Date: January 14, 1992

P.S. Protest No. 91-49

MONARCH MARKING SYSTEMS

Solicitation No. 104230-91-A-0103

DECISION

Monarch Marking Systems ("Monarch") timely protests award of a contract for 60,000 Postage Validation Imprinters ("PVIs") ¹ to MOS Scale International, Ltd. ("MOS") under Solicitation No. 104230-91-A-0103, issued April 12, 1991, by the Office of Procurement, Headquarters. Monarch claims that award to MOS was improper because its proposal was technically unacceptable, the proposals were improperly evaluated, and MOS is not a responsible offeror.

In October, 1986, the Postal Service competitively issued Solicitation 104230-87-B-0172 for engineering models of prototype PVIs. Solicitation -0172 contained a detailed technical specification describing the Postal Service's needs for the PVI. ² Several companies, including MOS and Monarch, were awarded contracts to develop the engineering models. The Postal Service determined that the PVIs of five companies, again including MOS and Monarch, had passed the tests set out in Solicitation -0172. After completion of the development contracts, the Postal Service made changes to the technical specifications and ultimately issued the instant solicitation.

In April, 1991, the requiring activity obtained from the Postal Service Board of Governors capital funding in the amount of $34.7 million for the acquisition of 60,000 PVIs. As stated on its cover page, competition under Solicitation -0103 was restricted to the five named firms that had successfully met the technical requirements under Solicitation -0172. Section M.1, CONTRACT AWARD, stated that the Postal Service would "award a contract resulting from this solicitation to the responsible offeror whose proposal conforming to the solicitation will be most advantageous to the Postal Service, cost or price and other factors specified elsewhere in this solicitation considered." Section M.2 set forth the evaluation criteria as follows:

a. Award will be made to the responsible offeror who submits the best combination of Technical Proposal, Business Proposal (cost/price), Business/Management Proposal (if applicable), and other factors considered. The primary areas to be used in determining which proposal is most advantageous to the Postal Service are listed below in descending order of importance:

All five (5) PVI models previously tested and to be delivered here are considered to be technically equivalent. Offers will be determined to be technically acceptable or unacceptable. Since there are no evaluation variables other than price, only price will be used to select the contractor.

The contracting officer issued several amendments to this solicitation, two of which made minor changes to the technical specifications. Amendment A02 responded to written questions submitted by the various offerors. Several questions concerned the evaluation procedures. One offeror asked what "other factors" might be considered during the evaluation. The contracting officer responded that an unreasonably low price would be an example of "other factors." Another offeror asked whatcriteria would be used to determine whether an offer was technically acceptable. The contracting officer replied that "[a]n acceptable Technical Proposal clearly describes and defines the contractor's capability to meet the requirements of [the technical specifications]." Another offeror asked the contracting officer to clarify the portion of the solicitation that stated that only price would be used to select the contractor. The contracting officer reiterated that "[p]rice is the only factor used in selecting a contractor providing the proposal is technically acceptable and there are no other factors to be considered."

Several of the solicitation's technical specifications are pertinent to the protest. Section 3.10, Electrical Requirements, Loss of Phase, required that the PVI perform properly during a three cycle drop in power at 60 Hz. Section 3.3.1.4, Dimensions, required the PVI not to exceed 10 inches in width, 9 1/2 inches in height, and 17 inches in depth. Section 3.5, Labels, set forth the dimensions of the labels as not to exceed 3.0 inches by 1.38 inches and stated that "[t]he label carrier material shall be wound on a 3-inch, or smaller, diameter core, 4 inches or less in width, and shall hold at least 1,000 labels." Figure 5 of Section 3.4, Label Data, provided two options for the label to feed through the device. ³ Section 3.5.2, Label Stock Specification, required the contractor to provide a specification for the label stock, including requirements for such things as paper type, adhesive, and shelf life, to be written in accordance with the technical specifications. Section 3.11, Environmental Characteristics, required the PVI to operate within various temperature and humidity ranges. The specification also required the labels to meet certain conditions with respect to print reflectance -- the measurement of reflectance of the bars and spaces of the bar code. Finally, Appendix D, Hardware Maintenance Requirements, section 5.1.1, stated that Postal Service employees would normally perform the operator servicing activities required to keep the PVI operational, such as replacinglabel stock. The offerors were to specify all such recommended activities. In this context, the specification stated that "NO task shall require the use of hand tools." (Emphasis in original.) The specification did not define hand tools.

