B-167417-1, SEP 12, 1969

B-167417-1, SEP 12, 1969

BID PROTEST - NEGOTIATED AWARD - EVALUATION DECISION TO ANALYSIS AND PROGRAMMING CORPORATION DENYING PROTEST AGAINST NEGOTIATED CONTRACT FOR AUTOMATIC DATA PROCESSING SERVICES, INCLUDING COMPUTER TIME, TO MERLE THOMAS CORPORATION BY DEPARTMENT OF LABOR. ALTHOUGH REJECTION OF PROTESTANT'S PROPOSAL BECAUSE EQUIPMENT OFFERED WAS LOCATED AT TWO DIFFERENT SITES AND CALLED FOR SUBCONTRACTING, THE TERMS OF THE PROPOSAL DID NOT ACTUALLY PROHIBIT DIFFERENT LOCATION OR SUBCONTRACTING. HOWEVER IN VIEW OF REPRESENTATIONS, THE AWARD WILL NOT BE DISTRUBED.

TO ANALYSIS AND PROGRAMMING CORPORATION:

WE REFER TO YOUR TELEGRAM OF JULY 4, 1969, AND LETTER OF JULY 8, 1969, PROTESTING THE AWARD OF A CONTRACT BY THE DEPARTMENT OF LABOR TO THE MERLE THOMAS CORPORATION UNDER REQUEST FOR PROPOSALS (RFP) L/A 69 13.

THE RFP WAS ISSUED ON MAY 22, 1969, AND COVERED THE REQUIREMENT OF THE MANPOWER ADMINISTRATION, DEPARTMENT OF LABOR, FOR AUTOMATIC DATA PROCESSING SERVICES INCLUDING COMPUTER TIME, KEYPUNCHING AND EDIT/CODE SERVICES IN SUPPORT OF ITS DATA SYSTEMS.

PROPOSALS WERE OPENED ON JUNE 12, 1969. SEVEN PROPOSALS WERE RECEIVED. YOUR FIRM (HEREAFTER "APC"), SUBMITTED THE THIRD LOWEST PROPOSAL AND THE MERLE THOMAS CORPORATION SUBMITTED THE FOURTH LOWEST PROPOSAL. THE TWO LOWEST PROPOSALS WERE REJECTED FOR REASONS NOT PERTINENT HERE. APC'S PROPOSAL WAS DETERMINED TO BE NONRESPONSIVE AND AFTER FURTHER NEGOTIATIONS WITH MERLE THOMAS, WHICH RESULTED IN A PRICE REDUCTION, THE CONTRACT WAS AWARDED TO THAT CORPORATION ON JUNE 30, 1969, IN THE AMOUNT OF $412,218.96.

IT IS REPORTED BY THE DEPARTMENT OF LABOR THAT APC WAS DECLARED NON RESPONSIVE ON THE BASIS THAT THE 360/40 CONFIGURATION OFFERED DID NOT DID NOT HAVE THE NECESSARY DEGREE OF "OS" CAPABILITY AND THAT IT WAS NOT OPERATIONAL AT THE TIME OF VENDOR RESPONSE AS REQUIRED. IT WAS ALSO DETERMINED THAT APC WAS NOT RESPONSIVE ON THE BASIS THAT THE EQUIPMENT OFFERED WAS LOCATED AT TWO DIFFERENT SITES WHICH WAS NOT IN ACCORDANCE WITH THE RFP, AND IT CALLED FOR SUBCONTRACTING, AS A BROKER.

YOUR OBJECTIONS TO THE AWARD ARE SUMMARIZED IN YOUR LETTER OF JULY 8 AS FOLLOWS:

"1. APC CONTENDS IT IS TECHNICALLY RESPONSIVE TO THE RFP, THE OBJECTIONS OF THE TECHNICAL EVALUATION COMMITTEE BEING ILL-FOUNDED.

