B-203659, OCT 26, 1981

B-203659, OCT 26, 1981

DIGEST: 1. INITIAL ADVERSE AGENCY ACTION OCCURS WHEN A PROCURING AGENCY PROCEEDS WITH THE CLOSING DATE FOR PROPOSAL RECEIPT AS SCHEDULED WITHOUT TAKING CORRECTIVE ACTION SUGGESTED BY A TIMELY PROTEST TO THE AGENCY. SUBSEQUENT PROTEST TO GAO IS UNTIMELY UNDER 4 C.F.R. SEC. 21.2(A) (1981), SINCE IT WAS NOT FILED HERE WITHIN 10 WORKING DAYS OF NOTICE OF THE INITIAL ADVERSE AGENCY ACTION. 2. WHERE THE RESPONSE TO A PROCURING AGENCY'S REQUEST FOR VERIFICATION OF PRICING IN AN OFFEROR'S BEST AND FINAL OFFER RESULTS IN A DETERMINATION THAT THE RFP IS AMBIGUOUS, AN AMENDMENT CLARIFYING THE REQUIREMENT AND PERMITTING REVISED PROPOSALS CONSTITUTES MEANINGFUL WRITTEN DISCUSSIONS WITH ALL OFFERORS IN THE COMPETITIVE RANGE. 3. PROCURING AGENCY'S REQUEST FOR VERIFICATION OF PRICING IN ONE OFFEROR'S FIRST BEST AND FINAL OFFER MAY HAVE PROVIDED A BASIS FOR THE OFFEROR TO SPECULATE THAT ITS PROPOSED PRICE WAS LOW BUT THE AGENCY'S ACTION DID NOT PROVIDE THAT OFFEROR WITH AN UNFAIR COMPETITIVE ADVANTAGE IN SUBMITTING ITS SECOND BEST AND FINAL OFFER. ALL OFFERORS WERE GIVEN AN EQUAL OPPORTUNITY TO REVISE PROPOSALS BASED ON REVISED AND CLARIFIED REQUIREMENTS.

MIL-AIR ENGINES & CYLINDERS, INC.:

MIL-AIR ENGINES & CYLINDERS, INC. (MIL-AIR), PROTESTS ANY AWARD UNDER REQUEST FOR PROPOSALS (RFP) NO. F41608-80-R-8545, ISSUED BY THE AIR FORCE FOR REPAIR, OVERHAUL, MODIFICATION, TESTING AND PREPARATION FOR STORAGE AND SHIPMENT OF AIRCRAFT ENGINES AND PARTS. UNDER THE RFP, LOW PRICE WAS THE PRIMARY BASIS FOR SELECTING THE SUCCESSFUL OFFEROR.

MIL-AIR CONTENDS THAT (1) BY REQUESTING SECOND BEST AND FINAL OFFERS, THE AIR FORCE CONDUCTED AN IMPROPER AUCTION, AND (2) PRIOR TO THE SUBMISSION OF SECOND BEST AND FINAL OFFERS, AIR FORCE DISCUSSIONS WITH ONLY ONE OFFEROR VIOLATED APPLICABLE LAW AND THEREBY IMPROPERLY NOTIFIED THAT OFFEROR THAT ITS PROPOSED PRICE WAS LOW. WE FIND THAT MIL-AIR'S PROTEST IS WITHOUT MERIT.

MIL-AIR STATES THAT ON MARCH 30, 1981, MIL-AIR WAS ADVISED THAT THE AIR FORCE WANTED A SECOND BEST AND FINAL OFFER. ON MARCH 31, 1981, MIL AIR PROTESTED TO THE AIR FORCE CONTENDING THAT A SECOND ROUND OF BEST AND FINAL OFFERS WAS UNNECESSARY AND THAT, IN VIEW OF THE TWO PRICE PROPOSALS ALREADY SUBMITTED, THE AIR FORCE WAS CONDUCTING AN AUCTION.

BY AMENDMENT DATED APRIL 6, 1981, THE AIR FORCE REQUESTED THAT SECOND BEST AND FINAL OFFERS BE SUBMITTED BY APRIL 20, 1981. ON APRIL 17, 1981, MIL-AIR SUBMITTED ITS SECOND BEST AND FINAL OFFER AND RENEWED ITS PROTEST OF MARCH 31, 1981. MIL-AIR ALSO OFFERED TO WITHDRAW ITS PROTEST IF IT WAS DETERMINED TO BE THE SUCCESSFUL OFFEROR.

