B-161358, APR. 1, 1968

B-161358: Apr 1, 1968

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TO WORK SAVING INTERNATIONAL: FURTHER REFERENCE IS MADE TO YOUR LETTERS DATED APRIL 22. YOUR PROTEST IS MADE ESSENTIALLY ON THE GROUNDS THAT THE PROPOSAL OF WORK SAVING INTERNATIONAL (WSI) WAS IMPROPERLY REJECTED AS A RESULT OF BIAS ON THE PART OF A DEPUTY PROJECT OFFICER (DPO) FOR THE UNDERWAY REPLENISHMENT SYSTEMS PROJECT (UNREP). WHO WAS A MEMBER OF THE TECHNICAL REVIEWING STAFF FOR THE SUBJECT PROCUREMENT. THAT AN AWARD WAS MADE TO A FIRM WHICH MAY NOT BE QUALIFIED IN THIS FIELD. 1967 (A COPY OF WHICH WAS TRANSMITTED TO YOU ON JUNE 22. THAT THE PROCUREMENT IN QUESTION WAS THE RESULT OF AN UNSOLICITED PROPOSAL SUBMITTED BY CSR. IT IS STATED THAT A DETERMINATION FAVORING A PROCUREMENT OF THIS STUDY WAS MADE INITIALLY BY THE DPO FOR UNREP AND HIS SUBORDINATE.

B-161358, APR. 1, 1968

TO WORK SAVING INTERNATIONAL:

FURTHER REFERENCE IS MADE TO YOUR LETTERS DATED APRIL 22, 1967, AND SEPTEMBER 19, 1967, WITH ENCLOSURES, IN WHICH YOU PROTEST THE AWARD OF A CONTRACT TO CONTROL SYSTEMS RESEARCH, INC. (CSR), FOR A STUDY OF NAVY'S AMPHIBIOUS MATERIALS HANDLING SYSTEMS UNDER REQUEST FOR QUOTATIONS (RFQ) NO. N00024-67-R-7204 (S), ISSUED BY THE NAVAL SHIP SYSTEMS COMMAND (NAVSHIPS).

YOUR PROTEST IS MADE ESSENTIALLY ON THE GROUNDS THAT THE PROPOSAL OF WORK SAVING INTERNATIONAL (WSI) WAS IMPROPERLY REJECTED AS A RESULT OF BIAS ON THE PART OF A DEPUTY PROJECT OFFICER (DPO) FOR THE UNDERWAY REPLENISHMENT SYSTEMS PROJECT (UNREP), WHO WAS A MEMBER OF THE TECHNICAL REVIEWING STAFF FOR THE SUBJECT PROCUREMENT, AND THAT AN AWARD WAS MADE TO A FIRM WHICH MAY NOT BE QUALIFIED IN THIS FIELD.

WITH REGARD TO YOUR PROTEST THE DIRECTOR OF CONTRACTS, NAVSHIPS, HAS STATED IN HIS REPORT TO THIS OFFICE DATED JUNE 19, 1967 (A COPY OF WHICH WAS TRANSMITTED TO YOU ON JUNE 22, 1967, FOR CONSIDERATION AND COMMENTS), THAT THE PROCUREMENT IN QUESTION WAS THE RESULT OF AN UNSOLICITED PROPOSAL SUBMITTED BY CSR. IT IS STATED THAT A DETERMINATION FAVORING A PROCUREMENT OF THIS STUDY WAS MADE INITIALLY BY THE DPO FOR UNREP AND HIS SUBORDINATE, AND THAT BOTH THE PROPOSED PROCUREMENT AND CSR'S QUALIFICATIONS WERE REVIEWED AND APPROVED BY A NAVSHIPS RESEARCH AND DEVELOPMENT PROGRAM MANAGER WHOSE FUNCTION IT WAS TO REVIEW PROCUREMENT REQUESTS FROM THE MANY TECHNICAL CODES IN THE AREAS OF HIS COGNIZANCE AND TO APPROVE ONLY THOSE REQUESTS WHICH WERE THE MOST PROMISING. UPON BECOMING AWARE OF NAVY'S INTENTION TO NEGOTIATE A CONTRACT WITH CSR YOUR FIRM ADVISED NAVSHIPS OF ITS INTEREST IN THE MATTER. AS A RESULT, A MEETING WAS HELD ON NOVEMBER 30, 1966, BETWEEN WSI'S PRESIDENT, THE DPO FOR UNREP, THE FINANCIAL MANAGER FOR UNREP AND A NAVY CONTRACT NEGOTIATOR. SUBSEQUENTLY, IN A LETTER TO NAVSHIPS DATED DECEMBER 5, 1966, YOU REQUESTED A COPY OF THE SCOPE OF WORK INVOLVED AND AN OPPORTUNITY TO BID ON THIS REQUIREMENT. THEREAFTER, NAVSHIPS FORWARDED ITS SPECIFICATIONS BY LETTER OF DECEMBER 27, 1966, AND REQUESTED THAT YOUR PROPOSAL BE SUBMITTED NO LATER THAN JANUARY 4, 1967.

