B-174947(2), AUG 30, 1972

B-174947(2): Aug 30, 1972

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THE CONTRACTING OFFICER CLEARLY WAS NOT REQUIRED TO NEGOTIATE WITH AN OFFEROR MERELY BECAUSE THE OFFEROR DEMANDED SUCH AN OPPORTUNITY. HE WAS REQUIRED TO NEGOTIATE WITH ALL OFFERORS WITHIN THE COMPETITIVE RANGE. 50 COMP. TO PROVISO PRODUCTIONS: REFERENCE IS MADE TO YOUR LETTER OF JANUARY 13. WAS FOR A BASIC ORDERING AGREEMENT FOR MOTION PICTURE AND TELEVISION SCRIPTS AND PRODUCTIONS. AFTER TECHNICAL AND PRICE EVALUATIONS WERE MADE. NEGOTIATIONS WERE CONDUCTED AND AWARD WAS MADE TO H. THAT THE AWARD WAS THE RESULT OF PREFERENTIAL TREATMENT AFFORDED TO PETERS BY REDSTONE ARSENAL PERSONNEL. THE CLAIM THAT PETERS RECEIVED PREFERENTIAL TREATMENT WAS ALSO MADE BY ANOTHER PROTESTOR IN THIS CASE.

B-174947(2), AUG 30, 1972

BID PROTEST - FAVORITISM - NEGOTIATIONS DENIAL OF PROTEST BY PROVISO PRODUCTIONS 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. THE CONTRACTING OFFICER CLEARLY WAS NOT REQUIRED TO NEGOTIATE WITH AN OFFEROR MERELY BECAUSE THE OFFEROR DEMANDED SUCH AN OPPORTUNITY. HOWEVER, ONCE HE DID HOLD A DISCUSSION WITH THAT OFFEROR, HE WAS REQUIRED TO NEGOTIATE WITH ALL OFFERORS WITHIN THE COMPETITIVE RANGE. 50 COMP. GEN. 202(1970). UNDER THE CIRCUMSTANCES, GAO CANNOT CONCLUDE THAT THE CONTRACTING OFFICIALS ACTED IN BAD FAITH IN AWARDING THE CONTRACT. SEE DECISION OF TODAY TO JOHN BRANSBY PRODUCTIONS, LTD.

TO PROVISO PRODUCTIONS:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 13, 1972, AND SUBSEQUENT CORRESPONDENCE, PROTESTING AWARD OF A CONTRACT UNDER REQUEST FOR PROPOSALS 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 TELEVISION SCRIPTS AND PRODUCTIONS. AFTER TECHNICAL AND PRICE EVALUATIONS WERE MADE, NEGOTIATIONS WERE CONDUCTED AND AWARD WAS MADE TO H. G. PETERS & COMPANY, INCORPORATED (PETERS), THE LOW OFFEROR. YOU ALLEGE, HOWEVER, THAT THE AWARD WAS THE RESULT OF PREFERENTIAL TREATMENT AFFORDED TO PETERS BY REDSTONE ARSENAL PERSONNEL.

THE CLAIM THAT PETERS RECEIVED PREFERENTIAL TREATMENT WAS ALSO MADE BY ANOTHER PROTESTOR IN THIS CASE. IN VIEW OF SUCH ALLEGATIONS, WE REQUESTED THE DEPARTMENT OF THE ARMY TO SUPPLEMENT ITS ADMINISTRATIVE REPORT WITH A DETAILED EXPLANATION OF THE FACTS AND CIRCUMSTANCES WHICH LED TO THE AWARD TO PETERS. THE ARMY HAS CATEGORICALLY DENIED THAT ANY ACTS OF FAVORITISM TOWARD ANY OFFEROR OCCURRED AND HAS FURNISHED SUPPLEMENTAL MATERIAL TO SUPPORT ITS POSITION. WE HAVE THOROUGHLY REVIEWED THIS MATTER, AND ON THE BASIS OF THE RECORD BEFORE US, WE CONCLUDE THAT THERE ARE NO GROUNDS FOR DISTURBING THE AWARD.

YOUR ALLEGATION OF FAVORITISM TOWARD PETERS CONCERNS THE 1970 PROCUREMENT FOR THE OPERATION AND MAINTENANCE OF THE MOTION PICTURE FACILITY AT REDSTONE ARSENAL ALONG WITH CERTAIN PRODUCTION WORK. YOU STATE THAT AN INITIAL REQUEST FOR PROPOSALS WAS ISSUED BUT THAT AFTER OPENING "SOMETHING CAUSED THIS CONTRACT TO BE WITHHELD AND A NEW DATE FOR SUBMITTING BIDS WAS ESTABISIHED *** WHEN H. G. PETERS WAS INVITED TO SUBMIT A BID." YOU FURTHER STATE THAT THE BID PRICES WERE GREATLY REDUCED ON THE SECOND SUBMISSION, APPARENTLY AS A RESULT OF A LEAK OF THE INITIAL BID PRICES. YOU ALSO CLAIM THAT THE PETERS BID, MUCH TO THE SURPRISE OF SOME PERSONNEL AT THE ARSENAL, WAS NOT LOW, AND THAT THE RESULTING CONTRACT TO GENERAL ELECTRIC WAS THEREFORE NOT EXTENDED BY EXERCISE OF THE OPTION TO RENEW AT THE END OF THE FIRST YEAR.

