BNUMBER: B-276030.2
DATE: September 12, 1997
TITLE: Spar Applied Systems--Declaration of Entitlement, B-276030.2,
September 12, 1997
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Matter of:Spar Applied Systems--Declaration of Entitlement
File: B-276030.2
Date:September 12, 1997
Rodney A. Grandon, Esq., Patton Boggs, for the requestor.
Michael S. Roys, Esq., Department of the Navy, for the agency.
John L. Formica, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Request for recommendation that costs of filing and pursuing protest
be reimbursed is denied, even though the agency decides to take
corrective action in response to the protest, where protest that the
terms of a solicitation were ambiguous was not clearly meritorious.
DECISION
Spar Applied Systems requests that we recommend that it be reimbursed
the costs of filing and pursuing its protest against the terms of
request for proposals (RFP) No. N65236-97-0301, issued by the
Department of the Navy for a Scaled Integrated Voice Communications
System (SIVCS).
We deny the request.
The RFP provided for the award of a contract for the design,
fabrication, installation support, and test of a SIVCS. The SIVCS
will be installed on Navy aircraft carriers and used as a prototype
for the next generation of Navy integrated interior voice, video, and
data communication systems. The RFP informed offerors that the
statement of work (SOW) and an "attached specification . . . form the
definition of the Navy's intent to procure a hardware set that
addresses and improves the ever-growing problem of voice communication
and information flow within and from a U.S. Navy attack carrier." The
RFP added that the purpose of the SOW
is to articulate a statement of the problem the Navy is
attempting to address and to define a set of parameters which
define key operational needs. The attached specification has
been constructed to represent one possible approach that may
satisfy those needs. Within this context the Navy expects that
offerors will propose alternative technological and business
approaches that respond to the perception of the Navy's needs
with imagination and innovation. Multiple proposals from
individual vendors are encouraged.
The RFP included the "attached specification" not as an attachment,
but as a 31-page section of the SOW.
On December 12, the agency issued amendment No. 0001 to the RFP, which
deleted the specification from the SOW and added it to the RFP as
Exhibit A with the following notation:
This specification is not a mandatory specification for this
procurement. It is included for information only, as an example
of one possible way to solve the problem. Portions of this
specification are referred to by the [SOW].
On January 17, 1997, the agency issued amendment No. 0003 to the RFP,
which, among other things, "recognized that different vendors may
propose very different designs based on differing architectures,
interface details, etc.," and established a "strawman" system "in
order to provide a common basis for price comparison." Specifically,
amendment No. 0003 requested that "[f]or purposes of price comparison
only, offerors shall submit an itemized estimate for a total of three
complete systems," and provided list of components that each system
was to consist of. On January 20, the agency issued amendment No.
0004 to the RFP, which modified one aspect of the RFP's "strawman
system," and one aspect of the evaluation scheme.
Spar filed its protest against the terms of the RFP with our Office on
January 23, 1 day prior to the January 24 closing date for receipt of
initial proposals. In its protest Spar asserted:
The fundamental problem with this procurement is that the Navy
has created an internally inconsistent set of "rules" which
offerors are to follow in responding to the RFP. Many provisions
of the RFP indicate that the technical requirement is intended to
be a performance/functional specification under which offerors
have wide latitude to develop solutions. Other portions of the
RFP convey the opposite message, that is, that there are specific
design-type features which, if not included in the offeror's
proposed solution, will result in the Navy determining that the
technical solution is unacceptable.
Spar provided examples of provisions in the RFP which, in its view,
supported a "flexible technical approach," and others which it
asserted were "mandatory design-type requirements." For example, Spar
pointed out that the RFP provided that "[t]he Government will award a
contract resulting from this solicitation to the responsible offeror
whose offer conforming to the solicitation will be most advantageous
to the Government, price and other factors considered," and complained
that this provision "requires that proposals conform to the entire
solicitation, without permitting exceptions for imaginative or
innovative solutions that may vary from mandatory requirements
scattered throughout the RFP." Spar concluded that, in its view, the
"fundamental ambiguity in the RFP lies in the relationship between the
Exhibit A specification, the SOW, and the evaluation methodology."
The agency explained in its report on Spar's protest that it
[had] endeavored to provide offerors with wide latitude as to how
they construct their solution to the communication needs/issues
raised in the SOW. However, at the same time the government set
forth certain, limited, minimum parameters . . . which must be
met by the proposed system(s) in order for it to operate with
current communication equipment on board any naval ship. A
system incapable of dealing with current communication equipment
is simply not a viable option.
The agency asserted that Spar's argument that the solicitation was
ambiguous was "premised on a selective look at the solicitation [and]
taking material out of context." The agency asserted that the RFP, as
amended and read as a whole, was simply not susceptible to two or more
reasonable interpretations, and thus was not ambiguous. The agency
pointed to numerous sections, statements, and provisions in the RFP
which it argued clearly established the relationship between the
Exhibit A specification, the SOW, and the evaluation methodology. For
example, the agency pointed out that section 3.1 of the specification
provided that the specification was "only one of the many possible
architectural and conceptual approaches to the task," and the RFP
specifically stated that section 4 of the specification was "provided
as guidance only, to indicate test procedures which may be necessary
to conclusively demonstrate compliance with performance requirements."
The agency did note that in preparing its report it had determined
that two subsections of the RFP "may raise some confusion about
pricing," and that it would therefore issue an amendment to delete the
two referenced subsections from the RFP.
