B-180919, JAN 13, 1975

B-180919, JAN 13, 1975

1. PROTEST THAT UNAUTHORIZED REQUEST OF NON-GOVERNMENT MEMBER OF SOURCE EVALUATION BOARD FOR REVISED COST ESTIMATES AFTER CLOSE OF DISCUSSIONS PREJUDICED PROTESTER'S COMPETITIVE POSITION IS UNSUBSTANTIATED BY RECORD SINCE THERE IS NO EVIDENCE THAT INFORMATION WAS PASSED TO COMPETITORS AND CLOSENESS OF PRICES IS NOT SUFFICIENT TO SUSTAIN ALLEGATION. 2. WHEN PROTEST THAT ACTIONS OF NON-GOVERNMENT MEMBER OF SOURCE EVALUATION BOARD WERE PREJUDICIAL TO PROTESTER IS NOT RAISED UNTIL AFTER IT APPEARS PROTESTER WILL NOT RECEIVE AWARD, PROTESTER, HAVING ACQUIESCED AND PARTICIPATED IN PROCEDURE IT KNEW WAS IRREGULAR, CANNOT NOW COMPLAIN. 3. REVISION TO PROPOSAL RECEIVED BY AGENCY LATE AND NOT FALLING WITHIN STATED EXCEPTIONS CANNOT BE CONSIDERED.

DATA WEST CORPORATION; EDMAC ASSOCIATES INC.:

DATA WEST CORPORATION (DATA WEST) PROTESTED THE ACTIONS OF THE DEPARTMENT OF TRANSPORTATION, FEDERAL RAILROAD ADMINISTRATION (DOT), THAT LED TO THE AWARD OF A CONTRACT TO THE DATACOM CORPORATION (DATACOM) UNDER REQUEST FOR PROPOSALS (RFP) NO. DOT-FR-40009 FOR STAGE 1 OF AN INTEGRATED COMPUTER SYSTEM NETWORK (ICSN) FOR THE WHEEL/RAIL DYNAMICS SIMULATOR AT DOT'S HIGH SPEED GROUND TEST CENTER, PUEBLO, COLORADO. EDMAC ASSOCIATES, INC. (EDMAC), ALSO PROTESTED AGAINST THE AWARD.

THE RFP CALLED FOR PROPOSALS FOR EQUIPMENT FOR A PROFILE GENERATOR SYSTEM, MONITOR/DIAGNOSTIC/PROGNOSTIC SYSTEM, DATA ACQUISITION SYSTEM, AND A WHEEL MODULE CONTROL SYSTEM. THE EQUIPMENT SIMULATES AND APPLIES REALISTIC STATIC AND DYNAMIC FORCES TO VEHICLES UNDER CONTROLLED CONDITIONS. THE DATA OBTAINED FROM THE SIMULATION WILL BE USED FOR VEHICLE IMPROVEMENT AND TO MINIMIZE DANGER TO PERSONNEL AND EQUIPMENT.

THE RFP, ISSUED AUGUST 6, 1973, REQUIRED PROPOSALS BY SEPTEMBER 17. PROPOSALS WERE RECEIVED TIMELY FROM DATA WEST, DATACOM, EDMAC, AND THE BOEING COMPANY. THE PRELIMINARY EVALUATION OF OFFERS PERFORMED BY A TECHNICAL EVALUATION TEAM WAS CONCLUDED ON OCTOBER 5. ON OCTOBER 16, QUESTIONS CONCERNING AMBIGUITIES AND UNCERTAINTIES OF THE PROPOSALS WERE MAILED TO ALL OFFERORS FOR CLARIFICATION. RESPONSES WERE RECEIVED BY OCTOBER 29. AFTER A REVIEW OF THE RESPONSES, ALL OFFERORS WERE DETERMINED TO BE IN THE PRELIMINARY COMPETITIVE RANGE.

DURING THE PERIOD OF NOVEMBER 16 THROUGH 30, ONSITE INSPECTIONS AND ORAL DISCUSSIONS OF FACILITIES WERE CONDUCTED BY THE CHAIRMAN, SOURCE EVALUATION BOARD (SEB), AND THREE NON-GOVERNMENT INDIVIDUALS THAT WERE TECHNICAL ADVISORS TO THE SEB. THE SEB WAS COMPRISED OF A CHAIRMAN, SIX VOTING MEMBERS AND SIX NON-VOTING MEMBERS. IN ADDITION, WYLE LABORATORIES (WYLE) PROVIDED EIGHT INDIVIDUALS TO HELP IN THE EVALUATION OF TECHNICAL PROPOSALS. THREE OF THOSE INDIVIDUALS PARTICIPATED IN THE DISCUSSIONS AND EVALUATION OF COST PROPOSALS. THIS APPROACH, UTILIZING NON-GOVERNMENT PERSONNEL IN THE EVALUATION PROCESS, WAS CONSIDERED NECESSARY BECAUSE OF THE LACK OF TECHNICAL EXPERTISE WITHIN DOT. THE FACT THAT WYLE HAD DESIGNED THE SYSTEM BEING PROCURED INFLUENCED THE DECISION TO UTILIZE WYLE PERSONNEL FOR EVALUATION OF PROPOSALS. THE ASSISTANCE WAS CONTEMPLATED BY THE WYLE DESIGN CONTRACT. IN ACCORDANCE WITH DOT ORDER 4200.11 (1972), WYLE PARTICIPANTS SIGNED CERTIFICATES OF NONDISCLOSURE AND STATEMENTS OF FINANCIAL INTERESTS. THE RFP APPRISED ALL OFFERORS OF THE POSSIBLE PARTICIPATION OF NON-GOVERNMENT PERSONNEL IN THE CONDUCT OF NEGOTIATIONS AND PROPOSAL EVALUATION. PARAGRAPH 1.2.1.2 OF THE PROPOSAL INFORMATION AND REQUIREMENTS STATED:

"THE SEB MAY USE SPECIAL ADVISERS, INCLUDING PERSONNEL FROM WYLE LABORATORIES. THE OFFEROR AGREES, BY SUBMISSION OF A PROPOSAL, THAT REPRESENTATIVES OF THE ABOVE NAMED FIRM MAY REVIEW HIS PROPOSAL FOR PURPOSES OF EVALUATION ONLY. ***"

NONE OF THE OFFERORS OBJECTED TO THIS PROVISION.

