B-181387, JAN 24, 1975, 54 COMP GEN 612

B-181387, JAN 24, 1975, 54 COMP GEN 612

CONTRACTS - NEGOTIATION - TWO-STEP PROCUREMENT - FIRST STEP PROCUREMENT TECHNICAL APPROACHES CONTRACTING OFFICER'S REJECTION OF TECHNICAL PROOPSAL SUBMITTED UNDER FIRST STEP OF TWO-STEP FORMALLY ADVERTISED PROCUREMENT WAS PROPER EXERCISE OF DISCRETION SINCE PROPOSAL WAS DETERMINED UNACCEPTABLE AND THERE IS NO EVIDENCE OF RECORD THAT THE DETERMINATION WAS UNREASONABLE OR MADE IN BAD FAITH. SINCE EVALUATION AND OVERALL DETERMINATION OF TECHNICAL ADEQUACY OF PROPOSAL IS PRIMARILY FUNCTION OF PROCURING ACTIVITY, WHICH WILL NOT BE DISTURBED IN ABSENCE OF CLEAR SHOWING OF UNREASONABLENESS OR AN ABUSE OF DISCRETION, JUDGMENT OF AGENCY'S TECHNICAL PERSONNEL WILL NOT BE QUESTIONED WHERE SUCH JUDGMENT HAS A REASONABLE BASIS MERELY BECAUSE THERE ARE DIVERGENT TECHNICAL OPINIONS AS TO PROPOSAL ACCEPTABILITY. CONTRACTS - NEGOTIATION - REQUESTS FOR PROPOSALS - OFFER - ADDITIONAL INFORMATION WHILE SOLICITATION UNDER TWO-STEP FORMALLY ADVERTISED PROCUREMENT PROVIDED CONTRACTING OFFICER WITH AUTHORITY TO REQUEST ADDITIONAL INFORMATION FROM OFFERORS OF PROPOSALS WHICH WERE CONSIDERED REASONABLY SUSCEPTIBLE OF BEING MADE ACCEPTABLE, FACT THAT PROTESTER WAS NOT AFFORDED OPPORTUNITY TO REVISE OR MODIFY ITS PROPOSAL WAS NOT IMPROPER SINCE PROCURING ACTIVITY REASONABLY DETERMINED PROPOSAL UNACCEPTABLE AND THAT IT COULD NOT BE MADE ACCEPTABLE BY CLARIFICATION OR ADDITIONAL INFORMATION, BUT WOULD REQUIRE MAJOR REVISION. CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - PREQUALIFICATION OF OFFERORS - RESTRICTIVE OF COMPETITION FEDERAL AVIATION ADMINISTRATION'S PUBLICATION OF QUALIFICATION CRITERIA IN COMMERCE BUSINESS DAILY TO ASSURE THAT ONLY QUALIFIED FIRMS RECEIVED COPIES OF REQUEST FOR TECHNICAL PROPOSALS APPEARS TO BE UNDULY RESTRICTIVE OF COMPETITION AND SHOULD BE ELIMINATED FROM FUTURE PROCUREMENTS IN ABSENCE OF APPROPRIATE JUSTIFICATION ON BASIS THAT PREQUALIFICATION OF OFFERORS IS IN DEROGATION OF PRINCIPAL TENET OF COMPETITIVE SYSTEM THAT PROPOSALS BE SOLICITED IN SUCH MANNER AS TO PERMIT MAXIMUM COMPETITION CONSISTENT WITH NATURE AND EXTENT OF SERVICES OR ITEMS TO BE PROCURED.

IN THE MATTER OF THE METIS CORPORATION, JANUARY 24, 1975:

ON JANUARY 11, 1974, REQUEST FOR TECHNICAL PROPOSALS (RFPT) NO. WA5M-4 7573, WAS ISSUED BY THE FEDERAL AVIATION ADMINISTRATION (FAA), AS THE FIRST STEP OF A TWO-STEP PROCUREMENT. THE RFTP SOLICITED TECHNICAL PROPOSALS FOR AN AUTOMATED RADAR TERMINAL SYSTEM (ARTS II), CONSISTING OF HIGHLY COMPLEX ELECTRONIC HARDWARE TO PROVIDE ALPHANUMERICS TO FOLLOW AND IDENTIFY EACH TARGET ON RADAR DISPLAY SCREENS AT TERMINAL AIR TRAFFIC CONTROL FACILITIES.

