B-181079, NOV 8, 1974, 54 COMP GEN 363

B-181079: Nov 8, 1974

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OFFERED APPROXIMATE REQUIREMENTS RECORD DOES NOT SUPPORT CONTENTION THAT SPECIFICATIONS IN NEGOTIATED PROCUREMENT PRECLUDED CONSIDERATION OF DESIGN PROPOSED BY SUCCESSFUL OFFEROR BECAUSE SUCH DESIGN WAS NOT SPECIFICALLY CALLED FOR. AS SPECIFICATIONS WERE PERFORMANCE TYPE. CONTRACTS - NEGOTIATION - COMPETITION - DISCUSSION WITH ALL OFFERORS REQUIREMENT - TECHNICAL TRANSFUSION OR LEVELING FAILURE OF AGENCY IN NEGOTIATED PROCUREMENT TO INCLUDE REFERENCE TO PARTICULAR DESIGN IN QUESTIONS/CLARIFICATIONS PROPOUNDED TO UNSUCCESSFUL OFFEROR IS NOT OBJECTIONABLE AS GENERAL ACCOUNTING OFFICE HAS HELD WHERE. AGENCY IS INTERESTED IN OFFEROR'S INDEPENDENT APPROACH AND THERE IS RISK OF DISCLOSING ONE OFFEROR'S APPROACH TO ANOTHER OFFEROR.

B-181079, NOV 8, 1974, 54 COMP GEN 363

CONTRACTS - SPECIFICATIONS - CONFORMABILITY OF EQUIPMENT, ETC., OFFERED APPROXIMATE REQUIREMENTS RECORD DOES NOT SUPPORT CONTENTION THAT SPECIFICATIONS IN NEGOTIATED PROCUREMENT PRECLUDED CONSIDERATION OF DESIGN PROPOSED BY SUCCESSFUL OFFEROR BECAUSE SUCH DESIGN WAS NOT SPECIFICALLY CALLED FOR, AS SPECIFICATIONS WERE PERFORMANCE TYPE, LEAVING EXACT DESIGN AND APPROACH TO MEET PERFORMANCE PARAMETERS TO INVENTIVENESS AND INGENUITY OF OFFERORS. CONTRACTS - NEGOTIATION - COMPETITION - DISCUSSION WITH ALL OFFERORS REQUIREMENT - TECHNICAL TRANSFUSION OR LEVELING FAILURE OF AGENCY IN NEGOTIATED PROCUREMENT TO INCLUDE REFERENCE TO PARTICULAR DESIGN IN QUESTIONS/CLARIFICATIONS PROPOUNDED TO UNSUCCESSFUL OFFEROR IS NOT OBJECTIONABLE AS GENERAL ACCOUNTING OFFICE HAS HELD WHERE, AS HERE, AGENCY IS INTERESTED IN OFFEROR'S INDEPENDENT APPROACH AND THERE IS RISK OF DISCLOSING ONE OFFEROR'S APPROACH TO ANOTHER OFFEROR, TECHNICAL DISCUSSIONS MAY BE CURTAILED. CONTRACTS - NEGOTIATION - EVALUATION FACTORS - FACTORS OTHER THAN PRICE - TECHNICAL ACCEPTABILITY IN VIEW OF AGENCY'S PRIMARY RESPONSIBILITY WITH RESPECT TO DETERMINATIONS OF HIGHLY TECHNICAL NATURE, GENERAL ACCOUTING OFFICE WILL NOT DISTURB AWARD WHERE RECORD REASONABLY SUPPORTS ADMINISTRATIVE DETERMINATION THAT SUCCESSFUL OFFEROR'S TECHNICAL APPROACH WAS BEST OPERATIONAL AND MOST COST EFFECTIVE METHOD. CONTRACTS - BUY AMERICAN ACT - CANADIAN PURCHASES CONTENTION THAT AWARD TO CANADIAN FIRM WOULD VIOLATE ARMED SERVICES PROCUREMENT REGULATION 6-502(D) IS NOT SUPPORTED WHERE EVIDENCE PRESENTED DOES NOT DEMONSTRATE THAT "PERFORMANCE IN CANADIAN GOVERNMENT OWNED OR CONTROLLED INSTALLATIONS" IS CONTEMPLATED. CONTRACTORS - RESPONSIBILITY - DETERMINATION BY CONTRACTING OFFICER - ACCEPTED - EXCEPT FOR FRAUD PROTEST QUESTIONING OFFEROR'S EXPERIENCE RELATES TO MATTER OF RESPONSIBILITY AS DEFINED IN ARMED SERVICES PROCUREMENT REGULATION 1 903, AND WILL NOT BE CONSIDERED SINCE CONTRACTING OFFICER DETERMINED OFFEROR RESPONSIBLE AND GENERAL ACCOUNTING OFFICE HAS DISCONTINUED PRACTICE OF REVIEWING BID PROTESTS OF CONTRACTING OFFICER'S AFFIRMATIVE RESPONSIBILITY DETERMINATIONS, EXCEPT FOR ACTIONS BY PROCURING OFFICIALS WHICH ARE TANTAMOUNT TO FRAUD.

