B-182566, APR 10, 1975

B-182566, APR 10, 1975

1. WHERE PROTESTER DOES NOT OBJECT TO EVENTS SURROUNDING CANCELLATION AND RESOLICITATION OF REQUIREMENTS UNTIL TWO MONTHS THEREAFTER, PROTEST IS UNTIMELY. WHERE OFFEROR KNOWS BASIS FOR ITS PROTEST AT TIME OF CANCELLATION AND RESOLICITATION, OUR BID PROTEST PROCEDURES DO NOT AFFORD THE OPTION OF COMPETING UNDER THE RESOLICITATION AND THEN, IF THE OFFEROR IS UNSUCCESSFUL, OF PROTESTING THE EARLIER DETERMINATION TO CANCEL AND RESOLICIT. 2. CONTENTION THAT SITE VISITS CONDUCTED INDIVIDUALLY FOR ALL POTENTIAL OFFERORS VIOLATED ASPR SEC. 3-505(C) IS WITHOUT FOUNDATION SINCE THAT SECTION DOES NOT PROHIBIT INDIVIDUAL CONTACT WITH PROSPECTIVE OFFERORS, BUT IS INTENDED TO PRECLUDE EXCHANGE OF TECHNICAL INFORMATION WITH ONE OFFEROR TO DETRIMENT OF OTHERS. ALLEGATION WAS BASED ON SPECULATION AS TO WHAT MIGHT HAVE OCCURRED AND IT WAS NOT ESTABLISHED THAT PREFERENTIAL TREATMENT WAS GIVEN. MOREOVER, PROTESTER'S FAILURE TO RAISE OBJECTION UNTIL 6 WEEKS AFTER VISITS, IN WHICH IT FULLY PARTICIPATED, RENDERS ITS PROTEST ON THIS ACCOUNT UNTIMELY. 3. WHERE ONE DAY PRIOR TO RECEIPT OF BEST AND FINAL OFFERS, CONTRACTING AGENCY ORALLY EXPLAINED THAT RFP'S MAN-HOUR REQUIREMENT WAS INCLUSIVE OF FRINGE BENEFITS, WRITTEN AMENDMENT TO SOLICITATION WAS NOT REQUIRED, SINCE ALL OFFERORS WERE SO ADVISED AND EXPLANATION REQUIRED ONLY RELATIVELY SIMPLE COMPUTATIONAL ADJUSTMENT WHICH ALL WERE ABLE TO MAKE WITHIN THE TIME AVAILABLE. 4. CONTENTION THAT OFFEROR AWARDED CONTRACT IS INCAPABLE OF FURNISHING TECHNICALLY COMPETENT PERSONNEL SINCE IT HAD ATTEMPTED TO HIRE PROTESTER'S EMPLOYEES WHICH HAD PERFORMED PREDECESSOR CONTRACT IS NOT SUPPORTED BY THE RECORD. RATHER THE RECORD SHOWS THAT QUESTIONS CONCERNING ADEQUACY OF SUCCESSFUL OFFEROR'S PERSONNEL STRUCTURE AND SKILLS OF ITS EMPLOYEES WERE RESOLVED IN NEGOTIATIONS AND IN ITS BEST AND FINAL OFFER. 5. WHILE WE HAVE RECOGNIZED THAT COSTS OF PHASING IN A NEW CONTRACTOR MAY BE CONSIDERED AS AN EVALUATION FACTOR WHERE DESIRABLE AND WHERE COSTS ARE NOT SPECULATIVE BUT ACCURATELY DEPICT GOVERNMENT'S COST, THERE IS NO REQUIREMENT FOR INCLUSION OF PHASE-IN COSTS AS EVALUATION FACTOR. WHERE THERE IS NO MENTION OF SUCH COSTS IN THE SOLICITATION, AGENCY MAY NOT INCLUDE CONSIDERATION OF PHASE-IN COSTS IN EVALUATING PROPOSALS OF NON- INCUMBENT OFFERORS. 6. PROTESTER'S ALLEGATION THAT NEGOTIATION OF CEILING ON OVERHEAD RATES NECESSARILY CONSTITUTES THE "SEEKING OF PREFERENTIAL OVERHEAD RATES" UNDER THE PROVISIONS OF ASPR SEC. 3-807.11 IS REJECTED. REVIEW OF SUCCESSFUL OFFEROR'S COST PROPOSAL REFUTES ALLEGATION THAT CEILING RATE NEGOTIATED IS PREFERENTIAL SINCE IT IS BASED ON AUDITED FIGURES AND IS CONSISTENT WITH OFFEROR'S PROJECTED G&A EXPENSES OVER ITS PROJECTED TOTAL VOLUME OF BUSINESS.

EG&G, INCORPORATED:

EG&G, INCORPORATED (EG&G) PROTESTS THE DEPARTMENT OF THE AIR FORCE'S AWARD OF A CONTRACT TO DYNALECTRON (DYNALECTRON) UNDER REQUEST FOR PROPOSALS (RFP) NO. F29601-75-R-0019 FOR THE "OPERATION AND MAINTENANCE OF THE SANDIA OPTICAL RANGE."

THE AIR FORCE'S REQUIREMENTS FOR THE OPERATION AND MAINTENANCE OF THE SANDIA OPTICAL RANGE INITIALLY WERE SOLICITED UNDER RFP F29601-74-R 0109. FOR THE EFFORT INVOLVED THE AIR FORCE ESTIMATED AN ANNUAL COST OF $160,380 BASED UPON 2 MAN-YEARS OF PROFESSIONAL/ENGINEERING EFFORT AND 8 MAN-YEARS OF TECHNICAL/SUPPORT EFFORT PER YEAR.

