B-168092, MAY 5, 1970

B-168092: May 5, 1970

Additional Materials:

Contact:

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

 

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

AGAIN CONTRACTING OFFICER DETERMINED OFFER WAS TECHNICALLY UNACCEPTABLE AND AWARDED CONTRACT TO ANOTHER. RULES APPLICABLE TO NEGOTIATED PROCUREMENTS ARE MORE FLEXIBLE AND FURTHER EFFORTS SHOULD HAVE BEEN MADE TO DETERMINE TECHNICAL ACCEPTABILITY OF DEVIATIONS. TERMINATION IS NOT IN GOVERNMENT'S BEST INTEREST. DEFENSE SUPPLY AGENCY FUNCTIONS REQUEST FOR PROPOSALS UNDER MILITARY SPECIFICATION WAS ISSUED BY DEFENSE SUPPLY AGENCY FOR AIR FORCE. WHILE FUNCTIONS OF DSA IN INTERDEPARTMENTAL PROCUREMENT ARE TO PLAN PROCUREMENT. DEFINITION OF GOVERNMENT'S NEEDS AND TECHNICAL GUIDANCE ARE FURNISHED BY REQUIRING DEPARTMENT. IT WAS PROPER FOR CONTRACTING OFFICER TO SUBMIT OFFEROR'S SPECIFICATION DEVIATIONS FOR AIR FORCE EVALUATION AND APPROVAL PRIOR TO DETERMINING RESPONSIVENESS OF OFFER.

B-168092, MAY 5, 1970

BIDS--QUALIFIED--DEVIATIONS PERMITTED IN PRIOR PROCUREMENTS AFTER ADVERTISING FAILED, SOLE RESPONDENT TO REQUEST FOR PROPOSALS TOOK EXCEPTIONS TO MILITARY SPECIFICATION--SAME MODIFICATIONS ALLOWED UNDER PRIOR CONTRACT. DEFENSE SUPPLY AGENCY WAIVED EXCEPTIONS FOR "CURRENT CONTRACT ONLY"; HOWEVER, REQUIRING AGENCY (AF) DISAGREED AND CONTRACTING OFFICER CANCELED SOLICITATION. UNDER NEW SOLICITATION PRIOR OFFEROR TOOK SAME EXCEPTIONS. AGAIN CONTRACTING OFFICER DETERMINED OFFER WAS TECHNICALLY UNACCEPTABLE AND AWARDED CONTRACT TO ANOTHER. RULES APPLICABLE TO NEGOTIATED PROCUREMENTS ARE MORE FLEXIBLE AND FURTHER EFFORTS SHOULD HAVE BEEN MADE TO DETERMINE TECHNICAL ACCEPTABILITY OF DEVIATIONS; HOWEVER, TERMINATION IS NOT IN GOVERNMENT'S BEST INTEREST. DEFENSE DEPARTMENT--PROCUREMENT--DEFENSE SUPPLY AGENCY FUNCTIONS REQUEST FOR PROPOSALS UNDER MILITARY SPECIFICATION WAS ISSUED BY DEFENSE SUPPLY AGENCY FOR AIR FORCE. WHILE FUNCTIONS OF DSA IN INTERDEPARTMENTAL PROCUREMENT ARE TO PLAN PROCUREMENT, EXECUTE CONTRACT AND ARRANGE FOR ADMINISTRATION (ASPR 5-1102), DEFINITION OF GOVERNMENT'S NEEDS AND TECHNICAL GUIDANCE ARE FURNISHED BY REQUIRING DEPARTMENT. IT WAS PROPER FOR CONTRACTING OFFICER TO SUBMIT OFFEROR'S SPECIFICATION DEVIATIONS FOR AIR FORCE EVALUATION AND APPROVAL PRIOR TO DETERMINING RESPONSIVENESS OF OFFER. RULES APPLICABLE TO NEGOTIATED PROCUREMENTS ARE MORE FLEXIBLE AND CONTEMPLATE NEGOTIATIONS. FURTHER EFFORTS SHOULD HAVE BEEN MADE TO DETERMINE WHETHER DEVIATIONS WERE TECHNICALLY ACCEPTABLE. CONTRACTS-- NEGOTIATION--EVALUATION FACTORS- PROPRIETY OF EVALUATION WHILE 10 U.S.C. 2304 (G) AND ASPR 3-805.1 (A) GENERALLY REQUIRE DISCUSSIONS WITH OFFERORS REGARDING PROPOSALS WITHIN COMPETITIVE RANGE, PRICE AND OTHER FACTORS CONSIDERED, "OTHER FACTORS" ARE HELD TO INCLUDE TECHNICAL ACCEPTABILITY. PROPOSAL MUST BE REGARDED AS WITHIN COMPETITIVE RANGE UNLESS SO TECHNICALLY DEFICIENT OR OUT OF LINE IN PRICE AS TO PRECLUDE FURTHER MEANINGFUL NEGOTIATIONS. HOWEVER, WITH RESPECT TO TECHNICAL CONSIDERATIONS, GAO RECOGNIZES REASONABLE ADMINISTRATIVE DISCRETION IN DETERMINING WHETHER PROPOSAL IS WITHIN COMPETITIVE RANGE. GAO DOES NOT CONCLUDE THAT DEFENSE SUPPLY AGENCY DECISION TO REJECT LOW OFFER WAS CLEARLY ARBITRARY OR CAPRICIOUS BUT BASED ON MISUNDERSTANDING. SEE B-163024, AUG. 27, 1968.

