B-200938(1), JUL 7, 1981

B-200938(1): Jul 7, 1981

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PROTESTER HAS BURDEN OF PROVING BIAS ON PART OF PROCUREMENT OFFICIALS AND PREJUDICIAL MOTIVES THUS WILL NOT BE ATTRIBUTED ON BASIS OF INFERENCE OR SUPPOSITION. 2. CANCELLATION OF RFP FOR LEASE AND MAINTENANCE OF COMPUTER PROGRAM WAS REASONABLE WHERE ONLY OFFER EXCEEDED COST TO AGENCY OF LEASING COMPUTER PROGRAM FROM GOVERNMENT SOURCE PLUS AGENCY ESTIMATE FOR IN-HOUSE MAINTENANCE. WAS FOR THE LEASE AND MAINTENANCE OF A NATIONAL AERONAUTICS AND SPACE ADMINISTRATION STRUCTURAL ANALYSIS (NASTRAN) COMPUTER PROGRAM. BIAS THE PROTESTER ALLEGES THAT THE PROCUREMENT WAS SET ASIDE FOR SMALL BUSINESS TO INSURE THAT MACNEAL. WHICH THE AIR FORCE BELIEVED WAS A SMALL BUSINESS. WOULD HAVE LITTLE COMPETITION.

B-200938(1), JUL 7, 1981

DIGEST: 1. PROTESTER HAS BURDEN OF PROVING BIAS ON PART OF PROCUREMENT OFFICIALS AND PREJUDICIAL MOTIVES THUS WILL NOT BE ATTRIBUTED ON BASIS OF INFERENCE OR SUPPOSITION. 2. CANCELLATION OF RFP FOR LEASE AND MAINTENANCE OF COMPUTER PROGRAM WAS REASONABLE WHERE ONLY OFFER EXCEEDED COST TO AGENCY OF LEASING COMPUTER PROGRAM FROM GOVERNMENT SOURCE PLUS AGENCY ESTIMATE FOR IN-HOUSE MAINTENANCE.

UNIVERSAL ANALYTICS, INC.:

UNIVERSAL ANALYTICS, INC. (UNIVERSAL) PROTESTS THE AIR FORCE'S CANCELLATION OF REQUEST FOR PROPOSALS (RFP) F08635-80-R-0030. THE RFP, A 100 PERCENT SMALL BUSINESS SET-ASIDE, WAS FOR THE LEASE AND MAINTENANCE OF A NATIONAL AERONAUTICS AND SPACE ADMINISTRATION STRUCTURAL ANALYSIS (NASTRAN) COMPUTER PROGRAM.

BASED ON THE COMPETITION, THE AIR FORCE HAD INTENDED TO AWARD A CONTRACT TO MACNEAL-SCHWENDLER CORPORATION (MACNEAL), THE ONLY OTHER OFFEROR FOR THIS PROCUREMENT. HOWEVER, THE SMALL BUSINESS ADMINISTRATION (SBA) DETERMINED MACNEAL TO BE "OTHER THAN A SMALL BUSINESS" AND, THEREFORE, INELIGIBLE FOR AWARD. SUBSEQUENT TO THE SBA DETERMINATION, THE AIR FORCE CANCELED THE RFP BECAUSE IT DETERMINED THAT IT COULD LEASE A NASTRAN PROGRAM MORE ADVANCED THAN THE ONE OFFERED BY UNIVERSAL FROM THE COMPUTER SOFTWARE MANAGEMENT AND INFORMATION CENTER (COSMIC) AT THE UNIVERSITY OF GEORGIA, AND MAINTAIN IT IN-HOUSE, AT A LOWER COST THAN UNIVERSAL PROPOSED. COSMIC ACTS AS NASA'S AGENT IN DISTRIBUTING NASTRAN PROGRAMS AND PROGRAM UPDATES ACCORDING TO AGREEMENTS BETWEEN NASA AND OTHER AGENCIES.

