B-181460, NOV 21, 1974, 54 COMP GEN 408

B-181460: Nov 21, 1974

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IS UNTIMELY BECAUSE RECORD SHOWS CLEAR DISAGREEMENT BETWEEN OFFEROR AND AGENCY AT CLOSE OF DISCUSSION. THE PROTEST IS DENIED. THE RFP WAS ISSUED ON AUGUST 8. THE TELOPS PROJECT IS DESCRIBED AS A COMPUTER OR NETWORK OF COMPUTERS WHICH WILL HANDLE TELEMETRY DATA PROCESSING NEEDS OF SCIENTIFIC SATELLITES. TRAINING SERVICES AND DOCUMENTATION ARE ALSO BEING PROCURED. IT WAS STATED THAT THE SOURCE EVALUATION BOARD (SEB) WOULD EVALUATE PROPOSALS AGAINST MISSION SUITABILITY. MISSION SUITABILITY WAS TO BE SCORED NUMERICALLY. COST FACTORS AND OTHER FACTORS WERE TO BE EVALUATED BUT NOT SCORED. FOUR PROPOSALS WERE RECEIVED AND. UNIVAC AND AEROJET-GENERAL CORPORATION WERE DETERMINED TO BE WITHIN THE COMPETITIVE RANGE.

B-181460, NOV 21, 1974, 54 COMP GEN 408

CONTRACTS - NEGOTIATION - COMPETITION - DISCUSSION WITH ALL OFFERORS REQUIREMENT - "MEANINGFUL" DISCUSSIONS WHILE PROTESTER PRESENTS GENERAL CHALLENGE TO NASA PROCEDURE OF CONDUCTING "DISCUSSIONS" WITH OFFERORS IN COMPETITIVE RANGE, WITH "NEGOTIATIONS" LIMITED TO DEFINITIZATION OF CONTRACT WITH SELECTED OFFEROR, CHARGING THAT PROCEDURE VIOLATES STATUTORY AND REGULATORY REQUIREMENTS FOR MEANINGFUL NEGOTIATION WITH ALL OFFERORS IN RANGE AND ABRIDGES REQUIREMENT FOR COMMON CUTOFF DATE, AFTER REVIEW OF DISCUSSIONS CONDUCTED HERE, AND ADHERENCE TO COMMON CUTOFF DATE FOR PROPOSAL REVISIONS, IT CANNOT BE CONCLUDED THAT PROCEDURES LEADING TO SELECTION OF OFFEROR FOUND SIGNIFICANTLY SUPERIOR IN MISSION SUITABILITY, AND LOWER IN COST THAN PROTESTER, VARIED MATERIALLY FROM REQUIREMENTS OF 10 U.S.C. 2304(G). CONTRACTS - NEGOTIATION - REQUESTS FOR PROPOSALS - PROTESTS UNDER - TIMELINESS OBJECTION TO UPWARD NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA) COST ADJUSTMENT IN OFFEROR'S COST PROPOSAL, MADE BECAUSE NASA PERCEIVED DEFICIENCY IN OFFEROR'S RESPONSE TO REQUEST FOR PROPOSALS (RFP) SPARE PARTS FORMULA, IS UNTIMELY BECAUSE RECORD SHOWS CLEAR DISAGREEMENT BETWEEN OFFEROR AND AGENCY AT CLOSE OF DISCUSSION, AS TO REALISM OF RFP TERMS AND ADEQUACY OF RESPONSE THERETO, AND INACTION BY AGENCY IN FAILING TO ACCEDE TO PROTESTER'S OBJECTION BY DATE ESTABLISHED FOR RECEIPT OF REVISED PROPOSALS NOTIFIED OFFEROR THAT IT MUST TIMELY PROTEST. ALSO, OTHER OBJECTIVES TO COST ADJUSTMENTS, EVEN IF SUSTAINED, DO NOT ALTER RELATIVE RANKING OF OFFERORS.

IN THE MATTER OF SPERRY RAND CORPORATION (UNIVAC DIVISION), IBM CORPORATION, FEDERAL SYSTEMS DIVISION, NOVEMBER 21, 1974:

SPERRY RAND CORPORATION (UNIVAC DIVISION) (HEREINAFTER UNIVAC) HAS PROTESTED TO OUR OFFICE AGAINST THE SELECTION BY THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA) OF INTERNATIONAL BUSINESS MACHINES (IBM) CORPORATION, FEDERAL SYSTEMS DIVISION, FOR FINAL NEGOTIATIONS LEADING TO THE PROPOSED AWARD OF A CONTRACT UNDER REQUEST FOR PROPOSALS (RFP) 5-24307 -360.

UNIVAC'S OBJECTIONS, DISCUSSED IN DETAIL INFRA, RELATE PRIMARILY TO ALLEGED DEFICIENCIES IN THE CONDUCT OF DISCUSSIONS AND NEGOTIATIONS AND TO THE PROPRIETY OF CERTAIN COST ADJUSTMENTS MADE BY NASA.

FOR THE REASONS WHICH FOLLOW, THE PROTEST IS DENIED.

THE RFP WAS ISSUED ON AUGUST 8, 1973, PURSUANT TO A DETERMINATION AND FINDINGS TO NEGOTIATE A CONTRACT UNDER 10 U.S.C. SEC. 2304(A)(11) (1970) FOR DEVELOPMENTAL WORK. THE SOLICITATION CALLED FOR OFFERS ON CERTAIN SPECIFIED MAJOR SUBSYSTEMS OF THE GODDARD SPACE FLIGHT CENTER'S TELEMETRY ON-LINE PROCESSING SYSTEM (TELOPS). THE TELOPS PROJECT IS DESCRIBED AS A COMPUTER OR NETWORK OF COMPUTERS WHICH WILL HANDLE TELEMETRY DATA PROCESSING NEEDS OF SCIENTIFIC SATELLITES. THE PRESENT RFP CALLS FOR THE DESIGN, MANUFACTURE AND DELIVERY OF AN INPUT PROCESSOR WITH ONE OR MORE CENTRAL PROCESSING UNITS, A MASS STORAGE SYSTEM WITH UNIVAC 1108 INTERFACE, AND A MANAGEMENT INFORMATION SYSTEM (PREDOMINANTLY SOFTWARE). SPARE PARTS, INSTALLATION, TRAINING SERVICES AND DOCUMENTATION ARE ALSO BEING PROCURED.

