B-167772, SEP 10, 1969

B-167772, SEP 10, 1969

BID PROTEST - NEGOTIATIONS DECISION TO PER CORPORATION DENYING PROTEST AGAINST NEGOTIATED AWARD TO LOW OFFEROR FOR FURNISHING A TESTING SYSTEM FOR SACRAMENTO ARMY DEPOT. LOW OFFEROR ON FIRST ROUND OF NEGOTIATIONS WHO HAD UNFAVORABLE QUALITY CAPABILITY REPORT AND WHO DID NOT LOWER PRICE BUT PROTESTS FACT THAT LOW OFFEROR DID NOT RESPOND TO DATA REQUEST MAY NOT HAVE TELEGRAM INTERPRETED AS REQUEST FOR ADDITIONAL DATA. THE RECORD SUPPORTS FACT THAT SAME STRINGENT REQUIREMENTS WERE IMPOSED ON BOTH OFFERORS.

TO PER CORPORATION:

BY LETTER DATED AUGUST 22, 1969, THE ACTING DIRECTOR OF PROCUREMENT AND PRODUCTION, ARMY MATERIEL COMMAND, FORWARDED TO OUR OFFICE THE ADMINISTRATIVE FILE RELATING TO REQUEST FOR PROPOSALS (RFP) NO. DAAG0869-R -1445, ISSUED ON MARCH 28, 1969, BY THE SACRAMENTO ARMY DEPOT, SACRAMENTO, CALIFORNIA. THIS ACTION WAS TAKEN IN ACCORDANCE WITH THE SPECIFIC REQUEST CONTAINED IN YOUR LETTER OF JULY 16, 1969, TO THE CONTRACTING OFFICER.

THE REFERENCED RFP SOUGHT OFFERS ON AN "R. F. DISTRIBUTION AND TESTING SYSTEM, CONSISTING OF ANTENNA COUPLING UNITS, PHASE SHIFTING NETWORKS, POWER DIVIDER, RF SWITCH AND DUMMY ANTENNA FOR USE WITH 50 KW AM TRANSMITTER ON 810 KHZ IN ACCORDANCE WITH REQUIREMENTS AND SPECIFICATIONS SET FORTH ON PAGES 7 THRU 12 PAGES OF THE SCHEDULE." SIX PROPOSALS WERE RECEIVED BY THE CLOSING DATE OF APRIL 14, 1969. THEY WERE AS FOLLOWS:

PER CORPORATION $20,978.50

GATES RADIO COMPANY 22,600.00

CONTINENTAL ELECTRONICS MFG. CO. 28,845.00

RADIO CORPORATION OF AMERICA 41,149.00

COLLINS RADIO CO. 50,242.00

ANTENNA PRODUCTS CO. 61,043.00

BY TELEGRAM DATED APRIL 17, 1969, ALL OFFERORS WERE ADVISED THAT NEGOTIATIONS WERE OPENED AS TO PRICE, WITH SPECIFICATIONS AND DELIVERY TO REMAIN THE SAME. ON THE SAME DAY, THE PROCUREMENT OFFICE REQUESTED THE DEFENSE CONTRACT ADMINISTRATION SERVICES (DCAS) TO PERFORM A PREAWARD SURVEY ON YOUR COMPANY AS THE LOWEST INITIAL OFFEROR. BY THE SPECIFIED DATE FOR THE CLOSE OF THIS ROUND OF NEGOTIATIONS (APRIL 25), GATES HAD LOWERED ITS PRICE TO $20,990, WHILE ALL THE OTHER OFFERORS DECLINED TO MODIFY THEIR ORIGINAL PROPOSALS. BY LETTER DATED APRIL 30, 1969, THE PREAWARD SURVEY ON PER WAS FORWARDED TO THE SACRAMENTO ARMY DEPOT. THE DCAS REPORT WAS UNFAVORABLE ON THE BASIS THAT YOUR QUALITY ASSURANCE CAPABILITY WAS UNSATISFACTORY.