DISCUSSIONS WERE CONDUCTED WITH ALL OFFERORS BETWEEN DECEMBER 13 AND 21. DATA WEST HAS PROTESTED THE MANNER IN WHICH IT AND ITS PROPOSAL WERE HANDLED DURING THIS PERIOD. DISCUSSIONS WERE CONDUCTED WITH DATA WEST ON DECEMBER 18 AND 19. PRESENT AT THE SESSIONS FOR DOT WERE THE CHAIRMAN, SEB, A TECHNICAL MEMBER, A PRICING/AUDIT MEMBER, A NON VOTING PROCUREMENT MEMBER AND THREE WYLE EMPLOYEES DESIGNATED TO PARTICIPATE IN THE COST/TECHNICAL NEGOTIATIONS. THE PRESIDENT AND TWO EMPLOYEES REPRESENTED DATA WEST. DOT'S RECORDS INDICATE THAT, SINCE A FIRM FIXED-PRICE CONTRACT WAS CONTEMPLATED AND ALL FIRMS HAD BEEN DETERMINED TO BE TECHNICALLY CAPABLE OF PERFORMING THE CONTRACT, THE MAIN EMPHASIS OF THE NEGOTIATIONS WAS PRICE.

THE FOLLOWING IS DATA WEST'S VERSION OF WHAT TRANSPIRED:

"ITEM 1: THE DATA WEST GROUP ARRIVED AT THE DEPARTMENT OF TRANSPORTATION ABOUT TWENTY MINUTES PRIOR TO THE 9 A.M. APPOINTMENT ON THE MORNING OF DECEMBER 19, 1973 TO MEET WITH THE EVALUATION BOARD. (M), A MEMBER OF THE WYLE PORTION OF THE EVALUATION BOARD HAPPENED TO BE IN THE CONFERENCE ROOM PRIOR TO THE ATTENDANCE OF OTHER MEMBERS OF THE BOARD. HE INDICATED TO US, 'YOU FELLOWS ARE GOING FINE, JUST FOLLOW MY LEAD AND "DON'T MAKE WAVES",' INDICATING THAT HIS AUTHORITY ON THE BOARD CAN BE PUT INTO POSITIVE DIRECTION AND THAT IT WOULD BE OF ADVANTAGE TO US TO ACCEPT THIS DIRECTION IF WE WERE INTERESTED IN GETTING THE AWARD. THIS INFORMATION WAS NOT REQUESTED OR SOLICITED AND WE FEEL THAT IT WAS OUT OF CONTENT AS FAR AS THE CLIMATE OF THE NEGOTIATIONS WHICH WERE ABOUT TO START.

"ITEM 2: ON DECEMBER 19, 1973 AT ABOUT 12:30 P.M. IN THE CAFETERIA AT THE DOT BUILDING IN WASHINGTON D.C. AND DURING THE LUNCH HOUR, (M) JOINED US AT OUR TABLE, UNINVITED AND UNREQUESTED. THIS MEETING TOOK PLACE DURING THE TIME OF THE NEGOTIATIONS AND CERTAINLY DID NOT CONCUR WITH GOOD GOVERNMENT PROCUREMENT PRACTICES. HE INDICATED TO THE MEMBERS OF OUR GROUP, M.D. FISHBERG, R.H. OLSON AND MYSELF THAT WE SHOULD FOLLOW HIS LEAD. THIS POINT WAS NOT UNDERSTOOD UNTIL AFTER NEGOTIATIONS, AS THERE NEVER WAS AN OPPORTUNITY FOR DATA WEST TO PRESENT A REBUTTAL TO OUR SUPPOSED WEAK POINTS. WE QUESTION THE POSITION WHICH (M) TOOK IN BREAKING HIS TRUST WITH THE DEPARTMENT OF TRANSPORTATION AND SUPPOSEDLY GIVING US ADVICE OUT OF CONTENT TO PROCUREMENT PRACTICES.

"ITEM 3: AT THE TERMINATION OF THE MEETING ON DECEMBER 19, THE BOARD IN TOTAL ASKED DATA WEST FOR A 'BALL PARK' FIRM AND FINAL PRICE IN 0F60 FORMAT COVERING THE COST TO THE GOVERNMENT. WE KNEW THAT THERE WAS AN ERROR IN OUR PARTICULAR PRICING AND THAT WE COULD NOT, ON SUCH SHORT NOTICE, COME UP WITH A NUMBER AT THAT TIME. TO FURTHER THIS SITUATION, ON THE EVENING OF DECEMBER 19, M.D. FISHBERG, A MEMBER OF THE DATA WEST GROUP, RECEIVED A PHONE CALL AT 10 P.M. FROM (M). (M) INDICATED THAT THE REASON FOR HIS CALL WAS TO REQUEST THE FIRM AND FINAL PRICE WHICH WAS REQUESTED EARLIER THAT DAY. WE CHALLENGE VERY STRONGLY THE AUTHORITY (M) TOOK AND THE TECHNIQUE WHICH SUPPOSEDLY THE EVALUATION BOARD TOOK IN REQUESTING INFORMATION OF THIS TYPE THROUGH UNOFFICIAL CHANNELS. IF SUCH INFORMATION WAS OFFICIALLY REQUESTED AND IT WOULD BE PASSED ON TO THE BOARD, IT SHOULD HAVE BEEN DONE THROUGH THE REQUEST OF THE CONTRACT ADMINISTRATOR AND NOT THROUGH (M). TO THIS DATE, WE HAVE NO DOCUMENTED PROOF THAT THIS INFORMATION WAS PASSED ON TO THE BOARD AND ANY ADMITTANCE BY THE BOARD TO THE FACT THAT THEY DID RECEIVE THIS INFORMATION WOULD BE PURE CONJECTURE AT THIS TIME. IF THE BOARD REQUIRED THIS INFORMATION, THERE WERE OTHER TECHNIQUES AND METHODS TO UTILIZE THROUGH FORMAL CHANNELS AND NOT A PHONE CALL AT 10 P.M. TO OUR HOTEL ROOM. IF THE BOARD USED THIS TECHNIQUE, THEN IT ALSO ACTED OUTSIDE THE SCOPE OF GOVERNMENT PROCUREMENT TECHNIQUES. (M) REQUESTED EMPHATICALLY THAT THIS INFORMATION BE MADE AVAILABLE AND THAT HE WOULD MEET WITH US THE NEXT MORNING AT AN EARLY HOUR (PRIOR TO A MEETING WITH ANOTHER POTENTIAL VENDOR - WHO FINALLY RECEIVED THE AWARD). IN ATTENDANCE DURING THE PHONE CONVERSATION BESIDE MR. FISHBERG, MR. HOLZER WAS ALSO IN THE ROOM.

