B-225181.2, DEC 3, 1986, 86-2 CPD 637

B-225181.2, DEC 3, 1986, 86-2 CPD 637

PROCUREMENT - COMPETITIVE NEGOTIATION - CONTRACT AWARDS - INITIAL OFFER AWARDS - PROPRIETY DIGEST: 1. AWARD ON AN INITIAL PROPOSAL BASIS AFTER AN EXTENSION OF TIME OF ACCEPTANCE BY OFFERORS IS NOT IMPROPER. CONTRACTING AGENCY MAY MAKE AWARD IN A NEGOTIATED PROCUREMENT WITHOUT HOLDING DISCUSSIONS PROVIDED THERE EXISTS ADEQUATE COMPETITION TO CLEARLY DEMONSTRATE THAT THE AWARD WILL RESULT IN THE LOWEST OVERALL COST TO THE GOVERNMENT AT A FAIR AND REASONABLE PRICE AND THE SOLICITATION ADVISED OFFERORS OF SUCH POSSIBILITY. PROCUREMENT - COMPETITIVE NEGOTIATION - OFFERS - PRICE ADJUSTMENTS - LATE SUBMISSION - ACCEPTABILITY 2. A PRICE REDUCTION SUBMITTED ALMOST ONE MONTH AFTER THE OFFEROR HAD GRANTED AN EXTENSION OF THE TIME FOR ACCEPTANCE OF ITS PROPOSAL, AND SEVERAL DAYS AFTER THE CONTRACT HAD BEEN AWARDED ON THE BASIS OF INITIAL PROPOSALS RECEIVED, PROPERLY WAS NOT CONSIDERED BY THE AGENCY AS LATE.

AUTOMATED INDUSTRIES AND ASSOCIATES, INC.:

AUTOMATED INDUSTRIES AND ASSOCIATES, INC., (AIA), PROTESTS THE AWARD OF A CONTRACT TO MID-STATES METAL LINES, INC. (MID-STATES), UNDER REQUEST FOR PROPOSALS (RFP) NO. DAAA09-86-R-0847, ISSUED BY THE ARMY ARMAMENT MUNITIONS AND CHEMICAL COMMAND (AMCCOM). THE PROTESTER ALLEGES THAT THE AGENCY ACTED UNREASONABLY WHEN IT MADE THE AWARD ON THE BASIS OF INITIAL PROPOSALS AFTER REQUESTING AN EXTENSION OF OFFERS, AND RECEIVING AN EXTENSION FROM THE PROTESTER WITH THE PROVISO THAT THE PROTESTER RESERVED THE PRIVILEGE OF ADJUSTING ITS PRICE AT THE TIME OF BEST AND FINAL OFFER.

THE AGENCY HAS FILED A LETTER WITH OUR OFFICE SETTING FORTH CERTAIN FACTUAL INFORMATION AND RECOMMENDING THAT THE PROTEST BE DISMISSED FOR FAILURE TO STATE A VALID BASIS FOR PROTEST, A CONCLUSION WE HAD ALREADY REACHED BASED ON OUR REVIEW OF THE PROTESTER'S SUBMISSION. 4 C.F.R. SEC. 21.3(F) (1986).

BACKGROUND

ON MAY 20, 1986, AMCCOM ISSUED A REQUEST FOR PROPOSALS (RFP) FOR THE PROCUREMENT OF 356 SHIPPING CONTAINERS. AMENDMENTS WERE MADE TO THE RFP ON JULY 10 AND JULY 22. THE SECOND AMENDMENT SET THE DATE FOR THE RECEIPT OF PROPOSALS AS AUGUST 6. TEN PROPOSALS WERE RECEIVED AS SCHEDULED, OF WHICH THE FIVE LOWEST WERE:

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BECAUSE EVALUATION OF THE OFFERS COULD NOT BE CONCLUDED PRIOR TO THE EXPIRATION OF THE ACCEPTANCE PERIOD ON OCTOBER 3, AMCCOM, ON SEPTEMBER 29, REQUESTED THAT THE OFFERORS EXTEND THE ACCEPTANCE PERIOD FOR THEIR PROPOSALS FOR AN ADDITIONAL 60 DAYS TO DECEMBER 2.

THE PROTESTER, BY LETTER DATED OCTOBER 6, EXTENDED ITS OFFER THROUGH DECEMBER 2, "WITH THE PRIVILEGE OF ADJUSTING PRICE AT TIME OF LAST AND FINAL OFFER." ON OCTOBER 30, AMCCOM AWARDED THE CONTRACT TO MID-STATES ON THE BASIS OF THAT FIRM'S INITIAL PROPOSED PRICE OF $690.00 PER UNIT. LETTER DATED NOVEMBER 4, AIA SUBMITTED A REVISED PRICE QUOTATION OF $685.00 PER UNIT. IT RECEIVED THE AGENCY'S OCTOBER 30 NOTICE OF AWARD TO MID-STATES ON NOVEMBER 7 AND FILED THE CURRENT PROTEST WITH OUR OFFICE NOVEMBER 17.

