B-168671, MAR. 2, 1970

B-168671, MAR. 2, 1970

CONTRACTS--NEGOTIATION--LIMITATION ON NEGOTIATION--PROPRIETY UNDER NEGOTIATED REPROCUREMENT, OFFEROR WHO WAS DISPLACED WHEN NEGOTIATIONS WERE REOPENED AFTER RECEIPT OF VOLUNTARILY OFFERED PRICE REDUCTION $5 LOWER THAN PROTESTANT'S INITIAL PRICE PER UNIT, AND WHO ALLEGES PROCEDURE USED THEREUNDER APPROACHED AUCTION TECHNIQUE PROHIBITED BY ARMED SERVICES PROCUREMENT REGULATION 3-805.1 (B), AND QUESTIONS NEED TO REOPEN NEGOTIATIONS, IS DENIED PROTEST SINCE RECORD FAILS TO EVIDENCE ANY ILLEGAL AUCTION TECHNIQUES SUCH AS EXPOSING PROTESTANT'S PRICE OR COMPETITIVE POSITION, AND CONSIDERABLE LATITUDE IS GIVEN CONTRACTING OFFICER IN REPROCUREMENT ACTIONS, SUBJECT TO RESTRICTION THAT ACTION BE REASONABLE AND CONSISTENT WITH DUTY TO MITIGATE DEFAULTED CONTRACTOR'S DAMAGES. UNDER SUCH CIRCUMSTANCES, ALTHOUGH REDUCED PRICE MAY NOT BE SIGNIFICANT IN TERMS OF SAVINGS TO GOVERNMENT, DECISION TO REOPEN WAS BOTH PROPER AND REQUIRED. SEE COMP. GEN. DECS. CITED.

TO SOUTHERN METALS COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 17, 1969, TO THE CONTRACTING OFFICER, REDSTONE ARSENAL, ALABAMA, AND LETTER DATED JANUARY 14, 1970, TO OUR OFFICE, PROTESTING THE ALLEGED FAILURE OF THE CONTRACTING OFFICER TO ACCEPT YOUR COMPANY'S OFFERED REDUCTION IN PRICE UNDER REQUEST FOR PROPOSALS (RFP) NO. DAAH01-70-R-0273, ISSUED BY THE UNITED STATES ARMY MISSILE COMMAND, REDSTONE ARSENAL, ALABAMA.

THE REQUEST FOR PROPOSALS (RFP), ISSUED ON SEPTEMBER 17, 1969, SOLICITED OFFERS FOR THE DELIVERY OF 44 CHAPARRAL GROUND EMPLACEMENT KITS WITHIN A REQUIRED DELIVERY SCHEDULE WHICH OFFERORS WERE ENCOURAGED TO BETTER IN RESPONDING TO THE RFP. THE PROCUREMENT WAS A NEGOTIATED REPURCHASE ACTION FOR THE ACCOUNT OF A DEFAULTED CONTRACTOR UNDER A PREVIOUSLY FORMALLY ADVERTISED SOLICITATION IN ACCORDANCE WITH PARAGRAPH 8-602.6 (B) OF THE ARMED SERVICES PROCUREMENT REGULATION, FOR THE SAME QUANTITY OF KITS, UNDER AN IDENTICAL ITEM DESCRIPTION, WITH A SIMILAR DELIVERY SCHEDULE. THE RFP ESTABLISHED OCTOBER 8, 1969, AS THE DATE FOR RECEIPT OF OFFERS. IT IS REPORTED THAT 17 FIRMS, INCLUDING ALL OF THE UNSUCCESSFUL BIDDERS ON THE ORIGINAL INVITATION, WERE SOLICITED; YOUR COMPANY, WHICH WAS NOT ON THE BIDDERS' LIST, REQUESTED AND RECEIVED COPIES OF THE RFP. SIXTEEN PROPOSALS WERE RECEIVED IN RESPONSE TO THE RFP RANGING IN UNIT PRICE FROM $206 TO $4,475. THE LOWEST PRICED OFFER OF $206 WAS PERMITTED TO BE WITHDRAWN BECAUSE OF APPARENT ERROR IN PRICE. A "ZONE OF CONSIDERATION" WAS ESTABLISHED ON THE BASIS OF 120 PERCENT OF THE LOWEST RESPONSIVE OFFER. NEGOTIATIONS WERE OPENED ON OCTOBER 17, 1969, AND ALL OFFERORS WERE ADVISED THAT NEGOTIATIONS WOULD CLOSE ON OCTOBER 20, 1969, AT 4:30 P.M. FOLLOWING THIS ROUND OF NEGOTIATIONS THE FOLLOWING OFFERORS REMAINED WITHIN THE ZONE OF CONSIDERATION: LOVEQUIST MFG; INC. (LOVEQUIST) $965.00 PER UNIT MCCAY TOOL AND ENGINEERING COMPANY (MCCAY)