TO ASSURE THAT ONLY QUALIFIED FIRMS RECEIVE THE RFTP, THE FAA PUBLISHED QUALIFICATION CRITERIA COVERING DESIGN, ENGINEERING, FABRICATION AND DELIVERY EXPERIENCE IN THE COMMERCE BUSINESS DAILY ON OCTOBER 11, 1973. ELEVEN INTERESTED FIRMS SUBMITTED QUALIFICATION DATA IN RESPONSE THERETO. BASED ON A REVIEW OF THE DATA, THE PROCURING ACTIVITY DETERMINED THAT EIGHT FIRMS WERE QUALIFIED TO RECEIVE A COPY OF THE SOLICITATION. OF THE EIGHT QUALIFIED FOR PARTICIPATION IN THE PROCUREMENT, SIX FIRMS, INCLUDING A JOINT VENTURE OF METIS CORPORATION (METIS) AND GENERAL TELEPHONE AND ELECTRONICS INFORMATION SYSTEMS, INC., SUBMITTED TECHNICAL PROPOSALS IN RESPONSE TO STEP ONE OF THE SOLICITATION. THESE PROPOSALS WERE FORWARDED TO AN FAA TECHNICAL EVALUATION TEAM FOR EVALUATION AND CLASSIFICATION IN COMPLIANCE WITH THE RFTP, WHICH STATED IN PERTINENT PART:

*** THE TECHNICAL PROPOSALS, AS SUBMITTED, WILL BE CATEGORIZED AS (I) ACCEPTABLE, (II) REASONABLY SUSCEPTIBLE OF BEING MADE ACCEPTABLE BY ADDITIONAL INFORMATION CLARIFYING OR SUPPLEMENTING, BUT NOT BASICALLY CHANGING THE PROPOSALS AS SUBMITTED, OR (III) IN ALL OTHER CASES, UNACCEPTABLE. ANY PROPOSAL WHICH MODIFIES, OR FAILS TO CONFORM TO THE ESSENTIAL REQUIREMENTS OR SPECIFICATIONS OF, THIS REQUEST FOR UNPRICED TECHNICAL PROPOSALS WILL BE CONSIDERED NON-RESPONSIVE AND CATEGORIZED AS UNACCEPTABLE. ***

THE FAA TECHNICAL EVALUATION TEAM EVALUATED THE TECHNICAL PROPOSALS ON THE BASIS OF FIVE MAJOR AREAS AS FOLLOWS: (1) UNDERSTANDING OF THE REQUIREMENTS; (2) PROPOSED METHOD OF APPROACH; (3) MAJOR PROBLEM AREAS AND PROPOSED SOLUTIONS; (4) TECHNICAL CAPABILITIES FOR DESIGN AND PRODUCTION; AND (5) PROGRAM MANAGEMENT CAPABILITY INCLUDING CONSULTANTS AND SUBCONTRACTING. THE RECORD INDICATES THAT ON MAY 6, 1974, THE EVALUATION TEAM CONCLUDED THAT WHILE NONE OF THE TECHNICAL PROPOSALS WERE ACCEPTABLE AS SUBMITTED, FIVE OF THE SIX PROPOSALS WERE DETERMINED TO BE REASONABLY SUSCEPTIBLE OF BEING ACCEPTABLE. ONLY THE TECHNICAL PROPOSAL SUBMITTED BY METIS WAS FOUND TO BE TECHNICALLY UNACCEPTABLE AND NOT REASONABLY SUSCEPTIBLE OF BEING MADE ACCEPTABLE BY ADDITIONAL INFORMATION CLARIFYING OR SUPPLEMENTING, BUT NOT BASICALLY CHANGING THE PROPOSAL AS SUBMITTED. THE TECHNICAL EVALUATION TEAM DETERMINED THAT ANY ATTEMPT TO UPGRADE THE METIS PROPOSAL WOULD REQUIRE UNREASONABLE EFFORTS ON THE PART OF THE GOVERNMENT AND A MAJOR RESUBMISSION OF THE PROPOSAL WITH SUBSEQUENT REEVALUATION. ACCORDINGLY, THE CONTRACTING OFFICER, BY LETTER DATED MAY 15, 1974, ADVISED METIS THAT ITS PROPOSAL WAS TECHNICALLY UNACCEPTABLE AND INDICATED THE PRINCIPAL AREAS IN WHICH THE PROPOSAL WAS CONSIDERED DEFICIENT. AT THE REQUEST OF METIS, A DEBRIEFING CONFERENCE WAS HELD ON MAY 21, 1974, WHEREAT FAA TECHNICAL PERSONNEL DESCRIBED THE WEAKNESSES/INADEQUACIES OF THE METIS TECHNICAL PROPOSAL AND EXPLAINED THE REASONS FOR ITS REJECTION.

