B-164784, OCT. 18, 1968

B-164784, OCT. 18, 1968

TO LUXEMBOURG-AMERICAN MAINTENANCE COMPANY, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 4, 1968, WITH ENCLOSURE, PROTESTING THE AWARD OF CONTRACT MADE UNDER REQUEST FOR PROPOSALS NO. F42650-68-R-0142, ISSUED BY THE OGDEN AIR MATERIEL AREA, HILL AIR FORCE BASE, UTAH.

THE REQUEST, ISSUED ON APRIL 15, 1968, AND AMENDMENT NO. 1 DATED APRIL 24, 1968, INCORPORATING A TECHNICAL CLAUSE, COVERED A REQUIREMENT FOR SERVICES NECESSARY TO MAINTAIN, REPAIR, MODIFY, RECONDITION AND REHABILITATE GOVERNMENT-OWNED AEROSPACE GROUND EQUIPMENT. IT PROVIDED BLANKS FOR PROPOSED LABOR-HOUR RATES TO BE CHARGED THE GOVERNMENT FOR VARIOUS CATEGORIES OF WORK PERFORMED PLUS A PROPOSED SERVICE CHARGE TO BE ADDED TO THE CONTRACTOR'S ACTUAL NET COST OF MATERIALS USED. THE PROPOSED HOURLY RATES WERE THEN TO BE MULTIPLIED BY THE ESTIMATED HOURS AND ADDED TO THE ESTIMATED MATERIAL AND SERVICE COSTS SPECIFIED IN THE REQUEST FOR PROPOSALS. THE PROCUREMENT, A 100 PERCENT SMALL BUSINESS SET-ASIDE, WAS NEGOTIATED PURSUANT TO 10 U.S.C. 2304 (A) (1), UTILIZING THE AIR FORCE LOGISTIC COMMAND THREE-YEAR POLICY, WHEREIN THE INCUMBENT CONTRACTOR MAY BE RETAINED FOR ONE OR TWO ADDITIONAL ONE-YEAR PERIODS AT THE SAME FIXED PRICE IF SO DETERMINED BY THE GOVERNMENT.

THE ORIGINAL CLOSING DATE FOR RECEIPT OF OFFERS WAS MAY 16, 1968. EIGHT FIRMS SUBMITTED PROPOSALS. AFTER INITIAL EVALUATIONS, A DETERMINATION WAS MADE TO CONDUCT FURTHER NEGOTIATIONS AND ALL OFFERORS WERE NOTIFIED BY MAY 20, 1968, THAT CHANGES TO THEIR ORIGINAL PROPOSALS WOULD BE RECEIVED UNTIL THE CLOSE OF BUSINESS ON MAY 23, 1968. IN RESPONSE THERETO, THREE MODIFIED PROPOSALS REFLECTING PRICE REDUCTIONS WERE RECEIVED, YOURS AT $366,135.65, JACK DALTON AT $337,851.70, AND SERVICE THEATRE SUPPLY COMPANY AT $335,950.15. YOUR MODIFIED PROPOSAL ADVANCED YOUR FIRM FROM SEVENTH TO FIFTH HIGHEST OFFER.

THE RECORD INDICATES THAT ON MAY 27, 1968, THE CONTRACTING OFFICER RECEIVED A TELEPHONE CALL FROM YOUR FIRM INQUIRING WHETHER MAN-HOUR RATES WERE EVALUATED ON THE GOVERNMENT ESTIMATE OF 68,931 MAN-HOURS RATHER THAN ACTUAL, INASMUCH AS YOUR FIRM HAD COMPUTED YOUR HOURLY RATE OFFER ON ACTUAL AGGREGATE MAN-HOURS OF 62,436 AND TO THIS EXTENT YOU INDICATED A LOWER THIRD PROPOSAL COULD BE SUBMITTED IF COMPUTATION WAS BASED ON THE GOVERNMENT'S ESTIMATE OF 68,931 MAN-HOURS. WHILE DISCUSSION OF YOUR REVISED MAN-HOUR RATE OF $4.35 IS DENIED BY THE ADMINISTRATIVE REPORT, YOU WERE ADVISED THAT NEGOTIATIONS HAD CLOSED ON MAY 23, 1968, AND THAT NO FURTHER NEGOTIATIONS COULD BE CONDUCTED WITH YOUR FIRM WITHOUT RE-OPENING NEGOTIATIONS WITH ALL OTHER OFFERORS.

