B-223862, DEC 1, 1986

B-223862: Dec 1, 1986

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IN ESTIMATED NUMBER OF MAGNETIC RESONANCE IMAGING SCANS TO BE PROCURED UNDER BASE PERIOD OF SOLICITATION IS DENIED SINCE SOLICITATION PERMITTED AWARD OF CONTRACT TO LESS THAN THE REQUIRED QUANTITY AT THE UNIT PRICE OFFERED. SINCE PRICES WERE COMPUTED BY MULTIPLYING THE UNIT PRICE BY THE ESTIMATED QUANTITY AN AWARDEE WAS LOW FOR BOTH QUANTITIES. PROTESTER WAS NOT PREJUDICED. PROTEST THAT OPTION PRICES SHOULD NOT HAVE BEEN INCLUDED IN THE EVALUATION AND THAT TRANSPORTATION COST SHOULD HAVE BEEN INCLUDED IN THE EVALUATION. IS WITHOUT MERIT SINCE SOLICITATION PROVIDED THAT OPTION PRICES WOULD BE INCLUDED IN DETERMINING TOTAL PRICE AND THERE WAS NO PROVISION FOR EVALUATION OF TRANSPORTATION COSTS.

B-223862, DEC 1, 1986

PROCUREMENT - COMPETITIVE NEGOTIATION - CONTRACT AWARDS - QUANTITY REDUCTION - PROPRIETY DIGEST: 1. PROTEST AGAINST REDUCTION, FROM 270 TO 240, IN ESTIMATED NUMBER OF MAGNETIC RESONANCE IMAGING SCANS TO BE PROCURED UNDER BASE PERIOD OF SOLICITATION IS DENIED SINCE SOLICITATION PERMITTED AWARD OF CONTRACT TO LESS THAN THE REQUIRED QUANTITY AT THE UNIT PRICE OFFERED. SINCE PRICES WERE COMPUTED BY MULTIPLYING THE UNIT PRICE BY THE ESTIMATED QUANTITY AN AWARDEE WAS LOW FOR BOTH QUANTITIES, PROTESTER WAS NOT PREJUDICED. PROCUREMENT - COMPETITIVE NEGOTIATION - OFFERS - EVALUATION - OPTIONS - PRICES PROCUREMENT - COMPETITIVE NEGOTIATION - OFFERS - EVALUATION SHIPMENT COSTS 2. PROTEST THAT OPTION PRICES SHOULD NOT HAVE BEEN INCLUDED IN THE EVALUATION AND THAT TRANSPORTATION COST SHOULD HAVE BEEN INCLUDED IN THE EVALUATION, IS WITHOUT MERIT SINCE SOLICITATION PROVIDED THAT OPTION PRICES WOULD BE INCLUDED IN DETERMINING TOTAL PRICE AND THERE WAS NO PROVISION FOR EVALUATION OF TRANSPORTATION COSTS. THE PROCURING ACTIVITY IS REQUIRED TO MAKE AWARD BASED ON FACTORS INCLUDED IN THE SOLICITATION. PROCUREMENT - BID PROTEST - GAO PROCEDURES - PROTEST TIMELINESS - APPARENT SOLICITATION IMPROPRIETIES 3. PROTEST FILED AFTER THE CLOSING DATE FOR RECEIPT OF INITIAL OFFERS THAT EVALUATION SHOULD HAVE EXCLUDED OPTION PRICES AND TRANSPORTATION COSTS SHOULD HAVE BEEN INCLUDED, IS DISMISSED AS UNTIMELY. THESE CONTENTIONS CONCERN ALLEGED IMPROPRIETIES IN THE SOLICITATION; PROTESTS REGARDING SUCH MATTERS MUST BE FILED PRIOR TO THE CLOSING DATE FOR RECEIPT OF INITIAL PROPOSALS. PROCUREMENT - BID PROTEST - GAO PROCEDURES - PROTEST TIMELINESS - APPARENT SOLICITATION IMPROPRIETIES 4. ALLEGATION THAT AGENCY MADE SEVERAL CHANGES IN SPECIFICATION REQUIREMENTS FOR PHYSICIANS TO ACCOMMODATE AWARDEE IS DISMISSED AS UNTIMELY, SINCE THIS ALLEGATION IS GROUNDED ON CHANGES IN REQUIREMENTS CONTAINED IN TWO AMENDMENTS TO THE SOLICITATION; UNDER BID PROTEST REGULATIONS, SUCH A PROTEST MUST BE FILED PRIOR TO THE NEXT CLOSING DATE FOR RECEIPT OF PROPOSALS. PROCUREMENT - COMPETITIVE NEGOTIATION - DISCUSSION REOPENING - PROPRIETY 5. A CONTRACTING OFFICER MAY REOPEN DISCUSSIONS AFTER THE RECEIPT TO BEST AND FINAL OFFERS, IF HE DETERMINES THAT IT IS IN THE GOVERNMENT'S INTEREST TO DO SO. FURTHER, THERE IS NOTHING IMPROPER IN THE AGENCY CONDUCTING DISCUSSIONS WITH ONE OFFEROR CONCERNING A DEFICIENCY WHILE NOT HOLDING DISCUSSIONS WITH THE PROTESTER WHOSE PROPOSAL WAS NOT DEFICIENT IN THIS AREA. ALL THAT IS REQUIRED IS THAT EACH TIME DISCUSSIONS ARE REOPENED, EACH OFFEROR BE GIVEN AN OPPORTUNITY TO RESPOND TO THE NEW REQUIREMENTS INCLUDED IN THE SOLICITATION. PROCUREMENT - SOCIO-ECONOMIC POLICIES - SMALL BUSINESSES - CONTRACT AWARDS - PREFERENCES - APPLICABILITY 6.PROTESTER IS NOT ENTITLED TO AWARD BECAUSE IT, UNLIKE THE AWARDEE, WAS A SMALL-BUSINESS FIRM SINCE THE PROCUREMENT WAS NOT A SMALL BUSINESS SET- ASIDE.