TO AIR-LOCK, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED OCTOBER 10, 1969, AND YOUR LETTERS DATED OCTOBER 10, 1969, WITH ENCLOSURES, AND FEBRUARY 20, 1970, PROTESTING THE AWARD OF A CONTRACT TO DYNATION CORPORATION UNDER REQUEST FOR PROPOSALS NO. DSA 700-70-R-1293, ISSUED AUGUST 13, 1969, BY THE DEFENSE SUPPLY AGENCY (DSA), DEFENSE CONSTRUCTION SUPPLY CENTER (DCSC), COLUMBUS, OHIO.

THE REQUEST FOR PROPOSALS, AS AMENDED, SOLICITED OFFERS FOR THE REQUIREMENT OF 1,873 EACH, CONNECTOR HOSE, QUICK DISCONNECT, FSN 4730 488- 6747, IN ACCORDANCE WITH MILITARY SPECIFICATION MIL-STD AN6532, DATED FEBRUARY 10, 1949, AS REVISED, MIL-SPEC MIL-C-7942B, DATED MARCH 16, 1966, AND 8,120 EACH, COUPLING HALF, QUICK DISCONNECT, FSN 4730-821 2481, IN ACCORDANCE WITH MILITARY SPECIFICATION MIL-STD MS22011/ASG, DATED MAY 15, 1953, RA DATED MARCH 16, 1966, AND MIL-C-7942-BASG, DATED MARCH 16, 1966, ENTITLED CONNECTOR, HOSE, QUICK DISCONNECT, ANTI G SUIT.

THE BACKGROUND OF THIS PROCUREMENT IS ADMINISTRATIVELY DESCRIBED IN PART AS FOLLOWS: THIS PROCUREMENT WAS FORMALLY ADVERTISED UNDER AN INVITATION FOR BIDS DATED JANUARY 28, 1969, WITH NO BIDDERS RESPONDING. UNDER DATE OF MAY 5, 1969, THE REQUIREMENT WAS ADVERTISED UNDER A REQUEST FOR PROPOSAL (RFP), WITH ONLY ONE OFFEROR, AIR-LOCK, WHO TOOK EXCEPTIONS TO THE SPECIFICATIONS. SPECIFICALLY, THE EXCEPTIONS TAKEN WERE THE SAME MODIFICATIONS ALLOWED UNDER A PRIOR PRODUCTION CONTRACT HELD BY AIR-LOCK. BY LETTER DATED APRIL 4, 1968, TO THE DEFENSE PERSONNEL SUPPORT CENTER (DPSC), DEFENSE SUPPLY AGENCY (DSA), PHILADELPHIA, PENNSYLVANIA, AIR-LOCK ADVISED THAT CONNECTORS PRODUCED TO THE MILITARY STANDARD WOULD NO LONGER COMPLY WITH CERTAIN TEST REQUIREMENTS OF THE MIL-C-7942 SPECIFICATIONS AS THEN REVISED. THE RESULTANT OF THIS WAS A WAIVER OF THE SPECIFICATIONS BY DSA IN THE AREAS RECOMMENDED BY AIR-LOCK. THE WAIVER, HOWEVER, APPLIED TO THE "CURRENT CONTRACT ONLY," AND DID NOT WAIVE RIGHTS FOR FUTURE PROCUREMENTS.

