B-160809, JUNE 29, 1967, 46 COMP. GEN. 885

B-160809, JUNE 29, 1967, 46 COMP. GEN. 885

CONTRACTS - DATA, RIGHTS, ETC. - DISCLOSURE - TIMELY PROTEST REQUIREMENT AN AWARD OF A CONTRACT FOR THE RESEARCH AND DEVELOPMENT OF A WEAPONS SYSTEM UNDER 10 U.S.C. 2304 (A) (11) TO OTHER THAN THE LOW OFFEROR--- A SMALL BUSINESS CONCERN--- WHO PRIOR TO ISSUANCE OF THE REQUEST FOR PROPOSALS HAD SUBMITTED AN UNSOLICITED PROPOSAL CONTAINING PROPRIETARY DATA WILL NOT BE DISTURBED, THE OFFEROR OF THE LOW PROPOSAL IN ALLEGING IMPROPER DISCLOSURE OF THE DATA ONLY UPON BECOMING AWARE THAT ITS SOLICITED PROPOSAL WOULD NOT BE CONSIDERED FOR AWARD FAILING TO MEET THE POSITION OF THE COURTS THAT A PARTY TO MAINTAIN PROPRIETARY RIGHTS IN INFORMATION MUST TAKE REASONABLE ACTION TO PREVENT OR SUPPRESS UNAUTHORIZED USE OF INFORMATION, AND THE SCIENTIFIC OR ENGINEERING ASPECTS OF THE DISPUTE LYING OUTSIDE THE COMPETENCE OF THE UNITED STATES GENERAL ACCOUNTING OFFICE, THE ADMINISTRATIVE DENIAL OF IMPROPER USE OF THE PROPRIETARY DATA MUST BE ACCEPTED. CONTRACTS - RESEARCH AND DEVELOPMENT - TWO-STEP PROCEDURE THE USE OF THE TWO-STEP FORMAL ADVERTISING PROCEDURE PRESCRIBED BY PARAGRAPH 2-501 ET. SEQ. OF THE ARMED SERVICES PROCUREMENT REGULATION IN LIEU OF NEGOTIATING UNDER PARAGRAPH 3-211.2, FOR THE PROCUREMENT OF A RESEARCH AND DEVELOPMENT CONTRACT PURSUANT TO THE AUTHORITY IN 10 U.S.C. 2304 (A) (11), WOULD BE NEITHER FEASIBLE NOR PRACTICABLE WHERE THE EXACT NATURE AND EXTENT OF THE DEVELOPMENT WORK AND THE METHOD OF ACCOMPLISHMENT CANNOT BE ESTABLISHED IN ADVANCE AND THE WORK CONTEMPLATED IS SUBJECT TO IMPROVISATION AND CHANGE BASED ON THE OFFEROR'S APPROACH PRIOR TO THE ESTABLISHMENT OF FIRM CONTRACT REQUIREMENTS, AND THE PROCUREMENT HAVING BEEN OBTAINED ON A COMPETITIVE BASIS TO THE MAXIMUM PRACTICABLE EXTENT, THE DETERMINATION TO NEGOTIATE UNDER 10 U.S.C. 2304 (A) (11) WAS PROPER AND UNDER 10 U.S.C. 2310 (B) THE DETERMINATION IS FINAL. CONTRACTS - RESEARCH AND DEVELOPMENT - PROPRIETY OF AWARD WHERE THE NEGOTIATION OF A RESEARCH AND DEVELOPMENT WEAPONS SYSTEM CONTRACT WAS IN ACCORDANCE WITH SECTION IV, PART 2, OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) AND THE AUTHORITY IN 10 U.S.C. 2304 (A) (11), THE REQUIREMENT IN ASPR 3-805.1 (A) THAT AFTER RECEIPT OF PROPOSALS, WRITTEN OR ORAL DISCUSSIONS WITH ALL RESPONSIVE OFFERORS SUBMITTING PROPOSALS WITHIN A COMPETITIVE RANGE, PRICE AND OTHER FACTORS CONSIDERED, DOES NOT APPLY, ASPR 3-805.1 (D) PERMITTING AWARD OF A RESEARCH AND DEVELOPMENT CONTRACT TO THE OFFEROR PROMISING THE GREATEST VALUE TO THE GOVERNMENT ON A BASIS OTHER THAN PRICE, AND THE PROPOSAL OF THE LOW OFFEROR FAILING TO MEET THE NEEDS OF THE GOVERNMENT, THE SUBMISSION OF AN UNSOLICITED PROPOSAL DOES NOT ENTITLE THE OFFEROR TO THE PREFERENTIAL TREATMENT PROVIDED IN ASPR 4-106.1 (E) (5), AND THE AWARD AS MADE WAS A PROPER DISCHARGE OF PROCUREMENT RESPONSIBILITY AND DISCRETION.

