BNUMBER:  B-279697 
DATE:  July 13, 1998
TITLE: Dynamic Marketing Services, Inc., B-279697, July 13, 1998
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DOCUMENT FOR PUBLIC RELEASE
The decision issued on the date below was subject to a GAO Protective 
Order.  This redacted version has been approved for public release.
Matter of:Dynamic Marketing Services, Inc.

File:     B-279697

Date:July 13, 1998

David M. Nadler, Esq., Robert J. Moss, Esq., and William M. Rosen, 
Esq., Dickstein Shapiro Morin & Oshinsky, for the protester.
Gilbert J. Ginsburg, Esq; and Daniel B. Abrahams, Esq., and Raymond 
Fioravanti, Esq., Epstein, Becker & Green; for Aspen Systems 
Corporation, an intervenor.
Jeffrey C. Morhardt, Esq., and Edmund J. Trepacz, Esq., Department of 
Education, for the agency.
Glenn G. Wolcott, Esq., and Paul Lieberman, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protester's proposal was properly excluded from the competitive range 
where the proposal contained numerous weaknesses and deficiencies 
under each of the five technical evaluation factors and would have 
required major revisions in order to become technically acceptable. 

DECISION

Dynamic Marketing Services, Inc. (DMSI) protests the Department of 
Education's exclusion of its proposal from the competitive range and 
the subsequent award of a contract to Aspen Systems Corporation under 
request for proposals (RFP) No. 98-001.  The solicitation sought 
proposals to operate a "state of the art one-stop center" for 
distribution of the agency's various publications.  Dynamic asserts 
that the agency improperly evaluated its proposal as technically 
unacceptable and contends that the proposal should have been included 
in the competitive range.  

We deny the protest.

The Department of Education yearly creates hundreds of information 
products, including reports, fliers, videos, brochures and posters, 
which are distributed to the public upon request.  For several years, 
DMSI has performed as a subcontractor under another Department of 
Education contract for some of these product distribution services.  

On April 17, 1997, the agency issued the solicitation at issue, 
seeking fixed-price proposals to operate a "state of the art" 
distribution center.  In a cover letter accompanying the solicitation, 
the agency explained that this procurement was significantly different 
from prior product distribution contracts, stating: 

     This contract is significant because the U.S. Department of 
     Education (ED) will be for the first time centralizing their 
     dissemination function for all of its principal offices.  Key 
     features of the One Pubs center will be an 800 line from which 
     customers can request any ED publication, a state of the [art] 
     inventory system, data base searches, publication storage, 
     effective mail handling, referral capabilities, and maintenance 
     of mailing lists. 

     Previously the Government acquired much of its support services 
     on a cost reimbursable basis using for the most part cost plus 
     fixed fee contracts.  In many cases this was simply a level of 
     effort contract in which the contractor was paid for hours 
     incurred . . . .

                    .     .     .     .     .
     
     The One Pubs contract contains a performance based statement of 
     work, a sophisticated surveillance plan, and incentive and deduct 
     provisions written into the performance requirement summary.  The 
     Department with this performance based methodology is 
     anticipating the contractor will come forth with creative ideas 
     to improve ED's information product distribution efficiency.  We 
     expect that One Pubs will be a state of the art, one stop 
     information products center. 

Among other things, the RFP's statement of work (SOW) contained 
requirements that the contractor use computer technology for a variety 
of functions in operating the new, centralized distribution center.  
In addition to stating that "[t]he purpose of this contract is to 
support principal offices throughout the [agency] by providing a state 
of the art one-stop center," the SOW required that, "[t]he 
[c]ontractor shall accept and process on-line requests . . . (phone, 
TDD, fax, letters, Internet, e-mail, electronic orders, on line forms) 
for information products"; required that the contractor be responsible 
for production of publications in alternative formats, including 
computer diskettes; and required that the contractor "shall deliver 
electronic versions of education information products . . . over 
electronic networks such as the Internet via electronic mail."  SOW  sec.  
100.3, 200.2, 200.3.  

