B-171003, NOV. 12, 1970

B-171003, NOV. 12, 1970

BID PROTEST - NEGOTIATION - LATE TELEGRAPHIC MODIFICATION DENIAL OF PROTEST AGAINST REJECTION OF LATE TELEGRAPHIC MODIFICATION FOR FURNISHING DEXTROMETHORPHAN HYDROBROMIDE AND GLYCERYL GUAIACOLATE SYRUP UNDER REQUEST FOR PROPOSALS ISSUED BY DEFENSE PERSONNEL SUPPORT CENTER. ALTHOUGH A REVISION TO AN OFFER IN WHICH THE OFFEROR REDUCES THE PRICE SUBMITTED AFTER CLOSING DATE FOR RECEIPT OF PROPOSALS IS A LATE MODIFICATION THE ISSUE IS MOOT SINCE LATER CLOSING AGENCY DETERMINED LOWER PRICES COULD BE OBTAINED AND CHANGES IN DELIVERY SCHEDULES WERE DESIRED. THEREFORE, ALL OFFERORS WERE GIVEN OPPORTUNITY TO SUBMIT REVISED PROPOSALS AND PROTESTANT WAS PERMITTED TO INDICATE THAT ITS REDUCED PRICE WAS ITS FINAL OFFER, SO THAT PROTESTANT MAY NOT BE REGARDED AS BEING DENIED OPPORTUNITY TO COMPETE.

TO MR. JACOB H. FISCHMAN:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 8, 1970, PROTESTING ON BEHALF OF NATCON CHEMICAL COMPANY, INC., (NATCON) THE AWARD OF A CONTRACT TO ANY OTHER FIRM UNDER REQUEST FOR PROPOSALS (RFP) NO. DSA120-70-R-2154, ISSUED BY THE DEFENSE PERSONNEL SUPPORT CENTER, PHILADELPHIA, PENNSYLVANIA.

PURSUANT TO A DETERMINATION AND FINDINGS BY THE CONTRACTING OFFICER AUTHORIZING NEGOTIATION UNDER 10 U.S.C. 2304(A)(7), THE ABOVE REFERENCED SOLICITATION WAS ISSUED ON JUNE 26, 1970, FOR THE SUPPLY OF 243,840 BOTTLES OF DEXTROMETHORPHAN HYDROBROMIDE AND GLYCERYL GUAIACOLATE SYRUP. THE SOLICITATION, AS AMENDED, ESTABLISHED JULY 22, 1970, AS THE CLOSING DATE FOR RECEIPT OF PROPOSALS.

SEVERAL OFFERORS AMONG THOSE SOLICITED, INCLUDING NATCON, TIMELY SUBMITTED PROPOSALS. BY TELEGRAM OF SEPTEMBER 30, 1970, NATCON SUBMITTED A REDUCED UNIT PRICE. NATCON WAS ADVISED BY THE PROCURING ACTIVITY THAT THE TELEGRAM OF SEPTEMBER 30 COULD NOT BE CONSIDERED BECAUSE IT WAS A LATE MODIFICATION WITHIN THE MEANING OF THE CLAUSE "LATE OFFERS AND MODIFICATIONS OR WITHDRAWALS (1968 DEC)" CONTAINED IN THE SOLICITATION. YOU CONTEND IN YOUR LETTER OF OCTOBER 8, 1970, THAT THIS DETERMINATION WAS IN ERROR AND THAT "OUR REVISED PRICE IS NOT A MODIFICATION FALLING UNDER ANY PROVISION CONCERNING LATE PROPOSALS OR MODIFICATIONS THEREOF."

ALTHOUGH WE BELIEVE THAT A REVISION TO AN OFFER IN WHICH AN OFFEROR REDUCES HIS PRICE, SUBMITTED AFTER THE CLOSING DATE FOR RECEIPT OF PROPOSALS, IS A "LATE MODIFICATION," WE ALSO BELIEVE THIS ISSUE IS MOOT IN LIGHT OF THE PROCEDURES FOLLOWED IN THE PROCUREMENT SUBSEQUENT TO YOUR PROTEST.

