B-176223, SEP 25, 1972, 52 COMP GEN 161

B-176223: Sep 25, 1972

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CONTRACTS - NEGOTIATION - EVALUATION FACTORS - PRICE PRIMARY CONSIDERATION NOTWITHSTANDING AN AMENDMENT TO TWO REQUESTS FOR PROPOSALS (RFPS) THAT SOLICITED OPERATION AND MAINTENANCE SERVICES TO THE EFFECT PRICE WOULD BE A SPECIFIC FACTOR IN EVALUATION WAS WITHDRAWN. OFFERORS WERE ON NOTICE PRICE WOULD BE AN EVALUATION FACTOR AS THE RFPS CONTAINED STANDARD FORM 33A. WHILE THE FAILURE TO INFORM OFFERORS OF THE RELATIVE IMPORTANCE OF PRICE IS CONTRARY TO SOUND PROCUREMENT POLICY AS EACH OFFEROR HAS A RIGHT TO KNOW WHETHER THE PROCUREMENT IS INTENDED TO ACHIEVE A MINIMUM STANDARD AT THE LOWEST COST OR WHETHER COST IS SECONDARY TO QUALITY SINCE THERE IS LITTLE DIFFERENCE IN THE TECHNICAL QUALITY OF THE SERVICES OFFERED.

