B-174012, JUL 25, 1972, 52 COMP GEN 47

B-174012: Jul 25, 1972

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REPAIR OF THREE TYPES OF ELECTRON MICROSCOPES BECAUSE THE SPECIFICATIONS WERE CONSIDERED INADEQUATE FOR COMPETITIVE PROCUREMENT. " DID NOT RESULT IN THE PRICE COMPETITION CONTEMPLATED BY SECTION 1-3.807-1(B)(1) OF THE FEDERAL PROCUREMENT REGULATIONS SINCE SEPARATE AWARDS UNDER THE INITIAL RFP WOULD HAVE OBTAINED THE SERVICES FOR LESS. SINCE JUSTIFICATION FOR AN AGGREGATE AWARD IS SOUND ONLY IF THE GOVERNMENT REALIZES A SUBSTANTIAL SAVINGS FROM THE CONSOLIDATION. THE AGGREGATE AWARD REQUIREMENT WAS BOTH UNNECESSARY AND IMPROPER. REJECTION OF THE LOW OFFEROR (ON TWO ITEMS) WHO HAD NOT COMPLIED WITH THE AGGREGATE REQUIREMENT WAS NOT JUSTIFIED. ETC. - TECHNICAL CRITERIA UTILIZATION WHERE OFFERORS WERE NOT REQUIRED TO SUBMIT TECHNICAL PROPOSALS TO SERVICE ELECTRON MICROSCOPES BUT ONLY TO OFFER TO CONFORM TO THE BEST PRACTICES OF THE INDUSTRY.

B-174012, JUL 25, 1972, 52 COMP GEN 47

CONTRACTS - NEGOTIATION - COMPETITION - AGGREGATE AWARD BASIS EFFECT THE CANCELLATION OF A REQUEST FOR PROPOSALS (RFP) FOR THE INSPECTION, MAINTENANCE, AND REPAIR OF THREE TYPES OF ELECTRON MICROSCOPES BECAUSE THE SPECIFICATIONS WERE CONSIDERED INADEQUATE FOR COMPETITIVE PROCUREMENT, AND THE REISSUANCE OF THE RFP ON THE BASIS AN AWARD "WOULD BE MADE IN THE AGGREGATE, PRICE, AND OTHER FACTORS CONSIDERED," DID NOT RESULT IN THE PRICE COMPETITION CONTEMPLATED BY SECTION 1-3.807-1(B)(1) OF THE FEDERAL PROCUREMENT REGULATIONS SINCE SEPARATE AWARDS UNDER THE INITIAL RFP WOULD HAVE OBTAINED THE SERVICES FOR LESS. THEREFORE, SINCE JUSTIFICATION FOR AN AGGREGATE AWARD IS SOUND ONLY IF THE GOVERNMENT REALIZES A SUBSTANTIAL SAVINGS FROM THE CONSOLIDATION, THE AGGREGATE AWARD REQUIREMENT WAS BOTH UNNECESSARY AND IMPROPER, AND REJECTION OF THE LOW OFFEROR (ON TWO ITEMS) WHO HAD NOT COMPLIED WITH THE AGGREGATE REQUIREMENT WAS NOT JUSTIFIED. BIDDERS - QUALIFICATIONS CAPACITY, ETC. - TECHNICAL CRITERIA UTILIZATION WHERE OFFERORS WERE NOT REQUIRED TO SUBMIT TECHNICAL PROPOSALS TO SERVICE ELECTRON MICROSCOPES BUT ONLY TO OFFER TO CONFORM TO THE BEST PRACTICES OF THE INDUSTRY, AND THE FACTORS MAKING UP THE TECHNICAL CRITERIA WERE EVALUATION OF CAPACITY FACTORS, THE DETERMINATION AN OFFEROR WAS TECHNICALLY UNACCEPTABLE AMOUNTED, IN ESSENCE, TO A DETERMINATION OF NONRESPONSIBILITY FOR REASONS OF CAPACITY THAT REQUIRED A REFERRAL TO THE SMALL BUSINESS ADMINISTRATION (SBA) UNDER PARAGRAPH 1-1.708.3 OF THE FEDERAL PROCUREMENT REGULATIONS. FURTHERMORE, THE AWARD OF THE NONPERSONAL SERVICE, FIXED PRICE, CONTRACT TO THE OFFEROR DETERMINED CAPABLE OF PROVIDING THE HIGHEST QUALITY SERVICES WAS WITHOUT AUTHORITY AND, THEREFORE, IF THE SBA WILL ISSUE A CERTIFICATE OF COMPETENCY TO THE REJECTED OFFEROR, THE AWARD MADE SHOULD BE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT.

