B-169365, JUN. 30, 1970

B-169365, JUN. 30, 1970

CONTRACTS--SPECIFICATIONS--ADMINISTRATIVE DETERMINATION CONCLUSIVENESS- MINIMUM NEEDS REQUIREMENT PROTEST BY ADPE FIRM THAT MANDATORY SPECIFICATION REQUIREMENTS OF REQUEST FOR PROPOSAL ISSUED BY SMALL BUSINESS ADMINISTRATION ARE UNNECESSARY FOR PERFORMANCE OF PROJECTED FUNCTIONS BY ADP SYSTEM, THEREBY UNDULY RESTRICTING COMPETITION, IS DENIED, SINCE GENERAL SERVICES ADMINISTRATION, UNDER 40 U.S.C. 759, CONTROLS GOVERNMENT PROCUREMENT OF ADPE AND HAS CONCURRED IN SMALL BUSINESS ADMINISTRATION'S DETERMINATION OF ITS MINIMUM REQUIREMENTS, SUCH DETERMINATION BEING ACCEPTED UNDER WELL-ESTABLISHED PRINCIPLE THAT DETERMINATION OF WHETHER PRODUCT CONFORMS TO SPECIFICATIONS IS PRIMARILY RESPONSIBILITY OF CONTRACTING AGENCY, ABSENT EVIDENCE ITS CONCLUSIONS ARE ARBITRARY OR UNSUBSTANTIATED. MOREOVER, RECOGNIZED CAPABILITY OF SEVERAL OFFERORS TO FULFILL REQUIREMENTS DISPROVES ALLEGED UNDUE LIMITATION ON COMPETITION.

TO NATIONAL CASH REGISTER COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 18, 1970, AND SUBSEQUENT CORRESPONDENCE CONCERNING YOUR PROTEST UNDER REQUEST FOR PROPOSAL (RFP) NO. SBA-1502-BG-70-RFP-1, WHICH WAS ISSUED BY THE SMALL BUSINESS ADMINISTRATION (SBA) ON FEBRUARY 2, 1970, TO OBTAIN A COMPREHENSIVE TECHNICAL PROPOSAL FOR THE DESIGN, FUNCTIONAL ARRANGEMENT AND PROJECTED OPERATIONAL CAPABILITIES OF AN ELECTRONIC DATA PROCESSING SYSTEM OF FIVE YEARS DURATION AND TO ACQUIRE THE DATA PROCESSING EQUIPMENT AND COMMUNICATION DEVICES TO IMPLEMENT THE SYSTEM.

THE OBJECTIVES OF THE SYSTEM ARE TO AUTOMATE THE PROCESS OF COLLECTING MONIES AND GUARANTY FEES DUE ON LOANS BY PROVIDING IMMEDIATE ACCESS TO MASTER FILES AND TRANSMITTING COLLECTION DATA FROM SBA'S REGIONAL OFFICE AT DENVER, COLORADO, WHERE THE SYSTEM IS TO BE INSTALLED, TO THE CENTRAL COMPUTER IN WASHINGTON, D. C; AND INFORMATION FROM WASHINGTON TO DENVER.

THE SYSTEM IS REQUIRED TO HAVE AN EXPANSION CAPABILITY IN THREE GENERAL WAYS (SPECIFICATION 2.3.2):

1. THE INITIAL SYSTEM WILL REQUIRE UPGRADING TO HANDLE THE INCREASING WORKLOADS ANTICIPATED DURING THE NEXT FIVE YEARS AT THE RATE OF 20 PERCENT PER YEAR.

2. REMOTE TERMINALS, IN WASHINGTON AND ELSEWHERE, ARE EXPECTED TO BE ADDED TO THE SYSTEM.

3. IT IS EXPECTED THAT OTHER APPLICATIONS CURRENTLY IN THE DEVELOPMENTAL STAGE WILL BE IMPLEMENTED ON THE DENVER EQUIPMENT.

CHAPTER 3 OF THE RFP, ENTITLED "MANDATORY REQUIREMENTS," INCLUDES THE FOLLOWING THREE SPECIFICATIONS WHICH ARE THE SUBJECT OF YOUR PROTEST:

1. "3.2.5 OPERATOR CONSOLE

*** PROGRAM INITIATION AND TERMINATION TIME MUST BE PROVIDED EITHER AS IT OCCURS OR MAY BE STORED INTERNALLY UNTIL REQUESTED BY THE OPERATOR.

