TITLE: B-297234.2; B-297234.3, Wiltex Inc., December 27, 2005
BNUMBER: B-297234.2; B-297234.3
DATE: December 27, 2005
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B-297234.2; B-297234.3, Wiltex Inc., December 27, 2005

   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.

   Decision

   Matter of: Wiltex Inc.

   File: B-297234.2; B-297234.3

   Date: December 27, 2005

   Joseph J. Petrillo, Esq., Petrillo & Powell, PLLC, for the protester.

   Merilee D. Rosenberg, Esq., and Philip Kauffman, Esq., Department of
   Veterans Affairs, 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

   Protest challenging agency's selection decision is sustained where the
   record shows that the awardee's proposal failed to address material
   solicitation requirements and that the agency failed to treat offerors
   equally by making award to the awardee despite the deficiencies in its
   proposal, while finding the protester's proposal unacceptable for similar
   deficiencies.

   DECISION

   Wiltex Inc. protests the award of a contract to Medical Gas Technology
   (MGT) under request for proposals (RFP) No. 528A7-33-05, issued by the
   Department of Veterans Affairs (VA) for installation of a scroll medical
   air compressor unit at the Syracuse, New York, VA Medical Center. The
   protester contends that the agency improperly awarded to MGT on the basis
   of a proposal that failed to address all material solicitation
   requirements.

   We sustain the protest.

   The RFP provided for award to the offeror whose proposal was determined
   most advantageous to the government, price and other factors considered,
   with past performance and technical, when combined, of equal importance to
   delivery availability and price. RFP at 22. The RFP advised offerors that
   the agency intended to evaluate offers and award a contract without
   discussions, but reserved to the agency the right to conduct discussions
   if determined by the contracting officer to be necessary.

   The solicitation defined the "performance requirements--salient
   characteristics" of the unit sought; among the requirements were the
   following pertaining to warranty and warranty service:

   Contractor to provide 36 month warranty, onsite staff training, and proof
   that the installer of the medical air system have a minimum of 5 years
   experience of installing medical air systems, able to provide 24 hours
   onsite warranty service within 2 hours of being notified; and

   Guarantee from manufacturer that medical air system will have replacement
   parts available for a minimum of 10 years from date of installation.

   RFP at 7. Elsewhere, the RFP instructed offerors to include the following
   information in their technical proposals, with the admonition that
   "failure to address any one of the items listed may result in the
   rejection of the offer":

   1.      Availability of parts, diagnostic software and equipment: Document
   location of stocked parts and delivery time. Identify and document source
   of supply and average delivery time for items not stocked. State
   manufacturer guarantee for length of time they will support medical air
   system.

   2.      Ability to meet response time listed in the specification:
   Describe plans to meet the response times listed in the specification.
   Demonstrate evidence of company's ability to respond to emergency
   situation and fully discuss the staffing managerial plans to be
   implemented to meet the response time specified.

   3.      Conformance to the latest specifications document and list any
   discrepancies between the proposed medical air system and the
   specifications.

   4.      Describe in detail the rigging, installation, and test process
   being proposed to install the medical air system.

   RFP at 20-21. The RFP also instructed offerors that "[t]he proposal should
   describe the past experience of the company in providing maintenance on
   the equipment specified in this solicitation within the past three (3)
   years." RFP at 21.

   Six proposals were received by the September 1, 2005 closing date.
   According to the contracting officer, he "made a decision to include 5 of
   the 6 proposals received in the competitive range." Contracting Officer's
   Statement, Nov. 1, 2005, at 1. Wiltex's proposal was one of those
   included. The contracting officer's competitive range determination was
   apparently made prior to technical evaluation of the proposals, however,
   and when the technical evaluation was performed, four of the five
   proposals in the competitive range, including Wiltex's, were determined to
   be technically unacceptable and eliminated from consideration. After all
   proposals other than MGT's had been eliminated from consideration, the
   project engineer notified the contracting officer of a change in the
   agency's requirements. The contracting officer notified MGT of the change,
   and, in response, MGT reduced its price from $96,500 to $94,900. The
   agency subsequently awarded a contract to MGT; upon notification of the
   award, Wiltex protested to our Office.

   In its initial protest, Wiltex argued that its proposal was technically
   compliant and lower in price (at [deleted]) than MGT's, and that it thus
   represented the best value to the government. The VA responded that the
   protester's proposal had failed to comply with a large number of the RFP's
   technical requirements, and that the contracting officer had properly
   determined it to be technically unacceptable. The contracting officer
   noted that Wiltex's proposal consisted exclusively of product model
   specifications copied from the manufacturer's literature and that it
   lacked required information pertaining to past performance; technical
   references; availability and location of parts, software, and equipment;
   delivery times; emergency response time; staffing and managerial plans to
   meet emergency needs; discrepancies between the proposed medical air
   compressor and the specifications; the rigging, installation, and test
   process proposed; and on-site training. Contracting Officer's Statement,
   Nov. 1, 2005, at 1. Upon receipt of the agency report, which included
   evaluation documentation and a copy of the awardee's proposal, Wiltex
   abandoned its argument that its proposal, as submitted, was technically
   compliant, but raised the supplemental argument that it was unreasonable
   for the agency to have awarded to MGT because MGT's proposal, like the
   protester's, lacked material information required by the RFP.[1]

