BNUMBER:  B-271882; B-271882.2
DATE:  August 26, 1996
TITLE:  Trimble Navigation, Ltd.

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

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:Trimble Navigation, Ltd.

File:     B-271882; B-271882.2

Date:August 26, 1996

William W. Goodrich, Jr., Esq., Richard J. Webber, Esq., Alison J. 
Micheli, Esq., and Tenley A. Carp, Esq., Arent Fox, for the protester.
Stan Hinton, Esq., and Paul W. Searles, Esq., Baker & Botts, for 
Rockwell International Corporation, an intervenor.
Vera Meza-Dombkowski, Esq., and David H. Scott, Esq., Department of 
the Army, for the agency.
Guy R. Pietrovito, Esq., and James A. Spangenberg, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

In a negotiated procurement for a hand-held global positioning system 
receiver, award could not properly be made to an offeror whose 
proposal did not demonstrate that it satisfied the solicitation's 
requirement for a nondevelopmental item.

DECISION

Trimble Navigation, Ltd. protests the award of a contract to Rockwell 
Collins Inc., under request for proposals (RFP) No. DAAD05-96-R-9011, 
issued by the U.S. Army Aberdeen Proving Ground Support Activity for 
the Special Operations Lightweight Global Positioning System Receiver 
(SOLGR).  Trimble protests that Rockwell's offered receiver is not a 
nondevelopmental item (NDI), as required by the RFP.

We sustain the protest.

The global positioning system (GPS) is a space-based navigation system 
that provides military users worldwide with precise three-dimensional 
position, velocity, and time data.  The standard Department of Defense 
hand-held, precise positioning service,[1] GPS receiver used by 
general purpose forces is the Precision Lightweight GPS Receiver 
(PLGR), which both Trimble and Rockwell have previously provided.  
U.S. Special Operations Forces, however, require enhanced performance, 
such as extended navigation features, multiple communications 
interfaces, and more rugged environmental capabilities, than is 
available in the PLGR.  In response to this requirement, Trimble and 
Rockwell received separate, development contracts to develop 
prototypes of the SOLGR for use by Special Operations Forces.  
Pursuant to these contracts, Trimble and Rockwell developed separate 
prototypes of the SOLGR, which were delivered to the government for 
testing.

The RFP here was for a limited competition between Trimble and 
Rockwell that would lead to the selection of the firm that would 
continue the SOLGR program into production.  Fixed-price proposals 
were requested for three contract line items (CLIN):  CLIN 0001 sought 
a fixed price for one lot of manufacture and testing of twenty SOLGR 
first articles; CLIN 0002 sought unit pricing for an estimated 
quantity of 1,000 receivers; and CLIN 0003 sought pricing for one lot 
of specified contract data.  The contractor was required to deliver 
first articles and to complete first article testing within 240 days 
after contract award.  

The RFP included design and performance specifications for the SOLGR 
which, among other things, established stringent requirements for the 
size and weight of the receiver, battery performance, and 
environmental considerations--such as the ability to operate to depths 
of 33 feet.  Offerors were requested to describe how they would meet 
each technical requirement and identify any specific requirement that 
may not be met.  Offerors were also instructed that they may provide 
sample hardware "from mockups to fully functional prototypes."

The statement of work (SOW) provided that the receiver must be an NDI.  
In this regard, the RFP incorporated by reference the standard 
"Definitions" clause stated in Federal Acquisition Regulation (FAR)  sec.  
52.202-1 (FAC 90-32), which provides, in pertinent part, the following 
definition:

     "(e) Nondevelopmental item means--

        (1) Any previously developed item of supply used exclusively 
        for governmental purposes by a Federal agency, a State or 
        local government, or a foreign government with which the 
        United States has a mutual defense cooperation agreement;

        (2) Any item described in paragraph (e)(1) of this definition 
        that requires only minor modification or modifications of a 
        type customarily available in the commercial marketplace in 
        order to meet the requirements of the procuring department or 
        agency; or

        (3) Any item of supply being produced that does not meet the 
        requirements of paragraph (e)(1) or (e)(2) solely because the 
        item is not yet in use."