2. "3.2.13.5 I/O DEVICE ASSIGNMENT

THE OPERATING SYSTEM MUST BE ABLE TO DYNAMICALLY ASSIGN AND RELEASE INPUT/OUTPUT DEVICES. ***

3. "3.2.9 TAPE PROCESSING

THE PROPOSED SYSTEM CONFIGURATION MUST INCLUDE SUFFICIENT TAPE DRIVES FOR THE SYSTEM. MAGNETIC TAPE DRIVES MUST BE 9 CHANNEL OPERATING AT 800 CPI'S AND MUST BE CAPABLE OF READING AND RECORDING IN THE ASCII CODE AND FORMAT AS SPECIFIED IN FEDERAL INFORMATION PROCESSING STANDARDS PUBLICATIONS 1 AND 3."

YOUR PRINCIPAL CONTENTIONS AND ALLEGATIONS CONCERNING THE ABOVE SPECIFICATIONS ARE ESSENTIALLY AS SHOWN AND RESPONDED TO IN THE FOLLOWING STATEMENT BY THE TECHNICAL PERSONNEL OF SBA:

"ALLEGATION:

NCR CONTENDS THAT THE ENTIRE RFP NARRATIVE AND FUNCTIONAL DESCRIPTION OF THIS SYSTEM DEFINES IT AS A SMALL TO MEDIUM SCALE APPLICATION.

"RESPONSE

THE SBA RFP OUTLINES A MEDIUM SCALE APPLICATION FOR ITS INITIAL SYSTEMS IMPLEMENTATION IN DENVER. THE RFP ALSO STATES THAT THE CAPABILITY OUTLINED IS ONLY FOR THE INITIAL APPLICATION AND THE COMPUTER MUST BE SO DESIGNED AS TO ALLOW FOR THE EXPANSION OF AT LEAST 100% CAPABILITY WITHIN SYSTEMS LIFE (FIVE YEARS).

"ALLEGATION

THE INCLUSION OF ITEMS 1 AND 2 ABOVE AS MANDATORY REQUIREMENTS IS NOT ONLY UNNECESSARY, BUT ALSO ILLOGICAL FROM A SOUND SYSTEMS VIEW. IN ACTUAL OPERATION THE OPERATOR COULD WELL HANDLE BOTH FUNCTIONS. THE ARBITRARY DESIGNATION OF 'MANDATORY' FOR THESE CAPABILITIES TO BE INCORPORATED INTO AN OPERATING SYSTEM HAS HAD THE UNDESIRABLE EFFECT OF SUBSTANTIALLY DECREASING THE COMPETITIVE ENVIRONMENT FOR THIS ACQUISITION.

"RESPONSE:

ITEMS 1 AND 2 ARE CHARACTERISTIC OF THE ADP SYSTEM NECESSARY TO MEET THE SHORT- AND LONG-TERM OPERATIONAL REQUIREMENTS OF THE PROPOSED SYSTEM. BOTH ITEMS ARE AVAILABLE, UPON REQUEST, FROM AT LEAST HALF OF THE MAJOR COMPUTER MANUFACTURERS AT NO EXTRA SYSTEMS COST (THERE ARE EIGHT INCLUDING NCR). INCLUSION OF THESE CHARACTERISTICS HAS NOT HAD THE TENDENCY TO REDUCE COMPETITION IN THAT SIX FIRMS ARE STILL ACTIVELY ENGAGED IN THE BIDDING PROCESS OF THIS SOLICITATION.

"ALLEGATION:

FOR HALF THE PRESCRIBED WORKDAY, STRAIGHT SERIAL PROCESSING (SINGLE INQUIRY CAPABILITY BY CARD READER OR OPERATOR CONSOLE EXCEPTED) IS TO BE SCHEDULED. CERTAINLY NO SITUATION EXISTS IN THIS MODE OF OPERATION WHICH WOULD NECESSITATE DYNAMIC ALLOCATION OF INPUT/OUTPUT DEVICES. THE OPERATOR COULD EASILY LOG PROGRAM START AND STOP TIME.