"2. THE EVALUATION OF PROPOSALS WAS NEITHER UNIFORM OR CONSISTENT AS EVIDENCED BY THE FOLLOWING:

"(A) APC WASN'T ONCE CONTACTED BEFORE 30 JUNE 1969 REGARDING ITS

PROPOSAL, EVEN THOUGH IT WAS ONE OF THE LOW BIDDERS.

"(B) THE AWARDEE WAS KNOWN NOT TO BE IN POSSESSION OF A 2314 AT

TIME OF RESPONSE, JUNE 1969, AND NO MEMBER OF THE TECHNICAL

EVALUATION COMMITTEE SAW FIT TO INFORM THE CONTRACTING

OFFICER THAT HIS INFORMATION THAT A 2314 'COULD BE

INSTALLED, DEBUGGED, AND MADE OPERATIONAL WITHIN SIX TO

TWELVE HOURS' WAS ERRONEOUS.

"(C) THE CONTRACT WAS AWARDED ON 30 JUNE 1969, WITHOUT CONFIRMING

THAT A 2314 - A MUST REQUIREMENT OF THE RFP - WAS, IN FACT,

AVAILABLE AND OPERATIONAL AT THE AWARDEE'S FACILITY.

"3. IN A LETTER ISSUED BY DOL ON 3 JULY 1969, ANNOUNCING THE AWARD TO MERLE THOMAS CORPORATION, THE QUOTED RATES TOTALLED $412,218.96, THIS COMPARED TO $418,878.65 QUOTED BY APC, THE AWARDEE TOTAL IS OBVIOUSLY NOT HIS INITIALLY SUBMITTED PRICE ***."

PERTINENT PROVISIONS OF THE RFP ARE AS FOLLOWS:

"1. COMPUTER TIME

"A. MINIMUM SYSTEMS CONFIGURATION (FN1)

364/30: 64K

4 - 2311 DISK DRIVES

5 - 9 CHANNEL TAPE DRIVES

1 - 7 CHANNEL TAPE DRIVE

1 - CARD READ/PUNCH

1 - PRINTER

360/40: 256K DOS/OS

4 - 2311 DISK DRIVES

5 - 9 CHANNEL TAPE DRIVES

1 - 7 CHANNEL TAPE DRIVE

1 - CARD READ/PUNCH

1 - PRINTER (FN2)

1 - 2314 DISK DRIVE

360/50: SAME AS 360/40

"FN1 MUST BE OPERATIONAL AT THE TIME OF VENDOR RESPONSE.

"FN2 MUST BE INSTALLED, DEBUGGED, AND PROPERLY OPERATING BY JUNE 30TH." "RFP RESPONSE - 1 1. VENDOR NAME

2. VENDOR ADDRESS 3. 360/30 CONFIGURATION 4.

360/30 SITE 5. BACK UP 360/30 CONFIGURATION 6.

BACK UP SITE 7. 360/40 CONFIGURATION 8. 360/40

SITE 9. BACK UP 360/40 CONFIGURATION 10. BACK UP

SITE

"F. CONFIGURATION SITE AND BACKUP. ALL WORK TO BE PERFORMED BY THE SELECTED VENDOR SHALL BE EXECUTED ON A CONFIGURATION LOCATED IN THE GREATER WASHINGTON METROPOLITAN AREA. ALL RESPONSES TO THIS RFP MUST PROVIDE FOR, AND STATE A BACKUP CONFIGURATION COMPATIBLE TO THE PRIME CONFIGURATION. THE BACKUP SITE MUST BE LOCATED IN THE GREATER WASHINGTON METROPOLITAN AREA."