IN ACCORDANCE WITH ARMED SERVICES PROCUREMENT REGULATION (ASPR) 5 1106.5, DCSC, THROUGH ITS DIRECTOR OF TECHNICAL OPERATION, TECHNICAL DATA, ACQUISITION AND AUTHENTICATION BRANCH, REQUESTED THE ENGINEER SUPPORT ACTIVITY OF THE REQUIRING DEPARTMENT (AIR FORCE) FOR THEIR CONCURRENCE OR NON-CONCURRENCE IN REGARD TO THE DEVIATIONS REQUESTED BY AIR-LOCK TO MIL-C -7942 (ASG). UNDER DATE OF JULY 10, 1969, THE RESPONSIBLE ENGINEERING ACTIVITY ADVISED DSA THAT:

"1. WE SEE NO JUSTIFICATION FOR GRANTING A WAIVER OF ANY REQUIREMENT OF MIL-C-7942. 2. A PROPOSED AMENDMENT 1 TO MIL-C-7942 WHICH SHOULD BE APPROVED INVOLVES A CHANGE IN THE CONNECTION, DISCONNECTION FORCE TEST (SEE ATTACHED NEMB LETTER, 16 JAN 1969). CONTRACTORS SHOULD HAVE NO PROBLEM MEETING THE REQUIREMENTS OF THE NEW TEST. 3. FOR CURRENT AIR FORCE USE, ITEMS WILL BE ACCEPTABLE PROVIDED THEY MEET THE REQUIREMENTS OF MIL-C-7942, PROPOSED AMENDMENT 1, PER NEMB 1TR. TO NEOB DATED 16 JAN 1969."

ON JULY 18, 1969, BY DSA DISPOSITION FORM, THE CHIEF, HOSE, PIPING & FITTING BRANCH, TECHNICAL SERVICES DIVISION ERRONEOUSLY ADVISED THE CONTRACTING OFFICER THAT THE AIR-LOCK OFFER WAS NOT ACCEPTABLE ON THE BASIS THAT THE MILITARY USER INDICATED WAIVER OF SPECIFICATION REQUIREMENTS WAS NOT NECESSARY. BY POSTCARD DATED AUGUST 5, 1969, THE CONTRACTING OFFICER ADVISED AIR-LOCK THAT THE RFP HAD BEEN CANCELLED IN ACCORDANCE WITH ASPR 2-404.2 (B), FAILURE TO CONFORM TO ESSENTIAL REQUIREMENTS OF IFB SPECIFICATIONS.

UNDER THE PRESENT SOLICITATION, FOUR PROPOSALS WERE RECEIVED AND OPENED FOR EVALUATION ON SEPTEMBER 22, 1969. AIR-LOCK SUBMITTED THE LOWEST OFFER OF $3.25 EACH ON THE TOTAL QUANTITY OF 1,873 CONNECTOR HOSE, QUICK DISCONNECT, AND DYNATION CORPORATION OFFERED THE SECOND LOW PRICE OF $7.44 EACH. DYNATION OFFERED THE LOW PRICE OF $2.14 EACH FOR THE TOTAL QUANTITY OF 8,120 COUPLING HALF, QUICK DISCONNECT AND AIR LOCK OFFERED THE SECOND LOW PRICE OF $3.59 EACH. AIR-LOCK, HOWEVER, ATTACHED A COVERING LETTER TO ITS PROPOSAL BASING ITS OFFER UPON THE SAME EXCEPTIONS TO THE SPECIFICATIONS AS IT HAD TAKEN UNDER RFP DSA 700 69-R-9510, DATED MAY 5, 1969, WHICH RESULTED IN REJECTION OF THAT PROPOSAL. THE CONTRACTING OFFICER, RELYING ON THE PRIOR REJECTION OF AIR-LOCK'S EXCEPTIONS, DETERMINED ITS OFFER TO BE AGAIN TECHNICALLY NOT ACCEPTABLE AND MADE AWARD TO DYNATION ON OCTOBER 6, 1969, IN THE AMOUNT OF $31,311.92.