TO JOHN E. REILLY, JUNE 29, 1967:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM AND LETTERS DATED FEBRUARY 1, 6, AND MARCH 22, 1967, PROTESTING ON BEHALF OF THE CUSTOM PACKAGING CO.--- A SMALL BUSINESS CONCERN--- AGAINST THE AWARD OF A CONTRACT BY THE DEPARTMENT OF THE ARMY TO NORTRONICS, A DIVISION OF NORTHROP CORPORATION, UNDER REQUEST FOR PROPOSALS NO. DAAA15-67-R-0116, ISSUED BY THE UNITED STATES ARMY EDGEWOOD ARSENAL, EDGEWOOD ARSENAL, MARYLAND. RECEIPT IS ALSO ACKNOWLEDGE OF YOUR REBUTTAL LETTER ON MAY 15, 1967, SUBMITTED IN RESPONSE TO THE REPORT OF THE CONTRACTING OFFICER.

THE PROTEST ARISES FROM AN UNSOLICITED PROPOSAL SUBMITTED BY CUSTOM TO EDGEWOOD ARSENAL ON APRIL 15, 1966, COVERING THE PRESENTATION OF A SHOULDER BORNE, RAPID FIRE ROCKET POWERED, FIRE FLAME DELIVERING WEAPON. A FILM DEMONSTRATION OF THE WEAPON WAS SUBMITTED WITH THE UNSOLICITED PROPOSAL. THE COVER LETTER OF THE PROPOSAL CONTAINED THE FOLLOWING STATEMENTS:

IN AS MUCH AS THE SYSTEM CONTAINS SEVERAL PATENTABLE FEATURES, WE WOULD APPRECIATE HAVING THE INFORMATION CONTAINED IN OUR PROPOSAL TREATED AS PROPRIETARY. WE HAVE TAKEN THE PRELIMINARY STEPS TOWARD THE PROTECTION OF THESE FEATURES WITH OUR PATENT LAWYER, BUT WILL AWAIT YOUR SUGGESTIONS RELATING TO THE CONTINUANCE OF THAT EFFORT. BY LETTER DATED MAY 11, 1966, EDGEWOOD ARSENAL ACKNOWLEDGED RECEIPT OF THE UNSOLICITED PROPOSAL AND ADVISED CUSTOM THAT:

YOU SHOULD UNDERSTAND THAT THE RECEIPT AND EVALUATION OF YOUR PROPOSAL BY THE ARMY DOES NOT IMPLY A PROMISE TO PAY, A RECOGNITION OF NOVELTY OR ORIGINALITY OR ANY RELATIONSHIP WHICH MIGHT REQUIRE THE GOVERNMENT TO PAY FOR USE OF INFORMATION TO WHICH IT IS OTHERWISE LAWFULLY ENTITLED. HOWEVER, YOU MAY BE SURE THE ARMY HAS NO INTENTION OF USING ANY PROPOSAL IN WHICH YOU HAVE PROPERTY RIGHTS WITHOUT PROPER COMPENSATION.

PURSUANT TO THE REQUEST CONTAINED IN THE MAY 11 LETTER, CUSTOM EXECUTED A MEMORANDUM OF UNDERSTANDING AS FOLLOWS:

THE UNDERSIGNED ACKNOWLEDGES THAT THIS DATE HE HAS, ON BEHALF OF (HIMSELF, OR CUSTOM PACKAGING COMPANY) MADE A DISCLOSURE OF AN INVENTIVE PROPOSAL TO THE DEPARTMENT OF THE ARMY RELATING TO A SHOULDER BORNE, ROCKET POWERED, FLAME DELIVERING WEAPON.

IT IS UNDERSTOOD THAT THE DEPARTMENT OF THE ARMY HAS ACCEPTED THE ABOVE PROPOSAL FOR THE PURPOSE OF EVALUATING IT AND ADVISING OF ANY POSSIBLE INTEREST, PROVIDED THAT THE ACCEPTANCE TO DETERMINE SUCH INTEREST DOES NOT, IN ITSELF, IMPLY A PROMISE TO PAY, A RECOGNITION OF NOVELTY OR ORIGINALITY OR A CONTRACTUAL RELATIONSHIP SUCH AS WOULD RENDER THE GOVERNMENT LIABLE TO PAY FOR ANY USE OF INFORMATION IN THE PROPOSAL, TO WHICH IT WOULD OTHERWISE LAWFULLY BE ENTITLED.

