B-224274, DEC 2, 1986, 66 COMP.GEN. 106

B-224274: Dec 2, 1986

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PROCUREMENT - COMPETITIVE NEGOTIATION - CONTRACT AWARDS - INITIAL-OFFER AWARDS - PROPRIETY PROTEST AGAINST AGENCY AWARD TO OTHER THAN THE LOWEST COST OFFEROR ON THE BASIS OF INITIAL PROPOSALS IS DENIED WHERE THE PROTESTER'S ALLEGEDLY LOWER COST ALL OR NONE ALTERNATE PROPOSAL DID NON CONSTITUTE A VALID OFFER BUT WAS ONLY AN INFORMATIONAL QUANTITY RECOMMENDATION. ENTRIES WERE REQUESTED FOR DIFFERENT CLINS FOR EACH OF THE DEVICES. 879 BLU 92/B'S WHICH WERE TO BE AWARDED. THE ARMY DETERMINED THAT IT WAS IN THE GOVERNMENTS'S INTEREST TO AWARD ON THE BASIS OF 100 PERCENT OF EACH OF THE TWO ITEMS. FOR CLIN 001 (100 PERCENT OF THE BLU-91/B'S WAS $18.35. ITS UNIT PRICE FOR CLIN 007 (100 PERCENT OF THE BLR-92/B'S) WAS $15.35.

B-224274, DEC 2, 1986, 66 COMP.GEN. 106

PROCUREMENT - COMPETITIVE NEGOTIATION - CONTRACT AWARDS - INITIAL-OFFER AWARDS - PROPRIETY PROTEST AGAINST AGENCY AWARD TO OTHER THAN THE LOWEST COST OFFEROR ON THE BASIS OF INITIAL PROPOSALS IS DENIED WHERE THE PROTESTER'S ALLEGEDLY LOWER COST ALL OR NONE ALTERNATE PROPOSAL DID NON CONSTITUTE A VALID OFFER BUT WAS ONLY AN INFORMATIONAL QUANTITY RECOMMENDATION, REQUESTED UNDER SOLICITATION FOR AGENCY USE IN DETERMINING ECONOMICAL FUTURE PURCHASE QUANTITIES.

QUANTIC INDUSTRIES, INC.:

QUANTIC INDUSTRIES, INC. (QUANTIC), PROTESTS THE AWARD OF A CONTRACT TO ACTION MANUFACTURING CO. (ACTION), UNDER REQUEST FOR PROPOSALS (RFP) NO. DAAA09-86-R-1143 ISSUED BY THE ARMY. THE PROTESTER ASSERTS THAT THE ARMY FAILED TO CONSIDER QUANTIC'S LOWEST PRICED ALTERNATE ALL OR NONE PROPOSAL, AND INSTEAD AWARDED THE ENTIRE QUANTITY TO ACTION AT A HIGHER PRICE ON THE BASIS OF INITIAL PROPOSALS.

WE DENY THE PROTEST.

THE RFP, FOR TWO TYPES OF ELECTRO-MECHANICAL SAFE AND ARMING ASSEMBLIES, WE RESTRICTED TO CURRENT MOBILIZATION BASE PRODUCERS. THE RFP SCHEDULE CALLED FOR SEPARATE CONTRACT LINE ITEM NUMBER (CLIN) PRICE ENTRIES FOR THE TWO TYPES OF DEVICES, RESPECTIVELY DESIGNATED BLU-91/B AND BLU-92/B. ENTRIES WERE REQUESTED FOR DIFFERENT CLINS FOR EACH OF THE DEVICES, THE CLINS REPRESENTING 100 PERCENT, 65 PERCENT AND 35 PERCENT OF THE TOTAL QUANTITIES OF 441,668 BLU-91/B'S AND 175,879 BLU 92/B'S WHICH WERE TO BE AWARDED. THE SCHEDULE CALLED FOR CLIN PRICING ON THE BASIS OF F.O.B. ORIGIN AND F.O.B. DESTINATION, WITH AND WITHOUT FIRST ARTICLE TESTING FOR EACH OF THE ITEMS. THE RFP PROVIDED FOR AWARD ON THE BASIS OF THE LOWEST OVERALL COST TO THE GOVERNMENT FOR THE COMBINATION OF CLINS DEEMED TO BE IN THE GOVERNMENT'S BEST INTEREST.

