B-180734, MAY 31, 1974

B-180734: May 31, 1974

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MEANINGFUL NEGOTIATIONS WERE HELD. WHERE RECORD SHOWS THAT OFFEROR WAS AFFORDED AN OPPORTUNITY TO REVISE ITS PROPOSAL AFTER TELEPHONE DISCUSSION WITH GOVERNMENT OFFICIALS CONCERNING DEFICIENCIES AND WEAKNESSES OF ITS INITIAL PROPOSAL AND OTHER OFFEROR WITHIN COMPETITIVE RANGE WAS SIMILARLY TREATED. IT IS NOT REQUIRED THAT OFFEROR BE HELPED THROUGH SUCCESSIVE ROUNDS OF NEGOTIATION TO BRING ORIGINAL INADEQUATE PROPOSAL TO LEVEL OF OTHER ADEQUATE PROPOSALS OR THAT NEGOTIATIONS NECESSARILY BE FACE-TO-FACE. A REQUEST FOR PROPOSALS (RFP) WAS ISSUED BY THE DEPARTMENT OF COMMERCE (THE DEPARTMENT). WHICH WILL BE FLOWN ABROAD THE TIROS-N SATELLITE. THE PURPOSE OF THE TOVS/BSU IS TO MEASURE "*** THE RADIANCE NEEDED TO OBTAIN TEMPERATURE PROFILES OF THE ATMOSPHERE FROM THE PLANETARY SURFACE UP INTO THE STRATOSPHERE IN CLEAR OR PARTIALLY CLOUDY SKY.".

B-180734, MAY 31, 1974

MEANINGFUL NEGOTIATIONS WERE HELD, AS REQUIRED BY FPR 1-3.805-1(A) AND (B), WHERE RECORD SHOWS THAT OFFEROR WAS AFFORDED AN OPPORTUNITY TO REVISE ITS PROPOSAL AFTER TELEPHONE DISCUSSION WITH GOVERNMENT OFFICIALS CONCERNING DEFICIENCIES AND WEAKNESSES OF ITS INITIAL PROPOSAL AND OTHER OFFEROR WITHIN COMPETITIVE RANGE WAS SIMILARLY TREATED. FURTHERMORE, IT IS NOT REQUIRED THAT OFFEROR BE HELPED THROUGH SUCCESSIVE ROUNDS OF NEGOTIATION TO BRING ORIGINAL INADEQUATE PROPOSAL TO LEVEL OF OTHER ADEQUATE PROPOSALS OR THAT NEGOTIATIONS NECESSARILY BE FACE-TO-FACE.

TO GULTON INDUSTRIES, INCORPORATED:

ON AUGUST 14, 1973, A REQUEST FOR PROPOSALS (RFP) WAS ISSUED BY THE DEPARTMENT OF COMMERCE (THE DEPARTMENT), FOR THE DESIGN, PRODUCTION, AND TESTING OF THE BASIC SOUNDING UNIT (BSU), FOR THE TIROS OPERATIONAL VERTICAL SOUNDER (TOVS), WHICH WILL BE FLOWN ABROAD THE TIROS-N SATELLITE, SCHEDULED FOR LAUNCH BY THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA) IN 1977. THE PURPOSE OF THE TOVS/BSU IS TO MEASURE "*** THE RADIANCE NEEDED TO OBTAIN TEMPERATURE PROFILES OF THE ATMOSPHERE FROM THE PLANETARY SURFACE UP INTO THE STRATOSPHERE IN CLEAR OR PARTIALLY CLOUDY SKY." THE ORIGINAL DESIGN DEFINITION STUDY FOR THE TOVS WAS PERFORMED BY GULTON INDUSTRIES, INCORPORATED (GULTON).

