TITLE: B-310273.2, Sysorex Federal, Inc.--Costs, March 27, 2008
BNUMBER: B-310273.2
DATE: March 27, 2008
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B-310273.2, Sysorex Federal, Inc.--Costs, March 27, 2008

   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: Sysorex Federal, Inc.--Costs

   File: B-310273.2

   Date: March 27, 2008

   David S. Cohen, Esq., and John J. O'Brien, Esq., Cohen Mohr LLP, for the
   requester.

   Sherry Kinland Kaswell, Esq., Department of the Interior, and Paul Oman,
   Esq., U.S. Customs and Border Protection, for the agency.

   David A. Ashen, Esq., and John M. Melody, Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Reimbursement of costs of filing and pursuing a protest insofar as they
   relate to challenge to evaluation of proposed handheld license plate
   reader systems is recommended where a reasonable agency inquiry into
   initial protest allegations would have shown facts disclosing absence of a
   defensible legal basis for finding awardee's solution compliant with the
   solicitation specifications, but agency delayed taking corrective action
   until after submission of the agency report.

   DECISION

   Sysorex Federal, Inc. requests that we recommend that the firm be
   reimbursed the costs of filing and pursuing its protest challenging the
   award of a contract to Perceptics, LLC, under request for proposals (RFP)
   No. 0407RP66155, issued by the Department of the Interior, GovWorks, on
   behalf of Customs and Border Protection (CBP), for license plate reader
   (LPR) systems. Sysorex challenged the evaluation of proposals and conduct
   of the procurement.

   We grant the request.

   The solicitation provided for award of a primarily fixed-price,
   level-of-effort contract to produce, install, warrant and maintain a
   minimum of 54 and a maximum of 770 LPR systems at various CBP facilities,
   primarily points of entry at U.S. borders. The LPR systems ensure that all
   vehicles crossing U.S. land borders at points of entry have their license
   plates automatically queried against law enforcement databases. Several
   types and configurations of LPRs were specified in the solicitation
   statement of work (SOW), including: fixed permanent installations at point
   of entry traffic lanes for commercial vehicles; fixed permanent
   installations at point of entry traffic lanes for passenger vehicles;
   "self-contained" mobile units capable of being deployed (within 2 hours)
   with an approximation of a typical lane layout; and handheld wireless
   devices "capable of acting as a fully functioning LPR system." SOW
   sections C.3.1.5.2, C.3.1.4. Award was to be made to the offeror whose
   proposal represented the "best value" when evaluated against six criteria:
   key personnel, technical approach, management approach, past experience/
   performance, transition plan, and price.

   Based on its evaluation of the initial proposals received in response to
   the RFP and oral presentations made by offerors, Interior initially
   eliminated Sysorex's proposal from the competition prior to the live test
   demonstration provided for under the original solicitation. However, the
   agency subsequently reconsidered its decision and reinstated Sysorex in
   the competition, amended the solicitation to delete the live test
   demonstration, and opened discussions with Sysorex, Perceptics, and the
   other firms whose proposals were included in the competitive range.

   Based upon its evaluation of the final proposal revisions (FPR) submitted
   at the end of discussions, Interior determined that Perceptics' proposal
   represented the best value. While Sysorex's evaluated price ($1,167,705)
   was significantly lower than Perceptics' ($3,940,954), Perceptics'
   proposal was rated very good for overall technical merit, while Sysorex's
   was rated only satisfactory. In this regard, the source selection decision
   generally indicated that the technology proposed by Sysorex "is not well
   suited to the environment in which CBP operates," and specifically
   observed that Sysorex's handheld solution "compromises officer safety."
   Source Selection Decision at 8. Sysorex's proposed handheld system was
   comprised of [REDACTED]. Sysorex FPR at I-10 to I-11. As the agency made
   clear in the detailed technical evaluation and in the debriefing
   subsequently furnished Sysorex after the award to Perceptics, Sysorex's
   handheld solution was determined not to work in the intended environment
   because it would require officers to carry a [REDACTED] in addition to the
   bullet-proof vest, gun belt with weapon, additional ammunition clips,
   baton, handcuffs, and pepper spray officers already carry. FPR Technical
   Evaluation at 2; Sysorex Debriefing at 3. In contrast, Perceptics proposed
   as its handheld solution to use a [REDACTED] handheld device that would
   [REDACTED]. Perceptics FPR at I-15 to I-17.