IT WAS DETERMINED BY THE CONTRACTING OFFICER THAT YOUR COMPANY SHOULD BE AFFORDED AN OPPORTUNITY TO REMEDY THE DEFICIENCIES IN THE AREA OF QUALITY CONTROL. THEREFORE, ON MAY 26, 1969, IDENTICAL TELEGRAMS WERE SENT TO PER AND GATES; THE TEXT OF THOSE TELEGRAMS WAS AS FOLLOWS, WITH UNDERSCORING SUPPLIED:

"REFERENCE YOUR PROPOSAL SUBMITTED IN RESPONSE TO REQUEST FOR PROPOSAL RFP NO DAAG08-69-R-1445 FOR ONE EACH RF DISTRIBUTION AND TESTING SYSTEM. NEGOTIATIONS ARE HEREBY OPENED AND CLOSING DATE IS SET AT ONE PM PDST 2 JUNE 1969 TO DISCUSS PRICE DELIVERY AND QUALITY ASSURANCE FOR TESTING CAPABILITIES OF THE EQUIPMENT AS SET FORTH IN THE SCHEDULE OF THE SOLICITATION. TESTING IS REQUIRED TO PROVE THAT THE SYSTEM AS CONSTRUCTED PERFORMS IN ACCORD WITH THE DESIGN THEORY AND THAT ALL COMPONENTS USED IN THE SYSTEM ARE RATED ABOVE THE MAXIMUM POWER FOR WHICH THEY ARE DESIGNED TO HANDLE. THESE SUBSEQUENT NEGOTIATIONS ARE NOT A REJECTION OR COUNTER PROPOSAL. THE BASIS FOR AWARD REMAINS UNCHANGED AND ANY REVISIONS TO YOUR INITIAL PROPOSAL THAT RESULT FROM THESE NEGOTIATIONS MUST BE RECEIVED PRIOR TO CLOSING DATE AND TIME AS SET FORTH ABOVE. REVISIONS RECEIVED AFTER THE DATE AND TIME SET FORTH ABOVE SHALL BE TREATED AS A LATE PROPOSAL IN ACCORDANCE WITH PARAGRAPH 8 OF STANDARD FORM 33. AFTER THE REVISED CLOSING DATE SET FORTH HEREIN NO INFORMATION WILL BE FURNISHED UNTIL AWARD IS MADE"

YOU RESPONDED IN A TELEGRAM DATED JUNE 2, 1969, WHICH STATED:

"RETEL 5/27/69 DAAG08-69-R-1445 ORIGINAL PROPOSAL AMENDED. A. SUPPLY TEST DATA SHOWING RATINGS OF ALL ELECTRICAL PARTS EXCEED MAXIMUM REQUIRED AND OR ACCORDANCE WITH PUBLISHED SPECS. B. ACCEPTED BROADCAST PRACTICE IS DESIGN APPROVAL BY COMPETENT RADIO ENGINEER OR BASED ON EQUIPMENT PERFORMANCE UNDER POWER. THEREFORE PLACE OF ACCEPTANCE TO BE INSTALLATION SITE UNDER POWER. TO PROVE PERFORMANCE PER WILL PROVIDE ENGINEER 7 DAYS AFTER NOTIFICATION THAT INSTALLATION IS COMPLETED. C. PRICE INCREASED TO $28,211. D. ALL OTHER CONDITIONS UNCHANGED."

IT APPEARS THAT GATES DID NOT MODIFY ITS REVISED OFFER AT THIS STAGE OF THE NEGOTIATIONS. ON MAY 24, 1969, DCAS WAS REQUESTED TO PERFORM A PREAWARD SURVEY ON GATES. THE REPORT, DATED JUNE 6, 1969, RECOMMENDED COMPLETE AWARD. THEREFORE, AND SINCE GATES HAD BECOME THE LOW OFFEROR BY $7,221, AWARD WAS MADE TO GATES ON JUNE 13, 1969.

IN YOUR JUNE 23, 1969, LETTER YOU STATED AS THE BASIS OF YOUR PROTEST:

"PER CORPORATION WAS ASKED IN A TELEGRAM DATED MAY 27, 1969, OPENING NEGOTIATION TO DISCUSS PRICE, DELIVERY AND QUALITY ASSURANCE FOR TESTING CAPABILITIES OF THE EQUIPMENT AS SET FORTH IN THE SCHEDULE OF THE SOLICITATION.

