BNUMBER:  B-274871.2 
DATE:  August 25, 1997
TITLE: Chant Engineering Co., Inc.--Request for Costs, B-274871.2,
August 25, 1997
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Matter of:Chant Engineering Co., Inc.--Request for Costs

File:     B-274871.2

Date:August 25, 1997

Philip Chant for the protester. 
John E. Lariccia, Esq., Department of the Air Force, for the agency.
Jacqueline Maeder, Esq., and Paul Lieberman, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

General Accounting Office recommends that protester be reimbursed the 
costs of filing and pursuing its protest where the agency unduly 
delayed taking corrective action in response to the protest.

DECISION

Chant Engineering Co., Inc. requests that we recommend that it be 
reimbursed the costs of filing and pursuing its protest challenging 
the award of a contract to AAI/ACL Technologies, Inc., under request 
for proposals (RFP) No. F04699-96-R-A010, issued by the Department of 
the Air Force, McClellan Air Force Base, California, for two 
electrohydraulic servovalve test stations for testing F-16 aircraft.

We recommend that the agency reimburse Chant its protest costs.

The RFP, issued May 8, 1996, contemplated the award of a firm, 
fixed-price contract for the design, manufacture, verification and 
installation of two electrohydraulic servovalve test stations.  The 
RFP contained six pages of specifications which covered the test 
stations' general requirements, computer requirements, electronic 
console (EC) requirements, hydraulic test console requirements, 
installation requirements, and delivery, maintainability and training 
requirements.  With respect to the EC, the RFP stated that:

     "a.  All components of the EC shall be enclosed within the 
     console cabinet.

     "b.  All components of [the] EC shall use IEEE-488 standard 
     interface."

Award was to be made to the offeror submitting the lowest-priced, 
technically acceptable offer. 

Of five proposals received, the Air Force found four technically 
acceptable, including the proposals submitted by Chant and AAI.  AAI's 
price was $541,043; Chant's price was $549,925.  The Air Force awarded 
the contract to AAI as the lowest-priced, technically acceptable 
offeror.  Chant protested to our Office, alleging that AAI's proposed 
EC did not satisfy the RFP requirement that all components in the EC 
"shall use IEEE-488 standard interface."  In its initial protest 
submission, Chant stated that it was prejudiced by the Air Force's 
actions in relaxing this requirement for the awardee because Chant had 
"allowed additional time and higher component costs in [its] pricing 
to meet IEEE-488 standards."  Chant further asserted that if it had 
been informed that it need not fully comply with the IEEE-488 
specification, its "pricing would have been lower, resulting in the 
contract award."  

At the request of the agency, the November 4 agency report due date 
was extended and the Air Force's report on the protest was filed on 
November 18.  In its report, the Air Force contended that Chant 
misinterpreted the requirement for the IEEE-488 interface and the 
awardee's proposal.  Contrary to Chant's position that the RFP 
required that "all components" of the EC use the IEEE-488 standard 
interface, according to the agency, the sole purpose of the RFP's 
IEEE-488 standard was to facilitate the transmission of data between 
independent components, which otherwise would not be able to interface 
with one another.  Therefore, the Air Force took the position that the 
requirement for the IEEE-488 interface only applies to inter-component 
communication; the IEEE-488 standard does not apply, and there is no 
need for it to apply, where the communication is "intra-component."  
The agency also stated that the awardee's test instrument combined 
what might otherwise be considered separate components into one 
component.  These separate components were installed on one circuit 
board and, because these components were now "packaged" as one unit in 
AAI's proposal, the agency argued that the IEEE-488 standard was not 
applicable.  The agency took the position that the EC proposed by AAI 
had only two components, the data acquisition and control unit and the 
power supply.  However, the awardee's submissions specifically stated 
that only the power supply on AAI's EC meets the IEEE-488 standard 
interface requirement.

Chant filed comments on November 29, again arguing that the 
specifications were clear and that AAI's EC did not meet the interface 
requirement.  The protester also challenged the agency's argument that 
AAI's EC was made up of only two components, arguing that AAI's EC was 
composed of many different components from many different 
manufacturers.  The protester argued that the contracting officer 
should have recognized that AAI's proposal was not in compliance with 
the IEEE-488 requirement and either eliminated the proposal from 
consideration or, if AAI's approach was considered acceptable, the Air 
Force should have amended the solicitation and given all offerors an 
opportunity to propose under the same requirement as AAI.  

