BNUMBER: B-275725.3
DATE: October 17, 1997
TITLE: ST Aerospace Engines Pte. Ltd., B-275725.3, October 17, 1997
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Matter of:ST Aerospace Engines Pte. Ltd.
File: B-275725.3
Date:October 17, 1997
Arthur I. Leaderman, Esq., and Claire E. Kresse, Esq., Smith, Pachter,
McWhorter & D'Ambrosio, P.L.C., for the protester.
Karl A. Oliver, Esq., Mahoney, Hagberg & Rice, for Standard Aero Ltd.,
and David R. Johnson, Esq., and James C. Dougherty, Esq., Gibson, Dunn
& Crutcher, for National Airmotive Corporation, the intervenors.
B. J. Braun, Esq., U. S. Coast Guard, for the agency.
Jennifer Westfall-McGrail, Esq., and Christine S. Melody, Esq., Office
of the General Counsel, GAO, participated in the preparation of the
decision.
DIGEST
1. Where, in response to General Accounting Office decision
sustaining protest, discussions are reopened after offerors' prices
have been revealed, agency may properly limit the scope of revisions
offerors may make to their proposals and not allow offerors to revise
their prices.
2. Agency reasonably reopened limited technical discussions with,
and requested new limited best and final offers (BAFO) from, all
offerors in the competitive range in response to General Accounting
Office decision sustaining protest and recommending a reopening of
limited technical discussions with, and the solicitation of a new
limited BAFO from, one of the offerors.
DECISION
ST Aerospace Engines Pte. Ltd. (STA Engines) protests the decision of
the U.S. Coast Guard to reopen technical discussions with, but not to
allow the submission of revised price proposals from, all competitive
range offerors under request for proposals (RFP) No.
DTCG38-94-R-30006, for the overhaul and repair of C-130 T56 engine
reduction gearboxes and torquemeters. The protester contends that, if
offerors are allowed to revise their technical proposals, they should
also be allowed to revise their prices.
We deny the protest.
BACKGROUND
On March 19, 1997, we sustained a protest by STA Engines against award
under this solicitation to Standard Aero Ltd., whose proposal had been
selected as representing the best value to the government. ST
Aerospace Engines Pte. Ltd.,
B-275725, Mar. 19, 1997, 97-1 CPD para. 161. We found that the agency had
improperly downgraded STA Engines' proposal, to its competitive
prejudice, based on past performance information[1] pertaining to one
of its affiliates, ST Aerospace Systems, without clarifying the
relationship between the companies and without affording STA Engines
an opportunity to comment on the information during discussions. We
recommended that the agency reopen discussions with STA Engines to
clarify the extent of involvement of STA Systems in its proposed
effort, and that it then solicit another round of best and final
offers (BAFO) and evaluate them to determine which offer represented
the best combination of technical merit and price.
STA Engines subsequently requested that we modify our decision to
delete the recommendation for another round of BAFOs. The protester
argued that a reopening of the price competition would create the risk
of an auction since offerors' prices had been disclosed by the agency
during the debriefing process; it also argued that the impropriety
could otherwise be remedied without impairment to the integrity of the
procurement process by limiting the scope of reopened negotiations.
We agreed with the protester, and, accordingly, modified our decision
to recommend that discussions with the protester be confined to
clarifying the extent of involvement of STA Systems in STA Engines'
proposed effort (i.e., that the protester not be allowed to revise
other aspects of its technical proposal or its price), and that a new
BAFO then be solicited from STA Engines only.
The agency decided to reopen discussions addressing past performance
issues with all offerors in the competitive range and to solicit BAFOs
from all addressing this area only. The contracting officer explains,
in responding to the protest, that another offeror whose proposal was
in the competitive range had experienced the same lack of opportunity
to discuss past performance as the protester, and that to remedy this
error and to ensure maximum fairness to all competitors, he had
determined that our recommendation should be expanded. By letter
dated June 12, the contracting officer advised offerors that
discussions bearing on past performance would be reopened and that
they could submit updated past performance information, but that they
would not be permitted to revise other aspects of their technical
proposals or their prices. The letter also asked offerors to
revalidate their offers (which had expired), and advised them that if
they had not done so by June 20, the offers would not be considered
during the reevaluation process.
