BNUMBER:  B-260778.4
DATE:  July 8, 1996
TITLE:  Deployable Hospital Systems, Inc.--Reconsideration

**********************************************************************

Matter of:Deployable Hospital Systems, Inc.--Reconsideration

File:     B-260778.4

Date:July 8, 1996

Michael A. Gordon, Esq., and Fran Baskin, Esq., Holmes, Schwartz & 
Gordon, for the protester.
Barbara S. Kinosky, Esq., Bean, Kinney & Korman, for TVI Corporation, 
an interested party.
Tania L. Calhoun, Esq., and Christine S. Melody, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Request for reconsideration of prior decision is denied where request 
either restates arguments raised earlier and disagrees with the 
original decision, or presents no new information warranting reversal.

DECISION

Deployable Hospital Systems, Inc. (DHS) requests reconsideration of 
our decision in Deployable Hospital Sys., Inc., B-260778.2; 
B-260778.3, Feb. 12, 1996, 96-1 CPD  para.  113, in which we denied its 
protests against the affirmation of the award of a contract to TVI 
Corporation under request for proposals (RFP) No. FA0021-95-R-0009, 
issued by the Department of the Air Force for deployable integrated 
mobile hospital tent systems.  

We deny the request for reconsideration.

We sustained DHS' protest of the original award to TVI because the Air 
Force's failure to document its technical evaluation and its 
determination that TVI satisfied a definitive responsibility criterion 
compelled a conclusion that they lacked a reasonable basis.  
Deployable Hosp. Sys., Inc., B-260778, July 21, 1995, 95-2 CPD  para.  65.  
We recommended that the Air Force reevaluate the proposals, adequately 
document the evaluation, and make a best value determination based 
upon the reevaluation results.  Pursuant to that recommendation, the 
Air Force determined that TVI satisfied the solicitation's definitive 
responsibility criterion and its unrated general considerations, and 
rated TVI's proposal superior to DHS' acceptable under both technical 
evaluation factors.  Based upon these findings and a consideration of 
the large difference between the offerors' prices, the Air Force 
affirmed its award to TVI.  

DHS' protest first challenged the agency's determination that TVI 
satisfied the definitive responsibility criterion, which required 
offerors to provide "a list of the three most recent sales of this or 
similar items/services . . . ."[1]  This solicitation sought offers 
for soft shelters packed within a utilities trailer--a soft shelter 
system.  As explained in our decision, since TVI had no recent sales 
of "this item"--a soft shelter system--the question was whether the 
contracting officer reasonably determined that TVI's sales of soft 
shelters alone and/or its sales of targets and decoys were sales of 
"similar items" for the purpose of this satisfying this criterion.  As 
discussed in our decision, during the reevaluation, the contracting 
officer prepared detailed findings in which she answered this question 
in the affirmative.   

During the protest, DHS argued that a "similar item" must be comprised 
of all the elements of the system, in this case, the soft shelters and 
the utilities trailer.  We concluded, however, that previous soft 
shelter sales would constitute evidence of sales of "this item"--a 
soft shelter system--and that DHS' proffered reading unreasonably 
eliminated the "similar item" provision from the criterion.  Since the 
contracting officer's documented determination that TVI's recent sales 
involved "similar items" was supported by the record, we had no basis 
to find it unreasonable.  See Restec Contractors, Inc., B-245862, Feb. 
6, 1992, 92-1 CPD  para.  154.  

In its request for reconsideration, DHS again contends that TVI's 
recent sales of soft shelters alone were not sales of "similar items" 
because these were but one element of the system.  DHS' request 
consists largely of quotations from its prior filings.  Our Bid 
Protest Regulations require that a party requesting reconsideration 
show that our prior decision contains either errors of fact or law or 
present information not previously considered that warrants reversal 
or modification of our decision.  See 4 C.F.R.  sec.  21.12(a) (1995); R.E. 
Scherrer, Inc.--Recon., B-231101.3, Sept. 21, 1988, 88-2 CPD  para.  274.  
DHS has not met this standard.[2] 
DHS' protest next challenged the agency's finding that TVI met the 
solicitation's general consideration with respect to financial 
capability.[3]   DHS contended that the agency's reliance upon TVI's 
pre-award survey results in making this determination improperly 
ignored evidence calling those results into question. 

