B-162679, MAR. 22, 1968

B-162679: Mar 22, 1968

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TO UNIVERSITY SOUND: REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 10. THE FOLLOWING BACKGROUND INFORMATION FURNISHED TO US BY THE DEPARTMENT OF THE ARMY IS PERTINENT TO YOUR PROTEST: "A. AMC/E/28-043-65-00067 (STEP ONE) WAS ISSUED 4 DECEMBER 1964. AMENDMENT NO. 1 WAS ISSUED ON 8 DECEMBER 1964. AMENDMENT NO. 2 WAS ISSUED ON 24 DECEMBER 1964. "D. PROPOSAL SETS WERE ISSUED TO 57 FIRMS AND 10 PROPOSALS WERE RECEIVED. "E. FOUR (4) FIRMS WERE TECHNICALLY RESPONSIVE. "F. THE TECHNICAL PROPOSAL SUBMITTED BY UNIVERSITY SOUND DIVISION OF LTV WAS EVALUATED AND FOUND TECHNICALLY NON-RESPONSIVE. UNIVERSITY SOUND DIVISION OF LTV WAS NOTIFIED BY LETTER THAT ITS TECHNICAL PROPOSAL WAS TECHNICALLY NON RESPONSIVE AND THEREFORE WOULD NOT BE CONSIDERED FOR STEP 2 INVITATION FOR BID.

B-162679, MAR. 22, 1968

TO UNIVERSITY SOUND:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 10, 1967, AND TELEGRAM OF FEBRUARY 14, 1968, PROTESTING AGAINST THE AWARD OF A CONTRACT TO APPLIED ELECTRO MECHANICS, INC., UNDER REQUEST FOR PROPOSALS NO. DAAB05-67-R-1276 (RFP -1276) ISSUED BY THE UNITED STATES ARMY ELECTRONICS COMMAND, PHILADELPHIA, PENNSYLVANIA.

BEFORE CONSIDERING YOUR ALLEGATIONS REGARDING THE AWARD UNDER RFP 1276, THE FOLLOWING BACKGROUND INFORMATION FURNISHED TO US BY THE DEPARTMENT OF THE ARMY IS PERTINENT TO YOUR PROTEST:

"A. LETTER REQUEST FOR TECHNICAL PROPOSAL NO. AMC/E/28-043-65-00067 (STEP ONE) WAS ISSUED 4 DECEMBER 1964, WITH A CLOSING DATE OF 4 JANUARY 1965.

"THE RFP COVERED THE FOLLOWING ITEMS: "ITEM QUANTITY BRIEF DESCRIPTION NO.

1 16 EACH PUBLIC ADDRESS SET AN/GIR) (

2 1 LOT OPERATING, INSTALLATION AND ORGANIZATIONAL

MAINTENANCE LITERATURE FOR ITEM 1

3 1 LOT TECHNICAL INSTRUCTIONS FOR ITEM 1

4 1 EA SPARE PARTS LIST FOR ITEM 1

51 SET VISUALIZATION DATA FOR ITEM 1

6 1 EA TEST PLAN FOR ITEM 1

7 1 EA EQUIPMENT COMPLIANCE REPORT FOR ITEM 1

8 1 SET MANUFACTURER'S DRAWINGS FOR ITEM 1

"OPTION ITEMS SUBJECT TO EXERCISE IN ONE YEAR FROM AWARD DATE: "ITEM QUANTITY

BRIEF DESCRIPTION

930 EA COMPLETE SET OF DRAWINGS FOR ITEM 1 10 4 EA PROCUREMENT MODELS - IDENTICAL TO ITEM 1, SERVICE

TEST MODELS 11A 5 EA QUARTERLY TYPE TECHNICAL REPORTS 11B 1 EA

FINAL TYPE TECHNICAL REPORT

"B. AMENDMENT NO. 1 WAS ISSUED ON 8 DECEMBER 1964.

AMENDED PORTION OF OPTION NOTICE IN EXHIBIT -C.-

"C. AMENDMENT NO. 2 WAS ISSUED ON 24 DECEMBER 1964.

EXTENDED CLOSING DATE THROUGH 11 JANUARY 1965.

"D. PROPOSAL SETS WERE ISSUED TO 57 FIRMS AND 10 PROPOSALS WERE RECEIVED.

"E. FOUR (4) FIRMS WERE TECHNICALLY RESPONSIVE.