"TESTING IS REQUIRED TO PROVE THAT THE SYSTEM AS CONSTRUCTED PERFORMS IN ACCORDANCE WITH DESIGN THEORY.

"THAT ALL COMPONENTS USED IN THE SYSTEM ARE RATED ABOVE THE MAXIMUM POWER FOR WHICH THEY ARE DESIGNED TO HANDLE.

"OUR PROPOSAL WAS AMENDED BY TELEGRAM THAT WAS SENT ON JUNE 2, 1969 TO COMPLY WITH THE ABOVE WHICH READ AS FOLLOWS:

"A. SUPPLY TEST DATA SHOWING RATINGS OF ALL ELECTRICAL PARTS EXCEED MAXIMUM REQUIRED AND OR ACCORDANCE WITH PUBLISHED SPECS.

"B. ACCEPTED BROADCAST PRACTICE IS DESIGN APPROVAL BY COMPETENT RADIO ENGINEER OR BASED ON EQUIPMENT PERFORMANCE UNDER POWER. THEREFORE PLACE OF ACCEPTANCE TO BE INSTALLATION SITE UNDER POWER. TO PROVE PERFORMANCE PER WILL PROVIDE ENGINEER 7 DAYS AFTER NOTIFICATION THAT INSTALLATION IS COMPLETED.

"SINCE WE WERE ASKED TO PROVE AS REQUESTED BY YOUR TELEGRAM OF MAY 27TH AND OUR REPLY OF 6/2/69 CERTAIN DATA, WE BELIEVE THE SAME HAD TO BE REQUESTED OF GATES RADIO COMPANY.

"I WOULD, THEREFORE, APPRECIATE RECEIVING YOUR EARLY REPLY AS TO HOW THE GOVERNMENT REQUESTED THE SAME DATA FROM GATES RADIO COMPANY AND THEIR REPLY AS TO HOW THEY WERE GOING TO PROVIDE IT."

THE RECORD CLEARLY DEMONSTRATES THAT THE SAME TELEGRAM WAS SENT BOTH TO YOUR COMPANY AND GATES ON MAY 26. HOWEVER, THE RECORD CONTAINS NO INDICATION THAT GATES MADE ANY REPLY THERETO. THE LAST TWO PARAGRAPHS QUOTED FROM YOUR JUNE 23 LETTER REFLECT YOUR INTERPRETATION THAT "DATA" WAS BEING REQUESTED. BUT WE ARE OF THE OPINION THAT NO REPLY WAS REQUIRED. THE UNDERSCORED PORTION OF THE TELEGRAM STATED A TESTING REQUIREMENT THAT WOULD BE IMPOSED ON THE EVENTUAL CONTRACTOR; IT MERELY SET UP CRITERIA, WHICH CRITERIA WOULD NOT BE EMPLOYED UNTIL AFTER AWARD AND DURING THE PERFORMANCE PHASE OF THE PROCUREMENT. AS SUCH, IT AMOUNTED TO NO MORE THAN A STATEMENT OF FACT AND DID NOT CONSTITUTE A REQUEST FOR DATA. EVEN THOUGH GATES MADE NO REPRESENTATIONS IN RESPONSE TO THIS TELEGRAM, IT WILL BE REQUIRED TO MEET THESE CRITERIA JUST AS SURELY AS YOUR COMPANY WOULD HAVE BEEN SIMILARLY OBLIGATED, HAD THE AWARD BEEN MADE TO PER. THEREFORE, EQUALLY STRINGENT REQUIREMENTS WERE IMPOSED ON GATES AND PER BY VIRTUE OF THE TELEGRAM. GATES WAS ACCORDED NO PREFERENCE OVER YOUR COMPANY DURING THE NEGOTIATION PROCESS.

CONSEQUENTLY, WE MUST ADVISE YOU THAT YOUR PROTEST IS DENIED.