B-166213-/1), JUL. 18, 1969

B-166213-/1): Jul 18, 1969

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AFTER EVALUATION WAS DETERMINED TO BE OUTSIDE THE COMPETITIVE RANGE BY REASON OF ITS FAILURE TO BE RESPONSIVE TO THE GOVERNMENT NEEDS. UNDER 10 U.S.C. 2304 (G) AND NASA PROCUREMENT REGULATION 3.805-1 (A) A DETERMINATION OF COMPETITIVE RANGE IS NOT LIMITED TO PRICE ALONE. BID PROTEST - CORRECTIVE ACTION IN DECISION TO NASA CONCERNING BETCO PROTEST IT IS SUGGESTED THAT IN FUTURE PROCUREMENTS WHERE A POINT EVALUATION IS TO BE USED INFORMATION AS TO THE RELATIVE WEIGHT ASSIGNED TO EACH FACTOR SHOULD BE MADE AVAILABLE TO PROSPECTIVE OFFERORS IN SUFFICIENT TIME TO ENABLE THEM TO CONSIDER SUCH FACTORS IN PREPARING THEIR PROPOSALS. THE SUBSTANCE OF YOUR PROTEST IS THAT THE CONTRACT PRICE IS APPROXIMATELY TWICE THE AMOUNT AT WHICH YOU OFFERED TO FULFILL THE PROCUREMENT REQUIREMENT FOR SUBCARRIER OSCILLATOR SUBASSEMBLIES (SCO) BY MEANS OF MINOR MODIFICATIONS TO UNITS WHICH YOU HAVE DESIGNED.

B-166213-/1), JUL. 18, 1969

BID PROTEST - COMPETITIVE RANGE DECISION TO BETCO ELECTRONICS DENYING PROTEST AGAINST AWARD OF NEGOTIATED CONTRACT BY NASA TO REACTION INSTRUMENTS, INC., LOW ACCEPTABLE OFFEROR. PROTESTANT'S PROPOSAL, AFTER EVALUATION WAS DETERMINED TO BE OUTSIDE THE COMPETITIVE RANGE BY REASON OF ITS FAILURE TO BE RESPONSIVE TO THE GOVERNMENT NEEDS. UNDER 10 U.S.C. 2304 (G) AND NASA PROCUREMENT REGULATION 3.805-1 (A) A DETERMINATION OF COMPETITIVE RANGE IS NOT LIMITED TO PRICE ALONE. BID PROTEST - CORRECTIVE ACTION IN DECISION TO NASA CONCERNING BETCO PROTEST IT IS SUGGESTED THAT IN FUTURE PROCUREMENTS WHERE A POINT EVALUATION IS TO BE USED INFORMATION AS TO THE RELATIVE WEIGHT ASSIGNED TO EACH FACTOR SHOULD BE MADE AVAILABLE TO PROSPECTIVE OFFERORS IN SUFFICIENT TIME TO ENABLE THEM TO CONSIDER SUCH FACTORS IN PREPARING THEIR PROPOSALS.

TO BETCO ELECTRONICS:

WE REFER TO YOUR PROTEST BY LETTER DATED FEBRUARY 14, 1969, AGAINST THE NEGOTIATION OF A CONTRACT WITH REACTION INSTRUMENTS, INC. (REACTION), BY THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA), GODDARD SPACE FLIGHT CENTER (GSFC), UNDER REQUEST FOR PROPOSAL (RFP) 810-77900/304.

THE SUBSTANCE OF YOUR PROTEST IS THAT THE CONTRACT PRICE IS APPROXIMATELY TWICE THE AMOUNT AT WHICH YOU OFFERED TO FULFILL THE PROCUREMENT REQUIREMENT FOR SUBCARRIER OSCILLATOR SUBASSEMBLIES (SCO) BY MEANS OF MINOR MODIFICATIONS TO UNITS WHICH YOU HAVE DESIGNED, FABRICATED AND DELIVERED. ACCORDINGLY, YOU REQUEST THAT OUR OFFICE DETERMINE WHETHER THE CONTRACT WITH REACTION IS IN THE BEST INTERESTS OF THE GOVERNMENT.

