B-183054, APR 30, 1975

B-183054: Apr 30, 1975

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WHERE PROTESTER WAS SENT LETTER BY CONTRACTING AGENCY POINTING OUT SPECIFIC DEFICIENCIES IN ITS PROPOSAL AND REQUESTING TECHNICAL CLARIFICATIONS AND REVISIONS AS WELL AS ITS "BEST PRICE AND ANY OTHER REVISIONS. " CLAIM THAT AGENCY FAILED TO HOLD DISCUSSIONS IS WITHOUT MERIT. WHETHER DISCUSSIONS WERE HELD IS A MATTER FOR DETERMINATION BASED ON PARTICULAR ACTIONS OF PARTIES AND PROTESTER'S CONTENTION THAT IT WITHHELD OFFER OF PRICE REDUCTION IN RELIANCE ON REPRESENTATION BY CONTRACTING OFFICER'S SECRETARY THAT NEGOTIATIONS HAD NOT BEGUN IS WITHOUT MERIT WHERE SUCH REDUCTION HAD BEEN SOLICITED IN PREVIOUS LETTER FROM CONTRACTING ACTIVITY. THREE WERE FOUND TO BE "RESPONSIVE.". THE UNIVERSITY OF GEORGIA'S PROPOSAL WAS RANKED HIGHEST IN TERMS OF TECHNICAL MERIT BY THE TECHNICAL EVALUATION TEAM.

B-183054, APR 30, 1975

WHERE PROTESTER WAS SENT LETTER BY CONTRACTING AGENCY POINTING OUT SPECIFIC DEFICIENCIES IN ITS PROPOSAL AND REQUESTING TECHNICAL CLARIFICATIONS AND REVISIONS AS WELL AS ITS "BEST PRICE AND ANY OTHER REVISIONS," CLAIM THAT AGENCY FAILED TO HOLD DISCUSSIONS IS WITHOUT MERIT. WHETHER DISCUSSIONS WERE HELD IS A MATTER FOR DETERMINATION BASED ON PARTICULAR ACTIONS OF PARTIES AND PROTESTER'S CONTENTION THAT IT WITHHELD OFFER OF PRICE REDUCTION IN RELIANCE ON REPRESENTATION BY CONTRACTING OFFICER'S SECRETARY THAT NEGOTIATIONS HAD NOT BEGUN IS WITHOUT MERIT WHERE SUCH REDUCTION HAD BEEN SOLICITED IN PREVIOUS LETTER FROM CONTRACTING ACTIVITY.

FOOD SCIENCE ASSOCIATES, INC.:

BY LETTER FILED WITH THIS OFFICE JANUARY 17, 1975, FOOD SCIENCE ASSOCIATES, INC. (FOOD SCIENCE) PROTESTS THE U.S. DEPARTMENT OF AGRICULTURE FOOD AND NUTRITION SERVICE'S (FNS) AWARD OF A COST REIMBURSEMENT TYPE CONTRACT TO OTHER THAN ITSELF UNDER RFP 22-FNS-74 FOR A STUDY OF SCHOOL LUNCH SYSTEMS.

OF THE PROPOSALS SUBMITTED IN RESPONSE TO THE SOLICITATION, THREE WERE FOUND TO BE "RESPONSIVE." THE UNIVERSITY OF GEORGIA'S PROPOSAL WAS RANKED HIGHEST IN TERMS OF TECHNICAL MERIT BY THE TECHNICAL EVALUATION TEAM. FOOD SCIENCE'S PROPOSAL WAS RANKED SECOND AND THAT OF COLORADO STATE UNIVERSITY WAS RANKED THIRD. ON OCTOBER 11, 1975, LETTERS WERE SENT TO EACH OF THOSE OFFERORS REQUESTING TECHNICAL CLARIFICATIONS AND REVISIONS AND ADVISING EACH OFFEROR AS TO SPECIFIC DEFICIENCIES IN ITS PROPOSAL. THE LETTER ADDRESSED TO THE PROTESTER PROVIDES IN PERTINENT PART AS FOLLOWS:

"PLEASE SUBMIT AN ADDENDUM TO YOUR PROPOSAL, PROVIDING FOR THE FOLLOWING:

"A. WE ARE UNABLE TO DETERMINE FROM THE INFORMATION PROVIDED, THAT THE SUBCONTRACTOR PROPOSED HAS THE CAPABILITY OF PROVIDING ASSISTANCE IN A PROJECT OF THIS MAGNITUDE. MORE DETAIL IS REQUIRED ABOUT THE BACKGROUND AND CAPABILITY OF THE SUBCONTRACTOR.

