BNUMBER: B-281030; B-281030.2
DATE: December 21, 1998
TITLE: Beckman Coulter, B-281030; B-281030.2, December 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:Beckman Coulter
File:B-281030; B-281030.2
Date:December 21, 1998
Alison L. Doyle, Esq., C. Stanley Dees, Esq., and Traci M. Vanek,
Esq., McKenna & Cuneo, for the protester.
Richard L. Moorhouse, Esq., Holland & Knight, for Spectrofuge
Corporation of North Carolina, Inc., an intervenor.
Michael Colvin, Department of Health & Human Services, for the agency.
Jacqueline Maeder, Esq., and Paul I. Lieberman, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Award is improper where awardee's proposal does not conform to
material solicitation requirements regarding preventive maintenance
services, contract termination, and submission of a fixed-price offer.
DECISION
Beckman Coulter, Inc. protests the award of a contract to Spectrofuge
Corporation of North Carolina, Inc. under request for proposals (RFP)
No. 273-98-P-0008, issued by the National Institute of Environmental
Health Sciences (NIEHS), Department of Health and Human Services, for
on-going preventive maintenance, rotor inspection and emergency repair
of Beckman scientific instruments/equipment at NIEHS, Research
Triangle Park, North Carolina. Beckman challenges the agency's
evaluation of technical proposals and asserts that Spectrofuge
submitted a technically noncompliant best and final offer (BAFO) which
the agency attempted to cure by engaging in improper discussions.
We sustain the protest.
The RFP, issued as a commercial item solicitation on May 20, 1998,
contemplated the award of a fixed-price contract for a 1-year base
period with four 1-year options for the maintenance, repair and
relocation[1] of certain scientific equipment manufactured by Beckman.
RFP, Description and Specifications at 23. Offerors were to "furnish
all necessary personnel, labor, equipment, tools, parts, materials and
supplies to prepare and execute complete maintenance, repairs, and
relocations to Government-owned Beckman [i]nstruments." RFP,
Amendment 1, Supplies or Services and Prices, at 3. The RFP listed
the Beckman instruments that were to be covered (providing model
numbers and quantities), and stated that the contractor was to provide
"trained personnel with experience in the repair and maintenance of
the equipment types listed herein." RFP, Description and
Specifications at 24. Offerors were required to provide pricing for
one and two preventive maintenances (PM) per year, with the agency
determining which of the PM schedules to award. RFP, Amendment 1,
Supplies or Services and Prices at 3-22a. In the specifications
section, the RFP provided that "[e]quipment shall be maintained by the
contractor to 100% of original Beckman specifications and technical
updates." RFP, Description and Specifications at 25.
The solicitation provided that award would be made "to the responsible
offeror whose offer conforming to the solicitation will be most
advantageous to the Government, price and other factors considered"
and that technical proposals would be scored on the basis of plan of
operation (40 points), experience of offeror (30 points), and
experience of key senior service and field engineers (30 points), for
a possible technical score of 100 points. RFP at 42. Under plan of
operation, offerors were advised that the agency would evaluate:
the offeror's specific plans for insuring that preventive
maintenance
and remedial repairs are performed at the highest possible level
of
quality and responsiveness and to 100% of original Beckman
specifications and technical updates. Plan should include
details
on availability of senior service engineering staff, quality
control, and
availability of manufacturer's approved spare parts.
Id.
The RFP advised that under the experience factor offerors would be
evaluated on their "experience in providing similar types of service
in both the government and private sector," and under the experience
of key senior service and field engineers factor, offerors would be
evaluated on the "experience of [their] engineering staff in providing
these types of services on this equipment in an operation of this size
and type," and that "[p]roof of training must be provided." Id. For
award purposes, the RFP stated that the agency would evaluate offers
by adding the total price for all options to the total price for the
basic requirement. The RFP provided that price would be point-scored,
with the lowest priced proposal receiving the maximum 25 points.
Other acceptable proposals would be:
awarded a proportional share of points with the lowest priced
acceptable offeror being the base. For example, points awarded
an offer 25% higher than the lowest price will be reduced by 25%.
Id. Thus, there was a maximum possible 125 technical/price point
score for each proposal.
Beckman and Spectrofuge were the only offerors to submit proposals by
the amended June 10, 1998 closing date. The proposals were evaluated
by a four-member technical evaluation committee and both proposals
were included in the competitive range.
