B-167983, MAR. 11, 1970

B-167983, MAR. 11, 1970

CONTRACTS--NEGOTIATION--EVALUATION FACTORS--MANNING REQUIREMENTS REJECTION OF LOW TECHNICAL PROPOSAL FOR COMPUTER OPERATIONS ON BASIS ADEQUATE MIX AND QUANTITY OF PERSONNEL WAS LACKING WAS NOT SO ERRONEOUS AS TO INVALIDATE AWARD SINCE NEGOTIATING APPROPRIATE LEVEL OF MANNING UNDER FIXED-PRICE CONTRACT IS BOTH LEGITIMATE AND NECESSARY; ALL PROPOSALS WERE EVALUATED UNDER SAME CRITERIA; AND FINAL SELECTION OF CONTRACTOR UNDER NEGOTIATED PROCEDURES IS LARGELY MATTER OF ADMINISTRATIVE JUDGMENT, ABSENT CLEAR SHOWING OF ARBITRARY USE OF DISCRETION OR BAD FAITH. HOWEVER, EXERCISE OF OPTION IN AWARDED CONTRACT WOULD BE CONSIDERED IMPROPER SINCE SOUND PROCUREMENT POLICY REQUIRES OFFERORS TO BE ADVISED OF ALL EVALUATION FACTORS AND RELATIVE WEIGHTS OF EACH BUT NEITHER SOLICITATION NOR NEGOTIATIONS WITH PROTESTANT ADEQUATELY INDICATED MIX AND QUANTITY OF PERSONNEL WAS EVALUATION FACTOR. SEE COMP. GEN. DECS. CITED.

TO TECHNOLOGY/SCIENTIFIC SERVICES, INC.:

THIS IS IN REPLY TO YOUR TELEGRAM OF SEPTEMBER 25, 1969, AND SUPPORTING LETTERS OF SEPTEMBER 29 AND DECEMBER 12, 1969, IN WHICH YOU PROTEST AGAINST THE AWARD OF A CONTRACT TO ANOTHER OFFEROR UNDER REQUEST FOR PROPOSALS NO. F33601-70-R-0091, ISSUED BY THE WRIGHT PATTERSON AIR FORCE BASE.

THE SOLICITATION REQUESTED PROPOSALS FOR A FIRM-FIXED PRICE TYPE CONTRACT FOR THE OPERATION OF DIGITAL COMPUTERS AND MAINTENANCE OF ASSOCIATED EQUIPMENT AS DESCRIBED IN THE SCHEDULE. NEGOTIATION PROCEDURES WERE EMPLOYED SINCE PERFORMANCE SPECIFICATIONS AND DATA WERE NOT SUFFICIENTLY DETAILED DUE TO THE TECHNICAL NATURE OF THE CONTEMPLATED SERVICES. THE SOLICITATION INCORPORATED THE INCUMBENT CONTRACTOR'S MANNING SCHEDULE FOR INFORMATIONAL PURPOSES AND IT DESCRIBED THE COMPLEMENT OF CURRENT EQUIPMENT AND ESTIMATED THE MONTHLY WORKLOAD. OFFERS RECEIVED WERE TO BE EVALUATED ON THE BASIS OF PRICE, PROPOSER'S RESPONSIBILITY AND CONSIDERATION AS TO THE TECHNICAL QUALIFICATIONS AND EXPERIENCE OF PERSONNEL PROPOSED TO FULFILL THE CONTRACT REQUIREMENTS. MINIMUM QUALIFICATIONS WERE SPELLED OUT IN THE SPECIFICATIONS. THE SOLICITATION FURTHER PROVIDED THAT A CONTRACT WOULD BE AWARDED TO THAT RESPONSIBLE OFFEROR WHOSE OFFER, CONFORMING TO THE SOLICITATION, WOULD BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED, AND RESERVED THE RIGHT TO ACCEPT OTHER THAN THE LOWEST OFFER AND TO REJECT ANY OR ALL OFFERS.