AS A RESULT OF AIR-LOCK'S PROTEST OF OCTOBER 10, 1969, THE CONTRACTING OFFICER REQUESTED THE ENGINEER SUPPORT ACTIVITY (AIR FORCE) TO EXPLAIN WHY THE PROPOSED DEVIATIONS, ACCEPTABLE UNDER THE PRIOR PRODUCTION CONTRACT BY AIR-LOCK, DIFFERED UNDER THIS PROCUREMENT AND TO EXPLAIN WHY THE EXCEPTIONS WERE NOT ACCEPTABLE.

BY LETTER DATED DECEMBER 8, 1969, THE ENGINEER SUPPORT ACTIVITY OFFERED THE FOLLOWING PERTINENT EXPLANATION:

"* * * THE SUBJECT CONNECTOR IS HELD TOGETHER BY THREE SPRING LOADED BALLS THAT DROP OVER AN ANNULAR RING ON THE MATING MALE CONNECTOR. THE FEMALE SIDE HAS A 45 DEGREE BEND TO THE FLEX HOSE ATTACHMENT. THE SPECIFICATION, AS WE RECEIVED IT FROM ASD, CALLS FOR AN AXIAL LOAD DISCONNECT TEST WHEREBY THE LOAD IS APPLIED PERPENDICULAR TO THE PLANE OF THE BALL LOCKS; THUS ALL THREE BALLS HAVE TO DISPLACE AGAINST THE SPRINGS TOGETHER, AND THE PULL LOAD EXCEEDS THE 20 POUND MAXIMUM. IN PRACTICE, SUCH A DISCONNECT CANNOT HAPPEN. DURING EGRESS PILOT-SEAT SEPARATION THE DISCONNECT LOAD WOULD BE APPLIED AXIALLY THROUGH THE FLEX HOSE, ENCOUNTER THE 45 DEGREE BEND, AND RESULT IN AN ECCENTRIC LOAD ON THE BALL LOCK PLANE. THE BALL IN, OR NEAREST, THE PLANE OF THE BEND WOULD DEPRESS-- FOLLOWED BY THE OTHERS--AT LOWER DISCONNECT PULL LOADS.

"THE ABOVE DISCREPANCY WAS BROUGHT OUT IN THE AIR LOCK, INC LETTER TO DSA (DPSC), 4 APR 1968, BUT DID NOT COME TO OUR ATTENTION THROUGH CHANNELS UNTIL 25 JUL 1968. WE WROTE A PROPOSED AMENDMENT TO THE SPECIFICATION TO APPLY DISCONNECT LOADS ECCENTRICALLY, AS DESCRIBED ABOVE; WE ALSO PROPOSED SOME CHANGES TO AN 6532 (THE CONFIGURATION STANDARD). THESE CHANGES WERE DISCUSSED WITH AIR LOCK DURING SEP 1968. THEY ALSO WERE FORWARDED THROUGH THE PRESCRIBED COORDINATION CHANNELS TO THE AERONAUTICAL SYSTEMS GROUP (ASG), THE ORIGINAL MULTI SERVICE COORDINATOR. THE CONFIGURATION STANDARD MADE IT THROUGH THE COORDINATION CYCLE, AND WAS REPUBLISHED AS MS 27755 ON 27 FEB 1969. ASG, HOWEVER, DID NOT ACCOMPLISH ANY WORK TOWARDS COORDINATING THE MIL SPEC AMENDMENT AND RETURNED THE PROJECT TO US IN OCT 1969 DUE TO THEIR PHASING OUT. WE IMMEDIATELY SENT IT OUT FOR COORDINATION AND TO DATE HAVE RECEIVED AFFIRMATIVE COMMENTS FROM ALL ACTIVITIES EXCEPT THE NAVY.

