_____________________________________________ DENIED: October 27, 1994 _____________________________________________ GSBCA 12952-P FORTRAN CORPORATION, Protester, v. DEPARTMENT OF TRANSPORTATION, Respondent, and EXECUTONE INFORMATION SYSTEMS, INC., Intervenor. Victor G. Klingelhofer and G. Brent Connor of Cohen & White, Washington, DC, counsel for Protester. Richard J. McCarthy, Anthony L. Washington, Patricia A. McNall, Gregory C. Carter, and Jerome P. Jones, Jr., Federal Aviation Administration, Department of Transportation, Washington, DC, counsel for Respondent. Barbara C. Anderson of Executone Information Systems, Inc., Fairfax, VA, counsel for Intervenor. Before Board Judges PARKER, DEVINE, and HYATT. PARKER, Board Judge. Fortran Corporation protests the Federal Aviation Administration's (FAA's) decision to permit one offeror, but not the others, to modify its proposal after best and final offers (BAFOs) had been submitted. We agree with Fortran that the FAA violated statute and regulation by doing this. We deny the protest, however, because we find that Fortran was not prejudiced by the FAA's actions. The violation had no effect whatsoever on Fortran's chances for award of the contract. Findings of Fact The Solicitation 1. On May 11, 1993, the FAA requested proposals for an Operational Support Telephone System (OSTS), a commercial off- the-shelf telephone system for air traffic control towers. Protest File, Exhibit 1 at 10004. As part of the system, offerors were required to propose both single-line and multi-line telephones. Id., Exhibit 5 at 50025. 2. The contract was to be awarded to the lowest-cost acceptable offeror: b. Offerors [sic] compliance with each of the above requirements shall be evaluated on an acceptable/unacceptable basis. Of those offerors who meet all the of the requirements stated above and who have demonstrated an acceptable degree of past experience as defined in paragraph M.3.c, award shall be made to the offeror who provides the lowest overall cost to the Government. If an Offeror fails to satisfy one of the above requirements, the Offeror will no longer be considered for award. Protest File, Exhibit 5 at 050108. 3. Section C of the solicitation contains the Statement of Work. At issue in this protest is the "do-not-disturb" requirement, which is described in section C.3.1.2.3.8: a) The OSTS shall permit the operator at any station set of any type to put the station into do-not-disturb (DND) operation, during which the OSTS shall transfer all calls intended for the DND station directly to any other previously determined station (e.g., receptionist) without ringing the DND station. b) Each station set shall provide a DND indication (e.g., visual or audible in the earpiece) while DND is in effect. c) The OSTS shall permit executive override of DND. Protest File, Exhibit 5 at 050027. The Award Decision 4. On January 11, 1994, the FAA's contracting officer requested BAFOs from the six companies whose initial proposals had been found to be technically acceptable. Deposition of Susan Handy, Contracting Officer (Handy Deposition) (September 22, 1994) at 8, 17. One of the six offerors declined to submit a BAFO. Protest File, Exhibit 20. 5. Following BAFOs, the five remaining offerors were ranked as follows: Executone $4,397,132.28 Offeror A $6,245,573.00 Offeror B $6,410,606.08 Fortran $7,668,842.70 Offeror C $7,999,946.00 Protest File, Exhibit 20 at 200002. 6. On February 11, 1994, the contracting officer conducted a pre-award survey at the offices of Executone Information Systems, Inc. (Executone), the apparent successful offeror. Handy Deposition at 9. During the survey, the contracting officer asked Executone to demonstrate its proposed equipment. Although Executone successfully demonstrated the "do-not-disturb" capability on its proposed multi-line phone, it was unable to demonstrate that capability on its proposed single-line phone. Id. at 10-11. 7. On February 16, 1994, Executone submitted a letter to the FAA stating that it wished to make a technical "clarification" to its offer by substituting the multi-line phone for those contract line items in which Executone had offered its single-line phone. Executone offered to do this at no additional cost to the Government. Protest File, Exhibit 19. 8. The contracting officer accepted Executone's substitution as a late modification to an otherwise successful proposal under Federal Acquisition Regulation (FAR) 52.215- 10(g)[foot #] 1. Protest File, Exhibit 19. On March 14, the FAA awarded the contract to Executone. Id., Exhibit 23. Timeliness ----------- FOOTNOTE BEGINS --------- [foot #] 1 48 CFR 52.215-10(g) (1993). ----------- FOOTNOTE ENDS ----------- 9. At its debriefing on March 28, 1994, Fortran submitted a Freedom of Information Act (FOIA) request for a copy of the successful offeror's proposal. 