Matter of: Henkels & McCoy, Inc. File: B-250875; B-250875.2; B-250875.3 Date: February 24, 1993

Matter of: Henkels & McCoy, Inc. File: B-250875; B-250875.2; B-250875.3 Date: February 24, 1993

PROCUREMENT Competitive Negotiation Discussion reopening Propriety Best/final offers Corrective actions Agency's proposed corrective action of reopening discussions and requesting best and final offers from all competitive range offerors to correct its failure to properly evaluate the awardee's proposal, which was noncompliant with RFP requirements, and to conduct meaningful discussions with regard to that proposal, is proper where the proposal deficiencies were reasonably regarded as being susceptible to correction through discussions. PROCUREMENT Bid Protests GAO procedures Preparation costs Administrative remedies Protester is not entitled to protest costs where agency promptly took corrective action in response to supplemental protest, which for the first time identified what aspects of the awardee's proposal were unacceptable.

Attorneys

DECISION Henkels & McCoy, Inc. protests an award to Intelcom Support Services, Inc. under request for proposals (RFP) No. F11624-92-R-0004 issued by the Department of the Air Force, Communications Systems Program Office, for furnishing, installing and testing a Base Distribution System (tele-communication system) at K.I. Sawyer Air Force Base, Marquette, Michigan.

We deny the protests in part and dismiss them in part.

The Air Force evaluated the proposals received in response to the RFP and made a competitive range determination that included the proposals of Henkels and Intelcom. The Air Force conducted discussions with the offerors whose proposals have been found to be in the competitive range and requested best and final offers (BAFO). The Air Force evaluated these offerors' proposals and, in accordance with the RFP, awarded a contract on September 30, 1992, to the low-priced offeror that was determined to be technically acceptable--Intelcom.

Henkels protested the award on October 13, asserting that Intelcom's proposal was unacceptable for a number of specified reasons and that its pricing breakdown suggested that its proposal was unbalanced and may not comply with the RFP's technical requirements. On November 17, the Air Force submitted a report responding in detail to Henkels's bases for protest, concluding that there was no evidence that Intelcom's proposal was not technically acceptable. This report provided a complete copy of Intelcom's proposal and applicable evaluation documentation to the protester's counsel and experts under the protective order. Based upon a review of the protected material, Henkels, on December 3, filed an amended protest, alleging that Intelcom's proposal did not satisfy certain RFP requirements; these newly alleged instances of noncompliance were not specifically raised in Henkels's initial protest.

On December 31, the Air Force informed our Office that it had reviewed its evaluation of Intelcom's proposal in light of Henkels's amended protest and determined that Intelcom's proposal did not satisfy the RFP requirements. The Air Force acknowledged that its prior evaluation failed to identify these deficiencies and that, as a result of the flawed evaluation, the Air Force failed to notify Intelcom during discussions of these deficiencies in its proposal, which had the effect of depriving Intelcom of meaningful discussions as required by Federal Acquisition Regulation (FAR) Sec. 15.610. In order to correct the errors in the source selection process, the Air Force has decided to reopen discussions and request new BAFOs, and considers Henkels's protests to be academic.

On January 4, 1993, Henkels protested the Air Force's proposed corrective action. Henkels alleges that Intelcom's proposal deficiencies rendered Intelcom's proposal unacceptable and not eligible for award. Henkels asserts that the only acceptable corrective action is for the Air Force to eliminate Intelcom from consideration and to award a contract to Henkels, the remaining lowest priced, technically acceptable offeror.

We generally will not object to corrective action which places all offerors in the same competitive posture they enjoyed prior to the defect in the source selection process. Power Dynatec Corp., B-236896, Dec. 6, 1989, 89-2 CPD Para. 522, aff'd, B-236896.2, Apr. 20, 1990, 90-1 CPD Para. 404. This is so because contracting officials have broad discretion to determine the corrective action necessary to ensure a fair and equal competition. Oshkosh Truck Corp.; Idaho Norland Corp., B-237058.2; B-237058.3, Feb. 14, 1990, 90-1 CPD Para. 274. Thus, where a contracting agency determines after award that the awardee's BAFO did not comply with the RFP requirements, the agency is not required to eliminate the awardee from the competition, but may afford the awardee an opportunity to correct its proposal by reopening negotiations with all competitive range offerors and then allowing all offerors an opportunity to submit a second round of BAFOs. Power Dynatec Corp., supra.

