B-180023, MAR 25, 1974

B-180023: Mar 25, 1974

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(ICI) HAS OBJECTED TO THE MANNER IN WHICH ITS OFFER WAS EVALUATED UNDER REQUEST FOR PROPOSALS (RFP) CS-RFP 02-74. THE SUBJECT RFP WAS ISSUED AUGUST 20. THE PROCUREMENT WAS REPORTEDLY NEGOTIATED UNDER THE AUTHORITY OF 41 U.S.C. 252(C)(10) AND AWARD OF A FIRM FIXED PRICE CONTRACT WAS CONTEMPLATED. OFFERORS WERE REQUESTED TO INDICATE THE CHARGE FOR SIX DEFINITE ELEMENTS OF COST. OFFERORS WERE FURTHER ADMONISHED THAT THE LIST OF COST ELEMENTS WAS NOT NECESSARILY EXHAUSTIVE. WERE APPLICABLE. PROPOSAL EVALUATION WAS TO BE EFFECTED PURSUANT TO A NUMERICAL RATING SCHEME. THE MOST SIGNIFICANT FACTOR IN THE EVALUATION WAS COST FOR WHICH 85 POINTS HAD BEEN ASSIGNED. A MONTHLY CHARGE WAS COMPUTED FOR EACH OF THE COST ELEMENTS LISTED.

B-180023, MAR 25, 1974

ALTHOUGH SOLICITATION DID NOT SPECIFICALLY STATE THAT CONSIDERATION WOULD BE GIVEN IN EVALUATING PROPOSALS TO A HIGHER "TERMINAL CONNECT RATE" APPLICABLE WHERE THE GOVERNMENT EXCEEDED ITS ESTIMATED MONTHLY USAGE, TOTALITY OF SOLICITATION REQUIRED CONSIDERATION OF COST IMPLICATIONS OF SUCH CHARGE IN EVALUATING PROPOSAL.

TO INFORMATION CONSULTANTS, INC.:

INFORMATION CONSULTANTS, INC. (ICI) HAS OBJECTED TO THE MANNER IN WHICH ITS OFFER WAS EVALUATED UNDER REQUEST FOR PROPOSALS (RFP) CS-RFP 02-74, CONTENDING THAT IF PROPERLY EVALUATED ACCORDING TO THE FORMULA SET FORTH IN THE RFP, IT WOULD BE THE LOW OFFEROR AND THE CONCERN ENTITLED TO CONTRACT.

THE SUBJECT RFP WAS ISSUED AUGUST 20, 1973, BY THE UNITED STATES CIVIL SERVICE COMMISSION FOR A COMMERCIAL CONVERSATIONAL TIME-SHARING SERVICE UTILIZING REMOTE TERMINALS. THE PROCUREMENT WAS REPORTEDLY NEGOTIATED UNDER THE AUTHORITY OF 41 U.S.C. 252(C)(10) AND AWARD OF A FIRM FIXED PRICE CONTRACT WAS CONTEMPLATED.

THE SOLICITATION PROVIDED FOR THE SUBMISSION AND EVALUATION OF SEPARATE COST AND TECHNICAL PROPOSALS. AS TO COSTS, OFFERORS WERE REQUESTED TO INDICATE THE CHARGE FOR SIX DEFINITE ELEMENTS OF COST. OFFERORS WERE FURTHER ADMONISHED THAT THE LIST OF COST ELEMENTS WAS NOT NECESSARILY EXHAUSTIVE, AND THAT OTHER CHARGES, WERE APPLICABLE, SHOULD BE STATED AND WOULD BE EVALUATED.

PROPOSAL EVALUATION WAS TO BE EFFECTED PURSUANT TO A NUMERICAL RATING SCHEME, UTILIZING A 100 POINT SCALE. THE MOST SIGNIFICANT FACTOR IN THE EVALUATION WAS COST FOR WHICH 85 POINTS HAD BEEN ASSIGNED. IN ORDER TO DETERMINE THE SCORE FOR A PARTICULAR COST PROPOSAL, A MONTHLY CHARGE WAS COMPUTED FOR EACH OF THE COST ELEMENTS LISTED. THESE CHARGES WERE THEN TOTALED AND DIVIDED BY 225, THE GOVERNMENT'S ESTIMATED HOURS OF USE PER MONTH. THE RESULTING COMPUTATION REPRESENTED A PROPOSAL'S "ADJUSTED HOURLY RATE" IN WHICH EACH EXPENSE ELEMENT WAS COSTED AS SPECIFIED.

