TITLE:  Networks Electronic Corporation, B-290666.3, September 30, 2002
BNUMBER:  B-290666.3
DATE:  September 30, 2002
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Networks Electronic Corporation, B-290666.3, September 30, 2002

   DOCUMENT FOR PUBLIC RELEASE                                                
The decision issued on the date below was subject to a GAO Protective      
Order.  This redacted version has been approved for public release.        

   Decision
    
Matter of:   Networks Electronic Corporation
    
File:            B-290666.3
    
Date:              September 30, 2002
    
Peter B. Jones, Esq., Jones & Donovan, for the protester.
Sally A. Rule, Esq., New Hampshire Ball Bearings, the intervenor.
John D. Inazu, Esq., Department of the Air Force, for the agency.
Paul I. Lieberman, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
    
Protest challenging agency's decision to conduct recompetition as
corrective action taken in response to a General Accounting Office protest
is denied; there is no basis to conclude that the only legally permissible
option is for the agency to make a directed award to the protester where
the agency had conducted discussions after receipt of final proposals with
only one offeror.  The agency's remedy consisting of disclosure of
comparable information to both offerors, after which new final proposals
will be received, is unobjectionable in view of the broad discretion
afforded to agencies in fashioning corrective action.  
DECISION
    
Networks Electronic Corporation (NEC) protests the corrective action taken
by the Department of the Air Force consisting of the disclosure of
comparable information to both offerors under solicitation No.
FD2030-02-54711, and a request for new final proposals from both offerors,
after which the Air Force will conduct a new evaluation and best value
determination.  The protester contends that, under the circumstances
presented, the only remedy legally available to the Air Force is to make
an award to NEC based on NEC's extant proposal.
    
We deny the protest.
    
This remedy was taken as corrective action by the Air Force after NEC had
protested to our Office the Air Force's decision to make an award to New
Hampshire Ball Bearings (NHBB).  NEC's protest, as supplemented,
questioned the propriety of the agency's determination that NHBB's
proposal represented the best value, and in particular alleged that the
Air Force had failed to recognize and evaluate the superior delivery
schedule offered under NEC's proposal.  After the agency filed its report,
it became apparent that the Air Force had conducted discussions with NHBB
only, after the receipt of proposals.  As a result, the Air Force decided
to take corrective action in the form of issuing an amendment extending
the due date for final proposals and requesting final proposals from both
offerors, after receipt of which it will perform a new evaluation and make
a new best value determination and, if necessary, terminate for
convenience NHBB's contract and make a new award.  The Air Force further
determined that it would first disclose NEC's proposed pricing and
delivery schedule in order to make equal information available to both
offerors because NHBB's information in this regard had been disclosed, and
that it would continue to stay contract performance during this
recompetition.  Based on this proposed corrective action, our Office
dismissed NEC's protest.
    
NEC objects to this corrective action, arguing that *the only legally
available and appropriate remedy or corrective action in this case is
termination of NHBB's contract and award to NEC.*  Protester's Comments,
July 19, 2002, at 1.  NEC's argument is based on its contention that NHBB
had submitted an ineligible proposal because it contained a nonconforming
warranty clause, and that the subsequent interchange between the Air Force
and NHBB amounted to an improper extension of the due date for proposals,
thereby permitting NHBB to untimely modify its proposal in order to make
it acceptable.  In these circumstances, NEC contends that since its
conforming, fully qualified and reasonably priced offer was received on
time, the only remedy available to the Air Force was to award to NEC.  Id.
at 2-3. We disagree.
    
NEC's argument is that NHBB's timely received proposal was ineligible for
award because the proposal contained a warranty clause which allegedly
imposed certain impermissible restrictions and rendered the proposal
unacceptable.  This premise is factually misplaced; the warranty clause at
issue was both added and subsequently modified by NHBB during the
discussions that occurred after NHBB's proposal had been submitted, after
the deadline for submission had passed.  As the Air Force correctly points
out, the record establishes that the NHBB proposal as timely submitted did
not contain the allegedly offending warranty clause and thus was fully
eligible for award.  Agency Report, July 24, 2002, at 3 n.2.   The
deficiency which prompted the corrective action is related to the
discussions which were conducted after the closing time for receipt of
proposals, and the record does not provide any basis to conclude that NEC
was the only offeror that timely submitted an acceptable proposal. 
    
The underlying solicitation to purchase certain connecting links from
approved sources for Pratt & Whitney engines was issued under a
justification and approval authorizing other than full and open
competition.  The solicitation provided for a fixed-price award on the
basis of a best‑value determination considering price, past
performance and mission capability, with price equal in importance to the
other two factors combined.  Under mission capability, delivery was one of
three listed subfactors, and the solicitation provided that proposals that
did not meet the government's delivery schedule would be ranked, with
those that more nearly meet the schedule rated higher.  The solicitation
also provided that while discussions were not contemplated, the government
reserved the right to hold discussions.
    