Spar maintained in its comments on the report that it was confused as
to the relationship between those sections of the RFP which, as stated
in the solicitation and explained by the agency in its report,
appeared to set forth "minimum parameters which must be met by the
proposed system(s)" and other assertedly conflicting statements, most
notably that the Exhibit A specification was for "information only, as
an example of one possible way to solve the problem."
After Spar filed its comments on the agency report with our Office,
the agency issued a draft amendment to the solicitation which deleted
two of the RFP's subsections concerning pricing. This draft amendment
also addressed a number of other sections of the RFP, and the agency
invited all firms which had submitted proposals in response to the
solicitation, including Spar, to submit comments on the draft
amendment. These comments were received, and the final version of the
amendment was issued on April 15 as amendment No. 0005.
Our Office requested and received Spar's comments on the draft and
final versions of the amendment. Consistent with our earlier
representations to the parties, our Office, on April 18, issued a
"Confirmation of Hearing/Conference." This notice informed the
parties that a "hearing/conference" would be conducted at GAO on April
21 in connection with Spar's protest. Although the hearing/conference
was convened in GAO's hearing room, and a video transcript of the
proceedings was prepared, the parties and the GAO hearing official
agreed that the matter would initially proceed using alternative
dispute resolution (ADR) techniques, with the proceedings reverting to
a formal hearing should the attempt at ADR fail. Because the parties
were able to resolve the protest to their mutual satisfaction through
the use of ADR techniques, with the agency agreeing to amend the RFP
to address the protester's concerns, a formal hearing was not convened
and Spar's protest was dismissed by our Office as academic on April
22.
Spar requests that we recommend that it be reimbursed the reasonable
cost of filing and pursuing its protest, including reasonable
attorneys' fees.
Under the Competition in Contracting Act of 1984, our Office may
recommend that protest costs be reimbursed only where we find that an
agency's action violated a
procurement statute or regulation. 31 U.S.C. sec. 3554(c)(1) (1994).
Our Bid Protest Regulations provide that where the contracting agency
decides to take corrective action in response to a protest, we may
recommend that the protester be reimbursed the costs of filing and
pursuing its protest, including reasonable attorneys' fees. 4 C.F.R. sec.
21.8(e) (1997). This does not mean that costs should be reimbursed in
every case in which an agency decides to take corrective action;
rather, a protester should be reimbursed its costs where an agency
unduly delayed its decision to take corrective action in the face of a
clearly meritorious protest. Griner's-A-One Pipeline Servs.,
Inc.--Entitlement to Costs, B-255078.3, July 22, 1994, 94-2 CPD para. 41
at 5; LB&M Assocs., Inc.,--Entitlement to Costs, B-256053.4, Oct. 12,
1994, 94-2 CPD para. 135 at 4. Thus, as a prerequisite to our
recommending that costs be reimbursed where a protest has been settled
by corrective action, not only must the protest have been meritorious,
but it also must have been clearly meritorious, i.e., not a close
question. J.F. Taylor, Inc.--Entitlement to Costs, B-266039.3, July
5, 1996, 96-2 CPD para. 5 at 3; Baxter Healthcare Corp.--Entitlement to
Costs, B-259811.3, Oct. 16, 1995, 95-2 CPD para. 174 at 4-5; GVC
Cos.--Entitlement to Costs, B-254670.4, May 3, 1994, 94-1 CPD para. 292 at
3. A protest is "clearly meritorious" when a reasonable agency
inquiry into the protester's allegations would show facts disclosing
the absence of a defensible legal position. Department of the
Army--Recon., B-270860.5, July 18, 1996, 96-2 CPD para. 23 at 3; Tuscon
Mobilephone, Inc.--Request for Entitlement, 73 Comp. Gen. 71, 73
(1994), 94-1 CPD para. 12 at 4. The mere fact that an agency decides to
take corrective action does not establish that a statute or regulation
clearly has been violated. Network Software Assocs.,
Inc.--Entitlement to Costs, B-250030.4, Jan. 15, 1993, 93-1 CPD para. 46
at 3.
Here, we find that Spar's protest does not provide a basis for
recommending that it be reimbursed for the costs of filing and
pursuing its protest. Spar advances one interpretation of the
solicitation--that it did not "clearly differentiate between the
mandatory elements the offerors had to satisfy in their proposal and
the permissive or desirable elements the Navy preferred," and was thus
ambiguous. The agency advances another--that the solicitation, read
as a whole, provided offerors with wide latitude as to how to
construct their respective solutions to the communication needs/issues
raised in the SOW, while clearly setting forth certain limited,
minimum parameters that the proposed systems must meet in order for
the systems to operate with the Navy's current communication
equipment.
Which party's position was correct was not readily apparent, and
reaching a conclusion in that regard would have required substantial
further analysis, as indicated, in part, by our Office's scheduling of
a hearing/conference to complete and clarify the protest record.[1]
As such, determining the propriety of the contested RFP provisions
was, in our view, and contrary to the respective positions of the
agency and protester, a close question. Spar's protest was therefore
not clearly meritorious and does not warrant a recommendation that
Spar be reimbursed the costs of filing and pursuing its protest.
The request that we recommend the reimbursement of costs is denied.
Comptroller General
of the United States
1. As indicated previously, a formal hearing was not held as the
parties were able to resolve the protest to their mutual satisfaction
through the use of ADR techniques.