B-180448, APR 29, 1974

B-180448: Apr 29, 1974

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AS THAT TERM IS USED IN ADVERTISED PROCUREMENTS. IS NOT APPLICABLE TO NEGOTIATED PROCUREMENTS. CONSIDERATION OF OFFER TO ELIMINATE UNACCEPTABLE CLAUSE FROM PROPOSAL IS NOT PRECLUDED AS LATE MODIFICATION OF PROPOSAL UNDER ASPR WHERE NEGOTIATIONS HAD BEEN REOPENED. AS HE WAS UNABLE TO CONCLUDE THAT AWARD MAY BE INVALIDATED AND DELAY WOULD NOT BE PREJUDICIAL TO GOVERNMENT'S INTEREST AS PROVIDED IN REGULATION. THE CLOSING DATE FOR SUBMISSION OF PROPOSALS WAS SET FOR NOVEMBER 19. THE SERVICES WERE TO BE FURNISHED AS REQUIRED BY ISSUANCE OF INDIVIDUAL ORDERS UNDER THE CONTRACT. THE SCHEDULED COMMENCEMENT DATE WAS FEBRUARY 1. THREE AMENDMENTS WERE ISSUED. OFFERS WERE RECEIVED FROM RCA SERVICE COMPANY AND TELEDYNE RYAN AERONAUTICAL.

B-180448, APR 29, 1974

1. OFFEROR'S FAILURE TO LITERALLY COMPLY WITH PROVISION OF REQUEST FOR PROPOSALS CONCERNING EXPERIENCE REQUIREMENT DOES NOT REQUIRE REJECTION OF PROPOSAL WHERE PANEL OF TECHNICAL EXPERTS REASONABLY DETERMINES THAT OFFEROR HAS DEMONSTRATED IT HAS NECESSARY LEVEL OF TECHNICAL COMPETENCE REQUIRED. B-177280, JULY 16, 1973. 2. INCLUSION OF UNACCEPTABLE PROVISION IN RESPONSE TO REQUEST FOR PROPOSALS DOES NOT RESULT IN NONRESPONSIVE PROPOSAL. RESPONSIVENESS, AS THAT TERM IS USED IN ADVERTISED PROCUREMENTS, IS NOT APPLICABLE TO NEGOTIATED PROCUREMENTS, FOR LATITUDE INHERENT IN NEGOTIATION PERMITS OFFEROR TO REMEDY DEFECTS WHICH IF PRESENT IN BID UNDER ADVERTISING WOULD REQUIRE REJECTION OF BID. 3. CONSIDERATION OF OFFER TO ELIMINATE UNACCEPTABLE CLAUSE FROM PROPOSAL IS NOT PRECLUDED AS LATE MODIFICATION OF PROPOSAL UNDER ASPR WHERE NEGOTIATIONS HAD BEEN REOPENED. SINCE NEITHER STATUTES NOR REGULATIONS LIMIT EXTENT OF NEGOTIATIONS, GAO MAY NOT PROPERLY OBJECT TO CONTRACTING OFFICER'S DETERMINATION, TO REOPEN NEGOTIATIONS WHERE ONLY TWO BEST AND FINAL OFFERS RECEIVED CONTAINED UNACCEPTABLE PROVISIONS. 4. CONTRACTING OFFICER'S DENIAL OF REQUEST THAT WORK BE SUSPENDED PENDING RESOLUTION OF PROTEST BY GAO NOT AN ABUSE OF DISCRETION PERMITTED BY ASPR 2-407.8(C), AS HE WAS UNABLE TO CONCLUDE THAT AWARD MAY BE INVALIDATED AND DELAY WOULD NOT BE PREJUDICIAL TO GOVERNMENT'S INTEREST AS PROVIDED IN REGULATION.

