BNUMBER: B-274654; B-274654.2; B-274654.3; B-274654.4; B-274654.5
DATE: December 26, 1996
TITLE: International Data Products, Corp.; I-NET, Inc.;
and Dunn Computer Corp.
**********************************************************************
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:International Data Products, Corp.; I-NET, Inc.;
and Dunn Computer Corp.
File: B-274654; B-274654.2; B-274654.3; B-274654.4; B-274654.5
Date:December 26, 1996
Carl J. Peckinpaugh, Esq., and Eric J. Marcotte, Esq., Winston &
Strawn, for International Data Products, Corp.; Richard J. Conway,
Esq., and Robert J. Moss, Esq., Dickstein, Shapiro, Morin & Oshinsky,
L.L.P., for I-Net, Inc.; and Edward J. Tolchin, Esq., Fettman, Tolchin
& Majors, P.C., for Dunn Computer Corp., the protesters.
Marcia G. Madsen, Esq., Scott E. Pickens, Esq., David F. Dowd, Esq.,
and Jessica C. Abrahams, Esq., Miller & Chevalier, for Hughes Data
Systems, the intervenor.
Lisa J. Obayashi, Esq., and Alden F. Abbott, Esq., Department of
Commerce, for the agency., for the agency.
Ralph O. White, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Protesters rated eighth and ninth in overall technical merit are
interested parties for the purpose of pursuing a protest where both
claim their proposals were improperly evaluated, both offered lower
prices than the awardee, and the solicitation called for award to the
offeror whose proposal was found most advantageous to the government.
Under these circumstances, if their protests were sustained, either
protester could be in line for award.
2. Contention that agency improperly evaluated proposals is denied
where the record shows that the evaluation was reasonable and in
accordance with the stated evaluation criteria.
3. Where solicitation requires offerors to provide technical
literature to demonstrate commerciality and compliance with
specifications, a proposal's affirmative response to a solicitation
requirement that is contradicted by the required technical data
generally cannot be reasonably accepted by agency evaluators.
4. Contention that agency improperly made award on the basis of
initial proposals is denied where the record shows that the
solicitation clearly indicated the agency's intent to make award
without discussions if possible, and that the evaluation reasonably
determined that discussions were not needed to determine the proposal
offering the best value to the government.
5. Claim that Federal Acquisition Regulation sec. 15.610(c) required the
agency to give the protester an opportunity to comment on adverse
reports of past performance is denied because the cited regulation has
no application where the agency does not otherwise hold discussions.
6. Argument that the agency selection official failed to make an
independent and properly documented selection decision is denied where
the record shows that the selection official reasonably relied upon
and adopted the findings set forth in a detailed best value analysis
prepared by the evaluation panel.
DECISION
International Data Products, Corp.; I-NET, Inc.; and Dunn Computer
Corp. protest the award of a contract to Hughes Data Systems pursuant
to request for proposals (RFP) No. 52-PAPT-5-00005, issued by the
Patent and Trademark Office, Department of Commerce, for computer
workstations. All three protesters challenge the agency's evaluation
of their proposed workstations, and all argue that the agency's
selection of Hughes' proposal over theirs was unreasonable.
The protests are denied.
BACKGROUND
The RFP here anticipated award of a fixed-price, indefinite-delivery,
indefinite-quantity contract for two levels of workstations (level 1
and level 2) comprised of commercially-available, off-the-shelf (and
in current production), desktop microcomputers and peripherals for the
Patent and Trademark Office (PTO). RFP sec. C.2. In addition, the
solicitation sought technical support services and a warranty. The
contract period was for a base year and two 1-year option periods, and
the agency reserved the right to make award based on initial
proposals.
Potential offerors were advised that the agency would evaluate
proposals using four evaluation factors--technical, past performance,
management and price--the first three of which would be scored using
adjectival and numerical ratings. The price factor was not to be
scored, but was to be evaluated by totaling the price for the base
year and both options. Section M of the RFP explained that the
technical factor was slightly more important than the past performance
factor, which in turn was slightly more important than the management
factor. In addition, section M explained that the technical, past
performance and management factors combined were slightly more
important than price. Section M further advised that award would be
made to the offeror whose proposal presented the best value to the
government.
The RFP identified several subfactors under each of the three scored
evaluation factors. These were:
Technical
-- Product quality and technical sufficiency
-- Lifecycle service quality
-- Commerciality
Past Performance
-- Degree and relevance of current and past experience and
performance
-- Customer satisfaction with performance
Management
-- Production and delivery capability
-- Order processing capability
-- Management approach
As with the evaluation factors, the RFP assigned relative weights to
the evaluation subfactors.[1]
By the January 18, 1996, closing date, the agency received 20
proposals. After eliminating three substantially noncompliant
proposals, the agency evaluated the remaining 17 proposals using four
separate teams, one for each of the four evaluation factors. The
teams evaluating the technical, past performance, and management
factors assigned ratings of outstanding (scores from 90-100),
excellent (scores from 80-89), good (scores from 70-79), marginally
acceptable (scores from 60-69), or unacceptable (scores from 0-59),
for each appropriate factor and subfactors.
After completion of the initial review, each team reported the results
of its evaluation to the source selection evaluation board (SSEB).
The following table shows the total score for all three scored factors
and the total price for each acceptable offeror.
Total Price
Offeror Score (in millions)
Hughes 89.48 $152.0
I-Net 84.57 [deleted]
Company A -- Alternate 78.85 $151.4
Company A -- Primary 77.99 $150.5
Company B 76.80 $161.2
Company C -- Primary 76.25 $146.7
Company C -- Alternate 75.89 $143.5
IDP 73.82 [deleted]
Dunn 71.41 [deleted]
Company D 71.28 $132.9
Company E 68.18 $155.3
Company F 67.37 $171.5
Company G 64.37 $159.9
Company H 60.90 $158.2
Company I 54.54 $154.4
Company J 52.72 $162.7
Company K 47.40 $142.3
To streamline its comparison of the relative merits of the 17
evaluated proposals, the SSEB elected to create six clusters of three
proposals each beginning with the lowest price offer to the highest
priced offer. The price range between proposals within each cluster
ranged from 0.8 percent to 5.6 percent. For each cluster, the agency
compared the favorable, unfavorable and neutral impacts of the
strengths and weaknesses of the proposals in that cluster. The agency
then selected the offer within each cluster that represented the best
value to the government. Upon completion of this analysis, the agency
compared the following six offers:
Price Score
Offeror (in millions) Ranking
IDP [deleted] 5
Company C -- Primary $146.7 4
Hughes $152.0 1
Company E $155.3 6
Company B $161.2 3
I-Net [deleted] 2
After again comparing the relative strengths and weaknesses of the
offers emerging from each cluster, the SSEB decided that the agency
could award without discussions, and advised the source selection
official (SSO) that the proposal submitted by Hughes Data
Systems--which received the highest merit rating with a price in the
middle of the price range--represented the best value to the
government. On August 23, the SSO awarded the contract to Hughes and
these protests followed.