ADDITIONAL EVENTS OCCURRING PRIOR TO SUBMISSION OF YOUR PROPOSAL ARE RELATED IN THE REPORT OF JUNE 19, IN PERTINENT PART, AS FOLLOWS: "* * * ON 4 JANUARY 1967, WSI REQUESTED AN EXTENSION IN THE TIME FOR RECEIPT OF PROPOSALS, AND WAS TOLD TO PUT THIS REQUEST IN WRITING. WSI DID THIS IN ITS LETTER OF 3 JANUARY 1967 AND REQUESTED THAT THE DATE FOR RECEIPT OF PROPOSALS BE EXTENDED UNTIL 4 FEBRUARY 1967. NAVSHIPS AGREED TO AN EXTENSION UNTIL 27 JANUARY 1967 IN ITS LETTER TO WSI DATED 12 JANUARY 1967. ON 19 JANUARY 1967, WSI AGAIN REQUESTED AN EXTENSION UNTIL 4 FEBRUARY 1967, OR AT LEAST UNTIL NOON ON 30 JANUARY 1967. NAVSHIPS THEN GRANTED THE EXTENSION UNTIL 4:30 P.M. ON 30 JANUARY 1967 BY ITS LETTER DATED 25 JANUARY 1967. COPIES OF THIS CORRESPONDENCE ARE ATTACHED HERETO IN CHRONOLOGICAL ORDER AS ENCLOSURES (2) THROUGH (7).' THE REPORT ALSO STATES THAT SOMETIME IN EARLY JANUARY 1967, BOTH THE PROJECT OFFICER FOR UNREP AND HIS DEPUTY MET WITH REAR ADMIRAL ROBERT CRAIGHILL (RET.), A WSI EMPLOYEE, AND PROVIDED HIM WITH A DETAILED ORAL EXPLANATION OF THE TYPE OF STUDY REQUIRED BY NAVSHIPS.

IN YOUR LETTER OF APRIL 22 YOU QUESTION WHETHER NAVSHIPS DELIBERATELY ATTEMPTED TO PRECLUDE YOUR FIRM FROM SUBMITTING A RESPONSIVE PROPOSAL. YOU IMPUTE SUCH AN INTENT TO THE AGENCY BECAUSE IT WAS NOT UNTIL JANUARY 3, 1967, THAT YOU RECEIVED THE RFQ DATED DECEMBER 27, 1966, WHICH REQUIRED SUBMISSION OF YOUR PROPOSAL BY JANUARY 4, 1967. IN THIS REGARD YOU ALSO CITE THE NAVY'S REFUSAL TO FULLY GRANT YOUR INITIAL WRITTEN REQUEST TO EXTEND THE CUT OFF DATE UNTIL FEBRUARY 4, 1967, EVEN THOUGH NAVSHIPS PERSONNEL WERE ORALLY ADVISED THAT YOUR PRESIDENT WOULD BE TRAVELING ABROAD BETWEEN THE DATES OF JANUARY 4 AND JANUARY 25.

