B-174947(1), AUG 30, 1972

B-174947(1): Aug 30, 1972

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WHILE AN ERROR OF LARGE MAGNITUDE WAS UNDOUBTEDLY MADE IN THE EVALUATION WHICH WAS INITIALLY PREJUDICIAL TO PROTESTANT. THINKS THE ARMY'S EXPLANATION IS REASONABLE UNDER THE CIRCUMSTANCES AND FINDS NO BASIS FOR CONCLUDING THAT THE ERROR WAS NOT MADE IN GOOD FAITH. IT IS FELT THAT HE WAS ACTING WITHIN THE BOUNDS OF THAT DISCRETION IN DECIDING THAT NEGOTIATION WAS REQUIRED TO INSURE THAT PROTESTANT UNDERSTOOD THE RFP REQUIREMENTS. ONCE THE DECISION TO NEGOTIATE WAS MADE. ALL ASPECTS OF THE PROPOSAL WERE SUBJECT TO DISCUSSION AND REVISION UNTIL THE CLOSING OF NEGOTIATIONS. GAO CANNOT FIND FROM THIS RECORD THE EXISTENCE OF ANY SPECIFIC INCIDENT WHERE AN OFFEROR WAS INFORMED THAT A GIVEN PRICE HAD TO BE MET OR HOW HIS PRICE STOOD IN RELATION TO OTHERS.

B-174947(1), AUG 30, 1972

BID PROTEST - EVALUATION ERROR - NEGOTIATIONS - PRICE DISCLOSURE - AUCTION TECHNIQUE DENIAL OF PROTEST BY JOHN BRANSBY PRODUCTIONS LTD. AGAINST AWARD OF A CONTRACT UNDER A SMALL BUSINESS SET-ASIDE RFP ISSUED BY THE U.S. ARMY MISSILE COMMAND, REDSTONE ARSENAL, ALA., FOR MOTION PICTURE AND TELEVISION SCRIPTS AND PRODUCTIONS. WHILE AN ERROR OF LARGE MAGNITUDE WAS UNDOUBTEDLY MADE IN THE EVALUATION WHICH WAS INITIALLY PREJUDICIAL TO PROTESTANT, THE COMP. GEN. THINKS THE ARMY'S EXPLANATION IS REASONABLE UNDER THE CIRCUMSTANCES AND FINDS NO BASIS FOR CONCLUDING THAT THE ERROR WAS NOT MADE IN GOOD FAITH. ALSO, IN VIEW OF THE WIDE DISCRETION VESTED IN THE CONTRACTING OFFICER TO DETERMINE THE NATURE AND SCOPE OF NEGOTIATIONS, 50 COMP. GEN. 246 (1970), IT IS FELT THAT HE WAS ACTING WITHIN THE BOUNDS OF THAT DISCRETION IN DECIDING THAT NEGOTIATION WAS REQUIRED TO INSURE THAT PROTESTANT UNDERSTOOD THE RFP REQUIREMENTS. ONCE THE DECISION TO NEGOTIATE WAS MADE, ALL ASPECTS OF THE PROPOSAL WERE SUBJECT TO DISCUSSION AND REVISION UNTIL THE CLOSING OF NEGOTIATIONS. IN THE ABSENCE OF ANY CONCRETE EVIDENCE TO SUPPORT THE ASSERTION OF A PRICE LEAKAGE, GAO CANNOT FIND FROM THIS RECORD THE EXISTENCE OF ANY SPECIFIC INCIDENT WHERE AN OFFEROR WAS INFORMED THAT A GIVEN PRICE HAD TO BE MET OR HOW HIS PRICE STOOD IN RELATION TO OTHERS, AND, THEREFORE, MUST CONCLUDE THAT THIS PROCUREMENT WAS NOT CONDUCTED IN A MANNER VIOLATIVE OF THE AUCTION TECHNIQUE PROHIBITION OF ASPR 3-805.1(B). ACCORDINGLY, THE PROTEST MUST BE DENIED.

TO JOHN BRANSBY PRODUCTIONS, LIMITED:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 28, 1972, AND PRIOR CORRESPONDENCE, PROTESTING AGAINST AWARD OF A CONTRACT UNDER REQUEST FOR PROPOSALS (RFP) NO. DAAH01-72-R-0299, ISSUED BY THE UNITED STATES ARMY MISSILE COMMAND, REDSTONE ARSENAL, ALABAMA.

