BNUMBER:  B-274626; B-274626.2
DATE:  December 23, 1996
TITLE:  Intelligent Decisions, 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:Intelligent Decisions, Inc.

File:     B-274626; B-274626.2

Date:December 23, 1996

Daniel B. Abrahams, Esq., and Raymond Fioravanti, Esq., Epstein Becker 
& Green,  P.C. for the protester.
Stephen T. Yelverton, Esq., for Win Laboratories, Ltd., an intervenor.
James J. Roby, Esq., and John R. Caterini, Esq., Department of Justice 
and       Roger D. Waldron, Esq., General Services Administration, for 
the agency.
Paula A. Williams, Esq., and Michael R. Golden, Esq., Office of 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Under request for quotations which sought prices for computer 
systems and related software listed on Federal Supply Schedule, agency 
properly selected the vendor that offered the best system 
configuration that meets the agency's needs at the lowest overall 
cost.

2.  Where record shows that challenged agency discussions with vendor 
ultimately selected to provide the agency's computer needs were in the 
context of a Federal Supply Schedule buy, protest contending that such 
communications were improper is denied since the agency may properly 
obtain additional information in order to determine that it was 
selecting the vendor that meets the agency's needs at the lowest 
overall cost.

DECISION

Intelligent Decisions, Inc. (IDI) protests the actions of the 
Department of Justice (DOJ) in connection with request for quotations 
(RFQ) No. DOJ-SAS-Q-C089 for  personal computers, related software and 
hardware.  IDI contends that DOJ improperly awarded a contract to WIN 
Laboratories, Ltd. (WIN) under the simplified acquisition procedures 
in Part 13 of the FAR.  IDI also argues that DOJ improperly accepted a 
revised quotation from WIN after the time set for receipt of 
quotations, failed to evaluate quotations on an equal basis because 
WIN was allowed to substitute a non-compliant motherboard, and held 
improper discussions with WIN to the detriment of other vendors.

We deny the protests.

In June 1996, DOJ identified a need for an estimated 2,000 to 4,000 
personal computers to be used in its consolidated office network 
system, and the contracting officer concluded that she could fulfill 
the agency's computer needs through a Federal Supply Schedule (FSS) 
buy.  As a result, the contracting officer and other DOJ officials met 
with officials from the General Services Administration's (GSA) FSS 
office to seek guidance on making large purchases under the FSS.  At 
that June 18 meeting, GSA officials indicated that since a large buy 
was anticipated, DOJ could request price reductions from the vendors' 
schedule prices and enter into a blanket purchase agreement (BPA) with 
the FSS contractor that was selected to fulfill its needs.[1]  
Thereafter, DOJ's technical representative contacted 10 vendors 
(including WIN and IDI) holding Federal Supply Classification (FSC) 
group 70 schedule contracts encompassing various microcomputers and 
associated software.  The technical representative states that he 
discussed the agency's need for an estimated quantity of 2,000 to 
4,000 systems in several telephone conversations and face-to-face 
meetings with the vendors and requested that each vendor submit 
descriptive literature and price lists for various configurations of 
computer systems available from their schedule.[2]

On August 8, the agency issued the RFQ to six vendors, including WIN 
and IDI.  The RFQ stated that only quotations under GSA schedule 
contracts would be considered for 2,000 computer systems containing 
either Intel Pentium 133 processors or Intel Pentium 166 processors.  
It provided for award on a best value basis, system costs and other 
factors considered, and listed the following minimum  specifications:

     (a)  Intel motherboard w/plug & play (PnP) BIOS, Energy*Star
     (b)  256k or larger pipeline burst cache
     (c)  32 meg 60 ns EDO memory
     (d)  EIDE hard disk controller, Mode 4 capable
     (e)  1.2 gigabyte or larger hard drive, EIDE Mode 4
     (f)   3.5" floppy
     (g)  2 megabyte video, PnP
     (h)  17" monitor, at least 1280 x 1024, Energy*Star, Low 
     Radiation         MPR-II, 0.28mm dot pitch/stripe or smaller
     (i)   Internal CD-ROM w/6X (900bps) or faster transfer rate, and 
     145ms  or faster access time
     (j)   Sound card (Sound Blaster 16 compatible)
     (k)  Dual speakers
     (l)   Microsoft mouse
     (m) Windows 95 (104-key keyboard)
     (n)  3COM 3C905-TX network interface card
     (o)  Windows 95 w/CD-ROM and manual.[3]