   Upon learning of the award to Perceptics, and after being debriefed,
   Sysorex filed a protest with our Office. In its initial protest filings,
   Sysorex challenged the award on the basis that Interior had: failed to
   conduct meaningful discussions; failed to evaluate price proposals in
   accordance with the solicitation; treated the offerors unequally in the
   technical evaluation; and otherwise failed to reasonably evaluate a number
   of sections of its technical proposal, including key personnel, handheld
   solution, reading vanity license plates, past experience and performance,
   transition plan, network monitoring capabilities, and approach to
   addressing changes in state license plate designs. With regard to the
   agency's criticism of its handheld solution, Sysorex asserted that "[t]he
   requirements of the solicitation drove the equipment that was required for
   the handheld solution. All offerors would be required to propose a similar
   suite of equipment to that proposed by Sysorex and the border officers
   would use it in a similar fashion." Sysorex Amended Protest, Sept. 17,
   2007, at 18; Sysorex Protest, Sept. 11, 2007, at 17. Sysorex concluded
   that, since the two handheld solutions therefore must have been similar,
   downgrading Sysorex's solution but not Perceptics' was unreasonable.

   In its October 15 report, Interior maintained that it had reasonably
   evaluated the proposals and requested that we deny Sysorex's protest in
   its entirety. Regarding Sysorex's challenge to the agency's assessment
   that Sysorex's handheld solution would not work in the environment in
   which CBP officers operate, Interior asserted that:

     Sysorex maintains that every offeror had to propose a suite of equipment
     similar to its own [REDACTED] system, which consists of a [REDACTED]. A
     review of Perceptics' technical proposal demonstrates the fallacy of
     this assertion. Perceptics proposed a true handheld solution, consisting
     of a [REDACTED] that accomplishes all of the functions of Sysorex's
     [REDACTED] "handheld" system. Moreover, Sysorex's argument indicates its
     lack of familiarity with the state of the art as represented in the
     proposals of its competitors.

   Agency Report, Oct. 15, 2007, at 8. The agency included among the
   documents furnished with the report a copy of Perceptics' proposal.

   In its October 22 supplemental protest and October 25 comments on the
   agency report, Sysorex pointed out that, under the solicitation, all types
   of LPR systems, including the handheld system, were required to image
   license plates on vehicles moving at speeds up to 60 miles per hour, with
   95 percent accuracy, while handheld LPRs also were required to include a
   battery with an 8-hour life. SOW sections 3.1.5.2, C.4.4, C.4.6.3. Sysorex
   noted that, in Perceptics' handheld solution, CBP officers would carry
   [REDACTED] as those that Perceptics proposed for its fixed and mobile LPR
   systems; thus, according to Perceptics' FPR, "[REDACTED]." Perceptics FPR
   at I-6 to I-27, IX-2. Sysorex asserted that Perceptics' handheld PDA
   solution therefore did not meet the 60 miles per hour with 95 percent
   accuracy requirement. Sysorex also raised an additional protest allegation
   regarding Perceptics' proposed approach to commercial vehicles.
   Specifically, Sysorex noted that, while the SOW required that each LPR
   system "transmit the alphanumerics and state/province of origin for each
   plate on both the front and rear of the commercial vehicle . . . for at
   least 95% of all commercial vehicles which pass through the lane," SOW
   sect. C.4.2, Perceptics' FPR stated that its system would correctly read
   both the alphanumerics and state/province of origin "[REDACTED]."
   Perceptics FPR at I-23. Sysorex argued that this statement fell short of
   meeting the 95 percent requirement.

