B-170759, SEP 19, 1972

B-170759: Sep 19, 1972

Additional Materials:

Contact:

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

 

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

OFFERORS SHOULD BE ADVISED THAT (1) NEGOTIATIONS ARE BEING CONDUCTED. (2) OFFERORS ARE BEING ASKED TO SUBMIT THEIR "BEST AND FINAL" OFFER. GAO CANNOT FIND THAT THE ADMINISTRATIVE ACTION IN CONTINUING NEGOTIATIONS WAS UNREASONABLE OR ARBITRARY. THERE IS NOTHING IN THIS RECORD TO INDICATE THAT BENDIX'S BID WAS "LEAKED. IT IS YOUR BASIC CONTENTION THAT THE PROCEDURES FOLLOWED AND ACTIONS TAKEN BY SAMSO PROCUREMENT PERSONNEL WERE VIOLATIVE OF THE REQUIREMENTS OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR). ONLY ONE CONTRACT WAS TO BE AWARDED UNDER THE INSTANT SOLICITATION. BECAUSE OF DIFFERENCES IN FAILURE RATES IN YOUR EQUIPMENT AND HONEYWELL'S IT WAS DECIDED TO DEVELOP A MEANS TO PROTECT THE GOVERNMENT FROM LOW RELIABILITY.

B-170759, SEP 19, 1972

BID PROTEST - NEGOTIATIONS - CLOSING - NOTIFICATION - "LEAKED" BID DENIAL OF PROTEST BY THE BENDIX CORPORATION AGAINST THE AWARD OF A CONTRACT TO HONEYWELL, INC., UNDER AN RFP ISSUED BY THE SPACE AND MISSILE SYSTEMS ORGANIZATION, NORTON AFB, CALIF., FOR THE PROCUREMENT OF PENDULOUS INTEGRATING GYRO ACCELEROMETERS, MODEL G. TO OBTAIN PROPER NOTIFICATION OF THE CLOSE OF NEGOTIATIONS, OFFERORS SHOULD BE ADVISED THAT (1) NEGOTIATIONS ARE BEING CONDUCTED, (2) OFFERORS ARE BEING ASKED TO SUBMIT THEIR "BEST AND FINAL" OFFER, NOT MERELY TO RECONFIRM EARLIER OFFERS, AND (3) ANY REVISION MUST BE SUBMITTED BY THE DATE SPECIFIED. SEE 48 COMP. GEN. 539 (1969). SINCE THERE COULD BE A SUBSTANTIAL QUESTION AS TO WHETHER THE AUGUST 3 LETTER CLEARLY ADVISED THAT BEST AND FINAL OFFERS SHOULD BE SUBMITTED, GAO CANNOT FIND THAT THE ADMINISTRATIVE ACTION IN CONTINUING NEGOTIATIONS WAS UNREASONABLE OR ARBITRARY. FURTHER, THERE IS NOTHING IN THIS RECORD TO INDICATE THAT BENDIX'S BID WAS "LEAKED," OR THAT THE CONTRACTING PERSONNEL EMPLOYED AUCTION TECHNIQUES. ACCORDINGLY, THE PROTEST MUST BE DENIED.

TO THE BENDIX CORPORATION:

WE REFER TO YOUR LETTER OF JUNE 13, 1972, AND PRIOR CORRESPONDENCE, PROTESTING AGAINST THE AWARD OF A CONTRACT TO HONEYWELL, INCORPORATED (HONEYWELL), UNDER REQUEST FOR PROPOSALS (RFP) NO. F04701-70-R-0165, ISSUED BY THE SPACE AND MISSILE SYSTEMS ORGANIZATION (SAMSO), NORTON AIR FORCE BASE, CALIFORNIA, FOR THE PROCUREMENT OF PENDULOUS INTEGRATING GYRO ACCELEROMETERS (PIGA), MODEL G.

IT IS YOUR BASIC CONTENTION THAT THE PROCEDURES FOLLOWED AND ACTIONS TAKEN BY SAMSO PROCUREMENT PERSONNEL WERE VIOLATIVE OF THE REQUIREMENTS OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), AND CONTRACT LAW, PREJUDICING THE RIGHTS OF BENDIX IN THE PROCUREMENT AND RAISING CLEAR IMPLICATIONS OF FAVORITISM AND UNLAWFUL RESTRICTION OF COMPETITION.

