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.