INTERESTED PARTY STATUS OF IDP AND DUNN
During the course of these proceedings, Hughes and the agency
repeatedly sought dismissal of the protests filed by IDP and Dunn on
the grounds that neither is an interested party for purposes of filing
a bid protest under our regulations. See Bid Protest Regulations,
section 21.0(a), 61 Fed. Reg. 39,039, 39,042 (1996) (to be codified at
4 C.F.R. sec. 21.0(a)). According to the requests for dismissal, since
IDP and Dunn are ranked eighth and ninth, respectively, in total
merit, they are presumably not in line for award if their protests are
sustained and therefore lack the direct economic interest necessary to
contest the procurement.
The requests here overlook the substance of the issues raised by both
of these protesters. Both claim that their proposals were improperly
evaluated, and that if they were evaluated correctly, their proposals
would have been found to be the most advantageous to the government.
Since neither the agency nor Hughes can state with certainty that,
upon reevaluation, the relative standing of these proposals would not
change, and since both proposals included prices significantly lower
than the price offered by Hughes, IDP and Dunn clearly are interested
parties under our Bid Protest Regulations. Id.; Bendix Field Eng'g
Corp., B-246236, Feb. 25, 1992, 92-1 CPD para. 227 at 5; Textron Marine
Sys., B-243693, Aug. 19, 1991, 91-2 CPD para. 162 at 4.
IDP'S PROTEST
The agency's review of IDP's proposal led it to conclude that IDP's
equipment was noncompliant with several material requirements in the
specification. As a result, IDP received a relatively low technical
score of 71.20, which contributed significantly to its overall ranking
as 8th of 17 in the area of total merit. Nonetheless, when IDP was
compared with other similarly-priced offerors in its cluster, its
offer emerged as the best value of those three offers. In comparison
with the other cluster finalists, IDP offered the lowest price, but
ranked 5th of 6 in total merit. Ultimately, the agency concluded that
the relative strengths of the Hughes proposal--indicated by its
significantly higher total merit rating of 89.48 versus IDP's
73.82--justified its higher price--i.e., $152.0 million versus IDP's
[deleted] million.
IDP argues that the agency's evaluation of its technical proposal was
unreasonable, and that the resulting score used to compare IDP's
proposal with those of Hughes and other offerors did not accurately
reflect the merits of its approach. Specifically, IDP challenges the
agency's finding that its proposal was inconsistent in at least 10
separate areas, leading the agency to conclude that it could not be
sure that the equipment offered complied with the solicitation's
requirements.[2] In addition, IDP challenges the agency's assessment
of its benchmark test data, and argues that PTO should have held
discussions rather than making award on initial proposals because many
of the agency's concerns could have been easily answered.
In considering a protest against an agency's evaluation of proposals,
we will examine the record to determine whether the agency's judgment
was reasonable and consistent with stated evaluation criteria and
applicable states and regulations. ESCO, Inc., 66 Comp. Gen. 404
(1987), 87-1 CPD para. 450. Here, we have compared the narrative portion
of IDP's proposal with the technical literature and the completed
contract line item (CLIN) matrices provided therein, the evaluation
materials, IDP's pleadings, and PTO's responses. As a result of our
review, we find no basis for concluding that the evaluation was
unreasonable or not in accordance with the stated evaluation criteria.
To illustrate our conclusion, we will discuss in detail three of the
areas where IDP's proposal was downgraded by the PTO.
As a first example, IDP argues that the agency unreasonably concluded
that one of its proposed bar code scanners did not meet a required
specification. The RFP here contained two separate CLINs for bar code
scanners--a laser scanner (CLIN 018), and a network scanner (CLIN
019). The RFP required both scanners to include an audible indicator
to permit a user to differentiate between an acceptable read, an
unacceptable read, and a transmission. RFP sec. C.2.6.5, C.2.6.6.
The dispute here--and in many of IDP's contentions--involves an
inconsistency between portions of IDP's proposal. Section L.25 of the
RFP set forth discrete requirements for the technical proposals to be
submitted in response to this solicitation. Specifically, section
L.25.2.2 required offerors to "concisely describe the physical and
environmental characteristics of offered products . . . ." Within the
same section, offerors were also required to provide additional
documentation for certain of the products here. This documentation
was especially important given the RFP's requirement that the offered
equipment be off-the-shelf commercially available products. The
provision explained this requirement as follows:
"For the Level 1 and Level 2 workstations (CLINS 001AA and
001AB), the 17" monitor (CLIN 002AA), and the network laser
printer (CLIN 016AA), Offeror shall provide one of the following:
an annotated photograph, appropriate available marketing
material, or an annotated engineering drawing.
Photos/drawings/other material shall show the interior and
exterior of the workstations and printer, and the exterior of the
monitor. Annotation shall include, at a minimum, showing
dimensions and labeling of major components and controls."
Id. Finally, the RFP also required proposals to include completed
matrices showing detailed specification compliance information and
reliability statistics. Id.; RFP sec. L.24.3. PTO's evaluators paid
close attention to the symmetry between an offeror's narrative claims
of compliance; the details of the required photographs, drawings, or
other material which helped establish the commerciality of the offered
products; and the detailed CLIN matrix, which provided a complete
checklist of specification compliance.
