B-170039, DEC 30, 1970, 50 COMP GEN 456

B-170039: Dec 30, 1970

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WHICH INSTRUCTED THREE OFFERORS WITHIN A COMPETITIVE RANGE - ON WHOSE TIMELY OFFER UNDER A REQUEST FOR QUOTATIONS WAS EXCESSIVE. THE OTHERS WHOSE LATE PROPOSALS WERE CONSIDERED ON THE BASIS OF A "DETERMINATION THAT AN OTHERWISE ACCEPTABLE OFFER IS UNREASONABLE AS TO PRICE" - THAT IF NO PROPOSAL REVISION IS RECEIVED BY CUTOFF DATE THE LOWEST OFFER SUBMITTED WILL BE USED FOR EVALUATION. CONTRACTS - NEGOTIATION - PRICES - REDUCTION THE ACCEPTANCE OF A LATE REDUCTION IN PRICE SUBMITTED BY THE LOW OFFEROR UNDER A REQUEST FOR QUOTATIONS WAS IN ACCORD WITH PARAGRAPH 3 506(G) OF THE ARMED SERVICES PROCUREMENT REGULATION THAT PROVIDES "A MODIFICATION RECEIVED FROM AN OTHERWISE SUCCESSFUL OFFEROR.

B-170039, DEC 30, 1970, 50 COMP GEN 456

CONTRACTS - NEGOTIATIONS - CUTOFF DATE - NOTICE SUFFICIENCY A TELEGRAM ESTABLISHING A CUTOFF DATE FOR NEGOTIATIONS, WHICH INSTRUCTED THREE OFFERORS WITHIN A COMPETITIVE RANGE - ON WHOSE TIMELY OFFER UNDER A REQUEST FOR QUOTATIONS WAS EXCESSIVE, THE OTHERS WHOSE LATE PROPOSALS WERE CONSIDERED ON THE BASIS OF A "DETERMINATION THAT AN OTHERWISE ACCEPTABLE OFFER IS UNREASONABLE AS TO PRICE" - THAT IF NO PROPOSAL REVISION IS RECEIVED BY CUTOFF DATE THE LOWEST OFFER SUBMITTED WILL BE USED FOR EVALUATION, ACCOMPLISHED THE SAME RESULT AS WOULD CANCELLATION AND RESOLICITATION OF THE PROCUREMENT, AND SERVED AS ADEQUATE NOTICE OF THE CUTOFF DATE FOR SUBMISSION OF "BEST AND FINAL" OFFERS WITHIN THE MEANING OF PARAGRAPH 3-805.1(B) OF THE ARMED SERVICES PROCUREMENT REGULATION, PRESCRIBING THE METHOD FOR TERMINATING NEGOTIATIONS, EVEN IF THE TELEGRAM DID NOT REFER TO THE LATE PROPOSALS PROVISION OF THE SOLICITATION OR INFORM OFFERORS THAT ONLY NOTICES OF UNACCEPTABILITY WOULD BE FURNISHED BETWEEN THE CLOSING DATE FOR NEGOTIATIONS AND DATE OF AWARD. CONTRACTS - NEGOTIATION - PRICES - REDUCTION THE ACCEPTANCE OF A LATE REDUCTION IN PRICE SUBMITTED BY THE LOW OFFEROR UNDER A REQUEST FOR QUOTATIONS WAS IN ACCORD WITH PARAGRAPH 3 506(G) OF THE ARMED SERVICES PROCUREMENT REGULATION THAT PROVIDES "A MODIFICATION RECEIVED FROM AN OTHERWISE SUCCESSFUL OFFEROR, WHICH IS FAVORABLE TO THE GOVERNMENT, SHALL BE CONSIDERED AT ANY TIME THAT SUCH MODIFICATION IS RECEIVED," AND THE ACCEPTANCE WAS NOT PREJUDICIAL TO OTHER OFFERORS.

TO CANOGA ELECTRONICS CORPORATION, DECEMBER 30, 1970:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF JUNE 12, 1970, AND TO YOUR LETTERS OF JUNE 17, JULY 1 AND 10, AND NOVEMBER 16, 1970, PROTESTING THE AWARD OF A CONTRACT TO DATRON SYSTEMS, INC. (DATRON), UNDER REQUEST FOR QUOTATIONS (RFQ) NO. N00163-70-Q-0923, (RFQ-0923) ISSUED BY THE NAVAL AVIONICS FACILITY (NAFI), INDIANAPOLIS, INDIANA.

