B-169487, JUL. 6, 1970

B-169487, JUL. 6, 1970

CONTRACTS -- BID PROTEST -- COMPETITIVE RANGE DECISION TO EPSCO, INC. DENYING PROTEST AGAINST REJECTION OF TECHNICAL PROPOSAL FOR DESIGN, DEVELOPMENT AND FABRICATION OF AN INTERGRATED TARGET COMMAND CONTROL SYSTEM (ITCS) BY THE NAVAL AIR SYSTEMS COMMAND UNDER NEGOTIATED PROCUREMENT. TO HAVE PERMITTED AN OFFEROR WHOSE TECHNICAL PROPOSAL FOR A COST-PLUS FIXED-FEE RESEARCH AND DEVELOPMENT CONTRACT WHICH CONTAINED MAJOR DEFICIENCIES, TO AN EXTREME BRIEFING AND THEN TO INCORPORATE THE RESULTING MAJOR REVISIONS INTO A NEW SUBMITTAL WOULD BE TANTAMOUNT TO PERMITTING THE SUBMISSION OF A NEW TECHNICAL PURPOSAL WHICH WOULD BE PREJUDICIAL TO THE OTHER PROSPECTIVE OFFERORS WHOSE INITIAL PROPOSALS WERE DETERMINED TO BE IN THE COMPETITIVE RANGE. THEREFORE, REJECTION OF THE PROTEST MUST BE UPHELD.

TO EPSCO, INCORPORATED:

REFERENCE IS MADE TO YOUR TELEGRAMS OF APRIL 3 AND MAY 28 AND LETTERS OF APRIL 27 AND JUNE 18, 1970, PROTESTING AGAINST THE REJECTION OF YOUR OFFER UNDER REQUEST FOR QUOTATIONS (RFQ) NO. N00019-69-Q-0257, ISSUED BY THE NAVAL AIR SYSTEMS COMMAND (NASC), WASHINGTON, D.C.

THE SUBJECT RFQ WAS ISSUED ON OCTOBER 31, 1969, PURSUANT TO THE NEGOTIATION AUTHORITY IN 10 U.S.C. 2304(A)(11), AND SOLICITED TECHNICAL PROPOSALS FOR THE DESIGN, DEVELOPMENT AND FABRICATION OF AN INTEGRATED TARGET COMMAND CONTROL SYSTEM (ITCS). QUOTATIONS, ON A COST-PLUS-FIXED FEE BASIS IN ACCORDANCE WITH THE RFQ, WERE TO BE SUBMITTED TO THE ISSUING OFFICE BY 10 A.M., DECEMBER 2, 1969.

THE PROCUREMENT COVERS EXPERIMENTAL, DEVELOPMENTAL OR RESEARCH WORK AND IS FOR ADVANCED DEVELOPMENT AS DEFINED IN ASPR 4-101(A)(3). THAT DEFINITION READS AS FOLLOWS:

"INCLUDES ALL EFFORT DIRECTED TOWARD PROJECTS WHICH HAVE MOVED INTO THE DEVELOPMENT OF HARDWARE FOR EXPERIMENTAL OR OPERATIONAL TEST. IT IS CHARACTERIZED BY LINE ITEM PROJECTS AND PROGRAM CONTROL IS EXERCISED ON A PROJECT BASIS. A FURTHER DESCRIPTIVE CHARACTERISTIC LIES IN THE DESIGN OF SUCH ITEMS BEING DIRECTED TOWARD HARDWARE FOR TEST OR EXPERIMENTATION AS OPPOSED TO ITEMS DESIGNED AND ENGINEERED FOR EVENTUAL SERVICE USE."

SECTION 44 (3.1) OF THE QUOTATION INSTRUCTIONS AND CONDITIONS REQUIRED THE FOLLOWING TASKS TO BE COVERED BY THE TECHNICAL PROPOSALS:

"A. REQUIREMENTS AND OPERATIONAL SEQUENCE.

B. DESCRIPTION OF TECHNICAL APPROACH.

"C. TECHNICAL TRADE-OFF ANALYSIS (INCLUDING ESTIMATED COST CONSIDERATIONS).

