/i .til / i/t S. be of

THE COMPTROLLER NENEHALflwnueunmu OP THE UNITED BTATEU

oh's A B t I N G TN. D . C. t 0 5 4 6

FIL-m: 190632 DATE: AusvLt 4h. 1978

MpArTER OF:- Computer Sciences Corporation

DIGESTT:

1. Disappoirited offeror in negotiated procure-ment is intetested party to file protestwithin meapilig of section 20.1, GAO BidProtest Procedures, even though proposalhad allegedly expired, since active pursuitof protest can revive rroposal.

oil

2. Where agency orderingcffice's unconven-tional negotiated solicitation documehtrequited schedule contractors to furn'ishcopies of already e'ffective contract mod-ificationsbytspecific time, but did notwar.n that Cailure to comply would eliminatecotractor.From consideration for award oforders, protest by n6iitra tor'Lo11owing itselimination from procuremert is not "baseduponl any apparent solicitation imr;.propriety.Rathbr,, protest was timely filed within 10working dayi,,^after protester knew basis forprotest--elim"Vinaition from procurement forfailure to furnish copy of contract modifica-tion.

3, Contention by interested party (successfulaffetor)bthat its ability to respond ti) protest.was hampered because,'protest correspondence waserronedously sent to branch office Lather thancompany headquarters is without merit wheredifferent representeatives of company gave con-flicdting instructions as to where correspondenceshould be sent', add in any event company hadmore than'normal 10 working days in which toprepare iks cofninents.

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4. In negotiated proci''reme't'where schedule con-tractors were competing for award of orders forparticular project, circumstances indicate thatprotester adequately communicated its offer to

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perform -work though it did not t'imely submit copyof mddificatiol to its contract as required,.Aj.eucy was obligated to exert reasonable etfortsto verify existence and contents of contractmodification.

5. Where schedule lontractordwere competing for awardof orders and ,age~ncy required that (1) relevantcontract modifications be effected by September 19aid (2) copies of modifications be submitted toagency's orderino office byd September 23, acceptinglate copy of modification or verifying modificationwas effective as of September 19 would not haveamounted to acceptance of "late proposal," becausethere was no opportunity for offeror to materiallychanige its offer and thereby gain unfair competitiveadvantage. Copy requirement was matter of form andwaiver by Government would not have prejudiced otherofferors.

6. Decision to reject schedule contractor as technicallyunacceptable to perform proposed wick orders solelybecause contractor had failed t.' submit copy ofextremely simple contract modification "to agencyordering office--where cont'ractor had timely filedcontract modhlficatifn with agency headquarters and3with reasonable effort orderihg office could haveverified existence and,-contents of modification--clearly hadono reasonable basis. GAO recommendsthat USA either terminate existing order's and orderGovernment's requirements under protester'sschedule contract, or reopen negotiations.

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Tablii of ContentsPage

I. Background

A. MASC'B arid Ordering Procedure 4

B. Initial Phase of Procurement ., 5

C. CSC Contract Modification ...s.. 6

D. Other Contractor's Responses ,.. 9

E. Final Evaluation and Selec~tion.. 11

II. Procedural Issues

A. Is CSC an Interested Party to

to FileProtest?............... 13

B. Is CSC's Prbtest Timely? ....... 14

C. Did GE Receive Opportunity

to Comment? ,,, ,,,, ., 16

III, Substantive Issue

A. Protester's Position ........... 17

B. Agency's Position * ............. 18

C. DiscusBsion * *******g * * *. 19

IV. Conclusion auI Recommendation ....... 23

11A~~~~~~~~~~~~~~~~~~~~~~~~~~'

a.~~.

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This is our decision on a protest by ComputerSciences Corporation (CSC) concernihg> the GeneralSecvices Admini3tration's (GSA'S) selection of theGeneral Electric Company (GE)[to receive orders forcertain services finder a GSA-GE contract., CSCcontends that it should Ieve been selected to receivethe orders undery its contact with GSA. The principalissue involves the-'reasonableness of GSA's findingCSC technically unacceptablt to perform Lh'* workasea result of CSC's failure to meet a requirementthat contractors furnish copies of any relevantcontract modifications to the GSA office conductingthe procurement by Se'pLtmber 23, 1977.

I. Bachkground

A. MASi-s and Ordering Procedure

The services involved in the present procurementare for the Department of the Army'1 Computnr Assist:edMap Maneuver System (CAMM'S). GSA's RegionS 6officein Kansas City, Missouri,"selected GE for this work inOctober 1977, with the expected coo' being $733,679over a 3-year period. The first order $110,000) forCAMMS services through September 30, 1978, was issuedunder GE's Multiple Award Schedule Contract (MASC)No. GS-OOC-50250 in November 1977.

GE, CSC and other companies havia rntered intoMASC's under GSA's Teleprocessing Services Program (TSP).As provided in Federal Property Management Regulations,Temporary Regulation E-47, August 3, 1976, as amended,TSP is the mandatory rw hod whereby Federal agenciesacquire teleprocessing Services from the private sector.M.ASC's are one of the alternatives under TSP wherebyagencies can do so.

