BNUMBER:  B-261297; B-261297.2
DATE:  September 11, 1995
TITLE:  EEV, Inc.

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Matter of:   EEV, Inc.

File:        B-261297; B-261297.2

Date:     September 11, 1995
                                                                                                               
Timothy J. Waters, Esq., and Jon W. van Horne, Esq., McDermott, Will & 
Emery, for the protester.
Gena E. Cadieux, Esq., and Richard D. Vergas, Esq., Department of 
Energy, for the agency.
Adam Vodraska, Esq., and James A. Spangenberg, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.
                                                                                                                
DIGEST

Where there is no reasonable possibility that the protester was 
prejudiced by the agency's failure to obtain revised prices to reflect 
its decision, after receipt of proposals, to not evaluate options as 
contemplated by the solicitation, because there is no suggestion that 
the offerors' pricing would have changed had they known that the 
options would not be evaluated, the protest will not be sustained.
                                                                                                                  
DECISION

EEV, Inc. protests the award of a contract by the Stanford Linear 
Accelerator Center (SLAC), a Department of Energy (DOE) management and 
operating (M&O) contractor, to Philips Semiconductors under request 
for proposals (RFP) No. 7563 for high energy klystron tubes.[1]

We deny the protest.

The RFP requested detailed responses from the offerors demonstrating 
their compliance with the specification and delivery requirements.  
The RFP also requested unit prices and extended prices on a proposal 
form for alternative base quantities of four, five, six, seven, and 
eight klystron tubes in accordance with Stanford University 
Specification No. PS-341-320-01-R1 (hereafter R1).  Prices for 
alternative base quantities were solicited because of budgetary 
considerations.  The RFP also requested unit and extended prices for 
two options, exercisable by SLAC on or before December 31, 1998, for 
the rework of one failed klystron tube and for two additional klystron 
tubes.  Under the RFP, award was to be made to the technically 
acceptable offeror meeting the required delivery date, "based on the 
lowest price for the [SLAC] selected [base] quantity [i.e., four, 
five, six, seven, or eight] totaled with" the offered option item 
prices.  SLAC reserved the right to conduct discussions on the 
proposals or to make award on the prices initially quoted.

In response to offeror concerns raised during a pre-proposal 
conference, SLAC issued an addendum to the RFP which requested 
additional pricing for klystron tubes meeting different SLAC 
specification requirements (hereafter R2).  The prices for the R2 
klystron tubes were to be submitted on an "alternate proposal form" 
that used the same format as the original proposal form.  

Philips submitted its prices on the original proposal form based on 
the original R1 specification and offered eight tubes for $2,160,000 
(unit price of $270,000).  Philips priced the optional rework of a 
failed klystron tube at $230,000 and priced the optional two tubes at 
$200,000 each.

EEV submitted its prices only on the alternate proposal form, offering 
eight R2 klystron tubes for an extended price of $2,162,400 (unit 
price of $270,300), making it the second low offeror for this number 
of klystron tubes.[2]  Instead of entering one firm price, or 
percentage of price, for the optional rework item as requested, EEV 
listed a schedule of various possible repairs based on percentages of 
the new tube price depending on the nature of the repairs.  EEV 
proposed these percentages as maximum prices and stated it would quote 
lower prices where possible depending on the cost of the repairs for 
specific cases.  EEV also stated on its alternate proposal form that 
it reserved the right to declare a klystron tube beyond economic 
repair.  EEV's prices for the optional two tubes were identical to its 
base quantity unit prices for quantities of six, seven, or eight 
tubes, contingent on SLAC's initially ordering four, five, or six base 
quantity tubes, respectively.[3]

After receipt of offers, SLAC determined that, of the four offerors, 
only EEV and Philips would be considered for award.  SLAC officials 
visited both EEV's and Philips's manufacturing facilities to determine 
whether the firms were technically capable of meeting the delivery 
schedule and to inspect their facilities.  During these visits, 
offeror officials answered technical questions about their proposals.  
SLAC officials did not bring up any problems regarding EEV's pricing 
of its option items.

Both EEV and Philips were found technically acceptable.  SLAC then 
determined that Philips's and EEV's prices were sufficiently low to 
allow the purchase of eight klystron tubes and that there was no 
longer any need for the options.[4]  Consequently, the option items 
were not evaluated, and award was made to Philips based on its low 
total price for the eight base quantity tubes.   

Upon learning of SLAC's award to Philips, EEV protested that SLAC had 
disregarded the award criteria by making award without considering the 
option prices.  SLAC responded that EEV's pricing for the option items 
was "nonresponsive" because a firm price for the option items could 
not be determined.  EEV contends, however, that SLAC should have 
discussed EEV's "nonresponsive" pricing during the site visit; that 
SLAC should have provided offerors with an opportunity to submit 
revised proposals when it determined that the option items were no 
longer needed; and that Philips submitted its offer based on the 
assertedly superseded R1 specifications.

