This is a protest appeal. Scientific Fishery Systems, Inc. [SFS] submitted a proposal in response to ASPS 98-0098, a Request for Proposals [RFP] issued by the Alaska Department of Fish and Game [Department]. The RFP requested proposals for "professional services for the development of a new riverine split-beam sonar system for the State of Alaska." SFS contends that the RFP contained specifications that were unduly restrictive, in that they allowed insufficient time for the preparation of proposals and of a prototype for evaluation.

The RFP was issued on January 21, 1998. It contained the minimum requirement that proposers "must have previously developed a split-beam sonar system with associated real -time data acquisition, signal processing, fish tracking and analysis software." [emphasis in original] Responses were due on February 12. The RFP stated that the "approximate contract schedule" [emphasis in original] included a preliminary dry lab demonstration of the proposer's system for the evaluation committee by March 4, with contract award to follow.

Phase I of the project included field demonstration of the selected system beginning in June, 1998. Following a third party peer review of the results of the field demonstration, the full system specifications were to be submitted in February, 1999, and ADFG would advise the contractor of any required modifications to the system in March, 1999. This process of field demonstration, peer review, and system modification was to be repeated in 1999 and 2000, with the final system to be delivered in March, 2001. Thereafter, the Department and the selected contractor would negotiate terms for the purchase, service and maintenance of up to 34 of the systems for use beginning in 2001. Phase II involved the issuance of delivery orders for the completed systems.

The Department received three proposals in response to the solicitation. SFS's proposal was deemed nonresponsive, because it "did not meet the minimum requirement of previously having developed a split beam system with available fish tracking software."

SFS filed a protest. It argued that (1) the apparent winner lacked an Alaska Business License; (2) authority to solicit Outside vendors "was based on inaccurate information regarding the existence of Alaskan vendors"; (3) it "substantially complied" with the minimum requirements; and (4) the specifications were unduly restrictive. The protest was denied in all respects and SFS appealed.

Commissioner Boyer made an initial determination in favor of the Department on the first three issues. He found that the winning respondent had provided satisfactory evidence of an Alaska business license, that the solicitation properly included out-of-state vendors, and that SFS's proposal had not been responsive. A hearing officer was appointed to determine whether the specifications had been unduly restrictive.

A.

Timeliness of Protest.

Prior to the hearing, the Department asked the hearing officer to dismiss the appeal because the protest alleging that the specifications were unduly restrictive was untimely. The hearing officer declined to dismiss the appeal, and a hearing was conducted. Following the hearing, the Department requested the hearing officer to reconsider his ruling that there was "good cause" within the meaning of AS 36.30.565(b) to consider SFS's protest that the terms of the solicitation were unduly restrictive.

AS 36.30.565(a) states that a protest alleging an "impropriety or ambiguity" in a solicitation must be filed at least ten days before the proposals are due. To the extent that SFS' protest was based on a claim that the specifications were improper, it was untimely. However, AS 36.30.565(b) provides that "If the protestor shows good cause, the procurement officer of the contracting agency may consider a filed protest that is not timely." The Department contends that "good cause" within the meaning of AS 36.30.565(b) is limited to "good cause" for the delay in filing the protest. It argues that absent "good cause" for the delay in filing the protest, a procurement officer lacks "jurisdiction" to accept an untimely protest. It argues that the requirement of timely filing should be strictly construed and applied, and that to permit the filing of untimely protests under absent good cause for the delay "would be unreasonably disruptive to the procurements and contract administration and is directly contrary to the purpose of short time line for protests to be brought. [Protests] must be quickly asserted and expeditiously resolved so that the contract can be awarded and the state can do its business."

Timely protests concerning specifications provide a procurement officer with the opportunity to correct an erroneous or defective RFP before the submission of proposals. Excusing untimeliness could enable an unsuccessful proposer to obtain a second opportunity in the selection process and may substantially disrupt the procurement process. For these reasons, the requirement of timely filing of protests based on defective solicitations is an important one: it avoids unnecessary expense, disruption and delay in the procurement of goods and services.

