TITLE:  Digital Systems Group, Inc., B-286931; B-286931.2, March 7, 2001
BNUMBER:  B-286931; B-286931.2
DATE:  March 7, 2001
**********************************************************************
Digital Systems Group, Inc., B-286931; B-286931.2, March 7, 2001

Decision

Matter of: Digital Systems Group, Inc.

File: B-286931; B-286931.2

Date: March 7, 2001

Robert G. Fryling, Esq., and Edward J. Hoffman, Esq., Blank Rome Comisky &
McCauley, for the protester.

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

Maria G. Bellizzi, Esq., General Services Administration, for the agency.

Aldo A. Benejam, Esq., and Christine S. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

1. Protester's allegation that the evaluation of its technical proposal as
posing a "high" risk contradicts the rating of its cost proposal as "low"
risk is denied, where the record shows that technical and cost proposals
were rated separately by different evaluation teams which considered
different factors, and the different ratings merely reflect the independent
judgments of the evaluators and are reasonably supported by the record.

2. Agency was not required to conduct discussions regarding two weaknesses
identified in the protester's proposal regarding its past performance since
the two weaknesses (which pertained to only 2 out of 20 performance
questionnaire items) were not considered significant, and protester's
performance record was rated acceptable overall. Agencies are not required
to point out every element of acceptable proposals that receive less than
the maximum evaluation rating.

3. Protester's allegation that the agency improperly conducted discussions
is denied, where the record shows that during several rounds of discussions,
the agency reasonably led the protester into areas of its proposal requiring
revision, and the protester's failure to make those revisions because it
feared jeopardizing its favorable cost rating reflected its own business
judgment, rather than any improper agency action.

4. Discussions with offeror whose otherwise acceptable proposal took
exception to certain solicitation requirements were unobjectionable where
agency reasonably determined that proposal could be made acceptable through
discussions and that exceptions were primarily the result of defects in
solicitation; ultimate decision to amend the solicitation to cure defects
was unobjectionable since agency advised all offerors of the changed
requirements and all offerors responded to the amended solicitation in final
proposals.

5. Allegation that contracting officer's (CO) multiple roles impermissibly
compromised his independence is denied, where there is no evidence in the
record that the CO had any influence over the evaluation of technical or
cost proposals, or that the CO's carrying out of his responsibilities in any
way compromised the source selection.

DECISION

Digital Systems Group, Inc. (DSG) protests the issuance of a blanket
purchase agreement (BPA) to Oracle Corporation under request for quotations
(RFQ) No. TFW-00-0002, issued by the General Services Administration (GSA),
FTS/Financial Management Systems Services Center, for an integrated
financial management system for the Peace Corps. DSG challenges the issuance
of the BPA on several grounds, including that GSA unreasonably evaluated its
technical and cost proposals; failed to conduct adequate discussions with
DSG; improperly failed to provide DSG with an opportunity to comment on
allegedly negative past performance information obtained from one reference;
and improperly conducted multiple rounds of discussions to favor Oracle. DSG
also challenges the contracting officer's role in the procurement and
contends that the cost/benefit tradeoff decision was not adequately
justified.

We deny the protest.

BACKGROUND

The RFQ, issued on April 21, 2000, contemplated that GSA would issue a BPA
for the acquisition of an integrated financial management system, for a base
year with up to nine 1-year options. Agency Report (AR) exh. 1, RFQ sect.sect. B.1,
B.5.1, sect. L.19. [1] The RFQ stated that the objective was to procure a fully
integrated financial management system supporting all of the Peace Corps's
financial management and business processes. Id. sect.sect. C.2, C.2.1, at C-11,
C-12.

Vendors were required to submit separate technical and cost proposals, id.
sect. L.2., and were to provide fixed prices for software, maintenance,
training, and documentation (i.e., products), and fixed hourly rates for
technical assistance (i.e., services); the Peace Corps would issue task
and/or delivery orders based on this price list. The RFQ further explained
that task and delivery orders for products only would be issued on a
fixed-price basis, while orders that combined products and services would
establish a ceiling amount or maximum number of hours of work, as
appropriate.

Section M of the RFQ listed management and technical, and cost as evaluation
areas, with the management and technical area considered significantly more
important than cost. The management and technical area contained items and
factors as follows:

 Management and Technical Area

 Item: Management Approach

 Factor: Corporate Ability

 Factor: Performance Record

 Item: Functional/Technical

 Factor: Functional
 Requirements

 Factor: Technical Requirements

 Item: Products and Services

 Factor: Implementation

 Factor: Training

 Factor: Software Support

Id. sect. M.

Within the cost area, the RFQ stated that proposals would be evaluated to
determine the expected contract cost and realism. In addition, the
government was to perform a price analysis for completeness, realism,
reasonableness, and risk. RFQ sect. M.3.4.2. The evaluation was to include a
risk assessment for the overall management and technical area and for each
of the items listed within the management and technical area. In addition,
the RFQ stated that the government would assess the technical risk
associated with the vendor's schedule, cost/price, and performance. Issuance
of the BPA was to be based on the proposal deemed to provide the best
overall value to the government. Id. sect. M.2.

