GRANTED: November 3, 1992 GSBCA 12109-P VALIX FEDERAL PARTNERSHIP I, Protester, v. NATIONAL TRANSPORTATION SAFETY BOARD, Respondent. Shelton H. Skolnick, Derwood, MD, counsel for Protester. Ronald Battocchi and Vivian Wiesner, Office of the General Counsel, National Transportation Safety Board, Washington, DC, counsel for Respondent. Before Board Judges DANIELS, PARKER, and VERGILIO. DANIELS, Board Judge. Valix Federal Partnership I (Valix) protests that the National Transportation Safety Board (NTSB) violated requirements of statute and regulation in the conduct of a procurement for microcomputers. Protester has two principal objections to the agency's actions: NTSB did not achieve competition for its true requirements, and the agency misevaluated the firm's cost proposal. In addition, Valix contends that NTSB's notice of award was defective. NTSB has moved the Board to dismiss the protest as frivolous. Valix has filed a reply in opposition. Relying on admissions contained in the motion and the answer to Valix's complaint, we deny the motion and grant the protest. Background 1. On August 4, 1992, NTSB issued a solicitation seeking proposals to supply microcomputers to the agency. Protest File, Exhibit II at 10. The items involved were two different configurations of 80386DX/33MHZ computers and one version of an 80486DX/33MHZ. Each configuration was a separate contract line item. Id. at 17 ( B.2). 2. NTSB announced in the solicitation that any contract resulting from this procurement would be of the firm-fixed price, indefinite delivery-indefinite quantity variety. Protest File, Exhibit II at 17 ( B.2), 79 ( H.3), 110 ( L.17). The agency guaranteed that it would purchase a minimum of forty-five computers -- twenty-five of contract line item number (CLIN) 1, ten of CLIN 2, and five of CLIN 3 -- on or before September 30. It said that it might buy as many as 105 additional computers -- seventy-five of CLIN 1, fifteen of CLIN 2, and fifteen of CLIN 3 -- during an "option period" from October 1, 1992, to January 28, 1993. Id. at 17, 79. 3. NTSB says that the minimum and maximum numbers were selected for the following reason: At the time of the request for proposals, the government realistically believed that FY [fiscal year] 1992 funds would be available to order at least 40, but not more than 145 units. Although there was [a] desire within the agency for more computers than 145, based on information available ON THE DATE OF THE RFP [request for proposals], no more than 145 computers were intended to be ordered during the contract period. Motion at 3. 4. Notwithstanding this statement, NTSB continues, "because the RFP was issued so close to the end of the fiscal year, it was anticipated that other end-of-year funds could possibly become available." Answer at 3. NTSB maintains that this anticipation led the agency to incorporate into the solicitation by reference Federal Acquisition Regulation (FAR) clause 52.215-34, "Evaluation of Offers for Multiple Awards (Mar 1990)." Id.; Protest File, Exhibit II at 105 ( L.7). This clause states that "[i]n addition to other factors, offers will be evaluated on the basis of advantages and disadvantages to the Government that might result from making more than one award (multiple awards)." 48 CFR 52.215-34 (1991) (FAR 52.215-34). 5. Each offeror was to propose two unit prices for each CLIN -- one for the guaranteed minimum quantity and another for the option period. Protest File, Exhibit II at 17 ( B.2). 6. Section M of the solicitation, "Evaluation Factors for Award," states in pertinent part: It is the intent of the Government to award a contract, to the responsible offeror whose proposal, conforming to this solicitation, is determined to be the most advantageous to the Government, price/cost and other factors considered. . . . . Evaluation Factors of relative importance (in priority order). (a) Quality (per Section B.) (b) Price/Cost (c) Delivery Protest File, Exhibit II at 111 ( M.1). 7. Hi-Tec Computers & Electronics (Hi-Tec), Win Laboratories, Ltd. (Win), and Valix were among the forty-four firms that submitted proposals in response to the solicitation. Protest File, Exhibits II, IV at 208, VII. Hi-Tec and Win each proposed two unit prices for each CLIN -- one for the minimum quantity and one for the option period. Id., Exhibit II at 18, 122. Valix submitted a more complex pricing proposal. Within each CLIN, for the option period, Valix offered "stair-step" pricing -- one unit price for one group of units (e.g., units 26 through 50 in CLIN 1), a second unit price for a second group (e.g., units 51-75), and, in CLIN 1, a third price for a third group (units 76-100). Valix also offered a discount per unit, "which is applicable with an award for all line items proposed by Valix." In addition, Valix proposed a completely different set of prices, organized as described above, with the caption, "Should the Government choose to make multiple awards, the prices below are to be used." Id., Exhibit VII at 294. 