B-171074, FEB 2, 1971

B-171074: Feb 2, 1971

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AS THE PROCUREMENT WAS NEGOTIATED BY MEANS OF A REQUEST FOR QUOTATION. IT IS NOT NECESSARY TO CONCLUDE THAT THE NAVY'S SPECIFICATIONS WERE DEFECTIVE DUE TO THEIR FAILURE TO INCLUDE A FINITE LIMITATION ON OVERALL SIZE OF THE SYSTEM. THE SOLICITATION DID STATE THAT SIZE WOULD BE AN EVALUATION FACTOR AND THE WEAKNESS OF PROTESTANT'S PROPOSAL ON THE SIZE FACTOR WAS COMMUNICATED TO THEM AND PROTESTANT WAS AFFORDED THE OPPORTUNITY TO SUBMIT A REVISED PROPOSAL OFFERING A SMALLER UNIT. UNDER SUCH CIRCUMSTANCES PROTESTANT WAS NOT SO PREJUDICED AS TO REQUIRE OR JUSTIFY A RESOLICITATION AND THE PROTEST IS DENIED. TO CGS/LAWRENCE: REFERENCE IS MADE TO YOUR TELEGRAM OF OCTOBER 15. OR ANY BIDDER OTHER THAN YOUR COMPANY ON THE BASIS THAT REJECTION OF YOUR PUMP UNIT DUE TO ITS LARGER RELATIVE SIZE WAS UNJUSTIFIED SINCE NO SIZE LIMITATION HAD BEEN STIPULATED BY THE RFQ.

B-171074, FEB 2, 1971

BID PROTEST - DEFECTIVE SPECIFICATIONS DENIAL OF PROTEST BY CGS/LAWRENCE, LOW BIDDER, AGAINST AWARD OF A CONTRACT FOR AN ELECTRO-HYDRAULIC PRESSURIZATION SYSTEM, WITH INSTALLATION AT THE NAVAL SHIP RESEARCH AND DEVELOPMENT LABORATORY, TO MTS SYSTEMS CORP., SECOND LOW BIDDER. AS THE PROCUREMENT WAS NEGOTIATED BY MEANS OF A REQUEST FOR QUOTATION, DESIGNED FOR FLEXIBLE AND INFORMAL PROCEDURES, IT IS NOT NECESSARY TO CONCLUDE THAT THE NAVY'S SPECIFICATIONS WERE DEFECTIVE DUE TO THEIR FAILURE TO INCLUDE A FINITE LIMITATION ON OVERALL SIZE OF THE SYSTEM. FURTHER, THE SOLICITATION DID STATE THAT SIZE WOULD BE AN EVALUATION FACTOR AND THE WEAKNESS OF PROTESTANT'S PROPOSAL ON THE SIZE FACTOR WAS COMMUNICATED TO THEM AND PROTESTANT WAS AFFORDED THE OPPORTUNITY TO SUBMIT A REVISED PROPOSAL OFFERING A SMALLER UNIT; UNDER SUCH CIRCUMSTANCES PROTESTANT WAS NOT SO PREJUDICED AS TO REQUIRE OR JUSTIFY A RESOLICITATION AND THE PROTEST IS DENIED.

TO CGS/LAWRENCE:

REFERENCE IS MADE TO YOUR TELEGRAM OF OCTOBER 15, 1970, PROTESTING THE AWARD OF REQUISITION N62462-70-01403, PURSUANT TO REQUEST FOR QUOTATIONS (RFQ) N66314-70-Q-5003, TO MTS SYSTEMS CORP., OR ANY BIDDER OTHER THAN YOUR COMPANY ON THE BASIS THAT REJECTION OF YOUR PUMP UNIT DUE TO ITS LARGER RELATIVE SIZE WAS UNJUSTIFIED SINCE NO SIZE LIMITATION HAD BEEN STIPULATED BY THE RFQ.

THE REQUISITION CALLED FOR PROCUREMENT OF AN ELECTRO-HYDRAULIC PRESSURIZATION SYSTEM, WITH INSTALLATION AT THE NAVAL SHIP RESEARCH AND DEVELOPMENT LABORATORY, ANNAPOLIS, MARYLAND, BY DECEMBER 30, 1970, AT A TOTAL ESTIMATED COST OF $27,500. THE RFQ WAS ISSUED JUNE 17, 1970, RESULTING IN THE SOLICITATION OF 40 FIRMS AND THE RECEIPT OF TWO QUOTATIONS BY THE CLOSING DATE, AUGUST 3, 1970:

OFFEROR TOTAL DISCOUNT

CGS/LAWRENCE $30,620.00

MTS SYSTEMS CORP. 38,000.00 6% - 10 DAYS

THE RFQ SPECIFICATIONS, SECTION 2.5, STIPULATED AT LINE B THAT "OVERALL DIMENSIONS OF SUB ASSEMBLIES" WAS TO BE ONE OF THE FACTORS UPON WHICH AN EVALUATION WOULD BE MADE OF THE MERITS OF THE RESPECTIVE TECHNICAL PROPOSALS, ALTHOUGH NO MAXIMUM SIZE WAS ACTUALLY SPECIFIED.

