THIS OPINION WAS INITIALLY ISSUED UNDER PROTECTIVE ORDER AND IS BEING RELEASED TO THE PUBLIC IN ITS ENTIRETY ON MAY 25, 1994 DENIED: May 12, 1994 GSBCA 12784-P INTEGRATED SYSTEMS GROUP, INC., Protester, v. DEPARTMENT OF THE NAVY, Respondent. Amer Syed, Shelton H. Skolnick, and Amy M. Hall of Skolnick & Leishman, P.C., Derwood, MD, counsel for Protester. Starr J. Sinton, Office of Counsel, Naval Surface Warfare Center, Department of the Navy, Port Hueneme, CA; and Anita M. LeBlanc, Office of General Counsel, Naval Supply Systems Command, Arlington, VA, counsel for Respondent. Before Board Judges WILLIAMS, DeGRAFF, and GOODMAN. WILLIAMS, Board Judge. On March 10, 1994, Integrated Systems Group, Inc. (ISG) filed this protest challenging the Department of the Navy's (Navy's) award of a purchase order for one workstation, ancillary equipment, and software to Government Technology Services, Inc. (GTSI) under request for quotation (RFQ) number N63394-94-Q-0051. The procurement was conducted under the small purchase procedures of the Federal Acquisition Regulation (FAR). ISG claims that the Navy improperly rejected its proposal as being noncompliant with the RFQ's requirements. The Navy contends that the procurement was intended to be a sole source procurement for a Sun MicroSystems (Sun) engineering workstation, ancillary equipment, and software, and ISG proposed noncompliant TATUNG equipment.[foot #] 1 The Navy also asserts that ISG was not, during all times relevant to this protest, an eligible offeror under federal procurement regulations because ISG had been proposed for debarment by the Department of the Army from November 23, 1993, to February 1994 - - after the RFQ was issued and before award was made, but at the time ISG submitted its quote. Because ISG failed to show that its proposed TATUNG equipment was equal to the Sun equipment, we deny this protest. We deem the fact that ISG was proposed for debarment at the time of the submission of its proposal to be irrelevant. Findings of Fact On September 9, 1993, the Navy's competition advocate approved a "Single Award Justification" for a Sun workstation. The approval stated in pertinent part: A major portion of computer code written for the initial implementation of the [system] is hardware platform, and operating system specific. The current software will only function with a Sun MicroSystems' "Sparc" processor utilizing Sun MicroSystems' "Sparc" system architecture. No alternate device is commercially available. Later iterations of the EDN [Engineering Development Network] system software will be platform independent, this however is not expected to occur for 12 to 18 months. . . . . The hardware and software products are patented and copyrighted by Sun MicroSystems. For the reason stated above, only the Sun MicroSystems or an authorized Sun MicroSystems Distributor can provide the required products. The required source is: Sun Microsystems Hearing Exhibit 2. On November 15, 1993, the Naval Surface Warfare Center in Port Hueneme, California issued RFQ N63394-94-Q-0051. Protest File, Exhibit 4. The RFQ was transmitted to three vendors, one ----------- FOOTNOTE BEGINS --------- [foot #] 1 The Navy's contention that the procurement was intended to be sole source for SUN equipment contradicts the terms of the RFQ, which permits offers of "brand name or equal" equipment. ----------- FOOTNOTE ENDS ----------- of which was ISG, as well as the Public Bid Board.[foot #] 2 Transcript at 79. The Navy purchasing agent checked the list of debarred or suspended contractors[foot #] 3 at the time that the solicitation was issued, and ISG was not on the list at that time. Transcript at 89-90. During the remainder of this procurement, the purchasing agent did not check that list. Id. The RFQ was a "small business - small purchase set-aside." Protest File, Exhibit 4. The items requested were: 0001 ENGINEERING WORKSTATION, 19" COLOR MONITOR, 16 MBYTE RAM, 424 MBYTE DISK DRIVE, SUN MICROSYSTEMS P/N: SUN 4/30GX-16-P43 PR NUMBER: N63394-32320003 0002 TYPE 5 COUNTRY KIT FOR SUN SPARC LX SUN P/N: SUN X35OOK PR NUMBER: N63394-32320005 0003 FLOPPY DISK, 3.5", INTERNAL, 1.44 MBYTE CAPACITY, P/N: SUN X556A PR NUMBER: N63394-32320007 0004 CD ROM, EXTERNAL, P/N: SUN X559A PR NUMBER: N63394-32320008 0005 SOFTWARE SOLARIS VERSION 2.2 OPERATING SYSTEM, CD ROM MEDIA P/N: SUN SOL-2.2-C PR NUMBER: N63394-32320010 0006 SOFTWARE ANSWER BOOK FOR SOLARIS 2.2 P/N: SUN SOLA-2.2-P PR NUMBER: N63394-32320011 0007 MEMORY UPGRADE FOR SUN SPARC LX, 8MBYTE PR NUMBER: N63394-32320012 Protest File, Exhibit 4. The RFQ stated: ----------- FOOTNOTE BEGINS --------- [foot #] 2 