ON THE CLOSING DATE FOR RECEIPT OF PROPOSALS, OFFERS WERE RECEIVED FROM THREE FIRMS: EG&G (THE PROTESTER AND INCUMBENT CONTRACTOR); CELESCO INDUSTRIES (CELESCO); AND AVCO EVERETT RESEARCH LABORATORY (AVCO). INASMUCH AS AVCO WAS FOUND TO BE TECHNICALLY UNACCEPTABLE, NEGOTIATIONS WERE ENTERED INTO WITH CELESCO AND EG&G. EG&G WAS TENTATIVELY SELECTED AS THE SUCCESSFUL OFFEROR AND WAS INFORMED OR BECAME AWARE OF THAT FACT ON OR ABOUT JULY 30, 1974. ON THE FOLLOWING DAY, THE CONTRACTING OFFICER ADVISED EG&G THAT NEGOTIATIONS WOULD BE REOPENED PURSUANT TO A REVISED STATEMENT OF WORK.

A REVISED STATEMENT OF WORK WAS NEVER ISSUED, HOWEVER, AND INSTEAD THE AIR FORCE ISSUED A NEW SOLICITATION, RFP F29601-75-R-0019, ON AUGUST 22, 1974. THE STATEMENT OF WORK UNDER THE RESOLICITATION CALLED FOR EXPANDED EFFORT UNDER THE CONTRACT, REQUIRING EFFORT IN SUPPORT OF ADDITIONAL SYSTEMS INCLUDING THE HIGH POWERED OPTICAL SYSTEMS, THE DIGITAL DATA SYSTEM, DIAGNOSTIC MEASUREMENTS, AND REQUIRED THAT THE CONTRACTOR BE RESPONSIBLE FOR ADDITIONAL DOCUMENTATION. UNDER THE RESOLICITATION'S BROADENED REQUIREMENTS THE GOVERNMENT'S ESTIMATE WAS INCREASED TO $615,000, BASED UPON 4 MAN-YEARS OF PROFESSIONAL/ENGINEERING EFFORT AND 14 MAN-YEARS OF TECHNICIAN/SUPPORT EFFORT.

BY THE SEPTEMBER 23, 1974, DATE FOR RECEIPT OF PROPOSALS, FIVE OFFERS HAD BEEN RECEIVED IN RESPONSE TO THE NEW SOLICITATION. ALTHOUGH THE EVALUATION TEAM INITIALLY RECOMMENDED THAT NEGOTIATIONS PROCEED ONLY WITH AVCO AND EG&G, AND THAT DYNALECTRON AS WELL AS TWO OTHER OFFERORS BE ELIMINATED FROM THE COMPETITIVE RANGE, THE CONTRACTING OFFICER CONCLUDED THAT THE RECOMMENDATION TO DROP DYNALECTRON FROM THE COMPETITION WAS BASED UPON QUESTIONS REGARDING ITS MANAGEMENT AND PERSONNEL STRUCTURES WHICH MIGHT BE RESOLVED DURING THE NEGOTIATION PROCESS. ACCORDINGLY, NEGOTIATIONS WERE HELD WITH ALL THREE FIRMS WITHIN THE COMPETITIVE RANGE ON OCTOBER 28, 1974.

BEST AND FINAL OFFERS WERE RECEIVED FROM ALL FIRMS BY OCTOBER 29, 1974. AVCO'S OFFER WAS SUBSTANTIALLY IN EXCESS OF THE $588,389 OFFERED BY EG&G, WHILE, IN TURN, EG&G'S OFFER WAS HIGHER THAN DYNALECTRON'S BY NEARLY $80,000. IN ADDITION, DYNALECTRON AGREED TO A CEILING ON GENERAL AND ADMINISTRATIVE (G&A) EXPENSES. ON OCTOBER 30, 1974, DYNALECTRON WAS TENTATIVELY SELECTED AS THE SUCCESSFUL OFFEROR AND ON THAT SAME DATE EXECUTED A LETTER CONTRACT TO PROVIDE UNINTERRUPTED OPERATION OF THE SANDIA OPTICAL RANGE SINCE EG&G'S PREDECESSOR CONTRACT WAS TO EXPIRE ON THE FOLLOWING DAY.

IN ITS PROTEST, EG&G RAISES SEVERAL BASIC OBJECTIONS TO THE MANNER IN WHICH THE PROCUREMENT WAS CONDUCTED. THE FIRST THREE RELATE TO THE AIR FORCE'S CANCELLATION OF THE INITIAL RFP, F29601-74-R-0109, AND SUBSEQUENT RESOLICITATION OF THAT REQUIREMENT AS EXPANDED UNDER RFP F29601-75-R- 0019. SPECIFICALLY, EG&G STATES:

"1. EG&G WAS ADVISED ON JULY 30, 1974, THAT IT HAD RECEIVED A CONTRACT AWARD FOR SUBSTANTIALLY THE SAME REQUIREMENTS SET FORTH IN THE SUBJECT SOLICITATION AND ADVISED THAT CONTRACT NUMBER F29601-75-C-0011 HAD BEEN ASSIGNED.

"2. ON JULY 31, 1974, EG&G WAS ADVISED *** THAT DUE TO AN ERROR ON THE PART OF THE PROCURING ACTIVITY, THAT NO BASIS FOR COST AWARD EXISTED, ALTHOUGH BASIS FOR TECHNICAL AWARD DID EXIST. EG&G WAS ADVISED THAT A REVISED STATEMENT OF WORK WOULD BE ISSUED TO THOSE REMAINING IN THE COMPETITION, REQUIRING ONLY REPRICING AND AWARD WOULD THEN BE MADE.

