B-175280(1), OCT 5, 1972

B-175280(1): Oct 5, 1972

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WHICH PERMITS MODIFICATION OF A NEGOTIATED PROPOSAL ANY TIME PRIOR TO AWARD IS LIMITED BY SF 33A. UNLESS THE DELAY IN RECEIPT WAS DUE TO UNTIMELY DELIVERY OR MISHANDLING BY THE RECEIVING GOVERNMENT INSTALLATION. THE CONTRACTING OFFICER'S DECISION NOT TO REOPEN NEGOTIATIONS AFTER RECEIPT OF A LATE MODIFICATION DOES NOT CONSTITUTE AN ABUSE OF DISCRETION WHERE ALL FIRMS ARE GIVEN AN EQUAL OPPORTUNITY TO SUBMIT THEIR BEST PRICE BY THE FINAL CLOSING DATE. THERE IS NOT SUFFICIENT EVIDENCE IN THIS CASE TO REVERSE THE ADMINISTRATIVE FINDINGS THAT NORRIS' OFFER DID NOT CONSTITUTE A "BUY IN. " THAT NORRIS WAS A RESPONSIBLE OFFEROR. THAT NORRIS WAS GIVEN NO PREFERENTIAL INFORMATION OF FUTURE REQUIREMENTS.

B-175280(1), OCT 5, 1972

BID PROTEST - LATE OFFER - MODIFICATION - ADMINISTRATIVE FACTUAL DETERMINATIONS DECISION DENYING THE PROTEST OF KISCO COMPANY, INC., AGAINST AWARD OF A CONTRACT TO NORRIS INDUSTRIES, INC., UNDER A RFP ISSUED BY THE DEPARTMENT OF THE ARMY FOR A REQUIREMENT OF CARTRIDGE CASES. STANDARD FORM 33A, PARAGRAPH 7(B), WHICH PERMITS MODIFICATION OF A NEGOTIATED PROPOSAL ANY TIME PRIOR TO AWARD IS LIMITED BY SF 33A, PARAGRAPH 8, WHICH PROVIDES THAT SUCH LATE MODIFICATIONS CAN BE CONSIDERED ONLY IF RECEIVED NOT LATER THAN THE DEADLINE SET FOR THE RECEIPT OF OFFERS, UNLESS THE DELAY IN RECEIPT WAS DUE TO UNTIMELY DELIVERY OR MISHANDLING BY THE RECEIVING GOVERNMENT INSTALLATION. THE CONTRACTING OFFICER'S DECISION NOT TO REOPEN NEGOTIATIONS AFTER RECEIPT OF A LATE MODIFICATION DOES NOT CONSTITUTE AN ABUSE OF DISCRETION WHERE ALL FIRMS ARE GIVEN AN EQUAL OPPORTUNITY TO SUBMIT THEIR BEST PRICE BY THE FINAL CLOSING DATE. FURTHER, THERE IS NOT SUFFICIENT EVIDENCE IN THIS CASE TO REVERSE THE ADMINISTRATIVE FINDINGS THAT NORRIS' OFFER DID NOT CONSTITUTE A "BUY IN," THAT NORRIS WAS A RESPONSIBLE OFFEROR, AND THAT NORRIS WAS GIVEN NO PREFERENTIAL INFORMATION OF FUTURE REQUIREMENTS.

TO KISCO COMPANY, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 23, 1972, AND SUBSEQUENT CORRESPONDENCE CONCERNING YOUR PROTEST UNDER REQUEST FOR PROPOSALS (RFP) DAAA09-72-R-0053, ISSUED ON DECEMBER 29, 1971, BY THE DEPARTMENT OF THE ARMY FOR A REQUIREMENT OF CARTRIDGE CASES. THE RFP CONTAINED STANDARD FORM (SF) 33A, WHICH PROVIDED IN PARAGRAPH 7(B), MODIFICATION OR WITHDRAWAL OF OFFERS, THAT IN THIS NEGOTIATED PROCUREMENT OFFERS MIGHT BE MODIFIED (SUBJECT TO PARAGRAPH 8 OF SF 33A WHEN APPLICABLE) AT ANY TIME PRIOR TO AWARD. PARAGRAPH 8, LATE OFFERS AND MODIFICATIONS OR WITHDRAWALS, FURTHER PROVIDED THAT THE RULES FOR CONSIDERATION OF LATE BIDS IN ADVERTISED PROCUREMENTS WOULD ALSO APPLY TO LATE OFFERS AND MODIFICATIONS IN THE SUBJECT NEGOTIATED PROCUREMENT.

