B-171260, APR 8, 1971

B-171260: Apr 8, 1971

Additional Materials:

Contact:

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

 

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

ORIGINAL BIDS WERE TECHNICALLY UNACCEPTABLE AND IN REQUESTING CLARIFICATION BOTH OFFERORS WERE WARNED BY CONTRACTING OFFICER THAT NECESSARY CHANGES MIGHT AFFECT QUOTED PRICE. SUCH PROCEDURES ARE CONSISTENT WITH THE POLICY THAT UP TO CLOSE OF NEGOTIATIONS OFFERORS BE ALLOWED TO CHANGE QUOTATIONS. TO SANTA CRUZ ENGINEERING: REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 11. YOU CONTEND THAT A SECOND PRICING ROUND WAS INITIATED AFTER RELATIVE POSITIONS BECAME KNOWN AMONG THE OFFERORS AND THAT A FIRM COULD NOT SUBMIT A PROPOSAL BECAUSE THE MANUFACTURER. TWO QUOTATIONS WERE RECEIVED. THE ONE FROM YOUR FIRM WAS LOW. THE OTHER WAS FROM WATKINS-JOHNSON. THE TWO TECHNICAL PROPOSALS WERE FURNISHED TO THE REQUIRING AGENCY FOR EVALUATION ON OR ABOUT SEPTEMBER 15.

B-171260, APR 8, 1971

BID PROTEST - BUY IN BID DENIAL OF PROTEST AGAINST AWARD OF CONTRACT TO WATKINS-JOHNSON, LOW BIDDER, UNDER REQUEST FOR QUOTATIONS BY PROCUREMENT DIVISION, FORT HUACHUCA, ARIZONA. ALTHOUGH PROTESTANT CONTENDS THAT IN CONTRAVENTION OF GOVERNMENT POLICY, RELATIVE POSITIONS OF TWO OFFERORS BECAME KNOWN ALLOWING LOW BIDDER TO RE- BID BELOW COST IN ORDER TO BUY IN, NO EVIDENCE SUPPORTS THE ALLEGATIONS THAT GOVERNMENT PERSONNEL DIVULGED BID INFORMATION OR THAT GOVERNMENT USED THE AUCTION TECHNIQUE IN THIS PROCUREMENT. ORIGINAL BIDS WERE TECHNICALLY UNACCEPTABLE AND IN REQUESTING CLARIFICATION BOTH OFFERORS WERE WARNED BY CONTRACTING OFFICER THAT NECESSARY CHANGES MIGHT AFFECT QUOTED PRICE. SUCH PROCEDURES ARE CONSISTENT WITH THE POLICY THAT UP TO CLOSE OF NEGOTIATIONS OFFERORS BE ALLOWED TO CHANGE QUOTATIONS.

TO SANTA CRUZ ENGINEERING:

REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 11, 1970, WITH ENCLOSURES, PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANY OTHER OFFEROR UNDER REQUEST FOR QUOTATIONS (RFQ) NO. DAEA18-70-Q-0280, ISSUED ON AUGUST 14, 1970, BY THE PROCUREMENT DIVISION, FORT HUACHUCA, ARIZONA. YOU CONTEND THAT A SECOND PRICING ROUND WAS INITIATED AFTER RELATIVE POSITIONS BECAME KNOWN AMONG THE OFFERORS AND THAT A FIRM COULD NOT SUBMIT A PROPOSAL BECAUSE THE MANUFACTURER, WHO DID SUBMIT A PROPOSAL, REFUSED TO FURNISH THE FIRM A QUOTE ON AN ESSENTIAL COMPONENT.

TWO QUOTATIONS WERE RECEIVED, THE ONE FROM YOUR FIRM WAS LOW, THE OTHER WAS FROM WATKINS-JOHNSON. THE TWO TECHNICAL PROPOSALS WERE FURNISHED TO THE REQUIRING AGENCY FOR EVALUATION ON OR ABOUT SEPTEMBER 15, 1970. AFTER THE TECHNICAL EVALUATIONS OF THE PROPOSALS WERE RECEIVED BY THE CONTRACTING OFFICER, ON OR ABOUT OCTOBER 14, 1970, EACH OFFEROR WAS NOTIFIED THAT HIS PROPOSAL WAS TECHNICALLY UNACCEPTABLE IN CERTAIN AREAS. THE AREAS IN WHICH YOUR PROPOSAL WAS DEFICIENT WERE MADE KNOWN TO YOU BY LETTER OF OCTOBER 22, 1970, AND YOU WERE REQUESTED TO REVIEW YOUR TECHNICAL PROPOSAL SINCE TIME MIGHT NOT PERMIT FURTHER NEGOTIATIONS. CLARIFICATION AND REVISIONS WERE SUBMITTED BY BOTH FIRMS. YOUR FIRM DID NOT CHANGE ITS ORIGINAL PRICE WHILE THE WATKINS JOHNSON PRICE DROPPED TO $122,764, MAKING IT LOWER THAN YOURS.

ON NOVEMBER 12, 1970, YOUR FIRM'S PROTEST WAS RECEIVED BY THE CONTRACTING OFFICER AND THIS OFFICE. AWARD WAS MADE TO WATKINS-JOHNSON ON JANUARY 8, 1971.