"B. THE EXPERT PANEL OR ADULT APPROACH TO ACCEPTABILITY TESTING IS NOT ACCEPTABLE. YOU SHOULD DEVISE A TEST TO GET THE PREFERENCE OF THE RECIPIENT.

"C. WHY DID YOU NOT PROPOSE TO TEST SOME ITEMS AS VEGETABLES FOR RIBOFLAVIN, WHICH IS KNOWN TO BE PRESENT IN RELATIVELY HIGH QUANTITY IN SOME OF THE VEGETABLES AND IS KNOWN TO BE LIGHT SENSITIVE?

"D. WHY ARE YOU TESTING FOR STAPHYLOCOCCI AND SALMONELLA, WHILE YOU ARE NOT GOING TO TEST FOR INDICATOR ORGANISMS SUCH AS E. COLI AND C. PERFRINGES?

"E. THE PROPOSED SANITATION INSPECTION SHOULD BE DELETED FROM YOUR PROPOSAL.

"F. COMPARISON OF ANALYZED VALUES FOR NUTRIENTS VERSUS PUBLISHED STANDARD VALUES SHOULD BE ELIMINATED FROM YOUR PROPOSAL.

"G. THE PRIMARY OBJECTIVES OF THIS STUDY ARE TO ASSESS AND COMPARE THE NUTRITIONAL QUALITY AND MICROBIOLOGICAL SAFETY OF THE VARIOUS DELIVERY SYSTEMS. THE ACCEPTABILITY AND COST DATA TO BE OBTAINED FOR EACH OF THESE SYSTEMS ARE FOR THE PURPOSE OF INTERPRETING HOW THESE LATTER FACTORS AFFECT OR ARE AFFECTED BY THE PRIMARY OBJECTIVES OF THIS STUDY. THEREFORE, THE METHODOLOGY FOR COLLECTING COST DATA SHOULD BE REVISED TO CONFORM TO THE SPECIFICATION IN THE RFP. YOUR PROPOSAL DESCRIBED A MORE EXTENSIVE EVALUATION THAN REQUIRED BY THESE SPECIFICATIONS.

"H. YOUR ALLOCATION OF GENERAL AND ADMINISTRATIVE COST APPEARS TO PLACE THE MAJOR BURDEN OF YOUR OPERATIONS ON THIS CONTRACT. PLEASE EXPLAIN AND CLARIFY.

"I. PILOT TESTING OF DATA COLLECTION PROCEDURES AND INSTRUMENTS SHOULD BE CARRIED OUT. THIS TESTING SHOULD BE DONE BEFORE THEY ARE SUBMITTED TO USDA FOR OMB APPROVAL.

"IN ORDER FOR YOU TO RECEIVE FURTHER CONSIDERATION FOR AWARD OF A CONTRACT UNDER THIS SOLICITATION, IT IS ESSENTIAL THAT YOU SUBMIT THE INFORMATION REQUESTED ABOVE TO THE CONTRACTING OFFICER *** NO LATER THAN OCTOBER 22, 1974. PLEASE VERIFY YOUR PRICE IN CONNECTION WITH THIS PROPOSAL, CONSIDERING THE EFFECT OF THE ABOVE. IF NO CHANGE IS NECESSARY, PLEASE SO STATE."

IN ADDITION TO ADVISING FOOD SCIENCE OF THE TECHNICAL DEFICIENCIES IN ITS PROPOSAL, THE LETTER ALSO REQUESTED SUBMISSION OF ITS BEST OFFER AS FOLLOWS:

"YOU ARE REQUESTED TO SUBMIT YOUR BEST PRICE AND ANY OTHER REVISIONS TO YOUR PROPOSAL ALONG WITH THE ABOVE REQUESTED INFORMATION. LATE MODIFICATIONS TO PROPOSALS SHALL BE SUBJECT TO THE 'LATE OFFERS, MODIFICATIONS, AND WITHDRAWALS' CLAUSE SET FORTH IN THE SOLICITATION.