Three vendors, including DSG and Oracle, responded to the RFQ by the time
set on June 12. A source selection evaluation board (SSEB) evaluated the
technical and management area by assigning color ratings of blue
(exceptional), green (acceptable), yellow (marginal), or red (unacceptable),
at the area and item levels; and risk ratings of low, moderate, or high at
the area, item, and factor levels. Based on that evaluation, the SSEB
prepared clarification reports (CR) and deficiency reports (DR) for all
vendors. The cost team separately evaluated costs to determine expected
contract costs, and to assess completeness of proposals, and cost realism,
reasonableness, and risk.

In addition to written proposals, vendors were requested to perform an
operational capabilities demonstration to provide the Peace Corps with a
better understanding of the functional and operational capabilities of the
vendors' proposed software, and to verify that the offered software
satisfied the RFQ's requirements. The SSEB then revised its initial
evaluation reports, taking into account the demonstrations, as well as the
vendors' responses to the CRs and DRs. The agency also prepared points for
negotiation (PFN) for each vendor.

Following the evaluations, the agency conducted written and oral
discussions, requested and received final proposal revisions (FPR), and
evaluated proposals based on FPRs. Based on the results of the evaluation,
it concluded that discussions had been inadequate. Accordingly, discussions
were reopened with all vendors and another round of FPRs requested and
evaluated. On October 18, the agency amended the RFQ to cure certain defects
in the solicitation, reopened discussions with all offerors, and requested
and reevaluated at third round of FPRs. On November 9, the SSEB submitted
its finalized evaluation to the source selection advisory council (SSAC).

The following matrix summarizes the SSEB's overall technical evaluation
results at the area and item levels:

                    Oracle           DSG              Offeror A

                    Color/Risk       Color/Risk       Color/Risk

 Mgmt/Technical     Green/Moderate   Yellow/High      Yellow/High

 Mgmt Approach      Blue/Moderate    Green/Moderate   Green/High

 Funct. & Tech.     Green/Moderate   Yellow/High      Yellow/High

 Prods. & Servs.    Blue/Low         Green/Moderate   Green/Moderate

AR exh. 5.a, SSEB Report to the SSAC, Nov. 9, 2000, at 3-4, 12-13, 19-20.
[2]

A cost team separately evaluated vendors' cost proposals by considering all
known and quantifiable costs for the base and option years, for a total of
10 years. For each

vendor, the cost team developed expected total cost of ownership (TCO),
assessed costs for realism, completeness, and reasonableness, and assigned
each cost proposal an overall risk rating, with the following results:

 Vendor              TCO          Risk

 DSG (Alternate)     $18,173,027  Low

 DSG (Primary)       18,823,089   Low

 Offeror A           25,762,505   Moderate
 (Primary)

 Oracle              28,164,718   Moderate
 (Alternate)

 Offeror A           28,294,020   Moderate
 (Alternate)

 Oracle (Primary)    32,286,045   Moderate

AR exh. 5.a, Cost Evaluation Report, at 8.

The SSAC reviewed the SSEB's report, including the strengths, weaknesses,
risks, and color ratings assigned the proposals, and found Oracle's proposal
technically superior to those of the other two vendors. Based on its review,
the SSAC specifically concluded that the superior technical ratings and
lower risks associated with Oracle's approach justified paying a premium for
that firm's proposal, and recommended that the source selection authority
(SSA) issue a BPA to Oracle. AR exh. 7, SSAC Analysis Report, Nov. 13, 2000,
at 15. The SSA concurred with the SSEB's findings and the SSAC's
recommendation, and issued the BPA to Oracle. Id. exh. 8, Source Selection
Decision, Nov. 16, 2000. This protest followed a debriefing by GSA.

PROTESTER'S CONTENTIONS

DSG challenges the issuance of the BPA to Oracle on several grounds. First,
DSG maintains that the evaluation of its proposal was unreasonable. In this
regard, DSG primarily argues that the "high" risk rating assigned its
technical proposal is inconsistent with the finding of the cost team that
its cost proposal presented a "low" risk. With respect to the adequacy of
discussions, DSG also argues that the agency effectively precluded DSG from
correcting identified weaknesses in its proposal because DSG feared that
making the necessary corrections would jeopardize the low risk rating
assigned its cost.

DSG also argues that the agency improperly failed to provide DSG with an
opportunity to comment on allegedly negative past performance information
GSA obtained from one reference. The protester further argues that GSA
improperly conducted multiple rounds of discussions which favored Oracle.
DSG also objects to the contracting officer's (CO) role in this procurement,
and alleges that he failed to adequately document the cost/technical
tradeoff decision.

