B-181978, DEC 17, 1974

B-181978, DEC 17, 1974

WHERE TELEGRAPHIC REQUEST FOR BEST AND FINAL OFFERS FOR MESS ATTENDANT SERVICES DID NOT REACH ONE OFFEROR DUE TO FAILURE OF GOVERNMENT TRANSMISSION EQUIPMENT AND THERE WAS ADEQUATE TIME FOR NEW BEST AND FINAL OFFERS AFTER OFFEROR PROTESTED TO AGENCY, AGENCY SHOULD OBTAIN NEW ROUND OF BEST AND FINAL OFFERS, NOTWITHSTANDING FACT THAT NAME OF SUCCESSFUL OFFEROR (INCUMBENT CONTRACTOR) WAS REVEALED PRIOR TO PROTEST, SINCE DISCLOSURE OF CONTRACTOR WITHOUT REVEALING PRICE WAS NOT PREJUDICIAL, ASPR SEC. 3-805.3(D) (1973 ED.) PROVIDES THAT OFFERORS SHALL HAVE REASONABLE OPPORTUNITY TO SUBMIT BEST AND FINAL OFFERS AND DECISION NOT TO REOPEN NEGOTIATIONS WAS PREJUDICIAL TO OFFEROR AND WITHOUT REASONABLE BASIS.

ABC FOOD SERVICE, INC.:

REQUEST FOR PROPOSALS (RFP) NO. N00204-74-R-0064, ISSUED BY THE NAVAL AIR STATION, PENSACOLA, FLORIDA, ON APRIL 24, 1974, SOLICITED OFFERS FOR MESS ATTENDANT SERVICES AT CORRY FIELD FROM JULY 1, 1974, TO JUNE 30, 1975. INITIAL PROPOSALS WERE RECEIVED ON MAY 22, 1974, AND ALL OFFERS, INCLUDING THAT FROM ABC FOOD SERVICE, INC. (ABC), WERE FOUND TO BE WITHIN THE COMPETITIVE RANGE.

BY LETTERS DATED MAY 31, 1974, ALL OFFERORS WERE ADVISED OF GENERAL DEFICIENCIES IN THEIR RESPECTIVE PROPOSALS AND WERE REQUESTED TO SUBMIT REVISIONS BY JUNE 10, 1974. AFTER EVALUATION OF THE REVISED PROPOSALS, ALL OFFERORS WERE INVITED BY TELEGRAM OF JUNE 17, 1974, TO SUBMIT BEST AND FINAL OFFERS BY 3:45 P.M., JUNE 19, 1974. THEREAFTER, ABC NOTIFIED THE CONTRACTING OFFICER THAT IT DID NOT RECEIVE THE TELEGRAM UNTIL JUNE 20, 1974, THE DAY AFTER THE DEADLINE FOR RECEIPT OF BEST AND FINAL OFFERS. NAVY INVESTIGATION REVEALED THAT THERE HAD BEEN A DELAY IN THE TRANSMISSION OF THE TELEGRAM DUE TO AN EQUIPMENT BREAKDOWN AT THE CARSWELL AIR FORCE BASE, NEW MEXICO, THE GOVERNMENT TELEGRAM TRANSMITTAL POINT FOR THE STATE OF TEXAS, WHERE ABC IS SITUATED.

BY LETTER OF JUNE 21, 1974, NEGOTIATIONS WERE REOPENED WITH THE DEADLINE FOR RECEIPT OF BEST AND FINAL OFFERS SET FOR 3:45 P.M., JULY 11, 1974. JULY 1, 1974, THE RFP WAS AMENDED TO CHANGE THE COMMENCEMENT DATE OF THE CONTRACT TO SEPTEMBER 1, 1974, AND TO STIPULATE THAT NEGOTIATIONS WOULD NOT CLOSE ON JULY 11, 1974, ALTHOUGH REVISED PROPOSALS BASED ON THE CHANGE IN COMMENCEMENT DATE WERE REQUESTED BY THAT DATE.

REVISED PROPOSALS WERE RECEIVED AND ON JULY 23, 1974, TELEGRAMS WERE SENT TO ALL OFFERORS NOTIFYING THEM THAT BEST AND FINAL OFFERS WERE TO BE SUBMITTED BY JULY 26 (3 DAYS LATER).

