B-182109, MAR 10, 1975, 54 COMP GEN 735

B-182109: Mar 10, 1975

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CONTRACTS - RESEARCH AND DEVELOPMENT - STATEMENT OF WORK - INDIVIDUAL TAILORING PROVISION IN ARMED SERVICES PROCUREMENT REGULATION 4-105(A) PERMITTING INDIVIDUAL TAILORING OF STATEMENTS OF WORK FOR RESEARCH AND DEVELOPMENT (R&D) EXPLORATORY DEVELOPMENT IS INTENDED TO IMPART THE PARTICULARITY OF INDIVIDUAL R&D PROCUREMENTS AND TYPE OF EFFORT DESIRED THEREUNDER. CONTRACTS - RESEARCH AND DEVELOPMENT - COMPETITION SUFFICIENCY CONTENTION THAT INDIVIDUAL TAILORING BY AIR FORCE OF STATEMENT OF WORK IN RESEARCH AND DEVELOPMENT PROCUREMENT RESULTED IN SUBMISSION OF NONCOMPETITIVE HIGH PRICE IS DENIED BECAUSE PROTESTER DID NOT SHOW HOW INDIVIDUAL DIFFERENCES IN STATEMENT OF WORK CAUSED PRICE INCREASE ATTRIBUTABLE TO DIFFERENCES IN INDIVIDUALLY TAILORED STATEMENT OF WORK.

B-182109, MAR 10, 1975, 54 COMP GEN 735

CONTRACTS - RESEARCH AND DEVELOPMENT - STATEMENT OF WORK - INDIVIDUAL TAILORING PROVISION IN ARMED SERVICES PROCUREMENT REGULATION 4-105(A) PERMITTING INDIVIDUAL TAILORING OF STATEMENTS OF WORK FOR RESEARCH AND DEVELOPMENT (R&D) EXPLORATORY DEVELOPMENT IS INTENDED TO IMPART THE PARTICULARITY OF INDIVIDUAL R&D PROCUREMENTS AND TYPE OF EFFORT DESIRED THEREUNDER, NOT TO INCORPORATE AGENCY'S OPINION OF INDIVIDUAL PROPOSER'S RELATIVE STRENGTHS AND WEAKNESSES. CONTRACTS - RESEARCH AND DEVELOPMENT - COMPETITION SUFFICIENCY CONTENTION THAT INDIVIDUAL TAILORING BY AIR FORCE OF STATEMENT OF WORK IN RESEARCH AND DEVELOPMENT PROCUREMENT RESULTED IN SUBMISSION OF NONCOMPETITIVE HIGH PRICE IS DENIED BECAUSE PROTESTER DID NOT SHOW HOW INDIVIDUAL DIFFERENCES IN STATEMENT OF WORK CAUSED PRICE INCREASE ATTRIBUTABLE TO DIFFERENCES IN INDIVIDUALLY TAILORED STATEMENT OF WORK. CONTRACTS - NEGOTIATION - REQUESTS FOR PROPOSALS - STATEMENT OF WORK AIR FORCE USE OF INTERNAL PAMPHLET DESIGNED TO AID IN DRAFTING OF STATEMENTS OF WORK IS NOT OBJECTIONABLE SINCE IT IS ONLY INTERNAL ADMINISTRATIVE DOCUMENT THAT DOES NOT AFFECT MEASURE OF ACTIONS, WHICH IS ARMED SERVICES PROCUREMENT REGULATION.

IN THE MATTER OF FIBER MATERIALS, INC., MARCH 10, 1975:

THIS PROTEST BY FIBER MATERIALS, INC. (FMI), AGAINST THE AWARD OF A RESEARCH AND DEVELOPMENT (R&D) CONTRACT TO TRW, INC. (TRW), FOR CARBON/CARBON SUBSTRATES FOR THROAT INSERTS OF SOLID PROPELLENT ROCKETS NOZZLES PRESENTS TWO BASIC QUESTIONS: WHETHER THE ISSUANCE OF DIFFERENT STATEMENTS OF WORK TO OFFERORS IN THE COMPETITIVE RANGE WAS PERMISSIBLE, AND, IF THIS IS ANSWERED AFFIRMATIVELY, WHETHER THE RELIANCE ON AIR FORCE SYSTEMS COMMAND (AFSC) PAMPHLET 800-6, AUGUST 18, 1972, ENTITLED "STATEMENT OF WORK PREPARATION GUIDE," IN LIEU OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) WAS PERMISSIBLE.

