BOWNES, Circuit Judge.
Plaintiff-appellant Saco Defense System Division (Saco) appeals the summary judgment dismissal of its attempt to set aside the award of a contract for 9 mm pistols by defendant-appellee United States Army to intervenor-appellee Beretta U.S.A. Corp. Saco Defense Systems Division v. Weinberger, 629 F.Supp. 385 (D.Me.1986). In a prior opinion and order, the district court denied Saco's motion for a preliminary injunction but granted its request for expedited discovery. Saco Defense System Division, Maremont Corporation v. Weinberger, 606 F.Supp. 446 (D.Me.1985).
The first hurdle Saco faces is a procedural one. In the district court, it sought injunctive relief, the setting aside of the contract award to Beretta. It now asks that, if it is successful on appeal, the case be remanded for a determination of bid preparation costs. The Army contends that this claim was raised for the first time on appeal and we are precluded from considering it. There is no question that we will not consider a legal issue or theory not presented to the trial court. Johnson v.
In reviewing an appeal from an entry of summary judgment, the record must be viewed in the light most favorable to the party opposing the motion. King v. Williams Industries, Inc., 724 F.2d 240, 241 (1st Cir.), cert. denied, 466 U.S. 980, 104 S.Ct. 2363, 80 L.Ed.2d 835 (1984); Hahn v. Sargent, 523 F.2d 461, 464 (1st Cir.1975), cert. denied, 425 U.S. 904, 96 S.Ct. 1495, 47 L.Ed.2d 754 (1976). Where, as here, both parties have moved for summary judgment, a court separately evaluates the two motions, in each instance drawing factual inferences most favorable to the opposing party. 10A C. Wright, A. Miller & M.K. Kane, Federal Practice and Procedure § 2720, at 23-24 (2d ed. 1983).
At the outset of our discussion, we must note that we are not strangers to the award of the 9 mm pistol contract to Beretta. Less than a year ago we considered and rejected the challenge of Smith & Wesson to the Beretta contract. Smith & Wesson v. United States, 782 F.2d 1074 (1st Cir.1986). Saco's challenges, however, are different in nature and scope than those raised by Smith & Wesson.
After Smith & Wesson was eliminated as a competitor for the 9 mm pistol contract, Saco and Beretta were the only suppliers considered. The decision to award the contract to Beretta was made on January 14, 1985. General Burbules, the Source Selection Authority, summarized the reasons for his choice:
Saco was disappointed, and understandably so, because Beretta had won the competition by a score of 857.7 points to 847.36 points for Saco, a difference of 10.34 points out of an optimum of 1,000. The cost figures submitted by Beretta and Saco also reveal the closeness of the competition.
Beretta Saco DefenseUnit Cost (Initial Acquisition) $ 178.50 $ 176.33 Total Initial Acquisition $56,393,505.00 $55,707,937.00 Estimated Spares Cost 18,368,802.00 22,108,465.00 Nonrecurring Costs 0.00 0.00 ______________ ______________ Total Program $74,762,307.00 $77,816,402.00
It is evident that the difference in the cost of estimated "spares" tipped the balance in favor of Beretta.
Saco raises two issues on appeal: (1) the Army acted improperly and in violation of the law by failing to conduct any negotiations, or meaningful negotiations, prior to awarding the contract to Beretta; (2) the formula used by the Army to compare the cost of Beretta's and Saco's spare parts was irrational, arbitrary and capricious.
The standard of review for a disappointed bidder on a government contract
I. THE NEGOTIATIONS ISSUE
Saco argues that the Army violated the applicable law by failing to conduct meaningful negotiations with Saco and Beretta before making the final contract award, and that Saco was prejudiced by such failure. The law that Saco claims was violated is found in 10 U.S.C. § 2304(g), DAR 3-805 and DARCOM Pamphlet 715-3.
10 U.S.C. § 2304(g) provides:
DAR § 3-805.1 provides in pertinent part:
DARCOM Pamphlet 715-3, which covers the procedure to be followed in procurement proposal evaluation and source selection, refers to "the clarification or negotiation process." DARCOM-P 715-3(3)(d).
We agree with Saco that if negotiations are required, they must be meaningful. The question is whether negotiations were required or whether the exceptions in the statute and the regulation dispensing with the requirement of negotiations applied. The Request for Proposals (RFP) stated:
Saco argues that negotiations were required because the exception does not apply when best and final offers (BAFO) are requested. Using this argument as a stepping stone, it then contends that meaningful discussions must be held on deficiencies in offerors' proposals and that such discussions cannot be supplanted by requests for best and final offers. The Army's position
Beretta has suggested in its brief that Saco has waived its right to object on the negotiations issue because it submitted its best and final offer without objecting to the lack of negotiations. It does not appear, however, that this argument was raised below; it certainly was not averted to in the district court opinion. We will, therefore, consider Saco's claims on the merits. Cf. Johnson v. Allyn & Bacon, Inc., 731 F.2d at 73.
The request for proposals required that technical proposals be submitted by July 20, 1984, and cost proposals by October 9, 1984. Both Saco and Beretta met these deadlines. The RFP was changed on November 20, 1984, when the Army issued amendment 3 to it. The amendment stated on its face: "THE PURPOSE OF THIS AMENDMENT IS TO FORMALLY OPEN NEGOTIATIONS AND INCORPORATE THE FOLLOWING ITEMS FOR YOUR REVIEW PRIOR TO SUBMISSION OF A BEST AND FINAL OFFER." It directed that best and final offers be submitted by December 11, 1984. The parties agree that the significant change made by the amendment to the RFP was in the quantities called for on page 42, Clause E22A.
