THIS OPINION WAS INITIALLY ISSUED UNDER PROTECTIVE ORDER AND IS BEING RELEASED TO THE PUBLIC IN REDACTED FORM ON SEPTEMBER 12, 1995 GRANTED: August 16, 1995 GSBCA 13281-P INTEGRATED SYSTEMS GROUP, INC., Protester, v. DEPARTMENT OF HEALTH AND HUMAN SERVICES, Respondent. Shelton H. Skolnick, Bruce Trimble, Wayne Finegar, and Amy Hall of Skolnick & Leishman, Derwood, MD, counsel for Protester. Barbara Robbins and Mita Shukla, Office of the General Counsel, Department of Health and Human Services, Washington, DC; and Richard S. Brown, Office of the General Counsel, Department of Health and Human Services, Rockville, MD, counsel for Respondent. Before Board Judges DEVINE, HYATT, and GOODMAN. GOODMAN, Board Judge. Protester, Integrated Systems Group, Inc. (ISG), filed this protest on May 17, 1995, amended on June 12, 1995, challenging its exclusion from the competitive range in a negotiated procurement conducted by respondent, the Department of Health and Human Services (HHS). The parties elected to submit the protest on the record pursuant to Board Rule 11.[foot #] 1 We grant the protest. Findings of Fact 1. Respondent issued request for proposals (RFP) number 213-95-0006 (the solicitation) on September 14, 1994, to acquire- ----------- FOOTNOTE BEGINS --------- [foot #] 1 48 CFR 6101.11 (1994). ----------- FOOTNOTE ENDS ----------- direct access storage device (DASD) units and associated cache controllers. Protest File, Exhibit 1. 2. Section M of the solicitation contains the evaluation factors for award and reads, in pertinent part: Section M - EVALUATION FACTORS FOR AWARD M.1. GENERAL INFORMATION . . . Offerors are hereby advised that award may be made without written or oral discussions. Accordingly, proposals should be submitted initially on the most favorable terms from a technical and cost standpoint. M.2. AWARD An award will be made to that Offeror who meets the mandatory requirements, is determined to be responsive and responsible in accordance with the terms and conditions of the RFP and who receives the highest total evaluated score, technical points and price points combined. M.3. EVALUATION METHODOLOGY . . . . M.3.1. Technical Evaluation (1190) Conformance to the mandatory requirements in Section C. will be determined based upon a review of the technical documentation and the Offeror's statements provided in the technical proposal. Only those proposals that meet all mandatory requirements will be considered for further evaluation in accordance with the technical evaluation factors presented herein. Offerors may submit any information that will permit an equitable evaluation of these factors and criteria, but are encouraged to be as concise and specific as is practicable in their response. Submission of published material in support of the Offeror's response is encouraged. Protest File, Exhibit 1, M at 1. 3. Section C of the solicitation reads, in pertinent part: C.2 MANDATORY SPECIFICATIONS These are mandatory requirements, except where stated, and the Contractor must supply affirmative responses for each item. Negative responses or no responses to these requirements will indicate that the Contractor cannot fulfill the requirements of the Government and the offer will be determined unacceptable. All equipment and associated software offered by the Contractor must be complete and operational to the fullest extent by the date of contract award. The equipment shall be in routine production on or before the date of installation of the equipment. Prototype or "one-of-a-kind" systems will not be acceptable. . . . . C.2.2.1 High Performance Storage Devices The high performance storage devices shall be large capacity, non-removable media direct access storage with a superior track record for high availability and reliability. The Contractor shall provide documentation verifying the performance and reliability of the proposed equipment. . . . . C.2.2.2. Integrated Cache Controller Storage Devices Any proposed integrated cache controller storage devices shall be configured to eliminate single points of failure that may prevent access to data. These devices shall attach to both the IBM 3090-400J and ES/9021-520 CPUs via ESCON channel attachments. The minimum specifications and characteristics for the Contractor's integrated cache controller storage devices are as follows: . . . . j. Support for "Dual Copy": each controller must protect the availability of data by allowing the creation of a duplicate copy of the data on a volume and storing it on a different device in the same subsystem through the use of non- volatile storage; activation of the copy is by a systems utilities command and will not require a modification to access methods for applications. . . . . C.2.2.4. Error Handling and Command Retry At a minimum, the equipment must have the capability to correct single data error bursts contained within three bytes and must be able to detect all single data error bursts contained within five bytes. . . . . C.2.2.6. Hardware and Software Compatibility All equipment must be totally compatible with the hardware and software components described in C.1.4. and C.1.5. Any software must also be compatible with ABR data management system version 5.2 level 31. . . . . C.2.5. Installed Equipment The Contractor shall provide references (i.e., company name, address, contact person, and phone number) of two sites located within the contiguous United States where a like equipment configuration is an operation including a brief description of the software and hardware configuration for the DASD equipment installed at these locations. Protest File, Exhibit 1, C at 3-8. 