DISCUSSION

As a preliminary matter, the RFQ stated that the agency intended to issue a
BPA against the vendor's GSA federal supply schedule contract. Accordingly,
the provisions of Federal Acquisition Regulation (FAR) Subpart 8.4 apply
here. Those provisions anticipate agencies reviewing vendors' federal supply
schedules--in effect, their catalogs--and then placing an order directly
with the schedule contractor that can provide the supply or services that
represent the best value and meets the government's needs. FAR
sect. 8.404(b)(2); Amdahl Corp., B-281255, Dec. 28, 1998, 98-2 CPD para. 161 at 3.
Pursuant to FAR sect. 8.402, GSA has established special ordering procedures
applicable where, as here, the government's requirement involves products as
well as services. [3] Those procedures direct the agency to prepare a
statement of work describing the work to be performed and to notify vendors
of the basis to be used for selecting a vendor. The procedures also state
that the agency may ask vendors to submit a project plan responding to the
statement of work, as well as information on the vendors' experience or past
performance of similar tasks. The procedures provide that the ordering
office should select the contractor that represents the best value.

Further, where the agency intends to use the vendors' responses as the basis
of a detailed technical evaluation and cost/technical tradeoff, it may
elect, as GSA did here, to use an approach that is like a competition in a
negotiated procurement. Where the agency does that and a protest is then
filed, we will review the agency's actions to ensure that the evaluation was
reasonable and consistent with the terms of the solicitation. COMARK Fed.
Sys., B-278343, B-278343.2, Jan. 20, 1998, 98-1 CPD para. 34 at 4-5.
Specifically, the record here is clear that GSA treated vendors' responses
as if it were conducting a negotiated procurement. For instance, the RFQ
specifically refers to discussions and the evaluation of proposals. RFQ
sect. L.2.2. In addition, the Proposal Evaluation Guide prepared for this
acquisition provides specific procedures for the SSEB to conduct detailed
evaluations, for establishing a competitive range, and for conducting
discussions. AR exh. 2.a. Accordingly, while the provisions of FAR Part 15,
governing contracting by negotiation, do not directly apply, Computer
Prods., Inc., B-284702, May 24, 2000, 2000 CPD para. 95 at 4, we analyze DSG's
contentions by the standards applied to negotiated procurements.

DSG argues that the evaluation of its technical and cost proposals was
"contradictory." According to DSG, it was unreasonable for the agency to
rate DSG's cost proposal as "low" risk, while at the same time assigning a
"high" risk rating to its technical proposal under the functional/technical
item. DSG also argues that the agency conducted inadequate discussions with
the firm.

In its report to our Office, GSA provided a detailed response to the
evaluation and discussion challenges DSG raised in its protest. In its
comments, however, DSG did not rebut any aspect of the agency's explanation
concerning the allegedly contradictory evaluation or alleged lack of
adequate discussions. Instead, DSG requested that these issues be decided on
the existing record. See 4 C.F.R. sect. 21.3(i) (2000). This decision addresses
the specific issues discussed in DSG's comments, as well as some examples of
the issues decided on the record.

Evaluation of DSG's Proposal

The evaluation of technical proposals, including the evaluation of past
performance, is a matter within the contracting agency's discretion, since
the agency is responsible for defining its needs and the best method of
accommodating them. Federal Envtl. Servs., Inc., B-260289, B-260490, May 24,
1995, 95-1 CPD para. 261 at 3. In reviewing an agency's technical evaluation, we
will not reevaluate the proposals, but will examine the record of the
evaluation to ensure that it was reasonable and in accordance with the
stated evaluation criteria. Id. Technical evaluators have considerable
latitude in assigning ratings which reflect their subjective judgments of a
proposal's relative merits. I.S. Grupe, Inc., B-278839, Mar. 20, 1998, 98-1
CPD para. 86 at 5. Evaluators may have different judgments as to a proposal's
merits, and one evaluator's scoring is not unreasonable merely because it is
based on judgments different from those of other evaluators. Arsenault
Acquisition Corp.; East Mulberry, LLC, B-276959, B-276959.2, Aug. 12, 1997,
97-2 CPD para. 74 at 4.

With respect to the evaluation issues to be decided on the record, we have
reviewed the record and GSA's detailed explanation and find nothing
unreasonable or contradictory about the evaluation of DSG's technical and
cost proposals. The agency explains, and the record shows, that technical
and cost proposals were evaluated separately by different teams comprised of
different evaluators, each of whom assigned different risk ratings taking
into consideration a variety of factors. The cost team found DSG's costs
were complete, reasonable, and adequate to implement its proposed solution,
and concluded that DSG's proposal presented a low risk. See AR exh. 5.a,
Cost Evaluation Report. By contrast, the SSEB documented numerous technical
and functional risks with DSG's approach, which would likely disrupt the
performance schedule, increase cost, or degrade performance, resulting in a
"high" risk rating for this item. See AR exh. 5.a, SSEB Report to the SSAC,
para. 4.3.2, Item Risk Assessment, at 21.