941.25 PER UNIT SOUTHERN METALS COMPANY 940.00 PER UNIT

WHILE THE CONTRACTING OFFICER WAS STILL IN THE PROCESS OF EVALUATING THE RESPECTIVE OFFERORS' RESPONSIBILITIES, THE THEN THIRD LOW OFFEROR, LOVEQUIST, ON ITS OWN INITIATIVE, INFORMED THE CONTRACTING OFFICER ON NOVEMBER 4, 1969, THAT ITS UNIT PRICE COULD BE REDUCED BY $30 PER UNIT TO $935 PER UNIT. IN LIGHT OF THIS OFFERED REDUCTION IN UNIT PRICE, THE CONTRACTING OFFICER REOPENED NEGOTIATIONS BY TELEPHONE ON NOVEMBER 5, 1969, WITH THE THREE FIRMS THAT HAD BEEN DETERMINED TO BE WITHIN THE ZONE OF CONSIDERATION. IT IS REPORTED THAT BOTH MCCAY AND YOUR COMPANY REMAINED FIRM ON BOTH ITEM UNIT PRICES AND PROPOSED DELIVERY SCHEDULE. BASED ON THE FOREGOING, AWARD WAS MADE ON DECEMBER 10, 1969, TO LOVEQUIST AT A UNIT PRICE OF $935, OR A TOTAL CONTRACT PRICE OF $41,140.

