B-168770 (2), APR. 30, 1970

B-168770 (2), APR. 30, 1970

CONTRACTS--SPECIFICATIONS--ADEQUACY--COMPLEX PROCUREMENT SECRETARY OF NAVY IS ADVISED THAT IF ADEQUATE SPECIFICATIONS FOR PROCUREMENT OF ROCKET MOTOR TESTING SERVICES CANNOT BE DRAFTED, AND TECHNICAL PROPOSALS ARE ESSENTIAL TO DETERMINE ACCEPTABILITY OF SERVICES OFFERED, USE OF 2 STEP FORMAL ADVERTISING PROCUREMENT METHOD (SEC. II, PART 5, ASPR) SHOULD BE CONSIDERED. IFB PROVISIONS SHOULD CLEARLY INFORM BIDDERS OF OBJECTIVELY DETERMINABLE EVALUATION FACTORS SO THAT BIDDERS MAY REASONABLY ESTIMATE EFFECT OF APPLICATION OF SUCH FACTORS ON THEIR BIDS; AND IN FUTURE SIMILAR PROCUREMENTS CONSIDERATION SHOULD BE GIVEN TO ESTABLISHING REASONABLE ALLOWANCE FOR EACH DAY OF TESTING DELAY NOT ATTRIBUTABLE TO CONTRACTOR. SEE 36 COMP. GEN. 380 (1956).

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 16, 1970, SUP 0232A, FROM THE DEPUTY COMMANDER, PURCHASING, NAVAL SUPPLY SYSTEMS COMMAND, FURNISHING A REPORT ON A PROTEST BY OGDEN TECHNOLOGY LABORATORIES, INC. (OTL), AGAINST THE REJECTION OF ITS BID AS NONRESPONSIVE UNDER INVITATION FOR BIDS (IFB) NO. N00174-70-B-0041, ISSUED BY THE NAVAL ORDNANCE STATION, INDIAN HEAD, MARYLAND.

ENCLOSED IS A COPY OF OUR DECISION OF TODAY TO OTL. ALTHOUGH WE DENIED OTL'S PROTEST, WE BELIEVE THAT SEVERAL ASPECTS OF THE IFB WARRANT COMMENT.

SECTION A OF THE INVITATION INCLUDED A REQUIREMENT FOR A DETAILED TECHNICAL PROPOSAL CONSISTING OF A SCHEDULE FOR COMPLETION OF TESTS ON THE MOTORS; A TEST PROGRAM PLAN RELATING TO EQUIPMENT, PERSONNEL, AND ORDER OF TESTING; AND PLANS FOR RADIOGRAPHIC INSPECTION, SAFETY, AND INSTRUMENT CALIBRATION. SUCH PROPOSAL REQUIRES OF BIDDERS A VERY EXTENSIVE AND COMPREHENSIVE STATEMENT OF THE MANNER IN WHICH THE BIDDER WILL PERFORM THE CONTRACT. WE HAVE SERIOUS RESERVATIONS CONCERNING THE PROPRIETY OF SUCH A COMPLEX REQUIREMENT IN A CONVENTIONAL FORMALLY ADVERTISED PROCUREMENT WITH ITS ATTENDANT RULES REGARDING RESPONSIVENESS OF BIDS, SINCE THE GREATER THE DATA BURDEN PLACED UPON AN OFFEROR BY THE SOLICITATION, THE GREATER THE LIKELIHOOD THE OFFEROR WILL FAIL TO SATISFY THE DATA SUBMISSION REQUIREMENTS. THIS IS PARTICULARLY TRUE WITH REFERENCE TO THE REPEATED USE OF "ETC." IN DESCRIBING THE INFORMATION REQUIRED BY THE GOVERNMENT WHILE BIDDERS ARE SIMULTANEOUSLY CAUTIONED THAT "FAILURE TO PROVIDE ADEQUATE DETAILS ON THE ABOVE AREAS" MAY RESULT IN THE REJECTION OF BIDS AS NONRESPONSIVE.