FOLLOWING THE DEBRIEFING CONFERENCE, METIS, BY LETTER DATED MAY 28, 1974, PROTESTED TO OUR OFFICE THE PROCURING ACTIVITY'S REJECTION OF ITS TECHNICAL PROPOSAL AND ITS DECISION NOT TO ISSUE THE SECOND-STEP INVITATION FOR BIDS TO THE FIRM. METIS CONTENDS THAT THE DETERMINATION THAT ITS TECHNICAL PROPOSAL WAS UNACCEPTABLE RESULTED FROM ARBITRARY, CAPRICIOUS AND INCORRECT ACTION ON THE PART OF THE CONTRACTING OFFICER AND HIS IMMEDIATE SUPERIORS. IN ADDITION, THE PROTESTER ALLEGES THAT WHILE THE OTHER COMPETITORS WERE PERMITTED TO CLARIFY AND MODIFY THEIR TECHNICAL PROPOSALS, THE PROCURING ACTIVITY ADVISED METIS THAT REVISIONS TO ITS PROPOSAL WOULD NOT BE CONSIDERED.

THE CONTRACTING OFFICER'S LETTER OF MAY 15, 1974, ADVISING METIS THAT ITS PROPOSAL WAS DETERMINED TECHNICALLY UNACCEPTABLE DESCRIBED THE PRINCIPAL AREAS IN WHICH THE PROPOSAL WAS CONSIDERED DEFICIENT. IN ADDITION, THE FAA, IN ITS ADMINISTRATIVE REPORT OF AUGUST 12, 1974, FURNISHED OUR OFFICE A DETAILED SUMMARY OF THE ARTS II TECHNICAL EVALUATION TEAMS'S EVALUATION OF THE METIS PROPOSAL. SINCE COPIES OF SUCH DOCUMENTS WERE FURNISHED TO THE PROTESTER, WE WILL NOT RESTATE THE SPECIFIC REASONS FOR REJECTION OF THE METIS PROPOSAL. METIS, IN TURN, SPECIFICALLY REBUTTED ALL OF THE PARTICULAR DEFICIENCIES STATED IN THE FAA'S LETTER OF MAY 15, AND IN ADDITION, RESPONDED WITH A DETAILED REBUTTAL OF THE EVALUATION PERFORMED BY THE FAA TECHNICAL PERSONNEL. ALTHOUGH WE HAVE EXAMINED THE SUBMISSIONS OF BOTH THE FAA AND METIS, FOR THE REASONS STATED BELOW WE BELIEVE IT WOULD SERVE NO USEFUL PURPOSE TO RECOUNT THESE ESSENTIALLY TECHNICAL ARGUMENTS.

