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B-170206, MAR 29, 1971, 50 COMP GEN 686

B-170206 Mar 29, 1971
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CONTRACTS - NEGOTIATION - EVALUATION FACTORS - MANNING REQUIREMENTS THE REJECTION UNDER A REQUEST FOR PROPOSALS TO FURNISH MESS ATTENDANT SERVICES OF THE CURRENT CONTRACTOR ON THE BASIS OF DEFICIENT MANNING CHARTS WITHOUT INFORMING THE CONTRACTOR THAT THE WRITTEN ADVICE AS TO PROPOSED MANPOWER HOURS HAD BEEN MISINTERPRETED BY THE CONTRACTOR IN ITS REPLY TO CONCERN PRICE WHEREAS ITS OFFER WAS CONSIDERED OUTSIDE THE COMPETITIVE RANGE PREVENTED MEANINGFUL NEGOTIATIONS WITH THE CONTRACTOR. THE AWARD WILL NOT BE DISTURBED. 1971: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 27. THIS PROCUREMENT IS ALSO THE SUBJECT OF A PROTEST FILED BY MANPOWER INCORPORATED. SHOULD THE CONTRACTING OFFICER DETERMINE THAT A LESS THAN SATISFACTORY LEVEL OF PERFORMANCE IS CAUSED BY PERSONNEL STAFFING BELOW THAT SET FORTH IN ATTACHMENT A.

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B-170206, MAR 29, 1971, 50 COMP GEN 686

CONTRACTS - NEGOTIATION - EVALUATION FACTORS - MANNING REQUIREMENTS THE REJECTION UNDER A REQUEST FOR PROPOSALS TO FURNISH MESS ATTENDANT SERVICES OF THE CURRENT CONTRACTOR ON THE BASIS OF DEFICIENT MANNING CHARTS WITHOUT INFORMING THE CONTRACTOR THAT THE WRITTEN ADVICE AS TO PROPOSED MANPOWER HOURS HAD BEEN MISINTERPRETED BY THE CONTRACTOR IN ITS REPLY TO CONCERN PRICE WHEREAS ITS OFFER WAS CONSIDERED OUTSIDE THE COMPETITIVE RANGE PREVENTED MEANINGFUL NEGOTIATIONS WITH THE CONTRACTOR. THE FAILURE TO INFORM OFFERORS OF ALL THE EVALUATION FACTORS TO BE CONSIDERED AND THE RELATIVE WEIGHT OF EACH FACTOR ALTHOUGH NOT CONDUCIVE TO OBTAINING PROPOSALS OFFERING MAXIMUM COMPETITION AND THE MOST REASONABLE PRICES, THE CIRCUMSTANCES OF THE AWARD DO NOT DISCLOSE ABUSE OF DISCRETION BY THE CONTRACTING OFFICER ON ANY BASIS FOR IMPUTING BAD FAITH ON HIS PART SO AS TO AFFECT THE LEGALITY OF THE CONTRACT AWARDED AND, THEREFORE, THE AWARD WILL NOT BE DISTURBED.

TO DYNAMIC ENTERPRISES, INC., MARCH 29, 1971:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 27, 1970, SENT THROUGH THE CONTRACTING OFFICER, AND SUBSEQUENT CORRESPONDENCE TO OUR OFFICE PROTESTING THE AWARD OF A CONTRACT TO MILITARY BASE MANAGEMENT, INC. (MBM), UNDER SOLICITATION NO. N00204-70-R-0029, ISSUED BY NAVAL AIR STATION, PENSACOLA, FLORIDA. THIS PROCUREMENT IS ALSO THE SUBJECT OF A PROTEST FILED BY MANPOWER INCORPORATED, OF JACKSON, MISSISSIPPI.

THE SUBJECT RFP, ISSUED ON MARCH 16, 1970, SOLICITED OFFERS FOR FURNISHING LABOR AND MATERIALS TO PERFORM MESS ATTENDANT SERVICES IN SUBSISTENCE BUILDING 122 AT THE NAVAL CONSTRUCTION BATTALION CENTER, GULFPORT, MISSISSIPPI, DURING THE PERIOD JULY 1, 1970, THROUGH JUNE 30, 1971.