UNIVERSAL CONTENDS THAT THE SEQUENCE OF EVENTS IN THIS PROCUREMENT EVIDENCES THE AIR FORCE'S PREAWARD BIAS FAVORING MACNEAL AND THAT THE AIR FORCE CANCELED THE SOLICITATION ONLY BECAUSE THE SBA DETERMINATION PRECLUDED AN AWARD TO THAT FIRM. UNIVERSAL ALSO QUESTIONS THE AIR FORCE'S ASSESSMENT OF THE COST OF LEASING AND MAINTAINING COSMIC'S PROGAM.

BIAS

THE PROTESTER ALLEGES THAT THE PROCUREMENT WAS SET ASIDE FOR SMALL BUSINESS TO INSURE THAT MACNEAL, WHICH THE AIR FORCE BELIEVED WAS A SMALL BUSINESS, WOULD HAVE LITTLE COMPETITION, AND THAT THE AIR FORCE AMENDED THE RFP AFTER INITIAL PROPOSALS WERE SUBMITTED ONLY TO REQUEST COST QUOTATIONS IN A FORMAT COMPATIBLE WITH THE MACNEAL FEE SCHEDULE, WHICH IS BASED ON A COMPUTER USAGE SURCHARGE. UNIVERSAL ALSO SUGGESTS THAT THE AIR FORCE WAS AWARE OF THE AVAILABILITY OF THE COSMIC NASTRAN PROGRAM LONG BEFORE MACNEAL WAS SELECTED FOR AWARD BUT ONLY CANCELED THE PROCUREMENT WHEN IT FOUND THAT MACNEAL WAS NOT ELIGIBLE.

IN RESPONSE, THE AIR FORCE STATES THAT BEFORE ISSUING THE RFP IT HAD SATISFIED ITS NEEDS THROUGH A PRIOR VERSION OF THE NASTRAN COMPUTER PROGRAM DISTRIBUTED THROUGH COSMIC. THIS PROGRAM WAS AVAILABLE UNDER AN AIR FORCE AGREEMENT WITH NASA BY WHICH LISTED AIR FORCE INSTALLATIONS COULD LEASE THE NASTRAN PROGRAM. HOWEVER, DUE TO INADEQUACIES THAT EXISTED IN THAT PROGRAM, THE AIR FORCE ISSUED THE RFP TO OBTAIN A MORE ADVANCED NASTRAN PROGRAM AND TO OBTAIN PERIODIC UPDATED VERSIONS OF THE PROGRAM. THE AIR FORCE ASSERTS THAT IT ISSUED THE RFP AS A SMALL BUSINESS SET-ASIDE CONSISTENT WITH THE POLICY OF THE DEPARTMENT OF DEFENSE TO PLACE A FAIR PROPORTION OF ITS TOTAL PURCHASES WITH SMALL BUSINESS CONCERNS. SEE DEFENSE ACQUISITION REGULATION (DAR) SEC. 1-702(A) (1976 ED.). THE AIR FORCE FURTHER RESPONDS THAT THE RFP'S PRICING STRUCTURE WAS CHANGED AFTER INITIAL PROPOSALS WERE SUBMITTED FROM A FLAT MONTHLY RATE TO A PRICE BASED ON CENTRAL PROCESSOR UNIT (CPU) MINUTES USED BECAUSE BASED ON THE AIR FORCE'S HISTORY OF NASTRAN USAGE, IT WOULD BE LESS COSTLY FOR THE GOVERNMENT TO PAY FOR THE SERVICE AS IT WAS USED RATHER THAN ON A FLAT MONTHLY RATE BASIS.

FINALLY, THE AIR FORCE STATES THAT WHEN THE SIZE STATUS OF MACNEAL, WHICH IN THE AGENCY'S VIEW SUBMITTED THE BETTER OFFER, WAS CHALLENGED BY UNIVERSAL, THE AIR FORCE SUSPENDED AWARD ACTION AND CONSIDERED HOW TO MEET ITS NEED PENDING SBA'S DECISION. THE AIR FORCE REPORTS:

"*** AFTER THE SIZE QUESTION WAS DECIDED BY THE SBA, THE GOVERNMENT REVIEWED ITS OPTIONS FOR OBTAINING THE SERVICES NEEDED TO MEET MISSION REQUIREMENTS (AWARD TO *** (UNIVERSAL) OR CONTINUE WITH GOVERNMENT RESOURCES) AND DETERMINED THAT CONTINUING WITH GOVERNMENT RESOURCES WAS THE LEAST COSTLY."

