7\ THE COMPTROLLER GENERALDECISION . OF THE UNITED STATES

k4~< WA.S HI NGTO N. D . C. 205 4 8

/ 0/FILE: B-193752 DATE: June 8, 1979

MATTER OF: Cardion Electronics ?2L(t-

j7~ ATTER O F7Xf: ' •ovI 6o6/ 7- gAcifr 5DIGEST:

1. Prospective offeror which chose not to submitproposal is "interested party" to protestlater that RFP amendment during negotiationshas changed work so substantially that agencyshould cancel RFP and initiate new procurement.

2. Protest by nonofferor that RFP amendment haschanged work so substantially that new procure-ment should be initiated was timely filedwithin 10 working days after protester receivedcopy of RFP amendment.

3. December 1978 protest asserted that changes inRFP are so substantial as to warrant its can-cellation. In April 1979, after agency reportand conference, protester asserted for firsttime that sole proposal received was unacceptable.Latter contention--separate basis of protest--isuntimely, as protester knew or should have knownbasis for protest in December 1978 or January 1979.Also, protester's initiation of Freedom of Infor-mation Act request in April 1979, seeking infor-mation regarding evaluation of sole proposal,indicates failure to diligently pursue matter.

4. RFP for design and manufacture of electronicair navigation equipment contemplated that offerorspropose individual technical approaches to meetingagency's needs. After negotiations with sole offeror,RFP amendment made changes in equipment configura-tion, delivery schedule and various technicalspecifications. Agency position that changes inrequirements are not so substantial as to warrantcomplete revision of RFP (i.e., cancellation andresolicitation) is not clearly shown to have noreasonable basis.

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5. Protester, seeking cancellation of RFP, relieson GAO decisions which found that modifications tocontracts were so substantial that work covered bymodifications should have been subject of new pro-curement. Argument is not persuasive, as scope ofchanges which may permissibly be made to RFPwithout requiring cancellation and initiation ofnew procurement is greater than scope of changespermitted to existing contract.

6. Federal Procurement Regulations § 1-3.101 requirementfor maximum practical competition in negotiatedprocurements does not in itself require agencyto cancel RFP where only one proposal is received.

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Table of Contents

Page

I. Introduction . . . . . . . . . . . . . . 4

II. Procedural Issues . . . . . . . . . . . 6

A. Interested Party Requirement . . . 6

B. Timeliness . . . . . . . . . . . . 8

III. Protester's, Agency's, and InterestedParties' Positions . . . . . . . . . 11

IV. Discussion . . . . . . . . . . . . . 18

V. Conclusion . . . . . . . . . . . . . . 25

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Cardion Electronics has protested to our Officeconcerning request for proposals (RFP) No. LGM-8-7247, issued by the Federal Aviation Administration(FAA).

I. Introduction

The RFP, copies of which were distributed onApril 20, 1978, contemplated the award of a fixed-price incentive contract for the design, fabrication,installation and testing of solid state VOR/VORTACequipment. FAA has described this equipment as asystem which combines civilian and military subsystemsto provide aeronautical navigation information toaircraft, and which will replace aging vacuum tube-typeequipment at hundreds of sites around the country.

The RFP (Enclosure 2, Page 1) stated in part:

"The Technical Proposals shallclearly and fully demonstrate thatthe prospective offeror has a validand practical design and engineeringsolution to the technical problemsinherent in the design and engineeringof equipment meeting the requirementsof the specification. To this end,the technical proposals shall explainwhy the proposed design, includingtechnical methods and engineeringapproach, was selected as the solutionto such problems. * * * It is essentialthat the technical proposal shall setforth the offeror's proposed design,including its specific applicationof 'state-of-the-art' scientific theoryand engineering techniques, with sufficientparticularity * * *."

The RFP evaluation criteria listed "Proposedmethod of approach" as the most important criterionand stated that it was worth more than one-half thetotal value of all evaluation criteria.

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On May 4, 1978, Cardion and other prospectiveofferors attended a preproposal conference. OnMay 17, 1978, Cardion representatives met withFAA officials, and Cardion in its words "* * *proposed that the VORTAC system be separated intoits basic components in order to achieve activecompetition * * *." FAA did not implement thissuggestion and there is no indication in the recordthat Cardion filed a protest with FAA prior tothe closing date for receipt of initial proposals(June 1, 1978).