THEREAFTER, ON OCTOBER 14, 1966, REQUEST FOR PROPOSALS NO. DAAA15 67-R- 0116 WAS ISSUED TO 16 FIRMS, INCLUDING CUSTOM, FOR QUOTATIONS ON THE FURNISHING OF RESEARCH SERVICES INCIDENT TO THE DESIGN, DEVELOPMENT, TEST, EVALUATION AND FABRICATION OF A MULTISHOT PORTABLE FLAME WEAPON SYSTEM. STATEMENT OF WORK ACCOMPANIED THE REQUEST AND PROVIDED IN PART THAT:

II. STATEMENT OF WORK

A. PHASE I--- LITERATURE SEARCH AND PRELIMINARY DESIGN CONCEPTS

1. THE CONTRACTOR SHALL REVIEW THE TECHNOLOGY AND DESIGN OF THE M72 LAW AND THE 3.5 INCH BAZOOKA TO ASSURE MAXIMUM UTILIZATION OF COMMON COMPONENTS AND COMPLIANCE WITH COMMON MILITARY AND OPERATIONAL CHARACTERISTICS. IN ADDITION, THE BACKGROUND INFORMATION CONCERNING THE EXPERIMENTAL TEST DATA WHICH WAS GENERATED UNDER A MARINE CORPS PROGRAM FOR DETERMINING THE EFFECTIVENESS OF AN ENCAPSULATED FLAME ROUND WILL BE FURNISHED BY THE GOVERNMENT.

C. PHASE III--- FINAL DESIGN AND FABRICATION OF GOVERNMENT ITEMS

UPON APPROVAL OF THE PHASE II TEST RESULTS AND DESIGN, THE CONTRACTOR SHALL MANUFACTURE TWENTY LAUNCHERS AND 2000 ROUNDS (IN CLIPS, CYLINDERS OR MAGAZINE AS APPROPRIATE) TO BE DELIVERED TO THE GOVERNMENT F.O.B., EDGEWOOD ARSENAL, MARYLAND. THESE UNITS WILL BE MADE IN ACCORDANCE TO THE APPROVED SPECIFICATIONS AND DRAWINGS, FILLED AND FUZED.

VI.LEVEL OF EFFORT

B. IT IS RECOGNIZED THAT THE CONTRACTOR MAY NOT BE ABLE TO ACCOMPLISH ALL THE TECHNICAL REQUIREMENTS AND MAKE DELIVERY OF ALL ITEMS COVERED BY THE TECHNICAL DESCRIPTION OF THE WORK WITHIN THE LEVEL OF EFFORT SET OUT HEREIN. THE CONTRACTOR'S OBLIGATION WITH RESPECT TO COMPLETION OF THE TECHNICAL WORK, INCLUDING FABRICATION OF ITEMS, WILL BE DEEMED COMPLETE UPON EXPENDITURE OF THE LEVEL OF EFFORT SET OUT ABOVE PROVIDED THAT THE CONTRACTOR HAS PERFORMED THE WORK IN ACCORDANCE WITH SOUND TECHNICAL PROCEDURES AND GOOD WORK PRACTICE. NOTWITHSTANDING THE ABOVE, THE CONTRACTOR MUST KEEP ALL DATA CURRENT, COMPLETE AND DELIVER ALL REPORTS AS REQUIRED BY THE CONTRACT AND COMPLY WITH ALL OTHER REQUIREMENTS OF THE CONTRACT. INTERESTED OFFERORS WERE ADVISED THAT A COST-REIMBURSEMENT CONTRACT WAS ANTICIPATED AND THAT THE PRINCIPAL CRITERIA THAT WOULD BE USED IN THE EVALUATION OF PROPOSALS WOULD BE (A) TECHNICAL APPROACH, (B) CALIBER OF PERSONNEL, (C) BACKGROUND EXPERIENCE, (D) FACILITIES AVAILABLE, AND (E) PROPOSED SCHEDULE. NINE PROPOSALS WERE RECEIVED AND EVALUATED BY A TECHNICAL EVALUATION COMMITTEE IN ACCORDANCE WITH THE FOREGOING FACTORS AND WEIGHTS AGREED UPON PRIOR TO EVALUATION RATING. THE WEIGHTS ASSIGNED EACH OF THE CRITERIA WERE: TECHNICAL APPROACH 40 PERCENT; TECHNICAL PERSONNEL 20 PERCENT; APPLICABLE BACKGROUND EXPERIENCE 15 PERCENT; FACILITIES 15 PERCENT; AND SCHEDULE 10 PERCENT. THE PROPOSAL OF CUSTOM WAS RATED LOWEST AND THE PROPOSAL OF NORTRONICS, A DIVISION OF NORTHROP CORPORATION, RECEIVED THE HIGHEST RATING. THE LOWEST OFFER IN THE AMOUNT OF $168,000 WAS SUBMITTED BY CUSTOM AND THE OTHER EIGHT OFFERS RANGED FROM $269,000 TO $404,000. NORTRONICS SUBMITTED AN OFFER OF $387,000.

