B-166532, APRIL 7, 1970, 49 COMP. GEN. 668

B-166532: Apr 7, 1970

Additional Materials:

Contact:

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

 

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

REVIEW BY THE UNITED STATES GENERAL ACCOUNTING OFFICE ALTHOUGH GENERALLY THE CONTRACTING PRACTICES AND PROCEDURES EMPLOYED BY PRIME CONTRACTORS IN THE AWARD OF SUBCONTRACTS ARE NOT SUBJECT TO THE STATUTORY AND REGULATORY REQUIREMENTS WHICH GOVERN CONTRACT PROCUREMENT BY THE UNITED STATES. CONCLUDED THE NEGOTIATIONS UNDER THE THIRD SOLICITATION BASED ON REQUIRED REVISED SPECIFICATIONS WERE NOT PREJUDICIAL TO THE PROTESTANT. PROJECTS 2709 AND 2710 WERE GENERATED BY MODIFICATION NO. 27 TO THE CONTRACT. STEPS TO FULFILL THIS REQUIREMENT WERE INITIATED BY REQUEST FOR QUOTATIONS (RFQ) MP-X-2709 & 2710 DATED OCTOBER 1. THIS SOLICITATION WAS CANCELED AND FOLLOWED BY RFQ MP-X-2709/10 DATED JANUARY 24.

B-166532, APRIL 7, 1970, 49 COMP. GEN. 668

CONTRACTS -- SUBCONTRACTS -- ADMINISTRATIVE APPROVAL -- REVIEW BY THE UNITED STATES GENERAL ACCOUNTING OFFICE ALTHOUGH GENERALLY THE CONTRACTING PRACTICES AND PROCEDURES EMPLOYED BY PRIME CONTRACTORS IN THE AWARD OF SUBCONTRACTS ARE NOT SUBJECT TO THE STATUTORY AND REGULATORY REQUIREMENTS WHICH GOVERN CONTRACT PROCUREMENT BY THE UNITED STATES, IN VIEW OF THE CLAUSE IN A CONTRACT FOR THE OPERATION OF AN AMMUNITION PLANT THAT PROVIDED FOR GOVERNMENT APPROVAL PRIOR TO AWARD OF A SUBCONTRACT, THE UNITED STATES GENERAL ACCOUNTING OFFICE REVIEWED THE CANCELLATION OF TWO REQUESTS FOR QUOTATIONS (RFQ) AND THE ISSUANCE OF A THIRD SOLICITATION BY THE PRIME CONTRACTOR, AND EVEN THOUGH CRITICIZING THE FAILURE TO NOTIFY THE PROTESTING SUBCONTRACTOR OF THE REJECTION OF ITS BID UNDER THE FIRST RFQ BECAUSE OF A NEGATIVE GOVERNMENT PREAWARD SURVEY AND ITS ERRONEOUS USE TO EXCLUDE THE SUBCONTRACTOR FROM PARTICIPATING IN THE SECOND RFQ, CONCLUDED THE NEGOTIATIONS UNDER THE THIRD SOLICITATION BASED ON REQUIRED REVISED SPECIFICATIONS WERE NOT PREJUDICIAL TO THE PROTESTANT.

TO THE SECRETARY OF THE ARMY, APRIL 7, 1970:

BY LETTERS, WITH ENCLOSURES, DATED MAY 27, 1969, AND JANUARY 21, 1970, THE DEPUTY DIRECTOR OF PROCUREMENT & PRODUCTION AND THE DEPUTY DIRECTOR FOR PROCUREMENT, DIRECTORATE OF REQUIREMENTS AND PROCUREMENT, HEADQUARTERS UNITED STATES ARMY MATERIEL COMMAND (AMC), WASHINGTON, D.C., RESPECTIVELY, FURNISHED OUR OFFICE WITH ADMINISTRATIVE REPORTS RELATIVE TO THE PROTEST OF LOMBARD CORPORATION AGAINST AWARD TO ANY OTHER OFFEROR UNDER PROJECTS 2709 AND 2710, ISSUED BY CHAMBERLAIN MANUFACTURING CORPORATION IN ITS CAPACITY AS CONTRACTOR-OPERATOR OF THE SCRANTON ARMY AMMUNITION PLANT UNDER COST-REIMBURSABLE FACILITIES CONTRACT NO. DA-36-034-AMC-0163(A), AS AMENDED, WITH THE UNITED STATES ARMY AMMUNITION PROCUREMENT AND SUPPLY AGENCY (APSA), JOLIET, ILLINOIS.

PROJECTS 2709 AND 2710 WERE GENERATED BY MODIFICATION NO. 27 TO THE CONTRACT. BY THE TERMS OF THIS AMENDMENT, CHAMBERLAIN AGREED TO PROCURE AND INSTALL AT SCRANTON TWO PRESS LINES, WITH ASSOCIATED PARTS, FOR THE PRESENT PURPOSE OF FORGING 155-MM. PROJECTILES. STEPS TO FULFILL THIS REQUIREMENT WERE INITIATED BY REQUEST FOR QUOTATIONS (RFQ) MP-X-2709 & 2710 DATED OCTOBER 1, 1968. THIS SOLICITATION WAS CANCELED AND FOLLOWED BY RFQ MP-X-2709/10 DATED JANUARY 24, 1969. DURING THE EVALUATION OF PROPOSALS RECEIVED IN RESPONSE TO THIS SECOND SOLICITATION, LOMBARD BY TELEGRAM OF MARCH 26, 1969, AND LETTER OF APRIL 4, 1969, REQUESTED OUR REVIEW OF THE PROCUREMENT. LOMBARD'S REQUEST WAS SUPPLEMENTED BY LETTERS DATED JUNE 16 AND 20, 1969, FROM ITS COUNSEL, SELLERS, CONNER & CUNEO.

GENERALLY, COUNSEL FOR LOMBARD MAINTAINED THAT THE CANCELLATION OF THE FIRST SOLICITATION WAS ERRONEOUS AND FURTHER ALLEGED THAT LOMBARD WAS UNFAIRLY EXCLUDED FROM COMPETITION ON THE SECOND SOLICITATION. IT WAS URGED THAT WE SHOULD DIRECT REINSTATEMENT OF THE FIRST SOLICITATION FOR THE PURPOSE OF MAKING AWARD TO LOMBARD THEREUNDER, OR, AT THE VERY LEAST, THAT THE REQUIREMENT BE RESOLICITED AND LOMBARD AFFORDED AN EQUAL OPPORTUNITY TO PARTICIPATE.