8. NTSB admits that it evaluated prices and selected offerors for award on the basis of minimum quantities only. Answer, 5. According to an unsworn statement by the contracting officer's technical representative, evaluation occurred as late as September 22. Protest File, Exhibit IV at 183. NTSB is not willing to concede that at that date, the agency knew that any particular number of computers would ultimately be ordered. Motion at 6 n.5. 9. The agency made two awards on September 28 -- one to Win and one to Hi-Tec. Protest File, Exhibit I. Hi-Tec proposed the lowest evaluated prices of all offerors, and Win proposed the second lowest. Id., Exhibit IV at 208. NTSB provides the following explanation of why two awards were made: The respondent admits that at the time of the award it was considered likely that more than 145 units would be purchased before the end of the option period. . . . [O]ne award would not have allowed for the purchase of additional units during the option period. It was only after award, at the time of ordering, that it was determined that 231 units could be purchased because of end-of- year money which would have otherwise been returned to the Treasury. Motion at 6 n.7. 10. By letter dated October 5, NTSB informed Valix that it was not the successful offeror. Answer, 13. Valix says that it received the letter on October 7. Complaint, 13. Valix's vice president for marketing says that his firm did not learn the identity of the awardees, and their prices, until he spoke by phone with an agency employee on October 9. Board's Memorandum of Conference of Oct. 15, 1992 (Conf. Memo.) at 2. NTSB does not deny the veracity of this statement. Answer, 13. The protest was filed on October 13. At a conference convened by the Board on October 15, NTSB counsel stated that the agency will voluntarily suspend performance under the Hi-Tec and Win contracts until the protest has been resolved; consequently, items ordered by NTSB are not being delivered. Conf. Memo. at 2. Discussion The solicitation at issue requested proposals to supply a minimum of forty and a maximum of 145 microcomputers to NTSB. Finding 2. At the time of award, the agency decided to buy 231 computers, or fifty-nine percent more than the stated maximum. Finding 9. The reason for this decision was that the agency realized, just before the end of the Government's fiscal year (September 30), that it had money which, if not spent, would revert to the Treasury. Id. To acquire 231 computers, though each offeror proposed to supply only 145, NTSB made awards to two separate firms. Id. Two awards were permissible, the agency believes, because the solicitation warned that multiple awards might be made. See Finding 4. NTSB's reasoning is defective. The presence of unanticipated sums of money in an agency's account at the end of a fiscal year is not license to spend that money in unlawful ways. The FAR clause regarding multiple awards permits an agency to make more than one award where doing so is "economically advantageous to the Government." FAR 15.407(h). The term "multiple awards," in this context, refers to awards of contracts to more than one offeror for different portions of the total being purchased; it is not understood to authorize duplicate awards of the entirety of the goods or services described in the solicitation. FAR 15.605(f); Rocky Mountain Trading Co.--Systems Div., GSBCA 8845-P, 87-2 BCA 19,725, at 99,876-77, 1987 BPD 42, at 6-7 (citing Comptroller General decisions to like effect); Wordplex Corp., GSBCA 8193-P-R, 86-2 BCA 18,820, at 94,835, 1986 BPD 42, at 3. The reason for this conclusion is that if an agency were allowed to make awards for quantities greater than stated in a solicitation, the Government would satisfy its needs without the benefit of true competition -- in contravention of statute, 41 U.S.C. 253(a)(1) (1988), and regulation, FAR 6.101 and 10.002(a)(1). By making two awards, NTSB now has contractual relationships which establish that the agency will buy at least eighty, and as many as 290, microcomputers in the configurations specified. NTSB