B-164382, OCT. 7, 1968

B-164382: Oct 7, 1968

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GRISWOLD AND SOMMER: REFERENCE IS MADE TO TELEGRAM DATED MAY 21. THE REQUEST FOR PROPOSAL WAS ISSUED ON FEBRUARY 20. PROPOSALS WERE TO BE SUBMITTED IN TWO SEPARATE PARTS ENTITLED . SIXTEEN FIRMS RESPONDED WITH PROPOSALS WHICH WERE OPENED ON MARCH 28. AN EVALUATION BOARD WAS ESTABLISHED COMPOSED OF THE COAST GUARD NATIONAL NAVIGATION PLANNING STAFF AND OTHER QUALIFIED OFFICERS. THE PROPOSALS WERE EVALUATED IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH 1.3 OF ENCLOSURE D TO THE REQUEST FOR PROPOSALS. THE TECHNICAL PROPOSALS WERE FIRST EXAMINED TO DETERMINE WHICH WERE WITHIN THE LIMITS OF ACCEPTABLE PERFORMANCE. INCORPORATED IT IS REPORTED THAT BECAUSE OF THE NATURE AND COMPLEXITY OF THE SUBJECT MATTER AND IN ACCORDANCE WITH FPR 1-3.805 1.

B-164382, OCT. 7, 1968

TO CALFEE, HALTER, CALFEE, GRISWOLD AND SOMMER:

REFERENCE IS MADE TO TELEGRAM DATED MAY 21, 1968, AND YOUR LETTERS DATED JUNE 26 AND AUGUST 16, 1968, IN BEHALF OF THE INTERNATIONAL ENGINEERING COMPANY, PROTESTING AWARD OF A CONTRACT TO ANY OFFEROR PRIOR TO NEGOTIATION WITH YOUR CLIENT UNDER REQUEST FOR PROPOSALS, ISSUED BY THE UNITED STATES COAST GUARD, NO. 40-CG83291-A.

THE REQUEST FOR PROPOSAL WAS ISSUED ON FEBRUARY 20, 1968, SOLICITING PROPOSALS FOR A STUDY OF UNITED STATES REQUIREMENTS, BOTH PRESENT AND FUTURE, FOR MARITIME AIDS TO NAVIGATION IN THE SHORT DISTANCE MARITIME ENVIRONMENT. PROPOSALS WERE TO BE SUBMITTED IN TWO SEPARATE PARTS ENTITLED ,TECHNICAL PROPOSAL" AND "BUSINESS MANAGEMENT PROPOSAL".

SIXTEEN FIRMS RESPONDED WITH PROPOSALS WHICH WERE OPENED ON MARCH 28, 1968. AN EVALUATION BOARD WAS ESTABLISHED COMPOSED OF THE COAST GUARD NATIONAL NAVIGATION PLANNING STAFF AND OTHER QUALIFIED OFFICERS. THE PROPOSALS WERE EVALUATED IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH 1.3 OF ENCLOSURE D TO THE REQUEST FOR PROPOSALS. THE TECHNICAL PROPOSALS WERE FIRST EXAMINED TO DETERMINE WHICH WERE WITHIN THE LIMITS OF ACCEPTABLE PERFORMANCE, AND THEN COMPARED AGAINST EACH OTHER USING A RANK ORDERING TECHNIQUE FOR THOSE TECHNICAL PROPOSALS ADVANCING BEYOND THE FIRST PHASE TO DETERMINE RELATIVE TECHNICAL MERIT.

THE EVALUATION REVEALED THAT THREE FIRMS SUBMITTED PROPOSALS WHICH OFFERED ACCEPTABLE SYSTEMS APPROACH AND MANAGEMENT CAPABILITY FOR THE CONDUCT OF THE STUDY:

SYSTEM DEVELOPMENT CORPORATION

INTERNATIONAL ENGINEERING COMPANY

GEONAUTICS, INCORPORATED IT IS REPORTED THAT BECAUSE OF THE NATURE AND COMPLEXITY OF THE SUBJECT MATTER AND IN ACCORDANCE WITH FPR 1-3.805 1, AWARD WAS NOT MADE AT THIS TIME. INSTEAD, SEPARATE MEETINGS WERE HELD WITH EACH OF THE THREE TECHNICALLY QUALIFYING FIRMS TO RESOLVE UNCERTAINTIES RELATING TO THE TECHNICAL ASPECTS OF EACH PROPOSAL. THE REPORT CONTINUES THAT THE RELATIVE COST POSITION OF EACH FIRM WAS NOT DISCUSSED OR ALLUDED TO DURING ANY OF THESE MEETINGS.

