B-182595, APR 23, 1975

B-182595: Apr 23, 1975

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ALTHOUGH LOW UNSUCCESSFUL OFFEROR UNDER NEGOTIATED PROCUREMENT CONTENDS THAT REASONS FOR REJECTION OF ITS PROPOSAL WERE BOTH ERRONEOUS AND MINOR AND COULD EASILY HAVE BEEN CORRECTED THROUGH NEGOTIATIONS. THERE IS NO BASIS IN RECORD TO DISAGREE WITH PROCURING ACTIVITY'S DETERMINATION THAT PROTESTER'S PROPOSAL WAS SO TECHNICALLY DEFICIENT AS TO REQUIRE MAJOR REVISION AND WAS NOT THEREFORE WITHIN COMPETITIVE RANGE. THERE WAS NO OBLIGATION UNDER APPLICABLE LAW AND REGULATION TO HOLD DISCUSSIONS TO IMPROVE PROPOSAL. 2. WHILE PROTESTER CONTENDS THAT CONFLICT OF INTEREST WILL BE CREATED. RECORD DOES NOT CONTAIN ANY EVIDENCE TO ESTABLISH THAT MEMBERS OF DESIGN TEAM HAVE PROPRIETARY INTERESTS IN FINAL DESIGN NOR IS FOLLOW ON HARDWARE PROCUREMENT BEING CONTEMPLATED.

B-182595, APR 23, 1975

1. ALTHOUGH LOW UNSUCCESSFUL OFFEROR UNDER NEGOTIATED PROCUREMENT CONTENDS THAT REASONS FOR REJECTION OF ITS PROPOSAL WERE BOTH ERRONEOUS AND MINOR AND COULD EASILY HAVE BEEN CORRECTED THROUGH NEGOTIATIONS, THERE IS NO BASIS IN RECORD TO DISAGREE WITH PROCURING ACTIVITY'S DETERMINATION THAT PROTESTER'S PROPOSAL WAS SO TECHNICALLY DEFICIENT AS TO REQUIRE MAJOR REVISION AND WAS NOT THEREFORE WITHIN COMPETITIVE RANGE. THEREFORE, THERE WAS NO OBLIGATION UNDER APPLICABLE LAW AND REGULATION TO HOLD DISCUSSIONS TO IMPROVE PROPOSAL. 2. WHILE PROTESTER CONTENDS THAT CONFLICT OF INTEREST WILL BE CREATED, RECORD DOES NOT CONTAIN ANY EVIDENCE TO ESTABLISH THAT MEMBERS OF DESIGN TEAM HAVE PROPRIETARY INTERESTS IN FINAL DESIGN NOR IS FOLLOW ON HARDWARE PROCUREMENT BEING CONTEMPLATED.

ESSEX CORPORATION:

ON MAY 9, 1974, THE TRANSPORTATION SYSTEMS CENTER, DEPARTMENT OF TRANSPORTATION (DOT), ISSUED REQUEST FOR PROPOSALS (RFP) NO. TSC/R&D TME- 0142-RN FOR THE DEVELOPMENT OF A LOCOMOTIVE CAB DESIGN. THE RFP WAS SENT TO 27 SOURCES AND 2 PROPOSALS WERE RECEIVED IN RESPONSE: ONE FROM BOEING VERTOL COMPANY (BOEING) IN THE ESTIMATED AMOUNT OF $349,634, AND ONE FROM ESSEX CORPORATION (ESSEX) IN THE ESTIMATED AMOUNT OF $258,309.

BOTH PROPOSALS WERE GIVEN TO A TEAM OF SIX MEMBERS FOR TECHNICAL EVALUATIONS. THE TEAM'S REPORT, ISSUED ON JUNE 20, 1974, GAVE A SCORE OF 92 TO THE BOEING PROPOSAL AND A SCORE OF 47 TO THE ESSEX PROPOSAL. SUMMARY, THE ESSEX PROPOSAL WAS RATED "UNACCEPTABLE - POOR ENGINEERING APPROACH." THE TEAM FOUND THAT THE ESSEX PROPOSAL DID NOT DEMONSTRATE A THOROUGH UNDERSTANDING OF OR ADEQUATE APPROACH TO THE WORK REQUIRED IN THE RFP.