"F. THE TECHNICAL PROPOSAL SUBMITTED BY UNIVERSITY SOUND DIVISION OF LTV WAS EVALUATED AND FOUND TECHNICALLY NON-RESPONSIVE.

"G. THE CONTRACTING OFFICER CONCURRED WITH THE TECHNICAL EVALUATION.

"H. ON 11 FEBRUARY 1965, UNIVERSITY SOUND DIVISION OF LTV WAS NOTIFIED BY LETTER THAT ITS TECHNICAL PROPOSAL WAS TECHNICALLY NON RESPONSIVE AND THEREFORE WOULD NOT BE CONSIDERED FOR STEP 2 INVITATION FOR BID.

"I. STEP 2 TO IFB AMC/E/28-043-65-00067 WAS ISSUED ON 17 MARCH 1965, WITH A FORMAL OPENING SCHEDULED AT 1300 HOURS 31 MARCH 1965.

"J. AUDIO EQUIPMENT COMPANY SUBMITTED THE LOWEST RESPONSIBLE BID. HOWEVER, THEY QUALIFIED THEIR BID BY SPECIFYING A SPECIFIC BATTERY TYPE.

"K. BY LETTER OF 7 MAY 1965, UNIVERSITY SOUND DIVISION OF LTV PROTESTED THE REJECTION OF ITS TECHNICAL PROPOSAL AND REQUESTED THAT WE RECONSIDER ITS TECHNICAL PROPOSAL.

"L. COPY OF THE 7 MAY 1965 LETTER WAS SUBMITTED TO THE COGNIZANT ECOM LABORATORY, WITH THE REQUEST ITS PROPOSAL BE RE-EVALUATED. ON 27 MAY 1965, AFTER A THOROUGH RE-EVALUATION, THE TECHNICAL ENGINEERING ELEMENTS OF ECOM REAFFIRMED THEIR FINDINGS, THAT THE PROPOSAL SUBMITTED BY UNIVERSITY SOUND DIVISION OF LTV WAS UNACCEPTABLE.

"M. ON 21 MAY 1965 AN INFORMAL DISCUSSION WAS HELD AT FORT MONMOUTH BETWEEN CONTRACTING PERSONNEL AND THE LOCAL REPRESENTATIVE FOR LTV. THE 7 MAY 1965 PROTEST LETTER WAS DISCUSSED AND THE CONTRACTOR'S REPRESENTATIVE WAS BRIEFED ON OUR TECHNICAL FINDINGS.

"N. ON 28 MAY 1965 A CONFERENCE WAS HELD AT FORT MONMOUTH BETWEEN CONTRACTING AND TECHNICAL PERSONNEL OF ECOM AND THE TECHNICAL PERSONNEL OF LTV AND THEIR LOCAL REPRESENTATIVE. THE CONTRACTOR WAS APPRISED OF THE DEFICIENT AREAS IN ITS PROPOSAL WHICH MADE ITS PROPOSAL NON-RESPONSIVE.

"O. BY LETTER OF 3 JUNE 1965, UNIVERSITY SOUND DIVISION OF LTV CONTENDED THAT, AMONG OTHER THINGS, (A) ECOM'S EVALUATION WAS NOT DETAILED ENOUGH TO DETERMINE ITS APPROPRIATE MERITS AND DEMERITS.

"P. ON 7 JUNE 1965 THE ECOM LABORATORY ENGINEERS WERE REQUESTED TO FURNISH COMMENTS AS TO WHETHER OR NOT AUDIO EQUIPMENT CO.'S BID QUALIFICATION REGARDING THE BATTERY TYPE WAS ACCEPTABLE, SINCE THE PRESENT BATTERY SPECIFICATION INDICATES LITTLE DEFINITION. THE DIRECTOR OF THE ENGINEERING DEVELOPMENT TECHNICAL AREA OF ECOM LABORATORY FURNISHED THE FOLLOWING RECOMMENDATIONS:

"-SINCE THE LOWEST BIDDER ON SUBJECT PROCUREMENT HAS QUALIFIED HIS BID WITH REGARD TO THE BATTERY TO BE FURNISHED, AND IN VIEW OF THE FACT THAT DIFFICULTY WOULD BE EXPERIENCED IN DISQUALIFYING THIS BIDDER DUE TO A POORLY DEFINED BATTERY REQUIREMENT IN THE GOVERNING SPECIFICATIONS, IT IS RECOMMENDED THAT PR AND C 65-ELN/P-6408 BE CANCELLED. FROM THE TECHNICAL VIEWPOINT, THIS IS CONSIDERED THE BEST COURSE OF ACTION TO FOLLOW, RATHER THAN RISK THE DEVELOPMENT OF AN INFERIOR BATTERY POWER SUPPLY.-

"Q. THE PROCUREMENT WAS CANCELED ON 7 JUNE 1965. TWX WAS DISPATCHED TO THE COMMERCE BUSINESS DAILY AND TO EACH OF THE TEN SOURCES WHO RESPONDED TO STEP 1, ADVISING THEM OF THE CANCELLATION.'

