Burroughs Corp. v. United States

617 F.2d 590, 27 Cont. Cas. Fed. 80,269, 223 Ct. Cl. 53, 1980 U.S. Ct. Cl. LEXIS 84
United States Court of Claims·Decided March 19, 1980·No. No. 251-78·Published·Cited by 201 cases

Opinion

KUNZIG, Judge,

delivered the opinion of the court:

This is a suit for proposal preparation costs by a disappointed offeror in a negotiated procurement for an automatic data processing (ADP) system. Plaintiff argues the award of an ADP contract by the Mine Enforcement and Safety Administration (MESA) to a competing offeror, Honeywell Information Systems, Inc., (Honeywell) was arbitrary and capricious under the standards delineated in Keco Industries, Inc. v. United States, 192 Ct. Cl. 773, 428 F.2d 1233 (1970) (hereinafter, "Keco I”) and Keco Industries, Inc. v. United States, 203 Ct. Cl. 566, 492 F.2d 1200 (1974) (hereinafter, "Keco II”).1 Consequently, plaintiff seeks reimbursement for the costs it incurred in preparing its proposal. Plaintiffs motion for summary judgment under [57] Rule 101 was met with a cross-motion for summary judgment by the Government, which brings the case before us. We conclude the actions of the Government, as represented by the contracting officer, were not arbitrary and capricious toward the plaintiff-offeror, Burroughs. Therefore, plaintiffs claim for proposal costs is denied.

I.

FACTS

The procurement in dispute began with a Request for Proposals (RFP) No. S2751008 issued by MESA, United States Department of the Interior,2 on July 1, 1975. The RFP, sent to sixty-one potential vendors, sought proposals for the acquisition by MESA of an ADP computer system for a sixty-five month period, if option rights under the contract were completely exercised.

To be eligible for award of the fixed-price contract contemplated by this particular negotiated procurement RFP, an offeror had successfully to pass specified "benchmark” tests utilizing the equipment it proposed to furnish under the contract. Award was to be made to the offeror submitting the lowest priced offer (as evaluated) of those offerors who had successfully passed the benchmark tests. But the Government was completely free to reject any or all offers received. The RFP also required that the successful offeror rerun the benchmark tests upon installation of the computer system under the contract.

Plaintiff Burroughs, Honeywell, and other companies submitted timely proposals. In late November and early December, MESA determined that plaintiff and Honeywell had successfully passed the benchmark tests, and thus were eligible for award.

On December 16, 1975, MESA informed plaintiff and Honeywell they were required to submit their "best and final” offers no later than 2:00 p.m. EST on December 31, 1975. The office of MESA’s contracting officer for the procurement was in Denver, Colorado. But to give the [58] offerors more time for offer preparation, the contracting officer authorized the delivery of best and final offers to MESA’s headquarters in Arlington, Virginia, though he was in Denver, since both plaintiff and Honeywell prepared their offers at their respective offices in nearby McLean, Virginia.

Plaintiff submitted its best and final offer to MESA at 1:30 p.m. EST in Arlington, Virginia, on December 31,1975. Honeywell submitted its best and final offer at 1:50 p.m. Honeywell's offer, however, was accompanied by a letter which stated in pertinent part:

* * * The enclosed cost tables contain an error. They are currently being reprinted and will be in your hands by 3 PM today. The arithmetic error is approximately $120,000 in evaluated cost and will result in an increase in cost to the tables enclosed.

The contracting officer (in Denver) was advised of these circumstances by telephone at about 2:00 p.m. EST on December 31, 1975. Plaintiffs lowest offer was for an estimated evaluated price of $1,944,561 for a proposed "systems life of 65 months.” Honeywell’s "uncorrected” cost tables reflected an estimated evaluated price of $1,784,395. The contracting officer by telephone accepted Honeywell’s statement of an arithmetic error of approximately $120,000 and decided that $120,000 would be the maximum change to the cost tables that he would accept. Thus, the contracting officer determined Honeywell had submitted an acceptable offer consisting of the original $1,784,395 stated in its proposal plus the $120,000 indicated in its letter for a total of $1,904,395; substantially below plaintiffs offer of $1,944,561. Honeywell’s corrected cost tables were delivered shortly thereafter at 2:45 p.m. EST. The tables indicated a total estimated evaluated price of $1,877,749, an increase of only $93,354 over the "uncorrected” cost tables but well within the error of "approximately $120,000” noted in the earlier communication. With the belief he was acting within the authority of Section 1.7 of the RFP,3 ("Late [59] Offers and Notification of Withdrawals”) the contracting officer considered the $93,354 change to be a late modification of an otherwise successful proposal which made the proposal more favorable to the Government. Honeywell’s bid was deemed acceptable on the basis of its corrected cost tables (the full value of said correction having been publicly and timely submitted prior to 2:00 p.m. December 31,1975).

On January 1, 1976, the Burroughs and Honeywell proposals were brought to Denver for further evaluation. Both proposals were found to be technically responsive to the requirements of the RFP by the benchmark committee and MESA’s technical evaluation committee. The proposals were also reviewed during the first week of January 1976 by a contract specialist on the contracting officer’s staff, Kathryne Hughes. Miss Hughes discovered that Honeywell’s best and final offer did not mention, nor did it show, several system components which had been shown on Honeywell’s benchmark proposal. The three missing components were one MXF 6004, one MTF 1045 and one MTF 1041.4 Miss Hughes mentioned these omissions to the contracting officer, who was assured by a representative of Honeywell that the omissions were not significant in nature. Indeed, they were the same items already timely covered by the price correction Honeywell submitted at 1:50 p.m. on December 31, 1975, and had already been approved in the earlier benchmark proposal for technical proficiency. [60] Honeywell submitted corrected pages of its best and final offer reincorporating the missing components. Based on Honeywell’s assurances and the reports of the benchmark and technical evaluation committees, the contracting officer determined that the Honeywell proposal was technically responsive.5

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Burroughs Corp. v. United States, 617 F.2d 590, 27 Cont. Cas. Fed. 80,269, 223 Ct. Cl. 53, 1980 U.S. Ct. Cl. LEXIS 84 (cc 1980).

617 F.2d 590 (Burroughs Corp. v. United States) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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