TO THE SECRETARY OF HEALTH, EDUCATION, AND WELFARE, JULY 25, 1972:

REFERENCE IS MADE TO LETTERS DATED DECEMBER 16, 1971, AND MARCH 9, 1972, FROM THE DIRECTOR OF PROCUREMENT AND MATERIEL MANAGEMENT, OASAM, FURNISHING US A REPORT AND A SUPPLEMENTAL REPORT IN CONNECTION WITH A PROTEST BY SIEMS INTERNATIONAL ELECTRON MICROSCOPE SERVICE (SIEMS) AGAINST THE CANCELLATION OF REQUEST FOR PROPOSAL (RFP) NIH-71-PT)-335CC (HEREAFTER RFP-335CC), THE RESOLICITATION OF THE REQUIREMENT, AND THE AWARD TO ANOTHER FIRM UNDER RFP NO. NIH-72-PT)-120CC (HEREAFTER RFP 120CC) BY THE NATIONAL INSTITUTES OF HEALTH (NIH).

RFP-335CC, ISSUED ON MARCH 29, 1971, WAS FOR THE INSPECTION, MAINTENANCE AND REPAIR OF SEVENTEEN SIEMENS ELECTRON MICROSCOPES, MODELS 1, 1A AND 101, UNDER ITEM NOS. 1, 2 AND 3, FOR THE PERIOD APRIL 1, 1971, THROUGH MARCH 31, 1972. ACCORDING TO THE RECORD, RFP-335CC WAS ISSUED ONLY TO THE SIEMENS CORPORATION, THE MANUFACTURER OF THE MICROSCOPES, SINCE A NONCOMPETITIVE PROCUREMENT WAS CONTEMPLATED, AND THE RFP WAS SYNOPSIZED IN THE COMMERCE BUSINESS DAILY FOR INFORMATIONAL PURPOSES ONLY. HOWEVER, SIEMS REQUESTED A COPY OF THE SOLICITATION PRIOR TO CLOSING DATE FOR THE PURPOSE OF SUBMITTING AN OFFER. SIEMS SUBMITTED AN OFFER OF $1,300 PER INSTRUMENT FOR MODELS 1 AND 1A, WHILE SIEMENS MADE AN OFFER OF $1,600 PER INSTRUMENT FOR MODELS 1 AND 1A, AND $2,000 FOR MODEL 101.

AFTER AN EVALUATION OF THE SIEMS PROPOSAL, NIH DID NOT CONSIDER SIEMS' SERVICE ADEQUATE TO MEET REQUIREMENTS. NIH BASED THIS CONCLUSION ON THE FACT THAT (1) SIEMS WOULD NOT HAVE ACCESS TO SPARE PARTS OR THE LATEST TRAINING TECHNIQUES ESSENTIAL TO SERVICING UPDATED INSTRUMENTS; (2) MR. SIEMER SIEMS' PRIOR SERVICE, AS AN EMPLOYEE OF SIEMENS, HAD NOT BEEN COMPLETELY SATISFACTORY; AND (3) ON OCCASIONS MR. SIEMS, WHO WAS ALSO THE FOUNDER OF THE SIEMS FIRM, WHILE AN EMPLOYEE OF SIEMENS, FOUND IT NECESSARY TO CONTACT THE COMPANY FOR ASSISTANCE, WHICH HE WOULD BE UNABLE TO DO AS AN INDEPENDENT OPERATOR. NIH POINTED OUT THAT ITS SCIENTISTS REQUIRED "HIGH RESOLUTION" MICROSCOPY WHICH EXCEEDED ORDINARY SERVICE AND NECESSITATED THE SERVICE OF OUTSTANDING TECHNICIANS. NIH FURTHER STATED THAT AWARD IN THE AGGREGATE WAS NECESSARY TO PROVIDE AN ECONOMICAL INDUCEMENT FOR THE CONTRACTOR TO PROVIDE PROPER SERVICING FOR ALL TYPES OF EQUIPMENT, ALTHOUGH THE SOLICITATION PERMITTED AWARDS ON AN ITEM BASIS (PAR. 10, STANDARD FORM 33A).

THE CONTRACTING OFFICER SUBSEQUENTLY DETERMINED THAT SIEMS WAS NOT RESPONSIBLE AND THIS DETERMINATION WAS REFERRED TO THE SMALL BUSINESS ADMINISTRATION (SBA), PURSUANT TO FEDERAL PROCUREMENT REGULATIONS (FPR) 1- 1.708. SBA ISSUED SIEMS A CERTIFICATE OF COMPETENCY (COC) ON JUNE 15, 1971, SUBJECT TO RECONSIDERATION IF THE AWARD WAS NOT MADE WITHIN 60 DAYS. THE CONTRACTING OFFICER, PURSUANT TO FPR 1-1.708.3, REQUESTED THAT SBA RECONSIDER ITS DECISION TO ISSUE A COC. A MEETING WAS HELD IN CONNECTION WITH THE COC WHICH WAS ATTENDED BY REPRESENTATIVES FROM SBA, NIH, AND THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE (DHEW). WHILE SBA REFUSED TO WITHDRAW THE COC, IT APPARENTLY AGREED WITH THE NIH AND DHEW REPRESENTATIVES THAT IF THE SPECIFICATIONS WERE INADEQUATE, AS NIH MAINTAINED, THE SPECIFICATIONS SHOULD BE REVISED AND THE REQUIREMENT RESOLICITED. IT WOULD ALSO APPEAR THAT THOSE PRESENT AT THE MEETING WERE IN AGREEMENT THAT AN AGGREGATE AWARD MIGHT BE APPROPRIATE AND, IF SO, SHOULD BE INCLUDED IN THE NEW SPECIFICATIONS.

