B-173534, JUN 22, 1972

B-173534, JUN 22, 1972

BID PROTEST - ALLEGED IMPROPER PROCUREMENT DECISION DENYING THE PROTEST OF STELMA, INC; AGAINST THE PROPOSED AWARD OF A CONTRACT TO SINGER TELE-SIGNAL CORPORATION UNDER AN RFP ISSUED BY THE OKLAHOMA CITY AIR MATERIEL AREA. PROTESTANT'S CONTENTIONS CONCERNING THE SECURITY OF ITS PROPOSAL DOCUMENTS AND THE UNTIMELY SUBMISSION OF SINGER'S PUBLICATION PLAN IN NO WAY PREJUDICED STELMA'S POSITION. FURTHER, GAO CANNOT SUBSTITUTE ITS JUDGMENT FOR THAT OF AIR FORCE TECHNICAL PERSONNEL. ADMITTEDLY, THE SCOPE OF THE WORK IN CERTAIN AREAS WAS INDEFINITE AND THE ADMINISTRATIVE CHARACTERIZATION OF SUCH WORK AS MINOR SHOULD HAVE BEEN COMMUNICATED TO ALL OFFERORS PURSUANT TO ASPR 3-507.2(B) AND 3 805.1(E). HOWEVER, THE COMP. GEN. IS UNABLE TO CONCLUDE THAT THE RFP WAS LEGALLY DEFICIENT, SINCE IT CLEARLY PLACED THE RISK OF PERFORMING ALL WORK REQUIREMENTS AT THE FIRM-FIXED PRICE ON THE SUCCESSFUL CONTRACTOR. FOR THE FOREGOING REASONS, THE PROTEST IS DENIED.

TO COVINGTON & BURLING:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 1, 1972, AND PRIOR CORRESPONDENCE ON BEHALF OF STELMA, INCORPORATED (STELMA), PROTESTING AGAINST THE PENDING AWARD OF A CONTRACT TO SINGER/TELE-SIGNAL CORPORATION (SINGER) UNDER REQUEST FOR PROPOSALS (RFP) F34601-72-R 7668, ISSUED BY THE OKLAHOMA CITY AIR MATERIEL AREA (OCAMA), DEPARTMENT OF THE AIR FORCE.

STELMA, IN A VARIETY OF WAYS, MAINTAINS THAT THE PROCEDURES UTILIZED BY OCAMA IN THIS PROCUREMENT GAVE AN UNFAIR ADVANTAGE TO SINGER AND, CONSEQUENTLY, THAT FIRM SHOULD NOW BE ELIMINATED FROM COMPETITION. SPECIFICALLY, STELMA CONTENDS THAT THE FOLLOWING EVENTS REDOUNDED TO SINGER'S ADVANTAGE: (1) FAILURE OF OCAMA TO PROPERLY SAFEGUARD STELMA'S PROPOSAL DOCUMENTS; (2) GRANTING OF CERTAIN TECHNICAL SPECIFICATION DEVIATIONS TO SINGER WHILE REQUIRING STELMA TO STRICTLY CONFORM WITH THE SPECIFICATIONS; (3) APPROVING THE SINGER TECHNICAL PROPOSAL WHEN THAT PROPOSAL WAS TOTALLY INSUFFICIENT; (4) ALLOWING SINGER TO PROPOSE MULTIFUNCTIONAL MODULES CONTRARY TO SPECIFICATION REQUIREMENTS; AND (5) ALLOWING SINGER TO SUBMIT A LATE PUBLICATIONS PLAN AND THEREAFTER FINDING SAME ACCEPTABLE WHEN IT WAS NOT. WITH REGARD TO ALL THESE CONTENTIONS, STELMA'S PROTEST IS DENIED.

ALTHOUGH SECURITY MAY HAVE BEEN BREACHED TO THE EXTENT THAT REPRESENTATIVES OF SINGER (AND PHILCO-FORD, THE REMAINING OFFEROR) MAY HAVE OBSERVED THAT STELMA HAD SUBMITTED REVISIONS TO ITS PROPOSAL, THERE IS NO SHOWING THAT THESE REPRESENTATIVES GAINED ACCESS TO THE STELMA REVISIONS OR KNOWLEDGE OF THEIR CONTENTS. WITHOUT SOMETHING MORE THAN WHAT HAS BEEN PRESENTED, THERE IS NO JUSTIFICATION FOR CONCLUDING THAT THE COMPETITIVE POSITION OF STELMA HAS BEEN PREJUDICED.

WE HAVE CAREFULLY REVIEWED THE ENTIRE RECORD INCLUDING THE INFORMATION SUPPLIED BY YOU AS COUNSEL FOR STELMA REGARDING YOUR CONTENTIONS 2, 3, AND 4 ABOVE. WE WILL NOT ATTEMPT TO SUBSTITUTE OUR JUDGMENT FOR THAT OF THE AIR FORCE REGARDING THE TECHNICAL ASPECTS OF THIS PROCUREMENT.