B-176223, SEP 25, 1972, 52 COMP GEN 161

CONTRACTS - NEGOTIATION - EVALUATION FACTORS - PRICE PRIMARY CONSIDERATION NOTWITHSTANDING AN AMENDMENT TO TWO REQUESTS FOR PROPOSALS (RFPS) THAT SOLICITED OPERATION AND MAINTENANCE SERVICES TO THE EFFECT PRICE WOULD BE A SPECIFIC FACTOR IN EVALUATION WAS WITHDRAWN, OFFERORS WERE ON NOTICE PRICE WOULD BE AN EVALUATION FACTOR AS THE RFPS CONTAINED STANDARD FORM 33A, WHICH PROVIDED THAT AN AWARD WOULD BE MADE ON THE BASIS OF THE MOST ADVANTAGEOUS OFFER TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. WHILE THE FAILURE TO INFORM OFFERORS OF THE RELATIVE IMPORTANCE OF PRICE IS CONTRARY TO SOUND PROCUREMENT POLICY AS EACH OFFEROR HAS A RIGHT TO KNOW WHETHER THE PROCUREMENT IS INTENDED TO ACHIEVE A MINIMUM STANDARD AT THE LOWEST COST OR WHETHER COST IS SECONDARY TO QUALITY SINCE THERE IS LITTLE DIFFERENCE IN THE TECHNICAL QUALITY OF THE SERVICES OFFERED, THE FAILURE TO INDICATE THE RELATIVE WEIGHT OF PRICE IS NOT FATAL. CONTRACTS - NEGOTIATION - COMPETITION - DISCUSSION WITH ALL OFFERORS REQUIREMENT - WHAT CONSTITUTES DISCUSSION THE SATISFACTION OF THE REQUIREMENT IN 10 U.S.C. 2304(G) THAT WRITTEN OR ORAL DISCUSSIONS BE HELD WITH ALL OFFERORS WITHIN A COMPETITIVE RANGE TURNS UPON THE PARTICULAR FACTS INVOLVED AS NO FIXED, INFLEXIBLE RULE CAN BE USED TO CONSTRUE THE REQUIREMENT. THEREFORE, THE CONTENT AND EXTENT OF DISCUSSIONS NEEDED TO MEET THE REQUIREMENT IS A MATTER OF JUDGMENT PRIMARILY FOR DETERMINATION BY THE PROCURING AGENCY, AND THE DETERMINATION IS NOT SUBJECT TO QUESTION UNLESS CLEARLY ARBITRARY OR WITHOUT A REASONABLE BASIS PROVIDED, OF COURSE, THAT THE DISCUSSIONS HELD DO NOT OPERATE TO THE BIAS OR PREJUDICE OF ANY COMPETITOR. THEREFORE, WHERE THE OPPORTUNITY TO REVISE PRICES CONSTITUTES DISCUSSION, THE COMPETITION CONTEMPLATED BY 10 U.S.C. 2304(G) WAS OBTAINED AND RESULTED IN THE MOST ADVANTAGEOUS CONTRACTS TO THE GOVERNMENT FOR THE PROCUREMENT OF OPERATION AND MAINTENANCE SERVICES. CONTRACTS - NEGOTIATION - PROPRIETY - PROCEDURES ACCEPTABILITY ALTHOUGH PARAGRAPH 3-805.1(B) OF THE ARMED SERVICES PROCUREMENT REGULATION PERMITS ADVISING AN OFFEROR THAT ITS PRICE IS CONSIDERED TOO HIGH, THERE IS NO MANDATE THAT COMPELS THE PROCUREMENT ACTIVITY TO OFFER SUCH ADVICE. ALSO NOTWITHSTANDING THE PROVISION IN THE PARAGRAPH FOR A COMMON CUTOFF DATE FOR NEGOTIATIONS, THE ADDITIONAL TIME GIVEN THE LOW OFFEROR TO SUBMIT A BEST AND FINAL OFFER, WHICH RESULTED FROM PERMITTING EACH OFFEROR THE SAME AMOUNT OF TIME AFTER DISCUSSIONS WERE HELD TO SUBMIT ITS BEST AND FINAL OFFER WAS NOT PREJUDICIAL TO OTHER OFFERORS, NOR DID IT AFFORD THE LOW OFFEROR AN ADVANTAGE AS ITS OFFER TO FURNISH OPERATION AND MAINTENANCE SERVICES WAS LOW AT EACH STAGE OF EVALUATION. CONTRACTS - NEGOTIATION - EVALUATION FACTORS - MERGER OF FIRMS CONSIDERATION THE RECORD ON THE AWARD OF OPERATION AND MAINTENANCE CONTRACTS TO THE LOW OFFEROR DOES NOT EVIDENCE THE DETERMINATION WAS INFLUENCED BY THE PENDING MERGER OF THE LOW OFFEROR'S FIRM AND A COMPETITOR WHERE THE FIRM'S PAST PERFORMANCE UNDER CONTRACTS OF SIMILAR DIFFICULTY, ITS CORPORATE HISTORY, AND ITS FINANCIAL PICTURE WERE EVALUATED. FURTHERMORE, TO REQUIRE THE CONTRACTING OFFICER TO CONSIDER THE ANTITRUST ASPECTS OF THE PENDING MERGER IN THE ABSENCE OF JUDICIAL AUTHORITY SPEAKING DIRECTLY TO THE POINT WOULD IMPOSE AN INTOLERABLE BURDEN ON THE OFFICER AND INORDINATELY DELAY THE PROCUREMENT AND, MOREOVER, SINCE THE DISCLOSURE OF PRICES WAS INTENDED ONLY TO EFFECTUATE THE MERGER, THE "CERTIFICATION OF INDEPENDENT PRICE DETERMINATION," DESIGNED TO ALLEVIATE COMPETITION, WAS NOT INACCURATELY EXECUTED. CONTRACTS - LABOR STIPULATIONS - MINIMUM WAGE DETERMINATIONS - FAILURE TO ISSUE EFFECT SINCE THE ISSUANCE OF WAGE DETERMINATIONS IS WITHIN THE DISCRETION OF THE DEPARTMENT OF LABOR AND THE FAILURE TO ISSUE WAGE RATES INCIDENT TO THE PERFORMANCE OF OPERATION AND MAINTENANCE CONTRACTS WAS IN NO WAY ATTRIBUTABLE TO THE CONTRACTING AGENCY, THE PROVISIONS OF THE SERVICE CONTRACT ACT OF 1965, 41 U.S.C. 351, WERE NOT VIOLATED AND, THEREFORE, THE VALIDITY OF THE CONTRACTS AWARDED IS NOT AFFECTED, NOR WAS THE LOW OFFER THAT WAS ACCEPTED NONRESPONSIVE BECAUSE THE WAGES OF UNLISTED CATEGORIES OF EMPLOYEES DID NOT CONFORM TO THOSE STATED BY THE DEPARTMENT OF LABOR AS NEITHER THE REQUEST FOR PROPOSALS NOR THE DEPARTMENT'S REGULATION 29 CFR 4.6(B) IMPOSED SUCH A REQUIREMENT. GENERAL ACCOUNTING OFFICE - DECISIONS - COURT CONSIDERATION IN VIEW OF THE FACT THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA APPEARS TO CONTEMPLATE INCLUDING THE DECISION OF THE UNITED STATES GENERAL ACCOUNTING OFFICE (GAO) IN ITS CONSIDERATION OF THE APPEAL TAKEN TO THE DENIAL BY THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA OF A REQUEST FOR A PRELIMINARY INJUNCTION TO PREVENT THE PERFORMANCE OF OPERATION AND MAINTENANCE CONTRACTS PENDING A DECISION BY GAO TO A PROTEST FILED PRIOR TO THE FILING OF THE MOTION IN THE DISTRICT COURT, THE ISSUES RAISED IN THE BID PROTEST HAVE BEEN RESOLVED NOTWITHSTANDING THE BID PROTEST WOULD HAVE BEEN DISMISSED AS UNTIMELY UNDER GAO'S INTERIM BID PROTEST PROCEDURES AND STANDARDS (4 CFR 20 ET SEQ.) BUT FOR THE INTEREST AND INVOLVEMENT OF THE COURT OF APPEALS.

TO ARNOLD & PORTER, SEPTEMBER 25, 1972:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 19, 1972, AND PRIOR CORRESPONDENCE ON BEHALF OF SERV-AIR, INC., PROTESTING AGAINST THE AWARD OF TWO OPERATION AND MAINTENANCE CONTRACTS TO PAGE AIRCRAFT MAINTENANCE, INC., BY THE DEPARTMENT OF THE AIR FORCE.

