B-201939, AUG 7, 1981

B-201939: Aug 7, 1981

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GAO WILL UNDERTAKE REVIEWS CONCERNING PROPRIETY OF CONTRACT AWARDS UNDER FEDERAL GRANTS TO DETERMINE COMPLIANCE WITH APPLICABLE STATUTORY REQUIREMENTS. ALTHOUGH GAO BID PROTEST PROCEDURES ARE NOT LITERALLY APPLICABLE TO REVIEW OF GRANT COMPLAINTS. PORTION OF COMPLAINT ALLEGING THAT INADEQUATE TIME WAS ALLOWED FOR THE PREPARATION OF BEST AND FINAL OFFERS NOT FILED UNTIL AFTER DUE DATE FOR OFFERS IS NOT FILED WITHIN REASONABLE TIME AND NEED NOT BE CONSIDERED. THERE IS NO MERIT IN COMPLAINANT'S POSITION AS ALL OFFERORS SUBMITTED TIMELY BEST AND FINAL OFFERS AND RECORD SUPPORTS GRANTEE'S POSITION THAT PROJECT REQUIRED SHORT PROCUREMENT SCHEDULE AND THAT REQUEST FOR BEST AND FINAL OFFERS DID NOT RADICALLY CHANGE ORIGINAL RFP REQUIREMENTS. 3.

B-201939, AUG 7, 1981

DIGEST: 1. GAO WILL UNDERTAKE REVIEWS CONCERNING PROPRIETY OF CONTRACT AWARDS UNDER FEDERAL GRANTS TO DETERMINE COMPLIANCE WITH APPLICABLE STATUTORY REQUIREMENTS, AGENCY REGULATIONS AND GRANT TERMS. 2. ALTHOUGH GAO BID PROTEST PROCEDURES ARE NOT LITERALLY APPLICABLE TO REVIEW OF GRANT COMPLAINTS, PORTION OF COMPLAINT ALLEGING THAT INADEQUATE TIME WAS ALLOWED FOR THE PREPARATION OF BEST AND FINAL OFFERS NOT FILED UNTIL AFTER DUE DATE FOR OFFERS IS NOT FILED WITHIN REASONABLE TIME AND NEED NOT BE CONSIDERED. IN ANY EVENT, THERE IS NO MERIT IN COMPLAINANT'S POSITION AS ALL OFFERORS SUBMITTED TIMELY BEST AND FINAL OFFERS AND RECORD SUPPORTS GRANTEE'S POSITION THAT PROJECT REQUIRED SHORT PROCUREMENT SCHEDULE AND THAT REQUEST FOR BEST AND FINAL OFFERS DID NOT RADICALLY CHANGE ORIGINAL RFP REQUIREMENTS. 3. GAO FINDS NO MERIT IN COMPLAINANT'S CONTENTION THAT CALL FOR BEST AND FINAL OFFERS WHICH STATED NEGOTIATIONS WOULD BE UNDERTAKEN WITH "ONE OR MORE PROPOSERS" REQUIRED NEGOTIATIONS WITH MORE THAN ONE OFFEROR. 4. GRANTEE DID NOT VIOLATE FEDERAL NORM BY CONDUCTING DISCUSSIONS ONLY WITH PROSPECTIVE AWARDEE AFTER RECEIPT OF BEST AND FINAL OFFERS FROM THREE OFFERORS THEN IN COMPETITIVE RANGE BECAUSE GRANTEE DETERMINED BASED ON EVALUATION OF BEST AND FINAL OFFERS THAT ONLY ONE OFFEROR WAS ACCEPTABLE FOR AWARD AND DID NOT SIGNIFICANTLY ALTER RFP REQUIREMENT DURING POST BEST AND FINAL OFFER DISCUSSIONS.