STA Engines responded to the agency's communication by letter dated
June 20. The protester objected to the agency decision to reopen
discussions with all offerors in the competitive range, but stated
that it would participate in the competition if the agency would allow
offerors to revise their prices as well as their technical proposals.
The protester argued that the agency should adhere to either the
original recommendation (which called for the submission of new BAFOs
from all competitive range offerors) or to the revised recommendation
(which called for the submission of a new limited BAFO from STA
Engines only), but that it should not develop a hybrid calling for the
submission of new limited BAFOs by all competitive range offerors.
All of the other competitive range offerors responded by revalidating
their BAFOs.
By letter dated July 3, the Coast Guard notified STA Engines that,
because it had failed to revalidate its BAFO, the agency did not have
a valid offer from it, and that its offer was therefore excluded from
the competitive range. On July 10, STA Engines protested to our
Office.
DISCUSSION
STA Engines argues that the agency should allow offerors to revise
their prices if it allows them to revise their technical proposals.
The protester maintains that "[a] contemporary technical submittal
should, as a matter of law, be correlated with contemporary prices."
Protest, July 10, 1997, at 6.
As a preliminary matter, the agency argues that STA Engines' protest
is untimely since STA Engines was informed of the agency decision to
reopen discussions with, and to solicit limited BAFOs from, all
offerors on June 12, but did not file its protest with our Office
until July 10. In this regard, our Bid Protest Regulations require
that protests based on other than solicitation improprieties be filed
within 10 days after the basis of protest is, or should have been,
known. 4 C.F.R. sec. 21.2(a)(2) (1997). The Coast Guard argues that the
only way that STA Engines' protest would be timely would be if we
considered the protester's June 20 letter to the agency an
agency-level protest. The agency insists that we should not regard
the June 20 letter as such because STA Engines emphasized throughout
the letter that it hoped to avoid a protest. Rather than a protest,
the Coast Guard contends, the letter should be viewed as an attempt by
the protester to have its concerns resolved informally, consistent
with the mandate of Federal Acquisition Regulation (FAR) sec. 33.103(b)
that "[p]rior to submission of an agency protest, all parties shall
use their best efforts to resolve concerns raised by an interested
party at the contracting officer level through open and frank
discussions."
We think that the protester's letter of June 20 effectively
constituted an agency-level protest. A letter does not have to state
explicitly that it is intended as a protest--and indeed may contain
references to a forthcoming protest--for it to be so considered; it
need only express dissatisfaction with an agency decision and request
corrective action. Mammoth Firewood Co., B-223705, Sept. 4, 1986,
86-2 CPD para. 261 at 2. STA Engines' letter of June 20 did both; thus,
in our view, it may properly be characterized as an agency-level
protest. Since STA Engines filed its protest with our Office within
10 days of the adverse agency action on its June 20 letter, its
protest is timely. 4 C.F.R. sec. 21.2(a)(3).
Regarding the protester's argument that an agency must allow offerors
to revise their prices if it allows them to revise aspects of their
technical proposals, it is true that, as a general rule, offerors may
revise any aspect of their proposals in response to discussions,
including portions of their proposals that were not the subject of
discussions. Krueger Int'l, Inc., B-260953.4, Oct. 4, 1995, 96-1 CPD para.
235 at 4. Where discussions are reopened after an award has been made
to remedy a defect in the procurement process, and aspects of
offerors' technical and/or price proposals have been revealed, the
scope of discussions and proposal revisions may be limited, however.
Serv-Air, Inc., B-258243.4, Mar. 3, 1995, 95-1 CPD para. 125 at 2-3;
System Planning Corp., B-244697.4, June 15, 1992, 92-1 CPD para. 516 at
3-4; URS Int'l, Inc., et al., B-232500, B-232500.2, Jan. 10, 1989,
89-1 CPD para. 21 at 6-7. For example, where the awardee's price has been
revealed (so that a reopening of the price competition would lead to
the risk of an auction), and where the technical matters to be
discussed during the reopened negotiations are unlikely to have an
impact on price, offerors may be prohibited from revising their
prices. Krueger Int'l, Inc., supra, at 4-5.