"IF YOU HAVE ANY QUESTIONS, PLEASE CONTACT MR. C.F. MUNNO, CONTRACT SPECIALIST ***."

THE REVISED PROPOSAL SUBMITTED BY FOOD SCIENCE CONTAINED THE FOLLOWING STATEMENT WITH RESPECT TO VERIFICATION OF PRICE:

"THE COST IMPACT OF THE CHANGES PROPOSED ABOVE HAVE BEEN ANALYZED AS INDICATED IN THE ACCOMPANYING TABLE.

"IT WILL BE NOTED THAT THE CHANGES INCREASE THE COST BY $11,632, WHILE REDUCING THEM BY $2,160, THE NET DIFFERENCE $7,472. FSA HOWEVER DOES NOT WISH TO INCREASE THE PROPOSED PRICE ABOVE THE PREVIOUSLY QUOTED."

THE FORWARDING LETTER ACCOMPANYING FOOD SCIENCE'S REVISED PROPOSAL STATED:

"AS INDICATED IN THE ADDENDUM, ALTHOUGH THE CHANGES PROPOSED BY FNS AND NOW OFFICIALLY INCORPORATED IN FSA'S PROPOSAL RESULT IN A SIGNIFICANT OVERALL INCREASE IN THE COST OF THE STUDY, WE ARE NOT PROPOSING ANY CHANGE IN THE PRICE QUOTED IN OUR LETTER OF JULY 22, 1974 ($364,859)."

AFTER RECEIPT AND EVALUATION OF REVISED PROPOSALS FROM ALL THREE OFFERORS, THE BOARD OF CONTRACT AWARDS MET TO EVALUATE THE IMPACT OF THE CLARIFICATIONS ON THE PROPOSALS IN BOTH THE TECHNICAL AND BUDGET AREAS. THE LOW PROPOSAL OF COLORADO STATE UNIVERSITY REQUIRED AN ADDITIONAL TECHNICAL CLARIFICATION WHICH IT WAS DETERMINED WOULD NOT INCREASE THE COST OF ITS PROPOSAL BY MORE THAN $10,000. ULTIMATELY COLORADO STATE UNIVERSITY'S PROPOSAL WAS FOUND TO BE TECHNICALLY ACCEPTABLE AND A DETERMINATION WAS MADE TO AWARD IT THE STUDY CONTRACT AT $247,945.00. WITH RESPECT TO THE $364,859.00 OFFER OF FOOD SCIENCE AND THE SUBSTANTIALLY HIGHER OFFER OF THE UNIVERSITY OF GEORGIA, IT WAS DETERMINED THAT THE COST DIFFERENCES BETWEEN THOSE PROPOSALS AND THE LOW OFFER OF COLORADO STATE UNIVERSITY WERE TOO GREAT TO OVERCOME IN NEGOTIATIONS WITHOUT JEOPARDIZING THEIR TECHNICAL PROPOSALS. HENCE, IT WAS DETERMINED THAT FURTHER NEGOTIATIONS WITH THE PROTESTER AND THE UNIVERSITY OF GEORGIA WOULD NOT PROVE MEANINGFUL. AWARD WAS MADE TO COLORADO STATE UNIVERSITY ON JANUARY 13, 1975, BASED ON THE FINDING THAT THE LOW OFFEROR WOULD NOT EXTEND THE DATE FOR ACCEPTANCE OF ITS PROPOSAL WITHOUT A 10 PERCENT INCREASE IN PRICE.

