B-180853, APR 16, 1974, 53 COMP GEN 780

B-180853: Apr 16, 1974

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CONTRACTS - PROTESTS - ADMINISTRATIVE ACTIONS - FILING PROTEST - "ADVERSE AGENCY ACTION" CONCLUSION OFFEROR'S CONFERENCE WITH AGENCY ABOVE LEVEL OF CONTRACTING OFFICER AGAINST PROPOSED ADVERSE ACTION IS PROTEST TO AGENCY AND PROTEST BY OFFEROR TO GAO WITHIN 5 DAYS OF AGENCY DENIAL IS TIMELY. WHICH INTENTION WAS KNOWN TO PROTESTER. PROPOSALS ARE PUBLICLY OPENED AND PRICES DISCLOSED. 1974: THIS PROTEST WAS SUBMITTED BY THE RCA CORPORATION (RCA) AGAINST THE AWARD OF A CONTRACT FOR 294 MOBILE RADIOS BY THE IMMIGRATION AND NATURALIZATION SERVICE (IMMIGRATION) TO MOTOROLA. INVITATION FOR BIDS (IFB) CO-12 74 BECAUSE THE THREE BIDS RECEIVED WERE NONRESPONSIVE. ALSO OF NOTE IS THE FACT THAT RCA SUBMITTED A "NO BID" BECAUSE IT WOULD NOT ACCEPT THE LIQUIDATED DAMAGES PROVISION OF $85.00 PER UNIT PER DAY OF DELAY WITH NO LIMITATION AS TO TIME.

B-180853, APR 16, 1974, 53 COMP GEN 780

CONTRACTS - PROTESTS - ADMINISTRATIVE ACTIONS - FILING PROTEST - "ADVERSE AGENCY ACTION" CONCLUSION OFFEROR'S CONFERENCE WITH AGENCY ABOVE LEVEL OF CONTRACTING OFFICER AGAINST PROPOSED ADVERSE ACTION IS PROTEST TO AGENCY AND PROTEST BY OFFEROR TO GAO WITHIN 5 DAYS OF AGENCY DENIAL IS TIMELY. CONTRACTS - NEGOTIATION - LOWEST OFFER - AWARD BASIS WHERE AGENCY INTENDED TO TREAT RFP AS ADVERTISED SOLICITATION, WHICH INTENTION WAS KNOWN TO PROTESTER, AND PROPOSALS ARE PUBLICLY OPENED AND PRICES DISCLOSED, LOWEST RESPONSIBLE OFFEROR SHOULD BE CONSIDERED FOR AWARD WITHOUT INVOKING NEGOTIATION PROCEDURES.

IN THE MATTER OF RCA CORPORATION, APRIL 16, 1974:

THIS PROTEST WAS SUBMITTED BY THE RCA CORPORATION (RCA) AGAINST THE AWARD OF A CONTRACT FOR 294 MOBILE RADIOS BY THE IMMIGRATION AND NATURALIZATION SERVICE (IMMIGRATION) TO MOTOROLA, INC. (MOTOROLA), UNDER REQUEST FOR PROPOSALS (RFP) CO-15-74. PRIOR TO THE RFP, IMMIGRATION ISSUED, AND LATER CANCELED, INVITATION FOR BIDS (IFB) CO-12 74 BECAUSE THE THREE BIDS RECEIVED WERE NONRESPONSIVE. ALSO OF NOTE IS THE FACT THAT RCA SUBMITTED A "NO BID" BECAUSE IT WOULD NOT ACCEPT THE LIQUIDATED DAMAGES PROVISION OF $85.00 PER UNIT PER DAY OF DELAY WITH NO LIMITATION AS TO TIME.