OFFERS WERE RECEIVED FROM GULTON, BALL BROTHERS RESEARCH CORPORATION (BALL BROS.) AND HONEYWELL, INCORPORATED. THE SOURCE EVALUATION BOARD RECOMMENDED THAT THE CONTRACT BE AWARDED TO BALL BROTHERS WITHOUT ANY NEGOTIATION BECAUSE ITS PROPOSAL WAS CONSIDERED TECHNICALLY THE BEST AND LOWEST IN ESTIMATED COSTS. HOWEVER, THE CONTRACTING OFFICER DECIDED TO CONDUCT DISCUSSIONS AND MADE ARRANGEMENTS WITH GULTON AND BALL BROTHERS FOR A TELEPHONE CONFERENCE "*** TO DISCUSS THE DEFICIENCIES AND WEAKNESSES OF THE RESPECTIVE PROPOSALS." (IT HAD BEEN DETERMINED THAT HONEYWELL WAS NOT IN A COMPETITIVE RANGE BECAUSE OF A "VERY LARGE PRICE DIFFERENTIAL.") ON JANUARY 23, 1974, TELEPHONE CONFERENCES WERE CONDUCTED. ACCORDING TO THE ADMINISTRATIVE REPORT, THE ITEMS DISCUSSED WITH GULTON RELATED TO "*** (1) DEFICIENCIES IN THE PROPOSAL WHICH REQUIRED CHANGES AND (2) WEAKNESSES WHICH REQUIRED CLARIFICATION ***", WHILE THE DISCUSSION WITH BALL BROTHERS "*** RELATED ONLY TO WEAKNESSES WHICH REQUIRED CLARIFICATION."

AT THE CONCLUSION OF THE TELEPHONE CONFERENCES EACH FIRM WAS REQUESTED TO REVISE ITS TECHNICAL AND COST PROPOSALS, AS APPROPRIATE, BASED ON THE TECHNICAL DEFICIENCIES AND WEAKNESSES OF THE RESPECTIVE PROPOSALS AS DISCUSSED DURING THE TELEPHONE CONFERENCES. A WRITTEN CONFIRMATION OF THE TELEPHONE CONFERENCE WAS SENT BY TELEGRAM ON JANUARY 25, 1974. THIS TELEGRAM STATED THAT BEST AND FINAL OFFERS WERE TO BE SUBMITTED BY FEBRUARY 4, 1974. REVISED PROPOSALS WERE SUBMITTED BY BOTH FIRMS, AND AFTER RE-EVALUATION, IT WAS DETERMINED THAT THE BALL BROTHERS' PROPOSAL WAS STILL SUPERIOR TECHNICALLY AND LOWER IN ESTIMATED COSTS. WE WERE ADVISED ON APRIL 1, 1974, THAT AWARD WAS BEING MADE TO BALL BECAUSE OF SCHEDULED PROGRAM MILESTONE IMPERATIVES AND GREATLY INCREASED COSTS EXPECTED FROM ANY DELAY BEYOND THAT DATE.

BASED UPON OUR REVIEW OF THE RECORD, AS DISCUSSED BELOW, WE FIND NO BASIS FOR DISTURBING THE AWARD TO BALL.

GULTON CONTENDS THAT FEDERAL PROCUREMENT REGULATIONS (FPR) 1-3.805 1(A) AND (B), CONCERNING WRITTEN OR ORAL DISCUSSIONS APPLICABLE TO NEGOTIATED PROCUREMENTS, WERE VIOLATED BY THE CONTRACTING OFFICER. IN THIS CONNECTION, IT IS CONTENDED THAT NO NOTIFICATION OF NEGOTIATIONS WAS GIVEN; THAT GULTON WAS DIRECTED DURING THE TELEPHONE CONFERENCE TO RESUBMIT THE TECHNICAL AND COST VOLUMES OF ITS PROPOSAL BASED UPON COMPLEX CHANGES WITHOUT A CONFIRMING AMENDMENT TO THE RFP; AND THAT MEANINGFUL NEGOTIATIONS WERE NOT CONDUCTED BECAUSE THEY WERE NOT ON A "FACE-TO-FACE" BASIS. IT IS GULTON'S POSITION THAT "FACE-TO-FACE" NEGOTIATIONS WOULD HAVE RESULTED IN ELIMINATION OF PROPOSAL DEFICIENCIES SUCH AS ITS THEORETICAL APPROACH TO "STATE-OF-THE-ART" REQUIREMENTS, QUESTIONS RAISED AS TO THE ADEQUACY OF CERTAIN OF ITS FACILITIES, DOWNGRADING IN THE PRODUCT ASSURANCE AREA, PENALIZING GULTON'S PROPOSAL OF AN INCENTIVE/BONUS PLAN FOR THE FEE, LACK OF A GOOD MANAGEMENT ASSOCIATION WITH ITS MAJOR SUBCONTRACTOR, AND DOWNGRADING OF ITS DISCUSSION ON DETECTORS. ADDITION, IT IS CONTENDED THAT THE EVALUATION FAILED TO INCLUDE CONSIDERATION OF CERTAIN GULTON EXPERIENCE WHICH MAKES IT THE BEST QUALIFIED TO PERFORM THE CONTRACT.