SECTION "A" OF THE RFP STATES THAT THE EVALUATION OF PROPOSALS WOULD BE IN ACCORDANCE WITH THE PROCEDURES OF NHB 5103.6, NASA SOURCE EVALUATION BOARD MANUAL (AUGUST 1973 EDITION). IT WAS STATED THAT THE SOURCE EVALUATION BOARD (SEB) WOULD EVALUATE PROPOSALS AGAINST MISSION SUITABILITY, COST, AND OTHER FACTORS AND WOULD PRESENT ITS FINDINGS TO THE SOURCE SELECTION OFFICIAL (SSO) FOR CONSIDERATION IN SELECTING THE WINNING OFFEROR. PART 2-1 OF SECTION "B" OF THE RFP PROVIDED MISSION SUITABILITY EVALUATION CRITERIA AND AN INDICATION OF THEIR RELATIVE IMPORTANCE. MISSION SUITABILITY WAS TO BE SCORED NUMERICALLY, WITH THE EXCEPTION OF AN UNWEIGHTED "OTHER FACTORS" CRITERIA COVERING COMPANY EXPERIENCE AND PAST PERFORMANCE. COST FACTORS AND OTHER FACTORS WERE TO BE EVALUATED BUT NOT SCORED.

FOUR PROPOSALS WERE RECEIVED AND, AFTER INITIAL EVALUATION, THOSE OF IBM, UNIVAC AND AEROJET-GENERAL CORPORATION WERE DETERMINED TO BE WITHIN THE COMPETITIVE RANGE. NASA STATES THAT WRITTEN AND ORAL DISCUSSIONS WERE HELD WITH THESE CONCERNS; THAT REVISED PROPOSALS WERE RECEIVED AND EVALUATED; AND THAT A PRESENTATION OF FINDINGS WAS MADE TO THE SSO. THE SSO SELECTED IBM FOR FINAL CONTRACT NEGOTIATIONS BECAUSE:

*** IBM'S PROPOSAL WAS BETTER THAN THE OTHERS BY A VERY SIGNIFICANT MARGIN IN THE AREA OF MISSION SUITABILITY. SPECIFICALLY, WE CONCLUDED THAT THE IBM PROPOSAL WAS SUPERIOR TECHNICALLY AND IN MANAGEMENT APPROACH. WE AGREED THAT UNIVAC'S LOWER MISSION SUITABILITY RATING, COUPLED WITH ITS HIGH COST PROPOSAL, WARRANTED THE CONCLUSION THAT ITS PROPOSAL OFFERED NO ADVANTAGE OVER THE OTHERS. WE FURTHER AGREED THAT THE MARGIN OF IBM SUPERIORITY IN THE MISSION SUITABILITY AREA MORE THAN OFFSET AEROJET'S LOWER PROPOSED AND ESTIMATED COST. ACCORDINGLY, WE SELECTED IBM FOR FINAL NEGOTIATIONS LEADING TO THE CONTRACT AWARD.

AN AWARD TO IBM IS BEING WITHHELD PENDING RESOLUTION OF UNIVAC'S PROTEST.

THE PRINCIPAL THRUST OF THE PROTEST IS THAT THE DISCUSSION AND NEGOTIATION PROCEDURES UTILIZED BY NASA IN THE PRESENT CASE WERE IMPROPER AND, FURTHER, THAT THERE WAS NO MEANINGFUL NEGOTIATION EITHER WITH UNIVAC OR WITH AEROJET-GENERAL, THE THIRD OFFEROR WITHIN THE COMPETITIVE RANGE. A SUMMARY OF THE PROTESTER'S ALLEGATIONS AND NASA'S RESPONSES FOLLOWS.

ALLEGATION: THE FAILURE OF NASA TO CONDUCT COMPETITIVE NEGOTIATIONS WITH ALL TECHNICALLY QUALIFIED OFFERORS WAS IN CONTRAVENTION OF THE TERMS OF THE RFP, NASA STATEMENTS AT THE PREPROPOSAL CONFERENCE AND NASA PROCUREMENT REGULATION (PR) 3.805-1 (1970 ED.).

NASA RESPONSE:

UNIVAC HAS CITED SECTION A, PAGE 8 OF THE RFP, NASA PR 3.805-1, AND STATEMENTS OF A NASA REPRESENTATIVE RECORDED ON PAGES 27 AND 42 OF THE PRE -PROPOSAL CONFERENCE TRANSCRIPT AS SUPPORTIVE OF THIS ALLEGATION. REVIEW OF THE REFERENCED PORTIONS OF THE RFP AND PRE-PROPOSAL CONFERENCE TRANSCRIPT, HOWEVER, CLEARLY DRAWS THE READER'S ATTENTION TO THE POSSIBILITY THAT A SINGLE SOURCE MIGHT BE SELECTED FOR NEGOTIATIONS. (SEE E.G. PAGE 8 OF THE RFP - "OR TO NEGOTIATE SEPARATELY WITH ANY COMPANY" AND PAGE 27 OF THE TRANSCRIPT - "NEGOTIATIONS WITH ONE OR MORE OF THE SOURCES.") FURTHER, THE REFERENCE TO "COMPETITIVE NEGOTIATIONS" (TRANSCRIPT, PAGE 27) CAN ONLY BE READ IN CONJUNCTION WITH THE REST OF THE SENTENCE, I.E., "ONE OR MORE OF THE SOURCES THAT ARE IN THE RUNNING AT THAT TIME." MOREOVER, THE RFP SPECIFICALLY INFORMED PROSPECTIVE OFFERORS (SECTION A, PAGE 4) THAT:

"PROPOSALS WILL BE EVALUATED IN ACCORDANCE WITH THE PROCEDURES OF NHB 5103.6, NASA SOURCE EVALUATION BOARD MANUAL, AUGUST 1973 EDITION."

