B-170374, MAR 2, 1971

B-170374: Mar 2, 1971

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THE GAO WILL NOT DISTURB THE CONTRACTING OFFICER'S DETERMINATION THAT THE BORG-WARNER OFFER BASED ON A TARGET COST OF $272. GAO WILL NOT AFFIRM A PROTEST IN CONNECTION WITH A NEGOTIATED COST-REIMBURSEMENT TYPE CONTRACT ON BASIS THAT PROTESTANT'S OFFER WAS LOW WHEN. AN INITIAL ESTIMATE MAY NOT BE SO SECURE AS TO PREVENT A HIGHER ACTUAL COST OUTCOME FROM RESULTING THROUGH THE OPERATION OF INCENTIVE AND OVERRUN FACTORS AFTER AN AWARD TO THE LOWER TARGET FEE PROPOSER THAN WOULD HAVE RESULTED AFTER AN AWARD TO A HIGHER PROPOSER. IF THE ACTUAL COST OUTCOME IS GREATER THAN $362. THE ODETIC'S OFFER WILL RESULT IN A LOWER OVERALL COST TO THE GOVERNMENT. THAT ODETICS WAS NON RESPONSIBLE. THE INITIAL EMPHASIS ON ODETICS' NON RESPONSIBILITY HAS BEEN REFOCUSED AND IS NOW RAISED IN THE CONTEXT OF THE TECHNICAL EVALUATION OF THE PROPOSALS SUBMITTED BY YOUR FIRM AND ODETICS.

B-170374, MAR 2, 1971

BID PROTEST - NEGOTIATIONS - COST-REIMBURSEMENT TYPE CONTRACT DENIAL OF PROTEST OF BORG-WARNER CONTROLS AGAINST THE AWARD OF A COST PLUS-INCENTIVE-FEE CONTRACT ISSUED BY THE GODDARD SPACE FLIGHT CENTER (GSFC) FOR THE DESIGN AND TEST OF PROTOTYPE AND FLIGHT MODEL TAPE RECORDERS TO ODETICS, INC. THE GAO WILL NOT DISTURB THE CONTRACTING OFFICER'S DETERMINATION THAT THE BORG-WARNER OFFER BASED ON A TARGET COST OF $272,000 WITH AN 80/20 SHARING FORMULA AND RANGE OF INCENTIVE EFFECTIVENESS BETWEEN $242,000 AND $302,000 - MINIMUM INCENTIVE FEE 5%, MAXIMUM 9%, AND TARGET FEE 7%, - DID NOT RESEMBLE AN OFFER THAT SHOWED MUCH CONFIDENCE IN THE TARGET COST OFFERED ESPECIALLY IN COMPARISON WITH THE GSFC IN-HOUSE ESTIMATE FOR THE EFFORT OF $412,584. SIMILARLY, GAO WILL NOT AFFIRM A PROTEST IN CONNECTION WITH A NEGOTIATED COST-REIMBURSEMENT TYPE CONTRACT ON BASIS THAT PROTESTANT'S OFFER WAS LOW WHEN, AS NOTED ABOVE, AN INITIAL ESTIMATE MAY NOT BE SO SECURE AS TO PREVENT A HIGHER ACTUAL COST OUTCOME FROM RESULTING THROUGH THE OPERATION OF INCENTIVE AND OVERRUN FACTORS AFTER AN AWARD TO THE LOWER TARGET FEE PROPOSER THAN WOULD HAVE RESULTED AFTER AN AWARD TO A HIGHER PROPOSER. THIS CASE, IF THE ACTUAL COST OUTCOME IS GREATER THAN $362,000, THE ODETIC'S OFFER WILL RESULT IN A LOWER OVERALL COST TO THE GOVERNMENT.