One proposal--submitt, by a joint ventureconsisting of ITT Avio& s and Wilcox Electric, Inc.(ITT-Wilcox)--wa8 received. A Cardion message toFAA dated June 1, 1978, stated in part:

"AFTER CAREFUL CONSIDERATIONCARDION ELECTRONICS WOULD LIKE TO ADVISETHAT, AT THIS TIME, WE WILL NOT SUBMITA PROPOSAL FOR THE SUBJECT PROCUREMENT.OUR REASONS ARE AS FOLLOWS:

"1) CARDION HAS TECHNICAL CAPABILITY,THE PRODUCTION CAPACITY, AND THE FINANCIALRESOURCES TO RESPOND AS A PRIME CONTRACTORFOR THE VORTAC PROGRAM. HOWEVER, WE FINDIT PRUDENT NOT TO MAKE A MAJOR PROPOSALINVESTMENT WITH THE ANTICIPATED LOW PROB-ABILITY OF BEING CONSIDERED AS THE MOSTACCEPTABLE OFFEROR FOR THE SUBJECTNEGOTIATED PROCUREMENT.

"2) AS A SUBCONTRACTOR, CARDION HASNOT BEEN ABLE TO ESTABLISH A SATISFACTORYTEAMING OR SUBCONTRACT ARRANGEMENT WITHANY OF THE LEADING NAVIGATIONAL AIDSMANUFACTURERS WHICH, IN OUR JUDGEMENT,WOULD BE MUTUALLY BENEFICIAL OR IN THEBEST INTEREST OF THE GOVERNMENT.

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"SHOULD THE GOVERNMENT ELECT TO CHANGETHE PROCUREMENT AND SOLICIT SEPARATE TURNKEYSYSTEMS FOR THE VOR AND THE DME TACAN EQUIP-MENTS WE WOULD RECONSIDER OUR DECISION.* * * 11

In the course of negotiations with ITT-Wilcox,changes in the RFP specifications were made. Thesewere reflected in amendment No. 6 to the RFP, datedSpetember 29, 1978. In December 1978 Cardion requestedand received a copy of this amendment from FAA. Cardionprotested to our Office on December 19, 1978, assertingthat the RFP should be canceled and a new solicitationissued. No award has been made.

II. Procedural Issues

A. Interested Party Requirement

ITT argues that Cardion is not an "interestedparty" to protest to our Office because (1) Cardionis unable to manufacture a key VORTAC componentand thus would not have been eligible for awardhad it submitted a proposal in June 1978, and (2)Cardion "no-bid" the procurement because of itsbusiness judgment of the risks involved, and nothingin the protest relates to or cures the reasons whyCardion elected not to compete.

Under section 20.1(a) of our Bid Protest Pro-cedures, 4 C.F.R. Part 20 (1978), a party must be"interested" in order to have its protest consideredby our Office. Whether a party is sufficientlyinterested depends on its status in relation to theprocurement, the nature of the issues raised, andhow these circumstances show the existence of adirect and/or substantial economic interest on thepart of the protester. See Die Mesh Corporation,58 Comp. Gen. 111 (1978), 78-2 CPD 374.

In Die Mesh, we pointed out that a prospectiveofferor which did not timely protest the terms ofthe RFP and deliberately chose not to submit a

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proposal was not an interested party to protest laterthat the eventual awardees had received preferentialtreatment from the Government. In that situation,the class of parties eligible to protest as to whichof several offerors should properly have receivedthe awards consisted essentially of disappointedofferors (i.e., the parties which had chosen tocompete in the procurement and whose direct economicinterests would have been affected by the allegedpreferential treatment).

In the present case, Cardion is not a non-offeror protesting as to which of several competingofferors should properly receive an award under theRFP. Rather, Cardion is protesting essentially Qnt.the basis that the RFP has-been-so su-b-stiallychanged t t _hat a newprocu reme nreflectingqthe-c~hangad requ irementsshouldbe initiated. Cardion's protest, or a protestby any other party similarly situated, involves adirect economic interest, i.e., an opportunity forthe party to submit a proposal under the new RFPand compete for an award. Unlike Die Mesh, thereis no other identifiable group of potential protesterswhose members arguably have a more direct interestin asserting this basis for protest.

In our view, whether a Cardion proposalunder the RFP would have been found unacceptable,or whether Cardion's motivation for not submittinga proposal was its business judgment of the risksinvolved, are not pertinent to this inquiry. Noneof the decisions cited by ITT in this connectioninvolved a similar factual situation and we do notregard them as controlling.

We see no reason why Cardion is not sufficientlyinterested to protest that changes in the RFP are sosubstantial that the RFP should be canceled and anew procurement initiated.