All five eligible offerors submitted proposals. Written discussions were held with each to determine technical acceptability. On June 28, the evaluation committee informed the contracting officer that evaluations of the technical and management proposals were complete and that all proposals were acceptable. Best and final offers ("BAFOs") were solicited for submission on July 1. MOS was the apparent low offeror, at $219.95 per unit. Monarch's offer was second low, at $419.00 per unit. On July 2, a pre-award survey was performed on MOS. On July 8, the contracting officer asked MOS to verify that it had not made a mistake in its price, noting that there was a significant difference between MOS' price, the Postal Service estimate, and the other prices offered. On July 12, MOS responded, stating that it had not identified any errors and its proposal should be considered "as is." The contracting officer awarded the contract to MOS on July 19. On July 23, Monarch attended a debriefing on the award.

On August 2, Monarch filed its protest on the following grounds: 1) MOS' equipment will not perform according to the material technical specifications of the solicitation; 2) the contracting officer failed to make a determination of MOS' technical acceptability; 3) proposal evaluations were faulty because the contracting officer failed to consider any factors other than price and improperly conducted discussions after BAFOs with the successful offeror; 4) the contracting officer accepted a PVI that had not been prequalified; and 5) the contracting officer's determination that MOS is a responsible offeror is unreasonable because MOS lacks the financial capability and know-how to perform and is not a manufacturer or regular dealer as required by the Walsh-Healey Act. We set forth below the various submissions on an issue-by-issue basis.

Technical Specifications

Monarch contends that MOS' offered unit will not meet the solicitation's specifications. First, Monarch alleges that the MOS unit's ⁴ power supply is incapable of sustaining performanceduring a three cycle drop in power, as required by õ 3.10 of the specifications. According to Monarch, such a failure would cause poor quality bar code images, and incomplete printing of the label.

Next, Monarch claims that the MOS equipment cannot comply with the label printing format requirements. ⁵ Monarch alleges that MOS' offered device has a 2" print head, but the printer "may lack the capability of printing . . . in the serial mode." Monarch also contends that rolls of 1000 three-inch long labels will not fit into the MOS unit without either a change in the unit's outside dimensions or a reduction in the size of the label core. The former, it claims, would exceed the PVI maximum dimension specification, while the latter will cause the labels to tend to curl, causing the device to jam or otherwise malfunction.

Monarch also alleges that MOS's proposed label stock will not be of sufficient quality to meet the specifications' requirements for shelf life and print reflectance. It reaches this conclusion based on MOS' prices for label stock. Finally, Monarch contends that the MOS equipment violates the maintenance specifications. Monarch alleges that the MOS unit will require the use of a brush or vacuum to keep it free from dust, contending that either item would be an impermissible "hand tool." In the absence of such maintenance, it contends that each unit will have to be mailed back to MOS three times a year for cleaning, at great expense. ⁶

Responding to the protest, the contracting officer states that the PVI proposed by MOS is not the same as its prototype. He states that MOS' technical proposal indicates that MOS' unit will comply with all the technical specifications, including the three cycle dropout requirement; printing in the serial mode under option 1; the maximum physical dimensions; accommodation of rolls of at least 1000 labels; ⁷ and compliance with requirements for label stock. ⁸ In addition, the contracting officer notes that all of these requirements will be verified at the first article test. Finally, the contracting officer states that MOS limited operating services to the cleaning of the print head, sensors, and outside enclosure, proposing the use of an alcohol swab for the print head and a soft brush for the sensors. The Postal Service considers neither the swab nor the brush to be "hand tools."

MOS submitted comments to the protest and to the contracting officer's statement. MOS asserts that it did not propose its commercial thermal printer in response to this solicitation, instead offering a PVI specially designed to meet the requirements of the Postal Service. MOS points out that many of Monarch's allegations with respect to MOS' ability to meet the technical specifications are based only on assumptions, not facts.