AFTER FURTHER ANALYSIS IT WAS DECIDED THAT THE SPECIFICATIONS WERE INADEQUATE FOR COMPETITIVE PROCUREMENT AND ON SEPTEMBER 17, 1971, BOTH SIEMS AND SIEMENS WERE ADVISED THAT NO AWARD WOULD BE MADE ON RFP-335CC AND THAT THE REQUIREMENT WOULD BE RESOLICITED AT A LATER DATE. RFP 120CC WAS SUBSEQUENTLY ISSUED FOR THE INSPECTION, MAINTENANCE AND REPAIR OF SIEMENS, MODEL 1, 1A AND 101, ELECTRON MICROSCOPES FOR THE PERIOD JANUARY 1, 1972, THROUGH DECEMBER 31, 1972. THE SOLICITATION SPECIFICALLY STATED THAT AWARD WOULD BE IN THE AGGREGATE, PRICE AND OTHER FACTORS CONSIDERED. THE COVERING LETTER ACCOMPANYING RFP-120CC ISSUED NOVEMBER 29, 1971, STATED THAT AN AGGREGATE AWARD WAS CONTEMPLATED AND ANY OFFER NOT QUOTING ON ALL THREE MICROSCOPES WOULD BE DECLARED NONRESPONSIVE. THE COVERING LETTER ALSO PROVIDED:

EACH OFFER MUST BE ACCOMPANIED WITH APPROPRIATE DOCUMENTATION IN SUFFICIENT DETAIL TO PERMIT EVALUATION BY THE GOVERNMENT IN THE FOLLOWING AREAS OF SIGNIFICANT INTEREST:

TECHNICAL EVALUATION CRITERIA

1. POOL OF SKILLED SERVICE TECHNICIANS AND ENGINEERS IN TERMS OF NUMBERS AND QUALIFICATIONS. SUBMIT NAMES OF INDIVIDUALS ACTUALLY TO BE ASSIGNED TO SERVICE THE INSTRUMENTS, AND A LIST OF POTENTIAL SUBSTITUTES (REASONABLE NUMBER) TOGETHER WITH A RESUME OF THEIR EXPERIENCE AND EDUCATIONAL BACKGROUNDS. NIH REQUIRES BEST POSSIBLE ASSISTANCE IN SOLVING DIFFICULT TECHNICAL PROBLEMS. 30 POINTS.

2. SUFFICIENCY OF STOCK OF SPARE PARTS AND ABILITY TO QUICKLY OBTAIN THE QUANTITY AND VARIETY OF SPARE PARTS WHICH COULD CONCEIVABLY BE REASONABLY REQUIRED IN SERVICE OF THE INSTRUMENTS. 20 POINTS.

3. COGNIZANCE OF NEW DESIGN CHANGES AND IMPROVEMENTS IN SERVICING TECHNIQUES DEVELOPED BY THE MANUFACTURER OF THE INSTRUMENTS. EXPERIENCE AND ABILITY TO SERVICE THE NEEDS OF HIGH RESOLUTION MICROSCOPISTS. SUBMIT NAMES, ORGANIZATION AND PHONE NUMBERS OF "HIGH RESOLUTION" MICROSCOPISTS WHO HAVE BEEN SERVICE CUSTOMERS. 25 POINTS

4. RESPONSE TO EMERGENCY SITUATIONS AND POTENTIAL FOR REMEDYING THE PROBLEM WITH MINIMUM DOWN TIME. SEE SPECIFICATIONS FOR RESPONSE TIME TO CALLS FOR SERVICE. 25 POINTS.

YOU ARE REQUESTED TO SUBMIT ANY NEW MATERIAL WHICH WILL AID IN THE TECHNICAL EVALUATION TOGETHER WITH COPIES OF DATA PREVIOUSLY SUBMITTED. MERE REFERENCE TO DATA PREVIOUSLY SUBMITTED WILL NOT SUFFICE.

