B-200605, JUN 24, 1981

B-200605, JUN 24, 1981

DIGEST: 1. FEDERAL PROCUREMENT REGULATIONS DO NOT APPLY PER SE TO PRIME OPERATING CONTRACTOR OF DEPARTMENT OF ENERGY; RATHER, PRIME CONTRACTOR MUST CONDUCT PROCUREMENTS ACCORDING TO TERMS OF CONTRACT WITH AGENCY AND ITS OWN PROCEDURES, APPROVED BY AGENCY, AND CONFORM TO FUNDAMENTAL PRINCIPLES KNOWN AS FEDERAL NORM. 2. WHEN PROTESTER HAS NOT SHOWN THAT REQUIREMENT FOR DEMONSTRATION OF FULLY-DEVELOPED SYSTEM, SIX WEEKS AFTER SUBMISSION OF PROPOSALS, IS UNREASONABLE OR EXCEEDS PROCURING ACTIVITY'S MINIMUM NEEDS, REQUIREMENT IS NOT UNDULY RESTRICTIVE, EVEN IF ONLY ONE OFFEROR CAN MEET IT. 3. WHEN PROCURING ACTIVITY DOES NOT WISH TO ESTABLISH ONE SET DESIGN AS BASIS FOR COMPETITION, IT MAY IDENTIFY REQUIREMENTS IN TERMS OF PERFORMANCE; IN SUCH CASES, OFFERORS ARE EXPECTED TO EXERCISE INVENTIVENESS AND INGENUITY IN DEVELOPING THEIR OWN INDIVIDUAL DESIGNS. 4. IN PROCUREMENT SUBJECT TO FEDERAL NORM, SOLICITATION MUST GIVE REASONABLY CLEAR INDICATION OF RELATIVE IMPORTANCE OF COST VS. TECHNICAL FACTORS; HOWEVER, PRECISE NUMERICAL WEIGHT OF SUBFACTORS NEED NOT BE DISCLOSED.

CENTENNIAL COMPUTER PRODUCTS, INC.:

CENTENNIAL COMPUTER PRODUCTS, INC. PROTESTS THE AWARD OF A CONTRACT BY SANDIA CORPORATION, A DEPARTMENT OF ENERGY (DOE) PRIME CONTRACTOR WHICH OPERATES SANDIA NATIONAL LABORATORIES, ALBUQUERQUE, NEW MEXICO. FOR THE REASONS OUTLINED BELOW, WE ARE DENYING THE PROTEST.

BACKGROUND:

ACCORDING TO THE REQUEST FOR QUOTATIONS, NO. 56-1908, DATED JULY 11, 1980, SANDIA IS IN THE PROCESS OF EXPANDING ITS SCIENTIFIC COMPUTER NETWORK. THE INITIAL PHASE, COVERED BY THIS PROCUREMENT, INCLUDES (1) AN INTEGRATED FILE STORAGE FACILITY AND (2) A DATA NETWORK WHICH WILL CONNECT THAT FACILITY WITH TWO MAJOR CONTROL DATA CORPORATION (CDC) COMPUTERS NOW AT SANDIA AND WITH FUTURE HOST COMPUTERS. THIS EQUIPMENT AND SOFTWARE IS COLLECTIVELY REFERRED TO IN THE SOLICITATION AS "THE SYSTEM." IT WAS GRAPHICALLY ILLUSTRATED BY SANDIA AS FOLLOWS:

CDC CDC FUTURE

7600 CYBER 76 HOST

COMPUTERS DATA NETWORK

INTEGRATED FILE

STORAGE

THE SYSTEM ALSO WAS TO INCLUDE AN INTERFACE, OR TRANSLATOR, TO PERMIT COMMUNICATION BETWEEN THE DATA NETWORK AND THE CDC HOST COMPUTERS IF THE OFFERED "LANGUAGE," OR OPERATING SYSTEM, REQUIRED THE TRANSLATION. THESE COMPUTERS USE SCOPE, WHICH IS A FUNDAMENTAL COMPUTER "LANGUAGE" PROPRIETARY TO CDC. ACCORDING TO SANDIA, OTHER VENDORS WOULD NOT NECESSARILY USE SCOPE IN THEIR PROPOSED SYSTEMS; THUS, A SCOPE-TO-DATA- NETWORK INTERFACE MIGHT HAVE BEEN NEEDED.

CENTENNIAL DID NOT SUBMIT A PROPOSAL, BUT INSTEAD PROTESTED THAT IT WAS PREVENTED FROM DOING SO BECAUSE THE SOLICITATION WAS TOO VAGUE, PARTICULARLY AS TO THE DESIGN OF THE SCOPE-TO-DATA-NETWORK INTERFACE. CENTENNIAL ALSO OBJECTED TO THE MANNER IN WHICH PROPOSALS WOULD BE EVALUATED AND ALLEGED THAT THE DEMONSTRATION REQUIREMENT FOR PROPOSED SYSTEMS WAS UNDULY RESTRICTIVE.