WHILE IT IS CLEAR THAT THERE IS STRONG DISAGREEMENT BETWEEN METIS AND THE FAA AS TO THE VALIDITY OF THE TECHNICAL DEFICIENCIES RAISED BY THE TECHNICAL EVALUATION TEAM, IT IS NOT THE FUNCTION OF OUR OFFICE TO RESOLVE TECHNICAL DISPUTES OF THIS NAUTRE. SEE 52 COMP. GEN. 382, 385 (1972). THE OVERALL DETERMINATION OF THE RELATIVE DESIRABILITY AND TECHNICAL ADEQUACY OF PROPOSALS IS PRIMARILY A FUNCTION OF THE PROCURING AGENCY AND IN THIS REGARD, WE HAVE RECOGNIZED THAT THE CONTRACTING OFFICER ENJOYS A REASONABLE RANGE OF DISCRETION IN THE EVALUATION OF PROPOSALS AND IN THE DETERMINATION OF WHICH OFFER OR PROPOSAL IS TO BE ACCEPTED FOR AWARD AS IN THE GOVERNMENT'S BEST INTEREST. MATTER OF KIRSCHNER ASSOCIATES, INC., B- 178887(2), APRIL 10, 1974; B-176077(6), JANUARY 26, 1973. SINCE DETERMINATIONS AS TO THE NEEDS OF THE GOVERNMENT ARE THE RESPONSIBILITY OF THE PROCURING ACTIVITY CONCERNED, THE JUDGMENT OF SUCH ACTIVITY'S SPECIALISTS AND TECHNICIANS AS TO THE TECHNICAL ADEQUACY OF PROPOSALS SUBMITTED IN RESPONSE TO THE AGENCY'S STATEMENT OF ITS NEEDS ORDINARILY WILL BE ACCEPTED BY OUR OFFICE. B-175331, MAY 10, 1972. SUCH DETERMINATIONS WILL BE QUESTIONED BY OUR OFFICE ONLY UPON A CLEAR SHOWING OF UNREASONABLENESS, AN ARBITRARY ABUSE OF DISCRETION, OR A VIOLATION OF THE PROCUREMENT STATUTES AND REGULATIONS. MATTER OF OHIO STATE UNIVERSITY; CALIFORNIA STATE UNIVERSITY, B-179603, APRIL 4, 1974; B 176077(6), SUPRA. THIS IS PARTICULARLY THE CASE WHERE THE PROCUREMENT INVOLVES EQUIPMENT OF A HIGHLY TECHNICAL OR SCIENTIFIC NATURE AND THE DETERMINATION MUST BE BASED ON EXPERT TECHNICAL OPINION. SEE 46 COMP. GEN. 606 (1967).

HERE, ALTHOUGH METIS HAS PROVIDED DETAILED TECHNICAL ARGUMENTS IN SUPPORT OF ITS PROTEST, WE ARE UNABLE TO CONCLUDE ON THE BASIS OF OUR EXAMINATION OF THE RECORD THAT THE PROCURING ACTIVITY'S DETERMINATION THAT ITS TECHNICAL PROPOSAL WAS UNACCEPTABLE WAS ARBITRARY OR UNREASONABLE. APPEARS FROM THE RECORD THAT THE PROPOSAL WAS EVALUATED IN ACCORDANCE WITH THE SPECIFICATIONS AND THE STATED EVALUATION CRITERIA AND WAS FOUND TO BE TECHNICALLY UNACCEPTABLE AND NOT REASONABLY SUSCEPTIBLE OF BEING MADE ACCEPTABLE WITHOUT MAJOR REVISIONS ON THE BASIS OF A COMPREHENSIVE EVALUATION, SUPPORTED BY A 21 PAGE DETAILING OF SPECIFIC DEFICIENCIES. SEE NOTHING IN THE RECORD WHICH INDICATES THAT THIS EVALUATION WAS IMPROPER OR UNFAIR OR THAT THE CONTRACTING AGENCY ABUSED ITS DISCRETION IN FINDING THE METIS PROPOSAL UNACCEPTABLE. WHILE METIS OBVIOUSLY DOES NOT AGREE WITH THE FAA'S EVALUATION OF ITS PROPOSAL, THERE IS NOTHING IN THE RECORD TO INDICATE THAT THE REJECTION OF THE METIS PROPOSAL WAS THE RESULT OF ANYTHING OTHER THAN THE REASONABLE JUDGMENT OF THE FAA'S TECHNICAL EXPERTS. WE DO NOT BELIEVE IT IS APPROPRIATE FOR THIS OFFICE TO QUESTION THE FAA'S TECHNICAL JUDGMENT WHEN THE JUDGMENT HAS A REASONABLE BASIS MERELY BECAUSE THERE MAY BE DIVERGENT TECHNICAL OPINIONS AS TO THE ACCEPTABILITY OF A PROPOSAL. THUS, WE ARE UNABLE TO AGREE WITH METIS' CLAIM THAT ITS PROPOSAL SHOULD HAVE BEEN REGARDED AS ACCEPTABLE. SEE MATTER OF HONEYWELL, INC., B-181170, AUGUST 8, 1974.

