B-160675, MAR. 10, 1967

B-160675: Mar 10, 1967

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TO BARRETT ELECTRONICS CORPORATION: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM AND LETTER DATED JANUARY 13 AND 18. YOU CONTEND THAT COMPETITIVE AUCTION TECHNIQUES WERE USED CONTRARY TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 3-805.1 (B). THE MIPR WAS TRANSMITTED TO THE DEFENSE GENERAL SUPPLY CENTER. WAS ISSUED ON MAY 11. PROPOSALS WERE RECEIVED FROM YOUR FIRM. WAS FAVORABLE. IT WAS NOTED IN REVIEWING YOUR PROPOSAL THAT YOU HAD TAKEN CERTAIN EXCEPTIONS TO THE TRACTOR SPECIFICATIONS ON THE REVERSE OF AMENDMENT NO. 3 TO THE RFP. THE EXCEPTIONS PERTAINED TO PARAGRAPH 3.3.3 REQUIRING THE TRACTOR TO HAVE AN ADJUSTABLE SEAT. PARAGRAPH 3.6.3 SPECIFYING THAT THE TRACTOR WITH FIVE 36 INCH BY 48 INCH TRAILERS WILL OPERATE IN A 10-FOOT INTERSECTING AISLE AT AN ENTERING SPEED OF 2.8 M.P.H.

B-160675, MAR. 10, 1967

TO BARRETT ELECTRONICS CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM AND LETTER DATED JANUARY 13 AND 18, 1967, RESPECTIVELY, REQUESTING THAT A CONTRACT AWARDED TO CONTROL ENGINEERING DIVISION OF JERVIS B. WEBB COMPANY UNDER REQUEST FOR PROPOSALS (RFP) NO. DSA-400-66-R-5537 DATED MAY 11, 1966, BE SET ASIDE AND THAT AN AWARD BE MADE TO BARRETT ELECTRONICS CORPORATION.

YOU CONTEND THAT COMPETITIVE AUCTION TECHNIQUES WERE USED CONTRARY TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 3-805.1 (B), AND ALSO YOU QUESTION THE PROPRIETY OF THE CONTRACTING OFFICER'S ACTIONS IN THIS PROCUREMENT.

THE BACKGROUND OF THIS PROCUREMENT SHOWS THAT THE DEPARTMENT OF THE NAVY, BUREAU OF SUPPLIES AND ACCOUNTS, ISSUED A MILITARY INTERDEPARTMENTAL PURCHASE REQUEST, MIPR 00023-6-006140, FOR THE INSTALLATION, NOT LATER THAN NOVEMBER 30, 1966, AT THE NAVAL SUPPLY DEPOT, PHILADELPHIA, PENNSYLVANIA, OF A MATERIALS HANDLING SYSTEM COMPLETE WITH MANUALS AND THREE ELECTRIC TRACTORS. THE MIPR WAS TRANSMITTED TO THE DEFENSE GENERAL SUPPLY CENTER, RICHMOND, VIRGINIA, WHERE, IN VIEW OF PUBLIC EXIGENCY, THE CONTRACTING OFFICER MADE A DETERMINATION TO NEGOTIATE THE PROCUREMENT UNDER THE PUBLIC EXIGENCY NEGOTIATION EXCEPTION OF 10 U.S.C. 2304 (A) (2) AND ASPR 3-202.2 (VI).

