B-173597(1), DEC 1, 1971

B-173597(1): Dec 1, 1971

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WHERE IT APPEARS ALL OFFERORS WERE GIVEN AN EQUAL OPPORTUNITY TO COMPETE. CONTRACTS AWARDED PURSUANT TO AN ORAL SOLICITATION ARE VALID. THERE IS NO INDICATION THAT THE SECRETARY OF DEFENSE HAS PRECLUDED THE MILITARY DEPARTMENTS FROM USING GSA'S SERVICES IN PROCURING THE INSTANT ITEMS. CONTRACTING OFFICERS ARE NOT PRECLUDED FROM REOPENING NEGOTIATIONS WITH ALL OFFERORS WITHIN THE COMPETITIVE RANGE WHEN THE GOVERNMENT MAY REAP THE BENEFITS OF A SIGNIFICANT PRICE REDUCTION. THE PROTEST IS DENIED. TO SPECTRAL DYNAMICS CORP.: REFERENCE IS MADE TO YOUR LETTERS OF JULY 13. THE FOLLOWING FACTS ARE STATED IN THE ADMINISTRATIVE REPORT. A COPY OF WHICH WAS FURNISHED TO YOU: " *** ON MAY 28. OUR SAN FRANCISCO REGIONAL OFFICE RECEIVED A REQUISITION FROM THE MARE ISLAND NAVAL SHIPYARD FOR SIX ITEMS OF ELECTRONIC EQUIPMENT WHICH REQUISITION WAS LATER REVISED IN SEVERAL MATERIAL RESPECTS.

B-173597(1), DEC 1, 1971

BID PROTEST - ORAL SOLICITATION - LATE MODIFICATION TO BID DECISION DENYING PROTEST AGAINST AWARD OF A NEGOTIATED CONTRACT TO FEDERAL SCIENTIFIC CORPORATION UNDER AN ORAL SOLICITATION RFP ISSUED BY THE GENERAL SERVICES ADMINISTRATION FOR ANALYSIS TYPE EQUIPMENT TO BE USED BY THE MARE ISLAND NAVAL SHIPYARD, VALLEJO, CALIF. WHERE IT APPEARS ALL OFFERORS WERE GIVEN AN EQUAL OPPORTUNITY TO COMPETE, CONTRACTS AWARDED PURSUANT TO AN ORAL SOLICITATION ARE VALID. ALSO, THERE IS NO INDICATION THAT THE SECRETARY OF DEFENSE HAS PRECLUDED THE MILITARY DEPARTMENTS FROM USING GSA'S SERVICES IN PROCURING THE INSTANT ITEMS. FINALLY, ALTHOUGH THE CLOSING DATE FOR NEGOTIATIONS HAD PASSED, CONTRACTING OFFICERS ARE NOT PRECLUDED FROM REOPENING NEGOTIATIONS WITH ALL OFFERORS WITHIN THE COMPETITIVE RANGE WHEN THE GOVERNMENT MAY REAP THE BENEFITS OF A SIGNIFICANT PRICE REDUCTION. SEE 47 COMP. GEN. 279 (1967). ACCORDINGLY, THE PROTEST IS DENIED.

TO SPECTRAL DYNAMICS CORP.:

REFERENCE IS MADE TO YOUR LETTERS OF JULY 13, 1971, AND SEPTEMBER 15, 1971, PROTESTING AGAINST THE AWARD OF A CONTRACT TO FEDERAL SCIENTIFIC CORPORATION UNDER AN ORAL SOLICITATION, REQUEST FOR PROPOSALS (RFP) 9PN MIPR-B00012-71/C4NEC, ISSUED ON JUNE 3, 1971, BY THE PROCUREMENT DIVISIONS, GENERAL SERVICES ADMINISTRATION (GSA), SAN FRANCISCO, CALIFORNIA, FOR A DEFINITE QUANTITY REQUIREMENT FOR ANALYSIS TYPE EQUIPMENT TO BE USED BY THE MARE ISLAND NAVAL SHIPYARD, VALLEJO, CALIFORNIA.

