B-181166, AUG 29, 1974

B-181166, AUG 29, 1974

PREPARATION AND ESTABLISHMENT OF SPECIFICATIONS TO REFLECT MINIMUM NEEDS OF GOVERNMENT ARE MATTERS PRIMARILY WITHIN JURISDICTION OF PROCURING AGENCY, SUBJECT TO QUESTION BY GAO ONLY WHEN NOT SUPPORTED BY SUBSTANTIAL EVIDENCE.

SINGER COMPANY, BUSINESS MACHINES DIVISION:

ON MARCH 15, 1974, THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD) ISSUED REQUEST FOR PROPOSALS (RFP) H-320-74, REQUESTING OFFERS FOR THE PROVISION, INSTALLATION AND MAINTENANCE OF DATA COMMUNICATION EQUIPMENT THROUGHOUT HUD. AMONG THE REQUIREMENTS THAT THE EQUIPMENT HAD TO MEET WAS ONE THAT EACH TERMINAL HAVE THE CAPABILITY TO DISPLAY DATA LOCALLY ON A CATHODE RAY TUBE (CTR) DISPLAY. HOWEVER, NO MAXIMUM OR MINIMUM SIZES OF THE CRT DISPLAY WERE DESCRIBED IN THE RFP, AS IT WAS HUD'S BELIEF THAT POTENTIAL PROPOSERS WOULD BE ABLE TO MEET THE CRT DISPLAY SIZE IT REQUIRED. PRIOR RESEARCH OF CRT'S BY HUD'S TECHNICAL PERSONNEL DISCLOSED DISPLAY CAPACITIES RANGING FROM 576 TO 1,920 CHARACTERS, AND IT WAS EXPECTED THAT ANY PROPOSED EQUIPMENT WOULD BE OF COMPARABLE CAPACITY.

SINGER COMPANY, BUSINESS MACHINES DIVISION:

THEREFORE, HUD DID NOT WISH TO EXCLUDE OR LIMIT PROPOSALS WHICH COULD REASONABLY SATISFY THE NEED FOR CRT CAPACITY FALLING WITHIN THE ABOVE RANGE.

OF THE 82 SOURCES SOLICITED, SEVEN RESPONSES WERE RECEIVED. OF THESE SEVEN RESPONSES, ONLY THREE WERE INITIALLY DEEMED BY THE SOURCE EVALUATION BOARD (SEB) TO BE TECHNICALLY ACCEPTABLE. THE THREE PROPOSALS WERE THOSE OF THE SINGER COMPANY, BUSINESS MACHINES DIVISION (SINGER), LINOLEX SYSTEMS, INC. (LINOLEX), AND DATA POINT CORPORATION (DATA POINT). THE MAXIMUM CRT DISPLAYS OFFERED WERE 256, 1,600 AND 900 CHARACTERS, RESPECTIVELY.

THE SEB, UPON RECOGNIZING THAT THE CRT OFFERED BY SINGER WOULD NOT SATISFY HUD'S MULTIPLE RECORD DISPLAY REQUIREMENTS, CONTACTED SINGER, THROUGH THE CONTRACTING OFFICER, TO DETERMINE WHETHER IT COULD PROVIDE A LARGER CRT. SINGER RESPONDED THAT IT PRESENTLY COULD NOT. THEREFORE, THE SEB DECIDED THAT THERE WAS NO ALTERNATIVE BUT TO CHANGE TO MANDATORY REQUIREMENTS TO PROVIDE FOR A CRT DISPLAYING A MINIMUM OF 720 CHARACTERS. THIS WAS ACCOMPLISHED BY ISSUING AMENDMENT NO. 2, ON APRIL 25, 1974, TO THE THREE ACCEPTABLE OFFERORS, PURSUANT TO FPR 1 3.805-1(D).

SINGER DID NOT RESPOND TO THE NEW CRT REQUIREMENT BUT INSTEAD PROTESTED THIS INCREASED REQUIREMENT TO OUR OFFICE. SINGER CONTENDS THAT AMENDMENT NO. 2 IS "GOLD-PLATED" IN THAT IT ELIMINATES COMPETITIVE RESPONSES TO THE ORIGINAL SOLICITATION AND REQUIRES AN UNWARRANTED INCREASE TO THE OVERALL PRICE OFFERED TO THE GOVERNMENT.

