B-164725, OCT. 14, 1968

B-164725, OCT. 14, 1968

TO BOGUE ELECTRIC MANUFACTURING COMPANY:

REFERENCE IS MADE TO YOUR LETTERS OF JUNE 27 AND AUGUST 5, 1968, PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANY OTHER OFFEROR UNDER REQUEST FOR PROPOSALS NO. DAAK01-68-R-6409, ISSUED BY THE UNITED STATES ARMY MOBILITY EQUIPMENT COMMAND FOR A QUANTITY OF PRINTING PLANTS, DATA, PROVISIONING REQUIREMENTS, ETC.

THE SUBJECT REQUEST FOR PROPOSALS WAS ISSUED ON APRIL 17, 1968, AS A 100- PERCENT SMALL BUSINESS SET-ASIDE. THE CLOSING DATE WAS MAY 15, 1968. AMENDMENT NO. A001 DATED APRIL 25, 1968, THE 100-PERCENT SET ASIDE WAS WITHDRAWN. NINETEEN PROSPECTIVE OFFERORS WERE SOLICITED AND OFFERS WERE RECEIVED FROM YOUR COMPANY AND WICKES INDUSTRIES INC. (WICKES). INITIAL NEGOTIATIONS WERE OPENED JUNE 4, 1968, WITH A CLOSING DATE OF JUNE 10, 1968. WICKES REVISED ITS PRICES ONLY ON THE DATA ITEMS. YOUR FIRM REDUCED ITS UNIT PRICE ON THE PRINTING PLANT BUT MADE NO CHANGE IN DATA PRICES. NEGOTIATIONS WERE REOPENED JUNE 13, 1968, AND CLOSED JUNE 18, 1968. AS A RESULT OF THESE NEGOTIATIONS BOTH YOUR FIRM AND WICKES REVISED YOUR DATA PRICES. AWARD OF THE CONTRACT WAS MADE TO WICKES ON JUNE 27, 1968, AS THE LOW OFFEROR.

IN YOUR LETTER OF AUGUST 5, 1968, YOU STATE THAT REPRESENTATIVES OF YOUR FIRM WERE REQUESTED TO MEET WITH THE ADMINISTRATIVE OFFICE FOR THE PURPOSE OF CONDUCTING NEGOTIATIONS; HOWEVER, NO NEGOTIATIONS WERE CONDUCTED AS THE ENTIRE CONFERENCE WAS UTILIZED IN THE CLARIFICATION OF THE GOVERNMENT REQUIREMENTS. YOU ALSO STATE THAT VERBAL CHANGES WERE MADE IN THE GOVERNMENT'S REQUIREMENTS WITHOUT CONFIRMATION IN WRITING AND THAT YOU WERE TOLD THAT THERE WOULD BE CHANGES IN CERTAIN "HIGH-COST" ITEMS WHICH WOULD BE NEGOTIATED WITH THE SUCCESSFUL BIDDER AFTER AWARD. YOU CONTEND THAT THIS PERMITS SUBMISSION OF INITIAL LOW PRICES WHICH CAN BE RECOUPED BY LATER CHANGES. YOU FURTHER STATE THAT AT THE TIME OF THE JUNE 14 NEGOTIATIONS WITH YOUR FIRM THE GOVERNMENT WAS AWARE THAT ANY CONTRACT RESULTING FROM THE NEGOTIATIONS WOULD INCLUDE FIVE ADDITIONAL UNITS ADDED UNDER ARTICLE 3,"INCREASE IN REQUIREMENTS" CLAUSE OF THE SOLICITATION. YOU CONTEND THAT HAD THIS INFORMATION BEEN DISCLOSED TO YOUR NEGOTIATORS YOUR OFFER WOULD HAVE BEEN CONSIDERABLY LOWER.

THE ADMINISTRATIVE OFFICE REPORTS THAT THE NEGOTIATIONS WITH YOUR FIRM ON JUNE 14, 1968, WERE, AS YOU STATE, DEVOTED LARGELY TO CLARIFICATION OF THE DATA ITEMS. THAT IS TO SAY, THE CONTRACTING OFFICER WAS CONCERNED THAT YOUR FIRM HAD NOT CONSIDERED ALL THE DATA REQUIRED BECAUSE YOUR DATA PRICES WERE EXTREMELY LOW. THE CONTRACTING OFFICER STATES THAT YOUR PRICES WERE LOW FOR PROVISIONING AND DRAWINGS, APPARENTLY BECAUSE YOU HAD UNDERESTIMATED THE NUMBER OF LINES TO BE PROVISIONED. THE CONTRACTING OFFICER FURTHER STATES THAT YOU WERE ADVISED THAT A DRAWING WOULD BE REQUIRED FOR EVERY LINE PROVISIONED AND THAT IT IS IN THIS CONNECTION THAT YOU ALLEGE THAT THERE WERE VERBAL CHANGES IN THE REQUIREMENTS. IT IS THE POSITION OF THE CONTRACTING OFFICER, WITH WHICH WE AGREE, THAT NO VERBAL CHANGES WERE MADE BUT RATHER THE GOVERNMENT WAS DESIROUS OF CLARIFYING THE DATA REQUIREMENTS. WHILE UNDER ASPR 3-505 (C) A WRITTEN AMENDMENT TO THE SOLICITATION WOULD BE REQUIRED CONCERNING THE MATTERS CLARIFIED IF SUCH INFORMATION WAS NECESSARY TO OFFERORS IN SUBMITTING PROPOSALS, OR IF THE LACK OF SUCH INFORMATION WOULD BE PREJUDICIAL TO UNINFORMED OFFERORS, SINCE WICKES HAD BEEN AWARDED THE PREVIOUS CONTRACT AND WAS FAMILIAR WITH THE DATA REQUIREMENTS IT OBVIOUSLY WAS NOT PREJUDICED BY FAILURE TO ISSUE SUCH AN AMENDMENT. FURTHERMORE, IT APPEARS THAT THE CLARIFICATION WAS BENEFICIAL AND NOT PREJUDICIAL TO YOUR FIRM SINCE YOU WERE ABLE TO REVISE YOUR PRICE DOWNWARD.