REQUEST FOR PROPOSALS (RFP) NO. F33615-74-R-5084 WAS ISSUED ON OCTOBER 31, 1973, TO 25 PROSPECTIVE SOURCES. THE R&D EFFORT CONTEMPLATED A COST- PLUS-FIXED-FEE (CPFF) CONTRACT FOR THE DEVELOPMENT OF A CARBON/CARBON COMPOSITE SUBSTRATE THAT WOULD BE THERMALLY AND STRUCTURALLY COMPATIBLE WITH PYROLYTIC GRAPHITE COATINGS FOR USE AS THROAT INSERTS OF SOLID PROPELLENT ROCKET NOZZLES. IN ADDITION TO COST AND TECHNICAL PROPOSALS, THE STATEMENT OF WORK (SOW) REQUESTED PRESENTATION OF A SEPARATE OPTIONAL COST AND TECHNICAL PROPOSAL WITH A RECOMMENDATION COVERING THE MOST PROMISING AREAS FOR EXPANSION ABOVE THE ANTICIPATED 4 PERSON-YEARS OF EFFORT AND SHOULD ENCOMPASS APPROXIMATELY 5 PERSON-YEARS IN FISCAL YEAR 1975.

FOUR PROPOSALS WERE RECEIVED BY THE NOVEMBER 30, 1973, CLOSING DATE FOR RECEIPT OF PROPOSALS. THE TECHNICAL EVALUATION REQUESTED ON DECEMBER 3, 1973, WAS COMPLETED ON FEBRUARY 5, 1974. AS A RESULT, TWO OF THE PROPOSERS WERE DETERMINED TO BE TECHNICALLY UNACCEPTABLE. THE TWO REMAINING IN THE COMPETITIVE RANGE WERE TRW, RANKED TECHNICALLY ON A 100 POINT SCALE AT 65, AND FMI AT 61. THE TOTAL RESPECTIVE PRICES OF THEIR PROPOSALS WITH THE OPTIONAL PROGRAM WERE $457,446 AND $549,000. THE PROPOSALS WERE EVALUATED IN LIGHT OF THE CRITERIA STATED AT SECTION "D," "EVALUATION FOR AWARD FACTORS," WHICH, IN TURN, REFERENCED SECTION "C," PARAGRAPH C-26, "ADDITIONAL INFORMATION FOR OFFERORS." THE EVALUATION CRITERIA WERE LISTED IN PARAGRAPH C-26 IN DESCENDING ORDER OF IMPORTANCE:

M.1 1. SPECIAL TECHNICAL FACTORS (PARAMOUNT IMPORTANCE)

2. SOUNDNESS OF APPROACH (LESSER BUT CRITICAL IMPORTANCE)

3. UNDERSTANDING OF PROBLEM (LESSER BUT GREAT IMPORTANCE)

4. COMPLIANCE WITH REQUIREMENTS (LESSER BUT SIGNIFICANT IMPORTANCE)

5. COST FACTORS (LESSER BUT IMPORTANT)

M.2 SPECIAL TECHNICAL FACTORS INCLUDE THE FOLLOWING:

A. EXPERIENCE

B. BACKGROUND

C. FACILITIES

IT IS REPORTED THAT SUBSEQUENT TO THIS EVALUATION, THE DEVELOPMENT PLAN, OF WHICH THIS PROCUREMENT WAS ONE PART, WAS REDUCED IN SCOPE.

THE CONTRACTING OFFICER STATES:

THIS AFML PROGRAM IS ONE OF THE THREE INSERT DEVELOPMENT PROGRAMS BEING PURSUED AS PART OF THE AFRPL ADVANCED NOZZLE THROAT PROGRAM FOR THE SAMSO MX UPPER STAGE MOTOR. THE ORIGINAL STATEMENT OF WORK FOR THIS PROGRAM REFLECTED THE THEN CURRENT NEEDS OF THE AFRPL/SAMSO/MX PROGRAM. HOWEVER, FOLLOWING THE SUBMISSION OF THE TECHNICAL EVALUATION ON 4 FEB. 1974, THE AFRPL/SAMSO/MX DEVELOPMENT PLAN WAS MODIFIED. THE SCOPE CHANGES THAT WERE REQUIRED AS A RESULT OF THE MODIFIED DEVELOPMENT PLAN WERE NOT SUBSTANTIAL AND WOULD NOT REQUIRE RESOLICITATION OF ALL INITIAL OFFERORS PURSUANT TO ASPR 3-805.4(B). REVISED STATEMENTS OF WORK WERE THEREFORE PREPARED TO ACCOMMODATE THE REVISIONS AND TO ALLOW PURCHASE OF EQUAL SELECTED PORTIONS OF THE OPTIONAL PROGRAMS PROPOSED BY TRW AND FMI AT THE TIME OF THE ORIGINAL PROPOSAL SUBMISSIONS. ***

