BNUMBER:  B-270161.2
DATE:  April 10, 1996
TITLE:  Rockville Mailing Service, Inc.

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Matter of:Rockville Mailing Service, Inc.

File:     B-270161.2

Date:April 10, 1996

Jeffrey A. Lovitky, Esq., for the protester.
Louis J. Kozlakowski, Jr., Esq., Blum, Yumkas, Mailman, Gutman & 
Denick, P.A., for Jet Sort, Inc., an intervenor. 
Lyman Goon, Esq., Social Security Administration, for the agency.
Katherine I. Riback, Esq., and Paul Lieberman, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Where agency ascertained that it had made award based on 
misevaluation of awardee's technical proposal which had resulted from 
an unclear solicitation provision, agency reasonably determined to 
take corrective action.

2.  Where awardee's price has been disclosed, reopening negotiations 
after disclosure of all competitor's prices, does not constitute an 
improper auction where an improper award had been made. 

DECISION

Rockville Mailing Service, Inc. protests the agency's decision to 
reopen discussions and reevaluate proposals as corrective action after 
an award had been made to Rockville under request for proposals (RFP) 
No. SSA-RFP-95-2255, issued by the Social Security Administration 
(SSA), for mail sorting services.  Rockville argues that the 
corrective action is unwarranted and will result in an improper 
auction.  

We deny the protest.

The RFP sought proposals for all services necessary to prepare 
first-class metered mail to qualify for rate discounts under the 
United States Postal Service (USPS) barcoded and presorted first-class 
discount programs.  First-class mail that is presorted may qualify for 
discount rates when specified minimum volumes are met.  In this 
regard, the RFP contemplates that the contractor will commingle the 
SSA's mail with its own sorted first-class mail to qualify for better 
volume rate discounts.  Under the contract, the contractor will pick 
up SSA's first-class mail from its Woodlawn, Maryland facility on a 
daily basis, sort the SSA's mail, add it to the contractor's other 
sorted first-class mail, and then deposit it at the Post Office for 
delivery.  In order to permit SSA to evaluate the estimated volume of 
first-class mail that each offeror could commingle with SSA's 
first-class mail during sorting to qualify for rate discounts, the RFP 
required offerors to include average daily volume of current National 
Distribution Mail (NDM) as part of the technical proposal.  

The RFP provided that award would be made on a best value basis, with 
technical factors more important than price.  The solicitation 
contained the following technical evaluation factors and points (with 
a possible total of 100 points):         (1) understanding of the 
requirements of the statement of work (SOW) (10 points); (2) offeror's 
technical approach (20 points); (3) experience of offeror's proposed 
technical staff (15 points); (4) experience of offeror's proposed 
management staff (15 points); (5) offeror's experience in barcoding 
and presort operations to include volumes of mail handled, amount of 
experience and qualification rates achieved in the 
barcoding/presorting of national distribution mail (25 points); and 
(6) facilities and equipment (15 points).  

The agency received five proposals in response to the solicitation, 
all of which were included in the competitive range.  The agency 
received four best and final offers (BAFO), including those submitted 
by Rockville and Jet Sort, Inc.  Jet Sort's BAFO received a total 
technical score of 100 points at an evaluated price of $2,470,195.  
Rockville's BAFO received a total technical score of 91 points at an 
evaluated price of $1,121,088.50.  Under the experience criteria, the 
agency evaluated each offeror's current volume of NDM on the following 
basis:

First-Class NDM Volumes     Technical points

below 250,000                 3.5 

 250,000-350,000              6.5 

over 350,000-450,000          9.5 

over 450,000                12.5 
In its proposal, Rockville had identified its NDM volume as ranging 
from 100,000 to 150,000 pieces daily, to as much as 300,000 to 500,000 
pieces daily.  The technical evaluation panel (TEP) treated 
Rockville's volume as falling in the 350,000 to 450,000 range, and 
gave Rockville's proposal 9.5 points, out of a possible 12.5, under 
the NDM volume evaluation subfactor.  The source selection official 
(SSO) determined that the technical proposals of Jet Sort, Rockville, 
and another offeror were technically equivalent and recommended award 
to Rockville based on its low price.  Award was made to Rockville.  

During an on-site inspection of Rockville's facilities after award, 
the TEP noted that Rockville's volume of first-class mail appeared to 
be below the level which Rockville represented in its proposal.  The 
TEP asked Rockville to clarify the amount of first-class mail that it 
processes on a daily basis.  Rockville responded that it currently 
processed a daily average of 52,000 pieces of first-class mail, but 
that at the time that it submitted its proposal, its daily average was 
118,508.  The TEP ascertained that Rockville had interpreted the term 
"national distribution mail" to include both first-class and 
third-class mail.  The agency intended the term "national distribution 
mail" to apply only to first class mail, which is all that is relevant 
to this procurement.  Therefore, the agency determined that 
Rockville's proposal was incorrectly scored and should have received 
3.5 points for its NDM volume, instead of the 9.5 points that it did 
receive.  The TEP also concluded that at least one other competitive 
range offeror might have a similarly misinterpreted the intended 
meaning of the term "national distribution mail."  The agency 
determined that reopening discussions and reevaluating was necessary, 
and this protest followed.

Rockville argues that the agency's determination that the evaluation 
was flawed, and its resulting decision to reopen negotiations, was 
based on the incorrect premise that NDM volume was a technical 
evaluation factor.  The protester argues that the volume of NDM 
handled by each offeror impacts on each offeror's price, and was not 
properly encompassed by the solicitation's technical evaluation 
criteria.  Rockville contends that the technical evaluation criteria 
primarily dealt with offerors' technical experience, and that nothing 
in the criteria reasonably apprised an offeror that the agency would 
evaluate mail volume.  We disagree.  

