B-168046, JAN. 14, 1970

B-168046: Jan 14, 1970

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AN ALLEGATION THAT PRIME STRUCTURE OF SUCCESSFUL BIDDER IS UNFAIR BECAUSE IT IS TOO CLOSE TO OR BELOW COST IS NOT ESTABLISHED SINCE NET EVALUATED BID WAS $8. THEREFORE REASONABLENESS OF PRICE IS NOT SUBJECT TO QUESTION. INC.: REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 1. THE SUBJECT INVITATION WAS ISSUED ON JULY 31. BIDS WERE OPENED ON AUGUST 18. THE NET EVALUATED BIDS AS SHOWN ON THE BID ANALYSIS SHEET WERE AS FOLLOWS: BIDDER AMOUNT MCDONNELL AUTOMATION $7. 537.56 THE BID SUBMITTED BY MCDONNELL AUTOMATION WAS DETERMINED TO BE NONRESPONSIVE FOR FAILURE TO PROVIDE A DENVER. AWARD WAS MADE ON SEPTEMBER 1. YOUR PROTEST AGAINST THE AWARD IS BASED ON A NUMBER OF GROUNDS WHICH ARE CONSIDERED INDIVIDUALLY BELOW.

B-168046, JAN. 14, 1970

BID PROTEST--BID PRICE REASONABLENESS DECISION TO COMPUTER COMPLEX, INC; DENYING PROTEST AGAINST AWARD OF CONTRACT FOR COMPUTER SHARING SERVICE UNDER INVITATION ISSUED BY NATIONAL BUREAU OF STANDARDS. AN ALLEGATION THAT PRIME STRUCTURE OF SUCCESSFUL BIDDER IS UNFAIR BECAUSE IT IS TOO CLOSE TO OR BELOW COST IS NOT ESTABLISHED SINCE NET EVALUATED BID WAS $8,090.77, AND EVALUATED BID PRICES RANGED FROM $7,089.39 TO $10,537.56. THEREFORE REASONABLENESS OF PRICE IS NOT SUBJECT TO QUESTION. RECORD SHOWS THAT SUCCESSFUL BIDDER MET BENCHMARK TEST STANDARDS IN ALL RESPECTS. IN ABSENCE OF ANY SHOWING OF BAD FAITH OR LACK OF REASONABLE BASIS FOR DETERMINATION OF BIDDER'S CAPABILITY NO OBJECTION MAY BE MADE.

TO COMPUTER COMPLEX, INC.:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 1, 1969, PROTESTING THE AWARD OF A CONTRACT TO COMPUTER SHARING SERVICES UNDER INVITATION FOR BIDS (IFB) NO. 4-70 ISSUED BY THE NATIONAL BUREAU OF STANDARDS, BOULDER, COLORADO.

THE SUBJECT INVITATION WAS ISSUED ON JULY 31, 1969, TO 22 FIRMS AND CALLED FOR PROVIDING TIME-SHARING COMPUTER SERVICE IN ACCORDANCE WITH THE REQUIREMENTS SET FORTH IN THE INVITATION. BIDS WERE OPENED ON AUGUST 18, 1969, AND THE NET EVALUATED BIDS AS SHOWN ON THE BID ANALYSIS SHEET WERE AS FOLLOWS:

BIDDER AMOUNT

MCDONNELL AUTOMATION $7,089.39

COMPUTER SHARING SERVICES 8,090.77

GENERAL ELECTRIC9,053.55

COMPUTER COMPLEX 10,537.56 THE BID SUBMITTED BY MCDONNELL AUTOMATION WAS DETERMINED TO BE NONRESPONSIVE FOR FAILURE TO PROVIDE A DENVER, COLORADO, TERMINAL FOR SYSTEM EVALUATION AS REQUIRED BY THE INVITATION. THEREFORE, AWARD WAS MADE ON SEPTEMBER 1, 1969, TO COMPUTER SHARING SERVICES AS THE LOWEST RESPONSIVE, RESPONSIBLE BIDDER.