YOUR COMPANY, AFTER RECEIVING NOTIFICATION OF THE AWARD ON DECEMBER 13, 1969, OBJECTED THAT IT HAD NOT BEEN INFORMED OF THE FACT THAT NEGOTIATIONS HAD BEEN CLOSED AS REQUIRED BY ASPR 3-805.1(B) AND, IN LIGHT OF THIS FACT, THE GOVERNMENT SHOULD ACCEPT A MODIFICATION OF YOUR PREVIOUS OFFER OF $940 PER UNIT TO A REVISED AMOUNT OF $901 PER UNIT FOR A TOTAL CONTRACT PRICE OF $39,644. THE CONTRACTING OFFICER CONSIDERED YOUR REVISED OFFER, RECEIVED SUBSEQUENT TO THE CLOSE OF NEGOTIATIONS AND AWARD, AS A LATE MODIFICATION TO A PROPOSAL WHICH COULD NOT BE CONSIDERED. IN ADDITION, YOU STATE THAT THE CONTRACTING OFFICE IN ITS "EVER PRESENT WILLINGNESS * * * TO ACCEPT REVISIONS AFTER AN ANNOUNCED CLOSING" LED YOU TO BELIEVE THAT IT ATTACHED LITTLE OR NO SIGNIFICANCE TO THE REQUIREMENTS OF ASPR 3-805.1 (B). YOU CONTINUE BY OBSERVING THAT "THE FACT THAT NEGOTIATIONS WERE RE- OPENED SIXTEEN DAYS AFTER CLOSING FOR A VERY MINIMAL TWENTY-FOUR (HOUR) PERIOD" CONFIRMS YOUR BELIEF IN THE CONTRACTING OFFICER'S DISREGARD OF THE REGULATION. YOU URGE THAT THE PROCEDURES WOULD SEEM TO APPROACH THE AUCTION TECHNIQUE SPECIFICALLY PROHIBITED BY ASPR 3-805.1 (B). IN THIS REGARD, YOU ALSO REQUEST INFORMATION REGARDING THE ACTIVITY'S POLICIES CONCERNING THE REOPENING OF NEGOTIATIONS; SPECIFICALLY, "WHAT JUSTIFICATION IS NECESSARY, HOW OFTEN THEY CAN BE RE-OPENED AND THE MINIMUM TIME FOR REMAINING OPEN," INCLUDING THE DEFINITION OF A CLOSE OF NEGOTIATION SITUATION. YOU OBSERVE THAT THE SHORT OPEN PERIOD FOR NEGOTIATIONS FOLLOWING THE RELATIVELY LONG PERIOD DURING WHICH NEGOTIATIONS WERE CLOSED RAISES THE QUESTION AS TO WHETHER THE INITIATIVE FOR LOVEQUIST'S REVISED OFFER WAS SUPPLIED BY THE COMMAND OR LOVEQUIST, INFERRING THAT THE COMMAND, IN FACT, SUPPLIED INFORMATION TO THE CONTRACTOR. YOU ALSO "NOTE THE SIMILARITY BETWEEN THE IMPROVED DELIVERY SCHEDULE OFFERED BY ME IN MY ORIGINAL BID AND THE DELIVERY SCHEDULE FINALLY PUT ON CONTRACT." IN CONCLUSION, YOU QUESTION THE ACTIVITY'S REFUSAL TO ISSUE A STOP-WORK ORDER AT YOUR REQUEST UPON THE FILING OF YOUR PROTEST, CITING YOUR TAKEOVER OF THE DEFAULTED CONTRACTOR'S STOCK AND THE FACT THAT YOUR COMPANY WAS IN THE PROCESS OF ASSEMBLING THE SOLICITED KITS IN LATE SEPTEMBER 1969.

IN RESPONSE TO YOUR CONTENTIONS, THE CONTRACTING OFFICER, IN EXPLAINING HIS DECISION TO REOPEN NEGOTIATIONS, UPON KNOWLEDGE OF AN OFFEROR'S DESIRE TO REVISE HIS PRICE BELOW THAT OF THE LOWEST OFFEROR'S PRICE, STATED, IN HIS FINDINGS, AS FOLLOWS:

"REASON FOR RE-OPENING NEGOTIATIONS: THE OVER-RIDING CONSIDERATION IN THE DECISION TO RE-OPEN NEGOTIATIONS WAS THE CONTRACTING OFFICER'S DUTY TO MITIGATE THE DAMAGES AGAINST THE DEFAULTED CONTRACTOR. AT THE CLOSE OF THE FIRST ROUND, SOUTHERN METALS' QUOTE WAS $940.00 EACH, WHILE LOVEQUIST QUOTED AT $965.00. LOVEQUIST TELEPHONED THE NEGOTIATOR ON 4 NOVEMBER 1969 WITH A QUOTE OF $935.00. WHILE IT WAS REALIZED THAT THE PRICE DIFFERENCE WAS COMPARATIVELY LOW, IT WAS OBVIOUS THAT SOUTHERN METALS SHOULD HAVE HAD KNOWLEDGE OF THE $900.30 UNIT PRICE ON THE DEFAULTED CONTRACT, AND THAT A RE-OPENING MIGHT RESULT IN A PRICE CLOSER TO THAT OF THE ORIGINAL CONTRACT. NEVERTHELESS, THE OVERRIDING CONSIDERATION WAS THE RESPONSIBILITY TO COMPLY WITH THE REQUIREMENT OF ASPR 8-602.6 THAT THE REPURCHASE BE MADE AT 'AS REASONABLE A PRICE AS PRACTICABLE', THEREBY MITIGATING DAMAGES AS MENTIONED ABOVE."