Here, the corrective action proposed by the Air Force is appropriate since the deficiencies identified as a result of Henkels's protest are susceptible to correction by Intelcom through meaningful discussions. While Henkels disagrees with the Air Force's assessment that Intelcom's proposal should still be considered within the competitive range, based on our review of Intelcom's proposal we are not persuaded that the Air Force's judgment in this matter lacks a reasonable basis, particularly since Intelcom submitted the low-priced proposal.

That being so, since the Air Force did not advise Intelcom of the deficiencies during discussions, Intelcom did not receive the benefit of meaningful discussions. Agencies are generally required to conduct discussions with all responsible offerors who submit proposals within the competitive range. FAR Sec. 15.610(b). Discussions with offerors whose proposals are found to be in the competitive range are required to be meaningful; that is, an agency is required to point out weaknesses, excesses or deficiencies in proposals unless doing so would result in technical transfusion or technical leveling. FAR Sec. 15.610(c), (d); Mikalix & Co., 70 Comp.Gen. 545 (1991), 91-1 CPD Para. 527; Columbia Research Corp., B-247631, June 22, 1992, 92-1 CPD Para. 539. Discussions cannot be meaningful if an offeror is not advised, in some way, of the weaknesses, deficiencies or excesses in its proposal that must be addressed in order for the offeror to be in line for award. Id. Under these circumstances, where the award was made to an offeror whose proposal was unacceptable, but reasonably susceptible to being made acceptable through meaningful discussions, the Air Force's decision to reopen discussions with the competitive range offerors, instead of making award to Henkels, the next low priced acceptable offeror, is reasonable.

In sum, the Air Force's proposed corrective action essentially resolves for all parties any adverse affects which the agency's admitted defective source selection process may have produced since it places all offerors in the same competitive position they enjoyed prior to the defects in the source selection process. Power Dynatec Corp., supra. Henkels's protest of the proposed corrective action is denied, and Henkels's earlier filed protests of the source selection process are dismissed as academic. See East West Research, Inc.--Recon., B-233623.2, Apr. 14, 1989, 89-1 CPD Para. 379.

Henkels also requests that we declare it entitled to recover its costs of filing and pursuing its protests since corrective action was taken in response to its protests. See 4 C.F.R. Sec. 21.6(e). Here, the Air Force proposed corrective action within 1 month of the filing of Henkels's amended protest, which first made the agency aware of deficiencies in Intelcom's proposal. We consider this corrective action sufficiently prompt to warrant the denial of the protester's claim for costs. See R.J. Sanders, Inc.--Claim for Costs, B-245388.2, Apr. 14, 1992, 92-1 CPD Para. 362. We do not find the promptness of the agency's corrective action should be measured from Henkels's initial protest; the initial protest was not clearly meritorious since it did not identify in any way the aspects of Intelcom's proposal that ultimately were determined technically unacceptable. Network Software Assocs., Inc.--Request for Declaration of Entitlement to Costs, B-250030.4, Jan. 15, 1993, 93-1 CPD Para. ; compare Carl Zeiss, Inc.--Request for Entitlement to Costs, B-247207.2, Oct. 23, 1992, 92-2 CPD 274 (initial protest was clearly meritorious in that it identified specific areas where the awardee's proposal was unacceptable but the agency only took corrective action after receipt of protester's comments elaborating on the deficiencies; this was not considered prompt corrective action by the agency even though the initial protest was clearly meritorious, and the protester was therefore entitled to its protest costs). Here, any delay in implementing the corrective action is solely attributable to Henkels's protest of the corrective action, not to agency action or inaction.

The protests are denied in part and dismissed in part; the claim for costs is denied.