BNUMBER:  B-278030; B-278030.2 
DATE:  December 19, 1997
TITLE: Southern Technologies, Inc., B-278030; B-278030.2, December
19, 1997
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Matter of:Southern Technologies, Inc.

File:     B-278030; B-278030.2

Date:December 19, 1997

James V. Etscorn, Esq., Baker & Hostetler, for the protester.
Charles G. Lill for Frank Lill & Son, Inc., an intervenor.
Ann Giddings, Esq., and Lis B. Young, Esq., Naval Facilities 
Engineering Command, for the agency.
Jennifer Westfall-McGrail, Esq., and Christine S. Melody, Esq., Office 
of the General Counsel, GAO, participated in the preparation of the 
decision.

DIGEST

Protester's objection to corrective action proposed by contracting 
agency in response to protest--i.e., paying protester's proposal 
preparation costs--is without merit where, although agency 
acknowledges that the solicitation specifications were misleading, 
agency demonstrates that, due to urgency of the requirement, alternate 
corrective action requested by protester--recompeting with revised 
specifications--is not feasible.

DECISION

Southern Technologies, Inc. objects to the corrective action proposed 
by the Department of the Navy in response to Southern's protest of the 
rejection of its proposal under request for proposals (RFP) No. 
N62477-97-R-0041.  The Navy decided not to reopen the competition, as 
requested by Southern, but instead to pay Southern its proposal 
preparation costs as compensation for the agency's improper actions in 
conducting the procurement.  The protester contends that the agency 
should reopen the competition since reopening is a practicable, and 
more meaningful, remedy for the impropriety that occurred.

We deny the protest in part and dismiss it in part.

BACKGROUND

The RFP, which was issued on May 28, 1997, solicited proposals for 
power plant improvements at the Goddard Power Plant in Indian Head, 
Maryland.  The purpose of the improvements is to bring the plant, 
which is a major emitter of nitrogen oxides (NOx), into compliance 
with emission standards set by the state of Maryland.  Work to be 
performed includes the installation of low NOx coal/oil fired burners 
with combustion controls on each of the plant's three boilers, plant 
controls, a burner management system, and incidental related work.

The bid schedule divided the work among a base item and two options.  
The base item encompassed the entire project, with the exception of 
the work described in the option items.  Option 1 was for plant 
controls, and option 2 was for the work involving the second and third 
boilers.

The solicitation provided for the evaluation of proposals on the basis 
of price, technical/management factors, and past performance, with 
price carrying greater weight in the selection process than the latter 
two factors.  Technical/management factors included relevant 
experience, technical methodology, project staffing, work plan, and 
subcontracting plan.  Under the technical methodology subfactor, 
offerors were to describe the burners that they intended to install 
and to submit documentation demonstrating the burners' compliance with 
performance criteria identified in the RFP.

Six offerors, including Southern, submitted proposals by the July 25 
closing date.  The technical evaluation panel determined that the 
protester's proposal was technically unacceptable because Southern had 
proposed burners employing over-fire air (OFA) combustion, a 
technology that the panel considered to be unduly risky and thus 
unacceptable.  Another proposal was rejected as technically 
unacceptable for proposing the same technology.[1]  The four remaining 
proposals were included in the competitive range.

After a pre-award debriefing at which it was informed of the basis for 
the exclusion of its proposal from the competitive range, Southern 
protested to our Office, arguing that the OFA technology that it had 
proposed was consistent with the solicitation's requirements and that 
its proposal ought therefore not to have been excluded from further 
consideration.[2]

The Navy responded that its technical experts had considered and 
rejected OFA as an acceptable compliance technology prior to issuance 
of the RFP.  The agency conceded that the RFP's specifications, as 
written, could have misled offerors regarding the acceptability of OFA 
technology, however, and accordingly, proposed to take corrective 
action.  The Navy maintained that the corrective action requested by 
the protester--i.e., inclusion of its proposal in the competitive 
range--was not appropriate, however, because Southern would have to 
rewrite its proposal using a different technical approach to make the 
proposal susceptible of award.  The Navy therefore proposed instead to 
reimburse Southern for its proposal preparation expenses.  The agency 
requested that we dismiss Southern's protest on the grounds that it 
was offering the protester appropriate corrective action.

We declined to dismiss on the basis of the agency's request since, as 
we informed the parties, we did not think that the Navy had 
demonstrated that payment of proposal preparation costs was the only 
appropriate corrective action available.  We explained that although, 
as a general rule, a proposal should not be included in the 
competitive range if it would have to be substantially rewritten to 
become technically acceptable, that rule did not govern where the 
agency conceded that the specifications were misleading and required 
revision--and the reasons for the proposal's exclusion related 
directly to the misleading provisions that were to be rewritten.  In 
such circumstances, we noted, unless precluded by the urgency of the 
requirement, the agency should amend the solicitation to reflect its 
needs accurately, and then reopen the competition and allow offerors 
to submit new or revised proposals on the basis of the revised 
requirements.   See Federal Acquisition Regulation (FAR)  sec.  15.606 
(June 1997); Puerto Rico Marine Management, Inc., 72 Comp. Gen. 42, 48 
(1992), 92-2 CPD  para.  275 at 8.