WITH RESPECT TO YOUR CONTENTION THAT YOUR COMPANY WAS NOT NOTIFIED THAT THE NEGOTIATIONS WERE TO BE CLOSED ON NOVEMBER 6, 1969, THE CONTRACTING OFFICER HAS STATED THAT WHEN NEGOTIATIONS WERE REOPENED ON NOVEMBER 5, 1969, ALL OFFERORS WITHIN THE ZONE OF CONSIDERATION, INCLUDING YOUR COMPANY, WERE SPECIFICALLY ADVISED THAT NEGOTIATIONS WOULD CLOSE AT NOON ON NOVEMBER 6, 1969. HE NOTES ALSO THAT YOUR COMPANY WAS FURTHER ADVISED OF THE FACT THAT NEGOTIATIONS WERE CLOSED ON NOVEMBER 6 DURING A TELEPHONE CONVERSATION ON NOVEMBER 19, 1969.

AS FOR YOUR CONTENTION REGARDING THE REFUSAL TO ISSUE A "STOPWORK" ORDER, THE CONTRACTING OFFICER STATED THAT ON DECEMBER 22, 1969, 3DAYS AFTER THE RECEIPT OF YOUR ORIGINAL PROTEST LETTER, A TELEPHONIC COMMUNICATION, FROM THE ACTIVITY WHICH WILL UTILIZE THE PROCURED ITEMS, ADVISED THAT THE CONTRACT'S PROGRESS WAS BEING CAREFULLY MONITORED, AND THAT TIMELY DELIVERY WAS OF THE ESSENCE IN ORDER TO MEET FIELD REQUIREMENTS. CONCLUDES, BY STATING THAT THE "STOPWORK" ORDER WOULD HAVE SERIOUSLY DELAYED PRODUCTION SO AS TO ADVERSELY AFFECT THE CONTRACT DELIVERY SCHEDULE.

IT SHOULD BE NOTED AT THIS POINT THAT THE TWO MAIN PURPOSES OF A REPURCHASE CONTRACT PURSUANT TO ASPR 8-602.6 ARE (1) TO OBTAIN THE ORIGINALLY SOLICITED ITEMS FOR GOVERNMENT USE, AND (2) TO SERVE AS A METHOD OF COMPUTING THE GOVERNMENT'S DAMAGES, IF ANY. SEE ASPR 8 602.6; B -165884, MAY 28, 1969. A REPURCHASE PROCUREMENT IS NOT A PURCHASE ON BEHALF OF THE GOVERNMENT BUT A PURCHASE FOR THE ACCOUNT OF THE DEFAULTED CONTRACTOR. A CONTRACTING OFFICER MUST CARRY OUT THE OBLIGATION ON THE PART OF THE GOVERNMENT TO MITIGATE DAMAGES, WHENEVER POSSIBLE. B-145588, JULY 7, 1961; B-165884, SUPRA; 42 COMP. GEN. 493, 494 (1963). WE HAVE HELD THAT "CONSIDERABLE LATITUDE" IS GIVEN CONTRACTING OFFICERS IN REPURCHASE ACTIONS, SUBJECTING THEM ONLY TO THE RESTRICTION THAT WHATEVER ACTIONS THEY TAKE MUST BE REASONABLE IN DECIDING THE COURSE THE REPURCHASE PROCUREMENT SHALL TAKE, AS LONG AS IT IS CONSISTENT WITH THE DUTY TO MITIGATE DAMAGES. B-165884, SUPRA. IN THIS REGARD ALSO, ASPR 7-103.1 (B), REFERRING TO A REPURCHASE ACTION AFTER CONTRACT DEFAULT, ALLOWS THE REPROCUREMENT TO BE UPON SUCH TERMS AND IN SUCH MANNER AS THE CONTRACTING OFFICER MAY DEEM APPROPRIATE.