In the narrative portion of its proposal, IDP includes the following
statement about its laser scanner (CLIN 018): "[s]upports visible and
audible indicators for system status and error conditions." IDP
Technical Proposal at I-2-22. The technical literature following this
section is silent on the subject of audible indicators. Id. at first
unnumbered page after I-2-22. In its completed CLIN matrix, IDP
inserted the term "visible" in response to the matrix request to
indicate the type (visible, audible, visible/audible, other) of
indicator proposed for the laser scanner (CLIN 018). Id. at
I-CLIN1-13. In contrast, IDP inserted the terms "visible (LED) &
audible" in response for the network scanner (CLIN 019). Id. The
agency downgraded IDP in this area, because it could not conclude for
certain that IDP was proposing a compliant laser scanner for CLIN 018.
In its comments, IDP responds to this criticism as follows:
"In this instance, the [g]overnment is correct that IDP's
description of the CLIN-018 scanner in the CLIN Matrix does not
indicate it had audible indicator capability. However, IDP does
state that the scanner '[s]upports visible and audible indicators
for system status and error correction.' [Citation omitted.]
IDP's affirmative response to this requirement should be
accepted."
IDP Comments, Nov. 1, 1996, at 8-9.
In our view, the protester's argument on this issue is unpersuasive.
A proposal's affirmative response to a requirement that is
contradicted by required technical data generally cannot be reasonably
accepted by agency evaluators. Koehring Cranes & Excavators; Komatsu
Dresser Co., B-245731.2; B-245731.3, Nov. 23, 1992, 92-2 CPD para. 362 at
7. Accord University Systems, Inc., General Services Board of
Contract Appeals Nos. 10818-P; 10924-P, Dec. 20, 1990, 91-1 BCA para.
23,617, 1990 BPD para. 434 at 6-7. The record here shows that when
answering the CLIN matrix for the network scanner, IDP indicated that
its scanner included indicators both "visible (LED) & audible." This
specificity on the network scanner reasonably caused the agency
evaluators to be concerned when the response on the laser scanner
portion of the matrix--located in close proximity to the complete
response quoted above--stated only "visible." In addition, IDP's bald
statement that the agency was wrong not to accept its affirmative but
general response in the narrative--i.e., that the scanner "supports"
both audible and visible indicators--without rationale or
justification, offers no basis to conclude otherwise.
A second example is IDP's offered mouse. The brief narrative
description of IDP's proposed workstation makes no mention of the
mouse, but states that the offered equipment meets the government's
requirements. Id. at I-2-1. The narrative's reference to the
technical literature immediately following this portion of the
narrative states, "[t]he attached brochure further illustrates the
characteristics of the Level 1/Level 2 Workstation being proposed to
the [g]overnment by IDP. . . ." Id. The attached brochure states,
"[t]he Ergonomic Microsoft compatible two button mouse is provided
standard." Id. at first unnumbered page immediately following I-2-1.
The reference to a two-button mouse in the technical brochure
conflicts with the solicitation's requirement for a three-button
mouse, RFP sec. C.2.1.7, and is contradicted by the completed CLIN
matrix, which indicates that IDP is offering a three-button mouse.
Id. at I-CLIN1-2. Faced with a conflict between the required
technical literature and the required CLIN matrix, the agency
evaluators concluded that it was unclear if IDP was offering to comply
with the solicitation. Again, IDP was downgraded in this area, and
again, for the reasons stated above we conclude that the agency's
evaluation was reasonable given the conflicting information in the
proposal. Koehring Cranes & Excavators; Komatsu Dresser Co., supra.
A third example is the operating speed for IDP's proposed hard drive.
For this item, the RFP required an internal hard drive with a 10 MB or
faster data transfer rate. RFP sec. C.2.3.1. IDP's narrative expressly
addressed this requirement stating, "[d]ata transfer rate of 5.26
MB/s." IDP Technical Proposal at I-2-7. The technical data following
this section stated:
Data Transfer Rate:
-- Buffer to Host 5.26 MB/s (sustained)
11.1 MB/s (burst PIO, Mode 3)
13.3 MB/s (burst DMA, Mode 1)
Id. at first unnumbered page immediately following I-2-7. Finally,
IDP's completed CLIN stated that the offered rate was 5.26 MB/s. Id.
at I-CLIN1-9. Based on the statements in the narrative and the CLIN
matrix, the PTO evaluators concluded that IDP was offering a hard
drive with an operating speed of 5.26 MB/s and that the speed was not
in compliance with the RFP's requirements.
IDP argues that the agency evaluation was unreasonable because the
technical literature provided with the proposal, quoted above, showed
that under certain burst scenarios, IDP's offered hard drive could
transfer data at speeds higher than 10 MB. The agency responds that
it was seeking a sustained speed and that IDP's answers in the CLIN
matrix and in its narrative providing the sustained speed of the hard
drive show that IDP understood the agency's requirement but did not
meet it. Based on our review of these materials, we agree. IDP's
responses in its narrative and CLIN matrix are straightforward and
unambiguous, and we see nothing unreasonable in the agency's
conclusion that IDP was offering a data transfer rate of 5.26 MB/s.
In addition to the specifics of the discussion above, our review shows
that there is no consistency in IDP's argument about which source of
compliance information in its proposal--i.e., the narrative, the
required technical literature, or the completed CLIN matrix--controls
in any given situation. To illustrate this issue more clearly, the
matrix below shows where, according to IDP, the agency should have
focused its review in order to determine IDP's compliance with the
solicitation in each instance. As the table shows, IDP seeks to
designate as controlling whichever portion of the proposal comes
closest to demonstrating its compliance.
ITEM NARRATIVE TECH. LIT. CLIN MATRIX
Bar Code Scanner compliant silent not compliant
3 Button Mouse silent not compliant compliant
Hard Drive Speed not compliant compliant not compliant
Under these circumstances, we cannot conclude that IDP has shown that
the agency's concern about the compliance of the proposed equipment
was unreasonable.
IDP also argues that the agency unreasonably rejected its benchmark
test data and erred in not asking IDP to clarify its proposal or
alternatively, in not holding discussions.