"RESPONSE:

THOSE POINTS SUBMITTED BY NCR TO SUPPORT THEIR CONTENTION EVIDENCES THAT THEY HAVE MISCONSTRUED SYSTEMS CONCEPTS AS OUTLINED IN CHAPTER II OF RFP- SBA-1502-BG-70. THIS CHAPTER ONLY PORTRAYS THE MINIMUM BASE REQUIREMENTS AND NOT OUR TOTAL PROJECTED WORKLOAD NOR OUR PROCESSING METHOD. THE SYSTEM THAT HAS BEEN DESIGNED NECESSITATES THOSE MANDATORY REQUIREMENTS INCLUDED IN THE SUBJECT RFP. THIS SYSTEM REQUIRES ONLINE, MULTIPROGRAMMING FACILITY, NOT STRAIGHT SERIAL PROCESSING. APPROXIMATELY 60 PROGRAMS WILL INITIALLY BE STORED ON IMMEDIATE ACCESS STORAGE. THEY WILL READ INTO THE COMPUTER, UNDER THE CONTROL OF THE OPERATING SYSTEM, AS CALLED FOR BY THE DATA BEING PROCESSED. TWO OR MORE PROGRAMS WILL BE IN PROGRESS AT THE SAME TIME. THE OPERATOR WILL NOT BE AWARE OF WHAT PROGRAM IS PROCESSING WHEN. THEREFORE, HE CANNOT LOG INITIATION AND TERMINATION TIME. IF THERE IS MECHANICAL FAILURE OF ONE I/O DEVICE (I.E; PRINTER), THE OPERATING SYSTEM MUST BE ABLE TO ALLOCATE AUTOMATICALLY ANOTHER DEVICE (I.E; TAPE DRIVE) SO THAT THE PRODUCT MAY BE SAVED; OTHERWISE, LOSS OF DATA AND EXTENDED TOTAL SYSTEM INOPERABILITY RESULTS.

"ALLEGATION:

DURING THE SECOND HALF OF THE DAY, IT IS ENVISIONED THAT A VARIETY OF ROUTINE OPERATIONS WILL BE ACCOMPLISHED. HOWEVER, THE MANDATORY REQUIREMENT FOR MULTIPROGRAMMING CAPABILITY IS THAT TWO PROGRAMS BE IN MEMORY AT ONE TIME. EVEN A RUDIMENTARY EFFORT AT SCHEDULING WOULD NEGATE ANY NEED FOR 'DYNAMIC' I/O ALLOCATION. NCR FEELS THAT THE AVERAGE OPERATOR WOULD BE ABLE TO KEEP RECORDS ON TWO PROGRAMS WITHOUT DIFFICULTY.

"RESPONSE:

THE DATA PROCESSED AND THE PROGRAMS TO PROCESS THAT DATA DIFFER FROM THE FIRST HALF OF DAY PROCESSING, BUT METHOD OF PROCESSING AND OPERATIONAL REQUIREMENT REMAIN THE SAME THROUGHOUT THE DAY. THE PROGRAMS WILL NOT BE SCHEDULED AS DESCRIBED IN RESPONSE TO ALLEGATION 3. SCHEDULING OF AN ONLINE SYSTEM WOULD RENDER A PROGRAM SEQUENCE SO INFLEXIBLE AS TO BE UNUSABLE IN MEETING OUR REQUIREMENTS.

"ALLEGATION:

NCR REQUESTS THAT SBA STATE WHETHER OR NOT 800 CPI WAS DEFINED AS MANDATORY DUE TO OPERATIONAL REQUIREMENTS, OR WAS THIS RECORDING MODE SELECTED BECAUSE A FEDERAL STANDARD HAS BEEN ESTABLISHED.

"RESPONSE:

AS REGARDS THE MAGNETIC TAPE REQUIREMENTS, SBA HAS FOLLOWED THE ESTABLISHED FEDERAL INFORMATION PROCESSING STANDARDS (800 CPI, NRZI RECORDING MODE). OUR REQUIREMENTS ARE BEST MET BY THIS STANDARD IN THAT IT ALLOWS US THE CONTINUING AND FUTURE ABILITY TO ACQUIRE BACKUP IN CASE OF COMPUTER FAILURE AND EXPEDIENT INTERCHANGE OF DATA WITH OTHER GOVERNMENT AGENCIES."