DISCUSSION

THE AGENCY DETERMINED THAT AIA'S NOVEMBER 4 LETTER WAS NOT FOR CONSIDERATION BECAUSE IT WAS A LATE MODIFICATION TO A PROPOSAL NOT OTHERWISE IN LINE FOR AWARD. AIA ARGUES, HOWEVER, THAT THE AGENCY ACTED IMPROPERLY IN AWARDING THE CONTRACT ON THE BASIS OF INITIAL PROPOSALS, THEREBY PREVENTING IT FROM SUBMITTING A REVISED PRICE QUOTATION, ESPECIALLY IN LIGHT OF THE FACT THAT AWARD WAS MADE SOME 33 DAYS PRIOR TO THE EXPIRATION OF THE EXTENSION OF OFFERS WHEN THE AGENCY WAS AWARE THAT AIA HAD INDICATED IT MAY WISH TO "ADJUST" ITS PRICE "AT TIME OF LAST AND FINAL OFFER."

AS AN INITIAL MATTER, WE NOTE THAT WE HAVE PREVIOUSLY HELD THAT, UNLESS SPECIFICALLY PROHIBITED, AN OFFEROR MAY SUBMIT A PRICE REDUCTION IN CONJUCTION WITH AN EXTENSION OF ITS ACCEPTANCE PERIOD. GEMMA CORP., B-218389.2, AUG. 30, 1985, 85-2 CPD 252. HOWEVER, WE STATED THAT, "... ANY PRICE REDUCTION CLEARLY MUST BE OFFERED AT THE SAME TIME AS THE EXTENSION, NOT, AS HERE, WEEKS ... LATER." ID. HERE, AIA EXTENDED THE ACCEPTANCE PERIOD OF ITS PROPOSAL WITHOUT MAKING ANY SPECIFIC ADJUSTMENT TO ITS PRICE. IT SIMPLY ATTEMPTED TO RESERVE "THE PRIVILEGE OF ADJUSTING PRICE AT TIME OF LAST AND FINAL OFFER," AN OPPORTUNITY WHICH IT WOULD HAVE HAD IN ANY EVENT SHOULD BEST AND FINAL OFFERS HAVE BEEN REQUESTED. THE AGENCY DID NOT FIND IT NECESSARY TO DO SO, HOWEVER, AND PROCEEDED WITH AN AWARD ON THE BASIS OF INITIAL PROPOSALS ON OCTOBER 30. IT WAS NOT UNTIL ALMOST ONE MONTH AFTER IT HAD EXTENDED ITS OFFER, AND SEVERAL DAYS AFTER THE DATE OF AWARD, THAT AIA ATTEMPTED TO REVISE ITS PRICE DOWNWARD TO AN AMOUNT $4.65 PER UNIT BELOW THE AWARDEE'S.

AS A GENERAL RULE, A CONTRACTING AGENCY MAY MAKE AN AWARD WITHOUT HOLDING DISCUSSIONS OR REQUESTING BEST AND FINAL OFFERS, PROVIDED THAT (1) THE SOLICITATION ADVISES OFFERORS OF THIS POSSIBILITY, AND (2) THERE HAS BEEN ADEQUATE COMPETITION TO CLEARLY DEMONSTRATE THAT THE AWARD WILL RESULT IN THE LOWEST OVERALL COST TO THE GOVERNMENT AT A FAIR AND REASONABLE PRICE. GEMMA CORP., B-218389.2, SUPRA; WILSON CONCEPTS OF FLORIDA, INC., B-224485, NOV. 14, 1986, 86-2 CPD PARA. ***; FEDERAL ACQUISITION REGULATION, 48 C.F.R. SEC. 15.610(A) (1985).

IN THE INSTANT CASE, THE AGENCY INFORMALLY ADVISES US THAT THE SOLICITATION CONTAINED THE REQUISITE NOTICE, AND THE SUBMISSION OF 10 PROPOSALS DEMONSTRATES THAT THE REQUIRED ADEQUATE COMPETITION EXISTED AND THAT AWARD WAS MADE AT THE LOWEST OVERALL COST AT A FAIR AND REASONABLE PRICE.

SINCE CONSIDERATION OF AIA'S PRICE REDUCTION WOULD HAVE CONSTITUTED DISCUSSIONS, SEE ASTRONAUTICS CORPORATION OF AMERICA, B-185943, NOV. 9, 1976, 76-2 CPD PARA. 391, WHICH THE AGENCY WAS NOT REQUIRED TO HOLD, WE CONCLUDE THAT THE AGENCY ACTED PROPERLY IN AWARDING THE CONTRACT TO MID- STATES.

THE PROTEST IS DISMISSED.