B-171112, JUN 10, 1971

B-171112, JUN 10, 1971

BID PROTEST - NEGOTIATIONS - CORRECTION OF DEFICIENCIES BEFORE AWARD REGARDING BID PROTEST OF HEWLETT-PACKARD CO., AGAINST AWARD OF CONTRACT TO MEDICAL SPECIALTY COMPANY UNDER RFP FOR BRAND NAME OR EQUAL ITEM ISSUED BY DEPARTMENT OF THE AIR FORCE FOR PATIENT MONITORING SYSTEM. RECOMMEND CORRECTIVE ACTION AS AIR FORCE PROCUREMENT POLICY WAS DEFICIENT IN FAILING TO CORRECT OMISSION IN PROPOSAL OF MEDICAL SPECIALTY COMPANY PRIOR TO AWARD OF CONTRACT AS NOTED BY PROTESTANT.

TO MR. SECRETARY:

REFERENCE IS MADE TO LETTERS SPPM DATED JANUARY 5 AND FEBRUARY 23, 1971, FROM THE DEPUTY CHIEF, CONTRACT MANAGEMENT DIVISION, DIRECTORATE OF PROCUREMENT POLICY, DEPUTY CHIEF OF STAFF, SYSTEMS AND LOGISTICS, REPORTING ON THE PROTEST BY THE HEWLETT-PACKARD COMPANY AGAINST THE AWARD OF CONTRACT NO. F41698-71-C-0199 TO THE MEDICAL SPECIALTY COMPANY.

THE RFP WAS FOR A BRAND NAME OR EQUAL PROCUREMENT TO BE NEGOTIATED UNDER 10 U.S.C. 2304(A)(7), THE MEDICAL EQUIPMENT EXCEPTION TO THE ADVERTISING REQUIREMENTS. THE PURCHASE DESCRIPTION WAS AS FOLLOWS:

"PATIENT MONITORING SYSTEM, CONSISTING OF THE FOLLOWING HEWLETT PACKARD NUMBERS, OR EQUAL."

THIS DESCRIPTION WAS FOLLOWED BY A LISTING OF 33 SUBITEMS EACH DESCRIBED BY HEWLETT-PACKARD MODEL NUMBERS. IN ANOTHER SECTION OF THE RFP ENTITLED "GENERAL SPECIFICATIONS," THE SALIENT CHARACTERISTICS OF THE SUBITEMS WERE LISTED.

MEDICAL SPECIALTY WAS ONE OF FOUR COMPANIES SUBMITTING PROPOSALS. THE MEDICAL SPECIALTY PROPOSAL, IN THE AMOUNT OF $149,300, WAS THE LOWEST RECEIVED AND REMAINED SO EVEN AFTER PRICE REVISIONS WERE OBTAINED ON TWO OF THE OTHER PROPOSALS. IN THE SPACE BETWEEN THE PURCHASE DESCRIPTION AND THE SUBITEM LISTING, MEDICAL SPECIALTY INSERTED IN THE RFP:

"BIDDING OR EQUAL - MENNEN GREATBATCH ELECTRONICS - DRAWINGS & SPECS. ENCLOSED."

ALSO, MEDICAL SPECIALTY INSERTED THE FOLLOWING INFORMATION CALLED FOR ON PAGE 25 OF THE RFP:

"BIDDING ON:

MANUFACTURER'S NAME: MENNEN GREATBATCH ELECTRONICS

BRAND

NO.

DRAWINGS & SPECS ENCLOSED."

HEWLETT-PACKARD CONTENDS THAT THE MEDICAL SPECIALTY SPECIFICATIONS WERE DEFICIENT IN THAT IN SOME RESPECTS THEY DID NOT INCLUDE CERTAIN EQUIPMENT REQUIRED BY THE RFP - FIVE OSCILLOSCOPES, TWO CARRIER PREAMPLIFIERS, THREE AUTOMATIC SIGNAL SWITCHES, AND ONE EIGHT CHANNEL MEDIUM GAIN AMPLIFIER. IT ALSO MAINTAINS THAT THE EQUIPMENT PROPOSED BY MEDICAL SPECIALTY WAS NOT IN COMPLIANCE WITH THE RFP SPECIFICATIONS.