The IIASC's describe in some detail the proceduresfor selecting a source for services. Briefly, paragraphD.9 of the MASC's provides thatL hb' principal evqluationcriterion is least systems life cost. Paragraph¾).iOprovides, among 6thec things, thaiEGovernment activitiesselecting a sour!.~ for a particulai order shouldt'prepairea description of the services needed, develorn and apply;technical and cost evaluation criteria; ihtllding runningany necessary benchmarks, and elimihaLe from consideration

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sources which fail to meet the requirements. Select-ing which contractor should receive an order, in short,in on the basis of the source which meets the user'srequirements at the. lowest overall cost to the Govern-ment.

B. Initial Phase of Procurement

By letter dated April 6, 1977, an Army procure-ment official invited r(SC to attend u prebenchmarkconference Concerning the CAMMS project at FortLeavenworth, Kansas, pn April 18, 1977. The letterstated that "Failure to respond in writing (letter ortelegrapht ) [by close of businei'ss April 15, 1977] willremove your company from furthe% consideration." Atotal-of 30 MASC venddkrswas contacted at this timeto determine their interest in competing for and cap-ability of satisfying the CAPIMS requirement.

The record do'es not show whether CSC responded inwriting to the AEN41 6 letter. Hdwever, CSC and othervendors did express interest in competing for the award.CSC, GE, and three other vendors Subsequently passedbenchinar!; tests.

.r1,While this process was. going 6i,-i the GSA Project

Manager, by letter dati'd May 16, 1977, asked CSC howit woiold meet a CAMMS requirement for 80-percent reli-ability at the individual userlevel- The letter pointedout that the reliability currently dffered,,at that levelin CSC's MASC was "none," requested a response by May 26,1977, and i-arned that failure to respond would eliminateCSC from fu.ther consideration for the CAMMS project.

CSC responded to this inquiry and at a meetingwith GSA-Kansas City personnel on M3y 27, 1977, indicatedthdt it would take necessary action to amend its MASC toprovide an adequate reliability level. Apparbnitly,,inconfirmation of this meeting, CSC's letter dated June 9,1977, to the GSA. Project Manager itated in"part: "CSCINFONET agrees to maintain an available rateiin excessof 90% reliability at the user level. INFONET will amendthe schedule as agreed upon to meet the CAMMS user reli-ability requirement."

By letter tc CSC dated July 25, 1977, the GSA ProjectManager stated:

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'Re: Multiple Award Schedule ContractAmendment and/or AdditionalOfferings.

9 ,

"The purpose of this letter is tolet you know the position that wemust take with amendment to yourMASC or additional offering undera MASC that could possibly effectthe evaluation of CAMMS economicallyor technically.

"If a vendor has an amendment and/oradditional offering for its TSP/MASCfiled or will be filed with GSA inIWashington, D.C., and may affect theCAMMS evaluation and subsequent systems-life technically or economically, suchchtinge(s) must be agreed upon by thevehdcr and\GSA and effective on orbefore September 19, 1977, 4:30 pm(CDT). A. copy of 'the signed agreementmust be sent by the vendor to me sothat it is received on or before4:30 pm (CDT).

"If you have any questions regardingthis information please call me * * *and I will discuss further with you.'

GSA states that by letters of the same date, thesame information was conveyed to the other competingvendors.

C. CSC Contract Modification

In a letter' dated July 29, 1977, to GSA's AnPProcureme'nt Division in Washington, D.C., a CSC repre-sentative stiated:

"Pursuant to a request frbm the GSARegional ADP Coordinator in KansasCity, who 1s'processing an MASC com-petitive selection for the U.S. ALrmy,Computer Sciences Corporation herebyoffers to improve its agreement onmaintenance of Network FacilitiesReliability. Specifically we offer

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to change our entry in subparagraphHf.ll.a.(2)(c) from 'none' to '90percent.'

WSince thisachange is clearly in thebest interests of the Government, Irequest that we meet as soon as possibleto complete the requisite contractmodification. Please call me * * * whenyou can set a meeting."

The record indicates that modification No. 2to CSC's MASC was signed by the GSA ADP ProcurementDivision contracting officer (in Washington, D.C.)on August 26, 1977. Aside from the "boilerplate"language of Standard Form 30, the modification readsin its entirety:

"The above-numbeted contract forteleprocessing Services, IndustrialGroup 737, Industrial 737, for theperiod December 17, 1976 throughSeptember 30, 1977, is herebymodified as follows:

"The response-to Subparagraph H.1l.a.(2) (c) Network Facilities Reliabirlityis change~d to offer aUO% availabilityrate for the communications networkat the individual urj-r level, in lieuof the original 'nona' percentavailability rate in the currentcontract."

The record also reflects that at. about thistime there were a number r, conversations betweenvarziu6s CSC personnel and the.GSA-Kahsas CityProject Manager. In an affidavit dated March 17,1978, the same CSC empiloyee who sighed CSC's,July 29, 1977, letter states that on August 17,1977, he met briefly with the Project Directorand that:

"On that occasion I remarkedto him that my letter offer to GSAto change the contract entry inquestion from 'none' to '90 percent'had been converted by GSA into an

.... ~~~~ - . . . .4

0- 19 063 2 8

appropriate contract modificationform, which I had signed the previousPriday or August 12, 1977.