WITH RESPECT TO YOUR ALLEGATION THAT, IN YOUR VARIOUS COMMUNICATIONS WITH THE CONTRACTING OFFICE, YOU WERE NOT INFORMED WHEN THE NEGOTIATIONS WOULD BE FINALLY CLOSED, WE HAVE REVIEWED THE RECORD WITH PARTICULAR RESPECT TO THE CONVERSATIONS BETWEEN THE GOVERNMENT NEGOTIATOR AND THE PRESIDENT OF YOUR COMPANY, AND YOUR VERSION OF THE PHONE CALLS, AND WE CONCLUDE THAT THE RECORD DISCLOSES A CLEAR DISPUTE OF FACT WITH REGARD TO WHETHER YOUR COMPANY WAS NOTIFIED OF THE CLOSE OF NEGOTIATIONS. WE OBSERVE, HOWEVER, THAT YOUR COMPANY DID ADVISE, BEFORE NEGOTIATIONS WERE FINALLY CLOSED ON NOVEMBER 6, THAT YOUR PRICE WOULD REMAIN FIRM. CLEARLY, ASPR 3-805.1 (B) REQUIRES THAT OFFERORS BE INFORMED OF THE SPECIFIED DATE AND TIME OF THE CLOSING OF NEGOTIATIONS. IN THE ABSENCE OF SUBSTANTIAL EVIDENCE TO THE CONTRARY, WE ARE CONSTRAINED TO ACCEPT THE VERSION OF THE ADMINISTRATIVE REPORT WITH RESPECT TO THIS DISPUTED FACTUAL SITUATION. 40 COMP. GEN. 178, 180 (1960) AND CASES CITED THEREIN. THEREFORE, WE WILL CONFINE OUR REVIEW TO THE FACTS AS PRESENTED BY THE CONTRACTING ACTIVITY.

ASPR 3-805.1 (B) STATES AS FOLLOWS:

"(B) WHENEVER NEGOTIATIONS ARE CONDUCTED WITH MORE THAN ONE OFFEROR, AUCTION TECHNIQUES ARE STRICTLY PROHIBITED; AN EXAMPLE WOULD BE INDICATING TO AN OFFEROR A PRICE WHICH MUST BE MET TO OBTAIN FURTHER CONSIDERATION, OR INFORMING HIM THAT HIS PRICE IS NOT LOW IN RELATION TO THAT OF ANOTHER OFFEROR. ON THE OTHER HAND, IT IS PERMISSIBLE TO INFORM AN OFFEROR THAT HIS PRICE IS CONSIDERED BY THE GOVERNMENT TO BE TOO HIGH. AFTER RECEIPT OF PROPOSALS, NO INFORMATION REGARDING THE NUMBER OR IDENTITY OF THE OFFERORS PARTICIPATING IN THE NEGOTIATIONS SHALL BE MADE AVAILABLE TO THE PUBLIC OR TO ANY ONE WHOSE OFFICIAL DUTIES DO NOT REQUIRE SUCH KNOWLEDGE. WHENEVER NEGOTIATIONS ARE CONDUCTED WITH SEVERAL OFFERORS, WHILE SUCH NEGOTIATIONS MAY BE CONDUCTED SUCCESSIVELY, ALL OFFERORS SELECTED TO PARTICIPATE IN SUCH NEGOTIATIONS (SEE (A) ABOVE) SHALL BE OFFERED AN EQUITABLE OPPORTUNITY TO SUBMIT SUCH PRICE, TECHNICAL, OR OTHER REVISIONS IN THEIR PROPOSALS AS MAY RESULT FROM THE NEGOTIATIONS. ALL SUCH OFFERORS SHALL BE INFORMED OF THE SPECIFIED DATE (AND TIME IF DESIRED) OF THE CLOSING OF NEGOTIATIONS AND THAT ANY REVISIONS TO THEIR PROPOSALS MUST BE SUBMITTED BY THAT DATE. ALL SUCH OFFERORS SHALL BE INFORMED THAT ANY REVISION RECEIVED AFTER SUCH DATE SHALL BE TREATED AS A LATE PROPOSAL IN ACCORDANCE WITH THE 'LATE PROPOSALS' PROVISIONS OF THE REQUEST FOR PROPOSALS. (IN THE EXCEPTIONAL CIRCUMSTANCES WHERE THE SECRETARY CONCERNED AUTHORIZES CONSIDERATION OF SUCH A LATE PROPOSAL, RESOLICITATION SHALL BE LIMITED TO THE SELECTED OFFERORS WITH WHOM NEGOTIATIONS HAVE BEEN CONDUCTED.) IN ADDITION, ALL SUCH OFFERORS SHALL ALSO BE INFORMED THAT AFTER THE SPECIFIED DATE FOR THE CLOSING OF NEGOTIATION NO INFORMATION OTHER THAN NOTICE OF UNACCEPTABILITY OF PROPOSAL, IF APPLICABLE (SEE 3- 508), WILL BE FURNISHED TO ANY OFFEROR UNTIL AWARD HAS BEEN MADE."

