B-160818, APR. 6, 1967

B-160818, APR. 6, 1967

TO AVION ELECTRONICS, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAMS OF FEBRUARY 1 AND 3, 1967, PROTESTING THE REJECTION OF YOUR OFFER SUBMITTED IN RESPONSE TO REQUEST FOR QUOTATION NO. DAAA-25-67-00181, ISSUED OCTOBER 27, 1966, BY THE FRANKFORD ARSENAL, PHILADELPHIA, PENNSYLVANIA.

THE REQUEST FOR QUOTATION CONCERNED A PROPOSED PROCUREMENT OF CERTAIN EQUIPMENT WHICH WOULD MEET, AT A MINIMUM, THE ARMY'S STANDARDS AND REQUIREMENTS AS SET FORTH IN A SPECIFIED ENGINEERING DESCRIPTION. IT WAS CONTEMPLATED THAT THE CONTRACT WOULD BE AWARDED PRIMARILY ON THE BASIS OF EVALUATIONS OF THE TECHNICAL PROPOSALS SUBMITTED WITH QUOTATIONS, IN ACCORDANCE WITH THE CRITERIA ESTABLISHED IN THE GENERAL REQUIREMENTS ANNEXED TO THE GOVERNMENT'S ENGINEERING DESCRIPTION. IT WAS ALSO CONTEMPLATED THAT THE CONTRACT TO BE AWARDED WOULD BE OF A TYPE KNOWN AS A FIXED-PRICE INCENTIVE (FIRM TARGET) CONTRACT.

YOUR PROTEST AGAINST THE REJECTION OF YOUR OFFER IS ON THE BASIS THAT YOUR OFFER WAS LOWER THAN THAT OF THE SELECTED SOURCE AND THAT YOUR COMPANY IS A RELIABLE SOURCE FOR OBTAINING THE REQUIRED EQUIPMENT AND RELATED SERVICES.

QUOTATIONS AND TECHNICAL PROPOSALS WERE SOLICITED FROM NINE FIRMS AND SIX OF THOSE FIRMS SUBMITTED QUOTATIONS ACCOMPANIED WITH THEIR TECHNICAL PROPOSALS ON OR BEFORE NOVEMBER 28, 1966, AS REQUIRED IN THE GOVERNMENT'S REQUEST FOR QUOTATION. THE TECHNICAL PROPOSALS WERE EVALUATED BY THE FRANKFORD ARSENAL WITH THE ASSISTANCE OF CERTAIN COGNIZANT ARMY COMMANDS WHICH WERE REQUESTED TO PROVIDE RATINGS ON THOSE PORTIONS OF THE SEVERAL PROPOSALS WHICH CONCERNED THEIR PARTICULAR FUNCTIONS. ON THE BASIS OF THE ESTABLISHED CRITERIA FOR EVALUATION OF THE TECHNICAL PROPOSALS SUBMITTED WITH QUOTATIONS, THE TECHNICAL PROPOSAL OF THE AEROJET GENERAL CORPORATION, AZUSA, CALIFORNIA, WAS GIVEN THE HIGHEST RATING AND THE TECHNICAL PROPOSAL OF YOUR COMPANY WAS GIVEN THE THIRD HIGHEST RATING. THOSE RELATIVE STANDINGS WERE NOT CHANGED FOLLOWING THE RECEIPT AND CONSIDERATION OF YOUR LETTER DATED DECEMBER 23, 1966, FURNISHING SUPPLEMENTAL DATA IN REGARD TO FIVE AREAS OF YOUR TECHNICAL PROPOSAL WHICH HAD BEEN DISCUSSED PREVIOUSLY IN A TELEPHONE CONVERSATION BETWEEN REPRESENTATIVES OF YOUR COMPANY AND THE FRANKFORD ARSENAL.

ON DECEMBER 28, 1966, A LETTER CONTRACT WAS ISSUED TO AND ACCEPTED BY THE AEROJET GENERAL CORPORATION. THE CONTRACTING OFFICER HAS REPORTED THAT A REPRESENTATIVE OF YOUR COMPANY ATTENDED A DEBRIEFING CONFERENCE HELD AT THE FRANKFORD ARSENAL ON JANUARY 12, 1967, AND THE RECORD SHOWS THAT YOU WERE ADVISED FORMALLY BY LETTER DATED JANUARY 13, 1967, THAT YOUR PROPOSAL WAS NOT ACCEPTED. THE LETTER INDICATED THAT THE REASON FOR NON-ACCEPTANCE OTHER THAN PRICE WAS: ,TECHNICAL EVALUATION RATING SYSTEM FOR RESEARCH, DEVELOPMENT AND ENGINEERING PROPOSALS.'