THE SOLICITATION, A SMALL BUSINESS SET-ASIDE, WAS FOR A BASIC ORDERING AGREEMENT FOR MOTION PICTURE AND TV SCRIPTS AND PRODUCTIONS. AFTER TECHNICAL AND PRICE EVALUATIONS WERE MADE, THE CONTRACTING OFFICER DECIDED TO MAKE AWARD TO THE APPARENT LOW ACCEPTABLE OFFEROR, H. G. PETERS & COMPANY, INCORPORATED, WITHOUT CONDUCTING NEGOTIATIONS, AND NOTIFIED ALL OFFERORS OF HIS INTENTION TO DO SO. YOU THEN QUESTIONED THE PRICE EVALUATION OF YOUR PROPOSAL, AND IT WAS DISCOVERED THAT A SIGNIFICANT ERROR HAD BEEN MADE AND THAT YOU WERE THE ACTUAL LOW ACCEPTABLE OFFEROR. THE CONTRACTING OFFICER THEN CANCELLED THE NOTIFICATION OF INTENT TO AWARD AND CONDUCTED NEGOTIATIONS WITH THE VARIOUS PROPOSERS. DURING THE NEGOTIATIONS PRICE REVISIONS WERE MADE BY SEVERAL OFFERORS, INCLUDING YOU AND H. G. PETERS & COMPANY, INCORPORATED. AT THE CLOSE OF NEGOTIATIONS, IT WAS FOUND THAT THE LOWEST REVISED PRICE WAS SUBMITTED BY H. G. PETERS & COMPANY, INCORPORATED (PETERS), AND AWARD WAS MADE TO THAT FIRM ON JANUARY 11, 1972.

YOU CLAIM THAT YOU WERE SUBJECTED TO UNFAIR COMPETITION IN THE AWARDING OF THIS CONTRACT, AND THAT THE AWARD TO PETERS RESULTED FROM PROCEDURAL IRREGULARITIES WHICH WERE PREJUDICIAL TO YOU AND FAVORABLE TO PETERS. SPECIFICALLY, YOU QUESTION HOW AN ERROR IN EXCESS OF $300,000 WAS MADE IN THE EVALUATION OF YOUR PROPOSAL AND FURTHER QUESTION THE CONTRACTING OFFICER'S DECISION TO CONDUCT NEGOTIATIONS INSTEAD OF MAKING IMMEDIATE AWARD TO YOU UPON CORRECTION OF THE ERROR. YOU ALSO ALLEGE THAT REDSTONE ARSENAL OFFICIALS IMPROPERLY PROMPTED YOU TO REVISE SOME OF YOUR PRICES UPWARD BY QUESTIONING YOUR UNDERSTANDING OF THE SCRIPT WRITING REQUIREMENTS OF THE RFP, DESPITE YOUR RECENT EXPERIENCE IN THIS AREA. ADDITION, YOU ALLEGE THAT REDSTONE OFFICIALS LEAKED INFORMATION PERTAINING TO YOUR PRICE PROPOSAL TO PERSONS WHO WERE NOT ENTITLED TO THAT INFORMATION. YOU POINT OUT THAT ON THE BASIS OF THE ORIGINAL PRICE PROPOSALS, YOU WERE THE LOW OFFEROR BY MORE THAN $50,000, BUT THAT DURING THE NEGOTIATIONS WHICH FOLLOWED PETERS LOWERED ITS PROPOSAL BY MORE THAN $75,000 AND ITS FINAL EVALUATED PROPOSAL WAS SLIGHTLY LOWER THAN YOURS. YOU CONCLUDE THAT THE CIRCUMSTANCES SUGGEST UNFAIR TREATMENT AND THE PROBABILITY OF DELIBERATELY PREJUDICIAL ACTION BY GOVERNMENT EMPLOYEES WHICH CAUSED YOU TO LOSE THE CONTRACT.

IN VIEW OF YOUR ALLEGATIONS, WE REQUESTED THE DEPARTMENT OF THE ARMY TO SUPPLEMENT ITS ADMINISTRATIVE REPORT ON THIS MATTER WITH A DETAILED EXPLANATION OF THE FACTS AND CIRCUMSTANCES WHICH LED TO THE AWARD TO PETERS. THE ARMY, DENYING THAT ANY IMPROPER ACTS OCCURRED OR THAT FAVORITISM WAS SHOWN TO ANY OFFEROR, HAS SUBMITTED TO US THE REQUESTED ADDITIONAL INFORMATION TO SUPPORT ITS POSITION.

THE ARMY HAS BEEN UNABLE TO DEFINITELY DETERMINE HOW THE ORIGINAL ERROR WAS MADE IN EVALUATING YOUR PRICE PROPOSAL, BUT STRONGLY DENIES THAT THE ERROR WAS DELIBERATE. IN THE SUPPLEMENTAL REPORT, THE CONTRACTING OFFICER STATES THE FOLLOWING:

"C. CONCERNING BRANSBY'S QUESTIONING WHETHER THE ERROR MADE IN EVALUATING ITS PROPOSAL PRICE WAS MADE IN GOOD FAITH, THE CONTRACTING OFFICE HAS DILIGENTLY TRIED TO ASCERTAIN EXACTLY HOW AN ERROR OF SUCH MAGNITUDE WAS MADE. THE RESULTS OF THIS EFFORT WERE NOT CONCLUSIVE BECAUSE THE TAPES SHOWING THE TABULATIONS WERE DESTROYED BY THE MICOM PRICING BRANCH PRIOR TO DISCOVERY OF THE ERROR. IT IS A FACT THAT THE MACHINE USED DURING TABULATION OF THE PROPOSALS MALFUNCTIONED AND WAS TURNED IN FOR REPAIR. THE COMPLETION OF TABULATION OF PROPOSALS WAS ACCOMPLISHED ON ANOTHER MACHINE. IT IS ALSO A FACT THAT THE DIFFERENCE BETWEEN THE ERROR PRICE AND THE CORRECT PRICE IS DIVISIBLE BY NINE (9) WITH A REMAINDER OF ONE (1) WHICH INDICATES THE POSSIBILITY OF A NUMBER TRANSPOSITION. WITHOUT THE TAPES IT CANNOT BE DETERMINED IF THE ERROR WAS HUMAN OR MACHINE MADE. FURTHER FACT IS THAT THE ERROR WAS MADE BY MICOM PRICING, AN ELEMENT SEPARATE AND APART BOTH FUNCTIONALLY AND MANAGERIALLY FROM THE CONTRACTING ELEMENT. IT IS THE OPINION OF THE CONTRACTING OFFICER THAT THE PRICE ANALYST PERFORMING THE PROPOSAL TABULATIONS WAS NOT AWARE THAT A COMPANY IDENTIFIED AS JOHN BRANSBY PRODUCTIONS, LIMITED EXISTED UNTIL THE PROPOSALS WERE FURNISHED FOR ANALYSIS. IT IS INCONCEIVABLE THAT HE DELIBERATELY MADE THE ERROR OR THAT HE WOULD BE PREJUDICED AGAINST BRANSBY. THE CONTRACTING OFFICER HAS NO EVIDENCE TO SUBMIT WHICH WILL SUPPORT BRANSBY'S CONTENTION THAT THE ERROR WAS MADE IN OTHER THAN GOOD FAITH. IT SHOULD BE POINTED OUT THAT THE CONTRACTING OFFICER AND MEMBERS OF HIS TEAM SPENT INNUMERABLE HOURS IN STRUCTURING THIS SOLICITATION TO MEET THE NEEDS OF THE GOVERNMENT IN CONSONANCE WITH SOUND CONTRACTING PRINCIPLES. THE ULTIMATE OBJECTIVE OF THIS EFFORT WAS TO AWARD TO THE QUALIFIED PROPOSER SUBMITTING THE LOWEST PRICE. IF THE CONTRACTING OFFICER AND HIS TEAM HAD A PRE-CONCEIVED IDEA OF THE FIRM THAT AWARD WOULD BE MADE TO, THE SOLICITATION WOULD CERTAINLY NOT HAVE HAD THE PRICING OF THE PROPOSAL AS THE FINAL DETERMINING FACTOR. ASSUMING FOR THE MOMENT THE GOVERNMENT TEAM HAD DECIDED PRIOR TO ISSUANCE OF THE SOLICITATION THE FIRM THAT WOULD RECEIVE THE AWARD, THE DECISION WOULD HAVE PROBABLY BEEN IN FAVOR OF BRANSBY BECAUSE OF THE GOVERNMENT'S EXPERIENCE WITH BRANSBY DURING 1971. DURING THIS PERIOD BRANSBY WAS UTILIZED EXTENSIVELY AS A SUBCONTRACTOR TO GENERAL ELECTRIC AND PERFORMED VERY SATISFACTORILY. DURING THIS SAME PERIOD H. G. PETERS ALSO PRODUCED MOVIES SATISFACTORILY FOR MICOM BUT NOT ON AS LARGE A SCALE. THE EXPERIENCE FACTOR WOULD CERTAINLY HAVE WEIGHED IN BRANSBY'S FAVOR."

AN ERROR OF LARGE MAGNITUDE WAS UNDOUBTEDLY MADE WHICH WAS INITIALLY PREJUDICIAL TO YOU. HOWEVER, WE THINK THE ARMY'S EXPLANATION IS A REASONABLE ONE UNDER THE CIRCUMSTANCES, AND WE FIND NO BASIS FOR CONCLUDING THAT THIS ERROR WAS NOT MADE IN GOOD FAITH.

THE HEART OF YOUR PROTEST APPEARS TO BE THE CONTRACTING OFFICER'S DECISION TO CONDUCT NEGOTIATIONS AFTER IT WAS DETERMINED THAT YOUR PROPOSAL WAS LOW, AND THE MANNER IN WHICH THOSE NEGOTIATIONS WERE CONDUCTED. THE CONTRACTING OFFICER'S POSITION IS THAT HE WAS REQUIRED TO OPEN NEGOTIATIONS BECAUSE OF PETERS' DEMAND AND THAT A CLOSER EXAMINATION OF THE PROPOSALS AFTER THE PRICING RE-EVALUATION RAISED QUESTIONS WITH RESPECT TO SEVERAL OF THE OFFERS.