BOTH YOUR CONCERN AND NORRIS INDUSTRIES, INC., SUBMITTED PROPOSALS BY THE CLOSING DATE ON JANUARY 13, 1972. THE CONTRACTING OFFICER REPORTS THAT NEGOTIATIONS WERE SUBSEQUENTLY OPENED FOR THE REQUIREMENT BY MESSAGE OF JANUARY 18, 1972, IN PERTINENT PART, AS FOLLOWS:

"THIS TT CONSTITUTES FORMAL OPENING OF NEGOTIATIONS FOR REFERENCED PROPOSAL. ***

"REVISED PROPOSALS, IF SUBMITTED, MUST BE RECEIVED ON OR BEFORE 3:00 PM (LOCAL TIME) 26 JANUARY 1972."

HE ALSO STATES THAT DURING THE NEGOTIATION PERIOD "FACE-TO-FACE" DISCUSSIONS WERE HELD WITH YOUR CONCERN ON JANUARY 24, 1972; THAT DURING THIS MEETING YOUR REPRESENTATIVE WAS TOLD THAT IF HE DESIRED TO REVISE HIS PROPOSAL HE COULD DO SO AT ANY TIME PRIOR TO THE CLOSING DATE ESTABLISHED FOR RECEIPT OF PROPOSALS ON JANUARY 26, 1972; THAT YOU THEN SUBMITTED A REVISED PROPOSAL, REDUCING YOUR PRICE BEFORE SUCH DATE; AND THAT ON FEBRUARY 1, 1972, THE PROCURING ACTIVITY RECEIVED A TELETYPE DATED JANUARY 31, 1972, FROM YOUR CONCERN OFFERING A FURTHER PRICE REDUCTION WHICH WOULD HAVE MADE YOUR OFFER THE MOST FAVORABLE PROPOSAL.

THE CONTRACTING OFFICER STATES THAT HE CONSIDERED YOUR PRICE REDUCTION OF JANUARY 31 TO BE A LATE MODIFICATION AND NOT ELIGIBLE FOR CONSIDERATION FOR AWARD UNDER ARMED SERVICES PROCUREMENT REGULATION (ASPR) 3-506(C), QUOTED IN PERTINENT PART AS FOLLOWS:

"LATE PROPOSALS SHALL NOT BE CONSIDERED FOR AWARD, EXCEPT UNDER THE FOLLOWING CIRCUMSTANCES:

(I) WHERE ONLY ONE PROPOSAL IS RECEIVED;

(II) WHERE THE SECRETARY CONCERNED DETERMINES THAT CONSIDERATION OF A LATE PROPOSAL IS OF EXTREME IMPORTANCE TO THE GOVERNMENT, AS FOR EXAMPLE WHERE IT OFFERS SOME IMPORTANT TECHNICAL OR SCIENTIFIC BREAKTHROUGH; OR

(III) UNDER THE CIRCUMSTANCES SET FORTH IN 2-303 PERMITTING CONSIDERATION OF LATE BIDS."

