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.