AWARD MAY BE MADE WITHOUT DISCUSSION OF PROPOSALS RECEIVED, HENCE, PROPOSALS SHOULD BE SUBMITTED INITIALLY ON THE MOST FAVORABLE TERMS FROM A PRICE AND TECHNICAL STANDPOINT WHICH THE OFFEROR CAN SUBMIT TO THE GOVERNMENT.

THE SPECIFICATIONS FOR RFP-120CC INCLUDED PROVISIONS REQUIRING THAT THE SUCCESSFUL CONTRACTOR (1) PROVIDE SERVICE UNDER "HIGH RESOLUTION" CONDITIONS, (2) MAINTAIN AN ADEQUATE SUPPLY OF SPARE PARTS, AND (3) HAVE A REASONABLE NUMBER OF QUALIFIED PERSONNEL TO RESPOND TO EMERGENCY SITUATIONS WITHIN 24 HOURS. THE "HIGH RESOLUTION" PROVISION DEFINED THAT TERM AS BRINGING THE ELECTRON MICROSCOPE TO THE GUARANTEED RESOLUTION OF SIEMENS ELECTRON MICROSCOPES, POINT TO POINT, AND REQUIRED THAT OFFERS BE ACCOMPANIED BY A CERTIFICATION AND/OR RECOMMENDATION AS TO THE OFFEROR'S ABILITY TO SERVICE AND TEST INSTRUMENTS OF THAT CALIBER WITHOUT RESORTING TO TRIAL AND ERROR METHODS.

IN A LETTER DATED DECEMBER 15, 1971, SIEMS PROTESTED THE PROPOSED AGGREGATE AWARD FOR THE SERVICING AND MAINTENANCE OF ALL THREE MODELS. WAS THE CONTENTION OF SIEMS THAT IT WAS NOT NECESSARY TO QUOTE ON ALL THREE MODELS ON THE ORIGINAL SOLICITATION AND THAT NIH, KNOWING THAT SIEMS WAS NOT FAMILIAR WITH MODEL 101, HAD ASSERTED, IN RFP-120CC, THE REQUIREMENT THAT OFFERORS QUOTE ON ALL THREE MODELS. IT WAS CONTENDED BY SIEMS THAT THIS WAS DONE IN ORDER TO ELIMINATE THAT FIRM FROM COMPETITION. SIEMS MENTIONED SEVERAL INSTITUTIONS WHERE CONTRACTS WERE AWARDED COVERING MODELS 1 AND 1A, WHILE SEPARATE CONTRACTS WERE AWARDED COVERING MODEL 101.

THE PROPOSALS WERE OPENED AS SCHEDULED ON DECEMBER 20, 1971. SIEMS SUBMITTED A QUOTE OF $1,000 PER INSTRUMENT FOR MODELS 1 AND 1A, WHILE SIEMENS SUBMITTED A QUOTE OF $1,600 PER INSTRUMENT FOR MODELS 1 AND 1A, AND $2,000 PER INSTRUMENT FOR MODEL 101. BOTH OFFERS WERE SUBMITTED TO AN EVALUATION COMMITTEE MADE UP OF PROMINENT NIH SCIENTIFIC PERSONNEL WHO EVALUATED THE OFFERS IN ACCORDANCE WITH THE CRITERIA SET FORTH IN THE CONTRACTING OFFICER'S COVERING LETTER. THE SIEMS OFFER RECEIVED SUBSTANTIALLY FEWER POINTS FROM EACH OF THE COMMITTEE MEMBERS THAN DID SIEMENS' OFFER. ACCORDING TO THE CONTRACTING OFFICER, IT WAS DETERMINED THAT IN VIEW OF THE DECISION REACHED BY THE EVALUATION COMMITTEE AND THE FACT SIEMS HAD NOT QUOTED ON ALL THREE MODELS, THAT SIEMS' OFFER WAS NOT ONLY TECHNICALLY UNACCEPTABLE, BUT NONRESPONSIVE TO THE SOLICITATION.

THE LATEST 3-MONTH EXTENSION OF SIEMENS' CONTRACT (NIH-71-7) EXPIRED ON DECEMBER 31, 1971, AND ON JANUARY 3, 1972, NIH MADE A DETERMINATION TO AWARD THE CONTRACT TO SIEMENS, PRIOR TO RESOLUTION OF THE PROTEST. THE BASIS FOR THIS DETERMINATION WAS STATED TO BE AN URGENT NEED FOR SERVICES AS STATED IN THE EVALUATION COMMITTEE'S RECOMMENDATION FOR IMMEDIATE AWARD TO SIEMENS AS THE SOLE RESPONSIVE OFFEROR. NO EXPLANATION WAS GIVEN AS TO WHY NIH DID NOT SEEK ANOTHER EXTENSION OF SIEMENS' PRIOR CONTRACT, ALTHOUGH IT APPEARS THAT SIEMENS HAD ACCEPTED THREE 3-MONTH EXTENSIONS OF ITS CONTRACT UNDER WHICH (ACCORDING TO INFORMAL ADVICE RECEIVED FROM YOUR AGENCY) THE SERVICES HAD BEEN SATISFACTORILY PERFORMED AT PRICES OF $1,312.65, FOR MODELS 1 AND 1A, AND $1,575 FOR MODEL 101.