Commenting on the contracting officer's statement, Monarch contends that his statement that first article testing will verify whether MOS' unit will meet the three cycle dropout requirement or the label stock requirement is an insufficient response to its allegations. It observed the Postal Service's testing of its own unit and is aware that the Postal Service tested both three cycle dropout and label performance requirements. ⁹ It states that it does not know whether the Postal Service tested the MOS unit for these characteristics, but if tested, Monarch believes that the MOS unit must have failed. Even assuming that the MOS unit passed the tests, Monarch contends that the Postal Service has no guarantee that the currently

offered unit will meet the technical requirements, because MOS' proposed unit is not the same as its prototype. ¹⁰

Monarch submitted further comments following its protest conference. It contends that at its debriefing, a Postal Service representative stated that MOS' prototype PVI was equivalent to its commercial printer. Monarch asserts that its own tests and those of an independent laboratory have verified that the MOS commercial unit cannot pass the three cycle dropout test. ¹¹ It reiterates that the contracting officer has failed to state unequivocally that the MOS prototype unit passed the three cycle dropout test and concludes that the Postal Service never tested the MOS unit for this feature.

MOS was afforded a protest conference and subsequently submitted comments which contend the MOS unit inadvertently sent to Monarch was its engineering model, not its commercial printer. MOS submits that Monarch's assumptions about the technical capabilities of MOS' unit are faulty because they are based on the technical capabilities of MOS' commercial unit, not the unit supplied under the development contract or to be supplied under this solicitation. MOS asserts that the Postal Service did not request it to make any corrections relating to the three cycle dropout requirement. In any event, MOS maintains that whether its unit meets the technical requirements is a contract administration question and not a basis for protest. ¹²

Technical Acceptability

Monarch alleges that although the solicitation states that all five models previously tested were considered technically equivalent, it was still necessary for the contracting officer to determine whether each offer was technically acceptable. Monarch contends that the contracting officer's apparent failure to recognize that the MOS PVI does not meet all technical specifications is evidence that no technical acceptability determination was made. ¹³ Furthermore, Monarch alleges that even if the contracting officer did make such a determination, there was no rational basis for the conclusion that MOS' offer was technically acceptable.

The contracting officer asserts that he did make a technical acceptability determination. A technical evaluation committee evaluated each technical and business/management proposal, finding all offers technically acceptable. The contracting officer maintains that he relied on the committee's review process and recommendations to determine that the proposed equipment would meet all technical specifications. ¹⁴

Evaluation of Proposals

Monarch alleges that the Postal Service failed properly to apply the solicitation's evaluation factors to MOS' proposal. Citing POVECO, Inc., P.S. Protest No. 85-9, May 21, 1985, Monarch asserts that the contracting officer is required to adhere to those criteria set forth in the solicitation, or otherwise inform all offerors of any changes in the criteria. Monarch contends that the contracting officer was obligated to consider factors "other than price" and failed to do so. Monarch points to MOS' "unreasonably low price" as such a factor, noting the discussion to that effect in Amendment A02.

Monarch alleges that the contracting officer did not perform an adequate price analysis as the Procurement Manual ("PM") required. It points to the differences between MOS' offered price of $219.00 per unit, Monarch's offered price of $419.00 and the Postal Service estimate of $578.00, contending that MOS' price is unreasonably low on its face and must be substantially lower than

its production costs and its dealer prices for its commercial units. Monarch alleges that, given these disparities, the contracting officer should have conducted further analysis. It concludes, however, that even if the contracting officer performed adequate price analysis, his acceptance of MOS' price proposal was unreasonable.

Monarch also complains that the contracting officer improperly held discussions solely with the awardee. Monarch cites two PM provisions in support of its position. PM 4.1.5 g.(1) states, in part, that "[i]f discussions are held with one offeror, discussions must be held with all offerors in the competitive range." PM 4.1.5 f.(2) states in pertinent part:

Whenever there is uncertainty as to the pricing or technical aspects of the most favorable initial proposal, award may not be made without discussions, unless the uncertainty can be resolved by clarification.