AFTER FILING A PROTEST WITH OUR OFFICE, SERV-AIR FILED A MOTION WITH THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA FOR A PRELIMINARY INJUNCTION PENDING OUR DECISION. THAT MOTION WAS DENIED BY AN ORDER OF JUNE 30, 1972, IN CIVIL ACTION NO. 1237-72. LATER THAT SAME DAY, THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT, BY ORDER NO. 72-1616, ALSO DENIED SERV-AIR'S MOTION FOR AN INJUNCTION PENDING APPEAL. A HEARING ON THE APPEAL IS SCHEDULED FOR SEPTEMBER 25, 1972.

THE ORDER OF THE COURT OF APPEALS PROVIDED THAT A COPY SHOULD BE SENT TO OUR OFFICE AND APPEARS TO HAVE CONTEMPLATED THAT OUR DECISION WOULD BE INCLUDED IN THE COURT'S CONSIDERATION OF THE MATTER. CONSEQUENTLY, WE HAVE CONSIDERED ISSUES RAISED BY THE PROTEST WHICH, BUT FOR THE INTEREST AND INVOLVEMENT OF THE COURT OF APPEALS, WE WOULD HAVE DISMISSED AS UNTIMELY UNDER OUR INTERIM BID PROTEST PROCEDURES AND STANDARDS. 4 CFR 20, ET SEQ.

UPON REVIEW AND CONSIDERATION OF THE BID PROTEST ISSUES, WE CONCLUDE THAT NO BASIS EXISTS FOR SUSTAINING THE PROTEST AND, ACCORDINGLY, IT IS DENIED FOR THE REASONS WHICH FOLLOW.

SERV-AIR CONTENDS THAT PRICE WAS IMPROPERLY DELETED AS AN EVALUATION FACTOR FROM THE SOLICITATIONS AND THEN REINSTATED WITHOUT NOTICE BEING GIVEN TO SERV-AIR BY AMENDMENT OR OTHERWISE. TWO REQUESTS FOR PROPOSALS (RFPS) FOR THE AWARD OF FIXED-PRICE INCENTIVE CONTRACTS ARE INVOLVED HERE: RFP F41689-72-R-0128, FOR SERVICES AT VANCE AIR FORCE BASE, OKLAHOMA; AND RFP F41689-72-R-0129, FOR SERVICES AT SHEPPARD AIR FORCE BASE, TEXAS. AMENDMENT 0001 TO EACH RFP ADDED PRICE AS A SPECIFIC FACTOR IN SECTION "D" FOR THE EVALUATION OF PROPOSALS. AMENDMENT 0002 TO EACH RFP OVERCAME THE EFFECT OF THE EARLIER AMENDMENT IN THAT REGARD.

WHILE THE RFPS LACK A STATEMENT CONCERNING THE RELATIVE IMPORTANCE OF PRICE, THEY DO STATE THAT PRICE WOULD BE AN EVALUATION FACTOR. BOTH RFPS CONTAIN STANDARD FORM 33A, ENTITLED "SOLICITATION INSTRUCTIONS AND CONDITIONS," PARAGRAPH 10(A) OF WHICH STATES THAT AWARD WILL BE MADE TO THAT OFFEROR WHOSE OFFER IS MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. NONE OF THE AMENDMENTS TO THE RFPS CHANGED THIS PARAGRAPH. OFFERORS WERE, THEREFORE, ON NOTICE AT ALL TIMES THAT PRICE WOULD BE A FACTOR IN THE EVALUATION OF PROPOSALS AND THE AWARDING OF THE CONTRACTS.

