and also provides procedures to insure contract awards based on realistic cost proposals, the term "discussions" within the meaning of DAR 3-805.3 does not include authorized audits.
Moreover, the T-ARC 7 procurement record discloses no instance in which an offeror modified or revised its proposal in the course of, or as a result of, a DCAA audit. Accordingly, the Court concludes that the DCAA audits conducted on the offerors' T-ARC 7 proposals do not constitute "discussions" within the meaning of DAR 3-805.3.
c. The Cost Realism Conferences.
The Cost Realism Team began its review upon submission of the cost proposals on April 5, 1979. In developing its evaluation: "(T)he Cost Realism Team worked primarily from the data furnished by the offerors in their cost and Technical/Management proposals, supplemented by data from recent and on-going audits, information available within the Command, and interviews with all offerors." Jt.Ex. S, p. 1. The "interviews with all offerors" referred to were the Coast Realism Conferences, which took place shortly after the cost proposals were submitted. The conferences entailed unilateral presentations by the offerors to explain the basis of elements of their proposals, but did not afford any offeror any opportunity to revise its proposal. As such, the conferences do not constitute "discussions" within the meaning of DAR 3-805.3. Sellers, Conner & Cuneo, B-176182, 52 Comp.Gen. 358 (1972).
d. The Navy Letters of March 8 and May 31, 1979.
During its preliminary evaluation of the technical/management proposals, the SSEB determined that additional information was needed to clarify specific areas of each proposal. See Jt.Ex. V, p. 4. Accordingly, on March 8, 1979, the contracting officer notified each offeror by letter that the necessary items of information should be submitted by March 15, 1979. See Jt.Exs. E-J. The Navy used the same transmittal text for each letter, although the information requested of the specific offeror varied. The information requested dealt primarily with such matters as resumes of key personnel and breakdown of certain labor and man-day estimates. Each of the offerors supplied the requested information by return letter. See Jt.Exs. K-P. There is no dispute that the SSEB relied on the requested information in its evaluation of the offerors' proposals. See Jt.Ex. V, p. 4.
DAR 2-405(ii) specifically includes an offeror's "failure to furnish required information concerning the number of bidder's employees" within the category of "minor informalities and irregularities."
and DAR 3-805.5(b) provides that "communications with offerors required to resolve (minor information and irregularities) shall not be considered discussions within the meaning of this paragraph 3-805." The Court concludes that, pursuant to DAR 2-405 and 3-805.5(b), the Navy's letters of March 8, 1979, and the offeror's responses thereto involved "minor informalities and irregularities" and did not constitute discussions within the meaning of DAR 3-805.3. The Court views the requested information as clarifying in nature and can perceive no prejudicial effect to any offeror resulting from its submission to the SSEB.
On May 31, 1979, the Navy sent a letter
to plaintiff Sun Ship stating that "your cost proposal . . . does not contain any amount representing the Facilities Capital Cost of Money" and requesting Sun Ship to "clarify whether or not you intend to charge the Government" for that cost. The letter further stated: "Please be advised that should you intend to (charge the Government) and modify your cost proposal, the Government's evaluation of your total cost to perform would be increased to take that into account." Sun Ship's response letter of June 7, 1979, stated that "Sun Ship does not intend to charge the Government."
DAR 3-805.5(d)(1) provides: "If the contracting officer suspects a mistake, he shall advise the offeror and request verification. If the offeror verifies his proposal, award may be made. This procedure shall not be considered "discussions" within the meaning of this paragraph 3-805." The Navy's letter of May 31, 1979, to Sun Ship and the response thereto are clearly within the verification procedures of DAR 3-805.5(d)(1). To allow the Navy's use of the word "modify" to control is to allow form to control substance. Accordingly, the Court concludes that no "discussion" within the meaning of DAR 3-805.3 occurred by reason of the May 31, 1979, letter to Sun Ship and the response thereto.
On May 31, 1979, the Navy also sent a letter to NASSCO which stated in part: "(T)he purpose of this letter is to request clarification from (NASSCO) on what alternative facilities would be used in the event the Government-owned dry-dock # 1 is unavailable for the T-ARC 7 program, and what modifications, if any, would be required to your proposal as a result thereof." Jt.Ex. K-10. NASSCO's response, by letters dated June 4 and June 26, 1979, was if NASSCO were ultimately required to utilize alternative dry-dock arrangements, it would entail a "very minor" incremental cost, estimated to be approximately $ 45,000.00.
The Court concludes that the Navy's letter and NASSCO's response thereto were purely clarifying in nature. NASSCO was not accorded the opportunity to revise its proposal and did not submit any modification or revision. The Navy merely asked what modification would be required if the Government-owned dry-dock # 1, in San Diego, California, were unavailable after July 2, 1981. The unavailability of the dry-dock was uncertain and it was reasonable for the Navy to make an inquiry regarding this uncertainty. The Court can perceive no prejudicial effect on any offeror resulting from the information submitted to the Navy in response to the Navy's inquiry since the SSAC determined that all the offerors' facilities were "significantly above the threshold required for the T-ARC 7 program" Jt.Ex. V, p. 25. Moreover, the availability of dry-dock facilities is pertinent to NASSCO's "responsibility" or ability to perform the contract, and communications relating to the responsibility of an offeror do not constitute "discussions". Hercules Corp., supra.
In sum, the Court finds that the Navy letters of March 8, 1979, and May 31, 1979, and the respective responses thereto do not constitute "discussions" within the meaning of DAR 3-805.3.
In accordance with the foregoing, the Court concludes that the Navy properly invoked 10 U.S.C. § 2304(g) and DAR 3-805.1(v) in support of its determination to award the T-ARC 7 contract on the basis of initial proposals.
In accordance with the foregoing, the Court concludes: 1) that the Navy's decisions with regard to the T-ARC 7 procurement did in fact have a rational basis, and 2) the T-ARC 7 procurement procedure did not involve any clear and prejudicial violations of applicable statutes or regulations. Therefore, defendants' motion for summary judgment in this action is granted and this case is dismissed. An order in accordance with the foregoing will be issued of even date herewith.