WE CANNOT CONCLUDE THAT THE ISSUANCE OF THE RFP AS A SMALL BUSINESS SET- ASIDE, THE RFP AMENDMENT REGARDING PRICING FORMAT, OR THE TIMING OF THE CANCELLATION REFLECTED BIAS IN FAVOR OF MACNEAL.

FIRST, THERE IS NOTHING IN THE RECORD TO DISPUTE THE AIR FORCE'S ASSERTED EXPECTATION THAT OFFERS WOULD BE OBTAINED FROM A SUFFICIENT NUMBER OF SMALL BUSINESS CONCERNS SO THAT AWARD WOULD BE MADE AT A REASONABLE PRICE, AND THUS THAT A SET-ASIDE UNDER DAR SEC. 1 706.5(A)(1) WAS APPROPRIATE.

SECOND, WE SEE NOTHING WRONG WITH THE AIR FORCE'S DECISION TO CHANGE THE COST QUOTATION FORMAT TO INSURE THAT THE AGENCY WOULD NOT ENTER INTO A CONTRACT AT A HIGHER COST THAN NECESSARY. IN THIS RESPECT, ORDINARILY IT IS NOT IMPROPER TO CHANGE EVALUATION CRITERIA AFTER INITIAL PROPOSALS ARE SUBMITTED AS LONG AS OFFERORS ARE GIVEN THE CHANCE TO RESPOND, WHICH WAS THE CASE HERE. SEE SYSTEMS GROUP ASSOCIATES, INC., B-198889, MAY 6, 1981, 81-1 CPD 349.

THIRD, THE RECORD SHOWS THAT THE RFP WAS ISSUED AND THE INITIAL TECHNICAL EVALUATIONS MADE BEFORE COSMIC ANNOUNCED IN A MARCH 1980 "NASTRAN NEWSLETTER" THE IMPENDING RELEASE (SUMMER 1980) OF THE ADVANCED PROGRAM. THUS, THE AIR FORCE APPARENTLY DID NOT KNOW THAT AN ADVANCED NASTRAN PROGRAM WOULD SOON BE AVAILABLE WHEN IT SOLICITED AND CONSIDERED THE TWO INITIAL PROPOSALS. MOREOVER, THE RECORD SHOWS THAT THE AIR FORCE BEGAN REEVALUATING ITS OPTIONS WHILE THE SBA WAS CONSIDERING MACNEAL'S ELIGIBILITY, I.E., WHILE MACNEAL STILL WAS IN LINE FOR AWARD, BUT SUSPENDED ANY ACTION UNTIL SBA COMPLETED ITS REVIEW. WE HAVE NO REASON TO BELIEVE THAT THE AIR FORCE WOULD NOT HAVE CANCELED THE PROCUREMENT REGARDLESS OF WHAT SBA DECIDED. FURTHER, THE RFP'S EVALUATION SECTION MADE IT CLEAR THAT THE AIR FORCE WANTED A CONTRACTOR ABLE TO PROVIDE, UPDATE, AND MAINTAIN A STATE-OF-THE-ART PROGRAM. OF THE TWO OFFERS, THE AIR FORCE FOUND THAT ONLY MACNEAL COULD DO SO AND, WHILE THE RECORD DOES NOT SHOW THE PRECISE COST OF CONTRACTING WITH MACNEAL, IT IS CLEAR THAT IT WOULD HAVE BEEN SUBSTANTIALLY LOWER THAN CONTRACTING WITH UNIVERSAL. FACT, THE RECORD OF THE AIR FORCE'S EVALUATION OF INITIAL PROPOSALS STATES:

"BECAUSE OF THE LOWER PER UNIT COST, SUPERIOR TECHNICAL BASE, FAR SUPERIOR DOCUMENTATION, PAST HISTORY OF MAINTAINING THE STATE-OF-THE-ART, MSC (MACNEAL) SHOULD BE CHOSEN EVEN IF THE COST IS HIGHER."