THE CONTRACTING OFFICER CLEARLY WAS NOT REQUIRED TO NEGOTIATE WITH AN OFFEROR MERELY BECAUSE OF A DEMAND FOR SUCH AN OPPORTUNITY. NO OFFEROR HAS AN ABSOLUTE RIGHT TO DISCUSSION OF HIS PROPOSAL PRIOR TO AWARD, AND ASPR 3-805.1 SETS FORTH CERTAIN SITUATIONS IN WHICH AWARD OF A CONTRACT MAY BE MADE WITHOUT FIRST CONDUCTING NEGOTIATIONS. IF THE CONDITIONS OF THAT SECTION ARE MET, THE CONTRACTING OFFICER NEED NOT HOLD DISCUSSIONS PRIOR TO AWARD, REGARDLESS OF REQUESTS OR DEMANDS TO DO SO. HOWEVER, ONCE HE DOES HOLD DISCUSSIONS WITH AN OFFEROR, THE CONTRACTING OFFICER IS REQUIRED TO NEGOTIATE WITH ALL OFFERORS WHOSE PROPOSALS ARE WITHIN A COMPETITIVE RANGE. 10 U.S.C. 2304(G); 50 COMP. GEN. 202 (1970).

WE BELIEVE THERE WAS A SUFFICIENT BASIS FOR THE CONTRACTING OFFICER TO PROPERLY OPEN NEGOTIATIONS PRIOR TO AWARD. ASPR 3.805-1 STATES THAT "IN ANY CASE WHERE THERE IS UNCERTAINTY AS TO THE PRICING OR TECHNICAL ASPECTS OF ANY PROPOSALS, THE CONTRACTING OFFICER SHALL NOT MAKE AWARD WITHOUT FURTHER EXPLORATION AND DISCUSSION PRIOR TO AWARD." THE CONTRACTING OFFICER HAS REPORTED THAT AFTER CORRECTION OF THE PRICING ERROR, AWARD COULD NOT BE MADE AUTOMATICALLY TO YOU BECAUSE A QUESTION AROSE AS TO WHETHER YOU "FULLY UNDERSTOOD THE VARYING COMPLEXITY OF THE DIFFERENT TYPES OF SCRIPT WRITING REQUIRED." HE THEN DECIDED THAT DISCUSSION WITH YOU AND OTHER OFFERORS WOULD BE NECESSARY TO RESOLVE QUESTIONS REGARDING THE PRICING OF INDIVIDUAL ELEMENTS IN THE RESPECTIVE PROPOSALS AND TO DETERMINE IF YOU HAD THE NECESSARY FINANCIAL CAPABILITY TO PERFORM THE CONTRACT AS REQUIRED BY THE RFP.

THE CONTRACTING OFFICER WAS CONCERNED THAT YOUR PRICES FOR SCRIPT WRITING REFLECTED AN INADEQUATE UNDERSTANDING OF THE WORK REQUIRED FOR THESE ITEMS. YOU TAKE "STRONG EXCEPTION" TO THIS, AND POINT OUT THAT DURING 1971, AS A SUBCONTRACTOR, YOU PRODUCED MORE THAN 20 FILMS INVOLVING SCRIPT WRITING AND THAT SUCH EXPERIENCE WOULD PRECLUDE ANY REASONABLE QUESTIONING OF YOUR UNDERSTANDING IN THIS AREA. THE ARMY JUSTIFIES ITS ACTION BY POINTING OUT THAT YOUR PRICES WERE INVERSELY PROPORTIONAL TO THE COMPLEXITY OF THE WORK INVOLVED FOR EACH SCRIPT WRITING ITEM, THEREBY RAISING DOUBTS AS TO YOUR UNDERSTANDING OF WHAT WAS REQUIRED. IN THE SUPPLEMENTAL MATERIAL SUBMITTED TO US, THE ARMY STATES:

"THE GOVERNMENT'S INDEPENDENT COST ESTIMATE (ATTACHMENT 1) AND THE CHALLENGE BY THE REQUIRING ELEMENT OF THE REVERSE PRICING STRUCTURE OF SCRIPT WRITING IN THE RELATION TO THE VARYING DEGREE OF COMPLEXITY OF THE REQUIREMENT FORM THE BASIS FOR QUESTIONING BRANSBY'S UNDERSTANDING OF THE COMPLEXITIES OF THE TYPES OF SCRIPTS REQUIRED BY THE SOLICITATION. EVIDENT ON THE FACE OF THE GOVERNMENT INDEPENDENT COST ESTIMATE IS THE FACT THAT VARYING DEGREES OF COMPLEXITY ARE INVOLVED IN THE TYPES OF SCRIPT WRITING SOLICITED, SINCE THE REQUIREMENT, IN SOME INSTANCES, IS CREATIVE EFFORT AS OPPOSED TO PURELY RESEARCH AND DOCUMENTARY EFFORT. WHEN THIS ESTIMATE IS USED AS A BASIS FOR COMPARISON OF THE PROPOSED PRICES, IT IS EVIDENT THAT BRANSBY PLACED THE LOWEST PRICE ON THE MOST COMPLEX SCRIPT WRITING EFFORT AND THE HIGHEST PRICE ON THE MOST SIMPLE SCRIPT WRITING EFFORT. THE CONTRACTING OFFICER WAS, THEREFORE, DRAWN TO ONE OF TWO POSSIBLE CONCLUSIONS:

"(1) THAT JOHN BRANSBY, HAVING HAD NO SCRIPT WRITING EXPERIENCE OF RECORD, DID NOT UNDERSTAND THE COMPLEXITY OF THE FIRST THREE TYPES OF SCRIPT REQUIREMENTS (IN SPITE OF THE FACT THAT BRANSBY CITED HIS 1971 SUBCONTRACTOR EXPERIENCE AS A BASIS FOR NEGATING THE CONTRACTING OFFICER'S RIGHT TO QUESTION, INVESTIGATION SHOWS THAT BRANSBY PERFORMED NO SCRIPT WRITING SERVICES FOR MICOM DURING 1971.), OR

"(2) BRANSBY WAS PLAYING THE 'QUANTITY GAME' AS HE SUGGESTED COULD BE DONE IN A PRIOR CONFERENCE WITH THE GENERAL ACCOUNTING OFFICE. THIS POSSIBLE CONCLUSION IS SUPPORTED BY THE FACT THAT HIS LOWEST PRICES WERE RELATED TO THE GREATEST QUANTITY REGARDLESS OF COMPLEXITY.

"THE CONTRACTING OFFICER, HOWEVER, WAS UNDER A DUTY TO ASCERTAIN THAT BRANSBY UNDERSTOOD THE DIFFERENCE IN COMPLEXITY OF THE SEVERAL SCRIPTS EVEN THOUGH THE SOLICITATION DID DEFINE EACH TYPE OF SCRIPT WITH REFERENCE TO ITS COMPLEXITY."

THE SUPPLEMENTAL MATERIAL ALSO STATES:

"A. THE CONTRACTING OFFICER DID HAVE A VALID REASON FOR QUESTIONING THE SCRIPT WRITING PRICES PROPOSED BY BRANSBY. THE CONTRACTING OFFICER IS FULLY AWARE THAT BRANSBY WAS UTILIZED EXTENSIVELY DURING 1971 AS A SUBCONTRACTOR TO GENERAL ELECTRIC CO. (PRIME CONTRACTOR) FOR PRODUCTION OF MOTION PICTURES. IT IS A FACT THAT THE SCRIPTS UTILIZED BY BRANSBY IN THESE PRODUCTIONS FALL INTO THREE CATEGORIES, NO CATEGORY RESULTING IN THE SCRIPT WRITING RESPONSIBILITY BEING ASSUMED BY BRANSBY. THESE CATEGORIES ARE:

"(1) SCRIPTS WRITTEN BY RCA PERSONNEL OR WRITERS UNDER CONTRACT TO RCA (PRIME CONTRACTOR PRIOR TO GENERAL ELECTRIC). THESE SCRIPTS WERE FURNISHED BY THE GOVERNMENT TO GENERAL ELECTRIC AND, IN TURN, FURNISHED TO BRANSBY BY GENERAL ELECTRIC.

"(2) SCRIPTS WRITTEN BY GENERAL ELECTRIC PERSONNEL OR WRITERS UNDER CONTRACT TO GENERAL ELECTRIC. THESE SCRIPTS WERE FURNISHED TO BRANSBY BY GENERAL ELECTRIC.

"(3) SCRIPTS WRITTEN BY GOVERNMENT PERSONNEL. THESE SCRIPTS WERE FURNISHED BY THE GOVERNMENT TO GENERAL ELECTRIC AND, IN TURN, TO BRANSBY BY GENERAL ELECTRIC.

"IT IS APPARENT THAT BRANSBY'S SUBCONTRACTOR EXPERIENCE WITH GENERAL ELECTRIC DURING 1971 DID NOT ENCOMPASS THE PRICING OF SCRIPTS."

THE FOLLOWING TABLE SETS FORTH THE GOVERNMENT ESTIMATE AND THE ORIGINAL PROPOSAL PRICES SUBMITTED BY YOU AND PETERS FOR EACH SCRIPT WRITING ITEM:

GOVERNMENT

ESTIMATE BRANSBY PETERS

ATTITUDE $100.00 $59.50 $80.00

INFORMATION 90.00 60.00 80.00

COMMAND 80.00 70.00 80.00

TACTICAL 72.00 80.00 60.00

TECHNICAL 68.00 60.00 60.00

TV SPOT 20.00 13.50 8.00

WHILE BOTH YOU AND PETERS OFFERED PRICES BELOW THE GOVERNMENT'S ESTIMATE FOR MOST ITEMS, IT IS CLEAR THAT YOUR PRICES DEVIATED MORE SIGNIFICANTLY FROM THE ESTIMATE, ESPECIALLY ON THOSE ITEMS THE GOVERNMENT BELIEVED TO BE OF THE GREATEST COMPLEXITY. IT IS NOT UNUSUAL FOR A CONTRACTING OFFICER, CONCERNED THAT A PROPOSED PRICE MAY BE UNREALISTICALLY LOW, TO ATTEMPT TO INSURE THAT THE LOW PRICE IS NOT THE RESULT OF A MISTAKE OR MISUNDERSTANDING. SEE 50 COMP. GEN. 788, 791 (1971). UNDER THE CIRCUMSTANCES, AND IN VIEW OF THE "WIDE DISCRETION VESTED IN THE CONTRACTING OFFICER IN DETERMINING THE NATURE AND SCOPE OF NEGOTIATIONS," 50 COMP. GEN. 246, 251 (1970), WE THINK HE WAS ACTING WITHIN THE BOUNDS OF PROPER DISCRETION IN DECIDING THAT NEGOTIATION WAS REQUIRED TO AFFIRMATIVELY ESTABLISH THAT YOU UNDERSTOOD THE RFP REQUIREMENTS. WITH RESPECT TO THESE SCRIPT WRITING ITEMS, YOU ASSERT THAT YOU WERE "ADVISED" BY THE ARMY TO INCREASE YOUR PRICES FOR THESE ITEMS AND THAT THIS MISLED YOU TO THE EXTENT THAT PETERS "ENJOYED PREFERENTIAL TREATMENT." THE RECORD INDICATES THAT YOU DID INCREASE YOUR UNIT PRICE OF THREE OF THE ITEMS BY $5 EACH, AND THAT THIS MADE A DIFFERENCE IN YOUR FINAL EVALUATED TOTAL PRICE OF $2100. ALTHOUGH YOU STATE IN YOUR LETTER OF MARCH 29, 1972, THAT ONLY $1,086.60 SEPARATED YOUR FINAL PRICE FROM PETERS' PRICE, THE ACTUAL DIFFERENCE BETWEEN THE FINAL EVALUATED PRICES, AFTER APPLYING THE OFFERED DISCOUNTS, WAS $2,995.44. REGARDLESS OF THIS POINT, THE ARMY DENIES THAT YOU WERE MISLED IN ANY WAY, AND STATES THAT NO OFFEROR "WAS TOLD, NOR WAS IT IMPLIED, THAT ANY CHANGE UP OR DOWN WAS EXPECTED OR DESIRED." IT FURTHER STATES:

"THE CONTRACTING OFFICER QUESTIONED THE SCRIPT WRITING PRICES SUBMITTED BY BRANSBY BECAUSE THE PRICES PROPOSED FOR THE VARIOUS CATEGORIES WERE INVERSE TO THE GOVERNMENT'S ESTIMATE. ON 29 DEC 71, IN A TELEPHONE CONVERSATION WITH MR. DAVID JACOBSEN OF BRANSBY, THE CONTRACTING OFFICER REQUESTED A REVIEW OF THE GOVERNMENT'S SCRIPT WRITING REQUIREMENTS CONTAINED IN THE SOLICITATION. ON 6 JAN 1972, IN 'FACE TO FACE' NEGOTIATIONS WITH MESSRS. JACOBSEN AND DEPAOLA OF BRANSBY, GOVERNMENT PERSONNEL UNEQUIVOCALLY STATED THAT THE GOVERNMENT WAS NOT ASKING BRANSBY TO INCREASE OR DECREASE SCRIPT PRICES OR ANY OTHER PRICES. THE GOVERNMENT'S OBJECTIVE WAS TO ASSURE ITSELF THAT BRANSBY UNDERSTOOD THE SCRIPT REQUIREMENTS. BOTH JACOBSEN AND DEPAOLA INDICATED THEY UNDERSTOOD THE GOVERNMENT WAS NOT ASKING FOR A CHANGE IN PRICES. THE SUGGESTION TO BRANSBY WAS NOT THAT SCRIPT PRICES WERE TOO LOW BUT RATHER, 'DOES BRANSBY UNDERSTAND THE VARYING COMPLEXITIES OF THE SCRIPT WRITING REQUIREMENTS CONTAINED IN THE SOLICITATION'."

YOU CLAIM THAT THE PRIMARY REASON GIVEN FOR OPENING NEGOTIATIONS WAS THE CONTRACTING OFFICER'S DECISION TO DELETE THE SCHEDULE ITEM FOR ACTORS AND ACTRESSES WITHOUT TELEVISION RIGHTS. YOU STATE THAT SUCH A DECISION WAS "HIGHLY UNUSUAL" IN THAT TV RIGHTS FOR ARMY FILMS WERE NOT A LIKELY VALID REQUIREMENT, AND IN ANY EVENT A DECISION NOT TO OBTAIN ACTORS AND ACTRESSES WITHOUT TV RIGHTS DID NOT REQUIRE OPENING OF NEGOTIATIONS SO AS TO ALLOW PROPOSALS TO BE REVISED IN OTHER AREAS. WHILE WE MIGHT AGREE, WITHOUT DETERMINING THE POINT, THAT THE PROCURING OF ACTORS AND ACTRESSES WITH TELEVISION RIGHTS WAS UNUSUAL FOR THIS PROCUREMENT, IT IS CLEAR FROM WHAT HAS BEEN STATED ABOVE THAT NEGOTIATIONS WERE OPENED NOT TO ALLOW DELETION OF THIS ONE ITEM, BUT TO DISCUSS CERTAIN ASPECTS OF THE VARIOUS OFFERS AND PARTICULARLY TO DISCUSS SCRIPT WRITING WITH YOU. ONCE THE DECISION WAS MADE TO NEGOTIATE, ALL ASPECTS OF THE PROPOSALS WERE SUBJECT TO DISCUSSION AND REVISION UP TO THE TIME SET FOR CLOSING OF NEGOTIATIONS. ASPR 3 805.1(B); 48 COMP. GEN. 536 (1969).

