B-181779, DEC 10, 1974

B-181779: Dec 10, 1974

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AWARD TO OFFEROR WHOSE INITIAL PROPOSAL WAS RATED "BORDERLINE" BUT THROUGH SUBSEQUENT NEGOTIATION WAS MADE ACCEPTABLE IS NOT OBJECTIONABLE. SINCE PURPOSE OF NEGOTIATION IS TO HOLD DISCUSSIONS WITH OFFERORS WITHIN COMPETITIVE RANGE WHOSE PROPOSALS ARE SUSCEPTIBLE OF BEING MADE ACCEPTABLE AND FACT THAT OFFEROR'S PROPOSAL DID NOT INCLUDE ALL INFORMATION REQUESTED BY RFP DOES NOT REQUIRE REJECTION OF PROPOSAL. 2. THERE IS NOTHING IMPROPER IN CONDUCTING DISCUSSIONS. AS DURATION OF DISCUSSIONS HAS NO BEARING ON EQUALITY OF TREATMENT AND IT IS LOGICAL THAT HIGH RATED OFFER WOULD NEED LESS DISCUSSION THAN LOWER RATED OFFER. 3. ALTHOUGH UNSUCCESSFUL OFFEROR WHO WAS RATED HIGHEST TECHNICALLY IN EVALUATION CONDUCTED FOR COMPETITIVE RANGE PURPOSES.

B-181779, DEC 10, 1974

1. AWARD TO OFFEROR WHOSE INITIAL PROPOSAL WAS RATED "BORDERLINE" BUT THROUGH SUBSEQUENT NEGOTIATION WAS MADE ACCEPTABLE IS NOT OBJECTIONABLE, SINCE PURPOSE OF NEGOTIATION IS TO HOLD DISCUSSIONS WITH OFFERORS WITHIN COMPETITIVE RANGE WHOSE PROPOSALS ARE SUSCEPTIBLE OF BEING MADE ACCEPTABLE AND FACT THAT OFFEROR'S PROPOSAL DID NOT INCLUDE ALL INFORMATION REQUESTED BY RFP DOES NOT REQUIRE REJECTION OF PROPOSAL. 2. THERE IS NOTHING IMPROPER IN CONDUCTING DISCUSSIONS, CONSISTING OF 3 QUESTIONS, WITH HIGHEST RATED TECHNICAL OFFEROR OVER TELEPHONE, WHILE HOLDING CONFERENCE WITH LOW TECHNICAL OFFEROR AND PROPOUNDING 19 QUESTIONS, AS DURATION OF DISCUSSIONS HAS NO BEARING ON EQUALITY OF TREATMENT AND IT IS LOGICAL THAT HIGH RATED OFFER WOULD NEED LESS DISCUSSION THAN LOWER RATED OFFER. 3. REVIEW OF QUESTIONS PRESENTED TO SUCCESSFUL OFFEROR DURING NEGOTIATION DOES NOT SUPPORT ALLEGATION BY ONE OFFEROR THAT "TECHNICAL TRANSFUSION" OCCURRED, SINCE QUESTIONS DID NOT SUGGEST ANSWERS OR APPROACHES DESIRED BY EVALUATORS. 4. ALTHOUGH UNSUCCESSFUL OFFEROR WHO WAS RATED HIGHEST TECHNICALLY IN EVALUATION CONDUCTED FOR COMPETITIVE RANGE PURPOSES, CONTENDS THAT AWARD SHOULD NOT HAVE BEEN MADE TO LOWER PRICED OFFEROR, RFP PROVIDED FOR CONSIDERATION OF PRICE AS WELL AS TECHNICAL EXCELLENCE AND IT DOES NOT APPEAR THAT REVISED PROPOSALS WERE VIEWED AS BEING OTHER THAN ESSENTIALLY THE SAME TECHNICALLY AND, THEREFORE, PRICE PROPERLY WAS REMAINING CONTROLLING FACTOR. 5. DETERMINATION OF CONTRACTING OFFICER THAT CONTRACTOR IS RESPONSIBLE OFFEROR IS WITHIN DISCRETION OF CONTRACTING OFFICER AND WILL NOT BE DISTURBED ABSENT SHOWING OF FRAUD.

PROCUREMENT CONSULTANTS INCORPORATED:

REQUEST FOR PROPOSALS (RFP)) NO. 150-74-HEW-OS, SOLICITING PROPOSALS FOR REVIEW AND PRESENTATION OF THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE (HEW) PROCUREMENT TRAINING PROGRAM, WAS ISSUED BY HEW ON APRIL 26, 1974.