THE DEPARTMENT OF THE AIR FORCE REPORTS THAT SIX PROPOSALS WERE RECEIVED IN RESPONSE TO THE SOLICITATION AND EACH WAS EVALUATED FROM A TECHNICAL ASPECT BY A TEAM FROM THE COMPUTER SCIENCE CENTER OF THE AERONAUTICAL SYSTEMS DIVISION. ON THIS EVALUATION THE PROPOSED MANNING OFFERED BY YOUR PROPOSAL WAS CONSIDERED TO BE INADEQUATE, CONSIDERING THE MIX AND QUANTITY OF SKILLS AND EXPERIENCE OFFERED. SPECIFICALLY, IT WAS DETERMINED THAT THE TOTAL NUMBER OF COMPUTER TECHNICIANS AND JUNIOR COMPUTER TECHNICIANS PROPOSED DID NOT MEET THE MINIMUM REQUIREMENT FOR A SEVEN DAYS PER WEEK, TWENTY-FOUR HOURS PER DAY OPERATION, AND THAT THE SKILL AND EXPERIENCE LEVEL PROPOSED FOR THE OPERATION OF THE EQUIPMENT HAD BEEN DEGRADED TO THE POINT AT WHICH ADEQUATE OPERATING EXPERIENCE WOULD NOT AT ALL TIMES BE IMMEDIATELY AVAILABLE TO ASCERTAIN OR RECTIFY MALFUNCTIONS IN THE EQUIPMENT OR PROGRAM. NEVERTHELESS, IN VIEW OF THE LOW PRICE OFFERED, THE CONTRACTING OFFICER HELD DISCUSSIONS ON SEPTEMBER 16 WITH YOUR REPRESENTATIVE IN AN EFFORT TO UPGRADE THE PROPOSAL TO AN ACCEPTABLE TECHNICAL LEVEL. IT IS REPORTED THAT FOLLOWING THE NEGOTIATIONS YOUR FIRM SUBMITTED A LOWER PRICED PROPOSAL BUT MADE NO CHANGE IN ITS PROPOSED MANNING.

INITIALLY, YOUR FIRM PROTESTED THE REJECTION OF ITS PROPOSAL ON THE BELIEF THAT CRITERIA OTHER THAN THOSE SPECIFIED IN THE SOLICITATION WERE USED BY THE AIR FORCE AS A BASIS FOR DISQUALIFICATION. YOUR PROTEST SUGGESTS THAT YOU WERE DISQUALIFIED BECAUSE YOU FAILED TO PROPOSE THE USE OF 28 PERSONNEL FOR PERFORMANCE OF THE CONTRACT REQUIREMENTS, WHICH WAS THE NUMBER EMPLOYED BY THE INCUMBENT CONTRACTOR. YOU HAVE POINTED OUT THAT WHILE THE SOLICITATION INCORPORATED THE INCUMBENT CONTRACTOR'S MANNING TABLE, IT WAS STATED TO BE FOR INFORMATIONAL PURPOSES ONLY AND YOU CONTEND THAT FAILURE OF YOUR PROPOSAL TO CONFORM EXACTLY THERETO SHOULD NOT HAVE BEEN CAUSE FOR REJECTION. ESSENTIALLY, IT IS YOUR POSITION THAT YOU WERE ILLEGALLY DISQUALIFIED SINCE YOUR FIRM MET THE AWARD CRITERIA SPELLED OUT IN THE INVITATION NAMELY, THAT YOU OFFERED THE LOWEST PRICE, YOU WERE CONSIDERED TO BE A RESPONSIBLE BIDDER, AND EACH OF THE PERSONNEL PROPOSED FOR EMPLOYMENT WAS FULLY QUALIFIED FOR HIS RESPECTIVE TASK.