THE NHB INDICATES THAT THE SELECTION OFFICIAL WILL NORMALLY SELECT ONE SOURCE FOR FINAL CONTRACT NEGOTIATIONS. (SEE E.G. CHAPTER 6-600.) BELIEVE IT APPARENT FROM THE FOREGOING, PLUS THE FACT THAT PROSPECTIVE OFFERORS WERE REMINDED AT THE PRE-PROPOSAL CONFERENCE CONCERNING THE "VERY RECENTLY PUBLISHED HANDBOOK" TO "BE SURE TO TAKE A CLOSER LOOK IN THIS AREA. ..." (TRANSCRIPT, PAGE 27), THAT THE SOURCE SELECTION OFFICIAL'S SELECTION OF ONE COMPANY FOR FINAL CONTRACT NEGOTIATIONS WAS IN ACCORDANCE WITH BOTH THE PROVISIONS OF THE RFP AND THE STATEMENTS OF THE NASA REPRESENTATIVE AT THE PRE-PROPOSAL CONFERENCE.

WITH REGARD TO UNIVAC'S ALLEGATION THAT NASA'S FAILURE TO CONDUCT "COMPETITIVE NEGOTIATIONS" VIOLATED NASA PROCUREMENT REGULATION 3.805 1, SUFFICE IT TO SAY THAT THE RFP ADVISED PROSPECTIVE OFFERORS THAT PROPOSALS WOULD BE EVALUATED IN ACCORDANCE WITH THE PROCEDURES SET FORTH IN NHB 5103.6 (SECTION A, PAGE 4) AND THAT WRITTEN OR ORAL DISCUSSIONS WOULD BE CONDUCTED IN ACCORDANCE WITH THE PROVISIONS OF PRD 70-15 (REVISED SEPTEMBER 1972). THE BOARD COMPLIED WITH THESE INSTRUCTIONS, BOTH OF WHICH ARE CONSISTENT WITH THE NASA PROCUREMENT REGULATION. ***

ALLEGATION: NASA FAILED TO CONDUCT ANY "NEGOTIATIONS" WITH UNIVAC; AN ORAL PRESENTATION BY UNIVAC ON FEBRUARY 8, 1974, WAS NOT "WRITTEN OR ORAL DISCUSSION," AND EVEN IF REGARD AS SUCH, THE DISCUSSIONS WERE NOT "MEANINGFUL" NEGOTIATIONS.

NASA RESPONSE:

WRITTEN AND ORAL DISCUSSIONS WERE HELD WITH THOSE FIRMS IN THE COMPETITIVE RANGE, I.E., AEROJET, IBM, AND UNIVAC. WRITTEN DISCUSSIONS WITH UNIVAC CONSISTED OF EIGHTY-FIVE WRITTEN QUESTIONS FORWARDED BY THE CONTRACTING OFFICER *** AND RESPONSES TO THOSE QUESTIONS SUBMITTED BY UNIVAC ***. ORAL DISCUSSIONS WITH UNIVAC WERE HELD ON FEBRUARY 8, 1974, AT A CONFERENCE OF THE SEB MEMBERS AND UNIVAC REPRESENTATIVES. *** WRITTEN AND ORAL DISCUSSIONS WITH AEROJET AND IBM WERE CONDUCTED IN A SIMILAR MANNER. FEBRUARY 27, 1974 WAS ESTABLISHED AS THE CUT-OFF DATE COMMON TO ALL OFFERORS FOR RECEIPT OF ANSWERS TO DISCUSSION QUESTIONS AND FOR RECEIPT OF PROPOSAL REVISIONS. *** BY LETTER OF FEBRUARY 27, 1974 *** UNIVAC SUBMITTED CORRECTIONS TO ITS PROPOSAL AND ANSWERS TO QUESTIONS RAISED DURING THE ORAL DISCUSSIONS.

WE MAINTAIN THAT THE DISCUSSIONS CONDUCTED WITH UNIVAC IN THIS CASE, AS DOCUMENTED BY THE RECORD, WERE SUBSTANTIVE AND MEANINGFUL, AND THAT THEY MANIFESTLY MET THE REQUIREMENT OF 10 U.S.C. 2304(G) THAT WRITTEN OR ORAL DISCUSSION BE CONDUCTED WITH ALL OFFERORS WITHIN A COMPETITIVE RANGE. ***

ALLEGATION: THE SELECTION OF IBM FOR FINAL NEGOTIATIONS ABRIDGED THE COMMON CUTOFF PROCEDURE. SINCE UNIVAC WAS TECHNICALLY ACCEPTABLE, SINCE ITS COSTS WERE LOWER THAN IBM'S BEFORE THE ADDITION OF FEE, WHICH IS NEGOTIABLE, AND BEFORE ARBITRARY NASA COST ADJUSTMENTS, UNIVAC QUALIFIED FOR FURTHER WRITTEN AND ORAL DISCUSSIONS AFTER EVALUATION OF REVISED PROPOSALS.