In view of the numerous risks and weaknesses the SSEB documented--both
functional and technical--which DSG does not contest, we think that an
overall risk assessment of "high" under the functional and technical
evaluation item is reasonably supported. The different risk ratings assigned
DSG's cost and technical proposals merely reflect the independent judgments
of the cost team and the technical evaluators, which assessed different
aspects of the proposals and are reasonably supported by the record. Given
the different conclusions of the evaluators, the fact that the cost and
technical risk ratings differed is neither unreasonable, nor
"contradictory."

We now turn to DSG's allegation that GSA conducted inadequate discussions
with the firm. According to DSG, the agency's discussions effectively
precluded DSG from correcting the identified weaknesses because it feared
that the corrections would jeopardize the reasonableness of, and low risk
rating, assigned its cost proposal. The protester maintains that GSA should
have either advised DSG that its cost was too low, or informed DSG of the
amount GSA was willing to spend if DSG were to correct the weaknesses in its
proposal.

Discussions must be meaningful, equitable, not misleading, and fair. I.T.S.
Corp., B-280431, Sept. 29, 1998, 98-2 CPD para. 89 at 6. While agencies
generally are required to conduct meaningful discussions by leading offerors
into the areas of their proposals requiring amplification, this does not
mean that an agency must "spoon-feed" an offeror as to each and every item
that must be revised or otherwise addressed to improve a proposal. LaBarge
Elecs., B-266210, Feb. 9, 1996, 96-1 CPD para. 58 at 6. Based on our review of
the record, we conclude that DSG's argument is not supported.

Here, the record shows, and DSG does not deny, that during several rounds of
discussions, GSA provided DSG with numerous CRs and DRs. Each separate CR or
DR specifically identified the area of DSG's proposal requiring
clarification or further explanation; listed the corresponding RFQ sections;
and described GSA's specific concern and the requested action. AR exh. 6.a.
In addition, prior to conducting oral discussions, the agency provided DSG
with individual PFNs, each describing distinct areas in DSG's proposal that
remained unclear or required further explanation. AR exh. 6.b. In addition
to the CRs, DRs, and PFNs, the agency subsequently provided DSG with the
strengths and weaknesses the SSEB had identified in its proposal. Thus, to
the extent that DSG argues that it was not adequately apprised of how it
needed to revise its proposal, its contention is without merit. The record
clearly shows that during several rounds of discussions, the agency advised
DSG of areas of its proposal requiring revision, and DSG simply failed to do
so. Further, there is no legal requirement for an agency to inform an
offeror of the premium it is willing to spend for an improved proposal.
Thus, DSG's failure to cure weaknesses in its proposal to its
detriment--because it feared that such corrections might have affected
favorable ratings assigned its cost proposal--reflects DSG's own business
judgment, and was not the result of any improper action on the agency's
part.

Past Performance Evaluation

Within the management approach item, under the performance record evaluation
factor, the agency was to rate two subfactors--experience and customer
satisfaction. RFQ sect. M.3.4.1.1. This evaluation was to include an assessment
of vendors' experience for the last 3 to 5 years for software implemented at
similar institutions (i.e., federal, other public sector, or not-for-profit
agencies); as well as an assessment of corporate experience providing
software products, technical support services, maintenance support, and
training to federal agencies and/or international organizations. Id. In
addition, the agency was to assess the vendors' record of satisfying
customer functional and technical needs, meeting cost, schedule, and
performance requirements, and performing in a professional manner. Id.

To assist the agency in evaluating past performance, vendors were instructed
to provide a list of references for the last 3 to 5 years for five software
implementations for similar institutions, and a description of each project.
RFQ sect. L.3.1.7.2.1. In addition, vendors were responsible for sending a
Performance Record Questionnaire (PRQ), which was provided as an attachment
to the RFQ, to be completed by their references and submitted directly to
the contracting officer. Id. sect. L.3.1.7.2.2. The PRQ requested respondents to
rate the vendors' performance (ranging from "unsatisfactory" to
"exceptional") on approximately 20 items, and provide narrative comments for
each item where appropriate.

The record contains completed PRQs the agency obtained from three of DSG's
references-[DELETED]. [4] The completed PRQs show that except for two items
where the respondent rated DSG "marginal" (concerning DSG's ability to
operate at or below budget and effectiveness of training), DSG's performance
was rated either "satisfactory," "very good," or "exceptional." [5] With
respect to the only two items where [DELETED] rated DSG's performance as
"marginal," the agency explains that the SSEB contacted the [DELETED]
respondent, and verified the accuracy of the ratings. AR at 42. Based on its
consideration of all of the completed PRQs, the SSEB rated DSG's proposal
under the performance record factor as green (acceptable) with moderate
risk.