THE INSTANT PROCUREMENT WAS NEGOTIATED PURSUANT TO A DETERMINATION AND FINDINGS BY THE CONTRACTING OFFICER ISSUED ON JANUARY 19, 1970, SUPPORTING NEGOTIATION UNDER 10 U.S.C. 2304(A) (2) AND ARMED SERVICES PROCUREMENT REGULATION (ASPR) 3-202.2(VI). ON FEBRUARY 2, 1970, RFQ NO. N00163-70-Q- 0923 WAS ISSUED FOR TWO ITEMS OF UHF TRACKING ANTENNAS AND FOUR ITEMS OF MANUALS, TECHNICAL DOCUMENTATION, AND ENGINEERING DRAWINGS, PLUS AN OPTION ITEM FOR ENGINEERING DRAWINGS. THE SOLICITATION ESTABLISHED FEBRUARY 24, 1970, AS THE CLOSING DATE FOR RECEIPT OF PROPOSALS.

YOUR FIRM SUBMITTED THE ONLY TIMELY PROPOSAL, IN THE AMOUNT OF $869,185. ON FEBRUARY 25, 1970, A TELEGRAPHIC OFFER IN THE AMOUNT OF $480,875 WAS RECEIVED FROM DATRON. ALTHOUGH PARAGRAPH 7.20 OF THE SOLICITATION AUTHORIZED TELEGRAPHIC REPLIES, IT APPEARS FROM THE PRESENT RECORD THAT THERE IS NO BASIS UPON WHICH THE DATRON OFFER WOULD HAVE QUALIFIED FOR AWARD UNDER ASPR 3-506(C). ON FEBRUARY 27, 1970, THE CONTRACTING OFFICER ISSUED A "DETERMINATION THAT AN OTHERWISE ACCEPTABLE OFFER IS UNREASONABLE AS TO PRICE" WHICH, AFTER REVIEWING THE OFFERS RECEIVED, STATED:

THE CANOGA ELECTRONICS CORP. OFFER EXCEEDS THE LATE OFFER FROM DATRON SYSTEMS, INC., BY $388,310 INCL. OPTION ITEM 7, OR 80.75%. IT IS REASONABLE TO EXPECT THAT A CONTRACT CAN BE AWARDED FOR $480,875 OR LESS IF NEGOTIATIONS ARE CONTINUED AND DATRON SYSTEMS, INC., IS GIVEN AN OPPORTUNITY TO SUBMIT A TIMELY OFFER.

UPON RECEIPT OF YOUR INITIAL TIMELY PROPOSAL AND DATRON'S INITIAL LATE PROPOSAL, THE CONTRACTING OFFICER WAS CONFRONTED WITH THE DECISION OF HOW TO PROCEED WITH THE PROCUREMENT. THE CONDUCT OF NEGOTIATED PROCUREMENTS IS GOVERNED BY 10 U.S.C. 2304(G) WHICH PROVIDES:

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, 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: 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.

SECTION 7.2 OF THE INSTANT SOLICITATION ADVISED OFFERORS THAT THE CONTRACT MAY BE ISSUED BASED ON INITIAL QUOTATIONS RECEIVED, WITHOUT DISCUSSION OF SUCH QUOTATIONS. THE ONLY TIMELY PROPOSAL, AND THUS THE ONLY ONE ELIGIBLE FOR AN AWARD WITHOUT DISCUSSIONS, WAS THAT OF YOUR FIRM IN THE AMOUNT OF $869,185. HOWEVER, THE CONTRACTING OFFICER WAS AWARE OF DATRON'S LATE QUOTATION OF $480,875. UNDER THESE CIRCUMSTANCES, WE BELIEVE IT WOULD HAVE BEEN DIFFICULT TO SUSTAIN A DETERMINATION THAT ACCEPTANCE OF YOUR INITIAL PROPOSAL WITHOUT DISCUSSION "WOULD RESULT IN FAIR AND REASONABLE PRICES."