THE PROCUREMENT ACTIVITY MAINTAINS THAT PRICE WAS ERRONEOUSLY INCLUDED AS AN EVALUATION FACTOR IN SECTION "D" OF THE RESPECTIVE RFPS, AS AMENDED, SINCE PARAGRAPH 3-501(B) SEC. DI) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), DEALING WITH THE FORMAT FOR SOLICITATIONS, INDICATES THAT ONLY FACTORS OTHER THAN PRICE ARE TO BE LISTED IN THAT PART OF A SOLICITATION DEALING WITH EVALUATION FACTORS. WE DO NOT AGREE WITH THIS INTERPRETATION. NOTHING IN THE ASPR PROVISION REQUIRES THE ELIMINATION OF PRICE AS A LISTED EVALUATION FACTOR. WHAT IS REQUIRED IS THE LISTING OF ALL FACTORS OTHER THAN PRICE WHICH ARE TO BE CONSIDERED IN THE EVALUATION OF PROPOSALS. WHILE THE RFPS INDICATED THAT PRICE WOULD BE CONSIDERED, SINCE PRICE WAS NOT LISTED IN SECTION "D" OF THE RFPS, OFFERORS WERE NOT INFORMED OF ITS RELATIVE IMPORTANCE VIS-A-VIS THE EVALUATION FACTORS WHICH WERE LISTED. THIS FAILURE TO SHOW THE RELATIVE IMPORTANCE OF PRICE IS CONTRARY TO THE LONGSTANDING VIEW OF OUR OFFICE THAT INTELLIGENT COMPETITION REQUIRES, AS A MATTER OF SOUND PROCUREMENT POLICY, THAT OFFERORS BE ADVISED OF THE EVALUATION FACTORS TO BE USED AND THE RELATIVE IMPORTANCE OF THOSE FACTORS. 49 COMP. GEN. 229(1969). WE BELIEVE THAT EACH OFFEROR HAS A RIGHT TO KNOW WHETHER THE PROCUREMENT IS INTENDED TO ACHIEVE A MINIMUM STANDARD AT THE LOWEST COST OR WHETHER COST IS SECONDARY TO QUALITY. COMPETITION IS HARDLY SERVED IF OFFERORS ARE NOT GIVEN ANY IDEA OF THE RELATIVE VALUES OF TECHNICAL EXCELLENCE AND PRICE. WE BELIEVE A COMPLAINT IS JUSTIFIED IF IN SUCH CIRCUMSTANCES A MATERIALLY SUPERIOR OFFER IS REJECTED IN FAVOR OF ONE OFFERING A LOWER PRICE. HOWEVER, THAT IS NOT THE CASE HERE. IT IS OUR UNDERSTANDING THAT THE AIR FORCE FOUND LITTLE DIFFERENCE IN THE TECHNICAL QUALITY OF THE OFFERS AT ISSUE. CONSEQUENTLY, AN AWARD SELECTION BASED ON PRICE DIFFERENCE CANNOT BE REGARDED AS PREJUDICIAL TO SERV-AIR AND THE FAILURE OF THE RFPS TO INDICATE THE RELATIVE WEIGHT OF PRICE AS AN EVALUATION FACTOR CANNOT AFFECT THE VALIDITY OF THE PROPOSED AWARDS.

SERV-AIR NEXT CONTENDS THAT THE PROCUREMENT ACTIVITY FAILED TO CONDUCT MEANINGFUL NEGOTIATIONS WITH RESPECT TO PRICE. IN SUPPORT OF THIS POSITION, SERV-AIR POINTS TO THE BREVITY OF THE NEGOTIATION MEETINGS; THE LACK OF SUBSTANCE ON THE POINT IN THE AIR FORCE'S CORRESPONDENCE; THE FACT THAT NO OFFER AND COUNTEROFFER EXCHANGE TOOK PLACE BETWEEN THE PARTIES; THAT IT WAS NOT GIVEN AN OPPORTUNITY TO DISCUSS PRICE; AND THAT IT WAS NOT TOLD THAT ITS PRICE WAS TOO HIGH.

SECTION 2304(G) OF TITLE 10 OF THE U.S.C. REQUIRES THAT WRITTEN OR ORAL DISCUSSIONS BE HELD WITH ALL OFFERORS WITHIN A COMPETITIVE RANGE. THE DURATION PER SE OF A NEGOTIATION SESSION IS BY NO MEANS DETERMINATIVE OF WHETHER MEANINGFUL DISCUSSIONS HAVE BEEN HELD. MOREOVER, WHILE RECOGNIZING THAT THE TERM NEGOTIATION (WHICH WE EQUATE TO DISCUSSIONS) GENERALLY IMPLIES A SERIES OF OFFERS AND COUNTEROFFERS WE HAVE NOT CONCLUDED THAT THE PRESENCE OF SUCH OFFERS AND COUNTEROFFERS IS ESSENTIAL FOR COMPLIANCE WITH 10 U.S.C. 2304(G). SEE B-164688, OCTOBER 2, 1968. 51 COMP. GEN. 621(1972), WE HELD THAT MEANINGFUL DISCUSSIONS HAD NOT BEEN PRECLUDED BY THE FACT THAT TECHNICAL PROPOSAL DEFICIENCIES HAD NOT BEEN BROUGHT TO THE ATTENTION OF AN OFFEROR. IN REACHING THAT CONCLUSION WE STATED THAT NO FIXED, INFLEXIBLE RULE COULD BE USED TO CONSTRUE THE REQUIREMENT FOR "WRITTEN OR ORAL DISCUSSIONS" BUT THAT SATISFACTION OF THE REQUIREMENT TURNED UPON THE PARTICULAR FACTS OF EACH INDIVIDUAL CASE. THEREFORE, IT IS OUR POSITION THAT THE CONTENT AND EXTENT OF DISCUSSIONS NEEDED TO SATISFY THE REQUIREMENTS OF 10 U.S.C. 2304(G) IS "A MATTER OF JUDGMENT PRIMARILY FOR DETERMINATION BY THE PROCURING AGENCY *** AND THAT SUCH DETERMINATION IS NOT SUBJECT TO QUESTION BY OUR OFFICE UNLESS CLEARLY ARBITRARY OR WITHOUT A REASONABLE BASIS," PROVIDED, OF COURSE, THAT THE DISCUSSIONS HELD DO NOT OPERATE TO THE BIAS OR PREJUDICE OF ANY COMPETITOR. ID. AT 31-32. SEE ALSO B-172946(1), DECEMBER 23, 1971.