Monarch contends that the contracting officer's request for verification of MOS' price constituted discussions, as Monarch understood from its debriefing that the request stemmed from a suspected mistake in MOS' entire pricing structure. Monarch alleges that where verification is essential to determine the acceptability of proposals, the verification constitutes a discussion. ¹⁵ Monarch asserts that the other offerors were prejudiced by being denied the opportunity to revise their proposals after BAFOs.

The contracting officer states that award was proper and in accordance with the stated evaluation factors. He states that he determined MOS' price to be both fair and reasonable. ¹⁶ He notesthat the PVI had never been purchased in production quantities before and, consequently, lacked prior pricing history. ¹⁷ As a result, in making the determination of price reasonableness, he used price analysis and price competition in accordance with PM 5.3.3 b. and 5.3.3 c., respectively. The contracting officer states that he did suspect the possibility of a mistake due to "significant differences" between MOS' price, the Postal Service estimate, and Monarch's proposed price. Therefore, prior to award, as PM 4.1.3 f. required, he asked MOS to verify its price. The contracting officer disagrees that its request for verification of MOS' price constituted discussions, stating that he properly followed the procedures in PM 4.1.5 f.5. to resolve a suspected mistake. ¹⁸

MOS comments that the solicitation clearly states that "only price will be used to select the contractor," thereby refuting Monarch's allegations that the contracting officer failed to properly apply the evaluation criteria. MOS asserts that Monarch has failed to meet its obligation to show that the price reasonableness determination was clearly unreasonable, fraudulent, or made in bad faith. ¹⁹

MOS contends that even if Monarch is correct in assuming that MOS' proposal is priced below cost, that is not a basis for overturning the award. ²⁰ In any event, MOS asserts that it is inappropriate to compare its commercial prices with its offered price, as there is an enormous difference between commercial procurements and the Postal Service procurement. Finally, MOS contends that, in this case, the Postal Service estimate was not a suitable guideline for determining the reasonableness of an offeror's price.

MOS agrees that the contracting officer did not hold improper discussions and alleges that Monarch's reliance on ABT is unfounded, stating that the contracting officer did not request, nor was he provided, information essential for determining the acceptability of its proposal. In ABT, the contracting officer asked the offeror to "clarify" changes it had made in its technical proposal. Here, MOS merely verified its price. ²¹

In rebuttal comments, Monarch interprets the contracting officer's admission that there were significant differences between MOS' price, the other offered prices, and the Postal Service estimate as evidence that the contracting officer should have performed a more detailed price analysis. Additionally, Monarch alleges that the other vendors were more experienced in the thermal printer field than MOS and this should have cast further doubt on the validity of MOS' price and caused the contracting officer to place greater weight on the competitive prices of the other four vendors. Also, Monarch contends that the Postal Service should have relied upon its extensive experience in purchasing other bar code printing equipment in determining the reasonableness of MOS' price. Finally, Monarch maintains that the Postal Service could at least have compared the bills of materials which each offeror was required to submit with its proposal. Monarch concludes that had the contracting officer used any of these methods he would have found MOS' price to be patently unreasonable.

In its post protest conference comments, Monarch contends that it has disassembled MOS' commercial thermal printer, created a bill of materials, and concluded that MOS' cost for producing the PVI, exclusive of assembly, labor, overhead and profit, must exceed its offered price. Monarch alleges that, instead of giving further scrutiny to MOS' price, the contracting officer requested a waiver, showing that the contracting officer's pricing determination was not the sound exercise of business judgment and was clearly unreasonable. ²²

MOS replies that the purpose of conducting price analysis is to prevent the Postal Service from paying exorbitantly high prices and, thus, is intended to protect the Postal Service, not contractors. MOS contends that Monarch distorts this purpose. ²³ MOS asserts that, having asked it to verify its price, the contracting officer did not act unreasonably in discounting the difference between MOS' offered price and the Postal Service estimate. MOS contends that the Postal Service estimate was extrapolated, using learning curve analysis, from the cost of a PVI-like component (priced at $2000.00) of a much larger system from an earlier development contract. The production specification for the PVI was issued more than three years later. MOS contends that the contracting officer could easily have halved the estimate, based on this analysis.

