BNUMBER: B-274748.3
DATE: May 5, 1997
TITLE: Matter of:National Aeronautics and Space Administration--
Reconsideration and Modification of Remedy
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Matter of:National Aeronautics and Space Administration--
Reconsideration and Modification of Remedy
File: B-274748.3
Date:May 5, 1997
Andrew Mohr, Esq., Cohen & White, for the protester.
Vincent A. Salgado, Esq., and Thomas W. Berndt, Esq., National
Aeronautics and Space Administration, for the agency.
John Van Schaik, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Although Federal Acquisition Regulation (FAR) Part 12, dealing with
purchases of commercial products, permits requirements to be stated in
broad functional or performance terms instead of in detailed
specifications, it requires a contracting agency to describe its need
for commercial items in "sufficient detail for potential offerors of
commercial items to know which commercial products or services to
offer," such that a solicitation is flawed where it does not include
sufficient information to allow commercial vendors to understand the
agency's requirements.
DECISION
The National Aeronautics and Space Administration (NASA) requests
reconsideration of our decision Access Logic, Inc., B-274748;
B-274748.2, Jan. 3, 1997, 97-1 CPD para. 36, in which we sustained the
protest of Access Logic, Inc. against the award of a contract to EISI,
Inc., under request for offers (RFO) No. 2-36632 (CDT), issued by NASA
for a 360-degree rear projection display system which will be used to
simulate the outside view from an air traffic control tower. NASA
also requests that we modify our recommendation that NASA terminate
the contract and resolicit with an appropriate statement of the
agency's needs.
We affirm the decision, but modify the recommendation.
Among other items, the RFO specified projection systems and projection
screens by brand name and indicated that equal products would be
considered. Instead of the brand name projection system and screens,
Access Logic proposed "equal" projectors and screens. Access Logic's
proposal was rejected as technically unacceptable. Among other
alleged flaws, NASA's evaluators concluded that Access Logic's offer
did not meet solicitation requirements for mullions, or spacers
between the projection screens, and requirements for "gain" and "half
gain angle" of the projection screens. We sustained the protest
because we concluded that NASA improperly found Access Logic's offer
unacceptable for failing to meet requirements not set forth in the
RFO.
NASA first argues that our decision was based on a factual error since
we erroneously concluded that NASA evaluated proposals and defended
the protest as if it concerned a brand name or equal solicitation.
According to NASA, it did not evaluate proposals or defend the protest
as if the solicitation called for brand name or equal items. Rather
than a brand name or equal solicitation, NASA states it was always the
agency's position that the solicitation was for commercial items and
argues that we erroneously applied standards concerning brand name or
equal solicitations, instead of the standards set forth in Part 12 of
the Federal Acquisition Regulation (FAR), "Acquisition of Commercial
Items." According to NASA, our decision also was based on errors of
law because, instead of relying solely upon the standards set forth in
Part 12 of the FAR, we erroneously relied on standards set forth in
Part 15 of the FAR concerning the acquisition of noncommercial items.
The record provides no support for NASA's current position. In the
first reference in the decision to the acquisition having been
conducted on a "brand name or equal" basis, we stated that "the RFO
specified the Electrohome Marquee 9501LC ACON brand name projection
systems, or equal, and Optawave projection screens, or equal." Then,
in a footnote, we stated:
"The RFO in fact only stated that "or equal" offers would be
considered for the projectors, and not the screens. Nonetheless,
the solicitation included detailed technical requirements for the
screens--suggesting that a brand name or equal method also was
intended for the screens. More importantly, in its evaluation of
proposals and its defense of this protest, NASA has treated the
solicitation as a brand name or equal solicitation for both the
projectors and the screens. Under these circumstances, we have
reviewed the evaluation as if the RFO permitted offers of equal
products for both items."
NASA specifically complains about this footnote. According to NASA,
"[i]t is clear throughout the written record that NASA issued this
solicitation, evaluated offers, and defended this protest under FAR
Part 12 and not as a 'brand name or equal' procurement under Part 15
of the FAR." Although NASA appears to believe that the above quoted
footnote demonstrates some misunderstanding on our part concerning the
way the procurement was conducted, a fair reading of the decision
demonstrates that our sole purpose in that footnote was to explain why
NASA evaluated offers of screens other than the brand name screens
listed in the RFO. In other words, our point was simply that in its
evaluation of offers NASA treated this solicitation as a brand name or
equal acquisition--and not as a brand name only acquisition--because
had it not done so, it would have simply rejected Access Logic's offer
for failing to offer the listed brand name screens.