However, the fact that AS 36.30.565(b) permits consideration of some untimely protests clearly establishes that the general policy against acceptance of untimely protests does not apply in all cases. To assert that AS 36.30.565(a) reflects strong policy reasons why there should be a general rule of timeliness does not answer the question of what cases should qualify for the statutory exception to that general rule, or disclose the legislative intent behind AS 36.30.565(b). Similarly, to assert that AS 36.30.565(a) creates a jurisdictional bar sheds no light on the question of what constitutes "good cause" sufficient to remove the bar.

Subsection (b) does not expressly require that a protestor show "good cause" for delay. Indeed, the wording suggests that a protestor needs only to show "good cause" why the protest should be considered. "Good cause" might be construed to include circumstances that warrant consideration of the merits of the protest, even if they do not excuse an untimely filing. The Model Procurement Code and federal procurement regulations are not clearly contrary to such a construction. [1] Furthermore, interpreting AS 36.30.565(b) to permit acceptance of some protests based on improprieties in the specifications even when there is not "good cause" for the delay in filing the protest appears consistent with 2 AAC 12.860(2) and (7). Those provisions authorize a procurement officer to cancel a solicitation after the due date for proposals on the ground that the specifications were ambiguous or inadequate, or on the ground that cancellation is in the best interests of the state, even if no protest has been filed.

The Department argues that 2 AAC 12.860 was promulgated solely to authorize a procurement officer to take action "when events occur after the bids are received" that make cancellation appropriate, but 2 AAC 12.860(2) expressly permits cancellation based on "inadequate specifications", which is precisely what SFS has alleged, and I do not read 2 AAC 12.860(7) as limited to circumstances arising after bids are submitted. Several Alaska Supreme Court cases suggest that a procurement officer has inherent authority to cancel a solicitation prior to the actual award of a contract when it is in the best interests of the state to do so, even after the selection of the intended contractor and even though the underlying circumstances warranting the cancellation arose prior to the date bids were submitted. [2] Based on the regulations and these precedents, it does not appear that it would be unduly disruptive to the procurement process to provide procurement officers with discretion to determine whether in a particular case the circumstances are such that the general policy against acceptance of untimely protests should be relaxed. To suggest that the procurement system would be unduly disrupted by such a rule is to suggest that procurement officers are not be capable of identifying particular cases in which that general policy should be overborne. That argument, however, is belied by this department's administrative manual, which states:

Protests with regard to solicitation[s] should be considered timely if received at least ten (10) days prior to the bid or proposal opening date. This does not mean that if you receive a protest only five (5) days prior to the opening date that points out a serious error made by the State, that it should be ignored. In that instance, the opening date should be delayed and the error corrected or the solicitation cancelled, or some other appropriate action.

Alaska Administrative Manual, Sec. 81.230. This language encourages a procurement officer to consider the merits of an untimely protest, at least in the case of protests received prior to the due date for bid or proposal opening. [3] The principle inherent in this discretionary authority is that in some cases adhering to the general rule governing timely protests is less important than taking timely corrective action. To interpret AS 36.30.565(b) consistently with that principle would not be unduly disruptive. [4]

The circumstances of this case are illustrative. Obtaining the best possible information concerning fish returns is an essential part of the Department's mission, and the Department's mission is central to the overall welfare of the state's economy and the health of its fish resources. The protest alleges that a solicitation for the development of a new system for sonar fish counts, a key tool in the Department's mission, was structured in a manner that unduly restricted competition. Full, fair and open competition is important not only to ensure a fair price, but also to ensure that the items offered are of the desired quality. In the context of a competition for development of a new, technologically advanced sonar system, such competition is vital in order to obtain the best product. Given the fundamental importance of the state's fish resources to the overall health of the state's economy, it may be that in this particular case the state's interest in ensuring full, fair and open competition outweighs the importance of adhering to a procedural rule that is primarily intended to enhance overall administrative efficiency in the purchase of goods and services generally. [5]

I conclude that the term "good cause" in AS 36.30.565(b) includes not only "good cause" for a delay in filing the protest, but also "good cause" for considering the merits of the protest, even though it is untimely. In this case I find there was good cause to consider SFS's protest because: (1) the Department was notified of SFS's objections before the technical evaluation, and a formal protest was filed before the contract was awarded; [6] (2) the protest raised a substantial issue regarding the propriety of the solicitation; (3) the solicitation was for development of a unique product that was a critical component in the performance of an agency mission of significant statewide importance; and (4) appropriate remedial action could have been taken in the event the protest was found to have merit.