IT WOULD APPEAR THAT IF ADEQUATE SPECIFICATIONS CAN NOT BE DRAFTED AND TECHNICAL PROPOSALS ARE ESSENTIAL TO DETERMINE THE ACCEPTABILITY OF THE SERVICES OFFERED, THEN CONSIDERATION SHOULD BE GIVEN TO THE USE OF THE TWO STEP FORMAL ADVERTISING METHOD OF PROCUREMENT SET OUT IN SECTION II, PART 5, OF THE ARMED SERVICES PROCUREMENT REGULATION. WE ARE AWARE OF NO OTHER AUTHORITY FOR REQUIRING SUCH A "TECHNICAL PROPOSAL" FROM BIDDERS ON A FORMALLY ADVERTISED PROCUREMENT OF SERVICES, WHERE THE SERVICES CAN BE DESCRIBED IN AS MUCH DETAIL AS WAS INCLUDED IN THE SPECIFICATIONS IN THIS INSTANCE. AS WE READ THE REQUIREMENT IT IS DESIGNED TO ELICIT INFORMATION BEARING UPON A BIDDER'S QUALIFICATIONS OR RESPONSIBILITY, AND IS THUS CONTRARY TO THE TERMS AND INTENT OF ASPR 2-202.5.

THE INVITATION REQUIRED RADIOGRAPHIC (X-RAY) INSPECTION OF THE ROCKET MOTORS AT SPECIFIED TIMES DURING CONTRACT PERFORMANCE, AND THE INSPECTION FACILITIES WERE SUBJECT TO APPROVAL BY THE PROCURING ACTIVITY. IN THIS REGARD, PARAGRAPH 4 OF AMENDMENT NO. 0004, DATED OCTOBER 30, 1969, ADDED THE FOLLOWING STATEMENT TO THE INVITATION:

"* * * TRUCKING DISTANCE FROM THE TEST FACILITY TO THE X-RAY FACILITY WILL BE CONSIDERED AS BIDDER SELECTION CRITERION DUE TO POSSIBLE SAFETY PROBLEMS INVOLVED." THIS PROVISION IS OBJECTIONABLE BECAUSE THE BASIS FOR EVALUATION IS NOT STATED WITH SUFFICIENT CLARITY AND EXACTNESS TO INFORM EACH BIDDER PRIOR TO BID OPENING OF OBJECTIVELY DETERMINABLE FACTORS FROM WHICH THE BIDDER MAY ESTIMATE WITHIN REASONABLE LIMITS THE EFFECT OF THE APPLICATION OF SUCH EVALUATION FACTOR ON HIS BID. 36 COMP. GEN. 380, 385 (1956).

OUR FINAL COMMENT IS DIRECTED TO THE PROVISION IN SECTION E, PART 2, OF THE IFB WHICH COULD REQUIRE THE CONTRACTOR TO LEAVE THE TEST SETUP IN PLACE FOR 30-DAY PERIODS FOLLOWING TEST INCIDENTS WITHOUT COMPENSATION FOR SUCH DELAYS. WHILE IT IS STATED THAT IT WAS ANTICIPATED THAT BIDDERS WOULD EITHER TAKE THEIR CHANCES ON COSTS IN THIS RESPECT OR INCLUDE A CONTINGENCY IN THEIR BID PRICES, THE RECORD DOES NOT ESTABLISH THAT SUCH AN APPROACH IS CONDUCIVE TO OBTAINING A PRICE WHICH IS FAIR AND REASONABLE TO BOTH THE CONTRACTOR AND THE GOVERNMENT. TO REDUCE THE AMOUNT OF SPECULATION AND CONTINGENCY ALLOWANCES REQUIRED BY THIS PROVISION, WE BELIEVE THAT IN FUTURE PROCUREMENTS OF THIS NATURE CONSIDERATION SHOULD BE GIVEN TO ESTABLISHING A REASONABLE ALLOWANCE FOR EACH DAY OF DELAY DURING SUCH PERIODS WHICH IS NOT ATTRIBUTABLE TO ACTIONS OF THE CONTRACTOR.