IN THIS REGARD THE CONTRACTING OFFICER STATES THAT YOUR PROPOSAL WAS NOT THE ONLY PROPOSAL RECEIVED; THAT YOUR LATE MODIFICATION DID NOT OFFER ANY TECHNICAL OR SCIENTIFIC BREAKTHROUGH; AND THAT THE LATE RECEIPT OF THE JANUARY 31 TELETYPE COULD NOT BE CONSIDERED EXCUSABLE UNDER THE RULES FOR LATE PROPOSALS SET FORTH IN PARAGRAPH 8 OF SF 33A. IN VIEW THEREOF, NORRIS' FINAL OFFER WAS CONSIDERED MOST ADVANTAGEOUS TO THE GOVERNMENT AND THE CONTRACTING OFFICER, HAVING DETERMINED NORRIS TO BE RESPONSIBLE, MADE AN AWARD FOR THE REQUIREMENT TO THAT CONCERN ON FEBRUARY 17, 1972.

YOU MAINTAIN THE CONTRACTING OFFICER IMPROPERLY REJECTED YOUR MODIFICATION OF JANUARY 31; THAT PARAGRAPHS 7 AND 8 OF SF 33A EXPRESSLY PERMITTED THE SUBMISSION OF REVISED OFFERS UNTIL THE TIME OF AWARD; THAT NORRIS WAS NOT A RESPONSIBLE OFFEROR; AND THAT NORRIS' LOW OFFER CONSTITUTED A "BUY-IN."

OUR OFFICE HAS INTERPRETED THE SUBJECT PARAGRAPHS OF SF 33A TO MEAN THAT OPPORTUNITY TO MODIFY A NEGOTIATED PROPOSAL AT ANY TIME PRIOR TO AWARD PURSUANT TO PARAGRAPH 7(B) IS LIMITED BY PARAGRAPH 8(A) IN CONNECTION WITH NEGOTIATED PROCUREMENTS BY THE DEPARTMENT OF DEFENSE. THE EXPRESSION IN PARAGRAPH 7(B) "SUBJECT TO PAR. 8 WHEN APPLICABLE" IS INSERTED BECAUSE UNDER ASPR 3-506(B) AND (G) THE PROVISIONS OF PARAGRAPH 8 ARE APPLICABLE TO NEGOTIATED PROCUREMENTS. B-167643, NOVEMBER 14, 1969. THERE IS NO EQUIVALENT PROVISION IN THE FEDERAL PROCUREMENT REGULATIONS.

PARAGRAPH 8(A), GOVERNING THE CONSIDERATION OF LATE OFFERS AND MODIFICATIONS, PROVIDES THAT OFFERS AND MODIFICATIONS OF OFFERS ARE FOR CONSIDERATION ONLY IF RECEIVED NOT LATER THAN THE DEADLINE SET FOR THE RECEIPT OF OFFERS, UNLESS DELAY IN RECEIPT WAS DUE TO UNTIMELY DELIVERY OR MISHANDLING BY THE RECEIVING GOVERNMENT INSTALLATION. THIS IS ALSO CONSISTENT WITH ASPR 3-805.1(B), WHICH PROVIDES THAT REVISIONS OF PROPOSALS RECEIVED AFTER THE SPECIFIED DATE FOR THE CLOSING OF NEGOTIATIONS SHALL BE TREATED AS LATE PROPOSALS IN ACCORDANCE WITH THE "LATE PROPOSALS" PROVISIONS OF THE REQUEST FOR PROPOSALS AS FOLLOWS:

"WHENEVER NEGOTIATIONS ARE CONDUCTED WITH SEVERAL OFFERORS, WHILE SUCH NEGOTIATIONS MAY BE CONDUCTED SUCCESSIVELY, ALL OFFERORS SELECTED TO PARTICIPATE IN SUCH NEGOTIATIONS (SEE (A) ABOVE) SHALL BE OFFERED AN EQUITABLE OPPORTUNITY TO SUBMIT SUCH PRICE, TECHNICAL, OR OTHER REVISIONS IN THEIR PROPOSALS AS MAY RESULT FROM THE NEGOTIATIONS. ALL SUCH OFFERORS SHALL BE INFORMED OF THE SPECIFIED DATE (AND TIME IF DESIRED) OF THE CLOSING OF NEGOTIATIONS AND THAT ANY REVISIONS TO THEIR PROPOSALS MUST BE SUBMITTED BY THAT DATE. ALL SUCH OFFERORS SHALL BE INFORMED THAT ANY REVISION RECEIVED AFTER SUCH DATE SHALL BE TREATED AS A LATE PROPOSAL IN ACCORDANCE WITH THE "LATE PROPOSALS" PROVISIONS OF THE REQUEST FOR PROPOSALS. (IN THE EXCEPTIONAL CIRCUMSTANCES WHERE THE SECRETARY CONCERNED AUTHORIZES CONSIDERATION OF SUCH A LATE PROPOSAL, RESOLICITATION SHALL BE LIMITED TO THE SELECTED OFFERORS WITH WHOM NEGOTIATIONS HAVE BEEN CONDUCTED.) IN ADDITION, ALL SUCH OFFERORS SHALL ALSO BE INFORMED THAT AFTER THE SPECIFIED DATE FOR THE CLOSING OF NEGOTIATION NO INFORMATION OTHER THAN NOTICE OF UNACCEPTABILITY OF PROPOSAL, IF APPLICABLE (SEE 3- 508), WILL BE FURNISHED TO ANY OFFEROR UNTIL AWARD HAS BEEN MADE."

ACCORDINGLY, WE DO NOT BELIEVE THAT PARAGRAPH 7 OF SF 33A EITHER REQUIRED OR PERMITTED CONSIDERATION OF THE JANUARY 31 MODIFICATION SUBMITTED BY YOUR COMPANY.

YOU ALSO ALLEGE THAT THE DECISION OF THE CONTRACTING OFFICER NOT TO REOPEN NEGOTIATIONS FOLLOWING RECEIPT OF YOUR LATE MODIFICATION CONSTITUTED AN ABUSE OF DISCRETION. IN THIS REGARD YOU CITE 47 COMP. GEN. 279 (1967), IN WHICH WE CRITICIZED A CONTRACTING OFFICER'S DETERMINATION NOT TO CONSIDER A LATE MODIFICATION WHICH OFFERED A SUBSTANTIAL MONETARY REDUCTION TO AN INITIAL, TIMELY OFFER. THE CONTRACTING OFFICER RELIED ON THE PROVISIONS OF ASPR 3-506, NOTED ABOVE, IN MAKING THIS DETERMINATION AND, SUBSEQUENTLY, AWARDED THE CONTRACT ON AN INITIAL PROPOSAL BASIS. POINTED OUT THAT THE PROVISIONS OF ASPR 3-506 HAD NO GREATER WEIGHT THAN THOSE OF ASPR 3 805.1(A) WHICH REQUIRE, WITH CERTAIN EXCEPTIONS, THE CONDUCT OF NEGOTIATIONS WITH ALL RESPONSIBLE OFFERORS WHO HAVE SUBMITTED PROPOSALS WITHIN A COMPETITIVE RANGE, PRICE AND OTHER FACTORS CONSIDERED. ACCORDINGLY, WE CONSIDERED THE CONTRACTING OFFICER'S DETERMINATION NOT TO CONDUCT NEGOTIATIONS AN UNSOUND EXERCISE OF DISCRETION, CONSIDERING THE POSSIBLE BENEFIT TO BE GAINED BY THE GOVERNMENT FROM SUCH DISCUSSIONS, BUT NOT A VIOLATION OF LAW OR REGULATION. IN THE PRESENT PROCUREMENT, UNLIKE THE CIRCUMSTANCES IN THE CITED CASE, NEGOTIATIONS WERE CONDUCTED WITH YOUR CONCERN AND NORRIS PURSUANT TO ASPR 3 805.1(A), AND THERE IS NO EVIDENCE THAT YOUR CONCERN WAS NOT GIVEN AN EQUAL OPPORTUNITY TO SUBMIT YOUR BEST PRICE BY THE FINAL CLOSING DATE SET FOR RECEIPT OF PROPOSALS ON JANUARY 26, 1972. THESE CIRCUMSTANCES ARE CLEARLY DISTINGUISHABLE FROM THE FACTS IN THE CITED CASE, AND WE ARE THEREFORE UNABLE TO CONCLUDE THAT THE REFUSAL OF THE CONTRACTING OFFICER TO CONSIDER YOUR LATE MODIFICATION UNDER ASPR 3-506 CONSTITUTED AN ABUSE OF DISCRETION AS YOU ALLEGE.