B.

Unduly Restrictive Specifications.

AS 36.30.060(c) mandates that specifications must "encourage competition in meeting the state's needs, and may not be unduly restrictive." In this case, proposals were due 21 days after the RFP was issued, and respondents were required to provide a prototype system meeting the minimum requirements for drylab testing three weeks after the due date. SFS contends that these timeframes were insufficient, and that they unduly restricted competition.

1.

Legal Standards.

Specifications are unduly restrictive when they are not reasonably necessary to satisfy the agency's actual needs. When a protestor asserts that specifications are unduly restrictive, the initial burden is on the agency to make a prima facie case that the specifications were reasonably necessary. If the agency meets that burden, the protestor must show that the agency was clearly mistaken. See, e.g., Container Products Corporation, Comp. Gen. No. B-280603.2 (November 4, 1998); Mossberg Corporation, Comp. Gen. No. B-274059 (November 18, 1996) (12 Comp. Gen. 109,719); Castle/Division of Sybron Corporation, Comp. Gen. No. B-228654 (October 9, 1987) (2 Comp. Gen. 101,166). In this case, the Department demonstrated that the requirement of prior development of a functional prototype was reasonably necessary, in order to ensure that the selected vendor could ultimately produce a system meeting the needs of the Department. Accordingly, at the hearing the burden of proof was on SFS to establish that the Department was clearly mistaken in setting the dates by which the proposals must be submitted and the previously developed system be submitted for drylab testing.

2.

AS 36.30.130(a) Does Not Control.

AS 36.30.130(a) states that "adequate" public notice must be given "at least" 21 days prior to the date proposals are due. In this case, public notice was provided 21 days before the due date. The Department argues that when notice is provided 21 days in advance of the due date for responses, AS 36.30.130(a) precludes a finding that the notice was insufficient.

AS 36.30.130(a) establishes the latest date by which notice must be provided, but whether the notice is "adequate" must be determined in light of all of the circumstances. To suggest that 21 days will in all cases be sufficient to provide "adequate" public notice is to prejudge the exigencies of the particular case. AS 36.30.060(c) requires that specifications [7] must not be "unduly restrictive", and in some cases, more than 21 days' notice may be required in order to ensure adequate competition. The argument that the time allowed for submission of proposals was insufficient has frequently been addressed on its merits by the GAO, even though federal law has similar provisions of law. [8] I conclude that while meeting the statutory minimum is necessary, it is not always sufficient. The public notice must be "adequate" in that it must provide sufficient time for adequate competition. When the statutory minimum time unduly restricts competition, it is not adequate. In any event, even if AS 36.30.130(a) were read to preclude a finding that the deadline for submission of proposals was unduly restrictive, it would not preclude a finding that the deadline for submission of prototypes for drylab testing was unduly restrictive.

3.

Additional Time Could Have Been Provided.

The Department's witnesses testified that it is a standard practice to issue proposals containing a due date 21 days after the date of issuance. In addition, they testified that the dates for drylab testing, submission of proposals, and issuing the RFP were set simply by working back from the date selected for the first field tests in June. This testimony suggests that once the date for beginning field work was selected, the RFP timeframe was dictated by the procurement process, not by the needs of the Department. Furthermore, the testimony and evidence suggest that the Department had considerable flexibility in terms of the timing of the procurement process and the date for final deployment of the new system. [9] I find that to the extent that the RFP provided insufficient time, the Department could have delayed the entire RFP for one year, issued the RFP at an earlier date, or amended the RFP to permit proposal submission or drylab testing at a later date.

The sufficiency of those timeframes, therefore, turns on whether they provided a reasonable amount of time for potential respondents to prepare proposals and to submit their prototypes. [10]

4.

Sufficiency of Timeframe.