SECTION 5.0(A) OF THE RFP PROVIDED THAT:

SECTION 5.0 - NOTICES TO OFFERORS

(A) ALL OFFERORS SHALL SUBMIT WITH THEIR PROPOSAL, A MANNING CHART IN THE FORMAT OF ATTACHMENT A, SHOWING THE ESTIMATED NUMBER OF PERSONNEL REQUIRED IN EACH SPACE EACH HALF HOUR OF A REPRESENTATIVE WEEKDAY TO SATISFACTORILY PERFORM THE CONTRACT SERVICES. NOTHING IN THIS SECTION, OR ELSEWHERE IN THIS CONTRACT SHALL BE CONSTRUED AS LIMITING THE CONTRACTOR'S RESPONSIBILITY FOR PROVIDING SUFFICIENT PERSONNEL TO ACCOMPLISH ALL OF THE REQUIREMENTS SET FORTH HEREIN.

WITH RESPECT TO THE MANNING CHART, SECTION 9.36 OF THE RFP PROVIDED THAT:

9.36 - STAFFING LEVELS (NUMBER OF EMPLOYEES)

THE STAFFING LEVELS ENTERED BY THE CONTRACTOR ON THE MANNING CHARTS (ATTACHMENT A) SHALL BECOME AN INTEGRAL PART OF THE CONTRACT, AND THE CONTRACTING OFFICER MAY REQUIRE THAT THIS STAFFING LEVEL BE FULFILLED SHOULD PERFORMANCE OF THIS CONTRACT FALL BELOW ACCEPTABLE STANDARDS. THE CONTRACTOR MAY BE REQUIRED TO MAKE MONETARY ADJUSTMENTS FOR ANY MANHOURS LESS THAN THOSE SPECIFIED, SHOULD THE CONTRACTING OFFICER DETERMINE THAT A LESS THAN SATISFACTORY LEVEL OF PERFORMANCE IS CAUSED BY PERSONNEL STAFFING BELOW THAT SET FORTH IN ATTACHMENT A, MANNING CHART. NOTWITHSTANDING THE FOREGOING, THE CONTRACTOR IS RESPONSIBLE IN ANY EVENT FOR SUPPLYING SUFFICIENT PERSONNEL TO PERFORM THE CONTRACT SATISFACTORILY.

TEN FIRMS SUBMITTED OFFERS IN RESPONSE TO THE SOLICITATION. REVIEW BY THE CONTRACTING OFFICER AND THE FOOD SERVICE OFFICER INDICATED THAT FURTHER NEGOTIATIONS WERE REQUIRED WITH THE OFFERORS IN ORDER TO RESOLVE UNCERTAINTIES IN THE OFFERS SUBMITTED. AT THIS TIME IT WAS NOTED THAT THE MANNING CHARTS ISSUED WITH THE SOLICITATION WERE MISLEADING IN THAT A SEPARATE CHART WAS FURNISHED FOR THE WEEKDAY PERIOD OF MONDAY THROUGH FRIDAY, AND ONE FOR THE WEEKEND DAY PERIOD OF SATURDAY, SUNDAY, AND HOLIDAYS. HOWEVER, SECTION 11.7(A)(1) OF THE SPECIFICATIONS REQUIRED OPERATION OF FOUR SERVING LINES ON SATURDAY, AS WAS REQUIRED MONDAY THROUGH FRIDAY, THE ONLY DIFFERENCE BEING THAT IT WAS ESTIMATED THAT A FEWER NUMBER OF MEALS WOULD BE SERVED ON SATURDAY. THEREFORE, BY LETTER OF MAY 8, 1970, ALL OFFERORS WERE SPECIFICALLY INFORMED OF THIS DISCREPANCY AND WERE FURNISHED REVISED MANNING CHARTS MARKED "WEEKDAY MONDAY THROUGH SATURDAY" AND "WEEKEND DAY SUNDAY/HOLIDAY," AND WERE ALLOWED TO SUBMIT REVISED PROPOSALS. ALL OFFERORS EXCEPT YOUR COMPANY REVISED THEIR MANNING CHARTS, AND THE PROPOSALS WERE THEN AS FOLLOWS:

TOTAL HOURS OF

YEARLY AMOUNT MANNING

OFFEROR (NET) OFFERED YEARLY MANPOWER OF JACKSON $239,932.80 108,720 JCM CORPORATION 266,109.63 109,820 INDUSTRIAL MAINTENANCE 269,310.00 95,127.5 JOHN CHRISMAN & ASSOCIATES 270,832.00 116,957 SPACE SERVICES OF GEORGIA 271,080.00 123,840 DYNAMIC ENTERPRISES 280,530.00 116,126.5 MILITARY BASE MANAGEMENT 297,000.00 127,075 WORLDWIDE SERVICES 299,248.06 129,507 WEBSTER CONTRACTORS 303,857.00 121,762.5 DIVERSIFIED SERVICES 321,588.00 131,410