D. DESCRIPTION OF SUBSYSTEMS.

E. LIST OF END ITEMS.

F. FORMULATE AND PRESENT PLANS AND TYPICAL PROCEDURES TO TEST AND EVALUATE THE PROTOTYPE EQUIPMENTS.

G. VALUE ENGINEERING.

H. CONFIGURATION DATA MANAGEMENT.

I. PLANS AND PROCEDURES FOR PREPARING DESIGN APPROVAL.

J. RELIABILITY/MAINTABILITY REQUIREMENTS.

K. TECHNICAL SERVICES.

L. TECHNICAL AND PROGRESS REPORTS.

M. TECHNICAL MANUALS.

N. APPLICATION FOR FREQUENCY ALLOCATION (DD FORM 1494).

O. SAFETY AND HUMAN ENGINEERING."

WHILE A CONTRACT HAS NOT YET BEEN AWARDED UNDER THE RFQ, NASC HAS DETERMINED AFTER A THOROUGH TECHNICAL EVALUATION THAT EPSCO DID NOT SUBMIT AN ACCEPTABLE PROPOSAL. BY LETTER DATED APRIL 2, 1970, THE PROCURING ACTIVITY NOTIFIED YOUR FIRM THAT YOUR PROPOSAL HAD BEEN EVALUATED BY A GOVERNMENT TEAM COMPRISED OF MEMBERS FROM THE ARMY, AIR FORCE AND NAVY, AND THAT THE CONCLUSION OF THE EVALUATION TEAM IS THAT YOUR COMPANY'S PROPOSAL WAS NOT ACCEPTABLE, CONSIDERING YOUR TECHNICAL RESPONSES AND OTHER FACTORS.

YOU CONTEND THAT YOUR TECHNICAL PROPOSAL IS RESPONSIVE TO THE QUOTATION REQUIREMENTS; HOWEVER, YOU AVER THAT THE RFQ REQUIRED APPROACHES TO "POTENTIALLY UNREAL REQUIREMENTS WHICH WHEN CONSIDERED TOGETHER WOULD REQUIRE DISCUSSION OF 'TRADE-OFF'S' BETWEEN THE ACCOMPLISHMENT OF SUCH CAPABILITIES IN THE FORM OF THE QUANTITY OF HARDWARE, COST OF DEVELOPMENT OF SAME AND THE TIME TO ACCOMPLISH DELIVERY." YOU ALSO CONTEND THAT "THE RFQ WAS ABSENT EVALUATION FACTORS."

BY LETTER OF APRIL 27, 1970, YOU REQUESTED THAT WE FURNISH YOU WITH A COPY OF THE DEPARTMENT OF THE NAVY REPORT FOR COMMENT AND REPLY. COMPLIED WITH THAT REQUEST ON MAY 19, 1970. THEREAFTER, BY TELEGRAM OF MAY 28, 1970, YOU REQUESTED THAT MORE SPECIFIC TECHNICAL DETAILS BE FURNISHED BY THE NAVY REGARDING THE REJECTION OF YOUR OFFER. BY OUR LETTER OF JUNE 9 WE FURNISHED YOU WITH A SUPPLEMENTAL NAVY REPORT IN THAT RESPECT, AND BY YOUR LETTER DATED JUNE 18, 1970, WITH CONFIDENTIAL ENCLOSURES, YOU RESPONDED TO THE NAVY'S POSITION ON THE TECHNICAL ASPECTS OF YOUR PROPOSAL.

