BNUMBER: B-277385
DATE: October 8, 1997
TITLE: International Data Systems, Inc., B-277385, October 8, 1997
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Matter of:International Data Systems, Inc.
File: B-277385
Date:October 8, 1997
Al Barlas for the protester.
Sherry Kaswell, Esq., Department of the Interior, for the agency.
Katherine Riback, Esq., and Paul Lieberman, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Where agency permitted competitive range offerors to submit
information to clarify ambiguities in their proposals and requested
responses in the form of best and final offers (BAFO), the agency
conducted discussions; these discussions were not meaningful where the
agency failed to advise the protester of its concern regarding the
protester's proposed noncompliant delivery schedule which, while it
was readily correctable, provided the basis to reject the protester's
BAFO as technically unacceptable.
2. Where the agency's needs regarding the type of processor that it
required changed after receipt of proposals, the agency improperly
failed to issue an amendment alerting offerors of the revised
requirement and providing all offerors an opportunity to submit
proposals based on the agency's actual requirement.
DECISION
International Data Systems, Inc. (IDS) protests the award of a
contract to Applied Computer Technology (ACT) by the Department of the
Interior under request for proposals (RFP) No. 143868-RFP97-12097.
IDS primarily objects that the agency failed to conduct meaningful
discussions.
We sustain the protest.
BACKGROUND
The agency issued a combined Commerce Business Daily synopsis and
solicitation for personal computers which was published on March 21,
1997. The solicitation contemplated the award of a fixed-price,
indefinite delivery/indefinite quantity contract for 6 months. The
RFP provided that award would be made to the responsible offeror whose
proposal represented the best value to the government, taking into
consideration price, conformance with technical specifications, and
past performance, with technical considerations being more important
than price. The solicitation stated that the agency reserved the
right to award the contract to other than the lowest-price offeror and
provided that the agency "intends to evaluate proposals and award a
contract without discussions with offerors (except communications
conducted for the purpose of minor clarification)." The agency issued
one amendment on March 28.
The agency received 42 offers by the April 17 due date. A technical
evaluation panel (TEP) evaluated the advantages and disadvantages of
each proposal, as a result of which seven proposals were "determined
to meet or exceed [the agency's] minimum specifications in all
critical elements, but each had not addressed some minor issues," and
were included in the competitive range. The agency sent each of the
seven competitive range offerors a written request for clarifications,
requiring each offeror to submit the additional requested information
in the form of a best and final offer (BAFO). The TEP then ranked the
seven BAFOs, weighing technical merit and past performance each at 40
percent, and price at 20 percent. This evaluation resulted in the IDS
proposal being ranked first, with ACT's proposal ranked second. ACT
proposed as an alternate a Pentium II processor, in addition to the
Pentium Pro specified in the solicitation.[1]
The contracting officer then reviewed the IDS proposal in greater
detail and noticed that IDS offered a 30- to 45-day delivery schedule,
rather than the 15-day delivery period required by the solicitation.
The contracting officer stated that she had earlier rejected other
proposals that failed to meet the 15-day delivery requirement; she
therefore felt compelled to similarly find the IDS proposal ineligible
for award based on noncompliance with the required delivery schedule.
Moreover, believing that she had up to that point merely obtained
clarifications and had not conducted discussions, she decided not to
advise IDS about the problem with its proposed delivery schedule, in
order to avoid holding discussions, which she feared would delay the
procurement.
The agency found that ACT's proposal represented the best value to the
government and awarded the contract to that firm on June 19. In ACT's
contract, the agency added a line item that did not appear in the
original solicitation for the Pentium II systems that ACT offered in
its proposal. While ACT failed to acknowledge the one amendment that
was issued in connection with this solicitation, the agency waived
this omission as a minor informality. IDS protested to our Office,
whereupon the agency determined that it was in the best interests of
the government to continue with performance, notwithstanding the
pendency of the protest. See 31 U.S.C. sec. 3553(d)(3)(C)(i)(I) (1994).
DISCUSSION
IDS asserts that the agency's failure to advise it of the agency's
concerns regarding the IDS delivery schedule constituted a failure to
conduct meaningful discussions and that, had the matter been brought
to its attention, the firm could have easily corrected what it
describes as a typographical error regarding the delivery schedule.
The agency takes the position that the communications between it and
the seven competitive range offerors were clarifications and not
discussions. In addition, the agency contends that, due to the
unacceptable delivery schedule in its proposal, that proposal should
not have been included in the competitive range, and IDS therefore was
not entitled to discussions at all, so that any deficiency in the
communications with IDS would be immaterial.
Federal Acquisition Regulation (FAR) sec. 15.610(a) (1997) permits
contracting agencies to make award on the basis of initial proposals
without discussions, where the solicitation, as here, announces this
possibility. As set forth in FAR sec. 15.601; the difference between
clarifications and discussions is as follows:
'Clarification' . . . means communication with an offeror for the
sole purpose of eliminating minor irregularities, informalities,
or apparent clerical mistakes in the proposal. . . . Unlike
discussion . . ., clarification does not give the offeror an
opportunity to revise or modify its proposal, except to the
extent that correction of apparent clerical mistakes results in a
revision.
'Discussion' . . . means any oral or written communication
between the Government and an offeror (other than communications
conducted for the purpose of minor clarification) whether or not
initiated by the Government, that- (a) [i]nvolves information
essential for determining the acceptability of a proposal; or (b)
[p]rovides the offeror an opportunity to revise or modify its
proposal.