"ITEM 4. ON THE MORNING OF DECEMBER 20 AT 7 A.M. IN THE COFFEE SHOP OF THE MARRIOTT TWIN BRIDGES, R.H. OLSON, M.D. FISHBERG AND I WERE HAVING BREAKFAST. (M) MADE HIS APPEARANCE AND AGAIN FORMALLY REQUESTED OUR PRICING INFORMATION WHICH WAS GIVEN TO HIM AS A REPRESENTATIVE OF THE EVALUATION BOARD AND DESIGNATED IN SUCH A WAY THAT THIS CRITICAL INFORMATION IF USED INDISCRIMINATELY WOULD HAVE A VERY NEGATIVE EFFECT ON THE POSSIBILITY OF DATA WEST BEING AWARDED A SO-CALLED 'LOW BID AWARD'. (M) WAS PRESENTED WITH TWO PRICING SCHEMES IN THE 0F60 FORMAT WHICH IF NOT USED CORRECTLY COULD HAVE BEEN VERY REVEALING WITH REFERENCE TO THE DATA WEST POSITION AT THAT TIME. ONE APPROACH WAS PRICED WITH VARIAN DOING THE MEMORY SHARING, AND THE OTHER WITH DATA WEST DOING THE MEMORY SHARING. THE PRICE FOR THE LATTER WAS CONSIDERABLY LOWER. DATA WEST CHALLENGES, VERY STRONGLY, THE LEGALITY OF THE DEPARTMENT OF TRANSPORTATION IN THIS MATTER AND ALSO CHALLENGES (M'S) POSITION IF A REPRESENTATIVE OF THE DEPARTMENT OF TRANSPORTATION. (M) INDICATED TO US THAT HE WAS ACTING AS AN AGENT OF THE DEPARTMENT OF TRANSPORTATION AND THAT HE WAS LEGALLY REPRESENTING THE DEPARTMENT IN TRANSMITTING THIS INFORMATION TO THE BOARD. SINCE THIS INCIDENT, THE CONTRACTS DEPARTMENT OF THE DEPARTMENT OF TRANSPORTATION INDICATED TO ME THAT (M) DID PASS ON (WHICH WE STRONGLY QUESTION) THE PRICING INFORMATION TO THE EVALUATION BOARD. WE QUESTION THE RIGHT, AGAIN, OF THE DEPARTMENT OF TRANSPORTATION TO HAVE CRITICAL INFORMATION OF THIS TYPE HANDLED IN SUCH A HAPHAZARD, UNOFFICIAL WAY AS IT WAS HANDLED BY (M) AND THE BOARD, IF AT THAT TIME, HE REALLY REPRESENTED THE BOARD. IF HE DID, THEN THE BOARD ACTED OUT OF CONTENT AS FAR AS GOVERNMENT PROCUREMENT PRACTICES ARE CONCERNED.

"ITEM 5: ON JANUARY 10, 1974, PRIOR TO SUBMITTAL OF FIRM AND FINAL, MR. FISHBERG OF THE DATA WEST CORPORATION RECEIVED A LONG DISTANCE CALL FROM (M) IN WHICH HE ASKED IF WYLE HAD LEFT TWO REELS OF TAPE WHEN THEY WERE AT DATA WEST TO ACCEPT THE LAST SYSTEM. THIS DISGUISE FOR THE CALL WAS THEN FORTIFIED WITH THE FOLLOWING STATEMENT, 'DON'T FORGET, WE ARE NOT HAVING THIS CONVERSATION', AND MR. FISHBERG WAS ASKED IF DATA WEST WAS GOING TO DO THE MEMORY SHARING OR CONTRACT IT TO VARIAN. HE TOLD (M) (WHO HAD NO RIGHT TO ASK FOR THIS INFORMATION AS A MEMBER OF THE EVALUATION BOARD) THAT DATA WEST HAD SENT IN THE FIRM AND FINAL PRICING WITH THE MEMORY SHARING BEING DONE IN-HOUSE. (M) ASKED (OUT OF CONTENT) MR. FISHBERG TO JUSTIFY THE RATIONALE BEHIND THE IN-HOUSE APPROACH BECAUSE HE WOULD HAVE TO JUSTIFY IT TO THE BOARD. WE AGAIN CHALLENGE THE UNOFFICIAL APPROACH PRACTICED BY THIS REPRESENTATIVE OF THE DEPARTMENT OF TRANSPORTATION IN FINDING OUT CRITICAL INFORMATION OUT OF NORMAL LINES OF OFFICIAL CONTACT.

"ON FEBRUARY 15, 1974, MR. FISHBERG CALLED (M) TO LET HIM KNOW THAT A LATE BID WAS SUBMITTED BY DATA WEST ACCORDING TO THE GOVERNMENT'S TERMS AND CONDITIONS. THE FOLLOWING STATEMENT HAS GREAT RELEVANCY IN THE UNOFFICIAL CHANNELS TAKEN BY REPRESENTATIVES OF THE DEPARTMENT OF TRANSPORTATION. MR. FISHBERG INDICATED THAT IF THE LATE BID WAS NOT ACCEPTED (WHICH WAS LEGAL BY THE INTERPRETATION OF THE TERMS AND CONDITIONS OF THE RFP) THAT DATA WEST WOULD PROTEST THE AWARD. (M) INDICATED TO MR. FISHBERG THAT 'HE SHOULD NOT MAKE WAVES' BECAUSE IT MIGHT RUIN DATA WEST CHANCES TO SUBCONTRACT THE MOST DIFFICULT PART OF THE CONTRACT, THE CONTROLLERS."

