B-160324, FEB. 16, 1967

B-160324: Feb 16, 1967

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO REPORTS DATED NOVEMBER 22 AND DECEMBER 8. ITS PROPOSALS WERE DETERMINED TO BE SUBSTANTIVELY DEFICIENT AND THAT "FURTHER DISCUSSION OR INFORMATION WILL NOT MAKE YOUR PROPOSALS ACCEPTABLE. NO REVISIONS WILL BE CONSIDERED.'. WAS ALSO REJECTED. WE HAVE BEEN INFORMALLY ADVISED THAT LAVOIE INSTRUMENTS INC. WILL NOT PARTICIPATE IN STEP TWO. IT WAS DETERMINED BY THE CONTRACTING OFFICER THAT WHILE SINGER HAD NOT REFUTED THE SPECIFIC REASONS FOR REJECTION OF ITS TECHNICAL PROPOSAL. WAS ESTABLISHED AS THE DUE DATE FOR THE RECEIPT OF SUPPLEMENTAL INFORMATION. THE OPENING DATE FOR THE SECOND STEP WAS EXTENDED TO OCTOBER 12. THIS SECOND SUBMISSION WAS TECHNICALLY EVALUATED BY THE GOVERNMENT AND DETERMINED TO BE IN CONFORMITY WITH THE SOLICITATION.

B-160324, FEB. 16, 1967

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO REPORTS DATED NOVEMBER 22 AND DECEMBER 8, 1966, AND JANUARY 26, 1967, RELATIVE TO THE PROTEST OF THE SINGER COMPANY, METRICS DIVISION, UNDER INVITATION FOR BIDS (IFB) NO. 600-1075-66, A TWO-STEP FORMALLY ADVERTISED SOLICITATION ISSUED BY THE NAVY PURCHASING OFFICE (NPO) FOR THE PROCUREMENT OF 37 MICROWAVE SPECTRUM ANALYZERS.

AS THE FIRST STEP IN THE PROCUREMENT, NPO ISSUED A REQUEST LETTER DATED MARCH 15, 1966, SOLICITING UNPRICED TECHNICAL PROPOSALS ON THE SPECTRUM ANALYZERS IN ACCORDANCE WITH ENCLOSURE 1, REQUIREMENTS AND CRITERIA FOR TECHNICAL PROPOSAL P.R. 63133-6000-0197, AND ENCLOSURE 2, PURCHASE DESCRIPTION, SER 1481-15 (CEH), NAVSEEC, DECEMBER 9, 1965 (REVISED: JANUARY 19, 1966). PRIOR TO THE ORIGINAL APRIL 29, 1966, CLOSING DATE FOR SUBMISSION OF THE TECHNICAL PROPOSALS, SINGER REQUESTED A CLARIFICATION OF THE TECHNICAL REQUIREMENTS IN THE PURCHASE DESCRIPTION. AFTER A TECHNICAL CONFERENCE WITH NPO REPRESENTATIVES, SINGER BY TELEGRAM OF APRIL 20, 1966, INDICATED THAT THE DISCREPANCIES ENCOUNTERED IN THE SPECIFICATIONS HAD BEEN SUFFICIENTLY CLARIFIED TO PERMIT THE PREPARATION OF ITS PROPOSAL, AND REQUESTED ADDITIONAL TIME TO COMPLY WITH THE REQUIREMENTS. ACCEDING IN THIS REQUEST, NPO BY AMENDMENT NO. 1 TO THE IFB (STEP 1) EXTENDED THE CLOSING DATE TO MAY 9, 1966. AMENDMENT NO. 2, DATED MAY 5, 1966, FURTHER EXTENDED THE DUE DATE TO MAY 20, 1966. ON MAY 13, 1966, NPO ISSUED AMENDMENT NO. 3, WHICH AFFECTED THREE CHANGES IN THE TECHNICAL REQUIREMENTS AND AUTHORIZED A FINAL EXTENSION OF THE DATE FOR RECEIPT OF THE TECHNICAL PROPOSALS TO MAY 27, 1966.