On December 5, the Air Force filed a supplemental response to Chant's 
comments, again asserting that the protester misunderstood the RFP's 
requirements.  The agency argued that Chant's interpretation would 
impose too restrictive a requirement and that the IEEE-488 standard 
governs only inter-component communication.  The agency stated that:

     "[i]n specifying that the IEEE-488 standard would apply to all 
     components of the EC, the Air Force sought an EC which would 
     possess a uniform interface for all inter-component 
     communication.  The [statement of work} SOW never intended, nor 
     did it require, the individual parts (circuit boards) of each 
     piece of equipment to be IEEE-488 compliant."

The Air Force repeated its argument that AAI's proposal complied with 
the requirement that all components of the EC be IEEE-488 compliant 
because all inter-component communication which occurs within AAI's EC 
is through an IEEE-488 interface.

On December 19, our Office conducted a telephone conference with the 
parties to clarify the agency's technical rationale and to request 
Chant to provide specific cost figures pertaining to its compliance 
with the requirement at issue.  Air Force technical personnel and a 
General Accounting Office technical expert participated in the 
telephone conference.  During that conference, the agency conceded 
that all components of AAI's proposed EC did not use the IEEE-488 
standard interface and that, as noted above, only the power supply on 
AAI's EC met the IEEE-488 interface requirement.  We specifically 
requested that Chant submit an estimate of the cost difference between 
its proposed EC with all components meeting the IEEE-488 interface 
requirement and what it would have offered if the solicitation had 
required that only inter-component communications meet the IEEE-488 
standard.  By letter dated December 23, Chant responded that if it did 
not have to comply with the IEEE-488 standard for all components, its 
proposed costs would have been reduced by $12,000 to $27,000--more 
than the price difference between the two proposals.  

By letter dated December 24, the Air Force notified our Office that it 
intended to take corrective action on the protest.  Specifically, the 
Air Force stated that it intended to revise the specifications and 
resolicit BAFOs.  If the evaluation of BAFOs resulted in a new source 
selection decision, the Air Force stated that it would terminate AAI's 
contract and award a new contract.  Because the agency was taking 
corrective action, our Office dismissed the protest as academic.

Chant contends that it is entitled to recover the costs of filing and 
pursuing its protest under section 21.8(e) of our Bid Protest 
Regulations.  Under that provision, we may recommend that the agency 
reimburse a protester for its protest costs where, based on the 
circumstances of the case, we determine that the agency unduly delayed 
taking corrective action in the face of a clearly meritorious protest.  
Oklahoma Indian Corp.--Claim for Costs, 70 Comp. Gen. 558 (1991), 91-1 
CPD  para.  558.

The Air Force asserts that reimbursement of such costs is unwarranted 
because the protester failed to allege prejudice in its initial 
protest and prejudice was not otherwise evident from the face of the 
protest.  The agency argues that despite numerous attempts to obtain 
evidence of prejudice, none was provided until December 23, when, as 
noted above, Chant responded to our request concerning proposal cost 
differentials.  The agency argues that it took prompt corrective 
action after receiving Chant's December 23 submission. 

In deciding whether the corrective action was prompt under the 
circumstances, we review the record to determine whether the agency 
took appropriate and timely steps to investigate and resolve the 
impropriety.  David Weisberg--Entitlement to Costs, 71 Comp. Gen. 498, 
501 (1992), 92-2 CPD  para.  91 at 3-4.  In its initial protest and 
throughout the ensuing multiple filings, Chant argued that the agency 
had improperly permitted AAI to offer a noncompliant EC and had not 
considered the cost/price impact of that noncompliant EC.  Contrary to 
the Air Force's position, while Chant did not supply a precise dollar 
figure, the protester did allege in its initial protest that it had 
been prejudiced by the agency's actions and that its price would have 
been lower if it had been informed that all components of the EC did 
not have to meet the IEEE-488 requirement.  The RFP provided for a 
straight price competition, and the price difference between the two 
proposals was less than $9,000.  Under these circumstances, the 
protester's assertion that compliance had caused it to raise its 
proposed price was a sufficient assertion of prejudice.  Global 
Assocs. Ltd., B-271693; B-271693.2, Aug. 2, 1996, 96-2 CPD  para.  100 at 6.