ON FEBRUARY 15, 1974, A DETERMINATIONS AND FINDINGS (D&F) WAS EXECUTED TO AUTHORIZE THE USE OF NEGOTIATION PURSUANT TO 41 U.S.C. 252(C)(2) AND (C)(10), AS IMPLEMENTED BY FEDERAL PROCUREMENT REGULATIONS (FPP) 1- 3.202(A) AND 1-3.210(A)(1). THE FORMER SECTIONS PERMIT THE USE OF NEGOTIATION WHEN THE PUBLIC EXIGENCY WILL NOT TOLERATE THE DELAY INCIDENT TO FORMAL ADVERTISING BECAUSE THE RADIOS WERE REQUIRED BY AUGUST 13, 1974, FOR INSTALLATION IN MOTOR VEHICLES SCHEDULED FOR DELIVERY ON THAT DATE FOR BORDER PATROL DUTIES. THE SCHEDULE CONTEMPLATES DELIVERY 150 DAYS AFTER RECEIPT OF WRITTEN NOTICE TO PROCEED. WHILE THE LATTER SECTION, FPR 1- 3.210(A)(1), IS APPLICABLE WHEN THE PROPERTY CAN ONLY BE OBTAINED FROM A SOLE-SOURCE OF SUPPLY, WE BELIEVE THAT IMMIGRATION INTENDED TO CITE FPR 1- 3.210(A)(3) WHICH AUTHORIZES NEGOTIATION WHEN NO RESPONSIVE BIDS ARE RECEIVED UNDER AN IFB. OUR BELIEF IS BASED ON THE FACT THAT THE RFP WAS IN FACT COMPETITIVE AND THE FINDINGS OF THE D&F NOTES THE FACT THAT FORMAL ADVERTISING WAS NO LONGER FEASIBLE BECAUSE ALL BIDS RECEIVED ON IFB CO 12- 74 WERE NONRESPONSIVE.

IN ANY EVENT, RFP CO-15-74 WAS ISSUED ON FEBRUARY 15, 1974. PARAGRAPH 10 OF THE GENERAL CONDITIONS REVISED THE LIQUIDATED DAMAGES PROVISION OF THE IFB:

*** THE STIPULATED RATE FOR LIQUIDATED DAMAGES SHALL BE EIGHTY FIVE (85) DOLLARS PER UNIT PER CALENDAR DAY, EXCEPT THAT THE TOTAL DAILY DAMAGES RATE SHALL NOT EXCEED $200.00.

ALL THREE PROPOSALS RECEIVED TIMELY WERE PUBLICLY OPENED AND PRICES ANNOUNCED ON MARCH 5 TO REPRESENTATIVES OF THE COMPETITORS. RCA SUBMITTED THE LOW PRICE OF $372,009. THE INSTANT CONTROVERSY STEMS FROM THE STIPULATION CONTAINED IN THE RCA PROPOSAL THAT THE MAXIMUM LIABILITY IT WOULD ACCEPT FOR DELINQUENT DELIVERY WOULD BE $20,000, OR 100 CALENDAR DAYS. MOTOROLA SUBMITTED THE NEXT LOW PRICE OF $397,917. THE ASTRONAUTICS CORP. WAS NEXT LOW AT $536,025. ANOTHER PROPOSAL WAS NOT CONSIDERED BECAUSE IT WAS RECEIVED UNTIMELY.

INITIALLY, IT IS IMMIGRATION'S POSITION THAT THE PROTEST IS UNTIMELY UNDER OUR INTERIM BID PROTEST PROCEDURES AND STANDARDS (STANDARDS), BECAUSE THE BASIS FOR THE PROTEST, I.E., DISCLOSURE OF PRICES, WAS KNOWN TO RCA ON MARCH 5, BUT NOT PROTESTED UNTIL MARCH 18. ADDITIONALLY, IT IS NOTED THAT THE CONTRACTING OFFICER'S REPRESENTATIVE TELEPHONICALLY NOTIFIED RCA ON MARCH 8 THAT ITS PROPOSAL WAS NONRESPONSIVE DUE TO THE EXCEPTION TAKEN AS TO THE LIQUIDATED DAMAGES PROVISION. HOWEVER, UPON NOTIFICATION, RCA REQUESTED AND MET WITH THE ASSOCIATE COMMISSIONER ON MARCH 14 TO IMPRESS UPON IMMIGRATION THAT IT HAD THE AUTHORITY TO AWARD TO RCA IN VIEW OF ITS LOWER PRICE. IT IS STATED THAT A FINAL AGENCY DECISION WAS NOT RENDERED UNTIL MARCH 18. WE VIEW THIS MEETING AS A PROTEST TO THE AGENCY WITHIN THE CONTEXT OF SECTION 20.2(A) OF OUR STANDARDS (4 CFR). THEREFORE, SINCE THE RCA PROTEST WAS FILED WITH GAO WITHIN 5 DAYS OF NOTIFICATION OF ADVERSE AGENCY ACTION, IT IS TIMELY.