"3. CONTRARY TO 2 ABOVE, THE PROCURING ACTIVITY ISSUED A NEW SOLICITATION FOR SUBSTANTIALLY THE SAME REQUIREMENTS TO A SECOND OPEN COMPETITION."

THE COURSE OF EVENTS OF WHICH EG&G COMPLAINS OCCURRED BETWEEN JULY 30 AND AUGUST 22, 1974, MORE THAN TWO MONTHS PRIOR TO OCTOBER 31, 1974, THE DATE ON WHICH THE COMPANY FILED ITS PROTEST WITH THIS OFFICE. IN REGARD TO THE TIME FOR FILING PROTESTS, OUR INTERIM BID PROTEST PROCEDURES AND STANDARDS, 4 C.F.R. SEC. 20.2(A) (1974), PROVIDE:

"(A) PROTESTERS ARE URGED TO SEEK RESOLUTION OF THEIR COMPLAINTS INITIALLY WITH THE CONTRACTING AGENCY. PROTESTS BASED UPON ALLEGED IMPROPRIETIES IN ANY TYPE OF SOLICITATION WHICH ARE APPARENT PRIOR TO BID OPENING OR THE CLOSING DATE FOR RECEIPT OF PROPOSALS SHALL BE FILED PRIOR TO BID OPENING OR THE CLOSING DATE FOR RECEIPT OF PROPOSALS. IN OTHER CASES, BID PROTESTS SHALL BE FILED NOT LATER THAN 5 DAYS AFTER THE BASIS FOR PROTEST IS KNOWN OR SHOULD HAVE BEEN KNOWN, WHICHEVER IS EARLIER. A PROTEST HAS BEEN FILED INITIALLY WITH THE CONTRACTING AGENCY, ANY SUBSEQUENT PROTEST TO THE GENERAL ACCOUNTING OFFICE FILED WITHIN 5 DAYS OF NOTIFICATION OF ADVERSE AGENCY ACTION WILL BE CONSIDERED PROVIDED THE INITIAL PROTEST TO THE AGENCY WAS MADE TIMELY. THE TERM 'FILED' AS USED IN THIS SECTION MEANS RECEIPT IN THE CONTRACTING AGENCY OR IN THE GENERAL ACCOUNTING OFFICE AS THE CASE MAY BE AND PROTESTERS ARE, THEREFORE, CAUTIONED THAT PROTESTS SHOULD BE TRANSMITTED OR DELIVERED IN THAT MANNER WHICH WILL ASSURE EARLIEST RECEIPT."

IN 52 COMP. GEN. 792 (1973) WE ADDRESSED THE ISSUE OF THE TIMELINESS OF A PROTEST AGAINST THE CANCELLATION OF A SOLICITATION AND THE RESOLICITATION OF THAT REQUIREMENT. IN THAT CASE, AS HERE, THE PROTESTER HAD PARTICIPATED IN THE RESOLICITATION AND DID NOT INITIATE ITS PROTEST UNTIL AFTER IT HAD BEEN UNSUCCESSFUL IN THE RECOMPETITION. HAVING FOUND THE PROTEST TO HAVE BEEN UNTIMELY FILED, WE THERE EXPLAINED THAT THE FUNCTION OF THE FILING REQUIREMENT IS TO ASSURE THAT PROTESTS MAY BE EXPEDITIOUSLY RESOLVED AT A STAGE IN THE PROCUREMENT PROCESS WHERE EFFECTIVE REMEDIAL ACTION MAY BE TAKEN ON MERITORIOUS PROTESTS. A PROTESTER'S FAILURE TO RAISE ANY OBJECTION TO CANCELLATION OF A SOLICITATION UNTIL AFTER AWARD HAS BEEN MADE UNDER A RESOLICITATION NOT ONLY MAKES REMEDIAL ACTION DIFFICULT, BUT IS UNFAIR TO THOSE OFFERORS WHO MAY HAVE PARTICIPATED IN THE RESOLICITATION AS WELL AS TO THE GOVERNMENT AGENCY INVOLVED. WHERE AN OFFEROR KNOWS OR SHOULD HAVE KNOWN THE BASIS FOR ITS PROTEST AT THE TIME OF CANCELLATION AND RESOLICITATION, OUR REGULATIONS MAY NOT BE USED TO AFFORD IT THE OPTION OF COMPETING UNDER THE RESOLICITATION AND THEN, IF UNSUCCESSFUL, PROTESTING THE EARLIER DETERMINATION TO CANCEL AND RESOLICIT.

WE CANNOT ACCEPT EG&G'S VIEW THAT ITS PROTEST IS AGAINST THE TOTALITY OF "PROCUREMENT ACTIONS FROM THE START OF RFP F29601-74-R-0109 TO FINAL AWARD UNDER RFP F29601-75-R-0019", NOR CAN WE AGREE THAT ITS TIMELY PROTEST TO ANY MATTER CONCERNING THE PROCUREMENT ACTION RENDERS TIMELY ITS PROTEST TO ALL ACTIONS CONCERNING THAT PROCUREMENT. THE BASES FOR EG&G'S PROTEST ARE SEPARABLE AND EACH MUST ITSELF QUALIFY AS TIMELY OR COME WITHIN ONE OF THE EXCEPTIONS CONTAINED AT 4 C.F.R. SEC. 20.2(B) (1974) TO THE TIMELINESS REQUIREMENT. SEE, FOR EXAMPLE, MATTER OF THE SINGER COMPANY-KEARFOTT DIVISION, B-180606, AUGUST 20, 1974. WHILE EG&G POINTS OUT THAT IT COMPLAINED TO THE CONTRACTING OFFICER AT THE TIME OF THE RESOLICITATION, IT DOES NOT APPEAR THAT THAT GENERAL COMPLAINT CONSTITUTED A PROTEST TO THE AGENCY.

