Matter of: Barton Nelson, Inc.
File: B-225733
Date: May 7, 1987
1. Agency had compelling reason to cancel invitation which failed to
include minimum product performance requirements and quality standards
since award on the basis of a solicitation which did not include these
requirements and standards could result in the agency's accepting a
product with significant performance deficiencies.
2. There is no authority to permit the low bidder under a properly
canceled invitation for bids an exclusive opportunity to meet the
revised requirements of the agency without resolicitation.
3. The Small Business Administration's issuance of a Certificate of
Competency requires that the contracting agency not require the bidder
to meet any other standards of responsibility, but does not compel the
government to make an award if specifications are found defective.
Barton Nelson, Inc., a small business, protests the General Services
Administration (GSA) decision to cancel, after bid opening, items 3-17
for repositionable writing paper of invitation for bids (IFB) No.
2FY-HOV-A-A4062P. Repositionable writing paper is writing paper which
has an adhesive bond so that it can adhere to a variety of surfaces and
which can be "repositioned", that is, adhere to a second surface after
its first use. We deny the protest.
The solicitation requested bids for various types of business machine
paper and three sizes of repositionable writing paper. Following a
determination that the solicitation lacked adequate quality assurance
requirements for the repositionable paper, GSA decided to cancel the
requirement. Specifically, the solicitation contained no minimum
adhesion test for two of the three paper sizes solicited.
Further, while the solicitation included an adhesion test for the
larger size paper solicited, this test was found to be not stringent
enough to insure that the agency would procure a satisfactory product.
Also, the solicitation lacked any kind of repositionability test making
it impossible to determine whether the paper could adhere to a second
surface after its first use.
Barton Nelson maintains that more stringent performance requirements
will not affect bid price and, therefore, any such changes should be
considered minor. In this regard, the protester also argues that it
should be given the opportunity to conform to any new performance
requirements at its bid price.
Further, Barton Nelson points out that after GSA determined Barton
Nelson to be nonresponsible, it referred the matter of Barton Nelson's
responsibility to the Small Business Administration (SBA) for possible
issuance of a Certificate of Competency (COC). Barton Nelson complains
that after SBA issued a COC, GSA canceled the solicitation, thus
rendering "the issuance of the COC meaningless." The protester concludes
that the cancellation represents a bad faith effort to circumvent the
SBA's authority to determine conclusively Barton Nelson's capability to
perform the contract.
GSA reports that this type of paper previously had been procured on a
"brand name or equal" basis; however, as more firms began manufacturing
this paper, GSA sought to achieve greater competition by developing a
technical purchase description (TPD) for repositionable paper. GSA
explains that it has received numerous complaints (more than 40) from
user activities concerning the paper GSA purchased in 1986 under this
TPD, also used in the current solicitation. The user activities
complained that the paper does not adhere to any surface for any length
of time and cannot be repositioned. GSA states that the majority of
these complaints were received after the issuance of this solicitation
in October 1986. GSA further explains that investigation by technical
personnel confirmed the user activities complaints. Therefore, the
agency determined that several product performance requirements would
have to be added to the current TPD as well as changes made to existing
performance requirements to insure that GSA user activities would not be
getting a defective product. In this regard, GSA states that even the
larger size paper, which had a minimum adhesion test in the TPD, was
found to be defective notwithstanding that this paper had satisfied that
performance test. Based on these findings, GSA requested its national
laboratory to develop a new TPD to include a more stringent minimum
adhesion test for the larger size paper and minimum adhesion tests for
the two smaller sizes of paper and repositionability and accelerated
aging tests for all three paper sizes. These new performance standards
will be incorporated into the TPD and the requirement will be
resolicited.
It is undisputed that contracting agencies have broad discretion in
determining when it is appropriate to cancel a solicitation. Magnolia
Inn, B-216607, Mar. 1, 1985, 85-1 C.P.D. P 257. However, because of the
potentially adverse impact of such a decision upon the competitive
bidding system, a cogent and compelling reason must support a decision
to cancel after bid opening. Federal Acquisition Regulation (FAR), 48
C.F.R. Sec. 14.404-1 (1986).
In this case, the record establishes that the agency had a compelling
reason to cancel. GSA canceled the solicitation after discovering that
the solicitation TPD failed to include minimum product performance
requirements, the lack of which could result in the acceptance of
repositionable writing paper with significant performance deficiencies.
The record indicates that in order to meet GSA user activities needs,
minimum adhesion and repositionability requirements must be included in
the solicitation to insure the paper is capable of adhering to various
surfaces and can be repositioned after initial use as required. The
protester does not argue that the inclusion of such performance
standards in the solicitation are not necessary to insure acceptable
product performance or that the solicitation, as issued, contains
adequate quality assurance requirements. In fact, the protester admits
that different manufacturers use very different types of adhesives for
the paper. Thus, under the circumstances here, where award on the basis
of a solicitation which does not include the agency's minimum
requirements for a quality product could result in the agency's
accepting defective supplies, GSA acted reasonably in canceling the
solicitation. See General Aero Products Corp., B-213541, Sept. 18,
1984, 84-2 C.P.D. P 310.
The protester argues that bid prices would not be affected by
performance requirements and, therefore, any solicitation revisions
concerning product performance must be considered minor, not justifying
cancellation. Regardless of whether prices are affected by the
anticipated revisions, as explained above, the agency acted reasonably
in canceling the solicitation since award on the basis of deficient
performance specifications would not meet the agency's needs. See
General Aero Products Corp., B-213541, supra.
Concerning Barton Nelson's assertion that as low bidder it should be
given the opportunity to conform to any new solicitation requirements
without a resolicition, there is no authority to permit Barton Nelson,
simply because it submitted the low bid on deficient specifications, an
exclusive opportunity to meet the revised needs of the agency. See John
C. Kohler Co., B-218133, Apr. 22, 1985, 85-1 C.P.D. P 460; General Aero
Products Corp., B-213541, supra.
Finally, with regard to Barton Nelson's contention that it was
improper to cancel the solicitation after the firm had been issued a COC
by SBA, the fact that the low bidder is issued a COC does not, in
itself, compel the government to make an award under defective
specifications, but only requires that the contracting agency not
require the bidder to meet any other standards of responsibility if the
contract is awarded. Integrity Management International, Inc.,
B-222405.2, Feb. 26, 1987, 87-1 C.P.D. P 220; Intercomp Company,
B-213059, May 22, 1984, 84-1 C.P.D. P 540. Here, the needed changes to
the solicitation all involved aspects of what the contractor would be
required to provide under the contract and not additional elements of
responsibility. Since the record provides a reasonable basis for GSA's
decision to cancel the solicitation, we reject Barton Nelson's
allegation that the cancellation was a ruse to circumvent SBA authority.
In this regard, the record supports GSA's position that pending the
issuance of a COC to Barton Nelson, GSA was ready to award to that firm.
The record shows that the agency initially believed a satisfactory
product could be obtained by requiring only minor changes and that under
these circumstances award to Barton Nelson would be appropriate. Only
after GSA technical personnel completed their investigation of the
causes of user activities complaints concerning paper previously
procured under the same TPD used here, and reevaluated the performance
requirements in the current TPD, did GSA determine that extensive
solicitation revisions were necessary and cancel the solicitation.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: DJW Services
File: B-225732.2
Date: May 27, 1987
1. Protest contending that request for proposals' technical
evaluation provisions are unduly complex is untimely when not filed
before the time set for receipt of initial proposals.
2. Protest of award by a firm that is not line for award if the
protest were sustained is dismissed since protester does not have the
required direct interest in the contract award to be considered an
interested party under Bid Protest Regulations.
DJW Services protests award to Diversified Technology & Services of
Virginia, Inc. (DTSV) under request for proposals (RFP) No.
F41800-87-R-0662, issued by the Department of the Air Force for offers
to operate postal service centers on Lackland Air Force Base, Texas.
DJW contends that the Air Force imposed complex evaluation standards for
the relatively simple function of delivering mail. DJW further contends
that as it was the low, responsive and responsible offeror, it should
have received the award. DJW's protest was received in our Office on
March 31, 1987.
DJW's protest as it relates to the evaluation standards is untimely
under our Bid Protest Regulations, 4 C.F.R. Sec. 21.2(a) (1) (1986).
These regulations require that alleged improprieties which are apparent
prior to the closing date for receipt of initial proposals must be
protested prior to closing. Synergetics International, Inc., B-225499,
Dec. 2, 1986, 86-2 CPD P 632. Therefore, if DJW believed that the Air
Force imposed unduly complex evaluation standards, it should have
protested before closing on the February 13, 1987, closing date for
receipt of proposals.
In its comments on the Air Force's report, DJW suggests that even if
the issue regarding the evaluation standards is untimely, our Office
should consider it because it is a significant issue. We disagree.
Under the significant issue exception to our timeliness requirements, we
consider untimely protests when they raise issues of wide-spread
interest to the procurement community which have not previously been
decided. Bell Atlanticom Systems, Inc., B-222601.2, June 30, 1986, 86-2
CPD P 19. While we recognize that the evaluation requirements in this
procurement may be important to DJW, they are not of widespread interest
to the procurement community.
As for the award to DTSV, DJW does not appear to be an "interested
party," as required by 4 C.F.R. Sec. 21.1(a), to protest the award. The
record indicates that another firm, Data Monitoring Systems (DMS), had a
higher rated technical proposal and a lower price than DJW and there has
been no challenge to DMS's technical acceptability or responsibility.
Thus, even if the protest against the award to DTSV were sustained, DJW
would not be in line for the award. Under these circumstances, DJW is
not an interested party with the right to have its protest considered on
the merits. St. Angelo East Coast Furniture Renewal, Inc., B-225320,
Dec. 19, 1986, 86-2 CPD P 693.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
Matter of: Scopus Optical Industry--Reconsideration
File: B-225728.2, B-225729.2, B-225730.2, B-225731.2
Date: June 29, 1987
Protest that agency improperly restricted procurement to domestic
manufacturers is denied where item being procured is properly determined
to be a defense mobilization item, and restriction therefore is required
by governing regulations.
Scopus Optical Industry protests that Department of the Army
solicitations Nos. DAA09-86-R-1893, -1894, -1895, and -1986, issued to
procure periscopes, unduly restrict competition by limiting offerors to
domestic manufacturers.
On March 25, 1987, we dismissed these protests as untimely under
section 21.2(a) (2) of our Bid Protest Regulations, 4 C.F.R. part 21
(1986), because the protests were filed more than 10-working days after
notices of the impending procurements were published in the Commerce
Business Daily and no date for receipt of proposals was stated. Scopus
Optical Industry, B-225728, et al., Mar. 25, 1987, 87-1 C.P.D. P 342.
Upon request for reconsideration, we have determined that section 21.
2(a) (1) should have been applied and the protests considered timely
since the protests involve alleged solicitation improprieties and the
protests were filed prior to the receipt of proposals. See Engine &
Generator Rebuilders, 65 Comp. Gen. 191 (1986), 86-1 C.P.D. P 27.
We deny the protest.
The solicitations were issued on December 5, 1986, to obtain various
types of plastic periscopes for use with armored combat vehicles.
According to the Army, from 1979 through 1986 the periscopes were
procured solely from two mobilization base planned producers. 1/ In
1986, however, in order to increase competition while maintaining an
adequate domestic industrial base for the periscopes, the Army decided
to open the competition, but to restrict it to domestic sources. The
Justification and Approval (J&A) to limit the procurement to domestic
sources was based on the fact that the periscopes are included on the
Industrial Preparedness Planning List (IPPL). 2/
In response to Scopus' protest, the Army has further explained the
basis for the restriction. The Army reports that it considered, among
other factors, that the periscopes are vital components for combat
vehicles, which are critical items for the national defense; there have
been sustained mobilization requirements for the periscopes since 1979;
there are no known substitutes for the periscopes; and the manufacture
of the periscopes requires critical skills and specialized production
equipment so that domestic capability must be maintained to prevent the
loss of skills and to have sources available to train others.
Scopus protests that the Army's decision to restrict the procurement
to domestic sources is unreasonable and inconsistent with the applicable
statutes and regulations which, according to Scopus, do not contemplate
an automatic restriction to domestic sources for every mobilization
item. Specifically, Scopus argues that before restricting a procurement
for mobilization items, the agency responsible for the procurement must
make two determinations: (1) that the item being procured is a
mobilization item, and (2) that it is necessary to restrict the
procurement of the item in order to maintain the industrial base.
Scopus agrees that the periscopes have been properly classified as
defense mobilization items and placed on the IPPL, but complains it is
necessary to restrict the procurement of the item in order to maintain
the industrial base. Scopus agrees that the periscopes have been
properly classified as defense mobilization items and placed on the
IPPL, but complains that the restriction to domestic sources is wrong
because the Army has not properly made the second determination, that
is, the Army has not considered whether the restriction in these
particular instances in fact are necessary to maintain the industrial
mobilization base. In this regard, Scopus argues that even if it is
necessary to restrict some of the solicitations to domestic sources, the
Army has no reasonable basis on which to restrict all four solicitations
to domestic sources.
There is no legal merit to the protest. Under the Competition in
Contracting Act of 1984, 10 U.S.C. Secs. 2304(b)(1)(B) and 2304(c)(3)
(Supp. III 1985), and its implementing regulation, Federal Acquisition
Regulation (FAR), 48 C.F.R. Sec. 6.302-3 (1986), agencies have authority
to conduct procurements in a manner that enables them to establish or
maintain sources of supply for a particular item in the interest of the
national defense. In procuring for industrial mobilization purposes,
agencies therefore are not required to obtain full and open competition.
See Lister Bolt & Chain, Ltd., B-224473, Sept. 15, 1986, 86-2 C.P.D. P
305.
In accordance with this authority, the DOD has promulgated
regulations and restrictions governing Industrial Preparedness
Production Planning. See DOD FAR Supp., 48 C.F.R. Sec. 208.070, DOD
Instruction 4005.3 (1985). These instructions provide procedures for
DOD to choose items that are critical to the national defense and to
plan so that an adequate industrial base will be maintained to support
DOD requirements for the items in the event of a national emergency.
Once an item properly has been chosen for industrial preparedness
production planning, DOD may engage in such planning for the item only
with domestic sources. DOD FAR Supp., 48 C.F.R. Sec. 208.070(e).
Scopus concedes that the periscopes being procured have been
correctly classified as industrial mobilization items and included on
the IPPL. Consequently, the Army properly restricted the procurements
to domestic sources.
Moreover, we disagree with Scopus' contention that the Army has not
actually decided that all four of these particular purchases should be
made domestically. Each solicitation restriction is supported by a
separate J&A, executed and concurred in by the appropriate individuals.
In this respect, the decision as to what restrictions are required to
provide for an adequate mobilization base involves complex judgments
that must be left to the discretion of the military agencies. Wayne H.
Coloney Co. Inc., 64 Comp. Gen. 260 (1985), 85-1 C.P.D. P 186.
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ A mobilization base planned producer is an industrial firm that
has indicated its willingness to produce specified military items in a
national emergency by completing a Department of Defense (DOD)
Industrial Preparedness Program Production Planning Schedule (DD Form
1519). See DOD Federal Acquisition Regulation (FAR) Supp., 48 C.F.R.
Sec. 208.070(b) (1985); Lister Bolt & Chain, Ltd., B-224473, Sept. 15,
1986, 86-2 C.P.D. P 305.
2/ The IPPL includes those items and weapons systems selected by
military departments and the Defense Logistics Agency, in accordance
with DOD Instruction 4005.3 (April 18, 1985), as required to sustain
military operations under a declared national emergency. See DOD
Instruction 4005.3 Sec. E(1); DOD FAR Supp., 48 C.F.R. Sec. 208.070(b).
Matter of: Scopus Optical Industry
File: B-225728, B-225729, B-225730, B-225731
Date: March 25, 1987
Protests that solicitations improperly restrict competition are
dismissed as untimely when not filed within 10 working days after notice
of the solicitations was published in a Commerce Business Daily synopsis
which indicated the restriction and did not state a closing date for the
receipt of proposals.
Scopus Optical Industry protests that Department of the Army
solicitations Nos. DAAA09-86-R-1893, -1894, -1895, and -1896, issued to
procure periscopes, unduly restrict competition by limiting offerors to
domestic sources.
We dismiss the protests in accordance with 4 C.F.R. Sec. 21.3(f)
(1986) of our Bid Protest Regulations, which provides that where the
propriety of dismissal becomes clear only after information is provided
by the agency, the protest may be dismissed at that time without further
development of the record.
The Army informs us that notices of the four solicitations, stating
that only domestic sources would be considered for award, were published
in the Commerce Business Daily (CBD) on October 30, 1986. The notices
did not indicate closing dates for the receipt of proposals. Scopus
filed protests against the restriction with the Army on January 14,
1987, and with our Office on February 12, after its agency-level protest
was denied.
According to our Bid Protest Regulations, a protest must be filed
with the procuring agency or our Office within 10 working days after the
protester knows or should know the basis for its protest. 4 C.F.R. Sec.
21.2(a)(2). Synopsis of a procurement in the CBD constitutes
constructive notice to all parties of the solicitation and its contents.
Where a CBD synopsis states a solicitation restriction and the synopsis
does not contain a closing date for the receipt of proposals, a firm is
required to file a protest against the restriction with our Office or
the procuring agency within 10 working days after the date the synopsis
is published. DocuMail Division, Bell and Howell Co., B-216196, Nov.
26, 1984, 84-2 C.P.D. P 554. Scopus' protests to the Army, filed 2-1/2
months after the firm knew of the restriction in issue, thus clearly
were untimely, and we therefore will not consider the protests to our
Office. 4 C.F.R. Sec. 21.2(a)(3).
Robert M. Strong
Deputy Associate
General Counsel
Matter of: The ARO Corporation
File: B-225727
Date: June 15, 1987
1. Failure by bidders to identify precisely the products they were
bidding under qualified products requirement does not render bids
nonresponsive where the bidders took no exception to solicitation
requirement that products be qualified.
2. Where solicitation clause provides that qualification of product
may be completed up to time of award, compliance with clause is matter
of responsibility, not responsiveness, and detailed information on
product qualification, if needed, may be provided to agency any time
before award.
The ARO Corporation protests the award of contracts to any firms
other than itself for line items 4, 5, 7, 10, 14, and 16 in the bid
schedule of invitation for bids (IFB) No. FCEP-BL-F6214-S-12-4-86,
issued by the General Services Administration (GSA). The IFB is to meet
Federal Supply Schedule requirements for pneumatic drills, grinders,
riveters, hammers, and other tools. We deny the protest.
The IFB's bid schedule briefly described the product, indicated the
applicable federal specification, and required product qualification for
each of the protested line items. For each of these items, estimated
quantities were listed and a space was provided for an item price.
The IFB also contained the Qualification Requirements clause set
forth in the Federal Acquisition Regulations (FAR), 48 C.F.R. Sec.
52.209-1 (1985), the clause largely in issue here. The clause defines
"qualification requirement" as a requirement for testing or other
quality assurance that must be completed by a bidder before the award of
a contract, and states that "the product, manufacturer or offeror must
be qualified by the time of award whether or not the name of the
product, manufacturer, or offeror is actually included on" the
applicable qualification list. The clause further provides that bidders
are to contact the contracting agency to obtain the qualification
requirements and to have their products tested for qualification
purposes. Finally, the clause (1) requests that bidders offering
alreadyqualified products furnish the manufacturer's name, the item name
and the qualification test number "to the extent known"; (2) requires
bidders offering products that are qualified but not yet on a
qualification list to submit evidence of qualification with the bid;
and (3) provides that if the product that is or will be qualified before
award is not identified in the bid, the bid will be rejected.
The low bidders for line items 4 and 5 (Master Power, Inc.), item 10
(Sioux Tools, Inc.), and item 14 (Allen BradleyRockwell International
Co.) all offered already-qualified products and listed qualification
test numbers for the products. The low bidder for line item 7,
Ingersoll-Rand Co., stated that qualification had been applied for, but
that qualification tests had not been completed. The low bidder for
line item 16, T.C. Service Co., listed the item's national stock number
and furnished evidence that it had applied for testing in order to
become qualified. Most bidders merely referred to the IFB item number
in providing information under the clause; no bidder furnished detailed
descriptions of offered products.
ARO alleges that these low bids on the protested line items are
nonresponsive because the bidders failed to identify their offered
products adequately, and thus did not provide the precise type of
information required by clause 52.209-1. ARO takes the position that
bids were required to contain some detailed description of the offered
product--such as a model name or number--in order to be responsive. ARO
seeks the awards under these line items as the low responsive bidder.
GSA argues that the effect of the failure of the bidders under these
line items to insert information called for in clause 52.209-1 is a
matter pertaining to their responsibility, not the responsiveness of
their bids. The agency states that the information sought under this
clause is simply intended for use in determining whether the bidders can
comply with the requirement that their products be qualified by the time
of award. GSA points out that the FAR, 48 C.F.R. Sec. 9.202(c) (1986),
specifically provides that a prospective contractor may not be denied an
opportunity to have its bid considered for award solely because the item
is not on a list of qualified products or has not been identified as
meeting a qualification requirement so long as the prospective
contractor demonstrates that it can meet the standards for qualification
before the date specified for contract award. We agree with GSA.
Responsiveness concerns whether a bidder has unequivocally offered to
provide supplies in conformity with all material terms and conditions of
a solicitation. The ARO Corp., B-222486, June 25, 1986, 86-2 C.P.D. P
6. Only where a bidder provides information with its bid that reduces,
limits or modifies a solicitation requirement, may the bid be rejected
as nonresponsive. See C. Iber & Sons, Inc., B-208365.2, Apr. 20, 1983,
83-1 C.P.D. P 424. We have examined the bids in question here and find
nothing in those bids that takes exception to any of the IFB
requirements. By completing the bid schedule for the items on which
they were bidding, and signing their bids, the challenged bidders
obligated themselves to furnish products conforming to the
specifications, descriptions, and qualification requirements listed for
each item. The bidders' alleged failure to provide identifying
information required under clause 52.209-1 did not eliminate or reduce
this obligation. The bids therefore were responsive.
Responsibility refers to a bidder's apparent ability and capacity to
perform all contract requirements, and is determined not at bid opening,
but any time prior to award based on any information received by the
agency up to that time. Great Lakes Dredge & Dock Co., B-221768, May 8,
1986, 86-1 C.P.D. P 444. As noted, clause 52.209-1 provides that the
bidders' products had to be qualified under appropriate standards only
by the time of contract award. Obviously, it follows that bidders were
to be permitted to furnish details under the clause after bid opening,
as information on the qualification status of their offered products
became available. Since bidders already had established their
obligations to furnish qualified products in the bid schedule, this
additional information related to bidder responsibility--whether the
bidder was capable of satisfying the qualified product requirement--not
responsiveness. The agency appears to consider the challenged bidders
responsible; this determination is outside the ambit of our Office
under the circumstances here. See 4 C.F.R. Sec. 21.3(f) (1) (1986).
Since the clause clearly concerns bidder responsibility rather than
responsiveness, we believe it would have been improper for GSA to reject
any of the challenged bids at bid opening for failure to identify the
offered products adequately in the bid, any suggestion in the clause to
the contrary notwithstanding. 1/ As GSA points out in this regard, the
terms of a solicitation cannot convert a matter of responsibility into
one of responsiveness. The ARO Corp., B-222486, supra. Under the
clause in question, a bid is acceptable so long as the procuring agency
is able to determine the product offered prior to award, and GSA states
it was able to do so with the challenged bids.
ARO's protest is denied.
Harry R. Van Cleve
General Counsel
1/ We did hold in D. Moody & Co., Inc., et al., 55 Comp. Gen. 1
(1975), 75-2 C.P.D. P 1, that a bidder's failure to furnish any
information identifying its offered qualified product warranted
rejection of the bid as nonresponsive, but the clause in that case
specifically required that products be qualified at the time of bid
opening. See FAR, 48 C.F.R. Sec. 52.209-1 (1984). This clause was
changed in 1985 to allow qualification up until the time of award. See
Federal Acquisition Circular 84-11 (Aug. 30, 1985).
Matter of: Porterhouse Cleaning and Maintenance Service Company, Inc.
File: B-225725
Date: May 18, 1987
1. Where solicitation permits bids for custodial services on both a
nighttime and daytime basis, a bid for daytime services that complies
with all the terms and conditions of the solicitation is responsive, and
the fact that the same bidder's bid for nighttime services is
nonresponsive does not affect the responsiveness of the daytime bid.
2. Where it is not clear whether a mistake in bid is in a unit price
or an extended price, so that the intended bid cannot be determined, it
is generally improper to treat the mistake as an apparent clerical
error.
3. Where it is clear that an allegedly mistaken bid would below with
or without correction, a bidder may waive its mistake claim or correct
its bid, even when the intended bid cannot be determined exactly. When
the error amounts to $108.02 on a total price of more than $2 million,
the effect is de minimus, and higher-priced bidders are not prejudiced.
Porterhouse Cleaning and Maintenance Service Company, Inc. protests
the award of a contract to Curl's Building Maintenance Inc. under
invitation for bids (IFB) No. F11623-87B-0006 for custodial services at
Scott Air Force Base, Illinois. The protester contends that all bids
lower than its own were nonresponsive and argues that the proposed
awardee should not have been permitted to correct a mistake in bid.
We deny the protest.
The IFB, issued November 12, 1986, requested prices for a 9-month
period, January through September 1987, and two 1-year option periods.
Bids were requested for performance during the day and alternatively, at
night. Amendment 1, issued December 5, among other things added line
items for snow removal to the nighttime bid schedule; this service
already was included on the daytime bid schedule. The amendment also
stated that the government would award a single contract for either
daytime or nighttime services, whichever cost less.
At bid opening on December 29, the Air Force received 15 bids. The
apparent low bidder was J&J Maid Services for daytime services; this
firm was also the second-low bidder, based upon its price for nighttime
services. However, when the firm failed to verify its prices, the Air
Force rejected its daytime bid as unreasonably low and its nighttime bid
because the firm had failed to acknowledge an amendment.
Curl's bid for nighttime services was third-low, and its daytime bid
was fourth-low. Porterhouse followed, offering the same price for
services either during the day or at night.
The Air Force rejected Curl's bid for nighttime services as
nonresponsive because of the firm's failure to provide prices for snow
removal for the base and first option period. Although the firm had
acknowledged amendment 1, Curl explained that it had been advised of the
contents of the amendment by telephone, but had not actually received
it. Therefore, according to Curl, it was not aware of the need to add
line items and separately price these services (the record does not
indicate why Curl did provide prices for nighttime snow removal for the
second option period). After bid opening, Curl offered to provide up to
the annual estimated quantity of nighttime snow removal, 975 hours, at
no charge. By this time, however, the Air Force had decided that it
actually required daytime services, so that in any event it apparently
would have rejected Curl's bid for nighttime services.
As for Curl's daytime bid, the agency found it responsive and agreed
to waive price extension errors totaling $108.02 as a minor informality.
Curl's corrected bid with options, amounts to $2,067,159.18.
Porterhouse's bid was $2,278,617.
The protester first argues that because Curl's bid for nighttime
services was nonresponsive, its daytime bid should also have been
rejected as nonresponsive.
A bid is responsive if, upon award, the bidder would be obligated to
perform in exact conformance with all material solicitation provisions.
See Power Test, Inc., B-218123, Apr. 29, 1985, 85-1 CPD P 484. Here,
the invitation provided for two separate offers, and Curl's offer for
daytime services fully complied with the terms and conditions of the
IFB. As noted above, Curl acknowledged. amendment 1 (as well as two
subsequent amendments), and priced every line item, including snow
removal, for all periods of performance. The fact that the bid for
nighttime services was nonresponsive does not affect the responsiveness
of Curl's bid for daytime services.
The protester also argues that Curl should not have been permitted to
correct a mistake in its bid for daytime services. The agency responds
that in reviewing the bid, the contracting officer discovered several
mathematical errors in extensions of the firm's unit prices. The record
indicates that Curl made three errors in extending its unit prices
which, as corrected, added $108.02 to its total price, including
options. These errors involved the following line items:
Price Price Price
18AA 9 mos. $872.56 $7,853.00 $7,853.04
52AA 9 mos. 36.94 332.48 332.46
61CA 12 mos. 765.31 9,075.72 9,183.72
The agency assumed in each case that the unit price was correct.
Curl's total bid therefore was increased from $2,067,151.16 to, as noted
above, $2,067,159.18. The corrected bid was still significantly less
than the protester's bid for daytime performance of the same services:
Porterhouse $2,278,617.00
Curl -2,067,159.18
$ 211,457.82
Under the Federal Acquisition Regulation (FAR), 48 C.F.R. Sec.
14.406-2 (1986), a contracting officer is authorized to correct a
clerical mistake in a bid without further agency approval after the
bidder verifies the intended bid. Tetronix, Inc., B-219981, Nov. 27,
1985, 85-2 CPD P 611. In such a case, to be corrected as a clerical
error, both the mistake and the intended bid must be apparent from the
face of the bid. Id.
Here, the contracting officer assumed that the errors were in the
extended prices, rather than in the unit prices. While this assumption
provides one explanation for the errors, it is also possible that the
mistake was in the unit price. Since the intended bid cannot be
determined, it was improper to treat the mistake as an apparent clerical
error. See Broken Lance Enterprises, Inc., 57 Comp. Gen. 410 (1978),
78-1 CPD P 279.
Where it is clear, however, that the bid would be low with or without
correction, a bidder may be permitted to waive its mistake claim, see
National Heat and Power Corp., B-212923, Jan. 27, 1984, 84-1 CPD P 125,
or to correct its bid, see R & R Contracting Inc., B-217412, Mar. 1,
1985, 85-1 CPD P 260, even where the intended bid cannot be determined
exactly. See, for example, Dadson Corp., B-210413, June 7, 1983, 83-1
CPD P 618; Western States Constr. Co., Inc., B-191209, Aug. 29, 1978,
78-2 CPD P 149.
While the record here does not show whether Curl made a mistake in
its unit or extended price, it is clear that the bid remains low with or
without the $108.02 correction being permitted. Therefore, we find that
the contracting officer properly waived the mistakes as a minor
informality in accord with the FAR, 48 C.F.R. Sec. 14.405. Their effect
is de minimus, and waiving them will not prejudice or displace other,
higher-priced bidders.
Porterhouse also appears to be arguing that it should have received
the award because an agency representative at one point advised the firm
that it was the apparent low bidder and requested that Porterhouse
submit additional information as to its responsibility. Oral advice or
a request for information of this type is not sufficient to give rise to
a binding contract, since the government's acceptance of an offer must
be clear and unconditional. See Mil-Base Indus., B-218015, Apr. 12,
1985, 85-1 CPD P 421.
Finally, we need not reach the question of the propriety of the Air
Force's having determined, after bid opening, that it would only
consider bids for daytime services, since the lowest responsive bid was
for such services, and all lower bids--for nighttime services--were
nonresponsive.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: TTI Management Co. Inc.; Omega World Travel, Inc.; and
Travel Ventures, Inc.
File: B-225724
Date: May 7, 1987
Protest that agency failed to amend solicitation to give offerors
adequate notice that use of the Diners Club Agency Account System (under
which Diners Club carries government accounts receivable thus relieving
the contractor of the financial burden of carrying the receivables)
satisfied the solicitation financial capability requirement that the
contractor carry the accounts for at least 30 days is denied. Offerors
were required to use the Diners Club system and offerors had actual
notice that the agency considered use of Diners' Club Account System as
meeting the solicitation financial capability requirement.
TTI Management Co., Inc., Omega World Travel Inc., and Travel
Ventures, Inc., 1/ protest as unduly restrictive of competition the Army
decision under request for proposals (RFP) No. DAKF49-87-R-0001 to award
a single contract for no cost travel agent management services for 29
Army installations located within the Fifth U.S. Army Region.
We deny the protest.
The RFP provides that "the offeror must have adequate capital and
sufficient cash flow to carry government accounts receivable for at
least 30 calendar days dated from government receipt of a proper
invoice." TTI initially protested that only four travel agencies have
the financial capability to satisfy this requirement; that is, only
four travel agencies have the financial capability "to float" accounts
receivable for this estimated $86.5 million contract (covering 29 Army
installations) for 30 days. TTI maintained that in order to achieve
full and open competition, the Army should issue separate solicitations
for each of the 29 installations.
The Army responded in its report on this protest that "early on, it
knew an offeror's ability to float government receivables would, in
fact, preclude many travel agencies from competing . . ." and,
therefore, the Army sought to achieve greater competition by requiring
the use of Diners Club Agency Account System/Government Travel System
(GTS) for this procurement. Under the Diners Club Agency Account
System, when services are purchased using Diners Club credit, Diners
Club does not bill the agency for the time period in question. Thus,
the Diners Club floats the government receivables, relieving the
contractor of this financial burden. The Army report points out that
the solicitation requires the contractor to accept Diners Club as
payment for government travel services. At the preproposal conference,
the Army confirmed that Diners Club would float the government
receivables. All firms on the bidders mailing list were mailed a copy
of the preproposal conference report containing this information. The
Army report concludes that "any offeror showing an ability to provide
automated reconciliation of Diners Club accounts can be considered as
meeting the requirement to carry government accounts receivable for at
least 30 days." In this regard, the RFP requires the contractor to
provide automated reconciliation of the Diners Club accounts, that is,
the offeror must be able to produce a computerized report comparing the
Diners Club billings with the travel agents invoices.
The protesters respond that the Army in its report "substantially
liberalized specifications without amending the RFP," thereby improperly
depriving potential competitors of notice that the Army considers "any
offeror showing an ability to provide automated reconciliation of
Diners Club accounts as meeting the requirement to carry the government
accounts receivable for at least 30 days." TTI states that at least
1,500 travel agencies "can be considered" as meeting this "revised"
requirement. The protesters maintain that the Army should be required
to either issue an amendment stating that the offerors ability to accept
Diners Club payments and issue corresponding information reports will be
considered as meeting the financial capability requirement or issue 29
separate solicitations.
We find this protest to be without merit. The protesters do not
refute that the Diners Club carries government accounts receivable for
the time period in question. They merely argue that they were not given
adequate notice that use of the Diners Club Agency Account System
satisfies the requirement that the contractor carry the accounts
receivable for at least 30 days. The preproposal conference's written
record, sent to all offerors, clearly indicated that the Diners Club
Agency Account System satisfied the requirement that the contractor
carry the accounts receivable. Thus, offerors were on actual notice of
this means of complying with the financial capability requirement. See
e.g., Brizard Company, B-215595, Oct. 11, 1984, 84-2 C.P.D. P 399;
Texstar Plastics Co., Inc., B-201105, Sept. 18, 1981, 81-2 C.P.D. P
223.
We deny the protest.
Harry R. Van Cleve
General Counsel
1/ TTI is a consortium of travel agencies and is also an accredited
travel agency itself. Omega and Travel Ventures are travel agency
members of the TTI consortium.
Matter of: Marine Industries, Ltd.--Reconsideration
File: B-225722.4
Date: August 3, 1987
Bid Protest Regulations do not permit a firm to protest an issue and
later, after the protest has been denied, to bring forth further legal
arguments and analyses to support its position that could have been
raised earlier.
Marine Industries, Ltd. (MIL), a Canadian shipyard, requests
reconsideration of our dismissal of its protest in Marine Industries,
Ltd., B-225722.3, July 10, 1987, 87-2 C.P.D. P , concerning a domestic
shipyard restriction in invitation for bids (IFB) No. DACW61-87-B-0014.
The solicitation, issued by the United States Army Corps of Engineers,
is for the construction of a service barge. We deny the request for
reconsideration.
MIL's current request is the fourth time the firm has asked us to
review the restriction, which prevented MIL from competing for the
award. We denied MIL's initial protest of the restriction in Marine
Industries, Ltd., B-225722, May 21, 1987, 87-1 C.P.D. P 532. MIL then
requested reconsideration, raising additional arguments in support of
its position that use of the restriction was improper. We denied the
request for reconsideration because we found that the additional
arguments on the issue could have been, but were not, raised during the
original protest. Marine Industries, Ltd.--Reconsideration, B-225722.2,
June 24, 87-1 C.P.D. P .
Later, MIL filed a second protest, this time based on substantially
the same additional arguments that it had urged in its reconsideration
request. MIL contended that consideration of the arguments was
appropriate notwithstanding our denial of MIL's reconsideration request
because the issue concerned alleged improprieties apparent on the face
of the solicitation, and the protest was filed before bid opening, as
required by our Bid Protest Regulations, 4 C.F.R. Sec. 21.2(a) (1)
(1987). We dismissed the second protest, however, essentially for the
same reason we denied the firm's request for reconsideration, namely, it
presented legal arguments that MIL could have raised in its initial
protest. Marine Industries, Ltd., B-225722.3, July 10, 1987, 87-2
C.P.D. P . We noted in this respect that the Corps of Engineers had
issued several amendments after MIL's initial protest granting
extensions of the bid opening date so we could resolve first MIL's
protest, and then MIL's reconsideration request, before bid opening.
In its current reconsideration request, MIL characterizes its
additional arguments as new issues, and urges that our decisions with
respect to raising new issues after an initial protest is filed are
inconsistent. Specifically, MIL argues that our decision in Military
Base Management, Inc., B-224128, Nov. 26, 1986, 86-2 C.P.D. P 616
(barring the raising of protest arguments in a piecemeal fashion),
conflicts with the following decisions: Areawide Services, Inc.,
B-225253, Feb. 9, 1987, 87-1 C.P.D. P 138; Chesapeake and Potomac
Telephone Co., B-224228, et al., 87-1 C.P.D. P 120; and Radionic
Hi-Tech, Inc., B-219116, Aug. 26, 1985, 85-2 C.P.D. P 230 (which point
out that protesters properly may raise timely new issues during the
course of a protest).
The cited decisions are not inconsistent. Basically, they indicate
that we will consider new issues if they are timely raised during a
protest, but that we will not consider piecemeal arguments regarding an
existing issue. As such, they do not permit a firm to raise an issue
and then, after bid opening has been delayed while our Office considers
the matter, to bring forth further legal arguments or analyses in
support of its position that the firm had neglected to raise or that
only occurred to it later.
The additional arguments MIL presented that we would not consider did
not constitute separate timely issues, but instead were legal arguments
in support of the single issue MIL had protested initially, that is,
that the solicitation improperly was restricted to domestic shipyards.
We therefore properly did not consider them, and we deny MIL's request
for reconsideration. 4 C.F.R. Sec. 21. 12.
Harry R. Van Cleve
General Counsel
Matter of: Marine Industries, Ltd.
File: B-225722.3
Date: July 10, 1987
General Accounting Office (GAO) will not consider protest of alleged
solicitation improprieties filed more than 4 months following submission
of initial, related protest, even though bids have not yet been opened,
bid opening having been extended because of the initial filing.
Consideration of piecemeal submissions jeopardizes GAO's ability to
resolve protests quickly with only minimal disruption to the orderly
process of government procurement, as contemplated by the Competition in
Contracting Act of 1984.
Marine Industries, Ltd. (MIL), a Canadian shipyard, protests a
domestic shipyard restriction in invitation for bids (IFB) No.
DACW61-87-B-0014, issued by the United States Army Corps of Engineers
for construction of a service barge. We dismiss the protest.
We previously denied MIL's protest of the restriction, which
prevented MIL from competing for the award, in Marine Industries, Ltd.,
B-225722, May 21, 1987, 87-1 C.P.D. P . There we rejected MIL's
argument that the statute authorizing the restriction either did not
apply, or had been waived for this procurement, so that the Corps lacked
authority to impose the restriction. MIL then requested
reconsideration, raising further arguments to establish the existence of
a waiver. We denied the request for reconsideration because it relied
on arguments that could have been, but were not, raised during the
original protest. Marine Industries, Ltd.--Reconsideration, B-225722.2,
June 24, 1987, 87-1 C.P.D. P .
MIL's current protest is based on substantially the same arguments it
raised in the reconsideration request. MIL, however, suggests that the
protest is appropriate for our review notwithstanding our denial of the
firm's reconsideration request since the protest is based on alleged
improprieties apparent on the face of the solicitation, and has been
filed (on June 29) before the June 30, 1987, bid opening date, in
accordance with the timeliness rules of our Bid Protest Regulations, 4
C.F.R. Sec. 21.2(a) (2) (1986). In this respect, MIL filed its original
protest of the domestic shipyard restriction with our Office on February
11, 1987, before the IFB's February 24 bid opening date. That date
later was extended to April 28 (by amendment No. 0002), then to May 28
(by amendment No. 0003), and finally to June 30 (by amendment No. 0004).
Each extension was granted so that our Office could resolve first MIL's
protest and then MIL's reconsideration request before bids were opened.
We will not now consider MIL's arguments notwithstanding they were
filed prior to bid opening, essentially for the same reason we denied
the company's request for reconsideration. The protest system
established by the Competition in Contracting Act of 1984 (CICA),
implemented by our Bid Protest Regulations, provides for the expeditious
resolution of protests with only minimal disruption to the orderly
process of government procurement. See 31 U.S.C. Sec. 3554 (Supp. III
1985). That system simply cannot tolerate the raising of protest
arguments in a piecemeal fashion after the original time set for bid
opening, where the agency extends the time because of the protest,
anymore than it can tolerate a protester presenting in a reconsideration
request evidence or analyses the firm could have raised when it
protested initially. See Military Base Management, Inc., B-224128, Nov.
26, 1986, 86-2 C.P.D. P 616.
The protest is dismissed.
Robert M. Strong
Deputy Associate
General Counsel
Matter of: Marine Industries, Ltd.--Reconsideration
File: B-225722.2
Date: June 24, 1987
Request for reconsideration is denied when based on arguments that
could have been, but were not, raised by protester in course of original
protest.
Marine Industries, Ltd. (MIL), requests reconsideration of our
decision in Marine Industries, Ltd., B-225722, May 21, 1987, 87-1 C.P.D.
P , in which we denied MIL's protest of a domestic shipyard restriction
in invitation for bids No. DACW61-87-B-0014, issued by the United States
Army Corps of Engineers for construction of a service barge. We deny
the request.
MIL, a Canadian shipyard, initially contended that the Corps lacked
authority to impose the domestic shipyard restriction of 10 U.S.C. Sec.
7309 (Supp. III 1985), because the requirement for such a restriction
does not apply to the type of vessel in question. Later, in its
comments on the agency report and in an additional submission requested
by our Office, MIL argued that the restriction generally has been waived
for Canadian shipyards under 10 U.S.C. Sec. 7309(b). That provision
reads:
"The President may authorize exceptions to the prohibition in
subsection (a) requiring domestic construction of military
vessels when he determines that it is in the national security
interest of the United States to do so...."
We rejected MIL's initial argument, and we also found MIL had not
established that the restriction has been waived for the Corps of
Engineers. In requesting reconsideration, MIL challenges our finding
that the restriction as it applies to the Corps has not been waived.
MIL premised its waiver contention on the following argument, made in
its comments on the Corps' protest report:
". . . The President, via various executive orders, has
delegated much of this authority to determine the national
security interest to agency heads. Executive Order No. 12260,
entitled "Agreement on Government Procurement," bestows such power
on the Secretary of Defense on matters of military
procurement...."
From this premise, MIL argued that the Department of Defense had
granted the waiver by international agreement with Canada and by
Secretarial determination and regulation.
We examined Executive Order No. 12,260, which was issued under the
authority of the Trade Agreements Act of 1979, 19 U.S.C. Sec. 2501 et
seq. (1982), and we found that while it did delegate certain authority
to the Secretary of Defense to waive certain trade prohibitions and
restrictions, the delegation expressly excluded the Corps of Engineers.
Consequently, we rejected MIL's contention that the requirement had been
waived for the Corps' contracts.
MIL contends that we erred in concluding that MIL had not established
the existence of a waiver. MIL now argues that its waiver argument did
not rest entirely on the existence of a Presidential waiver under 10
U.S.C. Sec. 7309(b) and on Executive Order No. 12,260. MIL contends
that the Trade Agreements Act of 1979 provides yet another means of
waiving the restriction because, according to the statute, the President
(1) can waive the application of any law regarding government
procurement, 19 U. S.C. Sec. 2511, and (2) can authorize the Secretary
of Defense to waive prohibitions "for products of any country or
instrumentality which enters into a reciprocal procurement agreement
with the Department of Defense," 19 U.S.C. Sec. 2512(b)(3).
Our Bid Protest Regulations require that a request for
reconsideration contain a detailed statement of the factual and legal
grounds for the request, specifying any errors of law or information not
previously considered. 4 C.F.R. Sec. 21.12(a) (1986). Our Regulations
do not permit a piecemeal presentation of evidence, information, or
analyses, and where a party raises in its reconsideration request an
argument that it could have, but did not, raise at the time of the
protest, the argument does not provide a basis for reconsideration.
Joseph L. De Clerk and Associates, Inc.--Reconsideration, B-221723. 2,
Feb. 26, 1986, 86-1 C.P.D. P 200.
In addition to the above-quoted comment on the agency report, MIL
argued, in the further submission requested by our Office, that the
Department of Defense had granted Canada, through regulations and
international agreements, "the waiver identified under 10 U.S.C. Sec.
7309(b)." In our view, it is clear that MIL was still relying on that
statutory provision and on the Presidential delegation of authority to
the Secretary of Defense under Executive Order No. 12,260 as the
foundation of its argument. MIL did not argue that the waiver was not
required because the Corps of Engineers, as part of a military
department, was subject to other Department of Defense regulations
waiving United States procurement restrictions for Canadian firms, or
that either the President or the Secretary of Defense had waived the
domestic shipyard restriction using separate authority under Title 19 of
the United States Code. These arguments therefore cannot now constitute
a basis for reconsideration.
The request for reconsideration is denied.
Harry R. Van Cleve
General Counsel
Matter of: Marine Industries, Ltd.
File: B-225722
Date: May 21, 1987
Military contracting agency properly included, in solicitation for a
barge domestic shipyard restriction of 10 U.S.C Sec. 7309 since
restriction applies to the procurement of any vessel by a military
department.
Marine Industries, Ltd. (MIL), a Canadian shipyard, protests the
inclusion of a domestic shipyard restriction in invitation for bids
(IFB) No. DACW61-87-B-0014, issued by the United States Army Corps of
Engineers for construction of a service barge. The Corps will use the
barge (a nonpropelled vessel containing a machine shop and an electrical
power plant) for maintenance and repair of locks and dams, and for
emergency salvage and recovery operations. The Corps incorporated the
restriction into the IFB to comply with 10 U.S.C. Sec. 7309 (Supp. III
1985) which reads, in part:
"(a) Except as provided in subsection (b), no naval vessel, and
no vessel of any other military department... may be constructed
in a foreign shipyard.
"(b) The President may authorize exceptions to the prohibition
in subsection (a) when he determines that it is in the national
security interest of the United States to do so. . . ."
Since MIL is a Canadian shipyard, this provision precludes it from
competing for the award. MIL contends that the Corps lacks authority to
impose the restriction because the cited statute either does not apply,
or the restriction has been waived for this procurement. We deny the
protest.
Does the Restriction Apply to
the Current Procurement?
MIL's argument that the restriction does not apply is based on the
restriction being included in Title 10 of the United States Code, which
applies to the Armed Forces and which, MIL asserts, covers only military
functions of the Corps. Since the procurement is for a civil works
vessel and is financed by a Title 33 (Navigation and Navigable Waters)
civil works revolving fund, 33 U.S.C. Sec. 576 (1982), MIL concludes
that the procurement does not encompass a Title 10 military function,
and therefore is not subject to the restriction. MIL maintains that
limiting the restriction in this manner is consistent with Congress'
reason for enacting the restriction in 1982: to maintain American
shipbuilding capability and know-how in case of war or national
emergency. MIL argues that the military considerations (i.e., the
capability to build warships) found in the legislative history do not
concern a civil vessel, and that it thus is improper to apply the
restriction to other than Title 10 military functions funded by
Department of Defense (DOD) appropriation acts.
We find no merit in MIL's position. On its face, the statutory
restriction does not distinguish between vessels based on their intended
military or civilian use or the source of the funds used to procure them
but, rather, applies to all vessels of all military departments.
Because the barge here is considered a vessel, and the Corps of
Engineers is part of a military department (Army), we read the plain
terms of the restriction as applying to this procurement.
The legislative history of the restriction supports our
interpretation. Although the restriction, as initially codified in
1982, applied only to the Navy, it was expanded in 1984 to apply to all
military departments by Section 8095 of Title VIII of the 1985 DOD
Appropriations Act, enacted as part of Pub. L. No. 98-473, Sec. 101(h),
98 Stat. 1837, 1941 (1984) (hereafter, 1984 amendment). The original
provision and the 1984 amendment both were prompted by congressional
concern that a dwindling domestic shipbuilding capacity would have a
serious negative impact on the nation's ability to respond to national
emergencies. The scope of the restriction was expanded to preclude the
other military departments from purchasing foreign vessels and thus
better serve the original intent of the restriction, which the House
Committee on Appropriations characterized as an effort to preserve
adequate domestic shipbuilding capacity by barring DOD procurement of
ships from foreign shipyards. See H.R. Rep. No. 98-1086, 98th Cong., 2d
Sess. 290. 1/ There is no indication that Congress intended to address
the problem by limiting the restriction to vessels procured for military
use and, given our reading of the statute itself, we find no basis for
assuming that Congress had such an intent.
The fact that the barge will be procured with funds from the Corps'
civil works revolving fund rather than from the Corps' military support
appropriation does not change our conclusion. No matter which funds the
Corps uses to procure a vessel, it remains that the Corps is a military
department whose vessels are subject to the restriction. By the terms
of the revolving fund statute, moreover, the functions for which the
fund is available include "the furnishing of facilities and services for
military functions of the Department of the Army." 33 U.S.C. Sec. 576.
Thus, we do not agree that purchases out of the fund are exempt from the
subject restriction otherwise applicable to the Corps.
Has the Restriction Been
Waived for Canadian Firms?
As an alternative argument, MIL contends that the President
effectively waived the restriction, as it applies to Canadian firms,
under Executive Order No. 12,260, 46 Fed. Reg. 1653 (1981), reprinted
in 19 U.S.C. Sec. 2511 app. at 1027 (1982). The Executive Order states
that the Secretary of Defense is authorized to waive certain trade
prohibitions and restriction. According to MIL, the Secretary, using
the authority in the Executive Order, has issued regulations removing
domestic procurement restrictions otherwise applicable to Canada. We
find this argument to be without merit. The cited Executive Order
states that it only applies to procurements of eligible products by
specifically listed executive agencies. Although the DOD is listed, the
Corps of Engineers is expressly excluded from the list.
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ See also, Hearings on Department of Defense Appropriations for
1985 Before the Subcomm. on the Department of Defense of the House Comm.
on Appropriations, 98th Cong., 2d Sess. (Part 7) 45-58 (1984) (dwindling
shipyard capacity and its effect on the nation's sealift capability
during national emergencies).
Matter of: General Exhibits, Inc.
File: B-225721
Date: May 5, 1987
1. Agency's decision to exclude an offeror from the competitive range
is proper where the offeror's technical proposal ranked fifth of seven
proposals received and where the agency reasonably considered the
offeror's technical proposal to be so deficient as to require major
revisions before it could be made acceptable.
2. Protest based on alleged deficiencies in a solicitation is
untimely and will not be considered on the merits when not filed with
General Accounting Office or the contracting agency prior to the closing
date for receipt of initial proposals.
General Exhibits, Inc. protests its exclusion from the competitive
range under request for proposals (RFP) No. 26387-P(84)-0016, issued by
the National Institutes of Health (NIH), Department of Health & Human
Services. The RFP requested proposals to design interactive exhibits at
the NIH Visitor Information Center. The work includes developing a
detailed conceptual plan for design of interactive exhibits, building
prototype exhibits, and furnishing graphics and space plans, as well as
identifying audiovisual and computer software to be developed and
acquired under separate contracts.
We deny the protest in part and dismiss it in part.
The RFP was issued on December 12, 1986 and prospective offerors were
"urged and expected" to attend a site visit on December 16. Twenty-four
firms sent representatives to the site but General Exhibits did not.
The RFP provided that the government would award a contract to the
responsible offeror whose offer conforming to the solicitation is the
most advantageous to the government, cost or price and other factors
considered. The RFP contemplated the submission of separate technical
and cost proposals. The solicitation's instructions for preparation of
technical proposals cautioned offerors that technical proposals should
be "in as much detail as you consider necessary to fully explain your
proposed technical approach or method" and that the technical proposal
should reflect a clear understanding of the nature of the work.
Further, the RFP also stated that information as to how the offeror
intends to meet each requirement must be provided "in sufficient detail
to substantiate the claim that the offeror is able to meet all
requirements."
The RFP specified that various areas of information were required to
be addressed by each offeror in its proposal, generally including a
detailed work plan, project organization, staffing, and management, and
names and resumes of important technical personnel. The RFP contained
the following evaluation factors for award:
Points
(1) Past experience in design of interactive science exhibits
(35 points)
(2) Qualifications of Project Director and Staff (30 points)
(3) Soundness of Management Plan including Statement of Work
(35 points)
Concerning cost, the solicitation stated that "paramount
consideration" would be given to technical evaluation of proposals
rather than cost or price.
By the proposal receipt due date of January 12, 1987, seven
proposals, including one from General Exhibits, were received by the
agency. After the technical evaluation report was issued, the
contracting officer found three offers to be within the competitive
range and four offers, including that submitted by General Exhibits, to
be unacceptable and outside the competitive range. General Exhibits'
technical proposal had been ranked fifth of seven proposals received.
Accordingly, NIH notified General Exhibits that based on a review of the
proposal's technical merit, it was not among those selected for further
consideration. The notice stated that the evaluation committee felt
that the proposal "lacked specificity to the NIH Visitor Information
Center" (was not tailored to the specific circumstances and needs of the
visitor center) and that the General Exhibits supporting staff lacked
experience in the area of interactive exhibits.
General Exhibits disagrees with the agency's evaluation of its
proposal and argues that the rejection of its proposal was not
justified. While our Office has been furnished the evaluation reports
and other relevant exhibits concerning this protest, the agency, which
still has not made an award, considers these documents to be privileged
and has not provided them to the protester. Although we therefore are
unable to reveal technical and cost details concerning the evaluation,
our decision is based on a review of all relevant reports and exhibits
submitted to our Office by NIH.
Our Office will not disturb an agency's decision to exclude a firm
from the competitive range on grounds that it had no reasonable chance
of being selected for award when, considering the relative superiority
of other proposals, this determination was reasonable. Ameriko
Maintenance Co., Inc., B-216406, Mar. 1, 1985, 85-1 CPD P 255. A
protester has the burden of proving that the agency's evaluation was
unreasonable. Robert Wehrli, B-216789, Jan. 16, 1985, 85-1 CPD P 43.
Moreover, an agency's decision to exclude an offeror from the
competitive range is proper where the offeror's technical proposal is so
deficient that it would require major revisions before it could be made
acceptable. Ameriko Maintenance Inc., B-216406, supra.
NIH evaluators found the project management plan proposed by General
Exhibits to be "generic," that is, lacking specificity to the unique
work required by the RFP. According to NIH, the plan failed to provide
an estimate of the time for project completion and contained no
suggestions or ideas which would be incorporated into project
performance. Further, the General Exhibits proposal lacked an
evaluation plan for the prototypes as required by the RFP. In response,
General Exhibits argues that the solicitation did not specify the level
of technical detail apparently required by NIH.
Here, despite General Exhibits' assertions and, as we have already
stated, the RFP called for sufficiently detailed information with which
offerors were required to demonstrate a clear understanding of the
requirements. After an independent evaluation of General Exhibits'
proposal, we see nothing unreasonable in NIH's evaluation of the
protester's project management plan. We find that the General Exhibits'
project management plan is completely general in nature, setting forth
general principles that would be followed if General Exhibits were
awarded the contract. There is no discussion of NIH's unique
circumstances or unique needs in the proposal. Apparently, because
General Exhibits failed to attend the pre-bid site visit, it was unable
to tailor its proposal for the specific requirements of NIH. We simply
note that it is incumbent on an offeror to demonstrate the acceptability
of its proposal. See, e.g., Electronics Communications, Inc., 55 Comp.
Gen. 636 (1976), 76-1 CPD P 107. Here, we find that General Exhibits
failed to do so.
NIH also found that General Exhibits' project director had extensive
experience but that "some of the support staff were still attending
school completing degrees." Further, NIH found that the resume for the
consultant responsible for interactive devices was not submitted. In
response, the protester states that the experience of the project
director and the key consultant for interactive devices exceeds those of
anyone in the country and that its support staff has worked with these
two people on other past projects.
We again find no basis for a conclusion that the agency was
unreasonable in its evaluation. Our review of the "Key Personnel"
section supports the agency's finding that the firm's president is well
qualified by extensive experience in the design of exhibits. However,
the proposal listed J. Graham as a consultant for interactive devices
and included the name of John Graham on an organizational chart but the
consultant's resume enclosed was that of John H. Gregory. As the
evaluators could not find Mr. Gregory's name listed in the proposal, his
qualifications were apparently not considered. While this may be, as
asserted by General Exhibits, the result of a typographical error, we
find that the responsibility for this error rests with the protester.
In any event, we find that General Exhibits' project management plan,
discussed above, was so deficient, requiring a complete rewrite, that
the proposal was properly rejected for that reason alone. Thus, there
is no basis to conclude that any misevaluation under this criterion
(qualifications of project director and staff) could have prejudiced
General Exhibits by depriving the firm of an award to which it was
otherwise entitled. See Employment Perspectives, B-218338, June 24,
1985, 85-1 CPD P 715; Lingtec, Inc., B-208777, Aug. 30, 1983, 83-2 CPD
P 279. We therefore deny this protest ground.
Finally, General Exhibits also contends that the RFP was defective
because it did not give adequate information for pricing its proposal,
for the preparation of a realistic development plan, and because it
failed to define the term "interactive exhibits," and failed to disclose
the agency's budget for this project. All of these alleged deficiencies
were apparent on the face of the RFP but were not protested prior to the
closing date for receipt of initial proposals. These issues are
therefore untimely under our Bid Protest Regulations, 4 C.F.R. Sec.
21.2(a) (1986), which require that protests based upon alleged
improprieties in an RFP which are apparent prior to the closing date for
receipt of initial proposals shall be filed prior to that date. General
Exhibits concedes that it made no protest prior to the submission of
proposals but explains that it was unaware that it had to, and that it
may have been "misdirected in submitting a proposal by erroneous
assurances orally provided by NIH," which allegedly encouraged General
Exhibits to submit a proposal even though the firm had not attended the
pre-bid site visit. Protesters are, however, charged with constructive
knowledge of the contents of our regulations since they have been
published in the Federal Register and appear in the Code of Federal
Regulations at 4 C.F.R. Part 21 (1986). B&B Boat Building Inc.--
Reconsideration, B-220852.4, Jan. 22, 1986, 86-1 CPD P 69. Thus, these
issues will not be considered on their merits. See Ratcliffe
Corp.--Request for Reconsideration, B-220060.2, Oct. 8, 1985, 85-2 CPD P
395.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
Matter of: Master Security, Inc.
File: B-225719; B-225720
Date: February 26, 1987
1. Bidder's insertion of a 60-day bid acceptance period in the
Minimum Bid Acceptance Period clause that required an acceptance period
of 120 days but provided a space for specifying a longer period, renders
the bid nonresponsive notwithstanding that the bidder did not change the
120-day period stated on the solicitation cover page.
2. A nonresponsive bid must be rejected and may not be changed or
corrected based on explanations offered by the bidder after bid opening.
Master Security, Inc. protests the rejection of its bids under
invitation for bids (IFB) Nos. GS-11P87MJC0010 and GS-11P87MJC0029,
issued by the General Services Administration (GSA). The IFBs stated in
item 12 on the first page of each bid package (Standard Form 33) and in
the standard Minimum Bid Acceptance Period clause, Federal Acquisition
Regulation, 48 C.F.R. Sec. 52.214-16 (1985), that the agency required a
minimum bid acceptance period of 120 calendar days. The Minimum Bid
Acceptance Period clause also included a space where bidders could
specify a longer acceptance period. Because Master Security inserted
"60" calendar days in the space provided for the longer acceptance
period in each bid, GSA rejected the bids as nonresponsive to the
requirement for a 120-day minimum acceptance period.
We dismiss the protests.
Master Security contends it inserted 60 calendar days to allow GSA 60
more days than the minimum acceptance period--that is a total of 180
days. The protester argues that in light of the clear language
prohibiting less than a 120-day acceptance period, the only reasonable
interpretation of its bids was that they specified an additional 60 days
for acceptance. Master Security maintains that if it had intended to
take exception to the required 120-day minimum acceptance period, it
would have changed the requirement in item 12 on the first page of each
bid package.
We do not agree that the bids, reasonably interpreted, manifest the
bidder's intention to comply with the minimum acceptance period. The
fact that Master Security did not alter the stated 120-day minimum
acceptance period in item 12 is not relevant since that provision
expressly stated that the minimum acceptance period provided in item 12
would not apply if the bidder inserted a different time period.
Furthermore, the language of the Minimum Bid Acceptance Period clause
stated that it superseded any language pertaining to the acceptance
period that appeared elsewhere in the solicitation. See Cardkey
Systems, B-220668, Jan. 29, 1986, 86-1 CPD P 105.
The Minimum Bid Acceptance Period clause warned that while bidders
were permitted to specify a longer acceptance period than 120 days, a
bid allowing less than the required minimum acceptance period would be
rejected. It therefore was clear that the insertion of less than 120
calendar days would be unacceptable. See Dean's Security Professionals,
B-224429, July 31, 1986, 86-2 CPD P 132. The only reasonable
interpretation of Master Security's bids was that they took exception to
the requirement for a 120-day minimum acceptance period.
Because the minimum acceptance period of 120 days was a material term
of the IFB, GSA was required to reject Master Security's bids as
nonresponsive for taking exception to the stipulated minimum period.
See Central States Bridge Company, Inc., B-219559, Aug. 9, 1985, 85-2
CPD P 154. Regardless of Master Security's actual intention, which it
argues was to add 60 days to the acceptance period, it wrote 60 days in
the space for its proposed acceptance period. The responsiveness of a
bid must be determined from its face at bid opening, and it may not be
changed or corrected on the basis of explanations offered by the bidder
after bid opening. Id.
Master Security asserts that its bids should be considered because
they were low. It is well established, however, that the importance of
maintaining the integrity of the competitive bidding process outweighs
any cost advantage of accepting a nonresponsive bid. See Electrical
Systems Engineering Co., B-223199, Sept. 4, 1987, 86-2 CPD P 258. A
bidder offering a shorter acceptance period than required under the IFB
would have an unfair advantage over other bidders, in that the bidder
could refuse to extend its acceptance period if unanticipated cost
increases occurred whereas the other bidders would remain bound under
the longer required bid acceptance period. Further, if the bidder were
allowed to decide after bid opening whether to agree to the required
acceptance period, the bidder would have the advantage of electing
whether to accept or reject a contract after bid opening by choosing
whether to make its bid responsive. See Central States Bridge Co.,
supra. Such a situation obviously would adversely affect the integrity
of the bidding process.
Master Security also complains that the 120-day minimum acceptance
period was excessive and was included in the IFBs as a matter of
administrative convenience. This basis of protest is untimely. Our Bid
Protest Regulations require that where, as here, an alleged solicitation
impropriety is apparent prior to bid opening, the protest must be filed
before bid opening. 4 C.F.R. Sec. 21.2(a)(1) (1986). Master Security
did not file its protest until bids had been opened and its bid
rejected.
The protests are dismissed.
Ronald Berger
Deputy Associate
General Counsel
Matter of: Design Data Systems
File: B-225718.2
Date: March 5, 1987
An agency may consider a proposal that is received after the date
required in the solicitation only if one of the exceptions to the rule
against considering late proposals applies. These exceptions do not
contemplate the submission of an offer after the field of competition
has been defined as of the specified date.
Design Data Systems (DDS) protests that the General Services
Administration will not permit the firm to submit a late offer to renew
DDS' inclusion on the agency's Automatic Data Processing Multiple Award
Schedule Contract. DDS says it was unable to submit an offer by the
November 19, 1986, due date because the solicitation was mishandled
within the company.
An agency may consider a proposal that is received after the date
required in the solicitation only if one of the exceptions to the rule
against considering late proposals applies. ComPath Business Telephone
Systems, B-213575, May 22, 1984, 84-1 C.P.D. P 543. These exceptions do
not contemplate the submission of an offer after the field of
competition has been defined as of the specified date. See Federal
Acquisition Regulation, 48 C.F.R. Sec. 52.215-10 (1986); Harris Corp.,
PRD Electronics Division, B-209154, Oct. 13, 1982, 82-2 C.P.D. P 332.
The stated rule applies to GSA's multiple award schedule contracting.
See Instrumentation Laboratory, Inc., B-213921, Jan. 19, 1984, 84-1
C.P.D. P 86.
The protest is dismissed.
Robert M. Strong
Deputy Associate
General Counsel
Matter of: Happy Penguin--Request for Reconsideration
File: B-225715.2
Date: March 20, 1987
1. Federal Acquisition Regulation, 48 C.F.R. Sec. 14.304-1 (d)
(1986), which provides for consideration of a late modification of an
otherwise successful bid which makes its terms more favorable to the
government, does not apply where the bid only becomes low if the
modification is considered.
2. The maintenance of confidence in the government procurement system
is of greater importance than the possible monetary advantage to be
gained by considering a late bid modification in a particular
procurement.
Happy Penguin requests reconsideration our decision in Happy Penguin,
B-225715, Feb. 20, 1987, 87-1 CPD . In that decision, we dismissed its
protest against the rejection of its telegraphic bid modification as
late under solicitation No. DAAA09-86-B-0281, issued by the U.S. Army
Armament, Munitions and Chemical Command, Rock Island, Illinois. We
affirm the prior decision.
As explained in our prior decision, the Army rejected Happy Penguin's
bid modification because it was not received by the time set for bid
opening, 10 a.m. on January 20, 1987. Happy Penguin stated in its
protest that it sent the modification by Western Union TWX machine on
the day of bid opening and that the message arrived at the Command's TWX
machine at 9:48 a.m. The agency has recently advised us that although
the communications center at the Command received Happy Penguin's TWX at
9:54 a.m., the Procurement Directorate did not receive it until 10:49
a.m.
The standard solicitation clause and pertinent procurement
regulation, Federal Acquisition Regulation (FAR), 48 C.F.R. Sec.
14.304-1(a) (1986), permits consideration of a late telegraphic bid
modification if the lateness is due to government mishandling after
receipt at the government installation.
We dismissed the protest because it appeared that Happy penguin's
failure to allow a reasonable time for the modification to be delivered
from the point of receipt to the designated location for receipt of
bids, and not government mishandling, was the paramount cause for late
receipt. See Monroe Wire & Cable Co., B-221896, May 28, 1986, 86-1 CPD
P 494 (transmission of modification 11 minutes before bid opening allows
insufficient time for delivery to place designated for receipt of bids);
cf., Delta Lighting Corp., B-219649, Oct. 30, 1985, 85-2 CPD P 491.
In its request for reconsideration, Happy Penguin cites the FAR, 48
C.F.R. Sec. 14.304-1 (d), which provides that "a late modification of an
otherwise successful bid which makes its terms more favorable to the
Government will be considered at any time it is received and may be
accepted." Happy Penguin claims that consideration of the bid
modification, thereby rendering the firm the low, responsive bidder,
would have resulted in substantial savings for the government.
By its very terms, however, section 14.304-1(d) is limited to a
modification of an "otherwise successful bid"; it does not apply where,
as here, the bid only becomes low if the modification is considered.
Cf. Space Age Engineering, Inc.-- Reconsideration, B-205594.3, Sept. 24,
1982, 82-2 CPD P 269 (bid as originally submitted must already be the
low responsive bid); Gateway Van & Storage Co., B-198900, July 1, 1980,
80-2 CPD P 4. Therefore, the FAR provision does not require a different
result in this case. Moreover, with respect to the savings that would
have accrued to the government by acceptance of Happy Penguin's bid, it
is well-settled that the maintenance of confidence in the integrity of
the government procurement system is of greater importance than the
possible monetary advantage to be gained by considering a late
modification in a particular procurement. Hargis Construction, Inc.,
B-221979, May 6, 1986, 86-1 CPD P 438.
Accordingly, the prior decision is affirmed.
Harry R. Van Cleve
General Counsel
Matter of: Happy Penguin
File: B-225715
Date: February 20, 1987
Where bidder transmits bid modification by Western Union to agency
TWX machine at 9:48 a.m. on the day of a 10:00 a.m. bid opening, late
receipt of the modification is due to the bidder's failure to allow
sufficient time for delivery to the designated location for receipt of
bids rather than to mishandling by the agency.
Happy Penguin protests the rejection of its telegraphic bid
modification as late under solicitation No. DAAA09-86-B-0281, issued by
the U.S. Army Armament, Munitions and Chemical Command, Rock Island,
Illinois. We dismiss the protest.
The Army rejected Happy Penguin's bid modification because it was not
received by the time set for bid opening, 10:00 a.m. on January 20,
1987. Happy Penguin states that it sent the modifications by Western
Union TWX machine on the day of bid opening and that the message arrived
at AMC's TWX machine at 9:48 a.m. Happy Penguin asserts that the
modification should have been considered because it was "transmitted and
received prior to bid opening."
The standard solicitation clause and pertinent procurement
regulation, Federal Acquisition Regulation, 48 C.F.R. Sec. 14.304-1(a)
(1986), permits the consideration of a late telegraphic bid modification
if the lateness is due to government mishandling after receipt at the
government installation. In this case it appears that the paramount
cause for the late receipt was Happy Penguin's failure to send the
message until shortly (12 minutes) before bid opening rather than
mishandling by the government.
Bidders must allow a reasonable time for bids to be delivered from
the point of receipt to the designated location for receipt of bids;
when they do not do so, late arrival at the designated location cannot
be attributed to government mishandling. See Monroe Wire & Cable Co.,
B-221896, May 28, 1986, 86-1 P 494; Delta Lighting Corp., B-219649,
Oct. 30, 1985, 85-2 CPD P 491.
Happy Penguin left only 12 minutes for its TWX message to be
delivered from the receiving TWX machine to the specified location for
receipt of bids. Although the protester asserts that its modification
was in the possession of the government 12 minutes before bid opening
and the "responsibility for receiving the telegraphic modification
rests with the bid opening officer," Happy Penguin does not allege, nor
are we aware of any basis for holding, that 12 minutes was sufficient
time for the bid modification to have been delivered to the designated
location. See, e.g., Delta Lighting Corp., supra, where we held that 11
minutes was not sufficient time to allow for receipt of a bid
modification sent to an agency's TWX machine. Therefore, it does not
appear that the lateness here was due to government mishandling.
Accordingly, the rejection of the bid modification was proper.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
Matter of: Diversified Computer Consultants
File: B-225714.2
Date: June 19, 1987
1. Protest to contracting agency which was not filed within 10 days
of debriefing in which protester learned that its proposal would not be
considered within the competitive range was untimely, and any subsequent
protest to General Accounting Office is also untimely.
2. A protester has the burden of affirmatively proving its case and
unfair or prejudical motives will not be attributed to procurement
officials on the basis of inference or supposition.
3. General Accounting Office will not consider the merits of an
untimely protest by invoking the significant issue exception of the Bid
Protest Regulations where the protest does not raise one or more issues
of first impression that would have widespread significance to the
procurement community; an allegation of bias that is unsupported by the
record does not raise such an issue.
Diversified Computer Consultants protests the rejection of its
proposal as technically unacceptable by the United States Department of
Agriculture (USDA) under request for proposals (RFP) No. 00-87-R-7 for
laptop computers. Diversified alleges that the USDA improperly used the
concept of "nonresponsiveness" as a pretext to reject its proposal
which, according to Diversified, the USDA had no intention of accepting.
Diversified also complains that the solicitation was significantly
amended just 8 working days before the due date for initial offers,
thereby allowing Diversified insufficient time in which to respond to
the amendment.
We dismiss the protest as untimely.
The solicitation was issued on November 12, 1986, and by the first of
two amendments called for the submission of initial offers by January 5,
1987. By letter dated January 30, the USDA notified Diversified that,
due to a number of deficiencies in its proposal, its offer was not
considered to be within the competitive range. These deficiencies were
identified in the USDA letter.
On February 9, Diversified's vice president spoke with the
contracting officer telephonically and arranged for a complete
debriefing. On February 11, three members of the technical evaluation
team, along with various other personnel from the contracting office
debriefed representatives of Diversified on all of the deficiencies
found in its proposal.
Thereafter, on March 10, Diversified filed a protest with the agency,
requesting that its proposal be reinstated and considered for award.
The agency denied Diversified's protest on April 14. On April 13,
Diversified filed this protest in our Office.
Under our Bid Protest Regulations, 4 C.F.R. Sec. 21.2(a)(2) (1986), a
protester is required to file its protest in our Office not later than
10 days after the basis of protest is known or should have been known to
the protester. Under 4 C.F.R. Sec. 21.2(a) (3), a protester must follow
this same requirement when filing a protest with the contracting agency,
unless the contracting agency imposes a more stringent time requirement.
Accordingly, Diversified was required to file its protest concerning
the technical deficiencies in its proposal either with our Office or
with the USDA within 10 working days of when it knew or should have
known of the basis of its protest. We believe the protester was aware
of several of the agency's bases for rejection of the proposal upon
receipt of the January 30 letter, and certainly after the debriefing.
Consequently, Diversified's initial agency protest, which was filed 19
working days after the debriefing was untimely, and any subsequent
protest to this Office was also untimely. Insofar as the protester
claims that the amendment to the solicitation allowed insufficient time
to respond before proposals were due, that basis for protest is also
untimely. An argument that an amendment to a solicitation allowed
insufficient time for submission of offers should be made prior to the
time for receipt of offers, since the argument relates to an alleged
impropriety on the face of the solicitation. J.E. Steigerwald Co.,
Inc., B-218536, Apr. 19, 1985, 85-1 CPD P 453; 4 C.F.R. Sec.
21.2(a)(1).
To the extent Diversified's complaint amounts to an allegation that
USDA was biased against it because of a controversy that arose under
another contract awarded by the agency to it in 1981, we point out that
the protester has the burden of affirmatively proving its case, and
unfair or prejudicial motives will not be attributed to procurement
officials on the basis of inference or supposition. Cryogenics
Consultants, Inc., B-225520, Mar 4, 1987, 87-1 CPD P 249. There is no
support in the record for the allegation of bias. Rather, the protester
simply infers a bias on the part of the agencys as a result of the
agency's rejection of its proposal for what it characterizes as picayune
reasons and the short time allowed for the submission of initial
proposals after an amendment to the solicitation was issued, and on this
basis the protester argues that, notwithstanding the untimely submission
of its protest, we should consider it under the "significant issue"
exception contained in our Bid Protest Regulations, 4 C.F.R. Sec.
21.2(c).
We will consider an otherwise untimely protest where the protest
raises an issue of first impression that would have widespread
significance to the procurement community. McCain Associates, B-226533,
Mar. 2, 1987, 87-1 CPD P 336. The protest does not meet this standard,
and we therefore will not consider it. First, as indicated, the
allegation of bias is unsupported, and we will not invoke the
significant issue exception on the basis of a unsupported allegation.
Second, we have on numerous occasions dealt with the applicability of
the concept of responsiveness as it relates to negotiated procurements,
see, e.g., Keyes Fibre Co., B-225509, Apr. 7, 1987, 87-1 CPD P 383; the
argument that an amendment to a solicitation allowed insufficient time
for offerors to respond before the date established for the receipt of
initial proposals, J.E. Steigerwald Co., Inc., supra; and most
importantly, the merits of an agency's rejection of a proposal for
technical deficiencies. See, e.g., Digital Devices, Inc., B-225301,
Mar. 12, 1987, 87-1 CPDP 278.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
Matter of: The Presidio Corporation
File: B-225714
Date: February 20, 1987
Contracting agency properly rejected offer as late when lateness was
not due to government mishandling but rather to offeror's failure to
allow sufficient time for proposal to be delivered to procurement office
from the agency's mail facility.
The Presidio Corporation protests the United States Department of
Agriculture's (USDA) rejection of its proposal submitted in response to
request for proposals (RFP) No. 00-87-R-7. We dismiss the protest.
USDA rejected Presidio's offer because it was not received by the
time set for receipt of offers, 2 p.m. on January 5, 1987. Presidio
states that it sent its proposal by express mail on Sunday, January 4,
1987, that the proposal arrived at the USDA's mail unit at 1:35 p.m. on
January 5, and that it was signed for by a USDA mailroom clerk at that
time. Presidio asserts that its proposal should be considered, even
though the contracting officer did not receive the proposal until after
2 p.m., because the proposal had "entered . . . USDA's distribution
channel... prior to the deadline...."
Offerors are responsible for submitting offers so that they reach the
office designated in the solicitation by the specified time. Federal
Acquisition Regulation (FAR), 48 C.F.R. Sec. 15.412(b) (1986). A late
mailed offer may be considered, however, if it was sent by registered or
certified mail not later than 5 calendar days before the proposal
receipt date or if the paramount cause for lateness was government
mishandling after receipt at the government installation. See the
clause at FAR, 48 C.F.R. Sec. 52.215-10 (1985).
Presidio's offer arrived in the mail room at 1:35 p.m., leaving 25
minutes for delivery to the place designated for receipt of offers. It
is well-established that offerors must allow a reasonable period of time
for internal mail delivery; when they do not do so, late arrival of an
offer at the designated location cannot be attributed to government
mishandling. See, e.g., Monroe Wire & Cable Co., B-221896, May 28,
1986, 86-1 CPD P 494; Delta Lighting Corp., B-219649 Oct. 30, 1985,
85-2 CPD P 491.
Here, Presidio left only 25 minutes for delivery from the USDA mail
facility to the designated room for the Procurement Division. Presidio
does not assert that its proposal should have been delivered during that
period or that it would have been but for mishandling by USDA. Presidio
simply states that its offer should be considered because it had entered
the agency's "distribution channel" prior to the time set for receipt of
offers. As indicated, proposals must be received at the specified
location by the designated time--entry into distribution channels is not
sufficient. Presidio's offer, therefore, properly was rejected as late.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
Matter of: JGB Enterprises, Inc.
File: B-225713
Date: May 6, 1987
Agency's refusal to approve protester's alternate product for
critical submarine part is not unreasonable where protester failed to
provide required original equipment manufacturer's drawings in a
sufficiently timely manner to permit the agency to evaluate protester's
product and still make an award in time to maintain an adequate spare
parts inventory of the product.
JGB Enterprises, Inc. protests the award of a contract for air
manifolds, a source approval item, to Aerocustoms, Inc., one of three
listed approved sources, under request for proposals (RFP) No.
DLA700-86-R-2522, issued by the Defense Construction Supply Center
(DCSC), Defense Logistics Agency (DLA). JGB asserts that DCSC
unreasonably delayed the processing of JGB's application for approval of
its alternate product, resulting in the rejection of JGB's offer as
technically unacceptable.
We find the protest without merit.
The solicitation provided that only the products listed by
manufacturer's name and part number in the RFP description were
acceptable. If an alternate product was offered, the offeror was
required to furnish with its offer legible copies of all drawings,
specifications or other data necessary to clearly describe the
characteristics and features of the product being offered. The
solicitation also provided that the agency did not have available on
file original equipment manufacturer (OEM) drawings needed to evaluate
the acceptability of the alternate product. The offeror was requested
to furnish drawings and other data covering the design, materials, and
other listed aspects of the cited source approved product in order to
enable the agency to determine that the offeror's product is equal.
JGB's initial offer of an alternate product, which JGB had reverse
engineered from a Mine Safety Appliance product (one of the listed
approved products), was received by DCSC on June 10, 1986. DCSC states
that on July 9, its buyer consulted with the DCSC Technical Services
Division (TSD), which advised that while JGB's drawings appeared
adequate, detailed OEM drawings were needed to evaluate the offer
because DCSCTSD only had available assembly drawings from the OEM.
Further, since the parts are a critical application item on the Trident
submarine, approval by the Engineering Support Activity (ESA) was
required, which normally involves a 60-90 day reply time from ESA. DCSC
states, and memoranda in the agency report confirm, that on August 21,
the buyer telephoned JGB and advised that detailed OEM drawings were
required, in response to which JGB stated that it could not provide
these drawings, but could supply a sample of the OEM part.
The buyer consulted with TSD again and learned that final approval by
the Navy would be required, and that more detailed drawings were needed
for this purpose. The buyer was advised that JGB's drawings were
inadequate because they were based on only one OEM sample, while they
were required to be based on two samples. On August 29, the buyer
telephoned JGB and provided it with this information. On September 9,
DCSC received a telex from JGB, referring to the "recent" telephone
call, and stating that JGB understood that DCSC would contact JGB if
DCSC required any further action to aid in the evaluation of JGB's
alternate product.
On November 6, JGB delivered one sample of the OEM part in question
to DCSC. The DCSC buyer sent this sample part to TSD. On November 20,
an amendment to the RFP was issued, calling for best and final offers on
December 4. Best and final offers were received from JGB and
Aerocustoms.
On December 9, the DCSC buyer again telephoned JGB to advise that OEM
drawings were still required, and that JGB's drawings were unacceptable
because they were based on only one OEM sample. On December 17, JGB
delivered new drawings to the buyer, which he forwarded to DCSC-TSD, but
which apparently were never received by TSD. However, this package
still did not contain the OEM drawings. On January 6, 1987, JGB advised
DCSC that it was in the process of obtaining the required OEM drawings
and requested that DCSC delay award. On January 15, RGB submitted these
OEM drawings to DCSC. On January 27, DCSC made an award to Aerocustoms
on the basis of the supply status of the part, namely that it was
back-ordered, and there was a projected requirement of 729 items before
delivery was due under this contract.
JGB disputes that it was advised on August 21, 1986, or on August 29,
that additional drawinqs were required, claiming that it was not until
December 29 that it was first so advised. JGB contends that this
establishes that DCSC unreasonably delayed evaluation of JGB's product,
because DCSC did not even begin the process until 6 months after the
receipt of initial offers. JGB argues that its September 9 telex
supports its position that it did not receive notice from DCSC that
additional drawings were required until December 29.
In our view, the September 9 telegram does not establish or support
the assertion that DCSC failed to advise JGB that additional drawings
were required. Further, DCSC's memoranda of the conversations show that
JGB had indicated that JGB did not have the drawings available, and this
is confirmed by JGB's January 6, 1987 correspondence. This was itself a
sufficient basis to reject JGB's offer since a procuring agency
reasonably may find an alternate product technically unacceptable where
the offeror fails to provide sufficient information to establish the
acceptability of the part as required by the RFP. Hosco, Inc.,
B-225127, Mar. 6, 1987, 87-1 C.P.D. P . The "Products Offered" clause
made clear that OEM drawings were considered necessary for the
evaluation.
As a general matter, where there is a factual dispute between the
protester and the contracting agency, and the conflicting statements of
the two are the only evidence, the protester has not carried its burden
of proving the case. Menasco, Inc., B-223970, Dec. 22, 1986, 86-2
C.P.D. P 696. In this instance, DCSC's file memoranda specifically
support its version of the facts, while the only evidence provided by
JGB is a telex which does not establish the content as to the disputed
conversations. At best, even if we consider this a factual dispute with
conflicting statements, the protester has failed to prove its case.
Moreover, if JGB is correct that it was not advised until December 29
that additional drawings were required, its protest is untimely. JGB
concedes that on January 6, 1987, it was advised that 60-90 days would
be required for DCSC-ESA to evaluate its product, and JGB also concedes
that it was aware that the item was back-ordered and was needed by the
agency. The crux of JGB's protest is that the preceding 6-month delay
was unreasonable. Thus, JGB knew its basis for protest in this regard,
at the latest, on January 6, but did not file its protest in our Office
until February 9, more than 10 days later. Accordingly, under JGB's
version of the facts, the protest would be untimely under our Bid
Protest Regulations. 4 C.F.R. Sec. 21.1(a)(2) (1986).
With respect to DCSC's general conduct of this procurement, under 10
U.S.C. Sec. 2319(b) (6) (Supp. III 1985), as added by the Defense
Procurement Reform Act of 1984, Pub. L. No. 98-525, Oct. 19, 1984, 98
Stat. 2593, an agency imposing a qualification requirement--that is a
requirement for testing or other quality assurance demonstration that
must be satisfied by a prospective offeror or its product in order to
become qualified for an award--must ensure that an offeror seeking
qualification is "promptly" informed as to whether qualification has
been obtained and, if not, is "promptly" furnished specific information
as to why qualification was not attained. This statutory qualification
requirement is mirrored in the Federal Acquisition Regulation, 48 C.F.R.
Sec. 9.202(a)(4) (1986).
To the extent JGB argues that DCSC's source approval process has not
been "prompt" within the meaning of the statute and implementing
requlations, we disagree. While a contracting agency which restricts a
contract award to an approved source must give nonapproved sources
reasonable opportunity to qualify, Vac-Hyd Corp., 64 Comp. Gen. 658
(1985), 85-2 C.P.D. P 2, a protester's mere allegation that the agency's
procedure for approving alternate products or sources takes more time
than the protester believes is necessary does not constitute a showing
that the procedures fail to provide that reasonable competitive
opportunity. Rotair Industries, Inc., B-224332; B-225049, Mar. 3,
1987, 87-1 C.P.D. P ; JGB Enterprises, Inc., B-218430, Apr. 26, 1985,
85-1 C.P.D.
Here, we have reviewed the administrative record and, in view of the
critical application of the part, we find no evidence of unreasonable
delay. Similarly, in view of the contracting agency's considerable
discretion in establishing qualification and testing procedures, JGB
Enterprises, Inc., B-218430, supra, we do not find any showing that
DCSC's actions lacked any reasonable basis. Notwithstanding JGB's
assertions to the contrary, the written record establishes that DCSC
consistently apprised JGB that additional drawings were required for the
assessment by DCSC-ESA, and requested these drawings from JGB commencing
at the end of August 1986. The solicitation advised that DCSC did not
have these drawings available, and until January 6, 1987, JGB
consistently indicated that it was unable to provide these drawings.
Under these circumstances, we find that DCSC's procedures did provide
JGB with a reasonable opportunity to qualify as an alternate product
source.
JGB also argues that by failing to commence evaluation of JGB's
alternate part until after receipt of best and final offers, DCSC
violated the statutory prohibition against acceptance of other than an
initial proposal that represents the lowest overall cost to the
government. JGB reasons that there was a reasonable chance that if DCSC
had conducted further discussions, JGB's lower priced, technically
unacceptable proposal eventually would have been found more advantageous
to the government. JGB's point is inapposite, however, since award was
not made on the basis of initial proposals.
The protest is denied, as are the claims for proposal preparation
costs and the costs of filing and pursuing the protest.
Harry R. Van Cleve
General Counsel
Matter of: PTI Services, Inc.
File: B-225712
Date: May 1, 1987
1. Protest that specification is in excess of contracting agency's
minimum needs and is unduly restrictive of competition is denied where
there is no showing that agency lacked a reasonable basis for requiring
the contractor's crew to arrive at the site within 2 hours of
notification to begin repairs and to stop leaks of hazardous substance
leaking from transformers where the transformers are located in a
high-rise, densely populated building and where failure to begin work
immediately could seriously affect the health and safety of the
building's occupants.
2. Contracting officer generally has the discretion to determine
whether and under what terms a provision for progress payments should be
included in the solicitation.
PTI Services Inc., protests the terms of invitation for bids (IFB)
No. IM062640, issued by the General Services Administration (GSA) to
procure transformer retrofilling services at a federal building. Since
PTI's initial protest, GSA has issued an amendment to the IFB which
revised to PTI's satisfaction most of the contract clauses and other
terms to which PTI had objected. This decision, therefore, will deal
only with the two issues on which PTI and GSA disagree.
We deny the protest.
The IFB was issued to obtain the services of a firm to convert 15
transformers and switches filled with polychlorinated biphenyls (PCBs)
to non-PCB status by the retrofill process. The IFB requires a lump-sum
base bid for conducting an evaluation of each of the transformers to
determine if it is suitable for the retrofill process and a unit price
for performing the retrofill process on those transformers suitable for
retrofilling.
The first issue pertains to a requirement that the contractor have
crews available to respond within 2 hours after notification of PCB
leaks from the transformers to begin repairs to stop the leaks. PTI
contends that the 2-hour response time requirement is unrealistic
because it requires the contractor to have available on-call crews at
considerable expense. PTI argues that as the transformers are in vaults
in diked areas with adequate capacity to contain a transformer leak
until the clean-up crew arrives, a response time of 24 hours after
notification would be more reasonable.
In response, GSA points out that a previous retrofill project leaked
45 gallons of PCBs and that the requirement for a 2-hour response time
to stop the leaks and begin repairs was developed by the regional
technical personnel in conjunction with GSA's technical personnel in
Washington. GSA insists that a response time of more than 2 hours would
pose an unreasonable risk of injury to health and safety in the event of
a PCB leak and would burden the government personnel with the work
necessary to overcome the hazards to health and safety until the
contractor's crew arrived. In this regard, GSA states that the required
work must be performed on several floors of a high-rise, densely
populated building where a contractor's failure to timely perform could
seriously affect the health and safety of the building's occupants and
otherwise pose unacceptable hazards.
A contracting agency has the primary responsibility for determining
its minimum needs and drafting the specifications to reflect those
needs. Analytics Inc., B-215092, Dec. 31, 1984, 85-1 CPD P 3. Even
burdensome requirements are not objectionable, provided they reflect the
government's minimum needs. Id. Our Office will not question an
agency's assessment of its needs unless the protester shows that the
agency's determination is unreasonable. Gulf Coast Defense Contractors,
Inc., B-212641, Feb. 28, 1984, 84-1 CPD P 243. When a protester
challenges a specification as unduly restrictive of competition, the
burden initially is on the procuring agency to establish prima facie
support for its contention that the restrictions it imposes are needed
to meet its minimum needs. But, once the agency establishes this prima
facie support, the burden is then on the protester to show that the
requirements complained of are clearly unreasonable. See Sunbelt
Industries, Inc., B-214414.2, Jan. 29, 1985, 85-1 CPD P 113.
We find no basis to question the reasonableness of GSA's requirement
to have the contractor's crew on the site of any PCB leaks within 2
hours and to clean up the site as soon as possible. The hazard of such
leaks and spills to people, property and the environment has been widely
recognized. 1/ PTI has failed to rebut the agency's justification for
the specification in question. It has not demonstrated that GSA lacked
a reasonable basis for requiring the contractor to arrive within 2 hours
after notification in order to immediately stop PCB leaks. This is
especially so because the agency has demonstrated that the requirement
concerns the safety of human lives. Further, we think that simply
because PTI would be put to the expense of having on-call crews does not
establish the unreasonableness of the agency's determination of its
minimum needs. Accordingly, we deny this protest ground.
PTI's other objection is that the IFB provides for progress payments
for the inspection work to be performed by the contractor but does not
provide for any progress payments for the retrofilling of the
transformers. Payment for the latter services will be made only when
the contractor submits a certificate that the transformer has been
processed for reclassification to a non-PCB status and the transformer
unit is accepted by the government. PTI contends that the inspection
work for which progress payments will be paid represents no more than 2
percent of the total contract price. PTI argues that payment for the
retrofilling work only after the transformer is reclassified would delay
payment for such work for nearly 1 1/2 years. As GSA is protected
against nonperformance by a 100 percent performance bond, PTI believes
that the lack of progress payments for the retrofilling services is
unreasonable and prejudicial to small firms that cannot obtain financing
necessary to take the place of progress payments.
GSA supports this policy by pointing out that the government receives
no benefit until the transformers actually obtain reclassification. GSA
argues that it is conceivable that if progress payments were authorized
for the process of retrofilling, 90 percent of the contract price could
be paid before any testing revealed that the retrofill process had in
fact resulted in a reclassification of any transformer to non-PCB
status. GSA explains that after the retrofill is completed, the
transformer must be placed in service and used electrically under loaded
conditions before testing of the fluid within the transformers to
determine the PCB concentration. Once tested, transformers which cannot
be certified for non-PCB status must be totaly replaced. GSA states
that the government should not be made to pay for an unsuccessful
retrofill attempt through progress payments; therefore, progress
payments were not authorized and payment will not be made until
acceptance which occurs when testing and certification is completed.
We have held that the contracting officer generally has the
discretion to determine whether and under what terms a provision for
progress payments should be included in the solicitation. 45 Comp. Gen.
809 (1966). This rule is consistent with the Federal Acquisition
Regulation (FAR), 48 C.F.R. Sec. 32.502-1 (a) (1986), which provides
that the contracting officer "may" provide for customary progress
payments. As defined in 48 C.F.R. subpart 2.1, the use of the word
"may" denotes the permissive.
We find that it was not unreasonable for GSA to determine that
protection of the government's interests required that progress payments
not be authorized for the retrofilling process and that payments be made
only after successful completion of these services, in addition to
requiring performance and payment bonds. As GSA points out, the
government derives no benefit until successful completion of the
retrofill process because unsuccessful attempts merely result in having
to replace the transformer at government expense. Therefore, we think
that GSA reasonably determined that the only measurable "progress" in
the work is the actual certification of the transformer to non-PCB
status after completion of the retrofilling services. Accordingly, we
find no abuse of discretion by GSA in specifying the payment terms in
question.
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ The Environmental Protection Agency, under the Toxic Substances
Control Act, 15 U.S.C. Secs. 2601-2629 (1982), has issued regulations
generally prohibiting the manufacture, processing and distribution of
PCBs and PCB items with concentrations of 50 parts per million or
greater. 40 C.F.R. Sec. 761.20 (1986). An exception to this general
prohibition permits the use of PCBs in existing transformers for the
remainder of their natural lives. 40 C.F.R. Sec. 761.30.
Matter of: John Bankston Construction & Equipment Rental,
Inc.--Request for Reconsideration
File: B-225711.2
Date: March 31, 1987
Where protester expressly refused to extend its offer and months
after its offer expired filed protest of the agency's request for an
extension of its offer, prior dismissal is affirmed even though
protester thought its offer was still being considered.
John Bankston Construction and Equipment Rental, Inc., requests
reconsideration of our dismissal of its protest in John Bankston
Construction and Equipment Rental, Inc., B-225711, Mar. 11, 1987, 87-1
C.P.D. P , in which it protested award to other than itself under
request for proposals (RFP) No. R7-20N-86 issued by the General Services
Administration (GSA) for the lease of office space in Beaumont, Texas.
We affirm the prior dismissal.
Bankston had protested that GSA's November 7, 1986, request for
extension of Bankston's offer past its November 15 expiration was
improper. We dismissed Bankston's protest on the ground that it was not
filed within 10 days of Bankston's learning of the request for extension
on November 7.
Bankston now contends that by letter dated December 12, 1986, the
contracting officer stated that Bankston's offer was still under
consideration. The contracting officer's letter also requested that she
be advised no later than December 19, if Bankston would extend its offer
through January 31, 1987. Bankston asserts that it expected the offer
would be considered through January 31.
As we stated in John Bankston Construction and Equipment Rental,
Inc., supra, Bankston refused GSA's November 7 request to extend its
offer, which was expiring on November 15 and Bankston did not file this
protest until February 9, 1987. Therefore, regardless of what the
contracting officer may have later stated to Bankston, as of November
16, Bankston's offer had expired. Since Bankston's protest is against
the request for extension of its offer it should have filed its protest
within 10 days of its learning of the request for extension on November
7 and it is immaterial that Bankston thought its offer was still being
considered after that time.
Harry R. Van Cleve
General Counsel
Matter of: John Bankston Construction and Equipment Rental, Inc.
File: B-225711
Date: March 11, 1987
1. Protest of an alleged apparent defect in a solicitation is
dismissed when filed months after closing date for proposals.
2. Protest that request for extension of offer was improper is
untimely when not filed within 10 days of learning of basis for protest.
John Bankston Construction and Equipment Rental, Inc. (Bankston),
protests any award other than to itself of a contract under request for
proposals (RFP) No. R7-20N-86 issued by the General Services
Administration (GSA) for the lease of office space in Beaumont, Texas.
The protest is dismissed.
Bankston, which had the prior 5-year lease with GSA, alleges that it
was led to believe, both orally and by letter dated June 27, 1986, from
the contracting officer, that it was limited to offering the same
property. Bankston states it would have been more competitive if it had
known it could have offered alternate properties. Bankston also objects
to GSA's several requests for an extension of its offer and suggests bad
faith motivated the requests for extension.
On November 17, 1986, Bankston refused GSA's November 7 request to
extend its offer, which was expiring on November 15,1986, through
December 15, 1986. Bankston filed this protest on February 9, 1987.
Our Bid Protest Regulations require that protects based upon alleged
improprieties in a solicitation which are apparent prior to the closing
date for receipt of initial proposals shall be filed prior to the
closing date for receipt of initial proposals. 4 C.F.R. Sec. 21.2(a)
(1986). All other protests shall be filed not later than 10 days after
the basis of protest is known or should have been known. 4 C.F.R. Sec.
21.2(b).
The RFP called for proposals for "14,055 sq. ft. of office, shop and
parking in Beaumont, Texas." Although Bankston contends that it was
limited to offering its previously leased property by the statements of
the contracting officer, we find on a review of the record submitted by
the protester that GSA did not restrict Bankston to offering only that
property. To the extent that the contracting officer's statements were
interpreted by Bankston as limiting Bankston's offer to a specific
property, such interpretation is clearly not in accord with the
requirements called for in the solicitation. Any property in Beaumont,
Texas, meeting the other requirements of the solicitation could have
been offered.
Therefore, to the extent that Bankston protests an impropriety in the
solicitation, the alleged conflict between the requirements as stated in
the solicitation and by the June 27, 1986, letter from the contracting
officer, it is untimely since the protest of this apparent impropriety
was filed months after closing date.
Likewise Bankston's protest of GSA's November 7, 1986, request that
Bankston extend its offer past its November 15 expiration, is untimely
as it was not filed within 10 days of Bankston's learning of the request
for extension on November 7. 4 C.F.R. Sec. 21.2(b).
The protest is dismissed.
Robert M. Strong
Deputy Associate General Counsel
Matter of: Janke & Company, Incorporated
File: B-225710, B-226897
Date: June 12, 1987
Protest that low temperature and noise level test requirements for
aircraft hydraulic system test stands are impossible to meet and unduly
restrictive is sustained where the record supports the protester's
contention that the requirements have never been met, and the agency
does not establish that they are necessary to meet its minimum needs.
Janke and Company, Incorporated protests as unduly restrictive the
testing requirements included in a military specification for
diesel-powered test stands under request for proposals (RFP) Nos.
F41608-87-R-C033 and F41608-87-RC013, issued by the San Antonio Air
Logistics Center, Kelly Air Force Base, Texas. Janke contends that two
requirements are impossible to meet.
We sustain the protests.
The solicitations, issued on January 30 and April 14, 1987,
respectively, sought offers for trailer mounted, diesel engine-powered
test stands for aircraft hydraulic systems. The military specification
for the test stands requires a number of preproduction environmental
tests, including a low temperature test and a noise level test. Similar
tests have been included in the hydraulic test stand specifications
since at least September 23, 1964, when the predecessor to the current
specification (MIL-S-0026877C (USAF) (99), 27 January 1982) was
promulgated.
The low temperature test requires the diesel engine to be stored at
minus 65 degrees fahrenheit for 24 hours; the temperature to be raised
to minus 40 degrees; the test stand to start after 30 minutes or less
of preheating; and the flow and pressure of the two hydraulic systems
in the test stand to attain certain levels ("rated output") and maintain
those levels for 30 minutes. The noise level test specifies maximum
decibels at various sound frequencies. The specification states that
failure of the test stand to successfully perform these environmental
tests constitutes cause for rejection.
Janke contends that none of the firms that has manufactured
diesel-powered test stands for the Air Force and Navy, including itself
and APS Systems, Inc., ACL-Filco, and Hydraulics International, Inc.,
has ever produced a test stand meeting the low temperature and noise
level tests. Janke states that it has provided hydraulic test stands
and ancillary equipment to the Air Force and Navy for more than 20
years, and that during this period, compliance with the tests has not
been required of any manufacturer. The protester raises the issue in
these procurements because the Air Force cited failures to pass the low
temperature and noise level tests as two of several grounds for
terminating two recent Janke test stand contracts.
The Competition in Contracting Act of 1984 requires agencies to
develop specifications in such a manner as is necessary to obtain full
and open competition and to include restrictive provisions only to the
extent necessary to satisfy agency needs or as authorized by law. 10
U.S.C. Sec. 2305(a) (1) (Supp. III 1985). When a protester challenges
specifications as presenting such a high risk that they are unduly
restrictive of competition, the burden is on the agency to establish
prima facie support for its contention that the restrictions it imposes
are needed to meet its minimum needs. Once the agency establishes such
support, the protester must show that the requirements complained of are
unreasonable. Cardion Electronics, B-218566, Aug. 15, 1985, 85-2 CPD P
172.
Janke argues that the diesel engines used to power the hydraulic test
stands will not start under the conditions for the low temperature test
set forth in the specifications.
In support of this contention, Janke has submitted a 1984 test report
on an ACL-Filco hydraulic test stand in which the engine did not start
for more than 2 hours, even though the ground rules for the test were
violated (a booster battery was attached and room temperature fuel was
used), and the rated output was never achieved. A 1984 low temperature
test report for a test stand manufactured by Hydraulics International
for the Navy reflects similar deficiencies: a booster battery and
battery charger were required to start the motor. First article test
reports for Janke test stands in 1980 and 1986 show failures to meet the
low temperature requirements. The Janke engines started only after
replacing the batteries and raising the temperature to 0 degrees, a
violation of the test conditions. The protester also has submitted
evidence of a prior waiver of tests for a test stand manufactured by APS
Systems, Inc., and studies of low temperature battery operation
conducted with respect to a turbine driven test stand. Janke argues
that these reports establish the impossibility of starting the test
stand diesel engines at minus 40 degrees without heating and recharging
the batteries or using additional batteries or another electrical
source.
The Air Force states that it recognizes that the low temperature test
is "very difficult," but that its engineers believe the requirement can
be met. Initially the Air Force stated that hydraulic test stands
manufactured by ACL-Filco under its 1978 contract passed the low
temperature tests, but that the contract records were no longer extant.
As discussed above, Janke has submitted the first article test report
for that contract, which it obtained through the Freedom of Information
Act, showing that ACL-Filco's test stand failed the low temperature test
in several respects. The Air Force apparently no longer questions the
protester's assertion that the specification has never been met, and in
a September 6, 1986 letter to Janke, the agency stated that "we agree
with your questioning the ability of any hydraulic test stand to fully
pass this low temperature test requirement."
The agency's sole support for its contention that the low temperature
test, as included in the protested solicitation, is required to meet its
minimum needs is as follows: "Based on worldwide support needs, the
minus 40 degrees reading is necessary to meet Air Force operating
requirements including bases in northern tier states and the Alaska Air
Command."
The issue here is not whether the test stands must operate in minus
40 degree temperatures, but whether the low temperature test should
include the use of booster batteries and other aids to start diesel
engines in such an envirorment. For example, the report on Hydraulics
International's test stand stated that a portable 1500 BTU hot air
blowing heater, a fresh booster battery, and a battery charger must be
used in starting the diesel engine in extreme cold. We assume that
these or similar measures are used by the Air Force in very cold
climates to start test stand engines.
Although Janke argues that it is impossible, using current battery
technology, to design equipment that will pass the test, we do not reach
this issue and do not intend by this decision to indicate any views on
the question, which we understand is currently before the Armed Services
Board of Contract Appeals in connection with Janke's appeal of two
contract terminations. We do recognize and the Air Force concedes that
prospective contractors will have difficulty producing test stands that
meet the low temperature test as now formulated. Our concern is whether
the Air Force has provided a rational basis for the restriction on
competition inherent in that requirement. We find that the Air Force
has not done so. The agency has not established that its minimum needs
cannot be met by a revision of the low temperature test to reflect
experience with previously procured test stands and current methods for
starting the diesel engines in extreme cold. Consequently, we sustain
this basis of the protest.
Janke argues that the noise level test cannot be passed using the
diesel engine model (Detroit Diesel series 53N) required by the
specification. The protester does not contend that it is technically
impossible to meet the specified noise levels, but that the amount of
noise suppression material necessary to meet requirements at low
frequency levels severely hinders engine performance and creates an
unacceptable hazard for operating personnel. In support, Janke has
submitted first article test reports for ACL-Filco and Janke test stands
showing failures to achieve required noise levels, particularly at low
frequency levels, and Air Force approval for a Hydraulics International
test stand to exceed required noise levels by an average of 7 decibels.
The Air Force does not contend that the noise level test has ever
been met, but asserts that it readily can be. The sole support for the
agency's belief that the specification is necessary to meet its minimum
needs is the following statement: "The decibel levels specified are
established based on Occupational Health and Safety Act (OSHA)
requirements." The Air Force does not refer to any specific OSHA
requirements or state how the test standards are derived from those
requirements, and the relationship between the test standards and OSHA
requirements that we are aware of is not readily apparent. Furthermore,
OSHA restrictions on noise exposure can be met by administrative or
engineering controls or the use of personal protective equipment. The
Air Force has not addressed the availability of these alternative
approaches or its need for a diesel engine that Janke contends is the
basis for the problem in the first instance. We find that the Air Force
has not met its obligation to establish prima facie support for the
challenged noise restriction, and we also sustain Janke's protest on
this basis.
By letter of today to the Secretary of the Air Force, we are
recommending that the low temperature and noise level test requirements
included in the solicitations be revised to conform with the standards
established as achievable in previous procurements of diesel
engine-powered hydraulic test stands. In addition, we find the
protester entitled to the costs of filing and pursuing the protest. The
firm has successfully challenged an unduly restrictive specification,
and, as a result of our recommendation, competition will be enhanced. 4
C.F.R. Sec. 21.6(d) (1) (e) (1986); Southern Technologies, Inc.,
B-224328, Jan. 9, 1987, 87-1 CPD P 42.
We sustain the protests.
Comptroller General
of the United States
Matter of: Glar-Ban
File: B-225709
Date: April 14, 1987
1. A contracting officer may award the contract on the basis of
initial offers, without discussions, where offerors were advised of that
possibility and award would result in the lowest overall cost to the
government. Fact that there may be a delay in effecting the award does
not in itself mandate that discussions be held, since negotiations need
only be opened if a potentially significant proposed price reduction, or
other proposed modification, indicates that they would be highly
advantageous to the government.
2. Fact that the prospective awardee is requested to extend its offer
acceptance period during the administrative processing of the contract
award does not mean that other offerors were treated unequally, since
the competition for the contract effectively had been completed.
Glar-Ban protests the award, based on initial proposals, of a firm,
fixed-price contract to Apache Enterprises under request for proposals
(RFP) No. DAAJ09-86-R-1523, issued by the U.S. Army Aviation Systems
Command for infrared filter assemblies for the CH-47 cargo helicopter.
Glar-Ban basically contends that discussions should have been held
because of the long delay in awarding the contract.
We deny the protest.
The solicitation requested proposals to furnish 3,613 assemblies and
an unevaluated option quantity of 3,613 additional ones. The Federal
Acquisition Regulation (FAR) contract award provision incorporated into
the RFP provided for award on the basis of initial offers, without
discussions, and advised that each initial offer should contain the
offeror's best terms from a cost or price and technical standpoint. See
FAR, 48 C.F.R. Sec. 52.215-16 (1985). The RFP's evaluation and award
factors were limited to cost.
Apache's was the lowest of the three offers received by the October
2, 1986, closing date for receipt of proposals, with Glar-Ban second and
Midland-Ross Corporation third. The proposals included a 60-day
acceptance period. After receiving, on November 21, the results of a
preaward survey which recommended Apache for award, the contracting
officer determined that Apache was a responsible source. However, the
Army states, the contract was not awarded by the offer expiration date
due to administrative difficulties. On January 7, 1987, at the Army's
request, Apache extended its offer to January 31, and the contract was
awarded to Apache on January 28.
Glar-Ban contends that discussions should have been held due to the
delay in contract award. Glar-Ban further contends that all offerors
were not treated equally because only Apache was asked to extend its
offer. If the contracting officer had requested an extension of its
offer, the protester states, Glar-Ban might have lowered its price and,
if that price were lower than Apache's initial offer, the contracting
officer would have been forced to hold discussions.
In response, the Army points out that offerors were on notice that
initial offers should contain their best terms because contract award
might be made on the basis of initial offers without discussions.
Additionally, the contracting officer states that she determined that
adequate price competition and price analysis demonstrated that
acceptance of the most favorable initial proposal, without discussions,
would result in the lowest overall cost to the government.
Under the Competition in Contracting Act of 1984, 10 U.S.C. Sec.
2305(b) (4)(A) (ii) (Supp. III 1985), as implemented by the FAR, 48
C.F.R. Sec. 15.610 (a) (3), a contracting agency may award a contract on
the basis of initial proposals where the solicitation advises offerors
of that possibility, discussions are not held, and the competition or
prior cost experience clearly demonstrates that acceptance of an initial
proposal will result in the lowest overall cost to the government. As
stated above, the Army's RFP did advise that award might be made on the
basis of initial offers; further, at the time the offers were evaluated
it was clear that acceptance of Apache's proposal would result in the
lowest overall cost to the government.
As to whether the subsequent delay in making award required that the
Army nevertheless hold discussions and request best and final offers, we
have held that the contracting agency may award a contract on the basis
of initial offers even where award is delayed and a late price reduction
actually is received, because the decision to open discussions is
discretionary with the contracting agency. The Marquardt Co., B-224289,
Dec. 9, 1986, 86-2 C.P.D. P 660. Negotiations need not be opened unless
a potentially significant proposed price reduction, or some other
proposed modification, indicates that discussions would be highly
advantageous to the government. Id.; Timex Corp., B-197835, Oct. 10,
1980, 80-2 C.P.D. P 266.
Although Glar-Ban states that it might have changed its offered price
had it been approached either through discussions or by a request to
extend the offer, there is nothing in the record suggesting that
Glar-Ban would have proposed a significant price reduction. Under the
circumstances, we cannot conclude that the contracting officer's
determination to award the contract on the basis of initial offers
without discussions was unreasonable, because the competition did
establish that acceptance of Apache's offer would result in the lowest
overall cost to the government.
Glar-Ban also alleges that offerors were treated unequally because
only Apache was requested to extend its offer. The record, however,
indicates that the Army determined to make contract award to Apaches
soon after the closing date for receipt of proposals and had determined
prior to the offer expiration date that Apache was a responsible source.
What occurred between Apache and the Army after that time therefore
involved only the administrative processing of the apparently successful
offer, and there was no reason why other offerors should have been
included. Windham Power Lifts, Inc./Quality Plus Equipment,
Inc.--Request for Reconsideration, B-214287.2, June 18, 1984, 84-1
C.P.D. P 638.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: A. T. Kearney, Inc.
File: B-225708
Date: May 7, 1987
Where a protester alleges that an evaluation factor requiring
knowledge of specific agency sites unduly restricts competition by
limiting it to current agency contractors with security clearances
allowing access to the sites, but the information necessary for proposal
preparation is available from public sources, the protest is without
merit. This is because there is no evidence that the necessity for
site-specific information causes any competitive disadvantage to the
protester.
A. T. Kearney, Inc. protests the evaluation criteria included in
request for proposals (RFP) No. DE-RP0187EH79003, issued January 8,
1987, by the Department of Energy (DOE). The solicitation is for
technical assistance in conducting an environmental survey of all DOE
operating facilities and in analyzing issues relating to compliance with
environmental statutes and regulations. The protester argues that
evaluation of the offerors' knowledge of DOE sites unduly restricts
competition.
We deny the protest.
DOE plans to conduct an environmental survey of 40 operating
facilities to enable it to develop a comprehensive, longrange plan to
correct environmental problems and reduce risks. The RFP souqht
technical assistance in conducting the survey and subsequent analyses
and reports on environmental compliance issues. The solicitation
provided that technical proposals would be evaluated under four
criteria-- technical approach, relevant experience, personnel and
management, and corporate resources. The technical approach criterion,
which is at issue in this protest, includes two subcriteria: (1)
technical approach including discussion of environmental compliance
regulations and requirements with respect to the statement of work, and
(2) technical approach including discussion of DOE sites, operations,
and activities, and the relationship of environmental regulations and
requirements to DOE sites, operations, and activities.
In the solicitation, DOE described application of the technical
approach criterion as follows:
"Each offeror will be evaluated on the offeror's technical
approach and understanding of the Statement of Work, environmental
compliance regulations and requirements, and DOE sites,
operations, and activities. The evaluation will consider the
comprehensiveness of the approach, the scientific soundness of the
proposal, and the relevance of the discussion to DOE's
environmental survey program. Offerors should include innovative
approaches to performing the work, if deemed appropriate."
A. T. Kearney protested the solicitation to our Office on February
6, and did not submit a proposal by the February 9 closing date.
A. T. Kearney contends that by evaluating offerors' understanding of
DOE sites, the agency in effect restricts the competition to current DOE
contractors, because only these firms have the security clearances
necessary to inspect the sites. The protester states that information
about specific sites is neither necessary nor helpful in a determination
of the technical capabilities of offerors. According to A. T. Kearney,
demonstrated knowledge of environmental survey skills and capability at
any potential hazardous waste site are important to this determination,
not knowledge of particular DOE sites. The protester seeks either
removal of the requirement for site-specific knowledge or access to the
sites for all potential offerors.
When a protester challenges specifications as unduly restrictive of
competition, the procuring agency bears the burden of presenting prima
facie support for its position that the restrictions are necessary to
meet its actual minimum needs. This requirement reflects the agency's
obligation to create specifications that permit full and open
competition to the extent consistent with the agency's actual needs. 41
U.S.C. Sec. 253a(a) (Supp. III 1985). The determination of the
government's minimum needs and the best method of accommodating those
needs are primarily matters within the contracting agency's discretion.
Consequently, once the agency establishes support for the challenged
specifications, the burden shifts back to the protester to show that the
specifications in dispute are clearly unreasonable DSP Technology, Inc.,
B-220593, Jan. 28, 1986, 86-1 CPD P 96.
DOE states that some of its operations are unusual, including the
reprocessing and enrichment of nuclear materials and the use of
materials such as beryllium and tritium. The agency apparently believes
that the firm selected to provide environmental support services should
understand and propose technical services relevant to DOE's particular
circumstances. We find it unnecessary to evaluate this asserted
justification for the questioned RFP provision to decide whether the
provision is unduly restrictive, because we do not find the provision to
be restrictive in the first instance.
In its report on the protest, DOE contends that pre-proposal site
visits are both impracticable and unnecessary. The agency lists a
number of unclassified, publicly available technical works, for example,
the National Energy Plan and DOE's annual reports to the Congress, that
generally describe DOE sites, operations, and activities, including
their known and potential effects on the environment. The agency also
listed numerous sources of publicly available information about the
environmental aspects of individual sites, for example, environmental
impact statements. DOE argues that experienced offerors can develop an
understanding of the specific environmental concerns related to DOE
sites, operations, and activities from such literature, so the
procurement is not effectively restricted to current contractors with
access to DOE facilities.
This is supported by the instructions DOE provided to its technical
evaluation committee. In scoring the technical approach criterion,
evaluators were instructed to access offerors' understanding of
technical issues, their description of necessary interdisciplinary
skills, their specific plans for accomplishing the work, and other
considerations; there is no mention of or emphasis on knowledge
regarding specific sites. Also, as DOE points out, the RFP specifically
refers to the need for the successful offeror to obtain necessary
security clearances, implying that there is no requirement or
expectation that offerors will already have such clearances.
While any specification or solicitation requirement is restrictive in
the sense that something is required of offerors, we only consider
protests of restrictions that have an effect on competition, such as
where a restriction works to the disadvantage of a protester in seeking
to contract with an agency. See Mid-Atlantic Service & Supply Corp.,
B-218416, July 25, 1985, 85-2 CPD P 86. Such a specification may be
unduly restrictive. Here, A. T. Kearney has not suggested that it is
in any way disadvantaged in obtaining publicly available information for
the preparation of its proposal. Rather, it contends that in other DOE
procurements in which offerors were required to have some knowledge of
specific sites, the agency has used the requirement to exclude firms
that did not have current access to them.
Agencies may not qive more importance to specific matters in
evaluating proposals than offerors would reasonably expect, based upon
the evaluation factors disclosed in the RFP. Coopers & Lybrand,
B-224213, Jan. 30, 1987, 66 Comp. Gen. , 87-1 CPD P 100; DBA Systems,
Inc., B-224306, Dec. 31, 1986, 86-2 CPD P 722. Based upon the
evaluation factors listed in this RFP, DOE could not reasonably exclude
or penalize otherwise qualified offerors because they lack knowledge
about DOE sites available only through an inspection. The fact that DOE
allegedly has unreasonably applied evaluation factors in other
procurements does not provide grounds for sustaining a protest of this
procurement.
We deny the protest.
Harry R. Van Cleve
General Counsel
Matter of: Lone Star Gas Liquids Processing, Inc.
File: B-225707
Date: March 23, 1987
To be subject to review by the General Accounting Office (GAO) under
the Competition in Contracting Act of 1984 (CICA), a protest must
pertain to a procurement of property or services by a federal agency.
Protest concerning the sale of natural gas does not invoive a
procurement of property or services within the meaning of CICA, and the
GAO will review it only where the federal agency involved has agreed to
such review.
Lone Star Gas Liquids Processing, Inc., protests the sale of natural
gas from the Naval Pretroleum Reserve No. 1, Kern County, Caiifornia,
under invitation for bids (IFB) No. DEFB01-87FE61185, issued by the
Department of Energy on December 23, 1986.
Under the Competition in Contracting Act of 1984 (CICA), our Office
is authorized to review protests concerning proposed contracts for the
"procurement of property or services" by a federal agency. See 31
U.S.C. Sec. 3551(1) (Supp. III 1985). Here, the protest concerns a sale
of energy products by the Department of Energy, and, as such, it does
not involve a procurement of property or services within the meaning of
CICA. Although our Bid Protest Regulations provide for the
consideration of certain nonstatutory protests where the agency involved
agrees to have us decide its protests, 4 C.F.R. Sec. 21.11 (1986), the
Department of Energy has not done so and has advised this Office that it
does not desire us to consider the instant protest. As a result, there
is no basis for review by our Office. See William Everett, B-220400
Nov. 1, 1985, 85-2 CPD P 507, citing Equity Federal Savings Bank, 64
Comp. Gen. 697 (1985), 85-2 CPD P 81.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
Matter of: InterTrade Industries, Ltd.
File: B-225702
Date: June 3, 1987
Bid that included one price for the base quantity and increased
prices for out year requirements, in derogation of solicitation
provision providing that prices for out year requirements are not to
exceed price for base quantity, may be considered notwithstanding
solicitation provision stating that such bids will be nonresponsive
where the record shows that the second-low bid would not have been low,
even if the bidder were permitted to unlevel its bid in the same manner.
InterTrade Industries, Ltd. protests the award of a contract to
Lavelle Aircraft Company under invitation for bids (IFB) No.
DAAH01-86-B-A492, issued by the U.S. Army Missile Command, Redstone
Arsenal, Alabama. InterTrade contends that Lavelle did not comply with
an express solicitation provision regarding pricing and, accordingly,
should have been rejected as nonresponsive. We deny the protest. The
solicitation, issued on August 21, 1986, contemplated the award of a
fixed-price contract for an estimated quantity of 287, plus a contractor
tested first article "Nacelle Assembly, FW." 1/ The IFB contained line
items covering an estimated additional 287 units a year for the next 4
program years; award was to be made to the aggregate low bidder for all
years. Further, the IFB instructed bidders that while unit prices for
the "out year estimates" need not be the same, they must be no more than
the unit price for the current year. The solicitation also stated that
bidders not complying with this provision would be rejected as
nonresponsive.
The procuring activity received three bids in response to this
solicitation. Lavelle, bidding unit prices of $276 for the base
quantity, $261 for program year 1, $282 for year 2, $304 for year 3, and
$328 for year 4, was the apparent low bidder with an aggregate price of
$416,437. InterTrade, bidding a unit price of $350 for the base
quantity, as well as for each of the 4 program years, was second-low
with an aggregate bid of $502,250. The contracting officer initially
determined that, due to its pricing scheme, Lavelle was nonresponsive
and advised InterTrade that it was the apparent low bidder. However,
after further evaluation in consultation with the procuring activity's
legal office, the agency determined that other bidders would not be
prejudiced by acceptance of Lavelle's bid. Consequently, award was made
to Lavelle on January 27, 1987.
The sole issue here is the effect of Lavelle's noncompliance with the
solicitation provision specifying that unit prices for out year
requirements be no higher than the base quantity prices. InterTrade
maintains that the provision requires the contracting officer to reject
Lavelle's bid as nonresponsive.
The Army responds that it accepted the bid in reliance on our
Office's decisions regarding the effect of noncompliance with "level
pricing" provisions, citing Keco Industries, Inc., 64 Comp. Gen. 48
(1984), 84-2 CPD P 491, and Arcwel Corp., B-219961, Dec. 27, 1985, 85-2
CPD P 722. These decisions hold that a bidder's failure to comply with
such a provision, i.e., a term generally requiring constant prices for
items to be procured over the entire course of a contract, does not
automatically preclude consideration of the bid, but rather depends upon
whether such noncompliance is prejudicial to other bidders. Where no
prejudice is found, we have held that the bids, although technically
nonresponsive, nevertheless should be considered.
InterTrade argues that unlike the present situation, none of these
cases dealt with a solicitation expressly providing that bids not
prepared in accord with a pricing requirement would be deemed
nonresponsive. A more analogous case, InterTrade maintains, is
International Harvester Co., B-212341, Sept. 12, 1983, 83-2 CPD P 313.
The IFB at issue in that case contained a Multi-Year Procurement clause
requiring that unit prices for each vehicle to be procured be constant
for all program years and warning that noncompliant bids would be deemed
nonresponsive. InterTrade argues that our decision did not address the
effect of this warning, but instead focused on the discrepancy in the
unit prices of the low bidder, which were $42,009 for the first year and
$42,000 for the second and third years. In view of this minor
variation, InterTrade states, we held that the low bidder's
noncompliance with the pricing clause was properly waivable as an
apparent clerical error and minor informality."
The clause at issue in the International Harvester case is
indistinguishable from the one with which we are now confronted. Our
Office in fact construed the effect of the clause and rejected the same
argument now raised by InterTrade, namely that prior decisions dealing
with level pricing provisions were inapplicable because the
solicitations involved failed to state that noncompliant bids would be
deemed nonresponsive. (In Keco Industries, Inc., 64 Comp. Gen. supra,
the contracting officer had included the warning in a clarifying letter
to bidders). Regardless of the presence of an explicit solicitation
provision, we considered the critical question to be whether the unlevel
pricing worked to the prejudice of other bidders. If we did not find
any prejudice, acceptance of the low bid was not legally objectionable.
This decision is consistent with the concept of bid responsiveness,
that is, whether a bidder has unequivocally offered to provide exactly
what is called for in a solicitation. See Provost's Small Engine
Service, Inc., B-215704, Feb. 4, 1985, 85-1 CPD P 130. The concept
evolved out of a need to satisfy two divergent requirements. The first
is that procuring activities must be assured of acquiring goods or
services that will satisfy their needs, see Johnson Moving & Storage
Co., B-221826, Mar. 19, 1986, 86-1 CPD P 273, an the second is that all
potential bidders must be assured of competing on an equal basis, see
Kentucky Building Maintenance, Inc., B-215397, Dec. 19, 1984, 84-2 CPD P
383. When either of these two requirements are not met as a consequence
of a bidder failing to comply with a material solicitation term, the bid
must be rejected. Where, however, such nonconformance does not work to
the detriment of the government and is not prejudicial to other bidders,
the bid is not precluded from consideration.
Such is the case here. The purpose of the pricing provision included
in this IFB was to prevent bidders from lowering their prices for the
base quantity and inflating their prices of the out year requirements to
the detriment of the government. See Keco Industries, Inc., 64 Comp.
Gen. supra. Although Lavelle did not comply with this provision,
acceptance of its unlevel bid was still most advantageous to the
government, as the highest of its unit prices, $328 for the fourth
program year, was significantly less than Intertrade's level unit price
of $350.
Moreover, Intertrade was not prejudiced by Lavelle's actions.
Bidders are only prejudiced by unlevel pricing if they could have become
low by bidding in the same manner, that is, by also unleveling their
prices. See Kitco, Inc., B-221386, Apr. 3, 1986, 86-1 CPD P 321.
InterTrade has made no attempt to demonstrate that its offer would have
been more advantageous than Lavelle's if it had also submitted unlevel
unit prices. Our own analysis reveals no conceivable manner in which
such a change in pricing would have improved InterTrade's relative
standing. InterTrade's aggregate bid exceeded Lavelle's by $85,813.
Even assuming that InterTrade's level price of $350 per unit figure
reflected its projected costs for the fourth program year, and that the
prices for the other years would have been less but for the level
pricing requirement, to overcome Lavelle's price advantage InterTrade
would have had to lower its per unit price for the remaining
requirements by an average of approximately $75. 2/ We have no reason to
believe that InterTrade could have lowered its prices by such a
significant amount. See Arcwel Corp., B-219961, supra.
Accordingly, rejection of Lavelle's bid for its noncompliance with a
material term of the solicitation is not warranted.
InterTrade also argues that the Army's acceptance of Lavelle's bid
effectively afforded Lavelle "two bites at the apple" in that, after
opening, the firm had an option either to accept or reject award;
according to the protester, Lavelle could have argued that its bid was
not responsive or, alternatively, that its failure to comply with the
pricing requirements should be waived. We find this argument to be
without merit. Lavelle's bid constituted a binding offer to perform at
the terms stated in the bid and, as specified in the IFB, it was not
revocable for a period of 60 days from the date of bid opening.
Acceptance of this offer, thus resulting in the formation of a binding
contract, was dependent solely upon the determination of the contracting
officer that Lavelle was the low, responsive, responsible bidder.
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ The agency advises us that this is a forward cowling (housing) for
the TRI-60 target engine.
2/ In calculating this amount, we divided the difference between
InterTrade's and Lavelle's bids, $85,813, by the remaining requirements,
1,148 units.
Matter of: Interstate Equipment Sales
File: B-225701
Date: April 20, 1987
1. Contracting officer did not improperly influence Small Business
Administration (SBA) decision not to issue certificate of competency
(COC) by communicating her negative views regarding protester's
responsibility and recommending against issuance of a COC. The Federal
Acquisition Regulation encourages a full exchange of information between
the contracting agency and the SBA.
2. Fact that Small Business Administration (SBA) agreed with
contracting officer that protester lacked integrity does not establish
that SBA merely adopted the contracting officer's view without
conducting its own investigation.
3. General Accounting Office will not conduct an investigation for
the purpose of establishing whether protester has a valid basis of
protest. The protester bears the burden of presenting its case.
Interstate Equipment Sales protests the rejection of its offer under
request for proposals (RFP) No. F09603-85-R-1567, issued by Warner
Robins Air Logistics Center for high pressure vacuum sewer and pipe
cleaning trucks. Interstate, a small business, alleges that the
contracting officer improperly induced the Small Business Administration
(SBA) not to issue to that firm a certificate of competency (COC). We
deny the protest.
The contracting officer requested a preaward survey of the low
offeror, Interstate. The survey team recommended against award based on
that firm's lack of technical and quality assurance capability and
failure to meet the requirements of the Walsh-Healey Public Contracts
Act as a regular dealer.
The contracting officer, by letter of December 2, 1986, referred the
matter to the SBA for the possible issuance of a COC. In addition to
the results of the preaward survey, the contracting officer noted that
Interstate certified on a prior contract that it would supply a product
of a small business and in fact delivered equipment made by a large
business. The contracting officer concluded by recommending that a COC
not be issued because "we do not believe that Interstate Equipment Sales
has the capacity or integrity to successfully perform Government
contracts." On December 22, the SBA declined to issue a COC based on
Interstate's failure to refute the allegation of lack of integrity. A
contract was awarded to the next low offeror on December 31.
Interstate principally claims that the contracting officer acted in
bad faith by directing the SBA to deny its application for a COC,
thereby depriving the protester of any realistic chance of being found
responsible.
We do not think that the contracting officer's letter of referral to
the SBA can be said to have "directed" the agency to reject Interstate's
application for a COC; it merely summarized the basis for the
contracting officer's determination of nonresponsibility and urged the
SBA to affirm that determination. Not only are such communications
between the contracting agency and the SBA unobjectionable, they are in
fact encouraged. The Federal Acquisition Regulation (FAR) instructs the
contracting officer to specify in letters of referral to the SBA the
elements of responsibility found lacking, 48 C.F.R. Sec. 19.602-1 (c)
(1986), and provides that when disagreements arise about a concern's
ability to perform, the contracting officer and the SBA shall make every
effort to reach a resolution through the complete exchange of
information. 48 C.F.R. Sec. 19.602-3(a). The fact that a contracting
officer's views are negative does not change her responsibility to
communicate them or show that she acted in bad faith. Cal Pacific
Fabricating, Inc.--Request for Reconsideration, B-214946.2, June 28,
1984, 84-1 CPD P 689.
Furthermore, the fact that SBA agreed with the contracting officer
that Interstate lacked integrity does not establish that SBA merely
followed the contracting officer's "directive" without conducting its
own investigation. The SBA states that it considered the protester's
rebuttal of the contracting officer's findings and its own independent
investigation, along with the preaward survey, in determining not to
issue Interstate a COC. The protester has offered no evidence to refute
this. It therefore has not shown that SBA failed to follow its own
regulations or acted improperly in considering its COC application.
Further, Interstate requests that we conduct an investigation of
these matters. The protester has the obligation of presenting its case,
and we will not conduct investigations for the purpose of establishing
whether a protester may have a valid basis of protest. Nickum &
Spaulding Associates, Inc., B-222468, June 10, 1986, 86-1 CPD P 542.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Systems Integrated
File: B-225700
Date: May 8, 1987
1. Where an invitation for bids required descriptive literature
sufficient to determine whether the offered item conforms to the
technical specifications and bidders were cautioned that the literature
would be used in the technical evaluation of bids, the procuring agency
properly rejected as nonresponsive a bid that included inadequate
descriptive literature.
2. Where the solicitation requires descriptive literature clearly
marked to show that the offered item complies with all aspects of the
specifications, a bidder's statement that it will comply with the
specifications is insufficient to determine the technical acceptability
of the bid.
3. The procuring agency properly did not discuss deficiencies in
protester's bid prior to contract award because the Federal Acquisition
Regulation requires the evaluation of bids without discussions, and it
is a fundamental principle of sealed bidding that responsiveness must be
determined on the basis of the bid as submitted.
4. Protest that solicitation requirement for descriptive literature
does not comply with the Federal Acquisition Regulation, raised after
bid opening, is untimely under Bid Protest Regulations, which require
that a protest of alleged improprieties in a solicitation be raised
before bid opening.
Systems Integrated (SI) protests the rejection of its bid as
nonresponsive and the award of a contract to General Electric Company
(GE) under invitation for bids (IFB) No. M62204-86-B-0028, issued by the
United States Marine Corps Logistics Base, Barstow, California, for a
dynamometer test stand. The stand will facilitate testing of military
tracked vehicle cross-drive transmissions. SI basically contends that
the Marine Corps erred in rejecting its low, responsive and technically
complete bid; that discussions should have been held prior to award;
and that the Marine Corps was biased against SI.
We deny the protest in spart and we dismiss it in part.
Section C of the IFB set forth design requirements and mandatory
specifications that the offered product had to meet. Bidders were
required to submit with their bids descriptive literature that was
clearly marked to show that the offered dynamometer test stand complied
with all aspects of the IFB. Bidders were cautioned that the
descriptive literature would be used for the technical evaluation of the
bid and that the failure to submit the required literature would result
in rejection of the bid. The IFB advised bidders that award would be
made to the responsible bidder whose conforming bid would be most
advantageous to the government, price and other factors considered.
Four bids, ranging from SI's low bid of $1,339,564 to a high of
$1,986,360 were received by the bid opening date. After a technical
evaluation, the Marine Corps rejected SI's bid as nonresponsive because
SI failed to submit sufficient descriptive literature and, as a result,
the agency found itself unable to determine that the bid conformed to
the specifications. The Marine Corps technical review indicated that
SI's bid package did not include descriptive literature to cover the
material requirements for the closed loop cooling system, flush cycle
system, electrical cabling, signal control station, test cell control
room and the DC motoring dynamometer control. The Marine Corps also
found discrepancies and a lack of sufficient details in some areas of
the submitted descriptive literature. GE, second low with a $1,449,950
bid and determined to be technically responsive and responsible, was
awarded the contract.
SI filed its protest within 10 calendar days of contract award. The
contracting officer, therefore, suspended contract performance pending
the outcome of this protest. See Bid Protest Regulations, 4 C.F.R. Sec.
21.4(b) (1986).
SI contends that its bid was responsive because SI stated in the bid
that it would comply with the specifications. SI further contends that
descriptive literature was not needed to evaluate bids anyway because
the IFB's detailed specifications left no doubt as to what the
contractor was obligated to provide. Citing our decision in White
Plains Electrical Supply Co., Inc., 55 Comp. Gen. 340 (1975), 75-2
C.P.D. P 205, SI contends that the legitimacy of the requirement for
descriptive literature is questionable if the requirement can be met by
parroting back the solicitation's specifications. Finally, SI complains
that although it called the contracting officer on a number of
occasions, she failed to discuss the deficiencies in the bid before
awarding the contract to GE.
The Marine Corps responds that the contracting officer was required
by the Federal Acquisition Regulation (FAR), 48 C.F.R. Sec. 52.214-21(c)
(1986), incorporated into the IFB, to reject SI's bid because the
descriptive literature submitted failed to show that the offered product
conformed to the solicitation's requirements and also contained numerous
points of noncompliance. The Corps states it determined that SI's
statement that it would comply with the invitation's requirements was
not sufficient for evaluation of technical acceptability. With respect
to discussion of deficienciess prior to award, the Corps notes that the
FAR, 48 C.F.R. Sec. 14.101 (d), expressly forbids such discussions,
because responsiveness must be determined at the time of bid opening
from the bid itself.
Where descriptive literature is required to establish the bid's
conformance with the specifications, and bidders are so cautioned, the
bid must be rejected as nonresponsive if the literature submitted fails
to show clearly that the offered product conforms to the specifications.
Zero Mfg. Co., B-210123.2, Apr. 15, 1983, 83-1 C.P.D. P 416. This is
so even if the offered product in fact possesses the required features.
Harnischfeger Corp., B-220036, Dec. 19, 1985, 85-2 C.P.D. P 689. We
will not disturb the agency's determination concerning the adequacy of
required descriptive literature absent a clear showing of
unreasonableness, abuse of discretion, or a violation of procurement
statutes and regulations. DeVac, Inc., B-224348.2, Sept. 3, 1986, 86-2
C.P.D. P 254.
We think the Marine Corps properly rejected SI's bid. SI offered a
dynamometer test stand designed around standard off-the-shelf hardware
with all major components purchased from GE and Hewlett Packard. SI's
bid included GE descriptive literature, which generally describes the
components SI proposed to use in the dynamometer test stand. For
example, with regard to the closed loop cooling system, which the
technical review indicated was not adequately covered by SI's
descriptive literature, the submitted literature generally describes the
GE inductor dynamometer cooling system 1/ and states that where water
quality is questionable, a closed system should be used, but provides no
details of the closed system. The IFB's specifications, on the other
hand, required a closed loop system with a number of specified features.
Similarly, with regard to the other components for which the Marine
Corps determined, and SI does not deny, that descriptive literature was
not provided, SI defends its bid submission by stating that the
components were generally described in narrative form and the words
"will comply" in the bid indicated that its offered component would meet
specification requirements. A bidder's simple statement that it will
comply, however, along with inadequate or no descriptive literature, is
not sufficient to satisfy an IFB requirement for literature that would
enable the agency to determine technical compliance. Zero Mfg. Co.,
B-210123.2, supra.