SLAC's failure to base award on the option items was contrary to the 
terms of the solicitation stating that option prices would be 
considered in making the award selection.  See Data Test Corp., 
B-193205, May 7, 1979, 79-1 CPD  312.  Upon determining that its 
needs had changed after proposals had been received, in that it no 
longer required the option items, SLAC should have provided offerors 
with an opportunity to submit revised proposals.  See Department of 
State--Recon., B-243974.4, May 18, 1992, 92-1 CPD  447; Afftrex, 
Ltd., B-231033, Aug. 12, 1988, 88-2 CPD  143.  Moreover, since this 
is a negotiated procurement, where the concept of responsiveness is 
not strictly applicable, see Ascom Hasler Mailing Sys., Inc., 
B-257327, Sept. 22, 1994, 94-2 CPD  137, and since we consider that 
discussions did take place here,[5] EEV's problematic pricing of its 
option items was a matter that should have been raised by SLAC during 
its discussions with that firm.  See Microeconomic Applications, Inc., 
B-258633.2,  Feb. 14, 1995, 95-1 CPD  82.

However, competitive prejudice is an essential element of every viable 
protest, and where no reasonable possibility of prejudice is shown or 
is otherwise evident from the record, our Office will not sustain a 
protest, even if a deficiency in the procurement is apparent.  
Diverco, Inc., B-259734, Apr. 21, 1995, 95-1 CPD  209; Network 
Solutions Inc., B-234569, May 15, 1989, 89-1 CPD  459.  Although EEV 
contends that offerors' proposal pricing strategies "could" have 
changed if offerors had known that the option items were no longer 
required, EEV has offered nothing to explain how the omission of 
option prices from the evaluation reasonably could have affected the 
price for its base bid item for the quantity of eight tubes selected 
by SLAC.  We first note that Philips, in response to the protest, 
stated categorically that it does not price its products based on 
spares or option acquisition programs.  In addition, there is no 
indication that had EEV known beforehand that the option items would 
be excluded its base price for the quantity of eight tubes would have 
been different.  Indeed, EEV's unit prices for the optional tubes were 
identical to unit prices for the base quantity tubes and dependent on 
the quantity of base bid tubes initially ordered by SLAC.  There is 
thus no reasonable possibility for believing that either offeror would 
have lowered its base prices had it known that the options would not 
be evaluated.  See Browning-Ferris Indus. of the S. Atlantic, Inc.; 
Reliable Trash Serv. Co. of Md., Inc., B-217073; B-218131, Apr. 9, 
1985, 85-1 CPD  406.[6]

EEV's contention that Philips improperly submitted an offer based only 
on the original R1 specification, and not on the alternate R2 
specification, which EEV alleges supersedes the R1 specification, is 
without merit.  The RFP, as amended, requested that offerors submit a 
proposal based on the R1 specification and a proposal based on the R2 
specification.  The alternate R2 specification did not replace or 
amend the original R1 specification, and klystron tubes meeting either 
specification were acceptable to the agency.  Any price difference 
attributable to EEV's offering to a specification different from what 
Philips offered to is the result of a business decision by EEV to 
submit only a proposal based on the alternate R2 specification.[7]  
See Techniarts Eng'g, B-238520.5, B-238520.6, Dec. 31, 1991, 92-1 CPD  
20.[8]
 
The protest is denied.

 \s\ Ronald Berger
 for Robert P. Murphy
     General Counsel

1. A klystron tube is a large vacuum tube used for amplifying 
microwaves.  The tube itself is approximately three feet high and is 
surrounded by shielding, and, with the attached socket and vacuum and 
cooling system connections, the entire device is about seven feet 
high.  Continuous wave klystron tubes, such as those solicited here, 
are used with circular electron machines for particle physics 
research.  

2. EEV's price was low for each of the other base quantities.

3. EEV did not price optional tubes based on SLAC's initially ordering 
seven or eight base quantity tubes.

4. According to SLAC, there was no need for the two optional klystron 
tubes and the prices proposed for tube rework made it more economical 
to perform the repairs in-house or to issue a purchase order to the 
supplier of the tube for repairs at the time the work was necessary.

5. Because the communications during SLAC's visit to the protester's 
manufacturing facility involved information essential for, and 
considered in, determining the acceptability of EEV's proposal, we 
think the communications between SLAC and the protester constituted 
discussions.  See The Hotel San Diego, B-260971, July 7, 1995, 95-2 
CPD  4.

6. We need not consider EEV's contention that Philips's option pricing 
was unbalanced since SLAC did not evaluate the option items. 

7. We note that the two other offerors responded to both 
specifications, with one offering identical prices for each, and the 
other offering reduced prices for the alternate R2 specification.

8. EEV also contends that Philips did not properly sign the proposal.  
This contention has no merit.  Philips's proposal contained a 
signature by a Philips official, who could apparently bind the company 
firm, that evidenced that Philips intended to be bound by its offer.  
See Southern Technologies Inc., B-256190, May 23, 1994, 94-1 CPD  
321.