The RFP, at section L.25.3, required offerors to perform and provide
the results of benchmark tests on their proposed hardware. The
provision required that the tests be performed using the same make and
model of equipment as offered, configured as required by PTO. Upon
reviewing the results of IDP's benchmark tests, the agency concluded
that the benchmark tests were invalid because IDP failed in several
instances to perform the testing as required. Specifically, PTO noted
that IDP ran its benchmark tests without installing the required
CD-ROM, and using a video card that was not in compliance with the
required settings for resolution, color and refresh rates. IDP does
not contradict the agency's specific findings, but argues that any
discrepancies were minor, should not invalidate the testing, and
should not be used as a pass-fail requirement.
Our review shows that the requirement for benchmark testing in the RFP
was clear, and was closely evaluated by the agency panel. In IDP's
case, evaluators expressed concern that there was a risk that IDP's
equipment might not work as the benchmark tests indicated because the
tests were not properly performed. Other than its claim that any
discrepancies were minor, IDP does not address the agency's concerns
in this area, or otherwise show that they were unreasonable. In
addition, although certain summaries in the evaluation material
describe the benchmark tests as invalid, there is no evidence that
this was a pass-fail item as IDP argues. Despite its failure to
perform the benchmark tests properly--which IDP concedes--its proposal
was nonetheless evaluated as offering the best value in its cluster,
and IDP remained in the running for award. Given the record here, we
think the agency reasonably identified a risk in IDP's proposal based
on its failure to perform these tests properly.
With respect to IDP's contention that the agency should have asked IDP
to clarify its proposal, or held discussions with IDP, the RFP clearly
indicated that, if possible, the agency would make award based on
initial proposals. In this regard, amendment A005 added the clause
found at Federal Acquisition Regulation (FAR) sec. 52.215-16, Alt. II, to
advise potential offerors that their initial proposals should contain
their best cost/price and technical terms. In such cases, the burden
is on the offeror to submit an initial proposal that adequately
demonstrates its merits. Norden Sys., Inc., B-255343.3, Apr. 14,
1994, 94-1 CPD para. 257 at 7-8. The record shows that IDP's proposal
contained numerous inconsistencies leaving the evaluators unsure about
whether the proposed equipment would meet the agency's needs. In
addition, even within the few examples set forth herein, it appears
that IDP did not meet the requirements for the internal hard drive
speed, and may not have offered the required audible indicators for
its laser scanner. Given that the agency received several other
proposals that demonstrated significantly greater merit, and given
that the agency was able to accept one of those offers without
discussion, we have no basis to disagree with the PTO's actions.[3]
Id.
DUNN'S PROTEST
The agency's evaluation of Dunn's proposal identified 16 technical
weaknesses and 7 risks, resulting in an overall merit rating of 71.41,
and a merit ranking of 9th of 17. Dunn's price was [deleted] million,
the third lowest. When the agency performed its best value analysis,
described above, Dunn's proposal was compared to the proposal
submitted by IDP (the lowest-priced offeror) and another offeror
(whose proposal presented the second lowest price). For the record,
we note that IDP's lower-priced proposal also received a higher score
than Dunn's proposal. After a comparison of the three proposals in
this cluster, Dunn's proposal did not emerge as the one offering the
best value, and Dunn ultimately was not selected for award.
Dunn argues that the agency's evaluation of its technical proposal was
unreasonable and failed to follow the stated evaluation scheme. In
addition, Dunn argues that the agency unreasonably failed to hold
discussions about the perceived technical deficiencies in its
proposal, and about adverse reports of Dunn's past performance. Dunn
also contends that the agency's documentation of its cost/technical
tradeoff was deficient, and failed to include an assessment by the
SSO.
Technical Evaluation Issues
In its challenge to the agency's technical evaluation, Dunn argues
that PTO improperly downgraded its proposal for failing to provide
sufficient narrative information; considered the wrong documentation
in its review; and reached unreasonable conclusions about several
facets of the proposal. These include: the validity of its benchmark
testing; inconsistencies in the proposal; the evaluation of its
network interface card; whether its mouse and communications ports
were integral to its motherboard; and the evaluation of its data bus
speed and its proposed SIMMS (single in-line memory module) chips.
After reviewing the record here, we find no basis for concluding that
the agency's technical evaluation was unreasonable in any area but
one--i.e., PTO's identification of the claimed Federal Communications
Commission (FCC) certification of Dunn's network interface card as a
weakness. While we agree with Dunn in this one area, we do not agree
that this issue adversely affected its standing in this procurement in
any material way. To illustrate, we will set forth in detail three of
Dunn's challenges, including the challenge to the evaluation of its
network interface card.
As a first example, Dunn's initial and supplemental protests take
issue with PTO's evaluation of documentation included in the proposal.
First, Dunn complains that the agency looked, almost by rote, in each
of three areas of the proposal to assure that the solicitation's
requirements were repeated in each place. Dunn complains that this
type of evaluation is unreasonable, and does not ultimately assess the
relative merits of each proposal. In our view, Dunn's complaint
oversimplifies the agency's approach, misses the point of the discrete
categories of information requested by the RFP, and mischaracterizes
the agency's review of proposals.
As explained in response to the IDP protest, section L.25 of the RFP
set forth several discrete requirements for the technical proposals
here--a narrative discussion of the characteristics of offered
products, additional technical documentation (photographs, brochures,
engineering drawings), and completed matrices showing detailed
specification compliance information and reliability statistics. Id.;
RFP sec. L.24.3. As also explained in response to IDP's protest, PTO's
evaluators reviewed the symmetry between the different portions of the
proposal.
Despite Dunn's complaint that the agency unreasonably sought
repetition of specification compliance in triplicate for each proposal
and downgraded those which failed to provide it, the record shows that
this is not how the materials were used. While PTO correctly
identified any inconsistency among narrative claims, supporting
documentation, and the CLIN matrix--for example, spotting
inconsistencies between the claimed configuration of Dunn's drive bays
and the resolution and refresh rates claimed for its 17 inch
monitor--there was no requirement that each of these discrete proposal
sections address every element of the specification. Thus, Dunn's
complaint about the agency's approach to reviewing proposals is not
supported by the record.
