B-179822, MAR 25, 1974

B-179822: Mar 25, 1974

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WAS MADE WITHOUT PREACCEPTANCE TESTING REQUIREMENT AS REQUIRED BY PURCHASE DESCRIPTION. THAT SUCCESSFUL OFFEROR WAS PERMITTED TO AMEND GSA SCHEDULE AND REDUCE PRICE OF COMPONENT AFTER PRICE COMPETITION WAS CONCLUDED. IS NOT SUPPORTED BY THE RECORD BECAUSE PROTESTER SUBMITTED NO EXTRINSIC EVIDENCE TO SUPPORT ALLEGATIONS. EACH OF WHICH WAS DENIED OR REBUTTED IN AGENCY REPORT AND CONTRACTING OFFICER'S STATEMENT. 2. IN WHICH UNSUCCESSFUL OFFEROR ALLEGED THAT REQUIREMENT FOR BENCHMARKING WAS WAIVED AND THAT PURCHASE DESCRIPTION REQUIRED DISCLOSURE OF PROPRIETARY DATA REGARDING SYSTEM OF PROTESTER ALREADY AT PROCURING AGENCY. THIS OFFICE WILL NOT INTERFERE WITH AGENCY'S PREROGATIVES ON MATTERS RELATING TO SPECIFICATIONS AND COMPLIANCE THEREWITH AND (2) PROTESTER MADE NO ATTEMPT TO OBJECT TO ALLEGED DISCLOSURE OF PROPRIETARY DATA UNTIL AFTER AWARD OF ORDERS.

B-179822, MAR 25, 1974

1. PROTEST BY UNSUCCESSFUL OFFEROR ALLEGING THAT AWARD OF THREE ORDERS FOR COMPUTER-BASED DIGITIZING SYSTEM PROCURED IN PART FROM GSA SCHEDULE AND IN PART THROUGH COMPETITIVE NEGOTIATION, WAS MADE WITHOUT PREACCEPTANCE TESTING REQUIREMENT AS REQUIRED BY PURCHASE DESCRIPTION, THAT SUCCESSFUL OFFEROR WAS PERMITTED TO AMEND GSA SCHEDULE AND REDUCE PRICE OF COMPONENT AFTER PRICE COMPETITION WAS CONCLUDED, AND THAT CONTRACTING OFFICER SUPPLIED PROTESTER WITH MISLEADING INFORMATION, IS NOT SUPPORTED BY THE RECORD BECAUSE PROTESTER SUBMITTED NO EXTRINSIC EVIDENCE TO SUPPORT ALLEGATIONS, EACH OF WHICH WAS DENIED OR REBUTTED IN AGENCY REPORT AND CONTRACTING OFFICER'S STATEMENT. 2. NO EVIDENCE PRESENTED TO SUPPORT PROTEST OF AWARD OF THREE ORDERS OF COMPUTER-BASED DIGITIZING SYSTEM FROM GSA SCHEDULE, IN WHICH UNSUCCESSFUL OFFEROR ALLEGED THAT REQUIREMENT FOR BENCHMARKING WAS WAIVED AND THAT PURCHASE DESCRIPTION REQUIRED DISCLOSURE OF PROPRIETARY DATA REGARDING SYSTEM OF PROTESTER ALREADY AT PROCURING AGENCY, BECAUSE (1) ABSENT EVIDENCE OF ARBITRARINESS, THIS OFFICE WILL NOT INTERFERE WITH AGENCY'S PREROGATIVES ON MATTERS RELATING TO SPECIFICATIONS AND COMPLIANCE THEREWITH AND (2) PROTESTER MADE NO ATTEMPT TO OBJECT TO ALLEGED DISCLOSURE OF PROPRIETARY DATA UNTIL AFTER AWARD OF ORDERS, APPROXIMATELY 5 MONTHS AFTER PROTESTER BECAME AWARE OF REQUIREMENTS OF PURCHASE DESCRIPTION.