ON JUNE 8, 1970, AN INVITATION FOR BIDS WAS ISSUED BY REDSTONE ARSENAL, BUT WAS CANCELLED AFTER BID OPENING BECAUSE OF A SUBSTANTIAL CHANGE IN REQUIREMENTS RESULTING FROM THE TRANSFER TO THE ARSENAL OF A PORTION OF THE WORKLOAD FORMERLY CARRIED BY THE ARMY PICTORIAL CENTER IN LONG ISLAND CITY, NEW YORK. WE UPHELD THE CONTRACTING OFFICER'S DECISION TO CANCEL THE IFB AND RESOLICIT. B-170420, NOVEMBER 16, 1970, AND FEBRUARY 12, 1971. SINCE BIDS HAD BEEN OPENED PUBLICLY PRIOR TO CANCELLATION AND THE RESULTS POSTED, THE BID PRICES WERE AVAILABLE TO ANYONE INTERESTED AND WERE NOT LEAKED AS YOU CONTEND. FURTHERMORE, WE ARE INFORMED BY THE ARMY THAT THE GENERAL ELECTRIC CONTRACT CONTAINED ONLY AN OPTION FOR ONE 90-DAY EXTENSION, AND NOT AN OPTION FOR TWO ONE YEAR EXTENSIONS.

OUR REVIEW OF THE CIRCUMSTANCES SURROUNDING THE CURRENT AWARD REVEALS THAT THE CONTRACTING OFFICER ISSUED A NOTICE OF INTENT TO AWARD A CONTRACT TO THE LOW TECHNICALLY ACCEPTABLE OFFEROR WITHOUT CONDUCTING NEGOTIATIONS. HOWEVER, AFTER NOTIFYING OFFERORS OF HIS INTENTION TO MAKE AWARD TO PETERS, THE CONTRACTING OFFICER LEARNED THAT THE PRICE PROPOSAL OF ANOTHER OFFEROR, JOHN BRANSBY PRODUCTIONS, LIMITED, HAD BEEN EVALUATED INCORRECTLY. WHEN A CORRECT EVALUATION INDICATED THAT BRANSBY WAS IN FACT THE LOW PROPOSER, THE CONTRACTING OFFICER RESCINDED HIS NOTICE OF INTENT TO AWARD. THE CONTRACTING OFFICER SUBSEQUENTLY DECIDED THAT THE SITUATION WARRANTED NEGOTIATION WITH ALL OFFERORS, BECAUSE PETERS HAD "DEMANDED" AN OPPORTUNITY TO DISCUSS ITS PROPOSAL AFTER THE RESCISSION NOTICE WAS SENT OUT, AND BECAUSE THERE WERE MATTERS ON THE FACE OF BRANSBY'S PROPOSAL WHICH REQUIRED DISCUSSION BEFORE AWARD. DURING THE ENSUING NEGOTIATION, PETERS SUBMITTED A REVISED PROPOSAL WHICH AT THE CLOSE OF NEGOTIATIONS WAS THE LOW OFFER. AWARD WAS MADE ON THAT BASIS.

THE CONTRACTING OFFICER CLEARLY WAS NOT REQUIRED TO NEGOTIATE WITH AN OFFEROR MERELY BECAUSE THE OFFEROR DEMANDED SUCH AN OPPORTUNITY. HOWEVER, ONCE HE DID HOLD A DISCUSSION WITH THAT OFFEROR, HE WAS REQUIRED TO NEGOTIATE WITH ALL OFFERORS WITHIN THE COMPETITIVE RANGE. 50 COMP. GEN. 202 (1970). IN ANY EVENT, WE BELIEVE THAT THE CONTRACTING OFFICER ACTED PROPERLY UNDER THE CIRCUMSTANCES IN DETERMINING THAT NEGOTIATION WITH BRANSBY WAS NECESSARY. DURING THE NEGOTIATING PERIOD, OF COURSE, OFFERORS WERE FREE TO REVISE THEIR PROPOSALS UP TO THE TIME SET FOR CLOSING OF NEGOTIATIONS. ASPR 3.805 1(B).

WHILE YOU HAVE INDICATED YOUR BELIEF THAT THE ARMY ENGAGED IN ACTS OF FAVORITISM TOWARD PETERS TO THE PREJUDICE OF OTHER OFFERORS, THE RECORD DOES NOT ESTABLISH THE CORRECTNESS OF YOUR ASSERTION. ACCORDINGLY, WE CANNOT CONCLUDE THAT THE CONTRACTING OFFICIALS OF REDSTONE ARSENAL ACTED IN BAD FAITH IN AWARDING A CONTRACT TO PETERS.

YOU RAISE CERTAIN OTHER QUESTIONS REGARDING SPECIFIC REQUIREMENTS OF THE SOLICITATION. THESE MATTERS SHOULD HAVE PROPERLY BEEN BROUGHT TO THE ATTENTION OF THE CONTRACTING OFFICER PRIOR TO SUBMISSION OF YOUR PROPOSAL. 50 COMP. GEN. 193 (1970).

IN YOUR LETTER OF FEBRUARY 22, 1972, YOU QUESTION THE SMALL BUSINESS STATUS OF PETERS. WE ARE ADVISING THE SECRETARY OF THE ARMY THAT IF IT IS DETERMINED THAT PETERS IS NOT A QUALIFIED SMALL BUSINESS CONCERN IT WOULD BE APPROPRIATE TO RESOLICIT RATHER THAN EXERCISE AN OPTION TO RENEW THE EXISTING CONTRACT.

FOR YOUR INFORMATION, WE ARE ENCLOSING A COPY OF OUR LETTER OF TODAY TO JOHN BRANSBY PRODUCTIONS, LIMITED, REGARDING ITS PROTEST IN THIS MATTER.