YOUR PROTEST AGAINST THE AWARD IS BASED ON A NUMBER OF GROUNDS WHICH ARE CONSIDERED INDIVIDUALLY BELOW.

THE FIRST BASIS OF YOUR PROTEST IS THAT COMPUTER SHARING SERVICES'PRICE STRUCTURE FOR THE GE420 COMPUTER OF $4 PER CONNECT HOUR, $0.05 PER COMPUTER UNIT AND $0.90 PER 1,000 CHARACTERS STORAGE PER MONTH IS UNFAIR AND, INDEED, IS VERY CLOSE TO OR BELOW THEIR COST. YOU STATE THAT THE INDUSTRY AVERAGE FOR SUCH SERVICE IS $9 PER CONNECT HOUR, $0.07 PER COMPUTER UNIT AND $1.20 PER 1,000 CHARACTERS STORAGE AND THAT NO COMMERCIAL ORGANIZATION KNOWN TO YOUR FIRM OFFERS GE420 TIME-SHARING SERVICES BELOW $8 PER CONNECT HOUR FOR THE USAGE ESTIMATED IN THE SUBJECT INVITATION. THE CONTRACTING OFFICER DETERMINED COMPUTER SHARING SERVICES TO BE A RESPONSIBLE BIDDER WITHIN THE MEANING OF SECTION 1-1.310-5 OF THE FEDERAL PROCUREMENT REGULATIONS AND FULLY RESPONSIVE TO THE INVITATION REQUIREMENTS. WE ARE ALSO ADVISED THAT COMPUTER SHARING SERVICES HAS SUCCESSFULLY PERFORMED SIMILAR WORK FOR THE NATIONAL BUREAU OF STANDARDS IN THE PAST. THE NET EVALUATED BID OF COMPUTER SHARING SERVICES WAS $8,090.77 AND SINCE THE EVALUATED BID PRICES RANGED FROM $7,089.39 TO $10,537.56, THE CONTRACTING OFFICER WAS NOT PUT ON NOTICE OF ANY POSSIBLE BID MISTAKE AND NONE HAS BEEN ALLEGED BY THE CONTRACTOR. UNDER THE CIRCUMSTANCES, WE FIND NO BASIS TO QUESTION THE REASONABLENESS OF THE PRICE BID BY COMPUTER SHARING SERVICES.

YOUR SECOND CONTENTION IS THAT COMPUTER SHARING SERVICES OFFERS ONLY A SINGLE MACHINE TO ITS USERS AND CANNOT PROVIDE BACKUP SERVICE IN CASE OF COMPUTER DOWNTIME, NOR CAN IT GUARANTEE 5-MINUTE ACCESS TO THIS SINGLE MACHINE. THUS, YOU CONTEND THAT COMPUTER SHARING SERVICES DID NOT MEET THE REQUIREMENT OF PARAGRAPH 5.3.1 OF THE SPECIFICATIONS WHICH PROVIDES AS FOLLOWS:

"5.3.1 ACCESS DELAYS (DELAYS IN GETTING CONNECTED WITH THE SYSTEM AFTER CORRECTLY DIALING THE SYSTEM TELEPHONE NUMBER) DUE TO FULL USER LOAD SHALL NOT EXCEED 5 MINUTES. ACCESS DELAYS DUE TO SYSTEM CRASHES ARE COVERED BY SECTION 4.2."

THE RECORD INDICATES THAT THE SUCCESSFUL CONTRACTOR WAS NOT REQUIRED TO HAVE BACKUP EQUIPMENT ON HAND BUT, RATHER, REQUIRED THE CONTRACTOR TO FURNISH A CERTAIN MINIMUM LEVEL OF SERVICE DURING THE CONTRACT PERIOD. ARE ADVISED THAT COMPUTER SHARING SERVICES HAS FURNISHED THIS LEVEL OF SERVICE UNDER PREVIOUS CONTRACTS AND HAS ALWAYS BEEN ABLE TO PROVIDE ACCESS TO THE SYSTEM WITHIN 5 MINUTES. AS A MATTER OF INFORMATION, COMPUTER SHARING SERVICES STATE THAT IT CAN RENDER BACKUP SERVICE ON A SHORT-TIME BASIS (I.E; 2 MINUTES) IF ITS OWN SYSTEM IS UNABLE TO RESPOND DUE TO ACCESS DELAYS OR SYSTEM OUTAGES.

