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B-160976, MAY 29, 1967

B-160976 May 29, 1967
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TO ATLANTIC TERMINAL COMPANY: REFERENCE IS MADE TO YOUR TELEGRAM OF FEBRUARY 28. YOU CHARGE FAVORITISM ON THE PART OF ARMY OFFICIALS IN AWARDING AND EXTENDING THE PRIOR CONTRACTS WITHOUT SECURING COMPETITION ALTHOUGH YOU HAD PRESENTED EVIDENCE TO SUCH OFFICIALS THAT RESPONSIBLE COMPETITION WAS AVAILABLE FROM YOUR FIRM. YOU ALSO QUESTION THE VALIDITY OF A PROVISION IN PAST CONTRACTS PERMITTING PRICE ADJUSTMENTS ON THE BASIS OF COLLECTIVE BARGAINING AGREEMENTS UNDER WHICH ACL WAS OPERATING WITH ITS EMPLOYEES AND WHICH YOU SAY RESULTED IN UNTOLD ADDITIONAL COSTS TO THE GOVERNMENT. YOU ARE ADVISED THAT WHILE A BIDDER MAY PROTEST DIRECTLY TO THE COMPTROLLER GENERAL A PROPOSED OR ACTUAL AWARD OF A CONTRACT ADVERSELY AFFECTING HIM.

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B-160976, MAY 29, 1967

TO ATLANTIC TERMINAL COMPANY:

REFERENCE IS MADE TO YOUR TELEGRAM OF FEBRUARY 28, 1967, AND TO SUBSEQUENT COMMUNICATIONS, WITH ENCLOSURES, CONCERNING THE AWARD OF A CONTRACT TO ATLANTIC COAST LINE RAILROAD COMPANY (ACL) PURSUANT TO REQUEST FOR PROPOSALS NO. DAHC 21-67-R-0047 FOR RAILROAD SERVICES AT MILITARY OCEAN TERMINAL, SUNNY POINT, SOUTHPORT, NORTH CAROLINA, FOR THE PERIOD FEBRUARY 1, 1967 TO JANUARY 31, 1968 (SUBSEQUENTLY CHANGED TO MARCH 1, 1967 THROUGH FEBRUARY 29, 1968).

YOU PROTEST NOT ONLY THE SUBJECT PROCUREMENT BUT ALSO ALL PAST CONTRACTS, AND EXTENSIONS THEREOF, BEGINNING IN 1955, UNDER WHICH ARMY OBTAINED THE SERVICES THROUGH NEGOTIATIONS WITH ACL. YOU CHARGE FAVORITISM ON THE PART OF ARMY OFFICIALS IN AWARDING AND EXTENDING THE PRIOR CONTRACTS WITHOUT SECURING COMPETITION ALTHOUGH YOU HAD PRESENTED EVIDENCE TO SUCH OFFICIALS THAT RESPONSIBLE COMPETITION WAS AVAILABLE FROM YOUR FIRM. YOU ALSO QUESTION THE VALIDITY OF A PROVISION IN PAST CONTRACTS PERMITTING PRICE ADJUSTMENTS ON THE BASIS OF COLLECTIVE BARGAINING AGREEMENTS UNDER WHICH ACL WAS OPERATING WITH ITS EMPLOYEES AND WHICH YOU SAY RESULTED IN UNTOLD ADDITIONAL COSTS TO THE GOVERNMENT.

WITH REFERENCE TO THE PRIOR PROCUREMENTS, YOU ARE ADVISED THAT WHILE A BIDDER MAY PROTEST DIRECTLY TO THE COMPTROLLER GENERAL A PROPOSED OR ACTUAL AWARD OF A CONTRACT ADVERSELY AFFECTING HIM, SUCH A PROTEST SHOULD BE SUBMITTED PROMPTLY IN ORDER THAT A DECISION ON THE MERITS OF THE PROTEST MIGHT SERVE A PRACTICAL PURPOSE. SINCE THE PREVIOUS CONTRACTS FOR THE SERVICES HAVE NOW BEEN COMPLETED IT WOULD APPEAR THAT THE INFORMATION YOU HAVE PROVIDED WITH RESPECT TO THOSE CONTRACTS IS FOR CONSIDERATION IN CONNECTION WITH ANY FUTURE AUDITS OF THE PRICING AND ADMINISTRATION OF SUCH CONTRACTS. WE WILL THEREFORE CONFINE OUR CONSIDERATIONS IN THIS DECISION TO THE LEGALITY OF THE CONTRACT AWARDED TO ACL IN THE CURRENT PROCUREMENT. IT MAY BE STATED, HOWEVER, WITH RESPECT TO CONTRACT PROVISIONS FOR PRICE ADJUSTMENTS ON THE BASIS OF INCREASES OR DECREASES IN WAGE RATES THAT SUCH PROVISIONS ARE PERMITTED UNDER APPROPRIATE CIRCUMSTANCES. SEE PARAGRAPH 3-404.3 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR).