TO BORG-WARNER CONTROLS:

WE REFER TO YOUR LETTER DATED SEPTEMBER 17, 1970, RESPONDING TO THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION'S (NASA) ADMINISTRATIVE REPORT ON YOUR PROTEST AGAINST THE AWARD OF A COST-PLUS-INCENTIVE-FEE (CPIF) CONTRACT TO ODETICS, INC., BY THE GODDARD SPACE FLIGHT CENTER ON JUNE 29, 1970, FOR THE DESIGN, FABRICATION, AND TEST OF PROTOTYPE AND FLIGHT MODEL TAPE RECORDERS, TOGETHER WITH RELATED INSTRUMENTATION AND DOCUMENTATION FOR USE ON THE ATMOSPHERE EXPLORER SPACECRAFT.

YOUR PROTEST RAISED TWO CONTENTIONS: FIRST, THAT ODETICS WAS NON RESPONSIBLE; SECOND, THAT YOUR FIRM SUBMITTED THE LOWEST PRICED OFFER. THE LETTER OF SEPTEMBER 17, THE INITIAL EMPHASIS ON ODETICS' NON RESPONSIBILITY HAS BEEN REFOCUSED AND IS NOW RAISED IN THE CONTEXT OF THE TECHNICAL EVALUATION OF THE PROPOSALS SUBMITTED BY YOUR FIRM AND ODETICS. IN ADDITION TO YOUR CONTENTION THAT ODETICS' PROPOSAL WAS NOT THE MOST ADVANTAGEOUS FROM A COST STANDPOINT, YOU MAINTAIN THAT THE CONTRACTING OFFICER FAILED TO CONDUCT ADEQUATE NEGOTIATIONS WITH YOUR FIRM. IN LIGHT OF THESE CONTENTIONS, WE HAVE CAREFULLY REVIEWED THE FACTS AND CIRCUMSTANCES WHICH CULMINATED IN THE AWARD OF A CPIF CONTRACT TO ODETICS AND WE HAVE CONCLUDED THAT NO LEGAL BASIS EXISTS TO QUESTION THAT AWARD.

THE FOLLOWING FACTS ARE PERTINENT TO OUR CONSIDERATION OF YOUR PROTEST. AFTER THE EVALUATION OF INITIAL AND REVISED TECHNICAL PROPOSALS AND A CONSIDERATION OF THE COST-PLUS-FIXED-FEE (CPFF) PRICES PROPOSED, BOTH YOUR FIRM AND ODETICS WERE DETERMINED BY THE CONTRACTING OFFICER TO BE WITHIN A COMPETITIVE RANGE. ODETICS WITH A PROPOSED CPFF CONTRACT PRICE OF $361,203 RECEIVED A TECHNICAL EVALUATION SCORE OF 123.2 AND YOUR FIRM HAVING PROPOSED A CPFF CONTRACT PRICE OF $320,000 RECEIVED 105.1 TECHNICAL EVALUATION POINTS.

BY LETTERS DATED APRIL 3, 1970, THE CONTRACTING OFFICER INVITED YOUR FIRM AND ODETICS "TO PROPOSE, WITHIN THE FRAMEWORK OF YOUR ORIGINAL PROPOSAL, ANY INCENTIVES OR COST CEILINGS THAT WOULD ENHANCE YOUR COMPETITIVE POSITION AND DEMONSTRATE CONFIDENCE IN YOUR ABILITY TO PERFORM EFFICIENTLY, ON SCHEDULE, AND AT THE LOWEST OVERALL COST." EACH LETTER ADVISED THAT RESPONSES MUST BE RECEIVED NO LATER THAN APRIL 10, 1970, AND THAT "NO UNSOLICITED PROPOSAL REVISIONS WILL BE CONSIDERED AFTER THAT DATE." THEREAFTER, BY TELEGRAM OF APRIL 9, 1970, THE RESPONSE DATE WAS EXTENDED TO APRIL 20, 1970. BOTH YOUR FIRM AND ODETICS SUBMITTED TIMELY RESPONSES. ODETICS OFFERED AN INCENTIVE-FEE ARRANGEMENT WITH A $380,000 COST CEILING; YOUR FIRM RETAINED THE CPFF ARRANGEMENT ORIGINALLY PROPOSED, BUT YOU REDUCED THE PROPOSED ESTIMATED COSTS FROM $320,000 TO $273,907.