"I wecpt on to state that I hadbeen advised by GSA that the molft-cation would probably be signed bythe Contracting Officer during thenext business week.

"Mr. Linebaugh (the Project Managerlremarked that it was a load off Dt14mind to know that this prob.en wosout of the way and we didn't haveto worry about it anymore."

Anotber CSC employee (M. SollerberqergIrz anaffidavit dated March 18,. 1978, stabe0 that afterNugust 26, 1977, and prior to Septenber 19, 1977,he notified the GSA Project Manager at least oncelty telephone that CSC's MASC had been Aimendedregarding user-level reliability, and that the Proj-ect Manager did not ask him to forward a copy ofthat amendment by mail. The record al-o containsa copy of an affidavit dated March 18, 197e, byanother CSC employee (G. Bishop), who states hespoke to the Project Manager on several occasions:

"On at least one of these occasions,shortly after the August 26 amend)nent wassigned, I called the Project Manager andinformed him we had the approved menuidment.Ile indicated that he had already beer nnadeaware of this fact by one of our tegionalpersonnel. During these conversatios iabefact that CSC was going to be djsquaLifled,or was disqualified, from the con.petitiolnwas never brought out., During the week ofSeptember 12 * * * I asked the CKI149S ProjectManager if there was anything else that weneeded to do. His response was I'no, youlook in good shape.' I had several otherexchanges of this type,' both boboloe andafter the cut.-off dates. Durinj tos:L opfthese discussions, I asked 'whak else can Ido?' or 'is there anything else I need to do?'Never was a response made that we woukld Deeliminated or were eliminated from th ecompeti tion."

.. n .. b -...... , .. - As... --

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Another CSCemployee (M. Seeb), in an affidavitdate1 March 8, 1978, states that subsequent toAuguqt 26, 1977, and prior to September 23, 1977, heconiirmed" with the Project Manager a'c least once onthe phone and once in person that a CSC contract amend-ment changing its communications network reliabilityat the individual user level from none to 90 percenthad previously been "approved."

In this regard, GSA's report received by outOffice on March 8, 1978, states that while theProject Mar.aiger 'had been notified of CSC's intentto amend its MASC in a timely manner, he had not, asof September 23, 1977, seen a copy of the executedamendment." The Project Manager, in a memorandumdated March 17, 1978, states that during the' CAMIMSbanchmark he had contact either by telephone or in 2person with six CSC employees, including the four whchave furnished-the above affidavits.,, The Project Man-ager states that "At no time during any of these situ-ations did I exclude CSC from meeting the requirementsof the 25 July 1977 letter. I did acknowledge theirstatements saying they had amended their contract. * * *"

As the dates of the foregoing documents indicate,none is contemporaneo'us'with the conversations inquestion. eIn addinion, the protester has not allegedany statements-by any",GSA officials explicitly waiv-ing the requirement that a cdpy cf any pertinentcontract modification be filed'with GSA-Kansas Citynot la.er than September 23, 1977, *GSA denies thatthe Project Manager ever indicated to anyone thatthe September 23 filing requirement was waived andalso asserts that one of the Projec'. Manager'ssuperiors who was involved in the procurement fre-quently reminded all vendors of the September 19and 23 cutoff date'.

As far as the record shows, CSC did not mail ortransmit in any other fashion a copy of its MASCmodification No. 2 to the GSA ProjeciL Manager in KansasCity by September 23, 1977.

D. Other Contractor's Responses

GSA notes that, like CSC, several other contrac-tors had stated during the procurement that proposed

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* ~~* conti:act modifications had been submitted to the con-tracting officer in Washington, D.C., but copies ofthese purported modifications were not received inKansas City 'by September 23, 1977. Two vendors, onthe other hand, did effect certain contract modifica-tions during the procurement and did furnish copiesof the modifications to Kansas City by September 23,19 77 .

In this connection, GSA reports that GSA-Kansas City officials met, at GE's request, withGE representatives on September' 17, 1977. At themeeting GE asserted, among other things, that itsMASC currently provided toll-free access to certainCAMMS sites. GSA utates essentially that itsofficials did not agree with GE's interpretationof the contract, that they declined to negotiateon this subject, and that they refused a GE requestto extend the cutoff dates. On September 20, 1977,USA-Kansas City received a GE letter of the samedate which stated in part:

"In order to clarify our communicationscosts for the CAMMS proqurement, GeneralElectric would like to withdraw all previouscommunications documents which statedcosts to the Government.

"General Electric will provide toll-free access to all CAMMS exerciselocations mentioned in your communicationsrequest of 9 May 1977.

"Wle believe that the language in ourTSP Schedule Price List provides forextension of toll-free access to newlocations, when by management decision,it is -equired; the present usage ofCAMMS does justify some extensions,and therefore toll-free access isbeing given where not covered. * k *

"We are preparing an amendment to ourTSP Schedule Contract to furtherclarify our position and this amend-ment will be submitted in sufficienttime to be evaluated for the CAMMSprocurement."