BY TELEGRAM DATED FEBRUARY 1, 1967, TO THE PROCUREMENT AGENCY, CUSTOM PROTESTED AGAINST THE POSSIBLE AWARD OF A RESEARCH AND DEVELOPMENT CONTRACT TO NORTRONICS. THE BASES FOR ITS PROTEST WERE: (1) THAT SUCH CONTRACT WAS BASED ON A WEAPON THAT HAD BEEN DEVELOPED AND SATISFACTORILY DEMONSTRATED TO THE PROCURING INSTALLATION BY CUSTOM PRIOR TO THE ISSUANCE OF THE REQUEST FOR PROPOSALS; (2) THAT THE WEAPON SYSTEM DEVELOPED BY CUSTOM CONTAINED PROPRIETARY INFORMATION; (3) THAT THE WEAPON SYSTEM DEVELOPED BY CUSTOM AND AS DEMONSTRATED TO THE PROCURING INSTALLATION FULFILLED THE BASIC REQUIREMENTS OF THE REQUEST FOR PROPOSALS; AND (4) THAT SINCE THE WEAPON SYSTEM DEVELOPED BY CUSTOM WAS A COMPLETED HARDWARE ITEM, IT WAS INAPPROPRIATE FOR THE PROCURING INSTALLATION TO BUY UNDER A RESEARCH AND DEVELOPMENT TYPE CONTRACT AN ITEM ALREADY IN EXISTENCE AND SUFFICIENTLY DEFINED FOR PROCUREMENT BY FORMAL ADVERTISING PROCEDURES.

IN VIEW OF THE URGENCY OF THE SOUTH EAST ASIA REQUIREMENT FOR THE FLAME WEAPON SYSTEM, WHICH BORE ISSUE PRIORITY DESIGNATOR 0-2, THE CONTRACTING OFFICER REQUESTED AND RECEIVED APPROVAL TO MAKE AN AWARD PRIOR TO THE RESOLUTION OF THE PROTEST. ON FEBRUARY 3, 1967, AFTER A PERIOD OF NEGOTIATION WITH THE CORPORATION, COST-PLUS-INCENTIVE-FEE CONTRACT NO. DAAA15-67-C-0343 WAS AWARDED TO NORTRONICS IN THE TOTAL ESTIMATED AMOUNT OF $353,300.

YOU ALLEGE THAT THE REQUEST FOR PROPOSALS WAS BASED ON CUSTOM'S INDEPENDENT RESEARCH AND FINDINGS WHICH UTILIZED THE UNIQUENESS OF THAT COMPANY'S IDEAS, ALL OF WHICH WERE DISCLOSED TO EDGEWOOD ARSENAL TECHNICAL PERSONNEL BY MEANS OF, AND THROUGH, ITS UNSOLICITED PROPOSAL. FURTHER, YOU CONTEND THAT CUSTOM'S PROPRIETARY RIGHTS IN SUCH DISCLOSED INFORMATION WERE VIOLATED BY THE ISSUANCE OF THE REQUEST FOR PROPOSALS. THEREFORE, YOU REQUEST THAT WE DIRECT THE DEPARTMENT OF THE ARMY TO CANCEL THE AWARD MADE TO NORTRONICS AND TO DIRECT AN AWARD TO CUSTOM, OR, IN THE ALTERNATIVE, THAT THE PROCURING ACTIVITY SHOULD FIRST NEGOTIATE WITH CUSTOM TO OBTAIN UNLIMITED RIGHTS TO THE DATE CONTAINED IN THE UNSOLICITED PROPOSAL BEFORE PROCEEDING FURTHER PURSUANT TO DEFENSE PROCUREMENT CIRCULAR NO. 24 DATED FEBRUARY 26, 1965 (ARMED SERVICES PROCUREMENT REGULATION (ASPR) 9-202). HOWEVER, UPON REVIEW OF THE ENTIRE RECORD BEFORE US, WE FIND NO LEGAL OR FACTUAL BASIS TO QUESTION THE AWARD OF THE CONTRACT TO NORTRONICS.

YOUR CLAIM OF IMPROPER USE BY THE PROCURING ACTIVITY OF PROPRIETARY INFORMATION CONTAINED IN CUSTOM'S UNSOLICITED PROPOSAL IS CATEGORICALLY DENIED BY RESPONSIBLE AND KNOWLEDGEABLE TECHNICAL PERSONNEL OF THE DEPARTMENT OF THE ARMY. AND WHILE YOUR REBUTTAL AND OTHER CORRESPONDENCE DEALING WITH THIS ALLEGATION STRONGLY DISPUTE THE CONCLUSION REACHED BY THE ARMY TECHNICAL PERSONNEL, WE HAVE NO ALTERNATIVE BUT TO ACCEPT THE FACTS AS REPORTED BY THE ARMY. IN FACTUAL DISPUTES, SUCH AS HERE, WHICH ARE TECHNICALLY BEYOND THE COMPETENCE OF OUR OFFICE BECAUSE OF THE SCIENTIFIC OR ENGINEERING CONCEPTS INVOLVED, WE MUST ACCORD A SIGNIFICANT DEGREE OF FINALITY TO THE ADMINISTRATIVE POSITION. HENCE, WITHOUT QUESTIONING THE ACTUAL CHARACTER OF THE CLAIMED PROPRIETARY INFORMATION, WE BELIEVE THAT THIS ASPECT OF THE PROTEST PROPERLY MAY BE RESOLVED ON GROUNDS OTHER THAN THOSE INVOLVING THE RESOLUTION OF DISPUTED TECHNICAL FACTS.