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B. Timeliness

FAA and ITT question the timeliness of theprotest in certain respects. Initially, they pointout that prior to the closing date for receipt ofinitial proposals (June 1, 1978), Cardion unsuccess-fully requested FAA to break out certain VORTACcomponents for separate procurement. FAA and ITTview the present protest as an additional anduntimely attempt to accomplish the same objective.Also, they note that while Cardion cites a changein the type of contract for VORTAC installationand testing as part of the substantial changeseffected by amendment No. 6, the original RFPspecifically indicated that the contract type mightbe changed.

To whatever extent Cardion's protest can beread as objecting to the terms and conditions ofthe RFP, it is untimely, because protests whichare based upon apparent improprieties in an RFPas originally issued must be filed prior to theclosing date for receipt of initial proposals.See 4 C.F.R. § 20.2(b)(1). The primary ground ofCardion's protest, however, is that the aggregateof changes in the specifications effected by amendmentNo. 6 has altered the RFP so substantially that itshould be canceled and a new RFP issued. We do notsee why this reasonably should have been apparentto Cardion from the contents of the original RFP.The principal ground of protest is not based uponimproprieties in the original RFP, but on the waythe procurement has been conducted after the closingdate for receipt of initial proposals. The applicabletimeliness standard in these circumstances is 4 C.F.R.§ 20.2(b)(2), i.e., protests other than those basedupon apparent solicitation improprieties must be filedwithin 10 working days after the basis for protestis known or should have been known, whichever is earlier.See, in this regard, Telos Computing, Inc., 57 Comp.Gen. 370 (1978), 78-1 CPD 235; Computer SciencesCorporation, 57 Comp. Gen. 627 (1978), 78-2 CPD 85.

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ITT maintains, however, that insofar as theprotest is based upon amendment No. 6 to the RFP,it is untimely because Cardion was aware of theJune-September 1978 negotiations between FAA andITT-Wilcox and the matters covered therein, anddid not protest within 10 working days after amend-ment No. 6 was issued on September 29, 1978. ITTdoes not explain how Cardion was aware of whatwas happening in the negotiations.

Cardion does not specifically state to whatextent it had knowledge of the negotiations betweenFAA and ITT-Wilcox. The protester maintains essentiallythat it was not in a position to protest until itactually received a copy of amendment No. 6. In thisregard, FAA states that Cardion requested a copy ofthe amendment in early December 1978, and in itsletter of protest dated December 18, 1978, Cardionstates that it received a copy of amendment No. 6on December 7, 1978.

The identity of offerors in a negotiatedprocurement and the content of discussions withthem normally are not public information prior toaward. Thus, where an after-award protest is basedon the contents of a competitor's proposal, aprotester's reasonable statement as to when itbecame aware of its basis for protest will beaccepted if unrefuted. Honeywell InformationSystems, Inc., 56 Comp. Gen. 505 (1977), 77-1 CPD256; see also Computer Machinery Corporation,55 Comp. Gen. 1151, 1152 (1976), 76-1 CPD 358.

In the present case, the principal basisof protest relates to the extent of changes madein an RFP during an ongoing negotiated procurement.As discussed infra, a number of changes were made,involving matters such as equipment configuration,various individual technical specifications, anddelivery and test schedules. In these circumstances,for the protester to assert that it was not awareof its basis for protest until it received a copyof RFP amendment No. 6, which formally reflectedthe scope of the changes, does not seem unreasonable.

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ITT has not presented any evidence that the protesterknew or reasonably should have known about the extentof the changes at an earlier date. Accordingly, webelieve the protest on this basis is timely.

Finally, ITT in its April 10, 1979, letter toour Office argues that Cardion's attempt to expandits protest to challenge the sufficiency of the ITT-Wilcox proposal is untimely. ITT refers in thisregard to Cardion's April 6, 1979, letter to ourOffice. There, Cardion noted that FAA representativesat the April 3, 1979, conference in this case statedthat the ITT-Wilcox proposal involved a "uniqueengineering approach." In the protester's view, thisraises a substantial question whether ITT-Wilcox'sproposal was "responsive." Prior to this time,Cardion's protest correspondence did not assertthat the ITT-Wilcox proposal was deficient orunacceptable. We understand that subsequent tothe April 3 conference, Cardion has sought underthe Freedom of Information Act information relatingto the FAA evaluation of the ITT-Wilcox proposal.