As to SI's contention that the specifications spelled out SI's
contractual obligations, so that descriptive literature was not really
needed to evaluate bids, the question when deciding bid responsiveness
is, as stated above, whether the bid as submitted establishes that the
offered item complies with the IFB's terms. We think it clear that
merely repeating the specifications in a bid would not have been
sufficient to do so here. In our decision SI cites, White Plains, we
held that the failure to address an informational IFB requirement for
the name of the manufacturer, catalog number and manufacturer's
specifications should not have required the rejection of the bid since
the procured item, electrical cable, was not unusually complex, was
adequately described in the solicitation, and the record provided no
adequate justification for the informational requirement. In this
decision, however, the item being procured is complex, and we have no
basis to conclude the Marine Corps could accept a bid, without
literature, if the bid only parroted back the specifications. Instead,
we think it is clear from the record that, as bidders were cautioned by
the IFB, descriptive literature in fact was needed to evaluate bids.
Additionally, the inadequacy of submitted descriptive literature may
not be cured by discussions or explanations offered after bid opening.
Harnischfeger Corp., B-220036, supra; FAR, 48 C.F.R. Sec. 14.101(d).
The Marine Corps therefore acted properly in refusing to discuss with SI
the deficiencies in the firm's bid.
SI's allegation of discrimination is based on what the firm views as
peculiar handling of this procurement by the Marine Corps. In support
of its allegation SI states that the contracting officer asked for an
extension of its bid acceptance period to consider the company's
nonresponsive bid; SI was also low on a prior procurement for the same
item and that procurement was canceled after the Marine Corps conducted
an in-depth technical evaluation; and SI's bid of a dynamometer with
major components manufactured by GE at a price $160,000 lower than GE's
was rejected in favor of GE's higher-priced product.
In response, the Marine Corps states that bid extensions were
requested because the technical review of bids could not be completed by
the December 1, 1986, deadline and SI's bid was not determined to be
nonresponsive until December 5; the prior procurement was canceled
because all bidders failed to meet the technical specifications; SI's
low bid was rejected because it was nonresponsive; and GE was awarded
the contract because it was offered the lowestpriced technically
responsive bid.
Where bias is alleged, the protester has the burden to prove its
case, and we will not attribute unfair or prejudicial motives to
procurement officials on the basis of inference or supposition. Sage
Diagnostics, B-222427, July 21, 1986, 86-2 C.P.D. P 85. We have no
basis on which to question the Marine Corps' action in the prior
procurement and, as stated above, SI's bid in the instant competition
was nonresponsive.
SI further contends that the Marine Corps acted unfairly in not using
whatever literature GE had submitted to determine the technical
acceptability of the GE components offered by SI. The record does not
establish, however, that SI and GE offered the same components with
identical options. Additionally, SI also offered Hewlett Packard
components. The Marine Corps, therefore, would not have been able to
determine the technical acceptability of all components offered by SI by
examining descriptive literature provided by GE.
In its comments on the agency protest report, SI also contends that
the following IFB statement requiring descriptive literature is vague
and fails to comply with FAR, 48 C.F.R. Sec. 14.202-5(d):
"Descriptive literature shall be submitted to show that the
item offered is in compliance with all aspects of the bid.
Literature shall be clearly marked to show compliance and will be
used for technical evaluation of the bid. Failure to submit the
required descriptive literature will result in rejection of the
bid."
The cited FAR provision requires the IFB to state clearly what
descriptive literature is to be furnished; the purpose for which it is
required; the extent to which it will be considered in the evaluation
of bids; and the rules that will apply if a bidder fails to furnish
literature or if literature furnished does not comply with IFB
requirements. SI contends that it does not know what the words "the
item" in the IFB statement mean, and that there should have been a
listing of items requiring descriptive literature in the solicitation.
We dismiss this contention as untimely under our Bid Protest
Regulations, 4 C.F.R. Sec. 21.2(a) (1). Since the alleged impropriety
in the solicitation was apparent prior to bid opening, the protest was
required to be filed prior to the time. In any event, since the
dynamometer was the only item required by the IFB, the words "the item"
must refer to it. Additionally, section C of the IFB provides the
specific requirements of the dynamometer's components that obviously
would have to be clearly marked on any descriptive literature that was
provided. Further, the IFB provision clearly advises of the purpose for
and the consequences of not complying with the descriptive literature
requirement.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
1/ While testing rotating machinery, the GE inductor dynamometer
system absorbs energy losses, which are dissipated by waterflow through
the dynamometer cooling system.
Matter of: Red Fox Industries, Inc.--Reconsideration
File: B-225696.2
Date: March 18, 1987
Dismissal of protest against failure to consider firm's proposal in
procurement restricted to mobilization base producers, not filed until
after closing date of solicitation, is affirmed. Restriction was
clearly stated in solicitation and protester, who is not a mobilization
base producer, was not eligible for award of contract.
Red Fox Industries, Inc., requests reconsideration of our decision in
Red Fox Industries, Inc., B-225696, Feb. 20, 1987, 87-1 C.P.D. P , in
which we dismissed as untimely a protest of the Department of the Army's
failure to consider Red Fox's offer under request for proposals (RFP)
No. DAAA09-86-R-1900. We affirm the decision.
The synopsis in the Commerce Business Daily by which the Army
initiated this procurement stated that this was a mobilization base
procurement restricted to three named firms. As we noted in our prior
decision, the RFP was issued on November 21 and proposals were due on
December 31. The contract was awarded to one of the three named firms.
Red Fox stated that an Army contract specialist advised it on
December 22 that the firm would be eligible for award if it submitted a
proposal, even though Red Fox was not a mobilization base producer.
Further, Red Fox argued that a May 21, 1986, Mobilization Base Policy
established a moratorium on such restrictions except in circumstances
not applicable here. Red Fox argued that it was not until January 22,
1987, that it learned, in a meeting with the Army, that the firm's
proposal would not be considered; on February 4, Red Fox protested the
Army's determination to exclude the firm from the competition to our
Office. We found Red Fox's protest to be untimely because the
mobilization base restriction which excluded Red Fox from the
procurement was clearly stated in the RFP and Red Fox did not file its
protest before the closing date for the solicitation, as required by our
Bid Protest Regulations for apparent solicitation improprieties. 4
C.F.R. Sec. 21.2(a)(1) (1986).
Red Fox contends that we misconstrued its protest as a challenge to
the Army's determination to conduct this acquisition as a mobilization
base procurement when, in fact, Red Fox was contesting the Army's
failure to consider the firm for inclusion in the mobilization base and,
thus, eligible for award of the contract. Red Fox asserts that its
protest on this latter basis was timely because it was filed within 10
working days of the firm's meeting with the Army, when the protester
learned that it would not be considered for award.
Red Fox misapprehends the importance of the mobilization base
restriction in the RFP. This RFP limited the procurement to approved
mobilization base producers, and there is no allegation that it even
contemplated expansion of the mobilization base. Since Red Fox chose to
submit its proposal without challenging this clearly stated restriction
prior to the closing date, and since Red Fox was not a mobilization base
producer by the time the procurement closed, Red Fox was not eligible
for award of the contract. Abbott Products, Inc., B-221695, et al.,
Feb. 10, 1986, 86-1 C.P.D. P 145.
In sum, it was the restriction of the procurement to mobilization
base producers and Red Fox's own acknowledged failure to satisfy this
condition which excluded Red Fox from the competition, and Red Fox
failed to protest this RFP restriction prior to the closing date.
Moreover, even assuming that Red Fox relied upon the alleged oral advise
of the contract specialist (which he denies giving) and the May 1986
Mobilization Base Policy, in our view the protester acted at its own
risk in not timely protesting the specific, inconsistent provisions of
the RFP. The dismissal of the protest is affirmed.
Harry R. Van Cleve
General Counsel
Matter of: Red Fox Industries, Inc.
File: B-225696
Date: February 20, 1987
Protest against rejection of protester's proposal under mobilization
base procurement, not filed until more than 1 month after date for
receipt of initial proposals, is untimely where mobilization base
restriction, which excluded protester from procurement, was clearly
stated in request for proposals.
Red Fox Industries, Inc., protests the Department of the Army's
failure to consider its proposal under request for proposals (RFP) No.
DAAA09-86-R-1900, issued by the United States Army Armament, Munitions
and Chemical Command, Rock Island, Illinois. We dismiss the protest as
untimely.
The procurement was synopsized in the Commerce Business Daily (CBD)
on September 30, 1986. The CBD notice stated that this was a
mobilization base procurement 1/ restricted to three named firms. The
RFP was issued on November 21 and proposals were due on December 31.
The RFP also stated that the procurement was restricted to the firms
identified within the mobilization base; the contract subsequently was
awarded to one of the mobilization base firms.
Red Fox states that the Army's contract specialist advised it on
December 22 that Red Fox would be eligible for award if it submitted a
proposal. Red Fox asserts that it was not until January 22, 1987, in a
meeting with the Army, that it was advised that the offer it submitted
based on the contract specialist's advice would not be considered. Red
Fox asserts that its protest, filed with our Office February 4, 1987,
therefore is timely under our Bid Protest Regulations, 4 C.F.R. part 21
(1986), because it was filed within 10 working days of when Red Fox was
first advised by the Army that the offer would not be considered.
Our Bid Protest Regulations require that a protest based upon alleged
improprieties in an RFP be filed prior to the closing date for receipt
of initial proposals. 4 C.F.R. Sec. 21.2(a) (2). Notwithstanding Red
Fox's contention that it did not learn that the Army would not consider
its proposal until January 22, the mobilization base restriction which
excluded Red Fox from the competition was clearly stated in the RFP, and
Red Fox did not contest this provision until more than a month after the
closing date for initial proposals. Moreover, even assuming that the
contract specialist did say that Red Fox would be eligible for award, as
alleged, Red Fox's apparent decision to forego protesting the RFP
restriction and instead to rely on an oral representation that clearly
conflicted with the RFP was unreasonable. See Westinghouse Electric
Corp, B-224492, Aug. 6, 1986, 86-2 C.P.D. P 165.
The protest is dismissed.
Robert M. Strong
Deputy Associate
General Counsel
1/ Mobilization base procurements may be restricted to predetermined
producers in order to create or maintain their readiness to produce
critical supplies in the event of future military emergencies. See
Martin Electronics, Inc., B-219330, Sept. 20, 1985, 85-2 C.P.D. P 314.
Matter of: Valley Construction Co.
File: B-225695
Date: February 13, 1987
A bid that requests bids in part for the construction of a boat ramp
in either a wet or a dry condition is responsive where it is based on
either but not both alternatives.
Valley Construction Company protests the award of a contract to
either of the two lower bidders for the construction of a maintenance
facility at the B. Everett Jordan Dam and Lake, Chatham County, North
Carolina. The contract will be awarded under solicitation No.
DACW54-87-B-0014, issued by the United States Army Corps of Engineers.
Valley asserts that the low bids were nonresponsive and must be
rejected.
We dismiss the protest.
The project consists of clearing and grading, paving, and the
construction of several buildings, storage facilities, fuel dispensing
facilities, a boat ramp and utilities, all within a 2.5 acre security
fenced compound. The alleged nonresponsiveness involves items 30 and
31, the construction of a concrete boat ramp and its foundation.
The bids in question were as follows:
J & W Builders, Inc. 1,458,792.60
Valley Construction Company 1,474,137.00
Item 30 includes all costs for construction of the ramp except the
aggregate base course (the foundation), which differed depending on
whether the entire ramp is constructed in a dry condition or in a dry
and wet condition. The aggregate base course (item 31) is listed in the
solicitation as follows:
Item Estimated Unit Estimated
No. Description Quantity Unit Price Amount
OR
b. Aggregate Base
AND
c. Aggregate Base,
Valley bid $14 a ton for each of subitems 31(a), (b), and (c) for an
extended amount of $1008, $490 and $1022 for each of the subitems
respectively. Valley bid $97,188 for construction of the boat ramp
itself (item 30). According to Valley, neither LDA nor J & W entered a
unit price for subitems 31(b) or 31(c) in contravention of the
solicitation requirement that bidders must "quote on all items of the
Schedule (Items 1 through 49)." Valley asserts that the two lower bids
are nonresponsive because in the absence of prices for the two subitems
the bidders are not committed to do the work in the wet, if required.
We agree that a bid that takes exception to a requirement of the
solicitation is generally nonresponsive and cannot be considered for
award, since the bidder has not legally obligated itself to do the exact
thing called for by the solicitation. See Epcon Industrial Systems,
Inc., B-216725, Dec. 27, 1984, 85-1 CPD P 2. However, where alternative
bids are requested, a bid based on either alternative is responsive.
Riverport Industries, Inc., B-218056, Apr. 4, 1985, 85-1 CPD P 390. The
solicitation clearly requested alternative bids for item 31, so that a
bid for either item 31 (a) or the combination of items 31 (b) and (c) or
for items 31(a), (b) and (c) is clearly responsive and consistent with
the requirement that bidders bid on all items. We reach this conclusion
because the schedule clearly requested bids on a dry aggregate basis
(31(a)) or on a wet basis (31(b)) and (31(c)). This interpretation is
reinforced by section 20 of the specifications which at section 4
permits construction of the portion of the boat ramp below 216.0" m.s.1.
1/ on a wet or dry foundation.
For example, section 4.2 of the specification states that "all
concrete features of the boat ramp . . . (below elevation 216.0"
m.s.1.) may be constructed in the wet or on a dry foundation." Section
4.4 states that if "the contractor elects to construct the boat ramp
portion below 216.0" m.s.1. in the wet, he shall submit a diving plan to
the Contracting Officer." (Emphasis added.) Section 4.5 requires the
contractor to submit a dewatering plan to the Contracting Officer
"should the contractor elect to construct this portion below 216.0"
m.s.1. under dry conditions." (Emphasis added.)
On its face, then, we find no legal merit to the protest since the
lower bidders did obligate themselves to construct the boat ramp and its
foundation on a dry basis--one of the alternatives provided for in the
solicitation.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
1/ An elevation 216 feet above mean sea level.
Matter of: Westinghouse Electric Corp.
File: B-225694.2
Date: April 22, 1987
1. The General Accounting Office will not consider a protest against
a provision in a solicitation, even though filed prior to bid opening,
where that provision is based on information contained in an agency
report on an earlier protest that was dismissed because the protester
failed to respond by comments on the report or requesting that the
protest be considered on the existing record.
2. The purpose of the General Accounting Office bid protest
regulations is to assure a just and speedy resolution of bid protests
without undue disruption to the federal procurement process, and that
purpose is not well served by considering a protest that raises the same
issues addressed in an agency report to a protest that has been
dismissed because of the protester's own inaction.
Westinghouse Electric Corporation, Westinghouse Furniture System
Division protests any award under invitation for bids (IFB) No.
AB-754931, issued by the Tennessee Valley Authority (TVA). The IFB is a
reissued solicitation for an indefinite quantity term contract to supply
panel-to-panel partition systems for TVA facilities. The solicitation
was reissued in response to an earlier protest filed by Westinghouse.
We dismiss the protest.
Westinghouse originally protested the procurement on February 4, 1987
contending, in essence, that the specifications were restrictive in that
they favored the product of one manufacturer by requiring compatibility
with the product of the firm whose systems were already in use and in
inventory at TVA.
On March 12, 1987, TVA filed its agency report in which, among other
things, it agreed that it would be feasible to consider noncompatible
systems provided bids offering noncompatible systems were evaluated to
reflect the increased costs to TVA for maintaining a noncompatible
inventory. These costs were said to include additional inventory and
warehousing space not otherwise required, additional inventory tracking
efforts, personnel and training. These increased costs were said to be
$742,261. 1/ That sum was included as an evaluation factor in the
solicitation that was issued on March 3. Westinghouse never responded
to the agency report although it had an ample opportunity to do so. On
March 30, 1987, we dismissed the protest without consideration of the
merits because of Westinghouse's failure to file comments on the agency
report or to file a statement requesting that the case be decided on the
existing record. 4 C.F.R. Sec. 21.3(e) (1986).
This protest, filed on April 6, 1987, while filed before the extended
bid opening date of the resolicitation that includes the evaluation
factor, nonetheless is. based totally on information contained in the
agency report to which Westinghouse chose not to respond. We view this
protest as nothing more than an attempt to avoid the consequences of the
protester's failure to respond to the agency report. In other words, it
is, in effect, a request for reconsideration of our dismissal of the
original protest that relies on the fact that the bid opening date for
the resolicitation had not yet passed when it was filed. This is
analogous to the situation in a prior case where a protest against the
specifications was filed with the agency before proposals were due and
denied by the agency more than 10 days before the closing date.
Although the subsequent protest to our Office was filed before the
closing date, we interpreted our Bid Protest Procedures then in effect,
4 C.F.R. Sec. 20.2(a), to require filing with our Office within 10 days
of the agency's denial. 2/ Informatics, Inc., 58 Comp. Gen. 750 (1979),
79-2 CPD P 159.
Under the Competition in Contracting Act of 1984, 31 U.S.C. Sec.
3151 et seq. (Supp. III 1985), the bid protest process may not be
delayed by the failure of a party to make a filing within the time
periods established by our Regulations. Commanche Natural Gas Co.,
Inc.-- Reconsideration, B-224314.2, Nov. 25, 1986, 86-2 P 610. The
purpose of the time limits prescribed in our Bid Protest Regulations is
to assure a speedy and just resolution of protests without undue
disruption of the federal procurement process. Sound
Partnership--Request for Reconsideration, B-220915.2, Jan. 13, 1986,
86-1 CPD P 31. That purpose is not well served by permitting a
protester to circumvent the time limitations of our Regulations by our
consideration of a protest that raises the same issues addressed in an
agency report to a protest that has been dismissed because of the
protester's own inaction. We would not consider the protest if it were
styled as a request for reconsideration, id., and we see no reason to
consider it in the form of a new protest.
The protest is dismissed.
Harry R. Van Cleve
General Counsel
1/Approximately 10 percent of the value of the supplies to be
purchased. The value of the contract is estimated to be approximately
$7 million. The total value of the systems already in TVA's inventory
is $27 million.
2/The applicable provision of our current Bid Protest Regulations is
4 C.F.R. Sec. 21.2(a)(2) (1986).
Matter of: Scheduled Airlines Traffic Offices, Inc.
File: B-225693.2
Date: May 4, 1987
Protest that agency's award of contracts one day prior to the
deadline for the protester to submit requested financial information
indicates that the agency did not give the protester's proposal full and
fair consideration is without merit where the record shows that the
agency requested financial information solely in connection with a
preaward survey of the protester's responsibility and not in connection
with its evaluation of the protester's proposal.
Scheduled Airlines Traffic Offices, Inc. (SATO) protests the award of
a requirements contract for travel management services in Chicago,
Illinois, to Ask Mr. Foster Travel Services and the award of a similar
contract to Northwestern Business Travel for the same services in
Minneapolis/St. Paul, Minnesota. The General Services Administration
awarded both contracts under request for proposals (RFP) No.
FBT-056-N-8-28-86. 1/ We deny the protest.
The solicitation provided that the agency would evaluate proposals
based on five factors: Project Management and Offeror's Qualifications,
which would be considered equally important, followed by Equipment
Capability, Personnel Qualifications, and Rebate. Following review of
the proposals by a technical review panel on all factors except rebates,
SATO was the highest-ranked offeror for the Chicago area and the
fifth-ranked offeror for Minneapolis/ St. Paul. When the scores for
rebates were added to the technical scores, however, SATO was not the
highest-rated offeror for either location. The agency made awards to
the highest-rated offerors for the two locations on January 13, 1987.
As the solicitation advised was a possibility, awards were made on the
basis of initial proposals.
The basis for SATO's protest is that by letter dated January 7 the
agency informed the protester that it would have until January 14 to
submit information concerning the firm's financial capability.
According to the protester, the fact that the agency awarded contracts
while SATO still had one day remaining to submit the required financial
information indicates that the agency did not give the firm's proposal
full and fair consideration. The protester notes that on January 13 the
agency official who had requested the financial information informed the
protester that the information submitted to date was all that would be
necessary.
The agency explains that the request of January 7 for financial
information from the protester was not made in connection with the
agency's evaluation of the firm's proposal, but rather was part of the
agency's determination of whether SATO was a responsible prospective
contractor. The agency says that the contracting officer routinely
requested preaward surveys on all offerors considered to have a
reasonable chance for award, which, at least prior to the rebate
evaluations, included the protester with respect to the Chicago area.
The protest is without merit. In order to receive a government
contract awarded on the basis of competitive proposals, not only must a
firm submit the proposal determined to be the most desirable under the
solicitation's evaluation criteria, but the firm also must be a
responsible prospective contractor. See Federal Acquisition Regulation,
48 C.F.R. Sec. 9.103 (1986). A responsibility determination is entirely
separate from an agency's evaluation of the relative merits of an
offeror's proposal. Edgewater Machine & Fabricators, Inc., B-219828,
Dec. 5, 1985, 85-2 CPD P 630.
Here, the record supports the agency's explanation that it requested
financial information of the protester solely in connection with its
determination of the firm's responsibility. In this regard, the
solicitation required offerors to have sufficient financial capacity,
working capital, and other resources to perform the contract without
assistance from the agency. The request for financial information in
this case was made in connection with a preaward survey of the
protester's ability to perform a contract awarded under the
solicitation. Preaward surveys may be conducted of offerors who have
not been selected for award. Pyrotechnics Industries, Inc., B-221886,
June 2, 1986, 86-1 CPD P 505.
In any event, we fail to see how SATO may have been prejudiced by the
agency's awarding of contracts on January 13. According to the
protester, the agency informed it on that day that it had complied in
full with the request for financial information, and the protester has
not alleged that it would have submitted anything further by the next
day.
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ The RFP also solicited offers for travel management services in
Cincinnati, Ohio, but that part of the agency's requirement is not at
issue in this protest.
Matter of: Professional Construction Services, Inc.
File: B-225691, B-226177
Date: April 16, 1987
1. Protest that sealed bids rather than negotiated procedures should
have been used to procure a diffuser system is dismissed as untimely
when not filed prior to the closing date for the receipt of proposals.
2. Protesters and other interested parties are not entitled to
documents related to a protested procurement action that would give one
or more parties a competitive advantage or which parties are not
otherwise authorized by law to receive.
3. Protest that technical evaluation was incorrect is dismissed
where, even if protester is correct, record shows that protester was not
prejudiced by the improper evaluation.
Professional Construction Services, Inc. (PCS), protests the
cancellation of invitation for bids (IFB) No. NSTL13-250-171, issued for
a diffuser system by Pan Am World Services, Inc., a prime contractor for
the National Aeronautics & Space Administration (NASA) at the National
Space Technologies Laboratories (NSTL). PCS also protests the
resolicitation of this requirement as a negotiated procurement under
request for proposals (RFP) No. NSTL13-250-186.
We dismiss the protest. 1/
Pan Am is a facility support services contractor at NSTL. As part of
its contract performance Pan Am is required to modify the B-1 test
position so that the test stand on which it is located can accommodate
singie engine testing of the Space Shuttle Main Engine. To meet this
requirement, Pan Am is issuing seven solicitations for contractors to
perform different aspects of the renovation. The current protest
involves a solicitation to fabricate and install a diffuser, which will
permit the testing to be accomplished under simulated altitude flight
conditions.
Pan Am initially issued IFB-171 to procure the diffuser system and
received three bids, including a bid from PCS. Pan Am canceled the
solicitation, however, because all three bids exceeded Pan Am's cost
estimate, as well as the funding available for this part of the project.
Subsequently, Pan Am reevaluated and revised its cost estimate,
modified the specifications to permit less costly construction, and
issued RFP-186. NASA reports that Pan Am decided to resolicit for the
diffuser system using a negotiated procurement so that further cost
reduction measures could be discussed with the offerors.
Pan Am received offers under RFP-186 from the same offerors that had
responded to IFB-171. Pan Am evaluated the proposals, held discussions,
and requested best and final offers (BAFO's). PCS proposed the lowest
cost, but also received the lowest technical score, 53.75, compared to
90 received by the awardee and 75.25 received by the third offeror.
PCS' low technical score was due in part to Pan Am's finding that the
first tier subcontractor proposed by PCS was unacceptable because the
subcontractor intended to perform outdoors, had an inadequate physical
plant, and had insufficient equipment.
PCS filed its protest with our Office by letter dated January 30 and
received here on February 2. PCS alleged that Pan Am did not have a
compelling reason to cancel the IFB, as required by the Federal
Acquisition Regulation (FAR), and that it was improper for Pan Am to
issue the resolicitation as a negotiated procurement because none of the
circumstances in the FAR which permit negotiation existed. After
receiving NASA's administrative report on the protest, PCS raised the
following additional objections to the procurement: (1) Pan Am failed
to provide the protester with all technical evaluation-related
information supplied to our Office with the administrative report and
requested by PCS pursuant to the Freedom of Information Act (FOIA); (2)
Pan Am improperly awarded the contract while the protest was pending;
(3) Pan Am is failing to enforce the permits and responsibilities clause
located at FAR, 48 C.F.R. Sec. 52.236-7 (1986); and (4) Pan Am
improperly determined that the subcontractor proposed by PCS was
unacceptable.
In NASA's administrative report, the agency specifically disagreed
that Pan Am's decision to cancel IFB-171 was improper, and PCS offered
no rebuttal in its reply to the report. We therefore consider this
issue abandoned and we will not consider it on the merits. Spectrum
Analysis & Frequency Engineering, Inc., B-222554, Aug. 1, 1986, 86-2
C.P.D. P 136.
Nor will we consider PCS' protest that Pan Am was required to use
sealed bid rather than negotiated procedures to procure the diffuser
system. As this allegation concerns an impropriety apparent from the
face of the solicitation, to be timely it had to be filed with our
Office or the procuring agency prior to the closing date for the receipt
of proposals. 4 C.F.R. Sec. 21.2(a)(1). A protest is filed for
purposes of our timeliness rules when it is received in our Office,
notwithstanding when it was mailed. Yale Materials Handling
Corp.--Reconsideration, B-223180.2, June 12, 1986, 86-1 C.P.D. P 548.
Also, a protest against an apparent defect that is submitted with a
proposal is not considered timely. Precision Dynamics Corp., B-207823,
July 9, 1982, 82-2 C.P.D. P 35. PCS submitted its protest to Pan Am
with its proposal on January 30, the due date for proposals, and we did
not receive the protest until February 2. Consequently, PCS did not
file a timely protest with the agency or our Office, and this basis of
PCS protest is dismissed.
PCS protests that it has not been furnished all the technical
evaluation documents contained in the administrative report. However,
under the Competition in Contracting Act of 1984, 31 U.S.C. Sec. 3553(f)
(Supp. III 1985), protesters and other interested parties are not
entitled to documents related to a protested procurement action that
would give one or more parties a competitive advantage or which parties
are not otherwise authorized by law to receive. Insofar as PCS protests
that Pan Am awarded the contract while PCS' protest was spending, a
contract may be awarded notwithstanding the filing of a protest if the
head of the agency finds that urgent and compelling circumstances that
significantly affect the interests of the United States will not permit
the agency to wait for our decision. 31 U.S.C. Sec. 3553(c) (Supp. III
1985). Where the agency determines to award a contract while a protest
is pending, the agency's obligation is to inform our Office. Simulators
Limited, Inc.--Reconsideration, B-219804.2, Jan. 23, 1986, 86-1 C.P.D. P
76. Here, Pan Am found that urgent and compelling circumstances
dictated that the award should be made before the protest was resolved.
NASA approved that decision and informed our Office that the contract
would be awarded. We have no legal basis to object to the award in such
circumstances.
PCS also protests that Pan Am is not enforcing FAR, 48 C.F.R. Sec.
52.236-7, which requires a contractor to have all necessary state and
local licenses, because Utility Steel, the awardee, does not possess a
certificate of responsibility required by Mississippi State Law. We
first note that the cited regulation is required to be inserted in
federal contracts for fixed-price construction or fixed-price
dismantling, demolition or removal of improvements, and thus is not
applicable to the present solicitation, for a diffuser system. Further,
Utility Steel's compliance with Mississippi's state and local licensing
requirements is a matter to be settled by Mississippi and Utility Steel,
not this Office. Central Forwarding, Inc., B-222531.4, Aug. 4, 1986,
86-2 C.P.D. P 142.
Finally, PCS disputes Pan Am's finding that the first tier
subcontractor proposed by PCS is unacceptable. PCS asserts that the
subcontractor only intends to perform 20 percent of the contract
outdoors, that the subcontractor has adequate indoor facilities to
perform the other 80 percent of the contract, and that the subcontractor
has or can lease suitable equipment. The protester also contends that
its subcontractor has previously performed satisfactory work for Pan Am
and NASA. PCS further complains that it was not told until February 5,
the day BAFO's were due, that its subcontractor was unacceptable, and
PCS therefore was denied the opportunity to propose a different
subcontractor.
Before wes will sustain a protest alleging that a proposal was
improperly evaluated, the protester must demonstrate that it was
prejudiced by the evaluation. See Cosmos Engineers, Inc., B-220000.3,
Feb. 24, 1986, 86-1 C.P.D. P 186. In the present case, five evaluators
individually scored each technical proposal and the scores were then
averaged for a composite score. The composite scores were 90 for the
awardee, 53.75 for PCS and 75.25 for the third offeror. Even if PCS
received the full amount of points availabale for the category in which
its subcontractor was evaluated, PCS' composite score only increases to
71.50. Given the fact that PCS' proposed cost was only 1 percent more
than the awardee's proposed cost ($1,137,000 vs. $1,149,864), we find no
basis on which to conclude that the alleged misevaluation of PCS'
proposed subcontractor denied PCS an award it otherwise would have
received. We conclude that PCS therefore was not prejudiced by the
evaluation or by NASA's alleged failure to furnish PCS timely notice of
the defect.
The protest is dismissed.
Robert M. Strong
Deputy Associate
General Counsel
1/ Preliminarily, NASA argues that our Office does not have
jurisdiction to decide this protest because the solicitation involves a
subcontract award that is not "by or for" the government, a point that
PCS disputes. See 4 C.F.R. Sec. 21.3(f) (10) (1986). We find it
unnecessary to decide the jurisdiction issue since we are dismissing the
protest.
Matter of: Inter-Continental Equipment, Inc.
File: B-225689
Date: May 14, 1987
Where invitation required new shipping containers, bid to furnish
containers transported from overseas manufacturer filled with cargo
properly was rejected, since such equipment is "used," not "new," as
those terms are commonly understood. Invitation for bids required
notice of intent to furnish used equipment and opportunity for
government approval or rejection; by failing to provide notice of
intent or seeking clarification of requirements, bidder assumed risk
that bid might be rejected.
Inter-Continental Equipment, Inc. (ICE), protests the Department of
the Navy's rejection of ICE's bid under invitation for bids (IFB) No.
N62578-86-B-6306. We deny the protest.
The Navy issued this IFB to acquire refrigerated shipping containers
to be used in transporting perishable items. The containers are
essentially 20 by 20 by 8 foot metal boxes, to which refrigeration
equipment and insulation are added. The IFB incorporated the Federal
Acquisition Regulation clauses found at 48 C.F.R. Secs. 52.210-5,
52.210-7 (1985). The first clause states that the contractor represents
that all supplies or components delivered under the contract are new.
The clause further provides that if the contractor believes furnishing
used or reconditioned materials will be in the government's interest, he
must so notify the contracting officer in writing, including his reasons
therefor and the proposed consideration (benefit) to the government in
the event the contracting officer authorizes the use of used or
reconditioned materials. The second clause prohibits the use of used or
reconditioned materials in the performance of the contract unless they
were identified in the attachment to the offer or bid and approved by
the contracting officer.
ICE's bid was low. The Navy, however, learned that ICE intended to
install new refrigeration equipment in new containers that would be
shipped from the overseas manufacturer by giving them to a shipping
company to use for commercial cargo in exchange for free transit. The
Navy considered that this rendered the containers "used," contrary to
the new material clauses in the IFB, and concluded that ICE had
misinterpreted the IFB. The Navy rejected ICE's bid because it had not
been prepared on the basis of the essential requirements of the IFB.
ICE contends that bartered transportation arrangements of the type
ICE contemplated are normal in the industry for the delivery of new
containers and does not render the containers "used." ICE also asserts
that it has used this method of initial delivery on other contracts,
including Navy contracts, and argues that it reasonably relied on this
precedent.
We think the Navy acted reasonably in rejecting ICE's bid. In our
view, the shipment of containers filled with cargo constitutes "use" of
the containers, with the end result that the containers are "used" when
they arrive, not "new," as those terms are commonly understood. The
fact that it may have been acceptable in other procurements to obtain
free transportation in exchange for "first use" of the containers is not
relevant, since each procurement is a separate transaction and must
stand alone. Shannon Resources, Inc., B-220367.4, Apr. 28, 1986, 86-1
C.P.D. P 411.
Moreover, the clauses incorporated in the IFB required, at a minimum,
that there be notice to the government of proposed used or reconditioned
materials and an opportunity for government approval or rejection. We
note, for instance, that in each of the prior acquisitions ICE cites in
support of its claim of precedent, ICE was specifically advised prior to
submission of bids or best and final offers that "first use" of the
containers in exchange for transportation was permissible. The cur rent
procurement, however, provides no evidence of any such advice. In view
of this obvious omission, we think ICE was unreasonable in concluding,
without prior approval, that the Navy would permit "first use" of the
containers in this procurement; by failing to provide notice of its
intentions or seeking clarification of the IFB, ICE assumed the risk
that its bid might be rejected.
In sum, since ICE submitted a bid that was not based on the IFB'S
essential requirements, the Navy's rejection of the bid was proper. See
Donald Owen & Associates, Inc., 63 Comp. Gen. 371 (1984), 84-1 C.P.D. P
525.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Hornes Motor Lodge
File: B-225688.3
Date: October 15, 1987
Protest challenging contracting officer's alleged failure to comply
with regulatory requirements concerning filing size status protest with
Small Business Administration (SBA) is academic where SBA has already
ruled that the challenged firm is a small business.
Hornes Motor Lodge protests the Army's award of a contract to
Convention Marketing Services under invitation for bids (IFB) No.
DABT47-86-B-0120, issued as a total small business set-aside for
lodging, meals, and transportation for applicants at the Military
Entrance Processing Station in Charlotte, North Carolina. Hornes argues
that by allowing Convention Marketing to change its subcontracting
arrangements and substitute a large business subcontractor shortly
before award, the contracting officer deprived Hornes of the opportunity
to file a timely protest challenging Convention Marketing's small
business size status. Hornes also argues that the contracting officer
should have filed her own size status protest against Convention
Marketing when she learned that it intended to subcontract with a large
business. We dismiss the protest.
Nine bids were opened on January 23, 1987, and a contract was awarded
to the low bidder, Joewin, Inc., on January 27. Shortly after award,
the second low bidder, Convention Marketing, protested Joewin's size
status; the fourth low bidder, Econo Lodge, also protested the size
status of all three low bidders (Joewin, Convention Marketing, and
Hornes). In accordance with Federal Acquisition Regulation (FAR), 48
C.F.R. Sec. 19.302(c)(1) (1987), the contracting officer referred the
protests to the Small Business Administration (SBA). SBA determined
that Joewin was other than a small business, and the Army subsequently
terminated its contract. SBA also determined that both Convention
Marketing and Hornes were small businesses. On April 1, Econo Lodge
appealed the determination regarding Convention Marketing's size status
to SBA's Office of Hearings and Appeals.
Meanwhile, the contracting officer began to investigate Convention
Marketing's responsibility. In its bid, Convention Marketing had
designated its lodging subcontractor as Economy Inn and its dining
subcontractor as Steak 'n Eggs, a large business; it later notified the
contracting officer that it intended to substitute A-1 Catering, a small
business, as the dining subcontractor. The contracting officer
determined in early April that neither of the proposed subcontractors
was satisfactory and found Convention Marketing to be nonresponsible.
She then referred the matter to SBA for possible issuance of a
Certificate of Competency (COC).
While the COC matter was before SBA, Convention Marketing arranged
for a different subcontractor, Ramada Inn, a large business, to provide
both food and lodging. On June 1, SBA issued a COC to Convention
Marketing based on this revised arrangement. The contracting officer at
this point informally expressed concern to SBA over Ramada's status as a
large business, but was orally assured by an SBA official that since
Convention Marketing was in complete control of the contract there would
be no size status problem. On June 12, a contract was awarded to
Convention Marketing for services to begin on July 1.
On June 26, SBA's Office of Hearings and Appeals decided the appeal
filed by Econo Lodge concerning Convention Marketing's size status. At
the time the appeal was filed, Convention Marketing had not yet
substituted Ramada Inn as its proposed subcontractor, and the
preliminary matter at issue on appeal, based on the facts as they then
stood, was whether Convention Marketing's size should be determined as
of the date of its self-certification, at which time its designated
meals subcontractor was Steak 'n Eggs (a large business), or as of the
date of the SBA determination, at which time its subcontractor was A-1
catering (a small business). Econo Lodge argued that a firm's size is
to be measured as of the date of its self-certification, and that
Convention Marketing's affiliation with Steak 'n Eggs as proposed in its
bid therefore should be controlling in determining its size.
The Office of Hearings and Appeals agreed, citing 13 C.F.R. Sec.
121.5(a) (1987), which requires that the size status of a concern
(including its affiliates) be determined "as of the date of written
self-certification as a small business as part of a concern's submission
of a bid or offer." The Office of Hearings and Appeals went on to
determine that Convention Marketing's arrangement with Steak 'n Eggs and
Economy Inn, as originally proposed in its bid, did not affect its
status as a small business.
Hornes now contends that Convention Marketing is not a small business
due to its affiliation with Ramada, and that the contracting officer
acted in bad faith by permitting Convention Marketing to substitute
Ramada as a subcontractor after the period for the filing of a timely
size status protest by other bidders had expired 1/ and by failing to
notify other bidders of the change. Hornes further contends that the
contracting officer should have filed her own size status protest when
she learned that Convention Marketing intended to subcontract with
Ramada.
In view of SBA's decision that Convention Marketing is a small
business based on the subcontracting arrangements in its original bid,
it is clear that Hornes was in no way prejudiced by its inability to
file a timely size status protest after Convention Marketing later
substituted Ramada as its subcontractor, or by the contracting officer's
failure to issue her own size status protest at that time. Given that
under SBA's regulations it was Convention Marketing's size as of the
date of its self-certification that determined its eligibility as a
small business for this procurement, Convention Marketing's subsequent
arrangements with Ramada do not provide any basis for challenging
Convention Marketing's size status. See 13 C.F.R. Sec. 121.5(a). Since
SBA already has ruled on Convention Marketing's size status as of bid
opening, the conclusive date for a status determination, the protester's
objection to its inability, and the contracting officer's failure, to
file a size status protest based on the subsequent change in
subcontractors is academic. See Service Engineering Co., B-225623, Apr.
28, 1987, 87-1 CPD P 442.
To the extent that the protester objects to SBA's rule that size is
to be determined as of the date of selfcertification, we note that this
is not a matter for our consideration in view of SBA's conclusive
statutory authority to determine matters of small business size status
for federal procurements. See 15 U.S.C. Sec. 637(b) (6) (1982);
Newgard Industries, Inc.--Reconsideration, B-226272.2, Apr. 17, 1987,
87-1 CPD P 422.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
1/ To be timely, a size status protest by another bidder generally
must be filed within 5 days after bid opening. FAR, 48 C.F.R. Sec.
19.302(d).
Matter of: Kirk Bros., Inc.
File: B-225687.2, B-225687.3
Date: March 11, 1987
1. General Accounting Office will not review protest that agency
should issue a change order under the protester's contract instead of
conducting a procurement.
2. Potential prime contractor for equipment installation is not an
interested party to protest that instead of requiring a specific
manufacturer's equipment the agency should permit the prime to install a
second firm's equipment, since the company does not suggest that the
specification will affect its ability to compete on an equal basis with
other potential prime contractors.
Kirk Bros., Inc., requests that we reconsider our dismissal of its
protest concerning invitation for bids (IFB) No. N62472-86-B-0107,
issued by the Department of the Navy for an addition to a
microprocessor-based distribution control system for a refrigeration
system. Kirk is the incumbent contractor installing the refrigeration
system under a contract which calls for the Navy to furnish the
distribution control system as government furnished equipment. We
dismissed Kirk's February 2, 1987, protest after the Navy advised us on
February 10 that Kirk had not furnished the agency a copy of the protest
within 1 working day after filing here, as required by our Bid Protest
Regulations, 4 C.F.R. Sec. 21.1(d) (1986). In requesting
reconsideration, Kirk has provided copies of return receipts indicating
that the Navy had received a timely copy of the protest.
We need not reconsider the dismissal since our review of documents
submitted with the protest shows that the matters Kirk raises are not
reviewable by our Office in any event.
Kirk protests the Navy's decision not to issue Kirk a change order
under its existing contract for the control system, and the Navy's
decision to designate, in connection with the solicitation the agency
has decided to issue, a specific source from which the prime contractor
must purchase the control system equipment.
The decision whether to issue a change order is a matter of contract
administration; such matters are the responsibility of the contracting
agency, and are not considered under our Bid Protest Regulations. See 4
C.F.R. Sec. 21.3(f) (1).
As to the propriety of the specification the Navy is using, the
Competition in Contracting Act of 1984 (CICA), 31 U.S.C. Sec. 3551 (2)
(Supp. III 1985), requires that a party be "interested" in order to
pursue a bid protest with our Office. See also Bid Protest Regulations,
4 C.F.R. Sec. 21.0 (a). An interested party is defined in both CICA and
our Regulations as an actual or prospective bidder whose direct economic
interest would be affected by the award of a contract or by the failure
to award a contract.
Kirk's interest in the restrictive nature of the specification is not
sufficient for the firm to be considered an interested party, since the
record indicates that Kirk will merely mark-up and pass on to the
government whatever bid it receives from the equipment manufacturer, and
because we have no reason to believe that all potential bidders for the
installation work will not compete on the same basis. Indeed, in its
protest Kirk specifically states that its interest in this aspect of the
protest is as a taxpayer, not an affected prospective competitor, an
interest that we have held is not adequate for maintaining a bid
protest. See Turbine Engine Services, B-210411.2, Apr. 3, 1984, 84-1
C.P.D. P 376.
The protest is dismissed.
Robert M. Strong
Deputy Associate
General Counsel
Matter of: Southwest Marine, Inc.
File: B-225686
Date: May 14, 1987
Protest that agency improperly permitted awardee to correct its bid
is sustained where the worksheets submitted by the awardee to establish
the mistake do not provide for profit or overhead or otherwise clearly
indicate the intended bid.
Southwest Marine, Inc., protests the award of a contract to
Continental Maritime of San Diego, Inc., under invitation for bids (IFB)
No. N62791-87-B-0004, issued by the Department of the Navy for the
repair of the U.S.S. David R. Ray. Southwest contends that the Navy
improperly permitted Continental to correct a mistake in its bid.
We sustain the protest.
The protest concerns line item 0001, the repair of the ship, for
which bidders were required to offer a lump-sum price. The Navy
received four responses to the IFB for line item 0001, ranging from
Continental's low bid of $2,700,000 to $4,697,315. Southwest submitted
the second low bid of $3,349,786. Because Continental's bid was well
below the government estimate and the other bids, the contracting
officer suspected that Continental had made an error in its bid. Before
the Navy could ask Continental to verify the bid, however, Continental
contacted the Navy and asserted that it mistakenly had omitted ship
berthing costs from the bid, an error of $420,780, and that its intended
bid was $3,120,780, approximately 7 percent below Southwest's next low
bid.
Continental explained that, in computing its bid, it originally
intended to lease a pier at which to perform the repairs, and included
the $420,780 lease cost (plus associated costs, including guard
services) in the subcontractor estimate portion of its bid worksheets.
Shortly before bid opening, however, Continental decided to perform
the work at its own recently completed berthing facility. Continental's
vice president claimed he accordingly instructed the estimator to delete
from subcontractor costs the $420,780 lease, together with associated
costs, and transfer the $420,780 lease cost to the section of the
worksheets for Continental's own material costs. The estimator was also
instructed to subtract from subcontractor costs amounts which resulted
when Continental received lower quotations from certain subcontractors
to perform different aspects of the repair work. The estimator
subtracted all the costs, as instructed, but failed to add the $420,780
back into Continental's material costs. Consequently, Continental
claimed that its bid as submitted mistakenly did not include any costs
for the use of Continental's pier.
The contracting officer reviewed Continental's claim and supporting
documentation and determined that Continental had provided clear and
convincing evidence of the mistake, how the error occurred and its
actual intended bid, and therefore recommended to the Deputy Commander
for contract management that Continental be permitted to correct its
bid. The Deputy Commander concurred with this decision and Continental
was awarded a contract at its requested corrected price. Southwest
alleges that Continental did not provide sufficient evidence to
demonstrate its actual intended bid and, consequently, that the Navy
improperly permitted the correction.
The Federal Acquisition Regulation (FAR), 48 C.F.R. Sec. 14.406-3(a)
(1986), requires that a high standard of proof be met--clear and
convincing evidence of the mistake and the bid actually intended--before
correction is authorized, in order to protect the competitive system
from abuse. Where, as here, the correction would not displace any other
bidder, the bidder's worksheets may constitute sufficient evidence where
they are in good order, and there is no contravening evidence. See G.N.
Constr., B-209641, June 2, 1983, 83-1 C.P.D. P 98. Because the weight
to be given evidence in support of an asserted mistake is a question of
fact, we will disturb an agency's determination that the standard for
bid correction has been met unless only if there was no reasonable basis
for the decision. Montgomery Construction Co., Inc., B-221317, Feb. 28,
1986, 86-1 C.P.D. P 210.
To support its mistake claim Continental submitted statements by its
vice president, its estimator and its operations manager as well as its
original bid estimation worksheets, consisting of a "low side summary
sheet," a subcontractor bid package summary, individual subcontractor
quotation sheets and various other worksheets. It is clear from
Continental's low side summary sheet that Continental did in fact reduce
its subcontractor costs by an amount equal to the $420,780 leasing cost
plus the lower subcontractor quotations, and that Continental did not
increase its material costs by a corresponding amount.
The determinative question, then, is whether Continental intended,
but mistakenly failed, to retain the $420,780 lease cost in the bid as
part of its material cost. The only objective evidence presented on
this point is Continental's bid package summary, showing the $420,780
entry for the lease cost crossed out and, beside this crossed-out entry,
a notation, "Not required, put into material for CMSD facility." We do
not believe this evidence alone is sufficient to permit bid correction.
The adequacy of the evidence here depends upon the credibility of
Continental's worksheets. Our review of all of Continental's worksheets
indicates that they only include raw subcontractor quotations and other
costs; they include no entries for overhead or profit. We have found
that it is significant in determining the bid intended that worksheets
submitted to support a request for bid correction do not reveal what
provisions the bidder intended for profit and overhead, since bidders on
government contracts generally intend to gain some profit from
performing the contract. Thus, a bidder's failure to provide for these
items in the calculations used to arrive at the allegedly intended bid
calls into question whether that was indeed the bid price actually
intended. Montgomery Construction Company, Inc., B-221317, supra.
Permitting correction of allegedly omitted costs in cases where the bid
worksheets also omit profit and overhead could encourage bidders to
submit the bids without these costs and to seek recovery of all or part
of these costs through mistake claims after learning that the bid was
low. There is no evidence that the Navy ever questioned the omission of
profit and overhead, or that Continental ever explained the omission.
Also detracting from the credibility of the worksheets, the record
does not indicate why Continental's $420,780 lease cost would be
precisely the same as the amount it allegedly planned to charge based on
use of its own facility. Continental's asserts, simply, that it
considered the costs to be the same, but does not explain why this would
be the case. As the protester points out, the costs of leasing and
ownership would be expected to be different in several respects,
including profit; given the absence of profit from the rest of
Continental's bid, there would be no reason to assume that Continental
intended to retain as its own profit the portion of the lease cost that
presumably would have represented profit to the subcontractor. We
further think it conceivable that a company might reasonably decide not
to charge for use of its own pier where strong competition is
anticipated, or where the pier otherwise might go unleased.
Therefore, while the only objective evidence demonstrating that
Continental intended to include $420,780 in its bid as the cost of using
its own facility is the notation in the subcontractor summary sheet,
there are substantial reasons to question the credibility of these
worksheets in determining Continental's intent. In the final analysis,
we do not believe that this evidence reasonably can be deemed to
establish clearly and convincingly that Continental intended to include
an additional $420,780 in its bid. Consequently, we sustain Southwest's
protest.
By contrast with the clear and convincing evidence required for bid
correction, withdrawal of a bid requires a lesser degree of proof and
may be allowed if it reasonably appears that an error was made. See
Pneumatic Construction Co., B-207871, Aug. 31, 1982, 82-2 C.P.D. P 193.
Since there is some evidence here that there may have been a mistake in
Continental's bid, this standard applies, and withdrawal of the bid and
award to Southwest (if otherwise proper) would be the appropriate
remedy. However, Southwest submitted its protest to our Office more
than 10 days after Continental was awarded the contract. Consequently,
the Navy was not required to, and did not, suspend performance during
the protest, and at this juncture Continental's performance is more than
50 percent complete. Thus, while we sustain the protest, it is
impracticable for our Office to recommend relief. Instead, we find that
Southwest should be reimbursed its bid preparation costs and the costs
of filing and pursuing its protest, including attorney's fees. 4 C.F.R.
Sec. 21.6(d) and (e); Hobart Brothers Co.-- Reconsideration,
B-222579.2, Sept. 19, 1986, 86-2 C.P.D. P 323. Southwest should submit
its claim for these costs directly to the Navy. 4 C.F.R. Sec. 21.6(f).
Comptroller General
of the United States
Matter of: Honeycomb Company of America--Request for Reconsideration
File: B-225685.2
Date: September 29, 1987
Prior decision is affirmed on reconsideration where protester fails
to show any error of law or fact warranting reversal of finding that
contracting agency reasonably decided not to waive first article
requirement for protester who had not produced the item being procured,
a complex aircraft part, for an extended period of time.
Honeycomb Company of America (HCA) requests reconsideration of our
decision in Honeycomb Company of America, B-225685, June 8, 1987, 87-1
CPD P 579, in which we denied HCA's protest against the award of a
contract to Bonded Technology Inc. under request for proposals (RFP) No.
F41608-87-R-2617, for 312 right wing tips and 306 left wing tips for the
T-38 aircraft. We affirm our decision.
As we explained in our previous decision, the Air Force issued the
solicitation for wing tips to only two firms, Bonded and Northrop
Corporation, because the agency determined that this was an emergency
requirement which should be limited to suppliers eligible for waiver of
first article testing. HCA was not given an opportunity to compete
because the firm had not produced the wing tips since 1982, and thus
would not be eligible for waiver of first article testing. The agency
determined that Bonded was eligible for waiver because its first article
wing tips were tested and approved in 1986 under another Air Force
contract. Although Northrop also was eligible for waiver of the first
article requirement and was provided a copy of the RFP, it did not
submit a proposal.
While we agreed with HCA's contention that the Air Force should have
provided it a copy of the solicitation, we found that this was a
procedural defect not affecting the validity of the procurement since
HCA was properly viewed as not eligible to compete. We also rejected
contentions by HCA that first article testing should have been waived
for HCA, that the agency failed to engage in advance procurement
planning as required by 10 U.S.C. Sec. 2304(f)(5)(A) (Supp. III 1985),
and that the agency's failure to solicit HCA amounted to a de facto
debarment.
In its reconsideration request, HCA principally challenges our
conclusion that the Air Force was justified in excluding HCA based on
its finding that the firm would not be eligible for waiver of first
article testing. In this respect, we concluded that the agency's
decision was justified by the fact that HCA has not produced wing tips
since 1982 and the firm failed to produce an acceptable first article
wing tip in seven attempts under a 1984 contract with the Air Force that
was terminated for convenience in 1986.
HCA now argues that our decision was factually incorrect since HCA
did nots fail wing tip first article tests under its 1984 contract;
according to the protester, its 1984 contract was terminated before
first articles were delivered and the Air Force has never rejected an
HCA first article wing tip. HCA also says that our decision, while
concluding that the firm had not produced wing tips since 1982, failed
to address the fact that the firm has continuously produced similar
items. Finally, HCA argues that the Air Force's decision to waive the
first article requirement for Bonded but not for HCA was unfair.
Specifically, HCA argues that its first articles for similar items were
subjected to more stringent testing than Bonded's first article wing
tips and that Bonded's first article wing tips were approved even though
they did not pass all required tests.
The Air Force confirms that no wing tips were tested under HCA's 1984
contract since the contract was terminated before the submission of
first articles. The agency maintains, however, that its decision that
HCA was not eligible for waiver of first article testing was justified
by the fact that HCA has not produced wing tips since 1982.
As we explained in our original decision, an agency's determination
with respect to waiver of a first article test requirement for a
particular firm is subject to question only where it is shown to be
unreasonable. Airline Instruments, Inc., B-223742, Nov. 17, 1986, 86-2
CPD P 564. While it is now clear that no first article tests were
conducted under HCA's terminated 1984 contract for wing tips, that does
not demonstrate that the agency's decision not to waive the first
article requirement under the current RFP was unreasonable. On the
contrary, under Federal Acquisition Regulation, 48 C.F.R. Sec. 9.303(b)
(1986), first article testing may be imposed when a prior producer has
discontinued production for an extended period of time. Since HCA
concedes that it has not produced these items since 1982, we see no
basis to question the agency's decision, based on HCA's break in
production of wing tips, that the firm was not eligible for waiver of
first article testing.
Further, as HCA states, in reviewing an agency's decision regarding
waiver of first article test requirements, we generally consider other
factors bearing on the agency's decision. See Airline Instruments,
Inc., B-223742, supra. Contrary to HCA's contention, however, the
relevant additional factors in this case support the reasonableness of
the agency's decision. Specifically, although HCA argues that waiver of
the first article requirement was justified by the firm's continuous
production of similar honeycomb core items, HCA concedes that a number
of these similar items have been rejected by the Air Force in first
article tests under previous contracts. While HCA disputes some of
these first article failures, the firm's contentions in this regard
provide no basis to conclude that the agency unreasonably determined
that the requirement could not be waived. Amplitronics, Inc., B-209339,
Mar. 1, 1983, 83-1 CPD P 210. In addition, other factors, such as the
complexity of the wing tips, delay and quality control problems under
previous contracts, and the high risk to the aircraft and crews in the
event ofs a wing tip failure, further support the reasonableness of the
agency's decision. Id.
We also reject HCA's contention that it was unfairly treated in
relation to Bonded since, according to HCA, its first articles for items
similar to the wing tips were subjected to more stringent testing than
Bonded's first article wing tips and since Bonded's first articles did
not pass all required tests. The Air Force tested and conditionally
approved Bonded's first article wing tips in 1986 while, by HCA's own
admission, it has not had a wing tip tested since 1979 and has not
produced these items since 1982. We do not believe that these
circumstances show that HCA was treated unfairly by the Air Force's
refusal to waive first article testing of the wing tips.
In the remainder of its reconsideration request, HCA reiterates
arguments already raised in the protest and disagrees with our
conclusions. We fully considered the protester's contentions in this
regard in our initial decision, and we now have reviewed our decision in
the context of the reconsideration request. Since we do not find that
it was based on an error of fact or law, we see no basis to disturb the
decision. See Bid Protest Regulations, 4 C.F.R. Sec. 21.12(a) (1987);
A&E Industries, Inc., et al.-- Reconsideration, B-226997.8, et al., Aug.
17, 1987, 87-2 CPD P .
Our decision is affirmed.
Harry R. Van Cleve
General Counsel
Matter of: Honeycomb Company of America
File: B-225685
Date: June 8, 1987
1. Protest against agency's failure to solicit past supplier of
aircraft wing tips is denied where agency's requirement was of an
unusual and compelling urgency such that limiting competition to firms
qualifying for first article waiver was essential to meeting the
required delivery schedule and the protester was not eligible for
waiver.
2. Protest that urgent situation requiring other than competitive
procedures was a result of a lack of agency advance planning is denied
where agency engaged in planning by attempting to award contracts to
fill its requirements but agency plans did not yield the expected
results.
3. An agency's decision not to waive a first article testing
requirement is reasonable where firm has not produced the item in over 2
years and first articles produced for previous contract were not
approved by agency. Further, decision to grant waiver to another firm
is reasonable where the firm recently obtained conditional approval of a
first article under another contract.
Honeycomb Company of America protests any award of a contract under
request for proposals (RFP) No. F41608-87-R2617, issued by the
Department of the Air Force for 312 right wing tips and 306 left wing
tips for the T-38 aircraft. The Air Force limited competition to Bonded
Technology, Inc. and Northrop Corporation--the original manufacturer of
the T-38 aircraft--based on a determination that an unusual and
compelling urgency for the wing tips existed and only those two sources
could supply the wing tips without undue delay. 1/ The protester, a
previous contractor that provided the wing tips, principally argues that
the agency improperly excluded it as an available source. We deny the
protest.
The T-38 aircraft has replaceable wing tips which are made of an
aluminum alloy sheet with a honeycomb metal core. Since Honeycomb
produced replacement wing tips for the Air Force in 1982, the agency has
made a number of attempts to resupply its depleted stocks. On September
28, 1984, for instance, the Air Force awarded to Honeycomb a "kit
contract," for spare parts which included left and right hand wing tips.
The Air Force rejected seven first articles delivered by Honeycomb and
terminated the contract for the convenience of the government in March
1986. Honeycomb is currently pursuing a claim against the Air Force
under the Contract Disputes Act of 1978, 41 U.S.C. Secs. 601-613 (1982),
regarding the termination.
The Air Force awarded a contract on May 6, 1985, to Bonded Technology
for wing tips, but encountered delays in obtaining an acceptable first
article, approved in December 1986. The Air Force has subsequently
obtained 101 right wing tips and 107 left wing tips under the contract,
but according to the Air Force, the quantities under the contract are
not sufficient to accomplish the needed replacements for the T-38 fleet
which consists of 890 aircraft.
The Air Force also attempted in 1985 to procure compositedesign wing
tips using a complicated graphite fiber overlay in the wing tip
construction. Contracting officials only solicited the Northrop
Corporation for this requirement since Northrop was the only source that
could perform the composite process. This attempt was unsuccessful
because the Air Force considered Northrop's price excessive and also
expected unacceptable delays in converting to the new process. The
agency nevertheless renewed its efforts in June 1986, but finally
abandoned the composite design in December 1986, again due to Northrop's
price.
In December 1986, contracting officials received an emergency
purchase request for the 312 right wing tips and 306 left wing tips
involved here, with delivery to begin in June 1987. The request listed
Bonded Technology as the only source since Northrop apparently had
expressed a lack of interest in supplying the parts. As required by 10
U.S.C. Sec. 2304(f) (1) (Supp. III 1985), a justification was issued on
January 13, 1987, for the procurement by other than full and open
competitive procedures due to an unusual and compelling urgency.
The justification lists only Bonded Technology and Northrop as
approved sources to provide the wing tips on an urgent basis. The
justification explains that the T-38 fleet currently is equipped with
wing tips which are, for the most part, original equipment that has
exceeded the manufacturer's projected useful life. In addition, some of
the wing tips previously provided by Honeycomb are considered defective
and in need of replacement. According to the justification, these
factors, combined with the unavailability of suitable replacement parts
since 1982, have compromised aircraft safety. The justification states
that the lack of replacement parts has forced the agency to push the
repair of wing tips to the safety limit and further states that
replacement wing tips are needed for grounded and soon to be grounded
aircraft. Pointing out that the Headquarters for the using activity has
ordered the entire fleet be retrofitted with replacement wing tips, the
justification concludes that the need for complete replacement now is
critical.
The RFP was issued to Bonded and Northrop on January 15, and required
the delivery of 6 right wing tips by June 30, 1987, plus 18 right and
left wing tips each at the end of every successive month through
November 30, 1988.
On January 30, the closing date for submission of proposals, counsel
for Honeycomb telephonically requested a copy of the solicitation from
the contracting officer's representative and asked why the firm was not
solicited. The representative explained that this was an emergency
procurement and Honeycomb was not solicited because competition was
limited to suppliers of recently-accepted wing tips since there was
insufficient time for testing and approval of first articles as would be
required from Honeycomb. The representative also explained that since
Honeycomb could not possibly receive the solicitation and submit a
proposal in time for the closing, no practical purpose would be served
by sending it a copy of the RFP. Honeycomb filed its protest here on
the same day.
Honeycomb initially complains that the Air Force's refusal to provide
a copy of the solicitation violated 15 U.S.C. Sec. 637b (1982), which
requires contracting agencies to provide solicitations to small
businesses that request them.
Regarding its exclusion from competition, Honeycomb alleges that
there was no bona fide urgency that reasonably supported restricting
competition to Bonded Technology and Northrop, or that if there was
urgency it was caused by a lack of advance planning which cannot provide
a basis for the use of noncompetitive procurement procedures. 10 U.S.C.
Sec. 2304(f)(5)(A).
The protester also argues that the Air Force lacked a reasonable
basis for determining Honeycomb, a previous supplier of wing tips, was
not an available source under this procurement. The protester alleges
unfair and disparate treatment in that the Air Force determined
Honeycomb would have to undergo first article testing while waiving such
tests for Bonded Technology since Bonded Technology had failed to
produce an entirely acceptable first article wing tip at the time the
determination was made. Also regarding first article testing, Honeycomb
argues that if source approval for this procurement was conditioned upon
having recently submitted an acceptable first article, then the basis
for approval violated 10 U.S.C. Sec. 2319, which requires that an
offeror cannot be excluded from a procurement based on a
prequalification requirement without being afforded the opportunity to
satisfy the prequalification standard.
Lastly, Honeycomb argues that its exclusion amounted to a de facto
debarment of the firm for reasons relating to the firm's responsibility
which should have been referred to the Small Business Administration
(SBA) under the Certificate of Competency (COC) procedures.
The Air Force concedes that contracting officials failed to provide
Honeycomb with a copy of the solicitation in violation of 15 U.S.C. Sec.
637b, and have advised the contracting activity to take action to
preclude such a problem in the future. The Air Force maintains that
sthe firm was not prejudiced by the failure to provide it a copy,
however, since Honeycomb properly was determined not to be a source
capable of meeting the agency's urgent requirements. We note that the
agency's failure to provide Honeycomb a copy of the RFP did not prevent
the protester from filing a protest prior to the closing date. Further,
because, as discussed herein, we find Honeycomb properly was viewed as
not eligible to compete, the agency's failure to provide it with a copy
of the RFP was a procedural defect that did not affect the validity of
the procurement.
When citing an unusual and compelling urgency for use of other than
competitive procedures, the agency is required to request offers from
"as many potential sources as is practicable under the circumstances."
10 U.S.C. Sec. 2304(e). An agency therefore has the authority to limit
the procurement to only those firms it reasonably believes can properly
perform the work within the available time. Arthur Young & Co.,
B-221879, June 9, 1986, 86-1 CPD P 536. We will object to the agency's
determination to limit competition based on an unusual and compelling
urgency, or its determination of the number of available sources, only
when the agency's decision lacks a reasonable basis. See AT&T
Information Services, Inc., B-223914, Oct. 23, 1986, 66 Comp. Gen. ,
86-2 CPD P 447.
Honeycomb attacks virtually every aspect of the Air Force's
justification for limiting competition to Bonded Technology and
Northrop. The protester, however, does not dispute the justification's
findings that many wing tips in use have exceeded their projected useful
lives, the agency lacks replacement parts, and the using activity has
pushed repair to the safety limit. We believe these factors alone
justify a determination of unusual and compelling urgency. In this
regard, we have recognized that a military agency's assertion that there
is a critical need for certain supplies carries considerable weight and
the protester's burden to show unreasonableness is particularly heavy.
Dynamic Instruments, Inc., B-220092 et al., Nov. 25, 1985, 85-2 CPD P
596. Honeycomb has not met its burden.
Regarding the reasonableness of limiting the sources to those
qualifying for waiver of first article testing, we have not objected to
noncompetitive awards to offerors qualifying for waiver where, as here,
waiver was essential to the fulfillment of the required delivery
schedule. Lunn Industries, Inc., B-210747, Oct. 25, 1983, 83-2 CPD P
491. The record indicates that due to the complexity of the wing tips
the Air Force has experienced delay and quality control problems under
previous contracts, both with respect to first articles and production
items. While the protester contends that requiring production testing
of any contractor would be an alternative to the delays occasioned by
required first article testing, the agency would then run the risk of
obtaining unacceptable articles without sufficient time to reprocure
them. The agency is not required to impose that risk on itself.
Honeycomb argues that the wing tip are a staple part of the T-38
aircraft so the agency should have forecast its needs in time to issue a
competitive solicitation and to allow for first article testing. In
this respect, 10 U.S.C. Sec. 2304(f) (5) (A) prohibits award of a
contract using other than competitive procedures as a result of a lack
of advance planning by contracting officials.
Honeycomb has submitted a number of internal Air Force memoranda
which it contends show that there was a critical shortage of wing tips
in 1985, so that contracting officials should have begun a competitive
procurement at that time. The protester points out that agency
officials took from September 1985, when the requirement was identified
by the using activity as an emergency, until December 3, 1986, to
abandon attempts at procuring composite-design wing tips from Northrop
and to initiate the current procurement. During that time, the agency
also issued two show cause orders to Bonded Technology. According to
the protester, the agency therefore should have known that its source of
supply for its previous requirements was in doubt and made earlier
arrangements for a competitive solicitation.
We do not agree with the protester that the urgent situation was
caused by a lack of advance planning. Rather, in our view, the facts
cited by the protester show that the Air Force planned to fill its needs
by means of contracts with Northrop using the new preferred composite
design, and with Honeycomb and Bonded Technology. These efforts were
unsuccessful or only partially successful. Although CICA requires
advance procurement planning, it does not require that the planning be
successful. North American Automated Systems Co., Inc., GSBCA No.
8157-P.R., Mar. 3, 1986, 86-2 BCA P 18,819.
The record here is in contrast to that in Freund Precision, Inc.,
B-223613, Nov. 10, 1986, 86-2 CPD P 543, and TeQcom, Inc., B-224664,
Dec. 22, 1986, 86-2 CPD P 700, cases in which we found a lack of advance
planning by procurement officials. In Freund Precision, Inc., for
instance, during a 18-month evaluation period the agency failed to
evaluate the protester's alternate product although there was time to do
so, and the agency was aware that there was only a single source of
supply. Also, in TeQcom, Inc., although the agency knew there was only
one previoulsy qualified source for a telecommunications system, the
agency failed to publish notices of the required qualification procedure
in the Commerce Business Daily or to take other steps to allow potential
offerors to qualify when there was time to do so. Here, unlike in
Freund and TeQcom, the agency did not fail to engage in advance
procurement planning; its plans simply failed to achieve the expected
results.
The Air Force states that Honeycomb could not be considered an
available source because Honeycomb (or any source aside from Bonded
Technology and Northrop) would have had to obtain first article approval
and that insufficient time was available to perform the necessary
testing and evaluation before production. Honeycomb maintains that the
first article requirement was unfairly applied since it was waived for
Bonded and Northrop but not Honeycomb and that the agency's use of the
first article requirement excluded Honeycomb as an approved source in
violation of 10 U.S.C. Sec. 2319. Honeycomb alleges that when the
solicitation was issued it was the only known supplier of flightworthy
wing tips since it delivered 1,158 wing tips between 1976 and 1982.
Honeycomb also argues that Northrop's being the manufacturer of the
T-38 aircraft should not justify waiver of the first article requirement
because the wing tip design has changed since that firm last produced
the item, and that Bonded Technology should not have qualified for a
waiver based on first article approval under its 1985 contract since
that approval was only conditional. In this last regard, the protester
asserts that the agency did not perform all required tests and that the
approved item had a number of flaws which the contractor agreed to
correct. Finally, the protester argues that the only support for the
agency's decision not to waive the requirement for Honeycomb was an
opinion from an Air Force engineer whom Honeycomb contends is biased
against it.
We have consistently held that an agency's decision to waive or not
to waive first article testing for a particular offeror is subject to
question only where it is shown to be unreasonable. Airline
Instruments, Inc., B-223742, Nov. 17, 1986, 86-2 CPD P 564. In the
absence of a showing that the agency lacked a reasonable basis, we will
not substitute our judgment. Id.; Lunn Industries, Inc., B-210747,
supra. Further, where a first article requirement reasonably is
imposed, there is no right to waiver of the requirement, and the
protester has a heavy burden to show the agency's denial of waiver was
unreasonable and thus improper. Airline Instruments, Inc., B-223742,
supra.
In our view, the decision not to waive the requirement for Honeycomb
was justified by the fact that Honeycomb has not produced the item since
1982, and by the firm's failure to produce an acceptable first article
under its 1984 contract. Under the Federal Acquisition Regulation
(FAR), 48 C.F.R. Sec. 9.303(b) (1986), first article testing may be
imposed when a prior producer has discontinued production for an
extended period of time. Further, Honeycomb failed in seven attempts to
produce an acceptable first article wing tip under its terminated
contract. While Honeycomb is contesting the rejection of those first
articles, that dispute is a matter of contract administration for
resolution under the Disputes Clause of Honeycomb's terminated contract
and not by our Office. 4 C.F.R. Sec. 21.3(f) (1). The firm's
self-serving denial of defects under its previous contract does not
provide a basis for concluding that the agency acted improperly in
refusing to grant a waiver of first article testing in the procurement
now in issue. Amplitronics, Inc., B-209339, Mar. 1, 1983, 83-1 CPD P
210.
Regarding the waiver of first article testing for Bonded, that
decision was based on the first article approval under Bonded
Technology's 1985 wing tip contract with the Air Force. The first
article was in fact conditionally approved by the Air Force's
engineering unit which listed a number of discrepancies required to be
corrected in production items. There is no requirement that a first
article conform exactly to specifications; the purposes of first
article testing and approval is to ensure that the contractor can
produce a conforming product. FAR, 48 C.F.R. Sec. 9.302. Further, the
decision whether to approve a first article also is a matter of contract
administration that we do not review. 4 C.F.R. Sec. 21.3(f) (1). The
protester does not argue that the discrepancies are of the same or more
critical nature than those for which its first articles were rejected,
nor does it dispute that the discrepancies can be readily corrected
during production. Thus, the protester has not shown the basis for
waiver was unfair in relation to the agency's treatment of Honeycomb.
The reasonableness of waiver for Northrop is academic since it is clear
from the record that Northrop was not in line for award, and in fact,
did not submit a proposal.
Further, we also reject the protester's contention that the Air
Force's failure to solicit Honeycomb violated 10 U.S.C. Sec. 2319,
which concerns qualification requirements that must be completed as a
condition for award. The statute provides that a prospective contractor
cannot be denied an opportunity to compete if it can demonstrate that it
or its product meets the standards established for prequalification
before the date specified for award. The determination that a first
article requirement must be applied, except in circumstances appropriate
for waiver, does not involve a prequalification requirement and 10
U.S.C. Sec. 2319 is not applicable. See Nasco Engineering, Inc.,
B-224292, Jan. 14, 1987, 87-1 CPD P 57. Honeycomb was precluded from
competing, not because it failed to meet a qualification requirement
that must be completed for award, but because there was insufficient
time for conducting the first article testing that would be required of
it.
Honeycomb also argues that the agency was biased against it, as
evidenced by the agency's imposing the first article requirement only
after Bonded Technology obtained first article approval under its 1985
contract. In addition, the protester alleges that an Air Force engineer
who participated in the evaluation of both Bonded Technology and
Honeycomb's first articles was biased against Honeycomb.
Where a protester alleges that procurement officials acted
intentionally to preclude the protester from receiving an award, the
protester must submit virtually irrefutable proof that the officials had
a specific and malicious intent to harm the protester, since contracting
officials otherwise are presumed to act in good faith. Rodgers--Cauthen
BartonCureton, Inc., B-220722.2, Jan. 8, 1986, 86-1 CPD P 19. The
protester has not carried its burden of proof.
The issuance of the RFP shortly after Bonded Technology obtained
first article approval under its prior contract does not itself suggest
bias, but only that in planning how to meet its needs the agency
considered the anticipated approval of a contractor's first article.
There is nothing improper in that. Honeycomb bases its allegation of
bias by the engineer on an alleged lack of support for his
recommendations. Bias, however will not be attributed to agency
officials on the basis of inference or supposition. Rodgers-Cauthen
Barton-Cureton, Inc., B-220722.2, supra. Moreover, as previously
explained, the decision that Honeycomb did not qualify for waiver was
supported by the record.
We reject the protester's contention that the decision not to waive
the first article requirement for Honeycomb amounted to a negative
determination of the firm's responsibility and a de facto debarment on
that basis without procedural due process. The denial of waiver of a
first article requirement does not constitute a determination that a
firm is nonresponsible and the COC procedures are not applicable. Aul
Instruments, Inc., B-214517.2, Aug. 13, 1984, 84-2 CPD P 163. Rather,
it constitutes an administrative decision that even though the firm
might possess the capabilities to perform the contract and therefore is
responsible, the risk to the government of foregoing first article tests
is not worth the cost savings, and other less costly methods of ensuring
the necessary quality are not reasonably available. See FAR, 48 C.F.R.
Secs. 9.302 and 9.303; Amplitronics Inc., B-209339, supra. Therefore,
the exclusion of Honeycomb based on its ineligibility for waiver did not
constitute an improper nonresponsibility determination tantamount to a
de facto debarment.
As explained, the Air Force properly justified its decision to limit
competition to sources qualifying for waiver of first article testing
because of unusual and compelling urgency and the urgent situation was
not caused by a lack of advance planning by agency officials. Further,
the agency reasonably determined a first article requirement would be
necessary for Honeycomb, but not for Bonded and Northrop, and therefore
properly solicited them as the only available sources to meet the
delivery schedule.
We deny the protest.
Harry R. Van Cleve
General Counsel
1/ Under the Competition in Contracting Act of 1984, an agency may
use other than competitive procedures to procure goods or services where
the agency's needs are of such an unusual and compelling urgency that
the government would be seriously injured if the agency is not permitted
to limit the number of sources from which it solicits bids or proposals.
10 U.S.C. Sec. 2304(c)(2) (Supp. III 1885).
Matter of: Honeywell Inc.
File: B-225684
Date: June 1, 1987
Where an offeror quotes a price for an unsolicited item in the
solicitation's price schedule at the bottom of the list of solicited
additive alternate items, the agency cannot assess the price of that
unsolicited item in the price evaluation, if the agency is not acquirinq
the item and the item is not required to satisfy solicitation
requirements.
Protection Services Division of Honeywell Inc. protests the award of
a contract to American District Telegraph Company (ADT) under request
for proposals (RFP) No. DACA 05-86-R0289, issued by the United States
Army Corps of Engineers, Sacramento, California, for replacement of the
intrusion detection system at Oakland Army Base, California.
We sustain the protest.
The RFP solicited technical proposals and fixed prices for the basic
work as well as for additive items. Award was to be made to the lowest
priced acceptable offeror, considering those additive items for which
there were sufficient funds to acquire. In this case, all solicited
additives were awarded.
Three proposals were submitted on September 22, 1986, technical
discussions conducted and each proposal was found technically
acceptable. Best and final offers (BAFO) were submitted on November 5,
1986.
The additive items, representing eleven additional buildings not
covered in the basic price, were separately listed on a portion of the
RFP price schedule entitled "Additive Items," along with three
additional additive items, closed circuit television (CCTV) systems.
The additive items page of the RFP price schedule did not contain
specific spaces for pricing CCTV items. However, all of the offerors
listed their CCTV prices on that page below their prices on additive No.
11.
ADT, which proposed on the base price, the eleven additional
buildings and the CCTV additives, had a total BAFO price of $780,461.
The proposed BAFO price of Pinkerton, the third offeror, was $932,419
for these same items. Honeywell's BAFO price schedule for these items
totaled $779,315; however, on the price schedule below the additives,
Honeywell typed the following quote:
Card Access: Mag Stripe Cards 1.50 ea. per 1000
Encoder 3,180.00
An access card encoder is a device that converts access cards into
particular codes for physical security systems.
In evaluating Honeywell's proposal, the Corps included the price of
the access card encoder and found that Honeywell's total price was
$782,495 ($779,315 + $3,180). Therefore, ADT was awarded the contract
on December 23, 1986, for the basic work and all additives.
Honeywell protests that the Corps wrongfully included the price of
the encoder in the evaluation of its proposal price. Honeywell explains
that this item was only an additive alternate item, which could be
purchased by the Corps at its option. Honeywell contends that the RFP
did not require a card encoder and that its technical proposal did not
indicate that an access card encoder was part of its proposed basic
system. Since ADT did not propose to supply an access card encoder,
Honeywell contends that its proposal was not evaluated on an equal
basis, and that it should have received the award as the lowest offeror.
The Corps states that it reasonably assumed that the encoder was part
of Honeywell's proposal, inasmuch as Honeywell provided no specific
language which qualified or indicated that the encoder was offered only
as an alternate item. The Corps notes that the RFP did not solicit or
permit the proposal of alternate items.
Honeywell's proposed prices for the mag stripe cards and encoder were
quoted on the bottom of the list of additive items which the Corps had
the option to purchase under the RFP. Therefore, it is clear that
Honeywell was offering to supply an access card encoder and card access
mag stripe cards at additional specified prices. In this regard, it is
notable that although the Corps included the price of the access card
encoder in Honeywell's price evaluation, it did not include in the
evaluation any price for the mag stripe cards. It is clear that the
encoder was not offered as an alternate proposal, but rather as an
additional additive alternate in case the Corps decided it needed an
access card encoder to code its own access cards for its security
system. The fact that the RFP did not authorize alternate proposals, or
solicit prices or allow for the acquisition of an access card encoder is
not relevant to the issue of whether the Corps' properly evaluated
Honeywell's price proposal.
Furthermore, the RFP did not require an access card encoder, although
numerous card reading devices were required. Moreover, our review of
Honeywell's technical submission indicates that an access card encoder
is not an integral part of its system necessary to meet RFP
requirements.
The Corps, in responding to Honeywell's agency-level protest, stated
that it assumed the encoder was being offered to satisfy the RFP
requirement in paragraph 14.1.16 of the technical specifications.
However, the referenced paragraph required "encrypted high line security
to communicate with the data gathering panels." Since an access card
encoder is not pertinent to meeting the requirements of the referenced
paragraph, it is apparent that the Corps unreasonably interpreted
Honeywell's price proposal. We note the Corps has not reiterated this
argument in its report responsive to the protest to our Office.
In view of the foregoing, we sustain the protest and recommend that
the Corps determine the feasibility of terminating ADT's contract and
making award of this contract to Honeywell. In this regard, we note
that award was made on December 23, 1986, and that performance has not
been suspended on the contract. The contract was to be performed in 270
days. If the Corps determines that it is not practicable to terminate
ABT's contract, Honeywell is entitled to recover its proposal
preparation costs and the cost of pursuing its protest. 4 C.F.R. Secs.
21.6(d) and (e) (1986).
Comptroller General
of the United States
Matter of: Midland Brake, Inc.
File: B-225682
Date: June 3, 1987
1. There is no basis to question an agency's decision to reject a
technically unacceptable proposal rather than conduct discussions where
the contracting officer properly concluded that the proposal was not
capable of being made acceptable through discussions.
2. Protest that contracting officer should have considered
protester's alternate proposal is denied because the solicitation did
not permit consideration of alternate offers.
Midland Brake, Inc., protests the rejection of its offer and the
subsequent award of a contract to Jerry M. Lewis Truck Parts and
Equipment, Inc. under request for proposals (RFP) No. DLA700-86-R-3857
issued by the Defense Logistics Agency, Defense Construction Supply
Center (DCSC). We deny the protest.
The RFP, issued on August 22, 1986, contemplated a requirements-type
contract for the supply of hydraulic brake master cylinder assemblies
for use on 5-ton trucks as identified by National Stock Number (NSN)
2530-00-741-1070. The RFP's item description specified that the
cylinder assemblies were to be produced in accordance with drawing No.
19207 74-11070TDP, dated May 21, 1985. DLA asserts, and Midland does
not dispute, that this is a complete technical data package adequate for
the preparation of competitive offers.
On September 23, 1986, DCSC issued amendment No. 0001 to the
solicitation to revise the total estimated quantity of assemblies, add a
fourth ordering range and to extend the due date for receipt of offers
to October 16. Four offers, including Midland's, were received by
October 16. Discussions were then held with all four offerors; with
respect to Midland, they centered on the firm's failure to acknowledge
receipt of amendment No. 0001. On October 23, amendment No. 0002 was
issued for the purpose of providing all offerors an opportunity to
verify or, if possible, improve their price or delivery terms. Revised
offers were due by November 6. Midland hand-carried amendment Nos. 0001
and 0002 to DCSC prior to that date.
Not noticed by the contracting officer at this time was the fact that
on the third of amendment No. 0001's six pages and on the second of
amendment No. 0002's four pages, Midland had typed in an empty space
between other existing typewritten lines of text "We quote our part
number 2951."
Subsequent to the receipt of BAFOs on November 6, DLA realized that
the addition of the fourth ordering range conflicted with another
solicitation provision concerning the maximum delivery order quantity a
contractor would be obligated to furnish. This was corrected by the
issuance of amendment No. 0003, which deleted the fourth ordering range
and called for the submission of revised offers by January 6, 1987. The
due date was moved forward to December 19, 1986, by amendment No. 0004
because DLA determined there was an urgent need for these supplies.
Midland made no reference to its part number 2951 in its acknowledgment
of receipt of either of these amendments. Only three offerors submitted
BAFOs; Midland and Jerry M. Lewis were the low and second low offerors,
respectively.
Although Midland was the low offeror, before any award was made to it
the contracting officer discovered the references in Midland's proposal
to the firm's commercial brake master cylinder assemblies. As a result
of telephone inquiries, the contracting officer learned that Midland was
offering its part in accordance with its request for deviation submitted
under a prior contract (DLA700-86-C-4202) Midland has with DCSC for the
same requirements.
According to DCSC's memoranda of these telephone conversations, at
this point the contracting officer considered Midland to be "aware that
it is in non-compliance with specifications and therefore will be
determined technically unacceptable." Nevertheless, the contracting
officer called Midland again on January 15, 1987, "to verify that
Contractor is offering his P/N 2951 and the item will require deviation
to be completely in accordance with the specifications. " Midland was
asked to confirm this in writing, which it did by letter of January 16.
In the meantime, the contracting officer checked on the supply status
of the item being purchased and the status of Midland's request for
deviations under its existing contract. She was advised that there was
an urgent need for these items, over 13,000 of which were backordered;
that the deviations from the specification requirements which Midland
had requested under its prior contract had not yet been approved and
would require approximately 60 days for the engineering support activity
for this item, the Army Tank Automotive Command (TACOM) to evaluate;
and that even if the requested deviations were approved, Midland's
product would then have to undergo First Article Testing, which only
Jerry M. Lewis had passed. The contracting officer then awarded the
contract to Jerry M. Lewis as the low, technically acceptable offeror
after concluding that Midland was offering a nonconforming part under
the subject RFP and in view of the urgent need for the master cylinder
assemblies. Upon receiving notice of award to another, Midland filed an
agency level protest by letter dated January 25, 1987, and with our
Office by letter of January 30.
In its initial protest, Midland contends that the rejection of its
offer as technically unacceptable resulted from the agency's failure to
conduct meaningful discussions with it. It also asserts that the award
to Jerry M. Lewis is contrary to the policy mandated by the Competition
in Contracting Act (CICA) of 1984, that agencies promote the use of
commercial products. See CICA, 10 U.S.C. Sec. 2301 (Supp. III, 1985).
Midland notes that in none of the discussions it had with DCSC during
the course of this procurement prior to December 1986 was the
acceptability of its commercial part mentioned. It attributes this to
TACOM having "deemed" Midland's commercial part to be the technical
equivalent of the part specified in the RFP's technical drawing package.
The protester also points out that DCSC did not "object" When Midland
confirmed that it was offering its commercial part. Midland argues that
no meaningful discussions were held because the agency did not
specifically advise Midland that its part was considered technically
unacceptable. The protester asserts that it was thereby deprived by the
agency of an opportunity to submit a proposal which would have addressed
DCSC's concerns.
Here, DCSC solicited offers for the supply of an item to be built in
accordance with a complete government technical drawing package. The
only indication in Midland's initial offer and the copies of four
solicitation amendments which it returned which would indicate Midland's
intent to supply its own commercial part and not the item described in
the RFP were notations inserted in two of the amendments in such an
inconspicuous manner that they were almost overlooked in the evaluation
and award process. This circumstance, we believe, is what resulted in
the agency's failure to discuss this matter with Midland early on in the
procurement. When queried by the agency, Midland confirmed that its
intent was to supply its own commercial part. Although under an
existing contract for the supply of the same item as here Midland had
requested deviations from the specifications which would permit it to
substitute its commercial product for the part specified, at the time of
the evaluation of proposals and award of this contract the requested
deviations had not been approved and Midland had not been authorized to
furnish its commercial part in satisfaction of the earlier contract.
Under these circumstances, we find no merit in Midland's assertion
that the agency failed to conduct meaningful discussions. It is true
that discussions, whether written or oral, are a fundamental requirement
of negotiated procurements and must be held with all responsible
offerors whose proposals are within the competitive range. Price
Waterhouse, 65 Comp. Gen. 205 (1986), 86-1 C.P.D. P 54. This
requirement includes advising offerors of deficiencies in their
proposals and affording them the opportunity to satisfy the government's
requirements through the submission of a revised proposal. Furuno
U.S.A., Inc., B-221814, Apr. 4, 1986, 86-1 C.P.D. P 400. Thus, it is
well settled that competitive range discussions must be "meaningful" in
nature--that is, agencies must point out weaknesses, deficiencies, or
excesses in proposals unless doing so would result in technical leveling
or technical transfusion. Price Waterhouse, 65 Comp. Gen. 205, supra.
The record in this case belies Midland's assertion that DCSC was
obligated to discuss the technical unacceptability of its master
cylinder assembly because the agency concluded that Midland's proposal
was technically unacceptable and was no longer within the competitive
range. The agency reports, and Midland does not dispute, that Midland's
proposal did not clearly indicate that it was offering its commercial
5ton master cylinder assemblies. Further, it is DCSC's position that
the firm failed to provide sufficient information in its proposal to
establish the acceptability of its commercial product or indicate how it
proposed to modify its product to meet the specification requirements.
According to the agency, Midland has filed 52 requests for deviation
from the mandatory design specifications under its existing contract No.
DLA700-86-C-4202 so that it could provide its commercial product.
Although Midland alleges that "from a technical stand-point, all of the
deviations were accepted" DCSC reports that the request for deviations
is still pending under that contract.
Nevertheless, the protester asserts that the agency was obligated to
conduct further discussions with regard to its proposed commercial
product so as to provide Midland with an opportunity to revise its
proposal to satisfy the solicitation requirements. We note, however,
that Midland has never represented that it was willing to provide a
product other than its commercial master cylinder assembly. In view of
this, the agency takes the position that further discussions would have
served no useful purpose because Midland's proposed product would not
meet the government's needs and the items were urgently needed.
We find that DCSC was not required to conduct further discussions
with Midland once it ascertained that the firm's proposal was for its
commercial product--which Midland concedes does not conform to the
technical requirements-- since agencies need not hold discussions with
offerors of proposals that are not technically susceptible of being made
acceptable through discussions. See Federal Acquisition Regulation
(FAR), 48 C.F.R. Sec. 15.609(a) (1986); Fairchild Weston Systems, Inc.,
B-218470, July 11, 1985, 85-2 C.P.D. P 39. Here, the agency properly
concluded that Midland's proposal was not capable of being made
acceptable through discussions because, as the agency reports, the
design specification contained in this RFP is the most complete
technical data package which reflects the government's minimum needs for
this item and Midland has not shown that this requirement is
unreasonable. Basically, Midland has simply argued that although its
proposed master cylinder assembly does not "exactly meet the stated
specifications" it allegedly meets or exceeds the agency's performance
needs. Midland argues that based on a prior course of dealing with
procurement officials at DCSC, it offered to supply its own commercial
cylinder which is the identical cylinder it seeks to provide under its
existing contract with DCSC.
We note that to the extent Midland is alleging that the contracting
officer should have accepted its alternate proposal based on a prior
course of dealing it is a well established principle in government
contracts that each procurement is a separate transaction and the
acceptability of a proposal depends upon the facts and circumstances of
that particular procurement and not upon prior procurements.
Alfa-Laval, Inc., B-221620, May 15, 1986, 86-1 C.P.D. P 464 at 4.
Furthermore, an agency must evaluate proposals only on the basis of the
factors and requirements specified in the solicitation in response to
which they were submitted. Cardkey Systems, B-220660, Feb. 11, 1986,
86-1 C.P.D. P 154. Thus, even if the requested deviations under
Midland's prior contract were approved, that approval cannot be carried
over to this procurement because those deviations were not incorporated
into this RFP.
Midland further contends that its proposed commercial master cylinder
constitutes an alternate offer which meets or exceeds the government's
needs at a lower price than Jerry M. Lewis. Therefore, Midland argues
that since the RFP did not prohibit alternate offers, its alternate
proposal should have been considered by DCSC. In response, the agency
states that contrary to the protester's assertions, the RFP does
prohibit consideration of alternate offers. DCSC states that the
solicitation incorporates by reference section 52.215-13 of the FAR,
which states in pertinent part that "offers for supplies or services
other than those specified will not be considered unless authorized by
the solicitation." FAR, 48 C.F.R. Sec. 52.215-13(d) (1968). However,
Midland contends that paragraph L08 of the solicitation, entitled
"Alternate Offers," advises prospective offerors that alternate
proposals could be submitted.
We disagree. The specific language of parag raph L08 makes it clear,
as the agency argues, that it is not for use in negotiated
procurements--only for sealed bid solicitations. Section "L" of the
instant solicitation contains various provisions of the FAR which are
applicable to both sealed bid and negotiated solicitations. We note,
however, that FAR Sec. 52. 214-12 cited in paragraph L08 "Alternate
Offers" is identified in paragraph L01 (a) as a provision applicable to
sealed bid solicitations. In our view, the two provisions, when read
together in context, make it clear that paragraph L08 was intended for
use in sealed bid solicitations. Accordingly, the contracting officer
was not permitted to consider any alternate proposals.
Finally, we need not address Midland's allegation that DCSC ignored
the CICA mandated policy to procure commercially available parts since
in its comments on the agency report Midland does not rebut DCSC's
arguments on this issue. We therefore consider this issue to have been
abandoned.
Midland requested that it be awarded attorney's fees and the costs of
pursuing the protest. However, recovery of costs is allowed only where
a protest is found to have merit. 31 U.S.C. Sec. 3554(c)(1) (Supp. III,
1985); 4 C.F.R. Sec. 21.6(d) (1986). Since we have denied the protest,
we also deny Midland's claim for costs.
Protest denied.
Harry R. Van Cleve
General Counsel
Matter of: ALM, Inc.
File: B-225679.3
Date: May 8, 1987
1. Whether awardee can and intends to perform contract using
employees whose resumes were included in awardee's proposal is a matter
of responsibility, as is the matter of the firm's integrity. General
Accounting Office will not review agency's affirmative determination of
awardee's responsibility absent showing of possible agency fraud or bad
faith or alleged failure to apply definitive responsibility criteria.
2. Administration and enforcement of Service Contract Act is the
responsibility of the Secretary of Labor and head of the contracting
agency, not General Accounting Office.
3. General Accounting Office will not consider whether contracting
agency properly will enforce contract terms or whether awardee will
perform as required, since those are matters of contract administration,
which is the responsibility of the contracting agency.
ALM, Inc., protests the award of a contract to Information Spectrum,
Inc., under Department of the Navy request for proposals (RFP) No.
N00019-85-R-0073. We dismiss the protest.
ALM states it understands that Information Spectrum submitted several
resumes of ALM's employees as part of its offer, without the permission
of those individuals; ALM argues that Information Spectrum thereby
misled the Navy in the evaluation of the firm's proposal. ALM also
protests that Information Spectrum plans, in performing the contract, to
use less qualified personnel than needed, and will violate Service
Contract Act wage requirements. ALM argues that these and other factors
demonstrate that Information Spectrum lacks integrity.
ALM does not suggest that the Navy acted improperly in evaluating
Information Spectrum's proposal. Whether Information Spectrum can or
intends to perform the contract with the personnel it proposed relates
to the company's responsibility as a prospective contractor. Dayton T.
Brown, Inc., B-223774.3, Dec. 4, 1986, 86-2 C.P.D. P 642. Similarly,
Information Spectrum's general integrity is a responsibility matter.
Federal Acquisition Regulation (FAR), 48 C.F.R. Sec. 9.104-1 (1986).
Award to the firm necessarily was preceded by the Navy finding
Information Spectrum responsible, FAR, 48 C.F.R. Sec. 9.103, and our
Office will not review such an affirmative determination of
responsibility absent a showing of possible agency fraud or bad faith or
an alleged failure to apply definitive responsibility criteria properly.
4 C.F.R. Sec. 21.3(f) (5). ALM does not suggest either circumstance
applies here.
As to whether Information Spectrum complies with the Service Contract
Act, the administration and enforcement of that law and its provisions
is the responsibility of the Secretary of Labor and the contracting
agency. 41 U.S.C. Sec. 352(b) (1982); Starlite Services, Inc.,
B-210762, Mar. 7, 1983, 83-1 C.P.D. P 29.
Finally, whether the Navy properly enforces the contract terms, and
whether Information Spectrum actually performs as required under its
contract, involve the administration of the contract. Reclamation
Technology, Inc., B-225223, et al., Dec. 5, 1986, 86-2 C.P.D. P 650;
Water Resources Education, B-224682, Nov. 28, 1986, 86-2 C.P.D. P 626.
Contract administration is the responsibility of the procurement agency,
not our Office. 4 C.F.R. Sec. 21.3(f) (1).
Robert M. Strong
Deputy Associate
General Counsel
Matter of: ALM, Inc.
File: B-225679
Date: February 13, 1987
Agency's decision to extend the deadline for proposal submission due
to inclement weather is unobjectionable, even though protester was not
informed of extension until after original deadline had passed, where
protester, who already had submitted a timely offer, was not
competitively prejudiced.
ALM, Inc., protests the Navy's decision to extend the time for
proposal submission under request for proposals (RFP) No.
N00019-85-R-0073. We dismiss the protest.
As issued, the RFP provided that proposals must be submitted to the
Navy by 10 a.m. on January 28. On January 27, ALM called the
contracting officer to determine if the Navy planned to extend the time
for proposal suhmission due to the severe snow storm which occurred in
the Washington, D.C., area on January 26, and was told that no extension
was planned. ALM delivered its proposal to the contracting division on
January 28 at 9 a.m., at which time the Navy still was informing
offerors that no extension of the submission time would be granted. At
11 a.m. on January 28, the Navy informed ALM that the time for proposal
submission had been extended to 3 p.m. that same day. ALM protests that
it was improper for the Navv to extend the time for proposal submission
after the deadline had passed.
The Navy has advised our Office that after ALM left the contracting
division the contracting officer became aware that a number of offerors,
as well as Navy personnel, were delayed due to poor road conditions.
The agency then decided to extend the time for proposal submission from
10 a.m. to 3 p.m. The Navy reports that it made this decision before
the 10 a.m. deadline but did not immediately notify ALM because the
firm's proposal already had been submitted.
The Federal Acquisition Regulation (FAR), 48 C.F.R. Sec. 14.402-3(a)
(2) (1986), permits the contracting officer to extend the time for bid
opening in a sealed bid procurement, even after the scheduled time has
passed, if an emergency or unanticipated event interrupts normal
governmental processes so that the conduct of bid opening as scheduled
would be impractical. In such circumstances, the agency is permitted to
proceed with bid opening as soon as practical after the scheduled time.
FAR, 48 C.F.R. Sec. 14.402-3(c).
While the present case involves a negotiated, rather than a sealed
bid, procurement, and there is no separate regulation dealing with these
circumstances for negotiated procurements, we see no reason why the same
rationale should not apply to the facts here. Indeed, it would be our
view that where the contracting agency determines that weather
conditions could reduce competition to some significant extent,
extending the closing date for a reasonable period of time not only is
permissible, but is advisable. While it is unfortunate that ALM was not
informed of the time extension before it delivered its proposal, we find
no indication that ALM was competitively prejudiced by the extension.
The protest is dismissed.
Robert M. Strong
Deputy Associate
General Counsel
Matter of: Xmco, Inc.
File: B-225678
Date: March 19, 1987
Fifth low offeror under a canceled solicitation is not an interested
party to protest the cancellation and alleged subsequent sole-source
award. Even if the protest were sustained and the solicitation
reinstated, the protester would not be in line for award.
Xmco, Inc. protests the cancellation of request for proposals (RFP)
No. DAMD17-87-R-0024 issued by the Department of the Army for the
acquisition of domestic and foreign journal subscriptions, and
associated on-line computer services. Xmco also asserts that the agency
subsequently acquired the services by making an improper sole-source
contract award.
The solicitation provided that award would be made to the responsible
offeror whose offer, conforming to the solicitation, would be most
advantageous to the government, cost or price and other factors
specified in the solicitation considered. We have held that this
language requires that award be made to the lowest-priced, responsible
offeror whose proposal is determined to be technically acceptable.
Kreonite, Inc., B-222439, July 11, 1986, 86-2 CPD P 60. The record
shows that Xmco's offer was the highest of the five offers received in
response to the RFP.
Since it is apparent from solicitation that a single, aggregate award
to the lowest-priced offeror was to be made, we find that Xmco lacks the
"direct economic interest" that is necessary to make it an interested
party under our Bid Protest Regulations. See 4 C.F.R. Sec. 21.0(a)
(1986); Falcon Management, Inc., B-222200.2, May 9, 1986, 86-1 CPD P
448. Xmco, as the fifth low offeror, would not be in line for award
even if we sustained its protest and recommended that the alleged
sole-source award be terminated and the RFP reinstated. Id.
Accordingly, we will not consider Xmco's protest on the merits.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
Matter of: PRC Kentron
File: B-225677
Date: April 14, 1987
1. Contracting agency's cost realism analysis involves the exercise
of informed judgment, and the General Accounting Office will not
question such an analysis unless it clearly lacks a reasonable basis.
Reasonable basis is provided by Defense Contract Audit Agency's
determination that cost data submitted with proposals was adequate in
all respects, agency's reconciliation of estimated costs with the
independent government cost estimate, and agency's consideration of
whether proposed cost elements were reasonable and consistent with the
work to be performed as outlined in offerors' technical proposals.
2. Where an agency regards proposals as essentially equal, cost may
become the determinative factor in making an award notwithstanding that
in the evaluation criteria cost was of less importance than technical
considerations.
3. Source selection officials are not bound by the recommendations
and conclusions of evaluators, but must determine if point scores are
indicative of technical superiority and what the difference in point
scores may mean in contract performance. The judgment of the procuring
agency concerning the significance of the difference and whether or not
offers are technically equal will be afforded great weight by the
General Accounting Office.
PRC Kentron protests the award of a cost-plus-fixed-fee contract to
Dynaspan Services Company under request for proposals (RFP) No.
DAAD07-86-R-0003, issued by the United States Army White Sands Missile
Range, New Mexico, for test and evaluation support services. PRC
challenges the Army's application of the RFP's evaluation criteria.
We deny the protest.
Offerors were required to submit separate management, technical and
cost proposals. The RFP identified the following three major evaluation
criteria and their approximate respective importance:
(1) Management and Past Performance 45 percent
(2) Technical 40 percent
(3) Cost/Price 15 percent
Offerors were advised that the cost factor would not be scored but
evaluated in a subjective manner by comparison with the government cost
estimate and by appropriate consideration of information from the
Defense Contract Audit Agency, government technical personnel, and other
sources. The offeror's price would then be evaluated in accordance with
its comparative advantage to the government. The RFP's Best Buy
Decision Clause provided that:
"The ultimate source selection will not be made by the
application of a mathematical formula, but by the exercise of
sound business judgment on the part of the Contracting Officer.
This decision will be based on the probable costs to the
Government as compared with the evaluated numerical ratings of the
proposal. Significant differences in measured proposal merit may
or may not be deemed affordable or worth an additional amount of
money, depending upon the best interest of the Government. This
procurement is competed for Quality of Service and Reasonableness
of Cost, not minimum service at minimum cost."
Proposals from PRC and Dynaspan, the only firms which submitted
proposals, were reviewed by a proposal evaluation board (PEB), and given
scores of 58.3 and 59.2, respectively, out of a possible 85 points.
After participating in oral negotiations, PRC and Dynaspan submitted
best and final offers which were ranked by the PEB. PRC's offer for
$43,276,494 received 57.3 points. Dynaspan's offer for $41,597,246
received 55.3 points. The PEB concluded that award to either offeror
would present a moderate risk to the government in terms of technical
performance and recommended award to PRC based on its higher technical
score. However, based on their review of the record, source selection
officials determined that although PRC's proposal was ranked slightly
higher, it was essentially equal to Dynaspan's proposal, which was lower
in evaluated cost. They concluded that the record "did not support the
potential payout of the higher total cost differential on a proposal
that would provide marginal utility," and awarded a contract to
Dynaspan.
PRC protests that the award to Dynaspan converted the procurement
from one emphasizing management and technical excellence into one for
the lowest estimated cost. PRC contends that although the RFP provided
that the award decision would be based in part upon probable cost to the
government, there is no indication that the government's estimate was
considered, that the cost data presented were complete and accurate, or
that the costs were consistent with the work to be performed. PRC
argues that a probable cost analysis here should include any necessary
adjustments to proposed staffing to preclude the possibility of a
contractor's deliberate understatement of staffing to keep estimated
costs low, and that its protest should be sustained if such analysis was
either not performed or performed defectively.
We first note that the Army has denied the protester access to much
of the evaluation material, but has provided the material for our
review. We have reviewed the evaluation material in camera, but our
discussion of its contents is limited because of the agency's
restriction on its disclosure. Audits & Surveys, Inc., B-224556, Jan.
30, 1987, 87-1 C.P.D. P .
When a cost reimbursement contract is to be awarded, the offerors'
estimated costs of contract performance and their proposed fees should
not be considered as controlling since the estimates may not provide
valid indications of final actual costs, which the government is
required, within certain limits, to pay. See Federal Acquisition
Regulation, 48 C.F.R. Sec. 15.605(d) (1986); Dalfi, Inc., B-224248,
Jan. 7, 1987, 87-1 C.P.D. P . The government's evaluation of estimated
costs thus should determine the extent to which the offerors' estimates
represent what the contract should cost, assuming reasonable economy and
efficiency. This determination in essence involves an informed judgment
of what costs actually would be incurred by acceptance of a particular
proposal. Marine Design Technologies, Inc., B-221897, May 29, 1986,
86-1 C.P.D. P 502. Because the contracting agency clearly is in the
best position to make this cost realism determination, we limit our
review to a determination of whether an agency's cost evaluation was
reasonably based and was not arbitrary. Quadrex HPS, Inc., B-223943,
Nov. 10, 1986, 86-2 C.P.D. P 545.
The record here shows that the Army performed a cost realism analysis
on both offers to determine the probable cost to the government.
Defense Contract Audit Agency auditors reported that the cost data
submitted with the proposals was adequate in all respects. The Army
reviewed all proposed elements of cost to determine if they were
realistic, reasonable and consistent with the work to be performed as
outlined in the offerors' technical proposals. Proposed costs were also
compared to the independent government estimate. After making cost
adjustments for various areas of each offeror's proposal, including
staffing, the Army determined that the probable cost for Dynaspan's
proposal over the 5-year contract period was less than PRC's. Based on
the record, we conclude that the Army's cost evaluation was reasonably
based.
We find PRC's argument that the award to Dynaspan converted the
procurement from one emphasizing management and technical excellence
into one for the lowest estimated cost to be without merit. The point
scoring plan used by the Army maintained the relative weights of the
factors set out in the RFP. Cost became the determinative factor only
when source selection officials found that PRC and Kentron were
essentially equal technically. Where selection officials reasonably
regard proposals as being essentially equal technically, cost may become
the determinative factor in making an award notwithstanding that the
evaluation criteria assigned cost less importance than technical
considerations. Associations for the Education of the Deaf, B-220868,
Mar. 5, 1986, 86-1 C.P.D. P 220.
Our review of the record indicates no basis to object to the agency's
determination that the technical proposals were essentially equal.
Point scores are used as a guideline to intelligent decision making by
source selection officials, and award should not be based upon the
difference in technical scores alone. Rather, a selection should
reflect the procuring agency's considered judgment of the significance
of the difference in point scores. RCA Service Co., B-208871, Aug. 22,
1983, 83-2 C.P.D. P 221. In other words, source selection officials are
not bound by the recommendations of the evaluators, but must determine
if they agree that the point scores are indicative of technical
superiority and what the difference in point scores may mean in contract
performance. Id. New Mexico State Univ./Physical Science Laboratory,
B-215348, Nov. 6, 1984, 84-2 C.P.D. P 504. The judgment of the
procuring agency concerning the significance of the difference in the
technical merit of offers and whether or not offers are technically
equal will be afforded great weight by this Office. The Singer Co.,
B-211857 et al., Feb. 13, 1984, 84-1 C.P.D. P 177.
Selection officials here reviewed the record and determined it did
not support the potential payout of a higher total cost differential on
a proposal (PRC's) that would provide marginal utility. They felt PRC
had not provided a strong management or technical proposal. They noted
that:
"... identified personnel in key positions did not meet minimum
qualifications as specified; past performance did not indicate
strong positive rating; the proposed QA program does not reflect
a thorough understanding of the QA requirement."
They concluded that the marginal differences in technical score, when
weighed against the lower probable cost, favored Dynaspan as the best
buy for the government.
We have upheld determinations that technical proposals were
essentially equal despite differentials significantly greater than the
one here. E.g., Lockheed Corp., B-199741.2, July 31, 1981, 81-2 C.P.D.
P 71 (where the differential was more than 15 percent). Regardless of
how much PRC agrees with the PEB's recommendation and disagrees with the
selection decision, PRC's mere disagreement with the Army's
determination does not render the evaluation objectionable.
Associations for the Education of the Deaf, B-220868, supra, at 6. The
agency therefore properly, and consistently with the RFP's evaluation
criteria, awarded a contract to Dynaspan on the basis of its lower
evaluated costs. SETAC, Inc., 62 Comp. Gen. 577 (1983), 83-2 C.P.D. P
121.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Waste Management, Inc.
File: B-225676
Date: March 26, 1987
Decision to amend solicitation to set-aside procurement for small
businesses after initially issuing solicitation on an unrestricted basis
is proper where agency shows set-aside determination based on
information discovered after the solicitation was issued was reasonable.
Waste Management, Inc. (Waste Management), a large business concern,
protests the determination of the Air Force to set aside for exclusive
small business participation invitation for bids (IFB) No.
F05604-86-B-0079, for refuse collection at Peterson Air Force Base
(Peterson) and NORAD Cheyenne Mountain Complex (NCMC). Both Peterson
and NCMC are located in Colorado Springs, Colorado.
We deny the protest.
The IFB was issued on August 14, 1986, on an unrestricted basis. The
record indicates that the contracting officer made the determination not
to set aside this procurement based on the fact that only one small
business had bid in a previous procurement for refuse collection
services for NCMC.
On August 25, 1986, C&S Sanitary, a small business, protested to the
contracting officer the decision not to set aside the IFB. C&S stated
that both C&S and another small business intended to bid under the
current solicitation. By letter of September 9, 1986, the contracting
officer denied C&S's protest to set-aside the procurement based on the
finding of insufficient small business interest in past procurements for
these services. However, the contracting officer subsequently reversed
the decision after learning that seven small business concerns bid in a
recent procurement for refuse collection services for the United States
Air Force Academy in Colorado Springs, which uses the same supply
sources for refuse collection as Peterson and NCMC. The contracting
officer, prior to bid opening, issued an amendment setting aside the
procurement for exclusive small business participation.
Waste Management argues that, in determining to set-aside this
solicitation, the contracting officer improperly relied on the bidding
results of the Air Force Academy procurement instead of the procurement
history for Peterson and NCMC. The firm also contends that the
set-aside decision was based on improper political pressure. Finally,
Waste Management argues that the set-aside determination was improper
because the contracting officer made the determination "without finding
the responsibility" of small business concerns.
In a recent decision, Waste Management, Inc., B-225403.4, Jan. 30,
1987, 66 Comp. Gen. , 87-1 C.P.D. P , we denied Waste Management's
protest against the Air Force's determination to set-aside for small
businesses a procurement for refuse collection at the Air Force Academy
in Colorado Springs, Colorado, after initially issuing the solicitation
on an unrestricted basis. We found the Air Force's decision to postpone
bid opening and amend the solicitation to setaside the procurement
reasonable because the determination was based on new information (that
numerous small businesses intended to bid) discovered after the
solicitation was issued. In fact, in that procurement, seven small
business concerns bid and four of those firms submitted prices lower
than Waste Management's price.
Waste Management's primary basis of protest here is that the
contracting officer cannot rely on the small business interest in the
Air Force Academy procurement as the basis for setting aside this
procurement. We disagree. The record is clear that the same small
business firms participating in the Air Force Academy procurement can be
considered for this procurement since all these activities are located
in the same place, Colorado Springs, Colorado. In fact, two small
business firms which bid on the Air Force Academy procurement expressed
interest in competing for this requirement. Waste Management does not
refute these facts. Under these circumstances, we think the contracting
officer properly relied on the information from the Air Force Academy
procurement, discovered after the solicitation was issued, to support
the set-aside determination here. See, e.g., American Dredging Co.,
B-201687, May 5, 1981, 81-1 C.P.D. P 344.
In the Waste Management decision, since we also rejected Waste
Management's contention, raised again here, that the set-aside decision
was based on improper political influence since Waste Management clearly
did not rebut the reasonableness of the agency's expectation, based on
new information discovered prior to bid opening, that bids would be
received from at least two responsible small businesses. Also, in
response to Waste Management's assertion that the set-aside
determination was improper because it was made without finding the
responsibility of at least two small businesses (which the protester
again raises here), we explained that the Air Force need not make a
determination tantamount to affirmative determinations of responsibility
before determining to set aside a procurement for exclusive small
business participation. See Waste Management, Inc., B-225403.4, 66
Comp. Gen. , supra. Since the protester has not presented any
arguments or new information distinguishing these protest bases from
those which we have already considered and denied, we see no reason to
consider them again here. See Cannon U.S.A., Inc., B-213554, Aug. 20,
1984, 84-2 C.P.D. P 195.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: National General Supply, Inc.
File: B-225675
Date: May 22, 1987
There is no merit to protester's contention that the contracting
agency did not comply with the regulatory requirements for awarding a
contract after a challenge to the awardee's status as a regular dealer
under the WalshHealey Act had been referred to the Small Business
Administration where the record shows that the contracting agency
substantially complied with the regulatory requirements.
National General Supply, Inc. protests the award of a contract for
operation of a Contractor Operated Civil Engineers Supply Store (COCESS)
to National Supply Systems, Inc. (NSSI) by Norton Air Force Base,
California, under request for proposals (RFP) No. F04607-85-R-0053. We
deny the protest.
The RFP provided that award would be made to the responsible offeror
submitting the lowest evaluated proposal. The proposal of NSSI was
determined to be the lowest; that of the protester was second low. The
solicitation contained the Walsh-Healey Public Contracts Act
representation prescribed by Federal Acquisition Regulation (FAR), 48
C.F.R. Sec. 52.222-19 (1985), which required each offeror to represent
that it was either a regular dealer in or a manufacturer of the supplies
offered. NSSI represented that it was a regular dealer.
By letter dated December 24, 1986, National General Supply filed a
protest with the Air Force alleging that NSSI in fact was not a regular
dealer and requesting that the agency withhold award of a contract to
that firm. The protester included a copy of an August 20 determination
by Grissom Air Force Base, Indiana, that NSSI was not a regular dealer
in connection with a COCESS procurement there. On December 30, the
agency asked the protester to provide additional information in support
of its protest, pointing out that a recent determination by the Defense
Contract Administration Service (DCAS) was in conflict with that made by
Grissom. The contracting officer advised both the protester and NSSI
that award would be withheld until all requested information had been
received, or for 10 days, at which time a determination would be made.
Both the protester and NSSI responded with additional information.
By letter dated January 14, 1987, the contracting officer informed
the protester of the agency's determination to award the COCESS contract
to NSSI. The contracting officer stated that this determination was
based on a preaward survey conducted by DCAS on December 10, 1986, which
indicated that NSSI qualified as a regular dealer under the Walsh-Healey
Act. By letter of January 15, 1987, the protester advised the
contracting officer that it was appealing his determination and added
that any delay in making the award pending a final determination would
not cause hardship to the government since the protester would agree to
an extension of its current COCESS contract, which was due to expire on
January 23. The agency awarded a contract to NSSI on January 22. On
January 27, the contracting officer requested a decision from the Small
Business Administration (SBA) as to whether NSSI qualified as a regular
dealer. The agency informs us that it has not received a decision from
SBA on this issue.
The basis for National General Supply's protest to this Office is
that the Air Force allegedly failed to comply with the procedural
requirements of FAR, 48 C. F.R. Secs. 22.608-3 and 22.608-4 in awarding
the contract to NSSI. Basically, the cited regulations provide that if
a party disagrees with a contracting officer's determination in response
to a protest challenging the Walsh-Healey eligibility of a particular
offeror, the contracting officer must forward the determination to the
Department of Labor or, if the offeror is a small business concern, to
SBA. FAR, 48 C.F.R. Sec. 22.608-3(b). The regulations provide further
that after forwarding the case for review, the contracting officer may
not award a contract unless the contracting officer certifies in writing
that the items to be acquired are urgently needed or that failure to
make award will delay delivery or performance and result in substantial
hardship to the government. FAR, 48 C.F.R. Sec. 22.608-4(a). Such a
certification must be approved as required by agency regulations and the
contracting officer must document the contract file to explain the need
for making the award prior to completion of the review by DOL or SBA.
Finally, written notice of award must be given to DOL and, as
applicable, SBA, the the protester, and other concerned parties. FAR,
48 C.F.R. Sec. 22.608-4(b).
National General Supply contends that the contracting officer failed
to make the required certification or to document the contract file
concerning the need to award the contract to NSSI and failed to obtain
the required approval. The protester bases these contentions on the
fact that it did not receive copies of any such certification,
documentation or approval. The protester also contends that any
certification of urgency or substantial hardship the contracting officer
may have made did not take proper account of the protester's offer to
continue to operate its COCESS pending SBA's ruling on NSSI's
Walsh-Healey eligibility. In addition, because its copy of the notice
of award did not indicate that the Air Force had sent copies of the
notice to either DOL or SBA, the protester contends that the Air Force
failed promptly to notify these other agencies of the award, as
required. 1/
We find no merit to this protest. The agency's report to this Office
2/ demonstrates that in awarding the contract to NSSI pending SBA's
consideration of the firm's Walsh-Healey status, the Air Force
substantially complied with the regulatory requirements cited by the
protester. The record shows that the contracting officer awarded the
contract to NSSI on January 22. On January 23, the contracting officer
signed a certification stating that failure to award a COCESS contract
would have an adverse effect on the government. (The Base Civil
Engineering Squadron would be immobilized and the mission of the 63rd
Military Airlift Wing would be adversely affected.) The Base Contracting
Officer approved the certification on January 27. Although the
regulations appear to contemplate that the certification and approval
occur prior to award, the regulations do not expressly so require and we
fail to see any prejudice to the protester by the sequence of these
events in this case. The agency provided the protester with notice of
the award by letter dated January 23; the regulations do not require
that a protester receive copies of other documents or correspondence.
The agency informed DOL and SBA of the award on February 6.
The protester also argues that if the Air Force had a critical need
for continued operation of a COCESS, the contracting officer should not
have ignored the protester's offer to continue its COCESS operation. We
considered a similar argument in Superior Engineering and Electronics
Co., Inc., B-224023, Dec. 22, 1986, 86-2 CPD P 698, and said that there
is no requirement that an agency fulfill an urgent need by extending the
services of an incumbent contractor on a sole-source basis.
In its comments on the agency's report, the protester notes that the
Air Force apparently did not send to SBA a copy of the protester's
letter to the Air Force of January 7 in which it provided additional
argument on NSSI's status as a regular dealer. We agree with the
protester that the agency thus failed to comply with FAR, 48 C.F.R. Sec.
22.608-3(b), which requires the agency to forward the entire record to
the appropriate reviewing agency, in this case SBA. We assume the
protester has since provided SBA with a copy of its January 7 letter,
but in any event, the Air Force should take the necessary steps to
ensure that SBA indeed has the sentire record in this matter.
Even though we deny the protest, we note that there was an apparent
delay between the agency's receipt of the protester's letter of January
15 appealing the contracting officer's Walsh-Healey determination and
the agency's referral to SBA. The record indicates that the agency
received the protester's letter on January 15, yet did not forward the
record to SBA until January 27. Although this did not prejudice the
protester, we think the regulations contemplate a more expeditious
referral.
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ In its comments on the agency's report, the protester also
complains that the agency awarded the contract without prior
notification to this Office. At the time of award on January 22,
however, the protester had not yet filed a protest with this Office.
Thus, there was no requirement for the Air Force to notify us of the
award.
2/ National General Supply complains that the Air Force did not
provide it with all of the exhibits attached to the report submitted to
this Office. We called this to the agency's attention, and the agency
agreed to provide the protester with copies of those exhibits that were
not already in the protester's possession. Based on the protester's
comments on the report, it appears the protester ultimately received
copies of all material exhibits.
Matter of: Wire Rope Corporation of America, Inc.
File: B-225672
Date: March 13, 1987
Although the General Accounting Office (GAO) denies on legal grounds
a postaward protest against the agency's alleged failure to investigate
adequately challenges to the awardee's certifications in its bid
concerning its obligation to supply only domestic small business end
products in performing the contract, as the protest touches upon issues
generally beyond the scope of GAO's Bid Protest Regulations, GAO
nevertheless recommends in the face of conflicting evidence that the
agency verify the awardee's intent to meet the requirements of the total
small business set-aside procurement.
Wire Rope Corporation of America, Inc. (WRCA) protests the award of a
contract for the supply of various quantities of steel wire rope to
Broadway Marine, Inc. under invitation for bids (IFB) No.
DTCG25-87-B-10310, issued as a 100 percent small business set-aside by
the United States Coast Guard, Department of Transportation. WRCA
complains that the Coast Guard has failed to investigate adequately
compelling evidence that Broadway Marine will violate the legal
requirements of this total small business set-aside in performing its
contract.
We deny the protest.
The IFB was issued on November 20, 1986, and bids were opened on
December 22. Broadway Marine was the low bidder with a bid price of
$424,043.30. Pursuant to the governing requirements of the set-aside,
Broadway Marine represented and certified as part of its offer that:
(a) it was a small business concern, and (b) that all end items to be
furnished under the contract would be manufactured or produced by a
domestic small business concern. See Federal Acquisition Regulation
(FAR), 48 C.F.R. Sec. 52.219-1 (1985). In this regard, section L-12(c)
of the IFB, "NOTICE OF SMALL BUSINESS SET-ASIDE," provides that a
manufacturer or regular dealer submitting an offer for supplies in its
own name thereby agrees to furnish, in performing the contract, only end
items manufactured or produced by small business concerns inside the
United States, its territories and possessions, or Puerto Rico. FAR, 48
C.F.R. Sec. 52.219-6(c).
Moreover, since the provisions of both the Walsh-Healey Public
Contracts Act and the Buy American Act were applicable to the
procurement as well, Broadway Marine represented that it was a
manufacturer of the supplies offered, FAR, 48 C.F.R. Sec. 52.222-19, and
certified that each end product to be supplied was a domestic end
product. FAR, 48 C.F.R. Sec. 52.225-1.
Award was made to Broadway Marine on December 31. On January 8,
1987, WRCA filed a protest with the contracting officer alleging that
Broadway Marine was a dealer in, and not a manufacturer of, the wire
rope to be supplied and that the materials were not domestic in origin.
WRCA's principal basis for the allegation was Broadway Marine's low bid
price, which WRCA contended was below WRCA's own cost of obtaining
domestic materials. Accordingly, WRCA requested that the contracting
officer conduct an investigation as to the merit of its allegations.
The contracting officer denied the protest after requesting Broadway
Marine to confirm that the wire rope to be furnish would be a domestic
end item. Broadway Marine verbally confirmed its original
certifications and followed this with a letter to the contracting
officer avering that the wire rope was "100% domestic material" and that
". . . we are also manufacturers of said supplies." At this juncture,
the conttacting officer did not accede to WRCA's request that she obtain
from Broadway Marine the identity of the firm's materials supplier.
Following the Coast Guard's denial of WRCA's agency-level protest, WRCA
then protested to this Office.
WRCA's essential ground of protest is that the agency has not
conducted an adequate investigation in the face of compelling evidence
that Broadway Marine may have made material misrepresentations in its
bid concerning its intent to comply with the governing requirements of
the total small business set-aside procurement.
WRCA contends that only three U.S. firms, itself, Paulsen Wire Rope
Corporation, and Universal Wire Products, are small business wire rope
manufacturers having the capacity to manufacture wire rope in the types
and quantities called for. WRCA asserts that, upon advice from the
firms, neither Paulsen (also a bidder under the IFB) nor Universal is
supplying Broadway Marine with wire rope for purposes of fulfilling its
contract. Accordingly, WRCA argues that these circumstances, and the
fact that Broadway Marine's bid price of $424,043.30 was significantly
lower than the bids of those firms deemed ineligible for an award under
the set-aside because of their intent to supply foreign-origin wire
rope, are clear evidence that Broadway Marine will not honor its
commitment to furnish wire rope manufactured or produced by a domestic
small business concern.
WRCA also questions Broadway Marine's Walsh-Healey Act certification
that it is a manufacturer of the supplies. In this regard, WRCA asserts
that the Coast Guard's description of Broadway Marine's manufacturing
process, as set forth in the agency's report, casts doubt upon Broadway
Marine's status as a manufacturer since it is incompatible with industry
trade and usage. Specifically, WRCA contends that although the agency
described Broadway Marine's manufacturing procedure as involving the
procurement of "raw stranded wire" from its domestic source to be
finally processed into steel wire rope, the term "raw stranded wire" is
unknown and such a procedure "virtually unprecedented" domestically.
Rather, WRCA states that domestic manufacturers "process domestic wire
into wire strand and wire rope in one continuous operation."
Thus, WRCA urges that this inaccurate description, as apparently
provided to the Coast Guard by Broadway Marine, as well as "industry
source" information that Broadway Marine's facility does not have the
equipment necessary to produce wire rope, renders implausible the firm's
certification of itself as a manufacturer of the product to be furnished
under the contract.
The Coast Guard's response is primarily that the issues raised by
WRCA are ones traditionally not reviewed by this Office as being outside
our regular bid protest function. In any event, the agency asserts that
the contracting officer here took all necessary steps to insure that
Broadway Marine would comply with contractual requirements. The agency
notes that it obtained Broadway Marine's confirmation of its bid
certifications in response to WRCA's agency-level protest, and, upon
notice of the subsequent protest to this Office, again contacted
Broadway Marine. The firm at that point volunteered, as confidential
commercial and financial information, the identity of its domestic
source for "raw stranded wire." (In turn, at our request, the Coast
Guard has furnished that information to our Office.)
To the extent WRCA argues that Broadway Marine's comparatively very
low bid price indicates that its product is of foreign origin, the
agency points out that the price in fact was only some 3.5 percent lower
than the government's own estimate. Moreover, the agency notes that the
contracting officer's preaward survey to determine the firm's
responsibility as a prospective contractor found Broadway Marine to be
financially capable of performing the contract at that price. Hence,
the Coast Guard asserts that the contracting officer has made every
reasonable effort to assure that Broadway Marine is complying with the
total small business set-aside requirements, and, in that regard, "has
conclusively determined" that Broadway Marine will supply a domestic end
product.
It is well-settled that a bid on a small business set-aside must
establish the legal obligation of the bidder to furnish supplies
manufactured or produced by a domestic small business, generally by the
appropriate certification in the bid to that effect; otherwise, the bid
is nonresponsive to a material requirement of the set-aside and must be
rejected. Stellar Industries, Inc.--Request for Reconsideration, 64
Comp. Gen. 748 (1985), 85-2 CPD P 127. Similarly, the bidder's Buy
American Act certification made elsewhere in its bid must not exclude
any end products or otherwise indicate that it is offering foreign end
products, since, in those circumstances, the government's acceptance of
the bid would not result in a contractual obligation to furnish only
domestic end products in compliance with the set-aside requirements.
See Bender Shipbuilding & Repair Co., Inc., B-219629.2, Oct. 25, 1985,
85-2 CPD P 462.
Although these certifications are usually accepted at face value,
this Office has held that an agency should not automatically rely on
them when, prior to award, because of inconsistent information brought
to its attention, it has reason to question whether a domestic product
will in fact be furnished. Towmotor Corp., 65 Comp. Gen. 373 (1986),
86-1 CPD P 219; Designware, Inc., B-221423, Feb. 20, 1986, 86-1 CPD P
181.
In the present matter, however, it is clear that the contracting
officer had no information at hand which was potentially inconsistent
with Broadway Marine's bid certifications until after she had awarded
the firm the contract. Moreover, since the firm made the appropriate
certifications without qualification in all respects, we see nothing in
its bid that would have indicated to the contracting officer that the
firm was intending to supply other than a domestic end product. As
already noted, given the government's similar estimate for the work, the
firm's bid price did not suggest that a foreign item was contemplated.
Therefore, WRCA does not have a valid legal ground to protest the award
to Broadway Marine on the assertion that the contracting officer failed
in her duty to determine that the firm's certifications in its bid were
correct. Cf. Townmotor Corp., 65 Comp. Gen. at 377, 86-1 CPD P 219 at
5 (clear evidence before award that domestic source was not a small
business concern). Accordingly, since WRCA's protest touches upon
postaward matters generally beyond the scope of our Bid Protest
Regulations, 4 C.F.R. Sec. 21.3(f)(1) (1986), there is no basis upon
which we may sustain the protest.
Nevertheless, we believe that sufficient doubt remains as to Broadway
Marine's ultimate compliance with its obligation to furnish a domestic
end product. In this regard, we note that a computer-generated Dun &
Bradstreet report may call into question Broadway Marine's certification
of itself as a manufacturer since the firm's business is specifically
described as that of a wholesaler having a total of five employees.
Hence, we recommend that the agency verify the correctness of
Broadway Marine's certifications that the end item to be furnished under
the contract will be manufactured or produced by a domestic small
business firm. By separate letter of today, we are so recommending to
the Secretary of Transportation despite our denial of the protest. See
J.I. Case Co., B-221588 et al., May 5, 1986, 86-1 CPD P 430; cf. Deere
& Co., B-224275, Oct. 31, 1986, 86-2 CPD P 504 (no contradictory
evidence in the record sufficient to recommend further investigation by
the agency).
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Gentex Corporation--Request for Reconsideration
File: B-225669.2
Date: March 23, 1987
1. Prior decision is affirmed on reconsideration where protester has
not shown that it contains any error of fact or law.
2. Request for a conference in connection with a request for
reconsideration is denied since the matter can be promptly resolved
without a conference.
Gentex Corporation requests that we reconsider our decision in Gentex
Corporation, B-225669, Feb. 27, 1987, 87-1 CPD P , dismissing its
protest of the award of a contract to Devil's Lake Sioux Manufacturing
Corporation (Devil's Lake) under request for proposals (RFP) No.
DLA100-86-R-0658, issued by the Defense Personnel Support Center (DPSC),
Philadelphia, Pennsylvania, for helmets.
We affirm our prior decision.
Gentex had protested that Devil's Lake received an unfair competitive
advantage by being awarded an option for the same item at more than a
fair market price under the terms of a contract awarded under the Small
Business Administration's section 8(a) program. We held that Gentex was
not an interested party eligible to pursue a protest against award to
the low offeror since as the sixth low offeror in a procurement where
price was the determining factor, Gentex's direct economic interest
would not be affected by the award of the contract. We noted that the
RFP was issued as a partial setaside for small business firms and
envisioned a total of three awards to three separate entities: two
awards for a quantity of 100,000 units each on the unrestricted portion
and one award of 100,000 on the partial set-aside. Awards for a
quantity of 100,000 each had been made to Devil's Lake and Stemaco
Products for the unrestricted portion. The set-aside portion of 100,000
units, for which Gentex as a large business would not qualify, had not
yet been awarded. DPSC reported that Gentex was the sixth-low evaluated
offeror on the unrestricted portion and, even if the protest were
sustained, three other acceptable offerors stood between the protester
and the awardee. Since Gentex was not in line for award, it was not an
interested party and its protest was dismissed.
In its request for reconsideration, Gentex asserts that a price
contained in its alternate offer for a quantity of 200,000 helmets on an
accelerated delivery schedule would make it the third low offeror under
the solicitation. Gentex notes that although the government reserved
the right to make a minimum of three awards, it was not required to.
Thus, Gentex argues, it is an interested party despite the fact that one
of its alternate offers may not have placed it in a third low position
on a price basis per the method of evaluation stated in the RFP.
We do not agree. Gentex did not protest the propriety of DPSC's
decision to make multiple awards on the basis outlined in the RFP. As
evaluated on the award basis actually used by DPSC, which was consistent
with that outlined in the RFP, Gentex is the sixth low offeror on the
unrestricted portion, and not in line for award if Devil's Lake were
eliminated from the competition. Thus, Gentex does not have the
requisite direct economic interest to qualify as an interested party.
See Wing Manufacturing; Simulators Unlimited, Inc.-- Request for
Reconsideration, B-213046.3 et al., Aug. 17, 1984, 84-2 CPD P 187.
Gentex has requested a conference. We will not conduct a conference
on a reconsideration request, however, unless the matter cannot
otherwise be resolved expeditiously. Restorations Unlimited, Inc.; Wade
Associates; Furniture Craftsman, Inc.--Reconsideration, B-221862.2,
July 11, 1986, 86-2 CPD P 57. We do not believe a conference is
warranted in this case.
Since Gentex has not shown that our prior decision was based on any
error of fact or law, it is affirmed.
Harry R. Van Cleve
General Counsel
Matter of: Gentex Corporation
File: B-225669
Date: February 27, 1987
Since as the sixth low offeror in a procurement in which price is the
determining factor, the protester's direct economic interest is not
affected by the award of the contract, the protester is not an
interested party eligible to pursue a protest against award to the low
offeror.
Gentex Corporation protests the award of a contract to Devil's Lake
Sioux Manufacturing Corporation (Devil's Lake) under request for
proposals (RFP) DLA100-86-R-0658, issued by the Defense Personnel
Support Center (DPSC), Philadelphia, for helmets. Gentex contends that
Devil's Lake received an unfair competitive advantage by being awarded
an option for the same item at more than a fair market price under the
terms of a contract awarded under the Small Business Administration's
section 8(a) program.
We dismiss the protest because Gentex is not an interested party as
required under the Competition in Contracting Act of 1984 (CICA), 31
U.S.C. Sec. 3531(a) (Supp. III 1985), and our Bid Protest Regulations,
4 C.F.R. Sec. 21.0(a) (1986).
An interested party is defined in both CICA and our Regulations as an
actual or prospective offeror whose direct economic interest would be
affected by the award of a contract or by the failure to award a
contract. Generally, a party will not be deemed to have the necessary
economic interest where there are other intervening offerors that would
be in line for award if the awardee were eliminated from the
competition. First Continental Bank Building Partnership, B-224423,
Sept. 3, 1986, 86-2 C.P.D. P 255.
DPSC reports that the RFP was issued as a partial set-aside for small
business firms and envisioned a total of three awards to three separate
entities: two awards for a quantity of 100,000 units each on the
unrestricted portion and one award of 100,000 on the partial set-aside.
Awards for a quantity of 100,000 each have been made to Devil's Lake and
Stemaco Products for the unrestricted portion. The set-aside portion of
100,000 units, for which Gentex as a large business would not qualify,
has not yet been awarded.
According to DPSC, Gentex is the sixth-low evaluated offeror on the
unrestricted portion and, even if the protest is sustained, three other
acceptable offerors stand between the protester and the award. Since
Gentex is not in line for award, it is not an interested party, and its
protest is dismissed.
Robert M. Strong
Deputy Associate
General Counsel
Matter of: Americorp
File: B-225667
Date: April 14, 1987
1. General Accounting Office does not, as a general rule, review an
agency decision concerning whether work should be performed in-house or
by a contractor, since this is a matter of executive branch policy not
within our bid protest function.
2. Fact that inadequacy of a solicitation could have been detected
prior to bid opening does not preclude cancellation after opening if
award under the solicitation would not meet the agency's needs.
3. There is no requirement that an agency notify the Small Business
Administration prior to cancellation of a solicitation that has been set
aside for small business.
4. Claim for bid preparation costs is denied where there is no
indication that agency originally issued the solicitation in bad faith
or that cancellation was improper.
Americorp protests the Air Force's cancellation of invitation for
bids (IFB) No. F26600-87-B0018 for a personal financial management
program manager at Nellis Air Force Base, Nevada. The Air Force
canceled the IFB after determining that the specifications did not
provide for a volunteer counselor program and that therefore it would be
in the government's interest to perform the function in-house.
Americorp contends that the specifications were adequate and that it
would be less costly for the government to accept its bid than to
perform the function itself. The protester asks that it be awarded the
contract as the low bidder under the IFB or, if that is not possible, it
claims its bid preparation costs. We deny the protest and the request
for costs.
The IFB sought bids for a personal financial program manager for a
10-month base period and three 1-year options. The Air Force explains
by way of background that the program manager services had previousiy
been contracted out, but that the manager had been assisted by four to
five military volunteer counselors. In developing the specifications
used in this IFB, the Air Force concluded that the Service Contract Act,
41 U.S.C. Secs. 351-358 (1982), prohibited the use of volunteers in the
performance of a government contract; 1/ the IFB therefore required
that all counselors be employees of the contractor.
Americorp's bid of $112,700 for the base and option periods was the
lowest of the 12 received on the November 10, 1986 bid opening date. At
this point, according to the Air Force, the requesting activity realized
that in-house volunteers would no longer be available to augment the
contract program. Since the low bid apparently did not include the cost
of the counselors needed to meet the anticipated counseling workload, 2/
and since, according to the agency, the cost of the additional
counselors would exceed the available funding, the requesting activity
asked that the solicitation be canceled so that the program could be
performed in-house.
The protester argues that the specifications were adequate since all
offerors knew, or should have known, that volunteers were an integral
part of the personal financial management program. It is the
protester's view that therefore there was no reason to cancel the
solicitation and that the cancellation was merely an excuse for the
agency to retain the services of the prior contractor's manager. In
this regard, Americorp maintains that it will be more costly for the
agency to perform the services itself.
In essence, the Air Force has determined based on its need for
volunteer counselors that the services can be provided more economically
in-house. As a general rule, our Office does not review an agency
decision concerning whether work should be performed in-house or by a
contractor, since this is a matter of executive branch policy not within
our bid protest function. Research, Analysis & Management Corp.,
B-215712.2, Jan. 18, 1985, 85-1 CPD P 54. We have allowed a limited
exception to this rule when an agency issues a solicitation to compare
the costs of contracting for services with the costs of performing them
in-house; this exception is inapplicable here, however, since the RFP
did not indicate that it was to be used to make an in-house/contract
determination. Id.
Americorp also argues that the Air Force violated the Federal
Acquisition Regulation (FAR), 48 C.F.R. Sec. 19.506 (1986), by failing
to advise the Small Business Administration (SBA) in writing that it
intended to withdraw a small business setaside. A decision to cancel a
solicitation that has been set aside for small business is not, however,
equivalent to a decision to withdraw a set-aside determination. There
is no requirement that the agency contact the SBA prior to cancellation
of a solicitation set aside for small business. In fact, the
regulations provide that if a set-aside acquisition is not awarded, the
set-aside determination is automaticaily dissolved. FAR, 48 C.F.R. Sec.
19.507(a).
Americorp further contends that the Air Force failed to exercise
advance procurement planning in failing to recognize the inadequacy of
the solicitation prior to bid opening. While 10 U.S.C. Sec.