The contracting officer's initial evaluation relied upon the Defense 
Contract Management Area Operations (DCMAO) office's pre-award survey 
findings.  In that survey, DCMAO reviewed copies of TVI's financial 
information, provided over the signature of TVI's then-president, Mr. 
Brent Molovinsky.  DCMAO concluded that the firm had made a strong 
recovery from its 1991 bankruptcy; had a strong ability to meet 
cashflow needs; and had sufficient working capital available to 
perform the contract.

During the initial protest, DHS submitted documents questioning 
DCMAO's positive assessment.  In a March 1995 bankruptcy court filing, 
TVI's shareholders' committee objected to a report filed by Mr. 
Molovinsky, asserting that it contained false or misleading 
information.  The committee stated that there was evidence that the 
firm had been unprofitable; that Mr. Molovinsky had not filed required 
financial reports; and that there was a pattern of concealment and 
evidence of improper use of company assets.  The firm's June 2 report 
to its shareholders, issued after Mr. Molovinsky was asked to resign, 
suggested that TVI had been operating at a very low level of sales and 
with a significant monthly loss, resulting in cashflow problems; that 
the firm had not filed required bankruptcy reports and had deviated 
from its bankruptcy reorganization plan; and that the firm had 
violated several Securities and Exchange Commission regulations 
related to the sale of stock.  With respect to the status of the 
firm's records, the report stated that initial investigations 
suggested significant malfeasance by Mr. Molovinsky.

In reevaluating TVI's proposal, the contracting officer stated that 
she had reviewed these documents and concluded that there was nothing 
to indicate that TVI did not presently have the backing of its 
financial institution to execute the contract, or the ability to 
obtain it.  TVI's June 2 report specifically addressed each element of 
the firm's financial status and set forth the management action 
proposed to resolve the problems.  The report stated that TVI believed 
its bank would finance requirements for government contracts, and the 
record contained a letter from the bank confirming this statement.

As we stated in our decision, the agency did not ignore the extrinsic 
evidence produced by DHS, but reviewed it and concluded that, 
notwithstanding this information, TVI had the financial capacity to 
perform the contract.  In light of the contracting officer's 
consideration of this evidence, including the fact that TVI's 
management had clearly set forth the steps it planned to take to 
recover its businessworthiness, and the fact that a bank was willing 
to provide working capital to TVI, we could not conclude that her 
evaluation of TVI as financially capable was unreasonable.  See 
Transco Contracting Co., B-228347.2, July 12, 1988, 88-2 CPD  para.  34.  
Hence, DHS' repeated argument in its request for reconsideration that 
the contracting officer improperly relied upon the DCMAO survey 
results incorrectly ignores the fact that her determination was made 
after having reviewed the most current information regarding TVI's 
financial status including, but not limited to, the letter from the 
bank.[4]

In its protest, DHS also alleged that TVI's then-president had 
provided DCMAO with fraudulent information requiring the rejection of 
the proposal.  In our decision, we stated that the record before us 
was so speculative as to preclude any conclusion of fraudulent 
activity.  TVI's report to its shareholders stated that it was based 
on "incomplete records and preliminary examination," and that "little 
if any has been verified and is simply based upon the best documents 
or information available."  Such preliminary and speculative 
information afforded us no basis to find any fraud here, much less a 
basis to reject TVI's proposal.

In its request for reconsideration, DHS asserts that it has been 
advised that a Naval Investigative Service criminal investigation of 
TVI concluded that Mr. Molovinsky admitted that he made intentional 
false statements to DCMAO, and that DCMAO personnel relied upon these 
statements in preparing its preaward survey report.    DHS points to 
this information and asserts that its allegation of fraud is no longer 
speculative, and that TVI's proposal must be rejected.

