B-179439, FEB 4, 1974

B-179439: Feb 4, 1974

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CLAIM FOR PROPOSAL PREPARATION COSTS BASED UPON CONTENTION THAT CLAIMANT WAS MISLED BY PROVISION IN RFP INDICATING THAT PROCUREMENT WAS TOTAL SMALL BUSINESS SET-ASIDE WHEN IT ACTUALLY WAS INTENDED TO BE UNRESTRICTED AS INDICATED BY SYNOPSIS IN COMMERCE BUSINESS DAILY AND RFP COVER SHEET IS DENIED. SINCE THERE IS NO INDICATION THAT PROPOSALS WERE NOT SOLICITED IN GOOD FAITH OR THAT THERE WAS ANY ACT ON PART OF CONTRACTING OFFICER WHICH COULD BE CONSIDERED ARBITRARY OR CAPRICIOUS. THIRTY-SIX SOLICITATION SETS WERE SENT TO FIRMS REQUESTING THEM. FIVE PROPOSALS WERE RECEIVED AND NEGOTIATIONS WERE CONDUCTED WITH ALL FIVE OFFERORS. THE BASIS OF NON-LINEAR'S CLAIM IS THAT IT WAS MISLED BY CLAUSE C22 IN THE RFP THAT STATED THAT THE PROCUREMENT WAS A TOTAL SMALL BUSINESS SET- ASIDE.

B-179439, FEB 4, 1974

CLAIM FOR PROPOSAL PREPARATION COSTS BASED UPON CONTENTION THAT CLAIMANT WAS MISLED BY PROVISION IN RFP INDICATING THAT PROCUREMENT WAS TOTAL SMALL BUSINESS SET-ASIDE WHEN IT ACTUALLY WAS INTENDED TO BE UNRESTRICTED AS INDICATED BY SYNOPSIS IN COMMERCE BUSINESS DAILY AND RFP COVER SHEET IS DENIED, SINCE THERE IS NO INDICATION THAT PROPOSALS WERE NOT SOLICITED IN GOOD FAITH OR THAT THERE WAS ANY ACT ON PART OF CONTRACTING OFFICER WHICH COULD BE CONSIDERED ARBITRARY OR CAPRICIOUS. SEE COURT CASES CITED.

TO NON-LINEAR SYSTEMS, INC.:

NON-LINEAR SYSTEMS, INC. (NON-LINEAR) SUBMITTED A CLAIM IN THE AMOUNT OF $3,500 FOR COSTS INCURRED IN THE PREPARATION OF A PROPOSAL IN RESPONSE TO REQUEST FOR PROPOSALS (RFP) DAAH01-73-R-1033.

THE U.S. ARMY MISSILE COMMAND ISSUED THE RFP ON APRIL 13, 1973, COVERING A QUANTITY OF DIGITAL VOLTMETERS. A SYNOPSIS OF THE RFP APPEARED IN COMMERCE BUSINESS DAILY, ISSUE NUMBER PSA 5791, DATED APRIL 3, 1973. THIRTY-SIX SOLICITATION SETS WERE SENT TO FIRMS REQUESTING THEM. FIVE PROPOSALS WERE RECEIVED AND NEGOTIATIONS WERE CONDUCTED WITH ALL FIVE OFFERORS.

THE BASIS OF NON-LINEAR'S CLAIM IS THAT IT WAS MISLED BY CLAUSE C22 IN THE RFP THAT STATED THAT THE PROCUREMENT WAS A TOTAL SMALL BUSINESS SET- ASIDE. THE CONTRACTING OFFICER HAS REPORTED THAT THE COMMERCE BUSINESS DAILY AND THE COVER PAGE OF THE SOLICITATION BOTH INDICATED THAT THE PROCUREMENT WAS UNRESTRICTED AND THROUGH INADVERTENCE THE SMALL BUSINESS SET-ASIDE PROVISION WAS NOT DELETED.

THE CLOSING DATE FOR RECEIPT OF PROPOSALS WAS MAY 18, 1973. ON MAY 21, THE CONTRACT NEGOTIATOR RECEIVED A CALL FROM NON-LINEAR INQUIRING WHETHER THE SOLICITATION WAS A 100-PERCENT SMALL BUSINESS SET-ASIDE. THE CONTRACT NEGOTIATOR SUBSEQUENTLY NOTIFIED NON-LINEAR THAT THE PROCUREMENT WAS OPEN TO BOTH LARGE AND SMALL BUSINESS, THAT NO SET ASIDE HAD BEEN INTENDED AND THAT CLAUSE C22 HAD BEEN INADVERTENTLY LEFT IN THE SOLICITATION.