IGNORING FOR THE MOMENT CONSIDERATIONS OF THE GOVERNMENT'S NEEDS IN ESTABLISHING THE SUBMISSION DATE, WE ARE UNABLE TO AGREE THAT THE NAVY'S REFUSAL INDICATES BIAS ON THE PART OF THE AGENCY, SINCE THE CONTRACTS OFFICE GRANTED YOUR FIRST WRITTEN REQUEST FOR AN EXTENSION IN WHICH YOU STATED A REASON FOR THE REQUEST. FURTHERMORE, WE CONSIDER THE FACT THAT NAVSHIPS GRANTED YOUR ALTERNATE REQUEST FOR AN EXTENSION UNTIL JANUARY 30 AS EVIDENCE THAT SUFFICIENT TIME WAS PROVIDED TO ALLOW YOU TO PREPARE A PROPOSAL. AS TO YOUR COMPLAINT THAT YOU DID NOT RECEIVE THE RFQ UNTIL SEVEN DAYS AFTER THE DATE APPEARING THEREON, IT SHOULD BE NOTED THAT YOUR PRESIDENT'S LETTER OF JANUARY 3, 1967, TO NAVSHIPS STATES THAT THE RFQ WAS RECEIVED BY WSI ON DECEMBER 29, 1966, AS OPPOSED TO THE DATE OF JANUARY 3, 1967, STATED IN YOUR SUBSEQUENT PROTEST TO THIS OFFICE. SINCE IT IS APPARENT THAT, INITIALLY, A FULL WEEK WAS PROVIDED TO ALLOW YOU TO PREPARE A PROPOSAL AND YOUR SUBSEQUENT REQUEST FOR AN EXTENSION TO EITHER OF TWO ALTERNATE DATES WAS GRANTED, WE CANNOT AGREE WITH YOUR CONTENTION THAT THE AGENCY ATTEMPTED TO PRECLUDE YOUR FIRM FROM SUBMITTING AN ACCEPTABLE PROPOSAL.

WITH REGARD TO THE PERSONAL BIAS ON THE PART OF THE DPO FOR UNREP YOU HAVE TRANSMITTED A PROPERLY SWORN STATEMENT TESTIFYING AS TO WHAT TRANSPIRED DURING THE ABOVE REFERENCED MEETING ON NOVEMBER 30, 1966. YOU STATE, IN PERTINENT PART, AS FOLLOWS:

"AT THIS MEETING MR. * * * DEMONSTRATED CONSIDERABLE ANNOYANCE THAT ANY OTHER FIRM WOULD MAKE A BID ON THIS PROCUREMENT AS THEY HAD WORKED FOR OVER A YEAR TO SET UP THE CONTRACT FOR THIS FIRM AND HE STATED SPECIFICALLY THAT HE HAD NO INTENTION OF CHANGING THE CONTRACTOR.

"HE SAID THAT EVEN IF WE PRESENTED A BID HE WOULD RULE THAT WE WERE NOT QUALIFIED AND WOULD NOT CONSIDER OUR PROPOSAL. HE REPEATEDLY SAID IN DIFFERENT WAYS THAT IT WOULD DO US NO GOOD TO PRESENT A PROPOSAL. HE SAID THAT HE WOULD NOT RECOMMEND THE AWARD OF A CONTRACT TO US REGARDLESS OF OUR CAPABILITY OR QUALIFICATIONS AND THAT HE WOULD MAKE EVERY EFFORT TO SEE THAT WE WERE DISQUALIFIED OR OTHERWISE RULED OUT IF WE MADE A PROPOSAL. HE SAID SPECIFICALLY THAT HE WOULD CLAIM THAT WE WERE NOT QUALIFIED IN THIS SPECIFIC AREA.

"DURING THE ENTIRE MEETING MR. * * * DEMONSTRATED A DECIDED ANIMOSITY TOWARD ME PERSONALLY. I RECEIVED THE IMPRESSION THAT HE HAD CLOSE PERSONAL RELATIONSHIPS WITH PERSONNEL OF THE COMPANY TO WHICH HE INTENDED TO AWARD THE CONTRACT.'

