B-171798(2), AUG 18, 1971

B-171798(2): Aug 18, 1971

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DSA WAS PROHIBITED FROM ADVISING ANY OTHER OFFEROR OF POTTER'S "ALL OR NONE" OFFER. ENCLOSED ARE COPIES OF OUR DECISIONS OF TODAY TO STORAGE TECHNOLOGY CORPORATION (STC) AND CALIFORNIA COMPUTER PRODUCTS. WERE RAISED INITIALLY BY STC AND CALCOMP AND ARE DISPOSED OF IN OUR DECISIONS TO THOSE CORPORATIONS. YOUR PROTEST IS DENIED FOR THE REASONS SET FORTH BELOW. IT IS YOUR CONTENTION THAT VENDORS SHOULD HAVE BEEN FOREWARNED OF POTTER'S "ALL OR NONE" OFFER. DSA WAS PROHIBITED FROM ADVISING ANY OTHER OFFEROR OF POTTER'S "ALL OR NONE" OFFER. IT IS ARGUED THAT POTTER'S OFFER WAS REDUCED BY $250. OUR OFFICE HAS RECOGNIZED THE NEED FOR RECOGNITION OF THE RESIDUAL VALUE FACTOR WHERE ADP EQUIPMENT IS BEING PROCURED.

B-171798(2), AUG 18, 1971

BID PROTEST - NOTIFICATION OF "ALL OR NONE" OFFER DENIAL OF PROTEST BY MEMOREX CORPORATION AGAINST THE AWARD OF A CONTRACT TO POTTER INSTRUMENT CO., INC. UNDER AN RFP ISSUED BY THE DEFENSE SUPPLY AGENCY. ASPR 3-507.2 REQUIRES THAT AFTER RECEIPT OF A PROPOSAL NO INFORMATION CONTAINED THEREIN SHALL BE MADE AVAILABLE TO THE PUBLIC, OR ANYONE WITHIN THE GOVERNMENT NOT HAVING A LEGITIMATE INTEREST THEREIN. THEREFORE, DSA WAS PROHIBITED FROM ADVISING ANY OTHER OFFEROR OF POTTER'S "ALL OR NONE" OFFER.

TO MEMOREX CORPORATION:

WE REFER TO YOUR LETTER DATED APRIL 1, 1971, AND YOUR LETTER OF APRIL 23, 1971, FORWARDED TO OUR OFFICE BY THE HONORABLE CHARLES S. GUBSER, HOUSE OF REPRESENTATIVES, PROTESTING AGAINST THE AWARD OF A CONTRACT TO POTTER INSTRUMENT COMPANY, INC., UNDER REQUEST FOR PROPOSALS (RFP) NO. DSAH00-71- R-0010, ISSUED BY THE DEFENSE SUPPLY AGENCY (DSA), DIRECTORATE OF PROCUREMENT & PRODUCTION, CAMERON STATION, ALEXANDRIA, VIRGINIA.

ENCLOSED ARE COPIES OF OUR DECISIONS OF TODAY TO STORAGE TECHNOLOGY CORPORATION (STC) AND CALIFORNIA COMPUTER PRODUCTS, INC. (CALCOMP), DENYING THEIR RESPECTIVE PROTESTS AGAINST THE AWARD TO POTTER. YOUR OBJECTIONS TO THIS PROCUREMENT, IN THE MAIN, WERE RAISED INITIALLY BY STC AND CALCOMP AND ARE DISPOSED OF IN OUR DECISIONS TO THOSE CORPORATIONS. WE SHALL DISCUSS YOUR PROTEST TO THE EXTENT THAT THESE DECISIONS DO NOT COVER YOUR SPECIFIC ALLEGATIONS. IN ANY EVENT, YOUR PROTEST IS DENIED FOR THE REASONS SET FORTH BELOW.

IT IS YOUR CONTENTION THAT VENDORS SHOULD HAVE BEEN FOREWARNED OF POTTER'S "ALL OR NONE" OFFER. AS POINTED OUT IN OUR DECISION TO STC, DSA ACTED PROPERLY IN CONSIDERING POTTER'S BID ON "ALL OR NONE" BASIS. PARAGRAPH 3-507.2 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) REQUIRES THAT AFTER THE RECEIPT OF A PROPOSAL NO INFORMATION CONTAINED IN ANY PROPOSAL SHALL BE MADE AVAILABLE TO THE PUBLIC, OR ANYONE WITHIN THE GOVERNMENT NOT HAVING A LEGITIMATE INTEREST THEREIN, WITH CERTAIN EXCEPTIONS NOT APPLICABLE HERE. THEREFORE, DSA WAS PROHIBITED FROM ADVISING ANY OTHER OFFEROR OF POTTER'S "ALL OR NONE" OFFER.

IT IS ARGUED THAT POTTER'S OFFER WAS REDUCED BY $250,000 OF VALUELESS NONEXISTENT RESIDUAL VALUE. OUR OFFICE HAS RECOGNIZED THE NEED FOR RECOGNITION OF THE RESIDUAL VALUE FACTOR WHERE ADP EQUIPMENT IS BEING PROCURED. SEE B-163074, APRIL 21, 1971, "PROBLEMS IN DEVELOPING THE CORPS OF ENGINEERS' AUTOMATED MANAGEMENT INFORMATION SYSTEM." IN THIS REGARD, AS STATED IN OUR DECISION TO STC, WE DO NOT AGREE THAT DSA COULD HAVE FEASIBLY REDUCED POTTER'S RESIDUAL VALUE BY REDUCING FROM THE PURCHASE PRICES AMOUNTS EQUIVALENT TO THE FACTORS OF FREE MAINTENANCE AND RENTAL CREDIT TOWARD PURCHASE.

ALTHOUGH YOU CORRECTLY STATE THAT YOUR BASE PRICES ON CERTAIN PORTIONS OF THE REQUIREMENT WOULD HAVE BEEN LOWER THAN THOSE OF POTTER OVER THE 3-YEAR PERIOD, THIS DISREGARDS THE ACCEPTABLE "ALL OR NONE" POTTER OFFER, WHICH RESULTED IN AN AWARD TO AN OFFEROR SUBMITTING THE LOWEST OVERALL COST TO THE GOVERNMENT OF ALL THE POSSIBLE COMBINATIONS OF OFFERS SUBMITTED.