Dunn's supplemental protest also claims that the agency's evaluation
of "documentation" violates section C.4.5 of the RFP, wherein PTO
describes documentation to be provided with the equipment. The
provision begins, "[a]t workstation delivery, the Contractor shall
furnish, at no additional cost, one copy per workstation of the most
current version of user manuals . . . ." Pointing to this section,
Dunn argues that "[i]t is obvious from the [a]gency's [r]eport that
PTO analyzed the wrong 'documentation' in its evaluation." Dunn
Supplemental Protest, October 31, 1996, at 5.
Dunn's apparent assertion--that the agency erred because it considered
documentation furnished with the proposal rather than the user manuals
to be furnished at delivery--provides no basis for concluding that the
agency evaluation was improper. Dunn makes no attempt to explain how
user manuals to be provided at the time workstations are delivered
could be reviewed by evaluators and used to discriminate among
offerors, and we will not consider this assertion further.
A second example of Dunn's challenge to the agency's evaluation of its
technical proposal is its complaint that PTO unreasonably assessed a
weakness against Dunn for its benchmark testing on its 17" monitor.
In this regard, section L.25.3 of the RFP required offerors to submit
the results of benchmark tests on their equipment using the same make
and model offered, and configured as specified by the RFP. As
initially issued, the RFP sought a minimum non-interlaced resolution
of 1280 x 1024 pixels for the monitor, and a refresh rate of 72 Hz.
RFP sec. C.2.2.1. The requirement for the refresh rate was later revised
upwards--to 75 Hz. RFP, Amend. A005, page 46 of 54. In addition,
amendment A005 included a question from an offeror about the
appropriate setting for this element of the benchmark test, as
follows:
"Question/Comment 211: What screen resolution should be used for
the benchmark tests for the Level 1 Workstation and the Level 2
Workstation?
"Response: The PTO intends that offerors use the section C.2.2
specified minimum screen resolution and color support for the
benchmarks. The PTO will use that specified resolution in its
benchmark validations."
Id. at page 43 of 54.
Despite these directions, Dunn's benchmark data showed that its
testing was performed using a resolution setting of 1024 x 768.
Dunn's narrative description of its 17" monitor states "[t]he
non-interlaced maximum resolution is 1024 x 768 at 72 Hz." (For the
record, Dunn's protest states that the resolution was set at 800 x
600, and Dunn's CLIN matrix states the correct resolution--1280 x
1024-- with a compliant refresh rate of 85 Hz.) Faced with this
information--with the exception of the protest claim, of course--PTO's
evaluators concluded that Dunn's benchmark testing had not been
performed in compliance with the testing requirements and could not be
used to establish the conformity of the equipment.
In its initial protest filing, Dunn argues that the statement in its
narrative that the maximum resolution of its 17" monitor is "1024 x
768 at 72 Hz." is a typographical error.[4] Dunn Initial Protest,
Sept. 20, 1996, at 6. In its comments, Dunn concedes that
"[a]pparently, Dunn did not notice one of hundreds of questions and
answers in which PTO announced an 'intent,' but not a requirement,
with respect to a display setting." Dunn Comments on the Agency
Report, Oct. 31, 1996, at 2.
In our view, these arguments do not amount to a showing that the
agency evaluation was unreasonable. The RFP stated the requirement in
uncertain terms, and the offeror's question included in amendment A005
further amplified PTO's view of how the tests should be performed.
Given Dunn's divergent responses outlined above, we do not see how the
agency could have concluded that Dunn's equipment could comply with
the resolution/refresh requirement, or could have been tested as
compliant. Finally, while we share Dunn's view of the difficulty of
poring through the "hundreds of questions and answers" set forth in
amendment
A005, ultimately Dunn is responsible for errors of typography and
oversight, not the agency. See Infotec Dev., Inc., B-258198;
B-258198.2; B-258198.3, Dec. 27, 1994, 95-1 CPD para. 52 at 6 (an offeror
bears the burden to submit an adequately written proposal, especially
where the offeror is on notice that the agency intends to make award
based on initial proposals without discussions).
Our third example of the technical issues raised here--and an area
where we agree with Dunn--is the PTO's assessment of a weakness in
Dunn's proposal for its failure to provide an FCC Class B certified
network interface card (NIC) for the network printer. RFP sec. C.2,
entitled "Mandatory Specifications," stated
"[t]he Level 1 and Level 2 workstations and all peripherals shall
be FCC Class B certified. All electronic components with
external connections that may be added to the workstations or
peripherals shall also be FCC Class B certified in order to
maintain the integrity of certification."
Within the CLIN matrix required to be completed by each offeror, under
CLIN 016AC, entitled "Network Interface for Network Laser Printer,"
was a checklist of 14 discrete specification requirements applicable
to this device. The last of the 14 required the offeror to
indicate--with a yes or no answer--whether the offered product was FCC
class B certified. Instead of answering yes or no, Dunn entered "FCC
class A." The evaluation panel cited this issue as one of Dunn's 16
technical weaknesses.
The unavailability of FCC class B certification for the printer NIC
had been brought to PTO's attention prior to the submission of
proposals. Specifically, an offeror asked a question, which was set
forth in amendment A008, which asked:
"Question/Comment 234: The [g]overnment requires that the
network interface adapter for the network laser printer be FCC
Class B certified. There are many network laser printers that
are FCC Class B certified; however, their accompanying network
interface adapters are only FCC Class A compliant. We have been
able to confirm with several manufacturers that their network
interface adapters for their printers are only FCC Class A
compliant. Our finding leads us to believe that vendors may not
be able to submit fully compliant proposals. In light of the
discussion above, we request that the [g]overnment require FCC
Class A compliance for the network interface in lieu of FCC Class
B; or release the identities of the manufacturers that the
[g]overnment may know of that offer printers and network
interface adapters that are in compliance with all the
requirements of this solicitation.
"Response: The [g]overnment's FCC requirement states '...Level 1
and Level 2 workstations and all peripherals shall be FCC Class B
certified...' The [g]overnment does not believe that CLIN 016AC
would necessarily or typically fall into either category
[workstation, peripheral]. Further the [g]overnment's market
research supports, in general, the assertion of only FCC Class A
compliance for this device category. FCC Class A certification
is sufficient for CLIN 016AC."
RFP, Amend. A008 at 2.