Moreover, a review of NASA's report in response to the protest
demonstrates that, in fact, NASA did defend the protest as an
acquisition of brand name or equal items. In that report, NASA stated:
"Because the solicitation calls for the provision of specific
items by brand, FAR provisions and case law on brand name or
equal specifications may provide additional guidance on the
issues presented in this case. In a brand name or equal
acquisition, offerors providing products equal to the name brand
products specified must demonstrate through materials submitted
with their offers that their products meet or exceed the
solicitation's material requirements, including any listed
salient characteristics."
Thus, the references in the decision to a brand name or equal
solicitation were consistent with NASA's evaluation of the offers and
its explanation of the procurement in its report on the protest.
NASA nonetheless argues that we failed to give due credit to the fact
that the acquisition was intended to be conducted pursuant to FAR Part
12, as a commercial item acquisition, and that, in sustaining the
protest, we improperly applied standards which relate to the
acquisition of noncommercial items. NASA gives a lengthy explanation
of its understanding of the way commercial item acquisitions are
supposed to be conducted under FAR Part 12, as distinguished from
acquisitions of noncommercial items. For the most part, we agree with
NASA's explanation of FAR Part 12. In this respect, we agree that the
purpose of FAR Part 12 is to provide the government with flexibility
to acquire commercial items and that FAR Part 12 does not impose many
of the solicitation and evaluation procedures required in other
negotiated procurements so that the government can receive the benefit
of commercial pricing. We also agree with NASA that under FAR sec.
12.205(a), whenever possible, contracting officers are to request
existing product literature in lieu of unique technical proposals for
purposes of evaluation and that FAR sec. 12.205(b) permits offerors to
propose more than one item.[1]
Although we largely agree with NASA's understanding of commercial item
acquisitions under FAR Part 12, we part company with NASA concerning
the information that agencies are required to include in solicitations
for commercial items. On this point, NASA argued in its report in
response to the protest, as it does in its reconsideration request,
that the RFO met the requirement of FAR sec. 12.202(b) that the
solicitation describe the agency's needs in terms of acceptable
commercial products to offer and the intended use for those products.
Our original decision addressed this contention. Specifically, we
noted that FAR sec. 12.202(b) requires that "[t]he description of the
agency need must contain sufficient detail for potential offerors of
commercial items to know which commercial products or services to
offer." Metfab Eng'g, Inc.; Mart Corp., B-265934; B-265934.2, Jan.
19, 1996, 96-1 CPD para. 93, at 2-3.
Under our Bid Protest Regulations, a party requesting reconsideration
must show that our decision contains either errors of fact or law or
present information not previously considered that warrants reversal
or modification of our decision. Bid Protest Regulations, 4 C.F.R. sec.
21.14(a) (1997). While apparently NASA disagrees with our decision
concerning the information that is required to be included in
commercial item solicitations, the agency's arguments provide no basis
for reversal or modification of the substantive portion of our
decision. In this respect, while we recognize that a key element of
efforts to increase purchases of commercial products is stating
requirements in broad functional or performance terms, rather than
using detailed government specifications, this preference for broad
product descriptions and nondevelopmental/commercial items is
consistent with, and does not relieve the contracting agency of, the
obligation to specify its requirements in a manner designed to achieve
full and open competition. 10 U.S.C. sec. 2305(a) (1994); Adventure
Tech, Inc., B-253520, Sept. 29, 1993, 93-2 CPD para. 202, at 4. That is,
where an agency intends to acquire a commercial item, it is obligated
to describe the item in a way that identifies the agency's needs with
sufficient detail and clarity so that all vendors have a common
understanding of what is required under the contract in order that
they can compete intelligently on a relatively equal basis. Adventure
Tech, Inc., supra.
Although NASA argues that we misunderstood and failed to apply FAR
Part 12 in our analysis, the very provisions of FAR Part 12 cited by
NASA refute the agency's position. For example, citing FAR sec.
12.202(b), NASA repeatedly argues that a solicitation for commercial
items is only required to describe the products to be acquired and
their intended use. That section provides:
"The description of agency need must contain sufficient detail
for potential offerors of commercial items to know which
commercial products or services to offer. Generally, for
acquisitions in excess of the simplified acquisition threshold,
an agency's statement of need for a commercial item will describe
the product or service to be acquired and explain how the agency
intends to use the product or service in terms of functions to be
performed, performance requirements or essential physical
characteristics."