SFS makes two arguments regarding the timeframe for the RFP. First, it argues that the time allowed for submitting proposals was insufficient, and that if additional time had been allowed other potential respondents would likely have submitted responsive proposals. Second, it argues that the date set for submission of prototype systems for drylab testing was insufficient. SFS was unable to provide fish tracking software for demonstration at the drylab testing date, and it argues that only a few additional weeks would have been required for it to complete the fish tracking software of its prototype system.

A.

THE TIME TO SUBMIT PROPOSALS WAS NOT CLEARLY MISTAKEN.

SFS argued that the practical difficulties in preparing a proposal of this nature are substantial, and that the time was insufficient in light of those difficulties. Patrick Simpson, the president of the firm, testified that the timeframe made it difficult, if not impossible, to decide whether to enter into a joint venture, identify potential partners, negotiate a joint venture agreement, and then to submit a joint proposal. Mr. Simpson also testified that the time spent on shipping system components from manufacturers to the potential respondents was problematic. SFS also argued that the no-bid letters of two potential respondents, three subsequent letters, and an inquiry regarding the possibility of a delay in the RFP closing date, indicated that the time allowed was insufficient.

The Department relied on evidence and testimony suggesting that the decision of the various potential respondents to respond, or not to respond, primarily reflected their individual business judgments. Hal Geiger testified that Simrad had indicated to him that Simrad preferred to develop and sell its own systems, rather than to develop customized systems for individual customers. Mr. Geiger also testified that for Simrad the relatively small size of the Alaska market was a disincentive to bidding.

The Department also relied on information made available to interested parties and to the general public well in advance of the date the RFP was issued. The Department had sent out a request for expressions of interest in November, and its intent to replace the existing Bendix system was the subject of discussion at a public workshop on riverine sonar technology sponsored by the Department and held in January, 1997. Mr. Geiger testified that he personally telephoned SFS after the workshop, and his notes state that he "summarize[d] the sonar workshop and explain[ed] that we are probably going to be getting some new sonar gear in the future." The Department also points out that no potential respondent requested additional time.

The propriety of the 21 day period for submission of proposals and the additional three weeks for submission of a prototype for drylab testing must be considered in light of the request for expressions of interest and the open discussions of the Department's needs and the available technology at the workshop. Although these prior events did not advise potential respondents of the specifications that would be incorporated in the RFP, they did give potential respondents an early opportunity to solicit potential partners, locate necessary resources, adjust their developmental priorities, or to otherwise lay the groundwork for a competitive response.

The evidence, and in particular the no-bid letters and subsequent letters, clearly establishes that for firms that had not substantially developed a system meeting the Department's minimum requirements prior to the date the RFP was issued, the deadline for proposal submission constituted a substantial hurdle. However, I conclude that SFS has not shown that the time allowed for submission of proposals was clearly mistaken. [11] In reaching this conclusion, I rely in particular on these factors: (1) the Department had issued a formal request for expressions of interest in November, more than two months prior to the issuance of the RFP; (2) workshop participants and SFS had been made aware, in formal and informal discussions with representatives of the Department, that the Department would be seeking a replacement system; and (3) no party except SFS expressly requested additional time. [12]

B.

THE TIME TO SUBMIT PROTOTYPES WAS NOT CLEARLY MISTAKEN.

Dr. James Jacobs testified at the hearing on behalf of SFS. He stated that he had been retained to develop the fish tracking software for SFS's prototype system, and that in an additional four "very ugly and intense weeks" the necessary software could have been developed, and that he had expected that the fish tracking software could be ready for the scheduled drylab demonstration date. Ken deVilleroy offered similar testimony. But neither of these witnesses had ever actually developed such software. Furthermore, Mr. Geiger testified on behalf of the Department that he had discussed with several users their procurement of split-beam systems and had been advised that in their experience, the development of the fish tracking software was a difficult, lengthy process that could take several years, even with well-staffed groups of programmers.