ON MARCH 31, 1969, CHAMBERLAIN WAS REQUESTED BY THE ARMY TO SUSPEND ACTION UNDER THE SECOND SOLICITATION. ON JULY 9, 1969, A CONFERENCE WAS HELD IN OUR OFFICE TO DISCUSS LOMBARD'S OBJECTIONS. REPRESENTATIVES OF CHAMBERLAIN SCRANTON ARMY AMMUNITION PLANT, APSA, HEADQUARTERS AMC AND COUNSEL FOR LOMBARD WERE IN ATTENDANCE. AT THIS CONFERENCE, REPRESENTATIVES OF OUR OFFICE RAISED CERTAIN OBJECTIONS (WHICH WILL BE DISCUSSED INFRA) RELATIVE TO THE EXCLUSION OF LOMBARD AND THE ADEQUACY OF THE FIRST AND SECOND SOLICITATIONS. SUBSEQUENTLY, WE WERE ADVISED BY LETTER DATED SEPTEMBER 22, 1969, FROM THE DIRECTOR OF PROCUREMENT AND PRODUCTION, AMC, THAT THE SECOND SOLICITATION HAD BEEN CANCELED AND ALL SOURCES, INCLUDING LOMBARD, HAD BEEN RESOLICITED. THIS WAS ACCOMPLISHED BY RFQ MP-X-2709/10-C DATED AUGUST 20, 1969.

ALTHOUGH LOMBARD PARTICIPATED IN THE THIRD SOLICITATION, ITS PROPOSAL WAS DETERMINED TO BE NONRESPONSIVE AND WAS REJECTED. BY LETTER OF DECEMBER 10, 1969, COUNSEL FOR LOMBARD FORMALLY RENEWED ITS PROTEST AGAINST AWARD TO ANY OTHER OFFEROR AND FURTHER ACTION UNDER THE THIRD SOLICITATION HAS BEEN SUSPENDED BY THE ARMY PENDING OUR DECISION. COUNSEL CONTINUES TO MAINTAIN THAT AWARD SHOULD BE MADE TO LOMBARD UNDER THE FIRST SOLICITATION, OR, WITH RESPECT TO THE THIRD SOLICITATION, THAT LOMBARD SHOULD, AS STATED IN ITS LETTER OF MARCH 17, 1970, BE GIVEN A "CONDITIONAL AWARD" AND THAT FURTHER NEGOTIATIONS BE CONDUCTED WITH LOMBARD BY CHAMBERLAIN.

FROM OUR REVIEW OF THE RECORD BEFORE US, WE MUST DENY LOMBARD'S PROTESTS; HOWEVER, WE BELIEVE THE CIRCUMSTANCES OF THIS PROCUREMENT AS DISCUSSED BELOW WARRANT YOUR REVIEW AND POSSIBLE CORRECTIVE ACTION INSOFAR AS SUBCONTRACT PROCUREMENTS BY PRIME CONTRACTORS ARE CONCERNED.

WITH RESPECT TO THE SCOPE OF OUR REVIEW, IT MUST BE ACKNOWLEDGED AT THE OUTSET THAT, AS THE ADMINISTRATIVE REPORTS HAVE EMPHASIZED, BY THE TERMS OF ITS CONTRACT WITH APSA, CHAMBERLAIN IS AN INDEPENDENT CONTRACTOR AND NOT A PURCHASING AGENT OF THE UNITED STATES. IN VIEW OF THIS STATUS, WE HAVE RECOGNIZED THAT THE CONTRACTING PRACTICES AND PROCEDURES EMPLOYED BY PRIME CONTRACTORS OF THE UNITED STATES IN THE AWARD OF SUBCONTRACTS ARE GENERALLY NOT SUBJECT TO THE STATUTORY AND REGULATORY REQUIREMENTS WHICH WOULD GOVERN DIRECT PROCUREMENT BY THE UNITED STATES. 41 COMP. GEN. 424 (1961); 47 ID. 223 (1967). CHAMBERLAIN'S STATUS MUST, OF COURSE, BE CONSIDERED IN LIGHT OF THE PROVISIONS OF THE CONTRACT. IN ACCORDANCE WITH PARAGRAPHS 23-201.2 AND 7-702.33 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), CHAMBERLAIN'S CONTRACT WITH APSA CONTAINS THE CLAUSE ENTITLED "SUBCONTRACTS (1967 APR)," PRESCRIBED IN ASPR 7-203.8(A). THIS CLAUSE REQUIRES GOVERNMENT APPROVAL PRIOR TO CHAMBERLAIN'S AWARD OF A SUBCONTRACT OF THE MAGNITUDE INVOLVED IN THIS PROCUREMENT.

WE HAVE EXPRESSED THE VIEW THAT APPROVAL SHOULD NOT BE GRANTED IF THE AWARD WOULD BE PREJUDICIAL TO THE INTERESTS OF THE UNITED STATES, PARTICULARLY SINCE THE COST OF THE PROCUREMENT WILL ULTIMATELY BE BORNE BY THE UNITED STATES. 37 COMP. GEN. 315 (1957); 36 ID. 311 (1956). SUCH DETERMINATION WILL NOT BE QUESTIONED BY OUR OFFICE IN THE ABSENCE OF ILLEGALITY OR A SHOWING THAT A PROPOSED AWARD IS DEFINITELY AGAINST THE INTERESTS OF THE UNITED STATES. 37 COMP. GEN. 315, SUPRA, AT PAGE 318.

THE QUESTION OF WHETHER SUBCONTRACT APPROVAL WOULD BE PREJUDICIAL TO THE INTERESTS OF THE UNITED STATES IS ONE THAT MUST BE RESOLVED BY THE RESPONSIBLE CONTRACTING OFFICIALS OF THE GOVERNMENT AFTER A THOROUGH CONSIDERATION OF THE PARTICULAR FACTS AND CIRCUMSTANCES OF EACH PROCUREMENT. 46 COMP. GEN. 142 (1966). GENERALLY, WE BELIEVE THAT THE FRAME OF REFERENCE GUIDING SUCH DETERMINATION SHOULD BE THE FEDERAL NORM THAT IS EMBODIED IN THE PROCUREMENT STATUTES AND IMPLEMENTING REGULATIONS. CF. ASPR 23-202. NEVERTHELESS, IT IS EVIDENT FROM THE EXISTENCE OF PERMISSIBLE VARIATIONS IN PRIME CONTRACTING PRACTICES AND PROCEDURES THAT EVERY DETAIL OF THE FEDERAL NORM IS NOT FOR APPLICATION. (THIS IS NOT TO SAY, HOWEVER, THAT WHERE, AS A RESULT OF GOVERNMENT INTERVENTION, THE PRIME CONTRACTOR'S PROCUREMENT PRACTICES AND PROCEDURES MIRROR FEDERAL PROCUREMENT PROCEDURES, THE FEDERAL NORM SHOULD NOT BE APPLIED (CF. 36 COMP. GEN. 311, SUPRA), OR, FOR THAT MATTER, THAT THIS NORM SHOULD NOT BE ADOPTED AND APPLIED WHEREVER FEASIBLE AND PRACTICABLE UNDER THE CIRCUMSTANCES AND CONDITIONS OF THE PRIME CONTRACT.)