AS TO CONDUCTING A SECOND PRICING ROUND, IT MUST BE EMPHASIZED THAT THE FIRST PROPOSALS WERE TECHNICALLY UNACCEPTABLE AND THAT THE CLARIFICATIONS REQUESTED BY THE CONTRACTING OFFICER CLEARLY INDICATE THAT THE UNACCEPTABLE AREAS MIGHT AFFECT THE QUOTED PRICE. WHERE THE GOVERNMENT BUYS BY NEGOTIATION THE RIGID AND FORMAL REQUIREMENTS APPLICABLE TO PROCUREMENT BY ADVERTISING NEED NOT BE OBSERVED. AN AWARD MAY BE MADE AS A RESULT OF COMPETITIVE NEGOTIATION WITHOUT HOLDING WRITTEN OR ORAL DISCUSSIONS BY INITIALLY ACCEPTING THE MOST FAVORABLE OFFER RECEIVED IF THE CONTRACTING OFFICER REGARDS IT TO BE REASONABLY PRICED. HOWEVER, THE CONTRACTING OFFICER MAY AWARD A CONTRACT TO THAT SUPPLIER WHOSE OFFER BECOMES MOST ADVANTAGEOUS AS A RESULT OF CONDUCTING NEGOTIATIONS. IT IS THE VERY ESSENCE OF NEGOTIATION THAT OFFERORS BE ALLOWED TO MAKE REVISIONS TO THEIR QUOTATIONS UP TO THE TIME NEGOTIATIONS ARE CLOSED.

YOUR ALLEGATION THAT THE TECHNICAL CLARIFICATIONS WERE REQUESTED AFTER THE RELATIVE PRICE POSITIONS HAD BECOME KNOWN TO THE OFFERORS APPARENTLY IS BASED PARTLY ON THE FACT THAT A PRE-AWARD SURVEY WAS CONDUCTED ON YOUR FIRM PRIOR TO THE ISSUANCE OF A REQUEST FOR TECHNICAL CLARIFICATIONS BY THE CONTRACTING OFFICER ON OCTOBER 22, 1970. YOU ALSO CONTEND THAT YOU WERE INFORMED BY CERTAIN PROCUREMENT PERSONNEL THAT YOU WERE "POSSIBLY THE LOW BIDDER" AND THAT THE PROJECT MANAGER OF BELL AEROSPACE COMPANY INDICATED DURING A TELEPHONE CONVERSATION WITH A MEMBER OF YOUR FIRM THAT HE HAD HEARD THAT SANTA CRUZ WAS THE LOW BIDDER.

IN REGARD TO THE ALLEGED STATEMENTS BY PROCUREMENT PERSONNEL, THE CONTRACTING OFFICER REPORTS THAT HE HAS NO EVIDENCE THAT THE PRICES QUOTED WERE DIVULGED BY PROCUREMENT PERSONNEL. NOR DOES HE HAVE ANY KNOWLEDGE OF ANY SUCH INFORMATION GOING TO BELL AEROSPACE COMPANY. IF YOUR QUOTATION POSITION WAS IN FACT DISCLOSED TO YOUR COMPETITORS, THE RECORD DOES NOT EVIDENCE THAT ANY SUCH DISCLOSURE WAS MADE BY GOVERNMENT PERSONNEL.

THE USE OF AUCTION TECHNIQUE IS PROSCRIBED BY ASPR 3-805.1(B). THE FACT THAT A PRE-AWARD SURVEY WAS CONDUCTED AT YOUR PLANT DURING NEGOTIATIONS MAY GIVE RISE TO AN INFERENCE CONCERNING WHICH OF TWO OFFERS IS LOW. HOWEVER, THE SITUATION DOES NOT PER SE CONSTITUTE THE USE OF AN AUCTION TECHNIQUE. 48 COMP. GEN. 323 (1968). WHILE WE HAVE ALWAYS OPPOSED THE USE OF AN AUCTION TECHNIQUE TO GIVE ONE OF THE COMPETING OFFERORS AN UNFAIR ADVANTAGE OVER THE OTHERS, THE FACTS ASSERTED ARE INSUFFICIENT TO ESTABLISH THAT SUCH UNFAIR ADVANTAGE RESULTED IN THIS CASE. YOU ALSO ALLEGE THAT BELL AEROSPACE COMPANY WAS RESTRAINED FROM COMPETING FOR THE INSTANT PROCUREMENT BY THE REFUSAL OF WATKINS-JOHNSON TO GIVE BELL A QUOTE ON A NECESSARY ITEM. WE HAVE BEEN INFORMED BY THE CONTRACTING OFFICER THAT WATKINS-JOHNSON DOES NOT POSSESS THE EXCLUSIVE CAPABILITY TO PRODUCE THE ITEM INVOLVED, BUT THAT YOUR FIRM CAN ALSO PRODUCE THE ITEM. APPEARS, THEREFORE, THAT BELL WAS NOT PRECLUDED FROM SUBMITTING AN OFFER BECAUSE IT WAS REFUSED A QUOTE ON THE REQUIRED COMPONENT BY WATKINS- JOHNSON.

UPON REVIEW OF THIS PROCUREMENT, WE MUST CONCLUDE THAT THE NEGOTIATIONS WERE CONDUCTED IN ACCORDANCE WITH LAW AND REGULATION AND THAT YOUR PROTEST MUST THEREFORE BE DENIED.