OFFERS WERE SUBMITTED ON MAY 21, 1974, BY PROCUREMENT CONSULTANTS INCORPORATED (PCI), HARBRIDGE HOUSE, INC. (HHI), AND MANAGEMENT CONCEPTS, INC. (MCI). AFTER A TECHNICAL EVALUATION, THE PROPOSALS OF PCI AND HHI WERE FOUND TO BE ACCEPTABLE AND THE PROPOSAL OF MCI WAS FOUND TO BE "BORDERLINE." THE SCORES FOR EACH PROPOSAL BASED ON THE EVALUATION CRITERIA CONTAINED IN THE RFP WERE AS FOLLOWS:

PCT 90.8

HHI 88.0

MCI 69.2

THE COST PROPOSALS, INCLUDING OPTIONS, OFF ALL THREE OFFERORS WERE THEN EVALUATED WITH THE FOLLOWING RESULTS:

PCI $57,822

HHI 61,207

MCI 36,490

BASED ON BOTH THE TECHNICAL EVALUATION AND THE COST PROPOSALS, IT WAS DETERMINED BY THE CONTRACTING OFFICER THAT ALL THREE PROPOSALS WERE WITHIN THE COMPETITIVE RANGE AND, THEREFORE, NEGOTIATIONS WERE CONDUCTED WITH ALL OFFERORS.

AS A RESULT OF NEGOTIATIONS, THE OFFER OF MCI BECAME ACCEPTABLE AND ALL THREE OFFERORS WERE REQUESTED TO SUBMIT BEST AND FINAL OFFERS. THE FINAL COST PROPOSALS WERE:

PCI $59,641

HHI 68,133

MCI 41,885

ON JUNE 27, 1974, AWARD WAS MADE TO MCI AS THE LOWEST-PRICED TECHNICALLY ACCEPTABLE OFFEROR.

UPON ADVICE FROM HEW THAT IT WAS NOT THE SUCCESSFUL OFFEROR, PCI PROTESTED TO OUR OFFICE IN A TIMELY MANNER.

THE MAJOR CONTENTIONS ADVANCED BY PCI IN SUPPORT OF ITS PROTEST ARE THAT THE MCI PROPOSAL FAILED TO MEET THE REQUIREMENT OF THE RFP, BOTH IN THE TECHNICAL AREA AND ALSO IN THE COST PROPOSAL SUBMITTED, THAT DURING NEGOTIATIONS "TECHNICAL TRANSFUSION OR LEVELING" OCCURRED AND THAT AWARD SHOULD BEEN MADE DISREGARDING PRICE. ADDITIONALLY, PCI QUESTIONS THE RESPONSIBILITY OF MCI.

INITIALLY, PCI CONTENDS THAT THE PROPOSAL OF MCI WAS SO FAR SHORT OF THE REQUIREMENTS OF THE RFP THAT IT SHOULD HAVE BEEN FOUND UNACCEPTABLE AND DISMISSED FROM FURTHER NEGOTIATIONS. FURTHER, PCI STATES THAT THE CONTENTION IS FULLY SUPPORTED BY THE FACT THAT THE HEW NEGOTIATORS ASKED 19 CLARIFYING QUESTIONS OF MCI AT A FACE-TO-FACE CONFERENCE WHILE NEGOTIATION WITH PCI WAS LIMITED TO A 4 MINUTE TELEPHONE CONVERSATION IN WHICH THREE QUESTIONS WERE ASKED. WE NOTE FROM THE RECORD THAT EIGHT QUESTIONS WERE ASKED OF HHI DURING ITS NEGOTIATIONS.

REGARDING THE CONTENTION THAT THE MCI PROPOSAL DID NOT PROVIDE SUFFICIENT DATA TO BE DETERMINED ACCEPTABLE, PCI STRESSES THE INSUFFICIENCIES UNDER SECTION IX, PARAGRAPH B, "CONTENT OF TECHNICAL PROPOSALS," WHERE THE OFFEROR STATED HIS UNDERSTANDING OF THE PROBLEM AND TECHNICAL APPROACH. PCI STATES THAT UNDER THIS SECTION, MCI USED ONLY GENERAL TERMS AND KEY WORDS FROM THE RFP WITHOUT REALLY STATING AN UNDERSTANDING OF THE PROBLEM. THE CONTRACTING OFFICER HAS STATED THAT THE MCI PROPOSAL DEMONSTRATED SUFFICIENT UNDERSTANDING TO WARRANT FURTHER DISCUSSIONS.

