BNUMBER:  B-281289 
DATE:  January 20, 1999
TITLE: APTUS Company, B-281289, January 20, 1999
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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:APTUS Company

File:     B-281289

Date:January 20, 1999

S. Emanuel Lin for the protester.
Joshua A. Kranzberg, Esq., and Earl T. Hilts, Esq., Department of the 
Army, for the agency.
Jennifer D. Westfall-McGrail, Esq., and Christine S. Melody, Esq., 
Office of the General Counsel, GAO, participated in the preparation of 
the decision.

DIGEST

1.  General Accounting Office (GAO) will not consider argument that 
agency has not correctly defined its own needs because GAO's role is 
to ensure that the statutory requirements for full and open 
competition are met, not to determine whether different specifications 
might better meet the agency's needs.

2.  Under solicitation for commercial items, award to vendor whose 
quotation is reasonably judged to be best in terms of past performance 
and price is proper where solicitation provides for evaluation of past 
performance and price, and does not provide for comparative evaluation 
of vendors' technical solutions.

DECISION

APTUS Company protests the issuance of a purchase order to Troy Energy 
& Automation under request for quotations (RFQ) No. DAAA22-98-Q-0368, 
issued by the Department of the Army, Watervliet Arsenal, for upgrade 
of the Arsenal's automated storage and retrieval system (AS/RS).  
APTUS contends that Troy's technical solution does not meet the 
requirements of the RFQ and that its own solution was superior to 
Troy's.

We deny the protest.

BACKGROUND

The AS/RS is a computer-controlled warehouse storage system.  Items 
are stored on pallets at 1,600 locations on a multi-level high-rise 
rack system; the pallets are moved to and from storage locations by a 
mechanical system that includes rollers and two cranes.  A host 
computer, the PDP-11/44, controls the pallet movements and stores 
information regarding location using a database management system 
(DBMS).  The host computer sends commands to a stacker controller 
system, which consists of two PDP-11/03 microprocessors, one located 
on each of the cranes.  The PDP-11/03s  send commands to programmable 
logic controllers (PLC) (located on the cranes and on the warehouse 
wall); the PLCs in turn send commands to the cranes and rollers.

The Army explained, by way of background in the RFQ's statement of 
work (SOW), as follows:

     Since the AS/RS holds many parts that are needed for daily 
     mission work, it is necessary that it operate reliably and 
     efficiently.  However, in 1985, the stacker experienced a failure 
     that shut down the system for several days.  The root cause of 
     the problem was never determined although it may have involved 
     the DBMS regarding a pointer for a specific data address.  At 
     that time, it was discovered that the DBMS was no longer 
     supported by [the manufacturer].  By manually updating the 
     database to reflect that day's transactions, the system was then 
     restarted.  Multiple system failures have occurred since the 
     summer of 1991.  The number of failures peaked in 1996 incurring 
     extensive downtime.  

SOW  sec.  1.2.3.

The agency sought to replace the DBMS software in order to avoid a 
recurrence of the problem; to obtain a DBMS that is vendor-supported; 
and to take advantage of the latest technology.  SOW  sec.  1.2.4.  It also 
sought to replace or upgrade the existing hardware platform to 
accommodate the new software.  Id.

The RFQ, which was issued using simplified acquisition procedures 
pursuant to the authority of Federal Acquisition Regulation (FAR) 
Subpart 13.5 (Test Program for Certain Commercial Items),[1] 
contemplated the award of a fixed-price purchase order with a 12-month 
performance period.  The SOW required replacement of the host 
computer, replacement or upgrade of related peripheral equipment (such 
as printers and tape drive), and replacement of the DBMS software.  
SOW  sec.  1.2.6.1.1.  It did not require the replacement or upgrading of 
other components of the AS/RS, such as the stacker controller system.  
Vendors were required to provide technical submissions addressing the 
requirements of the SOW, but the RFQ did not provide for a comparative 
evaluation of those technical submissions.  Instead, it provided for 
award based on an evaluation of price and past performance.[2]