YOU STATE IN YOUR PROTEST THAT YOU SUSPECT ACL WAS NONRESPONSIVE TO THE SOLICITATION IN THAT IT FAILED TO MEET THE SPECIFIED NOVEMBER 29, 1966, SUBMISSION DATE WITH A COMPLETE BID PROPOSAL AND COST ANALYSIS, AND THAT IF A PROPOSAL WAS EVER ISSUED TO ACL THAT FIRM REPLIED ONLY TO THE EFFECT THAT THERE WOULD BE NO CHANGES IN CURRENT PRICES. YOU FURTHER CONTEND THAT YOUR PROPOSAL WAS LOW ON THAT DATE AND LOW AT THE TIME OF YOUR NEGOTIATION CONFERENCE ON JANUARY 20, 1967. YOU STATE THAT DURING SUCH CONFERENCE YOU WERE GIVEN A FINAL CUTOFF DATE FOR PRICE ADJUSTMENTS OF JANUARY 25, 1967, AND THAT YOU WERE ALSO ADVISED THAT THE SAME CUTOFF DATE WAS GIVEN TO ACL. YOU CHARGE THAT ACL WAS NONRESPONSIVE INASMUCH AS ITS FINAL FIGURES WERE NOT SUBMITTED UNTIL FEBRUARY 6, 1967, AND THAT AUCTION TECHNIQUES ENSUED DURING THE PERIOD BETWEEN THE SUBMISSIONS OF YOUR FINAL PROPOSAL AND THAT OF ACL.

CONCERNING YOUR CONTENTIONS AS TO ACL'S INITIAL PROPOSAL, THE RECORD SHOWS THAT BY IDENTICAL LETTERS DATED NOVEMBER 16, 1966, PROPOSALS FOR FURNISHING THE SUBJECT SERVICES WERE SOLICITED FROM YOUR COMPANY AND ACL. THE LETTER SET FORTH A BRIEF OUTLINE OF THE SERVICES TO BE PERFORMED, TOGETHER WITH THE EVALUATION FACTORS, AND REQUESTED INFORMATION AS TO PROPOSED RATES OF PAY AND OVERTIME AND DATE RELATING TO THE QUALIFICATIONS OF THE OFFERORS. IN SUCH CONNECTION THE LETTER SPECIFICALLY PROVIDED:

"THE REQUIREMENTS AS ENUNCIATED IN THE PARAGRAPH ABOVE, ARE GENERAL AND WILL BE MORE SPECIFIC, INCLUDING STATUTORY CLAUSES, IN THE AWARDED CONTRACT; HOWEVER, IN ORDER TO FORM A BASE UPON WHICH TO COMMENCE NEGOTIATIONS AND DETERMINE RESPONSIBILITY, THE FOLLOWING SHOULD BE SUBMITTED TO THE CONTRACTING OFFICER, HQ, EASTERN AREA, MILITARY TRAFFIC MANAGEMENT AND TERMINAL SERVICE, 1ST AVENUE AND 58TH STREET, BROOKLYN, NEW YORK IN WRITING NO LATER THAN 29 NOVEMBER 1966.'