IN HIS REPORT TO OUR OFFICE THE CONTRACTING OFFICER ADVISED THAT AFTER REVIEW OF THE FINAL OFFERS HE CONCLUDED THAT THE UNREVISED OFFER OF DYNAMICS DID NOT MEET THE SOLICITATION REQUIREMENTS IN THAT ITS MANNING CHARTS INDICATED NONE OF THE SERVING LINES WOULD BE STAFFED DURING THE SATURDAY BREAKFAST PERIOD FROM 0600 TO 0715 AND SUFFICIENT MANNING WAS NOT PROVIDED TO MAN FOUR SERVING LINES DURING THE DINNER PERIOD FROM 1130 TO 1245 ON SATURDAY. CONSEQUENTLY, HE DETERMINED THAT MBM HAD PROPOSED THE MOST ADVANTAGEOUS OFFER TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED, SINCE "OF ALL THE ACCEPTABLE OFFERS, MBM'S PROPOSAL OFFERED MORE HOURS AT LESS COST AS COMPARED TO THE OTHER ACCEPTABLE OFFERS," AND AWARD WAS MADE TO MBM ON JUNE 24, 1970. BY LETTER OF THE SAME DATE, THE CONTRACTING OFFICER ADVISED YOUR FIRM OF THE AWARD TO MBM AND STATED "YOUR PROPOSAL WAS UNACCEPTABLE BECAUSE OF INSUFFICIENT MANNING. DEFICIENCIES WERE EVIDENT IN ALL CLEANING AND FOOD HANDLING AREAS ON SATURDAYS, AND IN THE VEGETABLE PREPARATION ROOM, THE PASSAGEWAYS, HEADS, OFFICES, BACK DOCK AND BAKE SHOP AREAS."

THE BASIS OF YOUR PROTEST IS PRIMARILY THAT THE CONTRACT WAS NEGOTIATED IN BAD FAITH IN THAT THE CONTRACTING OFFICER'S LETTER OF MAY 8, 1970, INDICATED YOUR PROPOSED MANNING SCHEDULES WAS ACCEPTABLE TO THE GOVERNMENT, BUT THE CONTRACTING OFFICER LATER REJECTED YOUR PROPOSAL BECAUSE OF THE REASONS STATED ABOVE. YOU ALSO CONTEND THAT THE CONTRACTING OFFICER SHOULD HAVE ADVISED YOU THAT YOUR INTERPRETATION OF THE MAY 8 LETTER WAS INCORRECT.

THE LETTER OF MAY 8 ADVISED IN PERTINENT PART:

*** IT SHOULD ALSO BE NOTED THAT WHILE ESTIMATED MEAL BREAKDOWN REFLECTS SUBSTANTIALLY FEWER MEALS ON SATURDAYS, SECTION 11.7(A)(1) REQUIRES OPERATION OF FOUR (4) SERVING LINES ON SATURDAY AS IS REQUIRED MONDAY THRU FRIDAY.

YOUR PROPOSAL HAS BEEN EVALUATED AND WE FEEL THAT EITHER A PROPOSAL REVISION OR DETAILED EXPLANATION IN ONE AREA IS NECESSARY.

1. IT DOES NOT SEEM REASONABLE THAT YOU CAN PROFITABLY FURNISH THE NUMBER OF HOURS PROPOSED AT YOUR PRESENT PRICE OFFER. IN ORDER TO PREVENT PLACING YOUR FIRM IN A VERY PRECARIOUS FINANCIAL POSITION BASED ON YOUR PRESENT PROPOSAL, PLEASE SUBMIT YOUR RATIONALE SUPPORTING THE HOURS PROPOSED AT THE PRESENT PRICE OFFER.

CERTAIN INFORMATION RELATING PROPOSED MANHOURS TO THE GOVERNMENT'S ESTIMATE HAS BEEN INADVERTENTLY DISCLOSED TO SOME FIRMS. THIS MAKES IT NECESSARY FOR THE GOVERNMENT TO SO ADVISE ALL OFFERORS IF UNDUE COMPETITIVE ADVANTAGE IS TO BE AVOIDED. YOU ARE CAUTIONED THAT THIS INFORMATION RELEASE IS NOT INTENDED AS A PRECEDENT FOR NEGOTIATING MESS ATTENDANT CONTRACTS GENERALLY, AND IS MADE NECESSARY ONLY IN THE INTEREST OF COMPETING FIRMS WHO ARE NOT PRIVY TO SUCH DATA. ACCORDINGLY YOU ARE ADVISED THAT YOUR PROPOSED WEEKDAY MANHOURS WERE APPROXIMATELY 93% OF THE MINIMUM AMOUNT ORIGINALLY ESTIMATED BY THE GOVERNMENT AS BEING REQUIRED TO SATISFACTORILY PERFORM THE REQUIRED SERVICES. ***