AS STATED, THE DEPARTMENT REPORTS THAT GULTON WAS GIVEN ORAL ADVANCE NOTICE OF THE NEGOTIATION THROUGH ITS WASHINGTON REPRESENTATIVE.

AS FOR GULTON'S CONTENTION THAT A COMPLEX CHANGE HAD BEEN ORDERED BY DEPARTMENT OFFICIALS DURING THE JANUARY 23, 1974 TELEPHONE CONVERSATION AND THAT NO WRITTEN AMENDMENT WAS SENT CONFIRMING THE TELEPHONIC CHANGE ADVICE, THERE IS NO INFORMATION IN THE RECORD TO INDICATE THAT ANY CHANGE WAS MADE IN THE RFP REQUIREMENTS. ACCORDING TO THE ADMINISTRATIVE REPORT, DURING THE TELEPHONE CONVERSATION GULTON WAS "*** REQUESTED TO CORRECT MAJOR DEFICIENCIES IN ITS PROPOSAL ***" TO CONFORM WITH THE STATED REQUIREMENTS. A TELEGRAM, DATED JANUARY 25, CONFIRMING THE FACT THAT TELEPHONE NEGOTIATIONS WERE CONDUCTED, WAS SENT TO GULTON, AND, AS REQUIRED BY FPR 1-3.805-1(B), INCLUDED NOTICE THAT GULTON'S BEST AND FINAL OFFER MUST BE SUBMITTED BY FEBRUARY 4, 1974.

IT IS OUR VIEW THAT THE RECORD FAILS TO SUPPORT GULTON'S CONTENTION THAT MEANINGFUL DISCUSSIONS WERE NOT HELD. THE RECORD REVEALS THAT THE INITIAL EVALUATION OF PROPOSALS WAS CONDUCTED BY THE SEB, TECHNICAL AND MANAGEMENT COMMITTEES, AND CONSULTANTS, CONSISTING OF 20 INDIVIDUALS, AND THAT THEIR EVALUATIONS WERE IN ACCORDANCE WITH THE EVALUATION FACTORS AND ASSIGNED WEIGHTS STATED IN THE RFP. AS A RESULT, GULTON'S TECHNICAL AND MANAGEMENT PROPOSALS RECEIVED A NUMERICAL SCORE, ON A SCALE OF 100, OF 77.97, AS COMPARED TO BALL'S SCORE OF 89.70. THE EVALUATORS CONCLUDED THAT GULTON'S TECHNICAL PROPOSAL CONTAINED MAJOR DEFICIENCIES WITH RESPECT TO ENVIRONMENTAL TESTING, PRODUCT ASSURANCE, SCANNER DESIGN, ENGINEERING MODEL, AND OUT-OF-BAND RESPONSE. THE EVALUATORS' REPORTS ALSO SHOW THAT CONSIDERATION WAS GIVEN TO GULTON'S FACILITIES, BASED UPON FIRST HAND INFORMATION OF SOME OF THE EVALUATORS, GULTON'S EXPERIENCE, AND THE FEASIBILITY OF ITS THEORETICAL APPROACH. IN ADDITION TO TECHNICAL AND MANAGEMENT CONSIDERATIONS, AN EXTENSIVE EVALUATION OF GULTON'S PROPOSED COSTS WAS MADE, AND IT WAS CONCLUDED THAT GULTON'S CONSIDERABLY HIGHER PROPOSED COSTS WOULD BE IMPACTED AND INCREASED IN EXCESS OF $100,000, BY CORRECTION OF THE DEFICIENCIES IN GULTON'S PROPOSAL.

