B-174141, JAN 20, 1972

B-174141, JAN 20, 1972

BID PROTEST - UNJUSTIFIED RESOLICITATION DECISION DENYING PROTEST BY RADIOTRONICS, INC., AGAINST AWARD OF A CONTRACT TO GENERAL DYNAMICS CORPORATION FOR TRANSLATOR SYNTHESIZERS UNDER AN RFP ISSUED BY THE NAVY ELECTRONICS SUPPLY OFFICE (ESO). PROTESTANT CONTENDS THAT ADDITIONAL CALLS FOR FINAL OFFERS WERE BASED ON INSIGNIFICANT CHANGES TO THE RFP, THAT ITS PRICE MIGHT HAVE BEEN DISCLOSED DURING NEGOTIATIONS, AND THAT GENERAL DYNAMICS' PRICES WERE NOT ADJUSTED TO COMPENSATE FOR ITS USE OF GOVERNMENT-OWNED PROPERTY. ESO SPECIFICALLY DENIES EACH OF THESE CONTENTIONS AND ADDITIONAL EVIDENCE WOULD INDICATE THAT THEY ARE WITHOUT MERIT. CONCERNING PROTESTANT'S FINAL ALLEGATION, PROCUREMENT REGULATIONS DO NOT REQUIRE EXPLANATIONS FOR PRICE MODIFICATIONS. IN VIEW OF THESE FACTS, THE PROTEST IS DENIED.

TO RADIOTRONICS, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 18, 1971, AND SUBSEQUENT CORRESPONDENCE CONCERNING YOUR PROTEST UNDER REQUEST FOR PROPOSAL (RFP) N00126-71-R-1XM213, ISSUED BY THE NAVY ELECTRONICS SUPPLY OFFICE (ESO), GREAT LAKES, ILLINOIS, ON APRIL 30, 1971, FOR AN ESTIMATED QUANTITY OF 1000 TRANSLATOR SYNTHESIZERS.

ESO REPORTS THAT FOUR OFFERORS, INCLUDING YOUR CONCERN AND THE GENERAL DYNAMICS CORPORATION, RESPONDED BY THE AMENDED CLOSING DATE ON MAY 24, 1971. YOU FURNISHED DESCRIPTIVE LITERATURE WITH YOUR PROPOSAL ACCORDING TO THE "REQUIREMENT FOR DESCRIPTIVE LITERATURE" CLAUSE OF THE RFP. SUBSEQUENTLY, ESO DECIDED TO EVALUATE THIS DATA IN CONNECTION WITH A PREAWARD SURVEY OF YOUR CONCERN MADE BY THE DEFENSE CONTRACT ADMINISTRATIVE SERVICES DISTRICT (DCASD), ROCHESTER, NEW YORK. DURING THIS EVALUATION EXTENSIVE DISCUSSIONS WERE HELD WITH YOUR CONCERN.

ESO STATES THAT THESE DISCUSSIONS DEMONSTRATED THE NEED TO CHANGE CERTAIN TECHNICAL REQUIREMENTS IN THE RFP. FURTHERMORE, ESO DECIDED THAT IT WAS REQUIRED TO ALLOW ALL OTHER OFFERORS WITHIN THE COMPETITIVE RANGE AN OPPORTUNITY TO SUBMIT REVISED PROPOSALS IN RESPONSE TO THESE CHANGES. ACCORDINGLY, ON JULY 15, 1971, ALL OFFERORS WERE ADVISED OF THE CHANGES AND REQUESTED TO FURNISH THEIR BEST PROPOSALS BASED ON THESE CHANGES, WHICH ESO HAS SUMMARIZED AS FOLLOWS:

"A.QUALITY ASSURANCE REQUIREMENTS WERE MADE APPLICABLE TO EACH OF THE SIX MAJOR COMPONENTS OF THE TRANSLATOR SYNTHESIZER AS WELL AS TO SUCH ITEM ITSELF.

