B-170216, SEP. 10, 1970

B-170216, SEP. 10, 1970

BID PROTEST - NEGOTIATION - REVISED REQUIREMENTS DENIAL OF PROTEST OF LITTON BUSINESS SYSTEMS, INC., HIGH OFFEROR, AMONG FOUR, AGAINST THE AWARD OF CONTRACT TO BURROUGH CORPORATION, LOW OFFEROR UNDER REVISED RFP FOR PURCHASE OR LEASE OF DATA AUTOMATION EQUIPMENT, BY OFFICE OF MANAGEMENT SERVICES, DEPT. OF AGRICULTURE. A HIGH OFFEROR WHO, AFTER SUBMITTING INITIAL PROPOSAL BASED ON SUPPLYING ADP EQUIPMENT HAVING REQUIRED MINIMUM PRINTING CAPABILITY, WAS GIVEN OPPORTUNITY TO AMEND PROPOSAL ON BASIS OF A REDUCED PRINTING CAPABILITY AND DID ORALLY REVISE PRICE WAS NOT PREJUDICED BY ABSENCE OF A WRITTEN VERIFICATION OF THE CHANGED REQUIREMENTS. SINCE THE AWARD WAS MADE TO THE LOWEST OFFEROR MEETING THE REVISED REQUIREMENTS NO OBJECTION TO AWARD IS MADE.

TO LITTON BUSINESS SYSTEMS, INC.:

REFERENCE IS MADE TO YOUR TELEGRAM OF JULY 1, 1970, AND SUBSEQUENT COMMUNICATIONS, PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANOTHER FIRM UNDER REQUEST FOR PROPOSALS (RFP) OMS-2-B-70, ISSUED ON JUNE 1, 1970, BY THE OFFICE OF MANAGEMENT SERVICES, DEPARTMENT OF AGRICULTURE.

THE RFP WAS FOR THE PURCHASE OR LEASE OF SOURCE DATA AUTOMATION EQUIPMENT TO BE INSTALLED IN THE OFFICE OF MANAGEMENT SERVICES. PROPOSALS RECEIVED FROM THE FOLLOWING FOUR COMPANIES WERE OPENED ON JUNE 18, 1970:

AUTOMATED BUSINESS SYSTEMS

DIVISION OF LITTON INDUSTRIES (LITTON)

BURROUGHS CORPORATION (BURROUGHS)

DURA DIVISION

INTERCONTINENTAL SYSTEMS, INC. (DURA)

SINGER, FRIDEN DIVISION (FRIDEN)

LITTON'S PROPOSAL MET ALL OF THE REQUIREMENTS OF THE RFP BUT THE MACHINES OFFERED BY DURA, FRIDEN AND BURROUGHS FAILED TO MEET THE MINIMUM PRINTING RATE OF 25 CHARACTERS PER SECOND (CPS). HOWEVER, LITTON'S QUOTED PRICE OF $59,970.75 WAS CONSIDERED TO BE HIGH. THE PRINTING RATE REQUIREMENT OF 25 CPS WAS ORIGINALLY ESTABLISHED BY THE AGENCY'S TECHNICAL PEOPLE BASED ON AN ANTICIPATED INCREASED AND EXPANDED VOLUME OF WORK, AND IT WAS BELIEVED THAT THERE WOULD BE ADEQUATE COMPETITION ON A 25 CPS MACHINE. AFTER THE PROPOSALS WERE OPENED IT WAS APPARENT THAT ADEQUATE COMPETITION COULD NOT BE OBTAINED FOR A 25 CPS MACHINE. BURROUGHS' PROPOSAL OFFERED A 20 CPS MACHINE WHILE DURA AND FRIDEN OFFERED MACHINES OF 15.4 CPS AND 12.5 CPS, RESPECTIVELY. THE 25 CPS REQUIREMENT WAS REEVALUATED AND IT WAS DETERMINED THAT A PRINTING RATE OF 20 CPS WOULD MEET THE AGENCY'S MINIMUM NEEDS, BUT A PRINTING RATE OF LESS THAN 20 CPS WOULD NOT BE SUFFICIENT.