REVISED SOWS WERE SENT TO TRW AND FMI ON APRIL 3, 1974. AMONG OTHER THINGS, THE REVISED SOWS INCREASED THE SIZE OF THE INSERT TESTS FROM 3.5 INCHES TO 7 INCHES; ADDED 5 TEST FIRINGS; GAVE THE PROPOSERS DESIGN, FABRICATION AND ASSEMBLY RESPONSIBILITY OF THE 5 NOZZLE ASSEMBLIES; GAVE RESPONSIBILITY TO OVERSEE THE TEST FIRINGS AND CONDUCT POST-TEST ANALYSIS; AND EXTENDED PERFORMANCE FROM 18 TO 24 MONTHS. REVISED PROPOSALS WERE RECEIVED ON MAY 1, 1974, AND FORWARDED TO THE AIR FORCE MATERIALS LABORATORY (AFML) FOR EVALUATION. BOTH WERE AGAIN DETERMINED TECHNICALLY ACCEPTABLE AND THE POINT RATINGS REMAINED UNCHANGED. HOWEVER, PRICES IN THE COST PROPOSALS INCREASED: TRW $510,372; FMI-$793,272.

TECHNICAL DISCUSSIONS WERE CONDUCTED WITH EACH PROPOSER ON MAY 17, 1974. IT IS REPORTED THAT THESE DISCUSSIONS WERE DIRECTED TO THE WEAK POINTS OF THE TECHNICAL PROPOSALS TO OBTAIN CLARIFICATIONS AND POSSIBLE UPGRADINGS. THE CONTRACTING OFFICER STATES THAT FMI WAS QUESTIONED IN DEPTH IN VIEW OF THE INCREASED SCOPE OFFERED IN ITS REVISED PROPOSAL. THIS ACTION IS STATED TO HAVE BEEN OCCASIONED BY THE AIR FORCE'S (AF'S) EXPECTATION THAT THE REVISED SOW WOULD REDUCE THE LEVEL OF EFFORT, AND CONSEQUENTLY, COSTS. IN PARTICULAR, FMI'S PROPOSED INCREASE IN ENGINEERING HOURS WAS QUESTIONED. THE JUSTIFICATION OFFERED AT THAT TIME BY FMI WAS ACCEPTED BY THE PROJECT ENGINEER AS REASONABLE ON THE ONE HAND, WHILE AT THE SAME TIME, FMI WAS TOLD THAT ITS PROPOSED ENGINEERING HOURS WERE VERY HIGH. ALL QUESTIONS POSED TO BOTH OFFERORS DURING THESE DISCUSSIONS WERE ANSWERED TO THE SATISFACTION OF THE PROJECT ENGINEER.

ON MAY 23, 1974, ADDITIONAL DISCUSSIONS WERE PURSUED WITH BOTH OFFERORS. THE CONTRACTING OFFICER REPORTS THAT THE SUBJECTS OF THESE DISCUSSIONS WERE REPORTING REQUIREMENTS, THE SOW, AND THE SPECIAL AND GENERAL PROVISIONS THAT WOULD BE INCLUDED IN ANY SUBSEQUENT CONTRACT. AT THE CLOSE OF DISCUSSIONS, BOTH FMI AND TRW WERE INFORMED THAT THEIR BEST AND FINAL OFFERS WOULD BE REQUIRED BY MAY 30, 1974. THE BEST AND FINAL OFFERS DID NOT RESULT IN A CHANGE TO THE TECHNICAL RATINGS OF 65 AND 61 FOR TRW AND FMI, RESPECTIVELY. THE PRICES WERE: TRW-$496,450 AND FMI-$758,705. SINCE THE TECHNICAL PROPOSALS WERE CONSIDERED SUBSTANTIALLY EQUAL, AWARD WAS MADE TO TRW ON JUNE 18, 1974, IN VIEW OF ITS POTENTIAL COST SAVINGS OF $262,255.