OUR OFFICE HAS HELD THAT IN THE FACE OF A SIGNIFICANT PRICE REDUCTION, TENDERED BY A COMPETITIVELY SITUATED OFFEROR, NEGOTIATIONS MAY BE REOPENED, EVEN THOUGH THE CLOSING DATE FOR NEGOTIATIONS HAS PASSED. IN 47 COMP. GEN. 279 (1967), WHEREIN A LATE PRICE REDUCTION WAS RECEIVED AND NOT CONSIDERED BY THE CONTRACTING OFFICER, WE HELD THAT THE PROVISIONS IN ASPR 3-506 PROHIBITING THE ACCEPTANCE OF A LATE MODIFICATION OR OFFER, EXCEPT UNDER CERTAIN CIRCUMSTANCES, WERE NEVER INTENDED TO "PRECLUDE THE OPENING- UP OF NEGOTIATIONS WITH ALL OFFERORS COMPETITIVELY SITUATED UPON THE RECEIPT OF A LATE MODIFICATION TO A TIMELY OFFER WHICH FAIRLY INDICATES THAT SUCH NEGOTIATIONS WOULD PROVE TO BE HIGHLY ADVANTAGEOUS TO THE GOVERNMENT." SEE, ALSO, B-168085, DECEMBER 29, 1969. WE HAVE OBSERVED THAT NEGOTIATION PROCEDURES, UNLIKE THOSE REQUIRED FOR FORMAL ADVERTISING, ARE DESIGNED TO BE FLEXIBLE AND INFORMAL, PERMITTING A CONTRACTING OFFICER TO DO THINGS IN THE AWARDING OF NEGOTIATED CONTRACTS THAT WOULD BE A RADICAL VIOLATION OF THE LAW IF THE PROCUREMENT WAS BEING ACCOMPLISHED BY FORMAL ADVERTISING. 47 ID. 279, 283, 284. IN RESPONSE TO YOUR ALLEGATION THAT ILLEGAL AUCTION TECHNIQUES MAY HAVE BEEN EMPLOYED BY THE CONTRACTING OFFICE, OUR INVESTIGATION OF THE MATTER HAS UNCOVERED NO EVIDENCE TO INDICATE THAT PERSONNEL AT THE PROCURING ACTIVITY, EITHER PURPOSELY OR ACCIDENTALLY, EXPOSED EITHER YOUR PRICE OR COMPETITIVE POSITION TO LOVEQUIST OR TO ANY OTHER OFFEROR PRIOR TO THE AWARD OF THE CONTRACT. CONTINUING IN THIS VEIN, OUR DECISION AT 48 COMP. GEN. 323 (1968) APPROVED THE HOLDING IN 47 COMP. GEN. 279, SUPRA, IN DECIDING THAT WE DID NOT CONSIDER A PROHIBITED AUCTION TECHNIQUE TO BE A SITUATION WHERE NEGOTIATION FOR LOWER PRICES WAS PROMPTED BY AN UNSOLICITED PRICE REVISION RECEIVED SUBSEQUENT TO THE INITIATION OF A PREAWARD SURVEY OF THE THEN LOW OFFEROR. IN LIGHT OF THE FOREGOING, WE CONCLUDE THAT THE DECISION OF THE CONTRACTING OFFICER TO REOPEN NEGOTIATIONS WAS BOTH PROPER AND REQUIRED UNDER CIRCUMSTANCES PRESENT HERE -- WHERE A PRIMARY CONCERN IS TO MITIGATE AS FAR AS POSSIBLE THE DAMAGES OF A DEFAULTED CONTRACTOR. OUR REVIEW OF THE RECORD REVEALS THAT ALL OFFERORS DURING THE REOPENED NEGOTIATIONS WERE TREATED IMPARTIALLY AND FAIRLY DURING THE PERIOD NEGOTIATIONS WERE REOPENED WHEN THEY WERE AFFORDED EQUAL OPPORTUNITIES TO OFFER PROPOSAL OR PRICE REVISIONS. IN PRIOR DECISIONS, WE HAVE CONSIDERED THE NATURE AND EXTENT OF THE INFORMATION REQUIRED TO BE GIVEN IN A NOTICE TO OFFERORS OF THE FINAL DATE FOR THE SUBMISSION OF PROPOSAL MODIFICATIONS. SEE 48 COMP. GEN.--- (B-165988, MARCH 11, 1969); 48 COMP. GEN. 536 (1969); AND 48 COMP. GEN. 449 (1968). THESE DECISIONS HELD THAT OFFERORS SHOULD BE ADVISED THAT (1) NEGOTIATIONS ARE BEING CONDUCTED; (2) OFFERORS ARE BEING ASKED FOR THEIR "BEST AND FINAL" OFFER, NOT MERELY TO CONFIRM OR RECONFIRM PRIOR OFFERS; AND (3) ANY REVISION MUST BE SUBMITTED BY THE DATE SPECIFIED TO BE CONSIDERED. SEE, ALSO, B-166019, AUGUST 1, 1969. WE CANNOT AGREE, ON THE RECORD, THAT YOUR COMPANY WAS NOT GIVEN AN EQUAL NEGOTIATION OPPORTUNITY IN THE INSTANT PROCUREMENT. YOUR COMPANY'S RETURN PHONE CALL ON NOVEMBER 6 BEFORE NEGOTIATIONS WERE FINALLY CLOSED WOULD SEEM TO DISPOSE OF ANY POSSIBILITY OF PREJUDICE TO YOUR COMPANY.

