B-174300, FEB 29, 1972

B-174300, FEB 29, 1972

BID PROTEST - FAILURE TO NEGOTIATE - LATE NOTIFICATION OF REJECTION DECISION DENYING PROTEST OF PROCUREMENT CONSULTANTS, IN., AGAINST AWARD OF A CONTRACT TO STERLING INSTITUTE UNDER AN RFP ISSUED BY THE OFFICE OF NAVAL RESEARCH (ONR) FOR A SERIES OF DOD PROCUREMENT MANAGEMENT SEMINARS. SUBSECTION 5 OF ASPR 3.805-1(A) ALLOWS AN EXCEPTION TO THE STATUTORY REQUIREMENT THAT DISCUSSIONS BE HELD WITH ALL BIDDERS WHO ARE DETERMINED TO BE WITHIN THE COMPETITIVE RANGE, PROVIDED THAT THE RFP GIVE NOTICE OF THE POSSIBILITY THAT AWARD WILL BE MADE WITHOUT NEGOTIATION. HOWEVER, THE STATED PROVISO ONLY APPLIES TO SUBSECTION 5, WHILE IT IS APPARENT THAT THE SUBJECT DECISION WAS BASED ON THE PROVISIONS OF ASPR 3.805-1(A)(3), WHICH EXCEPT PROCUREMENTS FROM THE GENERAL RULE WHEN THE TIME OF DELIVERY WILL NOT PERMIT SUCH DISCUSSIONS. IN THE INSTANT CASE, THE 45-DAY PERIOD FROM THE DATE FOR SUBMISSION OF PROPOSALS UNTIL THE CLASS STARTING DATE DOES NOT SEEM UNREASONABLE IN VIEW OF THE NECESSARY ADVANCE PREPARATIONS REQUIRED FOR CONDUCTING PROFESSIONAL, HIGH LEVEL SEMINARS. WITH REGARD TO PROTESTANT'S SECOND CONTENTION, NOTIFICATION OF REJECTION WAS NOT REQUIRED UNDER ASPR 3.508-3, SINCE NO AWARD HAD BEEN MADE AT THE TIME THE PROTEST WAS FILED. THE PROTEST IS DENIED.

TO PROCUREMENT CONSULTANTS, INCORPORATED:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 9, 1971, AND SUBSEQUENT CORRESPONDENCE, IN WHICH YOU PROTEST THE AWARD OF A CONTRACT UNDER REQUEST FOR PROPOSALS (RFP) NO. N00014-72-R-0004, ISSUED BY THE OFFICE OF NAVAL RESEARCH (ONR), TO ANY OFFEROR OTHER THAN PROCUREMENT CONSULTANTS, INCORPORATED.

THE RFP, ISSUED IN LETTER FORMAT ON AUGUST 17, 1971, SOLICITED PROPOSALS FOR DEVELOPING AND CONDUCTING A SERIES OF 16 SEMINARS FOR HIGH LEVEL DEPARTMENT OF DEFENSE PROCUREMENT MANAGEMENT PERSONNEL. FIVE REPLIES WERE RECEIVED FROM THE APPROXIMATELY 40 ORGANIZATIONS SOLICITED, ONE OF WHICH WAS CONSIDERED NONRESPONSIVE. THE REMAINING FOUR PROPOSALS WERE EVALUATED ON THE BASIS OF TECHNICAL FACTORS AND PRICE, AND THE HIGHEST RATING WAS ATTAINED BY STERLING INSTITUTE, THE LOW PROPOSER. YOUR COMPANY WAS RATED FOURTH.

AS A RESULT OF THE EVALUATION ONR DID NOT CONDUCT NEGOTIATIONS WITH THE THREE LOWER RATED PROPOSERS, BUT NOTIFIED EACH BY LETTER DATED OCTOBER 6, 1971, THAT "A RECOMMENDATION HAS BEEN MADE THAT A CONTRACT BE AWARDED TO AN ORGANIZATION OTHER THAN YOUR OWN." IN ITS ADMINISTRATIVE REPORT DATED OCTOBER 28, 1971, THE NAVY STATES THAT SINCE STERLING INSTITUTE WAS RECOMMENDED FOR THE AWARD AND HAD THE LOWEST PRICE, NEGOTIATIONS WITH THE OTHER PROPOSERS WERE NOT CONDUCTED "DUE TO THE RIGID TIME CONSTRAINTS OF THE PROGRAM." THE REPORT FURTHER INDICATES THAT THE PERIOD BETWEEN THE CLOSING DATE FOR RECEIPT OF PROPOSALS AND THE REQUIRED NOVEMBER 1, 1971, CLASS STARTING DATE LEFT NO TIME TO NEGOTIATE WITH ALL OFFERORS.