YOUR FIRM AND HONEYWELL HAD BEEN CONCURRENT PRODUCERS OF PIGA'S, BUT DUE TO REDUCED FAILURE RATES AND LOWER REQUIREMENTS, ONLY ONE CONTRACT WAS TO BE AWARDED UNDER THE INSTANT SOLICITATION. BECAUSE OF DIFFERENCES IN FAILURE RATES IN YOUR EQUIPMENT AND HONEYWELL'S IT WAS DECIDED TO DEVELOP A MEANS TO PROTECT THE GOVERNMENT FROM LOW RELIABILITY. YOU DO NOT AGREE THAT BENDIX WAS RESPONSIBLE FOR THE HIGHER FAILURE RATE OF ITS EQUIPMENT.

TO PROTECT THE GOVERNMENT'S INTEREST IN THIS REGARD, THE INITIAL RFP, ISSUED ON APRIL 1, 1970, CONTAINED AN EVALUATION FACTOR GIVING RECOGNITION TO COSTS BASED ON THE HISTORICAL FAILURE RATE OF PIGA'S. THIS METHOD WAS LATER DISCARDED AND AMENDMENT NO. 5 WAS ISSUED ON JULY 2, 1970, EFFECTIVE JUNE 26, 1970, CHANGING THE TYPE OF CONTRACT FROM FIXED PRICE TO FIXED PRICE INCENTIVE, WITH A PERFORMANCE INCENTIVE BASED ON RELIABILITY.

YOU DO NOT OBJECT TO THE TYPE OF CONTRACT CONTEMPLATED BY THE RFP. HOWEVER, YOU MAINTAIN THAT AN ANTI-BENDIX BIAS EXISTED WITHIN SAMSO. THE OTHER HAND, AGENCY OFFICIALS INSIST THAT THEIR ACTIONS WERE AIMED ONLY AT ADEQUATELY AND EQUITABLY PROTECTING THE GOVERNMENT'S BEST INTEREST IN A COMPETITIVE ATMOSPHERE.

YOUR PRIMARY BASIS FOR PROTEST CONCERNS THE PROPRIETY OF THE CONTRACTING OFFICER'S LETTER DATED SEPTEMBER 1, 1970, ESTABLISHING SEPTEMBER 8, 1970, AS THE CLOSING DATE FOR NEGOTIATIONS. A FINAL CLOSING DATE FOR THE SUBMISSION OF PROPOSALS HAD ALREADY BEEN ESTABLISHED AS OF AUGUST 6, 1970. YOU URGE THAT THE REOPENING OF NEGOTIATIONS PREJUDICED BENDIX BECAUSE OF THE POSSIBILITY OF A "LEAK" OF PRICING INFORMATION IN YOUR PROPOSAL OF AUGUST 6, 1970, AND AN ALLEGED ANTI-BENDIX BIAS.

ON JULY 2, 1970, AMENDMENT NO. 5 TO THE RFP WAS ISSUED CHANGING THE TYPE OF CONTRACT TO BE AWARDED AND EXTENDING THE DEADLINE FOR RECEIPT OF PROPOSALS TO JULY 20. THE DEADLINE WAS LATER EXTENDED TO JULY 24. AUGUST 3 DISCUSSIONS WERE HELD WITH BOTH BENDIX AND HONEYWELL. AFTER THE MEETINGS LETTERS WERE SENT TO BOTH OFFERORS WHICH STATED IN PERTINENT PART "THE CLOSING TIME AND DATE AND LOCATION FOR RECEIPT OF PROPOSAL CORRECTIONS OR MODIFICATIONS, IF CONSIDERED NECESSARY BY YOU IS 1600 HOURS, 6 AUGUST 1970. (SAMSO/SMQK) NORTON AFB, CALIFORNIA". ON AUGUST 6 BOTH FIRMS SUBMITTED REVISED PROPOSALS.