NEGOTIATIONS CONTINUED SUBSEQUENT TO THIS NOTIFICATION WITH THE ACTIVE PARTICIPATION OF NON-LINEAR AND AWARD OF CONTRACT DAAH01-73-C 1145 WAS MADE TO THE LOW RESPONSIVE OFFEROR, DANA LABORATORIES, INC., ON JUNE 21, 1973.

BY LETTER DATED JUNE 27, 1973, NON-LINEAR PROTESTED TO THE PROCURING ACTIVITY THE AWARD OF THE CONTRACT AND CLAIMED REIMBURSEMENT OF PROPOSAL PREPARATION COSTS IN THE AMOUNT OF $3,500. BY LETTER DATED JULY 19, THE CONTRACTING OFFICER DENIED BOTH THE PROTEST AND THE CLAIM FOR REIMBURSEMENT. THE LETTER STATED:

"*** BASED UPON THE FACT THAT ANY APPARENT AMBIGUITY (RESULTING FROM THE INADVERTENT INCLUSION OF CLAUSE C22) WAS RESOLVED DURING NEGOTIATIONS, TO THE EXTENT YOUR PROTEST IS GROUNDED UPON A FAILURE OF THE GOVERNMENT TO AWARD TO A SMALL BUSINESS, IT IS HEREBY DENIED.

"WITH RESPECT TO YOUR HAVING BEEN INDUCED TO PREPARE A PROPOSAL BECAUSE OF CLAUSE C22, YOUR ATTENTION IS CALLED TO THE COVER SHEET OF THE RFP (DD FORM 1707) WHEREIN THE SOLICITATION IS CLASSIFIED AS UNRESTRICTED. ADDITION, THE COMMERCE BUSINESS DAILY (ISSUE NUMBER PSA 5791, APRIL 3, 1973) WHEREBY YOU LEARNED OF THE PROCUREMENT, CLEARLY LISTS THE PROCUREMENT AS NON-SET-ASIDE."

THE LETTER CONCLUDED:

"*** A CLOSER EXAMINATION ON YOUR PART WOULD HAVE RESOLVED THE APPARENT AMBIGUITY. HENCE, YOUR CLAIM FOR $3,500 IS DENIED. ***"

BY LETTER DATED AUGUST 8, 1973, NON-LINEAR APPEALED THE DENIAL OF THE CLAIM TO OUR OFFICE ON THE BASIS THAT IT JUSTIFIABLY RELIED UPON CLAUSE C22 WHICH INDICATED THAT THE SOLICITATION WAS A 100-PERCENT SET-ASIDE FOR SMALL BUSINESS. NON-LINEAR STATED THAT THE COVER SHEET AND THE SYNOPSIS IN THE COMMERCE BUSINESS DAILY WERE EXTRINSIC TO THE SOLICITATION AND THAT IT HAD A RIGHT TO RELY ON THE TOTAL SMALL BUSINESS SET-ASIDE PROVISION. NON-LINEAR ASSERTS THAT IF IT KNEW THAT LARGE BUSINESS WOULD ALSO BE ALLOWED TO COMPETE FOR THE PARTICULAR REQUIREMENTS IT WOULD NOT HAVE PREPARED A PROPOSAL FOR THE RFP. NON LINEAR THEREFORE SEEKS TO RECOVER ITS PROPOSAL PREPARATION COSTS WHICH IT ESTIMATES TO BE $3,500.

ALTHOUGH THE FEDERAL COURTS HAVE RECOGNIZED THAT OFFERORS ARE ENTITLED TO HAVE THEIR PROPOSALS CONSIDERED FAIRLY AND HONESTLY FOR AWARD AND THAT THE RECOVERY OF PROPOSAL PREPARATION EXPENSES IS POSSIBLE IF IT CAN BE SHOWN THAT PROPOSALS WERE NOT SO CONSIDERED, LACK OF GOOD FAITH, ARBITRARINESS OR CAPRICIOUSNESS MUST BE ESTABLISHED AS A PREREQUISITE TO RECOVERY. SEE HEYER PRODUCTS COMPANY INC. V. UNITED STATES, 140 F. SUPP. 409 (CT. CL. 1956); 177 F. SUPP. 251 (CT. CL. 1959); KECO INDUSTRIES, INC. V. UNITED STATES, 428 F.2D 1233 (CT. CL. 1970); AND CONTINENTAL BUSINESS ENTERPRISES, INC. V. UNITED STATES, 452 F.2D 1016 (CT. CL. 1971).

THERE IS NO INDICATION IN THE RECORD BEFORE US THAT PROPOSALS WERE NOT SOLICITED IN GOOD FAITH OR THAT THERE WAS ANY ACT ON THE PART OF THE CONTRACTING OFFICER WHICH COULD BE CONSIDERED ARBITRARY OR CAPRICIOUS.

ACCORDINGLY, THE CLAIM FOR PROPOSAL PREPARATION COSTS IS DENIED.