URBAN TRANSPORTATION DEVELOPMENT CORPORATION, LTD.:

THE URBAN TRANSPORTATION DEVELOPMENT CORPORATION LTD., (UTDC) HAS REQUESTED OUR REVIEW OF A PENDING CONTRACT AWARD TO THE WESTINGHOUSE ELECTRIC CORPORATION BY METROPOLITAN DADE COUNTY, FLORIDA FOR A "PEOPLE MOVER" SYSTEM FOR DOWNTOWN MIAMI. THE PROJECT IS TO BE PARTIALLY FUNDED BY A GRANT FROM THE URBAN MASS TRANSPORTATION ADMINISTRATION (UMTA), DEPARTMENT OF TRANSPORTATION. UTDC CONTENDS THE SCOPE OF WORK CALLED FOR IN THE ORIGINAL SOLICITATION WAS SO SUBSTANTIALLY CHANGED DURING DISCUSSIONS THAT THE CALL FOR BEST AND FINAL OFFERS REFLECTED A NEW AND DIFFERENT SYSTEM AND THAT THE SEVEN DAYS GIVEN FOR THE SUBMISSION OF BEST AND FINAL OFFERS WAS SO ABBREVIATED AS TO CONSTITUTE AN ARBITRARY DENIAL OF DUE PROCESS. UTDC FURTHER CONTENDS IT WAS IMPROPER FOR THE PROCUREMENT OFFICER TO NEGOTIATE ONLY WITH WESTINGHOUSE AFTER THE SUBMISSION OF BEST AND FINAL OFFERS. AFTER UTDC'S PROTEST TO DADE COUNTY WAS DENIED, IT APPEALED TO UMTA WHICH ON MAY 6, 1980, DENIED ITS PROTEST. WE ALSO DENY THE PROTEST.

ON SEPTEMBER 24, 1980, DADE COUNTY ISSUED AN RFP CALLING FOR PROPOSALS TO DESIGN, FURNISH AND INSTALL A "PEOPLE MOVER" SYSTEM. ON THE AMENDED PROPOSAL SUBMISSION DATE OF NOVEMBER 26, THE FOLLOWING FIVE PROPOSALS WERE RECEIVED:

(1) MATRA-OTIS $116,546,000 (2) WESTINGHOUSE 98,399,270 (3) UTDC 91,687,221 (4) UTDC (ALT.) 73,380,567 (5) TITAN-PRT SYSTEMS 69,000,000

THESE INITIAL PROPOSALS WERE EVALUATED AND DADE COUNTY CONCLUDED THAT THE PROPOSAL OF TITAN-PRT SYSTEMS WAS TECHNICALLY UNACCEPTABLE WHILE THOSE OF THE REMAINING OFFERORS WERE CONSIDERED ACCEPTABLE AND THOSE OFFERORS ELIGIBLE TO PARTICIPATE IN NEGOTIATIONS. DURING DISCUSSIONS WITH THE THREE REMAINING OFFERORS, DADE COUNTY DETERMINED, AMONG OTHER THINGS, THAT IT WAS TOO COSTLY TO CONTINUE TO USE THE "STANDARD" SPECIFICATION CONTAINED IN THE ORIGINAL RFP AND INSTEAD, BY LETTER OF DECEMBER 15 TO EACH OF THE OFFERORS, CALLED FOR BEST AND FINAL OFFERS TO BE SUBMITTED ON DECEMBER 22 BASED ON EACH OFFEROR'S EXISTING "OFF THE SHELF" TECHNOLOGY, WHICH IN EACH CASE, WAS REQUIRED TO MEET 15 MINIMUM STANDARD CONDITIONS. THE FOLLOWING BEST AND FINAL OFFERS WERE RECEIVED:

(1) MATRA-OTIS $93,993,000 (2) UTDC $85,500,000 (3) WESTINGHOUSE $74,598,744

DADE COUNTY EVALUATED THE COST AND TECHNICAL ASPECTS OF ALL THREE PROPOSALS AND DETERMINED THAT NEITHER UTDC NOR MATRA-OTIS "COULD POSSIBLY REDUCE PRICES SUFFICIENTLY TO BE CONSIDERED FOR AWARD." THUS, DADE COUNTY ELIMINATED THOSE FIRMS FROM THE COMPETITIVE RANGE AND CONDUCTED EXTENSIVE NEGOTIATIONS WITH WESTINGHOUSE RESULTING IN A REVISED PROPOSAL FROM THAT FIRM OF $69,855,819 WHICH DADE COUNTY PROPOSES TO ACCEPT.