SBA FURTHER EXPLAINED ITS SPECIFICATION FOR 800 CPI TAPE DRIVES, AS FOLLOWS:

"THE TAPE DRIVES CURRENTLY USED IN THE AUTOMATIC DATA PROCESSING FUNCTION OF SBA IN WASHINGTON, D. C; HAVE THE CAPABILITY OF WRITING ON MAGNETIC TAPE IN TWO DENSITIES: 556 CHARACTERS PER INCH OR 800 CHARACTERS PER INCH (CPI). THE 800 CPI HAS BECOME A NATIONAL AND FEDERAL STANDARD BECAUSE IT IS THE MOST COMMON MAGNETIC TAPE DENSITY TO BE USED WITH THIRD GENERATION COMPUTERS. SBA IS AWARE THAT THERE WILL ALSO BE STANDARDS OF DENSITY FOR 200 CPI AND 1600 CPI AND THAT THE 556 CPI WILL PROBABLY NOT BECOME A STANDARD. THE DENVER INSTALLATION WILL BE INTERFACED WITH THE WASHINGTON OFFICE VIA FREE STANDING (NOT CONNECTED TO THE COMPUTER) TAPE TERMINALS. THESE TERMINALS WILL SEND DATA TO AND FROM WASHINGTON TO BE WRITTEN ON MAGNETIC TAPE. IF THE WASHINGTON CENTER RECEIVED TAPE DATA AT 1600 CPI, IT COULD NOT USE IT. THE TAPE WOULD HAVE TO BE TAKEN SOMEWHERE AND TRANSLATED FROM 1600 CPI TO 800 CPI AND THE TAPE DATA TO BE TRANSMITTED TO DENVER WOULD HAVE TO UNDERGO THE SAME TRANSLATION PROCESS. IT IS OBVIOUS THAT SUCH A TRANSLATION WOULD RESULT IN LOST TIME AND UNJUSTIFIABLE COST TO THE FEDERAL GOVERNMENT. SBA WOULD NOT REJECT A PROPOSAL ON TAPE DRIVES THAT HAVE THE CAPABILITY OF WRITING IN TWO DENSITIES, I.E; 800 AND 1600 CPI'S, PROVIDED, AS A MINIMUM, THE PUBLISHED FIPS 3 STANDARD IS ADHERED TO."

IN VIEW OF THE RESPONSIBILITIES OF THE GENERAL SERVICES ADMINISTRATION (GSA) FOR CONTROLLING THE ACQUISITION OF AUTOMATIC DATA PROCESSING EQUIPMENT WITHIN THE GOVERNMENT PURSUANT TO THE REQUIREMENTS SET FORTH IN PUBLIC LAW 89-306, 79 STAT. 1127, WE ASKED GSA TO REVIEW THE TECHNICAL MATTERS IN ISSUE AND THAT AGENCY HAS REPLIED AS FOLLOWS:

"BASED ON OUR REVIEW OF THE REQUIREMENT, BOTH DURING OUR ASSISTANCE IN DRAFTING THE SPECIFICATIONS AND IN ASSISTING SBA DURING THE PROCUREMENT, WE BELIEVE THAT THE SPECIFICATIONS PROPERLY REFLECT THE MINIMUM REQUIREMENTS OF THE ADP SYSTEM NEEDED TO PROCESS ADEQUATELY THE WORKLOAD BOTH INITIALLY AND THROUGHOUT THE PROJECTED FIVE-YEAR LIFE OF THE SYSTEM.

"OUR TECHNICAL STAFF ALSO BELIEVES THAT THE REQUIRED FEATURES OF AN ADP SYSTEM WHICH WERE ISOLATED BY NCR AS BEING EXCESSIVE, ARE NEEDED FOR AN EFFECTIVE ADP SYSTEM OPERATING IN THE ENVIRONMENT REQUIRED BY THE SMALL BUSINESS ADMINISTRATION. THE MERE FACT THAT ONE OR MORE VENDORS MAY NOT BE IN A POSITION TO PROVIDE EQUIPMENT WITH THESE CHARACTERISTICS, DOES NOT IN ITSELF OBVIATE THE REQUIREMENT, NOR DOES IT MAKE SUCH REQUIREMENT UNREASONABLE IN A PROCUREMENT SENSE, SINCE ADPE WITH THE NEEDED CHARACTERISTICS IS READILY AVAILABLE FROM OTHER ADPE MANUFACTURERS.