FOR THE PURPOSES OF OUR INQUIRY HERE, THE INITIAL ADMINISTRATIVE REPORT CONTAINS THE FOLLOWING STATEMENT BY THE CONTRACTING OFFICER'S REPRESENTATIVE, WHICH INDICATES GENERALLY CHAMBERLAIN'S SUBCONTRACTING PROCEDURES:

CHAMBERLAIN MANUFACTURING CORPORATION EFFECTS PROCUREMENT BY THE SEALED BID METHOD, WHEREBY A SPECIFICATION AND REQUEST FOR QUOTAS IS ISSUED TO INDUSTRY, AND SEAL BID OPENING TIMES ARE SPECIFIED. BIDS ARE OPENED IN ACCORDANCE WITH PROVISIONS OF ASPR, BY SEAL BID COMMITTEE, TECHNICAL EVALUATION MADE BY CHAMBERLAIN MANUFACTURING CORPORATION, AND A RECOMMENDATION MADE TO THE GOVERNMENT FOR AWARD OF CONTRACT. AFTER GOVERNMENT EVALUATION AND CONCURRENCE, AWARD IS THEN MADE BY CHAMBERLAIN MANUFACTURING CORPORATION.

ALTHOUGH THE FOREGOING WOULD SUGGEST THAT FORMAL ADVERTISING PROCEDURES ARE IN EFFECT, WE WERE INFORMALLY ADVISED THAT CHAMBERLAIN DOES NOT DISCLOSE PRICES AND RESERVES THE RIGHT TO DISCUSS ALL ASPECTS OF RESPONSES RECEIVED FROM OFFERORS. IN VIEW OF THIS ADVICE, A DECISION BY CONTRACTING OFFICIALS TO APPROVE AN AWARD RECOMMENDATION BY CHAMBERLAIN SHOULD BE GUIDED BY THE GENERAL PRINCIPLES PERTAINING TO CONTRACTS NEGOTIATED DIRECTLY BY THE GOVERNMENT. IN THIS CONNECTION, THE TOUCHSTONE OF FEDERALLY NEGOTIATED PROCUREMENTS IS ARTICULATED IN 10 U.S.C. 2304(G), AS FOLLOWS:

*** PROPOSALS, INCLUDING PRICE, 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 *** AT THIS POINT, WE MUST NOTE THAT INSOFAR AS THE FIRST AND SECOND SOLICITATIONS ARE CONCERNED, THE RECORD SUGGESTS A RELUCTANCE TO UTILIZE THE NEGOTIATION RIGHT RESERVED BY CHAMBERLAIN, PARTICULARLY WHEN CONTRASTED WITH THE CONDUCT OF NEGOTIATIONS UNDER THE THIRD SOLICITATION.

TURNING NOW TO THE MERITS OF THE PROTEST, THE RECORD CONTAINS A STATEMENT PREPARED BY CHAMBERLAIN WHICH OUTLINES ITS VIEW OF THE EVENTS LEADING UP TO LOMBARD'S PROTEST, THE PERTINENT PORTIONS OF WHICH ARE AS FOLLOWS:

2. SELECTION OF PROSPECTIVE SOURCES WAS ACCOMPLISHED BY CHAMBERLAIN THROUGH THE USE OF THOMAS REGISTER, MAC RAE'S BLUE BOOK, AND THE CONOVER MAST DIRECTORIES, COUPLED WITH CHAMBERLAIN'S EXPERIENCE IN THE FORGING FIELD. *** CONCERNS WERE INVITED TO SUBMIT SEALED PROPOSALS BY THE CLOSE OF BUSINESS OCTOBER 25, 1968, WITH OPENING SET FOR OCTOBER 28, 1968.

3. PROPOSALS WERE RECEIVED FROM LOMBARD CORPORATION OF YOUNGSTOWN, OHIO AND VERSON ALL STEEL PRESS COMPANY OF CHICAGO, ILLINOIS. BOTH PROPOSALS WERE PRECEDED BY TELEGRAM BIDS DATED OCTOBER 25, 1969. FORMAL PROPOSALS DATED OCTOBER 25, 1969 FROM LOMBARD AND OCTOBER 29, 1969 FROM VERSON WERE RECEIVED BY CHAMBERLAIN.

5. THE LOMBARD BID PRICE WAS VIEWED BY CHAMBERLAIN MANUFACTURING CORPORATION AS BEING EXTRAORDINARILY LOW. IN RESPONSE TO CHAMBERLAIN MANUFACTURING CORPORATION'S TELEPHONE REQUEST, LOMBARD PROVIDED BY LETTER DATED NOVEMBER 6, 1968 AND RECEIVED NOVEMBER 11, 1968, ITS BACKGROUND OF PAST PERFORMANCES. IN THE INTERIM, CONSIDERING THAT THE GOVERNMENT'S OWN COST ESTIMATE FOR THE SYSTEM WAS (SUBSTANTIALLY HIGHER THAN LOMBARD'S PRICE), TOGETHER WITH EXPERIENCE IN RECENT PRESS PROCUREMENTS, CHAMBERLAIN MANUFACTURING CORPORATION BELIEVED THERE WAS CAUSE TO INVESTIGATE FURTHER. AS A RESULT A DUN AND BRADSTREET REPORT WAS REQUESTED AND RECEIVED BY CHAMBERLAIN MANUFACTURING CORPORATION ON NOVEMBER 4, 1968. THE REPORT ONLY AMPLIFIED CHAMBERLAIN'S DOUBTS OF FINANCIAL RESPONSIBILITY.

6. CHAMBERLAIN MANUFACTURING CORPORATION, REALIZING THE IMPORTANCE OF THE PRESSES TO ITS OWN PRODUCTION NEEDS AND, MORE IMPORTANT, TO THE FUTURE NEEDS OF THE GOVERNMENT, WAS NOT WILLING TO COMMIT A CONTRACT OF THE SIZE CONTEMPLATED UNTIL THERE WAS SUFFICIENT ASSURANCE OF RESPONSIBILITY. CONSEQUENTLY, ON NOVEMBER 14, 1968, IN A LETTER TO THE (CONTRACTING OFFICER'S REPRESENTATIVE) AT SCRANTON ARMY AMMUNITION PLANT GOVERNMENT GUIDANCE WAS REQUESTED. IN RESPONSE, THE GOVERNMENT REQUESTED THE (DEFENSE CONTRACT ADMINISTRATION SERVICES OFFICE (DCASO)) IN AKRON TO PERFORM A PRE-AWARD SURVEY OF THE LOMBARD CORPORATION. THE SURVEY DATED DECEMBER 17, 1968 RECOMMENDED NO AWARD.

7. CHAMBERLAIN MANUFACTURING CORPORATION WAS ADVISED ON DECEMBER 17, 1968 OF THE PRE-AWARD SURVEY RESULTS, WHICH ADVICE WAS FORMALIZED IN A LETTER DATED DECEMBER 26, 1968 FROM THE CONTRACTING OFFICER'S REPRESENTATIVE TO CHAMBERLAIN. THE LETTER REQUESTED FURTHER THAT NO AWARD BE MADE TO LOMBARD AND THAT RESOLICITATION BE EFFECTED.