In his final response, the contracting officer states that MOS' price proposal itemized the cost elements in support of its price. He states that the elements included material, labor, overhead, general and administrative costs, as well as profit. He notes that the cost elements fully support MOS' price and are significantly less than the cost figures estimated by Monarch. The contracting officer also notes that MOS, having been alerted to the possibility that it may have made a mistake, had the opportunity to withdraw its proposal. The contracting officer concludes that MOS, by confirming its price, assumed all responsibility for profit and loss under the contract.

Prequalification

Monarch contends that the Postal Service, having made material changes in the PVI specifications after the prequalification testing, should have re-tested the prequalified units to ascertain whether they met the new specifications. Monarch characterizes the label format changes as "key functional requirements." Monarch alleges that option 1, printing serially, is more difficult than parallel printing, and that to print in that manner MOS' PVI requires a software change and a more robust power supply. ²⁴ Monarch alleges, without identifying any limitation in the solicitation to this effect, that the changes MOS would have to make to its unit would constitute impermissible post-award material changes to MOS' prequalified unit. Monarch asserts that the Postal Service should have re-tested all the prequalified units or should have reviewed data on the vendors'commercial thermal printers to determine whether they could meet the new requirements. ²⁵

Monarch contends that by accepting an untested unit, the Postal Service is giving MOS a "second bite at the apple," and concludes that it is improper for the Postal Service to accept a MOS unit different from the one tested in the development contracts. ²⁶

In its rebuttal comments, MOS contends that Monarch mischaracterizes the prequalification phase of the procurement as prequalifying the product rather than the manufacturer. MOS points to the solicitation's cover page as stating that the procurement was limited to firms that have developed and testedthe PVI. ²⁷ Citing PM 2.2.2 b.2.(b), MOS also contends that there would be no requirement for a first article test if the product were prequalified. ²⁸ MOS points out that Monarch has long been aware that the prequalification phase was to determine eligible offerors, not products. In any event, MOS concludes that even if the Postal Service had prequalified the PVIs, Monarch has not shown that the contracting officer's decision to accept MOS' offer was arbitrary or capricious. ²⁹

Citing PM 4.5.4 b., MOS suggests that Monarch's post-award complaint that the change in the technical specifications warranted further prequalification testing is untimely, as an alleged deficiency in the solicitation that should have been apparent before the date set for the receipt of proposals.

The contracting officer agrees with MOS that Monarch's complaint on this point is untimely. He notes that the July 27 letter notified vendors that a revised specification would be issued prior to the field test. The contracting officer states that the Postal Service never intended that the PVIs proposed for the production procurement would be identical to the prequalified units, as evidenced by the fact that the specifications contained in Solicitation -0103 were changed in many respects from those in the development contracts.

Monarch disagrees that the prequalification phase of the procurement was for the purpose of prequalifying vendors and not products. It interprets the language in Section M.2 of the solicitation to mean that only the previously tested units are "to be delivered." It also points to the three year process for developing and testing the PVI prototype units, which focused primarily on technical issues. Monarch contends that all the milestones during the prequalification process referred to the product, not to vendor capability, and that all participants understood that the units tested would be the units offered for the production quantity procurement.

Apparently arguing in the alternative to its earlier contention that material changes were made to the specifications after completion of its prequalification tests, Monarch's later comments assert that none of the technical changes in the Postal Service's specifications required vendors to propose PVIs materially different from the ones tested. Therefore, it concludes, the only reason for MOS to propose a PVI different from the unit tested was to offer a lesser product at a price substantially lower than that at which MOS could have offered its prequalified unit. It concludes that by accepting a PVI for which there is no test data regarding its reliability, the Postal Service risks encountering delays should MOS' PVI fail first article tests. Returning to its initial contentions, Monarch maintains that even if the prequalification were of vendors, not of units, MOS would have had to make such major modifications to its prototype unit to meet the revised specification that the Postal Service could not have determined that MOS was a prequalified vendor without testing the modified unit.

MOS reiterates that the solicitation clearly limited participation to companies that had previously been awarded development contracts and maintains that it would be ludicrous for the Postal Service to purchase engineering models or prototypes in production quantities.