BY LETTER DATED MAY 15, 1970, YOU RESPONDED TO THE AFOREMENTIONED LETTER AS FOLLOWS:

YOU MENTIONED THAT OUR MANHOURS TOTALED ONLY 93% OF THE GOVERNMENT'S ORIGINAL ESTIMATE, BUT DID NOT STATE THAT OUR PROPOSAL REQUIRED REVISION IN THIS AREA. WE HAVE INFERRED, THEN, THAT THE MANNING CHARTS SUBMITTED ARE FULLY ADEQUATE FOR THE WORK REQUIRED, AND INDICATE TECHNICAL COMPETENCE AND UNDERSTANDING OF THE PROJECT. THE CHARTS WERE CAREFULLY PREPARED, AND REFLECTED, AMONG OTHER THINGS, THE EXPERIENCE GAINED FROM OUR OPERATION OF THAT BUILDING FOR OVER A YEAR AND A HALF. OUR STAFFING, COMBINED WITH OUR EXPERIENCE, CAPABILITY, AND DETERMINATION, WILL PROVIDE AN OUTSTANDING SERVICE. AS IN THE PAST, SHOULD THE PRICE OFFERED AND/OR THE STAFFING SHOWN BE INADEQUATE, WE WILL PROVIDE THE SERVICE REGARDLESS. IF THERE IS A DEFICIENCY IN EITHER, THE LOSS WILL BE THAT OF DYNAMIC AND NOT THAT OF THE NAVY.

THEN AFTER EXPLAINING HOW THE HOURS YOU OFFERED WERE "COST OUT," AND THE AMOUNT AVAILABLE FOR PREMIUM PAY, OVERHEAD, GENERAL AND ADMINISTRATIVE EXPENSES, AND PROFIT, YOU STATED:

*** THAT AMOUNT IS DETERMINED BY JUDGMENT, HOWEVER, AND IS BASED ON MANY CONSIDERATIONS. IT IS RECOGNIZED THAT THROUGH THE OPTION CLAUSE WE HAVE AN OPPORTUNITY TO OPERATE THREE YEARS IF THE SERVICE IS OF SUFFICIENTLY HIGH QUALITY. DURING THE PAST FIVE YEARS, DYNAMIC HAS AT A LARGE NUMBER OF LOCATIONS BEEN ABLE TO PERFORM CONTRACTS IN AN OUTSTANDING MANNER AT SUBSTANTIAL SAVINGS FROM THE ORIGINAL MANNING CHARTS. WHILE WE DO NOT COMMENCE A CONTRACT WITH THIS INTENT, IT WOULD NOT BE PROPER TO PRICE PROPOSALS WITHOUT RECOGNIZING THIS EXPERIENCE AS A FACTOR. TAKING ALL BUSINESS AS A WHOLE, WERE WE TO COMPUTE COSTS WITHOUT SUCH CONSIDERATION, WE WOULD IN THE LONG RUN BE CHARGING THE GOVERNMENT MORE THAN A REASONABLE PRICE FOR SERVICES PERFORMED. THE GOVERNMENT WOULD THEREBY BE DENIED ONE OF THE PRINCIPAL BENEFITS OF CONTRACT VERSUS IN HOUSE SERVICES.

THE CONTRACTING OFFICER CONSIDERS THAT THE INFERENCES DRAWN BY DYNAMICS FROM THE MAY 8 LETTER ARE UNWARRANTED FROM A READING OF THE CONTEXT OF THE LETTER AS A WHOLE, AND THAT THE BURDEN WAS MORE PROPERLY ON YOUR FIRM TO CONTACT THE CONTRACTING OFFICER BEFORE THE CLOSING DATE FOR SUBMISSION OF REVISED PROPOSALS SO AS TO RESOLVE ANY DOUBTS. TO THIS, YOU OBSERVE:

*** EVEN IF THE BURDEN IS, AS SUGGESTED BY THE CONTRACTING OFFICER, ON DYNAMIC ENTERPRISES, THEN DYNAMIC ENTERPRISES MORE THAN FULLY MET THAT BURDEN IN ITS LETTER OF MAY 15. IT IS FELT THAT THAT LETTER IS MORE THAN CLEAR IN THIS REGARD. THE TIME ALLOWED TO CLARIFY ANY MISUNDERSTANDING WAS MORE THAN ADEQUATE, AS THE DYNAMIC LETTER WAS SENT 18 DAYS BEFORE THE CLOSING OF NEGOTIATIONS AND 46 DAYS BEFORE THE COMMENCEMENT OF THE CONTRACT.