THE FOLLOWING FACTS ARE STATED IN THE ADMINISTRATIVE REPORT, A COPY OF WHICH WAS FURNISHED TO YOU:

" *** ON MAY 28, 1971, OUR SAN FRANCISCO REGIONAL OFFICE RECEIVED A REQUISITION FROM THE MARE ISLAND NAVAL SHIPYARD FOR SIX ITEMS OF ELECTRONIC EQUIPMENT WHICH REQUISITION WAS LATER REVISED IN SEVERAL MATERIAL RESPECTS. THE REVISED REQUISITION DATED JUNE 1, 1971, CARRIED A PRIORITY 04 (PUBLIC EXIGENCY) RATING AND SPECIFIED CERTAIN MODELS OF SPECTRAL AND FEDERAL EQUIPMENT. ***

"BECAUSE OF THE URGENT NATURE OF THE REQUIREMENT AND THE FACT THAT THE APPROPRIATION ALLOTMENT AVAILABLE FOR OBLIGATION WOULD EXPIRE ON JUNE 30, 1971, IF NO CONTRACT HAD BEEN AWARDED BY THAT TIME, OUR REGIONAL OFFICE INITIATED TELEPHONIC NEGOTIATIONS WITH SPECTRAL, FEDERAL, AND THREE OTHER FIRMS ON JUNE 3, 1971. THE PROCUREMENT WAS UNDERTAKEN ON A 'BRAND NAME OR EQUAL' BASIS. ALL PROSPECTIVE OFFERORS WERE ADVISED THAT THE CLOSING DATE FOR THE SUBMISSION OF OFFERS WAS NOON ON JUNE 6, 1971. OF THE FIVE FIRMS SOLICITED, ONLY SPECTRAL AND FEDERAL SUBMITTED OFFERS *** .

"SPECTRAL'S OFFER, WHICH WAS MADE ON JUNE 4, 1971 *** , TOTALED $207,648. THE OFFER WHICH WAS ORALLY GIVEN THE BUYER ON JUNE 3, 1971, BY A REPRESENTATIVE OF FEDERAL AGGREGATED $248,200. HOWEVER, WHEN CONFIRMED IN WRITING BY LETTER DATED JUNE 7, 1971, FEDERAL'S OFFER TOTALED $199,000 *** . BECAUSE OF REQUIREMENTS FOR RECORD CHECKS (I.E., DETERMINATION OF EQUAL EMPLOYMENT OPPORTUNITY COMPLIANCE, FINANCIAL RESPONSIBILITY, ETC.), AWARD COULD NOT BE MADE IMMEDIATELY. PRIOR TO COMPLETION OF THESE ROUTINE CHECKS, AND BEFORE AWARD, FEDERAL ADVISED THE BUYER BY TELEPHONE THAT IT WAS LOWERING THE PRICE OF ITEM 2 AND, CONSEQUENTLY, ITS TOTAL OFFER TO $191,090. THAT REDUCED OFFER WAS CONFIRMED BY MAIL GRAM DATED JUNE 16, 1971. ***

"THE DAY AFTER FEDERAL'S MAIL GRAM WAS RECEIVED, THE BUYER NOTIFIED SPECTRAL BY TELEPHONE THAT THE PERIOD FOR NEGOTIATION HAD BEEN REOPENED AND OFFERS WOULD BE RECEIVED UNTIL 4:15 P.M. ON JUNE 24, 1971. BY LETTER DATED JUNE 24, 1971, FEDERAL SUBMITTED ITS 'BEST AND FINAL' OFFER OF $191,090 *** . SPECTRAL DID NOT SUBMIT A REVISED OFFER. ACCORDINGLY, AWARD WAS MADE TO FEDERAL ON JUNE 29, 1971. *** "

GSA'S SUPPLEMENTAL REPORT DATED OCTOBER 21, 1971, STATES THAT NAVY'S PURCHASE REQUEST WAS READ TO ALL OF THE FIRMS SOLICITED AT THE TIME OF THE INITIAL ORAL SOLICITATION AND THE PURCHASE REQUEST STATED AS FOLLOWS IN PERTINENT PART:

ITEM NO. DESCRIPTION QUANTITY UNIT

"1. *** 10 EA

ANALYZER, REAL TIME, MODEL

SD-301C SPECTRAL DYNAMICS,

MODEL UA-15 FEDERAL SCIENTIFIC

2. ***10 EA

AVERAGER, SPECTRUM, MODEL SD-302C

SPECTRAL DYNAMICS WITH SD-42 MEMORY,

MODEL 1015M FEDERAL SCIENTIFIC

THE SUPPLEMENTAL REPORT FURTHER STATES THAT PROSPECTIVE OFFERORS WERE ADVISED TO QUOTE ON THE ABOVE ITEMS OR THEIR APPROVED EQUALS.