2305(a)(A)(ii) (Supp. III 1985) requires agencies, in preparing for
procurements, to use advance planning in order to obtain full and open
competition the requirement does not mean that the government guarantees
that its solicitations are completely free of errors that could be
detected by advanced planning; agencies are not precluded from
canceling an IFB after opening where, as here, award under the
solicitation would not meet the agency's needs. W.H. Smith Hardware
Co., B-219987.2, Jan. 21, 1986, 86-1 CPD P 62.
Finally, Americorp argues that the using activity wanted to perform
the activity in-house but failed to inform the contracting activity of
this until after bid opening and concludes that it was improperly
induced to submit a bid. Therefore it requests reimbursement of the
costs of preparing its bid.
Since we have no basis upon which to object to the cancellation and
the protest thus is without merit, there is no basis on which to require
the Air Force to allow Americorp to recover its bid preparation costs.
Bid Protest Regulations, 4 C.F.R. Secs. 21.6(d) and (e). Even assuming,
as Americorp contends, that the issuing activity was negligent in
failing earlier to inform the contracting activity that it did not wish
to continue the program without the ability to use volunteers, such a
mistake or lack of diligence provides no basis on which to allow
recovery of bid preparation costs where, as here, there is no indication
that the Air Force originally issued the IFB in bad faith, and the
subsequent cancellation was proper. Martin Widerker, Inc.-- Request for
Reconsideration, B-223159.3, Mar. 18, 1987, 87-1 CPD P .
The protest and request for costs are denied.
Harry R. Van Cleve
General Counsel
1/ Americorp argues that this procurement involves executive,
administrative or professional personnel which are excluded from
coverage by the Service Contract Act. 41 U.S.C. Sec. 357(b). While
the contractor's manager may be a professional employee, there is a
substantial basis to conclude that the counselors would be service
employees covered by the Act. See 29 C.F.R. Sec. 4.156 and Part 541
(1986).
2/ In fact, the protester confirms this in its March 6, 1987 protest
submission which states: "The protester knew of the use of volunteers
and planned to utilize a staff of volunteers in the course of fulfilling
the contract requirements."
Matter of: Global Fuels Limited, Corporation
File: B-225665.2
Date: March 27, 1987
Where protest is dismissed as academic because challenged
solicitation line item is canceled, there is no basis for the award of
proposal preparation and protest costs, since a prerequisite to the
award of such costs is a decision on the merits of the protest.
Global Fuels Limited, Corporation has submitted a claim for proposal
preparation costs and the costs of pursuing its protest, including
attorney's fees, following its protest which we dismissed as academic.
The protest arose under request for proposals (RFP) No.
DLA600-87-R-0013, issued by the Defense Fuel Supply Center, Defense
Logistics Agency (DLA), for fuel for ships' bunkers.
We deny the claim for proposal preparation costs and for the costs of
pursuing the protest, including attorney's fees.
The RFP requested offers on several different kinds of fuel for
ships' bunkers needed by the government at over 100 seaports. Global's
January 27, 1987, protest concerned only line item 7420-30, which was a
requirement for 10,000 metric tons of F76, a ship fuel, at St. Theodore,
Greece. Global contended that the line item unduly restricted
competition and would result in a sole-source award to Motor Oil Hellas
(MOH), since St. Theodore was the location of MOH's berthing facility,
and MOH strictly limited access to it. DLA reported that it canceled
line item 7420-30 on February 12, 1987, after the Navy Petroleum Office
found the government's estimated needs at the location to be too small
and uncertain to warrant the award of a requirements contract. We
dismissed Global's protest as academic, since no award would be made for
the challenged line item.
Global contends that its protest is not academic because it incurred
costs in responding to an RFP line item on which it was restricted from
competing. Global argues that, because DLA did not treat it fairly, we
should decide its protest and grant it proposal preparation and protest
costs.
When a challenged solicitation is canceled, the underlying protest
becomes academic since no award will be made under the solicitation.
See Sunbelt Industries, Inc., B-214414, July 20, 1984, 84-2 C.P.D. P 66.
Thus, even where a solicitation is canceled for reasons unrelated to
the issues raised by the protester, the protest is academic. See Master
Painting Contractors, et al., B-208648 et al:, Nov. 8, 1982, 82-2 C.P.D.
P 412 (IFB canceled due to lack of funds). Since no award will be made
here under the canceled line item, Global's protest is academic and we
will not decide the merits of its allegations regarding the canceled RFP
line item.
Global is not entitled to the recovery of its proposal preparation
costs since it did not submit a proposal for the canceled line item.
Regarding its claim for protest costs, it is an essential rule of our
bid protest process that a protester's entitlement to costs only arises
upon our determination that an agency's procurement actions were in
violation of applicable statute or regulation. 4 C.F.R. Sec. 21.6(d)
and (e) (1986). If we make no such determination, then a claim for
costs is without foundation. Monarch Painting Corp., B-220666.3, Apr.
23, 1986, 86-1 C.P.D. P 396. Where, as here, a protest is dismissed as
academic, there is no decision on the merits of the protest and thus no
basis for the award of costs. Bru Construction Co., Inc., B-221383.2,
May 27, 1986, 86-1 C.P.D. P 487.
The claim is denied.
Harry R. Van Cleve
General Counsel
Matter of: Radalab, Inc.
File: B-225662.2
Date: May 15, 1987
1. Based on evidence in the record, GAO cannot conclude that
procuring agency deliberately attempted to delay processing of
protester's qualified products list (QPL) application in order to
preclude protester from competing under QPL procurement.
2. Award to low qualified source was proper where record shows that
award was delayed approximately 5 months during which time the agency
determined it would need more time to qualify protester, that award
could not be delayed further due to the need for item, adequate
competition was obtained because all five qualified sources competed and
protester has not shown that award was made to next low bidder at an
unreasonable price.
Radalab, Inc., protests the award of a contract to Sonetronics, Inc.
under invitation for bids (IFB) No. DLA900-86-B-4159, issued by the
Defense Electronics Supply Center, Defense Logistics Agency (DLA) for
the procurement of M138/G dynamic microphones. 1/ Radalab contends that
DLA unreasonably delayed the approval to begin testing on Radalab's
microphones thereby preventing Radalab's microphones from being
qualified in time for contract award.
We deny the protest.
The IFB was issued on September 2, 1986. The solicitation required
that items offered had to be either listed in or eligible for inclusion
on the applicable qualified products list (QPL) prior to award. The IFB
warned bidders that unless it was determined to be in the government's
interest, the procurement "will not be delayed in order to provide an
offeror with an opportunity to meet the standards specified for
qualification."
By October 14, 1986, the bid opening date, six bids were received.
According to DLA, all bidders except Radalab offered microphones which
were qualified under the applicable specifications. Radalab's low bid
indicated that Radalab was "in the process" of receiving qualified
product listing. In addition, by letter dated October 14, Radalab
indicated that it had received first article approval on a H161/D
headset under another DLA contract and that the M138/G microphones are
included in the H161/D headset.
Because Radalab was the low bidder and indicated in its bid that it
was in the process of obtaining qualification approval, the contracting
officer forwarded Radalab's October 14 letter to the Technical
Operations Division (TOD) requesting information as to the estimated
amount of time that it would take Radalab to complete testing and obtain
qualification for its microphones. The TOD forwarded this information
to the 2750th Air Base Wing, Air Force Logistics Center, Wright
Patterson Air Force Base, Ohio (Air Force), which is the specification
preparing activity for the M138/G microphones and which is responsible
for the qualification procedures. According to DLA, the Air Force's
responsibility includes the inspection and approval of the production
and testing facilities of new sources attempting to obtain qualification
approval, the review and evaluation of test samples, and the addition of
new items to the QPL once they have successfully passed qualification
testing and have been approved for inclusion on the QPL.
In early January 1987, the TOD, using information supplied it by the
Air Force, notified the DLA contracting officer that Radalab would not
be granted QPL status for the M138/G microphone based uposn its first
article approval of Radalab's H-161/D headset because a less stringent
specification was applied for the M138/G microphones in the headsets
under Radalab's prior contract than are presently used for the M138/G
microphones under the instant solicitation. In addition, the TOD
notified the contracting officer that it took Radalab over 2 years to
pass the first article test and that deviations from the specifications
were required. Finally, the TOD reported that the Air Force stated that
the approximate time for QPL testing of the microphones is generally 6
to 12 months.
The contracting officer considered the facts that Radalab had not yet
begun its QPL testing, that approval would probably take at least an
additional 6 months, that such delay would seriously jeopardize DLA's
stock position for the microphones, and that maximum competition had
been obtained since all five qualified sources participated in the
bidding. Based upon these considerations, award was made on March 9,
1987, to Sonetronics, the low bidder offering a qualified product under
the IFB.
Radalab contends that it was denied an opportunity to compete for the
award under this procurement "by the deliberate refusal of the procuring
agency to give timely approval to Radalab to begin qualification
testing." Radalab states that it was not asking that contract award be
delayed but instead "was willing to gamble that the tests could be
completed and successfully passed by the time a contract was awarded."
Radalab states that it applied for qualification testing in late August
1986, and it was not until January 29, 1987, that the facilities audit,
the prerequisite to product testing, was conducted.
DLA states that the (approximately 5 month) delay in inspecting
Radalab's facilities was not unreasonable when considering the
surrounding circumstances. Radalab was notified by the Air Force, on
September 9, 1986, that a facility audit would be necessary before the
Air Force could authorize qualification testing. The Air Force also
notified Radalab that they would arrange the audit as soon as the
required personnel were available. However, due to limited Air Force
personnel and travel funds, the Air Force decided, by letter dated
October 14, 1986, that DLA should conduct the audit. DLA states that on
October 27 it received the Air Force request that DLA conduct the audit.
DLA assigned an engineer to conduct the audit who was most familiar
with Radalab's prior attempts (and failures) to pass the tests based
upon the prior version of the M138/G specifications. However, according
to DLA, due to the engineer's workload and other prior work commitments
he was not able to conduct the audit until the end of January 1987.
DLA states that once the audit was performed there were deficiencies
noted which precluded approval of the Radalab facilities and
authorization to proceed with qualification testing. DLA further states
that it was not until the end of March, 9 weeks after the audit was
conducted, that Radalab supplied the information requested as a result
of the facilities audit. Finally, DLA argues that it was not required
under the Federal Acquisition Regulation (FAR), 48 C.F.R. Secs.
9.203(a), 9.206-1 (c) (1986), to delay award until Radalab qualified its
microphones and that qualification should have been initiated by Radalab
in advance and independently of any specific acquisition action. DLA
contends, therefore, that because Radalab did not qualify its
microphones prior to the issuance of the IFB, it ran the risk of having
its bid rejected if it could not establish that its microphones would be
qualified by the time of award.
We have held that a protester's mere allegation that the agency's
procedures for approving alternate products or sources takes more time
than the protester believes is necessary is not a showing that the
procedures fail to provide a reasonable competitive opportunity. See
Rotair Industries, Inc., B-224332.2; B-225049, Mar. 3, 1987, 87-1
C.P.D. P 238.
Radalab has not shown that DLA (or the Air Force) deliberately
attempted to delay the processing of Radalab's QPL application in order
to preclude Radalab from competing on this procurement. If anything, it
appears that DLA delayed the award, between November and March, in order
to give Radalab a chance to compete, until it became clear that Radalab
would not qualify in a timely fashion. In any case, the protester has
the burden of affirmatively proving its case, and we will not attribute
improper motives to procurement personnel on the basis of inference or
supposition. W.H. Mullins, B-207200, Feb. 16, 1983, 83-1, C.P.D. P 158.
Radalab has not shown that DLA or the Air Force deliberately delayed
Radalab's qualification in order to preclude it from competing.
We agree with DLA that contractors generally should seek
qualification in advance and independently of any specific acquisition
action. FAR, 48 C.F.R. Sec. 9.203(a). Radalab contributed to its
failure to qualify for this procurement due to the fact that it did not
attempt to qualify until shortly before bid opening under this
acquisition.
The record further shows that full and open competition was achieved
since as stated above, all five qualified sources competed. Further,
Radalab has not shown Sonetronics' bid, which was second low, to have
been unreasonable in price. See Electro Marine Industries, Inc.,
B-205999, July 21, 1982, 82-2 C.P.D. P 65. Finally, DLA has indicated
that a lengthy delay in the award could have created an inventory
shortage for the microphones. In these circumstances, we cannot object
to the award to Sonetronics.
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ DLA states that the microphones are critical components of the
headset and helmet communications gear worn by crew members of combat
units such as the M-1 and Sheridan tanks personnel as well as by the gun
crews for the Chaparral/Vulcan guns.
Matter of: Dresser-Rand Company
File: B-225658; B-225692
Date: April 20, 1987
Protests raising essentially the same issues as those resolved in a
recent protest involving the same protester, the same agency and the
same awardee are dismissed because no useful purpose would be served by
further consideration of the protester's complaints.
Dresser-Rand Company (formerly Ingersoll-Rand) protests the award of
a contract by the Defense Construction Supply Center, Columbus, Ohio, to
Compressor Engineering Corporation under request for proposals No.
DLA700-86-R-3544. DresserRand also protests the agency's proposed award
to Compressor under request for quotations No. DLA700-86-Q-E707. We
dismiss the protests.
Both solicitations were for spare parts for compressors manufactured
by the protester. In each instance, the solicitation specified an
Ingersoll-Rand part number but also provided for consideration by the
agency of alternate products. The protester offered to provide the
specified products while Compressor offered alternate products at lower
prices. The agency evaluated the alternate products and found them to
be technically acceptable.
The protester filed identical protests with this Office complaining
that in both procurements the agency had used less stringent testing
methods in determining whether Compressor's alternative products were
acceptable than "those applicable to the part specified." Dresser-Rand
also complains that the agency failed to add the cost of government
testing to the prices offered by Compressor, did not obtain sufficient
data regarding the alternate products, and in general did not create an
atmosphere of full and open competition.
The issues raised by Dresser-Rand in this case are virtually
identical to those considered at length in Ingersoll-Rand Co., B-224706,
et al., Dec. 22, 1986, 86-2 CPD P 701. In that case, we said that the
requirement that an agency treat all offerors equally does not mean that
the same procedures used in the past to qualify products must be used
thereafter in subsequent procurements to qualify other products. We
also said that since the solicitation there, as here, did not provide
for the cost of testing to be added to the prices for alternate
products, the agency would not have had authority to do so. Since that
decision, we have dismissed subsequent protests by the same protester on
the same issues involving the same agency and the same awardee. See
Ingersoll-Rand Co., B-225052, Jan. 27, 1987, 87-1 CPD P ;
Ingersoll-Rand Co., B-225346 et al., Mar. 6, 1987, 87-1 CPD P . We said
in these latter cases that because we already had found the issues
raised to be without merit, no useful purpose would be served by our
considering them again. We think the same result should obtain here.
See H.V. Allen Co., Inc., B-226059 et al., Mar. 20, 1987, 87-1 CPD .
The protests are dismissed.
Ronald Berger
Deputy Associate
General Counsel
Matter of: Swintec Corporation
File: B-225657
Date: April 3, 1987
Where evidence of substantial sales of typewriter ribbons to the
government at newly reduced prices (quantity discounts) is provided by a
vendor to the contracting officer prior to bid opening, as permitted by
the solicitation, the contracting officer properly evaluated the
vendor's bid to reflect the price reduction in effect prior to bid
opening.
Swintec Corporation protests the award of an indefinite quantity
single-award Federal Supply Schedule contract for electric/electronic
typewriters to IBM Corporation under invitation for bids (IFB) No.
FCGE-D3-75372-S, issued by the Federal Supply Service, General Services
Administration (GSA). Swintec principally contends that the contracting
officer improperly considered a price reduction (quantity discount) by
IBM for typewriter ribbons that resulted in IBM being evaluated as the
low offeror.
We deny the protest.
The IFB, issued on November 3, 1986, stated that award would be made,
item by item, on the basis of lowest life cycle costs (LCC). LCC is the
anticipated ownership costs of the typewriter, including the cost of
"down-time," repairs, parts, supplies, and the like, evaluated over a 10
year period. While the IFB contained a very complex formula for
determining LCC, we need only note here that the cost of the typewriter
and the cost of the typewriter ribbon were important factors in
evaluating LCC. The IFB, in a footnote to the LCC provisions, stated
that the "normal cost to GSA of the ribbons . . . will be the value used
to compute the LCC." The IFB also provided that for purposes of the LCC
evaluation, ribbon cost is either the lowest priced ribbon on the
Federal Supply Schedule or the bidder's "book price" to the government,
whichever is lower, provided the following conditions are met if the
book price is used:
1. Evidence of substantial sales to the government at the book
price is provided to the contracting officer prior to the
solicitation's closing.
2. The bidder will guarantee the book price to the government
on an "open market purchase basis" for the term of the contract
and will offer the ribbon for award under the Federal Supply
Schedule ribbon contract at the same or lower price.
Bid opening was scheduled for December 3, 1986. According to
Swintec, on November 24, 1986, a Swintec representative called the
contracting officer to obtain information on IBM's ribbon prices. The
contracting officer referred the Swintec representative to a GSA
technical staff member, who, in turn, informed the Swintec
representative that IBM's ribbon price was $2.38 each. While Swintec
apparently received other conflicting price quotations concerning IBM's
ribbon price, the record shows that the oral advice given by the GSA
technical staff member about IBM's ribbon price was correct information
at that time. Swintec proceeded to calculate its own bid based on GSA's
oral advice as to IBM's ribbon price. On November 28, 1986, IBM wrote
to the contracting officer, informing her that IBM had established new
prices for its ribbons as follows:
2-dozen 3-dozen 12-dozen
$2.63 $2.47 $1.17
IBM also stated that it would include these reduced prices in its
Federal Supply Schedule ribbon contract. On December 3, 1986, the day
of bid opening, IBM submitted to the contracting officer purchase
orders, invoices, and credit memoranda to "support and verify" the new
prices previously established in its November 28 letter. Six bids were
received and IBM was evaluated as the low offeror despite its higher
typewriter cost ($335 per typewriter versus $248 for Swintec)
principally because of its ribbon costs which were evaluated by GSA
using the reduced gross quantity price ($1.17 per ribbon). This protest
followed.
Swintec advances several arguments in support of its position that
the contracting officer erred in using $1.17 as the IBM ribbon "book
price" in computing the LCC. First, Swintec claims that IBM was
improperly permitted by GSA to reduce its prices without notice to
Swintec under circumstances which call into question the integrity of
the procurement process. However, we note that the solicitation
permitted any and all bidders to reduce their ribbon prices prior to bid
opening provided the bidders presented evidence of substantial sales at
the reduced book prices. Here, IBM guaranteed the reduced book price
for the life of the contract and will include the new book price in its
FSS ribbon contract. 1/ While Swintec was not notified about the reduced
IBM ribbon price and relied on the prior oral advice about IBM's ribbon
price from GSA's technical staff, we know of no requirement for an
agency to inform or otherwise update a bidder as to another competitor's
reduction in price prior to bid opening. If Swintec did not offer its
best price because of its assumption that IBM's prices would not change,
it did so at its own risk.
Second, Swintec argues that IBM did not have "substantial sales" at
the reduced price as required by the solicitation because the price of
$1.17 is applicable only to ribbon sales in lots of one gross or more
and Swintec's own experience as the incumbent for the present
requirement is that only 7.1 percent of sales are made in such lots
(Swintec, as the incumbent, did not offer a quantity discount for
ribbons).
The record shows that, between November 24, when it established the
new book price, and December 3, the day of bid opening, IBM sold 489
dozen ribbons at the new prices, 475 dozen of the amount at the $1.17
price. IBM states that 475 dozen constitutes 13 percent of IBM's total
1986 sales of this ribbon to the government. IBM also applied the new
prices retroactively to sales to the government in October and November
1986; GSA, however, did not rely on this retroactive adjustment in its
determination that substantial sales had in fact occurred. While we
think that sales of 475 dozen were reasonably determined by GSA to be
substantial, Swintec argues that IBM's sales at the new price did not
represent their normal, regular, customary price for the item during a
representative period. Swintec argues that IBM during October and
November 1986, prior to the price change, sold only a small percentage
of its ribbons in quantities of one gross or more and therefore gross
lots do not represent normal sales." IBM has supplied the following
sales information for the period:
No. of Ribbons Ribbons at
Month at Gross Price Gross Price
Sept. 2,988 59%
Oct. 1,438 56.4%
Nov. 1-23 1,428 50.3%
Nov. 24-Dec. 3 5,700 97%
We think that the solicitation provision referring to "normal cost"
to GSA, when read in conjunction with the substantial sales requirement,
simply means any price of a vendor for a certain quantity of an item at
which substantial sales had occurred and from which the government would
derive substantial benefit if the item were purchased typically at that
quantity. 2/ IBM met this requirement. Even prior to the price
reduction, most ribbons were purchased by the government from IBM at the
gross price. Moreover, the fact that previously only 10-13 percent of
individual transactions were on a gross lot basis does not mean either
that the majority of the ribbons purchased in the past were not
purchased at the lower quantity discount price or that federal agencies
will not take advantage of IBM's substantially reduced gross price in
the future. This is apparent from the 84 percent gross lot transaction
sales to numerous federal agencies that occurred upon IBM's
establishment of its substantially reduced gross lot price. We
therefore think that GSA reasonably evaluated the IBM bid on the basis
of its reduced gross lot price.
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ Swintec also argues that IBM's reduced price is not a "book
price." This is a matter of semantics since IBM is offering the item to
the government at this price and, as we find below, has had substantial
sales at the reduced price.
2/ GSA reports that it typically uses the gross price for LCC
analysis because this is the quantity for the majority of ribbons
purchased if there is a quantity discount. Swintec never offered a
quantity discount and therefore its own sales experience is not
necessarily typical.
Matter of: M-1, Inc.--Reconsideration Request
File: B-225656.2
Date: February 20, 1987
Reconsideration request is dismissed where request merely provides
untimely details missing from original protest, which was dismissed for
absence of detailed protest grounds, and does not challenge dismissal of
original protest on legal or factual grounds.
M-1, Inc., requests reconsideration of our January 28, 1987,
dismissal of its protest challenging a contract award under Department
of the Army request for proposals (RFP) No. DAEA26-86-R-0012 for Ada
language system development. We dismiss the request.
M-1's original protest submission sets forth the single allegation
that "excessive favoritism" was accorded the awardee during "secret
negotiations," and indicated that "the various grounds for this protest
will be spelled out in detail." As no details were forthcoming and the
protest included no documentation setting forth the factual or legal
bases for the favoritism allegation, we dismissed M-1's protest for
failure to set forth a detailed statement of the legal and factual
grounds of protest, including relevant supporting documents, as required
by our Bid Protest Regulations, 4 C.F.R. Sec. 21.1(f) (1986).
M-1's reconsideration request essentially provides details to the
original protest, and asks that we reconsider the protest based on these
details. Our Office will entertain a request for reconsideration of a
prior decision only where the protester presents information challenging
the prior decision as legally erroneous or for failing to take into
account all facts presented. 4 C.F.R. Sec. 21.12(a). As M-1's request
based on new details does not challenge our prior dismissal on legal or
factual grounds, there is no basis for considering the request. See GTC
Group--Reconsideration Request, B-218447.5, July 9, 1986, 86-2 C.P.D. P
46.
Also, since the reconsideration request was not received until
February 13, which the record shows was more than 10 working days after
M-1 knew the basis for the protest, the details presented would be
untimely filed for purposes of considering them as a new protest. 4
C.F.R. Sec. 21.2(a) (2).
M-1's reconsideration request is dismissed.
Robert M. Strong
Deputy Associate
General Counsel
Matter of: Tel-Med Information Systems-- Request by Immigration and
Naturalization Service for Reconsideration
File: B-225655.2
Date: August 4, 1987
1. An agency's request for reconsideration filed more than 1 month
after the decision is issued is dismissed as untimely; agency may not
await technical advice before requesting reconsideration.
2. Recommendation in prior decision that contract be terminated if
feasible is withdrawn where agency has demonstrated that termination is
not feasible because contract has been fully performed and paid for.
By letter filed with our Office on July 8, 1987, the Immigration and
Naturalization Service (INS) requests reconsideration of our decision in
Tel-Med Information Systems, B-225655, June 2, 1987, 66 Comp. Gen. ,
87-1 C.P.D. P , and reports on its actions taken in response to the
recommendations in that decision. The decision sustained, in part, a
protest by Tel-Med Information Systems against the award of a contract
to Apec Technology Ltd. by INS for two automatic multi-line disc
telephone answering systems under invitation for bids (IFB) No.
CO-25-86. We determined, as the protester alleged, that Apec's bid was
nonresponsive because Apec's descriptive literature accompanying its bid
took exception to one of the requirements of the IFB. However, since we
had been advised that the two Apec systems under the contract had been
delivered, but not installed, we recommended that INS terminate Apec's
contract if feasible and if INS terminated Apec's contract, INS should
make award to one of the other bidders, if appropriate, or resolicit its
needs.
We dismiss the request for reconsideration.
In its request for reconsideration, INS argues that Apec's
descriptive literature did not take exception to the IFB's requirements
and therefore Apec's bid was properly accepted as responsive. INS cites
no new facts in this request; it only proffers additional technical
arguments. INS contends that its request for reconsideration was timely
filed on July 8, 1987, because it was filed within 10 working days of
when the contracting officer received comments on our decision by
technical experts in INS's information services branch. We disagree and
conclude that the request for reconsideration is untimely filed.
Our Bid Protest Regulations require that a request for
reconsideration be filed within 10 working days of when the basis for
reconsideration is known or should have been known, whichever is
earlier. 4 C.F.R. Sec. 21.12(b) (1986); Tri-State
Construction--Reconsideration, B-225023.2, Dec. 4, 1986, 86-2 C.P.D. P
645. A contracting agency's request for reconsideration is held to the
same stringent filing standard as the request of any other party.
Indian and Native American Employment and Training Coalition--Request by
Department of Labor for Reconsideration, B-218973.2, Oct. 2, 1985, 85-2
C.P.D. P 371.
We were advised by INS that it received our June 2 decision on
approximately June 5, 1987. The 10-day period for reconsideration
begins to run with the agency's receipt of our decision, and the time
period for filing is not tolled while a party seeks advice or
information from others. TriState Construction--Reconsideration,
B-225023.2, Dec. 4, 1986, 86-2 C.P.D. P 645; Tenavision,
Inc.--Reconsideration, B-207505.2, Aug. 17, 1982, 82-2 C.P.D. P 137.
Therefore, INS's request for reconsideration, filed on July 8, 1987,
over 1 month after our decision was issued, is untimely and will not be
considered. Indian and Native American Employment and Training
Coalition--Request by Department of Labor for Reconsideration,
B-218973.2, supra.
The request for reconsideration is dismissed.
However, INS reports that Apec has already fully "performed the
contract and received payment in full," and that for numerous additional
cogent reasons, termination of Apec's contract is not possible.
Therefore we withdraw our recommendation that INS terminate Apec's
contract.
Comptroller General
of the United States
Matter of: ACRAN, Inc.
File: B-225654
Date: May 14, 1987
1. Although precise design specifications are not improper per se,
their use is generally inappropriate if an agency can state its minimum
needs in terms of performance specifications which alternate designs
could meet. Protest by development contractor that a procurement for
antisubmarine warfare power control systems essentially should have been
restricted to its own design is denied where the intent of the
contracting agency, as reasonably expressed in the solicitation,
properly was to broaden the competition to allow for the submission of
alternative approaches to meet its minimum equipment needs through the
satisfaction of less restrictive performance requirements.
2. A protester's interest as a beneficiary of more restrictive
specifications is not protectible under the General Accounting Office's
bid protest function, which is to ensure that the statutory requirement
for full and open competition has been met.
3. An initial proposal was properly included within the competitive
range where the agency reasonably determined that the proposal was
susceptible of being made acceptable through discussions.
4. Where a solicitation's evaluation and source selection criteria
give greater weight to technical considerations than to cost or price,
the selection of a lower cost/price offeror whose technical proposal has
also been found to be technically superior is not only reasonable but
required.
ACRAN, Inc. protests the award of a contract to Exide Electronics
Corporation under request for proposals (RFP) No. N00421-86-R-0169,
issued by the Department of the Navy. The procurement is for the
acquisition of a quantity of Anti submarine Warfare Operations Center
Power Control Systems. (APCS). ACRAN objects to the award on the
grounds that Exide's offer was technically nonconforming to the express
requirements of the RFP, and that the Navy's selection decision was
inconsistent with the evaluation and source selection scheme set forth
in the solicitation.
We deny the protest.
The RFP was issued on July 10, 1986, contemplating the award of a
firm-fixed-price contract. Technical and price proposals were
requested, and the RFP advised offerors that technical capability to
perform the work would be rated approximately one and one-half times as
important as price as an evaluation factor. (Consistent with this
information the Navy utilized a 60/40 ratio between technical and price
considerations in evaluating the offers.) The major technical criteria,
listed in descending order of importance in the RFP, were: (1)
Construction Approach; (2) Integrated Logistic Support; and (3)
Corporate Factors.
The RFP further provided that although price was not as important as
technical capability, "it is an important factor and should not be
ignored." The importance of price would increase to the extent that
competing proposals were found to be essentially equal technically.
Offerors were advised that award would be made to the firm "whose
proposal offers the greatest value to the Government in terms of
technical and price rather than the proposal offering only the lowest
price."
The RFP's Statement of Work (SOW) provided that the contractor was to
produce APCS units "built in accordance with specification CC-ASWOC-011
(Rev. A) as incorporated into the solicitation and attached drawings."
The SOW further provided that although the incorporated specification
required that certain vendor-specific components be used in the APCS,
"the contractor may, however, propose comparable or better components."
The contractor's use of such alternative components would require
written authority from the contracting officer to deviate from the
specification.
On July 30, the Navy conducted a preproposal conference attended by
representatives from ACRAN and Exide. On the same date, the Navy issued
amendment 0001 to the RFP which set forth the questions and answers
generated during the conference. Of significance to this case, a
question was asked as to whether any requested deviation from the use of
the specified components had to address each particular item or whether
the deviation could be granted for a broader approach. The Navy
responded:
"As long as you meet the requirements of the specification/SOW,
your alternate approach is acceptable. However, any deviation
must comply with SOW 3.4.1 reliability."
Amendment 0002 was issued on August 19, modifying the incorporated
CC-ASWOC-011 (Rev. A) specification in two areas. The closing date for
receipt of initial proposals took place as originally scheduled on
August 28.
The Navy received technical and price proposals from ACRAN and Exide,
and the proposals were then evaluated to determine the competitive
range. ACRAN's technical proposal received an average raw score of 40.9
points out of a possible 60, and the proposal was deemed to be
technically acceptable as submitted. The Navy did, however, have some
concerns as to parts availability and staffing for the work. Exide's
technical proposal received an average raw score of 35.36, reflecting
the Navy's major concerns that the batteries proposed by Exide were
noncompliant with the governing specification in terms of operational
life; that the proposed APCS shelter was not well defined; and that
certain aspects of the proposal relative to the Integrated Logistic
Support technical criterion, such as spares and reliability, were not
adequately addressed. The Navy determined that Exide's initial proposal
was technically unacceptable as submitted, but susceptible to being made
acceptable.
The Navy then "normalized" the raw technical scores by assigning 60
points to ACRAN's proposal (the full weighted value for the technical
factors) since its raw score was the higher, and 51.9 points to Exide's
proposal, representing the percentage difference by which Exide's raw
technical score was lower than ACRAN's.
The Navy also analyzed and scored the price proposals submitted by
the firms. Exide's price of $3,010,173 was low; ACRAN's price was
$3,790,152. The Navy determined that both proposals were "consistent
with the technical proposals." Some concern was voiced as to the
disparity between the prices, the Navy's price analyst noting that it
would be desirable to obtain a spare parts list from Exide to confirm
the firm's proposed pricing for spares, but, overall, the analyst
concluded that, " F or like services and material, Exide has given us
the fairest price." Because Exide's price was lower than ACRAN's the
firm's price proposal received a "normalized" price score of 40, the
full number of weighted points available for price.
ACRAN's price proposal received a "normalized" score of 29.7,
reflecting the percentage difference by which its price was higher than
Exide's.
The Navy conducted written and oral discussions with the firms
informing them that their proposals were within the competitive range,
and issued a further amendment concerning the schedule of supplies and
the delivery schedule. These discussions served to advise the firms of
the various areas of deficiency perceived to exist in their proposals
and sought responses to those concerns through the submission of best
and final offers (BAFOs).
Upon evaluation of the BAFOs, the Navy determined that Exide's
technical proposal should be significantly upgraded because the firm had
appropriately addressed all the Navy's major concerns regarding the
batteries proposed, APCS shelter, and spares and reliability
considerations in its BAFO submission. Accordingly, the firm's raw
technical score increased from 35.36 to 45.74. ACRAN's raw score
increased only slightly from 40.90 to 41.64. This increase in Exide's
raw score caused a concomitant readjustment in the "normalized"
technical scores. Since Exide's raw score was now higher than ACRAN's,
the firm's proposal received the full 60 weighted points for technical
factors whereas ACRAN's proposal received 54.66 "normalized" technical
points, reflecting the percentage differential between the firms' new
raw scores.
In terms of final proposed price, ACRAN's price remained unchanged at
$3,790,152, while Exide increased its price slightly from $3,010,173 to
$3,014,723. Therefore, although Exide still received the full 40
"normalized" points for its lower-priced proposal, ACRAN's "normalized"
scored increased from 29.7 to 29.8 as a result.
Accordingly, Exide's proposal had a total "normalized" score of
100.00, in contrast to ACRAN's score of 84.46. The Navy viewed this
scoring as accurately reflecting Exide's technical superiority, and,
therefore, since Exide's price was lower as well, the agency selected
Exide for the award as the firm whose proposal, consistent with the
RFP's established evaluation and source selection scheme, offered the
"greatest value" to the government. ACRAN's protest to this Office
follows an earlier agency-level protest against the award and its
debriefing as the unsuccessful offeror.
ACRAN, through an apparent teaming arrangement with another firm, was
the original development contractor of prototype APCS units under a
previous sole-source Navy contract, and furnished eight operational
units to the Navy under a subsequent sole-source contract. That
contract required the firm to furnish its technical drawings to the
government to be used in the next procurement for the APCS, which was to
be conducted on a competitive basis, and which is the procurement at
issue here.
ACRAN's first major ground of protest is the assertion that the APCS
unit offered by Exide is technically unacceptable because it represents
an alternative design approach which does not conform to the product
drawings developed by ACRAN forming an attachment to the subject RFP.
In this regard, ACRAN references the SOW which, as indicated earlier,
provided that the contractor was to produce APCS units in accordance
with specification CC-ASWOC-011 (Rev. A) and the attached drawings.
ACRAN contends that Exide's offered unit is materially noncompliant by
using many components which differ from those expressly called for in
the RFP.
Although the firm recognizes that the SOW allowed the substitution of
"comparable or better" components by the contractor upon the contracting
officer's approval, ACRAN urges that the SOW's reference to the
"contractor," rather than to the "bidder" or "offeror," means that the
allowed substitution of components can only occur during performance of
the contract, and not upon the mere submission of proposals.
Essentially, ACRAN contends that because no authorization could be given
to Exide at the preaward stage to deviate from the component
requirements, the Navy could not properly accept its nonconforming
offer.
ACRAN's second major ground of protest is the assertion that the
Navy's award decision was improper because it was inconsistent with the
evaluation and source selection scheme set forth in the RFP. ACRAN
contends that the Navy, in evaluating and scoring the proposals, failed
to consider such factors as the higher reliability and delivery risks
associated with Exide's offer, given that Exide is a new source for the
APCS and its offered unit is a substantial redesign; the
incompatibility of Exide's unit with the existing ACRAN-developed units;
and Exide's lesser spare parts inventory. Accordingly, ACRAN urges
that its offer in fact represented the "greatest value" under the
solicitation's express award criteria because its higher proposed price
was outweighed significantly by the fact that ACRAN was the developer of
the APCS, and is the only firm to have successfully produced and
supplied operational APCS units to the government.
At the outset, we question the timeliness of ACRAN's assertion that
the Navy improperly accepted Exide's technically nonconforming offer of
an alternative approach for meeting the APCS requirement. As noted
earlier, the Navy had responded to a question asked at the preproposal
conference concerning the allowable extent of deviations from the
specified components by responding that an alternate approach would be
acceptable if it conformed to the specification and met the reliability
requirements called for in the SOW. It is obvious that the question in
issue was asked by Exide, the only prospective offeror besides ACRAN at
the conference. Therefore, ACRAN should have known at that point, and
certainly no later than the issuance of amendment 0001 which
incorporated the question and the agency's response, that Exide
contemplated the offer of an alternate APCS approach and that the agency
was prepared to accept it, all factors considered. If ACRAN believed
that the acceptance of an alternative approach would be fundamentally
inconsistent with the SOW's provision that all APCS units were to be
built in accordance with specification CC-ASWOC-011 (Rev. A) and the
attached drawings, the firm was obligated to protest the matter as
creating a material ambiguity in the RFP's requirements no later than
the August 28 closing date for receipt of initial proposals. See 4
C.F.R. Sec. 21.2(a) (1) (1986); Weinschel Engineering Co., Inc., 64
Comp. Gen. 524 (1985), 85-1 CPD P 574.
In any event, timeliness considerations aside, we find no merit in
ACRAN's position that the RFP precluded the submission of alternative
technical approaches. It is undisputed that ACRAN's proposed APCS unit
conformed exactly to what was called for in the attached drawings, and
was apparently identical to the operational units that had been
furnished earlier. It is also undisputed that Exide's proposed APCS,
which the firm had yet to build, was essentially a redesign differing
substantially in specification from the ACRAN-developed unit represented
in the RFP drawings. However, it is clear from the record that Exide's
submission of an alternate approach was permissible since the
solicitation reasonably reflected the agency's original intent to
broaden the field of competition for this procurement.
Prior to the issuance of the RFP, the contracting officer prepared a
memorandum concerning the need to use a "best buy" or "greatest value"
analysis in selecting the successful offeror for award. Among other
considerations, the contracting officer noted that the technical
drawings, which comprised an integral part of the solicitation, although
necessary for competitive purposes, nevertheless reflected ACRAN's own
particular technical approach. Therefore, the contracting officer
concluded that:
"In order to prevent an unfair competitive advantage on the
part of the development contractor ACRAN for this production
contract, it is necessary to allow competitors to propose
different technical approaches, i.e., specification deviations....
W e must evaluate the individual contractor proposed technical
deviations and alternate approaches."
A reasonable reading of the RFP itself demonstrates that the Navy's
intent to allow different approaches was in fact expressed in the
solicitation. For example, under section M, "EVALUATION FACTORS FOR
AWARD," the most important technical criterion--Construction
Approach--was set forth a constituting in part the following
subelements:
"a. Construction and integration approach appropriate to meet
performance requirements.
c. Use of standard equipment or suitability of proposed
substitute equipment. Technical approach to integrate any
proposed alternate equipment." (Emphasis supplied.)
Hence, despite ACRAN's attempt to rely on the SOW's provision that
the APCS units were to be built in accordance with specification
CC-ASWOC-011 (Rev. A) and the drawings in support of its position that
alternate approaches were not acceptable, we believe the record as a
whole supports a contrary conclusion.
In our view, the Navy properly drafted a solicitation which would be
governed by performance, rather than by design, requirements. (We note
that the Navy's technical evaluators, in their narrative statements
concerning the proposals, expressly referred to the RFP's "performance
requirements.") It has been our consistent holding that precise design
specifications, although not improper per se, are generally
inappropriate if an agency can state its minimum needs in terms of
performance specifications which alternate designs could meet. Morse
Boulger, Inc., B-224305, Dec. 24, 1986, 66 Comp. Gen. , 86-2 CPD P 715;
Viereck Co., B-209215, Mar. 22, 1983, 83-1 CPD P 287.
In this regard as well, the Competition in Contracting Act of 1984,
10 U.S.C. Sec. 2305(a)(1)(A)(iii) (Supp. III 1985), provides that
agencies should develop specifications in such a manner that will obtain
full and open competition consistent with the nature of the supplies or
services being acquired. Hence, specifications may be stated in terms
of performance requirements that establish the range of acceptable
equipment characteristics. 10 U.S.C. Sec. 2305 (a)(1)(C)(ii).
The record shows that the Navy contemplated that more than one
particular APCS design could meet its minimum performance needs, see,
e.g., A.B. Dick Co., B-207194.2, Nov. 29, 1982, 82-2 CPD P 478, if the
alternative approach was also consistent with critical supportability
and reliability concerns. Therefore, ACRAN's complaint that Exide's
approach should have been rejected as nonconforming is without
foundation and, given that Exide was its only competitor, is tantamount
to an assertion that the competition should have been restricted to the
ACRAN design set forth in the RFP drawings. However, a protester's
interest as a beneficiary of more restrictive specifications is not
protectible under our bid protest function, which is to ensure that the
statutory requirement for full and open competition has been met. APEC
Technology Ltd., 65 Comp. Gen. 230 (1986), 86-1 CPD P 81.
Finally, on this issue, we see no merit in ACRAN's assertion that
Exide's offer could not permissibly propose the use of components
different from those enumerated in the solicitation because the SOW
provision allowing the substitution of "comparable or better" components
only referred to the contractor's ability to do so upon government
approval during contract performance. In our view, given the conclusion
that the solicitation contemplated the satisfaction of performance and
not design requirements, it is unreasonable to view this provision as
requiring an offeror to propose an APCS utilizing only those
vendor-specific components listed in the RFP, while at the same time
allowing the firm, if awarded the contract, to then substitute
components upon approval during performance. Reading the solicitation
as a whole and in a manner giving effect to all its provisions, see,
e.g., Energy Maintenance Corp., B-223328, Aug. 27, 1986, 86-2 CPD P 234,
the only reasonable interpretation to be given the SOW provision in
question is that an offeror such as Exide could propose different
components as long as the firm could demonstrate that the components met
or would meet the "comparable or better" test.
We also reject ACRAN's argument that the selection of Exide was
inconsistent with the RFP's established evaluation and source selection
scheme. We believe that ACRAN simply misunderstands the nature of a
procurement such as this conducted on the basis of competitive
proposals.
ACRAN urges that Exide's initial proposal should have been rejected
once the Navy determined that the proposal was technically unacceptable
as submitted. However, the Federal Acquisition Regulation (FAR), 48
C.F.R. Sec. 15.609(a) (1986), provides that a contracting officer
conducting a negotiated procurement (competitive proposals) shall
determine which initial proposals submitted are within the competitive
range for the purpose of conducting discussions. The competitive range
is to be determined on the basis of cost or price and other factors
stated in the solicitation, and is to include all proposals that have a
reasonable chance of being selected for award. We have consistently
held that proposals having a reasonable chance of award are not only
those initial proposals which are acceptable as submitted, but also
those deficient proposals which are reasonably susceptible of being made
acceptable through discussions. See Space Communications Co.,
B-223326.2 et al., Oct. 2, 1986, 66 Comp. Gen. , 86-2 CPD P 377;
Fairchild Weston Systems, Inc., B-218470, July 11, 1985, 85-2 CPD P 39.
Generally, then, only those proposals which are not capable of being
improved to an acceptable status without substantive major revisions are
not for inclusion in the competitive range. See Price Waterhouse,
B-222562, Aug. 18, 1986, 86-2 CPD P 190; Ameriko Maintenance Co., Inc.,
B-216406, Mar. 1, 1985, 85-1 CPD 255.
Here, the record establishes that the Navy favorably regarded Exide's
proposed alternative APCS approach because it utilized fewer components
than the ACRAN design and appeared to be more "state-of-the-art." See
APEC Technology Ltd., supra, 65 Comp. Gen. 230 at 234, 86-1 CPD P 81 at
6. Nevertheless, the Navy also regarded the proposal as not for
acceptance in its original form because of the deficiencies perceived to
exist in the critical areas noted. Since the FAR, 48 C.F.R. Sec.
15.609(a) specifically provides that when there is doubt as to whether a
proposal is in the competitive range, it should be included, we see
nothing improper in the Navy's determination that Exide's proposal,
although unacceptable as submitted, would have a reasonably chance for
selection if the agency's concerns were addressed through competitive
range discussions.
As a general rule, written or oral discussions are required to be
held with all offerors under a negotiated procurement who submit
proposals in the competitive range. FAR, 48 C.F.R. Sec. 15.610(b). The
fundamental purpose of this requirement is that offerors may be advised
of deficiencies in their proposals and afforded the opportunity to
satisfy the government's requirements through the submission of revised
proposals. FAR, 48 C.F.R. Secs. 15.610(c) (2) and (5); Furuno U.S.A.
Inc., B-221814, Apr. 24, 1986, 86-1 CPD P 400. The Navy satisfied the
requirement for meaningful discussions here by pointing out to ACRAN, as
well as Exide, the various areas of the firms' proposals which required
amplification and by requesting BAFOs on that basis. Technical Services
Corp., B-216408.2, June 5, 1985, 85-1 CPD P 640.
ACRAN urges that it proposal should have been more highly rated
because of the firm's position as the original development contractor of
the APCS, and as the only vendor to furnish successful operational units
to the Navy. However, it is well-settled that this Office will not
substitute its judgment for that of the agency by making an independent
technical evaluation unless the agency's action is shown to be arbitrary
or in violation of procurement statutes or regulations. APEC Technology
Ltd., supra, 65 Comp. Gen. 230 at 234, 86-1 CPD P 81 at 6. The
protester clearly bears the burden to show that the agency's technical
evaluation was unreasonable. Id. Hence, we will not determine for
ourselves what numerical scores should have been assigned to the various
proposals during the evaluation process, Blurton, Banks & Assocs., Inc.,
B-206429, Sept. 20, 1982, 82-2 CPD P 238, and our review is necessarily
limited to ascertaining whether the evaluation and source selection
process was both rational and consistent with the criteria set forth in
the solicitation. System Development Corp., B-219400, Sept. 30, 1985,
85-2 CPD P 356.
ACRAN clearly has not met its burden here to show that the selection
of Exide was not rationally based or otherwise not in accord with the
RFP criteria. Rather, we view the firm's assertion that the Navy did
not give its proposal due credit during the evaluation as an extension
of its argument that Exide's alternative approach was nonconforming to
the requirements of the solicitation and, consequently, could not have
been rated more favorably than ACRAN's proposal. However, based on our
review of the record, ACRAN has failed to demonstrate that the Navy
misevaluated Exide's proposal by improperly determining that the firm's
responses in its BAFO submission to the agency's concerns rendered its
proposal acceptable and, as reflected in the adjusted technical scoring,
now superior to ACRAN's. The fact that ACRAN objects to the technical
evaluation conducted here, and believes it own proposal better than as
evaluated by the Navy, does not render that evaluation unreasonable.
Experimental Pathology Laboratories, 65 Comp. Gen. 386 (1986), 86-1 CPD
P 235; Honeywell, Inc., B-181170, Aug. 8, 1974, 74-2 CPD P 87.
ACRAN's assertion that the Navy's technical evaluators were not
competent to evaluate the proposals because of their lack of knowledge
of the APCS is self-serving speculation which we will not consider. The
composition of technical evaluation teams is within the contracting
agency's discretion, and, as such, does not give rise to review by this
Office absent a showing of possible bad faith, fraud, or conflict of
interest. See Martin Marietta Data Systems et al., B-216310 et al.,
Aug. 26, 1985, 85-2 CPD P 87.
In sum, the selection of Exide was consistent with the RFP's
"greatest value" basis for award because the firm's technical proposal
was reasonably evaluated as technically superior and was also lower in
price. Where, as here, the evaluation criteria give greater weight to
technical considerations than to cost or price, the selection of a lower
cost/price offeror whose technical proposal has also been found to be
technically superior is not only reasonable but required. Experimental
Pathology Laboratories, supra, 65 Comp. Gen. 386 at 390, 86-1 CPD P 235
at 6.
Accordingly, the protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Newport Offshore, Ltd.--Request for Reconsideration
File: B-225653.2
Date: April 3, 1987
In the absence of an allegation that the awardee took exception in
its bid to any solicitation requirement, prior dismissal of a protest
contending that the awardee's bid was nonresponsive because the firm's
planned method of performance would result in solicitation requirements
not being met is affirmed since how a bidder intends to meet contract
requirements involves bidder responsibility, not responsiveness.
Newport Offshore, Ltd. requests reconsideration of our dismissal of
its protest of the award of a contract to Promet Marine Services Corp.
under invitation for bids (IFB) No. N62789-86-B-0005, issued by the
Navy's Supervisor of Shipbuilding, Conversion and Repair, Groton,
Connecticut. We affirm our dismissal of the protest.
The IFB, which was for the overhaul of the vessel Labrador, contained
requirements for drydocking and undocking the craft. Paragraph 3.3.3 of
the blocking instructions stated that block loading pressures must be
limited to a maximum of "10 long tons per square foot." When the agency
opened bids on October 3, 1986, Promet was the lowest bidder and Newport
was second lowest. By letter dated December 11, after receiving notice
of the award to Promet, Newport protested to the contracting officer
contending that Promet planned to use a drydocking technique that would
result in the maximum tons-per-square-foot requirement not being met.
Newport's position was that this rendered Promet's bid nonresponsive.
The agency informed Newport that its protest on this issue was untimely
since a representative of Newport had discussed Promet's drydocking
technique with the agency by telephone more than 1 month prior to the
agency's receipt of the protest.
Newport then complained to this Office that its protest to the agency
was indeed timely since it was not until Newport received the notice of
award that the firm could be certain that it had a basis for protest.
Prior to that time, says Newport, it knew only that Promet's drydocking
technique was under consideration by the agency. Newport requested this
Office to declare that it was the lowest responsive bidder or,
alternatively, require rebidding of the requirement under specifications
that would allow use of the less expensive drydocking technique that
Promet allegedly planned to use. We dismissed the protest because, as
discussed below, Newport's protest was essentially a challenge of the
contracting officer's affirmative determination of Promet's
responsibility, and none of the circumstances specified in our Bid
Protest Regulations under which we would consider such a protest, 4
C.F.R. Sec. 21.3(f) (5) (1986), had been shown to exist.
In requesting reconsideration, Newport contends that we erred in
characterizing the issue raised by its protest as one involving
responsibility. Newport asks that we address the responsiveness of
Promet's bid.
As the protester correctly notes, to be responsive a bid must comply
in all material respects with the IFB. Federal Acquisition Regulation
(FAR), 48 C.F.R. Sec. 14.301 (a) (1986). A bid that fails to conform to
the essential requirements of the IFB must be rejected. FAR, 48 C. F.R.
Sec. 14.404-2. Responsiveness is determined at the time of bid opening,
however, and solely from material submitted with the bid. Southwest
Mobile Systems Corp., B-223940, Aug. 21, 1986, 86-2 CPD P 213. Here,
Newport does not allege, nor does the record otherwise indicate, that
Promet took exception in its bid to the minimum block loading pressure
requirement. Rather, Newport's complaint concerns how Promet plans to
perform the contract. In this respect, the solicitation did not specify
any particular method of drydocking the vessel, and how a bidder intends
to meet its obligations if awarded a contract under a sealed bid
solicitation involves bidder responsibility, not bid responsiveness.
Jersey Maid Distributors, Inc., B-217307, Mar. 13, 1985, 85-1 CPD P 307.
By awarding the contract to Promet, the contracting officer made an
affirmative determination that Promet is capable of performing the
contract in accordance with the terms specified in the solicitation.
The ARO Corp., B-222486, June 25, 1986, 86-2 CPD P 8. Because such
determinations involve subjective judgments that generally are not
susceptible of reasoned review, this Office does not review affirmative
responsibility determinations unless there has been a showing that the
contracting officer may have acted fraudulently or in bad faith or that
definitive responsibility criteria contained in the solicitation were
not met. 4 C.F.R. Sec. 21.3(f) (5); Aleman Food Service, Inc.,
B-223959, Aug. 28, 1986, 86-2 CPD P 238. Newport has made so such
showing here.
The dismissal of Newport's protest is affirmed.
Harry R. Van Cleve
General Counsel
Matter of: Fairchild Weston Systems, Inc.
File: B-225649
Date: May 6, 1987
1. Use of other than competitive procedures to procure equipment
needed for Congressionally mandated testing of Bradley Fighting Vehicle
based on "unusual and compelling urgency" under 10 U.S.C. Sec. 2304(c)
(2) was justified where there was insufficient time to conduct the
procurement using fully competitive procedures due to reasonable
determination by contracting agency that testing, for which the
equipment being procured was needed, had to be completed within a short
time after the testing requirement was imposed.
2. Contracting agency's failure to solicit proposal from protester in
procurement using other than competitive procedures did not comply with
statutory requirement that offers be solicited from as many sources as
practicable where protester shows that contracting agency's technical
personnel, who provided the list of sources to be solicited at a minimum
should have known of protester's interest, and there is no indication
that the agency could not have considered an additional proposal within
its established schedule for the procurement.
Fairchild Weston Systems, Inc. protests any award under request for
proposals (RFP) No. DABT6O-87-R-0068, issued by the Army for the upgrade
of 170 units of government furnished equipment from the multiple
Integrated Laser Engagement System (MILES). Fairchild contends that the
Army lacked adequate justification for using other than competitive
procedures in conducting the procurement and improperly failed to give
Fairchild an opportunity to compete under the RFP. We sustain the
protest.
The MILES equipment involved in the procurement at issue is for use
during testing of the Bradley Fighting Vehicle, which transports
infantry squads into battle and then supports the squads and
accompanying tanks. During testing under simulated battlefield
conditions, the MILES equipment is used to record the firings and tarqet
hits by weapons which for testing purposes are equipped with lasers
instead of ammunition. In the National Defense Authorization Act for
Fiscal Year 1987, Pub. L. No. 99-661, Sec. 121, 100 Stat. (1986),
Congress directed the Army to submit a plan for testing and evaluating
the Bradley's combat survivability. Responsibility for the testing was
assiqned within the Army to the Training and Doctrine Command Combined
Arms Test Activity (TCATA) at Fort Hood, Texas. According to the Army,
after the Defense Authorization Act was enacted on November 14, 1986,
the Bradley test requirement was first discussed at TCATA on December
11. On December 18, TCATA decided that the existing MILES equipment
would have to be upgraded to generate data regarding an issue considered
critical to evaluatinq the Bradley, its vulnerabiliry to Soviet handheld
antitank weapons. 1/
The Army scheduled the Bradley test for March 20-April 29, 1987,
based on its determination that the test results should be available for
reoorting to Congress before action was taken on fiscal year 1988
defense appropriations. Based on a 65-day lead time for the conttactor,
the contract for the MILES upgrades thus had to he awarded in early
January 1987 to ensure delivery for the Match testing. In view of the
short time in which the procurement had to be completed (approximately 1
month from the time the requirement was known), the Army decided that
its need for the MILES upgrades involved an "unusual and compelling
urgency" justifying the use of other than competitive procedures as
provided in 10 U.S.C. Sec. 2304(c)(2) (Supp. III 1985).
The RFP was issued on January 2 to the three firms identified by the
testing activity, Loral Corporation, Schwartz ElectroOptics, Inc., and
Simulaser Corporation, and called for initial proposals to be submitted
by January 9. On January 7, the Army issued the first amendment to the
RFP, providing that for evaluation purooses an offeror's technical
approach was three times more important than price. Two of the three
firms which had received the RFP, Loral and Schwartz, then submitted
initial proposals by the January 9 due date.
According to the Army, the technical evaluation was begun immediately
and continued the following day, Saturday, January 10. That day, the
Army also issued the second amendment to the RFP, setting out the Army's
requirements that the MILES upgrades be external so that they could be
removed in the field, if necessary, and reuseable in subsequent tests.
Revised proposals in response to the amendment were submitted by Loral
and Schwartz on January 13.
After reviewing the revised proposals, the Army concluded that its
requirement for disconnection of the MILES upgrades in the field had not
been explained adequately; accordingly, on January 14, the Army issued
the third amendment to the RFP, restating the requirement and calling
for the offerors to clarify their proposals on that point the same day.
The Army then requested best and final offers by January 15 at 1 p.m.
After reviewing the best and final offers, the Army asked the
offerors to describe their methodology for disconnecting the MILES
upgrades from approximately 70 pieces of equipment, an area which had
not been discussed in either offeror's best and final offer. The Army
found Loral's explanation acceptable; Schwartz was found technically
unacceptable because its methodology required soldering in the field.
Award then was made to Loral on January 15.
Fairchild first contends that the procurement involved no urgency
sufficient to justify using other than fully competitive procedures.
Fairchild challenges the Army's justification for restricting
competition--the need for the Bradley test results in time for
consideration by Congress before action on the 1988 defense
appropriations act--because there was no Congressionally imposed
deadline for completing the testing. Fairchild also argues that, even
under the Army's timetable, there was sufficient time to publish notice
of the procurement in the Commerce Business Daily (CBD) in order to
increase competition. In particular, Fairchild argues that since the
Army knew or should have known that Fairchild and Loral were the only
two principal sources for MILES equipment, the Army acted unreasonably
by not soliciting Fairchild along with the other three firms.
As discussed above, the Army relied on 10 U.S.C. Sec. 2304(c)(2),
which authorizes the use of other than competitive procedures when
"the agency's need for the property or services is of such an
unusual and compelling urgency that the United States would be
seriously injured unless the agency is permitted to limit the
number of sources from which it solicits bids or proposals."
When restricting competition based on 10 U.S.C. Sec. 2304(c) (2), the
contracting agency also must request offers "from as many potential
sources as is practicable under the circumstances." 10 U.S.C. Sec.
2304(e). In addition, the decision to restrict competition must be
supported by a written justification which, in this case, had to be
approved by the contracting activity's competition advocate. 2/ 10
U.S.C. Secs. 2304(f) (1) (A) and(B)(i).
To support its position that there was insufficient urgency,
Fairchild argues that since Congress did not impose a deadline for the
Bradley test, there was no requirement that the testing be completed
according to the Army's expedited schedule. In our view, the lack of a
Congressional deadline for the testing is not controlling, in light of
the Army's conclusion, which Fairchild does not refute, that the testing
results would be most useful if available to Congress before action on
the 1988 appropriations. In fact, as Fairchild recognizes, the Army's
testing schedule is consistent with a recommendation in a recent report
on the Bradley by our Office that the test results be available to
Congress in time for its deliberations on the Army's 1988 budget request
for the procurement of Bradley vehicles. See "Bradley Vehicle-Army's
Efforts to Make It More Survivable," GAO/NSIAD-87-40 November 4, 1986.
Fairchild further argues that even if it accepts the Army's testing
schedule, there was sufficient time for the Army to publish notice of
the procurement in the CBD. We disagree. The Army's initial report on
the protest was unclear regarding whether the decision to procure the
MILES upgrades was made on December 11 or December 18; in a subsequent
affidavit submitted to our Office, the contracting officer states that,
while the general need for the Bradley testing first arose at TCATA on
December 11, the specific decision to acquire the MILES upgrade to carry
out the testing was not made until December 18. 3/ Measured from either
date, however, the contract award was required to be made approximately
1 month later, in early January, clearly an insufficient period of time
to conduct a procurement using fully competitive procedures. Further,
while the Army could have chosen to publish notice of the procurement in
the CBD, as Fairchild argues, there was no requirement that it do so
where, as here, the procurement was being conducted pursuant to the
exception to full and open competition in 10 U.S.C. Sec. 2304(c) (2).
See 41 U.S.C. Sec. 416(c)(2) (Supp. III 1985).
Even when a contracting agency properly relies on 10 U.S.C. Sec.
2304(c) (2) to use other than competitive procedures, however, it still
must solicit offers from as many potential sources as is practicable
under the circumstances. 10 U.S.C. Sec. 2304(e). Here, the
contracting activity sent the RFP to three firms identified as potential
sources by the testing activity at TCATA. The Army maintains that the
contracting activity was unaware of Fairchild's interest in the
procurement. According to the agency, the contracting activity had
conducted two prior procurements for similar equipment in which only the
three sources solicited, not Fairchild, had participated.
Fairchild states that there are only two principal sources of MILES
equipment, Fairchild and Loral; Schwartz and Simulaser, the other two
firms solicited by the Army in this case, are subcontractors to
Fairchild under a current contract to provide MILES equipment to the
Army (contract no. N61339-86-C0078, awarded to Fairchild on March 6,
1986). Although Fairchild concedes that that contract was awarded by a
contracting activity other than TCATA, Fairchild contends that TCATA
personnel have been involved directly in the design and testing phases
of the contract, and thus were aware that Fairchild was a potential
offeror under the RFP at issue here.
In support of its position, Fairchild submitted records showing
attendance by TCATA technical and engineering personnel at design review
meetings under Fairchild's current contract. In addition, Fairchild
states, and the Army does not dispute, that the design and operational
tests under the contract are scheduled to be held later this year at
Fort Hood.
In response to Fairchild's contention, the Army states that the
equipment to be provided under Fairchild's current MILES contract is not
for use by TCATA. The Army does not directly respond to Fairchild's
assertion that TCATA technical personnel have participated in design
review activities under Fairchild's contract, however; rather, the Army
asserts only that TCATA contracting officials were unaware of
Fairchild's potential interest in the procurement.
We find that Fairchild has shown that TCATA technical personnel were
or should have been familiar with Fairchild's current MILES contract
with the Army and thus at a minimum should have known that Fairchild was
a potential source under the RFP at issue. In our view, the failure to
solicit Fairchild is not justified by the Army's contention that the
TCATA contracting activity was unaware of Fairchild's interest, since
the contracting activity relied on technical personnel in the TCATA
testing activity, who should have known of Fairchild, to identify the
potential sources to be solicited under the RFP.
We recognize that under some circumstances, a contracting agency may
be justified in not soliciting all known sources if, for example, time
constraints preclude consideration of a large number of offers. See
Industrial Refrigeration Service Corp., B-220091, Jan. 22, 1986, 86-1
CPD P 67. We see no such basis for the Army's failure to solicit
Fairchild, however, since there was a limited number of potential
sources and there is no indication that the Army would have been unable
to evaluate an additional proposal from Fairchild within its schedule
for making award. Accordingly, we find that by not soliciting a
proposal from Fairchild, the Army failed to comply with the requirement
to solicit as many offerors as practicable when using other than
competitive procedures pursuant to 10 U.S.C. Sec. 2304(c)(2). 10 U.S.C.
Sec. 2304(e); see also Gateway Cable Co., B-223157, et al., Sept. 22,
1986, 65 Comp. Gen. , 86-2 CPD P 333.
In view of our finding that Fairchild was unreasonably excluded from
the procurement, we sustain the protest. We are unable to recommend
that the contract with Loral be terminated for convenience since
delivery under the contract was completed on March 18. 4/ As a result,
we find that Fairchild is entitled to recover the costs of filing and
pursuing the protest, including attorneys' fees. See Bid Protest
Regulations, 4 C.F.R. Sec. 21.6(e) (1986); Hobart Brothers Co.--
Reconsideration, B-222579. 2, Sept. 19, 1986, 86-2 CPD P 323.
The protester should file its claim for costs directly with the
contracting agency. 4 C.F.R. Sec. 21.6(f).
The protest is sustained.
Acting Comptroller General
of the United States
1/ As discussed later in the decision, there is a dispute regarding
whether the specific need for the MILES upgrades called for by the RFP
was first known by the Army on December 11 or December 18.
2/ With regard to the competition advocate's approval, the record
contains a memo of a conversation between the contracting officer and
the competition advocate on the morning of December 30, the day the
justification was approved. According to the contracting officer's
memo, the competition advocate said that he did not concur with the
"compelling urgency" in the justification, but would approve it "as it
is in the best interest of the Government." While we do not agree that
this statement invalidates the competition advocate's subsequent written
approval of the justification, as Fairchild suggests, we believe that it
calls for close scrutiny of the Army's rationale in the justification.
3/ The date of another document relating to the using activity's
review of the solicitation package is also in dispute. Based on the
record as a whole, however, we see no basis to challenge the Army's
position that the date appearing on the document (December 4) is
incorrect and the document actually was prepared on December 31.
4/ The Army decided to allow performance to continue under the
contract notwithstanding the protest based on its determination pursuant
to the Competition in Contracting Act, 31 U.S.C. Secs. 3553(d)
(2)(a)(ii) (Supp. III 1985), that urgent and compelling circumstances
significantly affecting the interests of the United States would not
permit waiting for the decision on the protest.
Matter of: E.H. Pechan & Associates, Inc.-- Reconsideration
File: B-225648.3
Date: April 15, 1987
1. Dismissal of original protest is affirmed where protester failed
to file protest within 10 working days of the date the basis for protest
was known, and the protester has not shown that the dismissal was based
on errors of law or information not previously considered.
2. Protest allegations raised against award to firm are dismissed
since protester is not interested party to raise issues where it would
not be in line for award if these protest allegations were resolved in
protester's favor.
E.H. Pechan & Associates, Inc. requests reconsideration of our
February 17, 1987, dismissal of its protest against the award of a
contract to Decision Analysis Corporation (DAC) under request for
proposals (RFP) No. DE-RP01-86EI19801, issued by the Department of
Energy (DOE). We affirm the dismissal.
In its initial protest of January 13, as supplemented on January 27,
Pechan alleged various procurement irregularities, including the
improper evaluation of its proposal, which led to its elimination from
the competition and the resultant improper award to DAC. By decision of
February 17, however, we dismissed the protest finding that Pechan's
protest was untimely since it was filed months after an oral debriefing
was held on August 27, 1986. We noted that our Bid Protest Regulations
require the protester to file its protest within 10 days after the basis
of protest is known or should have been known. 4 C.F.R. Sec. 21.2(a)
(2) (1986).
In its request for reconsideration, Pechan contends that its initial
protest was timely fiied because the firm was "unable to determine the
reasons for its elimination" from the debriefing; thus, from a
practical standpoint, it did not have "adequate information" to support
a protest until it received notice of award to DAC on January 13, 1987.
Pechan also argues that had it protested within 10 days after the
debriefing, its protest may have been dismissed for lack of specificity.
Pechan challenges our dismissal on other grounds, arguing that (1) it
first became aware on January 13 that DOE had "respecified" the RFP by
changing the contract base term from 1 to 2 years; (2) that its protest
against DOE's determination that DAC is a responsible firm should not
have been dismissed prior to the development of a complete record
because this aliegedly would have allowed Pechan to show that the
responsibility determination was made in bad faith and contrary to
definitive responsibility criteria set forth in the RFP; (3) that we
did not consider its allegation that at the time DAC submitted its offer
the firm's corporate charter had expired; and (4) that we did not
address the alleged misrepresentation by DAC regarding one of its
proposed key personnel.
Contrary to Pechan's argument that "it did not have adequate
information to properly allege its complaint" until it received the
notice of award, Pechan's January 27 submission, as we stated in our
prior decision, clearly evidenced knowledge--obtained at the
debriefing--of its grounds for protest. The record illustrates, for
example, that as to Pechan's allegation that its proposal was improperly
evaluated, the firm knew why its proposal had been rejected. In its
January 27 submission, Pechan stated that:
"At the debriefing, we were told of several claimed technical
weaknesses in our proposal that had never been identified in the
best and final questions. In fact, approximately 30 percent of
the time spent at the debriefing by the Chairman of the TEC
technical evaluation committee was in discussing these new
issues...."
The protester also stated in its January 27 letter that:
"Other weaknesses were identified during the debriefing
concerned points that were not even mentioned in the RFP as being
relevant to the procurement at hand. For example, we were
criticized for our lack of recent managerial experience relative
to certain professional staff we proposed, though the RFP
contained no requirement that the requisite experience be recent."
(Emphasis in the original.)
We are therefore not persuaded that, at the conclusion of the
debriefing, Pechan had "inadequate information" upon which to base its
protest that DOE's technical evaluation of its proposal was allegedly
improper, particularly since Pechan has not alleged that it obtained
additional information between the debriefing and its protest.
Pechan also argues that January 13 was the first time it learned that
DOE had "respecified" the RFP by changing the base contract period from
1 to 2 years; therefore, its January 27 protest of this issue was
timely. We note, however, that the protester's present position seems
to be contradicted by the January 27 submission wherein Pechan proffered
the additional information contained therein as newly discovered
information received on January 21. Nevertheless, we will not consider
this protest ground because it does not provide a basis for us to object
to the agency's rejection of Pechan's proposal or the award to DAC.
Pechan states that after the firm's proposal was eliminated from
competition by letter dated August 12, 1986, DOE conducted another round
of best and final offers during which the agency allegedly changed the
base period of performance. Assuming this to be true, Pechan has not
demonstrated how it was prejudiced by such a change since, according to
Pechan's version of the debriefing, the firm was eliminated because of
several technical weaknesses in its proposal. We have held that an
agency need not inform an offeror no longer in the competitive range of
a solicitation amendment where the subject matter of the amendment is
not directly related to the reasons the agency had for excluding the
offeror from the competitive range. See The Maxima Corp., B-222313.6,
Jan. 2 1987, 87-1 C.P.D. P .
Pechan argues that we improperly dismissed its protest against DOE's
affirmative determination that DAC is a responsible offeror and its
allegation of a "possible" misrepresentation by DAC as to one of its
proposed key employees. Pechan further contends that we should have
considered the issue of DAC's corporate status which was raised in its
January 27 submission. In that submission the protester alleged that at
all times relevant to this procurement, DAC's corporate charter had
expired; thus, DOE's award was made to an apparent legal "non-entity."
We need not reach the merits of these issues, however, since it is clear
that Pechan is not an interested party under our regulations. Pechan
was determined outside of the competitive range and Pechan's challenge
to this determination was untimely raised. Thus even if these issues
were resolved in Pechan's favor, the firm is not in line for award of
this contract. See 4 C.F.R. Sec. 21.0(a); Discount Machinery &
Equipment, Inc., B-223462, Sept. 11, 1986, 86-2 C.P.D. P 286 at 3.
Since Pechan has not shown that the prior decision was based on an
error of law or information not previously considered, the prior
decision is hereby affirmed. See IFR Systems, Inc.--Request for
Reconsideration, B-222533.2, Nov. 24, 1986, 86-2 C.P.D. P 601.
Harry R. Van Cleve
General Counsel
Matter of: E. H. Pechan & Associates, Inc.
File: B-225648
Date: February 17, 1987
1. Protest, based on information provided to protester at debriefing,
filed with General Accounting Office more than 10 working days after
debriefing is untimely.
2. In negotiated procurements there is no requirement that award be
made on the basis of the lowest cost.
3. Protest against solicitation requirements, apparent prior to the
submission of initial proposals, is untimely when it is not filed until
after award has been made.
4. Allegation that agency improperly disclosed proposed prices to
awardee is without merit where protester provides no probative evidence
and the record indicates that allegation is based on "rumors."
E. H. Pechan & Associates, Inc. (Pechan), protests the award of a
contract to Decision Analysis Corporation (DAC) under request for
proposals (RFP) No. DE-RP01-86EI19801, issued by the Department of
Energy (DOE). The solicitation, a total small business set-aside,
sought proposals for modeling and forecasting support services to the
Energy Information Administration.
We dismiss the protest without requiring the submission of an agency
report, pursuant to our Bid Protest Regulations, 4 C.F.R. Sec. 21.3(f)
(1986), because on its face the protest is untimely.
On August 12, 1986, DOE notified Pechan that its offer had been
rejected as technically unacceptable. At Pechan's request, DOE
conducted an oral debriefing on August 27 concerning the areas in its
proposal which were found to be weak or deficient. Representatives from
DOE's technical and contracts staff were present at the debriefing
during which a number of weaknesses in the firm's technical
submission were identified." According to the protester, subsequent oral
conversations with the contracting officer revealed that "some of the
weaknesses identified during the debriefing were not significant" in the
agency's decision to eliminate the firm from further consideration.
Pechan states that, on October 24, it wrote the contracting officer
requesting that she specifically identify "those weaknesses which were
significant to DOE's decision" regarding the firm's proposal. Pechan
alleges that it has not received any response to its October 24 request
despite "follow-up" phone calls to the contracting officer. By letter
dated January 9, 1987, Pechan was notified of the award to DAC.
In its protest filed with our Office on January 13 Pechan identifies
its bases for protest as:
"(1) DOE has not responded to our written request for specific
information on why we were eliminated from competition.
"(2) DOE awarded the contract to another firm at a cost
substantially higher than ours."
On January 27 Pechan expanded its bases of protest beyond that
articulated in its initial protest alleging that the additional grounds
for protest were based on "new" information it received on January 21.
The protester specifically identifies areas which, in its view, led to
the firm's elimination and resulted in an improper award to DAC. Pechan
contends that:
"(a) There exists serious doubt as to whether DAC is a
responsible Contractor within the intent of the FAR Federal
Acquisition Regulation .
"(b) DOE did not comply with the spirit, if not the legal
requirements, of the FAR with respect to the use of the small
business set-aside provisions.
"(c) DOE failed to negotiate in good faith by failing to inform
Pechan of the technical weaknesses in its proposal during the
evaluation and negotiation phase.
"(d) DOE introduced additional evaluation criteria (e.g., lack
of recent management experience) not expressed in the RFP.
"(e) DOE used a sample problem that clearly favored an
incumbent contractor.
"(f) DOE again followed the concept that costs can be safely
ignored.
"(g) There apparently were leaks of confidential data by DOE
insiders to favored contractors."
Pechan's allegation that DAC is a nonresponsible offeror is based on
its belief that DAC is "totally incapable of handling an $8.5 million
dollar contract and that it is irresponsible of DOE to award such a
large contract to a "neophyte firm." Before awarding the contract, the
contracting officer necessarily determined that DAC was responsible.
See 48 C.F.R. Sec. 9.103 (1985). We do not review protests concerning
affirmative determinations of responsibility absent a showing that the
contracting agency personnel acted fraudulently or in bad faith or that
definitive responsibility criteria contained in the solicitation were
not met. 4 C.F.R. Sec. 21.3(f) (5) (1986); Adamson Containers, Ltd.,
B-219791.2, Aug. 4, 1986, 86-2 C.P.D. P 140. at 3. Neither is alleged
here.
As to the allegations asserted in paragraphs (b)-(e), the record
indicates that these protest grounds are based entirely on information
which Pechan obtained at the debriefing and not from information
allegedly received on January 21. Thus, Pechan was aware of these bases
of protest on August 27, the date of its debriefing. However, the first
time Pechan raised these issues was on January 27 in its supplement of
its protest to our Office.
Our Bid Protest Regulations provide that a protest, the basis of
which is not apparent on the face of the solicitation, must be filed
within 10 working days after the protester knew or should have known the
basis of protest, whichever is earlier. 4 C.F.R. Sec. 21.2(a) (2).
Here, Pechan clearly knew its basis of protest regarding the evaluation
of its proposal from the debriefing on August 27 but did not protest
these issues until January 27. For example, Pechan admits in its
January 27 letter that during the debriefing:
"(1) several new "weaknesses" regarding our technical proposal
were raised that had not been mentioned in the best and final
questions, (2) the evaluation criteria discussed in the debriefing
had apparently been modified and elaborated upon in comparison to
the criteria mentioned in the Request for proposal (RFP) in a way
which appeared to adversely affect the scoring for our firm, and
(3) some of the management and administrative "weaknesses"
ascribed by DOE to our firm were clearly and demonstrably untrue."
Thus, Pechan's protest concerning DOE's technical evaluation of its
offer is untimely.
In its initial protest of January 13, Pechan alleged that the award
was improper because the contract price was "substantially higher" than
Pechan's. The protester, however, submitted no evidence in its initial
protest, tending to show how award to a higher priced offeror was
improper. There is no requirement in a negotiated procurement that
award be made on the basis of lowest cost or price to the government
unless the solicitation so provides. See Joseph L. De Clerk and
Associates, Inc., B-221723, Feb. 10, 1986, 86-1 C.P.D. P 146. Here,
Pechan states that under the terms of the RFP, technical considerations
were more important than cost. Therefore, Pechan's contention that the
award to DAC at a higher cost was somehow improper is dismissed.
We consider Pechan's protest argument of January 27 concerning the
relative importance of cost in this solicitation to be a new ground of
protest. Since the solicitation clearly stated the evaluation factors
and their relative weights, Pechan's protest that the evaluation of
proposals was improper because DOE should have placed greater emphasis
on cost constitutes an allegation of a solicitation impropriety that was
apparent before the closing date for receipt of initial proposals. Our
Regulations require that a protest based upon alleged improprieties in a
solicitation must be filed prior to the closing date for receipt of
initial proposals. 4 C.F.R. Sec. 21.2(a) (1). Since Pechan's protest
of the evaluation scheme was raised after the closing date, it is
untimely. See Travenol Laboratories, Inc., B-220823, Oct. 23, 1985,
85-2 C.P.D. P 453.
Finally, Pechan alleges that there are "rumors" that agency personnel
improperly divulged proposal prices to DAC. Pechan asserts, therefore,
that as a result of this alleged improper disclosure, "it appears
likely" that DAC significantly reduced its costs between its first and
second best and final offers. However, the protester has presented no
probative evidence that DOE disclosed prices to DAC; thus, its argument
in this regard is merely speculative. Our Office will not attribute
improper action to agency officials from inference or supposition, since
the protester has the burden of proving its case. See Joseph L. De
Clerk and Associates, Inc., B-221723, supra.
Accordingly, the protest is dismissed.
Robert M. Strong
Deputy Associate
General Counsel
Matter of: Christos Painting and Contracting Corporation
File: B-225647
Date: March 30, 1987
1. Agency reasonably may rely upon a solicitation clause providing
that line item prices are subject to verification of addition to correct
bidders' aggregate bids to reflect the proper sum of these line items.
2. Where bid correction would result in displacing one or more lower
bids, correction may not be permitted unless the mistake and intended
bid are apparent from the invitation and the bid itself. It is not
apparent that line item bid of "19(19)" was intended as a bid of zero
instead of a bid of 19, as the agency viewed it.
Christos Painting and Contracting Corporation protests the award of a
contract to Howell Construction, Inc., by the Department of the Army
under invitation for bids (IFB) No. DABT23-86-B-0070. Christos asserts
that the Army improperly refused to allow Christos to correct one of the
line item prices in its bid, which would have made the firm the low
bidder.
We deny the protest.
The IFB was for painting the exteriors of a number of buildings at
Fort Knox, Kentucky. The solicitation's bid schedule contained 680 line
items, each of the first 678 representing a building at Fort Knox that
was to be painted. The IFB specified that the contract would be awarded
to the responsive, responsible bidder having the low total bid. The IFB
further specified that a bidder's overall prices were subject to the
"verification of addition" of the line item prices.
Christos' aggregate bid of $793,350, as entered by the firm for its
bid total, was the low recorded bid, with Howell's bid of $795,000
second low. However, after verification of the addition subsequent to
bid opening, Christos' aggregate bid was recorded as $793,450 and
Howell's as $793,200. Upon learning that it had been displaced as low
bidder, Christos claimed the Army incorrectly evaluated the bid for line
item 419 as $1,900. All of the line item prices in Christos' bid from
number 53 on were in units of 100 so that a bid of 10 represented
$1,000. Christos' bid for line item 419 was written as "19(19)." In
verifying the addition of the line items in Christos' bid, the Army
concluded the 19 in parentheses to be a clarification of the firm's
intended bid of $1,900, which was consistent with Christos' bids for
items 415 to 418. Christos argued that the 19 in parentheses next to
the figure 19 was intended to cancel the figure 19 so that the bid for
line item 419 was zero. The Army, however, found no mistake in line
item 419 that was apparent from the face of Christos' bid--even the
total bid price the firm itself entered in the bid included $1,900 for
item 419--and consequently denied the firm's claim.
Christos charges that since its bid was the low aggregate bid as
originally recorded by the Army at opening, the Army should have allowed
Christos to establish the mistake in bid for line item 419 by evidence
outside of Christos' bid itself. Christos points out that that
prohibition in the Federal Acquisition Regulation (FAR), 48 C.F.R. Sec.
14.406 (1986), against a bidder establishing its mistake and the
intended bid outside the bid itself applies only where the correction
would displace one or more lower bids, not where a bidder already has
the lowest bid and the correction would only make its bid even lower.
There is no legal merit to the protest. It is irrelevant to the
applicability of the cited FAR provision that Christos' aggregate bid
initially was recorded as low, since that recording was based on the
total Christos itself had entered on the bid form which, simply stated,
was wrong. In this regard, we have held that it is proper for an agency
to rely on a clause like the verification of addition clause to make
arithmetic corrections in the bidders' aggregate prices. See A & J
Construction Co., Inc., B-213495, Apr. 18, 1984, 84-1 C.P.D. P 443.
As to the error that Christos alleges that it made in its bid on line
item 419, as indicated above, to permit correction, the existence of the
mistake and the bid actually intended must be ascertainable from the
invitation and bid itself.
See Tektronix, Inc., B-219981, Nov. 27, 1985, 85-2 C.P.D. P 611. We
believe that the Army's interpretation of Christos' bid on this line
item is the only correct one that is apparent from Christos' bid. Our
review of the bid shows that Christos has the figure 19 superimposed
over the figure 5 in line item 419. By writing 19 in parentheses to the
right of the figure 19, Christos was simply attempting, in our opinion,
to remove any doubt that its bid for this line item was $1,900, an
amount the firm itself used in calculating its total bid. Christos'
explanation that the parenthetical instead shows the bid for the item
was zero is untenable.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Conrac Corporation, SCD Division--Request for
Reconsideration
File: 225646.2
Date: August 21, 1987
Prior decision is affirmed on reconsideration where protester has not
shown any error of fact or law which would warrant reversal of the
decision. The protester's disagreement with the conclusion of this
Office with respect to the materiality of exceptions taken by it to
standard solicitation provisions does not provide a basis for reversal.
Conrac Corporation, SCD Division requests reconsideration of our
decision in Conrac Corporation, SCD Division, B-225646, May 11, 1987, 66
Comp. Gen. , 87-1 CPD P 497. In that decision, we denied in part and
dismissed in part Conrac's protest of the award of a contract to Hartman
Systems under request for proposals (RFP) No. N00163-86-R-1109, issued
by the Department of the Navy for color video monitors.
Conrac principally argued that the Navy improperly rejected its offer
for failure to comply with the RFP data rights licensing requirement.
Conrac had taken exception to the clause in its revised best and final
offer (BAFO). We concluded that Conrac's protest constituted an
objection to the RFP data rights clause and, as such, concerned an
impropriety apparent from the RFP. Under our Bid Protest Regulations, 4
C.F.R. Sec. 21.2(a) (1) (1987), Conrac was required to protest this
matter no later than the extended June 26 closing date for receipt of
initial proposals. See Cosmos Engineering, Inc., B-217430, Jan. 18,
1985, 85-1 CPD P 62. Since it did not do so, we concluded its protest
against the data rights provision was untimely. Further, we declined to
invoke our "significant issue" exception to decide on the merits this
untimely argument because we found that Conrac had taken exception to a
number of standard terms and conditions of the RFP and was thus
ineligible for award under the solicitation. We similarly declined to
consider Conrac's argument that the awardee's proposal was technically
deficient because Conrac was ineligible for award in any event.
In its request for reconsideration, Conrac argues that our holding
with regard to the exceptions taken by it to the standard terms and
conditions of the solicitation was in error. Specifically, Conrac
states that, while these terms and conditions were themselves
"material," the exceptions taken by Conrac were minor in nature and
cannot be used to declare Conrac ineligible for award. In light of this
position, Conrac asserts that we are obliged to consider its other
arguments regarding the proprietary data rights licensing clause and the
technical conformity of the awardee's proposal. We affirm our original
decision.
In our original decision we noted that Conrac had taken exception to,
among other things, the solicitation's 90-day stop-work period (Federal
Acquisition Regulation (FAR), 48 C.F.R. Sec. 52.212-13(a) (1986)) and
risk of loss provision which specified that the risk of loss of or
damage to supplies remained with the contractor until either acceptance
by the government or delivery to the government, whichever was later
(FAR, 48 C.F.R. Sec. 52.246-16(b) (2)). We rejected Conrac's argument
that these exceptions were minor in nature and properly the subject for
negotiation and thus upheld the Navy's rejection of Conrac's proposal as
unacceptable. Conrac Corp., SCD Division, B-225646, supra, 87-1 CPD P
497 at 7.
As to the stop-work order provision, Conrac argues that the FAR
provision which contains this clause states in its preamble that " t he
"90 day" period stated in the clause may be reduced to less than 90
days." According to the protester, it was unobjectionable by virtue of
this language for it to reduce the 90-day stop-work period to 30 days.
We disagree. The language in the preamble to FAR, 48 C.F.R. Sec.
52.212-13, vests in the contracting officer, not the offeror, the
decision whether to reduce the 90 day period. Moreover, where an
offeror proposes such a change in its BAFO, it cannot expect that the
matter will thereafter become the subject of negotiations since an
agency is not required to reopen negotiations in order to afford an
offeror an opportunity to furnish requirements called for in the
solicitation or request for BAFO's. Loral Electronics Systems,
B-224540, Feb. 10, 1987, 87-1 CPD P 143. Furthermore, we do not agree
with Conrac's assertion that the change which it made in the stop-work
provision is immaterial since it affects the rights of the government
under the resulting contract; under Conrac's version of the clause, the
contracting officer is limited to issuing an order to stop all, or any
part of the work, for a period of 30 days, rather than 90 days. Also,
the contracting officer is permitted only 30 days in which to decide
whether to cancel the stop-work order or terminate the work covered by
the order. See FAR, 48 C.F.R. Sec. 52.212-13(a). Contrary to Conrac's
position, as indicated in our prior decision, we view Conrac's revision
of the time periods to be a material deviation.
With respect to the risk of loss provision, the solicitation
contained the risk of loss provision appearing at FAR, 48 C.F.R. Sec.
52.246-16, which provides in clause (b) (2) that where a contract's
delivery terms are F.O.B., destination, the risk of loss shall remain
with the contractor until acceptance by the government or delivery of
the goods, whichever shall occur later. By contrast, Conrac proposed in
its revised BAFO that the risk of loss pass to the government at the
time of delivery. According to the protester, this change was merely a
"straight forward clarification of the provisions of the solicitation."
Furthermore Conrac argues that, since the solicitation provided for
delivery F.O.B. destination and provided for inspection and acceptance
at the destination, its version of the clause is entirely consistent
with the wording of the FAR risk of loss provision.
We do not agree. While it is true that Conrac's deviation from the
clause does not alter the government's right to accept or reject the
goods, it does shift the risk of loss to the government for the period
of time after delivery but before acceptance. Moreover, the importance
of this period of time during which the risk of loss is with the
government is increased in this case since the solicitation expressly
provides for inspection and acceptance at the destination. The
imposition of this added liability upon the government is not in our
opinion immaterial and, as noted above, Conrac could not have reasonably
expected this term to be the subject of negotiation after the submission
of revised BAFO's. Loral Electronics Systems, B-224540, supra.
Although Conrac also questions the analysis contained in our prior
decision concerning its proposed warranty provision, we deem it
unnecessary to consider the matter. The above discussion amply
illustrates that, as to the two clauses considered, Conrac's proposal
materially deviated from the standard provisions of the solicitation.
The two provisions are only examples from a more lengthy list of
exceptions contained in Conrac's revised BAFO. Accordingly, we again
conclude that Conrac's proposal was properly rejected by the Navy.
As to the other two issues raised by Conrac, we again decline to
reach a decision on the merits. Regarding the proprietary data rights
licensing issue, since it was untimely raised, our consideration of it
would necessarily require us to invoke the "significant issue" exception
to our Bid Protest Regulation's timeliness requirements 4 C.F.R. Sec.
21.2. As stated in our first decision we decline to invoke the
exception since our decision upon the matter would be at best academic
in light of Conrac's ineligibility for award. As to the allegation that
Hartman's proposal was technically deficient we conclude (again, as we
did in our first decision) that Conrac is not an "interested party" for
purposes of questioning whether Hartman's proposal complied with the
terms of the solicitation. 4 C.F.R. Sec. 21.0, Engine & Generator
Rebuilders, 65 Comp. Gen. 191 (1986) 86-1 CPD P 27.
Our prior decision is affirmed.
Harry R. Van Cleve
General Counsel
Matter of: The ARO Corporation--Request for Reconsideration
File: B-225645.2
Date: June 1, 1987
Defense Logistics Agency (DLA) need not develop detailed
specifications for each of the numerous small purchases it conducts for
other agencies, but need only insure that purchases are based on the
maximum competition practicable which, in most situations, may be
generated by no more than a brief purchase description. Where, however,
DLA specifies a manufacturer's part number that on its face describes a
nonstandard item and which, circumstances show, will preclude firms that
have no way of knowing what it means from competing, DLA should attempt
to secure a further description of the item.
The Defense Logistics Agency (DLA) requests that we reconsider our
decision in The ARO Corporation, B-225645, Apr. 10, 1987, 87-1 C.P.D. P
, in which we sustained ARO's protest that DLA request for quotations
(RFQ) No. DLA700-87-Q-H197 was unduly restrictive of competition.
We affirm the decision.
The RFQ was issued using small purchase procedures to procure
lubricating bucket pumps, and identified StewartWarner Corporation part
No. SM-7181-H4 as the approved part; the RFQ included a "Products
offered" clause that permitted firms to offer alternate products that
were "either identical to or physically, mechanically, electronically
and functionally interchangeable with the named product." ARO protested
that although Stewart-Warner part No. 7181 is a standard commercial
product described in Stewart-Warner's catalog, the added prefix and
suffix indicated that DLA was not requesting the standard bucket pump.
ARO complained that neither Stewart-Warner's catalog nor the RFQ
explained what the modifications were, so that ARO was not able to offer
an alternate part.
In sustaining ARO's protest that the purchase description was
inadequate to permit potential offerors of other than Stewart-Warner
pumps to compete, we rejected DLA's defense that it was procuring the
bucket pumps on behalf of the Navy and the cited part number was the
only information concerning the item that the Navy provided. We
concluded that DLA failed to obtain competition to the maximum extent
practicable, as required for small purchases. We stated that the RFQ
should have included some description of the government's needs or of
the item's physical characteristics, and we did not understand why DLA
could not obtain additional details concerning the bucket pump from the
Navy or Stewart-Warner. There was no reason to believe that additional
information was not readily available to DLA and, indeed, we noted that
DLA did not even argue that was the case. We recommended that DLA
cancel the solicitation, obtain additional information concerning the
essential characteristics to be included in an alternate part, and issue
a new solicitation containing the additional information.
In its request for reconsideration, DLA argues that our Office
improperly concluded that DLA could have obtained the technical
information necessary to develop a competitive specification and procure
the item in a timely manner. Specifically, DLA alleges that the Navy
probably does not have the technical data needed to do so, and argues
that it was unreasonable on our part to suggest that Stewart-Warner
would be willing to reveal its proprietary information in order to
foster competition. DLA further argues that it is impossible, from both
the standpoint of time and money, for the agency to procure the
technical data and develop competitive specifications for each of the
numerous small purchase procurements that DLA conducts for other
agencies.
DLA evidently reads our decision as imposing a more onerous burden on
the agency than we actually stated and meant. Our decision was not
intended to suggest that DLA has to secure technical data and develop
detailed specifications for small purchases like these. Instead, we
specifically stated that it is proper to define an agency's needs
through a purchase description where no applicable specification exists.
We held, simply, that to insure the necessary maximum practicable
competition in a small purchase situation it is incumbent on DLA, when
specifying a manufacturer's part number that on its face describes a
nonstandard item and which circumstances show will, consequently, limit
the competition, to attempt to secure a further description of the item.
The record disclosed no effort by DLA, even after ARO's challenge to
the specification, to learn more about the specified part to explain
what the prefix and suffix in issue meant or, as stated above, any
suggestion by the agency that additional details concerning the part
number could not readily be obtained.
Our decision is affirmed.
Comptroller General
of the United States
Matter of: The ARO Corporation
File: B-225645
Date: April 10, 1987
1. General Accounting Office will review small purchase procurement
to determine if it was conducted in accordance with the principles of
fair and open competition.
2. A purchase description is inadequate and unduly restricts
competition where only one manufacturer's part number is listed without
any further information, since potential offerors of alternate items
cannot determine from the part number alone precisely what
characteristics are deemed essential, and thus cannot compete
effectively.
The ARO Corporation protests that Defense Logistics Agency (DLA)
request for quotations (RFQ) No. DLA700-87-Q-H197 unduly restricts
competition. We sustain the protest.
The RFQ was issued using small purchase procedures to procure
lubricating bucket pumps, and identified Stewart-Warner Corporation Part
No. SM-7181-H4 as the approved part; the RFQ contained no other
description of the part. The RFQ included a "Products Offered" clause
that permitted firms to offer alternate products that were "either
identical to or physically, mechanically, electronically and
functionally interchangeable with the named product." The RFQ advised
that DLA did not possess detailed specifications or drawings of the item
and that offerors of alternate items were required to furnish detailed
information concerning the product being offered for evaluation
purposes.
ARO protests that the purchase description is inadequate to permit
offerors other than Stewart-Warner or its distributors to compete for
this requirement. ARO explains that while Stewart-Warner Part No. 7181
is a standard commercial product described in Stewart-Warner's
catalogue, the added prefix SM and suffix H4 indicate that DLA is not
requesting the standard bucket pump. ARO complains that since neither
Stewart-Warner's catalogue nor the RFQ explain the modifications
represented by the prefix and suffix, potential offerors of alternate
parts cannot submit a quotation. ARO concludes that the solicitation
improperly restricts competition, and requests that we advise DLA to
cancel the RFQ and resolicit for the bucket pump with a more detailed
description of the governments requirements.
DLA preliminarily argues that our review of the present protest
should be limited to determining if agency officials were guilty of
fraud or intentional misconduct because the solicitation was issued
using small purchase procedures and the agency made a reasonable effort
to obtain competition.
The small purchase procedures, for purchases not exceeding $25,000,
were provided for by the Competition in Contracting Act of 1984 (CICA)
to promote efficiency and economy in contracting and to avoid
unnecessary burdens for agencies and contractors. 41 U.S.C. Sec.
253(g)(1) (Supp. III 1985); Topley Realty Co., Inc., B-221459, Apr. 23,
1986, 65 Comp. Gen. , 86-1 C.P.D. P 398. Although under these
procedures agencies technically are exempt from the general CICA
requirement to obtain full and open competition, they are required to
obtain competition to the maximum extent practicable. S.C. Services
Inc., B-221012, Mar. 18, 1986, 86-1 C.P.D. P 266. Accordingly, it is
our view that a procuring agency must make reasonable efforts,
consistent with efficiency and economy, to give a responsible source the
opportunity to compete; the agency cannot unreasonably exclude a vendor
from competing for an award. Gateway Cable Co., B-223157, et al., Sept.
22, 1986, 65 Comp. Gen. , 86-2 C.P.D. P 333. We thus will review a
small purchase not only to determine whether there was intentional
agency misconduct, but also to assure that it was conducted in a manner
consistent with that principle. BWC Technologies, Inc., B-221538, Apr.
15, 1986, 65 Comp. Gen. , 86-1 C.P.D. P 366.
Responding to the merits, DLA concedes that the item description here
is inadequate for a fully competitive procurement. DLA explains,
however, that it is procuring the bucket pump on behalf of the Navy;
the cited part number was the only information concerning the bucket
pump that the Navy provided; and DLA knew nothing about the item. DLA
states that, given these limitations, it did all it could to encourage
competition by including the Products Offered clause in the RFQ,
publicizing the requirement in the Commerce Business Daily, and sending
the RFO to 14 firms. DLA reports that it received 26 offers, including
two offers to provide alternate parts.
We think the RFQ's purchase description was inadequate. It is a
well-established principle that offerors must be given sufficient detail
in a solicitation to be able to compete intelligently and on an equal
basis, University Research Corp., 64 Comp. Gen. 273 (1985), 85-1 C.P.D.
P 210, and that procuring agencies therefore must provide specifications
that are free from ambiguity and accurately describe the agency's
minimum needs. Id. While a procuring agency may use a purchase
description to describe its needs where no applicable specification
exists, to be adequate the purchase description should set forth the
essential physical or functional characteristics that are necessary to
express the government's needs. Federal Acquisition Regulation (FAR),
48 C.F.R. Sec. 10.004(b) (1) (1986). Because the part number used to
descrihe the item here did not include some description of the
government's needs or of the item's physical characteristics, potential
offerors not privy to the meaning of Stewart-Warner's part number were
effectively excluded from the competition.
Further, we do not consider DLA's inclusion of a Products Offered
clause and other efforts to obtain competition an acceptable substitute
for an adequate item description. Permitting offerors to propose
alternate products does nothing to promote open competition where the
item description is not detailed enough to reveal the necessary product
features that must be incorporated in any alternate product. We have
specifically held that a brand name or equal solicitation--similar to a
solicitation containing a Products Offered clause--improperly restricts
competition where it does not include a list of the brand name item's
salient characteristics since offerors are left to guess at the
essential qualities of an "or equal" product. See Ciba Corning
Diagnostics Corp., B-223131, Aug. 13, 1986, 86-2 C.P.D. P 185.
As to DLA's claimed lack of information, procuring agencies generally
are responsible for obtaining the data needed to conduct a competitive
procurement, FAR, 48 C.F.R. Sec. 10.002(2), and given the need for an
adequate item description, this responsibility reasonably must extend to
obtaining such an adequate description. While DLA knew nothing about
the item and was given inadequate information by the Navy, we fail to
understand why DLA could not have contacted the Navy to obtain
additional details concerning the pump. If the data was unavailable
from the Navy, then DLA or the Navy could have contacted Stewart-Warner
for the additional information. There is no reason to believe that
additional information was not readily available to DLA and, in fact,
DLA does not argue that this was the case.
Finally, we do not think the receipt of only two bids of alternate
parts evidences any meaningful competition by potential alternate part
offerors; an adequate item description may have led to receipt of a
comparable number of alternate part bids, including the protester's.
We conclude that DLA failed to make a reasonable effort to obtain
competition in this case. By separate letter to the Director of DLA, we
are recommending tnat DLA cancel the solicitation, obtain additional
information concerning the Stewart-Warner bucket pump necessary to
identify the essential characteristics to be included in an alternate
part, and issue a new solicitation containing this information.
The protest is sustained.
Comptroller General
of the United States
Matter of: Boulder Scientific Company
File: B-225644
Date: March 20, 1987
The General Accounting Office wiil not review an agency decision to
issue a project order to a federal agency rather than contract for the
services, where no competitive solicitation was issued for the purpose
of determining the cost of contracting out.
Boulder Scientific Company protests the United States Army Armament,
Munitions and Chemical Command's (Army's) issuance of a project order to
the Tennessee Valley Authority (TVA) for the shipment and purification
of the chemical methyl phosphonic dichloride (MPOD), used in the Army's
binary chemical warfare program. Boulder contends that the Amy should
not have issued the project order to a government agency when a
qualified private contractor submitted a proposal which was competitive
in technical approach, cost and time schedule.
We dismiss the protest.
In May 1986, Boulder received a copy of a competitive solicitation
for the MPOD purification. Boulder did not respond to the solicitation,
which was canceled when the only proposal received was determined
unacceptable. On August 14, 1986, Boulder submitted an unsolicited
proposal for the work, which was under evaluation. The Army issued the
project order to TVA on January 9, 1987.
As a general rule, this Office does not review agency decisions to
perform in-house rather than to contract for services because we regard
such decisions as matters of executive branch policy. Dynalectron
Corp., B-216201, May 10, 1985, 85-1 CPD P 525. Accordingly, we will
review such decisions only where a competitive solicitation has been
issued for the purpose of determining the cost of contracting out and it
is alleged that the resulting comparison with the cost of performing the
work in-house is faulty or misleading. Building Services Unlimited,
Inc., B-222731, Apr. 17, 1986, 86-1 CPD P 380. Since no competitive
solicitation for the shipment and purification of MPOD was issued here
for cost comparison purposes, the Army's decision to issue a project
order to TVA, another federal agency, is not a proper matter for our
consideration.
The protest is dismissed.
Robert M. Strong
Deputy Associate
General Counsel
Matter of: Sunnybrook, Inc.
File: B-225642
Date: April 10, 1987
A protest contending that a solicitation's provisions are ambiguous
because they are not as specific as the incumbent contractor desires is
denied since all provisions to which the protester objects reasonably
describe the work to be performed.
Sunnybrook, Inc. protests certain alleged ambiguities in invitation
for bids (IFB) No. F29651-86-B0097 issued by the Department of the Air
Force for custodial services at Holloman Air Force Base, New Mexico.
We deny the protest.
The solicitation was issued as a small business set-aside on December
16, 1986 to 90 firms. The scope of work required the contractor to
provide all personnel, equipment, tools, materials and supervision
necessary to perform the custodial services required.
The Air Force's report on the protest states that four of the issues
raised have been resolved by discussions with Sunnybrook ands that four
more issues remain to be resolved. As Sunnybrook has not disputed this
point of the report, this decision will deal only with the unresolved
issues.
Before reviewing the four remaining issues, we point out that it is
the contracting officer that has the primary responsibility for
determining its minimum needs and for drafting the specifications to
reflect those needs. East Bay Auto Supply, Inc., B-218437.2, June 24,
1985, 85-1 CPD P 716. Thus, we will not question an agency's
specifications unless there is a clear showing that they have no
reasonabie basis. CMI, Corp., B-216164, May 20, 1985, 85-1 CPD P 572.
The specifications, however, must be sufficiently definite and free from
ambiguity to permit competition on a common basis and an ambiguity
exists if the specification is subject to more than one reasonable
interpretation. Toxicology Testing Service, Inc., B-219131.2, Oct. 28,
1985, 85-2 CPD P 469. With regard to custodiai service contracts, we
have held that the specifications, in conjunction with layout diagrams
and the opportunity for on-site visits, affords prospective bidders an
adequate basis on which to compete intelligently. Triple P. Services,
Inc., B-220437.3, Apr. 3, 1986, 86-1 CPD P 318. Moreover, there is no
requirement that a specification be so detailed as to eliminate all
performance uncertainties and risk. Hero, Inc., 63 Comp. Gen. 117
(1983), 83-2 CPD P 687.
Sunnybrook first contends that the solicitation is ambiguous because
it does not specifically notify prospective bidders that New Mexico is
the only state that imposes a gross receipts tax on firms doing business
on United States military installations within that state. We find no
merit to this issue. The Air Force points out that the Federal
Acquisition Regulation (FAR), 48 C.F.R.Sec. 52.229-3(b) (1985), which
was incorporated by reference into the solicitation, clearly states that
the contract price "includes all applicable Federal, State, and local
taxes and duties." First, there is no ambiguity with respect to this
matter since the FAR provision quoted above is clear, that is, the
contractor will not be reimbursed by the government for any taxes it
might have to pay when they are not included in its contract price. The
burden to determine applicable state and local taxes is properly placed
on bidders because these taxes vary and the bidders generally are more
familiar with their application than are the contracting officers.
Tumpane Services Corp., B-220465, Jan. 28, 1986, 86-1 CPD P 95. There
is, therefore, no basis on which to find that the Air Force's failure to
give specific notice of the New Mexico taxes was unreasonable.
Sunnybrook contends the requirement that the contractor supply
restrooms so that the supplies do not run out is ambiguous because the
contractor cannot be expected to monitor the supplies used in private in
the restrooms. The Air Force argues that there is nothing ambiguous
about this requirement since there are either enough supplies or there
are not. The Air Force states that a properly-stocked toilet-paper
dispenser that runs out before the next scheduled service time would not
give rise to a discrepancy so long as the item is somehow available to
the patron. The Air Force insists that Sunnybrook's interpretation is
unreasonably based on the assumption that the quality assurance
evaluator will be unreasonable and it points out that the contractor
will have the right to appeal to the contracting officer if the
evaluator is unreasonable.
Section C-5 of the soiicitation delineates the specific tasks to be
performed, with Section 5.2.2 being the task for cleaning and supplying
restrooms. Section 5.2.2 states that "The contractor shall perform the
following work for the indicated areas on the Task and Frequency Chart,
Technical Exhibit 2." Among the tasks are the cleaning and disinfecting
of various fixtures, surfaces and floors and "resupply restrooms, so
that after resupplying, the restrooms are stocked so that supplies do
not run out."
The frequency chart under which these tasks are to be performed range
from a frequency of once a month to seven times a week, apparently based
on the size and use of the particular facility involved. Obviously a
contractor cannot guarantee adequacy of restroom supplies if it inspects
a facility only once each month or only a few times a week.
Nonetheless, we think that within the context of the specific supplying
task to be performed and the obligation of that contractor to keep the
restrooms supplied, some rule of reason must be applied. Thus, while
the contractor is not obligated to perform the specific cleaning tasks
delineated more often than specified in the frequency chart, it would
appear to us that an experienced bidder would nevertheless allow for
adequate inspection of the facilities in view of its obligation to keep
the restrooms adequately supplied. If inspection for resupply is
performed in a manner that is commensurate with the requirement, we
think that those rare occasions that an individual stall will run out of
tissue will not be statistically significant. As pointed out above, a
specification need not be so detailed that all performance uncertainties
and risks are eliminated. The problems anticipated by Sunnybrook here
may not arise and if they do they could be resolved reasonably by the
parties under the procedures specified in the contract.
Sunnybrook further contends that the contractor will be required to
clean 24 buildings that have porches and entry pads, the dimensions of
which have not been accurately determined and furnished to the
prospective bidders. Sunnybrook argues that small business owners
should not be expected to measure such areas during site visits. The
Air Force points to the IFB provisions encouraging site visits and
making the bidders responsible for verifying all dimensions. The Air
Force asserts that no bidder has been denied access to the site or the
right to request clarifications.
In Triple P. Services, Inc., B-220437.3, supra, we noted that
custodial services by their nature often require bidders to compute
prices based on visual inspections. The bidders here have been given
scale drawings of the buildings, invited to ask for any needed
clarifications, and encouraged to make site visits. Thus, any bidder
needing more information than is available from the drawings and
clarifications could obtain it by making site visits. In this regard,
Sunnybrook, as the incumbent contractor, has the advantage of obtaining
such information in the course of its performance of the current
contract. Moreover, in our view, a small business firm with the
resources to perform a contract of this magnitude (over 300 buildings)
would not find the measurement of the porches and entry pads to be
onerous if it needed to know the exact dimensions before computing its
prices.
Finally, Sunnybrook objects to a provision requiring the contractor
to vacuum clean all carpeted areas so that they are free of visible
litter, dust and soil. Sunnybrook contends that although it is possible
to remove visible litter and soil with a vacuum cleaner, a speck of dust
can always be found if one gets down on his or her hands and knees to
inspect a carpet. The Air Force contends that Sunnybrook has based its
interpretation on the unreasonable assumption that the quality assurance
evaluator will unfairly interpret the contract requirements and again
the Air Force points out that the contractor can appeal any unreasonable
interpretations to the contracting officer and to even higher authority
if necessary.
Nothing in the specification warrants a conclusion that the
contractor will be required to remove litter, soil and dust to an extent
that it would be invisible to an evaluator on his or her hands and
knees. We have held that it is not practicable to draft specifications
that attempt to provide solutions to every imaginable problem that might
arise, no matter how unlikely or extreme. Newport News Shipbuilding and
Dry Dock Co., B-221888, July 2, 1986, 86-2 CPD P 23. Thus, a bidder has
an obligation to read an IFB as a whole and in a reasonable manner.
Martin Wideker, Engineer B-219872 et al., Nov. 20, 1985, 85-2 CPD P 571.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: CORE International, Inc.
File: B-225640
Date: January 21, 1987
1. An offeror's ability to meet its contractual obligations at the
price offered is a matter of the firm's responsibility for the
contracting agency to determine before award, and General Accounting
Office will not review an affirmative determination in that respect
except in limited circumstances.
2. Whether an awardee's delivered equipment actually conforms to the
contract requirements is a matter of contract administration which is
the responsibility of the contracting agency, not the General Accounting
Office's bid protest function.
CORE International, Inc., protests the award of a contract to Eltech
Research under Department of the Navy solicitation No. N00140-87-R-9025
for peripheral devices and software for microcomputer systems. CORE
states it has been advised that Eltech offered CORE products for two
solicitation line items at prices much lower than the best ones
available from CORE's dealers. The protester suggests that Eltech
therefore will not be able to furnish the items at the contract price,
and that Eltech therefore probably intends to provide other than CORE
products.
We dismiss the protest.
An offeror's ability to meet its contractual obligation at the price
offered is a matter of the firm's responsibility. Peterson &
Associates, B-223472, Sept. 18, 1986, 86-2 C.P.D. P 319. Before
awarding any contract, the procuring agency must determine that the
offeror is a responsible concern.
See Federal Acquisition Regulation, 48 C.F.R. Sec. 9.103(b) (1985).
Our Office does not review a protest of an affirmative determination of
responsiblity absent a showing that it was made fraudulently or that
definitive responsibility criteria set out in the solicitation were not
met. 4 C.F.R. Sec. 21.3(f)(5) (1986). Neither exception applies here.
Moreover, whether the equipment Eltech actually delivers complies
with the obligation that results from the award involves a matter of
contract administration. See Motorola Communications & Electronics,
Inc., B-223715, Sept. 19, 1986, 86-2 C.P.D. P 325. We do not review
such matters, since they are the responsibility of the procuring agency,
not our Office. 4 C.F.R. Sec. 21.3(f)(1).
Robert M. Strong
Deputy Associate
General Counsel
Matter of: VIP Limousine Service, Inc.--Reconsideration
File: B-225639.2
Date: February 26, 1987
Prior decision is affirmed on reconsideration where the protester
fails to establish that the decision erred in holding that the question
of the successful bidder's alleged failure to possess the requisite
state commission operating authority--which was not specifically
required by the solicitation--was not a valid legal basis upon which to
object to the award of a contract to the firm.
VIP Limousine Service, Inc. requests reconsideration of our decision
in VIP Limousine Service, Inc., B-225639, Jan. 29, 1987, 87-1 CPD P , in
which we dismissed VIP's protest against the award of a contract for
patient transportation services to E.M.A.S., Inc. under Veterans
Administration solicitation No. 583-76-87.
VIP had complained that the award was improper because E.M.A.S.
allegedly did not hold the requisite operating authority from the Public
Service Commission of Indiana (PSCI), in contravention of section M of
the solicitation which stated that the successful bidder was to meet all
federal, state, or city licensing requirements for the transportation
services to be provided. We dismissed the protest because it was clear
that the provisions of section M were only general in nature, making no
reference to the particular PSCI operating authority in question or to
any other specific license.
In that regard, the consistent view of this Office has been that,
except where a solicitation imposes a specific licensing
requirement--compliance with which (or at least the ability to comply)
being a prerequisite to award--a contracting officer is not charged with
the consideration of nonfederal licensing requirements in awarding a
contract. In other words, it is only where the contracting officer has
particular, direct knowledge of local licensing requirements, and the
potential negative impact on contract performance if the required
license is not obtained, that the matter of licensing compliance
properly may be considered in determining the bidder's responsibility.
See What-Mac Contractors, Inc., 58 Comp. Gen. 767 (1979), 79-2 CPD P
179.
Hence, because the solicitation at issue here imposed only a general
requirement, and VIP's protest submission gave no indication that the
contracting officer had special familiarity with the PSCI requirements,
we found no legal basis to object to the award already made to E.M.A.S.
VIP now requests reconsideration of our decision on the ground that
the contracting officer was aware of the specific PSCI operating
authority requirements and E.M.A.S.'s failure to hold such authority
prior to the award of the contract, but that she proceeded to make the
award despite such knowledge. Accordingly, VIP urges that the
contracting officer's actions rendered meaningless the provisions of
section M calling for the successful bidder's compliance with federal,
state, and local licensing requirements.
In our view, however, VIP's request for reconsideration fails to
establish that our prior decision contains errors of fact or of law
which would warrant its reversal or modification. 4 C.F.R. Sec.
21.12(a) (1986); see also Dept. of Labor-- Reconsideration, B-214564.2,
Jan. 3, 1985, 85-1 CPD P 13 at 2.
VIP's assertion that the contracting officer was aware of the PSCI
requirements and E.M.A.S.'s failure to meet them does not constitute a
showing that the contracting officer had particular, direct knowledge of
those requirements (which themselves apparently are not yet fully
settled) to the extent that she should have considered the effect of
E.M.A.S.'s ultimate noncompliance on the firm's ability to perform the
contract when making her responsibility determination. See What-Mac
Contractors, Inc., 58 Comp. Gen. 767, supra. As noted in our prior
decision, the contracting officer's award of the contract to E.M.A.S.,
by regulation, was an affirmative determination of the firm's
responsibility as a prospective contractor for this procurement.
Ameriko Maintenance Co., B-216247, Sept. 12, 1984, 84-2 CPD P 287.
To the extent VIP contends that the award to E.M.A.S. renders the
provisions of section M of the solicitation meaningless, we reject the
argument because, as already indicated in our prior decision, PSCI is
free to enforce its requirements against E.M.A.S., and in turn the
firm's contract may be terminated for default by the contracting agency
if such enforcement action precludes successful contract performance.
Cadillac Ambulance Service, Inc., B-220857, Nov. 1, 1985, 85-2 CPD P
509. The provisions of section M are not without effect, but the
question of E.M.A.S.'s possession of the requisite PSCI operating
authority is a matter to be resolve between the firm and that state
commission, and, therefore, is not a basis to deny the firm the contract
award. Central Virginia Ambulance Service, Inc., B-225530, Dec. 5,
1986, 86-2 CPD P 651 at 2.
Our prior decision is affirmed.
Harry R. Van Cleve
General Counsel
Matter of: VIP Limousine Service, Inc.
File: B-225639
Date: January 29, 1987
Where a solicitation does not impose a specific licensing
requirement, the contracting agency properly may make award without
regard to whether the bidder holds the appropriate state or local
operating authority. The state or locality generally is free to impose
its laws against the contractor who then may be faced with a termination
for default if such enforcement prevents it from performing the
contract.
VIP Limousine Service, Inc. protests the award of a contract for
patient transportation services to E.M.A.S., Inc. under solicitation No.
583-76-87, issued by the Veterans Adminisstration (VA). VIP complains
that the award is improper because E.M.A.S. does not possess the
requisite state operating authority in contravention of an express
solicitation requirement.
The solicitation provided at section M that:
"Successful bidder shall meet all requirements of the Federal,
State, or City codes regarding operations of this type of
service."
Our cases recognize a distinction between a general solicitation
requirement that a contractor comply with all applicable state and local
licensing requirements and a more specific solicitation requirement that
the bidder have a particular state or local license. When the
solicitation imposes a specific licensing requirement, compliance with
the requirement or at least the ability to comply by the start of
performance must be shown as a prerequisite to award. When the
solicitation contains only a general requirement, however, contracting
officers are not expected to determine just what those non-federal
requirements may be and therefore are not charged with considering those
requirements in awarding a contract, although, when the contracting
officer is aware of local licensing requirements and has reason to
believe a bidder's failure to obtain a required license may result on
the inability to perform, the matter may be considered in determining
the bidder's responsibility. See What-Mac Contractors, Inc., 58 Comp.
Gen. 767 (1979), 79-2 CPD P 179.
Here, the solicitation provision clearly is a general, rather than a
specific, licensing requirement since there is no reference to the
Public Service Commission of Indiana operating authority, which E.M.A.S.
allegedly does not possess, or to any other specific license. Also,
there is no indication that the contracting officer had special
familiarity with Public Service Commission of Indiana requirements, and
we point out that by awarding E.M.A.S. the contract, the contracting
officer, by regulation, has determined the firm to be responsible with
respect to this procurement. Federal Acquisition Regulation, 48 C.F.R.
Sec. 9. 105-2(a)(1) (1986); Ameriko Maintenance Co., B-216247, Sept.
12, 1984, 84-2 CPD P 287. We do not review such affirmative
determinations of responsibility unless there is a showing of possible
fraud or bad faith. 4 C.F.R. Sec. 21.3(f)(5) (1986). Therefore, there
is no basis presented which would warrant objection to the award.
If as VIP urges, the Public Service Commission of Indiana regulations
require E.M.A.S. to hold an operating authority to provide the services
in question, with concomitant higher levels of vehicle insurance (and
these regulations do not conflict with federal law), the Public Service
Commission is free to enforce the requirement against E.M.A.S. In the
event such enforcement prevents the firm from performing the contract,
the agency may terminate the contract for default. Cadillac Ambulance
Service, Inc., B-220857, Nov. 1, 1985, 85-2 CPD P 509 at 2.
VIP has requested that a bid protest conference be convened in this
matter. See 4 C.F.R. Sec. 21.5. We decline to grant the request since
the protest is without legal merit, and a conference clearly would serve
no useful purpose.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
Matter of: F & T Data Services, Inc.
File: B-225638
Date: May 6, 1987
Procuring officials enjoy a reasonable degree of discretion in
evaluating proposals, and the General Accounting Office will not disturb
an evaluation where the record indicates that the conclusions reached
are supported by the information in the proposals and consistent with
the criteria set forth in the solicitation.
F & T Data Services, Inc., protests the award of a contract to Gulf
Systems, Inc., by the United States Army Corps of Engineers under
request for proposals (RFP) No. DACW29-86R-0116, for automated data
collection services for the Corps' Waterborne Commerce Statistics
Center. F & T, the incumbent, contends that the Corps failed to
evaluate its proposal properly with respect to the criteria for award,
and also challenges the failure to award to a woman-owned business.
We deny the protest.
The solicitation, issued on August 22, 1986, involved the change from
manual data collection of approximately 110,000 reports from 1,300
active ship operators operating 37,000 vessels, to an automated system.
Proposals were evaluated on, in descending order of importance,
Experience, Capability, Management, and Price, with a total of 12
subfactors.
The Corps received three proposals in response to the solicitation.
All offerors were found acceptable and were asked to submit best and
final offers (BAFO's); F & T, which the Corps asked to address 26
questions in its BAFO, received a final technical score of 46, a price
score of 20.79 and a total score of 66.79. Gulf received a technical
score of 61, a price score of 21 and a total score of 82. Accordingly,
the Corps awarded the contract to Gulf on December 17, 1986. F & T
protested to the Corps on December 19 and 23 and requested a debriefing;
when no response was forthcoming, F & T protested to our Office on
January 15, 1987.
F & T complains that, since the firm performed the prior contract the
preceding 3 years, it is inconceivable that Gulf, which had lost the
contract to F & T, could be evaluated higher than F & T under any of the
evaluation factors.
Our review of the evaluation documents shows that only on two of the
five Capability subfactors, understanding of scope and magnitude of the
work and minimum qualifications established for personnel, did F & T's
evaluation equal Gulf's. The most significant disparity in scores
occurred in the subfactors for past performance of the firm in similar
work (under the Experience factor), knowledge of specific computer
applications (under Capability), equipment suitability (also
Capability), and establishment of acceptable quality levels (a subfactor
of Management). There were less significant disparities in the
remaining six subfactor scores.
The evaluation documents further show that, for example, while F & T
was the incumbent for the manual data collections for the Waterborne
Commerce Statistics Center, it has not had similar automated data
collection contracts. Moreover, its performance on the manual
collection contract was adjudged by the evaluators to be "less than
satisfactory," "moderately successful," and "marginal." Gulf, on the
other hand, currently has an automated coding and data entry contract at
the Waterborne Commerce Statistics Center on which its performance is
adjudged to be more than satisfactory, and has successfully completed
comparable projects.
It also is clear from the record that a primary area of
specialization for Gulf's firm and personnel is the development of
on-line applications software, and that Gulf already is familiar with
the coding and data entry aspects of gathering the Corps' waterborne
commerce statistics. In contrast, F & T's plan for conversion states
that a subcontractor will set up the initial phase of the implementation
of the process and be available for guidance throughout the contract;
while this plan was not found inadequate, it is apparent that the Corps
was concerned that F & T's own staff does not have specialized knowledge
in automated conversion.
In reviewing complaints about an agency's technical evaluation, our
function is not to conduct a reevaluation and make our own determination
about an offer's merits. Procuring officials necessarily have a
reasonable degree of discretion in evaluating proposals, and we will not
question their decision unless it is shown to be arbitrary or in
violation of procurement laws or regulations. B & W Service Industries,
Inc., B-224392.2, Oct. 2, 1986, 86-2 C.P.D. P 384. Our review of the
evaluation materials does not establish that the Corps was unreasonable
in its judgments; F & T's disagreement with the scoring based on the
firm's belief that it has been and would continue to be a successful
contractor does not invalidate the Corps' conclusions. See Technolopy
Inc., B-223999, Nov. 4, 1986, 86-2 C.P.D. P 517.
F & T also raises the issue of the Corps' denial of the contract to a
woman-owned small business, noting that the solicitation includes the
provision at Federal Acquisition Regulation, 48 C.F.R. Sec. 52.219-13
(1986), that women-owned businesses should have the maximum practicable
opportunity to participate in performing contracts awarded by federal
agencies. We have reviewed the record and are unable to discern any
evidence of discrimination against F & T in the Corps' evaluation.
Moreover, the cited provision states a government policy, and does not
mandate that a woman-owned business receive special consideration in any
particular procurement. See Le-Gals, Inc., B-212531.2, Oct. 5, 1984,
84-2 C.P.D. P 386.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Snow White Cleaners and Linen Supply, Inc.
File: B-225636
Date: March 26, 1987
Cancellation of hospital laundry services solicitation after bid
opening is proper where agency determines specifications have to be
revised to establish that only certain types of washing machines will
satisfactorily safeguard against contamination of clean laundry from
contact with soiled laundry bacteria; protesting low bidder's facility
is not equipped with specified machine types; and protester does not
establish that the requirement for certain types of machines exceeds the
government's needs.
Snow White Cleaners and Linen Supply, Inc. protests the Department of
Health and Human Services' (HHS) decision to cancel invitation for bids
(IFB) No. 243-IFB-86-0126 for laundry services at the Alaska Native
Hospital, Anchorage, Alaska. We deny the protest.
The IFB was issued September 12, 1986, and established October 21 as
the bid opening date. Of the three bids received by the opening date,
Snow White's was low at $221,000. A preaward survey at Snow White's
facility, however, found several plant design and operational
deficfencies which, the survey concluded, could lead to contamination of
clean linen. The contracting officer concurred and determined Snow
White nonresponsible.
Because Snow White is a small business, HHS referred the
nonresponsibility determination to the Small Business Administration
(SBA) for a final responsibility determination under SBA's certificate
of competency (COC) procedures. On December 11, SBA advised the agency
that it was favorably considering Snow White's COC application, on the
basis that Snow White was capable of correcting the preaward survey
deficiencies.
On December 12, HHS contracting personnel, held a meeting to discuss
whether to appeal SBA's proposed issuance of a COC, and concluded that
the specifications had not been drawn tightly enough to ensure to the
extent possible that contamination of clean laundry would not occur due
to facilities or procedures that brought the clean laundry into contact
with bacteria from soiled laundry. HHS therefore canceled the
solicitation and on February 20 issued IFB No. 243-IFB-87-0063, adding a
requirement that double door pass through washer/extracters (which, as
we understand from the record, operate by loading soiled laundry in one
door and emptying clean laundry out of a second door in an adjacent
room) or overhead chute loaded washers be used to ensure "physical
separation" of clean and soiled laundry operations, a requirement under
the original IFB. The new IFB makes other minor changes in the original
laundering procedures, and also requires that the contractor have a
successful history of providing hospital laundry services.
Snow White protests that cancellation of the original IFB due to
inadequate safeguards against laundry contamination was unjustified
since the IFB contained detailed procedures to eliminate this
possibility, including the "physical separation" requirement. Snow
White claims that the real impact of the changes in the new IFB will be
to exclude all firms from the competition but the incumbent, Alaska
Cleaners. In this regard, according to Snow White, no firm with a
facility within a reasonable distance of the hospital is equipped with
double door pass through washer/extractors, and only Alaska Cleaners has
overhead chute loading machines. Snow White has single side-door
washers, and maintains that these machines are considered adequate by
other hospitals when coupled with requirements for physical separation
and proper air flow (also a requirement in the original IFB).
Due to the potential adverse impact on the competitive bidding system
of canceling a solicitation after bid prices have been exposed,
contracting officers may cancel a solicitation after bid opening only
where there is a compelling reason for doing so. Commercial Envelope
Mfg. Co., Inc., B-213272, Feb. 15, 1984, 84-1 C.P.D. P 206. The failure
of a solicitation to set forth specifications adequate to meet the
agency's minimum needs constitutes a compelling reason to cancel. W.H.
Smith Hardware Co., B-219987.2, Jan. 21, 1986, 86-1 C.P.D. P 62.
Here, the addition of the requirement for specific types of washers
undisputedly reflects a significant change in the government's
requirement since it restricts the manner in which the contract can be
performed, and it would be costly (as much as $50,000 according to HHS)
for any firm to convert its operation to meet the requirement. Thus,
the addition of this restriction could have limited the number of firms
that could compete and, in fact, would have eliminated Snow White, the
low bidder, from the competition. Given the new requirement, award to
Snow White based on its original bid would be inappropriate since it
would require the agency to forego its stated need for performance with
the specified types of washers, and cancellation was the proper course
for the agency to take. Compare Summerville Ambulance, Inc., B-217049,
July 1, 1985, 85-2 C.P.D. P 4.
Of course, cancellation based on a requirement for certain types of
washers would not be warranted were it shown that the requirement is not
part of the agency's actual minimum needs. Snow White's protest is
based on this line of argument, that is, Snow White contends that its
washers are essentially comparable to overhead chute loading washers in
terms of the possibility of contamination of clean laundry. Snow White
explains in this regard that while the overhead chute loading
arrangement has the advantage of permitting the movement of soiled
laundry directly from a separate sorting room into the machines (while
Snow White must cart the soiled laundry between the two rooms and then
manually load the machines), studies have shown that the chute itself
may end up being a conduit for contaminants. Snow White also claims
that any seeming advantage from having the chute channel the soiled
laundry directly into the washers, thus eliminating handling, is
mitigated by the fact that the chute actually deposits the laundry on
the machine and on the floor at times, necessitating handling, and the
additional fact that the chute must be manually cleared when it jams
periodically.
Even if Snow White is correct regarding the possible contamination of
the chute and the need for some handling despite the chute, it seems to
be HHS's position that this possibility nevertheless presents a lesser
risk of spreading contaminants than the carting and handling of the
soiled laundry necessary under Snow White's single-door washer
operation. This position seems reasonable to us. Despite the
possibility that the overhead chute system will not operate smoothly in
every instance, in theory this system seems to present less opportunity
for contamination to take place than does Snow White's single-door
washer operation. For instance, while imperfections in the chute system
may result in a need for handling of soiled laundry at times (leading to
an increased possibility of contamination of clean laundry), Snow
White's single-door system requires handling of soiled laundry in every
instance, as part of the normal operation. While we have not been
presented with adequate information to rule conclusively on the relative
effectiveness of the two systems, we do find the evidence is adequate to
conclude that the chute loading system should entail less handling of
soiled laundry, and that HHS's determination to restrict the IFB was
reasonable.
Moreover, it appears from the record that double door pass through
machines clearly provide a superior physical barrier between soiled and
clean laundry since the soiled laundry does not have to be transported
(by chute or cart) for loading into the washers. Snow White does not
claim that its machines are equivalent to these washers or otherwise
address the advantages of this type of machine for purposes of avoiding
contamination, instead maintaining that no likely offeror will have
these washers. While it well may happen that no firm will be capable of
bidding based on use of this type of machine, that possibility does not
diminish the validity of HHS's determination that such machines would
serve what we see as a legitimate need to reduce the risk of
contamination; the agency is not required to award a contract for less
than its true needs solely because a possibility exists that no firm
will offer to meet those needs.
Snow White finds the overhead chute loading washer restriction
incongruous in light of the fact that the incumbent was using such a
chute loading system at the time of two bacterial contamination
outbreaks in the hospital. Were the record to show that the outbreaks
had been traced to the chute loading aspect of the laundry operation,
this argument would have some practical merit. There is no such showing
in the record, however; hospital officials did determine that the
outbreaks could have resulted from the contamination of clean laundry,
but never found that the overhead chute aspect of the incumbent's
laundry operation was the cause. The addition of the overhead chute
restriction here suggests that hospital officials in fact have concluded
that the chute was not the cause of the outbreaks.
Our Office will not upset an agency's determination as to its needs
and the best means of accommodating them absent a clear showing that the
determination was arbitrary or unreasonable, since contracting agency
officials, not competing firms or our Office, are most familiar with the
conditions under which supplies or services will be used. See Engine &
Generator Rebuilders, 65 Comp. Gen. 191 (1986), 86-1 C.P.D. P 27. While
we believe Snow White has shown that there is valid disagreement over
the merits of overhead chute loading washers in preventing clean laundry
contamination, we do not believe Snow White has established that HHS
unreasonably determined that performance with double door pass through
or overhead chute loading machines would safeguard against contamination
better than would single-door washers. Therefore, the cancellation of
the original IFB and resolicitation was proper based on the need to add
this requirement.
Snow White asserts that HHS's decision to cancel the IFB really was
based not on government needs, but on bias against Snow White. Snow
White cites certain events as supporting this assertion, in particular
HHS's December 12 meeting to decide whether to oppose SBA's proposed
issuance of a COC.
Where a protester alleges that procurement officials acted
intentionally to preclude the protester from receiving the award, the
protester must submit virtually irrefutable proof that the officials had
a specific and malicious intent to harm the protester, since such
officials otherwise are presumed to act in good faith. Prejudicial
motives will not be attributed to contracting officials on the basis of
inference or supposition. Rodgers-Cauthen Barton-Cureton, Inc.,
B-220722.2, Jan. 8, 1986, 86-1 C.P.D. P 19.
We already have determined that the cancellation here was justified
based on legitimate government needs, and the record contains no
evidence of improper agency actions in connection with this procurement.
Snow White's impression that the December 12 meeting evidences some
improper motivesimply is incorrect. There is nothing improper in an
agency meeting to decide whether to continue challenging a firm's
responsibility to perform through an appeal under SBA's COC procedures.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: MedSource, Inc.--Request for Reconsideration
File: B-225635.2
Date: March 23, 1987
Decision dismissing protest of exclusion from competitive range as
untimely is affirmed because subsequent protest filed after award was
made is also untimely; the fact that award was made to another offeror
is not relevant to the propriety of the rejection of the protester's
proposal.
MedSource, Inc. requests reconsideration of our decision, MedSource,
Inc., B-225635, Jan. 27, 1987, 87-1 CPD P , dismissing its protest of
the Department of the Interior's rejection of its proposal under request
for proposals (RFP) No. 14-01-0001-87-R-02. We affirm our decision.
On December 18, 1986, upon learning that it was no longer in the
competitive range, MedSource wrote to the agency protesting the award of
any contract under the RFP. MedSource failed to state a basis for
protest in its letter, however, leading the agency to deny the protest
on January 13. MedSource filed a protest with our Office the following
day, which we dismissed as untimely in our January 27 decision. We
explained that although a protester who initially protests to the
contracting agency has 10 working days after notification of initial
adverse agency action to protest to this Office, Bid Protest
Regulations, 4 C.F.R. Sec. 21.2(a)(3) (1986), MedSource's letter to the
agency did not constitute a protest since it did not specify any basis
for protest.
On January 13, while we were considering MedSource's protest, the
protester learned that Interior had awarded a contract to another
offeror. On January 21, it filed a second protest with our Office again
objecting to the award on the basis that its proposal had been
improperly rejected. This protest is the subject of MedSource's request
for reconsideration. MedSource argues that even if its original protest
to our Office was untimely, this second protest should have been
considered.
MedSource raised no new grounds of protest in its January 21 letter;
it merely reasserted its argument that any award to another offeror
would be improper because it had been erroneously excluded from the
competitive range. A protest must be filed not later than 10 working
days after the basis of protest is known, 4 C.F.R. Sec. 21.2(a) (2), and
MedSource learned that it had been excluded from the competitive range
on December 18, 1986. The protester has not shown that the subsequent
award to another offeror is relevant to the propriety of the earlier
rejection of its proposal. Thus, its January 21 protest of that
rejection is also untimely. The decision is affirmed.
Harry R. Van Cleve
General Counsel
Matter of: MedSource, Inc.
File: B-225635
Date: January 27, 1987
A letter to the contracting officer protesting the award of a
contract that does not specify any basis for protest is not sufficient
to constitute a protest to the agency; therefore, a protest
subsequently filed with the General Accounting Office more than 10 days
after the basis for protest was known is dismissed as untimely.
MedSource, Inc. protests the rejection of its proposal under request
for proposals (RFP) No. 14-01-0001-87-R-02, issued by the Department of
the Interior. We dismiss the protest as untimely.
MedSource alleges that it delivered to the agency a timely best and
final offer under the RFP on December 18, 1986. The protester alleges
further that the agency informed the person delivering the offer that
MedSource was no longer in the competitive range. Based on this,
MedSource contends that the agency's award determination appears
improperly to have been made prior to consideration of the best and
final offers.
The protester characterizes its protest to this Office as a
"follow-up" to a protest filed with the agency by letter dated December
18. We received an information copy of its agency protest on December
22.) MedSource has attached to its protest to this Office a copy of the
agency's letter of January 13, 1987, denying its agency protest for
failure to state a basis for protest.
Our Bid Protest Regulations provide that a protest based on other
than a solicitation impropriety must be filed not later than 10 days
after the basis of protest is known or should have been known. 4 C.F.R.
Sec. 21.2(a)(2) (1986). If a protest has been filed initially with the
contracting agency, any subsequent protest to this Office filed within
10 working days of when the protester learns of initial adverse agency
action on the agency-level protest will be considered, provided the
initial protest to the agency was timely. 4 C.F.R. Sec. 21.2(a)(3).
MedSource filed its protest with this Office on January 14, more than
10 working days after it knew of its basis of protest on December 18,
1986. Therefore, the protest here can be considered timely only if
MedSource initially filed a timely protest with the agency. In this
regard, however, the protester's letter of December 18 to the
contracting officer stated that MedSource was protesting the award of a
contract under the RFP, but did not specify any basis for protest. This
letter was not sufficient to constitute a protest. See Pacific
Fabrication--Request for Reconsideration, B-224065.2, Sept. 9, 1986,
86-2 CPD P 277. Therefore, we are of the view that no timely protest
was filed with the agency and consequently, we consider the protest
filed here as untimely.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
Matter of: N. W. Ayer, Inc.
File: B-225632
Date: January 16, 1987
Protest that offeror was improperly suspended is dismissed where
protester also seeks relief from a court of competent jurisdiction and
despite protester's assertion that it might consider asking the court to
request a General Accounting Office decision, the court has expressed no
interest in such a decision.
N. W. Ayer, Inc. protests the award of a contract for advertising
services to any other offeror under request for proposal No.
MDA903-86-R-1001 issued by the Defense Supply Service - Washington.
Ayer complains that "it would have been eligible for the award of the
contract. . . but for an illegal, indefinite suspension. . . ."
According to Ayer, it submitted a proposal and followed that, at the
agency's request, with an oral presentation. Ayer further states,
however, that the agency is no longer considering its proposal and
refused to solicit a best and final offer from it because the Army
suspended Ayer on November 23, 1986 and affirmed the suspension on
January 9, 1987. Ayer's primary complaint is that the suspension has
deprived it of due process because the notice of suspension was
impermissibly vague.
Under the Competition in Contracting Act of 1984, 31 U.S.C. Secs.
3551-56 (Supp. III 1985), this Office considers protests alleging a
violation of a procurement statute or regulation in connection with the
issuance of a solicitation by a federal agency or with an award or
proposal award of a contract under such a solicitation. 31 U.S.C. Sec.
3551-52. When a protester alleges that it has been improperly suspended
or debarred during the pendency of a procurement in which it was
competing, we review the matter to ensure that the agency has not acted
arbitrarily to avoid making an award to the offeror otherwise entitled
to award. See, e.g., Spectrum Enterprises, B-221202, Dec. 31, 1985,
86-1 CPD P 5, where we reviewed a suspension report prepared by the
Defense Criminal Investigative Service and concluded that the agency did
not act arbitrarily in suspending the low bidder. In considering such
protests, we also examine whether minimum standards of due process have
been met. See S.A.F.E. Export Corp., B-222308 et al., Apr. 28, 1986, 65
Comp. Gen. , 86-1 CPD P 413, aff'd on reconsideration, B-222308.2 et
al., July 8, 1986, 86-2 CPD P 44.