IT IS EDMAC'S POSITION THAT THE FOREGOING COURSE OF CONDUCT REQUIRES THE ELIMINATION OF BOTH DATA WEST AND DATACOM FROM PARTICIPATION IN THE CONTRACT. CONSEQUENTLY, IF DATA WEST'S CONTENTIONS ARE SUSTAINED, EDMAC ASSERTS THAT IT IS THE INNOCENT, INJURED PARTY AND SHOULD EITHER RECEIVE AWARD OF THE CONTRACT THAT IS TERMINATED OR OF ALL UNEXERCISED OPTIONS. ALTERNATIVELY, IT SUGGESTS THAT IT SHOULD RECEIVE PROPOSAL PREPARATION COSTS.

IN VIEW OF THE CHARGES MADE BY DATA WEST, OUR OFFICE REQUESTED DOT TO UNDERTAKE A SEPARATE INVESTIGATION. THE INVESTIGATION WAS CONDUCTED BY THE OFFICE OF INVESTIGATION AND SECURITY (OIS). A REPORT OF THE INVESTIGATION HAS BEEN FURNISHED TO OUR OFFICE; HOWEVER, DISCLOSURE OUTSIDE OF THE GOVERNMENT HAS BEEN RESTRICTED BY DOT.

FROM OUR REVIEW OF THE RECORD, IT APPEARS THAT MUCH OF THE FACTUAL RECITATION OF DATA WEST IS UNDISPUTED. IT IS DATA WEST'S CONCLUSIONS DRAWN FROM THE FACTS THAT ARE DISPUTED. THE OIS REPORT CONCLUDED THAT WHILE CERTAIN ACTIONS WERE OF QUESTIONABLE PROPRIETY, "THIS INVESTIGATION DID NOT UNCOVER ANY INDICATION THAT INFORMATION RECEIVED FROM ONE OFFEROR WAS PASSED TO ANOTHER OFFEROR BY ANY MEMBER OF THE SEB OR ITS ADVISORY TEAM COMPOSED OF WYLE LABORATORIES PERSONNEL." INTERVIEWS WITH PERSONNEL INVOLVED IN THE MATTER PROMPTED THE FOLLOWING OIS RECOUNTING OF EVENTS.

M INDICATED THAT WHILE THE FACTUAL RECITATION OF DATA WEST IS CORRECT, IN HIS VIEW, IT HAS BEEN MISINTERPRETED.

M STATES THAT HE VIEWED HIS ROLE IN THE NEGOTIATION SCHEME AS A REQUIREMENT OF THE WYLE DESIGN CONTRACT. AT THE BEGINNING OF THE SECOND DAY OF NEGOTIATIONS, DATA WEST SUBMITTED AN ALTERNATE PROPOSAL WHEREIN IT PROPOSED TO PRODUCE THE SHARED MEMORY RATHER THAN BUY IT. THIS WAS THE SUBJECT OF CONSIDERABLE DISCUSSIONS, AS WERE DATA WEST'S ATTENDANT MATERIAL COST BREAKDOWNS. THIS INFORMATION WAS NOT SUBMITTED IN THE FORM SPECIFIED IN THE RFP (0F60). AS THE NEGOTIATIONS WOUND DOWN, THE GOVERNMENT REQUESTED DATA WEST TO SUBMIT ITS TOTAL ESTIMATED PRICE. WHEN THIS WAS ACCOMPLISHED, THE MATERIAL COST FIGURES DID NOT MATCH THOSE OF THE GOVERNMENT AS COMPUTED ON THE BASIS OF THE PRECEDING DISCUSSIONS. AFTER A RECESS, NEGOTIATIONS AGAIN RESUMED. AGAIN, THE MATERIAL COST ESTIMATES OF THE GOVERNMENT AND DATA WEST DID NOT COINCIDE. HOWEVER, THE GOVERNMENT'S PRICE/AUDIT BOARD MEMBER ACCEPTED THE FIGURES. AFTER DATA WEST LEFT THE ROOM, M AND THE DOT PRICE/AUDIT MEMBER AGAIN REVIEWED THE PRICES, BUT WERE UNABLE TO COMPLETELY CORRELATE THEM. M STATES THAT HE VOLUNTEERED TO STRAIGHTEN OUT THE AMBIGUITY BECAUSE HE NEEDED TO MAINTAIN NOTES OF THE NEGOTIATION SESSION TO ASSURE THAT TECHNICAL INPUT DESIGNED BY WYLE GOVERNED THE PROPOSAL COSTS. THE DOT PRICE/AUDIT MEMBER HAS NO RECOLLECTION OF THIS CONVERSATION AND DOES NOT RECALL AUTHORIZING THE ACTION. ALSO, IT IS CLEAR THAT NO SEB MEMBER AUTHORIZED IT. M STATES THAT SINCE HE WANTED TO RECORD HIS NOTES OF THE NEGOTIATIONS, AND ANOTHER SESSION WAS SCHEDULED FOR THE NEXT DAY WITH ANOTHER OFFEROR, UPON ARRIVAL AT HIS MOTEL HE CALLED MR. HOLZER (PRESIDENT OF DATA WEST) AT APPROXIMATELY 6:30 P.M. SINCE THERE WAS NO ANSWER, M CONTINUED TO WORK ON HIS NOTES UNTIL 10:00 P.M. WHEN HE CALLED AGAIN. M IS NOT SURE WHETHER HE SPOKE TO MR. HOLZER OR MR. FISHBERG (DATA WEST EMPLOYEE). M REQUESTED THAT DATA WEST RECOMPUTE THE ESTIMATED PRICE THAT EVENING AND LEAVE IT IN AN ENVELOPE AT THE MOTEL DESK FOR HIM TO PICK UP IN THE MORNING. THE DATA WEST REPRESENTATIVE SUGGESTED THEY MEET IN THE DINING ROOM AT BREAKFAST. THE MEETING TOOK PLACE AS SCHEDULED. M STATES THAT THEN HE RETURNED TO HIS MOTEL, PICKED UP THE OTHER WYLE EMPLOYEES AND WENT TO THE NEGOTIATION ROOM WHERE HE IMMEDIATELY PASSED THE FIGURES TO THE PRICE/AUDIT GOVERNMENT BOARD MEMBER. M TOLD THE PRICE/AUDIT BOARD MEMBER THAT HE (M) HAD CALLED MR. HOLZER FOR THE ESTIMATES. COPIES WERE DUPLICATED FOR M AND THE SEB CHAIRMAN. THE ESTIMATED COST FIGURES OF ALL OFFERORS WERE THEN DISCUSSED BY THE SEB. THAT WAS THE END OF WYLE'S INVOLVEMENT EXCEPT FOR THE FINAL RECOMMENDATION WHICH CONFIRMED WHICH OFFER WAS LOW SINCE ALL OTHER DISCRIMINATORS HAD BEEN DETERMINED EQUAL.