WE NOTE THAT THE REQUEST FOR PROPOSALS WAS ISSUED ON OCTOBER 14, 1966, AND THAT PROPOSALS THEREUNDER WERE TO BE SUBMITTED BY NOVEMBER 18, 1966, OR ABOUT 6 MONTHS AFTER CUSTOM HAD SUBMITTED ITS UNSOLICITED PROPOSAL TO EDGEWOOD ARSENAL. CUSTOM HAD AMPLE OPPORTUNITY TO STUDY THE REQUEST FOR PROPOSALS BEFORE IT RESPONDED THERETO BUT IT TOOK NO EXCEPTION IN ITS PROPOSAL OR OTHERWISE WITH RESPECT TO THE ALLEGED INCLUSION OF ITS "PROPRIETARY" INFORMATION. THERE IS NO INDICATION OF ANY PROTEST BY CUSTOM UNTIL IT APPEARED THAT IT WAS AN UNSUCCESSFUL OFFEROR. THE COURTS HAVE TAKEN THE POSITION THAT A PARTY TO MAINTAIN HIS PROPRIETARY RIGHTS IN INFORMATION MUST TAKE REASONABLE ACTION TO PREVENT OR SUPPRESS ITS UNAUTHORIZED USE. SEE, FOR EXAMPLE, FERROLINE CORP. V. GENERAL ANILINE AND FILM CORP., 207 F.2D 912, 914; GLOVE TICKET CO. V. INTERNATIONAL TICKET O., 104 A.2D 92. HERE, CUSTOM MADE NO ATTEMPT SUBSEQUENT TO ISSUANCE OF THE REQUEST FOR PROPOSALS TO PROTEST AGAINST THE ALLEGEDLY IMPROPER DISCLOSURE UNTIL IT BECAME AWARE OF THE FACT THAT IT WAS NOT BEING CONSIDERED FOR AWARD. IN THIS POSTURE OF THE MATTER, COUPLED WITH THE ADMINISTRATIVE DENIAL OF DISCLOSURE, WE MUST CONCLUDE THAT NO SUBSTANTIAL BASIS EXISTS FOR QUESTIONING THE ACTIONS OF THE PROCUREMENT AGENCY IN THIS REGARD. SEE B-149295, SEPTEMBER 6, 1962; B-153144, JUNE 4, 1964; B-154038, AUGUST 4, 1964; B-154818, NOVEMBER 16, 1964.

PURSUANT TO THE NEGOTIATION AUTHORITY IN 10 U.S.C. 2304 (A) (11), PARAGRAPH 3-211 OF ASPR AUTHORIZES NEGOTIATION OF CONTRACTS FOR PROPERTY OR SERVICES THAT THE SECRETARY OF THE DEPARTMENT DETERMINES TO BE FOR EXPERIMENTAL, DEVELOPMENTAL OR RESEARCH WORK, OR FOR MAKING OR FURNISHING PROPERTY FOR EXPERIMENT, TEST, DEVELOPMENT OR RESEARCH. THIS AUTHORITY TO NEGOTIATE SUCH CONTRACTS IS APPLICABLE IN THE FOLLOWING CIRCUMSTANCES LISTED IN ASPR 3-211.2:

(I) CONTRACTS RELATING TO THEORETICAL ANALYSIS, EXPLORATORY STUDIES AND EXPERIMENT IN ANY FIELD OF SCIENCE OR TECHNOLOGY;

(II) DEVELOPMENTAL CONTRACTS CALLING FOR THE PRACTICAL APPLICATION OF INVESTIGATIVE FINDINGS AND THEORIES OF A SCIENTIFIC OR TECHNICAL NATURE;

(III) CONTRACTS FOR SUCH QUANTITIES AND KINDS OF EQUIPMENT, SUPPLIES, PARTS, ACCESSORIES, OR PATENT RIGHTS THERETO, AND DRAWINGS OR DESIGNS THEREOF, AS ARE NECESSARY FOR EXPERIMENT, DEVELOPMENT, RESEARCH, OR TEST; OR

(IV) CONTRACTS FOR SERVICES, TESTS, AND REPORTS NECESSARY OR INCIDENTAL TO EXPERIMENTAL, DEVELOPMENTAL, OR RESEARCH WORK.