YOU QUESTION THE PROPRIETY OF THE CONTRACTING OFFICER'S ACTION IN FIXING A 1-DAY PERIOD FOR THE REOPENING OF NEGOTIATIONS. YOU ASK, IS THERE A MINIMUM TIME FOR NEGOTIATIONS TO REMAIN OPEN UNDER THESE CIRCUMSTANCES? IN B-167389, FEBRUARY 12, 1970, WE RECOGNIZED THE GENERAL PRINCIPLE THAT NEGOTIATED PROCUREMENTS ARE NECESSARILY FLEXIBLE AND FOUND NO PROVISION OF STATUTE OR REGULATION, NOR LANGUAGE IN ANY OF OUR DECISIONS, WHICH PROVIDES A MINIMUM TIME FOR THE SUBMISSION OF A "BEST AND FINAL" OFFER. WE STATED THAT IT WOULD BE "CLEARLY PREFERABLE" TO LEAVE THE ESTABLISHMENT OF A MINIMUM TIME FOR SUBMISSION OF PRICE REVISIONS TO PROCUREMENT OFFICIALS AS MAY BE REQUIRED BY THE FACTS AND CIRCUMSTANCES OF THE INDIVIDUAL CASE. IN 49 COMP. GEN. (B-167185, SEPTEMBER 3, 1969) A RESPONSE, REQUIRED WITHIN 3 HOURS OF A REQUESTED PRICE REVISION, WAS FOUND TO BE NOT LEGALLY INADEQUATE UNDER THE CIRCUMSTANCES. THE FACTS OF THE INSTANT CASE OBVIATE ANY CLAIM OF THE INABILITY OF YOUR COMPANY TO HAVE HAD SUFFICIENT TIME TO SUBMIT A PRICE REVISION. IN B-167389, SUPRA, WE REPEATED THE APPLICABLE STANDARD OF REVIEW AS BEING ONE OF REASONABLENESS UNDER THE CIRCUMSTANCES, IN WHICH WE CONFINED OUR INQUIRY AS TO WHETHER, AS A MATTER OF LAW, THE PERIOD OF TIME AFFORDED WAS UNREASONABLE AND PREJUDICIAL TO A COMPETITIVELY SITUATED OFFEROR. SEE THE CASES CITED THEREIN, PARTICULARLY B-163630, APRIL 22, 1968. WE CANNOT SAY THAT THE PERIOD OF TIME HERE WAS UNREASONABLE AND PREJUDICIAL UNDER THE CIRCUMSTANCES OF THE PROCUREMENT.