NOTICE THAT IT HAD BEEN UNSUCCESSFUL WAS SENT TO FMI ON JUNE 20, 1974. FORMAL DEBRIEFING REQUESTED BY FMI ON JUNE I7, 1974, WAS HELD ON JULY 11, 1974. DURING THIS DEBRIEFING, FMI REQUESTED A COPY OF TRW'S SOW, AS CONTAINED IN ITS RFP AND RESULTANT CONTRACT. FMI WAS INFORMED THAT THIS DATA ONLY COULD BE OBTAINED THROUGH A FORMAL REQUEST TO THE PROCUREMENT CONTRACTING OFFICER. ON JULY 15, 1974, AN INVOICE FOR $7.40 WAS SENT TO FMI COVERING THE COST OF REPRODUCING THE DOCUMENTS. ON JULY 24, 1974, FMI PROTESTED THE AWARD TO THE AF. THE FMI CHECK FOR THE DOCUMENTS WAS RECEIVED ON JULY 30, 1974, AND THE DOCUMENTS FORWARDED THE SAME DAY. AUGUST 14, 1974, THE CONTRACTING OFFICER SENT HIS DENIAL OF THE PROTEST, WHICH WAS RECEIVED BY FMI ON AUGUST 19, 1974. THE AUGUST 21, 1974, FMI PROTEST WAS RECEIVED HERE AUGUST 26, 1974.

THERE IS A QUESTION WHETHER THE FMI PROTEST TO OUR OFFICE WAS TIMELY FILED UNDER OUR INTERIM BID PROTEST PROCEDURES AND STANDARDS, 4 C.F.R. PART 20. EVEN ASSUMING THE PROTEST UNTIMELY, WE WILL CONSIDER THE MERITS OF THE PROTEST UNDER SECTION 20.2(B) OF OUR STANDARDS AS RAISING AN ISSUE SIGNIFICANT TO PROCUREMENT PRACTICE OR PROCEDURE. SEE 52 COMP. GEN. 20 (1972). MATTER OF WILLAMETTE-WESTERN CORPORATION; PACIFIC TOWBOAT & SALVAGE CO., 54 COMP. GEN. 375 (1974).

FMI CONTENDS THAT THE DIFFERENCES IN THE REVISED SOWS RESULTED IN ITS PROPOSAL BEING BASED ON APPROXIMATELY TWICE THE LEVEL OF EFFORT REQUIRED BY TRW. IT IS TO THIS DIFFERENCE IN THE SOW THAT FMI ATTRIBUTES ITS SUBSTANTIALLY HIGHER PRICE. IN THIS VEIN, THE DIFFERENT SOW PRECLUDED FMI FROM COMPETING ON AN EQUAL PLANE WITH TRW. UNDER FMI'S ANALYSIS OF THE DIFFERENCES IN THE SOWS, THE LEVEL OF EFFORT PERMISSIBLE BY TRW WAS APPROXIMATELY $350,000 LOWER. IT IS CLEAR THAT THE REVISED SOWS ISSUED ON APRIL 3, 1974, WERE NOT IDENTICAL. THE DIFFERENCES OCCURRED IN TASKS 1,2 AND 3 OF THE SOW:TASK 1 WAS AN ANALYSIS/REQUIREMENT DEFINITION; TASK 2 WAS MATERIALS DEVELOPMENT AND FABRICATION; AND TASK 3 WAS MATERIALS CONFIGURATION.

THE AF CONTENDS THAT THE SOW DIFFERENCES WERE OCCASIONED BY ITS RECOGNITION OF THE RELATIVE STRENGTHS OF THE TWO COMPETITORS: TRW'S STRENGTH IN TASK 1 AND FMI'S STRENGTH IN TASK 2. WHILE ACKNOWLEDGING THE DIFFERENCES, THE AF MAINTAINS THAT THE SOWS WERE IDENTICAL IN SUBSTANCE AND DID NOT REQUIRE ANY EXTRA EFFORT ON FMI'S PART VIS-A-VIS TRW. AT THE TIME, THE AF EXPECTED THAT THE REVISED SOW WOULD REDUCE THE SCOPE OF THE FMI PROPOSAL FROM A TECHNICAL, AND, CONSEQUENTLY, COST STANDPOINT. FURTHER, THE REVISED SOWS AFFORDED THE AF THE OPPORTUNITY TO INCORPORATE THE SPECIFIC PROPOSER'S APPROACH, ALONG WITH THE TECHNICAL SCOPE REVISIONS, OSTENSIBLY TO ENABLE NEGOTIATIONS TO PROCEED AS SOON AS POSSIBLE. THE AF CONTENDS THAT, PARTICULARLY IN THE R&D AREA, THIS APPROACH AVOIDS ANY PROBLEM OF TECHNICAL LEVELING.