UPON RECEIPT OF YOUR LETTER AND AFFIDAVIT OF SEPTEMBER 19, 1967, WE REQUESTED THAT THE DEPARTMENT OF THE NAVY UNDERTAKE A THOROUGH INVESTIGATION OF YOUR ALLEGATIONS AND THAT IT BE ACCOMPLISHED BY AN APPROPRIATE OFFICE INDEPENDENT OF THE PROCURING ACTIVITY. BY LETTER OF JANUARY 30, 1968, THE VICE COMMANDER, NAVSHIPS, HAS FORWARDED FOR OUR CONSIDERATION A REPORT OF THE INVESTIGATION CONDUCTED BY THE OFFICE OF THE INSPECTOR GENERAL WHICH, OF COURSE, IS ENTIRELY INDEPENDENT OF THE TECHNICAL CODE AND THE CONTRACTING OFFICE CONCERNED WITH THIS PROCUREMENT.

BASED UPON INTERVIEWS CONDUCTED WITH THE DPO FOR UNREP, THE CONTRACT NEGOTIATOR PRESENT AT THE NOVEMBER 30 MEETING, AND OTHERS, THE REPORT CONCLUDES THAT SEVERAL STATEMENTS WERE MADE BY THE DPO TO THE EFFECT THAT YOUR FIRM WAS NOT CONSIDERED TO BE QUALIFIED FOR THE DESIRED STUDY. WHILE IT IS FOUND THAT THERE WAS AN UNNECESSARY AND IMPROPER DISPLAY OF APPARENT BIAS, IT APPEARS TO BE FAIRLY ESTABLISHED THAT THE REJECTION OF YOUR PROPOSAL WAS REVIEWED AND ACCOMPLISHED BY PERSONNEL WHOLLY INDEPENDENT OF ANY SUPERVISION OR CONTROL BY THE DPO. IT IS ALSO APPARENT FROM THE REPORT THAT THE DPO WAS MOTIVATED BY A HIGH CONCERN THAT THE STUDY BEING CONTRACTED FOR SHOULD EMPLOY THE DESIRED DISCIPLINES, AND FOLLOW THE NARROW SUBJECT AND BE COMPLETED IN THE FORMAT, WHICH WOULD AVOID ADDITIONAL WORKLOAD IN NAVSHIPS BEFORE THE STUDY COULD BE USED. THE INVESTIGATION ALSO REVEALED THAT YOUR PROPOSAL WAS NOT ARBITRARILY DISREGARDED SINCE IT WAS THE SUBJECT OF A TECHNICAL EVALUATION AND MEMORANDUM DATED FEBRUARY 21, 1967, PREPARED BY THE DPO AND SIGNED BY THE DIVISION DIRECTOR, ACQUISITION MANAGEMENT DIVISION; ALSO THAT A SUBSEQUENT INDEPENDENT ANALYSIS BY A COMPETENT PROJECT MANAGER FOUND YOUR PROPOSAL TO BE UNACCEPTABLE FOR REASONS SIMILAR TO THOSE EXPRESSED IN THE MEMORANDUM OF FEBRUARY 21. WITH RESPECT TO THE INDEPENDENT ANALYSIS OF YOUR PROPOSAL WHICH WAS PERFORMED TO DETERMINE WHETHER THERE WAS A REASONABLE BASIS IN FACT FOR REJECTING YOUR BID, THE INSPECTOR GENERAL'S REPORT EXPLAINS THE NATURE OF THE REQUIRED STUDY AND COMPARES YOUR PROPOSAL WITH THE PROPOSAL SUBMITTED BY CSR, AND STATES, IN PERTINENT PART, AS FOLLOWS:

"1. NATURE OF THE CONTRACT:

"IT IS IMPORTANT WHEN REVIEWING THIS MATTER THAT THE OBJECT OF THE CONTRACT BE UNDERSTOOD. REGARDLESS OF THE SHORT STATEMENT CONTAINED IN THE DEPARTMENT OF COMMERCE SYNOPSIS, THE DESIRED STUDY WAS NOT DIRECTED TOWARD EQUIPMENT AND THINGS IN THE AREA OF MATERIAL OR CARGO HANDLING. THE CONTRARY AN OPERATIONS RESEARCH TYPE STUDY ON THE LOGISTICS OF CARGO HANDLING IN AMPHIBIOUS WARFARE WAS DESIRED. A SPECIFIC PERIOD IN THE FUTURE WAS IMPORTANT AND IT WAS A REQUISITE THAT THE STUDY SHOULD BE MADE WITHIN THE GUIDELINES PROVIDED BY THE NAVY'S OPERATING FORCES BOTH BY MEANS OF OPERATING PLANS AND BY VARIOUS DEVELOPMENT PROGRAMS. MATHEMATICAL ANALYSES, TRADE-OFF STUDIES (I.E. OPTIMIZING THE PARAMETERS OF VARIOUS LIMITING FACTORS), COST EFFECTIVENESS STUDIES WERE IMPORTANT TO THE STUDY. THE FORMAT OF THE WORK WAS TO BE SUCH THAT IT WOULD BE DIRECTLY USEABLE IN JUSTIFICATIONS TO AUTHORITIES AT HIGHER LEVELS FOR DESIGN AND DEVELOPMENT PROGRAMS. THE RESULTS OF THE STUDY WOULD PRODUCE PRACTICAL PARAMETERS FOR THE DESIGN OR DEVELOPMENT OF CARGO HANDLING SYSTEMS AND WOULD IDENTIFY BOTTLENECK AND INTERFACE PROBLEMS.

"CONSEQUENTLY, A CONTRACTING OFFICER IN JUDGING THE RELATIVE MERITS OF A POTENTIAL CONTRACTOR WOULD PROPERLY PLACE A HIGHER VALUE ON SKILLS RELATED TO OPERATIONS RESEARCH AND LESS ON SPECIFIC SKILLS IN DESIGN OF CONTAINERS OR ROLL-ON, ROLL-OFF SYSTEMS ALTHOUGH THE LATTER WAS NOT UNIMPORTANT.

"2. ANALYSIS OF THE PROPOSALS:

"A COMPARISON OF THE TWO PROPOSALS INDICATE THAT:

"A. CONTROL SYSTEMS RESEARCH, INC. INITIALLY SUBMITTED A PROPOSAL WHICH CONTEMPLATED A STUDY USING THE DISCIPLINE OF OPERATIONS RESEARCH TO ANALYZE THE FUNCTIONS OF AMPHIBIOUS OPERATIONS AND TO DETERMINE THEORETICALLY THE OPTIMUM PARAMETERS OF THE FUNCTION OF CARGO HANDLING INVOLVED THEREIN. IN CONTRAST, THE PROPOSAL OF WORK SAVINGS INTERNATIONAL SEEMED TO PROPOSE DEVELOPING A CATALOG OF CARGO HANDLING EQUIPMENTS AND METHODS PRESENTLY EXISTING.

"B. CONTROL SYSTEMS RESEARCH, INC. SPECIFICALLY CONTEMPLATED STUDY OF CARGO AND MATERIAL HANDLING IN REFERENCE TO THE VARIOUS PHASES OF AN AMPHIBIOUS ASSAULT AND ALSO IN REFERENCE TO VARIOUS TYPES AND SIZES OF ASSAULT. WORK SAVINGS INTERNATIONAL DID NOT SO STATE.

"C. CONTROL SYSTEMS RESEARCH, INC. SPECIFICALLY CONTEMPLATED STUDY INTO PRELIMINARY DESIGN AND DEVELOPMENT OF REQUIREMENT FOR EQUIPMENTS AND SYSTEMS NEEDED FOR THE FUTURE TIME FRAME REFERENCE. WORK SAVINGS INTERNATIONAL SPECIFICALLY EXCLUDED THIS.

"D. WORK SAVINGS INTERNATIONAL PROPOSED AS AN OPTIMUM STUDY WORK OF MUCH LARGER COST AND ME.'

