BNUMBER:  B-271693; B-271693.2
DATE:  August 2, 1996
TITLE:  Global Associates Ltd.

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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:Global Associates Ltd.

File:     B-271693; B-271693.2

Date:August 2, 1996

Ross W. Dembling, Esq., and Craig A. Holman, Esq., Holland & Knight, 
for the protester.
Robert E. Gregg, Esq., Hazel & Thomas, for Grammarians, Inc., the 
intervenor.
Alan D. Groesbeck, Esq., Department of Agriculture, for the agency.
John L. Formica, Esq., and James A. Spangenberg, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Where a proposal, submitted in response to a solicitation, which 
was issued as a total small business set-aside and included the 
required "Limitations on Subcontracting" clause, Federal Acquisition 
Regulation  sec.  52.219-14, is ambiguous as to its compliance with the 
clause, communications between the agency and an offeror, which 
resulted in the offeror's submission and the agency's consideration of 
a five-page document explaining the offeror's approach to complying 
with the subcontracting limitation, constitute discussions, such that 
the agency must reopen discussions and allow for the submission of 
best and final offers.

2.  Protest that the agency unreasonably determined that the awardee's 
proposal was compliant with a request for proposal's "Limitations on 
Subcontracting" clause, Federal Acquisition Regulation  sec.  52.219-14, 
constitutes a challenge to the acceptability of the proposal.

3.  Protester was prejudiced where the agency conducted discussions 
with only the awardee after the submission of best and final offers 
(BAFO) to allow the awardee to revise its unacceptable proposal to 
make it compliant with "Limitations on Subcontracting" clause, Federal 
Acquisition Regulation  sec.  52.219-14, because it could have simply 
rejected the awardee's proposal or allowed the protester the same 
opportunity to revise its proposal.

DECISION

Global Associates Ltd. protests the award of a contract to 
Grammarians, Inc., under request for proposals (RFP) No. WO-96-02, 
issued by the Forest Service, Department of Agriculture, for writing, 
editing, and other services in support of the Forest Service's 
publications program.  Global protests that the agency improperly 
evaluated its proposal, failed to perform a reasonable price/technical 
trade-off, and conducted improper post-best and final offer (BAFO) 
discussions with Grammarians. 

We sustain the protest.

The RFP, issued as a total small business set-aside, provided for the 
award of a fixed-price requirements contract for a base period of 1 
year with four 1-year options.  The RFP requested the submission of 
technical and cost/price proposals, and provided detailed instructions 
for their preparation.  The solicitation stated that the award would 
be made to the responsible offeror whose offer, conforming to the 
solicitation, represented the best value to the government.  The RFP 
stated that the agency was concerned with obtaining superior technical 
and management features and thus technical merit was more important 
than price.  The solicitation listed the following evaluation criteria 
in descending order of importance:

     1. Corporate experience
     2. Past experience on similar projects
     3. Project management
     4. Personnel qualifications and experience
     5. Familiarity with government publishing standards and 
        regulations

The RFP also included the standard "Limitations on Subcontracting" 
clause, as set forth at Federal Acquisition Regulation (FAR)  sec.  
52.219-14.  This clause is required for all solicitations issued as 
small business set-asides, FAR  sec.  19.508(e), and provides in relevant 
part as follows:

     "(b)  By submission of an offer and execution of a contract, the 
     Offeror/Contractor agrees that in performance of the contract in 
     the case of a contract for--

        (1)  Services (except construction).  At least 50 percent of 
        the cost of contract performance incurred for personnel shall 
        be expended for employees of the concern."

The agency received eight proposals by the RFP's closing date of 
January 25, 1996.  The proposals were evaluated by the Technical 
Evaluation Team (TET), and three proposals, including those submitted 
by Grammarians and Global, were included in the competitive range.  
Written discussions were conducted, and BAFOs were requested on 
February 27 and received on March 5.  

The contracting officer states that on February 27, she requested 
reports from Dun & Bradstreet on each of the three offerors whose 
proposals had been included in the competitive range.  The report on 
Grammarians, which the contracting officer received on March 5, listed 
the number of its employees as two, whereas Grammarians's proposed 
staffing plan for this RFP listed [DELETED] individuals to perform the 
work.  Because the Dun & Bradstreet report indicated that the 
information was from 1989, the contracting officer requested an 
updated report.  The updated report was received on March 12, and 
again stated that Grammarians had only two employees.

