B-164242, JUNE 25, 1968, 47 COMP. GEN. 778

B-164242: Jun 25, 1968

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

WHERE A PARTIAL EMERGENCY AWARD WAS MADE TO THE SOLE SOURCE MANUFACTURER OF VOLTMETERS PENDING EVALUATION OF AN "EQUAL" ITEM OFFERED AT A LOWER PRICE. WITH NOTICE AND OPPORTUNITY TO THE ORIGINAL MANUFACTURER TO COMPETE IS REQUIRED BY PARAGRAPHS 3-805.1 (B) AND (E) OF THE ARMED SERVICES PROCUREMENT REGULATION. AN AWARD TO THE OFFEROR OF THE "EQUAL" ITEM ON A QUOTATION REVISED TO INCLUDE PROVISIONING DATA AND PUBLICATIONS WITHOUT CHARGE IS PROHIBITED BY PARAGRAPH 3-805.1 (A). 1968: REFERENCE IS MADE TO A LETTER DATED JUNE 10. REQUEST FOR QUOTATIONS (RFQ) N00383-67-503466Q WAS ISSUED BY ASO FOR 71 DIGITAL VOLTMETERS DESCRIBED AS CIMRON DIVISION PART NUMBER 7300A-631. THE PROCUREMENT WAS SYNOPSIZED IN THE COMMERCE BUSINESS DAILY FOR SUBCONTRACTING PURPOSES.

B-164242, JUNE 25, 1968, 47 COMP. GEN. 778

CONTRACTS - NEGOTIATION - LIMITATION ON NEGOTIATION - PROPRIETY UNDER REQUEST FOR QUOTATIONS (RFQ) TRANSFORMED FROM A NONCOMPETITIVE TO A COMPETITIVE PROCUREMENT, WHERE A PARTIAL EMERGENCY AWARD WAS MADE TO THE SOLE SOURCE MANUFACTURER OF VOLTMETERS PENDING EVALUATION OF AN "EQUAL" ITEM OFFERED AT A LOWER PRICE, THE DECISION TO CONSIDER THE EQUAL" PRODUCT HAVING RELAXED THE SPECIFICATIONS, AMENDMENT OF THE RFQ, WITH NOTICE AND OPPORTUNITY TO THE ORIGINAL MANUFACTURER TO COMPETE IS REQUIRED BY PARAGRAPHS 3-805.1 (B) AND (E) OF THE ARMED SERVICES PROCUREMENT REGULATION. THE FAILURE TO GIVE THE ORIGINAL MANUFACTURER AN "EQUITABLE OPPORTUNITY TO NEGOTIATE" ON THE BALANCE OF THE PROCUREMENT NOT JUSTIFIED UNDER PARAGRAPH 3-805.1A (V), IN VIEW OF THE DETAILED PRESENTATION OF THE COMPETING EQUIPMENT, AN AWARD TO THE OFFEROR OF THE "EQUAL" ITEM ON A QUOTATION REVISED TO INCLUDE PROVISIONING DATA AND PUBLICATIONS WITHOUT CHARGE IS PROHIBITED BY PARAGRAPH 3-805.1 (A).

TO THE SECRETARY OF THE NAVY, JUNE 25, 1968:

REFERENCE IS MADE TO A LETTER DATED JUNE 10, 1968, FROM THE DEPUTY COMMANDER, PURCHASING, NAVAL SUPPLY SYSTEMS COMMAND, FURNISHING A REPORT ON THE PROTEST OF CIMRON DIVISION, LEAR SIEGLER, INC., CONCERNING THE FAILURE OF THE AVIATION SUPPLY OFFICE (ASO), PHILADELPHIA, TO NEGOTIATE WITH THAT FIRM FOR PROCUREMENT OF 37 DIGITAL VOLTMETERS.

