BNUMBER:  B-275053.5; B-275053.6; B-275053.7; B-275053.8 
DATE:  February 21, 1997
TITLE: Orlando Business Telephone Systems, Inc., B-275053.5; B-
275053.6; B-275053.7; B-275053.8, February 21, 1997
**********************************************************************

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:Orlando Business Telephone Systems, Inc.

File:     B-275053.5; B-275053.6; B-275053.7; B-275053.8

Date:February 21, 1997

James P. Hodges, Esq., James P. Gallatin, Esq., and Stephen P. Murphy, 
Esq., Popham, Haik, Schnobrich & Kaufman, for the protester.
Laura K. Kennedy, Esq., and Kelley P. Doran, Esq., Seyfarth, Shaw, 
Fairweather & Geraldson, for NEC Business Communications Systems, 
Inc., an intervenor.
Jane Converse, Esq., Department of Veterans Affairs, for the agency.
David A. Ashen, Esq., and John M. Melody, Esq., Office of the General 
Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Protest against agency's post-protest reevaluation of past 
performance using new past performance reference for contract not 
listed in protester's proposal is denied where solicitation 
contemplated that agency would consider offerors' performance on other 
agency contracts for similar services whether or not offerors complied 
with solicitation requirement to list such contracts in proposals; 
fact that agency implemented stated intention only after protests had 
been filed is neither evidence of bias nor otherwise improper.

2.  Protest against source selection based on agency's correction of 
offerors' summations of line item prices is denied where agency, 
anticipating that discrepancies were likely where offerors were 
required to complete 56 pages of detailed pricing schedules with 
hundreds of prices, advised offerors in solicitation that the agency 
would independently generate summary pricing tables and that only the 
unit prices, and not offerors' summations of their prices, would 
control.

DECISION

Orlando Business Telephone Systems, Inc. (OBT) protests the Department 
of Veterans Affairs' (VA) decision to terminate its contract and make 
award to NEC Business Communications Systems, Inc. under request for 
proposals (RFP) No. 101-21-96, for replacement of the telephone system 
at the VA Medical Center, San Juan, Puerto Rico.  VA determined that 
its award to OBT resulted from an erroneous evaluation of offerors' 
past performance and that, based on a proper evaluation, NEC is in 
line for award.  

We deny the protest.

BACKGROUND

The solicitation contemplated award of a fixed-price contract for the 
purchase, installation and maintenance (for up to 10 years) of a 
complete digital and voice telephone system.  Award was to be made to 
the offeror whose technically acceptable proposal offered the "most 
advantageous alternative to the Government" under two approximately 
equal evaluation criteria:  (1) past performance, and (2) cost/price.  
Offerors were to furnish "[a] list of all contracts and subcontracts 
completed within the last three years and all contracts and 
subcontracts currently in progress.  Contracts listed shall include 
those entered into by the Federal Government. . . ."  Offerors also 
were instructed that "[a]ll proposals shall provide examples of 
offerors' past performance and experience, as a PRIME CONTRACTOR, in 
successfully providing, installing and maintaining service comparable 
to those described in this document.  A representative list of the 
PRIME CONTRACTOR's installed systems (within the continental United 
States) shall be submitted. . . ."  However, the solicitation 
cautioned that the information to be utilized in the evaluation of 
past performance would be obtained not only from the references listed 
in the proposal, but also from "other customers known to the 
Government, including any VA contracts, consumer protection 
organizations, and others who may have useful and relevant 
information."  With respect to cost/price, the RFP required offerors 
to complete on electronic media 56 pages of detailed pricing tables, 
providing "sufficient information on the price schedules so that the 
Government can determine the non-recurring and recurring charge of 
each and every item for service and equipment at any time during the 
contract life."

Five proposals were received by the closing times on August 29, 1996 
(for past performance proposals) and September 13 (for technical and 
price proposals).  Four of the proposals, including NEC's and OBT's, 
were found technically acceptable.  Although OBT's evaluated price 
($4,825,511) as initially calculated was slightly higher ($26,580) 
than NEC's ($4,798,931), OBT's proposal received a higher past 
performance rating (excellent) than NEC's (Good ++), and VA found 
OBT's proposal overall to be most advantageous.[1]  (Based upon its 
reexamination of offerors' pricing schedules, VA now reports that 
OBT's evaluated price ($4,822,231) is $96,117 higher than NEC's 
($4,726,114).)  After learning of the resulting award (without 
discussions) to OBT, NEC and another offeror filed protests with our 
Office challenging the selection decision.  

