B-180292(1), JUN 5, 1974

B-180292(1): Jun 5, 1974

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

LOW OFFER PROPOSING DELIVERY "ON OR ABOUT DECEMBER 26" IN RESPONSE TO TELEGRAPHIC RFP "REQUESTING" DELIVERY FOR DECEMBER 21 SHOULD NOT BE REJECTED AS "NONRESPONSIVE" WHERE DISCUSSIONS WERE HELD WITH SUCCESSFUL OFFEROR SINCE UNDER NEGOTIATED PROCUREMENT OFFEROR IN COMPETITIVE RANGE SHOULD BE GIVEN OPPORTUNITY TO SATISFY GOVERNMENT'S REQUIREMENTS THROUGH DISCUSSIONS. EVEN WHERE ALL OFFERORS WERE INFORMED PRIOR TO CLOSING DATE FOR RECEIPT OF PROPOSALS THAT DECEMBER 21 DATE WAS MANDATORY. REQUIREMENT SHOULD BE RESOLICITED AND CONTRACT CANCELED IF CONTRACTOR UNDER RFP IS NOT LOW OFFEROR ON RESOLICITATION. THE RFP WAS ISSUED BY TELEGRAM ON DECEMBER 4. THE TELEGRAPHIC RFP STATES IN PERTINENT PART: "***DELIVERY IS REQUESTED FOR DECEMBER 21.

B-180292(1), JUN 5, 1974

LOW OFFER PROPOSING DELIVERY "ON OR ABOUT DECEMBER 26" IN RESPONSE TO TELEGRAPHIC RFP "REQUESTING" DELIVERY FOR DECEMBER 21 SHOULD NOT BE REJECTED AS "NONRESPONSIVE" WHERE DISCUSSIONS WERE HELD WITH SUCCESSFUL OFFEROR SINCE UNDER NEGOTIATED PROCUREMENT OFFEROR IN COMPETITIVE RANGE SHOULD BE GIVEN OPPORTUNITY TO SATISFY GOVERNMENT'S REQUIREMENTS THROUGH DISCUSSIONS, EVEN WHERE ALL OFFERORS WERE INFORMED PRIOR TO CLOSING DATE FOR RECEIPT OF PROPOSALS THAT DECEMBER 21 DATE WAS MANDATORY. THEREFORE, REQUIREMENT SHOULD BE RESOLICITED AND CONTRACT CANCELED IF CONTRACTOR UNDER RFP IS NOT LOW OFFEROR ON RESOLICITATION.

TO DPF INC.:

DPF INCORPORATED (DPF) HAS PROTESTED THE AWARD OF CONTRACT NO. 4 35556 TO ITEL CORPORATION (ITEL) UNDER A REQUEST FOR PROPOSALS (RFP) ISSUED BY THE UNITED STATES DEPARTMENT OF COMMERCE (COMMERCE). THE RFP WAS ISSUED BY TELEGRAM ON DECEMBER 4, 1973, PURSUANT TO THE AUTHORITY OF 41 U.S.C. 252(C)(2). IT REQUESTED PROPOSALS FOR THE LEASE AND MAINTENANCE OF AN IBM 360/65 CPU AND THE RENTAL OF AN IBM 3330 DISK UNIT OR EQUIVALENT. THE TELEGRAPHIC RFP STATES IN PERTINENT PART:

"***DELIVERY IS REQUESTED FOR DECEMBER 21, 1973. PLEASE CONTACT MR. *** FOR ADDITIONAL INFORMATION."

COMMERCE CONTENDS THAT ALL FIRMS WHICH CALLED WERE TOLD THAT PROPOSALS WERE DUE AT 3 P.M., DECEMBER 10, 1973, THAT AWARD WOULD BE MADE ON DECEMBER 14, 1973, AND THAT THE DECEMBER 21, 1973, DELIVERY DATE WAS MANDATORY. COMMERCE FURTHER STATES THAT THE IMPORTANCE OF DELIVERY, COST AND TECHNICAL RESPONSIVENESS WERE EMPHASIZED TO THESE INTERESTED FIRMS. IN ADDITION, COMMERCE CONTENDS THAT DPF'S FEDERAL REGIONAL MANAGER WAS SPECIFICALLY INFORMED PRIOR TO THE CLOSING DATE FOR RECEIPT OF PROPOSALS THAT THE EXACT DELIVERY DATE WAS A MANDATORY REQUIREMENT. ON THE OTHER HAND, DPF SPECIFICALLY DENIES THAT IT OR ITS AGENTS WERE EVER INFORMED THAT THE EXACT DATE OF DECEMBER 21, 1973, WAS MANDATORY.