Offerors were informed that award would be made on a best value basis 
and that technical evaluation factors were slightly more important 
than price.  The RFP stated a number of evaluation factors that judged 
the design and performance of offered receivers; system weight/volume 
and battery life were identified as the two most important evaluation 
factors, being more important than the combined remainder of the 
evaluation factors.  Offerors were informed that risk associated with 
achieving each system parameter would be evaluated under each 
evaluation factor/parameter and that offered enhancements beyond the 
system requirements may be provided with additional consideration.  
The RFP also stated that to be found acceptable, their proposals must 
demonstrate (1) understanding of the technical requirements and the 
means required to fulfill the technical requirements; (2) completeness 
of the offerors' analyses of each factor and subfactor; and (3) the 
"[f]easibility of performing all the terms and conditions of the offer 
within the cost proposed by the offeror."[2]

Trimble and Rockwell submitted proposals, including demonstration 
models of their proposed receivers, by the March 15, 1996, proposal 
closing date.  In addition, each offeror made an oral presentation to 
the technical evaluation board (TEB).   Rockwell was asked numerous 
questions during its oral presentation concerning its offered, 
redesigned receiver.[3]  As documented by the TEB's March 29 report, 
Trimble's technical proposal received a total score of [DELETED] 
points of a possible [DELETED] maximum points and was determined to be 
"[DELETED]" to Rockwell's proposal, which received a point score of 
[DELETED].  

The TEB found that Trimble's offered SOLGR was [DELETED] and that the 
prototype "[DELETED] had already passed most of the testing to qualify 
against the SOLGR specification."  The TEB concluded that Trimble's 
proposal was [DELETED].  Rockwell's proposal, on the other hand, was 
found to be "[DELETED]."  Specifically, the TEB found:

     "[DELETED]."

Trimble and Rockwell offered the following fixed prices to perform the 
contract:

     CLIN      Trimble        Rockwell
     0001      $[DELETED]     $0
     0002      $[DELETED]     $1,699,000
     0003      $[DELETED]     $0
     TOTAL     $[DELETED]     $1,699,000

Price proposals were evaluated for realism and reasonableness.  
Although limited cost information was provided with the offerors' 
proposals and Rockwell's proposed production unit price of $[DELETED] 
per unit was [DELETED] the government's estimate of $[DELETED] per 
unit, the Army concluded that each firm's proposed price was realistic 
and reasonable.

The technical evaluation findings were documented in evaluators' 
notes, consensus scoring sheets, and TEB report, which were presented 
to the source selection authority (SSA), along with the firms' 
proposals.  Hearing Transcript (Tr.) at 69-70, 86-87.[4]  On April 8, 
the SSA met with the TEB chairman and the cost/price analyst for the 
procurement.  The TEB chair and cost/price analyst testified that 
there was little discussion concerning the technical evaluation, that 
the SSA only asked the TEB chairman whether he could make a case for 
award to Trimble at that firm's higher proposed price, and that the 
TEB chairman responded, non-specifically and without explanation, that 
he could not.  Tr. at 58-59, 71, 201.  The SSA testified that in 
selecting Rockwell's offer for award he understood that Rockwell had 
submitted a new model which reflected a significant redesign of the 
firm's earlier prototype, but that he nevertheless believed that 
Rockwell's unit satisfied the RFP's NDI requirements.  Tr. at 93-94, 
96, 98.  Although no written source selection decision was made, the 
SSA concluded that Trimble's [DELETED] higher technical score was not 
worth the price premium, which the SSA erroneously believed to be 
[DELETED] percent higher than Rockwell's price.[5]  Tr. at 115-116.

Award was made to Rockwell on April 11, and this protest followed.  
This matter has been stayed pending our decision on the merits.

Trimble argues that the Army could not properly accept Rockwell's 
proposed SOLGR, which was not an NDI, as required by the RFP.  Trimble 
contends that, as the agency's evaluators found during the technical 
evaluation, the modifications Rockwell proposed to its earlier 
produced prototype are not "minor modifications" and therefore 
Rockwell's proposal was unacceptable.