MOREOVER, THE CONTRACTING OFFICER WOULD HAVE BEEN JUSTIFIED IN REJECTING YOUR OFFER PURSUANT TO SECTION 7.2 OF RFQ-0923 AND RESOLICITING FOR THE REQUIREMENT. SEE B-168000, NOVEMBER 26, 1969, IN WHICH WE HELD THAT IT WAS WITHIN THE DISCRETION OF THE CONTRACTING AGENCY TO HAVE CANCELED A REQUEST FOR PROPOSALS WHEN IT COULD NOT BE ESTABLISHED THAT THE PRICE OF THE SOLE OFFEROR WAS FAIR AND REASONABLE. IN THIS EVENT, THE CONTRACTING OFFICER WOULD HAVE BEEN OBLIGATED TO SOLICIT PROPOSALS FROM THE MAXIMUM NUMBER OF QUALIFIED SOURCES, WHICH INCLUDED DATRON. ASPR 3-101 AND 3- 102(C). HOWEVER, RATHER THAN CANCELING RFQ-0923 AND ISSUING A NEW SOLICITATION FOR THIS REQUIREMENT, WHICH CARRIED A UNIFORM MATERIAL MOVEMENT AND ISSUE PRIORITY SYSTEM (UMMIPS) PRIORITY DESIGNATOR OF "02", THE CONTRACTING OFFICER SENT THE FOLLOWING TELEGRAM ON FEBRUARY 27 TO BOTH FIRMS, CANOGA AND DATRON, WHICH HE CONSIDERED QUALIFIED SOURCES:

NEGOTIATIONS ARE BEING CONDUCTED WITH ALL OFFERORS WITHIN A COMPETITIVE PRICE RANGE. YOU ARE THEREFORE INVITED TO REVISE YOUR LATEST OFFER AS TO PRICE. ANY SUCH REVISION MAY BE SUBMITTED BY TELEGRAM AND MUST BE RECEIVED BY 4:15 P.M. EST (UNIFORM TIME ACT 1966) 3 MAR 70 AND REFERENCE THE SOLICITATION NUMBER AND THIS MESSAGE. IF NO REVISION IS RECEIVED BY THIS TIME YOUR LATEST OFFER AS TO PRICE WILL BE USED IN EVALUATION. ALL TERMS AND CONDITIONS OF SUBJECT RFQ REMAIN UNCHANGED.

IT IS ADMINISTRATIVELY REPORTED THAT THE PURPOSE OF THE TELEGRAM, AS SHOWN BY THE CONTRACTING OFFICER'S WRITTEN DETERMINATION WHICH PRECEDED IT, WAS TO EXTEND THE CLOSING DATE FOR RECEIPT OF PROPOSALS SO AS TO PERMIT DATRON TO SUBMIT A TIMELY OFFER. THE SAME OPPORTUNITY WAS GIVEN YOUR FIRM. SINCE THE TELEGRAM OF FEBRUARY 27 ACCOMPLISHED THE SAME RESULT AS A CONCELLATION OF RFQ-0923 AND A RESOLICITATION, WE ARE UNABLE TO CONCLUDE THAT DATRON'S FURTHER PARTICIPATION IN THE PROCUREMENT WAS IMPROPER.

BY MARCH 3, 1970, CANOGA DECREASED ITS PRICE TO $829,185 AND DATRON INCREASED ITS PRICE TO $530,559. ADDITIONALLY, TELEDYNE MICRONETICS (MICRONETICS) MADE A TELEPHONIC OFFER OF $416,150 ON MARCH 10, WHICH WAS CONFIRMED BY A WRITTEN PROPOSAL ON MARCH 12. THE CONTRACTING OFFICER ISSUED ANOTHER "DETERMINATION THAT AN OTHERWISE ACCEPTABLE OFFER IS UNREASONABLE AS TO PRICE" ON MARCH 13, 1970, WHICH CONCLUDED:

THE REVISED CANOGA ELECTRONICS OFFER EXCEEDS THE UNTIMELY ORAL OFFER FROM MICRONETICS BY $413,035 OF 99.25% AND THE REVISED DATRON SYSTEMS OFFER EXCEEDS THE UNTIMELY ORAL OFFER FROM MICRONETICS BY $114,409 OR 27.5%. IT IS REASONABLE TO EXPECT THAT A CONTRACT CAN BE AWARDED FOR $416,150 OR LESS IF NEGOTIATIONS ARE CONTINUED AND MICRONETICS TELEDYNE IS GIVEN AN OPPORTUNITY TO SUBMIT A TIMELY OFFER.

ON THE SAME DAY, THE CONTRACTING OFFICER SET THE FOLLOWING TELEGRAM TO MICRONETICS, DATRON AND CANOGA:

NEGOTIATIONS ARE BEING CONTINUED WITH ALL OFFERORS WITHIN A COMPETITIVE PRICE RANGE. YOU ARE THEREFORE INVITED TO REVISE YOUR LATEST OFFER AS TO PRICE. ANY SUCH REVISION MAY BE SUBMITTED BY TELEGRAM AND MUST BE RECEIVED BY 4:15 EST (UNIFORM TIME ACT 1966) 19 MAR 70 AND REFERENCE THE SOLICITATION NUMBER AND THIS MESSAGE. IF NO REVISION IS RECEIVED BY THAT TIME YOUR LATEST OFFER AS TO PRICE WILL BE USED IN EVALUATION. ALL TERMS AND CONDITIONS OF SUBJECT RFQ REMAIN UNCHANGED.

