BNUMBER: B-280585; B-280585.2
DATE: October 21, 1998
TITLE: Input/Output Technology, Inc., B-280585; B-280585.2, October
21, 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:Input/Output Technology, Inc.
File:B-280585; B-280585.2
Date:October 21, 1998
Richard D. Lieberman, Esq., and James S. DelSordo, Esq., Kinosky,
Phillips & Lieberman, for the protester.
William L. Walsh, Jr., Esq., J. Scott Hommer, Esq., and Wm. Craig
Dubishar, Esq., Venable, Baetjer and Howard, for Honeywell, Inc., an
intervenor.
Joshua A. Kranzberg, Esq., and Robert A. Russo, Esq., Army Materiel
Command, for the agency.
David A. Ashen, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protest that price evaluation was improperly based on methodology set
out in unnumbered solicitation pages and was inconsistent with
approach agency allegedly conveyed orally to protester, is denied
where evaluation was consistent with approach set forth in the
solicitation, and record shows protester was on notice of agency's
intended evaluation approach; although pages setting forth the
approach were unnumbered and not marked with solicitation number and
were, apparently for that reason, overlooked by protester, the pages
were included in copy of solicitation downloaded from the Internet and
printed by protester.
DECISION
Input/Output Technology, Inc. protests the award of a contract by the
Army Materiel Command, Communications-Electronics Command (CECOM), to
Honeywell, Inc., under request for proposals (RFP) No.
DAAB07-98-R-B258, for the repair and retrofit of AN/APN-209 Line
Replaceable Units (LRU). Input/Output raises several challenges to
the selection process, including the evaluation of price and technical
proposals.
We deny the protest.
The solicitation provided for award of a 5-year indefinite-delivery,
indefinite-quantity contract to repair and retrofit two
receiver/transmitter LRUs in the AN/APN-209 Radar Altimeter Set, which
is used to measure altitude in fixed-wing and rotary aircraft. Award
was to be made "based on the best overall (i.e., best value) proposal
that is determined to be the most beneficial to the Government" under
the following three evaluation factors: (1) technical, including
subfactors for repair/retrofit and test plans, key personnel, quality
assurance plan, warranty, schedule, and small business/small
disadvantaged business utilization plan; (2) performance risk, as
indicated by the offeror's record of past performance; and (3) price.
RFP sec. M-4. The technical factor was "slightly more important" than
either performance risk or price; performance risk and price were of
equal importance and combined were more important than the technical
factor. Id.
The Army received proposals from Input/Output and Honeywell--the
original equipment manufacturer (OEM) for the AN/APN-209--by the
closing time; both were included in the competitive range. At the
conclusion of written and oral discussions, the agency requested final
proposal revisions. Based on the final evaluation, the contracting
officer determined that Honeywell had submitted the best overall
proposal. Both Honeywell's and Input/Output's proposals were
evaluated as outstanding under the technical factor--both proposals
received outstanding ratings under the two most important technical
subfactors (repair/retrofit and test plans and key personnel), and
Honeywell's also received an outstanding rating for its small
business/small disadvantaged business utilization plan. Likewise,
both proposals were evaluated as offering low performance risk.
However, the price of Honeywell's proposal ($[DELETED] with first
article test (FAT) and $[DELETED] without FAT) was significantly lower
than the price of Input/Output's ($[DELETED] with FAT and $[DELETED]
without FAT). Award was made to Honeywell based on price.
PRICE EVALUATION
The solicitation requested unit prices for each year of the contract
for four stepladder quantities (1 to 50, 51 to 100, 101 to 200, and
201 to 300 units) of various repair, test and retrofit processes.
Input/Output argues that CECOM misled it during negotiations as to the
agency's intended approach to evaluating stepladder prices.
The solicitation included pages consecutively numbered 1 through 56,
several attachments, and 4 pages that were unnumbered and not
identified with the solicitation number. Two of the unnumbered pages
followed page 55 of the solicitation and completed section L-7,
Proposal Submission, by setting forth the required contents of
proposal Volume I, Technical (as they related to the last three of the
six subfactors under that factor), Volume II, Performance Risk, and
Volume III, Price. (On page 55, a requirement for three proposal
volumes was established and the required contents of Volume I as they
related to the first three of the six subfactors under the technical
factor were set forth.) The other two unnumbered pages followed page
56 of the solicitation and completed section M-4, Basis for Award, by
describing evaluation Factor II, Performance Risk, and Factor III,
Price. (On page 56, offerors were advised that the agency would
evaluate proposals using three factors--technical, performance risk
and price--and the subfactors under the technical factor were listed.)