THE CONTRACTING OFFICER STATES THAT THE INTENT OF THE MEETINGS WAS TO INSURE THAT THE THREE TECHNICALLY QUALIFIED FIRMS RECOGNIZED ALL ASPECTS OF THE COAST GUARD'S REQUIREMENTS AND THAT THE DESIRED END RESULTS COULD BE PROVIDED. FOLLOWING THESE MEETINGS EACH FIRM WAS INVITED TO RECONSIDER OR MODIFY ITS PROPOSAL. THE RECORD BEFORE US DOES NOT INDICATE THAT A COMMON DATE FOR RECEIPT OF MODIFICATIONS WAS ESTABLISHED. EACH OF THE THREE FIRMS MODIFIED BOTH ITS TECHNICAL PROPOSAL AND ITS BUSINESS MANAGEMENT (INCLUDING ESTIMATED PRICE) PROPOSAL. THIS REVISION CHANGED THE ESTIMATED PRICE STANDING OF THE THREE FIRMS AS FOLLOWS:

ESTIMATED PRICE

INITIAL MODIFIED

------- -------- SYSTEM DEVELOPMENT CORP.

$247,223.00 $196,299.00 INTERNATIONAL ENGINEERING CO. 46,790.00 79,991.00 GEONAUTICS, INCORPORATED 69,521.00 78,589.00

FOLLOWING RECEIPT AND EXAMINATION OF THE MODIFICATIONS IT WAS THE RECOMMENDATION OF THE EVALUATION BOARD THAT THE PROPOSAL OF GEONAUTICS, INCORPORATED, WAS THE MOST TECHNICALLY QUALIFIED AND BEST REFLECTED THE DESIRED LEVEL OF EFFORT WHILE OFFERING THE COAST GUARD THE OPTIMUM RETURN ON ITS INVESTMENT IN THE STUDY REQUIRED. AWARD TO GEONAUTICS, INCORPORATED, OF A COST-PLUS-A-FIXED FEE CONTRACT BY THE CONTRACTING OFFICER WAS MADE ON THE BASIS OF THE RECOMMENDATION.

IT IS YOUR CONTENTION THAT INASMUCH AS INTERNATIONAL ENGINEERING'S INITIAL PROPOSAL WAS ,DETERMINED BY THE COAST GUARD TO OFFER A MORE ACCEPTABLE SYSTEMS APPROACH AND MANAGEMENT CAPABILITY THAN GEONAUTICS, AND ITS INITIAL PRICE PROPOSAL WAS $22,731.00 LOWER THAN GEONAUTICS' INITIAL BID PRICE, THE AWARD SHOULD HAVE BEEN MADE TO INTERNATIONAL ENGINEERING PURSUANT TO FPR 1-3.805-1 AND -2. YOU ALSO CONTEND THAT IF FURTHER NEGOTIATIONS WERE DEEMED NECESSARY, THEY SHOULD HAVE BEEN CONDUCTED SOLELY WITH INTERNATIONAL. YOU COMMENT THAT ENLARGING THE SCOPE OF TECHNICAL DISCUSSIONS AND NEGOTIATIONS WITH A SECOND BIDDER WHOSE BID WAS SUBSTANTIALLY HIGHER AND LESS ACCEPTABLE COULD ONLY CONSTITUTE AN AUCTION TECHNIQUE WHICH IS PROHIBITED. YOU REFER TO OUR DECISION, B-162910, JANUARY 17, 1968, AND PURPORTEDLY QUOTE THEREFROM AS FOLLOWS: " * * * THE GOVERNMENT'S DISCLOSURE TO BIDDERS AS TO HOW THEIR PROPOSALS COULD BE IMPROVED WOULD HAVE RESULTED IN AN AUCTION TECHNIQUE WHICH IS PROHIBITED BY FPR".