THE FOLLOWING REVISED QUOTATIONS WERE RECEIVED MARCH 19:

CANOGA $829,185

DATRON 445,559

MICRONETICS 427,850

ANOTHER TELEGRAM WAS SENT TO ALL THREE OFFERORS ON MARCH 26, 1970, ADVISING THEM "NEGOTIATIONS ARE BEING CONTINUED WITH ALL OFFERORS WITHIN A COMPETITIVE RANGE." THE MESSAGE THEN DESCRIBED FOUR CHANGES TO THE SPECIFICATIONS FOR THE TRACKING ANTENNAS, AND CONCLUDED:

IF BY VIRTUE OF THE ABOVE SPECIFICATION REVISIONS YOU DESIRE TO REVISE AN OFFER ALREADY SUBMITTED, SUCH REVISIONS MAY BE SUBMITTED BY TELEGRAM AND MUST BE RECEIVED BY 5:15 EST (UNIFORM TIME ACT 1966) 6 APRIL 70 AND REFERENCE THE SOLICITATION NUMBER AND THIS MESSAGE. IF NO REVISION IS RECEIVED BY THAT TIME YOUR LATEST OFFER AS TO PRICE WILL BE USED IN EVALUATION. ALL OTHER TERMS AND CONDITIONS OF SUBJECT RFQ REMAIN UNCHANGED.

ALL OFFERORS MADE TIMELY RESPONSES AS FOLLOWS:

CANOGA $813,685

MICRONETICS 427,850

DATRON 345,385

ADDITIONAL SPECIFICATION CHANGES WERE ISSUED TO ALL OFFERORS BY TELEGRAM OF APRIL 14, 1970. ONE OF THE CHANGES PROVIDED THAT THE MAXIMUM WEIGHT OF THE TRACKING ANTENNA WOULD NOT EXCEED 150 POUNDS. THE TELEGRAM STATED:

NEGOTIATIONS ARE BEING CONTINUED WITH ALL OFFERORS WITHIN A COMPETITIVE RANGE *** IF BY VIRTUE OF THE ABOVE SPECIFICATION REVISIONS YOU DESIRE TO REVISE AN OFFER ALREADY SUBMITTED SUCH REVISIONS MAY BE SUBMITTED BY TELEGRAPH AND MUST BE SUBMITTED BY 4:15 EST (UNIFORM TIME ACT 66) 23 APR 70 AND REFERENCE THE SOLICITATION NUMBER AND THIS MESSAGE. YOU MUST RESPOND TO THIS MESSAGE BY THAT TIME IN ORDER TO BE CONSIDERED FOR EVALUATION. *** .

NO RESPONSE TO THIS TELEGRAM WAS RECEIVED FROM CANOGA. DATRON SUBMITTED A QUOTATION OF $445,559, WHICH WAS A REPETITION OF ITS MARCH 19 PRICE. MICRONETICS' PRICE OF $427,850 REMAINED UNCHANGED. THUS, THE PRICE STANDINGS ON APRIL 23, 1970, WERE:

CANOGA $813,685

DATRON 445,559

MICRONETICS 427,850

THE CONTRACTING OFFICER SENT THE FOLLOWING MESSAGE TO ALL THREE OFFERORS ON MAY 4, 1970:

NEGOTIATIONS ARE BEING CONDUCTED WITH ALL OFFERORS WITHIN A COMPETITIVE PRICE RANGE. ITEM 6 IS CANCELLED. YOU ARE THEREFORE INVITED TO REVISE YOUR LATEST OFFER AS TO PRICE FOR ITEMS 1, 2, 3, 4, 5, AND 7. ANY SUCH REVISIONS MAY BE SUBMITTED BY TELEGRAM AND MUST BE RECEIVED BY 8:00 A.M. EST (UNIFORM TIME ACT - 66) 12 MAY 70 AND REFERENCE THE SOLICITATION NUMBER AND THIS MESSAGE. IF NO REVISION IS RECEIVED BY THAT TIME YOUR LATEST OFFER AS TO PRICE WILL BE USED IN EVALUATION. THE CLAUSE IN ASPR 2 -202.2 IS MODIFIED TO MEAN A QUOTATION RATHER THAN A BID AND IS APPLICABLE. ALL OTHER TERMS AND CONDITIONS OF SUBJECT RFQ AS AMENDED BY MY TELEGRAMS OF 26 MAR 70 AND 14 APRIL 70 REMAIN UNCHANGED.