NEURODIAGNOSTICS OF MOBILE, INC.:

NEURODIAGNOSTICS OF MOBILE, INC. (NMI), PROTESTS THE AWARD OF A CONTRACT TO THE OCHSNER FOUNDATION HOSPITAL (OCHSNER) UNDER REQUEST FOR PROPOSALS (RFP) NO. F22600-86-R0001, ISSUED BY KEESLER AIR FORCE BASE, MISSISSIPPI, FOR MAGNETIC RESONANCE IMAGING SERVICES (SCANS) FOR THE KEESLER MEDICAL CENTER LOCATED AT THE BASE.

WE DENY THE PROTEST IN PART AND DISMISS IT IN PART.

THE RFP WAS ISSUED ON NOVEMBER 26, 1985, AND CONTEMPLATED A FIRM FIXED- PRICE REQUIREMENTS CONTRACT FOR AN ESTIMATED 1200 SCANS PER YEAR, OR 100 SCANS PER MONTH, FOR A BASE PERIOD OF 1 YEAR WITH TWO OPTIONS, EACH FOR 1 YEAR. THE SOLICITATION PROVIDED THAT AWARD WOULD BE MADE TO THE OFFEROR WHOSE CONFORMING OFFER IS MOST ADVANTAGEOUS TO THE GOVERNMENT CONSIDERING PRICE AND ANY OTHER FACTORS SPECIFIED IN THE SOLICITATION. THE SOLICITATION DID NOT CONTAIN ANY TECHNICAL EVALUATION FACTORS BUT DID STATE THAT OPTION PRICES WOULD BE CONSIDERED IN DETERMINING THE LOW OFFEROR.