IN THE FACE OF MIL-AIR'S PROTEST, THE AIR FORCE PROCEEDED WITH THE CLOSING OF THE SECOND ROUND OF BEST AND FINAL OFFERS ON APRIL 20, 1981. ON JUNE 5, 1981, THE AIR FORCE NOTIFIED MIL-AIR THAT ITS PROTEST WAS DENIED AND ON JUNE 12, 1981, MIL-AIR PROTESTED HERE. AWARD HAS NOT BEEN MADE.

OUR BID PROTEST PROCEDURES PROVIDE THAT WHEN A PROTEST HAS BEEN FILED INITIALLY WITH THE CONTRACTING AGENCY, AS HERE, ANY SUBSEQUENT PROTEST TO OUR OFFICE MUST BE FILED WITHIN 10 WORKING DAYS OF NOTICE OF INITIAL ADVERSE AGENCY ACTION IN ORDER TO BE CONSIDERED TIMELY. 4 C.F.R. SEC. 21.2(A) (1981). WE HAVE HELD THAT WHERE A PROTEST CONCERNS AN AMENDMENT TO AN RFP AND THE PROTEST IS FILED WITH THE CONTRACTING AGENCY PRIOR TO THE CLOSING DATE, THE INITIAL ADVERSE AGENCY ACTION OCCURS WHEN THE AGENCY PROCEEDS WITH THE CLOSING, AS SCHEDULED, INSTEAD OF TAKING THE CORRECTIVE ACTION SUGGESTED BY THE PROTESTER. CALIFORNIA COMPUTER PRODUCTS, INC., B-193611, MARCH 6, 1979, 79-1 CPD 150. SEE ADVANCE DEADLINE COMPANY, B-201954, FEBRUARY 19, 1981, 81-1 CPD 116. HERE, MIL-AIR KNEW THAT THE AIR FORCE WAS PROCEEDING WITH THE CLOSING AS SCHEDULED.

ACCORDINGLY, SINCE THE INITIAL ADVERSE AGENCY ACTION OCCURRED ON APRIL 20, 1981, WHEN THE AIR FORCE PROCEEDED WITH THE SCHEDULED CLOSING WITHOUT CANCELING OR SUSPENDING IT, THIS ASPECT OF MIL-AIR'S PROTEST, WHICH WAS FILED ON JUNE 12, 1981, IS UNTIMELY AND WILL NOT BE CONSIDERED ON THE MERITS.

MIL-AIR STATES THAT AFTER RECEIPT OF THE FIRST ROUND OF BEST AND FINAL OFFERS, THE AIR FORCE CONTACTED ONE OFFEROR, GARY AIRCRAFT CORPORATION (GARY), REQUESTING THAT GARY VERIFY ITS SUBSTANTIALLY REDUCED PRICE. THE AIR FORCE REPORTS THAT THE CONTRACTING OFFICER SUSPECTED A MISTAKE IN GARY'S PRICING OR UNDERSTANDING OF THE REQUIREMENTS. MIL-AIR CONTENDS THAT THE AIR FORCE'S VERIFICATION REQUEST CONSTITUTED DISCUSSIONS, WHICH SHOULD HAVE BEEN HELD WITH ALL OFFERORS. MIL-AIR ALSO CONTENDS THAT THE AIR FORCE'S ACTION EFFECTIVELY ALERTED GARY THAT ITS PROPOSED PRICE WAS SUBSTANTIALLY LOW, THUS UNFAIRLY PERMITTING GARY TO RAISE ITS PRICE IN ITS SECOND BEST AND FINAL OFFER.

IN RESPONSE, THE AIR FORCE ARGUES THAT THERE IS NO REQUIREMENT TO DISCUSS A POSSIBLE MISTAKE BY ONE OFFEROR WITH OTHER OFFERORS. THE AIR FORCE REPORTS THAT GARY WAS NOT ADVISED THAT ITS FIRST BEST AND FINAL OFFER WAS THE LOW PRICED PROPOSAL. THE AIR FORCE CONTENDS THAT, IN ANY EVENT, ITS CHANGED REQUIREMENTS RESULTING IN THE SUBSEQUENT AMENDMENT TO THE RFP GAVE ALL OFFERORS THE OPPORTUNITY TO REVISE PROPOSALS.