ON APRIL 24, 1970, THE CONTRACTING OFFICER INFORMALLY ASKED YOUR FIRM TO CONSIDER SUBMITTING AN INCENTIVE-FEE ARRANGEMENT AND YOUR FIRM RESPONDED AFFIRMATIVELY BY LETTER DATED MAY 1, 1970, REVISING ITS COST PROPOSAL FROM CPFF TO A CPIF APPROACH. A MEMORANDUM FOR THE RECORD DATED JUNE 9, 1970, PREPARED BY THE CONTRACT NEGOTIATOR, INDICATES THAT DURING A SUBSEQUENT INFORMAL VISIT, REPRESENTATIVES OF YOUR FIRM ADVISED, IN VIEW OF THE NATURE OF THE EFFORT ENCOUNTERED IN PRIOR EFFORTS, BORG-WARNER WOULD NOT OFFER A CEILING ON OVERALL COST OR REVISE THE INCENTIVES ALREADY SUBMITTED ON MAY 1, 1970.

THEREAFTER, FURTHER TECHNICAL ANALYSIS AND COST STUDIES WERE CONDUCTED, AND ON JUNE 9, 1970, ODETICS' PROPOSAL WAS DETERMINED TO BE THE MOST ADVANTAGEOUS FROM BOTH A TECHNICAL AND COST STANDPOINT. HOWEVER, IN REACHING THIS DECISION, IT WAS FURTHER DECIDED THAT ODETICS' $380,000 COST CEILING SHOULD BE ELIMINATED. THIS WAS ACCOMPLISHED BY TELEPHONE NEGOTIATIONS ON JUNE 17, 1970, WHICH CULMINATED IN AN AGREEMENT FOR A 57/43 OVERRUN SHARE RATIO WITH A ZERO MINIMUM FEE IF COSTS EXCEED $380,000 AND AN 80/20 UNDERRUN SHARE RATIO.

THE RATIONALE FOR THIS DECISION IS EXPLAINED IN THE CONTRACT NEGOTIATOR'S MEMORANDUM OF JUNE 26, 1970, AND IN THE CONTRACTING OFFICER'S MEMORANDUM FOR THE RECORD DATED JULY 22, 1970, COPIES OF WHICH WERE FURNISHED TO YOU. THE CONTRACTING OFFICER'S MEMORANDUM CONTAINS THE FOLLOWING PERTINENT COMMENTS:

" *** (ODETICS) CEILING, IN THE OPINION OF THE CONTRACTING OFFICER, DEMONSTRATED A HIGH DEGREE OF CONFIDENCE ON THE PART OF THE CONTRACTOR THAT THE WORK COULD BE DONE WITHIN A REASONABLE RANGE OF HIS PROPOSED TARGET COST. THIS IS DESPITE THE FACT THAT THE GOVERNMENT ELECTED NOT TO INCLUDE THE CEILING OFFERED IN THE CONTRACT.

"THE BORG-WARNER OFFER, ON THE OTHER HAND, DID NOT, IN THE OPINION OF THE CONTRACTING OFFICER, OFFER THE SAME CONFIDENCE. THE BORG-WARNER TARGET COST WAS DECIDEDLY LOWER THAN ODETICS. THEY REDUCED THE TARGET COST FROM $320,000 TO $272,000. THEY PROPOSED AN 80/20 SHARING FORMULA WITH A RANGE OF INCENTIVE EFFECTIVENESS BETWEEN $242,000 AND $302,000. THE MINIMUM INCENTIVE FEE WAS 5% AND THE MAXIMUM FEE WAS 9% WITH THE TARGET FEE BEING 7%. MOREOVER, BORG-WARNER OFFERED AN INCENTIVE PROVISION WHEREBY THE FEE WOULD BE REDUCED BY $500 ON ANY UNITS THAT FAILED DURING THE SIX-MONTH LIFE TEST. MAXIMUM PERFORMANCE FEE WOULD BE $7,500 AND THE MINIMUM PERFORMANCE FEE WOULD BE $1,500. THIS MADE THEIR ACTUAL MINIMUM FEE TO BE GREATER THAN 5%. THIS, IN THE OPINION OF THE CONTRACTING OFFICER, DID NOT RESEMBLE AN OFFER THAT SHOWED MUCH CONFIDENCE IN THE TARGET COST OFFERED. MOREOVER, ONE MUST COMPARE THE BORG-WARNER OVERRUN SHARE LINE OF 80/20 TO THE RATIO NEGOTIATED WITH ODETICS OF 57/43 AND THEIR 5% MINIMUM FEE TO ODETICS' ZERO FEE MINIMUM.