TO TELEDYNE RYAN AERONAUTICAL:

THE PRESENT MATTER CONCERNS A PROTEST BY TELEDYNE RYAN AERONAUTICAL AGAINST THE AWARD TO RCA SERVICE COMPANY OF A CONTRACT FOR TECHNICAL SERVICES FOR AIR AND SURFACE LAUNCH OF TARGETS FOR AERIAL TARGET FLIGHTS, CALIBRATION SERVICES, AND OPERATIONAL AND MAINTENANCE DATA UNDER REQUEST FOR PROPOSALS (RFP) NO. N00612-74-D-0143, ISSUED BY THE NAVAL SUPPLY CENTER, CHARLESTON, SOUTH CAROLINA. NINE FIRMS RECEIVED COPIES OF THE RFP DATED OCTOBER 18, 1973. THE CLOSING DATE FOR SUBMISSION OF PROPOSALS WAS SET FOR NOVEMBER 19, 1973. THE RFP CALLED FOR AN INDEFINITE QUANTITY, FIRM-FIXED PRICE CONTRACT FOR A PERIOD OF ONE (1) YEAR, WITH AN OPTION TO RENEW FOR AN ADDITIONAL YEAR. THE SERVICES WERE TO BE FURNISHED AS REQUIRED BY ISSUANCE OF INDIVIDUAL ORDERS UNDER THE CONTRACT. THE SCHEDULED COMMENCEMENT DATE WAS FEBRUARY 1, 1974.

BEFORE THE CLOSING DATE FOR RECEIPT OF PROPOSALS, THREE AMENDMENTS WERE ISSUED, MAKING MINOR CHANGES AND ADDITIONS TO THE SOLICITATION. OFFERS WERE RECEIVED FROM RCA SERVICE COMPANY AND TELEDYNE RYAN AERONAUTICAL. RCA SUBMITTED THE LOW PRICE OF $500,547, WHILE TELEDYNE RYAN PROPOSED $619,625. ON NOVEMBER 20, 1973, A TECHNICAL EVALUATION OF THE PROPOSALS OF BOTH OFFERORS WAS COMPLETED BY THE ATLANTIC FLEET WEAPONS RANGE. BOTH PROPOSALS WERE DETERMINED TO BE TECHNICALLY ACCEPTABLE. AN AMENDMENT WAS ISSUED ON DECEMBER 20, 1973, TO ADD THE CURRENT MINIMUM WAGES AND FRINGE BENEFITS AND THE VALUE ENGINEERING INCENTIVE CLAUSE TO THE SOLICITATION AND ESTABLISH A NEW CLOSING DATE OF JANUARY 4, 1974. ON DECEMBER 21, 1973, NEGOTIATIONS WERE HELD WITH EACH OFFEROR. ON JANUARY 4, 1974, TIMELY BEST AND FINAL OFFERS WERE RECEIVED FROM BOTH OFFERORS. TELEDYNE RYAN REDUCED ITS PRICE TO $516,500, WHILE RCA DID NOT CHANGE ITS PRICE.

UPON RECEIPT OF THE BEST AND FINAL OFFERS FROM EACH OFFEROR, THE CONTRACTING OFFICER CONCLUDED THAT NEITHER OFFEROR HAD SUBMITTED AN ACCEPTABLE PROPOSAL. TELEDYNE HAD INCLUDED AN UNACCEPTABLE PROGRESS PAYMENT CLAUSE, WHILE RCA INCLUDED AN UNACCEPTABLE CLAUSE ENTITLED "GOVERNMENT RULINGS", WHICH CALLED FOR ADJUSTMENT OF THE CONTRACT PRICE UNDER SPECIFIED CIRCUMSTANCES.

ON JANUARY 7, 1974, NEGOTIATIONS WERE AGAIN HELD WITH BOTH OFFERORS CONCERNING THE UNACCEPTABLE CLAUSE EACH HAD INCLUDED IN ITS BEST AND FINAL OFFER. THESE NEGOTIATIONS RESULTED IN RCA AGREEING TO DELETE ITS "GOVERNMENT RULINGS" CLAUSE; HOWEVER, TELEDYNE REFUSED TO DELETE ITS REQUIREMENT FOR INCLUSION OF PROGRESS PAYMENT PROVISIONS. AS A RESULT OF THESE DISCUSSIONS, THE CONTRACTING OFFICER DETERMINED TO ESTABLISH A NEW COMMON CUT-OFF DATE FOR RECEIPT OF BEST AND FINAL OFFERS IN ORDER TO AFFORD BOTH OFFERORS THE SAME OPPORTUNITY FOR REVISIONS TO PRICE AND PROPOSAL PROVISIONS. JANUARY 10, 1974, WAS ESTABLISHED AS THE NEW CLOSING DATE FOR BEST AND FINAL OFFERS, AND ON THAT DATE TELEDYNE CONFIRMED ITS PRIOR PRICE, WHILE RCA'S LOT PRICE ALSO REMAINED SUBSTANTIALLY UNCHANGED ($500,546.50).