NHBB submitted a proposed price of $2,384,910, while NEC's price was
$2,696,474.  NHBB's proposal received a past performance confidence
evaluation of very good, while NEC's proposal was evaluated as
satisfactory.  The agency evaluated the proposals as essentially equal
under the mission capability factor, with both receiving evaluations of
technically acceptable under each subfactor.  With respect to the delivery
schedule subfactor, the agency determined that neither offer met the
government's delivery schedule, and that while NEC's proposal offered a
smaller initial delivery slightly earlier than NHBB's larger initial
delivery, NHBB's overall proposed delivery schedule would slightly better
meet the agency needs because delivery would be at an overall faster rate;
the net result was that the proposed delivery schedules were evaluated as
substantially equal and acceptable.  Accordingly, the Air Force determined
to award to NHBB on the basis of its higher evaluation under past
performance and its lower price, whereupon NEC filed its initial protest
after receiving a debriefing.
    
The agency report, which provided an explanation and defense of the
evaluation and source selection decision, also included certain e-mail and
telefacsimile correspondence between agency personnel and NHBB personnel,
with references to contemporaneous phone calls as well, which are dated
and occurred after the amended May 1, 2002, closing date for proposal
receipt.  In this correspondence, NHBB is asked for and provides changes
regarding the warranty clause and its delivery schedule.  Our Office
conducted a conference call with the parties concerning these documents,
after which the agency determined to take the above-outlined corrective
action. 
    
Contracting officials in negotiated procurements have broad discretion to
take corrective action where the agency determines that such action is
necessary to ensure fair and impartial competition.  Patriot Contract
Servs. LLC et al., B‑278276.11 et al.,  Sept. 22, 1998, 98-2 CPD P:
77 at 4.  Where the agency has reasonable concern that there were errors
in the procurement, even if the protest could be denied, we view it as
within the agency's discretion to take corrective action, which may
include the amendment of a solicitation and the request for and evaluation
of another round of final proposals where the agency made the decision in
good faith, without the intent to change a particular offeror's technical
ranking or to avoid an award to a particular offeror.  Federal Sec. Sys.,
Inc., B-281745.2, Apr. 29, 1999, 99-1 CPD P: 86 at 5.
    
In our view, the corrective action taken here by the Air Force is
unobjectionable under the broad discretion afforded to contracting
agencies in this regard.  There is no evidence of record which suggests
that the corrective action was improper or that the agency acted in other
than good faith.[1]  As explained above, there is no legal basis to compel
the Air Force to award to NEC here on the basis of its higher priced,
lower technically rated extant proposal.  Where, as here, an agency has
improperly conducted discussions with only one offeror after receipt of
proposals, reopening the competition and seeking another round of amended
proposals is an appropriate way to remedy the underlying deficiency and
permit offerors a fair opportunity to compete.  International Res. Group,
B-286683, Jan. 31, 2001, 2001 CPD P: 35.  The  disclosure of pricing and
other information in another offeror's proposal, as here, is permissible
because the possibility that the contract may not have been awarded based
on a true determination of the most advantageous proposal has a more
harmful effect on the integrity of the competitive procurement system than
the fear of an auction; the statutory requirements for competition take
priority over any possible constraints on auction techniques.  Federal
Sec. Sys., Inc., supra, at 4.  Accordingly, the agency's corrective action
of disclosure and placing the offerors on an even footing, and providing
them with an equal opportunity to compete by submitting new proposals is
unobjectionable here.
    
The protest is denied.
    
Anthony H. Gamboa
General Counsel  
    
    
    
    

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   [1] NEC asserts that the agency's discussions with NHBB constitute
favoritism and indelibly taint the procurement, rendering award to NEC as
the only available remedy.  Protester's Comments, July 30, 2002, at 3. 
Regardless of how this assertion is styled, NEC is actually alleging that
the Air Force is biased in favor of NHBB.  Because government officials
are presumed to act in good faith, we do not attribute unfair or
prejudicial motives to them on the basis of inference or supposition. 
Therefore, where a protester alleges bias on the part of government
officials, the protester must provide credible evidence clearly
demonstrating a bias against the protester or for the awardee and that the
agency's bias translated into action that unfairly affected the
protester's competitive position.  Dynamic Aviation-Helicopters, B-274122,
Nov. 1, 1996, 96-2 CPD P: 166 at 4.  The Air Force's conduct of
discussions with NHBB after the receipt of proposals does not provide a
basis to attribute prejudicial motives to the agency.  Similarly, NEC's
objection that the Air Force's delay of several weeks in imposing a stay
after its protest was initially filed has given NHBB an unfair and
impermissible advantage is unsupported, and does not provide a basis to
require a directed award to NEC in these circumstances.