In my view, the testimony and evidence as a whole supports the conclusion that, given the availability of an existing split-beam sonar system, the development of fish tracking software sufficient to meet the minimum requirements of the RFP or for use at drylab testing in any given timeframe was largely a function of the resources devoted to that task. Clearly, the optimization of such software is a lengthy process, and the extended development period contemplated by the RFP appears to have been included largely for that purpose. The apparent inconsistency between the testimony of the SFS witnesses and of Mr. Geiger in this regard may reflect differing perceptions of the nature of the task contemplated: development of a minimally functional prototype for purposes of an initial drylab demonstration, versus development of a working system for deployment.

In any event, the relevant issue in this proceeding is whether the time for submission of the initial prototype was sufficient. On that issue, Dr. Jacobs testified that SFS expected to be able to meet the deadlines set forth in the RFP, even though they were tight. His testimony supports the conclusion that the timeframe for meeting the minimum requirements, at least with respect to software development, was tight but not unreasonably so. Based on the testimony as a whole, it appears that fish tracking software for the initial drylab demonstration could have been developed in a reasonably short period of time, but that fine tuning such a system to meet the needs of the Department for field use would be a lengthy, expensive process. It also appears that the time required for the development of fish tracking software to meet the minimum requirements and to be ready for demonstration at the scheduled date for drylab testing would reflect the amount of time, personnel and money invested in that effort, which is clearly a business decision. For these reasons, I conclude that SFS has not demonstrated that the Department was clearly mistaken in establishing the timeframe for drylab testing.

In this case, I recommend that the denial of the protest be sustained. However, in view of the cutting edge nature of the technology under consideration, I also recommend that the Department be requested to consider satisfying some or all of its needs for replacement sonar systems outside of the existing contract. [13]

DATED July 22, 1999.

______________________________ Andrew M. Hemenway Hearing Officer

[1]  return to text

Regulations governing the federal procurement process require protests aimed at solicitations to be filed prior to the due date for the proposals or bids. 4 C.F.R. §21.2(a)(1). However, under 4 C.F.R. §21.2(c), an untimely protest may be considered "for good cause shown, or where a protest raises issues significant to the procurement system." GAO decisions interpreting §21.2(c) allow untimely protests in the absence of good cause for the delay in filing the protest, when the issue raised involves a matter of general interest, and the questions raised have not been previously addressed by the GAO.

§9-101 of the Model Procurement Code [MPC] provides that protests must be filed within 14 days of the date the protestor learns of it. Most states with statutes based on the MPC use similar language. The MPC does not provide for any exceptions to the time limit for filing protests, nor have I found any other state statutes that do. However, an editorial note to the MPC states: "Jurisdictions may wish to allow consideration of protests filed after [the normal time] for good cause shown." The Alaska legislature apparently followed this suggestion in adopting AS 36.30.565(b), but the Department has provided no legislative history concerning either the MPC or §565(b) to indicate what criteria might establish "good cause". My own research found only one formal comment in the legislative history addressing this issue: a position paper from the Department of Natural Resources noted that "Sec. 36.30.565 may provide for the procurement officer to allow an untimely protest to be reviewed which would give us the flexibility to review those that have merit." This observation by an affected agency appears to support a broad interpretation of "good cause".

[2]  return to text

See, e.g., Paul Wholesale v. State, Department of Transportation, 908 P.2d 994, 1104 (Alaska 1995); Dick Fischer Development v. State, Department of Administration, 838 P.2d 263, 266-67 (Alaska 1992); Dick Fischer Development No. 2, Inc. v. State, Department of Administration, 778 P.2d 1153 (Alaska 1989).

[3]  return to text

The Department argues that the chief procurement officer has previously interpreted the term "good cause" in AS 36.30.565(b) to mean "good cause for the delay in filing the protest." However, the issue has not previously been addressed by the commissioner, who bears primary responsibility for the interpretation of the applicable statutes. The Department also cites a 1988 memorandum of advice to the Department from its assistant attorney general, which states that "An untimely protest may be considered if the protestor shows good cause for the untimely filing". However, the question addressed in that memorandum was whether the time for filing a protest should be computed under the computational rules set out in the Alaska Rules of Civil Procedure, or under AS 01.10.080. The quoted language is not germane to that issue and does not preclude a broader reading of "good cause". In any event, whatever deference the courts or an agency may owe to a formal opinion by the attorney general, a memorandum of advice from counsel for a department to its commissioner as to the interpretation of a particular provision of law does not control the commissioner's interpretation of the statutes he is charged with administering. The commissioner retains statutory authority to accept or reject the advice of counsel on such matters and to adopt a reasonable interpretation in accordance with the commissioner's view of the policy issues involved, the legislative history, and the limits of administrative discretion.