LATER ON AUGUST 25 HONEYWELL SUBMITTED A PROPOSAL REVISION AND AN UNSOLICITED PROPOSAL. WE ARE INFORMED THAT THESE WERE INITIALLY TREATED AS "LATE PROPOSALS" BUT AFTER DELIBERATION SAMSO PERSONNEL CONCLUDED THAT NEGOTIATIONS HAD NOT BEEN PROPERLY CLOSED BY THE LETTER OF AUGUST 3. ACCORDINGLY, ON SEPTEMBER 1, LETTERS WERE ISSUED TO BOTH OFFERORS, WHICH PROVIDED AS FOLLOWS:

"TO COMPLY WITH ASPR 3-805.1(B), THE *** (OFFEROR) IS HEREBY INFORMED THAT NEGOTIATIONS FOR RFP F04701-70-R-0165, AS AMENDED, WILL BE CLOSED AS OF 0900 HOURS ON 8 SEP 1970. PROPOSALS RECEIVED AFTER THIS DATE WILL BE TREATED AS LATE PROPOSALS IN ACCORDANCE WITH PART I, SECTION C, PARAGRAPH 8 OF THE RFP AND ASPR 3-506. AFTER THE ABOVE PRESCRIBED TIME AND DATE FOR THE CLOSING OF NEGOTIATIONS, NO INFORMATION OTHER THAN NOTICE OF UNACCEPTABILITY OF PROPOSAL, IF APPLICABLE, (REFERENCE ASPR 3-508), WILL BE FURNISHED UNTIL AWARD HAS BEEN MADE."

YOUR PROTEST AGAINST THE ISSUANCE OF THE LETTER WAS DENIED BY THE CONTRACTING OFFICER ON SEPTEMBER 4. YOU SUBSEQUENTLY PROTESTED TO THIS OFFICE ON SEPTEMBER 8. ON THAT DATE HONEYWELL SUBMITTED A REVISED PROPOSAL. ON OCTOBER 30, NOTWITHSTANDING THE PENDENCY OF THE SUBJECT PROTEST, THE CONTRACT WAS AWARDED TO HONEYWELL AS THE LOW OFFEROR.

IN REGARD TO THE PROPER NOTIFICATION OF THE CLOSE OF NEGOTIATIONS, WE HAVE HELD THAT OFFERORS SHOULD BE ADVISED THAT (1) NEGOTIATIONS ARE BEING CONDUCTED, (2) OFFERORS ARE BEING ASKED FOR THEIR "BEST AND FINAL" OFFER, NOT MERELY TO CONFIRM OR RECONFIRM PRIOR OFFERS AND (3) ANY REVISION MUST BE SUBMITTED BY THE DATE SPECIFIED. SEE 48 COMP. GEN. 539 (1969). IT IS TRUE THAT IN 50 COMP. GEN. 456 (1970), WE HELD THAT IN GIVEN CIRCUMSTANCES A MESSAGE COULD EFFECTIVELY CUT OFF NEGOTIATIONS WITHOUT MEETING THE THREE STANDARDS CITED ABOVE, BUT IN THAT CASE CONSIDERATION OF THE LATE MODIFICATION SENT BEFORE THE OFFEROR WAS NOTIFIED OF THE AMOUNT OF THE SUCCESSFUL OFFER AND THE IDENTITY OF THE SUCCESSFUL OFFEROR WOULD NOT HAVE AFFECTED THE OUTCOME. IN THE CITED CASE SEVERAL MESSAGES OF SIMILAR IMPORT HAD BEEN SENT TO THE OFFERORS BY THE CONTRACTING OFFICER WHICH COULD AS READILY HAVE BEEN REGARDED AS CONCLUDING NEGOTIATIONS. THE FACT THAT THEY WERE NOT SO CONSIDERED SUPPORTS THE PROPOSITION THAT THE CONTRACTING ACTIVITY IS NOT PRECLUDED FROM CONTINUING NEGOTIATIONS FOR SOME LEGITIMATE PURPOSE EVEN AFTER A CALL FOR BEST AND FINAL OFFERS HAS BEEN ISSUED. IN THE PRESENT CASE WE ARE INCLINED TO AGREE THERE COULD BE A SUBSTANTIAL QUESTION WHETHER THE AUGUST 3 LETTER, PARTICULARLY THE VERSION SENT TO HONEYWELL, CLEARLY ADVISED THAT BEST AND FINAL OFFERS SHOULD BE SUBMITTED. IN THE CIRCUMSTANCES WE CANNOT FIND THAT THE ADMINISTRATIVE ACTION IN CONTINUING NEGOTIATIONS BEYOND AUGUST 6 WAS UNREASONABLE OR ARBITRARY.