THUS, WHEN MACNEAL WAS DECLARED INELIGIBLE, THE AIR FORCE WAS LEFT WITH A FIRM OFFERING, IN ITS VIEW, LESS THAN THE DESIRED STATE-OF-THE-ART PROGRAM AT A HIGHER PRICE THAN THE STATE-OF-THE-ART OFFEROR. THE RECORD SHOWS THAT IT WAS AT THAT POINT THAT THE AIR FORCE COMPLETED REEVALUATING ITS OPTIONS AND DECIDED TO CANCEL.

ON THIS RECORD, THEREFORE, IT APPEARS THAT THE TIMING OF EVENTS IN THIS MATTER WAS DICTATED NOT BY ANY BIAS OF THE AIR FORCE IN FAVOR OF MACNEAL, BUT BY A NEED FOR AN ADVANCED NASTRAN PROGRAM WHICH WAS NOT AVAILABLE FROM COSMIC WHEN THE PROCUREMENT PROCESS WAS INITIATED; BY THE SUSPENSION OF PROCEEDINGS WHILE THE SBA REVIEWED MACNEAL'S SIZE STATUS AND THE RESULT OF THAT REVIEW; AND BY THE AIR FORCE'S ULTIMATE DETERMINATION THAT ITS NEEDS COULD BE SATISFIED AT A LOWER COST THAN THAT PROPOSED BY UNIVERSAL, THE ONLY REMAINING OFFEROR FOR THIS PROCUREMENT. WHEN A PROTESTER ALLEGES BIAS, THERE MUST BE MEANINGFUL SHOWING OF THAT POSSIBILITY; " *** UNFAIR OR PREJUDICIAL MOTIVES WILL NOT BE ATTRIBUTED TO INDIVIDUALS ON THE BASIS OF INFERENCE OR SUPPOSITION." A.R.F. PRODUCTS, INC., 56 COMP.GEN. 201, 208 (1976), 76-2 CPD 541. IN OUR VIEW, UNIVERSAL HAS NOT MADE THE NECESSARY SHOWING.

AIR FORCE COST COMPARISON

WITH RESPECT TO THE AIR FORCE'S STATED BASIS FOR THE CANCELLATION OF THE RFP, THE AIR FORCE COMPARED THE PROTESTER'S OFFERED COMPUTER PROGRAM WITH THE ADVANCED PROGRAM AVAILABLE FROM COSMIC. THE AIR FORCE REPORTS THAT THIS COSMIC PROGRAM WAS RATED AT NASTRAN LEVEL 17.6, SUPERIOR TO THE PROTESTER'S PROGRAM, RATED AT NASTRAN LEVEL 16. IN ADDITION, THE AIR FORCE DETERMINED IT COULD LEASE AND MAINTAIN THE PROGRAM AT A LOWER COST THAN THAT PROPOSED BY UNIVERSAL. SPECIFICALLY, THE AIR FORCE REPORTS THE ADVANCED COSMIC PROGRAM CAN BE LEASED AT A COST OF $3200 PER YEAR. THE AGENCY ESTIMATED THE IN-HOUSE MAINTENANCE WOULD COST $1520 PER YEAR. THE PROTESTER'S PROGRAM WOULD HAVE COST THE GOVERNMENT $9000 A YEAR.

THE PROTESTER MAINTAINS THAT THE AIR FORCE'S COST COMPARISON WAS UNFAIR BECAUSE COSMIC DOES NOT PROVIDE NASTRAN CONSULTING AND ON-GOING IMPROVEMENTS AND MAINTENANCE, WHICH WERE REQUIRED BY THE RFP. UNIVERSAL STATES THAT IT "DOUBTS" THAT AIR FORCE PERSONNEL HAVE THE EXPERTISE TO PERFORM THE CONSULTING AND UPGRADING FUNCTIONS REQUIRED BY THE RFP. UNIVERSAL ALSO QUESTIONS THE AIR FORCE'S COST ANALYSIS FOR MAINTENANCE AS "UNREALISTICALLY LOW."

