B-160620, MAR. 13, 1967

B-160620: Mar 13, 1967

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ESQUIRE: REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 27. YOU ADVISE THAT ELPAC WAS INFORMED BY THE AIR FORCE ON JUNE 20. THAT IT WAS SELECTED "AS A POSSIBLE SOURCE FOR THE PROCUREMENT DESCRIBED IN THIS REQUEST FOR PROPOSAL * * *. ELPAC WAS SPECIFICALLY ADVISED THAT "THIS REQUEST SHOULD NOT BE CONSTRUED TO MEAN THAT ONLY YOUR PROPOSAL IS BEING FAVORABLY CONSIDERED.'. SUCH ADDITIONAL INFORMATION WAS SUBMITTED BY ELPAC ON SEPTEMBER 22. AUDITS AND SURVEYS WERE INITIATED BY THE AIR FORCE TO DETERMINE WHETHER ELPAC POSSESSED THE REQUISITE FACILITIES AND FINANCIAL CAPABILITIES TO PERFORM A RESULTING CONTRACT. YOU ADVISE THAT ELPAC WAS INFORMED AT A MEETING ON OCTOBER 6. THAT ITS PROPOSAL QUALIFIED FOR AWARD AND THAT ITS PRICING WAS SUCH THAT WOULD PERMIT FINAL NEGOTIATIONS FOR A CONTRACT AWARD.

B-160620, MAR. 13, 1967

TO HERBERT BASS, ESQUIRE:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 27, 1966, PROTESTING AGAINST THE EXCLUSION OF YOUR CLIENT, ELPAC, INC., FROM FURTHER PARTICIPATION UNDER DEPARTMENT OF THE AIR FORCE REQUEST FOR PROPOSALS (RFP) NO. 04-605- 66-301-PCM, ISSUED ON JUNE 20, 1966, BY THE HEADQUARTERS, AIR FORCE SATELLITE CONTROL FACILITY, AND AGAINST ANY AWARD WHICH MAY BE MADE NOTWITHSTANDING ELPAC'S NON-PARTICIPATION IN THE NEGOTIATIONS.

YOU ADVISE THAT ELPAC WAS INFORMED BY THE AIR FORCE ON JUNE 20, 1966, THAT IT WAS SELECTED "AS A POSSIBLE SOURCE FOR THE PROCUREMENT DESCRIBED IN THIS REQUEST FOR PROPOSAL * * *," AND THAT IN RESPONSE TO THIS REQUEST ELPAC SUBMITTED A PROPOSAL ON AUGUST 15, 1966. THEREAFTER, ON SEPTEMBER 16, 1966, YOU STATE THAT THE AIR FORCE REQUESTED ELPAC TO SUBMIT ADDITIONAL INFORMATION FOR EXPANSION AND CLARIFICATION OF ITS PROPOSAL. ELPAC WAS SPECIFICALLY ADVISED THAT "THIS REQUEST SHOULD NOT BE CONSTRUED TO MEAN THAT ONLY YOUR PROPOSAL IS BEING FAVORABLY CONSIDERED.' SUCH ADDITIONAL INFORMATION WAS SUBMITTED BY ELPAC ON SEPTEMBER 22, 1966. ADDITIONALLY, AUDITS AND SURVEYS WERE INITIATED BY THE AIR FORCE TO DETERMINE WHETHER ELPAC POSSESSED THE REQUISITE FACILITIES AND FINANCIAL CAPABILITIES TO PERFORM A RESULTING CONTRACT. ALSO, YOU ADVISE THAT ELPAC WAS INFORMED AT A MEETING ON OCTOBER 6, 1966, WITH THE AIR FORCE, THAT ITS PROPOSAL QUALIFIED FOR AWARD AND THAT ITS PRICING WAS SUCH THAT WOULD PERMIT FINAL NEGOTIATIONS FOR A CONTRACT AWARD.

NOTWITHSTANDING ALL THE FOREGOING, NO FURTHER DISCUSSIONS WERE HAD WITH ELPAC. INSTEAD, ON DECEMBER 8, 1966, ELPAC WAS ADVISED BY THE AIR FORCE, PURSUANT TO ASPR 3-508.2, THAT ITS PROPOSAL HAD BEEN ELIMINATED FROM FURTHER COMPETITION BECAUSE OTHER PROPOSALS HAD BEEN FOUND TO BE MORE ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED.

YOU CONTEND THAT THE AIR FORCE IMPROPERLY APPLIED ASPR 3-508.2; THAT THE FAILURE OF THE AIR FORCE TO CONDUCT NEGOTIATIONS WITH ELPAC WAS CONTRARY TO ASPR 3-805.1; AND THAT ALSO THE ELIMINATION OF ELPAC'S PROPOSAL WAS INCONSISTENT WITH ASPR 3-801.1.

UPON REVIEW OF THE FILE MADE AVAILABLE TO US BY THE AIR FORCE, IT APPEARS THAT YOUR ALLEGATIONS ARE TO SOME EXTENT SUPPORTED BY THE RECORD. THAT IS TO SAY, ELPAC HAD A REASONABLE BASIS FOR BELIEVING THAT ITS PROPOSAL AS SUBMITTED AND SUPPLEMENTED WAS ELIGIBLE FOR FURTHER NEGOTIATION DISCUSSION, AND THAT IT HAD REASON TO BELIEVE THAT NEGOTIATIONS WOULD IN FACT BE CONDUCTED WITH IT.