THE PURPOSE OF NEGOTIATION IS TO SECURE OF THE GOVERNMENT THE BEST POSSIBLE PROPOSAL, "PRICE AND OTHER FACTORS CONSIDERED." THIS IS POSSIBLE ONLY THROUGH MAXIMUM COMPETITION AND IT IS FOR THIS REASON THAT WE HAVE STATED THAT THE PRIMARY CONSIDERATION IN NEGOTIATED PROCUREMENTS IS DISCUSSIONS WITH ALL OFFERORS WITHIN A COMPETITIVE RANGE AND BORDERLINE PROPOSALS SHOULD NOT BE AUTOMATICALLY EXCLUDED FROM CONSIDERATION IF THEY ARE REASONABLY SUSCEPTIBLE TO BEING MADE ACCEPTABLE BY ADDITIONAL OR CLARIFYING INFORMATION. 50 COMP. GEN. 59, 61 (1970). THEREFORE, OUR OFFICE FINDS NO BASIS FOR OBJECTING TO THE DECISION OF THE CONTRACTING OFFICER TO HOLD DISCUSSIONS WITH MCI.

THE FOREGOING RULE ALSO APPLIES TO THE CONTENTION OF PCI THAT MCI'S COST PROPOSAL FAILED TO PROVIDE REQUIRED DETAILED COST INFORMATION. AN OFFEROR WHO DOES NOT PROVIDE PRECISELY THE INFORMATION REQUIRED BY THE RFP IS NOT AUTOMATICALLY EXCLUDED FROM FURTHER COMPETITION. THE CONCEPT OF RESPONSIVENESS, AS USED IN FORMALLY ADVERTISED PROCUREMENTS, HAS NO PLACE IN NEGOTIATED PROCUREMENTS. 51 COMP. GEN. 565, 570 (1972) AND MATTER OF UNIDYNAMICS/ST. LOUIS, INC., B-181130, AUGUST 19, 1974.

THE FACT THAT ONE OFFEROR HAS A PERSONAL CONFERENCE DURING NEGOTIATIONS WHILE OTHER OFFERORS ARE CONTACTED BY TELEPHONE IS IRRELEVANT WHEN VIEWING THE PROCUREMENT AS A WHOLE. WHAT IS IMPORTANT IS IF "MEANINGFUL DISCUSSIONS" WERE HELD WITH ALL OFFERORS WITHIN THE COMPETITVE RANGE. ALSO, THE DURATION OF DISCUSSIONS DOES NOT HAVE TO BE THE SAME WITH ALL OFFERORS FOR ALL TO HAVE RECEIVED EQUAL TREATMENT DURING NEGOTIATIONS. COMP. GEN. 161, 164 (1972). SINCE PCI WAS THE HIGHEST RATED OFFEROR TECHNICALLY AFTER THE INITIAL EVALUATION, IT IS LOGICAL THAT FEWER QUESTIONS WOULD HAVE TO HAVE BEEN PROPOUNDED TO IT THAN TO AN OFFEROR RATED LOWER INITIALLY. ACCORDINGLY, OUR OFFICE FINDS NOTHING IMPROPER IN THE METHOD OF CONDUCTING DISCUSSIONS WITH ALL OFFERORS.

NEXT, PCI BELIEVES THAT "TECHNICAL TRANSFUSION OR LEVELING" OCCURRED DURING THE NEGOTIATIONS WHICH ALLOWED MCI TO MAKE ITS PROPOSAL ACCEPTABLE. TECHNICAL TRANSFUSION IS THE CONVEYING, EITHER DIRECTLY OR INDIRECTLY, DURING NEGOTIATION, OF A BETTER APPROACH OR SOLUTION TO A PROBLEM BY THE GOVERNMENT NEGOTIATORS. PCI ALLEGES THIS OCCURRED BY THE WORDING OF THE 19 QUESTIONS ASKED MCI DURING NEGOTIATIONS BECAUSE THE WORDING SUGGESTED THE PROPER OR DESIRED ANSWER. THE FOLLOWING ARE EXAMPLES OF SOME OF THE QUESTIONS PRESENTED TO MCI:

"1. WHERE IN YOUR PROPOSAL DO YOU DISCUSS THE REPORTS AND PLAN OF ACTION REQUIRED BY PHASE I?

"2. ASIDE FORM DISCUSSIONS WITH INDIVIDUALS, WHAT WILL YOUR REVIEW COVER?

"3. WHERE DOES YOUR PROPOSAL DISCUSS THE INCLUSION OF ALL ITEMS REQUIRED BY PHASES II AND III?

"3. SINCE IT IS UNLIKELY THAT THE PROJECT OFFICER WILL BE ABLE TO ARRANGE MEETINGS WITH ON-LINE PERSONNEL, DISCUSS HOW REQUIRED EFFORT WILL BE ACCOMPLISHED WITHOUT THESE MEETINGS.

"5. DEFINE WHAT MATERIALS PERSONNEL INTERVIEWED WILL BE ENCOURAGED TO REVIEW (PAGE 4 OF YOUR PROPOSAL)? WHO WILL MAKE THE MATERIALS AVAILABLE AND DISCUSS THE IMPACT IF THIS REVIEW IS NOT PERFORMED?"

