B-161513, JUL. 24, 1967

B-161513, JUL. 24, 1967

BIDS - LATE - NEGOTIATION DECISION TO UNSUCCESSFUL OFFEROR WHO PROTESTS THAT ITS REVISED OFFER ON CERTAIN ITEMS PROCURED BY DEPT. OF ARMY UNDER NEGOTIATED PROCUREMENT PURSUANT TO 10 U.S.C. 2304/A) (10) SHOULD HAVE BEEN CONSIDERED EVEN THOUGH MADE AFTER DATE FIXED FOR CLOSING. HELD THAT CONSIDERATION OF LATE REVISED OFFER WAS PRECLUDED UNDER ASPR 3-506, AND ALTHOUGH OFFEROR SHOULD HAVE BEEN PROMPTLY NOTIFIED OF AWARD TO OTHER OFFEROR SUCH INADVERTENCE TO A PROCEDURAL REQUIREMENT IS NOT FATAL TO AN OTHERWISE PROPERLY NEGOTIATED AWARD.

TO TYCO, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF MAY 12, 1967, WITH ENCLOSURES, PROTESTING AGAINST THE REJECTION OF YOUR PROPOSAL AND THE AWARD MADE TO THE THERMO-KING CORPORATION UNDER U.S. ARMY TELEGRAPHIC REQUEST FOR PROPOSALS NO. DAAK01-67-Q-0537.

THE TELEGRAPHIC REQUEST FOR QUOTATIONS WAS ISSUED ON NOVEMBER 25, 1966, TO THE THERMO-KING CORPORATION FOR NINE ITEMS OF REPAIR PARTS, SOURCE CODED TO THAT COMPANY AS THE ONLY KNOWN SOURCE OF SUPPLY, AND FOR WHICH NO DRAWINGS OR SPECIFICATIONS WERE AVAILABLE. THE TELEGRAPHIC REQUEST WAS BASED ON A DETERMINATION THAT THE REQUIREMENT SHOULD BE NEGOTIATED PURSUANT TO 10 U.S.C. 2304/A) (10) AND ARMED SERVICES PROCUREMENT REGULATION (ASPR) 3-210.2/XV). THAT PROVISION OF ASPR READS AS FOLLOWS:

"/XV) WHEN THE CONTEMPLATED PROCUREMENT IS FOR PARTS OR COMPONENTS BEING PROCURED AS REPLACEMENT PARTS IN SUPPORT OF EQUIPMENT SPECIALLY DESIGNED BY THE MANUFACTURER, WHERE DATA AVAILABLE IS NOT ADEQUATE TO ASSURE THAT THE PART OR COMPONENT WILL PERFORM THE SAME FUNCTION IN THE EQUIPMENT AS THE PART OF COMPONENT IT IS TO REPLACE; "

THE PROCUREMENT WAS SYNOPSIZED ON NOVEMBER 21, 1966, AFTER THE DETERMINATION AND FINDINGS WAS ISSUED ON NOVEMBER 15, 1966, JUSTIFYING NEGOTIATION AND ON A SOLE-SOURCE BASIS. ALTHOUGH ONLY SIX OF THE NINE ITEMS WERE SYNOPSIZED, THE SOLICITATION CONTAINED ALL NINE ITEMS AND REQUESTED THE BEST PRICE, TERMS AND DELIVERY FOR THE ITEMS. TWX RFQ NO. DAAK01-67-Q-0537 DATED NOVEMBER 25, 1966, WAS FORWARDED TO THERMO KING CORPORATION. FOLLOWING YOUR TELEPHONE CALL OF NOVEMBER 24, 1966, REQUESTING A COPY OF THE RFQ, A COPY OF THE SAME TELEGRAM SENT TO THERMO- KING WAS MAILED TO YOU ON NOVEMBER 29, 1966. THE CLOSING DATE FOR PROPOSALS WAS FIXED IN THE TELEGRAPHIC REQUEST AS DECEMBER 16, 1966.

OFFERS ON ALL OF THE ITEMS WERE RECEIVED FROM THERMO-KING. YOUR COMPANY SUBMITTED A PROPOSAL ON ITEMS 2, 5, 6, 7, 8 AND 9 ONLY. WHILE YOU WERE THE LOW OFFEROR ON ITEMS 5 AND 8, THERMO-KING WAS LOW OFFEROR ON THE BALANCE OF THE ITEMS. NEGOTIATIONS WERE CONDUCTED ORALLY WITH YOUR COMPANY AND THERMO-KING ON JANUARY 3, 1967, AND BOTH YOU AND THERMO-KING WERE ADVISED THAT NEGOTIATIONS WERE CLOSED ON THAT DATE.

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

THE RECORD SHOWS THAT A PREAWARD SURVEY FOR ITEMS 5 AND 8 ONLY WAS REQUESTED OF YOUR COMPANY ON JANUARY 27, 1967, AND THAT SUCH SURVEY WAS PERFORMED DURING THE PERIOD FEBRUARY 7 THROUGH 16, 1967. ON FEBRUARY 13, 1967, YOU OFFERED TO REDUCE YOUR PRICES ON ITEMS 2, 6 AND 9, APPARENTLY IN THE BELIEF THAT NEGOTIATIONS WERE STILL OPEN AND THAT NO AWARD HAD BEEN MADE.

YOU CONTEND NORMAL PROCEDURES WERE NOT FOLLOWED IN AWARDING ITEMS 1, 2, 3, 4, 6, 7 AND 9 TO THERMO-KING SINCE YOUR AMENDED PRICES FOR ITEMS 2, 6 AND 9 WERE $2,990.36 LESS THAN THOSE AWARDED TO THERMO KING. YOU ALSO QUESTION WHY A PREAWARD SURVEY WAS MADE ON YOUR COMPANY AND NOT ON THE THERMO-KING CORPORATION.