IN THE MATTER OF OCEAN DESIGN ENGINEERING CORPORATION, NOVEMBER 8, 1974:

REQUEST FOR PROPOSALS (RFP) N00123-73-R-1641, INVOLVING THE DESIGN AND FABRICATION OF A MOTION COMPENSATION AND DECK HANDLING SYSTEM (MCSHA) FOR THE REMOTE UNMANNED WORK SYSTEM (RUWS), ON A COST REIMBURSEMENT BASIS, WAS ISSUED APRIL 17, 1973, BY THE NAVAL REGIONAL PROCUREMENT OFFICE, LOS ANGELES, CALIFORNIA. SEVENTEEN PROSPECTIVE OFFERORS WERE FURNISHED COPIES OF THE SOLICITATION AND THREE PROPOSALS WERE RETURNED. ACCORDING TO THE NAVY, AFTER A TECHNICAL REVIEW OF THE PROPOSALS, IT WAS DETERMINED THAT A MAJOR REVISION OF THE SPECIFICATIONS WOULD BE REQUIRED "*** TO CHANGE THEM FROM SPECIFIC SYSTEM SPECIFICATIONS TO GENERAL PERFORMANCE SPECIFICATIONS TO ALLOW PROSPECTIVE BIDDERS TO BETTER USE THEIR CREATIVE ENGINEERING CAPABILITIES TO OBTAIN A LIGHTER, SIMPLER, MORE RELIABLE AND COST EFFECTIVE SYSTEM ***" AND TO INCLUDE CERTAIN OTHER REVISIONS RECOMMENDED BY A CONSULTANT GROUP.

A NEW SOLICITATION, RFP N00123-74-R-0347, CONTAINING THE REVISED SPECIFICATIONS, WAS ISSUED ON SEPTEMBER 17, 1973, AND SENT TO 17 PROSPECTIVE OFFERORS. THE FOLLOWING FOUR FIRMS RETURNED PROPOSALS:

OCEAN DESIGN ENGINEERING, LONG BEACH, CA *$463,560.00

TECHWEST ENTERPRISES, LTD., VANCOUVER, B.C $540,539.00

(WITH OPTIONS $567,359.00)

OCEAN SCIENCE AND ENGINEERING, LONG BEACH, CA $940,106.00

AAI CORPORATION, BALTIMORE, MD $1,130,090.00

*$338,614.00 PLUS $74,946.00 FOR QUALITY CONTROL, WHICH WAS QUOTED SEPARATELY; ALL OTHER PROPOSALS ALSO INCLUDE QUALITY CONTROL COSTS.

AFTER INITIAL EVALUATION OF ALL FOUR PROPOSALS, "QUESTIONS/CLARIFICATIONS" WERE SUBMITTED TO ALL OFFERORS EXCEPT AAI CORPORATION. ACCORDING TO THE NAVY, THE OFFERORS RESPONDED IN SUFFICIENT DETAIL TO NEGATE THE NEED FOR FURTHER DISCUSSION.