THE AIR FORCE HAS TAKEN THE POSITION IN ITS REPORT TO THIS OFFICE (A COPY OF WHICH WAS FURNISHED TO YOU) THAT THE INCUMBENT CONTRACTOR'S MANNING ARRANGEMENT WAS NOT CONSIDERED TO BE AN INFLEXIBLE REQUIREMENT. THE REPORT STATES, HOWEVER, THAT WHILE THE TOTAL NUMBER OF PERSONNEL COULD POSSIBLY HAVE BEEN REDUCED BY THE USE OF A PREPONDERANCE OF HIGHER SKILLS AND EXPERIENCE, A REDUCTION OF BOTH THE TOTAL NUMBER OF EMPLOYEES AND THE PROPORTION OF MORE HIGHLY SKILLED EMPLOYEES COULD NOT REASONABLY BE CONSIDERED ADEQUATE FOR THE WORK INVOLVED.

BY LETTER OF DECEMBER 12 YOUR FIRM RESPONDED TO THE ADMINISTRATIVE REPORT, OBJECTING TO THE POSITION TAKEN BY THE AIR FORCE ON SEVERAL BASES. ESSENTIALLY IT APPEARS TO BE YOUR POSITION THAT IRRESPECTIVE OF THE MIX AND QUANTITY OF EMPLOYEES PROPOSED BY YOUR FIRM THE CONTRACT INTENDED BY THE SOLICITATION WOULD HAVE REQUIRED THE CONTRACTOR TO PROVIDE, AT THE FIXED PRICE OFFERED, A SUFFICIENT NUMBER OF QUALIFIED PERSONNEL TO PERFORM THE SCOPE OF THE SERVICES SPECIFIED IN THE SOLICITATION, EVEN IF IN EXCESS OF THE NUMBER STATED IN THE PROPOSAL. MOREOVER, SINCE THE SOLICITATION DID NOT LIST THE MIX AND QUANTITY OF EMPLOYEES AS AN EVALUATION FACTOR, YOU IMPLY THAT THE NUMBER OF EMPLOYEES EVIDENCED BY AN OFFEROR'S PROPOSAL WAS NOT A MATERIAL FACTOR FOR THE PURPOSE OF EVALUATING OFFERS. YOUR UNDERSTANDING ALONG THESE LINES IS CLEARLY DEMONSTRATED BY YOUR LETTER OF SEPTEMBER 12, 1969, TO THE PROCURING ACTIVITY WHICH STATES THAT "IF A LARGER NUMBER OF PERSONNEL ARE REQUIRED TO OPERATE THE SUBJECT FACILITY THE PRICE QUOTED ($12,000.95 PER MONTH) AND NO MORE WILL BE PAID BY THE GOVERNMENT."

WE HAVE CAREFULLY ANALYZED THE WRITTEN RECORD OF THE PROCEDURES FOLLOWED IN THIS CASE AND, WHILE WE BELIEVE THAT THE COMPETITIVE ASPECTS OF THIS PROCUREMENT COULD HAVE BEEN IMPROVED, WE DO NOT FIND ANY LEGAL BASIS FOR CONCLUDING THAT THE AWARD AS MADE IS INVALID.

WE HAVE HELD THAT NEGOTIATING AN APPROPRIATE LEVEL OF MANNING TO PERFORM SERVICES UNDER A SIMILAR FIXED PRICE TYPE PROCUREMENT IS BOTH LEGITIMATE AND NECESSARY. TO THIS EFFECT WE STATED IN B-166705, JULY 30, 1969, AS FOLLOWS:

"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. 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 ASPR 3-801.1. 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 NECESSARY SUBJECT FOR NEGOTIATION." WE BELIEVE THE ABOVE STATEMENT IS EQUALLY APPLICABLE TO THE PRESENT SITUATION.