IN YOUR LETTER OF JUNE 18 YOU SUBMITTED A REBUTTAL DISAGREEING WITH THE TECHNICAL REASONS ADVANCED BY THE NAVY FOR THE REJECTION OF YOUR TECHNICAL PROPOSAL. IN THIS RESPECT, THE NASC HAD DETERMINED THAT YOUR FIRM WAS NOT WITHIN THE COMPETITIVE RANGE, ESTIMATED COST AND FIXED FEE AND TECHNICAL QUALITY CONSIDERED, BECAUSE OF MAJOR DEFICIENCIES IN YOUR TECHNICAL PROPOSAL. A NUMBER OF THESE DEFICIENCIES WERE SET FORTH IN THE NASC REPORT FURNISHED TO YOU AND NEED NOT BE REPEATED HERE. THE PROCURING ACTIVITY VIEWED THESE MAJOR DEFICIENCIES AS SUCH THAT TECHNICAL DISCUSSIONS WITH EPSCO WOULD HAVE BEEN TANTAMOUNT TO PERMITTING YOUR FIRM TO SUBMIT A NEW TECHNICAL PROPOSAL. IN ORDER TO POSSIBLY OBTAIN AN ACCEPTABLE TECHNICAL PROPOSAL FROM EPSCO, AN EXTENSIVE BRIEFING OF YOUR COMPANY WOULD HAVE BEEN REQUIRED BY NAVY TECHNICAL PERSONNEL AND THEN IT WOULD HAVE BEEN NECESSARY TO PERMIT YOU TO INCORPORATE THE RESULTING MAJOR REVISIONS INTO A NEW SUBMITTAL. SUCH ACTION IS NOT REQUIRED BY ASPR 3- 805.1(A) AND MOST CERTAINLY WOULD HAVE PREJUDICED OTHER OFFERORS WHO MIGHT HAVE BEEN IN A COMPETITIVE RANGE BY REASON OF THEIR INITIAL TECHNICAL PROPOSALS.

ASPR 3-805.1(A), ISSUED IN IMPLEMENTATION OF 10 U.S.C. 2304(G), REQUIRES THAT "AFTER RECEIPT OF INITIAL PROPOSALS, WRITTEN OR ORAL DISCUSSIONS SHALL BE CONDUCTED WITH ALL RESPONSIBLE OFFERORS WHO SUBMIT PROPOSALS WITHIN A COMPETITIVE RANGE, PRICE AND OTHER FACTORS (INCLUDING TECHNICAL QUALITY WHERE TECHNICAL PROPOSALS ARE REQUESTED) CONSIDERED." "OTHER FACTORS" HAS BEEN HELD TO INCLUDE THE TECHNICAL ACCEPTABILITY OF PROPOSALS. 46 COMP. GEN. 606 (1967). IN OUR OPINION, A PROPOSAL MUST BE REGARDED AS BEING WITHIN A COMPETITIVE RANGE UNLESS IT IS SO TECHNICALLY DEFICIENT OR OUT OF LINE IN PRICE AS TO PRECLUDE FURTHER MEANINGFUL NEGOTIATIONS. 45 COMP. GEN. 417 (1966); 47 ID. 252 (1967). PARTICULARLY WITH RESPECT TO TECHNICAL CONSIDERATIONS, HOWEVER, WE RECOGNIZE A REASONABLE DEGREE OF ADMINISTRATIVE DISCRETION IS PERMISSIBLE IN DETERMINING WHETHER A PROPOSAL IS WITHIN THE COMPETITIVE RANGE. B-163024, AUGUST 27, 1968. HERE, THE PROCURING ACTIVITY DETERMINED THAT YOUR TECHNICAL PROPOSAL CONTAINED MAJOR DEFICIENCIES, AND WE FIND NO LEGAL BASIS TO DISAGREE WITH THE ADMINISTRATIVE DETERMINATION THAT YOUR PROPOSAL WAS NOT WITHIN A COMPETITIVE RANGE SO AS TO REQUIRE FURTHER DISCUSSION PURSUANT TO ASPR 3-805.1(A). SEE B-168190, FEBRUARY 24, 1970, AND 40 COMP. GEN. 35, 38 (1960).

CONCERNING THE NATURE AND EXTENT OF NEGOTIATIONS TO BE CONDUCTED WITH PROSPECTIVE CONTRACTORS AND THE DETERMINATION AS TO WHETHER INDIVIDUAL PROPOSALS ARE OR ARE NOT WITHIN A "COMPETITIVE RANGE," AND THEREFORE ENTITLED TO NEGOTIATION OPPORTUNITY, THE FOLLOWING STATEMENT IS MADE IN 48 COMP. GEN. 314 (1968):