10. By letter of April 29, 1994, the FAA provided Fortran a copy of Executone's initial proposal. Protest File, Exhibit 29. Neither Executone's BAFO nor a copy of the February 16 letter was included. Having not received all of the information which it requested, Fortran submitted a second FOIA request for the information on May 9, 1994. Id., Exhibit 30. 11. According to Fortran's president, Lawrence Glaser, Fortran received the requested FOIA information on July 26, 1994. Transcript at 23. Mr. Glaser is certain of the date and we find his testimony to be credible.[foot #] 2 Id. at 23-27. The documentation included the February 16 letter in which Executone requested a technical clarification. Id. Fortran filed a protest with the agency on August 8 -- nine working days after receiving the requested FOIA material. Protest File, Exhibit 37. The FAA had not ruled on Fortran's agency protest at the time Fortran submitted its protest to the Board on August 26, 1994. Prejudice to Fortran 12. Fortran understood the solicitation's evaluation criteria but made a business decision to offer a high-priced telephone system with which Fortran had had substantial installation experience. Transcript at 29. Fortran could not have offered a lower-priced system because it lacked the required installation experience. Id. at 49-50. If a new round of BAFOs were to be ordered by the Board today, Fortran (which now knows the winning price and has the required experience) would offer a totally different, lower-priced system. Id. at 43-45. ----------- FOOTNOTE BEGINS --------- [foot #] 2 Although the envelope containing Fortran's date-of-receipt stamp apparently was lost in Fortran's mailroom, there is no evidence in the record to show the date of receipt as other than as testified to by Mr. Glaser. Although the FAA attempts to make much of the lost envelope, it was unable even to establish the date the FOIA response was put in the mail. See ___ Handy Deposition at 43-45. ----------- FOOTNOTE ENDS ----------- Discussion Timeliness The FAA maintains that Fortran's protest was untimely filed because Fortran failed to file its agency protest within ten working days after receiving the package of FOIA information which formed the basis for the protest. We deny the motion. Rule 5(b)(3)(iii) provides: If a party initially files a protest with an agency [within ten working days after the basis for the ground is known or should have been known], it may file a protest with the Board raising the same ground(s) not later than 10 working days after formal notification, or actual or constructive knowledge, of initial adverse agency action. 58 Fed. Reg. 69,246, 69,254 (1993) (to be codified at 48 CFR 6101.5(b)(3)(iii)). We found as fact that Fortran received the response to its FOIA request on July 26, 1994. Finding 11. The response contained a copy of Executone's BAFO and the February 16 letter - - the information which formed the basis for Fortran's protest. Fortran filed its agency protest on August 8 -- nine working days after receiving the information. Id. Having timely filed its agency protest, Fortran was not required to wait indefinitely for the FAA to respond. Because no agency action, adverse or otherwise, had been taken with respect to Fortran's agency protest, Fortran's protest to the Board on August 26 was also timely filed. Motion to Dismiss for Lack of Interested Party The FAA maintains that Fortran lacks the requisite "direct economic interest" necessary to be an "interested party" eligible to pursue a protest. See 40 U.S.C. 759(f)(1), (f)(9)(B) (1992). According to the FAA, Fortran lacks a direct economic interest in the award because Fortran was the fourth lowest offeror in a procurement in which the award was to go to the lowest-priced, technically acceptable offer. Thus, the FAA argues, because two lower-priced acceptable offers stand between Executone and Fortran, Fortran could under no circumstances win the award, even if it prevailed in its protest. Fortran responded to the FAA's motion[foot #] 3 in two ways. First, Fortran maintained that it was an interested party because, pursuant to section 15.611(c) of the FAR, if discussions are reopened with even one offeror (as FAA has alleged), the contracting officer must request BAFOs from all offerors in the competitive range. Thus, Fortran argued, if Fortran is permitted to submit a second BAFO, it might well win the award. Fortran's second response to the FAA's motion was to amend its protest to challenge the technical acceptability of the two intervening offers. Fortran now maintains that it is the lowest-priced technically acceptable offeror. We deferred ruling on these issues to permit further development of the record. The fully developed record in this case shows two things clearly: (1) the FAA violated statute and regulation when it accepted Executone's amended offer without giving the other offerors a chance to submit