TO CALMA COMPANY:

ON MAY 4, 1973, REQUEST FOR QUOTATIONS (RFQ) DMA800-73-Q-0071 WAS ANNOUNCED IN COMMERCE BUSINESS DAILY. THE RFQ SOLICITED QUOTATIONS FOR A COMPUTER-BASED DIGITIZING SYSTEM TO BE INSTALLED AT THE DEFENSE MAPPING AGENCY TOPOGRAPHIC CENTER (DMATC). WHEN THE REQUIREMENT FOR AN ADDITIONAL DIGITIZING SYSTEM AT THE DEFENSE MAPPING AGENCY HYDROGRAPHIC CENTER (DMAHC) SUBSEQUENTLY BECAME KNOWN, THE ORIGINAL RFQ WAS CANCELED AND INVITATION FOR BIDS (IFB) DMA800-74-B-0007 WAS DRAFTED CONTAINING THE PURCHASE DESCRIPTION FOR BOTH THE DMATC AND DMAHC PROCUREMENTS. HOWEVER, THIS IFB WAS NEVER PUBLISHED OR CIRCULATED AMONG A LIST OF POTENTIAL BIDDERS.

RATHER, THE CONTRACTING OFFICER CONFERRED PERSONALLY AND BY TELEPHONE WITH ALL POTENTIAL CONTRACTORS AND FURNISHED EACH WITH COPIES OF THE IFB. IT WAS DETERMINED THAT CALMA COMPANY (CALMA), COMPUTER EQUIPMENT CORPORATION (CEC), AND H. DELL FOSTER COMPANY (FOSTER) WERE THE THREE BEST QUALIFIED COMPUTER FIRMS. MOREOVER, IT WAS ESTABLISHED THAT EACH OF THESE COMPANIES HAD THE REQUIRED EQUIPMENT LISTED ON GSA SCHEDULE, EXCEPT NONE HAD LISTED THE BENDIX BACK LIGHTED GRID TABLE AND CEC HAD NOT LISTED THE CAELUS MASS STORAGE DISK. AS A RESULT, THE DETERMINATION WAS MADE TO PURCHASE THE EQUIPMENT FROM GSA SCHEDULE AND TO PROCURE THOSE ITEMS NOT ON GSA SCHEDULE THROUGH COMPETITIVE NEGOTIATION. THE CONTRACTING OFFICER THEN INVITED PRICE COMPETITION AND OFFERS WERE RECEIVED FROM THE THREE COMPANIES MENTIONED ABOVE. ON AUGUST 30, 1973, PRICE COMPETITION WAS CONCLUDED. CEC WAS THE LOW OFFEROR AND WAS AWARDED THE THREE ORDERS WHICH ARE THE SUBJECT OF THIS PROTEST BY CALMA.

CALMA BASES ITS PROTEST ON SEVERAL ALLEGATIONS FOR WHICH WE FIND NO SUPPORT IN THE RECORD. CALMA CLAIMS THAT PARAGRAPH 7.1 OF THE PURCHASE DESCRIPTION FOR THE DMATC PROCUREMENT WAS WAIVED WITHOUT NOTICE TO THE OTHER OFFERORS AND THAT IT WAS ADVISED BY THE CONTRACTING OFFICER THAT BENCHMARKING WOULD BE REQUIRED PRIOR TO AWARD. IN ADDITION, IT IS CLAIMED THAT CEC WAS PERMITTED TO ADD THE CAELUS MASS STORAGE DISK TO ITS GSA SCHEDULE AND TO REDUCE THE PRICE OF ITS CORE MEMORY MODULES AFTER PRICE COMPETITION HAD BEEN CONCLUDED. CALMA ALSO CONTENDS THAT IT WAS SUPPLIED WITH MISLEADING INFORMATION REGARDING ITS COMPETITIVE STATUS DURING THE COURSE OF COMPETITIVE NEGOTIATION. ON THE BASIS OF THESE ALLEGATIONS, CALMA REQUESTS THAT THE THREE ORDERS AWARDED CEC BE HELD IN ABEYANCE UNTIL BENCHMARKS ARE RUN ON THE EQUIPMENT OF ALL THREE OFFERORS, OR ALTERNATIVELY THAT THE PROCUREMENT BE REINITIATED AS AN IFB WITH PERFORMANCE SPECIFICATIONS.