YOU FURTHER CONTEND THAT THE TECHNICAL CONFERENCES, WHICH RESULTED IN MODIFICATIONS OF ORIGINAL TECHNICAL PROPOSALS, NECESSITATED REVISIONS IN COST ESTIMATES AND CONSTITUTED AN AUCTION TECHNIQUE. YOU STATE THAT INTERNATIONAL BELIEVED THE ADJUSTMENTS IT MADE IN ITS BID WERE DESIGNED SOLELY TO MEET THE SPECIFIC DESIRES OF THE COAST GUARD AFTER THEY HAD ESSENTIALLY REDETERMINED THEIR DESIRED SCOPE OF EFFORT BASED UPON REVIEW OF THE CONTRACTOR PROPOSALS. YOU FURTHER BELIEVE THAT INTERNATIONAL ENGINEERING AND GEONAUTICS SHOULD THEN HAVE BEEN CALLED IN TO NEGOTIATE PRICES. IN ADDITION TO THE ABOVE THE FOLLOWING POINTS ARE MADE IN SUPPORT OF THE PROTEST.

THAT THE SUM AND SUBSTANCE OF THE COAST GUARD'S COMMENTS ON INTERNATIONAL'S INITIAL PROPOSAL WAS THAT INTERNATIONAL'S NUMBER OF MAN- HOURS WAS TOO LOW. YOUR COMMENT ON THIS POINT IS THAT INTERNATIONAL EXPLAINED THAT ITS TECHNICAL APPROACH WAS BASED UPON THE USE OF HIGHLY COMPETENT SPECIALISTS INTIMATELY FAMILIAR WITH THIS PARTICULAR PROBLEM AREA, AND THAT INTERNATIONAL THEREFORE HAD A HIGHER LABOR RATE PER MAN- HOUR AND FEWER LABOR HOURS THAN ITS COMPETITORS.

THAT GEONAUTICS WAS PERMITTED TO ADD SIX ELEMENTS TO ITS INITIAL PROPOSAL INDICATING ITS INFERIORITY TO INTERNATIONAL-S.

THAT INTERNATIONAL OFFERED A FIXED-PRICE CONTRACT AS AN ALTERNATIVE TO THE COST-PLUS-A-FIXED-FEE CONTRACT STATED IN THE REQUEST FOR PROPOSALS.

AND THAT THE NUMBER OF MAN-HOURS INVOLVED IN THE SURVEY APPEARED TO BE THE SOLE CRITERION USED IN THE FINAL DETERMINATION OF THE LOW BIDDER.

INITIALLY WE MUST POINT OUT THE ERROR IN YOUR QUOTATION OF OUR DECISION, B-162910, JANUARY 17, 1968. THE QUOTATION IS PROPERLY AS FOLLOWS: "CONCERNING YOUR COMPLAINT THAT NORTHWEST'S (THE PROTESTER) REQUESTS FOR EVALUATION STANDARDS OR INDICATIONS OF WHERE OR HOW ITS PROPOSAL COULD BE IMPROVED WERE NOT HONORED, (THE DEPARTMENT OF) INTERIOR CONTENDS THAT THE DIVULGENCE OF ANY MORE DEFINITIVE INFORMATION IN THIS AREA THAN THAT CONTAINED IN THE SOLICITATION WOULD HAVE RESULTED IN AN AUCTION TECHNIQUE PROHIBITED BY THE FEDERAL PROCUREMENT REGULATIONS.

* * * * * * * "THE THIRD NEGOTIATION SESSION WAS CONDUCTED WITH CONTINENTAL (APPARENT SUCCESSFUL PROPOSER) ON NOVEMBER 1, 1967, WHILE THE THIRD SESSION WITH NORTHWEST WAS CONDUCTED ON OCTOBER 31, 1967. OBVIOUSLY, THE CONTRACT NEGOTIATORS COULD NOT TELL NORTHWEST'S REPRESENTATIVES ON OCTOBER 31 THAT THEY ENTERTAINED A PREFERENCE FOR JET SERVICE OR FOR A FIRM COMMITMENT FOR CONSTRUCTION OF HOTELS IN ALL SIX DISTRICTS WHEN THEY DIDN-T LEARN UNTIL NOVEMBER 1 THAT THESE OFFERS WERE FEASIBLE, PRACTICAL, OR WOULD IN FACT BE MADE BY ANY OF THE OFFERORS. THINK IT EQUALLY OBVIOUS THAT A REOPENING OF NEGOTIATIONS STATING THESE AND OTHER PREFERENCES WOULD HAVE BEEN A CLEAR INDICATION TO OFFERORS THAT SUCH AN OFFER HAD IN FACT BEEN MADE AND THAT IT WOULD HAVE TO BE EQUALED OR BETTERED IN ORDER FOR THE REMAINING OFFERORS TO GAIN FURTHER CONSIDERATION. THERE WOULD SEEM TO BE LITTLE QUESTION THAT THIS WOULD CONSTITUTE A PROHIBITED AUCTION TECHNIQUE.'