[4]  return to text

Procurement officers have authority to award a contract after a protest has been filed, unless it would be contrary to the state's best interests. AS 36.30.575. This discretionary authority offers additional assurance that the acceptance of an untimely protest will not unduly disrupt or prevent the timely procurement of needed goods and services.

[5]  return to text

In its protest report, the Department stated:

It is not in the state's best interest to develop and identify a scope of work, develop an RFP, advertise, solicit vendors, evaluate proposals (all at considerable cost, time and effort) and then cancel the entire effort to address changes in the scope of work identified in a[n untimely] protest.

This argument applies equally to all untimely protests, and if accepted would preclude any consideration of untimely protests at all. But AS 36.30.565(b), 2 AAC 12.860, and the Administrative Manual all support the consideration of at least some untimely protests. In any event, the argument is not persuasive. Cancellation is not always necessary when a protest is found to have merit. An amendment to the RFP, with resubmission of proposals, is often possible. Even when a solicitation is cancelled, preparatory work is not wasted: a resolicitation incorporates the work leading up to the prior solicitation. In any event, determination the state's best interests in a particular case must weigh the additional cost, expense and delay of a resolicitation or other corrective action against the risk of adverse consequences resulting from a potentially defective solicitation.

[6]  return to text

Testimony at the hearing established that SFS knew, or should have known, that it could not submit a responsive proposal, and it could have submitted a protest or requested an extension in a timely manner. It failed to act with reasonable diligence in this respect. However, in the context of discussing whether an untimely protest should be considered, the fact that the protestor did not act with reasonable diligence in the first place may be taken as a given. To take the lack of such diligence as disqualifying consideration of the protest under AS 36.30.565(b) would be to construe the term "good cause" as limited to good cause for delay. I conclude that while a protestor's lack of diligence may be considered, it is not a disqualifying factor.

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AS 36.30.060(d) defines "specifications" as including "requirements for inspecting, testing, and delivery."

[8]  return to text

15 U.S.C. §637(e)(3)(B); FAR §5.203(c). See generally, OPS, Inc., No. B-271835 (July 31, 1996); Trimble Navigation, Ltd., No. B-2747913 (July 13, 1992) (7 Comp. Gen. 106,752); Transtar Aeropace, Inc., Comp. Gen. No. B-239467 (August 16, 1990) (5 Comp. Gen. 104,635); Control Data Corporation, No. B-235737 (October 4, 1989) (4 Comp. Gen. 103,614). In these cases, the issue addressed is not whether the specification is "unduly restrictive", but rather whether the agency erred in refusing to allow additional time in response to a request to extend the deadlines. Meeting the statutory minimum established that the initial deadline was not per se inadequate, but left open the possibility that it was insufficient under the particular facts of each case.

[9]  return to text

Hal Geiger testified on behalf of the Department that its existing Bendix units were initially brought into use in the 1970's and were susceptible to breakdown, and that the Department could not continue indefinitely to rely on its inventory for replacement parts. In addition, he testified that the individual who had designed the system and had been primarily responsible for the maintenance and enhancement of the state's existing units was elderly and could not continue indefinitely to perform the field work associated with system maintenance and enhancement. But Mr. Geiger also testified that the Bendix system was not the only one used by the Department, and that the Department could only speculate as to when any given unit might fail, when its inventory would be exhausted or when it would need to have a new system on line. The testimony as a whole clearly suggests that the Department was acting in a prudent manner, well in advance of any perceived crisis.