We will not consider this protest, however, because the protester is
also seeking relief from the United States District Court for the
District of Columbia. It has long been our policy to dismiss a protest
where the matter is the subject of litigation before a court of
competent jurisdiction, unless the court requests our decision. See 4
C.F.R. Sec. 21.9(a) (1986). Our review of the complaint filed by Ayer
with the court indicates that Ayer is asking for relief on the same
basis it seeks relief from us--that it has been deprived of due process.
The court has already denied a request for a temporary restraining
order and has before it a motion for a preliminary injunction. There is
no request in Ayer's complaint that the court ask for our decision or
that the court enjoin contract award pending issuance of our decision,
and there is no indication in any document submitted to us that the
court is interested in our decision. Although Ayer states that it and
Army counsel are seeking to reach agreement on "the next procedural
steps to be taken" and that " a s part of these next steps, Ayer may
consider it appropriate to ask" that the court seek our decision, we
think that possibility is too tenuous a basis at this point for us to
retain this protest and require the agency to prepare the report that
would be required by 31 U.S.C. Sec. 3553(b) (2).
Accordingly, pursuant to 4 C.F.R. Sec. 21.9, we dismiss the protest.
Should the court decide to request our decision, we will consider the
matter at that time.
Ronald Berger
Deputy Associate
General Counsel
Matter of: Stephan Wood Products Inc.
File: B-225631
Date: April 1, 1987
1. Where record shows that contracting officer reasonably relied upon
preaward survey in finding bidder to be responsible, there is no basis
for concluding that affirmative responsibility determination of
contracting officer was made in bad faith.
2. General Accounting Office (GAO) will not consider protests that
another bidder does not qualify as a manufacturer or regular dealer
under the Walsh-Healey Public Contracts Act, since the agency
determination concerning the status of a bidder under that act is
subject to review by the Small Business Administration (SBA) (where a
small business is involved) or the Department of Labor. Where the
agency has not referred protester's continued disagreement with small
business firm's Walsh-Healey Act status to the SBA for its
determination, despite being promptly apprised of the disagreement, the
agency should now refer matter to SBA as required by the Federal
Acquisition Regulation.
Stephan Wood Products Inc. protests on January 13, 1987, the proposed
award under invitation for bids (IFB) No. DLA70086-B-0947 to Anderson
Manufacturing Company by the Defense Construction Supply Center (DCSC),
Columbus, Ohio, for vertical bow staves. Stephan alleges that Anderson
is not a responsible contractor, inasmuch as it does not have the
equipment, expertise or financial capability to manufacture this
product. Stephan also claims that Anderson does not qualify as a
manufacturer or regular dealer under the WalshHealey Public Contracts
Act, 41 U.S.C. Secs. 35-45 (1982), and thus is ineligible for award.
We dismiss the protest in part and deny the remainder.
The agency argues that Stephan's protest should be dismissed under
section 21.1 (d) of our Bid Protest Regulations because the contracting
officer only received a copy of the protest on January 21, 1987, more
than 1 day after it was filed with our Office. However, the agency did
not raise this matter until it submitted its report on the merits of the
protest, and its report was timely filed within 25 working days.
Therefore, we decline to dismiss the protest on this basis. See Allied
Maritime Management Organization, Inc., B-222918, B-222918.2, Aug. 28,
1986, 86-2 C.P.D P 227.
Stephan challenges DCSC's determination that Anderson is a
responsible contractor and claims that this determination was based upon
Anderson's fraudulent representations and the government's "blind" bad
faith acceptance of these misrepresentations. Our Office will not take
exception to an affirmative determination of contractor responsibility
unless the protester makes a showing of fraud or bad faith on the part
of the procuring officials. 4 C.F.R. Sec. 21.3(f)(5) (1986);
Information Systems & Networks Corp., B-218642, July 3, 1985, 85-2
C.P.D. P 25. To make this showing the protester has a heavy burden of
proof; it must demonstrate by virtually irrefutable proof that
procuring officials had a specific and malicious intent to injure the
protester. Gayston Corp.-- Request for Reconsideration, B-223090.2,
July 25, 1986, 86-2 C.P.D. P 115; Information Systems & Networks Corp.,
B-218642, supra.
Stephan has made no such showing. In making her affirmative
responsibility determination, the contracting officer primarily relied
upon a preaward survey by the Defense Contract Administration Services
Region, Dayton, Ohio, recommending award to Anderson. This survey
documented that Anderson had adequate available equipment, and technical
and production capability to manufacture the vertical bow staves, which
are very simple to produce. The survey also showed that although
Anderson was inexcusably delinquent on some recent contracts due to
inadequate production personnel, it has added new employees and current
contracts are on schedule. Moreover, a detailed financial analysis was
made of Anderson, which confirmed that it had the financial resources to
perform this contract.
Stephan offered evidence allegedly showing that Anderson does not
have the requisite experience, equipment or financial resources to
perform this contract, based, in the main, on Anderson's past
performance and disputing the finding of the preaward survey.
The record indicates that the contracting officer considered this
information, but that she found the specific findings and recommendation
of the preaward survey supported an affirmative responsibility
determination for Anderson. In this regard, the well documented
preaward survey showed that Anderson had taken steps to cure its past
performance problems and had improved its financial position. Moreover,
the bow staves were found to be very simple to produce. Thus, the
record indicates that the contracting officer reasonably could rely on
the preaward survey, and we find that Stephan has not demonstrated that
the contracting officer's determination that Anderson is responsible was
made in bad faith. This basis of protest is denied.
With regard to Stephan's protest of Anderson's Walsh-Healey Act
status, our Office will not consider protests alleging that another
bidder does not qualify as a manufacturer or regular dealer under the
Walsh-Healey Public Contracts Act, since the agency's determination
concerning the status of a bidder under the act is by law subject to
review by the Small Business Administration (SBA) (where a small
business is involved) or the Department of Labor. 4 C.F.R Sec. 21.3(f)
(9); California Mobile Communications, B-224398, Aug. 29, 1986, 86-2
C.P.D.P 244. Therefore, this protest basis is dismissed.
However, the record shows that DCSC has not referred Stephan's
protest of Anderson's eligibility under the WalshHealey Act to the SBA.
Since DCSC was promptly apprised that Stephan disagreed with the
contracting officer's determination that Anderson was a manufacturer,
DCSC should now refer the matter to the SBA for its determination as
required by the Federal Acquisition Regulation, 48 C.F.R. Sec.
22.6083(b) (2) (1986). We are so advising the agency.
We dismiss the protest in part and deny the remainder.
Harry R. Van Cleve
General Counsel
Matter of: Adrian Supply Co.--Reconsideration
File: B-225630.4
Date: September 18, 1987
Protester has not established that inadequate competition was
obtained under small business set-aside where bids were received from
two apparently eligible small business concerns and the contracting
activity determined that adequate competition and reasonable prices had
been obtained.
Adrian Supply Company requests reconsideration of our decision,
Adrian Supply Co., B-225630.2, May 7, 1987, 87-1 C.P.D. P 489, in which
we denied Adrian's protest that its bid under solicitation No. C-1515
was improperly rejected by the Bureau of Indian Affairs (BIA), U.S.
Department of the Interior, for failure to submit required descriptive
literature. We also dismissed Adrian's protest that the awardees' bids
were nonresponsive because they indicated that the bidders were not
eligible small business concerns because Adrian was not on interested
party.
Adrian previously requested reconsideration, conceding that its bid
properly was rejected as nonresponsive and, therefore, that it generally
would not be considered an interested party to protest the
responsiveness of other bids. However, Adrian contended that there were
an insufficient number of responsive small business bids to ensure
adequate competition and, therefore, termination and resolicitation was
the appropriate remedy, which would make Adrian an interested party. We
dismissed this request on the basis that it was untimely because Adrian
had been made aware by the agency report of BIA's position that there
had been adequate competition, but Adrian failed to raise the issue in
its comments. Adrian Supply Co.,--Reconsideration, B-225630.3, Aug. 7,
1987, 87-2 C.P.D. P .
Adrian now points out that in its response to the agency report it
had indicated that adequate competition existed only because the agency
improperly considered large business bids under a small business
set-aside, in effect arguing that there was inadequate competition.
Since this argument reasonably may be construed to have timely raised
the issue of whether adequate competition was received under the
solicitation, we will consider the issue.
The solicitation in question was a total small business setaside for
multiple line items, under which 15 bids were received. BIA determined
that nine of the bids, including Adrian's, were nonresponsive either
because the bidders indicated that they were large business concerns, or
because of other bid defects. Of the remaining six bidders, Adrian
contends that four should have been rejected as nonresponsive because
they were either large businesses, or were offering products
manufactured by large businesses; three of these four bidders received
awards for various combinations of the line items which were solicited.
Adrian further speculates that the remaining two bids were also
nonresponsive, but has offered no supporting evidence in this regard,
nor is there any such indication in the record. Thus, at a minimum, BIA
received two responsive small business bids under this small business
set-aside, and the contracting officer had determined that BIA had
obtained adequate competition and reasonable prices.
The Federal Acquisition Regulation (FAR), 48 C.F.R. Sec. 19.502-2
(1987), provides that in order to make a total small business set-aside
the contracting officer must determine that there is a reasonable
expectation that offers will be received from at least two responsible
small business concerns and that award will be made at a reasonable
price. The applicable regulation expressly contemplates that bids by
two responsible small business concerns would constitute adequate
competition. Further, we have held that where, as here, two offerors
compete, the agency reasonably may conclude that adequate competition
exists. Sperry Corp., B-225492, et al, Mar. 25, 1987, 87-1 C.P.D. P
341. In addition, we have held that the fact that only one responsive
small business bid is received under a small business set-aside does not
establish that there was inadequate competition where the contracting
officer determines the price to be reasonable. U.S. Elevator Corp.,
B-224237, Feb. 4, 1987, 87-1 C.P.D. P 110. Therefore, under the present
circumstances, we cannot say that the contracting officer lacked a
reasonable basis to determine that there was adequate competition.
Since there were two responsive small business bidders who could have
protested, Adrian is not an interested party for the purpose of
protesting the nonresponsiveness of the awardees.
We note that BIA has recognized that the awards were improper under
this small business set-aside because the awardees' bids indicated that
the bidders were either large businesses or were offering goods made by
large business manufacturers. Because performance had been fully
completed under the solicitation, no remedy was available. However, by
memo from the BIA, Chief, Division of Contracting and Grants
Administration, to all bureau contracting offices, BIA contracting
officers were advised to carefully examine bidder representations
concerning size and small business eligibility when evaluating bids
under small business setasides. The memo also brought to the
contracting officers' attention the fact that a small business set-aside
can only be dissolved after bid opening in accordance with the
requirements set forth in FAR, 48 C.F.R. subpart 19.5.
The original decision is affirmed.
Harry R. Van Cleve
General Counsel
Matter of: Adrian Supply Co.--Reconsideration
File: B-225630.3
Date: August 7, 1987
Request for reconsideration is dismissed where argument raised by
protester is one which it could and should have advanced in its original
protest, as GAO's Bid Protest Regulations do not contemplate the
unwarranted piecemeal development of protest issues.
Adrian Supply Company requests reconsideration of our decision,
Adrian Supply Co., B-225630.2, May 7, 1987, 87-1 C.P.D. P 489, in which
we denied Adrian's protest that its bid under solicitation No. C-1515
was improperly rejected by the Department of the Interior for failure to
submit required descriptive literature, and dismissed Adrian's protest
that the awardees' bids were nonresponsive.
We dismiss the request for reconsideration as untimely.
In its request for reconsideration, Adrian concedes that its bid
properly was rejected as nonresponsive and, therefore, that it generally
would not be considered an interested party to protest the
responsiveness of other bids. However, Adrian now asserts that there
were an insufficient number of responsive, small business bids to ensure
adequate competition and, therefore, Adrian contends that it is an
interested party because the appropriate remedy would be to terminate
the contracts and resolicit the requirement.
A protester may not raise a new ground of protest in a request for
reconsideration which could and should have been made in its original
protest as our Bid Protest Regulations do not contemplate the
unwarranted piecemeal development or presentation of protest issues.
Dynalectron Corp. 65 Comp. Gen 92 (1985), 85-2 C.P.D. P 634. Adrian
was made aware of the agency's contention that there had been adequate
competition while its original protest was pending; the agency report
explicitly takes this position and points out that Adrian had offered no
evidence of inadequate competition or unreasonable prices. In its
comments on the agency report, Adrian contended only that the awardees
were nonresponsive, and did not raise the allegation that there was
inadequate competition. Accordingly, Adrian's protest in this respect,
raised for the first time in its reconsideration request which was filed
more than 2 months after Adrian received the agency report (the latest
possible date on which this basis for protest was known by Adrian), is
untimely and not for consideration on the merits. W.H. Smith Hardware
Company--Reconsideration, B-219327.5, Oct. 30, 1985, 85-2 C.P.D. P 488.
Adrian also contends that our Office should consider the matter even
if it is not an interested party because the agency appears to have
violated a strong public policy in favor of fostering small businesses
by the use of small business set-asides where appropriate. Adrian is
requesting that we consider its protest under the "significant issue"
exception in our Bid Protest Regulations, 4 C.F.R. Sec. 21.2(c) (1987).
This exception applies to protest issues not previously considered by
our Office, whose widespread interest or importance to the procurement
community warrants consideration despite untimely filing; it does not
pertain to or permit the consideration of a protest issue raised by a
firm which is not an interested party under our Regulations for the
purpose of filing the protest. 4 C.F.R. Secs. 21.0(a) and 21.1(a);
Swintec Corp.--Reconsideration, B-212395.7, July 3, 1984, 84-2 C.P.D. P
12.
The request for reconsideration is dismissed.
Robert M. Strong
Deputy Associate
General Counsel
Matter of: Adrian Supply Co.
File: B-225630.2
Date: May 7, 1987
1. Where invitation for bids requires descriptive literature,
bidder's failure to submit descriptive literature with its bid renders
the bid nonresponsive.
2. Award of a contract is not improper solely because a bidder did
not receive a complete copy of the solicitation as long as there is
adequate competition resulting in reasonable prices and there is no
evidence of a conscious or deliberate intent on the part of the
procuring agency to exclude a particular bidder from competition.
3. A nonresponsive bidder is not an interested party under GAO Bid
Protest Regulations to protest the responsiveness of the awardees' bids
where there are other bids which could be accepted, so that the
protester does not have the requisite direct economic interest in the
outcome of the matter.
Adrian Supply Co. protests the awards of contracts for electric
transformers to North Coast Electric and Central Moloney Transformers
under invitation for bids (IFB) No. C-1515, a small business set-aside
issued by the Department of the Interior.
Adrian asserts that its bid improperly was rejected for failure to
contain descriptive literature, and that North Coast's and Central
Moloney's bids were nonresponsive because Central Moloney certified that
it was a large business, and North Coast proposed to supply goods
manufactured by a large business. Adrian also claims bid preparation
costs.
We deny the protest against the rejection of Adrian's bid and dismiss
it as to the other bids. The claim is also denied.
The IFB provided that descriptive literature was required to
establish details of the product that the bidder intended to furnish to
meet the specifications, with respect to design, materials, components,
performance characteristics, and methods of manufacture, assembly,
construction, or operation, in order to determine the technical
acceptability of the product offered. The IFB also advised that failure
to submit descriptive literature with a bid would require rejection of
the bid. At bid opening on October 22, 1986, 15 bids were received, six
of which were found responsive. Adrian's bid was rejected as
nonresponsive for failure to include descriptive literature. Awards
were made for various combinations of bid items to Central Moloney,
Ermco, North Coast, and Disco-Allen Electrical Supply Co.
Adrian protests that it is entitled to award for those items for
which it is the low bidder, but which were awarded to North Coast and
Central Moloney. We have held that where an invitation advises bidders
that descriptive literature is needed for bid evaluation and must be
furnished before bid opening or the bid will be rejected, a bid
submitted without the necessary descriptive material is nonresponsive
and must be rejected. NJCT Corp., B-224246, Feb. 13, 1987, 87-1 C.P.D.
P 159; Miller Spreader Co., B-215467, July 23, 1984, 84-2 C.P.D. P 89.
Since Adrian did not furnish descriptive literature with its bid, we
find that Interior properly rejected Adrian's bid as nonresponsive.
Adrian argues that the solicitation package which it received did not
contain section "L" which requires the submission of descriptive
literature. However, we have held that award of a contract is not
improper solely because a bidder did not receive a complete copy of the
solicitation, as long as there is adequate competition resulting in
reasonable prices and there has been no deliberate attempt by the
procuring agency to preclude a specific bidder from competing. Equipto
Electronics Corp., B-220733, Oct. 29, 1985, 85-2 C.P.D. P 485;
Serv-air, Inc., B-216582, Jan. 16, 1985, 85-1 C.P.D. P 42. In this
case, there is no indication that Interior was aware that any bid
package was incomplete. Further, as Interior points out, the table of
contents appearing on the first page of the solicitation (Standard Form
33) indicates the inclusion of section "L." If this section was missing
from Adrian's bid package, Adrian should have been aware of this from an
examination of the bid package and made a request for same before bid
opening. Moreover, other responsive bids, all within a narrow price
range, were received.
Adrian also protests that North Coast's and Central Moloney's bids
should have been rejected as nonresponsive. Adrian, however, is not an
interested party under our Bid
Protest Regulations, 4 C.F.R. Secs. 21.0(a) and 21.1(a) (1986), to
raise this issue. Since Adrian was properly rejected as nonresponsive,
and there are bidders other than North Coast and Central Moloney
remaining in the competition which could be awarded the contracts if
North Coast's and Central Moloney's contracts were terminated, Adrian
lacks the requisite direct economic interest in the resolution of this
matter. Johnson Moving & Storage Co., B-221826, Mar. 19 1986, 86-1
C.P.D. P 273.
The protest is denied in part and dismissed in part, and the claim
for bid preparation costs is also denied.
Harry R. Van Cleve
General Counsel
Matter of: Cerberonics, Inc.
File: B-225626, B-225627
Date: April 30, 1987
1. The interim extensions of two contracts about to expire pending
awards under competitive follow-on procurement is justified where
ongoing, critical services otherwise would be interrupted and only the
incumbent contractors can meet the government's needs within the 4-month
timeframe covered by the extensions.
2. Allegation that award of 4-month interim contract extensions
pending competitive procurement was necessitated by agency failure to
conduct proper advance planning is without merit, where the record shows
that agency did in fact begin planning a competitive acquisition more
than 1 year before existing contracts'scheduled expirations.
Cerberonics, Inc., protests the Department of the Navy's extension of
the performance period for contract No. N001984-D-0082 and for contract
No. N0019-84-D-0117. Cerberonics contends that the extensions amount to
improper sole-source awards of new contracts and challenges the
propriety of the Navy's justifications issued in support of the
extensions.
We deny the protest.
The contracts were awarded in 1983 pursuant to a 3-year omnibus
procurement of various types of logistics services for naval fleet
support activities. The solicitation divided the required services into
five groupings or lots. Advanced Logistics Management, Inc. (ALM),
received the award (contract No. N0019-84-D-0082) for the Lot I work,
which consisted of "Requirements Integration" for aircraft and weapons
systems to ensure that the overall integrated system of hardware and
logistics support fulfilled the operational mission of the Navy's fleet.
Information Spectrum, Inc. (ISI), received the award (contract No.
N0019-84-D-0117) for the Lot II work of "Resource Analyses," involving
the determination of the short-term and long range alternatives to
aircraft and weapons systems currently supporting the Navy's fleet.
Cerberonics submitted an offer for only the Lot III work, "Program
Assessment," which involved technical analyses in evaluating the
integration of logistics tasks to ensure the smooth transition of new
weapons systems into the Navy's fleet. Lot III was canceled, however,
pending an investigation of a suspected compromise to the integrity of
the offers submitted for the work. Subsequent to the cancellation of
Lot III, the Navy reevaluated its needs on the remaining lots and
amended the awarded Lots I and II contracts to increase the work to be
performed under them. In August 1985, a scaled down Lot III contract
was awarded on a sole-source basis to Cerberonics.
It became apparent to the Navy toward the end of fiscal year 1986
that a final acquisition plan for competitive procurement of its
logistics services requirements, which had been in the planning stage
since 1985, could not be completed before the expiration of the
contracts awarded to ALM and ISI, so the Navy decided to extend the
performance periods of the two companies' contracts through September
30, 1987. The Navy published notices of its intent in the October 23,
1986, edition of the Commerce Business Daily (CBD), and received
detailed responses from Cerberonics and other companies in the industry
indicating a strong interest in competing for the work. The Navy
therefore reassessed its decision to extend the ALM and ISI contracts
through September 1987 and, on November 3, 1986, canceled the notices.
The Navy then identified logistics support services within Lots I and
II that could be postponed for several months until competitive awards
could be made, and determined what level of effort would be necessary to
support the remaining urgent and essential tasks; work at this level of
effort would be accomplished through extending the contracts of ALM and
ISI. On December 30, the Navy published new CBD notices stating the
Navy's intent to increase by a "minimal amount" the ongoing level of
effort in the contracts of ALM and ISI in order to provide for the
continuation of essential services until competitive awards of follow-on
services were made. Shortly after publication of this notice,
Cerberonics protested to our Office.
Cerberonics contends that the December 30 notices are a disguised
attempted by the Navy to meet substantially the same needs that the
agency contemplated in the canceled October 23 notices and at the same
time avoid the express prohibition in the Competition in Contracting Act
of 1984 (CICA), 10 U.S.C. Sec. 2304(f)(5)(A) (Supp. III 1985), against
making noncompetitive awards on urgency grounds because of a failure to
conduct proper advance procurement planning. Cerberonics alleges that
the justifications supporting the interim extensions of the ALM and ISI
contracts show that the Navy has gone substantially beyond providing for
the performance of only critical services. Cerberonics points out in
this regard that the justifications show that the extensions will
provide, over a period of only a few months, an additional level of
effort of 74 manyears for ALM and an additional 112 manyears for ISI,
nearly the same levels of effort that these two companies had been
providing over a 1-year period. Cerberonics further points out that the
additional work is worth $4 million and $6 million for ALM and ISI,
respectively. Cerberonics estimates the critical effort for the two
contracts at only one-third of the manyears being added to the
contracts. Cerberonics also asserts that there are large areas of
overlap in the work to be performed under the three lots, and that, as
the Lot III contractor, it is fully capable of performing much of the
work covered in the sole-source extensions of the Lot I and II
contracts.
While, as a general rule, procurements must be conducted on a
competitive basis, noncompetitive awards are permitted in certain
circumstances. In this regard, sole-source acquisitions may be
authorized where only one known source can meet the agency's actual
needs within the required time. 10 U.S.C. Sec. 2304(c); WSI Corp.,
B-220025, Dec. 4, 1985, 85-2 C.P.D. P 626. We also have held that the
award of a contract extension on a sole-source basis is justified where
ongoing, necessary services otherwise would be interrupted and only the
incumbent can meet the government's needs within the required timeframe.
Resource Consultants, Inc., B-221860, Mar. 27, 1986, 86-1 C.P.D. P
296. We find this standard met here.
It is sufficiently clear from the record that the ALM and ISI
contracts were extended solely to avoid disruption to critical on-going
work. The work is for objective engineering analyses to meet existing
delivery requirements under foreign military sales of aircraft and
weapons systems; to assess on-going support efforts in integrating
certain new aircraft and airborne systems into the operation of the
fleet; and to resolve critical support problems relating to the safety
and operational readiness of avionics systems in some of the Navy's
existing aircraft. The Navy states that, contrary to Cerberonics'
argument, these engineering services essentially involve direct hardware
system logistics support, and thus do not overlap the "indirect or
program planning support" services that Cerberonics has provided under
Lot III.
Even assuming that Cerberonics could perform some of the engineering
support work covered by the extensions, the record clearly shows that it
would take the company some time to become familiar with the details of
the work; Cerberonics itself concedes that there would be a 3-week to
1-month learning curve in order for it to understand fully what
performance efforts would be required. Further, the Navy indicates
that, because the quality of the engineering and technical advice is the
most important element in performing this work, if Cerberonics were to
do the interim work it would take the Navy a significant amount of
additional time to review the qualifications of all of the key personnel
Cerberonics would substitute for ALM's and ISI's key personnel. We
think the Navy reasonably determined that this gap in critical services
would be unacceptable and that, all factors considered, only ALM and
ISI, and not Cerberonics, could perform the critical logistics support
services on Lots I and II within the interim 4-month timeframe.
Cerberonics'statistical argument that the interim work must exceed
critical needs because the new level of effort is nearly identical to
the previous 1-year effort is unpersuasive. The level of effort
estimates are simply ceilings on the amount of work to be performed, not
statements of the amount or type of work that actually will be performed
during the interim period. As for whether the extensions are limited to
critical work, the Navy has provided us with detailed statements as to
the nature of the work and why uninterrupted performance is critical to
the fleet. The Navy states, for example, that the F-18 aircraft has
severe landing gear problems which must be resolved under the Lot II
contract to permit continued operation of the aircraft during carrier
operations in early 1987. Cerberonics has furnished nothing which would
lead us to question the critical nature of this work.
We also do not agree with Cerberonics that the contract extensions
were necessitated by the Navy's failure to conduct advance planning as
contemplated by CICA. The Navy began identifying its long-term fleet
support services requirements, and preparing a consolidated acquisition
plan for logistics support services, in 1985. The plan was restructured
throughout 1986 to reflect certain technical changes in the performance
tasks under the three lots, resulting in 12 contract competitions
(consolidated from an initially planned 20) anticipated during 1987. At
the same time, major policy decisions were made by the Secretary of the
Navy's office on cost savings that could be realized through a more
efficient fleet support operation. As a result, the Navy decided to
implement a core logistics support capability in-house.
Therefore, while the Navy's planning efforts ultimately fell short of
enabling the Navy to initiate a new procurement coinciding with the
completion of the ALM and ISI contracts, it is clear that the Navy took
substantial action in attempting to conduct a timely competitive
procurement. We do not consider the Navy's extension of the contracts
pending a competitive procurement to have been based on a lack of
advance planning.
Cerberonics' protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: United States Elevator Corp.
File: B-225625
Date: April 13, 1987
1. Determination of whether to cancel a solicitation is primarily
within the discretion of the contracting agency and will not be
overturned absent clear evidence of abuse of discretion.
2. Agency reasonably determined that a compelling reason existed for
canceling a solicitation where the specifications were ambiguous with
respect to the amount of work which was required and the specifications
were disparately interpreted by the bidders.
3. In determining whether an agency properly canceled a solicitation,
the question is whether the agency had a reasonable basis for its
determination under the circumstances at the time it was made, not
whether the correct reason was set forth at that time.
United States Elevator Corp. (USEC) protests the cancellation of
invitation for bids (IFB) No. DACW57-87-B-0001, by the Department of the
Army. USEC contends that the Army contracting officer improperly
concluded that the IFB specifications were ambiguous and, therefore,
canceled the solicitation, rather than finding that the two low bids
were nonresponsive because of the bidders' misinterpretation of the IFB
requirements and making award to it as the low responsive bidder.
We find the protest without merit.
The IFB called for bids for 9 months of maintenance services for 23
elevators and escalators at Bonneville Lock and Dam, Washington. The
bid schedule included three bid items. One award was to be made for all
of the work. There were 23 listed subitems under the first item, each
consisting of monthly maintenance charges for separately specified
elevator and escalator units. Bid items 0002 and 0003 were listed on
the bid schedule as follows:
determined necessary LS XXXXX $20,000 by the contractor and
approved by the COR.
"0003 Repair and replacement NOT TO EXCEED parts as determined
neces- LS XXXXX $10,000 sary by the contractor and approved by the
COR. $
** NOTE: Amounts for Items 0002
TOTAL $ "
The IFB provisions describing the work to be performed require, in
addition to routine maintenance for listed elevator and escalator parts,
that, if the condition of the equipment warrants, the contractor shall
repair or replace these same listed parts. In addition, with respect to
such repair and replacement parts, including labor, prior COR approval
is required for parts whose total cost plus labor exceeds $500, and
invoices and signed receipts for reimbursement of such purchases are
required to be submitted along with regular monthly payment invoices.
The contractor is entitled to reimbursement for the actual cost of these
items.
Four bids were received as follows:
"Bidder Total Bid Bid Item Bid Item Bid Item
0001 0002 0003
Schindler $ 49,231.82 $38,231.82 $ 7,500 $3,500
Montgomery 50,373.00 27,873.00 15,000 7,500
USEC 55,812.00 25,812.00 20,000 10,000
Otis 106,140.00 76,140.00 20,000 10,000"
After reviewing these bids, the contracting officer concluded that
the IFB schedule was ambiguous with respect to the instructions for
pricing bid items 0002 and 0003, and determined that cancellation was
required. Subsequently, the Army issued an amended solicitation
deleting the blank dollar lines under items 0002 and 0003, making it
clear that these items required pricing of $20,000, and $10,000,
respectively. The Army suhsequently canceled the solicitation because
the contracting officer determined that it contained no specifications
to inform bidders what to offer under bid items 0002 and 0003 for major
repairs and repair and replacement parts, and contained no standard for
the government to evaluate what bidders offered to provide under these
bid items. Both canceled solicitations contained the identical
specifications. The contracting officer determined that professional
inspection would be obtained to determine what repairs to the elevators
and escalators are actually required, and that only the repairs
specifically identified by this inspection would be procured.
Initially, the Army contends that USEC is not an "interested party"
eligible to challenge the cancellation under our Bid Protest
Regulations, 4 C.F.R. Sec. 21.1 (a) (1986), because USEC is the third
low offeror and, thus, would not be in line for award if its protest
were upheld. However, USEC is protesting that the specifications were
not ambiguous, and under the interpretation propounded by USEC the two
lower bids are, arguably, nonresponsive. Thus, USEC is an interested
party under our Regulations since, if it were to prevail in the protest,
it would be in line for award.
The Federal Acquisition Regulation (FAR) permits cancellation of an
IFB after bid opening only when there is a compelling reason. 48 C.F.R.
Sec. 14.404-1 (a) (1986). The regulation provides that inadequate or
ambiguous specifications cited in the IFB may constitute such a
compelling reason. FAR, 48 C.F.R. Sec. 14.404-1 (c) (1). Contracting
officials have broad discretion to determine whether or not appropriate
circumstances for cancellation exist, and our review is limited to
considering the reasonableness of the exercise of that discretion.
Professional Carpet Service, B-212442; B-212442.2, Oct. 24, 1983, 83-2
C.P.D. P 483. Our Office generally regards cancellation after opening
to be appropriate when an award under the ostensibly deficient
solicitation would not serve the actual minimum needs of the government
or when other bidders would be prejudiced by such an award. Dyneteria,
Inc., B-211525.2, Oct. 31, 1984, 84-2 C.P.D. P 484. Thus, the
possibility of prejudice to bidders may provide a sufficient basis to
cancel, where the description of work is sufficiently ambiguous that it
is possible that firms had materially different understandings of the
work involved. A to Z Typewriter Co.--Reconsideration, B-218281.2, Apr.
18, 1985, 85-1 C.P.D. P 404.
An ambiguity exists if a specification is subject to more than one
reasonable interpretation when read in the context of the solicitation
as a whole. Energy Maintenance Corp., B-223328, Aug. 27, 1986, 86-2
C.P.D. P 34. USEC contends that in light of the IFB requirement to
perform all the required replacement and repair on a cost reimbursement
basis, the items 0002 and 0003 lines stating "not to exceed" amounts of
$20,000 and $10,000 must indicate that bidders are required to perform
work up to these amounts and must include this $30,000 total in their
bids in order to be responsive to this requirement. In support of this
interpretation, USEC argues that language in the predecessor
solicitation for the same work, which was awarded to Montgomery, is
substantially identical, and was interpreted by the Army to require
inclusion in the bid of the full amounts listed in the solicitation's
"not to exceed" lines.
USEC's argument in this respect actually provides good evidence of
why the solicitation at issue is ambiguous. The prior solicitation
contained only the "not to exceed" lines with dollar amounts inserted,
not the blank dollar line for these items, and the solicitation required
that the "not to exceed" amounts be included in the bid total. It is
precisely the addition of the blank dollar amount lines after the "not
to exceed" lines which reasonably suggests an interpretation--such as
was apparently made by Schindler and Montgomery--that a bidder could
include any amount less than the "not to exceed" number in its total
bid.
In this respect, the fact that these two bidders so interpreted the
language is evidence that bidders were misled as to the actual IFB
requirement, and is an indication of the ambiguity of the requirement,
which warrants the cancellation. Emerald Maintenance, Inc., B-219453.2,
Dec. 10, 1985, 85-2 C.P.D. P 641.
Moreover, as the Army argues, the stated basis for cancellation of
the resolicitation is equally applicable to the solicitation at issue,
and is proper because the IFB failed to provide specifications to
describe the work to be performed under items 0002 and 0003, and failed
to provide a standard to evaluate the bids, prejudicing both the
interests of the government and the bidders. Power Equipment, Inc.,
B-213428.3, Oct. 22, 1984, 84-2 C.P.D. P 427. USEC does not dispute
that both solicitations were deficient in this same regard, nor does it
question the validity of this basis for cancellation. Rather, USEC
posits that since this rationale pertains only to the Army's expressed
basis for the cancellation of the resolicitation, it is irrelevant to
the original cancellation and should not be considered by our Office.
This assumption is incorrect.
In reviewing an agency decision to cancel a solicitation, our Office
will consider whether the agency's action is supported by a reasonable
basis under circumstances as they existed, not merely whether the basis
which the agency advanced at the time it took the action was reasonable,
or whether this basis was supplied at the time the determination was
made. United States District Court for the District of Columbia, 58
Comp. Gen. 451 (1979), 79-1 C.P.D. P 301; Tri-Com, Inc., B-214864,
June 14, 1984, 84-1 C.P.D. P 643; Tosco Corp., B-187776, May 10, 1977,
77-1 C.P.D. P 329.
Finally, USEC's objection that the Army disclosed all of the bids
when it provided notice of the cancellation is irrelevant since this was
a sealed bid procurement under which the bids are a matter of public
record, and bid abstracts are required to be made available for public
inspection. FAR, 48 C.F.R. Sec. 14.403(b).
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Satellite Services, Inc.
File: B-225624
Date: March 19, 1987
Contracting agency may properly cancel a solicitation after bid
opening where funds may not be available for the option years because of
a congressional appropriations restriction, and the competition,
involving a cost comparison under Office of Management and Budget
Circular A-76, was conducted on the basis of basic and option years
requirements.
Satellite Services, Inc. (SSI) protests the cancellation of
invitation for bids (IFB) No. F04612-86-B-0027, issued by Mather Air
Force Sase, California. SSI contends that the Air Force's decision to
cancel the solicitation 2 months after bid opening is improper because
there is no compelling reason to reject all bids. SSI requests
reinstatement of the solicitation and also seeks reimbursement of the
costs of filing and pursuing its protest, including attorney's fees. We
deny the protest and the claim.
The solicitation was issued on June 9, 1986, and, as amended, sought
bids to provide maintenance at a golf course for a 7-month basic period
(March 1 to September 30, 1987) with 2 option years (fiscal years 1988
and 1989). Award was to be based on the total price for the basic
period and the option years. The solicitation also noted that bids were
being solicited as part of an Office of Management and Budget Circular
A-76 cost comparison. Further, the agency contemplated funding the
contract from appropriated funds (75 percent of the total funding) and
the remainder from nonappropriated funds.
After the October 10, 1986 bid opening, SSI was determined to be the
low responsive bidder. The following is an abstract of the cost
comparison results:
I II III
(basic) (option) (option) Total
In-house $210,889 $348,339 $350,356 $909,584
SSI $236,774 $272,608 $210,850 $720,232
Thus, while SSI was low for the total contract period, SSI was not
low for the basic period alone. However, under the solicitation's
evaluation scheme, SSI was entitled to award since the award was to be
based on the total price for the basic period and the option years.
During October 1986, the contracting officer received a message from
Air Force Headquarters indicating that Congress had passed an
appropriations act (Pub. L. No. 99-591, Sec. 9102, 100 Stat. 3341,
3341-118 (1986)), which provided that " a fter September 30, 1987, no
appropriated funds may be used to support revenue generating Morale,
Welfare and Recreation activities located in large metropolitan
areas..." The Air Force states that these activities include golf
courses and that an Air Force Task Group has been established to study
the impact and applicability of these funding restrictions to various
bases and activities. Because of the uncertainties concerning the
funding of the option years (fiscal years 1988 and 1989) for this
procurement, the Air Force canceled the solicitation as "clearly in the
government's interest." See Federal Acquisition Regulation (FAR), 48
C.F.R. Sec. 14.404-1 (c) (9) (1986).
SSI contends that the Air Force's cancellation was arbitrary and
capricious. SSI argues that funding uncertaintites were already present
in the solicitation as issued since the solicitation provided that " f
unds are not presently available for performance under this contract
beyond 87 Sept. 30 and the Government's obligation for performance of
this contract beyond that date is contingent upon the availability of
appropriated funds." Moreover, according to SSI, the 2 option periods
could only be exercised by the Air Force upon determining that funds are
available, that the requirements still exist and that exercise of the
options is the most advantageous method of fulfilling the government's
needs so that SSI was not entitled to expect an award beyond the basic
term in any event. Finally, SSI complains about a 2 month delay in
canceling the solicitation and suggests that it is at least entitled to
award of the contract for the basic period since the cost comparisons
are valid regardless of the ultimate source of funds.
Cancellation of a solicitation after bid opening and the exposure of
bids is not permitted unless a cogent and compelling reason for
cancellation exists. The determination as to whether such a reason
exists is, however, an administrative one to which we will not object
unless the protester can demonstrate that the decision was arbitrary,
capricious, or not supported by substantial evidence. McGregor Printing
Corp., B-207084 et al., Sept. 20, 1982, 82-2 CPD P 240.
Here, depending on the determination of the Air Force Task Group of
the applicability of the funding restrictions to Mather Air Force Base,
appropriated funds may not ever be available for the option periods of
this proposed contract. Since the competition was conducted on the
basis of evaluating both the basic and the option periods, we think that
this potential lack of funds for the option years, by itself, provides a
proper basis to cancel the solicitation despite the standard language in
the solicitation about funding unavailability which merely reflects the
fiscal year funding cycle of the government. Moreover, as to SSI's
suggestion that it be awarded the contract for the basic period, we note
that SSI was not low in the A-76 cost comparison for the basic period
and the Air Force states that conversion costs would not make award on
the basic period alone economically feasible. We therefore find no
merit in the protest.
Concerning SSI's claim for costs, our regulations provide for the
recovery of costs only where a protest is found to have merit. 4 C.F.R.
Sec. 21.6(d) (1986). Since we deny the protest, there is no basis upon
which we may grant the protester's claim for costs. See Cellular
Products Service, Inc.--Request for Reconsideration, B-222614.2, Aug.
18, 1986, 86-2 CPD P 196.
The protest and claim are denied.
Harry R. Van Cleve
General Counsel
Matter of: Service Engineering Company
File: B-225623
Date: April 28, 1987
Protest of alleged failure by contracting agency to comply with
regulatory requirements concerning the handling of a protest challenging
a small business certificatiton is dismissed since, in light of a
determination by the Small Business Administration that the certifying
firm is indeed a small business concern for this procurement, protester
was not prejudiced by the alleged procedural deficiencies and thus no
useful purpose would be served by consideration of the protest.
Service Engineering Company protests the award of a contract to
Northwest Marine Iron Works by the Navy's Military Sealift Command,
Pacific, under request for proposals (RFP) No. N62383-87-R-0005. We
dismiss the protest.
The agency issued the RFP, which was for repairs to USNS OBSERVATION
ISLAND, as a total small business set-aside. Northwest Marine certified
in its initial proposal dated October 27, 1986, that it was a small
business concern under the size standard applicable to the solicitation.
Following its receipt and evaluation of best and final offers, the
agency selected Northwest Marine for award and so notified the
protester. The protester received the agency's notice of the proposed
award on December 22, and on December 23 filed a protest with the agency
challenging Northwest's small business certification.
The agency forwarded the size status protest to the Small Business
Administration (SSA) for resolution. In this connection, the Federal
Acquisition Regulation (FAR), 48 C.F.R. Sec. 19.302(c) (1) (1986),
provides that a contracting officer who receives a protest challenging
an offeror's small business certification promptly must forward the
protest to the SBA Regional Office for the geographical area where the
principal office of the certifying firm is located. The SBA received
the size status protest (which the Navy reports it sent to SBA on
December 23 by commercial overnight courier) on December 29. 1/ The FAR
provides further that the contracting officer may not award a contract
until either SBA has made a size determination or 10 business days have
elapsed from SBA's receipt of the protest, whichever is earlier, unless
the contracting officer determines in writing that an award must be made
to protect the public interest. FAR, Sec. 19.302(h) (1). Here, the
contracting officer made such a determination on December 29 and awarded
the contract to Northwest Marine on December 30.
The grounds for Service Engineering's protest to this Office are that
the agency improperly delayed forwarding the firm's size status protest
to SBA, that there was no factual or legal basis for the agency's
determination that an award prior to SBA's resolution of that protest
was in the public interest, that the Navy did not consult with SBA prior
to awarding the contract, and that the Navy purposely delayed notifying
both the protester and SBA of the award to Northwest. The protester
also complains that the agency incorrectly informed SBA that Northwest
had certified that it was a small business concern as of December 15,
rather than October 27. When SBA discovered the error, says the
protester, it was forced to grant Northwest an extension of 2 additional
days for submission of its response to the size protest.
In our view, no useful purpose would be served by our consideration
of this protest. Basically, the protester is complaining that it was
prejudiced by the contracting officer's alleged failure to comply with
the regulatory requirements for handling a size status protest. While
such failures may operate to prejudice a protester should the SBA
ultimately determine that the certifying firm was not a small business
concern, see, e.g., Consolidated Construction, Inc., B-219017.2, Nov. 7,
1985, 85-2 CPD P 529, where the SBA determines that the certifying firm
is small for purposes of a particular procurement, a protest to this
Office alleging procedural deficiencies by the contracting agency in
connection with the size status protest will be dismissed. See
Eterna-Line Corp. B-211073.2, Apr. 15, 1983, 83-1 CPD P 418. In this
case SBA determined on January 16, 1987, that Northwest is indeed a
small business for this procurement. Such determinations are conclusive
with respect to size status issues. 2/ 15 U.S.C. Sec. 637(b) (6) (1982);
Allied Sales and Engineering, Inc., B-224346, June 26, 1986, 86-2 CPD P
13.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
1/ There has been no explanation of why SBA's records do not show
receipt of the protest until December 29. We note, however, that the
period from December 23 to December 29 included two federal holidays,
one weekend, and Christmas Eve.
2/ Service Engineering Company has appealed the determination to
SBA's Office of Hearings and Appeals pursuant to 13 C.F.R. Sec. 121.11
(1986). The SBA's decision on the appeal will not apply to this
procurement. FAR, Sec. 19.302(i).
Matter of: Automated Datatron, Inc.
File: B-225621.5
Date: October 27, 1987
General Accounting Office will not question a contracting officer's
determination that the low bidder is not responsible where the
determination is reasonably based on the bidder's performance record.
Automated Datatron, Inc. (ADI), protests the award of a contract to
Infoconversion, a division of Grumman Data Information Services, Inc.,
under invitation for bids (IFB) No. D24-S, issued by the United States
Government Printing Office (GPO) for data capture, digital composition
and micropublishing of Department of the Army publications. ADI
contends that the contracting officer acted in bad faith in finding ADI
nonresponsible and rejecting the firm's low bid. ADI argues that the
contracting officer was motivated, in large part, by the fact that ADI
had filed a protest in our Office of the issuance of an earlier version
of the solicitation, which the firm argued unduly restricted
competition, and which GPO then decided to cancel. 1/
We deny the protest.
The IFB contemplated the award of a separate requirements contract in
each of two categories. The first category was for the production of
microfiche, including diazo duplicates (which are produced for
distribution purposes), from source documents such as bound books. The
protested contract is for the second category, which involves the
production of graphics quality computer output microfiche, scanning of
artwork, duplication using silver and diazo film, packing and
distribution.
ADI contends that the contracting officer predetermined not to award
the contract to ADI, as evidenced by the fact that the nonresponsibility
finding was made prior to the preaward survey, which ADI maintains
merely was used to buttress the finding. ADI also contends that the
nonresponsibility determination was improper because it was based on
erroneous rejections of print orders under GPO's contract with ADI for
Program D-154S, which is similar to the protested contract. ADI admits
that from August of 1986 until July of 1987, an average of 10 percent of
all orders under that contract were late, but maintains that, with the
correction of equipment problems, its average percentage of late
deliveries was only 5 percent from May until early July.
GPO responds that the final determination of ADI's nonresponsibility
was made after a review of the preaward survey report (undertaken upon
advice of GPO counsel), which recommended against award to ADI based on
ADI's current poor quality assurance capability, poor performance, and
inability to meet the required delivery schedule on Program D-154S. The
preaward survey report indicated that ADI had an overall quality
rejection rate of 12 percent for the previous 12 months, and GPO states
that the survey team reinspected specific orders ADI had identified as
having been rejected improperly and found that the rejections had been
proper. In order to assess ADI's current performance capability
independently, GPO states, the survey team randomly selected five print
orders and inspected them in accordance with MIL-STD-105D (which is the
standard applicable to both Program D-154S and the protested contract)
and found that the orders were rejectable under the standard. Finally,
GPO states ADI failed to explain its failure to timely re-manufacture
and re-deliver previously rejected print orders.
The determination of a prospective contractor's responsibility is the
duty of the contracting officer, who is vested with a wide degree of
discretion and business judgment. We therefore will not question a
nonresponsibility determination unless the protester shows bad faith on
the part of contracting officials or that the determination lacks a
reasonable basis. Becker and Schwindenhammer, GmbH, B-225396, Mar. 2,
1987, 87-1 C.P.D. P 235.
Although the record confirms ADI's contention that an initial
nonresponsibility determination was reached prior to the preaward
survey, the record also is clear that it was not until after the survey,
and a subsequent finding of nonresponsibility by yet another contracting
officer, that ADI's bid actually was rejected. In addition to
referencing the survey findings as summarized above, this second
determination specifies that ADI was awarded 1,888 print orders from
April through June and that 13.6 percent of the orders were delivered
late; that ADI was sent multiple cure notices for these late
deliveries; that GPO's Quality Assurance Section rejected 800 print
orders in whole or in part within the 12-week period prior to the
nonresponsibility determination on July 8; that 272 of the 800 rejected
print orders remained uncorrected as of that date; that the contractor
had a long history of poor contract compliance; and that ADI was
defaulted on contracts for programs C90-S and C151-S within the 7 months
prior to the determination for continuing failure to comply with
delivery and quality assurance requirements.
Under the circumstances, there is no basis for ADI's contention that
GPO has acted in bad faith in finding the firm nonresponsible. On the
contrary, it appears that GPO was conscientious in its efforts to assure
that the initial nonresponsibility determination was proper by requiring
a preaward survey and a second responsibility determination. Moreover,
even if GPO did incorrectly reject some print orders, we think the late
deliveries and other defects in ADI's contract performance that are
evident in the record provided a reasonable basis for the
nonresponsibility determination. Firm Reis GmbH, B-224544, et al., Jan.
20, 1987, 87-1 C.P.D. P 72.
The protest is denied.
James F. Hinchman
General Counsel
1/ We denied Grumman's protest of the cancellation in our decision in
Grumman Corp., B-225621.2, et al., May 20, 1987, 87-1 C.P.D. P 528,
aff'd, Grumman Corp.--Reconsideration, B-225621.4, July 15, 1987, 87-2
C.P.D. P 46.
Matter of: Grumman Corporation--Reconsideration
File: B-225621.4
Date: July 15, 1987
Decision denying protest of cancellation of solicitation after bid
opening, where contracting officer determined that cancellation and
resolicitation would increase competition and was in the best interest
of the government, is affirmed because protester has not shown that the
decision was based on any error of fact or law.
Grumman Corporation requests that we reconsider our decision in
Grumman Corp., B-225621.2 et al., May 20, 1987, 87-1 C.P.D. P , in which
we denied the company's protest of the cancellation after bid opening of
invitation for bids (IFB) No. D-24-S, issued by the United States
Government Printing Office (GPO) for data capture, digital composition
and micropublishing of Department of the Army publications. We also
denied, in our decision, Grumman's protest of the reissuance of the IFB
and any contract award based on the resolicitation. We affirm the
decision. The IFB contemplated the award of a separate requirements
contract in each of two categories. Category 1 was for the production
of microfiche, including diazo duplicates (which are produced for
distribution purposes), from source documents such as bound books.
Category 2 also was for microfiche, including diazo duplicates, but
produced from digital data, generally in tape form. Category 2
required, as the initial (front-end) part of the process, the
composition, reformatting and coding of the data, which was supplied by
the Army. The IFB also required, as part of the responsibility
determination, that bidders take a preaward test related to the
front-end work. The solicitation allowed subcontracting of the
production of diazo duplicates and packaging but not the front-end work.
Automated Datatron, Inc. (ADI), had protested to our Office that the
preaward test and the restriction on subcontracting the front-end work
unduly restricted competition because they prevented bidders that could
not pass the test from competing. Based upon the advice of GPO legal
counsel that the solicitation should be reissued to allow subcontracting
either the front-end work or the production of diazo duplicates in
category 2, the contracting officer canceled the IFB, after bids had
been opened, in order to generate more competition. (Category 1 was
canceled for a reason unrelated to this protest.) Grumman, the low
bidder for the category 2 work, protested that there were no restrictive
provisions compelling cancellation of the IFB; that the resolicitation
created the potential for an auction and would be prejudicial to the
competitive system; and that the contracting officer only canceled the
IFB because of the likelihood that ADI's protest would be sustained by
our Office.
We denied the protest because the Federal Acquisition Regulation
(FAR), 48 C.F.R. Sec. 14.404-1(c) (9) (1986), permits cancellation where
it is clearly in the government's interest, and we have recognized that
a contracting officer's desire to obtain enhanced competition by
relaxing a material specification constitutes a valid reason under that
standard. Additionally, we noted that where cancellation is in accord
with governing legal requirements, the agency has not created an
impermissible auction.
Grumman, in its reconsideration request, contends that the front-end
effort is substantial and requires a high degree of technical skill,
expertise and equipment not possessed by companies like ADI, a point
Grumman suggests we did not fully recognize in reaching our decision.
Grumman basically argues that to insure the government's needs are met
properly, the competition for category 2 work should be limited to the
two firms that are capable of performing front-end work--Grumman and
Amtec Information (the only other category 2 bidder under the canceled
IFB)--and that only one contractor should perform all the category 2
work. In support of its position Grumman has provided a December 1,
1986, Army memorandum to GPO, in which the Army requests that there be
no subcontracting of the production of diazo duplicates.
Grumman's arguments do not persuade us that our decision was wrong.
The contracting agency has the primary responsibility for determining
its minimum needs and the method of accommodating them. See American
Science and Engineering, Inc., B-225161.2, Mar. 5, 1987, 87-1 C.P.D. P
252. Here, notwithstanding the Army's December of 1986 indication to
GPO, the latter determined that consistent with the government's needs,
the front-end work was segregable and could be subcontracted, thereby
allowing bidders who did not possess the expertise required by the
preaward test to compete for the category 2 work. The record does not
include any further complaint or rebuttal by the Army, and Grumman's
disagreement with GPO regarding how to insure the government's needs are
fulfilled does not establish that GPO's determination to allow the
subcontracting of front-end work was unreasonable. See T-L-C Systems,
B-223136, Sept. 15, 1986, 86-2 C.P.D. P 298.
Grumman also contends that the results of the resolicitation
establish that the cancellation of the IFB was improper, since there was
no increase in competition for category 2 work. Only Grumman and Amtec
bid on that work in response to the initial solicitation; the only
bidders under the resolicitation were Grumman and ADI, with ADI
proposing Amtec as its subcontractor.
The fact that other firms chose not to compete for category 2
requirements does not establish that GPO was wrong in opening up
competition. The three firms that bid on category 1 diazo duplicate
production work and the 35 other firms that received IFB's were
potential bidders under category 2, and we do not see how GPO could have
known prior to resolicitation that these firms would not compete after
the change in the subcontracting restriction. Under the circumstances,
we do not think that GPO acted unreasonably.
Grumman has requested a conference. We will not conduct a conference
on a reconsideration request, however, unless the matter cannot
otherwise be resolved expeditiously. Restorations Unlimited, Inc., et
al.--Reconsideration, B-221862.2, July 11, 1986, 86-2 C.P.D. P 57. We
do not think a conference is warranted in this case.
Since Grumman has not shown that our prior decision was based on any
error of fact or law, the decision is affirmed. 4 C.F.R. Sec. 21.12(a)
(1986).
Harry R. Van Cleve
General Counsel
Matter of: Grumman Corporation
File: B-225621.2, B-225621.3
Date: May 20, 1987
Where solicitation requirement for a preaward test related to a small
and segregable portion of the required work and restriction on
subcontracting that portion of the work prevented potential bidders from
competing, the contracting officer had a compelling reason to cancel the
solicitation after bid opening since it is in the best interest of the
government to enhance competition.
Grumman Corporation protests the cancellation after bid opening of
invitation for bids (IFB) No. D-24-S issued by the United States
Government Printing Office (GPO) for datacapture, digital composition
and micropublishing of Department of the Army publications. Grumman,
the low bidder for part of the contract work, basically contends that
there was no cogent and compelling reason for cancellation of the IFB.
Grumman also protests the reissuance of the IFB and any contract award
based on the resolicitation.
We deny the protests.
The IFB specifications covered the production of microfiche,
including silver masters, 1/ intermediates 2/ and diazo duplicates. 3/
Award of a requirements contract was to be made in each of two
categories. Category 1 was for the production of microfiche, including
diazo duplicates, from source documents (such as bound books), and
packaging and shipping. Category 2 was also for microfiche, including
diazo duplicates, produced from digital data generally in tape form.
This category required composition, reformatting and coding of the
digital data supplied by the Army to yield silver masters; the silver
masters are archival quality microfiche, from which intermediate
microfiche and finally diazo duplicates are produced. The IFB advised
that only the production of diazo duplicates and packaging could be
subcontracted. Also, the IFB required that, as part of the
responsibility determination, bidders in Category 2 would have to take a
preaward test related to the formatting and artwork portion of Category
2 requirements.
The IFB was mailed to 40 prospective bidders on November 17, 1986.
On December 12, Automated Datatron, Inc. (ADI), protested to GPO that
the Category 2 preaward test was highly technical, pertained to a small
portion of the work required under that category, and effectively
precluded firms that could not pass it from competing for the production
portion, which represented, in terms of dollarvalue, 91 percent of the
work under Category 2. ADI requested that the solicitation be canceled
and rewritten to allow firms to compete for individual elements of work
under Category 2.
The contracting officer denied ADI's protest on December 22, stating
that the preaward test was deemed necessary to determine whether a
proposed awardee was capable of performing in accordance with Category 2
specifications. ADI then protested to our Office on January 9, 1987, 3
days before the bid opening date, that Category 2's test was unduly
restrictive of competition. ADI contended that GPO should allow
subcontracting of the small portion of work, involving format
preparation and art work, which required the preaward test.
Bids were opened as scheduled on January 12. Three responsive bids
were received in Category 1, including ADI's second low bid of
$115,476.29. Two responsive bids were received in Category 2. Grumman
submitted the low bid of $1,168,681.15 ($1,145,307.52 with the
application of a 2 percent discount) and Amtec Information submitted a
bid of $2,544,969.12 ($2,494.069.74 with a 2 percent discount).
On February 2, GPO legal counsel advised the contracting officer that
ADI's protest to our Office had merit, and recommended the cancellation
and reissuance of the solicitation to allow subcontracting of either
that portion of the contract up to and including the production of
silver masters (the formatting and artwork portion of Category 2), or
the production of the diazo duplicates, but not both. The contracting
officer, in her February 13 recommendation of cancellation to GPO's
Contract Review Board, stated that the revision would allow ADI to
submit a bid. The contracting officer canceled the IFB upon receiving
the concurrence of the Contract Review Board on February 18.
Grumman thereupon filed this protest contending that the IFB
contained no provision that was restrictive of competition and even if
there was such a provision, it would not constitute a cogent and
compelling reason for cancellation of the solicitation after bid opening
since award under the IFB would meet the government's needs and would
not prejudice other bidders. Additionally, Grumman contends that the
resolicitation creates the potential for an auction and would be
prejudicial to the competitive system. Further, the protester maintains
that the contracting officer only canceled the solicitation because of
her legal counsel's advice that ADI's protest with our Office probably
would be sustained, and that this does not constitute a cogent and
compelling reason for cancellation.
GPO does not dispute the fact that awards under the IFB would in fact
meet its needs. The agency states, however, that it has a statutory
duty to maximize competition and to insure that all interested and
qualified firms have an opportunity to participate in its procurements.
The agency states that the IFB was canceled because the contracting
officer, upon reviewing the bids received and ADI's contentions,
concluded that the specifications were unduly restrictive of
competition.
Although a contracting agency has broad discretion to cancel an
invitation, there must be a compelling reason to do so after bid
opening, because of the potential adverse impact on the competitive
bidding system of cancellation after bid prices have been exposed.
Federal Acquisition Regulation (FAR), 48 C.F.R. Sec. 14.404-1 (a) (1)
(1986); Tapex American Corp., B-224206, Jan. 16, 1987, 87-1 C.P.D. P
63. The fact that a solicitation is defective in some way does not
justify cancellation after bid opening if award under the IFB would meet
the government's actual needs and there is no showing of prejudice to
other bidders. Pacific Coast Utilities Service, Inc., B-220394, Feb.
11, 1986, 86-1 C.P.D. P 150.
FAR, 48 C.F.R. Sec. 14.404-1 (c) (9), however, specifically permits
cancellation, consistent with the compelling-reason standard, where
cancellation is clearly in the government's interest, and we have
recognized that a contracting officer's desire to obtain enhanced
competition by relaxing a material specification constitutes a valid
reason under this FAR standard. Display Sciences, Inc.--Request for
Reconsideration, B-222425.2, Aug. 26, 1986, 86-2 C.P.D P 223.
None of the three bidders under Category 1, including ADI, bid on
Category 2 work. While we can only speculate as to why the other two
bidders did not submit bids, we have no reason to disbelieve ADI's
allegation, with which GPO evidently concurs, that the preaward test
relating to the formatting and artwork portion of Category 2
requirements and the restriction on subcontracting that portion of the
work prevented bidders without that expert capability from competing for
most of the work under the IFB. 4/ In view of the statutory mandate in
the Competition in Contracting Act, 41 U.S.C. Sec. 253(a) (1) (A) (Supp.
III 1985), that contracting agencies obtain full and open competition,
and the fact that enhancing competition is consistent with the
compellingreason standard, we find that the contracting officer's
determination to cancel the solicitation was proper. Agro Construction
and Supply Co., Inc., 65 Comp. Gen. 470 (1986), 86-1 C.P.D. P 352. The
fact that the contracting officer's determination may have been based in
part on legal counsel's advice that ADI's protest had merit and was
likely to be sustained by our Office does not detract from the propriety
of the determination because implicit in the legal counsel's advice is
his conclusion that the IFB was in fact unduly restrictive of
competition.
With regard to Grumman's contention that resolicitation creates the
potential for an auction, we have recognized that where, as here,
cancellation is in accord with governing legal requirements, the agency
has not created an impermissible auction. Emerson Electric Co.,
B-221827.2, June 4, 1986, 86-1 C.P.D. P 521.
The protests are denied.
Harry R. Van Cleve
General Counsel
1/ Silver masters are first generation silver halide camera master
microfiche, the original negatives of source documents or tapes.
2/ Intermediate microfiche are duplicates of the silver master
microfiche that are used to produce diazo microfiche (third generation
duplicates).
3/ Diazo duplicates are third generation striped duplicate diazo
microfiche, produced for distribution purposes.
4/ Based on the three bids received, ranging from $78,427.54 to
$131,284.71, it is clear that the dollar value of the work required
under Category 1 was much smaller than the dollar value of the work
under Category 2, where the two bids were $1,168,681.14 and
$2,544,969.12.
Matter of: Gerald Moving & Warehousing Co.
File: B-225618
Date: January 14, 1987
Protest that incorrect wage rates were inciuded in solicitation is
dismissed since the General Accounting Office does not review the
correctness or accuracy of Service Contract Act wage determinations
which are matters within the jurisdiction of the Department of Labor.
Gerald Moving & Warehousing Co. (GM&W) protests that the Air Force
has incorporated an incorrect Service Contract Act wage determination
into invitation for bias No. F11623-86-B0099. The invitation is for a
contract to provide services related to moving of household goods to and
from Scott Air Force Base, and it incorporated a Department of Labor
wage determination quoting wage rates for the St. Louis, Missouri area.
GM&W contends that, since Scott Air Force Base is actually located in
the rural areas just outside of St. Louis, the invitation should
properly include a wage rate determination which is based upon the lower
wages of the rural areas from which employees are likely to be drawn.
We will not consider this matter on its merits. It is our policy not
to review the correctness or accuracy of Department of Labor wage
determinations issued in connection with solicitations subject to the
Service Contract Act. See Rampart Services, Inc.--Reconsideration,
B-220800.2, Nov. 12, 1985, 85-2 CPD P 542. Therefore, a challenge to a
Service Contract Act wage determination should be processed through the
administrative procedures established by the Department of Labor and set
forth in title 29 of the Code of Federal Regulations, rather than
through a bid protest filed in our Office. See Consolidated Marketing
Network, Inc., B-219387, Sept. 3, 1985, 85-2 CPD P 262.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
Matter of: Tower Corporation
File: B-225617
Date: March 23, 1987
1. Contention, not raised until after contract award, that
specifications unduly restrict competition in that they do not permit
consideration of innovative and distinctive offers is untimely under Bid
Protest Regulations.
2. Agencies must adhere to evaluation criteria stated in a
solicitation. When a solicitation contemplates the leasing of only
office and related space, the agency properly evaluates prices for such
space, without considering either the monetary value of hotel and
meeting rooms also included in a protester's proposal or the alleged
cost savings that would result from accepting the proposal.
Tower Corporation protests the General Services Administration's
(GSA) award of a lease (No. 65-08P-12796) to Denver Place Associates for
office space in Denver, Colorado under solicitation for offers No.
86-161. Tower generally contends that GSA, in evaluating proposals,
failed to consider all relevant factors necessary to determine which
offer was most advantageous to the government. We dismiss the protest
in part and deny it in part.
GSA issued solicitation No. 86-161 on August 12, 1986, seeking leased
quarters for the Small Business Administration's (SBA) Region 8 Office.
The SBA currentiy occupies space in Executive Tower, a facility managed
by the protester, Tower Corporation. The lease for this space expires
on March 31, 1987.
The solicitation specifically provided that offers were to be for a
minimum of 8,040 square feet and a maximum of 8,440 square feet of
office and related space, plus 3 inside designated parking spaces,
within certain geographic limits.
The term of the lease was to be 5 years, of which only the first 3
were firm. Occupancy was required by March 20, 1987.
The solicitation also provided that the lease would be awarded to the
offeror whose proposal was "most advantageous to the Government," price
and other factors included in the solicitation considered. 1/ Price
evaluation was to be based on the annual per square foot cost plus the
annualized cost of any items specified in the specifications which were
not included in the rental. Additionally, $.28 per square foot was to
be added to all offers that would require the SBA to move from its
existing leased location.
Based on this formula, GSA determined that Denver Place had submitted
the low offer. Denver's offer was for 8,440 square feet of usable
office space at an annual cost of $90,730. Including the $.28 per
square foot moving cost, Denver's offer corresponded to a price of
$11.03 per square foot. In comparison, Tower's offer was $11.10 per
square foot, based on an annual charge of $91,040 for 8,200 square feet
of space.
On December 11, 1986, Tower filed an agency-level protest challenging
the proposed lease. Generally, Tower argued that GSA had failed to
consider the innovative and distinctive nature of its offer, which
allegedly would have resulted in substantial savings. Tower had
included in its offer, allegedly at no additionai charge to the
government, three guest rooms per month per 1,000 square feet of
occupied space, plus meeting rooms that it asserted were worth $400 a
month. Tower holds existing leases with GSA that similarly include such
facilities, allegedly at no charge to the government. In its protest to
GSA, Tower contended that the annual charge for the lease of only office
and related space would be $74,144, or $9.04 per square foot.
Consequently, Tower concluded, it should have been selected for award as
the offeror whose proposal was "most advantageous to the government."
GSA, by letter dated December 23, 1986, denied this agencylevel
protest. Reiterating what it had previously informed Tower during
negotiations, GSA stated that the government did not need the hotel and
meeting rooms offered, and, accordingly, that it would not consider them
during the evaluation process.
Tower, in its subsequent protest to our Office, initially contends
that the solicitation unduly restricted competition in that it did not
allow GSA to consider innovative and distinctive offers, such as its
own, which wouid have resulted in substantial savings to the government.
Tower continues that the solicitation was inconsistent with the intent
of the Competition in Contracting Act of 1984, 41 U.S.C. Sec. 253a
(Supp. III 1985), that agencies describe their needs as broadly as
possible.
We find this basis of protest untimely. Our Bid Protest Regulations,
4 C.F.R. Sec. 21.2(a)(1) (1986), provide that protests based upon
alleged improprieties in a soiicitation that are apparent before the
closing date for receipt of initial proposals must be filed by that
date. The facilities required, and the basis on which offers to lease
them would be evaluated, were clearly set forth in the solicitation, and
if Tower believed that these should be more broadly described, it should
have protested earlier. Tower, however, first raised this basis of
protest after the award to Denver place. Therefore, we dismiss this
basis of protest.
Tower next raises essentially the same contention that provided the
basis for its agency-level protest. Tower again alleges that GSA
improperly failed to consider during evaluations the substantial savings
to the government directly attributable to the gratuitous inclusion of
hotel and meeting rooms in its proposal. In view of the fair market
value of these additional facilities, Tower states that the actual
annual cost of the office and related space it proposed was considerably
less than the price proposed by the awardee. Tower concludes that its
proposal was thus most advantageous to the government, and therefore it
should have been selected for award.
It is well settled that once offerors are informed of the criteria
against which their proposals will be evaluated, the agency must adhere
to these criteria. Umpqua Research Co., B-199014, Apr. 3, 1981, 81-1
CPD P 254. GSA's solicitation in this case contemplated the leasing of
only office and related space. The agency was thus required to evaluate
proposals strictly in terms of their prices for those facilities, and it
properly did not consider the monetary value of the hotel and meeting
rooms offered by Tower or the alleged savings resulting from this
officer. Additionally, GSA could not, as inferred by Tower, evaluate
its offer for office space exclusive of its offer for hotel and meeting
rooms; Tower's proposal did not break out or allow for independent
consideration of the various facilities.
Under the stated evaluation criteria, Tower's proposal clearly was
not the most advantageous to the government, as its per square foot cost
for office and related space was not low. GSA's rejection of Tower's
offer and the selection of Denver place was thus proper. Moreover, to
the extent that GSA historically may have considered Tower's offer for
hotel and meeting rooms, these past practices do not justify repetition
in the instant case. See Intex Insulating Co., B-216583, Oct. 11, 1984,
84-2 CPD P 401. Accordingly, this basis of protest is denied.
The protest is dismissed in part and denied in part.
Harry R. Van Cleve
General Counsel
1/ The other factors, not at issue here, were, in descending order of
importance, handicapped accessibility and the use of renewable energy in
the offered building. In addition, a preference was to be given to
space in historic buildings.
Matter of: Kardex Systems, Inc.
File: B-225616
Date: March 12, 1987
Issuance of a delivery order to Federals Supply Schedule contractor
who responded to request for quotations (RFQ) by proposing a system
which did not meet literall one of the RFQ's requirements is not
objectionable where contractor's system was functionally equivalent to
system specified and satisfied the government's minimum needs.
Kardex Systems, Inc. protests the Air Force's issuance of a delivery
order to White Machine Company under request for quotations (RFQ) No.
F41800-86-Q-0351, for seven power files. Kardex contends that White's
files did not meet one of the requirements listed in the RFQ. We deny
the protest.
Since the power files are a mandatory Federal Supply Schedule (FSS)
item, the Air Force solicited quotations from FSS contract holders.
White submitted the lowest of the three quotations received; Kardex's
quotation was second low.
The RFQ asked for quotations on "Power files, Kardex P/N 7560110A, or
equal," and listed 12 required characteristics, one of which was an
electronic digital read-out keypad. The power files proposed by White
had a single touch electronic membrane switch keypad rather than an
electronic digital read-out keypad.
Kardex contends that White's membrane switch keypad is not equivalent
to its digital read-out keypad and that by placing an order with White,
the Air Force accepted a lesser product than that specified in the RFQ.
Kardex argues that the order should have been placed with it since it
was the only vendor whose files satisfied all of the solicitation
requirements. If the Air Force's minimum needs had changed, the
protester asserts, it should have been given an opportunity to amend its
quotation.
The Air Force disputes the protester's characterization of White's
membrane switch keypad. The contracting officer determined that White's
membrane switch keypad was the functional equivalent of Kardex's digital
read-out keypad. In the agency's view, both Kardex's digital read-out
keypad and White's membrane switch keypad satisfied the Air Force's
minimum needs.
When vendors respond to a formal solicitation, they must offer what
is specified in the solicitation. Thus, when a request for proposals or
an invitation for bids is issued, vendors are required to respond with
offers that comply with all material provisions of the solicitation. An
offeror's failure to comply with all such provisions renders the bid
nonresponsive or the proposal unacceptable. When quotations are
solicited from FSS vendors, however, the situation is not the same. The
quotations are not offers that can be accepted by the government;
rather, they are informational responses, indicating the equipment the
vendors would propose to meet the agency's requirements and the price of
that equipment and related services, that the government may use as the
basis for issuing a delivery order to an FSS contractor. There is,
therefore, no requirement that the quotation comply precisely with the
terms of an RFQ, since the quotation is not subject to government
acceptance. Spacesaver, B-224339, Aug. 22, 1986, 86-2 CPD P 219.
Here, White responded to the RFQ by proposing units containing its
membrane switch keypad, which was determined to be the functional
equivalent of the Kardex digital readout keypad. The Air Force
concluded that the White unit incorporating this feature satisfied its
minimum needs at a lower price than the files proposed by Kardex. Once
the Air Force concluded that White's lower cost item met its needs, it
was required to place the order with White. See Federal Acquisition
Regulation (FAR), 48 C.F.R. Sec. 8.405-1 (1986). The fact that White
quoted on power files which included a keypad that differed from the
keypad specified in the RFQ did not preclude award since, as indicated,
the RFQ responses were merely informational in nature, and the legal
basis for issuance of the delivery order was White's FSS contract, not
the RFQ or White's RFQ response. Spacesaver, B-224339, supra.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: F.H. Stoltze Land & Lumber Co.-- Request for
Reconsideration
File: B-225614.2
Date: March 19, 1987
Dismissal of original protest, for failure to timely comment on
agency report, is affirmed despite the protester's assertion that it
received the report late (after the due date of the report). The
protester was on notice of its obligation to notify the General
Accounting Office that it had not received the report by the due date,
but failed to do so.
F.H. Stoltze Land & Lumber Co. requests that we reopen our file and
consider on the merits its protest against the United States Forest
Service's decision to reject all bids, including Stoltze's high bid,
under the Upper Bear Gulch timber sale. We dismissed the protest on
February 26, 1987, because Stoltze had not filed comments, or a
statement of continued interest in the protest, within 7 working days
after receipt of the agency report as required by our Bid Protest
Regulations, 4 C.F.R. Sec. 21.3(e) (1986). The regulations provide that
a protester's failure to file comments, a statement requesting that the
protest be decided on the existing record, or a request for the
extension of the period for submitting comments will result in the
dismissal of the protest. After receiving the agency report, this
Office received no communication from Stoltze, until after Stoltze
received our dismissal notice.
We affirm the dismissal.
Stoltze argues its delay in responding to the agency report was
caused by circumstances beyond its control. Stoltze states that it did
not receive the agency report until February 25, 1987, and argues that
its failure to respond timely to the agency report was either because
the Forest Service did not promptly mail its report to Stoltze or
because the United States Postal Service failed to deliver the report
timely. Stoltze thus requests that its protest be reinstated.
We point out that our Bid Protest Regulations clearly state that
after receiving the agency report, a protester must express continued
interest in pursuing the protest or face dismissal of the protest. 4
C.F.R. Sec. 21.3(e). Since our Regulations are published in the Federal
Register (and are codified in the Code of Federal Regulations),
protesters are charged with constructive knowledge of their contents.
International Development Inst., 64 Comp. Gen. 259 (1985), 85-1 C.P.D. P
179. Moreover, when Stoltze's protest was filed we mailed Stoltze a
notice acknowledging its receipt and stated that under 4 C.F.R. Sec.
21.3(e) the protester, within 7 working days of receipt of the agency
report, must submit written comments or advise our Office to decide the
protest on the existing record. The notice included the date the report
was due--in this case, February 13--and also advised the protester to
notify us if the report was not received on time. The acknowledgment
further warned that unless we heard from the protester by the 7th
working day after the report was due, we would close our file.
Thus, Stoltze was on notice that if we did not hear from the firm
within 7 working days of the report due date, the protest would be
dismissed. Although Stoltze argues that its delay in filing comments
was due to either actions of the Forest Service or postal Service, the
fact remains that Stoltze failed to fulfill its obligation to advise us
that it had not received the agency report on the due date. Had Stoltze
promptly advised us of the report's nonreceipt, we would not have
dismissed the protest.
Our procedures are designed to establish effective and equitable
standards both so that parties have a fair opportunity to present their
cases and so that protests can be resolved in a speedy manner. We
require a statement of continued interest in pursuing a protest because
once protesters read the agency report they sometimes change their minds
about the merits of their protests, and thus the requirement for an
expression of continued interest prevents unduly delaying the
procurement process while this Office otherwise would be preparing a
decision. See McGrail Equipment Co.--Reconsideration, B-211302.2, July
21, 1983, 83-2 C.P.D. P 106.
Since Stoltze had the opportunity to express timely continued
interest in the protest, our reopening of the file would be inconsistent
with our purpose of providing a fair opportunity for protesters to have
their objections considered without unduly disrupting the procurement
process. See Bannum Enterprises--Reconsideration, B-221279.2, Feb. 25,
1986, 86-1 C.P.D. P 194.
We affirm the dismissal.
Harry R. Van Cleve
General Counsel
Matter of: Motorola Communications and Electronics, Inc.
File: B-225613
Date: January 27, 1987
1. Requirement in performance work statement that "contractor"
certify technicians' training prior to contract "start date" does not
establish a certification requirement as a precondition to receiving
award.
2. Whether contractor performs contract with staff with required
training and otherwise in accordance with contract requirements concerns
contract administration, which General Accounting Office does not
review.
Motorola Communications and Electronics, Inc. (Motorola) protests
the award of a contract under Department of the Air Force request for
proposals (RFP) No. F41687-87-R0024, to Dailey-Wells Communication
(Dailey-Wells), a small business concern.
We dismiss the protest.
The RFP, issued as a partial small business set-aside, requested
proposals for a contractor to maintain specialized intra-base radios,
and provided a performance work statement (PWS) detailing now the work
was to be accomplished. As part of the PWS, the contractor was required
to certify it would perform with factory-certified technicians, that is,
technicians certified to have completed training made available by the
manufacturer.
Motorola, the radio manufacturer and an offeror under the RFP,
asserts that Dailey-Wells is unable to comply with this requirement and
thus is not eligible for award because its technicians have not received
certified training from Motorola, and also asserts that Dailey-Wells has
falsely certified its ability to comply with the PWS in this regard.
Motorola concludes that it submitted the only acceptable offer and
thus is entitled to the entire contract award. (Motorola, a large
business, asserts that it is eligible for the set-aside portion of the
contract by virtue of its certification that it would subcontract with a
small busines concern.) We disagree.
The PWS in the RFP defines how and by whom the contract work is to be
performed. The RFP terms do not require that all offerors have
certified technicians in their employ but, rather, require only the
"contractor" to satisfy this requirement. Contrary to Motorola's
argument, moreover, the certification provisions require that the
"contractor" establish its quaiifications only prior to the "start
date," the date performance under the contract is to begin, not that all
offerors meet this requirement in their proposals prior to the contract
award date. These qualification provisions thus are part of the
contract performance provisions rather than preconditions to award, and
Dailey-Wells was not required to satisfy these provisions prior to
award. Hettich GmbH and Co., KG, B-224267, Oct. 24, 1986, 86-2 C.P.D. P
451; Accent General, Inc., B-209263, June 7, 1983, 83-1 C.P.D. P 616.
By submitting a proposal that took no exception to the requirements
of the RFP, Dailey-Wells obligated itself to provide personnel
possessing the necessary qualifications, and otherwise to perform in
accordance with the terms of the RFP. Its proposal therefore was
acceptabie for award. Whether Daiiey-Weils actually performs under its
contract with technicians possessing the training required by the RFP
and in accordance with other contract requirements is a matter of
contract administration, which we do not review. Accent General Inc.,
B-209263, supra.
As we have no basis on which to object to the contract award to
Dailey-Wells, it is unnecessary for us to consider Motorola's contention
that it is entitled to the contract award on the small business
set-aside portion of the RFP.
The protest is dismissed.
Robert M. Strong
Deputy Associate
General Counsel
Matter of: Quality Transport Services, Inc.
File: B-225611
Date: March 26, 1987
Where solicitation for moving services does not require that
Interstate Commerce Commission (ICC) authority be held by bidder as a
prerequisite to being found responsible, joint venture does not have to
be found nonresponsible because only one joint venturer has ICC
authority.
Quality Transport Services, Inc., protests the award of any contract
to the joint venture of M.R.W. International, Inc. and Zenith Van and
Storage Company, Inc. (M.R.W./Zenith), under area 2, schedules I and II,
of invitation for bids (IFB) No. DAHC30-87-B-0008, issued by the
Department of the Army. The IFB is for transportation services,
including packing and crating, for the movement of personal property
belonging to Department of Defense personnel. Quality contends that
M.R.W./Zenith does not possess in its own name the operating authority
from the Interstate Commerce Commission (ICC) that Quality believes is
required by the terms of the IFB as a prerequisite to receiving award,
and that award to the joint venture thus would be improper.
We dismiss the protest.
As required by Federal Acquisition Regulation (FAR), 48 C.F.R. Sec.
47.207-1 (a) (1986), where a requirement involves regulated
transportation, the IFB contained the Permits, Authorities, or
Franchises clause set forth in FAR, 48 C.F.R. Sec. 52.247-2 (April
1984), as follows:
"(a) The offeror certifies that the offeror does , does not ,
hold authorization from the Interstate Commerce Commission or
other cognizant regulatory body. If authorization is held, it is
as follows:
(Name of regulatory body)
(Authorization No.)
"(b) The offeror shall furnish to the Government, if requested,
copies of the authorization before moving the material under any
contract awarded. In addition, the offeror shall, at the
offeror's expense, obtain and maintain any permits, franchises,
licenses, and other authorities issued by State and local
governments."
Immediately after bid opening, Quality protested to the contracting
officer that the bid of the M.R.W./Zenith joint venture should be
rejected because while Zenith, one of the joint venturers, possessed ICC
operating authority to perform interstate transportation services,
M.R.W./Zenith, the bidder, did not and thus lacked proper ICC operating
authority. The contracting officer contacted the ICC to obtain
information regarding the proper operating authority for the contract
work, and reportedly was informed that the joint venture had adequate
ICC authority as long as one of the parties of the joint venture had ICC
operating authority to perform interstate transportation services.
Consequently, the contracting officer denied Quality's protest.
Whether a bidder satisfies a general solicitation requirement for
operating rights involves the bidder's responsibility. See Lewis &
Michael, Inc., B-215134, May 23, 1984, 84-1 C.P.D. P 565. Before
awarding the contract, the contracting officer necessarily will have to
find that M.R.W./Zenith is responsible. Our Office does not review
affirmative determinations of responsibility absent a showing of fraud
or bad faith on the part of procuring officials, or an alleged failure
by the agency to apply definitive responsibility criteria, that is,
specific and objective standards established by the agency for measuring
a bidder's ability to perform the contract. Vulcan Engineering Co.,
B-214595, Oct. 12, 1984, 84-2 C.P.D. P 403.
Quality asserts that the ICC operating authority provision is a
definitive responsibility criterion, a prerequisite to finding
M.R.W./Zenith responsible, since the provision asks a bidder to identify
its ICC operating authority by listing the ICC authorization number, and
the FAR required the solicitation to contain the clause. We disagree.
We considered this issue in Joiner Van and Storage Service, Inc.,
B-218438, Apr. 24, 1985, 85-1 C.P.D. P 469, and specifically found that
the FAR, Sec. 52.247-2 clause does not constitute a definitive
responsibility criterion which must be met to qualify for award. The
reason is that, rather than requiring ICC authority, the clause only
requires bidders to indicate whether they hold authorization from the
ICC or other regulatory body and, if so, to provide the authorization
number. Wes concluded that the clause was merely a listing requirement
to provide information for the contracting officer's convenience. We
see no reason for reaching a different conclusion here.
Quality argues that our decision in Joiner is incorrect and thus
should not be followed because it ignores and is inconsistent with our
prior decision in Sillco, Inc., B-188026, Apr. 29, 1977, 77-1 C.P.D. P
296, which Quality interprets as holding that a similar solicitation
provision calling for the listing of ICC operating authority was a
definitive responsibility criterion. The clause in that case, however,
is distinguishable in two material respects. First, whereas FAR, Sec.
52.247-2 calls for a listing of ICC or other regulatory authority,
suggesting no intent to require ICC authority in particular, the
provision in Sillco specified that the bidder list its ICC operating
authority, indicating a more specific requirement for ICC authority.
Second, unlike the provision in Sillco, FAR, Sec. 52.247-2 calls for the
bidder, upon request, to furnish copies of its authorization "before
moving materials under any contract." No language in FAR, Sec. 52.247-2
requires the authorization to be furnished before award. This language
is more indicative of a performance requirement, i.e., a requirement
that needs be met only by the contractor, than a precondition to
receiving the award. See General Offshore Corp., B-224452, Oct. 16,
1986, 86-2 C.P.D. P 437.
While Joiner does not cite Sillco, it does cite Chipman Van &
Storage, Inc., B-188917, Oct. 18, 1977, 77-2 C.P.D. P 299, which in turn
includes a discussion of the ICC's decision in Bud's Movinp & Storage,
Inc., Petition for Declaratory Order, 126 M.C.C. 56 (1977). It was this
ICC decision on which our decision in Sillco was predicated. Thus,
contrary to Quality's assertion, our decision in Joiner did not ignore
the Sillco rationale. Rather, it clearly found the circumstances
distinguishable.
We conclude that FAR, Sec. 52.247-2 is simply a listing requirement,
to aid the contracting officer in determining responsibility, and not a
definitive responsibility criterion. Quality's protest is dismissed.
Robert M. Strong
Deputy Associate
General Counsel
Matter of: Washington Patrol Service, Inc.
File: B-225610; B-225878; B-226411
Date: April 7, 1987
1. Protest contending that the contracting officer erred in finding
the protester's price to be unreasonable is denied where past
procurement history and other factors indicate that the contracting
officer's determination is reasonable.
2. Protest contending that the contracting officer acted in bad faith
is denied since the protester failed to meet its burden of submitting
proof that the contracting officer had a specific and malicious intent
to injure the protester. The standard is not met by allegations that
the contracting officer delayed sending the protester a request for
proposals, that she found the protester's price, which was 33 percent
above that of a nonresponsive bid, to be unreasonable, or by questions
suggesting that certain investigations within the discretion of the
contracting officer should have been made.
Washington Patrol Service, Inc. (WPS) protests related solicitations
for guard services issued by the General Services Administration. The
first, B-225610, is a protest against the rejection of its bid for
service area 9 as unreasonably priced under invitation for bids No.
9PPB-86C-0539. WPS was the sole responsive bid for service area 9 and
the rejection of its bid resulted in the cancellation of the IFB. The
second protest, B-225878, is a protest against the award of an interim
3-month contract to Dean Security Professionals for service area 9 under
request for proposals (RFP) No. 9PPB-87C-0758. The third, B-226411, is
a protest against the issuance of IFB No. 9PPB-87-KS0910, the
resolicitation for guard services for the full term for service area 9.
All of the protests rest on the same theory--that WPS was entitled to
award of a contract for service area 9 under the original IFB because
rejection of its bid as unreasonably priced was improper and made in
"less than good faith."
We deny the protests.
WPS submitted bids under the IFB for service areas 6, 7 and 9, but
was the low bidder only for service area 7. Dean was the low bidder for
service areas 6 and 9. However, Dean's bids were rejected as
nonresponsive for failure to provide the required bid guarantees,
leaving WPS as the apparent low bidder for services areas 6, 7, and 9.
The contracting officer, however, found its bid of $22,417 per month for
service area 9 to be unreasonable and rejected WPS bid.
Because a total of 6 protests were filed before award under the
original IFB, the contracting officer, in order to prevent an
interruption of these essential services when the current contracts
expired on December 31, issued an RFP for interim 3-month contracts for
the same services to begin on January 1, 1987. After the RFP was
issued, however, all protests, other than B-225610 and B-225878, were
dismissed, withdrawn or resolved. The contracting officer thereafter
canceled the RFP for all service areas except for service area 9 and
made awards under the IFB for all service areas except 9. WPS was
awarded a contract for the service areas 6 and 7 requirements. The
contracting officer then made an award to Dean of a 3-month contract
under the RFP for the service area 9 requirements. Protest B-226411 was
filed after the full-term resolicitation was issued.
The issue presented by WPS's protests is whether the contracting
officer properly found WPS's bid price for the service area 9
requirements to be unreasonable. The protests also raise an. issue with
regard to the good faith of the contracting officer.
Before awarding any contract, a contracting officer must determine
that the price at which the contract would be awarded is reasonable.
Federal Acquisition Regulation (FAR), 48 C.F.R. Sec. 14.407-2 (1986).
Our Office will not question a contracting officer's determination in
this regard unless it is unsupported or there is a showing of bad faith
or fraud by the contracting officials. The price reasonableness
determination may be based on a comparison with a government estimate,
past procurement history, the current market conditions or any other
relevant factors. Loral Packaging Inc., B-221341, Apr. 8, 1986, 86-1
CPD P 347. Moreover, the other factors may include comparison with a
nonresponsive bid. Sylvan Service Corp., B-222482, July 22, 1986, 86-2
CPD P 89; Adam Electric Co., Inc., B-207782, Dec. 27, 1982, 82-2 CPD P
576 at 3.
These principles when applied to the facts presented here, provide no
basis for finding the contracting officer's determination that WSP's
price of $22,417 per month for service area 9 under the original IFB to
be unreasonable when compared to Dean's price of $15,100 per month and
the price for the immediate prior contract period ($15,600 per month).
As WPS's price was about 33 percent higher 1/ than Dean's, and the
immediate prior contract price we cannot question her decision that
WPS's price was unreasonably high. The W.H. Smith Hardware Co.,
B-221792, May 9, 1986, 86-1 CPD P 446. With regard to the RFP,
(B-225610), she compared WPS's price of $22,399 and made the award at
$20,000 to Dean. 2/ WPS's RFP price for service area 9 was not found to
be unreasonable for the 3-month period, but it was not low.
We understand WPS's statement that the contracting officer in this
case "has demonstrated far less than good faith and impartial
administration" to mean that the contracting officer acted in bad faith.
In this regard, we point out that the protester has the burden of proof
when alleging bad faith and a showing of bad faith requires proof that
the contracting official had a specific and malicious intent to injure
the protester. Gayston Corp.--Request for Reconsideration, B-223090.2,
July 25, 1986, 86-2 CPD P 115.
WPS has presented no such proof but attributes to bad faith such
ambiguous incidents as its failure to receive the RFP in a timely manner
in spite of repeated requests for it. Howsever, WPS did receive the RFP
and submitted a proposal on time. WPS also attributes to bad faith the
contracting officer's finding that WPS's price for the service-area 9
requirements under the IFB to be unreasonable. As we have stated above,
the contracting officer's determination that WPS's bid was unreasonable
is sufficiently supported by the record. WPS suggests that the
contracting officer's failure to investigate unemployment insurance
rates, security training costs, labor pool demographics and
availability, wage rates, supervisory costs and local tax withholding
requirements reflects shameful conduct. While the contracting officer
might inquire into some of these items we do not agree that she was
required to do so. We think that the contracting officer had enough
information based on the competition and historical data for her to
conclude the price bid by WPS for service area 9 was unreasonable,
without the investigations suggested by WPS.
The protests are denied.
Harry R. Van Cleve
General Counsel
1/ In contrast, WPS's bid for service area 6 was less than 8 percent
higher than Dean's nonresponsive bid.
2/ GSA reports that short term contracts are usually higher priced
than longer term contracts hecause start-up costs have to be recovered
in a short time frame. We have no hasis upon which to disagree.
Matter of: Frequency Engineering Laboratories Corporation
File: B-225606
Date: April 9, 1987
Where the solicitation states that proposed price is the most
important evaluation factor for source selection purposes, but also
clearly provides that technical and management factors, although of
lesser importance, will be thoroughly evaluated as well, there is
nothing improper in the selection of a higher-priced offeror when the
agency reasonably determines that the selected firm's evidenced
technical superiority offsets the price premium associated with its
offer.
Frequency Engineering Laboratories (FEL) protests the award of a
contract to E-Systems, Inc. under request for proposals (RFP) No.
N00039-85-R-0651(Q), issued by the Department of the Navy. The
procurement is for the supply of AN/WSC-3(V) communication sets. FEL
complains that the Navy failed to evaluate the proposals properly in
accordance with the evaluation and source selection criteria set forth
in the solicitation, thereby disregarding the statutory requirement for
full and open competition.
We deny the protest.
The RFP was issued on November 26, 1985, contemplating the award of a
firm-fixed-price contract for a quantity of AN-WSC-3(V) communications
sets, plus options, with a first article testing requirement. The
AN-WSC-3(V) is described by the Navy as the primary Ultra High Frequency
(UHF) communication system aboard Naval vessels.
The RFP's stated evaluation and source selection criteria provided
that the government reserved the right to make an award to other than
the lowest-price offeror and select the proposal determined to be most
advantageous to the government, price and other factors considered.
Offerors were advised that price was more important than the technical
and management factors combined, with management factors being of lesser
importance than technical criteria. Although not disclosed to the
offerors, the Navy assigned weights to the various factors for
evaluation purposes which were consistent with the descriptions given in
the solicitation. Thus, price was weighted at 52 percent, technical at
39 percent, and management at 9 percent.
The RFP provided that each offeror's proposed price would be
evaluated for award purposes on the basis of the total price for all
firm requirements in all program years pius the total price for all
option requirements, with the exception of a few specified optional
items. Offerors were advised that the offeror submitting the proposal
with the lowest total price would be assigned all of the points
aliocated for price, with higher-priced offerors receiving a lesser
number of points in direct proportion to the degree by which their price
exceeded the lowest price. The submission of alternate offers based
upon the government's waiver of first article testing was also expressly
allowed.
Initial proposals were received from five firms, including E-Systems,
which was the incumbent contractor, FEL, and La Pointe Industries, Inc.
1/ La Pointe submitted the lowest-price proposal at appoximately $41
million dollars, and, accordingly, received the full 52 weighted points
allocated to price. FEL's initial price was approximately $44.5 million
and E-System's price was $60.6 million with first article testing, and
$60.3 million with waiver of such testing. The firms were assigned
price points in relation to the percentage by which their prices
exceeded the low price submitted by La Pointe. Accordingly, FEL's price
score was 47.6 and E-Systems' was 27.2 with, and 27.6 without, first
article testing.
The proposals were then evaluated on the basis of the technical and
management factors set forth in the RFP. E-Systems' proposal received
the highest scores, receiving 36.8 out of a possible 39 weighted points
for technical criteria, and 8.4 out of a possible 9.0 points for the
management elements. In contrast, FEL's respective scores were 30.0 and
7.0. (La Pointe's scores were 18.0 and 5.2.) The scores represented the
evaluators' overall determination that E-Systems' proposal was exceilent
overall, and markedly superior to FEL's to the extent of offering the
least risk of unsuccessful contract performance. FEL was considered to
have submitted a strong proposal, but with a significantly lesser degree
of assurance that the government's requirements would be timely met.
The greatest concerns voiced by the evaluators were in the areas of risk
management and first article testing.
The Navy then ranked the proposals as to highest total point score by
adding the weighted price scores to the weighted technical and
management scores. 2/ FEL was ranked first, with a total score of 84.6,
La Pointe ranked second with a score of 75.2, and E-System's ranked
third with a total score of 72.4 with, and 72.8 without, first article
testing. E-Systems' overall score was lower than either FEL's or La
Pointe's because, despite its excellent technical/management rating, the
firm's proposed price, the most important evaluation factor, was at this
point in the competition relatively much higher than either FEL's or La
Pointe's.
E-Systems, FEL, La Pointe, and a fourth firm were determined to have
submitted proposals within the competitive range. The Navy then entered
into written discussions with the competitive range offerors by
submitting for response various questions related to perceived technical
deficiencies in the proposals. In its written interrogatory to FEL, the
Navy pointed out its concerns with respect to risk management and first
article testing, and also asked a series of questions relative to such
areas of the firm's proposal as the qualifications of its proposed
engineering personnel in UHF communications, FEL's plan to "build to
print," its manufacturing approach, and production lead time. The
Navy's interrogatory to E-Systems solely concerned rights in data to be
furnished under the contract.
Upon submission of the firms' responses, the proposals were
reevaluated and rescored. Although E-Systems, FEL, and La Pointe all
received slight scoring increases for the technical factors as a result
of this reevaluation, their respective competitive positions in the
overall ranking did not change.
The Navy then requested best and final offers (BAFOS) from the four
firms. La Pointe submitted a BAFO price of approximately $48.3 million,
which, although an increase of some $7 million over its initial price,
still remained the low price. FEL as well increased its price upon
submission of its BAFO from $44.5 million to $51.2 million. However,
E-Systems made a significant reduction in its price from $60.6 million
to $57.6 million with first article testing, and from $60.3 million to
$57.3 million without the first article requirement.
As a result of this reduction, E-Systems weighted scores for price
increased markedly because, in relation to La Pointe's still low price,
there was now a much smaller difference between the two offers than had
existed previously for purposes of proportioning the 52 weighted price
points available. Therefore, E-Systems was able to displace both FEL
and La Pointe to become the first-ranked offeror in terms of total
weighted score:
E-Systems (with
first articles) 37.3 8.4 42.3 88.0
(without
first articles) 37.3 8.4 42.0 87.7
FEL 30.8 6.9 48.8 86.5
La Pointe 19.0 5.2 52.0 76.2
The evaluators then recommended to the contracting officer, who was
the source selection official for the procurement, that the award be
made to E-Systems on the bases of (1) its total overall score, which was
the highest both with and without first article testing; and (2) the
demonstrated technical soundness of its proposal, especially with regard
to the reduced level of risk associated with E-Systems' prospective
performance of the contract. The evaluators noted the firm's
near-perfect scores in both the technical and management categories, as
well as the experience of its proposed personnel in UHF communications.
In contrast, the evaluators felt that FEL's personnel lacked
experience in UHF equipment similar to the sets being acquired, and that
this lack of experience would only increase the degree of risk in such
critical areas as first article testing and initial product deliveries.
The evaluators concluded that, " . . . FEL's weaknesses . . . presented
sufficient risk to question its ability to meet the prescribed schedule,
while E-Systems did not."
The source selection official concurred with the evaluators, findings
and selected E-Systems for the award, subject to approval by higher
authority. The selection official noted that the firm had received the
greatest overall number of evaluation points based on the criteria of
price, technical, and management, and determined that the higher price
of its offer was offset by its evidenced superiority, as the proposal
was rated approximately 21% higher than FEL's for the technical and
management factors. Specifically, he found that:
"... E-Systems' thorough understanding of the AN-WSC-3 was
reflected in their proposal presentation... which demonstrated
with a high degree of confidence that it has the personnel and
experience necessary to produce the radio in accordance with the
required schedule."
The source selection official further noted that the areas of risk
identified in FEL's proposal remained after discussions, and that the
evaluators "seriously question ed whether the key personnel proposed by
FEL have the knowledge and experience necessary to resolve these four
areas of risk." Because E-Systems' proposal, although higher in price,
did not present such concerns, he concluded that award to the firm would
be in the best interest of the government. FEL's protest followed the
Navy's award to E-Systems.
FEL's essential basis for protest is the assertion that the Navy's
evaluation of proposals was inconsistent with the criteria stated in the
RFP, and, in consequence, the firm was deprived of its opportunity to
compete fairly for the award. FEL asserts that the Navy placed undue
emphasis on E-Systems' incumbency, an unstated factor, in assigning the
evaluation points. FEL contends that the Navy's favorable view of
E-Systems' past performance became "an overwhelming factor" in scoring
the proposals, in place of those criteria expressly delineated in the
solicitation.
Moreover, FEL contends the fact that the RFP had stated that price
was the most important evaluation factor required the Navy to make an
independent determination of E-Systems' technical superiority--that is,
a comprehensive finding rather than one merely reflecting the higher
scores assigned to E-Systems' proposal during the evaluation process.
FEL asserts that no such independent determination was made, which was a
failure especially egregious given that FEL's total evaluated price was
some 11 percent lower than E-Systems'--a quantum difference of more than
$5 miliion--and its proposal met the government's requirements in all
respects from a technical standpoint.
In essence, FEL contends that the seiection of E-Systems violated the
statutory requirement for full and open competition, urging that
E-Systems was given preferential consideration during the Navy's
evaluation because of its status as the incumbent. Hence, FEL asserts
that the evaluation results were tainted by that bias and cannot be used
to justify E-Systems'selection. ANALYSIS
To the extent FEL contends that the award to E-Systems, a
higher-priced offeror, was inconsistent with the RFP's stated provision
that price was the most important evaluation factor, it is well settled
that, in a negotiated procurement, the government is not required to
make award to the firm offering the lowest price unless the RFP in fact
specifies that price will be the determinative factor. Ray Camp, Inc.,
B-221004, Feb. 27, 1986, 86-1 CPD P 205; Norfolk Ship Systems, Inc.,
B-219404, Sept. 19, 1985, 85-2 CPD P 309. Thus, in the absence of such
an express provision, the procuring agency retains the discretion to
select a more highly priced but also more highly rated proposal, if
doing so is in the government's best interest and is consistent with the
solicitation's stated evaluation and source selection scheme. Ray Camp,
Inc., B-221004, supra, 86-1 CPD P 205 at 3.
In the present matter, it is clear that the RFP made no
representation that price alone would be the sole basis for award--we
note again that the government expressly reserved the right to make
award to other than the lowest-price offeror--but rather that price
would be the most heavily weighted of the three major evaluation
criteria. The RFP's reference to "price and other factors" as the
criterion for selection clearly meant that those "other factors" to be
considered by the Navy were the technical and management elements fully
set forth in the solicitation. Hence, although technical and management
considerations may have been, individually and collectively, of lesser
importance than price, it is obvious that they were to be used in rating
the comparative merits of the proposals. We find no indication that the
RFP contemplated that an award would be made strictly to the
lowest-priced firm whose proposal was determined to be technically
acceptable. Cf. Kreonite, Inc., B-222439, July 11, 1986, 86-2 CPD P 60;
Los Angeles Community College District, B-207096.2, Aug. 8, 1983, 83-2
CPD P 175 (award must be made to the lowest-priced, technically
acceptable offeror where "price and other factors" is the stated
selection criterion and there is no provision that offers would be
evaluated for relative technical superiority).
We conclude, therefore, that the terms of the RFP allowed the Navy to
make the cost/technical tradeoff normally made in a negotiated
procurement for purposes of selecting the successful offeror. The only
question, then, is whether the selection of E-Systems' offer instead of
FEL's was a procurement decision rationaily based and consistent with
the established evaluation criteria. Grey Advertising, Inc., 55
Comp.Gen. 1111 (1976), 76-1 CPD P 325.
We believe the facts estabiish that the Navy evaluated the proposals
in accordance with the scheme set forth in the RFP. As noted earlier,
the weight actually assigned to price (52 percent) was greater than the
total weights for technical (38 percent) and management (9 percent),
consistent with the RFP's statement that price was more important than
the combination of the two. FEL's proposal was consistentiy rated
higher than E-Systems' for price because, although not the lowest
offeror, FEL continued to propose a price lower than E-Systems'.
Accordingly, the firm's offer always received a greater proportion of
the 52 evaluation points available for that factor, and, until the
submission of BAFOS, FEL enjoyed a competitive advantage over E-Systems
to the extent that its combined score for price, technical, and
management factors was higher than E-Systems'.
However, when FEL submitted its BAFO, with full knowledge that price
was the most important evaluation factor, the firm raised its price by
nearly $7 million, whereas E-Systems at the same time reduced its price
by $3 million. FEL's business decision to increase its price by some 15
percent materially weakened its competitive position because its
weighted price score was no longer significantly higher than E-Systems'
and no longer offset its lower technical/ management scores. Thus, as a
result of FEL's action and E-Systems' price reduction, FEL simply lost
its position as the offeror with the highest total combined score. Even
though highest total point score was not the stated basis for award,
note 1, supra, see also ICOS Corp. of America, B-225392, Feb. 10, 1987,
66 Comp. Gen. , 87-1 CPD P 146, it certainly was relevant to the Navy's
ultimate selection decision for comparison purposes.
FEL has also argued that the Navy, during its technical evaluation,
placed undue emphasis on E-Systems'successful past performance as the
incumbent. FEL recognizes that, as a general rule, a competitive
advantage gained through incumbency is not an unfair advantage which
must be eliminated, and, therefore, that a firm's prior performance may
properly be considered by an agency in evaluating proposals. Employment
Perspectives, B-218338, June 24, 1985, 85-1 CPD P 715. However, FEL
nevertheless believes that E-Systems' technical scoring advantage was
based primarily on the agency's favorable view of E-Systems' incumbency,
rather than on any innate technical superiority of the firm's proposal.
It is true that a numerical scoring advantage based primarily on the
advantages of incumbency may not necessarily indicate a significant
technical advantage that would warrant paying a substantial cost premium
for it. Bunker Ramo Corp., 56 Comp. Gen. 712 (1977), 77-1 CPD P 427.
In NUS Corp. et al., B-221863 et al., June 20, 1986, 86-1 CPD P 574, a
recent decision cited by FEL in support of its position, we objected to
an award to the incumbent where the slight technical scoring advantage
enjoyed by the firm appeared to be the result of evaluation scores
assigned on the basis of a favorable incumbency. In other words, we
found no indication in the evaluation record that the incumbent's
proposal demonstrated any reai technical superiority over the
protester's.
However, the present case is clearly distinguishable from NUS. Here,
the Navy's evaluators noted a marked superiority of E-Systehms' proposal
over FEL's due in large part to the fact that E-Systems had the
necessary personnel experienced in UHF communications so as to expose
the government to a much lesser risk of unsuccessful performance.
Although the firm's possession of experienced personnel obviously
stemmed from its incumbency, we simply cannot view this as an unfair
competitive advantage to be eliminated. Employment Perspectives,
B-218338, supra. To the extent FEL's proposal was rated lower for not
proposing personnel with commensurate experience, the selection of
personnel was a clearly within FEL's control, and FEL does not contend
that its personnel were as experienced as E-Systems'. Hence, FEL cannot
be heard to complain that the Navy unreasonably concluded for this
reason that its proposal presented high degrees of risk in certain
areas.
The fact that greater degrees of risk are reasonably perceived by an
agencyto exist with respect to a new competitor does not, in our view,
necessarily mean that the incumbent is being evaluated preferentially,
and we have consistently held that an agency's concerns as to the levels
of risk inherent in a proposal are proper factors to be considered in
the source selection process. See Space Communications Co., B-223326.2
et al., Oct. 2, 1986, 66 Comp Gen 86-2 CPD P 377. Thus, we see no basis
here to question the Navy's judgment that FEL's proposal deficiencies
relating to the availability of personnel sufficiently experienced in
UHF communications, deficiencies which the Navy noted had not been
resolved at the conclusion of discussions, presented levels of risk in
unfavorable contrast to E-Systems' more secure offer. Id.; Laser
Photonics, Inc., B-214356, Oct. 29, 1984, 84-2 CPD P 470.
FEL also contends that the Navy failed to make an independent
determination that E-Systems' proposal was technically superior to FEL's
so as to justify an award at E-Systems' 11 percent higher price. In
this regard, we agree that a source selection official bears the
responsibility to determine whether technical point advantages are worth
their higher cost. SETAC, Inc., 62 Comp. Gen. 577 (1983), 83-2 CPD P
121. In other words, technical point scores, although useful guides for
selection decisions, should not be overly relied upon, and whether a
given point spread between two competing proposals indicates a
significant superiority of one proposal over another depends on the
facts and circumstances of each case. RCA Service Co., B-208871, Aug.
22, 1983, 83-2 CPD P 221. Thus, a contract award should not be based on
the difference in technical score alone, but should reflect the source
selection official's considered judgment of the significance of that
difference. 52 Comp. Gen. 358 (1972).
However, the record here provides no support for FEL's contention
that the source selection official failed to make an independent
cost/technical tradeoff determination in selecting E-Systems for the
award. The selection official noted the degrees of risk involved with
FEL's offer, and ultimately concluded that E-Systems' full understanding
of the requirement and its evident capability to meet the needs of the
government fully justified its higher price. Since, among other things,
he specifically found that E-Systems' technical superiority was
"reflected in" the firm's proposal presentation, we reject FEL's
suggestion that his selection decision merely countenanced the
evaluators' unfair preference for the incumbent. Cf. NUS Corp. et al.,
B-221863 et al., supra (failure of source selection official to make a
separate determination of technical superiority apart from superficial
recognition of slightly higher evaluation scores). Rather, the
selection official's decision here, in our view, represented his
reasonable judgment that E-Systems' proposal was worth the price asked
for it, and that acceptance of FEL's proposal with significant remaining
risk would not be in the government's best interest despite its lower
price.
Notwithstanding the fact that price was stated to be the most
important evaluation factor, we see nothing objectionable in the Navy's
ultimate determination that E-Systems' 21 percent higher technical score
offset its 11 percent higher price. FEL itself has noted that the
Navy's evaluators determined that this 21 percent differential did not
adequately reflect the actual technical difference between the two
proposals, which, in the evaluators' view, was even greater. Thus, FEL
cannot successfully argue that the source selection official had no
basis to conciude that the point spread here clearly indicated
E-Systems' technical superiority. See DLI Engineering Corp., B-218335,
June 28, 1985, 85-1 CPD P 742. Since the Navy fairly considered the
competitive proposals with respect to both price and other evaluated
factors in strict accordance with the terms of the RFP, we therefore
fail to see how the selection of E-Systems violated the statutory
requirement for full and open competition. See 10 U.S.C. Sec.
2304(a)(1)(A) (Supp. III 1985).
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ La Pointe had also protested the award to E-Systems on grounds
similar to those raised by FEL, but La Pointe later withdrew the
protest. We include a discussion of La Pointe's competitive ranking
here merely for comparative purposes.
2/ We note that the RFP did not provide that award would be made
strictly on the basis of the highest overall point score. We have held
that an evaluation scheme which in fact provides for award on that
basis, although not improper, is unwise because it limits the
contracting agency's flexibility and discretion in making its source
selection decision. Harrison Systems Ltd., 63 Comp. Gen. 379 (1984),
84-1 CPD P 572.
Matter of: Consolidated Devices, Inc.--Reconsideration
File: B-225602.2
Date: April 24, 1987
Solicitation specifying that calibrator must be capable of applying
0-4000 pounds of force within a specified percentage of uncertainty is
deficient, and protest on that ground is sustained where: (1) record
shows that uncertainty percentage cannot reasonably apply at or near
zero pounds of force; (2) solicitation does not specify some number
above zero at which the uncertainty percentage becomes applicable; and
(3) absence of such a number has a significant cost and technical
impact.
Consolidated Devices, Inc. (CDI), requests that we reconsider our
dismissal of its protest alleging deficiencies in request for proposals
(RFP) No. N00123-87-R-0119, issued by the Department of the Navy for
calibrators. We reverse the dismissal and we sustain the protest.
Award has been made but performance suspended pending our decision.
We dismissed CDI's protest as untimely because it raised numerous
alleged solicitation deficiencies, but was not filed with our Office or
the Navy prior to the December 19, 1986, closing date for receipt of
proposals, as required by our Bid Protest Regulations, 4 C.F.R. Sec.
21.2(a) (1), (3) (1986). CDI did request that the Navy clarify these
deficiencies, however, in letters of December 3 and December 11, and CDI
now claims that these letters constituted agency-level protests for
purposes of satisfying our timeliness requirements. In this regard,
where a protest initially is filed with the contracting agency, a
subsequent protest to our Office will be deemed timely if filed within
10 working days after adverse agency action on the protest, which in
this case would be the receipt of proposals on December 19. 4 C.F.R.
Sec. 21.2(a) (3).
Since CDI's protest was received in our Office on December 31, fewer
than 10 working days after the closing date, the protest is timely if
CDI's December letters constituted a protest.
On reflection, we agree that CDI's December letters constituted
agency protests; that the receipt of proposals on December 19
constituted adverse agency action; 1/ and that CDI's protest filed in
our Office on December 31 was timely.
The Navy maintains that the protest should not be deemed timely based
on the December 3 and 11 letters since those letters nowhere indicated
an intent to protest formally; the Navy did not treat them as protests
under its regulations; and the December 11 letter actually stated CDI's
intention to protest in the future, if award were made to another firm.
While these all are factors that we will consider in judging whether
a protest has been filed, they concern the form, rather than the
substance, of a submission. Although it facilitates matters for a
protester to use the word "protest," where, as here, a letter expresses
dissatisfaction with a solicitation and requests corrective action, we
think such a letter sufficiently manifests an intent to protest. Reeves
Brothers Inc.; H. Landau & Co., B-212215.2, B-21215.3, May 2, 1984, 84-1
C.P.D. P 491. CDI's threat in its December 11 letter to protest any
award, in our view, merely reflected the seriousness with which CDI was
pursuing correction of the alleged solicitation deficiencies. We
therefore will review the merits of the protest.
CDI requested clarification of numerous alleged ambiguities and other
RFP deficiencies in its December letters, and the Navy has responded to
each in its administrative report. CDI's comments on the report,
however, are restricted to one alleged deficiency, so we consider CDI to
have abandoned its protest as to the others. The Big Picture Co., Inc.,
B-220859.2, Mar. 4, 1986, 86-1 C.P.D. P 218. The remaining issue
concerns whether the RFP adequately defined the torque/ force/tension
ranges within which the calibrators were to operate.
As background, the calibrators are devices to be used for
calibrating, or standardizing, the measuring capabilities of torque and
force instruments (e.g., torque wrench) as well as other calibrators.
This standardization consists of applying a known amount of force,
torque or tension (hereinafter, force) to the instrument and then
adjusting the indicator on the instrument to show the force being
applied. This is done throughout a range of force, expressed in terms
of pounds (lbs.) or foot-pounds (1b.-ft.), so that when the instrument
is used, the force shown on the instrument's indicator is the force the
instrument is applying.
The RFP specified the ranges and degrees of uncertainty (that is, the
degree to which the force actually applied is permitted to deviate from
the force the calibrator indicates is being applied), of five different
types of force the calibrator had to be capable of putting out, as
follows:
UNCERTAINTY
Bidirectional
Torque 0-4,000 lb.-ft. + 0.5% IV (indicated
value)
Unidirectional
Torque 0-20,000 lb.-ft. + 0.5% IV
Force 0-500 lbs. + 0.125% IV or + 0.005 lb.,
(whichever is greater)
Tension 0-2,400 lbs. + 2.5% IV
Cable
Tension 0-5,000 lbs. + 0.75% IV
The RFP specified that the uncertainty percentages for the tension
and cable tension ranges (+ 2.5% and + 0.75%) would not apply for very
low pounds of force but, rather, would apply only from 30-2,400 lbs. and
280-5,000 lbs., respectively. In other words, the uncertainty
requirement would not have to be met where the force was below the
minimum specified. As shown in the above chart, the RFP also limited
the low end of the force range by providing, essentially, that the
allowable degree of uncertainty would not be less than + 0.005lbs.
CDI argues that the low ends of the first two ranges above
(bidirectional and unidirectional torque) are not defined sufficiently
for purposes of applying the + 0.5% IV uncertainty factor because it is
not possible to calibrate an instrument with any kind of accuracy at or
near a force of zero lb.-ft. CDI further explains that it is necessary
to know exactly how close to zero force the uncertainty factor does
apply since the number of transducers (the elements of the calibrator
which measure output force), needed in the calibrator to assure
measurement within the allowable uncertainty, increases at an increasing
rate as the force to be measured approaches zero. 2/ Since these
transducers are among the more expensive parts of the calibrator, CDI
maintains it cannot prepare a realistic technical or price proposal
without knowing the low end limits of the applicability of the
uncertainty factors. CDI thus argues that the Navy should specify
either some limit below which the uncertainty percentaqe is not meant to
apply, or a minimum error expressed in terms of lb.-ft., as it did for
the last three ranges.
The Navy states in response that it is "common practice," "recognized
by the industry," to state ranges from zero to a maximum figure. This
is so, the Navy maintains, even though "at or near zero, an uncertainty
figure cannot be attained." The Navy concludes that, "based on the
requirements in the specification and accepted industry practices, the
contractor should be able to adequately define the lower limits."
There is no legal requirement that a competition be based on
specifications drafted in such detail as to eliminate completely any
risk for the contractor. Dynalectron Corp., B-220518, Feb. 11, 1986, 65
Comp. Gen. , 86-1 C.P.D. P 151. It is required, on the other hand,
that solicitations be drafted to inform offerors in clear and
unambiguous terms what is required of them so they can compete on an
equal basis. See Newport News Shipbuilding and Dry Dock Co., B-221888,
July 2, 1986, 86-2 C.P.D. P 23. We find that the RFP here did not meet
this standard. CDI's argument reasonably establishes that accurate
calibration is not possible at zero force; that some definite low end
of the two ranges in question is necessary to calculate the number of
transducers needed; and that it is not possible to prepare an
intelligent, competitive proposal without knowing how many transducers
are required to meet the Navy's needs.
The Navy's position that specifying ranges in terms of zero to some
maximum number is industry practice is entirely unsupported in the
record and, in fact, is contradicted to some extent. The Navy concedes
that some low end limit for the ranges must be determined, recognizing
that, at or near zero force, an uncertainty factor cannot realistically
be attained. The Navy has presented no documentary or other evidence of
industry practice, however, and has not endeavored to explain how
offerors are supposed to determine the desired low ends of the ranges
from the RFP itself. In contrast, CDI has submitted substantial
supporting engineering information which categorically refutes the
Navy's claim regarding industry practice, and includes a detailed
explanation of the cost and technical impact of the absence of a low end
number for the two ranges.
We think it is significant, and incongruous with the Navy's position,
that low end limits other than zero were specified for the three other
ranges; the Navy, again, has explained neither why, given its view of
industry practice, it considered it necessary to specify low ends for
these ranges, nor why its reasoning in doing so did not extend to the
other two ranges.
Of further significance, CDI has presented a June 16, 1986, letter in
which the Metrology Engineering Center (the same activity that prepared
the technical comments in response to the current protest) amended a
similar solicitation (request for quotations No. N00123-86-Q-A007) based
on CDI's questioning of the absence of a low end limit other than zero
to which the uncertainty percentage was to apply. The Center responded
that "the point is well taken," and amended the specification to allow
an uncertainty factor of "+ 0.5% of indicated value or 0.005 lb-ft,
whichever is greater." (Underlining added). This change definitized the
fow end of the range by allowing an error of .005 lb.-ft. at very low
force, the same approach the Navy used in specifying the low end of the
tension range in the current RFP.
We conclude that the RFP was not sufficiently definite to assure that
CDI and other offerors could prepare intelligent proposals and compete
on an equal basis. By leaving offerors to guess as to the lowest part
of the two ranges to which the uncertainty factor would apply, the Navy
created the possibility that different offerors would assume different
low end limits and thus prepare their proposals on different cost and
technical bases. While this was a negotiated procurement, where
discussions might have been used after receipt of proposals to clarify
the Navy's intent, the RFP specifically provided that award could be
made on the basis of initial proposals. Under these circumstances, CDI
properly attempted to have the RFP clarified prior to the closing date
so it could prepare a competitive initial proposal.
By separate letter to the Secretary of the Navy, we are recommending
that the RFP be canceled and that the Navy recompete this requirement
with a solicitation clearly stating the low ends of the ranges to which
the uncertainty factors are meant to apply.
In addition, CDI should be reimbursed the costs of filing and
pursuing the protest, including attorney's fees, since our sustaining
the protest furthers the purpose of the statutory requirement for full
and open competition. See Tandem Computers, Inc., B-221333, Apr. 14,
1986, 65 Comp. Gen. , 86-1 C.P.D. P 362. The protester should submit
its claim for such costs directly to the contracting agency. 4 C.F.R.
Sec. 21.6(f) (1986).
The protest is sustained.
Comptroller General
of the United States
1/ The Navy did advise CDI on December 17 that it would not respond
to its letters before the closing date. If this notice were considered
to be initial adverse action, the December 31 protest to our Office
still would be within 10 working days, and thus timely.
2/ For example, according to CDI, if 103.7 lb.-ft. is the lowest
force to which the uncertainty factor applies, only 4 transducers are
needed, while 1.04 lb.-ft. would require 13 transducers, and .13 lb.-ft.
would require 17.
Matter of: Intelcom Support Services, Inc.
File: B-225600
Date: May 7, 1987
1. Where record indicates that agency evaluated protester's proposal
in a manner consistent with established criteria set forth in
solicitation and the evaluation was reasonable, protest based on
offeror's disagreement with evaluation is denied.
2. Protest that agency failed to hold meaningful discussions
concerning three areas of weakness is without merit, where contracting
agency sent protester questions that should have led the protester into
the areas of its proposal with which the agency was concerned, and
protester was given opportunity to revise proposal with responses to
these questions.
3. Technical evaluation of proposal must be based on information
provided in the proposal, and neither an offeror's past performance nor
information the agency might acquire during a preaward survey can be
considered as a basis for technical evaluation of proposal.
4. In a negotiated procurement there is no requirement that award be
made on the basis of the lowest cost. The contracting agency has the
discretion to select a superior technical proposal rather than a lower
rated, lower cost proposal where under evaluation criteria set forth in
solicitation cost considerations are secondary to technical merit in
proposal evaluation.
Intelcom Support Services, Inc., protests the award of a contract to
TECOM, Inc., under request for proposals (RFP) No. F33601-86-R9009
issued by the Air Force for the provision of vehicle operation,
maintenance, and analysis for the vehicle fleet at Wright Patterson Air
Force Base, Ohio. Intelcom contends that the Air Force improperly
evaluated its proposal, and that the award of the contract to TECOM at a
higher price than that proposed by Intelcom was improper.
We deny the protest.
The solicitation called for a fixed-price contract covering the
period from January 1, 1987, through September 30, 1987, with options
for 4 years. The performance work statement stipulates that the
contactor will provide all personnel, equipment, tools, materials, and
supervision, as well as other items and services necessary to perform
the work required for the fleet of approximately 1500 vehicles at
Wright-Patterson. Each offeror's technical package was to include
details concerning work procedures, staffing, scheduling, training,
quality control, supplies, and equipment to maintain the fleet.
Under the evaluation and selection criteria set forth in the
solicitation, technical proposals were to be evaluated--in descending
order of importance--in the areas of management, production, and
quality. The solicitation further stated:
"... A ward shall be made to that contractor whose proposal is
determined to be the most advantageous to the Government, price
and other factors considered. . . . C ost/price will be a
secondary consideration to the three areas of primary
consideration and the government reserves the right to award the
contract to other than the lowest proposed price. The Government
can award to other than the low offeror."
In response to the solicitation, five proposals were received, all of
which were determined to be within the competitive range. The proposals
were evaluated and rated consistent with the evaluation criteria set
forth in the solicitation. Prior to requesting best and final offers,
the agency conducted discussions with offerors which, it states,
consisted of "very detailed explanations and specific responses to all
points and questions raised." Following the evaluation and ranking of
best and final offers, the source selection team selected TECOM's
proposal as the most advantageous to the government. The record shows
that TECOM's offer was the highest ranked technically. Intelcom's offer
was ranked the second highest offer technically and it submitted the
lowest priced offer. TECOM's price exceeded Intelcom's proposed price
by approximately 8 percent ($2,357,351). 1/
The source selection official determined that award to TECOM,
although higher priced than Intelcom's offer was justified because
TECOM's proposal offered "significantly more to the project in terms of
management personnel, background, and experience as well as production
planning and quality control procedures." The source selection official
specifically concluded that TECOM's offer was superior "in terms of
technical qualifications and ability to fulfill the contract . . .
requirements," and that the difference in cost was more than offset by
the technical superiority of TECOM's offer.
Following notification of the award to TECOM, Intelcom requested and
was granted a debriefing. Subsequent to the debriefing, Intelcom
protested that it should have received the award since its proposal was
the lowest priced and found to be technically acceptable.
The Air Force advised Intelcom at its debriefing that Intelcom's
proposal was downgraded and lower ranked than TECOM's because (1) the
description of the firm's past experience was not sufficiently detailed,
with specific reference to the number of dispatches, fleet size, and
number of work orders it had handled; (2) the maintenance
organizational chart and maintenance manloading chart were inconsistent;
and (3) the ratio between the proposed quality control personnel and
production personnel was lower than the Air Force's standard.
The protester disputes the agency's findings. It argues that the Air
Force's rejection of its proposal was improper and unfair because it
"adversely" evaluated Intelcom's proposal by determining it to be weak
with respect to factors which the solicitation did not require or
specify as evaluation criteria, and with respect to information the
agency did not otherwise request through discussions. The protester
further argues that the Air Force improperly failed to consider
information which was not contained in its proposal but which the agency
could have properly obtained during a preaward survey, or which was
known to some members of the technical evaluation team as a result of
Intelcom's previous incumbency as a vehicle operations and analysis
contractor at Wright-Patterson Air Force Base. Essentially, the
protester contends that the aspects of its proposal which, during the
debriefing, the agency pointed out as weaknesses for which it was
downgraded did not exist in some instances, and in other instances, were
"exceedingly minor and did not detract from its proposals."
Concerning the protester's assertion that the solicitation did not
require prior experience information as to fleet size or numbers of
dispatches and work orders, and that such criteria" were trivial and
inappropriate, we note that an attachment to the solicitation which
detailed information required to be submitted in the management area for
purposes of technical evaluation specifically requested--among certain
other minimum requirements--the size of fleet involved in each of the
offeror's contracts over the past 10 years. Moreover, it is clear from
the language in that attachment that appropriate information to be
submitted concerning the offeror's experience was not limited or
restricted to what was specifically requested, but that the information
"should contain at least" those details specified. Thus, the
protester's contentions are not supported by the record. We recognize
that the attachment did not specifically request numbers of dispatches
and work orders (nor, as the protester contends, did the attachment
pertaining to information required in the area of quality state a
"minimum requirement" for the ratio of quality control personnel to
production personnel). Nevertheless, it was not improper or
unreasonable for the agency to evaluate offers on the basis of such
factors since it is not required that an RFP state the contracting
agency's model expectations formulated for purposes of evaluating
competing proposals. See Personnel Decisions Research Institute,
B-225357.2, Mar. 10, 1987, 87-1 C.P.D. P at 9, citing
Intelcom Support Services, B-222547, Aug. 1, 1986, 86-2 C.P.D. P 135
at 4. Intelcom's further contention that the Air Force failed to
conduct meaningful discussions is based on allegations that during
discussions the agency did not point out to Intelcom the need for
additional information in the area of experience, the inadequacy of its
quality control personnel to production personnel ratio, or the apparent
inconsistency between its maintenance manloading and maintenance
organizational charts. A contracting agency is not obligated to afford
offerors allencompassing negotiations or discussions, even though the
agency should be as specific as practical considerations permit.
Training and Management Resources, Inc., B-220965, Mar. 12, 1986, 86-1
C.P.D. P 244 at 5. Where a proposal is determined to be technically
acceptable and in the competitive range, the agency is not obligated to
discuss every aspect of it that has received less than the maximum
possible score. See Ira T. Finley Investments, B-222432, July 25, 1986,
86-2 C.P.D. P 112 at 8-9.
Here, the record indicates that the agency did raise in discussions
the concerns for which Intelcom was downgraded in the area of
experience, ratio of quality control personnel to production personnel
and the apparent inadequacy of and inconsistency in the manning levels.
For example, the agency specifically advised Intelcom of its failure to
provide ratio of quality control personnel to production personnel as
required under the RFP, and also pointed out other problems with its
quality control personnel. With regard to experience, the record shows
that Intelcom was advised that vehicle maintenance and operations
analysis experience appeared insufficient and asked Intelcom to
elaborate on its initial offer. Since the RFP clearly required offerors
to provide fleet sizes of their contracts over the prior 10-year period,
we think Intelcom clearly was on sufficient notice of this deficiency
and what was required. Finally, the particular inconsistency between
the maintenance manloading chart and the maintenance organizational
chart, which made it unclear whether Intelcom was offering sufficient
parts/supply staffing, was not specifically raised as a deficiency.
However, the record shows that the Air Force pointed out general
inadequacies in providing manning to meet contract requirements, and
noted general inconsistencies in the manning proposals. Based on this
record, we conclude that the Air Force met its obligation to conduct
meaningful discussions with Intelcom. Bauer of America Corp. & Raymond
International Builders, Inc., A Joint Venture, B-219343.3, Oct. 4, 1985,
85-2 C.P.D. P 380 at 4.
Furthermore, the protester's allegation that, by not seeking
clarification of the inconsistency between its maintenance
organizational and maintenance manloading charts, the agency violated
the Federal Acquisition Regulation (FAR), 48 C.F.R. Sec. 15.607,
governing mistakes, is without merit. The protester takes the position
that, in its technical proposal, the omission in the maintenance
manloading chart of a parts staff was an "obvious mistake" because its
plan to use a five man parts staff as shown in the maintenance
organization chart was corroborated by information in its price
proposal.
As noted above, in the discussion questions directed to the
protester, the agency pointed out that the protester's initial technical
offer was inconsistent and failed to indicate adequate manning. The
record indicates that the protester failed to resolve adequately this
matter in its best and final offer. Further the RFP required that
offerors submit their technical and cost proposals under two distinct
covers, and offerors were cautioned that the data submitted with each
proposal should be complete and sufficient to enable the evaluation
board to ascertain fully the offeror's capability to perform the
solicitation requirements. The solicitation further indicated that
technical and price proposals were to be evaluated separately by two
different evaluation teams. Thus, the proposal evaluation scheme set
forth in the solicitation renders without merit the protester's view
that the discrepancy between the two charts should have been resolved by
the information contained in the price proposal and that it should have
been clear to the agency that the proposal contained an "obvious"
mistake for which the agency was required by the FAR, 48 C.F.R. Sec.
15.607, to seek clarification.
Also without merit are Intelcom's contentions that the technical
evaluation team improperly failed to consider information concerning
Intelcom's experience allegedly known to some of the evaluation team
members through prior dealings with the firm and that, as a part of its
technical evaluation, the agency improperly considered "issues"
pertaining to Intelcom's corporate experience which should have been
"examined in detail as a part of the Air Force's "Preaward Survey" . .
. ." It is well established that an offeror's technical evaluation is
based on information submitted in its proposal, and an offeror runs the
risk of having its proposal rejected if it does not submit an adequately
written proposal. Henderson Aerial Surveys, Inc., B-215175, Feb. 6,
1985, 85-1 C.P.D. P 145; see Twin City Construction Co., B-222455, July
25, 1986, 86-2 C.P.D. P 113. Further, there is no legal basis for
favoring a firm with presumptions on the basis of the offeror's prior
performance; rather, as was stated in the subject solicitation, all
offerors must demonstrate their capabilities in their proposals.
Del-Jen, Inc., B-216589, Aug. 1, 1985, 85-2 C.P.D. P 111 at 6.
Moreover, a preaward survey is not to be used, as the protester
suggests, to supplement informational deficiencies in a technical
proposal. An agency may at its discretion conduct a preaward survey for
the specific purpose of establishing the responsibility of a bidder or
offeror that has ostensibly won the competition for the contract. ATI
Industries, B-215933, Nov. 19, 1984, 84-2 C.P.D. P 540. We conclude,
therefore, that Intelcom has failed to show that the agency's evaluation
of its technical proposal was unreasonable.
The protester further maintains that the contract was improperly
awarded to TECOM at a higher price because "CICA The Competition in
Contracting Act of 1984 requires the Air Force to award to the offeror
whose proposal is "most advantageous to the United States considering
only price and the other factor s included in the solicitation."
(Emphasis in original.) Intelcom expresses the view that its proposal
was "nearly perfect... in terms of the items required by the
solicitation" and that TECOM's proposal "provided no additional value."
Alternatively, the protester speculates that TECOM offered something not
required by the RFP upon which the Air Force improperly based the award
decision. 2/ We note in this regard, that the protester's submissions
suggest that it considered the subject RFP to have been very much in the
nature of a sealed bid solicitation, wherein are stipulated precise
details, specifications, and procedures with which the contractor is to
comply, so that there is no occasion for differences or distinctions
between proposals such as job approach, levels of production, or the
quality and efficiency with which services will be rendered, but award
is made on the basis of price and price-related factors. Thus the
protester states:
". . . T here is absolutely no room for innovation or for a
contractor to propose a different approach to successful contract
performance. Instead, contractors could only be judged on their
prices and on whether or not they possessed sufficient management
and experience to perform the contract tasks."
However, the basis for award here is not so limited as the
protester's comments indicate. In view of the complex and comprehensive
range of services involved in this procurement, the Air Force sought
proposals containing detailed information about such technical
considerations as the offeror's quality of performance and quality
control, provisions for safety assurance, plans for logistical support,
as well as management qualifications, experience, capability, and plans,
in addition to the offeror's price.
Where the use of negotiated procurement procedures is necessitated by
the nature of the procurement and the RFP provides that technical
factors are more important than cost, following discussions, if
warranted, and submission of best and final offers, an agency may award
to a higher priced, technically superior offeror if the higher price is
offset by the advantages of the technically superior proposal. 10
U.S.C. Sec. 2305 (Supp. III 1985); BDM Management Services Co.,
B-220385, Jan. 29, 1986, 86-1 C.P.D. P 104; Price Waterhouse & Co.,
B-203642, Feb. 9, 1982, 82-1 C.P.D. P 103.
As the protester contends, we have held that where the record
contains no justification for a cost/technical tradeoff, an award based
on a significantly higher priced proposal is improper if the technical
rating of the higher priced proposal is only slightly better than that
of the lower priced proposal. DLI Engineering Corp., B-218335, June 28,
1985, 85-1 C.P.D. P 742. However, the protester is not correct in its
view that, based on this line of cases, the Air Force's award to TECOM
was improper because a justification was not provided for the award in
view of the cost premium involved.
The Air Force has stated that TECOM's proposal package was superior
to all others and the most advantageous to the government in that it
"clearly offers significantly more to the project in terms of management
personnel, background, and experience, as well as production planning
and quality control procedures" and its higher cost is "more than offset
by the superior characteristics" of its technical proposal.
Based on our review of the record we do not find the source selection
award decision unreasonable. Although Intelcom states that its
technical proposal was "almost perfect," in addition to the agency's
concerns stated at the debriefing, its proposal was downgraded for
failing to comply with several solicitation requirements which, while
not discussed in the agency's response to the protester, are clearly
germane to the technical merits of the proposal. For example, the RFP
performance work statement required that the contractor provide a
contract manager and an alternate who would be available during normal
duty hours within 30 minutes to meet on the installation with designated
government personnel when necessary or outside of normal hours within 1
hour. Under Intelcom's proposal the manager for this project would be
shared with another of Intelcom's projects at West Point, an arrangement
that could potentially jeopardize the provision of services under this
contract or that of another facility. Further, the solicitation
required that the offeror describe its plan for resolution of workload
priority conflicts and the agency indicated in discussions that
Intelcom's proposal failed to indicate under this category how adverse
personnel or resource conditions would be alleviated. However, Intelcom
failed to respond to this matter in its final offer.
On the other hand, the agency found that TECOM's offer was superior
in its approach which guaranteed minimum full-time manning levels and
assessed a financial penalty for failure to meet the promised levels.
The aqency also rated TECOM superior for its corporate management level
accountability especially with regard to quality assurance, TECOM's
prior maintenance and operations experience, and the project officer's
and listed personnel's strong backgrounds in the vehicle operations and
maintenance field. Under these circumstances and in view of the fact
that Intelcom's final proposal contained some inconsistencies,
especially in regard to manning, and did not provide all required
information, we find the Air Force's evaluation of Intelcom's proposal
was not unreasonable or that the award to TECOM as the higher priced,
technically superior offer was improper. See Sigma Systems, Inc.,
B-225373, Feb. 24, 1987, 87-1 C.P.D. P .
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ Intelcom's offered price was $25,929,109; TECOM's price was
$28,286,460.
2/ Intelcom has vigorously argued, in this regard, that it has been
disadvantaged in advocating its case because of the Air Force's refusal
to furnish Intelcom a copy of TECOM's proposal and the technical
evaluation results. Such documents are generally considered proprietary
and/or confidential and, therefore, not releasable to protester. The
agency has, however, provided copies of these documents to our Office
for our in camera review.
Matter of: Pegasus Alarm Associates, Inc.
File: B-225597.2
Date: May 12, 1987
There is no right to a government contract, and Federal Acquisition
Regulation provision stating that before expiration of bids, agencies
should, if necessary, request written extensions of the lowest bidders'
bid acceptance periods is for the benefit of the government. The
provision is of the type that creates no rights in bidders.
Pegasus Alarm Associates, Inc. seeks reconsideration of our denial of
its protest against rejection of a bid for failure to extend its
acceptance period, as requested by the Naval Facilities Engineering
Command. See Pegasus Alarm Associates, Inc., B-225597, Apr. 16, 1987,
87-1 CPD P . In its protest, the firm contended that despite a failure
to submit an express extension before its bid for maintenance of fire
protection and warning systems at two Navy facilities in Virginia had
expired, the Navy should have known that Pegasus intended to extend the
bid acceptance period.
We affirm our prior decision.
As detailed in that decision, all bids under invitation for bids No.
N62470-86-B-5238 were due to expire on December 16, 1986. By letter
dated December 9, the Navy had requested a 30-day extension from
Pegasus; however, it had received no response by December 17, a
Wednesday. Nor, by that date, had the Navy received information
relating to the firm's responsibility that the contracting officer had
requested, and Pegasus had agreed to submit, during a telephone
conversation on December 10. Therefore, according to the agency, on
December 17 the contracting officer left a message on Pegasus' telephone
answering machine, asking to be called back by noon the next day.
On December 19, when the Navy still had not received a written
extension of the firm's bid acceptance period, the
responsibility-related information, or a return telephone call, the
contracting officer made award to the second-low bidder. The following
Monday, December 22, the Navy finally received the
responsibility-related information and a telephone call from Pegasus
during which the firm attempted to revive its bid. The Navy, however,
concluded that the bid had expired and rejected it.
In its initial protest, Pegasus alleged that it had never received
the Navy's letter of December 9 requesting an extension. The firm
attempted to shift responsibility for this to the Navy, arguing that the
agency had failed to notice a change of address (from a post office box
in one Pennsylvania location to a post office box in another
Pennsylvania location) on correspondence concerning a mistake in bid.