TWO OFFERS WERE RECEIVED BY THE AMENDED CLOSING DATE OF FEBRUARY 12, 1986; ONE FROM NMI TOTALING $2,142,000 AND ANOTHER FROM OCHSNER AT $2,265,00. /1/ OCHSNER'S OFFER WAS NOT CONSIDERED ACCEPTABLE AS SUBMITTED BECAUSE IT DID NOT PROPOSE A RADIOLOGIST TO READ THE SCANS WHO WAS A MEMBER OF THE AMERICAN SOCIETY OF NEURORADIOLOGY AS REQUIRED BY THE SOLICITATION. ON MARCH 14, THE AIR FORCE ISSUED AMENDMENT NO. 4 TO THE SOLICITATION CHANGING THE BASE PERIOD TO 11 MONTHS AND GREATLY REDUCING THE ESTIMATED QUANTITY OF SCANS TO 110 FOR THE BASE PERIOD AND 120 FOR EACH OF THE TWO OPTION PERIODS. THE AMENDMENT CALLED FOR BEST AND FINAL OFFERS ON MARCH 28. IN ADDITION, THE AGENCY SENT A LETTER TO OCHSNER POINTING OUT DEFICIENCIES IN ITS PROPOSAL. THE LETTER TO NMI INDICATED THAT NO DEFICIENCIES WERE FOUND IN ITS PROPOSAL.

THE AIR FORCE RECEIVED A SECOND SET OF OFFERS ON MARCH 28. THIS TIME NMI'S TOTAL PRICE WAS $245,000 WHILE OCHSNER OFFERED $233,750. OCHSNER DID NOT MEET THE QUALIFICATION REQUIREMENTS FOR THE RADIOLOGIST, AND WAS AGAIN SENT A DEFICIENCY LETTER. IN ADDITION, THE AGENCY ISSUED AMENDMENT NO. 5 CHANGING THE REQUIREMENT FOR THE RADIOLOGIST. UNDER THE AMENDED REQUIREMENT, THE RADIOLOGIST MUST HAVE EITHER SENIOR MEMBERSHIP IN THE AMERICAN SOCIETY OF NEURORADIOLOGY OR HAVE HAD A 1-YEAR FELLOWSHIP IN NEURORADIOLOGY. THE AMENDMENT CHANGED THE BASE PERIOD FROM 11 TO 10 MONTHS AND THE ESTIMATED NUMBER OF SCANS FROM 110 TO 300 FOR THE BASE PERIOD AND FROM 120 TO 360 FOR EACH OPTION PERIOD.

ON APRIL 21, NMI SUBMITTED A $663,000 OFFER AND OCHSNER ONE FOR $652,500. SUBSEQUENTLY, THE AGENCY ISSUED AMENDMENT NO. 6 WHICH PERMITTED A RADIOLOGIST WITH A SPECIFIED AMOUNT OF WORKING EXPERIENCE TO QUALIFY. THE AMENDMENT ALSO REDUCED THE BASE PERIOD TO 9 MONTHS AND CHANGED THE ESTIMATED QUANTITY FOR THE BASE PERIOD TO 270 SCANS. AGAIN, OCHSNER WAS NOTIFIED OF THE DEFICIENCIES IN ITS PROPOSAL AND NMI WAS INFORMED THAT ITS PROPOSAL CONTAINED NONE.

OCHSNER AND NMI BOTH SUBMITTED BEST AND FINAL OFFERS ON JUNE 16. NMI OFFERED A PRICE OF $638,550 AND OCHSNER OFFERED $633,750. THIS TIME BOTH OFFERS WERE DETERMINED TO BE TECHNICALLY ACCEPTABLE. SINCE THE AWARD PROCESS COULD NOT BE COMPLETED IN TIME FOR THE PERFORMANCE TO BEGIN BY JULY 1 (THE DATE ON WHICH THE 9-MONTH BASE PERIOD WAS TO START) THE AGENCY ELIMINATED THE FIRST MONTH AND MADE AWARD TO OCHSNER FOR 8 MONTHS BASED ON AN ESTIMATE OF 240 SCANS AT A PRORATED PRICE OF $615,000.