FOOD SCIENCE'S PROTEST IS BASED UPON ITS CONTENTION THAT THE FNS FAILED TO ENTER INTO NEGOTIATIONS WITH IT AFTER ITS INITIAL AND REVISED PROPOSAL HAD BEEN SUBMITTED. THE PROTESTER STATES THAT THE PRICE INDICATED BY ITS REVISED PROPOSAL WAS NOT ITS BEST AND FINAL OFFER; RATHER IT STOOD READY TO OFFER A $125,000 REDUCTION IN ITS PRICE DURING THE NEGOTIATION PHASE WHICH IT HAD ANTICIPATED WOULD FOLLOW THE EVALUATION OF ITS PROPOSAL. THE REASON THAT FOOD SCIENCE DID NOT INCORPORATE THE $125,000 PRICE REDUCTION AT THE TIME IT SUBMITTED ITS REVISED PROPOSAL IS EXPLAINED AS FOLLOWS:

"*** FOLLOWING RECEIPT OF MR. SOBER'S LETTER OF OCTOBER 11TH *** I CALLED TO REQUEST AN EXTENSION IN THE DATE FOR SUBMISSION OF OUR ADDENDUM AND SPOKE TO THE SECRETARY OF MR. MUNNO, THE CONTRACTING OFFICER. I MADE THE REQUEST FOR AN EXTENSION *** AND ALSO INQUIRED AS TO WHETHER THE REQUEST FOR PRICE REVISION CONTAINED IN MR. SOBER'S LETTER OF OCTOBER 11TH MEANT THAT WE WERE NOW ENTERING INTO THE NEGOTIATION PHASE. I WAS INFORMED THAT THIS WAS DEFINITELY NOT THE CASE, BUT THAT NEGOTIATIONS WOULD BEGIN ONLY AFTER THE REQUESTED ADDENDUM HAD BEEN RECEIVED AND APPROVED."

ON THE BASIS OF ITS CONVERSATION WITH THE CONTRACTING OFFICER'S SECRETARY, FOOD SCIENCE EXPLAINS THAT IT VIEWED THE OCTOBER 11TH LETTER FROM FNS AS REQUESTING THAT IT LIMIT ITS RESPONSE BY ADDENDUM TO AN EVALUATION OF THE COST IMPACT OF THE REQUESTED CHANGES IN ACCORDANCE WITH THE LANGUAGE OF THAT LETTER REQUESTING VERIFICATION OF PRICE "IN CONNECTION WITH THIS PROPOSAL CONSIDERING THE EFFECT OF THE (REQUESTED CHANGES)." THUS IT IS FOOD SCIENCE'S VIEW THAT THE OCTOBER 11TH LETTER AND RESPONSE THERETO DID NOT CONSTITUTE DISCUSSIONS AND THAT THE FNS WAS OBLIGATED TO CONDUCT DISCUSSIONS WITH IT THEREAFTER.

WITH EXCEPTIONS NOT HERE PERTINENT, SUBPARAGRAPH 1-3.805-1 OF THE FEDERAL PROCUREMENT REGULATIONS (FPR) REQUIRES THAT AFTER RECEIPT OF INITIAL PROPOSALS, WRITTEN OR ORAL DISCUSSIONS BE CONDUCTED WITH ALL RESPONSIBLE OFFERORS WHO SUBMIT PROPOSALS WITHIN A COMPETITIVE RANGE, PRICE AND OTHER FACTORS CONSIDERED. WE HAVE HELD THAT NO INFLEXIBLE RULE CAN BE USED TO DETERMINE COMPLIANCE WITH THE REQUIREMENT FOR WRITTEN OR ORAL DISCUSSIONS BUT RATHER THAT THE CONTENT AND EXTENT OF DISCUSSIONS IN NEGOTIATED PROCUREMENTS IS A MATTER OF JUDGMENT FOR DETERMINATION BY THE PROCURING AGENCY ON THE BASIS OF THE PARTICULAR FACTS OF EACH CASE. THE PROCURING ACTIVITY'S DETERMINATION IN THIS REGARD IS NOT SUBJECT TO QUESTION BY OUR OFFICE UNLESS CLEARLY ARBITRARY, PROVIDED THAT THE DISCUSSIONS HELD DO NOT OPERATE TO THE BIAS OR PREJUDICE OF ANY COMPETITOR. 52 COMP. GEN. 161 (1972); 54 COMP. GEN. 60 (1974); IN THE MATTER OF AMERICAN MAINTENANCE AND MANAGEMENT SERVICES, INCORPORATED, B-179126, FEBRUARY 12, 1974; IN THE MATTER OF GULTON INDUSTRIES, INCORPORATED, B-180734, MAY 31, 1974. WHILE WE HAVE RECOGNIZED THAT THERE IS NO PRECISE RULE AS TO WHAT CONSTITUTES DISCUSSIONS, WE HAVE NEVERTHELESS HELD THAT AS A MINIMUM AN OFFEROR WITHIN THE COMPETITIVE RANGE SHOULD BE AFFORDED THE OPPORTUNITY TO REVISE OR MODIFY ITS PROPOSAL, 51 COMP. GEN. 479 (1972). THUS, WE HAVE HELD THAT THE OPPORTUNITY TO REVISE A PROPOSAL PRICE CONSTITUTES DISCUSSIONS. SEE 52 COMP. GEN. 161, SUPRA, AND 51 COMP. GEN. 479, SUPRA.