8. ON DECEMBER 18, A NOTICE OF REJECTION WAS MAILED TO VERSON. A SEARCH OF THE CHAMBERLAIN FILES DOES NOT REVEAL THAT A REJECTION NOTICE WAS DISPATCHED TO LOMBARD, ALTHOUGH THERE IS LITTLE DOUBT THAT SUCH WAS THE INTENT. CHAMBERLAIN MUST, THEREFORE, CONCLUDE THAT THROUGH ITS OWN INADVERTENCE, LOMBARD WAS NOT NOTIFIED OF THE BID REJECTION.

9. ON DECEMBER 19, 1968 A LETTER NOTICE OF INTENT TO RESOLICIT BIDS WAS SENT TO EIGHT (8) SOURCES. LOMBARD WAS NOT INCLUDED IN THE LIST OF SOLICITEES. ON JANUARY 23, 1969, FORMAL BID PACKAGES WERE SUBMITTED TO EIGHT (8) SOURCES. THE RETURN DATE FOR BIDS WAS ESTABLISHED AS FEBRUARY 28, 1969. LOMBARD WAS PRECLUDED FROM BIDDING IN THIS SECOND SOLICITATION BECAUSE OF THE PRE-AWARD FINDINGS OF DCASO. CHAMBERLAIN MANUFACTURING CORPORATION, EXERCISING ITS JUDGMENT AS AN INDEPENDENT CONTRACTOR, FELT THAT TO SOLICIT LOMBARD AGAIN WOULD BE AN IMPRUDENT ACT, PARTICULARLY AFTER THE GOVERNMENT PRE-AWARD SURVEY RECOMMENDED NO AWARD AND, TOO, AFTER THE GOVERNMENT REQUESTED SPECIFICALLY THAT NO AWARD TO LOMBARD BE MADE.

10. THE SECOND SOLICITATION RESULTED IN THE FOLLOWING RESPONSES:

OF THE FIVE (5) BIDS RECEIVED, TWO (2) WERE NOT TO SPECIFICATION, TWO (2) WERE CLOSEST TO SPECIFICATION AND ONE (1) WAS IN ACCORDANCE WITH THE SPECIFICATION.

THE RECORD SUPPORTS THE CONCLUSION TO BE DRAWN FROM CHAMBERLAIN'S CHRONOLOGY: THE GOVERNMENT DIRECTLY PARTICIPATED IN THE DECISION TO REJECT LOMBARD'S PROPOSAL AND TO EXCLUDE IT FROM PARTICIPATION IN THE RESOLICITATION. IN THIS CONNECTION, THE ACTIONS TAKEN BY THE CONTRACTING OFFICER'S REPRESENTATIVE, AND THE REASONS THEREFOR, ARE OUTLINED IN HIS STATEMENT AS FOLLOWS:

4. UPON RECEIPT OF REQUEST FOR ASSISTANCE FROM CHAMBERLAIN MANUFACTURING CORPORATION, I REQUESTED A PREAWARD SURVEY BE CONDUCTED BY DCASO IN AKRON, OHIO. UPON NOTIFICATION FROM DCASO THAT THE SURVEY WAS UNSATISFACTORY, A DECISION WAS MADE BY ME TO ADVISE CHAMBERLAIN MANUFACTURING CORPORATION TO MAKE NO AWARD. THIS DECISION WAS BASED ON THREE FACTORS. A. SEVERE DIFFERENCE IN QUOTES RECEIVED FROM TWO VENDORS.

B. THE UNSATISFACTORY PREAWARD SURVEY.

C. THE OPINION THAT TWO QUOTES DID NOT OFFER SUFFICIENT COMPETITIVE BIDDING IN A PROCUREMENT OF THIS MAGNITUDE.

5. I, THEREFORE, REQUESTED CHAMBERLAIN MANUFACTURING CORPORATION, TO PREPARE NEW SPECIFICATIONS, WITH SLIGHT MODIFICATIONS AND RESUBMIT TO INDUSTRY. THESE MODIFICATIONS PERTAIN TO THE ELIMINATION OF A FIRE RETARDANT OIL REQUIREMENT AND AN INCREASE IN THE STRUCTURAL REQUIREMENTS OF ONE PRESS. TO OBTAIN ADEQUATE BIDS, GOVERNMENT ASSISTANCE WAS OFFERED, AND UTILIZED, IN SOLICITING NEW QUOTES.

KEY, OF COURSE, TO LOMBARD'S EXCLUSION IS THE NEGATIVE PREAWARD SURVEY. WHILE CHAMBERLAIN SUGGESTS THAT IT WAS "EXERCISING ITS JUDGMENT AS AN INDEPENDENT CONTRACTOR" IN NOT SOLICITING LOMBARD, IT WAS GUIDED BY THE NEGATIVE DCASO PREAWARD SURVEY AND THE SPECIFIC REQUEST THAT NO AWARD BE MADE TO LOMBARD. MOREOVER, IT IS NOT MAINTAINED THAT CHAMBERLAIN'S DECISION NOT TO RESOLICIT LOMBARD WAS WITHOUT THE APPROVAL OF THE RESPONSIBLE GOVERNMENT OFFICIALS, FOR, AS THE CONTRACTING OFFICER'S REPRESENTATIVE STATES, "GOVERNMENT ASSISTANCE WAS OFFERED, AND UTILIZED, IN SOLICITING NEW QUOTES." THUS, WE BELIEVE THAT THE EXCLUSION OF LOMBARD CANNOT BE JUSTIFIED BY ATTRIBUTING IT SOLELY TO AN EXERCISE OF DISCRETION BY CHAMBERLAIN.

WE FURTHER BELIEVE THAT EXCLUSION ON THE BASIS OF THE PREAWARD SURVEY WAS IMPROPER. THIS VIEW WAS EXPRESSED BY REPRESENTATIVES OF OUR OFFICE DURING THE CONFERENCE ON JULY 9, 1969. IN THIS CONNECTION, THE IMPORT OF THE SURVEY IS, IN OUR OPINION, CORRECTLY SUMMARIZED BY LOMBARD'S COUNSEL IN A LETTER OF JUNE 16, 1969:

THE REPORT OF THE INDUSTRIAL SPECIALIST *** FOUND THAT LOMBARD IS TECHNICALLY CAPABLE, HAS A SATISFACTORY PERFORMANCE RECORD, AND IS CURRENT ON TWO OTHER GOVERNMENT CONTRACTS. NEVERTHELESS, THE OVER-ALL RECOMMENDATION WAS FOR NO AWARD BECAUSE AT THE TIME OF THE SURVEY LOMBARD HAD NO FIRM QUOTES FROM VENDORS AND COULD NOT STATE WHICH SUBCONTRACTORS WOULD BE UTILIZED. SIMILARLY, THE ENGINEERING EVALUATION *** FOUND THAT LOMBARD'S PROPOSED SYSTEM MET THE REQUIREMENTS OF THE SPECIFICATION, THAT LOMBARD IS TECHNICALLY CAPABLE OF PROVIDING ENGINEERING FOR THE PROPOSED SYSTEM, BUT THAT THE PRODUCING SUBCONTRACTOR WAS NOT KNOWN AT THAT TIME. FINALLY, THE PRE AWARD MONITOR *** FOUND THAT LOMBARD HAS AN ADEQUATE TECHNICAL AND DESIGN STAFF AND THAT LOMBARD'S SUBCONTRACTORS CURRENTLY BEING UTILIZED FOR PRESENT GOVERNMENT PROCUREMENT ARE SATISFACTORY, BUT THAT SINCE LOMBARD PROPOSED NO SUBCONTRACTORS FOR PRODUCTION AND SINCE NO FIRM QUOTES WERE AVAILABLE FOR MATERIALS OR PARTS, NO AWARD WAS RECOMMENDED.