While we agree with Dunn that it was unreasonable to cite FCC Class A
certification as a weakness in its printer NIC--given PTO's
acknowledgment of the unavailability of equipment meeting the
requirement, and given the PTO's statement that the requirement
probably does not apply to this item--we do not find that this issue
resulted in any material change in Dunn's relative standing among the
offerors. When the agency performed its best value analysis of the
three lowest-priced offerors, it did not examine the differences
between scores. Instead, the analysis compared the specific strengths
and weaknesses of the offerors in this cluster. For reasons not
apparent in the record--but perhaps after noticing the relative
unimportance of the certification issue given amendment A008--the PTO
omitted the identified weakness related to Dunn's FCC Class A
certification. Thus, when the agency examined these three proposals
to ascertain which offered the best value to the government, this
issue in no way contributed to the conclusion that IDP, and not Dunn,
offered the best value to the government within this cluster. As a
result, we conclude that the prejudice here was either non-existent or
so minor as to have no meaningful effect on Dunn's standing in this
competition. See Textron Marine Sys., supra at 12-13 (prejudice not
found where evaluation error is so minor as to preclude any meaningful
change in the overall evaluation results).
Other Issues
Dunn also argues that the PTO unreasonably failed to hold discussions,
failed to provide Dunn an opportunity to respond to adverse past
performance information, and conducted an improper cost
technical/tradeoff.
With respect to the general decision to award without discussions, we
addressed this issue in response to IDP's protest and need not revisit
it here. However, we will address two of Dunn's contentions that
unique factors here required the agency to open discussions. First,
Dunn argues that our prior decision in The Jonathan Corp.; Metro
Machine Corp., B-251698.3; B-251698.4, May 17, 1993, 93-2 CPD para. 174,
recon. den., Moon Eng'g Co., Inc., B-251698.6, Oct. 19, 1993, 93-2 CPD para.
233, mandates overturning the agency's decision not to hold
discussions in this case. Dunn claims that the agency and intervenor
failed to distinguish this case because it cannot be distinguished.
We disagree.
As an initial matter, Dunn correctly notes that a contracting
officer's decision to make award on initial proposals is not
unfettered. The Jonathan Corp.; Metro Machine Corp., supra at 14. We
will review the exercise of such discretion to ensure that it was
reasonably based on the particular circumstances of the procurement,
including consideration of the proposals received and the basis for
the selection decision. Lloyd-Lamont Design, Inc., B-270090.3, Feb.
13, 1996, 96-1 CPD para. 71 at 6; Facilities Management Co., Inc.,
B-259731.2, May 23, 1995, 95-1 CPD para. 274 at 8. On the other hand,
this discretion is quite broad, and in recent years has been expanded.
For example, Congress has deleted the requirement originally set forth
in the Competition in Contracting Act that an agency could only make
award without discussions to the offeror with the lowest price or
evaluated cost. Compare 10 U.S.C. sec. 2305(b)(4)(A)(ii) (1988) with 10
U.S.C. sec. 2305(b)(4)(A)(ii) (1994) (showing deletion of requirement
applicable to defense agencies) and 41 U.S.C. sec. 253b(d)(1)(B) (1988)
with 41 U.S.C. sec. 253(d)(1)(B) (1994) (showing deletion of requirement
applicable to civilian agencies). In addition, the FAR now provides
that once the government has stated its intent to award without
discussions, "the rationale for reversal of this decision shall be
documented in the contract file." FAR sec. 15.610(a)(3) (FAC 90-31, Oct.
1, 1995).
The record shows that the specifics of the case here bear little
resemblance to the issues raised in Jonathan. There, our Office first
concluded that the cost realism review was flawed, The Jonathan Corp.;
Metro Machine Corp., supra at 13, then noted the uniquely close
relationship between the issues presented in that case, and questions
already drafted by the agency. Id. at 14-15. Under those
circumstances, we recommended that when the agency revisited its cost
evaluation, it also open discussions to address the very issues--i.e.,
a large discrepancy between the government's cost estimate and the
offerors' proposed costs--that had led to the unusual cost realism
adjustments. Id. at 15.
Here, nearly half of the acceptable proposals were evaluated within
the upper half of the good range, or excellent. In addition, while
many of the discrepancies and issues noted in the evaluations might
have been easily addressed, there were no overwhelming themes or
recurrent issues suggesting that the offerors misunderstood the
agency's requirements in any major way. This is in sharp contrast to
the situation in Jonathan where there was a recurring pattern of large
discrepancies between the government's cost estimate and the offerors'
proposals. Id. Under these circumstances, regardless of how much
Dunn would have preferred the opportunity to address the government's
concerns about its proposal, the record overall does not support a
conclusion that the agency unreasonably awarded based on initial
proposals.[5]
Second, Dunn argues that FAR sec. 15.610(c)(6) required the agency to
open discussions with Dunn to permit it to address adverse reports
about its past performance. For the reasons set forth below, we
conclude this provision has no application in a situation where the
agency makes award based on initial proposals.
FAR sec. 15.610(a) explains the situations where a contracting officer is
not required to hold discussions. One of the situations set forth
therein, paragraph (a)(3), is that offerors were notified of the
government's intent to make award without discussions, and the
contracting officer does not later conclude that such discussions have
become necessary--the situation here. The next paragraph, 15.610(b),
explains that if the situations in 15.610(a) do not apply, then
discussions shall be held. Paragraph (b) also relegates the content
of such discussions to the contracting officer's judgment except for
the requirements set forth in paragraphs (c) and (d). These
provisions, when read in the context of the whole section, clearly
delineate matters that must be considered when discussions are held.
They do not, on their own, operate to mandate discussions when none
are held otherwise. Accordingly, the requirement in 15.610(c)(6) is
not triggered in the situation here.
Finally, Dunn argues that the agency conducted an improper
cost/technical tradeoff, because the decision of the SSO is tersely
encapsulated in a one-page decision adopting the recommendation of the
SSEB. Dunn's argument overlooks the detailed Best Value Analysis
prepared by the SSEB, which is separate from the evaluation of
proposals and which sets out the relative strengths and weaknesses of
all offerors in support of the selection decision. We have reviewed
this document and find that it reasonably summarizes the relative
standing of all the offerors--even to the extent of excluding the
weakness unreasonably assessed against Dunn's printer NIC for offering
FCC Class A certification--and presents a sound basis for selecting
the proposal that offers PTO the best value. The SSO's decision to
adopt the findings in the Best Value Analysis as his own in no way
indicates that he failed to exercise his own judgment in this matter.
