BNUMBER: B-271034
DATE: June 7, 1996
TITLE: CNA Industrial Engineering, Inc.
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DOCUMENT FOR PUBLIC RELEASE
A protected decision was issued on the date below and was subject to a
GAO Protective Order. This version has been redacted or approved by
the parties involved for public release.
Matter of:CNA Industrial Engineering, Inc.
File: B-271034
Date:June 7, 1996
Richard L. Hames, Esq., Davis Wright Tremaine, for the protester.
Lawrence J. Sklute, Esq., for GeneSys, Inc., an intervenor.
Steven W. Feldman, Esq., U. S. Army Corps of Engineers, for the
agency.
Peter A. Iannicelli, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Where request for proposals (RFP) for an automated storage and
retrieval system stated as a minimum requirement that proposals must
demonstrate expertise and experience with the Army's information
software system, and the agency stated at a preproposal conference
that only expertise and experience with the Army's information
software system would meet the RFP's minimum requirement, award to an
offeror that had expertise/experience with a similar software system
but not the Army's software system was an improper relaxation of the
RFP's stated minimum requirement.
DECISION
CNA Industrial Engineering, Inc. (CNA) protests award of a fixed-price
contract to GeneSys, Inc. (GI) for an automated storage and retrieval
system by the Corps of Engineers pursuant to request for proposals
(RFP) No. DACA87-95-R-0092. The protester contends that the agency
should have rejected GI's proposal as unacceptable because GI did not
meet the RFP's minimum qualifications. The protester also contends
that the agency improperly downgraded CNA's own proposal during
evaluation of proposals.
We sustain the protest.
Issued on August 15, 1995, as a total small business set-aside by the
Corps's Huntsville Division, the RFP solicited proposals for
installation and testing of an automated storage and retrieval system
at the Brooke Army Medical Center, San Antonio, Texas, and for
associated maintenance and training services. The primary objective
of the system is to provide efficient service to medical center
departments that require supply support; thus, the system will allow
for the receipt, storage, distribution, and re-ordering of medical
supplies, linens, and pharmaceutical supplies.
The RFP contemplated award of a contract to a single source for
turn-key installation of a complete, integrated system comprised of
three subsystems--a material distribution subsystem for medical
supplies, a linen subsystem and a pharmacy subsystem. The RFP
specified that the automated storage and retrieval system and each of
the subsystems must interface with the Army's informational software
system, known as "TAMMIS," as that software system will receive
requests for supplies and release orders from the central warehousing
system. The system's components include inventory management software
and hardware, automated equipment, controls, system interfacing,
debugging software, training, and implementation. The system will use
several sophisticated computer software programs to keep track of and
manage, among other things, purchasing, inventory, accounting, and
management data applications; an elaborate interfacing software
program will also be required to integrate the separate subsystems
into one complete system.
The closing date for submission of initial proposals was November 17,
1995, and only CNA and GI submitted proposals by that date. Both
offers were included in the competitive range, and written discussions
were conducted with both offerors. Best and final offers (BAFO) were
received and evaluated as follows:
CONSENSUS SCORE
OFFEROR (TECHNICAL/MANAGEMENT) PRICE
CNA [DELETED] [DELETED]
GI [DELETED][1] [DELETED]
The evaluators determined that GI's proposal had [DELETED]. The
contracting officer, however, determined that CNA's BAFO was
[DELETED]. On January 25, 1996, the contracting officer awarded the
contract to GI. A debriefing conference was held with CNA on February
1, and this protest was filed in our Office shortly thereafter. The
Corps issued a stop work order to GI pending our decision on the
protest.
The protester contends that GI's proposal should have been rejected as
unacceptable because GI does not satisfy the RFP's requirement for
offerors to have extensive expertise with the Army's TAMMIS system and
for offers to state at least one site where the offeror gained TAMMIS
interface experience. The protester also contends that the Corps
unreasonably downgraded CNA's proposal regarding [DELETED].