IN REGARD TO YOUR ALLEGATION THAT THE INCLUSION OF A REQUEST FOR A CERTIFICATE OF CURRENT PRICING IN BOTH THE AUGUST 3 LETTERS CLEARLY IMPLIES THAT NEGOTIATIONS WERE TO BE CLOSED, SAMSO STATES:

"THE SPECIFIC REQUIREMENT FOR A CERTIFICATE OF CURRENT PRICING IN THE 3 AUGUST 1970 LETTER SIGNED BY MR. LOUKOS, WHICH BENDIX CONSIDERS SUFFICIENT TO GIVE NOTICE OF CLOSING OF NEGOTIATIONS HAS NO SUCH IMPORT. ALTHOUGH ASPR 3-807.4 ADVISES THAT THE CERTIFICATE BE OBTAINED 'AS SOON AS POSSIBLE AFTER AGREEMENT IS REACHED IN CONTRACT PRICE,' IT HAS BEEN THE PRACTICE OF SAMSO, AND A FACT KNOWN BY PREVIOUS DEALING WITH EACH OF THESE CONTRACTORS, TO OBTAIN CERTIFICATES OF CURRENT PRICING WITH INITIAL PROPOSALS AND FOR MAJOR CHANGES TO RFP'S SUCH AS AMENDMENT #5 TO RFP - 0165."

WE CAN FIND NO BASIS UPON WHICH TO DISAGREE WITH THIS POSITION.

YOU FURTHER ALLEGE THAT YOUR FIRM'S PRICING DATA WAS "LEAKED" BY AGENCY PERSONNEL. IN THIS REGARD, THE ADMINISTRATIVE REPORT STATES"

"*** EVERY EFFORT WAS MADE TO PROTECT THE INFORMATION AND PRICES OFFERED IN THE PROPOSALS OF BOTH OFFERORS. THE PROPOSALS HAVE BEEN KEPT IN A LOCKED SAFE IN LT COL ACE'S OFFICE AND ONLY THOSE PERSONS ESSENTIAL TO THE EVALUATION (THE BUYING AND PRICING OFFICES) HAVE HAD AN OPPORTUNITY TO VIEW THEM. ONLY THOSE PERSONS NECESSARY TO MAKE AWARD OF A CONTRACT HAVE ANY OTHER KNOWLEDGE OF THE PROGRESS OF THE PROCUREMENT. THESE PRIVILEDGED FEW DO NOT INCLUDE CAPT GOGOSHA, OR ANY OTHER MEMBER OF THE PROJECT OFFICE OF WHICH HE IS A PART. (COL HEPFER WAS TRANSFERRED TO ANOTHER HEADQUARTERS ON 15 JULY 1970.).

"CAPT GOGOSHA IN HIS AFFIDAVIT (TAB 3F) EXPLAINS THE BASIS FOR HIS USE OF THE FIGURES IN HIS 31 AUGUST 1970 CONVERSATION WITH MR. CLARRY OF BENDIX. ACTUALLY THE PRICE REFERENCED IN MR. J. F. CLARRY'S AFFIDAVIT WAS A GENERAL FIGURE WHICH REPRESENTED THE MOST PREDOMINANT AND RECURRING UNIT PRICE FOR THE ESTIMATED FISCAL YEAR REQUIREMENTS IN THE 20 JULY 1970 BENDIX PROPOSAL. THIS GENERAL FIGURE HAD BEEN USED WHEN REFERRING TO BENDIX' 20 JULY 1970 PROPOSAL IN DISCUSSIONS BETWEEN CAPT GOGOSHA AND THE BUYING OFFICE DURING CAPT GOGOSHA'S TECHNICAL REVIEW OF THE OFFEROR'S 20 JULY 1970 PROPOSAL, SINCE IT WAS APPROXIMATELY THE LOWEST UNIT PRICE OFFERED IN THAT PROPOSAL.