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. GSA-Kensa" City apparently',-rece'iVed a copy ofthe 'proposed contract mlod'ifk'cation'montiorsud byGE on September ,23, 1977. The modification (No. 4to GE's MASC) was',~pbt signed by the GSA contractingofficer in Washington until September 29, 1977, anddid no.. become effective until that date.

GSA-Kansas City states that it maintained an'open do or" policy and that t~he September 1.7 meet~ingwas similar to meetings held with other vendors,It appears that there were approximately 30-40such meetings with vendors during the procurement,

E. Final Evaluation and Selection

After Sepltember 23, 1977, GSA-Kansas City wentthrough a final evaluation and selection process.An initial "findings and determinat~ions" (sourceselection) memorandum dated October 7, 1977, waslater superseded by a selection memorandum datedOctober 25, 1977.

In arr&ivinc. at his determination, th-- GSAofficial making the selection considered the factthat during the procurement several offe~rors hadsubmitted letters which, if considered as part oftheir offers,.'could affect their eligibility foraward or, theirzoscts, T~hlise included CSC's June 9,1.077, letter, supra, concerning reliability at theuser level; GE's September,120, 1977f letter, supra,coho.erning,toll-fre'e access; a letter from a thirdvendor dated September 22, 1977; and a letter froma -fourt-fi vendor'dated July 8, 1977. None of theseletters were accompanied by copies of MA!'C midifica-tions which had become effct~ive,"not; later 'thu-nSeptember 19, 19717, nor were cov'lies of such effective'contract modigfications furnished to GSA-Kansas Cityby September 23, 19§77.

Thn,.Octo'be'r 7 selection was on the basistha't the various letters including CSC's and CE'scould be considered either as price reductions unders-,.ction D. 1 of tile MASC's or as 'managementdecisions" resulti;ng in reduced costs undersection 1HA4.. of the MA.SC's. On this basis, GE'ssystem life cost for CAMPIS ($733,679) was lowerthan any other vendor 's.

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However, after consulting with GSA-Washington,the selection official, as noted in his October 25statement, decided that the variobs letters couldnot: be accepted under either section D.19'or H.4.F.in the absence of cohitract modifications implementingtheir cuhtents. Apparentl9, there was doubt that the 'offerings in the letters would be contracLually'en-forceable absent contract modificatioaps. On this basis,GE was the technically acceptable vendor with the lowestsystem life cost ($1,445,872). Though CSC's cost waslower ($1,061,467) it was considered technicallyunacceptable because it had not submitted, bv September 22,1977, a copy of a contract modification increasing itsreliability at the user level as CSC's June 9 letterhad indicated would be done.

The October 25, 1977, selection memorandumconcluded:

"If all of the letters referred toabove could be accepLed by theProject Manager under lMASC SectionsD.19 and/or 1H.4.E, then the GE MASCshould be '/selected for CMMMS supportwith\an evaluated systems life costof $733,679. If none of the lettersreferred to above can be acceptedby Lhei Project Manager (for reasonsdiscussed above), then the GE MASCbe selected for CAMMS support withan evaluated systems life cost.of$1,445,872.

"As evident from the above, inso-far as the selection of a MASC forCAMMS support is concerned, thequestion of acceptability of thevarious letters referred to aboveunder MASC Section D.19 and/or11.4.F is mule; in that the GEMASC would be selected in any case.Further, because the GE MASC hasin fact been amended (albeit sub-sequent to the 9/19/77 cutoff date)to provide the additional servicesat no additional cost (referred toin the GE letters dated 9/20/77),

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CAMMS support under the G.JIMASCwould be provided at the lbwersystems'life cost of $733,679 regard-less of whether the selection isbased on that figure or the higher'evaluation' figure of $1,445,872."

Both GSA and GE assert that the selection wasactually based upon GE's system life cost of$1,445,872.

We note in this tegairdthat if the sourceselection official had considered the fundarmental"cutoff" for source selecti6n purposes to be theactual conttact iiiodif' itions which had becomeeffective not later than Septe~mber 19, 1977, regard-less of whethbr'GSAMka'fsas City had received copiesof such'rmodifitations by September 23, 1977, CSCwould have been technically acceptable and itsevaluated systems life cobt of $1,061,467 wouldhave been lowest. GE's cost would have been$1',445,872, because it; was not until GE's contractmodification No. 4 became effective on September 29,1977, that GE's cost was effectively reduced to$733,679,

Finally, the-selection official has indicatedthat on September 22, 1977, he contacted GSA-Washington to explore the possibility of independentlyverifying which vendors had effected contractsx\modifications by September 19, 1977. He was tbldessentially that such' requests had a lower priorityin relation to GSA-Washington's other work, butthat higher prioriLy could possibly be given if itwas necessary to check only one modification toone vendor's tMASC.

!I. Procedural Issues

A. Is CSC an Interested Party to File Protest?

GE questions the "standing" of CSC to file aprotest under our Bid Protest Procedures, 4 C.F.R.Part 20 (1977). GE alleges that the expiration ofCSC's MASC on September 30, 1977, and its replace-

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ment by a modified 14SC on d6tobeir 6, 1977, operatedas a total revocation bf CSC's offer to the Govern-ment, and that CSC was therefore legally ineligiblefor award at the t ne GSA selected a contractorfor the CAMIMS project (October 28, 1977).