FIVE SOURCES RESPONDED TO THE FIRST-STEP SOLICITATION: POLARAD ELECTRONICS CORPORATION; LAVOIE LABORATORIES, INC.; AUL INSTRUMENTS, INC.; TEKTRONIX, INC.; AND THE SINGER COMPANY. BY LETTER DATED AUGUST 31, 1966, THE CONTRACTING OFFICER INFORMED SINGER THAT, AFTER TECHNICAL REVIEW, ITS PROPOSALS WERE DETERMINED TO BE SUBSTANTIVELY DEFICIENT AND THAT "FURTHER DISCUSSION OR INFORMATION WILL NOT MAKE YOUR PROPOSALS ACCEPTABLE, THEREFORE, NO REVISIONS WILL BE CONSIDERED.' THE TECHNICAL PROPOSAL OF TEKTRONIX, INC., WAS ALSO REJECTED; AND WE HAVE BEEN INFORMALLY ADVISED THAT LAVOIE INSTRUMENTS INC., THOUGH QUALIFIED, WILL NOT PARTICIPATE IN STEP TWO.

ON SEPTEMBER 22, 1966, SINGER COMPANY PERSONNEL, AT THEIR REQUEST, MET WITH GOVERNMENT PURCHASING AND ENGINEERING PERSONNEL TO DISCUSS THE REASONS FOR THE REJECTION OF THEIR PROPOSAL. AS A RESULT OF THIS CONFERENCE, IT WAS DETERMINED BY THE CONTRACTING OFFICER THAT WHILE SINGER HAD NOT REFUTED THE SPECIFIC REASONS FOR REJECTION OF ITS TECHNICAL PROPOSAL, IT WOULD BE IN THE GOVERNMENT'S BEST INTEREST TO AFFORD THE PROTESTANT AN OPPORTUNITY TO "CLARIFY AND SUPPLEMENT ITS ORIGINAL TIMELY PROPOSAL.' TO THIS END, SEPTEMBER 30, 1966, WAS ESTABLISHED AS THE DUE DATE FOR THE RECEIPT OF SUPPLEMENTAL INFORMATION, AND THE OPENING DATE FOR THE SECOND STEP WAS EXTENDED TO OCTOBER 12, 1966. BY LETTER DATED SEPTEMBER 29, 1966, THE SINGER COMPANY SUBMITTED ADDENDUM 1 TO ITS ORIGINAL PROPOSAL. IN THIS REGARD, PROTESTANT ADVISES THAT "AT THIS 22 SEPTEMBER MEETING, SINGER DESCRIBED IN COMPLETE PHYSICAL AND ELECTRICAL DETAIL, THE SMALLER AND LIGHTER ANALYZER OFFERED IN THE 29 SEPTEMBER AMENDED PROPOSAL.' THIS SECOND SUBMISSION WAS TECHNICALLY EVALUATED BY THE GOVERNMENT AND DETERMINED TO BE IN CONFORMITY WITH THE SOLICITATION. HOWEVER, THE CONTRACTING OFFICER DETERMINED THAT SINGER'S ADDENDUM CONSTITUTED A NEW BASIC TECHNICAL APPROACH WHICH WAS COMPLETELY DIFFERENT FROM ITS ORIGINAL PROPOSAL. THEREFORE, THE CONTRACTING OFFICER DETERMINED THAT SINGER'S SEPTEMBER 29 ADDENDUM HAD TO BE TREATED AS A LATE PROPOSAL AND REJECTED IN ACCORDANCE WITH THE "LATE PROPOSALS" CLAUSE OF THE IFB (ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-503.1 (A (VI) ).

