Matter of: ADT Security Systems, Inc. File: B-249932.2 Date: February 4, 1993

B-249932.2: Feb 4, 1993

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

PROCUREMENT Competitive Negotiation Offers Evaluation errors Evaluation criteria Application Statement by chairman of agency evaluation panel that "price was an overwhelming consideration" in selection decision" does not demonstrate that evaluators gave greater weight to price than technical merit in the evaluation. Contrary to the solicitation provision under which technical merit was more important than price. Since there is no evidence that contracting officials reversed or otherwise varied from the evaluation scheme in solicitation. Statement that price was an overwhelming consideration is simply a reflection of the large disparity between the protester's price of $416. Award on basis of initial proposals was proper since it was consistent with the terms of the solicitation.

Matter of: ADT Security Systems, Inc. File: B-249932.2 Date: February 4, 1993

PROCUREMENT Competitive Negotiation Offers Evaluation errors Evaluation criteria Application Statement by chairman of agency evaluation panel that "price was an overwhelming consideration" in selection decision" does not demonstrate that evaluators gave greater weight to price than technical merit in the evaluation, contrary to the solicitation provision under which technical merit was more important than price, since there is no evidence that contracting officials reversed or otherwise varied from the evaluation scheme in solicitation. Statement that price was an overwhelming consideration is simply a reflection of the large disparity between the protester's price of $416,873 and the awardee's price of $228,692. PROCUREMENT Bid Protests GAO procedures Protest timeliness Apparent solicitation improprieties PROCUREMENT Competitive Negotiation Contract awards Initial offers Where protester fails to timely protest defect in solicitation's initial proposal award provision (failure to include one of two mandatory alternate clauses which indicate either the intent to award without discussions or the intent to hold discussions), award on basis of initial proposals was proper since it was consistent with the terms of the solicitation. PROCUREMENT Contractor Qualification Responsibility criteria Performance capabilities Solicitation requirements that equipment be installed by Underwriters Laboratory (UL) listed company and that firm have installers with security clearances are performance requirements. Whether the awardee can become UL listed and obtain required security clearances in time to perform the contract is a matter pertaining to its responsibility which the General Accounting Office will not review.

Attorneys

DECISION ADT Security Systems, Inc. protests the award of a firm, fixed- price contract to Sonitrol of Lexington under request for proposals (RFP) No. DABT23-92-R-0082, issued by the Department of the Army for improvements to the physical security detection system at Fort Knox, Kentucky. ADT argues that the Army improperly awarded the contract without conducting discussions with it and that Sonitrol did not meet solicitation requirements.

We deny the protest in part and dismiss it in part.

The solicitation included a base line item, ITEM 0001, for the labor, materials and equipment required to convert the existing intrusion detection system (IDS) to a computer operated central station, to install new detection systems in two locations and to install an access control system at the Muldraugh ammunition storage area, in accordance with the statement of work. The solicitation also included three additive items: ITEM 0002, for the installation of a closed circuit television system; ITEM 0003, for the installation of an additional IDS; and ITEM 0004, for the conversion of the Fort Knox School IDS to dedicated line signals.

The RFP stated that in the award selection "primary consideration will be given to the technical evaluation rather than cost or price," although if proposals were considered technically equal, "cost or price could become paramount." The solicitation included the following evaluation factors, listed in descending order of importance: (a) Comprehension of the RFP requirements; (b) System design and layout; and (c) Performance schedule. The solicitation also stated:

"Written or oral discussions may be conducted with all offerors who submit proposals within the competitive range. HOWEVER, THE GOVERNMENT RESERVES THE RIGHT TO AWARD WITHOUT DISCUSSIONS TO THE MOST FAVORABLE INITIAL PROPOSAL."

The Army received an offer from ADT at a price of $416,873, and one from Sonitrol at $228,692. Based on its evaluation of the proposals, a technical review board recommended that the contract be awarded to Sonitrol.

The board concluded that both offerors were qualified and capable of completing the project although Sonitrol's proposal did a better job of spelling out what they proposed to do. In addition, according to the board, while ADT did a more thorough job of describing shop drawings, system wiring diagrams, operation and maintenance manuals, catalog cuts and specifications, its proposal did not mention a performance bond, 24- hour battery back-up, UL Grade AA line security, a performance schedule or spare parts. Further, the board stated that contrary to the solicitation, which made the contractor responsible for trenching and backfilling, ADT's proposal made this work the government's responsibility. The evaluation board assigned a technical score of 585 (out of 1,020 possible points) to ADT and a score of 699 to Sonitrol. In recommending that award be made to Sonitrol, the board emphasized the firm's low price stating that "price was an overruling consideration."