Pegasus also disputed the contracting officer's statement that, during
the December 10 telephone conversation, she had reconfirmed the firm's
address as the post office box shown on Pegasus' bid; the request for
an extension had been sent to this address. In addition, Pegasus argued
that it had not received the contracting officer's message on its
answering machine until December 18. The firm did not explain, however,
why it had not returned the call until December 22 or why it had not
sent the responsibility-related information by a method that would have
ensured that it reached the Navy before expiration of its bid.
Given these facts, some of which were in dispute, we concluded that
the Navy could not have inferred from Pegasus' conduct that the firm
intended to extend its bid acceptance period. Since we believed it
would have been equally possible for Pegasus to argue that its bid had
expired, we held that the integrity of the competitive system was best
served by the Navy's acceptance of the second-low bid.
Pegasus' reconsideration request is based on an allegedly erroneous
statement in our decision. We cited a Federal Acquisition Regulation
(FAR) provision, 48 C.F.R. Sec. 14.4041(d) (1986), which states that
before expiration of bids, agencies should, if necessary, request
written extensions of their bids from the lowest bidders. We also
referred to two decisions, 42 Comp. Gen. 604 (1963) and Alchemy, Inc.,
B-207954, Jan. 10, 1983, 83-1 CPD P 18, in which our Office had
recognized that bidders have a corresponding duty to check with the
contracting officer before expiration of their bids if they have a
continuing interest in being considered for award.
Pegasus now argues that the FAR provision places a "clear,
unambiguous, and unequivocal duty" on the contracting officer to seek an
extension, but imposes no corresponding duty on bidders. If anything,
Pegasus concludes, the FAR creates a correlative right in a bidder whose
bid acceptance period is about to run out.
We find this argument without merit. It is well settled that there
is no right to a government contract. Perkins v. Lukens Steel Co., 310
U.S. 113 (1940); cf. Krygoski Constr. Co., 63 Comp. Gen. 367 (1984),
84-1 CPD P 523. The FAR provision, in our opinion, is only for the
benefit of the government, establishing a procedure for contracting
officers to follow in cases where administrative difficulties delay
award, so that it becomes necessary to seek extensions from the lowest
bidders. The provision is of the type that creates no rights in
bidders. See generally Bank Street College of Education--Request for
Reconsideration, B-213209.2, Oct. 23, 1984, 84-2 CPD P 445, citing
Centex Constr. Co., Inc., 162 Ct. Cl. 211 (1963).
Here, the contracting officer complied with the FAR by requesting an
extension in writing a full week before Pegasus' bid was due to expire.
By reconfirming the firm's address (we have only Pegasus' unsupported
statement that this did not occur), by requesting additional information
on the firm's responsibility, and by attempting to reach Pegasus by
telephone after expiration of its bid, we believe the contracting
officer actually went further than she was required to under the FAR.
Moreover, even if we assume, for the sake of argument, that a bidder
has no corresponding obligation to check with the contracting officer
before its bid acceptance period runs out, we find that the Navy in this
case properly considered Pegasus's bid to have expired. In its request
for reconsideration, Pegasus still does not explain why, as a sound
business practice, if not as a matter of law, it did not specifically
advise the contracting officer of the change in the address shown on its
bid; arrange for forwarding of its mail; return the contracting
officer's telephone call for at least 4 days; or use express mail for
its responsibilityrelated information, so that it would have reached the
Navy before expiration of the bid. The firm has not shown that our
prior holding, i.e., that, in these circumstances the Navy could not
have inferred an extension, was erroneous.
We affirm our prior decision.
Harry R. Van Cleve
General Counsel
Matter of: Pegasus Alarm Associates, Inc.
File: B-225597
Date: April 16, 1987
1. When an agency requests bidders to extend their bid acceptance
periods, it is the responsibility of a firm that desires to extend to
communicate this, either by ensuring that the agency receives an express
extension or by conduct from which the agency can infer an intent to
extend. In the rare instances where such an inference is possible, the
bidder has taken some other affirmative step that provides clear
evidence of its intent to extend, and the agency is aware of this
action.
2. When facts concerning a bidder's intent to extend its bid
acceptance period are in dispute, and it appears that the bidder could
argue either that it had extended or that its bid had expired, the
integrity of the competitive system is best served by an award to the
second-low bidder.
Pegasus Alarm Associates, Inc. protests the rejection of its low bid
for failure to timely acknowledge a request for a second extension of
its bid acceptance period under Naval Facilities Engineering Command
solicitation No. N62470-86-B5238. The solicitation was for maintenance
of fire protection and warning systems at Oceana Naval Air Station,
Virginia Beach, and Auxiliary Landing Field Fentress, Chesapeake,
Virginia. Pegasus contends that the agency improperly awarded the
contract to the second-low bidder, Old Towne Services, Inc. when the
contracting officer had reason to know that Pegasus intended to extend
its bid.
We deny the protest.
Bid opening occurred on September 18, 1986, but due to administrative
difficulties in making award, the Navy twice requested bidders to extend
their bid acceptance periods.
Its first request was by letter dated October 27; all bidders,
including Pegasus, responded and agreed to hold their bids open from
November 17 to December 16. The Navy requested a second extension,
covering the period from December 17 to January 16, 1987, by letter
dated December 9. According to the Navy, when Pegasus failed to respond
in a timely fashion, its bid automatically expired.
The protester states that it did not receive, and was not otherwise
informed of, the second request for an extension. Pegasus alleges that
the Navy ignored a change of address, thus contributing to its failure
to receive the second request. The protester argues that its conduct in
preparing and offering information related to its responsibility; its
contacts with the Navy in an effort to correct a mistake in bid (not at
issue here); and its prompt, affirmative response to the agency's first
request for an extention provided an adequate reason for the Navy to
know that Pegasus intended to extend again.
The Navy, however, contends that it made every reasonable effort to
effectuate award to Pegasus, but that it was frustrated by the
prospective contractor. According to the Navy, despite numerous
attempts to contact Pegasus on a series of dates following bid opening,
contracting officials either got no answer at the telephone number
listed for Pegasus or were forced to leave messages on an answering
machine. Specifically, the contracting officer states that by a letter
also dated December 9, and during a telephone conversation with Pegasus
on December 10, she requested, and the firm agreed to provide, financial
and other responsibility-related information. According to the
contracting officer, when she had not received either this information
or an express extension of its bid acceptance period from Pegasus by
December 17, the day following expiration of the bid, she left a message
on Pegasus' answering machine, asking to be called back by noon on
December 18. The Navy, having received no response, made award to the
second-low bidder on Friday, December 19.
Pegasus, which claims that the contracting officer's call was not
recorded until December 18, returned it on the following Monday,
December 22, at which time it was advised of the award. Also on
December 22, the Navy received a list of references and other
responsibility-related information from Pegasus. The firm alleges that
the Navy acted precipitously and unreasonably in making the award before
receipt of this material; it seeks termination of the Old Towne
contract and an award to itself.
The Federal Acquisition Regulation (FAR) states that before
expiration of bids, if necessary, agencies should request the lowest
bidders to extend, in writing, their bid acceptance periods. 48 C.F.R.
Sec. 14.404-1 (d) (1986). We have recognized a corresponding duty on
the part of bidders to check with the contracting officer before bids
expire if they have a continuing interest in being considered for award.
Alchemy, Inc., B-207954, Jan. 10, 1983, 83-1 CPD P 18, citing 42 Comp.
Gen. 604 (1963). When an agency does request an extension, it is the
responsibility of the firm that desires to extend its bid to communicate
assent, either by ensuring that the agency receives an express extension
or by conduct from which the agency can infer the bidder's intent to
extend. Trojan Industries Inc., B-220620, Feb. 10, 1986, 86-1 CPD P
143; Dunrite Toof & Die, Inc., B-211735, June 6, 1983, 83-1 CPD P 610.
Here, Pegasus clearly did not submit an express extension before its
bid expired on December 16. The question therefore becomes whether, as
the firm argues, the Navy could have inferred an extension and, by
accepting the bid, could legally have bpund Pegasus to perform at its
original bid price.
In those rare instances where we have permitted agencies to infer an
extension of a bid acceptance period, the bidder has taken some other
affirmative step that provides clear evidence of its intent to extend,
and the agency has been fully aware of this action. See, e.g., Surplus
Tire Sales, 53 Comp. Gen. 737 (1974), 74-1 CPD P 161 (bidder signs
waiver of description of specifications and submits it to the contract
ing agency); American Photographic Industries, Inc., B-206857, Sept.
29, 1982, 82-2 CPD P 295 (bidder orally agrees to extend and agency
telephone records reflect this agreement, as well as the fact that the
bidder is obtaining an extension of a letter of credit supplied as a bid
bond); cf. Trojan Industries, Inc., supra (bidder responds on Monday to
a request for extension made fess than 1 day before Saturday expiration
of bids and gains no unfair competitive advantage by this slight delay).
We think the evidence of Pegasus' intent to extend beyond the
December 16 expiration date is less convincing than in the cited cases.
The Navy, as previously indicated, requested the second extension and
responsibility-related information by letters dated December 9. It sent
both letters by certified mail, return receipt requested, and addressed
both to the post office box in Bausman, Pennsylvania that Pegasus had
indicated, in box 15A of Standard Form 33, submitted as part of its bid,
was its mailing address. Sometime after bid opening Pegasus apparently
changed its mailing address to a post office box in Lebanon,
Pennsylvania. 1/ Agency correspondence relating to the mistake in bid,
as well as the first request for an extension, must have been forwarded,
since although the Navy sent them to the Bausman address, Pegasus
responded using a typed letterhead that included the Lebanon address.
Pegasus states, however, that it never received the letters of December
9, and the Navy states that after award, a number of letters were
returned to the sender with a notation that the post office box had been
closed.
Pegasus contends that the Navy should have noted its change of
address and sent the second request for an extension to the new post
office box. The contracting officer, however, states that during the
December 10 telephone conversation with Pegasus, although she did not
discuss the request for an extension, she did reconfirm the firm's
mailing address and was given the one listed on Standard Form 33.
Pegasus denies having confirmed the old address.
Given these facts, many of which are in dispute, we cannot conclude
that Pegasus took the affirmative steps necessary to permit an inference
that it intended to extend its bid acceptance period. The firm did not
specifically advise the Navy of its change of address, and may have
orally confirmed its old address. It apparently did not arrange for
forwarding of mail from the old address for a period long enough to
ensure that it received all correspondence relating to its outstanding
bid, thus contributing to the nonreceipt of the letters requesting an
extension. Nor did Pegasus forward responsibility-related information
by any means such as express mail or telex, so that it would have been
certain to arrive before expiration of the bid acceptance period.
Finally, the firm failed to return the contracting officer's phone call,
made either December 17 or 18, before the December 19 award.
We conclude that Pegasus is now attempting to revive an expired bid.
Such action may be appropriate where there is no compromise to the
integrity of the competitive bidding system. Trojan Industries, Inc.,
supra. Here, however,
Pegasus could also choose to contend, if the government attempted to
make an award, that it did not have a vaiid bid. In our opinion, the
integrity of the competitive system is therefore best served by the
Navy's acceptance of the secondlow bid. See 42 Comp. Gen. supra at 608;
Arsco International, B-202607, July 17, 1981, 81-2 CPD P 46.
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ The firm apparently also changed its name from Pegasus Alarm
Association, which appears on its bid, to Pegasus Alarm Associates, Inc.
The parties have not raised the question of whether these are the same
legal entity.
Matter of: Individual Development Associates, Inc.
File: B-225595
Date: March 16, 1987
1. There is no merit in protester's complaint that it was misled into
not submitting revised prices with its best and final offer where
request for proposals stated that technical factors were only slightly
more important than cost; protester itself was aware that its costs
were high; and protester was reminded several times of the opportunity
to revise its costs.
2. Where protester's initially offered costs, while higher than other
offerors', reasonably were not considered a proposal deficiency, it was
not necessary for agency to discuss them with the firm during
negotiations.
3. Argument that all proposals meeting minimum reguirements should
receive maximum score in technical evaluation because request for
proposals did not provide criteria for assessment of factors in excess
of minimum requirements is without merit. Agencies may differentiate
among proposals on basis of quality during technical evaluation.
4. Agency could reasonably rely on the resumes and employment
agreements offeror submitted with its proposal, since the agency had no
reason to believe the offeror did not intend to provide the people
involved. Fact that firm did not actually initiate recruitment of all
proposed personnel until after award does not prove that offer was
submitted in bad faith or that evaluation was unreasonable.
Individual Development Associates, Inc. (IDA), protests the Marine
Corps' award of contract No. M-00264-87-C-0009 to Zeiders Enterprises,
Inc. We deny the protest in part and we dismiss it in part.
The Marine Corps conducted this negotiated procurement to obtain a
contractor to operate the family services center at the Quantico Marine
Base outside of Washington, D.C. The staff at the family services
center provide support and counseling for Marine Corps members. The
solicitation stated that technical factors were slightly more important
than cost and identified the technical factors to be evaluated as, in
order of importance: understanding of the program requirements;
quality of personnel; and the offeror's demonstrated ability,
experience, and prior performance of similar services. The Marine Corps
estimated that the services would cost approximately $15,000 per month,
based on its experience with the current contract held by the incumbent,
IDA.
The Marine Corps received three proposals. After evaluation of
technical and cost proposals, the contracting officer determined that
price negotiations were not necessary because there was adequate
competition and the prices in the initial proposals were close enough to
the government's estimate of the cost of the services to assure the
Marine Corps of a reasonable price. The contracting officer held
technical discussions with all offerors on December 13, 1986, and
advised all offerors to submit revised technical proposals by December
19. During these discussions, the contracting officer also advised all
offerors that they could submit price revisions, if desired, and that if
they elected not to do so their initial prices would be considered their
best and final offers (BAFOs).
IDA did not revise its cost proposal. Zeiders and the third offeror
both submitted BAFOs at reduced prices. After evaluation of BAFOs,
Zeiders was the highest ranked, lowest cost offeror, and was awarded the
contract. Zeiders' technical score was less than two points better than
IDA's; Zeiders' best and final cost offer was approximately 35 percent
below IDA's offer.
IDA states that it inquired on at least two occasions whether the
opportunity to revise its prices in its BAFO amounted to a suggestion
that IDA review its cost proposal, but was told that the Marine Corps
was saying only that the opportunity existed. IDA also asserts that the
director of the family services center assured IDA that the firm would
be awarded the contract and led IDA, through comments and inquiries
related to the service center budget, into believing that the Marine
Corps was not concerned about cost. IDA asserts that these actions
unfairly lulled IDA into believing that it was not necessary to submit
revised prices in its BAFO. IDA further contends that the substantial
difference between its offer and that of the awardee, as well as the
one-third difference between its offer and the government's estimate,
otherwise was an obvious deficiency that the Marine Corps was obligated
to point out in discussions. IDA also argues that Zeiders' offered
price was unreasonably low.
The Marine Corps disputes IDA's statement that IDA was told that it
would be awarded the contract, and argues that the agency was not
required to alert IDA to the firm's high costs, relative to the
government estimate and the other offers, because the contracting
officer did not consider them to be a deficiency. The Marine Corps also
notes that the Federal Acquisition Regulation (FAR) prohibits advising
an offeror of its price standing compared to other offerors, 48 C.F.R.
Sec. 15.610(d)(3)(ii) (1986), and asserts that the agency's actions were
in compliance with this prohibition.
The governing provisions in the Competition in Contracting Act
(CICA), 10 U.S.C. Sec. 2305(b) (4) (A), (B) (Supp. III 1985), require
that discussions be held with all responsible sources whose proposals
are within the competitive range. Moreover, discussions must be
meaningful, and to be so must include disclosure not only of
deficiencies, but also of excesses. Washington School of Psychiatry/The
Metropolitan Educational Council for Staff Development, B-192756, Mar.
14, 1979, 79-1 C.P.D. P 178. Although agencies are prohibited by the
regulations from advising an offeror during discussions of its price
standing relative to other offerors, we have held that discussions
cannot be meaningful if an offeror is not apprised that its price
exceeds what the agency believes to be reasonable. Price Waterhouse, 65
Comp. Gen. 206 (1986), 86-1 C.P.D. P 54. However, the extent and
content of discussions are matters within the judgment of the agency and
are not subject to question by our Office unless clearly unreasonable.
Chemonics International, B-222793, Aug. 6, 1986, 86-2 C.P.D. P 161.
We find no merit in IDA's complaint that it was misled into not
submitting revised prices with its BAFO. Because the RFP stated that
technical factors were only slightly more important than cost, it should
have been obvious to IDA that cost was an important element of the
competition, see, e.g., Indian Community Health Service, Inc., B-217481,
May 15, 1985, 85-1 C.P.D. P 547, and we think it unreasonable to infer
from only statements by a service center official regarding the
availability of funds for the center that the equation was not as
specified. IDA, moreover, certainly was aware that its costs were high
since it is apparent that IDA was concerned about its costs; otherwise,
we presume, IDA would not have made multiple inquiries about the
significance of the opportunity to submit revised costs with its BAFO.
In short, the record establishes that IDA knew the importance of cost to
the selection decision, knew its costs were high, and was reminded
several times of the opportunity to revise its costs. We cannot fault
the Marine Corps for IDA's decision not to lower its costs when it
submitted the BAFO.
Moreover, although the difference between IDA's costs and the
government estimate may appear significant when expressed as a
percentage, the actual price difference was not substantial and the
contracting officer anticipated price reductions in the BAFO's.
Further, as stated above, IDA was itself concerned that its costs were
higher than they could be, i.e., the firm knew it might have a problem
even without being told so. In these circumstances, we will not
question the contracting officer's determination that IDA's higher costs
did not amount to a deficiency that had to be pointed out in
negotiations. The Marine Corps' request for a BAFO constituted adequate
price discussions absent any such deficiency. Action Manufacturing Co.,
B-222151, June 12, 1986, 86-1 C.P.D.P 546.
We also find no merit in IDA's challenge to the reasonableness of the
contract price. The BAFOs of both Zeiders and the other offeror were
very close to the Marine Corps' estimate, and even IDA asserts that it
could have lowered its costs, presumably bringing them closer to the
Corps' estimate and the ultimate price. In our view, this record
supports, rather than refutes, the reasonableness of the contract price.
IDA also complains that Zeiders received a higher technical score for
offering staff with education and experience beyond that described in
the specifications as the minimum qualifications. IDA argues that if an
offeror met the minimum qualifications, it should have received the
maximum score because there were no criteria for awarding points for
education or experience in excess of the specified minimum
qualifications.
IDA also contends, in this regard, that Zeiders never intended to
provide the higher-qualified people that it proposed. In support of
this contention, IDA states that 9 of the 13 people Zeiders now employs
at the service center were IDA employees that IDA proposed. IDA argues
that the Marine Corps, in scoring Zeiders' offer, should not have relied
on the employment agreements in Zeiders' proposal because they were not
witnessed and lacked details regarding compensation. IDA contends that
the Marine Corps therefore could not assign Zeiders higher scores for
personnel.
We find no merit in IDA's position. The Marine Corps' scoring of
this factor reflects little more than a differentiation among proposals
on the basis of how well they address the requirements in the RFP. We
think it reasonable that a proposal that exceeds the minimum
requirements receives a higher score than one which merely meets them,
and we previously have approved of this method for distinguishing the
relative quality of proposals. Mutual of Omaha Insurance Co.,
B-203338.2, Sept. 24, 1982, 82-2 C.P.D. P 268; Mutual of Omaha
Insurance Co., B-201710, Jan. 4, 1982, 82-1 C.P.D. P 2.
With regard to IDA's challenge to Zeiders' intent to provide the
staff members described in its proposal, we think the Marine Corps could
reasonably rely on the resumes and employment agreements Zeiders
submitted with the offer. See Development Alternatives, Inc., B-217010,
Feb. 12, 1985, 85-1 C.P.D. P 188. Nothing in the record suggests the
Marine Corps should have concluded that Zeiders could not or would not
provide those people, and the fact that Zeiders may not actually have
initiated recruitment of all proposed personnel until immediately after
award of the contract--recruitment that IDA's allegation itself shows
was largely successful-- does not prove that Zeiders' offer was
submitted in bad faith or that the evaluation was unreasonable. See
Mantech Services Corp., B-222462, Aug. 5, 1986, 86-2 C.P.D. P 149.
Moreover, we note the contract allows for substitution after award,
with the contracting officer's approval, of equally qualified personnel.
The administration of this provision is a matter that is not within our
bid protest function. Tom Hoch Interior Designs, Inc., B-224291, Sept.
18, 1986, 86-2 C.P.D. P 321. A related contention IDA raises, that the
Marine Corps otherwise is being lax in administering the contract and is
unable to obtain the services the contractor is supposed to provide,
also involves matters of contract administration and therefore will not
be considered.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
Matter of: The Recorder
File: B-225593
Date: March 26, 1987
Bidder's note on bid that price offered under invitation for bids to
print and mail legal opinions is conditioned on electronic transmission
of opinions in a particular format did not constitute a qualification
rendering bid nonresponsive since solicitation essentially provided that
the specified format would be used anyway.
The Recorder protests the award of a requirements contract to
Electrographic Corporation under invitation for bids (IFB) No.
CANAC-87-01, issued by the Administrative Office of the United States
Courts for printing and mailing slip opinions of the U.S. Court of
Appeals for the Ninth Circuit. The Recorder, the incumbent contractor,
contends that it should have been found the low responsive bidder and
therefore should have been awarded the contract.
We deny the protest.
The IFB contemplated the award of a firm, fixed-price,
indefinite-quantity requirements contract for fiscal year 1987, with 2
option years, and invited bids for printing an estimated 900 opinions;
daily collating and mailing five copies of each slip opinion to not more
than 38 addresses; and weekly collating and mailing of one copy of each
slip opinion to not more than 500 addresses. The IFB provided that
electronic transmission of slip opinions to the contractor would be used
in all but extraordinary circumstances, although the opinions could be
provided in writing (manuscript). The IFB stated:
"The electronic files will be in either ANSI format, 1/ or will
be files generated by the court's word processing software (Office
power, by C.C.I.). The contractor will be responsible for full
systems integration and testing."
The IFB stated that the total price for the 2 option years would be
added to the total price for the basic requirement, and that award would
be made to the lowest responsive, responsible bidder.
Of the three bids received, The Recorder's and Electrographic's bids
were lowest. Electrographic's bid of $17.00 to print each opinion page
was conditioned, according to a note on the bid schedule, on receipt in
electronic form,
"... of uniformly formatted or coded opinion text identifying
the beginning (or end) of each text paragraph, major or minor
opinion heads, unique text placement, including indented
paragraphs, footnotes and footnote references, and typeface
changes."
Electrographic stipulated that if the stated conditions were not met,
its price would increase by $2.00 per opinion page (to $19.00), and if a
manuscript rather than an electronically-transmitted opinion was
provided, the price would increase by $4.00 per page (to $21.00). The
total bid submitted by Electrographic for the 3-year period, considering
all bid items, was evaluated at $833,590.34, which was almost $95,000
less than The Recorder's bid of $928,522.10.
The Recorder notes that all prospective bidders were required to
print a sample opinion from data that was electronically transmitted by
the Ninth Circuit. The protester contends that the data provided did
not conform to any of the conditions upon which Electrographic's $17.00
per page bid was based, so that the firm's bid should have been
evaluated at $19.00 per page. On that basis, The Recorder asserts that
its total bid was lowest.
The Administrative Office responds that two files were transmitted in
the sample exercise: a "print ready" file created by the court's word
processing software and a copy of the word processor file with all the
formating codes which, the agency says, satisfies the conditions in
Electrographic's bid note. The Administrative Office states that its
technical staff evaluated Electrographic's $17.00 bid conditions and
determined that the communications and word processing software to be
utilized to transmit data to the contractor both created and maintained
electronic codes that met Electrographic's requirements. The
contracting officer therefore evaluated Electrographic's bid at $17.00
per page.
Resolution of this protest depends on whether Electrographic's bid of
$17.00 per page for electronicallytransmitted documents was responsive,
that is, whether it represented an unequivocal offer to meet the
solicitation's material requirements. Free-Flow Packaging Corp.,
B-204482, Feb. 23, 1982, 82-1 C.P.D. P 162. If the ANSI and Office
Power formats in fact create and transmit documents that meet the
criteria set forth in the note on Electrographic's bid, so that the firm
was offering, at $17.00, precisely what the government wanted, the
Administrative Office's evaluation and award were correct. In that
case, Electrographic's note was of no real consequence, because if the
government were to transmit a document in a format that does not meet
those conditions, the government would be asking Electrographic to do
work not stated in the specifications, and the firm would be entitled to
an additional payment, as would any contractor.
If, however, Electrographic's bidding note imposed conditions on the
government different from the conditions on which bids were invited, the
bid of $17.00 per page could not be accepted, since acceptance would
obligate the government, in order to take advantage of the $17.00 price,
to transmit data in a way other than the ways the government said it was
going to transmit. See John C. Grimberg Co., Inc.--Request for
Reconsideration, B-218231.2, Apr. 26, 1985, 85-1 C.P.D. P 478. In that
event, the bid would have to be evaluated at $19.00 per page, which was,
in effect, an alternate bid price that unquestionably met the
invitation's terms. See L.B. Foster Co., B-222593, Aug. 18, 1986, 86-2
C.P.D. P 191.
We think the bid properly was evaluated at the $17.00 price. As
stated above, the Administrative Office concluded that Electrophic's
note imposed nothing on the government that the government did not
already say it would do. Neither The Recorder's protest material, nor
our own review of the procurement, shows that the conclusion that the
conditions in Electrographic's note were consistent with whichever
format, of the two stated in the IFB, in which the government would
choose to transmit, was unreasonable.
In its comments on the agency report, The Recorder alleges that the
Administrative Office incorrectly calculated the bids for collating and
mailing opinions. The Recorder maintains that proper calculation would
cut the difference between the two bids almost in half. We need not
decide this issue, however, since The Recorder concedes that even using
its calculations Electrophic's bid would have remained low.
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ ANSI is the acronym for the American National Standards Institute,
and an ANSI format is a document format designed to be independent of
any particular vendor's equipment.
Matter of: St. Cloud Aviation of Alaska--Request for Reconsideration
File: B-225591.2
Date: January 16, 1987
Allegation that awardee lacks ability to perform contract concerns a
bidder's responsibility, the affirmative determination of which is not
considered by General Accounting Office except under limited
circumstances not present here.
St. Cloud Aviation of Alaska (St. Cloud) requests that we reconsider
our dismissal of its protest against the award of a contract to Wick
Air, Inc. (Wick), under solicitation No. 816-26 issued by the Department
of the Interior. We affirm our prior dismissal.
The solicitation called for the repair of an aircraft. St. Cloud
protested that Wick is not a responsible contractor because Wick does
not have adequate equipment, personnel and facilities needed to perform
the repairs. St. Cloud also challenged Wick's financial capabililty to
perform the contract.
Prior to awarding the contract to Wick on December 9, 1986, the
contracting officer determined Wick responsible. We dismissed St.
Cloud's protest to this Office that Wick was improperly determined
responsible since under our Bid Protest Regulations, 4 C.F.R. Sec.
21.3(f) (5) (1986), affirmative determinations of responsibility are not
reviewed by GAO absent a showing that contracting agency personnel may
have acted in bad faith or that definitive responsibility criteria
contained in the solicitation were not met. Neither exception had been
alleged by the protester.
In its request for reconsideration, St. Cloud essentially argues that
we dimissed its protest prematurely because it intends to prove that
Wick is not a responsible contractor based on information it expects to
obtain through the Freedom of Information Act (FOIA) requests it filed
with the Federal Aviation Administration and the Department of the
Interior. With respect to our review of this protest, however, these
FOIA requests are irrelevant because, as explained above, we will not
review the contracting officer's affirmative responsibility
determination on Wick except in circumstances not alleged here. See
e.g. Webb Designs, Inc., B-222437, July 1, 1986, 86-2 C.P.D. P 2;
Reliability Sciences, Inc., B-212852, May 2, 1984, 84-1 C.P.D. P 493.
Our prior dismissal is affirmed.
Harry R. Van Cleve
General Counsel
Matter of: Dynalectron Corporation
File: B-225590
Date: January 21, 1987
General Accounting Office (GAO) will dismiss protest where issues
raised are before a court of competent jurisdiction; the protester has
not asked that the court seek GAO's opinion; and the court has not
expressed interest in a GAO decision.
Dynalectron Corporation protests the award of a contract to any other
offeror under request for proposals (RFP) No. N00123-85-R-1070, issued
by the Navy for operations, maintenance and other services at the
Pacific Missile Range Facility. We dismiss the protest.
Dynalectron in essence maintains that the Navy failed to evaluate
proposals in accordance with the evaluation criteria in the RFP. On
January 2, 1987, while the protest was pending, Dynalectron filed suit
in the U.S. District Court for the District of Columbia challenging the
procurement on the same grounds on which the protest to our Office was
based. Dynalectron's complaint does not ask the court to seek our
opinion on the issues raised and in fact indicates interest in a
judicial resolution only. Since the issues raised in the protest are
now before a court of competent jurisdiction and the court has not
expressed interest in our decision, the protest is dismissed. Bid
Protest Regulations, 4 C.F.R. Sec. 21.9(a) (1986); C&M Glass Co.,
B-218227, Apr. 15, 1985, 85-1 CPD P 430.
Ronald Berger
Deputy Associate
General Counsel
Matter of: ALM, Incorporated
File: B-225589; B-225589.3; B-225589.4
Date: May 7, 1987
Award of cost-reimbursement contract to firm whose proposed costs
were higher than protester's is not legally objectionable where agency
reasonably concluded that personnel proposed in the protester's best and
final offer did not meet the government's minimum qualification
requirements set forth in the solicitation.
ALM, Incorporated has protested the award of a Navy contract to
Mission Engineering Corporation under request for proposals (RFP)
N00164-84-R-0086, which was issued for a level-of-effort, 3-year,
cost-plus-fixed-fee contract for maintenance engineering and logistic
support services for electronic warfare systems related to various Naval
aviation and electronic warfare programs.
We deny the protest.
ALM's protest consists of a series of letters, dated between December
23, 1986, and January 16, 1987, which were submitted as ALM "uncovered"
"additional evidence" in support of its protest and to which we
assigned, in order of their receipt, the file numbers B-225589 through
B-225589.4. We dismissed B-225589.2 because it did not articulate a
basis for protest and appeared to concern a matter of contract
administration, which would not be for consideration under our bid
protest function. A request by ALM that we reconsider our dismissal of
B-225589.2 has become academic since we have reviewed the propriety of
this procurement pursuant to the other correspondence ALM filed with us.
Those letters of protest which were written before ALM was debriefed
by the Navy, are largely speculative and include the allegations that
the Navy did not properly notify ALM of the award to Mission and that
the prior award of an interim contract to Mission evidenced a "pattern
of favoritism" toward that firm. In its post-conference comments, ALM
did not rebut the Navy's position on these issues and we therefore deem
ALM to have abandoned them. In any event, the first issue concerns an
alleged procedural deficiency which would not affect the validity of an
otherwise proper award, Employment Perspectives, B-218338, June 24,
1985, 85-1 C.P.D. P 715 at 19, and there is no support in the record for
the protester's speculation that agency officials rejected ALM's
proposal out of favoritism toward its competitor. Lee J. Kriegsfeld,
B-222865, Aug. 22, 1986, 86-2 C.P.D. P 214 at 5-6. These issues,
therefore, will not be considered further.
In its later correspondence, ALM also asserts that the members of the
Navy's Source Selection Evaluation Board (SSEB), which evaluated the
technical proposals submitted, lacked the qualifications for that task.
The selection of individuals to serve as proposal evaluators is
essentially a matter within the discretion of the agency, and we
therefore decline to appraise the qualifications of such individuals
absent a showing of possible fraud, conflict of interest, or actual bias
on the part of the evaluators. Training & Management Resources, Inc.,
B-220965, Mar. 12, 1986, 86-1 C.P.D. P 214. None of these is present
here. We therefore will not consider ALM's challenge to the expertise
of the members of the SSEB.
In its fifth letter, written after the Navy had debriefed ALM by
telephone, the protester focuses on the principal issue in this case,
which is the propriety of the Navy's evaluation of the qualifications
and experience of certain personnel ALM proposed for performance of the
contract. The Navy ultimately concluded that ALM's proposal was techni
cally unacceptable because it did not contain the minimum number of
qualified key personnel necessary for performance of the conttact. ALM
contends that the Navy did not properly evaluate the qualifications of
two of the individuals it proposed.
The work required under the RFP included integrated logistics support
(ILS), readiness analyses, the establishment and maintenance of a master
index of repairable, configuration management, program planning
assistance, analysis and review of inter/intra-services support plans,
assistance in the development of joint operating procedures and
memorandums of agreement, depot maintenance support, and the development
of maintenance review plans and procedures. The RFP was issued on
October 5, 1984. It provided that proposals would be evaluated under
the following standards:
1. Personnel Resources, Corporate Experience and Corporate
Organization
2. Understanding of Work and Technical Approach
3. Cost
Standards one and two were of equal importance; standard three was
slightly less important than either one or two. Standard one was
subdivided into two substandards: (a) "Degree of Employees'
Experience," and (b) "Relativeness, Depth and Currency of Corporate
Experience and Corporate Organization." Of the two substandards, (a) was
stated to be "significantly more important" than (b). The first
substandard provided that the Navy required that an offeror's key
personnel meet the RFP's "minimum qualifications requirements" and that
the number of key employees be equal to the required level-of-effort.
Finally, the RFP provided that technical proposals would be evaluated
separately from cost proposals and that the contract resulting from the
RFP would be awarded to the responsible offeror whose proposal conformed
to the RFP and was determined to be the most advantageous to the
government. To determine the proposal offering the greatest value the
RFP said the following would be considered:
1. Degree of employees' experience;
2. Relativeness, depth and currency of corporate experience and
organization;
3. How well the offeror understood the work to be performed and
the quality of the technical approach;
4. The offeror's ability to project cost as related to the
effort and cost reasonableness.
Under the terms of the RFP, therefore, technical merit outweighed
cost in the evaluation of proposals and as to the first of the two
co-equal technical evaluation criteria an offeror's personnel
resources--specifically, the degree of its proposed employees
experience--was "significantly more important" than corporate experience
and organization. addition, the RFP's statement of work prescribed
minimum staffing and qualifications of various categories of key
employees. Specifically, the positions of Program Manager, Senior
Engineer, Engineer and Junior Engineer, and Senior Logistics Analyst,
Logistics Analyst and Junior Logistics Analyst, were to be staffed with
personnel having certain minimum levels of professional and technical
experience. These qualifications consisted of a 4-year degree, or its
equivalent in experience, plus additional relevant work experience, the
amount of which increased with seniority of position, in addition to
that substituted for education, if any.
A total of three clarifying amendments were issued which extended the
closing date to December 10, 1984. Four proposals were received in
response to the RFP, including those submitted by ALM and Mission.
The Naval Air Systems Command, which has responsibility for the
systems, programs and equipment covered by the RFP issued guidance
concerning funding limitations on contractor support services in
November and December 1984. This guidance delayed the start of the
technical evaluation of the four proposals, and the initial technical
evaluations were not completed until August 9, 1985. Under the
evaluation of proposals, ALM was third-ranked, and its proposal was
considered only "susceptible of being made acceptable," because of the
company's failure to provide acceptable personnel to meet the minimum
requirements of the RFP's Statement of Work.
In view of the time which had elapsed since initial proposals had
been submitted, the Navy decided to call for the submission of revised
proposals after the close of discussions with the possibility that a
second round of discussions, followed by best and final offers (BAFOs),
would be conducted.
The first round of discussions was conducted from May 9 through May
14, 1986.
In the course of those discussions, according to the minutes recorded
and transcribed by the Navy, ALM was advised that a weak point in its
proposal was a "lack of overall depth in personnel engineering
experience." In a dialogue with ALM which, as transcribed, is about two
single-spaced pages in length, the Navy went on to point out that the
majority of individuals ALM proposed in the "Engineer" category lacked
degrees:
"... As we the Navy went through the resumes, however, we had
trouble relating the experience we were seeing of those people to
be equal to the amount of engineering experience that you were
claiming that they would have. We didn't get a balance there, and
because of that, the experience not being totally in engineering,
we felt that was a weakness in the engineering disciplines."
Acknowledging that experience could be substituted for education, the
Navy went on to state:
". . . Our problem was you were showing, I'll just pull numbers
out, Mr. X as an engineer with no degree but 20 years of
engineering experience and proposed him to support Task 1, 3, 5, 6
and 7. As we get into his resume we can only relate perhaps five
years of his experience as actual, true engineering experience so
we take that five years, use four of that to support his education
requirements and that leaves an engineer now with one year
experience. Which, we think tends to weaken that engineering
group of people you have. Does that help answer the question
any?"
Later in these discussions, the Navy and ALM specifically discussed a
Senior Engineer and an Engineer whose resumes did not meet the minimum
requirements of their respective labor categories. This did not affect
ALM's rating, because the firm had proposed more than the minimum number
of acceptable personnel in those categories. ALM was also advised,
however, that its proposal was deficient in that two of the three Junior
Logistics Analysts proposed did not meet the minimum requirements for
that position because when experience was substituted for education,
there was not enough experience related to the RFP's Statement of Work
left to qualify these individuals.
ALM then submitted a revised proposal in which a number of personnel
changes were made. The evaluators noted that the weak point of ALM's
otherwise "average" revised proposal was a lack of overall personnel
depth and range. In fact the proposal was considered deficient in that
it did not contain the required number of acceptable resumes in the
Program Manager, Junior Engineer and Junior Logistics Analyst
categories.
In addition, some personnel in other categories did not meet the
minimum education/experience requirements, but this did not count
against ALM because it proposed a sufficient number of otherwise
qualified personnel. Those personnel whose resumes were deficient in
these categories, however, were noted for "information outposes." Among
them were a Mr. J---, proposed as an Engineer, as to whom the evaluators
noted: "Is claiming four years engineering experience instead of a
degree. The resume does not reflect engineering experience" and a Mr.
M---, proposed as a Logistics Analyst, as to whom the evaluators
concluded:
"Up until 1984 all the experience seems to be of a mechanical
nature. The SSEB needs clarification of ILS experience during
this time as a mechanic to determine actual applicable
experience."
In general, the SSEB felt that ALM was overstating its proposed
employees' experience, an observation it shared with ALM during the
ensuring discussion.
A second round of discussions was held from July 28-31, 1986. During
these discussions the Navy advised ALM that the "weakness" of its
proposal was a "lack of overall personnel depth and range," and
identified as a "deficiency" that some personnel submitted did not meet
the minimum requirements for Program Manager, Junior Engineer and Junior
Logistic Analyst. Specific individuals and the weaknesses in their
resumes were then discussed, not only as to those whose lack of
qualifications created "deficiencies" in ALM's proposal but also those
who had been noted as an "informational" matter. The latter included
Mr. J--- (". . . four years of experience instead of a degree, and we
need to see that defined a little better") and Mr. M---, as to whom the
Navy advised ALM during discussions:
". . . up until 1984 mechanical experience and we need
clarification as to his ILS experience. All this is information
for you to take another look and clarify where needed. Most of
his experience is of a mechanical nature--his resume indicated he
spent more time in mechanical work. Those are the people we need
to have you take a better look for us to evaluate. Right now they
would not be qualified to work on tie contract."
Again, as in the first round of discussions, there was a dialogue
about the type of engineering experience which would be an acceptable as
a substitute for formal engineering education: (Navy): " Mr. Q---,
proposed as Senior Engineer
with a degree in mathematics and four years' experience in writing
specifications, did not qualify for that position because he did
not have sufficient engineering experience, i.e., "work that
engineers normally do."
(ALM): "You're defining engineering as hard
core, this is getting very severe for the requirements of a
service contract.
(Navy): "I understand, but when we start talking
engineer, if he is substituting that experience for four years of
education, at that point we have to be very specific that he is in
that engineering work to get that experience. If he has spent one
year working a slide rule and that is his depth of engineering
experience, that's not going to do us any good on the contract.
Now he might have twenty years on the fringes, but we need to see
some good engineering experience. Mr. Q--- may have that out
the resume as we see it does not reflect that. We could not find
enough to meet the minimum requirements.
(ALM): "What do you want as experience, I am
getting confused as to your definition of engineers--both
education and experience.
(Navy): "Education is a four-year degree,
engineering - electrical, electronics, mechanical.
(ALM): He must actually do it? (Navy): "A person is proposed as an
engineer.
He has spent four years writing specs, and that's all. He goes
through four years of school, he has at least a broad background
in engineering discipline. Now this one has spent four years
writing specs. "If we need an engineer to go out and design
something it that point, that person with that very limited
experience in engineering, that one little portion of it, is very
hard pressed to give a quality product."
ALM subsequently submitted a BAFO in which it again revised the "mix"
of key personnel proposed for performance of the contract. Mr. J---was
moved from the Engineer to the Junior Engineer category; Mr. J---was
again proposed as a Logistics Analyst; the resumes for both were
revised.
The Navy concluded that ALM's BAFO did not meet the agency's minimum
requirements as set forth in the RFP, because it did not demonstrate
that ALM could provide the number of technically qualified key personnel
required by the solicitation. Specifically, the Navy determined that
ALM's BAFO "lacked overall personnel depth and range" and that in the
labor categories of Junior Engineer and Logistics Analyst ALM had not
offered the minimum number of qualified personnel because Mr. J--- and
Mr. M--- did not meet the education/experience criteria for positions
for which they were proposed.
The contracting officer then prepared the post-negotiation, preaward
business clearance which was approved by the Navy's review board on
October 28, 1986. In this document, the contracting officer concluded
that ALM's proposal was unacceptable due to its failure to meet the
RFP's minimum personnel requirements, and he recommended that award be
made to Mission, a technically higher-ranked offeror whose estimated
cost and fee for the 3-year period of $6,696,527 was approximately
$888,000 higher than ALM's. The Navy then gave its unconditional
approval for an award to Mission on December 5, 1986. On December 22,
1986, the contracting officer notified Mission and the unsuccessful
offerors of the award.
ALM alleges that the Navy had no rational basis to find the company's
proposal to be unacceptable because the two employees in question did
meet the RFP's minimum standards and that, in any event, after receipt
of BAFO's, the Navy should have conducted further discussions with the
company in order to correct these perceived deficiencies rather than
rejecting the company's prooosal as unacceptable and making award at a
higher estimated cost.
As noted above, the RFP specifically informed all offerors that it
was of "significant importance" that offerors propose key personnel who
would meet certain minimum education/experience requirements.
Nevertheless, ALM proposed two employees who, in the Navy's view, did
not meet these requirements. Specifically, the Navy points out, the
RFP's Statement of Work set forth minimum education and/or experience
requirements for the key personnel listed by each offeror in its
proposal. The Navy's position is that two individuals proposed by ALM
as Logistic Analyst and Junior Engineer failed to meet the minimum
requirements for their respective personnel categories, and that in its
BAFO, ALM did not list other qualified personnel in these categories to
compensate for the unqualified individuals.
The RFP's Statement of Work required a Logistics Analyst to have a
4-year degree or equivalent experience (1 year of integrated logistics
support (ILS) engineering experience could be substituted for each year
of education). 1/ In addition to the education requirement, the RFP
required a logistics analyst to have at least 4 years of
progressivelyresponsible experience related to the Statement of Work
including a minimum of 3 years on Naval Aviation/Electronic Warfare
programs. This experience was to be current (within the past 2 years)
and in addition to any experience used as a substitution for the
education requirement.
The resume of Mr. M---, who was proposed as a Logistics Analyst,
first appeared in ALM's revised proposal. This resume indicated that
Mr. M--- served as a Navy aircraft mechanic from 1959-1981; as a senior
mechanic for an airline from 1981-84; as a field service engineer for a
another corporation from 1984-85; and as a "Logistics Analyst, Field
Service Engineer" for ALM from 1985 to the present June 1986 . Since
Mr. M--- did not have a 4-year degree, under the terms of the RFP, 4
years of ILS/engineering experience would have to be substituted for
each year of education, plus at least 4 years of progressively
responsible experience related to the RFP's Statement of Work including
a minimum of 3 years on Naval Aviation/Electronic Warfare programs, a
total of 8 years' qualifying experience.
As we indicated above, the SSEB could not conclude on the basis of
this resume that Mr. M--- had sufficient qualifying experience to
satisfy the RFP's requirements because up to 1984 his experience, was
"mechanical" and his ILS experience needed clarification. The Navy
communicated these concerns to ALM during discussions and advised the
firm that "right now Mr. M--- and others would not be qualified to
work on the contract."
In its BAFO, ALM again proposed Mr. M--- as a Logistics Analyst, and
submitted for him a revised resume expanded in three respects: his
training, his experience as it related to the ILS task under this
contract, and his employment history. The Navy remained of the opinion,
however, that Mr. M--- failed to satisfy the RFP's education/experience
requirements.
In its protest, ALM contends that the Navy erred in its evaluation of
Mr. M---'s qualifications, because he has "27 years of progressively
responsible experience in Integrated Logistic Support in the very areas
set forth in the RFP," possesses an Airframe and Powerplants license
from the Federal Aviation Administration; and allegedly would qualify
"for a civil service job" as a GS-12 Logistics Management Specialist.
The Navy emphasizes that a Logistics Analyst does not personally
perform physical labor with regard to the maintenance, repair or supply
of aircraft or weapons systems, but performs a management function to
assure that all needed technical tasks are performed. "Knowledge of how
to physically perform the technical work is not the same type of
experience as identifying and planning for such work," it states, "and
knowledge concerning how the technical work is performed does not
necessarily mean that the technician is capable of performing the
overall logistics management function." Measured by this standard, the
Navy asserts, Mr. M---'s revised resume submitted with ALM's BAFO does
not establish that he has the necessary 3 years' qualifying experience.
With regard to his 22 years of service as a Navy aircraft mechanic,
the Navy notes that no logistics-type experience is claimed for Mr. M---
until 1979-81, when he was an "E-8, Senior Chief, Aviation structural
mechanic safety and ILS analyst" with respect to various types of
aircraft. The meaning of "ILS analyst"--which had been added to the
resume--in this context was not clear to the Navy, to which it appeared
that; Mr. M---'s primary responsibilities were as an aviation
structural mechanic, and that of the aircraft systems listed, only one
was equipped with an electronic warfare system which would be included
under the scope of this contract.
The Navy also regards Mr. M---'s study for, and receipt of, an
Airframe and Powerplants license during the 1981-83 period as a
"technical achievement in a specialized area" but not as logistics
management experience which qualifies for credit under the RFP. The
Navy similarly regards this individual's 1983-84 experience as a senior
mechanic for an airline. It therefore is of the opinion that ALM's
proposal did not demonstrate that he had the requisite 8 years of
qualifying experience.
The Navy also determined that the qualifications of Mr. J---,
proposed by ALM for the Junior Engineer category, failed to meet the RFP
requirements. The RFP required that a Junior Engineer have a 4-year
degree from an accredited engineering school or equivalent experience (1
year of engineering experience could be substituted for each year of
schooling), plus 2 years' experience related to the RFP's Statement of
Work in addition to any experience used as a substitution for the
education requirement. Mr J---'s services were first proposed by ALM in
its revised proposal as an Engineer. (In addition to a 4-year degree or
equivalent, this category required 4 years engineering experience with
at least 3 years experience related to Naval Aviation/Electronic Warfare
programs.) The Navy determined that Mr. J--- failed to qualify for the
Engineer position. because of experience deficiencies and, as we have
noted above, advised ALM of that fact during the discussions which were
held on July 30, 1986. His inability to meet the requirements for the
Engineer position was not termed a deficiency at this stage, however,
because ALM included enough other qualified personnel in this category
in its revised proposal to satisfy the RFP requirements.
Although in its BAFO ALM moved this individual to the Junior Engineer
category, the Navy determined that his experience also failed to satisfy
the requirements for this position. In order for an individual lacking
a degree, as did Mr. J---, to qualify as a Junior Engineer, 6 years of
engineering experience, four of which would substitute for the degree
requirement, would have been necessary. At the BAFO stage of the
procurement, the failure of the employee to qualify as a Junior Engineer
did constitute a deficiency in ALM's proposal because ALM did not list
enough other qualified individuals in this category to satisfy the
requirements of the RFP.
Mr. J---'s resume, as it appeared in the protester's BAFO, states
that from 1976-81 he served in the Navy as an electronic warfare
technician, and that his duties as an E-6 Leading Petty Officer of a
shipboard electronic warfare work center included "operations and
maintenance (corrective and preventive) of all shipboard electronic
warfare equipment." From 1981 until the present August 1986 he worked
as a field service maintenance representative in conjunction with the
Saudi Naval Expansion Program.
The Navy's position is that as late as 1981, Mr. J--- was an enlisted
electronic warfare technician primarily involved in operations and
maintenance tasks, and while apparently a trained and competent
technician, was not performing "engineering" tasks. The Navy is of a
similar view with regard to Mr. J---'s work since 1981.
ALM disagrees with the Navy's assessment of Mr. J---'s experience,
claiming that all 10 years of it constituted relevant "practical
experience," more than enough to qualify him for the position of Junior
Engineer.
In a similar case in which an offeror was determined to be
technically unacceptable because of deficiencies in the resumes of
proposed key personnel, which deficiencies were not corrected despite
two inquiries by the contracting agency, we stated our applicable
standard of review was as follows:
"In considering a protest of this nature, we do not evaluate
proposals and make our own determination as to their relative
merits. Houston Films, Inc. (Reconsideration), B-184402, June 16,
1976, 76-1 C.P.D. P 380. That function is the responsibility of
the contracting agency, which must bear the burden of any
difficulties resulting from a defective evaluation. Procuring
officials enjoy a reasonable degree of discretion in determining
the technical adequacy of proposals, and their determination will
not be disturbed unless shown to be unreasonable or otherwise in
violation of procurement statutes or regulations. Essex Electro
Engineers, Inc., et al., B-211053.2, et al., Jan. 17, 1984, 84-1
C.P.D. P 74. Furthermore, the protester has the burden of
affirmatively proving its case, and the fact that the protester
does not agree with the agency's evaluation of its proposal does
not itself render the evaluation unreasonable. Id." MetaMetrics
Inc., B-219524, Oct. 3, 1985, 85-2 C.P.D. P 377 at 3.
We conclude that the Navy's evaluation of ALM's technical proposal
was reasonable. The solicitation made clear that an offeror's personnel
resources, in particular the degree of its proposed employees'
experience, was a major technical evaluation criterion. The minimum
educational/experience qualifications for the various categories of key
personnel were spelled out in the RFP and in two rounds of discussions
with ALM the Navy explored, in detail, both its general philosophy in
crediting individuals' experience and the deficiencies it observed in
specific individuals' resumes, including those whose lack of
qualification resulted in the Navy's final conclusion that ALM's
proposal was technically unacceptable.
With regard to the Logistics Analyst and Junior Engineer positions at
issue, ALM proposed individuals whose lack of a 4-year degree meant that
the Navy had to evaluate the experience related in their resumes to see
if it could be substituted for the education requirement and also
satisfy the applicable experience requirements. The Navy determined
that it could not, for the reasons we have explained above. Although
the protester takes issue with the Navy's determination, after examining
the record including the resumes, the SSEB's evaluation and the minutes
of the discussions, we are unable to conclude that the Navy unreasonably
abused its discretion in finding that the individuals in question lacked
the necessary management/engineering experience.
Given that ALM's proposal did not meet the Navy's minimum
requirements, the proposal was properly rejected as unacceptable.
Consequently, ALM's lower estimated cost for the work was not for
consideration.
ALM also contends that the Navy should have conducted a third round
of discussions to resolve the remaining deficiencies in ALM's proposal.
We note, however, that the Navy specifically informed ALM during
discussions of the deficiencies it perceived in the qualifications of
Mr. M--- and questioned the adequacy of the qualifications of Mr. J---.
In view of the thoroughness and specificity of the two rounds of
discussions which were held, we do not believe the Navy was obligated to
reopen discussions following receipt of BAFOs. Space Communications
Company, B-223326.2; B-223326.3, Oct. 2, 1986, 86-2 C.P.D. P 377 at 8.
Finally, in its post-conference comments, ALM asserts that the Navy
did not apply a consistent rationale in evaluating the offers for award
because although it stated that technical considerations were more
important than cost by passed the technically highest-ranking offeror in
order to make award to Mission, but then relied on Mission's technical
superiority in not making award to ALM at a lower cost.
The record shows that the Navy considered the highestranking offeror
(which has not protested its nonselection) and Mission to be essentially
equal technically. After reviewing the 2 firms' cost proposals---which
the Navy considered reasonable and realistic--the agency determined that
the higher-scored firm's technical proposal was not worth the
considerable cost premium involved. ALM's BAFO, in contrast, was
determined not to meet the government's minimum technical requirements
and it therefore was not recommended for award even though its proposed
costs (which the Navy found "questionable and unrealistic") were lower.
ALM's competitive position was not comparable to the highest-ranked
offeror's and we do not believe the record supports ALM's assertion that
the Navy used inconsistent rationales in selecting Mission for award.
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ The RFP defined ILS as a composite of all the support
considerations necessary to assure the effective and economical support
of a system for its lift cycle. ILS encompasses the identification,
selection, acquisition, scheduling, stocking and distribution of spares,
repair parts, facilities, support equipment, trainers, technical
publications, contractor engineering and technical services, and
personnel training as necessary to provide the operating forces with the
capability to keep an end item functional. Further, the RFP
incorporatad a Defense Department Directive which listed the following
work elements as being intergral to the meaning of ILS: maintenance
planning, personnel identification and acquisition, supply support and
eguipment, technical data, training and training support, computer
resources support, facilities, packaging, handling, storage and
transportation.
Matter of: DJW Services
File: B-225587.2
Date: September 29, 1987
Contracting officer's award of a contract to the second low bidder
following an initial determination by the Small Business Administration
(SBA) that the low bidder was other than small, without waiting for the
result of an appeal to the SBA's Office of Hearings and Appeals, was
proper and did not constitute an abuse of the contracting officer's
discretion even though the contracting officer was notified of the
appeal prior to making the award.
DJW Services protests the award of a contract to Jantec,
Inc., under invitation for bids (IFB) No. F64605-86-B-0112, issued by
the Department of the Air Force as a total small business set-aside.
The solicitation was for the operation of the Base Information Transfer
System and Postal Service Center of Hickam Air Force Base, Hawaii. DJW
protests that it was improper for the agency to award the contract while
DJW was appealing a decision by the Small Business Administration (SBA)
Regional Office that DJW was not a small business concern for purposes
of this solicitation. The protester argues that in order to proceed
with the award under these circumstances, the Air Force was required by
regulation to show that the award was necessary to protect the public
interest, and that the agency here did not satisfy this requirement
because award to Jantec was at a higher cost to the government.
We deny the protest.
At bid opening, DJW's bid was third low. The first and second low
bidders under the solicitation were ineligible for award for reasons
unrelated to this protest. DJW's bid became the low bid, but the agency
determined DJW to be nonresponsible based on a negative preaward survey
and referred the matter to the SBA Regional Office for issuance of a
certificate of competency (COC). In conjunction with the request for
the COC, the Air Force expressed a concern that DJW might not meet the
small business standard in the solicitation because of an alleged
affiliation with another firm, and requested that the SBA perform a
small business size determination. The SBA Regional Office found that
the two firms were affiliated, and that DJW was large for purposes of
this solicitation. On May 8, 1987, the SBA Regional Office therefore
denied the request for a COC. On May 16, DJW filed an appeal with the
SBA's Office of Hearings and Appeals; a copy of the appeal was sent to
the contracting officer at that time. On June 5, while the appeal was
pending, the contracting officer determined that it would not be in the
public interest to delay the award further, and awarded the contract to
Jantec. On July 1, 1987, the SBA determined that DJW was small.
Under the Federal Acquisition Regulation (FAR), 48 C.F.R. Sec.
19.302(h) (1) (1986), when a size status protest has been filed, a
contracting officer may not make an award until the SBA Regional Office
has issued a determination or until 10 working days after SBA's receipt
of the protest, whichever occurs first. After the 10 days have expired,
the contracting officer may--but is not required to--continue to
withhold award. Id., Sec. 19.302(h) (2). Although the regulations
provide for an appeal from an SBA Regional Office's determination by any
concern that has been adversely affected, there is no requirement that
the contracting officer withhold award during the appeal period. Id.,
Sec. 19.302(i); H. Angelo & Co., Inc., B-218573, May 9, 1985, 85-1 CPD
P 519. Although to make an award before the initial 10 days expire the
contracting officer must make a finding that this must be done to
protect the public interest, FAR 48 C.F.R. Sec. 19.302(h) (1), there is
no such requirement for justifying an award during the appeal period.
JRR Construction Co., Inc., B-220592, Oct. 4, 1985, 85-2 CPD P 383.
Therefore, the protester's argument that the contracting officers
determination did not satisfy the public interest standard is
irrelevant. Nevertheless, we have examined the circumstances prompting
award notwithstanding the appeal and believe they justified the award.
Bids had been opened on December 6, 1986, and it was not until 6 months
later, June 5, 1987, that award was made. During the period between bid
opening and award, the critical services were obtained on a
month-to-month basis from the incumbent contractor and by reassigning
agency personnal from their primary duties. It is reported that this
method of acquiring the service was considered unsatisfactory as there
were performance problems and security violations. Thus, we believe the
contracting officer's determination to proceed with the award was
reasonable.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Convex Computer Corporation
File: B-225583
Date: March 17, 1987
1. Award on an initial proposal basis, without discussions, is proper
where the solicitation advises offerors of this possibility and the
competition and prior cost experience clearly demonstrate that
acceptance of an initial proposal will result in the lowest overall cost
to the government.
2. Where the contracting agency decides to make award on an initial
proposal basis, an initial proposal taking exception to a material
solicitation requirement is unacceptable and must be rejected.
Convex Computer Corporation protests the rejection of its proposal as
technically unacceptable under request for proposal (RFP) No.
N60921-86-R-0127, issued by the Naval Surface Weapons Center, Silver
Spring, Maryland. We deny the protest.
The RFP solicited offers for a Digital Equipment Corporation (DEC)
VAX 8800 system, and associated items, or equal, including preventive
and remedial maintenance and certain system software. The RFP stated
that award would be made to a single offeror for all items and that
offers for less than all items would be considered unacceptable. The
RFP contained basic and optional requirements and provided that the
government would evaluate offers by adding the total price for the basic
requirement to the total price of all options. Thus, under the
solicitation's scheme, competition was essentially based on price among
offerors who proposed the brand name product or, alternatively, an equal
product that met the solicitation's mandatory requirements and
specifications ("salient characteristics").
In August 1986, prior to the amended closing date of October 10,
1986, Convex wrote to the agency, alleging that certain specifications
were allegedly restrictive and therefore should be eliminated from the
solicitation. Specifically, Convex challenged specification C.2.20.8,
which required offerors to provide all hardware and software for a
graphics work station that can execute compiled Fortran or Pascal
programs. Further, Convex questioned specification No. C.2.2.c., which
required the system to have no less than eight RS-232 asynchronous
communications ports and one synchronous RS-232 port that were required
to be compatible with certain equipment. Convex also wrote the agency's
competition advocate in support of its position that these
specifications, among others, were restrictive. The contracting officer
and the competition advocate responded to Convex and informed the firm
that these specifications were valid requirements which were needed by
the using agency to conduct research and development tasks and that the
specifications represented the minimum needs of the Navy. From a
contemporaneous letter from Convex to the agency, it also appears that
Convex also knew that the specifications, as a mandatory requirement,
also called for a "battery backup" to provide an uninterruptible power
source for the system. At that time, Convex considered this requirement
to have "no functional value to the government."
Convex and four other offerors submitted proposals by the October 10
deadline. In its proposal, Convex stated that "Convex will not provide
installation and maintenance of the interruptible power system and
batteries, a component of CLIN 0001AA." Further, with respect to the
communications ports, Convex stated that it "does not provide nor intend
to provide software to support synchronous communications. . . ." The
Navy determined that without this software, systems communications would
be restricted and required graphics functions would be unsupported.
Finally, the Navy also found that Convex failed to propose a work
station capable of executing Fortran and Pascal programs. Subsequently,
having decided to make award based on the initial proposals, without
discussions, the Navy advised Convex that its proposal had been rejected
as technically unacceptable and award was made to Digital Equipment
Corporation, which was the only firm found to be technically acceptable
and which offered the lowest price among all offerors which had
submitted prices for all items as required by the solicitation. 1/
In its initial protest, Convex, among other things, challenged the
solicitation's specifications as restrictive. However, in its comments
on the agency report, Convex "rescinded" these allegations and now
simply contends that its proposal was improperly rejected by the Navy
without discussions.
As a general rule, a contracting agency may make an award on the
basis of initial proposals, without holding discussions or requesting
best and final offers, provided that (1) the solicitation advises
offerors of this possibility, and (2) the competition or prior cost
experience clearly demonstrates that acceptance of an initial proposal
will result in the lowest overall cost to the government. 10 U.S.C.
Secs. 2305(a)(2)(B)(ii), 2305(b)(4)(A)(ii)(Supp. III 1985). Here, the
Navy's RFP specifically advised offerors that discussions might not be
held and that award may be made on the basis of initial proposals.
Further, Digital was the low offeror for all items required by the
solicitation. Moreover, the Navy had access to extensive cost
experience with Digital's proposed prices and the Navy's price analysis
of the commercial items proposed by Digital was based on published U.S.
price lists and General Services Administration Schedule catalog price
lists which supported the Navy's determination that award to Digital
would result in the lowest overall cost to the government. Thus, we
have no basis to question the contracting officer's determination to
award the contract on the basis of initial proposals.
As for the rejection of Convex's initial proposal, we have repeatedly
held that where the contracting agency decides to make an award based on
initial proposals, it is proper to reject an offeror's initial proposal
if it takes exception to a material solicitation requirement. Tiernay
Manufacturing Co., B-209035, Dec. 20, 1982, 82-2 CPD P 552; SAI
Comsystems Corp., B-189407, Dec. 19, 1977, 77-2 CPD P 480; Tracor
Applied Sciences, B-219735, Sept. 26, 1985, 85-2 CPD P 343. Here, at
least with respect to the mandatory requirement concerning an
uninterruptible power supply, Convex knowingly took exception to this
requirement in its initial proposal and therefore the proposal was
properly rejected. See generally Computervision Corp., B-224198, Nov.
28, 1986, 86-2 CPD P 617.
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ Convex was the only firm that was nominally lower in price that
Digital. However, Convex failed to submit prices for various items in
the schedule with the notation, "not proposed." The Navy tried to price
certain of these ommissions but, at least with respect to the
uninterruptible power source, was unable to do so.
Matter of: Blair Electrical Construction, Inc.
File: B-225582.2
Date: January 13, 1987
1. General Accounting Office will not consider complaint that
protester lost the competition because in preparing its bid it used a
high quotation from a prospective subcontractor the protester later
discovered was affiliated with the firm that submitted the low bid.
Since the government had no part in the subcontractor's actions or the
protester's bidding decision, the matter essentially involves a dispute
between private parties, and therefore is not a matter to be resolved
through the bid protest process.
2. Decision as to whether a prospective contractor is responsible is
within the discretion of the contracting officer, and GAO will not
review an affirmative determination in that regard except in limited
circumstances.
Blair Electrical Construction, Inc., protests the award of a contract
to Electrical Systems Engineering (ESE), the low bidder under Department
of the Navy invitation for bids (IFB) No. N62474-86-B-8077. Blair
asserts that while preparing its bid Blair was convinced by General
Switchgear, a potential subcontractor, to use General Switchgear's
quotation in lieu of a lower one from another subcontractor. Blair
states that it discovered after bid opening that General Switchgear was
affiliated with ESE, and protests that it would have submitted a bid
lower than ESE's had it used the lower quotation, i.e., Blair would have
won the competition but for the unfair competitive actions of General
Switchgear and ESE.
We will not consider the protest. Clearly, the government had no
part in General Switchgear's actions or in Blair's decision to use a
higher subcontractor quotation that it otherwise would have. As such,
the matter involves a dispute between private parties for resolution
through litigation, not the bid protest process. See Monarch
Engineering Co., B-218374, June 21, 1985, 85-1 C.P.D. P 709; DelRocco &
Sons, Inc., B-218314, Mar. 22, 1985, 85-1 C.P.D. P 339.
To the extent Blair's allegation might have an impact on ESE's
eligibility for award, it involves ESE's responsibility as a prospective
contractor. Federal Acquisition Regulation, 48 C.F.R. Sec. 9.104
(1985). The decision as to whether a firm is responsible is with the
discretion of the contracting officer, and our Office will not review an
affirmative determination in that regard except in limited
circumstances. 4 C.F.R. Sec. 21.3(f)(5) (1986).
The protest is dismissed.
Robert M. Strong
Deputy Associate
General Counsel
Matter of: Harrison Western Corporation
File: B-225581
Date: May 1, 1987
1. Agency properly cancels solicitation after bid opening on the
basis of price unreasonableness where the low responsive bid exceeds the
government estimate by more than 50 percent and the protester fails to
substantiate its allegation that the government estimate is unreasonably
low.
2. General Accounting Office denies a protest alleging that an
agency's decision to cancel all bids for price unreasonableness stemmed
from the agency's desire to favor one particular firm where the
protester fails to present any evidence demonstrating bias other than
the fact that the decision to cancel was made after the apparent low
bidder withdrew due to a mistake in bid.
Harrison Western Corporation protests the Bureau of Reclamation,
Department of the Interior's, rejection of all bids received under
invitation for bids (IFB) No. 6-SI-6002310, and the resolicitation of
the requirement under revised specifications. The Bureau states that
this decision was based on the determination that all otherwise
acceptable bids were unreasonable as to price. Harrison disputes this
finding and implies that the actual motivation for this decision was
suspect. We deny the protest.
The Bureau of Reclamation issued the solicitation on September 19,
1986 for modifications to the Shoshone Canyon Conduit, part of the
Pick-Sloan Missouri Basin Program, in Wyoming. The project generally
entails construction of a cast-in-place, reinforced concrete energy
dissipation structure and retaining wall, as well as road work, tunnel
work, gate chamber modifications, and adit construction. The
solicitation contained a detailed statement of work and a bidding
schedule listing 174 separate line items. A single contract was to be
awarded to the firm bidding the lowest price for the entire project.
The solicitation further stated that the estimated cost range of the
project was between $10 and $25 million.
Five firms submitted bids by the October 30 closing date. These bids
and the in-house engineer's estimate for the project were as follows:
Engineer's Estimate $ 9,550,389
Avery Structures, Inc. 10,589,453
Harrison Western Corp. 15,104,937
Constructors-Pamco and
Traylor Brothers, Inc.,
a Joint Venture 15,665,860
Frontier-Kemper Constructors, Inc. 15,872,731
Fairfield Constructors, Inc. 16,619,505
Avery, after establishing by clear and convincing evidence that it
had made a mistake in its bid (but not its intended bid price), was
permitted to withdraw in accord with the procedure set forth in the
Federal Acquisition Regulation (FAR), 48 C.F.R. Sec. 14.406-3(c) (1986).
On December 5, 1986, the contracting officer advised the other bidders
that each of their bids had been rejected based upon a determination of
price unreasonableness. The Bureau then canceled the IFB and, on
December 8, resolicited under amended specifications. Bid opening has
been postponed indefinitely pending the resolution of this protest.
Harrison's primary basis of protest is that the agency lacked a
cogent and compelling reason to cancel the solicitation, as required by
applicable regulations. The protester recognizes that in appropriate
circumstances, agencies are permitted to reject all bids for price
unreasonableness, based on a comparison of the bids received with an
independent government cost estimate. Such a determination, the
protester continues, is unreasonable where the agency fails to consider
all factors indicating that the government estimate is of questionable
accuracy. The protester maintains that the burden of proof that all
such factors were considered lies with the agency. In this case, the
protester alleges, the agency simply concluded, without substantiation,
and contrary to the price range stated in the IFB, that the government
estimate was reasonable. This lack of supporting documentation,
Harrison concludes, mandates that our Office find that the Bureau acted
arbitrarily and capriciously in rejecting all bids for price
unreasonableness. The firm seeks an award to itself under the original
IFB.
Additionally, Harrison argues that the record reflects that the
government estimate was unreasonable. According to the protester,
underground construction is very complex and expensive to bid, and to
approximate a project's cost requires an intensive, lengthy analytical
process. The protester thus concludes that the four bids, ranging in
price from $15.1 to $16.6 million, submitted by the remaining
experienced bidders indicate the current market value of this project.
Two of the other rejected bidders, Frontier and Fairfield, have
submitted comments to our Office, concurring with this conclusion.
As pointed out by Harrison, the general rule is that an IFB may be
canceled after bid opening only when there is a cogent and compelling
reason to do so. The FAR specifically permits such action where all
otherwise acceptable bids received are at unreasonable prices. 48
C.F.R. Sec. 14.404(c) (6); Airborne Services, Inc., B-221894 et al.,
June 4, 1986, 86-1 CPD P 523. Our Office has stated that a
determination concerning price reasonableness is a matter of
administrative discretion that we will not question unless the
determination is unreasonable or the protester demonstrates fraud or bad
faith on the agency's part. See Freund Precision, Inc., B-199364, et
al., Oct. 20, 1980, 80-2 CPD P 300. The agency may base its
determination concerning price reasonableness upon a comparison with
such factors as government estimates. Omega Container, Inc.,
B-206858.2, Nov. 26, 1982, 82-2 CPD P 475.
In this instance, the contracting officer made his determination
solely on the basis of a comparison of the submitted bids with the
government estimate. (The agency states that, contrary to the
protester's allegation, there was no determination that bid prices
exceeded available funds.) In any event, Harrison's low bid exceeded the
estimate by more than 50 percent. We believe that this provides a
reasonable basis for the decision to cancel and resolicit. See Hoboken
Shipyards, Inc., B-223581, et al., Sept. 19, 1986, 86-2 CPD P 324.
Previously, we have found cancellation to be justified where the low
responsible bid exceeded the government estimate by as little as 7.2
percent. Building Maintenance Specialists, Inc., B-186441, Sept. 10,
1976, 76-2 CPD P 233.
While Harrison argues that the government estimate provides an
invalid comparison, it has provided little substantiation for its
allegation that it was unreasonably low. Beyond general assertions that
the work is question is complex and that the bids submitted by highly
experienced contractors must reflect current market conditions, Harrison
merely speculates that the Davis-Bacon minimum wage rates utilized in
preparation of the government estimate were unrealistically low, since
experienced miners must be paid more than the minimum. The protester
asserts that use of minimum wage rates resulted in the estimate being
low by approximately $300,000. We find this insufficient to disturb the
agency's conclusion that all bids were unreasonable as to price. See
Spruill Realty/Construction Co., B-209148.2, Jan. 31, 1983, 83-1 CPD P
102. Considering the discrepancy between the government estimate and
the low acceptable bid, it is extremely doubtful that an increase of
$300,000 in the estimate would have changed the contracting officer's
determination.
Furthermore, we are not persuaded by Harrison's contention that it
was unable to submit additional evidence in view of the Bureau's
refusal, in response to a Freedom of Information Act request, to release
supporting documentation for the inhouse estimate. While access to the
government's worksheets may have been beneficial, Harrison nevertheless
could have identified those of the 174 separate line items for which it
believed that the government estimate was unreasonably low. Harrison,
however, did not submit any such evidence. The Bureau, at our request,
furnished our Office with copies of the backup material for the in-house
estimate, and our in camera examination of this material does not
establish that the estimate was unreasonable.
Finally, when comparing the government estimate to the remaining bids
on an item-by-item-basis, we find a wide discrepancy among bids for
particular items, so that the low composite bid exceeded the estimate by
significantly less than the protester's low individual bid. While this
method of comparison by itself does not conclusively demonstrate the
reasonableness of the government estimate, it provides additional
support for our declining to object to the contracting officer's
determination. Accordingly, we deny this basis of protest.
Harrison also questions the Bureau's motivation for rejecting all
bids. The protester states that the agency's decision to reject all
bids was only made after Avery was unable to prove its intended bid
price. This sequence of events, the protester continues, suggests that
the Bureau intended to favor Avery at the expense of Harrison and the
other bidders whose bid prices have been exposed. The record, however,
contains no evidence of bias, and it indicates that the Bureau also
found Avery's claimed intended bid price unreasonable. Moreover, the
resolicitation contains an estimated price range of only $5 to $10
million. We therefore reject Harrison's allegation of bias as mere
speculation. See Lithographic Publications, Inc., B-217263, Mar. 27,
1985, 85-1 CPD P 357.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Louis Stilloe Roofing & Siding, Inc.-- Reconsideration
File: B-225580. 2
Date: March 16, 1987
Request for reconsideration of prior decision dismissing a
subcontractor protest is denied. Although the protester asserts that
its protest should have been considered because the contract award was
made by or for the government, the protester would not be in line for
award if its protest ware upheld, and therefore, is not an interested
party to protest in any event.
Louis Stilloe Roofing & Siding, Inc. requests that we reconsider our
decision to dismiss its protest of the award of a contract to Harris &
Avery by the General Electric Corporation (G.E.). The contract is for
roofing rehabilitation at a government-owned facility which G.E.
administers and operates for the Department of the Air Force. We deny
the request for reconsideration.
We dismissed Stilloe's original protest under section 21.3(f) (10) of
our Bid Protest Regulations, which provides that we will not consider
subcontractor protests except where the subcontract is awarded by or for
the government. See 4 C.F.R. Sec. 21.3(f)(10) (1986). Stilloe now
argues that the award in this case was made for the government and that
we therefore should consider the protest on its merits. The agency
disputes Stilloe's position and argues that G.E. was not acting for the
government in this case.
We find it unnecessary to resolve this dispute concerning whether the
contract award was made for the government. We reach this conclusion
because the record shows that Stilloe is not an interested party to
challenge the contract award in any event. As the Air Force points out,
Stilloe was only the third low bidder after Harris and Avery and
Weathermaster Roofing Company. Although Stilloe has alleged that Harris
and Avery's bid should have been rejected because the firm failed to
provide a required performance bond, the protester has not challenged
the acceptability of Weathermaster's bid. Under these circumstances,
Weathermaster, not Stilloe, would be in Vine for award if we sustained
the protest. Therefore, Stilloe is not an interested party to protest.
Second Source Computers, Inc., B-216735, Jan. 25, 1985, 85-1 CPD P 100.
We find no merit to Stilloe's assertion that it should be considered
an interested party because its information indicates that Weathermaster
may have to decline the award at this point, or because Weathermaster
may not be found "qualified" for the award. These assertions, based
solely on supposition, are too tenuous to support a finding that Stilloe
is an interested party to challenge the award here. See Automated
Services, Inc., B-221906, May 19, 1986, 86-1 CPD P 470.
We therefore deny Stilloe's request that we reconsider our prior
dismissal. The record shows that reconsideration would serve no useful
purpose as Stilloe is not an interested party to protest in any event.
Harry R. Van Cleve
General Counsel
Matter of: AWD Mehle GmbH--Request for Reconsideration
File: B-225579.2
Date: June 11, 1987
General Accounting Office Bid Protest Regulations do not permit a
piecemeal presentation of evidence, information or analysis. Thus,
where protester presents no evidence that the information on which it
bases its reconsideration request could not have been presented prior to
the closing of the original protest record, the request for
reconsideration will not be considered.
AWD Mehle GmbH requests reconsideration of our decision, AWD Mehle
GmbH, B-225579, Apr. 16, 1987, 87-1 CPD P 416, in which we denied
Mehle's protest of the Air Force's cancellation of request for proposals
(RFP) No. F61521-86-R-2334 for replacement of windows and building
repairs on Ramstein Air Base. We held that cancellation of the RFP was
proper, despite the inadvertent disclosure of the low offeror's price,
because the agency concluded that the solicitation contained defective
estimates and because the solicitation requested lump-sum prices on
estimated quantities of work, but also provided that the contractor
would be responsible for performing all required work even if the
workload exceeded the RFP estimates. We were concerned that this method
of defining the agency's needs was not sufficiently precise and
encouraged offerors to include in their prices contingencies to cover
the possibility that they might be expected to perform work in excess of
the estimated workload. We recommended that the requirement be
resolicited with a revised pricing format.
On April 10, 1987, a month and a half after the protester filed its
comments on the agency report, Mehle submitted for our consideration an
additional affidavit signed by its owner, Mrs. Leopoldina Mehle. We
notified Mehle's local counsel that because the record was closed, we
would be unable to consider the submission. Mehle has now resubmitted
the affidavit and requests that we take it into account in our
reconsideration.
Mrs. Mehle states in her affidavit that the contracting officer told
her that she had decided to award the contract to Mehle, had contacted
the area engineers' office to obtain their approval of the materials
Mehle intended to install, and had then delivered the contract package
to the cognizant legal officer. Mrs. Mehle further attests that she was
told "by persons directly concerned" that the legal officer, after
observing that Mehle had increased its price in its best and final
offer, had stated that "if she's going to raise her price, she's not
going to get this contract." The Air Force has submitted affidavits from
the contracting officer and legal officer denying these allegations.
Mrs. Mehle's affidavit does not establish the date on which she
learned the information contained in the affidavit, and we therefore
have no basis upon which to conclude that this information could not
have been timely presented with the protester's comments on the agency
report during our consideration of the initial protest. Our Bid Protest
Regulations require that a request for reconsideration contain a
detailed statement of the factual and legal grounds upon which reversal
or modification of a decision is deemed warranted, and that it specify
any errors of law made or information not previously considered. 4
C.F.R. Sec. 21.12(a) (1986). Our regulations do not permit a piecemeal
presentation of evidence, information or analysis. Where, as here, a
party submits in its request for reconsideration information that could
have been timely presented during our consideration of the protest, that
information does not provide a basis for reconsideration. Joseph L. De
Clerk and Associates, Inc.--Request for Reconsideration, B-221723.2,
Feb. 26, 1986, 86-1 CPD P 200.
Moreover, even assuming that the information related to Mrs. Mehle is
accurate, we continue to be of the view that cancellation of the RFP was
proper, given the solicitation's deficiencies. Cancellation may be
justified on grounds not advanced by the agency so long as they would
have supported cancellation if they had been stated originally. See
John C. Kohler Co., B-218133, Apr. 22, 1985, 85-1 CPD P 460. In other
words, even if the protester were able to establish that the Air Force
originally determined to cancel the RFP because Mehle had raised its
price, we would still consider as justification for the cancellation the
solicitation's failure to express with precision the agency's actual
needs and the inappropriate pricing format.
The request for reconsideration is denied.
Harry R. Van Cleve
General Counsel
Matter of: AWD Mehle GmbH
File: B-225579
Date: April 16, 1987
1. Protest of cancellation of request for proposals after disclosure
of low offeror's price is denied where other offerors' repeated
questions concerning solicitation quantities and wide disparity in the
prices received called into question the accuracy of the agency's
estimates. Where there is a material discrepancy between the
solicitation's estimates and actual anticipated needs, award under that
solicitation is improper.
2. Solicitation for estimated quantity of work which provides that
the contractor will be responsible for performing all of the work
required whether or not the actual quantity exceeds the RFP estimate but
does not ask for unit and extended prices contains inappropriate pricing
format since offerors will be encouraged to factor into their prices
contingencies to cover the possibility that they may be required to
perform work in excess of the estimated quantities.
AWD Mehle GmbH protests the Air Force's cancellation of request for
proposals (RFP) No. F61521-86-R-2334 for the replacement of windows and
the repair of exterior building surfaces for 29 apartment buildings on
Ramstein Air Base. Mehle argues that the Air Force did not have a
reasonable basis for canceling the solicitation. We deny the protest.
The RFP asked offerors for a lump sum price on each of two projects:
RAM 86-0012B for the replacement of windows and RAM 86-0012C for the
maintenance of exterior surfaces. The solicitation also requested a
total price for both projects. The specifications described the tasks
to be performed and the estimated quantity of work under each task. For
example, item 2.02 provides for the removal and replacement of 777
windows. The solicitation cautioned that the quantities listed were
merely estimates. There was no provision for the insertion of a unit
price for any of the items making up the two projects. Award was to be
made to the firm offering the lowest total price for the two projects.
Fourteen initial offers were received in response to the RFP;
Mehle's was the lowest. Due to the wide range of prices received, the
contracting officer states that he suspected that the low offers might
be mistaken and requested price breakdowns from the three low offerors.
In examining the price breakdown of the second low offeror, the
contracting officer discovered that its estimates of the amount of work
to be performed on a number of the tasks differed from the government's
estimates. The offeror explained that based on its own experience of
working on the Ramstein apartment buildings, it knew that the government
figures were incorrect. The Air Force reexamined its own estimates in
light of these discussions and issued a solicitation amendment that
deleted one task and reduced the quantity estimate for another by 50
percent.
After discussing these changes with the offerors, the Air Force
requested best and final offers. Of the 11 offerors who responded, 10
reduced their prices. Mehle increased its price, but remained the low
offeror.
After the best and final offers had been received, another offeror
contacted the contracting officer and alleged that the specifications
still contained some discrepancies. Although some agency personnel
concluded that the estimates were correct, the contracting officer
subsequently decided that the repeated allegations regarding
discrepancies in the quantities indicated that offerors did not have a
common understanding of the scope of the project. According to the
agency, the increase in the low offeror's price also concerned the
contracting officer since the solicitation had been amended to decrease
quantities. He was also alarmed by the variation in the prices received
(4,320,000 DM-5,875,099 DM). Thus, he again requested price breakdowns
from the three low offerors. Based on these breakdowns, he concluded
that one or more of the offerors did not have a clear understanding of
the project, and that further discussions would be necessary.
At this point, it was discovered that a letter stating that a
contract had been awarded to Mehle and revealing that firm's total price
had inadvertently been mailed to the other offerors. The contracting
officer determined that the continuation of discussions in the face of
such a revelation would result in an auction and elected to cancel the
RFP.
Mehle argues that the contracting officer did not have a reasonable
basis to cancel the RFP. The protester says that the RFP did not
contain any deficiencies and questions the propriety of the contracting
officer's reliance on comments from other offerors in determining that
the solicitation contained defective estimates. The protester further
complains that it is unfair for the agency to cancel the RFP and
resolicit the requirement after its prices have been revealed.
Contracting agencies have broad discretion in determining when it is
appropriate to cancel a solicitation. In a negotiated procurement the
contracting officer need only have a reasonable basis for cancellation
after receipt of proposals, as opposed to the "cogent and compelling"
reason required for cancellation of a solicitation after sealed bids
have been opened. Cadre Technical, Inc. et al., B-221430 et al., Mar.
14, 1986, 86-1 CPD P 256. The standards differ because in sealed bidding
competitive positions are publicly exposed as a result of the public
opening of bids, while in negotiated procurements there is no public
opening. Allied Repair Service, Inc., B-207629, Dec. 16, 1982, 82-2 CPD
P 541. The question therefore arises as to which standard should apply
in a situation such as this where an offeror's price has been exposed
after receipt of proposals in a negotiated procurement. We need not
resolve this issue here because we believe that under either test the
cancellation was justified.
The agency reports that the contracting officer determined that the
repeated questions raised by offerors concerning solicitation quantities
called into question the accuracy of the estimates included in the RFP.
1/ Further, the contracting officer explains that he was concerned about
the disparity in the prices received both in the initial and in the best
and final offers and by the fact that the lowest best and final offer
exceeded the revised government cost estimate by over 800,000 D.M. In
an attempt to alleviate the prejudice to the low offeror caused by the
exposure of its total price, the agency intends to resolicit the
requirement so that separate awards can be made for the window work and
the other outside maintenance work.
While it is indeed unfortunate that the protester's price was
revealed, it is nevertheless clear that the solicitation was deficient.
2/ First, although the agency characterizes the solicitation as
ambiguous, we think that in fact the problem is that the solicitation's
quantity estimates did not precisely express the agency's actual
replacement and repair needs. We have held that where there is a
material discrepancy between the solicitation estimates and the actual
anticipated needs, no award should be made based on those defective
estimates. N.V. Philips Gloellampenfabriken, B-207485.3, May 3, 1983,
83-1 CPD P 467.
Further, we think the problem was compounded by the pricing format
chosen by the agency. The RFP asked for a lump sum price for two
general projects, each consisting of numerous items. The items
represented different tasks (replacement of downspouts, handrails,
windows, etc.) and for each task the RFP included an estimated quantity
(replace 200 windows, 1,634 downspouts, etc.). The RFP advised offerors
that the contractor would be responsible for performing all of the work
required whether or not the actual quantity exceeded the RFP estimate.
There was no provision for the inclusion of a unit price for any of the
listed items. In the absence of some compelling reason, we think that a
solicitation of this type should include estimates of the amount of work
expected and should provide for unit and extended prices. Offers should
be evaluated based on the extended prices. Further, the solicitation
should state that payment will be based on the unit prices offered
multiplied by the actual quantity of work required. This format will
help prevent offerors from including in their prices large contingencies
to cover the possibility that they may be required to perform work
greatly in excess of that listed in the RFP for the fixed price offered.
This problem is exacerbated where, as here, the estimates included in
the RFP are suspect.
Based on the reasons cited by the agency along with our concern
regarding the RFP's pricing format, we think that a compelling reason
exists to cancel the RFP and resolicit the requirement. We recommend
that in resoliciting the requirement the agency consider revising the
pricing format both to encourage the submission of thse lowest possible
prices and to alleviate the prejudice to the protester caused by the
exposure of its price.
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ Mehle objects to the contracting officer's reliance on what the
protester characterizes as untimely protests in canceling the RFP. The
source of the information that causes the agency to conclude that a
solicitation is deficient and should be canceled is not relevant as long
as the reasons cited meet the standard for cancellation.
2/ The protester argues that since its price was revealed the agency
should make award to it based on its low offer. While it is often
appropriate where an offeror's price is revealed to make award on the
basis of proposals already received, where, as here, the solicitation is
flawed, such an award is not proper. AAA Engineering & Drafting, Inc.,
B-202140, July 7, 1981, 81-2 CPD P 16 .
Matter of: Bender Shipbuilding & Repair Co., Inc.-- Reconsideration
File: B-225578.2
Date: July 1, 1987
1. The imposition of an interport differential in bid evaluation did
not prejudice the protester where the results of the bidding show that
the awardee's bid was low by a significant amount with or without the
differential.
2. Protester is not entitled to bid preparation costs or the costs of
filing and pursuing a protest where there was no violation of statute or
regulation.
Bender Shipbuilding & Repair Co., Inc. requests reconsideration of
our decision dismissing as untimely a protest filed more than 10 working
days after initial adverse action, bid opening, on an agency-level
protest.
Although Bender has presented several arguments as to why its protest
should not have been dismissed as untimely, we find it unnecessary to
address these reasons as Bender's protest and claim are for denial in
any event.
Bender's protest is based on the contention that the Navy improperly
included interport differentials as a bid evaluation factor by an
amendment to the IFB. Bender argues that the use of interport
differentials is prohibited and, in the alternative, that even if they
are not prohibited, the "last-minute imposition" of them in an amendment
was an arbitrary abuse of the Navy's discretion and a breach of the
Navy's implied obligation of honest and fair treatment of bidders.
Bender states that had not the solicitation initially stated that
interport differentials would not be used in the evaluation it would not
have worked for 3 weeks preparing a bid as it knew such a differential
would make it noncompetitive. Nevertheless, Bender submitted its bid
since by the time of the receipt of the amendment most of the bid
preparation had been completed.
The Navy reports that the initial decision not to use interport
differentials was based upon incorrect advice to the contracting officer
that the imposition of such differentials was prohibited by Congress.
Upon receiving contrary advice, approximately 1 week before bids were
due, the amendment was issued pursuant to the authority provided by the
Federal Acquisition Regulation, 48 C.F.R. Sec. 14.208 (1986). The
amendment provided that the differential for Mobile, Alabama, the
location of Bender's facility, was $104,404.90, the highest of any
imposed. Although Bender protested the amendment prior to bid opening,
it submitted a bid. The low bid and Bender's were as follows:
Bid Evaluated
Bidder Price Differential Price
Gulf-Tampa $692,567 $79,304.56 $771,871.56
Drydock
Bender $1,143,810 $104,404.90 $1,247,799.90
Award was made to the low bidder.
It is clear from the bidding that whether the differential was
properly or improperly considered is irrelevant to a determination of
the low bidder as Gulf-Tampa is low by a substantial amount with or
without the differential. Therefore, Bender was not prejudiced in the
evaluation.
With regard to Bender's claim for bid preparation costs and the costs
of filing and pursuing its protest, our Bid Protest Regulations provide
that if we determine that a solicitation, proposed award or award does
not comply with statute or regulation we may declare the protester
entitled to such costs. 4 C.F.R. Sec. 21.6(d) (1986). Since we have
made no such determination in this case, the claim is denied. Spectrum
Leasing Corp., B-218323.3, B-218785.3, July 14, 1986, 86-2 C.P.D. P 56.
Harry R. Van Cleve
General Counsel
Matter of: Bender Shipbuilding & Repair Co., Inc.
File: B-225578
Date: April 10, 1987
1. If a firm initially protests to the contracting agency, alleging
an apparent impropriety in the solicitation, the agency's opening of
bids without taking the requested corrective action is initial adverse
agency action, and a subsequent protest to the General Accounting Office
more than 10 working days later is untimely.
2. Whether or not a bidder has the necessary physical facilities to
perform the contract is a question of a bidder's responsibility, not its
bid's responsiveness. Where the contracting officer has made an
affirmative determination of responsibility, the General Accounting
Office will not review such determination absent a showing that the
contracting officer acted fraudulently or in bad faith, or that
definitive responsibility criteria in the solicitation have not been
met.
Bender Shipbuilding & Repair Co., Inc., protests the award of a
contract to Gulf-Tampa Drydock Company, under invitation for bids (IFB)
No. N62383-87-B-0002 issued by the Department of the Navy, Military
Sealift Command, Pacific, for repairs to and drydocking of the USNS
Neptune. Bender contends that the Navy improperly included interport
differentials as a bid evaluation factor through an amendment to the
IFB. Bender argues that the use of interport differentials is
prohibited, or in the alternative, that even if interport differentials
are not prohibited, the "last-minute imposition" of them in an amendment
was an arbitrary and capricious abuse of the Navy's discretion, a breach
of the Navy's implied obligation of honest and fair treatment of
bidders, and an unreasonable restriction of competition. In its
comments on the contracting officer's report, Bender argues further that
the successful bidder, Gulf-Tampa, was "nonresponsive" because it lacked
the necessary physical facilities to perform the contract. Bender seeks
award of bid preparation costs and costs of pursuing its protest.
We dismiss the protest.
The IFB, issued on November 4, 1986, provided in Section MEvaluation
Factors for Award that "interport differentials will not be considered
in evaluation for award under this solicitation." Amendment 7 to the
IFB, issued on November 25, 1986, deleted the clause quoted above and
substituted a schedule of interport differentials to be used in
evaluating bids. The largest differential, $104,404.90, applied to
Bender's bid. On December 3, the day prior to bid opening, Bender filed
a protest with the contracting officer objecting to amendment 7 and
requesting that it be rescinded or, in the alternative, that Bender be
reimbursed its bid preparation costs since Bender maintained that the
procurement had been rendered noncompetitive by the differential. On
December 4, bids were opened. Gulf-Tampa was the low evaluated bidder
and Bender was second low evaluated bidder.
On December 8, the contracting officer denied Bender's protest.
Award was made to Gulf-Tampa on December 11. On our Office. The head
of the contracting activity authorized continued contract performance on
December 24, pursuant to 48 C.F.R. Sec. 33.104 (1986), due to urgent and
compelling circumstances that significantly affect the interests of the
government.
Bender's protest to our Office that the application of interport
differentials to this IFB was prohibited and that even if the use of
differentials were not prohibited, the "last minute imposition" of them
was unreasonable is untimely. Under our Bid Protest Regulations, if a
protest has been filed initiaily with the contracting agency, any
subsequent protest to the General Accounting Office, must be filed
within 10 working days of formal notification of or actual or
constructive knowledge of initial adverse agency action. 4 C.F.R. Sec.
21.2(a)(3) (1986). Under our regulations, "the opening of bids" is
identified specifically as an adverse agency action. 4 C.F.R. Sec.
21.0(e). The fact that bid opening occurs without the agency taking any
corrective action in response to the protest constitutes initial adverse
agency action. Sunrise Associates--Request for Reconsideration,
B-219356.2, June 27, 1985, 85-1 C.P.D. P 738.
Here, bid opening occurred on December 4, despite Bender's protest
the day before to the Navy. Therefore, Bender should have known that
the agency was not going to delete the differentials. This constituted
initial adverse agency action and Bender had 10 working days after bid
opening to protest to our Office. Accordingly, Bender's protest of the
amendment filed here on December 19, 1986, more than 10 working days
after bid opening, is untimely and will not be considered on the merits.
Bender's final argument, raised in its comments on the contracting
officer's report, is that the successful bidder, Gulf-Tampa, was
"nonresponsive" because it lacked the necessary physical facilities to
perform the contract. The ability to perform a contract and whether a
bidder has the capacity to perform are matters of responsibility, not of
its bid's responsiveness. See Great Lakes Dredge & Dock Co., B-221768,
May 8, 1986, 86-1 C.P.D. P 444. In addition, we have held that whether
a bidder has the necessary equipment to perform a contract is a matter
of responsibility. See Kelly & Associates, B-215641, July 20, 1984,
84-2 C.P.D. P 75. Before awarding a contract, the contracting officer
must determine that a prospective contractor is responsible. Our Office
does not review the contracting officer's affirmative determination of
responsibility absent a showing that the contracting officer acted
fraudulently or in bad faith, or that definitive responsibility criteria
in the solicitation have not been met. Kelly & Associates, B-216641,
supra at 1, 84-2 C.P.D. P 75 at 1. Neither exception is applicable
here.
We dismiss the protest.
Bender seeks its cost of pursuing this protest and its bid
preparation costs. However, a claim for such costs which is submitted
with a protest that is dismissed without consideration on the merits
will not be considered by our Office. C.A. Parshall, Inc., B-220650;
B-220555.2, Jan. 14, 1986, 86-1 C.P.D. P 38.
Robert M. Strong
Deputy Associate General Counsel
Matter of: Louisiana Foundation for Medical Care-- Reconsideration
File: B-225576.2
Date: July 2, 1987
Prior decision is affirmed where the protester has failed to show
that we erred in concluding that the protester was not prejudiced even
though its technical proposal was erroneously scored since the proposal
was otherwise unacceptable.
Louisiana Foundation for Medical Care (LFMC) requests that we
reconsider our decision in Louisiana Foundation for Medical Care,
B-225576, Apr. 29, 1987, 87-1 CPD P 451, denying in part and dismissing
in part its protest of the award of a contract to Louisiana Health Care
Review (LHCR), under request for proposals (RFP) No. HCFA-86-054/BL,
issued by the Health Care Financing Administration, Department of Health
& Human Services (HHS). The awardee became the utilization and quality
peer review organization (PRO) for the Medicare program in the state of
Louisiana.
We affirm our prior decision.
LFMC had protested that HHS improperly evaluated proposals, and that
its overall proposal was superior to the awardee's. LFMC noted that it
was a physician sponsored organization while the awardee was only a
physician access organization, that its bid price was $100,000 less than
the awardee's, and that unacceptable features of its proposal could have
been resolved with minimal negotiation. We held that LFMC's best and
final offer (BAFO) properly was rejected as being technically
unacceptable where LFMC failed to rectify technical deficiencies brought
to its attention prior to the date for submission of BAFO's. We
recognized that an error was made in the technical evaluation when LFMC
received only 40 points for its status as a physician sponsored
organization rather than the 100 points to which it was entitled, and
that LFMC probably would have had a higher technical score than the
awardee if no error had been made. We found that LFMC was not
prejudiced by the error, however, because its proposal was reasonably
found to be unacceptable for its deficiencies in treatment of
objectives, a major technical evaluation criterion.
HHS had identified for LFMC during discussions what it considered a
major area of weakness in LFMC's initial proposal--its intervention
plans and trigger points for objectives. According to HHS, trigger
points were crucial to the formulation of good objectives, which were
crucial to a PRO's success. (An intervention plan is a series of
actions which the PRO will take once a provider's practitioner's
practice has been targeted for closer scrutiny. Trigger points are
those actions which cause a provider or practitioner to warrant closer
scrutiny). HHS believed that if trigger points were set too high,
providers with utilization or quality problems might not be identified,
or conversely, if set too low, providers might inappropriately be
selected for closer scrutiny. HHS found LFMC's intervention strategy
did not change significantly in its best and final offer, and considered
LFMC's proposal unacceptable.
We pointed out that a proposal that has not been made technically
acceptable after discussions properly may be rejected after BAFO's and
the proposal may not be considered for award, irrespective of the
proposed price. We also noted that, since the agency properly found
LFMC's proposal technically unacceptable, it did not have any obligation
to conduct further negotiations with the firm.
In its request for reconsideration, LFMC asserts that because it
should have received a higher number of points than the awardee, it
should have been awarded the contract. LFMC argues that since we found
that HHS had made an error in the technical evaluation, we must reverse
HHS' award decision or recommend that proposals be further evaluated.
LFMC's reliance on the point scores as an indication of its alleged
superiority and entitlement to award is misplaced. Numerical point
scores, when used for proposal evaluation, are merely guides for
intelligent decision-making by selecting officials. Unless a
solicitation sets forth a precise numerical formula and provides that a
contract will be awarded to the offeror whose proposal receives the
highest number of points, award need not be made on that basis.
Consolidated Group, B-220050, Jan. 9, 1986, 86-1 CPD P 21. Here, there
was no such statement that the highest scored offeror would be awarded a
contract.
Regarding LFMC's argument that we should reverse HHS' award decision
or recommend that proposals be further evaluated, it is well-settled
that a showing of prejudice is an essential part of a protest, and it is
incumbent upon a protester to show how it was prejudiced if corrective
action is requested. See KET, Inc.--Request for Reconsideration,
B-190983, Jan. 12, 1981, 81-1 CPD P 17. As we noted previously, LFMC
was not prejudiced by errors in point scoring because, after
discussions, its proposal was reasonably found to be unacceptable for
its deficiencies in treatment of objectives, a major technical
evaluation criterion. The awardee's proposal was found to be at least
minimally acceptable in all evaluation areas.
Since LFMC has not shown that our prior decision was based on any
error of fact or law, it is affirmed.
Comptroller General
of the United States
Matter of: Louisiana Foundation for Medical Care
File: B-225576
Date: April 29, 1987
1. Protester's best and final (BAFO) offer properly was rejected as
being technically unacceptable where protester failed to rectify
technical deficiencies brought to protester's attention prior to the
date for submission of BAFO's.
2. Competitive advantage that an offeror may enjoy is not
objectionable where it is not the result of a preference or unfair
action by the government.
3. Allegation that a contract award was improper because a former
agency employee subsequently was employed by awardee is denied where
there is no evidence that the former employee exerted improper influence
on behalf of the awardee or that the awardee received any improper
consideration.
4. General Accounting Office will not conduct an independent
investigation in connection with a bid protest in order to substantiate
a protester's speculative allegations.
5. Under the Competition in Contracting Act of 1984, agencies are not
required to provide to protesters and other interested parties documents
related to a protest that would give one or more parties a competitive
advantage or which the parties are not otherwise authorized by law to
receive. Nevertheless, decisions on bid protests are based on the
entire record and not merely on those portions that have been released
to the protester and other interested parties.
Louisiana Foundation for Medical Care (LFMC) protests the award of a
contract to Louisiana Health Care Review (LHCR), under request for
proposals (RFP) No. HCFA-86-054/BL, issued by the Health Care Financing
Administration, Department of Health & Human Services (HHS). The
awardee became the utilization and quality peer review organization
(PRO) for the Medicare program in the state of Louisiana.
We deny the protest in part and dismiss it in part.
The PRO is to monitor the professional activities of physicians and
hospitals in Louisiana, as to reasonableness, medical necessity, and
quality, with a view to enhancing the cost effectiveness of the Medicare
program. This program implements the Peer Review Improvement Act of
1982 (part of the Tax Equity and Fiscal Responsibility Act of 1982), 42
U.S.C. Sec. 1320c (1982).
The RFP solicited fixed price and technical proposals. The following
proposal evaluation criteria are set forth in the RFP:
1. Objectives and Data Activities 650 points
requirements
2. Experience 200 points
3. Personnel 200 points
4. Management Plan 200 points
5. Physician Sponsored Organization 100 points
6. Understanding of Work 50 points
Act and prospective payment
legislation
objectives
review requirements
review requirements
"The business proposal will be evaluated as follows: Within
the competitive range the proposal of the lowest priced
TECHNICALLY ACCEPTABLE offer will be given the maximum number of
points (400). The calculation of points for the cost proposals of
the other acceptable offers within the competitive range will be
accomplished by the following method:
priced acceptable proposal x 400) Lowest priced acceptable
proposal"
The RFP advised offerors that paramount consideration would be given
to the evaluation of the technical proposal rather than to cost or
price.
LFMC and LHCR, two of the four firms which submitted proposals, were
found to be within the competitive range. Their technical proposals,
which received point ratings of 323.7 and 324, respectively, from a
five-member technical review panel, were characterized as "unacceptable,
but capable of being made acceptable."
After two rounds of discussions, the technical review panel concluded
that the revised proposal of LHCR, with a technical score of 394.08, was
acceptable and LFMC's revised proposal, with a technical score of
363.82, was unacceptable. A contract was awarded to LHCR in the fixed
price amount of $5,002,136.
LFMC protests that HHS improperly evaluated proposals. LFMC contends
that its overall proposal is superior to the awardee's when an objective
assessment is made of the organization, management team, statewide
support, business proposal, review process, data system and potential
for private review contracts. LFMC notes that it is a physician
sponsored organization while the awardee is only a physician access
organization, that its business proposal was highly regarded by the
Office of Inspector General's (OIG's) auditors, that its bid price is
$100,000 less than the awardee's, and that unacceptable features of its
proposal could have been resolved with minimal negotiation.
HHS responds that the technical review panel believed that LHCR
showed a somewhat greater understanding of the Scope of Work
requirements, while LFMC submitted a better management plan and appeared
to have slightly more qualified personnel. In the area of experience,
LFMC's proposal was considered slightly Fetter. The panel found that
the difference between LFMC and LHCR in any of the evaluation components
was slight except in the area of physician sponsorship and objectives
and data activity. HHS reports that LFMC received 100 points as a
physician sponsored organization while LHCR did not, and LHCR scored
over 140 points higher in the area of objectives and data activity
because of its superior objectives. According to HHS, unacceptable
objectives were sufficient to make a proposal unacceptable, and LFMC had
unacceptable objectives as well as a quality review plan which was not
acceptable. Since LFMC's proposal was judged technically unacceptable,
HHS believes its offered price is of no significance. HHS notes that
the OIG's function is to determine if a prospective contractor's
financial system is adequate and to make recommendations of
allowable/unallowable costs, not to render an opinion as to the relative
technical standing of proposals.
Our review of the record shows an error was made in the technical
evaluation, but that LFMC's proposal was reasonably found to be
unacceptable. The RFP provided that an offeror would receive 100 points
if it were considered to be a physician sponsored organization. Yet,
the record shows that during the technical evaluation of LFMC's best and
final offer (BAFO), only two of the five evaluators'scores, which were
averaged to compute a final total score, included the 100 points to
which LFMC as a physician sponsored organization was automatically
entitled. Thus, LFMC received only 40 points for its status as a
physician sponsored organization rather than the 100 to which it was
entitled. If all five scores had been adjusted, it appears LFMC would
have had a higher technical score than LHCR.
LFMC was not prejudiced by this error, however, because its proposal
was reasonably found to be unacceptable for its deficiencies in
treatment of objectives, a major technical evaluation criterion. HHS
identified for LFMC during discussions what it considered a major area
of weakness in LFMC's initial proposal--its intervention plans and
trigger points for objectives. HHS reports that trigger points are
crucial to the formulation of good objectives, which are crucial to a
PRO's success. (An intervention plan is a series of actions which the
PRO will take once a provider's or practitioner's practice has been
targeted for closer scrutiny. Trigger points are those actions which
cause a provider or practitioner to warrant closer scrutiny.) According
to HHS, if trigger points are set too high, providers with utilization
or quality problems may not be identified, or conversely, if set too
low, providers may inappropriately be selected for closer scrutiny.
HHS specifically advised LFMC in writing on two ocassions that its
proposal was "inadequate in the treatment of certain elements which we
consider to be essential for successful contract performance." A letter
from HHS dated October 24, 1986, requesting a revised proposal, noted
problems with all of LFMC's proposed objectives. A letter dated
November 19, 1986, again requesting a revised proposal, noted that
intervention plans or methodology for three objectives were
unacceptable. Yet, HHS found LFMC's intervention strategy had not
changed significantly in its BAFO.
LFMC comments that it based its approach on the Appropriateness
Evaluation Protocol followed by the former PRO for southeast Louisiana,
which resulted in savings for Medicare review. LFMC argues that HHS
opted for an unrealistic search for the ideal as opposed to what could
be realistically achieved by an actual management team.
These comments merely emphasize LFMC's disagreement with HHS's
evaluation, but do not show the evaluation was unreasonable. It appears
to us that HHS could rationally evaluate LFMC's proposal as
unacceptable. The fact that the protester objects to the evaluation,
and perhaps believes its own proposal was better than as evaluated by
HHS, does not render the evaluation unreasonable. DALFI, Inc.,
B-224248, Jan. 7, 1987, 87-1 CPD P . A proposal that has not been made
technically acceptable after discussions properly may be rejected after
BAFO's and the proposal may not be considered for award irrespective of
the proposed price. See Par Steel Products Co., Inc., B-221966.2, May
30, 1986, 86-1 CPD P 512. Moreover, since the agency properly found
LFMC's proposal technically unacceptable, it did not have any obligation
to conduct further negotiations with the firm. See Heuristic
Developments, Inc., B-221292, Apr. 7, 1986, 86-1 CPD P 338.
The fact that LFMC had a higher point score does not alter the above
decision. The reason LFMC scored higher, as noted above, was because of
the addition of the 100 points for being a physician sponsored
organization. However, this does not impact on the technical merit of
LFMC's proposal. In the area of objectives, LFMC received zero points
because of its objectives being unacceptable while LHCR received between
80 and 90 points from the evaluators once its objectives became
acceptable following discussions. Therefore, LFMC's higher point score
does not change the fact that, after discussions and a final rescoring,
LFMC's proposal was still considered technically unacceptable. LHCR was
found to be at least minimally acceptable in all evaluation areas.
LFMC also protests that the awardee had unfair access to the data
system of Louisiana's former PRO and thus had an unfair advantage in
constructing organizational objectives. HHS responds that it has no
knowledge that this allegation is true, and that it had no involvement
in LHCR's access to data possessed by the former PRO.
For the purpose of our review of bid protests, a firm's competitive
advantage is objectionable only when it is the result of a preference or
unfair action on the part of the government. Alamo Technology, Inc., et
al., B-221336, et al., Apr. 7, 1986, 86-1 CPD P 340. Here, since LFMC
has not shown that HHS engaged in any unfair action or conduct designed
to give any firm a preference, LFMC's allegation does not provide a
basis for us to object to a contract award under the RFP.
LFMC also protests that the awardee used a former HHS employee in its
final, major rewrite of objectives. LFMC, however, has submitted no
evidence tending to show that the former employee exerted improper
influence on behalf of the awardee or that the awardee received any
improper consideration, and we find no such evidence in the record. The
incidence of a former government employee's subsequent employment with
an awardee is not, alone, sufficient to establish that the award
resulted from improper influence. Walker's Freight Line, B-220216.2,
Jan. 15, 1986, 86-1 CPD P 45. Consequently, we deny this basis of
protest.
LFMC also contends that the awardee's representations and
certifications regarding independent price determinations and contingent
fee representations are questionable and should be investigated.
However, LFMC presented no evidence in its protest in support of its
allegation. We will not conduct investigations for the purpose of
establishing the validity of a protester's speculative statements. The
Big Picture Co., Inc., B-220859.4, May 22, 1986, 86-1 CPD P 477.
LFMC also protests that the awardee used federal contract funds to
finance its proposal. Specifically, LFMC states that the awardee used
the postage meter of the former PRO, Louisiana Medical Review Foundation
(LMRF), in its mail recruitment of physician members, that a member of
the awardee's staff was paid for proposal work with LMRF funds to be
used in phasing out operations, and that the awardee used LMRF space,
equipment, furniture, and supplies in preparing its PRO application.
HHS responds that LFMC misunderstands the difference between federal
funds and contractor revenues under government contracts. Since the PRO
contract with LMRF was a fixed-price contract, HHS argues that the
government had no right to dictate how funds paid under the contract
were spent. We agree.
LFMC also alleges that, following award of the PRO contract, HHS
informed the awardee that it would "let slide" some of the established
dates on the RFP's schedule of deliverables. This issue is also not for
resolution under our Bid Protest Regulations, 4 C.F.R. Sec. 21.3f (1).
Whether a contractor actually performs in accordance with the
solicitation's requirements is a matter of contract administration that
is the responsibility of the contracting agency. McAllister Brothers,
Inc., B-223888, Aug. 27, 1986, 86-2 CPD P 235.
LFMC also objects to HHS's failure to provide LFMC with copies of all
documents which HHS has relied upon in its responses to the General
Accounting Office. Under the Competition in Contracting Act of 1984, 31
U.S.C. Sec. 3553(f) (Supp. III 1985), government agencies are not
required to provide to protesters and other interested parties documents
related to a protested procurement action that would give one or more
parties a competitive advantage or which the parties are not otherwise
authorized by law to receive. Nevertheless, consistent with our
practice, we have reviewed and base our decision on the entire record,
not merely those portions that have been provided to the protester.
Newport News Shipbuilding and Dry Dock Co., B-221888, July 2, 1986, 86-2
CPD P 23.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
Matter of: Crown Furniture Manufacturing Inc.
File: B-225575
Date: May 1, 1987
1. Quotation solicited from Federal Supply Schedule (FSS) vendors are
not offers that can be accepted by the government and there is therefore
no requirement that the quotation comply precisely with the terms of
Request for Quotations. Moreover, award to a lower priced firm is
proper, even where that firm does not have all the required items on its
schedule contract, since the controlling consideration is whether award
was made to an FSS contractor.
2. Agency may award combined contract for Federal Supply Schedule and
non-Federal Supply Schedule items to an offeror who submitted low
aggregate quote in response to request for quotations.
Crown Furniture Manufacturing, Inc., protests the award of a contract
to Word Data Systems Incorporated (WDS), the low offeror under request
for quotations (RFQ) F18601-86-Q1116, issued by the Air Force for the
purchase and installation of 39 line items of modular furniture from
WDS's General Services Administration (GSA) mandatory multiple award
Federal Supply Schedule (FSS) contract.
The protest is denied in part and dismissed in part.
Three vendors holding GSA schedule contracts for modular furniture
were solicited and quoted on the same items of specified furniture.
Crown protests that the furniture proposed by WDS does not meet the
specifications and that its offer is otherwise unacceptable for many of
the line items.
Specifically, Crown alleges that the RFQ specifications for items 30
and 39, "Vertical Work station with CRT cathode ray tube & printer
space," require work stations 33 inches deep, but WDS's quoted items are
only 30 inches and 24 inches deep, respectively. Crown also contends
that WDS's work stations' overhead printer shelf is only 15 inches deep,
providing insufficient space for a printer. Crown states that WDS's
workstation also lacks a sliding work surface, a bottom shelf, and does
not provide paper slots for the necessary flow of paper.
The Air Force responds that there were no specified requirements as
to the size of the printer shelf on these items or that it was to be
mounted on extension slides. The Air Force asserts that WDS proposed
vertical work stations which did meet the size requirements of the RFQ.
Our review shows that WDS quoted its model 3T9-48/048 on item 30 and
model 2T9-36/036 on item 39. Notwithstanding the Air Force's contention
that these models met the size requirements in the RFQ, WDS's FSS
contract shows that the models are 24 inches and 30 inches Deep,
respectively. Therefore, although the Air Force is correct that the RFQ
did not specify a specific size for the printer shelf or state that it
should be mounted on extension slides, WDS's quoted work stations did
not meet the 33 inch depth size called for in the RFQ.
It is a basic rule of federal procurement law that vendors, when
responding to a formal solicitation, must offer what is specified in the
solicitation. Thus, when a request for proposals or an invitation for
bids is issued, vendors are required to respond with offers that must
comply with all material provisions of the solicitation. An offeror's
failure to comply with all such provisions ordinarily renders the bid
nonresponsive or the proposal unacceptable. When quotations are
solicited from FSS vendors, however, the situation is not the same. The
quotations are not offers that can be accepted by the government;
rather, they are informational responses, indicating the equipment the
vendors would propose to meet the agency's requirements and the price of
that equipment and related services that the government may use as the
basis for issuing a delivery order to an FSS contractor. There is,
therefore, no requirement that the quotation comply precisely with the
terms of an RFQ, since the quotation is not subject to government
acceptance. Spacesaver, B-224339, Aug. 22, 1986, 86-2 C.P.D. P 219,
affirmed, Spacesaver - Reconsideration, B-224339.2, Sept. 19, 1986, 86-2
C.P.D. P 328 and Spacesaver - Second Reconsideration, B-224339.3, Oct.
16, 1986, 86-2 C.P.D. P 435.
However, as recognized in Spacesaver, the government must treat all
vendors equally and afford vendors an opportunity to compete on an equal
basis. Normally, an agency that identifies a particular model or
requirement in a solicitation but does not impose that requirement on an
offeror who deviates from it does not assure equal competition because
it can lead vendors to quote on different bases.
We see no such concern in this case, however, since Crown does not
argue, and it does not appear, that Crown would have been able to quote
different furniture at a lower cost on items 30 and 39, than WDS if
Crown had been informed that the Air Force did not insist on the
specified sized work stations. Spacesaver, B-224339, supra. Moreover,
we have held that award to a lower priced firm is proper, even where
that firm does not have all the required items on its schedule contract,
since the controlling consideration in these cases is whether award was
made to an FSS contractor. Spacesaver - Second Reconsideration,
B-224339.3, supra. In this regard, an agency may procure FSS items and
non-FSS items in a single procurement and award a contract to the
offeror offering the low aggregate price. Synergetics International,
Inc., B-213018, Feb. 23, 1984, 84-1 C.P.D. P 232. Therefore, the
awards of items 30 and 39 to WDS is unobjectionable.
Crown also contends that WDS's offer on item 28, "Right Printer Stand
48W x 24D x 26H," does not comply with the RFQ because WDS proposes a
"work table" which does not have a leg cut back to allow operators
sufficient leg room and mobility, nor does it provide for proper paper
flow since it has neither a paper slot nor a shelf to hold the paper.
Similarly, Crown contends that WDS's offered items Nos. 15 through 24
are not "extension tables," but are "work tables" because they also lack
a leg cut back as well as a bracket needed for additional support.
The Air Force responds, and the record confirms, that the RFQ
described the required furniture in generic terms without any reference
to manufacture name or part number. In this regard, item 28 simply
specified "Right Printer Stand 48W x 24D x 26H" and did not require a
leg cut back, paper slot or shelf. Similarly, the Air Force states that
items 15 through 24 in the RFQ merely specified extension tables with
certain required dimensions and did not require leg cutbacks or
brackets.
We find that the Air Force's determination that item 28 and items 15
through 24 met the requirements of the RFQ to be reasonable. WDS quoted
furniture which met the required dimensions exactly. The fact that WDS
may designate these items as "work tables" rather than "printer stands"
or "extension tables" is irrelevant since the essential requirements of
the RFQ have been met. In any case, WDS states that it provides paper
slots and shelves for its work tables at no additional charge as part of
its regular service.
With regard to items 36 and 37, Crown states that WDS has no
provision for requested "printer cut outs for continuous paper and a
paper shelf." Crown also alleges that WDS did not charge for item 38,
"locks."
The record confirms that WDS offered these items at no cost to the
government. We find nothing irregular in WDS's quoting items at no cost
to the government, since the contractor may offer to supply items listed
on its FSS contract at prices lower than the schedule prices and a
procuring agency may award a contract at the reduced price without prior
notice to or approval from GSA. Synergetics International, Inc.,
B-213018, supra.
Crown has raised several further alleged discrepancies in its
comments to the Air Force's report but since Crown knew or should have
known of these bases of protest at the time it originally filed its
protest these matters are untimely raised. 4 C.F.R. Sec. 21.2(a)(2)
(1986).
The protest is denied; the untimely allegations are
dismissed.
Harry R. Van Cleve
General Counsel
Matter of: Systems Research & Applications Corporation--
Reconsideration
File: B-225574.3
Date: June 23, 1987
Request for reconsideration is denied where protester basically
reiterates arguments previously made and fails to identify any errors of
law or fact on which the decision was based.
Systems Research & Applications Corporation (SRA) requests
reconsideration of our decision in Systems Research & Applications
Corp., B-225574.2, May 26, 1987, 87-1 CPD P , which we denied its
protest of a proposed award to RJO Enterprises, Inc., under request for
proposals (RFP) No. F19628-86-R-0089. The RFP was issued by the Air
Force for a time-and-materials contract to provide systems engineering
and management support services. The protest concerned only the labor
portion of the work and the RFP's requirement that the proposed hourly
labor rates should be based on a 40-hour week. The protester argued
that RJO's proposal was unacceptable because the listed actual salaries
of a subcontractor included uncompensated overtime and also because RJO
proposed a work week greater than 40 hours.
Our decision pointed out that there was a distinction between the
offered hourly labor rates (which formed a fixed-price basis of the
contract and included a factor for overhead, general and administrative
expenses, and profit) and an offeror's wage rates which reflected the
actual amounts paid to the proposed employees and were required as cost
and pricing data. The RFP required only that the wage rates be based on
a 40-hour work week.
We held that since the wage rates of RJO's subcontractor in effect
were computed by dividing the annual salaries by the total number of
hours worked, including overtime, the wage rates indicated the
employee's actual hourly rate of compensation assuming a 40-hour week.
The proposal therefore complied with the RFP.
The wage rates for RJO's employees were based on a 40-hour week. RJO
proposed its hourly labor rates for the subject procurement, however, on
the basis of having its employees work compensated overtime at those
rates. We noted that nothing prohibited RJO from offering its hourly
labor rates on this basis and that all offerors were evaluated equally
by multiplying their proposed rates times the estimated number of hours
that would be required under the contract. Further, the RFP provided
that any order issued under the contract would be to perform certain
tasks in a specified number of hours, regardless of when worked, and
imposed limits on the number of hours that could be reimbursed; orders
therefore will not specify a number of person years under which RJO
could be paid for more hours than an offeror proposing only a 40-hour
week. We therefore found that the acceptance of RJO's proposed use of
compensated overtime was proper and did not prejudice other offerors.
In its request for reconsideration, SRA basically reiterates its
previous arguments, and contends that RJO and offerors which based their
wage and hourly labor rates on a 40-hour week were not evaluated on an
equal basis. The submission, like the original protest, appears to
address possible evaluation inequities that could result from an
offeror's use of uncompensated overtime where: (1) the offeror proposes
understated hourly labor rates which do not reflect the uncompensated
overtime; and (2) all offers are evaluated based on an estimated number
of person years assuming a 40hour week, although the offeror will work
and bill the government for more hours in a year than offerors using a
40-hour week. This simply is not the case here, as explained above,
since the RFP provides that the Air Force will only order a specified
numbers of hours at precisely the proposed hourly labor rates.
Because SRA reiterates its previous arguments and has failed to
identify any material errors of law or fact on which our decision was
based, the request for reconsideration is denied. See C&L Diversified
Enterprises Inc.--Request for Reconsideration, B-224912.3, Mar. 10,
1987, 87-1 CPD P 268.
Harry R. Van Cleve
General Counsel
Matter of: Systems Research & Applications Corp.
File: B-225574.2
Date: May 26, 1987
Where request for proposals for time-and-materials contract requires
that offerors' wage rates be based on a 40-hour week, an offer to
provide compensated overtime is acceptable if the labor rates actually
proposed are based on the actual hourly wage rates the offeror pays for
a 40-hour week.
Systems Research and Applications Corp. (SRA) protests the proposed
award of a contract to RJO Enterprises, Inc. under request for proposals
(RFP) No. F19628-86-R-0089, issued by the Electronic Systems Division
(ESD), Air Force Systems Command. The RFP is for a time-and-materials
contract 1/ to provide systems engineering and management support to
ESD's Command Management Systems Directorate.
The protest pertains only to the labor hour portion of the
solicitation. SRA argues that RJO's proposed hourly labor rates are
based on wage rates for more than a 40-hour work week in violation of
the RFP. This, according to the protester, results in an understatement
of RJO's hourly labor rates because its professional employees are
required by the company to work more than 40 hours a week thus causing
their hourly labor rates to appear lower than those who work 40 hours
for the same salary. The protester maintains that the company makes up
the difference by billing the agency for more than 40 hours per week.
We deny the protest.
The RFP includes separate line items for a base year of services plus
options for 2 additional years and a 3-month training period. Each line
item contains a list of 21 labor categories (e.g., project manager,
systems analyst, and systems engineer) and an estimated number of person
years. 2/ The solicitation contains a table for offerors to propose
their hourly labor rates for each of the 21 work categories. The RFP
provides that work under the contract will be by delivery orders issued
for the particular tasks and including a specific number of hours in
each category to accomplish those tasks. The contractor may increase or
decrease the number of hours for each category specified in an order by
no more than 30 percent provided the price does not exceed the ceiling
price for the order. The RFP stipulates that in no event may the total
labor requirement exceed 338 person years, excluding the transition
option.
Further, in response to an offeror's question whether wage rates
based on a work week greater than 40 hours would be acceptable, the
agency stated in a written clarification issued to all prospective
offerors: "Wage rates should be based on a standard 40 hour work week."
The RFP's evaluation criteria state that price and cost (of the
reimbursable items) collectively are equally as important as technical
merit. The agency proposes to award RJO the contract based on its
"competitive price" and its having obtained the highest technical
ranking.
The protester states that it believes that RJO's proposal (which has
not been disclosed) was based on labor rates calculated on a greater
than 40-hour work week. Citing the clarification stating that wage
rates should be based on a standard 40-hour work week, SRA argues that
RJO's proposal should be regarded as technically unacceptable.
We disagree. We can find no provision in the RFP and the protester
cites none which specifically requires that a contractor only perform
the services ordered using a standard 40-hour work week. Nor does the
RFP prohibit overtime. It does, however, stipulate that no premium will
be paid for overtime. The RFP provides that delivery orders will be
issued for specific tasks involving a specified number of labor hours
and it is up to the contractor to determine how to accomplish the task,
even to the extent of varying the hours in each category by up to 30
percent.
The agency's clarification cited above did not relate to the labor
rates, but concerned the offeror's wage rates; it also did not limit
the number of hours that could be billed by the contractor. That is
limited only by the ceiling specified in the individual delivery order
and the total contract ceiling of 338 person years. The Air Force's
answer stated only that the offeror's wage rates should be based on a
standard 40-hour work week. In this regard, all the offerors, including
RJO, calculated their hourly wage rates by dividing each employee's
yearly salary by 2,080 hours. 3/ The labor rates which were required by
the solicitation included the wage rates plus overhead, general and
administrative expenses, and profit.
Even though RJO's wage rates are based on a 40-hour week, RJO does
propose to have its employees work compensated overtime at its proposed
hourly labor rates. This practice does not adversely affect the
evaluation since the proposed hourly labor rates are precisely those
that will be paid by the government and all offerors' evaluated prices
were based on the same number of hours. RJO will, as the protester
argues, consume hours at a faster rate than a contractor working a
40-hour week, but this is immaterial since the agency is purchasing the
hourly services without regard to their rate of consumption. If the Air
Force needed continuous support services through each contract year,
then the rate of consumption might be a problem. The RFP, however, does
not require continuous support. The protester argues otherwise,
contending that the RFP requires person years of services based on a
standard 40-hour work week. Although the RFP does define the estimated
labor requirements in terms of person years, it clearly states that the
agency's requirements are indefinite and that orders will be placed to
perform certain tasks using an allotted number of hours. Thus, the
terms "person years" or "man years" are used only as a unit of
measurement for estimating the amount of work required and not to set
forth a need for yearlong services.
As stated above, RJO's base wage rates were established using a
40-hour week. One of its subcontractors, however, has an accounting
system that requires recording of uncompensated overtime and its
salaried employees work more than 40 hours a week. In RJO's proposal
the subcontractor's wage rates were reduced by an appropriate percentage
to reflect an average hourly rate for all hours worked including
uncompensated overtime. In this way, the rates reflect the amount that
would be paid for a standard 40-hour week without uncompensated
overtime. 4/
Based on the foregoing, we find no merit to SRA's protest that RJO's
proposal unacceptably deviated from the RFP's requirements, and deny the
protest.
Harry R. Van Cleve
General Counsel
1/ A time-and-materials contract is an indefinite-quantity,
indefinite-delivery contract under which payment is based on specified
fixed hourly rates for labor and on a cost-reimbursable basis for
materials. Federal Acquisition Regulation (FAR), 48 C.F.R. Sec. 16.601
(1986).
2/ A person year or "man year" as defined by the RFP consists of a
minimum of 1,856 labor hours.
3/ Salary hours of 2,080 represent the actual number of work hours in
a year under a 40-hour work week. The 1,856 hour minimum per person
year in the solicitation represents 2,080 hours minus the commonly
recognized combination of 10 days vacation and 10 days annual holidays
plus 8 days of sick leave.
4/ Since payment under the contract will be made on the basis of
hours ordered and worked, including hours exceeding a 40-hour week, such
a reduction is necessary to reflect the actual hourly rate of
compensation. For example, if an employee earning $40 per hour normally
would work 5 hours per week of uncompensated overtime, the employees
average hourly rate of compensation actually would be $35.56.
Matter of: American Building Services, Inc.
File: B-225571.2
Date: January 30, 1987
Protest which alleges that low bid in a two-step sealed bidding
procurement was below cost is dismissed because it raises an issue not
reviewed by General Accounting Office and otherwise is based solely on
speculation.
American Building Services, Inc., protests award of a contract to any
firm other than itself under invitation for bids (IFB) No.
DTFA-02-86-B-00565, issued by the Federal Aviation Administration,
Department of Transportation. This is a two-step sealed bidding
procurement for janitorial services. Basically, American Building
Services contends that First Maintenance Company, the low bidder,
submitted a bid in Step II of this procurement that was below its costs
to perform the work it proposed to do in its Step I technical proposal.
In the alternative, American Building Services charges that First
Maintenance Company must have been allowed to submit a Step II bid which
was not consistent with its Step I proposal. The protester also makes
the same allegations with regard to the second-low bidder.
We dismiss the protest.
American Building Services states that its protest is based on the
same facts as was the prior protest of American Maid Maintenance
regarding the same solicitation and, in fact, American Building Services
incorporates that protest into its own protest. We dismissed American
Maid Maintenance's protest on Jan. 9, 1987 (American Maid Maintenance,
B-225571, 87-1 CPD P ). In that case, American Maid Maintenance also
contended that First Maintenance's price under Step II was lower than
the lowest possible cost of performance consistent with the Step I
technical proposal. We held that the contention gave rise to a matter
of responsibility for the agency to determine prior to contract award.
We pointed out that our Office does not review an agency's affirmative
determination of responsibility in the absence of a showing of possible
fraud or bad faith by the procuring officials or that definitive
responsibility criteria may not have been met and that neither exception
could be applied in that case.
Once again, we will not consider the contention that First
Maintenance's bid is too low to permit proper performance. In this
connection, American Building Services has provided no new facts or
arguments which would change the result of our January 9, 1987,
decision. American Building Service's assumption that the agency
abandoned the requirement that the Step II price be consistent with the
Step I proposal is based on pure speculation which finds no support in
the record. Such speculation provides no basis on which to challenge an
agency's conduct of a procurement. See Mount Pleasant Hospital,
B-222364, June 13, 1986, 86-1 CPD P 549 at 4,5.
Thus, we see no useful purpose to be served by our further
consideration of this protest. See Ingersoll-Rand Co., B-225052, Jan.
27, 1987, 87-1 CPD P .
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
Matter of: The Department of the Navy--Request for Reconsideration
File: B-225570.2
Date: July 20, 1987
1. Award of a franchise contract for cable television services
concerns procurement of property or services by federal agency and thus
is subject to General Accounting Office's (GAO) bid protest
jurisdiction.
2. Prior decision in which GAO sustained protest that agency
erroneously disqualified protester's proposal is affirmed where, upon
request for reconsideration, agency presents no basis for reversing
conclusion that protester's proposal met all of the RFP's requirements.
The Department of the Navy requests reconsideration of our decision
in Americable International, Inc., B-225570, May 5, 1987, 87-1 C.P.D. .
In that decision, we sustained a protest filed by Americable
International, Inc., concerning the Navy's award of a cable television
franchise agreement to Antilles Trading Company pursuant to request for
proposals (RFP) No. N62470-86-B-7931. The Navy argues that our
evaluation of Americable's proposal was incorrect and our legal analysis
in error. We affirm our prior decision.
The RFP was issued by the United States Naval Base, Guantanamo Bay,
Cuba, seeking proposals to provide cable television services for the
naval base.
The RFP required proposals to offer both a "basic service" 1/ and a
"premium service" 2/ and stipulated that "premium service" must be
available to subscribers without the necessity of purchasing "basic
service." The RFP also required the successful offeror to provide free
"basic service" to all ships and duty rooms. 3/ Proposals were submitted
by five offerors including Americable and Antilles.
Upon review of the proposals, the Navy stated that it "found
Americable's proposal nonresponsive and excluded the company from
further consideration." This disqualification was based on the Navy's
conclusion that Americable's proposal "failed to provide free basic
cable service to the ships and duty rooms and also failed to provide
customers the option of subscribing to premium channels without
purchasing the basic service."
In response to the initial protest, the Navy chose not to present any
arguments concerning the merits of the protest, opting instead to
provide our Office with only the Evaluation Committee Meeting Minutes
and copies of Americable's and Antilles' proposals. Rather than address
the merits of the protester's case, the Navy argued that our Office was
without jurisdiction to resolve this matter.
In our prior decision we first rejected the Navy's arguments
concerning jurisdiction. We then reviewed the propriety of Americable's
disqualification. We concluded that Americable's proposal, in fact,
offered to provide the requirements of the RFP, and we found no basis
for its disqualification. Specifically, we found that Americable
offered to provide the ships and duty rooms with precisely the service
which the RFP defined as "basic service" and also that Americable
offered subscribers the option of purchasing "premium service" without
the necessity of subscribing to "basic service." We recommended that the
Navy reevaluate the proposal submitted by Americable and award the
franchise agreement consistent with the RFP award criteria.
We note initially that the protester contends that the Navy's request
for reconsideration, which we received on
May 21, is untimely. We disagree. Our Bid Protest Regulations
require that a request for reconsideration shall be filed not later than
10 working days after the basis for reconsideration is known or should
have been known, whichever is earlier. 4 C.F.R. Sec. 21.12 (1986).
While our decision was issued on May 5, we allow a reasonable time, 1
calender week, for receipt by mail of the decision by interested
parties, absent evidence of earlier actual receipt. See Adrian Supply
Co.--Reconsideration, B-225472.3, Mar. 23, 1987, 87-1 C.P.D. P 328.
Thus, allowing time for receipt by mail, the Navy's request for
reconsideration filed on May 21 is timely.
In its request for reconsideration, the Navy again argues that we
lack jurisdiction to consider the award of a cable television franchise.
The Navy argues that the "agreement" is not a contract, no contracting
officer is involved, there can be no violation of a procurement statute
and/or regulation because the procurement laws and regulations do not
apply to the cable "agreement," and our bid protest jurisdiction does
not extend to anything other than appropriated fund procurements.
Essentially the Navy continues to disagree with our conclusion that
our bid protest jurisdiction extends to this type of procurement, and
the Navy is merely restating arguments it has previously made. Our
Office has repeatedly rejected the position which the Navy takes on this
issue. See, e.g., Cable Antenna Systems, 65 Comp. Gen. 313 (1986), 86-1
C.P.D. P 168; T.V. Travel, Inc.--Request for Reconsideration, 65 Comp.
Gen. 109 (1985), 85-2 C.P. D. P 640. We thus affirm this aspect of our
prior decision.
Regarding the merits, the Navy asserts that it properly disqualified
Americable's offer because Americable's proposal did not provide
customers the option of purchasing "premium service" without subscribing
to "basic service." Again, our review of Americable's proposal showed
that Americable met this requirement.
In our prior decision, we stated that Americable's proposal met the
"premium service" requirement under the section of its proposal headed
"Tier I-Basic Cable-Free." Under this heading, the proposal listed a few
channels that all base residents would receive without paying any fee
whatsoever. Under this "Tier I" heading Americable also offered three
optional channels--The Movie Channel, Home Box Office, and
Cinemax--which could be purchased for a monthly fee. The offering of
these three channels met the requirement for "premium service" as
defined in schedule D, paragraph 1 (b) of the RFP (see footnote 2
above). The free "Tier I" service was separate and apart from yet
another portion of Americable's proposal which responded to the RFP's
requirements for "basic service" and was offered to customers for $4.95
per month. Since we concluded that the three premium channels were
offered in conjunction with the free "Tier I" service, we found that
Americable's proposal did, in fact, meet the RFP's requirement of
offering "premium service" without the necessity of purchasing "basic
service."
In its request for reconsideration the Navy refers to language in
Americable's proposal to support its position that Americable was
nonresponsive to the RFP's requirement for "premium service." The Navy
states that:
"... Americable specifically stated in a footnote under the
"Tier I" heading that The Movie Channel would not be available
without the necessity of subscribing to the basic service."
(Emphasis added by Navy.)
However, the footnote to which the Navy refers actually states:
"The Movie Channel (optional) will be available without the
necessity of subscribing to "basic service" or paying a ref
undable converter deposit." (Emphasis added by our Office.)
Thus, the Navy's statement of Americable's proposal is precisely the
opposite of what Americable's proposal, in fact, stated. Other than
this misquoted statement, the Navy offers no new evidence indicating
that the "premium service" offered by Americable required customers to
pay for, or was in any way linked with, the "basic service" it offered.
The Navy also maintains that it properly disqualified Americable's
proposal on the basis that Americable did not offer the proper "basic
service" when it responded to the RFP requirement for offerors to
provide free "basic service" to the Navy's ships and duty rooms. We
disagree.
The Navy's requirements for "basic service" were defined in schedule
D, paragraph 1 (a) of the RFP, and required a minimum of 10 channels, 8
of which were designated in the RFP. In its request for
reconsideration, the Navy expressly acknowledges that "what Americable
offered, in fact, was a special channel arrangement for ships and duty
rooms which happened to match the minimum requirements outlined in
schedule D of the RFP ." The Navy argues, however, that it intended
that offerors offer more channels than the minimum requirements
identified in schedule D and that the awardee, in fact, offered several
more channels then Americable offered.
In our prior decision, we concluded that Americable's proposal was
acceptable, because we found it met the free service requirement. The
Navy effectively acknowledges this in its reconsideration request.
Based on our conclusion that Americable submitted an acceptable
proposal, we recommended that the Navy reevaluate Americable's proposal
and upon reevaluation, make an award consistent with the RFP criteria.
The Navy now appears to be arguing that it awarded to Antilles
because its offer was superior to Americable, that is, it offered more
channels than the protester. The RFP award criteria provided that award
would be made, as a general rule, to the franchise which submitted the
lowest priced technically acceptable offer "for the broadest and best
quality service." The RFP also provided that award could be made to
other than the low offeror, if justified by certain enumerated
considerations. As indicated above, the RFP did not require an award to
Americable as the low offeror: If, as the Navy suggests, award to
Antilles can be justified under the award criteria, the Navy is not
required to disturb the award after review of both offers if it is
determined that the award was in accordance with our decision.
Therefore, our prior decision and recommendation is affirmed.
Comptroller General
of the United States
1/ Schedule D, paragraph 1 (a) of the RFP required the "basic
service" to consist of a minimum of 10 channels, 8 of which included:
MTV, ESPN, WTBS, NICKELODEON, USA, ABC affiliate, CBS affiliate, and NBC
affiliate.