   Based on the record before us, we agree with the protester that MGT's
   proposal failed to address material solicitation requirements and, as a
   consequence, did not provide a proper basis for award. In this connection,
   any proposal that fails to conform to material terms and conditions of an
   RFP should be considered unacceptable and may not form the basis for an
   award. SWR, Inc., B-284075, B-284075.2, Feb. 16, 2000, 2000 CPD para. 43
   at 3. While MGT's proposal contained more information than Wiltex's, it
   still did not address a number of the RFP's material requirements,
   including the requirement for proof of ability to furnish 24-hour on-site
   warranty service within 2 hours of notice and the requirement for a
   guarantee from the manufacturer that replacement parts would be available
   for a minimum of 10 years from the date of installation.[2] The
   contracting officer acknowledges that the awardee's proposal did not
   address the latter requirement. With regard to the former requirement, the
   contracting officer argues that MGT demonstrated its ability to respond to
   service calls within the required timeframe by including in its proposal
   literature from Powerex, the manufacturer of its proposed air compressor
   system, that stated as follows:

   Powerex also has over 200 trained and authorized service centers in the
   U.S. These local distributors have parts and service available normally 24
   hours a day 7 days per week.

   Since there is no indication in MGT's proposal that either it or its
   installer is a Powerex authorized service center, we are not persuaded by
   the contracting officer's argument. Moreover, MGT did not otherwise
   address the requirement.

   We also think that the evaluators unreasonably determined that MGT had
   demonstrated acceptable experience. As previously noted, the RFP
   instructed offerors "to describe the past experience of the company in
   providing maintenance on the equipment specified in this solicitation
   within the past three (3) years." While MGT's proposal described the
   company's experience in selling air processing systems and the experience
   of its installer in installing them, MGT's proposal furnished no
   description of experience on the part of either in providing maintenance
   on the systems once installed.[3] Despite MGT's failure to furnish
   evidence of the type of experience specifically required by the RFP, the
   technical evaluators rated its proposal as acceptable under the experience
   evaluation factor. This, we think, was unreasonable.

   In sum, because we conclude that the VA could not reasonably have
   determined MGT's proposal, as submitted, to be technically acceptable,
   MGT's proposal could not form the basis for award. Further, while both
   Wiltex and MGT submitted technically unacceptable offers, the agency
   essentially overlooked the deficiencies in MGT's proposal while rejecting
   Wiltex's proposal for similar deficiencies. This disparate treatment was
   inconsistent with the agency's duty to treat offerors equally, and thus
   was improper. See Infrared Tech. Corp.--Recon., B-255709.2, Sept. 14,
   1995, 95-2 CPD para. 132 at 4-5.

   We recommend that the agency conduct discussions with, and solicit revised
   proposals from, MGT, Wiltex, and any other offeror which it determines
   would have a reasonable chance of award if given the opportunity to
   improve its proposal through discussions. If, once the agency has
   evaluated the revised proposals, it determines that the proposal of an
   offeror other than MGT represents the best value to the government, we
   recommend that the agency terminate the award to MGT and make award to the
   offeror selected. We also recommend that the agency reimburse the
   protester for its costs of filing and pursuing the protest, including
   reasonable attorneys' fees. Bid Protest Regulations, 4 C.F.R. sect.
   21.8(d)(1) (2005). In accordance with section 21.8(f) of our Regulations,
   Wiltex's claim for such costs, detailing the time expended and the costs
   incurred, must be submitted directly to the agency within 60 days after
   receipt of the decision.

   The protest is sustained.

   Anthony H. Gamboa

   General Counsel

   ------------------------

   [1] The protester also raised an argument relating to discussions. As
   noted above, the awardee was told of a change in the agency's requirements
   and allowed to revise its price, after the other proposals had been
   eliminated from consideration. Arguing that this constituted discussions
   with MGT, Wiltex asserts that the contracting officer should have
   conducted discussions with it as well because its proposal was initially
   included in the competitive range. Wiltex's argument is without merit. It
   is true that, where discussions are conducted, they must be held with all
   offerors whose proposals are in the competitive range. Federal Acquisition
   Regulation (FAR) sect. 15.306(d)(1). It is clear from the record, however,
   that the contracting officer's initial action, although labeled a
   competitive range determination, could not have been that, since it was
   made prior to technical evaluation of proposals; instead, the contracting
   officer was apparently merely determining which proposals were
   competitively priced. In any event, contracting officers are free to end
   consideration of a proposal determined to no longer have a reasonable
   chance of being selected for award, even if it was initially included in a
   competitive range, regardless of the status of discussions with that
   offeror. FAR sect. 15.306(d)(5). The contracting officer's initial
   "competitive range" is thus irrelevant; the relevant question, discussed
   below, is whether the agency properly decided to eliminate Wiltex's
   proposal from consideration and to make award to MGT (with or without
   discussions).

   [2] While not raised by Wiltex in its protest, MGT's proposal also did not
   address the requirements for a 36-month warranty and for on-site staff
   training.

   [3] One of the technical evaluators in fact made mention of this omission
   in his narrative comments, noting that "Installation discussed, but not
   maintenance."