B-175635, AUG 9, 1972

B-175635, AUG 9, 1972

BID PROTEST - ORAL SOLICITATION - RESTRICTED TIME FRAME DENIAL OF PROTEST BY THE STANWICK CORPORATION AGAINST THE AWARD OF A CONTRACT TO WELLS FARGO ALARM SERVICES UNDER AN ORAL RFQ ISSUED BY THE NAVY PURCHASING OFFICE, WASHINGTON, D.C., FOR AN INTRUSION DETECTION SYSTEM. GAO BELIEVES THAT, CONSIDERING THE RESTRICTED TIME FRAME AVAILABLE, NPO DID NOT ACT UNREASONABLY IN FAILING TO HAVE UNDERTAKEN A DEMONSTRATION OF THE ALLEGED ACCEPTABLE SUBSTITUTES OFFERED BY STANWICK AT SUCH A LATE DATE. FURTHER, GAO FINDS NO PATENT ILLEGALITY IN THE CONDUCT OF THIS PROCUREMENT SUCH AS TO WARRANT OBJECTION.

TO THE STANWICK CORPORATION:

REFERENCE IS MADE TO YOUR LETTER DATED MAY 25, 1972, AND PRIOR CORRESPONDENCE, PROTESTING AGAINST THE AWARD OF A CONTRACT TO WELLS FARGO ALARM SERVICES UNDER ORAL REQUEST FOR QUOTATIONS (RFQ) NO. N00600 72-Q- 5471, ISSUED BY THE NAVY PURCHASING OFFICE (NPO), WASHINGTON, D.C.

FOR THE REASONS HEREINAFTER STATED, THE PROTEST IS DENIED.

NPO INITIATED THE PROCUREMENT FOR AN INTRUSION DETECTION SYSTEM ON AN ORAL BASIS IN RESPONSE TO AN ISSUE PRIORITY DESIGNATOR 2 REQUISITION RECEIVED MARCH 14, 1972, FROM THE CHIEF OF NAVAL OPERATIONS (CNO). THE NPO MEMORANDUM OF JUSTIFICATION FOR ORAL SOLICITATION NOTED THAT THE CNO REQUIRED THE SYSTEM TO BE INSTALLED COINCIDENTALLY WITH CERTAIN TELECOMMUNICATIONS/COMMUNICATIONS EQUIPMENT AND COMMENCE OPERATION NO LATER THAN APRIL 10. IN ADDITION, THE MEMORANDUM STATED THAT DELAY BEYOND APRIL 10 WOULD NOT ONLY SERIOUSLY AFFECT THE PERFORMANCE OF THE NAVY'S MISSION, BUT WOULD POSSIBLY RESULT IN PENALTIES OF UP TO $100,000 BEING LEVIED BY THE TELECOMMUNICATIONS/COMMUNICATIONS INSTALLER AGAINST THE NAVY. THEREFORE, SINCE AT LEAST 15 DAYS WAS NEEDED TO PREPARE A WRITTEN SOLICITATION, IT WAS DECIDED THAT AN ORAL SOLICITATION WOULD BE APPROPRIATE. SEE ASPR 3-501(D). CONCOMMITTANTLY, THE PROCUREMENT WAS NEGOTIATED UNDER THE AUTHORITY OF 10 U.S.C. 2304(A)(2), AS IMPLEMENTED BY THE PROVISIONS OF PARAGRAPH 3 202 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), WHICH PERMITS THE USE OF NEGOTIATION WITHOUT ADVERTISING WHERE THE PUBLIC EXIGENCY WILL NOT PERMIT THE ATTENDANT DELAY.

NPO HAS PROVIDED OUR OFFICE WITH A CONTEMPORANEOUS CHRONOLOGICAL RECORD KEPT BY CONTRACTING OFFICIALS DURING THE COURSE OF THE PROCUREMENT. THAT RECORD REVEALS THAT ONLY YOUR FIRM AND WELLS FARGO EXPRESSED INTEREST IN SUBMITTING OFFERS. BOTH FIRMS WERE PROVIDED WITH APPLICABLE SPECIFICATIONS, REQUIREMENTS FOR TECHNICAL PROPOSAL, AND OTHER TERMS AND CONDITIONS, ALONG WITH NOTIFICATION THAT THE CLOSING DATE FOR RECEIPT OF INITIAL PROPOSALS WAS MARCH 23. IN THE INTERIM, NPO APPRISED BOTH FIRMS OF SPECIFICATION AND OTHER TERM CHANGES INCLUDING, ON MARCH 22, A REQUIREMENT THAT THE PROPOSED SYSTEM BE DEMONSTRABLE AS OPERATIONAL ON MARCH 24. STANWICK AND WELLS FARGO SUBMITTED TIMELY PROPOSALS ON MARCH 23, AND BOTH FIRMS WERE ASKED TO CORRECT DEFICIENCIES AND SUBMIT REVISIONS BY MARCH 27. AFTER A TECHNICAL EVALUATION OF THE DEMONSTRATIONS HELD, AS SCHEDULED, ON MARCH 24 AND THE RECEIPT OF REVISED TECHNICAL PROPOSALS, THE STANWICK PROPOSAL WAS DETERMINED TO BE UNACCEPTABLE. ON MARCH 31, AWARD WAS MADE TO WELLS FARGO SINCE THAT FIRM ACCEPTABLY DEMONSTRATED A COMPLETE SYSTEM.