4 C.F.R. § 20.1 provides that an "interestedparty" may protest to our Office the award of acontract by a Federal agency. The fact that aproposal has expired does not mean the offeroris not an Interested party to protest, because byactively pursuikg a protest the offeror can reviveits proposal. Riggins & Williamson Macl'he Company,Inc., et al., 54 Comp. Gen. 783, 789 (1975), 75-1CPD 168. In any event, CSC points out that itsfiscal year 1977 MASC was renewed by GSA EffectiveOctober 1, 1977. CSC is sufficiently inttrestedto file a protest with our Office.

B. Is CSC's Protest Timely?

GSA contends that the ptotest is untimelybecause section 20.2(b)(1) of our Bid Protest ,Procedures provides that protests based upon allegedimproprieties in any type of solicitation whichare apparent prior to the bid opening or closingdate for receipt of proposals must be filed priorto bid opening or the closing dtLe f6r receiptof proposals. GSA interprets the protest as beingbased upon the establishment in GSA'.s July 25,1977, letter of the requirement that copies ofcontract modifications be filed'in GSA's KansasCity office by September 23, 1977. The agencybelieves that its July 25, 1977, letter was eitheran "adverse agency action," or established anapparent solicitation impropriety which CSC wasrequired to protest prior to the time for filingthe modifications.

By definition (4 C.F.R. S 20.0(b) (1977)),adverse agency action occurs only after a protesthas been filed with an agency. GSA's July 25,t 1977,letter cannot be an adverse agency action becauseCSC had not filed a protest with GSA prior toJuly 25.

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Further, we do 'not think the (protest is basedt'pdn ~any alle6gd mJ.prpriLetj in the solicitationwhich reasonably 'shrkud have been apparent to CSCprior tto September 23, 1977. GSA cites in thisconnection 'several cases- where protesters, aftersubmitting proposals, contented that the Governmehit'srequests for proposals (RFP's) had not allowed themedfficient time to prepare their proposals (e.g.,wf~care, ita., B-181982, Sdetember 4, 1974, 74-2CPD'146, and'United Terminals, Inc., B-186034,April x7, 1976, 76-1 CPD 286). Suchp rotests areuntimely because (1) the closing date for receiptof proposals is explicitly set out in the RFP andis well known to be a firm Shutoff unless extended,and (2) an offeror at the time it is preparing itsgropos`l is in a p6sitionzto reach a decisionwhether it believes the RFP allows sufficient timefor proposal preparation or not. Thus, such protestsare based upon alleged solicitation improprietieswhich were "apparent," and, as GSA correctly pointsout', an offeror-cannot acquiesce in the ground rulesof the procurement and 1protest those ground ruleslater when award has been made or is about: to be madeto another offeror. See Kappa Systems, Inc., 56 Comp.Gen. 675, 687 (1977), 77-1 CPD 412.

However, it does not logically follow thatevery protest filed after submission of proposalsconcerning compliance with an RFP provision whichwas stated in mandatory terms is essentially basedupon an apparent solicitation impropriety and islikewise untimely. 4A protest is "based upon" a;solicitation impropriety only if, considering thenature of the solicitation provision, the improprietyreasonably should have bean apparent to the offerorbefore it submit ted its proposal. In other words,an offeror preparing its propposal cannot reasonablybe expected to anticipate-c-very conceivable way inwhich an agency might somehow misapply or misinter-pret mandatory solicitatf6n provisions. If RPPprovisions are somewhat unclear or are subject tointerpretation as to how they might be applied inany of a variety of concrete factual situationswhich might arise during a procurement, a piatest

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after award challerging the way the'prov'isintsi wereapplied during the evaluation and selj6%tion processindy be bonsidered timely. See, gener.Lly, ComputerMachini'ty Corporatioh, 55 Comp. Ger(.YŽ.1,51 (1976),76-1 CPD'358; Amram Nowak Associates~l nc., B-lPf7253,November 29, 1976, 76-2 CPD 454; Telos ComputingInc., B-190105, March 27, 1978, 57 Comp. Gen. _

78-1 CPD 235.

It is noteworthy that the present procurei'eintdid not involve a conventional solicitation dodbimentsuch as an RFP. The pertinent solicitation documentwas GSA's July 2.5, 1977,t 4letter which required thatcopies of coi'tract modifications be filed in KansasCity by Septeinib4r 2?., 1977. The letter did notwarn tOat failure tL do so would result in anofferor being elimirated from the competition. Inthese circumstancesi we see no reason why an im-propriety in the solicitation reasonably shouldheave been apparent to CSC prior to September 19,1977.

The applicablc standard for determining thetimeliness of CSC's protest is 4 C.F.R. § 20.2(b)(2),i.e.. protests other than those based upon appaientsolicitation improprieties must be filed within-10working days after the basis for protest is known orshould have been known, whichever is earlier. CSCtimely filed its protest within 10 working days afterit was advised by GSA in November l977 why it had beeneliminated from consideration.

C, Did GE Receive OpcpriunitLy to Comment?