The agency received six quotes by the August 12 receipt date.  WIN's 
initial quotation (dated August 11 but received on August 12) for the 
Pentium 133 processor was $1,679 each and $1,868 each for the Pentium 
166.  Upon reviewing WIN's quotes, the technical representative 
discovered that the quotations did not include pricing for the Windows 
3.1 software license.  Because the agency had identified this as a 
requirement during the technical representative's communications with 
vendors prior to issuance of the RFQ, he contacted WIN and allowed the 
vendor to revise its quotations to include this requirement.  That 
same day, WIN submitted revised quotations of $1,832 each for the 
Pentium 133 and $1,993 each for the Pentium 166.  In its quotations, 
WIN offered to provide, after delivery of an initial 700 systems, 
Pentium processors with a 2.0 gigabyte hard drive (an upgrade from the 
requirement for 1.2 GB) and a video display of 2.5 megabyte VideoRAM 
with a 128-bit PCI adapter (an upgrade from the 2.0 MB VideoRAM,     
64-bit PCI adapter).  IDI's response to the RFQ contained quotes for 
different configurations for the Pentium 133 and Pentium 166 
processors and included open market prices for certain items (which 
the agency did not evaluate because the RFQ called for FSS pricing 
only).  For the Pentium 133 system, IDI's quote was $2,000 each; for 
two different configurations of Pentium 166 systems, IDI quoted $2,195 
and $2,334, respectively.

In reviewing the quotes received, DOJ compared the relatively small 
price differential between the Pentium 133 and Pentium 166 and the 
difference in performance of each system and decided to eliminate the 
Pentium 133 system from further consideration.  Of the quotes received 
for the Pentium 166, WIN's was the lowest priced at $1,993, with 
certain upgrades after delivery of the first 700 systems.  The next 
lowest quotes were from International Data Products at $2,047 each 
(offering a newer model Intel motherboard than either WIN or IDI 
quoted), followed by NYMA, Inc. at $2,102 each, and IDI at $2,195 and 
$2,334, respectively.[4]  In its best value analysis, DOJ weighed 
WIN's offered upgrades for the Pentium 166 against the systems offered 
by the other five vendors and determined that WIN's system was 
equivalent to, or better than, the systems offered by the others and 
was the lowest priced.  The contracting officer therefore concluded 
that WIN's quotation offered the best value to the government and 
selected WIN to fulfill its computer needs.[5]  On September 5, DOJ 
issued a "Confirming Order," No. 6FCJMD-0792, for an estimated 
quantity of 3,000 Pentium 166 systems to WIN under its GSA schedule 
contract for $5,979,000.  These protests followed.[6]  

THE PROCUREMENT

DOJ maintains that it conducted an FSS buy, ultimately entering into a 
BPA with WIN pursuant to which it could place orders from time to 
time.  IDI, on the other hand, argues that this acquisition was not an 
FSS acquisition, but was either a simplified acquisition under Part 13 
of the FAR or a competitive negotiated procurement under Part 15.  The 
protester alleges that regardless of which of these two FAR parts is 
applicable, the procurement was defective because DOJ treated vendors 
unequally and unfairly in that the agency held discussions only with 
WIN and improperly waived the requirement for an Intel-manufactured 
motherboard by allegedly accepting a WIN-modified motherboard.    

We conclude that this procurement was an FSS buy.  Non-mandatory, 
multiple award FSS contracts are indefinite delivery contracts for 
commercial firms to provide government agencies with a variety of 
commonly used supplies and services at stated prices for given periods 
of time.  Government ordering activities can order supplies or 
services under simplified procedures from the FSS contractors to meet 
their requirements.[7]  FAR  sec.  8.401(a).  Here, the record indicates 
that DOJ determined that its requirements could be satisfied through 
the use of the FSS,[8] then reviewed price lists and descriptive 
literature of competing systems, obtained quotes from FSS vendors, 
compared the features of WIN's offered Pentium 166 processor with 
those of other FSS vendors, and selected WIN after determining that 
its Pentium 166 processor represents the best value and meets the 
agency's needs at the lowest overall cost.    