CONTEMPORANEOUSLY WITH THE TRANSMITTAL OF THIS MESSAGE, CANOGA INQUIRED OF THE PROCURING ACTIVITY AS TO THE STATUS OF THE PROCUREMENT. CANOGA'S INQUIRY INDICATED IT HAD NEVER RECEIVED THE CONTRACTING OFFICER'S PREVIOUS TELEGRAM OF APRIL 14, 1970. CANOGA WAS ADVISED OF THE CONTENTS OF THE APRIL 14 TELEGRAM, TO WHICH IT RESPONDED BY TELEGRAM OF MAY 8, WHEREIN THE OPINION WAS EXPRESSED THAT AN ANTENNA ASSEMBLY OF 150 POUNDS WOULD NOT BE RUGGED ENOUGH TO MEET THE NAVY'S REQUIREMENTS. HOWEVER, CANOGA STATED ITS PRICES WERE NOT AFFECTED BY THE SPECIFICATION CHANGES. ON THE SAME DAY, CANOGA REPLIED TO THE CONTRACTING OFFICER'S MAY 4 TELEGRAM BY SUBMITTING "CANOGA'S LATEST PRICES" FOR ALL ITEMS EXCEPT NUMBER 6 IN THE AMOUNT OF $813,625. THE TELEGRAM STATED "THIS PRICING REFLECTS CANOGA'S CURRENT BID ALSO PREVIOUS REDUCTIONS IN PRICE *** ."

SINCE NO RESPONSE WAS RECEIVED FROM MICRONETICS, UNDER THE TERMS OF THE CONTRACTING OFFICER'S TELEGRAM OF MAY 4 THAT FIRM'S PRICE FOR ALL WORK EXCEPT ITEM 6 REMAINED AT $416,150. ON MAY 5, THE CONTRACTING OFFICER RECEIVED A MESSAGE FROM DATRON REDUCING ITS PRICE TO $345,384. THE STANDING OF THE OFFERORS ON MAY 12, 1970, WAS:

CANOGA $813,625

MICRONETICS 416,150

DATRON 345,384

DATRON OFFERED A FURTHER REDUCTION TO $328,364 IN A TELEGRAM OF MAY 11, WHICH WAS RECEIVED AFTER THE TIME SPECIFIED IN THE CONTRACTING OFFICER'S MESSAGE OF MAY 4. THE QUESTION OF WHETHER DATRON'S LATE SUBMISSION COULD BE CONSIDERED WAS THEN PRESENTED. IT IS THE POSITION OF THE DEPARTMENT OF THE NAVY THAT THE CONTRACTING OFFICER'S MAY 4 TELEGRAM WAS INTENDED TO, AND DID EFFECTIVELY, ESTABLISH 8:00 A.M. EST, MAY 12, 1970, AS THE CUTOFF DATE FOR NEGOTIATIONS. THEREFORE, IN THE NAVY'S VIEW, ON MAY 12 THE SUCCESSFUL OFFEROR WAS DATRON, AND ACCEPTANCE OF ITS LATE SUBMISSION WAS PROPER UNDER ASPR 3-506(G) WHICH PROVIDES IN PART:

HOWEVER, A MODIFICATION RECEIVED FROM AN OTHERWISE SUCCESSFUL OFFEROR WHICH IS FAVORABLE TO THE GOVERNMENT SHALL BE CONSIDERED AT ANY TIME THAT SUCH MODIFICATION IS RECEIVED.

WE DISCUSS MORE FULLY BELOW YOUR SOLE CONTENTION THAT THE MAY 4 TELEGRAM DID NOT PROVIDE ADEQUATE NOTICE THAT MAY 12 WAS THE CUTOFF DATE FOR SUBMISSION OF "BEST AND FINAL" OFFERS. WITHOUT ADDRESSING THE MERITS OF YOUR ARGUMENT AT THIS POINT, IT IS CLEAR FROM THE ADMINISTRATIVE RECORD THAT THE NAVY CONSISTENTLY REGARDED MAY 12 AS THE CUTOFF DATE FOR NEGOTIATIONS.