Where a protester files an initial statementof protest in general terms and, within 5 workingdays after being so requested by our Office, furnishesadditional details which appear to assert separatebases of protest not mentioned in the initial filing,we are nonetheless inclined to regard the separatebases as timely filed. See Kappa Systems, Inc.,56 Comp. Gen. 675, 681-684 (1977), 77-1 CPD 412.However, where a protester attempts, after thattime, to raise additional and separate bases forprotest, such bases must independently satisfyour timeliness requirements. Annapolis TennisLimited Partnership, B-189751, June 5, 1978, 78-1CPD 412.

In addition, under 4 C.F.R. § 20.2(b)(2),protests must be filed within 10 working days afterthe basis for protest is known or should have beenknown, whichever is earlier. Thus, we have heldin certain cases that where a protester did notseek within a reasonable period of time information

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which ultimately revealed a basis for protest, itsfailure to diligently pursue the matter calls forrejection of its protest as untimely. See, forexample, Loral Electronic Systems Division, LoralCorporation, B-187779, February 22, 1977, 77-1 CPD125.

We believe that an allegation that an RFPshould be canceled because it has been so substan-tially changed that it is tantamount to a newprocurement is a separate basis of protest from acontention that an RFP should be canceled becausethe only proposal submitted was unacceptable. Itappears to us that the latter basis of protestshould have been known to Cardion long beforeApril 1979. In December 1978 Cardion had receivedfrom FAA copies of RFP amendment No. 6 and therevised FAA specifications, which indirectlyrevealed information about the technical approachproposed by ITT-Wilcox. Cardion also knew at thattime that the ITT-Wilcox proposal was the only onereceived. In addition, comments on the protest filedby ITT and Wilcox on January 30, 1979, explicitlyasserted that the ITT-Wilcox technical approachwas innovative and involved proprietary information,and that participation in the procurement by Cardionwould result in prohibited "technical transfusion."

Accordingly, we regard as untimely Cardion'scontention that the RFP should be canceled becausethe only proposal received was unacceptable. Inaddition, we believe that Cardion had ample opportunitybetween December 1978 and April 1979 to seek additionalinformation under the Freedom of Information Act,but failed to diligently pursue the matter.

III. Protester's, Agency's, and InterestedParties' Positions

Cardion states that "The gist of our protestis that the FAA should have opened the VORTACprocurement to parties in addition to [ITT-Wilcox]after issuing Amendment 6 to the RFP* * *. The

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effect of this amendment 6 was to reduce drasticallythe scope of the VORTAC project and the risk borneby the contractor. The change in the RFP was sosubstantial that amendment 6 amounted to a newprocurement."

The protester has submitted considerableargumentation as to the substantial nature of thetechnical changes made by amendment No. 6. Cardionrepeatedly emphasizes that the cumulative effectof the changes is to greatly reduce the risk involvedin contract performance. A summary of these points,along with responses by the FAA and interestedparties, follows:

1. Cardion: Single transmitters with dualmonitors at all sites have been substituted for theprevious combination of single transmitters at somesites and dual transmitters at others. The numberof transmitters is reduced by more than 33 percent.Facility Control and Transfer (FCT) equipment is eliminated,at a cost reduction of about $500 per site, and soft-ware is simplified. The contractor's design burden islessened and there is a vast decrease in risk of con-tract performance.

FAA: Equipment configuration at some sites has beenchanged, with some cost reduction. However, there isno change in the total number of systems required orin the functional requirements which must be met. TheFCT change involves a possible cost reduction of about$200 per site. Even accepting the protester's figure($500/site, or $450,000), this is hardly a great amountin the context of a possible $100 million procurement.The software change involves no recognizable cost impact.

ITT: Contrary to the protester's view, the requirementsare now more complex and riskier. Dual transmittershad been required at some sites for backup capability,i.e., the second transmitter would be needed in casethe first failed. The substitution of single trans-mitters at these sites means that the contractor mustsupply more sophisticated, higher reliability singletransmitter equipment.

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Wilcox: The configuration of equipment at one-halfof the sites has been changed, but the types of equip-ment involved at all sites are the same as thoserequired by the original RFP. No new equipment designeffort is required by amendment No. 6. The FCT changeinvolves a trifling impact of less than .2 percent ofthe contract price.

2. Cardion: The Facility Central Processor Unit hasbeen simplified by substituting a commercially availableinput-output terminal for the previous built-inalphanumeric display or keyboard.

FAA: This is an insignificant change involving per-haps a $200-$300 increase in cost per site.

Wilcox: This change probably involves less than .25percent of the contract price.

3. Cardion: Amendment No. 6 provides clearer specificationsregarding read only memory and support data.

FAA: This is a clarification, not a change in require-ments.

