B-181597, JAN 29, 1975

B-181597: Jan 29, 1975

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WHERE PROPOSAL FOR FURNISHING CAREER DEVELOPMENT PROGRAM IS HIGHLY RATED DUE TO OVERALL TECHNICAL APPROACH BUT IS FOUND TO BE LACKING IN DETAIL AS TO HOW APPROACH WILL BE IMPLEMENTED. THERE IS NO IMPROPRIETY IN CONDUCTING ORAL DISCUSSIONS TO SEEK CLARIFICATION OF UNCERTAINTIES AND POINT OUT DEFICIENCIES. SINCE NEGOTIATIONS WITH OFFERORS WITHIN COMPETITIVE RANGE ARE NOT LIMITED TO COST CONSIDERATIONS. DISCUSSION OF TECHNICAL UNCERTAINTIES AND WEAKNESSES AS THEY RELATE TO PROPOSED COSTS IS ESPECIALLY IMPORTANT WHERE COST-REIMBURSEMENT CONTRACT WILL BE AWARDED. SINCE GOVERNMENT WILL BE OBLIGATED TO REIMBURSE CONTRACTOR'S ALLOWABLE COSTS. IS AGAINST THE MANNER IN WHICH NEGOTIATIONS WERE CONDUCTED WITH IT UNDER REQUEST FOR PROPOSALS (RFP) NO. 74-24.

B-181597, JAN 29, 1975

WHERE PROPOSAL FOR FURNISHING CAREER DEVELOPMENT PROGRAM IS HIGHLY RATED DUE TO OVERALL TECHNICAL APPROACH BUT IS FOUND TO BE LACKING IN DETAIL AS TO HOW APPROACH WILL BE IMPLEMENTED, THERE IS NO IMPROPRIETY IN CONDUCTING ORAL DISCUSSIONS TO SEEK CLARIFICATION OF UNCERTAINTIES AND POINT OUT DEFICIENCIES, SINCE NEGOTIATIONS WITH OFFERORS WITHIN COMPETITIVE RANGE ARE NOT LIMITED TO COST CONSIDERATIONS. DISCUSSION OF TECHNICAL UNCERTAINTIES AND WEAKNESSES AS THEY RELATE TO PROPOSED COSTS IS ESPECIALLY IMPORTANT WHERE COST-REIMBURSEMENT CONTRACT WILL BE AWARDED, SINCE GOVERNMENT WILL BE OBLIGATED TO REIMBURSE CONTRACTOR'S ALLOWABLE COSTS.

LAWRENCE JOHNSON & ASSOCIATES, INC.:

THE PROTEST OF LAWRENCE JOHNSON & ASSOCIATES, INC. (LJA), IS AGAINST THE MANNER IN WHICH NEGOTIATIONS WERE CONDUCTED WITH IT UNDER REQUEST FOR PROPOSALS (RFP) NO. 74-24, ISSUED BY THE OFFICE OF EDUCATION, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE (HEW). THE RFP CONTEMPLATED THE AWARD OF A COST-REIMBURSEMENT CONTRACT FOR THE PROVISION OF A CAREER DEVELOPMENT PROGRAM FOR WOMEN ENTERING MANPOWER DEVELOPMENT AND TRAINING PROGRAMS.

AFTER EVALUATION OF INITIAL PROPOSALS, LJA RECEIVED THE HIGHEST TECHNICAL RATING; LJA'S ESTIMATED COST OF $346,445 WAS FROM $50,000 TO $150,000 LESS THAN THE NEXT THREE TOP RANKED PROPOSALS. IN ITS BEST AND FINAL OFFER, LJA INCREASED ITS ESTIMATED COST TO $543,579, WHICH EXCEEDED HEW'S AVAILABLE FUNDING OF $400,000. AWARD WAS MADE TO THE OFFEROR WITH THE SECOND HIGHEST TECHICAL RATING, CONSAD RESEARCH CORPORATION, AT AN ESTIMATED COST OF $335,108.

THE PROTESTER CONTENDS THAT BECAUSE OF THE VIEWS EXPRESSED BY HEW PERSONNEL IN THE ORAL DISCUSSIONS HELD WITH IT, IT WAS INDUCED TO MAKE TECHNICAL CHANGES, PRINCIPALLY INVOLVING INCREASED STAFFING, IN ITS PROPOSALS, AND THAT IT WAS PRICED OUT OF THE COMPETITION BY THE IMPACT OF THE CHANGES ON ITS COST PROPOSAL. LJA BELIEVES THAT THE DISCUSSIONS SHOULD HAVE BEEN LIMITED TO CLARIFICATION OF THE TECHNICAL EFFORT WHICH IT PROPOSED AND TO THE QUESTION OF WHETHER THE PROPOSED COST WAS ADEQUATE TO IMPLEMENT ITS TECHNICAL EFFORT.