The agency acknowledges that GI does not have TAMMIS expertise or
experience. However, the agency reports that GI has ample experience
with the Air Force's MEDLOG informational software system. According
to the contracting officer, the evaluators found that GI's MEDLOG
experience was functionally equivalent to TAMMIS experience.[2] In
this regard, the contracting officer states that TAMMIS and MEDLOG
perform the same functionally, relying on the same file formats for
data input/output; both software systems perform inventory management
functions at the wholesale and retail level; both systems have similar
interface capabilities; the two systems are similar and compatible,
and can pass MILSTRIP[3] transactions to each other for medical supply
requests; and both systems use the same sources of supply and support
the same customers.
The contracting officer also argues that the RFP permitted the agency
to consider GI's MEDLOG expertise/experience as an acceptable
substitute for meeting the TAMMIS qualifications. The contracting
officer points out that the RFP's proposal preparation instructions
stated that offerors could propose alternative solutions to meet RFP
requirements provided they explained in detail why the alternative
solution is acceptable. The contracting officer also states that he
relied upon a provision in the evaluation section of the RFP that
stated:
"Notwithstanding any other RFP language, the Contracting Officer
has reasonable discretion to accept a proposal meeting the
Government's true needs that might not otherwise conform with all
RFP requirements."
The contracting officer asserts that GI's MEDLOG expertise/experience
was simply an alternative solution to the TAMMIS requirement, that
GI's proposal explained why MEDLOG experience was an acceptable
substitute, and that he reasonably determined that MEDLOG
expertise/experience met the agency's true needs.
Generally, our Office will question an agency's evaluation of
proposals only if the evaluation lacks a reasonable basis or is
inconsistent with the RFP's stated evaluation criteria. DAE Corp.,
Ltd., B-257185, Sept. 6, 1994, 94-2 CPD para. 95. We find that the
Corps's evaluation of GI's offer was not consistent with the RFP's
stated scheme because GI did not satisfy the RFP's minimum
expertise/experience requirement. We also find that the RFP
overstated the Corps's actual needs regarding the type of
expertise/experience that was necessary.
It is a fundamental rule of competitive procurement that all offerors
be provided a common basis for submission of proposals. Container
Prods. Corp., B-255883, Apr. 13, 1994, 94-1 CPD para. 255. When an agency
relaxes its requirements, either before or after receipt of proposals,
it must issue a written amendment to notify all offerors of the
changed requirements. Id. We will sustain a protest where an agency,
without issuing a written amendment, relaxes an RFP specification to
the protester's possible prejudice (e.g., where the protester would
have altered its proposal to its competitive advantage had it been
given the opportunity to respond to the altered requirements). Id.
Here, the RFP stated that proposals would be evaluated on technical,
management, and price factors and that the technical and management
factors together were more important than price. The RFP indicated
that the management factor, consisting of three subfactors (experience
of the prime and subcontractors, past performance, and personnel), was
the most important factor. The RFP also indicated that the experience
of the prime and subcontractors subfactor and the past performance
subfactor represented more than half of the total evaluation points
that could be awarded a perfect proposal.[4]
Under the heading, "Required Minimum Qualifications," the RFP stated
(in Appendix K, page A-12) that:
"System implementor must demonstrate the following minimum
qualifications:
- Extensive expertise with the US Army Medical Logistics Systems
(CPD & TAMMIS) and demonstrated TAMMIS interface experience
(at least one site where a TAMMIS interface is in place)."
The RFP's specifications also stated in a number of places that the
automated storage and retrieval system and each of the software
subsystems must interact and interface with the Army's TAMMIS software
system. Thus, it was clear from the RFP that the agency's minimum
need was for TAMMIS expertise and TAMMIS interface experience. In
addition, the agency reaffirmed that only TAMMIS experience would meet
its needs at the preproposal conference. At that meeting, a
prospective offeror specifically asked:
"Appendix K, page A-12. Must you have actual experience using
TAMMIS, or is experience with similar software and approach to be
considered?"