ON AUGUST 11, 1970, THE TWO QUOTATIONS WERE TRANSMITTED TO THE REQUISITIONING ACTIVITY FOR EVALUATION. ON SEPTEMBER 23, 1970, THE NAVAL SHIP RESEARCH AND DEVELOPMENT LABORATORY AT ANNAPOLIS EXPRESSED ITS PREFERENCE FOR MTS SYSTEMS' POWER SUPPLY DUE TO ITS SMALLER OVERALL DIMENSIONS (39-1/2" X 52" X 67-1/2") AS COMPARED WITH CGS/LAWRENCE'S UNIT (48" X 60" X 78"), SINCE SPACE REQUIREMENTS WERE LIMITED AT THE LABORATORY SITE.

ON OCTOBER 2, 1970, FURTHER DISCUSSIONS WERE CONDUCTED WITH BOTH OFFERORS. AT THAT TIME YOUR SALES MANAGER WAS APPRISED THAT A SMALLER UNIT WAS DESIRABLE IN VIEW OF THE LIMITATIONS ON SPACE AT THE ANNAPOLIS LABORATORY. HE WAS NOT TOLD THAT YOUR OFFER WAS UNACCEPTABLE IN ITS ORIGINAL STATE. HE WAS ASKED IF CGS/LAWRENCE COULD SUPPLY A UNIT APPROXIMATELY 8" SMALLER IN OVERALL DIMENSIONS AND WAS EXTENDED THE OPPORTUNITY TO SUBMIT A REVISED PROPOSAL. HE RESPONDED THAT WHILE CGS/LAWRENCE DID NOT MANUFACTURE A UNIT OF SUCH DIMENSIONS, ANOTHER UNIT WAS SUSCEPTIBLE TO MODIFICATION TO MEET THIS PREFERRED SPECIFICATION BUT THE COST OF SUCH ADAPTATION WOULD ENTAIL AN INCREASE IN CGS/LAWRENCE'S PRICE PROPOSAL OF A MINIMUM OF $2,300.00. BY TELEGRAM OF OCTOBER 2 YOU OFFERED A PRICE REDUCTION OF $1,600.00 FROM YOUR QUOTED PRICE, EFFECTIVE FOR THAT DAY ONLY.

ON THE BASIS OF THESE NEGOTIATIONS, AWARD WAS MADE TO MTS SYSTEMS IN THE SUM OF $31,000.00 BUT THE CONTRACTING OFFICER HAS REFRAINED FROM ENTERING HIS SIGNATURE ON THE CONTRACT PENDING RESOLUTION OF YOUR PROTEST.

ATTENTION IS DIRECTED TO THE FACT THAT THIS PROCUREMENT WAS NEGOTIATED BY MEANS OF A REQUEST FOR QUOTATION ISSUED PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 3-211. NEGOTIATION PROCEDURES, UNLIKE THOSE REQUIRED FOR FORMAL ADVERTISING, ARE DESIGNED TO BE FLEXIBLE AND INFORMAL. THESE PROCEDURES PROPERLY PERMIT THE CONTRACTING OFFICER TO DO THINGS IN THE AWARDING OF A NEGOTIATED CONTRACT THAT WOULD NOT BE PERMITTED IF THE PROCUREMENT WAS BEING ACCOMPLISHED BY FORMAL ADVERTISING. SEE 47 COMP. GEN. 279, 284 (1967).

WHILE YOUR CONTENTION THAT THE SPECIFICATIONS WERE DEFECTIVE DUE TO NAVY'S FAILURE TO INCLUDE A FINITE LIMITATION ON OVERALL SIZE MIGHT HAVE MERIT HAD THIS BEEN A PROCUREMENT PURSUANT TO FORMAL ADVERTISING, THE SAME CONCLUSION DOES NOT NECESSARILY FOLLOW IN A NEGOTIATED PROCUREMENT. THE VERY ESSENCE OF A NEGOTIATED PROCUREMENT IS THE INHERENT FLEXIBILITY ACCORDED THE GOVERNMENT TO OBTAIN THAT CONTRACT MOST ADVANTAGEOUS TO IT ON THE BASIS OF AN OPTIMAL MIX OF SEVERAL OF THE EVALUATION FACTORS ENUMERATED IN THE SOLICITATION.