BY LETTERS DATED NOVEMBER 26, 1966, BOTH YOU AND ACL SUBMITTED PROPOSALS FURNISHING THE INFORMATION REQUESTED IN THE SOLICITATION. WHILE ACL SUPPLIED A SMALL PORTION OF THE INFORMATION BY INCORPORATING CERTAIN DATA SET FORTH IN ITS THEN-EXISTING CONTRACT, THROUGH MAKING SPECIFIC REFERENCE THERETO IN ITS PROPOSAL, WE PERCEIVE NO REASONABLE BASIS ON WHICH THE USE OF THAT METHOD OF FURNISHING SUCH DATA SHOULD BE REGARDED AS RENDERING THE PROPOSAL NONRESPONSIVE TO THE SUBJECT SOLICITATION. FURTHER, WE FAIL TO SEE THE SIGNIFICANCE OF YOUR CONTENTION THAT YOUR INITIAL PROPOSAL WAS LOWER THAN ACL'S ON NOVEMBER 29, AND THAT YOU WERE THE LOW OFFEROR AT THE TIME OF YOUR PRELIMINARY NEGOTIATION CONFERENCE ON JANUARY 20 SINCE, AS STATED IN THE LETTER OF NOVEMBER 15, THE PURPOSE OF THE INITIAL PROPOSALS WAS MERELY TO PROVIDE A BASE UPON WHICH TO COMMENCE NEGOTIATIONS AND DETERMINE RESPONSIBILITY, AND NEGOTIATIONS HAD NOT BEEN COMPLETED WITH EITHER OFFEROR AT THE TIME OF YOUR CONFERENCE. SEE, IN THIS CONNECTION, ASPR 3-805.1 (A) WHICH REQUIRES DISCUSSIONS WITH ALL RESPONSIBLE OFFERORS WHO SUBMIT PROPOSALS WITHIN A COMPETITIVE RANGE, AND ASPR 3-804, PROVIDING IN PART:

"COMPLETE AGREEMENT OF THE PARTIES ON ALL BASIC ISSUES SHALL BE THE OBJECTIVE OF THE CONTRACT NEGOTIATIONS. ORAL DISCUSSIONS OR WRITTEN COMMUNICATIONS SHALL BE CONDUCTED WITH OFFERORS TO THE EXTENT NECESSARY TO RESOLVE UNCERTAINTIES RELATING TO THE PURCHASE OR THE PRICE TO BE PAID. BASIC QUESTIONS SHOULD NOT BE LEFT FOR LATER AGREEMENT DURING PRICE REVISIONS OR OTHER SUPPLEMENTAL PROCEEDINGS.'

CONCERNING YOUR ADDITIONAL CONTENTIONS, ASPR 3-805.1 (B), WHICH WAS CITED IN YOUR PROTEST, STATES:

"/B) WHENEVER NEGOTIATIONS ARE CONDUCTED WITH MORE THAN ONE OFFEROR, AUCTION TECHNIQUES ARE STRICTLY PROHIBITED; AN EXAMPLE WOULD BE INDICATING TO AN OFFEROR A PRICE WHICH MUST BE MET TO OBTAIN FURTHER CONSIDERATION, OR INFORMING HIM THAT HIS PRICE IS NOT LOW IN RELATION TO THAT OF ANOTHER OFFEROR. ON THE OTHER HAND, IT IS PERMISSIBLE TO INFORM AN OFFEROR THAT HIS PRICE IS CONSIDERED BY THE GOVERNMENT TO BE TOO HIGH. AFTER RECEIPT OF PROPOSALS, NO INFORMATION REGARDING THE NUMBER OR IDENTITY OF THE OFFERORS PARTICIPATING IN THE NEGOTIATIONS SHALL BE MADE AVAILABLE TO THE PUBLIC OR TO ANY ONE WHOSE OFFICIAL DUTIES DO NOT REQUIRE SUCH KNOWLEDGE. WHENEVER NEGOTIATIONS ARE CONDUCTED WITH SEVERAL OFFERORS, WHILE SUCH NEGOTIATIONS MAY BE CONDUCTED SUCCESSIVELY, ALL OFFERORS SELECTED TO PARTICIPATE IN SUCH NEGOTIATIONS (SEE (A) ABOVE) SHALL BE OFFERED AN EQUITABLE OPPORTUNITY TO SUBMIT SUCH PRICE, TECHNICAL, OR OTHER REVISIONS IN THEIR PROPOSALS AS MAY RESULT FROM THE NEGOTIATIONS. ALL SUCH OFFERORS SHALL BE INFORMED OF THE SPECIFIED DATE (AND TIME IF DESIRED) OF THE CLOSING OF NEGOTIATIONS AND THAT ANY REVISIONS TO THEIR PROPOSALS MUST BE SUBMITTED BY THAT DATE. ALL SUCH OFFERORS SHALL BE INFORMED THAT ANY REVISION RECEIVED AFTER SUCH DATE SHALL BE TREATED AS A LATE PROPOSAL IN ACCORDANCE WITH THE "LATE PROPOSALS" PROVISIONS OF THE REQUEST FOR PROPOSALS. (IN THE EXCEPTIONAL CIRCUMSTANCES WHERE THE SECRETARY CONCERNED AUTHORIZES CONSIDERATION OF SUCH A LATE PROPOSAL, RESOLICITATION SHALL BE LIMITED TO THE SELECTED OFFERORS WITH WHOM NEGOTIATIONS HAVE BEEN CONDUCTED.) IN ADDITION, ALL SUCH OFFERORS SHALL ALSO BE INFORMED THAT AFTER THE SPECIFIED DATE FOR THE CLOSING OR NEGOTIATION NO INFORMATION OTHER THAN NOTICE OF UNACCEPTABILITY OF PROPOSAL, IF APPLICABLE (SEE 3- 508), WILL BE FURNISHED TO ANY OFFEROR UNTIL AWARD HAS BEEN MADE.'