THE ADMINISTRATIVE REPORT SUPPORTED THIS DETERMINATION AS FOLLOWS:

"B. THE SECOND SUBMISSION OFFERED TRANSISTORIZED EQUIPMENT WHICH DID MEET THE REQUIREMENTS. TRANSISTORIZED EQUIPMENT REQUIRES LESS POWER TO OPERATE, AND, COLLATERALLY, IS SMALLER AND LIGHTER. EQUIPMENT RELIABILITY AND STABILITY IS INCREASED AS A RESULT OF USING TRANSISTORS. THE USE OF TRANSISTORS DICTATES RE-DESIGN OF THE CIRCUITRY TO HANDLETHE VOLTAGE AND CURRENT REQUIREMENTS. THE POWER SUPPLY, A MAJOR COMPONENT, ALSO REQUIRED RE-DESIGN. IN ADDITION, RE DESIGN TO PREVENT LOSS OF SENSITIVITY, FREQUENCY DISPERSION, AND RESOLUTION WAS NECESSARY.

"IN SUMMARY, THE CHANGE FROM VACUUM TUBE TO SOLID STATE REQUIRED MAJOR CHANGES IN THE CIRCUITRY, AND COMPONENTS OF THE EQUIPMENT ORIGINALLY OFFERED. THE SECOND SUBMISSION WAS BASICALLY A NEW DESIGN. THEREFORE, THE TECHNICAL CONCLUSION WAS INACCEPTABLE THAT THE SECOND SUBMISSION CONSTITUTED A BASIC CHANGE IN TECHNICAL APPROACH.'

ON OCTOBER 11, 1966, SINGER COMPANY PERSONNEL MET WITH NPO REPRESENTATIVES AND WERE INFORMED THAT THEY WOULD NOT BE ABLE TO PARTICIPATE IN STEP 2. AT THIS TIME, THE PROTESTANT AGAIN ALLEGED THAT THE PURCHASE DESCRIPTION CONTAINED SEVERAL INCONSISTENCIES. THESE INCONSISTENCIES WERE DESCRIBED IN A SUBSEQUENT LETTER DATED OCTOBER 13, 1966. AFTER EXAMINATION OF THIS SUBMISSION, NAVY TECHNICAL PERSONNEL DETERMINED THAT THERE WERE NO TECHNICAL INCONSISTENCIES AND THAT THE PURCHASE DESCRIPTION WAS ADEQUATE FOR TWO-STEP FORMAL ADVERTISING.

THE OPENING DATE FOR STEP 2 HAS BEEN EXTENDED PENDING RESOLUTION OF SINGER'S PROTEST TO THIS OFFICE. INITIALLY, THE PROTESTANT RENEWED ITS ALLEGATIONS OF INCONSISTENCIES IN THE PURCHASE DESCRIPTION. SPECIFICALLY, SINGER CONTENDS THAT THE THREE PROPOSALS ACCEPTED BY THE NAVY WERE TECHNICALLY NOT RESPONSIVE IN THAT THEY DID NOT OFFER "OFF THE-SHELF COMMERCIALLY AVAILABLE EQUIPMENTS WITH PROVEN RELIABILITY AND MAINTAINABILITY * * * WITH SUCH MINOR MODIFICATIONS AS ARE REQUIRED TO MEET THE REQUIREMENTS" AS REQUIRED BY PARAGRAPH 3-1 OF THE PURCHASE DESCRIPTION.

THE QUESTIONS PRESENTED INVOLVE COMPLICATED TECHNICAL EVALUATIONS. THE RECORD CLEARLY INDICATES THAT SINGER'S ALLEGATIONS OF INCONSISTENCY IN THE SPECIFICATIONS HAVE BEEN EXAMINED AND REJECTED BY COMPETENT TECHNICAL PERSONNEL OF THE NAVY. FURTHER, WITH PARTICULAR REFERENCE TO THE TECHNICAL EVALUATION, WE WERE ADVISED:

"IT IS CONFIRMED THE TECHNICAL EVALUATORS DID CONSIDER THE PROPOSALS WITH RESPECT TO THE REQUIREMENTS OF THE PURCHASE DESCRIPTION SERIAL 1481-15 (CEH) NAVSEEC DATED 9 DECEMBER 1965 (REVISED 19 JANUARY 1966) AND THE TECHNICAL CODE MADE A TECHNICAL JUDGMENT THAT THE PROPOSALS WHICH WERE ACCEPTED UNDER STEP 1 OFFERED BASICALLY COMMERCIAL AVAILABLE EQUIPMENT. IT WAS FURTHER CONSIDERED THAT THE EQUIPMENT PROPOSED WAS SO DESCRIBED IN TERMS WITH RESPECT TO THE PURCHASE DESCRIPTION THAT NAVELEX TECHNICAL EVALUATORS WERE SATISFIED THAT THE EQUIPMENT OFFERED WOULD MEET THE REQUIREMENTS OF PROVEN RELIABILITY AND MAINTAINABILITY.'

FOR OUR OFFICE TO DETERMINE ANEW THE QUESTION OF WHETHER SINGER'S ORIGINAL TECHNICAL PROPOSAL MET THE STANDARD ESTABLISHED IN THE PURCHASE DESCRIPTION WOULD, OF NECESSITY, DEMAND AN ENGINEERING EXPERTISE WHICH THIS OFFICE DOES NOT POSSESS. THEREFORE, AS IT DOES NOT APPEAR FROM THE RECORD BEFORE US THAT THE ADMINISTRATIVE ACTION WAS ARBITRARY OR CAPRICIOUS, WE WILL NOT SUBSTITUTE OUR JUDGMENT FOR THAT OF THE CONTRACTING AGENCY. FURTHERMORE, WITH RESPECT TO THE RESPONSIVENESS OF PROPOSALS, IT IS AN ESTABLISHED RULE THAT THE FACTUAL DETERMINATION OF COMPLIANCE WITH THE GOVERNMENT'S SPECIFICATIONS IS THE PRIMARY RESPONSIBILITY OF THE PROCURING AGENCY. 17 COMP. GEN. 554; 19 ID. 587 AND 40 ID. 35.

SINGER NEXT CONTENDS THAT THE REJECTION OF ITS TECHNICALLY ACCEPTABLE ADDENDUM AS A LATE PROPOSAL IS IMPROPER AND UNFAIR UNDER THE CIRCUMSTANCES PRESENTED. SINGER FURTHER ALLEGES THAT IT INITIALLY WITHHELD AN OFFER OF ITS PROTOTYPE TRANSISTORIZED ANALYZER BECAUSE THE PURCHASE DESCRIPTION CALLED FOR UNITS OF "PROVEN RELIABILITY AND MAINTAINABILITY" WHICH WERE "OFF-THE-SHELF COMMERCIALLY AVAILABLE EQUIPMENTS" AND THAT SINGER DID NOT SUPPLEMENT ITS ORIGINAL PROPOSAL BECAUSE IT WAS NOT CONTRACTED BY THE NAVY PRIOR TO REJECTION. IN THIS REGARD, WE HAVE BEEN INFORMALLY ADVISED BY NPO THAT THE PURCHASE DESCRIPTION WOULD HAVE PERMITTED PROPOSALS OFFERING TRANSISTORIZED EQUIPMENT, AND THAT BOTH AUL INSTRUMENTS, INC., AND POLARAD ELECTRONICS CORPORATION DID OFFER SUBSTANTIALLY TRANSISTORIZED EQUIPMENT. IN SUPPORT OF ITS REJECTION OF SINGER'S AMENDED PROPOSAL, NPO MAINTAINS:

"* * * TO HAVE PERMITTED SINGER TO SUBMIT A COMPLETELY NEW PROPOSAL ON 29 SEPTEMBER WOULD HAVE ALLOWED THE SINGER CO. SUBSTANTIALLY MORE TIME TO DEVELOP AND TECHNICAL APPROACH, THAN THE OTHER OFFERORS HAD. ACCEPTANCE OF THE LATE PROPOSAL, THEREFOR, WOULD HAVE BEEN PREJUDICIAL TO THE OTHER PARTICIPATING COMPANIES. * * *"