"OUR ANSWER TO THE DSA FORM 339, CASE NO ESA-B1830-9174, ON 10 JUL 1969 DID NOT WAIVE THE TEST, NOR INCREASE MAXIMUM DISCONNECT LOAD VALUES FOR THE EXISTING TEST, BECAUSE WE CONSIDERED A REALISTIC DISCONNECT TEST TO BE ESSENTIAL. INSTEAD, WE RECOMMENDED THE SUBSTITUTION OF THE ECCENTRIC LOAD TEST AND ATTACHED A COPY OF THE PROPOSED SPECIFICATION AMENDMENT. * * *

"SUBSEQUENT TO OUR RECEIPT OF YOUR LETTER AND ANALYSIS OF THE PROBLEM, WE ATTEMPTED, UNSUCCESSFULLY, TO EXPEDITE NAVY COORDINATION ON THE PROPOSED AMENDMENT. AS OF 1 DEC 1969 THE NAVY COMMENTS HAVE BECOME DELINQUENT AND WE ARE LEGALLY JUSTIFIED TO APPROVE AND PUBLISH THE AMENDMENT, HOLDING ANY SUBSEQUENT ESSENTIAL COMMENTS RECEIVED FOR INCLUSION IN THE NEXT REVISION/AMENDMENT.

"WE PROPOSE AS A SOLUTION TO YOUR PROCUREMENT PROBLEMS THAT YOU USE THE PROPOSED AMENDMENT WITH THIS LETTER AS AUTHORITY OF OUR INTENTION TO IMMEDIATELY SEND THE DOCUMENT THROUGH THE PUBLICATION CYCLE. THE AMENDMENT WILL BE PUBLISHED 'AS IS' WITH THE MINOR EXCEPTION OF NECESSARY CHANGES TO REFLECT THE REPLACEMENT OF THE AN 6532 PART NUMBER BY MS 27755. WE CANNOT PREDICT AN AVAILABILITY DATE FOR THE OFFICIAL APPROVED DOCUMENT DUE TO THE INVOLVEMENT OF OTHER ACTIVITIES IN THE PUBLICATION/APPROVAL CYCLE.

"TELECON WITH AIR LOCK, INC ON 26 NOV 1969 HAS RECONFIRMED THE ABILITY OF THE CONNECTOR TO MEET THIS REVISED TEST."

IN ACCORDANCE WITH THE ABOVE LETTER FROM THE DIRECTOR OF MATERIEL MANAGEMENT, AIR FORCE, THE PURCHASE DESCRIPTIONS FOR FSN 4730-488-6747 AND FSN 4730-821-2481 WERE REVISED ON DECEMBER 12, 1969. SINCE THE CONTRACT TO DYNATION REQUIRED THE FIRST ARTICLE TEST REPORT TO BE SUBMITTED BY DECEMBER 27, 1969, THE CONTRACTING OFFICER DEFERRED ACTION ON THE RECOMMENDATIONS UNTIL THE FIRST ARTICLE TEST REPORT COULD BE RECEIVED AND EVALUATED. DYNATION FAILED TO SUBMIT ITS TEST REPORT IN THE TIMELY MANNER REQUIRED AND THE CONTRACTING OFFICER GAVE NOTICE TO DYNATION THAT IF THE REPORT WAS NOT FILED WITHIN 10 DAYS FROM DECEMBER 31, 1969, THE CONTRACT WOULD BE SUBJECT TO TERMINATION FOR DEFAULT.

ON JANUARY 5, 1970, DYNATION CONFIRMED THAT PREPRODUCTION ARTICLES PRODUCED IN ACCORDANCE WITH THE SPECIFIED DRAWINGS AND SPECIFICATIONS WOULD NOT MEET THE CONNECT AND DISCONNECT FORCES REQUIRED. THIS INFORMATION ACCOMPANIED BY THE CLARIFICATION OF DECEMBER 8, 1969, FROM THE AIR FORCE LED THE CONTRACTING OFFICER TO CONCLUDE THAT THE VIRTUAL IMPOSSIBILITY OF COMPLYING WITH ALL THE REQUIREMENTS WOULD PRECLUDE A DETERMINATION THAT THE CONTRACT COULD BE TERMINATED FOR DEFAULT FOR FAILURE OF DYNATION TO TIMELY SUBMIT ITS FIRST ARTICLE TEST REPORT. THEREFORE, IN ORDER TO DETERMINE WHETHER IT WOULD BE IN THE GOVERNMENT'S INTEREST TO TERMINATE THE CONTRACT FOR THE CONVENIENCE OF THE GOVERNMENT, DYNATION WAS REQUESTED TO ESTIMATE THE PARTIAL TERMINATION COSTS. INFORMATION OBTAINED SHOWS THAT THE TERMINATION COSTS WOULD EXCEED $8,000.