ON JUNE 25, 1970, A LITTON REPRESENTATIVE WAS CONTACTED BY TELEPHONE AND ADVISED OF THE PROCURING ACTIVITY'S REDUCTION IN ITS PRINTING RATE REQUIREMENT FROM 25 CPS TO 20 CPS. THE REPRESENTATIVE WAS ASKED WHAT DIFFERENCE THE CHANGE WOULD MAKE IN THE LITTON PROPOSAL, AND THE REPRESENTATIVE STATED THAT INSTEAD OF OFFERING ITS MODEL 1231, LITTON WOULD OFFER ITS MODEL 1230. LATER THE SAME DAY THE REPRESENTATIVE CALLED AND STATED THAT THE MODEL 1230 HAD BEEN REDUCED IN PRICE. LITTON'S REVISED QUOTE OF $51,036.75 EXCEEDED BURROUGHS' QUOTE OF $39,634.67 BY $11,402.08. THEREFORE, BURROUGHS WAS DETERMINED TO BE THE LOW RESPONSIVE OFFEROR ON THE NEW REQUIREMENTS, AND A CONTRACT WAS AWARDED TO THAT FIRM ON JUNE 26, 1970.

IN YOUR TELEGRAM OF JULY 1, YOU CONTEND THAT (1) THE TWO REMAINING BIDDERS (DURA AND FRIDEN) SHOULD HAVE BEEN CONTACTED AFTER THE DOWNGRADING OF THE PRINTING RATE REQUIREMENT AND REQUESTED TO RESUBMIT NEW BIDS ON THE CHANGED SPECIFICATIONS; (2) BURROUGHS WAS A NONRESPONSIVE BIDDER AND SHOULD NOT BE AWARDED THE CONTRACT; AND (3) LITTON WAS THE SOLE RESPONSIBLE AND RESPONSIVE BIDDER AND SHOULD HAVE BEEN AWARDED THE CONTRACT.

IN YOUR JULY 1 TELEGRAM AND SUBSEQUENT LETTER OF AUGUST 7 YOU REFER TO THE SOLICITATION IN TERMS RELATING TO AN INVITATION FOR BIDS. IT SHOULD BE NOTED THAT THIS WAS A NEGOTIATED PROCUREMENT AND THE RULES OF FORMALLY ADVERTISED PROCUREMENTS WERE NOT APPLICABLE. 37 COMP. GEN. 855, 856 (1958). NEGOTIATION PROCEDURES, UNLIKE THOSE REQUIRED FOR FORMAL ADVERTISING, ARE DESIGNED TO BE FLEXIBLE AND INFORMAL. THESE PROCEDURES PERMIT THE CONTRACTING OFFICER TO FOLLOW PROCEDURES IN THE AWARDING OF A NEGOTIATED CONTRACT THAT WOULD BE COMPLETELY UNACCEPTABLE IF THE PROCUREMENT WAS BEING ACCOMPLISHED BY FORMAL ADVERTISING. 47 COMP. GEN. 279, 284 (1967). THUS, WHEN THE PROPOSALS WERE OPENED AND IT WAS DECIDED THAT THE COST OF 25 CPS MACHINE WAS TOO HIGH, THE PROCURING ACTIVITY WAS UNDER NO OBLIGATION TO AWARD A CONTRACT ON THE BASIS OF THE INITIAL PROPOSALS. SUBSECTION D OF SECTION I OF THE RFP SPECIFICALLY RESERVED TO THE GOVERNMENT THE RIGHT TO REJECT ANY AND ALL PROPOSALS RECEIVED BY REASON OF THE RFP, OR TO NEGOTIATE SEPARATELY WITH ANY SOURCE WHATSOEVER IN ANY MANNER NECESSARY TO SERVE THE BEST INTERESTS OF THE GOVERNMENT.