The solicitation provided on these latter two unnumbered pages that
the evaluated price was to be the sum of the line item prices, and
that where stepladder ("range quantity") prices were requested, the
evaluated line or subline item price was to be the product of the
weighted average unit price--derived from the unit prices for the
stepladder quantities--multiplied by the maximum quantity that can be
ordered under that line or subline item.
Input/Output essentially argues that it reasonably overlooked the
unnumbered and unidentified pages included in section M of the
solicitation which set forth a weighted average approach to evaluating
stepladder quantity prices because they were unnumbered and
unidentified. Although the record indicates that Input/Output
downloaded and printed a complete copy of the solicitation,
Input/Output states that its president
does not know what happened to these four unnumbered and unmarked
pages after he printed the solicitation, however, he presumes
they were discarded by his staff, who had no way of knowing that
the unnumbered and unmarked pages were related to the
solicitation. Indeed, as [the president] stated, he printed the
solicitation on a batch printer used by several other personnel,
so it would have been common for other non-relevant pages to be
printed by the same printer.
Input/Output Comments, Sept. 10, 1998, at 2. Further, Input/Output
maintains, but the contract specialist denies, that in a telephone
call inquiring as to what to enter for the total contract value on the
solicitation's Small and Small Disadvantaged Business Participation
information certificate, the specialist advised that the "[t]otal
contract evaluated price is to be calculated by taking the highest
quantity for each [subline item] and multiplying it by its unit cost."
Input/Output Protest, July 13, 1998, Declaration of Input/Output's
President, at 5; Input/Output Comments, Sept. 10, 1998, at 4; CECOM
Comments, Sept. 10, 1998, at 2. Input/Output claims that, because it
understood that the evaluated price would be based on the prices for
the highest quantities, it proposed substantially higher prices for
the lower quantities than it would have, if it had known that they
would be evaluated, thus raising its overall evaluated price, under
the methodology set out in the unnumbered solicitation pages and
actually used by the agency, by approximately $[DELETED].
Input/Output Comments, Sept. 10, 1998, at 4-5. The protester contends
that it thus was misled, and that it should be given an opportunity to
prepare its proposal based on the actual evaluation approach.
We find that Input/Output was on notice of the intended evaluation
approach. Having downloaded, stored on its computer and printed the
entire solicitation, Input/Output was in possession of the unnumbered
pages setting forth the weighted average approach to evaluating
stepladder prices. Its failure to read all of the downloaded pages in
no way translates into some impropriety on the agency's part.
Moreover, while the agency's failure to number and identify all of the
solicitation pages may have created some confusion in this regard,
Input/Output should have been aware that additional pages existed. In
this regard, as noted above, the discussion of the evaluation factors
on solicitation page 56, the last numbered page, was incomplete,
ending before performance risk and price were addressed. Indeed,
Input/Output was aware that the solicitation, as comprised of the
consecutively numbered pages, was incomplete. According to the
protester:
During discussions with CECOM concerning this procurement,
[Input/Output] realized that several pages of the Solicitation
appeared to be missing from its version of the document.
Specifically, the version of the RFP in [Input/Output's]
possession contained no description of the requirements for the
Performance Risk portion of the proposal and Section L. Also,
the Section M in [Input/Output's] RFP gave no description of how
the offerors' price proposals were to be constructed and
evaluated other than the fact that award would be based on the
best value to the Government and that between technically equal
offerors, price would be the determining factor.
Input/Output Protest, July 13, 1998, Declaration of Input/Output's
President, at 4-5.
Further, Input/Output became aware during discussions that there were
unnumbered pages in the RFP and was able to obtain a missing
unnumbered page from its computer file containing the downloaded RFP.
Specifically, in response to the contract specialist's advising that
the protester had failed to provide the required Small and Small
Disadvantaged Business Participation information certificate, the
protester obtained the missing unnumbered page containing the
certificate by printing out the section L computer file, which it
previously had downloaded (as part of the whole RFP) from the
Internet. Input/Output Comments, Sept. 10, 1998, at 2-3; CECOM
Comments, Sept. 10, 1998, at 1.
We conclude that Input/Output was on notice of the intended evaluation
approach--it downloaded the entire RFP, including the two unnumbered
pages following page 56, into a computer file, and thus was in
possession of the provisions establishing the weighted average
approach to evaluating stepladder prices.[1] As for its reliance on
the alleged contrary advice of the contract specialist, such oral
advice by representatives of the contracting officer is not binding on
the government and a bidder relies on oral explanations of the
solicitation at its own risk. SAF Eng'g Assocs., Inc., B-275740, Mar.