YOU WOULD "LIKE A DEFINITION OF A 'CLOSED' SITUATION." THIS IS SIMILAR TO POINTS RAISED BY OFFERORS AND BIDDERS IN THE PAST, WHO HAVE FOUND THEMSELVES UNABLE TO ASCERTAIN WHETHER A LATE MODIFICATION TO A PROPOSAL, I.E; SUBMISSION OF A MODIFICATION AFTER THE DATE SET BY THE CONTRACTING OFFICER FOR THE CLOSE OF NEGOTIATIONS, WILL BE REGARDED BY THE CONTRACTING OFFICIALS AS AN UNACCEPTABLE LATE PROPOSAL UNDER ASPR 3-506, OR AS A BASIS FOR REOPENING NEGOTIATIONS. ASPR 3-506 DOES OPERATE TO PRECLUDE, WITH SOME EXCEPTIONS, NOT HEREIN APPLICABLE, ACCEPTANCE OF A LATE OFFER OR MODIFICATION. IN THIS REGARD, SEE PARAGRAPH XXX (A) OF THE INSTANT RFP. HOWEVER, WE HAVE HELD THAT IF INITIAL, OR FURTHER, NEGOTIATIONS WILL PROVE TO BE HIGHLY ADVANTAGEOUS TO THE GOVERNMENT, THE REOPENING OF NEGOTIATIONS WOULD BE PROPER. B 167281, NOVEMBER 13, 1969. ALTHOUGH, ADMITTEDLY, THE PARTICULAR MONETARY REDUCTION IN PRICE FROM YOUR OFFERED PRICE WAS NOT SIGNIFICANT IN TERMS OF SAVINGS TO THE GOVERNMENT, IN LIGHT OF THE REQUIREMENT FOR THE MITIGATION OF DAMAGES IN THE CASE OF REPROCUREMENT AFTER DEFAULT, THE PRICE REDUCTION DOES HAVE SOME EFFECT. BUT OUR DECISIONS RECOGNIZE THAT THERE MUST BE SOME EVENTUAL CUTOFF OR CLOSING DATE FROM WHICH ALL FURTHER MODIFICATIONS WILL BE REJECTED. SEE B 164253, JULY 24, 1968; 41 COMP. GEN. 351, 359 (1961).

WE AGAIN DRAW YOUR ATTENTION TO THE RFP PROVISIONS WHICH PRECLUDED ANY MODIFICATION OF PROPOSALS AFTER AWARD. CLEARLY, AN OFFEROR CANNOT REASONABLY EXPECT TO HAVE A LATE REVISED PROPOSAL CONSIDERED 1 WEEK AFTER AWARD OF A CONTRACT.