IT SEEMS CLEAR FROM THE DOCUMENTED REPORT THAT THE TECHNICAL NATURE OF THIS PROCUREMENT WAS SUCH THAT TWO-STEP FORMAL ADVERTISING UNDER ASPR 2- 501 ET SEQ. WAS NEITHER FEASIBLE NOR PRACTICABLE. SINCE "DEVELOPMENT" WAS INVOLVED, THE EXACT NATURE AND EXTENT OF THE PROPOSED WORK AND THE PRECISE METHOD OF ACCOMPLISHING THE SAME COULD NOT BE ESTABLISHED IN ADVANCE. MOREOVER, THE WORK CONTEMPLATED WAS SUBJECT TO IMPROVISATION AND CHANGE BASED ON THE OFFEROR'S APPROACH PRIOR TO THE ESTABLISHMENT OF FIRM CONTRACT REQUIREMENTS. IT WILL BE NOTED FROM A READING OF THE TWO-STEP FORMAL ADVERTISING PROCEDURES THAT THE "DEVELOPMENT" WORK INVOLVED HERE WAS NOT AMENABLE TO THOSE PROCEDURES. CF. ASPR 4-104. THE PROCUREMENT WAS, HOWEVER, ON A COMPETITIVE BASIS TO THE MAXIMUM PRACTICAL EXTENT. INDICATED ABOVE, PROPOSALS WERE REQUESTED FROM 16 SOURCES AND 9 FIRMS RESPONDED. ALL OFFERS WHICH WERE DETERMINED TO BE TECHNICALLY ACCEPTABLE WERE EVALUATED UNDER THE ESTABLISHED CRITERIA ON A COMMON BASIS. ASIDE FROM THIS, THE DETERMINATION TO NEGOTIATE THIS CONTRACT UNDER 10 U.S.C. 2304 (A) (11) IS FINAL AS A MATTER OF LAW UNDER 10 U.S.C. 2310 (B). WHILE THE REQUEST FOR PROPOSALS ON THE CONTRACT CALLED FOR THE FURNISHING OF 20 WEAPONS AND 2,000 ROUNDS OF AMMUNITION FOR TEST PURPOSES, THE PROCUREMENT WAS PRIMARILY FOR RESEARCH AND DEVELOPMENT UNDER THE REGULATIONS REFERRED TO ABOVE. YOU CONTEND THAT NEGOTIATIONS SHOULD HAVE BEEN CONDUCTED WITH CUSTOM IN ACCORDANCE WITH ASPR 3-805.1 (A) WHICH PROVIDES, WITH CERTAIN STATED EXCEPTIONS, THAT AFTER RECEIPT OF INITIAL PROPOSALS, WRITTEN OR ORAL DISCUSSIONS SHALL BE CONDUCTED WITH ALL RESPONSIBLE OFFERORS WHO SUBMIT PROPOSALS WITHIN A COMPETITIVE RANGE, PRICE AND OTHER FACTORS CONSIDERED. HOWEVER, ASPR 3-805.1 (D) PROVIDES WITH REFERENCE TO THE NEGOTIATION OF RESEARCH AND DEVELOPMENT CONTRACTS THAT: (D) THE PROCEDURES SET FORTH IN (A) * * * ABOVE MAY NOT BE APPLICABLE IN APPROPRIATE CASES WHEN SPECIAL SERVICES (SUCH AS ARCHITECT-ENGINEER SERVICES) OR WHEN COST-REIMBURSEMENT TYPE CONTRACTING IS ANTICIPATED. MOREOVER AWARD OF SUCH CONTRACT AND R AND D CONTRACTS MAY BE PROPERLY INFLUENCED BY THE PROPOSAL WHICH PROMISES THE GREATEST VALUE TO THE GOVERNMENT IN TERMS OF POSSIBLE PERFORMANCE, TECHNICAL QUALITY, ULTIMATE PRODUCIBILITY, GROWTH POTENTIAL AND OTHER FACTORS RATHER THAN THE PROPOSALS OFFERING THE LOWEST PRICE OR PROBABLE COST AND FIXED FEE.

