B-240011.2, Sep 1, 1991

B-240011.2: Sep 1, 1991

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Such doubt will be resolved in favor of the protester. 2. The awardee will receive FCS data on a monthly basis from DLA and will be required to transform the data into a form suitable for use in the manufacture of CDs. The contractor will be required to produce a "master" CD. Which is then used to manufacture CDs on an as-needed basis. The contractor is to develop and disseminate a software system. Will enable Department of Defense (DOD) procurement activities to use the CD packages on stand-alone personal computers that are equipped with CD players. Will be used by all branches of the armed forces. Will enable users to search the data using one or more data characteristics. Users will be able to search for a particular item using the item's national stock number (NSN).

B-240011.2, Sep 1, 1991

DIGEST: 1. Where doubt exists as to the timeliness of a protest, such doubt will be resolved in favor of the protester. 2. Agency reasonably did not consider that the existence of an on line automatic data processing equipment system would materially affect estimates for a system that accesses much the same data using Compact Disc Read Only Memory technology, where the systems serve different user requirements.

Attorneys

National Standards Association:

National Standards Association (NSA) protests the terms of request for proposals (RFP) No. 900-S issued by the Government Printing Office (GPO) to acquire compact disc (CD) manufacturing services under the Federal Logistics Data on CD-Read Only Memory (FED LOG) program. NSA argues that GPO has failed to include reasonably accurate estimates of the anticipated quantity of CDs to be manufactured during the contract, inasmuch as GPO's estimate does not account for an existing on-line computer system being acquired under another contract.

We deny the protest.

The RFP contemplates the award of a requirements-type contract to perform all services in connection with the manufacture of CDs in support of the Defense Logistics Agency's (DLA) effort to modernize the Federal Catalogue System (FCS). The awardee will receive FCS data on a monthly basis from DLA and will be required to transform the data into a form suitable for use in the manufacture of CDs. In addition, the contractor will be required to produce a "master" CD, which is then used to manufacture CDs on an as-needed basis. The contractor is to develop and disseminate a software system, which, when installed, will enable Department of Defense (DOD) procurement activities to use the CD packages on stand-alone personal computers that are equipped with CD players.

The FED LOG program, when operational, will be used by all branches of the armed forces, as well as DLA, in connection with their respective logistics support missions, and will enable users to search the data using one or more data characteristics. For example, users will be able to search for a particular item using the item's national stock number (NSN), national item identification number (NIIN) or commercial and government entity (CAGE) number. /1/ The overall objective of the system is to facilitate and enhance ease of operation and efficiency in logistics support procurement efforts and to ultimately replace the microfiche system currently in use in DOD.

The system that NSA alleges was not considered in the preparation of the estimates for this RFP is being acquired under contract No. DLAHOO 90-0004 between the Defense Logistics Service Center (DLSC) and Grumman Data Systems, Inc. This is a major hardware and software acquisition to update and enhance DLSC's capabilities in terms of logistics support data management. A significant portion of that contract calls for the development and installation of an on-line system for logistics support data management. This system is referred to as the Logistics Remote Users Network (LOGRUN), and it will provide remote access to the Defense Integrated Data System (DIDS). /2/ The major data base that the remote user may access using LOGRUN is the total item record, which contains comprehensive data relating to all NSN items identified in the FCS. Users may also access other data bases, such as the military engineering data asset locator system (MEDALS), a repository for technical data such as engineering drawings owned by DOD, by using the LOGRUN system as a "gateway." Like FED LOG, LOGRUN provides the user with data retrieval capabilities, enabling the user to search for information relating to FCS items according to a variety of data characteristics, such as NSN or CAGE code. /3/ LOGRUN, however, is a "real time" system that provides users with data in its most current form with continuous updates, whereas FED LOG users only receive data updates on a monthly basis. Also, unlike the FED LOG system, LOGRUN is an interactive system providing authorized users not only data retrieval capabilities but also data input capabilities, thereby allowing authorized remote users the ability to continuously update the information contained in the DIDS.

The FED LOG solicitation, as noted above, contemplates the award of a requirements-type contract and, consequently, contains estimates of the quantities to be acquired under the contract. Specifically, the solicitation provides that the agency estimates acquiring an average of 5,000 sets of CDs per month in the first year of the contract, 15,000 sets of CDs per month in the second year of the contract and 30,000 sets of CDs per month in the third year of the contract. It is these estimated quantities that NSA protests did not take cognizance of the LOGRUN contract.

As a preliminary matter, the agency argues that NSA's protest is untimely under our Bid Protest Regulations. Specifically, the agency alleges that, since the estimated quantities appeared in the initial solicitation, NSA was required to file its protest no later than the closing date for the submission of initial proposals on June 14, 1990. According to the agency, since NSA's protest was filed on May 17, 1991, after the closing date for the submission of initial offers, /4/ we should dismiss it.