2/ Schedule D, paragraph 1 (b) of the RFP required "premium service"
to consist of at least two of the following services: Home Box Office,
Showtime, The Movie Channel, the Disney Channel, and Cinemax.
3/ Paragraph 56 under the RFP section "General Requirements" stated:
"As consideration for use of the government owned cable system,
the government desires free basic cable service (basic tier) for
all duty rooms (approximately 27) aboard the Naval Base and for
visiting ships...."
Matter of: Americable International, Inc.
File: B-225570
Date: May 5, 1987
1. Since General Accounting Office's bid protest jurisdiction is
based on a finding that the protest concerns a procurement of property
or services by a federal agency, the award by a federal agency of a
franchise contract for cable television services is subject to GAO's bid
protest jurisdiction.
2. Protest is sustained where General Accounting Office review of
protester's proposal indicates agency erroneously concluded protester's
proposal did not meet request for proposal's requirements.
Americable International, Inc. protests the award of a cable
television franchise to Antilles Trading Company pursuant to the
Department of the Navy's request for proposals (RFP) No.
N62470-86-B-7931. We sustain the protest.
On September 15, 1986, the RFP was issued by the United States Naval
Base, Guantanamo Bay, Cuba, seeking proposals to provide the Naval Base
with cable television services. The RFP required Proposals to offer
both a "basic service" 1/ and a "premium service" 2/ and stipulated that
"premium service" must be available to subscribers without the necessity
of subscribing to the "basic service." The RFP also required the
successful offeror to provide free "basic service" to all ships and duty
rooms. 3/ Proposals were submitted by five offerors, including
Americable and Antilles. The RFP provided that award would be made, as
a general rule, to the franchise which submitted the lowest priced
technically acceptable offer "for the broadest and best quality service"
but also indicated award could be made to other than the low offeror, if
justified by certain enumerated considerations, for example, equipment
offered or repair capabilities.
On November 24, 1986, the Navy's Evaluation Committee reviewed the
proposals and recommended award of the franchise to Antilles. By letter
dated December 8, 1986, the Navy notified Americable that its proposal
had not been selected. On December 18, Americable filed its protest
with our Office.
Americable protests that its proposal met all the requirements of the
RFP and was priced lower than that of Antilles. Accordingly, it
maintains the award was improper.
The Navy, has chosen not to present any arguments concerning the
merits of this protest, opting to provide our Office with only the
Evaluation Committee Meeting Minutes and copies of Americable's and
Antilles' proposals. Rather than addressing the merits, the Navy argues
merely that our Office is without jurisdiction to resolve this matter
because it involves "an agreement that obligates no appropriated funds
and which confers no direct benefit to the Navy."
Preliminarily, we reject the Navy's arguments concerning
jurisdiction. Following enactment of the Competition in Contracting Act
of 1984 (CICA), 31 U.S.C. Sec. 3551 et seq., our bid protest
jurisdiction is based solely on a finding that the protest concerns a
procurement of property or services by a federal agency. Artisan
Builders, 65 Comp. Gen. 240 (1986), 86-1 C.P.D. P 85; Monarch Water
Systems, Inc., 64 Comp. Gen. 756 (1985), 85-2 C.P.D. P 146. Our
jurisdiction is no longer dependent on the expenditure of appropriated
funds (see T.V. Travel, Inc., et al.--Request for Reconsideration, 65
Comp. Gen. 109 (1985), 85-2 C.P.D. P 640), nor on the existence of
some direct benefit to the Government (see Spectrum Analysis & Frequency
Engineering, B-222635, Oct. 8, 1986, 86-2 C.P.D. P 406). Accordingly,
we find no merit in the Navy's contention that our Office lacks
jurisdiction because the agreement obligates no appropriated funds and
confers no direct benefit to the Navy.
The Navy also argues that its agreement to procure cable television
services is merely an agreement to lease government property (i.e. the
Government-owned cable television trunk system) under 10 U.S.C. Sec.
2667 (1982), and not a procurement of property or services. We
disagree. Here, the agreement concerns considerably more than a lease
of the cable television trunk system. The primary purpose of the
contract is clearly to provide cable television services to th Naval
Base generally. In addition, the RFP stipulates that free cable service
must be provided to all Navy ships and duty rooms.
Both before and after enactment of CICA, our Office has taken
jurisdiction over bid protests concening virtually identical
procurements of cable television services by a federal agency. See
Cable Antenna Systems, 65 Comp. Gen. 313 (1986), 86-1 C.P.D. P 168;
B.M.I., Inc., B-212286, Nov. 2, 1983, 83-2 C.P.D. P 524; R & E
Cablevision, B-199592, Feb. 19, 1981, 81-1 C.P.D. P 110; Teleprompter
of San Bernadino, Inc., B-191336, July 30, 1979, 79-2 C.P.D. P 61. We
have repeatedly concluded that our Office has jursidiction to consider
protests concerning this type of procurement. We again conclude that
this type of solicitation clearly represents a procurement of services
by a federal agency and that our Office has jurisdiction to consider the
matter.
Turning to the merits, we are concerned that the Navy has chosen to
provide us with limited documentation concerning the substance of the
protest. Our Bid Protest Regulations, 4 C.F.R. Sec. 21.3(c) (1986),
require agencies to file complete reports with our Office concerning a
protest. This section of our regulations specifically requires that the
agency's report include a statement by the contracting officer which is
"fully responsive to all allegations of the protest which the agency
contests." In declining to respond in full to the merits of the protest,
the Navy has failed to comply with the regulatory requirements.
Based on the information before us, it appears that the Evaluation
Committee erroneously and unreasonably disqualified Americable's
proposal from consideration. The Evaluation Committee Meeting Minutes
state that Americable's proposal failed to provide free cable service to
ships and duty rooms and also failed to provide customers with the
option of subscribing to premium channels without purchasing the "basic
service". 4/ However, it appears that Americable did offer these
required services.
The copy of Americable's proposal which the Navy sent to us clearly
includes a provision offering to provide free basic cable service to
ships and duty rooms. Tab 1 of Americable's proposal contains a section
headed "Free Basic Tier - Ships and Duty Rooms." The services offered
under this heading are precisely those specified in the RFP under
Schedule D and Paragraph 56 of the section headed "General
Requirements." Accordingly, we find no basis for concluding that
Americable's proposal did not offer free basic cable service to the
ships and duty rooms.
Based on our reading of Americable's proposal, it appears that
Americable did offer customers the option of purchasing "premium
service" without the necessity of buying the "basic service." We have
reached this conclusion without the benefit of the Navy's analysis of
Americable's proposal since the Navy declined to provide this
information to us.
Americable's proposal contained two separate offerings of cable
television services to base residents. First, under the heading "Tier I
- Basic Cable - Free", the proposal listed a few channels that all base
residents would receive without paying any fee whatsoever. The schedule
of channels under this heading also listed three optional channels--The
Movie Channel, Home Box Office (HBO), and Cinemax--which base residents
could purchase for a monthly fee. These three optional channels were
ones which met the Navy's requirement for "premium service".
The second offering of cable services in Americable's proposal
responded to the RFP's requirements for "basic service" and was
presented under the heading "Tier II - Basic Cable - $4.95 Monthly".
Under this heading, Americable listed twenty channels, including the
eight required by the Navy for "basic service", which it offered
subscribers for $4.95 per month. The schedule of channels under this
heading also listed three optional channels--The Disney Channel,
Showtime and The Playboy Channel--which were available for an additional
monthly fee. The list of available channels under this heading did not
contain The Movie Channel, HBO, or Cinemax.
Since the three optional channels listed under "Tier I Basic Service
- Free" (The Movie Channel, HBO, and Cinemax) were listed in that
schedule alone and were not listed in the schedule of channels offered
under "Tier II - Basic Cable $4.95 Monthly", it appears that those three
optional channels were offered exclusively under the "Tier I - Basic
Cable Free" service which Americable proposed to provide to all base
residents. We note that the following footnote appeared under the "Tier
I" heading.
"The Movie Channel (optional) will be available without the
necessity of subscribing to the Basic Tier Service of $4.95 per
month or paying a refundable converter deposit."
This footnote seems to imply that only The Movie Channel--and not the
two other optional channels listed under this heading--were available to
customers without paying a converter deposit and/or subscribing to the
"basic service" ("Tier II - Basic Cable - $4.95 Monthly).
Although it is unclear why it was included, we do not think that this
footnote overcomes our reading of the proposal that Americable offered
customers the required "premium service" without the necessity of
purchasing "basic service" at the $4.95 rate. First, we find the
implication in the footnote inconsistent with the fact that Americable
listed all three channels (The Movie Channel, HBO, and Cinemax) under
"Tier I - Basic Cable - Free" and none of them under "Tier II - Basic
Cable - $4.95 Monthly". This indicates to us that the three channels
offered under "Tier I" did not require payment of the $4.95 monthly fee.
Second, concerning the refundable converter deposit mentioned in the
above footnote, we note that Americable's proposal offers HBO and
Cinemax on channels 10 and 11, which are within the normal VHF range.
Thus, it appears that converters for these channels would be
unnecessary, and there is no basis to assume that any deposit was
necessary to obtain those premium stations, contrary to the footnote's
implication.
Finally, the Evaluation Committee Meeting Minutes indicate that the
committee compared the relative prices of the proposals on the basis of
the cost for basic service plus one premium channel. Using this
criterion, we find that Americable's proposal offers a price
substantially lower than that of Antilles'.
In summary, we conclude that Americable's proposal did, in fact,
offer free basic cable service to the ships and duty rooms and also
offered the stipulated premium service with the option of purchasing it
without the basic service. Accordingly, based on the information
provided to us, we conclude that the Navy erroneously disqualified
Americable from further consideration by concluding that Americable's
proposal did not comply with the RFP's requirements.
The protest is sustained.
The Navy has stated that the franchise agreement awarded under this
solicitation is terminable at will, with no potential termination costs
to the Navy. Accordingly, we recommend that the Navy reevaluate the
proposal submitted by Americable. Upon reevaluation, the franchise
agreement should be awarded consistent with the criteria established in
the RFP, and if Americable is determined to be in line for award the
franchise agreement with Antilles should be terminated and award made to
Americable.
Acting Comptroller General
of the United States
1/ Schedule D, paragraph 1 (a) of the RFP required the basic service
to consist of a minimum of 10 channels, 8 of which included: MTV, ESPN,
WTBS, NICKELODEON, USA, ABC affiliate, CBS affiliate, and NBC affiliate.
2/ Schedule D, paragraph 1 (b) of the RFP required the premium
service to consist of at least two of the following services: Home Box
Office, Showtime, The Movie Channel, The Disney Channel, and Cinemax.
3/ Paragraph 56 under the RFP section "General Requirements" stated:
"As consideration for the use of the government owned cable
system, the government desires free basic cable service (basic
tier) for all duty rooms (approximately 27) aboard the Naval Base
and for visiting ships...."
4/ Although the Committee expressed some concern with Americable's
performance on prior contracts at other bases based on telephone
conversations with those bases' user personnel, it appears that
Americable's offer was rejected because of the alleged omissions.
Matter of: The Associated Corporation
File: B-225562
Date: April 24, 1987
1. General Accounting Office denies a protest against award of a
contract while an agency-level protest was pending where the agency
failed to make certain determinations required by regulation, because
the agency's alleged actions are unrelated to the validity of the
selection decision.
2. Agency's decision to exclude protester's proposal from the
competitive range, based upon major deficiencies in personnel experience
and management planning and reporting, weaknesses in other areas of the
proposal, and a total evaluation score about 43 percent less than that
of the other offeror was not unreasonable or otherwise in violation of
applicable statutes and regulations.
The Associated Corporation (TAC) protests the exclusion of its
proposal from the competitive range under request for proposals (RFP)
No. N00032-86-R-1632, issued by the Joint Cruise Missiles Project,
Department of the Navy. TAC argues that the agency improperly evaluated
its proposal and that the firm should have had an opportunity to discuss
the deficiencies and submit revisions.
We deny the protest in part and dismiss it in part.
The solicitation, issued on August 13, 1986, sought a 2-year contract
to analyze and test the Tomahawk cruise missile combat control system
used on submarines for compliance with nuclear safety standards. The
RFP stated that proposals would be evaluated in three areas: technical,
management, and cost. The technical and management areas were to be
"significantly more important than the cost area." The RFP listed
several technical and management evaluation factors and numerous
subfactors under each.
The Navy received proposals from TAC and the incumbent contractor,
Logicon, Inc., by the September 12 closing date. The technical
evaluation team, using a 10,000-point scale, gave the technical area a
maximum of 5,000 points, the management area 4,000 points, and cost
(cost realism and the lowest cost to the government) 1,000 points. The
two offerors scored as follows:
Possible
Technical TAC Logicon Score
1.1 Understanding of 1370 1920 2000
the Nuclear Safety and
Certification Process
1.2 Understanding 997.5 1477.5 1500
Requirements of the
Statement of Work
1.3 Understanding the 1203 1449 1500
Scope of Nuclear Safety
Analyses
Management
2.1 Personnel 150 1488.75 1500
Experience
2.2 Planning and 217.5 1000 1000
Reporting
2.3 Transition and 187.5 727.5 750
Continuity Approach
2.4 Corporate 390 735 750
Experience
Cost
3.1 Cost Realism 500 500 500
3.2 Lowest Cost 500 370 500
TOTAL 5515.5 9667.75 10,000
The scores for cost resulted from both firms receiving the maximum
for cost realism and TAC's estimated cost being substantially less than
Logicon's.
The technical evaluation team generally gave TAC scores that equated
to descriptive ratings of either "outstanding" or "satisfactory" for the
factors and subfactors in the technical area. Under management,
however, it rated TAC "unacceptable" for three out of four factors
(personnel experience, management planning and reporting, and transition
and continuity approach) and "poor" for the fourth factor (corporate
experience).
On October 14, the agency's contract award panel decided to eliminate
TAC's proposal from the competitive range because it was unacceptable
and did not have a reasonable chance of being selected for award. After
the contracting officer notified TAC of this decision on November 3, the
firm protested to the agency, which denied the protest on November 26.
Instead of awarding a contract under the RFP, the Navy elected to cancel
it and exercise an option for an additional year under Logicon's
then-current contract for the same services. The contracting officer
concluded that the option represented a lower cost to the government
than Logicon's proposal under the RFP. On December 15, TAC protested to
our Office.
TAC initially complains that the Navy improperly exercised the option
while its agency-level protest, dated November 5, was pending, without
making certain determinations required by the Federal Acquisition
Regulation (FAR), 48 C.F.R. Sec. 33.103 (1986). The Navy responds that
the envelope containing the protest was not properly addressed, so that
the document was not delivered to the contracting officer until November
7, the day after it was received by the agency. The contracting officer
states that in accord with her normal practice, she opened her mail at
the end of the day, following execution of the option earlier on
November 7.
Irrespective of the merits of TAC's argument, any failure by the Navy
to follow the regulations in making an award while the protest was
pending does not affect the validity of the award and does not provide a
basis for us to sustain the protest. Carolina Waste Systems, Inc.,
B-215689.3, Jan. 7, 1985, 85-1 CPD P 22. Consequently, we dismiss this
ground for the protest.
The protester's primary basis for protest concerns exclusion of its
proposal from the competitive range. TAC argues that the major
deficiencies cited by the Navy to justify the exclusion either resulted
from a misreading of the proposal or are informational or minor in
nature, so that they could easily be remedied during discussions. The
protester also contends that the contracting officer applied the wrong
legal standard and improperly considered certain matters in determining
the competitive range.
The Competition in Contracting Act of 1984 requires that if an agency
conducts discussions, it must do so with all responsible offerors within
the competitive range. 41 U.S.C. Sec. 253b(d)(2) (Supp. III 1985). The
FAR provides that the competitive range must include all proposals that
have a "reasonable chance of being selected for award," and that any
doubt as to whether a proposal is in the competitive range should be
resolved by inclusion. 48 C.F.R. Sec. 15.609(a) In view of the
importance of achieving full and open competition in government
procurement, we closely scrutinize any evaluation that results in only
one offeror being included in the competitive range. Coopers & Lyband,
B-224213, Jan. 30, 1987, 87-1 CPD P .
The most important evaluation factor in the management area was
personnel experience, worth 15 percent of all available points. Under
this factor the RFP listed four subfactors describing expertise in
relevant subjects such as "expertise in nuclear missile systems" and
"expertise in the nuclear safety and certification process." As noted
above, the Navy found TAC's proposal "unacceptable" under this factor.
The RFP contemplated a cost-plus-fixed-fee-contract for fiscal year
1987, with an option for fiscal year 1988. It estimated that 52,000
man-hours would be required for each year. TAC proposed that 46,473 of
the hours in the first year would be provided by the technical and
senior technical staff. The firm stated that the great majority of this
effort (33,153 hours) would be performed by employees to be recruited by
TAC. The protester only identified 3 full-time senior technical staff
members, 1 part-time senior technical staff member, and 9 other
technical staff members who would provide a total of 13,320 hours during
the first year; only 4 of these proposed staff members are currently
employed by TAC. The firm's employment plans, as described in the
proposal, provide for new staff members to have at least a recent
technical degree or to be working toward one, and to be "literate in at
least one high-order lang uage or equivalent skills in DoD processes."
Thus, the new staff members would not necessarily have experience in
nuclear systems or the other relevant subjects listed in the RFP. Seven
out of the nine proposed technical staff members who were identified
were college students who would work for one-fourth or one-half of the
year. While the students' resumes establish that they may have some
relevant experience, the Navy concluded that the resumes were
insufficiently detailed to evaluate that experience.
The Navy concluded that TAC's staffing plan presented a substantial
risk. In light of the number of inexperienced new employees and
part-time students that TAC proposed, the evaluation team considered
experience of TAC's proposed staff to be very low for each of the four
subfactors evaluated; it pointed out that two individuals with relevant
experience were not current employees and that TAC had not submitted a
letter of commitment from them as required by the RFP. For one of the
evaluation subfactors, "expertise in the nuclear safety and
certification process," the Navy found that only one current employee
proposed as a fulltime staff member had knowledge and experience, while
only three or four had expertise encompassed by the other listed
subfactors.
TAC responds that the RFP did not require that each staff member have
expertise in each of the subjects described by the subfactors under
personnel experience. According to the protester, the technical staff
members to be employed will have the computer languaqe skills necessary
to perform their tasks as supervised and checked by the senior technical
staff. The protester also argues that it proposed individuals with
substantially the same skills and experience in an earlier procurement
for the same services and that this was "entirely satisfactory" to the
Navy at that time. TAC further argues that the Navy failed to evaluate
the overall expertise of its proposed staff, and by focusing exclusively
on the qualifications of future employees, the agency deviated from the
evaluation scheme. The protester also asserts that offerors were
required to obtain letters of commitment for proposed employees, but
were not required to include them with their proposals.
We find that the Navy did consider TAC's entire proposed staff, and
that it did not establish a requirement that new employees have a
certain level of experience unrelated to the work they would perform.
Rather, the agency reasonably questioned the protester's ability to
perform the contract successfully with a very small core of experienced
individuals relative to the entire contractual effort. We are unable to
evaluate TAC's assertion that individuals with similar skills and
experience were previously acceptable to the Navy, since TAC has not
provided supporting evidence such as resumes and other relevant portions
of its previous proposal and the solicitation for that procurement.
While we disagree with the protester's assertion that letters of
commitment were not required to be included with proposals, this was a
deficiency that could readily be remedied. See Falcon Systems, Inc.,
B-213661, June 22, 1984, 84-1 CPD P 658. On the whole, however, we find
the Navy's conclusion that TAC's proposal was seriously deficient in
experience of personnel and unacceptable without a major revision was
reasonable.
The Navy also found TAC's proposal to be "unacceptable" under the
management planning and reporting factor, which included such subfactors
as "proposed scheduling of the performance of tasks . . . to meet
program requirements" and "proposed management plan for staffing . . .
tasks with dedicated personnel to ensure program continuity." TAC
received no evaluation points with respect to one subfactor, "proposed
progress and financial tracking and reporting." The Navy found that TAC
did not describe procedures and methodologies for how and when budgets
for tasks would be developed and how and when progress against the
budgets would be reviewed.
The protester cites a few general statements in its proposal that
refer to monitoring of progress, such as "the project manager has direct
control of the assigned workforce against a planned budget of man-hours
by task and individual assignment." TAC also complains that the RFP
imposed a 50-page limit for proposals; asserts that the Navy should
have focused upon TAC's staff distribution by skill-level for each
fiscal year and other information, rather than on budgeting procedures
and methodologies; and states that when TAC provided the same services
under an earlier contract, the Navy asked the firm to reduce the amount
of information in its monthly status report.
None of these arguments contradict what is clear from reading TAC's
proposal: the firm did not address management of "proposed progress and
financial tracking and reporting." TAC's receipt of no points for this
subfactor was appropriate. With respect to the 50-page limit on
proposals, we note that within the page limit, Logicon discussed in
detail how it planned to develop task plans and budgets and to monitor
progress and expenditures. We have no reason to question TAC's rating
of unacceptable under the management planning and reporting factor.
The Navy did not find TAC's proposal to be "unacceptable" in the
technical area; however, it identified a number of technical weaknesses
that it considered in making the competitive range determination. The
technical evaluation team rated TAC "poor" under a subfactor for
"understanding of software tools and test facilities requirements." The
evaluation team rated TAC barely satisfactory for its "understanding of
technical reporting and system review requirements," considering TAC's
proposal weak in this area.
TAC contends that its understanding of software tools and test
facilities requirements was established by its reference in its proposal
to two government-furnished software tools and a statement concerning
approximately when and how long TAC would require use of test facilities
at the Naval Underwater Systems Center. The protester also argues that
the Navy ignored portions of its proposal in concluding that TAC's
understanding of technical reporting and system review requirements were
weak.
We find that the Navy properly evaluated TAC's proposal with regard
to technical factors. A reference to two general software tools in one
sentence does not evidence an understanding of the requirement for
software tools. Logicon, for example, proposed the use of 5
governmentfurnished software tools and 12 contractor-furnished software
tools, summarized their functions and applications, and provided
additional information. The technical evaluation team criticized TAC's
reference in its proposal to a software tool called the "Software
Inspector," since the tool was under development. TAC states that it
only referred to the "Software Inspector" and its planned completion in
1986 to show experience in independent research and development. We
believe that in the absence of a comprehensive discussion in TAC's
proposal of the software tools requirement, the Navy properly believed
that TAC contemplated some role for the "Software Inspector" during
contract performance, and reasonably took this into account in the
evaluation.
We find that TAC's summary statements in its proposal regarding the
need to use government facilities and its plans for technical reporting
and system review also do not evidence more than a weak understanding.
For example, in its proposal TAC devoted four sentences to technical
reporting and system review, including the following:
"The project manaqement staff maintains a computer data base of
all schedules and contract data delivery requirements, updates
these schedules as the program changes and notifies the project
manager of all changes. The project manager in regular meetings
with corporate management provides progress and changes requiring
management or contractual action."
This level of detail does not establish the understanding required;
as the agency reports, there is no indication of when the staff would
update delivery requirements, how and when the staff would notify the
project manager of changes, how often "regular" meetings would be held
with corporate management, and whether corporate management would have
independent methods to monitor progress or verify reports. Here, too,
TAC's complaint that it was handicapped by the 50-page limit is refuted
by Logicon's detailed and comprehensive discussions in these areas.
TAC contends that many of the deficiencies in its proposal are
informational in nature and do not warrant exclusion from the
competitive range. We disagree. While we can identify some
deficiencies that could readily be remedied by additional information
during discussions, such as the omission of letters of commitment
discussed above, most of the deficiencies relate to a lack of
understanding of requirements to perform the work satisfactorily, a lack
of diligence in preparing the proposal, or a lack of corporate or
individual capabilities that, in total, would require substantial
revisions to correct.
Agencies are not required to permit an offeror to revise an
unacceptable initial proposal where the deficiencies are so material
that major revisions are required to make the proposal acceptable. ASEA
Inc., B-216886, Feb. 27, 1985, 85-1 CPD P 247. Here, TAC's proposal in
the management area contains substantial deficiencies that would require
submission of virtually a new proposal, and, we believe, support the
Navy's judgment that the proposal did not have reasonable chance for
award. See Falcon Systems Inc., supra.
Finally, the protester claims that the following statement by the
contracting officer indicates that she entertained improper
considerations:
"I also determined that a best and final offer request would be
unfair to Logicon because the nature and extent of TAC's
deficiencies would, essentially, give TAC the opportunity to
re-propose. The nature of the deficiencies in the TAC proposal
resulted from lack of diligence in reading the proposal
instructions and evaluation criteria. I also saw no reason to
have TAC spend additional money and manhours on a best and final
offer when I could not foresee TAC coming up to the technical
level of Logicon without a commensurate increase in costs."
TAC argues that consideration of fairness to Logicon was improper.
On the contrary, we believe that the contracting officer was merely
stating one of the reasons for the rule applied in this case--including
an offeror in the competitive range whose proposal is so seriously
deficient that it will require essentially a new proposal would be
unfair to offerors submitting acceptable proposals in the first place,
and to do so would undermine the integrity of the procurement process.
Similarly, including a proposal in the competitive range that does not
have a reasonable chance for award is not fair to the offeror who will
incur needless expenditures of time and money persisting in the
procurement.
TAC also complains that the contracting officer improperly
"speculated" that an improvement in TAC's technical proposal would
result in a commensurate cost increase. TAC believes that the cost
impact of a revised proposal should only be determined by obtaining a
best and final offer. We believe that the contracting officer was
merely pointing out another rationale for her belief that TAC had no
reasonable chance for award--the firm would lose its initial cost
advantage if it cured the deficiencies in its proposal. An opportunity
to obtain lower costs is a reasonable consideration in competitive range
determinations, PRC Computer Center, Inc. et al., 55 Comp. Gen. 60
(1975), 75-2 CPD P 35, and we cannot object to the contracting officer's
belief that TAC's proposal did not actually represent an opportunity for
the Navy to obtain acceptable services for a lower cost.
We deny the protest in part and dismiss it in part.
Harry R. Van Cleve
General Counsel
Matter of: Folk Construction Company, Inc.
File: B-225560
Date: February 12, 1987
1. Agency decision to use negotiation procedures in lieu of sealed
bidding procedures is justified where the basis for award reasonably
includes technical considerations in addition to price-related factors.
2. Protest that agency's use of negotiation procedures for acquiring
excavation work in lieu of sealed bidding procedures is unduly
restrictive of competition because the excavation industry virtually
always competes under sealed bidding procedures is denied where the
legitimate needs of the agency reasonably dictated that a negotiated
procurement be used and adequate competition was obtained.
Folk Construction Company, Inc. protests the terms of request for
proposals (RFP) No. DACA01-87-R-0015, issued by the Army Corps of
Engineers, Mobile, Alabama, for the construction of helicopter
stagefields at Fort Rucker, Alabama. Folk contends that the Army should
have solicited sealed bids instead of competitive proposals for this
requirement.
We deny the protest.
The construction project for the helicopter stagefields involves,
among other things, in excess of 1 million cubic yards of excavation,
paving, and the construction of associated support buildings and control
towers. The RFP states that award will be made to the responsible
offeror whose proposal is evaluated as the most advantageous to the
government, technical, price, and other factors considered. In this
connection, the RFP lists the following major evaluation criteria: 1)
Technical Capabilities and Experience, including construction
methodology, similar past experience, and scheduling; and 2)
Organization and Personnel, including proposed organization, supervisory
personnel, quality control management, and financial capacity. Further,
the RFP states that cost or price will not be scored but will be
evaluated through the use of price analysis.
Folk argues that under the Competition in Contracting Act of 1984
(CICA), 10 U.S.C. Sec. 2304 (Supp. III 1985), and under the implementing
regulations, sealed bidding is still the preferred method of
procurement. Folk argues that the Army has complete, detailed and
extensive specifications comprising two large volumes; that time
permits the submission of sealed bids since the RFP itself allows 6
weeks for submission of proposals; that the technical information
required by the RFP is "no different" than technical data required by
any government solicitation; that the technical information required by
the RFP can be obtained by the government through a pre-bid conference
or pre-award survey under sealed bidding; that it is not necessary to
conduct discussions because the construction project has no unusual or
unique quality to it but rather is ordinary "cut and fill excavation" of
not great magnitude that can be timely completed by "any responsible
bidder"; and that the government can reasonably expect to receive
numerous sealed bids. Moreover, Folk contends that even if use of a
negotiated solicitation is legally unobjectionable, sealed bidding is
still the most appropriate acquisition method under the circumstances.
In response, the Army states that the using agency requires
completion of the work by April 1988, and that therefore the RFP
requires the work (estimated by the Army to cost $26 million) to be
completed within 400 calendar days after receipt of the notice to
proceed. The Army also states that failure to complete the work
strictly on schedule will result in a 30 percent reduction in projected
training of Army personnel at the base equivalent to a loss of student
flight training at a rate of approximately 800 students per day.
Additionally, the Army claims that any construction delay would also
delay aerial gunnery and multi-track training within the Army's flight
training curriculum. Accordingly, since timely completion of the
project is critical to the Army and because of the magnitude of the
project, the Army determined that evaluation of of ferors' management,
supervision, and subcontractor coordination was essential.
We do not think that the Army acted improperly. While CICA
eliminated the former statutory preference for formally advertised
procurements ("sealed bids"), the statute and the implementing
regulations do provide specific criteria for determining whether a
procurement should be conducted by the use of sealed bids or competitive
proposals. The Federal Acquisition Regulation (FAR), 48 C.F.R. Sec.
6.401 (1986), provides for the use of sealed bidding if:
"(1) Time permits the solicitation, submission, and evaluation
of sealed bids;
"(2) The award will be made on the basis of price and other
price-related factors;
"(3) It is not necessary to conduct discussions with the
responding offerors about their bids; and
"(4) There is a reasonable expectation of receiving more than
one sealed bid."
One of the requirements for the use of sealed bids is that award will
be made on the basis of price and other price-related factors. The
basis for award here is not restricted to price-related factors alone.
The Army, in addition to requesting prices, also seeks technical
proposal containing specific technical data that will be measured
against various technical criteria. Such a procurement clearly does not
satisfy the requirements for the use of sealed bids. The protester,
however, argues that the data the Army seeks for evaluation purposes is
not so unique that it cannot be obtained during a preaward survey as
part of a responsibility determination under sealed bidding procedures
We do not agree that a preaward survey can be used as a substitute
for negotiations, and a technical evaluation. A preaward survey is part
of an agency's investigation of an offeror's responsibility which
focuses on a prospective contractor's ability to meet minimum
responsibility standards--such as adequate financial resources and a
satisfactory performance record. See Pope, Evans and Robbins, Inc.,
B-200265, July 14, 1981, 81-1 CPD P 29. In contrast, the focus of the
negotiation process is a relative assessment of the merits of individual
proposals, including an evaluation of matters that are traditional areas
of responsibility.
See SBD Computer Services Corp., B-186950, Dec. 21, 1976, 76-2 CPD P
511. Thus, the Army here does not seek to determine whether a low
bidder is minimally acceptable; rather, the Army is seeking one
contractor among many responsible contractors that, on a comparative
basis, is highly technically qualified. A preaward survey is not a
proper vehicle for that kind of requirement.
Folk also argues that earthmoving requirements have traditionally
been procured by sealed bidding by the Army and other agencies and that
the protester is unfamiliar with negotiation techniques, including
technical proposal submission, and is ill-equipped to compete under
negotiation procedures. Further, the protester, supported by a letter
from a trade organization, argues that the industry as a whole is also
ill-equipped to compete under negotiation procedures because the
overwhelming majority of procurements of this type are conducted under
sealed bid procedures. Folk also argues that the Army did not comply
with CICA, 10 U.S.C. Sec. 2305(a) (1) (C), which generally requires that
the "type of specification included in a solicitation shall depend on
the nature of the needs of the agency and the market available to
satisfy such needs." According to Folk, the Army did not consider the
nature of the market in choosing to conduct a negotiated procurement.
Therefore, the protester concludes that the Army's use of negotiated
procedures is unduly restrictive of competition.
We do not think that the Army unduly restricted competition by using
negotiated procedures. The Army advises that 11 proposals were received
in response to the RFP, including one from the protester, and there is
no evidence in the record that adequate competition was not obtained by
the Army despite the alleged lack of familiarity of the industry with
negotiation techniques. In addition, Folk's lack of expertise and
alleged inability to compete viably under the terms of the RFP is not a
basis for us to conclude that the negotiated method of procurement is
unduly restrictive of competition because the fact that a potential
offeror is unable or unwilling to compete under the terms of a
solicitation does not render a solicitation unduly restrictive if it
represents the legitimate needs of the agency. See generally H.M.
Sweeny Co., B-197302, June 12, 1980, 80-1 CPD P 413. Also, the CICA
provision (10 U.S.C. Sec. 2305(a)(1)(C)) cited by Folk applies, by its
terms, to specifications in a solicitation and not to the method of
procurement chosen by an agency.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Southwest Marine, Inc.
File: B-225559; B-225559.2
Date: April 22, 1987
1. Protest of alleged sole-source award is without merit where the
agency issued an invitation for bids (IFB) to six potential contractors,
three of which submitted bids. The fact that only one bidder was able
to satisfy a qualification requirement contained in the IFB prior to the
planned award date did not render this a sole-source procurement.
2. There is no merit to protester's contention that the agency
violated statutory requirements that an agency inform prospective
bidders of what must be done to satisfy a qualification requirement and
that it promptly furnish a firm seeking qualification with specific
information why qualification was not obtained where the agency provided
detailed information concerning the qualification requirement to a
number of prosoective bidders, including the protester, several months
prior to issuance of a solicitation and provided the protester with a
detailed list of reasons for the agency's determination that the
protester had not satisfied the qualification requirement.
3. Protest of nonresponsibility determination is denied where the
agency had a reasonable basis for concluding that there was a
significant risk that the protester might not be able to perform the
contract in a timely manner in accordance with the required performance
schedule.
Southwest Marine, Inc. protests the rejection of its low bid and the
award of a contract to Continental Maritime of San Diego, Inc. under
invitation for bids (IFB) No. N62791-87B-0015, issued by the Navy's
Supervisor of Shipbuilding, Conversion and Repair, San Diego,
California. Southwest contends that the award to Continental was made
improperly on a sole-source basis, that the agency did not provide
Southwest a meaningful opportunity prior to award to satisfy a
prequalification requirement, and that the agency improperly determined
that Southwest was not responsible. We deny the protest.
The solicitation, which was for repairs and alterations of the USS
TRUXTUN, a nuclear-powered cruiser, contemplated the award of a job
order under a Master Agreement for Repair and Alteration of Vessels. 1/
A significant portion of the work required involves the vessel's
secondary propulsion plant system. The solicitation included a section
entitled "Special Contract Provisions for Work On Board NuclearPowered
Surface Vessels" (Attachment J-3) which contains detailed requirements
concerning such matters as steam plant cleanliness, security, and
training of personnel. Amendment No. 3 to the solicitation advised
bidders that the contracting officer's determination of a bidder's
responsibility would be based in part on whether the bidder had obtained
prior to award a certification from the Naval Sea Systems Command
(NAVSEA) to perform work on secondary propulsion plant systems on
nuclear-powered surface vessels in accordance with both the requirements
of Attachment J-3 and an August 21, 1986, letter to all Master Agreement
contractors in San Diego. The amendment provided that a bidder not
having such a certification prior to bid opening would be determined to
be nonresponsible, unless there was sufficient time prior to award "to
permit the proper assessment of the offeror's qualifications."
When the agency opened bids on December 1, the bid from Southwest was
the lowest of three bids received. On December 3 and 4, the agency
conducted a preaward survey of Southwest which resulted in a
recommendation that award not be made to the firm. The contracting
officer determined that Southwest was not responsible and so informed
the firm by letter dated December 12. The contracting officer stated in
the letter that while the solicitation required that some of the repair
work be accomplished in a certified mercury-free environment, the
certified facility Southwest planned to use was for sale. The
contracting officer said that if the facility were to be sold without
providing for Southwest to retain use of the facility until work under
this contract was complete, relocating to another certified facility
could cause a delay in contract performance. In addition, the
contracting officer noted that when agency personnel contacted some of
Southwest's proposed subcontractors and suppliers of critical items,
they were informed that Southwest had not contacted the proposed
subcontractors regarding either prices or delivery terms.
In further support of the nonresponsibility determination the
contracting officer said that the work schedule Southwest submitted did
not include all of the propulsion plant work items and did not allow
time for performance by subcontractors. With respect to staffing
levels, the contracting officer noted that Southwest could have
difficulty in providing a sufficient number of personnel with both the
security clearance and training required under the solicitation by the
date scheduled for start of production. Further, Southwest had
indicated that a significant number of repair parts would not arrive
until midway through the contract production period. Southwest's
failure to provide some written procedures as required, as well as the
unacceptability of some of the procedures that were submitted, were also
cited as reasons for finding the firm to be nonresponsible.
Finally, the contracting officer noted that Southwest had not been
certified by NAVSEA to perform work on secondary propulsion plant
systems on nuclear-powered surface vessels, as the solicitation
required. The contracting officer stated there was no longer sufficient
time prior to the scheduled award date to determine whether Southwest
met the requirements for certification. 2/
Southwest filed its first protest with this Office on December 12
(B-225559), objecting to the proposed award to Continental Maritime on
the basis that the agency had violated 10 U.S.C. Sec. 2319(b) (Supp. III
1985) by not affording Southwest a meaningful opportunity to obtain the
NAVSEA certification. Southwest also contended that since only one firm
had been certified, an award to Continental would represent a
sole-source award without agency compliance with the justification and
approval requirements of 10 U.S.C. Sec. 2304. On December 24, after
receiving notice of the contracting officer's nonresponsibility
determination, Southwest filed an additional protest (B-225559.2)
challenging each of the reasons stated as a basis for that
determination. 3/
There is no merit to the protester's contention that the agency made
award to Continental on a sole-source basis without complying with the
requirements of 10 U.S.C. Sec. 2304. That statute requires that
agencies obtain full and open competition through the use of competitive
procedures when acquiring goods or services, except in seven specified
circumstances. 10 U.S.C. Secs. 2304(a) (1) (A) and (c). When an agency
invokes one of the seven exceptions, the use of other than competitive
procedures must be justified and approved in accordance with the
requirements of 10 U.S.C. Sec. 2304(f). "Full and open competition"
means, however, that all responsible sources are permitted to submit
offers. 10 U.S.C. Sec. 2302(3); 41 U.S.C. Sec. 403(7) (Supp. III
1985). In this case, the agency allowed all potentially responsible
sources to bid (solicitations were issued to six Master Agreement
contractors in the San Diego area) and three potential sources,
including the protester, did so. Thus, even though only one source may
have been considered qualified by the time of award, this is not a case
where the agency determined in advance that only one source could meet
its needs, and therefore does not constitute a "sole-source" procurement
to which the justification and approval requirements of 10 U.S.C. Sec.
2304 apply. See Treadway Inc.--Request for Reconsideration, B-221559.2,
July 31, 1986, 65 Comp. Gen. , 86-2 CPD P 130. In fact, at the time
the solicitation was issued it was possible that all six of these firms
could have became qualified sources by the time award was made.
We also find no violation of section 2319 of title 10. That section,
entitled "Encouragement of New Competitors," defines a "qualification
requirement" as "a requirement for testing or other quality assurance
demonstration that must be completed by an offeror before award of a
contract." The term embraces such things as qualified bidders lists,
qualified manufacturers lists, and qualified products lists (OPL). The
agency argues that the reference in the statute to "quality assurance
demonstration" should be read narrowly as applying only to an offeror's
quality control procedures and not to a requirement involving safety and
security. We do not agree. In our view, the statute appears to
describe the requirement imposed by the agency in this case: that a
bidder have obtained prior to award certification and approval by NAVSEA
to perform work on secondary propulsion plant systems on nuclear-powered
surface vessels.
The statute provides that if an agency wishes to establish a
qualification requirement it must specify in writing and make available
to potential offerors all requirements that prospective offerors must
satisfy in order to become qualified. 10 U.S.C. Sec. 2319(b)(2). The
statute also requires that an agency promptly furnish to a firm seeking
qualification specific information as to why qualification was not
obtained. 10 U.S.C. Sec. 2319(b)(6). It is these two requirements of
section 2319 that Southwest claims were violated in this case.
The record shows that the agency informed ten San Diego-area Master
Agreement contractors in June 1986 that the requirements of Attachment
J-3 would apply to two scheduled vessel repair solicitations, one being
the IFB for work on the TRUXTUN to be issued in early November. The
agency furnished copies of the requirements to the firms and advised
them to indicate their interest in qualifying no later than June 30. By
memorandum dated August 21, the agency provided additional material to
the several firms that apparently had expressed an interest in
qualifying and informed them of a meeting scheduled for September 9 to
discuss the qualification requirement. Representatives of Southwest
attended that meeting. The agency assembled a certification team to
inspect each firm's facilities and review its procedures for compliance
with certification requirements. By letter dated November 25, the
agency informed Southwest that the certification team had reported
unsatisfactory findings with respect to each of the five general areas
4/ involved in the certification process. The letter identified
specific reasons for each unsatisfactory finding. For example, under
"Training" the agency stated that lesson plans, topic exams, training
records, and training were not properly presented. Under "Facilities"
the agency noted that the flushing system was not operational and that
the procedures for procurement of QPL, mercury-free and "MIC Level,
Material" were not submitted.
Thus, based on our review of the record, it appears that the agency
complied with 10 U.S.C. Sec. 2319. The agency provided all interested
firms, including Southwest, with detailed descriptions of the
requirements for qualification several months prior to the date
scheduled for issuance of the IFB. In addition, the agency promptly
informed Southwest in writing of the reasons why it had not qualified.
Further, the certification process involved a number of detailed
requirements, with the applicant having the responsibility to prepare
adequate documentation with respect to each of them. The record
indicates that there were numerous submissions, evaluations, and
resubmissions of required written procedures. While each party in this
case blames the other for the length of time consumed in Southwest's
attempt to obtain the certification, it appears to us that the time
involved here was not extraordinary given the volume of the submissions
and the nature of the work. That Southwest did not qualify for the
certification does not mean that the agency violated section 2319.
In any event, Southwest was found nonresponsible for several reasons,
the lack of a NAVSEA certification being only one of them. As we read
the contracting officer's determination of December 12, which was based
on the preaward survey report of December 5, the primary concern
underlying the remaining reasons cited in support of the determination
appears to be that there was a very high risk that Southwest would not
be able to complete work under the contract on time.
A procuring agency is vested with broad discretion in determining
whether a prospective contractor is responsible. American Bank Note
Co., B-222589, Sept. 18, 1986, 86-2 CPD P 316. For this reason, and
since it is the agency that must suffer the consequences of
unsatisfactory contract performance, we will not disturb an agency's
determination of nonresponsibility unless the protester can demonstrate
bad faith on the part of the agency or that the agency's determination
lacked a reasonable basis. Martin Electronics, Inc., B-221298, Mar. 13,
1986, 86-1 CPD P 252. The protester has not alleged bad faith in this
case. Although, as discussed below, Southwest has raised legitimate
points with respect to at least one of these reasons given for the
nonresponsibility determination, 5/ on balance we conclude that the
agency's concern that an award to Southwest would create an unacceptable
risk of performance delays was reasonably based.
With respect to the protester's plan to sell the firm's certified
facility, the protester insists that in addition to informing the
preaward survey team of this plan the protester also advised the team
that the firm would not divest itself of the existing certified facility
unless and until the new facility had been completed and certified. A
member of the agency's preaward survey team, on the other hand, reports
being informed by the protester only that if a sale should occur during
contract performance, Southwest would not retain possession of the
mercury-free facility and would have to relocate.
Even assuming the protester's version of the facts, we think the
agency reasonably could conclude that if the protester were required to
change facilities during contract performance, there was a substantial
risk of at least some delay. In this connection, the solicitation
required the work under the contract to be completed by May 18, 1987. 6/
Concerning the issue of whether Southwest had arranged for
subcontractor performance of some of the work items, the preaward survey
team reported that one proposed subcontractor, Wilson Snyder, Inc.,
stated that it had not been contacted by Southwest for a quote and that
it would not have sought additional work in any event because of ongoing
labor problems. Southwest, on the other hand, has provided us with a
copy of its written request to Wilson Snyder for a quotation for work on
the main feed pumps and turbines. Southwest acknowledges that Wilson
Snyder was reluctant to bid on this work, but says that it still had
hoped to use the firm as a subcontractor. One of Southwest's employees
says that he had solicited and received a backup quotation from another
firm, but another of Southwest's employees states that he informed the
preaward survey team only that Southwest "was obtaining" a back-up quote
from another subcontractor. There is no indication that Southwest ever
informed the agency that a back-up quotation had been received. Thus,
while the agency apparently was misinformed concerning Southwest's
contacts with Wilson Snyder, we think that based on the information
available to the agency, there was a reasonable basis for concluding
that Southwest's arrangements for work on the main feed pumps and
turbines were so indefinite that timely performance of key subcontractor
work could not be assured.
Another reason cited by the agency as a basis for doubting
Southwest's ability to perform the contract in a timely manner was that
the firm did not appear capable of providing a sufficient number of
personnel with the required security clearance. The agency noted that
of the 40 clearance applications it reviewed, in only 19 cases did it
appear that the applicant had obtained a previous clearance from the
Department of Defense. The agency states that obtaining clearances for
those not previously cleared would require a significantly longer period
of time than was available prior to the scheduled commencement of the
work. Moreover, all personnel would require government training before
being permitted access to the ship, and security clearances were
necessary before such training could commence.
The protester does not dispute the agency's findings with respect to
the number of its personnel with a previous security clearance, but
merely points out that the agency awarded the contract to Continental
despite Southwest's protest because of the need to allow the awardee 6
to 8 weeks to process its security clearance applications. The
protester does not contend, however, that it could have obtained all
required security clearances within the same period. In the absence of
any indication that the protester could have met the solicitation's
requirements concerning security clearances in a timely manner, we have
no basis to question the agency's judgment that Southwest's ability to
do so appeared doubtful.
Finally, as noted earlier in this decision, the contracting officer's
nonresponsibility determination listed a number of the written
procedures that Attachment J-3 (paragraph H2-20) required to be
submitted in connection with a preaward survey, but which either were
not submitted or were unacceptable as submitted. Specifically, the
contracting officer noted that Southwest had failed to submit procedures
for the work item entitled "Scheduling, Progressing, Material Status and
Associated Reports," and for the schedule control of individual work
items. The procedures submitted but found to be unacceptable concerned
control of government-furnished property, contractor-furnished material,
and subcontractor work.
The protester does not dispute the finding of the preaward survey
team that the firm's procedures were deficient. Instead, the protester
characterizes the deficiencies as merely "informational" and notes that
while Attachment J-3 provided that these written procedures were
required to be produced within 5 working days of notification from the
contracting officer, Southwest was given only 3 working days. In
addition, the protester points out that the contracting officer failed
to advise the firm that the preaward survey team had reported the
deficiencies. In our view, the protester had not provided us with a
sufficient basis on which to question the agency's judgment concerning
the deficiencies noted in the firm's written procedures.
We cannot conclude from this record that the agency's
nonresponsibility determination was unreasonable. Rather, it appears
the agency had several valid concerns regarding Southwest's ability to
perform the contract within the time required by the solicitation. The
protest is denied.
Harry R. Van Cleve
General Counsel
1/ A Master Agreement for Repair and Alteration of Vessels, commonly
known as a Master Ship Repair Contract, see Carolina Drydocks, Inc.,
B-218186.2, June 3, 1985, 85-1 CPD P 629, establishes the terms under
which a contractor will perform work on vessels pursuant to subsequently
issued job orders. See generally Fairburn Marine Aviation, B-187062,
Dec. 22, 1976, 76-2 CPD P 523.
2/ Some of the reasons cited by the agency for its nonresponsibility
determination involve matters which also appear to involve elements
necessary for the NAVSEA certification, i.e., certified mercury-free
environment and written security procedures.
3/ After reviewing the allegations contained in the second protest,
the agency requested that it be allowed to submit one report covering
both protests no later than January 28, 1987. We approved the request
after consulting with the protester's attorney. The agency filed its
consolidated report on February 2, which was 3 working days after the
agreed due date. On this basis, the protester requests that the report
not be considered. We deny the protester's request because the delay in
submission of the report was due, at least in part, to the closing of
government offices in Washington, D.C. for 2 days because of snow. In
any event, the protester was not prejudiced because of the delay since
it still was allowed 7 working days from its receipt of the consolidated
report within which to filed its comments. See TIW Systems, B-222585.8,
Feb. 10, 1987, 87-1 CPD P 140.
4/ The five areas cited were, "Training," "Project Manager Team,"
"Security Requirements," "Procedures," and "Facilities." As indicated in
footnote 2, some of these areas were cited with respect to the
contracting officer's nonresponsibility determination. They are
discussed more fully later in this decision.
5/ The contracting officer stated that Southwest's proposed work
schedule did not provide for accomplishment of some of the work items,
but from our review of the work schedule it appears that Southwest did
so provide.
6/ Subsequent to the filing of Southwest's protests the agency
awarded a contract to Continental notwithstanding the pendency of the
protests based upon its written determination that urgent and compelling
circumstances significantly affecting the interests of the United States
would not permit waiting for our decision. See 31 U.S.C. Sec. 3553
(c)(2)(A) (Supp. III 1985).
Matter of: J.M. Cashman, Inc.
File: B-225558
Date: April 15, 1987
Because the Federal Acquisition Regulation prohibits firms suspended
at the time of bid opening from contracting with the government, such
firms may not be considered for award even though they may no longer be
suspended at the time of award.
J.M. Cashman, Inc., protests any award by the Naval Facilities
Engineering Command of a contract to Great Lakes Dredge & Dock Company
under invitation for bids (IFB) No. N62470-84-B-4426 because Great Lakes
was suspended from government contracting at the time of bid opening.
The agency argues that since the suspension of the firm has subsequently
expired, it is now eligible for award.
We sustain the protest.
The IFB was issued on September 29, 1986. Bid opening was on October
30. Great Lakes was the low bidder, while Cashman was second low.
After informing Great Lakes by letter of November 12, 1986, that its bid
was rejected because of the suspension, the Navy subsequently decided
that the bid should be considered because Great Lakes'suspension had
been lifted as of November 28. No award has been made.
Cashman contends that no award may be made under the IFB to Great
Lakes, citing the Federal Acquisition Regulation (FAR), 48 C.F.R. Sec.
14.404-2(g) (1986), which provides: "Bids received from any person or
concern that is suspended, debarred, or ineligibie (see Subpart 9.4)
shall be rejected if the period of suspension... has not expired as of
the bid opening date."
We agree with the protester. We recently held in a decision
concerning a similar situation that FAR, 48 C.F.R. Sec. 14.404-2(g),
mandates the rejection of a bid received from a bidder suspended at the
time of bid opening, and that the regulation does not vest the
contracting agency with the discretion to do otherwise. 1/ Southern
Dredging Co., Inc., B-225402, Mar. 4, 1987, 87-1 CPD P .
Based on the regulation and our decision in Southern Dredging Co.
Inc., B-225402, supra, we conclude that the bid from Great Lakes should
not be considered, since the bidder was suspended from contracting with
the government as of the October 30 bid opening.
The pre-FAR decisions of this Office are no longer controlling on the
issue of when a suspension must be lifted in order for a suspended
bidder to become eligible for award. Prior to the FAR, the regulations
did not in all instances require the rejection of bids received from
bidders suspended at the time of bid opening. For this reason, and
since a firm's suspension related to the issue of responsibility, we
said that a suspended firm's eligibility for receiving an award should
be determined at the time of award and not at the time of bid opening.
See, e.g., Bauer Compressors, Inc., 63 Comp. Gen. 303 (1984), 84-1 CPD P
458. Now, however, the FAR clearly establishes the time of bid opening
as the point at which a suspended bidder's eligibility for award is
determined. Southern Dredging Co., Inc., B-225402, supra.
With respect to our decision, Skip Kirchdorfer, Inc., B-215784, Dec.
3, 1984, 84-2 CPD P 606, cited by the agency, that case is inconsistent
with our holding in Southern Dredging and was overruled in that case.
We sustain the protest. The agency should award the contract to the
protester if it finds the firm otherwise eligible for award.
Comptroller General
of the United States
1/ The Department of Defense Federal Acquisition Regulation
Supplement, 48 C.F.R. Sec. 209.405(a) (1) (1985), provides for rejection
of bids received from suspended bidders unless a written determination
is made that there is a compelling reason to make an exception. This
regulation purportedly implements FAR, 48 C.F.R. Sec. 9.405(a) (1986),
which provides that an agency should not award a contract to a suspended
bidder unless there is a compelling reason to do so. The agency has not
argued that there is a compelling reason in this case for considering
Great Lakes for award.
Matter of: Brussels Steel America, Inc.
File: B-225556; B-225588; B-225629
Date: April 16, 1987
1. The General Accounting Office generally will not disturb a
contracting officer's nonresponsibility determination absent a showing
of bad faith or a lack of any reasonable basis for the determination.
2. Where contracting officer's negative responsibility determination
is based on a formal preaward survey concerning an item similar to that
being procured and on an informal preaward survey--and reports on both
were issued less than 2 months before the nonresponsibility
determination-- information regarding performance capability is as
current as feasible, as required by the Federal Acquisition Regulation,
48 C.F.R. Sec. 9.105-1(b)(3).
This decision involves three protests against allegedly improper
determinations of nonresponsibility by the Defense Logistics Agency
(DLA) with respect to three procurements for supplying steel. In each,
Brussels Steel America, Inc. objects to the rejection of its low bid
and contends that the nonresponsibility determination was without any
reasonable basis.
We deny the protests.
The first protest concerns the rejection of Brussels' bid under
invitation for bids (IFB) No. DLA500-86-B-2338, issued July 18, 1986, by
the DLA's Defense Industrial Supply Center (DISC), Philadelphia,
Pennsylvania, for a supply of high tensile steel plate. The agency
opened bids on August 18 and, on November 7, decided to reject Brussels'
low bid because of the firm's "severe delinquency problems." On November
26, the agency awarded a contract to C&C Supply Co., Inc.
The second protest concerns IFB No. DLA500-86-B-2349, issued July 21
by DISC for carbon steel plate. The agency opened bids on August 20
and, on November 20, rejected Brussels, low bid on contract line item
0001. On December 1, the agency awarded a contract for this item to
Huntington Forge, Inc.
The third protest involves IFB No. DLA500-86-B-2449, issued September
26 by DISC and also for carbon steel plate. The agency opened bids
October 27. Although Brussels submitted the low bid on contract line
items 0001 through 0004 and 0006, DISC again rejected the bid after the
contracting officer, on November 13, determined the firm nonresponsible.
On December 1, the agency made award to Pines Steel Supply Corporation,
the low bidder on item 0005 and, according to the agency, the low,
responsive, responsihle bidder on the other items.
In each of these procurements, the contracting officer 1/ relied on a
formal preaward survey, made in connection with a procurement for
similar steel products, dated September 23; the report of this survey
reflected a delinquency rate on open contracts and purchase orders of
48.3 percent. In two of the procurements, the contracting officers also
cited an informal preaward survey dated October 10 that reflected a
delinquency rate of 35.6 percent on open contract line items. The
contracting officers also considered an internal, computerized
contractor performance analysis which, as of October 28, 1986, indicated
a delinquency rate on open contracts of 40 percent.
Brussels essentially argues that it was found to be nonresponsible
because of a history of performance deficiencies that allegedly had been
cured to within the 15 percent delinquency rate that DISC considers
acceptable. 2/ Therefore, the protester contends that the agency made
its nonresponsibility determinations without considering current
information, as required by the Federal Acquisition Regulation (FAR), 48
C.F.R. Sec. 9.105-1(b)(3) (1986). Specifically, Brussels contends that
as of October 1, it had completed more than 560 contract line items and
reduced its delinquency rate to 14 percent. Brussels points out that
the section of the preaward survey containing the delinquency
information is dated September 9, 1986, nearly 2 months before the
initial determination of nonresponsibility.
Brussels further argues that flaws in the program logic used to
determine delinquencies have in the past resulted in line items being
listed as overdue which were actually delivered within contract
requirements. Brussels states that in September 1986, a DISC notice
stating that the firm was being placed on a "Contractor Review List"
recognized that it had reduced its delinquency rate to 23.4 percent.
Moreover, the protester states, in early December, it was orally advised
by a DISC representative that it had been successful in reducing its
delinquency rate to well below the 15 percent threshold.
Brussels cites True Machine Co., B-215885, Jan. 4, 1985, 85-1 CPD P
18, for the proposition that agencies may establish internal policies or
procedures, the meeting of which is tantamount to an affirmative
determination of responsibility. Brussels contends that since it met or
exceeded the standard established by DISC, it should not have been
determined nonresponsible.
The determination of a prospective contractor's responsibility rests
within the broad discretion of the contracting officer, who in making
that decision must of necessity rely primarily on his or her business
judgment. Venusa, Ltd., B-217431 et al., Apr. 22, 1985, 85-1 CPD P 458.
While the determination should be based on fact and reached in good
faith, it ultimately should be left to the discretion of the contracting
agency, which must bear the brunt of any difficulties during
performance. Urban Masonry Corp., B-213196, Jan. 3, 1984, 84-1 CPD P 48
at 4, 5. The contracting officer also has broad discretion as to
whether a preaward survey should be conducted and, if conducted, the
degree of reliance to be placed on the results. Newport Offshore, Ltd.,
B-219031 et al., June 13, 1985, 85-1 CPD P 683. Because of this broad
discretion, our Office generally will not question a negative
determination of responsibility unless the protester can demonstrate
that the agency acted in bad faith or lacked a reasonable basis for the
determination. Pauline James & Associates, B-220152 et al., Nov. 20,
1985, 85-2 CPD P 573.
Since Brussels has not alleged bad faith, the only question for our
review is whether the determinations that Brussels was nonresponsible
were reasonable, based on the information available at the time the
determinations were made. See Firm Reis GmbH, B-224544, et al., Jan.
20, 1987, 87-1 CPD P ; Decker and Co. et al., B-220807 et al., Jan. 28,
1986, 86-1 CPD P 100 at 5. In this regard, the FAR provides that a
prospective contractor that recently has been seriously deficient in
contract performance must be presumed to be nonresponsible unless the
contracting officer determines that the circumstances were beyond the
contractor's control or that the contractor has taken appropriate
corrective action. See 48 C.F.R. Sec. 9.104-3(c). No such
determinations were made here.
The preaward survey of September 23, 1986, showed that 185 of the 383
existing Brussels' contracts and purchase orders were in late delivery
or "delinquent" status. This was a delinquency rate of 48.3 percent.
The principal causes of delay were identified as follows: 20 percent
were considered the government's responsibility (10 percent due to
unavailability of United States flag vessels and 10 percent to late
acceptance of supplies at destination), 80 percent were considered the
contractor's responsibility (30 percent due to delays incident to
accumulating truckload quantities for economical shipment, 10 percent to
a deficient subcontractor monitoring system, 10 percent to problems in
making of steel, and 30 percent to poor planning to meet delivery
schedules). With respect to 267 completed contracts, the survey showed
that 171 had been completed late, for a delinquency rate of 64 percent.
Only 15 percent of the delays were considered the government's
responsibility.
Even if, as Brussels urges, we eliminate those delinquencies for
which the government was responsible and those due to delays for
accumulation of truckload quantities, a practice that Brussels states it
no longer follows, Brussels still must be considered responsible for the
majority of the delays. DLA has submitted documentation which supports
its position that Brussels was suhstantially delinquent. On the other
hand, although Brussels states that it had reduced its delinquency rate
to 14 percent, it has provided no evidence, for example, specific
completed contract or contract line item numbers and dates of
completion, to support this position.
Where a contractor disputes an agency's determination of
nonresponsibility, we will not disturb that determination if it is based
on what the agency reasonably perceives as the contractor's prior
inadequate performance. Howard Electric Co., 58 Comp. Gen. 303 (1979),
79-1 CPD P 137. We find that the determination that Brussels was not a
responsible contractor with regard to all three procurements, based on
its poor performance record, to be reasonable.
We do not believe that the FAR requirement that responsibility
determinations be made on "as current a basis as is feasible," 48 C.F.R.
Sec. 9.105-1(b) (3), requires updating when, as here, the determinations
are made within 1 to 2 months after issuance of the preaward survey
reports on which they are based. In this case, the informal preaward
survey, updating the formal one for essentially the same item, was made
on October 10, and the nonresponsibility determinations were made
between November 7 and November 20.
Finally, the parties have submitted additional information,
purporting to show that after the determinations, the protester's
performance either improved further or continued to be delinquent. We
do not consider this information relevant. The contracting officers
were entitled to make their determinations on the basis of the facts at
hand immediately before the award dates, and they are not affected by
any changes that may have occurred after those dates. See Camel
Manufacturing Co.--Request for Reconsideration, B-218473.4, Sept. 24,
1985, 85-2 CPD P 327.
In view of these findings, we need not reach the question of the
agency's allegedly improper consideration of the protester's failure to
comply with requirements for shipping on United States flag vessels,
since the delinquencies alone provide a proper basis for the
nonresponsibility determinations. In addition, under IFB No. -2349,
Brussels protested an award to Lukens Steel Company for contract line
item 0002; however, since Brussels was not the low bidder for this
item, and the agency found Lukens both responsive and responsible, we
need not consider this basis of protest.
The protests are denied.
Harry R. Van Cleve
General Counsel
1/ The same contracting officer made the nonresponsibility
determination for IFB Nos. -2338 and -2349; a different contracting
officer made the determination for the third IFB, No. -2449.
2/ In connection with a General Accounting Office (GAO) report on
DISC's procedures for making nonresponsibility determinations, DLA
officials stated that a 10-percent delinquency was acceptable, 20
percent was unacceptable, and 11-19 percent dictated further analysis.
GAO, Analyses of DLA's Dealings with the Pines Corporation during 1985.
NSIAD-86-198, B-222991, Sept. 1985. Brussels cites this report in its
protest.
Matter of: G.M. Coen & Associates, Inc.
File: B-225554
Date: February 12, 1987
Where address in solicitation for receipt of offers was correct for
mailing purposes and included a zip code for a post office box, a late
bid was properly rejected where the protester failed to inquire as to
the proper place for hand-delivery of bids and where Federal Express
attempted to deliver the bid to the zip code area of the post office box
rather than the geographical location of the contracting activity.
G.M. Coen & Associates, Inc. (Coen) protests the determination by the
Forest Service, Department of Agriculture, that Coen's bid, submitted in
response to invitation for bids (IFB) No. R2-87-03 for construction
work, could not be considered because it was late.
The protest is denied.
The IFB provided that offers would be received until 2:00 p.m. on
December 8, 1986. The IFB contained Standard Form (SF) 1442 (4-85),
"Solicitation, Offer, and Award (Construction, Alteration, or Repair),"
which required that bidders "address their offer s " to the following
address:
"Contracting Officer U.S. Department of Agriculture Forest
Service 11177 W. 8th Ave., P.O. Box 25127 Lakewood, Colorado
80225"
SF 1442, unlike SF 33 (which is used for soliciting supplies or
services), does not contain a separate address block for hand-carried
bids. Thus, the above address, with the post office box, was the only
address designated by the IFB for receipt of offers.
Coen's bid was admittedly delivered 2-1/2 hours after bid opening by
Federal Express, a commercial carrier. The record indicates that
delivery of Coen's bid by Federal Express was delayed because the
address shown in the IFB was a mailing address only and reflected a zip
code for the Forest Service's post office box rather than its
geographical location. Coen argues that since it addressed its bid
properly to the address shown in the solicitation, its bid should be
considered because the "incorrect zip code was the reason for delayed
delivery."
An offer delivered to an agency by Federal Express or other
commercial carrier is considered to be hand-carried and, if it arrives
late, it can only be considered if it is shown that the paramount cause
for the late receipt is some government impropriety. Rodale Electronics
Corp., B-221727, Apr. 7, 1986, 86-1 CPD P 342. An offer is late if it
does not arrive at the office designated in the soiicitation by the time
specified. Id. Here the record does not show that government
impropriety was the paramount cause of the late delivery of Coen's bid.
Coen's contention is that the paramount cause of the late arrival of
Coen's bid was that the zip code in the Forest Service's solicitation
failed to reflect the geographical location of the contracting activity
to permit hand-delivery by Federal Express. The record indicates that
Coen prepared the shipping documents for Federal Express and that Coen
used the correct address reflected in the solicitation. Apparentiy,
because of the post office box zip code, Federal Express was delayed in
delivering the bid to the actual geographical location of the
contracting activity.
We note that the zip code given in the solicitation was correct for
mailing purposes. Further, the presence of a post office box number in
the address given in the solicitation should have reasonably alerted
offerors that the address given was a mailing address only. We think a
reasonable bidder should have called the contracting officer to
ascertain the place for hand-delivery before shipping the bid. In a
strikingly similar case, where the zip code was adequate for mailing
purposes but no zip code was included for the address given for
hand-delivery, we held that the paramount cause of the late arrival of
the bid was not a government impropriety, since a zip code is not
ordinarily required for hand-carried bids. See Rodale Electronics,
Corp., supra. Under these circumstances, since the record indicates
that late delivery was largely caused by the protester not ascertaining
the correct address for hand-delivery, and not by the government, we
conclude that the agency properly rejected Coen's bid as late.
Finally, Coen requests a change in policy to permit consideration of
late bids shipped by Federal Express 1 day prior to bid opening in the
same way that late bids sent by certified mail 5 days before bid opening
are currently considered. Coen states that use of Federal Express is a
reliable means of delivery and is becoming standard in the industry.
Since our Office is not responsible for promulgating substantive
revisions to the procurement regulations, we can only refer the
protester to the authorities responsible for promulgating the Federal
Acquisition Regulation (FAR). See FAR, 48 C.F.R. Part 1 (1986).
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: ESCO Air Filters
File: B-225552.2
Date: March 12, 1987
1. In the absence of a showing of had faith or fraud, or that vital
information was not considered, General Accounting Office will not
question a determination by the Small Business Administration not to
issue a ccrtificate of competency following a finding by the contracting
agency that a small business was nonresponsible.
2. To establish bad faith, the protester must prove that government
officials had a specific and malicious intent to injure the firm.
Burden of showing the Small Business Administration (SBA) acted in bad
faith to deny the protester an opportunity to file for a certificate of
competency is not met where the record shows that the SBA, with the
cooperation of the contracting agency, granted several extensions to the
filing deadline to assure the protester ample time to file its
application.
3. The granting of an extension for filing a certificate of
competency application is a matter solely within the contracting
agency's discretion, with the government's interest in proceeding with
the acquisition, not the bidder's interests in obtaining an extension,
the controlling consideration.
ESCO Air Filters protests the refusal of the Small Business
Administration (SBA) to allow sufficient time for ESCO to file an
application for a certificate of competency (COC) in connection with
invitation for bids No. N00104-85-B-0923, issued by the Department of
the Navy for a quantity of air filters. ESCO, the low bidder and a
small business, alleges that the SBA acted in bad faith and failed to
follow its own regulations in not granting ESCO's last request for an
extension to file despite being granted permission by the Navy for such
an extension. We deny the protest.
The Navy initially determined ESCO to be nonresponsible on December
20, 1985, based on an unsatisfactory financial capability rating. The
Navy then referred the matter to the SBA for a COC determination. On
February 10, 1986, the Navy conducted a second pre-award survey
concerning ESCO's technical and production capability and gave ESCO an
unsatisfactory rating for quality assurance. With this finding, the
Navy requested the SBA to initiate action to complete the COC, which had
been placed on hold pending the results of the second pre-award survey.
A deadline of June 12 was established for ESCO to file its application
for a COC, but ESCO was granted an extension to June 24. On June 26,
the SBA notified the Navy that it had closed its file on the case
because ESCO had failed to file an application.
ESCO subsequently complained to the Navy that it had not been given
fair opportunity to establish that it was a responsible contractor.
While denying that ESCO had been unfairly treated, the Navy nevertheless
conducted a third pre-award survey on ESCO on the basis that the
company's responsibility position might have improved. On September 16,
ESCO again was given a negative rating for financial capability and
quality assurance. By letter dated October 8, the Navy again requested
the SBA to initiate COC procedures.
After receiving the Navy's letter, the SBA opened a new COC file on
ESCO and established a deadline of October 24 for ESCO's filing of a COC
application. However, because it had not yet received all the necessary
procurement documents from the Navy, the SBA temporarily suspended the
case and granted ESCO an extension of time to file pending receipt of
the documents. After these documents were received, the SBA neglected
to notify ESCO of a new filing deadline, and ESCO instead was informed
by letter dated November 6 that the SBA was closing the case for failure
to file a timely COC application.
After a complaint from ESCO that ESCO had not been notified of a new
closing date for its COC application, the SBA reopened the case and
asked the Navy for additional time to render a COC decision. The Navy
extended the deadline for an SBA decision until December 3. The SBA
then attempted to contact ESCO on three separate occasions about the new
deadline for a COC determination but was unsuccessful. Finally, on
November 19, ESCO contacted the SBA and was informed that the firm had
until November 26 to file an application for a COC so that the SBA could
meet its December 3 deadline for a COC determination. After ESCO argued
that it needed more time, the SBA agreed to a November 28 filing
deadline.
On November 28, ESCO informed the SBA that it had not completed its
application and that it needed still more time. The SBA told ESCO that
it could not give any more time beyond December 1 since even that would
leave only 2 days for the SBA to render a decision on the COC. ESCO
failed to file a COC application by December 1. The SBA called the Navy
and was advised that no further extensions would be given. On December
2, ESCO told the SBA that it had persuaded the Navy to agree to a time
extension, but when the SBA called the Navy, the SBA again was advised
that no further extensions of time would be given. Therefore, the SBA
closed the case for lack of a COC application from ESCO.
ESCO filed a protest with our Office on December 10, alleging that
the Navy improperly had refused to discuss or meet with ESCO about the
findings made in the Navy's pre-award surveys, and that the Navy
improperly had refused to consider ESCO's willingness to post a
performance bond equal to the amount of its bid in answer to any
questions the agency might have as to ESCO's financial capability. In
addition, ESCO alleged that it was not given the opportunity to appeal
the pre-award survey findings to the SBA. When an agency makes a
determination that a small business firm is nonresponsible, it is
required by law to refer that determination to the SBA for consideration
under the SBA's COC procedures. Consequently, when the Navy notified us
immediately after filing that it had referred ESCO's nonresponsibility
determination to the SBA, we dismissed the protest. See Bid Protest
Regulations, 4 C.F.R. Sec. 21.4(f)(3) (1986).
On December 18, ESCO requested that we reconsider our dismissal
because we had erroneously assumed that the firm was contending that the
Navy had not given it an adequate opportuntiy to pursue a COC. ESCO
emphasized that it instead was contending that the SBA had acted in bad
faith to prevent ESCO from having a fair opportunity to apply for a COC.
We will review COC determinations when a protester's submission
indicates that SBA action on a referral for a COC may have been taken
fraudulently or in bad faith or that the SBA disregarded information
vital to a responsibility determination. The Pepperdine Corp.,
B-225490, Dec. 24, 1986, 86-2 C.P.D. P 717. In view of ESCO's request,
and since the facts set out above were not known to us at that time, we
reopened ESCO's protest on the issue of whether the SBA had acted in bad
faith to prevent ESCO from filing an application for a COC, and we
requested reports on the matter from the SBA and the Navy.
There is nothing in the protest reports that indicates the SBA acted
in bad faith. To establish bad faith, a protester must prove that
government officials had a specific and malicious intent to injure the
firm. A.R.E. Manufacturing Co., Inc., B-217515, et al., Feb. 7, 1985,
85-1 C.P.D. P 162. Here, the events that transpired after ESCO's
initial negative pre-award survey show just the opposite of bad
faith--that the SBA, with the cooperation of the Navy, made
extraordinary efforts to assure ESCO ample time to file for a COC.
With regard to the SBA's refusal to grant-another filing extension
beyond December 1, 1986, we consistently have taken the position that it
is the responsibility of the small business firm determined to be
nonresponsible to file a timely, complete and acceptable COC application
with the SBA. SALJ of America, Inc., B-217258, Apr. 9, 1985, 85-1
C.P.D. P 408; Darian Industries, Inc., B-221828 et al., Apr. 24, 1986,
86-1 C.P.D. P 401. Further, the granting of an extension for filing and
processing a COC application is a matter solely within the contracting
agency's discretion, and the bidder's interests are not controlling.
Lasanta Sportswear, Inc., B-218893, et al., June 3, 1985, 85-1 C.P.D. P
634. This is because the government has an overriding interest in
proceeding with the acquisition. Id. Our Office therefore does not
review the refusal to grant a filing extension for a COC. See SALJ of
America, Inc., B-217258 et al., supra.
As to ESCO's charge that the SBA failed to follow its own
regulations, this is essentially based on allegations that on more than
one occasion after extending the COC filing deadline the SBA failed to
notify ESCO of the new deadline. We do not see how this hindered ESCO
from completing its COC application, however, especically with regard to
the last extension obtained by the SBA to November 28. The record shows
that the SBA informed ESCO on November 19 that ESCO had until November
28 to submit a COC application. We see no reason why ESCO could not
have submitted an application by November 28 had the company begun
working on it on November 19. In any event, we believe that given that
the Navy first referred its nonresponsibility determination on ESCO to
the SBA in early 1986, ESCO, in effect, had nearly a year to file for a
COC. We see no reason to object to the SBA's decision to refuse to
grant ESCO further time because the company was still unable to complete
a COC application.
ESCO's protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Interstate Brands Corporation
File: B-225550
Date: March 3, 1987
1. Protest that solicitation improperly wae restricted to
Indian-owned firms pursuant to the Buy Indian Act is dismissed as
untimely where protester knew of restriction prior to bid opening but
failed to protest before that time.
2. Bureau of Indian Affairs' determination that a firm meets
eligibility criteria for responding to Buy Indian Act procurement will
be questioned by General Accounting Office only where arbitrary or
unreasonable. Bureau's decision that Indian-owned firm is eligible for
award where it agrees to perform at least 51 percent of the deliveries
of bakery products with its own labor force is not unreasonable.
3. Fact that Indian-owned firm's bid on procurement set aside
pursuant to Buy Indian Act, which agency has concluded is reasonable in
price, is 9.5 percent higher than non-Indian firm's prior year contract
price does not in itself require that the bid be rejected as
unreasonably high, since it is inherent in set asides that awards often
will be made at higher prices then could be obtained in unrestricted
competition.
Interstate Brands Corporation (Interstate) protests a contract award
to B & L Procurement under Department of the Interior, Bureau of Indian
Affairs (BIA), invitation for bids (IFB) No. A00-0523. Interstate also
requests reimbursement for the costs it incurred in submitting this
protest.
We deny the protest in part and dismiss it in pert. We deny the
claim.
The solicitation, to obtain bakery products for an Indian school, was
issued as a total set-aside for certified Indian/Alaska Native Economic
Enterprises pursuant to the Buy Indian Act, 25 U.S.C. Sec. 47 (1982).
Notice of the procurement was published in the Commerce Business Daily
(CBD) on August 7, 1986. On August 18 the solicitation was issued to
any requesting firms, and also was mailed to approximately 15 certified
Indian firms that BIA believed could meet its needs. B & L was the only
company that submitted a bid. The contracting officer reviewed the bid
and requested B & L to submit additional information to determine if B &
L was eligible for the set-aside award. Subsequently, B & L submitted
the requested information, and the contracting officer determined that B
& L met the eligibility requirements and awarded the company the
contract.
Interstate first protests that BIA awarded a sole-source contract to
B & L in violation of the requirement in the Competition in Contracting
Act of 1984, 41 U.S.C. Sec. 253(a) (1) (A) (Supp. III 1985), for full
and open competition in procurements issued by federal executive
agencies.
We disagree with Interstate's characterization of the award as
sole-source. This is not a case where an agency determined that only
one source could meet its minimum needs, and issued a solicitation only
to that firm; rather, BIA published notice of the procurement in the
CBD, and specifically solicited offers from 15 certified, eligible
firms. The fact that only one company responds to a solicitation does
not, in itself, change a competitive procurement into a sole-source
procurement. Treadway Inn.--Request for Reconsideration, B-221559.2,
July 31, 1986, 65 Comp. Gen. , 86-2 C.P.D. P 130.
Further, we will not consider Interstate's protest to the extent
Interstate is arguing that BIA improperly restricted the competition to
Indian-owned firms. Under our Bid Protest Regulations, a protest based
on an impropriety apparent from the face of the solicitation must be
filed before the time set for bid opening. 4 C.F.R. Sec. 21.2(a)(1)
(1986). Here, the solicitation clearly stated that the procurement was
a total Buy Indian Act set-aside. Because notice of the procurement was
published in the CBD on August 7, Interstate is charged with
constructive notice of the solicitation and its contents. Julie
Research Laboratories, Inc., B-219838, et al., Sept. 4, 1985, 85-2
C.P.D. P 267. Since Interstate did not file a protest with BIA
concerning the set-aside restriction until November 4 (and with our
Office until December 10), after the September 18 bid opening date, the
protest is untimely in that regard and we will not consider it on the
merits. See NJCT Corp., B-219455, July 22, 1985, 85-2 C.P.D. P 70.
Interstate next protests that B & L will be supplying bakery products
manufactured by a non-Indian firm; will be leasing trucks from the
non-Indian firm; and will be permitting the non-Indian firm to deliver
the bakery products with its own employees. Interstate asserts that B &
L only will be responsible for billing, inventory, accounting and
scheduling deliveries, and concludes that B & L therefore should not be
considered eligible to receive a Buy Indian Act set-aside award.
The Buy Indian Act provides that:
"So far as may be practicable Indian labor shall be employed,
and purchases of the products of Indian industry may be made in
open market in the discretion of the Secretary of the Interior."
The Secretary of the Interior, acting through the BIA Commissioner,
has broad discretionary authority to implement this statute, and we have
held that defining the criteria a firm must meet to qualify as an Indian
industry and the quantum of evidence required to establish compliance
with the established criteria falls within that broad discretion. See
50 Comp. Gen. 94, 96 (1970); Department of the Interior-- request for
advance decision, B-188888, Dec. 12, 1977, 77-2 C.P.D. P 454. We will
disturb such decisions only where they are arbitrary, unreasonable or in
violation of law or regulation.
Pursuant to BIA policy, products of Indian/Alaska Native Industry
economic enterprises include any products, goods, supplies or services
that can be provided by a certified economic enterprise that produces
them through its own labor or effort or is a regular dealer in such
goods or services. BIA reports that B & L is a certified economic
enterprise and a regular dealer in subsistence items. BIA adds that
under the present solicitation delivery is a significant portion of
contract performance and that B & L has agreed to perform at least 51
percent of the deliveries with its own labor force. Given these
factors, we do not find that BIA's decision that B & L is an eligible
Indian-owned firm is unreasonable. In this regard, there is no
requirement in the solicitation or BIA's policy that the Indian-owned
firm deliver products that it manufacturers or own the truck that it
uses to deliver the products.
To the extent Interstate argues that B & L will not comply with the
requirement to perform more than 51 percent of the deliveries with its
own labor force, the protest involves a matter of contract
administration, which our Office does not review. See Little Susitna
Co., B-222816, June 17, 1986, 65 Comp. Gen. , 86-1 C.P.D. P 560.
Finally, Interstate alleges that the contract award to B & L was
improper because B & L's price, which is 9.5 percent higher than the
cost of Interstate's fiscal year 1986 contract, is unreasonable.
A determination of price reasonableness is within the discretion of
the procuring agency and will not be disturbed unless it is unreasonable
or there is a showing of fraud or bad faith on the part of contracting
officials. Advanced Construction, Inc., B-218554, May 22, 1985, 85-1
C.P.D. P 587. Here, BIA reports that the contracting officer did
compare B & L's offered price with the price of Interstate's prior
contract and determined that B & L's price was reasonable. We see no
reason to object to the contracting officer's decision. In this regard,
it is inherent in most procurements that are limited to a particular
class, including Buy Indian Act set-asides, that awards often will be at
higher prices than could be obtained in unrestricted competitions.
Northland Anthropological Research, Inc., B-201851, June 8, 1981, 81-1
C.P.D. P 457. Consequently, the fact the bid of the eligible firm in a
set-aside solicitation might be higher than a bid by a non-Indian firm
does not in itselsf require the rejection of the bid as unreasonably
high. See Advanced Construction, Inc., B-218554, supra; Browning
Ferris Industries, B-209234, Mar. 29, 1983, 83-1 C.P.D. P 323.
The protest is denied in part and dismissed in part. Interstate
therefore is not entitled to recover its protest costs. TSCO, Inc., 65
Comp. Gen. 347 (1986), 86-1 C.P.D. P 198.
Harry R. Van Cleve
General Counsel
Matter of: Nupla Corporation
File: B-225545
Date: March 6, 1987
General Services Administration (GSA) can restrict requirements
contract for soft-face hammers to one piece compo-cast type hammers,
where the majority of the user agencies who responded to GSA's user
survey have established that this restriction is necessary, even though
other users may be satisfied with other hammers not meeting this
specification.
Nupla Corporation (Nupla) protests invitation for bids (IFB) No.
FCEN-SY-A7022-S-12-18-86, issued hy the Federal Supply Service, General
Services Administration (GSA) for a requirements contract for five types
of soft-face hand hammers. We deny the protest.
The IFB requests bids on a "brand name or equal" basis and designates
Stanley Tool Division or Snap-On Tool Company hammers as the brand name
products. The IFB lists the applicable part numbers and salient
characteristics.
Nupla contends that all five hammers are proprietary to Stanley, even
the Snap-On Tool hammers which Stanley manufactures for Snap-On, and
that no source can supply these hammers without violating Stanley's
patent rights. In this regard, Nupla asserts that all bids received on
the IFB were from Stanley suppliers. Nupla further contends that its
prices are less than the Stanley suppliers' bid prices. GSA has not
rebutted these contentions.
Nupla contends that this is an unreasonable restriction on
competition, inasmuch as Nupla's soft-face hammers are as good as, if
not better, than Stanley's hammers. The Stanley soft- face (also called
dead blow) hammers are compo-cast, that is constructed with urethane in
one piece (both handle and head) with a reinforced steel rod in the
handle. Nupla's soft- face hammers are plastic dead blow hammers with
fiberglass handles.
Where, as here, a protester challenges specifications as being unduly
restrictive of competition and submits some support for the contention,
the procuring agency must establish prima facie support for its position
that the restrictions it imposes are reasonably related to its needs.
Libby Corp., et al., B-220392, et al., Mar. 7, 1986, 86-1 C.P.D. P 227;
Military Services Inc. of Georgia, B-221384, Apr. 30, 1986, 86-2 C.P.D.
P 423. This requirement reflects the agency obligation to write
specifications that permit full and open competition consistent with the
agency's actual needs. 41 U.S.C. Sec. 253 (Supp. III 1985). However,
contracting officials are most familiar with the conditions under which
products have been used in the past and are in the best position to know
the government's actual needs. Therefore, if the agency provides the
necessary support for the specifications, the burden shifts back to the
protester to show that the specifications are unreasonable. Libby
Corp., et al., B-220392, supra.
In response to a previous Nupla protest of this restriction, GSA
canceled the solicitation and conducted a survey of its user agencies to
ascertain whether the Nupla soft-face hammers could also satisfy user
requirements. A number of the user agencies found that the Nupla
soft-face hammers were acceptable. However, several users found that
soft- face hammers with fiberglass handles were not acceptable. For
example, Travis Air Force Base indicated that it preferred the
compo-cast hammer because it does not mar anything and the handle will
not split while fiberglass handles will split.
GSA's single largest user, the Naval Construction Battalion, port
Hueneme, California (Seabees), states that for safety reasons it will
not accept fiberglass handled hammers. The Seabees found that the grip
separates from fiberglass handles, heads will become loose from the
handles and handles shatter immediately behind the head such that
slivers from the handles are dangerous to the user. Thus, in 1979-1980,
the Seabees removed fiberglass handle hammers from its job sites. In
response to GSA's query about the acceptability of Nupla's hammers, the
Seabees conducted a shop test on Nupla's hammer and determined that
while the Nupla hammer is functionally satisfactory, the fiberglass
handle did fracture behind the head in an "overstrike test." An
"overstrike test" is performed by a man impacting the hammer handle
immediately to the rear of the hammer head against a horizontal surface
for a designated number of blows.
Additionally, GSA's technical staff found that the compo-cast hammer
is required because (1) the compo-cast hammer will not splinter or break
while fiberglass handles can break; (2) bent compo-cast hammers can be
reshaped and reused; and (3) the urethane head on compo-cast hammers
will outlast other materials such as the nylon derivative on Nupla
hammer heads.
Nupla disputes GSA's technical conclusions and has submitted
photographs purportedly of Stanley compo-cast hammers that have split or
separated from the head or where the urethane striking face has
separated from the tool. However, Nupla makes no representations as to
how the purported Stanley tools were used to so damage them.
Nupla challenges the undescribed Seabee "overstrike test" and
maintains that its hammer handles have never failed any required tests.
In this regard, the record indicates that the United States Army
Ordnance Center, Aberdeen Proving Grounds, Maryland, also performed an
"overstrike test" which found that the Nupla hammer was functionally
equivalent to the Stanley hammer and showed no evidence of splintering
or other fracturing of the hammer handle. However, Nupla has not
produced any evidence beyond its bare allegations that Nupla's hammer
did not fail the Seabees' "overstrike test" or that the test lacked
validity.
Under the circumstances, we find the record supports GSA's conclusion
that, on balance, its users need compo-cast softface hammers. Of the
using activities who responded to GSA's survey, the users of the greater
number of soft-face hammers said that they required compo-cast hammers.
We have recognized that GSA can base specification restrictions for its
Federal Supply Schedule contracts on the needs of the majority of its
users, even though other users may be satisfied with products not
meetinq those specif ications. See Abel Converting, Inc., B-224223,
Feb. 6, 1987, 87-1 C.P.D. P ; Swintec Corp.: Canon U.S.A., Inc.,
B-216106, B-216106.2, Jan. 17, 1985, 85-1 C.P.D. P 48. Thus, in light
of the user response to GSA here, we believe GSA's specification
approach is not subject to legal objection.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Prosperity Dredging Co., Inc.
File: B-225543
Date: March 30, 1987
Where invitation for bids set forth minimum acceptable engine size
for dredge with a particular size pump discharge pipe, required detailed
description of dredge and related equipment, and contained an itemized
sheet listing the information that had to be supplied with bids, failure
of bid to supply required, material information rendered bid
nonresponsive.
Prosperity Dredging Co., Inc., protests award of a dredging contract
to Folk Construction Co., Inc., by the United States Army Corps of
Engineers pursuant to invitation for bids (IFB) No. DACW01-86-B-0149.
Prosperity contends that the bid submitted by Folk was nonresponsive to
the IFB requirements and, therefore, award to Folk was improper.
Alternatively, Prosperity contends that the Corps incorrectly evaluated
Prosperity's bid prices which resulted in Prosperity's bid being
considered only the second-lowest priced bid, instead of the lowest
priced bid. In either event, Prosperity believes that it is entitled to
the award.
We sustain the protest.
The invitation was issued on August 19, 1986, and solicited bids for
rental of an hydraulic cutterhead pipeline dredge and attendant plant,
with operators, for dredging on various bendways on the
Tennessee-Tombigbee Waterway in Alabama and Mississippi. The IFB
indicated that for the purpose of bid evaluation bids were to be based
upon an estimated quantity of 850,000 cubic yards of material to be
removed. The IFB also required that the offered dredges have a pump
discharge pipe with an inside diameter of not less than 20 inches nor
more than 24 inches. The bidders were directed to determine the
approximate number of hours required to do the different types of work
specified and to compute their bid prices based upon the size of the
pump discharge pipe of their offered dredge and the connected brake
horsepower of that particular machine. The statement of work set forth
a table which bidders were to use for this purpose and which would be
used to evaluate bids. This table listed a number of engines of varying
horsepower ratings for each of three different size discharge pipes
(20-inch, 22-inch, and 24-inch) and indicated the estimated output per
hour of dredged material for each combination of engine size and
discharge pipe diameter. For example, the table showed that a dredge
with a 2600 horsepower motor and a 20-inch diameter discharge pipe could
be expected to dredge material at a rate of approximately 1065 cubic
yards per hour. Bidders were to calculate the approximate number of
hours necessary to perform all required work based upon the size of the
engine (horsepower rating) and the size of the discharge pipe (inside
diameter) using this table. Then, multiplying the bidder's hourly rate
times the estimated number of hours of dredging necessary, extended
prices were to be furnished for each line item. Award was to be made to
that bidder which offered the lowest overall total
price.
The IFB stated that "Bids based on dredges with smaller than a
20-inch inside diameter or larger than 24-inches pump discharge will be
considered nonresponsive." The IFB also stated that:
"Those bids which are based on dredges which have horsepower
greater than the maximum shown for each size dredge, will be
evaluated on the basis of the maximum output listed in the table
for that size dredge. Those dredges which have less horsepower
than the minimum shown for each size dredge will be considered
non-responsive."
The following bids were received by the September 30 bid opening
date:
Prosperity $ 780,392
Folk $1,036,782
T.L. James & Co. $1,063,960
Pine Bluff Sand & Gravel Co. $1,208,672
Prosperity stated in its bid that it was offering a dredge, the
"Hendry No. 4," which had a 24-inch diameter discharge pipe and a
4000-horsepower engine. However, Prosperity's bid also indicated that
the shore and combination pipe which would carry the dredged material
from the dredge to the shore was only 20-inches in diameter. The
contracting activity referred Prosperity's bid to the Project Operations
Branch for a determination whether the dredging equipment offered met
the IFB's material specifications. The Acting Chief, Project Operations
Branch, responded that, after inspection of the "Hendry No. 4" and
attendant plant, he had determined that, since Prosperity proposed to
connect 20-inch shore pipe and 20-inch combination pipe to the 24-inch
discharge pipe, the bid was not acceptable because it did not meet the
24-inch discharge pipe requirement. Accordingly, by letter of November
28, 1986, the contracting officer notified Prosperity that its bid was
rejected as nonresponsive.
On the other hand, Folk's bid stated that it would use a dredge, the
"Cathy M," which had a 24-inch discharge pipe and a 2800-horsepower
engine. Folk's bid left blank the space provided in the IFB to show the
size of the shore pipe. This bid was also referred to the Project
Operations Branch which decided that the bid was acceptable to the
22-inch or 24-inch discharge pipe requirement since the bid did not
state what diameter shore pipe would be used and did not indicate what,
if any, combination pipe would be used. Concerning the failure of
Folk's bid to indicate the diameter of shore and combination pipe, the
Chief, Project Operations Branch stated, "These items will be acceptable
if they meet the required condition." The Corps of Engineers also noted
that Folk's bid offered a 24-inch dredge with a 2900-horsepower engine
which was less than the IFB's required minimum engine size (3200
horsepower) for that size dredge. However, the Corps decided to accept
Folk's bid because Folk's bid prices were computed as if the bid offered
a 22-inch dredge for which 2900 horsepower exceeded the IFB's required
minimum engine size (2700 horsepower). Accordingly, the contract was
awarded to Folk on November 28, and Prosperity protested to our Office
by letter of December 4.
In its report to our Office on Prosperity's protest, the Corps of
Engineers concedes that Prosperity's bid was incorrectly rejected as
nonresponsive. The Corps reports that, since the IFB required dredges
with discharge pipes of not less than 20 inches nor more than 24 inches,
Prosperity's bid offering a 24-inch dredge in combination with a 20-inch
shore pipe was in fact above the minimum discharge pipe size
requirement. However, the Corps recalculated Prosperity's bid prices to
reflect the fact that a 20-inch shore pipe will allow the dredge to pump
dredged material at a slower rate than a 24-inch shore pipe. The Corps
used the IFB's table and recomputed the Prosperity bid as if a 20-inch
dredge had been offered. Because the flow rate was lower, the Corps
figured that Prosperity would actually take more hours than originally
calculated to do the work. Thus, the Corps increased the number of
hours by which Prosperity's hourly rate was multiplied to arrive at a
recalculated bid total of $1,045,800, which was higher than Folk's bid
total of $1,036,782. Therefore, the Corps argues that award to Folk was
proper because Folk offered the lowest evaluated price.
The issue for resolution is whether Folk's bid was responsive to the
IFB's requirements. We conclude that it was not and that therefore the
award to Folk was improper.
To be responsive, a bid must reflect an unequivocal offer to provide
the exact product or service called for in the solicitation so that its
acceptance would bind the contractor to perform in accordance with the
material terms and conditions of the IFB. Spectrum Communications,
B-220805, Jan. 15, 1986, 86-1 CPD P 49. Thus, a bid must be rejected if
it indicates that the product offered will not comply with the
specifications. Id. Furthermore, the failure to submit with the bid
specific-information required by the IFB generally renders a bid
nonresponsive. See Cummins Diesel Engines, Inc., 55 Comp. Gen. 999,
1004 (1976), 76-1 CPD P 248 at 8 (failure to submit required horsepower
curves).
Here, the IFB directed bidders to calculate their bids using the IFB
chart showing various combinations of engine sizes and discharge pipe
sizes and stated that " t hose dredges which have less horsepower than
the minimum shown for each size dredge will be considered
nonresponsive." The IFB also required bidders to submit with their bid a
complete description of the equipment that they intended to furnish and
contained an itemized sheet listing the information that had to be
supplied with bids.
Folk's bid specifically stated that it intended to furnish a 24-inch
dredge with only a 2900-horsepower engine. According to the IFB, the
minimum size engine which would be considered responsive with a 24-inch
dredge was a 3200-horsepower engine. Thus, from a technical standpoint,
Folk's bid did not meet the minimum horsepower requirement. However, it
was apparent from Folk's bid that the prices had been computed using the
IFB's anticipated flow rate for a smaller (22-inch) dredge for which the
2900-horsepower engine would exceed the minimum requirement, and the
Corps therefore determined the bid to be responsive to the horsepower
requirement.
It is not clear whether the minimum stated horsepower ratings were
material because the record does not indicate whether any engines below
the minimum horsepower for a particular size dredge would be so
underpowered as to be unable to drive the dredge properly, or whether an
engine below the minimum size would merely take longer to perform the
work. We need not resolve this matter, however, because we believe that
Folk's bid contained a separate deficiency which rendered it
unacceptable in any event.
Folk's bid did not state the size of the shore pipe which was one of
the items of required information designated in the itemized sheet
supplied for the description of the dredging equipment. It is clear
from the record that the Corps considered this information to be a
material part of the equipment description, especially since the Project
Operations Branch specifically examined both bids for this piece of
information and determined that Folk's bid could only be considered
acceptable if it supplied shore/combination pipe which met the discharge
pipe requirement. As the Corps has pointed out, the size of the
discharge pipe alone does not determine the flow rate. Rather, the size
of the shore pipe also has a significant impact on the flow rate which
is a critical element in the evaluation formula. Since Folk's bid did
not contain this required, material information, we do not see how the
Corps could properly evaluate Folk's bid or recalculate Folk's bid
prices (as allowed by the IFB). Therefore, Folk's bid was nonresponsive
because it did not provide the specific critical information required by
the IFB for evaluation purposes. Id.
In view of the above, we find that the contract was improperly
awarded to Folk. Since the Corps of Engineers now concedes that
Prosperity's bid is in fact responsive to the IFB, and because
Prosperity's bid is the lowest priced, responsive bid (either as
originally priced or as recalculated by the contracting officer), we
recommend that the Corps of Engineers terminate Folk's contract for the
convenience of the government and award the contract to Prosperity, if
the contracting officer determines Prosperity to be responsible.
The protest is sustained.
Comptroller General
of the United States
Matter of: Sam Gonzales, Inc.--Reconsideration
File: B-225542.2
Date: March 18, 1987
Agency decision not to award a contract under the section 8(a)
program because of concerns regarding the capacity of intended
subcontractor, a debtor under Chapter 11 of the bankruptcy laws, to
perform the contract does not violate 11 U.S.C. Sec. 525, prohibiting
discriminatory action against such debtors, since the decision was not
based solely on the subcontractor's bankrupt status and simply reflected
a legitimate exercise of the agency's broad discretion to determine
whether to award a section 8(a) contract.
Sam Gonzales, Inc. requests reconsideration of our dismissal of its
protest against the Agricultural Research Service's withdrawal of
project No. 6A01-86 for renovation of a log lodge at the Agricultural
Research Center in Beltsville, Maryland from the Small Business
Administration's (SBA) section 8(a) program. We grant the request for
reconsideration and deny the protest.
Gonzales, who had filed for protection under Chapter 11 of the
federal bankruptcy laws, argued in its original protest that the
agency's decision to withdraw the project from the section 8(a) program
violated 11 U.S.C. Sec. 525 (Supp. III 1985), which protects those who
have filed under the bankruptcy laws against discriminatory treatment.
We dismissed the protest because we do not review an agency's decision
to withdraw a procurement from the 8(a) program, absent a showing of
possible fraud or bad faith on the part of government officials or that
regulations have been violated, because such a decision is by statute
within the discretion of the agency to make. Bid Protest Regulations, 4
C.F.R. Sec. 21.3(f)(4) (1986); Ernie Green Industries, Inc., B-224347,
Aug. 11, 1986, 86-2 CPD P 178.
The protester asserts essentially the same protest grounds but now
argues that regulations were violated and that government officials
acted in bad faith. The protester offers no evidence in support of its
allegation of bad faith and does not even identify which regulations
were allegedly violated. Some reasonable showing of bad faith or that a
particular regulation has been violated is necessary before we will
consider a protest based on such allegations. See M.G. Technology
Corp., B-222438, May 29, 1986, 86-1 CPD P 503. No such showing has been
made here.
Gonzales also argues that we should reconsider our dismissal of its
protest because the matter involves the violation of a federal statute,
11 U.S.C. Sec. 525. In considering bid protests, we are to decide if
there has been a violation of statute or regulation. 31 U.S.C. Sec.
3554 (Supp. III 1985); 4 C.F.R. Sec. 21.6(a) (1986). Although protests
usually involve alleged violations of procurement statutes or
regulations, in some circumstances we will consider the requirements of
other statutes and regulations when they directly bear upon federal
agency procurements. See Solano Garbage Co., B-225397, et al., Feb. 5,
1987, 87-1 CPD P ; Monterey City Disposal Service, Inc., 64 Comp. Gen.
813 (1985), 85-2 CPD P 261. In Solano and Monterey, we were called upon
to decide whether a federal environmental statute required federal
agencies to award sole-source contracts to local government franchisees
pursuant to 10 U.S.C. Sec. 2304(c) (5) (Supp. III 1985), a provision of
the governing procurement statute authorizing non-competitive awards
when a statute requires award to a specified source. Here, there is no
statutory procurement provision directly involved in the protester's
complaint--the protester would simply have us determine whether an
otherwise discretionary agency action violates a provision of the
Bankruptcy Act.
While it would seem that such a matter is more appropriate for
consideration by the specialized bankruptcy courts provided for by 28
U.S.C. Secs. 151-158 (Supp. III 1985), it appears here that the
bankruptcy court believes we should consider the matter. A partial
transcript of proceedings before the Bankruptcy Court for the Eastern
District of Virginia indicates that the bankruptcy judge, while
concerned about the possibility of a violation of 11 U.S.C. Sec. 525,
declined to issue a temporary restraining order and instead stated that
the matter should be referred for further administrative review. The
government's response to the protester's request for judicial relief,
furnished to us with the reconsideration request, represented to the
court that this Office was the "appropriate reviewing authority for this
type of pre-contractual protest." Thus, it is now evident that the court
is interested in our review of the protester's complaint. 1/ We
therefore will consider the protester's complaint 2/ insofar as it
relates to the alleged violation of 11 U.S.C. Sec. 525.
Section 525 prohibits "a governmental unit" from denying or refusing
to renew a license, permit or similar grant to a debtor or otherwise
discriminating "with respect to employment" "solely because such . . .
debtor is or has been a debtor" under the bankruptcy laws. This
provision has been held to encompass the award of a procurement contract
by a federal agency. See In Re Coleman American Moving Services, Inc.
v. Tullos, 8 B.R. 379 (Bankr. D. Kan. 1980). Thus, what we must decide
is whether the Department of Agriculture violated section 525 by
withdrawing the project from the section 8(a) program and presumably
thereby depriving the protester of an award it would have received under
that program.
Section 8(a) of the Small Business Act, 15 U.S.C. Sec. 637(a) (1982
and Supp. III 1985), authorizes the SBA to enter into procurement
contracts with other federal agencies and to subcontract for the
performance of these contracts with socially and economically
disadvantaged small business concerns. It is clear from the Small
Business Act, however, that whether any particular contract should be
awarded under section 8(a), at least insofar as we are concerned here,
is solely within the discretion of the procurement officers of the
government. Arcata Associates, Inc., B-195449, Sept. 27, 1979, 79-2 CPD
P 228. Accordingly, absent a showing of fraud or bad faith or a failure
to comply with regulations, we have always viewed contracting agency
decisions to award or not to award a contract through the section 8(a)
program as legally unobjectionable and therefore not subject to review
under the bid protest function. This includes decisions to award
section 8(a) contracts, see Technical Services Corp., B-185473, May 6,
1976, 76-1 CPD P 304; to not award contracts through the section 8(a)
program, see Automated Data Mgt. Inc.--Reconsideration, B-218912.2, June
10, 1985, 85-1 CPD P 663; to cancel an unrestricted competitive
solicitation in order to award a section 8(a) contract, see Exquisito
Services, Inc., B-222200.3, July 17, 1986, 65 Comp. Gen. . 86-2 CPD P
78; and to withdraw a procurement from the section 8(a) program, see
Ernie Green Industries, Inc., B-224347, supra; Economy Security
Systems--Reconsideration, B-222241.2, June 20, 1986, 86-1 CPD P 576.
What is clear from these and many other cases is that no firm has a
right to have the government satisfy a specific procurement need through
the section 8(a) program or award a contract through the program to that
firm.
It is this very broad discretion vested in the procurement agencies
by the Small Business Act that leads us to the conclusion that the
agency's actions in this case are not violative of section 525. The
record contains a letter from the contracting officer which states that
the decision not to award a section 8(a) contract reflected the agency's
business judgment that Gonzales might not be able to perform the job
because Gonzales would be performing "two other larger projects" and the
agency had received no reasonable assurances that Gonzales could perform
the projects simultaneously. The letter further states that there
simply wasn't sufficient time before the end of the fiscal year to
evaluate the capacity of Gonzales to meet the requirements of all three
projects. As a result, the letter states, the project was withdrawn
from the section 8(a) program and no award was made during the fiscal
year. (The project was advertised on an unrestricted basis in fiscal
year 1987.)
We and the courts have long recognized that the ability of a
prospective contractor to perform a particular contract is a matter of
business judgment for the agency, in the exercise of its discretion, to
make. See, e.g., Keco Industries, Inc. v. United States, 492 F.2d 1200
(Ct. Cl. 1974); Scanwell Laboratories, Inc. v. Shaffer, 424 F.2d 859
(D.C. Cir. 1970); Riocar, B-180361, May 23, 1974, 74-1 CPD P 282;
Decker & Co., et al., B-220807 et al., Jan. 28, 1986, 86-1 CPD P 100.
Here, the agency appears to have had a legitimate reason to be concerned
about the protester's ability to perform the contract in question, a
reason that went beyond the fact that the protester was seeking relief
under the bankruptcy statutes and was based on the company's overall
capacity.
Although it is not entirely clear why the agency believed there was
insufficient time to determine the ability of Gonzales to perform this
contract in light of the company's other projects 3/ (the decision to
withdraw the project from the section 8(a) program was made on August 1,
1986) before the end of the fiscal year on September 30, in light of the
agency's broad discretion not to proceed with a section 8(a) award, we
do not think that the fact that the SBA and the agency might have been
able to make that determination prior to September 30 renders the
decision to withdraw the project because of concerns about Gonzales'
capability improper or illegal.
In short, we think it is clear from the record that the agency did
only what it was entitled to do under the law and regulations governing
federal procurement, and did not act as it did solely because Gonzales
sought Chapter 11 protection. In this regard, it is important to note
that 11 U.S.C. Sec. 525 is intended to protect debtors f rom
discriminatory treatment; it does not grant them rights greater than
they would enjoy outside of bankruptcy. Duffey v. Dollison, 734 F.2d
265 (6th Cir. 1984); In Re Professional Sales Corp., 56 B.R. 753 (N.D.
Ill. 1985). Outside of bankruptcy Gonzales would have absolutely no
right to insist on a section 8(a) contract award. We fail to see how
the circumstances here would warrant a different result.
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ Our Bid Protest Requlations provide for our consideration of a
matter pending before a court of competent jurisdiction when the court
requests a decision from us. 4 C.F.R. Sec. 21.9 (1986).
2/ We do so here without seeking a report from the Department of
Agriculture since we believe the issue raised can be decided summarily
on the basis of the documents already of record. See 4 C.F.R. Sec.
21.3(f).
3/ Since Gonzales is a small business and a section 8(a) award was
under consideration, it is the SBA that would have had to determine the
capability of Gonzales to perform the contract. However, in light of
the broad discretion agencies have under section 8(a), the Department of
Aqriculture could have withdrawn the project from the section 8(a)
program even if SBA decided that Gonzales could perform. Cf. Atlantic
Petroleum Corp., B-215472.2, Apr. 12, 1985, 85-1 CPD P 417.
Matter of: Swedlow, Inc.
File: B-225534, B-225535
Date: March 30, 1987
There is no merit to a protester's contention that by incorporating
an aircraft prime contractor's process specification into solicitations
for canopies for the aircraft the contracting agency established
preaward approval by the prime contractor as a precondition to any
contract award where the solicitations provided for offerors to propose
on the basis of first article approval by the government and provided
that such provisions would prevail over any conflicting provisions
contained in other solicitation documents.
Swedlow, Inc., protests the award of two contracts to Perkins
Plastics, Inc. under request for proposals (RFP) Nos. F0960386-R-7445
and F09603-86-R-7808, issued by Warner Robins Air Logistics Center,
Robins Air Force Base, Georgia. RFP 7445 is for forward canopies for
the F-15 aircraft and RFP 7808 is for F-15 aft canopies. Swedlow
contends that Perkins had not received preaward approval to manufacture
the canopies from the manufacturer of the F-15, as Swedlow argues the
solicitations required, and that the firm is not capable of producing
the canopies. We deny the protest in part and dismiss it in part.
The prime contractor for the F-15 is McDonnell Douglas Corporation.
The agency reports that it acquired from McDonnell Douglas the technical
data necessary to procure F-15 spare parts. The solicitations for the
forward and aft canopies referenced this and various other technical
data and advised potential offerors how to obtain copies of this
material. One of these documents was McDonnell Douglas Process
Specification (P.S.) 14034, which provides general procedures for the
fabrication of reinforced plastic laminates. 1/
Paragraph 5.2 of P.S. 14034, entitled "Fabricator Qualification,"
discusses the procedures for determining whether particular fabricators
are capable of complying with the process specification. It provides,
in part: "All fabricating facilities shall have been qualified prior to
the receipt of any contracts." Paragraph 5.3.7 requires the first
production part to be approved by either of two McDonnell Douglas
companies.
Both solicitations provided for award to that responsible offeror
whose offer conforming to the solicitation would be most advantageous to
the government, price and other factors considered. Perkins was the
lowest offeror under both solicitations. Swedlow was the third lowest
offeror under the RFP for the forward canopies and was second lowest
with respect to the aft canopies. 2/ Swedlow contends that Perkins was
not eligible for award under either solicitation because it had not
received preaward approval from McDonnell Douglas to produce the
canopies. In addition, Swedlow alleges that Perkins does not have the
facilities to conduct the testing required to obtain such approval.
Further, Swedlow contends that the preaward survey conducted by the
Air Force in this case could not substitute for approval by McDonnell
Douglas because the agency's preaward survey team was not experienced in
assessing the capabilities of manufacturers of transparencies. In this
connection, Swedlow notes that Hill Air Force Base, whose personnel
Swedlow says are more experienced in procurements of transparencies than
Robins', has never approved Perkins as a qualified source. Finally,
according to the protester, Perkins failed a preaward survey in a
procurement of forward canopies for the F-4 aircraft, and the firm's
first article in a procurement of F-4 fairing windows has been rejected.
For these reasons, Swedlow contends that the decisions to award the
contracts to Perkins here were arbitrary and capricious.
The protester's contention regarding required preaward approval is
without merit. Both solicitations allowed offerors to propose supplying
the canopies either with or without first article approval. The
solicitations'schedules provided that, when required, the government
would perform the first article tests, and did not provide for any
involvement by McDonnell Douglas in this process. In our view, it would
not be reasonable to read the solicitations as establishing preaward
approval by McDonnell Douglas as a precondition to award if offerors
could demonstrate their ability to produce canopies meeting solicitation
requirements by supplying first articles acceptable to the government.
In this regard, both solicitations contained numerous and prominent
references to first article approval, in contrast to the single,
undefined reference to preaward approval contained in a general process
specification which was on a list of documents incorporated in the
solicitations by reference. In fact, the agency states that it did not
intend that McDonnell Douglas be involved in these procurements.
According to the agency the references to that firm were inadvertently
left in the voluminous P.S., which the agency purchased from McDonnell
Douglas in order to "break out" the canopies for competition. The P.S.
was incorporated to provide technical information to help first-time
suppliers compete.
In any event, as the agency points out, any inconsistency between the
solicitations' first article provisions and P.S. 14034 would be
resolved under the solicitations' Order of Precedence clauses, which
stated that "schedule" provisions (such as the first article provisions)
would prevail over conflicting provisions in other solicitation document
exhibits, attachments, or specifications.
Moreover, we note that the clause in paragraph 5.2 of P.S. 14034
relied upon by the protester provides that all fabricating facilities
shall have been qualified prior to award, but does not specifically
state that such approval must come from McDonnel Douglas. We recognize
that paragraph 5.3.7 of P.S. 14034 did specifically provide for
approval of first articles by McDonnell Douglas; first article
provisions, however, involve contract administration, not preaward
approval. In any event, both provisions should have been deleted since
they were inconsistent with the solicitations' controlling first article
provisions. Nonetheless, we think that, when read in their entirety,
the solicitations did not require an offeror to have been approved by
McDonnell Douglas in order to be eligible for the awards.
Although Sedlow argues that it is not questioning the contracting
officer's determination of Perkins' responsibility, the only relevance
of Swedlow's remaining contentions regarding the qualifications of the
agency's preaward survey team and Perkins' ability to produce other
aircraft transparencies would be solely in regard to the issue of
Perkins' responsibility. Our Bid Protest Regulations provide that we
will not consider protests challenging a contracting officer's
affirmative determination that a prospective contractor is
responsible--that is, capable of performing the contract--absent a
showing that such determination was made fraudulently or in bad faith or
that definitive responsibility criteria in the solicitation were not
met. 4 C.F.R. Sec. 21.3(f)(5) (1986). The protester has made no
showing of possible fraud or bad faith on the part of the agency and, as
discussed above, the solicitations did not establish preaward approval
as a definitive responsibility criterion.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
1/ A laminate is a product consisting of layers of material, in this
case stretched acrylic, pressed together to form thin sheets.
2/ The Air Force contends that Swedlow is not an interested party for
purposes of objecting to the award to Perkins for the forward canopies
because, as third lowest offeror, Swedlow would not be in line for award
even if we were to agree that the award to Perkins was improper.
Swedlow responds by noting that the second lowest offeror also has not
qualified to produce the canopies, an allegation the Air Force contends
was not timely raised. We consider it unnecessary to resolve the
interested party issue since Swedlow's objections concerning the award
to Perkins for the forward canopies are the same as its objections
concerning the contract for the aft canopies, and Swedlow's status as an
interested party with respect to the aft canopy procurement is not in
dispute.
Matter of: Free State Reporting, Inc.
File: B-225531.3, B-225532.3
Date: March 6, 1987
Prior decision holding that, after cancellation of sealed bid
procurement, award following negotiation at a price higher than the
lowest rejected bid is not precluded by FAR, 48 C.F.R. Sec. 15.103(c)
unless the cancellation was based on unreasonable prices or collusive
bidding, is affirmed on reconsideration.
Free State Reporting, Inc. (FSRI) has requested us to reverse our
denial of the company's protest in Free State Reporting, Inc., et al.,
B-225531 et al., Jan. 13, 1987, 87-1 C.P.D. P .
FSRI had protested the Social Security Administration's (SSA's) award
of contracts to York Stenographic Services (York) and Science and
Management Resources (SMR) following negotiations after the cancellation
of invitation for bids (IFB) No. SSA-IFB-86-002. FSRI argued that SSA
awarded contracts under the negotiated procurement at prices higher than
the lowest bid price of a responsible bidder under the IFB in violation
of the Federal Acquisition Regulation (FAR), 48 C.F.R. Sec. 15.103(c)
(1986). We held that the FAR does not preclude award, following
negotiation after the cancellation of a sealed bid procurement, at a
price higher than the lowest rejected bid price under the canceled
procurement except where the cancellation was based on unreasonable
prices or collusive bidding. FAR, 48 C.F.R. Sec. 14.404-1 (e) (1).
Since the awardees' bids were initially rejected for failure to meet a
bid bond requirement, not because of unreasonable prices or price
collusion, we found no merit to FSRI's protest.
In its request for reconsideration, FSRI argues that, assuming York
and SMR had to buy bid bonds, their negotiated contract prices
substantially exceeded the lowest rejected bid price under the canceled
procurement plus applicable bond premiums.
In our prior decision we agreed with SSA's argument that where a
bidder has failed to meet a material requirement it would be
unreasonable to expect that bidder to not raise its price when
submitting a fully compliant offer during negotiations. However, this
argument was merely to show the rationale for the difference in
treatment under the regulations when IFB's are canceled for different
reasons. Since the prohibition against awarding at a higher price
following cancellation in FAR, 48 C.F.R. Sec. 15.103(c) does not apply
here, there is no limit on the amount by which a bid may be increased
during negotiation, as FSI argues in its request for reconsideration.
Our prior decision is affirmed. 4 C.F.R. Sec. 27.12(a) (1986).
Harry R. Van Cleve
General Counsel
Matter of: Free State Reporting, Inc.; Neal R. Gross and Co., Inc.
File: B-225531, 225531.2, B-225532, B-225532.2
Date: January 13, 1987
1. A nonresponsible firm, protesting that award under a negotiated
procurement following cancellation of the second step of a sealed bid
two-step procurement was made at prices higher than those received under
the canceled second step in violation of the Federal Acquisition
Regulation, is an interested party who can protest under the Bid Protest
Regulations because, if the protest were sustained, the remedy would be
a resolicitation under which the protester could compete.
2. The Federal Acquisition Regulation, 48 C.F.R. Sec. 15.103(c),
does not preclude award, following negotiation after the cancellation of
a sealed bid procurement, at a price higher than the lowest rejected bid
price under the canceled procurement except where the cancellation was
based on unreasonable prices or collusive bidding.
Free State Reporting, Inc. (FSRI), protests the award of contracts
to York Stenographic Services and Science and Management Resources
following negotiations after the cancellation of invitation for bids
(IFB) No. SSA-IFB-86-002. After we requested the agency's report on
FSRI's protest, pursuant to the express option provisions of our Bid
Protest Regulations (4 C.F.R. Sec. 21.8 (1986)), Neal R. Gross and Co.,
Inc. (NRG), also filed a protest. The IFB was the second step of a
two-step, sealed bid, total small business setaside acquisition of
services to transcribe cassette tapes generated by the Social Security
Administration's Office of Hearings and Appeals (SSA). FSRI and NRG
protest that SSA awarded contracts under the negotiated procurement at
prices higher than the lowest bid price of a responsible bidder under
the IFB in violation of the Federal Acquisition Regulation (FAR), 48
C.F.R. Sec. 15.103(c) (1985). FSRI also alleges that SSA did not file
its administrative report on time and improperly failed to suspend
contract performance.
We deny FSRI's protest and dismiss NRG's protest.
The contracting officer determined FSRI nonresponsible under the IFB
as the result of an unacceptable performance history. This
determination was referred to the Small Business Administration (SBA) as
required by 15 U.S.C. Sec. 637(b) (7) (1982) for consideration under the
SBA's certificate of competency program. By letter dated September 19,
1986, the SBA declined to issue a certificate of competency.
After SSA found the four other bids received under the IFB
nonresponsive, SSA canceled the IFB in October 1986 and completed the
acquisition through negotiation. See FAR, 48 C.F.R. Secs. 14.404-1 (e)
(1) and 15.103. FSRI's offer was rejected, apparently due to the
nonresponsibility determination under the canceled IFB.
SSA awarded a contract to York Stenographic Services, Inc., for 25
percent of the estimated maximum annual quantity, and awarded a contract
for 75 percent of the estimated maximum annual quantity to Science and
Management Resources, Inc.
As a preliminary matter, we must consider SSA's assertion that FSRI
is not an interested party under our Bid Protest Regulations. SSA
contends that since FSRI was found to be nonresponsible it would be
ineligible to receive an award even if its protest were sustained.
The question of whether a party is interested depends on the nature
of issues being protested. If FSRI were protesting the award to a
particular firm and if other bidders would remain eligible for award
under the procurement, then FSRI would not be an interested party.
However, FSRI contends that no award can be made under the negotiated
portion of this procurement because the lowest price received exceeds
the lowest price obtained under the canceled second step, in violation
of FAR, 48 C.F.R. Sec. 15.103(c). If we sustain FSRI's protest, the
remedy would be termination of the contract and a resolicitation under
which FSRI could participate. While SSA, in its report to our Officer
relied on our decision in Mar-Mac Precision Corp., B-221561, Jan. 22,
1986, 86-1 C.P.D. P 72 (a nonresponsible bidder is not interested to
protest the price reasonableness of the remaining bids) to support its
interested party argument, in that case there was no indication the
nonresponsible bidder would be able to compete upon a resolicitation.
Here, however, we consider Mar-Mac inapplicable in light of the lapse of
time from the nonresponsibility determination in August to the earliest
a new solicitation could be issued coupled with information provided by
the protester indicating that it may no longer be considered
nonresponsible. Therefore, since our sustaining the protest would
result in FSRI's opportunity to compete for the award, we view FSRI as
an interested party. See Tracor Jitco, Inc., B-220138, Dec. 24, 1985,
85-2 C.P.D. P 710.
Turning to their merits, FSRI and NRG protest that SSA awarded
contracts as a result of the negotiated procurement at prices higher
than the lowest bid price of a responsible bidder in violation of FAR,
48 C.F.R. Sec. 15.103(c). That section provides that:
"When the agency head has determined, in accordance with
14.404-1 (e) (1), that an invitation for bids is to be cancelled
and that use of negotiation is appropriate to complete the
acquisition, the contracting officer may negotiate without issuing
a new solicitation subject to the following conditions--(a) Prior
notice of intention to negotiate and a reasonable opportunity to
negotiate have been given by the contracting officer to each
responsible bidder that submitted a bid in response to the
invitation for bids; (b) The negotiated price is the lowest
negotiated price offered by any responsible bidder; and (c) The
negotiated price is lower than the lowest rejected bid price of a
responsible bidder that submitted a bid in response to the
invitation for bids."
SSA does not deny that prices under the negotiated procurement are
higher than those bid under the canceled IFB. Rather, SSA argues that
the FAR provision applies only to cases where an agency negotiates after
cancellation for unreasonable bid prices or collusive bidding. SSA
points out that the nonresponsive bids in the instant procurement were
found nonresponsive for failing to meet a bid bond requirement.
According to SSA, it would be unreasonable to expect offerors to lower
their prices when adding a material requirement, such as a bid bond,
during negotiations.
We agree with SSA's interpretation. The only logical interpretation
of the term "lowest rejected bid price" in FAR, 48 C.F.R. Sec.
15.103(c), is that it refers to a bid price rejected as unreasonable or
as not independently reached in open competition. Otherwise, as SSA
states, if it applied to bids rejected as nonresponsive, bidders who did
not meet all material requirements and who thereby may have been able to
bid lower than they otherwise would could not offer a higher price for
adhering to all such requirements in the negotiation phase. Here,
therefore, the bids of the nonresponsive bidders do not fall within the
"lowest rejected bid price" language of the cited FAR section because
their bids were rejected for failure to meet a bid bond requirement, not
because of unreasonable prices or price collusion. Consequently, we
find no merit to the protest.
FSRI also contends that SSA's administrative report should be
disregarded because it was not filed with our Office within the required
10-day period. 4 C.F.R. Sec. 21.8(d) (1). This protest basis is
without merit. Where the express option procedure is used, our Bid
Protest Regulations require that the contracting agency file a report
with our Office within 10 days from the date it receives notice from our
Office that the express option will be used. 4 C.F.R. Sec. 21.8(d) (1).
"Days" refers to working days of the federal government. 4 C.F.R. Sec.
21.0(d). SSA received notice of the express option from our Office on
December 4, 1986, and was required to file its report by December 18,
1986. SSA's report was received in our Office on December 18, 1986,
within the required 10-day period as evidenced by our Office's time-date
stamp.
Since FSRI's protest is without merit, we need not address its
allegation that SSA violated the Competition in Contracting Act of 1984,
31 U.S.C. Sec. 3553(d) (Supp. III 1985), by not suspending performance
of the contracts pending our decision on the protest.
FSRI's protest is denied and NRG's protest is dismissed in accordance
with 4 C.F.R. Sec. 21.3(f), since we find that based on the above
holding, it is clear, without obtaining a report from the agency
responsive to NRG's protest, that the protest is without merit.
Harry R. Van Cleve
General Counsel
Matter of: Summit Research Corporation
File: B-225529
Date: March 26, 1987
1. Contracting agency may properly make an award to a lower-priced,
lower-rated offeror although the solicitation provides that cost will be
less important than technical factors in the selection, where the
contracting officer resonably determines that the technical advantage
from the highest-rated proposal is less significant than the possible
cost savings from a lower-rated proposal and the costtechnical tradeoff
is otherwise consistent with the evaluation scheme in the solicitation.
2. Protest that an offeror cannot provide qualified personnel at its
proposed cost and that the contracting agency failed to consider this in
determining the most probable cost of the offeror's proposal is denied,
where the proposed personnel are almost all current employees paid at
levels included in the offeror's proposal and the record does not
establish that required substitute additional personnel will materially
increase the offeror's costs.
Summit Research Corporation protests the award of a contract to GP
Taurio, Inc. under request for proposals (RFP) No. N60921-86-R-0026,
issued by the Naval Surface Weapons Center, Silver Spring, Maryland.
Summit contends that the Navy improperly evaluated GP Taurio's proposal,
and that the technical superiority of Summit's proposal outweighs GP
Taurio's lower cost, so that the award to GP Taurio was unreasonable and
inconsistent with the selection criteria listed in the RFP.
We deny the protest.
The solicitation, issued on October 15, 1985, sought proposals to
provide technical, analytical and managerial support for fleet exercise
planning, assessment and data collection, reconstruction of exercises,
and analysis of performance and tactics. The work is to be performed
under delivery orders issued for each exercise or analysis project, with
the contractor proposing staffing and duration of on-site support to be
approved by the Navy.
The RFP described four technical evaluation factors-- personnel,
management plan, technical approach, and corporate experience--as well
as a number of subfactors under each. The numerical weight of each
technical factor and subfactor was listed. The RFP provided that "the
most probable price" would not be numerically weighed and, while
important, would receive less consideration in the award decision than
the results of the technical evaluation. The RFP stated that if two or
more offerors were found essentially equal technically, then total price
might become the determinative factor. Offerors were required to
propose hourly labor rates, including wages, indirect cost and profit,
for 11 categories of personnel. Each offeror then determined its total
proposed cost for the base year and two option years by multiplying
labor rates time estimated hours for the labor categories, and adding
the offeror's estimated costs for travel, material and preperformance
training.
Six firms submitted proposals by the January 6, 1986 closing date.
Three, including Summit and GP Taurio, were determined to be in the
competitive range. After discussions and evaluation of best and final
offers, the Navy ranked Summit's technical proposal first, with a score
of 90.64, and GP Taurio's propsal second, with a score of 82.69.
Summit's proposed cost was $10,509,453 and GP Taurio's was $7,526,191.
The contracting officer concluded that the technical superiority of
Summit's proposal did not outweigh the significant cost savings
available from GP Taurio, and on November 17, the Navy awarded a
contract to GP Taurio.
On December 1, Summit filed this protest. The protest was filed more
than 10 calendar days after award, too late to require suspension of
performance pending our decision under the Competition in Contracting
Act of 1984 (CICA), 31 U.S.C. Sec. 3553(d) (Supp. III 1985), and the
Navy elected to continue performance of the contract. See Federal
Acquisition Regulation (FAR), 48 C.F.R. Sec. 33.104(c)(5) (1986).
Summit's primary basis of protest questions the reasonableness of the
selection of GP Taurio's lower-cost proposal, since the solicitation
provided that cost might become the determinative factor if two
proposals are considered to be "essentially equal" technically.
Where, as here, the contracting agency makes a tradeoff between cost
and technical considerations, the essential question is whether the
determination to make award to a particular offeror is reasonable and
consistent with the RFP's evaluation criteria. Mantech Services Corp.,
B-222462, Aug. 5, 1986, 86-2 CPD P 149. The key element in the
costtechnical tradeoff is the selection official's judgment regarding
the significance of the differences in technical merit among the
proposals. Peterson & Associates, B-223472, Sept. 18, 1986, 86-2 CPD P
319.
We disagree with Summit's conclusion that under the evaluation scheme
set forth in the RFP the Navy could not select GP Taurio's lower-cost
proposal since the two highest-rated proposals were not essentially
equal technically. The solicitation stated that award would be made on
the basis of a comparison of most probable price and technical
competence to determine the combination most advantageous to the
government. In this context, the statement relied upon by Summit--that
cost could be the determinative factor with technically equal
proposals--does not mean that cost would otherwise play no role in the
selection decision. Rather, read as a whole, the RFP clearly requires
that where competing proposals are technically unequal, cost is not
determinative but must be weighed against the technical rating in order
to determine the most advantageous proposal.
Virtually all of the eight point difference between Summit's and GP
Taurio's technical scores is attributable to differences in the
qualifications of some proposed GP Taurio personnel. Three of GP
Taurio's proposed senior operations analysts and two operations analysts
did not meet minimum qualification requirements in the RFP; the firm
lacked a written employment agreement with one proposed senior data
analyst and will require more data analysts than proposed; and the Navy
found that GP Taurio had not established that all of its personnel had
required security clearances.
The Navy consistently characterized these weaknesses as minor and
insignificant. In evaluating GP Taurio's initial proposal, the
technical evaluation board found that the firm fell "a little short" on
qualified personnel and that, based on qualifications and experience of
other proposed personnel, weaknesses could be remedied by training. GP
Taurio remedied some of these weaknesses in its best and final offer,
and the technical evaluation board found that remaining personnel
weaknesses were "readily correctable without causing undue delay through
some additional recruiting and training." The contracting officer
similarly found that GP Taurio could improve its personnel by training
and replacing a few individuals for two labor categories. He concluded
that the specific individuals proposed by GP Taurio could satisfy the
Navy's requirement for the base year of the contract, that the personnel
weaknesses were minor and easily correctable after award, and that any
delay in performance this might entail would be insignificant. As a
result, the contracting officer determined that the savings of almost 30
percent, about $3 million, represented by GP Taurio's offer outweighed
the technical differences between the two offerors.
Summit argues that GP Taurio's proposal was not acceptable because it
did not demonstrate "full compliance with the RFP" before award. The
protester also argues that training cannot make up for the shortcomings
of GP Taurio's personnel and that the Navy cannot require such training
under the terms of its contract with GP Taurio. We find these arguments
without merit. The RFP did not require offerors to propose all staff
that might be necessary under the contract, although failure to do so
would risk a lower evaluation score--which GP Taurio actually received.
While training could not substitute for the necessary experience and
education lacking in a few individuals proposed by GP Taurio, substitute
personnel could do so. Summit has provided no evidence giving us a
basis to question the Navy's view that recruiting and training such
personnel would be a minor matter.
Paragraph C.6 of the RFP explicitly states that the contractor is
responsible for training personnel and maintaining their proficiency,
and the contractor must certify in writing that each staff number has
been adequately trained and is competent to perform the tasks to which
assigned. Another provision, paragraph C.10, states that due to the
specialized nature and complexity of the Navy's data systems, it is
estimated that the contractor will need about 2 months to train its
personnel for them to become fully capable of satisfactorily performing
the contract tasks. GP Taurio proposed to provide all initial and
subsequent training at its own expense. Thus, while the necessity for
training some individuals might represent a weakness in GP Taurio's
proposal, the successful offeror is obligated to provide adequate
training after contract award.
Summit also questions the acceptability of GP Taurio's proposal and
the Navy's cost-technical tradeoff because GP Taurio's personnel are not
familiar with certain assessment methodologies to be used in contract
performance. In evaluating initial proposals under the technical
approach factor, the technical evaluation board gave GP Taurio the
highest score, although it noted that the firm had not demonstrated
familiarity with assessment methodologies and that this would require
extensive technical training to remedy. The evaluation board found some
evidence of familiarity with assessment methodologies in GP Taurio's
best and final offer, but not with the specific methodologies listed in
the RFP. The board increased the firm's score for the technical
approach factor slightly, with the note that additional training would
be necessary.
The RFP stated that throughout the evaluation the Navy would consider
"correction potential" when it identified a deficiency. It did so in
the case of GP Taurio's lack of familiarity with certain assessment
methodologies, i.e., the Navy considered the potential for training to
provide the necessary knowledge, although the agency gave the firm a
lower score because of the weakness. Since even with this weakness, GP
Taurio received almost the same score as Summit (22.53 versus 22.80) for
technical approach, we have no basis to conclude that the contracting
officer should have rejected GP Taurio's proposal as Summit contends.
In sum, we do not find that the contracting officer's judgment about
the significance of the differences in technical merit between the
Summit and GP Taurio proposals was unreasonable, or that his
cost-technical tradeoff was inconsistent with the evaluation scheme set
forth in the solicitation.
Summit contends that the technical evaluation board failed to
evaluate GP Taurio's proposal properly under the corporate experience
factor. According to Summit, the board failed to solicit information
about GP Taurio's performance on other contracts, particularly a current
contract for services similar to those being procured here, and should
have rated the firm much lower relative to Summit.
The RFP provided that corporate experience would be evaluated in
terms of assessing the offeror's ability to provide continuous support,
successful completion of tasks and deliverables, and product quality.
Offerors would also be assessed on past ability to produce
well-documented, analytically sound, innovative and timely products.
Two subfactors were listed: 1) experience in fleet exercise support and
fleet operations analysis projects in relevant subject areas, and 2)
number and technical depth of personnel available to the contractor.
The RFP also stated that the evaluation would be based upon "information
furnished by the offeror plus information obtained from the Government
and other sources."
The Navy states that with respect to the two types of experience
listed in the first subfactor, CP Taurio has much less experience than
Summit in fleet exercise support, but it has a great deal of experience
in fleet operations analysis. The agency solicited accounts of GP
Taurio's experience from the Defense Contract Management Agency and a
number of Navy officials, including those on the technical evaluation
board. The Navy did not specifically question contracting officials
regarding GP Taurio's current contract to provide fleet exercise support
to the Commander, Naval Surface Force, Pacific Fleet. Summit alleges
that GP Taurio's early performance on that contract was unsatisfactory.
As a result of the protest, the Navy investigated Summit's allegations
and states that a problem did arise within the Navy concerning what
tasks should be requested and by which organization, but that the
problem did not concern the quality of the contractor's performance.
The agency represents that it has been pleased with GP Taurio's
performance under the contract.
We disagree with Summit's contention that the Navy could not give GP
Taurio high marks because its experience was primarily in one aspect of
the services described in the solicitation. The RFP required the Navy
to evaluate offerors' past experiences in order to determine how well
they performed certain functions, such as producing innovative and
timely products. The agency could reasonably determine that GP Taurio
performed those functions as well or better than Summit, even though
Summit's experience consisted of extensive services similar to those
being procured, while GP Taurio's experience was more narrow,
particularly in fleet exercise support. Also, we do not believe that
the technical evaluation board acted unreasonably or contrary to the
evaluation scheme because it did not consult contracting officials about
GP Taurio's support contract for the Pacific Fleet. As Summit suggests,
the members of the technical evaluation board were aware of GP Taurio's
performance of other contracts and may have believed that a detailed
inquiry into performance of the Pacific Fleet support contract was
unnecessary. Irrespective of the reasons for the omission, we cannot
say that the failure to investigate performance on the contract renders
the Navy's evaluation of GP Taurio's corporate experience unreasonable,
or that the firm's score for the corporate experience factor would have
changed had the Navy conducted the investigation before award.
Summit contends that the Navy did not properly determine the most
probable cost of GP Taurio's proposal. Based on GP Taurio's total cost,
the protester believes that the firm cannot employ individuals with the
qualifications listed in the RFP, so that GP Taurio must have proposed
"phantom personnel" or actual individuals that it does not plan to use,
and will seek to substitute less-qualified, lower-paid personnel after
contract award.
All but one of the individuals proposed by GP Taurio are currently
employed by the firm or its proposed subcontractors. These individuals
are paid somewhat less than Summit's personnel on the average. Defense
Contract Audit Agency reports concerning the two firms' cost proposals
indicate that much of the difference in labor rates stems from Summit's
higher indirect costs, rather than unreasonably low rates paid by GP
Taurio. GP Taurio must employ a few additional and substitute
individuals during performance, but there is no evidence in the record
to establish that the rates likely to be paid will be materially higher
than proposed by GP Taurio.
Finally, Summit argues that a recent decision of the General Services
Administration Board of Contract Appeals (GSBCA), DALFI, Inc., GSBCA No.
8755-P, Dec. 30, 1986 (slip opinion), supports the protester's position.
In that case, the contracting agency awarded a contract to the offeror
with a lower technical score (80.99 points versus 91.44 points) and a
lower cost proposal (approximately $17 million versus $21 million). The
RFP provided that cost would be less important than the technical
evaluation. The GSBCA found that the agency had not adequately
justified the cost technical tradeoff for two reasons. First, the
agency minimized the technical distinction "using at best generic or
summary reasons." Apparently, there was no effort to assess the
significance of the difference in technical proposals in light of the
possible cost savings from the lower-rated proposal. The agency simply
considered the proposals to be roughly equal. Second, the GSBCA found
that the agency failed to conduct a proper cost realism analysis by
considering the impact on the government's overall cost that would
result from the various levels of expertise represented by the
proposals.
The facts presented in DALFI, Inc. are quite different from those in
Summit's protest. Here, the Navy did not dismiss the technical
differences between Summit and GP Taurio, but, as discussed above,
documented a reasonable basis for concluding that the differences did
not outweigh the cost savings offered by GP Taurio. Also, the technical
differences between the two offerors did not result from a difference in
expertise that the Navy believes will have an impact on the costs of
contract performance. Instead, the Navy concluded that the weaknesses
in GP Taurio's proposal will be eliminated after preperformance training
and the addition of a few staff members, and the agency did consider the
cost of necessary training its cost-technical tradeoff. Consequently,
we do not find that the GSBCA decision supportive of Summit's protest.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Consolidated Photocopy Company, Inc. and Downtown Copy
Center, A Joint Venture-- Reconsideration
File: B-225526.2
Date: May 4, 1987
Prior decision, holding that agency did not waive a material
solicitation requirement solely for the benefit of one offeror but
waived it also for the benefit of the protester, is affirmed where the
protester fails to present facts or legal arguments to establish that
the prior decision was erroneous.
Consolidated Photocopy Company, Inc. and Downtown Copy Center, a
joint venture (Consolidated), requests reconsideration of our decision,
Consolidated Photocopy Company, Inc. and Downtown Copy Center, A Joint
Venture, B-225526, Mar. 20, 1987, 87-1 CPD P , denying its protest that
the Federal Communications Commission (FCC) improperly awarded a
contract, under request for proposals (RFP) No. 86-08, to International
Transcription Services, Inc. (ITS), for nonpersonal services and
materials for the search, retrieval and duplication of documents
maintained by the FCC and which are releasable to the public under the
Freedom of Information Act or FCC regulations. Specifically,
Consolidated had alleged that the agency prevented it from competing on
an equal basis with ITS by effectively relaxing a solicitation
requirement solely for the benefit of ITS that the successful contractor
provide two experienced factory trained repair personnel on-site to
maintain copier-duplicating machines.