THE BASIS OF YOUR PROTEST IS ONR'S FAILURE TO CONDUCT NEGOTIATIONS WITH YOUR COMPANY. IN YOUR LETTER OF OCTOBER 15, YOU STATE THAT SINCE THE RFP DID NOT CONTAIN A NOTICE THAT AN AWARD MAY BE MADE WITHOUT DISCUSSION, AS REQUIRED BY ASPR 3.501(B)(3)(XII), THE CONTRACTING OFFICER WAS REQUIRED TO CONDUCT DISCUSSIONS WITH ALL RESPONSIBLE OFFERORS WHO SUBMITTED PROPOSALS WITHIN A COMPETITIVE RANGE IN ACCORDANCE WITH ASPR 3-805.1. YOU ALSO CLAIM THAT ONR'S LETTER OF OCTOBER 6, 1971, WAS NOT SUFFICIENT TO PROVIDE YOU WITH PROMPT NOTIFICATION OF REJECTION OF YOUR PROPOSAL AND THE BASIS THEREFOR.

RFP N00014-R-0002 WAS PREPARED ON ONR LETTERHEAD STATIONERY, AND DID NOT INCLUDE STANDARD FORM 33 OR ANY OTHER NOTICE THAT AN AWARD MIGHT BE MADE WITHOUT DISCUSSION OF PROPOSALS. ASPR 3.501(B)(3)(XII) REQUIRES SUCH NOTICE "CONSISTENT WITH ASPR 3.805-1(A)(5)." ASPR 3.805-1 STATES:

"(A) 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, EXCEPT THAT THIS REQUIREMENT NEED NOT NECESSARILY BE APPLIED TO:

"(1) PROCUREMENTS NOT IN EXCESS OF $2,500;

"(2) PROCUREMENTS IN WHICH PRICES) OR RATES ARE FIXED BY LAW OR REGULATIONS;

"(3) PROCUREMENTS IN WHICH TIME OF DELIVERY WILL NOT PERMIT SUCH DISCUSSIONS;

"(4) PROCUREMENTS OF THE SET-ASIDE PORTION OF PARTIAL SET-ASIDES OR BY SMALL BUSINESS RESTRICTED ADVERTISING;

"(5) PROCUREMENTS IN WHICH IT CAN BE CLEARLY DEMONSTRATED FROM THE EXISTENCE OF ADEQUATE COMPETITION OR ACCURATE PRIOR COST EXPERIENCE WITH THE PRODUCT OR SERVICE THAT ACCEPTANCE OF THE MOST FAVORABLE INITIAL PROPOSAL WITHOUT DISCUSSION WOULD RESULT IN A FAIR AND REASONABLE PRICE: PROVIDED, HOWEVER, THAT IN SUCH PROCUREMENTS, THE REQUEST FOR PROPOSALS SHALL NOTIFY ALL OFFERORS OF THE POSSIBILITY THAT AWARD MAY BE MADE WITHOUT DISCUSSION OF PROPOSALS RECEIVED AND HENCE, THAT PROPOSALS SHOULD BE SUBMITTED INITIALLY ON THE MOST FAVORABLE TERMS FROM A PRICE AND TECHNICAL STANDPOINT WHICH THE OFFEROR CAN SUBMIT TO THE GOVERNMENT. ***

THE AUTHORITY FOR THIS SECTION IS DERIVED FROM 10 U.S.C. 2304(G), WHICH STATES:

"(G) IN ALL NEGOTIATED PROCUREMENTS IN EXCESS OF $2,500 IN WHICH RATES OR PRICES ARE NOT FIXED BY LAW OR REGULATION AND IN WHICH TIME OF DELIVERY WILL PERMIT, PROPOSALS, INCLUDING PRICE, SHALL BE SOLICITED FROM THE MAXIMUM NUMBER OF QUALIFIED SOURCES CONSISTENT WITH THE NATURE AND REQUIREMENTS OF THE SUPPLIES OR SERVICES TO BE PROCURED, AND WRITTEN OR ORAL DISCUSSIONS SHALL BE CONDUCTED WITH ALL RESPONSIBLE OFFERORS WHO SUBMIT PROPOSALS WITHIN A COMPETITIVE RANGE, PRICE AND OTHER FACTORS CONSIDERED: PROVIDED, HOWEVER, THAT THE REQUIREMENTS OF THIS SUBSECTION WITH RESPECT TO WRITTEN OR ORAL DISCUSSIONS NEED NOT BE APPLIED TO PROCUREMENTS IN IMPLEMENTATION OF AUTHORIZED SET-ASIDE PROGRAMS OR TO PROCUREMENTS WHERE IT CAN BE CLEARLY DEMONSTRATED FROM THE EXISTENCE OF ADEQUATE COMPETITION OR ACCURATE PRIOR COST EXPERIENCE WITH THE PRODUCT, THAT ACCEPTANCE OF AN INITIAL PROPOSAL WITHOUT DISCUSSION WOULD RESULT IN FAIR AND REASONABLE PRICES AND WHERE THE REQUEST FOR PROPOSALS NOTIFIES ALL OFFERORS OF THE POSSIBILITY THAT AWARD MAY BE MADE WITHOUT DISCUSSION."

A CAREFUL READING OF THESE PROVISIONS MAKES IT CLEAR THAT THE REQUIREMENT TO CONDUCT DISCUSSIONS IS NOT APPLICABLE TO PROCUREMENTS OF $2,500 OR LESS, PROCUREMENTS IN WHICH PRICES ARE FIXED BY LAW, AND PROCUREMENTS IN WHICH TIME OF DELIVERY WILL NOT PERMIT DISCUSSIONS. IT IS ALSO CLEAR FROM THE STATUTE THAT THE PROVISO FOLLOWING SUBSECTION (5) OF ASPR 3.805-1(A) IS APPLICABLE ONLY TO SUBSECTION (5) AND NOT TO THE PRECEDING FOUR SUBSECTIONS. THAT THIS INTERPRETATION IS IN ACCORD WITH THE INTENT OF CONGRESS IS MADE MANIFEST BY THE FOLLOWING STATEMENT INCLUDED IN THE REPORT ACCOMPANYING THE BILL THAT SUBSEQUENTLY ADDED SUBSECTION (G) TO 10 U.S.C. 2304:

"SECTION (C) OF THE BILL WOULD ADD A NEW SECTION TO PROCUREMENT LAW REQUIRING, WITH CERTAIN EXCEPTIONS, THAT ORAL OR WRITTEN DISCUSSIONS BE HAD IN NEGOTIATED PROCUREMENTS WITH ALL RESPONSIBLE OFFERORS WHO SUBMIT PROPOSALS WITHIN A COMPETITIVE RANGE. EXCEPTED FROM THIS REQUIREMENT WOULD BE PROCUREMENTS INVOLVING NOT MORE THAN $2,500, THOSE IN WHICH PRICES OR RATES ARE FIXED BY LAW OR REGULATIONS, THOSE IN WHICH TIME OF DELIVERY WILL NOT PERMIT SUCH DISCUSSIONS, THOSE INVOLVING AUTHORIZED SET- ASIDE PROGRAMS, AND THOSE IN WHICH IT CAN BE CLEARLY SHOWN THAT ADEQUATE COMPETITION OR PRIOR COST EXPERIENCE IS LIKELY TO PRODUCE REASONABLE PRICES WITHOUT SUCH DISCUSSIONS. IN THE LATTER EXCEPTION THE REQUEST FOR PROPOSALS SHOULD NOTIFY ALL OFFERORS OF THE POSSIBILITY THAT THE AWARD MAY BE MADE WITHOUT DISCUSSIONS." S. REPT 1884, 87TH CONG., 2D SESS.