IN THE CASE CITED THE PROTESTER COMPLAINED THAT IT SHOULD HAVE BEEN PERMITTED TO SUBMIT A PRICE PROPOSAL ON THE SUCCESSFUL PROPOSAL. IN THE INSTANT MATTER THE CONTRACTING OFFICER AND HIS NEGOTIATING TEAM PROPERLY CONDUCTED DISCUSSIONS WITH EACH PROPOSER CLARIFYING ITS PROPOSAL IN ORDER THAT THE INTENDED SURVEY WOULD OBTAIN ALL THE INFORMATION DESIRED BY THE GOVERNMENT. HAD THE CONTRACTING OFFICER CONDUCTED NEGOTIATIONS ON THE TECHNICAL ASPECTS WITH ONLY ONE PROPOSER, THE UNAPPROACHED PROPOSERS WOULD HAVE A LEGITIMATE COMPLAINT ON THE BASIS OF FORECLOSURE OF COMPETITION.

SECTION 1-3.805, FEDERAL PROCUREMENT REGULATIONS, PROVIDES IN PERTINENT PART AS FOLLOWS: "SEC. 1-3.805 SELECTION OF OFFERORS FOR NEGOTIATION AND AWARD. SEC. 1-3.805-1 GENERAL.

THE PROCEDURES SET FORTH IN THIS SEC. 1-3.805-1 ARE GENERALLY APPLICABLE TO NEGOTIATED PROCUREMENT. HOWEVER, THEY ARE NOT APPLICABLE WHERE THEIR USE WOULD BE INAPPROPRIATE, AS MAY BE THE CASE, FOR EXAMPLE, WHEN PROCURING RESEARCH AND DEVELOPMENT OR SPECIAL SERVICES (SUCH AS ARCHITECT- ENGINEER SERVICES) OR WHEN COST REIMBURSEMENT TYPE CONTRACTING IS ANTICIPATED (SEE SEC. 1-3.805.2). WHILE THE LOWEST PRICE OR LOWEST COST TO THE GOVERNMENT IS PROPERLY THE DECIDING FACTOR IN SOURCE SELECTION IN MANY INSTANCES, AWARD OF A CONTRACT PROPERLY MAY BE INFLUENCED BY THE PROPOSAL WHICH PROMISES THE GREATEST VALUE TO THE GOVERNMENT IN TERMS OF POSSIBLE PERFORMANCE, ULTIMATE PRODUCIBILITY, GROWTH POTENTIAL, AND OTHER FACTORS.

(A) AFTER RECEIPT OF INITIAL PROPOSALS, WRITTEN OR ORAL DISCUSSIONS SHALL BE CONDUCTED WITH ALL RESPONSIBLE OFFERORS WHO SUBMITTED PROPOSALS WITHIN A COMPETITIVE RANGE, PRICE AND OTHER FACTORS CONSIDERED, EXCEPT THAT THIS REQUIREMENT NEED NOT NECESSARILY BE APPLIED TO:

(1) PROCUREMENTS NOT IN EXCESS OF $2,500;

(2) PROCUREMENTS IN WHICH RATES OR PRICES ARE FIXED BY LAW OR REGULATIONS;

(3) PROCUREMENTS IN WHICH TIME OF DELIVERY WILL NOT PERMIT SUCH DISCUSSIONS;

(4) PROCUREMENTS OF THE SET-ASIDE PORTION OF PARTIAL SET-ASIDES ORBY SMALL BUSINESS RESTRICTED ADVERTISING; OR

(5) 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, THAT THE REQUEST FOR PROPOSALS CONTAINS A NOTICE TO ALL OFFERORS OF THE POSSIBILITY THAT AWARD MAY BE MADE WITHOUT DISCUSSION OF PROPOSALS RECEIVED AND, HENCE, THAT PROPOSALS SHOULD BE SUBMITTED INITIALLY ON THE MOST FAVORABLE TERMS, FROM A PRICE AND TECHNICAL STANDPOINT, WHICH THE OFFEROR CAN SUBMIT TO THE GOVERNMENT. IN 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. ALSO, WHEN THE PROPOSAL MOST ADVANTAGEOUS TO THE GOVERNMENT INVOLVES A MATERIAL DEPARTURE FROM THE STATED REQUIREMENTS, CONSIDERATION SHALL BE GIVEN TO OFFERING THE OTHER FIRMS WHICH SUBMITTED PROPOSALS AN OPPORTUNITY TO SUBMIT NEW PROPOSALS ON A TECHNICAL BASIS WHICH IS COMPARABLE TO THAT OF THE MOST ADVANTAGEOUS PROPOSAL: PROVIDED, THAT THIS CAN BE DONE WITHOUT REVEALING TO THE OTHER FIRMS ANY INFORMATION WHICH THE OFFEROR DOES NOT WANT DISCLOSED TO THE PUBLIC (SEE SEC. 1-3.103 (B) ). SEC. 1-3.805.2 COST REIMBURSEMENT TYPE CONTRACTS.