Wilcox: A mere clarification with no effect on designor equipment cost.

4. Cardion: The number of monitored signals forenvironment equipment interface is now defined.

FAA: This is clarification, not a change in require-ments.

Wilcox: This probably affects less than .2 percentof the contract price.

5. Cardion: Several changes in Frequency Shift Keying(FSK) transmission have significantly reduced designcomplexity.

FAA: The basic FSK capability was required by the or-iginal specification; the changes the protester refersto are minor and involve approximately the same degreeof design complexity.

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Wilcox: These changes have no effect on cost.

6. Cardion: Spectrum requirements for modulation side-bands have been reduced; the previous requirements areknown to be very difficult to meet.

FAA: The relaxation in tolerances is not a major changeand is of no consequence in terms of system performance.

Wilcox: Since Cardion has a current FAA contract underwhich the same relaxation in requirements occurred,it is hard to see how Cardion can claim to be surprisedby this change.

7. Cardion: Goniometer sideband spectrum requirements havebeen reduced, with a tremendous decrease in design risk.

FAA: This is a minor change.

Wilcox: From its previous contract where the samerequirements were reduced, Cardion probably had betternotice of the FAA's actual needs than any other pros-pective offeror.

8. Cardion: Frequency deviation ratio tolerance hasbeen reduced, lessening Goniometer design risk.

FAA: See comments on Nos. 6 and 7; this is a veryinsignificant change with negligible effect on designcomplexity.

Wilcox: This merely corrects a conflict in thespecifications.

9. Cardion: The substitution of a programmable key-board for internal monitor adjustments has clarifiedambiguities in the control requirements.

FAA: This is a clarification of the specification,not a change in requirements.

Wilcox: This clarification involves less than .1 per-cent of the total contract price.

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10. Cardion: The delivery schedule has been significantlyrelaxed. For example, the original requirement was12 units per month during the first 6 months of deliveries;now only 2 or 3 units per month are required. The neteffect is an enormous decrease in risk because thecontractor is able to gradually deploy its resourcesand better assess the risks involved in the criticalearly stage of contract performance.

FAA: Over 1-1/2 years of design and test precededelivery of the first production VORTAC's. The pro-tester's comments concerning the effect on risk ofthe changes in early deliveries are basically speculative.In the context of a 54-month program, the changesare minor. Overall delivery requirements are probablymore stringent, as the initial deliveries of basicand option units are accelerated under amendmentNo. 6.

ITT: Amendment No. 6 accelerates the schedule forinitial deliveries of VORTAC's and VOR's, as well asoptions.

Wilcox: The protester selectively points out relaxationsin the early delivery schedule and ignores the factthat overall delivery requirements have been accelerated.

11. Cardion: There have been major changes in instal-lation and test scheduling. Only six units must be in-stalled in the first 5 months, whereas the originalRFP called for 48 installations of dual VORTAC's duringthe same period. In addition, while amendment No. 6increased the number of monitors, it substantiallydecreased the number of transmitters and transponders,and production testing for transmitters and transpondersis substantially more burdensome than for monitors.The net result is a huge reduction in production test-ing. Further, reliability demonstration requirementshave not been increased.

FAA: The changes in the units comprising the 950systems are as follows:

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Original AmendmentRequirement No. 6 Difference

VOR Transmitters 1401 950 -451

VOR monitors 1401 1900 +499

TACAN/DME transponders 1214 870 -344

TACAN/DME monitors 1214 1740 +526

5230 5460 +230

While the relative difficulty in building these unitsdepends on the individual manufacturer, in our opinionmonitors are somewhat more-difficult to design and build.In any event, manufacturing and production testing isabout the same regardless whether monitors or trans-mitters/transponders are involved. The protester hasmade inconsistent statements in its submissions as towhether qualification testing is more demanding underamendment No. 6, at first admitting that it probably isand later claiming it is not. In our opinion, qualifi-cation and reliability testing will be somewhat morecomplex under amendment No. 6.

Wilcox: The protester's assertions are misleading andoversimplified. Amendment No. 6 calls for systemtesting as opposed to testing of the separate unitswhich make up the systems.

12. Cardion: The contract type for installation andtesting work has been changed from firm-fixed-priceto cost-plus-fixed-fee, greatly reducing the risk tothe contractor.

FAA: This affects only about 10 percent of the estimatedcontract cost. Under the RFP, cost was not specifiedas a factor in determining competitive range and wasnot a primary factor in making a selection.