UTDC CONTENDS THAT THE DECEMBER 15 CALL FOR BEST AND FINAL OFFERS REPRESENTED SUCH A DRASTIC CHANGE IN REQUIREMENTS THAT DADE COUNTY SHOULD HAVE ALLOWED A RESPONSE TIME SIMILAR TO THAT SPECIFIED FOR NEW PROCUREMENTS IN THE FEDERAL PROCUREMENT REGULATIONS. IN THIS REGARD, UTDC ARGUES THAT THE SEVEN DAYS PERMITTED BY DADE COUNTY FOR THE PREPARATION OF BEST AND FINAL OFFERS WAS TOTALLY INADEQUATE. UTDC FURTHER CONTENDS THAT AS THE DECEMBER 15 LETTER CALLING FOR BEST AND FINAL OFFERS STATED THAT NEGOTIATIONS "WILL BE UNDERTAKEN WITH ONE OR MORE PROPOSERS" AFTER BEST AND FINAL OFFERS ARE REVIEWED, IT FULLY EXPECTED THAT SUCH NEGOTIATIONS WOULD BE CONDUCTED WITH IT AFTER THE TIMELY SUBMISSION OF ITS BEST AND FINAL OFFER ON DECEMBER 22. IT STATES THAT IT NEEDED SUCH NEGOTIATIONS IN ORDER TO OBTAIN CLARIFICATION IN CERTAIN AREAS AND GREATER DEFINITION OF THE SCOPE OF THE PROJECT.

THIS MATTER DOES NOT INVOLVE A DIRECT FEDERAL PROCUREMENT AND THE FEDERAL GOVERNMENT WILL NOT BE A PARTY TO THE CONTRACT. IN SUCH INSTANCES, WE UNDERTAKE REVIEWS CONCERNING THE PROPRIETY OF CONTRACT AWARDS MADE BY GRANTEES IN FURTHERANCE OF GRANT PURPOSES UPON THE REQUEST OF PROSPECTIVE CONTRACTORS PURSUANT TO OUR PUBLIC NOTICE ENTITLED "REVIEW OF COMPLAINTS CONCERNING CONTRACTS UNDER FEDERAL GRANTS", 40 FED.REG. 42406, SEPTEMBER 12, 1975. WE UNDERTAKE SUCH REVIEWS TO INSURE THAT GRANTOR AGENCIES ARE REQUIRING THEIR GRANTEES, IN AWARDING CONTRACTS, TO COMPLY WITH ANY REQUIREMENTS MADE APPLICABLE BY LAW, REGULATION OR THE TERMS OF THE GRANT AGREEMENT. SEE COPELAND SYSTEMS, INC., 55 COMP.GEN. 390 (1975), 75-2 CPD 237.

UNDER ITS GRANT AGREEMENT WITH UMTA, DADE COUNTY IS PERMITTED TO FOLLOW ITS OWN LOCAL PROCUREMENT PROCEDURES SO LONG AS THEY MEET THE MINIMUM REQUIREMENTS OF ATTACHMENT O TO OMB CIRCULAR A-102 AS WELL AS THE ADDITIONAL SUPPLEMENTARY GUIDELINES PRESCRIBED BY UMTA. ATTACHMENT O REQUIRES THE GRANTEE TO CONDUCT ALL PROCUREMENTS IN A MANNER WHICH PROVIDES MAXIMUM OPEN AND FREE COMPETITION. IN CASES SUCH AS THIS, WHERE NEITHER PARTY HAS CITED STATE LAW GOVERNING NEGOTIATED PROCUREMENTS AND WHERE THERE DOES NOT APPEAR TO BE ANY SUCH STATE LAW, WE GENERALLY REVIEW THE MATTER FROM THE STANDPOINT OF WHETHER THE GRANTOR HAS INSURED THAT THE GRANTEE'S ACTIONS WERE CONSISTENT WITH THE FUNDAMENTAL PRINCIPLES OR NORMS OF FEDERAL PROCUREMENT. SEE INTERNATIONAL BUSINESS MACHINES CORP., B-194365, JULY 7, 1980, 80-2 CPD 12.