THE MEMORANDA OF NEGOTIATIONS WITH RESPECT TO THE TWO PROCUREMENTS STATE, TO ONE DEGREE OR ANOTHER, THAT NO ATTEMPT WAS MADE TO NEGOTIATE INDIVIDUAL COST ELEMENTS. ON THE OTHER HAND, OFFERORS WERE AWARE OF THE COMPETITIVE NATURE OF THE PROCUREMENTS AND SERV-AIR IN PARTICULAR WAS CAUTIONED AT ONE POINT TO RESPOND ONLY TO THE STATEMENT OF WORK CONTAINED IN THE RFP AND NOT TO IMPUTE WORK TO THE PROCUREMENTS WHICH IT, AS THE INCUMBENT CONTRACTOR, MIGHT CONSIDER REQUIRED. IN ADDITION, ALL OFFERORS WERE AFFORDED AT LEAST ONE OPPORTUNITY WITH RESPECT TO EACH PROCUREMENT TO REVISE THEIR PRICE PROPOSALS. SERV-AIR TOOK ADVANTAGE OF THIS OPPORTUNITY AND THE OTHERS WHICH IT WAS AFFORDED BY REDUCING ITS PRICE. WHETHER A DIFFERENT RESULT WOULD HAVE BEEN OBTAINED BY THE HEAD-TO-HEAD BARGAINING WHICH SERV-AIR CLAIMS WAS REQUIRED IS CONJECTURAL.

IN THE CASE OF THE VANCE PROCUREMENT BOTH OFFERORS OFFERED BEST AND FINAL PRICES WHICH WERE BELOW THE GOVERNMENT'S ESTIMATE AND THERE IS NOTHING OTHERWISE IN THE ADMINISTRATIVE REPORTS WHICH INDICATES THAT THE PROCUREMENT ACTIVITY BELIEVED THAT THE PRICES OFFERED BY EITHER OFFEROR ON EITHER PROCUREMENT WERE UNREASONABLE. MOREOVER, IT SEEMS CLEAR THAT THE PROCUREMENT ACTIVITY BELIEVED, WITH RESPECT TO PRICE, THAT THE COMPETITIVE NATURE OF THE PROCUREMENTS, THE CLARIFICATION OF OFFERORS' TECHNICAL PROPOSALS, AND THE OPPORTUNITY TO REVISE PROPOSALS WOULD MAXIMIZE COMPETITION AND RESULT IN CONTRACTS WHICH ARE MOST ADVANTAGEOUS TO THE GOVERNMENT.

WE FIND NOTHING INCONSISTENT WITH ACHIEVING THE GOAL OF MAXIMIZED COMPETITION IN THIS PROCEDURE AND SINCE COMPETITION WAS WHAT 10 U.S.C. 2304(G) WAS DESIGNED TO OBTAIN, WE FIND NO BASIS FOR CONCLUDING THAT THE PURPOSE OF THAT STATUTE WAS NOT EFFECTUATED IN THE PRESENT CASE. (AN EXTENSIVE DISCUSSION OF THE LEGISLATIVE HISTORY OF THE STATUTE IS FOUND IN 51 COMP. GEN. 621(1972), PREVIOUSLY DISCUSSED.) MOREOVER, WE BELIEVE THAT THE OPPORTUNITY TO REVISE PRICES WHICH WAS AFFORDED TO OFFERORS CONSTITUTES, UNDER THE INSTANT CIRCUMSTANCES, DISCUSSIONS AS REQUIRED BY 10 U.S.C. 2304(G). FOR OTHER INSTANCES WHERE THE OPPORTUNITY TO REVISE A PROPOSAL PRICE CONSTITUTED DISCUSSIONS, SEE 51 COMP. GEN. 479(1972) AND ESPECIALLY B-172946(1), SUPRA, WHERE A REQUEST FOR BEST AND FINAL OFFERS WAS HELD TO BE DISCUSSIONS.

WE NOTE THAT ASPR 3-805.1(B) PERMITS ADVISING AN OFFEROR THAT HIS PRICE IS CONSIDERED TOO HIGH. THERE IS, HOWEVER, NO MANDATE WHICH COMPELS THE PROCUREMENT ACTIVITY TO OFFER SUCH ADVICE. FURTHER, 48 COMP. GEN. 722(1969), CITED BY SERV-AIR AS B-165261 FOR THE PROPOSITION THAT A REQUEST FOR A PRICE REDUCTION WITHOUT GIVING AN OFFEROR THE REASON FOR THE REQUEST DOES NOT CONSTITUTE MEANINGFUL DISCUSSIONS, IS NOT APPLICABLE HERE. IN THAT CASE, THE FAILURE TO ADVISE A PROSPECTIVE LESSOR THAT HIS PRICE OFFER CONCERNING ADDITIONAL RENT EXCEEDED THE LIMITATION ESTABLISHED BY THE ECONOMY ACT, 40 U.S.C. 278A, ET SEQ., ELIMINATED WHATEVER COMPETITION WAS INVOLVED IN THE PROCUREMENT AND LED DIRECTLY TO THE AWARD OF A SOLE SOURCE CONTRACT. THIS IS EXACTLY THE SITUATION THAT 10 U.S.C. 2304(G) WAS DESIGNED TO PRECLUDE. IT IS NOT, HOWEVER, THE SITUATION WHICH EXISTS IN THE INSTANT CASE.