GE tas complained several times that its abilityto respond to the protest was hampered because per-tinent protest correspondence was erroneously for-wardhJd to its Washington, D.C,, sales office ratherthan'tLo the cognizant GE headqt'arters office inRockville, Maryland. In this r'gard, we do notknow what instructions GE gave \\o GSA or to theprotester about where to forward uorrespondence.However, our Office began forwarding protest cor-respondence to the GE Washington office on November 23,1977, at the request of a GE represe.½tative in thatoffice, We continued to send correspondence tothat office until March 9, 1978 (approximately

_ * ~~~~~~~~~~~~~~~~~~~~~~~~~~~. . -a. *

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1 nAth before the record inthe case closed), w1lenwe-were informed for the first time by a GErepresentative at Rockville that GE wanted allcorrespondence sent to its Rockville office.

In these circumstances, we see no merit linGE,1t3 complaint. It is up to GEt to decide where itwa '4s protest correspondence sent, and to adviseothier parties acicordingly. In addition, the recordshows that GE had more time to prepare its commentsin this case than the normal amount of time (10working days) provided-in our Bid Protest Proceduresfor commenting on an agency report (4 C.F.R. S 20.3(d)).

III. Substantive Issue

'A. Protester's Position

t* CSC-believes that the requirdnefit establishedin the\\GSA Pro ject Manager's July 25, 1977, 6tterthat copies of any pertinent contract amendmentsbe filed with GSA's Kans'as City office by September 23,1977, was, under the circumstances, a mere fdrmality.The protester stresses there is no question that itsMASC had 'been effectively amended before the cdt-off date to provide the reliability level GSA hadrequiredtand asserts that its contract could notbe "unamended" for failure to send a copy to aparticular GSA official,

ukErther, CSC believes it cannot be seriouslycontended that Itl was too great an administrativeburden for GSA-kansas City to check with dSA-Washington and confirm the existence of contractamendments 'effective as of September 19, 1977,I'articillaily since only five vendors were competingin the procurement ctnd CSC's amendment involvedsuch a simple change 'to its contract. Thepro-tester aelieves that'to eliminate a vendor fromconsideration for a million dollar award in thesecircwmstanceo--where th\n GSA Project Manager hadrepeatedly received oral advice that CSC's contractamendment was being acconplished, and where the Proj-ect Manager's July 25,-1977, letter (contrary totwo prior requests for information from the con-tractors) had included no warning about the con-

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sequences of failure to.. submit a copy of a colftractamendment--is a decision which exalts form oversubstance, and represents an abuse of the agency 'sprocurement authority which cannot be allowedto stand.

B. Agency's Position

GSA believes this case is analogous to a lateproposal situation. The ageiidy p4ints but that it iswell established' that tu insure fairness to allofferors in a negotiated prbcu'reniiUnt, there must bea common cutoff datLe for submissio6n of best andfinal offers, and 'that proposals no'L submittedon time must be rejected, citing 48 Comp. Gen.583, 592 (1969), 50 id. 1., (1970), 50''id. 117 (1970),,52 id. 161 (1972) anidoth&r authorities. The agency'states that, "firin gtoundsrules" therefore had tobe established in the present procut-tement, andthat GSA attempted to, accomplish this by theProject Manager's Jul'y 25, '1977, letter which setcommon cutoff dates applicable to all vendobrGSA maintains that consisteit with the groundrules, any contract amendments received after;: thecutoff dates were properly treated as late andwere not considered. To do otherwise, the agencybelieves, would have been prejudicial to"vendorswhich submitted copies of their amendmehis& on time.The agency reasons that CSC's only effective offerwas its MASC and amendments thereto which had beenreceived by GSA-Kansas City prior to the ,September 23, 1977, cutoff date, which, however,did not satisfy the Army's technical requirementsbecause it provided reliability at the user levelof "none." Thus, in GSA's view CSC was necessarilyrejected as technically unacceptable, and GE wasproperly selected as the technically acceptablevendor with the lowest cost.

GSA points out that the requirement for con-tractors to furnish pertinent MASC informs libn Lo thelocal ordering office is not inconhsistent with theMASC's, and that this requirement was establishedbecause it would be too great an administrative burdenfor the GSA Washington headquarters to distribute thisinformation. GSA notes that there are 32 MASC's in

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existence, and that over 500 delegations of authority'to use the Teleprocessing Services Program have beenmade.

Further, the agency maintains that GSA.-KansasCity could not rely on oral 'n'-ificatibnfi'f a con-tract modification (and subsequent documentary proof)because t~hs. would not have allowed proper analysisand evaluation within the very short amount of timeallotted for the'evaluation in this case (Septemrber 23-September 30, 1977). It was anticipated that the CAMMSservices would begin on October 1, 1977. The, agencypoints out that a contract modification might be com-plex or contain carefully worded stipulations or con-ditions.

GE, sinilarly, comments that under the MASC'sselections must be made based upon the informationmaCe available by.the contractors to the orderingoffices, as indicated by Paragraphs D.17 and D.18of the MASC's which obligate contractors to distrib-ute their pricelists and amendments thereto toordering offices.