RATHER THAN ISSUE A NEW RFP OR NEGOTIATE SOLELY WITH YOUR FIRM, THE PROCURING ACTIVITY DECIDED TO REEVALUATE ITS PRINTING RATE REQUIREMENTS. THIS RESULTED IN A DETERMINATION THAT THE ACTIVITY'S MINIMUM NEEDS COULD BE MET BY A MACHINE WITH A PRINTING RATE OF 20 CPS. SINCE YOUR INITIAL PROPOSAL WAS BASED ON SUPPLYING A MACHINE WITH A PRINTING RATE OF 25 CPS, YOUR FIRM WAS GIVEN AN OPPORTUNITY TO AMEND YOUR PROPOSAL ON THE BASIS OF SUPPLYING A 20 CPS MACHINE AND ITS PROPOSAL AND PRICE WERE REVISED ORALLY ON THAT BASIS. THE CONTRACTING OFFICER REPORTS THAT YOU WERE ADVISED OF THE CHANGE BY TELEPHONE, RATHER THAN BY A WRITTEN AMENDMENT TO THE RFP, BECAUSE THE CHANGE WAS NOT CONSIDERED TO BE COMPLEX IN NATURE AND SUCH ORAL ADVICE WAS PERMITTED BY FPR 1-3.805-1(D) WHICH STATES, IN PERTINENT PART:

"(D) WHEN, DURING NEGOTIATIONS, A SUBSTANTIAL CHANGE OCCURS IN THE GOVERNMENT'S REQUIREMENTS OR A DECISION IS REACHED TO RELAX, INCREASE, OR OTHERWISE MODIFY THE SCOPE OF THE WORK OR STATEMENT OF REQUIREMENTS, SUCH CHANGE OR MODIFICATION SHALL BE MADE IN WRITING AS AN AMENDMENT TO THE REQUEST FOR PROPOSALS, AND A COPY SHALL BE FURNISHED TO EACH PROSPECTIVE CONTRACTOR. ORAL ADVICE OF CHANGE OR MODIFICATION MAY BE GIVEN IF (1) THE CHANGES INVOLVED ARE NOT COMPLEX IN NATURE, *** . IN SUCH INSTANCES, HOWEVER, THE ORAL ADVICE SHOULD BE PROMPTLY FOLLOWED BY A WRITTEN AMENDMENT VERIFYING SUCH ORAL ADVICE PREVIOUSLY GIVEN. *** " WHILE IT DOES NOT APPEAR THAT THE PROCURING ACTIVITY FOLLOWED THE ORAL ADVICE WITH A WRITTEN AMENDMENT, THERE IS NO INDICATION THAT YOUR FIRM WAS IN ANY WAY PREJUDICED BY THE ABSENCE OF A WRITTEN VERIFICATION OF THE CHANGED REQUIREMENTS OR BY THE PROCEDURES FOLLOWED.

AS TO WHY FRIDEN AND DURA WERE NOT REQUESTED TO SUBMIT NEW PROPOSALS, IT IS NOTED THAT THE RECORD INDICATES THAT COGNIZANT TECHNICAL PERSONNEL DETERMINED THAT DURA'S AND FRIDEN'S PROPOSALS WERE CONSIDERED COMPLETELY UNACCEPTABLE SINCE THE PRINTING RATES OF THE EQUIPMENT OFFERED BY THOSE FIRMS DID NOT APPROACH THE PRINTING RATE DEEMED ESSENTIAL TO MEET THE GOVERNMENT'S MINIMUM NEEDS.

ACCORDINGLY, IN VIEW OF THE FOREGOING, AND SINCE AWARD WAS MADE ON THE BASIS OF THE LOWEST OFFER MEETING THE REVISED REQUIREMENTS, WE WILL NOT ATTEMPT TO INTERFERE WITH BURROUGHS' CONTRACT. YOUR PROTEST IS THEREFORE DENIED.