THIS OPINION WAS INITIALLY ISSUED UNDER PROTECTIVE ORDER AND IS BEING RELEASED TO THE PUBLIC IN REDACTED FORM ON AUGUST 15, 1995 __________________________________________________________ PROTESTER'S AND INTERVENOR'S MOTIONS FOR SUMMARY RELIEF AS TO COUNT I OF GSBCA 13306-P GRANTED: July 24, 1995 __________________________________________________________ GSBCA 13306-P, 13307-P, 13334-P ZENITH DATA SYSTEMS CORPORATION, WIN LABORATORIES, LTD., and GOVERNMENT TECHNOLOGY SERVICES, INC., Protesters/Intervenors, v. DEPARTMENT OF THE TREASURY, Respondent, and ELECTRONIC DATA SYSTEMS, Intervenor. Laura K. Kennedy, Grace Bateman, G. Matthew Koehl, and Kevin P. Connelly of Seyfarth, Shaw, Fairweather & Geraldson, Washington, DC, counsel for Protester/Intervenor Zenith Data Systems Corporation. Joseph J. Petrillo, William E. Conner, and Karen D. Powell of Petrillo & Associates, Washington, DC, counsel for Protester/Intervenor WIN Laboratories, Ltd. Richard J. Conway and Merle M. DeLancey, Jr., of Dickstein, Shapiro & Morin, L.L.P., Washington, DC, counsel for Protester/Intervenor Government Technology Services, Inc. Donald M. Suica, Corlyss M. Drinkard, Francis C. Inserra, Eileen G. Strong, Lori R. Larson, Robert H. Humphries, and Mark A. Allen, Office of Chief Counsel, Internal Revenue Service, Department of the Treasury, Washington, DC, counsel for Respondent. David S. Cohen, William F. Savarino, and G. Brent Connor of Cohen & White, Washington, DC; and Daniel Parker, Jr., Electronic Data Systems Corporation, Herndon, VA, counsel for Intervenor. Before Board Judges DANIELS (Chairman), BORWICK, and WILLIAMS. WILLIAMS, Board Judge. Protesters Zenith Data Systems Corporation (ZDS), WIN Laboratories, Ltd. (WIN), and Government Technology Services, Inc. (GTSI) challenge the Department of the Treasury, Internal Revenue Service's (Treasury's) award of a contract for computer equipment, software, and peripherals to Electronic Data Systems (EDS).[foot #] 1 This matter comes before the Board on respondent's motion to dismiss Count I of ZDS' protest as untimely and on ZDS', GTSI's, and respondent's cross motions for summary relief on Count I of ZDS' protest -- that Treasury failed to apply the stated evaluation factors and improperly evaluated EDS' two-year warranty. In its motion to dismiss, respondent contends that ZDS and GTSI had received notice during an earlier protest that respondent was considering the duration of warranties as part of its evaluation. Supplement to Respondent's Motion for Summary Relief on Count I of the ZDS Protest (Respondent's Supplement) at 2-3. In the earlier protest, International Data Products, Corporation (IDP) challenged its exclusion from the competitive range; ZDS and GTSI intervened on the side of the Government. During the course of that proceeding, respondent stated in its brief that it had interpreted IDP's proposal as offering an extended warranty and considered that to be a strength. Respondent contends that because GTSI and ZDS were parties to the earlier protest, they should be barred from challenging respondent's method of evaluating warranties in this protest. We disagree. Because the earlier protest did not involve the challenge to an award, did not involve any agency action adverse to ZDS and GTSI at that time, and because counsel could not have ----------- FOOTNOTE BEGINS --------- [foot #] 1 On June 19 and 20, WIN and GTSI intervened in ZDS' protest, GSBCA 13306-P, and supported all grounds of ZDS' protest; WIN, on June 19, also raised a new ground of protest, alleging that EDS' monitor was noncompliant, GSBCA 13307-P. On July 11, 1995, GTSI filed a separate protest, GSBCA 13334-P, raising three counts: (1) an irrational evaluation and best value analysis, (2) improper negotiations/auctioning, and (3) failure to disclose significant evaluation criteria and relative importance. ----------- FOOTNOTE ENDS ----------- disclosed such information to their clients under protective order, we do not deem the instant protest untimely. Moreover, WIN was not a party to the earlier protest and only learned of Treasury's method of evaluation at its debriefing; it timely filed its protest. Thus, in any event, WIN's protest, which raises the same contention, would survive dismissal of the other two. ZDS and GTSI, joined by WIN, seek summary relief on the ground that respondent improperly evaluated EDS' two-year warranty, affording EDS extra credit for that extended warranty when the solicitation only required a one-year warranty and did not notify offerors that the agency preferred a two-year warranty. Respondent also seeks summary relief on ZDS' Count I and contends that the solicitation permitted it to consider the duration of warranties in its technical evaluation. Alternatively, Treasury argues that the solicitation permitted it to attach value to the EDS extended warranty in the best value analysis, even if consideration of that warranty was not permitted under the technical evaluation. Because the solicitation did not advise offerors that the agency would evaluate and credit an extended warranty, as further explained below, we grant ZDS' and GTSI's motions for summary relief on Count I of ZDS' protest and deny respondent's cross motion.[foot #] 2 Findings of Fact The Request for Comments On April 9, 1993, Treasury issued a request for comments (RFC) advising vendors that it intended to conduct a procurement for microcomputers, notebooks, printers, peripherals, software, warranty, and documentation. GTSI's Opposition to Respondent's Motion for Summary Relief on Count I of the Zenith Protest Complaint (GTSI's Opposition), Exhibit 4. The RFC included a draft solicitation issued to obtain industry's review and comments. Id. Under Paragraph C.5.1, Warranty Geographic Scope, the draft solicitation required contractors to "provide for Basic Warranty and Optional Second Year warranty for all sites identified in Attachment 7." GTSI's Opposition, Exhibit 4 at 16. In addition, Paragraph C.5.7 of the draft solicitation expressly required a second-year warranty for contract line item numbers (CLINs) 10001, 10002, 10003, 10020, 10021, and 10030-32. Id. at 18. This paragraph continued: "The extended warranty shall be an ----------- FOOTNOTE BEGINS --------- [foot #] 2 This decision confirms the Board's oral ruling issued on July 13, 1995. ----------- FOOTNOTE ENDS ----------- additional 12 months which shall be ordered separately after expiration of the basic warranty period. The extended warranty period shall begin on the day after the effective date of the delivery order." Id. The draft solicitation also expressly stated that special emphasis in the evaluation would be placed upon length of warranty and two other factors. Paragraph M.10.1.3 of the draft solicitation stated: M.10.1.3 Warranty Support The Government will evaluate the Offeror's proposed warranty support solution and the degree to which life cycle support is provided to customers throughout the United States. Special emphasis will be given to the length, scope[,] mean time to restore and return to the customer, and the location of the offered warranty