Section M of the solicitation provided that proposals would be 
evaluated on the basis of technical merit, past performance, and 
price, stated that technical merit and past performance were 
"significantly more important than cost or price," and established the 
five following technical evaluation factors:  quality of technical 
approach; facilities, staff experience and capability; corporate 
capability; understanding the project; and sample questions.  RFP  sec.  
M.1 (A), (C).  

Finally, section L of the RFP advised offerors that proposals which 
failed to demonstrate a thorough understanding of the contract 
requirements would be unacceptable, stating: 

     You must submit an explanation of the proposed technical approach 
     in conjunction with the tasks to be performed in achieving the 
     project objectives. 

     A detailed work plan must be submitted indicating how each aspect 
     of the statement of work is to be accomplished.[1]  

Three offerors, including DMSI, submitted proposals by the June 23, 
1997 closing date and were subsequently evaluated.  DMSI proposed the 
lowest price of $15,324,755.  However, the agency found numerous 
weaknesses and deficiencies in DMSI's technical proposal and concluded 
that it failed to provide the required details regarding its technical 
approach to the various required tasks.  Overall, DMSI's proposal 
received the lowest technical score--638 points out of a possible 
1,050 points--and was determined to be technically unacceptable and 
not capable of being made acceptable without major revisions.    

The weaknesses and deficiencies in DMSI's proposal were pervasive 
under each of the five evaluation factors.  Specifically, under the 
first evaluation factor, "quality of technical approach," DMSI's 
proposal received a score of 328 out of a possible 525 points.  Under 
this factor, the RFP listed several subfactors and provided for 
evaluation regarding the "reasonability and feasibility of the 
approach; staff quality and level of effort devoted."  Under the first 
subfactor, "database management and management information systems," 
DMSI's proposal was downgraded for being understaffed. The agency 
specifically criticized DMSI's proposal that its system administrator 
and database administrator would devote only 40 and 80 percent of 
their time, respectively, to performance of this contract.  DMSI's 
proposal was also downgraded for proposing outdated computer 
workstations and an underpowered Internet server.[2]  Under another 
subfactor, "customer service, including enhanced user survey 
instruments," DMSI's proposal was downgraded for failing to provide 
any details regarding its proposed approach to meeting the RFP 
requirement that the Internet be used to process on-line customer 
requests and for maintaining an on-line user survey.  Under another 
subfactor, "dissemination functions, distribution and warehouse, [and] 
marketing," DMSI's proposal was downgraded for failing to provide 
details responding to the RFP requirement that the contractor actively 
market the agency's information products and the distribution center. 

Under the second evaluation factor, "facilities, staff experience and 
capability," DMSI's proposal received a score of 92 out of a possible 
150 points.  Among other things, DMSI's proposal was downgraded for 
proposing that its project manager would spend only 50 percent of her 
time performing this contract.  DMSI's proposal was also downgraded 
for failing to address the RFP requirement that "at least one employee 
shall be fluent in Spanish."  Finally, the proposal was downgraded 
because the proposed systems supervisor did not hold clearinghouse or 
mail room experience, the proposed production supervisor had only 4 
months of production supervisory experience, and neither the proposed 
project manager nor the assistant project manager had relevant 
computer skills or background in computer operations.  

Under the third evaluation factor, "corporate capability," DMSI's 
proposal received a score of 84 out of 150 points.  Under this factor, 
the RFP stated that proposals would be evaluated with regard to the 
offeror's demonstrated experience in similar contracts of comparable 
technical complexity, and also on the basis of the "quality of the 
organization and writing of the proposal."  DMSI's proposal was 
downgraded because it primarily reflected DMSI's bulk mailing 
experience,[3] and did not demonstrate experience performing contracts 
with the level of technological complexities anticipated here.  
Additionally, DMSI's proposal was downgraded under this evaluation 
factor for its poor organization and the fact that it contained 
spelling and grammatical errors which reflected poorly on DMSI's 
corporate capability. 
  