EACH OF THESE ALLEGATIONS, HOWEVER, HAS BEEN EITHER DENIED OR REBUTTED IN THE DEFENSE MAPPING AGENCY'S (DMA) REPORT AND THE ACCOMPANYING STATEMENT OF THE CONTRACTING OFFICER. PARAGRAPH 7.1 OF THE PURCHASE DESCRIPTION PROVIDES THAT "THE SUCCESSFUL CONTRACTOR SHALL DEMONSTRATE THAT HIS DIGITIZING SYSTEM MEETS THE REQUIREMENTS OF THIS PURCHASE DESCRIPTION BEFORE AWARD OF THE CONTRACT." DMA REPORTS THAT THIS REQUIREMENT WAS NOT WAIVED BUT WAS COMPLIED WITH IN ALL RESPECTS. IN HIS STATEMENT, THE CONTRACTING OFFICER RECOUNTS THAT:

"ON SEPTEMBER 6, 1973, I ACCOMPANIED MR. DAVID HOLLAND AND MR. KENNETH YUEN, REPRESENTING DMATC; AND MR. RON BOLTON AND MR. LAWRENCE WAGNER, REPRESENTING DMAHC, TO CEC IN ROCKVILLE, MARYLAND, FOR THE PURPOSE OF WITNESSING A DEMONSTRATION BY CEC THAT THEIR DIGITIZING SYSTEMS MET THE REQUIREMENTS OF THE RESPECTIVE PURCHASE DESCRIPTIONS. CEC CONDUCTED THIS DEMONSTRATION AND OUR FOUR TECHNICAL PEOPLE STATED TO ME THAT THE DEMONSTRATION HAD CONVINCED THEM THAT THE SYSTEMS MET THE REQUIREMENTS OF THE PURCHASE DESCRIPTION."

SIMILARLY, CALMA'S CONTENTION THAT IT WAS INFORMED BY THE CONTRACTING OFFICER THAT BENCHMARKS WOULD BE REQUIRED HAS BEEN DENIED. IT IS REPORTED BY DMA THAT BENCHMARKING WAS NEVER MENTIONED PRIOR TO THE CLOSE OF PRICE COMPETITION. WHILE THE CONTRACTING OFFICER ADMITS THAT BENCHMARKING WAS SUBSEQUENTLY DISCUSSED, HE EXPLAINS THAT HE ONLY STATED THAT IT WOULD BE RECOMMENDED TO THE SOURCE SELECTION BOARD. IT IS ONLY REASONABLE TO INFER FROM THIS STATEMENT THAT THE ULTIMATE DECISION ON THE TYPE OF TESTING TO BE REQUIRED, IN ADDITION TO THE TESTS SPECIFICALLY PROVIDED FOR IN THE PURCHASE DESCRIPTIONS, RESTED WITH THE SOURCE SELECTION BOARD. ACCORDING TO DMA AND THE CONTRACTING OFFICER, IT WAS THE DECISION OF THE SOURCE SELECTION BOARD, THE GROUP WHICH ACTUALLY TESTED CEC'S EQUIPMENT, NOT TO REQUIRE BENCHMARKING. THE CONTRACTING OFFICER DENIES THAT HE EVER REPRESENTED TO CALMA THAT BENCHMARKING WOULD BE MANDATORY.