IT IS ALSO REPORTED THAT:

"LTV UNIVERSITY SOUND REFUSED TO ACCEPT THE FACT THAT ITS PROPOSAL, EVEN AFTER A RE-EVALUATION OF ITS TECHNICAL PROPOSAL, DID NOT MEET THE CRITERIA SET FORTH IN THE SOLICITATION, THEREFORE MAKING ITS PROPOSAL TECHNICALLY NON-RESPONSIVE. ITS ALLEGATIONS THAT ITS PROPOSAL WAS NOT EVEN EVALUATED- IS WITHOUT BASIS AND INCONSISTENT WITH ITS STATEMENT IN ITS 3 JUNE 1965 LETTER TO ECOM AND THE STATEMENT IN ITS 10 OCTOBER 1967 LETTER TO THE GENERAL ACCOUNTING OFFICE.

"IN VIEW OF THE LOW BIDDER'S QUALIFICATION IN HIS BID TO SUPPLY A SPECIFIC BATTERY TYPE, AND THE FACT THAT ELECTRONICS COMMAND TECHNICAL REQUIREMENT NO. SCL-4667 DATED 16 JUNE 1964 CONTAINED LITTLE DEFINITION OF THE POWER SUPPLY, THERE WAS A GREAT RISK THAT DEVELOPMENT OF AN INFERIOR BATTERY POWER SUPPLY WOULD RESULT. WITH THIS OF PRIME CONCERN, AND THE FACT THAT DIFFICULTY WOULD BE EXPERIENCED IN DISQUALIFYING THE LOW BIDDER, IT WAS CONSIDERED PRUDENT TO CANCEL THE PROCUREMENT AND REVISE THE TECHNICAL REQUIREMENT IN THE AREA OF POWER SUPPLY.

"* * * IT SHOULD BE NOTED THAT IN THE INTERIM BETWEEN THE CANCELLATION OF RFP AMC/E) 28-043-65-00067 AND THE SOLICITATION UNDER DAAB05-67-R-1276, THERE WERE NO PROCUREMENTS AWARDED FOR THE GIH-3 EQUIPMENT. UNIVERSITY SOUND DIVISION OF LTV PERSISTENTLY RELATES THE AN/UIN-5 EQUIPMENT WITH THE GIH-3. THE GIH-3 IS A MORE REFINED TYPE OF PROCUREMENT THAN THE UIH-5 IN THAT IT HAS PORTABILITY FEATURES. FURTHERMORE, LTV UNIVERSITY SOUND WAS ON THE LIST OF SOURCES TO BE SOLICITED AND WAS SOLICITED UNDER SOLICITATION DAAB05-67-R-1276.'

YOU ADVISE THAT AFTER INVITATION -00067 WAS CANCELED, YOU SUBMITTED AN UNSOLICITED PROPOSAL APPARENTLY FOR THE EQUIPMENT DESCRIBED THEREIN, BUT THAT SOLE-SOURCE NEGOTIATIONS WERE CONDUCTED WITH APPLIED ELECTRO MECHANICS, INC., WHICH CULMINATED IN THE AWARD OF CONTRACT NO. DA26-039- AMC-07320 (E). IN THIS REGARD, YOU CONTEND THAT:

"* * * THOUGH THE EQUIPMENT RESULTING FROM THIS CONTRACT WAS AN IMPROVEMENT OVER EXISTING EQUIPMENT IT STILL DID NOT MEET EITHER THE SPECIFICATIONS CALLED OUT IN AMC/E) 23-043-65-00067 OR THE SPECIFICATIONS WHICH WE OFFERED IN UNIVERSITY SOUND'S UNSOLICITED PROPOSAL * * *.'