M DISAGREES WITH DATA WEST'S ITEM 1. HE STATES THAT HIS COMMENT TO MR. HOLZER WAS OFFERED IN RESPONSE TO THE OBSERVATION THAT THE GOVERNMENT NEGOTIATION TEAM OUTNUMBERED HIM 2 TO 1. M TOLD MR. HOLZER THAT HE "*** WAS DOING FINE AND NOT TO WORRY ***." FURTHER, THE ROLES AND RESPONSIBILITIES OF EACH TEAM MEMBER WERE REVIEWED SO THAT M DISPUTES DATA WEST'S INFERENCE THAT HE COULD INFLUENCE THE SEB.

CONCERNING ITEM 2, M STATES THAT HE HAD FINISHED LUNCH AND WAS ABOUT TO LEAVE. HE STOPPED TO ASK IF "EVERYTHING WAS GOING OKAY, EXCHANGED A FEW WORDS ON THE AFTERNOON AGENDA" AND LEFT.

M RESPONDED TO ITEM 5 OF THE DATA WEST CONTENTIONS IN AN ATTACHMENT TO A MAY 13, 1974, LETTER FROM THE CONTRACTS MANAGER, WYLE LABORATORIES. THE RESPONSE WAS:

"ITEM 5, PARAGRAPH 1

THE STATEMENTS ACCREDITED TO ME OUTSIDE THE SUBJECTS COVERED IN THE DATA WEST INVOICE CONVERSATION ARE CORRECT IN THE INSTANCE THAT I INQUIRED AS TO THE MEMORY CONFIGURATION (I.E., 1 OR 2) SUBMITTED AFTER MR. FISHBERG HAD RELATED THAT WE HAVE SUBMITTED HIS FINAL PAPER WORK TO THE CONTRACTING OFFICER. (REFERENCE MR. CROSBY'S LETTER OF APRIL 12 TO MR. W. WILSON). IT IS NOT CORRECT THAT I ASKED MR. FISHBERG TO JUSTIFY THE RATIONALE BEHIND THEIR SELECTION. THE FACT IS I HAD NO CONVERSATION WITH MR. FISHBERG REGARDING ANY JUSTIFICATION AS ALL OF THAT HAD BEEN COVERED IN NEGOTIATIONS AND DIRECTED TO DATA WEST BY THE CONTRACTING OFFICER BOTH IN A VERBAL SUMMATION AND IN WRITTEN INSTRUCTIONS TO ALL THE OFFERORS.

"ITEM 5, PARAGRAPH 2

REGARDING THIS CONVERSATION, THE DATE REPORTED IS IN ERROR. I WAS IN WASHINGTON, D.C. ON FEBRUARY 15, 1974 AND UNAVAILABLE FOR HUNTSVILLE PHONE CALLS. I BELIEVE THE CORRECT DATE TO BE FEBRUARY 14, 1974. MR. FISHBERG, DURING THE PHONE CALL, TOLD ME HE WAS PUTTING HIS PROPOSAL INFORMATION AWAY AND THAT HE NOTICED THAT HIS PRICE AS SUBMITTED TO THE CONTRACTING OFFICER WAS NOT IN ACCORD WITH THE FRA/C&P OFFEROR'S INSTRUCTIONS. I TOLD HIM THAT WAS UNFORTUNATE AND THAT HIS ONLY RECOURSE WAS TO THE CONTRACTING OFFICER. HE THEN READ ME A PARAGRAPH FROM THE RFP CONTRACT INFORMATION (TERMS AND CONDITIONS) REGARDING LATE BID SUBMISSION. I AGAIN RECOMMENDED THAT HE REVIEW THE SITUATION WITH THE CONTRACTING OFFICER. MR. FISHBERG INFERRED THAT DATA WEST WOULD CONSIDER A PROTEST IF THE LATE BID WAS NOT CONSIDERED. I AGAIN TOLD HIM TO REVIEW THE MATTER WITH THE CONTRACTING OFFICER. I ALSO TOLD MR. FISHBERG IF THEY WERE NOT THE SUCCESSFUL CONTRACTOR, HIS ENGINEERS WOULD PROBABLY BE BETTER PLACED IN REVIEWING THE PROCUREMENT FOR SUBCONTRACT POSSIBILITIES. REGARDING THE STATEMENT ABOUT MAKING WAVES, I CAN ONLY SAY THAT THIS WAS INTENDED AS ADVICE COUCHED IN THE THOUGHT THAT DATA WEST'S IMMEDIATE PROBLEM WOULD BE BETTER RECEIVED IF THEY REVIEWED THE LATE SUBMISSION WITH THE CONTRACTING OFFICER AND DID NOT USE THE THREAT OF PROTEST. THE SUBCONTRACT SITUATION IS BEST RECEIVED IN THE LIGHT THAT, AS FAR AS I KNOW, ANY SUBCONTRACT EFFORT WOULD HAVE TO BE WORKED OUT WITH THE SUCCESSFUL BIDDER.