IN EXAMINING THE ACTIONS OF THE DCSC CONTRACTING OFFICER, IT MUST BE BORNE IN MIND THAT THE FUNCTIONS OF THE PROCURING AGENCY (DSA) IN THIS INTERDEPARTMENTAL PROCUREMENT ARE TO PLAN THE PROCUREMENT, EXECUTE THE CONTRACT, AND ARRANGE FOR CONTRACT ADMINISTRATION. ASPR 5-1102. HOWEVER, THE DEFINITION OF THE GOVERNMENT'S NEEDS AND TECHNICAL GUIDANCE ARE FURNISHED BY THE REQUIRING DEPARTMENT (AIR FORCE). ASPR 5 1106.5, ENTITLED "SPECIFICATIONS, DRAWINGS AND OTHER PURCHASE DATA," STATES IN PERTINENT PART:

"THE REQUIRING DEPARTMENT SHALL FURNISH TO THE PROCURING DEPARTMENT A LIST (OR COPIES) OF SPECIFICATIONS, DRAWINGS, AND OTHER DATA, AS APPROPRIATE, REQUIRED FOR THE PROCUREMENT. * * * UNDER NO CIRCUMSTANCES SHALL THE PROCURING DEPARTMENT DIRECT OR AUTHORIZE DEVIATIONS OR WAIVERS FROM THE SPECIFICATIONS, DRAWINGS, OR OTHER PURCHASE DATA INCLUDED IN THE MIPR WITHOUT EXPRESS AUTHORITY OF THE REQUIRING DEPARTMENT (WITH AN EXCEPTION NOT MATERIAL HERE)."

IT WAS PROPER FOR THE CONTRACTING OFFICER TO SUBMIT AIR-LOCK'S SPECIFICATION DEVIATIONS FOR THE AIR FORCE'S EVALUATION AND APPROVAL PRIOR TO DETERMINING THE RESPONSIVENESS OF AIR-LOCK'S OFFER UNDER THE MAY 5, 1969, REQUEST FOR PROPOSALS. IN CANCELLING THIS SOLICITATION, WE NOTE THAT THE CONTRACTING OFFICER ADVISED AIR-LOCK THAT THE CANCELLATION WAS BECAUSE OFFERS THEREUNDER WERE CONTRARY TO ASPR 2 404.2 (B). "ANY BID WHICH DOES NOT CONFORM TO THE SPECIFICATIONS CONTAINED OR REFERENCED IN THE INVITATION FOR BIDS SHALL BE REJECTED UNLESS THE INVITATION AUTHORIZED THE SUBMISSION OF ALTERNATE BIDS AND THE SUPPLIES OFFERED AS ALTERNATES MEET THE REQUIREMENTS SPECIFIED IN THE INVITATION." AIR-LOCK DID NOT PROTEST THE BASIS OF THIS REJECTION. WE THINK THIS IS SIGNIFICANT ONLY TO ESTABLISH THAT THE CONTRACTING OFFICER HAD CONCLUDED, EVEN THOUGH ERRONEOUSLY, THAT THE SPECIFICATION DEVIATIONS OFFERED BY AIR-LOCK WERE INVALID IN ITS OFFER UNDER THE AUGUST 13, 1969, REQUEST FOR PROPOSALS.