The Army responds that Rockwell's proposed receiver was properly 
determined to be an NDI, because "NDI is a generic term," which allows 
the government to purchase items that may already exist and which may 
require some modification to satisfy the government's specification 
requirements.  The Army and Rockwell argue that offerors were on 
notice that the agency would accept substantial modifications of 
receivers because the RFP specifications had been revised since the 
development of the SOLGR prototypes.  In this regard, the Army notes 
that both Rockwell's and Trimble's prototype receivers required some 
redesign to satisfy the RFP requirements.

The RFP requirement for an NDI is in accord with the stated 
Congressional intent in the Federal Acquisition Streamlining Act of 
1994 (FASA) that contracting agencies acquire, to the maximum extent 
practicable, commercial items or NDIs.  See 10 U.S.C.  sec.  2377(b)(1) 
(1994).  To this end, FASA established a preference for the 
acquisition of commercial items or NDIs, where commercial items are 
not available, and defined the term NDI.  41 U.S.C.  sec.  403(13) (1994); 
10 U.S.C.  sec.  2376.  As noted above, the RFP included the standard 
"Definition" clause, FAR  sec.  52.202-1, that defined NDI as including any 
previously developed item that does not require more than minor 
modification to satisfy the agency's needs.  This definition is in 
accord with the statutory definition.  Thus, to the extent that the 
agency believes that the term "NDI" is not clearly defined and allows 
the agency to buy, as NDI, items that require more than minor 
modifications to meet its needs, the agency is simply mistaken.

While the Army and Rockwell argue, in response to the protest, that 
offerors were on notice from the revisions made in the SOLGR 
specification after the development of prototypes that the RFP 
contemplated that offered receivers, which reflected more than minor 
modifications to previously developed items, could be considered, the 
record does not show that the revisions in the SOLGR specification 
were so substantial as to indicate to offerors that the RFP 
contemplated a more expansive definition of NDI than that provided by 
the solicitation.[6]  That these revisions were not substantial is 
shown by the fact that Trimble's proposed SOLGR was found to be 
[DELETED] to its earlier prototype; the TEB chairman testified that 
Trimble proposed only "[DELETED]" of its prototype.  Tr. at 17.  

Because both Rockwell's and Trimble's SOLGR prototypes, upon which 
their offered receivers were based, are a "previously developed item 
of supply," the question for our Office is whether the modifications 
required in Rockwell's offered receiver could reasonably be determined 
to be minor such that it could be considered an NDI.  We find from 
this record, as explained below, that the modifications proposed by 
Rockwell are not minor and that its offered product is not an NDI.

The determination as to whether modifications to a previously 
developed item of supply are minor--and thus whether the product 
properly fits within the definition of NDI--is within the agency's 
technical judgment, which we will overturn only where it is shown to 
be unreasonable.  TRW Inc.; Systems Research and Applications Corp., 
B-260968.2 et al., Aug. 14, 1995, 95-2 CPD  para.  101.  In considering 
whether a modification is in fact minor, agencies should consider both 
the technical complexity of the change and the degree of risk 
associated with it.  Id.

Here, the record establishes that Rockwell proposed numerous, 
significant modifications to its previously developed prototype to 
satisfy the RFP requirements.  In particular, Rockwell proposed a 
redesign of its prototype model to [DELETED].  Tr. at 18, 34-36, 38.  
That Rockwell was proposing a modified and redesigned version of its 
earlier prototype was recognized by the agency in its evaluation; it 
was primarily for this reason that Rockwell's proposal was evaluated 
as being [DELETED].  In this regard, the evaluators described 
Rockwell's offered SOLGR as being "vastly different" from Rockwell's 
prototype, and as being a "new" and "[DELETED]" design that posed 
"[DELETED]."  The TEB chairman and SSA both testified at the hearing 
that Rockwell's offered receiver was "different" from and a 
"substantial redesign" of the earlier submitted prototype.  Tr. 18, 
32, 93, 98.  In fact, the SSA testified that his understanding at the 
time of making his award decision was that Rockwell had offered "a new 
model which reflected a significant redesign of the prototype."  Tr. 
at 93.  