EG&G'S NEXT ALLEGATION IS THAT THE CONTRACTING OFFICER MAY HAVE VIOLATED ARMED SERVICES PROCUREMENT REGULATION (ASPR) SEC. 3 505(C)(1974 ED.) POSSIBLY PROVIDING TECHNICAL INFORMATION TO INDIVIDUAL OFFERORS WHICH WAS NOT EQUALLY CONVEYED TO ALL OFFERORS. EG&G'S CONCERN IS WITH THE FACT THAT BETWEEN SEPTEMBER 5 AND 13, 1974, PRIOR TO THE DATE FOR RECEIPT OF PROPOSALS, EACH OFFEROR WAS AFFORDED AN OPPORTUNITY TO VISIT THE SANDIA OPTICAL RANGE FACILITY. THESE INDIVIDUAL VISITS WERE THE OUT-GROWTH OF AN INITIAL SITE VISIT FOR ALL OFFERORS ON AUGUST 30, 1974, AT THE COMPLETION OF WHICH DYNALECTRON HAD REQUESTED A RETURN VISIT TO THE FACILITY. PRESUMABLY, EG&G'S CONCERN IS THAT THESE INDIVIDUAL SITE VISITS AFFORDED AN OPPORTUNITY FOR TECHNICAL INFORMATION TO BE IMPARTED TO ONE OFFEROR THAT WAS NOT MADE AVAILABLE TO ALL OFFERORS. IN THIS REGARD, ASPR SEC. 3- 505(C) PROVIDES:

"(C) ANY INFORMATION GIVEN TO A PROSPECTIVE OFFEROR OR QUOTER CONCERNING A REQUEST FOR PROPOSALS OR REQUEST FOR QUOTATIONS SHALL BE FURNISHED PROMPTLY TO ALL OTHER PROSPECTIVE OFFERORS OR QUOTERS AS AN AMENDMENT TO THE REQUEST, WHETHER OR NOT A PREPROPOSAL CONFERENCE IS HELD, IF SUCH INFORMATION IS NECESSARY TO OFFERORS OR QUOTERS IN SUBMITTING PROPOSALS OR QUOTATIONS ON THE REQUEST, OR IF THE LACK OF SUCH INFORMATION WOULD BE PREJUDICIAL TO UNINFORMED OFFERORS OR QUOTERS. NO AWARD SHALL BE MADE ON A REQUEST FOR PROPOSALS UNLESS SUCH AMENDMENT THERETO HAS BEEN ISSUED IN SUFFICIENT TIME TO PERMIT PROSPECTIVE OFFERORS TO CONSIDER SUCH INFORMATION IN SUBMITTING OR MODIFYING THEIR PROPOSALS."

IN REGARD TO EG&G'S SUGGESTION THAT VARYING TECHNICAL INFORMATION MAY HAVE BEEN TRANSMITTED TO INDIVIDUAL OFFERORS, THE AIR FORCE STATES:

"*** THE RETURN TO THE SITE BY INDIVIDUAL FIRMS UNDER IDENTICAL GROUND RULES FOR ADDITIONAL ORIENTATION AND GENERAL TECHNICAL DISCUSSION DID NOT CHANGE, NOR REQUIRE CLARIFICATION TO, ONE SINGLE REQUIREMENT AS SET FORTH IN THE SOLICITATION. IT WAS AN EFFORT TO ALLOW EACH FIRM TO FURTHER FAMILIARIZE ITSELF WITH THE PHYSICAL RANGE FACILITIES, THEIR LOCATION, AND THEIR OPERATION IN SUFFICIENT DETAIL TO PERMIT SUBMISSION OF MEANINGFUL TECHNICAL PROPOSALS. ALL FIVE FIRMS WHO SUBMITTED PROPOSALS, INCLUDING EG&G, INC. TOOK ADVANTAGE OF THIS OPPORTUNITY AND DID RE-VISIT THE SITE. EACH FIRM WAS AFFORDED THE SAME OPPORTUNITY FOR THE SITE REVISIT, AND EACH FIRM WAS ESCORTED BY ONSITE GOVERNMENT PERSONNEL."

OUR REVIEW OF THE RECORD INDICATES THAT EG&G IS UNABLE TO POINT TO ANY SPECIFIC INSTANCE OF TECHNICAL INFORMATION BEING GIVEN TO ANY INDIVIDUAL OFFEROR TO THE DETRIMENT OF ITSELF OR ANY OTHER OFFEROR, AND THAT ITS ALLEGATION OF IMPROPRIETY IS BASED ON SPECULATION AS TO WHAT MIGHT HAVE OCCURRED. IN OUR VIEW, ASPR SEC. 3-505(C) IS NOT INTENDED TO PROHIBIT ANY CONTACT WITH PROSPECTIVE OFFERORS ON AN INDIVIDUAL BASIS, BUT IS INTENDED TO PRECLUDE THE EXCHANGE OF TECHNICAL INFORMATION WITH ONE OFFEROR TO THE DETRIMENT OF OTHERS.

WE HAVE FOUND NO EVIDENCE OF A VIOLATION OF ASPR SEC. 3-505(C), SEE MATTER OF BDM SERVICES COMPANY, B-180245(1), MAY 9, 1974. MOREOVER, WE POINT OUT THAT EG&G'S PARTICIPATION IN THE INDIVIDUAL SITE VISITS AND ITS FAILURE TO OBJECT THERETO UNTIL SOME SIX WEEKS LATER IS UNTIMELY IN VIEW OF THE REQUIREMENT OF OUR REGULATIONS THAT PROTESTS BE INITIATED WITHIN 5 WORK DAYS AFTER THE BASIS FOR PROTEST IS KNOWN.