The protester argues that GSA should have given DSG an opportunity to
comment on the two items rated marginal by the [DELETED] respondent because
they were considered "significant weaknesses" in its proposal. According to
the protester, had the agency given DSG an opportunity to comment on those
two ratings, it could have provided information showing that the marginal
ratings did not accurately reflect its performance. DSG also challenges its
overall performance record rating.

Although, as noted above, FAR Part 15 does not directly apply here, the
provisions of the FAR and our cases provide guidance regarding the adequacy
of discussions. FAR sect. 15.306(d)(3) provides, in pertinent part, that:

[t]he contracting officer shall . . . indicate to, or discuss with, each
offeror still being considered for award, significant weaknesses,
deficiencies, and other aspects of its proposal (such as cost, price,
technical approach, past performance, and terms and conditions) that could,
in the opinion of the contracting officer, be altered or explained to
enhance materially the proposal's potential for award. The scope and extent
of discussions are a matter of contracting officer judgment.

With respect to the two marginal ratings, DSG is essentially arguing that
since its proposal received less than a perfect rating under the performance
record factor, GSA should have discussed with DSG the two marginal ratings
obtained from the [DELETED] respondent so as to provide DSG with an
opportunity to improve its proposal under this factor. [6] We disagree.

First, while the record shows that in its final report to the SSAC, the SSEB
noted the two marginal ratings as weaknesses in DSG's proposal, contrary to
DSG's position, they were considered neither "significant weaknesses" nor
"deficiencies." See FAR sect. 15.306(d)(3). As noted above, the FAR also states
that the CO is to discuss "other aspects" of a proposal, such as past
performance information, which, in the CO's judgment, could be altered or
explained to materially enhance the offeror's potential for award. The
record shows that the three references generally considered DSG's past
performance favorably, rating the firm's performance as either exceptional
or very good overall, and that GSA rated DSG's proposal in this area
acceptable overall, the highest rating other than "exceptional" under the
adjectival rating scheme used here. Under these circumstances, it is
reasonable to conclude that the two marginal ratings in FEMA's PRQ did not
constitute aspects of DSG's proposal that could have been altered or
explained to enhance materially DSG's potential for award, as contemplated
by FAR sect. 15.306(d)(3), and thus that discussions on this point were not
required. See ITT Fed. Servs. Int'l Corp., B-283307, B-283307.2, Nov. 3,
1999, 99-2 CPD para. 76 at 16; MCR Fed., Inc., B-280969, Dec. 14, 1998, 99-1 CPD
para. 8 at 11, citing DAE Corp., B-259866, B-259866.2, May 8, 1995, 95-2 CPD
para. 12 at 4-5 (an agency is not required to discuss every aspect of an
offeror's acceptable proposal that receives less than the maximum score).
[7]

DSG also argues that the agency unreasonably rated its performance as only
acceptable, pointing out that most of the responses GSA obtained from its
references rated its performance either as "very good" or "exceptional."
According to DSG, even assuming that the two marginal ratings obtained from
[DELETED] were accurate, its proposal should have been rated better than
acceptable overall--i.e., exceptional--under the performance record factor.
We disagree. As even DSG recognizes, the completed PRQs from DSG's
references included several items rated "satisfactory" and "very
good"--i.e., lower than "exceptional" ratings--indicating that those
respondents concluded that DSG's performance did not warrant a rating of
"exceptional" for those items. Accordingly, based on our review of the
completed PRQs in the record, we think that the SSEB reasonably rated DSG's
performance record as acceptable overall, rather than as exceptional.

Cost/Technical Tradeoff Issue

DSG next argues that the SSA improperly failed to adequately document the
basis for issuing the BPA to Oracle at a higher cost than DSG's.

In deciding between competing proposals, cost/technical tradeoffs may be
made, the propriety of which turns not on the difference in technical scores
or ratings per se, but on whether the source selection official's judgment
concerning the significance of the difference was reasonable and adequately
justified in light of the RFP evaluation scheme. Southwestern Marine, Inc.;
American Sys. Eng'g Corp., B-265865.3, B-265865.4, Jan. 23, 1996, 96-1 CPD para.
56 at 17; DynCorp, B-245289.3, July 30, 1992, 93-1 CPD para. 69 at 8. Even where
a source selection official does not specifically discuss the cost/technical
tradeoff in the source selection decision itself, we will not object if the
tradeoff is otherwise reasonable based upon the record before us. PRC, Inc.,
B-274698.2, B-274698.3, Jan. 23, 1997, 97-1 CPD para. 115 at 12-13.

Based on our review of the SSEB's final report to the SSAC, and the SSAC's
findings, we conclude that the SSA's tradeoff decision is reasonably
supported. For instance, in its report, for each of the three proposals
considered, the SSEB documented the specific strengths and weaknesses found
under all of the evaluation items and factors. The record shows that the
SSEB presented to the SSAC a detailed description of the strengths,
weaknesses, risks, and rationale for the color ratings at the item and area
levels for each proposal. The SSAC accepted the SSEB's findings, and,
relying on those findings, conducted an in-depth comparative analysis of the
proposals to make its recommendation to the SSA. Below we discuss some of
the SSAC's most significant points.