did not solicit offers to supply this many computers, however. Consequently, it has no idea what prices might be offered for the right to provide these quantities, and cannot know whether either Hi-Tec's proposal or Win's is actually "most advantageous to the United States." See 41 U.S.C. 253b(d) (1988). Indeed, NTSB does know that even at the smaller quantities on which offers were made, Win's prices are higher than Hi-Tec's. See Finding 9. NTSB was thus on notice that if quantities were doubled, and each offeror simply proposed the same prices (without reference to quantity discounts one might generally expect), the agency would have saved money by purchasing from Hi-Tec alone. The awards therefore cannot stand. NTSB's statement that when the agency wrote the solicitation, it did not intend to buy more than the quantity specified, is irrelevant to the predicament in which the agency finds itself now. When NTSB realized that it had increased its requirements, it should have issued an amendment to the solicitation -- or, if it believed that this change was substantial, cancelled the solicitation and issued a new one. FAR 15.606(a), (b)(4). In either event, it should have sought true competition to fill the real requirements. 41 U.S.C. 253a(a)(1)(A) (1988). Because we decide that no award was permissible in this procurement, we need not consider whether NTSB misevaluated Valix's proposal or whether (as the agency contends) protester's pricing structure was so at variance with the solicitation's mandate that it should not have been evaluated at all. Now that the agency knows that at least one vendor desires to offer "stair-step" pricing and a discount for award of all three CLINs, however, we urge NTSB, when it requests new proposals, to specify whether either of these forms of pricing is permissible. See Finding 7; Motorola Computer Systems, Inc., GSBCA 9170-P, 88-1 BCA 20,324, at 102,753, 1987 BPD 247, at 8. We also urge the agency to specify -- as it has not explicitly done heretofore -- whether it will evaluate pricing proposals on the assumption that minimum, maximum, or some other quantities will be purchased. See Finding 6. The Federal Information Resources Management Regulation provides that generally, an evaluation of the total cost of proposals should include prices for "the basic and optional quantities [and] basic and optional contract periods." 41 CFR 201-39.1501-1(a) (1991). NTSB's notification to Valix that it had not been selected for award was both late and inadequate. Notification must be made "[p]romptly after award." FAR 15.1001(c)(1). NTSB made the awards here on September 28, but did not tell Valix about it until October 7 (given two-day mail delivery). This is not sufficiently fast, particularly in light of the need to tell offerors of adverse decisions in enough time that they may protest within ten days of award and thereby secure the statutory right to a suspension of contract performance while their complaint is being resolved. Berkshire Computer Products v. Department of the Navy, GSBCA 11989-P, 1992 BPD 257, at 4 (Sept. 17, 1992); Locom Corp., GSBCA 8951-P, 87-2 BCA 19,940, 1987 BPD 111. Any prejudice to Valix has been remedied, however, by the agency's voluntary suspension of contract performance while the protest is pending. See Finding 10. Notification must include certain information, as specified by regulation: the number of offerors solicited; the number of proposals received; the name and address of each offeror receiving an award; the items, quantities, and unit prices of each award (if practicable); and in general terms, the reason the offeror's proposal was not accepted. FAR 15.1001(c). NTSB's notification did not contain this information. Finding 10. Decision NTSB's motion to dismiss the protest is DENIED. The protest is GRANTED. NTSB shall terminate for the convenience of the Government the contracts that it has awarded to Hi-Tec and Win; the contracts are presumed valid as to any computers which were delivered and accepted prior to the agency's suspension of contract performance, however. 40 U.S.C. 759(f)(5)(B), (6)(B) (1988). If NTSB continues to have a need for microcomputers in the configurations specified in this solicitation, it may amend the solicitation or issue a new one, requesting proposals to supply the number of computers that represents the agency's requirement. _________________________ STEPHEN M. DANIELS Board Judge We concur: _________________________ _________________________ ROBERT W. PARKER JOSEPH A. VERGILIO Board Judge Board Judge