THE NEGOTIATING AUTHORITY FOR THIS PROCUREMENT WAS 41 U.S.C. 252(C)(2), THE PUBLIC EXIGENCY EXCEPTION TO THE ADVERTISING REQUIREMENTS. ORAL SOLICITATIONS ARE PERMITTED BY THE REGULATIONS IN LIMITED TYPES OF SITUATIONS. SEE FEDERAL PROCUREMENT REGULATIONS (FPR) 1-3.202(B)(2); FPR 1-3.802(C). ALTHOUGH WE DO NOT BELIEVE THAT AN ORAL SOLICITATION SHOULD BE PERMITTED SOLELY BECAUSE A PROCUREMENT IS CONDUCTED UNDER THE PUBLIC EXIGENCY EXCEPTION, AND MORE IS SAID ON THIS POINT IN THE ENCLOSED COPY OF THE LETTER TO GSA, IT DOES NOT FOLLOW THAT A CONTRACT AWARDED PURSUANT TO AN ORAL SOLICITATION IS INVALID IN THE ABSENCE OF EVIDENCE THAT OFFERORS WERE NOT GIVEN AN EQUAL OPPORTUNITY TO COMPETE OR THE AWARD WAS OTHERWISE NOT IN THE BEST INTEREST OF THE GOVERNMENT. 45 COMP. GEN. 374 (1966).

YOU HAVE RAISED A NUMBER OF CONTENTIONS REGARDING THE NEGOTIATION PROCEDURES USED IN THIS CASE.

FIRST, YOU CONTEND THAT THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949 AND THE IMPLEMENTING REGULATIONS IN FPR ARE NOT APPLICABLE TO THIS PROCUREMENT SINCE THE PROCUREMENT IS FOR MILITARY DEPARTMENT; IT IS IN EXCESS OF $50,000, THE MAXIMUM ORDER LIMITATION, AND THIS TYPE OF EQUIPMENT DOES NOT FALL WITHIN ANY DEPARTMENT OF DEFENSE (DOD)-GSA INTERAGENCY PURCHASE AGREEMENT.

WE HAVE REVIEWED THE AUTHORITIES CITED BY YOU WITH RESPECT TO THIS CONTENTION AND THERE IS NOTHING THEREIN WHICH WOULD PROHIBIT NAVY FROM USING GSA'S PROCURING SERVICES AS AUTHORIZED IN THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT. WHILE THE SECRETARY OF DEFENSE HAS AUTHORITY TO EXEMPT THE MILITARY ESTABLISHMENT FROM THE REQUIREMENTS OF 40 U.S.C. 481(A), WHICH GIVEN PURCHASING AUTHORITY TO GSA, THERE IS NO INDICATION THAT THE SECRETARY HAS PRECLUDED THE MILITARY DEPARTMENT FROM UTILIZING GSA'S SERVICES IN PROCURING THE ITEMS IN QUESTION. EVEN IF THE ITEMS IN THIS PROCUREMENT ARE NOT COVERED BY A DOD (DEPARTMENT OF DEFENSE)-GSA INTERAGENCY PURCHASE AGREEMENT, WE DO NOT FIND THAT THE NAVY IS PRECLUDED FROM USING GSA'S PROCUREMENT SERVICES. MOREOVER, THERE IS ADDITIONAL AUTHORITY FOR DOD USING GSA'S SERVICES IN 31 U.S.C. 686(A) AS IMPLEMENTED BY ASPR 5-701(B) WHICH AUTHORIZES THE NAVY AMONG OTHERS TO USE ANOTHER FEDERAL AGENCY "TO SUPPLY, OR TO RENDER, OR TO OBTAIN BY CONTRACT" SUPPLIES, SERVICES, WORK OR EQUIPMENT WHERE THIS IS DETERMINED TO BE IN THE GOVERNMENT'S INTEREST.

SECONDLY, YOU DENY YOU WERE ADVISED THAT THIS WAS A "BRAND NAME OR EQUAL" SOLICITATION. YOU URGE THAT EVEN IF IT WERE, THE SOLICITATION WAS STILL DEFECTIVE SINCE IT DID NOT LIST THE SALIENT CHARACTERISTICS.

ON THIS POINT WE HAVE NO REASON TO DOUBT THE STATEMENT IN GSA'S SUPPLEMENTAL REPORT THAT THE CONTRACTING OFFICER GAVE YOU THE INFORMATION IN NAVY'S PURCHASE REQUEST QUOTED ABOVE. WE HAVE BEEN ADVISED THAT BOTH YOUR ITEM AND FEDERAL SCIENTIFIC'S ITEM ARE LISTED ON THE FEDERAL SUPPLY SCHEDULE. SINCE THE BRAND NAME ITEMS WERE YOUR PRODUCTS, WE FAIL TO SEE HOW THE ABSENCE OF A FORMAL LISTING OF THE SALIENT CHARACTERISTICS COULD HAVE ADVERSELY AFFECTED YOUR COMPETITIVE POSITION IN ANY MATERIAL MANNER. WE ALSO INVITE YOUR ATTENTION TO FPR 1-1.307-8(B) WHICH PROVIDES FOR SUSPENSION OF THE "BRAND NAME OR EQUAL" CLAUSE REQUIRED BY FPR 1-1.307- 6(A)(2) IN PUBLIC EXIGENCY TYPE OF PROCUREMENTS.