EG&G'S REMAINING ALLEGATIONS RELATE TO EVENTS OF WHICH THE COMPANY BECAME AWARE DURING NEGOTIATIONS ON OCTOBER 28, 1974, AND IN CONNECTION WITH AWARD TO DYNALECTRON ON OCTOBER 30, 1974. REGARDING THE EVENTS WHICH OCCURRED DURING NEGOTIATIONS, EG&G STATES:

"EG&G WAS ADVISED DURING NEGOTIATIONS HELD OCTOBER 28, 1974, THAT THE SOLICITATION REQUIREMENT THAT A MAN-YEAR WAS EQUAL TO 2080 HOURS WAS INCORRECT, AND SHOULD BE ADJUSTED TO REFLECT THE CONTRACTOR'S FRINGE BENEFIT POLICY, THEREBY PLACING BIDDERS ON AN UNEQUAL BASIS IN TERMS OF THE NUMBER OF MAN-HOURS TO BE PROVIDED PER MAN-YEAR, DUE TO VARIANCES IN INDIVIDUAL CONTRACTOR'S FRINGE BENEFIT POLICIES. ALTHOUGH THE PROCURING ACTIVITY HAD PRIOR KNOWLEDGE OF THIS CHANGE IN SUBSTANCE TO THE SOLICITATION, IT WAS RECEIVED ONE (1) DAY PRIOR TO SUBMISSION OF BEST AND FINAL OFFERS WITHOUT FORMAL AMENDMENT TO THE SOLICITATION IN VIOLATION OF ASPR (3-805.4)."

THE AIR FORCE REPORTS THAT IN THE COURSE OF NEGOTIATIONS ON OCTOBER 28, 1975, IT DID EXPLAIN TO ALL OFFERORS THAT THE DEFINITION OF A LABOR YEAR CONTAINED IN THE RFP WAS INTENDED TO REFLECT THE OFFEROR'S FRINGE BENEFIT POLICY, I.E., THAT THE 2080 HOURS WAS MEANT TO INCLUDE VACATION TIME, SICK LEAVE AND HOLIDAYS. THE AIR FORCE EXPLAINS THAT DURING THE EVALUATION PROCESS IT BECAME APPARENT THAT SOME PROPOSALS HAD BEEN STRUCTURED ON THE BASIS OF 2080 MAN-HOURS PER YEAR IN ADDITION TO, RATHER THAN INCLUSIVE OF, VACATION TIME, SICK LEAVE AND HOLIDAYS, BUT THAT THIS CAME TO LIGHT ONLY ONE AND ONE-HALF DAYS BEFORE NEGOTIATIONS BEGAN ON OCTOBER 28. FOR THIS REASON, DURING THE COURSE OF NEGOTIATIONS WITH ALL OFFERORS, IT UNDERTOOK ORALLY TO EXPLAIN ITS INTENTION WITH RESPECT TO THE MAN-HOUR REQUIREMENT.

IN REGARD TO EG&G'S CONCERN THAT THE EXPLANATION WAS ISSUED ORALLY AND ONLY ONE DAY PRIOR TO SUBMISSION OF BEST AND FINAL OFFERS, WE NOTE THAT ASPR SEC. 3-805.4(A)(1974 ED.) PROVIDES AS FOLLOWS:

"WHEN, EITHER BEFORE OR AFTER RECEIPT OF PROPOSALS, CHANGES OCCUR IN THE GOVERNMENT'S REQUIREMENTS OR A DECISION IS MADE TO RELAX, INCREASE OR OTHERWISE MODIFY THE SCOPE OF WORK OR STATEMENT OF REQUIREMENTS, SUCH CHANGE OR MODIFICATION SHALL BE MADE IN WRITING AS AN AMENDMENT TO THE SOLICITATION. WHEN TIME IS OF THE ESSENCE, ORAL ADVICE OF CHANGES MAY BE GIVEN IF (I) THE CHANGES INVOLVED ARE NOT COMPLEX IN NATURE, (II) A RECORD IS MADE OF THE ORAL ADVICE GIVEN, (III) ALL FIRMS TO BE NOTIFIED *** ARE NOTIFIED AS NEAR TO THE SAME TIME AS FEASIBLE, PREFERABLY THE SAME DAY, AND (IV) THE ORAL ADVICE IS PROMPTLY CONFIRMED BY THE WRITTEN AMENDMENT." IN THE INSTANT CASE, THE ORAL ADVICE WAS NOT OF A CHANGE IN THE GOVERNMENT'S REQUIREMENTS, BUT WAS SIMPLY AN EXPLANATION OF AN EXISTING REQUIREMENT. UNDER THESE CIRCUMSTANCES, WE DO NOT THINK IT WAS NECESSARY TO AMEND THE SOLICITATION IN WRITING. WE NOTE THAT ALL OFFERORS WERE GIVEN THE SAME TIME FRAME WITHIN WHICH TO INCORPORATE THAT EXPLANATION IN THEIR BEST AND FINAL OFFERS. SINCE THE EXPLANATION REQUIRED ONLY A RELATIVELY SIMPLE COMPUTATIONAL ADJUSTMENT WHICH ALL OFFERORS WERE ABLE TO MAKE, WE ARE UNABLE TO FIND THAT THE LACK OF A WRITTEN AMENDMENT AND OF AN EXTENSION OF THE DATE FOR BEST AND FINAL OFFERS WAS PREJUDICIAL TO ANY OFFEROR.