ON MARCH 31, 1967, REQUEST FOR QUOTATIONS (RFQ) N00383-67-503466Q WAS ISSUED BY ASO FOR 71 DIGITAL VOLTMETERS DESCRIBED AS CIMRON DIVISION PART NUMBER 7300A-631. THE PROCUREMENT WAS SYNOPSIZED IN THE COMMERCE BUSINESS DAILY FOR SUBCONTRACTING PURPOSES, AND IN RESPONSE THERETO A COMPETITOR OF CIMRON OFFERED TO SUPPLY THE GOVERNMENT WITH EQUIPMENT MANUFACTURED BY THE COMPETITOR WHICH IT ALLEGED WAS EQUAL TO THE CIMRON UNIT SPECIFIED. TECHNICAL DATA WAS FURNISHED BY THE COMPETITOR TO SUPPORT ITS POSITION. SUCH DATA WAS FORWARDED TO COGNIZANT TECHNICAL PERSONNEL FOR A DECISION REGARDING ITS EQUIVALENCY TO THE CIMRON UNIT AND, SINCE IT WAS FELT THAT SUCH A DECISION COULD BE REACHED ON A TIMELY BASIS, THE PROCUREMENT WAS TEMPORARILY SUSPENDED. HOWEVER, BY NOVEMBER 1967 INFORMATION WAS STILL UNAVAILABLE AS TO THE ACCEPTABILITY OF THE COMPETITIOR'S EQUIPMENT AND A SAMPLE UNIT WAS REQUESTED FROM THE CORPORATION FOR TESTING PURPOSES. THAT TIME EMERGENCY FLEET REQUIREMENTS FOR 34 UNITS DICTATED THE MAKING OF A PARTIAL AWARD TO CIMRON WHICH WAS EFFECTED ON DECEMBER 19, 1967. THE CONTRACTING OFFICER STATES THAT ON MARCH 18, 1968, THE COMPETITOR'S EQUIPMENT WAS APPROVED BUT THAT A REQUIREMENT HAD ARISEN FOR CERTAIN PROVISIONING DATA AND PUBLICATIONS CONSIDERED TO BE ESSENTIAL TO THE MAINTENANCE AND SUPPORT OF ITS EQUIPMENT IN THE FIELD. THE COMPETITOR THEREAFTER OFFERED TO FURNISH THESE MATERIALS AT NO COST TO THE GOVERNMENT.

IT IS THE POSITION OF THE CONTRACTING OFFICER THAT, PURSUANT TO THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) 3-805.1 (A) (V), A CONTRACT MAY BE LET TO THE COMPETITOR FOR THE ADDITIONAL 37 UNITS WITHOUT AFFORDING CIMRON AN OPPORTUNITY TO NEGOTIATE. THE REGULATION PROVIDES, IN PERTINENT PART, AS FOLLOWS:

3-805 SELECTION OF OFFERORS FOR NEGOTIATION AND AWARD.

3-805.1 GENERAL.

(A) 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 (INCLUDING TECHNICAL QUALITY WHERE TECHNICAL PROPOSALS ARE REQUESTED) CONSIDERED, EXCEPT THAT THIS REQUIREMENT NEED NOT NECESSARILY BE APPLIED TO:

(V) PROCUREMENTS IN WHICH IT CAN BE CLEARLY DEMONSTRATED FROM THE EXISTENCE OF ADEQUATE COMPETITION OR ACCURATE PRIOR COST EXPERIENCE WITH THE PRODUCT OR SERVICE THAT ACCEPTANCE OF THE MOST FAVORABLE INITIAL PROPOSAL WITHOUT DISCUSSION WOULD RESULT IN A FAIR AND REASONABLE PRICE. (PROVIDED, HOWEVER, THAT IN SUCH PROCUREMENTS, THE REQUEST FOR PROPOSALS SHALL NOTIFY ALL OFFERORS OF THE POSSIBILITY THAT AWARD MAY BE MADE WITHOUT DISCUSSION OF PROPOSALS RECEIVED AND HENCE, THAT PROPOSALS SHOULD BE SUBMITTED INTIALLY ON THE MOST FAVORABLE TERMS FROM A PRICE AND TECHNICAL STANDPOINT WHICH THE OFFEROR CAN SUBMIT TO THE GOVERNMENT. ANY CASE WHERE THERE IS UNCERTAINTY AS TO THE PRICING OR TECHNICAL ASPECTS OF ANY PROPOSALS, THE CONTRACTING OFFICER SHALL NOT MAKE AWARD WITHOUT FURTHER EXPLORATION AND DISCUSSION PRIOR TO AWARD. * * *.