WITH RESPECT TO THE CONTENTION THAT SINGER FAILED TO SUBMIT A TIMELY PUBLICATIONS PLAN UNDER THE RFP, AMENDMENT 0001 THERETO STATES:

"EACH OFFEROR SHALL SUBMIT AN UP TO DATE PUBLICATIONS PLAN IN A SEALED PACKAGE SEPARATE FROM ANY REVISED TECHNICAL PROPOSAL AND THE TWO PRICED PROPOSAL SETS."

IN VIEW OF THE "SPECIAL PACKAGE" REQUIREMENT, A FAIR READING OF THIS PROVISION IS THAT THE AIR FORCE VIEWED THE PUBLICATIONS PLAN AS AN ENTITY ENTIRELY APART FROM TECHNICAL AND PRICE PROPOSALS BUT NEVERTHELESS ANTICIPATED THAT IT WOULD BE SUBMITTED CONCURRENTLY WITH ANY TECHNICAL AND PRICE PROPOSALS. IN OUR VIEW, THE AMENDATORY LANGUAGE SUPPORTS THE AIR FORCE POSITION THAT THE SUBMISSION OF THE PUBLICATIONS PLAN WAS FOR INFORMATIONAL PURPOSES ONLY. CONSEQUENTLY, WE CANNOT VIEW THE FAILURE OF SINGER TO SUBMIT AN "UP TO DATE" PUBLICATIONS PLAN WITH ITS PRICE PROPOSAL TO BE SUCH A MATERIAL DEFECT AS TO REQUIRE THE ELIMINATION OF SINGER FROM COMPETITION. THIS RESULT IS EVEN MORE COMPELLING SINCE THE RECORD INDICATES THAT SINGER'S COMPLIANCE WITH THIS REQUIREMENT WOULD LIKELY HAVE PRODUCED NO DIFFERENT A PLAN THAN THAT ALREADY IN THE PROCUREMENT ACTIVITY'S POSSESSION. SINGER HAD, OF COURSE, SUBMITTED A REVISED PUBLICATIONS PLAN UNDER THE TWO-STEP PROCUREMENT WHICH PRECEDED THE INSTANT RFP. SINCE IT DID NOT REVISE ITS TECHNICAL PROPOSAL UNDER THE RFP, NOR WAS IT AWARE BY THE CLOSING DATE FOR RECEIPT OF PROPOSALS OF ANY GOVERNMENT OBJECTIONS TO THE PRIOR PUBLICATIONS PLAN, COMPLIANCE WITH THE RFP AMENDMENT WOULD PROBABLY HAVE BEEN NOTHING MORE THAN A RESUBMISSION OF ITS PREVIOUSLY SUBMITTED PUBLICATIONS PLAN.

ASIDE FROM THESE CONTENTIONS, A MORE SIGNIFICANT ARGUMENT IS ADVANCED TO THE EFFECT THAT THE RFP IS LEGALLY DEFICIENT IN THAT INADEQUATE INFORMATION IS PROVIDED AS TO CERTAIN AREAS OF WORK CALLED OUT IN THE RFP. IT IS POINTED OUT THAT THE STATEMENT OF WORK IN THE AREAS OF OUTSIDE PLANT CABLE, SITE DRAWINGS, AND THE REMOVAL AND RELOCATION OF EQUIPMENT FAILS TO DEFINE THE EXTENT OF WORK TO BE PERFORMED. THUS, IT IS ARGUED THAT A REASONABLE FIRM-FIXED-PRICE MAY NOT BE OFFERED BY CONTENDING FIRMS. THESE INADEQUACIES, IT IS URGED, PRECLUDE FULL AND EQUAL COMPETITION AMONG COMPETING OFFERORS AND RENDER SUSPECT THE COMPOSITION OF AN OFFERED FIRM-FIXED-PRICE WHICH COVERS THE QUESTIONED ITEMS OF WORK. THIS REGARD, IT IS MAINTAINED THAT IN THE EVENT THE WORK COVERED BY THESE AREAS IS NOT ULTIMATELY REQUIRED OR IS NOT REQUIRED TO THE FULL EXTENT ESTIMATED BY THE CONTRACTOR, THE GOVERNMENT WOULD HAVE NO BASIS UNDER THE CONTRACT FOR A DEDUCTIVE CHANGE ORDER.