THE RFP WAS ISSUED TO 63 FIRMS ON JUNE 18, 1968, FOR A FIXED PRICE CONTRACT FOR A QUANTITY OF 90 TECHNICALLY UPDATED SCO'S AND 150 TECHNICAL MANUALS. THE SCO'S ARE TO BE USED AS REPLACEMENTS FOR THE SCO'S CURRENTLY INSTALLED IN THE MANNED SPACE FLIGHT NETWORK, AND REPLACEMENT IS NECESSARY FOR THE ACHIEVEMENT OF COMPATABILITY OF THE ITEMS WITH THE EVOLVED DESIGN OF THE LUNAR MODULE STEERABLE ANTENNA PACKAGE. AMENDMENT NO. 1 TO THE RFP, ISSUED JUNE 28, 1968, CLARIFIED THE SPECIFIED DEVIATION LINEARITY AND INCIDENTAL AMPLITUDE MODULATION (IAM) OF THE PROCUREMENT ITEM.

OFFERORS WERE INSTRUCTED IN THE RFP THAT AWARD MIGHT BE MADE WITHOUT DISCUSSIONS WITH OTHER THAN THE SUCCESSFUL OFFEROR OR AFTER LIMITED NEGOTIATIONS AND WERE THEREFORE ADVISED THAT ALL PROPOSALS SHOULD BE SUBMITTED INITIALLY ON THE BEST POSSIBLE TERMS. IN ADDITION, OFFERORS WERE INFORMED THAT THE EVALUATION OF PROPOSALS AND CONSEQUENT SOURCE SELECTION WOULD BE BASED UPON CONSIDERATION OF THE FOLLOWING FACTORS AS EVIDENCED IN THE PROPOSALS:

1. CONTRACTOR'S ABILITY TO MEET PERFORMANCE SPECIFICATIONS AND TO PROVIDE ACCEPTABLE TECHNICAL MANUALS.

2. PROPOSED TOTAL CONTRACT PRICE.

3. CONTRACTOR'S PROPOSED DELIVERY SCHEDULE.

INSTRUCTIONS RELATING TO THE TECHNICAL PORTION OF EACH PROPOSAL INCLUDED A REQUIREMENT FOR SUBMISSION OF SUFFICIENT DATA FOR A PRELIMINARY TECHNICAL EVALUATION. SUGGESTIONS AS TO THE TYPES OF INFORMATION SO REQUIRED APPEARED ON PAGES 5 AND 6 OF THE INSTRUCTIONS AND READ IN PART AS FOLLOWS:

"1. STATE THE METHOD BY WHICH YOU PROPOSE TO SOLVE THE TECHNICAL PROBLEMS OF THIS PROJECT. INCLUDE DETAILED DESCRIPTION, SKETCHES AND PLAN OF ATTACK, SUFFICIENTLY COMPLETE TO PERMIT ENGINEERING EVALUATION OF THE PROPOSAL.

"2. SPECIFY EXCEPTIONS TO PROPOSED TECHNICAL PROJECT REQUIREMENTS.

"3. STATE RECENT EXPERIENCE IN FIELDS RELATING TO THIS PROCUREMENT.

"4. STATE THE EQUIPMENT YOU NOW HAVE AVAILABLE FOR USE ON THIS PROJECT AND LIST SEPARATELY ANY KNOWN ADDITIONAL FACILITIES OR EQUIPMENT WHICH WILL BE REQUIRED IN THE PERFORMANCE OF THIS PROJECT. LIST ANY EXISTING GOVERNMENT FACILITIES WHICH ARE AVAILABLE TO YOU AND ARE REQUIRED FOR THE WORK.

