tation precluded an award to the protester. NAVFAC's November 4, 1975, submission states:

The statutory limit for family housing is not an absolute dollar amount, but rather an average cost per unit. This permits the armed forces to construct housing in geographic areas where construction is expensive, by offsetting the savings possible in other geographic areas. There is always the possibility that during a program year, earlier projects may be awarded at prices below the statutory average, and DOD may allocate the additional amounts thereby made available to the Navy for use on a particular project. However, it is DOD policy that the statutory average cost must be honored on each housing award and particularly true in a situation such as this, where we have the first award under a newly raised legislative limit where no average cost other than the statutory limit has been established. In law, the statutory average does constitute an absolute bar to an award greater than a particular allocated share of such average. Accordingly, because of the limit on available funds, at no time during the period at issue in this case, could award ever have been legally made to Corbetta.

The Corbetta proposal was within a competitive range, as defined by ASPR 3-805.2. If for some reason an award could not be made to Towne, and if as stated above a more liberal average cost had been made possible (through other housing awards being made below the average), then an award to Corbetta might have been possible. Therefore, it would have been premature, at any time prior to actually make an award to Towne, to have rejected the Corbetta proposal. *** [Italic in original.]

It is unnecessary at this time to become involved in consideration of the nature of the statutory cost limitation, nor need we consider the question of the appropriate point in time in a negotiated procurement at which proposals which exceed the limitation should be rejected pursuant to ASPR § 18-110 (c) (1974 ed.). Our earlier decision held that if discussions had been held with Corbetta as required by law, Corbetta may have been able to reduce its price so as to come within the applicable statutory limitation. We see nothing in NAVFAC's contentions which shows this conclusion to be erroneous.

In view of the foregoing, the holding of our prior decision on these issues is affirmed.

RECONSIDERATION OF LATE MODIFICATION

TO TOWNE PROPOSAL

Our earlier decision concluded that NAVFAC erred in accepting a late price increase which was submitted by Towne upon extending its initial proposal. We held that this action constituted discussions with Towne, and that NAVFAC failed to meet the obligation to conduct discussions with the other offerors in the competitive range. NAVFAC disagrees with this holding.

NAVFAC contends that a bid or proposal remains legally open for acceptance until its expiration date, that it may not be revoked unilaterally by the offeror prior to such date, and that it may not be unilaterally extended by the offeree beyond such date, citing Corbin on Contracts § 273 (1963) and Waterman v. Banks, 144 U.S. 394 (1892).

NAVFAC argues that because an offeror is not legally obligated to extend its offer, it follows that it may condition any extension on such terms as it desires, as, for example, an increase in price. Basler v. Warren, 159 F.2d 41 (10th Cir., 1947).

NAVFAC concludes that Towne clearly had the right to increase its price as a condition of extending its offer, and that Corbetta and other offerors could have done likewise. NAVFAC points out that while its message to the offerors asked for extensions of their original proposals (so as not to encourage offerors to raise their prices), the offerors as experienced contractors were capable of knowing their legal rights in this situation and exercising them.

NAVFAC also disagrees with our decision's holding that Towne's price increase was a late modification to its proposal. NAVFAC states that the late proposals and modifications clause included in the RFP ("LATE PROPOSALS, MODIFICATION OF PROPOSALS OR WITHDRAWAL OF PROPROSALS (1973 SEP)") had no application to the price increase. The reason given is that under the terms of the RFP, all offers were to expire on October 20, 1974, and that the request for extensions was an admission that the Government had no legal right to demand that the offers be extended. NAVFAC states: "Since in response Towne extended the period of the offer, only upon acceptance by the Government of an increase in price, it seems clear that there can be no application of the 'Late Modifications' clause since along with all other terms of the RFP, its effectiveness concluded as of 20 October 1974."

Concerning the question of discussions with the offerors, NAVFAC believes that a request to extend the offers does not constitute an opening of discussions and points out that no discussions as to the technical aspects of the proposals were sought or engaged in. NAVFAC believes that to the extent that the request to extend the offers constituted holding discussions, then discussions were in fact held with all offerors, since each offeror had the same opportunity to adjust its price in connection with extending its offer. Thus, all offerors were treated equally. NAVFAC refers, in this regard, to ASPR § 3-507.2 (b) (1974 ed.).

NAVFAC also considers it noteworthy that the Lincoln Services decision, discussed supra, "recognized" a price increase which was submitted when the time for acceptance of a proposal was extended by one of the offerors.

NAVFAC's observation that offerors had the legal right to condition extensions of their proposals on whatever terms they deemed desirable is correct, but only in a limited sense. Towne and the other offerors had the right to revise their proposals upon extending them

in that they could legally attempt to do so. This, however, is not the issue. The issue is the legal effect of the offerors' attempts, and the Navy's response to those attempts, within the framework of the statutory requirement to conduct written or oral discussions with all offerors within the competitive range and the requirements of the late proposals clause included in the RFP. If an offeror attempts to make material revisions in its proposal upon extending it, and the revised proposal is accepted by the contracting agency in contravention of the requirement to conduct discussions or the requirements of the late proposal clause, there can be no question that such action is improper, notwithstanding the fact that the offeror had a "legal right" to attempt to make the revisions. Since these considerations did not apply in the circumstances involved in the Basler decision, supra, it is not in point.