ON APRIL 10, 1974, OCEAN DESIGN WAS ADVISED BY NAVY PERSONNEL THAT AWARD WAS BEING MADE TO TECHWEST ENTERPRISES, A CANADIAN FIRM. BY LETTER OF THE SAME DATE, OCEAN DESIGN PROTESTED TO THIS OFFICE. AS THE PRIMARY BASIS FOR ITS PROTEST, OCEAN DESIGN CONTENDS THAT IN EVALUATING THE PROPOSALS THE NAVY CONSIDERED TWO FACTORS WHICH WERE OMITTED FROM THE REVISED SPECIFICATIONS AND THE SUBSEQUENT LIST OF QUESTIONS AND CLARIFICATIONS; NAMELY, (1) THAT THE HANDLING SYSTEM SHOULD ROTATE, AND (2) THAT THE HANDLING SYSTEM MUST BE EASILY ROAD-TRANSPORTABLE IN REMOTE AREAS OF THE WORLD. OCEAN DESIGN STATES THAT THE ORIGINAL RFP REQUIRED A ROTATING CRANE SYSTEM AND ITS ORIGINAL PROPOSAL MET THAT REQUIREMENT. HOWEVER, SINCE THE SECOND RFP DID NOT SPECIFY ANY REQUIREMENT FOR THE CRANE TO ROTATE, ACCORDING TO OCEAN DESIGN ITS RESPONSE TO THE REVISED SPECIFICATIONS WAS "*** BASED ON THE DESIGN OF A FAR MORE COST EFFECTIVE TRANSLATING CRANE SYSTEM, AND THIS DESIGN WAS FULLY RESPONSIVE TO THE REVISED SPECIFICATIONS." IN THIS CONNECTION, THE PROTESTER CONTENDS THAT IF ROTATION HAD A SIGNIFICANT IMPACT ON THE EVALUATION IT EITHER SHOULD HAVE BEEN INCLUDED AS A REQUIREMENT OF THE SPECIFICATIONS OR IT SHOULD HAVE BEEN INCLUDED IN THE LIST OF QUESTIONS/CLARIFICATIONS. AS FOR THE REQUIREMENT FOR AIR TRANSPORTABILITY WITHIN THE CONFINES OF CERTAIN AIRCRAFT, OCEAN DESIGN CONTENDS THAT ITS DESIGN MET THIS REQUIREMENT. FINALLY, OCEAN DESIGN POINTS OUT THAT ITS PROPOSED COSTS WERE THE LOWEST AND ARGUES THAT "IF THESE UNDISCLOSED FACTORS WEIGHED SIGNIFICANTLY IN THE EVALUATION, ***" THEN IT IS ENTITLED TO AN OPPORTUNITY TO RESPOND TO THE "TRUE REQUIREMENTS OF THIS PROCUREMENT."

IN RESPONSE, THE NAVY STATES THAT THE REVISED SPECIFICATIONS DID NOT SPECIFY THAT THE GOVERNMENT DESIRED A NONROTATING DESIGN OR THAT IT WOULD NOT RECOGNIZE OR CONSIDER THE OBVIOUS ADVANTAGES OF A ROTATING SYSTEM. THE NAVY CONTINUES:

IN FACT, THE REVISED SPECIFICATIONS INCLUDED A ROTATING UNIT IN EVERY EXAMPLE SHOWN; E.G., FIGURE 1 WHICH SHOWS THE RUWS SYSTEM CONCEPT, FIGURES 2, 3, 4, AND 5 WHICH SHOW THE VARIOUS DECK PLAN ARRANGEMENTS FOR THE RUWS- SYSTEM, AND FIGURE 10 WHICH SHOWS A CONCEPTUAL DESIGN OF THE RUWS-MCDHS. FURTHERMORE, THE SPECIFICATIONS WERE REVISED TO ACCEPT ANY DESIGN FOR CONSIDERATION, ROTATING OR NOT, WITH THE EXPECTATION THAT THE GOVERNMENT WOULD RECEIVE SPECIFIC PROPOSALS THAT WOULD BEST MEET THE PERFORMANCE SPECIFICATIONS AND PROVIDE FOR THE SAFE HANDLING, STORAGE AND TENDING OF THE RUWS VEHICLE AND PCT, AND THE PRIMARY CABLE AND OTHER KEY OPERATIONAL REQUIREMENTS; E.G., RAPID DEPLOYABILITY, MOTION COMPENSATION IN UP TO HIGH SEA STATE 4 CONDITIONS, A CONTROL CONSOLE THAT WOULD GIVE THE CRANE OPERATOR A CLEAR VIEW OF THE REEL UNIT AND "LIFT PACKAGE" FROM PLACEMENT ON DECK TO ENTRY INTO THE WATER, AIR TRANSPORTABILITY ABOARD C-141 AIRCRAFT, ETC. THE DESIGN SUBMITTED BY OCEAN DESIGN, AS SUPPLEMENTED BY THEIR REPLIES TO QUESTIONS/CLARIFICATIONS, WAS CONSIDERED TO BE ACCEPTABLE, BUT THE FINAL EVALUATION REVEALED THAT THE ROTATING UNIT SUBMITTED BY TECHWEST ENTERPRISES WAS FAR SUPERIOR AND BEST MET THE GOVERNMENT'S REQUIREMENTS.

AS FOR THE REQUIREMENT FOR ROAD-TRANSPORTABILITY IN REMOTE AREAS OF THE WORLD, THE NAVY REPORTS THAT THE ONLY REQUIREMENT WAS FOR TRANSFERABILITY BETWEEN THE AIRCRAFT AND THE SHIP. THE NAVY CONTINUES:

*** THE UNITIZED PACKAGE AS PROPOSED BY OCEAN DESIGN IS NOT READILY TRANSPORTABLE BY EITHER C-141 AIRCRAFT OR BY STANDARD LOW-BOY TRUCK. HOWEVER, IN RESPONSE TO QUESTION (A) OF THE QUESTIONS/CLARIFICATIONS, OCEAN DESIGN INDICATED THAT THE DESIGN COULD BE MODIFIED TO BREAK DOWN INTO THREE SEPARATE SECTIONS, WHICH WOULD THEN BE READILY TRANSPORTABLE BY BOTH C-141 AIRCRAFT AND SURFACE TRUCKS. THE FINAL EVALUATION TOOK INTO CONSIDERATION THE FACT THAT THE SYSTEM COULD BE BROKEN DOWN INTO THREE SECTIONS FOR TRANSPORTATION; THUS, THE OCEAN DESIGN PROPOSAL WAS GIVEN THE HIGHEST RATING FOR THE TRANSPORTABILITY, WEIGHT, AND SHIPBOARD INSTALLATION FACTORS OF ALL THE PROPOSALS RECEIVED.