NASA RESPONSE:

THE TERM "DISCUSSIONS" AND "NEGOTIATIONS" ARE OFTEN USED INTERCHANGEABLY. *** NASA, HOWEVER, FOR ITS CONVENIENCE AND TO AVOID CONFUSION IN PROCUREMENTS INVOLVING THE USE OF FORMAL SOURCE EVALUATION BOARDS, USUALLY USES THE TERM "DISCUSSIONS" TO REFER TO THOSE COMMUNICATIONS BETWEEN THE GOVERNMENT AND THE OFFERORS WHICH SERVE, UP TO THE POINT OF SOURCE SELECTION, TO POINT OUT AMBIGUITIES, UNCERTAINTIES, AND, WHERE APPROPRIATE, DEFICIENCIES, AND THE TERM "NEGOTIATIONS" TO REFER TO THE PROCESS OF DEFINITIZING A FINAL AGREEMENT ON PRICE, TERMS, AND CONDITIONS WITH THE WINNER OF THE COMPETITION. (SEE NASA PRD 70-15, SUPRA, AND CHAPTER 6-601 OF NHB 5103.6.) "NEGOTIATIONS," IN THIS USAGE, NECESSARILY TAKE PLACE FOLLOWING THE CUT-OFF DATE FOR FORMAL PROPOSAL REVISIONS ADHERED TO IN THE "DISCUSSIONS" PHASE. (SEE CHAPTER 4-406 OF NHB 5103.6.) "NEGOTIATIONS," IN THIS SENSE, ARE NOT SUBJECT TO CUT-OFF PROCEDURES UNLESS THE COMPETITION IS SO CLOSE THAT THE SOURCE SELECTION OFFICIAL DIRECTS THAT DEFINITIVE CONTRACTS BE NEGOTIATED WITH TWO OR MORE OFFERORS. (SEE CHAPTER 6 OF NHB 5103.6.) THUS, THE SELECTION OF IBM FOR FINAL "NEGOTIATIONS," AS UTILIZED IN THIS CONTEXT, IN NO WAY ABRIDGED THE COMMON CUT-OFF PROCEDURE. THE PROCEDURE WAS PROPERLY ADHERED TO FOLLOWING "DISCUSSIONS" WITH THOSE OFFERORS IN THE COMPETITIVE RANGE.

ALLEGATION: THE DISCUSSIONS WHICH WERE HELD TOOK PLACE DURING EVALUATION AND NOT AFTER, IN CONTRAVENTION OF NASA PR 3.805-1.

NASA RESPONSE:

REGARDING THE PROVISION OF NASA PROCUREMENT REGULATION 3.805-1 THAT WRITTEN OR ORAL DISCUSSIONS SHALL BE HELD "AFTER EVALUATION OF PROPOSALS," THE EVALUATION REFERRED TO IS THAT INITIAL EVALUATION NECESSARY TO ESTABLISH THE COMPETITIVE RANGE. OBVIOUSLY, ANY WRITTEN OR ORAL DISCUSSIONS, AND RESULTANT PROPOSAL CLARIFICATIONS OR REVISIONS, WILL GENERATE INFORMATION WHICH MUST ITSELF THEN BE EVALUATED. TO HOLD FURTHER DISCUSSIONS AFTER FINAL EVALUATION OF PROPOSALS, I.E., AFTER THE CUTOFF DATE FOLLOWING WRITTEN AND ORAL DISCUSSIONS, WOULD BE POINTLESS AND WOULD RESULT IN AN UNENDING PROCESS.

WE BELIEVE UNIVAC'S ALLEGATIONS ARE MOST CLOSELY RELATED TO THE NASA PROCUREMENT REGULATION DIRECTIVE (PRD) 70-15 (REV. SEPTEMBER 1972) AND NHB 5103.6 (AUGUST 1973 EDITION) CONCERNING THE HOLDING OF "DISCUSSIONS" WITH OFFERORS WITHIN THE COMPETITIVE RANGE TO POINT OUT AMBIGUITIES AND UNCERTAINTIES, BUT NOT DEFICIENCIES, WITH "NEGOTIATIONS" CONFINED TO THE PROCESS OF DEFINITIZING A CONTRACT WITH THE SELECTED OFFEROR. THE EVOLUTION OF THIS PROCEDURE IS REFLECTED IN SEVERAL PRIOR DECISIONS OF OUR OFFICE. SEE, FOR EXAMPLE, B-173677(2), MARCH 31, 1972, WHICH CONSIDERED, INTER ALIA, THE PROHIBITION IN NASA PRD 70-15, DECEMBER 1, 1970, AGAINST DISCUSSING "DEFICIENCIES," AND 50 COMP. GEN. 1 (1970), WHICH CONCERNED THE FAILURE TO ESTABLISH A COMMON CUTOFF DATE FOR REVISED PROPOSALS.

THE NASA PROCEDURE REPRESENTS ONE APPROACH TO MEETING THE STATUTORY REQUIREMENT FOR WRITTEN AND ORAL DISCUSSIONS, 10 U.S.C. SEC. 2304(G). PART, AT LEAST, THE UNDERLYING RATIONALE IS THAT TO POINT OUT DEFICIENCIES DURING THE DISCUSSIONS WOULD COMPROMISE THE COMPETITION, BECAUSE WEAKER PROPOSALS WOULD BE IMPROVED, AND A LEVELING EFFECT WOULD OCCUR. TO AVOID THIS, DISCUSSIONS ARE LIMITED TO CLARIFICATION OF PROPOSALS; AFTER SELECTION, THE AGENCY THEN NEGOTIATES THE BEST POSSIBLE CONTRACT ON TERMS MOST ADVANTAGEOUS TO THE GOVERNMENT. CONSIDERED IN THE ABSTRACT, POTENTIAL CONFLICTS BETWEEN THE PROCEDURE AND THE STATUTORY REQUIREMENT CAN BE ENVISIONED; FOR INSTANCE, AS APPEARS TO BE CONTEMPLATED BY UNIVAC, A SITUATION WHERE THE DISCUSSIONS ARE SO LIMITED IN SCOPE AND CONTENT THAT THEY AMOUNT TO LITTLE MORE THAN A CEREMONIAL EXERCISE, WITH THE MEANINGFUL DISCUSSIONS TRANSPOSED ALMOST ENTIRELY INTO THE FINAL NEGOTIATIONS STAGE.