THE RECORD INDICATES THAT, NOTWITHSTANDING THE HIGH TECHNICAL RATING RECEIVED BY LJA, THE CONTRACTING OFFICER WAS CONCERNED OVER "CRUCIAL" WEAKNESSES IN THE PROPOSAL, BECAUSE MANY OF THE CONCEPTS WERE UNSUPPORTED BY DETAILS AS TO HOW THE CONTRACTOR WOULD ACTUALLY PERFORM THEM. AMONG THE WEAKNESSES CITED WERE: LACK OF CLARITY AS TO WHICH INDIVIDUALS WOULD PERFORM WHICH TASKS; UNCERTAINTY CONCERNING COORDINATION BETWEEN THE CONTRACTOR AND PROGRAM SITES; CONFUSING AND INCONSISTENT STATEMENTS CONCERNING STAFFING IN VARIOUS PARTS OF THE PROPOSAL, INCLUDING NONIDENTIFICATION OF CERTAIN STAFF PERSONNEL AND THE SPECIFIC TASKS WHICH THEY WOULD PERFORM; UNCERTAINTY CONCERNING THE PURPOSE, METHOD OF OPERATION, AND COSTS OF A PROPOSED "CAREER DEVELOPMENT PROGRAM INFORMATION CENTER"; AND LACK OF COST INFORMATION ON AN OPTIONAL MULTI-MEDIA KIT. THE HEW NEGOTIATORS RAISED QUESTIONS IN THE DISCUSSIONS RELATING TO THESE AND OTHER POINTS; IN ADDITION, ACCORDING TO A MEMORANDUM OF THE ORAL DISCUSSIONS PREPARED BY HEW, LJA WAS ADVISED AT THE CONCLUSION OF THE MEETING THAT IT HAD BEEN FOR THE PURPOSE OF INDICATING THE AGENCY'S CONCERNS TO THE OFFEROR AND THAT LJA COULD OR COULD NOT REVISE ITS PROPOSAL AS IT WISHED.

IN VIEW OF THE FOREGOING CONSIDERATIONS, WE SEE NO IMPROPRIETY IN THE CONDUCT OF NEGOTIATIONS BY HEW. WE BELIEVE LJA'S GROUNDS OF PROTEST ARE BASED UPON A MISUNDERSTANDING OF THE NEGOTIATIONS PROCESS. IN A RECENT DECISION INVOLVING A SOMEWHAT SIMILAR SITUATION (MATTER OF TECHPLAN CORPORATION, B-180795, SEPTEMBER 16, 1974), OUR OFFICE STATED:

"FROM A REVIEW OF TECHPLAN PROTEST CORRESPONDENCE, IT APPEARS THAT IT IS LABORING UNDER THE MISCONCEPTION THAT, SINCE IT WAS PROVIDED AN OPPORTUNITY TO CLARIFY TECHNICAL ASPECTS OF THE PROPOSAL AFTER THE INITIAL SUBMISSION, ALL THAT REMAINED WAS COST NEGOTIATION. *** ASPR 3-805.1 PROVIDES FOR WRITTEN OR ORAL DISCUSSIONS WITH ALL RESPONSIBLE OFFERORS WHO SUBMIT PROPOSALS WITHIN A COMPETITIVE RANGE. ALTHOUGH THE CONDUCT OF DISCUSSIONS IS AN INDICATION THAT THE PROPOSAL HAS BEEN DETERMINED TO BE WITHIN THE 'COMPETITIVE RANGE,' THAT IS NOT AN INDICATION THAT COST NEGOTIATION IS THE ONLY REMAINING ITEM. ASPR 3 805.3 PROVIDES FOR DISCUSSIONS OF DEFICIENCIES WITH ANY OFFEROR WHO SUBMITS A PROPOSAL WITHIN A COMPETITIVE RANGE AND A REASONABLE OPPORTUNITY FOR THE OFFEROR TO CORRECT THEM. ***"

SEE, ALSO, FPR SEC. 1-3.804 (1964 ED. AMEND. 118, SEPT. 1973), WHICH PROVIDES THAT COMPLETE AGREEMENT OF THE PARTIES ON ALL BASIC ISSUES SHALL BE THE OBJECTIVE OF THE NEGOTIATIONS, THAT DISCUSSIONS SHALL BE CONDUCTED TO THE EXTENT NECESSARY TO RESOLVE UNCERTAINTIES RELATING TO THE PURCHASE OR THE PRICE TO BE PAID, AND THAT BASIC QUESTIONS SHOULD NOT BE LEFT FOR LATER AGREEMENT DURING PRICE REVISION OR OTHER SUPPLEMENTAL PROCEEDINGS. ALSO, FPR SEC. 1-3.805-1(B) (1964 ED.) FPR CIRC. 1, JUNE 1964) PROVIDES THAT OFFERORS SHALL BE PROVIDED AN EQUITABLE OPPORTUNITY TO SUBMIT SUCH PRICE, TECHNICAL, OR OTHER REVISIONS IN THEIR PROPOSALS AS MAY RESULT FROM THE NEGOTIATIONS.

WHERE THE AWARD OF A COST-REIMBURSEMENT-TYPE CONTRACT IS CONTEMPLATED, IT IS PARTICULARLY IMPORTANT TO RESOLVE TECHNICAL UNCERTAINTIES AND WEAKNESSES AS THEY RELATE TO PROPOSED COSTS, BECAUSE THE GOVERNMENT WILL BE OBLIGATED TO REIMBURSE TO THE CONTRACTOR ITS ALLOWABLE COSTS. WHERE, AS HERE, IT APPEARS THAT AN OFFEROR HAS PROPOSED A DESIRABLE TECHNICAL CONCEPT OR APPROACH, BUT DETAILS AS TO HOW THAT CONCEPT WILL BE CARRIED OUT ARE UNCLEAR OR LACKING, IT IS BOTH PROPER AND NECESSARY THAT THE GOVERNMENT SHOULD SEEK TO CLARIFY THESE UNCERTAINTIES AND POINT OUT WEAKNESSES IN THE DISCUSSIONS, BECAUSE THE COST OF PERFORMING THE DETAILS WILL BE CHARGEABLE TO THE GOVERNMENT. AFTER THE DISCUSIONS, IT WAS FOR LJA TO JUDGE HOW BEST TO REVISE ITS PROPOSAL IN TERMS OF TRADEOFFS BETWEEN TECHNICAL AND COST CONSIDERATIONS.

ACCORDINGLY, THE PROTEST IS DENIED.