IN THE PRESENT CASE, NO SPECIFIC SIZE LIMITATIONS WERE STATED, NOR COULD ANY BE STATED, SINCE THERE WERE NO SPECIFIC LIMITATIONS ON SIZE. THE ONLY CRITERION FOR SIZE WAS, AS STATED IN THE SOLICITATION, THAT IT WOULD BE AN EVALUATION FACTOR.

ASPR 3-805, PROMULGATED PURSUANT TO 10 U.S.C. 2304(G), ESTABLISHES THE PROCEDURES WITH WHICH THE ARMED SERVICES MUST COMPLY UPON THE RECEIPT OF INITIAL PROPOSALS UNDER NEGOTIATED PROCUREMENTS:

"3.805.1 GENERAL

"(A) AFTER RECEIPT OF INITIAL PROPOSALS, WRITTEN OR ORAL DISCUSSIONS SHALL BE CONDUCTED WITH ALL RESPONSIBLE OFFERORS WHO SUBMIT PROPOSALS WITHIN A COMPETITIVE RANGE, PRICE AND OTHER FACTORS (INCLUDING TECHNICAL QUALITY WHERE TECHNICAL PROPOSALS ARE REQUESTED) CONSIDERED ...

"(B) ... 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 ... "

IT IS A WELL ESTABLISHED PRINCIPLE IN FEDERAL PROCUREMENTS THAT SUCH DISCUSSIONS MUST BE MEANINGFUL AND FURNISH INFORMATION TO ALL OFFERORS WITHIN THE COMPETITIVE RANGE AS TO THE AREAS IN WHICH THEIR PROPOSALS ARE DEFICIENT SO THAT COMPETITIVE OFFERORS ARE GIVEN AN OPPORTUNITY TO FULLY SATISFY THE GOVERNMENT'S REQUIREMENTS. 47 COMP. GEN. 336 (1967). WHERE NEGOTIATIONS ARE CONDUCTED THE FACT THAT INITIAL PROPOSALS MAY BE RATED AS ACCEPTABLE DOES NOT INVALIDATE THE NECESSITY FOR DISCUSSIONS OF THEIR WEAKNESS, EXCESSES, OR DEFICIENCIES IN ORDER THAT THE CONTRACTING OFFICER MAY OBTAIN THAT CONTRACT WHICH IS MOST ADVANTAGEOUS TO THE GOVERNMENT. HAVE STATED THAT DISCUSSIONS OF THIS NATURE SHOULD BE CONDUCTED WHENEVER IT IS ESSENTIAL TO ENABLE AN OFFEROR TO UPGRADE HIS PROPOSAL. 47 COMP. GEN. 29 (1967).

IN WEIGHING THE ACTIONS OF THE NAVY AGAINST THE STANDARDS SET OUT ABOVE, THE RECORD INDICATES THAT THE NAVY FULLY COMPLIED WITH THESE REQUIREMENTS. FOLLOWING RECEIPT OF THE INITIAL PROPOSALS, FURTHER DISCUSSIONS WERE CONDUCTED WITH EACH OF THE OFFERORS, THE WEAKNESS OF YOUR PROPOSAL ON THE SIZE FACTOR WAS COMMUNICATED TO YOU, AND YOU WERE EXTENDED THE OPPORTUNITY TO SUBMIT A REVISED PROPOSAL.

PROCURING ACTIVITIES ARE ENCOURAGED TO STATE THEIR SPECIFICATIONS IN NEGOTIATED PROCUREMENTS WITH AS MUCH PARTICULARITY AS FEASIBLE UNDER THE CIRCUMSTANCES. HOWEVER, IN THIS CASE THE REQUISITIONING ACTIVITY HAS ADVISED THAT IT HAS A NUMBER OF FATIGUE TEST MACHINES OF DIFFERENT TYPES WHICH ARE USED TO TEST MATERIALS TO THE FAILURE POINT. THESE MACHINES ARE CROWDED TOGETHER IN A LIMITED SPACE AND ARE LAID OUT IN SUCH A MANNER THAT THE ELECTRO-HYDRAULIC PRESSURIZATION SYSTEM USED TO POWER THEM MUST BE OF THE SMALLEST SIZE AVAILABLE. IN VIEW THEREOF, AND, SINCE YOU WERE EXTENDED THE OPPORTUNITY TO SUBMIT A REVISED PROPOSAL OFFERING A SMALLER UNIT, AND YOU FAILED TO DO SO, WE ARE UNABLE TO CONCLUDE THAT YOU WERE SO PREJUDICED BY THE ABSENCE OF A FINITE LIMITATION ON SIZE IN THE RFQ AS TO REQUIRE OR JUSTIFY A RESOLICITATION.

ACCORDINGLY, YOUR PROTEST MUST BE DENIED.