"THE CONFIDENCE THAT WE HAD IN THE TARGET COST OFFERED BY BORG-WARNER WAS FURTHER LESSENED IN VIEW OF THE FACT THAT THE GSFC IN-HOUSE ESTIMATE FOR THIS EFFORT WAS $412,584. SIMPLY PUT, WE DID NOT BELIEVE THAT BORG-WARNER COULD PERFORM THE REQUIRED EFFORT FOR A DOLLAR AMOUNT WITHIN THEIR RANGE OF INCENTIVE EFFECTIVENESS. BECAUSE OF THE MINIMUM FEE OFFERED, WE BELIEVE THAT THE CONTRACTOR WOULD OVERRUN THIS EFFORT TO THE EXTENT THAT THE CONTRACT WOULD EVENTUALLY REVERT TO A CPFF CONTRACT WITH A FIXED FEE OF 5%. FINALLY, IT WAS THE CONCLUSION OF THE CONTRACTING OFFICER THAT THE OVERALL INCENTIVE ARRANGEMENT OFFERED BY ODETICS WAS SUPERIOR TO THE BORG- WARNER'S AND THE FACT THAT ODETICS WAS RANKED ABOUT 18 POINTS HIGHER THAN BORG-WARNER TECHNICALLY WAS SUFFICIENT TO OFFSET THE LOWER TARGET COST OFFERED BY BORG-WARNER, A TARGET WHICH THE GOVERNMENT HAD LITTLE CONFIDENCE COULD BE ACHIEVED.

" *** IF THE ACTUAL COST OUTCOME IS GREATER THAN $362,000, THE ODETICS' OFFER WILL RESULT IN A LOWER OVERALL COST TO THE GOVERNMENT. ONLY IF THE ACTUAL COST OUTCOME IS LESS THAN $362,000 WOULD THE BORG WARNER OFFER BE SUPERIOR FROM A COST STANDPOINT."

CONTRACTING OFFICERS HAVE A WIDE DISCRETION IN EVALUATING TECHNICAL AND PRICE PROPOSALS AND IN DETERMINING WHICH PROPOSAL IS MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. 47 COMP. GEN. 336, 341 (1967). MOREOVER, IN THE CONTEXT OF NEGOTIATED COST-REIMBURSEMENT CONTRACTS, AWARD NEED NOT NECESSARILY BE MADE TO THE OFFEROR PROPOSING THE LOWEST ESTIMATED COSTS. ALTHOUGH THE ULTIMATE COST TO THE GOVERNMENT IS CERTAINLY A FACTOR TO BE CONSIDERED IN EVALUATION, IT IS NOT CONTROLLING, PRINCIPALLY BECAUSE THERE IS NO ASSURANCE THAT THE ACTUAL COST WILL NOT EXCEED THE ESTIMATE. SEE B 165471, JANUARY 24, 1969. THIS APPROACH IS REFLECTED IN NASA PROCUREMENT REGULATION (PR) 3.805-2, WHICH FURTHER PROVIDES THAT:

" *** THERE IS NO REQUIREMENT THAT COST-REIMBURSEMENT TYPE CONTRACTS BE AWARDED ON THE BASIS OF EITHER (1) THE LOWEST PROPOSED COST, (2) THE LOWEST PROPOSED FEE, OR (3) THE LOWEST TOTAL ESTIMATED COST PLUS PROPOSED FEE. THE AWARD OF COST-REIMBURSEMENT TYPE CONTRACTS PRIMARILY ON THE BASIS OF ESTIMATED COSTS MAY ENCOURAGE THE SUBMISSION OF UNREALISTICALLY LOW ESTIMATES AND INCREASE THE LIKELIHOOD OF COST OVERRUNS. THE COST ESTIMATE IS IMPORTANT TO DETERMINE THE PROSPECTIVE CONTRACTOR'S UNDERSTANDING OF THE PROJECT AND ABILITY TO ORGANIZE AND PERFORM THE CONTRACT. THE AGREED FEE MUST BE WITHIN THE LIMITS PRESCRIBED BY LAW AND APPROPRIATE TO THE WORK TO BE PERFORMED (SEE 3 808). BEYOND THIS, HOWEVER, THE PRIMARY CONSIDERATION IN DETERMINING TO WHOM THE AWARD SHALL BE MADE IS: WHICH CONTRACTOR CAN PERFORM THE CONTRACT IN A MANNER MOST ADVANTAGEOUS TO THE GOVERNMENT."

WITH THE FOREGOING IN MIND, WE CAN FIND NO LEGAL SIGNIFICANCE IN YOUR ALLEGATION THAT THE GREATER PROFIT RISK IN ODETICS' PROPOSED FEE ARRANGEMENT IS "UNREALISTIC" AND "POOR BUSINESS." WE MUST ALSO REACH THE SAME CONCLUSION WITH RESPECT TO YOUR CONTENTION THAT ODETICS' TENDER OF A $380,000 CEILING WAS MADE IN ORDER TO KEEP ITS OFFER COMPETITIVE WITH YOURS. THE NEGOTIATION PROCESS IS DESIGNED TO ELICIT COMPETITIVE RESPONSES AND THERE IS NO HINT IN THE RECORD THAT ODETICS' OFFER WAS OTHER THAN AN EXERCISE OF ITS BUSINESS JUDGMENT.

AS YOU RECOGNIZE, THE CRITICAL FACTOR IN THE CONTRACTING OFFICER'S COST EVALUATION WAS THE RELATIVE CONFIDENCE PLACED IN ODETICS' ABILITY TO MEET ITS COST GOALS AND A CORRESPONDING LACK OF CONFIDENCE IN YOUR ESTIMATES. CITING YOUR PRIOR EXPERIENCE IN FURNISHING EQUIPMENT OF THE NATURE SOLICITED, YOU MAINTAIN THAT GREATER CREDENCE CAN BE PLACED IN YOUR COST GOALS AND YOUR ABILITY TO MEET THEM. WHILE THE COSTS PROPOSED BY YOUR FIRM AND ODETICS MAY TEND TO SUGGEST THAT NASA'S PROJECTION OF TOTAL COSTS IS OVERSTATED, WE CANNOT SAY THAT THE CONTRACTING OFFICER'S DECISION TO PLACE GREATER EMPHASIS ON THIS ESTIMATE WAS AN ABUSE OF DISCRETION. INDEED, THE ESTIMATED COSTS PROPOSED BY THE SIX OTHER SOURCES RESPONDING TO THE REQUEST FOR PROPOSALS (RFP) SUPPORT THE CONTRACTING OFFICER'S JUDGMENT. FURTHER, IF HIS PROJECTION OF ACTUAL COSTS PROVES TO BE REASONABLY CORRECT ODETICS' PROPOSAL WILL ULTIMATELY BE LESS COSTLY.