ITT: This involves only about 3 percent of the totalcontract price and is de minimis in the context of theprocurement as a whole.

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Wilcox: This affects only about 3.2 percent of thecontract price.

13. Cardion: The requirements for spares have beenrelaxed; spare modules on option items have beenreduced from 401 to 156.

FAA: This is not a major change and it does notdecrease a contractor's risk.

Cardion advances the following legal theories insupport of its position:

(1) Computek, Inc. et al., 54 Comp. Gen. 1080(1975), 75-1 CPD 384, and other GAO decisions indicatethat when significant changes are made in the Government'srequirements, the RFP must be amended and the Governmentmust seek "new offerors."

(2) Decisions such as American Air Filter Company,Inc., 57 Comp. Gen. 285 (1978), 78-1 CPD 136, also57 Comp. Gen. 567 (1978), 78-1 CPD 443, and Kent Watkins &Associates, Inc., B-191078, May 17, 1978, 78-1 CPD 377establish that where a modification to a contractchanges its purpose or nature so substantially thatthe contract for which the competition was held andthe contract to be performed are essentially different,the work covered by the modification should be obtainedby a new and separate competitive procurement.

(3) Federal Procurement Regulations (FPR)§§ 1-3.101(c) and 1-3.101(d) (41 C.F.R. § 1-3.101(c),(d) (1978)) require procuring agencies to solicitproposals from the maximum number of qualified sourcesand to ensure that negotiated procurements are competitivewhenever feasible. (Cardion stresses in this regard thatthe active interest in the protest expressed by threeother companies indicates that a number of concernsmight be willing to submit proposals if the RFP iscanceled and a new procurement initiated.)

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FAA, ITT and Wilcox have responded at length tothe protester's legal arguments. ITT and Wilcox alsomaintain that since the innovative technical approachin their proposal involves proprietary information,participation by Cardion or others in the procurementwould involve a prohibited "technical transfusion" ofthese innovative concepts. They also argue that furtherdelay occasioned by any resolicitation will result ina substantial increase in cost to the Government.

IV. Discussion

FPR § 1-3.805-1(d) states in pertinent part:

"When, during negotiations, asubstantial change occurs in the Gov-ernment's requirements or a decisionis made to relax, increase, or otherwisemodify the scope of the work or statementof requirements, such change or modifica-tion shall be made in writing as anamendment to the request for proposals,and a copy shall be furnished to eachprospective contractor. * * *"

The regulation requires only that notice of changesbe given to offerors. In the present case, Cardion isnot an offeror. Thus, decisions such as Computek, supra--where we found that an agency failed to comply with theregulation and recommended that the competition bereopened and that offerors be notified of changes inthe Government's requirements--are easily distinguishable.Contrary to Cardion's view, Computek did not recommendthat the agency "seek new offerors" but rather thatit seek new offers from the offerors in the procure-ment.

The FPR's do not specifically address the subjectof whether or when an RFP should be canceled due tochanges in the Government's requirements. However,Defense Acquisition Regulation (DAR) § 3-805.4(b)(1976 ed.) does address this point:

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"(b) The stage in the procurement cycle atwhich the changes occur and the magnitude ofthe changes shall govern which firms should benotified of the changes. If proposals are notyet due, the amendment should normally be sentto all firms solicited. If the time for re-ceipt of proposals has passed but proposalshave not yet been evaluated, the amendmentshould normally be sent only to the respondingofferors. If the competitive range has beenestablished, only those offerors within thecompetitive range should be sent the amendment.However, no matter what stage the procurementis in, if a change or modification is so substan-tial as to warrant complete revision of asolicitation, the original should be canceledand a new solicitation issued. In such cases,the new solicitation should be issued to allfirms originally solicited, any firms added tothe original mailing list and any other qual-ified firms." (Emphasis supplied.)

The DAR is not applicable to FAA procurements.However, in the absence of a directly applicableFPR provision, we will use it as a guide. IroquoisResearch Institute, 55 Comp. Gen. 787, 797 (1976), 76-1CPD 123.

It is well established that contracting agenciesenjoy a broad range of discretion in deciding whetheror not to cancel an RFP, and that our Office willnot object to an agency's decision in this regardunless it is clearly shown to have no reasonablebasis. See United States District Court for theDistrict of Columbia, 58 Comp. Gen. _ (B-194088,April 26, 1979), and decisions cited therein. Theissue in this case, therefore, can be stated asfollows: has Cardion shown that FAA's decision thatthe changes in requirements are not so substantialas to warrant complete revision of the RFP has noreasonable basis?