NMI OBJECTS TO THE AWARD TO OCHSNER ON SEVERAL GROUNDS. FIRST, THE PROTESTER COMPLAINS THAT THE CONTRACT AWARD TO OCHSNER CALLED FOR ONLY 240 SCANS FOR THE BASE PERIOD, WHILE THE SOLICITATION AS AMENDED PROVIDED FOR 270 SCANS. FURTHER, THE PROTESTER ARGUES THAT IF TRANSPORTATION COSTS ARE CONSIDERED AND ONLY THE PRICE FOR THE BASE PERIOD EVALUATED, IT IS THE LOW OFFEROR. NMI ALSO QUESTIONS THE CHANGES MADE IN THE RADIOLOGIST QUALIFICATION REQUIREMENTS AND CONTENDS THAT IF THE CHANGES WERE MADE AS A RESULT OF A PROTEST FROM OCHSNER, IT SHOULD HAVE BEEN PERMITTED TO COMMENT.

THE CONTRACT AWARD WAS FOR AN ESTIMATED 240 SCANS BECAUSE THE AGENCY WAS NOT ABLE TO MAKE AWARD BY JULY 1, THE PROPOSED START DATE OF THE 9 MONTH PERIOD UPON WHICH THE 270 SCAN ESTIMATE CONTAINED IN THE SOLICITATION WAS BASED. THE AGENCY INSTEAD BASED THE AWARD ON AN 8 MONTH PERIOD AND PRORATED THE ESTIMATED NUMBER OF SCANS AND EACH OFFEROR'S PRICE. THE SOLICITATION PROVIDED THAT AWARD COULD BE MADE FOR A QUANTITY LESS THAN THE REQUIRED QUANTITY OF THE OFFERED UNIT PRICE. THE AGENCY CALCULATED THE PRICE BY MULTIPLYING BOTH FIRM'S UNIT PRICES BY 240. SINCE OCHSNER'S PRICE WAS LOW USING EITHER 240 OR 270, AND THE PROTESTER DOES NOT CONTEND THAT IT WOULD HAVE OFFERED A LOWER PRICE ON THE LESSER QUANTITY, NMI WAS NOT PREJUDICED BY THE METHOD OF AWARD.

WHILE NMI ARGUES THAT IT IS THE LOW OFFEROR IF THE OPTION PRICES ARE NOT INCLUDED IN THE EVALUATION, AND MAINTAINS THAT THE COST OF TRANSPORTATION TO AND FROM THE HOSPITAL SHOULD HAVE BEEN INCLUDED IN THE EVALUATION, WE BELIEVE THAT THE AGENCY PROPERLY EVALUATED THE OFFERS IN ACCORDANCE WITH THE SOLICITATION FACTORS. THE SOLICITATION PROVIDED THAT OPTION PRICES WOULD BE INCLUDED IN DETERMINING THE TOTAL PRICE AND DID NOT PROVIDE FOR AN EVALUATION OF TRANSPORTATION COSTS. THE AGENCY IS REQUIRED BY STATUTE TO MAKE AWARD BASED SOLELY ON THE FACTORS INCLUDED IN THE SOLICITATION. 10 U.S.C. SEC. 2305(B)(1) (SUPP. III 1985). BY MAKING AWARD TO THE LOW OFFEROR CALCULATED BY ADDING THE BASE AND OPTION PRICES THE AGENCY FOLLOWED THE SOLICITATION EVALUATION FACTORS. /2/ IF NMI OBJECTED TO THE EVALUATION SCHEME SET FORTH IN THE SOLICITATION IT SHOULD HAVE PROTESTED PRIOR TO THE DATE SET FOR RECEIPT OF THE INITIAL PROPOSALS. BID PROTEST REGULATIONS, 4 C.F.R. SEC. 21.2(A)(1) (1986).