SERV-AIR ALSO CONTENDS THAT NEGOTIATIONS WERE CONDUCTED WITH PAGE SUBSEQUENT TO THE TIME SERV-AIR WAS REQUIRED TO SUBMIT ITS BEST AND FINAL OFFER. THE KIDWELL AFFIDAVIT DENIES THAT SUCH WAS THE CASE AND THERE IS NOTHING TO INDICATE THAT MEETINGS WERE HELD WITH PAGE SUBSEQUENT TO MAY 1, 1972. WHAT APPARENTLY DID OCCUR, AT LEAST WITH RESPECT TO RFP-0128, IS THAT CUTOFF DATES WERE ESTABLISHED TO GIVE EACH OFFEROR THE SAME AMOUNT OF TIME AFTER DISCUSSIONS WERE HELD WITH HIM IN WHICH TO SUBMIT HIS BEST AND FINAL OFFER. THUS PAGE WAS PERMITTED TO SUBMIT ITS BEST AND FINAL OFFER ON MAY 3, 1972, 2 DAYS AFTER THE DEADLINE SET FOR SERV-AIR. WE BELIEVE THAT ASPR 3-805.1(B) REQUIRES THE ESTABLISHMENT OF A COMMON CUTOFF DATE. B-173427, MARCH 14, 1972. SEE, ALSO 50 COMP. GEN. 1(1970); B-174492, JUNE 1, 1972. HOWEVER, THERE IS, IN THIS INSTANCE, NO INDICATION IN THE RECORD THAT PAGE GAINED AN ADVANTAGE OR SERV-AIR SUFFERED PREJUDICE BECAUSE OF THE FACT THAT PAGE SUBMITTED ITS LAST REVISED PROPOSAL LATER THAN SERV- AIR. AT EACH STAGE IN EVALUATION, WITH RESPECT TO BOTH PROCUREMENTS, PAGE SUBMITTED THE LOWER PRICE PROPOSAL. THEREFORE, WE DO NOT FEEL THAT THE PROPRIETY OF THE AWARD IS AFFECTED.

SERV-AIR CONTENDS THAT THE PENDING ACQUISITION OF PAGE BY THE NORTHROP CORPORATION INFLUENCED THE GOVERNMENT'S DECISION TO AWARD THE CONTRACTS TO PAGE. THIS ACCUSATION IS DENIED BY THE PROCUREMENT ACTIVITY WHICH MAINTAINS THAT THE EVALUATION OF PAGE AND ITS PROPOSAL WAS BASED ON THE FIRM'S PAST PERFORMANCE UNDER CONTRACTS OF SIMILAR DIFFICULTY, ITS CORPORATE HISTORY, AND CORPORATE FINANCIAL PICTURE. WHILE THE PROCUREMENT ACTIVITY KNEW OF THE PENDING ACQUISITION, WE FIND NOTHING WHICH SUSTAINS SERV-AIR'S CONTENTION AND, THEREFORE, CANNOT ACCEPT IT.

TWO OTHER MATTERS RELATING TO THE PENDING PAGE-NORTHROP MERGER ARE RAISED BY SERV-AIR. THE FIRST IS THAT THE AIR FORCE SHOULD HAVE CONSIDERED THE ANTITRUST ASPECTS OF THE MERGER. IN THIS CONNECTION, SERV-AIR CITES A SERIES OF CASES WHEREIN, IT IS MAINTAINED, VARIOUS REGULATORY AGENCIES OF THE GOVERNMENT WERE REQUIRED TO CONSIDER THE ANTITRUST LAWS IN THE EXECUTION OF THEIR RESPONSIBILITIES EVEN THOUGH THEY WERE NOT DIRECTLY CONCERNED OTHERWISE WITH THOSE LAWS. WE BELIEVE THAT THE IMPOSITION OF SUCH A REQUIREMENT UPON THE CONTRACTING OFFICERS OF THE GOVERNMENT WOULD IMPOSE AN INTOLERABLE BURDEN AND INORDINATELY DELAY THE PROCUREMENT PROCESS. IN THE ABSENCE OF JUDICIAL AUTHORITY SPEAKING DIRECTLY TO THE POINT, WE PERCEIVE NO REASON WHY OUR OFFICE SHOULD ENDORSE SUCH A REQUIREMENT.