Notwithstanding these facts, the protester contends, on the basis of 
language included in the September 5 document--the indefinite quantity 
contract language and other standard contract clauses--that DOJ 
changed the nature of the procurement from that of an FSS buy to the 
award of an indefinite quantity contract under either simplified 
acquisition procedures or full and open competitive procedures.  
However, it is clear from the record that the agency intended to 
satisfy its needs through FSS purchases and that what DOJ did here was 
consistent with the regulations governing FSS transactions.  While the 
September 5 document is not a fixed quantity order that is typically 
placed against an FSS contract and contains certain language typically 
found in an indefinite quantity contract, it also does not obligate 
the government to order any minimum quantity, a requirement of 
indefinite quantity contract.  See FAR  sec.  16.504(a)(1).  Thus, under 
circumstances here, we think that DOJ, through this September 5 
document, in effect entered into a BPA.  A BPA, of course, is a 
mechanism for placing charge account orders for an agency's repetitive 
needs.  FAR  sec.  13.201.  The FSS program envisions agencies entering 
into BPAs with FSS contractors.  FAR  sec.  13.202(c)(3).  

IDI argues that DOJ has no authority to enter into a BPA within the 
context of an FSS buy.  IDI points out that the authority to enter 
into a BPA under FSS procedures, once authorized by FAR  sec.  8.406, was 
removed by Federal Acquisition Circular (FAC) No. 90-21 (October 25, 
1994).  GSA, commenting on this matter at our request, acknowledges 
that FAC No. 90-21 deleted FAR  sec.  8.406 from the FAR; however, it takes 
the position that ordering agencies may enter into BPAs with FSS 
contractors pursuant to FAR  sec.  13.202(c)(3) and clause H.5 of their FSS 
contracts.  FAR  sec.  13.202(c)(3) provides that "BPAs may be established 
with Federal Supply Schedule contractors, if not inconsistent with the 
terms of the applicable schedule contract" and, as previously 
indicated, section H.5 of WIN's and IDI's schedule contracts expressly 
authorizes the contractor to enter into a BPA with an ordering 
agency.[9]  Purchases under BPAs with FSS contractors are not limited 
to $100,000.  FAR  sec.  13.204(b).  These provisions clearly support GSA's 
position.  Under the circumstances, we conclude that DOJ's actions 
were fundamentally consistent with an FSS buy. 

DISCUSSIONS

Since we have concluded that this acquisition was an FSS buy, IDI's 
allegations that the agency held improper discussions with WIN and 
impermissibly allowed WIN to "revise its price and technical solution" 
are without merit.

Quotations in response to an RFQ that reflect FSS contract prices are 
not offers that can be accepted by the government.  Rather, they are 
informational responses that indicate the products on the FSS that 
vendors would propose to meet the agency's requirements and the prices 
of those products and related services that the government may use as 
the basis for issuing a delivery order to an FSS contractor.  Crown 
Furniture Mfg. Inc., B-225575, May 1, 1987, 87-1 CPD  para.  456.  Thus, 
vendors responding to an agency's request for quotations for products 
on an FSS do not submit offers that define exactly what the vendor 
would supply at what price; that already is defined by their FSS 
contracts.  Since such requests are merely intended to identify 
suitable products available on the FSS, the agency can seek additional 
information from vendors after the submission of quotations.  Monroe 
Sys. for Business, Inc., B-271136, May 17, 1996, 96-1 CPD  para.  242; Hugo 
Heyn Co., B-255329, Feb. 15, 1994, 94-1 CPD  para.  113.  Therefore, to the 
extent the agency needed clarification of whether WIN's quotation 
included, for example, the cost to provide the Windows 3.1 license, 
the agency properly could contact WIN and obtain the information it 
required.  We think DOJ's requests for additional information were 
proper in the context of an FSS buy and we have no basis to object to 
the agency's actions.

EVALUATION
 
IDI also argues that WIN's Pentium 166 processor does not comply with 
the stated RFQ specifications because WIN does not list an Intel 
motherboard on its GSA  schedule; therefore, it asserts, WIN unfairly 
was allowed to offer a non-conforming  motherboard in contravention of 
the RFQ requirements.  