CLEARLY HAD THESE ALLEGED INADEQUACIES IN THE STAFFING CHART OFFERED BY DYNAMIC ENTERPRISES BEEN POINTED OUT, THEY WOULD HAVE BEEN CORRECTED. THEY WERE SUFFICIENTLY MINOR IN NATURE THAT THE SAME PRICE WOULD HAVE BEEN OFFERED, WITH THE CORRECTED MANNING CHARTS.

YOU ALSO CONTEND IN YOUR INITIAL PROTEST LETTER THAT THE FOOD SERVICE OFFICER AT GULFPORT IS A PERSONAL FRIEND OF THE OWNERS OF MBM, WHICH MAY HAVE CAUSED HIS OPINION CONCERNING THE PROPOSALS TO BE BIASED IN FAVOR OF THAT COMPANY. LATER, YOU INDICATE THAT THIS STATEMENT WAS IN THE NATURE OF A REQUEST FOR INVESTIGATION BY GOVERNMENT OFFICIALS WHO WERE IN A POSITION TO OBTAIN CONCLUSIVE KNOWLEDGE OF THE FACTS. IN THIS REGARD, BY AFFIDAVIT OF JULY 24, 1970, THE FOOD SERVICE OFFICER DENIES KNOWING THE OWNER OF MBM OR HAVING EVER MET OR COMMUNICATED WITH HIM. IN VIEW THEREOF, AND IN THE ABSENCE OF EVIDENCE SUFFICIENT TO SHOW THAT THE CONTRACTING OFFICER'S STATEMENT IS INCORRECT, WE SEE NO BASIS FOR YOUR CONTENTION THAT THE FOOD SERVICE OFFICER WAS BIASED IN FAVOR OF MBM.

TURNING THEN TO THE MERITS OF YOUR PROTEST, IN B-167685, OCTOBER 21, 1969, IN WHICH WE DENIED A PROTEST OF AN AWARD TO YOUR FIRM, WE STATED:

IN A NEGOTIATED PROCUREMENT, THE RULES OF FORMALLY ADVERTISED, COMPETITIVE BIDDING, SUCH AS THE REQUIREMENT FOR AWARD TO THE LOWEST RESPONSIVE, RESPONSIBLE BIDDER, ARE NOT CONTROLLING AND A CONTRACTING OFFICER MAY TAKE INTO CONSIDERATION ALL FACTORS DEEMED ESSENTIAL TO THE PROCUREMENT GOAL. WE VIEW THE INFORMATION TO BE SECURED FROM AN OFFEROR'S MANNING CHART AS AN AID TO THE CONTRACTING OFFICER IN DETERMINING WHETHER THE OFFEROR IS WITHIN A COMPETITIVE RANGE FOR NEGOTIATION PURPOSES. THIS PROCUREMENT, MOREOVER, THE MANNING CHART REPRESENTED THE OFFEROR'S BASIC APPROACH TO PERFORMING THE REQUIRED SERVICES. THE GOAL OF THIS NEGOTIATED PROCUREMENT WAS TO PROCURE SERVICES FROM A RESPONSIBLE SOURCE AT FAIR AND REASONABLE PRICES WHICH ARE CALCULATED TO RESULT IN THE LOWEST ULTIMATE OVERALL COST TO THE GOVERNMENT. SEE PARAGRAPH 3-801.1 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR). IN ADDITION, ASPR 3-806(A) STATES THAT "THE OBJECTIVE OF THE CONTRACTING OFFICER SHALL BE TO NEGOTIATE FAIR AND REASONABLE PRICES IN WHICH DUE WEIGHT IS GIVEN TO ALL RELEVANT FACTORS, INCLUDING THOSE IN 3-101." ASPR 3-101 STATES THAT WHEN NEGOTIATIONS ARE ENTERED INTO DUE ATTENTION SHALL BE GIVEN TO A NUMBER OF FACTORS, INCLUDING "CONSIDERATION OF THE SOUNDNESS OF PROSPECTIVE CONTRACTORS' MANAGEMENT OF LABOR RESOURCES, INCLUDING WAGE RATES, NUMBER OF WORKERS AND TOTAL ESTIMATED LABOR HOURS." ASPR 3-101(XV). THUS, IT IS EVIDENT THAT THE DETERMINATION OF AN APPROPRIATE LEVEL OF MANNING NECESSARY TO PERFORM THE WORK UNDER A PROPOSED PROCUREMENT IS A LEGITIMATE AND PROPER SUBJECT FOR NEGOTIATION. SEE B-166705, JULY 30, 1969.