SECOND, ON THE ASSUMPTION THAT PAGE DISCLOSED ITS PRICES TO NORTHROP DURING THE COURSE OF THEIR MERGER NEGOTIATIONS, SERV-AIR MAINTAINS THAT PAGE INACCURATELY EXECUTED THE "CERTIFICATION OF INDEPENDENT PRICE DETERMINATION" IN ITS PROPOSAL. THAT CERTIFICATION REQUIRES, INTER ALIA, THAT THE "PRICES WHICH HAVE BEEN QUOTED IN THIS OFFER HAVE NOT BEEN KNOWINGLY DISCLOSED BY THE OFFEROR AND WILL NOT KNOWINGLY BE DISCLOSED BY THE OFFEROR *** DIRECTLY OR INDIRECTLY TO ANY OTHER OFFEROR OR TO ANY COMPETITOR." NORTHROP, IT IS MAINTAINED, WAS A COMPETITOR OF PAGE. ALTHOUGH THE POINT IS NOT PROVEN, SERV-AIR'S ASSUMPTION MAY BE GRANTED FOR THE SAKE OF ARGUMENT. EVEN SO, IT DOES NOT UNDERMINE THE AWARD IN OUR OPINION. NORTHROP WAS NOT AN OFFEROR ON EITHER OF THE PROCUREMENTS SINCE IT DID NOT SUBMIT ANY OFFERS. AND WHILE IT MAY HAVE BEEN A COMPETITOR OF PAGE, WE THINK EVEN SERV-AIR RECOGNIZES, AT PAGE 48 OF ITS MEMORANDUM OF LAW, THAT THE DISCLOSURE OF PRICE, IF MADE, WAS MADE FOR PURPOSES OF EFFECTUATING THE MERGER OF THE TWO FIRMS AND NOT FOR PURPOSES OF RESTRICTING COMPETITION - THE PROBLEM WHICH THE CERTIFICATION WAS DESIGNED TO ALLEVIATE. THEREFORE, WE DO NOT THINK THAT NORTHROP CAN BE REGARDED AS A COMPETITOR FOR THIS PROCUREMENT WITHIN THE CONTEXT OF THE CERTIFICATE LANGUAGE. FINALLY, SERV-AIR MAKES SEVERAL CONTENTIONS CONCERNING VIOLATIONS OF THE SERVICE CONTRACT ACT OF 1965, 41 U.S.C. 351, WHICH IT CLAIMS INVALIDATES THE AWARDED CONTRACTS. THE FIRST VIOLATION ALLEGED IS THE FAILURE TO ISSUE ANY WAGE DETERMINATION FOR SHEPPARD AND ONLY A PARTIAL DETERMINATION FOR VANCE. IN 51 COMP. GEN. 72(1971), AT PAGE 76, WE CONCLUDED WITH RESPECT TO THE FAILURE OF THE DEPARTMENT OF LABOR TO ISSUE A WAGE RATE DETERMINATION THAT:

IRRESPECTIVE OF WHETHER THIS OFFICE AGREES WITH THE REASONING ON WHICH THE DECISION NOT TO ISSUE A WAGE RATE DETERMINATION WAS MADE, IT IS OUR OPINION THAT SUCH DECISIONS ARE WITHIN THE DISCRETION OF THE DEPARTMENT OF LABOR IN EACH INDIVIDUAL CASE. WHERE, AS IN THE INSTANT CASE, THE DEPARTMENT DECLINES TO ISSUE A DETERMINATION, AND SUCH DECLINATION IS NOT ATTRIBUTABLE TO ANY MISFEASANCE OR NONFEASANCE ON THE PART OF THE CONTRACTING AGENCY, IT IS OUR FURTHER OPINION THAT THE FAILURE TO INCLUDE A WAGE RATE DETERMINATION IN THE RFP AND IN THE RESULTING CONTRACT WILL NOT AFFECT THE VALIDITY OF THE CONTRACT.

THIS HOLDING WAS FURTHER AMPLIFIED BY OUR STATEMENT, ALSO ON PAGE 76 OF THE DECISION, THAT:

WITH RESPECT TO YOUR CONTENTION THAT LABOR'S FAILURE TO ISSUE A DETERMINATION IS ATTRIBUTABLE TO THE CONTRACTING OFFICER'S FAILURE TO SUBMIT WAGE RATE INFORMATION WITH THE STANDARD FORM 98, THERE IS NOTHING IN THE RECORD AS SUBMITTED BY NAVY, OR IN THE REPORT FORWARDED TO THIS OFFICE BY THE DEPARTMENT OF LABOR, TO INDICATE THAT THE LACK OF WAGE RATE INFORMATION WITH THE STANDARD FORM 98 CONTRIBUTED TO, OR RESULTED IN, LABORS FAILURE TO ISSUE A WAGE RATE DETERMINATION. WE THEREFORE SEE NO MISFEASANCE OR NONFEASANCE ON NAVY'S PART IN ITS REQUEST FOR A WAGE RATE DETERMINATION WHICH MIGHT AFFECT THE VALIDITY OF THE CONTRACT AWARDED TO DYNALECTRON.