Responsibility Determination

Next, Monarch challenges the contracting officer's affirmative determination that MOS is a responsible offeror. Monarch asserts that MOS is a small company with no experience in manufacturing PVIs and little experience in assembling them. Thus, Monarch alleges that MOS does not have the required "organization, experience, accounting and operational controls, technical skills, production and property controls, and quality controls." PM 3.3.1 5. Monarch contends that it is familiar with MOS' current capabilities and experience in producing shipping manifest systems and concludes that the contracting officer could not have concluded that MOS' management proposal reflected adequate personnel or experience to perform. It contends that MOS has a small work force of only sixty people and will be required tohire and train a significant number of employees to produce PVIs in a timely manner. Monarch also contends that MOS lacks the financial capability to make necessary expansions in space, inventory, equipment, and employees, to produce the PVIs.

Monarch alleges, on information and belief, that MOS cannot meet any of the responsibility standards listed in the PM and that the contracting officer either made no responsibility determination or had no evidence upon which to base such a determination. It concludes that the contracting officer's decision to award, based on price alone, without making a responsibility determination potentially will lead to default or other unsatisfactory performance. ³⁰

Finally, Monarch alleges that MOS does not qualify as a manufacturer of PVIs under the Walsh-Healey Act, 41 U.S.C. õõ 35-45, contending that MOS merely purchases parts and components and assembles the units. Monarch asserts that assembling functions do not qualify MOS as a manufacturer under the Walsh-Healey Act and sets forth several arguments in support of its position. ³¹

In his statement, the contracting officer disagrees with Monarch's assessment of MOS' responsibility. He states that the evaluation committee examined MOS' management proposal and found it to reflect satisfactorily that MOS had the experienced personnel, technical know-how, equipment, and space to perform the contract. The Quality Assurance Division of the Office of Technical Support performed a pre-award survey at MOS' facilities and studied MOS' technical capability, production capability, plant facilities and equipment, purchasing and subcontracting, quality assurance, transportation, plant safety labor resources, performance record, ability to meed the schedule, installation and environmental issues. The survey team recommended that MOS be determined responsible. Similarly, the Contract Pricing Division of the Office of Procurement performed an analysis of MOS' financial statement and concluded that MOS has the necessary financial resources.

In its comments, MOS claims that Monarch has neither shown that the contracting officer's responsibility determination was fraudulent or made in bad faith, nor claimed that definitive responsibility criteria were not met. Thus, MOS asserts that Monarch has not met the legal standard to overturn the contracting officer's responsibility determination. ³²

In its comments filed subsequent to its protest conference, Monarch asserts that MOS will sustain a loss of $5.8 million on the performance of this contract, an amount almost equal to its annual revenue. Monarch submits an affidavit of its Vice President of Finance, alleging that based on Dun & Bradstreet and TRW reports, MOS cannot withstand a loss of that magnitude. Monarch asserts that the contracting officer could not have reasonably found MOS to have the financial ability to perform. ³³

In response, MOS maintains that there is no factual basis for Monarch's contentions, asserting that the assumption that MOS will lose almost $6 million on this contract is erroneous. It maintains that it is an established supplier to the Postal Service, that it was the original developer and manufacturer of the IRT, of which the PVI will be a part, and that its current financial data shows that it is responsible, as does the pre-award survey.

Discussion

Technical Specifications

Monarch complains that MOS cannot provide a PVI that meets certain of the solicitation's technical requirements. Although couched in terms of a challenge to the award, the matter is actually one of contract administration. "[T]he level of performance required of a contractor during contract performance is a matter of contract administration and is not properly before our office in a protest proceeding." Transnorm System Inc., P.S. Protest 90-58, October 26, 1990; Nelson Window and Glass Company, P.S. Protest No. 86-44, July 25, 1986. The technical specifications which Monarch asserts MOS cannot fulfill are performance requirements with which MOS has offered to comply. We have reviewed MOS' proposal. That review indicates that MOS responded fully to the solicitation, and did not merely restate verbatim the solicitation requirements. ³⁴ See H & B Telephone Systems, P.S. Protest No. 83-61, February 6, 1984. MOS' technical proposal was fully sufficient. C.f. Apec Technology Limited, P.S. Protest No. 88-23, June 30, 1988; Carini's, Inc., P.S. Protest No. 83-65, December 13, 1983.