THE NEGOTIATION PROCEDURES FOLLOWED HERE WERE GENERALLY IN ACCORDANCE WITH SECTION IV, PART 2, ASPR, WHICH IS CONCERNED WITH THE PROCUREMENT OF RESEARCH AND DEVELOPMENT SERVICES PURSUANT TO THE NEGOTIATION AUTHORITY OF 10 U.S.C. 2304 (A) (11). THE PERTINENT PROVISIONS OF SECTION IV ARE AS FOLLOWS:

4-106.3 CONDUCT OF NEGOTIATIONS. SEE 3-804 AND 3-805. THE CONTRACTING OFFICER SHOULD MAKE CERTAIN THAT EACH PROSPECTIVE CONTRACTOR FULLY UNDERSTANDS THE DETAILS OF THE VARIOUS PHASES OF THE GOVERNMENT'S REQUIREMENT, ESPECIALLY THE STATEMENT OF WORK. THIS MAY BE BEST ACCOMPLISHED BY CONFERENCES BETWEEN A PROSPECTIVE CONTRACTOR, THE CONTRACTING OFFICER, AND APPROPRIATE TECHNICAL PERSONNEL, PARTICULARLY WHERE THERE IS DOUBT THAT A WORK STATEMENT IS UNDERSTOOD OR WILL BE INTERPRETED CORRECTLY BY PROSPECTIVE CONTRACTORS.

4-106.4 EVALUATION FOR AWARD.

(A) GENERALLY, RESEARCH AND DEVELOPMENT CONTRACTS SHOULD BE AWARDED TO THOSE ORGANIZATIONS, INCLUDING EDUCATIONAL ORGANIZATIONS, WHICH HAVE THE HIGHEST COMPETENCE IN THE SPECIFIC FIELD OF SCIENCE OR TECHNOLOGY INVOLVED. HOWEVER, AWARDS SHOULD NOT BE MADE FOR RESEARCH OR DEVELOPMENT CAPABILITIES THAT EXCEED THOSE NEEDED FOR THE SUCCESSFUL PERFORMANCE OF THE WORK.

(B) BEFORE DETERMINING THE TECHNICAL COMPETENCE OF PROSPECTIVE CONTRACTORS, AND RECOMMENDING TO THE CONTRACTING OFFICER THE CONCERN OR CONCERNS THAT THEY CONSIDER MOST TECHNICALLY COMPETENT, COGNIZANT TECHNICAL PERSONNEL SHALL CONSIDER THE FOLLOWING:

(I) THE CONTRACTOR'S UNDERSTANDING OF THE SCOPE OF THE WORK AS SHOWN BY THE SCIENTIFIC OR TECHNICAL APPROACH PROPOSED;

(II) AVAILABILITY AND COMPETENCE OF EXPERIENCED ENGINEERING, SCIENTIFIC, OR OTHER TECHNICAL PERSONNEL;

(III) AVAILABILITY FROM ANY SOURCE, OF NECESSARY RESEARCH, TEST, AND PRODUCTION FACILITIES;

(IV) EXPERIENCE OR PERTINENT NOVEL IDEAS IN THE SPECIFIC BRANCH OF SCIENCE OR TECHNOLOGY INVOLVED; AND

(V) THE CONTRACTOR'S WILLINGNESS TO DEVOTE HIS RESOURCES TO THE PROPOSED WORK WITH APPROPRIATE DILIGENCE.

(C) IN DETERMINING TO WHOM THE CONTRACT SHALL BE AWARDED, THE CONTRACTING OFFICER SHALL CONSIDER NOT ONLY TECHNICAL COMPETENCE, BUT ALSO ALL OTHER PERTINENT FACTORS INCLUDING MANAGEMENT CAPABILITIES, COST CONTROLS INCLUDING THE NATURE AND EFFECTIVENESS OF ANY COST REDUCTION PROGRAM (SEE 3-101 (VIII), AND PAST PERFORMANCE IN ADHERING TO CONTRACT REQUIREMENTS, WEIGHING EACH FACTOR IN ACCORDANCE WITH THE REQUIREMENTS OF THE PARTICULAR PROCUREMENT (SEE 1-903). * * *

4-106.5 EVALUATION OF PRICE AND COSTS.

(A) WHILE COST OR PRICE SHOULD NOT BE THE CONTROLLING FACTOR IN SELECTING A CONTRACTOR FOR A RESEARCH OR DEVELOPMENT CONTRACT, COST OR PRICE SHOULD NOT BE DISREGARDED IN THE CHOICE OF THE CONTRACTOR. IT IS IMPORTANT TO EVALUATE A PROPOSED CONTRACTOR'S COST OR PRICE ESTIMATE, NOT ONLY TO DETERMINE WHETHER THE ESTIMATE IS REASONABLE, BUT ALSO TO DETERMINE HIS UNDERSTANDING OF THE PROJECT AND ABILITY TO ORGANIZE AND PERFORM THE CONTRACT. * * *