Under the fourth evaluation factor, "understanding the project," 
DMSI's proposal received a score of 59 out of a possible 100 points.  
The RFP stated that, under this factor, proposals would be evaluated 
to assess the offerors' "understanding the needs of the U.S. 
Department of Education in information products dissemination and a 
one stop center."  DMSI's proposal was downgraded on the basis that it 
placed no emphasis on future technology, was "more reactive than 
proactive," and that the proposal "fail[ed] to explain how the 
technical challenge involved in merging the response center, online, 
letter, fax and administrative dissemination facilities will be met."  

Finally, under the fifth evaluation factor, "questions," offerors were 
presented with various questions, including "What creative and 
innovative approaches and cost savings techniques will you use . . .?" 
and "What state of the art equipment would be used that would enhance 
ED's dissemination strategies . . . ?" DMSI's proposal received a 
score of 74 out of 125 points, and was downgraded for, among other 
things, failing to propose state of the art equipment and for failing 
to propose "anything creative or innovative."  

In summarizing the evaluation of DMSI's proposal, the agency stated: 

     The DMSI proposal simply conveyed no forward thinking or vision 
     for this project.  Some significant weaknesses noted were:  DMSI 
     was insufficient in its Internet and electronic capabilities, 
     showed inadequate staffing plans, included minimal or no 
     information on their marketing plan, alternate formats and the 
     fee for service option, and showed no experience in call center 
     operations.  Other significant weaknesses noted in this proposal 
     were DMSI's lack of emphasis on exceptional customer service as 
     well as cost savings ideas.  The fact that the Project Manager 
     could only devote 50% of her time to this project was also noted 
     as a major weakness.

On the basis of this evaluation, the agency concluded that DMSI's 
proposal was unacceptable without major revisions and, therefore, 
eliminated it from the competitive range.[4]  DMSI was subsequently 
advised of its exclusion; this protest followed. 

DMSI protests that it was unreasonable for the agency to evaluate its 
proposal as so technically deficient as to warrant exclusion from the 
competitive range.  DMSI primarily expresses disagreement with the 
agency regarding the bases for the evaluated weaknesses and 
deficiencies and argues that, in any event, its proposal could have 
been made acceptable through discussions.[5]
     
An offeror must submit an initial proposal that is adequately written 
and that affirmatively presents its merits, or run the risk of having 
its proposal rejected as technically unacceptable.  Defense Group, 
Inc., B-253795, Oct. 25, 1993, 94-1 CPD  para.  196 at 5.  Generally, offers 
that are technically unacceptable as submitted and would require major 
revisions to become acceptable are not required to be included in the 
competitive range.  Engineering & Computation, Inc., B-258728, Jan. 
31, 1995, 95-1 CPD  para.  155 at 3.  Procuring agencies may reasonably find 
a proposal to be unacceptable based on the offerors' generalized 
statements that it will comply with those requirements rather than 
providing a sufficiently detailed explanation of how the requirements 
will be performed.  Tri-Services, Inc., B-256196.4, Sept. 30, 1994, 
94-2 CPD  para.  121 at 4.  In reviewing whether a proposal was properly 
rejected as technically unacceptable for information deficiencies, we 
examine the record to determine, among other things, whether the RFP 
called for detailed information and the nature of the informational 
deficiencies--for example, whether the deficiencies tend to show that 
the offeror did not understand what it would be required to do under 
the contract.  Engineering & Computation, Inc., supra.  Although we 
will closely scrutinize an agency's decision, such as this one, which 
results in a competitive range of one, we will not disturb such a 
determination absent a clear showing that it was unreasonable.  Native 
Am. Consultants, Inc.; ACKCO, Inc., 
B-241531, B-241531.2, Feb. 6, 1991, 91-1 CPD  para.  129 at 5-6.  