DURING THE PENDENCY OF THE PROTEST, SANDIA AWARDED A CONTRACT TO MASSTOR SYSTEMS CORPORATION, THE ONLY OFFEROR.

STANDARD OF REVIEW:

AT THE OUTSET, WE NOTE THAT THE FEDERAL PROCUREMENT REGULATIONS DO NOT APPLY PER SE TO THIS PROCUREMENT. RATHER, SANDIA, ACTING BY AND FOR THE GOVERNMENT, IS REQUIRED TO CONDUCT ITS PROCUREMENTS ACCORDING TO THE TERMS OF ITS CONTRACT WITH DOE AND ITS OWN PROCEDURES, APPROVED BY THE AGENCY, AND TO CONFORM TO CERTAIN FUNDAMENTAL PRINCIPLES OF FEDERAL PROCUREMENT KNOWN AS THE FEDERAL NORM. SEE PIASECKI AIRCRAFT CORPORATION, B-190178, JULY 6, 1978, 78-2 CPD 10.

DEMONSTRATION REQUIREMENT:

WHILE THE PARTIES HAVE ARGUED AT GREAT LENGTH ABOUT SPECIFICATIONS AND EVALUATION PROCEDURES, WE BELIEVE CENTENNIAL'S INABILITY TO SATISFY THE DEMONSTRATION REQUIREMENT INCLUDED IN THE SOLICITATION IS DISPOSITIVE OF THE PROTEST.

THE SOLICITATION REQUIRED THAT THE PROPOSED SYSTEM, EXCEPT FOR THE SCOPE- TO-DATA-NETWORK INTERFACE (WHICH APPARENTLY WILL NOT BE DEVELOPED UNTIL WELL INTO THE CONTRACT PERIOD), BE DEMONSTRATED WITHIN SIX WEEKS OF SUBMISSION OF PROPOSALS. CENTENNIAL ALLEGES THAT THIS REQUIREMENT UNDULY RESTRICTED COMPETITION, PRESUMABLY BECAUSE THE TIME WAS TOO SHORT, AND THAT THE DEMONSTRATION DID NOT ACCOMPLISH ITS STATED PURPOSE, SINCE IT DID NOT INCLUDE ALL ELEMENTS OF THE PROPOSED SYSTEM.

THE REAL ISSUE HERE, HIGHLIGHTED DURING A CONFERENCE AT OUR OFFICE AND IN POST-CONFERENCE SUBMISSIONS, APPEARS TO BE THAT SANDIA SOUGHT A SYSTEM WHICH WAS FULLY DEVELOPED, WHILE ANY SYSTEM WHICH CENTENNIAL MIGHT HAVE PROPOSED WAS STILL IN THE DEVELOPMENTAL STAGE. SANDIA'S NEEDS WERE MADE CLEAR IN THE SOLICITATION AND IN AN EXTENDED SERIES OF ANSWERS TO QUESTIONS FROM PROSPECTIVE OFFERORS IN WHICH SANDIA STATED, FOR EXAMPLE, THAT ALL HARDWARE AND SOFTWARE COMPONENTS OF THE PROPOSED INTEGRATED FILE STORAGE FACILITY MUST BE COMMERCIALLY AVAILABLE. IT DEFINED COMMERCIAL AVAILABILITY IN TERMS OF CONTINUING VENDOR SUPPORT THROUGH ENHANCEMENT AND CORRECTIONS. IN ADDITION, SANDIA EMPHASIZED THE "TURN-KEY" NATURE OF THE PROCUREMENT IN THE SOLICITATION AND DURING THE PROTEST CONFERENCE.

CENTENNIAL ARGUES THAT COMMERCIALLY AVAILABLE, AS DEFINED BY SANDIA, AND "TURNKEY" DO NOT NECESSARILY MEAN OFF-THE-SHELF. WE DISAGREE. IN OUR OPINION, ONLY AN EXISTING SYSTEM COULD BE ENHANCED OR CORRECTED, AND ONLY AN EXISTING, OR OFF-THE-SHELF, SYSTEM COULD BE DEMONSTRATED WITHIN SIX WEEKS OF SUBMISSION OF PROPOSALS. DURING THE CONFERENCE IT BECAME CLEAR THAT CENTENNIAL DID NOT HAVE SUCH A SYSTEM. FOR EXAMPLE, OFFERORS WERE REQUIRED TO DEMONSTRATE THAT THEIR SYSTEMS WERE CAPABLE OF TRANSMITTING DATA AT THE RATE OF