THEREAFTER, REQUEST FOR PROPOSALS DSA-400-66-R-5539 (SUBSEQUENTLY RENUMBERED -5537), COVERING THE MIPR REQUIREMENTS (GUIDED TRACTOR SYSTEM), WAS ISSUED ON MAY 11, 1966, WITH A SCHEDULED CLOSING DATE OF MAY 26, 1966. SUBSEQUENT AMENDMENTS CHANGED THE CLOSING DATE TO AUGUST 1, 1966. PROPOSALS WERE RECEIVED FROM YOUR FIRM, BARRETT ELECTRONICS, IN THE AMOUNT OF $115,779 AND FROM CONTROL ENGINEERING DIVISION OF JERVIS B. WEBB COMPANY (CONTROL), IN THE AMOUNT OF $137,898. A PREAWARD SURVEY CONDUCTED AT YOUR FACILITIES, AS THE APPARENT LOW OFFEROR, WAS FAVORABLE; HOWEVER, IT WAS NOTED IN REVIEWING YOUR PROPOSAL THAT YOU HAD TAKEN CERTAIN EXCEPTIONS TO THE TRACTOR SPECIFICATIONS ON THE REVERSE OF AMENDMENT NO. 3 TO THE RFP. THE EXCEPTIONS PERTAINED TO PARAGRAPH 3.3.3 REQUIRING THE TRACTOR TO HAVE AN ADJUSTABLE SEAT; PARAGRAPH 3.6.3 SPECIFYING THAT THE TRACTOR WITH FIVE 36 INCH BY 48 INCH TRAILERS WILL OPERATE IN A 10-FOOT INTERSECTING AISLE AT AN ENTERING SPEED OF 2.8 M.P.H.; AND PARAGRAPH 3.6.4 REQUIRING THAT THE TRACTOR HAVE AN ULTIMATE DRAWBAR PULL OF NOT LESS THAN 2,000 POUNDS. THE EXCEPTIONS WERE DISCUSSED TELEPHONICALLY WITH THE USING ACTIVITY, NAVAL SUPPLY SYSTEMS COMMAND, WHICH ADVISED THAT THE EXCEPTIONS WOULD NOT RESULT IN AN ACCEPTABLE TRACTOR. BY TELEGRAM OF OCTOBER 31, 1966, YOU DELETED THE EXCEPTION TO PARAGRAPH 3.6.4, ULTIMATE DRAWBAR PULL, STATING THAT A STRONGER TRACTOR WOULD BE USED MAKING THE 2,000-POUND PULL ACCEPTABLE, AND YOU ALSO EXTENDED THE ACCEPTANCE TIME BY 15 DAYS. WITH THIS DELETION THE PROPOSAL WAS ACCEPTABLE.

BY LETTER DATED SEPTEMBER 20, 1966, CONTROL EXTENDED THE ACCEPTANCE TIME OF ITS PROPOSAL BY AN ADDITIONAL 30 DAYS. IN AN UNSOLICITED TWX DATED OCTOBER 27, 1966, CONTROL REDUCED ITS PRICE BY $20,325 FROM $137,898 TO $117,573; AND BY A SECOND UNSOLICITED TWX OF NOVEMBER 1, 1966, IT FURTHER REDUCED ITS PRICE TO $112,875, AND EXTENDED THE ACCEPTANCE TIME OF ITS OFFER TO NOVEMBER 11, 1966. AT THIS STAGE, THE CONTRACTING OFFICER DETERMINED TO CONDUCT A SECOND ROUND OF NEGOTIATIONS BY ESTABLISHING A NEW CLOSING DATE FOR THE SUBMISSION OF ANY REVISIONS TO PROPOSALS. BOTH YOUR FIRM AND CONTROL WERE ADVISED ON NOVEMBER 3, 1966, THAT A FINAL ROUND OF NEGOTIATIONS WAS BEING CONDUCTED AND THAT ANY REVISIONS TO PROPOSALS MUST BE SUBMITTED BY NOON OF NOVEMBER 7, 1966. IT IS REPORTED THAT MR. CHARLES JACKSON OF YOUR FIRM TELEPHONED THE CONTRACTING OFFICER TO OBJECT TO THIS PROCEDURE AND IT WAS EXPLAINED TO MR. JACKSON THAT THE CONDUCTING OF FURTHER ROUNDS OF NEGOTIATIONS WAS IN ACCORDANCE WITH ASPR 3-805.1 (B) AND WITHIN THE DISCRETION OF THE CONTRACTING OFFICER IF HE CONSIDERED SUCH ACTION TO BE IN THE BEST INTERESTS OF THE GOVERNMENT.

THEREAFTER, CONTROL CONFIRMED ITS OFFER OF $112,875 BY LETTER OF NOVEMBER 4, 1966, WHILE YOUR FIRM DID NOT REVISE ITS PROPOSAL IN ANY MANNER. AFTER VERIFICATION OF THE NAVY'S CRITICAL NEED OF THIS PROCUREMENT, AWARD WAS MADE TO CONTROL ON NOVEMBER 10, 1966.