UMTA CONTENDS THAT UTDC'S COMPLAINT PERTAINING TO THE PERIOD OF TIME ALLOWED FOR THE PREPARATION AND SUBMISSION OF BEST AND FINAL OFFERS IS UNTIMELY UNDER OUR BID PROTEST PROCEDURES, 4 C.F.R. PART 21, (1981). WHILE THE TIME LIMITS SPECIFIED IN OUR BID PROTEST PROCEDURES ARE NOT LITERALLY APPLICABLE TO OUR REVIEW OF GRANT COMPLAINTS, WE HAVE INDICATED THAT COMPLAINTS WHICH, LIKE THIS, CONCERN ALLEGED DEFICIENCIES APPARENT ON THE FACE OF THE SOLICITATION ARE NOT FILED WITHIN A REASONABLE TIME UNLESS FILED PRIOR TO THE DUE DATE FOR BEST AND FINAL OFFERS. CARAVELLE INDUSTRIES, B-202099, APRIL 24, 1981, 81-1 CPD 317. THE PORTION OF UTDC'S COMPLAINT DEALING WITH THE PREPARATION PERIOD ALLOWED FOR BEST AND FINAL OFFERS WAS NOT FILED UNTIL AFTER THE DATE FOR SUBMISSION OF SUCH OFFERS AND WAS THEREFORE UNTIMELY AND NEED NOT BE CONSIDERED. IN ANY EVENT, WE SEE LITTLE SUBSTANCE TO UTDC'S COMPLAINT IN THIS REGARD. WE NOTE THAT ALL OFFERORS WERE GIVEN THE SAME LENGTH OF TIME AND THAT ALL, INCLUDING UTDC, SUBMITTED THEIR BEST AND FINAL OFFERS ON TIME. DADE COUNTY BELIEVED THE MATTER TO BE URGENT AND THERE IS NO INDICATION IN THE RECORD THAT THIS BELIEF WAS UNREASONABLE. DADE COUNTY WAS PROPERLY CONCERNED ABOUT THE ADVANCED STATE OF DESIGN AND CONSTRUCTION ACTIVITIES UNDER RELATED CONTRACTS AT INTERFACE POINTS OF THE PROPOSED SYSTEM AND THE NECESSITY OF SYNCHRONIZING THE "PEOPLE MOVER" PROJECT WITH THESE ACTIVITIES. MOREOVER, THE RECORD INDICATES THAT ALL OFFERORS KNEW FROM NOVEMBER 26 WHEN THEY WERE PRESENTED WITH A REVISED PROCUREMENT SCHEDULE, THAT A VERY SHORT PERIOD OF TIME WOULD BE ALLOWED FOR PREPARATION OF BEST AND FINAL OFFERS.

UTDC CONTENDS THE REQUIREMENTS IN THE REQUEST FOR BEST AND FINAL OFFERS WERE SUBSTANTIALLY CHANGED FROM THOSE OF THE RFP. IT HAS NOT SHOWN, HOWEVER, THAT THE END RESULT REFLECTED MORE THAN A RELAXATION OF SPECIFICATIONS WHICH WAS OFFERED TO ALL OFFERORS OR THAT IT REPRESENTED A BASIC CHANGE FROM THE ORIGINAL REQUIREMENTS. DADE COUNTY DENIES THE CHANGES WERE SUBSTANTIAL AND CONTENDS THEY RESULTED DIRECTLY FROM TECHNICAL DISCUSSIONS WITH ALL THE OFFERORS INCLUDING UTDC. IT STATES THAT AS A RESULT OF THE EXCEPTIONS TAKEN TO ITS ORIGINAL RFP, IT DECIDED THAT THE RFP OVERSPECIFIED SOME OF THE DETAILS WHICH GENERATED THE EXCEPTIONS AND INCREASED COSTS AND THAT, THEREFORE, COMPETITION WOULD BE ENHANCED AND COSTS REDUCED IF THE OFFERORS WERE PERMITTED TO BASE THEIR BEST AND FINAL OFFERS ON THEIR EXISTING TECHNOLOGY, PROVIDED THAT 15 MINIMUM CONDITIONS WERE MET. UTDC HAS PRESENTED NO EVIDENCE TO CONTRADICT DADE COUNTY'S POSITION.