IN A NEGOTIATED PROCUREMENT, THE CONTRACTING AGENCY ONLY HAS TO ESTABLISH A REASONABLE BASIS FOR CANCELLATION. MANAGEMENT SERVICES INCORPORATED, B-197443, JUNE 6, 1980, 80-1 CPD 394. HERE, THE RECORD SHOWS THAT THE ADVANCED NASTRAN PROGRAM IS AVAILABLE FROM COSMIC FOR $3200 PER YEAR. MOREOVER, WE HAVE NO BASIS OTHER THAN UNIVERSAL'S DOUBT TO QUESTION THE AIR FORCE ASSERTION THAT IT IN FACT DOES POSSESS THE IN-HOUSE CAPABILITY TO MAINTAIN THE NASTRAN PROGRAM, DEVELOPED DURING THE USE OF PREVIOUS NASTRAN PROGRAMS; THAT IT HAS THE RESOURCES TO UPDATE THE PROGRAM ON AN AS -REQUIRED BASIS; AND THAT ADDITIONAL RESOURCES FROM OUTSIDE THE GOVERNMENT WILL NOT BE NEEDED. IN THIS REGARD, THE $1520 FIGURE REPRESENTS EIGHTY HOURS OF PROGRAMMERS' TIME AS THE MAXIMUM REQUIRED IN-HOUSE EFFORT TO INSTALL AND MAINTAIN THE PROGRAM AND UPDATES SUPPLIED BY COSMIC.

THE PROTESTER HAS THE BURDEN TO AFFIRMATIVELY PROVE ITS CASE. DYNAL ASSOCIATES, INC., B-197348, JULY 14, 1980, 80-2 CPD 29. UNIVERSAL HAS NOT OFFERED ANY EVIDENCE TO SHOW THAT THE AIR FORCE'S ESTIMATED MONTHLY COST OF $4720 ($3200 LEASE COST $1520 MAINTENANCE) WAS WRONG, OR THAT THE CANCELLATION BASED ON THAT ESTIMATE VERSUS UNIVERSAL'S PRICE OF $9000 PER MONTH WAS UNREASONABLE. ACCORDINGLY, WE MUST CONCLUDE THAT THE AIR FORCE'S CANCELLATION WAS PROPER. SEE THE HOLLOWAY COMPANY, B-197557, AUGUST 18, 1980, 80-2 CPD 128.

THE PROTEST IS DENIED.

NOTWITHSTANDING OUR RESOLUTION OF THE PROTEST, WE ARE CONCERNED WITH THE LENGTH OF TIME THAT IT TOOK FOR THE AIR FORCE TO FURNISH TO OUR OFFICE A REPORT RESPONSIVE TO UNIVERSAL'S ALLEGATIONS. ON OCTOBER 24, 1980, WE REQUESTED THE AIR FORCE TO SUBMIT A REPORT ON THE PROTEST WITHIN 25 WORKING DAYS, IN ACCORDANCE WITH SECTION 20.3 OF OUR BID PROTEST PROCEDURES. THAT PROVISION REFLECTS BOTH WHAT WE CONSIDER TO BE A SUFFICIENT PERIOD FOR THE PREPARATION OF A REPORT, AND OUR VIEW THAT THE EXPEDITIOUS HANDLING OF BID PROTESTS IS INDISPENSABLE TO THE PROTECTION OF PROTESTERS AND OTHER PARTIES. WHEELER INDUSTRIES, INC., B-193883, JULY 20, 1979, 79-2 CPD 41.

HOWEVER, A REPORT WAS NOT SUBMITTED UNTIL FIVE MONTHS LATER. OUR DECISION WAS FURTHER DELAYED BECAUSE THE AIR FORCE TOOK ONE MONTH TO PROVIDE A REBUTTAL TO UNIVERSAL'S COMMENTS ON THE REPORT. ACCORDINGLY, WE ARE BRINGING THIS MATTER TO THE ATTENTION OF THE SECRETARY OF THE AIR FORCE. SEE ALDERSON REPORTING, B-195009, MARCH 5, 1980, 80-1 CPD 172.