THE FUNDAMENTAL PURPOSE OF THE TWO-STEP PROCUREMENT PROCEDURES IS SET FORTH IN ASPR 2-501 AS FOLLOWS:

"GENERAL. TWO-STEP FORMAL ADVERTISING IS A METHOD OF PROCUREMENT DESIGNED TO EXPAND THE USE AND OBTAIN THE BENEFITS OF FORMAL ADVERTISING WHERE INADEQUATE SPECIFICATIONS PRECLUDE THE USE OF CONVENTIONAL FORMAL ADVERTISING. IT IS ESPECIALLY USEFUL IN PROCUREMENTS REQUIRING TECHNICAL PROPOSALS, ESPECIALLY THOSE FOR COMPLEX ITEMS. * * *"

A PROCEDURE WHICH ATTEMPTS TO EXTEND THE BENEFITS OF THE COMPETITIVE BIDDING SYSTEM TO COMPLICATED AND HIGHLY TECHNICAL PROCUREMENTS NECESSARILY REQUIRES CLOSE COORDINATION BETWEEN THE CONTRACTING OFFICER AND THE TECHNICAL PERSONNEL OF THE PROCURING AGENCY IN IMPLEMENTING THE GUIDELINES CONTAINED IN ASPR 2-503.1, ET SEQ. MOREOVER, IN ORDER TO ACHIEVE THE GOAL OF MAXIMIZED COMPETITION, IT IS EQUALLY CLEAR THAT THE GOVERNMENT'S BEST INTEREST REQUIRES THAT AS MANY TECHNICALLY ACCEPTABLE PROPOSALS AS POSSIBLE BE OBTAINED EVEN TO THE EXTENT OF PERMITTING CORRECTION OF TECHNICALLY DEFICIENT PROPOSALS AFTER THE DUE DATE SET FOR TECHNICAL RESPONSES TO THE FIRST STEP. SEE, IN THIS REGARD, ASPR 3-506 WHICH RECOGNIZES EXCEPTIONS TO THE "LATE PROPOSALS" CLAUSE. IN THIS RESPECT, ASPR 2-503.1 (E) PROVIDES AS FOLLOWS:

"/E) TECHNICAL EVALUATION OF THE PROPOSALS SHALL BE BASED UPON THE CRITERIA CONTAINED IN THE REQUEST FOR TECHNICAL PROPOSALS AND SUCH EVALUATION SHALL NOT INCLUDE CONSIDERATION OF CAPACITY OR CREDIT AS DEFINED IN 1-705.4. THE PROPOSALS AS SUBMITTED, SHALL BE CATEGORIZED AS:

(I) ACCEPTABLE;

(II) REASONABLY SUSCEPTIBLE OF BEING MADE ACCEPTABLE BY ADDITIONAL INFORMATION CLARIFYING OR SUPPLEMENTING, BUT NOT BASICALLY CHANGING THE PROPOSAL AS SUBMITTED; OR

(III) IN ALL OTHER CASES, UNACCEPTABLE.