"BECAUSE OF THE PREDOMINANCE OF THAT UNIT PRICE IN THE FISCAL YEAR FIGURES (FY 71, FY 72, FY 73 AND FY 74) AND BECAUSE OF ITS GENERAL USE IN PREVIOUS DISCUSSIONS WITH PROCUREMENT, IT WOULD LOGICALLY BE THE ONE MENTIONED IN LATER DISCUSSIONS. FURTHERMORE, CAPT GOGOSHA WOULD HAVE QUITE NATURALLY USED WHAT WAS TO HIS KNOWLEDGE THE LOWEST UNIT PRICE OFFERED IN EXPRESSING CONCERN AS TO WHETHER BENDIX COULD REALLY STRESS RELIABILITY AND STILL BUILD THE PIGA AT THE REFERENCED FIGURE, A PRICE CONSIDERABLY CHEAPER THAN THEIR PREVIOUS PRICES. BENDIX, UNFORTUNATELY, ELECTED TO LINK THE REFERENCED FIGURE TO THEIR 6 AUGUST 1970 PROPOSAL UNIT PRICE FOR FY 71. WE THINK IT IS COINCIDENTAL AND INSIGNIFICANT THAT THE UNIT PRICE CAPT GOGOSHA PICKED TO REPRESENT THIS PROCUREMENT IS CLOSE TO A UNIT PRICE QUOTED IN BENDIX' 6 AUGUST 1970 PROPOSAL. WE DO NOT BELIEVE THAT THERE WAS ANY WAY IN WHICH CAPT GOGOSHA COULD HAVE OBTAINED A UNIT PRICE FROM BENDIX' 6 AUGUST 1970 PROPOSAL.

"BENDIX, ON PAGE 14 OF THEIR PROTEST, SUGGESTS A COMPARISON OF PRICES OFFERED ON 6 AUGUST 1970 BY BOTH OFFERORS AND THOSE SUBMITTED BY HONEYWELL ON 8 SEPTEMBER 1970 TO SUBSTANTIATE THEIR CLAIM OF AN INFORMATIONAL LEAK. WE WELCOME SUCH A COMPARISON AND THINK IT WILL INDICATE QUITE THE CONTRARY. FURTHERMORE, HAD HONEYWELL KNOWN BENDIX' 6 AUGUST 1970 PROPOSAL PRICES, IN ALL PROBABILITY IT WOULD HAVE BEAT THOSE PRICES IN HONEYWELL'S 25 AUGUST 1970 PROPOSAL. THIS DID NOT HAPPEN. *** HONEYWELL EXPLAINED THEIR WILLINGNESS TO REDUCE PRICES IN THEIR 25 AUGUST 1970 PROPOSAL (SEE TAB 5B) STATING THAT THEY COULD CUT COST ESTIMATES AND PROFIT TO A THIN MARGIN AND STILL RECOUP ADEQUATE PROFIT BECAUSE THEIR DEMONSTRATED RELIABILITY PLACED THEM FAR ON THE POSITIVE SIDE OF THE PERFORMANCE INCENTIVE. BUT THE MOST IMPORTANT EFFECT OF HONEYWELL'S 25 AUGUST 1970 PROPOSAL WAS THE FACT THAT IT PROMPTED THE AIR FORCE'S REALIZATION THAT NEGOTIATIONS HAD NOT BEEN CLOSED."

ALTHOUGH YOU CONTEND THAT "LEAKS" WERE PROBABLE YOU OFFER NO EVIDENCE WHICH CAN BE SAID TO CONTROVERT SAMSO'S EXPLANATION OF THIS MATTER. YOU PLACE MUCH EMPHASIS ON 50 COMP. GEN. 1 (1970) AS SUPPORTIVE OF YOUR CONTENTION THAT BENDIX PRICING DATA WAS "LEAKED". WE DO NOT BELIEVE THAT CASE IS APPLICABLE TO THE INSTANT SITUATION. IN 50 COMP. GEN. 1 THE POSSIBILITY OF A LEAK AROSE BECAUSE OF THE LACK OF A COMMON CUTOFF DATE WHICH RESULTED IN A SEVEN DAY INTERVAL BETWEEN THE SUBMISSION OF THE TWO BEST AND FINAL OFFERS. HERE, THE SEPTEMBER 1 LETTER CLEARLY ESTABLISHED A COMMON CUTOFF DATE AND PROVIDED AN OPPORTUNITY FOR BOTH OFFERORS TO SUBMIT REVISED PROPOSALS.