service centers. Additionally, the Government will evaluate the one (1) year optional warranty. ZDS' Opposition to Respondent's Motion for Summary Relief on Count I of ZDS' Protest (ZDS' Opposition), Attachment A at A-7. Industry Questions and Treasury's Answers on the RFC In response to the RFC, respondent received a number of questions concerning warranty issues, and issued a "TDA Questions and Answers Report." GTSI's Opposition, Exhibit 5. In the questions and answers (Q&As) recounted in that report, Treasury advised offerors both that no subjective evaluation points would be given for providing warranty support for longer than one year and that the Government no longer had a requirement for a two- year warranty. Id. at 8, 9. Specifically, the Government provided the following Q&As: Question #25: C.5 For evaluation purposes, would any credit be given for providing a warranty longer than 1 year and on-site support versus mail-in support? ANSWER: No subjective evaluation points will be given for providing warranty support for longer than 1 year. As far as the on-site support, please see revised Section C of the RFP [request for proposals]. . . . . Question #31: C.5.7 The second year warranty should be ordered with the initial bid. If it was ordered separately after expiration of the basic warranty period, the manufacturer would have to check each notebook for current technical status. Generally cost is higher if second year warranty is purchased after expiration of first year warranty. ANSWER: There is no longer a requirement for a two year warranty. . . . . Question #91: First sentence states: '...shall be ordered separately after expiration of the basic warranty period.' It is customary that an extended warranty be purchased when the original system is purchased. This prevents the necessity for the manufacturer to ascertain the condition of the system after the warranty expires. Please clarify when IRS will commit for the extended warranty service? ANSWER: The extended (second year) warranty requirement has been removed. Please see question 31. GTSI's Opposition, Exhibit 5 at 8, 9, 27; see also Q&A #127; id. at 39. The Solicitation On July 30, 1993, Treasury issued solicitation number IRS-93-0007. Protest File, Exhibits 4, 206. This procurement, known as Treasury Department Acquisition-1 (TDA-1), sought an indefinite delivery, indefinite quantity (IDIQ) type contract for certain equipment, software, documentation, and services. Id., Exhibit 206. Paragraph C.2, General Description, listed the categories of items being acquired and included a one-year warranty on hardware, stating: The Department of the Treasury and its bureaus require: - microprocessor-based microcomputers; - notebooks; - laser printers and portable printers; - storage devices (i.e., backup and external); - one year warranty on all hardware products; - applications software (including upgrades and updates to all delivered software products as defined in Section C.7). Protest File, Exhibit 206 at 4. Paragraph C.3 stated that Sections C.3 through C.14 "contain the minimum specifications that are mandatory for the contract." Id. at 5. This paragraph further stated the Government's "preferences" for certain commercial off-the-shelf (COTS) products, but did not mention a preference for a second-year warranty. Id. Paragraph C.5, Warranty and Customer Technical Service, provided: The overall period of contract performance of warranty and customer technical assistance services shall begin on the first day after the Government's acceptance of a CLIN product, and extend for a period of 365 calendar days. This means that if a CLIN product is accepted in month 25 after contract award, warranty and customer technical assistance services shall be provided on the day after this acceptance, and shall extend for a period of 365 calendar days into month 37. Protest File, Exhibit 206 at 16-17. Paragraph C.5.1, General Requirements, required the contractor to provide a "highly reliable and maintainable system" and to "provide the warranty services detailed herein" when failures and malfunctions occur. Id. Paragraph C.5.2, Coverage Period, reiterated the mandatory warranty period: The overall period of contract performance of warranty services shall begin on the first day after the Government's acceptance of a CLIN product, and extend for a period of 365 calendar days. This means that if a CLIN product is accepted in month 25 after contract award, warranty service shall be provided on the day after this acceptance, and shall extend for a period of 365 calendar days into month 37. Protest File, Exhibit 206 at 17. Paragraph C.5.7 contained the identical requirement for the overall period of customer technical assistance services as that covering warranties in Paragraph C.5.2. Id. at 18-19. The solicitation contained the following proposal preparation instructions regarding warranty services: L.14.7.5 TAB E - CUSTOMER TECHNICAL ASSISTANCE AND WARRANTY SERVICE The Offeror shall describe how it will meet the requirements of Section C.5.7. . . . This description shall include the volumes of calls that can be handled, the method of tracking/researching and getting back to the customer, the degree and experience levels of the technical staff and any methods (manual or automated) that would provide the information necessary to resolve the customer's concern. In addition, the Offeror shall describe all methods or procedures for problem resolution. This section of the proposal shall also contain the Offeror's detailed Warranty plan. The plan shall describe how the Offeror will provide all required warranty service to all possible locations identified in Attachment 7. The warranty plan shall include: (1) A description of how Offerors intend to meet the requirements of Section C.5 (excluding C.5.7). . . . (2) Offeror's proposed warranty service organization and its geographical location. (3) Name, address, and telephone number of the responsible manager at each site proposed for warranty service. (4) Procedures for contacting site dispatching service. (5) Types of trained service personnel at each site, showing experience levels and products serviced. (6) Problem resolution procedures. Protest File, Exhibit 206 at 83-84. Paragraph M.1 under Evaluation Factors for Award advised offerors of the nature of this procurement; that paragraph provided, in pertinent part: INTRODUCTION a. Offerors should note that this RFP is intended to be the first of a series of overlapping, maximum two- year contracts with the second contract scheduled to be awarded at the approximate mid-point of the base year of this first contract (during the second six months). When the second contract is in place, end users will be allowed to choose which contract to order from based on their individual needs. The minimum obligation will have been fulfilled in the first year of the contract. The optional year will not have a separate minimum. . . . b. . . . The Government is basically seeking a Contractor that is highly likely to successfully perform this first of a series of microcomputer acquisitions by continually