YOUR PROTEST ALSO RAISES A BASIC QUESTION AS TO WHETHER SUFFICIENT NOTICE WAS GIVEN BY THE AIR FORCE BEFORE AND DURING NEGOTIATIONS EITHER TO THE EFFECT THAT YOUR FIRM'S PROPOSAL WAS NOT CONSIDERED TECHNICALLY ACCEPTABLE AS SUBMITTED, OR THAT ITS MIX OR QUANTITY OF EMPLOYEES WOULD HAVE TO BE UPGRADED TO BECOME ACCEPTABLE. APPARENTLY YOU CONSIDERED THE FACT THAT YOU WERE CALLED FOR NEGOTIATIONS AS INDICATING THE ACCEPTABILITY OF YOUR PROPOSAL, AND YOU INTERPRETED THE NEGOTIATIONS AS DIRECTED ONLY TO ASCERTAINING YOUR CONFIDENCE IN THE WORKABILITY OF THE PROPOSED MANNING, AND POSSIBLY TO EFFECTING A REDUCTION IN PRICE. IT SHOULD BE NOTED, HOWEVER, THAT AN OFFER NEED NOT BE TECHNICALLY ACCEPTABLE AS SUBMITTED TO BE CONSIDERED WITHIN A COMPETITIVE RANGE FOR THE PURPOSE OF PARTICIPATING IN NEGOTIATIONS, AND IT IS SUFFICIENT THAT AN OFFER MERELY BE CAPABLE OF BEING MADE ACCEPTABLE AFTER DISCUSSION. SEE ARMED SERVICES PROCUREMENT REGULATION 3-805.1 (C).

THE RECORD INDICATES THAT YOU ANTICIPATED PRICE NEGOTIATIONS ONLY AND THAT YOUR REPRESENTATIVE WAS NOT PREPARED DURING NEGOTIATIONS TO DISCUSS THE MANNING SCHEDULE IN DETAIL. WHILE THE AIR FORCE NEGOTIATORS MAY HAVE FAILED TO ADVISE YOU SPECIFICALLY THAT YOUR PROPOSAL COULD NOT BE ACCEPTED AS SUBMITTED, IT APPEARS THAT THE CONTRACTING OFFICER DID ADVISE YOUR REPRESENTATIVE THAT YOU WERE CONSIDERED TO BE "MANNING TOO THIN." IN VIEW OF THE FACT THAT THE AIR FORCE DID NOT SPECIFICALLY ADVISE IN ITS SOLICITATION THAT THE MIX AND QUANTITY OF EMPLOYEES OFFERED WOULD BE REGARDED AS MATERIAL IN ADDITION TO THE MINIMUM PERSONNEL QUALIFYING REQUIREMENTS OF THE SOLICITATION, WE ARE OF THE OPINION THAT THE AIR FORCE NEGOTIATORS SHOULD HAVE ADVISED YOU MORE SPECIFICALLY DURING NEGOTIATIONS THAT YOUR OFFER AS INITIALLY PROPOSED WOULD NOT BE ACCEPTED, RATHER THAN MERELY STATING THAT YOU WERE "MANNING TOO THIN." IN RETROSPECT, ANYTHING SHORT OF SUCH ADVICE WAS NOT CONDUCIVE TO OBTAINING MAXIMUM COMPETITION FOR THE PROCUREMENT. IN THIS REGARD WE HAVE OFTEN HELD THAT SOUND PROCUREMENT POLICY REQUIRES THAT OFFERORS BE INFORMED OF ALL EVALUATION FACTORS AND OF THE RELATIVE WEIGHTS TO BE ATTACHED TO EACH FACTOR. SEE B- 166233 (1) AND (2), JUNE 17, 1969, AND CASES CITED THEREIN.

INASMUCH AS IT APPEARS THAT THE AIR FORCE FELT IT WAS NECESSARY TO EMPLOY NEGOTIATION PROCEDURES BECAUSE OF THE DIFFICULTY OF STATING PERFORMANCE SPECIFICATIONS AND DATA IN SUFFICIENT DETAIL TO PERMIT OF FORMAL ADVERTISING FOR THE TECHNICAL SERVICES REQUIRED, AND SINCE ALL PROPOSALS APPEAR TO HAVE BEEN EVALUATED ON THE BASIS OF THE SAME LEGITIMATE CRITERIA AND YOU WERE IN FACT ADVISED THAT YOU WERE "MANNING TOO THIN" AND GIVEN AN OPPORTUNITY TO REVISE YOUR PROPOSAL IN THIS RESPECT, WE ARE UNABLE TO CONCLUDE THAT THE PROCEDURES FOLLOWED OR THE EVALUATION FACTORS EMPLOYED WERE SO ERRONEOUS AS TO INVALIDATE THE AWARD.