(B) * * * WHENEVER NEGOTIATIONS ARE CONDUCTED WITH SEVERAL OFFERORS, WHILE SUCH NEGOTIATIONS MAY BE CONDUCTED SUCCESSIVELY, ALL OFFERORS SELECTED TO PARTICIPATE IN SUCH NEGOTIATIONS (SEE (A) ABOVE) SHALL BE OFFERED AN EQUITABLE OPPORTUNITY TO SUBMIT SUCH PRICE, TECHNICAL, OR OTHER REVISIONS IN THEIR PROPOSALS AS MAY RESULT FROM THE NEGOTIATIONS. * * *.

(E) WHEN, DURING NEGOTIATIONS, A SUBSTANTIAL CHANGE OCCURS IN THE GOVERNMENT'S REQUIREMENTS OR A DECISION IS REACHED TO RELAX, INCREASE OR OTHERWISE MODIFY THE SCOPE OF THE WORK OR STATEMENT OF REQUIREMENTS, SUCH CHANGE OR MODIFICATION SHALL BE MADE IN WRITING AS AN AMENDMENT TO THE REQUEST FOR PROPOSAL OR REQUEST FOR QUOTATIONS, AND A COPY SHALL BE FURNISHED TO EACH PROSPECTIVE CONTRACTORS. SEE 3 505 AND 3-507. ORAL ADVICE OF CHANGE OR MODIFICATION MAY BE GIVEN IF (I) THE CHANGES INVOLVED ARE NOT COMPLEX IN NATURE, (II) ALL PROSPECTIVE CONTRACTORS ARE NOTIFIED SIMULTANEOUSLY (PREFERABLY BY A MEETING WITH THE CONTRACTING OFFICER), AND (III) A RECORD IS MADE OF THE ORAL ADVICE GIVEN. IN SUCH INSTANCES, HOWEVER, THE ORAL ADVICE SHOULD BE PROMPTLY FOLLOWED BY A WRITTEN AMENDMENT VERIFYING SUCH ORAL ADVICE PREVIOUSLY GIVEN. THE DISSEMINATION OF ORAL ADVICE OF CHANGES OR MODIFICATIONS SEPARATELY TO EACH PROSPECTIVE BIDDER DURING INDIVIDUAL NEGOTIATION SESSIONS SHOULD BE AVOIDED UNLESS PRECEDED, ACCOMPANIED, OR IMMEDIATELY FOLLOWED BY A WRITTEN AMENDMENT TO THE REQUEST FOR PROPOSAL OR REQUEST FOR QUOTATIONS EMBODYING SUCH CHANGES OR MODIFICATIONS.

