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IS UNABLE TO AGREE THAT THE OMISSION OF THE MANDATORY FPMR CLAUSE RELATING TO CONSIDERATION OF LATE BIDS DID NOT CONSTITUTE A SUFFICIENT BASIS FOR CANCELLING THE SOLICITATION. IT CANNOT BE CONCLUDED THAT UNDER THIS CLAUSE A CONTRACTING OFFICER IS FREE TO IGNORE THE BEST INTERESTS OF THE GOVERNMENT IN REACHING HIS DETERMINATION OR THAT CONSIDERATION OF LATE MODIFICATIONS IN ACCORDANCE WITH THE STANDARDS SET FORTH IN THE CLAUSE WOULD DESTROY THE COMPETITIVE ASPECTS OF THE PROCUREMENT. LEWIS & BOCKIUS: REFERENCE IS MADE TO YOUR LETTERS OF FEBRUARY 3 AND 9. THE FACTS OF THIS CASE ARE FULLY SET FORTH IN OUR PRIOR DECISION. IT WAS DETERMINED THAT CONSIDERATION OF THE HIS MODIFICATION WOULD BE IN THE GOVERNMENT'S BEST INTEREST AND THAT REEVALUATION WOULD NOT UNDULY DELAY THE PROCUREMENT OR REQUIRE ANOTHER TECHNICAL REVIEW OF EITHER PROPOSAL.

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B-173302, JUN 23, 1972

BID PROTEST - NEGOTIATED PROCUREMENTS - CANCELLATION - CONSIDERATION OF LATE BIDS DECISION DENYING REQUEST FOR RECONSIDERATION OF DECISION B-173302, FEBRUARY 1, 1972, DENYING A PROTEST BY UNIVAC FEDERAL SYSTEMS CORPORATION AGAINST THE CANCELLATION OF RFP DACW31-71-R-0001, ISSUED BY THE U.S. ARMY CORPS OF ENGINEERS FOR A COMPUTER SYSTEM. THE COMP. GEN. IS UNABLE TO AGREE THAT THE OMISSION OF THE MANDATORY FPMR CLAUSE RELATING TO CONSIDERATION OF LATE BIDS DID NOT CONSTITUTE A SUFFICIENT BASIS FOR CANCELLING THE SOLICITATION. IT CANNOT BE CONCLUDED THAT UNDER THIS CLAUSE A CONTRACTING OFFICER IS FREE TO IGNORE THE BEST INTERESTS OF THE GOVERNMENT IN REACHING HIS DETERMINATION OR THAT CONSIDERATION OF LATE MODIFICATIONS IN ACCORDANCE WITH THE STANDARDS SET FORTH IN THE CLAUSE WOULD DESTROY THE COMPETITIVE ASPECTS OF THE PROCUREMENT.

TO MORGAN, LEWIS & BOCKIUS:

REFERENCE IS MADE TO YOUR LETTERS OF FEBRUARY 3 AND 9, AND MARCH 30, 1972, CONCERNING THE REQUEST FOR RECONSIDERATION OF OUR DECISION, B 173302, FEBRUARY 1, 1972, 51 COMP. GEN. , DENYING THE PROTEST OF UNIVAC FEDERAL SYSTEMS CORPORATION, AGAINST THE CANCELLATION OF REQUEST FOR PROPOSALS (RFP) DACW31-71-R-0001, ISSUED BY THE UNITED STATES ARMY CORPS OF ENGINEERS FOR A COMPUTER SYSTEM.

THE FACTS OF THIS CASE ARE FULLY SET FORTH IN OUR PRIOR DECISION. BRIEFLY, UNIVAC AND HONEYWELL INFORMATION SYSTEMS, INCORPORATED (HIS), SUBMITTED REVISED PROPOSALS IN RESPONSE TO THE RFP BY FEBRUARY 5, 1971. AFTER EVALUATION, THE SOURCE SELECTION AUTHORITY (SSA) NOTIFIED THE BALTIMORE DISTRICT ENGINEER ON MAY 21, 1971, THAT UNIVAC HAD BEEN APPROVED FOR AWARD. ON MAY 25, HIS SUBMITTED A LATE MODIFICATION OF ITS PROPOSAL TO THE BALTIMORE ENGINEERING DISTRICT. IT WAS DETERMINED THAT CONSIDERATION OF THE HIS MODIFICATION WOULD BE IN THE GOVERNMENT'S BEST INTEREST AND THAT REEVALUATION WOULD NOT UNDULY DELAY THE PROCUREMENT OR REQUIRE ANOTHER TECHNICAL REVIEW OF EITHER PROPOSAL. UPON REVIEW OF THE SOLICITATION IT WAS FOUND THAT THE FOLLOWING CLAUSE FROM THE FEDERAL PROPERTY MANAGEMENT REGULATION (FPMR), MADE MANDATORY UNDER GSA'S TERMS FOR DELEGATION OF PROCUREMENT AUTHORITY TO THE ARMY, WAS OMITTED FROM THE RFP:

"PROPOSALS, OR MODIFICATIONS THEREOF, WHICH ARE RECEIVED IN THE OFFICE DESIGNATED IN THE REQUEST FOR PROPOSALS AFTER THE TIME SPECIFIED FOR THEIR SUBMISSION ARE LATE PROPOSALS. LATE PROPOSALS SHALL NOT BE CONSIDERED UNLESS THE CONTRACTING OFFICER DETERMINES THAT SUCH ACTION WOULD NOT UNDULY DELAY THE PROCUREMENT AND WOULD BE IN THE INTEREST OF THE GOVERNMENT. NORMALLY, ONLY LATE OFFERS LOWER IN PRICE, OR OFFERING MORE FAVORABLE FACTORS WHICH DO NOT REQUIRE A TECHNICAL RE-EVALUATION WILL BE CONSIDERED. THE CONTRACTING OFFICER'S DECISION IS FINAL AND CONCLUSIVE. EXCEPT AS OTHERWISE EXPRESSLY STATED IN THE MODIFICATION, A LATE MODIFICATION, IF REJECTED, SHALL NOT BE DEEMED A WITHDRAWAL OF THE OFFEROR'S TIMELY PROPOSAL."

FOLLOWING THIS DISCOVERY, THE CONTRACTING OFFICER DECIDED TO CANCEL THE RFP AND RESOLICIT THE PROCUREMENT UNDER A NEW RFP INCLUDING THE MANDATORY CLAUSE.

IN OUR PRIOR DECISION WE FOUND NO BASIS TO QUESTION THE DECISION TO CANCEL THE INITIAL RFP FOR THE PURPOSE OF INCLUDING THE MANDATORY FPMR CLAUSE. WE ALSO CONSIDERED AN ALLEGED LEAK OF INFORMATION TO HIS AND CONCLUDED THAT THE ALLEGATION WAS NOT SUBSTANTIATED BY THE RECORD.

IN YOUR REQUEST FOR RECONSIDERATION YOU QUESTION WHETHER THE OMISSION OF THE MANDATORY FPMR CLAUSE CONSTITUTED A BASIS FOR CANCELLING THE INITIAL RFP. YOU ARGUE THAT THE IMPROPRIETY OF THE CANCELLATION CAN BE SHOWN BY ESTABLISHING THAT THE CLAUSE WAS NOT MATERIAL TO THE SOLICITATION OR THAT IT DID NOT SERVE A USEFUL PURPOSE. YOU URGE THAT UNDER ITS OWN TERMS THE CLAUSE IS NOT TO BE INVOKED IF THE LATE MODIFICATION WOULD REQUIRE A TECHNICAL REEVALUATION. THEREFORE, YOU STATE IT IS OBVIOUS THAT READING INTO THE CLAUSE A REQUIREMENT FOR AN ADDITIONAL ROUND OF NEGOTIATIONS BEFORE MAKING AN AWARD WOULD PRECLUDE ITS USE IN THE ONLY SITUATION FOR WHICH THE CLAUSE WAS DESIGNED - WHERE CONSIDERATION OF THE OFFER WOULD NOT DELAY THE AWARD. IT IS YOUR POSITION THAT A PROCEDURE PERMITTING THE REOPENING OF NEGOTIATIONS AFTER SELECTION OF THE SUCCESSFUL OFFEROR WOULD CONSTITUTE A PROHIBITED AUCTION TECHNIQUE.