The Corps's answer, as memorialized in written preproposal conference
minutes, which were signed by the Corps's Huntsville Division's
Director of Contracting[5] and which were distributed to all
prospective offerors, was:
"Must have actual experience with TAMMIS."
As stated above, to justify accepting GI's offer the contracting
officer relies on the proposal preparation instructions statement that
alternative solutions to meet government requirements would be
considered and on the evaluation scheme statement that the contracting
officer could accept a proposal meeting the government's true needs
that might not otherwise conform with all RFP requirements. It is not
clear exactly what government requirements might be encompassed by the
former, or what true needs by the latter, but in our view neither
provision properly can be the basis for waiving a specific requirement
that was identified in the RFP as a "Required Minimum Qualification"
and which companies entering the competition expressly were advised
was not waivable. That is, given the clear references in the RFP to
the need for TAMMIS experience and the unequivocal confirmation of
that requirement at the preproposal conference--"similar software and
approach" would not be considered acceptable--we think the agency's
reliance on the two RFP provisions in issue to justify waiving the
TAMMIS expertise/experience requirement for the awardee is misplaced.
In short, in awarding the contract to GI on the basis of its having
expertise/ experience with a similar software system, the agency
improperly relaxed or waived the terms of the RFP without amending the
RFP to notify all offerors of the changed requirement, to the likely
prejudice of CNA. In this regard, CNA has submitted two affidavits to
show that it would have sought competitive bids from several software
vendors and probably would have been able to offer the Corps a lower
price if it knew that other than TAMMIS expertise and experience were
acceptable. See Logitek, Inc.--Recon., B-238773.2; B-238773.3, Nov.
19, 1990, 90-2 CPD para. 401. Accordingly, we sustain CNA's protest on
this basis.
We recommend that the Corps amend the RFP to allow offers based upon
expertise and experience that is equivalent or similar to TAMMIS
experience, reopen discussions with CNA and GI, and accept and
evaluate revised proposals.[6] If, after evaluating the revised
proposals, the agency determines that the contract should be awarded
to CNA, the contract with GI should be terminated for the convenience
of the government and the contract awarded to CNA; if the evaluation
results in a decision in favor of GI, the award to GI may stand. We
also recommend that the protester be reimbursed the costs of filing
and pursuing its protest. Bid Protest Regulations, 4 C.F.R. sec.
21.8(d)(1) (1996). The protester should submit its detailed and
certified claim for costs to the contracting agency within 90 days of
receiving this decision. Bid Protest Regulations, 4 C.F.R. sec.
21.8(f)(1).
The protest is sustained.
Comptroller General
of the United States
1. The RFP's evaluation scheme set out the number of points that could
be garnered for each of several technical/management subfactors and
stated that a total of
205 technical/management points could be accumulated. However, the
evaluation team incorrectly gave [DELETED] 10 points rather than the
maximum available 5 points set out in the RFP for the training
subfactor, thus inadvertently increasing to 210 the maximum available
total points.
2. When requested to supply the protester and our Office with all
evaluation documents concerning evaluation of GI's TAMMIS
experience/expertise, the Corps replied that no such documents exist.
However, in response to the protest, the Corps provided documents,
which are unrefuted, supporting its conclusions that TAMMIS and MEDLOG
are equivalent systems.
3. MILSTRIP stands for "Military Standards Requisitioning and Issues
Procedures."
4. The RFP stated that these two subfactors were worth 105 of the 205
total available evaluation points.
5. It is unrefuted that the Director of Contracting is the contracting
officer's supervisor.
6. Since we are recommending that the Corps reopen discussions with
and accept revised proposals from both offerors, we need not resolve
CNA's protest that the agency improperly downgraded its proposal with
regard to [DELETED]. We think this and the other matters can be
addressed upon reopening of discussions.