ON MAY 29, 1968, THE CONTRACTING OFFICER MADE AWARD TO SERVICE THEATRE SUPPLY COMPANY AS THE LOW RESPONSIVE OFFEROR WITH FINAL APPROVAL AND NOTIFICATION TO THE RESPONSIVE OFFERORS ON JUNE 10, 1968. A LETTER OF PROTEST AGAINST THE AWARD WAS SENT TO THE CONTRACTING OFFICER ON JUNE 29, 1968, AND TO OUR OFFICE ON JULY 4, 1968.

YOU CONTEND THAT THE CONTRACTING OFFICER SHOULD HAVE ACCEPTED YOUR THIRD REVISED OFFER SINCE SUCH OFFER WAS MADE PRIOR TO AWARD OF CONTRACT AND THAT YOU DID NOT STATE NOR WERE YOU TOLD BY THE CONTRACTING OFFICER THAT YOUR SECOND OFFER WAS TO BE YOUR FINAL OFFER. IN SUPPORT OF YOUR CONTENTION YOU CITE THE PROVISIONS OF PARAGRAPH 7 (B) AND 8 (A) (1) OF THE SOLICITATION INSTRUCTIONS AND CONDITIONS, PAGE 3 OF THE REQUEST FOR PROPOSALS, AS REQUIRED BY ARMED SERVICES PROCUREMENT REGULATION (ASPR) 3- 506, WHICH STATES IN PART: "7. MODIFICATION OR WITHDRAWAL OF OFFERS.

"/B) IF THIS SOLICITATION IS NEGOTIATED, OFFERS MAY BE MODIFIED (SUBJECT TO PAR. 8 WHEN APPLICABLE) OR WITHDRAWN BY WRITTEN TELEGRAPHIC NOTICE RECEIVED AT ANY TIME PRIOR TO AWARD * * *. "8. LATE OFFERS AND MODIFICATIONS OR WITHDRAWALS. "THIS PARAGRAPH APPLIES TO ALL ADVERTISED SOLICITATIONS. IN THE CASE OF DEPARTMENT OF DEFENSE NEGOTIATED SOLICITATIONS, IT SHALL ALSO APPLY TO LATE OFFERS AND MODIFICATIONS (OTHER THAN THE NORMAL REVISIONS OF OFFERS BY SELECTED OFFERORS DURING THE USUAL CONDUCT OF NEGOTIATIONS WITH SUCH OFFERORS) * * *.

"/A) OFFERS AND MODIFICATIONS OF OFFERS * * * RECEIVED AT THE OFFICE DESIGNATED IN THE SOLICITATION AFTER THE EXACT HOUR AND DATE SPECIFIED FOR RECEIPT WILL NOT BE CONSIDERED UNLESS: (1) THEY ARE RECEIVED BEFORE AWARD IS MADE; AND EITHER (2) * * * IT IS DETERMINED BY THE GOVERNMENT THAT LATE RECEIPT WAS DUE SOLELY TO DELAY IN THE MAILS, * * * OR (3) * * * LATE RECEIPT WAS DUE SOLELY TO MISHANDLING BY THE GOVERNMENT AFTER RECEIPT AT THE GOVERNMENT INSTALLATION, * * *.'