REGARDING YOUR ALLEGATION THAT YOU WERE TOLD THAT CERTAIN "HIGH COST" ITEMS WOULD BE NEGOTIATED AFTER THE CONTRACT WAS AWARDED, IT IS REPORTED THAT THE POSSIBILITY THAT COMMERCIAL PUBLICATIONS MIGHT BE ADDED AFTER AWARD WAS DISCUSSED. IT IS FURTHER REPORTED, HOWEVER, THAT SINCE NO FIRM REQUIREMENT FOR THESE PUBLICATIONS WAS RECEIVED PRIOR TO AWARD THERE WAS NO BASIS FOR SOLICITING PRICES ON SUCH LITERATURE AS PART OF THE INITIAL PROCUREMENT. MOREOVER, WE CANNOT AGREE WITH YOUR CONTENTION THAT THE SUCCESSFUL OFFEROR SUBMITTED A LOW OFFER WITH THE KNOWLEDGE IT COULD RECOUP BY MEANS OF THE CHANGES. THE ADMINISTRATIVE OFFICE ESTIMATES THE COST OF THE COMMERCIAL PUBLICATIONS TO BE $5,000. IN VIEW THEREOF, AND HAVING REGARD FOR THE CLOSE COMPETITION AND THE PAST PROCUREMENT HISTORY, WE DO NOT BELIEVE THAT THE ADDITION OF SUCH AN ITEM AFTER AWARD WOULD PERMIT ANY SUBSTANTIAL RECOUPMENT.

YOUR CONTENTION THAT THE FAILURE OF THE GOVERNMENT TO DISCLOSE DURING NEGOTIATIONS THE FACT THAT THE OPTION WOULD BE EXERCISED FOR FIVE UNITS AT THE TIME OF AWARD WAS NOT IN THE BEST INTEREST OF EITHER THE OFFERORS OR THE GOVERNMENT HAS CONSIDERABLE MERIT. WE DO NOT BELIEVE, HOWEVER, THAT CANCELLATION OF THE CONTRACT AWARDED TO WICKES WOULD BE WARRANTED. ARE, HOWEVER, BRINGING THE MATTER TO THE ATTENTION OF THE RESPONSIBLE OFFICIALS OF THE ARMY TO PRECLUDE SIMILAR ACTION IN THE FUTURE. WE HAVE HELD THAT A SOLICITATION FOR A QUANTITY LESS THAN THE GOVERNMENT'S KNOWN REQUIREMENT OF AN ITEM TENDS TO RESULT IN HIGHER UNIT PRICES THAN COULD BE OBTAINED FOR LARGER QUANTITIES OF THE ITEM. 46 COMP. GEN. 749. HENCE, WE AGREE THAT IT WOULD HAVE BEEN IN THE INTEREST OF THE GOVERNMENT TO HAVE ADVISED THE OFFERORS THAT AN ADDITIONAL FIVE UNITS WOULD BE PROCURED. NEVERTHELESS, UNDER ARTICLE 3 OF THE REQUEST FOR PROPOSALS THE GOVERNMENT RESERVED THE RIGHT TO EXERCISE THE OPTION AT TIME OF AWARD. THE EVALUATION OF THE OFFERS WAS MADE ON THE BASIS OF THE TOTAL QUANTITY TO BE AWARDED, INCLUDING THE OPTION QUANTITY, IN ACCORDANCE WITH ASPR 1-1504 (B). SINCE THE REQUIREMENT FOR THE ADDITIONAL FIVE UNITS WAS NOT DISCLOSED TO EITHER OFFEROR IT APPEARS THAT COMPETITION WAS BASED ON THE SAME TERMS. CONSEQUENTLY, WE DO NOT BELIEVE THAT THE FAILURE TO SOLICIT PRICES ON THE ADDITIONAL QUANTITY WAS SO VIOLATIVE OF THE PROCUREMENT STANDARDS AS TO JUSTIFY CANCELING THE CONTRACT AWARDED.