NSA responds that its protest is timely because it filed an agency level protest within 10 working days of learning of the requirements for LOGRUN under the DLSC modernization contract. According to the protester, it had no basis to question the estimated quantities called for under the FED LOG contract until it learned of the LOGRUN requirement, which it alleges was not considered by the agency in preparing the estimate for the FED LOG solicitation. In support of its claim that its protest is timely, the protester has submitted affidavits from various individuals to attest that the protester only became aware of the LOGRUN requirements during an automobile drive to an unrelated meeting attended by the protester's representatives, DOD officials and representatives of another firm. According to the protester, since its firm does not have the capabilities to perform a contract of the magnitude of the LOGRUN contract, it would have had no reason to become aware of the requirements under that contract.

Where a protest is based upon alleged improprieties which are apparent from the face of a solicitation, the protester must file its protest prior to the time set for the submission of offers under the allegedly improper solicitation. 56 Fed.Reg. 3759 (1991) (to be codified at 4 C.F.R. Sec. 21.2(a)(1)). Where, however, a solicitation's improprieties are not apparent on its face, and an impropriety is only apparent in light of some other information, a protester is required to file its protest, either in our Office or with the contracting agency, no later than 10 working days after it knew or should have known of the other information. 4 C.F.R. Sec. 21.2(a)(2) (1991). Where there is doubt as to the timeliness of a protest, our Office will resolve that doubt in favor of the protester. & R Enters.-- Recon., B-240926.2, Feb. 12, 1991, 91-1 CPD Para. 149.

Here, the agency argues that a qualified offeror on this requirement to format and disseminate FCS data could not be wholly unaware of the requirements of a contract of the magnitude of the DLSC modernization contract, which also involves the processing of FCS data. /5/ Under the circumstances, we do not find this assertion sufficiently compelling to deprive the protester of an opportunity to present its case. We resolve doubt in favor NSA and find the protest to be timely.

NSA contends that the estimated quantities expressed in the FED LOG solicitation are unreasonably high. Specifically, the protester asserts that there will be a significant overlap in the users of FED LOG and LOGRUN because both systems offer access to substantially the same logistics information and the agency's estimated quantities under the FED LOG solicitation fail to recognize this overlap. In support of its position, the protester states that according to agency-generated statistics, there is a finite universe of approximately 49,000 to 50,000 users of logistics information, only 70 percent of which are considered "active" users. /6/ The protester also notes that, as to this group of approximately 35,000 "active" users, the agency contemplates that approximately 10 percent, or 3,500 users, will continue to acquire their logistics data on microfiche, leaving 31,500 active users. According to the protester, the agency's estimate of up to 30,000 sets of CDs fails to take account of the users of LOGRUN, which it alleges will have as many as 20,000 access terminals by the time the DLSC modernization contract is fully performed. /7/ In sum, NSA argues that, because the two systems are essentially identical, a significant number of users, who currently use microfiche or other media, will choose to utilize the on-line LOGRUN system in order to satisfy their requirements for logistics data instead of obtaining CDs under the FED LOG system. /8/

The agency argues that it properly did not specifically consider LOGRUN in developing its quantity estimates for the FED LOG acquisition. The agency contends that the two systems are significantly different and that there will be little overlap in users of the two systems. According to GPO, the users of LOGRUN, who will use it for logistics data retrieval purposes, are a relatively small group, who require up-to-the-minute logistics information. In contrast, the FED LOG user group represents the vast majority of logistics data users who will be able to satisfy their requirements using the monthly-updated FED LOG system. The agency also argues that the potential for user overlap between the two systems will be further minimized by the significant cost differences of using the two systems. FED LOG, once implemented, is an inexpensive method of data retrieval. LOGRUN is relatively costly, since it involves telecommunications costs, and will only be used in those limited circumstances when the added cost can be justified by the need for extremely timely logistics information.

When an agency solicits bids or proposals for a requirements type contract and provides estimates as to the quantities to be acquired under the contract, the estimates must be based upon the best information available to the agency and must present a reasonably accurate representation of the agency's anticipated needs. Custom Envtl. Serv., Inc., B-241052, Jan. 15, 1991, 70 Comp.Gen. ***, 91-1 CPD Para. 38. agency's estimates do not, however, have to be absolutely correct, id., and a solicitation is not defective merely because it imposes some risk upon the bidders or offerors; in such circumstances, the bidders or offerors must use their expertise and business judgment to assess the risk's magnitude and possible cost in computing their pricing. See Neil Gardis & Assocs., Inc., B-238672, June 25, 1990, 90-1 CPD Para. 590.

Based upon our review of the record, we find the agency reasonably formulated the government estimates in the RFP. In this regard, from our review, it appears that the potential LOGRUN user population does not materially affect the FED LOG quantity estimates. While both FED LOG and LOGRUN are concerned with the handling of logistics information, the fundamental nature and purpose of each system is different and, consequently, the agency could properly have determined the estimated quantities under the FED LOG solicitation without regard to the potential user population of LOGRUN.

Specifically, the record shows that the FED LOG system is to be the vehicle for the dissemination of logistics data to those users concerned primarily with the use of logistics data for acquisition purposes. It is ultimately intended to be the replacement system for a multitude of FCS microfiche and hard copy users. In contrast, while LOGRUN also allows logistics data retrieval, it is an interactive system that facilitates the manipulation of logistics data by authorized users who are concerned with maintaining the accuracy of the data. /9/ Thus, the record indicates that a significant proportion of the total user population to be serviced by LOGRUN will not be individuals who utilize the system only to gather the government logistics data.