The SSAC noted that at the highest level of the evaluation spectrum, the
management and technical area, Oracle's proposal was rated green
(acceptable), while DSG's proposal was rated yellow (marginal). The SSAC
further noted that at item levels, Oracle's proposal was rated blue
(exceptional) under the management approach item, while DSG's proposal was
rated green (acceptable). Under the functional and technical item, Oracle's
proposal was rated green (acceptable), while DSG's proposals were rated
yellow (marginal). Finally, the SSAC noted that under the products and
services item, Oracle's proposal was rated blue (exceptional), while DSG's
proposal earned a lower rating of green (acceptable). In sum, the SSAC
concluded that Oracle's proposal was rated technically superior to DSG's
(and Offeror A's) in all evaluation areas and item levels.

In terms of specific strengths and weaknesses, the SSAC recognized that the
SSEB identified 46 strengths and only 7 weaknesses associated with Oracle's
proposal, compared with only 16 strengths and 24 weaknesses in DSG's
proposal. In its final report, the SSAC discussed at length each of the
significant strengths and weaknesses for each proposal considered, and
included a detailed narrative description explaining the various aspects of
the strengths and weaknesses which make clear why the SSAC concluded that
Oracle's proposal was technically superior to either DSG's or Offeror A's
proposal. Based on its exhaustive comparative analysis, the SSAC concluded
that "the superior technical score, the lower risk rating, and the technical
strengths identified by the [SSEB] in the Oracle proposal, justify paying a
higher cost for Oracle's proposal," and recommended to the SSA that Oracle
be selected for issuance of the BPA. AR exh. 7, SSAC Analysis Report, supra,
at 15.

Although the SSA's tradeoff analysis between Oracle's and the two competing
vendors' proposals was only minimally explained in the source selection
decision itself, based on our review of the SSEB's and SSAC's detailed
reports, we conclude that the basis for his selection is reasonable and
consistent with the RFQ's evaluation and award scheme. The SSA recognized
that Oracle's proposal was rated technically superior with lower overall
risk than either of the competing vendors' proposals. In addition, it is
clear that the SSA acknowledged that although Oracle's evaluated TCO was
higher than either DSG's or Offeror A's, Oracle's proposal was deemed to
present the best overall value to the government. Based on our review of the
SSEB's findings which rated Oracle's proposal technically superior, and the
SSAC's reports underlying the SSA's selection decision, we find no evidence
that the SSA's decision to issue the BPA to Oracle was unreasonable.

Supplemental Protest Issues

In a supplemental protest, DSG maintains that GSA conducted multiple rounds
of discussions that improperly favored Oracle. In this regard, DSG contends
that during several rounds of discussions, GSA improperly advised Oracle of
deficiencies remaining in its proposal which precluded award to that firm.
DSG also objects that the multiple roles of the CO as the SSA, a member of
the SSEB, and a member of the cost team, compromised the selection decision.

Multiple Rounds of Discussions

DSG contends that GSA improperly conducted several rounds of discussions
that favored Oracle. Based on our review of the record, we conclude that
there was nothing improper or indicative of bias in the negotiation process.
Below, we summarize the chronology leading up to the agency's decision to
reopen discussions.

Between June 16 and 21, following the initial evaluation, GSA provided the
three vendors with CRs and DRs. Oracle received a total of 37 CRs and 4 DRs;
DSG received 76 CRs and no DRs; and Offeror A received a total of 84 CRs and
4 DRs. After receipt of the responses to the CRs and DRs, on or about August
18, GSA provided the three vendors PFNs listing the strengths, weaknesses,
and risks the evaluators identified at the factor level, to be addressed
during negotiations. Between August 21 and 23, GSA conducted negotiations
with DSG, Oracle, and Offeror A, during which the vendors discussed their
proposals' weaknesses and risks.

The RFQ specifically permitted vendors to take exception to the RFQ
requirements, but required that each exception be related to the specific
RFQ section objected to, and that each exception be fully explained and its
impact supported. RFQ sect. L.3.1.10, at L-11. In its proposal, Oracle had taken
exception to the entire RFQ, but did not provide the requisite explanation
or supporting rationale. During discussions, GSA requested that Oracle
identify the appropriate RFQ sections to which it took exception and furnish
a narrative explaining its rationale consistent with the RFQ. In its
response, on August 28, Oracle provided GSA with 40 exceptions to the RFQ,
which, according to the CO, affected all RFQ sections. Renewed discussions
with Oracle on August 31 and September 5 resolved all exceptions, but for
one related to RFQ sect. H.15 (related to software maintenance and deductions
for maintenance charges). The CO states that it advised Oracle that GSA
considered this remaining exception to be a deficiency in its proposal which
would preclude issuance of the BPA to the firm if not deleted from its FPR.
On September 5, discussions closed, and GSA requested FPRs from all three
vendors.