In procurements of over $5,000 written RFQs are posted on a public bid board. Transcript at 79. [foot #] 3 The title of this list is the "Lists of Parties Excluded from Federal Procurement or Nonprocurement Programs," published by the General Services Administration's Office of Acquisition Policy. Hearing Exhibit 10. ----------- FOOTNOTE ENDS ----------- IMPORTANT: This is a request for information and quotations furnished are not offers. . . . This request does not commit the Government to pay any costs incurred in the preparation of the submission of this quotation or to contract for supplies or services. . . . Any representations and/or certifications attached to this Request for Quotations must be completed by the quoter. Id. There were no requests for representations or certifications relating to debarment, proposed debarment, or suspension attached to the instant RFQ. Id. Nor was FAR 52.209-5, "Certification Regarding Debarment Suspension Proposed Debarment . . ." incorporated by reference into the RFQ. Hearing Exhibit 6. The RFQ's Supplemental Data Instructions and Information contained the following paragraph: Brand names contained in the item description(s) are not meant to be restrictive and quotes on "or equal" are acceptable, unless otherwise indicated. Please furnish sufficient catalog cuts, brochures, or descriptive data to allow complete evaluation of the item quoted, if quoting an equal. Failure to do so may result in your firm NOT BEING CONSIDERED FOR AWARD. Protest File, Exhibit 6. The Navy's purchasing agent testified that the Navy intended this RFQ to be "a sole source procurement" in that only Sun MicroSystems' products were being solicited. Transcript at 64, 78. The hardware being procured under the RFQ was going to be used in association with a project called EDN (Engineering Development Network). EDN is a nationwide area network which currently has seven member sites configured with at least one Sun SPARC II workstation, a Telebit T3000 modem, and a laser printer. Hearing Exhibit 12 at 5. The software for EDN had already been developed, and was based on a Sun SPARC workstation. Transcript at 36. This EDN software is a combination of commercial, off- the-shelf packages, such as Interleaf and Oracle, as well as software developed by Navy engineers in-house to tie all the software packages together. Id. The workstation had to be capable of operating all EDN-specific "C" and "C++" procedure calls compiled on a Sun SPARC II processor. Hearing Exhibit 12 at 6.[foot #] 4 On November 23, 1993, the Department of the Army notified ISG that it had been proposed for debarment based upon its conduct in falsely certifying in proposals that ISG had not been terminated for default on Government contracts, failing to update ----------- FOOTNOTE BEGINS --------- [foot #] 4 These requirements were not stated in the RFQ. ----------- FOOTNOTE ENDS ----------- certifications, and providing false and misleading information during negotiations for a Government contract. Hearing Exhibit 10. On February 16, 1994, ISG and the Army reached a settlement on the proposed debarment, and effective that date, ISG was no longer proposed for debarment and was removed from the debarred or suspended list. Stipulation of the Parties; Transcript at 5-7. On November 30, 1993, while on the debarred or suspended list, ISG submitted its response to the RFQ. Protest File, Exhibit 6. ISG proposed: UNIT EXTENDED CLIN DESCRIPTION QTY PRICE PRICE ____ __________________________ ___ _____ ________ 0001 TATUNG microCOMPstation LX, 1 50 MHz 16MB RAM 520MB Internal SCSI-2Hard Drive 19" Color Monitor GX Graphics Card 0002 Type 5 Country Kit 1 Type 5 Keyboard 1 Optical Mouse 1 16 bit Audio Speakerbox/ Microphone 1 0003 TATUNG 3.5" internal Floppy Disk 1 0004 TATUNG 680 MB Desktop CD-ROM 1 0005 Solaris v2.2 OS on CD-ROM 1 0006 Software Answer Book for Solaris 2.2 1 0007 8 MB Memory Upgrade for microCOMPstation LX 1 TOTAL $7,686.70 $7,686.70 Hearing Exhibit 6. The Navy received two responses to the RFQ, that of the awardee, in the amount of $9,160, and that of ISG. Transcript at 79; Hearing Exhibit 9. In the product literature accompanying ISG's offer, there was a stamp which read "SPARC Compliant, SCD 1.1." Protest File, Exhibit 6 at 24. According to ISG's vice president, this legend indicates that "the equipment was submitted for, evaluated by, and certified by SPARC International for compliance with their testing and evaluation suite"; in his view this certification should have reassured the Navy that the TATUNG unit is "compliant with SCD certification and is compatible" with the Sun equipment specified