IN THE REPORT TO OUR OFFICE ON THIS MATTER, DOT STATED:

"BECAUSE OF THE TECHNICAL DEFICIENCIES OF THE ESSEX PROPOSAL IT WAS CLEAR THAT NO USEFUL PURPOSE WOULD BE SERVED BY ATTEMPTING TO UPGRADE THE ESSEX PROPOSAL THROUGH NEGOTIATIONS. MAJOR REVISIONS TO THE PROPOSAL, IN EFFECT TO A NEW PROPOSAL, WOULD HAVE BEEN NECESSARY TO UPGRADE THE PROPOSAL TO AN ACCEPTABLE LEVEL. THE CONTRACTING OFFICER, THEREFORE, DETERMINED THAT ONLY THE BOEING PROPOSAL WAS WITHIN THE COMPETITIVE RANGE AND NEGOTIATIONS WERE CONDUCTED ONLY WITH THAT COMPANY. NEGOTIATIONS RESULTED IN AN ESTIMATED COST OF $317,848 AND A FIXED FEE $25,428, AND THE CONTRACT WAS AWARDED TO BOEING ON OCTOBER 17, 1974."

UPON NOTIFICATION OF THE AWARD TO BOEING, ESSEX REQUESTED AN EXPLANATION FROM DOT. THE EXPLANATION DETAILED THE DEFICIENCIES IN THE ESSEX PROPOSAL, WHICH ESSEX HAS TAKEN EXCEPTION TO, RESULTING IN THE FILING OF THIS PROTEST, ON NOVEMBER 4, 1974, WITH OUR OFFICE.

BASICALLY, ESSEX CONTENDS THAT THE DOT EVALUATION CONTAINED MISSTATEMENTS, IMPROPER CONCLUSIONS REGARDING PRIOR ESSEX PERFORMANCE, AN ERRONEOUS UNDERSTANDING OF ESSEX'S PROPOSED PROGRAM MANAGEMENT STRUCTURE AND A LACK OF COMPREHENSION OF THE TECHNICAL CONTENT OF THE ESSEX PROPOSAL. ADDITIONALLY, ESSEX HAS QUESTIONED WHETHER IT IS "*** IN THE BEST INTEREST OF THE GOVERNMENT TO CONTRACT FOR A STUDY EFFORT TO DESIGN CABS WITH A TEAM WHICH INCLUDES MEMBERS WITH OBVIOUS PROPRIETARY INTERESTS IN THE RESULTS OF THE STUDY."

FEDERAL PROCUREMENT REGULATIONS (FPR) SEC. 1-3.805-1 (1973 ED. AMEND. 118) GENERALLY REQUIRES DISCUSSIONS WITH ALL RESPONSIBLE OFFERORS WHO SUBMIT PROPOSALS WITHIN A COMPETITIVE RANGE, PRICE AND OTHER FACTORS CONSIDERED. OUR OFFICE HAS HELD THAT THE TERM "OTHER FACTORS" INCLUDES THE TECHNICAL ACCEPTABILITY OF PROPOSALS (46 COMP. GEN. 606 (1967)) AND THAT A DETERMINATION OF WHAT CONSTITUTES A "COMPETITIVE RANGE," PARTICULARLY WITH RESPECT TO THE EVALUATION OF TECHNICAL PROPOSALS, IS PRIMARILY ONE OF PROCUREMENT DISCRETION WHICH WE WILL NOT QUESTION WHERE, AS HERE, WE CAN DISCERN NO ABUSE OF SUCH DISCRETION. SEE 48 COMP. GEN. 314 (1968); B-172946, DECEMBER 23, 1971; AND B-169671(1), (2), AUGUST 31, 1970.