IT IS SIEMS' CONTENTION THAT WITH THE EXCEPTION OF THE REQUIREMENT THAT THE AWARD BE MADE IN THE AGGREGATE, THERE IS NO SUBSTANTIVE DIFFERENCE BETWEEN THE TWO SOLICITATIONS, AND EVEN THE REQUIREMENT IN RFP-120CC THAT THE SUCCESSFUL CONTRACTOR PROVIDE SERVICES UNDER "HIGH RESOLUTION" CONDITIONS ADDS NOTHING TO THE SOLICITATION, BUT MERELY DESCRIBES THE SKILL LEVEL REQUIRED IN SERVICING THE MICROSCOPES. WE NOTE, IN THIS CONNECTION, THAT THE SPECIFICATIONS OF BOTH SOLICITATIONS REQUIRED ALL NECESSARY ADJUSTMENTS: THE MAINTENANCE TO BE COMPARABLE WITH THE BEST PRACTICES OF THE INDUSTRY, AND THE WORKMANSHIP PERFORMED BY THE CONTRACTOR TO BE OF A QUALITY ACCEPTABLE TO THE GOVERNMENT. IN REGARD TO THE "SPARE PARTS" REQUIREMENT, SIEMS STATES THAT THE ABILITY TO OBTAIN SPARE PARTS IS AN IMPLICIT REQUIREMENT WHERE THE SUCCESSFUL BIDDER WILL BE REQUIRED TO INSPECT, MAINTAIN AND REPAIR EQUIPMENT, AND RFP-335CC REQUIRED THE CONTRACTOR TO FURNISH MANUFACTURER'S APPROVED REPAIR PARTS. CONCERNING THE "TECHNICAL PERSONNEL" ADDITION, THE PROTESTANT STATES THAT THIS ADDS NOTHING TO THE PROCUREMENT, BUT MERELY ADDS CRITERIA FOR DETERMINING WHETHER IT WAS QUALIFIED IN THIS PARTICULAR AREA, A DETERMINATION WHICH SBA ALREADY MADE, UNDER RFP 335CC, IN SIEMS' FAVOR. THE PROTESTANT FURTHER STATES THAT NONE OF THE REMAINING PROVISIONS WHICH WERE ADDED TO RFP-120CC HAVE AN EFFECT ON THE PRESENT PROCUREMENT.

IT IS NOT PROTESTANT'S VIEW THAT SINCE THE ONLY SUBSTANTIVE DIFFERENCE BETWEEN THE TWO SOLICITATIONS IS THE REQUIREMENT THAT AWARD BE MADE IN THE AGGREGATE, THE ONLY POINT AT ISSUE IS WHETHER IT IS NECESSARY AND PROPER THAT THE AWARD BE MADE IN THE AGGREGATE. PROTESTANT DOES NOT FEEL THAT AWARD IN THE AGGRAGATE IS EITHER NECESSARY OR JUSTIFIED UNDER THE CIRCUMSTANCES OF THE PRESENT CASE. ADDITIONALLY, SIEMS ALLEGES THAT IT WAS THE INTENT OF NIH UNDER BOTH SOLICITATIONS TO MAKE AN UNAUTHORIZED SOLE SOURCE SOLICITATION AWARD TO SIEMENS.

WE AGREE WITH SIEMS THAT THE INITIAL QUESTION WITH WHICH WE MUST DEAL IS WHETHER AWARD IN THE AGGREGATE WAS NECESSARY OR PROPER. IN THIS REGARD, BOTH THE CONTRACTING OFFICER AND THE DIRECTOR OF PROCUREMENT AND MATERIEL MANAGEMENT STATED THAT AWARD IN THE AGGREGATE WAS NECESSARY "TO PROVIDE AN ECONOMIC INDUCEMENT FOR THE CONTRACTOR TO PROVIDE EMERGENCY SERVICE WITHIN 24 HOURS FOR ALL TYPES OF EQUIPMENT." HOWEVER, THERE IS NOTHING IN THE RECORD TO JUSTIFY A CONCLUSION THAT EITHER SIEMENS OR SIEMS COULD NOT REASONABLY HAVE BEEN EXPECTED TO OFFER 24-HOUR EMERGENCY SERVICE IN THE EVENT THE SOLICITATION HAD PROVIDED FOR AWARDING CONTRACTS FOR SERVICING LESS THAN ALL OF THE MICROSCOPES. MOREOVER, THE RECORD FAILS TO ESTABLISH THAT THE BIDDERS COULD REASONABLY HAVE BEEN EXPECTED TO OFFER, OR THAT THEY DID OFFER, THESE SERVICES AT A LESSER PRICE WHEN AWARD IN THE AGGREGATE WAS REQUIRED. CONVERSELY, SIEMENS' OFFER UNDER RFP-120CC, REQUIRING AWARD IN THE AGGREGATE, WAS IDENTICAL TO ITS OFFER UNDER RFP- 335CC, WHICH DID NOT REQUIRE THAT AWARD BE IN THE AGGREGATE. MOREOVER, THE RECORD INDICATES THAT OTHER GOVERNMENT INSTALLATIONS USING THE SAME THREE TYPES OF MICROSCOPES HAVE AWARDED SEPARATE CONTRACTS TO SEIMS AND SIEMENS, ONE FOR SERVICING MODELS 1 AND 1A, AND THE OTHER FOR SERVICING MODEL 101. THERE IS NO INDICATION THAT EMERGENCY SERVICE WAS NOT PROMPTLY PERFORMED UNDER THESE CONTRACTS OR THAT CONTRACT PRICES WERE ADVERSELY AFFECTED THEREBY.