NEVERTHELESS, THE CONTRACTING OFFICER AND A TECHNICAL REPRESENTATIVE OF THE DEPARTMENT CONTACTED BALL AND GULTON BY TELEPHONE AND REPORTEDLY ADVISED 2 GULTON REPRESENTATIVES OF THE DEFICIENCIES AND WEAKNESSES OF ITS PROPOSAL, ALLOWED THE CONVERSATION TO BE RECORDED, AND INVITED FURTHER CONTACT IF ANY CLARIFICATION OF THE CONFERENCE WAS NECESSARY. GULTON RESPONDED BY THE DATE FOR SUBMISSION OF BEST AND FINAL OFFERS WITH REVISIONS TO ITS TECHNICAL AND COST PROPOSALS OF MORE THAN 40 PAGES. UPON RE-EVALUATION BY DEPARTMENT TECHNICAL PERSONNEL IT WAS CONCLUDED THAT ALTHOUGH GULTON HAD SATISFACTORILY RESOLVED SOME DEFICIENCIES AND/OR WEAKNESSES, THERE STILL REMAINED A NUMBER OF AREAS CONSIDERED DEFICIENT OR WEAK. WHILE GULTON'S SCORE INCREASE AS A RESULT OF THE REVISIONS WAS 4.58, TO 82.55, AS COMPARED TO BALL'S INCREASE OF 1.50, TO 91.20, THE COST INCREASE WAS ALMOST EQUAL AND BALL MAINTAINED ITS TECHNICAL SUPERIORITY AND CONSIDERABLE COST ADVANTAGE. ALTHOUGH THE NEGOTIATIONS REQUIRED BY FPR 1-3.805-1 MUST BE MEANINGFUL, WE HAVE RECOGNIZED THAT THE NEGOTIATION PROCESS IS NECESSARILY FLEXIBLE IN THAT CONTRACTING OFFICERS HAVE BROAD DISCRETION IN DETERMINING THE NATURE AND SCOPE OF THE NEGOTIATIONS. 170181, FEBRUARY 22, 1971. ALTHOUGH OFFERORS WITHIN THE COMPETITIVE RANGE MUST GENERALLY BE ADVISED OF THE AREAS IN WHICH IT IS BELIEVED THEIR PROPOSALS ARE DEFICIENT OR WEAK, 50 COMP. GEN. 117 (1970), IT IS NOT REQUIRED THAT AN OFFEROR BE HELPED THROUGH SUCCESSIVE ROUNDS OF NEGOTIATION TO BRING ITS ORIGINAL INADEQUATE PROPOSAL UP TO THE LEVEL OF OTHER ADEQUATE PROPOSALS. 51 COMP. GEN. 621 (1972). IN THE INSTANT CASE, WHERE BOTH OFFERORS WITHIN THE COMPETITIVE RANGE WERE SIMILARLY TREATED WITH RESPECT TO THE DISCUSSIONS AND AFFORDED AN OPPORTUNITY TO SUBMIT REVISED PROPOSALS, WE BELIEVE THE REQUIREMENT FOR MEANINGFUL NEGOTIATIONS WAS MET. FURTHERMORE, AS FOR GULTON'S CONTENTION THAT "FACE-TO-FACE" NEGOTIATIONS MUST BE HELD, "*** THERE IS NO MANDATORY REQUIREMENT THAT DISCUSSIONS OF AN OFFEROR'S PROPOSAL BE CONDUCTED IN AN ACTUAL SIT-DOWN CONFERENCE WITH PROCUREMENT OFFICIALS." B 177008(2), JANUARY 31, 1973. ALTHOUGH IN A PARTICULAR SITUATION "FACE TO-FACE" NEGOTIATIONS MIGHT BE NECESSARY IN ORDER TO HAVE MEANINGFUL NEGOTIATIONS, SEE B-177008, SUPRA; 52 COMP. GEN. 466, 468 (1973), THERE IS NOTHING IN THE RECORD OF THE INSTANT CASE TO INDICATE THAT THE LACK OF "FACE-TO-FACE" NEGOTIATIONS RESULTED IN A LACK OF MEANINGFUL COMPETITION.

FINALLY, AS TO GULTON'S CONTENTION THAT IT WAS ERRONEOUSLY LED BY THE CONTRACTING AGENCY TO MINIMIZE THE IMPORTANCE OF COSTS AND PLACE GREATER IMPORTANCE ON THE AREAS OF TECHNICAL QUALIFICATIONS AND EXPERIENCE, WE FIND NO EVIDENCE IN THE RECORD TO SUPPORT THIS CHARGE. FURTHERMORE, WE NOTE THAT ARTICLE V OF THE RFP STATED THE EVALUATION FACTORS AND THEIR RELATIVE IMPORTANCE AND THEY APPEAR TO HAVE BEEN PROPERLY APPLIED IN THE EVALUATIONS.

ACCORDINGLY, THE PROTEST IS DENIED.