Thus, a solicitation for commercial items is required to "contain
sufficient detail for potential offerors of commercial items to know
which commercial products or services to offer." In addition,
although such a solicitation is to "describe the product or service to
be acquired and explain how the agency intends to use the product or
service," under FAR sec. 12.202(b), where appropriate, such a description
is to include "essential physical characteristics." In this case, as
we explained in our original decision, and as we address further
below, the solicitation did not meet these FAR Part 12 standards.[2]
NASA specifically challenges our conclusion that NASA had unreasonably
determined that Access Logic's proposal took exception to the RFO
requirement concerning mullions. As we explained in our original
decision, the record demonstrates that the evaluators considered
Access Logic's offer unacceptable because the proposed 3/4-inch
mullions "would create a thick defined edge line between screens and
significantly distract from images of aircraft and ground equipment
moving across the screens." As we explained in our initial decision,
essentially there were two problems with this evaluation. First, the
RFO did not require mullions of any specific width. NASA now argues
that a requirement for mullions of a specific width would have been
inconsistent with FAR Part 12 because this would have forced the
agency to predetermine the best method of construction. Nonetheless,
NASA apparently had a predetermined idea of the appropriate width of
the mullions. As we stated in our original decision:
"it appears that NASA simply has its own view, one that would not
be readily apparent to the commercial sector, as to the width of
the mullions that it would be willing to accept. To the extent
that
NASA had such a specific requirement, it should have specified it
in the RFO."
Second, nothing in Access Logic's offer indicated that it would not
meet the only requirements in the RFO concerning the mullions:
"minimum vertical mullions" and "[p]hysical separation between the
screens . . . as small as possible so as to make it difficult to see
the screen edge lines." We concluded that Access Logic's proposal
statement that "[t]he screens will be installed as-close together
as-possible, with minimal vertical mullions," was entirely consistent
with the RFO requirements. NASA has provided no grounds for
challenging that conclusion.
As we explained in our initial decision, NASA also rejected Access
Logic's offer because the firm's proposed projection screens did not
meet RFO requirements concerning gain and half gain angle. We
concluded that neither the gain nor the half gain angle of Access
Logic's proposed screens provided a reasonable basis for finding
Access Logic's proposal unacceptable. NASA also challenges our
decision in this respect.
NASA explains in its reconsideration request--as it did in response to
the protest--that the planned facility is to "provide a
state-of-the-art simulation of an airport control tower environment.
Accordingly, the screen images of the outside view must be as
realistic as possible," and "brightness of the screen images should be
as consistent as possible as seen from all viewing angles." According
to NASA, its market research revealed that higher gain values, which
are a measure of image brightness from a frontal view, result in
diminished brightness consistency when the screens are viewed from
peripheral angles. As a result, NASA explains that it determined that
screens with a gain of 4.0 were the most desirable considering the
type of projectors and the light conditions of the viewing room and,
accordingly, specified screens with a gain of 4.0.
We concluded that the agency's concerns over brightness consistency
were not conveyed to offerors because the RFO did not specify a half
gain angle and did not state that a 4.0 gain could not be exceeded.
NASA now argues, however, that including such detail in the RFO would
have been contrary to the policies and procedures of FAR Part 12 and
would have required the agency to "preselect the specific screen
before issuing the solicitation instead of letting offerors propose
the commercial products they feel best fit the Government's need."
Although NASA complains that our decision would compel the agency to
preselect a particular screen, the record demonstrates that, in fact,
the agency had specific ideas of what its needs were for a screen but
simply failed to convey that information to prospective offerors. In
this respect, NASA argued in response to the protest--as it does
now--that "the screen images of the outside view must be as realistic
as possible," and "brightness of the screen images should be as
consistent as possible as seen from all viewing angles." However,
that information was not in the RFO. Nor did the RFO specify a half
gain angle which, as we explained in our original decision, "would be
the obvious way to indicate a concern with the quality of peripheral
images." Thus, as we explained, the RFO simply did not convey "to
vendors in the commercial marketplace that high half gain angles were
mandatory," or in any other way inform prospective offerors of the
importance the agency placed on realistic peripheral images.
