B-180044, APR 9, 1974

B-180044: Apr 9, 1974

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DOES NOT AUTHORIZE GOVERNMENT TO REVISE FUNDING AND OPTION DATES OF SOLICITATION IN RESPONSE TO PROPOSAL OFFERING SUPERIOR PRICING ADVANTAGE IS NOT SUPPORTED BY READING OF PROVISION AS A WHOLE. INC.: REQUEST FOR PROPOSALS (RFP) F09603-74-R-0078 WAS ISSUED BY THE DEPARTMENT OF THE AIR FORCE ON JULY 6. THE TRUCKS WERE TO BE IN ACCORDANCE WITH SPECIFICATION MIL-T -83219B WHICH ENVISIONS USE OF A COMMERCIALLY AVAILABLE TRUCK CHASSIS. MULTI-YEAR FUNDING DATES WERE INITIALLY ESTABLISHED AS FEBRUARY 1. MAINTAINS THAT THE FUNDING AND OPTION DATES OF THE RFP WERE IMPROPERLY CHANGED DURING THE COURSE OF THE PROCUREMENT. PROPOSALS WERE RECEIVED FOR THE REQUIREMENT ON SEPTEMBER 7. DISCUSSIONS WERE SUBSEQUENTLY HELD WITH THE OFFERORS.

B-180044, APR 9, 1974

OFFEROR'S ARGUMENT THAT ASPR 3-805.4(C), ALLOWING GOVERNMENT TO REVISE SOLICITATION WHEN PROPOSAL CONSIDERED TO BE MOST ADVANTAGEOUS TO THE GOVERNMENT INVOLVES DEPARTURE FROM STATED REQUIREMENTS, DOES NOT AUTHORIZE GOVERNMENT TO REVISE FUNDING AND OPTION DATES OF SOLICITATION IN RESPONSE TO PROPOSAL OFFERING SUPERIOR PRICING ADVANTAGE IS NOT SUPPORTED BY READING OF PROVISION AS A WHOLE. ARGUMENT, IF ACCEPTED, WOULD ALSO IMPAIR GOVERNMENT'S NEED FOR FLEXIBILITY IN RESPONDING TO ADVANTAGEOUS PROPOSALS AND WOULD CONTRAVENE MANDATE IN ASPR 3-801.1 FOR AWARDS AT FAIR AND REASONABLE PRICES RESULTING IN LOWEST ULTIMATE COST TO GOVERNMENT.

TO EASTERN TANK OF PEABODY, INC.:

REQUEST FOR PROPOSALS (RFP) F09603-74-R-0078 WAS ISSUED BY THE DEPARTMENT OF THE AIR FORCE ON JULY 6, 1973, UNDER MULTI-YEAR PROCUREMENT PROCEDURES FOR FISCAL YEAR (FY) 74, FY 75, AND FY 76 REQUIREMENTS OF FUEL SERVICING TANK TRUCKS. THE TRUCKS WERE TO BE IN ACCORDANCE WITH SPECIFICATION MIL-T -83219B WHICH ENVISIONS USE OF A COMMERCIALLY AVAILABLE TRUCK CHASSIS, MODIFIED AS NECESSARY TO MEET THE PERFORMANCE REQUIREMENTS OF THE SPECIFICATION. OPTION PROVISIONS IN THE SOLICITATION ALLOWED THE GOVERNMENT TO INCREASE THE QUANTITY ORDERED BY 50 PERCENT EACH FISCAL YEAR TO COVER ANY ADDITIONAL REQUIREMENTS. MULTI-YEAR FUNDING DATES WERE INITIALLY ESTABLISHED AS FEBRUARY 1, 1975, FOR FY 75 AND FEBRUARY 1, 1976, FOR FY 76.

EASTERN TANK OF PEABODY, INC. (EASTERN), MAINTAINS THAT THE FUNDING AND OPTION DATES OF THE RFP WERE IMPROPERLY CHANGED DURING THE COURSE OF THE PROCUREMENT. WE DISAGREE FOR THE REASONS STATED BELOW.

PROPOSALS WERE RECEIVED FOR THE REQUIREMENT ON SEPTEMBER 7, 1973, FROM EASTERN AND CONSOLIDATED DIESEL AND ELECTRIC CORPORATION (CONSOLIDATED). DISCUSSIONS WERE SUBSEQUENTLY HELD WITH THE OFFERORS.