In deciding to award the contract to Sonitrol, the source selection authority concluded that both proposals were either technically acceptable or susceptible of being made acceptable. In addition, he decided that discussions would have no practical effect on the outcome and that award should be based on initial proposals without discussions as permitted by the solicitation since Sonitrol's proposal was higher rated technically and offered the lowest price.

ADT first argues that in selecting Sonitrol for award, the contracting agency reversed the relative importance of the evaluation factors set forth in the solicitation. The RFP mandated that "primary consideration would be given to the technical evaluation rather than cost or price." ADT notes that the chairman of the evaluation panel in his award recommendation stated that "[p]rice was an overwhelming consideration." According to the protester, the chairman's statement demonstrates that the evaluators gave greater consideration to price than technical merit in the evaluation, contrary to the terms of the RFP.

We do not agree. There is no evidence in the record that contracting officials reversed or otherwise varied from the evaluation scheme set forth in the solicitation. The quoted statement by the chairman of the evaluation panel was simply a reflection of the large disparity in the prices offered. In this respect, the chairman pointed out that given ADT's price of $416,873, and Sonitrol's price of $228,692, and considering the high technical score awarded to the Sonitrol proposal, ADT had little or no chance for award. In our view, that conclusion is reasonable and consistent with the evaluation scheme in the solicitation.

ADT also argues that the agency failed to conduct discussions, which the protester contends were required because: (1) the RFP did not include the clause at Federal Acquisition Regulation (FAR) Sec. 52.215-16(c) Alternate III, expressing the agency's intent to make award without discussions; and (2) there were technical deficiencies in its proposal which could have been resolved in discussions, resulting in an increase in its technical score. Under the Competition in Contracting Act of 1984 (CICA), 10 U.S.C. Sec. 2305(a)(2)(B)(ii), as amended by the National Defense Authorization Act for Fiscal Year 1991, Pub. L. No. 101-510, Sec. 802, 104 Stat. 1485, 1588, solicitations for competitive proposals must contain:

"A statement that the proposals are intended to be evaluated with, and award made after, discussions with the offerors, or a statement that the proposals are intended to be evaluated, and award made, without discussions with the offerors (other than discussions conducted for the purpose of minor clarification), unless discussions are determined to be necessary;"

This provision, as implemented by FAR Sec. 15.407(d)(4) requires that all solicitations for competitive proposals issued by the Department of Defense, the Coast Guard and the National Aeronautics and Space Administration shall include either the notice at FAR Sec. 52.215-16(c) Alternate II, if the contracting officer intends to hold discussions, or FAR Sec. 52.215-16(c) Alternate III, if the contracting officer intends to award without discussions.

The solicitation here did not include either FAR Sec. 52.215-16(c) alternate. Rather, as explained above, with respect to discussions, the RFP stated that discussions "may" be held and that the government reserved the right to award without discussions based on initial proposals. As a result, we dismiss as untimely ADT's argument that discussions were required to be held because the solicitation did not include Alternate III.

Under our Bid Protest Regulations, protests based upon alleged improprieties in a solicitation must be filed prior to the time set for receipt of initial proposals. 4 C.F.R. Sec. 21.2(a)(1) (1992). Here, ADT knew at the time it received the RFP that the solicitation failed to include either the current Alternate III clause, which was required if the agency intended to award the contract on the basis of initial proposals, or the Alternate II clause, which states that the agency intends to hold discussions. If ADT desired that the solicitation clearly set forth the contracting officer's intentions regarding discussions, it was required to protest this matter before the closing date for receipt of proposals. See Warren Pumps, Inc., B-248145.2, Sept. 18, 1992, 92-2 CPD Para. 187.

