TITLE:  	Rel-Tek Systems & Design, Inc.--Modification of Remedy, B-280463.7, July 1, 1999
BNUMBER:  B-280463.7
DATE:  July 1, 1999
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Rel-Tek Systems & Design, Inc.--Modification of Remedy, B-280463.7, July 1,
1999

Decision

Matter of: Rel-Tek Systems & Design, Inc.--Modification of Remedy

File: B-280463.7

Date: July 1, 1999

Stephen S. Kaye, Esq., and Tina R. Tyson, Esq., Bryan Cave, for the
requester.

J. Andrew Jackson, Esq., and Tina D. Reynolds, Esq., Dickstein, Shapiro,
Morin & Oshinsky, for Oracle Corporation, an intervenor.

Jill A. Eggleston, Esq., and Terry G. Sloan, Esq., Defense Finance and
Accounting Service, for the agency.

Susan K. McAuliffe, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Request for modification of remedy is denied where agency's implementation
of recommendation cures procurement impropriety and prevents auction among
competitors.

DECISION

Rel-Tek Systems & Design, Inc. requests that our Office modify the
corrective recommendations included in our decision in Rel-Tek Sys. &
Design, Inc., B-280463.3, Nov. 25, 1998, 99-1 CPD para. 2, in which we sustained
Rel-Tek's protest of an award to Oracle Corporation under letter of interest
(LOI) No. MDA-L-97-0005, issued by the Defense Finance and Accounting
Service (DFAS) for accounting software and related services. We sustained
the protest because Oracle's proposal failed to unambiguously demonstrate
compliance with certain LOI requirements regarding acceptance, warranty, and
software performance.

In that decision, we recommended that DFAS conduct discussions with all
offerors whose proposals were in the competitive range at the time of award,
request best and final offers (BAFO), and proceed with the source selection
process. We further recommended that, if, after the selection process had
concluded, another offeror's proposal was determined to offer the greatest
value to the government under the terms of the LOI, Oracle's contract should
be terminated, and award made to that offeror. [1]

DFAS limited its implementation of our corrective recommendations to the
three solicitation requirements (regarding acceptance, warranty, and
software performance provisions of the LOI) with which Oracle's proposal
failed to unambiguously comply. Specifically, the agency reopened
discussions, but limited them to these areas of the proposals, noting for
Oracle that its proposal did not comply with these requirements. The agency
reports that, since the remaining offerors' proposals had no identifiable
deficiencies in these three areas, the agency did not raise discussion
questions with these firms. [2] The agency subsequently issued to each
competitive range offeror a request for a new BAFO, instructing each offeror
to limit any proposal revisions to these three technical areas (i.e.,
acceptance, warranty, and software performance) and their associated costs.

Rel-Tek requests that we modify our corrective recommendations. Rel-Tek
bases its request on the allegedly restrictive terms of the agency's request
for new BAFOs, under which Rel-Tek asserts it will not receive effective
relief. [3] Rel-Tek contends that the terms of the recompetition are
improper, since Rel-Tek is precluded from changing areas of its proposal
that the firm desires to change in order to be more competitive.
Essentially, Rel-Tek seeks a decision from our Office recommending
recompetition on the basis of unrestricted discussions and BAFOs. [4]

The agency, on the other hand, asserts that it has adequately corrected the
prior procurement impropriety by giving Oracle an opportunity to comply with
the cited LOI requirements it did not meet prior to award, and allowing the
remaining offerors a similar opportunity to revise these limited areas of
their proposals, including cost proposal revisions related to these
requirements. The agency asserts that the limitation imposed on the BAFO
revisions is necessary here to prevent an improper auction, since the
remaining competitors, who were debriefed after award, have learned not only
their competitive standing and proposal evaluations, but also the awardee's
substantially lower evaluated costs.

Generally, offerors in response to discussions may revise any aspect of
their proposals as they see fit--including portions of their proposals which
were not the subject of discussions. System Planning Corp., B-244697.4, June
15, 1992, 92-1 CPD para. 516 at 3-4. There may, however, be appropriate
circumstances where an agency, in conducting discussions to implement a
recommendation of our Office for corrective action, may reasonably decide to
limit the revisions offerors may make to their proposals. Id. As a general
matter, the details of implementing our recommendations for corrective
action are within the sound discretion and judgment of the contracting
agency. Serv-Air, Inc., B-258243.4, Mar. 3, 1995, 95-1 CPD para. 125 at 2-3.
Moreover, we will not question the agency's ultimate manner of compliance so
long as it remedies the procurement impropriety that was the basis for the
decision's recommendation. See Furuno U.S.A., Inc.--Recon., supra, at 3-4.

The agency cites previous decisions issued by our Office in support of the
propriety of its actions in limiting the terms of the BAFOs requested from
the offerors to correct the procurement deficiency cited in our decision
(i.e., the agency's award of the contract on the basis of a proposal which
failed to unambiguously demonstrate compliance with certain solicitation
requirements). For example, the agency cites our decision in System Planning
Corp., supra, where the agency had effectively waived for the awardee a
solicitation requirement for the submission of an audited financial
statement. We agreed that a limited request for information from each
offeror was an appropriate way to remedy the impropriety, which did not
affect other portions of the proposals. Here, the procurement impropriety in
the award to Oracle similarly involves separable aspects of that firm's
proposal, which do not affect other portions of the proposal or other LOI
requirements. [5]

In addition, here, as in System Planning, there is no indication that the
agency's requirements have changed since the initial BAFO submissions.
Further, Rel-Tek offers no explanation, and we see none, of any changed
circumstances that warrant requiring the agency to allow the competitive
range offerors to revise their proposals in other areas--other than the fact
that those offerors are now aware of Oracle's substantially lower evaluated
costs. [6]

Focusing on the disclosure of Oracle's evaluated costs and the offerors'
competitive standing, the agency asserts that limiting the terms of the new
BAFOs is necessary to prevent an auction, in accordance with Federal
Acquisition Regulation (FAR) sect. 15.610(e)(2) (June 1997), which generally
prohibits auction techniques, including the disclosure of offerors' prices
during discussions. [7] Rel-Tek's modification of remedy request effectively
seeks the opportunity to engage in an auction, with knowledge of the Oracle
proposal's evaluated costs. Under these circumstances, we find reasonable
the agency's position that such an auction should be prevented.