On September 8, GSA received FPRs from all three vendors. The SSEB's
evaluation of the FPRs revealed that Oracle had not removed the remaining
exception regarding RFQ sect. H.15 from its FPR and that Oracle's proposal also
contained deficiencies related to cost. In addition, the SSEB concluded that
adequate discussions had not been conducted with Offeror A or Oracle. At
this point in the procurement, only DSG's proposal was considered
acceptable.

On September 15, GSA reopened discussions with all three vendors. During
this round of discussions, GSA informed Offeror A that its proposal still
contained 1 technical deficiency and 33 weaknesses. The agency also notified
Oracle that its proposal contained 3 deficiencies and 6 weaknesses, and
informed DSG that its proposal contained 31 weaknesses. GSA then requested,
received, and reevaluated FPRs from all three vendors. Evaluation of
Oracle's response to this round of discussions revealed that the firm had
included language in its FPR which, according to the CO, changed the intent
of sect. H.15, leaving GSA unable to determine whether there would be a related
cost impact, and causing the evaluators to consider this uncertainty as a
weakness in Oracle's proposal.

On September 27, the SSAC and the CO met to discuss the evaluation of FPRs.
The CO states that discussions at that meeting revealed that there were
several issues that remained unresolved. In particular, as a result of that
meeting, GSA concluded that conflicts and inconsistencies existed between
the RFQ and GSA's MAS 70 contracts, and that as a result of those conflicts
and inconsistencies, GSA had serious concerns related to the conditions and
exceptions to material terms of the RFQ contained in Oracle's and Offeror
A's proposals. The agency further explains that although DSG had not
specifically taken exception to any part of the RFQ, the conditions and
exceptions in Offeror A's and Oracle's proposals reflected defects inherent
in the RFQ, which affected all three vendors' schedule contracts. GSA
further states that after examining the RFQ and the vendors' schedule
contracts, it determined that RFQ sect. H.15 was in direct conflict with the
schedule contracts, and should also be deleted from the RFQ. Consequently,
GSA issued amendment No. 8 to the RFQ to remove the apparent
inconsistencies.

That amendment specifically explained that its purpose was "to remove
conflicts and inconsistencies between the RFQ and the GSA MAS FSC 70
Contracts" by replacing RFQ sect.sect. D, E, F, G, H, and I, in their entirety. AR
exh. 1.i, amend. 8, Oct. 18, 2000. A cover letter to that amendment
explained the agency's concern, and requested that vendors reference any
remaining conflicts in their FPRs. In response to amendment No. 8, Oracle
and Offeror A removed all conditions and exceptions remaining in their FPRs.

We have reviewed the record, including GSA's explanations leading up to each
round of discussions, and conclude that the record does not support DSG's
premise that GSA's actions improperly favored Oracle. Rather, it is clear
that following the initial round of discussions, GSA reasonably concluded
that adequate discussions had not been conducted with two of the three
vendors, and reopening discussions was thus necessary to address the
agency's remaining concerns and further maximize the competition. There is
nothing improper in requesting more than one round of FPRs where a valid
reason exists to do so. See HLJ Management Group, Inc., B-225843.3, Oct. 20,
1988, 88-2 CPD para. 375 at 7.

Further, DSG's contention that subsequent rounds of discussions favored
Oracle is not supported by the record. [8] The record shows that it was not
until after the second round of discussions that GSA concluded that several
issues remained unresolved, primarily related to defects in the RFQ which
affected all three proposals, including DSG's. GSA further concluded that
these remaining conflicts and inconsistencies caused two of the three
vendors to include conditions and exceptions in their proposals, requiring
the agency to amend the RFQ to remove the conflicting terms, and permit
issuance of a BPA consistent with the vendors' GSA schedule contracts. Under
these circumstances, it was entirely proper for GSA to reopen discussions,
and permit Oracle and Offeror A to correct the deficiencies in their
proposals which were primarily caused by defects in the RFQ. See, e.g.,
Biloxi-D'Iberville Press, B-243975.2, Sept. 27, 1991, 91-2 CPD para. 301 at 6;
see also Carter Chevrolet Agency, Inc., B-228151, Dec. 14, 1987, 87-2 CPD
para. 584 at 3-4 (decision to conduct discussions was unobjectionable where
agency expected offerors to take numerous exceptions to the solicitation and
discussions were necessary to resolve these matters). [9]

Role of the Contracting Officer

DSG alleges that the CO's multiple responsibilities compromised the
evaluation process. In this connection, DSG points out that the CO
designated for this procurement also was the SSA, as well as a member of the
SSEB and the cost team. As a result, the protester states, the CO approved
the source selection plan, conducted discussions, and as the SSA, was
ultimately responsible for the selection decision. According to DSG, the
CO's involvement in virtually every aspect of the process created an
impermissible and prejudicial situation where one individual exercised
"significant control" over the entire procurement. Supplemental Comments,
Feb. 9, 2001, at 5.