IT IS PROTESTER'S POSITION THAT, SINCE THIS WAS A NEGOTIATED PROCUREMENT, IMMIGRATION SHOULD AWARD TO RCA BECAUSE OF ITS LOWER PRICE NOTWITHSTANDING ITS EXCEPTION TO THE LIQUIDATED DAMAGES PROVISION. IN ITS LETTER OF MARCH 26, RCA STATED"*** BIDDING STRATEGY WAS BASED ON AN OFFER HAVING A PRICE LOW ENOUGH TO MERIT JUDGMENTAL CONSIDERATION EVEN IF OTHER BIDDERS' OFFERS WERE WITH NO EXCEPTIONS BUT AT HIGHER PRICES ***." ALTERNATIVELY, RCA REQUESTS THAT NEGOTIATIONS BE CONDUCTED UNDER THE RFP. IMMIGRATION'S RESPONSE IS THAT IT CONSIDERS RCA'S PROPOSAL NONRESPONSIVE AND INTENDS TO AWARD TO MOTOROLA. IMMIGRATION STATES THAT THE INTENT OF THE LIQUIDATED DAMAGES PROVISION WAS TO INSURE TIMELY DELIVERY OF THE RADIOS WHICH ARE CRITICAL TO ITS LAW ENFORCEMENT OPERATIONS AND MISSION.

WHILE AUTHORITY EXISTS TO NEGOTIATE THIS PROCUREMENT, IT SEEMS CLEAR THAT IMMIGRATION HAS TREATED THE PROCUREMENT AS THOUGH IT WERE FORMALLY ADVERTISED. CERTAINLY, PUBLIC OPENING OF PROPOSALS AND ANNOUNCEMENT OF PRICES IS ANATHEMA TO THE CONCEPT OF NEGOTIATED PROCUREMENT. SEE FPR 1 3.805-1. IT IS NOT DISPUTED THAT RCA KNEW BEFORE-HAND THAT IMMIGRATION INTENDED TO PUBLICLY OPEN PROPOSALS. IN FACT, IT IS STATED THAT THIS UNIQUE PROCUREMENT METHOD HAD BEEN USED PREVIOUSLY BY IMMIGRATION. THIS LIGHT, RCA MAY BE SAID TO HAVE ACQUIESED IN THE CONDUCT OF THE PROCUREMENT WHICH GAVE RISE TO THE PROTEST. HOWEVER, PROTESTER IS NOT OBJECTING TO THE METHOD OF PROCUREMENT.

IT IS OUR OPINION THAT THE PROTEST SHOULD BE RESOLVED IN A MANNER WHICH EFFECTS THE LEAST PREJUDICE TO RESPONDING OFFERORS. WE DO NOT BELIEVE THAT AWARD CAN BE MADE TO RCA UNDER THE RFP. SECTION 10(G) OF STANDARD FORM 33A, INCLUDED IN THE RFP, CAUTIONS OFFERORS THAT THE GOVERNMENT MAY MAKE AN AWARD BASED UPON THE INITIAL OFFERS RECEIVED WITHOUT DISCUSSIONS. THEREFORE, OFFERS SHOULD BE STATED IN THE MOST FAVORABLE TERMS FROM BOTH A PRICE AND TECHNICAL STANDPOINT.

INASMUCH AS PRICES HAVE BEEN EXPOSED, THE OPENING OF DISCUSSION AT THIS POINT WOULD CONSTITUTE AN AUCTION, WHICH IS CLEARLY PROHIBITED BY FPR 1- 3.805-1(B). THEREFORE, SINCE RCA WAS AWARE THAT PROPOSALS WOULD BE PUBLICLY OPENED, BUT MISINTERPRETED THE EFFECT THAT ITS EXCEPTION WOULD HAVE, WE DO NOT BELIEVE THAT RCA SHOULD NOW BE HEARD TO COMPLAIN OF THE PROCEDURE WHICH WORKS TO ITS DISADVANTAGE. SEE B-171482, MARCH 17, 1971. SINCE IMMIGRATION TREATED THE PROCUREMENT AS THOUGH IT WERE FORMALLY ADVERTISED, WE BELIEVE THAT THE PROCUREMENT SHOULD BE TREATED AS FORMALLY ADVERTISED AND AWARD SHOULD BE MADE TO THE LOWEST RESPONSIBLE OFFEROR WITHOUT DISCUSSIONS WITH ALL OFFERORS. SEE, FOR EXAMPLE, 52 COMP. GEN. 569 (1973).

THEREFORE, THE PROTEST IS DENIED.