B-148265, JULY 9, 1962, 42 COMP. GEN. 17

B-148265, JULY 9, 1962, 42 COMP. GEN. 17

CONTRACTS - SPECIFICATIONS - DEFINITENESS REQUIREMENT A REQUEST FOR PROPOSALS USING DRAWINGS, DIAGRAMS AND SPECIFICATIONS WHICH ARE DEFICIENT AND INADEQUATE BUT WHICH ARE TO BE EXPLAINED TO THE LOWEST OFFEROR SELECTED FOR NEGOTIATION AND IF THERE IS ANY INCREASE IN THE COST THEN OTHER BIDDERS WILL BE GIVEN AN OPPORTUNITY TO SUBMIT REVISED PROPOSALS IS A PROCUREMENT PROCEDURE WHICH IS INDEFINITE, WILL RESULT IN UNREALISTICALLY LOW BIDS, AND DOES NOT AFFORD ALL BIDDERS EQUAL OPPORTUNITY AND, THEREFORE, SUCH A REQUEST FOR PROPOSALS IS INVALID.

TO THE SECRETARY OF THE ARMY, JULY 9, 1962:

FURTHER REFERENCE IS MADE TO THE OBJECTIONS RAISED BY SENTINEL ELECTRONICS, INCORPORATED, AGAINST THE USE OF A PROPOSED METHOD OF PROCUREMENT MADE A PART OF THE TERMS AND CONDITIONS OF REQUEST FOR PROPOSALS NO. SC-36-039-62-11128-A3, AND TO THE CORPORATION'S PROTEST AGAINST THE USE OF DEFICIENT SPECIFICATIONS AND DRAWINGS, AS TO WHICH YOUR DEPARTMENT FURNISHED US A REPORT WITH COVERING LETTER DATED APRIL 30, 1962.

WITH RESPECT TO THE QUESTION AS TO THE PROPRIETY OF THOSE TERMS OF THE SOLICITATION WHICH AFFORD POSSIBLE PREFERENCE TO LABOR SURPLUS AREA FIRMS, SUCH PROCUREMENT PROCEDURE WAS CONSIDERED AND APPROVED IN OUR DECISION OF JUNE 1, 1962, B-148512, 41 COMP. GEN. 787, INVOLVING ANOTHER PURCHASE. SINCE THE PRESENT PROTEST PRESENTS NO NEW AND MATERIAL EVIDENCE IN THAT REGARD, OR ANY CONTENTIONS NOT CONSIDERED IN THE CITED DECISION, THE PROTESTING FIRM HAS BEEN ADVISED THAT OUR CONCURRENCE WITH SUCH PROCEDURE WILL NOT BE DISTURBED. A COPY OF SUCH DECISION IS INCLOSED.

THE SECOND OBJECTION RELATES TO THE USE OF QUESTIONABLE SPECIFICATIONS AND DRAWINGS WHICH THE PROTESTING BIDDER FEELS ARE PREJUDICIAL BECAUSE OF THE POSSIBILITY THAT FIRMS UNSUSPECTING AND UNINFORMED AS TO ACTUAL PRODUCTION COSTS MAY SUBMIT UNREALISTIC OFFERS. WE BELIEVE THERE IS MERIT TO SUCH PROTEST. ADMITTEDLY, MANY OF THE DRAWINGS, DIAGRAMS AND SPECIFICATIONS ARE EITHER ERRONEOUS, DEFICIENT OR NONEXISTENT. ATTEMPT IS MADE TO OVERCOME THE LACK OF ADEQUATE AND INFORMATIVE SPECIFICATIONS IN THE SOLICITATION BY THE FOLLOWING PROVISION:

NOTE NUMBER 2: THE CONTRACTOR AGREES TO THOROUGHLY CHECK THE FURNISHED GOVERNMENT DRAWINGS COVERED BY SC-DL-338011 (OSCILLOSCOPE AN/USM-50) AND SC-DL-338064 (COVER ASSEMBLY) AGAINST GOVERNMENT FURNISHED MODEL, EXCEPTIONS TO MODEL LISTED IN THE CONTRACT, AND APPLICABLE SPECIFICATIONS. CONFLICTS IN DESIGN, CONSTRUCTION, AND CHARACTERISTICS BETWEEN SPECIFICATIONS, MODEL (WITH EXCEPTIONS), AND DRAWINGS SHALL BE RESOLVED, AND RESULTING CHANGES INCORPORATED INTO THE DRAWINGS, AS FOLLOWS: THE REQUIREMENTS OF THE APPLICABLE SPECIFICATIONS GOVERN OVER THE EXCEPTIONS, MODEL, AND DRAWINGS; THE EXCEPTIONS GOVERN OVER THE MODEL, AND THE MODEL GOVERNS OVER THE DRAWINGS. ANY DISCREPANCIES WHICH ARISE BETWEEN THE DRAWINGS AND THE MODEL (WITH EXCEPTIONS) WILL BE RESOLVED IN CONSULTATION WITH FIELD ENGINEERING DIVISION, U.S. ARMY SIGNAL MATERIEL SUPPORT AGENCY.