NMI FURTHER CONTENDS THAT THE AGENCY MADE SEVERAL CHANGES TO THE QUALIFICATION REQUIREMENTS PERTAINING TO THE RADIOLOGIST TO ACCOMMODATE OCHSNER. THE PROTESTER MAINTAINS THAT THESE CHANGES WERE BASED ON COMMUNICATIONS BETWEEN OCHSNER AND THE AIR FORCE. NMI ARGUES THAT THESE COMMUNICATIONS AMOUNTED TO A PROTEST OF THE SPECIFICATIONS AND THAT NMI SHOULD HAVE BEEN NOTIFIED OF THIS. THE ARMY RESPONDS THAT THE QUALIFICATION REQUIREMENTS FOR THE RADIOLOGIST WERE NOT CHANGED AS THE RESULT OF A PROTEST FROM OCHSNER OR TO ACCOMMODATE OCHSNER'S BUT TO PROVIDE FOR FULL AND OPEN COMPETITION.

THIS CONTENTION IS GROUNDED ON THE CHANGES MADE IN THE REQUIREMENTS FOR THE RADIOLOGIST CONTAINED IN AMENDMENTS 5 AND 6. ANY PROTEST OF THE CHANGES MADE BY THE AMENDMENTS IS UNTIMELY. OUR REGULATIONS REQUIRE GENERALLY THAT A PROTEST OF IMPROPRIETIES INCORPORATED INTO A SOLICITATION BY AN AMENDMENT BE FILED NO LATER THAN THE NEXT CLOSING DATE FOR RECEIPT OF PROPOSALS. 4 C.F.R. SEC. 21.2(A)(1); COSMOS ENGINEERING, INC., B-217430, JAN. 18, 1985, 85-1 CPD PARA. 62. THE FINAL FORM OF THE REQUIREMENT WAS CLEAR FROM THE FACE OF AMENDMENT 6, SO ANY OBJECTION NMI HAD TO THE SPECIFIC CHANGES SHOULD HAVE BEEN RAISED PRIOR TO THE JUNE 16 CLOSING DATE FOR RECEIPT OF BEST AND FINAL OFFERS.

MOREOVER, WHILE THERE IS NO EVIDENCE THAT OCHSNER SUBMITTED A PROTEST TO THE AGENCY REGARDING THE RADIOLOGIST REQUIREMENTS, THIS MATTER WAS THE SUBJECT OF SUCCESSIVE ROUNDS OF DISCUSSIONS BETWEEN OCHSNER AND THE AGENCY. GENERALLY, IN NEGOTIATED PROCUREMENTS SUCH AS THIS, WRITTEN OR ORAL DISCUSSIONS POINTING OUT WEAKNESSES, DEFICIENCIES OR EXCESSES IN THE PROPOSALS ARE REQUIRED TO BE HELD WITH ALL OFFERORS WITHIN A COMPETITIVE RANGE. COSMOS ENGINEERS, INC., B-220000.3, FEB. 24, 1986, 86-1 CPD PARA. 186. FURTHER, THE AGENCY MAY, AS WAS THE CASE HERE, REOPEN DISCUSSIONS AFTER THE RECEIPT OF BEST AND FINAL OFFERS WHERE IN THE CONTRACTING OFFICER'S JUDGEMENT IT IS IN THE GOVERNMENT'S INTEREST TO DO SO. ACTION MFG. CO., B-222151, JUNE 12, 1986, 86-1 CPD PARA. 546.

CONSEQUENTLY, THERE WAS NOTHING PER SE IMPROPER WITH THE AIR FORCE'S CONDUCTING DISCUSSIONS WITH OCHSNER REGARDING RADIOLOGIST QUALIFICATIONS. WHILE THERE WERE NO DISCUSSIONS WITH THE PROTESTER CONCERNING THIS PARTICULAR ISSUE, NONE WERE NEEDED SINCE ITS PROPOSAL WAS NOT DEFICIENT IN THE AREA. EACH TIME DISCUSSIONS WERE REOPENED, BOTH OCHSNER AND NMI WERE GIVEN THE OPPORTUNITY TO RESPOND TO THE ALTERED REQUIREMENTS WHICH WERE INCLUDED IN WRITTEN AMENDMENTS TO THE SOLICITATION. SEE E.C. CAMPBELL, INC., B-222197, JUNE 19, 1986, 86-1 CPD PARA. 565.