Because the contracting officer had not read the technical proposals 
in detail, she asked a member of the TET what Grammarians's proposal 
provided relating to employees.  The TET member recalled that 
Grammarians had proposed to staff the contract with its own employees, 
except for certain [DELETED] work which would be subcontracted to 
[DELETED].  The contracting officer states that at this time she 
"scanned Grammarians's technical proposal," and found that although 
"it was obvious that [DELETED] was a subcontractor, [she] could not be 
certain from the proposal that other staff were not employees."[1]

On March 13, the contracting officer and the TET visited Grammarians's 
office to assess that firm's ability to perform the contract in 
accordance with the RFP's statement of work.  The contracting officer 
reports that during this visit the "issue of employees came up" with 
the president of Grammarians, who stated that "the staff were not 
actually employees, but were independent contractors."  The 
contracting officer asked the president if she were aware of the RFP's 
Limitations on Subcontracting clause, and that when the clause was 
"looked up" on Grammarians's copy of the RFP, the contracting officer 
reports, Grammarians had "highlighted" the clause and placed "a 
question mark" by it.

On March 15, the contracting officer contacted the president and 
requested that Grammarians furnish "clarification that would indicate 
[Grammarians's] compliance with the subcontracting limitation."  A 
five-page document was received by the contracting officer from 
Grammarians later that day, which stated, among other things, that 
Grammarians was "[DELETED]."  The contracting officer did not provide 
the document to the TET, and Grammarians's proposal was not rescored 
after its receipt.  The contracting officer reports that she found, 
based upon her review of the document, that "Grammarians was aware of 
the subcontracting clause and intended to comply."

Grammarians's BAFO was rated at [DELETED] out of 100 technical points 
at an evaluated price of $1,025,282, and Global's BAFO was rated at 
[DELETED] points at an evaluated price of $[DELETED].[2]  The agency 
determined that Grammarians's proposal reflected the best value to the 
government, and made award to that firm on March 26.

Global protests that the communications between the agency and 
Grammarians as to whether Grammarians's proposal complied with the 
RFP's subcontracting limitation constituted improper post-BAFO 
discussions.

Discussions occur when the government communicates with an offeror for 
the purpose of obtaining information essential to determine the 
acceptability of a proposal or provides the offeror with an 
opportunity to revise or modify its proposal.  FAR  sec.  15.601; Strategic 
Analysis, Inc., B-270075; B-270075.4, Feb. 5, 1996, 96-1 CPD  para.  41.  In 
contrast, clarifications are merely inquiries for the purpose of 
eliminating minor uncertainties or irregularities in a proposal and do 
not give an offeror the opportunity to revise or modify its proposal.  
FAR  sec.  15.601; Unitor Ships Serv., Inc., B-245642, Jan. 27, 1992, 92-1 
CPD  para.  110.  If a procuring agency holds discussions with one offeror, 
it must hold discussions with all offerors whose proposals are in the 
competitive range, whereas clarifications may be requested from just 
one offeror.  Raytheon Co., B-261959.3, Jan. 23, 1996, 96-1 CPD  para.  37.

We agree with the protester that the communications of the agency and 
the awardee as to the employment status of Grammarians's proposed 
staff to assure compliance with the Limitations on Subcontracting 
clause constituted discussions.  The contracting officer concedes that 
in her view it was not clear from Grammarians's proposal whether the 
personnel proposed were employees of Grammarians, and the agency 
states in its supplemental report that Grammarians's "technical 
proposal was ambiguous" with regard to its compliance with the 
subcontracting limitation.  Nevertheless, the agency asserts that 
because Grammarians's proposal, although ambiguous, did not 
"unequivocally take exception to the requirement limiting 
subcontracting," Grammarians post-BAFO statement of how it intended to 
comply with this clause did not constitute discussions.