PARAGRAPH 19 OF THE REPORT FROM THE CHIEF, CONTRACT MANAGEMENT DIVISION, DIRECTORATE, PROCUREMENT POLICY, STATES:

IN CONCLUSION, MAY WE STATE THAT THE TWO STATEMENTS OF WORK FOR THE TWO TECHNICALLY ACCEPTABLE SOURCES (TRW AND FMI) WERE INDIVIDUALLY REVISED TO INCORPORATE THE ORIGINAL PROMISES AND TECHNICAL APPROACH TAKEN BY EACH OFFEROR IN RESPONSE TO THE REQUEST FOR OPTIONAL WORK ITEMS IN THE INITIAL RFP. THESE PROMISES AND TECHNICAL APPROACHES DID INCORPORATE EACH CONTRACTOR'S PRIOR KNOWLEDGE, EXPERIENCE AND ABILITIES AS THEY HAD PROPOSED ON THE INITIAL REQUEST FOR PROPOSAL. THIS DID NOT RESULT IN A MARKED DEPARTURE AND CONTRADICTIONS TO THE PREVIOUSLY SPECIFIED TECHNICAL CRITERIA BECAUSE BOTH CONTRACTORS ORIGINAL PROPOSALS WERE ADJUDGED TECHNICALLY ACCEPTABLE AND RESPONSIVE TO THE REQUEST FOR PROPOSAL. ***

SUPPORT FOR THIS PROCEDURE IS FOUND BY THE AF AT ARMED SERVICES PROCUREMENT REGULATION (ASPR) SEC. 4-105(A) (1973 ED.), WHICH STATES:

*** IN RESEARCH, EXPLORATORY DEVELOPMENT AND ADVANCED DEVELOPMENT, STATEMENTS OF WORK MUST BE INDIVIDUALLY TAILORED BY TECHNICAL AND CONTRACTING PERSONNEL TO ATTAIN THE DESIRED DEGREE OF FLEXIBILITY FOR CONTRACTOR CREATIVITY, BOTH IN SUBMITTING PROPOSALS AND IN CONTRACT PERFORMANCE. ***

THIS PROCUREMENT FALLS WITHIN THE DEFINITION OF EXPLORATORY DEVELOPMENT CONTAINED IN ASPR SEC. 4-101(A)(2) (1973 ED.).

THE SUPREME COURT IN PAUL V. UNITED STATES, 371 U.S. 245 (1963), IN COMMENTING ON THE FEDERAL PROCUREMENT POLICY, QUOTED AT PAGE 254 FROM HOUSE REPORT NO. 109, 80TH CONG., 1ST SESS., H.R. 1366, WHICH WAS ENACTED AS THE ARMED SERVICES PROCUREMENT ACT OF 1947 (NOW CODIFIED AT CHAPTER 137 OF 10 U.S.C.), AS FOLLOWS:

*** THE BILL REPRESENTS A COMPREHENSIVE REVISION AND RESTATEMENT OF THE LAWS GOVERNING THE PROCUREMENT OF SUPPLIES AND SERVICES BY THE WAR AND NAVY DEPARTMENTS. IT HOLDS TO THE TIME-TESTED METHOD OF COMPETITIVE BIDDING. AT THE SAME TIME IT PUTS WITHIN THE FRAMEWORK OF ONE LAW ALMOST A CENTURY'S ACCUMULATION OF STATUTES AND INCORPORATES NEW SAFEGUARDS DESIGNED TO ELIMINATE ABUSES, ASSURES THE GOVERNMENT OF FAIR AND REASONABLE PRICES FOR THE SUPPLIES AND SERVICES PROCURED AND AFFORDS AN EQUAL OPPORTUNITY TO ALL SUPPLIERS TO COMPETE FOR AND SHARE IN THE GOVERNMENT'S BUSINESS.

TO ASSURE THAT POTENTIAL SUPPLIERS ARE AFFORDED THE OPPORTUNITY TO COMPETE EQUALLY, EACH MUST BE GIVEN THE SAME DESCRIPTION OF THE DESIRED SUPPLIES OR SERVICES. IF THE PROCUREMENT DESCRIPTION IS NOT SUFFICIENTLY COMPLETE OR DEFINITE THAT A PRICE COMPETITION CAN BE ENTERED IMMEDIATELY, WITH THE ASSURANCE THAT ALL COMPETITORS ARE BIDDING ON THE SAME ITEM, THEN IT IS PERMISSIBLE TO NEGOTIATE WITH THE COMPETITORS TO MAKE SURE THAT THEY UNDERSTAND EXACTLY WHAT IS EXPECTED OF THEM. CF. 10 U.S.C. SEC. 2304 (A)(10) AND (A)(11).