delivering reliable products that meet the specifications in a timely, cost-effective manner as well as provide the equipment support and order tracking capability required, thus allowing the Department of Treasury, its offices, and its bureaus a means of fulfilling their missions. Protest File, Exhibit 206 at 93. The solicitation required that an offeror had to submit a proposal which met all mandatory requirements of the RFP to be eligible for selection and award. Protest File, Exhibit 206 at 93. Paragraph M.4.1 addressed source selection as follows: That responsible Offeror whose proposal, containing the combination of management, technical, price, and other non-price-related features, offers the best overall value to the Government will be selected. The Government is more concerned with obtaining superior management, technical, and other non-price-related features than with making a contract award at the lowest price. The Government will not make a contract award at a significantly higher price to acquire slightly superior management, technical, and other non- price-related features. However, the Government may make an award at a significantly higher price to acquire significantly superior management, technical, and other non-price-related features if the value of these features is found by the Source Selection Authority (SSA) to be worth the significantly higher price. Selection will be determined on the basis of the following: (i) how well each proposal's management and technical features satisfy the proposal's numerically- scored evaluation criteria described in Section M.6; (ii) an integrated comparison of each proposal's management, technical, and other non-price-related features; (iii) by comparing differences in overall cost to the Government. Protest File, Exhibit 206 at 94. The solicitation did not expressly state that offerors whose proposals exceeded minimum mandatory requirements would be given extra credit. Id., Exhibit 206. The solicitation called for an integrated comparison of proposals' features as follows: M.4.2 The integrated comparison of each proposal's features will include not only those management and technical features which have been numerically-scored as a result of the evaluation addressed in Section M.6, but also other non-price-related features that may not be addressed in Section M.6. Non-price-related features include all preferences stated in the solicitation except for those related to energy-efficiency which will be scored under M.6.3.1. Other non-price-related features include, but are not limited to: whether the offeror has proposed the Government's preferred word processing and spreadsheet software, whether the offeror has a proven capability to guarantee that contract orders will be delivered in less than the required delivery schedule, and whether the offeror has proposed software and hardware that are the latest commercial off-the-shelf (COTS) versions or releases and models respectively. The Government will consider, for each CLIN, whether the item or components proposed for each CLIN are production items that are available from current stock (including when they entered production); whether the item is based on proven technology which is not obsolete or obsolescent; whether the item has a history of reliability and customer satisfaction; and whether there is an established program for continued production of the item and continued technical support and maintenance of the item. Protest File, Exhibit 206 at 94-95. Section M.6 addressed the specific evaluation criteria for management and technical areas. Protest File, Exhibit 206 at 96-99. This section contained the following specific evaluation criteria and subcriteria therein listed (in descending order of importance) along with the possible points offerors could attain: Contract Management - 40 points 1. Program Management 2. Production, Order Processing and Delivery Capabilities 3. Quality Control Plan 4. Customer Technical Assistance and Warranty Support Plan Past and Present Performance - 30 points (no subcriteria) Technical - 20 points 1. Environment 2. Installation and Configuration 3. Documentation Subcontracting Plan - 10 points 1. Previous Performance 2. Proposed Plan Protest File, Exhibit 206 at 98-99. The solicitation no longer contained an evaluation criterion for length of warranty; Paragraph M.10.13, as it appeared in the draft solicitation, was not included. Protest File, Exhibit 206. Under Paragraph M.6.1, Contract Management, the solicitation advised offerors that the subcriteria listed below were ranked in descending order of importance. This paragraph further stated: "Unless separate elements are specifically identified, each subcriterion is evaluated in its entirety." Protest File, Exhibit 206 at 96. Paragraph M.6.1.3 provided: M.6.1.3 Quality Control Plan The Government will consider the methods used to control the quality of the contract supplies and services from receipt of the supplier's components by the Contractor through acceptance of the equipment by the Government and the subsequent warranty period. The Offeror's submission should reflect the processes and procedures in place now and what changes, if any, are being made for performance of this contract. Evaluation of the burn-in, certification and configuration procedures (to include pre-configuration as required by RFP Section C.3.2) for microcomputer systems will be conducted by the Government. The inspection system and the methods of identifying and correcting deficiencies in the quality of contract supplies and services will also be considered. Protest File, Exhibit 206 at 97. Evaluation of warranty was addressed in Paragraph M.6.1.4, along with evaluation of customer technical assistance (CTA), as follows: The Government will evaluate the proposed customer technical assistance capabilities. Consideration will be given to the volume of calls that can be answered and assisted, type and experience levels of the technical support staff, the methods provided to obtain assistance and problem resolution procedures. The Government will evaluate the Offeror's proposed warranty service plan in relation to the specific, offered time to restore and return item(s) to the customer, and how the Offeror will manage and coordinate nationwide warranty support for the sites listed in Attachment 7. Protest File, Exhibit 206 at 97-98. Paragraph M.6.2 provided: M.6.2 Past and Present Performance The Government will evaluate the Offeror's past and present performance and experience with programs that have prepared the Offeror to undertake a contract of the scope and magnitude envisioned in this Solicitation. 