4. The following language in ISG's initial proposal is relevant to the instant protest: Protest File, Exhibit 8 at 00005. 11. Six offerors, including ISG, submitted eight proposals[foot #] 4 in response to the solicitation. A six-member technical evaluation panel (TEP) convened on December 13, 1994, to review proposals. Initial reviews were undertaken individually by each TEP member. Protest File, Exhibits 8, 9. 12. Robert A. Winter, the director of the Division of Computing Services, Parklawn Computer Center, the Public Health Service, Department of Health and Human Services, assisted in the preparation of portions of the solicitation. He also reviewed the solicitation document which was prepared by a contract specialist and acted as a member of the TEP and evaluated proposals received in response to the solicitation. Declaration of Robert A. Winter (Winter Declaration) (July 10, 1995) 3. 13. Mary M. Boehly, the deputy director of Mr. Winter's division, assisted in the preparation of portions of the solicitation, reviewed the solicitation document, acted as the chair of the TEP, and evaluated proposals received in response to the solicitation. Declaration of Mary M. Boehly (Boehly Declaration) (July 10, 1995) 3. 14. The director and deputy director explained the review of technical proposals as follows: The evaluation scheme set forth in Section M of the Solicitation provided that proposals would first be examined to determine compliance with all of the mandatory requirements contained in Section C.2. Only those proposals meeting the mandatory requirements would be eligible for further evaluation in accordance with the technical evaluation factors set forth in Section M.3.1. In other words, proposals were first subjected to a "pass-fail" evaluation as to the mandatory requirements, and proposals that failed this initial evaluation were not eligible for point scored technical evaluation. The initial technical review of proposals proceeded as follows: each of the six TEP members performed an individual review of each proposal against a "mandatory requirements technical evaluation checklist" to determine compliance with the mandatory requirements of Section C.2. After the individual reviews were completed, the TEP met on January 11, 1995 to discuss each proposal and to reach a consensus as to whether each met the mandatory requirements. The TEP considered all documentation furnished with each proposal, including the technical literature, in reaching its determination. The TEP read and ----------- FOOTNOTE BEGINS --------- [foot #] 4 Two offerors submitted original and alternate proposals. ----------- FOOTNOTE ENDS ----------- considered the technical literature supplied by ISG in assessing compliance with the mandatory requirements. Winter Declaration 4-5; Boehly Declaration 4-5. 15. By memorandum dated March 8, 1995, the TEP informed the contracting officer that it had determined that ISG's proposal and the alternate proposal of another offeror did not meet all the mandatory requirements. The memorandum stated further that "[t]he technical evaluation of those proposals found to be compliant is continuing in accordance with Section M.3.1. Upon completion, a technical evaluation report and recommendation of competitive range will be forwarded." Protest File, Exhibit 14. 16. Further evaluations of those proposals found to have met the mandatory requirements continued. By memorandum dated April 10, 1995, the contracting officer accepted the competitive range determination which was recommended by the contract specialist and the TEP. The memorandum notes that ISG's proposal "did not meet all the mandatory requirements. Therefore, in accordance with Section M.3.1, [it was] not further evaluated." With regard to other offerors, the alternate proposal of one was also determined not to have met all the mandatory requirements and was not further evaluated. The remaining proposals were evaluated, and all but one were included in the competitive range. The contracting officer stated in the memorandum that "[i]t is believed that weaknesses noted in each of the proposals recommended for the competitive range can be remedied through negotiations such that any of them will have a reasonable chance of being selected for award." Protest File, Exhibit 16. 17. Issues were determined for negotiation with offerors whose proposals were included in the competitive range. Protest File, Exhibits 22-25. Thereafter, discussions with these offerors were conducted. Board's Conference Memorandum (August 10, 1995). 