Active Headsets, Inc.

B-410764 Feb 02, 2015 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights Active Headsets, Inc., of Amarillo, Texas, protests the award of a contract to Acousticom Corporation, of Elkhart, Indiana, by the Defense Logistics Agency (DLA) under request for proposals (RFP) No. SPE7MX-14-R-0098 for microphone headsets. The protester alleges that the agency conducted the reverse auction in a manner inconsistent with the terms of the solicitation. We deny the protest. We deny the protest. View Decision Decision Matter of: Active Headsets, Inc. File: B-410764 Date: February 2, 2015 Thomas P. Brittain, for the protester. Terry Fisher, for Acousticom Corporation, an intervenor. Richard Ferguson, Esq., and Gail Booth, Esq., Defense Logistics Agency, for the agency. Evan D. Wesser, Esq., and Jonathan L. Kang, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest challenging an agency’s conduct of a reverse auction is denied where the record shows that the reverse auction was conducted in accordance with the terms of the solicitation. DECISION Active Headsets, Inc., of Amarillo, Texas, protests the award of a contract to Acousticom Corporation, of Elkhart, Indiana, by the Defense Logistics Agency (DLA) under request for proposals (RFP) No. SPE7MX-14-R-0098 for microphone headsets. The protester alleges that the agency conducted the reverse auction in a manner inconsistent with the terms of the solicitation. We deny the protest. BACKGROUND On April 2, 2014, DLA issued the RFP seeking to establish an indefinite-quantity contract to provide stock replenishment coverage for microphone headsets designated by National Stock Number 5965-01-527-5012. See RFP at 3. The RFP contemplated that the contract would be for a 3-year term, with an additional 1-year option. Id. The agency was to evaluate proposals based on three factors: price, past performance, and proposed delivery. Id. § M, at 4. For purposes of award, the non-price factors were “significantly less important” than price. Id. The RFP also incorporated Defense Logistics Agency Directive (DLAD) clause 52.215-9023, Reverse Auctions (NOV 2012), which defines the agency’s and offerors’ respective obligations when the agency conducts a reverse auction. Id. at 28. Active Headsets initially was the only approved source listed in the RFP for the designated headsets. See Agency Report (AR) at 2[1]; RFP at 5. The protester submitted a proposal prior to the RFP’s initial May 5 closing date, and subsequently extended the validity of its proposal at DLA’s requests. See, e.g., Protest, exh. 5, Email from Contracting Officer (CO) (May 28, 2014). In or around August 2014, Acousticom became an approved source for the designated headsets. See AR, Tab 8, CO Memorandum (Aug. 18, 2014). On August 18, the agency amended the solicitation to add the awardee as an approved source and to extend proposal validity. See RFP amend. No. 1 at 2. On September 17, the agency conducted a web-based reverse auction through a commercial, third party reverse auction system provider, Procurex, Inc. AR at 2; Tab 11, Procurex Event Bidding Detail Report, at 2. As discussed below, neither the protester nor the awardee submitted a bid during the reverse auction. AR, Tab 11, Procurex Event Bidding Detail Report, at 2. The agency selected Acousticom’s initially submitted, lower-priced proposal for award. AR, Tab 17, Price Negotiation Memorandum, attach. 4. The awarded contract has a maximum value of $627,246.40. AR, Tab 18, Contract No. SPE7MX-15D-0004. DISCUSSION Active Headsets raises four primary challenges to DLA’s conducting of the reverse auction and resulting award decision. First, the protester alleges that Acousticom failed to participate in the reverse auction, thus rendering the awardee ineligible for award under the terms of the RFP. See Protest at 6-7. Second, the protester alleges that the auction system provided misleading information because it designated the protester as the “lead” bidder with regard to certain aspects of its bid, and, thus effectively induced the protester into not placing additional bids. See id. In a related allegation, Active Headsets argues that the auction website’s use of the undefined data field “start price” was ambiguous and did not advise offerors that the agency would pre-load offerors’ prices from their initial proposals as the starting bids for the reverse auction. See Protester’s Response to Request for Dismissal (Nov. 18, 2014) at 2.