The Postal Service's acceptance of MOS' offer obligates MOS to supply a PVI in accordance with the solicitation requirements. Whether MOS actually fulfills its obligation is a matter of contract administration. Given the tests performed on MOS' prototype PVI, the contracting officer could reasonably conclude that MOS was capable of supplying a conforming PVI.

Technical Acceptability

Monarch contends that the contracting officer failed to make a determination that MOS' offer was technically acceptable. As a general rule, "[t]his office will not substitute its judgment for that of the contracting officer or disturb his evaluation of an offer's technical acceptability unless it is shown to be arbitrary or in violation of procurement regulations." Lista International Corporation, P.S. Protest No. 90-47, September 11, 1990. "In reviewing a technical evaluation, we will not evaluate the proposal de novo, but instead will only examine the contracting officer's evaluation to ensure that it had a reasonable basis. . . . The protester bears the burden of showing that the technical evaluation was unreasonable." Computer Systems & Resources, Inc., P.S. Protest No. 86-4, March 27, 1986 (citations omitted).

We have discovered no factual basis for Monarch's contention. The contracting officer has demonstrated that an evaluation committee evaluated the technical and management proposals of allofferors. Each offeror was requested to respond to technical issues in the form of written discussions. The evaluation committee report states that "[b]ased upon the initial submission and responses to questions, the evaluation committee has found all of the proposals submitted as acceptable." The evaluation committee's recommendation was not arbitrary or in violation of procurement regulations and is reasonably supported by the record. York International Corporation, supra. Monarch has failed to show either that the contracting officer failed to make a technical acceptability determination or that the evaluation should be overturned. The fact that Monarch disagrees with the contracting officer's determination that MOS' proposal was technically acceptable does not render the determination unreasonable. General Exhibits, Inc., P.S. Protest No. 85-77, December 5, 1985. ³⁵

Evaluation of Proposals

Monarch alleges several flaws in the evaluation process. Our regulations state that "[p]roposals must be evaluated in accordance with . . . the evaluation criteria specified in the solicitation." PM 4.1.4 a. Here, the solicitation was limited to those offerors that had tested engineering models of the PVI under earlier developmental contracts. The solicitation stated that the five previously tested PVIs were found to be technically equivalent, and that technically acceptable offers would be evaluated for award only on the basis of price. Where no other evaluation factors are listed, award based on price alone is not improper. Bell & Howell Federal Government Sales, P.S. Protest No. 91-24, April 15, 1991. Since price was the sole evaluation factor and the lowest priced offeror was awarded the contract, the evaluation was correct.

Monarch is troubled by MOS' "unreasonably low price," concluding that the contracting officer failed to conduct adequate price analysis. Our regulations state that "[w]henever adequate price competition has been obtained, comparison of proposed prices and Postal Service estimates will ordinarily suffice to meet price analysis requirements." PM 5.3.3 b.3. Price competition exists if "[t]wo or more independent and responsible offerors submit price proposals meeting the solicitation's requirements . . . and [t]he solicitation identifies price as a significant evaluation factor for contract award." The contracting officer determined that there was adequate competition upon which to base his priceanalysis because all five vendors responded to the solicitation. ³⁶

He also determined that MOS' price was fair and reasonable. A contracting officer's determination of price reasonableness is an exercise of business judgment. A.B. Dick Company, Comp. Gen. Dec. B-233142, 89-1 CPD ô 106, January 31, 1989 (determination of price reasonableness upheld where award price was lower than the government estimate and the prices of the other competitors.) ³⁷ Our standard for review of determinations of price reasonableness is similar to that of responsibility determinations. They will not be overturned unless clearly unreasonable or there is a showing of bad faith or fraud. Automated Data Management, Inc., supra, quoting Alan Scott Industries; Grieshaber Manufacturing Company, Inc., 63 Comp. Gen. 612, 613 (1984).

