B-149055, JUL. 18, 1962

B-149055, JUL. 18, 1962

TO MR. WILLIAM H. P. BULLOCK

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 1, 1962, PROTESTING REJECTION OF THE LOW BID SUBMITTED UNDER AIR FORCE IFB 30-635-62-284.

THE SUBJECT PROCUREMENT IS A TWO-STEP PROCUREMENT. UNDER THE FIRST STEP, THERE WAS ISSUED A LETTER REQUEST FOR TECHNICAL PROPOSALS TO ENGINEER, FURNISH, INSTALL, TEST AND CHECK OUT EQUIPMENT AND MATERIAL REQUIRED TO EXPAND EXISTING SHORTORDER MICROWAVE SYSTEMS FROM 24 OPERATING CHANNELS TO 36. SECTION V OF THE INSTRUCTIONS THAT ACCOMPANIED THE REQUEST FOR TECHNICAL PROPOSALS ENCOURAGED THE SUBMISSION OF ALTERNATE PROPOSALS.

IN RESPONSE TO THE REQUEST FOR PROPOSALS, YOU FIRM SUBMITTED A DETAILED ANALYSIS, TITLED ,TECHNICAL PROPOSAL TO ENGINEER, FURNISH AND INSTALL THE 12 CHANNEL AUGMENTATION EXISTING SHORTORDER SYSTEMS," WHICH INCLUDED AN ALTERNATE PROPOSAL. BOTH PROPOSALS WERE EVALUATED. THE MAIN PROPOSAL WAS CONSIDERED MARGINAL. TO MAKE IT ACCEPTABLE, YOUR FIRM WAS REQUIRED TO COMMIT ITSELF TO CERTAIN REQUIREMENTS, AMONG THEM A COMMITMENT THAT IT WOULD FURNISH ONE POWER SUPPLY FOR EACH LYNCH B-810 UNIT. THE ALTERNATE PROPOSAL WAS DETERMINED TO BE TOTALLY UNACCEPTABLE BECAUSE IT DID NOT MEET THE PERFORMANCE AND EQUIPMENT REQUIREMENTS OF THE SPECIFICATION, BUT THE CONTRACTING OFFICER NEVER SPECIFICALLY ADVISED YOUR FIRM OF THAT FACT.

UNDER THE SECOND STEP OF THE PROCUREMENT, AN INVITATION FOR BIDS WAS ISSUED TO YOUR FIRM AND FOUR OTHER COMPANIES. YOUR FIRM SUBMITTED A BID ON BOTH THE MAIN AND ALTERNATE PROPOSALS. THE BID ON THE ALTERNATE WAS THE LOWEST RECEIVED. THE BID ON THE MAIN WAS THE THIRD LOWEST RECEIVED.

THE ADMINISTRATIVE OFFICE PROPOSES TO REJECT THE BID ON THE ALTERNATE AS NONRESPONSIVE. ESSENTIALLY, IT IS THE ADMINISTRATIVE POSITION THAT ALTHOUGH THE FIRM WAS NOT TOLD SPECIFICALLY THAT ITS ALTERNATE WAS UNACCEPTABLE, THE REQUIREMENT THAT THE MARGINAL PROPOSAL BE UPGRADED BY THE INCLUSION OF A POWER SUPPLY FOR EACH LYNCH B-810 UNIT SHOULD HAVE DEMONSTRATED TO THE FIRM THAT THE ALTERNATE PROPOSAL, WHICH PROPOSED TO DELETE THE LYNCH B-810 UNITS, WAS NOT ACCEPTABLE TO THE AIR FORCE. YOUR POSITION, ON THE OTHER HAND, IS THAT ASPR PROVISIONS PERTAINING TO TWO- STEP PROCUREMENTS REQUIRE THE CONTRACTING OFFICER TO GIVE SPECIFIC NOTICE TO THE SOURCE OF ANY UNACCEPTABLE TECHNICAL PROPOSAL BEFORE THE ISSUANCE OF AN INVITATION FOR BIDS AND THAT WHEN YOUR FIRM DID NOT RECEIVE SUCH NOTICE THAT THE ALTERNATE PROPOSAL WAS UNACCEPTABLE IT ASSUMED THAT SUCH PROPOSAL WAS ACCEPTABLE. YOU STATE THAT IF THE FIRM HAD RECEIVED NOTICE THAT THE ALTERNATE WAS UNACCEPTABLE, IT WOULD HAVE KNOWN THAT ONLY THE MAIN PROPOSAL WOULD BE CONSIDERED AND COULD HAVE BID A LOWER PRICE ON THAT PROPOSAL.

WHILE THERE MAY HAVE BEEN SOME BASIS FOR YOUR FIRM TO CONCLUDE BEFORE BIDDING THAT THE ALTERNATE TECHNICAL PROPOSAL WAS ACCEPTABLE TO THE PURCHASING AGENCY, THE FACT REMAINS THAT IT HAD BEEN DETERMINED TO BE UNACCEPTABLE ALTHOUGH THAT FACT HAD NOT BEEN SPECIFICALLY COMMUNICATED TO THE FIRM. IT WOULD NOT BE PROPER TO MAKE AN AWARD ON THE ALTERNATE PROPOSAL WHICH IS BASED UPON RELAXED REQUIREMENTS THAT DO NOT MEET THE ADMINISTRATIVE REQUIREMENTS JUST TO TAKE ADVANTAGE OF A PECUNIARY SAVINGS. SUCH AN AWARD WOULD VIOLATE THE LAW REQUIRING CONTRACTING OFFICERS TO ACCEPT ONLY THOSE BIDS COMPLYING IN SUBSTANCE WITH THE ADMINISTRATIVE SPECIFICATIONS. ALTHOUGH YOU SAY THE FIRM MAY HAVE BID A LOWER PRICE FOR THE MAIN PROPOSAL IF IT HAD KNOWN THAT THE ALTERNATE WAS UNACCEPTABLE, THAT REMAINS LARGELY A MATTER OF CONJECTURE. IF THE FIRM FELT IT COULD HAVE PERFORMED AT AN AMOUNT LESS THAN THE AMOUNT OF ITS MAIN BID, IT WAS AFFORDED SUCH AN OPPORTUNITY WHEN THE INVITATION TO BID WAS ISSUED TO IT.

INASMUCH AS BIDS WERE RECEIVED FROM FIVE SOURCES, THERE APPEARS TO HAVE BEEN ADEQUATE COMPETITION FOR THE PROCUREMENT INVOLVED AND AS THE FIRM WAS OFFERED A CHANGE TO BID ON THE MAIN PROPOSAL AND AS IT TOOK ADVANTAGE OF THAT OPPORTUNITY, IT DOES NOT APPEAR THAT IT WAS DENIED A CHANCE TO BE COMPETITIVE WITH THE OTHER BIDDERS INVOLVED.

IN THE CIRCUMSTANCES, THE ADMINISTRATIVE REJECTION OF THE ALTERNATE BID WILL NOT BE DISTURBED.

FURTHER, THE AIR FORCE HAS ADVISED THAT ACTION WILL BE TAKEN TO INSURE FUTURE COMPLIANCE WITH ASPR PROVISION 2-503.1 (B) (VI) THAT REQUIRES THE CONTRACTING OFFICER TO NOTIFY THE SOURCE OF AN UNACCEPTABLE TECHNICAL PROPOSAL OF THAT FACT BEFORE THE ISSUANCE OF INVITATIONS FOR BIDS. THEREFORE, IT IS ANTICIPATED THAT THE IMMEDIATE SITUATION WILL NOT RECUR.