'Past and present performance and experience' includes, but is not limited to, that performance and experience of the officials and employees of the proposed prime contractor and its proposed subcontractors who will control or direct the organization's resources in the performance of any contract resulting from this solicitation. Included in this evaluation will be a subjective evaluation of customer satisfaction on the full range of services such as compliance with contract specifications, on- time delivery, customer support and technical assistance, quality and timeliness of warranty repair and overall commitment to customer satisfaction. The Government reserves the right to use other references than those provided by the Offeror in its evaluation of past and present performance and to visit the sites that support contracts of a similar scope and magnitude. Protest File, Exhibit 206 at 98. The RFP provided that price would not be scored but would be evaluated in accordance with Federal Acquisition Regulation (FAR) 15.805-2. Protest File, Exhibit 206 at 100. Questions and Answers and Solicitation Amendments Two solicitation provisions relevant to this protest were changed by Amendment 4 to the RFP. In the original solicitation, Paragraph C.5.2, Coverage Period, read: The warranty period shall begin on the day after initial delivery of an item and extend for a period of 365 calendar days. Protest File, Exhibit 4 at 19. Paragraph I.12, Term of Contract, of the original solicitation read: Although the Government contemplates use of the system(s) (hardware and software) and warranty thereof for the system(s) life of 24 months, the term of this contract is from the date of award through the twelve (12) months after contract award. Id. at 55. Vendor Question 94 sought clarification of the interrelation of Paragraphs I.12 and C.5.2: Question #94: Reference: RFP Section I.12 QUESTION: A. Please clarify what the Government means when it says, "contemplates use of the system(s) (hardware and software) and warranty thereof for the system(s) life of 24 months," and then continues to say "the term of this contract is from the date of award through the twelve (12) months after contract award." B. Section C, paragraph C.5.2, page 19 of 113 says the warranty period is 365 calendar days after initial delivery. Please clarify [if] the Government [is] asking for an extended 24 month warranty or [if it is] asking the contractor to price a 365 calendar day and separately propose an extended warranty? ANSWER: (A.) Please see answer to Question # 30 regarding the contract term. Also, please see revised I.12 in Amendment No. 4. (B.) The minimum requirement for the warranty period is now 365 calendar days beginning the day after acceptance by the Government. Please see revised C.5.2 in Amendment No. 4. Protest File, Exhibit 17 at 812. As a result of Amendment 4, Paragraph I.12 was revised to read: I.12 TERM OF CONTRACT The term of this contract is from the date of award through the end of month twelve with an option to extend for an additional twelve month period. Protest File, Exhibit 17 at 623. Paragraph C.5.2 was amended as follows: C.5.2 Coverage Period The overall period of contract performance of warranty services shall begin on the first day after the Government's acceptance of a CLIN product, and extend for a period of 365 calendar days. This means that if a CLIN product is accepted in month 25 after contract award, warranty service shall be provided on the day after this acceptance, and shall extend for a period of 365 calendar days into month 37. Protest File, Exhibit 206 at 17. Q&A No. 30 read: QUESTION: This indicates the term of [the] contract is 12 months after award. The RFP references one full year with an optional one-year renewal period. Please clarify. ANSWER: The Government will award this contract for an initial 12 month period as stated in I.12[.] The Government may extend the term as stated in I.8 for an additional 1-year period. Id. at 793. In additional Q&As, Treasury reiterated that it sought a 365-day warranty: [Q. 88] - Please define "life of contract." [A. -] Sections C.5 and C.6 have been revised in Amendment No. 4. Technical assistance and warranty support shall be provided for 365 days beginning the day after acceptance of the hardware and software by the Government. . . . . [Q. 174 -] Paragraph I.12 can be construed to require a 24 month warranty period, and therefore appears to conflict with paragraph C.5.2 which specifies a one- year warranty. . . . [A. -] The warranty period is for 365 days as specified in C.5.2. . . . Protest File, Exhibit 16 at 520, Exhibit 18 at 999. In the Q&As Treasury also informed offerors that Section M contained all factors which would be used in the evaluation. Q&A 161 provided: Reference: Question #34, Amendment 1 QUESTION: [First two paragraphs deleted] Please confirm that "all" factors which will be used in the evaluation process for this procurement are provided in the Solicitation, specifically in Section M - Evaluation Factors for Award. ANSWER: All factors which will be used in the evaluation and source selection of this procurement are provided in Section M as amended . . . We wish to assure all potential offerors that we have no "hidden agendas." Protest File, Exhibit 16 at 554 (emphasis added). Q&A 208 further confirmed that all evaluation factors were stated in Section M and stated, in pertinent part: Reference: Section M QUESTION: A. The FAR in Part 15, clearly states that all evaluation factors to be used in judging a vendor's proposal must be contained in the solicitation. Please confirm that all factors to be used in evaluation are in fact contained in the solicitation under the Section entitled Evaluation Factors. Please confirm that non- priced-related features include and are limited to the list currently contained in Section M. . . . . D. Please provide, as required under FAR Part 15, the relative importance of these factors in Section M.4.2 and subfactors as they relate to other evaluation factors. ANSWER: A. All proposal evaluation factors are stated in Section M of this solicitation. Section M.4.2, as amended, explains 'the integrated comparison of each proposal's features' which will be undertaken before a Contractor selection is decided. The purpose of this comparison is to determine the differences among the proposals in the final competitive range. . . . Section M.4.2 identifies 'non-price-related features' which will possibly be comparative differences among the proposals. These features are not limited to those stated in M.4.2 because all areas of difference cannot be conceived in advance of examining the actual contents of the proposal. . . . . D. There are no new factors and subfactors stated in Section M.4.2, only possible differences among competing proposals which will be compared. Protest File, Exhibit 19 at 1219-20. The Source Selection Guide and Source Selection Plan Treasury issued a best and final offer (BAFO) Source Selection Evaluation Guide for this procurement. This BAFO Source Selection Evaluation Guide contains Attachment 5, Evaluation Standards. These Evaluation Standards under subcriterion M.6.1.4, CTA, and Warranty Support Plan, make no mention of the length of warranty as an evaluation item. GTSI's Motion for Summary Relief, Exhibit 1 (BAFO Source Selection Evaluation Guide, Attachment 5 at 5-4). Attachment 6(a) to the BAFO Source Selection Evaluation Guide is a template for the Subjective Evaluation Report for criterion M.6.1.4. GTSI's Motion for Summary Relief, Exhibit 2 (BAFO Source Selection