YOU ALSO ASSERT THAT THE OPENING OF NEGOTIATIONS RESULTED IN AN AUCTION BECAUSE THE PRICE PROPOSALS WERE KNOWN TO UNAUTHORIZED PERSONS. YOU ALLEGE THAT THERE WAS A DEFINITE LEAK OF THE PROPOSED PRICES BY A REDSTONE ARSENAL EMPLOYEE AND THAT THIS COMPROMISED YOUR LOW POSITION DURING THE NEGOTIATION PROCESS. YOU SPECIFICALLY MENTION THAT A NAMED OFFICIAL OF THE ARSENAL WHO WAS NOT AUTHORIZED ACCESS TO THE PRICE PROPOSALS CALLED YOU AND STATED THAT YOU HAD SUBMITTED THE LOW OFFER BY ABOUT $50,000, AND THAT YOU WERE ALSO INFORMED THAT PETERS HAD REVEALED ITS PRICE TO OTHER ARSENAL PERSONNEL.

THE ARMY DENIES THAT ANY PRICE LEAK OCCURRED, AND STATES THAT "ALL PROPOSALS AND PRICES WERE KEPT UNDER RIGID CONTROL BY MEANS OF AN ACCESS CONTROL REGISTER, THUS INSURING THAT NO COMPROMISE OF ANY PROPOSAL COULD OCCUR." WE WOULD AGREE THAT THE EXISTENCE OF SUCH A REGISTER DOES NOT INDICATE THAT SOMEONE COULD NOT OR DID NOT REVEAL PRIVILEGED INFORMATION TO AN UNAUTHORIZED INDIVIDUAL. HOWEVER, IN THE ABSENCE OF ANY CONCRETE EVIDENCE TO SUPPORT YOUR ASSERTION, WE CANNOT FIND FROM THIS RECORD THE EXISTENCE OF ANY SPECIFIC INCIDENT WHERE AN OFFEROR WAS INFORMED THAT A GIVEN PRICE HAD TO BE MET OR HOW HIS PRICE STOOD IN RELATION TO OTHERS, AND WE MUST CONCLUDE THAT THIS PROCUREMENT WAS NOT CONDUCTED IN A MANNER VIOLATIVE OF THE AUCTION TECHNIQUE PROHIBITION OF ASPR 3-805.1(B).

YOU QUESTION THE CONTRACTING OFFICER'S DECISION TO AWARD ON THE BASIS OF PRICE, AND CLAIM THAT THE EVALUATION CRITERIA SET FORTH IN THE RFP WERE CONTRADICTORY. PARAGRAPH D-4(G) LISTED THE FOLLOWING EVALUATION FACTORS IN DESCENDING ORDER OF IMPORTANCE:

(1) TECHNICAL CAPABILITY.

(A) PERSONNEL QUALIFICATIONS.

(B) SAMPLE OF WORK, IF REQUIRED.

(C) EXPERIENCE.

(D) STABILITY OF COMPANY.

(E) TYPE AND EXPERIENCE OF COMPANY.

(2) FINANCIAL CAPABILITY.

(3) MANAGEMENT CAPABILITY.

(4) PRICE.

PARAGRAPH D-4(B), IMMEDIATELY FOLLOWING THIS LIST STATED:

"AWARD SHALL BE MADE TO THAT TECHNICALLY QUALIFIED, RESPONSIVE, RESPONSIBLE OFFEROR WHO SUBMITS THE LOWEST AGGREGATE PRICE FOR THOSE ELEMENTS LISTED IN THE SCHEDULE TO BE PRICED."