STANWICK PROTESTS AGAINST THE DETERMINATION THAT ITS LOWER-PRICED TECHNICAL PROPOSAL WAS UNACCEPTABLE. NPO'S DETERMINATION RESTED ON 3 GROUNDS: (1) THE FAILURE OF THE PROPOSAL, BY UTILIZING SUBCONTRACTORS FOR COMPONENT PARTS, TO ASSURE STANDARDIZATION FOR FUTURE EXPANSION OF THE SYSTEM; (2) INABILITY TO DEMONSTRATE AN OPERATIONAL SYSTEM AS REQUIRED; AND (3) NO FIRM COMMITMENT IN THE PROPOSAL TO HAVE OPERATIONAL AND AVAILABLE FOR TESTING OR INSTALLATION BY THE REQUIRED DATE ACCEPTABLE SUBSTITUTES FOR THE COMPONENTS TESTED AT THE DEMONSTRATION CONSIDERED TO BE UNACCEPTABLE SINCE THEY WERE NEITHER ACCREDITED FOR USE BY THE DEFENSE INTELLIGENCE AGENCY NOR INCLUDED IN APPENDIX F OF DEPARTMENT OF DEFENSE (DOD) DIRECTIVE S-5200.17(M-2).

IN REBUTTAL TO THE NPO POSITION, STANWICK POINTS OUT, WITH RESPECT TO THE STANDARDIZATION ISSUE, THAT THERE IS NO INDICATION THAT ITS SUPPLIERS WILL NOT CONTINUE TO PRODUCE THE PROPOSED COMPONENTS IN THE FUTURE. MOREOVER, STANWICK QUESTIONS WELLS FARGO'S ABILITY TO ASSURE THE STANDARDIZATION REQUIRED. SECONDLY, STANWICK ADMITS THAT WHILE ITS PROPOSED COMPONENTS WERE NOT ON THE APPROVED GOVERNMENT LIST, THEY WERE DEMONSTRATED TO BE EQUAL TO OR BETTER IN CAPABILITY TO THE COMPONENTS OFFERED BY WELLS FARGO. THIRDLY, IT IS SUBMITTED THAT EVIDENCE OF ACCEPTABLE COMPONENT SUBSTITUTES IN THE FORM OF FIRM COMMITMENTS WAS IN STANWICK'S POSSESSION ON MARCH 30. IN THIS REGARD, IT IS CONTENDED THAT SUCH EVIDENCE WAS NEVER REQUESTED FROM STANWICK. FINALLY, STANWICK CLAIMS THAT THE DEMONSTRATION REQUIREMENT, INITIALLY INSERTED INTO THE PROCUREMENT ON MARCH 22, SHOULD HAVE BEEN TREATED AS A FORMAL AMENDMENT, ALONG WITH AN APPROPRIATE EXTENSION OF TIME TO GIVE THE FIRM ADEQUATE NOTICE TO OBTAIN ACCEPTABLE COMPONENTS. SIMILARLY, STANWICK FEELS THAT SUCH SHORT NOTICE WAS UNREASONABLE IN VIEW OF THE NORMAL LEAD TIME REQUIRED TO OBTAIN COMPONENTS NOT ORIGINALLY NEEDED TO BE ON HAND PRIOR TO CONTRACT AWARD.

WITH RESPECT TO STANDARDIZATION, AFTER THE REVIEW BY THE TECHNICAL EVALUATORS OF THE INITIAL PROPOSALS, ONLY THE CAPABILITY OF STANWICK WAS QUESTIONED. STANWICK'S REVISED PROPOSAL DID NOT RESPOND ON THIS ISSUE TO THE SATISFACTION OF THE TECHNICAL EVALUATORS. A REVIEW OF THE TECHNICAL EVALUATIONS CONDUCTED DISCLOSED NO DISSATISFACTION WITH THE WELLS FARGO PROPOSAL WITH REGARD TO STANDARDIZATION FOR PROSPECTIVE FUTURE EXPANSION. WE HAVE BEEN PRESENTED NO BASIS UPON WHICH TO QUESTION THE TECHNICAL JUDGMENT OF THE EVALUATORS IN THIS AREA. SIMILARLY, A REVIEW OF THE EVALUATION OF THE STANWICK DEMONSTRATION DISCLOSES THAT IT DID NOT DISPLAY A COMPLETE OPERATIONAL SYSTEM AS REQUIRED. RATHER COMPONENTS, NOT ON THE APPROVED GOVERNMENT LIST, WERE DEMONSTRATED INDIVIDUALLY. THEREFORE, IT APPEARS TO US THAT, DESPITE STANWICK'S CLAIMS TO THE CONTRARY, THE COMPONENTS WHICH IT DEMONSTRATED PRESENTED A SUFFICIENT BASIS FOR THE TECHNICAL DETERMINATION OF UNACCEPTABILITY.