IN SELECTING THE CONTRACTOR FOR A COST-REIMBURSEMENT TYPE CONTRACT, ESTIMATED COSTS OF CONTRACT PERFORMANCE AND PROPOSED FEES SHOULD NOT BE CONSIDERED AS CONTROLLING, SINCE IN THIS TYPE OF CONTRACT ADVANCE ESTIMATES OF COST MAY NOT PROVIDE VALID INDICATORS OF FINAL ACTUAL COSTS. THERE IS NO REQUIREMENT THAT COST-REIMBURSEMENT TYPE CONTRACTS BE AWARDED ON THE BASIS OF EITHER (A) THE LOWEST PROPOSED COST, (B) THE LOWEST PROPOSED FEE, OR (C) THE LOWEST TOTAL ESTIMATED COST PLUS PROPOSED FEE. THE AWARD OF COST-REIMBURSEMENT TYPE CONTRACTS PRIMARILY ON THE BASIS OF ESTIMATED COSTS MAY ENCOURAGE THE SUBMISSION OF UNREALISTICALLY LOW ESTIMATES AND INCREASE THE LIKELIHOOD OF COST OVERRUNS. THE COST ESTIMATE IS IMPORTANT TO DETERMINE THE PROSPECTIVE CONTRACTOR'S UNDERSTANDING OF THE PROJECT AND ABILITY TO ORGANIZE AND PERFORM THE CONTRACT. THE AGREED FEE MUST BE WITHIN THE LIMITS PRESCRIBED BY LAW AND AGENCY PROCEDURES AND APPROPORIATE TO THE WORK TO BE PERFORMED (SEE SEC. 1-3.808). BEYOND THIS, HOWEVER, THE PRIMARY CONSIDERATION IN DETERMINING TO WHOM THE AWARD SHALL BE MADE IS: WHICH CONTRACTOR CAN PERFORM THE CONTRACT IN A MANNER MOST ADVANTAGEOUS TO THE GOVERNMENT.'

UNDER THE ABOVE QUOTED REGULATIONS IT WOULD HAVE BEEN HIGHLY IRREGULARTO CONDUCT NEGOTIATIONS WITH ONLY ONE OFFEROR ON THE INITIAL PROPOSAL TO THE EXCLUSION OF THE OTHER TWO OFFERORS WHOSE PROPOSALS HAD BEEN PRELIMINARILY FOUND ACCEPTABLE. IT WOULD HAVE BEEN THE VERY ANTITHESIS OF COMPETITION-- - THE BASIC REQUIREMENT IN GOVERNMENT CONTRACTING.

CONCERNING THE DISCUSSION OF THE TECHNICAL PROPOSAL PHASE, WE CANNOT SEE HOW IT WOULD BE CONSIDERED AS "EMPLOYING AN AUCTION TECHNIQUE". THE CONTRACTING OFFICER HAS STATED THAT: "GENERAL TECHNICAL COMMENTS WERE PREPARED TO ASSIST IN THE DISCUSSION OF EACH OF THREE PROPOSALS. DURING EACH DISCUSSION THE PREPARED COMMENTS WERE USED AS AN AGENDA TO POINT OUT SPECIFICALLY WHEREIN AND TO WHAT DEGREE CLARIFICATION AND AMPLIFICATION WAS REQUIRED. INTERNATIONAL ENGINEERING WAS MISTAKEN IF THEY BELIEVED THAT THE PURPOSE OF THE MEETING WAS TO ALLOW THE COAST GUARD TO MODIFY THE SCOPE OR INTENT OF THE SOLICITATION. BASED UPON THE DISCUSSIONS, THE THREE FIRMS WERE AFFORDED THE OPPORTUNITY TO MODIFY THEIR INDIVIDUAL PROPOSALS. IT WOULD BE EXPECTED THAT ANY SUBSTANTIAL MODIFICATION TO THE TECHNICAL PROPOSAL WOULD ALSO REQUIRE A MODIFICATION TO THE BUSINESS MANAGEMENT PROPOSAL, BUT WE CANNOT AGREE WITH INTERNATIONAL ENGINEERING THAT SUCH DISCUSSIONS CONSTITUTED -COST NEGOTIATIONS-. "