Allied Technology Group, Inc., B-271302; B-271302.2, July 3, 1996,
96-2 CPD para. 4 at 10.
I-NET'S PROTEST
PTO's evaluation of I-Net's proposal was dramatically different from
its evaluation of the two proposals discussed above. The evaluation
of technical merit rated the proposal as outstanding, and identified
several strengths and one weakness that can only be described as de
minimis. However, because of a relatively lower rating in the area of
past performance, I-Net's overall merit rating was 84.57, placing it
second in merit behind Hughes. I-Net's price, on the other hand, was
[deleted] million, the [deleted] proposal received, and more than
[deleted] million higher than Hughes' price. When the agency compared
I-Net's proposal within the cluster of similarly-priced proposals,
I-Net easily proceeded to the second level for comparison. In the
second level of review within the Best Value Analysis, the agency
concluded that I-Net's proposal compared favorably with Hughes in two
areas but overall offered no compelling reason to pay an additional
[deleted] million for I-Net's proposal over Hughes' proposal--with its
merit rating of 89.48 versus I-Net's rating of 84.57.
In its initial and supplemental protests, I-Net argues that the
agency's technical evaluation was unreasonable based on the assessment
of three minor weaknesses in its proposal. I-Net also argues that the
technical evaluation was significantly flawed because--in I-Net's
view--the evaluators did not evaluate technical proposals in 4 of 9
elements under one of the technical evaluation subfactors. I-Net
challenges the agency's assessment of its past performance in two
areas, and argues that the evaluation of its management proposal was
unreasonable in three areas. In addition, like Dunn, I-Net argues
that the agency improperly made award without holding discussions and
alleges that the SSO failed to make the cost/technical tradeoff
decision.[6] According to I-Net, if the evaluation had been properly
performed, it would have been the offeror with the highest merit
rating, and PTO would have been required to perform a cost/technical
tradeoff to decide if I-Net's greater merit justified its higher
price.
We have reviewed I-Net's protest contentions in detail and conclude
that I-Net has failed to show that the evaluation of its proposal was
unreasonable or inconsistent with the stated evaluation criteria. To
illustrate, we will set forth here in detail I-Net's claim that the
evaluators failed to rate its proposal under 4 of 9 evaluation
criteria--a significant portion of I-Net's supplemental protest--and
two representative claims that its technical proposal and past
performance were misevaluated.
With respect to I-Net's challenge to whether the agency properly
completed its technical evaluation, I-Net argues that the evaluation
was incomplete and flawed because the evaluators generally did not
complete their scoresheets in certain areas. The details of this
claim are set forth below.
The RFP here identified three subfactors under the technical
evaluation factor. These were: product quality and technical
sufficiency; lifecycle service quality; and commerciality. The
evaluation guidelines for the review of product quality and technical
sufficiency were set forth in the RFP at section M.6.1.1.1. For ease
of reference, they are included here in their entirety:
"The PTO will assess the performance, specification compliance,
reliability claims, and environmental and physical
characteristics of proposed products. Evaluation will include a
review of the results of [o]fferor-conducted benchmark testing.
Emphasis will be on the completeness of the product solution and
documentation, individual product characteristics and the degree
to which offered products meet or exceed requirements, and
ergonomic considerations. The PTO will consider all these
elements equally important and additional technical merit will be
accorded offered products or components which have achieved high
rankings in the marketplace.
"In the Operational Capabilities Demonstration to be conducted
following determination of competitive range, the PTO will
validate [o]fferor-conducted benchmark testing and will test for
the Pentium floating point unit flaw. At that time the PTO will
also test software compatibility, performance in and impact on
the operational characteristics, accessibility of device
adjustments and controls, and documentation usability."
In evaluating each offeror's response under the product quality and
technical sufficiency subfactor, the evaluators prepared a list of
nine elements drawn from the paragraphs quoted above.[7] The
scoresheets consisted of a matrix with a separate cell for each of
these nine elements. I-Net's contention, in essence, is that the
evaluation was improper because the evaluators did not complete four
of the nine cells related to this subfactor on their scoresheets.
The agency responds that the four elements identified by I-Net were
generally not scored because these elements were related to
assessments that would be made after the operational capabilities
demonstration (OCD) described in the second paragraph of section
M.6.1.1.1, quoted above.[8] Since the OCD was to take place after
creation of the competitive range, and since award was based on
initial proposals without the establishment of a competitive range, no
demonstration took place. For this reason, the evaluators generally
did not complete these cells on their evaluation matrix or merely
indicated that they were waiting for the OCD.
As a preliminary matter, we fail to see how I-Net has been harmed by
any of these claimed omissions. First, there is no showing that the
agency failed to evaluate proposals under this subfactor as described
in the initial paragraph of section M.6.1.1.1. Second, the decision
to rate these elements appears consistent with the second paragraph of
section M.6.1.1.1, which clearly indicated that there would be no OCD
until the agency established a competitive range. Third, the record
does not support a conclusion that some offerors were evaluated under
some of these identified elements and others were not.
Nonetheless, I-Net's claim instead seems to be that there was an
overriding failure of agreement amongst even the agency evaluators
about which of these elements were to be reviewed and which were to
wait for the OCD. Thus, I-Net argues that the overall review of the
product quality and technical sufficiency subfactor was irrational.
Our review of the evaluators scoresheets and the comments entered into
each of the matrix cells leads us to conclude that there was no
misunderstanding by the evaluators, and no irrationality. Although
there is not complete uniformity in how the evaluators completed their
scoresheet matrix, the materials show that three of the four
evaluators indicated that three of the nine elements could only be
evaluated in a comprehensive manner after completion of the OCD. This
did not stop some of the evaluators from indicating strengths that
were apparent from the written materials, but in several instances,
there is a clear recognition of the dichotomy--i.e., that certain
conclusions could be reached on the basis of the written materials,
while the overall assessment of these elements should wait until
completion of the OCD.
