B-171113, MAR 3, 1971

B-171113: Mar 3, 1971

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SUCCESSFUL BIDDER WAS CLEARLY RESPONSIVE TO THE MANDATORY REQUIREMENTS AND ELIGIBLE FOR FURTHER CONSIDERATION ON THE BASIS OF COST AND DESIRABLE CHARACTERISTICS OFFERED. IT WOULD NOT HAVE BEEN PROPER TO EVALUATE CONVERSION COSTS ABSENT SOME PROVISION THEREFOR IN THE SOLICITATION. NO PRICE FOR WATS LINE SERVICES WAS ADDED TO PROTESTANT'S PRICE. THE PROTEST IS DENIED. GREENE AND HILL: FURTHER REFERENCE IS MADE TO YOUR PROTEST ON BEHALF OF U.S. THE REQUEST FOR PROPOSALS WAS ISSUED ON JULY 14. THE REQUEST FOR PROPOSALS PROVIDED AS FOLLOWS: "BASIS FOR SELECTION "THE RESPONSES TO THE SPECIFICATIONS WILL BE EVALUATED AS FOLLOWS: EACH PROPOSAL WILL BE REVIEWED BY THE CONTRACTING OFFICER AND A TECHNICAL OFFICER TO INSURE COMPLIANCE WITH GENERAL PROCUREMENT REGULATIONS AND RESPONSIVENESS TO THE MANDATORY TECHNICAL REQUIREMENTS.

B-171113, MAR 3, 1971

BID PROTEST DECISION DENYING PROTEST OF U.S. TIME-SHARING INC., AGAINST AWARD OF A CONTRACT TO THE BOEING COMPANY TO PERFORM THE MAJOR COMPUTING WORKLOAD OF THE FEDERAL WATER QUALITY ADMINISTRATION FOR THE REMAINDER OF FISCAL YEAR 1971. ALTHOUGH DEFICIENCIES EXISTED IN THE SOLICITATION AND EVALUATION PROCEDURE, SUCCESSFUL BIDDER WAS CLEARLY RESPONSIVE TO THE MANDATORY REQUIREMENTS AND ELIGIBLE FOR FURTHER CONSIDERATION ON THE BASIS OF COST AND DESIRABLE CHARACTERISTICS OFFERED; IT WOULD NOT HAVE BEEN PROPER TO EVALUATE CONVERSION COSTS ABSENT SOME PROVISION THEREFOR IN THE SOLICITATION; NO PRICE FOR WATS LINE SERVICES WAS ADDED TO PROTESTANT'S PRICE; AND THE EXISTENCE OF PROBLEMS WITH SUCCESSFUL BIDDER'S PERFORMANCE HAS NO BEARING ON THE VALIDITY OF TECHNICAL EVALUATIONS MADE PRIOR TO THE AWARD. ACCORDINGLY, THE PROTEST IS DENIED.

TO SURREY, KARASIK, GREENE AND HILL:

FURTHER REFERENCE IS MADE TO YOUR PROTEST ON BEHALF OF U.S. TIME SHARING, INCORPORATED (USTS), AGAINST THE AWARD OF A CONTRACT TO THE BOEING COMPANY, COMPUTER SERVICES DIVISION, BY THE UNITED STATES GEOLOGICAL SURVEY, DEPARTMENT OF THE INTERIOR, PURSUANT TO REQUEST FOR PROPOSALS NO. 4744.

THE REQUEST FOR PROPOSALS WAS ISSUED ON JULY 14, 1970, WITH A CLOSING DATE OF AUGUST 14, 1970, AND CALLED FOR PROPOSALS ON PERFORMING THE MAJOR COMPUTING WORKLOAD OF THE FEDERAL WATER QUALITY ADMINISTRATION (FWQA) FOR THE REMAINDER OF FISCAL YEAR 1971. THE REQUEST FOR PROPOSALS REQUIRED PROPOSALS TO BE SUBMITTED IN TWO SEPARATE SECTIONS, ONE CONTAINING COST AND CONTRACTUAL INFORMATION AND THE OTHER CONTAINING TECHNICAL INFORMATION. WITH REGARD TO THE BASIS FOR SELECTING THE SUCCESSFUL OFFEROR, THE REQUEST FOR PROPOSALS PROVIDED AS FOLLOWS:

"BASIS FOR SELECTION

"THE RESPONSES TO THE SPECIFICATIONS WILL BE EVALUATED AS FOLLOWS: EACH PROPOSAL WILL BE REVIEWED BY THE CONTRACTING OFFICER AND A TECHNICAL OFFICER TO INSURE COMPLIANCE WITH GENERAL PROCUREMENT REGULATIONS AND RESPONSIVENESS TO THE MANDATORY TECHNICAL REQUIREMENTS. THOSE PROPOSALS NOT MEETING THESE CRITERIA WILL NOT BE EVALUATED FURTHER. THE REMAINING PROPOSALS WILL BE EVALUATED TO DETERMINE THE EXTENT OF THEIR RESPONSIVENESS TO THE DESIRABLE CHARACTERISTICS AND THEIR GENERAL COST. POINTS WILL BE AWARDED BASED ON THESE FACTORS. VENDORS RANKING WITHIN THE ZONE OF CONTENTION MAY BE GIVEN BENCHMARK PROGRAMS TO RUN. THE FINAL SELECTION WILL BE BASED ON A COMBINATION OF (A) TOTAL POINTS SCORED BY THE VENDOR IN MEETING THE MANDATORY REQUIREMENTS, (B) DESIRABLE CHARACTERISTICS, (C) AND THE COST EVALUATION. THE COST WILL BE EVALUATED BASED ON THE ANTICIPATED WORKLOAD, THE RESULTS OF THE BENCHMARKS, THE ACCOUNTING METHOD EMPLOYED, ANY VOLUME DISCOUNT, AND THE PRICE SCHEDULE, TO ARRIVE AT THE BEST OVERALL PRICE TO THE GOVERNMENT." MANDATORY REQUIREMENTS, DESIRABLE CHARACTERISTICS, AND COST WERE ASSIGNED POINT VALUES OF 100, 70, AND 40, RESPECTIVELY.

SEVEN PROPOSALS WERE SUBMITTED. THREE WERE REJECTED AS TECHNICALLY UNACCEPTABLE. THE REMAINING FOUR WERE ALL DETERMINED TECHNICALLY ACCEPTABLE, AND, AFTER NEGOTIATIONS, WERE RANKED IN THE FOLLOWING ORDER ACCORDING TO THEIR EVALUATED COST:

BOEING $321,103

OPTIMUM SYSTEMS, INC. $344,275

COMNET $353,147

USTS $387,310 AWARD WAS MADE TO BOEING ON OCTOBER 23, 1970.

THE MAJOR GROUNDS OF THE PROTEST ARE THAT USTS WAS DETERMINED THE BEST TECHNICALLY QUALIFIED OFFEROR; THAT ITS PRICE REPRESENTS THE LOWEST OVERALL COST; THAT BOEING FAILED TO MEET THE MANDATORY REQUIREMENTS OF THE RFP; AND THAT BOEING FAILED TO EXECUTE TWO-THIRDS OF THE REQUIRED BENCHMARK PROGRAM. THE CONTENTIONS CONCERNING THE RELATIVE TECHNICAL COMPETENCE OF USTS AND BOEING AND THAT BOEING FAILED THE BENCHMARK ARE BASED PRIMARILY UPON A MEMORANDUM OF OCTOBER 9, 1970, TO THE CONTRACTING OFFICER FROM THE CHAIRMAN, REVIEW COMMITTEE FOR EXAMINATION OF RESPONSES TO RFP NO. 4744, FROM WHICH YOU CITE THE FOLLOWING PASSAGE:

"TECHNICAL CAPABILITIES DETERMINED FROM BENCHMARK

"THE FOUR FIRMS PERFORMING ON THE BENCHMARK WERE RATED WITH REFERENCE TO ACTUALLY MEETING STATED REQUIREMENTS AND OVERALL CAPABILITIES TO PRODUCE DESIRED COMPUTER RESULTS STARTING WITH INITIAL INPUT OF REQUEST TO FINAL RESULT. IN THIS RATING SYSTEM THE FIRMS WERE RATED 1, 2, 3, OR 4 IN ORDER OF BEST TO WORST. THERE ARE 23 REQUIREMENTS. THEREFORE IN THIS ANALYSIS, THE LOWEST NUMBERED VALUE IS THE HIGHEST RANKING. THE RATED VALUES ARE AS FOLLOWS:

FIRM TOTAL RATING

1. USTS 31

2. OSI 45

3. BOEING 50

4. COMNET 56

"BASED ON THE ABOVE ANALYSIS AND REVIEW OF THE TECHNICAL PROPOSAL, USTS IS JUDGED TO BE THE FIRM WITH THE BEST TECHNICAL CAPABILITIES TO MEET THE REQUIREMENTS OF THIS AGENCY." SINCE BOEING WAS RANKED SECOND TO USTS UNDER THE CATEGORY OF "MANDATORY REQUIREMENTS," ONE OF THE 23 REQUIREMENTS REFERRED TO ABOVE, YOU CONCLUDE THAT BOEING DID NOT MEET ALL OF THE "MANDATORY REQUIREMENTS." FURTHERMORE, YOU CONTEND THAT BOEING'S RANKING OF 3 OR 4 ON SOME OF THE OTHER 23 REQUIREMENTS INDICATES IT WAS DEFICIENT IN OTHER AREAS. WITH REGARD TO THE BENCHMARK REQUIREMENT, YOU POINT OUT THAT BOEING WAS RANKED 3RD IN THE CATEGORY OF "% OF BENCH JOBS RUN."

IT IS YOUR POSITION THAT USTS'S PRICE IS THE BEST OVERALL PRICE EVEN THOUGH IT WAS THE HIGHEST OF THE FOUR OFFERS. YOU CONTEND THAT THE BEST OVERALL PRICE SHOULD HAVE BEEN DETERMINED BY ADDING THE COST OF CONVERTING TO A NEW CONTRACTOR TO ALL OFFERORS' PRICES EXCEPT FOR USTS, THE INCUMBENT CONTRACTOR. YOU ESTIMATE THE CHANGEOVER COSTS AT BETWEEN $80,000 AND $200,000, WHICH IF ADDED TO THE OTHER PRICES OFFERED WOULD MAKE THEM HIGHER THAN THE USTS PRICE. WITH REGARD TO FWQA'S CONTENTION THAT THESE COSTS COULD NOT BE CONSIDERED BECAUSE THE RFP DID NOT SO PROVIDE, YOU COUNTER THAT $38,666.64 WAS ADDED TO YOUR PRICE FOR WATS LINES EVEN THOUGH THERE WAS NO PROVISION IN THE RFP FOR SO DOING. YOU ALSO CONTEND THAT THERE WERE IRREGULARITIES AND ERRORS IN EVALUATING THE PRICES, WHICH IF CORRECTED WOULD RESULT IN CHANGES IN THE COST RELATIONSHIPS OF THE OFFERORS AND MAKE COMNET THE LOW OFFEROR.

YOU ALSO ARGUE THAT THE RFP WAS DEFECTIVE IN THAT IT DID NOT APPRISE OFFERORS OF THE RELATIVE WEIGHTS ASSIGNED TO THE VARIOUS EVALUATION FACTORS UNDER THE TECHNICAL AND COST REQUIREMENTS. YOU POINT OUT THAT ALTHOUGH THERE WERE 43 EVALUATION FACTORS LISTED UNDER "MANDATORY REQUIREMENTS," THE LATTER CATEGORY WAS ASSIGNED A TOTAL VALUE OF 100 POINTS WITHOUT ANY BREAKDOWN AMONG THE 43 FACTORS. HOWEVER, EACH OF THE "DESIRABLE CHARACTERISTICS" WAS ASSIGNED POINTS. YOU ALSO ARGUE THAT SINCE USTS RECEIVED THE HIGHEST TECHNICAL RATING AND THE MAXIMUM POINT SCORE OF 40 FOR COSTS, ITS FAILURE TO RECEIVE THE AWARD MUST HAVE RESULTED FROM A CHANGE IN THE EMPHASIS ON COST FACTORS. YOU ALSO MAKE A POINT OF THE FACT THAT USTS'S CONTRACT WAS TWICE EXTENDED EVEN THOUGH IT WAS AN UNSUCCESSFUL OFFEROR UNDER THE SUBJECT RFP.