IN THE PRESENT CASE, WE DO NOT FIND ANYTHING APPROACHING A PROBLEM OF THIS MAGNITUDE. UNIVAC'S CONTENTIONS IN THIS REGARD ARE LARGELY PRESENTED IN THE ABSTRACT; THE ONLY CONCRETE ALLEGATIONS OF LACK OF MEANINGFUL DISCUSSIONS ARE THE SPARE PARTS AND FACTORY INSPECTION TEST (FIT) ISSUES, DISCUSSED INFRA, AND AN INDICATION THAT THE PROPOSED UNIVAC FEE WOULD HAVE BEEN SUBJECT TO NEGOTIATION. AFTER REVIEW OF THESE CONTENTIONS, NASA'S RESPONSES, THE RECORD OF DISCUSSIONS CONDUCTED, AND THE ESTABLISHMENT AND ADHERENCE TO A COMMON CUTOFF DATE FOR REVISED PROPOSALS, WE DO NOT FIND A BASIS TO CONCLUDE THAT THE DISCUSSION AND NEGOTIATION PROCEDURES EMPLOYED HERE WERE MATERIALLY AT VARIANCE WITH THE STATUTORY REQUIREMENTS.

OTHER OBJECTIONS RAISED BY UNIVAC RELATE TO NASA COST ADJUSTMENTS TO THE UNIVAC PROPOSAL BECAUSE OF TECHNICAL DEFICIENCIES IN TWO AREAS - UNIVAC'S RESPONSES TO THE RFP'S SPARE PARTS FORMULA AND FIT PROVISIONS.

IN THIS REGARD, THE RFP CONTRACT SCHEDULE, LISTING THE SUPPLIES AND SERVICES TO BE FURNISHED, CALLED FOR ONE SET OF SPARE PARTS IN ACCORDANCE WITH A SPARE PARTS FORMULA. THE SPARE PARTS FORMULA SPECIFIED MINIMUM LEVELS OF SPARES TO BE PROVIDED FOR 27 DIFFERENT CATEGORIES OF PARTS, ASSEMBLIES AND MATERIALS. ALSO, ITEM 4(B)(I) OF THE SCHEDULE CALLED FOR A FACTORY INSPECTION TEST PROCEDURE (FITP) FOR THE TELOPS INCLUSIVE OF SOFTWARE CAPABILITY AND STATED THAT THE FITP SHALL ENCOMPASS A DEMONSTRATION THAT THE END ITEMS) MEETS THE FUNCTIONAL REQUIREMENTS OF THE CONTRACT. UNIVAC'S INITIAL OBJECTION WAS THAT ITS PROPOSED COSTS IN THESE AREAS WERE "NORMALIZED" UPWARDS TO ACCOMMODATE NASA'S DESIRES, AND THAT THIS PROCEDURE WAS IMPROPER BECAUSE WITHOUT ANY DISCUSSION WITH UNIVAC, NASA COULD NOT HAVE ACCURATELY ASCERTAINED THE AMOUNT OF NORMALIZATION REQUIRED. NASA'S ADMINISTRATIVE REPORT POINTED OUT THAT THE SEB MERELY ADJUSTED UNIVAC'S COSTS UPWARD IN THESE AREAS TO REFLECT THE IMPACT OF THE EVALUATORS' FINDINGS OF TECHNICAL DEFICIENCIES IN THE UNIVAC PROPOSAL. ITS COMMENTS ON THE ADMINISTRATIVE REPORT, UNIVAC APPEARS TO HAVE MODIFIED ITS OBJECTIONS IN THESE AREAS. IN REGARD TO THE SPARE PARTS ISSUE, THE PROTESTER MAKES THE FOLLOWING POINTS:

THE DISCUSSIONS WERE NOT MEANINGFUL, WITH REFERENCE TO THE SPARES ISSUES. UNIVAC FURNISHED A LIST OF SPARES, PRICED AT $96,600, AND POINTED OUT TO NASA THAT NASA'S FORMULA AS CONTAINED IN THE RFP WAS NOT REALISTIC, BASED UPON UNIVAC'S EXTENSIVE AND DOCUMENTED SPARES HISTORY. NASA LISTENED, BUT FAILED TO ADVISE THAT UNIVAC'S USE OF ACTUAL OPERATING EXPERIENCE FOR ITS EQUIPMENT, INSTEAD OF NASA'S GENERAL FORMULA, WAS CONSIDERED A WEAKNESS. IF THE OBJECT OF NEGOTIATION IS TO MAXIMIZE COMPETITION BY IMPROVING THE QUALITY OF PROPOSALS WITHIN THE COMPETITIVE RANGE (NASA PROC. REG. DIRECTIVE NO. 70-15 III,D), NASA WAS CLEARLY OBLIGATED TO ADVISE UNIVAC THAT THE EXPERIENCE BASIS WAS NOT AN ACCEPTABLE SUBSTITUTE FOR THE FORMULA SET FORTH IN THE RFP. FURTHER, THE FIGURE OF $171,613 ADDED TO UNIVAC'S PROPOSAL "TO CORRECT THE LEVEL OF SPARES", HAS NO REALISTIC BASIS. THIS ARBITRARY ADJUSTMENT HAD AN ADVERSE EFFECT UPON THE UNIVAC COST WITHOUT ANY BENEFIT OF DISCUSSION OR CLARIFICATION.

THE OBJECTIONS, THEN, APPEAR TO BE (1) THE RFP SPARE PARTS FORMULA WAS DEFECTIVE IN THAT IT WAS UNREALISTIC; (2) THE DISCUSSIONS OF THE SPARE PARTS APPROACH IN UNIVAC'S PROPOSAL WERE NOT MEANINGFUL; AND (3) THE RESULTING COST ADJUSTMENT WAS ARBITRARY.