UNDER THE ABOVE PROVISION CONTRACTING OFFICERS ARE DIRECTED TO ADVISE ALL OFFERORS OF A CLOSING DATE FOR NEGOTIATIONS. YOU CONTEND THAT JANUARY 25, 1967, WAS ESTABLISHED AS SUCH DATE AND THAT YOU WERE SO ADVISED AT THE JANUARY 20 CONFERENCE, WHEREAS THE CONTRACTING OFFICER'S REPORT STATES THAT "THE REQUEST MADE TO ATC AT THE MEETING HELD ON 20 JANUARY WAS FOR THE PURPOSE OF EXPEDITING THE PROGRESS OF NEGOTIATIONS AND THE DATE MENTIONED WAS NOT INTENDED AS A CUT OFF DATE.' IN RESPONSE TO OUR INQUIRY THE CONTRACTING OFFICER HAS FURTHER REPORTED:

"IT WAS NECESSARY TO CHANGE THE TYPE OF CONTRACT TO A FIRM FIXED TYPE IN ORDER TO PUT BOTH PARTIES ON AN EQUAL FOOTING AND TO PERMIT A PROPER EVALUATION AND ANALYSIS TO BE MADE OF THE PROPOSALS TO BE SUBMITTED BY THESE TWO COMPANIES. THIS WAS ACCOMPLISHED AT THE MEETINGS HELD WITH EACH COMPANY ON 18 AND 20 JANUARY 1967 RESPECTIVELY WHEN THE GOVERNMENT'S REQUIREMENTS WERE ESTABLISHED AND MADE KNOWN TO THE REPRESENTATIVES OF EACH COMPANY. NO CUT OFF DATE WAS SET FOR SUBMISSION OF FINAL PROPOSALS AS IT WAS EXPECTED THAT THE PROPOSALS TO BE SUBMITTED WOULD REQUIRE REVISION BECAUSE OF THE CHANGED CONDITIONS AND THE GOVERNMENT DID NOT WANT TO PRECLUDE ITSELF FROM CONDUCTING FURTHER NEGOTIATIONS WHICH WOULD BE MOST ADVANTAGEOUS TO THE GOVERNMENT.'

TO SUPPORT YOUR CONTENTION THAT JANUARY 25 WAS ACTUALLY INTENDED AND UNDERSTOOD TO BE THE CUTOFF DATE FOR SUBMISSION OF FINAL PRICES BY BOTH OFFERORS, YOU REFER TO THE FOLLOWING EXCERPTS CONCERNING THE CONFERENCES OF JANUARY 20 FROM MEMORANDUM OF EVENTS:

"* * * AT THIS POINT, MESSRS. CARCIONE AND PRESTIPINO EXCUSED THEMSELVES FROM THE CONFERENCE ROOM AND UPON RETURN EXPLAINED THEIR ABSENCE WAS TO DETERMINE AT THAT POINT TO ADVISE ATLANTIC TERMINAL COMPANY THAT IT, AND THE ATLANTIC COAST LINE RAILROAD, JACKSONVILLE, FLA., WERE THE TWO BIDDERS FOR SUBJECT SERVICES--- THAT TERMS FOR NEGOTIATIONS WERE THE SAME FOR BOTH SIDES--- THAT INFORMATION BEING FURNISHED IT AT THAT MEETING WAS THE SAME AS FURNISHED ATLANTIC COAST LINE IN MEETING 18 JANUARY 1967--- THAT THE PREVIOUS MULTI-YEAR CONTRACT WOULD BE REDUCED TO A ONE YEAR CONTRACT--- FIXED PRICE--- AND NOT ON PRICE ESCALATION BASIS AS HERETOFORE.