Saco and Beretta received the amendment and submitted their BAFOs on time. Beretta amended its cost proposal in light of the quantity changes made by the amendment. Saco made no changes. Saco did not object to the lack of negotiations when it submitted its BAFO, nor did it request negotiations. We agree with the district court that, under these circumstances, DAR 3-805.1(v) applied to the BAFOs and that the award could be made without negotiations.
Even, however, if we are mistaken as to the applicability of DAR 3-805.1(v), under DAR 3-805.3(a) no discussions with Saco and Beretta about weaknesses in their proposals were required. DAR 3-805.3(a) provides:
Our examination of the voluminous record reveals no deficiencies by either Saco or Beretta. In making the award, General Burbules stated: "Both weapons met or exceeded all requirements." We do not equate weaknesses with deficiencies. The proposals of both Saco and Beretta satisfied the basic Army requirements. It was not deficiencies in the Saco proposal that resulted in Beretta obtaining the contract. The award went to Beretta because the Army decided, after comparing both proposals, that Beretta would furnish a better pistol for less money than Saco. Under either DAR 3-805.1(v) or DAR 3-805.3(a), no negotiations were required.
It is important to bear in mind that the Army was not procuring a new weapon with complicated design specifications requiring discussions concerning modifications and alterations in design. The 9 mm pistol has been widely used for years. It is difficult to understand what negotiations would have accomplished from the Army's point of view. It had to decide what weapon would perform best under field conditions. Each manufacturer's pistol was subjected to a series of demanding tests. See Smith & Wesson v. United States at 1077-80. The weapons of both Saco and Beretta performed well with Beretta having a slight edge. The other consideration was cost, and, here again, Beretta came out ahead. Saco has devoted a great deal of its brief to emphasizing how important a role
We also find that, under the circumstances, the amendment to the RFP and the request for BAFOs constituted all the negotiations that were required. We must bear in mind that "[c]ourts reviewing government procurement decisions should respect the wide discretion accorded to contracting officers in their evaluation of bids and in their application of procurement regulations." Kinnett Dairies, Inc. v. Farrow, 580 F.2d 1260, 1272 (5th Cir.1978). The contracting agencies "have wide discretion in determining the nature and scope of negotiations." General Electric Company v. Seamans, 340 F.Supp. 636, 642 (D.D.C.1972). And "that discretion should not be questioned unless it is clearly shown to be without a rational basis." Drexel Heritage Furnishings v. United States, 7 Cl.Ct. 134, 153 (1984).
The Army determined that Saco's proposal was technically acceptable and there were no deficiencies, "defined as that part of an offeror's proposal which would not satisfy the Government's requirements." DAR 3-805.3(a). The requirement to conduct meaningful negotiations was, therefore, satisfied by a request for best and final offers. Meridian Junior College, B-221358, 86-1 CPD ¶ 262 (1986); Weinschel Engineering Co., Inc., B-217202, 85-1 CPD ¶ 574 (1985); Information Management, Inc., B-212358, 84-1 CPD ¶ 76 (1984). As the Comptroller General stated in Bruno-New York Industries Corporation, B-184679, 76-1 CPD ¶ 36:
II. THE TEN PERCENT FACTOR
Saco contends strenuously that the ten percent spare parts formula that the Army required bidders to use was irrational, arbitrary and capricious. We find it significant that Saco made no protest about the merits of the spare parts cost formula until after the Army announced that the contract would be awarded to Beretta. 4 C.F.R. § 21.21(2)(1) (1984) provides in pertinent part:
Saco attempts to circumvent this deadline by asserting that the formula's irrationality "could not have been known to it until after the competition was over and the contract awarded." Appellant's Reply Brief at 11. This, Saco argues, is because it did not believe that the ten percent factor would be used as it was. Saco further claims that it relied on information in the RFP that the ten percent factor was merely a method to facilitate submission of the spare parts list. This argument does not withstand scrutiny. The solicitation was explicit as to the spare parts pricing information that each bidder was required to submit:
The solicitation went out to Saco and the other bidders on March 4, 1984. The Army held a conference in April, 1984, to discuss the solicitation. After the conference, a summary of the points discussed was distributed to those who attended, which included Saco. The summary contained the following:
At no time prior to the announced decision to award the contract to Beretta did Saco question or complain about the ten percent spare parts formula. In the face of the language used by the Army and the procedure it followed to make the application of the formula clear, Saco's contention that it did not understand that the ten percent factor would apply to each and every part on the pistol does not wash. This is tantamount to saying that we know what you said, but we did not believe you meant it. We agree with the district court that Saco's protest to the spare parts formula was too late.
We are constrained to add that, based on our review of the record and particularly the affidavits and deposition of Lieutenant Colonel Roddy, who was responsible for the ten percent formula, we cannot find that the spare parts formula was irrational, arbitrary or capricious. The fact that it was a new approach and had not been used before does not make it irrational. Indeed, it is now used "routinely" in Army procurements. Dep. of George E. Dousman, App. Vol XI at 3866. The formula was based on Colonel Roddy's experience, skill and expertise in the procurement field and the advice he sought and obtained from others familiar with procurement problems. The role of a reviewing court in procurement cases is a limited one. A procurement decision should not be overturned unless there was no rational basis for the agency decision or a showing of clear illegality has been made. Sea-Land Service, Inc. v. Brown, 600 F.2d 429, 434 (3d Cir.1979). Neither of these factors is present here.