QUANTIC AND ACTION BOTH ENTERED PRICES ON THE SCHEDULE FOR THE VARIOUS CLINS REQUESTED. THE ARMY DETERMINED THAT IT WAS IN THE GOVERNMENTS'S INTEREST TO AWARD ON THE BASIS OF 100 PERCENT OF EACH OF THE TWO ITEMS. ACTION'S UNIT PRICE, F.O.B. ORIGIN, WITH FIRST ARTICLE TESTING, FOR CLIN 001 (100 PERCENT OF THE BLU-91/B'S WAS $18.35, AND ITS UNIT PRICE FOR CLIN 007 (100 PERCENT OF THE BLR-92/B'S) WAS $15.35. ACTION'S TOTAL PRICE OF CLINS 001 AND 007 WAS $10,804,350.45, F.O.B. ORIGIN, WITH FIRST ARTICLE TESTING. QUANTIC'S PRICES, AS ENTERED ON THE SCHEDULE, WERE HIGHER FOR BOTH CLINS. TWO OTHER OFFERORS WERE ALSO HIGHER PRICED THAN 001 AND 007, ON THE BASIS THAT ACTION'S INITIAL PROPOSAL PROVIDED THE LOWEST EVALUATED COST. SECTION L-1.13 OF THE RFP PROVIDED THAT AWARD COULD BE MADE ON THE BASIS OF INITIAL OFFERS RECEIVED WITHOUT DISCUSSIONS.

SECTION L-9 OF THE RFP ENTITLED "ECONOMIC PURCHASE QUANTITY SUPPLIES," CONTAINED A SPACE FOR "OFFEROR RECOMMENDATIONS," UNDER WHICH QUANTIC ENTERED THE FOLLOWING INFORMATION:

(A) OFFERORS ARE INVITED TO STATE AN OPINION ON WHETHER THE QUANTITIES OF SUPPLIES ON WHICH BIDS, PROPOSALS OR QUOTES ARE REQUESTED IN THIS SOLICITATION IS (ARE) ECONOMICALLY ADVANTAGEOUS TO THE GOVERNMENT.

(B) EACH OFFEROR WHO BELIEVES THAT ACQUISITIONS IN DIFFERENT QUANTITIES WOULD BE MORE ADVANTAGEOUS IS INVITED TO RECOMMEND AN ECONOMIC PURCHASE QUANTITY. IF DIFFERENT QUANTITIES ARE RECOMMENDED, A TOTAL AND A UNIT PRICE MUST BE QUOTED FOR APPLICABLE ITEMS. AN ECONOMIC PURCHASE QUANTITY IS THAT QUANTITY AT WHICH A SIGNIFICANT PRICE BREAK OCCURS AND BEYOND WHICH NO SUBSTANTIAL DECREASE WOULD DIFFERENT QUANTITY POINTS, THIS INFORMATION IS DESIRED AS WELL.

OFFEROR RECOMMENDATIONS

PRICE QUOTATION

ITEM QUANTITY PRICE TOTAL

COMBINE QUOTATION

001AB BLU-91/B 441,668 $18.13

0007AB BLU-92/B 175,879 $15.75 $10,777,535

FOB: DESTINATION

(C) THE INFORMATION REQUESTED IN THIS PROVISION IS BEING SOLICITED TO AVOID ACQUISITIONS IN DISADVANTAGEOUS QUANTITIES AND TO ASSIST THE GOVERNMENT IN DEVELOPING A DATA BASE FOR FUTURE ACQUISITIONS OF THESE ITEMS. HOWEVER, THE GOVERNMENT RESERVES THE RIGHT TO AMEND OR CANCEL THE SOLICITATION AND RESOLICIT WITH RESPECT TO ANY INDIVIDUAL ITEM IN THE EVENT QUOTATIONS RECEIVED AND THE GOVERNMENT'S REQUIREMENTS INDICATE THAT DIFFERENT QUANTITIES SHOULD BE ACQUIRED.

QUANTIC CONTENDS THAT THIS INFORMATION CONSTITUTES AND ALTERNATE ALL OR NONE OFFER AT A LOWER PRICE THAN ACTION'S. QUANTIC POINTS OUT THAT THE RFP DID NOT PROHIBIT ALL OR NONE OFFERS AND THAT, ABSENT SUCH A PROHIBITION, ITS ALTERNATE ALL OR NONE OFFER SHOULD BE CONSIDERED BY THE PROCURING AGENCY. RKFM PRODUCTS CORP., B-186424, SEPT. 15, 1976, 76-2 CPD 247. QUANTIC ASSERTS THAT SINCE IT SUBMITTED A TECHNICALLY ACCEPTABLE OFFER, ONLY QUANTIC IS ENTITLED TO AWARD ON THE BASIS OF ITS LOW INITIAL OFFER SINCE, UNDER THE COMPETITION IN CONTRACTING ACT OF 1984, THE AGENCY MAY ONLY AWARD WITHOUT CONDUCTING DISCUSSIONS WHERE ACCEPTABLE ON THE BASIS OF INITIAL PROPOSALS WOULD RESULT IN THE LOWEST OVERALL COST TO THE GOVERNMENT. 10 U.S.C. 2305(B)(4)(A)(II) (SUPP. II 1985); SPERRY CORP., B-220521, JAN. 13, 1986, 86-1 CPD 28.