ON JANUARY 15, 1974, THE NSC CHARLESTON CONTRACT REVIEW BOARD MET, AND CONTRACT AWARD WAS RECOMMENDED TO RCA SERVICE COMPANY, WITH AN OPTION TO RENEW THE CONTRACT FOR AN ADDITIONAL PERIOD OF ONE YEAR. RCA WAS NOTIFIED OF AWARD ON JANUARY 15, 1974, AND THE CONTRACT MAILED AND DATED ON JANUARY 16, 1974. ON JANUARY 16, 1974, TELEDYNE NOTIFIED THE PROCURING ACTIVITY THAT IT WAS PROTESTING THE AWARD DECISION AND REQUESTED THAT AWARD BE HELD IN ABEYANCE PENDING RESOLUTION OF ITS PROTEST. THE PROCURING ACTIVITY INFORMED TELEDYNE THAT AWARD HAD ALREADY BEEN MADE. THE TELEDYNE PROTEST WAS RECEIVED BY OUR OFFICE ON JANUARY 17, 1974.

TELEDYNE'S PROTEST OF THE AWARD IS BASED ON THE FOLLOWING CONTENTIONS: (1) THE RCA TECHNICAL PROPOSAL DID NOT MEET THE REQUIREMENT OF THE RFP FOR THE LISTING OF AT LEAST 2 CURRENTLY EMPLOYED AND QUALIFIED TARGET REMOTE CONTROL OPERATORS; (2) THE RCA BEST AND FINAL OFFER OF JANUARY 4, 1974, WAS NONRESPONSIVE AND THE NEGOTIATIONS WERE IMPROPERLY EXTENDED TO ACCOMODATE RCA'S OTHERWISE "LATE MODIFICATION" OF JANUARY 10, 1974; AND (3) WORK UNDER THE CONTRACT SHOULD HAVE BEEN SUSPENDED PENDING RESOLUTION OF THE PROTEST.

SECTION "D" OF THE RFP PROVIDED FOR THE EVALUATION OF PROPOSALS, IN PART, AS FOLLOWS:

"EVALUATION CRITERIA: TECHNICAL PROPOSALS WILL BE EVALUATED ON THE BASIS OF THE FOLLOWING CRITERIA:

"C. THE AVAILABILITY OF QUALIFIED PERSONNEL CURRENTLY IN BIDDER'S EMPLOY FOR USE IN PERFORMANCE UNDER ANY RESULTANT CONTRACT.

"D. THE EXPERIENCE OF PERSONNEL CITED IN C. ABOVE, INCLUDING WHERE APPLICABLE, EXPERIENCE WHILE SERVING AS FLIGHT CREW MEMBERS IN LAUNCH AIRCRAFT AND/OR AS MEMBERS OF THE SURFACE LAUNCHING CREWS FOR THE BQM 34A/S/E AND T AERIAL TARGET SYSTEMS OR EQUIVALENT SYSTEMS OR EQUIPMENT."

THE RFP ALSO SPECIFICALLY PROVIDED THAT TECHNICAL PROPOSALS TO BE CONSIDERED ACCEPTABLE SHALL:

"CONTAIN THE NAME AND BRIEF EMPLOYMENT EXPERIENCE RESUMES OF AT LEAST TWO (2) CURRENTLY EMPLOYED AND QUALIFIED TARGET REMOTE CONTROL OPERATORS HAVING BQM-34A/S/E AND T OR EQUIVALENT EQUIPMENT EXPERIENCE WHO WILL BE UTILIZED TO PERFORM THESE FUNCTIONS UNDER ANY RESULTANT CONTRACT. EXPERIENCE SHOULD ENCOMPASS ABILITY TO CONTROL SINGLE OR MULTIPLE (UP TO 4) FLIGHTS OF AERIAL TARGETS, DRONES OR SIMILAR EQUIPMENT AT ALTITUDES TO AS LOW AS 50 FEET MSL AT SPEEDS WITHIN THE PERFORMANCE CAPABILITIES OF THE BQM-34A/S/T AND E AERIAL TARGETS."