THE DEPARTMENT OF THE INTERIOR'S REPORT SHOWS THAT THE BRANCH OF CONTRACTS, GEOLOGICAL SURVEY, WAS DIRECTED ON MARCH 25, 1970, TO INITIATE PROCUREMENT OF COMPUTER SERVICES FOR FWQA FOR THE PERIOD JULY 1, 1970, THROUGH JUNE 30, 1971. HOWEVER, THE REQUISITION DID NOT INCLUDE ADEQUATE SPECIFICATIONS FOR A COMPETITIVE PROCUREMENT. SINCE ADEQUATE SPECIFICATIONS WERE NOT RECEIVED BEFORE THE EXPIRATION OF YOUR CONTRACT ON JUNE 30, 1970, IT WAS NECESSARY TO EXTEND YOUR CONTRACT FOR THREE MONTHS. PRIOR TO RECEIPT OF PROPOSALS, A FOUR-MEMBER REVIEW COMMITTEE FOR EXAMINATION OF RESPONSES TO RFP NO. 4744 WAS NAMED BY FWQA. WHEN PROPOSALS WERE RECEIVED ON AUGUST 14, 1970, THEY WERE FORWARDED TO THE REVIEW COMMITTEE FOR EVALUATION. THE COMMITTEE'S INITIAL MEMORANDUM DATED SEPTEMBER 8 AND AMENDMENT THERETO OF SEPTEMBER 17, 1970, WERE CONSIDERED UNACCEPTABLE BY THE CONTRACTING OFFICER. THEREFORE, HE REQUESTED A REVIEW OF THE EVALUATION BY THE COMPUTER CENTER DIVISION OF THE GEOLOGICAL SURVEY. IN A MEMORANDUM DATED SEPTEMBER 22, 1970, THE CHIEF, COMPUTER CENTER DIVISION, ADVISED THE CONTRACTING OFFICER IN PART AS FOLLOWS:

"THE EVALUATION LISTS FOUR PROPOSALS AS ACCEPTABLE AND RANKS THEM IN ORDER OF MERIT; THREE PROPOSALS ARE CITED AS UNACCEPTABLE.

"I ASSUME THE EVALUATION WAS THOROUGHLY DONE BUT, IN MY OPINION, THE WRITTEN TECHNICAL EVALUATION, PLUS AMENDMENT, IS INADEQUATE AS A BASIS FOR AWARDING A CONTRACT.

"I. RANKING

"A. THE EVALUATION RANKING SHOWS U.S. TIME-SHARING FIRST AND BOEING SECOND BUT THE AMENDMENT SHOWS A POINT RATING OF 165 FOR BOEING AND 160 FOR U.S. TIME-SHARING. IT IS NOT CLEAR WHAT OTHER FACTORS WOULD BE INVOLVED, OUTSIDE THE SCOPE OF THE POINT RATINGS SUCH AS TO ALTER THE 'ORDER OF MERIT' AS COMPARED TO A STRICT SEQUENCE OF NUMERICAL RATINGS. HOWEVER, IT WOULD SEEM REASONABLE TO ME TO ASK THE COMMITTEE TO PROVIDE A DOCUMENTATION FOR THE RANKING SEQUENCE AND, PERHAPS, AN ITEMIZATION OF THE POINT SCORES. THE DISCUSSION OF THE U.S. TIME SHARING AND BOEING PROPOSALS EXHIBITS IDENTICAL WORDING WITH RESPECT TO MANDATORY REQUIREMENTS AND OVERALL QUALIFICATIONS. WITH RESPECT TO DESIRABLE CHARACTERISTICS, THE EVALUATION NOTES THAT, FOR BOEING, THE GENERALIZED INFORMATION SYSTEM IS AN EXCEPTION BUT, THAT SEEMS TO BE NOT REALLY AN EXCEPTION BECAUSE THE EVALUATION STATES THAT THE SYSTEM IS AVAILABLE FOR IMPLEMENTATION ON REQUEST. FOR U.S. TIME-SHARING, UNAVAILABILITY OF WATS LINES IS NOTED IN THE EVALUATION AS AN EXCEPTION TO DESIRABLE CHARACTERISTICS AND THIS APPEARS TO BE A REAL EXCEPTION. HOWEVER, THE ONLY SIGNIFICANCE OF THIS EXCEPTION WOULD BE AN EFFECT ON COST; IT IS NOT A TECHNICAL CONSIDERATION."

BASED ON THIS MEMORANDUM, THE CONTRACTING OFFICER REQUESTED FURTHER ADVICE FROM THE COMMITTEE. SINCE THE COMMITTEE'S MEMORANDUM INDICATED USTS, BOEING, OSI, AND COMNET WERE ALL RESPONSIVE TO THE "MANDATORY REQUIREMENTS," THE CONTRACTING OFFICER COMMENCED NEGOTIATIONS WITH THOSE FIRMS PENDING RECEIPT OF THE ADDITIONAL REPORT. IN THE MEANTIME, HE EXTENDED USTS'S CONTRACT ANOTHER MONTH UNTIL OCTOBER 31, 1970.