WE ARE ADVISED THAT THE ABOVE-CITED CONTRACT WAS AWARDED UNDER A DIFFERENT SOLICITATION--RFP NO. AMC/E/-36-039-66-10225-4--COVERING SIXTY- SEVEN PUBLIC ADDRESS SETS AN/UIH-5 AND TWENTY-TWO 1,000-WATT AIRBORNE LOUDSPEAKER SYSTEMS AND ANCILLARY ITEMS. THIS SOLICITATION WAS FOR A STANDARDIZED COMMERCIAL-TYPE SYSTEM, THE MAJOR PART OF WHICH WAS PROPRIETARY TO APPLIED ELECTRO MECHANICS. SINCE THIS PROCUREMENT CARRIED AN URGENT SOUTHEAST ASIA PRIORITY, THE CONTRACTING OFFICER DETERMINED, PURSUANT TO 10 U.S.C. 2304 (A) (2) AND ASPR 3-202.2 (VL), TO NEGOTIATE A CONTRACT COLELY WITH APPLIED ELECTRO MECHANICS ON A PUBLIC EXIGENCY BASIS. UNDER 10 U.S.C. 2310 (A), THE DETERMINATION THUS MADE WAS FINAL AS A MATTER OF LAW. FROM THE FOREGOING, IT APPEARS THAT THIS PROCUREMENT WAS NOT AS YOU CONTENDED IN YOUR LETTER OF OCTOBER 10, 1967.

RETURNING TO THE CURRENT RFP, YOU STATE THAT YOU PREPARED YOUR PROPOSAL ON A FIRM FIXED BASIS EVEN THOUGH YOU BELIEVE THAT A COST PLUSOR DEVELOPMENT-TYPE CONTRACT WAS MORE APPROPRIATE. HOWEVER, THE CONTRACTING OFFICER BELIEVED THAT A FIRM FIXED-PRICE CONTRACT WAS MOST APPROPRIATE SINCE A NUMBER OF REPUTABLE MANUFACTURERS COULD BE SOLICITED AND COMPETITIVE PROPOSALS COULD BE ANTICIPATED. IN THIS REGARD, THE HEAD OF THE AGENCY OR HIS DESIGNEE IS AUTHORIZED UNDER 10 U.S.C. 2306 (A) TO MAKE ANY KIND OF CONTRACT THAT HE CONSIDERS WILL PROMOTE THE BEST INTERESTS OF THE UNITED STATES.

RFP -1276, ISSUED ON MARCH 10, 1967, REQUESTED OFFERORS TO QUOTE ON RANGE QUANTITIES OF THE AN/GIH-3) ( PUBLIC ADDRESS SET, LOUDSPEAKERS AIRCRAFT MOUNTING KIT, WITH CERTAIN ANCILLARY ITEMS. PROPOSALS WERE TO BE SUBMITTED BY 5 P.M., E.S.T., APRIL 20, 1967. THE RFP CONTAINED THE PROVISIONS PRESCRIBED BY PARAGRAPH 3-506 OF THE ARMED SERVICES PROCUREMENT REGULATION REGARDING LATE PROPOSALS. UNDER THESE PROVISIONS A LATE MODIFICATION WILL NOT BE CONSIDERED IF RECEIVED ,AFTER THE CLOSE OF BUSINESS ON THE DATE SET FOR RECEIPT THEREOF.' OFFERORS WERE ADVISED BY A NOTICE ON PAGE 5 OF THE RFP AS FOLLOWS:

"NOTICE TO OFFERORS - OFFERORS ARE HEREBY NOTIFIED THAT BARGAINING WILL BE KEPT TO THE MINIMUM REQUIRED TO ESTABLISH A FAIR AND REASONABLE PRICE. THERE IS A POSSIBILITY THAT THE AWARD MAY BE MADE WITHOUT DISCUSSION OF THE INITIAL OFFERS WITH OFFERORS. THEREFORE, PROPOSALS SHOULD BE SUBMITTED OFFERING THE MOST FAVORABLE TERMS AND LOWEST PRICE, INITIALLY.'