As stated above, reopening of discussions in response to corrective
recommendations to allow for the submission of limited proposal revisions
aimed at correcting a specific procurement impropriety is generally
unobjectionable in a negotiated procurement, especially where the limited
procurement impropriety does not reasonably affect other areas of the
evaluation of proposals. System Planning Corp., supra. Given the risk of an
auction upon recompetition of a protested procurement, an opportunity to
submit unlimited BAFO revisions after disclosure of prices may not be
warranted where the agency can otherwise reasonably correct the earlier
procurement defect. See Krueger Int'l, Inc., B-260953.4, Oct. 4, 1995, 96-1
CPD para. 235 at 6.

Here, given, on the one hand, the potential for auction arising from
disclosure of the awardee's substantially lower evaluated costs and the
offerors' competitive standing, and, on the other hand, the fact that the
procurement impropriety can be corrected with limited revised proposals, and
that there has been no change to the agency's requirements, we see no basis
to require the agency to, in effect, reopen the entire procurement by
permitting unlimited proposal revisions. In sum, we conclude that the
agency's implementation of our corrective recommendations was reasonable.
Accordingly, we deny Rel-Tek's request for modification of those
recommendations.

Comptroller General

of the United States

Notes

1. We also recommended that the protester be reimbursed the reasonable costs
of filing and pursuing its protest.

2. These offerors, including Rel-Tek, were given the opportunity to suggest
discussion questions themselves, limited to the same three LOI requirements.
The offerors did not raise any questions for discussion with the agency.

3. Our review of Rel-Tek's request for modification of remedy focuses on the
terms of the agency's BAFO request. Although Rel-Tek challenges the agency's
failure, during the recompetition, to conduct discussions with the firm
regarding other areas of its proposal, we see no basis to object to the
agency's action on this ground. As we stated in our initial decision,
Rel-Tek's challenges to the agency's discussions with the firm did not
provide a basis to sustain the protest (i.e., the protester did not
persuasively show that discussions were not adequate or that it was
competitively prejudiced by improper discussions). Rel-Tek Sys. & Design,
Inc., supra, at 6, n.4. Rel-Tek has not timely sought reconsideration of
that decision. 4 C.F.R. sect. 21.14 (1998). Our generally stated recommendation
for discussions was not intended to be as wide-ranging as Rel-Tek contends,
but instead, was crafted to recognize the agency's discretion in this area,
while anticipating that, at a minimum, the agency would conduct discussions
with Oracle regarding the material deficiencies in its proposal, see Furuno
U.S.A., Inc.-Recon., B-221814.2, June 10, 1986, 86-1 CPD para. 540 at 3, and
request revised proposals from all competitive range offerors.

4. Rel-Tek also requests that we modify our recommendations to include a
recommendation for the disqualification of Oracle from the
recompetition--based in part on the alleged advantage Oracle now has from
its continued performance of the contract--or, in the alternative, that we
recommend that Rel-Tek be reimbursed its proposal preparation costs.
Although the disqualification of Oracle was unsuccessfully sought by Rel-Tek
during the protest, and although Rel-Tek should have anticipated continued
performance of the contract by Oracle during the recompetition, neither
matter was raised in a timely reconsideration request. Further, since, as
discussed above, Rel-Tek has been provided a reasonable opportunity to
compete further for the award, there is no basis for a recommendation that
its proposal preparation costs be reimbursed. To the extent Rel-Tek also
alleges, on information and belief, that Oracle is not performing the
contract in accordance with the LOI requirements, the agency reports that it
has no knowledge of such failure to perform; and the allegation otherwise
raises a matter of contract administration not for our review. 4 C.F.R.
sect.21.5(a).

5. To the extent Rel-Tek contends that the limited BAFO request prejudices
its chances for award, since the firm cannot alter its cost proposal in
other areas that may have included costs related to these three LOI
requirements, we are not persuaded by this argument--Rel-Tek has not shown
that the terms of the BAFO request are unnecessarily restrictive. The
agency's BAFO request, limited to the offerors' technical and cost-related
proposal revisions for acceptance, warranty, and system performance, did not
prohibit revision to other areas of the offerors' proposals to the extent
that those proposal areas contained terms and related costs for the three
requirements at issue.

6. Another decision cited by the agency is Serv-Air, Inc., supra. In that
case, we found that limited discussions, including proposal revisions
limited to cost proposals, were acceptable to cure the procurement
deficiency found in the underlying protest--the protester had been deprived
of meaningful discussions regarding its general and administrative expense
rates. As here, the limited terms of the BAFO request cured the procurement
deficiency, while eliminating any concerns about the possibility of
technical leveling and reducing any further costly delay caused by the
protest process.

7. We note that, although the cited regulatory provision regarding auctions
governs this procurement, the recently revised FAR provision regarding
limitations on the disclosure of offerors' prices during discussions does
not include language regarding the prevention of auctions. FAR sect.
15.306(e)(3) (FAC 97-02).