B. THE FORMERLY REQUIRED GENERAL DYNAMICS PARTS LIST SUPPORTING THE END ITEM WAS CHANGED TO A RADIONICS PART LIST.

C. THE USE OF VENDOR PART NUMBERS ON THE RADIONICS PARTS LIST WAS PROHIBITED AND THE USE OF SOURCE CONTROL DRAWINGS WAS REQUIRED IN LIEU THEREOF.

D. THE BASIC GENERAL DYNAMICS DRAWING WAS CHANGED TO REVISION B. (THIS WAS CONSIDERED AN EXCEEDINGLY SUBSTANTIAL CHANGE.)

E. THE LATEST REVISION NUMBERS TO THE DRAWINGS FOR THE SIX MAIN COMPONENTS OF THE TRANSLATOR SYNTHESIZER WERE ADDED.

F. CERTAIN TEST SPECIFICATIONS AND DRAWINGS WERE REQUIRED TO BE SUBMITTED BY RADIONICS AS PART OF THE FIRST ARTICLE TEST REPORT.

G. THE SPECIFIC LIST OF TEST FIXTURES, INTENDED FOR USE BY RADIONICS TO ACCOMPLISH REQUIRED QUALITY ASSURANCE TESTING, WAS REQUIRED TO BE SUBMITTED TO THE GOVERNMENT AT THE TIME OF FIRST ARTICLE SUBMISSION.

H. THE FIRST ARTICLE REQUIREMENT WAS CHANGED FROM ONE UNIT TO FOUR UNITS.

I. THE DELIVERY ORDER LIMITATION SET FORTH ON PAGE 13 OF THE RFP WAS CHANGED.

J. THE NUMBER OF UNITS REQUIRED TO BE ORDERED BY THE GOVERNMENT UNDER THE INITIAL DELIVERY ORDER PLACED UNDER THE INDEFINITE QUANTITY CONTRACT WAS SPECIFIED AS 500 UNITS. (THIS CERTAINLY HAD TO AFFECT PRICING TO SOME DEGREE.)"

ALL OFFERORS TIMELY RESPONDED TO THE CLOSING DATE SET FOR RECEIPT OF REVISED PROPOSALS ON AUGUST 2, 1971. AFTER ESO ANALYZED THE PROPOSALS IT DECIDED THAT THE RFP SHOULD REQUIRE FIRST ARTICLE TESTING FROM ALL OFFERORS INSTEAD OF PERMITTING WAIVER OF TESTING WHERE FIRMS HAD PREVIOUSLY FURNISHED SIMILAR ARTICLES, AND THAT ALL OFFERORS BE INFORMED THAT REVISION B OF GENERAL DYNAMICS DRAWING A70733-001 WOULD APPLY. ADDITIONALLY, ESO DECIDED TO STIPULATE PAYMENT AND LIQUIDATION RATES FOR PROGRESS PAYMENTS, SINCE GENERAL DYNAMICS HAD REQUESTED THIS INFORMATION. ACCORDINGLY, ESO SENT TELEGRAMS TO ALL OFFERORS ON AUGUST 11, 1971, SETTING FORTH THIS INFORMATION AND REQUESTING RESPONSES BY AUGUST 20, 1971.

SINCE GENERAL DYNAMICS' OFFER FOR THE REQUIREMENT WAS LOW IN PRICE AND TECHNICALLY ACCEPTABLE, AN AWARD WAS MADE TO THE COMPANY ON SEPTEMBER 14, 1971.

YOU ASSERT THAT ESO IMPROPERLY CALLED FOR BEST AND FINAL OFFERS ON JULY 15 AND AUGUST 11, 1971, BASED ON INSIGNIFICANT CHANGES TO THE RFP; THAT YOUR PRICE MAY HAVE BEEN DISCLOSED DURING THIS PERIOD; AND THAT THE PRICE REDUCTIONS FOR THE REQUIREMENT SUBMITTED BY GENERAL DYNAMICS DURING NEGOTIATIONS MAY HAVE RESULTED FROM A POSSIBLE DECISION BY THAT FIRM TO USE GOVERNMENT-OWNED MATERIAL.