IN REGARD TO THE PROTESTER'S SECOND ALLEGATION THAT IT WAS NOT PERMITTED TO CLARIFY OR MODIFY ITS TECHNICAL PROPOSAL, THE RFTP ADVISED OFFERORS TO SUBMIT PROPOSALS WHICH WERE "FULLY AND CLEARLY ACCEPTABLE" WITHOUT ADDITIONAL EXPLANATION OR INFORMATION SINCE THE GOVERNMENT RESERVED THE RIGHT TO DETERMINE THE ACCEPTABILITY OR UNACCEPTABILITY OF A PROPOSAL SOLELY ON THE BASIS OF THE PROPOSAL AS SUBMITTED WITHOUT REQUESTING OR PERMITTING THE SUBMISSION OF FURTHER INFORMATION. THE RFTP FURTHER PROVIDED THAT:

*** IF THE GOVERNMENT DEEMS IT NECESSARY TO OBTAIN SUFFICIENT ACCEPTABLE PROPOSALS TO ASSURE ADEQUATE PRICE COMPETITION IN THE SECOND STEP, OR DEEMS IT OTHERWISE DESIRABLE IN ITS BEST INTEREST, THE GOVERNMENT MAY, IN ITS SOLE DISCRETION, REQUEST ADDITIONAL INFORMATION FROM OFFERORS OF PROPOSALS WHICH THE GOVERNMENT CONSIDERS REASONABLY SUSCEPTIBLE OF BEING MADE ACCEPTABLE BY ADDITIONAL INFORMATION CLARIFYING OR SUPPLEMENTING BUT NOT BASICALLY CHANGING ANY PROPOSALS AS SUBMITTED AND, FOR THIS PURPOSE, THE GOVERNMENT MAY DISCUSS ANY SUCH PROPOSAL WITH THE OFFEROR. ***

IN THIS REGARD, FEDERAL PROCUREMENT REGULATIONS (FPR) SEC. 1-2.503 1(B)(4) (1964 ED.) STATES:

IF, HOWEVER, IT IS DETERMINED AT ANY TIME THAT A TECHNICAL PROPOSAL IS NOT REASONABLY SUSCEPTIBLE TO BEING MADE ACCEPTABLE, IT SHOULD BE CLASSIFIED AS UNACCEPTABLE AND NO DISCUSSIONS OF IT NEED THEREAFTER BE INITIATED.

WHILE THE SOLICITATION PROVIDED THE CONTRACTING OFFICER WITH AUTHORITY TO REQUEST ADDITIONAL INFORMATION FROM OFFERORS OF PROPOSALS WHICH THE GOVERNMENT CONSIDERED REASONABLY SUSCEPTIBLE OF BEING MADE ACCEPTABLE, IT DID NOT SO PROVIDE FOR PROPOSALS DETERMINED UNACCEPTABLE. FURTHERMORE, CONCERNING THE ABOVE QUOTED PROVISION OF THE FPR, WE STATED IN B-165457, MARCH 18, 1969:

WE VIEW THE ABOVE PROVISION AS INVESTING IN THE TECHNICAL AND PROCUREMENT PERSONNEL *** CONSIDERABLE LATITUDE IN FRAMING THE REQUIREMENTS TO BE MET BY PROPOSALS AND IN THEIR EVALUATION. *** WHETHER A PROPOSAL NEEDS CLARIFICATION TO BE DEEMED ACCEPTABLE, WHETHER A PROPOSAL CAN BE MADE ACCEPTABLE BY CLARIFICATION AND REASONABLE EFFORT BY THE GOVERNMENT ***ARE ALL MATTERS OF JUDGMENT ON THE PART OF THE PROCUREMENT AGENCY, WHICH WE WILL NOT QUESTION UNLESS THERE IS EVIDENCE OF FRAUD, PREJUDICE, ABUSE OF AUTHORITY, ARBITRARINESS OR CAPRICIOUS ACTION.