WE FIND NO BASES TO AGREE WITH YOUR CONTENTION THAT COMPUTER SHARING SERVICES OFFERS BATCH PROCESSING ON ITS MACHINE IN THE EVENING AND, THEREFORE, CANNOT GUARANTEE 24-HOUR SERVICE. THE INVITATION DOES NOT REQUIRE THE SUCCESSFUL CONTRACTOR TO PROVIDE 24-HOUR SERVICE. PARAGRAPH 5.2.1 OF THE SPECIFICATIONS REQUIRES TIME-SHARING SERVICES ON A REAL-TIME BASIS BETWEEN THE HOURS OF 8 A.M. AND 5 P.M. WE ARE ADVISED THAT COMPUTER SHARING SERVICES CAN PROVIDE INSTANTANEOUS SYSTEMS PROCESSING DURING THE SPECIFIED PERFORMANCE HOURS.

THE FOURTH CONTENTION AS SET FORTH IN YOUR LETTER READS AS FOLLOWS:

"THE BENCHMARK PROBLEM PRESENTED IN THE ABOVE REFERENCED IFB DID NOT ADEQUATELY TEST THE CAPABILITY OF THE VENDOR'S EDITING SOFTWARE, A FEATURE IN WHICH WE ARE FAR SUPERIOR AND A FEATURE WHICH IS OF UTMOST IMPORTANCE TO TIME-SHARING USERS."

WITH REGARD TO THIS CONTENTION, THE PUBLIC ADVERTISING STATUTES HAVE CONSISTENTLY BEEN HELD TO REQUIRE THE PROCURING AGENCIES OF THE GOVERNMENT TO PREPARE SPECIFICATIONS DESCRIBING THEIR NEEDS IN TERMS OF ACTUAL OR REASONABLE NEEDS RATHER THAN IN TERMS OF THE MAXIMUM QUALITY OBTAINABLE. IT IS WELL SETTLED THAT SUCH STATUTES DO NOT AUTHORIZE AN AGENCY TO PAY A HIGHER PRICE FOR AN ARTICLE WHICH MAY BE SUPERIOR THAN FOR ONE WHICH IS ADEQUATE FOR ITS NEEDS. SEE 48 COMP. GEN. 403 (1968). WE ARE ADVISED THAT THE BENCHMARK TEST REQUIRED BY THE INVITATION WAS DESIGNED TO ENABLE THE NATIONAL BUREAU OF STANDARDS TO ASCERTAIN BIDDER CAPABILITY TO MEET THE SPECIFICATIONS SET FORTH IN THE INVITATION. THE RECORD INDICATES THAT COMPUTER SHARING SERVICES MET THE BENCHMARK TEST STANDARDS IN ALL RESPECTS.

IT IS A WELL-ESTABLISHED RULE OF OUR OFFICE THAT THE DETERMINATION OF THE PROSPECTIVE CONTRACTOR'S ABILITY TO PERFORM IS PRIMARILY THE FUNCTION OF THE ADMINISTRATIVE OFFICES CONCERNED AND, IN THE ABSENCE OF ANY SHOWING OF BAD FAITH OR LACK OF A REASONABLE BASIS THEREFOR, THERE IS NO BASIS UPON WHICH WE MAY OBJECT. NO SUCH EVIDENCE HAS BEEN PRESENTED IN THIS CASE. SEE 37 COMP. GEN. 430, 435 (1957); 39 ID. 705, 711 (1960); AND 46 ID. 371, 372 (1966).