IN ADDITION, FPR 1-1.301-1 REQUIRES THAT PROCUREMENTS BE MADE ON A COMPETITIVE BASIS TO THE MAXIMUM PRACTICABLE EXTENT. HERE, THE RECORD DOES NOT ESTABLISH THAT SEPARATE AWARDS WERE NOT PRACTICABLE AND, CONTRARY TO THE ESTABLISHED POLICY OF OBTAINING COMPETITION IN PROCUREMENTS, USE OF THE AGGREGATE AWARD PROVISION PRECLUDES RECEIPT OF A RESPONSIVE OFFER FROM THE ONLY APPARENT SOURCE OF COMPETITION FOR SIEMENS ON MODELS 1 AND 1A. WITHOUT AFFORDING SIEMS THE OPPORTUNITY TO COMPETE FOR THE SERVICING OF MODELS 1 AND 1A, IT IS APPARENT THAT THE ONLY POSSIBILITY OF OBTAINING PRICE COMPETITION FOR THOSE MODELS, AS CONTEMPLATED BY FPR 1-3.807- 1(B)(1), WAS ELIMINATED. ALSO, SEE SUBSECTION (II)(A) OF THAT REGULATION WHICH MAKES AN EXCEPTION TO A PRESUMPTION OF ADEQUATE PRICE COMPETITION WHEN THE SOLICITATION IS MADE UNDER CONDITIONS THAT UNREASONABLY DENY TO ONE OR MORE KNOWN AND QUALIFIED OFFERORS AN OPPORTUNITY TO COMPETE. THE DESIRABILITY OF CONSOLIDATING REQUIREMENTS TO THE MAXIMUM EXTENT POSSIBLE IS ALSO GIVEN AS A JUSTIFICATION FOR AN AGGREGATE AWARD. WHILE CONSOLIDATION OF REQUIREMENTS IS CONSIDERED TO BE A SOUND PROCUREMENT PRACTICE IN THOSE INSTANCES WHERE THE GOVERNMENT CAN EXPECT TO REALIZE A SUBSTANTIAL SAVINGS AS A RESULT OF SUCH CONSOLIDATION, THE RECORD DOES NOT INDICATE THAT NIH HAD ANY SUCH EXPECTATION AT THE TIME IT WAS DECIDED TO ISSUE A RESOLICITATION REQUIRING AWARD IN THE AGGREGATE. THIS IS EVIDENCED BY THE FACT THAT BY MAKING TWO SEPARATE AWARDS UNDER RFP-335CC, I.E., AN AWARD TO SIEMS FOR MODELS 1 AND 1A, AND AN AWARD TO SIEMENS FOR MODEL 101, THE GOVERNMENT COULD HAVE OBTAINED THE REQUIRED SERVICES FOR APPROXIMATELY $4,200 LESS THAN COULD BE REALISTICALLY EXPECTED FROM AN AGGREGATE AWARD TO SIEMENS, WHO OFFERED, UNDER RFP-335CC, TO SERVICE THE FOURTEEN 1 AND 1A MODELS FOR $1,600 PER MICROSCOPE WHILE SIEMS OFFERED TO SERVICE THE SAME MICROSCOPES FOR $1,300 PER MICROSCOPE. WE ARE UNABLE TO CONCLUDE THAT NIH COULD, IN GOOD FAITH, HAVE EXPECTED SIEMENS TO LOWER ITS OFFER ON A RESOLICITATION, SINCE UNDOUBTEDLY SIEMENS REALIZED THAT IT WOULD BE THE ONLY FIRM MAKING AN AGGREGATE OFFER UNDER THE RESOLICITATION.