IN LETTER OF JANUARY 16, 1962, TO THE PROCUREMENT AGENCY, THE PROTESTING BIDDER CITES SPECIFIC EXAMPLES OF SERIOUS TECHNICAL DEFICIENCIES IN THE SPECIFICATIONS FOR CERTAIN COMPONENTS WHICH WOULD MATERIALLY AFFECT THE PROJECTED PRICE OF AN UNINFORMED BIDDER IN THE COMPUTATION OF HIS ULTIMATE OFFER. WHILE IT MAY BE THAT THE BEST INFORMATION AVAILABLE TO DESCRIBE THE DESIRED END PRODUCT WAS FURNISHED TO THE INDUSTRY WITH THE REQUEST FOR PROPOSALS, WE ARE OF THE OPINION THAT THE INDEFINITENESS OF THE SOLICITATION RENDERS IT FATALLY DEFECTIVE, PARTICULARLY IN VIEW OF THE CONTEMPLATED PROCEDURE TO BE FOLLOWED IN THE SELECTION OF A CONTRACTOR. NOTE NO. 5 OF THE REQUEST PROVIDES IN PERTINENT PART THAT BY NEGOTIATION PREFERENCE IN THE AWARD OF THE CONTRACT WILL BE GIVEN TO SMALL BUSINESS AND LABOR DISTRESSED AREA FIRMS IN THE SPECIFIED ORDER OF CLASSIFICATION, "BEGINNING WITH THE LOWEST OFFEROR.' THE ADMINISTRATIVE REPORT PREPARED BY THE CHIEF, PROCUREMENT AND DISTRIBUTION DIVISION STATES THAT--- "THE CONTRACTING OFFICER INTENDS TO POINT OUT ACTUAL ERRORS CONTAINED IN THE DRAWINGS TO THE LOW OFFEROR PRESENTLY UNDER CONSIDERATION FOR AWARD. THERE IS ANY NOTICEABLE INCREASE IN THE COST AS A RESULT,OTHER BIDDERS IN THE GENERAL AREA WILL BE GIVEN AN OPPORTUNITY TO SUBMIT REVISED PROPOSALS.'

CLEARLY, SUCH PROCEDURE FAVORS THOSE FIRMS UNWITTINGLY SUBMITTING UNREALISTICALLY LOW BIDS. IN FACT, THE CONTRACTING OFFICER'S REPORT DATED MARCH 31, 1962, STATES THAT--- "THE LOWEST RESPONSIVE OFFER WAS RECEIVED FROM A SMALL BUSINESS CONCERN WHICH AGREES TO PERFORM MORE THAN FIFTY PERCENT (50 PERCENT) OF THE CONTRACT IN A LABOR SURPLUS AREA. THE PRICE OF THIS PROPOSAL IS SIGNIFICANTLY LOWER THAN THAT OF THE OTHER TWENTY- SEVEN (27) PROPOSALS SO THAT NO OTHER OFFERORS ARE PRESENTLY IN THE ZONE OF CONSIDERATION.' IT WOULD APPEAR REASONABLE TO ASSUME THAT SUCH "SIGNIFICANTLY LOWER" OFFER WAS DUE, AT LEAST, IN PART TO THE BIDDER'S LACK OF UNDERSTANDING AS TO PRODUCTION COSTS BECAUSE OF THE ERRONEOUS AND INADEQUATE SPECIFICATIONS.

SINCE THE ORDER IN WHICH THE BIDDERS ARE TO BE SELECTED FOR NEGOTIATION BEGINS WITH THE LOWEST OFFEROR, THEIR TENTATIVE QUOTATIONS BECOME MATERIAL. IF ALL INTERESTED MANUFACTURERS OF THE EQUIPMENT IN THIS CASE ARE TO BE ACCORDED AN EQUAL OPPORTUNITY, UNDER THE ADOPTED PROGRAM, WE FEEL THAT ALL KNOWN ERRORS, DEVIATIONS AND DISCREPANCIES IN THE DRAWINGS, DIAGRAMS AND SPECIFICATIONS SHOULD BE SET FORTH IN THE SOLICITATION DOCUMENTS, RATHER THAN DEFERRING SUCH DISCLOSURES UNTIL AFTER THE PROPOSALS HAVE BEEN EVALUATED AND DURING NEGOTIATIONS WITH THE LOWEST BIDDER. ACCORDINGLY, IT IS OUR VIEW THAT THE SUBJECT REQUEST FOR PROPOSALS IS INVALID.