THE AGENCY REPORT ALSO REFUTES THE IMPLICATION OF IMPROPRIETY CONTAINED IN CALMA'S ASSERTION THAT CEC WAS PERMITTED TO AMEND ITS SCHEDULE TO INCLUDE THE CAELUS DISK AND TO REDUCE THE PRICE OF ITS CORE MEMORY MODULES AFTER COMPETITIVE NEGOTIATION HAD BEEN CONCLUDED. DMA EXPLAINS THAT THE CEC PRICE REDUCTION WAS WHOLLY VOLUNTARY AND DID NOT TAKE PLACE UNTIL AFTER CEC HAD ALREADY WON THE PRICE COMPETITION. LIKEWISE, THE AGENCY REPORT STATES THAT THE PRICE OF THE CAELUS DISK WHICH WAS ADDED TO THE GSA SCHEDULE WAS THE SAME PRICE WHICH CEC QUOTED TO THE CONTRACTING OFFICER PRIOR TO THE CONCLUSION OF PRICE COMPETITION.

FINALLY, DMA DENIES THAT IT SUPPLIED CALMA WITH MISLEADING INFORMATION AND EXPLAINS THE EVENTS WHICH APPARENTLY CAUSED CALMA'S MISUNDERSTANDING. CALMA'S FIRST OFFER, SUBMITTED BY ITS SALES REPRESENTATIVE WAS ORIGINALLY THE LOWEST OFFER RECEIVED. IT WAS SOON DISCOVERED, HOWEVER, THAT THE OFFER WAS FOR EQUIPMENT WHICH COULD NOT MEET THE REQUIREMENTS OF THE PURCHASE DESCRIPTIONS. A SECOND OFFER, HIGHER THAN CALMA'S ORIGINAL QUOTATION, WAS THEN SUBMITTED BY THE VICE PRESIDENT OF CALMA. AT THIS POINT, CALMA WAS INFORMED THAT IT WAS NO LONGER LOW OFFEROR ON ALL THREE ORDERS, BUT RATHER WAS LOW ON ONE SYSTEM AND HIGH ON THE OTHER TWO. SUBSEQUENTLY, THE CONTRACTING OFFICER DISCOVERED A TOTALING ERROR IN CEC'S OFFER. AFTER THIS CORRECTION WAS MADE, CEC BECAME THE LOW OFFEROR FOR ALL THREE SYSTEMS.

WITH RESPECT TO THE ALLEGATIONS OF CALMA DISCUSSED ABOVE, THE RECORD DISCLOSES SEVERAL CLEAR DISPUTES OF FACT. HOWEVER, EACH OF CALMA'S CONTENTIONS HAVE EITHER BEEN DENIED OR SATISFACTORILY EXPLAINED BY DMA. FURTHERMORE, CALMA HAS SUBMITTED NO EXTRINSIC EVIDENCE TO SUPPORT THE CHARGES CONTAINED IN ITS COMMUNICATION WITH THIS OFFICE. THUS, BASED ON THE RECORD BEFORE US, WE HAVE CONCLUDED THAT THE FACTS ARE ACCURATELY SET FORTH IN THE AGENCY REPORT AND THAT CALMA HAS FAILED TO ESTABLISH A FACTUAL BASIS FOR ITS CLAIMS.