THERE IS NO DEFENSE ACQUISITION REGULATION PROVISION SETTING FORTH EXPLICIT PROCEDURES TO BE FOLLOWED WHEN AN ERROR IS SUSPECTED IN A BEST AND FINAL OFFER. WE HAVE HELD THAT, IN GENERAL, THE SEEKING AND OBTAINING OF VERIFICATION OF A MATTER IN A BEST AND FINAL OFFER FROM AN OFFEROR IS NOT TO BE CONSIDERED DISCUSSIONS, WHICH WOULD NECESSITATE A ROUND OF DISCUSSIONS WITH ALL OFFERORS IN THE COMPETITIVE RANGE; HOWEVER, A MATERIAL CHANGE TO A PROPOSAL AS A RESULT OF A VERIFICATION REQUEST WOULD CONSTITUTE DISCUSSIONS, UNLESS THE INTENDED CHANGE WAS OBVIOUS FROM THE PROPOSAL. KLEIN-SIEB ADVERTISING & PUBLIC RELATIONS, INC., B-194553.2, MARCH 23, 1981, 81-1 CPD 214.

HERE, IT APPEARS THAT GARY'S VERIFICATION CONTAINED AN EXPLANATION SHOWING THAT GARY INTERPRETED ONE OF THE RFP'S REQUIREMENTS IN A REASONABLE MANNER BUT NOT THE MANNER INTENDED BY THE AIR FORCE. THUS, THE AIR FORCE DETERMINED, IN EFFECT, THAT THE SUSPECTED MISTAKE WAS NOT IN GARY'S PROPOSAL BUT WAS IN THE RFP. ACCORDINGLY, TO PERMIT GARY TO REVISE ITS PROPOSAL, DISCUSSIONS ON THAT POINT WERE NECESSARY WITH ALL OFFERORS IN THE COMPETITIVE RANGE.

WE NOTE THAT THE AIR FORCE REVISED THE RFP TO (1) CLARIFY THE INTENDED INTERPRETATION AND (2) DELETE AN ENGINE OVERHAUL REQUIREMENT REPRESENTING AN ESTIMATED 6 PERCENT OF THE WORK. IN OUR VIEW, THE AMENDMENT CLARIFYING THE AIR FORCE'S NEEDS WAS ADEQUATE NOTICE TO ALL OFFERORS OF THE SUBJECT MATTER RAISED BY GARY IN ITS VERIFICATION RESPONSE; THE PORTION OF THE AMENDMENT RELATIVE TO THE CLARIFICATION CONSTITUTED MEANINGFUL WRITTEN DISCUSSIONS WITH ALL OFFERORS IN THE COMPETITIVE RANGE.

WHILE FROM THE AIR FORCE'S REQUEST FOR VERIFICATION GARY MAY HAVE SPECULATED THAT ITS FIRST BEST AND FINAL OFFER WAS LOW PRICED, WE CANNOT CONCLUDE THAT THE AIR FORCE ACTED IMPROPERLY IN REQUESTING VERIFICATION OR ADVISING GARY OF THE REASON THAT A MISTAKE WAS SUSPECTED. FURTHER, THERE IS NO INDICATION THAT GARY KNEW THE SIZE OF THE PRICE DIFFERENCE BETWEEN ITS PROPOSAL AND OTHER PROPOSALS. WHEN THE AIR FORCE REQUESTED A SECOND BEST AND FINAL OFFER BASED ON CLARIFIED AND REVISED REQUIREMENTS, ALL OFFERORS HAD AN EQUAL OPPORTUNITY TO SUBMIT REVISED PRICE PROPOSALS. GARY HAD NO WAY OF KNOWING HOW OTHER OFFERORS WOULD REVISE PRICE PROPOSALS. THUS, WE HAVE NO BASIS TO CONCLUDE THAT GARY WAS GIVEN AN UNFAIR COMPETITIVE ADVANTAGE IN THE SECOND ROUND OF BEST AND FINAL OFFERS. ACCORDINGLY, THESE ASPECTS OF MIL-AIR'S PROTEST ARE WITHOUT MERIT.

PROTEST DENIED IN PART AND DISMISSED IN PART. IN VIEW OF OUR CONCLUSION, MIL-AIR'S CLAIM FOR PROPOSAL PREPARATION COSTS IS ALSO DENIED.