Written discussions were held with both offerors and the record shows
that, among other things, the agency asked the awardee to address the
supplemental terms and conditions that Spectrofuge had included in its
proposal. Specifically, at Attachment B, page 56 of its proposal,
Spectrofuge included "Supplemental Terms and Conditions" and at
Attachment B, page 57, the awardee included its "Annual Maintenance
Service Agreement." The awardee's "Supplemental Terms and Conditions"
included, among other things, five "excluded services" listed as (a)
through (e) and including at (b) "moving or re-installation of . . .
instrument(s)."[2] The "Supplemental Terms and Conditions" also
allowed either party to "terminate this agreement within 30 days
written notice to the other party." Spectrofuge's Annual Maintenance
Service Agreement specifically stated that its service "does not
include rotors, chambers, consumable supply items, accessories,
software, software related problems, and manufacturer-recommended
modifications." The Agreement also stated that "[a]ny component or
part determined by Spectrofuge to be defective shall be replaced (upon
authorization by the Buyer) at Spectrofuge's then current price." The
agency requested that Spectrofuge "[c]larify the supplemental terms
that are inconsistent with stated contract requirements (i.e.,
relocation of instruments not covered by Spectrofuge - page 56 of your
proposal). This page 56 in its entirety is not acceptable to the
NIEHS." Opening of Discussions Letter, July 14, 1998, Question 2.
BAFOs were received from both offerors on or before the July 20
closing date. Contracting Officer's Statement, Paragraph 2. In its
BAFO, Spectrofuge addressed the inconsistent supplemental terms on
page 56 of its proposal, stating as follows:
The inclusion of the Supplemental Terms and Conditions (page 56)
of the Spectrofuge Corporation standard maintenance contract was
submitted only to include Excluded Services as so entitled, in
order to address misuse and abuse of instrumentation by a user.
This page was not meant to be included in its entirety. Since
this
RFP requires that reinstallation of instrumentation be included
in
this contract, (b) should be discarded. Spectrofuge Corporation
would provide reinstallation of instrumentation as part of this
contract and at no extra cost to the government.
Spectrofuge's BAFO, July 17, 1998, Paragraph 2.
Thus, in its BAFO, Spectrofuge stated that it would "discard" its
reinstallation exception and provide relocation/reinstallation
services as required by the solicitation.
Beckman's technical BAFO was awarded [deleted] points (out of a
possible 100) and Spectrofuge's BAFO was awarded [deleted]. In its
evaluation of BAFOs, however, the agency noted that the awardee's
response concerning the inconsistent terms at page 56 of its proposal
"is inadequate. The termination and other clauses still exist. These
supplemental terms cannot be included as part of the NIEHS contract."
Technical Evaluation Committee Memorandum (Aug. 6, 1998) at second
unnumbered page.
Spectrofuge's total price for the base and option years was $[deleted]
for one PM per year and $716,950 for two PMs per year. Beckman's
total price for the base and option years was $[deleted] for one PM
per year and $[deleted] for two PMs per year.[3] As required by the
solicitation, Spectrofuge received 25 points for the lowest acceptable
price for both the one and the two PM per year requirements for a
total technical/price point score of [deleted]. Agency Report at 1.
Beckman received a portion of the 25 points based on the percentage of
the price difference for each schedule, specifically [deleted] price
points for the one PM schedule and [deleted] price points for the two
PM schedule, resulting in total technical/price scores for the one and
the two PM schedules of [deleted] and [deleted], respectively. Id.
The agency noted that "[t]here are no further questions to either
offeror. The award should be made based on price. Incompletely
resolved issues listed under technical [concern] #2 . . . for
Spectrofuge should be addressed in negotiations, if necessary."
Technical Evaluation Committee Memorandum (Aug. 6, 1998) at third
unnumbered page.
Subsequently, on August 13, a representative of Spectrofuge met with
agency personnel to discuss "two questions that needed to be answered
by Spectrofuge before award." Summary of Negotiations, Attachment A
at 3. As relevant here, the agency again questioned Spectrofuge about
the exclusions submitted in its proposal. The Spectrofuge
representative indicated that while it was standard practice for
Spectrofuge to submit the exclusions, "they could be excluded from the
contract."[4] Id. Based on this meeting, the contracting officer
states that "[t]hese issues were resolved to the satisfaction of the
Government." Contracting Officer's Statement, Paragraph 2. Because
Spectrofuge received the higher score, it was awarded the contract for
two PMs per year.[5] An award notification, dated August 27, was sent
to Beckman. After a September 9 debriefing, Beckman protested to our
Office.