IT IS RELATED IN THE ADMINISTRATIVE REPORT, A COPY OF WHICH WAS FURNISHED YOU, THAT ON MAY 20, 1970, YOU CALLED THE NAFI BUYER FOR THIS PROCUREMENT AND INQUIRED WHETHER A FURTHER REVISION OF YOUR PROPOSAL WOULD BE CONSIDERED. THE BUYER REPLIED THAT WHILE HE COULD NOT PREVENT YOU FROM SUBMITTING A REVISION, THE MAY 4 TELEGRAM ESTABLISHED A CUTOFF DATE FOR SUBMISSION OF REVISIONS AND THAT YOUR REVISION WOULD PROBABLY BE CONSIDERED LATE. DESPITE THIS ADVICE YOU SUBMITTED A TELEGRAPHIC REVISION LATER THAT DAY, STATING THAT A NEW DESIGN APPROACH PERMITTED YOU TO MEET THE REQUIREMENT THAT THE ANTENNA ASSEMBLY WEIGH LESS THAN 150 POUNDS, AND THAT YOUR "LATEST OFFER" FOR ALL ITEMS EXCEPT NUMBER 6 WAS $563,340. THERE IS NOTHING OF RECORD INDICATING THAT YOUR "NEW DESIGN APPROACH" OFFERED AN "IMPORTANT TECHNICAL OR SCIENTIFIC BREAK THROUGH" WHICH WOULD HAVE PERMITTED CONSIDERATION OF YOUR REVISION UNDER ASPR 3-506(C) (II). EVEN IF YOUR REVISION OF MAY 20 HAD BEEN CONSIDERED, THE OFFERORS WOULD HAVE RANK AS FOLLOWS: CANOGA $568,340

MICRONETICS 416,150 DATRON 328,364

IT APPEARS THAT AT THIS TIME THE NAVY WAS ALSO CONSIDERING THE DELETION OF ITEM 7 (AN OPTION ITEM) AS WELL AS ITEM 6. THE OFFERORS' PRICES (INCLUDING YOUR OFFER OF MAY 20) FOR ITEMS 1 THROUGH 5 ONLY WERE:

CANOGA $559,910

MICRONETICS 373,350

DATRON 316,984

YOU AGAIN CALLED THE CONTRACTING OFFICER ON MAY 22, IN WHICH CONVERSATION YOU ALLEGED THAT YOU HAD NOT BEEN ADEQUATELY NOTIFIED THAT NEGOTIATIONS WERE BEING CLOSED ON MAY 12. THE CONTRACTING OFFICER DISAGREED AND INFORMED YOU THAT EVEN IF YOUR REVISION OF MAY 20 HAD BEEN ACCEPTED YOU WOULD STILL BE THE HIGH OFFEROR. YOUR CONTENTIONS WERE AGAIN EXPRESSED IN A TELEGRAM OF PROTEST TO THE PROCURING ACTIVITY ON JUNE 2, 1970.

ON JUNE 3, THE CONTRACTING OFFICER ADVISED YOU THAT A REPLY TO YOUR PROTEST WOULD BE MADE BY JUNE 10. THE ADMINISTRATIVE REPORT FURTHER STATES:

SINCE DECISION HAD BEEN MADE ON 27 MAY 70 TO AWARD TO DATRON, AS WAS DONE, AND IN AN EFFORT TO ALLAY MR. ILLEMAN'S UNHAPPINESS, (THE CONTRACTING OFFICER) ADVISED TO WHOM AWARD WOULD BE MADE AND IN WHAT AMOUNT.

IN A TELEGRAM SENT LATE IN THE AFTERNOON OF JUNE 3, YOU OFFERED A FURTHER REDUCTION IN PRICE TO $309,940 FOR ALL ITEMS EXCEPT NUMBER 6 AND TO $301,510 FOR ITEMS 1 THROUGH 5.

BY LETTER OF JUNE 5, 1970, THE CONTRACTING OFFICER NOTIFIED YOU THAT BECAUSE OF THE URGENT REQUIREMENT FOR THE SUPPLIES, AWARD HAD BEEN MADE ON THAT DATE TO DATRON IN THE AMOUNT OF $316,984 FOR ITEMS 1 THROUGH 5. THE AWARD WAS SUPPORTED BY A DETERMINATION AND FINDINGS SETTING FORTH THE CIRCUMSTANCES OF THE NEED FOR THE EQUIPMENT AND SHOWING THAT THE DELIVERY REQUIREMENTS WOULD NOT BE MET EVEN BY AN IMMEDIATE AWARD TO DATRON. YOUR PROTEST WAS DENIED BY THE CONTRACTING OFFICER ON JUNE 10, AND YOU PROTESTED TO THIS OFFICE AGAINST THE AWARD ON JUNE 12, 1970.