THE SURVEY, THEN, EVIDENCES THE LACK OF A FIRM PRICE AND THE FAILURE TO MAKE FIRM COMMITMENTS WITH LOMBARD'S PROPOSED SUBCONTRACTORS. THE RECORD FURTHER SUGGESTS TO US THAT LOMBARD'S QUOTE WAS THE RESULT OF A BUSINESS JUDGMENT, THE VALIDITY OF WHICH WAS PROTECTED TO SOME EXTENT BY THE PRICE ESCALATION PROVISION COVERING LABOR AND MATERIALS CONTAINED IN ITS PROPOSAL. FURTHER, COUNSEL'S LETTER OF JUNE 16 ALLEGES THAT THE PRICE DIFFERENTIAL BETWEEN THE LOMBARD AND VERSON QUOTES RESULTS FROM:

*** LOMBARD'S HAVING EMPLOYED A MUCH LESS EXPENSIVE ACCUMULATOR PUMP SYSTEM APPROACH. VERSON UTILIZED A DIRECT PUMPING APPROACH. LOMBARD'S APPROACH REQUIRED THE USE OF TWELVE PUMPS FOR A TOTAL OUTPUT OF 1,416 GALLONS PER MINUTE AND THREE 400 HP MOTORS AND STARTERS FOR A TOTAL OF 1,200 HP. IN HIS PRE-AWARD EVALUATION REPORT, THE GOVERNMENT ENGINEER SPECIFICALLY NOTED THAT LOMBARD CHOSE THE CENTRAL PUMP-ACCUMULATOR CONFIGURATION "IN ORDER TO ELIMINATE THE NEED FOR MANY PUMPS AND MOTORS." *** TO ACCOMPLISH THE SAME WORK, VERSON'S APPROACH REQUIRED EIGHTY-EIGHT PUMPS FOR A TOTAL OUTPUT OF 9,504 GALLONS PER MINUTE AND FORTY-FOUR 300 HP MOTORS AND STARTERS FOR A TOTAL OF 13,200 HP. ***

THIS WOULD APPEAR TO OFFER A PARTIAL EXPLANATION FOR LOMBARD'S LOW PRICE, AS IS APPARENTLY RECOGNIZED BY CHAMBERLAIN IN ITS LETTER OF DECEMBER 18, 1968, TO VERSON, WHEN IT STATED THAT THE REJECTION OF VERSON'S PROPOSAL WAS "INFLUENCED *** BY THE FACT THAT ITS PRICING WAS BASED ON DIRECT PUMPING AND FAR OUT OF LINE WITH ACCUMULATOR PRESS PRICES."

WE DO NOT QUESTION CHAMBERLAIN'S JUDGMENT THAT LOMBARD'S PRICE WAS UNREASONABLY LOW, AND, CERTAINLY, THE PREAWARD SURVEY CONFIRMS THE LACK OF PRICE DEFINITION. NEVERTHELESS, THE DEFECTS REVEALED BY THE SURVEY SUGGEST NEGOTIATION TO REMOVE THE DOUBT, RATHER THAN EXCLUSION FROM THE SUBSEQUENT RESOLICITATION.

MOREOVER, THE PROPRIETY OF LOMBARD'S EXCLUSION IS EVEN MORE QUESTIONABLE SINCE, AS CHAMBERLAIN ACKNOWLEDGED IN ITS LETTER OF NOVEMBER 14, 1969, REQUESTING GOVERNMENT ASSISTANCE, LOMBARD'S PROPOSAL "SEEMED TO BE TECHNICALLY COMPETENT." FURTHER, THE MERIT OF ITS APPROACH IS RECOGNIZED BY THE FACT THAT THE SECOND SOLICITATION EXPRESSLY DREW ATTENTION TO THE ACCUMULATOR PUMP APPROACH PROPOSED BY LOMBARD AS AN ACCEPTABLE METHOD OF MEETING THE INTENDED REQUIREMENT. HERE, WE NOTE THAT LOMBARD HAS QUITE UNDERSTANDABLY VIEWED THIS SPECIFICATION MODIFICATION AS A FURTHER INDICATION OF THE UNFAIRNESS OF ITS EXCLUSION.

OUR OBJECTIONS TO THE EXCLUSION OF LOMBARD WERE VOICED AT THE CONFERENCE OF JULY 9, 1969. IN ADDITION, WE QUESTIONED THE ADEQUACY OF THE SOLICITATIONS, PARTICULARLY FROM THE STANDPOINT OF ELICITING SUFFICIENT INFORMATIONAL RESPONSES FROM PROPOSED SOURCES TO PERMIT EVALUATION. VIEW OF OUR DOUBTS IN THIS REGARD, WE COULD INTERPOSE NO OBJECTION TO THE SUGGESTION BY CHAMBERLAIN AND ARMY REPRESENTATIVES THAT CANCELLATION AND RESOLICITATION WOULD BE THE MOST APPROPRIATE WAY OF CORRECTING THE SPECIFICATIONS, PERMITTING LOMBARD'S PARTICIPATION, AND RECOGNIZING THE CHANGED CIRCUMSTANCES SINCE THE FILING OF LOMBARD'S PROTEST.

BY LETTER DATED FEBRUARY 27, 1970, CHAMBERLAIN, AT OUR REQUEST, FORMALLY INDICATED THE REASONS, SUGGESTED BY THE RECORD, FOR REQUIRING, IN ITS JUDGMENT, RESOLICITATION, AS FOLLOWS:

FIRST: THE REQUIREMENT GREW FROM TWO (2) PRESS LINES (6 PRESSES) TO THREE (3) PRESS LINES (9 PRESSES). THIS INCREASE OF 50% IN THE REQUIREMENT LED CHAMBERLAIN TO BELIEVE THAT THE BEST INTERESTS OF THE GOVERNMENT WOULD BE BEST SUBSERVED BY AGAIN REVIEWING THE PROCUREMENT AND OBTAINING THE WIDEST OF COMPETITION.

