BNUMBER:  B-280970.4 
DATE:  January 29, 1999
TITLE: SMS Data Products Group, Inc., B-280970.4, January 29, 1999
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Matter of:SMS Data Products Group, Inc.

File:     B-280970.4

Date:January 29, 1999

Mark J. Stechschulte, Esq., for the protester.
Paralee White, Esq., and Lisa K. Miller, Esq., Gadsby & Hannah, for 
NetCon, Inc., an intervenor.
Maj. David Newsome, Jr., Department of the Army, for the agency.
Paul E. Jordan, Esq., and Paul Lieberman, Esq., Office of the General 
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Agency's corrective action of terminating purchase order and issuing a 
revised solicitation in response to a protest is reasonable where 
material solicitation requirements and the agency's written 
clarifications of those requirements were susceptible to more than one 
reasonable interpretation. 

DECISION

SMS Data Products Group, Inc. protests the Department of the Army's 
decision to terminate SMS's purchase order under solicitation No. 
DAHA90-98-Q-0124, and to issue a revised request for quotations (RFQ).  
The Army's corrective action resulted from a protest by Netcon, Inc., 
a competitor, challenging SMS's ability to meet the RFQ 
specifications, which caused the Army to conclude that the 
specifications, as stated and interpreted through agency responses to 
vendor questions, were ambiguous.  SMS contends that there was no 
ambiguity in the specifications and that recompetition will result in 
an improper auction.

We deny the protest.

The RFQ sought quotations for a quantity of compact disk servers to 
Army National Guard units.  The RFQ advised prospective vendors that 
"only GSA quotes will be accepted" (RFQ at 1, block 20) referring to 
products on the General Services Administration (GSA) Federal Supply 
Schedule (FSS).  Prior to the submission of quotations, a prospective 
vendor submitted the following question:  "This contractor understands 
it is the government[']s intention to only accept quotes with part 
numbers currently on GSA schedule as of the Solicitation issue date."  
Solicitation Questions at  para.  1.  The agency responded, "Correct.  It is 
our intention to procure this requirement from GSA schedules."  Id.  
NetCon interpreted this response to mean that only products on the FSS 
as of May 26, 1998, the RFQ issue date, could be proposed.  Since SMS 
had proposed items that were not on the FSS until after that date, 
NetCon protested the issuance of a purchase order to SMS.  According 
to NetCon, had it known that it was acceptable to propose items not 
yet on the FSS, it could have proposed a less expensive item in 
response to the RFQ.

The RFQ also required that the "server must have full functionality on 
a Banyan Vines or a Microsoft NT 4.0 network operating system," that 
"[a]ll CD servers will be configured to work in either a Banyan Vines 
or Microsoft NT 4.0 environment," and that the contractor must provide 
installation documentation which would "provide for both Banyan Vines 
and Microsoft NT 4.0 networks."  Statement of Work (SOW) at 4.1, 4.2, 
4.3.  Another vendor question referred to these three sections and 
asked: 

     There are three different interpretations possible from this 
     language: a) Each server must be capable of operating with both 
     operating systems; b) The server must be capable of operating 
     with either operating system and the Government will specify the 
     operating system at time of order; or c) The offeror may select 
     either environment as it sees fit.  Which if any interpretation 
     is correct?  Please keep in mind when responding to this 
     question, that it is more expensive to configure a system to work 
     in both environments.

Solicitation Questions at  para.  11.  The agency responded that 
"[i]interpretation A is correct."  Id.

NetCon interpreted this response to mean that the servers must be 
capable of operating simultaneously on both systems.  Consequently, it 
proposed a particular solution to meet this requirement.  According to 
NetCon, had it not had to meet this requirement, it could have 
proposed a less expensive alternative. 

The Army originally defended its decision to issue a purchase order to 
SMS.  In this regard, it explained that it intended for vendors to be 
able to quote on any product so long as it was on the FSS at the time 
the purchase order was issued.  Likewise it intended the item to be 
capable of operating on both systems, but not necessarily 
simultaneously.  After reviewing NetCon's comments on the report and a 
supplementary protest, the agency determined that the questioned 
requirements and its responses to vendor questions were ambiguous.  In 
the Army's view, NetCon's interpretations were as reasonable as the 
agency's intended meanings.  

