BNUMBER:  B-275073; B-275073.2
DATE:  January 23, 1997
TITLE:  Rockville Mailing Service, Inc.

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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:Rockville Mailing Service, Inc.

File:     B-275073; B-275073.2

Date:     January 23, 1997

Jeffrey A. Lovitky, Esq., for the protester.
Louis J. Kozlakowski, Jr., Esq., Blum, Yumkas, Mailman, Gutman & 
Denick, P.A., an intervenor.
Lyman Goon, Esq., Social Security Administration, for the agency.
Linda C. Glass, Esq., and Paul I. Lieberman, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protest challenging acceptability of awardee's proposal on the basis 
that awardee cannot fulfill solicitation requirement to obtain 
discounts for  5-digit zip code presorted mail is denied where the 
solicitation does not require 5-digit sorting of mail.

DECISION

Rockville Mailing Service, Inc. (RMS) protests the award of a contract 
to Jetsort Inc. under request for proposals (RFP) No. SSA-RFP-95-2255, 
issued by the Social Security Administration (SSA), for mail sorting 
services.  RMS challenges the technical acceptability of Jetsort's 
proposal.

We deny the protest.

The RFP sought proposals for all services necessary to prepare 
first-class metered mail to qualify for rate discounts under the 
United States Postal Service (USPS) barcoded and presorted first-class 
discount programs.  First-class mail that is presorted may qualify for 
discount rates when specified minimum volumes are met.  In this 
regard, the RFP contemplates that the contractor will commingle the 
SSA's mail with its own sorted first-class mail to qualify for better 
volume rate discounts.  Under the contract, the contractor will pick 
up SSA's first-class mail from the agency's Woodlawn, Maryland 
facility on a daily basis, sort the SSA's mail, add it to the 
contractor's other sorted first-class mail, and then deposit it at the 
post office for delivery.  In order to permit SSA to evaluate the 
estimated volume of first-class mail that each offeror could commingle 
with SSA's first-class mail during sorting to qualify for rate 
discounts, the RFP required offerors to include the average daily 
volume of their current National Distribution Mail (NDM) in their 
technical proposals.

The RFP provided that award would be made on a best value basis, with 
technical factors more important than price.  The solicitation 
contained the following technical evaluation factors and points (with 
a possible total of 100 points):  
(1) understanding of the requirements of the statement of work (SOW) 
(10 points); (2) offeror's technical approach (20 points); (3) 
experience of offeror's proposed technical staff (15 points); (4) 
experience of offeror's proposed management staff (15 points); (5) 
offeror's experience in barcoding and presort operations to include 
volumes of mail handled, amount of experience and qualification rates 
achieved in the barcoding/presorting of national distribution mail (25 
points); and (6) facilities and equipment (15 points).

The agency received five proposals in response to the initial 
solicitation and four  best and final offers (BAFO), including those 
submitted by RMS and Jetsort.  The source selection official (SSO) 
determined that the technical proposals of Jetsort, RMS and another 
offeror were technically equivalent and recommended award to RMS based 
on its low price.  Award was made to RMS on September 29, 1995.  

During an on-site inspection of RMS' facilities after award, the 
agency noted that RMS' volume of first-class mail appeared to be below 
the level represented in its proposal.  The agency concluded that RMS 
might have misinterpreted the requirement, that the RFP might have 
been ambiguous, and that reopening discussions and reevaluating 
proposals was necessary.  RMS protested SSA's decision to reopen 
negotiations; we denied the protest.  Rockville Mailing Serv., Inc., 
B-270161.2, Apr. 10, 1996, 96-1 CPD  para.  184.  

Thereafter, on April 24, 1996, amendment No. 6 was issued advising the 
four original offerors who submitted BAFOs that negotiations were 
reopened.  All four offerors submitted revised proposals by the May 28 
closing date.  The revised proposals were scored as follows:

OFFEROR              TECHNICAL  SCORE     PRICE

Jetsort, Inc.                     [deleted]$ [deleted]

OFFEROR A                         [deleted]$ [deleted]

RMS                               [deleted]$ [deleted]

OFFEROR B                         [deleted]$ [deleted]           
Negotiations were conducted and on July 22 offerors submitted their 
BAFOs, which   received the following ratings:
                                  
OFFEROR              TECHNICAL  SCORE     PRICE

Jetsort, Inc.                     100     $  684,954.00

OFFEROR A                         [deleted$ [deleted]

RMS                                 94    $1,427,012.65 
Based on its high technical score and low price, award was made to 
Jetsort on September 20.  This protest followed.

RMS essentially argues that Jetsort's proposal should have been 
rejected for failure to comply with what RMS considers a mandatory 
requirement to provide 5-digit zip code sorting and was improperly 
evaluated as though Jetsort could qualify for the 5-digit rate. 

In a negotiated procurement, any proposal that fails to conform to 
material terms and conditions of the solicitation should be considered 
unacceptable and may not form the basis for an award.  National 
Medical Staffing, Inc.; PRS Consultants, Inc., 69 Comp. Gen. 500 
(1990), 90-1 CPD  para.  530.  Where an evaluation is challenged, we will 
examine the agency's evaluation to ensure that it was reasonable and 
consistent with the evaluation criteria and applicable statutes and 
regulations since the relative merit of competing proposals is 
primarily a matter of administrative discretion.  Information Sys. & 
Networks Corp., 69 Comp. Gen. 284 (1990), 90-1 CPD  para.  203.  We have 
reviewed Jetsort's proposal and the agency's evaluation and find that 
SSA reasonably evaluated Jetsort's proposal.