"5. NAMES AND RESUME OF EXPERIENCE OF IMPORTANT PERSONNEL TO BE EMPLOYED ON THIS PROJECT.'

DURING THE PERIOD ALLOWED FOR SUBMISSION OF PROPOSALS, A TECHNICAL EVALUATION SCORE WAS ESTABLISHED FOR THE PROCUREMENT. THE PASSING GRADE WAS 133 OF A POSSIBLE 188 POINTS WITH PRESCRIBED MINIMUM SCORES TO BE ATTAINED IN THE AREAS OF (1) CONCEPT AND CAPABILITY, (2) DOCUMENTATION, AND (3) TECHNICAL COMPLIANCE.

NINE PROPOSALS WERE RECEIVED BY THE PROCURING ACTIVITY. AFTER AN INITIAL TECHNICAL EVALUATION, FIVE OF THE PROPOSALS, INCLUDING THE PROPOSAL OF REACTION, WERE DECLARED TO BE TECHNICALLY ACCEPTABLE WITH SCORES IN EXCESS OF 133 POINTS. YOUR PROPOSAL, WHICH PLACED EIGHTH WITH A SCORE OF 82, WAS AMONG THE FOUR PROPOSALS WITH SCORES LOWER THAN 133 POINTS WHICH WERE CLASSED AS TECHNICALLY UNACCEPTABLE AND THEREFORE NOT INCLUDED IN NEGOTIATIONS.

OF THE FIVE INITIALLY ACCEPTABLE PROPOSALS, THREE WERE DISCARDED AS TECHNICALLY UNACCEPTABLE AFTER FURTHER EVALUATION AND/OR DISCUSSION. FOLLOWING NEGOTIATIONS WITH THE TWO REMAINING OFFERORS, WHOSE PROPOSALS WERE DETERMINED TO BE ACCEPTABLE, AWARD WAS MADE ON FEBRUARY 11, 1969, TO REACTION ON THE BASIS OF ITS FINAL PRICE OF $37,000 FOR A QUANTITY OF 104 SCO'S (AN INCREASE IN DECEMBER 1968 OF 14 UNITS OVER THE ORIGINALLY SPECIFIED QUANTITY) AND THE TECHNICAL MANUALS.

EXAMINATION OF A COPY OF YOUR PROPOSAL SHOWS THAT IT INCLUDES A STATEMENT THAT YOU POSSESS EXTENSIVE EXPERIENCE IN THE DESIGN AND FABRICATION OF ALL TYPES OF VOLTAGE CONTROLLED OSCILLATORS UTILIZED IN TELEMETRY AND DATA PROCESSING SYSTEMS AS WELL AS A SPECIFIC STATEMENT THAT THE EQUIPMENT COVERED BY THE RFP SPECIFICATIONS REPRESENTS ELECTRICAL PERFORMANCE WHICH MAY BE ACHIEVED WITH ONLY MINOR MODIFICATIONS OF UNITS WHICH YOU HAVE ALREADY DESIGNED AND FABRICATED. SEVERAL PAGES OF YOUR PROPOSAL ARE DEVOTED TO THE PERFORMANCE CHARACTERISTICS OF FOUR SUBCARRIERS MADE BY YOU AND IDENTIFIED AS MODELS BOS-106, BOS-107, BOS-109, AND BOS-111.

THE CONTRACTING OFFICER'S REPORT ON THE EVALUATION OF YOUR PROPOSAL INCLUDES THE FOLLOWING STATEMENTS:

"BETCO'S TECHNICAL PROPOSAL WAS DECLARED TO BE UNACCEPTABLE IN THE ORIGINAL TECHNICAL EVALUATION MEMORANDUM DATED SEPTEMBER 26, 1968. IT WAS RANKED EIGHTH OUT OF THE NINE RECEIVED. THE FOLLOWING TABULATION COMPARES THE BEST PERFORMANCE CHARACTERISTIC CLAIMED BY BETCO WITH THE NASA/GSFC SPECIFICATION S-814-P-5 REQUIREMENT: S-814-P-5 S 814-P-5 PERFORMANCE BETCO ELECTRONICS PARAGRAPH NO. SPECIFICATION REQUIREMENT PROPOSAL ------------- ------------ ------------ ------------------ 3.3.2 DEVIATION DEVIATION LINEARITY FOR ALL PLUS OR MINUS LINEARITY DEVIATIONS AND INPUT LEVELS 0.15 PERCENT

SHALL BE EQUAL TO OR LESS DEVIATION

THAN PLUS OR MINUS 0.1 PERCENT FROM BEST

OF FULL BANDWIDTH STRAIGHT LINE.

FROM BEST STRAIGHT LINE. 3.3.6 INCIDENTAL PEAK TO PEAK IAM IN TERMS OF

LESS THAN PLUS AMPLITUDE PERCENT OF PEAK TO PEAK SCO OUTPUT OR MINUS 5 MODULATION

WAVEFORM, AT MAX. DEVIATION PERCENT AT ANY

SHALL BE 0.2 PERCENT OR LESS FOR FREQUENCY WITHIN

ALL FREQUENCIES ABOVE 150 HZ. UP THE BANDWIDTH.

THROUGH 550 HZ., 3 PERCENT OR

LESS FOR ALL FREQUENCIES ABOVE

550 HZ. UP THROUGH 3 KHZ. 4.0 MECHANICAL PARAGRAPHS 4.1, 4.2, AND 4.3

NO INDICATION WAS REQUIREMENTS DESCRIBE THE MECHANICAL GIVEN THAT

CONFIGURATION TO BE THERE WOULD

INTERCHANGABLE WITH EXISTING BE ANY

SCO UNITS. COMPLIANCE

WITH THE

MECHANICAL

REQUIREMENTS

AND PACKAGING

SET FORTH IN

S-814-P-5.

"THE PROPOSAL DID NOT PROVIDE ANY AFFIRMATIVE EVIDENCE OF AN ABILITY TO PRODUCE AND DELIVER SCO'S WHICH WOULD MEET THE PERFORMANCE, MECHANICAL, AND PACKAGING SPECIFICATIONS. THE STATEMENT THAT THE REQUIRED UNITS CAN BE PRODUCED WITH MINOR MODIFICATIONS TO ANY ONE OF THE FOUR STANDARD MODELS DESCRIBED IS NOT SUBSTANTIATED BY BETCO. IN LIGHT OF AVAILABLE TEST RESULTS (APL TESTS RUN ON THE EXISTING NETWORK SCO-S) AND THE EXPERIENCE OF THE COGNIZANT GSFC TECHNICAL PERSONNEL, THAT ASSERTION IS CONSIDERED TO BE INCAPABLE OF SUBSTANTIATION. CONTRARY TO BETCO'S ASSERTION, ALL AVAILABLE EVIDENCE INDICATES THAT EXTENSIVE DESIGN, EFFORT, AND MAJOR MODIFICATION WOULD BE REQUIRED TO ADAPT ANY OF BETCO'S STANDARD UNITS TO MEET THE LINEARITY AND INCIDENTAL AMPLITUDE MODULATION (IAM) SPECIFICATION. THE ABSENCE OF AN EXPRESSED APPRECIATION OF THE PROBLEMS WHICH WOULD BE ENCOUNTERED AND A DETAILED PLAN FOR THEIR SOLUTION INDICATE A LACK OF TECHNICAL UNDERSTANDING OF THIS PROCUREMENT.