WE ALSO FIND LITTLE MERIT IN UTDC'S CONTENTION THAT BECAUSE THE DECEMBER 15 CALL FOR BEST AND FINAL OFFERS STATED THAT NEGOTIATIONS WOULD BE UNDERTAKEN WITH "ONE OR MORE PROPOSERS", DADE COUNTY WAS OBLIGATED TO NEGOTIATE WITH MORE THAN ONE OFFEROR AFTER RECEIPT OF BEST AND FINAL OFFERS. THIS LANGUAGE BY ITSELF CLEARLY DOES NOT REQUIRE NEGOTIATIONS WITH MORE THAN ONE OFFEROR.

UTDC FURTHER CLAIMS THAT NOTWITHSTANDING THE LANGUAGE IN THE REQUEST FOR BEST AND FINAL OFFERS, IT WAS IMPROPER FOR DISCUSSIONS TO BE HELD WITH ONLY WESTINGHOUSE. UNDER FEDERAL PROCUREMENT PRINCIPLES, ANY OPPORTUNITY TO REVIEW OR MODIFY A PROPOSAL IS REGARDED AS CONSTITUTING DISCUSSIONS AND IF DISCUSSIONS ARE CONDUCTED WITH ONE OFFEROR, THEY MUST BE CONDUCTED WITH ALL OTHER OFFERORS IN THE COMPETITIVE RANGE. BURROUGHS CORPORATION, B-194168, NOVEMBER 28, 1979, 79-2 CPD 376. SIMILARLY, IF DISCUSSIONS ARE REOPENED WITH ONE OFFEROR AFTER THE RECEIPT OF BEST AND FINAL OFFERS, THEY MUST BE REOPENED WITH ALL OFFERORS IN THE COMPETITIVE RANGE, AND THOSE OFFERORS MUST BE GIVEN AN OPPORTUNITY TO SUBMIT REVISED PROPOSALS. UNIVERSITY OF NEW ORLEANS, B-184194, SEPTEMBER 19, 1977, 77-2 CPD 201. IF, HOWEVER, A PROPOSAL HAS BEEN PROPERLY EXCLUDED FROM THE COMPETITIVE RANGE, THERE IS NO OBLIGATION, EITHER BEFORE OR AFTER THE RECEIPT OF BEST AND FINAL OFFERS, TO NEGOTIATE WITH THAT OFFEROR. SEE BURROUGHS CORPORATION, SUPRA. NOR DO FEDERAL PROCUREMENT PRINCIPLES REQUIRE DISCUSSIONS WITH AN OFFEROR ORIGINALLY IN THE COMPETITIVE RANGE WHEN IT IS DETERMINED AFTER RECEIPT OF REVISED PROPOSALS (OR BEST AND FINAL OFFERORS) THAT THE OFFER IS OUTSIDE THE COMPETITIVE RANGE. SEE INFO-DYNE, INC., B-188898, FEBRUARY 27, 1978, 78-1 CPD 156.

HERE, ALTHOUGH UTDC WAS INITIALLY CONSIDERED TO BE WITHIN THE COMPETITIVE RANGE AND DISCUSSIONS WERE HELD WITH THAT FIRM, ONCE ITS REVISED OFFER (BEST AND FINAL OFFER) WAS SUBMITTED AND EVALUATED, DADE COUNTY NO LONGER CONSIDERED THE UTDC PROPOSAL WITHIN THE COMPETITIVE RANGE. THUS, THE FACT THAT WESTINGHOUSE ALONE WAS GIVEN THE OPPORTUNITY TO REVISE ITS "BEST AND FINAL" OFFER DOES NOT IN ITSELF ESTABLISH ANY IMPROPRIETY. FURTHER, AS THERE IS NO EVIDENCE THAT THE RFP REQUIREMENTS WERE SIGNIFICANTLY CHANGED DURING THE FINAL DISCUSSIONS WITH WESTINGHOUSE, THERE WAS NO REQUIREMENT THAT THE RFP BE AMENDED AND NEW OFFERS SOUGHT FROM THE OTHER OFFERORS SUCH AS UTDC INITIALLY WITHIN THE COMPETITIVE RANGE. SEE INTERNATIONAL BUSINESS MACHINES, SUPRA. THEREFORE, WE HAVE NO BASIS TO QUESTION DADE COUNTY'S CONDUCTING DISCUSSIONS WITH WESTINGHOUSE AFTER THE RECEIPT OF BEST AND FINAL OFFERS.

THE COMPLAINT IS DENIED.