The pertinent section of the evaluation criterion states as follows:

     "Offeror's experience in barcoding and mail presort operations to 
     include volumes of mail handled, amount of experience and 
     qualification rates achieved in the bar-coding/presorting of 
     national distribution mail."  

The agency explains that  NDM volume was considered only in the 
technical evaluation, in order "to avoid the possibility of an overly 
optimistic offeror overstating projected discount qualifying rates in 
order to gain an apparent price advantage over offerors with perhaps 
more realistic projections of discount qualification rates." The fact 
that NDM volume impacts price does not prohibit the agency from 
considering this matter under the technical evaluation, as long as the 
evaluation criteria provide for such evaluation.  Contrary to the 
protester's contention, this technical criterion reasonably indicates 
that in evaluating each offeror's experience, the agency would 
consider each offeror's "volumes of mail handled."   Accordingly, the 
agency reasonably assessed each offeror's NDM volume, as part of its 
evaluation of the offeror's experience.  Rockville's argument simply 
misconstrues the plain language of the quoted section.   

Next, Rockville argues that the SSA's action in reopening negotiations 
was unreasonable because the agency's evaluation error had no impact 
on the award decision.  Rockville argues that the distribution of a 
particular offeror's mail to various zip codes is far more important 
than its total volume in assessing the likelihood of obtaining mailing 
discounts.  In this regard, Rockville argues that the critical factor 
is each offeror's qualification rates, which is the percentage of a 
particular offeror's mail that qualifies for a USPS discount.  The 
protester argues that the TEP assigned it a qualification rate of 89 
percent that has never been challenged.   

Contracting officials in negotiated procurements have broad discretion 
to take corrective action where the agency determines that such action 
is necessary to ensure fair and impartial competition.  Oshkosh Truck 
Corp.; Idaho Norland Corp., B-237058.2; B-237058.3, Feb. 14, 1990, 
90-1 CPD  para.  274.  An agency may conduct a new evaluation where the 
record shows that the agency made the decision in good faith, without 
the specific intent of changing a particular offeror's technical 
ranking or avoiding an award to a particular offeror.  PRC, Inc., 72 
Comp. Gen. 530 (1992), 92-2 CPD  para.  215; Burns & Roe Servs. Corp., 
B-248394, Aug. 25, 1992, 92-2 CPD  para.  124.  We will not object to 
proposed corrective action where the agency concludes that award was 
not necessarily made on a basis most advantageous to the government, 
so long as the corrective action taken is appropriate to remedy the 
impropriety.  See Oshkosh Truck Corp.; Idaho Norland Corp., supra.

Here, we find nothing objectionable in the agency's decision to take 
corrective action.  Notwithstanding Rockville's view as to the greater 
relative importance of the qualification rate subfactor, the record 
makes clear that the incorrect evaluation  of Rockville's NDM had a 
significant impact on the award decision.[1]  Because Rockville 
interpreted NDM to include first- and third-class mail, Rockville's 
proposal received 9.5 points for its NDM volume, when in fact 
Rockville's proposal should have received 3.5 points for its 
first-class mail volume.  This adjustment would result in a reduction 
of Rockville's overall technical score from the 91 points, on the 
basis of which it was considered technically equal to two other 
slightly higher-scored proposals, to 85 points.  The contracting 
officer states that she would not consider Rockville's proposal, with 
this lower score, to be technically equivalent to the two 
higher-scored proposals.  Under these circumstances, the agency 
reasonably questioned whether the original award determination 
resulted in the best value to the government.  In view of the fact 
that the awardee and another offeror misconstrued a material 
solicitation clause in a manner which significantly affected the 
evaluation of their proposals and the award determination, the agency 
properly determined that reopening discussions and reevaluating was 
necessary to ensure a fair and impartial competition.  See Oshkosh 
Truck Corp., Idaho Norland Corp., supra.     
   
Rockville also challenges SSA's proposed action on the ground that, 
since prices have been disclosed, reopening discussions will result in 
a prohibited auction.  While Federal Acquisition Regulation  sec.  
15.610(e)(2) proscribes the use of auction techniques, this applies to 
the negotiation tactic of indicating one offeror's price to another 
offeror during negotiations; where reopening of negotiations is 
properly required notwithstanding the disclosure of an offeror's 
proposal, this does not constitute an improper action.  Sperry Corp., 
65 Comp. Gen. 715 (1986), 86-2 CPD  para.  48.  

In addition, there is nothing inherently illegal in the conduct of an 
auction in a negotiated procurement.  Rather, the possibility that a 
contract may not be awarded based on true competition on an equal 
basis has a more harmful effect on the integrity of the competitive 
procurement system than the fear of an auction.  Honeywell Information 
Sys., Inc., 56 Comp. Gen. 505 (1977), 77-1 CPD  para.  256.  The

statutory requirements for competition take primacy over the 
regulatory prohibitions of auction techniques.  See The Faxon Co., 67 
Comp. Gen. 39 (1987), 87-2 CPD  para.  425.  
 
The protest is denied.

Comptroller General
of the United States

1. Regarding Rockville's contention that its qualification rate is 
unchallenged, while the agency did not recalculate Rockville's 
qualification rate based on its actual (reduced) volume of first-class 
mail, the contracting officer did note that since Rockville actually 
had less than the indicated volume of its own first-class mail to 
commingle with SSA's mail, it would therefore probably qualify less 
first-class mail for discounts than the other higher-ranking offerors.  
The contracting officer's conclusion that Rockville's qualification 
rate would decrease because of a lower volume of first-class mail is 
consistent with the RFP provision that the qualification rate is based 
on an offeror's technical capabilities and the volume of its 
first-class mail from other customers that would be mixed with the 
agency's mail.