18. By letter dated April 11, 1995, respondent informed ISG that "[e]valuation of your proposal . . . has been completed in accordance with the criteria set forth in Section M.3 of the solicitation . . . . At the conclusion of the . . . evaluation, the competitive range was established for the purpose of conducting negotiations. . . . [Y]our proposal was not selected for inclusion in the competitive range because it did not satisfy the following mandatory requirements." Protest File, Exhibit 17. 23. On May 3, 1995, the contracting officer issued a decision denying the agency protest. Protest File, Exhibit 20. 24. On May 17, 1995, protester filed the instant protest at this Board, alleging that "[r]espondent has violated the 'full and open competition' requirement of the Competition in Contracting Act of 1984 . . . FAR [Federal Acquisition Regulation] 15.607 'Disclosure of mistakes before award' . . . and FAR 15.609 'Competitive range.' Complaint 6. 25. On June 12, 1995, ISG amended its protest complaint, alleging that the proposals of four other offerors "were included [by respondent] in the competitive range even though [the proposals] did not comply with all of the mandatory requirements [of the solicitation]." Complaint Amendment 1 at 2. ISG further alleged that respondent violated FAR 6.101 and 15.603 by excluding protester from the competitive range, while proposals of other offerors were placed in the competitive range even though these proposals did not meet the mandatory requirements. 26. After a review of the parties' record submissions, the Board reopened the record to seek additional factual information from the parties. Protester filed a declaration of Stephen Mills, its vice president of marketing, and a videotape entitled [foot #] 8 Respondent filed a second declaration of the deputy director. 27. We have reviewed the relevant portions of ISG's proposal with regard to the determinations made by the TEP and the contracting officer that various mandatory requirements of the solicitation were not met. We have made the following findings: a) In response to Section C.2 of the solicitation, ISG's proposal contained an affirmative statement of compliance with the mandatory requirement, i.e., that "[a]ll equipment and associated software offered by ISG is currently operational to the fullest extent by the date of contract award. The equipment is in routine production." Finding 6. We find that ISG's statement ----------- FOOTNOTE BEGINS --------- [foot #] 8 Respondent has objected to the submission of this declaration and the videotape, as the information contained was not part of the original proposal. The videotape was not viewed by the Board in deciding this protest. With regard to the declaration, the statements contained in it were in direct response to an inquiry by the Board, which required protester to indicate where in its proposal various information was contained and protester's understanding of various terminology. Respondent's objection to the Board's review of this information is overruled. ----------- FOOTNOTE ENDS ----------- e) In response to Section C.2.5. (Installed Equipment) of the solicitation, ISG identified three sites where the equipment had been installed but did not describe the hardware and software installed at those sites. Finding 10. This was an informational deficiency. In summary, we find that with regard to the mandatory requirements which respondent determined were not met, ISG's proposal contained several ambiguities and informational deficiencies, but did not conclusively demonstrate a failure to meet any mandatory requirement. 28. In light of the affirmative statement in ISG's proposal that the equipment is fully operational, its proposal is at worst ambiguous, but the statements relied upon by respondent do not support the conclusion that the equipment is not fully operational. Discussion Respondent's evaluation procedures in Section M of the solicitation, Finding 2, provided that proposals would first be examined to determine compliance with the mandatory requirements contained in Section C.2. Finding 3. Only those proposals determined to meet the mandatory requirements would be eligible for further evaluation in accordance with the technical evaluation factors set forth in Section M.3.1., and it was only after this further evaluation that the competitive range was established. Finding 2. As described by two of respondent's representatives who participated in the evaluation process, proposals were "first subjected to a 'pass-fail' evaluation as to the mandatory requirements, and proposals that failed this initial evaluation were not eligible for point scored technical evaluation" after which the competitive range was determined. Finding 14. Respondent determined that ISG's proposal indicated that the equipment, software and services (products) offered did not meet various mandatory requirements, Findings 15-19. ISG contends that it did meet the mandatory requirements, and that respondent failed to review the technical literature which accompanied ISG's proposal and to make use of all other information at its disposal in evaluating ISG's proposal. Accordingly, protester contends that respondent should have clarified any questionable information in the proposal, and that its proposal was therefore improperly excluded from the competitive range. Respondent argues that to communicate with ISG to determine whether the products offered did in fact meet the mandatory requirements "would permit the submission of a sloppy, confusing or ambiguous proposal (for compliant equipment), and allow the offeror to 'fill in the blanks' to the disadvantage of others who timely filed acceptable proposals." Respondent's Brief at 4.