AFTER RECEIPT OF BEST AND FINAL OFFERS (ABC DID NOT SUBMIT ONE), A DECISION WAS MADE TO AWARD THE CONTRACT TO SPACE SERVICES OF GEORGIA, INC. NOTICE OF THE INTENTION WAS TELEGRAPHED TO ALL UNSUCCESSFUL OFFERORS ON AUGUST 5, 1974.

ON AUGUST 7, 1974, A REPRESENTATIVE OF ABC PROTESTED THE AWARD TO THE CONTRACTING OFFICER ON THE BASIS THAT ABC DID NOT RECEIVE THE JULY 23, 1974, TELEGRAM. AN INVESTIGATION REVEALED THAT THE TELEGRAM WAS NOT TRANSMITTED TO ABC DUE TO COMMUNICATION PROBLEMS BETWEEN PENSACOLA AND THE MILITARY RECEIVING STATION AT CARSWELL AIR FORCE BASE. HOWEVER, THE CONTRACTING OFFICER'S REPORT STATES:

"AFTER CONSIDERING THE PROTEST OF ABC, IT WAS DECIDED THAT THE PROTEST WOULD BE DENIED SINCE BEST AND FINAL OFFERS UNDER RFP N00204-74 R-0064 HAD BEEN SOLICITED AND NEGOTIATIONS HAD BEEN CLOSED BY TELEGRAM OF 23 JULY 1974. ABC'S FAILURE TO RECEIVE THE TELEGRAM WAS BEYOND THE CONTROL OF AND WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTING OFFICER, PLUS THE FACT THAT ALL OFFERORS, INCLUDING ABC, HAD BEEN AFFORDED AMPLE OPPORTUNITY TO SUBMIT ANY DESIRED REVISIONS TO THEIR PROPOSALS DURING THE COURSE OF NEGOTIATIONS. ABC WAS NOTIFIED OF THE DECISION BY TELEGRAM OF 7 AUGUST 1974."

ABC SUBSEQUENTLY PROTESTED TO OUR OFFICE ON AUGUST 8, 1974. AWARD TO SPACE SERVICES WAS MADE ON AUGUST 13, 1974, AFTER THE NAVY MADE A DETERMINATION UNDER ARMED SERVICES PROCUREMENT REGULATION (ASPR) SEC. 2 407.8(B) (1973 ED.) TO AWARD THE CONTRACT PRIOR TO THE ISSUANCE OF OUR DECISION. THAT DETERMINATION WAS BASED ON THE FOLLOWING:

"A. FURTHER EXTENSION OF THE THEN CURRENT CONTRACT WOULD HAVE BEEN REQUIRED IF AWARD HAD NOT BEEN MADE WITHOUT DELAY SINCE THE THEN CURRENT CONTRACT EXPIRED 31 AUGUST 1974 AND THE GOVERNMENT COULD NOT HAVE BEEN WITHOUT MESS ATTENDANT SERVICES IN GALLEYS AND TROOPS HAD TO BE FED. BASED ON PAST EXPERIENCE IN EXTENDING THE THEN CURRENT CONTRACT N00204-73-C- 0236, NEGOTIATIONS WERE MORE COSTLY THAN AWARD OF A CONTRACT. A TWO MONTH CONTRACT EXTENSION WAS AT A COST OF $19,600.00 PER MONTH (FOR SAME HOURS, EQUIPMENT, AND CLEANING REQUIREMENTS AS SHOWN IN RFP N00204-74-R-0064), COMPARED TO $17,843.00 PER MONTH (SPACE SERVICES OF GEORGIA, INCORPORATED'S FINAL OFFER UNDER RFP).

"B. IT WAS NOT REASONABLE TO GO THROUGH ANOTHER NEGOTIATION PROCESS, WHICH WOULD HAVE BEEN REQUIRED IF AWARD HAD NOT BEEN MADE BY 31 AUGUST 1974.

"C. ALTHOUGH IT IS UNFORTUNATE THAT ABC FOOD SERVICES, INCORPORATED, DID NOT RECEIVE THE WIRE CLOSING NEGOTIATIONS, THE WIRE WAS RELEASED BY THE CONTRACTING OFFICER FOR TRANSMITTAL TO THE FIRM IN GOOD FAITH, AND DELIVERY WAS NOT MADE THROUGH NO FAULT OR NEGLIGENCE OF THE CONTRACTING OFFICER.

"D. IT WOULD HAVE BEEN PREJUDICIAL TO OTHER OFFERORS TO REOPEN NEGOTIATIONS SINCE THE NAME OF THE APPARENT LOW OFFEROR HAD BEEN REVEALED TO ALL OFFERORS."