AS A GENERAL RULE THIS OFFICE HAS HELD THAT THE DETERMINATION OF THE NEEDS OF THE GOVERNMENT AND THE METHOD OF ACCOMMODATING SUCH NEEDS IS PRIMARILY THE RESPONSIBILITY OF THE PROCURING AGENCY, AS IS THE EVALUATION OF PROPOSALS RECEIVED. IN THE ABSENCE OF CLEAR AND CONVINCING EVIDENCE OF BAD FAITH OR LACK OF A REASONABLE BASIS FOR THE ACTION TAKEN WE ARE NOT REQUIRED TO OBJECT TO SAME. WE HAVE ALSO HELD THAT NEGOTIATION AUTHORITY MAY LEGALLY TAKE INTO CONSIDERATION ALL FACTORS DEEMED ESSENTIAL TO THE ACCOMPLISHMENT OF THE PROCUREMENT, AND WE WILL NOT ORDINARILY QUESTION A DETERMINATION THAT A PROPOSAL IS TECHNICALLY UNACCEPTABLE TO MEET THE GOVERNMENT'S MINIMUM NEEDS. 46 COMP. GEN. 406. WE ALSO NOTE THAT ARMED SERVICES PROCUREMENT REGULATION (ASPR) 4-106.4 (B) (1) REQUIRES EVALUATIONS OF PROPOSALS FOR RESEARCH AND DEVELOPMENT PROCUREMENTS TO INCLUDE CONSIDERATION OF THE CONTRACTOR'S UNDERSTANDING OF THE SCOPE OF THE WORK AS SHOWN BY THE SCIENTIFIC OR TECHNICAL APPROACH, AND ASPR 3- 805.1 AUTHORIZES THE AGENCY TO ELIMINATE FROM FURTHER CONSIDERATION FOR AWARD OFFERORS OF TECHNICAL PROPOSALS WHOSE TECHNICAL QUALITY IS NOT WITHIN A COMPETITIVE RANGE.

IN VIEW OF THE PRINCIPLES STATED ABOVE AND SINCE OUR COMPARISON OF YOUR PROPOSAL WITH THAT OF CSR HAS REVEALED NO BASIS FOR DISAGREEMENT WITH THE INSPECTOR GENERAL'S ANALYSIS WE WILL NOT QUESTION THE AGENCY'S DETERMINATION THAT YOUR PROPOSAL WAS TECHNICALLY UNACCEPTABLE. IN ANY EVENT WE DO NOT CONSIDER THAT YOU HAVE PRESENTED CLEAR EVIDENCE OF BIAS TO SUPPORT A CONCLUSION THAT THE EVALUATION OF YOUR PROPOSAL AND THE DENIAL OF AN AWARD TO YOUR FIRM WERE MADE IN BAD FAITH. IT IS ALSO CONTENDED THAT TO YOUR KNOWLEDGE CSR IS NOT QUALIFIED IN THE FIELD OF CARGO OR MATERIALS HANDLING AND THAT A CONTRACT WAS AWARDED WITHOUT ANY ASSURANCE THAT THE FIRM HAS THE NECESSARY BACKGROUND TO JUSTIFY AN EXPENDITURE OF PUBLIC FUNDS. IN VIEW OF THE EVIDENCE OF RECORD THAT CSR INITIALLY SUBMITTED AN UNSOLICITED TECHNICAL PROPOSAL OF ITS OWN DEVISING -- WHICH INCLUDED INFORMATION CONCERNING THE COMPANY'S ORGANIZATION, PERSONNEL AND EXPERIENCE -- AND THAT SEVERAL RESPONSIBLE AGENCY EVALUATORS AGREED THAT CSR'S PROPOSAL WAS MOST PROMISING AND THAT ITS QUALIFICATIONS TO PERFORM AN OPERATIONS RESEARCH TYPE STUDY WERE SUFFICIENT AND OF PRIME IMPORTANCE IN THIS PROCUREMENT, WE CANNOT ACCEPT YOUR UNSUPPORTED ALLEGATION TO THE CONTRARY. WITH REGARD TO YOUR REQUEST FOR A HEARING TO DETERMINE THE VERACITY OF THE STATEMENTS WHICH APPEAR IN THE AGENCY'S REPORT OF JUNE 19, CONCERNING THE QUALITY OF YOUR FIRM'S PAST PERFORMANCES, THERE IS NEITHER A STATUTORY NOR REGULATORY REQUIREMENT FOR SUCH A HEARING UNDER THE CIRCUMSTANCES OF THIS CASE. NEITHER DOES IT APPEAR THAT ANY USEFUL PURPOSE WOULD BE SERVED THEREBY, SINCE YOUR PROPOSAL WAS REJECTED FOR OTHER SUBSTANTIAL REASONS.

FOR THE FOREGOING REASONS WE SEE NO LEGAL BASIS FOR OBJECTING TO THE NAVY'S ACTIONS, AND YOUR PROTEST MUST BE DENIED.