AS WE INDICATED ABOVE, THE SOLE CONTENTION OF YOUR PROTEST IS THAT THE CONTRACTING OFFICER'S TELEGRAM OF MAY 4, 1970, DID NOT ADEQUATELY INFORM "ALL OFFERORS OF THE SPECIFIED DATE AND TIME OF THE CLOSING OF NEGOTIATIONS AND THAT ANY REVISION TO THEIR PROPOSAL MUST BE SUBMITTED BY THAT DATE." IN VIEW THEREOF, YOU CONTEND THE AWARD TO DATRON WAS INVALID AND SHOULD BE SET ASIDE. YOU CITE OUR DECISIONS 48 COMP. GEN. 583 (1969); 48 ID. 536 (1969); 48 ID. 449 (1968); AND B-165837, MARCH 28, 1969, IN SUPPORT OF YOUR CONTENTION.

THE METHOD OF TERMINATING NEGOTIATIONS IS PRESCRIBED BY ASPR 3 805.1(B), WHICH PROVIDES IN PART:

*** WHENEVER NEGOTIATIONS ARE CONDUCTED WITH SEVERAL OFFERORS, WHILE SUCH NEGOTIATIONS MAY BE CONDUCTED SUCCESSIVELY, ALL OFFERORS, SELECTED TO PARTICIPATE IN SUCH NEGOTIATIONS (SEE (A) ABOVE) SHALL BE OFFERED AN EQUITABLE OPPORTUNITY TO SUBMIT SUCH PRICE, TECHNICAL, OR OTHER REVISIONS IN THEIR PROPOSALS AS MAY RESULT FROM THE NEGOTIATIONS. ALL SUCH OFFERORS SHALL BE INFORMED OF THE SPECIFIED DATE (AND TIME IF DESIRED) OF THE CLOSING OF NEGOTIATIONS AND THAT ANY REVISIONS TO THEIR PROPOSALS MUST BE SUBMITTED BY THAT DATE. ALL SUCH OFFERORS SHALL BE INFORMED THAT AND REVISION RECEIVED AFTER SUCH DATE SHALL BE TREATED AS A LATE PROPOSAL IN ACCORDANCE WITH THE "LATE PROPOSALS" PROVISIONS OF THE REQUEST FOR PROPOSALS. (IN THE EXCEPTIONAL CIRCUMSTANCES WHERE THE SECRETARY CONCERNED AUTHORIZES CONSIDERATION OF SUCH A LATE PROPOSAL, RESOLICITATION SHALL BE LIMITED TO THE SELECTED OFFERORS WITH WHOM NEGOTIATIONS HAVE BEEN CONDUCTED.) IN ADDITION, ALL SUCH OFFERORS SHALL ALSO BE INFORMED THAT AFTER THE SPECIFIED DATE FOR THE CLOSING OF NEGOTIATION NO INFORMATION OTHER THAN NOTICE OF UNACCEPTABILITY OF PROPOSAL, IF APPLICABLE (SEE 3- 508), WILL BE FURNISHED TO ANY OFFEROR UNTIL AWARD HAS BEEN MADE. WE HAVE HELD THIS PROVISION REQUIRES THAT OFFERORS BE ADVISED: (1) THAT NEGOTIATIONS ARE BEING CONDUCTED; (2) THAT OFFERORS ARE BEING ASKED FOR THEIR "BEST AND FINAL" OFFER, NOT MERELY TO CONFIRM OR RECONFIRM PRIOR OFFERS; AND (3) THAT ANY REVISION MUST BE SUBMITTED BY THE DATE SPECIFIED. 48 COMP. GEN. 536, 542 (1969).

THE CONTRACTING OFFICER'S TELEGRAM OF MAY 4, 1970, QUOTED ABOVE, UNQUESTIONABLY ADVISED OFFERORS THAT NEGOTIATIONS WERE BEING CONDUCTED AND SET A SPECIFIC TIME FOR THE RECEIPT OF REVISIONS. THE NOTICE DID NOT INFORM OFFERORS THAT AFTER THE CLOSING DATE NO INFORMATION OTHER THAN NOTICE OF UNACCEPTABILITY OF PROPOSAL WOULD BE FURNISHED UNTIL AWARD, AND THE NOTICE DID NOT REFER TO THE "LATE PROPOSALS" PROVISION OF THE SOLICITATION. HOWEVER, OFFERORS WERE INSTRUCTED THAT "IF NO REVISION IS RECEIVED BY THAT TIME YOUR LATEST OFFER AS TO PRICE WILL BE USED IN EVALUATION." WE NOTE THAT THE TELEGRAM INVITED REVISIONS TO PROPOSALS RATHER THAN CONFIRMATION OF PRIOR OFFERS. IN THIS RESPECT, THE INSTANT CASE DIFFERS FROM 48 COMP. GEN. 449 (1968) AND 48 COMP. GEN. 536 (1969), IN WHICH WE HELD TELEGRAMS REQUESTING OFFERORS TO "CONFIRM" PRIOR OFFERS, IN CONJUNCTION WITH OTHER CIRCUMSTANCES NOT PRESENT HERE, WERE INSUFFICIENT TO PROVIDE NOTICE THAT NEGOTIATIONS WERE BEING CLOSED. FURTHER, WE BELIEVE THE STATEMENT THAT "YOUR LATEST OFFER AS TO PRICE WILL BE USED IN EVALUATION" PLACED OFFERORS ON NOTICE THAT UNLESS THEY SUBMITTED A REVISED PRICE, THEIR LAST QUOTATION WOULD BE EVALUATED IN DETERMINING THE AWARD OF THE CONTRACT. THUS, WE CONCLUDE THAT THE MAY 4 TELEGRAM ADEQUATELY INFORMED OFFERORS OF THE TIME FOR CLOSING OF NEGOTIATIONS.