FROM THE FOREGOING IT IS APPARENT THAT THE RFQ SOLICITED A QUOTATION FROM CIMRON FOR AN ITEM MANUFACTURED ONLY BY CIMRON, AND IT MUST THEREFORE BE ASSUMED CIMRON'S QUOTATION WAS SUBMITTED IN THE BELIEF THAT ONLY ITEMS MANUFACTURED BY CIMRON WOULD BE ACCEPTABLE AND THAT THE PROCUREMENT WAS THEREFORE NONCOMPETITIVE. IT FOLLOWS THAT THE DECISION TO CONSIDER QUOTATIONS BASED UPON ITEMS DETERMINED TO BE EQUAL TO THOSE MANUFACTURED BY CIMRON OPERATED NOT ONLY TO RELAX THE SPECIFICATION REQUIREMENTS BUT ALSO TO TRANSFORM THE PROCUREMENT FROM A NONCOMPETITIVE TO A COMPETITIVE ONE. IN SUCH CIRCUMSTANCES, IT IS OUR OPINION THAT THE PROVISIONS OF ASPR 3-805.1 (B) AND (E) REQUIRE AMENDMENT OF THE RFQ, NOTICE OF THE AMENDMENT TO THE SUPPLIER INITIALLY SOLICITED, AND AN EQUITABLE OPPORTUNITY FOR THE SUPPLIER TO AMEND HIS QUOTATION TO REFLECT SUCH CHANGES AS HE MAY CONSIDER APPROPRIATE IN THE LIGHT OF THE CHANGES ACCOMPLISHED BY THE AMENDMENT TO THE RFQ. THAT THE FAILURE TO PERMIT CIMRON TO AMEND ITS QUOTATION CANNOT BE CONSIDERED THE ,EQUITABLE OPPORTUNITY TO NEGOTIATE" CONTEMPLATED BY ASPR 3-805.1 (B) APPEARS TO BE ESTABLISHED BY THE FACT THAT CIMRON, UNLIKE ITS COMPETITOR, WAS NOT GIVEN ANY OPPORTUNITY TO SUBMIT A QUOTATION ON AN ITEM "EQUAL TO " CIMRON PART NUMBER 7300A 631, OR TO SUBMIT A QUOTATION BASED ON SUPPLYING THE NAMED PART NUMBER ON A COMPETITIVE BASIS.

ADDITIONALLY, THE RECORD INDICATES THAT THE CONTRACT PROPOSED TO BE AWARDED TO THE COMPETITOR WOULD INCLUDE CERTAIN PROVISIONING DATA AND PUBLICATIONS WHICH WERE NOT INCLUDED IN THE COMPETITOR'S ORIGINAL PROPOSAL. CONSEQUENTLY, ANY CONTRACT RESULTING THEREFROM WOULD BE AWARDED WITHOUT NEGOTIATION ON THE BASIS OF THE COMPETITOR'S REVISED--- AS OPPOSED TO THE INITIAL--- PROPOSAL, WHICH IS STRICTLY PROHIBITED UNDER ASPR 3- 805.1 (A) UNLESS AN EQUITABLE OPPORTUNITY TO REVISE IS ALSO GIVEN TO CIMRON.

FURTHERMORE, IT IS APPARENT THAT THE GOVERNMENT WAS SO UNCERTAIN AS TO THE TECHNICAL ASPECTS OF THE COMPETITIOR'S EQUIPMENT THAT IT WAS NECESSARY TO REQUEST THE CORPORATION TO SUPPLY A MODEL OF ITS EQUIPMENT FOR TEST PURPOSES NEARLY 6 MONTHS AFTER RECEIPT OF ITS INITIAL QUOTATION. BELIEVE THIS ACTION, IN EFFECT, CONSTITUTES A REQUEST FOR A FURTHER DETAILED PRESENTATION BY THE COMPETITOR AND WE THEREFORE ARE UNABLE TO AGREE WITH THE CONTRACTING OFFICER THAT THE PROVISIONS OF ASPR 3-805.1 (A) (V) JUSTIFY THE FAILURE TO NEGOTIATE WITH CIMRON.

FOR THE ABOVE REASONS WE BELIEVE FURTHER OPPORTUNITY MUST BE AFFORDED OFFERORS TO NEGOTIATE ON AN EQUITABLE BASIS.

THE FILE FORWARDED WITH THE LETTER OF JUNE 10 FROM THE DEPUTY COMMANDER, PURCHASING, NAVSUP, IS RETURNED.