[10]  return to text

In its initial response, the Department argued that the short timeframes provided for cost control. However, no evidence was submitted to support that argument at the hearing, and counsel did not rely on it in closing. Based on the submissions prior to the hearing, I find that the timeframes did not assist in controlling the cost of the contract to be awarded. With respect to the cost of development, it is apparent that any costs incurred prior to the award of a contract in developing a system meeting the design specifications of the Department would, at least initially, be at the risk of the proposer. It was entirely conjectural whether, or to what extent, any such costs might be included in the cost component of the proposals submitted. Whether a vendor had developed a system meeting the minimum requirements prior to the solicitation, or developed one after the solicitation in time to meet the timeframes set forth in the RFP, the vendor would expect to recoup some portion of the cost of development through sales to the state of the finished product in Phase II of the procurement, although those sales were not assured. If the Department wanted to limit the cost of Phase I, or to avoid incurring pre-submittal development costs, it could have placed a greater emphasis on cost in the evaluation process, capped the amount it was willing to pay in Phase I, established express limits on the chargeable development costs to be allowed in Phase II of the contract, or otherwise dealt with that problem directly.

The Department also argued that it wanted to ensure that the selected contractor would be able to produce a fully functional system at the conclusion of the process, and it did not want to open the competition up to conceptual or otherwise "undeveloped" systems. While this concern justifies a requirement that all proposals must consist of "previously developed" systems, the Department offered no argument, testimony or evidence to support the conclusion that development prior to the dates selected for proposal submission or drylab testing would be a greater indicia of reliability than development which was completed at some later date. In any event, so long as a system had only been "developed" but not marketed or actually subjected to use in the field, the actual performance of the system would remain unknown. While the prior development of software was "crucial", in that the system must have been demonstrably functional at the time of evaluation, there appears to be no reason why software development could not have occurred after the solicitation was issued, so long as it was completed prior to the date of proposal submittal and the evaluation process. Finally, the Department submitted no evidence to suggest that the evaluation process itself could not have been structured to provide a sufficient opportunity to determine the reliability of the software proposed, or to otherwise take into consideration as an evaluation factor the degree of development prior to proposal submission.

[11]  return to text

Three letters were submitted by SFS at the hearing. Although the letters are hearsay, they were admitted by the hearing officer. Two of the letters come from the Applied Research Laboratory at Pennsylvania State University [ARL] and Simrad, which had previously submitted no-bid letters. ARL's letter states that the time frame did not provide sufficient time for ARL to decide whether it wanted to pursue the contract, given the investment that would have been necessary to prepare a proposal and a prototype. It adds that if more time had been available, "ARL...would at least have considered the investment needed to make a proper response." The Simrad letter states that "Simrad had intended to bid on this project, however at that time we did not meet the minimum requirements.  In hind site [sic], given more time.  Simrad would have reconsidered its position of a no bid." A third letter, from Precision Acoustics Systems, indicates that it did not bid because it was a small firm and did not have the necessary resources, but that it would have considered a joint venture or other option if more time had been available.

The Simrad letter suggests that the firm has had second thoughts about its decision, based on its subsequent development work. The ARL letter states that a decision whether to submit a proposal, given more time, would have been a business decision. The Precision Acoustics letter indicates it would have considered a joint venture if more time had been available. The ARL and Simrad letters are consistent with the no-bid letters, and I deem them credible. However, because the letters are hearsay, and have not been subject to cross-examination, I afford them less weight than the no-bid letters. If these letters had been submitted in support of a request for an extension of time, it might have been an abuse of discretion to deny an extension. However, I do not find them sufficient to persuade me, in light of the factors mentioned above, that the Department was clearly mistaken in establishing the time frames set forth in the RFP.

[12]  return to text

Three days before proposals were due, the Department received an email from a potential respondent stating, "Is there a possibility of an extension?" SFS argued that this was a request for an extension. While the email may have been intended by the sender to constitute a request for an extension, the Department did not abuse its discretion in treating it as a request for information about the current status of the RFP.

[13]  return to text

Testimony at the hearing indicated that the Department is willing to cooperate with SFS, or any other parties, in the identification of and provision of access to sites for field testing at their own expense of prototypes developed outside of this contract, and that it would consider purchasing systems from other vendors at the conclusion of Phase I of the existing contract.