C. Discussion

l The essential facts in the case are reasonablyclear. A GSA ordering office in Kansas Cityj con-ducted a procurement which was to lead to theselection of one of several schedule contractorsto receive orders for certain services. The orderingoffice required that the competing contractors (1)accomplish any contract modifications pertinentto the procutement not later than September 19, 1977,with the GSA office in Washington, D.C., responsiblefor processing such modifications, and (2) providecopies of such modifications to Kansas City notlater than September 23, 1977.

The ordering office had told the protesterthat for the putposes of this procurement it wastechnically deficient in one respect (reliabilityat the user level). The protester replied inwriting l-hat it would modify its contract to correctthis deficiency and did so well before September 19.

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There were oral statemients by the prot`ester to theGSA official conducting the procurement in KansasCity that the modification had been accomplished.However, the protester failed to furnish a copy ofthe modification to Kansas City by September 23.

Reasoning that the selection had to be basedon the reduilts as of the two "cutoff" dates, theordering office decided that--due solely to thefact Chat a copy of the1 contract1modificationdescribed by the protester had not be6bn-received--the protester was technically unacceptable, andselected GE as the technically acceptable vendorwith the lowest cost, Subsequent to September 23,a GE contract modification had the effect of reduc-ing its costs below the figure at which the agencystates the selection was made.

We believe the basic issue in the )?resent -

case is whtther CSC made an offer prior'to September 19,1977, to perform the requirsd services for the CAMMSproject, ihcluding reliability at the user level of80 percent or better. An offer to be effective mustbe communicated to the offeree. 37 Comp. Gen. 37 (1957).We think the offeree heres was not the GSA Washingtonoffice which processed CSC's contract modification, butthe GSA-Kansas City office which was conducting the CAMMSprocurement.

In formally advertised procurements, as in37 Comp. Gen. 37, there are rather strict rules asto how the communication of bids is-to be accomplished.Negotiated procurements are characterized by greaterflexibility, although it is required that proposals besubmitted by a comrmon cutoff date. In the presentcase, the Project M anager's July 25, 1977, letteramounted to a notification that "best and final" offershad to be finaliztd by the cutoff date of September 19,1977. The letter further required tha'' any portionof those offers ntot already in the hands of the procuringoffice be furnished not later than September 23, 1977.There was no wathing that failure to comply with thiscommunication requirement might or would resultin the rejection of an offer.

Considerthg CSC's participation in the procurementthrough its letters, satisfactory performance of the

. ~ ~ ~ -. I .A a,,'

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benchmark 'iests, execution of contract modificationNo. 2 and oral advice to GSA-Kansas City concerning themodificatioh, 'there is no question that GSA-Kansas Citywas on notice of an offer by CSC to.perform the CAMMSservices. That CSC's failure to comply with the for-malities of COMMUnIdation required by the agency wasnot a material defect ,ln its offer is also clear. IfGSA 7 Kansas City t`ad issu6ed an. order to CSC onSeptdmber 24, 1977, without having received a copyof CSC.'s contract modification d6. 2, there is noquestion that CSC woduld have o6eenA obligated tofurnish the CAMMS services with reliability at theindividual user level of 90 percent because CSC infinaliziing its offer prior to the September 19cutoff date had contractually obligated itself todo so by modifying its contract.

In these circumstances, we' believe it wasincumbent upon the responsible GSA officials in-Kansas City to make reasonable efforts to verify'the contents of CSb's offer to the extent necessary.'The principle involved is similar to cases whereit has been held that reasonably available descriptivedata on file with the Government before bid openingmay properly be used to establish whether the productbid is equal to a brand name proddct (see Cummins-WagnerCo., Inc., et al., B-188486,, June 29, 1977, 77-1 CPD 462and decisions cited), or a situation where reasonableefforts to examine prior contract drawings referencedin a bid may resolve a bid ambiguity (Sentinel Elec-tronics, Inc., B-185681, June 24, 1976, 76-1 CPD 405).

In this connection, the "lat:e proposal" analogyadvanced by GSA is inapposite. The rationale under-lying strict application of the late proposal(and late bid) rules is to prevent even the slight-est possibilitytOf any offeror gaining an unfaircompetitive advantage~\,by being able to make materialchanges in its offer after the cutoff date andtime. As alreadyindicated, the offers inthiscase cobsisted of the submissions made to GSA-KansasCit4 during the procurement along with the contractmodifications implementing those submissions which hadbeen made effective not later than September 19, 1977.For GSA-Kansas City to have verified the, existence ofa contract modification which had been made not later

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than September 19, 1977, or to have accepted alaL- copy of such a modification, wouLd not haveinvrolved any material chahge whatsoever in the offer;in other words, whether an offeror 3met the 1copyrequirement" could not affect~the price, quality, orquantity of its offer. The copy requirenlnt vas amaLtet of form, established for the CoVeznnent'scoraveni4nce to expedite the evaluation of offers. Forthe Government to waive a solicitation reqjuirement ofthis kind for an offeror which failed to comply worksno prejudice to other offerors which did conply. See,in this regard, 40 Comp. Gen 321, 324 (1960),