Evaluation Guide, BAFO Attachment 6(a) at 1). This template makes no mention of the length of warranty as an item to be evaluated under the warranty support plan. Id. Treasury issued a source selection plan for TDA-1 dated July 30, 1993. Section 5 of the source selection plan is entitled "Evaluation Criteria." Under these criteria, criterion M.6.1.4, CTA, and Warranty Support Plan, were listed but made no mention of length of warranty as an evaluation criterion. GTSI's Motion for Summary Relief, Exhibit 3 (Source Selection Plan for TDA-1 at 12-13). Proposals Initial proposals were due on November 15, 1993, and fifteen proposals were received. Protest File, Exhibit 199. On March 22, 1994, the contracting officer established a competitive range consisting of seven offerors. Id. at 4. Discussions were held and BAFOs were received on September 15, 1994. On November 7, 1994, discussions were reopened because all of the BAFOs contained deficiencies. Id. Second BAFOs were received on November 17, 1994, from Concepts Automation, Inc. (CAI), EDS, GTSI (two proposals), TISOFT, WIN, and ZDS. Id. The Warranties Offered EDS and IDP offered warranties longer than one year, and some other offerors passed on existing manufacturer's warranties longer than one year. Protest File, Exhibits 20-24, 37, 49; Stipulation by TISOFT dated July 6, 1995; Respondent's Statement of Uncontested Facts 21-24 and Attachment 2. However, according to respondent, IDP did not intend to offer an extended warranty, and the agency misconstrued IDP's offered warranty due to a typographical error. Supplement to Respondent's Motion for Summary Relief on Count I of ZDS' Protest (Respondent's Supplement), Attachment A at 19, 55. GTSI offered a one-year warranty in its technical proposal. Protest File, Exhibit 23 at 1292. Also, in its pricing notes, GTSI offered a one-year warranty. Id., Exhibit 24 at 1311. In its initial proposal's pricing notes, **** ******* *** **** ******* ** *** ******* ******* ********** ** ****** ** *** **** *** ****** **** **** ***** **** ***** ***** ** *** *********** Id., Exhibit 23 at 1293, Exhibit 24 at 1313. Subsequently, GTSI withdrew those pricing notes, id., Exhibit 92 at 2585-86, and continued to rely on a one-year warranty, id. ZDS offered a one-year warranty in response to Paragraph C.5.1, and CTA *** *** **** ** *** ******** *** *** *** ******** *** ******** ******** ***** *** ********* Respondent's Statement of Uncontested Facts, Attachment 4 at III-50. **** **** ********** ******* ************ ********* ** ** ********* **** *** ************* ******** ********* ******** ********* ********** *** *** **** ** *** ******* ** *** ********** ** *** ********* ZDS' Opposition, Attachment B at 1 (Affidavit of Joel A. Lipkin (Lipkin Affidavit) (July 10, 1995) 5).[foot #] 3 He further testified that ZDS' offer of warranty was driven exclusively by the solicitation language whereas its offer of CTA ** ***** *********** ** *** ******** ** *** ***** ************ *** ** ************* ********* Id., 6, 9. The Report to the SSAC On March 15, 1995, the final report to the source selection advisory council (SSAC) of the technical evaluation panel (TEP) was issued. Protest File, Exhibit 189. This report contained a number of attachments, including the scoring template for Sections M.6.1 and M.6.3. The scoring template for M.6.1.4 ----------- FOOTNOTE BEGINS --------- [foot #] 3 ZDS' vice president further testified that in its initial response ZDS mistakenly ******** *** ************** ********* *********** *** ****** **** ** **** ******** **** *** ********** **** *** ******* ******** ******* **** **** *** ******** *** **** *** ******** ** *** *********** *** ******* *** ******** ** ******* *** ******** ********* ZDS' Opposition, Attachment B at 2 (Lipkin Affidavit 7). ----------- FOOTNOTE ENDS ----------- described evaluation criteria and contained a template for the type of review needed. This template made no mention of the length of warranty as an item to be considered under M.6.1.4. Id. at 0005186-87. In its final report to the SSAC, the TEP included a proposal feature analysis at Attachment 5. Protest File, Exhibit 189. In its evaluation of EDS' BAFO, in particular in the proposal feature analysis, the TEP noted: EDS has proposed an additional year of warranty support for all products. This would provide the Government with a two-year warranty period for all products. The RFP required a one-year warranty (365 days). All other offerors proposed the required one year of warranty support. The proposed additional warranty support will have a tangible economic benefit for the Government. Id., Attachment 5 at 0005200. On April 24, 1995, the SSAC issued its award recommendation that the contract be given to EDS. Protest File, Exhibit 199. The SSAC's award recommendation included the following ranking of technical and price proposals for the top grouping of offerors: TECHNICAL *** ***** *** ***** *** ***** **** ** ***** **** ** ***** PRICE **** ** *********** *********** **** ** *********** *********** *** *********** *** *********** *** *********** Protest File, Exhibit 199 at 12-13. The recommendation further stated: ***** ** * ***** ***** ***** ** **** ******* ******* ***** ******** ***** *** **** **** ******** ****** ** ** ******* ******* ***** ******** ***** *** ***** ******** ****** *** ***** ***** ****** ******* *** **** *********** ********* *** ***** ******** ***** **** * *** ** **** ******* ***** ** * **** ** **** ******* ***** *** *** *** ******** ********** ******** *** ************ ** **********-********* ********** ******** ** ********** ** ******* *-** *** ***** ********* ********** **** ******** *** *** **** ** ****** **** ******** ************** ***** ******** ****** *** ****** ******* **** ** *** *********** Id. at 13. In Exhibit D-1 of its award recommendation, the SSAC detailed its determination on the value of EDS' second year of warranty. In the course of this seven-page exhibit, with charts, the SSAC explained that in quantifying EDS' second year of warranty, it "examine[d] available records of failure rates for similar equipment, and . . . compared the estimated cost to repair that equipment to . . . a second year of warranty." Protest File, Exhibit 199, Exhibit D-1 at 1. The SSAC examined historical experience with failure rates and warranty costs from industry publications and information on maintenance contracts currently in use in IRS and the United States Customs Service and under other government contracts. Id. The SSAC also reviewed the Gartner Group Conference presentation "How Can Users Ensure the Lowest Cost for PC Maintenance?" Protest File, Exhibit D-1 at 2. The Gartner presentation recommended the use of a 50% failure rate in all systems in a given year as a working average. Id. The SSAC further determined that the equipment being acquired under TDA-1 would most likely be maintained under a time and materials (T&M) contract when the warranty expired. Id. at 3. The SSAC looked at two T&M contracts. Referring to the Martinsburg Computing Contract to maintain 350 bundled systems, the SSAC calculated a cost of