IT IS CLEAR FROM THE FOREGOING THAT THE REQUIREMENT CONCERNING TRANSPORTABILITY DID NOT HAVE AN ADVERSE EFFECT ON THE EVALUATION OF OCEAN DESIGN'S PROPOSAL. ON THE OTHER HAND, IT APPEARS THAT TECHWEST ENTERPRISE'S ROTATING GANTRY DESIGN WAS A MAJOR FACTOR IN ITS SELECTION. HOWEVER, FROM OUR EXAMINATION OF THE RECORD, IT APPEARS THAT TECHWEST'S ADVANTAGE IN THIS REGARD RESULTED NOT ONLY IN ITS CHOICE OF A ROTATING GANTRY AS ONE OF THREE ALTERNATE PROPOSALS BUT MORE IMPORTANTLY FROM ITS INGENUITY IN A DESIGN APPROACH INDICATING ADHERENCE TO A POLICY USING THE "MOST SIMPLE, DIRECT AND UNCOMPLICATED SOLUTION THAT WILL DO THE JOB" IN THE MOST COST-EFFECTIVE AND BEST OPERATIONAL METHOD RATHER THAN FROM AN AGENCY PREDETERMINED, UNDISCLOSED PREFERENCE. AS NOTED PREVIOUSLY, MAJOR REVISION OF THE SPECIFICATIONS WAS EFFECTED "*** TO ALLOW PROSPECTIVE (OFFERORS) TO BETTER USE THEIR CREATIVE ENGINEERING CAPABILITIES TO OBTAIN A LIGHTER, SIMPLER, MORE RELIABLE AND COST-EFFECTIVE SYSTEM." FURTHERMORE, WE DO NOT AGREE WITH THE PROTESTER'S CONTENTION THAT CONSIDERATION OF A ROTATING DESIGN WAS PRECLUDED BY THE SPECIFICATIONS SINCE THEY DID NOT SPECIFICALLY REQUIRE SUCH APPROACH. IT IS CLEAR THAT THE SPECIFICATIONS WERE OF THE PERFORMANCE TYPE, LEAVING THE EXACT DESIGN AND APPROACH TO MEET THE PERFORMANCE PARAMETERS TO THE INVENTIVENESS AND INGENUITY OF THE OFFERORS. IN THIS CONNECTION, ALL OFFERORS EXCEPT OCEAN DESIGN PROPOSED A ROTATING DESIGN. WITH REGARD TO THE CONTENTION THAT THE QUESTION/CLARIFICATIONS PROPOUNDED TO OCEAN DESIGN SHOULD HAVE INCLUDED REFERENCE TO THE ROTATING DESIGN, WE HAVE HELD THAT WHERE AN AGENCY IS INTERESTED IN AN OFFEROR'S INDEPENDENT APPROACH AND THERE IS A RISK OF DISCLOSING ONE OFFEROR'S APPROACH TO ANOTHER, TECHNICAL DISCUSSIONS MAY PROPERLY BE CURTAILED. 52 COMP. GEN. 870 (1973). WE BELIEVE THIS RATIONALE APPLIED TO THE SITUATION IN THE INSTANT CASE.

OCEAN DESIGN ALSO TAKES ISSUE WITH THE NAVY'S CONCLUSION THAT THE ROTATING DESIGN WAS THE MOST ADVANTAGEOUS, POINTING OUT WHAT IT CONSIDERS OBVIOUS ADVANTAGES TO A NONROTATING DESIGN. NAVY TECHNICAL PERSONNEL PREPARED A DETAILED COMPARISON OF THE ROTATING AND NONROTATING DESIGNS IN SUPPORT OF ITS CONCLUSION THAT THE ROTATING APPROACH WAS THE BEST OPERATIONAL AND MOST COST EFFECTIVE METHOD. OBVIOUSLY THE DISAGREEMENT IN THIS REGARD INVOLVES MATTERS OF A HIGHLY TECHNICAL NATURE. RECOGNIZING THE AGENCY'S PRIMARY RESPONSIBILITY IN SUCH MATTERS, WE WILL NOT DISTURB THAT JUDGMENT IN THE ABSENCE OF A CLEAR SHOWING THAT THE AGENCY ACTED UNREASONABLY. 52 COMP. GEN. 382, 385 (1972). WE HAVE EXAMINED THE NAVY'S TECHNICAL COMPARISON OF THE TWO DESIGNS IN LIGHT OF THE PROTESTER'S ALLEGATIONS AND ARE UNABLE TO CONCLUDE THAT THERE HAS BEEN A CLEAR SHOWING THAT THE NAVY'S TECHNICAL JUDGMENT WAS NOT REASONABLE. IN THIS CONNECTION, WE NOTE THAT IN THE OVERALL EVALUATION, WHICH FOLLOWED THE EVALUATION CRITERIA AND RELATIVE WEIGHTS SET FORTH IN THE RFP, TECHWEST RECEIVED A SCORE OF 92 AS COMPARED TO OCEAN DESIGN'S SCORE OF 89, BASED UPON A 100 POINT TOTAL. FURTHERMORE, ALTHOUGH OCEAN DESIGN PROPOSED THE LOWEST COSTS AND RECEIVED THE MAXIMUM SCORE FOR THIS FACTOR, THIS WAS NOT SUFFICIENT TO OVERCOME TECHWEST'S TECHNICAL SUPERIORITY WHICH WAS ACCORDED 80 PERCENT OF THE ASSIGNED WEIGHT. MOREOVER, IN A COST-REIMBURSEMENT TYPE CONTRACT ESTIMATED COSTS AND PROPOSED FEES ARE NOT THE CONTROLLING FACTOR. ARMED SERVICES PROCUREMENT REGULATION 3-803(C)(1974).