NAVFAC's assertion that the late proposals clause, along with all other terms of the RFP, "effectively concluded" on October 20, 1974–– the date proposals expired-is wholly without merit. There is no provision in the RFP whereby its effectiveness terminates as of a certain date. Rather, it is the proposals which expire at the end of a stated time, unless withdrawn earlier. Any extensions or modifications of the proposals are made with reference to the terms of the RFP and are either in material conformance with those terms or a departure from them. The RFP continues in existence even after a contract is awarded, as recognized by decisions of our Office which have held that the solicitation can be reinstated under appropriate circumstances. See our decision of September 12, 1975, in this matter; Cf. Federal Leasing, Inc., et al., 54 Comp. Gen. 872, 883 (1975), 75–1 CPD 236.

As our earlier decision held, the RFP late proposals clause cannot justify the NAVFAC's acceptance of the revised Towne proposal. The clause provides in pertinent part:

(b) Any modification of a proposal, except a modification resulting from the Contracting Officer's request for "best and final" offer, is subject to the * [provisions calling for rejection of late proposals].

(c) A modification resulting from the Contracting Officer's request for "best and final" offer received after the time and date specified in the request will not be considered unless received before award and the late receipt is due solely to mishandling by the Government after receipt at the Government installation.

(e) Notwithstanding the above, a later modification of an otherwise successful proposal which makes its terms more favorable to the Government will be considered at any time it is received and may be accepted.

Towne's revision to its proposal was clearly a "modification"; it did not result from a request for "best and final" offers; it was not a late modification which made the terms of the proposal more favorable to the Government; and there is no other provision in the clause which would allow acceptance of the late modification.

We note that ASPR § 3-506 (d) (1974 ed.) provides that the normal revisions of proposals by offerors selected for discussion during the usual conduct of negotiations with such offerors are not to be considered as late modifications to proposals. This provision cannot justify acceptance of the revised Towne proposal because the revision was not a normal one made during the usual conduct of negotiations, i.e., discussions with all offerors within the competitive range. Compare the circumstances discussed in Data General Corporation, B-182965, May 20, 1975, 75-1 CPD 304.

The question of whether "written or oral discussions" have been conducted turns upon whether an offeror has been afforded an opportunity to revise or modify its proposal, regardless of whether such opportunity resulted from action initiated by the Government or the offeror. 51 Comp. Gen. 479, 481 (1972). We agree with NAVFAC that its request to offerors to extend their original proposals did not in itself constitute the opening of "discussions." In some instances, a mere request from the contracting agency to the offerors can in itself constitute discussions-for example, a request for best and final offers. Dyneteria, Inc., B-181707, February 7, 1975, 75–1 CPD 86. The situation here is different. It was not NAVFAC's request for extensions of the original proposals which constituted the opportunity to revise proposals, but the offeror's submission of a material revision to its proposal and NAVFAC's acceptance of the same. These actions constituted the holding of discussions with Towne alone and not with the other offerors in the competitive range. NAVFAC's citation of ASPR § 3-507.2(b), supra, in this connection does not appear to be in point, since this provision deals with disclosure of information to prospective contractors concerning a potential procurement.

Finally, NAVFAC's reliance on the Lincoln Services decision is misplaced. In that case it was the plaintiff which conditioned the extension of its proposal on a late price increase. The court found the plaintiff's contentions of unfair treatment in the procurement to be without merit under the circumstances of the case. It is apparent that the court was never faced with the issue of a late price modification submitted by a successful offeror which operated to the detriment of other offerors in the competitive range.

In view of the foregoing, the holding of our earlier decision on the late modifications issue is affirmed.

RECONSIDERATION OF RECOMMENDATION

The recommendation in our prior decision, as noted supra, contemplated a renewal of competition among the offerors, with the possible result that Towne's contract be terminated for the convenience of the

Government. A number of reasons have been advanced why the recommendation is not in the Government's best interests, as, for example, NAVFAC's allegations that construction had advanced to the point by September 1975 that a new contractor would not be able to build over the work already in place without removal of that work, and that the renewal of competition would result in an auction due to the amount of information concerning the offerors' proposals which was disclosed to the parties during the protest proceedings. It is unnecessary to discuss these in detail. For the reasons which follow, the recommendation is now withdrawn.

Our recommendation was made with the knowledge that construction had been underway for some time, and that the Government would obviously incur costs in carrying out the renewal of competition. Information received by this Office in early September 1975 indicated that the value of preconstruction mobilization costs, actual work in place and materials on the jobsite was between $300,000-$400,000.

Several pertinent points have been brought out by NAVFAC and Town. NAVFAC's figures estimate that the actual value of work in place as of September 11, 1975-the day before our decision was issued-was about $1.1 million. Moreover, Towne was in the process of awarding numerous subcontracts for materials, the cost of which would impact on any termination for convenience settlement. NAVFAC's documents indicate that the contracting agency itself was not fully aware of the extent of the subcontracts being awarded at that time, presumably because the subcontract process is a continuing one and the contractor merely advises the agency from time to time of the status of the subcontracting and progress of the work.

In this light, it appears that even if the contract had been terminated for convenience immediately after issuance of our decisionwhich we did not recommend—the costs may well have been so great that such action would not be in the Government's best interests. (We did not recommend immediate termination because of the possibility that competition might not be effectively renewed among the parties. For example, all of the offerors in the competitive range might have declined to participate in the recompetition. NAVFAC would have been left with no contract for housing and would have had to conduct an entirely new procurement.) It follows that any termination subsequent to the renewal of competition-a process which would take at least several weeks-would result in even greater costs to the Government. We are inclined to agree with Towne's observation that it is probably impracticable to recommend any termination remedy after construction has begun in a contract of this type. It may well be that a remedy such as the one recommended could be practicable and effective