WE DO NOT BELIEVE OUR DECISIONS 48 COMP. GEN. 583 (1969) AND B 165837, MARCH 28, 1969, REQUIRE A DIFFERENT CONCLUSION. THE DEFICIENCY IN PROCEDURE DISCUSSED IN 48 COMP. GEN. 583 (1969) WAS NOT THAT THE NOTICE ESTABLISHING A CUTOFF DATE FOR NEGOTIATIONS WAS INADEQUATE, BUT THAT TWO DIFFERENT CUTOFF DATES WERE ESTABLISHED, WITH THE RESULT THAT NEGOTIATIONS WERE BEING CONDUCTED WITH SOME OFFERORS AFTER NEGOTIATIONS HAD BEEN CLOSED WITH ANOTHER OFFEROR. THIS DID NOT OCCUR IN THE INSTANT CASE.

IN B-165837, MARCH 28, 1969, ALTHOUGH THE NOTICE GIVEN OFFERORS WAS INEFFECTIVE TO FORMALLY CLOSE NEGOTIATIONS, IT OPERATED TO INFORMALLY CLOSE NEGOTIATIONS. WE THEN CONSIDERED WHETHER THE PROTESTANT WAS DISADVANTAGED BY TWO CONTACTS BETWEEN THE AGENCY AND THE SUCCESSFUL OFFEROR WHICH OCCURRED SUBSEQUENT TO THE INFORMAL CLOSING OF NEGOTIATIONS. WE DENIED THE PROTEST UPON CONCLUDING THAT THESE CONTACTS DID NOT CONFER A COMPETITIVE ADVANTAGE SOLELY UPON THE SUCCESSFUL OFFEROR. IN THE INSTANT CASE, THE ONLY CONTACT OF THE PROCURING ACTIVITY WITH DATRON BETWEEN MAY 12 AND THE AWARD OF THE CONTRACT WAS THE ACCEPTANCE OF THE LATE MODIFICATION TO DATRON'S PROPOSAL IN WHICH DATRON FURTHER REDUCED ITS PRICE. SINCE DATRON WAS THE LOW OFFEROR AS OF MAY 12, WE DO NOT BELIEVE THE ACCEPTANCE OF THE LATE MODIFICATION PREJUDICED THE OTHER OFFERORS.

FINALLY, WE NOTE THAT EVEN IF YOUR MODIFICATION OF MAY 20 HAD BEEN CONSIDERED FOR AWARD, YOUR REVISED PRICE OF $568,340 WOULD NOT HAVE BEEN THE LOWEST PRICE. ONLY BY CONSIDERING YOUR SECOND LATE REVISION OF JUNE 3, WHICH WAS SUBMITTED AFTER YOU HAD BEEN ADVISED OF THE PRICE AT WHICH IT WAS DECIDED ON MAY 27 THAT AN AWARD SHOULD BE MADE TO DATRON, DID YOU SUBMIT A PRICE REVISION SUFFICIENTLY LOW TO MAKE YOU THE LOW OFFEROR. IS ELEMENTARY THAT A PRICE REVISION SUBMITTED UNDER SUCH CIRCUMSTANCES IS UNFAIR TO THE OFFEROR WHOSE PRICE HAS BEEN REVEALED AND, THEREFORE, CANNOT BE THE BASIS OF A VALID AWARD.

IN VIEW OF THE FOREGOING, WE ARE UNABLE TO CONCLUDE THAT THE MANNER IN WHICH THE NEGOTIATIONS WERE CONDUCTED WAS UNFAIR OR PREJUDICIAL TO YOUR COMPANY. ACCORDINGLY, YOUR PROTEST IS DENIED.