BNUMBER:  B-272230.4
DATE:  September 5, 1996
TITLE:  Touchstone Textiles, Inc.

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Matter of:Touchstone Textiles, Inc.

File:     B-272230.4

Date:September 5, 1996

Mary C. Sorrell, Esq., for the protester.
Elizabeth R. Bagwell, Esq., Department of the Navy, for the agency.
Behn Miller, Esq., and Christine S. Melody, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Agency properly eliminated protester's initial offer from further 
consideration in negotiated competition for deck refurbishment 
services where protester's best and final offer (albeit submitted 
late) modified its initial offer and therefore operated as a 
revocation of the initial offer.

DECISION

Touchstone Textiles, Inc. protests the award of a contract to Bay 
Harbor Company, Inc. under request for proposals (RFP) No. 
N00604-96-R-0010, issued by the Department of the Navy for deck 
covering services at Pearl Harbor, Hawaii.  Touchstone submitted an 
initial proposal for this procurement but failed to submit its best 
and final offer (BAFO) by the scheduled BAFO closing time.  Although 
Touchstone concedes that the contracting officer properly rejected its 
late BAFO (as required by Federal Acquisition Regulation (FAR)  sec.  
15.412 (FAC 90-39), see Cyber Digital Inc., B-270107, Jan. 24, 1996, 
96-1 CPD  para.  20), Touchstone contends that it should have received 
contract award based upon its initial proposal--which was technically 
acceptable and lower-priced than the awardee's.[1]

We deny the protest.

As a general rule, once offerors submit BAFOs, award must be based on 
the BAFOs and not upon prior versions of the proposals.[2]  See FAR  sec.  
15.611(d); Department of the Army--Recon., B-251527.3, Sept. 17, 1993, 
93-2 CPD  para.  178.  Since an offeror's submission of a BAFO typically 
demonstrates an intent by that offeror to modify and/or replace an 
earlier offer, the submission of a BAFO generally operates to 
extinguish the agency's right to accept the earlier offer.  Department 
of the Army--Recon., supra.

In its protest, Touchstone contends that although it submitted a BAFO, 
this submission did not operate to extinguish its earlier offer.  
Touchstone maintains that the untimeliness of its BAFO submission 
rendered the BAFO invalid for all purposes; Touchstone argues that 
because a contracting agency is not permitted to accept or consider a 
late BAFO, the Navy must proceed as though it never received any 
submission from Touchstone but its initial offer.  Since its initial 
offer was technically acceptable, Touchstone contends that the Navy 
was required to make contract award to Touchstone based upon that 
offer, which was lower-priced than the awardee's BAFO.  We disagree.

Given that Touchstone submitted a BAFO which modified its initial 
proposal terms, the agency properly eliminated Touchstone's initial 
offer from further consideration.  While Touchstone correctly argues 
that the agency could not consider its BAFO for award as a result of 
its untimeliness, we do not think the agency was free to ignore the 
intent conveyed by the submission of a modified offer.  Touchstone's 
BAFO set forth substantially different--and higher--pricing terms from 
its initial offer; although this submission was untimely and could not 
be considered a viable offer, it nonetheless demonstrated an intent by 
the protester to modify and replace its initial offer terms.[3]  Our 
conclusion that the agency could not ignore the expressed intent in 
the untimely BAFO is consistent with FAR  sec.  52.215-10(h), which 
provides that proposals may be withdrawn by written notice at any time 
before award.  In our view, the changed terms in Touchstone's BAFO 
clearly operated as a revocation of its initial offer.  Accordingly, 
the agency properly decided not to consider the initial offer for 
award.  Id.

The protest is denied.

Comptroller General
of the United States

1. The RFP (which was issued on December 12, 1995) contemplated the 
award of a fixed-price, indefinite quantity requirements contract to 
the lowest-priced, technically acceptable offeror.

2. This rule is consistent with common law contracting principles, 
which establish that an offeree's power of acceptance is terminated 
when the offeree receives from the offeror a manifestation of an 
intention--such as a revised offer--not to enter into the proposed 
contract.  See Restatement (Second) Contracts  sec.  42 (1981).

3. On April 17, the agency issued an amendment which changed one of 
the RFP's  specifications by requiring a more expensive material 
covering; when the agency issued the BAFO request, it expected the 
offerors' prices to increase.