The contracting officer states that he thoroughly examined MOS' entire proposal before concluding that MOS' price was reasonable. He also verified that MOS had not made a mistake in its offer. Finally, the contracting officer examined the cost elements of MOS' proposal and concluded that they fully support MOS' proposed price and do not reflect that MOS' proposal is below cost. ³⁸ Monarch does not allege bad faith or fraud, nor do we find any evidence to support such an allegation. The contracting officer adequately considered MOS' proposed price, including its lowness, and his determination that MOS' price was fair and reasonable was not clearly unreasonable.

Next, Monarch alleges that the contracting officer held improper discussions with only the awardee when he asked MOS to verify its price. Our regulations obligate the contracting officer, upon receipt of proposals, to examine them for mistakes and they clearly state that communication with an offeror concerning mistakes is clarification, not discussion, unless correction of the mistake requires reference to data outside the solicitation. ³⁹ PM 4.1.3 f. Where award is made with discussions, PM 4.1.5 g.3.(a)(3) provides that discussions must be held to "[r]esolve any suspected mistakes . . . ." After BAFOs, any remaining uncertainties "must be clarified or corrected through negotiations . . . ." PM 4.1.5 g.5.(b).

The better course of action would have been for the contracting officer to reopen discussions in order to resolve his uncertainties about MOS' price. However, it is clear that the contracting officer viewed the issue as one which could be resolved through clarification. Price was the only evaluation factor upon which award was based, even though discussions were held with each offeror to determine whether their proposals were technically acceptable. Having determined that MOS was the low acceptable offeror, the contracting officer could verify MOS' price without discussions. ⁴⁰ In any event, we are unable to conclude that the other offerors were prejudiced by the contracting officer's actions, since MOS did not change any part of its BAFO as a result of the contracting officer's inquiry. See Klein-Sieb Advertising & Public Relations, Inc., supra.

Prequalification

Monarch contends that the evaluation of the proposals was flawed because it was not based on the exact prototypes that had been previously tested. This issue is untimely raised. "Protests based upon alleged deficiencies in a solicitation that are apparent before the date set for the receipt of proposals must be received by the date and time set for the receipt of proposals." See also Larse Corporation, P.S. Protest No. 90-48, October 18, 1990. All of the offerors participated in the prior procurement for engineering models of the PVI. All were aware that the field tests were cancelled and that the technical specifications changed prior to the issuance of the instant solicitation. Presumably, all offerors, including Monarch, had to review the characteristics of the previously tested units to determine if they needed modification to meet the new requirements of the production solicitation. Accordingly, the basis for any allegation that further testing should have been performed in the evaluation of offers under this solicitation was apparent before the date and time set for the receipt of proposals. ⁴¹ It follows that post-award allegations that no offeror could offer a PVI different from its previously tested engineering model are also untimely. This office lacks jurisdiction over untimely protests. American Telephone Distributors, Inc., P.S. Protest No. 87-117, February 23, 1988. This portion of Monarch's protest is dismissed as untimely.

The Responsibility Determination

Finally, Monarch claims that MOS is not a responsible offeror, lacking the required organization, experience, technical skills and financial ability to perform. It is well established that "[a]n affirmative determination of responsibility is a matter within the broad discretion of the contracting officer and is not subject to being overturned by this office in the course of a protest absent fraud, abuse of discretion, or failure to apply definitive responsibility criteria." Gage Constructors, P.S. Protest No. 87-11, July 13, 1987; Georgia Power Company, P.S. Protest No. 90-01, February 14, 1990. Monarch does not allege fraud, and the solicitation does not identify any definitive responsibility criteria. The contracting officer states that his responsibility determination was made only after a thorough review of MOS' management proposal, financial statements, pastperformance on other postal contracts, and the completion of a pre-award survey. Based on its perception of MOS' capabilities, Monarch strongly disagrees with the contracting officer's determination, but this is insufficient to show abuse of discretion. Alabama Metal Products, Inc., P.S. Protest No. 91-20, May 7, 1991 (dismissed on other grounds); Pitney-Bowes, Inc., P.S. Protest No. 87-95, November 20, 1987. The record supplies no basis to overturn the contracting officer's determination.

The protest is dismissed in part and denied in part.

[Signed]

William J. Jones
Associate General Counsel
Office of Contracts and Property Law
[Compared to original 5/17/95 WJJ]