"ITEM 5, PARAGRAPH 3

TO THE BEST OF MY KNOWLEDGE, THE SUBJECT OF AN ALTERNATE APPROACH WAS FIRST BROUGHT TO MY ATTENTION IN DATA WEST'S LETTER OF OCTOBER 25, 1973 GIVEN TO ME BY MR. STATHES, CONTRACTING OFFICER. THIS WAS A COVER LETTER ENCLOSING WRITTEN ANSWERS AND INFORMATION CLARIFICATIONS BY DATA WEST TO DEFICIENCIES NOTED IN THE DATA WEST PROPOSAL BY THE EVALUATION TEAM. THE THIRD AND FOURTH PARAGRAPHS OF THIS LETTER MENTIONS THE ALTERNATE APPROACH. ON NOVEMBER 27 AND 28, 1973, THE EVALUATION TEAM MET AT DATA WEST FOR A TECHNICAL SURVEY. ON NOVEMBER 28, 1973, DATA WEST MADE A PRESENTATION OF AN ALTERNATE APPROACH TO ALL MEMBERS OF THE EVALUATION TEAM INCLUDING MYSELF. AT THE END OF THE PRESENTATION, IT WAS MUTUALLY AGREED AMONG THE EVALUATION TEAM MEMBERS THAT IF DATA WEST WANTED TO SUBMIT AN ALTERNATE APPROACH THEY HAVE EVERY RIGHT TO DO SO. DATA WEST WAS TOLD BY ME THAT THEY MUST STRUCTURE IT AS AN ALTERNATE APPROACH AND BE TOTALLY COMPLETE WITHIN ITSELF SUCH THAT THE ALTERNATE WOULD NOT JEOPARDIZE THEIR INITIAL POSITION WHICH WAS BEING EVALUATED. TO THE BEST OF MY RECOLLECTION, DATA WEST STATED THAT THEY WERE GOING TO PRESENT THIS APPROACH AS AN ALTERNATE AND IT WOULD BE IN THE HANDS OF THE CONTRACTING OFFICER WITHIN A FEW DAYS. FURTHER, I DID NOT PRIVATELY OR OTHERWISE ENCOURAGE OR DISCOURAGE DATA WEST REGARDING THIS ALTERNATE SUBMISSION."

MR. FISHBERG DIED BEFORE HE COULD BE INTERVIEWED. WHILE THERE APPEARS TO BE A FACTUAL DISPUTE AS TO WHAT WAS SAID DURING CERTAIN CONVERSATIONS, WE NEED NOT RESOLVE THAT CONTROVERSY. THE DEPARTURES FROM ESTABLISHED GOVERNMENT PROCEDURES ARE SERIOUS MATTERS WHICH WILL BE DISCUSSED INFRA. HOWEVER, OUR INITIAL CONSIDERATION IS WHETHER THE COURSE OF CONDUCT OPERATED TO DATA WEST'S COMPETITIVE DISADVANTAGE OR APPEARED TO SO COMPROMISE THE INTEGRITY OF THE COMPETITIVE NEGOTIATION SYSTEM AS TO REQUIRE CORRECTIVE ACTION. MATTER OF WILLAMETTE-WESTERN CORPORATION; PACIFIC TOWBOAT & SALVAGE CO., B-179582, B-179328, NOVEMBER 14, 1974, 54 COMP. GEN. .

THE TIMING OF DATA WEST'S PROTEST IS SIGNIFICANT SINCE WE ARE CONCERNED WITH COMPETITIVE PREJUDICE AND ITS POSSIBLE EFFECT UPON THE COMPETITIVE NEGOTIATION SYSTEM. AT THE TIME THAT M REQUESTED AND RECEIVED THE REVISED ESTIMATED COST PROPOSAL, THE SEB HAD DECIDED TO AWARD STRICTLY ON THE BASIS OF LOW PRICE IN VIEW OF THE DETERMINATION THAT ALL COMPETITORS WERE TECHNICALLY CAPABLE OF PERFORMING. THE RECORD SUBSTANTIATES THIS CONCLUSION. DATA WEST WAS AWARE THAT M'S REQUEST FOR THE PRICING INFORMATION WAS IRREGULAR AT THE TIME IT WAS MADE, YET, IT DID NOT COMPLAIN THEN.

WE ARE ALSO CONCERNED WITH THE CONDUCT OF ANOTHER WYLE EMPLOYEE, B, WHO DESIGNED THE ICSN FOR WYLE AND PARTICIPATED IN THE INITIAL EVALUATION OF THE TECHNICAL PROPOSALS. SHORTLY THEREAFTER HIS EMPLOYMENT WITH WYLE WAS TERMINATED. IN EARLY JANUARY 1974, HE CONTACTED DATA WEST FOR POSSIBLE EMPLOYMENT. WHILE PERFORMING VARIOUS TASKS FOR DATA WEST, IT BECAME APPARENT THAT PERMANENT EMPLOYMENT WAS DEPENDENT UPON RECEIPT OF THE ICSN AWARD BY DATA WEST. B STATES THAT, IN ORDER TO BETTER EVALUATE HIS EMPLOYMENT SITUATION, HE CALLED THE SEB CHAIRMAN. B OUTLINED HIS SITUATION AND ASKED THE CHAIRMAN FOR INFORMATION AS TO WHEN THE CONTRACT WOULD BE AWARDED OR WHO WAS LOW. THE CHAIRMAN WOULD NOT GIVE ANY DIRECT INFORMATION. HOWEVER, REFERENCES TO SUBCONTRACTING OPPORTUNITIES FOR DATA WEST AND POSSIBILITIES OF EMPLOYMENT WITH DATACOM OR DOT LEFT B WITH THE STRONG IMPRESSION THAT DATA WEST HAD NOT BEEN CHOSEN FOR AWARD. ALL OF THIS TRANSPIRED WHILE B WAS AN EMPLOYEE OF DATA WEST.