The Navy responded with a supplemental submission arguing that the 
urgency of the requirement did indeed preclude a reopening of the 
competition for the base and optional items.  The Navy explained that 
the Maryland permit under which the Goddard Power Plant operates 
requires the installation of low NOx burners on one of the plant's 
three boilers by March 1, 1998,[3] in time for the 1998 summer ozone 
season.  The agency asserted that it will be unable to comply with 
this deadline if the base item is recompeted since it will take the 
contractor 4 to 6 months to procure the burners, which must be 
customized to meet the particular requirements of the Goddard plant, 
and 3 months to install them.  The Navy argued that a recompetition of 
option 2 (i.e., the work on the second and third boilers) was 
impracticable[4] since a new solicitation could not be issued until 
July 1998, after installation and baseline testing of the first boiler 
had been completed; it would then take a minimum of 120 days for the 
agency to conduct the reprocurement, 4-6 months for the contractor to 
secure the required parts, and 3 months for the contractor to install 
them, meaning that a second boiler with low NOx burners would not be 
available for operation until July 1999.  As a result, the first 
boiler would have to remain in operation longer than the 1 year that 
the agency views as acceptable.[5]

Southern argues that, contrary to the agency's representation, a 
reopening of the competition for the solicitation in its entirety is 
both feasible and appropriate.  The protester proposes, as alternative 
corrective action, that the agency leave the work on the burners in 
place with Lill, while recompeting all of the other work in a 
competition from which Lill would be excluded.

ANALYSIS

Where a protester objects to the corrective action proposed by an 
agency to remedy a procurement impropriety and argues that alternative 
corrective action should be taken, we will examine the record to 
determine which corrective action is appropriate under the 
circumstances of the case. See Henkels & McCoy, Inc., B-250875 et al., 
Feb. 24, 1993, 93-1 CPD  para.  174 at 3; Power Dynatec Corp., B-236896, 
Dec. 6, 1989, 89-2 CPD  para.  522, aff'd, B-236896.2, Apr. 20, 1990, 90-1 
CPD  para.  404.  Here, as discussed below, we find that neither of the 
remedies requested by the protester is feasible; we thus conclude that 
the corrective action proposed by the agency--i.e., payment of the 
protester's proposal preparation costs--is appropriate.[6]

The Navy has demonstrated that a recompetition of the solicitation in 
its entirety is impracticable since delay in the award of the base 
item would mean that the plant would not have a boiler with a low NOx 
burner available for operation during the peak ozone months of 1998, 
in violation of the terms of the plant's operating permit.[7]  
Further, carving out a portion of the work for Lill and recompeting 
the rest in a competition from which Lill would be excluded is not, in 
our view, an appropriate remedy since the agency has a legitimate 
interest in retaining the possibility of overall control of the 
project remaining in the hands of a single contractor.  In addition, 
it would be inconsistent with the statutory mandate for full and open 
competition for us to recommend that Lill be excluded from a 
recompetition.  See 10 U.S.C.  sec.  2305(a)(1)(A) (1994).  

We therefore agree with the agency that there is no meaningful 
remedial action that it can take here and that the agency's decision 
to award the protester its proposal preparation costs constitutes 
appropriate corrective action in response to the protest.  See IRT 
Corp., B-246991, Apr. 22, 1992, 92-1 CPD  para.  378 at 7.  Because the 
agency is taking appropriate corrective action, Southern's underlying 
protest objecting to the exclusion of its proposal from the 
competitive range is dismissed as academic.[8]  Henkels & McCoy, Inc., 
supra, at 4.

The protest is denied in part and dismissed in part.

Comptroller General
of the United States

1. A third offeror proposing OFA technology was included in the 
competitive range because it also proposed a non-OFA alternative.

2. The agency proceeded with the selection process notwithstanding the 
protest, and on September 30, awarded a contract for the base item and 
option 1 to Frank Lill
and Son, Inc.  (Option 2 was not awarded since the agency did not have 
sufficient funding available on the date of award.  The agency notes 
that it has sought, and expects to receive, additional funding so that 
option 2 can be exercised.)

3. The plant's three boilers run on a 3-year cycle.  While one boiler 
is in operation, a second boiler is on emergency standby, and the 
third is undergoing major overhaul.  The boiler on which the low NOx 
burners to be installed under the base item is due to come on line in 
June 1998.

4. The Navy did not address the feasibility of recompeting option 1 in 
its submission.

5. The agency explains that a boiler can only be run for 1 year as the 
primary boiler because the burner nozzles wear out in that period of 
time.

6. The agency represented at one point in the proceedings that it was 
prepared to offer, as corrective action, a recompetition of the work 
encompassed in option 2.  It subsequently retracted that offer, 
however, arguing that a recompetition of the option 2 work would be 
impracticable for a variety of reasons.  The protester agrees that a 
recompeting the option 2 work would not be a meaningful remedy, 
although for reasons different from the agency's.  Since neither party 
appears interested in a recompetition of the option 2 work, we need 
not address the appropriateness of this as a remedy. 

7. We recognize that the protester has argued that the plant could 
reduce its NOx emissions to an acceptable level during the 1998 ozone 
season without the installation of any low NOx burners by reducing its 
reliance upon coal as a fuel.  It is not within the scope of our 
authority to question the agency's pollution abatement strategy, 
however.

8. The protester also complained in a supplemental protest that Lill's 
offer should have been rejected because it was front-loaded.  The 
agency responded with an agency report, in which it argued, citing our 
decision in MCI Constructors, Inc., B-274347; B-274347.2, Dec. 3, 
1996, 96-2 CPD  para.  210 at 5, that an offer that is mathematically 
unbalanced due to the pricing of base and option items need not be 
rejected where the agency reasonably expects to exercise the options.  
The protester has not responded to the agency report, and we therefore 
view it as having abandoned this issue.  Arjay Electronics Corp., 
B-243080, July 1, 1991, 91-2 CPD  para.  3 at 1.