EG&G'S FINAL ALLEGATION STEMS FROM THE BELIEF THAT ITS TECHNICAL EXPERTISE GREATLY EXCEEDS THAT OF DYNALECTRON. IN SUPPORT OF ITS CONTENTION THAT DYNALECTRON CANNOT MEET THE TECHNICAL REQUIREMENTS OF THE SOLICITATION AT ITS ESTIMATED COST, EG&G HAS SUBMITTED A STATEMENT INDICATING THAT SEVERAL OF ITS OWN KEY PERSONNEL WERE APPROACHED BY DYNALECTRON ABOUT EMPLOYMENT WITH THAT COMPANY AND WERE ASKED IF THEIR RESUMES MIGHT BE USED BY DYNALECTRON IN SUBMISSION OF ITS BEST AND FINAL OFFER. SINCE IT IS EG&G'S UNDERSTANDING THAT DYNALECTRON'S OVERTURES TO ITS EMPLOYEES CONTINUED AFTER AWARD OF THE CONTRACT, THE PROTESTER QUESTIONS HOW DYNALECTRON COULD HAVE SCORED SATISFACTORILY UNDER EVALUATION CRITERION NUMBER A2, "PERSONNEL PROPOSED." THE FACT (AS EG&G UNDERSTANDS IT) THAT DYNALECTRON OFFERED THESE KEY PERSONNEL SALARY INCREASES LEADS PROTESTER FURTHER TO QUESTION WHETHER DYNALECTRON'S PRICE WAS REALISTIC.

WHILE THE PROTESTER EXPRESSES DOUBT WHETHER DYNALECTRON CAN SATISFACTORILY PERFORM IN A NUMBER OF AREAS, IT APPEARS THAT EG&G'S MAIN CONCERN IS ITS BELIEF THAT IT IS MORE TECHNICALLY COMPETENT TO PERFORM THE WORK REQUIRED. ITS ARGUMENT IN THIS REGARD IS BASED UPON ITS UNDERSTANDING THAT THE EVALUATION CRITERIA CONTEMPLATED AWARD BASED ON A COMBINATION OF THE HIGHEST TECHNICAL COMPETENCE AND MOST REALISTIC COST ESTIMATE. EG&G STATES:

"*** FROM THE CRITERIA ONE WOULD ASSUME THAT PROOF OF SCIENTIFIC AND TECHNICAL COMPETENCE, COUPLED WITH A THOROUGH UNDERSTANDING OF THE SOW REQUIREMENTS ARE FAR MORE IMPORTANT THAN THE TOTAL ESTIMATE COST AND FEE. IN OTHER WORDS, ESTIMATED COSTS SHOULD BE AT A REASONABLE LEVEL COMMENSURATE WITH THE SCIENTIFIC AND TECHNICAL REQUIREMENTS."

CONCURRENTLY WITH ITS ARGUMENT THAT THE AIR FORCE GAVE UNDUE WEIGHT TO THE ESTIMATED COST AND FEE OFFERED, THE PROTESTER CLAIMS THAT THE AIR FORCE'S EVALUATION OF DYNALECTRON'S COST PROPOSAL WAS IMPROPER. APPARENTLY IT IS EG&G'S OPINION THAT CERTAIN COST FACTORS SHOULD HAVE BEEN ADDED TO DYNALECTRON'S PROPOSAL TO REFLECT THE GOVERNMENT'S "SOMEWHAT INTANGIBLE 'REAL COSTS' AND OTHER NEGATIVE RESULTS OF SEEKING A NEW CONTRACTOR THROUGH COMPETITION." SUCH COSTS, IT SUGGESTS, SHOULD INCLUDE THE FOLLOWING: "(1) ORIENTATION OF NEW CONTRACTOR, (2) TRAINING OF NEW EMPLOYEES, (3) FACILITY DOWN TIME DURING CHANGE-OVER, (4) TEST PROGRAM DELAYS AND (5) AT LEAST TEMPORARY LOWERING OF THE TECHNICAL EFFICIENCY OF THE FACILITY SUPPORT." EG&G BELIEVES THAT APPROPRIATE CONSIDERATION OF THESE COSTS WOULD HAVE MORE THAN OFFSET THE DIFFERENCES BETWEEN ITS OWN AND DYNALECTRON'S ESTIMATED COSTS.

OUR REVIEW OF THE RECORD INDICATES THAT REGARDLESS OF WHETHER DYNALECTRON MAY HAVE SOUGHT TO EMPLOY CERTAIN OF EG&G'S PERSONNEL, IT WAS NEVERTHELESS ABLE TO SUBMIT A PROPOSAL OFFERING A SATISFACTORY PERSONNEL STAFFING ARRANGEMENT. IT APPEARS THAT PRIOR TO NEGOTIATIONS THERE EXISTED SOME QUESTION AS TO THE SUFFICIENCY OF DYNALECTRON'S PROPOSED PERSONNEL STRUCTURE. THAT CONCERN WAS LESS RELATED TO THE TECHNICAL COMPETENCE OF ITS STAFF THAN TO THE FACT THAT DYNALECTRON HAD APPARENTLY PROPOSED MORE THAN THE REQUIRED LEVEL OF PROFESSIONAL EFFORT TO TAKE THE PLACE OF STAFF OR PERSONNEL AT THE HOME OFFICE. WHAT DOUBT THERE WAS AS TO TECHNICAL ABILITY RELATED TO THE "MULTI-DISCIPLINARY SKILLS" OF ITS EMPLOYEES. THESE POINTS WERE DISCUSSED DURING NEGOTIATIONS AND THE RECORD OF THOSE DISCUSSIONS INDICATES THAT THEY SERVED TO ASSURE THE AIR FORCE THAT DYNALECTRON'S PERSONNEL DID IN FACT HAVE SUFFICIENT BACK-UP SKILLS TO MEET THE CONTRACT REQUIREMENTS. AS A RESULT OF THOSE NEGOTIATIONS, DYNALECTRON REVISED ITS ORGANIZATIONAL PLAN TO CONFORM TO THE GOVERNMENT'S REQUIREMENTS. IN SUMMARY, THE RECORD OF THE PROCUREMENT ACTIONS SHOWS THAT THE AIR FORCE CONSIDERED THE SUFFICIENCY OF DYNALECTRON'S REVISED PROPOSAL AS IT RELATED TO PERSONNEL AND FOUND IT SATISFACTORY.