"AT CONCLUSION OF MEETING, ATLANTIC TERMINAL COMPANY WAS AGAIN ADVISED OF FINAL CUT-OFF DATE OF ALL NEGOTIATIONS 25 JANUARY 1967, WITH REQUEST FROM MR. CARCIONE THAT FINAL COST FIGURES BE TELEPHONED TO MR. RESNICK, NO LATER THAN THAT DATE, WITH WRITTEN CONFIRMATION TO FOLLOW IN THE MAIL, DUE TO TIME ELEMENT INVOLVED.' YOU ALSO REFER TO THE PROVISIONS IN THE GOVERNMENT'S MEMORANDUM OF THE CONFERENCE WHICH STATE:

"MR. FUNDERBURG INQUIRED WHEN WE WILL BE IN A POSITION TO MAKE A FINAL DETERMINATION OF CONTRACT AWARD. HE WAS ADVISED BY MR. CARCIONE THAT A DECISION IS EXPECTED TO BE MADE BY THE END OF NEXT WEEK.

"* * * HE (MR. FUNDERBURG) WAS ADVISED THAT HIS PRICES MUST BE FIRM AND SHOULD INCLUDE ALL HIS COSTS. HE WAS TOLD TO SUBMIT HIS REPLY BY WEDNESDAY, 25 JANUARY. IF WE DO NOT HEAR FROM HIM BY SUCH DATE, WE WILL ASSUME THAT THE PRICES SUBMITTED ARE FIRM. IN CASE OF CHANGES, FINAL PRICES WILL BE CALLED IN BY MR. FUNDERBURG AND CONFIRMED IN WRITING.' THE RECORD SHOWS THAT ON JANUARY 24, 1967, YOU VERBALLY FURNISHED YOUR FINAL PRICES WHICH WERE CONFIRMED BY LETTER OF THAT DATE.

ALTHOUGH THE CONTRACTING OFFICER STATES THAT HE HAD NO INTENTION OF ESTABLISHING JANUARY 25, OR ANY OTHER DATE, AS A FINAL CUTOFF DATE, WE CAN READILY SEE FROM THE ABOVE REPORTS OF THE JANUARY 20 CONFERENCE HOW YOU COULD BELIEVE AT THAT TIME THAT THE CONTRACTING OFFICER HAD INTENDED TO ESTABLISH A CUTOFF DATE FOR NEGOTIATIONS IN COMPLIANCE WITH ASPR 3-805.1 (B), AND THAT SUCH DATE WAS JANUARY 25. IT APPEARS, HOWEVER, THAT THERE WAS NO REASONABLE BASIS FOR YOU TO CONTINUE IN THE FIRM BELIEF THAT NEGOTIATIONS HAD CEASED AFTER YOU WERE PLACED ON NOTICE BY THE CONTRACTING OFFICER'S CALL TO YOU ON JANUARY 31 (DURING WHICH BASIC PRICES SET FORTH IN YOUR PROPOSAL, AND FACTORS INVOLVED IN THEIR COMPOSITION, WERE DISCUSSED) THAT HE MIGHT STILL BE WILLING TO CONDUCT DISCUSSIONS OF YOUR PROPOSALS, AND, THEREFORE, PRESUMABLY OF ACL'S PROPOSAL AS WELL. BELIEVE THAT SUCH ACTION BY THE CONTRACTING OFFICER SHOULD HAVE BEEN, AT LEAST, SUFFICIENT TO CREATE SUBSTANTIAL DOUBT AS TO THE CORRECTNESS OF YOUR BELIEF THAT JANUARY 25 HAD BEEN INTENDED TO BE THE CUTOFF DATE FOR NEGOTIATIONS. FURTHER, A SIMILAR UNDERSTANDING BY ACL AS TO A JANUARY 25 CUTOFF DATE FOR RECEIPT OF FINAL PRICES CANNOT BE DRAWN FROM THE RECORD. THE MEMORANDUM OF THE PRELIMINARY NEGOTIATION CONFERENCE HELD WITH ACL ON JANUARY 18, 1967, DOES NOT MENTION THE JANUARY 25 DATE OR INDICATE THE ESTABLISHMENT OF A SPECIFIC CUTOFF DATE FOR NEGOTIATIONS BUT STATES INSTEAD IN SUCH RESPECT:

"MR. WELDON (ACL REPRESENTATIVE) STATED THAT HIS COMPANY WOULD HAVE NO OBJECTION IF IT WAS NECESSARY FOR THE GOVERNMENT TO HAVE AN EXTENSION OF THE PRESENT CONTRACT FOR AN ADDITIONAL MONTH. HIS COMPANY WILL NEED AT LEAST A WEEK TO SUBMIT THE NEW RATES. THE RECORD SHOWS THAT ACL'S NEW PRICES WERE RECEIVED BY THE CONTRACTING OFFICER ON JANUARY 27, AND BECAUSE OF UNCERTAINTIES IN CONNECTION THEREWITH THE CONTRACTING OFFICER CONTACTED ACL ON JANUARY 30, 1967, AND FURTHER NEGOTIATIONS WERE HELD WITH THAT FIRM ON FEBRUARY 3, 1967. THE FIRST INDICATION IN THE RECORD OF AN UNDERSTANDING AS TO THE COMPLETION OF NEGOTIATIONS WITH ACL AND A FINAL DATE FOR ITS PRICE IS SET FORTH AS FOLLOWS IN THE MEMORANDUM OF THE FEBRUARY 3 NEGOTIATIONS: "THE ACL REPRESENTATIVE ADVISED THEY WILL FURNISH A FINAL OFFER ON 6 FEBRUARY 1967.' THE ACL FINAL PRICES WERE FURNISHED BY TELEPHONE ON FEBRUARY 6 AND CONFIRMED BY LETTER OF THAT DATE. AN EVALUATION OF THE FINAL PROPOSALS SUBMITTED BY YOU AND ACL WAS MADE ON FEBRUARY 7, 1967, AND THE ACL PROPOSAL WAS DETERMINED TO BE LOW. AWARD WAS THEREAFTER MADE TO ACL UPON ADMINISTRATIVE APPROVAL OF THE USE OF THE INDEMNIFICATION CLAUSE IN THE CONTRACT.

SINCE IT DOES NOT APPEAR THAT THE CONTRACTING OFFICER ESTABLISHED A CLOSING DATE FOR REVISIONS OF PROPOSALS AND ADVISED BOTH YOU AND ACL OF SUCH SPECIFIED DATE IN ACCORDANCE WITH ASPR 3-805.1 (B), THE QUESTION FOR RESOLUTION IS WHETHER UNDER THE PARTICULAR CIRCUMSTANCES INVOLVED SUCH NONCOMPLIANCE WITH THAT PROVISION PRECLUDED THE AWARDING OF A VALID CONTRACT ON THE FINAL PROPOSALS.