DUE TO THE URGENT DELIVERY SCHEDULE (PRIORITY DESIGNATOR 02) AN ENGINEERING APPRAISAL WAS MADE AND 10 FIRMS WERE DETERMINED TO HAVE THE TECHNICAL KNOW-HOW TO PRODUCE THE ITEMS. IN RESPONSE TO THE SUBJECT SOLICITATION, FOUR PROPOSALS WERE RECEIVED ON APRIL 20, 1967, AS FOLLOWS:

DUE TO THE PRICE DIFFERENTIAL OF NEARLY $300,000 BETWEEN APPLIED ELECTRO MECHANICS' OFFER AND THAT OF UNIVERSITY SOUND ONLY APPLIED'S PROPOSAL WAS FORWARDED TO FORT MONMOUTH FOR EVALUATION. THIS DETERMINATION WAS MADE ON APRIL 25, 1967, AND INCLUDED THE COMMENT THAT:

"EXPERIENCE WITH APPLIED ELECTRO MECHANICS, INC., IN PROCUREMENTS OF SIMILAR HIGH POWER PUBLIC ADDRESS EQUIPMENTS NOW IN VIETNAM AND KOREA HAS BEEN HIGHLY FAVORABLE WITH REGARD TO SCHEDULES AND QUALITY OF PRODUCT DELIVERED.'

THE PROPOSALS FROM OFFERORS NOS. 2 AND 4 WERE NOT CONSIDERED SINCE THEY FAILED TO SUBMIT TECHNICAL INFORMATION WITH THEIR OFFERS. THEREAFTER, ON MAY 11, 1967, 21 DAYS AFTER THE CLOSING DATE SET FOR RECEIPT OF PROPOSALS AND SUBSEQUENT TO APPROVAL OF APPLIED ELECTRO MECHANICS' PROPOSAL, UNIVERSITY SOUND'S REPRESENTATIVE ADVISED THAT HE WAS SUBMITTING A REDUCED PRICE PROPOSAL. ON MAY 12 AND 19, 1967, YOUR FIRM FORWARDED INFORMATION TO THE PROCURING OFFICE ALLEGING MISTAKE IN YOUR ORIGINAL COST CALCULATIONS AND OFFERED SUCCESSIVE REDUCTIONS OF PRICE TO $576,463, APPROXIMATELY $36,000 LESS THAN APPLIED'S PROPOSAL. HOWEVER, THE CONTRACTING OFFICER REGARDED THE PROPOSAL OF APPLIED ELECTRO MECHANICS TO BE ACCEPTABLE FROM BOTH PRICE AND TECHNICAL STANDPOINTS AND TREATED YOUR COST REDUCTIONS AS LATE UNACCEPTABLE MODIFICATIONS AND DETERMINED NOT TO NEGOTIATE WITH YOUR FIRM ON THE BASIS OF YOUR COST REVISIONS. THE AWARD WAS MADE TO APPLIED ELECTRO MECHANICS ON MAY 24, 1967, AS THE LOWEST RESPONSIVE, RESPONSIBLE OFFEROR.

HAVING REGARD FOR THE URGENCY OF THE PROCUREMENT WHICH, IN THE OPINION OF THE CONTRACTING OFFICER, WAS THE OVERRIDING CONSIDERATION, IT WAS BELIEVED THAT THE BEST INTERESTS OF THE GOVERNMENT REQUIRED AN AWARD TO APPLIED ELECTRO MECHANICS WHOSE LOW OFFER GAVE THE GREATEST ASSURANCE OF EXPEDITIOUS DELIVERY AND QUALITY PRODUCTION. THE AWARD ACTION TAKEN HERE WAS SIMILAR TO THAT WHICH WE CONSIDERED IN B-158136, MARCH 28, 1966. HELD IN THAT DECISION THAT:

"IN THIS CONNECTION, IT IS NOTED THAT THE BASIC AUTHORITY TO AWARD MILITARY NEGOTIATED PROCUREMENTS WITHOUT WRITTEN OR ORAL DISCUSSIONS AFTER SUBMISSION OF INITIAL PROPOSALS STEMS FROM 10 U.S.C. 2304 (G). THEREIN, IN PERTINENT PART, IT IS PROVIDED THAT:

"-* * * WRITTEN OR ORAL DISCUSSIONS NEED NOT BE APPLIED TO PROCURMENTS * * * WHERE IT CAN BE CLEARLY DEMONSTRATED FROM THE EXISTENCE OF ADEQUATE COMPETITION OR ACCURATE PRIOR COST EXPERIENCE WITH THE PRODUCT, THAT ACCEPTANCE OF AN INITIAL PROPOSAL WITHOUT DISCUSSIONS WOULD RESULT IN FAIR AND REASONABLE PRICES AND WHERE THE REQUEST FOR PROPOSALS NOTIFIES ALL OFFERORS OF THE POSSIBILITY THAT AWARD MAY BE MADE WITHOUT DISCUSSION.-