FOR THE REASONS WHICH FOLLOW, WE BELIEVE THESE OBJECTIONS ARE UNTIMELY. INITIALLY, IT APPEARS THAT AFTER RECEIVING ITS COPY OF THE RFP, AND IN THE PROCESS OF PREPARING ITS PROPOSAL, UNIVAC WAS IN A POSITION TO KNOW ITS OBJECTION THAT THE SPARE PARTS FORMULA WAS UNREALISTIC. UNDER THESE CIRCUMSTANCES, IT WOULD HAVE BEEN PREFERABLE TO RAISE THIS OBJECTION PRIOR TO THE CLOSING DATE FOR RECEIPT OF INITIAL PROPOSALS, SO THAT NASA COULD HAVE GIVEN CONSIDERATION TO POSSIBLE AMENDMENT OF THE RFP BEFORE RECEIPT OF INITIAL OFFERS.

IN ANY EVENT, THE UNIVAC SPARE PARTS PROPOSAL WAS BROUGHT UP BY NASA IN THE WRITTEN AND ORAL DISCUSSIONS. UNIVAC WAS REQUESTED TO INDICATE AND EXPLAIN ALL VARIANCES FROM THE RFP SPARE PARTS FORMULA. UNIVAC'S RESPONSES MAKE CLEAR THAT ITS SPARE PARTS PROPOSAL WAS NOT BASED ON THE RFP FORMULA, BUT, RATHER, UPON ITS OWN INVENTORY METHODS AND EXPERIENCE, WHICH IT BELIEVED TO BE AN ADEQUATE AND COST EFFECTIVE PROCEDURE. MOREOVER, UNIVAC STATED THAT IT WAS NOT POSSIBLE FOR IT TO COMPLY WITH THE RFP FORMULA. THE REALISM OF THE RFP FORMULA ITSELF, OR NASA'S EVALUATION OF THE DEFICIENCY OF UNIVAC'S PROPOSAL, WAS NOT DISCUSSED. IN THIS REGARD, NASA STATES THAT THE UNIVAC SPARE PARTS PROPOSAL WAS CONSIDERED TO BE AN OUTRIGHT DEFICIENCY, NOT A MATTER REQUIRING CLARIFICATION, AND IN ACCORDANCE WITH NASA PRD 70-15, SECTION III.E(2), THE DEFICIENCY WAS NOT POINTED OUT TO UNIVAC. NASA, OF COURSE, DID NOT REOPEN DISCUSSIONS ON THIS POINT OR AMEND THE RFP FORMULA BEFORE RECEIPT OF REVISED OFFERS.

UNDER THESE CIRCUMSTANCES, WE BELIEVE THERE WAS A CLEAR DISAGREEMENT BETWEEN THE PARTIES AS TO THE ADEQUACY OF THE RFP FORMULA, AND THAT EACH PARTY UNDERSTOOD THE OTHER'S POSITION AT THE CLOSE OF DISCUSSIONS. THE FACT THAT NASA DID NOT TAKE STEPS TO ACCEDE TO UNIVAC'S OBJECTION IS ANALOGOUS TO THE AGENCY INACTION IN MATTER OF CESSNA AIRCRAFT COMPANY ET AL., 54 COMP. GEN. 97 (1974). UNDER THE CIRCUMSTANCES OF THAT CASE, THE PROTESTER WAS CHARGED WITH NOTICE OF "ADVERSE AGENCY ACTION" AFTER A REASONABLE TIME HAD ELAPSED AND THE AGENCY HAD NOT REPLIED TO OR SUSTAINED ITS ORAL PROTEST. HERE, WE BELIEVE UNIVAC WAS ON NOTICE AT THE TIME SPECIFIED FOR RECEIPT OF REVISED OFFERS, FEBRUARY 27, 1974, THAT NASA HAD NOT ACCEDED TO ITS OBJECTION. THE OBJECTION TO THE REALISM OF RFP SPARE PARTS FORMULA SHOULD HAVE BEEN PROTESTED NOT LATER THAN THAT TIME; AN OBJECTION TO LACK OF MEANINGFUL DISCUSSIONS AND ANY RESULTING COST ADJUSTMENT SHOULD HAVE BEEN PROTESTED NOT LATER THAN 5 WORKING DAYS AFTER FEBRUARY 27, 1974. SEE SECTION 20.2(A) OF OUR INTERIM BID PROTEST PROCEDURES AND STANDARDS, 4 C.F.R. SEC. 20.1, ET SEQ. (1974). AS UNIVAC'S PROTEST WAS NOT FILED UNTIL JUNE 10, 1974, ITS OBJECTIONS ARE OBVIOUSLY UNTIMELY AND NOT FOR CONSIDERATION.

CONCERNING THE FIT PROVISION, THE PROTESTER'S OBJECTION AS STATED IN ITS COMMENTS IS THAT AN $8,685 NASA COST ADJUSTMENT WAS UNJUSTIFIED; APPARENTLY, UNIVAC BELIEVES THAT ITS PROPOSED FITP ADEQUATELY MET THE RFP REQUIREMENT. THE FIT PROVISION, SUPRA, APPEARS TO CALL FOR THE DEVELOPMENT OF A TESTING PROCEDURE COVERING BOTH EQUIPMENT AND SOFTWARE. NASA FOUND THAT UNIVAC'S PROPOSAL HAD OMITTED SIGNIFICANT PORTIONS OF THE TELOPS REQUIREMENT FROM THE FIT, INCLUDING AN 1106 MULTI-PROCESSOR CONFIGURATION AND FIVE OF THE EIGHT PI 190 READ/WRITE UNITS. IN THE DISCUSSIONS, NASA ASKED UNIVAC WHAT EQUIPMENT CONFIGURATION FOR TELOPS WOULD BE ASSEMBLED AND TESTED BEFORE SHIPMENT TO GODDARD SPACE FLIGHT CENTER AND RECEIVED UNIVAC'S ANSWERS. HOWEVER, SINCE NASA CONSIDERED UNIVAC'S OMISSION OF THE ABOVE-LISTED EQUIPMENT FROM THE FIT TO BE AN OUTRIGHT DEFICIENCY, IT DID NOT POINT OUT THE DEFICIENCY DURING DISCUSSIONS.

