B-166779 (2), AUG. 1, 1969

B-166779 (2), AUG. 1, 1969

BID PROTEST - IMPROPER EVALUATION DECISION TO PRESTYPE, INC., DENYING PROTEST AGAINST AWARD OF NEGOTIATED CONTRACT BY FORT MEADE PROCUREMENT DIVISION TO VISUAL SYSTEMS CO., INC. WHERE GOVERNMENT CHANGED BASIS OF EVALUATION AND DID NOT ADVISE OFFERORS, THE EFFECT WAS TO CHANGE THE ESSENTIAL REQUIREMENTS OF THE PROCUREMENT. GAO DOES NOT AGREE WITH AND CANNOT ACCEPT ARGUMENT THAT AWARD SHOULD STAND ON THEORY THAT UNDER ARTFULLY DRAWN SOLICITATION DESIGNED TO SECURE THE MOST ACCEPTABLE PRODUCT AT LOWEST COST, EVALUATION AND AWARD WOULD HAVE FOLLOWED INSTANT PROCEDURE SINCE THERE WAS NO WAY TO TELL WHAT THE OFFERS WOULD ULTIMATELY HAVE BEEN IF SPECIFICATIONS HAD BEEN CHANGED TO SHOW METHOD OF EVALUATION. SINCE CONTRACT HAS BEEN COMPLETELY PERFORMED, NO EFFECTIVE REMEDIAL ACTION IS POSSIBLE.

TO PRESTYPE, INC.:

WE REFER TO YOUR LETTERS OF APRIL 25 AND 29, 1969, WITH ENCLOSURES, PROTESTING AGAINST THE AWARD TO ANY OTHER FIRM OF THE CONTRACT UNDER REQUEST FOR PROPOSALS (RFP) NO. DAAB03-69-R-1396, DATED FEBRUARY 10, 1969, ISSUED BY THE FORT MEADE PROCUREMENT DIVISION, PROCUREMENT AND PRODUCTION DIRECTORATE, USAECOM.

THE CONTRACTING OFFICER SOLICITED, ON A NEGOTIATED FIXED PRICE BASIS, OFFERS FOR 23 LINE ITEMS, TOTALING 6,709 SHEETS, OF DRY TRANSFER LETTERING FROM YOUR CORPORATION, GEORGE F. MUTH CO., INC., AND VISUAL SYSTEMS CO., INC. PROPOSALS WERE RECEIVED FROM ALL THREE FIRMS ON FEBRUARY 21, 20, AND 24, 1969, RESPECTIVELY.

THE DRY TRANSFER LETTERING COMES IN SHEETS REFERRED TO AS LINE CUT SCREENS OR "SQUARES" . THE RFP REQUESTED OFFERS BASED ON A UNIT PRICE PER SHEET OR LINE CUT SCREEN. WHEN THE OFFERS WERE RECEIVED THEY SHOWED GEORGE F. MUTH CO., INC., TO BE LOW ON A PER SHEET PRICE FOR EVERY ITEM AND VISUAL SYSTEMS CO., INC., WAS THE HIGHEST OFFEROR ON THAT BASIS. THE PROPOSALS WERE SUBMITTED TO THE COGNIZANT AGENCY FOR "USER'S REMARKS" AND RETURNED WITH A COMMENT INDICATING THAT THE NUMBER OF CHARACTERS PER SHEET, AND THEREFORE THE PRICE PER CHARACTER, SHOULD BE THE DECIDING EVALUATION FACTOR FOR DETERMINING THE LOW OFFEROR, A FACTOR WHICH HAD NOT BEEN EMPHASIZED IN THE REQUEST FOR PROPOSAL. THE USING AGENCY ADVISED THAT THE PAR-A-TYPE MATERIAL OFFERED BY GEORGE F. MUTH CO., C., HAD FEWER CHARACTERS PER SHEET, THEREBY MAKING THE APPARENT LOW OFFER IN REALITY MORE EXPENSIVE. AFTER RECEIPT OF THIS INFORMATION, ALL OFFERORS WERE ASKED TO SUBMIT A CHARACTER COUNT PER SHEET.

UPON RECEIPT OF THE RESPONSES FROM THE OFFERORS, THE PRICES WERE ABSTRACTED AND THE RESPECTIVE COSTS PER CHARACTER (ON AN AGGREGATE RATHER THAN A LINE ITEM BASIS) WERE AS FOLLOWS:

VISUAL SYSTEMS CO., INC. .000409

GEORGE F. MUTH CO., INC. .000417

PRESTYPE, INC. .000524

ON APRIL 22, 1969, AWARD WAS MADE TO VISUAL SYSTEMS CO., INC., TO FURNISH TACTYPE, INC., DRY TRANSFER LETTERING FOR ALL 23 LINE ITEMS IN THE AMOUNT OF $7,044.45. THE PRICE WAS LATER REDUCED THROUGH A CONTRACT MODIFICATION BY $333.45 TO $6,709.00 TO PROVIDE A QUANTITY DISCOUNT IN LINE WITH A CONTRACT AWARDED TACTYPE, INC., BY THE GENERAL SERVICES ADMINISTRATION. THE AGENCY STATES THAT THE CONTRACT MODIFICATION METHOD WAS USED IN THAT THE AWARD PROCEDURE HAD PROGRESSED TOO FAR IN THE PROCUREMENT CYCLE TO EFFECTIVELY INCORPORATE THE REDUCTION WITHIN THE TIME FRAME OF THE ACCEPTANCE PERIOD AND BE CONSISTENT WITH THE NEEDS OF THE REQUIRING AGENCY.