in the RFQ. Transcript at 144-45. ISG's vice president further testified: Q So you gave us SCD, one little stamp. And you're telling us now at some length what all of this means. A Absolutely. Q But is there anywhere in this proposal that it tells any of those things? A No, no. It does not say that. Q Is there any note somewhere that says 'Please see the voluminous literature that this trademark should call to mind.' A No, it doesn't say that. Transcript at 169-70. A systems integration manager employed by SunSoft, a subsidiary of Sun MicroSystems, explained the SPARC Compliance Definition as follows: The SPARC compliance definition is a standard which is developed by an independent consortium of SPARC manufacturers called SPARC International. SPARC compliance definition seeks to define the hardware level of compatibility in terms of how you plug cards into the system and how you control various devices that are physical hardware devices in the system. In order to ensure compatibility that our operating system will run on all of these different systems, there needs to be cooperation of these different manufacturers. . . . . It's a public standard that's published. There are specific validation test suites that -- whereby you can prove that you are compliant. And once you've passed this, you are authorized to use the SCD logo on your advertising materials, which I believe Tatung does. Transcript at 31-32; see id. at 8. After receiving ISG's proposal, the Navy purchasing agent contacted ISG's marketing representative and "asked him to re- quote in accordance with the sole source requirement." Transcript at 49, 67. ISG's marketing representative replied that ISG's response to the RFQ was compliant. Id. The Navy purchasing agent then asked him for specifications so that the Navy could evaluate the compatibility of the equipment. Id. In response, on January 7, 1994, ISG supplied the Navy with a revised quote based on its General Services Administration schedule contract, and two additional pages of descriptive literature. Protest File, Exhibit 6 at 27-31. The first page was a SunWorld magazine reprint entitled "Review: Tatung microCOMPstation series LC + LX." Protest File, Exhibit 6 at 30. The reprint included an ASTC (Advanced Systems Test Center) Test Strip which rated the TATUNG workstations in the category "SPARC compatible." Id. The summary paragraph in the test strip stated: "These alternatives to SUN's microSPARC offerings provide the same computational speed at lower prices. Most of the features of its SUN cousins are available with SBus options." Id. The test strip included a bar chart which indicated: "Compatibility (30%)." Id. The Navy evaluators interpreted this literature to mean that the TATUNG products did not provide all features the SUN products provided and that TATUNG products were not fully compatible with the SUN products. Transcript at 116-17. The second document ISG submitted was a one-page TATUNG product description for the microCOMPstation series LC and LX. Protest File, Exhibit 6 at 31. This page listed information such as the capabilities, specifications, and dimensions for the processor, memory, storage, graphics, monitors, software, and described standard interfaces and the environment. Id. This literature only listed "Solaris 1.1 or 2.1" operating system software and not Solaris 2.2, as the RFQ specified. Id., Exhibits 4, 6 at 31; Transcript at 118. Under the heading "Software" and the subheading "Languages," this literature listed "C" along with a footnote, which stated: "Bundled with Solaris 1.1." Protest File, Exhibit 6 at 31. The technical evaluators did not know whether or not ISG was offering the required C programming language because they interpreted the literature as indicating that the C language was only bundled with Solaris 1.1. Transcript at 118, 122. The evaluators also did not know whether or not C++ language was being provided because it was not mentioned in the literature. Id. at 118. The Navy's branch manager who was also a technical evaluator had one of his engineers make three telephone calls to ascertain whether the TATUNG equipment could be supported. Transcript at 132-33. He "called Sun hardware to see if Tatung would be supported under Sun hardware. The answer was no." Id. The Navy's current hardware maintenance contractor could support the TATUNG machine. Id. The operating system (OS) maintenance support contractor advised that "if no changes were made to the software, it would be supported, as it was right now, [but] there was no guarantee that it would be supported in the future under that machine." Id. at 133. After reviewing