In addition, the DLSC modernization contract, as noted above, contemplates the provision of various "pass-thru connect" functions, which will enable logistics data users access to various data bases, such as MEDALS, which are unavailable under FED LOG. These "pass-thru connect" functions will enable users to both manipulate and retrieve logistics information in data bases which are simply unavailable under FED LOG.

Also, as noted above, FED LOG will enable users to access the service- specific data bases such as the AMDF in addition to the DIDS data base. The record shows that, of the 30,150 FED LOG users to be serviced by the new system, 23,780 of these users will be drawn from the various branches of the armed forces. These users will necessarily require access to their respective service-specific data bases, which are not available through the LOGRUN system.

While the protester is correct that both FED LOG and LOGRUN contain similar, and in some cases identical, logistics data, the record shows that the two systems contain significant differences, both in terms of their essential purpose as well as the available data and search capabilities. /10/ That is, FED LOG was directed primarily at the previous microfiche user population, whereas the LOGRUN system was directed at upgrading the capabilities of the user network that interfaces DIDS and other data bases. We also note that a single user could well have occasion to use either FED LOG or LOGRUN or both under various circumstances, but will base the choice of system upon the nature of the task to be performed. It would appear that the logistics data users are not in a "zero-sum" environment, as the protester would have us believe, and the use of one system does not preclude the use of, or requirement for, the other system. Since both systems are accessed through computer terminals, GPO could reasonably find that an overlap will not materially affect the estimates on the FED LOG system.

The protester has failed to show that the agency acted unreasonably in not considering the LOGRUN user base in determining its estimated requirements for FED LOG. Indeed, the protester does not indicate the extent to which the estimated requirements may be overstated nor state how this would materially affect its pricing strategy. The contractor will be paid separately for the data preparation, mastering and production tasks. /11/ Consequently, contractors are not exposed to the risks associated with distributing the costs associated with pre production tasks over the production units and will be paid for these tasks regardless of whether or not any disc sets are actually ordered. Thus, while offerors must use their business judgment in deciding how to distribute their profit among the various tasks, the procurement is structured in a manner which will reduce the risk of incurring costs that will not be recovered in the event that the agency fails to order the anticipated quantities.

We deny the protest.

/1/ The RFP requires that the FED LOG system be capable of searching for a particular item according to any one of the following identifiers:

1. NSN

2. NIIN

3. Part Number

4. Partial Part Number

5. Item Name

6. CAGE Code

In addition, users will be capable of searching the service specific data files resident upon the CDs such as the Army Master Data file (AMDF).

/2/ The data to be transferred to CD under the FED LOG program is acquired from DIDS and service-specific logistics data bases.

/3/ The contract requires that the LOGRUN system be capable of searching for a particular item according to any one of the following identifiers:

1. NSN

2. NIIN

3. Part Number

4. Partial Part Number

5. CAGE code item name/Inc.

6. Combinations of Part Number, CAGE number and item name

7. Characteristics

8. Federal Supply Group

9. Federal Supply Class

10. Item Name

11. CAGE Code/Part Number

/4/ The deadline for the submission of best and final offers was May 22, 1991; the protest was filed prior to that date.

/5/ The FED LOG awardee obtains its FCS data from DIDS, which the LOGRUN contract maintains.

/6/ The 70 percent "active" user figure was determined by the agency by polling the 477 current LOGRUN terminals for a 1-month period. According to the protester, this is further evidence tending to show that there is an overlap between the two systems.

/7/ The protester derives the potential number of LOGRUN terminals from a 1987 requirements analysis prepared by DLA.

/8/ The protester also alleges for the first time in an August 21 submission to our Office that the agency failed to take account of the increased efficiency associated with the use of CD technology as opposed to microfiche in preparing its estimate. We decline to consider this allegation because it has not been timely raised. 4 C.F.R. Sec. 21.2(a)(2). In this regard, the record shows that the information relating to increased efficiency was derived from documents that were furnished to the protester no later than August 5. Since the protester was required to raise this allegation no later than 10 working days after receiving the documents containing the information, in order to be considered timely, it was required to file in our Office no later than August 19.

/9/ Our review of the record indicates that of the 2,154 user terminals that will ultimately (12 years in the future) be installed pursuant to the DLSC modernization contract, 622 of these terminals will be contractor "direct connect" terminals and some of the 558 "dial-up" terminals may be used in the future by contractors as well; it appears that these terminals could be used by FCS product vendors to update information regarding the products that they offer for sale under government contracts.

/10/ For example, the LOGRUN system will enable users to search for FCS items where only engineering or performance characteristics are known, thus enabling users such as engineers to find a suitable FCS item that will satisfy their requirement. The FED LOG system, on the other hand, does not have this capability.

/11/ By virtue of the fact that the solicitation contains the integrity of unit prices clause appearing at Federal Acquisition Regulation 52.215- 26, offerors are precluded from distributing the costs associated with one task or line item over other unrelated tasks or line items.