FROM THE FOREGOING, IT DOES NOT CLEARLY APPEAR THAT UNIVAC TOOK EXCEPTION TO THE FIT PROVISION AS SUCH; RATHER, THERE MAY HAVE BEEN A DIFFERENCE IN INTERPRETATION OF THE PROVISION BY THE PARTIES AS TO THE QUALITY AND SCOPE OF THE TESTING REQUIRED. WE CANNOT FIND HERE A CLEAR DISAGREEMENT BY THE PARTIES SUCH THAT INACTION BY THE AGENCY WOULD PLACE THE OFFEROR ON NOTICE THAT IT MUST TIMELY FILE A PROTEST. THEREFORE, WE WILL CONSIDER THIS ISSUE ON THE MERITS.

WE BELIEVE IT IS PRIMARILY THE RESPONSIBILITY OF NASA TO JUDGE WHETHER UNIVAC'S PROPOSED FITP MET THE RFP'S REQUIREMENTS. THE PROTESTER IN ITS COMMENTS HAS NOT SPECIFICALLY REFUTED NASA'S CONCLUSION THAT THE SIGNIFICANT OMISSIONS OF EQUIPMENT FROM THE FIT CONSTITUTED AN OUTRIGHT DEFICIENCY. BUT EVEN ACCEPTING UNIVAC'S POSITION THAT THERE WAS NO DEFICIENCY, AND THAT THE $8,685 COST ADJUSTMENT WAS IMPROPER, THE IMPACT ON THE OVERALL COST FIGURES IS TRIVIAL. AS NASA HAS POINTED OUT, UNIVAC'S PROPOSED COSTS (EXCLUSIVE OF FEE) OF $8,686 MILLION WERE LOWER THAN IBM'S THOUGH THE DIFFERENCE WAS MINIMAL. IBM'S TOTAL COST PROPOSAL (INCLUDING FEE AND UPWARD COST ADJUSTMENT) WAS LOWER THAN UNIVAC'S TOTAL COST PROPOSAL EVEN WITHOUT ANY ADJUSTMENT.

IN ITS COMMENTS, UNIVAC ALSO RASIES QUESTIONS CONCERNING THE EVALUATION OF THE IBM PROPOSAL. UNIVAC CONTENDS THAT THE IBM PROPOSAL FAILED TO CONTAIN A SPARE PARTS LIST, AND THAT IBM'S COST WAS NOT ADJUSTED UPWARD TO INCLUDE NECESSARY SPARES. NOTING THAT A $171,613 UPWARD COST ADJUSTMENT WAS MADE TO ITS OWN PROPOSAL TO CORRECT THE LEVEL OF SPARES, UNIVAC REQUESTS AN EXPLANATION OF THIS INCONSISTENCY.

INITIALLY, WE NOTE THAT THE IBM PROPOSAL DOES CONTAIN A SPARE PARTS LIST. AS WITH UNIVAC, IBM'S PROPOSED LEVEL OF SPARES DID NOT MEET THE RFP'S SPARE PARTS FORMULA AND WAS CONSIDERED A CORRECTABLE WEAKNESS. THE SEB DID NOT ADJUST IBM'S COSTS BECAUSE OF ITS DEFICIENT LEVEL OF SPARES, JUDGING THAT IT WOULD NOT SIGNIFICANTLY IMPACT THE IBM COST PROPOSAL. DO NOT BELIEVE THAT THE ALLEGED INCONSISTENCY SUGGESTED BY UNIVAC MANDATES, IN ITSELF, A CONCLUSION THAT THE EVALUATION OF IBM'S COSTS IN THIS REGARD WAS IMPROPER. AS NASA HAS POINTED OUT, THE SEB WAS REQUIRED TO ESTIMATE THE APPROXIMATE COST IMPACT RESULTING FROM THE ELIMINATION OF CORRECTABLE WEAKNESSES IN PROPOSALS. THE FACT THAT THE SEB JUDGED THAT A DEFICIENCY IN ONE PROPOSAL REQUIRED AN UPWARD ADJUSTMENT, WHILE A DEFICIENCY IN ANOTHER PROPOSAL DID NOT SIGNIFICANTLY IMPACT ITS COST, DOES NOT PROVE THAT THE EVALUATION OF EITHER WAS IMPROPER. EVEN ACCEPTING, ARGUENDO, THE POSITION THAT IBM'S COSTS SHOULD HAVE BEEN ADJUSTED IN THE SAME MANNER AS WERE UNIVAC'S, IT DOES NOT APPEAR THAT THE RELATIVE RANKING OF THE COST PROPOSALS WOULD HAVE BEEN AFFECTED.