WE MUST AGREE THAT THE SCOPE OF WORK RELATING TO THE THREE AREAS OF WORK IS INDEFINITE IN THAT THE AIR FORCE HAS NOT STATED AN ESTIMATE OF EXPECTED PERFORMANCE. HOWEVER, WE CANNOT CONCLUDE THAT INDEFINITENESS OF DESCRIPTION ALONE RENDERS THIS SOLICITATION LEGALLY INADEQUATE AS A BASIS FOR AWARD. WHILE IT IS ARGUED THAT THE DOLLAR IMPACT UPON THE FIRM-FIXED- PRICE OFFERED MAY BE SUBSTANTIAL, THE PROCUREMENT OFFICE CHARACTERIZES THE WORK THAT MAY BE REQUIRED IN THESE THREE AREAS AS MINOR. ALTHOUGH SUCH ADMINISTRATIVE CONCLUSION SHOULD HAVE BEEN COMMUNICATED TO ALL OFFERORS AS CONTEMPLATED BY ARMED SERVICES PROCUREMENT REGULATION 3-507.2(B) AND 3- 805.1(E), WE CANNOT SAY THAT OFFERORS WERE PREJUDICED BY LACK OF DEFINITIVE ADVICE OR THAT SUCH ADVICE WAS KNOWINGLY WITHHELD BY THE AIR FORCE.

THE AIR FORCE ADVISES, AND THE RFP ITSELF SERVES TO SUBSTANTIATE, THAT THIS PROCUREMENT PLACES THE MAXIMUM RISK UPON THE SUCCESSFUL OFFEROR WHEREBY IT WILL ASSUME FULL RESPONSIBILITY FOR ALL COSTS THAT MAY BE UNDER OR OVER THE FIRM-FIXED-PRICE NEGOTIATED UNDER THE TERMS OF THE RFP. THIS FEATURE OF THE PROCUREMENT IMPOSED NO IMPEDIMENT TO BIDDING BY SIX FIRMS UNDER THE TWO-STEP PROCEDURE EVEN THOUGH THESE SAME ILL-DEFINED AREAS OF WORK WERE, AS NOW, PART OF THE ADVERTISED REQUIREMENTS. NEITHER DO WE FIND THAT COMPETITION HAS BEEN IMPEDED THEREBY UNDER THE RFP.

YOU CITE THE FORMAL ADVERTISING STATUTE, AT 10 U.S.C. 2305, WHICH PROSCRIBES THE USE OF INADEQUATELY DESCRIBED WORK REQUIREMENTS. WE AGREE THAT WORK REQUIREMENTS IN CONNECTION WITH NEGOTIATED PROCUREMENTS SHOULD ALSO BE ADEQUATELY DESCRIBED. HOWEVER, IT MUST BE RECOGNIZED THAT NEGOTIATION PROCEDURES ARE DELIBERATELY DESIGNED TO BE FLEXIBLE AND AMENABLE TO SITUATIONS NOT LENDING THEMSELVES TO A COMPLETE DETAILING OF FULL SPECIFICATIONS. EVEN CONSIDERING THE INSTANT SITUATION UNDER THE LANGUAGE OF THE STRICT STATUTORY INJUNCTION FOR ADVERTISED PROCUREMENTS THERE IS DOUBT THAT THE AREAS OF ILL DEFINED WORK IN THIS CASE WOULD HAVE ANY SIGNIFICANT BEARING ON THE COMPETITIVE STANDING OF ANY OFFEROR. NOTED ABOVE, THE PROCUREMENT OFFICE CHARACTERIZES THE DOLLAR IMPACT OF THE "UNKNOWN REQUIREMENTS" AS MINOR. FURTHERMORE, THERE IS NO SHOWING BY STELMA OF THE AMOUNT ALLOCATED, IF ANY, TO THIS REQUIREMENT IN ITS PROPOSAL.

ON THE RECORD, ALL OFFERORS WERE AFFORDED THE SAME DETAILS OF WORK REQUIREMENTS WHICH THE AIR FORCE COULD FURNISH AND, PRESUMABLY, BY RESPONDING TO THE RFP, OFFERORS KNOWINGLY ASSUMED A CALCULATED BUSINESS TYPE RISK TO PERFORM ALL THE RFP REQUIREMENTS AT THEIR ACCEPTED FIRM FIXED -PRICES. WHETHER THE QUESTIONED AREAS OF WORK WERE CAPABLE OF ESTIMATION OR APPROXIMATION BY THE AIR FORCE IS UNIMPORTANT. IT WAS WITHIN THE AMBIT OF ADMINISTRATIVE DISCRETION TO OFFER TO COMPETITION A PROPOSED CONTRACT IMPOSING MAXIMUM RISKS UPON THE CONTRACTOR AND MINIMUM ADMINISTRATIVE BURDENS ON THE AIR FORCE. THE OBLIGATION OF THE SUCCESSFUL OFFEROR TO PERFORM THE QUESTIONED ITEMS OF WORK IS CLEAR.

WE, THEREFORE, CANNOT AGREE THAT THE RFP IS LEGALLY INSUFFICIENT IN THESE AREAS OF INDEFINITE REQUIREMENTS.