"TO CITE THE EXTREME EXAMPLE, PARAGRAPH 3.3.6 REQUIRES IAM TO BE 0.2 PERCENT OR LESS FOR ALL FREQUENCIES UP THROUGH 150 HZ. BETCO'S BEST VALUE FOR IAM ON ANY OF ITS FOUR STANDARD UNITS IS -LESS THAN PLUS OR MINUS 5 PERCENT.- REDUCTION OF IAM FROM APPROXIMATELY 5 PERCENT TO 0.2 PERCENT IS CONSIDERED BY GSFC TO REQUIRE MORE THAN A MINOR MODIFICATION TO AN EXISTING UNIT I.E., ANY OF THE FOUR DESCRIBED. THIS CONCLUSION IS BASED UPON EXTENSIVE STUDY AND OPERATIONAL EXPERIENCE. THE ASSERTION CANNOT BE REFUTED MORE SPECIFICALLY BECAUSE OF A FURTHER INADEQUACY IN THE PROPOSAL. NO DIAGRAMS, SKETCHES, OR DRAWINGS OF ANY TYPE WERE FURNISHED.

"IN CONCLUSION, BETCO'S TECHNICAL PROPOSAL PROVIDES NO EVIDENCE THAT THE COMPANY COULD PERFORM THE CONTRACT IN QUESTION. THE PROPOSAL WAS PHYSICALLY DEFICIENT IN THAT IT INCLUDED NO DATA RESPECTING COMPANY CAPABILITIES AND FACILITIES, PERSONNEL RESUMES, LIST OF RECENT AND CURRENT CONTRACTS, OR TECHNICAL DISCUSSIONS IN DEPTH. IN THE LATTER RESPECT, IT WAS SUBSTANTIALLY DEFICIENT IN THAT IT PROVIDED NO EVIDENCE THAT BETCO EITHER UNDERSTOOD THE UNIQUE REQUIREMENTS OF THIS PROCUREMENT OR COULD PRODUCE AND DELIVER EQUIPMENT WHICH WOULD MEET THE SPECIFICATIONS. THE UNACCEPTABLE RATING ASSIGNED BY THE TECHNICAL EVALUATION HAS BEEN REVIEWED CRITICALLY BY THE CONTRACTING OFFICE AND IS ENDORSED WITHOUT RESERVATION.'

AS TO THE DIFFERENCE BETWEEN YOUR PRICE OF $19,830 FOR 90 UNITS AND THE PRICE OF $37,000 AT WHICH AWARD WAS MADE TO REACTION FOR 104 UNITS, THE CONTRACTING OFFICER STATES THAT LACKING TECHNICAL DISCUSSION AND DETAIL IN YOUR PROPOSAL, IT IS NOT POSSIBLE TO COMPARE THE RELATIVE VALUE OF WHAT REACTION, WHO SUBMITTED THE BEST TECHNICAL PROPOSAL COMPLETE WITH DISCUSSION OF THE ANTICIPATED PROBLEMS AND PLAUSIBLE METHODS FOR SOLUTION, SPECIFICALLY PROPOSED TO DELIVER AND WHAT YOU STATED YOU COULD DELIVER.

IN VIEW OF THE FACT THAT YOUR PROPOSAL WAS NOT CONSIDERED TO BE WITHIN THE COMPETITIVE RANGE BY REASON OF ITS FAILURE TO BE RESPONSIVE TO THE STATED GOVERNMENT NEEDS AND ITS BEING JUDGED TO BE TECHNICALLY UNACCEPTABLE, NASA TAKES THE POSITION THAT THE REJECTION OF YOUR PROPOSAL WAS PROPER AND RECOMMENDS THAT YOUR PROTEST BE DENIED.