We affirm our prior decision.
Briefly, the solicitation required, among other things, that the
successful contractor install, maintain, and fully service
copier-duplicating machines and microfiche reader/printers on-site at
various FCC locations. The solicitation stated that machine
malfunctions must be responded to within 2 working hours and repairs
completed within 8 working hours of notification of machine failure.
The solicitation also contained (at paragraph C.6.5.5) the following
provision:
"Contractor shall provide a minimum of two experienced factory
trained repair personnel on-site at the Commission's Washington,
D.C. offices at all times. On call factory repair personnel
shall be provided by the contractor to serve the Laurel, MD and
Gettysburg, PA facilities. Back-up shall be provided by the
contractor through a service agreement with the vendor of the
equipment."
The solicitation further stated that "factory-trained repair
personnel" would be considered essential to the performance of the
contract and that the resumes of such personnel must be provided for
evaluation.
Four proposals were received and discussions were held with the
offerors determined to be within the competitive range. Best and final
offers were received and the FCC technical evaluators found the ITS
proposal to be the most advantageous proposal. Accordingly, FCC awarded
the contract to ITS. Consolidated's protest followed.
In its initial protest, Consolidated had principally alleged that ITS
failed to propose two experienced factory trained repair personnel as
required by the RFP. We reviewed the proposals and the evaluation
documents and found that the resumes submitted by ITS to satisfy this
RFP requirement indicated that ITS' proposed technicians would only be
essentially responsible for cleaning and supplying the equipment, rather
than repairing the machines. However, based on our review of
Consolidated's proposal, we found that Consolidated also did not meet
the requirement for experienced factory trained repair personnel. We
stated that in its best and final offer, Consolidated only proposed two
reasonably qualified factory trained repair personnel who would be
on-site for a two-week "break-in" period; after this initial period,
Consolidated would provide "newly trained technicians" who would be
trained at the factory so long as Consolidated had a "thirty-day lead
time." Since these replacement technicians were not yet hired or
trained, no resumes of their background and experience had been provided
in Consolidated's proposal. Further, we noted that the short period of
time proposed for factory training, and the accompanying proposed course
schedule at the factory, indicated that these proposed technicians would
not be fully trained and experienced repair personnel. Finally, we
concluded that the lack of resumes for the permanently assigned repair
personnel proposed by Consolidated did not, in any event, provide an
adequate basis for evaluation. Thus, we held that if there was any
waiver of the subject requirement by FCC, it was applied equally to ITS
and Consolidated.
In its request for reconsideration, Consolidated characterizes the
holding of our initial decision as erroneously envisioning a "hiatus"
(lapse of continuity of service) between the departure of the factory
trained repair personnel after the two week "break-in" period and the
arrival of the newly trained technicians. Consolidated states that in
its initial proposal it offered to assign two factory trained repair
technicians on-site and thereafter to hire two new technicians; the
former would stay on-site not just for the two-week period but "until
suitable replacements are trained." Consolidated also notes that key
personnel, including the two factory trained repair personnel, could not
be replaced without prior submission of their resumes and their approval
by the contracting officer. Thus, according to Consolidated, there was
no lapse of continuity of service and the RFP did not require resumes
for "future replacement key personnel." 1/
We reject these arguments. Our decision was not based on a perceived
lapse of continuity of service by Consolidated's factory trained repair
personnel. We simply found, and Consolidated does not dispute, that it
failed to provide in its proposal resumes for permanently assigned
repair personnel even though, because they were identified as key
personnel, the RFP required such resumes to be provided for evaluation.
We also again note, and Consolidated again does not dispute, that the
short period of time proposed by Consolidated for factory training of
these new technicians, and the accompanying proposed course schedule at
the factory, indicate that these proposed technicians would not be fully
trained and experienced repair personnel. Accordingly, we find no merit
to Consolidated's request for reconsideration of the finding of our
prior decision that neither ITS nor Consolidated met the RFP requirement
in question.
Our prior decision is affirmed.
Comptroller General
of the United States
1/ In its request for reconsideration, Consolidated also requests our
Office to examine in camera a line item price breakdown of ITS' offer
since Consolidated speculates that line items 1 and 2 of the ITS
proposal were unbalanced. This allegation by Consolidated is purely
speculative since Consolidated has not been provided any detailed price
information by FCC. In any event, we have examined the prices of both
offerors and we see no evidence of unbalancing.
Matter of: Consolidated Photocopy Company, Inc. and Downtown Copy
Center, A Joint Venture
File: B-225526
Date: March 20, 1987
Protester's contention that it was placed at a competitive
disadvantage because FCC waived material requirement for competitor is
denied where record shows that if there was any waiver it was applied
equally.
Consolidated Photocopy Company, Inc., and Downtown Copy Center, a
joint venture (Consolidated), protests the award of a contract to
International Transcription Services, Inc. (ITS), under request for
oroposals (RFP) No. 86-08, issued by the Federal Communications
Commission (FCC) for nonpersonal services and materials for the search,
retrieval and duplication of documents, and the distribution and sale to
the public of these documents which are maintained by the FCC and which
are releasable to the public under the Freedom of Information Act or FCC
regulations. Consolidated contends that the agency prevented it from
competing on an equal basis with ITS by effectively relaxing a
solicitation requirement for the benefit of ITS without informing
Consolidated. We deny the protest.
The RFP provided that award would be made to the responsible offeror
whose offer conforming to the solicitation is the most advantageous to
the government, cost or price, and other factors specified in the
solicitation considered, including an offeror's understanding of the
requirements, its technical approach, its corporate experience, and its
proposed personnel and their experience. The solicitation required,
among other things, that the successful contractor install, maintain,
and fully service copier-duplicating machines and microfiche
reader/printers on-site at various FCC locations. The solicitation
stated that machine malfunctions must be responded to within 2 working
hours and repairs completed within 8 working hours of notification of
machine failure.
The solicitation also contained (at paragraph C.6.5.5) the following
provision:
"Contractor shall provide a minimum of two experienced factory
trained repair personnel on-site at the Commission's Washington,
D.C. offices at all times. On call factory repair personnel
shall be provided by the contractor to serve the Laurel, MD and
Gettysburg, PA facilities. Back-up shall be provided by the
contractor through a service agreement with the vendor of the
equipment."
The solicitation also stated that "factory-trained repair personnel"
would be considered essential to the performance of the contract and
that the resumes of such personnel must be provided for evaluation. In
amendment 2 to the solicitation, the FCC emphasized that the demands
from the public for higher quality and greater reliability of copiers,
the intensity of use and abuse of copiers, the number of machines, and
other factors, necessitated these "qualified factory trained
technicians."
Four proposals were received by September 3, 1986, the initial
closing date for receipt of proposals. Discussions were held with the
offerors determined to be within the competitive range, and best and
final offers were received by the November 14 due date. The FCC
technical evaluators found the ITS proposal to be technically acceptable
and the proposal was later deemed to be the most advantageous proposal
received. Accordingly, FCC awarded the contract to ITS on November 18.
Consolidated filed a protest with the FCC, and the present protest
followed the FCC's denial of Consolidated's agency-level protest.
The FCC has not released any detailed information to the protester
concerning the evaluation of proposals because it believes this
information to be privileged. Consolidated nevertheless asserts that
ITS failed to propose "two experienced factory trained repair personnel"
as required by the RFP. Consolidated also asserts that ITS proposed
using Xerox personnel as repair persons instead of ITS' own personnel as
allegedly required by the RFP and that Xerox, as a subcontractor, failed
to commit itself to provide such repair personnel on-site.
Additionally, Consolidated questions whether ITS submitted resumes of
the Xerox personnel. In short, Consolidated contends that it was placed
at a competitive disadvantage because FCC waived these requirements for
ITS and the competition therefore was not conducted on an equal basis.
The FCC states that ITS "adequately addresse d " the requirement for
two experienced factory trained repair personnel in its proposal; that
Xerox, as a subcontractor, did commit itself to provide experienced
repair personnel on-site at all times; and that therefore the FCC did
not waive any mandatory technical requirements.
In order to resolve the matter concerning ITS' compliance with the
RFP requirement for factory trained repair personnel, we have reviewed
the proposals and evaluation materials in camera and will discuss to the
minimum extent necessary the portions of ITS' proposal which address
this requirement. Based on our review of the ITS proposal, we find the
following. Xerox did in fact submit a letter on behalf of the ITS
proposal in which Xerox committed itself to providing "fully trained,
qualified Xerox operators and technicians," and also to respond to all
service calls within 2 hours and to complete repairs within 8 hours as
required. In this regard, there is no RFP provision which would
preclude ITS from subcontracting this work to Xerox. However, the
resumes submitted by ITS for the on-site Xerox factory trained repair
personnel indicate that the proposed personnel are titled "technicians,"
rather than "repair personnel" or a similar title. The job description
for one of the technicians states only the following responsibilities:
"Supply, paper, toner/developer, all copiers each day and
assure adequate levels throughout the Commission day. Monitor
copiers each morning, make same copy and take reading and deliver
recorded results to Production Manager for delivery to Contracting
Office. Clear all jams, clean equipment, and assure all "down"
machines are responded to within two hours and fixed within eight
hours. Keep accurate log of all "down" time and preventative
maintenance time and resupply time. Also, record time equipment
is back in operation."
Similarly, the other technician is also essentially responsible for
cleaning and supplying the equipment only. There is no commitment by
Xerox to provide on-site repair personnel.
Based on our review of Consolidated's proposal, we find that it also
did not meet the requirement for experienced factory trained repair
personnel. In its best and final offer, Consolidated only proposed two
reasonably qualified factory trained repair personnel who would be
on-site for a two-week "break-in" period. After this initial period,
"newly trained technicians" would be provided and would be trained at
the factory so long as Consolidated has a "thirty-day lead time." These
replacement technicians were not yet hired or trained and thus no
resumes of their background and experience were provided in the offer.
The short period of time proposed for factory training, and the
accompanying proposed course schedule at the factory, indicate that
these proposed technicians will not be fully trained and experienced
repair personnel. In any event, the lack of resumes for the permanently
assigned repair personnel proposed by Consolidated does not provide an
adequate basis for evaluation. In the circumstances, we deny this
protest ground, since if there was any waiver of the subject requirement
it was applied equally to ITS and Consolidated.
Next, Consolidated complains that the contracting officer failed to
give the firm preaward notice of the award to ITS so that it could file
a timely size protest. However, we simply note that no notice is
required where, as here, the contracting officer determines in writing
that the urgency of the requirement necessitates award without delay.
See Federal Acquisition Regulation (FAR), 48 C.F.R. Sec. 15.1001(b) (2)
(1985). Finally, Consolidated also complains that the contracting
officer failed to give the firm appropriate po award notice of the award
to ITS. We note, however, that Consolidated filed a timely protest
within 10 calendar days of the award and that the agency has directed
ITS to cease performance under the contract. See 4 C.F.R. Sec. 21.4
(1986). We therefore, fail to see any prejudice to Consolidated even if
appropriate notice procedures were not followed by the agency.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Microrim, Inc.--Request for Reconsideration
File: B-225525.2
Date: January 14, 1987
Prospective subcontractor who protests restrictive specification is
not an interested party under GAO's Bid Protest Regulations, since it is
not a prospective offeror under the solicitation.
Microrim, Inc., requests reconsideration of the dismissal of its
protest under request for proposals (RFP) No. N66032-86R-0014, issued
by the Department of the Navy Automatic Data Processing Selection Office
for an indefinite quantity of computer equipment, associated software
and local area network components. Microrim's protest was dismissed
since it was not an interested party under our Bid Protest Regulations.
We deny Microrim's request for reconsideration and affirm our dismissal.
Microrim protested on November 28, 1986, that the RFP's requirement
that a particular brand name data base management system (DBMS) software
("dBase III") be provided under the contract, with no provision for
equal DBMS software. Microrim, who supplies the "Rbase" DBMS, protests
that the Navy has not adequately or properly justified this "sole
source" aspect of the procurement. Microrim also protests that the Navy
did not promptly provide it with the justification for the brand name
software. Microrim finally protests that the Navy is improperly
conducting this procurement under the Warner Amendment, 10 U.S.C. Sec.
2315(a) (1982), that generally exempts the procurement from the
requirements of the Brooks Act, 40 U.S.C. Sec. 759 (1982), governing
automatic data processing acquisitions by the government.
As indicated above, on December 2, 1986, our Office dismissed
Microrim's protest because it was found not to be an "interested party"
eligible to protest under our Bid Protest Regulations, inasmuch as
Microrim was not an actual or prospective offeror on the RFP. Under the
Competition in Contracting Act of 1984 (CICA), this Office only decides
protests filed by an "interested party," which CICA defines as an
"actual or prospective bidder or offeror whose direct economic interest
would be affected by the award of the contract or by failure to award
the contract." 31 U.S.C. Sec. 3551 (2) (Supp. III 1985); 4 C.F.R. Sec.
21.0(a) (1986); Environmental Systems Research Institute, B-219797,
Oct. 23, 1985, 85-2 C.P.D. P 449; Electronic Systems U.S.A., Inc.,
B-219754, Sept. 5, 1985, 85-2 C.P.D. P 274.
Microrim states that it is an established firm in the automatic data
processing field and an experienced government contractor, and that
since its protest of the specification requirements was filed prior to
the closing date for receipt of proposals, it cannot be said that it is
not a prospective offeror on this RFP. Microrim claims that it fully
intended to submit an offer on the procurement but could not because of
the RFP's sole-source requirement that was the basis for its protest.
Moreover, Microrim claims that it could have received an award under the
RFP for just the DBMS, since the RFP did not include an "all or none"
requirement.
However, contrary to Microrim's contention, both the RFP and the
Commerce Business Daily announcement of this procurement make it clear
that only one award for the complete system of end user computer
equipment and software would be made, and that no separate award for the
DBMS software was contemplated. Furthermore, on page six of its initial
protest to this Office, Microrim stated that its interest in this
procurement was as a potential subcontractor. Nowhere in its initial
protest does Microrim contend that it intended to propose on the entire
system being procured under the RFP of which the DBMS is a small part.
A prospective subcontractor or supplier does not have the requisite
interest to be considered an interested party to protest under CICA
since they are not prospective or actual offerors. See Environmental
System Research Institute, B-219797, supra (software supplier protesting
software requirements in a procurement of computers and related software
is not an interested party under our Office's Bid Protest Regulations,
since it is not an actual or prospective offeror, but only a supplier to
firms capable of competing for the entire project).
The decisions of our Office cited by the protester to support its
position that subcontractors and suppliers are interested parties under
our Bid Protest Regulations where they have a direct economic interest,
Coulter Electronics, Inc., B-216800, Apr. 23, 1985, 85-1 C. P.D. P 463,
and Porta-Fab Corp., B-213356, May 7, 1984, 84-1 C.P.D. P 511, concern
protests filed under our Bid Protest Procedures that were in effect
prior to the effective date of CICA. Since CICA's definition of an
interested party plainly requires protesters to be actual or prospective
offerors, these pre-CICA cases are inapplicable, inasmuch as our Office
is precluded by the terms of CICA from reviewing protests by potential
subcontractors. See Julie Research Laboratories, Inc., B-219370, Aug.
16, 1985, 85-2 C.P.D. P 185, aff'd B-219370.2, Sept. 17, 1985, 85-2
C.P.D. P 294.
The decision of the General Services Board of Contract Appeals
(GSBCA) cited by the protester, Computervision Corp. (GSBCA No. 8744-P,
Nov. 10, 1986), is also inapplicable, even though the definition of
interested party in CICA for GSBCA's resolution of automatic data
processing bid protests is identical to that applicable to our Office.
Compare 31 U.S.C. Sec. 3551 (2) to 40 U.S.C. Sec. 759(h)(9)(A) (Supp.
III 1985). In that decision, there was no indication that the protester
of the solicitation requirements, who was found by the GSBCA to be an
interested party, was a mere supplier or subcontractor; rather it
appears that the protester in that case was a prospective offeror.
Accordingly, Microrim's request for reconsideration is denied.
Harry R. Van Cleve
General Counsel
Matter of: McCarthy Land Company--Reconsideration
File: B-225524.2
Date: March 2, 1987
Dismissal of protest as untimely is affirmed where protester was
aware of agency's objections to protester's offer prior to receipt of
notice rejecting offer, and did not protest within 10 working days after
notice of rejection.
McCarthy Land Company requests reconsideration of our dismissal of
its protest of a contract award to Charles Johnson under a Department of
Agriculture solicitation to lease office space in Minnesota. We
dismissed the protest as untimely filed. We affirm the dismissal.
Under our Bid Protest Regulations, 4 C.F.R. Sec. 21.2(a)(2) (1986), a
protest must be filed in our Office no later than 10 working days after
the basis of protest was, or should have been, known. McCarthy's
protest submission indicated that McCarthy received written notice of
the rejection of its offer, and of the October 15, 1986, award to
Johnson at a higher price, on November 4. Since McCarthy's protest
challenging the propriety of the award was not received in our Office
until November 28, more than 10 working days later, we determined that
it was untimely.
McCarthy requests reconsideration on the ground that it did not know
the bases of protest on November 4, because the notice it received did
not explain the reasons for rejection of the offer. McCarthy claims it
was not on notice of its protest bases until November 20, when the
contracting officer allegedly refused to disclose the reasons for
rejecting the offer. At that point, McCarthy protested based on what it
suspected (apparently from October conversations with agency contracting
personnel) were the reasons for the rejection, i.e., the agency
preferred a new building in a downtown location, and was biased against
McCarthy.
While we agree with McCarthy that the mere suspicion of protest
grounds does not necessarily constitute knowledge of those grounds, the
record indicates that McCarthy actually had reason to know the bases for
the rejection on November 4. In this regard, in an October 17 letter
from McCarthy to Agriculture, McCarthy discussed its conversation of
that same date with Agriculture contracting personnel apparently
concerning the point scoring of the offers. McCarthy stated in this
letter that it is aware the agency was "still trying to go back to the
new building" (which McCarthy seemingly knew was in a downtown location,
and went on to argue that its building is "the equivalent of a new
building." This letter shows that McCarthy knew in October the reasons
Agriculture did not prefer its building, so that McCarthy reasonably
should have known on November 4 that these same reasons were the basis
for the rejection of its offer. Thus, since McCarthy's protest was not
received within 10 working days after November 4, it was untimely.
Our dismissal of the protest is affirmed.
Harry R. Van Cleve
General Counsel
Matter of: Carter Chevrolet Agency, Inc.
File: B-225522
Date: February 24, 1987
1. Award of a fixed-quantity contract to the low priced offeror for a
quantity less than that specified in the solicitation does not
constitute discussions with that offeror which would necessitate the
holding of similar discussions with the other higher-priced offerors.
2. Protest against specification modification filed more than 10 days
after protester knew the basis for protest is untimely and will not be
considered on the merits.
Carter Chevrolet Agency, Inc. (Carter), protests the award of a
contract for 14 light trucks to JKJ Chevrolet (JKJ), under request for
proposals (RFP) No. FCAP-A1-71922-N-7-17-86, issued by the General
Services Administration (GSA). Carter asserts that GSA amended the RFP
after best and final offers had been received--to reduce the award
quantity--and allowed JKJ to modify its proposal without advising other
offerors of the change or providing them with an opportunity to revise
their proposals. Carter also alleges that JKJ was permitted to offer
under more relaxed specifications than was Carter.
We find the protest without merit.
The RFP was issued by GSA, on behalf of the Navy, on an emergency
basis and contained four line items totaling 18 light trucks to be
delivered to four locations. The RFP provided for award to be made on
an item-by-item basis. The closing date for initial proposals was
August 12, 1986. Four offers were received, including Carter's, which
was submitted on an all-or-none basis, and JKJ's, which contained no
such limitation, but which did take exception to three of the RFP
specifications. GSA called for best and final offers to be submitted by
October 9, 1986.
On October 7, the GSA contract specialist telephoned the four
offerors and advised them that the specifications had been relaxed in
four respects: (1) 95-inch overall vehicle body width was made
acceptable; (2) a 100-mile limitation on driveaway delivery was
deleted, (3) highway tread tires were made acceptable, and (4) a special
traction requirement for the rear drive wheels was canceled. These
changes resulted in JKJ's three exceptions to the specifications being
resolved. Written verification of the modification was transmitted to
all four offerors on the same day.
Carter's best and final offer, on an all-or-none basis, per vehicle
was $26,200 for item 1, $26,297 for item 2, $27,099 for item 3, and
$27,321 for item 4. Two of the other three offerors had submitted
offers which were lower priced for all items than Carter, and the third
offer was lower than Carter on three of the four items. JKJ's offer,
which was not all-or-none, was lowest for items 1, 2, and 4. On October
9, the Navy advised GSA that due to the unavailability of funds, none of
the three vehicles specified under item 3 could be purchased, and item 4
was reduced from two vehicles to one vehicle. Because of the exigent
nature of the procurement, GSA determined that it was not in the
government's best interest to reopen discussions. See Federal
Acquisition Regulation (FAR), 48 C.F.R. Sec. 15.611 (c) (1986). Award
was made to JKJ on October 10 for all 14 of the tricks under the
remaining items. Carter learned of the award in a Commerce Business
Daily notice on November 25, and protested to our Office on November 26.
As a preliminary matter, GSA contends that Carter is not an
interested party to protest the award under our Bid Protest Regulations,
4 C.F.R. Sec. 21.1 (a) (1986), because there were intervening lower
offerors for all the items, and Carter would not be in line for award
even if its protest were sustained. However, Carter is not merely
protesting the award to JKJ; rather Carter is asserting that it was
denied an opportunity to compete on an equal basis with JKJ, and
requesting resolicitation as relief. If Carter's protest were
sustained, the requested relief would give Carter another opportunity to
compete. Under these circumstances, Carter has a sufficient economic
interest to be considered an interested party under our Regulations.
General Electrodynamics Corp., B-221347.2, B-213477.3, May 13, 1986,
86-1 C.P.D. P 454.
Carter contends that GSA's reduction in the total quantity of
vehicles shows GSA improperly conducted discussions with JKJ, without
affording the other offerors the same opportunity.
Carter also points to a letter to GSA from JKJ, dated October 9,
which states that: "we will accept a contract on all items awarded," as
evidence that GSA engaged in discussions with JKJ after the submission
of best and final offers. GSA explicitly denies that it engaged in any
discussions with JKJ after best and final offers were submitted. There
is no evidence in the record that JKJ's October 9 letter was in response
to any inquiry from GSA. Moreover, paragraph 17 of the solicitation
provisions (GSA form 3501, which was incorporated hy reference under the
RFP) explicitly reserved to the government the right to make an award on
any item for a quantity less than the quantity offered, at the unit
price offered, unless the offeror specified otherwise. Since JKJ's
offer, unlike Carter's, did not contain an allor-none qualification,
there was no necessity for JKJ to add this provision to enable GSA to
make the award on a lesser quantity than was specified under the RFP.
Carter also disputes GSA's statement of what information was conveyed
by GSA to Carter's representative during the October 7 telephone call in
which GSA amended the RFP. In particular, Carter asserts that it was
advised of the first three specification relaxations, but was not told
that the special traction requirement was being deleted. In support of
this contention, Carter has submitted a copy of two written follow-up
messages which it received from GSA after the closing date, the first of
which states that the special traction rear axle is required. The
second message, which is designated as a corrected message, indicates
that the special traction rear axle is not required. In addition,
Carter asserts that oral amendment of the RFP specifications was
improper.
Carter's contentions in this regard are untimely. Our Bid Protest
Regulations require a protester to file its protest not later than 10
days after the date on which the basis of protest was known or should
have been known. 4 C.F.R. Sec. 21.2(a) (2). Since Carter states that
it did not receive the two written confirmation messages until October
14, after the October 9 deadline for submission of best and final
offers, Carter knew that the modification had been made orally rather
than in writing by October 8. On October 14, Carter learned that the
written modification contained the alleged new fourth item, that is, the
special traction relaxation, which Carter asserts had not been conveyed
in the telephone amendment. Since Carter's protest was not filed in our
Office until November 26, more than 10 days later, these allegations are
untimely and not for consideration. We note, however, that under the
FAR, 48 C.F.R. Sec. 15.606(a), oral modifications followed by written
confirmation, such as were effected here, are explicitly permitted where
time is of the essence.
The protest is denied in part and dismissed in part, and the claim
for proposal oreparation costs and bid protest costs is also denied.
Harry R. Van Cleve
General Counsel
Matter of: Cryogenic Consultants, Inc.
File: B-225520
Date: March 4, 1987
1. Award of contract under a defective solicitation is proper where
the record clearly shows that the award under the solicitation as issued
serves the actual needs of the government and does not prejudice the
other competitors.
2. Protest is denied where there is no indication that alleged errors
in calculating protester's total offered price adversely affected the
protester's competitive standing.
3. Procuring agency properly did not evaluate cost of upgrading
equipment where request for quotations did not provide for such
evaluation.
4. Protest that agency did not include protester on its quoters' list
is denied where agency gave protester opportunity to quote.
5. Protest that the request for quotations for cryogenic refrigerator
system unduly restricts competition must be filed before the closing
date for receipt of quotations.
6. Where there is no evidence in the record, other than the
protester's bare allegation, that the contracting agency conducted the
procurement in a manner that favored the awardee, the protester has not
met its burden of affirmatively proving its case. Unfair or prejudicial
motives will not be attributed to procurement officials on the basis of
inference or supposition.
Cryogenic Consultants, Inc. (CCI), protests the award of a contract
for a cryogenic refrigerator system to Koch Process Systems, under
request for quotations (RFQ) No. 2-LXE-0351G, issued by the Los Alamos
National Laboratory (LANL). LANL is a Department of Energy facility
operated by the University of
California pursuant to a management and operating contract. CCI
protests that its proposal was improperly evaluated and that LANL was
biased towards Koch.
We deny the protest in part and dismiss it in part.
An RFQ was issued on July 31, 1986, to four potential sources that
LANL considered capable of supplying the refrigerator system. The
original quote due date of August 29, 1986, was extended to September
22, 1986, when two sources, Koch and CVI, Inc., requested additional
time. On September 22, 1986, CCI contacted LANL and asked for the
opportunity to quote. LANL agreed to review an unsolicited proposal,
which LANL received on October 2, 1986. Based on its review, LANL sent
a complete RFQ package to CCI on Octoher 14, 1986, and extended the RFQ
due date to October 22, 1986. Proposals from Koch, CVI and CCI were
received by the due date. LANL evaluated total quotations at $357,350
for Koch, $377,956 for CCI and $436,306 for CVI. LANL awarded a
contract to Koch as the low quoter.
CCI protests that when evaluating proposals, LANL penalized CCI by
adding $10,466, the price quoted as an option by CCI for a vacuum
diffusion pump, to CCI's system price. CCI argues that because a vacuum
diffusion pump was never mentioned as a requirement in the
specification, adding the cost for the pump to CCI's evaluated price is
without justification.
LANL reports that although a vacuum system was not mentioned in the
RFQ, cryogenic refrigerator systems must be equipped with vacuum systems
that include vacuum pumps. According to LANL, vacuum systems are used
to evacuate the cold box after a vacuum has been broken either
intentionally or unintentionally and to remove gases entering the vacuum
space either through outgassing or small leaks. Of the three quotes
received by LANL, vacuum systems were included in the basic price of two
quotes, and given as an option in the CCI quote. LANL maintains that
since a vacuum system is required to meet its needs, it was proper to
include the CCI vacuum system option when pricing CCI equipment.
Even though the specification should have provided for a vacuum
diffusion pump, the award of a contract under the solicitation is proper
if the record clearly shows that the award under the solicitation as
issued serves the actual needs of the government and does not prejudice
the other competitors. See GAF Corp., et al., 53 Comp. Gen. 586 (1974);
Dantronics Inc., B-222307, June 30, 1986, 86-2 C.P.D. P 17. The record
here shows that the award to Koch under the solicitation serves the
actual needs of the government for evacuating the cold box. Since the
solicitation understated rather than overstated the agency's needs,
other offerors would not be prejudiced by an award to Koch based on
their low offers which included the price of the pump. LANL used the
price CCI actually quoted for the pump as an option in determining that
Koch was the low quoter, an CCI does not argue that it would have
offered the pump at a lower price if LANL had more carefully stated its
needs and required characteristics.
CCI also complains that the evaluators assumed without basis that its
proposal did not include a required heater. CCI states that it never
said a heater would not be furnished an that the heater was included in
its equipment offer, although the heater was not specifically mentioned
in its proposal. CCI notes that it stated in its proposal transmittal
letter that the proposal was in total compliance with the specification.
Our review of the record indicates that CCI was not prejudiced by
LANL's alleged misinterpretation of CCI's proposal. LANL reports that
although it appeared that CCI's proposal offered a slide valve
adjustment rather than the required electric heater, it did not include
the cost of the heater when evaluating the cost of proposals. Assuming
CCI's offer included the electric heater, CCI's offer was not low.
Since price was the determinative factor and there is no indication that
CCI's competitive standing was adversely affected, we deny CCI's protest
on this basis. See Nickum & Spaulding Associates, Inc., B-222468, June
10, 1986, 86-1 C.P.D. P 542.
CCI also protests that LANL should have evaluated CCI's proposal on
the basis of 10 days start-up service, not 30 days, because LANL
evaluated Koch's proposal on the basis of 10 days start-up supervision,
and the two systems are fundamentally similar. CCI points out that the
RFQ specifically states that start-up supervision shall be quoted on a
per diem basis and that the number of days for installation supervision
will be determined at the time of contract award. Since CCI furnished a
per diem rate of $583, CCI argues its start-up services for 10 working
days would cost $5,830 as opposed to the $17,490 cost for 30 days
service evaluated by LANL.
Even accepting CCI's argument that LANL should have evaluate the Koch
proposal and the CCI proposal using the same number of days for start-up
services, we do not find that CCI suffered competitively from LANL's
evaluation. If both Koch and CCI were evaluated on the basis of 10 days
start-up service, Koch's evaluated price of $359,203 ($357,350 plus
$1,853 freight) would remain lower than CCI's offer of $366,296. Koch's
price on the basis of 30 days start-up service would also be lower than
CCI's price on the basis of 30 days service. Since the protester has
shown no prejudice we deny its protest on this basis. See Pitney Bowes,
B-213691, Apr. 24, 1984, 84-1 C.P.D. P 472.
CCI also alleges that LANL added $20,000 to its price to account for
an ambiguously stated test requirement. However the record shows that
LANL clarified for CCI a specification requirement for testing at the
vendor's facility before shipment, and that CCI agreed to increase its
price by $5,000 to account for the test requirement. LANL included
$5,000 in CCI's evaluated price, not $20,000.
CCI also protests that LANL did not give it credit for offering a
base price which included features which Koch's base price did not. CCI
notes that vendors were asked to provide an estimate of the cost to
produce upgraded features, which its base system already included and
for which Koch would charge an additional $240,500.
For LANL to evaluate the cost of upgrading the equipment for award
purposes, the RFQ would have had to specifically provide for such
evaluation. See AMS Manufacturing, Inc.-- Reconsideration, B-203589.2,
Nov. 2, 1981, 81-2 C.P.D. P 371. Since the RFQ did not provide for
evaluating the costs to produce upgraded features, LANL properly did not
evaluate such costs.
CCI contends that it was not given a fair chance to participate in
the procurement due to the personal preferences of one or more of the
technical staff for Koch. CCI argues that it was initially excluded
from the solicitation, and that the technical specification was heavily
slanted toward a Koch Process system refrigerator. CCI believes
subsequent procurement actions were aimed at ensuring Koch was the
successful vendor.
We fail to see how CCI was prejudiced by its exclusion from the
original quoter's mailing list. When CCI notified LANL of its interest
in quoting, LANL gave CCI an opportunity to quote. Since prejudice is
an essential part of a protest, this aspect of CCI's protest is without
merit. See Micro Research, Inc., B-220778, Jan. 3, 1986, 86-1 C.P.D. P
9.
To the extent CCI complains that the specification was unduly
restrictive, the protest is untimely. Our Bid Protest Regulations
require that a protest of solicitation improprieties apparent prior to
the closing date for the receipt of proposals (or quotations) be filed
prior to the time for closing. 4 C.F.R. Sec. 21.2(a) (1) (1986);
American Ball Screw, B-223915, Dec. 10, 1986, 66 Comp. Gen. , 86-2
C.P.D. P 664. Since the closing date was October 22, 1986, and the
protest was not filed until November 26, we will not consider this
issue. We note that the argument that a specification was "written
around" a competitor's product is not by itself a valid basis of
protest. See California Mobile Communications, B-223614.2, Aug. 19,
1986, 86-2 C.P.D. P 200.
We find no evidence in the record, other than CCI's bare allegations,
that LANL conducted the procurement in a manner that favored Koch. The
protester has the burden of affirmatively proving its case and unfair or
prejudicial motives will not be attributed to procurement officials on
the basis of inference or supposition. Institute for Advanced Safety
Studies, B-221330, Apr. 16, 1986, 86-1 C.P.D. P 72.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
Matter of: Union Natural Gas Company
File: B-225519.4
Date: June 5, 1987
1. Contracting officer had a reasonable basis to cancel a negotiated
procurement after initial proposals had been submitted, where request
for proposals (RFP) to fulfill agency's natural gas requirements at
military base for a 2-year period required offerors to provide monthly
cost estimates but did not contain monthly gas consumption estimates and
the RFP did not correctly state how proposed costs would be evaluated.
2. Protest that the contracting officer canceled a negotiated
procurement in bad faith is denied, where the protester has provided no
evidence to support its allegation, there is no indication of any bad
faith actions in the record, and the cancellation, in fact, had a
reasonable basis.
3. Protester's claim for damages is denied where the contracting
officer had a reasonable basis to cancel a negotiated procurement.
Union Natural Gas Company protests the Army's cancellation of request
for proposals (RFP) No. DABT39-85-R-0203, to provide natural gas to Fort
Sill, Oklahoma. Union contends that the contracting officer's decision
to cancel the solicitation after initial proposals had been submitted
was made in bad faith and, therefore, Union should be awarded the
contract on the basis of its initial proposal "as the low bidder meeting
all requirements of the RFP." Union also requests that our Office award
it costs in accord with section 21.6(d) of our Bid Protest Regulations,
4 C.F.R. part 21 (1986).
We deny the protest and the claim.
The RFP was issued on September 24, 1985, and, as amended, required
initial proposals to be submitted by June 13, 1986. The RFP
contemplated award of a contract to supply Fort Sill's natural gas
requirements over a 2-year period beginning October 1, 1986. The
solicitation reserved to the Army the right to make award on the basis
of initial proposals and stated that an initial offer should, therefore,
contain the offeror's best terms from a cost or price and technical
standpoint. Offerors were required to submit with proposals "estimated
monthly costs based on estimated quantities and the proposed rates and
charges based thereon." Concerning evaluation of proposals, the RFP
provided:
"Proposals shall be evaluated on total cost with the ability to
perform. Total cost will be calculated using estimated quantities
over an anticipated period of service. Ability to perform will be
evaluated on adequacy and reliability of supply facilities and
source."
Four proposals were received by the closing date. On the basis of
the initial proposals, without holding discussions, the contracting
officer selected Arkla, Inc., for award because its proposal was
acceptable and represented the lowest total cost to the government. The
contracting officer sent his award recommendation and a proposed
contract with Arkla to the Deputy Army Power Procurement Officer for
approval on September 2, 1986. In a telephone conversation on September
5, the contracting officer told Union that Arkla was the proposed
awardee and revealed Arkla's proposed rates to Union. By letter of the
same date, Union protested to the Army against the proposed award to
Arkla, based on numerous alleged procurement irregularities. By letter
of November 21, Union protested on the same bases to our Office.
Ultimately, on February 2, 1987, the Deputy Army Power Procurement
Officer disapproved the proposed contract with Arkla, in part because
Arkla's proposal and its rates were conditioned upon obtaining the
Oklahoma Corporation Commission's approval of a special contract between
Arkla and a subcontractor that would transport the gas through the Arkla
system/facilities. This official also determined that the RFP was
deficient because it did not contain any estimates of Fort Sill's
anticipated monthly gas consumption and did not state how proposal
prices would be evaluated, and because the contracting officer's review
of proposals showed that all proposals contained deficiencies. In view
of the fact that Arkla's rates had been revealed, he determined that the
requirement should be resolicited. Accordingly, on March 20, the Army
canceled the RFP with the intention of issuing a new solicitation that
states how the proposals will be evaluated. Because the RFP was
canceled, our Office dismissed Union's protest of the proposed award to
Arkla as academic on March 23.
Union now protests that the contracting officer canceled the
solicitation in bad faith to keep from answering the charges made by
Union in its protest to the Army. Union also alleges that the
contracting officer has engaged in numerous other bad faith practices,
and requests that our Office investigate to ascertain what other
violations of procurement law may have taken place in other unrelated
procurements.
In a negotiated procurement, the contracting officer has broad
discretion in deciding whether to cancel a solicitation. The
contracting officer need only have a reasonable basis to do so, as
opposed to the cogent and compelling reason required for cancellation of
a solicitation after sealed bids have been opened. Technology Dynamics,
Inc., B-225386, Dec. 11, 1986, 86-2 C.P.D. P 669. We have recognized
that a solicitation properly may be canceled where the record shows that
the solicitation specifications may restrict competition or are
otherwise deficient. Id. at 3. We have also recognized that a
solicitation that does not set forth a common basis for evaluating
offers, which ensures that all firms are on notice of the factors for
award and can compete on an equal basis, is materially deficient and
properly may be canceled. See North-East Imaging, Inc., B-216734, Aug.
28, 1985, 85-2 C.P.D. P 237, and Honeywell, Inc., B-210000, Apr. 22,
1983, 83-1 C.P.D. P 445, both of which demonstrate that a flawed
evaluation scheme amounts to a cogent and compelling reason--a more
stringent standard than is applicable to the present negotiated
procurement--to cancel an invitation for bids after bids have been
opened.
The contracting officer's cancellation in the present case was
reasonable. The RFP provided only the Army's estimate of the maximum
annual consumption of natural gas at Fort Sill, and the actual gas
consumption figures for fiscal years 1983, 1984, and 1985. Nowhere in
the solicitation did the Army provide any estimate of Fort Sill's
monthly gas usage, so that each offeror was left to estimate monthly gas
usage on its own. This situation was significant with respect to how
offerors would calculate their rates. For example, one offeror might
base its estimates on the maximum annual figure stated in the RFP, while
another offeror might base its estimates on the average consumption from
any 1 or all of the 3 fiscal year figures cited. We note that Union
itself proposed different unit prices depending upon how much gas would
be consumed in a given month. In this regard, we often have pointed out
that estimates of quantities to be ordered under a requirements contract
are essential to ensure both intelligent price proposals and award at
the lowest cost to the government. See, e.g., Air Life, Inc., B-214823,
Oct. 30, 1984, 84-2 C.P.D. P 478.
Moreover, the RFP did not even reflect how offers actually were
evaluated. The record shows that the Army evaluated proposals by using
fiscal year 1986 monthly requirements but, as indicated above, these
were not mentioned anywhere in the solicitation. It is fundamental that
offerors should be advised of the basis on which their proposals will be
evaluated. See Tidewater Health Evaluation Center, Inc., B-223635.3,
Nov. 17, 1986, 86-2 C.P.D. P 563.
Accordingly, the RFP clearly was deficient in the above respects.
The protest of the Army's decision to cancel it therefore is denied.
A protester who alleges bad faith on the part of a procurement
official bears a heavy burden of proof. Seaward International, Inc.,
B-224497, Oct. 31, 1986, 66 Comp. Gen. , 86-2 C.P.D. P 507 at 3.
Here, Union has provided no evidence to support its allegation and there
is no indication of any actions showing bad faith by the contracting
officer in the record. In view of our finding that the contracting
officer had a reasonable basis to cancel this RFP, the protest is denied
on this issue. Technology Dynamics, Inc., B-225386, supra.
Concerning the request that we investigate other unrelated
procurements to ascertain whether other violations of procurement law
took place, we point out that we do not conduct investigations as part
of our bid protest function in response to a protester's speculative
assertions. Todd Logistics, Inc., B-203808, Aug. 19, 1982, 82-2 C.P.D.
P 157 at 8.
The protest is denied, and as the protest is without merit, the claim
for costs also is denied. COMSAT International Communications, Inc.,
B-223953, Nov. 7, 1986, 86-2 C.P.D. P 532 at 6.
Harry R. Van Cleve
General Counsel
Matter of: Arkla, Inc.
File: B-225519.3
Date: April 3, 1987
Protest that solicitation is ambiguous is dismissed as academic where
contracting agency canceled solicitation as requested by protester.
Claim for proposal preparation costs is also dismissed since protest has
not been considered on the merits.
Arkla, Inc. protests that solicitation No. DABT39-85-R-0203, issued
by the Department of the Army for proposals to supply natural gas
service to Fort Sill, Oklahoma, should be canceled because it contains
ambiguous estimates of the monthly consumption of natural gas at Fort
Sill. Alternatively, the protester contends that the Army improperly
rejected Arkla's proposal and that the firm is entitled to award of the
contract under the solicitation. Arkla also requests reimbursement of
its proposal preparation expenses, if it is not awarded the contract.
We dismiss the protest and the claim.
The Army has advised our Office that the solicitation was canceled on
March 20, 1987, in part because the monthly consumption estimates were
inadequate. The Army also indicated that a solicitation will be issued
for this requirement at a future date. Since the solicitation has been
canceled as requested by Arkla in its protest, Arkla's protest is
academic and will not be considered on its merits. Bru Construction
Co., Inc., B-221383.2, May 27, 1986, 86-1 C.P.D. P 487. The
protester's claim for proposal preparation costs is also dismissed,
because our Office will not consider a a claim for such costs which is
submitted with a protest that is not considered on the merits. Federal
Electric Corp., B-220418.2 Apr. 1, 1987, 87-1 C.P.D. P .
Robert M. Strong
Deputy Associate
General Counsel
Matter of: Electrographic Corporation--Request for Reconsideration
File: B-225517.2
Date: June 8, 1987
1. General Accounting Office (GAO) affirms its prior decision
sustaining protest that awardee's bid was nonresponsive since section of
solicitation schedule which awardee had deleted in its bid by drawing a
series of diagonal lines across it contained a material requirement and
the deletion of that requirement indicated the bidder was not bound to
perform work.
2. Even though GAO recommends that award be made to the protester for
the remaining period of the contract term, the protester's cost of
filing and pursuing its protest may be allowed since the protester has
lost the opportunity to perform more than 6 months of the contract
period.
Electrographic Corporation requests that we reconsider our decision
in Record Press, Inc., B-225517, Mar. 20, 1987, 87-1 C.P.D. P 321. In
that decision, we sustained a protest filed by Record Press, Inc.,
concerning a contract awarded to Electrographic by the Administrative
Office of the United States Courts under invitation for bids (IFB) No.
NYSAC87-01. In our prior decision, we concluded that Electrographic's
bid should have been rejected as nonresponsive, and we recommended that
the contract be terminated and reawarded to Record Press.
We affirm our prior decision and, in addition, we find the protester
entitled to the costs of filing and pursuing its protest, including
reasonable attorney's fees.
Preliminarily, we note that Electrographic did not participate in the
prior bid protest in any way. Ordinarily, under Sec. 21.12(a) of our
Bid Protest Regulations, an interested party who was aware of a protest,
but chose not to participate in it, is not entitled to request
reconsideration. However, in its request for reconsideration,
Electrographic states that the Administrative Office of the United
States Courts failed to notify Electrographic of the protest and did not
furnish it copies of the protest submissions as required by our Bid
Protest Requlations, 4 C.F.R. Sec. 21.3(a) (1986). The agency has
advised us that it did, in fact, fail to advise Electrographic of Record
Press' protest. Since this is Electrographic's initial opportunity to
participate, we will consider the substance of its arguments. See,
e.g., Meridian House International--Request for Reconsideration, 64
Comp. Gen. 704 (1985), 85-2 C.P.D. P 93.
The solicitation under which the contract was awarded called for bids
to print slip opinions for the United States Court of Appeals for the
Second Circuit. The initial contract period was for 1 year with two
1-year options to renew.
Section B-9 of the IFB requested bids for work which would be
required on a "rush" basis. Subsections B.9.1 through B.9.4 requested
bids for specified "rush" situations, varying as to when the copy would
be received and when the slip opinions must be delivered. In each of
the different situations, the subsections contained language permitting
bidders to bid on either a per page basis or, alternatively, as a
percentage of their regular rate. A notation at the bottom of section
B.9 stated, "FOR ITEMS B.9.1 To B.9.4, STRIKE OUT ALTERNATIVE NOT
ACCEPTED." This notation clearly instructed each bidder to either strike
out the language concerning submission of a bid on a per page basis, or,
alternatively, to strike out the language concerning submission of its
bid as a percentage of its basic rate--depending on how each bidder
chose to submit its bid.
In its response to the solicitation, Electrographic drew a series of
diagonal lines through section B.9 in its entirety. No other entry for
this section was made.
In our prior decision we concluded that, in lining out section B.9,
Electrographic effectively declined to bid on this section and thus did
not bind itself to perform any "rush work" under the contract. We
applied the well-settled rule that a bid is nonresponsive if it does not
offer to perform all of a solicitation's requirements--unless a notation
is made which clearly indicates the bidder's intent to provide the
requirement at no additional charge. See Syracuse Safety-Lites, Inc.,
B-222640, July 1, 1986, 86-2 C.P.D. P 3.
Since Electrographic did not submit a price for performing the "rush
work" requirements and also did not make any other notation indicating
its intent to perform that work at no additional charge, we concluded
that the agency should have rejected Electrographic's bid as
nonresponsive.
In its request for reconsideration, Electrographic does not dispute
our conclusion that its offer did not bind it to perform "rush work"
under the contract. Rather, it argues that the express terms of the IFB
permitted it to submit a "no bid" on the "rush work" requirements;
alternatively, it maintains that the solicitation was ambiguous and
therefore, resolicitation is appropriate. We do not find either
argument persuasive.
Initially, Electrographic argues that, in lining out section B.9, it
was merely complying with the notation at the bottom of section B.9
which instructed bidders to ". . . STRIKE OUT ALTERNATIVE NOT
ACCEPTED." As discussed above, that notation directed the bidder to
strike out the method of submitting its bid which it chose not to
use--not to eliminate selected portions of the IFB's requirements. We
find no basis for Electrographic's argument that the notation permitted
it to line out the entire section.
Electrographic also argues that a provision of the Federal
Acquisition Regulation (FAR), 48 C.F.R. Sec. 52.214-10 (1985), which was
incorporated into the solicitation, permitted Electrographic to submit a
"no bid" on section B.9. This provision states in pertinent part:
"... Unless otherwise provided in the Schedule, bids may be
submitted for quantities less than those specified. The
Government reserves theright to make an award on any item for a
quantity less than the quantity offered, at the unit prices
offered, unless the bidder specifies otherwise in the bid." 48
C.F.R. Sec. 52.214-10(c). (Underlining in original.)
In essence, Electrographic argues that, under this provision it was
permitted to bid on less than all of the line items, and thus, its offer
was responsive despite its failure to bid on "rush work."
The agency, however, states that multiple awards were not
contemplated under this IFB. Our following review of the specific tasks
called for, along with our analysis of the IFB as a whole, supports the
agency's position. The tasks involved here are so interrelated and
cumulative in nature as to preclude severing the "rush work"
requirements from the rest of the contract. Accordingly, we again
conclude that the "rush work" provisions were material to the contract
and Electrographic's "no bid" on those requirements rendered its bid
nonresponsive.
Section F.4 of the IFB states that the contractor is required to
print each opinion as a separate booklet, with pages for the entire
court term numbered consecutively. This section also provides that if a
preceding opinion ends with an oddnumbered page, the intervening even
page will be omitted and the succeeding opinion will begin with an
odd-numbered page. Clearly, the tasks called for in this section
require the contractor to know the last page number used in the
preceding opinion--information which would not be immediately accessible
with more than one contractor performing the printing work. IFB
sections B.5 and B.6 require the contractor to accumulate errata
corrections, arranged in page number sequence, corresponding to the
opinion page numbers against which corrections were made, until a
complete opinion-sized page can be composed and printed. Again, having
more than one contractor performing the printing renders the
accumulation requirements difficult to perform. Finally IFB sections
B.16 and B.17 require the contractor to arrange the opinions into
"daily" and "weekly" sets and mail the sets to designated recipients.
Here again, the nature of the function performed requires that a single
contractor do the work.
We conclude that the cumulative nature of the required tasks, along
with their interdependency, precludes awarding normal printing work to
one contractor and "rush work" to another. Such an arrangement would be
extremely impractical as well as uneconomical. Accordingly, based on
the specific work required by this IFB, we conclude that multiple awards
under this contract were neither contemplated nor permissible. We
believe the unique, inseverable nature of the tasks involved distinguish
this case from those where we have held that the incorporation of FAR,
48 C.F.R. Sec. 52.214-10, indicates that multiple awards are
permissible. See, e.g., Goodman Bail, Inc., B-217318, Mar. 25, 1985,
85-1 C.P.D. P 348.
Finally, Electrographic argues that the notation at the bottom of B.9
together with the incorporated FAR provision discussed above, created an
ambiguity in the IFB which was not apparent to Electrographic until
after it learned of our decision. Electrographic argues that under its
interpretation of the IFB, the IFB provisions permitting the striking
out of alternatives and permitting bidders to bid quantities less than
those specified reasonably allowed Electrographics to submit a "no bid"
on the rush work requirement. Electrographic maintains that its
interpretation of the IFB was reasonable and, therefore, if our contrary
interpretation is also reasonable, the IFB is, at best, ambiguous.
Electrographic argues that, based on this ambiguity, the requirement
should be resolicited rather than awarded to Record Press.
It is well-settled that an ambiquity exists only where two or more
reasonable interpretations of a solicitation are possible. See Energy
Maintenance Corp., B-223328, Aug. 27, 1986, 86-2 C.P.D. P 234; EMS
Development Corp., B-207786, June 28, 1982, 82-1 C.P.D. P 631. The
protester is required to show that its interpretation of the language in
issue is reasonable and susceptible to the understanding it reached.
Wheeler Bros., Inc. et al.--Request for Reconsideration, B-214081.3,
Apr. 4, 1985, 85-1 C.P.D. P 388. When a dispute exists as to the actual
meaning of a solicitation requirement, this Office will resolve the
matter by reading the solicitation as a whole. System Development
Corp., B-219400, Sept. 30, 1985, 85-2 C.P.D. P 356.
As discussed above, upon our review of the IFB as a whole, we
conclude that the unique task requirements in this IFB render
Electrographic's interpretation of the IFB unreasonable. Under
Electrographic's interpretation, we would be forced to conclude that the
agency contemplated the award of normal printing work to one contractor
and the award of "rush work" to another. As stated above, such a
conclusion is unwarranted. Accordingly, under these circumstances, we f
ind no ambiguity to exist.
We have been informally advised by the agency that it has withheld
action concerning our prior recommendation pending our determination on
Electrographic's request for reconsideration. Following the agency's
decision to suspend implementation of our recommendation, Record Press
wrote to our Office noting, among other things, that both the time
necessary to resolve the initial protest and now the time taken to
respond to the request for reconsideration have substantially cut into
the 1-year contract which was initially awarded on Novemher 12, 1986.
Accordingly, it asks that:
(1) The remainder of the contract which we recommend be awarded
to Record Press be renewed for all permissible option periods;
and
(2) our Office grant Record Press the reasonable attorneys'
fees it has incurred in connection with this bid protest.
Concerning Record Press' request that the options to renew the
contract be exercised, we must respond that such a decision is a matter
of contract administration which is not for our review under our bid
protest function. Excel Services, Inc., B-217184, May 8, 1985, 85-1
C.P.D. P 514; Tri-State Service Co., B-208567, Jan. 17, 1983, 83-1
C.P.D. P 44. We thus have no authority to order the agency to exercise
the options under this contract.
Concerning Record Press' request for attorney's fees, the Competition
in Contracting Act of 1984, 31 U.S.C. Sec. 3554 (Supp. III 1985), and
our Bid Protest Regulations, 4 C.F.R. Sec. 21.6 (1986), provide
authority for our Office to grant the costs of pursuing a protest,
including reasonable attorney's fees, where appropriate. Since Record
Press has lost the opportunity to perform more than 6 months of the
services originally procured, we find that it is entitled to reasonable
costs of filing and pursuing its protest, including attorney's fees. 4
C.F.R. Secs. 21.6(d) and (e) (1986); Pacific Sky Supply, Inc.,
B-225513, Mar. 30, 1987, 87-1 C.P.D. P 358. Record Press should
submit its claim for such costs directly to the agency. 4 C.F.R. Sec.
21.6(f).
For the reasons discussed above, we affirm our prior decision and
recommend that the contract with Electrographic be terminated for
convenience and award made to Record Press.
Acting Comptroller General
of the United States
Matter of: Record Press, Inc.
File: B-225517
Date: March 20, 1987
Bid for printing of judicial opinions on which bidder drew a series
of diagonal lines across Schedule page for "rush work," although
solicitation instructed bidders to enter a notation of "No Charge" for
items for which no separate additional charge will be made, does not
constitute an offer to perform that portion of the work and should have
been rejected as nonresponsive.
Record Press, Inc. protests the award of a contract to Electrographic
Corporation for the printing of slip opinions for the United States
Court of Appeals for the Second Circuit under invitation for bids (IFB)
No. NYSAC-87-01, issued by the Administrative Office of the United
States Courts. The protester argues that the bid of Electrographic was
nonresponsive because Electrographic had crossed out a page of the bid
Schedule and that, through post-bid opening correspondence, the
contracting agency improperly permitted Electrographic to correct an
error as a result of which Electrographic displaced Record Press as the
apparent low bidder.
We sustain the protest as to the first ground.
The solicitation called for the printing, as required, of slip
opinions for the Court of Appeals for the Second Circuit for an initial
contract period of 1 year with two 1-year options.
A portion of the solicitation Schedule requested bids for "rush
work." Included in this section were some nine line items calling for
prices for each of three fiscal years, and the submission of prices for
these items was not optional.
This listing covered substantially all of one page of the
solicitation Schedule. In this section of its bid, Electrographic
entered no notation on the blank spaces provided for prices, and drew a
series of diagonal lines across the page upon which these items
appeared. In this connection, we note that section C.1.5. of the
solicitation provided: " o fferor should enter No Charge (N.C.) for
materials and services which the offeror will supply without additional
separate charge." We note that, aside from the "rush work" portion of
the solicitation Schedule, Electrographic entered a notation of "N/C"
for some 42 separate line items.
Record Press argues that Electrographic's crossing out of the "rush
work" provision of the solicitation Schedule rendered Electrographic's
bid nonresponsive, particularly in light of the solicitation's
instructions quoted above and the fact that Electrographic entered a
notation of "N/C" in some 42 other places.
The agency responds that it reasonably interpreted the crossing-out
of the "rush work" provisions in Electrographic's bid as meaning that
Electrographic intended to render rush work services at no additional
charge. This interpretation, according to the contracting officer's
affidavit, was arrived at because Electrographic had submitted bids in a
similar fashion for other solicitations. The agency also contends that
the solicitation's instructions relating to the entry of No Charge or
"N/C" for those items in the solicitation for which no additional charge
would be made were only recommendatory in nature rather than compulsory.
Finally, the agency contends that the notation of "N/C" would have been
inappropriate since Electrographic did not intend to perform rush work
gratuitously but rather intended to perform such work at its regular
rates. According to the agency, this interpretation is reasonable since
the requirements of the solicitation were not severable and
Electrographic, in a cover letter accompanying its proposal, indicated
an intent to meet all of the court's requirements.
A responsive bid represents an unequivocal offer to perform the exact
thing called for in the solicitation; thus acceptance thereof will
legally bind the offeror to perform in accordance with all the material
terms of the solicitation. By contrast, a bid which is nonresponsive to
one or more material terms of a solicitation will not legally bind an
offeror with respect to those nonresponsive items upon acceptance of the
bid. See generally Spectrum Communications, B-220805, Jan. 15, 1986,
86-1 C.P.D. P 49. As a general rule, a bid must be rejected as
nonresponsive if it is submitted without a price for every item
requested by the IFB. Syracuse Safety-Lites, Inc., B-222640, July 1,
1986, 86-2 C.P.D. P 3.
We have recognized an exception to the general rule stated above
where a bid contains a "N/C" (No Charge) or other similar notation which
indicates clearly a bidder's intent to be affirmatively bound to provide
the item called for in the solicitation at no charge. Syracuse
Safety-Lites, Inc., B-222640, supra.
Electrographic's bid was nonresponsive and should have been rejected.
First, whether the instructions to bidders to enter a No Charge or
"N/C" notation for services which were to be rendered at no additional
charge were recommendatory or compulsory in nature is fundamentally
irrelevant since a failure to enter either a dollar amount or "N/C" or
other similar notation for each line item of the bid would result in the
bidder's not being legally bound to perform the services called for in
the line item. Second, the fact that Electrographic may have previously
performed rush work, when requested, at its regular prices under other
contracts containing crossed out "rush work" provisions does not create
a legally enforceable sobligation for Electrographic to perform in a
similar fashion under a contract awarded under this solicitation.
Third, we find to be without merit the suggestion that it would have
been inappropriate for Electrographic to enter "N/C" for rush work since
it did not intend to perform the work gratuitously. The instructions to
bidders clearly indicate that the "N/C" notation was to be used in the
case of goods or services to be provided at no additional, separate
charge (i.e., no charge above and beyond amounts charged for goods and
services elsewhere in the solicitation). Finally, we do not believe
that the language of the cover letter accompanying Electrographic's bid
creates a legally enforceable obligation for that firm to perform the
rush work in accordance with the solicitation. The letter merely states
"... we hope you find this proposal meets all of the Court's
requirements." As such, the bid should have been rejected. Accordingly,
the protest is sustained on these grounds.
Since we conclude that the bid of Electrographic should have been
rejected as nonresponsive, and sustain the protest on that basis, we
deem it unnecessary to render a decision regarding the second issue
raised by the protester. In light of our decision to sustain the
protest, we recommend to the Director of the Administrative Office of
the United States Courts that the contract with Electrographic be
terminated for convenience and award be made to Record Press, if
otherwise appropriate. See Bid Protest Regulations, 4 C.F.R. Sec. 21.6
(1986), and Sabreliner Corporation, 64 Comp. Gen. 325 (1985), 85-1
C.P.D. P 280.
The protest is sustained.
Comptroller General
of the United States
Matter of: Chaparral Industries, Incorporated
File: B-225515.3
Date: February 20, 1987
Protest filed more than 10 days after the basis for protest was known
or should have been known is dismissed as untimely.
Chaparral Industries, Incorporated, protests the evaluation criteria
under request for proposals (RFP) No. DAAA09-86-R0107 issued by the
Army for fin and nozzle assemblies. Chaparral asserts that the RFP
failed to provide an evaluation factor for the cost of deactivating and
placing into storage certain government-owned equipment in Chaparral's
possession under a prior contract producing fin and nozzle assemblies.
We dismiss the protest as untimely.
The RFP was issued on March 5, 1986, with an extended closing date
for the receipt of initial proposals of June 10, at which time offers
were received and opened. Award was delayed because the low offeror,
Bay Ordnance, Inc., a small business, was found nonresponsible and the
matter was referred to the Small Business Administration for
consideration under the certificate of competency procedures, and
because two other protests were filed in our Office, the last of which
was closed on January 12, 1987. On February 5, 1987, Chaparral filed
this protest alleging that a government-furnished equipment factor now
should be included in the RFP because Chaparral's prior contract was
completed on January 14, 1987.
Under our Bid Protest Regulations, protests which allege apparent
solicitation improprieties must be filed prior to the closing date for
receipt of initial proposals. 4 C.F.R. Sec. 21.2(a) (1) (1986).
However, Chaparral asserts that when it originally received the RFP with
the April 3, 1986, closing date, Chaparral anticipated a timely award
prior to the date on which it would complete its existing contract.
Moreover, when offers were received and opened on June 10, 1986, its
contract was still in progress. Under these circumstances, Chaparral
argues that there was no impropriety apparent from the solicitation.
However, our Regulations also require that in other cases, protests must
be filed not later than 10 days after the basis of protest is known or
should have been known. 4 C.F.R. Sec. 21.2(a)(2).
In this case, Chaparral was aware that award had been delayed, and on
December 17, 1986, the Army requested, and Chaparral granted, an offer
extension until February 27, 1987. Thus, Chaparral was made aware that
award was not contemplated until after the date on which it would
complete production under its extant contract. Accordingly, on December
17, or at the latest, on January 14 when it completed the prior
contract, Chaparral was aware of its basis for protest, which was a
result of the delay in making the award beyond Chaparral's other
contract completion date. Chaparral's protest was not filed until
February 5, more than 10 days later and is, therefore, untimely.
The protest is dismissed.
Robert M. Strong
Deputy Associate
General Counsel
Matter of: Sony Corporation of America--Reconsideration
File: B-225512.3
Date: April 10, 1987
Request for reconsideration that basically only reiterates
previously-rejected arguments does not warrant reversal or modification
of the prior decision.
Sony Corporation of America requests reconsideration of our decision
denying its protest against the award of a contract for high-density
video tape cassettes to Spartan Industries, Inc., under request for
proposals (RFP) No. F04606-86-R-0233, issued by the Department of the
Air Force, Sacramento Air Logistics Center, California. Sony
Corporation of America, B-225512, Feb. 24, 1987, 66 Comp. Gen. , 87-1
CPD P .
We affirm our prior decision.
The RFP limited competition to products manufactured by four
previously approved sources, including Sony, that were listed in the
soiicitation. However, clause M-46 of the RFP permitted offers from
other firms to be considered provided they presented sufficient data to
allow the government to evaluate the acceptability of the offered items.
The Air Force technical evaluators found the tape cassettes offered by
Spartan to be acceptable. Sony had protested that Spartan, which was
not listed in the solicitation as an approved source, failed to submit
adequate data to permit the government to evaluate the Spartan proposal
as acceptable.
Our prior decision explained that the solicitation, contrary to
Sony's position, did not require that unapproved sources submit test
data to support claimed performance characteristics of the offered
substitute item. Rather, we held that the solicitation only required
engineering data ("such as manufacturing controlled drawings,
qualification test reports, quality assurance procedures, etc.") that
the agency considered adequate for evaluation purposes. We also noted
that the RFP did not define any standards that a substitute product
would have to meet to be acceptable for government use. Nevertheless,
we stated that in the interest of enhancing competition, an agency's
decision to accept an unapproved source's substitute item in an approved
source procurement will not be questioned by our Office unless the
agency decision was tantamount to fraud or willful misconduct. Since no
such showing was made, we denied the protest.
In its request for reconsideration, Sony essentially repeats its
previous arguments. Sony again argues that the solicitation did require
unapproved sources to submit test data. The protester also argues that
the solicitation failed to set forth standards that a substitute product
would have to meet and that the Spartan tape did not meet the
specifications of the approved sources' products. Additionally, Sony
again arques that the agency did not notify the firm that a substitute
product would be accepted which did not meet the qualifications of an
approved source's product. Sony's repetition of its earlier arguments
show that it simply disagrees with many of the conclusions in our prior
decision; however, mere disagreement or reiteration of a
previously-rejected position does not provide a basis for reversing a
decision. Spectrum Leasing Corp., B-213647, Sept. 10, 1984, 84-2 CPD P
267; Adams-Keleher, Inc.--Request for Reconsideration, B-213452.2, Apr.
18, 1984, 84-1 CPD P 442.
Finally, Sony had also protested that Spartan only submitted its
technical literature concerning its tape to the Air Force during
discussions and that therefore Spartan's initial proposal was
informationally deficient. We stated that in negotiated procurements,
informational deficiencies in an initial proposal are a proper subject
for resolution through discussions, which occurred here. Sony now
claims that this conclusion is factually incorrect since only telephonic
discussions were conducted by the Air Force with the offerors and
Spartan submitted no technical data in its best and final offer. In
response, the Air Force states that it mistakenly reported to us that
the literature from Spartan was submitted during discussions; in fact,
according to the Air Force, Spartan submitted its technical literature
in its initial proposal. In either case, we think the literature was
properly submitted and accepted for consideration.
Our prior decision is affirmed.
Harry R. Van Cleve
General Counsel
Matter of: Sony Corporation of America
File: B-225512.2
Date: March 20, 1987
Even if agency relaxed its requirements by not requiring successful
offeror to furnish information about guaranteed maximum shipping weights
and dimensions, agency had sufficient information with which to evaluate
transportation costs for the successful offeror and difference in price
between successful offeror and protester amounted to more than $25,000
while transportation costs amounted to approximately $5,000 so that
protester was not prejudiced by alleged waiver of requirements by the
agency.
Sony Corporation of America protests the award of an indefinite
quantity contract for high-density video tape cassettes to Spartan
Industries, Inc., under request for proposals (RFP) No.
F04606-86-R-0233, issued by the Department of the Air Force, Sacramento
Air Logistics Center, California. The RFP limited competition to
products manufactured by four previously approved sources, including
Sony, that were listed in the solicitation. However, the RFP permitted
offers from other firms, such as Spartan, to be considered provided they
presented sufficient data to allow the government to evaluate the
acceptability of the offered items. The Air Force technical evaluators
found the tape cassettes offered by Spartan to be acceptable. However,
Sony contends that the Spartan proposal failed to contain guaranteed
maximum shipping weights and dimensions as required by the RFP and
therefore should have been rejected.
We deny the protest.
The solicitation stated that each offer would be evaluated to the
destination specified by adding to the f.o.b. origin price all
transportation costs and that guaranteed maximum shipping weights and
dimensions were required to determine proper transportation costs. The
solicitation also stated that government estimated weights and
dimensions were not available and that failure to furnish the required
information "may" cause a proposal to be rejected.
Eight proposals (three from approved sources and five from unapproved
sources) were received by September 4, 1986, the closing date for
receipt of initial proposals. Discussions were held with five offerors
determined to be within the competitive range, including Spartan and
Sony. Best and final offers were received by the due date of September
24, 1986. The low offeror, Spartan, proposed Maxell Professional High
Grade video tape, P/N KCA-60HGPA. Spartan offered a Price of $10.97 per
tape ($522,555.95 for the maximum quantity), while the second low
offeror, Sony, offered a price of $11.50 per tape ($547,802.50 for the
maximum quantity). However, Spartan failed to submit information
concerning its guaranteed maximum shipping weights and dimensions.
The Air Force reports that of five offerors determined to be within
the competitive range, four submitted guaranteed maximum shipping
weights and dimensions. Among these four was Maxell Corporation of
America, which also proposed to furnish P/N KCA-60HGPA and which
furnished shipping weights and dimensions for the identical item that
Spartan offered. The Air Force used these shipping weights and
dimensions from Maxell to calculate the transportation costs for
Spartan. Because the Air Force had sufficient information with which to
calculate transportation costs for Spartan, the Air Force did not reject
the Spartan proposal. Further, the Air Force transportation specialist
determined that transportation costs for the five contractors, on a per
tape weight basis, ranged from $495 for the contractor closest to the
base to $2,536 for Sony which was located in New Jersey. On a container
weight basis, the agency's transportation specialist also concluded that
maximum transportation costs of $5,036.20 would be incurred and that " t
ransportation costs are not significant in this procurement."
We find no merit to the protester's contention that the Spartan
proposal should have been rejected for failing to submit guaranteed
maximum shipping weights and dimensions. The record shows that the
agency evaluated offers, including transportation costs, since the
agency had available to it all necessary information to evaluate the
transportation costs of Spartan's proposed item. Further, even if we
assume that the agency relaxed a requirement for Spartan by not
requiring the firm to submit guaranteed shipping weights, the difference
in cost between the low offeror, Spartan, and the second low offeror,
Sony, amounted to more than $25,000 and the transportation cost were
evaluated to cost no more than approximately $5,000. Under these
circumstances, and given the nature of the product, we think that any
potential change in packing from that which was evaluated could not
conceiveably increase the shipping costs to the government by an amount
that would approach the difference in Spartan's and Sony's offers.
Thus, we are of the view that Sony was not prejudiced by the Air Force's
relaxation of this requirement. See Centennial Computer Products, Inc.,
B-211645, May 18, 1984, 84-1 CPD P 528.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Keyes Fibre Company
File: B-225509
Date: April 7, 1987
1. Allegation that awardee's "bid" was "nonresponsive" to
solicitation specifications is without merit not only because
procurement was conducted by negotiation and not through sealed bidding,
but because in its offer awardee took no exception to solicitation
requirements. Protest is directed more to the responsibility of the
offeror than to the "responsiveness" or technical acceptability of its
offer.
2. The submission of a below-cost offer on a firm-fixedprice contract
is legally unobjectionable. Protester's arguments that awardee's low
price calls in question its ability to perform satisfactorily, i.e., the
firm's responsibility, or suggests it made a mistake are dismissed since
General Accounting Office generally does not review contracting
officers' affirmative determinations of responsibility and because a
competitor does not have standing to claim an error in another's offer.
3. Contention that contracting officer either abdicated her duty to
make an affirmative determination of awardee's responsibility or did so
in bad faith is denied where, before award, contracting officer was in
possession of positive preaward surveys of awardee's financial
capability and production facilities.
4. Contention that all offerors were not competing on an equal basis
with regard to the delivery schedule is denied where modification to
awardee's contract which extended delivery on certain purchase orders by
3-4 weeks in exchange for a reduction in contract price occurred
approximately 3 months after award. In absence of any indication that
agency solicited offers on the basis of one delivery schedule with the
intent of extending it upon award, the modification here made to the
awardee's contract is a matter of contract administration which General
Accounting Office will not review.
5. Fact that at time of preaward survey one of the awardee's
production facilities lacked two items of equipment needed to test
disposable paper plates to standards set forth in solicitation's
Commercial Item Description does not establish that agency waived the
solicitation's "commercial item" requirement. Whether awardee, an
established commercial producer of such items, would comply with RFP's
commercial item certification is a matter of that firm's responsibility
and in any event record shows that one of awardee's plants had a full
complement of testing equipment and required testing equipment was on
order for other plant.
Keyes Fibre Company protests the award of a contract to the Fonda
Group, Inc., by the General Services Administration (GSA) under
solicitation No. 9FCO-OKH-N-A1265/86, for a quantity of heavy-duty paper
plates. The protester has raised a number of grounds for protest in its
initial submission and in its comments on the agency report: that the
awardee's offer and the product itself did not and cannot conform to the
solicitation's commercial item description; that the awardee submitted
a below-cost offer; that the agency failed to make an affirmative
finding of responsibility with regard to the awardee or, in the
alternative, that such a finding was made in bad faith; and that the
agency improperly waived certain requirements and modified the delivery
schedule after award of the contract.
We dismiss the protest in part and deny it in part.
On March 12, 1986, GSA issued the solicitation requesting proposals
for some 35 separate line items representing varying quantities of eight
different paper plates and trays. The solicitation contemplated a
1-year, firmfixed-price, requirements contract, or contracts, for these
items. At issue in this protest is line item 25, 1/ a heavy duty, extra
water- and grease-resistant, disposable, round, 10-1/4 inch diameter,
three-compartment paper plate for use by food service activities. The
record indicates that the protester manufactures these plates by molding
them from paper pulp whereas Fonda die-cuts discs from a laminated and
coated paperboard roll and forms the plate in a machine by the
application of heat and pressure.
Plates supplied under item 25 were to be in accordance with
Commercial Item Description (CID) A-A-1504, dated June 24, 1982. The
two-page CID does not dictate any particular method of manufacture;
therefore, either molded or pressed plates would be acceptable so long
as they conform to certain dimensions and meet certain standards for
rigidity, water and grease resistance, transmission of objectionable
tastes or odors, and workmanship. Competition was limited to price; no
technical proposals or samples were required to be submitted with the
offers.
In its initial submission to our Office, Keyes stated that the award
to Fonda presented "two grounds" for protest: (1) that the "plates"
manufactured by Fonda were "completely nonresponsive" to the
specifications and (2) that GSA had made no effort to "inspect the Fonda
plates" prior to award and "otherwise investigate the price disparity
between the Fonda and Keyes bids." Based on its knowledge of the plate
Fonda has the capability to manufacture, Keyes argued, Fonda "could not
and did not" respond to the CID nor, "possibly," to the special
requirements for waterproof packing of the cases of paper plates. The
protester asserted that from both "technical and pricing" standpoints,
Fonda could not adhere to the CID, because the Fonda "plate" is
"nonresponsive" to the rigidity requirements of the CID and because
Fonda's price was so unreasonably low "as to suggest that its bid is
mistaken and/or nonresponsive."
Keye's arguments about the "responsiveness" of Fonda's offer are
couched in lanquage appropriate to a sealed bid procurement. Even then,
Keye's argument would be somewhat off the mark, since its position is
that Fonda's "plate" is nonresponsive to the solicitation
specifications, whereas it is the bid--and not the product (absent a bid
sample requirement)--by which responsiveness is measured. Moreover, it
is clear from the face of the solicitation that this is a negotiated,
and not a sealed bid, procurement.
As GSA points out, the concept of responsiveness is inapplicable to a
negotiated procurement. According to the agency, the protester actually
is questioning Fonda's responsibility rather than the responsiveness of
its offer.
We agree. As a general rule, the concept of responsiveness does not
apply to negotiated procurements. True Machine Co., B-215885, Jan. 4
1985, 85-1 C.P.D. P 18. We have held that, within the context of a
negotiated procurement, certain solicitation requirements may be
sufficiently material so that an offer which fails to include them is
technically unacceptable. Id. In its offer, however, Fonda took no
exception to the specification requirements; in fact, under the terms
of the RFP's "Commercial Item Certification" clause, by signing its
offer, Fonda certified "that the product(s) offered meet the
requirements of the CID . . . ." Even measured by the standards
applicable to a sealed bid procurement, Fonda's offer was "responsive"
in that it represented an unequivocal offer to provide the supplies
described in the solicitation. See Hicklin GM Power Co., B-222538, Aug.
5, 1986, 86-2 C.P.D. P 153 at 4. Keyes' protest of the "responsiveness"
of Fonda's offer is denied.
The second ground of protest initially asserted by Keyes is that
Fonda's price was so low as to call into question its ability to deliver
a product which will conform to the specifications, including the
required waterproof packaging, or which suggests that Fonda made a
mistake in calculating its price.
As for Keyes'speculation that Fonda's price may be mistaken, we have
held that it is solely the responsibility of the contracting
parties--the government and the low offeror--to assert rights and bring
forth the necessary evidence to resolve mistake questions. A protester
has no standing to claim an error in a competitor's offer. Window
Systems Engineering, B-222600, June 2, 1986, 86-1 C.P.D. P 509. The
protest is dismissed as to this ground.
Apart from the fact that this is not a sealed bid procurement, Keyes
has presented no authority for its position that a low price in and of
itself renders a "bid" "nonresponsive." We have repeatedly held that
there is nothing legally objectionable in the submission and acceptance
of a below-cost offer under a solicitation for a firm-fixed-price
contract. A firm's ability to perform the contract at the offered price
is a matter of responsibility for the contracting agency to determine
before award. Our Office does not review an affirmative determination
of responsibility absent a showing of possible fraud or bad faith by
government officials or that definitive responsibility criteria have not
been met. See Window Systems Engineering, B-222600, supra, at 2. In its
initial protest, which did not even mention the concept of
responsibility, Keyes alleged neither exception.
Whether Fonda will, in fact, supply plates meetinq the specification
requirements is a matter of contract administration which our Office
will not review as part of our bid protest function. Bid Protest
Regulations, 4 C.F.R. Sec. 21.3(f)(1) (1986).
In its report on this protest, GSA explained its evaluation of offers
and the basis for its decision to award line item 25 to Fonda. In its
comments on that report following a conference at our Office, Keyes
questioned whether (1) GSA could have made a good faith determination of
Fonda's "responsiveness and responsibility" given the information
available to it; (2) "whether the contracting officer abdicated her
duty to make a responsibility determination"; and (3) whether GSA
"improperly waived compliance with the delivery terms and commercial
item certification requirements of the solicitation for one bidder
only."
The protester's argument that the contracting officer could not in
good faith have found Fonda responsible is based on a prenegotiation
memorandum signed and dated by GSA's contract specialist and contracting
officer on August 14 and September 22, 1986, respectively. The
memorandum states in part:
"Substantial competition was received with three offerors
competing on this item (item 25). Financial and plant facility
preaward surveys will be conducted in accordance with FAR 9-106.1
since the firm (The Fonda Group, Inc.) was not a prior contract
period contractor, therefore a determination of responsibleness
could not be assured.
"The negotiation objective is to obtain prices that can be
determined fair and reasonable and which range between the prior
contract award pricing and the lowest competitors' offer pricing."
The protester argues that the contracting officer's September 29
award of the contract to Fonda contradicts her inability 1 week earlier
to find the firm responsible, and that this unexplained reversal
suggests either that the contracting officer abdicated her duty to make
a nonresponsibility determination, or that she proceeded with award in
the face of negative preaward survey information concerning Fonda.
GSA discounts the importance of the prenegotiation memorandum,
stating that this "routine document" was prepared to satisfy the
administrative requirements of Federal Acquisition Regulation, FAR, 48
C.F.R. Sec. 15.807, which requires the contracting officer to establish
prenegotiation objectives before the negotiation of any pricing action.
With regard to the 5-week discrepancy between the contracting
specialist's and the contracting officer's signature, GSA has provided a
memorandum from the contract specialist in which he states:
"The prenegotiation memorandum was written by the Contract
Specialist. . . , signed and dated on August 14, 1986. The
memorandum was not forwarded for signature to the Contracting
Officer (CO), . . ., in a timely manner by the Specialist. The
memorandum was inadvertently set-aside while attention was
diverted to the processing of contracts requiring special
clearance . . . . The memorandum did not come to the CO's
attention until the file was forwarded for contract award
approval. The memorandum was then signed (September 22, 1986) on
the same date that the Recommendation for Award . . . was signed.
Contract award was subsequently made on September 29, 1986."
We have no reason to disbelieve the contract specialist's account of
these events. In fact, the record suggests that events had overtaken
the preparation and signing of the prenegotiation memorandum. 2/
Specifically, the record shows that in June, 1986, GSA's Credit and
Finance Division surveyed Fonda's financial capability, found it
satisfactory, and recommended "complete award." Also in June, a survey
was conducted of Fonda's California production facility in which some
deficiencies were found. In July, a survey was conducted of Fonda's
Vermont production facility, as a result of which the survey team
concluded that Fonda was capable of performing because its past
performance, production capacity, quality control system and purchasing
procedures all were satisfactory. A mid-August supplemental preaward
survey of Fonda's California plant revealed that the deficiencies noted
during the earlier visit had been remedied, except for the acquisition
of a small oven and a rigidity testing machine needed for quality
assurance tests. Both of these items, however, were on order.
As of September 22, therefore, when the contracting officer signed
the "pre-negotiation memorandum" and a recommendation for award to
Fonda, she was in possession of positive preaward survey reports as to
Fonda's financial capability and as to both its California and Vermont
production facilities. Whether on the basis of this information Fonda
could be determined to be a responsible prospective contractor was a
matter of business judgment to be exercised by the contracting officer
which, as we stated earlier in this decision, we will not review absent
a showing of fraud or bad faith. To make this showing, the protester
has a heavy burden of proof as contracting officials are presumed to act
in good faith. See Nations, Inc., B-220935.2, Feb. 26, 1986, 86-1
C.P.D. P 203. The protester has made no showing of bad faith.
The record simply does not bear out the protester's speculation that
the award to Fonda resulted from an "unexplained reversal" by the
contracting officer as to Fonda's responsibility. That firm was awarded
the contract following the contracting officer's receipt of favorable
preaward surveys of its financial capability and plant facilities. The
protester's disagreement with the contracting officer's determination
does not suffice to show that the contracting officer acted fraudulently
or in bad faith. Id. We have no basis to object to GSA's affirmative
determination that Fonda was responsible and as to this basis the
protest is denied.
Finally, the protester argues that GSA improperly relaxed the
delivery schedule and commercial item requirements of the RFP solely for
Fonda without permitting other offerors to compete on the same basis.
There is no merit to these contentions.
With regard to the delivery schedule, the record shows that
approximately 3 months after award, GSA and Fonda agreed to a
modification of the contract in which the production point was changed
from California to Vermont and the delivery dates under certain purchase
orders were extended by 3-4 weeks in exchange for a reduction in
contract price. There is no indication in the record, however, that at
the time of receipt of offers and of award that GSA contemplated an
extension of the delivery schedule.
As a general rule, we have refused to review protests based upon
contract modifications since modifications are primarily a matter of
contract administration and thus primarily the responsibility of the
contracting agency. See 4 C.F.R. Sec. 21.3(f) (1) (1986); Devils Lake
Sioux Mfg. Corp., 64 Comp. Gen. 578 (1985), 85-1 C.P.D. P 638. The only
exception to this rule is where it is alleged that the modification is
beyond the scope of the original procurement. The modification in this
case does not meet this standard and consequently we will not consider
the merits of Keyes' argument.
Keyes also maintains that GSA waived for Fonda the solicitation
requirement that the product offered be a "commercial" or
"commercial-type" product as defined in the RFP. Keyes argues that
since at the time of the supplemental preaward survey of Fonda's
California facility it did not have on hand the oven and rigidity tester
needed to perform the tests described in the CID, Fonda did not
demonstrate that it had the capability to commercially produce the item
being purchased and GSA's award of a contract to it amounted to a waiver
of the commercial product requirement.
We do not believe the fact that at one of its plants at the time of a
preaward survey Fonda did not have on hand two items of equipment needed
to test its plates to the government standards stated in the CID amounts
to a showing that contrary to its certification Fonda would offer, and
GSA intended to accept, a noncommercial item. First, the RFP's
commercial item certification stated that by signing the offer the
offeror certified that the items offered were commercial items. Whether
an offeror will supply an item which complies with such a certification
is a matter of responsibility. Second, GSA's preaward surveys of Fonda,
a well-established producer of paper plates for commercial customers,
indicate that Fonda did have a full complement of testing equipment at
its Vermont plant and had on order the necessary equipment for its
California plant. Under these circumstances, we do not believe the
record supports the conclusion that GSA waived for Fonda the requirement
that it provide a commercial product.
The protest is dismissed in part and denied in part.
Harry R. Van Cleve
General Counsel
1/ The initial protest also encompassed line item 28, the same
product to be shipped to a different depot. Since prior to award GSA
determined that there no longer was a need for line item 28 and made no
award of it, we dismiss as academic Keyes' protest concerning it. See
Michael A. Cologna, B-222325, May 22, 1986, 86-1 C.P.D P 480.
2/ That the "prenegotiation" memorandum was an after-the-fact
document is indicated by the facts that negotiations actually had
concluded over 2 months before the contract specialist signed the
memorandum and that GSA already was well underway in conducting the
surveys necessary to determine Fonda's responsibility.
Matter of: Comarco, Inc.
File: B-225504, B-225504.2
Date: March 18, 1987
1. In assessing the relative desirability of proposals and
determining which offer should be accepted for award, contracting
officers enjoy a reasonable range of discretion and we will not question
such a determination unless there is a clear showing of
unreasonableness, abuse of discretion, or a violation of the procurement
statutes or regulations.
2. An agency must notify an offeror of the central weakness of its
offer, but does not have to discuss every element of a technically
acceptable competitive range oroposal that has received less than the
maximum possible score.
3. An agency has no obligation to reopen negotiations so that an
offeror may remedy defects introduced into a previously acceptable
proposal by a best and final offer as the offeror assumes the risk that
changes in its final offer might raise questions about its ability to
meet the requirements of the solicitation.
Comarco, Inc., protests the award of a contract to Arinc Research
Corporation (Arinc) under request for proposals (RFP) No.
N66001-86-R-0030, issued by the Naval Ocean Systems Center (NOSC), San
Diego, California, for product assurance services.
The protest is denied.
Comarco states that there was insufficient technical variation
between its proposal and that of Arinc's to justify making an award to
Arinc for $600,000 more than Comarco's cost. Comarco also contends that
its proposal was improperly found to have deficiencies hased upon what
Comarco might do after award. Comarco alleges that NOSC improperly
eliminated certain qualified staff persons from Comarco's proposed work
force, improperly downgraded Comarco's "Personnel Qualifications" score,
and failed to allow it to submit supplemental data to clarify its
proposal in this area. Comarco also contends that meaningful
discussions were not held, inasmuch as the clarifications asked for in
the request for best and final offers (BAFO) only amounted to 10 to 15
percent of the total score and, therefore, Comarco could not increase
its score enough to win an award because its other weaknesses were not
pointed out.
The Navy contends that Comarco did not timely protest the alleged
improprieties in the BAFO request letter. However, the Navy
misconstrues Comarco's protest. Comarco's protest concerns the
evaluation of its proposal and the alleged failure to conduct meaningful
discussions. Since it was filed within 10 working days of when it was
apprised of the award, it is timely filed under our Office's Bid Protest
Regulations. 4 C.F.R. Sec. 21.2 (1986).
The solicitation required that proposals be evaluated under four
primary factors: (1) Personnel Qualifications, (2) Company Experience,
(3) Cost, and (4) Management and Facilities. The factors are listed in
descending order of importance with Company Experience and Cost being of
equal importance. After initial proposals were received and evaluated,
Comarco was included in the competitive range along with two other
offerors. Discussions were conducted with and BAFOs requested from
these offerors. In the letter requesting Comarco's BAFO, NOSC stated
its concerns that (1) Comarco had no San Diego facility; (2) Comarco's
management relationship with its subcontractor, Research Analysis
Corporation (RAC), was somewhat cumbersome and could result in
inefficiency and high cost; and (3) Comarco's proposed staff might be
changed soon after contract award.
Comarco changed its proposal in its BAFO and indicated that it had a
San Diego facility. As a result, Comarco's "Facilities" score was
raised by NOSC. NOSC also raised Comarco's "Management" score since
Comarco lowered the planned amount of RAC's subcontract hours. The DOSC
evaluation panel felt that although Comarco strengthened its management
plan by assuming a stronger technical and management leadership role, in
using its own employees it weakened its proposed "Personnel
Qualifications." NOSC downgraded Comarco's "Personnel Qualifications"
score because NOSC read Comarco's BAFO as removing from the proposal RAC
personnel whom NOSC felt were highly qualified. In addition, in making
its personnel changes, Comarco did not submit a new matrix chart showing
the specific personnel who would be performing under the various
technical labor categories. Inasmuch as the solicitation requires such
a matrix chart, NOSC downgraded Comarco's "Personnel Qualifications"
score. Also, although Comarco gave assurances in the BAFO that it was
committing its proposed personnel to this contract, NOSC further
downgraded Comarco in the "Personnel Qualifications" area since it
lacked confidence that Comarco's proposed personnel were committed to
this contract. Comarco reduced its cost in its BAFO, becoming the
second low offeror, but its combined technical and cost score was third.
Comarco contends that it did not offer new or different personnel in
its BAFO from those offered in its initial proposal. Rather, it states
that it merely shifted more of the work to its Comarco work force, all
of whom had been previously identified in its initial proposal to NOSC.
Comarco's BAFO showed that it greatly reduced its subcontract personnel
hours with RAC. Comarco contends that this change merely reflects a
different utilization of personnel assigned to the contract. Comarco
also contends that no new personnel matrix was provided because the
personnel matrix is contained in the Personnel Qualifications section,
not in the Facilities and Management area which was the subject of
NOSC's concern as expressed in its BAFO request. Comarco finally
contends that it is unreasonable to downgrade its proposal based upon
unfounded speculation that proposed personnel may be shifted from the
contract shortly after award.
It is not our function to reevaluate Comarco's technical proposal,
inasmuch as the determination of the government's needs and the best
method of accommodating those needs is primarily the responsibility of
the procuring agency. In assessing the relative desirability of
proposals and determining which offer should be accepted for award,
contracting agencies enjoy a reasonable range of discretion and our
Office will not question such a determination unless there is a showing
of unreasonableness, abuse of discretion, or a violation of the
procurement statutes or regulations. IBI Security Service, Inc.,
B-216799, July 25, 1985, 85-2 C.P.D. P 85 at 4.
We find that NOSC's interpretation and evaluation of Comarco's BAFO
was reasonable. In its BAFO, Comarco drastically reduced the use of the
highly qualified RAC personnel and totally eliminated RAC's involvement
in all but two of the 14 labor categories. It was reasonable for NOSC
to expect that a new personnel matrix should have been provided showing
how Comarco personnel would be utilized after Comarco so restructured
its proposal. Lacking a new personnel matrix NOSC had a reasonable
basis to doubt the quality of Comarco's staffing plan, since it did not
know which Comarco personnel would perform the function that RAC
personnel were going to provide.
Also, as noted, NOSC's concern about the lack of commitment of
Comarco's proposed personnel was brought to Comarco's attention during
discussions and in the BAFO request. This concern arose from a
paragraph in Comarco's initial proposal which implied that proposed
personnel would be changed shortly after contract award. In its BAFO,
Comarco responded to this concern by stating that its personnel will be
committed to the contract and by providing letters of commitment from
five of its proposed personnel. However, since letters of commitment
were not provided for the large majority of proposed personnel, NOSC
evaluators still had doubts as to the continued availability of the
originally proposed personnel. In evaluating proposals, an agency
reasonably may consider whether an offeror has provided sufficient
assurance to give the agency confidence that proposed personnel are
firmly committed to the offeror and the contract. See Logistics Service
International, Inc., B-218570, Aug. 15, 1985, 85-2 C.P.D. P 173. In
this case, we find that NOSC's concern about Comarco's proposed
personnel was reasonably based.
In response to Comarco's contention that meaningful discussions were
not held, the Navy contends, and the record supports, that NOSC
discussed all significant deficiencies with Comarco. We have held that
when an aqency fails to notify an offeror of the central weakness of an
offer, it has failed to hold meaningful discussions. E. H. Pechan &
Associates, Inc., B-221058, Mar. 20, 1986, 86-1 C.P.D. P 278 at 7.
However, agencies do not have to discuss every element of a technically
acceptable competitive range proposal that has received less than the
maximum possible score. Bauer of America Corp. & Raymond International
Builders, Inc., A Joint Venture, B-219343.3, Oct. 4, 1985, 85-2 C.P.D. P
380. Here, NOSC informed Comarco of its major weaknesses; NOSC did not
have to discuss other areas where Comarco was in fact highly rated.
As noted, Comarco raised its "Management and Facilities" score by
responding to NOSC's concerns expressed in the BAFO. However, NOSC
found that Comarco had weakened the "Personnel Qualifications" area as a
result of its BAFO changes and Comarco was downgraded accordingly.
However, an agency has no obligation to reopen negotiations so that an
offeror may remedy defects introduced into a previously acceptable
proposal by a best and final offer. Xerox Special Information Systems,
B-215557, Feb. 13, 1985, 85-1 C.P.D. P 192. The offeror assumes the
risk that changes in its final offer might raise questions about its
ability to meet the requirements of the solicitation and, thus, result
in the rejection of its proposal. RCA Service Company, B-219643, Nov.
18, 1985, 85-2 C.P.D. P 563 at 7. Consequently, we find that meaningful
discussions were conducted with Comarco.
Comarco claims that because of its lower cost proposal it should have
received the award. However, under this solicitation the technical
score was assigned a weight of 80 percent and the proposed cost score a
weight of 20 percent. In negotiated procurements, unless the
solicitation so specifies, there is no requirement that award be hased
on lowest price or cost. See Litton Systems, Inc., Electron Tube
Division, 63 Comp. Gen. 385 (1984), 84-2 C.P.D. P 317; Service
Ventures, Inc., B-221261, Apr. 16, 1986, 86-1 C.P.D. P 371. Even
though Arinc's evaluated cost was $600,000 more than Comarco's cost,
Arinc received a higher total score than Comarco when the weighted
technical and cost scores were combined because Arinc's technical
proposal was rated higher. Since the cost/technical tradeoff was
rational and consistent with the solicitation's evaluation factors, the
agency had a reasonable basis for selecting Arinc. Chemonics
International, B-222793, Aug. 6, 1986, 86-2 C.P.D. P 161 at 8; Service
Ventures, Inc., B-221261, supra, at 7.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: ANEFCO, Inc. -- Request for Reconsideration
File: B-225502.2
Date: May 14, 1987
General Accounting Office affirms prior dismissal as untimely of
protest against failure to include proposal in competitive range where
protester has not shown that its forbearance from protesting after
receipt of an agency letter detailing specific reasons for the rejection
of its proposal was justified.
ANEFCO, Inc. requests reconsideration of our dismissal of its protest
against the exclusion of its proposal from the competitive range under
request for proposals No. DE-RP0486AL33569, issued by the Department of
Energy (DOE), Albuquerque Operations Office, New Mexico. We dismissed
the protest because ANEFCO did not protest within 10 working days of
when the basis for protest was known--receipt by the protester of a
detailed October 20, 1986 letter from the contracting officer rejecting
the proposal. 4 C.F.R. Sec. 21.2(a) (2) (1986).
In requesting reconsideration, ANEFCO again argues that, following
receipt of the rejection letter, it justifiably did not protest because
it was told during a November 7 telephone conference with the
contracting officer that DOE was willing to meet with ANEFCO to consider
the possible reinstatement of the proposal. According to ANEFCO, DOE
was to contact the protester to arrange the meeting; when DOE
thereafter failed to contact ANEFCO, the company was compelled to file
the protest. ANEFCO also claims that the rejection letter was ambiguous
and its forbearance from protesting in anticipation of the expected
meeting with DOE was warranted.
As we pointed out in our dismissal, offerors rejected from the
competitive range usually are not provided detailed bases for the
rejection. Here, however, the rejection letter contained specific
reasons for the rejection and followed a detailed DOE request for
clarification and information from ANEFCO and an extensive response by
ANEFCO to that request. While ANEFCO argues that the rejection letter
was ambiguous, its protest specifically took issue point-by-point with
the letter's detailed reasons for proposal rejection and under the
circumstances we think that ANEFCO was placed on clear notice of its
basis for protest when it received the letter.
As for the meeting that never took place, according to the agency it
had stated only that it was willing to consider anything that ANEFCO
could provide on the subject of the possible failure of DOE to evaluate
properly ANEFCO's proposal, and that ANEFCO was to indicate its
intentions within a few days of the telephone conference but never
responded further. In this regard, the record contains no evidence that
DOE had agreed to do anything other than consider what ANEFCO might
present. There is certainly no indication that the agency, having just
completed a thorough evaluation of ANEFCO's proposal, had agreed to
initiate a review of its action, and in the absence of evidence so
indicating, we find the agency's statement more persuasive than the
protester's position. Accordingly, we again find that ANEFCO's failure
to protest within 10 days of receipt of the rejection letter can not be
excused.
Our prior dismissal is affirmed.
Harry R. Van Cleve
General Counsel
Matter of: ANEFCO, Inc.
File: B-225502
Date: March 18, 1987
Protest against failure to include proposal in the competitive range
is untimely and not for consideration when not filed within 10 days of
protester's receipt of letter detailing specific basis for rejection of
the proposal. In such circumstances, rejected offerors cannot wait for
a debriefing before protesting because the basis for protest is already
known.
ANEFCO, Inc. protests the exclusion of its proposal from the
competitive range under request for proposals (RFP) No.
DE-RP04-86AL33569, issued by the Department of Energy (DOE), Albuquerque
Operations Office, New Mexico.
We dismiss the protest as untimely.
The RFP, issued on April 7, 1986, solicited offers for casks used to
store nuclear waste during transport. On August 20, following the
submission of proposals, DOE requested that ANEFCO provide additional
details and support for certain portions of its proposal. ANEFCO
responded in great detail. By letter dated October 20, the Chairman of
the Source Evaluation Panel, who was also the contracting officer, sent
ANEFCO a 2-page letter rejecting the proposal from further consideration
and detailing the reasons therefor. Subsequently, on November 7, a
telephone conference was held between ANEFCO and the contracting
officer. ANEFCO's protest was filed here on November 20.
ANEFCO characterizes the events following its receipt of the October
20 letter as follows:
"... upon receipt of the October 20th letter from the
Contracting Officer, ANEFCO immediately requested a formal
debriefing by DOE. This debriefing was held via a conference call
on November 7, 1986. During the debriefing, the Contracting
Officer indicated that DOE would reconsider its decision excluding
ANEFCO from the competitive range and agreed to provide ANEFCO
with an opportunity to provide additional information concerning
its proposal.... When DOE failed to schedule a definitive
follow-up meeting, ANEFCO grew concerned about whether DOE
intended to live up to the commitments made during the course of
the debriefing... and had no choice but to file a protest. . .
."
DOE contends that the protest was not filed within 10 working days of
when the protest basis was known or should have been known. (4 C.F.R.
Sec. 21.2(a)(2) (1986)). According to DOE, ANEFCO did not request a
debriefing; the telephone conference was informal in nature and did not
constitute a formal debriefing, did not result in an agency protest, and
did nothing to alter DOE's basis for rejecting ANEFCO's proposal.
Our timeliness rules require that a protest such as this be filed
within 10 days of when the basis for protest is known or should be
known. 4 C.F.R. Sec. 21.2(a) (2) (1986). Offerors who are rejected
from the competitive range usually are not provided detailed reasons for
that action at the time they are furnished notice of rejection; for
that reason, we have long recognized that the basis for protest in such
cases will arise when the reasons are made known to the offeror, usually
through a debriefing. See, e.g., Metropolitan Contract Services, Inc.,
B-191162, June 14, 1978, 78-1 CPD P 435. Where, however, an offeror is
provided the detailed basis for proposal rejection, a protest of the
rejection must be filed within 10 days thereof, rather than 10 days
after any subsequent debriefing. Singer Co., 56 Comp. Gen. 172 (1976),
76-2 CPD P 481; Southwestern Bell Telephone Co. et al., B-200523.3 et
al., March 5, 1982, 82-1 CPD P 203; Compu-Serv, B-186164, May 9, 1977,
77-1 CPD P 327.
In this case, the agency's October 20th letter not only informed
ANEFCO of the rejection of its proposal, but also set forth several
detailed bases for that rejection, and it is those bases that ANEFCO has
sought to rebut in its protest. Under the circumstances, we see no
reason why ANEFCO should have needed a debriefing, and therefore the
timeliness of its protest must be measured from its receipt of the
October 20th letter. Since it is clear that the protest was not filed
until considerably later than 10 days after ANEFCO's receipt of the
letter, the protest is untimely. We therefore will not consider it.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
Matter of: Herbert Bauer GmbH & Co.
File: B-225500.3
Date: August 10, 1987
1. Contracting officer's nonresponsibility determination was
reasonable where based on an on-site preaward survey of protester's
facility which was conducted in conjunction with the award of a contract
for a similar product by a different agency, and on protester's
unsatisfactory past performance record with respect to production and
delivery.
2. Fact that termination for default under other contract has been
appealed to the Armed Services Board of Contract Appeals does not
eliminate such a termination as evidence of protester's
nonresponsibility.
3. Protester has not established bad faith on the part of the
contracting activity where the activity indicated an intention to
conduct an on-site preaward survey and such a survey of the protester's
plant facility was conducted with respect to a different procurement for
similar equipment. The decision of whether or not to conduct such a
preaward survey is discretionary with the contracting activity and the
nature and extent to which such a survey is to be used is a matter of
judgment for the contracting officer.
Herbert Bauer GmbH & Co. protests the rejection of its offer under
request for proposals (RFP) No. DAAA09-86-R-1241, issued by the
Department of the Army for the procurement of 24,400 bayonets. Bauer
alleges that the Army acted improperly in determining it to be
nonresponsible. We deny the protest.
Bauer was the low offeror under the RFP. The Army conducted a
short-form desk survey based on current information in its files which
resulted in a recommendation that no award be made to Bauer because of
its unsatisfactory technical, production, quality assurance and
financial capabilities. In addition, Bauer had failed two first article
tests under a different procurement for the same type of bayonets.
Bauer filed a protest with our Office alleging that it had not actually
failed the first article tests and that a proper preaward survey had not
been performed. We dismissed that protest as academic on December 15,
1986, in response to an Army submission which stated that no award would
be made until the first article test problem had been resolved under the
other contract, and that the contracting activity would request the U.S.
Army Contracting Agency, Europe (USACA), to perform a full on-site
preaward survey of Bauer's facilities.
Subsequently, Bauer failed another first article test under its other
bayonet contract, which resulted in the issuance of a termination for
default. Bauer filed an appeal of this termination which is pending
before the Armed Services Board of Contract Appeals (ASBCA). In
response to the procuring activity's request for an on-site audit of
Bauer's facility, USACA advised that it had just conducted a full
on-site preaward survey of Bauer's production facility on January 12,
1987, for a Marine Corps procurement of swords and scabbards; a no
award recommendation had resulted because of unsatisf actory findings
with respect to Bauer's technical, production and quality assurance
capabilities. Further, this on-site survey indicated that numerous
quality deficiency reports (QDR) (which had contributed to the earlier
no award recommendation under the short-form desk survey) were the
result of Bauer's systematic failure to understand the quality assurance
system. USACA concluded that these findings were equally applicable to
Bauer's bayonet production and, on April 14, a negative preaward survey
recommendation was issued based in part on the onsite survey. On May 1,
the contracting officer determined that Bauer was nonresponsible because
of technical, quality assurance, and past performance deficiencies,
based on the April 14 USACA recommendation and also on the fact that
Bauer had been terminated for default for failure to pass the first
article test for bayonets under the other contract, and that Bauer had
an extensive history of QDR's under recent contracts for products
similar to the bayonets.
The regulations provide that contracts shall be awarded to
responsible contractors only, and list several standards that a
prospective contractor must meet. Federal Acquisition Regulation (FAR),
48 C.F.R. Secs. 9.103 and 9.104-1 (1986). Those standards include a
satisfactory performance record, a satisfactory record of integrity and
business ethics, and the necessary quality assurance measures. FAR, 48
C.F.R. Sec. 9.104-1. The regulations place the burden on a prospective
contractor to affirmatively demonstrate its responsibility, FAR, 48
C.F.R. Sec. 9.103(c), and dictate that in the absence of information
clearly indicating that the prospective contractor is responsible, the
contracting officer shall make a determination of nonresponsibility.
FAR, 48 C.F.R. Sec. 9.103(b). Concerning past performance, the
regulations provide that a prospective contractor that is or recently
has been seriously deficient in contract performance shall be presumed
to be nonresponsible, unless the contracting officer determines that the
circumstances were properly beyond the contractor's control or that the
contractor has taken appropriate corrective action. FAR, 48 C.F.R. Sec.
9.104-3(c).
The determination of a prospective contractor's responsibility is the
duty of the contracting officer who is vested with a wide degree of
discretion and business judgment. While the determination should be
based on fact and reached in good faith, the ultimate decision should be
left to the discretion of the contracting agency because it must bear
the brunt of any difficulties experienced during the performance of the
contract. Firm Reis GmbH, B-224544; B-224546, Jan. 20, 1987, 87-1
C.P.D. P 72. The contracting officer also has broad discretion as to
whether or not a preaward survey should be conducted and, if conducted,
the degree of reliance to be placed on the results of the survey. Id.
Because of the broad discretion of the contracting officer in these
matters, our Office will not question a nonresponsibility determination
unless the protester can demonstrate bad faith on the part of
contracting officials, or that the determination lacks any reasonable
basis. Becker and Schwindenhammer, GmbH, B-225396, Mar. 2, 1987, 87-1
C.P.D. P 235.
With respect to the appealed default termination, we have
specifically held that while it does not necessarily require rejection
of a firm as nonresponsible, such a termination is a proper matter for
consideration in determining a contractor's responsibility, despite the
pending appeal with the ASBCA. S.A.F.E. Export Corp., B-209491;
B-209492, Aug. 2, 1983, 83-2 C.P.D. P 153. Accordingly, the default was
properly considered by the contracting officer. In view of the default
in conjunction with the negative preaward survey recommendation and
Bauer's record of QDR's on recent contracts, the contracting officer had
a reasonable basis for the nonresponsibility determination.
Bauer asserts that the contracting officer's conduct evidences bad
faith because of the failure to conduct the promised on-site audit
specific to bayonet production. A protester alleging bad faith on the
part of government officials bears a very heavy burden. It must offer
virtually irrefutable proof, not mere inference or supposition, that the
agency acted with specific and malicious intent to injure the protester.
The Aeronetics Division of AAR Brooks & Perkins, B-222516; B-222791,
Aug. 5, 1986, 86-2 C.P.D. P 151.
Here, the Army contends that it did, in fact, provide Bauer with the
on-site preaward survey which it had indicated that it would conduct.
We agree, since an on-site survey of Bauer's production facilities was
conducted by USACA subsequent to December 15, 1986, and a contracting
officer is entitled to rely on such a survey for different equipment
under a different procurement as a ground for a nonresponsibility
determination. S.A.F.E. Export Corp., B-209491; B-209492, supra.
Accordingly, such reliance does not constitute bad faith on the part of
the contracting officer.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Catamount Construction, Inc.
File: B-225498
Date: April 3, 1987
Contracting agency's unexplained failure to send the protester
amendments to invitation for bids where the protester twice requested
them effectively prevented the protester from competing and violated the
statutory mandate for full and open competition.
Catamount Construction, Inc. protests the award of a contract to
Gilbane Building Company, the low bidder, under invitation for bids
(IFB) No. N62472-86-B-0097, issued by the Navy for the construction of a
firefighting training facility at Newport, Rhode Island. Catamount's
second low bid failed to acknowledge four amendments to the IFB.
Catamount complains that despite its repeated requests for the
amendments, the Navy failed to furnish them or to read the amendments
over the phone prior to bid opening. Contending that its bid included
substantial amounts to cover increased requirements that might have been
included in the amendments, Catamount argues that the Navy should be
required to terminate the current contract and reissue a complete
solicitation under which Catamount has an opportunity to compete.
We sustain the protest because the Navy's unexplained failure to
furnish the amendments in response to requests by Catamount in advance
of bid opening effectively precluded Catamount from competing.
The IFB was issued on July 11, 1986, and specified a bid opening date
of August 12. The first amendment--issued on August 1--merely extended
the bid opening to August 19. The second amendment--issued 1 week after
the first--extended the work schedule, increased the requirements
regarding electric heating equipment, and further extended bid opening
to September 4 at 2:00 p.m. The third amendment changed the address for
submitting offers, while the fourth and final amendment--issued August
18--increased the requirements for roof insulation and added a
requirement for vapor barriers between the roof and the insulation.
On August 22, according to Catamount it called the issuing activity
and requested copies of the amendments which the Navy assured would be
mailed immediately. This seems to be verified by the Navy's report,
which contains a written memorandum of a telephone request by Catamount
on that date. Catamount further states, and the Navy does not dispute,
that it again called on August 28 because it had not yet received the
amendments, and was advised that the amendments had been mailed the
previous day.
Since the amendments had not arrived on the morning of September 3,
the day preceding bid opening, Catamount called the contract specialist
listed in the IFB. Catamount requested that the amendments be read over
the phone but both the Navy's contract specialist and the contracting
officer refused to relay them orally. Catamount's representative states
that he was led to believe the Navy "would arrange for the amendments to
be received by Catamount by September 4, 1986."
The Navy admits it refused to read the amendments over the telephone
and explains that its policy prohibited doing so. The Navy procurement
specialist who spoke to the Catamount representative states that
delivery by Federal Express was discussed, but says that the Navy agreed
to do so only if Catamount bore the cost, which Catamount refused to do.
As an alternative, the specialist states, Catamount was told it could
pick up a copy of the amendments from the Resident Officer in Charge of
Construction in Newport, Rhode Island (approximately 150 miles from
Catamount's location in Pittsfield, New Hampshire).
The Navy explains that when the amendments were sent to prospective
bidders, Catamount was not included in the mailing. According to the
agency, sometime after the solicitation was issued but prior to the
August 1 amendment, there was a computer overload and the portion of the
bidder's list which included Catamount was inadvertently deleted. The
Navy stresses that there was no deliberate or intentional effort to
withhold the amendments from Catamount, and argues that Catamount had a
reasonable opportunity to obtain the amendments before bid opening. In
this regard, the Navy points out that a notation on the Navy's
memorandum of Catamount's August 22 call indicates that the amendments
were mailed on September 3.
While the Federal Acquisition Regulation (FAR), 48 C.F.R. Sec.
14.208(a) (1986), provides that amendments shall be sent before the time
set for bid opening to everyone to whom invitations have been furnished,
this provision does not make the government a guarantor that bidders in
fact receive those amendments. See Marino Construction Company, Inc.,
61 Comp. Gen. 269 (1982), 82-1 CPD P 167; James L. Clark, Jr., Plumbing
& Heating Co. Inc., B-220673, Oct. 29, 1985, 85-2 CPD P 484. The
propriety of a particular procurement depends on whether full and open
competition was achieved and reasonable prices were obtained.
International Association of Fire Fighters, B-220757, Jan. 13, 1986,
86-1 CPD P 31. Full and open competition means that all responsible
sources are permitted to submit sealed bids or competitive proposals on
the procurement. 10 U.S.C. Sec. 2302(3); 41 U.S.C. Sec. 403(7) (Supp.
III 1985).
The standard of full and open competition requires an agency to take
reasonable steps to ensure that solicitation materials are made
available to all responsible sources, but is not so broad as to require
the agency to resolicit whenever it contributes to a prospective
bidder's failure to receive solicitation materials in a timely manner.
NRC Data Systems, B-222912, July 18, 1986, 65 Comp. Gen. , 86-2 CPD P
84. The fact that inadvertent mistakes occur in the process should not
in all cases be grounds for disturbing the procurement. Keener
Manufacturing Co., B-225435, Feb. 24, 1987, 87-1 CPD P .
Under certain circumstances, however, where a prospective bidder
requests solicitation documents on several occasions and the agency
fails to furnish them, the agency may effectively deny the prospective
bidder an opportunity to compete and thus violate the requirement for
full and open competition. See Trans World Maintenance, Inc., 65 Comp.
Gen. 401 (1986), 86-1 CPD P 239; Dan's Moving & Storage, Inc.,
B-222431, May 28, 1986, 86-1 CPD P 496. Those circumstances must be
such that the bidder availed itself of every reasonable opportunity to
obtain the documents. See NRC Data Systems, B-222912, supra. We think
this is such a case.
Although the Navy explains that the initial failure to mail Catamount
the amendments was the result of inadvertently omitting the firm from
the bidder's list, it has offered no explanation for its failure
promptly to mail Catamount the amendments in response to Catamount's
requests for them on August 22 and 28. The written record of
Catamount's August 22 call merely contains an annotation that all
amendments "were mailed" on September 3, the day preceding bid opening.
Moreover, even if as the Navy claims it subsequently offered to dispatch
the amendments by Federal Express on September 3 if the protester bore
the cost, we do not think that the amendments would have arrived in time
for Catamount to consider them and to submit its bid by bid opening on
2:00 p.m. the following day. 1/
Under the circumstances of this case, we conclude that the Navy
prevented Catamount from effectively competing and that therefore full
and open competition was not obtained. Although a contract was awarded
prior to the protest, we understand that performance was suspended for
other reasons and that no construction has occurred. We therefore
recommend that if feasible, the Navy terminate the contract with Gilbane
and resolicit the requirement using full and open competition. See Dans
Moving & Storage, Inc., B-222431, supra.
In addition, Catamount should be reimbursed the costa of filing and
pursuing the protest, including attorney's, fees, since our sustaining
the protest furthers the purpose of the statutory requirement for full
and open competition. See Tandem Computers, Inc., B-221333, Apr. 14,
1986, 65 Comp. Gen. , 86-1 CPD P 362. The protester should submit its
claim for such costs directly to the contracting agency. 4 C.F.R. Sec.
21.6(f) (1986).
The protest is sustained.
Comptroller General
of the United States
1/ The affidavit from the Navy contracting officer indicates that she
spoke with Catamount's representative between 11:00 and 12:00 p.m. on
September 3. The affidavit of the contract specialist does not indicate
what time the September 3 conversation took place.
Matter of: Repco, Incorporated--Reconsideration
File: B-225496.4
Date: October 19, 1987
Original decision denying protester's challenge to awardee's
technical acceptability and dismissing challenge to contracting
officer's affirmative responsibility determination is affirmed where
protester merely disagrees with decision and reiterates arguments raised
initially, but makes no showing that decision was based on error of fact
or law.
Repco, Incorporated requests reconsideration of our decision Repco,
Inc., B-225496.3, Sept. 18, 1987, 87-2 CPD P , denying in part and
dismissing in part Repco's protest of the award of a contract to Joslyn
Defense Systems, Inc. under request for proposals (RFP) No.
DAAA03-86-R-0059, issued by the Army for a radio fire alarm system at
the Pine Bluff Arsenal, Pine Bluff, Arkansas. We affirm our decision.
In its protest Repco argued that Joslyn failed to satisfy certain
requirements set out in the RFP. Specifically, Repco argued that Joslyn
would not furnish "standardcurrent-products" as required by the RFP
because its proposal designated one component of the system it offered,
the alarm/system logic board, as "to be designed." We found no basis to
object to the Army's decision that Joslyn's proposal was technically
acceptable despite the need to modify the circuitry design of its logic
board to meet the Army's specialized technical requirements as set out
in the RFP. In our view, the Army's decision to accept Joslyn's
proposal was based on a reasonable interpretation of the specifications
as a whole, since it was consistent with both the requirements to meet
the Army's specialized technical needs and to provide a standard,
current product.
As Repco states in its reconsideration request, the Army's position
regarding the design modification of Joslyn's board was submitted
unsolicited to our Office after the final protest submissions had been
received, and Repco did not have an opportunity to respond to it
directly. While Repco now challenges our reliance on the information on
this ground, Repco has offered no evidence refuting the Army's position
or our conclusion other than general unsupported statements reiterating
its initial argument that the Joslyn proposal failed to meet the
requirement for a standard, current product. Lacking such evidence,
Repco has failed to show that our original conclusion was in error. See
Bid Protest Regulations, 4 C.F.R. Sec. 21.12(a) (1987).
In the remainder of its protest, Repco alleged that Joslyn was not a
responsible firm since, despite statements to the contrary in its
proposal, Joslyn did not meet certain requirements in the RFP relating
to experience with fire alarm systems. As explained in our decision, we
review a contracting officer's affirmative responsibility determination
only if there is a showing that it was made fraudulently or in bad
faith, or that definitive responsibility criteria in the solicitation
were not met. 4 C.F.R. Sec. 21.3(f) (5). Since Repco agreed that there
was no evidence of fraud or bad faith and we found that the requirements
on which Repco based its challenge to Joslyn's responsibility did not
constitute definitive responsibility criteria, we concluded that there
was no basis to review the contracting officer's determination in this
case. In its request for reconsideration, Repco merely disagrees with
our conclusion that the requirements do not constitute definitive
responsibility criteria. As with its challenge to the acceptability of
Joslyn's logic board, discussed above, Repco's mere disagreement with
our conclusion provides no basis on which to disturb our decision.
Our decision is affirmed.
James F. Hinchman
General Counsel
Matter of: Repco Incorporated
File: B-225496.3
Date: September 18, 1987
1. Contention that awardee's proposal does not satisfy requirement in
specifications for standard, current product because one component is
listed as "to be designed" is without merit since reasonable
interpretation of requirement is that standard product may be modified
to meet specialized requirements set out in specifications.
2. In request for proposals (RFP) for radio fire alarm system,
provisions included in specifications requiring that equipment provided
consist of standard products of a manufacturer regularly engaged in
manufacture of radio fire alarm systems products, which has in service a
system similar to that called for by the RFP, do not constitute
definitive responsibility criteria since they do not set out specific,
objective standards for measuring offerors' capability to perform.
3. General Accounting Office will not review contracting officer's
affirmative responsibility determination where there is no showing that
it was made fraudulently or in bad faith, or that definitive
responsibility criteria in the solicitation were not met.
Repco Incorporated protests the award of a contract to Joslyn Defense
Systems, Inc. under request for proposals (RFP) No. DAAA03-86-R-0059,
issued by the Army for a radio fire alarm system at the Pine Bluff
Arsenal, Pine Bluff, Arkansas. We deny the protest in part and dismiss
it in part.
The RFP called for offers to furnish and install a radio fire alarm
system in accordance with the specifications set out in the RFP. Of the
five proposals received, the Army found only Repco's and Joslyn's
proposals technically acceptable. On April 24, 1987, award was made to
Joslyn as the lowest priced, technically acceptable offeror.
Repco contends that Joslyn does not satisfy the provisions set out in
section 2.4 of the specifications included in the RFP, which provides in
relevant part as follows:
"Standard Products: Material and equipment furnished shall be
the standard-currentproducts of one manufacturer regularly engaged
in the manufacture of radio fire alarm systems products and shall
essentially duplicate items that have performed satisfactorily in
the manner intended. . . . The Radio Fire Alarm System shall be
listed by the Underwriters Laboratories Inc. for fire alarm
service or other approved certified testing facility."
Repco maintains that Joslyn will not furnish all
"standardcurrent-products"; Joslyn is not regularly engaged in the
manufacture of fire alarm systems products; Joslyn does not have in
service any systems similar to the system called for by the RFP; and
Joslyn's system is not approved by Underwriters Laboratories (UL). 1/
With regard to the requirement for "standard-currentproducts," Repco
states that Joslyn's proposal designates one component of its system,
the alarm/system logic board, as "to be designed." As a result, Repco
argues, Joslyn's proposal shows that it will not meet the requirement to
provide all standard, current products. Since Repco contends that
Joslyn's proposal on its face took exception to a material requirement
of the RFP, we will review the proposal and the Army's evaluation to
determine whether the proposal as submitted reasonably could be
considered acceptable. See Clausing Machine Tools, B-216113, May 13,
1985, 85-1 CPD P 533.
According to the Army, the statement in Joslyn's proposal that the
logic board is to be designed did not affect its determination that
Joslyn's proposal was technically acceptable since it merely reflected
the need to modify any standard logic board, including Repco's, to
conform to the Army's specialized technical requirements as set out in
the specifications. In our view, the Army's position is a reasonable
interpretation of the specifications as a whole since it is consistent
with both the requirement to meet the Army's specialized technical needs
and to provide a standard, current product. See Clausing Machine Tools,
B-216113, supra. Accordingly, we see no basis to object to the Army's
determination that Joslyn's proposal was technically acceptable despite
its proposed design modification to the logic board.
To the extent that Repco also argues that, despite statements to the
contrary in Joslyn's proposal, Joslyn does not meet the other
qualifications in section 2.4--because it is not regularly engaged in
the manufacture of fire alarm systems products; it does not have a
similar system in service; and its system is not yet UL approved--Repco
is challenging the contracting officer's determination that Joslyn is a
responsible firm capable of performing as required. We will not review
a contracting officer's affirmative responsibility determination absent
a showing that it was made fraudulently or in bad faith, or that
definitive responsibility criteria in the solicitation were not met.
Bid Protest Regulations, 4 C.F.R. Sec. 21.3(f) (5) (1987); Ridge, Inc.,
65 Comp. Gen. 663 (1986), 86-1 CPD P 583. We see no basis to review the
contracting officer's determination here, since Repco concedes that
there is no evidence of fraud or bad faith, and as discussed below, the
provisions in section 2.4 of the specifications on which Repco relies do
not constitute definitive responsibility criteria.
Definitive responsibility criteria are objective standards
established by a contracting agency in a particular procurement to
measure the offerors' ability to perform the contract. C.R. Daniels,
Inc., B-221313, Apr. 22, 1986, 86-1 CPD P 390. Such criteria in effect
represent the agency's judgment that an offeror's ability to perform in
accordance with the specifications for that procurement must be measured
not only against the traditional and subjectively evaluated factors,
such as adequate facilities and financial resources, but also against
more specific requirements, compliance with which at least in part can
be determined objectively. Zero Mfg. Co.--Request for Reconsideration,
B-224923.2, Oct. 28, 1986, 86-2 CPD P 485. Here, the provisions in
section 2.4 of the specifications on which Repco relies do not set out
specific, objective standards measuring the offerors' ability to
perform; rather, the provisions express in general terms factors which
are encompassed by the contracting officer's subjective responsibility
determination. See King Fisher Co., B-205003, June 16, 1982, 82-1 CPD P
592 (bidder's ability to obtain UL approval is not a definitive
responsibility criterion); Patterson Pump Co., B-204694, Mar. 24, 1982,
82-1 CPD P 279 (general clause requiring submission of information
regarding offeror's "similar work" and "previous experience" is not a
definitive responsibility criterion); National Ambulance and Escort
Service, Inc., B-196511, Nov. 8, 1979, 79-2 CPD P 342 (requirement that
bidders be "regularly established in the business called for" is not a
definitive responsibility criterion). As a result, we find that the
provisions do not constitute definitive responsibility criteria.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
1/ The Army argues that the protest is untimely to the extent that
Repco alleges that Joslyn's system lacks UL approval, since the protest
was filed more than 10 days after Repco was notified that award had been
made to Joslyn, at which time, as Repco agrees, it was on notice of this
basis of protest. In any event, the Army argues, UL approval is a
performance requirement only, not a precondition to award. Repco agrees
with the Army that UL approval was not a precondition to award, and
states that it is not challenging Joslyn's technical acceptability based
on lack of UL approval. Instead, Repco states that it relies on
Joslyn's lack of UL approval as further evidence that Joslyn generally
lacks the capability to perform as required.
Matter of: T-L-C Systems--Reconsideration
File: B-225496.2
Date: July 28, 1987
1. Protest is dismissed where protester is not an interested party
since it did not submit a proposal, at least one proposal met the
solicitation's requirements and thus, the protester would not be in line
for award even if its protest were sustained.
2. Request for reconsideration filed more than 10 days after the
protester received notice of denial of its protest is dismissed.
T-L-C Systems protests the award of a contract to Joslyn Defense
Systems under request for proposals (RFP) No. DAAA03-86-R-0059 for a
computer based radio signaling fire alarm system for the Army. T-L-C
also, in the same document, requests reconsideration of our decision,
T-L-C Systems, B-225496, Mar. 27, 1987, 87-1 CPD P 354, in which we
denied the firm's protest against the provisions of that RFP. In our
prior decision, we rejected T-L-C's arguments that the procurement
should have been set aside for small business, that the agency should
have solicited sealed bids instead of competitive proposals and that a
solicitation requirement that equipment be certified by Underwriters
Laboratory (UL) or Factory Mutual (FM) was unduly restrictive of
competition. We dismiss the protest and the reconsideration request.
T-L-C protests the award to Joslyn made after our March 27 decision
was issued, contending that the equipment proposed by Joslyn is not
certified by UL or FM and has not been tested by the Electromagnetic
Compatibility Analysis Center. Further, T-L-C also argues that only one
of the other four offerors under the solicitation, Monaco Enterprises,
proposed to supply equipment which was tested and certified.
To be considered under our Bid Protest Regulations, a protest must be
filed by an "interested party," defined as an actual or prospective
bidder or offeror whose direct economic interest would be affected by
the award of a contract or by the failure to award a contract. 4 C.F.R.
Sec. 21.0(a) (1986). In determining whether a protester is interested,
so that it may have its protest considered, we examine the extent to
which there exists a direct relationship between the questions raised
and the party's asserted interest and the degree to which that interest
is established. In general, a party will not be deemed interested where
it would not be in line for award, even if its protest were sustained.
The Wollongong Group, B-224531, Dec. 18, 1986, 86-2 CPD P 682. Here,
T-L-C did not submit a proposal under the RFP and, it admits that at
least one offeror, Monaco Enterprises, proposed equipment that is
properly tested and certified and, presumably in the protester's view,
acceptable. 1/ Thus, even if we were to sustain T-L-C's protest and
recommend that the Army reject the Joslyn proposal, T-L-C would not be
in line for award. Accordingly, T-L-C does not have the direct economic
interest necessary to make it an interested party under our regulations,
and therefore, we will not consider the protest. See Automation
Management Corp., B-224924, Jan. 15, 1987, 87-1 CPD P 61.
We also will not consider the reconsideration request because it is
untimely. Under our regulations, a request for reconsideration must be
filed not later than 10 working days after the basis for reconsideration
is known or should have been known, whichever is earlier. 4 C.F.R. Sec.
21.12(b). Here, the grounds for reconsideration should have been known
to T-L-C when it received our March 27 decision. Since there is no
evidence to the contrary, we assume T-L-C received the decision within 1
calendar week of its issuance, or by April 3. Penn Perry,
Inc.--Reconsideration, B-223396.2, July 23, 1986, 86-2 CPD P 100. In
order for T-L-C's reconsideration request to have been timely filed, it
should have been received at this Office by April 17. Thus, the
reconsideration request, filed on June 25, was untimely. Bruce
Rahmani--Reconsideration, B-219312.5, Jan. 9, 1986, 86-1 CPD P 20.
The protest and the request for reconsideration are dismissed.
Ronald Berger
Deputy Associate
General Counsel
1/ T-L-C argues that since only one acceptable proposal was received,
the solicitation should be canceled and resolicited. As long as the
agency determines that the price submitted by a single acceptable
offeror under a solicitation is reasonable, the fact that only one
acceptable response is received does not prevent award under the
solicitation.
Matter of: T-L-C Systems
File: B-225496
Date: March 27, 1987
1. Protest that solicitation should be set aside for small business
is denied where the record does not show that contracting officer abused
his discretion in determining that there was no reasonable expectation
of receiving proposals from at least two responsible small business
concerns.
2. Sealed bid procedures are not appropriate where, based on a
previous attempt to procure equipment, the contracting agency believes
discussions are required.
3. Protest that solicitation requirement that fire alarm equipment be
certified by nationally recognized testing laboratory as meeting
National Fire Protection Association standards is unduly restrictive is
denied where the requirement was included because of safety concerns and
the protester offers no reason, other than its contention that
competition is restricted, why the standards or certification should not
be used.
T-L-C Sygtems protests the provisions of request for proposals (RFP)
No. DAAA03-86-R-0059, issued by the Army for a computer based radio
signaling fire alarm system for the Pine Bluff Arsenal. T-L-C contends
that the requirement should be set aside for small business and that the
agency should have solicited sealed bids instead of competitive
proposals. The protester also argues that a solicitation requirement
that equipment be certified by a nationally recognized testing
laboratory as meeting two specified National Fire Protection Association
standards (NFPA) is unduly restrictive. We deny the protest.
A number of proposals were submitted in response to the RFP. Award
has been withheld pending our decision.
T-L-C argues that the requirement should be set aside for small
business since on numerous occasions the government previously acquired
similar fire alarm equipment from such firms. In this regard, the
protester notes that there are at least four small business firms that
can supply equipment that will meet the agency's needs. The protester
contends that, of the seven firms listed on the agency's offeror's list,
four are actually small businesses. Thus, according to the protester,
there is sufficient small business competition to justify a set-aside.
As a general rule, the decision whether to set aside a particular
procurement is within the discretion of the contracting officer.
International Technology Corp., B-222792, June 11, 1986, 86-1 CPD P 544.
There are two situations, however, in which an agency is required to
set aside a specific procurement for small business. One is where a
contract has an anticipated value of $10,000 or less and is subject to
small purchase procedures. Federal Acquisition Regulation (FAR), 48
C.F.R. Sec. 19.501 (f) (1986). The other situation is where the item
has been previously acquired successfully by the contracting office on
the basis of a small business set-aside. FAR, 48 C.F.R. Sec. 19.501
(g).
Neither applies here. First, the procurement is valued at more than
$10,000. Second, FAR, 48 C.F.R. Sec. 19.501(g) requires that the same
item must have been acquired successfully through a small business
set-aside by the same "contracting office." Although T-L-C says that
numerous other military facilities have procured the equipment on a
setaside basis, the protester does not allege that the contracting
office at Pine Bluff Arsenal has ever purchased the equipment on a small
business set-aside. Thus, the requirement for a repetitive set-aside
does not apply. See Swan Industries, B-217199; et al., Mar. 25, 1985,
85-1 CPD P 346. In all other cases, the decision to set aside a
procurement is based on whether there is a reasonable expectation of
receiving proposals from at least two responsible small business
concerns and that award can be made at a reasonable price. FAR, 48
C.F.R. Sec. 19.502-2. That determination basically involves a business
decision within the broad discretion of contracting officials, and our
review generally is limited to ascertaining whether those officials have
abused that discretion. J.M. Cashman, Inc., B-220560, Nov. 13, 1985,
85-2 CPD P 554.
T-L-C maintains that the Army has failed to identify or has
misidentified several small business firms that might have been
interested in submitting offers on a set-aside. The Army based its
decision in large part on a prior procurement for identical equipment.
1/ According to the agency, it received only one acceptable offer from a
small business. We believe such prior related procurement history is an
appropriate consideration on which to make the judgment whether a
set-aside is warranted. J.M. Cashman, Inc., B-220560, supra. Further,
the small business utilization representative concurred in the
contracting officer's decision to not set aside the requirement.
Although T-L-C maintains that in fact several small businesses would
participate, including one which the agency considers to be large,
without any evidence of successful participation of more than one small
business in the prior procurement, we have no basis on which to question
the Army's judgment.
T-L-C also argues that the agency should have solicited sealed bids
instead of competitive proposals. According to the protester, other
agencies have used sealed bidding to procure the same equipment. T-L-C
says that competitive proposals should not be solicited where, as here,
the government has clear, concise specifications.
The Competition in Contracting Act of 1984 (CICA), 10 U.S.C. Sec.
2304(a) (Supp. III 1985), eliminates the previous statutory preference
for formally advertised procurements (now "sealed bids"), and allows
agencies to use the competitive procedure or combination of procedures
that is best suited for the circumstances of the procurement. CICA
further provides that sealed bids are appropriate only if the award will
be based solely on price or price related factors and it will not be
necessary to conduct discussions with offerors. Id. Thus, contrary to
T-L-C's contention, the use of sealed bids is not limited to
circumstances where clear and concise specifications cannot be written.
Moreover, based on the problems it had in getting an acceptable proposal
under the previous solicitation, the agency envisions the need to
discuss proposals with the offerors. The protester has made no showing
at all that the agency's judgment in this regard is unreasonable, and
we, therefore, will not question the use of negotiated procedures as
authorized by CICA. T-L-C Systems, B-223136, Sept. 15, 1986, 86-2 CPD P
298.
T-L-C maintains that only one manufacturer of fire alarm equipment
is, as required by the solicitation, listed by Underwriters
Laboratories, Inc. (UL) or Factory Mutual (FM) as conforming to NFPA
standards 72D and 1221. 2/ Thus, the protester concludes this
requirement is unduly restrictive of competition.
In preparing a solicitation for supplies or services, a contracting
agency must specify its needs and solicit offers in a manner designed to
achieve full and open competition, so that all responsible sources are
permitted to compete. 10 U.S.C. Sec. 2305(a) (1)(A)(i) (Supp. III
1985). Consequently, when a solicitation provision is challenged as
exceeding the agency's actual needs, the initial burden is on the
procuring agency to establish support for its contention that the
provision is justified. Daniel H. Wagner, Associates, Inc., 65 Comp.
Gen. 305 (1986), 86-1 CPD P 166. Once the agency establishes support
for the challenged specifications, the burden shifts to the protester to
show that the specifications in dispute are unreasonable. Information
Ventures, Inc., B-221287, Mar. 10, 1986, 86-1 CPD P 234.
We do not find that the protester has shown that the requirement that
the equipment have UL or FM approval as meeting the two NFPA standards
is unreasonable. In this regard, the Army argues that because of safety
concerns UL or FM approval under both NFpA standards was included by the
direction of the Army Materiel Command, Installations and Services
Activity, in accordance with Army Regulation 420-90 relating to fire
protection. The Army concedes that no manufacturer of the required
equipment is currently listed by UL or FM as complying with both NFPA
standards, although the Army maintains there is no technical reason why
a system could not comply with both standards. While the protester
disagrees with the agency's conclusion, other than its contention that
competition is restricted, it has not offered any reason why the
standards or the certification should not be used. Nor does the
protester contend that it could compete if the restrictions were
removed. In view of the impact of this alarm equipment on the safety of
personnel, and considering the fact that several offers have been
received, we do not think that the protester has shown that the agency
acted unreasonably in requiring its fire alarm equipment to be certified
as meeting the two NFPA standards.
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ The contract awarded pursuant to the prior solicitation was
terminated because the agency concluded the awarded had not met the
solicitation requirements. This protest concerns a resolicitation of
the requirement.
2/ This position appears to be inconsistent with the protester's
earlier contention that several small businesses could compete. We
assume that the prior argument was based on the protester's assumption
that the specification requirements it objects to here would be removed
from the solicitation.
Matter of: Protective Materials Co., Inc.
File: B-225495
Date: March 18, 1987
1. Agency decision in a procurement for construction of a new embassy
not to reopen negotiations after receipt of best and final offers to
give protester the opportunity to incorporate its late price
modification is not objectionable where record indicates that protester
had a fair opportunity to submit a best and final offer with its most
favorable terms by the closing date for receipt of best and final offers
and agency determined that any further delay in the procurement would
unreasonably jeopardize embassy construction project.
2. Where the acceptance period on all proposals has expired, the
contracting officer may allow an offeror to waive the expiration of its
proposal acceptance period without reopening negotiation to make an
award on the basis of the offer as submitted since waiver under these
circumstances is not prejudicial to the competitive system.
3. Allegation that agency improperly waived provision which requires
that successful offeror hire a single firm window fabricator with 5
years experience to assume responsibility for all components of window
work is denied where record shows that this provision was superseded by
a subsequent amendment to the solicitation and that all of ferors were
aware that the provision was no longer applicable.
4. General Accounting Office does not review affirmative
determination of responsibility absent a showing of possible fraud or
bad faith on the part of procuring officials or the misapplication of a
definitive responsibility criteria.
5. Protest filed with General Accounting Office more than 10 working
days after initial adverse agency action at that level is untimely and
will not be considered on the merits.
6. Protest against amended solicitation award scheme filed after
closing date established by the amendment is untimely.
7. To be considered an interested party to have standing to protest
under the Competition in Contracting Act of 1984 and GAO Bid Protest
Regulations, a party must be an actual or prospective bidder or offeror
whose direct economic interest would be affected by the award of the
contract or failure to award a contract. A potential supplier to a
government contractor which is not an actual bidder or offeror itself,
is not an interested party.
Protective Materials Co., Inc. protests the Foreign Buildings Office,
Department of State (FBO) selection of Export Technicians Inc. (ETI) as
a supplier of blast resistant windows and doors to FBO's prime
contractor, Kajima International Inc./ Kajima Corp. for the construction
of a new U.S. Embassy in Cairo, Egypt. We deny the protest in part and
dismiss it in part.
On April 29, 1986, FBO issued solicitation No. 86-FBO-CW for the
blast resistant windows and doors. Nine firms, including the protester,
submitted offer in response to the solicitation. By amendment No. 4 to
the solicitation, FBO advised offerors that the firm selected for award
would not enter into a contract with FBO, but instead FBO would nominate
the firm selected for award as a subcontractor to Kajima. 1/ Selection
was to be based on the low technically acceptable offer.
Seven firms including the protester submitted best and final offers
(BAFOs) by the August 19, 1986, closing date. ETI submitted the low
acceptable BAFO and Protective submitted the second low BAFO.
Subsequently, by letter of October 2, 1986, Protective submitted a new
unsolicited BAFO, offering price reduction below ETI's offer. By letter
of October 16, 1986, FBO rejected Protective's October 2, price
reduction as a late proposal modification. By a change order to
Kajima's construction contract issued on November 17, 1986, Kajima was
"instructed to accept the nominated subcontract offer of ETI" for supply
of the blast resistant windows and doors.
Protective protests FBO's refusal to consider its October 2, 1986,
price reduction. The firm argues that the "government erred in
rejecting its October 2, 1986, price reduction since by that time
all solicited offers had expired" and FBO had not completed negotiations
with Kajima to accept ETI as its subcontractor.