THE COMMITTEE RESPONDED TO THE CONTRACTING OFFICER ON OCTOBER 9, 1970, ADVISING HIM THAT THEIR TECHNICAL EVALUATION WAS BASED ON THE TECHNICAL CAPABILITIES OF THE ABOVE FOUR OFFERORS AS DETERMINED FROM THE PROPOSALS AND AS OBSERVED IN PERFORMANCE OF THE BENCHMARK PROGRAMS, AND THAT ALL FOUR WERE TECHNICALLY CAPABLE. THEY CONCLUDED THAT USTS "DEMONSTRATED SUPERIOR CAPABILITIES," BUT THAT THE OTHER THREE FIRMS "WERE JUDGED TO BE VERY NEAR EQUAL." THE COMMITTEE CONCLUDED WITH THE FOLLOWING RECOMMENDATION:

"THE COMMITTEE THEREFORE RECOMMENDS THAT THE CONTRACT BE NEGOTIATED WITH ALL FOUR FIRMS FOUND TECHNICALLY ACCEPTABLE RECOGNIZING THAT WHILE ALL FOUR ARE TECHNICALLY ACCEPTABLE, THERE ARE VARYING DEGREES OF TECHNICAL CAPABILITIES. THESE VARYING DEGREES WILL RESULT IN VARYING DEGREES OF COMPUTER CAPABILITY AND FWQA OBJECTIVE FULFILLMENT OVER THE EIGHT MONTH PERIOD OF THIS CONTRACT. OUR ORDER OF PREFERENCE FROM A TECHNICAL STANDPOINT IS:

1. USTS

2. BOEING

3. OSI

4. COMNET

"THE COMMITTEE RECOMMENDS THAT THESE COMPANIES BE NEGOTIATED TO LEAST POSSIBLE COST PROPOSALS. PLEASE RECOGNIZE THAT THE COMMITTEE HAS AN ORDER OF PREFERENCE FOR THE FIRMS FROM A TECHNICAL STANDPOINT. WE HOPE THE NEGOTIATION CAN OBTAIN THE MOST TECHNICALLY QUALIFIED FIRM."

SINCE THE COMMITTEE HAD CONCLUDED THAT BOEING, OSI, AND COMNET WERE TECHNICALLY ACCEPTABLE AND SHOULD BE INCLUDED IN NEGOTIATIONS, ALONG WITH USTS, BUT HAD GIVEN ALL THREE FIRMS LESS THAN 100 POINTS FOR MEETING THE "MANDATORY REQUIREMENTS," THE CONTRACTING OFFICER REQUESTED CLARIFICATION. THE COMMITTEE RESPONDED ON OCTOBER 16, 1970, ADVISING THAT ALL FOUR FIRMS WERE GIVEN 100 POINTS FOR MEETING THE "MANDATORY REQUIREMENTS". THE COMMITTEE ALSO EXPLAINED THAT ITS RANKING OF THE FIRMS FROM THE BENCHMARK RUNS, CITED BY YOU AND QUOTED HERETOFORE, SHOULD NOT BE INTERPRETED AS AN INDICATION THAT BOEING, OSI, AND COMNET DID NOT MEET THE "MANDATORY REQUIREMENTS". FURTHERMORE, IT IS STATED THAT ALL FIRMS PASSED THE BENCHMARK, BUT WITH VARYING DEGREES OF EFFICIENCY. IT IS POINTED OUT THAT HAD BOEING NOT PASSED THE BENCHMARK, IT WOULD HAVE BEEN RERUN AS PROVIDED IN THE RFP. ALSO, IT IS STATED IN THE ADMINISTRATIVE REPORT THAT THE PRIMARY PURPOSE OF THE BENCHMARK WAS TO DETERMINE THE ACTUAL COST TO RUN SPECIFIC PROGRAMS ON THE PROPOSED SYSTEMS.