CENTENNIAL HAS NEITHER SHOWN NOR ATTEMPTED TO SHOW TRANSMISSION RATE OF MORE THAN ONE MEGABIT PER SECOND. FRANKLY ADMITTED THAT IT COULD NOT HAVE DEMONSTRATED A TWO DATA NETWORK CONNECTIONS. CENTENNIAL'S REPRESENTATIVE AT LEAST 50 MEGABITS PER SECOND, ERROR FREE, BETWEEN ANY THAT SANDIA'S REQUIREMENT FOR DEMONSTRATION OF A FULLY-DEVELOPED SYSTEM WITHIN THE TIME SPECIFIED WAS UNREASONABLE OR EXCEEDED ITS MINIMUM NEEDS. WE THEREFORE DO NOT FIND IT UNDULY RESTRICTIVE, EVEN IF ONLY ONE OFFEROR COULD MEET THE REQUIREMENT. 45 COMP.GEN. 365 (1965); SEE ALSO J. S. TOOL CO., INC., B-193147, MARCH 7, 1979, 79-1 CPD 159.

OTHER BASES OF PROTEST:

WITH REGARD TO CENTENNIAL'S OTHER BASES OF PROTEST - VAGUE SPECIFICATIONS AND UNDISCLOSED EVALUATION CRITERIA - WE FIND THAT SANDIA SOUGHT A STATE- OF-THE-ART SYSTEM AND DEFINED ITS NEEDS IN TERMS OF PERFORMANCE. CENTENNIAL, HOWEVER, SOUGHT DIRECTION AS TO WHETHER, FOR EXAMPLE, THE DATA NETWORK SOFTWARE WAS TO BE PART OF THE SCOPE-TO DATA-NETWORK INTERFACE, AS IN THE SYSTEM IT HAS BEEN DEVELOPING, OR WHETHER THIS SOFTWARE COULD BE INTEGRAL TO THE DATA NETWORK HARDWARE, AS IN THE SYSTEM MARKETED BY MASSTOR. AT THE CONFERENCE AT OUR OFFICE, CENTENNIAL APPARENTLY LEARNED FOR THE FIRST TIME THAT EITHER OF THESE APPROACHES WOULD HAVE BEEN ACCEPTABLE TO SANDIA.

IN OUR OPINION, SANDIA WAS NOT REQUIRED TO ESTABLISH A SINGLE DESIGN AS A BASIS FOR COMPETITION. IT DESCRIBED ITS CURRENT AND FUTURE OPERATING ENVIRONMENTS, LISTED THE OBJECTIVES OF ITS SCIENTIFIC COMPUTER NETWORK, AND EXPECTED OFFERORS TO EXERCISE INVENTIVENESS AND INGENUITY IN DEVELOPING THEIR OWN INDIVIDUAL DESIGNS. WE HAVE NOT FOUND THIS APPROACH LEGALLY OBJECTIONABLE, EITHER UNDER THE FEDERAL NORM OR IN DIRECT FEDERAL PROCUREMENT. SEE, FOR EXAMPLE, COMPLETE IRRIGATION, INC., B-187423, NOVEMBER 21, 1977, 77-2 CPD 387, INVOLVING A GRANTEE PROCUREMENT, AND AUTO -TROL CORPORATION, B-192025, SEPTEMBER 5, 1978, 78-2 CPD 171, INVOLVING A DIRECT FEDERAL PROCUREMENT OF AUTOMATIC DATA PROCESSING EQUIPMENT. CENTENNIAL'S STATEMENT THAT FIVE ALTERNATE DESIGNS, VARYING ENORMOUSLY IN COST AND CAPABILITY, CONCEIVABLY WOULD HAVE MET SANDIA'S SPECIFICATIONS FOR THE SCOPE-TO DATA-NETWORK INTERFACE DOES NOT NEGATE THE VALIDITY OF THE PERFORMANCE SPECIFICATIONS. OFFERORS, INCLUDING CENTENNIAL, COULD CHOOSE TO OFFER ANY ONE OR MORE OF THOSE DESIGNS, BASED ON THEIR OWN BUSINESS JUDGMENT. SEE AMPEX CORPORATION, B-190789, MAY 10, 1978, 78-1 CPD 353.

WITH REGARD TO EVALUATION PROCEDURES, SANDIA'S POINT SCORING SYSTEM WAS SET FORTH IN A TABLE WHICH INCLUDED MAXIMUM POINTS FOR FIVE MANDATORY AND THREE DESIRABLE TECHNICAL FACTORS, PLUS A COST FACTOR BASED ON A SEVEN- YEAR LIFE CYCLE. APPROXIMATELY 30 SUBFACTORS ALSO WERE LISTED IN DESCENDING ORDER OF IMPORTANCE. THE SOLICITATION INDICATED THAT POINTS, UP TO THE STATED MAXIMUM, WOULD BE AWARDED FOR SIGNIFICANT CAPABILITY BEYOND EACH MANDATORY REQUIREMENT, WITH THE BEST PROPOSAL RECEIVING THE MOST POINTS. A PROPOSAL WHICH MET BUT DID NOT EXCEED A MANDATORY REQUIREMENT WOULD RECEIVE ZERO POINTS.