We have stated that an offeror's submission of a misstatement which 
materially influences consideration of a proposal should disqualify 
the proposal.  Informatics, Inc., 57 Comp. Gen. 217 (1978), 78-1 CPD  para.  
53.  Here, the record shows that the agency's consideration of TVI's 
proposal during the reevaluation was not based upon Mr. Molovinsky's 
representations to DCMAO, but on the currently available information 
regarding TVI's corporate status, financial and otherwise, described 
above.  Moreover, TVI has not endeavored to hide or abet Mr. 
Molovinsky's allegedly false representations to DCMAO, but has taken 
every step to distance itself from his actions and to illuminate the 
agency as to his alleged misdeeds and the firm's actual status.  The 
record shows that TVI has filed criminal charges against Mr. 
Molovinsky; named him as a defendant in three civil lawsuits; and 
intends to file additional such lawsuits.  Under the circumstances, we 
cannot conclude that the agency is required to reject TVI's proposal 
on this basis.

DHS' protest finally challenged the agency's evaluation of the 
offerors' technical proposals as both lacking a rational basis and 
evidencing a disparate treatment of the two offerors.  DHS provided 
numerous allegations with respect to nearly every evaluation factor 
and subfactor which we explored, by way of example, in our decision.  
As fully described there, we found no impropriety save with respect to 
one area of the evaluation.  In that regard, we determined that even 
if the evaluation results were adjusted in the manner most favorable 
to the protester, the proposals were approximately technically equal, 
and that price therefore properly could become the determinative 
factor in award.  Ogilvy, Adams & Rinehart, B-246172.2, Apr. 1, 1992, 
92-1 CPD  para.  332.  Considering the solicitation's specific instruction 
that the importance of price would increase as the quality differences 
between proposals decreased, we had no basis to question the agency's 
best value determination in light of DHS' substantially higher price.  
See Newport News Shipbuilding and Dry Dock Co. et al., B-261244.2 et 
al., Sept. 11, 1995, 95-2 CPD  para.  192.  

In its request for reconsideration, DHS reiterates its general 
disagreement with our conclusion, and again interprets specific 
aspects of the evaluation as evidence of disparate treatment.  DHS has 
not presented any new facts, evidence, or arguments that were not 
previously considered.  Since repetition of arguments made during the 
original protest do not constitute a valid basis for reconsideration, 
DHS' current request provides no justification for reexamining our 
earlier decision.  See Docusort, Inc.--Recon., B-254852.3, July 18, 
1995, 95-2 CPD  para.  25.  We reviewed all of DHS' allegations during the 
initial protest, and found no basis in the record--aside from that 
noted above--to support the protester's contentions.  DHS' 
disagreement with our decision does not warrant its reconsideration.  
See Logics, Inc.--Recon., B-237411.2, Apr. 25, 1990, 90-1 CPD  para.  420.     

The request for reconsideration is denied.

Comptroller General
of the United States

1. A definitive responsibility criterion is a specific and objective 
standard established by an agency for use in a particular procurement 
for the measurement of an offeror's ability to perform the contract.  
Federal Acquisition Regulation (FAR)  sec.  9.104-2; D.H. Kim Enters., 
Inc., B-255124, Feb. 8, 1994, 94-1 CPD  para.  86.  The parties here did not 
dispute that this requirement is a definitive responsibility 
criterion.

2. DHS' reliance on language in our initial decision, in which we 
queried whether the sales of soft shelters alone were sales of 
"similar items," is misplaced.  Our concerns then were in response to 
the agency's complete failure to document its initial finding; the 
agency was not required to adopt them in its ultimate determination.

3. The solicitation listed several general considerations that would 
be considered in the technical evaluation, including financial 
capability.  While an offeror's financial capability to perform a 
contract is a traditional responsibility factor, see FAR  sec.  9.104-1, in 
appropriate circumstances, and where the solicitation so apprises 
offerors, financial capability may be used to assess the relative 
merits of individual proposals.  E.H. White & Co., B-227122.3; 
B-227122.4, July 13, 1988, 88-2 CPD  para.  41.

4. While DHS also alleges that TVI has "underbid" this contract, there 
is no prohibition against a procuring agency's accepting an 
unreasonably low or below-cost offer on a fixed-price contract.  
Intown Properties, Inc., B-256742, July 11, 1994, 94-2 CPD  para.  18.