WE DO NOT BELIEVE THAT THE CONTRACTING OFFICER'S OMISSION PRODUCED SUCH A LEGAL CONSEQUENCE IN THIS CASE. WHILE OFFERORS MUST BE AFFORDED A REASONABLE OPPORTUNITY TO REVISE THEIR PROPOSALS AFTER NEGOTIATIONS,THERE COMES A TIME IN A NEGOTIATED PROCUREMENT WHEN NEGOTIATIONS MUST CEASE, PROPOSALS EVALUATED AND AWARD MADE IN ORDER TO MEET DELIVERY OR PERFORMANCE REQUIREMENTS. THE DESIGNATION OF AN EQUITABLE CLOSING DATE FOR SUBMISSION OF FINAL PRICES SERVES SUCH PURPOSE AND HELPS TO INSURE AGAINST CHARGES OF FAVORITISM. THE MAIN OBJECTIVE OF CONTRACT NEGOTIATIONS, HOWEVER, IS THE COMPLETE AGREEMENT OF THE PARTIES ON ALL BASIC ISSUES, BY RESOLVING UNCERTAINTIES RELATING TO THE PURCHASE OR THE PRICE TO BE PAID. SEE ASPR 3-804. ALTHOUGH MORE DISCUSSIONS WERE REQUIRED WITH ACL THAN WITH YOUR FIRM, THE RECORD SHOWS THAT THE OBJECTIVE OF THE NEGOTIATIONS WAS ACCOMPLISHED BY OBTAINING PROPOSALS FROM YOU AND ACL THAT WERE UNIFORM WITH RESPECT TO ALL BASIC SERVICES TO BE FURNISHED AND CONTAINED EACH FIRM'S FINAL PRICE FOR SUCH SERVICES. WHILE YOUR FINAL PRICES WERE RECEIVED ON JANUARY 24 AND ACL SUBMITTED ITS FINAL PRICES ON FEBRUARY 6, THE RECORD CONTAINS NO EVIDENCE WHATSOEVER OF YOUR PRICES HAVING BEEN DISCLOSED TO ACL OR THAT AUCTION TECHNIQUES WERE USED IN THE NEGOTIATIONS CONDUCTED WITH THAT FIRM. FURTHER, ALTHOUGH YOU WERE CONTACTED BY THE CONTRACTING OFFICER ON JANUARY 31 CONCERNING YOUR PRICES, YOU EXPRESSED NO DESIRE TO REVISE YOUR PRICES DOWNWARD, NOR DOES THE RECORD INDICATE THAT YOU WOULD HAVE ADJUSTED YOUR PRICES HAD THE CONTRACTING OFFICER ESTABLISHED FEBRUARY 6 AS THE CLOSING DATE FOR PRICE REVISIONS IN ACCORDANCE WITH ASPR 3-805.1 (B), AND SO ADVISED YOU ON FEBRUARY 3. WE CANNOT CONCLUDE THEREFORE THAT YOU WERE PREJUDICED BY THE CONTRACTING OFFICER'S FAILURE TO ESTABLISH A CUT OFF DATE AS REQUIRED BY THE REGULATION, OR THAT SUCH FAILURE RESULTED IN THE GOVERNMENT NOT OBTAINING THE LOWEST PRICES WHICH EACH OFFEROR WISHED TO SUBMIT FOR EVALUATION.

REGARDING YOUR CONTENTION THAT BY DELAYING UNTIL MARCH 2 TO NOTIFY YOU THAT YOU WERE NOT THE LOW OFFEROR THE CONTRACTING OFFICER CLOSED OUT YOUR OPPORTUNITY TO MAKE A PROTEST BEFORE AWARD, THE REGULATIONS DO NOT CONTEMPLATE THE DISCLOSURE OF SUCH INFORMATION UNTIL AFTER AWARD OF THE CONTRACT. SEE THE LAST SENTENCE OF ASPR 3-805.1 (B).

ACTION BY THIS OFFICE TO DIRECT CANCELLATION OF THE CONTRACT AWARDED TO ACL MAY BE TAKEN ONLY UPON THE LEGAL PREMISE THAT ACCEPTANCE OF THAT FIRM'S PROPOSAL DID NOT RESULT IN A VALID CONTRACT. AS INDICATED ABOVE WE DO NOT BELIEVE THAT THE ADMINISTRATIVE IMPROPRIETIES HAD ANY MATERIAL EFFECT WITH RESPECT TO THE OFFEROR'S FINAL PRICES OR THE AWARDING OF THE CONTRACT. NEITHER ARE WE CONVINCED THAT A COURT WOULD FIND THE AWARD SO INCOMPATIBLE WITH THE BASIC STATUTES OR THOSE FUNDAMENTAL REQUIREMENTS OF THE REGULATIONS AS TO DECLARE THE CONTRACT A NULLITY. IN SUCH CIRCUMSTANCES, CANCELLATION WOULD, IN OUR OPINION, AMOUNT TO A BREACH OF THE CONTRACT AND SUBJECT THE GOVERNMENT TO LIABILITY FOR DAMAGES.

IN VIEW OF THE FOREGOING, WE CANNOT CONCLUDE THAT CANCELLATION OF THE CONTRACT AWARDED TO ACL WOULD BE JUSTIFIED, AND YOUR PROTEST MUST BE DENIED. HOWEVER, WE ARE CALLING THIS MATTER TO THE ATTENTION OF THE SECRETARY OF THE ARMY TO INSURE, IN THE EVENT THAT FUTURE CONTRACTS FOR SUCH SERVICES ARE ALSO NEGOTIATED, THAT SUCH NEGOTIATIONS ARE CONDUCTED IN CONFORMITY WITH THE PERTINENT REGULATIONS.

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