Four vendors submitted technical solutions by the July 28, 1998 due 
date.  After several rounds of questions and answers, the submissions 
of APTUS and Troy were determined to be technically acceptable, and 
the submissions of the other two vendors were determined unacceptable.  
APTUS's submission was found acceptable despite the fact that the 
protester proposed to make changes to the AS/RS beyond those required 
by the SOW.  In this regard, APTUS proposed not simply to replace the 
host computer, related peripherals, and the DBMS, but also to 
reconfigure the AS/RS by removing the PDP 11/03s and re-routing 
communications from the PLCs to the host computer.

After determining that the technical solutions of both Troy and APTUS 
were acceptable, the contracting officer invited both to submit what 
was referred to as best and final offers (BAFO); Troy's BAFO price was 
$268,800, while APTUS's was $272,400.  The contracting officer 
determined that both APTUS's and Troy's past performance were 
satisfactory.  Since Troy's technical solution was acceptable, its 
past performance was satisfactory, and its price was low, the 
contracting officer determined that award to Troy was in the best 
interest of the government.  The agency issued a purchase order to 
Troy on September 9.  APTUS obtained a copy of Troy's solution 
pursuant to a Freedom of Information Act request on October 3, and 
protested to our Office on October 13.

ANALYSIS

APTUS argues that the purchase order should not have been issued to 
Troy because Troy's quotation does not provide for a reliable and 
efficient AS/RS, as required by section 1.2.3 of the SOW.  In this 
regard, the protester contends that the AS/RS will function less 
efficiently and reliably if the PDP-11/03s are left in than if they 
are taken out, because the inclusion of unnecessary hardware in a 
system will degrade its performance.[3]  The PDP-11/03s are 
unnecessary hardware, the protester maintains, because the PDP-11/44 
can run the programs they are running and communicate directly with 
the PLCs.

The RFQ here did not ask vendors to reconfigure the AS/RS; it asked 
them to replace the central computer, related peripherals, and DBMS 
software only.  The protester's argument that replacement of the 
central computer and software will not be enough to guarantee a 
reliable and efficient system is thus, in essence, an argument that 
the agency has not correctly defined its own needs.  This is not an 
argument that we will consider; our role is to ensure that the 
statutory requirements for full and open competition are met, not to 
determine whether different specifications might better meet the 
agency's needs.  Purification Envtl., B-259280, Mar. 14, 1995, 95-1 
CPD  para.  142 at 3. 

APTUS also argues that it should have received the award because its 
solution was technically superior to Troy's.

Because this RFQ was issued pursuant to the authority of FAR Subpart 
13.5, the requirements of FAR Part 12 (Acquisition of Commercial 
Items) applied to it.[4]  FAR  sec.  13.500(c).  FAR  sec.  12.301(c) permits 
the inclusion of FAR  sec.  52.212-2 (Evaluation-Commercial Items) or a 
similar provision setting forth the evaluation factors when the use of 
evaluation factors is appropriate.  The RFQ here did not incorporate 
FAR  sec.  52.212-2 or otherwise provide for a comparative evaluation of 
technical submissions, however; it provided only for the evaluation of 
past performance and price.  Under such circumstances, selection of 
the vendor judged to be best in terms of past performance and price 
who provided a technically acceptable submission was clearly 
contemplated.  Vistron, Inc., B-277497, Oct. 17, 1997, 97-2 CPD  para.  107 
at 4.  In other words, even assuming for the sake of argument that 
APTUS's submission was technically superior to Troy's, the protester 
was not entitled to award on this basis.[5]

Finally, APTUS argues that award to Troy was improper because, while 
the RFQ required that a vendor have a good past performance record to 
be considered for award, the contracting officer determined that 
Troy's record was merely satisfactory.