THE ADMINISTRATIVE REPORT ADVISES THAT THE MEDICAL SPECIALTY PROPOSAL WAS EVALUATED BY MEDICAL DOCTORS WHO WERE ABLE TO DETERMINE THAT IT MET THE RFP SPECIFICATIONS FROM INFORMATION IN THE PROPOSAL AND IN LIGHT OF THEIR PROFESSIONAL KNOWLEDGE OF MENNEN-GREATBATCH EQUIPMENT AND OTHER AVAILABLE DATA. NOTHING SUBMITTED BY THE PROTESTANT OVERCOMES THE ADMINISTRATIVE REPORT IN THIS REGARD. THUS, WE DO NOT QUESTION WHETHER THE EQUIPMENT OFFERED WAS TECHNICALLY COMPLIANT WITH THE RFP SPECIFICATIONS. ALTHOUGH THE PROCEDURES FOLLOWED BY THE EVALUATORS WERE APPROPRIATE FOR DETERMINING WHETHER OFFERED EQUIPMENT IS "EQUAL" TO BRAND NAME EQUIPMENT, WE DO NOT UNDERSTAND HOW THE EVALUATORS COULD HAVE DETERMINED THAT SUBITEMS NOT LISTED IN THE MEDICAL SPECIALTY PROPOSAL WERE, IN FACT, OFFERED AS PART OF THE COMPLETE SYSTEM. IN THAT CONNECTION, WE NOTE THAT WHEN THE MATTER WAS BROUGHT TO ITS ATTENTION AFTER AWARD, MEDICAL SPECIALTY ACKNOWLEDGED THAT ITS PROPOSAL CONTAINED OMISSIONS NOTED BY HEWLETT-PACKARD, BUT STATED THAT IT INTENDED TO COMPLY WITH THE RFP REQUIREMENTS IN ANY EVENT. THEREFORE, THESE DEFICIENCIES SHOULD HAVE BEEN CORRECTED DURING NEGOTIATIONS RATHER THAN LEFT FOR RESOLUTION AFTER AWARD. IN THAT CONNECTION, PARAGRAPH 3-804 OF THE ARMED SERVICES PROCUREMENT REGULATION PROVIDES:

" *** COMPLETE AGREEMENT OF THE PARTIES ON ALL BASIC ISSUES SHALL BE THE OBJECTIVE OF THE CONTRACT NEGOTIATIONS. ORAL DISCUSSIONS OR WRITTEN COMMUNICATIONS SHALL BE CONDUCTED WITH OFFERORS TO THE EXTENT NECESSARY TO RESOLVE UNCERTAINTIES RELATING TO THE PURCHASE OR THE PRICE TO BE PAID. BASIC QUESTIONS SHOULD NOT BE LEFT FOR LATER AGREEMENT DURING PRICE REVISIONS OR OTHER SUPPLEMENTAL PROCEEDINGS. *** "

ALTHOUGH IT MAY BE THAT MEDICAL SPECIALTY FULLY INTENDED TO COMPLY WITH THE RFP SPECIFICATIONS PRIOR TO CONTRACT EXECUTION, THE DEPUTY STAFF JUDGE ADVOCATE WAS OF THE VIEW THAT THE AWARDED CONTRACT IS AMBIGUOUS IN THAT IT IS UNCERTAIN WHETHER THE CONTRACTOR INTENDS TO ABIDE BY THE RFP EQUIPMENT REQUIREMENTS OR BY THE OFFERED REQUIREMENTS IN ITS PROPOSAL.

WHILE WE ARE ADVISED THAT THE CONTRACT HAS BEEN COMPLETED TO THE SATISFACTION OF THE GOVERNMENT, WE BELIEVE THAT APPROPRIATE STEPS SHOULD BE TAKEN TO INSURE THAT IN THE FUTURE PROPER PROCUREMENT PROCEDURES ARE FOLLOWED IN THE NEGOTIATION OF CONTRACTS AND THAT THE CONTRACTS RESULTING FROM SUCH NEGOTIATIONS CLEARLY REFLECT THE RESULTS OF THE NEGOTIATIONS.