From our review, Grammarians's proposal evidences that Grammarians's 
staffing approach would not comply with the Limitations on 
Subcontracting clause.  For example, the proposal states that 
Grammarians has a total of [DELETED] employees, specifies that 
"Grammarians operates [DELETED]," and refers to [DELETED]."  Moreover, 
Grammarians confirmed in its post-BAFO discussions with the agency 
that its proposal contemplated [DELETED]. 

In any case, regardless of whether Grammarians's proposal clearly took 
exception to the Limitations on Subcontracting clause or was merely 
ambiguous in this regard, the post-BAFO communications with 
Grammarians were necessary to ascertain whether Grammarians proposed 
to comply with the subcontracting limitations, that is, whether 
Grammarians proposed to comply with a material requirement of the RFP 
and thus whether its proposal was technically acceptable.  See Mine 
Safety Appliances Co.; Interspiro, Inc., B-247919.5; B-247919.6, Sept. 
3, 1992, 92-2 CPD  para.  150 (award improper where the awardee's proposal 
does not explicitly show compliance with a material requirement and 
there is reason to doubt that the offeror is agreeing to meet the 
requirement); National Medical Staffing, Inc.; PRS Consultants, Inc., 
69 Comp. Gen. 500 (1990), 90-1 CPD  para.  530 (award based on proposal 
which indicated noncompliance with the subcontracting limitation was 
improper).  The communications between the agency and Grammarians thus 
constituted discussions as they involved the exchange of information 
necessary to determine the acceptability of Grammarians' proposal.  
FAR  sec.  15.601; Strategic Analysis, Inc., supra.

The agency and Grammarians argue that an agency's consideration of 
whether an offeror is capable of complying or whether the offeror 
actually complies with the subcontracting limitation are matters of 
responsibility or contract administration, respectively (issues not 
for consideration by our office absent circumstances not present here, 
Bid Protest Regulations, 4 C.F.R.  sec.  21.5(a) and (c) (1996)), and 
because of this, any communications concerning the subcontracting 
limitation cannot properly be considered discussions.  See CH2M Hill, 
Ltd., B-259511 et al., Apr. 6, 1995, 95-1 CPD  para.  203.

As a general matter, a contracting officer's judgment as to whether a 
small business offeror will comply with the subcontracting limitation 
is a matter of responsibility, and the contractor's actual compliance 
with the provision is a matter of contract administration.  See 
Corvac, Inc., B-254757, Jan. 11, 1994, 94-1 CPD  para.  14; American Bristol 
Indus., Inc., B-249108.2, Oct. 22, 1992, 92-2 CPD  para.  268; Little 
Susitna, Inc., B-244228, July 1, 1991, 91-2 CPD  para.  6.  However, the 
protest allegation here challenges the agency's determination that 
Grammarians's proposal was acceptable, and is based upon the 
representations in the proposal which, as the agency concedes, make it 
at best unclear as to whether the proposal complied with the 
subcontracting limitation.  Protests such as this, which are directed 
at the awardee's proposal, challenge the reasonableness of the 
agency's determination of technical acceptability rather than the 
offeror's responsibility.  National Medical Staffing, Inc.; PRS 
Consultants, Inc., supra (proposal which indicated noncompliance with 
the subcontracting limitation should have been rejected as technically 
unacceptable); Signal Corp., B-241849 et al., Feb. 26, 1991, 91-1 CPD  para.  
218 (award properly made to offeror whose proposal established 
compliance with subcontracting limitation).  Accordingly, the agency's 
post-BAFO communications with Grammarians regarding its proposal and 
the subcontracting limitation, which were necessary in order to 
determine the acceptability of the proposal, constituted discussions.

The agency contends that, in any event, Global was not prejudiced by 
the agency's post-BAFO communications with Grammarians.  The agency 
argues that Global has failed to demonstrate that it was prejudiced by 
the agency's actions because Global has not shown "that without the 
communications between [the] Forest Service and Grammarians regarding 
the Limitations on Subcontracting clause, there was a reasonable 
likelihood that Global would have been awarded the contract."  See 
Data General Corp., 78 F. 3d 1556, 1562 (Fed. Cir. 1996) (". . . to 
establish prejudice, a protester must show that, had it not been for 
the alleged error in the procurement process, there was a reasonable 
likelihood that the protester would have been awarded the contract.").