19, 1997, 97-1 CPD para. 118 at 3 n.1; Adrian Supply Co., B-251886.2, June
7, 1993, 93-1 CPD para. 435 at 5 n.1.
FIRST ARTICLE TEST WAIVER
The solicitation's Schedule of Supplies/Services included a subline
item (0001AA) for FAT units, but also provided that "[t]he Government
may waive the requirement for first article approval test where
supplies identical or similar to those called for in the schedule have
been previously furnished by the Offeror/Contractor and have been
accepted by the Government." RFP sec. I-2(i). CECOM waived FAT for both
Input/Output and Honeywell. Input/Output objects to the waiver for
Honeywell on the ground that Honeywell had not previously satisfied
the latest version (MIL-L-85762A, the version applicable here) of the
agency's standard for cockpit lighting compatibility with the
Aviator's Night Vision Imaging System (ANVIS).
A contracting agency's responsibility for determining its actual needs
includes determining the type and amount of testing necessary to
ensure product compliance with specifications. Lunn Indus., Inc.,
B-210747, Oct. 25, 1983, 83-2 CPD para. 491 at 3. Our review of an
agency's decision to waive FAT for a particular offeror is limited to
determining whether it was reasonable. Durodyne, Inc., B-243382.3,
Oct. 29, 1991, 91-2 CPD para. 388 at 4; Whittaker Tech. Prods., Inc.,
B-239428, Aug. 29, 1990, 90-2 CPD para. 174 at 3.
CECOM's waiver of FAT for Honeywell was unobjectionable. Although
Honeywell was not producing AN/APN-209s to the ANVIS compatibility
standard applicable here, it was the OEM for the entire AN/APN-209,
including the LRUs.[2] Further, Honeywell was producing AN/APN-209s
to the previous ANVIS compatibility standard, and the agency's
engineer concluded that the changes required in upgrading to the
applicable, more stringent standard were minor. Honeywell Comments,
Sept. 10, 1998, at 8; Input/Output Comments, Sept. 10, 1998, at 7;
CECOM Comments, Sept. 10, 1998, at 3. This conclusion--and the
resulting decision to waive FAT--was reasonable in light of
Honeywell's approximately 25 years experience as the OEM for the
AN/APN-209, its current experience meeting the ANVIS compatibility
standard under the production contract, and its evaluated outstanding
repair/retrofit and test plans and key personnel.
GOVERNMENT-FURNISHED MATERIALS
Input/Output asserts that Honeywell's lower price reflected the
improper use of government-furnished material (GFM)--spare parts--from
its current production contract. According to the protester, use of
this GFM was inconsistent with the agency's representations during
discussions, in response to Input/Output's questions, that the
existing government-owned AN/APN-209 spare parts inventory from
Honeywell's production contract would not be available to Honeywell
for use in the repair and retrofit contract.
In its proposal, Honeywell discussed using both existing spare parts
and existing equipment. For example, Honeywell stated in its proposal
that "[DELETED]." Honeywell Proposal at I-1. In addition, the
proposal stated that "[DELETED]." Honeywell Proposal at I-12. In its
final proposal, Honeywell acknowledged that CECOM had cautioned it
during discussions that the agency "would not be providing
authorization for use of Government-furnished equipment (GFE) in the
performance of the pending APN-209 repair and retrofit (R&R) program
with the exception of the height indicators identified in the
solicitation." Honeywell Final Proposal, June 8, 1998. Honeywell
also agreed in its final proposal that "only two indicators, furnished
as GFE" would be available for use in the repair/retrofit contract.
Id.
Input/Output asserts that, because the statements in Honeywell's final
proposal did not specifically address the matter of Honeywell's
government-owned spare parts inventory, it appears that Honeywell was
proposing to use those parts in performing the current contract.
There is no basis in the record for Input/Output's position that
Honeywell was proposing to use government-owned spare parts.