It is neither unusual nor improper for a CO to have multiple
responsibilities throughout an acquisition. For example, FAR sect. 15.303(a)
specifically designates the CO as the SSA, unless the agency head appoints
another individual, and requires that the SSA perform certain enumerated
functions such as establishing an evaluation team; approving the source
selection strategy or acquisition plan; ensuring consistency among the
solicitation requirements, notices to offerors, and proposal preparation
instructions; ensuring that proposals are evaluated solely on the factors
contained in the solicitation; considering the recommendations of advisory
boards or panels; and selecting the source or sources whose proposal is the
best value to the government. FAR sect. 15.303(b)(1)-(6). The agency states, and
the record shows, that the CO simply carried out these responsibilities.
While it is conceivable that a CO's active participation in multiple stages
of the evaluation process could compromise that process, that clearly is not
the case here. The record shows that except for exercising his
administrative and oversight functions, the CO did not actively participate
in the evaluations, nor provide any information to the cost team, the SSEB,
or the SSAC that could have affected the evaluations. DSG's argument that by
exercising his responsibilities, the CO impermissibly had such "significant
control" over the procurement that it compromised his decision as the SSA,
is simply not supported by the record.

The protest is denied.

Anthony H. Gamboa

Acting General Counsel

Notes

1. GSA's Financial Management Systems Service Center issued the RFQ and
conducted the acquisition for the Peace Corps under GSA's multiple award
schedule (MAS) Information Technology Schedule 70.

2. All three vendors submitted substantially identical primary and alternate
technical proposals which, except for slight differences not relevant here,
did not affect the technical evaluation or risk ratings.

3. These procedures may be found at .

4. The agency states that it also received completed PRQs from two [DELETED]
components, which were considered by the SSEB, but inadvertently destroyed
at the conclusion of the evaluation. There is no suggestion in the SSEB or
SSAC reports that the ratings in these two PRQs varied materially from those
in the other PRQs received; in fact, the protester itself assumes that the
responses on these two missing PRQ's would follow a similar pattern of
ratings as those contained in the three PRQs in the record. Accordingly, we
see no basis to question DSG's past performance rating based on the absence
of these two PRQs from the record.

5. We note that the [DELETED] respondent apparently confused the rating
categories by inserting the letter "E" (which would indicate unsatisfactory
performance), instead of "A" (indicating exceptional performance) for
several PRQ items. It is apparent from that respondent's narrative comments,
however, and [DELETED] overall performance rating of DSG as "[DELETED],"
that the "E" markings were intended and interpreted to mean exceptional for
those items.

6. In support of its argument DSG relies on American Combustion Indus.,
Inc., B-275057.2, Mar. 5, 1997, 97-1 CPD para. 105, where we concluded that the
protester should have been given an opportunity to respond during
discussions to negative past performance reports to which it had not
previously had an opportunity to explain. That conclusion was based on the
regulatory requirement of FAR sect. 15.610(c)(6) then in effect, which was
removed from the FAR by the Part 15 rewrite. The new provision is quoted
above in relevant part.

7. To the extent that DSG maintains that it was not given an opportunity to
explain or provide further information regarding the two marginal ratings,
the record shows that during discussions with the protester, GSA provided
DSG with a list of numerous weaknesses the SSEB had identified in DSG's
proposal, including that "[m]arginal responses were submitted on the [PRQ]."
See, e.g., AR exh. 6.c, E-mail Message from the CO to DSG, Aug. 18, 2000;
and AR, exh. 6.d, Letter from Contracting Officer's Reopening Discussions
with DSG, Sept. 15, 2000, attach. Although GSA did not specifically describe
the nature or origin of the two marginal ratings, we think that GSA's e-mail
message and subsequent letter provided sufficient notice to at least alert
DSG that the evaluators considered the marginal ratings on the PRQ as
weaknesses.

8. The protester argues that since DSG had not taken any exceptions to the
RFQ in its initial proposal, GSA should not have conducted further
discussions. We are aware of no requirement that agencies limit discussions
to one round. Rather, the extent of discussions is a matter within the
discretion of the contracting agency, and we think that the agency properly
used the flexibility inherent in the negotiation process to maximize the
competition. CBIS Fed. Inc., B-245844.2, Mar. 27, 1992, 92-1 CPD para. 308 at 10
n.4.

9. DSG relies on our decision in Chemonics Int'l, Inc., B-282555, July 23,
1999, 99-2 CPD para. 61, to argue that GSA's subsequent discussions were
improper. DSG's reliance on that decision, is misplaced. In that case, we
sustained the protest because the record showed that the agency had
improperly conducted unequal and misleading discussions that favored one
offeror over another, contrary to FAR sect. 15.306(e). As already explained,
that is not the case here.