MOREOVER, WE MUST ALSO GIVE EFFECT TO THE CONTRACTING OFFICER'S SUBSTANTIAL RELIANCE ON ODETICS' HIGHER TECHNICAL RATING IN DETERMINING THAT ACCEPTANCE OF ITS PROPOSAL WAS MOST ADVANTAGEOUS. IN THIS REGARD, YOU STATE IN YOUR LETTER OF SEPTEMBER 17 THAT:

" *** IT IS INCONCEIVABLE TO BORG-WARNER CONTROLS HOW ODETICS CAN RECEIVE A HIGHER RATING WHEN THEY HAVE BEEN IN BUSINESS LESS THAN ONE YEAR AND WHEN, TO THE BEST OF OUR KNOWLEDGE, THEY HAVE NEVER DELIVERED A SATELLITE HIGH ENVIRONMENT RECORDER TO ANY AGENCY OF THE GOVERNMENT; WHEREAS, BORG- WARNER CONTROLS HAS BEEN IN THE HIGH ENVIRONMENT RECORDER BUSINESS FOR OVER TEN YEARS AND HAS DELIVERED APPROXIMATELY NINETY (90) HIGH ENVIRONMENT SATELLITE RECORDERS TO DIFFERENT GOVERNMENT AGENCIES."

WE BELIEVE THAT YOUR OBJECTION IS ADEQUATELY ANSWERED IN THE CONTRACTING OFFICER'S MEMORANDUM OF JULY 22:

" *** THE STRONG POINTS THAT FAVORED ODETICS IN THE TECHNICAL EVALUATION INCLUDED THE FACT THAT THEIR STAFF OF PERSONNEL WAS EXPERIENCED IN SPACECRAFT RECORDERS. ALSO, THE PROPOSED TRANSPORT DESIGN, UNIQUE WITH ODETICS, TOOK A BASIC NEGATOR REEL TENSIONING DESIGN AND ADDED A UNIQUE THREE CAPSTAN TAPE DECK TO ACHIEVE DIFFERENTIAL CAPSTAN TENSIONING IN TWO DIRECTIONS OF THE TAPE TRAVEL. THEIR DESIGN PROMISED TO ISOLATE THE TAPE IN THE HEAD AREA FROM THE REMAINDER OF THE TAPE PACK. ODETICS WAS RANKED SIGNIFICANTLY HIGHER THAN BORG-WARNER IN THEIR METHOD OF COMPONENT SELECTION, RELIABILITY AND QUALITY ASSURANCE, REPRODUCIBILITY, PERSONNEL EXPERIENCE, MANAGEMENT, AND ABILITY TO MEET SCHEDULE. THE BIGGEST SINGLE DRAWBACK TO THE ODETICS' PROPOSAL WAS THEIR LACK OF EXPERIENCE DUE TO THE RELATIVELY SHORT TIME THAT THIS COMPANY HAS BEEN IN OPERATION. *** "

FROM THE FOREGOING, IT IS CLEAR THAT ODETICS' TECHNICAL APPROACH WAS CONSIDERED TO BE SUPERIOR. THIS DETERMINATION WAS BASED ON A CONSIDERATION OF THE RESPONSES TO THE TECHNICAL REQUIREMENTS OF THE RFP. WE ALSO NOTE THAT WHILE ODETICS IS A NEW ORGANIZATION, ITS PERSONNEL HAVE PRIOR EXPERIENCE IN THE AREA, THEREBY ENHANCING THE CREDIBILITY OF ITS TECHNICAL APPROACH. MOREOVER, AS THE MEMORANDUM OF JULY 22 INDICATES, THE FACT THAT ODETICS HAD BEEN IN BUSINESS A SHORT TIME WAS NOT DISCOUNTED BY NASA. THE RECORD INDICATES THAT THE FIRM WAS SUBJECT TO A DEFENSE CONTRACTS ADMINISTRATION SERVICES SITE SURVEY AND ADDITIONAL INFORMATION WAS REQUESTED TO DETERMINE ITS ABILITY TO PERFORM AND FROM OUR REVIEW OF THE RECORD WE FIND NO BASIS TO DISTURB THE RESULTANT DETERMINATION THAT ODETICS HAD THE REQUISITE CAPABILITY TO PERFORM.