IN ADDITION, YOU CONTEND THAT PREJUDICE AGAINST BENDIX IS EVIDENCED BY THE FACT THAT SAMSO ALLOWED A SEVEN WEEKS TIME LAPSE AFTER YOUR FIRM'S FIRST PROPOSAL SUBMISSION, WHICH WAS LOW, AND THREE WEEKS AFTER YOUR FIRM'S THIRD PROPOSAL, ALSO, LOW IN CONTRAST TO THE SHORT TIME TAKEN TO EVALUATE YOUR SECOND PROPOSAL, WHICH WAS NOT LOW.

THE SAMSO POSITION ON THIS POINT IS AS FOLLOWS:

"AMENDMENT #3 TO THE RFP ISSUED ON 22 APRIL, MARKS THE TRUE BEGINNING OF THE TIME LAPSE WHEN IT DELETED THE RELIABILITY COST EVALUATION FACTOR INCLUDED IN THE BASIC RFP AND AMENDMENT #1 IN ORDER TO PLACE THE PROCUREMENT ON A PURELY PRICE COMPETITIVE, FFP BASIS AS THE RESULT OF CONCERN BY PROCUREMENT PERSONNEL AS TO THE ACCURACY AND APPLICABILITY OF THE EXISTING RELIABILITY MEASUREMENT APPROACH. SINCE TIME WAS OF THE ESSENCE, IT WAS FELT THAT THE FFP PROPOSALS COULD BE REVIEWED BY AUDIT AND THE ACO WHILE THE PROCURING ACTIVITY WRESTLED WITH THE PROPER SOLUTION TO THE RELIABILITY PROBLEM. THERE WAS THOUGHT OF REVISING THE APPROACH ON THE COST OF RELIABILITY DURING NEGOTIATION, BUT THE BEST METHOD WAS NOT CLEAR AT THE TIME OF AMENDMENT #3 RELEASE. LIQUIDATED DAMAGES WERE CONSIDERED AS WAS MODIFICATION OF THE TYPE OF CONTRACT OR APPLICATION OF A MORE STRINGENT WARRANTY. OUR PRIMARY CONCERN WAS ADEQUATE PROTECTION OF THE GOVERNMENT'S BEST INTERESTS WHILE ASSURING EQUITABLE TREATMENT OF BOTH CONTRACTORS. REPRESENTATIVES OF THE BENDIX CORPORATION (MR. CLARRY, THE LOCAL REPRESENTATIVE AND MR. K. CRANE, TETERBORO OFFICE) HAD VERBALLY OBJECTED TO THE APPLICATION OF EXISTING FAILURE DATA WHEN THE BASIC RFP WAS ISSUED ON THE GROUNDS THAT THEIR RELIABILITY WAS IMPROVING AND SUCH APPLICATION OF PAST DATA TO PRESENT AND FUTURE FAILURE PROJECTIONS WAS NOT EQUITABLE AND NOT REPRESENTATIVE OF FUTURE OUTCOME. THIS VERBAL DISCUSSION WAS LATER SUPPORTED BY THE INCLUSION IN THEIR PROPOSAL MSQ/1202 DATED 8 APRIL 1970 SUBMITTED 4 MAY 1970, THE STATEMENT 'BENDIX HAS INSTITUTED A 16 PIGA MODEL G WHEEL IMPROVEMENT PROGRAM (SECTION I) WHICH WE FEEL WILL SIGNIFICANTLY IMPROVE MEAN TIME BETWEEN FAILURE (MTBF) AND MEAN TIME BETWEEN REPLACEMENT (MTBR), AS SUCH, WE REQUEST THAT THE EVALUATION CRITERIA AS CALLED OUT IN PARAGRAPH 1C, PART I, SECTION D, BE RECONSIDERED'. WE WERE ACTIVELY RECONSIDERING THE SITUATION BEFORE THE FIRST PROPOSALS WERE RECEIVED. WE SAW NO POINT IN SUBJECTING THE CONTRACTORS TO A PRICING EXERCISE RELATING TO RELIABILITY COSTS UNTIL SUCH TIME AS THE MOST ACCURATE, EQUITABLE APPROACH COULD BE DEVELOPED, COORDINATED AND INCORPORATED. ON THE OTHER HAND, PROPOSALS WERE DESIRED ON THE PIGAS AND DATA IN ORDER TO INITIATE THE LOCAL AUDIT AND ACO REVIEW WHICH REQUIRES SOME 45 DAYS AFTER PROPOSAL RELEASE. MODIFICATION OF THE RFP TO INCORPORATE RELIABILITY REQUIREMENTS COULD BE ACCOMPLISHED CONCURRENT WITH THE AUDIT REVIEW WITH LITTLE OVERALL AFFECT ON THE RATHER TIGHT TIME SCHEDULE. "ON 4 MAY 1970, THE FIRM-FIXED PRICE PROPOSALS WERE RECEIVED FROM BOTH CONTRACTORS. IN THE MEANTIME, SAMSO WAS STILL ATTEMPTING TO ARRIVE AT AN ACCEPTABLE APPROACH FOR INCLUSION OF THE RELIABILITY FACTOR. *** IT SHOULD BE NOTED HERE THAT A CHANGE WOULD HAVE BEEN REQUIRED NO MATTER WHICH CONTRACTOR WAS THE LOWEST OFFEROR SINCE RELIABILITY UNDER THE EXISTING PROPOSALS WERE MERELY A GOAL AND THE SAMSO TECHNICAL REPRESENTATIVES INSISTED THAT THIS APPROACH WAS SIMPLY NOT ADEQUATE. ***