IN VIEW OF THE ABOVE, WE CAN ONLY CONCLUDE THAT THE AGGREGATE AWARD REQUIREMENT IN THE PRESENT CASE WAS BOTH UNNECESSARY AND IMPROPER. SINCE FAILURE OF AN OFFER TO COMPLY WITH AN IMPROPER REQUIREMENT IN THE SOLICITATION WILL NOT JUSTIFY ITS REJECTION ON THE GROUNDS OF NONRESPONSIVENESS, WE MUST ALSO CONCLUDE THAT SIEMS' OFFER UNDER RFP 120CC WAS IMPROPERLY REJECTED, SINCE THE ONLY REASON GIVEN FOR THE DETERMINATION THAT SIEMS' OFFER WAS NONRESPONSIVE WAS THAT IT FAILED TO OFFER TO SERVICE ALL THREE TYPES OF MICROSCOPES.

WITH RESPECT TO THE EVALUATION COMMITTEE'S CONCLUSION THAT SIEMS' OFFER WAS "TECHNICALLY UNACCEPTABLE," THE RECORD DOES NOT INDICATE THAT EITHER SIEMS OR SIEMENS ACTUALLY SUBMITTED A TECHNICAL PROPOSAL, AS SUCH PROPOSALS ARE GENERALLY CONSTITUTED, ALTHOUGH BOTH FIRMS DID LIST (1) QUALIFIED PERSONNEL WHO WOULD OR COULD WORK ON THE CONTRACT; (2) RESPONSE TIME TO EMERGENCY CALLS; AND (3) THEIR SPARE PARTS CAPACITY. CONVERSELY, IT APPEARS THAT BOTH CONCERNS MERELY OFFERED TO SERVICE AND MAINTAIN THE MICROSCOPES IN THE MANNER REQUIRED BY THE SOLICITATION FOR A FIXED AMOUNT OF MONEY PER MICROSCOPE. THE RECORD DOES NOT INDICATE THAT WHEN NIH SENT OUT THE RFPS IT EITHER SOLICITED OR EXPECTED TO RECEIVE DIFFERING TECHNICAL APPROACHES ON HOW TO SERVICE AND MAINTAIN THE MICROSCOPES, BUT ONLY THAT THE SERVICING AND MAINTENANCE OFFERED SHOULD CONFORM TO THE BEST PRACTICES OF THE INDUSTRY, AND BE OF A QUALITY ACCEPTABLE TO THE GOVERNMENT, WHICH COULD INCLUDE BRINGING THE MICROSCOPES TO THE MANUFACTURER'S GUARANTEED RESOLUTION.

IN REGARD TO THE TECHNICAL EVALUATION CRITERIA LISTED IN THE COVERING LETTER ACCOMPANYING RFP-120CC, WE BELIEVE THERE IS MERIT IN THE PROTESTANT'S POSITION THAT THE FACTORS MAKING UP THE CRITERIA ARE FACTORS WHICH ARE PROPERLY FOR CONSIDERATION IN THE EVALUATION OF SIEMS' CAPABILITY OR CAPACITY TO PERFORM THE SERVICES OFFERED. MATTERS OF CAPACITY REFLECTING ON AN OFFEROR'S RESPONSIBILITY DO NOT CHANGE IN CHARACTER MERELY BY HAVING BEEN EXPRESSED IN TERMS OF RESPONSIVENESS IN THE SOLICITATION. 39 COMP. GEN. 173, 178(1959); 45 COMP. GEN. 4, 7(1965).

CONCERNING THE CHANGES IN THE SECOND SOLICITATION (RFP-120CC) WHICH CONSTITUTE THE PRINCIPAL BASES ADVANCED AS TO THE NECESSITY FOR CANCELLATION OF RFP-335CC, THE FIRST CHANGE THAT WE NOTE IS A REQUIREMENT THAT THE CONTRACTOR PROVIDE SERVICE UNDER "HIGH RESOLUTION" CONDITIONS. WHILE THIS PROVISION REQUIRES THE CONTRACTOR TO BRING THE MICROSCOPES TO THE RESOLUTION GUARANTEED FOR THE MICROSCOPES, WE ARE NOT PERSUADED THAT THIS ACTION COULD NOT ALSO BE REASONABLY REQUIRED OF THE CONTRACTOR UNDER THE SPECIFICATIONS OF BOTH SOLICITATIONS WHICH PROVIDE THAT THE CONTRACTOR SHALL MAKE ALL NECESSARY ADJUSTMENTS; FURNISH MAINTENANCE COMPARABLE WITH THE BEST PRACTICES OF THE INDUSTRY; PERFORM WORKMANSHIP OF A QUALITY ACCEPTABLE TO THE GOVERNMENT; AND PROMPTLY RECTIFY ANY INSTANCES OF NONACCEPTABLE SERVICE AT NO EXTRA COST TO THE GOVERNMENT. IN ANY EVENT, WHETHER SIEMS IS CAPABLE OF MEETING THIS REQUIREMENT IS CLEARLY A QUESTION OF CAPACITY TO BE FINALLY DECIDED BY SBA.