UNIVAC'S INITIAL LETTER OF PROTEST RAISED SEVERAL ISSUES WHICH THE PROTESTER DID NOT LATER ASSERT IN ITS RESPONSE TO THE ADMINISTRATIVE REPORT. THESE ARE, BRIEFLY, THAT UNIVAC'S OFFER WAS ESPECIALLY STRONG IN THE TWO MOST CRITICAL ASPECTS OF THE SYSTEM, FAIL SOFT AND DATA CAPTURE; THAT NASA HAD AN IMPROPER PREFERENCE FOR A SINGLE SUPPLIER OF ALL ITEMS AS OPPOSED TO A SUPPLIER UTILIZING SMALL BUSINESS SUBCONTRACTORS; AND THAT THE RFP SHOULD HAVE ASSIGNED WEIGHTS TO "DESIRABLE" TELOPS FEATURES. NASA'S REPORT ASSERTS THAT THE SYSTEM'S ASPECTS CITED BY UNIVAC DO NOT CORRECTLY REFLECT THE ACTUAL TERMS OF THE RFP, AND THAT THE SELECTION WAS NOT INFLUENCED BY ANY CONSIDERATION AGAINST SMALL BUSINESS SUBCONTRACTING. WE BELIEVE THE ADMINISTRATIVE REPORT IN THESE RESPECTS ADEQUATELY RESPONDS TO THE PROTEST. IN ADDITION, AS NASA POINTS OUT, THE CONTENTION CONCERNING ASSIGNED WEIGHTS FOR DESIRABLE TELOPS FEATURES IS UNTIMELY AND NOT FOR CONSIDERATION, SINCE PROTESTS AGAINST APPARENT SOLICITATION IMPROPRIETIES MUST BE FILED PRIOR TO THE CLOSING DATE FOR RECEIPT OF PROPOSALS. 4 C.F.R. SEC. 20.2(A) (1974).

IN ITS COMMENTS, UNIVAC HAS ALSO EXPRESSED CONCERN ABOUT THE FACT THAT NASA'S ADMINISTRATIVE REPORT WAS FURNISHED TO OUR OFFICE APPROXIMATELY 63 WORKING DAYS AFTER THE PROTEST WAS FILED. IN THIS REGARD, UNIVAC POINTS OUT THAT OUR BID PROTEST PROCEDURES AND STANDARDS PROVIDE THAT AGENCY REPORTS SHALL BE SUBMITTED WITHIN 20 WORKING DAYS.

THE PREAMBLE TO OUR PROCEDURES AND STANDARDS NOTES THAT OUR OFFICE HAS NO AUTHORITY TO IMPOSE TIME LIMITS ON CONTRACTING AGENCIES FOR REPORTS ON PROTESTS. HOWEVER, OUR OFFICE RECOGNIZES THE PROBLEMS WHICH CAN OCCUR DUE TO DELAYS IN FURNISHING REPORTS, AND AGENCY DEVELOPMENT OF THE REPORT IS CLOSELY MONITORED IN AN ATTEMPT TO MINIMIZE SUCH PROBLEMS. IN GENERAL, WE HAVE HELD THAT WHILE AN AGENCY'S DELAY BEYOND 20 DAYS IN FURNISHING A REPORT DOES NOT JUSTIFY REJECTION OF THE REPORT, WHERE THE DELAY APPEARS TO BE UNREASONABLE OUR OFFICE WILL CALL THE MATTER TO THE ATTENTION OF APPROPRIATE AGENCY OFFICIALS. SEE MATTER OF LEASCO INFORMATION PRODUCTS, INC., ET AL., 53 COMP. GEN. 932 (1974), AND DECISIONS CITED THEREIN. THE PRESENT CASE, THERE WAS A SUBSTANTIAL DELAY BEYOND 20 DAYS IN FURNISHING THE REPORT. HOWEVER, A NUMBER OF ISSUES WERE RAISED BY THE PROTESTER, AND THE SUPPORTING AND BACKGROUND DOCUMENTATION IS VOLUMINOUS. UNDER THE CIRCUMSTANCES, THOUGH WE BELIEVE THAT THE REPORT SHOULD HAVE BEEN FURNISHED IN A MORE TIMELY MANNER, WE CANNOT SAY THAT THE DELAY WAS UNREASONABLE; MOREOVER, THE AGENCY HAS NOT BENEFITTED BY THE DELAY, AS IT HAS CONTINUED TO WITHHOLD AN AWARD DURING THE PENDENCY OF THE PROTEST.

LASTLY, THE PROTESTER HAS RAISED A QUESTION AS TO WHETHER NASA POSSESSES THE AUTHORITY TO ENTER INTO THE CONTEMPLATED CONTRACT. UNIVAC'S VIEW IS THAT SINCE THE SOLICITED SUPPLIES ARE COMMERCIALLY AVAILABLE, OFF-THE- SHELF HARDWARE AND SOFTWARE, NASA SHOULD HAVE APPLIED TO THE GENERAL SERVICES ADMINISTRATION (GSA) FOR A DELEGATION OF PROCUREMENT AUTHORITY UNDER THE FEDERAL PROPERTY MANAGEMENT REGULATIONS (FPMR) WHICH GOVERN THE PROCUREMENT OF ADPE (FPMR 101 32.4). NASA DID NOT MAKE SUCH AN APPLICATION TO GSA PRIOR TO THE ISSUANCE OF THE RFP.

OUR OFFICE BROUGHT THIS MATTER TO GSA'S ATTENTION, WHICH CONDUCTED A DE NOVO REVIEW AS TO WHETHER THE PRESENT PROCUREMENT FALLS WITHIN FPMR 101- 32.4. GSA CONCLUDED THAT A DELEGATION OF PROCUREMENT AUTHORITY WAS NOT REQUIRED. UNIVAC CONTENDS, IN REPLY, THAT NASA WAS, IN ANY EVENT, OBLIGATED TO AT LEAST SUBMIT THE QUESTION TO GSA PRIOR TO THE ISSUANCE OF THE RFP, AND THAT IT FAILED TO FULFILL THIS OBLIGATION. ASSUMING, ARGUENDO, THAT THIS IS THE CASE, WE NEVERTHELESS BELIEVE THAT IN VIEW OF GSA'S SUBSEQUENT DETERMINATION THAT NO DELEGATION WAS REQUIRED, THE ENTIRE ISSUE HAS BEEN RENDERED ACADEMIC.