approximately $4.8 million per year to provide maintenance service for the TDA-1 equipment. The SSAC also looked at the United States Customs Service data contract and calculated a putative cost of approximately $3.5 million per year to maintain the equipment acquired under TDA-1. Id. The SSAC noted that both the prices of $4.8 million and $3.5 million were dramatically higher than the **** ******* ***** ******* **** *** ****** ****** ** *** ** ******* ***** ******* **** *** **** ******** ****** Id. The SSAC award recommendation contained the following discussion of the CTA/warranty subcriterion: M.6.1.4 Customer Technical Assistance and Warranty Four of the six vendors (EDS, TISOFT, WIN, and ZDS) provided strong proposals in the sub-criterion. Meaningful differences were discerned for vendors in this sub-criterion with regard to warranty period, the period during which customer technical assistance is available, and the warranty time to repair. Warranty Period EDS, alone of the six vendors, offered a two-year warranty period. This represents an added value to the Government, arising from the avoidance of acquisition costs of replacement parts, components, and labor; and the avoidance of administrative costs associated with obtaining repairs on the equipment that would otherwise be covered by the additional year of the two-year warranty. This is mitigated slightly by the administrative costs that would result from continuing to administer the contract for the additional warranty period. The extra year of warranty was considered a significant additional value to the Government based on the analysis at Exhibit D-1. Protest File, Exhibit 199, Exhibit D at 8 (emphasis added). The SSAC's award recommendation identified EDS' second-year warranty as the only quantified discriminator, stating: QUANTIFIABLE EDS's Second Year of Warranty (M.6.1.4). ***** *** ********** **** *** ******** **** *********** ******* ***** ******** *** ***** ** *** ***** ******** *** ****** ************ ** *** ****** **** ** ******** ******** ** **** *** **** ********** **** *** **** ** *** ****** **** ** ******** ** ***** **** *** *********** **** ** ********* * ****** **** *********** *** *** ***** ******** ** *** ***** ********* *** ******** ********** **** ************* ** ********* ** ******* **** *** ***** ** ******* ******** **** ** ** ********** **** *** ********** **** ******* *** ********** *****-***** ******** ** *** ******** ************* ******** ********* ************ The SSAC determined the second year of warranty on all hardware items (CONUS and OCONUS,[[foot #] 4] including travel, parts, and labor guaranteed on next business day) to be a significant additional value, but sought corroboration by examining several sets of data: time and materials contract maintenance, annual maintenance contracts, and an industry annual warranty study. The SSAC compared the approximate cost of the second year of warranty, ***** *** ******** ***** *********** ******* *** *** **** ***** *** **** to several existing Government maintenance contracts. The results of that comparison are captured at Exhibit D-1. The comparison demonstrates that the price for the second year of warranty is both reasonable and ----------- FOOTNOTE BEGINS --------- [foot #] 4 "CONUS" means the continental United States; "OCONUS" means outside that area. ----------- FOOTNOTE ENDS ----------- represents a good value to the Treasury Department. See Table D-1, "COST ADJUSTMENT (PV) FOR 2ND YEAR MAINTENANCE" for additional information. Protest File, Exhibit 199 at 15-16 (emphasis added). On April 24, 1995, the source selection authority issued her source selection decision stating that she had reviewed the RFP, "received a presentation of the Source Selection Evaluation Board's summary findings and analyses," read the SSAC's award recommendation, and "assessed the differences among the competing proposals, and, in [her] opinion, the proposal submitted by [EDS] provides the best overall value to the Government for the [TDA-1] requirements." Protest File, Exhibit 200. This decisional document contained no additional rationale or explanation for her selection decision. Id. Discussion Is Count I of the ZDS Protest Untimely? By motion filed on July 11, 1995, respondent contends that Count I of the ZDS protest is untimely because counsel for ZDS and GTSI learned during an earlier protest that the agency had considered the duration of warranties as part of its evaluation. International Data Products, Corp. v. Department of the Treasury, GSBCA 12804-P, 94-3 BCA 26,971, 1994 BPD 108. In that case, IDP had protested its exclusion from the competitive range, and both ZDS and GTSI had intervened on the side of the Government. In the course of arguing that the exclusion of IDP from the competitive range should be upheld, the Government pointed out in its posthearing brief that (1) because IDP had a typographical error in its proposal, Treasury erroneously assumed that IDP was offering a two-year warranty instead of a one-year warranty; (2) Treasury characterized the IDP extended warranty as a "strength"; and (3) Treasury overstated IDP's "strengths for this subcriterion -- further widening the gap between the relative standing of IDP's proposal and those proposals included in the competitive range." Respondent's Supplement, Attachment A at 55. Nothing about IDP's warranty was mentioned in the Board's decision denying IDP's protest. Because of this argument in IDP's protest, respondent would now have this Board hold that ZDS and GTSI knew that offerors' extended warranties were being evaluated as strengths and should have protested that at the time. We disagree. There is a major difference between a challenge to a competitive range determination and a challenge to an award decision. The instant protest does not challenge the preaward agency decisionmaking revealed under protective order in the earlier protest. No counsel or vendor could have then been aware that the agency was going to afford a preference to an extended warranty in its evaluations of BAFOs or in its best value analysis. As the Board recognized in Federal Computer Corp. v. Department of the Treasury, GSBCA 12754-P, 94-2 BCA 26,844, 1994 BPD 77, "We view the determination to award a contract as separate and distinct from any earlier determination(s) which may partially support it. While such preliminary determinations may well be [a] legitimate subject for a preaward protest, a vendor's decision not to protest them will generally not be viewed as later barring the vendor from protesting the ultimate decision to award." at 133,570, 1994 BPD 77, at 5. Further, counsel for GTSI and ZDS learned of the evaluation of IDP's warranty under a protective order. They were prohibited from disclosing it to their clients. Counsel would have violated the protective order in that case had they disclosed either the fact of what IDP had offered or the Government's evaluation of it to their clients. Moreover, the focus of the IDP protest was not on warranties, but on the issue of whether IDP's proposal was so technically deficient that it was properly