THE QUESTION WHETHER YOUR REVISED PROPOSAL SHOULD BE CONSIDERED A LATE MODIFICATION WITHIN THE MEANING OF ASPR 3-506 IS CONTROLLED BY THE LANGUAGE OF THE REQUEST FOR PROPOSALS AND ARMED SERVICES PROCUREMENT REGULATION PROVISIONS INCORPORATED THEREIN. ASPR 3-506 (B) PROVIDES THAT: ,THE NORMAL REVISIONS OF PROPOSALS BY SELECTED OFFERORS OCCURING DURING THE USUAL CONDUCT OF NEGOTIATIONS WITH SUCH OFFERORS ARE NOT TO BE CONSIDERED AS LATE PROPOSALS OR LATE MODIFICATIONS, BUT SHALL BE HANDLED IN ACCORDANCE WITH 3-805.1 (B).'

IN THIS INSTANCE REVISED PROPOSALS WERE ACCEPTED BY THE CONTRACTING OFFICER, WHICH REQUIRED THE CONTRACTING OFFICER TO FOLLOW PROCEDURES, IN ACCORDANCE WITH ASPR 3-805.1 (B), AS FOLLOWS: ,WHENEVER NEGOTIATIONS ARE CONDUCTED WITH MORE THAN ONE OFFEROR, AUCTION TECHNIQUES ARE STRICTLY PROHIBITED; AN EXAMPLE WOULD BE INDICATING TO AN OFFEROR A PRICE WHICH MUST BE MET TO OBTAIN FURTHER CONSIDERATION, OR INFORMING HIM THAT HIS PRICE IS NOT LOW IN RELATION TO THAT OF ANOTHER OFFEROR. ON THE OTHER HAND, IT IS PERMISSIBLE TO INFORM AN OFFEROR THAT HIS PRICE IS CONSIDERED BY THE GOVERNMENT TO BE TOO HIGH. AFTER RECEIPT OF PROPOSALS, NO INFORMATION REGARDING THE NUMBER OR IDENTITY OF THE OFFERORS PARTICIPATING IN THE NEGOTIATIONS SHALL BE MADE AVAILABLE TO THE PUBLIC OR TO ANY ONE WHOSE OFFICIAL DUTIES DO NOT REQUIRE SUCH KNOWLEDGE. 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. ALL SUCH OFFERORS SHALL BE INFORMED OF THE SPECIFIED DATE (AND TIME IF DESIRED) OF THE CLOSING OF NEGOTIATIONS AND THAT ANY REVISIONS TO THEIR PROPOSALS MUST BE SUBMITTED BY THAT DATE. ALL SUCH OFFERORS SHALL BE INFORMED THAT ANY REVISION RECEIVED AFTER SUCH DATE SHALL BE TREATED AS A LATE PROPOSAL IN ACCORDANCE WITH THE -LATE PROPOSALS' PROVISIONS OF THE REQUEST FOR PROPOSALS. (IN THE EXCEPTIONAL CIRCUMSTANCES WHERE THE SECRETARY CONCERNED AUTHORIZES CONSIDERATION OF SUCH LATE PROPOSAL, RESOLICITATION SHALL BE LIMITED TO THE SELECTED OFFERORS WITH WHOM NEGOTIATIONS HAVE BEEN CONDUCTED.) ADDITION, ALL SUCH OFFERORS SHALL ALSO BE INFORMED THAT AFTER THE SPECIFIED DATE FOR THE CLOSING OF NEGOTIATION NO INFORMATION OTHER THAN NOTICE OF UNACCEPTABILITY OF PROPOSAL, IF APPLICABLE (SEE 3-508), WILL BE FURNISHED TO ANY OFFEROR UNTIL AWARD HAS BEEN MADE.'