The Coast Guard maintains that this is such a case: offerors' prices
have been revealed, meaning that a reopening of the price competition
would lead to the risk of an auction, whereas permitting offerors to
discuss and update their past performance information is unlikely to
have a material impact on their prices. The protester has offered no
rebuttal to the agency position. Although it asserted in its initial
letter of protest that offerors' prices are now stale, it has offered
no support for this argument in any of its submissions; thus, we have
no basis upon which to conclude that prices are now so stale as to
outweigh concern over the possibility of an auction. Further, the
protester has offered no explanation as to why discussing and updating
past performance information should be expected to have an impact on
prices. Absent evidence that either of the agency's conclusions is
unfounded, we see no basis for questioning the agency determination
that not reopening the price competition would best preserve the
integrity of the procurement process.
In commenting on the agency report, STA Engines raises an additional
argument: that the contracting officer's justification for reopening
discussions with, and requesting revised BAFOs from, all offerors in
the competitive range is merely a pretext, and that his real goal is
to circumvent our recommendation in order to undermine the ascendant
position that STA Engines would allegedly achieve in the competition
if our recommendation were implemented. The protester insists that
the sole infirmity in the process was the agency's failure to discuss
with it the nature of its affiliation with STA Systems, and that the
agency should therefore have implemented the corrective action that we
recommended, which was tailored to remedy this defect.
First, to the extent the protester is now objecting to the agency's
failure to implement the precise corrective action that we
recommended, its protest is untimely. Although the protester
complained about the agency's failure to adhere to our recommendation
in its agency-level protest, it did not raise the issue in its July 10
protest to our Office; in the latter letter, it argued only that, if
offerors were to be permitted to revise their technical proposals,
they should also be permitted to revise their prices. Since the
protester did not object to the agency's failure to implement the
corrective action that we recommended within 10 days after receiving
the agency's letter of July 3, which placed it on constructive notice
that its agency-level protest had been denied, but instead waited
until it filed its comments on the agency report on August 21, its
protest on this issue is untimely. See 4 C.F.R. sec. 21.2(a)(3).
In any event, the contracting officer emphatically denies that his
purpose in reopening discussions with, and requesting an additional
round of BAFOs from, all competitive range offerors was to undermine
the protester's competitive position, and we find no support in the
record for the protester's allegation. Moreover, we think that it was
within the agency's discretion to go beyond our recommendation and
reopen discussions with all offerors in the competitive range,
regardless of whether or not there was a defect in the process
relating to another offeror. In this regard, we have held that the
details of implementing our recommendations for corrective action are
within the sound discretion and judgment of the contracting agency,
and we will not question an agency's ultimate manner of compliance, so
long as it remedies the procurement impropriety that was the basis for
the decision's recommendation. QuanTech, Inc., B-265869.2, Mar. 20,
1996, 96-1 CPD para. 160 at 2. Further, the solicitation of an additional
round of BAFO from all offerors in the competitive range is consistent
with our original recommendation for corrective action and with the
guidance in the FAR on which that original recommendation was based.
See FAR sec. 15.611(c) ("If discussions are reopened [after receipt of
BAFOs], the contracting officer shall issue an additional request for
[BAFOs] to all offerors still within the competitive range.") We
revised our original decision to delete the recommendation for another
round of BAFOs and to instead recommend the reopening of discussions
with, and the solicitation of a new limited BAFO from, STA Engines
only, not because we thought that it would be improper to solicit new
limited BAFOs from all offerors in the competitive range, but rather
to avoid a price auction and because a reopening of discussions with,
and the solicitation of a new limited BAFO from, STA Engines was the
minimum that was required to remedy the defect in the process. To the
extent that the agency wishes to do more than the minimum, we see no
basis for objecting to its actions.
The protest is denied.
Comptroller General
of the United States
1. Past performance was the most important of five technical
evaluation factors.