IN THE INSTANT CASE, EACH OFFEROR WAS ADVISED IN VERY SPECIFIC TERMS AS TO THE DEFICIENCIES IN ITS PROPOSAL AND WAS PROVIDED AN OPPORTUNITY TO REVISE ITS PROPOSAL TO REMEDY THOSE DEFICIENCIES AND TO REFLECT THE COST IMPACT OF THOSE CHANGES BY REVISING ITS COST PROPOSAL. IN ADDITION, EACH OFFEROR, INCLUDING THE PROTESTER, WAS SPECIFICALLY REQUESTED TO "SUBMIT (ITS) BEST PRICE AND ANY OTHER REVISIONS TO (ITS) PROPOSAL ***." UNDER THE CIRCUMSTANCES, IT APPEARS THAT FOOD SCIENCE WAS IN FACT AFFORDED THE OPPORTUNITY TO REVISE THE TECHNICAL AND COST ASPECTS OF ITS PROPOSAL.

IN VIEW OF THE PROVISION IN THE RFP STATING THAT "THE CONTRACTING OFFICER WILL BE THE OFFICIAL POINT OF CONTACT BETWEEN THE GOVERNMENT AND THE BIDDER ON ALL MATTERS CONCERNING THE PROCUREMENT," FOOD SCIENCE'S CONTENTION THAT IT RELIED IN GOOD FAITH ON REPRESENTATIONS OF THE CONTRACTING OFFICER'S SECRETARY THAT THE FNS LETTER OF OCTOBER 11, 1974, DID NOT INITIATE DISCUSSIONS APPEARS TO BE WITHOUT FOUNDATION. WHETHER OR NOT DISCUSSIONS WERE HELD IS A MATTER TO BE DETERMINED UPON THE BASIS OF THE PARTICULAR ACTIONS OF THE PARTIES, AND THE CHARACTERIZATIONS THEREOF BY THE CONTRACTING OFFICER'S SECRETARY IS WITHOUT PARTICULAR SIGNIFICANCE IN REBUTTING CIRCUMSTANCES WHICH CLEARLY INDICATE THAT DISCUSSIONS WERE IN FACT HELD. WHILE THE CONTRACTING OFFICER'S SECRETARY DOES NOT RECALL THE PARTICULAR CONVERSATION, IT NEVERTHELESS APPEARS TO HAVE BEEN UNREASONABLE ON FOOD SCIENCE'S PART TO HAVE RELIED ON ANY REPRESENTATIONS THAT CLEARLY CONFLICTED WITH THE LANGUAGE OF THE OCTOBER 11TH LETTER REQUESTING SUBMISSION OF "BEST PRICE AND ANY OTHER REVISION." IF IN FACT THE PROTESTER INTENDED TO OFFER A PRICE REDUCTION OF $125,000 IT COULD HAVE DONE SO AT THE TIME IT SUBMITTED ITS REVISED PROPOSAL. BASED ON THE STATEMENT IN FOOD SCIENCE'S REVISED PROPOSAL INDICATING THAT IT WAS NOT PROPOSING ANY CHANGE IN ITS PRICE, WE BELIEVE THAT THE CONTRACTING OFFICER ACTED PROPERLY IN DETERMINING NOT TO CONDUCT FURTHER DISCUSSIONS WITH THE PROTESTER BASED ON THE $116,914 EXCESS OF ITS PRICE PROPOSAL OVER THAT OFFERED BY COLORADO STATE UNIVERSITY.

FOR THE REASONS INDICATED ABOVE, THE PROTEST OF FOOD SCIENCE ASSOCIATES, INC. IS DENIED.