WE TURN NOW TO CALMA'S FINAL CONTENTION REGARDING THIS PROCUREMENT. PARAGRAPH 3.8.3(BB) OF THE DMATC PURCHASE DESCRIPTION PROVIDES THAT "THE MAGNETIC DISK FROM THIS DIGITIZING SYSTEM SHALL BE CAPABLE OF BEING READ AND USED BY THE CALMA 985 DIGITIZING SYSTEM NOW AT DMATC." CALMA CONTENDS THAT THIS PROVISION REQUIRES THE DISCLOSURE OF PROPRIETARY INFORMATION REGARDING THE CALMA DIGITIZING SYSTEM AT DMATC AND VIOLATES A LEASING AGREEMENT ON THAT SYSTEM. THE AGENCY, HOWEVER, HAS CATEGORICALLY DENIED THAT THE DISCLOSURE OF PROPRIETARY INFORMATION IS NECESSITATED BY ANY PROVISION OF THE PURCHASE DESCRIPTION. DMA REPORTS THAT THE MAGNETIC DISK REQUIRED BY THIS PROCUREMENT FOR USE WITH THE CALMA SYSTEM NOW INSTALLED AT DMATC IS AVAILABLE COMMERCIALLY. PRESUMABLY, CEC CAN OBTAIN THIS DISK AS READILY AS CAN CALMA. THUS, DMA ASSERTS THAT FOR THE DISK OF THE NEW SYSTEM TO BE CAPABLE OF BEING READ AND USED BY THE CALMA SYSTEM, IT IS ONLY NECESSARY THAT THE DATA ON THE DISK BE IN THE FORMAT OF THE CALMA SOFTWARE. AND THE AGENCY ARGUES THAT THE FORMAT OF THE DATA IS NOT CALMA'S PROPERTY BECAUSE "FORMAT IS A MUCH TOO GENERALIZED CONCEPT TO PRESENT OWNERSHIP BY ANYONE."

IN FACTUAL DISPUTES OF THIS TYPE, WHICH ARE TECHNICALLY BEYOND THE COMPETENCE OF THIS OFFICE BECAUSE OF THE SCIENTIFIC AND ENGINEERING CONCEPTS INVOLVED, WE HAVE TRADITIONALLY AFFORDED A SIGNIFICANT DEGREE OF FINALITY TO THE ADMINISTRATIVE POSITION. SEE 46 COMP. GEN. 885, 889 (1967). HOWEVER, WITHOUT QUESTIONING THE ACTUAL CHARACTER OF THE CLAIMED PROPRIETARY INFORMATION, WE BELIEVE THAT THIS ASPECT OF THE PROTEST MAY PROPERLY BE RESOLVED ON GROUNDS OTHER THAN THOSE INVOLVING THE RESOLUTION OF DIFFICULT TECHNICAL QUESTIONS. WE NOTE THAT PARAGRAPH 3.8.3(BB) WAS FIRST PUBLISHED IN COMMERCE BUSINESS DAILY ON MAY 4, 1973. IN THE CHRONOLOGY SUBMITTED AS ENCLOSURE 3 WITH ITS LETTER OF OCTOBER 4, 1973, CALMA ADMITS HAVING RECEIVED THE BID PACKAGE FOR THE DMATC PROCUREMENT, INCLUDING THE PURCHASE DESCRIPTION CONTAINING PARAGRAPH 3.8.3(BB), ON MAY 18, 1973. THEREFORE, THE PROTESTER HAD AMPLE TIME BEFORE AWARD OF THE ORDERS TO STUDY THE PURCHASE DESCRIPTION AND TO DISCOVER THE ALLEGED REQUIREMENT THAT PROPRIETARY DATA BE DISCLOSED. THERE IS NO INDICATION, HOWEVER, OF CALMA'S PROTESTING THIS REQUIREMENT UNTIL AFTER IT HAD LEARNED THAT IT WOULD NOT BE AWARDED THE CONTRACT.