THE CONTRACTING AGENCY HAS INDICATED THAT THE PROPOSAL RECEIVED FROM VAPOR WAS FAIR AND REASONABLE. IN VIEW OF THIS FACT AND THE NOTIFICATION IN THE RFP THAT AWARD MIGHT BE MADE WITHOUT DISCUSSIONS AFTER INITIAL PROPOSALS WERE SENT IN, IT CANNOT BE CONTENDED THAT UNDER 10 U.S.C. 2304 (G) THE AWARD OF A CONTRACT WITHOUT FURTHER NEGOTIATIONS WAS NOT WITHIN THE AUTHORITY OF THE CONTRACTING OFFICER. "NEVERTHELESS, WHETHER YOUR REVISED PROPOSAL WAS LATE OR NOT, YOU IMPLY IT MAY STILL HAVE BEEN IN THE BEST INTEREST OF THE GOVERNMENT TO HAVE CONSIDERED IT. WHILE SUCH ACTION MIGHT HAVE RESULTED IN A SAVING, IT MUST BE KEPT IN MIND THAT PRICE IS ONLY ONE FACTOR USED IN DETERMINING WHAT IS IN THE BEST INTEREST OF THE GOVERNMENT IN NEGOTIATED PROCUREMENTS. THE CONTRACTING OFFICER HAS INDICATED THAT THE OVERRIDING CONSIDERATION IN DECIDING NOT TO NEGOTIATE AFTER INITIAL PROPOSALS WERE SUBMITTED WAS THE URGENCY OF THE PROCUREMENT. HAD YOUR LATE MODIFICATION BEEN TAKEN INTO CONSIDERATION IN MAKING AN AWARD, THE PROVISIONS OF ASPR 3-805.1 WOULD THEN HAVE REQUIRED THAT ALL OFFERORS BE GIVEN AN EQUITABLE OPPORTUNITY TO SUBMIT REVISED PROPOSALS. THIS, OF COURSE, WOULD HAVE DELAYED AWARD AND DELIVERY OF INVERTERS. UNDER THE CIRCUMSTANCES, THE ADMONITION IN THE RFP THAT AWARD MIGHT BE MADE WITHOUT FURTHER NEGOTIATIONS WAS ADEQUATE WARNING TO YOUR COMPANY TO SUBMIT ITS LOWEST PROPOSAL INITIALLY, AND WE ARE UNABLE TO SAY THAT THE ACTION TAKEN BY THE CONTRACTING OFFICER IN REJECTING YOUR REVISED PROPOSAL WAS CONTRARY TO LAW OR REGULATION OR THAT IT WAS NOT IN THE BEST INTEREST OF THE GOVERNMENT.'

WE BELIEVE THAT RELIANCE UPON THE ABOVE-QUOTED DECISION WAS PROPER UNDER THE CIRCUMSTANCES OF THIS PROCUREMENT. IT WAS UNFORTUNATE THAT THE GOVERNMENT WAS UNABLE TO TAKE ADVANTAGE OF THE PRICE REVISIONS OFFERED BY YOUR FIRM. HOWEVER, IN VIEW OF THE URGENT DELIVERY REQUIREMENTS PRESENT HERE AND THE SPECIFIC ADMONITIONS TO OFFERORS CONTAINED IN THE RFP, THIS WAS NOT POSSIBLE.

SUBSEQUENT TO THE AWARD MADE UNDER THIS RFP, WE CONSIDERED IN B 161782 DATED NOVEMBER 21, 1967, 47 COMP. GEN. ----, A PROTEST AGAINST THE FAILURE TO CONSIDER A PRICE REVISION RECEIVED AFTER THE CLOSING DATE FOR INITIAL RECEIPT OF PROPOSALS. IT IS TO BE NOTED THAT IN THE NOVEMBER 21 DECISION, THERE WAS NOT INVOLVED THE CONSIDERATION OF EXTREME URGENCY AS IS HERE INVOLVED. THAT DECISION HELD, IN PERTINENT PART:

"* * * WHILE THE PROVISIONS OF ASPR 3-506 OPERATE TO PRECLUDE, IN THE SPECIFIED CIRCUMSTANCES, ACCEPTANCE OF A LATE OFFER OR MODIFICATION AS SUCH, THEY DO NOT, AND WERE NEVER INTENDED TO, PRECLUDE THE OPENING UP OF NEGOTIATIONS WITH ALL OFFERORS COMPETITIVELY SITUATED UPON THE RECEIPT OF A LATE MODIFICATION TO A TIMELY OFFER WHICH FAIRLY INDICATES THAT SUCH NEGOTIATIONS WOULD PROVE TO BE HIGHLY ADVANTAGEOUS TO THE GOVERNMENT. THAT CONNECTION, IT SHOULD BE NOTED THAT THE PROVISIONS OF ASPR 3-506 HAVE NO GREATER WEIGHT OR FORCE THAN THOSE OF ASPR 3-805.1. NEGOTIATION PROCEDURES, UNLIKE THOSE REQUIRED FOR FORMAL ADVERTISING, ARE DESIGNED TO BE FLEXIBLE AND INFORMAL. THESE PROCEDURES PROPERLY PERMIT THE CONTRACTING OFFICER TO DO THINGS IN THE AWARDING OF A NEGOTIATED CONTRACT THAT WOULD BE A RADICAL VIOLATION OF THE LAW IF THE PROCUREMENT WERE BEING ACCOMPLISHED BY FORMAL ADVERTISING. * * *"

IN THIS REGARD, HEADQUARTERS UNITED STATES ARMY MATERIEL COMMAND HAS ADVISED US THAT:

"* * * IN THE LIGHT OF THE CITED DECISION THIS HEADQUARTERS CONCEDES THAT IT MIGHT HAVE BEEN BETTER PROCUREMENT PROCEDURE HAD THE CONTRACTING OFFICER OPENED NEGOTIATIONS WITH BOTH APPLIED ELECTRO MECHANICS AND UNIVERSITY SOUND UPON RECEIPT OF THE REDUCTIONS IN PRICE TO ASSURE THE MOST ADVANTAGEOUS CONTRACT FOR THE GOVERNMENT. NEVERTHELESS, IT IS CONSIDERED THAT THE CONTRACTING OFFICER ACTED IN GOOD FAITH IN MAKING THE AWARD WITHOUT NEGOTIATION, PARTICULARLY SINCE HE WAS IMPRESSED BY THE FACT THAT THE EQUIPMENT WAS URGENTLY REQUIRED AND FELT IT WAS IMPERATIVE THAT AWARD BE MADE WITHOUT FURTHER DELAY. IN ANY EVENT, IT WOULD NOT NOW BE IN THE BEST INTERESTS OF THE GOVERNMENT TO CANCEL THE AWARD. THE ORIGINAL DELIVERY SCHEDULE HAS BEEN ACCELERATED BY SIX (6) MONTHS PROVIDING FOR COMPLETION BY SEPTEMBER 1968. IN ADDITION, CONTRACTOR PERFORMANCE HAS PROGRESSED AS FOLLOWS: (I) ALL PURCHASE ORDERS PLACED; (II) APPROXIMATELY 25 PERCENT OF MATERIAL RECEIVED; (III) 8 EACH GLH-3 IN PROCESS OF COMPLETION FOR TEST; (V) ALL NEW TOOLING IN HOUSE; (VI) PRODUCTION ON MAKE ITEMS' IS 20 PERCENT COMPLETE; (VII) DRAWINGS 90 PERCENT COMPLETE; AND (VIII) SOFTWARE REQUIREMENTS IN PROCESS. SINCE THE DATE THIS INFORMATION WAS FURNISHED IT IS PROBABLE THAT THE CONTRACTOR HAS PROGRESSED EVEN FURTHER.'

WE HAVE CAREFULLY CONSIDERED THE OTHER ARGUMENTS ADVANCED BY YOU BUT WE FIND NO BASIS TO DISTURB THE ACTIONS TAKEN BY THE PROCUREMENT ACTIVITY. MOREOVER, THE NEGOTIATION OF THE CONTRACT WITH APPLIED ELECTRO MECHANICS WAS AUTHORIZED UNDER THE PUBLIC EXIGENCY EXCEPTION TO FORMAL ADVERTISING PURSUANT TO 10 U.S.C. 2304 (A) (2) AND ASPR 3 202.2 (VI). UNDER 10 U.S.C. 2310 (A), THE DETERMINATION TO NEGOTIATE A CONTRACT ON ACCOUNT OF "PUBLIC EXIGENCY" IS FINAL AS A MATTER OF LAW.