With respect to the 5-digit zip code sorting the RFP provided the 
following:

     "Mail qualification at the automation 5-digit rate is not an SSA 
     requirement.  However, the contractor will be paid a fee for any 
     pieces qualifying for the automation 5-digit discount, because 
     the pieces qualified beyond the automation 3-digit level . . . .  
     The additional discount that the contractor receives from USPS 
     for SSA mail that qualifies at the automation 5-digit rate is 
     expected to be returned to SSA."

From this language, it is clear, contrary to the protester's 
allegation, that the RFP does not require that offerors provide SSA 
with the 5-digit zip code sorting of mail and the related discount.  
The only requirement is that the agency receive the benefit of the 
5-digit rate if it is available to the contractor.  Consequently, 
there is simply no basis for rejection of Jetsort's proposal for 
failure to provide a 5-digit rate.  

With respect to the allegation that Jetsort's proposal received 
inappropriate evaluation credit, the RFP provided that offeror's 
experience in barcoding and presort operations would be evaluated to 
include "average daily qualification percentages achieved at the 
3-digit barcoded discount rate (and 5-digit barcoded discount rate if 
applicable)."  RMS maintains that Jetsort received inappropriate 
evaluation credit because it agreed to return the additional .016 
discount for any mail qualifying for the 5-digit zip code discount.  
RMS takes the position that Jetsort is unable to claim such a discount 
under applicable postal service regulations.  

RMS has misinterpreted the record in this regard.  While Jetsort 
included information in its technical proposal regarding its prior 
experience in 5-digit zip code sorting, as explained above, the RFP 
did not require 5-digit zip code sorting and it is clear from the 
record that Jetsort's proposal was evaluated solely on its experience 
in 3-digit sorting operations.  If Jetsort were to qualify mail at the 
5-digit rate, only then would there be an RFP requirement to pass on a 
refund to SSA.  Jetsort's agreement to return the additional .016 
discount for any mail qualifying at the 5-digit zip code qualification 
rate simply reflects its assent to the RFP requirement pertaining to a 
situation where an offeror has the ability to receive the discount 
from USPS, and does not reflect any claim of qualifying for the 
discount.  Appropriately in its evaluation of Jetsort's proposal, the 
agency gave no credit for providing 5-digit zip code sorting.  

In a supplemental protest, RMS alleges that Jetsort's proposal should 
have also been rejected because Jetsort stated that mail with 
insufficient postage would be returned to SSA.  RMS maintains that the 
RFP requires the contractor to pay the USPS, at the time of mailing, 
any postage in excess of the 3-digit rate affixed to SSA mail. 

The agency maintains that the protester has simply misconstrued the 
requirement of the solicitation in arguing that the RFP requires 
treating mail with insufficient postage in the same fashion as sorted 
mail on which residual postage is due.  According to the agency, the 
requirement to which RMS refers applies to residual postage, not mail 
with insufficient postage.  Residual postage refers to the situation 
where some mail does not qualify for the 3-digit sorting discount, but 
instead qualifies for intermediate higher postal rate programs or at 
full rate, and additional postage will be due on this mail when the 
contractor delivers the sorted mail to the post office.  The RFP 
assigns the contractor the daily responsibility for initially paying 
the residual postage to the USPS with subsequent reimbursement by SSA.  
Insufficient postage refers to metered mail which, through 
inadvertence or error during the metering process, is somehow 
incorrectly metered or which has no postage meter marking at all.  The 
agency takes the position that Jetsort's statement that it would 
return mail with insufficient postage to the agency is completely 
consistent with the RFP requirement.  We agree.

With respect to residual mail, the RFP specifically provides the 
following:

     "The additional postage required on SSA mail that does not 
     qualify for the rate at which SSA has metered it, will be paid to 
     USPS by the contractor at the time of mailing and billed to SSA 
     for 
     reimbursement  . . . .  The contractor shall be reimbursed for 
     the additional postage for SSA mail that the contractor paid to 
     USPS at the time of mailing.  This postage will be the difference 
     between the rates metered on the mail and rates at which the mail 
     was accepted by USPS . . . .  The only mail to be returned to SSA 
     is listed in Part 1, Section C-1E (15).)"  

Under pertinent parts of Section C-1E(15) the RFP states: 

     "Return to the SSA mailroom in the NCC any unmailable or 
     unpresorted pieces, such as, but not limited to, misdated mail, 
     pieces with insufficient presort rate postage." 

In our view, the agency reasonably concluded that Jetsort's statement 
refers to the RFP requirement concerning mail with insufficient 
postage, the returning of which to the agency is compliant with the 
solicitation requirements.[1]

The protest is denied. 

Comptroller General 
of the United States  

1. RMS raised several allegations in its supplemental protest which it 
did not address in its comments to the agency supplemental report, 
including that Jetsort's proposal should be rejected because it failed 
to indicate acceptance of the wage rate determination contained in the 
solicitation and that Jetsort's pricing was impermissibly unbalanced.  
The agency responded to these issues in its supplemental agency 
report; since RMS, in its comments filed on the supplement report, did 
not rebut the agency's position on these matters, we view these issues 
as abandoned.  See Datum Timing, Div. of Datum, Inc., B-254493, Dec. 
17, 1993, 93-2 CPD  para.  328.