ANY PROPOSAL WHICH MODIFIES, OR FAILS TO CONFORM TO THE ESSENTIAL REQUIREMENTS OR SPECIFICATIONS OF, THE REQUEST FOR TECHNICAL PROPOSALS SHALL BE CONSIDERED NONRESPONSIVE AND CATEGORIZED AS UNACCEPTABLE. IF THE CONTRACTING OFFICER DETERMINES THAT THERE ARE SUFFICIENT PROPOSALS IN CATEGORY (I) ABOVE TO ASSURE ADEQUATE PRICE COMPETITION UNDER STEP TWO AND THAT FURTHER TIME, EFFORT AND DELAY TO MAKE ADDITIONAL PROPOSALS ACCEPTABLE AND THEREBY INCREASE COMPETITION WOULD NOT BE IN THE BEST INTEREST OF THE GOVERNMENT, HE MAY PROCEED DIRECTLY WITH STEP TWO. OTHERWISE, THE CONTRACTING OFFICER SHALL REQUEST BIDDERS UNDER PROPOSALS IN CATEGORY (II) ABOVE TO SUBMIT ADDITIONAL INFORMATION, SETTING FORTH TO THE EXTENT PRACTICABLE THE NATURE OF THE DEFICIENCIES IN THE PROPOSAL AS SUBMITTED OR THE NATURE OF THE ADDITIONAL INFORMATION REQUIRED. THE CONTRACTING OFFICER MAY ALSO ARRANGE DISCUSSION FOR THIS PURPOSE. INITIATING REQUESTS FOR ADDITIONAL INFORMATION, THE CONTRACTING OFFICER SHALL FIX AN APPROPRIATE TIME FOR BIDDERS TO CONCLUDE DISCUSSIONS, IF ANY, SUBMIT ALL ADDITIONAL INFORMATION, AND INCORPORATE SUCH ADDITIONAL INFORMATION AS PART OF THEIR PROPOSALS AS SUBMITTED. SUCH TIME MAY BE EXTENDED IN THE DISCRETION OF THE CONTRACTING OFFICER. IF THE ADDITIONAL INFORMATION INCORPORATED AS PART OF A PROPOSAL WITHIN THE FINAL TIME FIXED BY THE CONTRACTING OFFICER ESTABLISHES THAT THE PROPOSAL IS ACCEPTABLE, IT SHALL BE SO CATEGORIZED. OTHERWISE, IT SHALL BE CATEGORIZED AS UNACCEPTABLE.'

TURNING TO THE SUBJECT SOLICITATION, IT DOES NOT APPEAR THAT THE TECHNICAL EVALUATION OF SINGER'S AMENDED PROPOSAL WAS CONSISTENT WITH THE FOREGOING PROVISION. THE CONTRACTING OFFICER'S LETTER OF AUGUST 31 TO SINGER RECITED NUMEROUS TECHNICAL DEFICIENCIES IN SINGER'S ORIGINAL TECHNICAL PROPOSAL AND UNEQUIVOCALLY CONCLUDED THAT NO REVISIONS WOULD BE ACCEPTED. SEE ASPR 2-503.1 (F). THE CONCLUSION THAT SINGER'S ORIGINAL PROPOSAL WAS CONSIDERED TO BE "UNACCEPTABLE" WITHIN THE MEANING OF ASPR 2- 503.1 (E) (III) IS FURTHER SUPPORTED BY NPO'S FAILURE TO CONTACT SINGER DURING THE INTERIM BETWEEN SUBMISSION OF ITS PROPOSAL AND THE CONTRACTING OFFICER'S REJECTION LETTER.

THE PROPRIETY OF THE CONTRACTING OFFICER'S SUBSEQUENT DECISION THAT IT WOULD BE IN THE BEST INTEREST OF THE GOVERNMENT TO ALLOW SINGER TO SUBMIT ITS TRANSISTORIZED EQUIPMENT FOR TECHNICAL EVALUATION CANNOT IN OUR OPINION BE EXPLAINED IN TERMS OF AN OPPORTUNITY TO "CLARIFY AND SUPPLEMENT ITS ORIGINAL TIMELY PROPOSAL.' RATHER, THE CONTRACTING OFFICER'S ACTION CAN ONLY BE JUSTIFIED BY REFERENCE TO THE BROAD LANGUAGE OF THE MARCH 15, 1966, REQUEST LETTER UNDER STEP 1: "THE TECHNICAL PROPOSAL (STEP 1) SHALL SHOW NO PRICES OR PRICING INFORMATION. THEY MUST BE RECEIVED IN THIS OFFICE NO LATER THAN 4:30 P.M., 29 APRIL 1966. HOWEVER, THE GOVERNMENT RESERVES THE RIGHT TO CONSIDER TECHNICAL PROPOSALS OR MODIFICATIONS THEREOF RECEIVED AFTER THE DATE SPECIFIED FOR RECEIPT.