"AGENCIES MAY ACQUIRE TAPE DRIVES OPERATING AT GENERAL DENSITIES OTHER THAN 800 CPI, NRZI SO LONG AS SUCH DRIVES ARE 1/2-INCH, 9-CHANNEL TAPE DRIVES OPERATING AT 1600, 556, AND 200 BPI. THE ACQUISITION OF TAPE DRIVES FOR A NEW SYSTEM OPERATING IN A 7-CHANNEL MODE WOULD REQUIRE A WAIVER OF THE FEDERAL INFORMATION PROCESSING STANDARDS BY THE NATIONAL BUREAU OF STANDARDS. HOWEVER, VENDORS MAY OFFER TAPE DRIVES OPERATING AT OTHER THAN 800 CPI, SO LONG AS THE DRIVES BEING OFFERED ARE CONSISTENT WITH THE REQUIREMENTS OF THE SOLICITATION.

"WE BELIEVE THAT THE REQUIREMENT FOR TAPE DRIVES OPERATING AT 800 CPI IS VALID AND SBA'S RESPONSE TO ALLEGATION NO. 7 IN EXHIBIT A TO MR. CHASE'S LETTER STATES THEIR POSITION PROPERLY."

PROTESTS, SUCH AS THIS, AGAINST PROCUREMENTS INCORPORATING PARTICULAR FEATURES OR REQUIREMENTS OF A TECHNICAL NATURE FOR THE ITEMS INVOLVED HAVE BEEN CONSIDERED BY THIS OFFICE ON MANY OCCASIONS. IT IS OUR CONSISTENT AND WELL-ESTABLISHED POSITION THAT THE DETERMINATION OF THE GOVERNMENT'S MINIMUM NEEDS, AND THE SUBSEQUENT DETERMINATION OF WHETHER A GIVEN PRODUCT CONFORMS TO THE SPECIFICATIONS, ARE PRIMARILY THE RESPONSIBILITY OF THE CONTRACTING AGENCY. SINCE OUR OFFICE DOES NOT POSSESS A SCIENTIFIC OR ENGINEERING STAFF, WE WILL ACCEPT THE JUDGMENT OF THE TECHNICAL PERSONNEL OF THE ADMINISTRATIVE AGENCIES IN THESE MATTERS, ABSENT SUFFICIENT EVIDENCE TO CLEARLY SHOW THAT THE AGENCY CONCLUSIONS ARE ARBITRARY OR WITHOUT SUBSTANTIAL SUPPORT.

BASED ON THE RECORD BEFORE OUR OFFICE, AS OUTLINED ABOVE, WE CANNOT CONCLUDE THAT THE ADMINISTRATIVE POSITION IS ARBITRARY OR THAT THE SPECIFICATIONS IN QUESTION EXCEED THE GOVERNMENT'S NEEDS AND UNNECESSARILY RESTRICT COMPETITION. ALTHOUGH YOUR ASSERTION THAT THE SPECIFICATIONS ARE RESTRICTIVE MAY BE TRUE TO THE EXTENT THAT THEY PREVENT YOU FROM SUBMITTING A RESPONSIVE OFFER WITHOUT CHANGING YOUR EQUIPMENT TO INCORPORATE SUCH FEATURES, IN THIS SENSE ALL SPECIFICATIONS ARE RESTRICTIVE SINCE THE REQUIREMENTS THEY ESTABLISH PRECLUDE THE PURCHASE OF NONCONFORMING ITEMS. HOWEVER, THERE IS NO REQUIREMENT THAT THE UNITED STATES PURCHASE EQUIPMENT MERELY BECAUSE IT IS OFFERED AT A LOWER PRICE, WITHOUT INTELLIGENT REFERENCE TO THE PARTICULAR NEEDS TO BE SERVED, NOR DO THE PROCUREMENT REGULATIONS CONTEMPLATE THAT MANUFACTURERS OR PROSPECTIVE OFFERORS BE ALLOWED TO DICTATE SPECIFICATIONS OVER AGENCY OBJECTIONS.

FOR THE REASONS SET FORTH ABOVE YOUR PROTEST IS DENIED.