the literature regarding the TATUNG equipment obtained from ISG, the Navy's technical evaluator still could not ascertain whether the Navy's proprietary EDN software would be able to run on the equipment proposed by ISG without modification. Transcript at 118. The equipment had not been demonstrated and the RFQ did not provide for any such demonstration. Id. at 118-19. Further, the Navy's technical evaluator was concerned about the compatibility of the TATUNG equipment and the existing Navy equipment. He testified: Well, based [on the fact] that our system only has Sun hardware and all the software development so far has been for Sun hardware and all the testing performed has been for Sun hardware, I'm not sure that the software that we have developed would work on everything else or if it works, how much effort would be dedicated to make it work. Transcript at 119. He further testified that there was nothing in ISG's submission that assisted him in determining whether or not there would be this future capability. Id. at 119-20. He explained: I do not have an easy feeling that [the TATUNG] machine the way it comes from the box would run my software. Past experience, the way the literature says most of the features of the Sun well, most of the features are not all of the features. So what is the difference? It doesn't say what the difference is. Therefore, I have insufficient data. Besides, I have never seen it work before. Transcript at 131-32. In essence, the Government technical evaluators' decision to reject protester's quote was driven by the fact that ISG had not demonstrated in its quotation that the equipment would work and that the Government evaluators did not have independent knowledge of the equipment. Transcript at 135-36. On January 24, 1994, the branch manager at the Naval Surface Warfare Center prepared a memorandum for the purchasing agent. The memorandum stated: All hardware currently used with the EDN [Engineering Development Network] project is manufactured by Sun MicroSystems. Sun MicroSystems holds the software and operating system maintenance contracts for all workstations connected to the station's network. Sun will not guarantee future revisions of its operating system on third party hardware platforms. The TATUNG workstation may run the EDN software now, but there is no guarantee that later revisions of the operating system will function on this specific workstation. To assure present and future compatibility with the intended use of the machine, [we] recommend that the originally specified Sun workstation be purchased instead of the TATUNG. Protest File, Exhibit 7. On January 26, 1994, the purchasing agent received approval from the department manager to award to other than the lowest bidder. Protest File, Exhibit 8. On March 1, 1994, the award was made to GTSI for a total price of $9,160. For CLINs 0004, 0005, and 0006, GTSI offered Sun replacement or updated versions of the CD ROM, the OS software and the answer book. Id., Exhibit 9. ISG was notified orally on March 10, 1994, that award had been made to GTSI. Complaint at 2. The protester was informed that the equipment proposed by ISG did not meet the Government's requirements because it was not compatible with the Government's existing equipment. Id.; Answer 8. Discussion Protester Is Not Estopped From Pursuing This Protest Because It Was Proposed For Debarment At The Time Of Its Quotation Respondent argues that because protester did not notify the agency of its suspended status when it submitted its quotation, protester "induced the agency to deal with it in violation of the FAR" and that it "would be unconscionable for protester to be allowed to complain of any agency actions during the period of its suspension." Respondent's Posthearing Brief at 15. Respondent has not argued that protester lacks status as an interested party, but contends only that protester "should be estopped from complaining about any actions during the period it was itself violating Government procurement regulations," i.e., its period of ineligibility. Answer, Defenses 3. We reject respondent's argument. In this procurement there was no requirement that ISG notify the agency that it was proposed for debarment when it submitted its quotation. The request for quotations itself specified: "IMPORTANT: . . . Any representations and/or certifications attached to this Request for Quotations must be completed by the quoter." Protest File, Exhibit 4. There were no requests for representations or certifications regarding debarment, proposed debarment, or suspension attached to the RFQ. Nor was any clause concerning debarment, proposed debarment, or suspension incorporated by reference into the RFQ. FAR 9.405(d)(3) provides guidance regarding vendors on the debarred or suspended list: Proposals, quotations, or offers received from any listed contractor shall not be evaluated for award or included in the competitive range, nor shall discussions be conducted with a listed offeror during a period of ineligibility, unless the acquiring agency's head or designee determines, in writing, that there is a compelling reason to do so. If the period of ineligibility expires or is terminated prior to award, the contracting officer may, but is not required to, consider such proposals, quotations, or offers. 