AFTER THIS CONVERSATION, MR. FISHBERG CONTACTED B FOR HIS OPINION AS TO THE FEASIBILITY OF SUBMITTING A LATE PROPOSAL IN VIEW OF A PRICE ERROR HE FOUND IN DATA WEST'S BEST AND FINAL PROPOSAL. B STATES THAT HE TOLD MR. FISHBERG THAT THE DOTPR'S WOULD HAVE TO GOVERN THAT DECISION. HE ALSO RELATED HIS PRECEDING CONVERSATION WITHOUT NAMING HIS SOURCE. WHILE NO DIRECT STATEMENT WAS MADE, B STATES THAT MR. FISHBERG COULD READILY HAVE ASSUMED FROM THE CONVERSATION THAT DATA WEST WOULD NOT RECEIVE THE AWARD. AGAIN, NO PROTEST WAS MADE. IT WAS NOT UNTIL THE LATE PROPOSAL HAD BEEN REJECTED THAT DATA WEST SUBMITTED ITS PROTEST.

DATA WEST'S PROTEST CONTAINS THE SUSPICION THAT ITS INTERMEDIATE PRICES MAY HAVE BEEN DISCLOSED. THERE IS NO INDICATION OF RECORD THAT THEY WERE. AN UNSUBSTANTIATED ALLEGATION THAT PRICES MAY HAVE BEEN DISCLOSED, EVEN COUPLED WITH AN OPPORTUNITY FOR SUCH CONDUCT, IS NOT SUFFICIENT TO REQUIRE AN AFFIRMATIVE CONCLUSION. FURTHER, DATA WEST HAD AN OPPORTUNITY TO SUBSEQUENTLY REVISE ITS PRICES, WHICH IT DID. IN THE CIRCUMSTANCES, WE BELIEVE THAT THERE WAS NO DEMONSTRABLE COMPETITIVE ADVANTAGE THAT ACCRUED TO ANY COMPETITOR AS A RESULT OF M'S ACTIONS. FURTHER, AS NOTED, DATA WEST DID NOT PROTEST THE CONDUCT IT SHOULD HAVE BEEN AWARE WAS IRREGULAR UNTIL IT APPEARED IT WOULD NOT BE AWARDED THE CONTRACT. THAT IS NOT TO MINIMIZE THE ADMINISTRATIVE IRREGULARITY OF THE NON-GOVERNMENT PERSONNEL ASSOCIATED WITH THE SEB.

WHEN QUERIED WHY DATA WEST DID NOT RAISE THE CHARGES AS THEY BECAME KNOWN, DATA WEST RESPONDED THAT IT DID NOT WANT TO CREATE PROBLEMS BECAUSE IT BELIEVED IT WOULD RECEIVE THE AWARD. DATA WEST INTERPRETED M'S ACTION AS POSITIVE TOWARDS DATA WEST'S POSITION. AS LONG AS IT WAS OF THAT OPINION, DATA WEST WAS WILLING TO PARTICIPATE IN THE IRREGULAR PROCUREMENT PROCESS. HOWEVER, DATA WEST CANNOT PARTICIPATE IN AN IRREGULAR COURSE OF ACTION AND THEN LATER BE HEARD TO COMPLAIN ABOUT THAT COURSE OF ACTION.

WHILE THE JUDGMENT EMPLOYED BY M WAS ADMITTEDLY POOR, WE DO NOT THINK THAT DATA WEST WAS PREJUDICED BY HIS ACTIONS. FIRST, IF M WANTED THE INFORMATION TO PASS TO A COMPETITOR, IT WOULD HAVE BEEN AVAILABLE TO HIM IN ANY EVENT. IF THAT HAD BEEN M'S PURPOSE, IT ILL BEHOOVED HIM TO CONDUCT HIMSELF IN SUCH A CONSPICUOUS MANNER. HE COULD HAVE AIDED ANOTHER COMPETITOR BY WAITING AND GAINING THE INFORMATION THROUGH NORMAL CHANNELS. SECOND, EVEN IF THERE WERE EVIDENCE THAT DATA WEST'S PRICE HAD BEEN DISCLOSED (WHICH THERE IS NOT) WE WOULD LOOK UNFAVORABLY ON ITS PROTEST IN VIEW OF ITS AMBIVALENCE IN PROTESTING THE ACTION. B 168130, JANUARY 14, 1970. MOREOVER, DATA WEST HAD A FURTHER OPPORTUNITY TO REVISE ITS PRICES AFTER THE SERIES OF EVENTS IN QUESTION. IT IS SIGNIFICANT THAT THE PRICE REDUCTION PATTERN OF DATACOM DOES NOT INDICATE A SUDDEN SHIFT OUT OF LINE WITH PREVIOUS REDUCTIONS, BUT RATHER APPEARS TO BE THE RESULT OF THE DISCUSSIONS. WHILE DATA WEST STATES THAT IT IS STATISTICALLY IMPROBABLE THAT ITS PRICE AND THAT OF DATACOM SHOULD BE SO CLOSE IN SUCH A LARGE PROCUREMENT, THAT IS NOT SUFFICIENT REASON TO UPHOLD THE PROTEST. DOT'S TARGET NEGOTIATING FIGURE ALSO CONTRIBUTED TO THE CLOSENESS OF COSTS AS DID THE FACT THAT A LARGE PORTION OF THE COSTS OF ALL COMPETITORS WERE THE SAME BECAUSE THE PROPOSED SUBCONTRACTOR WAS THE SAME.

AS STATED EARLIER, M'S BEHAVIOR WAS INDEED FOREIGN TO THE COMPETITIVE NEGOTIATION SYSTEM EMPLOYED BY THE GOVERNMENT. IN OUR VIEW, THIS UNDERSCORES THE NEED TO CLEARLY DEFINE THE NON-GOVERNMENTAL PERSONNEL ROLE AND CLOSELY SUPERVISE COMPLIANCE THEREWITH. IN THAT REGARD, DOT ORDER 4200.11 PROVIDES GUIDANCE IN THE MATTER. IN PARTICULAR, M VIOLATED THE PRESCRIPTION OF SECTION D5 ENTITLED "ETHICAL CONDUCT," THAT:

"PRIOR TO SOURCE SELECTION, SEB AND TEAM MEMBERS AND ADVISORS SHALL NOT DISCUSS THE SOURCE EVALUATION PROCEEDINGS WITH ANYONE AND SHALL AVOID ALL CONTACT WITH THE FIRMS INVOLVED AND THEIR REPRESENTATIVES EXCEPT AS NECESSARY IN CONNECTION WITH THE PROCEEDINGS."