Upon reviewing the past performance evaluations in the course of 
responding to the protests, the agency discovered that it had 
miscalculated the numerical scores upon which the performance ratings 
were based.  Instead of NEC's proposal being entitled to three 
excellents and two goods in the five past performance subcategories, 
for an overall rating of good++, the agency determined that it was 
entitled to four excellents and a good, for an overall rating of 
excellent.  Likewise, OBT's proposal was found entitled to five 
excellents (instead of four excellents and one good), for a continued 
overall rating of excellent.  Finding the proposals to be essentially 
equal with respect to past performance, VA concluded that it could no 
longer justify the evaluated price premium, however small, associated 
with OBT's proposal, and proposed to make award to NEC.  OBT protests 
this proposed award.

PAST PERFORMANCE

OBT generally asserts that VA improperly inflated NEC's past 
performance score, "attributing an artificial excellence to its 
proposal."  OBT specifically cites a number of alleged deficiencies in 
the past performance evaluation.  For example, OBT notes that when NEC 
included with its proposal completed past performance evaluation 
questionnaires--using the form furnished to offerors as part of the 
solicitation--for each of its references, VA initially failed to 
verify the ratings in the questionnaires with the references in 
question.  OBT also maintains that VA improperly considered NEC's 
performance of 12 contracts in Puerto Rico, including 9 contracts for 
individual branches of a Puerto Rican bank, since the RFP limited the 
contracts to be considered to those "within the continental United 
States," and emphasized past performance on contracts that were 
comparable in size and complexity to the contemplated contract here.  
Finally, OBT also maintains that VA's approach of rounding off rating 
numbers when averaging the performance ratings improperly increased 
NEC's overall score relative to OBT's.

VA's response to OBT's protest has rendered these arguments academic.  
VA has now verified all but one of NEC's references.  The references 
have not only confirmed the past performance ratings in the 
questionnaires but, in several instances, have indicated that they 
would now give NEC a higher rating.  VA also has recalculated the past 
performance scores, omitting NEC's Puerto Rican contracts, not 
rounding off the averages, and including a past performance evaluation 
detailing OBT's poor performance installing a replacement telephone 
system at the VA Medical Center, Coatesville, Pennsylvania (a contract 
not listed in OBT's proposal and not originally considered by VA).  As 
recalculated, NEC's past performance score (3.5184524) now slightly 
exceeds OBT's (3.5086906).  VA considers the recalculated past 
performance ratings to be equal, and OBT has not established 
otherwise.  We thus have no basis to question VA's position in this 
regard.[2]

OBT argues that it was improper for the agency to seek information 
regarding its performance of the Coatesville contract; according to 
the protester, it is improper for an agency to consider new 
information when reevaluating proposals in response to a protest.  OBT 
further asserts VA's consideration of new, negative information with 
respect to OBT's past performance (and VA's failure to take into 
account alleged deficiencies in NEC's price proposal, as discussed 
below), is evidence of bias against OBT.        

This argument is without merit.  The solicitation clearly contemplated 
that VA would consider an offeror's performance on other contracts, 
whether or not the offeror complied with the solicitation requirement 
to list the contracts in its proposal.  The fact that the agency 
implemented its stated intention and considered the Coatesville 
contract only after OBT had filed its protest does not render its 
action improper.  Further, there is no credible evidence in the record 
showing bias against OBT.   In fact, we note that award initially was 
made to OBT; OBT does not explain, nor is it otherwise evident from 
the record, how this is consistent with alleged bias against OBT.  
Thus, we cannot conclude that the VA was biased against OBT.   See 
Areawide Servs. Ltd., B-265650.2, Dec. 28, 1995, 95-2 CPD  para.  287 
(protester must produce credible evidence showing bias, not mere 
inference or supposition, and must demonstrate that the agency bias 
translated into action which unfairly affected the protester's 
competitive position on the procurement in question).