"WITH REGARD TO THE NATURE AND EXTENT OF NEGOTIATIONS TO BE CONDUCTED WITH OFFERORS, ASPR 3-805.1, IN IMPLEMENTATION OF 10 U.S.C. 2304(G), REQUIRES THAT 'WRITTEN OR ORAL DISCUSSIONS SHALL BE CONDUCTED WITH ALL RESPONSIBLE OFFERORS WHO SUBMIT PROPOSALS WITHIN A COMPETITIVE RANGE, PRICE, AND OTHER FACTORS CONSIDERED.' ALSO, ASPR 3-805.1(A)(V) REQUIRES THAT 'IN ANY CASE WHERE THERE IS UNCERTAINTY AS TO THE PRICING OR TECHNICAL ASPECTS OF ANY PROPOSALS, THE CONTRACTING OFFICER SHALL NOT MAKE AWARD WITHOUT FURTHER EXPLORATION AND DISCUSSION PRIOR TO AWARD.' WHILE OUR OFFICE HAS HELD THAT A PROPOSAL MUST BE CONSIDERED TO BE WITHIN A COMPETITIVE RANGE SO AS TO REQUIRE NEGOTIATIONS UNLESS IT IS SO TECHNICALLY INFERIOR OR OUT OF LINE WITH REGARD TO PRICE THAT MEANINGFUL NEGOTIATIONS ARE PRECLUDED, WE HAVE ALSO RECOGNIZED THAT THE DETERMINATION OF COMPETITIVE RANGE, PARTICULARLY AS REGARDS TECHNICAL CONSIDERATIONS, IS PRIMARILY A MATTER OF ADMINISTRATIVE DISCRETION WHICH WILL NOT BE DISTURBED IN THE ABSENCE OF A CLEAR SHOWING THAT SUCH DETERMINATION WAS AN ARBITRARY ABUSE OF DISCRETION. SEE B-164313 DATED JULY 5, 1968.

"THERE IS VEHEMENT DISAGREEMENT ON THE PART OF THE PROTESTANTS WITH REGARD TO THE TECHNICAL CONCLUSIONS REACHED BY THE EVALUATION TEAM. HOWEVER, IN VIEW OF THE TECHNICAL NATURE OF THE DETERMINATIONS, OUR LACK OF EXPERTISE IN THIS AREA, AND THE WIDE RANGE OF DISCRETION VESTED IN THE CONTRACTING OFFICIALS, WE CANNOT CONCLUDE THAT THE DETERMINATION THAT ONLY ONE PROPOSAL WAS ACCEPTABLE CONSTITUTED A CLEAR ABUSE OF DISCRETION."

WE BELIEVE THAT THE ABOVE REASONING APPLIES EQUALLY HERE. WHILE YOU POINT OUT THAT "THE RFQ WAS ABSENT EVALUATION FACTORS," THE ABOVE QUOTED INSTRUCTIONS AND CONDITIONS REQUIRED THAT CERTAIN TASKS BE COVERED IN THE TECHNICAL PROPOSAL. NASC ADVISED THAT NONE OF THE LISTED TASKS WAS SINGLED OUT FOR SPECIAL CONSIDERATION BUT THAT ITS EMPHASIS IN EVALUATION WAS ON THE SOUNDNESS OF THE OVERALL TECHNICAL APPROACH TO MEET THE SPECIFICATION REQUIREMENTS AS REVEALED BY THE OFFEROR'S TECHNICAL PROPOSAL. THEREFORE, THE ENTIRE TECHNICAL RESPONSES OF OFFERORS WERE EVALUATED TO DETERMINE "COMPETITIVE RANGE" FOR NEGOTIATION PURPOSES. SEE ASPR 4-106.4 WHICH SETS FORTH THE CRITERIA FOR EVALUATION AND AWARD OF RESEARCH AND DEVELOPMENT CONTRACTS.

ACCORDINGLY, ON THE RECORD BEFORE US, WE CANNOT CONCLUDE THAT THE REJECTION OF YOUR FIRM'S TECHNICAL PROPOSAL AS NOT BEING "WITHIN A COMPETITIVE RANGE" IS SUBJECT TO QUESTION BY OUR OFFICE. YOUR PROTEST IS THEREFORE DENIED.