WE BELIEVE THAT THE RECORD BEFORE US CLEARLY SUPPORTS THE DETERMINATION THAT BOEING WAS RESPONSIVE TO THE "MANDATORY REQUIREMENTS" AND, THEREFORE, ELIGIBLE FOR FURTHER CONSIDERATION ON THE BASES OF DESIRABLE CHARACTERISTICS OFFERED AND COST. IT IS EQUALLY CLEAR THAT USTS WAS CONSIDERED SUPERIOR TECHNICALLY. IN THE ABSENCE OF A DETERMINATION THAT BOEING WAS SO INFERIOR AS TO PRECLUDE ANY POSSIBILITY OF MEANINGFUL NEGOTIATIONS, THE EXCLUSION OF BOEING FROM FURTHER NEGOTIATIONS ON THE BASIS THAT USTS WAS SUPERIOR TECHNICALLY WOULD BE CONTRARY TO THE PROVISIONS OF THE RFP AND THE REQUIREMENT OF FPR 1-3.805-1(A) THAT NEGOTIATIONS SHALL BE CONDUCTED WITH ALL RESPONSIBLE OFFERORS WITHIN A COMPETITIVE RANGE. SEE 45 COMP. GEN. 417, 426, 427 (1966) AND 48 COMP. GEN. 314, 317 (1968) INVOLVING AN EQUIVALENT PROVISION IN ASPR.

WITH REGARD TO YOUR CONTENTION THAT A CHANGE-OVER COST OF $80,000 TO $200,000, SHOULD HAVE BEEN CONSIDERED IN THE PRIME EVALUATION, IT IS REPORTED THAT THE COMMITTEE RECOMMENDED A COST FACTOR OF $85,000 FOR THIS ITEM. INCLUSION IN THE EVALUATION OF CONVERSION COSTS WAS CONSIDERED BY THE CONTRACT SPECIALIST AND THE CONTRACTING OFFICER AND WAS REJECTED FOR REASONS SUMMARIZED IN THE ADMINISTRATIVE REPORT OF NOVEMBER 23, 1970. OUR VIEW, WHETHER UNDER NEGOTIATION OR FORMAL ADVERTISING, SOUND PROCUREMENT POLICY DICTATES THAT OFFERORS BE INFORMED OF ALL EVALUATION FACTORS AND THE RELATIVE WEIGHT TO BE ATTACHED TO EACH. 48 COMP. GEN. 314, 318 (1968). ACCORDINGLY, WE DO NOT BELIEVE IT WOULD HAVE BEEN PROPER TO EVALUATE CONVERSION COSTS ABSENT SOME PROVISION THEREFOR IN THE SOLICITATION AND SOME SETTLED JUDGMENT AS TO ITS VALUE. IT IS REPORTED THAT OFFERS COMPLYING WITH THE "MANDATORY REQUIREMENTS" RECEIVED A SCORE OF 100 WHILE THOSE FAILING TO MEET ANY ONE OF THE CONSTITUENT REQUIREMENTS RESULTED IN A SCORE OF ZERO AND PRECLUDED FURTHER CONSIDERATION OF THE PROPOSAL. ON THE OTHER HAND, THE "DESIRABLE CHARACTERISTICS" WERE OPTIONAL, AND WORTH THE RELATIVE VALUES SHOWN IN PART B OF THE SPECIFICATIONS FOR EACH ITEM IN DETERMINING THE OFFER MOST ADVANTAGEOUS TO THE GOVERNMENT. THE 40 POINTS ASSIGNED TO "COST" WAS FOR THE PURPOSE OF ELICITING CERTAIN PRICE SCHEDULING, BILLING AND RELATED INFORMATION AND NOT FOR THE PURPOSE OF GIVING A WEIGHT TO THE PRICE QUOTED BY A PARTICULAR OFFEROR.

IN OUR OPINION THE "MANDATORY REQUIREMENTS" AND "COST" EVALUATION FACTORS AND WEIGHTS ASSIGNED THERETO WERE NOT CONSISTENT WITH SOUND PROCUREMENT PRACTICE. WE DO NOT BELIEVE THAT THE ASSIGNMENT OF 100 POINTS TO THE "MANDATORY REQUIREMENTS" WITHOUT INDICATING THE RELATIVE IMPORTANCE OF EACH OF THE 43 FACTORS THEREIN AND THE PRACTICE OF GIVING ZERO POINTS FOR FAILING TO MEET THESE "MANDATORY REQUIREMENTS" COMPLETELY CAN BE REGARDED AS A PROPER METHOD OF DETERMINING WHICH PROPOSALS ARE WITHIN A "COMPETITIVE RANGE", NOR IS SUCH METHOD CONDUCIVE TO OBTAINING THE MAXIMUM COMPETITION CONTEMPLATED BY THE STATUTES AND REGULATIONS GOVERNING NEGOTIATED PROCUREMENTS. IN THE ABSENCE OF A WEIGHTING SYSTEM IN WHICH THE RELATIVE IMPORTANCE OF EACH OF THE FACTORS IS CONSIDERED, BORDER-LINE PROPOSALS WOULD BE AUTOMATICALLY EXCLUDED EVEN THOUGH THEY MAY BE REASONABLY SUSCEPTIBLE OF BEING MADE ACCEPTABLE BY ADDITIONAL OR CLARIFYING INFORMATION THROUGH DISCUSSIONS. SUCH A RESULT IS, IN OUR VIEW, IMPROPER. SEE B 169645(1) AND (2), JULY 24, 1970; 50 COMP. GEN.