It is the actions of the parties that determine whether discussions
have been held, and not merely the characterization of the
communications by the agency. Raytheon Co., B-261959.3, Jan. 23,
1996, 96-1 CPD para. 37 at 11; ABT Assocs., Inc.,
B-196365, May 27, 1980, 80-1 CPD para. 362 at 5. The acid test of whether
discussions have been held is whether it can be said that an offeror
was provided the opportunity to revise or modify its proposal. 51
Comp. Gen. 479, 481 (1972); New Hampshire-Vermont Health Serv., 57
Comp. Gen. 347, 353 (1978), 78-1 CPD para. 202 at 9.
Here, the communication with the seven competitive range offerors
clearly constituted discussions, both because the communications
concerned information essential for determining the acceptability of
their proposals and because the offerors were given an opportunity to
submit BAFOs modifying their proposals. The communications would
constitute discussions even if the information provided by the
competitive range offerors served only to resolve ambiguities. See
Integrated Sys. Group, B-272336, B-272336.2, Sept. 27, 1996, 96-2 CPD para.
144 at 6.
We next consider whether the agency was obligated to raise its concern
regarding the delivery schedule in the IDS proposal during
discussions. When discussions are held, they are required to be
meaningful. See Fidelity Techs. Corp., B-276425, May 30, 1997, 97-1
CPD para. 197 at 6; Ashland Sales & Serv., Inc., B-255159, Feb. 14, 1994,
94-1 CPD para. 108 at 3. Discussions cannot be meaningful unless they
lead an offeror into those aspects of its proposal that must be
addressed in order for it to have a reasonable chance of being
selected for award. Voith Hydro, Inc., B-277051, Aug. 22, 1997, 97-2
CPD para. ___; Global Indus., Inc., B-270592.2 et al., Mar. 29, 1996, 96-2
CPD para. 85 at 4-5; Eldyne, Inc., B-250158 et al., Jan. 14, 1993, 93-1
CPD para. 430 at 7, recon. denied, Department of the Navy--Recon., 72
Comp. Gen. 221 (1993), 93-1 CPD para. 422. Under this standard, Interior
was required to advise IDS of the agency's concerns with its delivery
schedule so that IDS would have an opportunity to revise it and
resolve this readily correctable matter. We therefore conclude that
the agency failed to afford IDS meaningful discussions.
We also note that the contract that was awarded to ACT by Interior
contained a line item for the Pentium II processor that was not in the
original solicitation. ACT's proposal offered two configurations, one
was the Pentium Pro processor required by the solicitation, and the
second configuration proposed the Pentium II. ACT's proposal "urged"
the agency to "strongly consider" the Pentium II technology because
the RFP's specifications state that the replacement parts and support
must be available for the lifetime of the system and Intel had
indicated that the required Pentium Pro would be phased out at the end
of 1997. ACT further advised the agency that Intel had announced that
the Pentium II was the scheduled replacement for the Pentium Pro. The
agency was receptive to ACT's "urging," and cites as its reason for
including the Pentium II line item in ACT's contract that the Pentium
II is the newest technology available, and that it was not available
when the solicitation was issued. The agency also stated that many
users that were scheduled to receive the Pentium Pro in the computer
upgrade have expressed a preference for receiving the Pentium II
instead.
Generally, where an agency's requirements change after a solicitation
has been issued, it must issue an amendment to notify offerors of the
changed requirements and afford them an opportunity to respond. FAR sec.
15.606(a); Symetrics Indus., Inc., B-274246.3 et al., Aug. 20, 1997,
97-2 CPD para. 59 at 6. The purpose of the rule is to avoid award
decisions not based on the agency's most current view of its minimum
needs. See N.V. Philips Gloellampenfabriken, B-207485.3, May 3, 1983,
83-1 CPD para. 467 at 12. Agencies must amend solicitations to reflect a
significant change in the government's requirements even after the
submission of BAFOs, up until the time of award. See United Tel. Co.
of the Northwest, B-246977, Apr. 20, 1992, 92-1 CPD para. 374 at 7-9,
aff'd, Department of Energy et al., B-246977.2 et al., July 14, 1992,
92-2 CPD para. 20. Amending the solicitation provides offerors an
opportunity to submit revised proposals on a common basis reflecting
the agency's actual requirements. Dairy Maid Dairy, Inc., B-251758.3
et al., May 24, 1993, 93-1 CPD para. 404 at 7-9.
Here, while the RFP specified a Pentium Pro processor, it appears that
the agency determined during the course of the procurement that the
Pentium II represented its needs and should be incorporated into the
contract. To the extent that the agency's needs changed to include
the Pentium II, the agency was required to issue an amendment
permitting all offerors an opportunity to submit revised proposals on
a common basis reflecting the agency's actual needs.
RECOMMENDATION
Where an agency determines that it is in the best interest of the
government to proceed with contract performance in the face of a
protest in our Office, and we sustain the protest, the Competition in
Contracting Act of 1984, 31 U.S.C. sec. 3554(b)(2), calls for us to make
our recommendations for corrective action without regard to any cost
or disruption from termination, recompeting, or reawarding the
contract. In this case, the agency reports that all of the required
equipment has been delivered and the contract fully performed. Under
these circumstances, corrective action is not available. See Bosco
Contracting, Inc., B-270366, Mar. 4, 1996, 96-1 CPD para. 140 at 4. We
therefore recommend that IDS be reimbursed for its proposal
preparation costs as well as the reasonable costs of filing and
pursing this protest. 4 C.F.R. sec. 21.8(d)(1), (2) (1997). In
accordance with 4 C.F.R. sec. 21.8(f)(1), The protester's certified claim
for such costs, detailing the time expended and the costs incurred,
must be submitted directly to the agency within 60 days after receipt
of this decision.
The protest is sustained.
Comptroller General
of the United States
1. The contracting officer stated that the Pentium II offered by ACT
was considered "state of the art."