THIRD, YOU URGE THAT FEDERAL SCIENTIFIC'S REVISED PRICE SUBMITTED AFTER THE SCHEDULED CLOSE OF NEGOTIATIONS WAS CONTRARY TO OUR DECISION B-171663, APRIL 19, 1971. THE RULE WITH RESPECT TO REOPENING OF NEGOTIATIONS IS STATED IN OUR DECISION B-168671, MARCH 2, 1970, AS FOLLOWS:

"OUR OFFICE HAS HELD THAT IN THE FACE OF A SIGNIFICANT PRICE REDUCTION, TENDERED BY A COMPETITIVELY SITUATED OFFEROR, NEGOTIATIONS MAY BE REOPENED, EVEN THOUGH THE CLOSING DATE FOR NEGOTIATIONS HAS PASSED. 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 ASPR 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 TO BE HIGHLY ADVANTAGEOUS TO THE GOVERNMENT.' SEE, ALSO, B-168085, DECEMBER 29, 1969. *** "

IN B-171663, SUPRA, IT WAS STATED THAT THE TIME FOR EXPLORING THE COST ASPECTS OF A PROPOSAL IS DURING THE COURSE OF NEGOTIATIONS AND NOT AT SOME TIME AFTER THE RECEIPT OF BEST AND FINAL OFFERS. HOWEVER, OUR DECISION WAS NOT INTENDED TO PRECLUDE A CONTRACTING OFFICER FROM REOPENING NEGOTIATIONS WITH ALL OFFERORS WITHIN THE COMPETITIVE RANGE IF HE DEEMS IT IN THE GOVERNMENT'S INTEREST TO DO SO. THE FACTS IN THIS CASE INDICATE THAT NEGOTIATIONS WERE REOPENED WITH ALL OF THE OFFERORS AFTER THE PROCURING ACTIVITY RECEIVED FEDERAL SCIENTIFIC'S SIGNIFICANT PRICE REDUCTION ON JUNE 16, 1971.

YOUR NEXT CONTENTION IS THAT THE REOPENING OF NEGOTIATIONS AND THE CONSEQUENT DELAY IS INCONSISTENT WITH THE PROCURING ACTIVITY'S RELIANCE ON URGENCY AS THE BASIS FOR JUSTIFYING THE PROCEDURES USED IN THIS CASE. WHILE THE REOPENING OF NEGOTIATIONS UNDOUBTEDLY DELAYED THE AWARD, THERE DOES NOT SEEM TO HAVE BEEN AN ABUSE OF DISCRETION BY NAVY IN ASSIGNING THIS PROCUREMENT A PRIORITY DESIGNATION WHICH CONSTITUTED A JUSTIFIABLE BASIS FOR GSA TO INVOKE THE PUBLIC EXIGENCY PROCEDURES. THE PROCUREMENT ACTION WAS COMPLETED WITHIN A RELATIVELY SHORT TIME.

FINALLY, YOU URGE THAT FEDERAL SCIENTIFIC RECEIVED PREFERENTIAL TREATMENT SINCE FEDERAL SCIENTIFIC HAD MORE CONTACTS DURING THIS PROCUREMENT WITH THE PROCURING OFFICIALS THAN DID YOUR CONCERN. THE REASON FOR THIS APPARENTLY WAS THAT FEDERAL SCIENTIFIC HAD INDICATED ITS INTENTION TO REVISE ITS PROPOSAL WHILE YOU DECIDED NOT TO SUBMIT ANY REVISIONS TO YOUR INITIAL OFFER. THE FACT THAT THE PROCURING ACTIVITY HAD MORE CONTACTS WITH FEDERAL SCIENTIFIC THAN IT DID WITH YOUR CONCERN DOES NOT BY ITSELF ESTABLISH PREFERENTIAL TREATMENT. SEE B-171482, MARCH 17, 1971.

IN THE CIRCUMSTANCES, WE FIND NO BASIS FOR INVALIDATING THE AWARD TO FEDERAL SCIENTIFIC.