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Considering the nature of the changes, ascharacterized by the parties supra, we see no basison the record to answer this question in the affirmative.Insofar as the changes are readily and objectivelyquantifiable, such as the numbers of transmitters ormonitors or the alterations in the delivery schedule,it is by no means obvious or self-evident why theymust be regarded as "so substantial as to warrant acomplete revision" of the solicitation. If anything,FAA's and ITT-Wilcox's characterizations of the changesas being of the type which might normally occur innegotiations for the acquisition of a major systemappears more obvious and reasonable, especially where,as here, the RFP expressly contemplated that eachofferor would provide its own design and technicalapproach to meeting the requirements, and technicalapproach was the most important evaluation criterion.

The protester's citation of Frequency Electronics,Inc., B-178164, July 5, 1974, 74-2 CPD 8, is not inpoint. There, the protester objected to the cancellationof an RFP which had called for specific models of electronicequipment. We found no basis to object to the Navy'sview that amending the RFP was impracticable, becauseit was ultimately possible that a considerably differenttype of equipment might be procured under a new RFP.Whether the FAA in the present case could reach areasonably based conclusion that the changes in thespecification are so substantial as to warrant a com-plete revision of the RFP is beside the point. Theprotester, to succeed, must show in effect that FAAwould be totally unreasonable if it reached any otherconclusion. The protester's presentation falls farshort of such a showing.

Insofar as the alleged substantial nature of thechanges is premised on the protester's perception ofthe reduced risk they entail, it must be noted that anindividual prospective contractor's perception of therisk is of no especial concern to the Government. TheGovernment's concern is whether its minimum needs will

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be satisfied at a reasonable price. See Comten, Inc.,B-186983, December 8, 1976, 76-2 CPD 468, affirmed,77-1 CPD 173. When the Government issues a solicitation,it is required to provide a clear statement of itsrequirements so that all offerors will be competingon an equal basis (Fiber Materials, Inc., 54 Comp. Gen.735 (1975), 75-1 CPD 142) but the Government makes noguarantee that each offeror will be facing the samedegree of risk; one offeror, due to its superior ex-perience or resources, may well enjoy a competitiveadvantage over another. Telos Computing, Inc., supra.We see little merit, therefore, in the idea that thesubstantial nature of changes in an RFP should be judgedin terms of an individual prospective offeror's per-ception of their effect on risk.

Cardion has lately introduced an argument akinto detrimental reliance, i.e., that the changes effectedby amendment No. 6 relate to the same areas of riskwhich caused Cardion to forego submitting a proposal inJune 1978. However, the contemporaneous documentation(see Cardion's June 1, 1978, "no bid" message to FAA,supra) does not substantiate this after-the-fact assertion.If a prospective offeror believes the terms of the RFPinvolve too much risk, it has a choice of either sub-mitting a proposal in response to the RFP, or protestingprior to the closing date for receipt of initial pro-posals and specifically challenging those areas of the RFPit believes should be changed. We agree with Wilcox'scomments to the effect that the Government cannot conductits negotiated procurements on a "start and stop" basis,with procurements being halted as various nonofferorschange their minds about the degree of risk.

Further, we do not find decisions such as KentWatkins and American Air Filter, supra, to be in point.The relevance of these and similar decisions to thepresent case rests on the theory that in determiningwhether changes to an RFP are so substantial as towarrant its complete revision, it is pertinent toconsider whether such changes--if made to a contractalready awarded--would constitute a change so substantialthat the work covered by the modification should be

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the subject of a new procurement. The difficulty withthis reasoning is that a change to a contract is notthe same thing as a change to an RFP, whether consideredfrom the perspective of the opportunity to compete orfrom the perspective of the best interests of the Gov-ernment in satisfying its needs on the most advantageousterms. A contract modification is accomplished in whatamounts to a sole-source environment; the Government dealsonly with the contractor and no other party has an opportunityto compete. A change to an RFP, on the other hand, doesnot in itself preclude any party which chose to competein the procurement from competing for the changed require-ments, nor is the Government, even if there is only oneofferor, locked into a sole-source situation to the samedegree in a precontract environment as it is when dealingwith a contractor.