THE CONTRACTING OFFICER REPORTS THAT DURING NEGOTIATIONS IT BECAME APPARENT THAT THE MODEL YEAR OF AN OFFEROR'S COMMERCIAL TRUCK CHASSIS WOULD SIGNIFICANTLY AFFECT THE OFFEROR'S PRICE; THAT MULTI-YEAR FUNDING ON THE INITIALLY ESTABLISHED DATES WOULD RESULT IN RECEIPT OF SUBSEQUENT MODEL YEAR CHASSIS AT HIGHER PRICES; BUT THAT BY FUNDING MULTI-YEAR REQUIREMENTS ON SEPTEMBER 1, 1974, AND SEPTEMBER 1, 1975, THE REQUIREMENTS COULD BE SATISFIED WITH EARLIER YEAR CHASSIS AT REDUCED PRICES.

CONSEQUENTLY, BY LETTER OF OCTOBER 5, 1973, THE CONTRACTING OFFICER NOTIFIED ALL PARTICIPATING FIRMS OF THE CHANGES IN THE MULTI-YEAR FUNDING DATES AND THE OPTION DATES WHICH, AS CORRELATED MATTERS, ALSO REQUIRED REALIGNMENT WITH CHASSIS MODEL YEAR PERIODS IN ORDER TO PERMIT REDUCED PRICING.

ON OCTOBER 11, 1973, EASTERN ADVISED THE CONTRACTING OFFICER THAT IT WAS NOT IN AGREEMENT WITH THE CHANGE IN THE FUNDING DATES. WHILE THE CONTRACTING OFFICER WAS CONSIDERING THIS ADVICE, OFFERORS SUBMITTED "BEST AND FINAL" OFFERS ON OCTOBER 15, 1973. ANALYSIS OF EASTERN'S COMPLAINT RESULTED IN A DETERMINATION NOT TO OPEN THE OFFERS.

THE CONTRACTING OFFICER CONCLUDED THAT THE ACCELERATION IN FUNDING DATES MIGHT PUT EASTERN AT A COMPETITIVE DISADVANTAGE BECAUSE ITS PRODUCT, UNLIKE CONSOLIDATED'S PRODUCT, WAS REQUIRED TO UNDERGO FIRST ARTICLE TESTING. BUT UPON FURTHER ANALYSIS, HE DECIDED THAT THIS DISADVANTAGE COULD BE ELIMINATED BY ALLOWING ANY OFFEROR TO BUY THE QUANTITY OF CHASSIS FOR THE SECOND YEAR PROGRAM ON SEPTEMBER 1, 1974, PROVIDED SATISFACTORY PROGRESS HAD BEEN MADE IN FIRST ARTICLE TESTING. AMENDMENT 0008 PROMULGATED THIS CHANGE IN FIRST ARTICLE PROCEDURE AND ESTABLISHED OCTOBER 29, 1973, AS THE DATE FOR RECEIPT OF "BEST AND FINAL" OFFERS. AMENDMENT 0009 WAS ISSUED AT EASTERN'S REQUEST EXTENDING THE TIME FOR RECEIPT OF FINAL OFFERS UNTIL NOVEMBER 5, 1973.

AFTER RECEIPT OF FINAL OFFERS, THE CONTRACTING OFFICER WAS TOLD THAT REQUIREMENTS HAD BEEN REDUCED FOR FY 74. THE CONTRACTING OFFICER REPORTS THAT AS A RESULT OF THIS DECISION, OPTIONS BECAME IMPORTANT; THAT IT WAS IMPERATIVE THAT REALISTIC OPTIONS BE ESTABLISHED; THAT A DETERMINATION WAS MADE TO INCLUDE THE OPTION PRICES IN THE EVALUATION FOR AWARD; AND THAT IN VIEW OF THE NUMBER OF AMENDMENTS ISSUED PREVIOUSLY AND THE NEED TO FURTHER AMEND THE RFP, HE DECIDED TO SUPERSEDE THE BASIC RFP AND ALL PRIOR AMENDMENTS BY A DEFINITIVE AMENDMENT INCORPORATING ALL CHANGES INTO ONE BASIC DOCUMENT. THIS DECISION WAS CARRIED OUT BY ISSUING AMENDMENT 0010 WITH THE ADVICE THAT BEST AND FINAL OFFERS WERE REQUIRED ON NOVEMBER 30, 1973.