THE BASIS OF YOUR COMPLAINT IS THAT NOT ONLY IS THE GOVERNMENT PAYING CONSIDERABLY MORE FOR THE SAME MATERIAL IN THAT YOUR TOTAL PRICE WAS $5,702.65 AS OPPOSED TO VISUAL SYSTEMS CO., INC.'S TOTAL (PRIOR TO THE CONTRACT MODIFICATION) OF $7,044.45, BUT IN ADDITION THAT THE AWARD WAS BASED ON THE TACTYPE SHEETS BEING LARGER AND THEREFORE CONTAINING A GREATER NUMBER OF CHARACTERS, WHILE ACTUALLY THE SHEETS ARE THE SAME SIZE AND HAVE THE SAME PRINTED AREA.

THE CONTRACTING OFFICER TAKES ISSUE WITH YOUR ARGUMENT THAT HIS AWARD WAS BASED ON THE TACTYPE SHEETS OFFERED BY VISUAL SYSTEMS CO., INC., BEING LARGER AND HAVING MORE CHARACTERS, IN THAT HE CLAIMS TO HAVE MADE THE AWARD BASED ON THE NUMBER OF CHARACTERS ON EACH SHEET AND NOT ON SHEET SIZE, ALL BIDS OFFERING THE SAME SIZE SHEETS, AS SPECIFIED, BUT THE PROPOSAL OF VISUAL SYSTEMS CO., INC., OFFERING A LOWER OVERALL COST PER CHARACTER THAN YOURS. THE CONTRACTING OFFICER'S ,DETERMINATION AS TO THE LOW BID" CALCULATION SHEET CONFIRMS THAT THE SIZE OF THE SHEET WAS NOT A CONSIDERATION IN HIS DETERMINATION, BUT THAT AWARD WAS MADE ON THE BASIS OF THE LOWEST UNIT PRICE PER CHARACTER FOR THE AGGREGATE QUANTITY OF ALL ITEMS.

THAT THE GOVERNMENT IN THIS CASE HAS NOT FOLLOWED PROPER PROCUREMENT PROCEDURES APPEARS TO BE CONCEDED BY HEADQUARTERS, ARMY MATERIEL COMMAND, WHOSE REPORT ON THE MATTER INCLUDES THE FOLLOWING STATEMENT: "* * * THE CONTRACTING OFFICER (HAD) BIDDERS FURNISH INFORMATION AS TO THE NUMBER OF CHARACTERS PER SHEET, AND THIS INFORMATION WAS USED TO DEVELOP A -COST PER CHARACTER,- WHICH FORMED THE BASIS FOR THE AWARD * * *. THIS METHOD OF EVALUATION WAS NOT ESTABLISHED IN THE SOLICITATION, NOR WERE SUPPLIERS PROPERLY ADVISED OF THIS EVALUATION FEATURE * * *. FURTHER THERE WAS NO RESERVATION OR OTHER BASIS FOR A SINGLE RATHER THAN A SPLIT AWARD.'THE IRREGULARITIES OCCURRING IN THIS CASE HAVE BEEN DISCUSSED WITH PROCUREMENT PERSONNEL AND THERE SHOULD BE NO RECURRENCE OF THIS TYPE OF PROBLEM.'NOTWITHSTANDING THE IRREGULARITIES DISCUSSED ABOVE, IT IS RECOMMENDED THAT THE PROTEST BE DENIED AND THE AWARD BE PERMITTED TO STAND FOR THE FOLLOWING REASONS: (I) THE CONTRACT HAS BEEN PERFORMED AND THE GOVERNMENT HAS ACCEPTED THE PRODUCT; (II) UNDER AN ARTFULLY DRAWN SOLICITATION DESIGNED TO SECURE FOR THE GOVERNMENT THE MOST ACCEPTABLE PRODUCT AT THE LOWEST COST, EVALUATION AND AWARD WOULD HAVE FOLLOWED THE PROCEDURE EMPLOYED HERE; AND (III) UNDER THE SOLICITATION AS WRITTEN AWARD WOULD PROPERLY HAVE BEEN MADE TO MUTH RATHER THAN PRESTYPE.'

