GTSI Corporation, B-286979, March 22, 2001

B-286979 Mar 22, 2001 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights A firm protested the Army's decision to terminate its contract for computer equipment, contending that the Army's response to an agency-level protest was flawed. GAO held that the (1) Army improperly determined that the protester's pricing on certain line items was inconsistent with the solicitation's evaluation criteria and (2) Army's proposed corrective actions would harm the protester. Accordingly, the protest was sustained, and GAO recommended that the Army (1) abandon its intent to take corrective action in accordance with the agency-level protest, (2) leave the contract in place and permit the protester to compete with other bidders for future task order awards under the contract, and (3) reimburse the protester for its protest costs. View Decision Matter of: GTSI Corporation File: B-286979 Date: March 22, 2001 DIGEST Attorneys DECISION GTSI Corporation protests a decision by the Department of the Army that GTSI's indefinite-delivery/indefinite-quantity (ID/IQ) task order contract for servers, workstations, accessories, and support was awarded improperly. Specifically, GTSI challenges the Army's decision, rendered in response to an agency-level protest to the Army Materiel Command (AMC), that GTSI's proposal violated the terms of the solicitation, and that the violation provided GTSI with an impermissible competitive advantage over other offerors. We sustain the protest. BACKGROUND GTSI's contract was awarded pursuant to request for proposals (RFP) No. DAAB07-00-R-H254, issued by the Army's Communications-Electronics Command (CECOM), for commercial-off-the-shelf servers, workstations, operating systems, compilers, software applications, peripherals, local and wide area networking, engineering and support services, managed environment support, maintenance, system upgrades, training, leasing, documentation, and consumables to meet world-wide requirements of the U.S. government. Source Selection Decision at 1. The solicitation anticipated award of a fixed-price ID/IQ task order contract, or contracts, to the offeror, or offerors, whose proposal was determined to be the most beneficial to the government, as assessed under five evaluation factors (which are not relevant to this dispute). RFP Sec. M at 1. Potential offerors were also advised that the resulting contract(s) would be in place for a base period of 24 months, followed by up to three 1-year options. Source Selection Decision, supra. Ordering from the contract(s) was to be permitted by any federal agency, including foreign military sales customers. Id. Four provisions in section L of the RFP provide pricing guidance relevant to this dispute. These provisions state that: (1) Offerors must propose on all required CLIN/SLINs /1/ and satisfy all of the requirements of this solicitation, RFP Sec. L at 2; (2) All CLINs/SLINs shall be priced and shall be separately orderable, Id. at 42; (3) Pricing for any CLIN/SLIN must stand alone, and not be dependent upon the authorization of any other CLIN/SLIN, Id. at 46; and (4) Labor categories shall be priced using fully loaded fixed labor rates for the life of the contract, exclusive of overtime, to be used for the term of the contract under task orders requiring hourly, daily, weekly, monthly and yearly work, as set forth in the Schedule. Id. At the conclusion of the competition, CECOM made awards to GTSI and IBM-Global Services Federal for estimated prices of $857.2 million and $617.6 million, respectively. Agency Report, Memorandum of Law, at 8. During debriefings on the award decisions, the two unsuccessful offerors, Federal Data Corporation (FDC) and PRC, Inc., learned for the first time that GTSI entered "$0.00" for certain CLINs that required hourly, daily, weekly, monthly, and yearly rates for a program manager. After their debriefings, both FDC and PRC filed an agency-level protest to AMC. Among other issues, FDC argued that GTSI's pricing approach for the project manager CLINs violated the solicitation's requirement that all labor rates be fully-burdened. /2/ In sustaining FDC's challenge to GTSI's pricing approach, the AMC decision noted that during discussions, CECOM sent several deficiency letters to FDC to advise it that its entry of "NSP" (an acronym for "not separately priced") for certain hardware CLINs was not permitted. Though not explained in the decision, the record shows that these deficiency letters advised FDC that its approach violated the RFP's requirement that all CLINs be "separately orderable." Agency Report, Tab 9. As a result, FDC provided prices for those CLINs in its revised proposal. AMC Decision at 6. The AMC Decision also noted that no such letter was sent to GTSI with regard to its entry of $0.00 for the 15 CLINs for program manager services.