Despite the modifications and redesign evidenced in Rockwell's offered 
receiver, the SSA testified that he considered Rockwell's receiver to 
be an NDI.  Tr. at 95-96.  The SSA testified that he discussed with 
the TEB chairman and the cost/price analyst whether Rockwell's offered 
receiver could be considered an NDI and was assured that it could.  
Tr. at 98-99.  Specifically, the SSA testified that after 
"significant, lengthy discussions" he was convinced that Rockwell's 
offered unit was an NDI because it represented minor modifications to 
the PLGR.  Tr. at 99, 101.  The SSA also admitted that, given his lack 
of technical knowledge regarding the features modified on the Rockwell 
unit, his judgment that the modifications to the PLGR were minor was 
based only upon discussions with the TEB chairman.  Tr. at 104, 108.  
The SSA, however, was unable to provide any details of his reported 
discussions with the TEB chairman or the cost/price analyst and was 
unable to describe Rockwell's proposed modifications and redesign or 
why these modifications and redesign work were only minor.  Tr. at 
102-104, 106-108.

On the other hand, contrary to the SSA's testimony, the TEB chairman 
testified that there was no consideration during the evaluation as to 
whether Rockwell's or Trimble's offered receivers were NDIs and that 
there was also no discussion with the SSA concerning the Rockwell's 
offered unit's NDI status.  Tr. at 74.  The cost/price analyst also 
testified that he was unaware of any discussion with the SSA 
concerning whether Rockwell's offered receiver was a NDI.  Tr. at 203, 
208.

There is no other evidence in the record suggesting that the agency 
meaningfully considered whether Rockwell's offered SOLGR was an NDI.  
None of the contemporaneous evaluation documentation mentions 
consideration of whether Rockwell had offered an NDI; in addition, 
there is no source selection documentation to establish that 
Rockwell's receiver was found to satisfy the RFP's NDI requirement.  
From this record, we conclude that, prior to Trimble's protest, there 
was no consideration by the agency as to whether Rockwell's offered 
SOLGR unit satisfied the RFP's NDI requirement.

The SSA's testimony that Rockwell's offered receiver satisfied the NDI 
requirement is also unpersuasive because it is based upon a comparison 
of Rockwell's offered receiver with Rockwell's PLGR, as opposed to its 
SOLGR prototype.  This argument, which the SSA provided in response to 
Trimble's protest arguments, appears based upon the assumption that an 
item may be termed an NDI simply if it is constructed of existing 
technology.[7]  This assumption is inconsistent with the NDI 
definition in FASA and the RFP, which require that the scope of 
modifications to already produced items of supply be considered to 
ascertain whether a particular product can be considered an NDI.  As 
is suggested by the fact that the SOLGR design was the result of 
development contracts that sought to redesign the standard PLGR, the 
record is replete with evidence that the PLGR is vastly different from 
the SOLGR to be purchased under the RFP.  The RFP's SOW described 
numerous features and capabilities--including, the ability to operate 
under water, reduced size and weight, and much larger number of 
programmable navigation points--required of the SOLGR, and not 
provided by the PLGR.  The TEB chairman testified that the PLGR was a 
much different device than that sought by the RFP and that "moving" 
from the PLGR to the SOLGR required design and development work.  Tr. 
at 24-28, 80.  Given this record and the agency's failure to provide 
any evidence demonstrating that the modifications and redesign that 
would be required for the PLGR to satisfy this RFP's specifications 
are minor, we cannot conclude that even if Rockwell's offered SOLGR is 
a modified version of its PLGR, that Rockwell's unit is an NDI.