[foot #] 10 Respondent has taken the position in this protest that "whether the equipment, software and services offered by ISG met the mandatory requirements is irrelevant to the resolution of this protest." Rather, it believes that the question to be decided by this Board is: [W]hether, based upon a fair evaluation of the information contained in ISG's proposal, the TEP reasonably concluded that certain mandatory requirements were not met. In short, ISG, as the drafter of its proposal, must bear the consequences of any ambiguities or misstatements. See Integrated Systems Analysts, Inc.; Management American Corporation Systems, GSBCA Nos. 10750-P, 10757-P, 91-1 BCA 23,383 at 30. ISG should not be permitted, at this late date, to attempt to prove that its proposal would have been in the competitive range if only it had been better written. Respondent's Brief at 4-5. Respondent has mischaracterized the issue. The issue to be decided in this protest is whether respondent could properly decide, as it did at the earliest stage in the procurement, not ----------- FOOTNOTE BEGINS --------- [foot #] 10 This argument would be applicable where respondent intended to award and did award the contract without discussions, as the solicitation advised might occur. Finding 2; see, e.g., Federal Systems Group, Inc., GSBCA 11461-P, 92-1 BCA ___ ____ ___________________________ 24,591, 1991 BPD 316. However, such was not the case in the instant procurement. ----------- FOOTNOTE ENDS ----------- to evaluate ISG's proposal further, thereby precluding further evaluation of the proposal which would determine whether it could be included in the competitive range. Respondent's reliance upon our decision in Integrated Systems Analysts, Inc.[foot #] 11 is misplaced. In that procurement, the alleged ambiguity in protester's proposal occurred near the end of the evaluation process. Protester's proposal was included in the competitive range, written discussions and clarifications were conducted with offerors in the competitive range, and best and final offers (BAFOs) were requested and received. Respondent then issued an amendment to the solicitation and requested a second BAFO from the offerors in the competitive range. The cover letter of protester's second BAFO led respondent to conclude that the protester had changed its original BAFO and was no longer offering a certain hard drive which met a mandatory requirement in the solicitation, but instead was offering another hard drive that did not meet the mandatory requirement. Although protester testified that it did not intend to revise its BAFO as to the mandatory requirement, it admitted that the information submitted was susceptible of respondent's interpretation. The Board held: It would be unfair to permit [protester] to have a second attempt to offer the [required] drive . . . as a mere "clarification" when that action would effectively revise the offer in a material way and not afford other offerors a similar opportunity to revise their proposals. Nor can we fault [respondent] for declining to exercise its discretion to reopen discussions and request a third round of BAFOs. [Respondent] apprised offerors in the solicitation that award could be made without discussions, and the letter accompanying [the a]mendment . . . [which requested the second BAFO] expressly stated that [respondent] did not intend to conduct further discussions following [receipt of the second BAFO]. 91-1 BCA at 117,349, 1990 BPD 298, at 18. The facts which give rise to the instant protest occur in a very different time frame -- at the very beginning of the ----------- FOOTNOTE BEGINS --------- [foot #] 11 The Board granted one of the protester's motions for reconsideration of a portion of its initial decision, and affirmed that decision on other grounds. Integrated Systems __________________ Analysts, Inc. v. Department of the Navy, GSBCA 10750-P-R, 94-1 _________________________________________ BCA 26,567, 1993 BPD 319. ----------- FOOTNOTE ENDS ----------- evaluation process,[foot #] 12 during an initial "pass-fail" review of mandatory criteria which preceded further evaluation to determine the competitive range. We must first review the pertinent language in Section C.2 of the solicitation, which states: These are the mandatory requirements . . . the Contractor must supply affirmative responses for each item. Negative responses or no responses to these requirements will indicate that the Contractor cannot fulfill the requirements of the Government and the offer will be determined unacceptable. Finding 3. We have reviewed the portions of ISG's proposal concerning the mandatory requirements in question. We find that ISG's proposal contained ambiguities and informational deficiencies with regard to the mandatory requirements which respondent questioned. However, these ambiguities and informational deficiencies did not amount to noncompliance with mandatory requirements. Findings 27, 28. ISG did not offer "negative responses" or "no responses." At most, the information, when viewed in light of affirmative statements in its proposal indicating compliance with the mandatory requirements, may have created uncertainty as to whether the products offered by ISG complied with mandatory requirements.