B-175978, OCT 6, 1972

B-175978, OCT 6, 1972

BID PROTEST - ADPE PROCUREMENT - IMPROPER AMENDMENT OF RFP DENIAL OF PROTEST ON BEHALF OF STORAGE TECHNOLOGY CORPORATION AGAINST THE AWARD OF A CONTRACT TO TELEX COMPUTER PRODUCTS, INC., UNDER AN RFP ISSUED BY THE GENERAL SERVICES ADMINISTRATION TO COVER THE VETERANS ADMINISTRATION'S 61-MONTH REQUIREMENT FOR SINGLE AND DUAL TAPE DRIVES AND TAPE CONTROLLERS. GAO AGREES WITH PROTESTANT THAT OFFERORS DID NOT COMPETE ON AN EQUAL BASIS AND THAT CERTAIN ASSUMPTIONS BY GSA WERE NOT JUSTIFIED. HOWEVER, IN VIEW OF THE URGENT NATURE OF THE PROCUREMENT, THE FACT THAT THE EQUIPMENT HAS BEEN INSTALLED AND ACCEPTED, AND THE ABSENCE OF ANY INDICATION OF BAD FAITH ON THE PART OF COGNIZANT PERSONNEL, IT WOULD NOT BE IN THE GOVERNMENT'S BEST INTEREST TO REQUIRE TERMINATION AND RESOLICITATION AT THIS TIME.

TO MORGAN, LEWIS & BOCKIUS:

FURTHER REFERENCE IS MADE TO YOUR PROTEST ON BEHALF OF STORAGE TECHNOLOGY CORPORATION AGAINST THE AWARD OF A CONTRACT TO TELEX COMPUTER PRODUCTS, INCORPORATED, BY THE GENERAL SERVICES ADMINISTRATION (GSA) PURSUANT TO REQUEST FOR PROPOSALS NO. FTPC-28671-N-2-10-72.

THE PROCUREMENT WAS CONDUCTED BY GSA FOR THE VETERANS ADMINISTRATION (VA) AND COVERS VA'S 61-MONTH REQUIREMENT FOR SINGLE AND DUAL DENSITY TAPE DRIVES AND TAPE CONTROLLERS. THE RFP WAS ISSUED ON APRIL 25, 1972, AND BECAUSE THE VA REQUIRED INSTALLATION BY MAY 30, 1972, THE CLOSING DATE AND TIME WAS APRIL 26, 1972, AT 3:00 P.M., E.S.T. BASED UPON A REVIEW OF FEDERAL SUPPLY SCHEDULE CONTRACTS FOR SIMILAR EQUIPMENT, THREE POTENTIAL SUPPLIERS WERE SOLICITED AND SUBMITTED TIMELY PROPOSALS. TELEX'S PROPOSAL INCLUDED AN OFFER TO INSTALL ALTERNATIVE EQUIPMENT TO MEET THE SHORT INSTALLATION DATE AND DELAY IMPLEMENTATION OF THE REQUIRED DUAL DENSITY CAPABILITY AND THE TAPE SWITCHING FEATURE UNTIL JULY 7, 1972. AFTER CONSULTATION WITH THE VA, IT WAS DETERMINED THAT TELEX'S ALTERNATE PROPOSAL WOULD MEET THE VA'S REQUIREMENTS DURING THE PERIOD FROM MAY 30 TO JULY 7, 1972, AND THAT IT OFFERED A SUBSTANTIAL COST SAVINGS. THEREFORE, AN AMENDMENT WAS ISSUED ON MAY 1, 1972, AND THE THREE OFFERORS RESPONDED ON MAY 2, 1972, AS REQUIRED. NEGOTIATIONS WERE CONDUCTED WITH ALL THREE OFFERORS ON MAY 3 AND 4, 1972. TELEX WAS DETERMINED THE LOW OFFEROR AND AWARDED THE CONTRACT ON MAY 5, 1972.

AFTER STC OBTAINED A COPY OF TELEX'S CONTRACT ON MAY 9, 1972, IT PROTESTED TO THE CONTRACTING OFFICER THAT TELEX'S PROPOSAL DID NOT COMPLY WITH THE AMENDED RFP WHICH REQUIRED INSTALLATION OF THE TAPE SWITCHING CAPABILITY ON MAY 30 AND PROVIDED FOR DELAY OF ONLY THE DUAL DENSITY CAPABILITY UNTIL JULY 7, 1972. UPON EXAMINATION OF STC'S PROTEST, IT WAS DETERMINED THAT ALTHOUGH IT WAS INTENDED THAT THE RFP BE AMENDED TO DELAY UNTIL JULY 7, 1972, BOTH THE DUAL DENSITY AND TAPE SWITCHING CAPABILITIES, THE AMENDMENT FAILED TO STATE THAT THE TAPE SWITCHING CAPABILITY COULD BE DELAYED. THEREFORE, GSA CONCEDES THAT TELEX'S PROPOSAL DID NOT CONFORM TO THE AMENDED RFP. HOWEVER, IT IS GSA'S POSITION THAT THE CONTRACT AS AWARDED MEETS THE VA'S REQUIREMENTS AND THE FACT THAT THE AMENDMENT FAILED TO REFLECT THE INTENDED MEANING DID NOT PREJUDICE STC. THE LATTER POINT IS BASED UPON THE FOLLOWING COMPARATIVE PRICE EVALUATION AND CONCLUSION THEREFROM THAT EVEN IF STC HAD KNOWN OF THE RELAXED REQUIREMENT AND ELIMINATED ANY CHARGE FOR THE 37-DAY PERIOD IT WOULD NOT HAVE DISPLACED TELEX AS THE LOW OFFEROR:

LEASE LEASE W/PURCH. OPTION

TELEX $510,611 $459,126

STORAGE TECH. CORP. 531,324 532,448

TELEX LOWER BY 20,713 73,322

ANALYSIS

STC MONTHLY LEASE 8888 X 5 WEEKS $11,110 (VALUE OF MAY 30 THRU JULY 7

PERIOD UNDER THE STC OFFER)

IN RESPONSE YOU ARGUE THAT HAD THE RFP BEEN PROPERLY AMENDED STC WOULD HAVE REALIZED THAT IT WAS BEING "CONFORMED" TO A NONRESPONSIVE AND CHEAPER ALTERNATIVE; AND THAT IT IS SPECULATIVE AS TO WHAT PRICE STC WOULD HAVE OFFERED HAD IT BEEN FULLY AWARE OF THE EXTENT TO WHICH GSA WOULD TRADE MANDATORY REQUIREMENTS FOR COST SAVINGS. FURTHERMORE, IT IS YOUR POSITION THAT THE VA'S INSISTENCE UPON A SOLE-SOURCE PROCUREMENT VERSUS GSA'S INSISTENCE UPON COMPETITION AND THE RESULTING DELAY IN ISSUANCE OF THE SOLICITATION AND SHORT PROCUREMENT CYCLE RAISE SERIOUS QUESTIONS OF PROPRIETY.

WITH REGARD TO THE LATTER POINT, WE ARE UNABLE TO CONCLUDE FROM THE RECORD BEFORE US THAT THE RESPECTIVE POSITIONS OF GSA AND THE VA INVOLVED ANY IMPROPRIETY. IT APPEARS THAT THE VA REQUESTED A WAIVER FROM GSA TO PERMIT IT TO MAKE A SOLE-SOURCE PROCUREMENT RATHER THAN PURCHASE FROM THE FEDERAL SUPPLY SCHEDULE BECAUSE OF THE EARLY INSTALLATION REQUIREMENT. GSA DECLINED TO GRANT THE WAIVER BECAUSE IT BELIEVED THE REQUIREMENT COULD BE COMPETITIVELY PROCURED. EVEN THOUGH THE VA AGAIN OBJECTED TO THE DELAY INVOLVED IN SOLICITING COMPETITIVE PROPOSALS, GSA INSISTED UPON THIS COURSE AND OFFERED TO HANDLE THE PROCUREMENT. FINALLY, THE VA AGREED TO THIS PROCEDURE. AS A RESULT, THE PROCUREMENT WAS EFFECTED IN A RELATIVELY SHORT TIME FRAME. NEVERTHELESS, THE THREE FIRMS SOLICITED REGISTERED NO COMPLAINT AND SUBMITTED TIMELY PROPOSALS.

ADMITTEDLY, OFFERORS DID NOT COMPETE ON AN EQUAL BASIS. FURTHERMORE, IT IS OUR OPINION THAT THE FAILURE TO DISCOVER THIS INEQUITY AND RECTIFY IT DURING TWO DAYS OF NEGOTIATIONS HAS NOT BEEN ADEQUATELY JUSTIFIED. MOREOVER, WE AGREE THAT GSA'S RATIONALIZATION BASED UPON THE DIFFERENCE IN THE RESPECTIVE PRICES, WHICH ASSUMES THAT STC WOULD NOT HAVE REDUCED ITS PRICE SUFFICIENTLY, IS AT BEST SPECULATIVE. HOWEVER, IN VIEW OF THE URGENT NATURE OF THE PROCUREMENT, THE FACT THAT THE EQUIPMENT HAS BEEN INSTALLED AND ACCEPTED, AND THE ABSENCE OF ANY INDICATION OF BAD FAITH ON THE PART OF COGNIZANT PERSONNEL, IT IS OUR VIEW THAT IT WOULD NOT BE IN THE GOVERNMENT'S BEST INTEREST TO REQUIRE TERMINATION AND RESOLICITATION AT THIS TIME.

WHILE IT MAY BE OF LITTLE SOLACE, WE ARE ADVISING THE ADMINISTRATOR OF THE GENERAL SERVICES ADMINISTRATION OF OUR CONCERN IN THIS REGARD TO PREVENT A RECURRENCE IN FUTURE PROCUREMENTS.