REGARDING THE CHANGE WHICH REQUIRES THE CONTRACTOR TO HAVE AN ADEQUATE SUPPLY OF SPARE PARTS, WE NOTE THAT ONE OF THE REASONS GIVEN IN SUPPORT OF THE PROCURING ACTIVITY'S DETERMINATION, UNDER RFP-335CC, THAT SIEMS' SERVICE WAS INADEQUATE TO MEET THEIR REQUIREMENTS WAS THAT SIEMS DID NOT HAVE ACCESS TO SPARE PARTS. SBA WAS NOT CONVINCED THAT SUCH WAS THE CASE, AS INDICATED BY THE ISSUANCE OF A COC. SIMILARLY, IN CONNECTION WITH THE CHANGE REQUIRING A REASONABLE NUMBER OF QUALIFIED TECHNICIANS AND ENGINEERS, IT WOULD APPEAR THAT SBA WAS OF THE OPINION THAT SIEMS HAD A SUFFICIENT NUMBER OF QUALIFIED PERSONNEL TO PERFORM THE SERVICES OR IT WOULD NOT HAVE ISSUED A COC TO SIEMS.

THUS, THE DETERMINATION BY THE PROPOSAL EVALUATION COMMITTEE THAT SIEMS' OFFER WAS TECHNICALLY UNACCEPTABLE AMOUNTED, IN ESSENCE, TO A DETERMINATION THAT SIEMS WAS NOT RESPONSIBLE FOR REASONS OF CAPACITY WHICH, WHEN ADOPTED BY THE CONTRACTING OFFICER, WAS A MATTER SUBJECT TO REFERRAL TO SBA UNDER FPR 1-1.708.3.

WE BELIEVE THE RECORD BEFORE US REQUIRES A CONCLUSION THAT THE MOTIVATING FACTOR FOR NOT MAKING AN AWARD TO SIEMS UNDER RFP-335CC, AND FOR THE CANCELLATION OF THAT RFP, WAS THE PROCURING ACTIVITY'S BELIEF THAT THE SERVICES FURNISHED BY SIEMENS WOULD BE OF A HIGHER QUALITY THAN THE SERVICES FURNISHED BY SIEMS. WHILE THERE IS EVIDENCE THAT THIS COULD BE TRUE, THE RECORD DOES NOT ESTABLISH THAT SIEMS COULD NOT HAVE SATSIFACTORILY MET THE ESSENTIAL MINIMUM NEEDS OF NIH AS TO MODELS 1 AND 1A, ESPECIALLY SINCE THAT FIRM WAS ISSUED A COC WHICH WAS NOT WITHDRAWN EVEN AFTER RECONSIDERATION BY SBA AT THE REQUEST OF NIH. IT IS WELL ESTABLISHED THAT THERE IS NO AUTHORITY TO BASE THE AWARD OF A NONPERSONAL SERVICE, FIXED PRICE, CONTRACT ON A DETERMINATION THAT A CERTAIN BIDDER IS BELIEVED TO BE CAPABLE OF PROVIDING THE HIGHEST QUALITY OF SERVICES. SEE 43 COMP. GEN. 353; 41 COMP. GEN. 484.

IN VIEW OF OUR CONCLUSION THAT REJECTION OF SIEMS' OFFER AS NONRESPONSIVE WAS IMPROPER, AND OUR CONCLUSION THAT THE TECHNICAL DEFECTS FOUND BY THE EVALUATION COMMITTEE REFLECTED UPON SIEMS' CAPACITY, IT IS OUR OPINION THAT THE QUESTION OF SIEMS' CAPACITY TO SERVICE THE MODEL 1 AND 1A MICROSCOPES MUST NOW BE SUBMITTED TO SBA FOR A DETERMINATION AS TO WHETHER SIEMS IS ENTITLED TO A COC COVERING THAT PORTION OF THE SERVICES ON WHICH IT BID. IF SBA ISSUES A COC AS TO THOSE SERVICES, THAT PORTION OF SIEMENS' CONTRACT SHOULD BE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT AND AN AWARD FOR SUCH TERMINATED PORTION SHOULD BE MADE TO SIEMS.

WE WOULD APPRECIATE ADVICE OF WHATEVER ACTION IS TAKEN ON OUR RECOMMENDATION.

THE FILES TRANSMITTED WITH THE LETTERS DATED DECEMBER 16, 1971, AND MARCH 9, 1972, FROM THE DIRECTOR OF PROCUREMENT AND MATERIEL MANAGEMENT ARE RETURNED.