Beckman contends that Spectrofuge's BAFO was technically unacceptable
and that the August 13 post-BAFO meeting between a Spectrofuge
representative and agency personnel constituted improper discussions
and unequal treatment because the agency was attempting to permit
Spectrofuge to remedy its noncompliant BAFO. Supplemental Protest,
Oct, 26, 1998, at 4; Protester's Supplemental Comments, Nov. 16, 1998,
at 1-9. Beckman also argues that while the agency's memorandum
concerning this meeting indicates that the awardee agreed to delete
all exclusions from the contract, "Spectrofuge itself never put this
response in writing." Supplemental Protest, Oct. 26, 1998, at 4-5.
Thus, Beckman argues that, despite these attempts, the contracting
officer actually made award without correcting the deficiencies.
Moreover, Beckman notes that the agency never addressed the exclusions
contained on page 57 of the Spectrofuge proposal. As noted above,
this page excluded service of software-related problems and
manufacturer-recommended modifications. According to the protester,
many Beckman instruments under the solicitation are software driven,
and manufacturer-recommended modifications "are the type of
information that is issued in Beckman's internal technical updates."
Id. at 8. Since the RFP specified that the contractor was to maintain
equipment to manufacturer specifications, including technical updates,
Beckman argues that Spectrofuge had taken exceptions to solicitation
requirements, and that these exceptions indicate that Spectrofuge
"cannot offer its commercial customers software support or technical
updates." Protester's Supplemental Comments, Nov. 24, 1998, at 9.
The protester also argues that page 57 provided that replacement parts
would be separately priced but, because the RFP called for a fixed
price and specified that the contractor was to provide all necessary
equipment, parts, materials and supplies, these services were required
to be included in Spectrofuge's prices. Supplemental Protest, Oct.
26, 1998, at 7.
In negotiated procurements, any proposal that fails to conform to
material terms and conditions of the solicitation should be considered
unacceptable and may not form the basis for an award. Barents Group,
L.L.C., B-276082, B-276082.2, May 9, 1997, 97-1 CPD para. 164 at 10;
Martin Marietta Corp., B-233742.4, Jan. 31, 1990, 90-1 CPD para. 132 at 7.
The agency argues in its response to Beckman's protest that the
"clarifying language" from Spectrofuge's BAFO "eliminated any
potential non-compliant language originally included on pages 56 and
57," and states that it "merely desired to confirm its understanding
of what Spectrofuge had already proposed, with respect to
re-installation of equipment," Supplemental Report, Nov. 6, 1998, at
1-2. However, as discussed below, it is clear from the record that
Spectrofuge's proposal did not comply with the RFP requirements for
maintenance services and included an unacceptable termination clause;
moreover, Spectrofuge's pricing scheme deviated from that called for
in the RFP with the result that its evaluated price understated the
actual cost to the government because Spectrofuge was proposing to
charge the government unspecified prices for replacement parts, in
addition to its offered "fixed price."
The agency's representation in its response to the protest conflicts
with the evaluators' contemporaneous assessment of the BAFOs.
Specifically, the contemporaneous record reflects that after the
evaluation of BAFOs, the evaluators recognized that there were
remaining issues to be resolved regarding the Spectrofuge proposal.
While Spectrofuge's position relating to relocation and reinstallation
of equipment had been clarified in its BAFO, the evaluators believed
that Spectrofuge's response to the discussion question concerning the
exclusions was still "inadequate" because not all exclusions were
deleted from the proposal. Technical Evaluation Committee Memorandum
(Aug. 6, 1998) at second unnumbered page. The evaluators referred to
the remaining exclusions as "incompletely resolved issues" which
should "be addressed in negotiations if necessary." Id. at third
unnumbered page. Moreover, as the protester correctly states, the
exclusions on page 57 were never addressed in discussions. Thus,
these exclusions, including responsibility for software-related
problems and manufacturer-recommended modifications, which were
clearly material RFP requirements, and the addition of unspecified
costs that the proposal allowed Spectrofuge to charge for replacement
parts were never addressed or cured by Spectrofuge in its BAFO.
Moreover, the unilateral termination clause, which the agency
correctly noted was unacceptable, remained part of the proposal. See
Gelco Payment Sys., Inc., B-234957, July 10, 1989, 89-2 CPD para. 27 at
2-3 (bid which attempts to limit government's rights and supplement
bidder's rights under standard termination for convenience clause is
nonresponsive).
The agency's record of the August 13 meeting indicates that the agency
recognized that the exclusions in the Spectrofuge proposal were
material and that they had not been resolved by Spectrofuge's BAFO.
The record specifically states that agency personnel met with the
Spectrofuge representative after the submission of BAFOs to discuss
questions "that needed to be answered by Spectrofuge before award."