HOWEVER, THE RECORD BEFORE US CONTAINS INFORMATION WHICH NECESSARILY MUST LEAD US TO THE CONCLUSION THAT NO VALID NOR LEGAL BASIS EXISTS FOR QUESTIONING THE ACTION TAKEN WITH REFERENCE TO THE ELPAC PROPOSAL. SINCE THE PROPOSED CONTRACT IS STILL UNDER NEGOTIATIONS, WE MAY NOT DISCUSS HERE ANY PRE-AWARD INFORMATION SUCH AS THE NUMBER AND IDENTITY OF PROPOSERS NOW BEING CONSIDERED, THEIR PROPOSED PRICES, AND THE DETAILS OF PROPOSAL EVALUATION. ASPR 3-507 AND 3-508.

WITHIN THESE LIMITS, YOU MAY BE ADVISED THAT SUBSEQUENT TO THE OCTOBER 6, 1966, MEETING, CERTAIN DEFICIENCIES IN BOTH PROCUREMENT PRACTICES AND POLICIES MAY HAVE BEEN PRESENT WITH REGARD TO THE PROCEEDINGS OF THE THEN DESIGNATED PROPOSAL EVALUATION BOARD. AND IT MAY BE OBSERVED THAT THESE DEFICIENCIES CONTRIBUTED TO THE EVENTUAL REJECTION OF ELPAC'S PROPOSAL. TO CORRECT THE DEFICIENCIES, A NEW PROPOSAL EVALUATION BOARD WAS CONSTITUTED AND, BEFORE CONSIDERING ANY OF THE PROPOSALS, THE NEW BOARD ESTABLISHED EVALUATION CRITERIA CONSISTENT WITH THE GUIDELINES SPECIFIED IN THE RFP. UPON RE EVALUATION OF PROPOSALS UNDER CRITERIA WHICH WERE PROMULGATED IN ACCORD WITH APPLICABLE ASPR, DEPARTMENT OF DEFENSE DIRECTIVES, AND AIR FORCE PROCUREMENT INSTRUCTION, IT WAS CONCLUDED--- AFTER APPLICATION OF THE PRESCRIBED WEIGHTED POINT SYSTEM OF EVALUATION SCORING--- THAT ONLY A FEW FIRMS SUBMITTED TECHNICALLY ACCEPTABLE PROPOSALS WITHIN A REASONABLE PRICE RANGE. ELPAC'S PROPOSAL WAS DETERMINED TO BE UNACCEPTABLE UNDER THE EVALUATION CRITERIA AS DETERMINED BY THE SUCCESSOR BOARD.

IN THE LIGHT OF THE FOREGOING, THE PRE-AWARD NOTICE OF UNACCEPTABLE OFFER COMMUNICATED TO ELPAC ON DECEMBER 8, 1966, WAS IN ACCORDANCE WITH ASPR 3- 508.2 AND WAS REQUIRED UNDER THE CIRCUMSTANCES IN FURTHERANCE OF THE NEGOTIATION PROCESS. ASPR 3-805.1 WHICH RELATES TO THE REQUIREMENT THAT NEGOTIATIONS BE CONDUCTED WITH ALL RESPONSIBLE OFFERORS WHO SUBMIT PROPOSALS WITHIN A COMPETITIVE RANGE, PRICE AND OTHER FACTORS CONSIDERED, IS A RESTATEMENT OF 10 U.S.C. 2304 (G). UNDER THIS STATUTE AND THE REGULATION, THERE IS NO REQUIREMENT THAT NEGOTIATIONS BE CONDUCTED WITH AN INELIGIBLE OFFEROR WHOSE PROPOSAL WAS NOT RESPONSIBLE TO THE GOVERNMENT'S STATED NEEDS. ONCE A PROCUREMENT AGENCY, AS HERE, DETERMINES THAT A PROPOSAL IS TECHNICALLY UNACCEPTABLE, WE GENERALLY DEFER TO THE JUDGMENT THUS EXERCISED SINCE WE DO NOT POSSESS THE TECHNICAL COMPETENCY TO JUDGE OTHERWISE. CONCERNING ASPR 3-801.1, IT SHOULD BE NOTED THAT THIS IS A STATEMENT OF PROCUREMENT POLICY THAT PROCUREMENTS SHOULD BE EFFECTED FROM RESPONSIBLE SOURCES AT FAIR AND REASONABLE PRICES CALCULATED TO RESULT IN THE LOWEST ULTIMATE COST TO THE GOVERNMENT. BUT COST IS NOT THE SOLE CRITERIA IN NEGOTIATED PROCUREMENT; IN PROPER CASES, AS HERE, OTHER FACTORS MAY WELL OVERRIDE THE FACTOR OF PRICE TO CONCLUDE A NEGOTIATION WHICH REPRESENTS OVERALL THE MOST ADVANTAGEOUS CONTRACT TO THE GOVERNMENT.

ACCORDINGLY, AND IN VIEW OF THE ENTIRE RECORD, THE PROTEST MUST BE DENIED.