B-167473(2), NOV. 13, 1969

B-167473(2): Nov 13, 1969

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SECRETARY: REFERENCE IS MADE TO A LETTER DATED AUGUST 12. ENCLOSED IS A COPY OF OUR DECISION OF TODAY TO GULTON INDUSTRIES. WE HAVE SERIOUS RESERVATIONS CONCERNING THE PROPRIETY OF THE PROVISION FOR EVALUATION OF OFFERS UNDER THE SUBJECT RFP. ENTITLED "STANDARDS FOR EVALUATION OF OFFERS": "FACTORS OF EVALUATION PERTINENT TO THIS REQUIREMENT ARE THOSE WHICH ARE SET FORTH BELOW. WHILE CERTAIN FACTORS ARE MORE APPLICABLE TO THIS REQUIREMENT THAN OTHERS. THE GOVERNMENT RESERVES THE RIGHT OF SUCH FLEXIBILITY IN EVALUATION AS IS NECESSARY TO ASSURE PLACEMENT OF THE CONTRACT IN THE BEST INTEREST OF THE GOVERNMENT. QUOTED UNIT PRICES: CONSIDERATION OF BASIC UNIT PRICES WILL COVER COMPLETE ANALYSIS OF COSTS. 2.

B-167473(2), NOV. 13, 1969

SPECIFICATIONS--EVALUATION FACTORS--WEIGHTED AVERAGE WHERE REQUEST FOR PROPOSALS INCLUDED CLAUSE ENTITLED "STANDARDS FOR EVALUATION OF OFFERS," GAO HAS SERIOUS RESERVATIONS CONCERNING PROPRIETY OF PROVISION FOR EVALUATION OF OFFERS AND SUGGESTS THAT AMBIGUOUS AND MISLEADING PROVISIONS FOR EVALUATION CRITERIA BE ELIMINATED FROM FUTURE SOLICITATIONS. BECAUSE SOUND PROCUREMENT POLICY DICTATES THAT OFFERORS BE INFORMED OF ALL EVALUATION FACTORS AND RELATIVE WEIGHTS TO BE ATTACHED TO EACH FACTOR, CORRECTIVE MEASURES SHOULD BE TAKEN IN FUTURE SIMILAR PROCUREMENTS TO MORE CLEARLY INFORM OFFERORS OF NATURE AND RELATIVE WEIGHTS OF EVALUATION FACTORS APPLICABLE TO PROPOSAL.

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED AUGUST 12, 1969, FROM MR. PAUL E. ATWOOD, ACTING DEPUTY DIRECTOR OF PROCUREMENT AND PRODUCTION, ARMY MATERIEL COMMAND, FURNISHING A REPORT IN CONNECTION WITH A PROTEST BY GULTON INDUSTRIES, INC; AGAINST AWARD OF A CONTRACT UNDER REQUEST FOR PROPOSALS NO. DAAA 26-69-R-0446, ISSUED BY THE PROCUREMENT AND PRODUCTION DIRECTORATE, PICATINNY ARSENAL, DOVER, NEW JERSEY.

ENCLOSED IS A COPY OF OUR DECISION OF TODAY TO GULTON INDUSTRIES, INC. ALTHOUGH FOR THE REASONS STATED WE DENIED GULTON'S PROTEST, WE HAVE SERIOUS RESERVATIONS CONCERNING THE PROPRIETY OF THE PROVISION FOR EVALUATION OF OFFERS UNDER THE SUBJECT RFP. PAGE 10 OF THE RFP CONTAINED THE FOLLOWING CLAUSE, ENTITLED "STANDARDS FOR EVALUATION OF OFFERS":

"FACTORS OF EVALUATION PERTINENT TO THIS REQUIREMENT ARE THOSE WHICH ARE SET FORTH BELOW. HOWEVER, WHILE CERTAIN FACTORS ARE MORE APPLICABLE TO THIS REQUIREMENT THAN OTHERS, THE GOVERNMENT RESERVES THE RIGHT OF SUCH FLEXIBILITY IN EVALUATION AS IS NECESSARY TO ASSURE PLACEMENT OF THE CONTRACT IN THE BEST INTEREST OF THE GOVERNMENT.

"A. PRICE EVALUATION FACTORS

1. QUOTED UNIT PRICES: CONSIDERATION OF BASIC UNIT

PRICES WILL COVER COMPLETE ANALYSIS OF COSTS.

2. DISCOUNTS: CASH DISCOUNTS PROVIDING A MINIMUM

TIME OF TEN (10) DAYS FOR PAYMENT WILL BE DEDUCTED

FROM UNIT PRICES WHEN EVALUATING OFFERS.