WITH RESPECT TO YOUR ALLEGATION THAT NORRIS' LOW OFFER CONSTITUTED A "BUY -IN" THE DEPARTMENT STATES THAT THE COMPANY'S PRICE IS ONLY 2 CENTS A UNIT LOWER THAN THE PRICE OF THE LAST CONTRACT AWARDED TO NORRIS; THAT THE GOVERNMENT ALSO HAS AN OPTION TO AWARD ADDITIONAL QUANTITIES UP TO 50 PERCENT OF THE BASIC QUANTITY; AND THAT SUCH EVIDENCE SHOWS THAT A "BUY- IN" TACTIC IS NOT PRESENT IN THE SUBJECT PROCUREMENT. WE CANNOT DISAGREE WITH THIS POSITION.

YOU ALSO ALLEGE THAT NORRIS SHOULD NOT HAVE BEEN CONSIDERED RESPONSIBLE AS TO QUALITY OR QUANTITY BECAUSE A MAJOR SOURCE OF RAW MATERIAL SUPPLY FOR NORRIS WAS ON STRIKE AT THE TIME OF SAID AWARD, AND NORRIS HAD SUBMITTED DEFECTIVE CARTRIDGE CASES UNDER CONTRACT NO. DAAA09-72-C-0152.

IN RESPONSE TO YOUR ALLEGATION THE DEPARTMENT REPORTS THAT NORRIS HAD SUFFICIENT BACKUP ORDERS WITH U.S. STEEL FOR THE "BASE" STEEL TO ACCOMPLISH THE SUBJECT CONTRACT, NOTWITHSTANDING A WILDCAT STRIKE AT KAISER STEEL, THE REGULAR SUPPLIER OF "BASE" STEEL TO NORRIS; THAT THE FUNCTIONAL ACCEPTABILITY OF NORRIS' CASES UNDER CONTRACT -0152 HAS BEEN BALLISTICALLY DEMONSTRATED ON BOTH M102 AND M2A2 HOWITZER WEAPONS, NOTWITHSTANDING CERTAIN DIFFICULTIES RELATING TO THE CHAMBER GAGING AND HARDNESS OF THE CASES; THAT THE CONTRACTING OFFICER RECEIVED A FAVORABLE PREAWARD SURVEY ON NORRIS; AND THAT THE CONTRACTING OFFICER THEREFORE FOUND NORRIS TO BE RESPONSIBLE FOR THE PROCUREMENT. BASED ON OUR REVIEW OF THE PRESENT RECORD, WE CANNOT CONCLUDE THAT THE ADMINISTRATIVE FINDING THAT NORRIS WAS RESPONSIBLE FOR THE PROCUREMENT WAS IN ERROR.

YOU ALSO ALLEGE THAT NORRIS WAS GIVEN INFORMATION ABOUT FUTURE ADDITIONAL QUANTITIES AND THAT SUCH INFORMATION WAS NOT GIVEN TO YOUR COMPANY. THE CONTRACTING OFFICER MAINTAINS THAT NO DISCUSSION WAS HELD WITH NORRIS REGARDING ADDITIONAL QUANTITIES, AND THAT THERE ARE STILL NO ADDITIONAL REQUIREMENTS FOR THE ITEM. BASED ON THE PRESENT RECORD, WE CANNOT CONCLUDE THAT SUCH INFORMATION WAS GIVEN TO NORRIS.

IN VIEW OF THE FOREGOING YOUR PROTEST MUST BE DENIED.