The record, including the hearing testimony of WIN's representatives, 
establishes that the Intel Endevor II system motherboard described in 
WIN's response to the RFQ, is the same motherboard listed on WIN's GSA 
schedule as part number
DTS-01-002.  The descriptive literature furnished by WIN prior to the 
issuance of the RFQ, which DOJ's technical representative reviewed, 
shows that the motherboard  WIN would provide was an Intel 
motherboard.  Nothing in the record indicates that WIN's nomenclature 
denotes that the Intel-manufactured motherboard was modified.  As to 
the nomenclature used by WIN, the hearing testimony of WIN's 
representatives indicate that WIN routinely assigns its own internal 
identification numbers to parts made by other manufacturers, a common 
practice in the computer industry.  Thus, contrary to the protester's 
allegation, the record shows that WIN quoted an Intel-manufactured 
motherboard,[10] and we find that the agency reasonably determined 
that WIN's Pentium 166 processor meets the stated specification 
requirements.  

The protests are denied.

Comptroller General
of the United States

1. WIN's GSA schedule contract No. GS-35F-4312D and IDI's GSA schedule 
contract No. GS-35F-4153D authorize each contractor to enter into BPAs 
with procuring agencies.  The BPA provision in clause H.5 of their FSS 
contracts states as follows: 

            "The contractor agrees to enter into blanket purchase 
            agreements in accordance with FAR 13.2 with ordering 
            activities, provided that:

            a. Only items covered by the contract are ordered under 
            such agreements;

            b. The period of time covered by such agreements shall not 
            exceed the period of the contracts; and

            c. Orders placed under such agreements shall be issued in 
            accordance with all applicable regulations and the terms 
            and conditions of the contract.  (NOTE: THE MAXIMUM ORDER 
            OF THE CONTRACT APPLIES SOLELY TO INDIVIDUAL ORDERS PLACED 
            AGAINST THE BLANKET PURCHASE AGREEMENTS AND HAS NO BEARING 
            ON THE CUMULATIVE OR TOTAL VALUE OF THESE ORDERS)."  
            [Emphasis in original.]

2. The record indicates that IDI was aware of DOJ's estimated needs, 
as evidenced by its June 26 submission to the agency in which the 
protester provided pricing for various system configurations "based 
upon the purchase of 2,000-4,000 units."

3. A hearing was conducted for the purpose of receiving testimony from 
DOJ's technical representative and two WIN representatives.  See Bid 
Protest Regulations,    sec.  21.7, 61 Fed. Reg. 39039, 39042 (1996) (to be 
codified at 4 C.F.R.  sec.  21.7).  DOJ's technical representative 
testified that while the specifications should have listed Windows 3.1 
software and the Windows 3.1 license, they did not.  Video Recording 
(VR) at 10:18:27.  He further testified that in his communications 
with each vendor--prior to the issuance of the RFQ--he had identified 
the Windows 3.1 software and the Windows 3.1 license as requirements 
that should be provided from their schedules.  VR at 10:20:08.    

4. While six quotations were received and evaluated, we only discuss 
the quotations received from WIN and IDI.

5. The DOJ representative testified that the agency wanted all the 
systems to have the offered upgrades so he asked WIN for a price quote 
if all the systems (not just those delivered after the first 700) 
contained these upgrades.  WIN subsequently offered an upgraded 1.6 
gigabyte hard drive (not a 2.0 gigabyte) for the same price of $1,993 
each.       

6. Performance of WIN's contract has not been suspended based on the 
agency's determination that continued contract performance is in the 
best interest of the government.  

7. The terms "Federal Supply Schedules" and "Multiple Award Schedules" 
are used interchangeably throughout Subpart 8.4 of the FAR. 

8. Under the FAR, an agency is required to satisfy its requirements 
for supplies and  services from or through a list of sources set forth 
in descending order of priority at  FAR  sec.  8.001(a).  Purchasing from 
the FSS has a higher priority than purchasing through non-FSS 
commercial sources.  FAR  sec.  8.001(a)(1).

9. This BPA provision was added to WIN's and IDI's schedule contracts 
in October 1995 through bilateral modifications.

10. At the hearing, WIN representatives brought a demonstrator Intel 
motherboard and a demonstrator WIN motherboard for inspection by the 
parties.  It appears that Intel assigns its own serial numbers on 
motherboards it manufactures and the configuration of the 
Intel-manufactured motherboard appears unique to Intel.