IT IS APPARENT THAT THE PROCURING ACTIVITY IS OF THE OPINION THAT THE DATA, NOTED ABOVE, SET FORTH IN THE LETTERS OF JULY 15 AND THE TELEGRAMS OF AUGUST 11, 1971, TO ALL OFFERORS CONSTITUTED SUBSTANTIAL CHANGES IN THE REQUIREMENTS OF THE RFP, AND THAT THE GOVERNMENT WAS REQUIRED TO REQUEST ALL OFFERORS TO CONSIDER THE IMPACT OF THESE CHANGES ON THEIR PRICES AND DELIVERY TERMS.

IN THIS REGARD WE BELIEVE IT IS SIGNIFICANT TO NOTE THAT BOTH THE JULY 15 LETTERS AND THE AUGUST 11 TELEGRAMS TO ALL OFFERORS SPECIFIED MATERIAL REVISIONS IN THE PROVISIONS OF THE RFP. ACCORDINGLY, WE PERCEIVE NO BASIS FOR QUESTIONING ESO'S DETERMINATION TO ISSUE THE MESSAGES IN QUESTION.

WITH RESPECT TO YOUR ALLEGATION THAT YOUR PRICE MAY HAVE BEEN DISCLOSED DURING THE PERIOD OF NEGOTIATIONS, ESO STATES THAT IT DID NOT FURNISH ANY PRICE INFORMATION TO ANY UNAUTHORIZED PERSONS DURING NEGOTIATIONS. FURTHERMORE, IT MAINTAINS THAT THE TIME FOR NEGOTIATIONS HERE WAS NOT UNREASONABLY LONG, AS YOU CONTEND, IN VIEW OF THE EXTENSIVE DISCUSSIONS CONDUCTED WITH YOUR CONCERN AND THE COMPLICATED AND SUBSTANTIAL CHANGES WHICH HAD TO BE SUBSEQUENTLY INCORPORATED INTO THE SOLICITATION. CANNOT DISPUTE ESO'S POSITION ON THESE MATTERS BASED ON THE PRESENT RECORD.

WITH RESPECT TO YOUR CONTENTION THAT GENERAL DYNAMICS' PRICES ARE NOT ADJUSTED FOR THE CONCERN'S USE OF GOVERNMENT-OWNED PROPERTY, ESO HAS SENT US A REPORT, A COPY OF WHICH HAS BEEN FURNISHED TO YOU, MADE BY THE DCASD OFFICES IN ROCHESTER, NEW YORK, AND ORLANDO, FLORIDA. THE INVESTIGATION REVEALED THAT THE GOVERNMENT HAD TRANSFERRED TITLE OF SPECIAL TOOLING AND TEST EQUIPMENT TO GENERAL DYNAMICS, ROCHESTER, NEW YORK, UNDER MODIFICATION NO. 5 TO CONTRACT NO. N0BSR-93015, BUT THAT THERE WAS NO INDICATION THAT GENERAL DYNAMICS POSSESSED OR INTENDED TO USE GOVERNMENT- OWNED TOOLING OR MATERIALS IN THE PERFORMANCE OF THE SUBJECT CONTRACT. SEE NO BASIS IN THE RECORD TO DISAGREE WITH THIS JUDGMENT.

FINALLY, YOU ASSERT THAT THE REVISIONS TO THE RFP DID NOT JUSTIFY THE SUBSTANTIAL PRICE REDUCTIONS OFFERED BY GENERAL DYNAMICS. IN THIS REGARD, THE PROCUREMENT REGULATIONS DO NOT REQUIRE AN OFFEROR TO FURNISH AN EXPLANATION FOR ANY PRICE MODIFICATION PROPOSED DURING THE COURSE OF NEGOTIATIONS, AND IT IS NOT UNCOMMON FOR OFFERORS TO OFFER SUBSTANTIAL PRICE REDUCTIONS IN THE FINAL STAGES OF NEGOTIATIONS, EVEN WITHOUT CHANGES IN THE GOVERNMENT'S REQUIREMENTS.

FOR THE REASONS SET FORTH ABOVE, YOUR PROTEST MUST BE DENIED.