BY THE CLOSING DATE FOR RECEIPT OF PROPOSALS, 12 PROPOSALS WERE RECEIVED. DPF OFFERED TO LEASE THE EQUIPMENT FOR $25,306 PER MONTH FOR 24 MONTHS WITH A CERTAIN OPTION TO DECREASE ITS PRICE TO $24,906 PER MONTH. HOWEVER, DPF OFFERED DELIVERY "ON OR ABOUT DECEMBER 26, 1973." COMMERCE STATES THAT IT THEREFORE REJECTED DPF'S PROPOSAL AS "NONRESPONSIVE" BECAUSE THE PROPOSAL DID NOT RESPOND TO THE MANDATORY DELIVERY DATE AND OFFERED NO DEFINITE DELIVERY DATE. DISCUSSIONS WERE HELD ONLY WITH ITEL.

ON DECEMBER 12, 1973, AFTER A TELEPHONIC INQUIRY AS TO THE RFP'S STATUS, DPF SENT A TELEGRAM TO CLARIFY ITS PROPOSAL IN WHICH IT STATED THAT ITS SUPPLIERS WERE ABLE TO MEET THE DELIVERY SCHEDULE REQUIRED. HOWEVER, THIS TELEGRAM WAS NOT RECEIVED IN THE CONTRACTING OFFICE DUE TO ITS MISHANDLING IN COMMERCE'S MAIL ROOM. COMMERCE AWARDED THE CONTRACT TO ITEL FOR A TOTAL COST OF $26,100 PER MONTH FOR 24 MONTHS.

IT IS AN ELEMENTARY PRINCIPLE IN NEGOTIATED PROCUREMENTS THAT WHERE PREAWARD DISCUSSIONS ARE HELD, AN INITIAL UNACCEPTABLE PROPOSAL SHOULD NOT BE DISCARDED IF IT IS IN THE COMPETITIVE RANGE; THAT IS, REASONABLY SUBJECT TO BEING MADE THE MOST ACCEPTABLE THROUGH DISCUSSIONS. 170731(1), JULY 21, 1971; 51 COMP. GEN. 247 (1971); 51 COMP. GEN. 431 (1972); B-174125, MARCH 28, 1972. THE RIGID RULES OF BID RESPONSIVENESS IN FORMALLY ADVERTISED PROCUREMENTS DO NOT APPLY TO NEGOTIATED PROCUREMENTS. INDEED, IN SUCH PROCUREMENTS, "NONRESPONSIVENESS" IS ORDINARILY CONSIDERED TO BE A SUBJECT OF NEGOTIATION. 51 COMP. GEN. 247, 250.

IN THE PRESENT CASE, DPF WAS NEVER GIVEN THE OPPORTUNITY AFTER THE CLOSING DATE FOR RECEIPT OF PROPOSALS TO CORRECT ITS OFFERED DELIVERY DATE IN ORDER TO MAKE ITS LOW PROPOSAL ACCEPTABLE. EVEN CONCEDING THAT ALL OFFERORS WERE INFORMED PRIOR TO THE CLOSING DATE FOR RECEIPT OF PROPOSALS THAT THE DECEMBER 21 DELIVERY DATE WAS MANDATORY, WE BELIEVE THAT COMMERCE STILL HAD AN OBLIGATION TO CONDUCT DISCUSSIONS WITH DPF TO GIVE IT THE OPPORTUNITY TO MEET THE DECEMBER 21 DELIVERY DATE.

THEREFORE, WE CONCLUDE THAT THE CONTRACT WAS IMPROPERLY AWARDED TO ITEL. THE REQUIREMENT SHOULD BE RESOLICITED IMMEDIATELY AND AWARD MADE THEREON AT WHICH TIME THE PRESENT CONTRACT MAY BE CANCELED PURSUANT TO ARTICLE XXIV OF THE CONTRACT WHICH PERMITS CANCELLATION UPON 30 DAYS NOTICE TO THE CONTRACTOR. WE DO NOT BELIEVE IT APPROPRIATE IN THE PRESENT CASE TO CANCEL THE CONTRACT AND AWARD IT TO DPF, RATHER THAN RESOLICITING THE REQUIREMENT, BECAUSE THE CONTRACT AS WRITTEN INCLUDES PROVISIONS, SUCH AS THE LIQUIDATED DAMAGES CLAUSE, TO WHICH THE RFP DID NOT MAKE REFERENCE BUT WHICH COULD WELL HAVE MATERIALLY AFFECTED THE OFFERORS' PRICES HAD THEY BEEN ON NOTICE OF THESE PROVISIONS.

SINCE THIS DECISION CONTAINS A RECOMMENDATION FOR CORRECTIVE ACTION TO BE TAKEN, IT IS BEING TRANSMITTED BY LETTERS OF TODAY TO THE CONGRESSIONAL COMMITTEES NAMED IN SECTION 232 OF THE LEGISLATIVE REORGANIZATION ACT OF 1970, 31 U.S.C. 1172.