WHILE IT WAS NOT IMPROPER FOR THE AGENCY TO HAVE REOPENED DISCUSSIONS TWICE, ACTION MFG. CO., B-222151, SUPRA, IT CERTAINLY WOULD HAVE BEEN BETTER IF THE AGENCY COULD HAVE REACHED ITS FINAL DETERMINATION AS TO THE NUMBER OF SCANS IT THOUGHT IT WOULD NEED AND ITS MINIMUM NEEDS FOR RADIOLOGIST QUALIFICATIONS WITHOUT HAVING TO CONDUCT SUCCESSIVE ROUNDS OF DISCUSSIONS AND TO SOLICIT SEVERAL BEST AND FINAL OFFERS. NEVERTHELESS, WE HAVE NO LEGAL BASIS UPON WHICH TO OBJECT TO THE AGENCY'S CONDUCT.

NMI FURTHER CONTENDS THAT IT QUALIFIES AS A SMALL BUSINESS, WHEREAS, OCHSNER DOES NOT. NMI'S STATUS AS A SMALL BUSINESS IS NOT RELEVANT. THIS PROCUREMENT WAS NOT A SMALL-BUSINESS SET-ASIDE, NOR DID THE SOLICITATION PROVIDE FOR SPECIAL CONSIDERATION OF SMALL BUSINESS FIRMS. HENCE, THE AGENCY HAD NO BASIS FOR GIVING PREFERENTIAL TREATMENT TO SMALL BUSINESSES. NORFOLK SHIP SYSTEMS, INC., B-219404, SEPT. 19, 1985, 85-2 CPD PARA. 309.

FINALLY, NMI CONTENDS THAT IT HAS BEEN FURNISHING SATISFACTORY SERVICES TO THE AIR FORCE AND BECAUSE OF ITS CLOSE PROXIMITY TO KEESLER, AIR FORCE PHYSICIANS HAVE BEEN ABLE TO ACCOMPANY PATIENTS TO NMI'S FACILITIES AND RECEIVE TRAINING IN MAGNETIC RESONANCE IMAGING. HERE, THERE WERE NO FACTORS IN THE SOLICITATION FOR THE EVALUATION OF PAST PERFORMANCE NOT ANY REQUIREMENT FOR TRAINING; THEREFORE, CONSIDERATION OF THESE FACTORS IN THE EVALUATION WOULD HAVE BEEN IMPROPER.

THE PROTEST IS DENIED IN PART AND DISMISSED IN PART.

/1/ ALL THE PRICES MENTIONED ARE FOR THE BASE PERIOD PLUS TWO OPTION PERIODS.

/2/ THE PROTESTER NOTES THAT THE SOLICITATION STATED THAT THE GOVERNMENT MAY ACCEPT OTHER THAN THE LOW OFFEROR. THE SOLICITATION CONTAINED A STANDARD CLAUSE FROM FEDERAL ACQUISITION REGULATION, 48 C.F.R. SEC. 52.215 -16 (1985), PERTAINING IN GENERAL TO CONTRACT AWARD UNDER NEGOTIATED SOLICITATIONS. IN A SOLICITATION SUCH AS THIS ONE WHERE THERE ARE NO TECHNICAL EVALUATION FACTORS THE AWARD IS TO BE MADE TO THE LOW CONFORMING OFFEROR. SEE VIERECK CO., B-222520, AUG. 5, 1986, 86-2 CPD PARA. 152. COURSE, WHERE TECHNICAL FACTORS ARE EVALUATED SEPARATELY THE AWARD IS NOT NECESSARILY MADE TO THE LOW OFFEROR.