FurLher, we are not persuaded tJhat CSA-KansasCity made reasonable efforts to verity the contentsof CSC's offer. Initially, the argbment tAbut it wasImpracLicable to verify the existence Of corttractmodifications because the selection %vas to be madevithin a week after September 23, 1977, is completelyundercut by the fact that GSA-Klansas City spent 5 weeksevaluaLing the offers and making a selecticn, Duringthis tine, GSA-Kansas City was in corntact at Least twicewith GSA-4lzeshington to obtain advice concerning theprocurenent. Further, the protester has obtaired andsubmitted a copy of a memorandum dated Octob-er 17, 1977,by' an Assistant Commissioner of G3SA's Automated Dataand Telecommunications Service ½t~ Wahbington, D.C.The memorandum shows that GSA-Washington exanined thecontracts of the five vendors competing in t~heClaINS procurement to determine, among other things,what contract modifications were in effect bySeptcmber 19, 1977.

There was a total of eight such modifications.Copies of some of these had been submit~ted toGSA-Kansas City by September 23, 1977. Howelver,GSA states that in addition to CSC, tthree wendorshad indicated that contract modifications relevantto the prucurement were being processetd, bLat hadfailed to submit copies of the modiflvations tooKansas City. In this regard, it seems cleatr fromthe record that the possible modifications spokenof by two vendors (GE and Control DatZ Corp-oation)could not have become effective by September 19,1977. Also1 it became clear at an eatly stage inthe evaluation that regardless of possible nodfica-Lions by a third vendor (United Computing Servicus,

B-190632 23a~~~~~~~~~~~~~~~~~~~~~~~~.

Inc.), itseevaluated system life cost would not be lowestin any event. This left only one pre-September 19 modifi-cation needing verification--CSC's. Considering the ex-tremely simple nature of this modification, we believeit is clear that with a reasonable effort its existencecould have been verified by GSA-Kansas City.

I.~~~~~~~~~~~~~I

For th'& foregoing reasons, we believe GSA'S decisionto reject C')-s> offer as technically unacceptable clearlyhad no reasonable basis. It is apparent that but forthe lack of r 'a'onaile efforts by GSA to verify thecontents of C)('?s offer, CSC would have been consideredtechnically a 16eptable. It is also apparent: that underGSA's own redining in making the selection, had CSCbeen technicaily acceptable it would have been the vendorselected, beca\\se its evaluated system life cost was lowerthan the cost figure which was the basis for selectingGE. The fact teit a GE contract modification effe~ctiveSeptember 29, 1977, had the result of further reducingthe costs the Government expected to pay for the CAMMSservices is immaterial, as this modification was notaccomplished prior to the September 19, 1977, cutoff date.

IV. Conclusion and Recommendation

The protest is sustained. In view of this conclusion,it is unnecessary to address other issues raised by theprotester.

GSA has furnished an estimate that as of March 16,1978, it would cost $290,657 to change from GE to CSCas the CA!MPS vendor ($17,500 changeover costs plus$273,157 differential between GE and CSC estimated costsfor the period April 1978 *- September 1980). The $290,657figure does not include the amounts, if any, which GEmight recover as a result of any claims against theGovernment.

GE suggests that any termination for convenienceunder the circumstances of this protest would be wrongfuland would entitle it to recover damages in the form ofits anticipated profits. In this regard, the law isclear that settlement of a termination for conveniencedoes not include anticipated profits. See FPR S 1-8.303(a)(2d ed. amend. 103, March 1972) and Nolan Brothers,Incorporated v. United States, 405 F.2d 1250 (Ct. Ci.1969). Even in cases where the Court of Claims

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believed that the Government had wrongfully canceledcontracts (John Reiner P Co. v. United. Scdltes, 325 F.2d438, Brown & Son Electric Co. v. UnitedWTi.'ates, 325 F.2d446 (Ct. Cl. 1¾i3)) recovery of anticipated profits wasnot allowed.

Further, we note that section D.ll of the MASC'sprovides in pertinent part:

"e. Termination of Orders by the GSAContracting Officer.

The right is reserved by the GSA ContractingOfficer to terminate orders for services under thiscontract. One basis for.a termination of an orderby the GSA Contracting Officer is the failure ofthe ordering agency to reimburse GSA for paymentsto the Contractor from the GSA ADP Fund." (Emphasisin original.)

We recomimend that GSA either (1) expeditiouslyterminate any orders for CAMMS services issued underGE's ZMIASC and order any further rerruirements for theseservices under CSC's MASC, or (2) reopen negotiations,establish a new common cutoff date, make a selection,and terminate any orders issued under GE's MASC in theevent a contractor other than GE is selected. By letterof today, we are advising the GSA Administrator of ourrecommendation.

This decision contains a recommendation forcorrective action to be taken. Therefore, we are*urnishing copies to the Senate Committses onGovernmental Affairs and Appropriatiots and theHouse Committees on Governmenti. Operations andAppropriations in accordance with section 236 ofthe Legislative Reorganization Act of 1970, 31 U.S.C.S 1176 (1970), which requires the submission ofwritten statements by the agency to the committeesconcerning the action taken with respect to ourrecommendation.

Deputy Comptroller Generalof the United States