THE INSTANT PROTEST RELATES TO THE PARTICULAR METHOD BY WHICH THE GOVERNMENT COMPUTED THE "MONTHLY CHARGE" FOR ICI'S "TERMINAL CONNECT CHARGE," ONE OF THE COST ELEMENTS SPECIFIED IN THE SOLICITATION. THE SOLICITATION PROVIDED THAT THE MONTHLY RATE FOR THIS ELEMENT WOULD BE COMPUTED BY MULTIPLYING THE PROPOSED HOURLY CONNECT TIME BY THE ESTIMATED USAGE TIME PER MONTH (225). ALL OFFERORS WITHIN THE COMPETITIVE RANGE, EXCEPT ICI, PROPOSED A SINGLE HOURLY CONNECT TIME RATE TO APPLY WITHOUT REGARD TO THE ACTUAL TOTAL MONTHLY USAGE. ICI PROPOSED AN HOURLY RATE FOR THE FIRST 225 HOURS EACH MONTH AND A SECOND RATE FOR USE IN EXCESS OF 225 HOURS. ICI'S SECOND RATE WAS MORE THAN DOUBLE THE INITIAL QUANTITY RATE, HOWEVER, ICI ALSO PROPOSED TO REFUND THE DIFFERENCE BETWEEN THE TWO RATES IF THE AVERAGE MONTHLY USAGE FOR THREE MONTH INTERVALS WAS NOT IN EXCESS OF 225 HOURS.

THE RECORD INDICATES THAT ICI WAS REQUESTED TO PROPOSE A SINGLE RATE BUT IT FAILED TO DO SO. THE COMMISSION HAS TAKEN THE POSITION THAT IN SUCH CIRCUMSTANCES, IT COULD NOT IGNORE THE HIGHER RATE SINCE IN SOME QUARTERS MORE THAN AN AVERAGE OF 225 HOURS PER MONTH WOULD BE USED AND, OBVIOUSLY, IN OTHER QUARTERS FEWER HOURS WOULD BE USED ON AN AVERAGE. ACCORDINGLY, THE COMMISSION FACTORED ICI'S DUAL RATE INTO ITS COMPUTATION OF THE "MONTHLY RATE" FOR THE TERMINAL CONNECT CHARGE. THE COMMISSION REVIEWED THE PRIOR YEAR'S RECORDS AND DETERMINED THAT THE HIGHER RATE WOULD HAVE BEEN APPLICABLE DURING THE FIRST AND THIRD QUARTERS OF THAT CONTRACT. THEN DIVIDED BY 12 MONTHS THE TOTAL HOURS DURING THE FIRST AND THIRD QUARTERS WHICH WOULD HAVE BEEN SUBJECT TO THE HIGHER RATE. THE QUOTIENT RESULTING FROM THE ABOVE DIVISION (26 HOURS) WAS FIGURED AT ICI'S HIGHER RATE IN COMPUTING THE MONTHLY CHARGE FOR TERMINAL CONNECT TIME AND THE REMAINDER OF THE 225 ESTIMATED MONTHLY HOURS (199 HOURS) WAS COMPUTED AT ICI'S LOWER RATE.

ICI CONTENDS THAT ITS HIGHER RATE SHOULD NOT HAVE BEEN USED AT ALL IN THE COMPUTATION SINCE THIS WAS NOT IN KEEPING WITH THE METHOD SPECIFIED IN THE SOLICITATION FOR EVALUATING THE TERMINAL CONNECT CHARGES. IT BELIEVES THAT ONLY ITS LOWER TERMINAL CONNECT CHARGE SHOULD HAVE BEEN USED IN THE COMPUTATION OF THE MONTHLY CHARGE SINCE THAT RATE WAS APPLICABLE TO THE FULL AMOUNT OF ESTIMATED MONTHLY USAGE.

WE DO NOT BELIEVE THERE IS MERIT IN ICI'S POSITION. IT IS CLEAR THAT THE PERTINENT EVALUATION CRITERIA ESTABLISHED IN THE SOLICITATION DID NOT CONTEMPLATE PAYMENT OF A DIFFERENT RATE FOR THE TERMINAL CONNECT CHARGE FOR USAGE IN EXCESS OF 225 HOURS PER MONTH. WHILE ICI WAS REQUESTED TO PROPOSE A SINGLE RATE, IT CHOSE NOT TO DO SO. MOREOVER, THE SOLICITATION SPECIFICALLY PROVIDES THAT ANY OTHER COSTS EVIDENT FROM THE PROPOSAL WOULD BE ACCOUNTED FOR IN THE ADJUSTED HOURLY RATE. THUS, WE DO NOT THINK THE COMMISSION'S ACTION WAS INCONSISTENT WITH THE TOTALITY OF THE SOLICITATION'S EVALUATION CRITERIA. INDEED, THE COMMISSION WOULD HAVE BEEN REMISS HAD IT NOT TAKEN INTO ACCOUNT THE INEVITABLE HIGHER COSTS RESULTING FROM ICI'S DUAL RATE SCHEME. MOREOVER, WE FIND THE PARTICULAR METHOD USED IN EVALUATING THE COST OF ICI'S PROPOSAL TO BE ENTIRELY FAIR AND REASONABLE IN THE CIRCUMSTANCES.

ACCORDINGLY, THE PROTEST IS DENIED.