CENTENNIAL ARGUES THAT THIS EVALUATION SCHEME WAS IMPROPER, SINCE SANDIA DID NOT DISCLOSE HOW IT WOULD DETERMINE WHAT CONSTITUTED SIGNIFICANT CAPABILITY BEYOND A MANDATORY REQUIREMENT, BUT MERELY STATED THAT IT WOULD BE THE SOLE JUDGE OF WHAT WAS BEST. CENTENNIAL ALSO CONTENDS THAT SEVERAL MANDATORY REQUIREMENTS, SPECIFICALLY COMPLETENESS, AUTOMATIC OPERATION, AND INDEPENDENCE, COULD NOT BE EXCEEDED, I.E., A PROPOSED SYSTEM WOULD EITHER BE COMPLETE OR INCOMPLETE, AND COULD NOT BE MORE THAN COMPLETE. CENTENNIAL ARGUES THAT OFFERORS COULD NOT RECEIVE POINTS FOR THESE SUBFACTORS, AND THAT THE RELATIVE WEIGHTS SET FORTH IN THE SOLICITATION CONSEQUENTLY WERE NOT ACCURATE. IN ADDITION, CENTENNIAL CONTENDS THAT THE COST OF MODIFYING USER PROGRAMS TO MAKE THEM COMPATIBLE WITH THE PROPOSED SYSTEM COULD NOT BE ACCURATELY ESTIMATED BEFORE AWARD AND THAT THIS ALSO DISTORTED THE EVALUATION SCHEME.

IN OUR OPINION, SANDIA'S EVALUATION SCHEME CONFORMS TO THE FEDERAL NORM. SANDIA WAS REQUIRED TO GIVE A REASONABLY CLEAR INDICATION OF THE RELATIVE IMPORTANCE WHICH IT ATTACHED TO COST VS. TECHNICAL FACTORS, COMPLETE IRRIGATION, INC., SUPRA, AND IT DID SO, SINCE COST WAS ASSIGNED 340 OF 1099 POSSIBLE POINTS, WITH THE REMAINDER GOING TO TECHNICAL FACTORS. FOR SUBFACTORS, THERE IS NO REQUIREMENT, EVEN IN DIRECT FEDERAL PROCUREMENT, THAT PRECISE NUMERICAL WEIGHTS BE DISCLOSED. PIASECKI AIRCRAFT CORPORATION, SUPRA, AND CASES CITED THEREIN.

AS FOR SANDIA'S BEING THE SOLE JUDGE OF WHAT WAS BEST, WE AGREE WITH SANDIA THAT WHEN PERFORMANCE SPECIFICATIONS ARE USED, IT WOULD BE INAPPROPRIATE, PRIOR TO EVALUATION, TO ASSIGN POINTS TO A PARTICULAR DESIGN. WITH REGARD TO THE SUBFACTORS ABOUT WHICH CENTENNIAL COMPLAINS, IT APPEARS THEY HAD AN INSIGNIFICANT IMPACT ON EVALUATION SINCE, AS SANDIA POINTS OUT, THEY INVOLVED ONLY 62 OF 1099 POSSIBLE POINTS. COSTS OF MODIFYING USER PROGRAMS REPRESENTED LESS THAN ONE PERCENT OF TOTAL LIFE CYCLE COSTS, AND IN OUR OPINION, ALSO WERE INSIGNIFICANT.

IN ANY EVENT, IN VIEW OF OUR CONCLUSION THAT CENTENNIAL COULD NOT HAVE MET THE DEMONSTRATION REQUIREMENT, IT DOES NOT APPEAR THAT ANY CHANGES IN SANDIA'S SPECIFICATIONS OR THE EVALUATION PROCEDURES WOULD HAVE ENABLED CENTENNIAL TO SUBMIT A TECHNICALLY ACCEPTABLE PROPOSAL. SINCE CENTENNIAL'S SYSTEM WAS NOT YET FULLY DEVELOPED, SANDIA WOULD NOT HAVE BEEN ABLE TO DETERMINE WHETHER IT MET MANDATORY REQUIREMENTS, REGARDLESS OF THE DESIGN PHILOSOPHY CENTENNIAL EMPLOYED. ACCORDINGLY, CENTENNIAL WAS NOT PREJUDICED BY ANY OF THE ALLEGED SOLICITATION DEFICIENCIES. SEE HONEYWELL INFORMATION SYSTEMS, INC., B-191212, JULY 14, 1978, 78-2 CPD 39.

THE PROTEST IS DENIED.