[foot #] 13 Respondent determined that the products offered failed to meet the mandatory requirements and decided not to evaluate the proposal further, even though ISG's proposal did not conclusively ----------- FOOTNOTE BEGINS --------- [foot #] 12 Respondent's argument that "ISG should not be permitted, at this late date, to attempt to prove that its proposal would have been in the competitive range if only it had been better written," Respondent's Brief at 5, is therefore factually inaccurate. While this protest is being resolved late in the procurement process, after further evaluation of other proposals and discussions with those offerors, respondent's actions giving rise to this protest occurred at the very beginning of the evaluation process, and ISG challenged those actions at the earliest possible time by filing its agency protest. Finding 22. [foot #] 13 Respondent concedes as much by attempting to convince us that "whether the equipment, software and services offered by ISG met the mandatory requirements is irrelevant to the resolution of this protest." Respondent's Brief at 3. While we do not need to decide compliance in order to resolve the protest, the fact that such has not been conclusively decided by respondent is an issue relevant to the resolution of this protest. ----------- FOOTNOTE ENDS ----------- show a failure to meet the mandatory requirements in question. In making such a determination, and stopping the evaluation of ISG's proposal at this early phase of the evaluation process, respondent acted contrary to the solicitation provision which required "negative . . . or no responses" for a determination of unacceptability. Respondent's actions constitute a violation of the statutory requirement that competitive proposals be evaluated based solely on the factors specified in the solicitation. 10 U.S.C. 2305(b)(1) (1994). Similarly, it violates the regulation reflecting this statutory requirement, 48 CFR 15.608(a) (1994) (FAR 15.608(a)). Respondent has not shown that it was precluded from further evaluating ISG's proposal and thereafter considering the proposal for inclusion in the competitive range. Had the proposal been further evaluated, and found otherwise technically acceptable despite the questions as to the mandatory requirements, such questions should not have precluded the proposal from inclusion in the competitive range. Under such circumstances, FAR 15.609(a) requires the proposal to be included in the competitive range and discussions to be held: The contracting officer shall determine which proposals are in the competitive range for the purpose of conducting written or oral discussion . . . . The competitive range . . . shall include all proposals that have a reasonable chance of being selected for award. When there is doubt as to whether a proposal is in the competitive range, the proposal should be included. As our appellate authority has emphasized: There is thus a tension between the necessarily broad discretion of an agency, acting through the contracting officer, to determine what bids are realistically competitive, and the mandate of the FAR [15.609(a)] that, when there is doubt, the questionable bid should be included. Birch & Davis International, Inc. v. Christopher, 4 F.3d 970, 973-74 (Fed. Cir. 1993). The record does not suggest that ISG's proposal is not capable of being made acceptable or that it lacks a reasonable chance of being selected for award. Thus, ISG's proposal should have been further evaluated and, if otherwise found technically acceptable, respondent's doubt as to whether the mandatory requirements were met should not have precluded the inclusion of the proposal in the competitive range and discussions to resolve the question as to the mandatory requirements. As discussions have already been held with those previously determined to be in the competitive range, Finding 17, no prejudice would result from discussions on these issues. Protester is entitled to have its proposal evaluated and an appropriate competitive range determination thus made. Protester's amended protest alleges that respondent violated statute and regulation by inclusion of the proposals of four other offerors in the competitive range, even though the proposals did not comply with all of the mandatory requirements of the solicitation. ISG is claiming that it was treated differently from other offerors, and thus unfairly. In light of our decision granting the protest, we need not address these allegations. Decision The protest is GRANTED. The Board's order of May 18, 1995, suspending respondent's delegation of procurement authority hereby lapses. ______________________ ALLAN H. GOODMAN Board Judge We concur: ______________________ ______________________ DONALD W. DEVINE CATHERINE B. HYATT Board Judge Board Judge