EG&G CONTENDS THAT ITS PROPOSAL IS TECHNICALLY SUPERIOR TO DYNALECTRON'S HENCE ENTITLING IT TO AWARD. THE EVALUATION PROVISION OF THE RFP, ENTITLED "CRITERIA FOR EVALUATION FACTORS", CONTAINS THE FOLLOWING EXPLANATION OF THE METHOD OF EVALUATION TO BE USED:

"THE CRITERIA FOR ASSESSING EVALUATION FACTORS WILL BE BASED ON THREE SPECIFIC CATEGORIES. WITHIN EACH CATEGORY, INDIVIDUAL FACTORS ARE LISTED IN DECREASING ORDER OF IMPORTANCE. A PROPOSAL WILL BE ELIMINATED FROM FURTHER CONSIDERATION IF ANY ONE CATEGORY IS JUDGED 'UNACCEPTABLE' REGARDLESS OF THE RATINGS OF THE OTHER TWO CATEGORIES. AN 'UNACCEPTABLE' RATING WILL BE ASSIGNED TO A CATEGORY IF AT LEAST ONE FACTOR IN THE CATEGORY IS JUDGED 'UNSATISFACTORY' OR IF TWO OR MORE FACTORS ARE JUDGED 'POOR'. THE FOLLOWING RATING CATEGORIES AND FACTORS WILL BE USED IN THE EVALUATION OF BIDDER PROPOSALS. EACH CATEGORY IS LISTED IN THE ORDER OF ITS IMPORTANCE AND THE FACTORS WITHIN EACH CATEGORY ARE LISTED IN THE SAME MANNER."

BRIEFLY SUMMARIZED, THE EVALUATION FACTORS SET FORTH THEREUNDER ARE AS FOLLOWS:

A. SCIENTIFIC/ENGINEERING APPROACH

1. UNDERSTANDING THE PROBLEM

2. PERSONNEL PROPOSED

3. DETAILED MANAGEMENT PLAN

4. LEVEL OF EFFORT AND SUPPORT PROPOSED

B. QUALIFICATIONS, BASED ON BIDDERS/OFFEROR'S DATA

1. SPECIFIC EXPERIENCE

2. TECHNICAL ORGANIZATION

C. QUALIFICATIONS BASED ON USAF EXPERIENCE

D. COSTS

AN EVALUATION PANEL NUMERICALLY RANKED THE PROPOSALS UNDER CRITERIA A.1 THROUGH A.4, WHICH HAD DECREASING MAXIMUM POINT VALUES. EG&G ATTAINED A HIGHER TOTAL SCORE THAN DYNALECTRON UNDER CRITERION A., PRIMARILY BECAUSE OF DEFICIENCIES IN THE LATTER'S PROPOSAL UNDER CRITERIA A.3. AND A.4. HOWEVER, BOTH PROPOSALS WERE DEEMED TECHNICALLY ACCEPTABLE. THE DEFICIENCIES OBSERVED IN DYNALECTRON'S PROPOSAL WERE DISCUSSED WITH THAT FIRM DURING NEGOTIATIONS, AND ALTHOUGH A NUMERICAL RE-SCORING WAS NOT MADE AFTER RECEIPT OF BEST AND FINAL OFFERS, IT APPEARS THAT DYNALECTRON SUBSTANTIALLY SATISFIED THE EVALUATORS, CONCERNS.

NO NUMERICAL RATINGS WERE MADE FOR CRITERIA B.1. AND B.2., UNDER WHICH ALL OFFERORS WERE DEEMED "SATISFACTORY."

WITH REGARD TO CRITERION C., "QUALIFICATIONS BASED ON USAF EXPERIENCE", THE RFP STATED: "THE CONTRACTUAL HISTORY OF PROSPECTIVE BIDDERS WILL BE EXAMINED TO EVALUATE ABILITY TO MEET SCHEDULES, TO CONTROL COSTS, AND COMPLY WITH REQUIREMENTS IN THEIR PAST EFFORTS." HOWEVER, AFTER THE OFFERORS' IDENTITIES WERE KNOWN, IT WAS DECIDED NOT TO RATE THEM UNDER THIS CRITERION SINCE THE PROCURING ACTIVITY HAD NO MEANINGFUL EXPERIENCE WITH THREE OF THE FIRMS. THUS, CRITERION C. WAS NOT CONSIDERED IN THE EVALUATION OF PROPOSALS.

WE THINK IT WAS REASONABLE FOR THE AIR FORCE NOT TO EVALUATE OFFERORS UNDER CRITERION C. IN THE ABSENCE OF MEANINGFUL EXPERIENCE DATA FOR THE MAJORITY OF THEM. THAT DECISION SHOULD HAVE BEEN REFLECTED IN THE DELETION OF CRITERION C. FROM THE RFP BY AMENDMENT. EVEN HAD THIS BEEN DONE, HOWEVER, IT WOULD NOT HAVE AFFECTED THE OFFERORS' PROPOSALS SINCE THE EVALUATION UNDER CRITERION C. WAS TO BE NOT OF DATA FURNISHED BY THE OFFERORS BUT OF INFORMATION ALREADY WITHIN THE POSSESSION OF THE AIR FORCE. FOR THIS REASON, WE DO NOT BELIEVE THE FAILURE TO DELETE CRITERION C. FROM THE SOLICITATION WAS SO SUBSTANTIAL A DEFECT AS TO WARRANT DISTURBING THE AWARD.