THE RECORD IN THE INSTANT CASE INDICATES THAT ESSEX'S PROPOSAL WAS CAREFULLY CONSIDERED AND THE DEFICIENCIES THEREIN WERE DOCUMENTED IN DETAIL BY THE EVALUATION PERSONNEL WHICH CONCLUDED THAT ITS PROPOSAL COULD NOT BE MADE ACCEPTABLE WITHOUT MAJOR REVISION. ALTHOUGH WE HAVE CONSIDERED THE STATEMENTS MADE BY ESSEX IN REBUTTAL TO DOT'S POSITION IN THIS MATTER, IN VIEW OF THE NUMBER AND NATURE OF DEFICIENCIES IN ESSEX'S PROPOSAL, WE CANNOT CONCLUDE THAT THE EVALUATORS DID NOT HAVE SUBSTANTIAL SUPPORT FOR THEIR CONCLUSION, OR THAT THE DEFICIENCIES IN ESSEX'S PROPOSAL WERE MINOR AND SHOULD HAVE BEEN RESOLVED IN NEGOTIATIONS. ALTHOUGH ESSEX'S PROPOSAL WAS WITHIN THE COMPETITIVE RANGE PRICE WISE, IT WAS DETERMINED SO TECHNICALLY DEFICIENT THAT WE PERCEIVE NO BASIS TO OBJECT TO THE AGENCY'S DECISION NOT TO CONDUCT NEGOTIATIONS WITH ESSEX. SEE MATTER OF CONWED CORPORATION, B-179295, FEBRUARY 19, 1974; B-171030, JUNE 22, 1971; AND B-168190, FEBRUARY 24, 1970.

ESSEX HAS ALSO CONTENDED THAT IT WOULD NOT BE IN THE BEST INTEREST OF THE GOVERNMENT TO CONTRACT FOR A STUDY EFFORT TO DESIGN CABS WITH A TEAM WHICH INCLUDES MEMBERS WITH OBVIOUS PROPRIETARY INTERESTS IN THE RESULTS OF THE STUDY. HOWEVER, DOT HAS STATED, AND WE AGREE, THAT A CONFLICT OF INTEREST DOES NOT EXIST IF, FOR NO OTHER REASON, THAN THAT THE OBJECTIVE OF THE INSTANT PROCUREMENT IS FOR DESIGN AND NO FOLLOW-ON HARDWARE PROCUREMENTS ARE CONTEMPLATED. ALSO, FROM THE RECORD BEFORE US, THERE IS NO EVIDENCE WHICH ESTABLISHES THAT MEMBERS OF THE DESIGN TEAM HAVE PROPRIETARY INTERESTS IN THE RESULTS OF THE STUDY. MATTER OF EXOTECH SYSTEMS, INC., B -181416, NOVEMBER 22, 1974, 54 COMP. GEN. .

ESSEX HAS ALSO RAISED THE POINT THAT DOT HAS FAILED TO COMPLY WITH THE TIME LIMITATIONS SET FORTH IN OUR INTERIM BID PROTEST PROCEDURES AND STANDARDS, PUBLISHED AT 4 CODE OF FEDERAL REGULATIONS PART 20 ET SEQ. (1974). WHILE WE ARE COGNIZANT OF THE TIME FRAME WITHIN WHICH ALL PARTIES INVOLVED IN THIS MATTER HAVE RESPONDED, WE ARE NOT EMPOWERED, UNDER OUR INTERIM BID PROTEST PROCEDURES AND STANDARDS TO IMPOSE SANCTIONS UPON A CONTRACTING AGENCY FOR ITS FAILURE TO SUBMIT A REPORT ON A PROTEST WITHIN 20 WORKING DAYS. SECTION 20.5 OF THE ABOVE-CITED REGULATION IS ONLY A GUIDELINE WHICH WE HOPE THE AGENCIES WILL FOLLOW. IN ANY EVENT, SINCE WE HAVE FOUND NO MERIT TO THE PROTEST, THE COMPLAINED OF DELAY HAS NOT WORKED TO THE DETRIMENT OF ESSEX.

ACCORDINGLY, THE PROTEST IS DENIED.