IN RESPONSE TO THE ABOVE PROVISION OF THE RFP, RCA SUBMITTED THE RESUMES OF TWO REMOTE CONTROL OPERATORS WHO HAD EXPERIENCE AS DRONE OPERATORS WITH RCA AS RECENTLY AS AUGUST 1973, WHEN RCA'S CONTRACT AT TYNDALL AIR FORCE BASE FOR SERVICES SIMILAR TO THOSE CALLED FOR UNDER THE SUBJECT RFP EXPIRED. HOWEVER, BOTH WERE SELF-EMPLOYED AT THE TIME OF PROPOSAL SUBMISSION. BOTH REPORTEDLY HAD INDICATED THAT THEY WANTED TO REJOIN RCA AS SOON AS THEY COULD BE UTILIZED ON A DRONE CONTROL PROJECT.

WITH REGARD TO TELEDYNE'S POSITION THAT SINCE THE TWO OPERATORS PROPOSED BY RCA WERE NOT IN RCA'S EMPLOY AT THE TIME OF ITS OFFER, RCA DID NOT MEET THE CLEAR REQUIREMENT OF THE RFP, IT IS OUR OPINION THAT IT WAS PROPER FOR THE NAVY TO HAVE ACCEPTED THE RESUMES SUBMITTED BY RCA IN FULFILLMENT OF THE RFP REQUIREMENT. IT IS REPORTED THAT THIS REQUIREMENT WAS INCLUDED IN THE RFP IN RECOGNITION OF THE FACT THAT RECENT EXPERIENCE IN OPERATING THE DESIGNATED DRONE SYSTEMS WAS VITAL IN DETERMINING WHETHER AN OFFEROR HAD INDICATED A SUFFICIENT DEGREE OF EXPERIENCE AND ACCESS TO QUALIFIED PERSONNEL FOR ITS PROPOSAL TO BE DEEMED TO MEET A MINIMUM ACCEPTABLE LEVEL OF TECHNICAL COMPETENCE. IN THE OPINION OF THE PANEL OF TECHNICAL EXPERTS OF THE ATLANTIC FLEET WEAPONS RANGE RESPONSIBLE FOR THE TECHNICAL EVALUATION, RCA SATISFIED THE LEVEL OF TECHNICAL COMPETENCE REQUIRED BY PROPOSING TO REEMPLOY THE PERSONS NAMED IN THE RESUMES. WE NOTE IN THIS REGARD THAT THERE IS NO REQUIREMENT IN THE RFP THAT THE CONTRACTOR MUST ASSIGN THOSE WHOSE RESUMES ARE SUBMITTED TO THE WORK CONTEMPLATED. FACT, THE CONTRACTOR IS FREE TO REPLACE THOSE PERSONS WITH OTHER QUALIFIED PERSONNEL AND, INDEED, MAY BE REQUIRED TO DO SO AS A RESULT OF UNFORSEEN CIRCUMSTANCES AFFECTING THEIR AVAILABILITY. IT IS OUR VIEW, THEREFORE, THAT REJECTION OF RCA'S PROPOSAL FOR THE REASON CONTENDED WAS NOT REQUIRED. B-177280, JULY 16, 1973.

TELEDYNE NEXT CONTENDS THAT RCA'S PROPOSAL SHOULD HAVE BEEN REJECTED AS NONRESPONSIVE BECAUSE ITS BEST AND FINAL OFFER OF JANUARY 4, 1974, INCLUDED THE "GOVERNMENT RULINGS" CLAUSE PROVIDING FOR PRICE ESCALATION UNDER CERTAIN CIRCUMSTANCES.

RESPONSIVENESS IS A TERM OF ART TO DENOTE COMPLIANCE WITH ALL MATERIAL PROVISIONS OF A SOLICITATION ISSUED PURSUANT TO FORMAL ADVERTISING STATUTES AND REGULATIONS. SO DEFINED, IT IS NOT APPLICABLE TO NEGOTIATED PROCUREMENTS, FOR THE LATITUDE INHERENT IN NEGOTIATION PERMITS AN OFFEROR TO REMEDY DEFECTS IN A PROPOSAL WHICH IF PRESENT IN A BID UNDER FORMAL ADVERTISING WOULD REQUIRE REJECTION OF THE BID. B 174208, APRIL 6, 1972. THEREFORE, THE CONTRACTING OFFICER WAS NOT REQUIRED TO REJECT THE RCA PROPOSAL AS NONRESPONSIVE FOR INCLUSION OF THE OBJECTIONABLE PROVISION.