IN YOUR LETTER OF JANUARY 18, 1967, YOU CONTEND THAT IN ACCORDANCE WITH ASPR 3-509, THE CONTRACTING OFFICER SHOULD HAVE REQUESTED THE VIEWS OF THE COMPTROLLER GENERAL BEFORE MAKING THE AWARD, AND THAT HE SHOULD HAVE NOTIFIED THE PROTESTER OF THE FINAL DECISION ON THE WRITTEN PROTEST. THIS RESPECT THE PROCURING AGENCY REPORTS THAT:

"BARRETT ELECTRONICS WAS NOTIFIED OF THE SUCCESSFUL OFFEROR AND OF THE PRICE AT WHICH THE AWARD WAS MADE BY LETTER DATED 8 DECEMBER 1966 * * *. WHILE SENATOR DIRKSEN HAD DIRECTED A LETTER TO THE OFFICE OF LEGISLATIVE LIAISON, DEPARTMENT OF DEFENSE, ON 4 NOVEMBER 1966, IN WHICH WAS SET FORTH THE CONTENTS OF A TELEGRAM RECEIVED FROM BARRETT, THIS CENTER WAS UNAWARE OF THIS LETTER UNTIL AFTER THE AWARD WAS EFFECTED * * *.'

CONSEQUENTLY, THE CONTRACTING OFFICER DID NOT TREAT THE MATTER AS A PROTEST BEFORE AWARD. AS YOU KNOW, YOUR PROTEST TO OUR OFFICE WAS MADE BY YOUR TELEGRAM AND LETTER OF JANUARY 13 AND 18, 1967, RESPECTIVELY. IN ANY EVENT, ASPR 3-509 DOES NOT, AS INDICATED IN YOUR LETTER, FLATLY REQUIRE THE MILITARY DEPARTMENTS TO OBTAIN THE VIEWS OF THE COMPTROLLER GENERAL IN PROTEST CASES BEFORE AWARD IS MADE. UNDER ASPR 2-407.9 (B) (2), WHICH IS APPLICABLE TO PROTESTS AGAINST AWARDS OF NEGOTIATED PROCUREMENTS, THAT REFERRAL PROCEDURE IS REQUIRED IN CASE OF PROTESTS BEFORE AWARD ,WHENEVER SUCH ACTION IS CONSIDERED TO BE DESIRABLE.' THE SAME SUBSECTION PROVIDES FURTHER THAT:

"* * * WHILE AWARD NEED NOT BE WITHHELD PENDING FINAL DISPOSITION BY THE COMPTROLLER GENERAL OF A PROTEST, A NOTICE OF INTENT TO MAKE AWARD IN SUCH CIRCUMSTANCES SHALL BE FURNISHED THE COMPTROLLER GENERAL, AND FORMAL OR INFORMAL ADVICE SHOULD BE OBTAINED CONCERNING THE CURRENT STATUS OF THE CASE PRIOR TO MAKING THE AWARD.'

WE CANNOT QUESTION THE AWARD ON THE BASIS THAT OUR OFFICE SHOULD HAVE CONSIDERED THE PROTEST PRIOR TO THE AWARD OR THAT AWARD SHOULD HAVE BEEN HELD IN ABEYANCE PENDING FURTHER CONSIDERATION.

AS TO YOUR CONTENTION THAT THE EXCEPTIONS ON THE REVERSE SIDE OF AMENDMENT NO. 3 SHOULD HAVE BEEN DISREGARDED, THE EXCEPTIONS WERE SUBMITTED TO THE USING ACTIVITY AND DETERMINED TO BE UNACCEPTABLE AND THEREFORE COULD NOT HAVE BEEN PROPERLY DISREGARDED BY THE CONTRACTING OFFICER. THE CASE CITED BY YOU, B-139096, JUNE 12, 1959, 38 COMP. GEN. 830, INVOLVED A FORMALLY ADVERTISED PROCUREMENT WHEREIN THE LOW BID WAS REJECTED AS NONRESPONSIVE BECAUSE OF AN EXCEPTION TO THE SIZE OF THE CONTAINERS DESIRED. UPON REVIEW, IT WAS DETERMINED THAT THE EXCEPTION WAS MORE COSTLY AND PROBABLY MORE DESIRABLE AND THAT THE EXCEPTION SHOULD HAVE BEEN WAIVED AS A MINOR INFORMALITY. THIS DECISION IS NOT APPLICABLE HERE INASMUCH AS THE USING ACTIVITY, THE DEPARTMENT OF THE NAVY, DETERMINED THAT YOUR EXCEPTION TO THE DRAWBAR PULL OF THE TRACTOR DID NOT RESULT IN AN ACCEPTABLE SYSTEM. IN ANY EVENT, IT IS REPORTED THAT YOUR TELEGRAM OF OCTOBER 31, 1966, DELETING YOUR EXCEPTION AS TO ULTIMATE DRAWBAR PULL, RENDERED YOUR PROPOSAL TECHNICALLY ACCEPTABLE.