BAFOs, and (2) Fortran would have had no chance for award of the contract if the FAA had done exactly what Fortran asks it to do now. In other words, Fortran was not prejudiced by the FAA's actions. The Merits The single-line telephone that Executone offered did not comply with the requirements of the solicitation because the telephone lacked a "do-not-disturb" capability. Finding 6. Executone characterized its post-BAFO substitution of one product for another as a "clarification." Finding 7. It clearly was not. A clarification is a communication "for the sole purpose of eliminating minor irregularities, informalities, or apparent clerical mistakes in the proposal." FAR 15.601. Unlike discussion, "clarification does not give the offeror an opportunity to revise or modify its proposal, except to the extent that correction of apparent clerical mistakes results in a revision." Id. Here, Executone's offered product failed to meet a mandatory requirement of the solicitation and was therefore unacceptable. If the FAA wanted to permit Executone to modify its proposal after BAFOs, it was required, pursuant to FAR 15.611(c), to afford the same opportunity to the other offerors. Telos Field Engineering, GSBCA 9920-P, 89-2 BCA 21,749, 1989 BPD 95. The FAA maintains that it accepted Executone's post-BAFO substitution as a "late modification to an otherwise successful proposal." FAR 52.215-10(d). The problem with this argument, however, is that FAR 52.215-10(d), which permits the Government to accept late modifications which offer more favorable terms, requires that the proposal to be modified be "otherwise ----------- FOOTNOTE BEGINS --------- [foot #] 3 The FAA actually filed two motions, on September 2 and September 14, which said essentially the same thing. The Board understood that the FAA really, really wanted ______ ______ the protest dismissed. ----------- FOOTNOTE ENDS ----------- successful." A proposal which fails to comply with a mandatory requirement of the solicitation cannot be "otherwise successful." Sperry Corp., GSBCA 8298-P, et. al, 86-1 BCA 18,704, 1986 BPD 9. Prejudice to Fortran Although the FAA's actions were improper, Fortran was not prejudiced by those actions. Executone's offer of $4,397,132.28 was $3,271,710.42, or about 43 percent, less than Fortran's fourth lowest offer of $7,668,842.70. Finding 5. Fortran knew that the lowest-priced acceptable offer would win the contract, but made a business decision to offer a high-priced telephone system with which it had the required installation experience. Finding 12. Now, knowing the winning price and that it cannot win with its proposed system, Fortran asks the Board to order the FAA to call for a new round of BAFOs. Fortran intends to offer a different, less expensive system this time. Id. But Fortran lost the procurement not because the FAA failed to call for a second round of BAFOs, but because Fortran made a poor business decision to offer an expensive system. If, during the procurement, the FAA had called for a new round of BAFOs, Fortran, not knowing that the lowest-priced offer was more than $3,000,000 (or 43 percent) lower than its own offer, could never have beaten Executone's price. Fortran's proposed system (the only one with which it had the required installation experience) was simply too expensive. Fortran now knows that it would have to offer a completely different system to be competitive and it assertedly has the installation experience to do so. By asking the Board to order the FAA to call for a new round of BAFOs, Fortran is attempting to use the protest system to obtain an undeserved "second bite at the apple" by correcting a problem which had no effect whatsoever on Fortran's chances of winning the original contract. The protest process was never intended to be used in this manner. Whether this means that Fortran lacks interested party status or just that Fortran was not prejudiced by the violation is unimportant. Fortran was not harmed by the Government's actions and is not entitled to relief. Andersen Consulting v. United States, 959 F.2d 929 (Fed. Cir. 1992). Fortran's second argument for relief -- that it should win the award outright -- is also without merit. Assuming arguendo that the second and third lowest offerors were technically unacceptable (a fact of which we were not convinced), Fortran's request that the FAA be required to accept Fortran's offer is ludicrous. The FAA knows that it can buy a telephone system that meets its needs for $4,397,132.28. We know of no statute or regulation that would require the Government to spend an extra $3,271,710.42 to meet those same needs. Decision The protest is DENIED. ______________________ ROBERT W. PARKER Board Judge I concur: _______________________ DONALD W. DEVINE Board Judge HYATT, Board Judge, concurring. I concur in the result. _______________________ CATHERINE B. HYATT Board Judge