SECONDLY: DURING THE PERIOD OF RESOLICITATION UNDER RFQ-MP-X-2709/10 DATED JANUARY 24, 1969, INDUSTRY RESPONSE INDICATED THAT THE FULLEST OF COMPETITION HAD NOT BEEN EFFECTED. AT THAT TIME THE SPECIFICATION WAS LIMITED TO PRESSES OF A HYDRAULIC TYPE. TWO COMPANIES SUBMITTED ALTERNATE BIDS TO PROVIDE A MECHANICAL TYPE PRESS TO PERFORM A DUAL OPERATION (CABBAGE AND PIERCE). SUCH A SYSTEM WOULD REDUCE THE PRESS LINE CONFIGURATION FROM THREE (3) PRESSES PER LINE TO TWO (2) PRESSES PER LINE. ALSO, THE SUGGESTED MECHANICAL PRESS SYSTEM APPEARED TO OFFER A BREAK-THROUGH IN THE HOT FORGING PROCESS, PARTICULARLY IN THE AREA OF SPEED OF OPERATIONS AND MINIMIZATION OF ANCILLARY EQUIPMENT WITH THEIR ATTENDANT MAINTENANCE PROBLEMS. AGAIN, CHAMBERLAIN VIEWED THIS DEVELOPMENT AS AN OPPORTUNITY TO WIDEN THE TOTAL COMPETITIVE BASE BY INCLUDING THAT PART OF INDUSTRY MOST KNOWLEDGEABLE IN MECHANICAL PRESS CONSTRUCTION. ***

THIRDLY: AS A RESULT OF THE FIRST AND SECOND SOLICITATIONS ON OCTOBER 1, 1968, AND JANUARY 24, 1969, RESPECTIVELY, IT BECAME EVIDENT TO CHAMBERLAIN THAT THE SPECIFICATIONS AS WRITTEN WERE INADEQUATE TO ASSURE SUCH TECHNICAL RESPONSE FROM INDUSTRY AS TO PERMIT A TOTAL AND OBJECTIVE EVALUATION PRIOR TO AWARD. ALTHOUGH THE SPECIFICATIONS PROVIDED BASIC FUNCTIONAL AND OTHER TECHNICAL REQUIREMENTS, IT LACKED TOTALLY SPECIFIC GUIDELINE REQUIREMENTS FOR TECHNICAL PROPOSAL SUBMISSION SO AS TO PERMIT NECESSARY OBJECTIVE EVALUATION.

THE SYSTEMS BEING PROCURED ARE NOT AN OFF-THE-SHELF TYPE OF EQUIPMENT. EACH SYSTEM IS, GENERALLY, SPECIALLY DESIGNED FOR THE TASK TO BE ACCOMPLISHED. ENGINEERING WISE DESIGN AND TECHNICAL APPROACH MAY VARY GREATLY. ONLY THROUGH A DETAILED TECHNICAL PROPOSAL SUCH AS ENVISIONED IN THE ULTIMATE AND LAST SPECIFICATION, MAY THE GOVERNMENT, THROUGH CHAMBERLAIN, BE ASSURED THAT A PROCUREMENT OF THIS MAGNITUDE WILL PROVIDE THE DESIRED RESULT, NAMELY, MASS PRODUCTION OF FORGINGS AT SPECIFIED PRODUCTION RATE.

THE THIRD SOLICITATION WAS DESIGNED TO REQUIRE THE DETAIL WHICH CHAMBERLAIN DETERMINED TO BE NECESSARY TO PERMIT OBJECTIVE EVALUATION. THE REQUIREMENTS OF THE SOLICITATION ARE SUMMARIZED IN A LETTER DATED JANUARY 23, 1970, FROM CHAMBERLAIN, AS FOLLOWS:

THE SPECIFICATION AND THE REQUEST FOR PROPOSAL IS SO STRUCTURED AS TO PERMIT INDUSTRY TO SUBMIT PROPOSALS ON VARIOUS ALTERNATIVES AS FOLLOWS:

1. A THREE (3) PRESS SYSTEM CONSISTING OF THREE (3) SEPARATE HYDRAULIC PRESSES TO PERFORM CABBAGE, PIERCE, AND DRAW OPERATIONS.

2. A TWO (2) PRESS SYSTEM CONSISTING OF ONE (1) MECHANICAL PRESS TO PERFORM THE CABBAGE AND PIERCE OPERATIONS AND ONE (1) HYDRAULIC PRESS TO PERFORM THE DRAW OPERATION.

3. A TWO (2) PRESS SYSTEM CONSISTING OF (1) HYDRAULIC PRESS TO PERFORM THE CABBAGE AND PIERCE OPERATIONS AND ONE (1) HYDRAULIC PRESS TO PERFORM THE DRAW OPERATION.

THE SPECIFICATION SET FORTH SPECIFICALLY CERTAIN PHYSICAL, DIMENSIONAL AND FUNCTIONAL REQUIREMENTS. IN ADDITION, THE SPECIFICATION SET FORTH A SERIES OF TECHNICAL AND PRICING DATA REQUIREMENTS TO BE SUBMITTED BY EACH OFFEROR. IN SUMMARY, AND IDENTIFIED TO EACH PARAGRAPH, THE SPECIFICATION REQUIRED THAT EACH PROPOSAL CONTAIN TECHNICAL DESCRIPTIONS, INFORMATION AND AFFIRMATIONS AS RELATE TO THE AREAS IN THE VARIOUS SECTIONS, AS FOLLOWS: PARAGRAPH 1

THE PHYSICAL, DIMENSIONAL AND FUNCTIONAL REQUIREMENTS FOR HYDRAULIC PRESSES. PARAGRAPH 2

THE PHYSICAL, DIMENSIONAL AND FUNCTIONAL REQUIREMENTS OF A MECHANICAL PRESS TO PERFORM THE CABBAGE/PIERCE OPERATIONS. PARAGRAPH 3

PARAMETERS RELATED TO TOOLING REQUIREMENTS FOR EACH PRESS SYSTEM PROPOSED. PARAGRAPH 4

PARAMETERS RELATED TO HANDLING AND TRANSFER EQUIPMENT FOR EACH PRESS SYSTEM PROPOSED.

NOTE: THE SPECIFICATION FURTHER REQUIRED THAT EACH OFFEROR SEPARATELY PRICE VARIOUS ITEMS AND SUB-ITEMS UNDER PARAGRAPHS 3 AND 4 ABOVE. PARAGRAPH 5

COMPLETE DESCRIPTIONS RELATED TO PRESS CONSTRUCTION, PROPOSED SHUTTLE DESIGN, HYDRAULIC EQUIPMENT, MOTORS, ELECTRICALS AND OTHER CONTROLS INCLUDING SUCH ITEMS AS DIMENSIONAL, FUNCTIONAL AND WEIGHT DATA. ADDITION TO THE FOREGOING, THE SPECIFICATIONS, UNDER A GENERAL HEADING "GENERAL PROSPECTUS," PROVIDES:

1. THAT THE OFFEROR SUBMIT ELEVEN (11) SEPARATE ITEMS OF PRICE AND DELIVERY DATA ON A PRICING SUMMARY FORMAT FURNISHED WITH THE SOLICITATION. THESE ELEVEN (11) ITEMS, WITH THE RELATED SUBITEMS TOTAL 89 LINES OF PRICING DATA.