APC CONTENDS THAT THE DEPARTMENT OF LABOR'S DETERMINATION OF NON RESPONSIVENESS IN REGARD TO ITS OFFER OF TWO DIFFERENT SITES FOR THE COMPUTER CONFIGURATIONS IS NOT PROPER BECAUSE THE RFP DID NOT PROHIBIT TWO SITES OR SUBCONTRACTING AND, IN FACT, UNDER "RFP RESPONSE - 1" SPACE WAS ALLOTED FOR ENTRY OF DIFFERENT SITES FOR THESE CONFIGURATIONS. WHILE WE AGREE WITH APC'S CONTENTIONS IN THIS REGARD SINCE AT BEST THE RFP IS AMBIGUOUS ON THIS POINT, WE, NEVERTHELESS, FEEL THAT YOUR PROPOSAL WAS PROPERLY REJECTED ON THE BASIS THAT THE 360/40 CONFIGURATION OFFERED DID NOT HAVE THE NECESSARY DEGREE OF "OS" CAPABILITY AND THAT IT WAS NOT OPERATIONAL AT ANY TIME PRIOR TO CONTRACT AWARD.

THE RFP REQUIRED UNDER FOOTNOTE 1 OF THE "MINIMUM SYSTEMS CONFIGURATION" THAT ALL ITEMIZED SYSTEM COMPONENTS WERE TO BE OPERATIONAL AT THE TIME OF VENDOR RESPONSE; THAT IS, ON JUNE 12 WHEN PROPOSALS WERE OPENED, WITH THE EXCEPTION OF THE ONE 2314 DISK DRIVE.

IT IS REPORTED BY THE LABOR DEPARTMENT THAT DURING THE PROPOSAL EVALUATION A REPRESENTATIVE OF THE DEPARTMENT INVESTIGATED THE CONFIGURATION OF THE 360/40 OFFERED BY THE ASSOCIATION OF AMERICAN RAILROADS (AAR) WHICH WAS THE SUBCONTRACTOR (SITE) SPECIFIED IN APC'S PROPOSAL. IT IS REPORTED THAT WHILE AAR HAD AN OS TAPE AVAILABLE FOR GENERATING AN OS SYSTEM, AAR HAD NOT, AT THE TIME OF EVALUATION, PERFORMED A SYSTEMS GENERATION FOR OPERATIONAL USE OF THE SYSTEM. IN ADDITION, AAR HAD NOT ROUTINELY USED THE OS SYSTEM OR THE CONFIGURATION CONTAINED IN THE APC PROPOSAL. IT IS FURTHER STATED:

"A. VENDOR WHO HAS PREVIOUS OPERATIONAL EXPERIENCE, ON LOCATION, MUST BE GIVEN A SUBSTANTIALLY HIGHER RATING ON THIS CAPABILITY IN COMPARISON TO ONE WHO ONLY HAS IBM 360/OS AVAILABLE BUT HAS NOT USED IT OPERATIONALLY. IN FACT, EXPERIENCE HAS PROVEN THAT THE RISK IS TOO GREAT TO CONSIDER A VENDOR RESPONSIVE WHO DOES NOT HAVE CONSIDERABLE EXPERIENCE, IN PROVIDING ROUTINE IBM/OS OPERATIONAL SUPPORT TO CUSTOMERS AT THE PROPOSED COMPUTER SERVICE SITE."