Honeywell's proposal, while referring to a "[DELETED]," did not
indicate that it was referring to government-owned parts; CECOM
interpreted the language as referring to Honeywell-owned parts; and
Honeywell has submitted a declaration from its AN/APN-209 program
manager confirming that the "[DELETED]" referred to in the proposal
was [DELETED], and stating that all material required for performance
of the repair/retrofit contract would be supplied from Honeywell-owned
stock or procured by Honeywell.[3] CECOM Comments, Oct. 2, 1998, at
1; Honeywell Comments, Oct. 2, 1998, Declaration of Honeywell
AN/APN-209 Program Manager, at 2-3. Although CECOM and Honeywell
confirm that Honeywell does maintain GFM--with a value of $[DELETED]
as of July 17, 1998--for use in a 1997 AN/APN-209 overhaul and repair
contract, they report that such material is maintained at a "bonded"
storage facility, which is housed at a Honeywell site, but under the
control and ownership of the government, and that Honeywell has
neither requested nor been authorized to use the GFM in performing
this contract. CECOM Comments, Oct. 2, 1998, at 1-2; Honeywell
Comments, Oct. 2, 1998, Declaration of Honeywell AN/APN-209 Program
Manager at 3-5. Further, we note that CECOM's and Honeywell's
assertions in this regard are consistent with Honeywell's 1997
contract (DAAB07-97-D-B008), which generally provides for the
contractor to return government-furnished property not later than
completion of contract deliveries or contract termination. CECOM
Comments, Sept. 11, 1998, at 3; Honeywell Comments, Oct. 5, 1998,
Attachment 1.
BURN-IN
Input/Output argues that burn-in testing of repaired and retrofitted
units was required by the solicitation and that Honeywell's proposal
was unacceptable because it did not provide for the burn-in of all
units.[4] CECOM and Honeywell deny that the solicitation required
burn-in testing of repaired and retrofitted units.
We need not determine whether Input/Output's interpretation of the
solicitation is reasonable, since it is clear from the record that
Input/Output did not suffer competitive prejudice as a result of the
alleged waiver of a burn-in requirement. In this regard, our Office
will not sustain a protest unless the protester demonstrates a
reasonable possibility that it was prejudiced by the agency's actions,
that is, unless the protester demonstrates that, but for the agency's
actions, it would have had a substantial chance of receiving the
award. McDonald-Bradley, B-270126, Feb. 8, 1996, 96-1 CPD para. 54 at 3;
see Statistica, Inc. v. Christopher, 102 F.3d 1577, 1581 (Fed. Cir.
1996). Input/Output's technical proposal was rated as equal to
Honeywell's based in part on its being credited with a major relative
advantage for offering burn-in for every unit; the price of
Input/Output's proposal was approximately $[DELETED] higher than the
price of Honeywell's; and the protester has stated that the perceived
requirement to perform burn-in added only an additional $[DELETED] to
its price. Input/Output Protest, July 13, 1998, at 17. Thus, had
Input/Output been advised of the agency's interpretation of the
solicitation, and as a result not offered burn-in, Input/Output's
technical proposal rating would have been adversely affected, and its
price still would have been approximately $[DELETED] higher than
Honeywell's. This argument therefore provides no basis for disturbing
the award.
The protest is denied.
Comptroller General
of the United States
1. The agency contract specialist also reports that he faxed all four
unnumbered pages to Input/Output during discussions. Input/Output
maintains that it did not receive this fax. CECOM Comments, Sept. 10,
1998, at 1; Input/Output Comments, Sept. 10, 1998, at 3.
2. The AN/APN-209 Radar Altimeter Set is comprised of four components
which are deployed in various combinations: (1) the RT-1411
receiver-transmitter, which receives and transmits radar signals that
are used to determine altitude; (2) the ID-1917 remote indicator,
which has digital and analog displays indicating the altitude to the
pilot and also includes high/low warning lights; (3) the RT-1115,
which combines a receiver-transmitter with an indicator; and (4) two
antennas. The LRUs to be repaired under the contemplated contract are
RT-1411 and RT-1115 receiver-transmitters. Only the RT-1115, which
includes the display indicator, is to be retrofitted and upgraded to
the MIL-L-85762A ANVIS compatibility standard. CECOM Comments, Oct.
2, 1998, at 2; Input/Output Comments, Oct. 2, 1998, at 5-7; Honeywell
Comments, Sept. 14, 1998, at 8-9.
3. Input/Output cites other provisions of Honeywell's proposal in
support of its position, but none of these establishes that
Honeywell's proposal was based on the use of government-owned spare
parts. For example, Input/Output cites the portion of Honeywell's
quality program plan where Honeywell discusses its procedures for the
control, storage, and maintenance of "customer-supplied product
provided for incorporation into the supplies or for related
activities." Honeywell Proposal at I-49. However, Honeywell explains
that these procedures are necessary to account for any
government-furnished property in Honeywell's control--including the
two GFE indicators identified in the solicitation and any LRUs
furnished for repair and retrofit--and we find no basis to question
this explanation.
4. Burn-in, as applied to production units, is a 24-hour test designed
to expose the AN/APN-209 unit to extremes of temperature and vibration
during operation. CECOM Administrative Report, Aug. 21, 1998, at 3
n.2.