WE BELIEVE THE ABOVE STATEMENT IS EQUALLY APPLICABLE TO THE PRESENT SITUATION. FURTHER, WE BELIEVE THAT IN KEEPING WITH THIS RULE, A MORE DEFINITIVE STATEMENT SHOULD HAVE BEEN CONTAINED IN THE SOLICITATION ADVISING OFFERORS THE EXACT ROLE THE MANNING CHARTS WERE TO PLAY IN THE EVALUATION OF OFFERS, ESPECIALLY IN VIEW OF THE FACT THAT OFFERORS PRESENTLY ARE ADVISED THAT, NOTWITHSTANDING THE NUMBER OF MANNING HOURS OFFERED, THE CONTRACTOR IS RESPONSIBLE IN ANY EVENT FOR SUPPLYING SUFFICIENT PERSONNEL TO PERFORM THE CONTRACT SATISFACTORILY, AND ARE CAUTIONED AGAINST PLACING UNDUE EMPHASIS ON CONTRACT MANNING AS THE PRINCIPAL EVALUATION CRITERION. IN THIS REGARD, WE HAVE HELD THAT SOUND PROCUREMENT POLICY REQUIRES OFFERORS TO BE INFORMED OF ALL EVALUATION FACTORS AND OF THE RELATIVE WEIGHTS TO BE ATTACHED TO EACH FACTOR, B- 167983, MARCH 11, 1970. THEREFORE, WE FEEL THAT THE FAILURE TO SO ADVISE OFFERORS IN THE INSTANT PROCUREMENT WAS NOT CONDUCIVE TO OBTAINING PROPOSALS OFFERING THE MAXIMUM COMPETITION AND MOST REASONABLE PRICES. WHILE WE DO NOT QUESTION THE CONTRACTING OFFICER'S FINAL DETERMINATION THAT YOUR MANNING SCHEDULE WAS DEFICIENT IN THE SPECIFIED AREAS OF OPERATION, WE AGREE WITH YOUR INTERPRETATION OF THE MAY 8 LETTER, I.E., THAT THE REQUESTED EXPLANATION OF YOUR PROPOSAL WAS ONLY IN THE AREA CONCERNING PRICING. WE THINK THAT IF MEANINGFUL NEGOTIATIONS WERE TO BE CONDUCTED, THE CONTRACTING OFFICER SHOULD HAVE ADVISED YOUR FIRM THAT YOUR INTERPRETATION OF THIS LETTER WAS IN ERROR AND THAT YOUR THEN CURRENT OFFER WAS CONSIDERED TO BE OUTSIDE THE COMPETITIVE RANGE.

IT IS OUR VIEW, HOWEVER, THAT THE CIRCUMSTANCES SURROUNDING THE AWARD TO MBM DO NOT DISCLOSE SUCH A CLEAR ABUSE OF DISCRETION BY THE CONTRACTING OFFICER, OR THAT THERE IS ANY BASIS FOR IMPUTATION OF BAD FAITH ON HIS PART, SO AS TO AFFECT THE LEGALITY OF THE CONTRACT AWARDED TO MBM. VIEW THEREOF WE SEE NO ADEQUATE BASIS FOR DIRECTING CANCELLATION OF MBM'S CONTRACT AND, TO THE EXTENT YOUR PROTEST REQUESTED SUCH ACTION IT IS DENIED.

WE ARE, HOWEVER, ADVISING THE SECRETARY OF THE NAVY THAT IN THE LIGHT OF THE QUESTIONABLE NEGOTIATING PROCEDURE USED, EXERCISE OF THE OPTION IN THE CONTRACT AWARDED WOULD BE CONSIDERED IMPROPER BY OUR OFFICE, AND THAT OFFERS FOR THE SERVICES FOR NEXT YEAR SHOULD BE RESOLICITED UNDER REVISED PROCEDURES WHICH WILL MORE FULLY ADVISE OFFERORS OF THE FACTORS ON WHICH AN AWARD WILL BE BASED.

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