10 U.S.C. 2304 (G), WHICH IS APPLICABLE TO THE PROCUREMENT IN QUESTION PROVIDES AS FOLLOWS:

"/G) IN ALL NEGOTIATED PROCUREMENTS IN EXCESS OF $2,500 IN WHICH RATES OR PRICES ARE NOT FIXED BY LAW OR REGULATION AND IN WHICH TIME OF DELIVERY WILL PERMIT, PROPOSALS SHALL BE SOLICITED FROM THE MAXIMUM NUMBER OF QUALIFIED SOURCES CONSISTENT WITH THE NATURE AND REQUIREMENTS OF THE SUPPLIES OR SERVICES TO BE PROCURED, AND WRITTEN OR ORAL DISCUSSIONS SHALL BE CONDUCTED WITH ALL RESPONSIBLE OFFERORS WHO SUBMIT PROPOSALS WITHIN A COMPETITIVE RANGE, PRICE, AND OTHER FACTORS CONSIDERED: PROVIDED, HOWEVER, THAT THE REQUIREMENTS OF THIS SUBSECTION WITH RESPECT TO WRITTEN OR ORAL DISCUSSIONS NEED NOT BE APPLIED TO PROCUREMENTS IN IMPLEMENTATION OF AUTHORIZED SET-ASIDE PROGRAMS OR TO PROCUREMENTS 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 DISCUSSION 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.' NASA PROCUREMENT REGULATION 3.805- 1 (A) IS CONSISTENT WITH THE STATUTE.

IN APPLYING SUCH PROVISIONS TO NEGOTIATED PROCUREMENTS WE HAVE RECOGNIZED, PARTICULARLY WITH RESPECT TO TECHNICAL CONSIDERATIONS, THAT THE DETERMINATION OF COMPETITIVE RANGE, WHICH IS NOT LIMITED TO AN APPRAISAL OF PRICE ALONE, IS PRIMARILY A MATTER OF ADMINISTRATIVE DISCRETION WHICH WILL NOT BE DISTURBED IN THE ABSENCE OF A CLEAR SHOWING THAT SUCH DETERMINATION WAS AN ARBITRARY ABUSE OF DISCRETION. B-166052, MAY 20, 1969, AND DECISIONS THEREIN CITED. B-165488, JANUARY 17, 1969; 47 COMP. GEN. 29 (1967).

BASED ON THE REPORTED FACTS, WE ARE UNABLE TO CONCLUDE THAT THE DETERMINATION BY THE NASA PROCUREMENT AND TECHNICAL OFFICIALS THAT YOUR PROPOSAL WAS NOT ACCEPTABLE AND THEREFORE NOT WITHIN THE COMPETITIVE RANGE WAS IMPROPER. HOWEVER, TO THE EXTENT THAT OFFERORS WERE NOT INFORMED OF THE WEIGHTS TO BE ASSIGNED TO VARIOUS FACTORS INVOLVED IN THE TECHNICAL EVALUATION OF THE PROPOSALS IT IS OUR VIEW THAT THE PROCUREMENT PROCEDURES WERE DEFICIENT. ACCORDINGLY, BY LETTER OF TODAY, WE ARE SUGGESTING TO THE ADMINISTRATOR OF NASA THAT IN FUTURE PROCUREMENTS IN WHICH AN EVALUATION FORMULA IS TO BE USED, INFORMATION AS TO THE RELATIVE IMPORTANCE ASSIGNED TO EACH FACTOR IN EVALUATION SHOULD BE CONVEYED TO PROSPECTIVE OFFERORS IN SUFFICIENT TIME TO ENABLE THE OFFERORS TO GIVE CONSIDERATION TO SUCH FACTORS IN PREPARING THEIR PROPOSALS.

IN THE CIRCUMSTANCES, AND ABSENT ANY INDICATION OF RECORD THAT THE NEGOTIATIONS WITH THE TWO OFFERORS WHOSE PROPOSALS WERE ULTIMATELY DEEMED TO BE ACCEPTABLE OR THE DETERMINATIONS THAT THE REMAINING PROPOSALS WERE TECHNICALLY UNACCEPTABLE WERE NOT MADE IN GOOD FAITH, WE SEE NO SUPPORT FOR A CONCLUSION THAT THE AWARD TO REACTION, WHO SUBMITTED THE LOWEST PRICED ACCEPTABLE PROPOSAL, WAS NOT IN THE INTEREST OF THE GOVERNMENT.