Thus, in our view, the scope of changes to an RFPwhich may be permissible without requiring a newsolicitation is greater than the scope of changespermitted to an existing contract. See, in this regard,Alton Iron Works, B-183955, August 29, 1975, 75-2 CPD131, where we stated:

"Alton also questions the propriety ofan award for 895 items when the original RFPcalled for only 418 items. When the con-tracting officer learned that increasedquantities would be needed he negotiatedonly with Yarway because it was the onlyofferor submitting an acceptable offer onthe lesser quantity. We can find no reasonto object to this procedure since ASPR§ 3-805.4(b) (1974 ed.) provides, in effect,that changes in the Government's requirementsthat do not warrant a complete revisionof the solicitation and which occur afterthe competitive range for the procurementhas been established need only be conveyedby amendment to those offerors determined tobe, in the competitive range.* * *"

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Compare Kent Watkins, supra, where we found thata contract modification which doubled contract costsand performance time was in fact an unjustified sole-source award and recommended that the agency conducta competitive procurement.

Thus, we do not find the "contract modification"line of decisions to be controlling here, and thevarious court decisions cited by Cardion which dealwith cardinal changes are even further afield. Thecardinal change cases deal with the rights of theGovernment and the contractor in a breach of contractsituation and are not directly concerned with thesubject of when certain work must be the subject ofa competitive procurement..

Even if the Kent Watkins and American Air Filterrationale were to be applied here, it offers no supportfor the protester's position. In this regard, in oursecond American Air Filter decision, in discussingto what extent a contract can be modified before thestatutory requirement for competition comes into play,we stated (57 Comp. Gen., supra, at 573):

"The impact of any modification is inour view to be determined by examining whetherthe alteration is within the scope of thecompetition which was initially conducted.Ordinarily, a modification falls withinthe scope of the procurement provided thatit is of a nature which potential offerorswould have reasonably anticipated under thechanges clause.

"To determine what potential offerors wouldhave reasonably expected, consideration shouldbe given, in our view, to the procurementformat used, the history of the present andrelated past procurements, and the natureof the supplies or services sought. A varietyof factors may be pertinent, including: whetherthe requirement was appropriate initially for

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an advertised or negotiated procurement;whether a standard off-the-shelf or similaritem is sought; or to whether, e.g., the con-tract is one for research and development,suggesting that broad changes might be ex-pected because the Government's requirementsare at best only indefinite."

By analogy, the scope of changes to an RFP whichwould be permissible without requiring cancellationand resolicitation would have to be judged in terms ofwhat changes in the RFP prospective offerors mightreasonably have anticipated would be made after pro-posals were received. Cardion and all other prospectiveofferors were on notice that in this negotiated procure-ment the RFP explicitly contemplated individual designapproaches by offerors. To assert in these circumstancesthat an RFP amendment incorporating technical changesbased on the particular technical approach taken bythe sole offeror makes the RFP as amended fundamentallydifferent in purpose or nature from the original RFP istotally unpersuasive.

As for Cardion's argument that the RFP should becanceled because FPR § 1-3.101 requires agencies to seekmaximum competition in negotiated procurements, ourdecision Environmental Protection Agency - request formodification of GAO recommendation, 55 Comp. Gen.1281 (1976), 76-2 CPD 50, is pertinent. There, ourOffice had sustained a protest and recommended thatnegotiations be reopened with the six offerors. Theagency proposed instead to cancel the RFP, partlyon the basis that issuing a new RFP would maximizecompetition by allowing parties other than the sixoriginal offerors an opportunity to submit proposals.Our decision stated (55 Comp. Gen. at 1284-1285):

"IFPR] § 1-3.101(d) (1964 ed.amend. 153) provides that negotiatedprocurement shall be on a competitivebasis to the maximum practical extent.However, we do not believe that thisprinciple, considered in and of itself,necessarily justifies canceling an

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existing RFP and issuing a new RFP.Unless there is a reasonable basis tobelieve that continuing the competitionunder an existing RFP will not lead tothe receipt of technically acceptableproposals whose realistic probable costsare considered reasonable, we see nogrounds why the RFP should be canceledin the hope of experiencing betterresults under a new RFP."

A decision to cancel, in other words, should notbe undertaken based solely on speculation about possibleincreased competition under a new RFP and irrespectiveof the results obtained under the original RFP. In55 Comp. Gen. 1281, six proposals had been received asopposed to only one in the present case. However, theFAA initiated the current procurement as a competitiveone and ITT-Wilcox's proposal was prepared in anticipa-tion of competition. There is no requirement that anagency cancel an RFP solely because only one acceptableproposal is received. See, in this regard, CessnaAircraft Company et al., 54 Comp. Gen. 97 (1974),74-2 CPD 91; Cf. Alton Iron Works, supra.

V. Conclusion

The protest is denied.

Deputy Comptroller Generalof the United States