SINCE WE FIND NO EVIDENCE OF SUCH CONDUCT IN THE INSTANT CASE, THERE IS NO BASIS FOR OUR OFFICE TO QUESTION THE DETERMINATION NOT TO SEEK CLARIFICATION OR MODIFICATION OF THE PROTESTER'S PROPOSAL. MATTER OF F.A. VILLALBA COMPANY, B-179286, JANUARY 30, 1974.

FINALLY, THE PROTESTER HAS ALLEGED OTHER ACTION BY THE AGENCY WHICH IT IS CONTENDED DEMONSTRATES ARBITRARINESS ON THE PART OF THE FAA DESIGNED TO ALLOW ONLY A FEW SPECIFIC CONTRACTORS TO PARTICIPATE IN THE SECOND STEP OF THE PROCUREMENT. SPECIFICALLY, METIS CONTENDS THAT TWO FIRMS WERE DETERMINED TO BE QUALIFIED SOURCES WHILE NOT SATISFYING THE SOURCE- SELECTION CRITERIA; THAT THE PERFORMANCE REQUIREMENTS OF THE SYSTEM WERE SIGNIFICANTLY DEGRADED TO ALLOW A FAVORED CONTRACTOR TO PARTICIPATE MORE EFFECTIVELY IN THE PROCUREMENT; AND THAT THERE WAS EXPRESSED ANTAGONISM BY CONTRACTING OFFICIALS AGAINST METIS' PARTICIPATION IN THE PROCUREMENT. SINCE METIS HAS NOT ADVANCED ANY EVIDENCE TO SUPPORT THESE CHARGES OR TO CONTROVERT THE ADMINISTRATIVE POSITION THAT THE PROCUREMENT WAS CONDUCTED FAIRLY IN ACCORDANCE WITH THE APPLICABLE REGULATIONS, THERE IS NO BASIS FOR ACTION BY OUR OFFICE.

HOWEVER, WE NOTE THAT THE FAA REPORTS THAT IN ORDER TO ASSURE THAT ONLY QUALIFIED FIRMS RECEIVED COPIES OF THE RFTP, THE AGENCY, PRIOR TO THE ISSUANCE OF THE SOLICITATION, PUBLISHED QUALIFICATION CRITERIA IN THE COMMERCE BUSINESS DAILY. IN THIS CONNECTION, WE HAVE HELD THAT ANY SYSTEM FOR PREQUALIFICATION OF OFFERORS, OR OTHERWISE LIMITING THE NUMBER OF OFFERS, IS TO SOME DEGREE IN DEROGATION OF THE PRINCIPAL TENET OF THE COMPETITIVE SYSTEM THAT BIDS OR PROPOSALS BE SOLICITED IN SUCH A MANNER AS TO PERMIT THE MAXIMUM AMOUNT OF COMPETITION CONSISTENT WITH THE NATURE AND EXTENT OF THE SERVICES OR ITEMS TO BE PROCURED. SEE 53 COMP. GEN. 209 (1973). THE QUESTION TO BE ANSWERED IN DETERMINING THE VALIDITY OF ANY PROCEDURE LIMITING THE EXTENT OF COMPETITION IS NOT WHETHER IT RESTRICTS COMPETITION PER SE, BUT WHETHER IT UNDULY RESTRICTS COMPETITION. IN THE INSTANT CASE, WHILE THE VALIDITY OF FAA'S PREQUALIFICATION PROCEDURE WAS NOT RAISED AS AN ISSUE OF PROTEST, IT APPEARS TO US THAT THE PROCEDURE WAS UNDULY RESTRICTIVE OF COMPETITION AS NO JUSTIFICATION FOR THE PROCEDURE, OTHER THAN ADMINISTRATIVE EXPEDIENCY, WAS STATED, AND AS SEVERAL FIRMS WERE EXCLUDED FROM COMPETING ON THE BASIS OF THEIR NONCOMPLIANCE WITH THE PREQUALIFICATION CRITERIA. ACCORDINGLY, WE ARE RECOMMENDING TO THE ADMINISTRATOR, FAA, THAT UTILIZATION OF THE ABOVE PROCEDURE BE ELIMINATED FROM FUTURE PROCUREMENTS IN THE ABSENCE OF APPROPRIATE JUSTIFICATION FOR ITS INCLUSION. 53 COMP. GEN. 209, SUPRA. FOR THE FOREGOING REASONS, METIS' PROTEST IS DENIED.