FINALLY, WITH RESPECT TO THE NEGOTIATION PROCEDURES EMPLOYED, WE NOTE INITIALLY THAT SINCE YOUR FIRM WAS DETERMINED TO BE WITHIN A COMPETITIVE RANGE, PRICE AND OTHER FACTORS CONSIDERED, THE CONTRACTING OFFICER DID CONDUCT NEGOTIATIONS WITH YOUR FIRM AS HE WAS REQUIRED TO DO BY 10 U.S.C. 2304(G) AND THE IMPLEMENTING NASA PR 3.805-1. SUBSECTION (C) OF THAT REGULATION REQUIRES THAT "ALL OFFERORS SELECTED TO PARTICIPATE IN SUCH NEGOTIATIONS *** SHALL BE OFFERED AN EQUITABLE OPPORTUNITY TO SUBMIT SUCH PRICE, TECHNICAL, OR OTHER REVISIONS IN THEIR PROPOSALS AS MAY RESULT FROM THE NEGOTIATIONS." WE BELIEVE THAT THE CIRCUMSTANCES OUTLINED ABOVE (AND WHICH ARE SUPPORTED BY THE RECORD) DEMONSTRATE THAT YOUR FIRM WAS AFFORDED AMPLE OPPORTUNITY TO SUBMIT ITS BEST PROPOSAL. YOU WERE ADVISED OF THE SPECIFIC TECHNICAL AND INFORMATIONAL DEFICIENCIES IN YOUR PROPOSAL. WITH RESPECT TO THE COST ASPECT OF YOUR PROPOSAL, THE CONTRACTING OFFICER CONTACTED YOUR FIRM ON APRIL 24, 1970, RELATIVE TO THE SUBMISSION OF AN INCENTIVE ARRANGEMENT, EVEN THOUGH THE LETTER OF APRIL 3, 1970, WAS APPARENTLY DESIGNED TO ESTABLISH A COMMON CUTOFF DATE FOR THE RECEIPT OF PROPOSAL REVISIONS IN ACCORDANCE WITH NASA PR 3.805-1(C). SUCH ACTION WAS NOT, AS THE DIRECTOR OF PROCUREMENT'S LETTER OF AUGUST 28, 1970, POINTS OUT, PREJUDICIAL TO YOUR FIRM. JUDGING THIS ACTION ALONE, THE QUESTION WOULD BE WHETHER THE FURTHER OPPORTUNITY AFFORDED YOUR FIRM WAS PREJUDICIAL TO ODETICS WHICH HAD RESPONDED ON APRIL 17 WITH ITS REVISED COST PROPOSAL. HOWEVER, ANY POSSIBLE PREJUDICE TO ODETICS WAS ELIMINATED BY THE SUBSEQUENT NEGOTIATIONS CONDUCTED WITH IT ON JUNE 17.

MOREOVER, WE DO NOT BELIEVE THAT IT WAS ERROR FOR THE CONTRACTING OFFICER TO ELIMINATE THE COST CEILING FROM ODETICS' PROPOSAL. THE CONTRACTING OFFICER HAD ALREADY DETERMINED THAT ODETICS' COST PROPOSAL WAS THE MOST ADVANTAGEOUS. HIS ACTION SERVED TO PLACE ODETICS' PROPOSAL ON A BASIS COMPARABLE TO YOURS AND BECAUSE OF YOUR DECLINATION TO PROVIDE A COST CEILING, WE CANNOT SEE WHAT PURPOSE WOULD HAVE BEEN SERVED BY FURTHER DISCUSSIONS OF THIS MATTER WITH YOUR FIRM. VIEWED IN THIS LIGHT, THE CONTRACTING OFFICER'S SUBSEQUENT FAILURE TO REESTABLISH A COMMON CUTOFF DATE WAS NOT, IN OUR OPINION, PREJUDICIAL TO YOUR FIRM AND, THEREFORE, DOES NOT PROVIDE A BASIS FOR DISTURBING THE AWARD. SEE 48 COMP. GEN. 583 (1969); ID. 536 (1969); ID. 449 (1968). WE ARE, HOWEVER, BRINGING THIS DEFICIENCY TO THE ATTENTION OF THE PROCUREMENT AGENCY FOR APPROPRIATE CORRECTIVE ACTION.

ACCORDINGLY, YOUR PROTEST IS DENIED.