48 CFR 9.405(d)(3) (1993). Under this regulation, the contracting officer should not have entertained the quotation from ISG while ISG was on the debarred or suspended list, absent a determination by the head of the agency that there was a compelling reason to do so. However, the contracting officer was unaware of ISG's status, and once ISG was removed from the debarred or suspended list, the contracting officer had the discretion to consider ISG's quotation. The Comptroller General has recognized that in a negotiated procurement, once a suspension or proposed debarment has been lifted, the contracting agency has the discretion to accept the proposal of an offeror who was suspended or proposed for debarment. Auto-X, Inc., B-238046.2, B-238046.3, 90-1 CPD 532, at 2 (June 6, 1990); Darby Development Co., et al., B-234944.2; B-234944.3, 89-2 CPD 452, at 3 (Nov. 9, 1989); Casde Corp., B-235202, 89-2 CPD 136, at 3 (Aug. 14, 1989).[foot #] 5 In submitting a quotation, ISG never made any affirmative representation one way or the other as to its status regarding the proposed debarment. By the time award was actually made, ISG was off the list and was in fact eligible, but its quotation was legitimately rejected for other reasons. We deem this to be a ----------- FOOTNOTE BEGINS --------- [foot #] 5 The contracting agency's discretion in this regard applies only to procurements using negotiated procedures, not sealed bidding, since FAR 14.404-2(h) specifically makes a bidder's status as of bid opening determinative of the bidder's eligibility for an award under an invitation for bids. This case is not governed by FAR 14.404-2(h). ----------- FOOTNOTE ENDS ----------- situation of "no harm, no foul."[foot #] 6 In sum, ISG did not make any false representations to the Navy and, therefore, ISG is not estopped from pursuing this protest. The Navy's Rejection of ISG's Quotation Did Not Violate Statute or Regulation Protester contends that respondent improperly rejected its quotation of TATUNG equipment. We deny this ground of protest. The burden was on protester to establish that its proposed equipment was equal to the Sun brand name equipment specified in the RFQ. The RFQ expressly stated: Brand names contained in the item descriptions are not meant to be restrictive and quotes on 'or equal' are acceptable, unless otherwise indicated. Please furnish sufficient catalog cuts, brochures, or descriptive data to allow complete evaluation of the item quoted, if quoting an equal. Failure to do so may result in your firm NOT BEING CONSIDERED FOR AWARD. Protest File, Exhibit 6 at 8. Protester submitted some technical literature describing the TATUNG equipment, but this literature left serious questions in the minds of the Government evaluators as to whether the TATUNG equipment was "equal" to the Sun equipment and would be compatible with the agency's existing hardware and software. The literature itself raised questions as to the extent of compatibility since the Sun ASTC rating for compatibility was 30%. The literature said "most" of the features of the Sun products "are available with SBus options," causing the Navy to wonder what features were not available. Further, the Solaris 2.2 operating system, a system the Navy requires, was not specified in the technical literature provided by ISG. In addition, the Government evaluators had concern that later revision of Sun's operating system software might not work on the TATUNG workstation, and they wanted to insure present and future compatibility. Nor did the literature indicate that the proposed equipment could run the C++ language which the Navy required. The Navy evaluators had legitimate questions about whether or not the equipment could in fact run the agency's unique EDN software. Protester contends that the Navy evaluators should have recognized that the stamp "SCD Compliant" meant that the TATUNG equipment was fully compatible with the Sun equipment and would be able to run