IN HIS REPORT ON YOUR PROTEST THE CONTRACTING OFFICER HAS TAKEN THE POSITION THAT THE PROTEST CANNOT BE SUSTAINED ON THE BASIS OF YOUR QUOTATION OF A LOWER PRICE THAN OFFERED BY THE SUCCESSFUL OFFEROR BECAUSE ALL APPLICABLE DOCUMENTATION OF THE REQUEST FOR QUOTATION CLEARLY AND UNEQUIVOCALLY SHOWS THAT ALL PROSPECTIVE OFFERORS WERE PLACED ON NOTICE THAT THE CONTRACT AWARD WOULD BE BASED ON EVALUATIONS OF THE TECHNICAL PROPOSALS SUBMITTED.

THE RECORD BEFORE US SHOWS THAT ALL FIRMS CONSIDERED AS HAVING SUBMITTED TECHNICAL PROPOSALS WHICH WOULD SERVE AS A POSSIBLE BASIS FOR FURTHER NEGOTIATIONS WERE GIVEN SUFFICIENT OPPORTUNITIES TO NEGOTIATE AND UPGRADE THEIR PROPOSALS. ALTHOUGH YOU STATE THAT YOUR COMPANY IS A RELIABLE SOURCE FOR THE DESIRED EQUIPMENT AND SERVICES, WE CANNOT SAY THAT THE FRANKFORD ARSENAL WAS NOT JUSTIFIED IN CONSIDERING EVALUATIONS OF THE TECHNICAL PROPOSALS SUBMITTED WITH QUOTATIONS TO BE OF PARAMOUNT IMPORTANCE IN MAKING A CONTRACT AWARD SO THAT THE GOVERNMENT WOULD BE GIVEN REASONABLE ASSURANCE THAT THE EQUIPMENT DEVELOPED UNDER SUCH A CONTRACT WOULD BE THE BEST OBTAINABLE. AS STATED IN PARAGRAPH 4-205.1 (A), ARMED SERVICES PROCUREMENT REGULATION (ASPR), IN CONNECTION WITH RESEARCH AND DEVELOPMENT CONTRACTS,"THE DEPARTMENT OF DEFENSE MUST SEEK THE MOST ADVANCED KNOWLEDGE ATTAINABLE AND THE BEST POSSIBLE EQUIPMENT, WEAPONS, AND WEAPON SYSTEMS THAT CAN BE DEVISED AND PRODUCED.'

PARAGRAPH 4-205.5/A), ASPR, PROVIDES THAT COST OR PRICE SHOULD NOT BE DISREGARDED IN THE CHOICE OF A CONTRACTOR FOR THE PERFORMANCE OF A RESEARCH AND DEVELOPMENT CONTRACT. HOWEVER, THAT PARAGRAPH ALSO INDICATES THAT OTHER FACTORS MUST BE CONSIDERED IN THE SELECTION OF A RESEARCH AND DEVELOPMENT CONTRACTOR, AND THAT COST OR PRICE NEED NOT BE CONSIDERED AS CONTROLLING WHERE, AS HERE, THE TECHNICAL PROPOSAL OF A FIRM WHICH DID NOT SUBMIT THE LOWEST QUOTATION OR TARGET PRICE HAS BEEN DETERMINED TO BE SUPERIOR IN CERTAIN IMPORTANT RESPECTS TO ALL OTHER TECHNICAL PROPOSALS SUBMITTED.

IT HAS BEEN CONSISTENTLY THE POSITION OF OUR OFFICE THAT THE RESPONSIBILITY FOR TECHNICAL EVALUATIONS OF BIDS AND PROPOSALS RESTS WITH THE CONTRACTING AGENCIES OF THE GOVERNMENT, AND THAT THEIR DECISIONS MUST GOVERN IN THE ABSENCE OF A CLEAR SHOWING OF IMPROPRIETY OR GROSS ERROR.

IN OUR CONSIDERATION OF THIS PROCUREMENT WE HAVE FOUND NO PROPER BASIS FOR CONCLUDING THAT THE DECISION TO REJECT YOUR PROPOSAL AND TO MAKE THE CONTRACT AWARD TO THE AEROJET GENERAL CORPORATION WAS ARBITRARY IN ANY RESPECT. YOUR PROTEST TO OUR OFFICE IN THE MATTER IS THEREFORE DENIED.