HUD HAS RESPONDED TO THESE CONTENTIONS BY STATING THAT (1) THE REQUIREMENT OF A MINIMUM SIZE FOR THE CRT WAS A BONA FIDE NEED OF THE DEPARTMENT, AND (2) THE CHANGE IN CRT SIZE HAD AN INSIGNIFICANT EFFECT, IF ANY, ON THE TOTAL PRICE FOR THE SYSTEM.

IN OUR RECENT DECISION IN THE MATTER OF PARTICLE DATA, INC.; COULTER ELECTRONICS, INC., B-179762, 178718, MAY 15, 1974, WE STATED THAT,

"THE PROCUREMENT OFFICIALS INVOLVED WITH THIS SOLICITATION HAVE DETERMINED WHAT THEY BELIEVE TO BE THE REQUIREMENTS THAT ARE SUFFICIENT TO MEET THE GOVERNMENT'S MINIMUM NEEDS. IN THIS REGARD, OUR OFFICE HAS CONSISTENTLY TAKEN THE POSITION THAT THE PREPARATION AND ESTABLISHMENT OF SPECIFICATIONS TO REFLECT THE NEEDS OF THE GOVERNMENT ARE MATTERS PRIMARILY WITHIN THE JURISDICTION OF THE PROCUREMENT AGENCY, TO BE QUESTIONED BY OUR OFFICE ONLY WHEN NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. 53 COMP. GEN. (B-180434, APRIL 12, 1974); 38 COMP. GEN. 190 (1958); 37 ID., 757 (1958), 17 ID., 554 (1938); B-176420, JANUARY 4, 1973. RECOGNIZED THAT GOVERNMENT PROCUREMENT OFFICIALS, WHO ARE FIMILAR WITH THE CONDITIONS UNDER WHICH SUPPLIES OR EQUIPMENT HAVE BEEN USED IN THE PAST ARE GENERALLY IN THE BEST POSITION TO KNOW THE GOVERNMENT'S ACTUAL NEEDS AND ARE BEST ABLE TO DRAFT APPROPRIATE SPECIFICATIONS. THUS, WE HAVE HELD THAT THE GOVERNMENT CANNOT BE PLACED IN THE POSITION OF ALLOWING BIDDERS TO DICTATE SPECIFICATIONS WHICH WOULD HAVE THE EFFECT OF REQUIRING SPECIFICATIONS NOT MEETING THE CONSIDERED NEEDS OF THE PROCUREMENT AGENCY."

BASED ON THE RECORD BEFORE US, WE FIND THAT PROPER CONSIDERATION WAS GIVEN TO WHAT CRT SIZE WAS NECESSARY FOR THIS PROCUREMENT, ALBEIT AFTER INITIAL ISSUANCE OF THE RFP. THEREFORE, WE BELIEVE THAT THE PROCURING ACTIVITY PROPERLY EXERCISED ITS DISCRETION IN DRAFTING THE REVISED SPECIFICATIONS AND WE WILL NOT QUESTION THIS DETERMINATION OF ITS NEEDS.

AS CONCERNS THE ALLEGATION THAT AMENDMENT NO. 2 RESULTED IN AN UNWARRANTED INCREASE IN PRICE, NO EVIDENCE HAS BEEN SUBMITTED WHICH ESTABLISHES A COST INCREASE DIRECTLY RELATED TO THE CRT SIZE CHANGE CALLED FOR IN AMENDMENT NO. 2. MOREOVER, SINCE SINGER HAD BEEN ELIMINATED FROM THE COMPETITIVE RANGE ON THE BASIS THAT ITS PROPOSAL WAS TECHNICALLY UNACCEPTABLE, ITS PRICE PROPOSAL WAS NEITHER CONSIDERED NOR CONVERTED TO PRESENT VALUE DOLLARS. THEREFORE, THERE IS NO VALID WAY IN WHICH TO DRAW ANY COMPARISONS BETWEEN SINGER'S PROPOSED PRICE AND THE AMOUNT OF THE AWARD TO LINOLEX.

ACCORDINGLY, THE PROTEST IS DENIED.