A fourth evaluator entered findings in three of the cells at issue
here, but left one blank. Although I-Net argues that this is further
evidence of an irrational evaluation, we do not reach the same
conclusion. This evaluator appears to be making preliminary findings
based on the written materials--in fact, that is all he can do given
the fact that no OCD has occurred--but failing to expressly indicate
that these findings will be supplemented by OCD test results. In
short, our review does not show that the evaluation in this area is
irrational or unreasonable.
With respect to I-Net's challenges to specific evaluation results,
I-Net claims that the agency unreasonably concluded that the
technology enhancement (or hardware upgrade) process in its technical
proposal was unclear. In this regard, although
I-Net was rated as outstanding, one of the evaluators noted that the
technology enhancement (hardware upgrade) process was not very clear.
Specifically, the evaluator commented that I-Net did not describe in
any great detail how it transmitted news of technical enhancements or
upgrades to its customers.
In response to I-Net's claim, we reviewed pages 8 through 11 of
section 3 of its technical proposal, wherein I-Net describes its
approach in this area. After explaining in detail for nearly three
full pages how I-Net helps its own employees keep up with technical
developments, it concludes with one general paragraph claiming a
practice of ad hoc presentations of new technologies to "clients who
have shown a particular interest in new products or technical areas."
I-Net Technical Proposal, section 3.0 at 10. In our view, there was
nothing unreasonable in the evaluator's modest conclusion that the
proposal was unclear in explaining how these new developments would be
communicated to customers, and in fact, our review lends credence to
her conclusion.
I-Net also complains that the PTO unreasonably stated that the
proposal contained a minor weakness under the production and delivery
capability subfactor under the management factor because the agency
misunderstood a delivery schedule matrix provided with its management
proposal. Specifically, the evaluators concluded that the delivery
period for three CLINs exceeded the 30 day requirement for deliveries
established by the RFP.
In the introduction to its management proposal, I-Net states that
"PTO's 30 day delivery requirements demand in some cases that I-NET
hold key, long lead time components in inventory until needed for
order fulfillment and delivery." I-Net Management Proposal,
Introduction at 12. In contrast, in a delivery schedule matrix
provided at the end of section 1.0, I-Net shows time periods in excess
of 30 days in response to the following question: "[w]hat is the
typical delivery time between order acceptance and delivery to
customer?" Id., section 1.0, matrix following page 7. According to
I-Net, it was unreasonable to interpret this matrix as suggesting that
I-Net would not meet the delivery requirement because the matrix shows
suppliers' delivery times, not I-Net's delivery times.
Our review of the record reveals nothing unreasonable in PTO's
decision to question whether I-NET will meet the needed delivery times
for these three items. First, the statement in the narrative cannot
be termed a clear promise to meet the delivery time requirement.
Rather, the statement is a recognition of steps that need to be taken
to meet the requirement. Second, as stated earlier, discrepancies
between the narrative and the CLIN matrix are valid areas for agency
concern. Finally, despite I-Net's claim regarding the meaning of the
matrix in its proposal, this is not clear from the face of the matrix.
As a result, we see no basis to conclude that the agency acted
unreasonably in assessing this minor weakness in I-Net's proposal.
Koehring Cranes & Excavators; Komatsu Dresser Co., supra.
CONCLUSION
Our review here leads us to conclude that the government benefited
from an extraordinarily broad competition in response to this
procurement. It received 20 proposals--each representing significant
effort--with 17 evaluated as acceptable, or susceptible to being made
acceptable. Its highest-rated proposal, the one submitted by Hughes,
fell at the median of all offered prices. If anything, the challenges
here show that the offerors generally understood the requirements of
the solicitation and that there were no major issues indicating a
misunderstanding between the government and those who sought to sell
it this equipment.
The protests are denied.
Comptroller General
of the United States
1. Specifically, within the technical factor, product quality and
technical sufficiency would be slightly more important than lifecycle
service quality and commerciality. Lifecycle service quality and
commerciality were equally important. Within the past performance
factor, the two subfactors were equally important. Within the
management factor, the first two subfactors were equally important,
and the third subfactor was less important.
2. PTO concluded that IDP's proposal did not meet the following
solicitation requirements: (1) minimum base random access memory
(RAM) of 32 megabytes (MB); (2) MS-DOS operating system software
version 6.22; (3) a 3-button mouse; (4) bar code reader with audible
indicators; (5) 133 MHz microprocesser for level 2 workstation; (6)
data transfer rate of 10 MB or faster for internal hard drive; (7)-(9)
specified non-interlaced resolutions at specified refresh rates for
17-inch, 21-inch, and 24-inch monitors; and (10) potential upgrade to
96 MB on motherboard without removing initially installed 32 MB
memory.
3. IDP also challenges the cost/technical tradeoff performed by the
PTO, arguing that the tradeoff was unreasonable and that the SSO did
not make an independent decision. We address these issues in our
response to Dunn's protest.
4. For the record, if Dunn is correct there are numerous typographical
errors here. The RFP required a resolution of 1280 x 1024 at 75 Hz.;
Dunn offered 1024 x 768 at 72 Hz.
5. For the record, we find particularly unpersuasive Dunn's assertion
that "certainly 10 minutes of discussions could have rectified any
misunderstandings." Dunn's Initial Protest, Sept. 20, 1996, at 4.
Discussions with 14 to 17 offerors for $150 million worth of computer
equipment involving--in Dunn's words--"hundreds of questions and
answers" and complex specifications could not have been completed in
10 minutes. Such discussions would likely have involved a significant
commitment of agency resources.
6. Because I-Net's contentions in these two areas are not
significantly different from those raised by Dunn, we will not
consider them again.
7. These elements were: (1) completeness of product solution; (2)
performance; (3) specification compliance (meets or exceeds); (4)
reliability; (5) environment and physical characteristics; ergonomics
(control, etc.); (6) ease of installation, integration and performance
in impact on PTO environment, ergonomics; (7) compatibility with PTO
statement of work; (8) operational characteristics; and (9)
documentation completeness, presentation, usability.
8. The RFP provides additional guidance on this issue at section
M.5.3., entitled "Final Evaluation and Operational Capabilities
Demonstration." As its title suggests, this provision is consistent
with the agency's response that the OCD would not take place until
after determination of a competitive range.