, 47 COMP. GEN. 29, 53 (1967). HOWEVER, SINCE IT DOES NOT APPEAR THAT THE SELECTION PROCESS WAS ADVERSELY AFFECTED BY THE IMPROPER PROCEDURE, WE CANNOT CONCLUDE THAT THE DEFICIENCY WAS PREJUDICIAL. THE "COST" EVALUATION FACTOR WAS POSSIBLY MISLEADING IN THAT THE COST TO THE GOVERNMENT WAS NOT TO BE EVALUATED THEREUNDER AND BECAUSE VARIOUS FACTORS THEREIN WERE NOT WEIGHTED. HOWEVER, EVEN IF THIS EVALUATION FACTOR WAS MISCONSTRUED, IT WOULD NOT HAVE CHANGED THE RELATIVE STANDING OF THE OFFERORS.

THE AGENCY DENIES THAT ANY PRICE FOR WATS LINES WAS ADDED TO YOUR PRICE. THEY ALSO STATE THAT THE FIGURES USED BY YOU IN CALCULATING THE FINAL PRICE FOR COMNET AND OSI ARE INCORRECT. FURTHERMORE, THEY POINT OUT THAT EVEN IF YOU HAD THE CORRECT PROPOSED RATES OF THE OFFERORS YOU COULD NOT CHECK THE ACCURACY OF THE GOVERNMENT'S CALCULATIONS OF THE EVALUATED PRICES WITHOUT THE BENEFIT OF THE BENCHMARK RESULTS. THE PRICES USED BY THE GOVERNMENT IN THE EVALUATIONS WERE CHECKED AND CONFIRMED PRIOR TO THE AWARD. WITH REGARD TO YOUR CONTENTIONS CONCERNING BOEING'S PRICE, IT IS REPORTED THAT ALTHOUGH BOEING DID PROPOSE "POINT TO POINT" SERVICES, THEY AGREED DURING NEGOTIATIONS TO PROVIDE FREE COMMUNICATION SERVICE TO THE GOVERNMENT TERMINALS. ALSO, THE COST OF SHIPPING OUTPUT WAS COMPUTED AND INCLUDED IN ARRIVING AT BOEING'S EVALUATED PRICE. BOEING'S PRICE AS REPORTED ABOVE IS SUBSTANTIATED IN THE REPORT.

YOU FURNISHED OUR OFFICE A COPY OF A MEMORANDUM DATED NOVEMBER 19, 1970, FROM THE DIRECTOR, DIVISION OF ADP SERVICES, FWQA, TO THE CONTRACTING OFFICER, WHICH ADVISES OF CERTAIN PROBLEMS WITH BOEING'S PERFORMANCE. IS REPORTED THAT THESE PROBLEMS WERE DISCUSSED WITH BOEING AND THEY HAVE OR WILL BE RESOLVED. FURTHERMORE, IT IS CORRECTLY POINTED OUT THAT THE EXISTENCE OF THESE PROBLEMS ON NOVEMBER 19, 1970, HAS NO BEARING ON THE VALIDITY OF THE TECHNICAL EVALUATIONS MADE PRIOR TO THE AWARD ON OCTOBER 23, 1970.

IN THESE CIRCUMSTANCES, WE SEE NO BASIS FOR OUR OFFICE TO DISTURB THE AWARD TO BOEING. WE ARE, HOWEVER, ADVISING THE SECRETARY OF THE INTERIOR OF THE DEFICIENCIES IN THE SOLICITATION AND EVALUATION PROCEDURE NOTED ABOVE.