TELEDYNE ALSO CONTENDS THAT RCA'S OFFER OF JANUARY 10, 1974, TO OMIT ITS "GOVERNMENT RULINGS" CLAUSE SHOULD NOT HAVE BEEN CONSIDERED BECAUSE IT CONSTITUTED A LATE MODIFICATION OF ITS PROPOSAL UNDER ARMED SERVICES PROCUREMENT REGULATION (ASPR) 3-506, AND THAT THE REOPENING OF NEGOTIATIONS CONVERTED THE PROCUREMENT INTO AN AUCTION, WHICH IS STRICTLY PROHIBITED BY ASPR 3-805.1(B).

SINCE NEGOTIATIONS HAD BEEN REOPENED TO PERMIT BOTH RCA AND TELEDYNE TO CORRECT UNACCEPTABLE ASPECTS OF THEIR PROPOSALS, WE DO NOT CONSIDER THE LATE MODIFICATION PROVISIONS OF ASPR APPLICABLE. WITH REGARD TO THE PROPRIETY OF REOPENING NEGOTIATIONS, OUR OFFICE CONSIDERED THIS QUESTION IN B-176283(1), FEBRUARY 5, 1973, WHERE WE STATED, IN PERTINENT PART, THE FOLLOWING:

"NEITHER THE STATUTES GOVERNING THE CONDUCT OF NEGOTIATED PROCUREMENTS NOR THE IMPLEMENTING REGULATIONS CONTAIN ANY PROVISION LIMITING THE EXTENT OF NEGOTIATIONS WHICH MAY BE CONDUCTED PRIOR TO THE AWARD OF A NEGOTIATED CONTRACT. NEGOTIATING PROCEDURES, UNLIKE THOSE REQUIRED FOR FORMAL ADVERTISING ARE DESIGNED TO BE FLEXIBLE AND INFORMAL. THEREFORE, WE FEEL THAT OUR OFFICE MAY NOT PROPERLY OBJECT TO A CONTRACTING OFFICER'S DETERMINATION TO REOPEN NEGOTIATIONS IN THE ABSENCE OF A SHOWING THAT SUCH ACTION CONSTITUTES AN ABUSE OF DISCRETION OR WAS OTHERWISE CONTRARY TO THE BEST INTERESTS OF THE GOVERNMENT."

IN THE CIRCUMSTANCES HERE, WHERE BOTH PROPOSALS CONTAINED UNACCEPTABLE PROVISIONS, WE DO NOT BELIEVE THAT THE REOPENING OF NEGOTIATIONS WAS AN ABUSE OF DISCRETION. FINALLY, ALTHOUGH TELEDYNE HAS RAISED THE ISSUE OF AN AUCTION, IT HAS FAILED TO PROVIDE ANY EVIDENCE TO SUPPORT THE CHARGE. THEREFORE, WE CANNOT CONCLUDE THAT THE PROHIBITION AGAINST THE USE OF AUCTION TECHNIQUES WAS VIOLATED.

CONCERNING TELEDYNE'S REQUEST THAT WORK UNDER THE SUBJECT CONTRACT BE SUSPENDED PENDING THE RESOLUTION OF ITS PROTEST BY OUR OFFICE, ASPR 2 407.8(C) PERMITS THE CONTRACTING OFFICER TO SEEK A MUTUAL AGREEMENT WITH THE SUCCESSFUL OFFEROR TO SUSPEND INFORMATION ON A NO-COST BASIS WHEN IT APPEARS LIKELY THAT THE AWARD MAY BE INVALIDATED AND THE DELAY WOULD NOT BE PREJUDICIAL TO THE GOVERNMENT'S INTEREST. THE CONTRACTING OFFICER REJECTED THIS REQUEST AFTER AGENCY CONSIDERATION OF THE MERITS OF THE PROTEST AND AFTER DETERMINING THAT ANY DELAY IN PERFORMANCE WOULD BE A SERIOUS DETRIMENT TO THE ORDERLY TRANSITION FROM THE INCUMBENT CONTRACTOR TO RCA AND WOULD JEOPARDIZE CONTINUATION OF SCHEDULE FLIGHTS. WE BELIEVE THIS WAS A PROPER EXERCISE OF THE DISCRETION PERMITTED.

IN VIEW OF THE FOREGOING, THE PROTEST IS DENIED.