"B. NON-PRICE EVALUATION FACTORS: (ADMINISTRATIVE FACTORS

TO BE CONSIDERED IN MAKING AN AWARD UNDER THIS

SOLICITATION).

1. RECORD IN PERFORMING OTHER GOVERNMENT CONTRACTS.

2. AVAILABLE CAPACITY FOR PERFORMING THE PROPOSED AWARD

AND ABILITY TO MEET THE DELIVERY SCHEDULE.

"NOTE:

NOTWITHSTANDING ANY OTHER PROVISIONS SET FORTH ABOVE IN THIS

SOLICITATION, FACTORS IN EVALUATION OF OFFERS RECEIVED IN

RESPONSE HERETO, SHALL BE EVALUATED IN ACCORDANCE WITH

'STANDARDS FOR EVALUATIONS OF OFFERS.'" ALL OF THE CRITERIA MENTIONED ABOVE MAY PROPERLY BE CONSIDERED IN THE EVALUATION OF PROPOSALS. ASPR 3- 101 (I)-(V). HOWEVER, AS WE STATED IN OUR LETTER OF TODAY TO GULTON, A "COST ANALYSIS" AS CONTEMPLATED BY 10 U.S.C. 2306 (F) AND IMPLEMENTING REGULATIONS WAS NOT REQUIRED IN THE INSTANT PROCUREMENT, SINCE THE PRESENCE OF ADEQUATE PRICE COMPETITION ELIMINATED THE NEED FOR COST OR PRICING DATA. THEREFORE, OFFERORS COULD BE MISLED BY A LITERAL READING OF THE ABOVE-QUOTED CLAUSE, WHICH WOULD PLACE A REQUIREMENT UPON THE CONTRACTING OFFICER AT VARIANCE WITH EXISTING LAW. WHILE WE BELIEVE A REASONABLE READING OF THE PROVISION IS THAT A COST OR PRICE ANALYSIS, OR BOTH, AS PERMITTED BY LAW OR REGULATION WOULD BE CONDUCTED, WE RECOMMEND THAT SUCH AMBIGUOUS OR MISLEADING PROVISIONS BE ELIMINATED FROM FUTURE SOLICITATIONS.

WE ALSO ARE CONCERNED BY THE STATEMENT IN THE ABOVE CLAUSE THAT "WHILE CERTAIN FACTORS ARE MORE APPLICABLE TO THIS REQUIREMENT THAN OTHERS, THE GOVERNMENT RESERVES THE RIGHT OF SUCH FLEXIBILITY IN EVALUATION AS IS NECESSARY TO ASSURE PLACEMENT OF THE CONTRACT IN THE BEST INTEREST OF THE GOVERNMENT." THIS LANGUAGE MAKES IT IMPOSSIBLE FOR AN OFFEROR TO DISCERN WHICH OF THE FIVE CRITERIA ARE IMPORTANT, IF EVEN APPLICABLE, TO THE EVALUATION OF HIS PROPOSAL. ASPR 3-501 (B) REQUIRES THAT "SOLICITATIONS SHALL CONTAIN THE INFORMATION NECESSARY TO ENABLE A PROSPECTIVE OFFEROR TO PREPARE A PROPOSAL OR QUOTATION PROPERLY."

OUR OFFICE HAS REPEATEDLY HELD THAT SOUND PROCUREMENT POLICY DICTATES THAT OFFERORS BE INFORMED OF ALL EVALUATION FACTORS AND THE RELATIVE WEIGHTS TO BE ATTACHED TO EACH FACTOR. B-167175, OCTOBER 13, 1969; B- 166213, JULY 18, 1969; B-166052, JULY 11, 1969; B-164434, NOVEMBER 13, 1968. WE DO NOT THINK THAT THIS REQUIRES THE USE OF A MATHEMATICAL FORMULA IN PROPOSAL EVALUATION. HOWEVER, THE EVALUATION CRITERIA SHOULD BE CLEARLY DESCRIBED, NOTICE SHOULD BE GIVEN AS TO ANY MINIMUM STANDARDS REQUIRED AS TO ANY PARTICULAR CRITERION, AND SOME REASONABLE INDICATION OF THE RELATIVE DEGREE OF IMPORTANCE OF THE CRITERIA SHOULD BE STATED. THEREFORE, WE URGE THAT CORRECTIVE MEASURES BE TAKEN WITH RESPECT TO FUTURE SIMILAR PROCUREMENTS TO MORE CLEARLY INFORM OFFERORS OF THE NATURE AND RELATIVE WEIGHTS OF THE EVALUATION FACTORS APPLICABLE TO THEIR PROPOSALS.

THE FILE TRANSMITTED WITH THE ACTING DEPUTY DIRECTOR'S LETTER IS RETURNED.