WHEN PROCURING R&D EFFORTS, ASPR SEC. 4-106.3 (1973 ED.) COVERS THE CONDUCT OF DISCUSSIONS. BEYOND THE REQUIREMENTS OF ASPR SEC. 3-805, GENERALLY GOVERNING THE CONDUCT OF DISCUSSIONS, ASPR SEC. 4-106.3 (1973 ED.) STATES:

THE CONTRACTING OFFICER SHOULD MAKE CERTAIN THAT EACH PROSPECTIVE CONTRACTOR FULLY UNDERSTANDS THE DETAILS OF THE VARIOUS PHASES OF THE GOVERNMENT'S REQUIREMENT, ESPECIALLY THE STATEMENT OF WORK. THIS MAY BE BEST ACCOMPLISHED BY CONFERENCES BETWEEN A PROSPECTIVE CONTRACTOR, THE CONTRACTING OFFICER AND APPROPRIATE TECHNICAL PERSONNEL, PARTICULARLY WHERE THERE IS DOUBT THAT A WORK STATEMENT IS UNDERSTOOD OR WILL BE INTERPRETED CORRECTLY BY PROSPECTIVE CONTRACTORS.

FURTHER, ASPR SEC. 4-105(A) (1973 ED.), STATEMENT OF WORK, PROVIDES:

(A) THE PREPARATION AND USE OF A CLEAR AND COMPLETE STATEMENT OF WORK IS ESSENTIAL TO SOUND CONTRACTING FOR RESEARCH AND DEVELOPMENT. IN RESEARCH, EXPLORATORY DEVELOPMENT AND ADVANCED DEVELOPMENT, STATEMENTS OF WORK MUST BE INDIVIDUALLY TAILORED BY TECHNICAL AND CONTRACTING PERSONNEL TO ATTAIN THE DESIRED DEGREE OF FLEXIBILITY FOR CONTRACTOR CREATIVITY, BOTH IN SUBMITTING PROPOSALS AND IN CONTRACT PERFORMANCE. CAREFUL DISTINCTION MUST BE DRAWN BETWEEN LEVEL-OF-EFFORT WORK STATEMENTS, WHICH ESSENTIALLY REQUIRE THE FURNISHING OF TECHNICAL EFFORT AND A REPORT ON THE RESULTS THEREOF, AND TASK COMPLETION TYPE WORK STATEMENTS WHICH OFTEN REQUIRE DEVELOPMENT OF TANGIBLE END ITEMS DESIGNED TO MEET SPECIFIC PERFORMANCE CHARACTERISTICS. (B) IN PREPARING STATEMENTS OF WORK, THE FOLLOWING ELEMENTS SHALL BE CONSIDERED:

(I) A GENERAL DESCRIPTION OF THE REQUIRED OBJECTIVES AND DESIRED RESULTS;

(II) BACKGROUND INFORMATION HELPFUL TO A CLEAR UNDERSTANDING OF THE REQUIREMENTS AND HOW THEY EVOLVED;

(III) TECHNICAL CONSIDERATIONS, SUCH AS ANY KNOWN SPECIFIC PHENOMENA OR TECHNIQUES;

(IV) A DETAILED DESCRIPTION OF THE TECHNICAL REQUIREMENTS AND SUBORDINATE TASKS:

(V) A DESCRIPTION OF REPORTING REQUIREMENTS AND ANY OTHER DELIVERABLE ITEMS, SUCH AS DATA, EXPERIMENTAL HARDWARE, MOCK-UPS, PROTOTYPES, ETC., AND

(VI) OTHER SPECIAL CONSIDERATIONS.

IT IS CLEARLY STRESSED IN THE REGULATION THAT, IN PROCURING R&D, IT IS PARTICULARLY IMPORTANT TO ASSURE THAT ALL COMPETITORS UNDERSTAND EXACTLY THE GOVERNMENT'S REQUIREMENTS. A CLEAR AND COMPLETE STATEMENT OF WORK IS THE PRIMARY VEHICLE TO SATISFY THAT RESPONSIBILITY. WHILE ASPR SEC. 4- 105(A) (1973 ED.) DOES SPEAK IN TERMS OF "INDIVIDUALLY TAILORING" THE SOW, WE THINK THIS SPECIALIZATION WAS NOT MEANT TO APPLY TO EACH INDIVIDUAL PROPOSAL SUBMITTED UNDER AN R&D SOLICITATION. THE DIRECTION IN THE SUBSECTION TO INDIVIDUALLY TAILOR SOWS IS, IN OUR OPINION, INTENDED TO IMPART THE PARTICULARITY OF AN INDIVIDUAL R&D PROCUREMENT AND TYPE OF EFFORT DESIRED THEREUNDER. EVEN RECOGNIZING THAT AN R&D PROCUREMENT HAS UNUSUAL PROBLEMS IN RELATION TO THE USUAL PROCUREMENT OF SUPPLIES AND SERVICES, WE CAN FIND NO AUTHORITY WHICH COUNTENANCES A DEPARTURE FROM THE BASIC PRINCIPLES OF LAW AND REGULATIONS GOVERNING THE CONDUCT OF R&D PROCUREMENTS.