COURTS HAVE GENERALLY TAKEN THE POSITION THAT FOR A PARTY TO MAINTAIN HIS PROPRIETARY RIGHTS ON INFORMATION, HE MUST TAKE REASONABLE ACTION TO PREVENT OR SUPPRESS ITS UNAUTHORIZED USE. SEE, E.G., FERROLINE CORP. V. GENERAL ANILINE FILM CORP., 207 F.2D 912 (1953). HERE, CALMA MADE NO ATTEMPT AFTER THE ISSUANCE OF THE PURCHASE DESCRIPTION AND PRIOR TO THE AWARD OF THE CONTRACT TO PROTEST THE ALLEGEDLY IMPROPER DISCLOSURE. UNDER THESE CIRCUMSTANCES, WE MUST CONCLUDE THAT CALMA'S PROTEST ON THIS GROUND IS UNTIMELY. EXCEPT IN EXTRAORDINARY CIRCUMSTANCES, NOT HERE SHOWN, THIS OFFICE WILL NOT GRANT RELIEF WHERE THE DATA OWNER PARTICIPATES IN THE COMPETITION FOR THE PROCUREMENT AND DOES NOT RAISE ANY OBJECTION UNTIL IT APPEARS THAT THE CONTRACT WILL BE AWARDED TO ANOTHER. 46 COMP. GEN. 885 (1967).

BEFORE CONCLUDING, THERE ARE TWO ADDITIONAL MATTERS WARRANTING BRIEF COMMENT. IT IS CLEAR FROM CALMA'S COMMUNICATIONS WITH THIS OFFICE THAT IT DOES NOT BELIEVE THAT CEC'S EQUIPMENT CAN SATISFACTORILY MEET THE REQUIREMENTS OF THE PURCHASE DESCRIPTIONS. THE PROTESTER COUNTERS DMA'S SUGGESTION THAT THE FAILURE OF CEC'S EQUIPMENT TO PERFORM AS REQUIRED BY THE PURCHASE DESCRIPTIONS WILL BE TREATED AS ANY OTHER DEFAULT UNDER STANDARD GOVERNMENT PROCEDURES BY ARGUING THAT THIS WILL ONLY RESULT IN DELAY AND INCREASED COST TO THE GOVERNMENT. HOWEVER, CALMA HAS OVERLOOKED THE ESTABLISHED FACTS THAT TESTS WERE CONDUCTED OF CEC'S EQUIPMENT AND THAT THE SOURCE SELECTION BOARD CONCLUDED THAT DMA'S REQUIREMENTS WOULD BE FULLY SATISFIED.

SECONDLY, IT APPEARS TO BE CALMA'S OPINION THAT BENCHMARKING OR SOME OTHER FORM OF COMPARISON TESTING SHOULD HAVE BEEN REQUIRED. HOWEVER, CALMA HAS NOT ATTEMPTED TO EXPLAIN WHY BENCHMARKING IS NECESSARY FOR THIS PROCUREMENT. FURTHERMORE, IT IS A WELL-ESTABLISHED PRINCIPLE THAT THE RESPONSIBILITY FOR DRAFTING SPECIFICATIONS REFLECTING THE MINIMUM NEEDS OF THE GOVERNMENT AND THE FACTUAL DETERMINATION AS TO COMPLIANCE WITH THOSE SPECIFICATIONS IS THE PREROGATIVE OF THE PROCURING AGENCY AND NOT SUBJECT TO LEGAL OBJECTION BY THIS OFFICE UNLESS CLEARLY ARBITRARY. 49 COMP. GEN. 156, 160 (1969). ALTHOUGH ON PAST OCCASIONS, WE HAVE APPROVED THE REQUIREMENT OF BENCHMARKING IN THE PROCUREMENT OF COMPUTER HARDWARE AND SOFTWARE, SEE 52 COMP. GEN. 118 (1972) AND B 176278, OCTOBER 25, 1972, WE ARE AWARE OF NO STATUTE OR REGULATION WHICH REQUIRES BENCHMARKING IN ALL COMPUTER-RELATED PURCHASES. FROM THE RECORD NOW BEFORE US, WE ARE UNABLE TO CONCLUDE THAT THE PROCURING AGENCY'S DECISION NOT TO REQUIRE BENCHMARKING WAS EITHER ARBITRARY, MADE IN BAD FAITH, OR CONSTITUTED AN ATTEMPT TO FAVOR A PARTICULAR OFFEROR.

ACCORDINGLY, CALMA'S PROTEST IS DENIED.