AS IS EVIDENT FROM THE STATEMENT OF FACTS ABOVE, THE CNO IMPOSED SEVERE TIME CONSTRAINTS ON THE NPO PROCUREMENT PROCESS. IN VIEW OF THE APRIL 10 INSTALLATION TARGET DATE, AND THE CONSIDERED 10 DAY LEAD TIME FROM CONTRACT ISSUANCE TO INSTALLATION, NPO DETERMINED THAT A DECISION TO AWARD A CONTRACT HAD TO BE MADE BY MARCH 27 IN ORDER TO ALLOW SUFFICIENT TIME FOR THE PREPARATION, PRINTING AND EXECUTION OF A TWO PARTY CONTRACT BY MARCH 31, 1972. NO DOUBT THESE TIME CONSTRAINTS PRECLUDED NPO FROM THE ORDINARILY FLEXIBLE AND UNRESTRICTED CONDUCT OF A NEGOTIATED PROCUREMENT. WITH PARTICULAR REFERENCE TO THE FAILURE OF NPO TO CONSIDER THE ACCEPTABLE SUBSTITUTES PROFFERRED BY STANWICK INFORMALLY AT THE MARCH 24 DEMONSTRATION AND FORMALLY IN ITS MARCH 27 REVISED PROPOSAL, WE FIND NO EVIDENCE THAT THE PROCURING ACTIVITY ACTED UNREASONABLY OR WITH AN INTENTION TO UNFAIRLY PRECLUDE STANWICK FROM CONSIDERATION. AS STANWICK ADMITS WHETHER OR NOT NPO ACTUALLY REQUESTED FIRM COMMITMENTS OF ACCEPTABLE SUBSTITUTES SUCH COMMITMENTS WERE NOT AVAILABLE UNTIL MARCH 30. WE BELIEVE THAT UNDER THE CIRCUMSTANCES NPO DID NOT ACT UNREASONABLY IN FAILING TO HAVE UNDERTAKEN A DEMONSTRATION OF THE ACCEPTABLE SUBSTITUTES AT SUCH A LATE DATE CONSIDERING THE RESTRICTED TIME FRAME NECESSARY.

MOREOVER, THE FACT REMAINS THAT THE TIMING INVOLVED NECESSITATED THAT A SUCCESSFUL OPERATIONAL DEMONSTRATION BE EXTANT WELL BEFORE THE AWARD OF THE CONTRACT. WE AGREE WITH NPO THAT THERE WAS NO ASSURANCE THAT BINDING AVAILABILITY AND SUCCESSFUL DEMONSTRATION OF THE ACCEPTABLE SUBSTITUTES COULD BE FURNISHED PRIOR TO THE DEADLINE FOR CONTRACT ISSUANCE. ADMITTEDLY, AS STATED ABOVE, WITHOUT THE TIME RESTRICTIONS IMPOSED UPON THE PROCUREMENT ACTIVITY BY CNO, STANWICK MAY WELL HAVE BEEN ABLE TO SUBMIT ACCEPTABLE SUBSTITUTES FOR DEMONSTRATION.

AS FAR AS THE ORAL NATURE OF THIS PROCUREMENT IS CONCERNED, WE OBSERVE THAT BOTH OFFERORS WERE PROVIDED WITH IDENTICAL INFORMATION AND TIME WITH WHICH TO SUBMIT INITIAL AND REVISED PROPOSALS AS WELL AS LEAD TIME PRIOR TO DEMONSTRATIONS. ALSO, BOTH OFFERORS WERE APPRISED OF A MARCH 27 COMMON CUT-OFF DATE FOR THE CLOSE OF NEGOTIATIONS. IN VIEW THEREOF, WE FIND NO PATENT ILLEGALITY IN THE CONDUCT OF THIS PROCUREMENT TO WARRANT OUR OBJECTION. SEE 49 COMP. GEN. 156 (1969); B 174723, FEBRUARY 18, 1972; B- 171653, MAY 11, 1971; AND B-170229, DECEMBER 11, 1970.