROFITS. PARAGRAPH 23 PROVIDES THAT AWARDS FOR ANY ITEMS WHICH ARE REQUIRED TO BE QUALIFIED PRODUCTS WILL BE MADE ONLY FOR ITEMS WHICH HAVE BEEN TESTED AND HAVE QUALIFIED FOR INCLUSION IN THE APPLICABLE QUALIFIED PRODUCTS LIST BEFORE THE TIME SET FOR OPENING OF THE BIDS. WHERE A BIDDER HAS TWO QUALIFIED PRODUCTS OF HIS OWN MANUFACTURE FOR A PARTICULAR ITEM REQUIRING A QUALIFIED PRODUCT OBVIOUSLY HE COULD OFFER EITHER OF HIS QUALIFIED PRODUCTS. IT WOULD BE INCONSISTENT TO HOLD THAT A BIDDER COULD OFFER EITHER OF TWO PRODUCTS BUT COULD NOT OFFER EITHER OR BOTH AT HIS OPTION, UNLESS SPECIFICALLY PROHIBITED AND WE DO NOT BELIEVE THAT THE CLAUSE CONTAINS ANY SUCH PROHIBITION. THE FACT THAT A BIDDER BY HAVING TWO QUALIFIED PRODUCTS MAY HAVE A COMPETITIVE ADVANTAGE OVER BIDDERS ONLY HAVING ONE IS OF NO CONCERN TO THE GOVERNMENT. SEE 40 COMP. GEN. 688.'

REGARDING YOUR CONTENTION THAT EDO FAILED TO SUPPLY THE WORK STRUCTURES AND PERT SCHEDULES WITH ITS BID AS REQUIRED BY PARAGRAPH 20, PAGE 68 OF THE SCHEDULE, AND WAS NOT COMMITTED IN SUCH RESPECT, WE FEEL THAT AN ADEQUATE RESPONSE TO SUCH CONTENTION IS CONTAINED IN NAVY'S REPORT AS FOLLOWS:

"IN THIS PROCUREMENT, ALL THREE COMPANIES, EDO, BENDIX AND WESTINGHOUSE, SUBMITTED THE REQUIRED WORK BREAKDOWN STRUCTURE AND SUMMARY PERT NETWORK INFORMATION WITH THE PROPOSALS IN STEP 1. SUCH A SUBMISSION WAS A SPECIFIC REQUIREMENT OF EXHIBIT A OF ENCLOSURE (1) HERETO, THE "REQUIREMENTS AND CRITERIA FOR TECHNICAL PROPOSALS.' FURTHER, SUPPLEMENTARY DETAILED INFORMATION IN THIS AREA OF CONCERN, SUCH AS PERT/TIME INFORMATION, WAS REQUIRED OF AND WAS FURNISHED BY ALL OFFERORS UNDER EXHIBIT B OF ENCLOSURE (1), THE "REQUIREMENTS FOR METHODS AND MANAGEMENT PROPOSAL.' THESE SUBMISSIONS WERE CONSIDERED BY THE CONTRACTING OFFICER TO SATISFY ALL THE PURPOSES OF THE IFB. FURTHER, SINCE PERFORMANCE UNDER THE CONTRACT MUST BE IN ACCORDANCE WITH THE APPROVED PROPOSALS, AND THE PERT INFORMATION IS PART OF SUCH APPROVED PROPOSALS, EDO IS CONTRACTUALLY COMMITTED TO COMPLY THEREWITH.'

ACCORDINGLY, WHILE WE HAVE CONSIDERABLE DOUBT REGARDING THE DESIRABILITY OF IFBS WHICH PERMIT BIDDERS TO SUBMIT IDENTICAL BID PRICES ON ACCEPTABLE ALTERNATE PROPOSALS, WE DO NOT BELIEVE THAT EDO'S BID IN THE INSTANT CASE WAS NONRESPONSIVE IN ANY MATERIAL WAY TO THE REQUIREMENTS OF THE INVITATION, OR THAT BENDIX WAS PREJUDICED IN THIS PROCUREMENT AND DENIED EQUAL OPPORTUNITY TO COMPETE ON A COMMON BASIS SO AS TO REQUIRE OR JUSTIFY OUR OBJECTION TO THE AWARD. YOUR PROTEST IS THEREFORE DENIED.