ABC CONTENDS THAT THE NAVY'S FAILURE TO NOTIFY IT OF THE ESTABLISHED COMMON CUTOFF DATE FOR THE RECEIPT OF BEST AND FINAL OFFERS IS VIOLATIVE OF ASPR SEC. 3-805.3 AND THE STATUTORY REQUIREMENT EXPRESSED IN 10 U.S.C. SEC. 2304(G) (1970). ASPR SEC. 3-805.3(D) (1973 AND 1974 ED.) STATES:

"AT THE CONCLUSION OF DISCUSSIONS, A FINAL, COMMON CUT-OFF DATE WHICH ALLOWS A REASONABLE OPPORTUNITY FOR SUBMISSION OF WRITTEN 'BEST AND FINAL' OFFERS SHALL BE ESTABLISHED AND ALL REMAINING PARTICIPANTS SO NOTIFIED. IF ORAL NOTIFICATION IS GIVEN, IT SHALL BE CONFIRMED IN WRITING. THE NOTIFICATION SHALL INCLUDE INFORMATION TO THE EFFECT THAT (I) DISCUSSIONS HAVE BEEN CONCLUDED, (II) OFFERORS ARE BEING GIVEN AN OPPORTUNITY TO SUBMIT A 'BEST AND FINAL' OFFER AND (III) IF ANY SUCH MODIFICATION IS SUBMITTED IT MUST BE RECEIVED BY THE DATE AND TIME SPECIFIED, AND IS SUBJECT TO THE LATE PROPOSALS AND MODIFICATIONS OF PROPOSALS PROVISION OF THE SOLICITATION."

GENERALLY, IN SITUATIONS REGARDING THE FAILURE TO RECEIVE REQUIRED NOTICE, OUR OFFICE DOES NOT RECOMMEND CORRECTIVE ACTION IN THE ABSENCE OF A CONSCIOUS AND DELIBERATE EFFORT TO EXCLUDE AN OFFEROR FROM PARTICIPATING IN THE COMPETITION. SEE MATTER OF HYDE & NORRIS T/A TRAVELER'S INN MOTOR LODGE, B-180360, MAY 20, 1974. SINCE THERE IS NO EVIDENCE IN THIS CASE THAT THERE WAS A CONCERTED EFFORT TO PREVENT ABC FROM COMPETING, WE SEE NO BASIS TO DEVIATE FROM THIS POSITION. HOWEVER, WHEN ABC PROTESTED THE FAILURE TO RECEIVE THE TELEGRAM, NO OTHER OFFEROR'S PRICES HAD BEEN REVEALED AND THERE WAS ADEQUATE TIME FOR ANOTHER ROUND OF BEST AND FINAL OFFERS. CONSIDERING THE TIME PROVIDED FOR THE LAST ROUND OF BEST AND FINAL OFFERS, EVALUATION AND NOTICE OF AWARD, THE PROCEDURE COULD HAVE BEEN UNDERTAKEN AND COMPLETED BEFORE AUGUST 31, 1974, WITHOUT UNNECESSARILY HOLDING OVER THE INCUMBENT CONTRACTOR.

THE NAVY HAD INDICATED THAT THIS WAS NOT DONE BECAUSE ABC HAD BEEN GIVEN AMPLE OPPORTUNITY TO REVISE ITS PROPOSAL DURING THE COURSE OF NEGOTIATIONS. HOWEVER, THAT STATEMENT OVERLOOKS THE FACT THAT THE AMENDMENT THAT WAS ISSUED PRIOR TO THE LAST BEST AND FINAL OFFERS ADVISED OFFERORS THAT NEGOTIATIONS WOULD NOT CLOSE WITH THE JULY 11, 1974, SUBMISSION. THEREFORE, THERE WAS NO INDUCEMENT FOR OFFERORS TO SUBMIT THEIR BEST OFFERS BY THAT DATE INASMUCH AS THEY COULD REASONABLY ANTICIPATE THAT THEY WOULD HAVE ANOTHER CHANCE TO SUBMIT THEIR BEST PROPOSALS. THUS, WHILE THE OPPORTUNITY WAS PRESENT TO SUBMIT THE BEST OFFERS PRIOR TO THE JULY 26 BEST AND FINAL DATE, THERE WAS NO REQUIREMENT THAT IT BE DONE BEFORE THAT TIME. FURTHER, THE BASIS FOR NOT REOPENING NEGOTIATIONS CONFLICTS WITH THE CLEAR IMPORT OF ASPR SEC. 3-805.3(D) (1973 AND 1974 ED.) WHICH PROVIDES THAT OFFERORS SHALL HAVE A REASONABLE OPPORTUNITY TO SUBMIT BEST AND FINAL OFFERS. UNDER THE CIRCUMSTANCES, ABC WAS DEPRIVED OF THE MANDATE OF ASPR WITHOUT GOOD CAUSE IN CONTRAVENTION OF THE REGULATION.