"THIS INVITATION DOES NOT COMMIT THE GOVERNMENT TO PAY ANY COSTS INCURRED IN THE SUBMISSION OF PROPOSALS OR IN MAKING NECESSARY STUDIES OR DESIGNS FOR THE PREPARATION THEREOF; OR TO PROCURE OR CONTRACT FOR THE SERVICES OR MATERIALS.

"THE GOVERNMENT RESERVES THE RIGHT TO DISCUSS THE TECHNICAL ASPECTS OF ANY PROPOSAL WITH THE COMPANY WHO SUBMITTED IT, PRIOR TO INITIATION OF STEP 2 OF THIS PROCUREMENT.

"FOLLOWING EVALUATION AND CLASSIFICATION OF THE TECHNICAL PROPOSALS, BIDS WILL BE REQUESTED (STEP 2) FROM ONLY THOSE COMPANIES WHOSE TECHNICAL PROPOSALS HAVE BEEN DETERMINED, EITHER INITIALLY OR AS A RESULT OF DISCUSSIONS, TO BE ACCEPTABLE. EACH BID PRICE MUST BE BASED ON THE BIDDER'S OWN TECHNICAL PROPOSALS. SOURCES THAT SUBMITTED UNACCEPTABLE TECHNICAL PROPOSALS WILL BE SO NOTIFIED AT THAT TIME.'

THE RECORD IS CLEAR THAT THE CONTRACTING OFFICER, WITHOUT REFERENCE TO THE LATE PROPOSALS PROVISIONS OF ASPR 2-503.1 (A) (VI), SOLICITED A FURTHER PROPOSAL FROM SINGER AND AFTER ITS RECEIPT FAVORABLY CONSIDERED SUCH PROPOSAL ON ITS MERITS. HOWEVER, THE PURPOSE OF PLACING A LIMITATION ON THE TIME FOR SUBMITTING PROPOSALS IS PRIMARILY FOR THE GOVERNMENT'S BENEFIT. THE TWO-STEP FORMAL ADVERTISING PROCEDURES WERE PROMULGATED AT THE SUGGESTION AND RECOMMENDATION OF THE SUBCOMMITTEE FOR SPECIAL INVESTIGATIONS OF THE HOUSE ARMED SERVICES COMMITTEE. IN ITS REPORT OF JUNE 15, 1957, THE FOLLOWING APPEARS ON PAGE 660:

"THESE PROBLEMS ARE NOT ALL ATTRIBUTABLE TO THE PROPOSED TWO PHASE METHOD OF FORMAL ADVERTISING. HOWEVER, DUE TO THE INCREASE IN THE NUMBER OF FIRMS THAT WE EXPECT TO PARTICIPATE UNDER THIS NEW METHOD, THESE PROBLEMS ARE EXPECTED TO BE AGGRAVATED.

"PROBLEM 1.--- PROTESTS BY FIRMS WITH NONACCEPTABLE TECHNICAL PROPOSALS BUT NOT GIVEN OPPORTUNITY TO NEGOTIATE INITIALLY OR NOT GIVEN OPPORTUNITY FOR FURTHER NEGOTIATION.

"REASON: THE AIR FORCE RESERVES THE RIGHT TO NEGOTIATE WITH FIRMS SUBMITTING MARGINAL TECHNICAL PROPOSALS. THUS, WHEN WE OBTAIN A SUFFICIENT NUMBER OF ACCEPTABLE TECHNICAL PROPOSALS TO INSURE FULL AND FREE COMPETITION, WE SEE NO BENEFITS TO BE GAINED BY EXPENDING ADDITIONAL AIR FORCE MANPOWER TO PERFORM DEVELOPMENT FOR THOSE FIRMS WHO HAVE SUBMITTED WHOLLY INADEQUATE TECHNICAL PROPOSALS.