THE CONTRACTING OFFICER ADVANCES THE FOLLOWING JUSTIFICATIONS IN SUPPORT OF HIS DETERMINATION THAT YOUR PROPOSAL OF MAY 27, 1968, SHOULD BE CONSIDERED AS A LATE PROPOSAL: "/A)ALTHOUGH THE PROTESTANTS WRITTEN MODIFICATION OF OFFER WAS RECEIVED BEFORE AWARD, IT WAS RECEIVED AFTER THE EXACT HOUR AND DATE SET FOR RECEIPT OF REVISED PROPOSALS. THE GOVERNMENT HAS DETERMINED THAT THE LATE RECEIPT WAS NOT DUE TO DELAY IN THE MAILS OR SOLELY TO MISHANDLING BY THE GOVERNMENT. "/B) SINCE THE PROTESTANTS INITIAL QUOTE WAS NOT THE OTHERWISE SUCCESSFUL- OFFER, THERE IS NO BASIS UPON WHICH TO CONSIDER OR ACCEPT THE LATE, REVISED PROPOSAL IN QUESTION, NOR WAS THERE ANY VALID BASIS OR JUSTIFICATION TO EXTEND NEGOTIATIONS A SECOND TIME MERELY BECAUSE THE PROTESTANT WISHED TO NEGOTIATE FURTHER. "/C)COMPETITION HAD ALREADY PRODUCED WHAT WAS CONSIDERED A FAIR AND REASONABLE PRICE - COMBINED HOURLY RATE OF THE LOW BIDDER WAS LOWER THAN THE PRIOR CONTRACT RATE. "/D) NOTE 24 OF CONTINUATION TO SOLICITATION INSTRUCTIONS AND CONDITIONS STATES THAT AWARD MAY BE MADE WITHOUT DISCUSSION OF PROPOSALS RECEIVED.'

WE CONCUR WITH THE CONTRACTING OFFICER THAT THE TREATMENT OF YOUR OFFER OF MAY 27, 1968, AS A LATE PROPOSAL SUBMITTED AS A REVISED OFFER AFTER THE CLOSING DATE OF MAY 23, 1968, WOULD PRECLUDE FURTHER CONSIDERATION OF SUCH OFFER SINCE IT WAS NOT RECEIVED IN THE TIMELY MANNER REQUIRED BY THE ARMED SERVICES PROCUREMENT REGULATION PROVISIONS AS SET FORTH IN THE REQUEST FOR PROPOSALS. HOWEVER, WE ARE CONCERNED WITH THE REASONING ADVANCED BY THE CONTRACTING OFFICER UNDER (D) AS JUSTIFICATION FOR REFUSING TO NEGOTIATE AFTER MAY 23, 1968. A PROVISION IN THE SOLICITATION INSTRUCTIONS AND CONDITIONS THAT AWARD MAY BE MADE WITHOUT DISCUSSION OF PROPOSALS RECEIVED PERTAINS TO INITIAL PROPOSALS. ONCE REVISED PROPOSALS HAVE BEEN RECEIVED, AS HERE, THE PROCEDURES TO BE FOLLOWED SHOULD BE IN ACCORDANCE WITH ASPR 3 805.1 (B) WHICH PROVIDES FOR NOTIFYING OFFERORS THAT ANY REVISION RECEIVED AFTER CLOSING DATE WILL BE TREATED AS A LATE PROPOSAL IN ACCORDANCE WITH THE "LATE PROPOSALS" PROVISION OF THE REQUEST FOR PROPOSALS. THE ADMINISTRATIVE RECORD BEFORE THIS OFFICE DOES NOT REVEAL THAT THE REQUISITE NOTIFICATION WAS GIVEN TO YOU OR ANY OF THE SELECTED OFFERORS. HOWEVER, WE VIEW THE FAILURE OF COMPLIANCE AS A MATTER OF PROCEDURE, NOT SUBSTANCE, WHICH IN THE CIRCUMSTANCE WOULD NOT JUSTIFY A DETERMINATION TO CANCEL THE CONTRACT. ACCORDINGLY, YOUR PROTEST MUST BE DENIED. NEVERTHELESS, WE ARE CALLING THIS MATTER TO THE ATTENTION OF THE SECRETARY OF THE AIR FORCE TO DETERMINE WHETHER FIRMS SHOULD BE RESOLICITED FOR THE SECOND YEAR SERVICES BEFORE EXERCISING THE OPTION AS THE MOST ADVANTAGEOUS ALTERNATIVE TO THE GOVERNMENT.