Rel-Tek Systems & Design, Inc., B-280463.3, November 25, 1998

B-280463.3 Nov 25, 1998 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST Award is improper where awardee's proposal failed to conform to material solicitation requirements regarding acceptance. That the award was improper because Oracle's proposal was ambiguous and failed to comply with material LOI requirements. The LOI was issued on March 25. Award of a fixed-price requirements contract for a base year and four 1-year option periods was to be made to the offeror submitting the proposal determined to offer the "greatest value". Where technical merit was moderately more important than price. Technical proposals were to be evaluated under two primary criteria: technical and functional operational capabilities. Cost proposals were to be evaluated for realism. View Decision Matter of: Rel-Tek Systems & Design, Inc. File: B-280463.3 Date: November 25, 1998 * Redacted Decision DIGEST Attorneys DECISION Rel-Tek Systems & Design, Inc. protests the award of a contract to Oracle Corporation under letter of interest (LOI) No. MDA-L-97-0005, issued by the Defense Finance and Accounting Service (DFAS) for accounting software and related services. Rel-Tek protests, among other things, that the award was improper because Oracle's proposal was ambiguous and failed to comply with material LOI requirements. We sustain the protest. The LOI was issued on March 25, 1997, under the General Services Administration (GSA) Multiple Award Schedule (MAS) for Financial Management Systems Software (FMSS) for the procurement of commercial off-the-shelf (COTS) software and services. The LOI required COTS software, software enhancements and modifications, system installation, training, technical support services, documentation, and maintenance. /1/ The LOI, as amended, included a detailed statement of work (SOW) which identified specifications to be met by each offeror's proposed software, as well as required contract terms, services, and deliverables. Award of a fixed-price requirements contract for a base year and four 1-year option periods was to be made to the offeror submitting the proposal determined to offer the "greatest value"--where technical merit was moderately more important than price. LOI Amendment No. 4, Sec. L-1, Sec. M-2. Technical proposals were to be evaluated under two primary criteria: technical and functional operational capabilities; and ability to provide enhancements and to fully integrate the COTS system. Id. at Sec. M-3. Cost proposals were to be evaluated for realism. Id. at Sec. M-6.1. Four proposals were submitted by the closing date for receipt of proposals. All four were included in the competitive range for written discussions; demonstration tests were conducted to validate each offeror's COTS software's level of performance and the need for enhancements to meet the SOW specifications. (One offeror withdrew from the competition prior to the second round of demonstration tests.) Final proposal revisions were submitted by the remaining three offerors, including Rel-Tek and Oracle, by March 13, 1998. Clarification request letters were sent to all offerors on April 1. Among the many questions asked of Oracle were requests to clarify certain terms and assumptions in its March 13 final proposal revision submission, including perceived uncertainties in the Oracle proposal's license terms. Oracle's April 3 response to the agency's April 1 clarification request letter affirmed portions of its proposal, rephrased others, and noted, at 5, that Oracle believed that several categories of LOI requirements "would still need to be negotiated by the parties before executing a final contract," [deleted]. Although the other two offerors were found to have adequately responded to the agency's earlier request, the agency determined that additional "clarifications" were needed from Oracle to confirm the firm's compliance with the LOI requirements in the areas Oracle felt still needed to be negotiated, as well as other areas of its proposal. Accordingly, on May 1, DFAS issued, only to Oracle, another request for information; in this request, the agency informed Oracle that, although the firm identified LOI requirements it believed would need to be negotiated before award, the LOI terms were to remain unchanged. The agency also specifically asked Oracle to confirm if its software license and services agreement (SLSA), which was submitted as part of the firm's proposal, complied with the requirements of the LOI. In its May 7 response to the agency request, Oracle stated as follows: [deleted] It has been Oracle's intent from the onset to negotiate mutually favorable acceptance and performance terms for the Government for the modification/customization required under the LOI.