ASPR SEC. 4-106 (1973 ED.) EVIDENCES THE INTENT THAT DISCUSSIONS SHOULD BE SO CONDUCTED AS TO ASSURE A COMMONALITY OF INTERPRETATION OF THE GOVERNMENT'S REQUIREMENTS. THIS INSTRUCTION IS MADE APPLICABLE PARTICULARLY WHERE DOUBT EXISTS THAT THE STATEMENT OF WORK IS BEING INTERPRETED CORRECTLY. THIS IS SO EVEN IN LIGHT OF THE DIRECTIONS FOR THE CAREFUL PREPARATION AND USE OF THE SOW IN ASPR SEC. 4-105 (1973 ED.). HERE, THE RECOGNITION OF SPECIALITY OCCURRED BEFORE DISCUSSIONS, WHEN THE SOW WAS INDIVIDUALLY TAILORED TO EACH PROPOSAL DETERMINED TO BE IN THE COMPETITIVE RANGE. HOWEVER, IT IS ONLY AT THE DISCUSSION STAGE OF THE PROCUREMENT PROCESS THAT INDIVIDUAL APPROACHES REFLECTING DIFFERENT PREDILECTIONS OF SPECIALITIES SHOULD BE RECOGNIZED.

THE AF MAINTAINS THAT ITS VERSION OF TAILORING A SOW AFTER A DETERMINATION OF COMPETITIVE RANGE HAS BEEN MADE FACILITATES THE NEGOTIATION PROCESS BY RECOGNIZING THE VARIOUS STRENGTHS OF PROPOSERS. VIEW THIS PROCEDURE AS AN IMPOSITION OF SUBJECTIVE CONCLUSIONS WHICH MIGHT ADVERSELY AFFECT ONE PROPOSAL WHILE IMPROVING THE COMPETITIVE POSTURE OF ANOTHER, NOTWITHSTANDING THAT BOTH HAVE BEEN DETERMINED TO BE WITHIN THE COMPETITIVE RANGE.

TO CLAIM, AS THE AF DOES, THAT THE SOWS ARE SUBSTANTIALLY THE SAME IS A CONCLUSION THAT IT IS NOT BORNE OUT BY THE RESULTS. THE AF HAS PRESENTED AN ANALYSIS OF THE AREAS OF COST DIFFERENCE BETWEEN FMI AND TRW, IN AN ATTEMPT TO DEMONSTRATE THAT FMI DID NOT ACCEPT ANY RISKS, THEREBY ELIMINATING ITSELF FROM THE COST COMPETITION. WE HAVE REVIEWED THE ANALYSIS AND CAN SEE THAT FMI'S PROPOSED COSTS FOR IN-HOUSE ENGINEERING HOURS, FOR EXAMPLE, WERE HIGHER THAN ENVISIONED BY THE AF AND PROPOSED BY TRW. THE AF TRACES THE INCREASE TO EXPANDED EFFORTS IN TASKS 2 AND 4 AND CONCLUDES THAT THIS RESULTED WITHOUT ANY CONTRIBUTION ON THE PART OF THE AF. ON THE BASIS OF THE RECORD BEFORE OUR OFFICE, WE ARE UNABLE TO TRANSLATE THE ENGINEERING AND LABOR EFFORT INTO PROPOSED COSTS THAT MAY HAVE BEEN OCCASIONED BY THE DIFFERENCES IN THE SOWS. THIS IS THE THRUST OF THE FMI PROTEST. NOR CAN WE ESTABLISH FROM THE RECORD WHETHER THESE MATTERS WERE THE SUBJECT OF ANY DISCUSSIONS SINCE NO MEMORANDUM OF PRICE DISCUSSIONS WITH FMI WAS MADE AS REQUIRED BY ASPR SEC. 3-811 (1973 ED.). THIS, WE UNDERSTAND, WAS BECAUSE THE AF RECEIVED PROPOSALS WITH A SIGNIFICANT COST SPREAD IN FAVOR OF TRW. IN VIEW OF THE SUBSTANTIAL DISPARITY IN PRICES AND THE FACT THAT AWARD HAS BEEN MADE AND WORK COMMENCED, WE ARE NOT DISPOSED TO RECOMMEND CORRECTIVE ACTION SINCE FMI FAILED TO DEMONSTRATE HOW THE DIFFERENCES IN SOW WORDING CAUSED ITS PRICES TO INCREASE OVER ITS INITIALLY PROPOSED PRICES. HOWEVER, WE ARE RECOMMENDING BY SEPARATE LETTER OF TODAY TO THE SECRETARY OF THE AIR FORCE THAT THIS PRACTICE OF TAILORING THE SOW TO INDIVIDUALLY SUIT PARTICULAR PROPOSALS BE TERMINATED IN FUTURE PROCUREMENTS.