As APTUS points out, the RFQ required that vendors have a good past 
performance record to be considered for award; it also provided that 
to ensure a good past performance rating, vendors must have delivered 
quality conforming products/services in the time specified.  With 
regard to Troy's past performance, the contracting officer noted that 
Troy had recently completed two projects at the Arsenal and that both 
had been completed "in a timely and quality (technically satisfactory) 
manner"; he therefore concluded that Troy had a "satisfactory" past 
performance record.   Memorandum for the Record, Sept. 9, 1998.  
Although the contracting officer used the adjective "satisfactory" 
rather than the adjective "good" to describe Troy's record, we do not 
think that he intended thereby to imply that Troy's record was less 
than good; Troy's performance in fact met the standard for a good 
rating, i.e., it had delivered items/services of acceptable quality on 
time.

The protest is denied.

Comptroller General
of the United States     

1. FAR Subpart 13.5 authorizes, as a test program, use of simplified 
procedures for the acquisition of supplies and services in amounts 
greater than the simplified acquisition threshold but not exceeding $5 
million, including options, if the contracting officer reasonably 
expects, based on the nature of the supplies or services sought, and 
on market research, that offers will include only commercial items.  
FAR  sec.  13.500(a).

2. The RFQ at page 21 incorporated by reference Watervliet Arsenal's 
own "Simplified Past Performance Evaluation" clause, which provides as 
follows:

            Award will be based on an evaluation of both price and 
            past performance.  Past performance evaluation includes 
            quality, timeliness of performance and responsiveness 
            (general attitude toward addressing questions/problems).  
            Award may be made to other than the low offeror when after 
            evaluating past performance, it is determined by the 
            contracting officer to be in the government's best 
            interest.  Price will always be an important factor and 
            therefore offerors should make diligent efforts to control 
            costs and submit fairly priced quotes.  To be considered 
            for award you must have a good past performance record 
            based upon information available to the contract 
            specialist and offer a reasonable price. . . . All 
            offerors are reminded that to ensure they have a good past 
            performance rating they must adhere to the following 
            standard:
            
            QUALITY CONFORMING PRODUCTS/SERVICES MUST BE DELIVERED IN 
            THE TIME SPECIFIED. 

3. According to the protester,

            [t]he rule of thumb in design of a reliable system is to 
            use as little hardware as possible, unless the hardware we 
            bring into the system can offer us something that the 
            software can not deliver.  This is because of the fact 
            that the hardware will fail us sooner or later.  However, 
            the software, once debugged, won't.  The more hardware we 
            use, the more troubles we'll get to keep them running and 
            the less money we'll get to keep to ourselves.

Protester's response to agency questions, Sept. 3, 1998, at 2.  

4. FAR Subpart 12.3 requires that solicitations for commercial items 
include the provisions at FAR  sec.  52.212-1 (Instructions to 
Offerors-Commercial Items), 52.212-3 (Offeror Representations and 
Certifications-Commercial Items), 52.212-4 (Contract Terms and 
Conditions-Commercial Items), and 52.212-5 (Contract Terms and 
Conditions Required to Implement Statutes or Executive 
Orders-Commercial Items).  FAR  sec.  12.301(b).  The RFQ here, at 1, block 
27a, incorporated all of these clauses by reference. APTUS argues that 
one of these clauses, FAR  sec.  52.212-1(g), required the agency to 
perform a comparative technical evaluation of the offers received 
because it refers to consideration of "the offeror's best terms from a 
price and technical standpoint."  This interpretation is erroneous.  
FAR  sec.  52.212-1, as its caption states, sets out a standard set of 
basic procedures to be followed in commercial item acquisitions. The 
subparagraph on which APTUS relies states that the government intends 
to make award without discussions, and, in that context, advises 
offerors to submit their best terms from a price and technical 
standpoint for consideration by the agency.  It in no way suggests 
that a comparative evaluation of technical submissions was 
contemplated or required.

5. To the extent that the protester is also arguing that the agency 
improperly failed to take technical submissions into account in 
selecting an awardee, it is incorrect; the Army did evaluate 
submissions for technical acceptability.  What it did not do was 
perform a comparative evaluation of submissions.