   On November 1, Interior advised our Office that it had determined to take
   corrective action in response to the grounds raised in Sysorex's second,
   amended protest filed on October 22. Interior stated that it would amend
   the solicitation, request new FPRs, suspend performance of all but a
   limited portion of Perceptics' contract, and, in the event that an offeror
   other than Perceptics becomes the successful offeror, terminate
   Perceptics' contract. (Interior also advised that, as an alternative, it
   may choose to meet its requirements through a different procurement
   vehicle.) On November 5, we dismissed Sysorex's protest as academic
   (B-310273).

   Sysorex now requests that we recommend reimbursement of the costs of
   filing and pursuing its protest.

   Where a procuring agency takes corrective action in response to a protest,
   our Office may recommend reimbursement of protest costs where, based on
   the circumstances of the case, we determine that the agency unduly delayed
   taking corrective action in the face of a clearly meritorious protest,
   thereby causing the protester to expend unnecessary time and resources to
   make further use of the protest process in order to obtain relief. Bid
   Protest Regulations, 4 C.F.R. sect. 21.8(e) (2007); AAR Aircraft
   Servs.--Costs, B-291670.6, May 12, 2003, 2003 CPD para. 100 at 6. A
   protest is clearly meritorious where a reasonable agency inquiry into the
   protest allegations would have shown facts disclosing the absence of a
   defensible legal position. AVIATE L.L.C., B-275058.6, B-275058.7, Apr. 14,
   1997, 97-1 CPD para. 162 at 16. With respect to the promptness of the
   agency's corrective action under the circumstances, we review the record
   to determine whether the agency took appropriate and timely steps to
   investigate and resolve the impropriety. See Chant Eng'g Co., Inc.--Costs,
   B-274871.2, Aug. 25, 1997, 97-2 CPDpara. 58 at 4; Carl Zeiss, Inc.--Costs,
   B-247207.2, Oct. 23, 1992, 92-2 CPD para. 274 at 4. While we consider
   corrective action to be prompt if it is taken before the due date for the
   agency report responding to the protest, we generally do not consider it
   to be prompt where it is taken after that date. See CDIC, Inc.--Costs,
   B-277526.2, Aug. 18, 1997, 97-2 CPD para. 52 at 2.

   Sysorex asserts that reimbursement of its protest costs is warranted here
   because, in its view, three issues raised in its initial protest---unequal
   evaluation of handheld solutions, misevaluation of cost proposals, and
   misevaluation of Sysorex's proposed network monitoring capabilities---were
   clearly meritorious, but the agency nevertheless failed to take corrective
   action until after the protester had responded to the agency report.

   Interior denies that it unduly delayed taking corrective action in the
   face of clearly meritorious protest grounds. According to Interior, it
   determined to take corrective action based on problems in two areas
   identified by Sysorex. Specifically, Interior states that Sysorex's
   assertion in its October 22 supplemental protest that Perceptics' handheld
   solution did not fully comply with the solicitation requirements "caused
   the agency to question both its earlier evaluation of all offerors'
   handheld solutions as well as the feasibility of the performance
   requirements . . . for the handheld LPRs." Interior Comments, Dec. 3,
   2007, at 2. In addition, Interior states that Sysorex, in asserting in its
   October 22 supplemental protest that Perceptics' commercial truck lane did
   not offer the required 95 percent accuracy read rate, "has identified an
   area where the agency may have improperly relaxed a solicitation
   requirement." Id. at 3. Interior concludes that, since it first learned
   the basis for corrective action after it filed its agency report
   responsive to the initial protest submissions, and it acted promptly
   thereafter to take corrective action, there is no basis for recommending
   reimbursement of protest costs.

   We agree with Sysorex that its initial challenge to the evaluation of
   handheld solutions was clearly meritorious. The agency's evaluation of
   proposals was based in significant measure upon the determination that,
   while Sysorex's [REDACTED] handheld solution "was not well suited to the
   environment in which CBP operates" and "compromises officer safety,"
   Source Selection Decision at 8, "Perceptics proposed a true handheld
   solution, consisting of [REDACTED] that accomplishes all of the functions
   of Sysorex's [REDACTED] `handheld' system." Agency Report, Oct. 15, 2007,
   at 8. However, the solicitation clearly and unambiguously required that
   the handheld solution be based upon a handheld wireless device that is
   "capable of acting as a fully functioning LPR system." SOW
   sect. C.3.1.5.2. Since Perceptics' proposal described its handheld
   approach as requiring that [REDACTED], Perceptics FPR at IX-2, it should
   have been clear to the agency that the approach was not likely to meet the
   SOW requirement that all types of LPR systems, including the handheld
   system, be capable of imaging license plates on vehicles moving at speeds
   up to 60 miles per hour with 95 percent accuracy.