YOUR LETTER OF DECEMBER 12 ALSO STATES THAT THE CONTRACTING OFFICER FORMULATED HIS DECISION TO REJECT YOUR PROPOSAL ON THE BASIS OF PATENTLY ERRONEOUS INFORMATION. SPECIFICALLY, YOU CLAIM THAT SINCE BOTH YOUR INITIAL AND REVISED PROPOSALS EMPLOYED THE USE OF THE SAME NUMBER OF JUNIOR COMPUTER TECHNICIANS AS HAD BEEN EMPLOYED BY THE INCUMBENT CONTRACTOR (10), THE AIR FORCE ERRONEOUSLY REPRESENTED IN ITS REPORT AND OTHER DOCUMENTS THAT YOUR FIRM PROPOSED TO EMPLOY A LARGER NUMBER OF JUNIOR COMPUTER TECHNICIANS.

WE NOTE, HOWEVER, THAT IN THESE STATEMENTS THE OBJECTION WAS THAT THE NUMBER OF JUNIOR TECHNICIANS WAS GREATER IN PROPORTION TO THE NUMBER OF HIGHER GRADED TECHNICIANS. IT IS NOTED THAT SUCH RATIO IS INDEED HIGHER IN YOUR PROPOSAL THAN THAT WHICH WAS OFFERED BY EITHER THE INCUMBENT CONTRACTOR OR THE SUCCESSFUL OFFEROR. WE THEREFORE DO NOT CONSIDER YOUR OBJECTION IN THIS REGARD TO BE WELL FOUNDED.

YOUR PROTEST ALSO UNDERTAKES TO PROVE THAT THE GOVERNMENT FAILED TO EXERCISE ITS BEST JUDGMENT IN REJECTING YOUR PROPOSAL, SINCE YOU BELIEVE THE MANNING PROPOSED BY YOUR FIRM WAS SUFFICIENT AND ACHIEVABLE WITHOUT ANY ADVERSE EFFECT ON THE OPERATION INVOLVED.

GENERALLY, WE HAVE RECOGNIZED IN SIMILAR CASES THAT THE FINAL SELECTION OF A CONTRACTOR UNDER NEGOTIATING PROCEDURES IS LARGELY A MATTER OF JUDGMENT, AND IN THE ABSENCE OF A CLEAR SHOWING THAT DETERMINATION REGARDING THE TECHNICAL ACCEPTABILITY OF A PROPOSAL WAS AN ARBITRARY ABUSE OF DISCRETION OR MADE IN BAD FAITH, THIS OFFICE DOES NOT QUESTION A DEPARTMENT'S DECISION TO REJECT A PROPOSAL CONSIDERED TECHNICALLY INFERIOR, OR UNACCEPTABLE. SEE B-154858, NOVEMBER 6, 1964, AND B-150271, FEBRUARY 4, 1963. IN VIEW OF THE TECHNICAL NATURE OF THE DETERMINATION THAT YOUR PROPOSAL DID NOT EVIDENCE AN ADEQUATE MIX AND QUANTITY OF EMPLOYEES, OUR LACK OF EXPERTISE IN THIS AREA, THE DISCRETION VESTED IN THE CONTRACTING OFFICIALS, AND PARTICULARLY SINCE ALL PROPOSALS APPEAR TO HAVE BEEN EVALUATED ON THE BASIS OF THE SAME CRITERIA, WE CANNOT CONCLUDE THAT SUCH DETERMINATION CONSTITUTED A CLEAR ABUSE OF DISCRETION.

WHILE WE DO NOT QUESTION THE VALIDITY OF THE AWARD MADE IN THIS CASE, WE ARE ADVISING THE SECRETARY OF THE AIR FORCE THAT IN THE LIGHT OF THE QUESTIONABLE ADEQUACY OF THE NEGOTIATING PROCEDURES USED, THE EXERCISE OF THE OPTION IN THE CONTRACT AWARDED WOULD BE CONSIDERED IMPROPER BY OUR OFFICE.