IN ADDITION, YOU CONTEND THAT THE FPMR CLAUSE ESTABLISHES A NEW AND INVALID PROCUREMENT POLICY WHEREBY AWARDS WOULD BE MADE ON NONRESPONSIVE OR LATE OFFERS. THIS, YOU URGE, IS BEYOND GSA'S PROCUREMENT AUTHORITY. YOU ALSO NOTE THAT THE CLAUSE DOES NOT DISTINGUISH BETWEEN LATE MODIFICATIONS SUBMITTED WITHIN THE PRESCRIBED TIME BUT DELAYED AS A CONSEQUENCE OF MISHANDLING BY THE GOVERNMENT, AND LATE MODIFICATIONS ACTUALLY PREPARED AFTER THE CUT-OFF DATE.

YOU ALSO ARGUE THAT SINCE THE CLAUSE DOES NOT REQUIRE CONSIDERATION OF LATE MODIFICATIONS BUT LEAVES THIS TO THE CONTRACTING OFFICER'S DISCRETION, THE DOOR IS OPEN TO ARBITRARY ACTION AND FAVORITISM. TIED IN WITH THIS ARGUMENT IS YOUR CONTENTION THAT SINCE THE CLAUSE AUTHORIZES CONSIDERATION OF LATE MODIFICATIONS WHICH OFFER "OTHER MORE FAVORABLE FACTORS," IT WOULD BE BROAD ENOUGH TO DESTROY THE COMPETITIVE ASPECTS OF A PROCUREMENT BECAUSE UNKNOWN FACTORS COULD ENTER THE SELECTION PROCESS. YOU CONTEST THE POSITION IN OUR PRIOR DECISION THAT THE EFFECT OF THE PROVISION IS NOT TO MAKE THE BASIS OF COMPETITION UNEQUAL SINCE ALL OFFERORS MAY SUBMIT LATE OFFERS THAT MAY OR MAY NOT BE CONSIDERED. YOU CONTEND IN THIS REGARD THAT COMPETING ON A BASIS OF EQUALITY IS NOT NECESSARILY THE EQUIVALENT OF COMPETING ON A "COMMON BASIS" AS THAT TERM IS UNDERSTOOD IN COMPETITIVE PROCUREMENT. YOU HAVE CITED 39 COMP. GEN. 570, 572 (1960); AND THE GAMEWELL COMPANY V. THE CITY OF PHOENIX, 216 F.2D 928 (9TH CIR; 1954), AS ILLUSTRATIVE OF THIS PROPOSITION. FURTHER, YOU CONTEND THAT EVEN IF GSA DID HAVE AUTHORITY TO REQUIRE INCORPORATION OF THE FPMR CLAUSE, SINCE FAILURE TO INCLUDE THE CLAUSE COULD BE WAIVED, THIS DOES NOT CONSTITUTE A BASIS FOR CANCELLING THE RFP. FINALLY, YOU HAVE AGAIN RAISED THE ISSUE THAT THERE WAS A LEAK OF INFORMATION TO HIS.

YOU HAVE MADE MUCH OF THE ARGUMENT THAT THE OMISSION OF THE MANDATORY FPMR CLAUSE DID NOT CONSTITUTE A SUFFICIENT BASIS FOR CANCELLING THE SOLICITATION, AND YOU HAVE QUESTIONED THE PROPRIETY OF USING THE CLAUSE IN THE RESOLICITATION. YOU BELIEVE THE CLAUSE GIVES THE CONTRACTING OFFICER UNLIMITED DISCRETION TO "SNAP UP" LATE OFFERS TO THE DETRIMENT OF THE COMPETITIVE SYSTEM AND THE OFFERORS WHO HAVE SUBMITTED TIMELY PROPOSALS.

