Integrated Systems Group

Integrated Systems Group BNUMBER: B-272336; B-272336.2 DATE: September 27, 1996 TITLE: Integrated Systems Group ********************************************************************** DOCUMENT FOR PUBLIC RELEASE A protected decision was issued on the date below and was subject to a GAO Protective Order. This version has been redacted or approved by the parties involved for public release. Matter of:Integrated Systems Group File: B-272336; B-272336.2 Date:September 27, 1996 Shelton H. Skolnick, Esq., Skolnick & Leishman, for the protester. Melissa K. Erny, Esq., Department of the Navy, for the agency. John Van Schaik, Esq., and Michael R. Golden, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Where agency permitted offeror to submit information to clarify an ambiguity in the price of its alternate offer and to make that alternate offer acceptable, the agency conducted discussions. Since discussions were conducted with one offeror, the agency should have conducted discussions with all offerors whose proposals were in the competitive range and permitted those offerors to submit best and final offers. DECISION Integrated Systems Group, Inc. (ISG) protests the award of a contract to Force Computers, Inc. under request for proposals (RFP) No. N00163-95-R-0003, issued by the Department of the Navy for central processor units and right to use licenses. ISG argues that the Navy improperly opened discussions with Force Computers after initially awarding the contract to ISG. We sustain the protest. The solicitation sought proposals for a base quantity of 30 processors and licenses; offerors could propose specified units manufactured by Force Computers or Themis Computer, Inc. by inserting prices in the appropriate spaces in section B of the RFP. Offerors also were to submit prices for processors, licenses, and technical data for three option periods. Under the RFP, the first option could be exercised up to 365 days after award, the second option could be exercised up to 730 days after award, and the third option could be exercised up to 1,095 days after award. Although the RFP called for prices on 300 processors in each of the option periods, the solicitation limited the number of processors that could be ordered under the options to 300. The solicitation included no specific warranty terms; offerors could offer their standard commercial warranties. Under the solicitation, award was to be made to the offeror whose proposal represented the best overall value to the government, including consideration of price and "quality performance history." Each proposal was to be assigned a rating of low, moderate, or high risk based on an assessment of performance data. The solicitation explained that prices would be evaluated by adding each offeror's total price for the base period, the average of the offeror's unit prices for the option quantities multiplied by the maximum option quantity of 300 units, and a price for data. Three proposals were submitted. Force Computers offered its own products, and ISG offered both Force Computers and Themis products. All of the proposals were given low risk ratings. Based on an evaluation of prices, ISG's Themis proposal was determined to offer the lowest overall price of $2,267,105. Although Force Computers' proposal included four additional pricing pages attached to its section B, the agency initially ignored those additional pages in the calculation of Force Computers' price. Based solely on the prices in section B of its proposal, the agency calculated Force Computers' price as $2,313,295. The contract initially was awarded to ISG and unsuccessful offeror letters were sent to Force Computers and the third offeror. Those letters included ISG's price. After the award, the contracting officer received a phone call from Force Computers questioning whether alternate proposals in its additional price pages had been evaluated and arguing that Force Computers should have been found to have submitted the lowest price. That phone call was followed by a letter dated April 24, 1996, from Force Computers requesting a review of the award decision. In that letter, Force Computers stated that its proposal offered three "options . . . in accordance with Section M (M2 Alternate Specifications)"[1] and that the second and third options offered significantly lower prices than the award price. The letter further stated: "After further reviewing our submittal, it has become apparent that possibly the presentation although we admit may have been somewhat confusing, would still have provided a lower total price to the Government in the M2 options. The total savings to the government were either $427,740.00 or $692,340.00 (19% or 31%) in [Force Computers'] M2 options II and II, and each provided a three (3) year warranty.