The Army advised our Office that it intended to take corrective action 
by canceling the RFQ and SMS's purchase order, and by issuing a new 
solicitation.  SMS then filed this protest arguing that the 
requirements were not ambiguous and that resolicitation would result 
in an improper auction and technical leveling.  

Contracting officials in negotiated procurements have broad discretion 
to take corrective action where the agency determines that such action 
is necessary to ensure fair and impartial competition.  Patriot 
Contract Servs., LLC, et al., B-278276.11 et al., Sept. 22, 1998, 98-2 
CPD  para.  77 at 4; Rockville Mailing Serv., Inc., B-270161.2, Apr. 10, 
1996, 96-1 CPD  para.  184 at 4; Oshkosh Truck Corp.; Idaho Norland Corp., 
B-237058.2, B-237058.3, Feb. 14, 1990, 90-1 CPD  para.  274 at 4.  It is not 
necessary for an agency to conclude that the protest is certain to be 
sustained before it may take corrective action; where the agency has 
reasonable concern that there were errors in the procurement, even if 
the protest could be denied, we view it as within the agency's 
discretion to take corrective action.  Patriot Contract Servs., LLC, 
et al., supra; Main Bldg. Maintenance, Inc., B-279191.3, Aug. 5, 1998, 
98-2 CPD  para.  47 at 3.  An agency may amend a solicitation, and request 
and evaluate further offers where the record shows that the agency 
made the decision to take this action in good faith, without the 
specific intent of changing a particular offeror's technical ranking 
or avoiding an award to a particular offeror.  See PRC, Inc., 
B-233561.8, B-233561.9, Sept. 29, 1992, 92-2 CPD  para.  215 at 3-4; Burns & 
Roe Servs. Corp., B-248394, Aug. 25, 1992, 92-2 CPD  para.  124 at 5; Unisys 
Corp., B-230019.2, July 12, 1988, 88-2 CPD  para.  35 at 5.  We will not 
object to an agency's proposed corrective action where the agency 
concludes that the award, because of perceived flaws in the 
procurement process, was not necessarily made on a basis most 
advantageous to the government, so long as the corrective action taken 
is appropriate to remedy the impropriety.  Rockville Mailing Serv., 
Inc., supra.

There is no evidence in the record that suggests the agency is acting 
other than in good faith.  On the contrary, while the protester 
contends that the agency has not supported its determination to take 
the corrective action proposed, the record supports that the agency's 
corrective action is appropriate and not overbroad. 

In this regard, the original SOW requirements concerning operability 
on Banyan Vines and Windows NT 4.0 are less than models of clarity.  
While the SOW speaks in terms of full functionality on either system, 
it also requires documentation for both systems.  Taken together, the 
requirements reasonably can be read as specifying alternative 
operability or dual/simultaneous operability.  When the agency then 
advised offerors that "[e]ach server must be capable of operating with 
both operating systems," while intending that the servers be capable 
of operating with either system, the agency exacerbated the ambiguity.  
Similarly, the FSS requirement, as stated in the RFQ, does not 
indicate when the products had to be on the FSS.  However, when a 
vendor asked if this meant on the FSS as of the RFQ issue date, the 
Army's response of "correct" unequivocally validated the vendor's 
interpretation, even though this was not what the agency intended. 

SMS also contends that, because the vendors' prices and products have 
been exposed, canceling the RFQ and resoliciting will foster an 
improper auction and technical leveling.  Where, as here, the 
corrective action proposed by the agency is not improper, the prior 
disclosure of information in an offeror's proposal does not preclude 
the corrective action, and the resolicitation of the same requirement 
does not constitute an improper auction.  See Unisys Corp., supra; 
Sperry Corp., B-222317, July 9, 1986, 86-2 CPD  para.  48 at 4.  The 
corrective action does not constitute improper leveling, and the 
possibility that the purchase order may not have been issued based on 
a fair competition has a more harmful effect on the integrity of the 
competitive procurement system than the fear of an auction; the 
statutory requirements for competition take priority over the 
regulatory constraints on auction techniques.  See Unisys Corp., 
supra.  

The protest is denied.

Comptroller General
of the United States