B-170537, DEC. 21, 1970

B-170537: Dec 21, 1970

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REJECTION OF NCR'S OFFER WAS VALID IN LIGHT OF SHORTAGE OF TIME AND THE EXPRESS WARNING IN THE RFP THAT AWARD OF THE CONTRACT MAY BE MADE WITHOUT NEGOTIATION OF THE PROPOSALS RECEIVED. WINN: REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 8. PROPOSALS WERE RECEIVED FROM SIX OFFERORS. THE NCR PROPOSAL ON THE CENTURY 100 SYSTEM WITH 32K STORAGE WAS THE LOWEST EVALUATED OFFER RECEIVED. 020 ON THE UNIVAC 9400 MODEL WAS THE NEXT LOWEST EVALUATED OFFER. PROPOSALS WERE EVALUATED BY A CSC SELECTION COMMITTEE THAT COMPLETED ITS REVIEW ON JUNE 16. "MULTIPROGRAMMING CAPABILITY" WAS LISTED AS ONE OF THE MANDATORY CHARACTERISTICS OF THE EQUIPMENT TO BE OFFERED. THE SELECTION COMMITTEE DECIDED THAT THE CENTURY 100 COMPUTER WITH THE B-2 OPERATING SYSTEM DID NOT PROVIDE TRUE MULTIPROGRAMMING AND RULED THAT THE NCR PROPOSAL ON THAT EQUIPMENT WAS NONRESPONSIVE.

B-170537, DEC. 21, 1970

BID PROTEST - BIDDER RESPONSIVENESS - NEGOTIATIONS DENIAL OF PROTEST OF NATIONAL CASH REGISTER COMPANY (NCR) AGAINST THE AWARD OF A NEGOTIATED CONTRACT FOR ELECTRONIC DATA PROCESSING EQUIPMENT ISSUED BY THE CIVIL SERVICE COMMISSION TO UNIVAC ON THE BASIS THAT FAILURE TO INCLUDE "MULTIPROGRAMMING CAPABILITY" MADE NCR NONRESPONSIVE. REJECTION OF NCR'S OFFER WAS VALID IN LIGHT OF SHORTAGE OF TIME AND THE EXPRESS WARNING IN THE RFP THAT AWARD OF THE CONTRACT MAY BE MADE WITHOUT NEGOTIATION OF THE PROPOSALS RECEIVED.

TO MR. R. E. WINN:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 8, 1970, AND PRIOR CORRESPONDENCE, PROTESTING THE REJECTION BY THE CIVIL SERVICE COMMISSION (CSC) OF YOUR COMPANY'S OFFER ON ELECTRONIC DATA PROCESSING EQUIPMENT UNDER REQUEST FOR PROPOSALS CSC-70-25 WITHOUT FIRST BEING PROVIDED AN OPPORTUNITY TO DISCUSS THE PROPOSAL.

PROPOSALS WERE RECEIVED FROM SIX OFFERORS. NATIONAL CASH REGISTER (NCR) SUBMITTED TWO PROPOSALS. ONE OFFERED AN NCR CENTURY 100 COMPUTER WITH 32K STORAGE AND A B-2 OPERATING SYSTEM EVALUATED TO COST $325,473. THE OTHER OFFERED TWO CENTURY 100 COMPUTERS WITH 16K STORAGE IN EACH AND A B-1 OPERATING SYSTEM EVALUATED TO COST $443,117. THE NCR PROPOSAL ON THE CENTURY 100 SYSTEM WITH 32K STORAGE WAS THE LOWEST EVALUATED OFFER RECEIVED. AN OFFER FROM UNIVAC EVALUATED AT $410,020 ON THE UNIVAC 9400 MODEL WAS THE NEXT LOWEST EVALUATED OFFER.