WE ARE OF THE OPINION THAT THESE TYPES OF QUESTIONS DO NOT SUGGEST AN APPROACH OR SOLUTION OR THE DESIRED ANSWER AND, THEREFORE, DO NOT BELIEVE THAT TECHNICAL TRANSFUSION OCCURRED DURING NEGOTIATION.

PCI CONTENDS THAT AS ITS PROPOSAL WAS EVALUATED HIGH TECHNICALLY, AWARD SHOULD HAVE BEEN MADE TO IT SINCE PRICE WAS NOT AN EVALUATION FACTOR CONTAINED IN THE IFB. SECTION XII OF THE RFP "METHOD OF PROPOSAL EVALUATION" STATED THAT AWARD WOULD BE MADE "TO THAT FIRM WHOSE PROPOSAL *** WOULD BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED." THEN FOLLOWED A LIST OF THE FOUR EVALUATION CRITERIA AND THEIR WEIGHTS. PRICE WAS NOT ONE OF THE FOUR LISTED. HOWEVER, FOLLOWING THE CRITERIA WAS THE FOLLOWING NOTE:

"NOTE:

ALTHOUGH PRICE WILL BE A FACTOR IN THE EVALUATION OF PROPOSALS, TECHNICAL EXCELLENCE OF PROPOSALS WILL BE A MORE SIGNIFICANT FACTOR IN SELECTION OF A CONTRACTOR. HOWEVER, TO BE SELECTED FOR AWARD, A PROPOSAL MUST BE FAIRLY AND REASONABLY PRICED."

THEREFORE, WHILE IT IS TRUE THAT PRICE WAS NOT ONE OF THE STATED EVALUATION CRITERIA, OFFERORS WERE ON NOTICE THAT IT WOULD BE CONSIDERED IN THE EVALUATION PROCESS.

WHILE PCI WAS RATED HIGHEST DURING THE INITIAL TECHNICAL EVALUATION CONDUCTED FOR COMPETITIVE RANGE PURPOSES, THERE IS NO INDICATION THAT IT REMAINED THE SUPERIOR PROPOSAL AFTER DISCUSSIONS WERE HELD. THE THREE PROPOSALS WERE NOT NUMERICALLY RESCORED AFTER DISCUSSIONS. UPON REEVALUATION, THE PROJECT OFFICER ADVISED THE CONTRACTING OFFICER THAT "THEY ARE ALL TECHNICALLY ACCEPTABLE AND I HAVE NO OBJECTION OF AWARD TO ANY OF THE OFFERORS." ALTHOUGH THIS ADVICE MAY NOT CONVEY THE IMPRESSION THAT ALL PROPOSALS WERE EQUAL, THERE IS NO INDICATION THAT ANY PROPOSAL WAS CLEARLY SUPERIOR TO ANY OTHER PROPOSAL. THEREFORE, FROM THE RECORD, IT DOES NOT APPEAR THAT THE REVISED PROPOSALS WERE VIEWED AS BEING ANYTHING OTHER THAN ESSENTIALLY THE SAME TECHNICALLY. IN SITUATIONS WHERE TECHNICAL OFFERS ARE SUBSTANTIALLY THE SAME, PRICE IS THE REMAINING CONTROLLING FACTOR. B-173427, MARCH 14, 1972; B 173137(1), OCTOBER 8, 1971. FURTHERMORE, UNDER NEGOTIATED PROCEDURES, PROCUREMENT PERSONNEL HAVE BROAD DISCRETION IN SELECTING THE SUCCESSFUL OFFEROR AND EVEN IF PCI'S TECHNICAL OFFER WAS SUPERIOR TO MCI'S LOWEST PRICED TECHNICALLY ACCEPTABLE OFFER, THERE WOULD NOT BE AN ABUSE OF DISCRETION IF THE CONTRACTING OFFICER FOUND THAT THE MONETARY SAVINGS OF THE MCI PROPOSAL OUTWEIGHED THE TECHNICAL SUPERIORITY OF THE PCI PROPOSAL. MATTER OF DAVIDSON OPTRONICS, INC., B-179925, FEBRUARY 22, 1974.

FINALLY, PCI QUESTIONS THE DETERMINATION OF THE CONTRACTING OFFICER THAT MCI IS A RESPONSIBLE OFFEROR. 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 ON THE BASIS OF FRAUD. NO FRAUD HAVING BEEN ALLEGED OR DEMONSTRATED, WE MUST DECLINE TO FURTHER CONSIDER THE MATTER. MATTER OF CONTENTIAL CABLEVISION OF NEW HAMPSHIRE, INC. ET AL., B-178542, JULY 19, 1974.

FOR THE FOREGOING REASONS, THE PROTEST OF PCI IS DENIED.