WE DO NOT BELIEVE ANY SUCH CONCLUSION IS WARRANTED. THE CLAUSE PROVIDES STANDARDS TO GUIDE THE CONTRACTING OFFICER IN MAKING HIS DETERMINATION. IT PROVIDES THAT NORMALLY ONLY LATE OFFERS LOWER IN PRICE OR OFFERING MORE FAVORABLE FACTORS WHICH DO NOT REQUIRE A TECHNICAL RESOLICITATION WILL BE CONSIDERED. THUS THE KINDS OF LATE OFFERS WHICH ARE TO BE CONSIDERED ARE THOSE WHICH CAN BE EVALUATED PROMPTLY. SEE B-174788(1), MARCH 8, 1972, WHERE WE UPHELD A CONTRACTING OFFICER'S DETERMINATION UNDER A SIMILAR CLAUSE NOT TO CONSIDER A LATE MODIFICATION OFFERING A SLIGHT PRICE ADVANTAGE, IN ORDER NOT TO DELAY THE PROCUREMENT ANY LONGER. WE ARE NOT PREPARED TO CONCLUDE THAT UNDER THIS CLAUSE A CONTRACTING OFFICER IS FREE TO IGNORE THE BEST INTERESTS OF THE GOVERNMENT IN REACHING HIS DETERMINATION OR THAT CONSIDERATION OF LATE MODIFICATIONS IN ACCORDANCE WITH THE STANDARDS SET FORTH IN THE CLAUSE WOULD DESTROY THE COMPETITIVE ASPECTS OF THE PROCUREMENT. WE RECOGNIZE THAT THE LANGUAGE OF THE CLAUSE MAKES THE CONTRACTING OFFICER'S DECISION FINAL AND CONCLUSIVE. NOTWITHSTANDING THE BROAD LANGUAGE, WE DO NOT VIEW THE CONTRACTING OFFICER'S DISCRETION AS WITHOUT LIMITATION, ALTHOUGH WE ARE NOT REQUIRED TO ATTEMPT TO DEFINE THE LIMITATIONS AT THIS TIME.

IN THIS REGARD, WE RECOGNIZE THAT IT MAY BE UNFAIR TO CONSIDER A LATE PROPOSAL IN A PARTICULAR SITUATION WITHOUT A REOPENING OF NEGOTIATIONS. IT MAY BE NECESSARY, FOR EXAMPLE, TO REOPEN NEGOTIATIONS IN ORDER TO ACHIEVE COMPETITION ON A COMMON BASIS. THE CASES CITED BY YOU WITH RESPECT TO THIS MATTER CONCERN ADVERTISED PROCUREMENTS UNDER WHICH MATERIAL BID REVISIONS AFTER OPENING ARE PRECLUDED BY THE NATURE OF THE PROCEDURE. SUCH AN INFLEXIBLE STANDARD DOES NOT APPLY TO NEGOTIATED PROCUREMENTS. NOTHING IN THE FPMR CLAUSE PRECLUDES THE CONTRACTING OFFICER FROM REOPENING NEGOTIATIONS. WHILE THE CLAUSE PROHIBITS CONSIDERATION OF A LATE MODIFICATION WHERE THIS WOULD UNDULY DELAY THE AWARD, ONCE THE CONTRACTING OFFICER DECIDES TO CONSIDER A LATE OFFER, HE MAY ALSO BE REQUIRED IN APPROPRIATE CASES TO REOPEN THE NEGOTIATIONS. SEE 50 COMP. GEN. 1 (1970). SUCH A PROCEDURE WOULD NOT CONSTITUTE AN AUCTION TECHNIQUE SINCE INFORMATION CONCERNING RELATIVE STANDING OR PRICE IS NOT TO BE DISCLOSED TO THE OFFERORS.

ALSO, WE DO NOT FIND IT NECESSARY TO DECIDE WHETHER THE FAILURE TO INCLUDE THE MANDATORY CLAUSE COULD BE WAIVED, SINCE THE PROCURING ACTIVITY HAS CHOSEN TO INCLUDE THE CLAUSE IN THE RESOLICITATION. WE NOTE IN THIS CONNECTION THAT OMISSION OF THE FPMR CLAUSE WOULD BE INCONSISTENT WITH DEFENSE PROCUREMENT CIRCULAR NOS. 65 AND 89, DECEMBER 20, 1968 AND JULY 12, 1971, RESPECTIVELY. FINALLY, WE FIND NO BASIS TO YOUR POSITION THAT THE GSA LATE PROPOSAL CLAUSE IN QUESTION IS BEYOND GSA'S STATUTORY AUTHORITY. FOR THE REASONS STATED, WE BELIEVE THE CLAUSE REPRESENTS A PROPER EXERCISE OF GSA'S STATUTORY AUTHORITY TO PROMULGATE PROCUREMENT RULES IN THIS AREA.

WE HAVE AGAIN REVIEWED YOUR CONTENTION AND THE CORPS OF ENGINEERS RESPONSE WITH RESPECT TO A LEAK OF INFORMATION TO HIS, AND WE DO NOT FIND THAT YOUR POSITION IS SUPPORTED BY THE FACTS OF RECORD.

FOR THESE REASONS OUR PRIOR DECISION IS AFFIRMED.

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