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.