WITH RESPECT TO YOUR CONTENTION THAT COMPETITIVE AUCTION TECHNIQUES WERE USED BY THE PROCURING AGENCY CONTRARY TO ASPR 3-805.1 (B), IT MAY BE POINTED OUT THAT WHERE THE GOVERNMENT BUYS BY NEGOTIATION THE RIGID AND FORMAL REQUIREMENTS APPLICABLE TO PROCUREMENT BY ADVERTISING NEED NOT BE OBSERVED. ALTHOUGH AN AWARD MAY BE MADE AS A RESULT OF COMPETITIVE NEGOTIATION WITHOUT BARGAINING BY INITIALLY ACCEPTING THE MOST FAVORABLE OFFER RECEIVED IF THE CONTRACTING OFFICER REGARDS IT TO BE FAIRLY AND REASONABLY PRICED, THE CONTRACTING OFFICER MAY ALSO NEGOTIATE A CONTRACT WITH THAT SUPPLIER WHOSE OFFER IS MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. IT IS FOR THIS REASON THAT OFFERORS MAY BE ALLOWED TO MAKE REVISIONS TO THEIR QUOTATIONS UP TO THE TIME THE PROCUREMENT IS OFFICIALLY CLOSED.

THE PROHIBITION AGAINST THE USE OF AN "AUCTION TECHNIQUE" IS CONTAINED IN ASPR 3-805.1 (B), IN EFFECT AT THE TIME OF THIS PROCUREMENT, WHICH PROVIDES AS FOLLOWS:

"3-805.1 GENERAL.

"/B) WHENEVER NEGOTIATIONS ARE CONDUCTED WITH MORE THAN ONE OFFEROR, NO INDICATION SHALL BE MADE TO ANY OFFEROR OF A PRICE WHICH MUST BE MET TO OBTAIN FURTHER CONSIDERATION SINCE SUCH PRACTICE CONSTITUTES AN AUCTION TECHNIQUE WHICH MUST BE AVOIDED. AFTER RECEIPT OF PROPOSALS, NO INFORMATION REGARDING THE NUMBER OR IDENTITY OF THE OFFERORS PARTICIPATING IN THE NEGOTIATIONS SHALL BE MADE AVAILABLE TO THE PUBLIC OR TO ANY ONE WHOSE OFFICIAL DUTIES DO NOT REQUIRE SUCH KNOWLEDGE. WHENEVER NEGOTIATIONS ARE CONDUCTED WITH SEVERAL OFFERORS, WHILE SUCH NEGOTIATIONS MAY BE CONDUCTED SUCCESSIVELY ALL OFFERORS SELECTED TO PARTICIPATE IN SUCH NEGOTIATIONS * * * SHALL BE OFFERED AN EQUITABLE OPPORTUNITY TO SUBMIT SUCH PRICE, TECHNICAL, OR OTHER REVISIONS IN THEIR PROPOSALS AS MAY RESULT FROM THE NEGOTIATIONS. ALL SUCH OFFERORS SHALL BE INFORMED OF THE SPECIFIED DATE (AND TIME IF DESIRED) OF THE CLOSING OF NEGOTIATIONS AND THAT ANY REVISIONS TO THEIR PROPOSALS MUST BE SUBMITTED BY THAT DATE. * *