   Interior asserts that it understood that its evaluation "might have been
   flawed" only when Sysorex, in its supplemental protest filed after receipt
   of a copy of Perceptics' proposal in the agency report, pointed out that
   Perceptics had proposed the [REDACTED], and asserted that this [REDACTED]
   could not meet the requirements of the SOW without additional equipment.
   Interior Comments, Dec. 3, 2007, at 2. Again, however, it was clear that a
   handheld solution that [REDACTED] was not likely to meet the SOW
   requirement that the handheld system, like all other LPR systems to be
   furnished under the contract, be capable of imaging license plates on
   vehicles moving at speeds up to 60 miles per hour with 95 percent
   accuracy. In our view, a reasonable investigation of Sysorex's claim in
   its initial protest filings that all offerors would be required to propose
   a suite of equipment similar to Sysorex's in order to meet the SOW
   requirements, should have led the agency to examine the compliance of
   Perceptics' proposed handheld solution; such examination, reasonably
   conducted, necessarily would have indicated the noncompliance of
   Perceptics' proposed handheld solution. Accordingly, we find that Interior
   unduly delayed taking corrective action in the face of Sysorex's clearly
   meritorious protest, first raised in its initial protest filings prior to
   the agency report, against the evaluation of proposed handheld solutions.

   As for the two additional protest grounds cited in Sysorex's request for
   reimbursement, neither was clearly meritorious. In its amended protest
   filed after its debriefing and prior to receipt of the agency report,
   Sysorex, having been advised that Perceptics' proposal received a
   significant strength on account of the ability to [REDACTED], asserted
   that the agency had improperly failed to credit its proposal for a similar
   capability, for [REDACTED]. Sysorex Amended Protest, Sept. 17, 2007, at
   25-26. Interior responded in its report that, while Perceptics' [REDACTED]
   were [REDACTED], Sysorex's [REDACTED] was less desirable because it was
   offered [REDACTED]. Contracting Officer's Statement at 11-12. Sysorex then
   responded in its comments that the agency had failed to account for the
   fact that Sysorex's proposed LPR system nevertheless included more robust
   [REDACTED] than did Perceptics' LPR system. Sysorex Comments, Oct. 25,
   2007, at 11-16. In our view, it was a close question that would require
   further development of the record to resolve, as to whether or not in fact
   there was a significant difference between the proposals with respect to
   [REDACTED] such as to warrant a strength for Perceptics but not for
   Sysorex in this regard. Accordingly, Sysorex's initial challenge to the
   [REDACTED] evaluation was not clearly meritorious. See Alaska Structures,
   Inc.--Costs, B-298575.4, Jan. 22, 2007, 2007 CPD para. 15 at 6. As for
   Sysorex's initial challenge to the cost evaluation, we note that the
   protester itself conceded in its amended protest filed after its
   debriefing and prior to receipt of the agency report, that "it is not
   clear how the government evaluated cost/price." Sysorex Amended Protest,
   Sept. 17, 2007, at 14. Given the lack of clarity in the information
   available prior to receipt of the agency report as to how the agency
   evaluated price, we find that Sysorex's initial challenge to the price
   evaluation was not clearly meritorious.

   In conclusion, we recommend that Sysorex be reimbursed the reasonable
   costs of filing and pursuing its protest insofar as they relate to its
   challenge to the evaluation of proposed handheld solutions. Sysorex should
   submit its claim for costs, detailing and certifying the time expended and
   costs incurred, directly to Interior within 60 days of receipt of this
   decision. 4 C.F.R. 21.8(f)(1).

   The request is granted.

   Gary L. Kepplinger
   General Counsel