EASTERN MAINTAINS THAT THE AMENDMENT IN THE FUNDING AND OPTION DATES WAS MADE ONLY AT THE SUGGESTION OF CONSOLIDATED; THAT THIS AMENDMENT PLACED EASTERN AT A COMPETITIVE DISADVANTAGE; AND THAT THE AMENDMENT WAS NOT AUTHORIZED BY THE PROCUREMENT REGULATIONS.

THE CONTRACTING OFFICER REPORTS THAT THE CHANGE WAS MADE ON THE BASIS OF THE DEPARTMENT'S OWN ANALYSIS OF THE COST DATA GENERATED DURING INITIAL NEGOTIATIONS; THAT THE ANALYSIS SHOWED FINANCIAL SAVINGS TO THE GOVERNMENT IF THE DATES WERE CHANGED; THAT THE CHANGE IN FIRST ARTICLE REQUIREMENTS REMOVED THE COMPETITIVE ADVANTAGE ACCRUING TO CONSOLIDATED AS A RESULT OF THE CHANGED DATES; AND THAT THE CHANGE IN DATES WAS CONSISTENT WITH ASPR 3 -801.1 WHICH PROVIDES:

"*** IT IS THE POLICY OF THE DEPARTMENT OF DEFENSE TO PROCURE SUPPLIES AND SERVICES FROM RESPONSIBLE SOURCES AT FAIR AND REASONABLE PRICES CALCULATED TO RESULT IN THE LOWEST ULTIMATE OVERALL COST TO THE GOVERNMENT. GOOD PRICING DEPENDS PRIMARILY UPON THE EXERCISE OF SOUND JUDGMENT BY ALL PERSONNEL CONCERNED WITH THE PROCUREMENT."

THE CONTRACTING OFFICER DOES NOT STATE WHETHER THE DATA WHICH INDICATED POTENTIAL SAVINGS BY CHANGING THE FUNDING DATES WAS FOUND ONLY IN THE SUCCESSFUL OFFEROR'S PROPOSAL AS SUGGESTED BY EASTERN. ASSUMING, FOR THE PURPOSE OF DISCUSSION, THAT THE DATA WAS FOUND ONLY IN CONSOLIDATED'S PROPOSAL, WE CANNOT CONSIDER THE CONTRACTING OFFICER'S DECISION TO AMEND THE RFP AS INCONSISTENT WITH ASPR 3 805.4(C) WHICH PROVIDES:

"WHEN A PROPOSAL CONSIDERED TO BE THE MOST ADVANTAGEOUS TO THE GOVERNMENT INVOLVES A DEPARTURE FROM THE STATED REQUIREMENTS, ALL OFFERORS SHALL BE GIVEN AN OPPORTUNITY TO SUBMIT *** AMENDED PROPOSALS *** ON THE BASIS OF THE REVISED REQUIREMENTS ***."

ALTHOUGH EASTERN URGES THAT "STATED REQUIREMENTS" AS FOUND IN THE PROVISION RELATES ONLY TO TECHNICAL REQUIREMENTS RATHER THAN ALL RFP REQUIREMENTS, INCLUDING ANY FUNDING OR OPTION DATES, THIS INTERPRETATION IS NOT SUPPORTED BY A READING OF THE PROVISION AS A WHOLE. FURTHER, WE DO NOT BELIEVE THE PROVISION SHOULD BE CONSTRUED SO NARROWLY. A NARROW INTERPRETATION WOULD IMPAIR THE GOVERNMENT'S NEED FOR FLEXIBILITY IN RESPONDING TO ADVANTAGEOUS PROPOSALS. CONSEQUENTLY, WE THINK "STATED REQUIREMENTS" REFERS TO ALL PROVISIONS OF THE RFP WHETHER RELATED TO TECHNICAL MATTERS OR NOT.

WE ALSO AGREE WITH THE DEPARTMENT'S VIEW THAT THE CHANGES WERE CONSISTENT WITH THE REQUIREMENT FOR AWARD AT FAIR AND REASONABLE PRICES AS SET FORTH IN ASPR 3-801.1, AND THAT THE SUBSEQUENT CHANGE IN FIRST ARTICLE SCHEDULING MINIMIZED TO THE EXTENT POSSIBLE ANY COMPETITIVE DISADVANTAGE PLACED ON EASTERN BY REASON OF THE CHANGES.

SINCE WE CANNOT CONCLUDE THAT THE CONTRACTING OFFICER IMPROPERLY AMENDED THE RFP, WE MUST ALSO DENY EASTERN'S ALTERNATIVE CLAIM FOR BID PREPARATION COSTS FOR THE PROCUREMENT.

THE PROTEST IS DENIED.