the Navy's EDN software. There are several problems with this contention. First, the Board is not persuaded ----------- FOOTNOTE BEGINS --------- [foot #] 6 The fact that the Navy had actually completed its evaluation of ISG's quotation while ISG was ineligible does not change this result. ISG was eligible as of February 16, 1994, its quotation was still viable, and award was not made until March 1, 1994. ----------- FOOTNOTE ENDS ----------- that this SCD certification stamp should have demonstrated full compatibility to the satisfaction of the Government. The technical descriptive literature did not explain what the SCD certification meant, as acknowledged by protester's vice president. Second, as indicated above, the literature itself raised questions about the extent of compatibility. Thus, the record simply does not support a conclusion that the Government evaluators erred in rejecting ISG's quote. Rather, the Government evaluators made a good faith effort to review protester's descriptive literature and concluded that they simply could not tell whether or not protester's equipment would actually meet the Navy's needs. Under these circumstances, in the context of a small purchase, the Government acted reasonably in rejecting protester's quote. Memopro, Inc., GSBCA 8264-P, 86-1 BCA 18,702, at 94,046-47, 1986 BPD 6, at 3-4; See generally, Amity Precision Spring Co., B-210949, B- 210949.2, 83-2 CPD 133 (July 27, 1983) (under small purchase procedures, "a contracting officer need only solicit quotations from a reasonable number of potential sources, judge the advantages and disadvantages of each quotation in relation to the prices quoted, and determine in good faith which quotation will best meet the needs of the Government"). As we recognized in RMTC Systems, Inc. v. Department of the Army, GSBCA 12637-P, 94-2 BCA 26,614, 1993 BPD 365: It is immaterial that [protester] can show, in this protest, that the product would have met the Government's specification. [Protester] did not meet its affirmative obligation to supply the information necessary to enable the Government to determine that this was the case. The Government need not risk "acceptance of specifically named products which do not meet its specifications." (citations omitted). Other Grounds of Protest In its original complaint, ISG also raised two other grounds of protest which it has not seriously pursued. First, protester claimed the agency applied technical evaluation criteria which were not stated in the RFQ, i.e., compatibility with existing equipment. This assertion lacks merit. The RFQ requested products that were brand name Sun products or "equal" to those products. The quotations were evaluated to determine whether they were equal to the brand name products requested. Of course, the Navy wanted equipment which was compatible with its existing equipment. But that was not an unstated evaluation criteria, and the Navy was not required to explain its intended use of the equipment in an RFQ under the small purchase procedures. The rules that procuring agencies must follow in a small purchase are less stringent than they are in other procurements. Memopro, Inc., 86-1 BCA at 94,047, 1986 BPD 6, at 3-4. To the extent the protester has alleged that the agency improperly insisted on receiving Sun equipment and effectively conducted a sole source procurement, that allegation also fails. The evidence establishes that the Government entertained protester's quotation on an alternative source, the TATUNG equipment, made a good faith effort to evaluate that equipment, and properly rejected the quotation because ISG failed to demonstrate that the TATUNG equipment was equal to the Sun equipment. Finally, ISG claimed that the Navy "failed to timely notify ISG of its rejection of ISG's technical proposal and the subsequent award to GTSI." ISG appeared to abandon this contention and failed to adduce any persuasive evidence demonstrating prejudice due to the alleged tardy notification. In any event, the allegation fails. In small purchases, the FAR specifies: "[n]otification to unsuccessful suppliers shall be given only if requested." FAR 13.106(b)(9). On March 10, 1994, when ISG called the Navy to inquire about the status of the procurement, it was informed that award had been made. Such notification was sufficient. Decision The protest is DENIED. The suspension of respondent's delegation of procurement authority lapses by its terms. _____________________________ MARY ELLEN COSTER WILLIAMS Board Judge We concur: ____________________________ ____________________________ MARTHA H. DeGRAFF ALLAN H. GOODMAN Board Judge Board Judge