"PROBLEM 2.--- PROTESTS FROM FIRMS WHO SUBMIT TECHNICAL PROPOSALS OR REVISIONS TO TECHNICAL PROPOSALS AFTER ESTABLISHED CUTOFF DATES AND SUCH TECHNICAL PROPOSALS AND REVISIONS ARE NOT CONSIDERED BY THE GOVERNMENT.

"REASON: WE WILL ESTABLISH CUTOFF DATES FOR RECEIPT OF TECHNICAL PROPOSALS OR REVISIONS TO TECHNICAL PROPOSALS. THIS WE MUST DO OR WE WILL RUN THE RISK OF GOING ON INDEFINITELY BEFORE WE AWARD THE CONTRACT. OUR NEED FOR EQUIPMENT WILL NOT PERMIT US TO DO SO. AS STATED IN PROBLEM 1 ABOVE, WE RESERVE THE RIGHT TO NEGOTIATE WITH FIRMS SUBMITTING MARGINAL TECHNICAL PROPOSALS. IF WE DO NOT HAVE A SUFFICIENT NUMBER OF ACCEPTABLE TECHNICAL PROPOSALS, IT WILL BE TO OUR BENEFIT TO CONSIDER THE LATE TECHNICAL PROPOSALS OR LATE REVISIONS TO TECHNICAL PROPOSALS IN AN EFFORT TO OBTAIN A SUFFICIENT NUMBER OF ACCEPTABLE TECHNICAL PROPOSALS.'

TAKING INTO CONSIDERATION THE NATURE OF THE FIRST STEP IN A TWO-STEP PROCUREMENT, AND THE PURPOSE OF RESTRICTING THE CONSIDERATION OF TECHNICAL PROPOSALS TO A DEFINITE TIME, INCLUDING TIME FOR RESUBMITTALS AND REEVALUATIONS, WE THINK THAT THE LATER SUMMARY REJECTION OF SINGER'S TECHNICALLY ACCEPTABLE PROPOSAL ON AN OVERLITERAL READING OF THE LATE PROPOSALS PROVISIONS WITHOUT DUE REGARD FOR THE SPIRIT AND PURPOSE OF THE TWO-STEP PROCEDURES WAS IN DEROGATION OF THE GOVERNMENT'S INTEREST IN SECURING MAXIMUM COMPETITION FROM QUALIFIED SOURCES. CF. 45 COMP. GEN. 24. MOREOVER, IT IS OUR OPINION THAT UNDER THESE PARTICULAR CIRCUMSTANCES, NO PREJUDICE TO THE OTHER QUALIFIED SOURCES WOULD NECESSARILY RESULT IF SINGER WERE PERMITTED TO PARTICIPATE IN STEP TWO SINCE THE RECORD DOES NOT INDICATE THAT THE USE OF TRANSISTORIZED EQUIPMENT BY SINGER WOULD PLACE EITHER AUL OR POLARAD AT A DISADVANTAGE IN RESPONDING TO THE SECOND STEP, OR THAT THE DEVELOPMENT OF SINGER'S TECHNICAL APPROACH WAS ATTRIBUTABLE ALONE TO THE CONTRACTING OFFICER'S EXTENSION OF THE TIME FOR THE RECEIPT OF PROPOSALS. IN ARRIVING AT OUR CONCLUSION, WE HAVE CONSIDERED OUR DECISIONS AT 40 COMP. GEN. 35 AND 40 AND WE FIND NOTHING THEREIN WHICH MAY BE REGARDED AS INCONSISTENT WITH OUR HOLDING HERE.

THEREFORE, SINGER SHOULD BE ALLOWED TO PARTICIPATE IN STEP TWO OF THE SOLICITATION UNLESS IT BE ADMINISTRATIVELY DETERMINED THAT IT WOULD BE IN THE GOVERNMENT'S BEST INTEREST TO AFFORD FURTHER OPPORTUNITY TO OTHER QUALIFIED SOURCES TO SUPPLEMENT OR OTHERWISE AMEND THEIR PROPOSALS.

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