THE PLAIN MEANING OF SUBSECTION (H) IS SOMEWHAT VITIATED BY THE LANGUAGE IN THE SECTION PRECEDING IT, AND WE AGREE THAT THE RFP DOES NOT CLEARLY ESTABLISH THE RELATIVE IMPORTANCE OF PRICE. WE HAVE PREVIOUSLY STATED THAT "*** NOTICE SHOULD BE GIVEN AS TO ANY MINIMUM STANDARDS WHICH WILL BE REQUIRED AS TO ANY PARTICULAR ELEMENT OF EVALUATION, AS WELL AS REASONABLY DEFINITE INFORMATION AS TO THE DEGREE OF IMPORTANCE TO BE ACCORDED TO PARTICULAR FACTORS IN RELATION TO EACH OTHER." 49 COMP. GEN. 229, 230-231 (1969). HOWEVER, IT DOES NOT APPEAR THAT ANY OFFEROR WAS MISLED OR PREJUDICED BY ANY POSSIBLE AMBIGUITY CREATED BY THE WORDING IN PARAGRAPH D -4. IN FACT, AS IS POINTED OUT IN THE ARMY'S REPORT, YOUR ATTORNEY STATED HIS BELIEF THAT THE RFP INDICATED AWARD WOULD BE MADE TO THE LOW OFFEROR, AND IT WAS ON THAT BASIS THAT HE PROTESTED THE OPENING OF NEGOTIATIONS AFTER CORRECTION OF YOUR PRICE EVALUATION. FURTHERMORE, IN SITUATIONS WHERE OFFERORS ARE RATED TECHNICALLY ACCEPTABLE AND THE RELATIVE DIFFERENCES AMONG THE PROPOSALS MEETING THE GOVERNMENT'S NEEDS ARE NOT SIGNIFICANT, PRICE MAY PROPERLY BE CONSIDERED THE CONTROLLING FACTOR. COMP. GEN. 246 (1970). IN ANY EVENT, THERE IS NO INDICATION IN THE RECORD THAT YOU QUESTIONED THE RELATIVE IMPORTANCE OF PRICE AS AN EVALUATION FACTOR PRIOR TO SUBMISSION OF YOUR PROPOSAL. IN 50 COMP. GEN. 565 (1971), WE STATED AT PAGE 575:

"*** OUR POSITION IN SUCH SITUATIONS IS THAT WHERE THE SUFFICIENCY OF THE INFORMATION CONCERNING THE RELATIVE IMPORTANCE OF THE EVALUATION CRITERIA IS NOT QUESTIONED PRIOR TO THE SUBMISSION OF PROPOSALS, AND THE RECORD DOES NOT ESTABLISH THAT ANY OFFEROR WAS PLACED AT A COMPETITIVE ADVANTAGE OR DISADVANTAGE BY THE INADEQUACY OF SUCH INFORMATION, WE DO NOT CONSIDER THE DEFICIENCY AS SUFFICIENTLY MATERIAL TO DISTURB AN AWARD."

ACCORDINGLY, WE WILL NOT INTERFERE WITH THE AWARD ON THIS BASIS.

FINALLY, AS EVIDENCE OF PREJUDICIAL TREATMENT AGAINST YOU BY THE ARMY, YOU STATE THAT YOU RECEIVED NEITHER THE TELEGRAM SUPPOSEDLY SENT BY THE CONTRACTING OFFICER ON DECEMBER 22, 1971, NOTIFYING OFFERORS OF THE INTENTION TO AWARD TO PETERS, NOR THE TELEGRAM OF DECEMBER 23, 1971, RESCINDING THE PREVIOUS TELEGRAM. YOU ALSO CLAIM YOU HAD DIFFICULTY OBTAINING THE JANUARY 12, 1972, MESSAGE ANNOUNCING AWARD TO PETERS. OUR FILE CONTAINS COPIES OF THE ORIGINAL MESSAGE FORMS, TIME STAMPED UPON RECEIPT AT THE REDSTONE ARSENAL COMMUNICATIONS CENTER, FOR ALL THREE MESSAGES. YOUR COMPANY WAS INCLUDED ON EACH FORM AS ONE OF THE ADDRESSEES. THEREFORE, WE CAN ONLY CONCLUDE THAT YOUR FAILURE TO RECEIVE THESE MESSAGES WAS NOT THE RESULT OF ANY PREJUDICIAL ACTION BY THE ARMY.

WE HAVE EXHAUSTIVELY REVIEWED THE RECORD PRESENTED TO US DURING THIS PROTEST. ON YOUR MAJOR POINT, THAT REDSTONE ARSENAL PERSONNEL ENGAGED IN A COLLUSIVE COURSE OF CONDUCT DESIGNED TO RESULT IN AWARD TO PETERS, THE RECORD DOES NOT PERMIT US TO CONCLUDE THAT YOU HAVE ESTABLISHED THIS ALLEGATION. YOUR PROTEST IS, THEREFORE, DENIED.

HOWEVER, SINCE THE SMALL BUSINESS STATUS OF PETERS HAS BEEN QUESTIONED BY ANOTHER PROTESTOR, WE ARE ALSO ADVISING THE SECRETARY THAT IT WOULD BE APPROPRIATE NOT TO EXERCISE THE RENEWAL OPTION AT THE END OF THE FIRST YEAR IF IN FACT IT IS DETERMINED THAT PETERS DOES NOT QUALIFY AS A SMALL BUSINESS.

WITH RESPECT TO YOUR LETTER OF AUGUST 4, 1972, WE ARE REQUESTING THE SECRETARY OF THE ARMY TO LOOK INTO THE MATTER AND TO ADVISE US OF HIS FINDINGS.

ENCLOSED, FOR YOUR INFORMATION, IS A COPY OF OUR LETTER OF TODAY TO PROVISO PRODUCTIONS REGARDING ITS PROTEST IN THIS CASE.