THE RECORD DISCLOSES THAT AWARD OF ITEMS 1, 2, 3, 4, 6, 7 AND 9 WAS MADE TO THERMO-KING AS THE LOWEST OVERALL RESPONSIVE, RESPONSIBLE OFFEROR. YOUR PROPOSAL WAS DETERMINED TO BE LOW AND RESPONSIVE FOR ITEMS 5 AND 8 AND YOUR FIRM WOULD HAVE RECEIVED AN AWARD THEREOF, SUBJECT TO A DETERMINATION OF RESPONSIBILITY, HAD THE ITEMS NOT BEEN CANCELLED BECAUSE THE REQUIREMENT THEREFOR NO LONGER EXISTED. WITH RESPECT TO YOUR ALLEGATION THAT NORMAL PROCEDURES WERE NOT FOLLOWED, THERE WAS NO REASON TO WITHHOLD AWARD TO THERMO-KING FOR ITEMS 1, 2, 3, 4, 6, 7, AND 9, SINCE ITS PRICES WERE LOWEST RECEIVED WHEN NEGOTIATIONS WERE EFFECTIVELY CLOSED ON JANUARY 3, 1967. REGARDING YOUR QUESTION AS TO WHY A PREAWARD SURVEY WAS CONDUCTED ON YOUR COMPANY AND NOT ON THERMO-KING, IT IS REPORTED THAT INFORMATION WAS PRESENTLY AVAILABLE TO THE CONTRACTING OFFICER ON WHICH TO BASE A POSITIVE DETERMINATION OF RESPONSIBILITY FOR THERMO-KING SINCE IT HAD SATISFACTORILY PRODUCED OR IS PRODUCING ITEMS FOR THE GOVERNMENT. SEE ASPR 1-905.1/B) AND 1-905.4/B). SINCE THE CAPABILITIES OF YOUR COMPANY WERE NOT KNOWN TO THE PROCUREMENT ACTIVITY, A PREAWARD SURVEY WAS REQUIRED UNDER THE PROVISIONS OF ASPR 1-905.4 TO ENABLE THE AGENCY TO DETERMINE YOUR RESPONSIBILITY AS A PROSPECTIVE CONTRACTOR.

WHILE THE REVISED PRICES SUBMITTED BY YOUR COMPANY ON FEBRUARY 13, 1967, FOR ITEMS 2, 6 AND 9 WERE LOWER THAN THOSE PREVIOUSLY SUBMITTED BY THERMO- KING, YOUR PRICE REVISIONS WERE MADE AFTER THE DATE FIXED FOR THE CLOSING OF NEGOTIATIONS. AT THE TIME NEGOTIATIONS WERE CONDUCTED ON JANUARY 3, 1967, BOTH YOUR COMPANY AND THERMO-KING WERE ADVISED THAT NEGOTIATIONS WERE CLOSED ON THAT DATE. THE CONSIDERATION OF YOUR LATE REVISED PROPOSAL WAS PRECLUDED UNDER THE RULES PRESCRIBED BY ASPR 3-506 GOVERNING LATE PROPOSALS AND MODIFICATIONS. SEE B 158136, MARCH 28, 1966; AND B-158237, APRIL 15, 1966.

ASPR 3-508.3 RELATING TO POST AWARD NOTICES TO UNSUCCESSFUL OFFERORS REQUIRES THAT SUCH NOTICE BE GIVEN PROMPTLY WITH THE FOLLOWING INFORMATION:

"/I) THE NUMBER OF PROSPECTIVE CONTRACTORS SOLICITED;

"/II) THE NUMBER OF PROPOSALS RECEIVED;

"/III) THE NAME AND ADDRESS OF EACH OFFEROR RECEIVING AN AWARD;

"/IV) THE ITEMS, QUANTITIES, AND UNIT PRICES OF EACH AWARD; PROVIDED THAT, WHERE THE NUMBER OF ITEMS AND OTHER FACTORS MAKES THE LISTING OF UNIT PRICES IMPRACTICABLE, ONLY THE TOTAL CONTRACT PRICE NEED BE FURNISHED; AND

"/V) IN GENERAL TERMS, THE REASONS WHY THE OFFEROR'S PROPOSAL WAS NOT ACCEPTED, EXCEPT WHEN THE PRICE INFORMATION IN (IV) ABOVE READILY REVEALS SUCH REASON, BUT IN NO EVENT WILL AN OFFEROR'S COST BREAKDOWN, PROFIT, OVERHEAD RATES, TRADE SECRETS, MANUFACTURING PROCESSES AND TECHNIQUES, OR OTHER CONFIDENTIAL BUSINESS INFORMATION BE DISCLOSED TO ANY OTHER OFFEROR.'

WHILE YOUR COMPANY SHOULD HAVE BEEN NOTIFIED PROMPTLY THAT AWARD HAD BEEN MADE TO THERMO-KING, SUCH INADVERTENCE, THOUGH REGRETTABLE, RELATED TO A PROCEDURAL REQUIREMENT AND THE FACT THAT SUCH REQUIREMENT WAS NOT LITERALLY FOLLOWED IS NOT FATAL TO AN OTHERWISE PROPERLY NEGOTIATED AWARD.

ACCORDINGLY, SINCE THE AWARD OF THE REQUIRED ITEMS WAS MADE TO THE LOWEST RESPONSIVE, RESPONSIBLE OFFEROR, IN A MANNER CONSISTENT WITH THE PERTINENT REGULATIONS, THERE IS NO LEGAL BASIS FOR OUR OFFICE TO QUESTION THE AWARD. THEREFORE, YOUR PROTEST IS DENIED.