IT APPEARS FROM THE SOURCE SELECTION DOCUMENTS THAT ON THE BASIS OF THE REVISED PROPOSALS, DYNALECTRON WAS DEEMED ESSENTIALLY EQUAL TO EG&G INSOFAR AS ABILITY TO COMPETENTLY PERFORM THE CONTRACT WORK WAS CONCERNED. COST BECAME THE DETERMINING FACTOR IN THE AWARD, WHICH WAS MADE TO DYNALECTRON BECAUSE IN THE AGENCY'S JUDGMENT THAT FIRM OFFERED TO PERFORM THE WORK AT AN ESTIMATED COST PLUS FEE WHICH WAS REALISTIC AND LOW. THE RECORD DOES NOT SUPPORT EG&G'S CONTENTION THAT IT POSSESSED SUCH A SUPERIOR DEGREE OF TECHNICAL ABILITY THAT IT WOULD HAVE BEEN IN THE GOVERNMENT'S BEST INTERESTS TO HAVE MADE AWARD TO IT AT A HIGHER ESTIMATED COST PLUS FEE.

IN REGARD TO EG&G'S CONTENTION THAT THE AIR FORCE'S EVALUATION FAILED TO GIVE DUE CONSIDERATION TO PHASE-IN COSTS - THE COSTS OF TURNING OVER OPERATION OF THE SANDIA OPTICAL RANGE TO A NEW CONTRACTOR - WE HAVE RECOGNIZED THAT AN AGENCY MAY APPROPRIATELY CONSIDER SUCH COSTS AS AN EVALUATION FACTOR WHERE THE AMOUNT OF THAT FACTOR ACCURATELY DEPICTS THE GOVERNMENT'S COSTS. 52 COMP. GEN. 905 (1973). HOWEVER, THERE IS NO REQUIREMENT THAT AN EVALUATION SCHEME INCLUDE A CONSIDERATION OF PHASE-IN COSTS. THEIR CONSIDERATION MAY BE EITHER UNDESIRABLE OR HIGHLY SPECULATIVE IN A GIVEN PROCUREMENT. B-164165, AUGUST 13, 1968; B-167249, JANUARY 19, 1970; 45 COMP. GEN. 433 (1966). NEVERTHELESS, WHERE THERE IS NO MENTION IN THE SOLICITATION OF SUCH A FACTOR THE PROCURING ACTIVITY MAY NOT CONSIDER PHASE-IN COSTS IN EVALUATING THE PROPOSALS. B-167249, SUPRA. SINCE THE RFP HERE CONTAINED NO INDICATION THAT PHASE-IN COSTS WERE TO BE CONSIDERED FOR EVALUATION PURPOSES, WE BELIEVE THAT THE AIR FORCE ACTED PROPERLY IN EXCLUDING ANY CONSIDERATION OF SUCH COSTS FROM ITS EVALUATION.

IN RELATING THE BASIS FOR ITS AWARD TO DYNALECTRON THE AIR FORCE EXPLAINS THAT IN ADDITION TO THE FACT THAT DYNALECTRON'S COST PROPOSAL WAS LOW, IT WAS THE ONLY OFFEROR WILLING TO ACCEPT A CEILING ON INDIRECT EXPENSES. EG&G CHARGES THAT THE AIR FORCE'S DESIRE TO NEGOTIATE A CEILING ON INDIRECT EXPENSES WAS AN ATTEMPT TO OBTAIN PREFERENTIAL OVERHEAD RATES CONTRARY TO THE PROVISIONS OF ASPR SEC. 3 807.11 (1974 ED.), WHICH PROVIDES:

"(B)TO ASSURE A REASONABLE APPROXIMATION AND ALLOCATION OF INDIRECT COSTS ON AN EQUITABLE BASIS TO INDIVIDUAL CONTRACTS, NEGOTIATORS SHALL UTILIZE AUDITED OVERHEAD DATA OR NEGOTIATED OVERHEAD RATES, WHEN AVAILABLE, IN CONNECTION WITH NEGOTIATION OF CONTRACTS AND SHALL NOT, UNLESS AUTHORIZED BY THE HEAD OF A PROCURING ACTIVITY, SEEK PREFERENTIAL OVERHEAD RATES."

THE PREMISE OF EG&G'S OBJECTION TO THE AIR FORCE'S NEGOTIATION OF A CEILING OF G&A EXPENSES APPEARS TO BE THAT ANY CEILING ON INDIRECT EXPENSES MAY, OVER THE COURSE OF PERFORMANCE, RESULT IN A FAILURE TO FULLY COMPENSATE A CONTRACTOR FOR ITS ACTUAL EXPENSES. WE DO NOT AGREE WITH EG&G'S CONTENTION THAT THE NEGOTIATION OF A CEILING ON INDIRECT EXPENSES NECESSARILY CONSTITUTES AN IMPROPER ATTEMPT TO OBTAIN PREFERENTIAL OVERHEAD RATES. MOREOVER, A REVIEW OF DYNALECTRON'S COST PROPOSAL REFUTES ANY SUGGESTION THAT THE AGREED UPON CEILING ON G&A EXPENSES IS PREFERENTIAL. THAT RATE IS BASED UPON AUDITED FIGURES AND IS CONSISTENT WITH DYNALECTRON'S PROJECTION OF G&A EXPENSES OVER ITS PROJECTED TOTAL VOLUME OF BUSINESS.

FOR THE REASONS INDICATED ABOVE, EG&G'S PROTEST IS DENIED.