THE LABOR DEPARTMENT'S REPORT INCORRECTLY REFERS TO APC'S FAILURE TO MEET THE RFP REQUIREMENT THAT THE MINIMUM SYSTEMS CONFIGURATION BE OPERATIONAL AT THE TIME OF VENDOR RESPONSE AS A QUESTION OF RESPONSIVENESS OF THE PROPOSAL RATHER THAN ONE OF RESPONSIBILITY OF THE OFFEROR (IN WHICH LATTER CASE THE REQUIREMENT COULD BE MET AT ANY TIME PRIOR TO CONTRACT AWARD). COMPETITIVE RANGE RATHER THAN RESPONSIVENESS IS FOR CONSIDERATION IN NEGOTIATED PROCUREMENTS. IN ANY CASE, WE DO NOT CONSIDER THE REJECTION OF APC'S PROPOSAL AS IMPROPER SINCE IT APPEARS THAT APC DID NOT MEET THE RESPONSIBILITY REQUIREMENTS OF THE RFP AT ANY TIME PRIOR TO AWARD. APC DOES NOT TAKE EXCEPTION TO THE CONTRACTING OFFICER'S FINDING THAT THE OS SYSTEM, WHILE AVAILABLE AT AAR, WAS NOT OPERATIONAL AT THE TIME OF VENDOR RESPONSE ON JUNE 12. MORE IMPORTANTLY IT IS NOTED THAT IN ADDITION TO THE NON-OPERATIONAL STATUS OF THE "OS" SYSTEM THE 360/40 CONFIGURATION AVAILABLE AT AAR DID NOT HAVE THE NECESSARY DEGREE OF "OS" CAPABILITY AND IT IS REPORTED THAT AS LATE AS JULY 3, 1969 (THREE DAYS AFTER CONTRACT AWARD), APC STILL HAD NOT SATISFACTORILY DEMONSTRATED TO THE DEPARTMENT OF LABOR'S EVALUATION TEAM THAT AAR HAD AN OPERATIONAL IBM OS SYSTEM CAPABILITY. WE SEE NO BASIS TO QUESTION THESE DETERMINATIONS BY THE DEPARTMENT OF LABOR.

WITH REGARD TO YOUR CONTENTIONS CONCERNING THE AVAILABILITY OF A 2314 DISK DRIVE AT THE MERLE THOMAS CORPORATION AT THE TIME OF VENDOR RESPONSE, IT SHOULD BE NOTED THAT THE RFP DID NOT REQUIRE THIS ITEM TO BE INSTALLED, DEBUGGED AND PROPERLY OPERATING AT THE TIME OF VENDOR RESPONSE BUT BY JUNE 30, 1969. IT IS REPORTED THAT COMPLIANCE BY MERLE THOMAS WITH THE RFP REQUIREMENT BY MIDNIGHT OF JUNE 30TH WAS DETERMINED ON THE BASIS OF A LETTER OF CONFIRMATION DATED JUNE 27, 1969, FROM THE MERLE THOMAS CORPORATION ENCLOSING A LETTER FROM TIME BROKERS, INCORPORATED, WHICH STATED THAT THE 2314 WOULD BE INSTALLED AND MADE OPERATIONAL BY MIDNIGHT JUNE 30. ALTHOUGH THE ARRANGEMENTS SET FORTH IN THE LETTER FROM TIME BROKERS DID NOT MATERIALIZE AND MERLE THOMAS, SUBSEQUENT TO THE AWARD, DID NOT POSSESS THE REQUIRED 2314 DISK DRIVE THIS FACT HAS BEARING ONLY UPON PERFORMANCE UNDER THE CONTRACT AND NOT UPON THE VALIDITY OF THE AWARD AS MADE.

THE FINAL PRICE OFFERED BY MERLE THOMAS IN THE AMOUNT OF $412,218.96 WAS NOT THE ORIGINAL PRICE SUBMITTED BUT WAS THE RESULT OF NEGOTIATIONS WITH MERLE THOMAS AND THE ONLY OTHER RESPONSIBLE OFFEROR WHO APPEARED TO BE WITHIN A COMPETITIVE RANGE.

APC'S TELEGRAM OF JULY 4, 1969, REFERENCES OUR DECISION, B-164728, SEPTEMBER 3, 1968, BUT DOES NOT SET FORTH THE REASONS WHY IT IS CONSIDERED APPLICABLE TO THE PRESENT CASE. WE HAVE EXAMINED THIS DECISION IN THE LIGHT OF THE FACTS OF THIS CASE AND DO NOT FIND IT RELEVANT.

WE FIND NO LEGAL BASIS UPON WHICH TO DISTURB THE CONTRACT AWARDED TO MERLE THOMAS AND YOUR PROTEST IS DENIED.