eliminated from the competitive range. To require counsel to file a protest based on a peripheral statement disclosed under protective order would force intervenors on the side of the Government to have their counsel exceed the scope of their representation and file a case against respondent, when the potential prejudices would be speculative. We hold that Count I of ZDS' protest is timely. We further note that in any event WIN, which was not a party to the IDP protest, first learned of the agency's consideration of the two- year warranty during its debriefing and filed its intervention within ten days thereof. Therefore, even if the Board were to dismiss Count I of ZDS' protest and GTSI's intervention in this count, WIN's intervention in those protests would survive. See Atlis Federal Services, Inc. v. Department of Health and Human Services, GSBCA 12959-P, et al., 95-1 BCA 27,351, 1994 BPD 235. The Merits: Did the Solicitation Permit Respondent to Consider the Second-Year Warranty as a Strength and Afford it Significant Value in the Source Selection? The sole issue before the Board on these cross motions for summary relief is a question of law -- the interpretation of the solicitation, and in particular, whether respondent was permitted to evaluate EDS' second-year warranty and credit that warranty as a "significant value." There are no genuine issues of material fact.[foot #] 5 As such, the resolution of this count on summary relief is appropriate. ZDS posited three material errors in the agency's evaluation: (1) Treasury acknowledged a preference for a second- year warranty but failed to amend the solicitation to provide notice of its preference; (2) Treasury scored the second-year warranty as a strength in evaluating EDS' proposal despite the fact that Treasury had never amended the solicitation to reflect a preference for this feature; and (3) in its best value analysis Treasury identified EDS' second-year warranty as the only quantified discriminator and considered it to be "of significant value" to the Government in the source selection. ZDS' Motion for Summary Relief at 2. It is well established that offerors must be given reasonable notice of the evaluation factors and subfactors an agency will consider in evaluating proposals. E.g., Systems Resources, Inc. v. Department of the Navy, GSBCA 12536-P, 94-1 BCA 26,388, 1993 BPD 253; Amerinex Services. Corp., GSBCA 10671-P, 90-3 BCA 23,102, 1990 BPD 173; Chesapeake and Potomac Telephone Co., GSBCA 9297-P, 90-1 BCA 22,335, 1989 BPD 299; Genasys Corp., GSBCA 8734-P, 87-1 BCA 19,556, 1986 BPD 224. Any factor which significantly contributes to how an offeror structures its proposal or which affects the selection of the awardee must be disclosed in the solicitation. Systems Resources, 94-1 BCA at 131,282, 1993 BPD 253, at 5. Here, the duration of warranty surely would have affected an offeror's pricing and could well have contributed to what products an offeror proposed. Further, Treasury's award recommendation determined EDS' second-year warranty on all hardware items to be "a significant additional value." ----------- FOOTNOTE BEGINS --------- [foot #] 5 Respondent argues that there are material facts at issue which require denial of ZDS' motion. Respondent cites its contention that other offerors besides EDS offered extended warranties. This is a red herring. The issue underlying the motion is not whether the RFP precluded offerors from offering extended warranties, but whether the RFP apprised offerors that the agency preferred extended warranties and would attach value to them. Other offers do not demonstrate that offerors expected extended warranties to be afforded a preference. Respondent also takes issue with ZDS' facts 5, 13, and 14. Respondent's Opposition at 17. Fact 5 is ZDS' construction of the solicitation and is not truly a "fact"; fact 13, ZDS' claim that warranty was worth 2.5 points, is not material to the resolution of this motion -- the Board agrees with respondent's position that warranty and CTA were to be viewed as one subcriterion worth 5 points and not segregated. Finally, the Board deems the subject of fact 14 -- statements made at the debriefing, to be superfluous to the instant motion. ----------- FOOTNOTE ENDS ----------- The solicitation in this procurement nowhere advised offerors either that the Government preferred a two-year warranty or that the Government would give extra credit to a two-year warranty. Rather, Paragraph C.2, the general description of the agency's requirements, listed a one-year warranty on all hardware products. The solicitation reiterated in Paragraphs C.5 and C.5.2 that the period of the warranty shall extend for 365 days. We recognize that these paragraphs state the minimum requirements of the Government. However, nowhere in the RFP was there a specific indication that exceeding these minimum requirements with respect to warranty duration, a specific, easily identifiable feature, would result in extra credit in the evaluation or in the best value assessment. Indeed, the solicitation read as a whole does not inform offerors of the importance ultimately ascribed to the duration of warranty in the SSAC's award recommendation. Section L set forth detailed requirements of how offerors should describe their warranty plans and service but nowhere mentioned length of warranty. Similarly, Section M.6.1.4, the sole evaluation criterion for warranty, nowhere mentioned duration of warranty. Rather, that paragraph expressly mentioned only that the warranty plan would be evaluated in relation to specifically enumerated items which affect the quality of the warranty -- "specific offered time to restore and return item(s) to the customer and how the offeror will manage and coordinate nationwide warranty support for the sites listed in Attachment 7." Nor does the Government's Source Selection Evaluation Guide or Source Selection Plan mention that duration of warranty would be evaluated. Further, warranty coupled with customer technical assistance was the fourth subcriterion under contract management listed in descending order of importance and was worth only five points in the overall technical evaluation. This subcriterion does not mention duration of warranty or advise offerors that an extended warranty would be evaluated or credited. Respondent contends that the solicitation "properly construed" permitted it to consider the duration of warranties in its technical evaluation. Respondent's Motion for Summary Relief on Count I of the ZDS Protest and Motion for Enlargement of Time (Respondent's Motion for Summary Relief) at 2. Alternatively, respondent contends that Section M.4.2 of the solicitation permitted it to attach value to EDS' extended warranty in the best value analysis, even if consideration of that warranty was not permitted in the technical evaluation. Id. Respondent points out that because Paragraphs C.3 through C.14 were characterized as minimum mandatory requirements, offerors "were at liberty to exceed those requirements. . . ." Respondent's Motion for Summary Relief at 3. We do not disagree. We part ways with respondent's