FINALLY, OCEAN DESIGN QUESTIONS TECHWEST'S QUALIFICATIONS BASED UPON ITS INFORMATION THAT THE SUCCESSFUL OFFEROR HAS BEEN IN BUSINESS ONLY 2 YEARS AND BECAUSE IT IS A SUBSIDIARY OF AN ORGANIZATION WHICH IS PARTIALLY SUBSIDIZED BY THE CANADIAN GOVERNMENT AND, THEREFORE, AWARD TO IT WOULD BE CONTRARY TO THE INTENT OF ASPR 6-502(D), WHICH STATES THAT IT IS NOT ANTICIPATED:

*** THAT CANADIAN SOURCES OF SUPPLY WILL SUBMIT BIDS OR PROPOSALS THAT CONTEMPLATE CONTRACT PERFORMANCE IN CANADIAN GOVERNMENT-OWNED OR CONTROLLED INSTALLATIONS***

WITH REGARD TO THE LATTER POINT, THE ADMINISTRATIVE REPORT CONTAINS NO INFORMATION ON THIS MATTER AS THE ALLEGATION WAS NOT INCLUDED IN THE INITIAL PROTEST. HOWEVER, EVEN ASSUMING THE VALIDITY OF THE ALLEGATION MADE, WE DO NOT BELIEVE A VIOLATION OF THE REGULATION HAS BEEN DEMONSTRATED AS THE EVIDENCE PRESENTED IS NOT TO THE EFFECT THAT "PERFORMANCE IN CANADIAN GOVERNMENT-OWNED OR CONTROLLED INSTALLATIONS" IS CONTEMPLATED.

THE ALLEGATION CONCERNING TECHWEST'S EXPERIENCE RELATES TO MATTER OF RESPONSIBILITY AS DEFINED IN ASPR 1-903. RECENTLY OUR OFFICE HAS DISCONTINUED ITS PRIOR PRACTICE OF REVIEWING PROTESTS INVOLVING AFFIRMATIVE DETERMINATIONS OF RESPONSIBILITY OF A PROSPECTIVE CONTRACTOR. 53 COMP. GEN. 931 (1974). THE DETERMINATION OF A PROPOSED CONTRACTOR'S RESPONSIBILITY IS LARGELY WITHIN THE DISCRETION OF THE CONTRACTING OFFICER. THE CONTRACTING ACTIVITY MUST HANDLE THE DAY-TO-DAY ADMINISTRATION OF THE CONTRACT AND BEAR THE BRUNT OF ANY DIFFICULTIES EXPERIENCED BY REASON OF THE CONTRACTOR'S LACK OF ABILITY. IF PURSUANT TO THE APPLICABLE REGULATIONS THE CONTRACTING OFFICER FINDS THE PROPOSED CONTRACTOR RESPONSIBLE, WE DO NOT BELIEVE THE FINDING SHOULD BE DISTURBED EXCEPT FOR ACTIONS BY PROCURING OFFICIALS WHICH ARE TANTAMOUNT TO FRAUD. AS NO FRAUD HAS BEEN ALLEGED OR DEMONSTRATED, WE MUST DECLINE TO FURTHER CONSIDER THE MATTER.

ACCORDINGLY, THE PROTEST IS DENIED.