Competitive prejudice is an essential element of every viable protest.  
Diverco, Inc., B-259734, Apr. 21, 1995, 95-1 CPD  para.  209.  Absolute 
proof of prejudice is not required.  Where an agency violates 
procurement requirements, we have traditionally considered a 
reasonable possibility that the protester would have otherwise been 
the successful offeror as a sufficient basis for sustaining a protest.  
Alliant Techsystems, Inc.; Olin Corp., B-260215.4; B-260215.5, Aug. 4, 
1995, 95-2 CPD  para.  79; Foundation Health Fed. Servs., Inc.; QualMed, 
Inc., B-254397.4 et al., Dec. 20, 1993, 94-1 CPD  para.  3; The Jonathan 
Corp.; Metro Mach. Corp., B-251698.3; B-251698.4, May 17, 1993, 93-2 
CPD  para.  174, aff'd, Moon Eng'g Co., Inc.--Recon., B-251698.6, Oct. 19, 
1993, 93-2 CPD  para.  233.  

Here, it is clear from the record that Global was prejudiced by the 
agency's improper post-BAFO discussions with Grammarians because its 
BAFO, as submitted, could not properly have been accepted for award.  
As discussed above, Grammarians's BAFO on its face showed 
noncompliance with a mandatory clause of the RFP which could not be 
waived, and became arguably acceptable only because of the post-BAFO 
communications.[3]  If the agency had rejected Grammarians's proposal, 
instead of conducting the improper post-BAFO discussions only with 
Grammarians, Global would have been in line for award.   In such a 
situation, we believe that the conduct of post-BAFO discussions with 
the selected offeror, as opposed to simply rejecting the awardee's 
proposal, constitutes prejudice to the protester.[4]   Smithkline 
Beecham Pharmaceuticals, N.A., B-252226.2, Aug. 4, 1993, 93-2 CPD  para.  
79.  Based on the foregoing, we think it is clear that had the agency 
not conducted post-BAFO discussions with Grammarians, or instead had 
provided Global with the same opportunity as Grammarians (that is, 
another round of discussions to revise its proposal), Global might 
well have received the award.  See 4th Dimension Software, Inc.; 
Computer Assocs. Int'l, Inc., B-251936; B-251936.2, May 13, 1993, 93-1 
CPD  para.  420.

Accordingly, we recommend that the agency reopen discussions and 
request BAFOs.[5]  If the agency ultimately determines that Global's 
offer is more advantageous than the offer submitted by Grammarians, 
the agency should terminate Grammarians contract and award the 
contract to Global.  We also recommend that the protester recover the 
cost of filing and pursuing this protest, including reasonable 
attorneys' fees.  4 C.F.R.  sec.  21.8(d)(1) (1996).  The protester should 
submit its certified claim for costs directly to the agency within 90 
days of receipt of this decision.  4 C.F.R.  sec.  21.8(f)(1).

The protest is sustained.

Comptroller General
of the United States

1. Our review of Grammarians's proposal shows that because of its 
proposed use of independent contractors as subcontractors, in addition 
to its use of [DELETED], the proposal evidenced that Grammarians would 
likely not comply with the Limitations on Subcontracting clause.

2. The third offeror's BAFO was lower rated and higher priced than the 
BAFO of either Grammarians or Global.

3. We cannot ascertain, from this record, whether Grammarians's 
post-BAFO explanation of how it intended to comply with the 
subcontracting limitation was acceptable.

4. We also note that the agency failed to consider the impact of 
Grammarians's post-BAFO statements on that firm's technical score.  As 
mentioned previously, Grammarians's staffing approach was premised on 
[DELETED].  For example, the agency specifically noted in documenting 
the selection of Grammarians for award that Grammarians "[DELETED]."  
However, Grammarians's post-BAFO promise to [DELETED].  This was never 
evaluated by the agency.  Based on our review, if Grammarians's 
revised staffing approach had been evaluated, its technical score 
might have been lower.

5. Global also raised a number of other protest allegations, in 
particular that the agency improperly evaluated its proposal and 
failed to perform a reasonable price/technical trade-off.  In view our 
recommendation, we need not decide Global's other allegations since 
these matters can be resolved during discussions and during the 
agency's source selection.  See Raytheon Co., supra..