WE AGREE WITH THE CONTRACTING OFFICER THAT ANY MODIFICATION OF A TECHNICAL PROPOSAL WOULD PROBABLY REQUIRE A REEVALUATION BY THE OFFEROR OF ITS PRICE PROPOSAL. IN THE CASE OF THE SYSTEM DEVELOPMENT CORPORATION IT RESULTED IN A REDUCTION IN ITS PRICE ESTIMATE, AND IN THE CASE OF GEONAUTICS AND INTERNATIONAL ENGINEERING, A PRICE INCREASE. NOR DO WE FIND ANY EVIDENCE THAT THE CONTRACTING OFFICER REQUIRED INTERNATIONAL TO INCREASE THE NUMBER OF MAN-HOURS ESTIMATED TO BE USED IN CONDUCTING THE SURVEY PORTION OF THE JOB. THE EVALUATION TEAM COMMENT ON THIS POINT "TWO WEEKS FOR INFO GATHERING CONSIDERED INSUFFICIENT"--- DOES NOT APPEAR TO US AS ANYTHING MORE THAN AN EXPRESSION OF OPINION, SUBJECT TO REBUTTAL BY INTERNATIONAL OR A CONVINCING SHOWING THAT ITS PERSONNEL WERE SO HIGHLY SKILLED THAT TWO WEEKS WAS AMPLE.

ON THIS POINT WE HAVE CONSISTENTLY HELD THAT THE DETERMINATION OF WHAT CONSTITUTES THE BEST APPROACH TO A PROCUREMENT PROBLEM IS A FUNCTION PECULIARLY WITHIN THE DISCRETIONARY AUTHORITY OF THE CONTRACTING AGENCY.

AS TO YOUR COMMENT THAT GEONAUTICS ADDED 6 ELEMENTS TO ITS TECHNICAL PROPOSAL, WE KNOW OF NO RESTRICTIONS IN ADDING TO OR DETRACTING FROM PROPOSALS DURING THE COURSE OF NEGOTIATIONS, SO LONG AS ALL OFFERORS ARE TREATED ALIKE.

IN SECTION 1-3.805.2 OF THE FEDERAL PROCUREMENT REGULATIONS QUOTED ABOVE IT IS STATED THAT IN A COST-REIMBURSEMENT TYPE CONTRACT, ESTIMATED COSTS AND PROPOSED FEES ARE NOT CONTROLLING AND ARE SUBORDINATE TO THE PRIMARY CONSIDERATION AS TO WHICH CONTRACTOR CAN PERFORM THE CONTRACT IN A MANNER MOST ADVANTAGEOUS TO THE GOVERNMENT. THIS THEN IS A MATTER OF JUDGMENT ON THE PART OF THE CONTRACTING OFFICER.

IN OUR REVIEW OF THE MATTER WE HAVE DISCOVERED NO DEPARTURE FROM THE PERTINENT REGULATIONS OR STATUTES BY THE CONTRACTING OFFICER NOR HAVE WE DISCOVERED ANY BASIS FOR QUESTIONING THE JUDGMENT OF THE CONTRACTING OFFICER. HIS DETERMINATION APPEARS TO HAVE BEEN UNBIASED, WITHOUT PREJUDICE AND BASED ON COMPETENT TECHNICAL ADVICE. IN THE CIRCUMSTANCES WE ARE NOT DISPOSED TO DISTURB HIS DECISION.

INTERNATIONAL'S OFFER OF A FIRM-FIXED PRICE CONTRACT IN THE ALTERNATIVE WAS IGNORED SINCE THE SOLICITATION CALLED FOR A COST REIMBURSEMENT PLUS A FIXED-FEE TYPE CONTRACT. THE ALTERNATIVE WAS NOT RESPONSIVE AND HAD TO BE IGNORED, UNLESS ALL OFFERORS WERE TO BE GIVEN THE CHANCE TO PROPOSE ON THAT BASIS.