WE ALSO NOTE THAT THE SAME PERSONNEL THAT EVALUATED THE TECHNICAL PROPOSALS ALSO PARTICIPATED IN THE PRICE DISCUSSIONS AND EVALUATION. DOT ORDER 4200.11 SECTION E8(A) CALLS FOR A SEGREGATION OF THE TWO FUNCTIONS. THIS DIRECTIVE IS INTENDED TO PRECLUDE PREJUDICING ONE EVALUATION BASED ON KNOWLEDGE OF THE OTHER. WE ARE IN ACCORD WITH THIS PRINCIPLE, NOTWITHSTANDING WYLE'S POSITION THAT THE TWO ARE SO INTERTWINED AS TO REQUIRE A SINGLE CONSIDERATION AND WE RECOMMEND CLOSER ADHERENCE TO IT IN FUTURE PROCUREMENTS. IN THE LETTER FORWARDING THE OIS REPORT, THE ASSISTANT SECRETARY FOR ADMINISTRATION STATED THAT HE INTENDED TO TAKE "APPROPRIATE STEPS TO AVOID ANY RECURRENCE" OF THE DEPARTURE FROM SOUND PROCUREMENT ACTIONS ENCOUNTERED IN THIS CASE. WE TRUST THAT OUR VIEWS EXPRESSED HEREIN WILL BE CONSIDERED IN FORMULATING APPROPRIATE CORRECTIVE ACTION AND WE EXPECT THAT WE WILL BE INFORMED OF WHATEVER ACTION IS TAKEN.

CONCERNING THE REJECTION OF DATA WEST'S FEBRUARY 14 LETTER AS A LATE PROPOSAL, DOT CONSIDERED THE MATTER UNDER THAT CLAUSE IN THE RFP WHICH PROVIDED THAT PROPOSALS SUBMITTED AFTER THE CLOSING DATE FOR RECEIPT OF PROPOSALS WOULD BE HANDLED IN ACCORDANCE WITH DOTPR SEC. 12-3.5008(B) (JUNE 1972) WITH TWO CHANGES NOTED IN THE RFP. MODIFICATIONS OF PROPOSALS ARE SUBJECT TO THE SAME TREATMENT AS LATE PROPOSALS. THE EXCEPTIONS PERMIT THE CONSIDERATION OF A LATE PROPOSAL IF IT WAS RECEIVED BEFORE AWARD, WAS SENT EITHER BY REGISTERED OR CERTIFIED MAIL AND WAS RECEIVED LATE DUE SOLELY TO DELAY IN THE MAILS OR IF THE LATE RECEIPT WAS DUE TO MISHANDLING BY THE GOVERNMENT AFTER RECEIPT AT THE GOVERNMENT INSTALLATION. ALSO, A LATE PROPOSAL MAY BE CONSIDERED WHEN IT IS THE ONLY ONE RECEIVED OR IS DETERMINED TO BE OF EXTREME IMPORTANCE TO THE GOVERNMENT IN TERMS OF TECHNICAL BREAKTHROUGH OR A SUBSTANTIALLY LOWER PRICE. ON THIS MATTER THERE IS NO FACTUAL DISPUTE AS TO WHAT OCCURRED. DATA WEST'S FEBRUARY 14 LETTER WAS RECEIVED AFTER THE DATE SPECIFIED. WAS REVIEWED BY DOT TO DETERMINE WHETHER IT FELL WITHIN ANY OF THE EXCEPTIONS THAT WOULD PERMIT ITS CONSIDERATION. WE CONCUR WITH DOT'S ASSESSMENT THAT IT DID NOT. WHILE QUESTION ARISES WHETHER THE FEBRUARY 14 LETTER SHOULD HAVE BEEN TREATED BY DOT AS A CLAIM OF ERROR IN DATA WEST'S PROPOSAL, WE DO NOT BELIEVE THAT THE CIRCUMSTANCES PERMITTED RELIEF FROM THE ALLEGED ERROR. GENERALLY, WHEN A DOWNWARD CORRECTION OF A MISTAKE IN PROPOSAL WOULD DISPLACE A LOW OFFEROR WE HAVE HELD THAT SUCH A CORRECTION MAY ONLY BE PERMITTED WHEN BOTH THE ERROR AND AMOUNT INTENDED ARE ASCERTAINABLE FROM THE RFP AND PROPOSAL ITSELF. B-156838, JULY 13, 1965; B-154653, NOVEMBER 27, 1964. IN THIS CASE, SINCE AWARD WAS PREDICATED UPON PRICE ALONE; SINCE DOT KNEW THAT DATA WEST WAS AWARE THAT ITS PROPOSAL WAS NOT LOW WHEN THE CLAIM OF MISTAKE WAS SUBMITTED; SINCE THE REQUESTED CORRECTION WOULD DISPLACE ANOTHER OFFEROR; AND SINCE IT WAS NOT APPARENT FROM DATA WEST'S BEST AND FINAL OFFER THAT A MISTAKE HAD BEEN MADE OR WHAT THE INTENDED PRICE WAS, WE BELIEVE DOT ACTED REASONABLY IN NOT CONSIDERING THE CLAIM UNDER THE CIRCUMSTANCES.

THE INVESTIGATION CONDUCTED BY OIS DID NOT DISCLOSE THAT DATACOM WAS A PARTY TO THE IRREGULAR PROCUREMENT PROCEDURES. THEREFORE, EDMAC'S CONTENTION THAT IT SHOULD RECEIVE THE AWARD OR THE UNEXERCISED OPTIONS OR PROPOSAL PREPARATION COSTS IS WITHOUT MERIT.

IN VIEW OF THE FOREGOING, THE PROTESTS OF DATA WEST AND EDMAC ARE DENIED.