QUANTIC'S ARGUMENT IS BASED ENTIRELY ON ITS PREMISE THAT THE ABOVE QUOTED INFORMATION CONSTITUTES AN ALTERNATE ALL OR NONE OFFER WHICH WARRANTS EVALUATION OR CONSIDERATION BY THE ARMY. THE ARMY ASSERTS THAT THIS ENTRY MERELY CONSTITUTES INFORMATION SOLICITED BY THE ARMY. WE AGREE THAT THE ENTRY WAS INFORMATIONAL IN NATURE AND DID NOT CONSTITUTE AN ALTERNATE ALL OR NONE OFFERED BY QUANTIC.

THE SPECIFIC LANGUAGE OF THE SECTION MAKES IT CLEAR THAT THE PURPOSE OF THE INFORMATION PROVIDED IS PRIMARILY FOR THE DEVELOPMENT OF A DATA BASE FOR FUTURE ACQUISITIONS. THE INFORMATION IS NOT FOR USE IN THE CONTEST OF THE INSTANT RFP SINCE IN ORDER TO USE HE INFORMATION TO ALTER THE QUANTITIES BEING SOLICITED THE AGENCY RESERVES THAT RIGHT TO AMEND OR CANCEL THE RFP. THE FACT THAT THE SECTION CONTEMPLATES AMENDMENT OR CANCELLATION TO UTILIZE THE INFORMATION PROVIDED CONTRADICTS QUANTIC'S POSITION THAT THE SECTION IS INTENDED FOR ALTERNATE OFFERS UNDER THE PRESENT RFP. THIS PURPOSE IS MADE MORE EXPLICIT IN FEDERAL ACQUISITION REGULATION (FAR) SUBPART 72., (FAC NO. 84-11, AUG. 30, 1985), ENTITLED "PLANNING FOR THE PURCHASE OF SUPPLIES IN ECONOMIC QUANTITIES." FAR, 7.220 STATES THAT "THE SUBPART PRESCRIBES POLICIES AND PROCEDURES AND GATHERING INFORMATION FORM OFFERORS TO ASSIST THE GOVERNMENT IN PLANNING THE MOST ADVANTAGEOUS QUANTITIES IN WHICH SUPPLIES SHOULD BE PURCHASED." ACCORDINGLY, FAR, 7.204(B) STATES:

IN RECOGNITION OF THE ACT THAT ECONOMIC PURCHASE QUANTITY DATA FURNISHED BY OFFERORS ARE ONLY ONE OF THE MANY DATA INPUTS REQUIRED FOR DETERMINING THE MOST ECONOMICAL ORDER QUANTITIES, CONTRACTING OFFICERS SHOULD GENERALLY TAKE NO ACTION TO REVISE QUANTITIES TO BE ACQUIRED IN CONNECTION WITH THE INSTANT PROCUREMENT. . . .

IN OUR VIEW, BY THIS LANGUAGE, THE FAR MAKES IT CLEAR THAT SECTION L 9 IS INTENDED TO GATHER INFORMATION FOR STRUCTURING FUTURE PROCUREMENTS, AND ONLY INCIDENTALLY TO FACILITATE THE POSSIBLE ALTERATION OF THE INSTANT PROCUREMENT.

WHILE QUANTIC ARGUED THAT USE OF AN RFP FOR THIS PURPOSE IS CONTRARY TO FAR 15.402(D), PROSCRIBING THE USE OF AN RFP FOR A SOLICITATION FOR INFORMATION OR PLANNING PURPOSES, QUANTIC MISCONSTRUES THE INTENT OF THIS PROVISION WHICH MERELY INDICATES THAT RFP'S SHOULD BE USED WITH THE INTENTION AND EXPECTATION OF RECEIVING OFFERS, NOT MERELY FOR PLANNING PURPOSES. IT DOES NOT PREVENT THE INCIDENTAL USE OF A SECTION TO SOLICIT RECOMMENDATIONS OR INFORMATION FOR FUTURE PROCUREMENT USE AS WELL-- AS PERMITTED BY FAR, 7.202(B). HERE, IN FACT THE RFP WAS INTENDED TO SOLICIT OFFERS AND AN AWARD HAS, IN FACT, BEEN MADE. THUS, THE RFP WAS NOT ISSUED FOR INFORMATIONAL OR PLANNING PURPOSES, AND IS NOT INCONSISTENT WITH FAR, 15.402(D) IN THIS RESPECT.

THUS, CONTRARY TO QUANTIC'S CONTENTION THAT SECTION L-9 WAS DESIGNED TO ELICIT ALTERNATE PROPOSALS, IT IS CLEAR THAT THE INFORMATION PROPERLY WAS REQUESTED PRIMARILY FOR PLANNING PURPOSES FOR FUTURE PROCUREMENTS, AND WAS NOT INTENDED FOR SOLICITATION PROVIDED NOTICE THAT AWARD MIGHT BE MADE ON THE BASIS OF INITIAL PROPOSALS, THE ARMY PROPERLY MADE AWARD OF THE CLINS 001 AND 007 TO ACTION SINCE SUCH AN AWARD WAS CORRECTLY DETERMINED. CONSOLIDATED BELL, INC., B-220425, MAR. 11, 1986, 86-1 CPD 238.

THE PROTEST IS DENIED.