TO EXTRAPOLATE, WE BELIEVE THAT IT WOULD BE EQUALLY INAPPROPRIATE TO INITIALLY TAILOR SOWS TO REFLECT THE INDIVIDUAL RESPECTIVE STRENGTHS AND WEAKNESSES OF PROSPECTIVE PROPOSERS.

WHILE THE AF MAY MAKE EVERY GOOD FAITH EFFORT TO DEFINE THE SOW FOR EACH PROPOSER IN TERMS SUBSTANTIALLY THE SAME - BUT NOT IDENTICAL - THE USE OF DIFFERENT PHRASEOLOGY AND/OR SENTENCE STRUCTURE MAY SHIFT AN EMPHASIS SO AS TO CHANGE THE INTERPRETATION BY A PROPOSER OF THE INTENDED REQUIREMENTS. AGAIN, AS REFLECTED IN ASPR SEC. 4-106.3 (1973 ED.), INTERPRETATION OF THE SOW IN THE CORRECT MANNER, AS INTENDED BY THE GOVERNMENT, IS THE DESIRED GOAL. THIS MAY BE DIFFICULT ENOUGH WHEN ALL COMPETITORS ARE BASING THEIR INTERPRETATION ON THE SAME DOCUMENT. WHEN EACH FIRM IS VIEWING A DIFFERENT SOW, IT IS FAR MORE SPECULATIVE THAT THEY WILL HAVE ESSENTIALLY THE SAME UNDERSTANDING OF THE GOVERNMENT'S REQUIREMENTS. FURTHER, UNDER THE METHOD EMPLOYED HERE, EACH PROSPECTIVE CONTRACTOR, VIEWING A STATEMENT OF WORK TAILORED TO ITS RESPECTIVE ABILITIES AND SHORTCOMINGS COULD HAVE A DISTORTED VIEW OF WHAT WOULD BE REQUIRED OF IT TO WIN THE COMPETITION. THIS MAY FAIRLY BE SAID TO WORK TO A PROPOSER'S COMPETITIVE DISADVANTAGE.

CONCERNING FMI'S ALLEGATION THAT THE AF'S RELIANCE ON AFSC PAMPHLET 800-6 WAS MISPLACED AND INAPPROPRIATE, WE HAVE MEASURED THE CONDUCT OF THE PROCUREMENT AGAINST THE STANDARDS OF ASPR. CHAPTER 3 OF THE PAMPHLET, RESEARCH AND TECHNOLOGY STATEMENTS OF WORK, IS THE PART HERE IN QUESTION. INITIALLY, CHAPTER 1, SECTION 1-2, OBJECTIVES, INDICATE THAT THE PAMPHLET WAS INTENDED TO PROVIDE "*** GUIDANCE IN THE ESTABLISHMENT OF STATEMENTS OF WORK WHICH ARE: A. TAILORED TO MEET PROGRAM NEEDS. RESPONSIVE TO PROGRAM PLANNING AND SYSTEM DEFINITION REQUIREMENTS AND CONSTRAINTS. C. COMPATIBLE WITH THE STANDARD DOD WORK BREAKDOWN STRUCTURE. ***" THE PRECEDING INSTRUCTION MAKES IT CLEAR THAT THE PAMPHLET WAS INTENDED AS AN INTERNAL OPERATING DOCUMENT AND AN AID TO AF PROCUREMENT PERSONNEL. WE HAVE NO OBJECTION TO AF'S RELIANCE UPON IT IN FORMULATING A SOW, PROVIDED ASPR REMAINS THE GOVERNING STANDARD.

THE PROTEST IS DENIED.