assertion that it was permitted to evaluate, credit, and attach significant value to features which exceeded the stated minimums without ever disclosing that it preferred such features. Respondent strains to suggest that Paragraph L.14.7.4, the detailed instructions regarding offerors' warranty plans, forecast at least some consideration of warranty duration in the subjective evaluation. Respondent's Motion for Summary Relief at 3. In support of this, respondent cites language to the effect that offerors were required to describe "procedures that will be in place to provide quality service after systems are accepted (during the warranty period)." Id. at 4. We do not view this language as notifying offerors that a warranty period beyond the minimum stated would be evaluated. Rather, we view the absence of any suggestion of warranty duration beyond the minimum spelled out in Section C, in either Section L or Section M, to be indicative that vendors were not notified that an extended warranty was a desired feature which would receive enhanced credit. Nor do we deem it relevant that the agency also credited ZDS' offer of ******** customer technical assistance. Two wrongs do not make a right. We would agree that the agency similarly did not notify offerors it had any preference for CTA which exceeded the solicitation's minimum. ** **** **** ********* ********* ** *** ************ **** ******* ******** ** ** ***** ****-**** *** ** *** ** *** ********* *** **** **** *** ******* *** *** *** **** ** *** ******** ** *** ************ **** *** ******** **** *** ******** ********** *** ** ******** ******** *** *** ********** Respondent suggests that the language in Paragraph M.4.1 which permitted it to consider other non-price-related factors permitted it to evaluate and value the extended warranty. That paragraph, however, is generalized and does not mention anything which would have put offerors on notice that an extended warranty was preferred. The Government also points to Paragraph M.4.2 which permits an integrated comparison of proposal features. The Government points out that that paragraph empowers the Government to consider enumerated non-price-related features that might not have been numerically scored as a result of the technical evaluation and that those features are stated to "include but not be limited to" those enumerated features listed in the paragraph. The Government's reading of these solicitation provisions would have required offerors to have been clairvoyant regarding the agency's preference for a second-year warranty, and would permit the agency to evaluate any features it chose -- whether disclosed in the RFP or not. Respondent places great emphasis on Q&A 208 -- in particular, on the portion of Answer 208 which states: "Section M.4.2 identifies non-price-related features which will possibly be comparative differences among the proposals. These features are not limited to those stated in M.4.2 because all areas of difference cannot be conceived in advance of examining the actual content of proposals." Protest File, Exhibit 19 at 1220. Respondent contends that this language permitted it to take into consideration for comparative analysis non-price-related proposal attributes that could not be predicted in advance or captured explicitly in the proposal evaluation scheme. Respondent's Motion for Summary Relief at 11. While that might be true of certain qualitative attributes which relate to identified evaluation criteria, it is not true of EDS' extended warranty here. First, extended warranty is a price-related proposal attribute. Respondent's analysis of the quantified discriminator belies its assertion that the second- year warranty was unrelated to price. The Government went to great lengths to raise bottom line prices of every other offeror in the competitive range to account for maintenance costs which would be incurred were it not for EDS' two-year warranty. Secondly, extended warranty is a feature which could well have been predicted in advance. It was, in fact, predicted in advance by this agency, expressly in the request for comments and the draft solicitation -- and then deleted. The questions and answers and solicitation amendments further affirm that the solicitation should be read as not disclosing that an extended warranty was preferred. While the answer to Question 94 stated that the "minimum" requirement for the warranty period is now 365 calendar days, it did not advise vendors that Treasury preferred a longer warranty. Further, the contract was for an initial twelve-month period which may or may not have been extended. Moreover, the Government expressly advised offerors in answer to Question 34 that all factors used in the evaluation and source selection were included in Section M, and Section M nowhere mentioned duration of warranty. Finally, the history of this procurement, beginning with the request for comments and continuing with the agency's answers in response to vendor questions on the RFC, indicates that Treasury initially did contemplate evaluating length of warranty and that there would be an optional second-year warranty. Section M.10.1.3 of the draft solicitation which accompanied the RFC stated: "Special emphasis will be given to the length, scope, mean time to restore and return to the customer and location of the offered warranty service centers." (Emphasis added.) This paragraph was removed in the final solicitation. Moreover, in the Q&As on the RFC, Treasury expressly advised offerors that "no subjective evaluation points will be given for providing warranty support for longer than one year." And in response to Question 31 Treasury stated: "There is no longer a requirement for a two-year warranty." While these revisions preceded the solicitation, diligent offerors who followed this procurement from the outset could well have been misled by the definitive removal by the Q&As of the initial requirement for a two-year warranty. The requirement did not appear in the final solicitation. Relief The Board grants ZDS' and GTSI's motions for summary relief on Count I of ZDS' protest finding that offerors were not advised in the solicitation that a second-year warranty was preferred by the Government or would be considered to be of worth in the best value analysis. Respondent's consideration of length of warranty in the evaluation and the best value analysis contravened the solicitation. Treasury violated the statutory requirement that agencies shall evaluate proposals based solely on the factors specified in the solicitation. 41 U.S.C. 253b(a) (1988). Given the pendency of other counts, the Board does not fashion any relief at this juncture. Decision Protester ZDS' and intervenor GTSI's motions for summary relief on Count I of ZDS' protest are GRANTED. Respondent's motion to dismiss Count I as untimely is DENIED. Respondent's motion for summary relief on Count I of ZDS' protest is DENIED. ____________________________ MARY ELLEN COSTER WILLIAMS Board Judge We concur: ____________________________ ____________________________ STEPHEN M. DANIELS ANTHONY S. BORWICK Board Judge Board Judge