IN THE CASE OF THE SHEPPARD PROCUREMENT, THE STANDARD FORM 98, NOTICE OF INTENTION TO MAKE A SERVICE CONTRACT AND RESPONSE TO NOTICE, DATED NOVEMBER 4, 1971, SUBMITTED BY THE AIR FORCE TO THE DEPARTMENT OF LABOR HAD, AS AN ATTACHMENT, CURRENT PAYROLL DATA ON THE EMPLOYEES WORKING AT SHEPPARD. IN THE CASE OF THE VANCE PROCUREMENT, ITEM 7 OF THE STANDARD FORM 98 INDICATED THAT A CURRENT WAGE DETERMINATION WAS IN EFFECT AND THE SAME WAS ATTACHED. NO WAGE INFORMATION ON ALL THE EMPLOYEES AT VANCE WAS SUBMITTED BUT THE TRANSMITTAL LETTER ACCOMPANYING THE NOTICE DID INDICATE THAT THE CURRENT WAGE DETERMINATION REPRESENTED COVERAGE OF ONLY 11 OF SEVERAL HUNDRED CATEGORIES OF EMPLOYEES.

THERE HAS BEEN NO SHOWING WHATEVER THAT THE FAILURE OF LABOR TO ISSUE A WAGE DETERMINATION FOR SHEPPARD OR A COMPLETE DETERMINATION FOR VANCE WAS IN ANY WAY CONTRIBUTED TO, OR RESULTED FROM, THE FAILURE OF THE AIR FORCE TO INCLUDE WAGE RATE INFORMATION. CURRENT PAYROLL DATA WAS SUBMITTED WITH THE STANDARD FORM 98 FOR SHEPPARD. IN THE CASE OF THE VANCE PROCUREMENT, CURRENT PAYROLL DATA WAS NOT PROVIDED, CONTRARY TO THE LANGUAGE OF ASPR 12 -1005.2(A), BUT THIS MAY WELL HAVE BEEN THE RESULT OF THE LANGUAGE OF THE NOTICE FORM ITSELF WHICH IMPLIES THAT PAYROLL DATA OR OTHER INFORMATION NEED NOT BE PROVIDED WHERE THERE IS A CURRENT WAGE RATE, TO WIT: "(IF NO WAGE DETERMINATION IS CURRENTLY APPLICABLE, ATTACH WHATEVER INFORMATION IS AVAILABLE ON WAGES AND FRINGE BENEFITS BEING PAID IN THE LOCALITY)." ANY CASE, LABOR WAS AWARE THAT THE CURRENT WAGE RATE DETERMINATION COVERED ONLY SOME OF SEVERAL HUNDRED EMPLOYEE CATEGORIES. WE THINK IT REASONABLE TO CONCLUDE THAT IF IT HAD AN INTENT TO ISSUE AN EXPANDED DETERMINATION, IT WOULD HAVE REQUESTED ADDITIONAL INFORMATION. SUCH A REQUEST, HOWEVER, WAS NEVER MADE. IT IS OUR VIEW, THEREFORE, THAT THE VALIDITY OF THE CONTRACTS AWARDED TO PAGE IS NOT AFFECTED BY THE ACTION OF EITHER LABOR OR AIR FORCE.

THERE REMAINS ONLY THE CONTENTIONS THAT THE WAGES OFFERED BY PAGE IN ITS PROPOSAL FOR UNLISTED CATEGORIES OF EMPLOYEES AT VANCE SHOULD HAVE BEEN CONFORMED TO THE WAGES STATED IN THE DEPARTMENT OF LABOR PARTIAL WAGE RATE DETERMINATION, AND THAT THE STANDARDS FOR SUCH CONFORMANCE ARE SERV-AIR'S EXISTING WAGE RATES. THERE IS NOTHING IN THE LANGUAGE OF THE RFP OR LABOR REGULATION 29 CFR 4.6(B) WHICH IMPOSES SUCH A REQUIREMENT. IN ANY CASE, WE NOTE THAT THE REGULATION AND ASPR CONTRACT CLAUSE USE THE TERMS "CONTRACT" AND "CONTRACTOR" RATHER THAN "OFFER" AND "OFFEROR." WE BELIEVE THIS INDICATES THAT THE CONFORMING PROCESS IS A POST, NOT PRE, AWARD PROCEDURE. ACCORDINGLY, SERV-AIR'S CONTENTION REGARDING PAGE'S PROPOSED WAGE RATES AS COMPARED TO SERV AIR'S IS IRRELEVANT IN THIS CONTEXT. SERV- AIR HAS NOT DIRECTED OUR ATTENTION TO ANY PRECEDENT CONTRARY TO THIS POSITION AND, IN THE ABSENCE OF A CLEARER INDICATION THAT ITS CONTENTION IS SUPPORTABLE, WE FIND NO BASIS TO HOLD THAT THE PAGE PROPOSAL HAD TO CONTAIN CONFORMED WAGE RATES FOR UNLISTED EMPLOYEES OR THAT THE FAILURE TO DO SO RENDERED ITS PROPOSAL "NONRESPONSIVE." B-167250, NOVEMBER 13, 1969.