NEC'S PRICE PROPOSAL

OBT argues that discrepancies and deficiencies in NEC's cost/price 
proposal preclude any award to NEC on the basis of its initial 
proposal; according to the protester, these matters can only be 
resolved through discussions with NEC, which would necessitate 
discussions with all offerors.   

This argument is without merit.  OBT asserts that VA is required to 
conduct discussions with NEC because NEC's summation of its line item 
prices differed from the agency's calculation of those prices.  
(Again, while NEC's summation of its line item prices totaled 
$4,898,548, VA, applying the solicitation provisions discussed below, 
evaluated its overall price as $4,726,114; while OBT's summation 
totaled $4,746,282, VA evaluated its overall price as $4,822,231.)  
However, apparently anticipating that discrepancies were likely given 
that offerors were to complete 56 pages of detailed pricing schedules 
with hundreds of prices, VA specifically advised offerors in the 
solicitation that it would conduct an independent recalculation of 
prices based on proposed unit prices.[3]  In this regard, the 
solicitation stated that:

        "[t]he Government employs recomputational methodologies which 
        act upon the raw unit price data to (a) independently generate 
        summary price tables; and (b) perform other pricing analyses."

It further advised that:

        "[t]he unit prices on the price tables shall be the governing 
        factor in determining how to resolve any apparent conflicts 
        between unit prices and offeror computations based upon unit 
        prices."

We think it was clear from these provisions that only the unit prices, 
and not the offerors' summations of their prices, would control for 
evaluation purposes.  As there is no assertion or evidence that the 
discrepancy between NEC's unit pricing and its summation was the 
result of a mistake as to the unit prices, and the protester does not 
challenge the evaluation of NEC's total price as low based on the unit 
prices, the discrepancy in NEC's price summation does not preclude 
award on the basis of NEC's initial proposal.  See GSX Gov't Servs., 
Inc., B-233101, Feb. 9, 1989, 89-1 CPD  para.  137, recon. denied, GSX Gov't 
Servs., Inc.--Recon., B-233101.2,     Mar. 27, 1989, 89-1 CPD  para.  308; 
Holley Elec. Constr. Co., Inc., B-209384, Jan. 31, 1983, 83-1 CPD  para.  
103.

OBT further argues that NEC failed to comply with the solicitation 
requirement to propose basic monthly maintenance (BMM) charges for 
each of the various components of the new telephone system.  Contrary 
to OBT's assertion, however, NEC in fact proposed BMM charges.  
Specifically, NEC, which foresees no BMM costs associated with the 
components in question, entered a price of [DELETED] for nearly all of 
the components.  [DELETED]

OBT asserts that NEC's proposal was rendered unacceptable by its 
pricing of the item for the removal of old telephone cabling, for 
which offerors were to quote a price per foot.  Specifically, NEC 
entered the amount of [DELETED] for the removal of old cabling which, 
in view of the prices previously paid for cable removal, VA determined 
clearly was a lump-sum price.  (VA has verified with NEC that it 
intended a lump-sum price.)  Since the solicitation did not provide 
for inclusion of the cable removal pricing in the evaluation (it 
stated a quantity of 0), VA properly treated this deviation as a minor 
informality which does not preclude award to NEC on the basis of its 
initial proposal.  Federal Acquisition Regulation  sec.  15.607(a) (FAC 
90-31).[4]

The protest is denied.

Comptroller General
of the United States

1. Although OBT's summation of its line item prices ($4,746,282) was 
less than NEC's ($4,898,548), when VA applied solicitation provisions 
(discussed below) providing for an independent recalculation of prices 
based on proposed unit prices, the agency determined that NEC in fact 
had proposed the lowest overall price.

2. According to OBT, "[i]f Coatesville is considered, [NEC] and [OBT] 
have, at worst, an equal past performance rating."

3. In fact, VA's summation of prices differed from that of each of the 
offerors.

4. VA reports that it "cannot make a firm determination of how much 
cable will need to be removed, or for that matter, if any cabling will 
need to be removed."