PROPOSALS WERE EVALUATED BY A CSC SELECTION COMMITTEE THAT COMPLETED ITS REVIEW ON JUNE 16, 1970. IN AN AMENDMENT TO THE REQUEST FOR PROPOSALS, "MULTIPROGRAMMING CAPABILITY" WAS LISTED AS ONE OF THE MANDATORY CHARACTERISTICS OF THE EQUIPMENT TO BE OFFERED. THE SELECTION COMMITTEE DECIDED THAT THE CENTURY 100 COMPUTER WITH THE B-2 OPERATING SYSTEM DID NOT PROVIDE TRUE MULTIPROGRAMMING AND RULED THAT THE NCR PROPOSAL ON THAT EQUIPMENT WAS NONRESPONSIVE. THE NCR PROPOSAL ON THE TWO CENTURY 100 COMPUTERS WITH THE B-1 OPERATING SYSTEM ACKNOWLEDGED THAT SUCH CONFIGURATION LACKED MULTIPROGRAMMING AND IT WAS LIKEWISE RULED TO BE NONRESPONSIVE. THE UNIVAC SYSTEM WAS DETERMINED TO BE THE LOWEST COST SYSTEM WHICH MET ALL THE MANDATORY REQUIREMENTS AND A CONTRACT WAS AWARDED TO UNIVAC ON JUNE 29, 1970. YOUR COMPANY WAS ADVISED OF THE AWARD TO UNIVAC BY LETTER OF JUNE 30, 1970, AND SUBSEQUENTLY PROTESTED THAT ACTION.

THE PROTEST WAS DIRECTED TO THE REJECTION OF THE CENTURY 100 COMPUTER WITH THE B-2 OPERATING SYSTEM. IT WAS CONTENDED THAT SUCH EQUIPMENT MET THE MANDATORY REQUIREMENT OF MULTIPROGRAMMING AND THAT THE CSC SHOULD HAVE CONDUCTED DISCUSSIONS WITH NCR ON THE PROPOSAL. THE CSC PERSISTED IN THE VIEW THAT THE EQUIPMENT DID NOT MEET THE MULTIPROGRAMMING REQUIREMENT. RECOGNIZED THAT NCR HAD A CENTURY 200 COMPUTER WITH A B-3 OPERATING SYSTEM WHICH WAS NOT OFFERED IN THE PROPOSAL THAT WOULD MEET THE MULTIPROGRAMMING REQUIREMENT. HOWEVER, IT CONSIDERED THE SUBSTITUTION OF EQUIPMENT TO BE A MAJOR MODIFICATION THAT WOULD NOT BE APPROPRIATE.

OUR OFFICE REQUESTED THE NATIONAL BUREAU OF STANDARDS AND THE GENERAL SERVICES ADMINISTRATION TO ADVISE US WHETHER THE NCR PROPOSAL OFFERING THE CENTURY 100 COMPUTER WITH THE B-2 OPERATING SYSTEM MET THE REQUIREMENT FOR MULTIPROGRAMMING AS EXPRESSED IN THE REQUEST FOR PROPOSALS. BOTH AGENCIES INDICATED THAT ALTHOUGH THE EQUIPMENT WOULD MEET A LITERAL DEFINITION OF MULTIPROGRAMMING, IT DID NOT MEET MULTIPROGRAMMING AS CONTEMPLATED BY THE REQUEST FOR PROPOSALS AS A WHOLE.

IN VIEW OF THE REPORTS FROM THE NATIONAL BUREAU OF STANDARDS AND THE GENERAL SERVICES ADMINISTRATION, THE DETERMINATION BY THE CSC APPEARS PROPER UNDER THE CIRCUMSTANCES. THUS, WE CANNOT SAY THAT ITS DETERMINATION WAS ARBITRARY OR CAPRICIOUS. IN VIEW THEREOF, WE CANNOT CONCLUDE THAT THE REJECTION OF THE NCR PROPOSAL WAS LEGALLY IMPROPER. THAT CONNECTION, WE OBSERVE THAT THE LETTER FORWARDING THE REQUEST FOR PROPOSALS TO OFFERORS PROVIDED:

"AWARD OF CONTRACT MAY BE MADE WITHOUT DISCUSSION OR NEGOTIATION OF PROPOSALS RECEIVED. THEREFORE, PROPOSALS SHOULD BE SUBMITTED ON THE MOST FAVORABLE TERMS, FROM A PRICE AND TECHNICAL STANDPOINT, WHICH THE CONTRACTOR CAN OFFER THE GOVERNMENT." THUS, PROPOSERS WERE ALERTED TO THE POSSIBILITY THAT AN AWARD MIGHT BE MADE WITHOUT ANY PRIOR DISCUSSION OR NEGOTIATION. SUCH A PROCEDURE IS PROVIDED IN SECTION 1 3.805-1(A)(5) OF THE FEDERAL PROCUREMENT REGULATIONS (FPR). FURTHER, IT IS STATED THEREIN THAT "IN ANY CASE WHERE THERE IS UNCERTAINTY AS TO THE PRICING OR TECHNICAL ASPECTS OF ANY PROPOSALS, THE CONTRACTING OFFICER SHALL NOT MAKE AWARD WITHOUT ANY FURTHER EXPLORATION AND DISCUSSION PRIOR TO AWARD." THE COMMISSION WAS UNDER NO MISAPPREHENSION AS TO WHAT NCR WAS OFFERING. THE ONLY QUESTION WAS WHETHER WHAT WAS BEING OFFERED MET THE REQUEST FOR PROPOSAL REQUIREMENTS. THAT WAS DETERMINED FROM A TECHNICAL REVIEW OF THE PROPOSAL AND THE REQUEST FOR PROPOSALS. THEREFORE, THE SITUATION WAS NOT ONE REQUIRED BY THE FPR TO BE DISCUSSED WITH NCR. IN THAT REGARD, WE NOTE THAT TIME WAS RUNNING SHORT (TECHNICAL REVIEW OF PROPOSALS WAS COMPLETED JUNE 16, 1970) AND THAT AWARD HAD TO BE CONSUMMATED BEFORE THE END OF THE FISCAL YEAR (JUNE 30, 1970).

HOWEVER, AS NOTED ABOVE, THE CSC HAS RAISED SOME QUESTION AS TO WHETHER IT COULD HAVE PERMITTED NCR TO CHANGE ITS PROPOSAL IN ANY EVENT BECAUSE IT WOULD HAVE REQUIRED THE SUBSTITUTION OF ONE COMPUTER SYSTEM FOR ANOTHER. UNDER THE STRICT RULES OF FORMAL ADVERTISING, A BID WHICH DOES NOT CONFORM TO THE MATERIAL REQUIREMENTS OF THE INVITATION MUST BE REJECTED AS NONRESPONSIVE. ON THE OTHER HAND, THE RULES APPLICABLE TO NEGOTIATED PROCUREMENTS ARE BY DESIGN MORE FLEXIBLE AND CONTEMPLATE NEGOTIATIONS. FPR SEC. 1-3.805-1(A) PROVIDES THAT "AFTER RECEIPT OF INITIAL PROPOSALS, WRITTEN OR ORAL DISCUSSIONS SHALL BE CONDUCTED WITH ALL RESPONSIBLE OFFERORS WHO SUBMITTED PROPOSALS WITHIN A COMPETITIVE RANGE, PRICE AND OTHER FACTORS CONSIDERED." THE TERM "OTHER FACTORS" HAS BEEN HELD TO INCLUDE TECHNICAL ACCEPTABILITY OF PROPOSALS. 46 COMP. GEN. 606 (1967). WE RECOGNIZE THAT THE CONTRACTING AGENCIES HAVE A REASONABLE DEGREE OF DISCRETION IN DETERMINING WHETHER A TECHNICAL PROPOSAL IS WITHIN A COMPETITIVE RANGE. B-163024, AUGUST 27, 1968. HOWEVER, IN OUR OPINION, A PROPOSAL SHOULD BE REGARDED AS BEING WITHIN A COMPETITIVE RANGE UNLESS IT IS SO TECHNICALLY DEFICIENT OR OUT OF LINE IN PRICE AS TO PRECLUDE FURTHER MEANINGFUL NEGOTIATIONS. 45 COMP. GEN. 417 (1966) AND 47 ID. 252 (1967). IN THIS CASE, SINCE NCR INDICATED IN ITS PROPOSAL THAT IT WAS CAPABLE OF OFFERING A CENTURY 200 COMPUTER WITH A B-3 OPERATING SYSTEM THAT MET THE MULTIPROGRAMMING REQUIREMENT, IT DOES NOT APPEAR THAT THE PROPOSAL WAS SO TECHNICALLY DEFICIENT THAT SOME MEANINGFUL NEGOTIATIONS OR DISCUSSIONS COULD NOT HAVE BEEN CARRIED ON WITH NCR. WHETHER NCR WOULD HAVE REMAINED THE LOWEST OFFEROR AS A RESULT OF SUCH DISCUSSIONS IS, OF COURSE, A MATTER OF CONJECTURE.

WE ARE MAKING OUR VIEWS ON THIS MATTER AVAILABLE TO THE CSC BY FURNISHING IT WITH A COPY OF THIS LETTER.

IN THE CIRCUMSTANCES, THE PROTEST IS DENIED.