ALTHOUGH CUSTOM DEMONSTRATED ITS PORTABLE FLAME WEAPON SYSTEM FOR EDGEWOOD ARSENAL, THE RECORD SHOWS THAT SUCH DEMONSTRATION WAS NOT SUCCESSFUL AND THAT, IN THE CONSIDERED JUDGMENT OF TECHNICAL PERSONNEL, SUCH WEAPON DID NOT MEET THE NEEDS OF THE GOVERNMENT. WE FIND NOTHING IN THE RECORD WHICH WOULD LEAD TO THE CONCLUSION THAT CUSTOM HAD A VALID BASIS FOR ASSUMING THAT THE GOVERNMENT WOULD AWARD IT A CONTRACT FOR SUCH WEAPON. IN REGARD TO CUSTOM'S UNSOLICITED PROPOSAL, ASPR 4 106.1 (E) (5) PROVIDES THAT THE SUBMITTER OF AN UNSOLICITED PROPOSAL IS NOT NECESSARILY ENTITLED TO PREFERENTIAL TREATMENT IN THE AWARD OF ANY CONTRACT BECAUSE OF HIS SUBMISSION. MOREOVER, AND IN VIEW OF THE REPORTED DEFICIENCIES IN THE WEAPONS SYSTEM PROPOSED IN THE UNSOLICITED PROPOSAL, IT WOULD SEEM THAT ANY EXPECTATION OF PREFERENTIAL TREATMENT WAS DISSIPATED WHEN THE REQUEST FOR PROPOSALS WAS ISSUED.

IN REGARD TO THE FAILURE OF THE PROCURING ACTIVITY TO INSERT IN THE REQUEST FOR PROPOSALS A NOTICE THAT AN AWARD MAY BE MADE WITHOUT DISCUSSION OF THE PROPOSALS (ASPR 3-805.1 (A) (V) (, THE CONTRACTING OFFICER HAS ADVISED THAT IT WAS INTENDED THAT DISCUSSIONS WOULD BE HELD WITH OTHER OFFERORS BUT THAT AFTER RECEIVING THE PROPOSAL OF NORTRONICS, IT WAS DETERMINED THAT NO BENEFIT WOULD ACCRUE TO THE GOVERNMENT BY CONDUCTING DISCUSSIONS WITH OFFERORS RATED SIGNIFICANTLY LOWER THAN NORTRONICS. CONSIDERING THE OBJECTIVE OF RESEARCH AND DEVELOPMENT PROCUREMENT AND THE CORRELATIVE RESPONSIBILITY OF EDGEWOOD ARSENAL TO MAINTAIN SCIENTIFIC AND TECHNOLOGICAL SUPERIORITY REQUISITE TO PROMOTE AND ADVANCE THE EFFECTIVENESS OF MILITARY OPERATIONS (ASPR 4-102), WE BELIEVE ON THE BASIS OF THE RECORD BEFORE US THAT THE PROCUREMENT RESPONSIBILITY WAS PROPERLY DISCHARGED IN MAKING THE AWARD TO NORTORNICS. ASPR 3-805.1 (A) WHICH PRESCRIBES THE NEGOTIATION PROCEDURES TO BE APPLIED IN THE SELECTION OF OFFERORS FOR NEGOTIATION AND AWARD IS AN IMPLEMENTATION OF 10 U.S.C. 2304 (G). THAT PROVISION OF LAW READS AS FOLLOWS:

(G) IN ALL NEGOTIATED PROCUREMENTS IN EXCESS OF $2,500 IN WHICH RATES OR PRICES ARE NOT FIXED BY LAW OR REGULATION AND IN WHICH TIME OF DELIVERY WILL PERMIT, PROPOSALS SHALL BE SOLICITED FROM THE MAXIMUM NUMBER OF QUALIFIED SOURCES CONSISTENT WITH THE NATURE AND REQUIREMENTS OF THE SUPPLIES OR SERVICES TO BE PROCURED, AND WRITTEN OR ORAL DISCUSSIONS SHALL BE CONDUCTED WITH ALL RESPONSIBLE OFFERORS WHO SUBMIT PROPOSALS WITHIN A COMPETITIVE RANGE, PRICE, AND OTHER FACTORS CONSIDERED. * * *

A STUDY OF THE RECORD ON THIS PROCUREMENT AS SUPPLEMENTED BY PRESENTATIONS ON BEHALF OF CUSTOM LEADS TO THE CONCLUSION THAT THE AWARD AS MADE REPRESENTED A PROPER DISCHARGE OF PROCUREMENT RESPONSIBILITY AND DISCRETION AS TO WHICH WE FIND NO LEGAL BASIS TO QUESTION.

ALTHOUGH OTHER CONTENTIONS RELATING TO THIS PROCUREMENT HAVE BEEN ADVANCED, THEY RELATE MAINLY TO PROCUREMENT ADMINISTRATION INVOLVING JUDGEMENT DETERMINATIONS AS TO WHICH WE HAVE NO COMMENTS TO OFFER. SEE B- 158842, MARCH 30, 1966. YOUR PROTEST IS THEREFORE DENIED.