THE NAVY HAS STATED THAT IT WOULD HAVE BEEN PREJUDICIAL TO OTHER OFFERORS TO HAVE REQUESTED ANOTHER ROUND OF BEST AND FINAL OFFERS SINCE ALL OFFERORS BECAME AWARE ON AUGUST 6 THAT SPACE SERVICES WAS THE LOW OFFEROR. WE BELIEVE THE NAVY MEANT TO SAY THAT SPACE SERVICES WOULD BE PREJUDICED BY THE REOPENING OF NEGOTIATIONS SINCE WE DO NOT UNDERSTAND HOW OTHER OFFERORS COULD BE PREJUDICED BY THE DISCLOSURE THAT SPACE SERVICES WAS THE SUCCESSFUL OFFEROR. WHILE WE RECOGNIZE THAT ASPR SEC. 3-805.3(C) (1973 ED.) PROHIBITS THE USE OF AUCTION TECHNIQUES IN NEGOTIATION, SINCE (1) THE SOLE FACT RELEASED WAS THAT SPACE SERVICES WAS IN LINE FOR AWARD; (2) SPACE SERVICES' PRICE WAS NOT DIVULGED; AND (3) DUE TO THE SPECIAL CHARACTER OF THE INDUSTRY INVOLVED, IT WAS MOST PROBABLE THAT THE INCUMBENT, SPACE SERVICES, WOULD BE PARTICIPATING IN THE PROCUREMENT, WE DO NOT BELIEVE THAT ANY UNDUE PREJUDICE WOULD HAVE RESULTED TO SPACE SERVICES FROM THE AGENCY'S REQUESTING AND RECEIVING A NEW ROUND OF BEST AND FINAL OFFERS OR THAT AN AUCTION ATMOSPHERE WOULD HAVE BEEN CREATED. IN ANY EVENT, OUR OFFICE HAS HELD THAT EVEN WHERE PRICES HAVE BEEN REVEALED, "*** AN IMPROPER AWARD MUST NOT BE ALLOWED TO STAND SOLELY TO AVOID THE IMPLICATIONS OF AN AUCTION SITUATION." MATTER OF BRISTOL ELECTRONICS, INC., ET AL., B-180247, JULY 11, 1974, 54 COMP. GEN.

. ACCORDINGLY, EVERY EFFORT SHOULD HAVE BEEN MADE TO PROVIDE ABC AN OPPORTUNITY TO SUBMIT A BEST AND FINAL OFFER BEFORE AN AWARD OF A CONTRACT WAS MADE.

IN VIEW OF THE FOREGOING, WE CONCLUDE THAT THE DECISION NOT TO REOPEN NEGOTIATIONS WAS WITHOUT A REASONABLE BASIS AND PREJUDICIAL TO ABC. THEREFORE, WE RECOMMEND THAT NEGOTIATIONS BE IMMEDIATELY REOPENED FOR ANOTHER ROUND OF BEST AND FINAL OFFERS. AFTER THE NEGOTIATIONS, THE PRESENT CONTRACT SHOULD BE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT AND A NEW CONTRACT ENTERED INTO WITH THE SUCCESSFUL OFFEROR, IF OTHER THAN SPACE SERVICES, AT ITS NEWLY OFFERED PRICE. IF SPACE SERVICES REMAINS SUCCESSFUL, THE EXISTING CONTRACT SHOULD BE MODIFIED IN ACCORDANCE WITH ITS FINAL PROPOSAL. SEE MATTER OF BRISTOL ELECTRONICS, INC., ET AL., SUPRA.

SINCE THIS DECISION CONTAINS A RECOMMENDATION FOR CORRECTIVE RELIEF, A COPY IS BEING TRANSMITTED TO EACH OF THE COMMITTEES REFERENCED IN SECTION 236 OF THE LEGISLATIVE REORGANIZATION ACT OF 1970.