BOTH 10 U.S.C. 2304 (G) AND ASPR 3-805.1 (A) GENERALLY REQUIRE DISCUSSIONS WITH OFFERORS WHO SUBMIT PROPOSALS WITHIN A COMPETITIVE RANGE, PRICE AND OTHER FACTORS CONSIDERED. THE PHRASE "OTHER FACTORS" HAS BEEN HELD TO INCLUDE THE TECHNICAL ACCEPTABILITY OF PROPOSALS. 46 COMP. GEN. 606 (1967). IN OUR OPINION, A PROPOSAL MUST BE REGARDED AS BEING WITHIN A COMPETITIVE RANGE UNLESS IT IS SO TECHNICALLY DEFICIENT OR OUT OF LINE IN PRICE AS TO PRECLUDE FURTHER MEANINGFUL NEGOTIATIONS. PARTICULARLY WITH RESPECT TO TECHNICAL CONSIDERATIONS, HOWEVER, WE RECOGNIZE A REASONABLE DEGREE OF ADMINISTRATIVE DISCRETION IN DETERMINING WHETHER A PROPOSAL IS WITHIN THE COMPETITIVE RANGE. B 163024, AUGUST 27, 1968. WE DO NOT CONCLUDE THAT THE CONTRACTING OFFICER'S DECISION TO REJECT AIR-LOCK'S OFFER WAS CLEARLY ARBITRARY OR CAPRICIOUS, ALTHOUGH IT WAS BASED ON A MISUNDERSTANDING OF THE ADVICE RECEIVED FROM THE AIR FORCE.

FROM THE RECORD IT IS EVIDENT THAT THE TECHNICAL DATA DIVISION OF DCSC FAILED TO PROPERLY INTERPRET THE ENTIRE CONTENT MATTER IN THE ENGINEER SUPPORT ACTIVITY'S ANSWER TO THE JUNE 22, 1969, REQUEST FOR INTERPRETATION OF AIR-LOCK'S DEVIATIONS. IT IS FURTHER EVIDENT THAT THE LANGUAGE CONTAINED IN THE ENGINEER SUPPORT ACTIVITY ANSWER DATED JULY 10, 1969, WAS NOT AS CLEAR AS IT MIGHT HAVE BEEN WITH RESPECT TO THE ALLOWABLE DEVIATIONS IN AIR-LOCK'S QUALIFIED OFFER. IN THIS REGARD FURTHER AMPLIFICATION, PRIOR TO CANCELLATION OF THE MAY 5, 1969, RFP, AND PRIOR TO AWARD UNDER THE RFP ISSUED AUGUST 13, 1969, SHOULD PERHAPS HAVE BEEN OBTAINED. A CONCERTED EFFORT TO EVALUATE THE ACCEPTABILITY OF THE AIR- LOCK DEVIATIONS OCCURRED ONLY AFTER AWARD AND AIR-LOCK'S PROTEST TO THIS OFFICE. UNDER THE RATHER STRICT AND RIGID RULES OF FORMAL ADVERTISING, A BID WHICH DID NOT CONFORM TO THE MATERIAL REQUIREMENTS OF THE INVITATION WOULD NECESSARILY BE REJECTED AS NONRESPONSIVE. HOWEVER, THE RULES APPLICABLE TO NEGOTIATED PROCUREMENTS ARE BY DESIGN MORE FLEXIBLE AND CONTEMPLATE NEGOTIATIONS, WITH CERTAIN EXCEPTIONS NOT RELEVANT HERE. BELIEVE FURTHER EFFORTS SHOULD HAVE BEEN MADE TO DETERMINE WHETHER THE AIR -LOCK TEST DEVIATIONS WERE TECHNICALLY ACCEPTABLE, ESPECIALLY SINCE DYNATION'S UNIT PRICE WAS SUBSTANTIALLY HIGHER THAN AIR-LOCK'S. WHILE IT IS UNFORTUNATE THAT THE AIR-LOCK DEVIATIONS WERE NOT MADE A PART OF THE REQUEST FOR PROPOSALS PRIOR TO AWARD, WE DO NOT FEEL THAT IT WOULD BE IN THE BEST INTEREST OF THE GOVERNMENT TO TERMINATE THE PRESENT CONTRACT FOR CONVENIENCE OF THE GOVERNMENT. IN VIEW OF THE ABOVE AND THE ADMINISTRATIVE DETERMINATION THAT THE NEW TEST REQUIREMENTS WILL BECOME A PART OF THE STANDARD SPECIFICATIONS FOR FUTURE PROCUREMENTS, WE MUST CONCLUDE THAT NO FURTHER ACTION APPEARS TO BE REQUIRED BY THIS OFFICE.