The Air Force thus had an obligation to promptly and adequately 
investigate the validity of the protester's position that AAI's 
proposed EC failed to meet the specifications.  The relevant 
information was apparent from the solicitation and the face of AAI's 
proposal.  Specifically, the RFP clearly and unambiguously required 
that all EC components be IEEE-488 compliant and AAI's proposal 
offered an EC which listed 13 major components, all from different 
manufacturers and including, among other things, at least three 
"boards"[1] which, under the specifications here, should have met the 
IEEE-488 interface requirement.  Yet, as noted above, the Air Force 
recognized at all times that only the power supply on AAI's proposed 
EC is IEEE-488 compliant.

While the agency argues that it quickly took corrective action 1 day 
after receipt of Chant's figures supporting the prejudicial effect of 
the agency's actions, more than 2-1/2 months had elapsed between the 
filing of the protest and the agency's conceding that AAI's EC did not 
meet the RFP specifications.[2]  Because the initial protest 
challenged the propriety of AAI's award and the key evidence 
supporting that protest ground was apparent from the face of AAI's 
proposal, the agency's delay was not justified.  See Griner's-A-One 
Pipeline Servs., Inc.--Entitlement to Costs, B-255078.3, July 22, 
1994, 94-2 CPD  para.  41; LB & M Assocs., Inc.--Entitlement to Costs, 
B-256053.4, Oct. 12, 1994, 94-2 CPD  para.  135 at 4-5.

Chant's protest of the award to AAI was clearly meritorious.  From the 
initial protest filing, Chant challenged AAI's compliance with the 
specification that eventually caused the agency to conclude that AAI's 
proposal did not comply with the clear language of the specification, 
and that the specification should have been amended to more clearly 
define the agency's needs.  AAI's failure to comply with the 
specification was evident from the plain language of its proposal.  
Accordingly, the unacceptability of that proposal and the merit of the 
protester's argument that award to AAI was improper should have been 
readily apparent to the agency.  Possible prejudice to Chant should 
also have been readily apparent to the agency under the circumstances 
since the protester's price was only $8,882 more than the awardee's 
price.  Chant's December 23 submission of cost differentials merely 
confirmed prejudice.  In short, neither legally nor factually was this 
a close case.  

The agency's failure to take prompt corrective action frustrated the 
intent of the Competition in Contracting Act of 1984, 31 U.S.C.  sec.  
3551-3556 (West Supp. 1997),  impeding the economic and expeditious 
resolution of this protest.  LB & M Assocs., Inc.--Entitlement to 
Costs, supra, at 5.  Accordingly, we recommend that the Air Force 
reimburse Chant for its protest costs.  Chant should submit its claim 
for costs, detailing and certifying the time expended and costs 
incurred directly to the agency within 60 working days of receipt of 
this decision.  Bid Protest Regulations, 4 C.F.R.  sec.  21.8(f)(1) (1997).

Comptroller General
of the United States
 
1. A "board" is a printed circuit board with electronic devices 
attached to it.  Each board performs a different function, such as 
input/output, memory, or processing.

2. The Air Force argues that our decision in Tidewater Marine, 
Inc.--Request for Costs, B-270602.3, Aug. 21, 1996, 96-2 CPD  para.  81, 
where we denied costs because we found that the agency took prompt 
action, is especially relevant here.  We disagree.  In Tidewater, the 
agency submitted its report, the protester commented on the report, 
and our Office conducted a telephone conference after receipt of these 
submissions.  The decision is predicated on the fact that the agency 
took corrective action 8 days after the "key issue was squarely put in 
dispute" during the telephone conference.  Moreover, 1 day after 
Tidewater's protest was filed with our Office, the agency immediately 
contacted the protester requesting clarification.  Later, the agency 
requested suggested remedies from Tidewater and readily agreed to 
engage in negotiations to resolve the protest.  Here, in contrast, the 
protest issue was clear from the initial filing; however, the Air 
Force repeatedly requested dismissal of the protest and delayed 
significantly in submitting its report.  Moreover, as noted above, 
even when the agency admitted in its response to Chant's comments that 
its specification did not state what the agency intended, the agency 
continued to defend its actions.