THE NAVY'S DECISION NOT TO CONDUCT DISCUSSIONS APPARENTLY WAS BASED ON ASPR 3.805-1(A)(3), ALLOWING AWARD WITHOUT DISCUSSION WHERE TIME OF DELIVERY DOES NOT PERMIT SUCH DISCUSSION, RATHER THAN ON ASPR 3.805 1(A)(5). HOWEVER, YOU NOTE IN YOUR LETTER OF JANUARY 31, 1972, THAT 45 DAYS ELAPSED FROM SEPTEMBER 17, 1971, THE DATE FOR SUBMISSION OF PROPOSALS, TO THE NOVEMBER 1, 1971, CLASS STARTING DATE, AND YOU CONTEND THAT THIS WAS A SUFFICIENT PERIOD OF TIME IN WHICH TO CONDUCT NEGOTIATIONS.

THE RECORD INDICATES THAT THE PROPOSALS WERE REFERRED TO THE NAVAL MATERIEL COMMAND FOR EVALUATION ON SEPTEMBER 21, 1971, (SEPTEMBER 18 AND 19 FELL ON A WEEKEND) AND THAT THE EVALUATION WAS COMPLETED ON OCTOBER 5, 1971. WHILE THE EVALUATION PERIOD IS NOT NECESSARILY CONSISTENT WITH A GREAT URGENCY, IN VIEW OF THE NECESSARY ADVANCE PREPARATIONS REQUIRED ON THE PART OF BOTH THE CONTRACTOR AND THE NAVY TO ARRANGE FOR A WELL- ATTENDED CLASS STARTING ON NOVEMBER 1, 1971, IT WAS NOT UNREASONABLE FOR THE CONTRACTING OFFICER TO DISPENSE WITH NEGOTIATIONS AND MAKE AN AWARD ON THE BASIS OF THE EVALUATION.

IT IS TRUE, AS YOU POINT OUT, THAT WE PREVIOUSLY INDICATED THAT "SOME OPPORTUNITY FOR NEGOTIATIONS WITH OFFERORS WAS POSSIBLE DESPITE THE URGENCY OF THE PROCUREMENT" WHERE NINETEEN DAYS ELAPSED FROM THE CLOSING DATE FOR RECEIPT OF PROPOSALS TO DATE OF AWARD. B-169725, OCTOBER 5, 1970. HOWEVER, WHAT WOULD BE ADEQUATE TO NEGOTIATE FOR THE PROCUREMENT OF MESS GEAR DISPENSING EQUIPMENT, AS IN THAT CASE, IS NOT NECESSARILY SUFFICIENT FOR THE PROCUREMENT OF PROFESSIONAL, HIGH LEVEL SEMINARS INCLUDING APPROPRIATE MATERIALS. WHILE IT IS POSSIBLE THAT THE NEED FOR THIS PROCUREMENT SHOULD HAVE BEEN RECOGNIZED EARLY ENOUGH TO HAVE PROVIDED AMPLE TIME FOR THE EVALUATION OF PROPOSALS, THE FACT THAT THE URGENCY WAS FORESEEABLE DOES NOT NECESSARILY PREVENT THE EMPLOYMENT OF PROCEDURES AUTHORIZED FOR USE WHERE AN URGENCY EXISTS. CF. 38 COMP. GEN. 171 (1958).

WITH RESPECT TO YOUR SECOND CONTENTION, ASPR 3.508-3 REQUIRES NOTIFICATION TO UNSUCCESSFUL OFFERORS AFTER AN AWARD HAS BEEN MADE. SINCE NO AWARD HAD BEEN MADE AT THE TIME YOUR PROTEST WAS FILED, THERE WAS NO REQUIREMENT FOR YOU TO HAVE RECEIVED SUCH NOTICE. FURTHER, ASPR 3.508- 2(A), CITED IN YOUR LETTER, APPLIES ONLY WHERE THE PERIOD OF EVALUATION OF PROPOSALS IS LIKELY TO EXCEED 30 DAYS OR IN WHICH SOME SUPPLIERS HAVE BEEN SELECTED FOR ADDITIONAL NEGOTIATION, AND HAS NO BEARING IN THIS SITUATION.

ACCORDINGLY, YOUR PROTEST MUST BE DENIED.