We recognize that NASA has attempted to make use of the simplified
procedures available under FAR Part 12 for the acquisition of
commercial items. We also recognize that a key element of efforts to
increase purchases of commercial products is to state requirements in
broad functional or performance terms, rather than using detailed
specifications. Adventure Tech, Inc., supra, at 3. Nonetheless, as
we explained above, FAR Part 12--on which NASA relies--obligates a
contracting agency to describe its need for commercial items in
"sufficient detail for potential offerors of commercial items to know
which commercial products or services to offer." FAR sec. 12.202(b). In
other words, FAR Part 12 does not relieve the agency of the obligation
to specify its requirements in a manner designed to achieve full and
open competition. Here, the competition was flawed because NASA
failed to meet these obligations since the RFO did not include
sufficient information for commercial vendors to understand NASA's
requirements.[3]
Finally, NASA has requested that we modify the corrective action
recommended in our original decision. We noted that although the
projectors and screens and related equipment had been delivered to
NASA before the contract was suspended, the equipment had not yet been
installed. As a result, we recommended that NASA terminate the
contract and resolicit with an appropriate statement of the agency's
needs. NASA now explains that it intends to terminate the contract
but retain the projectors and screens that have been received and paid
for by the agency.
NASA explains that the screens, which cost $353,685, cannot be
returned because they were custom-made and are not part of the
manufacturer's inventory. According to NASA, each of the screens was
cut from the same large glass sheet or lot so that each screen would
have the same consistency. As a result, NASA explains, these screens
cannot be used with other screens without affecting the consistency of
the overall image. For these reasons, NASA reports, the manufacturer
has indicated that it will not accept return of the screens. NASA
also reports that it has paid $201,404 for seven of the projectors
which it received in good condition (the other five were returned as
damaged). NASA also reports that it would have to pay $40,280.80 for
a restocking charge and the remaining $161,123.20 would only be
received as a credit for future purchases, not as cash. According to
NASA, since it would not likely be able to take advantage of the
credit, it could not recover the $201,404 already disbursed for the
projectors. Thus, NASA argues that if required to terminate the
contract and return both the projectors and screens, it would incur a
$555,089 cost ($353,685 for the screens, plus $201,404 for the seven
projectors) which is approximately 72 percent of the contract value.
NASA indicates that it will conduct a recompetition for the remainder
of the requirement, including installation and integration of the
equipment.
Under the circumstances, and based on our review of the record, we
modify our recommendation. It is not practicable to return the
projectors and screens that have already been delivered and paid for.
We now recommend that NASA retain the projectors and screens that
were delivered and paid for under the contract and recompete the
remainder of the requirement encompassed by the awarded contract,
including installation and integration of the equipment. In addition,
we recommend that Access Logic be reimbursed the costs of preparing
its offer, as well as its costs of responding to the agency's request
that we modify the recommendation. Bid Protest Regulations, 4 C.F.R. sec.
21.8(d)(1) and (2). Access Logic's certified claim for such costs,
detailing the time expended and costs incurred, should be submitted
directly to the agency within 60 days after receipt of this decision.
Bid Protest Regulations, 4 C.F.R. sec. 21.8(f)(1). Access Logic remains
entitled to the costs associated with pursuing its initial protest to
our Office.
The prior decision is affirmed; the recommendation is modified.
Comptroller General
of the United States
1. We also agree with NASA that commercial item acquisitions are
different from other procurements because, as distinct from
procurements where the government seeks unique products or services to
satisfy its particular requirements, under FAR Part 12 the government
seeks products or services that are already available in the
commercial marketplace. In addition, we agree with NASA that,
compared to typical negotiated procurements, FAR Part 12 calls for
streamlined solicitation and evaluation procedures that are intended
to reflect commercial marketplace practices.
2. NASA also argues that FAR sec. 12.602(b) indicates that the
government's evaluation of commercial products is to focus on which
product best meets the government's needs. Although FAR sec. 12.602(b)
states that "[t]echnical capability may be evaluated by how well the
proposed products meet the Government requirement instead of
predetermined subfactors," it also states that such subfactors are not
necessary "when the solicitation adequately describes the item's
intended use." Thus, a prerequisite for an appropriate evaluation of
commercial items, consistent with FAR Part 12, is an adequate
description of the agency's needs. Again, as we explained in our
initial decision, that is the very problem here.
3. NASA argues that our decision was in error "with respect to each
reason NASA found [Access Logic's proposal] not to be the best
commercial fit to its needs." As we noted in our decision sustaining
the protest, in addition to rejecting the offer for not meeting
requirements relating to the mullions and half gain angle, NASA found
Access Logic's offer technically unacceptable because agency
evaluators concluded that the projectors proposed by the firm failed
to meet an RFO requirement for automatic convergence and because the
offer did not list the firm's key personnel or design and engineering
staff. In sustaining the protest, we concluded that neither of these
two latter alleged flaws in Access Logic's offer provided a basis for
finding that offer unacceptable. NASA has not challenged our decision
concerning the automatic convergence issue or the staffing issue.