Summary of Negotiations, Attachment A at 3. In spite of this,
however, and as the agency, the protester, and the intervenor all
point out, the Spectrofuge proposal was not modified during or after
the August 13 meeting. Indeed, the agency's record of the meeting
suggests that while it was standard practice for Spectrofuge to submit
the exclusions, its representative only agreed that "they could be
excluded from the contract." Id. However, the proposal was never
changed, nor was a written agreement otherwise reached as a result of
the August 13 meeting.[6] Because Spectrofuge included noncompliant
terms and conditions in its proposal, the proposal was technically
unacceptable and could not properly form the basis of award.
Accordingly, we sustain the protest.
Since we find that the agency improperly accepted for award a
materially nonconforming proposal, we recommend that NIEHS reopen
discussions with both offerors, call for another round of BAFOs and
proceed with the source selection process.[7] After reevaluating
BAFOs, if Spectrofuge's proposal is no longer considered the most
advantageous for the government, the agency should terminate
Spectrofuge's contract for the convenience of the government and award
the contract to Beckman. In addition, we recommend that the protester
be reimbursed its costs of filing and pursuing the protest, including
reasonable attorney fees. 4 C.F.R. sec. 21.8(d)(1) (1998). The
protester should submit its certified claim, detailing the time
expended and costs incurred, directly to the contracting agency within
60 days of receiving this decision. 4 C.F.R. sec. 21.8(f)(1).
The protest is sustained.
Comptroller General
of the United States
1."Relocation" is described as the movement of an instrument from one
location to another at the request of a user and returning the
instrument to operational condition. RFP, Description and
Specifications at 23-24.
2. Spectrofuge also excluded services for damage from, among other
things, fire, explosion, riot, lightning, windstorms, hail, flood or
earthquake; decontamination due to spillage; interpretation of data;
and installation of unauthorized Spectrofuge field modifications.
3. The record shows that Beckman actually reduced its prices in its
BAFO to $[deleted] for one PM per year and $1,241,534 for two PMs per
year. The agency improperly failed to consider these price reductions
in both its computation of final technical/price point scores and its
award determination.
4. The summary of negotiations goes on to say, in the next sentence,
"They will be excluded." It is not clear from the document whether
this is meant to be a statement of the government's intent or a
paraphrase of a commitment by the Spectrofuge representative. In any
event, the exclusions were not removed from the proposal (or from the
contract).
5. It is improper to rely, as the agency apparently did here, on a
purely mathematical cost/technical tradeoff because, unless a
solicitation specifically provides for award on the basis of highest
total point scores, these scores are merely intended to be aids for
source selection officials. See Teltara Inc., B-280922, Dec. 4, 1998,
98-2 CPD para. __; SEC, Inc., B-226978, July 13, 1987, 87-2 CPD para. 38 at 3.
Here, while the solicitation explained the scoring of proposals,
including price, it did not state that award would be based on the
mere calculation of the highest combined technical and price scores.
If the agency wants to use such a mechanical approach as the basis for
its award, it should so provide in the RFP.
6. Contrary to the agency's position, it also appears that the
communications which occurred at the August 13 meeting did constitute
improper post-BAFO discussions. Specifically, these communications
were directed at material terms of Spectrofuge's proposal and
materially affected the proposal's potential for award. Federal
Acquisition Regulation (FAR) sec. 15.306(d)(3) (FAC 97-02).
7. Beckman raised additional protest issues, arguing, for example,
that Spectrofuge's proposal was too highly rated because Spectrofuge
cannot meet the requirement to maintain the instruments "to 100% of
original Beckman specifications and technical updates" since Beckman
does not make its technical updates publicly available and, thus,
Spectrofuge has no access to the updates. RFP, Description and
Specifications at 25. In its BAFO, Spectrofuge explained that the
company keeps "abreast of new [original equipment manufacturer]
models" through, among other things, national instrumentation shows,
vendor conferences, and its membership in a service organization whose
members exchange information on new developments in the field.
Spectrofuge's BAFO, July 17, 1998, at Paragraph 3. While Beckman
argues that this response is inadequate, we find reasonable the
agency's conclusion that Spectrofuge could meet the solicitation
requirements. Moreover, it is clear from the record that the agency
was aware Spectrofuge had limited access to Beckman technical updates
and that this weakness was one reason Spectrofuge's proposal was
downgraded. While the protester believes Spectrofuge's scores are too
high, mere disagreement with the agency evaluation does not render the
evaluation unreasonable. Global Assocs., Ltd., B-275534, Mar. 3,
1997, 97-1 CPD para. 129 at 3. We have reviewed the other evaluation
issues raised by Beckman and, based on the protest record, we conclude
that they are without merit.