2. APPROXIMATELY TWENTY-FIVE (25) SEPARATE ITEMS RELATED TO GENERAL REQUIREMENTS, INFORMATIONAL DATA AND INSTRUCTIONS.

AS WE HAVE INDICATED, LOMBARD'S PROPOSAL IN RESPONSE TO THIS SOLICITATION WAS DETERMINED BY CHAMBERLAIN TO BE NONRESPONSIVE FOR FAILURE TO PROVIDE THE DETAILED TECHNICAL AND PRICING RESPONSES. SUCH DETERMINATION HAS BEEN CONCURRED IN BY RESPONSIBLE ARMY OFFICIALS.

COUNSEL FOR LOMBARD IN ITS LETTER OF FEBRUARY 11, 1970, MAINTAINS THAT "FROM A RECOGNIZED STANDARD OF GOOD PRACTICE IN THE DESIGN OF SUCH INDUSTRIAL SYSTEMS, THE MINUTE DETAIL INSISTED UPON BY CHAMBERLAIN (IN THE THIRD SOLICITATION) IS OVERREACHING AND A WELL-LAID TRAP TO ELIMINATE LOMBARD AS A RESPONSIVE BIDDER ON THE THIRD SOLICITATION," AND SUGGESTS IN ITS LETTER OF MARCH 17, 1970, THAT "THE KIND OF DETAIL DEMANDED *** IS THAT WHICH IS CUSTOMARILY RESOLVED AFTER AWARD." IN SUPPORT OF ITS CONTENTION, COUNSEL REFERS TO THE BREVITY OF THE FIRST TWO SOLICITATIONS WHICH, AS COUNSEL EMPHASIZES, ARE EIGHT PAGES LONG. ALSO, COUNSEL HAS INCLUDED IN THE RECORD TWO RECENT SOLICITATIONS FOR THE SAME GENERAL TYPE OF EQUIPMENT, ONE ISSUED BY THE DEPARTMENT OF THE AIR FORCE AND THE OTHER BY A COMMERCIAL SOURCE, WHICH ARE EQUALLY BRIEF IN CONTENT.

AS YOU KNOW, OUR OFFICE IS NOT IN A POSITION TO RENDER THE TECHNICAL JUDGMENT REQUIRED TO RESOLVE THE ISSUES RAISED BY LOMBARD. THIS IS A MATTER APPROPRIATELY WITHIN THE PURVIEW OF THE RESPONSIBLE PROCUREMENT OFFICIALS. IT MAY BE THAT INDUSTRY PRACTICE IS MARKED BY THE INFORMALITY SUGGESTED BY COUNSEL FOR LOMBARD; NEVERTHELESS, SUCH PRACTICE DOES NOT RESTRICT THE PRIME CONTRACTOR FROM REQUIRING SUFFICIENT INFORMATION IN RESPONSES TO ITS SOLICITATIONS SO THAT THE PRIME CONTRACTOR MAY DETERMINE WHETHER THE EQUIPMENT PROPOSED OFFERS A REASONABLE EXPECTATION OF MEETING THE INTENDED REQUIREMENT PRIOR TO AWARD. INDEED, THIS IS THE POLICY GOVERNING DIRECT FEDERAL PROCUREMENT. CF. 42 COMP. GEN. 17 (1962); ASPR 3 -804. CHAMBERLAIN HAS MAINTAINED THAT THE TECHNICAL DETAIL REQUIRED BY THE THIRD SOLICITATION WAS NECESSARY TO MAKE THE FOREGOING DETERMINATION. WE VIEW THE CONCURRENCE OF THE RESPONSIBLE PROCUREMENT OFFICIALS IN THE REJECTION OF LOMBARD'S PROPOSAL AS AFFIRMATION THAT THE REQUIRED DETAIL WHICH LOMBARD FAILED TO PROVIDE WAS A MATERIAL REQUIREMENT. IN SUCH CIRCUMSTANCES, WE HAVE RECOGNIZED, GENERALLY, THAT IF REASONABLE EFFORTS TO OBTAIN THE DETAILED TECHNICAL INFORMATION REQUIRED HAVE PROVEN TO BE UNSUCCESSFUL, A REFUSAL TO CONSIDER THE PROPOSAL FURTHER IS NOT OBJECTIONABLE. CF. 39 COMP. GEN. 490 (1959); B-154848, SEPTEMBER 11, 1964; B-160330, MAY 8, 1967. WITH THIS IN MIND, WE TURN NOW TO A CONSIDERATION OF NEGOTIATION PROCEDURES EMPLOYED BY CHAMBERLAIN IN THE THIRD SOLICITATION, AND PARTICULARLY THE OPPORTUNITY AFFORDED LOMBARD TO COMPLY WITH THE SOLICITATION REQUIREMENTS. THE RECORD INDICATES THAT UNDER CHAMBERLAIN'S PROCUREMENT PLAN EACH OFFEROR WAS EXTENDED THE RIGHT OF SITE VISIT PRIOR TO PROPOSAL SUBMISSION. AFTER OPENING AND REVIEW OF PROPOSALS, EACH OFFEROR WAS SCHEDULED TO VISIT THE PLANT ON SEPARATE DAYS TO NEGOTIATE THE TECHNICAL ASPECTS OF THE PROPOSALS. SUCH DISCUSSIONS INCLUDED CLARIFICATIONS OF TECHNICAL DEFICIENCIES AND OMISSIONS. THEREAFTER, EACH OFFEROR WAS GIVEN 1 WEEK FOR FORMAL RESPONSE TO CONFIRM ITS ANSWERS OR REVISE ITS TECHNICAL DATA TO MEET THE SPECIFICATION PREREQUISITES. CHAMBERLAIN IN ITS LETTER OF FEBRUARY 27, 1970, ADVISES THAT, WITH THE EXCEPTION OF LOMBARD, "ALL OTHER PROPOSALS RECEIVED, AS FINALLY NEGOTIATED, DID COMPLY WITH THE DETAILED REQUIREMENTS FOR SUBMISSION OF TECHNICAL INFORMATION."