SEE, ALSO, ASPR 3-804, WHICH PROVIDES THAT "COST AND PROFIT FIGURES OF ONE OFFEROR OR CONTRACTOR SHALL NOT BE REVEALED TO OTHER OFFERORS OR CONTRACTORS.' IN CONNECTION WITH THE FOREGOING REGULATIONS, THE PROCURING AGENCY REPORTS AS FOLLOWS:

"ONE OF THE REASONS FOR BARRETT ELECTRONICS' PROTEST IS THE APPARENT BELIEF THAT ITS PRICE WAS DISCLOSED TO ITS COMPETITORS BY ITS WASHINGTON AGENT. IT IS UNDERSTOOD THAT THE AGENT REFERRED TO IS DAVID J. CARLSON AND ASSOCIATES OF VIENNA, VIRGINIA, WHO NOW REPRESENTS MECHANICAL HANDLING SYSTEMS, INC., A SUBSIDIARY OF AMERICAN CHAIN AND CABLE COMPANY, INC. THIS FIRM DID NOT SUBMIT AN OFFER ON THIS REQUEST FOR PROPOSALS. THE CONTRACTING OFFICER HAD NO KNOWLEDGE AS TO WHETHER BARRETT'S PRICE WAS DISCLOSED BY ITS FORMER WASHINGTON AGENT. BARRETT'S PRICE WAS NOT DISCLOSED BY THE CONTRACTING OFFICER OR OTHER GOVERNMENT PERSONNEL INVOLVED IN THIS PROCUREMENT.'

AS NOTED ABOVE, IF YOUR PRICES WERE IN FACT DISCLOSED TO YOUR COMPETITORS, SUCH PRICES WERE NOT DISCLOSED BY GOVERNMENT PERSONNEL, AND THE TELEGRAMS FROM CONTROL REDUCING ITS PRICES WERE NOT SOLICITED BY THE PROCURING AGENCY. WE HAVE REVIEWED THE CASES CITED BY YOU AND DO NOT FIND THEM APPLICABLE TO THE SITUATION HERE INVOLVED. IN B 139008, MAY 12, 1959, 38 COMP. GEN. 754, THERE WAS INVOLVED A PROCUREMENT WHERE THE PROPOSAL OF THE FIRM RECEIVING THE AWARD WAS 23 PERCENT LOWER THAN THE OFFER OF THE PROTESTING FIRM. WE HELD THAT SINCE IT WAS UNLIKELY THAT A SUFFICIENT PRICE REDUCTION COULD BE ACHIEVED IN FURTHER NEGOTIATIONS TO MAKE THE PROTESTING FIRM COMPETITIVE, THE CONTRACTING OFFICER DID NOT ERR IN CONDUCTING FURTHER NEGOTIATIONS WITH THE ONE FIRM OFFERING THE LOWEST PRICE. OUR DECISION B-151976, OCTOBER 15, 1963, INVOLVED THE PRINCIPLE THAT THE PRACTICE OF INFORMING OFFERORS DURING NEGOTIATIONS THAT THEIR PRICES WERE NOT LOW WAS IMPROPER. THE PRINCIPLE EXPRESSED IN THAT DECISION HAS SINCE BEEN INCORPORATED INTO ASPR 3-805.1 (B), REVISION 20, DECEMBER 1, 1966. THIS DECISION, HOWEVER, IS NOT IN POINT SINCE CONTROL WAS AT NO TIME ADVISED BY GOVERNMENT PERSONNEL THAT ITS PROPOSAL WAS NOT THE LOWEST RECEIVED.

THE RECORD ESTABLISHES THAT NO UNFAIR ADVANTAGE WAS CONFERRED ON CONTROL SINCE BOTH CONTROL AND YOUR FIRM WERE AFFORDED EQUAL OPPORTUNITY TO SUBMIT NEW PROPOSALS AND TO REQUOTE PRICES. SINCE WE CONCLUDE THAT THERE WAS A REASONABLE BASIS FOR THE PROCURING AGENCY'S ACTIONS AND THAT THERE WAS COMPLIANCE WITH APPLICABLE PROVISIONS OF STATUTE AND REGULATION, WE FIND NO BASIS FOR DISTURBING THE AWARD AS MADE. ACCORDINGLY, YOUR PROTEST MUST BE DENIED.