IN THIS CONNECTION, WE NOTE THAT A COMPARISON OF THE REDUCED PRICE CONTAINED IN NATCON'S LATE MODIFICATION WITH THE OTHER INITIAL PROPOSALS RECEIVED LED THE PROCURING ACTIVITY TO CONCLUDE THAT LOWER PRICES COULD BE OBTAINED IF NEGOTIATIONS WERE CONDUCTED. THE PROCURING ACTIVITY ALSO WISHED TO MAKE CERTAIN CHANGES IN THE DELIVERY SCHEDULE. THESE CHANGES WERE CONTAINED IN A TELEGRAM DATED OCTOBER 13, 1970, FROM THE CONTRACTING OFFICER TO POTENTIAL SUPPLIERS, WHICH TELEGRAM ALSO STATED:

" *** TIME FOR RECEIPT OF PROPOSALS/MODIFICATIONS IS EXTENDED TO 5:00 PM 20 OCT 1970. ***

"BASED ON THE ABOVE LISTED CHANGES, YOU ARE REQUESTED TO REVIEW YOUR ORIGINAL QUOTATION AND SUBMIT YOUR BEST AND FINAL OFFER BOTH RESPECT TO PRICE AND DELIVERY. BASIC TERMS AND CONDITIONS OF THE INITIAL SOLICITATION REMAIN UNCHANGED. PROPOSALS/MODIFICATIONS RECEIVED AFTER TIME SET FORTH ABOVE WILL BE DEEMED 'LATE PROPOSALS'."

BY LETTER OF OCTOBER 16, 1970, NATCON RESPONDED TO THIS MESSAGE WITH A "FINAL OFFER" AT THE EXACT UNIT PRICE SET FORTH IN ITS LATE MODIFICATION OF SEPTEMBER 30, 1970, AND WE UNDERSTAND THAT THIS UNIT PRICE WILL BE CONSIDERED IN THE EVALUATION OF PROPOSALS FOR AWARD.

THE DECISION OF THE CONTRACTING OFFICER TO CONDUCT NEGOTIATIONS WAS AN ENTIRELY PROPER ONE. IN 47 COMP. GEN. 279 (1967), WHEREIN A LATE PRICE REDUCTION WAS RECEIVED AND NOT CONSIDERED BY THE CONTRACTING OFFICER, WE HELD THAT THE PROVISIONS IN ARMED SERVICES PROCUREMENT REGULATION 3-506 PROHIBITING THE ACCEPTANCE OF A LATE MODIFICATION OR OFFER, EXCEPT UNDER CERTAIN CIRCUMSTANCES, WERE NEVER INTENDED TO "PRECLUDE THE OPENING-UP OF NEGOTIATIONS WITH ALL OFFERORS COMPETITIVELY SITUATED UPON THE RECEIPT OF A LATE MODIFICATION TO A TIMELY OFFER WHICH FAIRLY INDICATES THAT SUCH NEGOTIATIONS WOULD PROVE HIGHLY ADVANTAGEOUS TO THE GOVERNMENT." THUS, ALTHOUGH WE BELIEVE THAT NATCON'S LATE MODIFICATION WAS PROPERLY REJECTED BY THE CONTRACTING OFFICER, SUBSEQUENT NEGOTIATIONS PERMITTED NATCON TO SUBMIT A PRICE WHICH NATCON DESIGNATED AS ITS FINAL OFFER. IN VIEW THEREOF, WE ARE UNABLE TO CONCLUDE THAT NATCON WAS IMPROPERLY DENIED AN OPPORTUNITY TO COMPETE IN THIS PROCUREMENT, AND YOUR PROTEST MUST THEREFORE BE DENIED.