WE AGREE THAT IT WAS IMPROPER NOT TO ADVISE THE OFFERORS OF THE METHOD OF EVALUATION TO BE USED UNDER THE SOLICITATION (SEE ARMED SERVICES PROCUREMENT REGULATION (ASPR) 3-501 (B) XVII AND XVIII). WE ALSO AGREE THAT IN THE ABSENCE OF A SPECIFIC PROVISION FOR AWARD OF A SINGLE CONTRACT FOR THE ENTIRE PROCUREMENT THE AGGREGATE AWARD MADE WAS IMPROPER, SINCE IT APPEARS FROM THE CONTRACTING OFFICER'S EVALUATION CALCULATIONS THAT PRESTYPE'S PROPOSAL OFFERED A LOWER PRICE PER CHARACTER ON 11 OF THE 23 LINE ITEMS. ARTICLE 10 (C) OF STANDARD FORM 33A, SOLICITATION INSTRUCTIONS AND CONDITIONS, PROVIDES FOR ACCEPTANCE OF ANY ITEM OR GROUP.OF ITEMS UNLESS THE OFFEROR STIPULATES OTHERWISE, AND THE BASIC RULE IS THAT AWARD SHOULD BE MADE ON THE BASIS AFFORDING THE BEST PRICE TO THE GOVERNMENT. WHILE ARTICLE 10 (F), APPLICABLE TO NEGOTIATED PROCUREMENTS, RESERVES THE RIGHT TO THE GOVERNMENT TO ACCEPT OTHER THAN THE LOWEST OFFER, SUCH ACTION MUST BE CLEARLY JUSTIFIED AND NO JUSTIFICATION APPEARS IN THE RECORD IN THIS CASE.

IT SHOULD BE EMPHASIZED THAT THIS OFFICE HAS REPEATEDLY HELD THAT SOUND PROCUREMENT POLICY REQUIRES THAT OFFERORS BE INFORMED OF ALL EVALUATION FACTORS AND OF THE RELATIVE WEIGHTS TO BE ATTACHED TO EACH FACTOR. SEE B- 166233, JUNE 17, 1969, AND CASES CITED THEREIN. IN FRAMING THE TERMS OF THE SOLICITATION THE USE OF SHEETS AS THE UNITS FOR PRICING APPEARS CLEARLY TO IMPLY THAT PRICE PER SHEET WOULD BE THE DETERMINATIVE FACTOR IN PRICE EVALUATION. IN ADDITION, THE REFERENCE TO PRESTYPE CATALOG NUMBERS WOULD, IN THE ABSENCE OF ANY OTHER STATEMENT AS TO THE NUMBER OF CHARACTERS PER SHEET, JUSTIFY THE INFERENCE THAT SHEETS CONTAINING THE NUMBERS INCLUDED ON PRESTYPE SHEETS WOULD ADEQUATELY MEET THE GOVERNMENT'S REQUIREMENTS.

BY CHANGING THE EVALUATION CRITERIA TO EMPHASIZE THE NUMBER OF CHARACTERS PER SHEET, THE CONTRACTING OFFICER WAS CHANGING THE ESSENTIAL REQUIREMENTS OF THE PROCUREMENT. HE THEREFORE SHOULD HAVE DULY INFORMED THE OFFERORS OF THE NEW CRITERIA AND AT THE SAME TIME ESTABLISHED A COMMON CUT-OFF DATE FOR MODIFICATION OF PROPOSALS. SEE B 163882, FEBRUARY 13, 1969; ASPR 3- 805.1 (A) (V), 3-805.1 (E). IN THIS MANNER ALL OFFERORS WOULD HAVE BEEN SUPPLIED WITH THE INFORMATION NECESSARY TO ENABLE THEM TO PROPERLY PREPARE THEIR PROPOSALS. SEE ASPR 3-501 (B). THE MERE REQUEST FOR A CHARACTER COUNT WAS NOT ADEQUATE TO MEET THESE REQUIREMENTS.

WE DO NOT AGREE WITH AND CANNOT ACCEPT THE AGENCY ARGUMENT THAT WE SHOULD ALLOW THE AWARD TO STAND ON THE THEORY THAT UNDER AN ARTFULLY DRAWN SOLICITATION DESIGNED TO SECURE FOR THE GOVERNMENT THE MOST ACCEPTABLE PRODUCT AT THE LOWEST COST, EVALUATION AND AWARD WOULD HAVE FOLLOWED THE PROCEDURE EMPLOYED HERE, SINCE THERE IS NO WAY TO TELL WHAT THE OFFERS WOULD ULTIMATELY HAVE BEEN IF THE SPECIFICATIONS HAD BEEN CHANGED AND BEEN PROPERLY DRAWN TO REFLECT THE METHOD OF EVALUATION TO BE EMPLOYED. HOWEVER, SINCE THE PURPORTED CONTRACT HAS BEEN COMPLETELY PERFORMED, NO EFFECTIVE REMEDIAL ACTION APPEARS TO BE NOW AVAILABLE. THE AGENCY HAS ASSURED THIS OFFICE THAT THE IRREGULARITIES THAT OCCURRED IN THIS CASE HAVE BEEN DISCUSSED WITH THE PROCUREMENT PERSONNEL INVOLVED AND SHOULD NOT OCCUR IN THE FUTURE.