Since ADT failed to timely protest the terms of the RFP regarding discussions, we need only to decide whether the award, which was based on initial proposals without discussions, was consistent with the terms actually included in the solicitation. The RFP stated that "discussions may be conducted. . . . HOWEVER, THE GOVERNMENT RESERVES THE RIGHT TO AWARD WITHOUT DISCUSSIONS TO THE MOST FAVORABLE INITIAL PROPOSAL." Thus, since the RFP advised offerors that award could be made without discussions, we think that the award to Sonitrol, the highest technically rated and lowest priced offeror, was proper and consistent with the terms of the solicitation.

ADT also argues that Sonitrol's proposal should have been rejected or downgraded for failing to meet the requirements of Defense Intelligence Agency Manual (DIAM) 50-3, referred to in the RFP. The solicitation scope of work stated: "When applicable, transmission line security for Sensitive Compartmented Information Facilities (SCIF) shall be in accordance with Defense Intelligence Agency Manual [DIAM] 50-3, dated February 1990, and any changes thereto." ADT argues that DIAM 50-3 mandates that all IDS installed for the Department of Defense (DOD), including those required by this solicitation, must be Underwriters Laboratory (UL) listed and be installed by a UL-listed company and that Sonitrol was not UL listed at the time of award and cannot obtain UL listing in time to perform the contract. In addition, ADT maintains that DIAM 50-3 requires alarm installation and maintenance by individuals with DOD security clearances and Sonitrol does not have cleared personnel.

With respect to UL listing, DIAM 50-3 calls for the contractor to provide a UL certificate for installation and service in order for equipment to be accepted. As ADT notes, the solicitation also stated that the system and its components shall conform to UL standards 611, 636, 639, and 681. With respect to security clearances, DIAM 50-3 states that alarm installation and maintenance will be accomplished by individuals with the appropriate security clearances. Thus, the solicitation did not require that offerors be either UL listed or that each offeror's installation personnel have security clearances before award. Rather, the terms of DIAM 50-3, including UL listing and security clearances, are performance requirements.

There is nothing in Sonitrol's proposal that indicates that the firm will not meet all of the solicitation's performance requirements. See TLC Sys., B-223179.2, Aug. 22, 1986, 86-2 CPD Para. 215. Moreover, ADT does not state that its proposal shows that it is a UL-listed installer, and we can find no such reference in the proposal.

There is nothing in the evaluation record showing that the board separately considered these particular aspects of the RFP's work statement. Under the circumstances here, where there is nothing in the RFP that required offerors to include in their offers information concerning its UL listing and security clearances and where neither firm's offer contained any indication that these requirements would not be complied with, we see no reason why the awardee's offer should have been either rejected or downgraded.

Whether Sonitrol can, in fact, perform consistent with the terms of the solicitation, including requirements for UL listing and security clearances, is a matter of responsibility. E.J. Murray Co., Inc.; W.M. Schlosser Co., Inc., B-212107; B-212107.2, Mar. 16, 1984, 84-1 CPD Para. 316; Ktech Corp.; Physical Research, Inc., B-241808; B-241808.2, Mar. 1, 1991, 91-1 CPD Para. 237. The contracting officer has concluded that Sonitrol is responsible, that is, the firm is capable of satisfactory performance, including meeting the requirements for UL listing and security clearances. This Office does not review an agency's affirmative determination of responsibility unless the protester shows either that the determination was made fraudulently or in bad faith or that definitive responsibility criteria in the solicitation were not met. 4 C.F.R. Sec. 21.3(m)(5). ADT has not alleged fraud or bad faith and the requirements of DIAM 50-3, including UL listing and security clearances, are contract performance requirements and not definitive responsibility criteria. E.J. Murray Co., Inc.; W.M. Schlosser Co., Inc., supra; Ktech Corp.; Physical Research, Inc., supra. Accordingly, we dismiss these protest grounds to the extent ADT argues that Sonitrol will not be able to perform because of the alleged lack of a UL listing and cleared personnel.

Finally, ADT notes that the solicitation's proposal preparation instructions at section L.24 called for "TWO OR MORE WRITTEN QUOTATIONS . . . FOR ALL MATERIAL, SUBCONTRACT WORK AND EQUIPMENT RENTALS." Sonitrol's proposal identifies only a single subcontractor and, as a result, ADT argues that the proposal was unacceptable.

Since ADT's proposed price was significantly higher than that proposed by Sonitrol, we do not see how the protester was prejudiced by the failure of Sonitrol to comply with the RFP instruction to submit the names of two subcontractors.

The protest is denied in part and dismissed in part.