"ADMITTEDLY, SEVEN WEEKS ELAPSED FROM THE 4 MAY 1970 PROPOSAL RECEIPT UNTIL RELEASE OF AMENDMENT #5 TO THE RFP WITHOUT NEGOTIATIONS, BECAUSE AUDIT AND ACO INPUT WAS REQUIRED *** BEFORE NEGOTIATIONS COULD BE STARTED AND AMENDMENT #5 WAS IN PROCESS DURING THIS TIME. IT SHOULD ALSO BE NOTED THAT THE CONTRACT NEGOTIATOR ON THIS PROCUREMENT HAS THREE OTHER CONTRACTS AND WAS ANALYZING, NEGOTIATING AND FINALIZING ANOTHER CONTRACT DURING THIS TIME.

"ONLY FIVE DAYS WERE REQUIRED TO EVALUATE THE SECOND PROPOSALS BECAUSE THEY WERE ESSENTIALLY REPETITIOUS EXCEPT FOR THE INCENTIVE EFFECT. ADDITIONALLY, NO OTHER CONTRACTS WERE BEING NEGOTIATED BY THE CONTRACT NEGOTIATOR ON THIS PROCUREMENT AT THIS TIME. ***"

THE RECORD CONTAINS NO BASIS FOR QUESTIONING SAMSO'S POSITION ON THIS POINT.

FINALLY, YOU CONCLUDE THAT SAMSO PERSONNEL EMPLOYED AUCTION TECHNIQUES WHICH ARE PROHIBITED BY ASPR 3-805.1(B). IN THIS REGARD YOU ALLEGE THAT THE DISCLOSURE OF RELATIVE PRICING POSITIONS ACTUALLY OCCURRED WHEN THE CONTRACTING OFFICER INDICATED THAT HONEYWELL'S AUGUST 26 PROPOSAL WAS BEING EVALUATED IN ACCORDANCE WITH THE LATE PROPOSAL PROCEDURE OF ASPR 3- 506. YOU ALLEGE THAT FROM THIS INFORMATION BOTH OFFERORS COULD EASILY CONCLUDE THAT BENDIX'S AUGUST 6 PROPOSAL WAS LOWER THAN HONEYWELL'S CORRESPONDING PROPOSAL SINCE ANY LOWER PRICE OFFERED BY HONEYWELL ON AUGUST 25 AUTOMATICALLY WOULD HAVE BEEN ACCEPTED PURSUANT TO ASPR 3- 506(G).

WE FIND NO EVIDENCE IN THE RECORD WHICH INDICATES THAT HONEYWELL WAS INFORMED THAT ITS AUGUST 25 PROPOSAL WAS BEING CONSIDERED PURSUANT TO ASPR 3-506(C)(II).

IN VIEW OF THE FOREGOING, WE MUST DENY YOUR PROTEST.