The agency position is that, throughout DMSI's proposal, the agency 
found numerous instances, discussed above, where DMSI's proposal 
failed to meet the RFP requirements, including the specific RFP  sec.  L.3 
requirement that offerors "must submit an explanation of the proposed 
technical approach in conjunction with the tasks to be performed," as 
well as a "detailed work plan . . . indicating how each aspect of the 
statement of work is to be accomplished."  The agency concluded that 
DMSI failed to grasp the fundamental concept that the work to be 
performed under this solicitation differed significantly from 
subcontract work that DMSI had previously performed. 

Although DMSI expresses disagreement with the agency's technical 
evaluation, it offers no persuasive arguments that the agency 
materially erred in this evaluation.[6]  Further, in its submissions 
under this protest, DMSI confirms the agency's perception that DMSI 
failed to understand the differences between the requirements in this 
solicitation and those that DMSI has performed as a subcontractor 
under prior contracts.  Specifically, in its comments responding to 
the agency report, DMSI states: 

     The One Pubs project [solicited here] is a straightforward 
     clearinghouse operation.  The successful offeror will essentially 
     store Education's information products in a warehouse, receive 
     and record orders for those information products, and then mail 
     out the requested products to the customer.  These functions are 
     precisely the same functions that DMSI has been performing for 
     Education in an exemplary manner for the past ten years.[7]

It is clear from the record that the solicitation adequately advised 
offerors of substantial new requirements, including reliance on "state 
of the art" technology, and that the agency reasonably concluded that 
DMSI failed to understand those requirements.  Apparently as a result 
of this lack of understanding, as outlined above, DMSI's proposal 
contained a broad range of significant deficiencies, as a result of 
which the agency reasonably concluded that correction of these 
deficiencies would require major revisions to the proposal.  
Accordingly, the agency reasonably eliminated DMSI's proposal from the 
competitive range.  

The protest is denied. 

Comptroller General 
of the United States
   
1. Section L.3 of the RFP also advised offerors that proposals which 
merely repeated the RFP requirements would not be eligible for award, 
and that technical proposals must reflect a clear understanding of the 
contract requirements.  

2. One evaluator explained:  "The 386 processor supplied for the 
initial installation of the Definity ECS is two generations old, 
therefore susceptible to malfunction due to age and underpowered to 
handle all the communications needs anticipated.  No upgrade 
configuration or plans are presented."  With regard to the proposed 
Internet server, an evaluator explained:  "A DX100 server will not be 
satisfactory to sustain a proper website serving all of ED and ED 
customers.  Concurrent users from public sector, plus ED staff usage 
of website, search and ordering systems is very likely to exceed DX100 
server capacities."  

3. DMSI describes the services it has performed as "essentially 
stor[ing] Education's information products in a warehouse, receiv[ing] 
and record[ing] orders for those information products, and then 
mail[ing] out the requested products to the customer." 

4. Aspen Systems Corporation's proposal, offering a price of 
$20,500,668 and receiving a technical score of 944 points, was 
included in the competitive range.  The third offeror's proposal, 
offering a price of $45,180,951 and receiving a technical score of 760 
points, was also excluded from the competitive range.

5. DMSI's protest also asserts that, "on information and belief, 
Aspen's proposal was technically unacceptable and should not have been 
considered for award."  DMSI's comments following receipt of the 
agency report, which included Aspen's proposal and the agency's 
evaluation documents regarding that proposal, do not further discuss 
this allegation.  Accordingly, we view the issue as abandoned.  
Appalachian Council, Inc., B-256179, May 20, 1994, 94-1 CPD  para.  319 at 8 
n.8.  

6. In its comments, DMSI notes that one of the evaluators may have 
misunderstood the physical location of DMSI's proposed call center.  
Even if DMSI were correct, we do not view this as a material error. 

7. DMSI's comments also assert that reliance on "state of the art" 
technology was not critical to contract performance under this 
solicitation.