In sum, we find, based upon this record, no support for the Army's 
determination that Rockwell's offered receiver satisfied the RFP's NDI 
requirement.  In fact, the only credible evidence in the record 
indicates that the modifications and redesign Rockwell proposed for 
its receiver to satisfy the RFP specification are significant and not 
minor.  Award may not properly be made to an offeror whose proposal 
fails to conform to an RFP's material requirements.  Mine Safety 
Appliances Co.; Interspiro, Inc., B-247919.5; B-247919.6, Sept. 3, 
1992, 92-2 CPD  para.  150.  Here, the requirement that offered receivers 
qualify as NDIs is a material requirement, which the agency does not 
contend no longer reflects its minimum needs; the SSA affirmed in his 
hearing testimony that, "as far as I know," the NDI requirement was 
still required.  Tr. at 137.  Accordingly, the Army could not properly 
accept Rockwell's offer, which indicated that it would not satisfy the 
RFP's NDI requirement, and we sustain Trimble's protest on this 
basis.[8]

We recommend that the Army either terminate Rockwell's contract for 
the convenience of the government and make award to Trimble, or 
conduct discussions with Rockwell to provide Rockwell with the 
opportunity to offer an NDI product or demonstrate that its offered 
receiver satisfies the RFP's NDI requirement.  If the agency chooses 
to open negotiations with Rockwell, discussions should also be 
conducted with Trimble, best and final offers received, and a new 
source selection decision made; if Trimble is selected for award as a 
result of this new source selection decision, then Rockwell's contract 
should be terminated and award made to Trimble.  We also recommend 
that Trimble be reimbursed its costs of filing and pursuing the 
protests.  4 C.F.R.  sec.  21.8(d)(1) (1996).  Trimble should file its 
claim for costs with the agency within 90 calendar days of the date of 
this decision.  4 C.F.R.  sec.  21.8(f)(1).

Comptroller General
of the United States

1. Precise positioning service refers to the higher level of precision 
which military GPS receivers are capable of providing relative to 
commercial GPS receivers, which are designed for "standard positioning 
service."

2. Trimble protests that this provision prohibited below-cost bids by 
requiring offerors to demonstrate the feasibility of performing the 
contract within the cost proposed.  We disagree and find, as argued by 
the agency, that this provision merely informed offerors that the 
agency would evaluate offeror's capability and capacity to perform the 
contract within the fixed prices proposed.  The agency states that it 
was confident from its evaluation of Rockwell's proposal that the 
awardee could successfully perform the contract at its offered price; 
the record does not contradict the agency's determination in this 
regard.

3. Although the agency describes these communications as 
clarifications, from our review of the record, these communications 
appear to be discussions, which should have triggered a request for 
best and final offers.  See The Hotel San Diego, B-260971, July 7, 
1995, 95-2 CPD  para.  4.

4. Testimony was elicited from the SSA, the cost/price analyst, and 
TEB chairman concerning the SSA's source selection determination, the 
determination that Rockwell's offered receiver was NDI, and whether 
discussions had been conducted only with Rockwell.

5. Trimble's total proposed price is actually [DELETED] percent higher 
than Rockwell's price.

6. Rockwell also suggests that the RFP did not require the offer of an 
NDI receiver to be compliant.  This argument is belied by the RFP's 
unambiguous SOW language, as acknowledged by the SSA in his hearing 
testimony, in which the SSA confirmed that an offeror had to offer an 
NDI receiver to be found compliant.  Tr. at 95.

7. Although the TEB chairman testified that the NDI status of 
Rockwell's offered SOLGR was not considered in the TEB's evaluation of 
proposals, the TEB chairman offered his opinion during the hearing 
that Rockwell's offered receiver was an NDI.  Tr. at 76, 78.  This 
opinion, however, was based upon the TEB chairman's own definition of 
what constitutes an NDI; he considered as an NDI "an item that can be 
designed, produced using existing technologies that are--all the 
pieces are basically there, you're moving from an item that exists 
today to something you're going to have in the near future."  Id.  The 
TEB chairman's definition of what qualifies as an NDI is inconsistent 
with the NDI definition specified by FASA and the RFP, inasmuch as the 
scope of modifications made to already produced items of supply must 
be considered to ascertain if a particular product is an NDI.  In any 
event, as noted above, the TEB chairman's opinion and definition of 
what constitutes an NDI was not provided to the SSA prior to award.

8. Trimble also challenged a number of other aspects of the 
procurement, including the agency's evaluation of Rockwell's proposal, 
source selection decision, and conduct of discussions only with 
Rockwell.  We need not address these other issues given our 
recommendation to either make award to Trimble or reopen the 
competition between the two firms.