WITH RESPECT TO LOMBARD'S RESPONSE TO THE THIRD SOLICITATION, A MEMORANDUM DATED DECEMBER 11, 1969, FROM CHAMBERLAIN'S MANAGER OF PLANT MODERNIZATION, WHICH WAS MADE AVAILABLE TO COUNSEL FOR LOMBARD, RELATES THE CONSIDERATION ACCORDED THE LOMBARD PROPOSAL, AND THE NEGOTIATION PROCEDURES EMPLOYED WITH GREATER SPECIFICITY. FROM THIS ACCOUNT, IT APPEARS THAT ON SEPTEMBER 9, 1969, CHAMBERLAIN MADE A ROUTINE TELEPHONE CALL TO EACH PARTICIPANT TO DETERMINE IF THE PROPOSAL PACKAGE WAS RECEIVED, TO INQUIRE IF THERE WERE ANY SUMMARY QUESTIONS, TO OFFER ANY ASSISTANCE IN ANY AREAS OF INQUIRY, AND TO REMIND EACH OF THE SEPTEMBER 19, 1969, CLOSING DATE. THIS DATE WAS SUBSEQUENTLY EXTENDED TO SEPTEMBER 26, 1969. ON OCTOBER 3, 1969, A FORM LETTER SCHEDULING THE NEGOTIATION CONFERENCES WAS SENT TO EACH PARTICIPANT. LOMBARD WAS ORIGINALLY SCHEDULED ON OCTOBER 15, 1969, FOR ONE FULL DAY OF NEGOTIATION. LOMBARD CONFIRMED THIS DATE BY TELEPHONE ON OCTOBER 6, 1969. THEN, ON OCTOBER 9, LOMBARD REQUESTED THAT ITS APPOINTMENT BE CANCELED AND RESCHEDULED, PREFERABLY OCTOBER 24, 1969. CHAMBERLAIN AGREED TO MODIFY ITS SCHEDULE TO ACCOMMODATE LOMBARD TO THE EXTENT THAT THE CONFERENCE WAS RESCHEDULED TO OCTOBER 17.

PRIOR TO THIS CONFERENCE CHAMBERLAIN'S ONLY OTHER CONTACT WITH LOMBARD WAS ON SEPTEMBER 29, 1969, TO CLARIFY LOMBARD'S PRICING STRUCTURE. SEPTEMBER 30, 1969, A REPRESENTATIVE OF LOMBARD RESPONDED AND PROVIDED A PRICING FORMULA TO DETERMINE THE COST OF THE SYSTEMS PROPOSED BY LOMBARD. CHAMBERLAIN ADVISES THAT THE FORMULA FAILED TO YIELD THE REQUIRED INFORMATION. IN ADDITION TO FAILING TO PROVIDE THE REQUIRED PRICING BREAKDOWN, LOMBARD FAILED TO PROVIDE THE REQUIRED TECHNICAL INFORMATION; INSTEAD, IT ADVISED THAT IT INTENDED TO MEET THE SPECIFICATIONS AND TO THIS END MADE A BLANKET OFFER TO COMPLY WITH THE SPECIFICATIONS. IN OUR VIEW, THE BLANKET OFFER OF COMPLIANCE NEED NOT BE REGARDED AS CURING THE INFORMATIONAL DEFICIENCIES IN THE LOMBARD OFFER. 39 COMP. GEN. 490 (1959).

DURING THE NEGOTIATION CONFERENCE WITH LOMBARD, THE DEFICIENCIES IN ITS PROPOSAL WERE DISCUSSED, AND VERBAL RESPONSES WERE GIVEN BY LOMBARD TO QUESTIONS PREPARED BY CHAMBERLAIN. AT THE CONCLUSION OF THE CONFERENCE, A COPY OF THE CONFERENCE QUESTIONNAIRE WAS GIVEN LOMBARD'S REPRESENTATIVES, TOGETHER WITH SEVERAL COPIES OF THE THIRD SOLICITATION'S 2-PAGE PRICING SUMMARY. LOMBARD WAS ADVISED TO EXECUTE WRITTEN CONFIRMATION OF ALL VERBAL INFORMATION GIVEN DURING THE CONFERENCE, TO PROVIDE ANY OTHER INFORMATION REQUESTED BY THE SPECIFICATIONS AND TO DULY EXECUTE THE REQUIRED PRICING SUMMARY. SIGNIFICANTLY, LOMBARD WAS FURTHER ADVISED THAT IN ORDER TO QUALIFY FOR FURTHER CONSIDERATION, ITS RESPONSE LETTER MUST BE RECEIVED WITHIN 1 WEEK FROM THE DATE OF THE CONFERENCE.

IN RESPONSE, COUNSEL IN ITS LETTER OF MARCH 25, 1970, MAINTAINS THAT: "LOMBARD'S CLEAR UNDERSTANDING AT THE CONCLUSION OF THAT MEETING WAS THAT IT HAD SATISFIED CHAMBERLAIN AS TO THE DETAIL REQUIRED FOR THE SPECIFICATIONS EXCEPT FOR CERTAIN SPECIFIC REPLIES WHICH WERE SUBSEQUENTLY FORWARDED IN WRITING TO CHAMBERLAIN ON OCTOBER 23, 1969." BUT LOMBARD'S SUBSEQUENT RESPONSE LETTER OF OCTOBER 23 WAS APPARENTLY NOT RECEIVED UNTIL AFTER THE OCTOBER 24 DEADLINE. NEVERTHELESS, THE LETTER WAS CONSIDERED AND, AFTER EVALUATION, IT DID NOT, IN CHAMBERLAIN'S VIEW, PROVIDE THE INFORMATION PROMISED. THEREAFTER, CHAMBERLAIN IN A TELEPHONE CONVERSATION ON OCTOBER 28 ADVISED LOMBARD OF THE DEFICIENCIES IN ITS PROPOSAL. THIS RESULTED IN LOMBARD'S SUBMISSION OF A FURTHER REVISION BY LETTER DATED NOVEMBER 14, 1969, WHICH SUBMISSION, COUNSEL SUGGESTS, WAS AUTHORIZED BY CHAMBERLAIN'S REPRESENTATIVE. CHAMBERLAIN, HOWEVER, CONSIDERED THE SUBMISSION TO BE UNTIMELY AND WITHOUT TECHNICAL SUPPORT.

IN THE ABSENCE OF SUFFICIENT EVIDENCE TO THE CONTRARY, WE ARE NOT IN A POSITION TO ADOPT LOMBARD'S UNDERSTANDING OF THE CONFERENCE OF OCTOBER 17 OR THE TELEPHONE CONVERSATION OF OCTOBER 28. MOREOVER, AS WE HAVE INDICATED, WE MAY NOT DETERMINE THE TECHNICAL ADEQUACY OF LOMBARD'S RESPONSE LETTER OF OCTOBER 23. WE CAN CONCLUDE, HOWEVER, THAT LOMBARD WAS AFFORDED A COMPLETE OPPORTUNITY TO COMPETE, AND THAT IT WAS NOT PREJUDICED BY CHAMBERLAIN'S CONDUCT OF NEGOTIATIONS.

ACCORDINGLY, IF RESPONSIBLE PROCUREMENT OFFICIALS ARE SATISFIED THAT THE INFORMATIONAL DEFECTS IN THE LOMBARD PROPOSAL, AS NEGOTIATED, ARE OF SUCH SUBSTANCE THAT NO REASONABLE ASSURANCE EXISTS THAT LOMBARD WOULD FURNISH EQUIPMENT MEETING THE SOLICITATION REQUIREMENTS, CHAMBERLAIN'S REJECTION OF LOMBARD'S PROPOSAL WOULD NOT BE IMPROPER. WE WOULD APPRECIATE ADVICE AS TO ULTIMATE DISPOSITION OF THIS MATTER. A COPY OF THIS DECISION IS BEING FURNISHED TO LOMBARD'S COUNSEL OF RECORD.