FBO argues that it properly rejected Protective's October 2 price
reduction submitted more than a month after the August 19 BAFO closing
date. FBO points out that the solicitation incorporated Federal
Acquisition Regulation (FAR), 48 C.F.R. Sec. 52.215-10 (1985), which
provides that a modification to a proposal resulting from the
contracting officer's request for BAFOs received after the time and date
specified in the request will not be considered except in circumstances
not applicable here. FBO also points out that given the length of time
this procurement had been in process over several months and the
agency's urgent need to proceed with the construction of a new secure
embassy building in Cairo, the decision was made not to delay the
procurement any longer by reopening negotiations to give Protective the
opportunity to incorporate its late price modification.
FBO also argues that it properly permitted ETI to waive the
expiration of its offer and on the basis of ETI's low technically
acceptable offer properly nominated that firm as a subcontrator to
Kajima.
We have held that an agency may, but is not automatically required
to, reopen negotiations with all offerors where one offeror submits a
late proposal modification that reduces its price. Rexroth Corp.,
B-220015, Nov. 1, 1985, 85-2 C.P.D. P 505. The decision to open
discussions in these circumstances is discretionary with the contracting
agency. Discussions need not be opened unless a potentially significant
proposed price reduction, or some other proposed modification, fairly
indicates that negotiations would prove to be highly advantageous to the
government. The Marquardt Co., B-224289, Dec. 9, 1986, 86-2 C.P.D. P
660; Mayden & Mayden, B-213872.3, Mar. 11, 1985, 85-1 C.P.D. P 290;
Data Technology Industries, Inc., B-197858, July 1, 1980, 80-2 C.P.D. P
2.
We find that FBO's determination not to consider Protective's
unsolicited October 2 price modification proper. In our view, FBO
reasonably determined not to reopen negotiations with all offerors
merely to consider Protective's price modification. The record shows
that Protective had a fair opportunity along with other offerors to
submit a BAFO with its most favorable terms by the August 19, 1986,
closing date. Moreover, the record further indicates that the reopening
of negotiations which, as noted above, would have been required to
permit consideration of the late modification, would delay the selection
of a subcontractor to provide blast resistant windows and doors and,
thus, hamper construction of an urgently needed secure embassy building
as well as further delay this procurement. We find no basis to question
the reasonableness of FBO's decision. See The Marquardt Co., B-224289,
supra; Data Technology Industries, Inc., B-197858, supra.
Further, we note that it is not improper for an agency to accept an
expired offer for a proposed award without reopening negotiations. We
have held that where, as here, the acceptance period has expired on all
proposals, the contracting officer may allow the successful offeror to
waive the expiration of its proposal acceptance period without reopening
negotiations to make an award on the basis of the offer as submitted
since waiver under these circumstances is not prejudicial to the
competitive system. Data Technology Industries, Inc., B-197858, supra.
Therefore, we cannot object to FBO's decision to nominate ETI on the
basis of its low technically acceptable BAFO where ETI waived the
expiration of its offer acceptance period.
Protective also protests that ETI does not meet the solicitation
quality assurance requirement that the successful offeror "engage a
single firm to assume undivided responsibility for all components of
window work . . . who can demonstrate not less than 5 years successful
experience in fabrication of window work similar to window work of this
project." The protester points out that ETI is not a window fabricator
but instead is a broker which intends to subcontract the window
fabrication to three different window component manufacturers.
Protective maintains that ETI cannot satisfy the above requirement that
a single firm assume full responsibility for all components of window
work and that FBO, in determining ETI the successful offeror, improperly
waived this requirement.
Initially, we note that this requirement for a single firm fabricator
was inserted by amendment No. 1, prior to the decision by FBO, by
subsequent amendment, to change the solicitation from a direct contract
with FBO to one in which FBO nominates the successful offeror as a
subcontractor to Kajima. Under the revised solicitation and executed
contract documents between Kajima and FBO, the prime contractor is
responsible for the supply and installation of the windows and the
window supplier is merely a subcontractor to Kajima. Thus, although not
specifically repealed, the quality assurance provision which ETI
allegedly failed to meet was superseded by a subsequent amendment and
actions of FBO, placing the responsibility for the window system on
Kajima. By amendment, ETI has no direct responsibility to the
government. In fact, the protester concedes that Kajima, not the
nominated subcontractor, is responsible for successful window
fabrication and installation. Under these circumstances, we find this
protest basis without merit.
Protective further contends that because ETI is a broker, it
generally lacks the capability and experience to perfrom the work.
Allegations of lack of capability and experience to perform concern
matters of responsibility. A contracting agency must make an
affirmative determination of an offeror's responsibility prior to
determining the successful offeror and our Office does not review such a
determination absent a showing of possible fraud or bad faith on the
part of contracting officials or that definitive responsibility criteria
contained in the solicitation were not met. Vulcan Engineering Co.,
B-214595, Oct. 12, 1984, 84-2 C.P.D. P 403. Neither exception applies
here.
Protective also alleges that in violation of Department of State
"security principles" and regulations, ETI and its subcontractors do not
hold certain security clearances. Our review of the solicitation
reveals no requirement for any specific security clearance and
Protective does not allege otherwise. In any event, because a security
clearance relates to a firm's ability to perform, whether a prospective
contractor has or has the ability to obtain any necessary security
clearances is a matter of responsibility which, as discussed above, we
will not review. 4 C.F.R. Sec. 21.3(f) (5). General Port Services
Inc.; General Offshore Corp, B-211627.3, B-211627.4, Sept. 26, 1984,
84-2 C.P.D. P 358; Richard A. Schwartz Associates, Inc., B-214979, June
29, 1984, 84-1 C.P.D. P 695.
Protective also protests the issuance of amendment No. 4 to this
solicitation. This amendment, as explained above, provides that the
firm nominated for award would not enter into a contract with FBO, but
instead FBO would nominate the firm selected for award as a
subcontractor to Kajima. Protective maintains that FBO's decision to
nominate a subcontractor rather than contract with a window supplier
directly, results in "unknown risks and costs for all offerors except
ETI" which had previously subcontracted with Kajima for the embassy
windows. The record indicates that while ETI previously subcontracted
with Kajima to supply windows for the embassy, ETI's contract was
terminated following FBO's decision to upgrade security requirements for
the windows. FBO subsequently issued the subject solicitation
reflecting its revised need for upgraded windows.
Protective also protests the request for BAFO's contained in the
amendment. Protective believes that award should have been made on the
basis of prices as initially submitted.
These bases for protest are untimely. The amendment was issued on
August 8, 1986. Prior to the August 19, 1986, BAFO closing date
established by the amendment, Protective timely protested to FBO the
decision to nominate the firm selected for award as a subcontractor and
the request for BAFO's contained in amendment. FBO proceeded with the
procurement and by letter dated September 5, 1986, denied Protective
protest.
Where, as here, a timely protest has been filed initially with the
contracting agency, any subsequent protest to our Office will be
considered if filed within 10 days after the protester receives notice
of adverse agency action. 4 C.F.R. Sec. 21.2(a) (3) (1986). Here,
FBO's continued receipt of BAFO's on August 19, 1986, constituted
initial adverse agency action, i.e., notice that FBO intended to proceed
with the procurement in the face of Protective August 14 protest against
the changes incorporated by the amendment. See TSCO, Inc., 65 Comp.
Gen. 347 (1986), 86-1 C.P.D. P 198. Therefore, Protective's protest
concerning this matter filed with our Office on November 18, 1986,
several months after initial adverse agency action, is untimely and will
not be considered on the merits. Likewise, Protective's protest that
FBO should have allowed Kajima to subcontract with any offeror FBO
determined technically acceptable is also untimely since it was not
filed prior to the closing date of the amended RFP which advised
offerors that FBO intended to nominate a subcontractor on the basis of
the low technically acceptable offer. 4 C.F.R. Sec. 21.2(a)(1).
Finally, Protective protests that Kajima is ineligible to contract
with the government to provide and install the windows and doors because
it is not a U.S. firm. In this regard, Protective argues that under the
Omnibus Diplomatic Security and Antiterrorism Act of 1986, Pub. L. No.
99-399, section 402, 100 Stat. 853, 864 (1986), only U.S. persons and
qualified U.S. joint venture persons may bid on construction or design
projects which involve physical or technical security. FBO states that
Kajima is, in fact, a U.S. firm.
Protective is not an interested party to protest this matter. The
Competition in Contracting Act of 1984 (CICA), 31 U.S.C. Sec. 3551
(Supp. III 1985), defines an interested party for Purposes of
eligibility to protest as an "actual or prospective bidder or offeror
who direct economic interest would be affected by the award of the
contract or by the failure to award the contract. This statutory
definition of an interested party is reflected in our Bid Protest
Regulations implementing CICA. See 4 C.F.R. Sec. 21.0(a). Since
Protective's status in this procurement is that of a potential supplier
of windows to Kajima (there is no indication that Protective is an
actual or prospective bidder or offeror for the general construction
services to be provided by Kajima and Protective does not allege
otherwise), it is not an interested party under CICA and our regulations
to protest the award to Kajima made 3 months before this solicitation
was issued. See George Enterprises--Request for Reconsideration,
B-225885.2, Jan. 20, 1987, 87-1 C.P.D. P .
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
1/ While normally our Office does not review the award of
subcontracts under our Bid Protest Regulations (4 C. F.R. Sec. 21.3(f)
(10)), where, as here, the procurement was conducted, proposals
evaluated, and the selection made, by FBO, we consider this to be a
subcontract "by" the government.
Matter of: Sperry Corporation--Reconsideration
File: B-225492.3
Date: June 29, 1987
Where in request for reconsideration of a decision denying its
protest, the protester fails to demonstrate legal error or provide any
information not previously considered, but only reiterates arguments
made and considered in the initial decision, the request for
reconsideration is denied.
Sperry Corporation requests reconsideration of our decision in Sperry
Corporation, B-225492, B-225492.2, Mar. 25, 1987, 87-1 C.P.D. P 341,
wherein we denied in part and dismissed the remainder of Sperry's
protest of an award of contract No. 61339-86-C-0148 to Gould Inc., by
the Naval Training Systems Center, Orlando, Florida, for a Trident
Submarine ship control team trainer with associated documentation, parts
and support services.
We deny the request for reconsideration.
Sperry's initial and supplemental protests raised numerous issues
which were either denied or dismissed as untimely in our prior decision.
In its reconsideration request, Sperry disputes the denial of two of
the protest bases. These two protest bases were that (1) the Navy
failed to perform a cost realism analysis of the fixed-price proposals
as allegedly required by the evaluation criteria in the request for
proposals (RFP) and (2) Gould's proposal was unacceptable because Gould
failed to provide with its best and final offer (BAFO) pricing for the
exhibit line item numbers (ELIN) for required data items on the Contract
Data Requirements List (CDRL), Department of Defense (DD) Form 1423.
With regard to the first point, we concluded that neither the RFP nor
applicable regulations required a detailed cost or cost realism analysis
of the fixed-price proposals. Sperry disagrees and contends that the
RFP required consideration of the completeness and realism of the
fixedprice proposals as a part of the cost evaluation. With regard to
Gould's failure to submit ELIN pricing with its BAFO, we found in our
prior decision that this failure did not adversely affect the
acceptability or price of Gould's proposal or the government's rights
under the contract. Sperry contends that since the RFP required fixed
prices rather than estimated costs for the data items, the ELIN prices
were contractually significant subline items of the contract schedule
prices and were intended to be part of the contract. However, as found
in the prior decision, Gould bound itself to deliver the data items by
submitting prices for the contract line and subline items.
Sperry has failed to demonstrate legal error or provide any
information not considered previously; it has essentially reiterated
arguments made and considered in the initial decision. Consequently, we
deny the request for reconsideration. 4 C.F.R. Sec. 21.12(a) (1986);
Buchanan Construction Co.--Request for Reconsideration, B-224171.3, Mar.
19, 1987, 87-1 C.P.D. P 309.
Harry R. Van Cleve
General Counsel
Matter of: Sperry Corporation
File: B-225492, B-225492.2
Date: March 25, 1987
1. An evaluation criteria designating cost/price as an evaluation
factor in a request for proposals soliciting fixed-price proposals means
the lower proposed fixed price will receive the most credit in the
evaluation; cost realism is not the evaluation factor and a cost
analysis is not required where there is adequate price competition. A
low fixed-price offeror cannot be rated lower or downgraded in the price
evaluation for source selection by virtue of its low price.
2. Where two acceptable offerors independently submit fixedprice
proposals under a request for proposals, adequate price competition
exists such that no cost analysis, but only a price analysis, need be
performed on the proposed price proposals.
3. Under GAO's Bid Protest Regulations, a protester must protest
within 10 working days of when it is informed of its basis for protest;
a protester may not wait until it obtains under the Freedom of
Information Act additional information pertaining to the protest before
filing the protest.
4. A protest that certain allegedly required information was not
submitted by the awardee with its proposal is timely filed under GAO's
Bid Protest Regulations, where the protester diligently pursues
obtaining a copy of the information under the Freedom of Information
Act, and the agency does not supply the information, erroneously tells
the protester that it has already supplied him with the information and
finally admits that the information was not submitted by the awardee,
since the protester filed the protest within 10 working days of
receiving the agency's admission.
5. The awardee's failure to submit pricing for data items on the
Contract Data Rights List (CDRL), DD Form 1423, with its best and final
offer for the contract does not adversely affect the acceptability or
price of the proposal or the government's rights under the contract,
where the awardee submitted acceptable CDRL pricing data with the
initial proposal, since CDRL pricing data is not part of the contract,
the cost of data items is included in contract line item prices, and the
purpose for obtaining such data prices is to evaluate the cost of data
items in terms of their management or product or engineering value to
the government.
Sperry Corporation protests the award of a fixed-price contract No.
N61339-86-C-0148 to Gould Inc. by the Naval Training Systems Center,
Orlando, Florida, for a Trident Submarine ship control team trainer with
associated documentation, parts and support services with an option for
an additional trainer. After receiving the agency report on the protest
and additional documentation under the Freedom of Information Act
(FOIA), Sperry supplemented this protest with additional protest
allegations.
We dismiss the protest in part and deny the remainder.
Four proposals were submitted in response to the request for
proposals (RFP) and only Sperry and Gould were found in the competitive
range. After discussions with these two offerors and best and final
offers (BAFO), Gould was awarded the contract on September 12, 1986.
After being debriefed, Sperry timely protested the award to this
Office on November 14, 1986. Sperry contended that the Navy did not
perform a detailed cost analysis on Gould's fixed-price proposal as
required by the evaluation scheme set forth in the RFP and thus did not
make an award in accordance with the RFP. Sperry claims that the Navy
considered Gould's proposed low price in making the award selection, but
the RFP required that "cost realism" be evaluated as the cost portion of
the award evaluation scheme.
The RFP required the submission of detailed cost and supporting data
which would be evaluated to determine if the proposed prices were
reasonable for the effort involved. Moreover, the RFP stated that
unrealistically low priced proposals would "be deemed reflective of an
inherent lack of technical competence or indicative of failure to
comprehend the complexity and risks of the contract requirements and may
be grounds for rejection of the proposal." The RFP weighted technical
design evaluation criteria as 40 percent of the total evaluation weight
and integrated logistics support and cost as 30 percent each and
provided:
"The Government desires to make award to that offeror
submitting the "best value" proposal. The
"best value" award shall be to that offeror submitting a better
technical proposal with appropriate considerations given to
cost/price and other factors...."
The record shows that the Navy combined technical and price factors
into a single formula to determine the "best value" for award selection.
Gould received a total technical score of 519.3 points after the
evaluation of the BAFO's, and proposed a fixed price of $8,400,176 while
Sperry's technical score was 513.9 points with a price of $11,159,657.
Consequently, Gould received the top score under the "best value"
formula and the award.
Where fixed-price contracts are solicited, "cost realism" ordinarily
is not considered in the evaluation since a firm fixed-price contract
provides for a definite price and this contract type places upon the
contractor the risk and responsibility for all contract costs and
resulting profit or loss. Corporate Health Examiners, Inc., B-220399.2,
June 16, 1986, 86-1 C.P.D. P 552. However, agencies, in their
discretion, may provide for a cost realism analysis in the solicitation
of firm fixed-priced proposals for such purposes as measuring an
offeror's understanding of the solicitation requirements. Id.
In this case, the agency reserved the right to downgrade technical
proposals where the offeror proposed unrealistically low prices.
Detailed cost backup to the proposed prices was solicited, furnished,
evaluated and discussed with the offerors. The Navy did not find
Gould's price was unrealistically low and did not downgrade Gould's
technical proposal because of its low price.
Although no cost analysis of the price proposals was performed, the
Navy found that Gould's proposed BAFO price was "fair and reasonable"
based upon a price analysis. The Navy did not perform a cost analysis
because it found there was adequate competition to indicate that Gould
was proposing a fair and reasonable price. See Federal Acquisition
Regulation (FAR), 48 C.F.R. Secs. 15.804-3(b); 15.805-1(b) (1986).
Since two acceptable offerors independently contended for award, the
Navy reasonably found that adequate price competition existed and the
extent of cost or price analysis was a matter left to its discretion.
See U.S. Nuclear Inc., 57 Comp. Gen. 185, 190 (1977), 77-2 C.P.D. P
511.
We do not agree with Sperry that the RFP required a detailed cost
analysis of the fixed-price proposals. Contrary to Sperry's contention,
cost/price as used in the award evaluation scheme in this RFP means the
lower fixed price receives the most credit in the evaluation; cost
realism is not the evaluation factor. See Francis & Jackson,
Associates, 57 Comp. Gen. 244 (1978), 78-1 C.P.D. P 79; Corporate
Health Examiners, Inc., B-220399.2, supra. The fact that detailed cost
backup was solicited does not imply that cost realism is the criterion
for evaluating the proposed fixed prices. Corporate Health Examiners,
Inc., B-220399.2, supra. In any case, we have held that a low
fixed-price offeror cannot be rated lower or downgraded in the price
evaluation for source selection by virtue of its low price. Litton
Systems, Inc., et al., 63 Comp. Gen. 585 (1984), 84-2 C.P.D. P 317;
Ball Technical Products Group, B-224394, Oct. 17, 1986, 86-2 C.P.D. P
465. Consequently, although unrealistically low prices could have been
considered in the technical evaluation, Gould's low fixed price could
not be given less credit in the price evaluation because of its lowness.
Therefore, this protest allegation is denied.
After receiving the agency report on the protest and certain
responses to FOIA requests, on December 24, 1986, Sperry submitted a
number of additional protest bases to our Office. Sperry protested that
(1) Gould's technical proposal does not meet the solicitation
requirements in six material respects; (2) the Navy may have conducted
improper oral discussions with Gould after the Navy's BAFO request and
prior to the receipt of BAFO's; (3) Gould failed to propose prices on
every contract line item number (CLIN) in the contract schedule as
required by the solicitation; and (4) Gould failed to propose prices on
any exhibit line item number (ELIN) for the data items on the Contract
Data Requirements List (CDRL), Department of Defense (DD) Form 1423, an
exhibit incorporated into the RFP. On February 3, 1987, after receiving
other documents under its continuing FOIA requests, Sperry protested
that discussions were conducted with Gould after award to obtain
responses to certain questions asked in discussions prior to receipt of
BAFO's.
The Navy claims that the December 24 and February 3 protests are
untimely filed under our Bid Protest Regulations. We agree with the
Navy that some of Sperry's supplemental protest bases are untimely.
Sperry's other supplemental protest bases are timely filed, but without
merit.
Sperry's protest that Gould's technical proposal does not meet the
solicitation requirements is untimely because it was filed more than 10
working days after Gould should have been aware of this potential basis
for protest. Sperry argues that the protest is timely because of the
piecemeal manner in which the Navy furnished Sperry with Gould's
technical proposal under FOIA. However, the record shows that the
portions of the Gould technical proposal on which Sperry bases its
protest were furnished to Sperry on October 29, 1986. Consequently,
this protest basis filed more than 10 working days later is untimely
under our Bid Protest Regulations and is dismissed. 4 C.F.R. Sec.
21.2(a)(2) (1986); Professional Review of Florida, Inc.; Florida Peer
Review Organization, Inc., B-215303.3, B-215303.4, Apr. 5, 1985, 85-1
C.P.D. P 394.
Sperry's December 24 protest that improper oral discussions were
conducted after the request for BAFO's is also untimely. This
contention is based solely upon references in Gould's BAFO to two
telephone conversations between Gould and Navy representatives. Sperry
contends that the summaries of the content of these conversations in
Gould's BAFO demonstrates that they were improper discussions which gave
Gould an unfair competitive advantage.
Since the record shows that Sperry received a copy of Gould's BAFO on
October 29, 1986, in response to its FOIA request, its December 24
protest of this matter is untimely filed under our Bid Protest
Regulations. 4 C.F.R Sec. 21.2(a) (2). Sperry argues that it did not
protest until it ascertained on December 11, 1986, under FOIA that the
Navy had no record of the two telephone conversations. However, where a
protester is already reasonably aware of a protest basis, it may not
wait until it obtains additional information pertaining to the protest
before filing the protest. Trend Construction &
Associates--Reconsideration, B-222817.2, May 8, 1986, 86-1 C.P.D. P 445.
Consequently, this protest basis is dismissed.
The Navy also contends that Sperry's February 10, 1987, protest that
improper post-award discussions were conducted is untimely. We
disagree.
On January 20, 1987, pursuant to its continuing FOIA requests, Sperry
received copies of Gould's answers to questions Nos. 39 through 42 that
were asked during written discussions prior to the request for BAFO's,
together with a letter dated January 7, 1987, from Gould supplying a
copy of these answers to the Navy. The answers had not been in the
earlier documents that had been supplied Sperry under FOIA.
The Navy contends that since Sperry's protest is based upon the
absence of these particular answers in earlier documents supplied to
Sperry, the protest is untimely since the absence of these answers was
evident. The Navy's timeliness argument is strained and misconstrues
Sperry's protest. Sperry is actually protesting that these answers had
apparently been first supplied the Navy by Gould on January 7, 1987, as
evidenced by Gould's forwarding letter, and thus constituted improper
post-award discussions of matters that should have been discussed and
resolved prior to the submission of BAFO's. Since Sperry protested this
matter within 10 working days of when it became aware that Gould had
supplied a copy of these answers after award, Sperry's protest is timely
under our Bid Protest Regulations, 4 C.F.R Sec. 21.2(a) (2).
However, this protest has no merit. The Navy has furnished an
affidavit of a Navy employee who participated in the technical
evaluation stating that the Gould answers to questions 39 through 42
were received and evaluated during preBAFO discussions and that he had a
copy of these answers in his files. Sperry has not shown that these
answers were not properly submitted by Gould as sworn by the Navy
affiant. Therefore, the contention that improper post-award discussions
were conducted is denied.
Sperry's protest of Gould's alleged failure to price all CLIN's is
untimely. The record shows that Sperry should have become aware of
Gould's failure to specifically price the CLIN's when it was furnished a
copy of Gould's contract on October 9, 1986, and Gould's BAFO on October
29, 1986. Consequently, Sperry's December 24 protest filed more than 10
working days later is untimely under our Bid Protest Regulations, 4
C.F.R Sec. 21.2(a)(2).
Sperry argues that it did not protest at that time because it was
still attempting to obtain Gould's ELIN pricing (discussed below) under
FOIA. Sperry argues that since many of Gould's unpriced CLIN's were for
data items listed on the CDRL's for which it had not yet obtained ELIN
pricing, it was reasonable to first obtain the ELIN's to ascertain if
there was a protest basis. Sperry explains that if the ELIN's existed
for the data encompassed by the unpriced CLIN's, this would undercut
this protest basis. However, as discussed above, a protester may not
wait until it obtains additional information under FOIA pertaining to
the protest before filing if it is already reasonably aware of the
protest basis. Trend Construction & Associates--Reconsideration,
B-222817.2, supra. Therefore, this protest basis is dismissed.
Sperry's protest concerning Gould's alleged failure to provide ELIN
pricing for the CDRL's is timely. The ELIN pricing was reasonably
encompassed by Sperry's initial September 29, 1986, FOIA request for
Gould's contract and proposal. When the ELIN prices were not included
in the documents supplied by the Navy under FOIA, Sperry on October 22,
1986, specifically requested these prices. On October 29, the Navy
erroneously advised Sperry that it had already provided Sperry with the
ELIN pricing. On October 31, Sperry again requested the ELIN pricing.
Finally, on December 5, the Navy admitted that Gould had not provided
ELIN prices for the contract with its BAFO. Sperry states that it did
not receive this advice until December 11. Consequently, Sperry's
December 24 protest of Gould's failure to provide ELIN pricing was filed
within 10 working days of when it received the Navy's admission.
Therefore, Sperry's protest of this point is timely since it diligently
and reasonably pursued this information under FOIA and protested as soon
as it became aware of this protest basis. E.C. Campbell, Inc.,
B-222197, June 19, 1986, 86-1 C.P.D. P 565.
However, this protest has no merit. The ELIN prices on the CDRL are
those prices inserted on the DD Form 1423 (Department of Defense Federal
Acquisition Regulation Supplement (DFARS), 48 C.F.R. Sec.
253.303-70-DD-1423) for individual items of data supplied under the
contract. The CDRL's describe each item of contract data and specify
such requirements as when, how many copies, how often, and where the
data item is to be delivered. The RFP required offerors to state an
estimated cost for each data item on the CDRL's and warned that if an
offeror failed to enter the required price information on the DD Form
1423 as part of its submission, and failed to do so on request, its
offer may be rejected.
Our review of the record reveals that Gould submitted pricing data on
the CDRL's in its initial cost proposal. However, the Navy admits that
Gould submitted no specific prices for the CDRL's incorporated as
exhibits in the contract. The Navy explains that Gould's prior
submissions were of sufficient merit for Gould to be included in the
competitive range and that Gould's pricing of the CDRL's had been
determined fair and reasonable. The Navy contends that the ELIN's did
not need to be separately priced in the contract, inasmuch as these
costs are also included in the CLIN's for the data items.
Sperry argues that the Navy was required to solicit and evaluate ELIN
pricing in the BAFO's, inasmuch as Gould lowered its initial proposed
price and there were several significant changes to the CDRL's after
initial proposals had been evaluated. In this regard, Sperry notes that
a BAFO supersedes previous acceptable proposals and contends that the
technical acceptability of a BAFO cannot be based upon the acceptability
of previous offers. Sperry contends that individual ELIN prices are
contractually significant so the government knows the price of each data
item in administering the contract.
We find that althouqh the data descriptions and delivery instruction
portion of the CDRL's are clearly contract requirements, the individual
ELIN prices are not intended to be part of the contract. In this
regard, paragraph 2 of the DD Form 1423 containing the CDRL's states:
"2. The contractor agrees that, regardless of whether he has
made any price entries . . . and regardless of what those
entries are, he is obliqated to deliver all the data listed
hereon, and the price he is to be paid therefore is included in
the total price specified in this contract."
As Sperry admits, the contract CLIN's include all ELIN costs.
Further, paragraph 3 of the DD Form 1423 states that the ELIN
prices,will not be separately used in the evaluation of offers." Indeed,
the purpose of the government's soliciting such pricing data is "to
evaluate the cost to the Government of data items in terms of their
management, product or engineering value." DFARS, 48 C.F.R. Sec. 215.871
(a) (1986). That is to say, a primary purpose of soliciting such
pricing data is for the government to assess whether it really needs
solicited data items when it is made aware of their costs. Indeed, the
estimated prices on the DD Form 1423 are not to be included in a
contract, see DFARS, 48 C.F.R. Sec. 215.871 (d); only the CDRL
descriptions and delivery instructions are included in the contract.
DFARS, 48 C.F.R. Sec. 204.7103-1.
Therefore, Gould's failure to submit individual ELIN pricing does not
adversely affect the acceptability of its proposal; Gould had already
submitted in its initial proposal sufficient ELIN pricing data to
satisfy the Navy's requirements. Moreover, since the data covered by
the ELIN prices is part of the CLIN prices, neither Gould's price nor
the government's rights under the contract are affected by Gould's
failure to separately price the ELIN's in its BAFO.
Sperry complains that during discussions it was requested to submit
further information concerning its CDRL's, while Gould was allowed to
omit ELIN prices in its BAFO. However, there is no requirement that an
agency hold the same kind of detailed discussions with all offerors,
inasmuch as the weaknesses and deficiencies, if any, in their proposals
may vary. Professional Review of Florida, Inc.; Florida Peer Review
Organization, Inc., B-215303.3, B-215303.4, supra. In any case, it
appears that the Navy perceived discrepancies in both Gould's and
Sperry's CDRL information and conducted discussions with both offerors
to satisfactorily resolve these deficiencies. Therefore, this protest
basis is denied.
Sperry's protest is dismissed in part and the remainder is denied.
Harry R. Van Cleve
General Counsel
Matter of: Shihadeh Carpets and Interface Flooring Systems, Inc.
File: B-225489
Date: March 17, 1987
1. Although General Accounting Office does not consider issues
relating to the acceptance of first articles or the modification of
specifications after award since these are contract administration
matters, allegations that a modification went beyond the scope of the
contract are reviewed since such a modification would represent a new
procurement.
2. Where a company protesting award to another bidder has a
fundamental disagreement with the contracting agency about the meaning
of certain specifications, the agency's interpretation of the
specifications, which are subject to varying interpretations, does not
constitute a cardinal change.
Shihadeh Carpets and Interface Flooring Systems, Inc., jointly
protest against the alleged waiver of provisions of solicitation No.
FNP-F5-1946-N-1-16-86 by the General Services Administration (GSA). The
solicitation was for the supply and installation of carpet tiles
containing an antimicrobial function at the Social Security
Administration, Philadelphia, Pennsylvania. Interface is the
manufacturer of the carpet tiles which Shihadeh offered. We deny the
protest.
The protesters allege that GSA accepted a first article test from the
awardee, Metropolitan Contract Carpets, Inc., despite the inadequacy of
Metropolitan's test report and the fact that it shows that the carpet
fails to comply with the specifications.
The purchase description contained in the solicitation states that
the carpet is to have a "permanent antimicrobial... protection" and that
the carpet "shall demonstrate antibacterial activity... and shall be
unaffected after carpet samples have been subjected to repeated washings
following recognized laboratory procedures."
The protesters take issue with the degree of protection afforded by
Metropolitan's carpet and the number of washings to which it was
subjected in testing. The protesters conclude that GSA waived these two
requirements and that the waiver constitutes a cardinal change to the
contract.
We do not consider issues relating to the acceptance of a first
article, or, generally, to the modification of specifications after
award, since they concern contract administration, an area we do not
consider under our protest function. 4 C.F.R. Sec. 21.3(f)(1) (1986);
Rubber Crafters, Inc., B-225421, Oct. 31, 1986, 86-2 C.P.D. P 508.
However, because a contract modification that goes beyond the scope of
the contract is tantamount to a sole-source award that may not be
justified, we will review an allegation that a modification goes beyond
the contract's scope and should be the subject of a new procurement.
Cray Research, Inc., 62 Comp. Gen. 22 (1982), 82-2 C.P.D. P 376.
In determining whether a changed contract would be materially
different from the contract originally awarded so that the modified
contract should be the subject of competition, for guidance, we have
looked to the "cardinal changes" doctrine developed by the Court of
Claims to deal with contractors' claims that the government breached a
contract by ordering changes that were outside the scope of the
contract's Changes clause. See American Air Filter Co., 57 Comp. Gen.
285 (1978), 78-1 C.P.D. P 136. The basic standard defined by the court
for determining when a cardinal change has occurred is whether the
modified work is essentially the same as the work for which the parties
contracted. See Air-A-Plane Corp. v. United States, 408 F.2d 1030 (Ct.
Cl. 1969).
Thus, where it is alleged that a proposed contract modification will
be outside the scope of the original contract, the question is whether
the original purpose or nature of the contract would be so substantially
changed by the modification that the original contract and the modified
contract would be essentially different. See American Air Filter Co.,
57 Comp. Gen. 285, supra, and ROLM Corporation, B-218949, Aug 22, 1985,
85-2 C.P.D. P 212.
Initially, we note that these GSA specifications for antimicrobial
carpet have been the subject of a recent decision by our Office in which
we sustained a protest filed by Interface. See Interface Flooring
Systems, Inc., B-225439, Mar. 4, 1987, 87-1 C.P.D. P . We found the
specifications were ambiguous and subject to varying interpretation by
bidders as to what constituted permanent antimicrobial protection and
"repeated washing." Therefore, we recommended that GSA revise the
specifications to more clearly set forth its requirements.
In this case, no protest was filed prior to bid opening, and all
bidders competed under the specifications that resulted in the award to
Metropolitan. While Shihadeh is now disputing GSA's interpretation of
the contract specifications, since these specifications are subject to
varying interpretations, we fail to see how GSA's interpretation
represents a cardinal change. The crucial question to be answered in
making a finding that a cardinal change occurred is whether the work, as
modified, is essentially the same work the parties bargained for when
the contract was awarded. Here, the work called for--the supply and
installation of carpet tiles--has remained the same. While Shihadeh
disputes the amount of antimicrobial protection that is required by the
specifications, the basic contract has not been changed. Compare
American Air Filter, 57 Come. Gen. supra, where we found a modification
which substituted a diesel engine for a gasoline engine, increased the
price by 29 percent, and doubled the delivery time, was a cardinal
change. No such major changes are involved here.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Pittman Mechanical Contractors, Inc.
File: B-225486
Date: February 25, 1987
1. An amendment which advised bidders of certain obvious conditions
affecting the removal and replacement of boilers is not material where
the IFB as issued required bidders to perform the work necessary to
remove existing boilers and install replacement boilers and expressly
warned bidders to inspect the work site to ascertain the difficulty and
cost of the work.
2. Low bidder's failure to acknowledge an amendment which had a
negligible affect on the quality of performance and price was properly
waived.
3. Protest basis first raised in protester's post conference comments
which could have been raised in its initial protest filed over a month
earlier is dismissed as untimely.
Pittman Mechanical Contractors, Inc., protests the award of a
contract to Pipe, Inc., under invitation for bids (IFB) No.
N62470-85-B5376 issued by the Navy. The IFB called for the removal of
two existing boilers (boilers No. 4 and 5) and installation of two new
boilers and renovation of the boiler building.
We deny the protest in part and dismiss it in part.
Pipe submitted the low bid in the amount of $1,067,000 and Pittman's
bid was second low at $1,137,000. Pittman argues that the Navy
improperly accepted Pipe's low bid because Pipe failed to acknowledge
amendment No. 4 to the solicitation which Pittman argues made several
material changes affecting the cost of the project.
The amendment added a "demolition note" to a floor plan drawing
contained in the solicitation to "remove an existing steel window and
door assembly directly in front of boiler No. 4" to allow for the
removal of that boiler and to reinstall the window/door assembly after
installing the new boiler. The amendment noted that the window/door
assembly in front of boiler No. 4 appears in a photograph contained in
the solicitation.
The amendment also added a note to a site plan drawing to remove two
guywires supporting a utility pole "as required to allow for removal of
old boiler No. 5 and installation of new boiler No. 5" and "provide
temporary support of the pole as required." The amendment further stated
that high build glaze coating is called for where the term "epoxy paint"
is indicated. Finally, the amendment added the following under the
"Products" section of the solicitation: "Pumps: In the first line,
immediately following "MIL-P-17552," insert the following: "Type
II-boiler feed type, Style 1-horizontal split case style."
Pittman argues that the cost to remove and reinstall the window/door
assembly in front of boiler No. 4 as required by the demolition note in
amendment No. 4 adds over $20,000 to the cost of this project. In this
regard, the firm points out that the floor plan drawing contained in the
original solicitation shows an opening wide enough to remove the boiler
without removing the window/door assembly. Further, while the original
solicitation contains photographs of the boiler building, "it is
impossible to tell from those photographs whether there is a single
large door or some other sort of door assembly that would allow boiler
No. 4 to be removed easily or whether the entire assembly would have to
be demolished and removed by someone."
With respect to removing the guywires to gain access to boiler No. 5,
resulting in the need for temporary support to the utility pole, the
protester points out that prior to the addition of this note in
amendment No. 4, the solicitation merely required the shortening of one
of the guywires to allow vehicular access to a storage room garage door.
The firm thus argues that amendment No. 4 added a new requirement to
remove both guywires supporting the utility pole and provide temporary
support for that pole which according to the protester costs over
$6,000.
Finally, the protester states that the high build glaze coating
required by amendment No. 4 costs over $960 more than the epoxy paint
originally specified in the solicitation. The protester concludes that
the cost of the changes added by amendment No. 4 could increase the
contract price by over $28,300, more than 40 percent the $72,000
difference between the two low bids.
The agency responds that the demolition and site plan drawing notes
added by amendment No. 4 did not alter or change the basic contract
requirement stated in the solicitation that the successful contractor
"provide and secure demolition and removal of two existing boilers and
install 2 new boiler systems complete and ready for use." The agency
states that the demolition and site plan drawing notes added by
amendment No. 4 merely provided bidders with information affecting the
condition of the worksite. For example, to remove boiler No. 4 from the
boiler building, the window and door assembly directly in front of the
boiler would have to be removed and in order to gain access to and
remove boiler No. 5, certain obstructing guywires would have to be
temporarily removed. The agency maintains that with or without this
information, under the terms of the original solicitation the contractor
is responsible for removing the old boilers and installing the new
boilers and assessing the difficulty of the task.
As to the protester's final argument, the Navy asserts that the
amendment language was merely a clarification of a previously stated
contract requirement since the original IFB provision at issue already
was entitled "High Build Glaze Coatings" and the amendment explained the
Navy's intent that wherever the term epoxy paint was used, it meant high
build glaze coating.
A bidder's failure to acknowledge a material IFB amendment renders
the bid nonresponsive, since absent such an acknowledgment the
government's acceptance of the bid would not legally obligate the bidder
to meet the government's needs as identified in the amendment.
Maintenance Pace Setters, Inc., B-213595, Apr. 23, 1984, 84-1 C.P.D. P
457; Four Seasons Maintenance, Inc., B-213459, Mar. 12, 1984, 84-1
C.P.D. P 284. An amendment is material, however, only if it would have
more than a trivial impact on the price, quantity, quality, delivery or
the relative standing of the bidders. See Federal Acquisition
Regulation (FAR), 48 C.F.R. Sec. 14.405 (1986); Wirco, Inc., B-220327,
Jan. 29, 1986, 65 Comp. Gen. , 86-1 C.P.D. P 103. An amendment is not
material where it does not impose any legal obligations on the bidder
different from those imposed by the original solicitation, that is, for
example, it merely clarifies an existing requirement. Maintenance Pace
Setters, Inc., B-213595, supra. In that case, the failure to
acknowledge the amendment may be waived and the bid may be accepted.
Emmett R. Woody, B-213201, Jan. 26, 1984, 84-1 C.P.D. P 123.
We do not find that the drawing notes added by amendment No. 4
imposed any legal obligation different from that imposed under the
original solicitation. We agree with the Navy that the original
solicitation legally obligated the contractor to remove the old boilers
and install the new boilers. The contractor was responsible for
removing any obstructions to removal and replacement of the boilers. In
this regard, the IFB, in at least two places, warned bidders to inspect
the site and take "other steps as may be reasonably necessary to
ascertain the nature and location of the work in general and local
conditions which could affect the cost" of the work. The IFB further
warned bidders that the failure to do so "would not relieve bidders from
responsibility for estimating properly the difficulty and cost of
successfully performing" the work. The IFB also provided photographs
depicting the boiler building and site plans drawings to provide the
fullest information possible as to the work involved and potential
performance difficulties to be considered by bidders.
Here, the protester does not argue that the boiler removal work could
be accomplished without removal of the window/door assembly and
guywires. Further, the record indicates and the protester does not
refute that these conditions affecting the removal and installation of
the boilers were reasonably ascertainable from a site inspection and,
thus, already were known or should have been known to bidders regardless
of the amendment. The unrevised IFB clearly advised bidders to make a
site inspection and warned of the consequences of not examining the
site. Thus, bidders were on notice of obvious conditions such as
guywires, poles and windows which affected the removal and replacement
of boilers and, regardless of the amendment, should have assessed the
cost of temporarily removing these obstructions to perform the boiler
replacements. Therefore, we do not find the drawing notes added to
amendment No. 4 material. See Maintenance Pace Setters, Inc., B-213595,
supra.
As explained above, an amendment is material if it affects the cost
of or quality of performance in more than a negligible way. See e.g.,
Power Service, Inc., B-218248, Mar. 28, 1985, 85-1 C.P.D. P 374; Doyon
Construction Co., Inc., B-212940, Feb. 14, 1984, 84-1 C.P.D. P 194.
Concerning the high build glaze coatings requirement, even assuming
that the protester is correct that the amendment constitutes a change in
the painting requirement and its estimate of $960 as the cost of the
change is correct, this estimated increase is de minus as to both the
given total cost of the work and the difference between Pittman's and
Pipe's bids. See Power Service, Inc., B-218248, supra.
The protester also argues that there is a qualitative difference in
these type of finishes. The record is not clear on this point;
however, we find the high building glaze coating requirement to be
negligible in the context of this contract. The high build glaze
coating essentially is a finishing coat for the bathroom/locker rooms in
the boiler building and we cannot conclude that the type of finish on
these facilities materially affects the quality of work under this
contract which primarily concerns removal and replacement of boilers.
See Power Services, Inc., B-218248, supra.
Finally, in its conference comments, Pittman raises for the first
time, an allegation that the amendment requirement for a "type II-Style
I" boiler feed pump is a material requirement which cannot be waived.
The protester argues that this protest allegation is not new and was
encompassed by its original general protest against the agency's waiver
of the amendment. We find this ground for protest untimely.
Under our Bid Protest Regulations, 4 C.F.R. Sec. 21.2(a)(2) (1986), a
protest must be filed within 10 working days of the date the protester
was aware or should have been aware of the basis for its protest.
Pittman's original protest filed on November 13, 1986, specified the
three previous grounds of protest concerning the amendment's alleged
materiality which are addressed in this decision. While the protester
argues that we should now consider its arguments in its January 7, 1987,
protest conference comments that the amendment requirement for a "type
II-Style I" boiler feed pump is material, our regulations do not
contemplate the piecemeal development of protest issues. Contel
Information Systems, Inc., B-220215, Jan. 15, 1986, 86-1 C.P.D. P 44.
Since this issue was not raised in Pittman's November 13 protest, but
clearly could have been, it is untimely and not for our consideration.
Arndt & Arndt, B-223473, Sept. 16, 1986, 86-2 C.P.D. P 307; Contel
Information Systems, Inc., B-220215, supra.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
Matter of: VARTA Batterie AG
File: B-225484
Date: March 19, 1987
Protest that offer for an "equal" product was improperly accepted is
denied where protester is unable to show that agency's technical
judgment that awardee's product meets the solicitation's salient
characteristics is unreasonable.
VARTA Batterie AG protests the award of a contract to Firm Helmut
Gessler GmbH by the Army under request for proposals (RFP) No.
DAJA37-86-R-0834, for nickel cadmium batteries to supply power for
moving firing range targets. VARTA contends that the batteries offered
by Gessler do not meet the solicitation's requirements. We deny the
protest.
The solicitation's amended schedule reads as follows:
NATO Stock # 6140-12-172-9060 Must meet DIN 29831B VARTA #
3343409140 or equal
NATO Stock # 6140-12-183-4058 The battery cell must meet the
specifications of VG95238-T-27 VARTA # 3343406000 or equal"
This was the entire purchase description in the solicitation; no
other technical specifications or requirements were set forth.
Eight firms submitted proposals. Three offerors, including Gessler,
offered batteries made by SAFT, a French company, as "equal" to the
brand name items. These prooosals were submitted to the agency
engineers for technical evaluation. The technical evaluation report
states that the SAFT batteries offered by Gessler and the other two
firms are "technically acceptable." Award was made to Gessler as the low
offeror.
VARTA principally contends that the SAFT batteries offered by Gessler
are not equal to the listed VARTA brand name products because they do
not meet the requirements of the purchase description. VARTA argues,
for instance, that VG 95238-T-27 (VG-27) and DIN 29381B (DIN), which are
a part of the purchase description for the 12 volt and the 24 volt
batteries, respectively, require the batteries to comply with VG
95238-T-10 (VG-10), which in turn, according to the protester, mandates
a battery cell design that allows adjustment of the electrolyte level at
any state of charge. According to VARTA, the electrolyte level of the
SAFT batteries can only be safely adjusted at the end of the charge
cycle.
Under a brand name or equal solicitation products offered as "equal"
must meet the "salient characteristics" of the brand name product. See
Hedco, Hughes Electronic Devices, Corp., B-221332, Apr. 7, 1986, 86-1
CPD P 339. Although here the solicitation did not contain a list of
salient characteristics explicitly designated as such, it stated that
"equal" products must meet either VG-27 or DIN, both of which
incorporate extensive standards. When a solicitation sets forth
particular features of a brand name item, these are presumed to be
material and essential to the government's minimum needs. Western
Graphtec, Inc., B-216948 et al., Apr. 2, 1985, 85-1 CPD P 381. Thus,
the standards incorporated by VG-27 or DIN are salient characteristics
required to be met by products offered as "equal." In determining
whether a particular item meets the solicitation's technical
requirements set forth in the salient characteristics, a contracting
agency enjoys a reasonable degree of discretion and we therefore will
not disturb its technical determination unless it is shown to be
unreasonable. Panasonic Industrial Co., B-207852.2, Apr. 12, 1983, 83-1
CPD P 379. Further, the protester must show that the agency's
determination is unreasonable; the protester's mere disagreement with
the agency's technical judgment does not make it unreasonable. Rowe
Industries, B-215881, Oct. 24, 1984, 84-2 CPD P 464.
VG-27 and DIN incorporate standard VG-10 which states: 1/
"The battery must be so designed, that it is possible to adjust
the electrolyte level with purified water to at least the upper
edge of the separator regardless of the state of charge of the
battery, and must preclude the possibility of electrolyte escaping
from the battery during subsequent charging with the vent plug
removed."
VARTA argues that the SAFT batteries do not comply with this standard
since adjustment of electrolyte in these batteries is not permitted at
any state of charge but only near the end of a charge. VARTA says that
if water is added to the electrolyte at the wrong time the design of
SAFT's batteries does not "preclude the possibility of electrolyte
escaping from the battery during subsequent charging." In support of its
position, the protester cites the SAFT battery maintenance manual which
states at section 3.5:
"ELECTROLYTE LEVEL ADJUSTMENT CAUTION: The addition of water
by any method other than that given below is prohibited as it may
cause spewing and loss of electrolyte during overcharge.
The electrolyte is at its maximum level and is most uniform
from cell to cell near the end of the recommended constant current
charge with the charging current still flowing. . . . Therefore,
the level may now be most accurately adjusted with a minimum of
variation from cell to cell."
We do not think that this shows that the SAFT battery fails to meet
the VG-10 standard. Although the SAFT manual cautions that electrolyte
adjustment is prohibited by any other than the described method, it does
not specifically prohibit adjustment at other than the end of a charge.
Rather, the manual says that the electrolyte may be most accurately
adjusted near the end of the charge. Moreover, as the Army explains,
VARTA's manual also says that electrolyte "leveling shall be done 15
minutes before the end of charge." In both cases it appears that the
best time to add to the electrolyte is just before the end of the
charge. According to the SAFT manual, the result of adding to the
electrolyte at other than the specified time is not, as the protester
contends, the loss of electrolyte during subsequent charging, but
possible loss during overcharge. There is no warning in the manual that
electrolyte could be lost during normal charging. VG-10 specifically
states that adjustment of electrolyte must not result in loss during
subsequent charging. Consequently, VARTA has not shown that the SAFT
hattery will not meet the VG-10 standard for electrolyte adjustment.
VARTA also contends that batteries offered as "equal" are required to
have a steel spring battery cell vent plug and that SAFT's batteries are
unacceptable because they use a rubber seal vent plug. According to the
protester, a rubber seal is not as safe since it does not have the same
blow-off pressure as the steel spring design.
VG-95238-T-3 (VG-3), which is incorporated into the solicitation by
VG-27, describes three vent plug designs, designated as "B," "C," and
"D." VARTA argues that under VG-10 (also incorporated by VG-27), only
design "C" which employs a steel spring (SAFT uses design "D" which uses
the rubber seal) is acceptable. As we read the portions of the
standards which have been included in the protest record there is no
clear requirement that design "C" be used. As indicated above, designs
"B", "C" and "D" all seem to be listed as acceptable. The only other
evidence supplied by the protester in support of its view is a single
page from an unidentified document. This page, which is not in English,
contains a chart which seems to link design "C" with VG-10, but contains
no explanation. We do not think that is sufficient to show that the
agency's conclusion that the rubber seal design is acceptable is
erroneous.
Both the protester's and the Army's submissions contain extensive
arguments concerning whether the SAFT batteries have been certified
under the French National Specification, AIR 8421, and whether a battery
certified under that specification is listed in NATO, AStanP-3, Annex I
or Annex II. Neither party has made clear either the relationship among
these various documents or the impact of this debate on the other
protest issues. We think, however, that the Army is attempting to argue
that even if the SAFT batteries do not meet the specific VG standards
regarding electrolyte adjustment and vent plug design, they are
nevertheless acceptable because they are certified under AIR 8421,
which, according to AStanP-3, means the batteries are equal in
performance to those meeting VG-27. While it is clear that the
protester disagrees, we need not decide the matter because we have
decided that the agency's conclusion that the SAFT batteries meet the
VG-27 requirements both for electrolyte adjustment and vent plug design
is not unreasonable.
Finally, in its initial protest letter, VARTA also argued that: (1)
SAFT's battery cells are not interchangeable with VARTA cells hecause
SAFT cells are 6 millimeters shorter; (2) VARTA batteries include a
guarantee of 10 year parts availability, while SAFT has no similar
guarantee; and (3) vent plug tools used with SAFT batteries are not
compatible with VARTA's vent plugs. Although the Army responded to
these allegations in its report on the protest, VARTA offered no further
argument or evidence in support of these contentions and, thus, appears
to have abandoned these issues. The Big Picture Co., Inc., B-220859.2,
Mar. 4, 1986, 86-1 CPD P 218.
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ There is a complex relationship among all these standards, the
exact nature of which has not been made clear by either the agency or
the protester. In any event, no party disputes that the above-cited
standard for electrolyte adjustment governs.
Matter of: Colt Industries
File: B-225483
Date: March 16, 1987
Bid should not be rejected as nonresponsive merely because a drawing
accompanying the bid contained a restriction on its disclosure where the
drawing is not necessary to evaluate the bid. Cancellation of
invitation for bids (IFB) because agency determined all bidders were
nonresponsive to drawing requirement is not justified where the drawing
is not necessary for evaluation of bids. Therefore, the agency should
reinstate IFB and make award to the low, responsive bidder eligible for
award.
Colt Industries protests the decision of the Jacksonville District,
Army Corps of Engineers, to cancel invitation for bids (IFB) No.
DACW17-86-B-0049 for the replacement of operating machinery for a
pumping station in Florida, and to resolicit the requirement under a
request for proposals. We sustain the protest.
The Army canceled the solicitation because it determined five
bidders, including the low bidder, Electricon Corporation, to be
nonresponsive to the IFB's requirement for an installation layout
drawing. The contracting officer found Colt, the second low bidder,
nonresponsive because the installation layout drawing Colt submitted
contained a restrictive legend providing that:
"... This material is CONFIDENTIAL and contains proprietary
information and other rights which are the sole and exclusive
property of Colt ... a ny reproduction, use, copying or
disclosure to others is forbidden without the prior written
consent of an officer of Colt ."
The contracting officer rejected the other bids because none of these
bids contained the drawing.
Colt argues that the drawing was not needed to determine the
essential nature of its product, and that other unrestricted information
in the bid was adequate for that purpose.
The IFB contained the standard provision advising that descriptive
literature, including drawings, required elsewhere in the solicitation
must be included with the bid and that failure to submit descriptive
literature to show the product offered conformed to the requirements of
this solicitation required rejection of the bid. The IFB provided that
the following drawings and descriptive literature, among other things,
should be furnished:
"(a) Print of a drawing of the complete station in plan showing
the major items of equipment the contractor proposes to furnish.
"(c) The above drawings should show the overall dimensions of
major individual items and such other dimensions as are necessary
to show that the machinery to be furnished could be properly
installed in the space provided in the station without major
dimensional changes of the structure...."
The agency report contains two opinions in response to the protest.
The contracting officer asserts that the drawing was a material
requirement and thus rejection of Colt's bid was proper. He states that
the drawing was required to show how each bidder's particular machinery
would fit into the pump station, its exact layout, the location of air
intake exhaust systems and other important equipment. The contracting
officer points out that Colt's placing of a restrictive legend on its
bid drawing rendered the bid nonresponsive under Federal Acquisition
Regulation (FAR), 48 C.F.R. Sec. 14.404-4 (1986) and decisions of our
Office, see, e.g., Computer Network Corp., B-183639, Nov. 12, 1975, 75-2
C.P.D. P 297, which, in effect, provide that where the descriptive
literature is necessary to disclose the essential nature and type of
system offered, a restriction on the descriptive literature is a proper
basis for finding the bid nonresponsive.
The agency report, however, also contains a statement from the chief
counsel, Army Corps of Engineers, who disagrees with the contracting
officer. Based on an Army technical opinion, the chief counsel states
that the layout drawing was unnecessary to permit other bidders to
understand the nature and type of equipment Colt bid. The chief counsel
asserts that dimensions shown for the equipment in other descriptive
literature were adequate to permit a determination that the equipment
proposed would fit into the existing pump station layout, which was the
stated purpose for requiring the drawing. The chief counsel states that
the layout drawing contains no unique information considered necessary
to assure the government that the equipment would meet its needs. Thus
he concludes that the drawing requirement was immaterial and thus the
contracting officer should be required to review the bids and make an
award to the low bidder if it is otherwise responsive.
We have held that where requested descriptive data such as a drawing
is not actually needed for bid evaluation purposes, it should be
considered informational, and failure to furnish such information does
not prevent acceptance of a bid where the bidder would be otherwise
bound to perform in accord with the IFB. Patterson Pump Co., B-218388,
May 6, 1985, 85-1 C.P.D. P 504; Patterson Pump Co., B-216133, et al.,
Mar. 22, 1985, 85-1 C.P.D. P 333.
We are persuaded by the chief counsel's argument that information
required under other provisions of the IFB provided the same information
required by the drawing. For example, another portion of the IFB
descriptive data provision specifically required bidders to provide
"approximate weights, dimensions and other data" for the diesel engine
and gear transmission unit bid, two major items to be replaced under the
contract. The record also indicates the Corps knew that the protester's
equipment would fit into the station. The specifications named three
brand name engines which would meet agency needs including a Colt
engine. The chief counsel points out that, by designating specific
brand name engines, the Corps admittedly already knew that these three
engines would fit in the pump station. We further note that although
Colt's restricted drawing provides no equipment dimensions, the
contracting officer did not reject Colt's bid because he objected to its
sufficiency, but because the drawing contained the restrictive legend.
We therefore sustain Colt's protest. We find that the determination
that Colt's bid was nonresponsive was incorrect because the drawing was
not required for determination of bid acceptability. We recommend that
the contracting officer reinstate the IFB and reevaluate the bids to
determine which firm submitted the low, responsive bid and make an award
to that firm if otherwise eligible for award.
Colt, the second low bidder, in its comments to the agency report,
filed January 2, 1987, there argues, for the first time, that the low
bidder, Electricon, may be nonresponsive for a number of reasons such as
failing to identify certain equipment in its bid, or may be ineligible
for award because on October 20, its parent company was allegedly
debarred from government contracting. Since this issue was not raised
by Colt until its comments, the agency has not had an opportunity to
respond to this issue.
As we have indicated, Electricon's bid (among others) was rejected
because it lacked an installation layout drawing which was not needed to
determine the responsiveness of its bid. We do not know which firm the
Corps will determine to be the low, responsive and responsible bidder
eligible for award under a reevaluation of bids under the reinstated
solicitation. However, in evaluating the bids, the Army should consider
Colt's contentions concerning Electricon's alleged nonresponsiveness.
The protest is sustained.
Comptroller General
of the United States
Matter of: Environmental Technology Corp.
File: B-225479.3
Date: June 18, 1987
1. Protest that agency should have offered the opportunity for a live
test demonstration only to the highest-ranked offeror, rather than to
all offerors in the competitive range, is untimely where filed more than
10 working days after protester knew that all offerors would have such
an opportunity.
2. Protest that contracting agency improperly considered the results
of a live test demonstration in calculating final technical scores is
without merit where the demonstration relates to specific solicitation
requirements and the solicitation specifically stated that the test
would assist the government in making final technical evaluations.
3. Agency's acceptance of a below-cost, fixed price proposal from a
responsible offeror is not legally objectionable. When a contracting
officer makes an affirmative determination of responsibility, the
General Accounting Office will not review it absent a showing that the
determination may have been made fraudulently or in bad faith, or that
definitive responsibility criteria were not met.
4. The Small Business Administration is empowered conclusively to
determine matters of size status for federal procurement purposes, and
the General Accounting Office will neither make nor review such
determinations. Allegation that small business offeror is in collusion
with large business is therefore dismissed.
Environmental Technology Corporation (ETC) protests the award of a
contract for microprocessor-controlled audiometers to PCA Microsystems,
Inc. under request for proposals (RFP) No. DADA15-86-R-0058, issued by
Walter Reed Army Medical Center. ETC challenges the Army's decision to
extend the opportunity for a live test demonstration (LTD) of offered
equipment to all offerors in the competitive range, and argues that as
the highest-rated offeror, once it had successfully completed the LTD,
it should have received the award.
We dismiss the protest in part and deny it in part.
The solicitation, issued April 25, 1986, requested offers to provide
up to 540 microprocessor-controlled audiometers, related peripherals and
software on a fixed-price basis. The equipment will be used to evaluate
the hearing of military personnel and government employees at
installations in the United States and overseas. Award was to be made
to the offeror whose proposal met the mandatory specifications and
offered the greatest value to the government, as reflected by the
highest weighted point score derived from a mathematical formula giving
technical and cost factors equal importance.
Six offerors submitted initial proposals by the June 11 closing date.
Since the procurement was set aside for small business, the proposal
submitted by Tracor Instruments, a large business, could not be
considered for award. The Army considered the other five proposals to
be technically unacceptable without further negotiations. Accordingly,
it conducted discussions with the offerors and requested that they
submit revised proposals by July 24.
Although the Army found only two of the revised proposals to be
technically acceptable, it concluded that the other three were
susceptible of being made acceptable, and it therefore retained all five
offerors in the competitive range. The agency amended the solicitation
and requested best and final offers by September 10. Based upon its
evaluation of these, the Army eliminated the two highest-priced
proposals from the competitive range. It scored the remaining ones as
follows:
Technical Price Total
ETC 46.80 42.55 89.42
PCA 35.35 50.00 85.35
Besserman 35.69 41.97 77.66
Corporation
The Army then requested ETC, as the highest-ranked offeror, to
provide equipment for an LTD. This was in accord with solicitation
provisions that informed offerors that the government might require such
demonstrations.
Specifically, Section C of the solicitation, which included
specifications and the statement of work, provided:
"C.9.1 Live Test Demonstration (LTD). After receipt and
preliminary technical evaluation of proposals, and prior to final
determination of technical responsiveness, offerors may be
required to successfully perform a LTD in the presence of
Government representatives.
"C.9.2 Purpose. The purpose of the LTD is to demonstrate to
the Government that the proposed integrated systems (equipment and
software) can perform all requirements of the specification as
well as comply with all representations made in the proposal."
In addition, Section M, which listed evaluation and award factors,
provided:
"M.7 Operational Demonstration Before Award. In addition to
the technical review of technical proposals .. . and to assist
Government personnel in making a final technical evaluation, the
Government may, at its option, require any offeror to demonstrate
in an operational environment that the equipment proposed can
perform as claimed in the offeror's technical proposal. The
Government may require, as well, that any or all of the
requirements set forth in Section C of this document be
demonstrated. Failure to demonstrate that offered equipment can
meet Section C requirements may result in rejection of the
proposal as technically unacceptable."
In an LTD begun on September 30 and completed on October 6, the
protester successfully demonstrated that its equipment complied with all
major requirements of the solicitation; it demonstrated compliance with
the remaining, minor requirements during a retest conducted on November
5. At this point, ETC states, it believed it had been determined to be
the best-qualified vendor, and it was merely waiting for formal
announcement of the award. On November 12, however, Besserman
Corporation, the third-ranked offeror, protested to our Office, alleging
that the Army's failure to provide other offerors in the competitive
range an LTD was inconsistent with the terms of the solicitation.
Although, as ETC correctly states, the Army had initially intended to
have only the highest-ranked offeror perform an LTD, and to go on to the
next-ranked offeror only if the first failed to demonstrate its
capability, the agency reconsidered and ultimately offered both
Besserman and PCA the opportunity for an LTD. Besserman withdrew its
protest, but failed the subsequent demonstration; the Army therefore
rejected its proposal as technically unacceptable. PCA, on the other
hand, successfully demonstrated its equipment, and the Army found its
proposal to be technically acceptable.
By letter dated January 14, the Army requested another round of best
and final offers to be submitted by January 21. PCA changed both its
technical and price proposals; ETC, however, did not revise either, but
merely confirmed its previous offer. Based upon the LTDs and the
revised offers, the Army rescored proposals as follows:
Technical Price Total
PCA 41.84 50.00 91.84
ETC 48.00 43.25 91.25
Given the slight difference in point scores and the substantial
difference in price ($2,620,310 for PCA and $3,029,693 for ETC), the
Army determined that award to PCA would be in the best interest of the
government. Award was made on January 28, and ETC thereupon filed this
protest with our Office.
ETC challenges the Army's decisions (1) to offer PCA the opportunity
to demonstrate, during an LTD, that its proposed equipment complied with
the solicitation requirements and (2) to consider the results in
calculating the final technical scores. ETC contends that the
solicitation required the Army to offer an LTD only to the
highest-ranked offeror. Since ETC was initially the highest-ranked
offeror and passed its LTD, the firm argues that it was entitled to
award. In any case, ETC argues, the solicitation contemplated that the
LTD would be evaluated only upon a pass/fail basis, and should not have
affected technical scores. This interpretation, the protester argues,
is consistent with the Army's response to a question from Besserman as
to whether it would be offered an opportunity for an LTD. By letter of
October 29, the contracting officer advised Besserman that this portion
of the evaluation process would not be scored, but was intended only to
confirm the capability of the apparent winning offeror.
The Army defends its subsequent decision to provide all offerors in
the competitive range with an opportunity for an LTD as a reasonable
interpretation of the RFP. Moreover, the agency maintains, offering
additional offerors such an opportunity enhanced competition. The Army
further contends that it was proper to consider the results of the LTD
in scoring technical proposals because the demonstration was part of the
negotiation process.
ETC's challenge to the Army's decision to extend the opportunity for
an LTD to the other offerors in the competitive range and then to
request another round of best and finals is untimely. Our Bid Protest
Regulations require protests, other than those based upon apparent
improprieties in a solicitation, to be filed within 10 working days
after the basis for protest is known or should have been known,
whichever is earlier. 4 C.F.R. Sec. 21.2(a)(2) (1986). The Army has
provided our Office with a contemporaneous memorandum documenting a
November 18, 1986 telephone call in which the contracting officer
informed ETC that the opportunity for an LTD would be provided to all
offerors in the competitive range. In addition, the last round of best
and finals was due January 21. ETC, however, failed to protest these
actions until February 20. We therefore will not consider them.
As for rescoring of technical proposals, the protester does not
allege, nor does the record indicate, that the rescoring was related to
capabilities other than those specifically required by the
specifications/statement of work; rather, ETC merely argues that the
demonstrations should not have affected scoring at all.
We disagree. Nothing in the solicitation states that performance in
a LTD will not affect an offeror's technical score. On the contrary,
the solicitation required submission of a detailed technical description
of the proposed system and provided that all offerors in the competitive
range might be required to perform an LTD for the purpose of
demonstrating compliance with all representations made in the proposal
(as well as with the requirements of the solicitation). The statement
that the government could require an LTD "in addition" to the review of
technical proposals certainly does not indicate that the results of the
LTD could not or would not be reflected in proposal scoring. In this
respect, we have recognized that a contracting agency may consider
information outside an offeror's technical proposal in rating that
proposal and in rescoring it. Cf. Hayes International
Corp.--Reconsideration, B-224567.2, Mar. 6, 1987, 87-1 CPD P 256.
In any case, we question whether ETC has suffered competitive
prejudice here. All offerors in the competitive range were treated
equally and given an equal opportunity to demonstrate that their
proposed equipment would best satisfy the agency's minimum needs. ETC
does not allege that it could have performed better during the LTD or
otherwise increased its technical score had it known that the agency
would rescore, based in part on the results of the demonstration.
Further, it appears that the $409,383 difference in cost between the two
proposals ultimately determined which provided the greater value to the
government. We therefore deny this basis of protest.
ETC also alleges that the awardee's price represents a buy-in, or
below cost offer, and that the firm is in collusion with a large
business.
An agency's acceptance of a below-cost, fixed-price offer does not
provide a basis upon which an award to a responsible offeror may be
challenged. Parker Shane Mfg., B-220273, Sept. 30, 1985, 85-2 CPD P
367; see Ball Technical Products Group, B-224394, Oct. 17, 1986, 86-2
CPD P 465. Here, regardless of whether PCA was attempting a buy-in, the
contracting officer has made an affirmative determination of PCA's
responsibility, which our Office will not review absent a showing that
the determination may have been made fraudulently or in bad faith or
that definitive responsibility criteria in the solicitation were not
met. 4 C.F.R. Sec. 21.3(f) (5). Neither has been shown here.
As for ETC's allegation that PCA does not qualify as a small business
because the firm is in a joint venture or otherwise associated with
Tracor, a large business, the contracting officer referred this matter
to the Small Business Administration (SBA). By decision dated March 18,
SBA's Dallas Regional Office determined PCA to be a small business.
(ETC's appeal of that decision to SBA's Office of Hearings and Appeals
is pending.) Under 15 U.S.C. Sec. 637(b) (6) (1982), the SBA is
empowered conclusively to determine matters of size status for federal
procurement purposes. Therefore, this Office will neither make nor
review size status determinations. 4 C.F.R. Sec. 21.3(f) (2); see
Qualimetics, Inc., B-222726, June 3, 1986, 86-1 CPD P 519; see also
Junger Utility and Paving Co., B-223557, July 15, 1986, 86-2 CPD P 71.
The protest is dismissed in part and denied in part.
Harry R. Van Cleve
General Counsel
Matter of: Land O'Frost, Inc.
File: B-225478.2
Date: March 3, 1987
1. Protest that awardees' prices are unrealistically low because they
do not reflect the costs of compliance with a testing procedure required
by the solicitation is denied where contracting officer has determined
that awardees are responsible.
2. Where solicitation reserved to the government the right to
increase any offeror's award quantity above the maximum share for which
it qualified under its industrial preparedness planning (IPP)
participation in the event that other offerors' prices could not be
determined fair and reasonable, and contracting officer could not
determine that protester's price on only item for which it was in line
for award was fair end reasonable, contracting officer's award to
another offeror of quantities in excess of its IPP allocation is not
objectionable.
Land O'Frost, Inc. protests the Defense Personnel Support Center's
(DPSC) failure to award it a contract under request for proposals (RFP)
No. DLA13H-86-R-8349, for various quantities of different types of
thermostabilized pouched meat components of the meal ready-to-eat (MRE)
ration. Land O'Frost contends that DPSC made awards to two firms that
had submitted unrealistically low prices. We deny the protest.
The RFP, pursuant to the authority of 10 U.S.C. Sec. 2304( c) (3)
(Supp. III 1985), restricted competition to planned producers who are
participating in the Department of Defense Industrial Preparedness
Production Planning Program. The solicitation explained that the extent
of an offeror's industrial preparedness planning (IPP) capacity would
determine its maximum potential share of the total award quantities, and
that actual award quantities would depend upon the prices offered; no
award would be made to an IPP firm offering prices determined to be
other than fair and reasonable.
Based on its IPP capacity, Land O'Frost was determined to be eligible
for a maximum share of 6,750,000 pouches. Despite its eligibility, Land
O'Frost received no awards because other IPP firms offered lower prices
on six of the seven items offered by the protester and Land O'Frost's
price was not determined to be fair and reasonable on the seventh.
Land O'Frost argues that it received no award because two companies
were awarded quantities at unreasonably low prices. According to the
protester, these companies, identified as J.R. Wood and International
Retort, are new sto the MRE program and are thus unfamiliar with the
zyglo florescein dye testing procedure required by the solicitation to
ensure that the pouches are free of microholes. Land O'Frost notes that
after the new testing procedure was instituted in May 1986, it incurred
major expense in upgrading its production lines and quality assurance
programs to improve its pouch quality. These costs, it claims, are
reflected in its prices. Land O' Frost argues that the prices offered
by J. R. Wood and International Retort do not reflect the costs of
compliance with the zyglo testing and are therefore unrealistically low.
The protester is questioning the ability of these two firms to
perform the contracts in compliance with the solicitation's testing
requirements at the prices offered. There is nothing in the record to
indicate that these firms' offers in any way deviated from the terms of
the solicitation. Further, even if the prices offered by these firms
were below their performance cost, the submission of such an offer is
not illegal and provides no basis for challenging an award of a firm
fixed-price contract such as those involved here to a responsible firm.
LSL Industries, Inc., B-222588, July 22, 1986, 86-2 CPD P 92. Whether
the firms can perform at the price offered is a matter of
responsibility. Our Office does not review protests against affirmative
determinations of responsibility, 1/ unless either fraud or bad faith on
the part of procuring officials is shown or the solicitation contains
definitive responsibility criteria which allegedly have been misapplied.
Bid Protest Regulations, 4 C.F.R. Sec. 21.3(f) (5) (1986). Neither
exception applies here.
Land O'Frost further observes that some firms were awarded quantities
in excess of their IPP allocations while it received no award. The
record shows that at least one company, Southern Packaging & Storage
Company, received awards which exceeded its IPP allocations. We fail to
see anything improper in this, however, since the solicitation
specifically reserved to the agency the right to increase any offeror's
award quantity above the maximum share for which it qualified through
its IPP participation in the event of insufficient eligible offeror
coverage or receipt of prices not determined to be fair and reasonable.
We are informed that the contracting officer could not determine that
Land O'Frost's price on the only item for which it was in line for award
was fair and reasonable, and therefore elected to award to Southern
quantities in excess of its maximum share.
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ Since both firms received awards they were necessarily determined
to be responsible. The ARO Corp., B-222488, June 25, 1986, 86-2 CPD P
6.
Matter of: Cedar Valley Corp.
File: B-225475; B-225723
Date: February 24, 1987
Probable changes in performance costs from those reflected in
already-submitted bid prices, due to a 4-month delay in the start of
performance anticipated in the invitation for bids, is a reasonable
basis for agency determination that award under the solicitation would
prejudice bidders, and that solicitation thus should be canceled.
Cedar Valley Corp. protests the United States Army Corps of
Engineers' cancellation of invitations for bids (IFB) No.
DACA45-86-B-0094 (-0094) and No. DACA45-87-B-0019 (-0019), for the
repair of a taxiway and runway aprons at offutt Air Force Base,
Nebraska, and the resolicitation of that project under IFB No.
DACA45-87-B-0020 (-0020). We deny the protest.
The Army issued IFB-0094 on July 8, 1986. The five bids received
were opened on August 7, and Cedar Valley was the low responsive,
responsible bidder. The specifications called for four work phases:
Phases I and II were to be completed within 60 days of the anticipated
September 1 notice to proceed, and phase III was to begin approximately
200 calendar days after issuance of the notice to proceed, phase IV to
follow. The 200 day delay in the start of the last two phases was to
account for a seasonal dormant period, running from November 1, 1986,
through March 15, 1987.
As of the end of October, funds for the project had not yet been made
available. Since because of this delay it no longer would be possible
to complete the first two phases by November 1, it became necessary for
the Corps to reschedule the project to eliminate the dormant period and
set March 1, 1987, as the overall start date. It also became necessary
to delete a requirement that construction materials be removed from the
site during the dormant period. The Army believed these changes could
have a material effect on the bids, and decided that the project
thererfore should be resolicited. However, rather than preparing a
formal written determination stating the compelling reason to cancel, as
required by the Federal Acquisition Regulation (FAR), 48 C.F.R. Sec.
14.404-1 (1986), the Army readvertised the project by issuing an
amendment on October 28, redesignating the solicitation IFB-0019,
rescheduling the project to begin in March 1987, and establishing a new
bid opening date of November 13. 1/ The Army also sent a letter of bid
rejection to Cedar Valley, dated October 30, stating that because funds
were not available for the project, the work would be readvertised by
amendment. Cedar Valley received that letter on November 5 and
protested the rejection of its bid to the Army on November 10.
After further consideration, the Army determined that since security
improvements were also needed at the location during the time period now
scheduled for the taxiway repair, the agency would combine the two
projects into a single contract, thereby avoiding the interference and
possible delay associated with having two contractors perform
simultaneously. Accordingly, although funding finally had been made
available on November 3, the Army canceled the amended solicitation on
November 12 before the new bid opening. The new solicitation combining
the projects, IFB-0020, was issued in January 1987. Cedar Valley argues
that the Army should not have delayed award to it as low bidder, that
IFB-0094 should not have been canceled, and that Cedar Valley should
have received the award based on its low responsive bid. Cedar Valley
maintains that it was improper for the Corps to readvertise the
requirement instead, because neither the work required nor the
government's needs had changed, and no bidder would have been prejudiced
by an award based on the rescheduling of the project.
Preliminarily, we find that the delay in the award due to the
unavailability of funds was legally unobjectionable. An agency's
failure to meet a target date for award, due to the unavailability of
funds or some other administrative reason, is purely a matter of
procedure and does not invalidate the procurement or provide a basis of
protest. See, for example COMSEC Systems Corp.--Reconsideration,
B-216596.3, Dec. 11, 1984, 84-2 C.P.D. P 652.
As for the merits, a solicitation may be canceled after bids have
been opened and prices have been exposed only where supported by a
cogent and compelling reason. Tektronix, Inc., B-219981.4, June 12,
1986, 86-1 C.P.D. P 545. A change in a material term of a solicitation
that would render the specifications inadequate for the agency's needs
or result in prejudice to other bidders if award under the deficient IFB
were made constitutes such a reason. Intercomp Co., B-213059, May 22,
1984, 84-1 C.P.D. P 540.
We find the Army's determination to cancel IFB-0094 and to afford all
bidders an opportunity to compete under an amended performance schedule
proper under the stated standard. We think a 4 month delay in
performance of a construction contract reasonably could be expected to
have a substantial effect on bids depending on possible wage rate
changes, the availability of equipment, and other similar factors
subject to change during the delay. Cedar Valley maintains the delay in
performance would have no major effect on its or other bidders' prices
since the delayed portion of the work-- Phases I and II--made up only 15
percent of the total project. It is not clear how Cedar Valley arrived
at this calculation. Even accepting it as accurate, however, it remains
that if 2 months are allotted for performance of Phases I and II in
1987, Phases III and IV will have to be delayed 2 months. The fact that
Cedar Valley believes its price will not be affected by the initial 4
month delay and the 2 month delay in the remainder of the project does
not establish that no other bidder's prices would be affected. We note
that any impact would not have to be especially significant to affect
the outcome of the competition, as Cedar Valley's bid of $2,398,955 was
only approximately $60,000 less than the second low bid. Thus, we think
the Army reasonably found that awarding a contract to Cedar Valley
instead of soliciting bids on the changed schedule would be prejudicial
to other bidders.
Cedar Valley requests reimbursement of the costs it incurred in
submitting a bid and pursuing its protest with this Office. As we have
concluded that the protest is without merit, however, these costs are
not recoverable. 4 C.F.R. Sec. 21.6(d) (1986).
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ The Army acknowledges that the cancellation of IFB-0094 was
procedurally deficient since the contracting officer did not make the
written determination stating a compelling reason for cancellation as
required by the FAR. Such a procedural failure does not in itself
constitute a basis to sustain a protest, however, where the cancellation
in fact is warranted. Feinstein Construction, Inc., B-218317, June 6,
1985, 85-1 C.P.D. P 648.
Matter of: Environmental Tectonics Corporation
File: B-225474.5
Date: July 28, 1987
Where the General Accounting Office sustains protest and recommends
that discussions be reopened so as to allow the protester a renewed
opportunity to compete for the award under the protested solicitation,
the award of the protester's costs of filing its protest, including
attorney's fees, is inappropriate.
Environmental Tectonics Corporation (ETC) requests that we modify our
recommendation in Environmental Tectonics Corp., B-225474, Feb. 17,
1987, 87-1 CPD P 175, aff'd on reconsideration, B-225474.2 et al., Apr.
9, 1987, 87-1 CPD P 391, to include a grant of the firm's costs of
filing and pursuing its protest, including attorney's fees pursuant to
our Bid Protest Regulation, 4 C.F.R. Sec. 21.6(d) (1) (1986). We deny
the request for costs.
In our original decision we recommended that the Navy reopen
discussions with all offerors within the competitive range on grounds
that the awardee, CACI, Inc.--Federal, had been improperly allowed to
submit a late modification to its best and final offer. We also
recommended that the contract with CACI be terminated for the
convenience of the government if it was not the successful offeror at
the conclusion of discussions. Upon reconsideration, we affirmed our
original recommendation. It is our understanding that the Navy is
complying with our recommendation for reopening of discussions and
recently has issued a new request for best and final offers.
ETC argues that we have on previous occasions allowed the recovery of
the costs of filing and pursuing a protest even where we recommended
that the procurement be reopened so as to allow the protester an
opportunity to compete, and specifically directs our attention to our
decision in AT&T Information Services, Inc., B-223914, Oct. 23, 1986, 66
Comp. Gen. (1986), 86-2 CPD P 447.
Our regulations permit the recovery of the costs of filing and
pursuing a protest in situations where the protester is unreasonably
excluded from the procurement, except where this Office recommends that
the contract be awarded to the protester and the protester receives the
award. 4 C.F.R. Sec. 21.6(e). Generally, we have interpreted the
regulation as limiting the remedy of protest costs to those situations
where a successful protester does not otherwise receive a remedy. As
ETC points out, we have allowed protest costs where we have concluded
that a sole-source award was improper and have recommended that the
requirement be resolicited competitively, even though the protester may
receive a remedy in addition to protest costs. We have allowed costs in
this situation because to do so is consistent with a key purpose of
CICA, which is to promote full and open competition. It is our intent
to promote that purpose by encouraging protests of improper sole-source
procurements. Here, however, we regard the relief offered ETC--the
chance to have its existing proposal considered for award under renewed
competition--as a sufficient remedy within the intent of our
regulations, without granting protest costs as an additional remedy.
Harry R. Van Cleve
General Counsel
Matter of: Environmental Tectonics Corporation--Reconsideration
File: B-225474.2; B-225474.3; B-225474.4
Date: April 9, 1987
1. Decision is affirmed on reconsideration where new evidence
furnished by the agency nevertheless fails to establish that the General
Accounting Office (GAO) erred in concluding that the agency had
improperly accepted an unexcused late modification to a proposal taking
exception to material terms and conditions of the solicitation.
2. GAO sees no basis to reconsider the appropriateness of its
recommended corrective action--the reopening of competitive range
discussions--since that remedy preserves the integrity of the
competitive procurement system while providing the maximum degree of
fairness to all parties.
Environmental Tectonics Corporation (ETC), the Department of the
Navy, and CACI, Inc.--Federal request reconsideration of our decision in
Environmental Tectonics Corp., B-225474, Feb. 17, 1987, 87-1 CPD P . We
sustained a protest by ETC against the award of a contract to CACI under
Navy solicitation No. N62477-85-R-0295, a procurement for services to
overhaul the PVA-2 hyperbaric facility at the Naval Diving and Salvage
Training Center, Panama City, Florida.
We affirm our prior decision with its recommendation for corrective
action. Upon reconsideration, we conclude that the parties have failed
to show that our February 17 decision contains errors of fact or of law
which warrant its reversal or modification.
ETC's original ground for protest was the complaint that the Navy had
failed to conduct meaningful discussions with the firm as a competitive
range offeror before awarding the contract to CACI. We did not
specifically reach this issue in deciding the protest because, upon
review of the administrative record as furnished to us by the Navy, it
became apparent that the award to CACI was based on the agency's
improper acceptance of a late modification to CACI's best and final
offer.
The record disclosed that CACI had attached a submission entitled,
"Terms, Conditions and Assumptions" to its initial proposal of July 30,
1986, an attachment which indicated that the firm was imposing
additional conditions on the government and taking exception to various
provisions of the solicitation, principally with regard to
delivery/acceptance terms and required warranties. The documents of
record revealed that the Navy had expressly cautioned CACI in the
agency's September 15 request for a best and final offer from the firm
that these nonconforming terms and conditions were unacceptable and, if
not withdrawn, would preclude the firm's offer from award consideration.
The record further showed that CACI did not affirmatively withdraw the
material qualifications created by the attachment to its initial
proposal until more than a week after the September 22 closing date for
receipt of best and final offers. To us, it was obvious that this
withdrawal, in the form of a letter to the contracting officer dated
September 30, was neither submitted with the firm's best and final offer
nor was merely the confirmation of an eariier withdrawal. We noted that
the letter was only dated the same date as that of award, and CACI
specifically stated in the letter that, "CACI . . . hereby withdraws its
exceptions . . . ." (Emphasis supplied.)
Accordingly, we concluded that the Navy had erred in awarding CACI
the contract since, under the Navy's own previous determination, the
firm's best and final offer was unacceptable due to the fact that it
still contained the material qualifications introduced into the proposal
nearly 3 months earlier. The September 30 withdrawal letter was
ineffective to remove the offending terms and conditions because it was
not submitted until after the September 22 closing date and was not an
excusable late modification. 1/
We recognized that we were sustaining the protest on a ground not
expressly raised by ETC, but we determined that the firm could not have
learned of this protest basis in the absence of any indication that the
documents establishing the existence of the impropriety had ever been
furnished to ETC with its copy of the agency report. In terms of
remedial action, we recommended to the Secretary of the Navy that
discussions be reopened with the competitive range offerors and that
CACI's contract be terminated for the convenience of the government if
it was not the successful offeror at the conciusion of those
discussions.
Navy/CACI
The Navy, joined by CACI, urges that our prior decision be
reconsidered on the ground that facts not known to this Office at the
time now demonstrate that CACI had timely withdrawn the material
qualifications from its proposal. The Navy notes that the original
administrative record contained only CACI's September 30 letter of
withdrawal, which we viewed as an unacceptable late modification to its
best and final offer. However, the Navy now introduces for our
consideration two earlier documents transmitted between the agency and
CACI which the Navy contends served to remove the unacceptable
conditions from CACI's proposal.
The first document is a letter from the contracting officer to CACI
dated September 15, the same date as her letter to the firm requesting a
best and final offer. It is now apparent that this letter was enclosed
with the contracting officer's best and final offer request and is the
document referenced therein as the "Order of Precedence."
The "Order of Precedence" document is comprised of two separate
sections, the top section signed by the contracting officer and stating
in part:
"... It is requested that this letter, affirming that the
Government specification has precedence over the technical
proposal in all technical areas be signed by the corporate officer
and returned to this office by 22 September 1986, 2:00 p.m."
The bottom section of the "Order of Precedence" is endorsed by an
officer of CACI and is dated September 17, providing:
"I do hereby agree that should CACI, Inc.,Federal be awarded
subject contract, the Government specification shall take
precedence over the CACI, Inc.-Federal proposal in all technical
areas."
The next document now submitted by the Navy is a letter of September
22 from CACI to the contracting officer which was the cover letter to
CACI's best and final offer of the same date. This letter transmits the
best and final offer and references the September 15 "Order of
Precedence" document which CACI states is enclosed and has been executed
by the firm.
Accordingly, the Navy and CACI contend that CACI's execution of the
"Order of Precedence," and the submission of that document with its best
and final offer, was an act sufficient to remove the unacceptable
conditions from its proposal.
With regard to CACI's September 30 letter expressly withdrawing those
conditions after the closing date for best and final offers--the
document which was the touchstone of our prior decision--the Navy,
through an affidavit from the contracting officer, explains that CACI's
endorsement of the September 15 "Order of Precedence" "reflected our
agreement during previous telephonic discussion that the conditions
were removed." However, the contracting officer states that she became
concerned that if a contract dispute arose later during performance,
CACI's cover letter of September 22 and the endorsed "Order of
Precedence" might have to be proven through parol evidence as actually
reflecting the parties earlier agreement that the offending terms would
be withdrawn. Accordingly, the contracting officer advises that she
requested CACI to submit a letter "specifically stating that the
conditions were removed." The September 30 letter is explained as CACI's
response to this request, and although the contracting officer
recognizes that it was submitted after the best and final offer closing
date, she nevertheless avers that she "already understood" that the
conditions had been removed through CACI's execution of the September 15
"Order of Precedence" and submission of that document with its best and
final offer.
To the extent our prior decision was based upon an original
administrative record from which we reasonably would draw the least
favorable conclusion as to the legal sufficiency of the Navy's award to
CACI, it is the general rule that parties to a protest that fail to
submit all relevant evidence do so at their peril. See J.R. Youngdale
Const. Co., Inc.--Request for Reconsideration, B-219439.2, Feb. 20,
1986, 86-1 CPD P 176. Nevertheless, we agree with the Navy's position
that it should not be held responsible for failure to submit those
documents the agency now asserts were necessary to our full
understanding of that record, because the Navy had no actual knowledge
of the issue upon which we would ultimately sustain ETC's protest.
Therefore, we will accept for review the evidence which the Navy submits
for the first time upon reconsideration.
However, we reject the Navy's assertion that we had no jurisdiction
to decide the case on a ground other than that raised by ETC in its
protest. The Competition in Contracting Act of 1984 (CICA) empowers
this Office to determine, in response to a protest submitted by an
interested party, whether a solicitation, proposed award, or award
complies with statute and regulation and to recommend the appropriate
remedy if the procurement action in question was improper. 31 U.S.C.
Secs. 3553(a); 3554(b)(1) (Supp. III 1985). We know of nothing in the
CICA that compels this Office to ignore an obvious procurement
impropriety--in derogation of our statutory authority--even though the
protest submission itself may not have specifically brought forth the
matter.
As to the merits, we do not agree that CACI's execution of the
September 15 "Order of Precedence" and the submission of that document
with its best and final offer effectively removed the offending
conditions from its proposal. The "Order of Precedence" was clearly
limited in its scope by providing that the government specification
would take precedence over CACI's proposal "in all technical areas."
(Emphasis supplied.) However, as noted earlier, the major thrust of
CACI's July 30 proposal attachment was an attempt to condition certain
delivery/acceptance terms and warranty provisions, rather than to
substitute any appreciable number of its own technical specifications
for the work in place of the government's. It is arguable that CACI's
stated desire in the attachment that the government provide electrical
utilities to a junction box at the faciiity was a "technical area"
condition removed by virtue of CACI's execution of the "Order of
Precedence" document. However, in contrast, we fail to see that this
act removed the explicit qualifications to the standard
delivery/acceptance terms and warranty provisions of the solicitation,
which are generally viewed as material requirements which must be met
without such qualification. See Granger Assocs., B-222855, Aug. 11,
1986, 86-2 CPD P 174.
For example, the solicitation provided at clause E3. (j) that the
government would accept or reject supplies "as promptly as practicable
after delivery . . . ." However, CACI proposed a 30-day limit for the
government to respond to or comment on the CACI deliverable, and, in the
event CACI did not receive the government's reponse within the 30-day
period, this imposed term provided that, "CACI shall consider the
deliverable to have been considered acceptable by the government." In
our view, this constituted a qualification in the firm's proposal giving
it greater rights than contemplated by the solicitation and which,
because it was not strictly related to the "technical" aspects of the
work, was not embraced by the firm's execution of the "Order of
Precedence."
We also note that CACI had demanded in its July 30 proposal
attachment that clause H4.(b) (2) of the RFP " be stricken in its
entirety." This clause was a restatement of the Federal Acquisition
Regulation (FAR), 48 C.F.R. Sec. 52.246-18(b) (2) (1985), which provides
that, with respect to supplies of a complex nature, any corrected or
replacement supplies/parts furnished by the contractor are to be subject
to the same warranty conditions as supplies/parts initially delivered.
Again, we do not believe that CACI's agreement that the government's
specifications would control over its own "in all technical areas" was
adequate to withdraw the exception taken to this standard term of the
RFP, a term material to the government's interest.
Our conclusion that CACI's execution of the "Order of Precedence"
document failed to withdraw the nonconforming qualifications from its
offer is borne out by the fact that the Navy nevertheless found it
necessary, in assurance that the government's rights would be protected
should a contract dispute later arise, to secure from CACI an
affirmative withdrawal of those offending terms and conditions. Despite
the contracting officer's assertion that she "already understood" that
CACI's execution of the "Order of Precedence" document had removed the
conditions, reflecting the agreement reached between the parties during
previous telephone conversations that CACI would in fact do so, we
continue to believe that CACI's usage of the present tense in its
September 30 letter--"CACI hereby withdraws its exceptions"--without
reference to either its endorsement of the September 15 "Order of
Precedence" or any previous oral agreement, means that from a legal
standpoint, the September 30 letter alone constituted CACI's dispositive
act of withdrawal.
In this regard as well, we note that the contracting officer's
September 15 letter requesting a best and final offer and a withdrawal
of the imposed conditions makes no statement whatsoever that CACI's
execution of the enclosed "Order of Precedence" would in fact constitute
the requested withdrawal. Instead, we believe that the language of this
letter, given that the contracting officer's reference to the "Order of
Precedence" only appears at the end in a sentence beginning with the
words, "In addition . . .," clearly suggests that the contracting
officer at some point contempiated a separate, affirmative withdrawal by
CACI. Hence, we believe that CACI's execution and submission of the
"Order of Precedence" must be viewed as only an adjunctive act
insufficent by itself to render the firm's September 22 best and final
offer acceptable.
Accordingly, the Navy and CACI have failed to meet their burden to
establish that our prior decision erred in holding that the agency had
awarded CACI the contract on the basis of an unacceptable offer that
legally could not be cured by the firm's untimely withdrawal letter of
September 30. See Department of Labor--Reconsideration, B-214564. 2,
Jan. 3, 1985, 85-1 CPD P 13.
Moreover, the fact that the contracting officer admits that
"numerous" communications between the Navy and CACI took place
concerning the removal of the conditions is further evidence that the
award was improper, and lends support to ETC's original complaint that,
as a competitive range offeror, it was not afforded meaningful
discussions. In this regard, discussions, as opposed to clarifications,
are defined by regulation as any oral or written communications between
the government and an offeror involving "information essential for
determining the acceptability of a proposal." FAR, 48 C.F.R. Sec. 15.601
(a) (1986). Clearly, the communications occurring here materially
related to the acceptability of CACI's proposal and, therefore,
constituted discussions. It is well-settled that if discussions are
held with any one offeror within the competitive range prior to award,
meaningful discussions must be conducted with all other offerors within
the competitive range as well. ALM, Inc., 65 Comp. Gen. 405 (1986),
86-1 CPD P 240; University of New Orleans, 56 Comp. Gen. 958 (1977),
77-2 CPD P 201.
Environmental Tectonics Corporation
ETC, the prevailing party in our February 17 decision, requests
reconsideration of that decision to the extent we recommended corrective
action in the form of reopened competitive range discussions. ETC
argues that since CACI's best and final offer was unacceptable as
submitted, CACI's contract should now be terminated for the convenience
of the government and an award made to ETC as the firm next in line
under the RFP's stated evaluation criteria. ETC contends that a
reopening of discussions will give CACI an unfair opportunity to retain
a contract to which it was not entitled and will likely result in a
prohibited auction situation, since it is reasonable to assume that the
offerors competitive prices have been revealed.
Generally it is true that there is no legal basis for an agency to
take a course of action other than to reject an unexcused late proposal
modification. See Westway Mfg. Co., Inc., B-224236, Oct. 3, 1986 86-2
CPD P 391. However, in Woodward Assocs. Inc. et al., B-216714 et al.,
Mar. 5, 1985, 85-1 CPD P 274, a case involving our sustaining of a
protest against an agency's acceptance of a late modification to a best
and final offer, we declined to recommend corrective action in the form
of an award to the protester, but instead recommended that discussions
be reopened with the two competitive range offerors. We did so because
it appeared that the firm submitting the late modification may have been
misied by the agency concerning its opportunity to revise its proposal
in response to the agency's request for best and final offers. We think
that our rationale in Woodward is applicable to the situation here.
In our February 17 decision, we recommended a reopening of
discussions rather than an award to ETC because we were sustaining the
protest on a ground not expressly raised by ETC and without benefit of
the agency's full version of events. Even with those facts now before
us, we still believe that it would be inappropriate to recommend a
termination for convenience and an award to ETC where it is apparent
that CACI, as a result of its discussions with the contracting officer,
was led to believe that its endorsement of the "Order of Precedence"
document would be legally sufficient to withdraw the material
qualifications from its proposal as requested by the Navy.
To the extent ETC urges that our recommendation will result in an
improper auction, we note that our prior decision appropriately made no
mention of any of the offerors' prices, and we see no indication that
prices were exposed during the exchange of written submissions as part
of the protest proceedings or otherwise revealed. ETC's concern as to
price disciosure appears unwarranted, see Furuno U.S.A., Inc.-- Request
for Reconsideration, B-221814.2, June 10, 1986, 86-1 CPD P 540, and, in
any event, we have held that the risk of an auction is secondary to the
need to preserve the integrity of the competitive procurement system
through the taking of appropriate corrective action. Roy F. Weston,
Inc.--Request for Reconsiderations, B-221863.3, Sept. 29, 1986, 86-2 CPD
P 364. Here, we believe that a reopening of discussions preserves that
integrity with the maximum degree of fairness to all parties.
Accordingly, our prior decision with its recommendation for
corrective action is affirmed.
Comptroller General
of the United States
1/ As noted in our prior decision, a late proposal modification may
be considered only where (1) the lateness is due solely to government
mishandling or (2) the modification makes the terms of an "otherwise
successful proposal"--that is, the proposal of the offeror already in
line for award--more favorable to the government. Federal Acquisition
Regulation, 48 C.F.R. Secs. 52.215-10(c) and (f) (1985).
Matter of: Environmental Tectonics Corporation
File: B-225474
Date: February 17, 1987
1. Protest is sustained where the agency improperly awarded the
contract to an offeror which failed to delete certain material
qualifications from its proposal until after the closing date for
receipt of best and final offers, even though the agency had earlier
determined and expressly advised the firm that its offer would not be
acceptable unless the qualifications were withdrawn.
2. A late proposal modification resulting from an agency's request
for best and final offers may be accepted only if the late receipt is
due solely to government mishandling or if the late modification makes
the terms of an otherwise successful proposal more favorable to the
government. The term "otherwise successful" means that the government
may accept a favorable late modification only from the firm already in
line for the contract award.
Environmental Tectonics Corporation (ETC) protests the award of a
contract to CACI, Inc. - Federal under request for proposals (RFP) No.
N62477-85-R-0295, issued by the Department of the Navy. The procurement
was for services to overhaul the PVA-2 hyperbaric facility at the Naval
Diving and Salvage Training Center, Panama City, Florida. ETC complains
that the award was improper because the Navy failed to conduct
meaningful competitive range discussions with the firm.
We sustain the protest on another ground.
Three firms, CACI, ETC, and Astro Pak, submitted technical and cost
proposals in response to the RFP by the July 30, 1986 closing date for
receipt of initial offers. CACI's proposal received the highest
technical point score, and its initial proposed cost was the lowest.
The Navy determined that none of the proposals contained technical
weaknesses or deficiencies to the extent that comprehensive discussions
were required. By letter of September 15, the Navy advised all three
firms that their proposals were within the competitive range and
requested the submission of best and final offers by September 22.
It is apparent from the record that any revisions to the proposals
were limited to cost matters only. Astro Pak's offer remained
unchanged, whereas CACI increased its proposed cost and ETC slightly
reduced its cost. Accordingly, ETC now displaced CACI as the low
offeror by a small margin. However, consistent with section M of the
RFP, which provided that the technical evaluation factors were more
important than cost considerations on a 60/40 ratio, the Navy determined
that the technical superiority of CACI's proposal outweighed its
slightly higher cost, and the Navy awarded the firm the contract on
September 30. We note that CACI's technical point score advantage was
in large measure due to the high ratings given the firm by the Navy's
evaluators in the area of corporate experience, since CACI had earlier
successfully reworked the PVA-1 hyperbaric facility at the same
installation.
Following its debriefing as an unsuccessful offeror, ETC filed this
protest against the award to CACI on the ground that the Navy failed to
conduct meaningful competitive range discussions with the firm so as to
give it an opportunity to improve its offer. In this regard, ETC
learned during the debriefing that one of the Navy's principal concerns,
which served to limit the number of evaluation points the proposal
received, was ETC's relative lack of experience in overhauling
hyperbaric facilities. ETC contends that if this perceived weakness had
been made known to the firm through discussions, it would have been able
to improve this aspect of its proposal by submitting more detailed
information concerning its previous performance of a similar project for
a foreign government.
We need not decide the express issue raised by ETC because we
conclude from our scrutiny of the record that the award to CACI was
improper on a more fundamental ground.
The records show that CACI submitted with its July 30 initial
proposal an attachment entitled, "Terms, Conditions and Assumptions," in
which the firm indicated, in part, that it was imposing additional
conditions on the government and taking exception to certain
solicitation provisions. For example, although the RFP provided that
the contractor was to install and maintain all necessary temporary
utility connections and lines "at his own expense," CACI proposed that
electrical utilities be provided by the government with power to be
furnished "within seven days of the contractor's request." Similarly,
CACI proposed that the RFP requirement for the contractor to provide the
same 1-year warranty for replacement parts as for parts initially
delivered under the contract " be stricken in its entirety."
The Navy expressly determined that CACI's attachment to its July 30
initial proposal sought to impose terms and conditions which were either
inconsistent with or in direct conflict with the RFP requirements.
Accordingly, in its September 15 request for a best and final offer from
the firm, the Navy advised CACI that it regarded the terms and
conditions as "inappropriate" qualifications to CACI's proposal. The
firm was specifically asked "to withdraw, in its entirety, these
conditions." The Navy further cautioned CACI that failure to withdraw
the qualifications "will render your proposal unacceptable and it will
not be considered for award. . . ." The Navy's letter noted that the
closing date for receipt of best and final offers was September 22 and
further advised that any submitted modifications would be subject to
clause L.13 of the RFP.
In this regard, clause L.13 incorporated the provisions of the
Federal Acquisition Regulation (FAR), 48 C.F.R. Sec. 52.215-10 (1985),
governing the late submission of proposals and proposal modifications.
Specific to this case, paragraph (c) of that section provides that, with
respect to a negotiated procurement, a proposal modification resulting
from the contracting officer's request for a best and final offer which
is received after the specified closing time and date is not to be
considered unless the modification is received before award and the late
receipt is due solely to mishandling by the government after receipt at
the government installation.
The solicitation documents filed with the Navy's administrative
report show that CACI did not withdraw the qualifications created by its
July 30 proposal attachment until after the September 22 closing date
for receipt of best and final offers. In fact, CACI only withdrew the
nonconforming terms ana conditions by a letter to the contracting
activity dated September 30, the same day that the contract was awarded
to the firm. Although this letter conceivably may have been received by
the agency on September 30 prior to award (the letter bears no time/date
stamp), it is obvious from the September 30 date and the present tense
language usage--"CACI. . . Hereby withdraws its exceptions . . ."-- that
the letter neither was submitted with the firm's September 22 best and
final offer nor was merely the confirmation of an earlier notification
of withdrawal.
Accordingly, it is also clear from this fact that the exception
provided by the FAR, 48 C.F.R. Sec. 52.215-10(c), supra, permitting the
acceptance of a late modification resulting solely from government
mishandling, is not applicable here. See Potomac Systems Resources,
Inc., B-219896, Oct. 8, 1985, 85-2 CPD P 393; Radva Corp., B-219595,
July 26, 1985, 85-2 CPD P 101.
We also note that the FAR, 48 C.F.R. Sec. 52.215-10(f), provide
another exception which allows for the consideration of a late
modification when the modification makes the terms of a otherwise
successful proposal more favorable to the government. In this limited
instance, the late modification may be considered and accepted at any
time it is received.
However, it is well-settled that the term "otherwise success ful"
restricts this exception to permit the government's acceptance of a late
modification offering more favorable terms only from the offeror already
in line for the contract award. Tyler Construction Corp., B-221337,
Mar. 19, 1986, 86-1 CPD P 271; Blue Cross of Maryland, Inc., B-194810,
Aug. 7, 1979, 79-2 CPD P 93. Here, if we construe CACI's withdrawal
letter of September 30 as a proposal modification offering better terms
to the government, CACI was not the "otherwise successful" offeror at
the time the Navy received that letter because, under the Navy's own
earlier determination, CACI's proposal would not be considered for award
unless the unacceptable terms and conditions created by its July 30
proposal attachment were deleted. However, since those qualifications
were not withdrawn by September 22, the closing date for receipt of best
and final offers, the firm's proposal remained unacceptable at the time
the late modification which sought to remove them was received. For
that reason, CACI properly could not be viewed as the firm already in
line for the award on September 30, and, in consequence, there was no
ground under FAR, 48 C.F.R. Sec. 52.215-10 (f), supra, for the Navy to
accept the firm's withdrawal letter of that date. See Tyler
Construction Corp., B-221337, supra; see also Woodward Assocs., Inc.
et al., B-216714, et al., Mar. 5, 1985, 85-1 CPD P 274; Windham Power
Lifts, Inc. et al., B-214287, Mar. 7, 1984, 84-1 CPD P 278.
We conclude that the Navy erred in awarding the firm the contract on
the basis of what the agency itself had determined and expressly advised
the firm would be an unacceptable offer if not modified as directed.
Although we recognize that we are sustaining the protest on a ground not
raised by the protester, it is readily apparent that ETC itself could
not have learned of this basis in the absence of any indication that the
documents in question were ever made available to the firm.
Accordingly, by separate letter today, we are recommending to the
Secretary of the Navy that discussions now be reopened with the
competitive range offerors. If CACI is not the successful offeror at
the conclusion of these discussions, we further recommend that the
firm's contract be terminated for the convenience of the government.
The protest is sustained.
Comptroller General
of the United States
Matter of: Adrian Supply Co.--Reconsideration
File: B-225472.3
Date: March 23, 1987
1. In the absence of affirmative evidence to show that a contracting
agency sent a letter rejecting a proposal on a date other than that
stamped on the letter, the General Accounting Office will assume that
the letter was actually sent on or about that date, and for timeliness
purposes will assume receipt within 1 calendar week.
2. The General Accounting Office denies a second request for
reconsideration of the dismissal of an untimely protest where the
protester fails to show that the protest was timely or that the
dismissal otherwise may have been based on any errors of fact or law.
Adrian Supply Co. requests a second reconsideration of our dismissal
of a protest that was filed more than 10 working days after Adrian's
formal notification of the contracting officer's rejection of its offer
as technically unacceptable. See Adrian Supply
Company--Reconsideration, B-225472.2, Dec. 9, 1986, 86-2 CPD P 663,
affirming a prior dismissal by computer notice.
We deny the request for a second reconsideration.
Adrian's protest concerned an award under solicitation No.
WG5100-6-00015, issued by the Department of the Commerce's National
Oceanic and Atmospheric Administration (NOAA) for single-phase and
three-phase AC power conditioners. Documents submitted with the protest
indicated that the contracting officer had advised Adrian of its
rejection by letter of October 8, 1986. However, we did not receive
Adrian's protest until more than a month later, on November 10. In our
decision, we indicated that our Office assumes that a disappointed
bidder will receive a rejection letter within 1 calendar week, and that
we count the 10 working days for timely filing from that time.
Adrian argues that the letter from the contracting agency, notifying
it of the rejection of its proposal, was sent in such a way that neither
the date of mailing nor the date of receipt can be verified. Adrian
states that our assumption that the agency discharged its obligations in
a timely fashion prejudices our decision and permits the agency to
control the bid protest process.
We disagree. In general, it is our practice to resolve doubts as to
timeliness in favor of the protester. See, e.g., Instruments & Controls
Service Co., B-222122, June 30, 1986, 65 Comp. Gen. , 86-2 CPD P 16.
Moreover, when it can be objectively determined that an agency delayed
notifying a protester of an award to another offeror, we have considered
that fact in fashioning a remedy, if one is otherwise appropriate. See
Bencor - Petrifond - Casagrande, B-225408, Mar. 6, 1987, 87-1 CPD P .
Adrian has neither alleged nor proved that in this case the agency
delayed in notifying it of the rejection of its proposal; in fact, the
firm acknowledges that its "scenario" in which a bidder is prejudiced by
an agency's deliberate delay in mailing or backdating of its
correspondence "may not have occurred in this case." In the absence of
any affirmative statement by Adrian as to when it received the agency's
rejection letter, we continue to believe that the firm is responsible
for the untimely filing of its protest. We consider the date stamped on
the agency's letter, October 6, to be sufficient evidence of mailing on
or about that date, and we have no reason to believe that Adrian
received it more than 1 calendar week thereafter. See T.S. Head &
Associates, Inc., B-220316, Sept. 30, 1985, 85-2 CPD P 368.
Since Adrian has not shown that its protest was timely or that the
dismissal may have been due to any error of fact or law, we deny the
request for reconsideration. 4 C.F.R. Sec. 21.12.
Harry R. Van Cleve
General Counsel
Matter of: Security America Services, Inc.
File: B-225469
Date: January 29, 1987
1. Protest after bid opening that solicitation improperly called for
evaluation of bids exclusive of option-year prices is dismissed as
untimely where protest was not filed with contracting agency or General
Accounting Office prior to bid opening.
2. Protest alleging that awardee was improperly found responsible by
agency is dismissed since General Accounting Office will not review
affirmative determinations of responsibility except in limited
circumstances not present here. Moreover, mere fact that awardee has
filed for bankruptcy under chapter XI of the United States Bankruptcy
Code does not by itself require a finding of nonresponsiblity.
Security Ameica Services, Inc. (Security), protests the award of a
contract for security services to Eccles Security Agency (Eccles), under
invitation for bids (IFB) N0. C77001, issued by the Federal Home Loan
Bank Board (FHLBB). Security alleges that the agency erred in its
evaluation of bids and in finding Eccles responsible. We dismiss the
protest.
The solicitation provided for the award of a contract for security
services for the base period of November 1, 1986, through September 30,
1987. Thereafter, the contract could be extended through September of
1989 by the FHLBB's exercise of two separately priced 1-year options.
As issued, the solicitation incorporated by reference the clause
appearing at the Federal Aquisition Regulation (FAR), 48 C.F.R. Sec.
52.217-3 (1986), which states " t he Government will evaluate offers for
award purposes by including only the price for the basic requirement;
i.e., options will not be included in the evaluation for award
purposes." Bids were opened as scheduled on October 27, and Eccles was
the apparent low bidder with bids being evaluated as specified in FAR,
48 C.F.R. Sec. 52.217-3. We note that the protester did not raise any
objection to the inclusion of FAR, 48 C.F.R. Sec. 52.217-3, in the
solicitation either with the agency or with our Office prior to bid
opening.
The protester first argues that bids should have been evaluated on
the basis of the total of the base period price plus the price for both
of the two option years. Had bids been evaluated in such a fashion, the
protester would have been the low bidder. Consequently, it is the
protester's position that the above-cited FAR provision was improperly
included in the solicitation.
Our regulations require that protests based upon alleged
improprieties that are apparent on the face of a solicitation be filed
before bid opening. See 4 C.F.R. Sec. 21.2(a)(1) (1986). In this case,
the alleged impropriety was apparent on the face of the solicitation,
the FAR provision having been incorporated by reference therein. Since
Security did not protest this provision of the solicitation either with
the contracting agency or this Office prior to bid opening, its protest
on this basis is untimely and we will not consider it. See Norfolk
Shipbuilding and Drydock Corp., B-218618, May 24, 1985, 85-1 C.P.D P
604. We therefore dismiss this basis of protest.
Security argues secondly that the agency erred in affirmatively
finding the awardee under this solicitation, Eccles, responsible,
because Eccles has filed for bankruptcy under chapter XI of the United
States Bankruptcy Code.
This Office will not review an affirmative determination of
responsibility, which is largely a business judgment, unless the
protester, which bears the burden of proving its case, shows possible
fraud or bad faith on the part of procurement officials, or the
solicitation contains definitive responsibility criteria that allegedly
have not been applied. See 4 C.F.R. Sec. 21.3( f)(5). Since neither of
these exceptions applies to the instant case, we will not review the
determination of responsibility upon the merits. See James S.
Scroggins to Co., B-213363, Apr. 17, 1984, 84-1 C.P.D. P 429. In any
event, the mere fact that a contractor is undergoing bankruptcy does not
require a finding of nonresponsibility. See Id. and cases cited
therein. We therefore dismiss this basis of protest.
The protest is dismissed.
Robert M. Strong
Deputy Associate General Counsel
Matter of: Flight Systems, Inc.
File: B-225463
Date: February 24, 1987
1. Under request for proposals (RFP) for aerial target towing
services, contracting agency was not required to reject offeror's
initial proposal as technically unacceptable for failing to meet one of
the performance standards in the RFP for the towing aircraft, where the
deficiency in the proposal was due to offeror's misinterpretation of
provision in RFP and proposal was reasonably susceptible to being made
acceptable by substituting a different model aircraft.
2. Contracting agency did not engage in technical leveling by asking
offeror whether aircraft it proposed for aerial target towing services
complied with performance standard in RFP and later issuing a clarifying
amendment to RFP once it became apparent that the offeror had
misinterpreted RFP provision setting out the performance standard.
Flight Systems, Inc. (FSI) protests the award of a contract to
Canfield Aviation under request for proposals (RFP) No.
F44650-86-R-0010, issued by the Air Force for aerial target towing
services for the Tactical Air Command. The protester argues that the
Air Force acted improperly by giving Canfield an opportunity to revise
its initial technical proposal after the Air Force learned that the
towing aircraft proposed by Canfield did not meet one of the performance
requirements in the RFP. We deny the protest.
The RFP, issued on April 28, 1986, called for the award of a
fixed-price requirements contract for aerial target towing and related
support services. Offerors were to submit both price and technical
proposals addressing the specific requirements set out in Attachment 1
to the RFP, the performance work statement. Under section M-2(b) of the
RFP, award was to be made to the lowest priced, technically acceptable
offeror. Three offerors, including FSI and Canfield, submitted
proposals by the initial due date, June 13; only FSI and Canfield were
found to be in the competitive range.
The RFP did not specify a particular model of aircraft to be used for
the target towing services. After the initial review of Canfield's
technical proposal, it was unclear to the Air Force whether the aircraft
proposed by Canfield, an F-86E model, would meet the performance
standards in the RFP. Specifically, the Air Force's questions focused
on paragraph 2.2.2 of the performance work statement, which provided:
"Tow Aircraft: A jet engine aircraft capable of flying to an
initial altitude of 20,000 to 25,000 feet MSL with a pattern
altitude of 20,000 feet MSL down to 10,000 feet MSL and a minimum
altitude of 7,500 feet AGL during recovery. Aircraft must be able
to fly 350 to 450 KIAS at 3.5 to 4.5 positive Gs. These
parameters must be maintained for a period of not less than 5
minutes within the pattern altitude parameters."
This provision in essence establishes a 5-minute "duration of
presentation" requirement at the specified speeds and altitudes which,
the Air Force states, was intended to apply to the aircraft while towing
a target.
On July 1, the contracting officer called Canfield and inquired
whether its proposed aircraft, the F-86E, would perform as specified in
pargraph 2.2.2 with a target in tow. According to the Air Force,
Canfield told the contracting officer that it had not interpreted
paragraph 2.2.2 to apply to the aircraft with a target in tow, and that
the F-86E would meet the performance standards specified only while
flying without a target. In order to clarify the intended meaning of
paragraph 2.2.2 in light of Canfield's misinterpretation of the
provision, the Air Force issued amendment No. 4 to the RFP on July 7.
In pertinent part, the amendment revised the last sentence in paragraph
2.2.2 to provide that the towing aircraft must meet the specified speed
and altitude requirements "while towing a deployed TDU-10 Aerial Gunnery
Target."
On August 26, Canfield submitted a revised proposal substituting a
different model aircraft which would meet the requirement of paragraph
2.2.2 with a target in tow, instead of the F-86E originally proposed.
In early September, discussions were held with both offerors, who then
submitted best and final offers by the September 17 due date. On
October 29, the Air Force made award to Canfield as the lowest priced,
technically acceptable offeror. 1/
FSI argues that the Air Force acted improperly by asking Canfield
whether its proposed aircraft would meet the standards in paragraph
2.2.2 of the performance work statement and then issuing an amendment
clarifying that provision. According to FSI, as soon as it became clear
that Canfield's initial proposal did not satisfy paragraph 2.2.2, the
proposal should have been rejected as technically unacceptable; by
giving Canfield the opportunity to revise its proposal, FSI argues, the
Air Force engaged in technical leveling. We see no basis to object to
the Air Force's action. 2/
As discussed above, the contracting officer decided to ask Canfield
about the performance characteristics of its proposed aircraft because
the initial review of Canfield's technical proposal raised the question
of whether it could meet the standards in paragraph 2.2.2 of the
performance work statement. During their conversation, the contracting
officer learned that Canfield, contrary to the Air Force's intention,
had interpreted paragraph 2.2.2 to apply only to the aircraft without a
target in tow. FSI maintains that paragraph 2.2.2, when read in the
context of the RFP as a whole, clearly referred to the aircraft with a
target deployed. While FSI's interpretation is certainly more
reasonable, once it became apparent, however, that Canfield, one of only
two offerors in the competitive range, had misunderstood the provision,
we see no reason why a clarifying amendment should not have been issued.
See Jana, Inc., B-208581.2, Mar. 1, 1983, 83-1 CPD P 205.
The fact that Canfield was alerted to a deficiency in its proposal
does not mean that the Air Force's actions were improper; in fact, even
if an amendment had not been issued, the Air Force properly would have
raised the issue with Canfield during discussions, as part of its
responsibility 10 point out deficiencies in an offeror's technical
proposal. See Federal Acquisition Regulation (FAR), 48 C.F.R. Sec.
15.610 (c) (2) (1986); Price Waterhouse, B-222562, Aug. 18, 1986, 86-2
CPD P 190. In addition, issuance of the amendment put FSI on notice of
the subject matter which had been raised with Canfield, and gave both
offerors an opportunity to revise their proposals in any way they chose.
See Mil-Air Engines & Cylinders, Inc., B-203659, Oct. 26, 1981, 81-2
CPD P 341.
To the extent that FSI argues that Canfield's proposal should have
been rejected as soon as the Air Force learned that its proposed
aircraft did not comply with paragraph 2.2.2, we find the argument to be
without merit. A contracting officer's decision to include a proposal
in the competitive range is a matter of administrative discretion which
we will not disturb unless it is arbitrary or unreasonable. KET, Inc.,
B-190983, Dec. 21, 1979, 79-2 CPD P 429, aff'd on reconsideration, Jan.
12, 1981, 81-1 CPD P 17. Here, the Air Force determined that Canfield's
proposal was reasonably susceptible to being made acceptahle because all
that was required was a change in the type of aircraft proposed. Thus,
the Air Force's decision to include Canfield's proposal in the
competitive range was consistent with FAR, 48 C.F.R. Sec. 15.609 (a),
which directs contracting agencies to include all proposals with a
reasonable chance of award, including deficient proposals which are
reasonably susceptible to being made acceptable. KET, Inc., B-190983,
supra. In addition, retaining Canfield in the competitive range
fostered the ultimate goal of full and open competition since, had
Canfield's proposal been rejected, only one offeror, FSI, would have
remained in the competitive range.
FSI also argues that allowing Canfield to revise its proposal instead
of immediately rejecting it was inconsistent with section M-2(a) of the
RFP, which provides:
"Proposals will first be evaluated to ensure that they are
technically acceptable. Technical Proposals will be determined
unacceptable if acceptability can be obtained only through a
complete Proposal revision. Any Proposal determined not
technically acceptable will be deemed as "Not Competitive."
Technical acceptability will be based on the offeror's
demonstrated understanding and approach to meeting the technical
requirements/specifications in the -performance work statement-."
(Emphasis added.)
In our view, it is not reasonable to interpret this provision to
apply to a proposal, like Canfield's, which is found deficient due to
the offeror's misinterpretation of a provision in the RFP which the
contracting agency later amends. In any event, while Canfield increased
its prices in its revised proposal as a result of the change in
aircraft, the basic elements of its proposal--Canfield's offer to
perform the target sortie missions and its approach to management,
training and maintenance of the towing aircraft--were not completely
revised.
Finally, the contracting officer's inquiry to Canfield did not
constitute technical leveling, defined in FAR, 48 C.F.R. Sec. 15.610
(d) (1), as helping an offeror bring its proposal up to the level of the
other proposals by successive rounds of discussions, such as by pointing
out weaknesses resulting from the offeror's lack of diligence,
competence or inventiveness in preparing a proposal. Here, the
contracting officer raised the issue with Canfield once, followed by a
clarifying amendment to the RFP, to which Canfield responded with a
technically acceptable revised proposal; there were no successive
rounds of discussions on the issue or any other indication of improper
coaching which would constitute technical leveling. See C&W Equipment
Co., B-220459, Mar. 17, 1986, 86-1 CPD P 258, aff'd on reconsideration,
B-220459.2, June 10, 1986, 86-1 CPD P 539.
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ After the best and final offers were adjusted to include the cost
of fuel, as provided in section M-2(b) of the RFP, Canfield's price
($16,409,508) was approximately $170,000 below FSI's.
2/ FSI also challenges the Air Force decision not to release to FSI
certain documents related to the procurement such as the abstracts of
offers and the contracting officer's responsibility determination
regarding Canfield. To the extent that FSI's complaint relates to the
Air Force's duty to furnish documents in connection with the protest
pursuant to the Competition in Contracting Act of 1984, 31 U.S.C. Sec.
3553(f) (Supp. III 1985), the contracting agency has the initial
responsibility for determining which documents are subject to release.
Cottage Grove Land Surveying, B-223207, Sept. 12, 1986, 86-2 CPD P 291.
To the extent that FSI is requesting the release of documents pursuant
to the Freedom of Information Act (FOIA), 5 U.S.C. Sec. 552 (1982), only
the contracting agency and the courts have the authority to decide what
information the agency must disclose under the FOIA. The documents
withheld from FSI were provided to our Office, however, and we have
examined them in camera in connection with our consideration of the
protest. Moreover, we do not think that the abstract of offers would be
particularly useful to the protester in view of the issues raised in the
protest. The responsibility determination contains a significant amount
of information which appears to be proprietary and thus would not be
releasable.
Matter of: Sonic, Inc.
File: B-225462.2
Date: May 21, 1987
1. Cancellation of invitation for bids after contract with third low
bidder has been terminated and second low bidder has been advised that
solicitation will be reinstated and it will receive award is proper
where agency no longer requires the supplies.
2. Claim for bid protest costs is denied where protester withdrew
initial protest and subsequent protest is denied.
Sonic, Inc. protests the failure of the Defense Industrial Supply
Center (DISC) to award it a contract for 1,122,000 flat washers under
invitation for bids (IFB) No. DLA500-86B-1266. Sonic requests that it
be awarded the contract as the low responsive bidder. In the
alternative, Sonic claims its bid protest costs, including attorney's
fees, and expected profits. We deny the protest and the claim for
costs.
Sonic's bid was the second lowest of the 16 received in response to
the IFB. The low bidder was rejected as nonresponsible. Sonic's bid
was then rejected as nonresponsive because that firm failed to furnish
in its bid the name and address of the manufacturing facility where the
supplies which it offered were to be produced. On October 16, 1986, the
agency awarded a contract to the third low bidder, Ohio Gasket and Shim
Co.
Sonic protested the rejection of its bid to our Office. Although
maintaining that the rejection of Sonic's bid was proper, the agency
decided "in the best interest of the competitive bidding system" to
terminate for convenience the contract with Ohio Gasket and to make
award to Sonic. The agency ordered Ohio Gasket to stop work on November
18. On December 2, the agency advised Sonic's attorney that termination
procedures had been initiated and that, upon completion, award would be
made to Sonic. By letter of that date Sonic withdrew its protest to our
Office.
On December 22, while the agency was processing the termination,
however, the commodity manager notified the contracting office that the
supplies were no longer needed. On February 16, the agency informed
Sonic that the contract with Ohio Gasket had been terminated, but that
the washers were no longer needed and therefore no award would be made
to Sonic. Sonic then filed the instant protest.
Sonic argues that the agency does have a need for the washers, and
that the agency's refusal to award it a contract amounts to a bad faith
refusal to carry out its part of the agreement which resulted in Sonic's
withdrawing its protest. The agency says that it does not need all of
the washers solicited by the IFB. According to an agency study, 1/ it
will have an excess of 246,234 washers if it acquires the entire
quantity solicited. While the agency does intend to issue a
solicitation for washers sometime this year, it has decided not to
procure them under the subject solicitation. On the other hand, the
protester says that the study shows that after the acquisition of
1,122,000 washers, the agency will be short 333,976 washers for the
years 1989-1990.
While the conclusions of the study are not completely clear from its
face, we understand, based on an informal explanation by the agency,
that the "shortage" of 333,976 washers does not represent a shortage in
the number of washers required to satisfy DISC's current needs, but
rather represents the additional number of washers that DISC projects
would be required to support a mobilization. With respect to its
current needs, the agency report that there is a need for a lesser
quantity than specified in the subject IFB, but the solicitation does
not provide for award of a lesser quantity than specified. Since no
award can be made under this solicitation for the lesser quantity, a new
solicitation will be issued.
Accordingly, we do not think that the study shows that the agency has
a current need for the total quantities solicited. It is proper for an
agency to cancel a solicitation after bid opening where the agency
determines either that the items solicited are no longer needed, R.H.G.
Systems, Inc., B-224176, Oct. 2, 1986, 86-2 CPD P 380, or the need for
those items is significantly less than stated in the solicitation.
Manufacturing Sciences Corp., B-220567, Dec. 24, 1985, 85-2 CPD P 712.
The fact that the agency may later need to issue a solicitation for
these items does not invalidate the decision not to make a current
award.
Further, the agency denies Sonic's allegation that its contracting
personnel knew that the solicitation would be canceled at the time they
advised Sonic that it would receive an award and asked that firm to
withdraw its protest. In any event, it does not appear that Sonic
relied to its detriment on the agency's assurance that it would receive
an award. Although it did withdraw its initial protest based upon the
agency's representations, we do not see that it suffered any detriment
as a result since our Office would have dismissed the protest as
academic once the solicitation had been canceled. James M. Carroll--
Reconsideration, B-221502.3, Mar. 24, 1986, 86-1 CPD P 290.
Finally, Sonic claims its costs of filing and pursuing both of its
bid protests, including attorney's fees, and its expected profits.
A protester is entitled to the reasonable costs of filing and
pursuing its protest, including attorney's fees, only where our Office
determines that a solicitation, proposed award, or award does not comply
with a statute or regulation. 31 U.S.C. Sec. 3554(c)(1) (Supp. III
1985); Bid Protest Regulations, 4 C.F.R. Sec. 21.6(d) (1) (1986). Our
Office did not make such a determination with respect to Sonic's first
protest since it was withdrawn (and would have been dismissed as
academic shortly thereafter had it not been.) See Monarch Painting
Corporation, B-220666.3, Apr. 23, 1986, 86-1 CPD P 396. Nor did we make
such a determination with respect to Sonic's current protest since we
find that the cancellation of the solicitation was proper and there is
no indication that the IFB was originally issued in bad faith. See
Cellular Product Service, Inc., B-222614, July 3, 1986, 86-2 CPD P 32.
We therefore deny Sonic's claim for bid protest costs. We also deny
Sonic's claim for lost profits since we do not permit the recovery of
anticipated profits even in the presence of wrongful action. Smoke
Busters, B-219458, Nov. 1, 1985, 85-2 CPD P 501.
The protest and the claims are denied.
Harry R. Van Cleve
General Counsel
1/ The agency "study," DLA form 690, consists of a chart listing
demand history, requirements, assets and recommendations in a short-hand
manner without much explanation.
Matter of: Educational Media, Inc.
File: B-225457.2
Date: May 12, 1987
1. Protest of consideration of alternate offer is timely where filed
within 10 working days of notice to protester that contract would be
awarded on basis of alternate.
2. Protest of agency intent to accept alternate offer under
solicitation for language laboratory equipment is without merit where
alternate offer amounts to a choice of less expensive desks, and both
desk styles comply with the specifications; government may accept
alternate products that meet specifications even where solicitation does
not provide for offers of alternate equipment.
3. Protest against inclusion of new evaluation criteria incorporated
into solicitation by amendment is untimely where not filed prior to next
closing date for receipt of proposals as required by Bid Protest
Regulations.
Educational Media, Inc. (EMI), protests the Department of the Air
Force's award of a contract to Gel Systems, Inc., under request for
proposals (RFP) No. F41800-86-R-0198. We deny the protest in part and
we dismiss it in part.
The Air Force issued this RFP as a total small business setaside for
language laboratory equipment for the Defense Language Institute at
Lackland Air Force Base, Texas. The original closing date was August
11, 1986. The RFP described the required equipment and furniture in
both design and functional terms, depending on the complexity of the
particular item, and provided for award of the contract to the offeror
presenting the lowest priced, technically acceptable offer. Both Gel
and EMI submitted offers.
After best and final offers (BAFO's), the Air Force concluded that
EMI had submitted the lowest cost, acceptable offer and advised Gel by
letter of the agency's intent to award the contract to EMI. Gel then
protested to our Office that the Air Force had not properly evaluated a
lower priced, alternate offer included in Gel's proposal. In examining
this matter, the Air Force determined that Gel's alternate offer in fact
had not been evaluated, that the Air Force had improperly conducted
discussions with EMI after BAFO's without affording Gel a similar
opportunity, and that the evaluation criteria were not appropriate for
the acquisition of a system this complex. The Air Force therefore
decided to amend the solicitation and conduct another round of BAFO's.
Gel withdrew its protest.
Gel and EMI responded to the second request for BAFO's. The Air
Force determined that Gel's alternate offer was the lowest priced
acceptable proposal and advised EMI on January 20, 1987, that the
contract would be awarded to Gel. EMI filed this protest on February
12, after learning, on January 29, that Gel had been selected on the
basis of an alternate proposal.
EMI states that the RFP did not explicitly provide for alternate
offers, and contends that the Air Force's consideration of Gel's
alternate offer therefore was improper. EMI also argues that, to the
extent Gel's alternate offer may have involved a deviation from the
specifications, the Air Force was obligated to afford EMI an opportunity
to respond to the changed requirements. EMI also challenges the
propriety of the new evaluation criteria included in the final amendment
to the solicitation.
Preliminarily, the Air Force and Gel contend that EMI's protest is
untimely because it was not filed within 10 working days of notice to
EMI of the Air Force's proposed award of the contract to Gel. In this
respect, our Bid Protest Regulations require that protests, other than
those against improprieties in a solicitation, be filed within 10
working days after the protester knew or should have known the basis of
its protest. 4 C.F.R. Sec. 21.2(a)(2) (1986).
The protest is founded on EMI's objection to the Air Force's
consideration of Gel's alternate proposal, and there is nothing in the
Air Force's notice to EMI of the impending award that might have
apprised EMI of this fact. EMI's protest, filed on the 10th working day
after receiving advice that the Air Force intended to award the contract
on the basis of Gel's alternate offer, therefore is timely.
EMI's protest is without merit, however. The government may accept
an alternate offer that meets the requirements of the solicitation even
though the solicitation does not provide for alternate proposals. L. B.
Foster Co., B-222593, Aug. 18, 1986, 86-2 C.P.D. P 191. Although EMI
asserts otherwise, the agency found, and we cannot disagree based on our
in camera review of Gel's proposal, that Gel's alternate offer satisfied
the specifications. The alternate offer amounted to a choice between
two types of student desks, with the base bid including a style Gel
believed was favored by the end user, and the alternative being a less
expensive style. The specifications in the RFP for these items were
very general--the required sound absorbing material, for instance, was
described as "carpeting, or equivalent"--and Gel specified in its
proposal precisely how the less expensive desks would satisfy the
requirements. The Air Force evaluated the alternative desks and
obviously agreed that they were consistent with the specifications, and
since Gel's alternate offer did not take exception to any RFP
requirements, there was nothing improper in the Air Force's choosing to
accept it.
EMI's challenge to the new evaluation criteria included in the final
amendment to the RFP concerns an alleged impropriety incorporated into
the RFP. Our regulations require that protests of this nature be filed
before the next closing date for receipt of proposals. 4 C.F.R. Sec.
21.2(a) (1). As EMI did not raise this objection until well after the
closing date for the second round of BAFO's, this objection is untimely
and will not be considered.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
Matter of: Actus Corporation/Michael O. Hubbard and L.S.C.
Associates
File: B-225455
Date: February 24, 1987
1. The General Accounting Office has no authority to determine what
information the contracting agency must release to the protester under
the Freedom of Information Act but will review the requested source
selection documents in camera to resolve a bid protest.
2. A protest that the request for proposals is defective because it
does not adequately indicate the evaluation factors is untimely where
filed after the contract has been awarded.
3. Where the solicitation does not expressly state the relative
importance of price versus technical factors, price and technical
factors will be considered to be approximately equal in importance.
4. Where selection officials, after evaluating proposals on a basis
clearly consistent with the solicitation's stated scheme, reasonably
regard technical proposals as essentially equal, cost or price may
become the determinative selection factor.
5. Although the protester's proposal received the highest technical
rating, it was not unreasonable for the contracting agency to make award
to the awardee to take advantage of its lower price, where the agency
considered the protester's and awardee's technical proposals to be
essentially equal.
6. Allegation that the source selection board in a procurement for
design and construction of a family housing project improperly allowed
its preference for a townhouse configuration to affect the selection
process is dismissed where the protester could not have been
competitively prejudiced by the board's alleged bias, because the
protester itself offered only a townhouse configuration. Furthermore,
since the protester did not comment upon the agency's report on this
issue, the issue is considered abandoned.
Actus Corporation/Michael O. Hubbard and L.S.C. Associates (Actus), a
joint venture, protests the Department of the Navy's award of a contract
to San Diego Diversified Builders Services (Diversified) pursuant to
request for proposals (RFP) No. N62474-83-R-2553. The solicitation was
issued by the Western Division, Naval Facilities Engineering Command and
requested proposals for design and construction of 200 family housing
units at the Naval Complex, San Diego, California. Basically, Actus
alleges that the RFP is deficient because it does not set forth in
sufficient detail the evaluation factors to be considered in award of
the contract and that the Navy did not properly evaluate proposals in
accord with the evaluation scheme contained in the RFP.
We dismiss the protest in part and deny it in part.
The solicitation was issued on May 30, 1986, and, as amended,
required initial proposals to be submitted by July 30. A preproposal
conference with potential offerors was convened and written questions
were submitted to the Navy which responded with written answers and
clarifications. Eight proposals were received by the Navy and were
evaluated by the Technical Evaluation Board under the guidance of the
Source Selection Board. The evaluators determined that the four highest
technically rated proposals were "high quality technical" proposals of
"almost equal quality." The evaluators determined that there was no need
to conduct discussions with offerors because adequate technical and
price competition had been achieved. The Source Selection Board then
turned its attention to price considerations and concluded that
Diversified's proposal, which was $687,000 less than its nearest
competitor among the four highest rated technical proposals, was the
"most advantageous" proposal. Therefore, award was made to Diversified
on the basis of initial proposals on September 19. Actus protested the
award with the Navy on October 3, and the Navy denied Actus' protest by
letted dated October 21. The present protest was filed with our Office
on NoveMber 3.
At the outset, Actus complains that the Navy refuses to provide it
with certain evaluation documents (the reports of the Technical
Evaluation Board and the Source Selection Board) it requested under the
Freedom of Information Act (FOIA), 5 U.S.C. Sec. 552 (1982). Actus
points out that the Navy's report on this protest contained copies of
these evaluation materials which were so heavily expurgated by the Navy
as to prevent Actus from providing detailed information in support of
its protest. Actus requests that our Office release unexpurgated copies
of those documents to it.
Our Office has no authority to determine what information must be
disclosed by a contracting agency under the FOIA; a protester's
recourse to the contracting agency's denial of its request for documents
is to pursue the remedies provided in the FOIA. E.R. Johnson
Associates, Inc., B-217059, May 8, 1985, 85-1 CPD P 513 at 3. In any
event, although the documents in question have not been furnished to
Actus, the Navy has provided all of the requested source selection
material, as well as the proposals of Actus and Diversified, to our
Office for our in camera consideration.
Concerning evaluation of proposals, the solicitation states (at
paragraph 1C.1, entitled "CONTRACT AWARD") that:
"a. The Government will award a contract resulting from this
solicitation to the responsible offeror whose offer conforming to
the solicitation will be most advantageous to the Government, cost
or price and other factors, specified elsewhere in this
solicitation, considered.
"c. The Government may award a contract on the basis of initial
offers received, without discussions. Therefore, each initial
offer should contain the offeror's best terms from a cost or price
and technical standpoint."
The RFP also contains (in section 4, entitled "STANDARD TECHNICAL
EVALUATION MANUAL FOR TURNKEY NAVY FAMILY HOUSING PROJECTS") 21 pages of
detailed evaluation criteria for use in considering technical proposals
submitted in response to the solicitation. As we understand it, this
technical evaluation manual represents the method used by all agencies
within the Department of Defense to evaluate technical proposals for
turnkey family housing projects and the Navy modified the technical
evaluation manual only slightly for use in the present RFP. No other
evaluation criteria are contained in the solicitation.
The protester argues that "-i-t is apparent that -thesolicitation is
at least deficient, if not defective, on its face because the more
detailed evaluation criteria required by Paragraph 1C.1 are not
"specified elsewhere in the solicitation." The protester further
contends that the RFP does not comply with the Federal Acquisition
Regulation (FAR), 48 C.F.R. Sec. 15.605(e) (1986), which requires the
solicitation to state clearly the evaluation factors, including price or
cost and any significant subfactors that will be considered in the
source selection, and their relative importance.
To the extent that Actus argues that the RFP is defective because it
does not adequately state the evaluation factors which are referred in
paragraph 1C.1 as "other factors" in addition to cost or price, the
protest is untimely. Our Bid Protest Regulations require that a protest
based upon alleged improprieties apparent on the face of the RFP be
filed prior to the closing date for receipt of initial proposals. 4
C.F.R. Sec. 21.2(a) (1) (1986); Medical Services Consultants, Inc. et
al., B-203998 et al., May 25, 1982, 82-1 CPD P 493 at 4. However, Actus
did not protest until after the contract had been awarded to
Diversified. Therefore, we will not consider this issue on its merits.
Actus next alleges that the Navy gave more weight to price than to
technical considerations, and thus misapplied the evaluation criteria as
set forth in the RFP. Actus argues that, where the RFP does not
indicate the relative importance of cost and technical factors, cost and
technical factors are to be considered as approximately equal in weight.
Actus cites previous cases issued by our Office in support of this
principle (Riggins Co., Inc., B-214460, July 31, 1984, 84-2 CPD P 137,
and Fabrics Plus, Inc., B-218546, July 12, 1985, 85-2 CPD P 46).
Actus points our that the Technical Evaluation Board rated its
technical proposal at 767 points out of a possible 1000 points for
technical factors while Diversified's technical proposal was given only
703 points. Actus also points out that it proposed to do the work for
$12,260,000 while Diversified offered a price of $11,533,000. The
protester contends that the Navy should have divided the proposed price
specified by a proposal by the number of points received by that
proposal for technical factors to determine the mathematical ratio of
dollars quoted for each technical point awarded. According to Actus,
"This places exactly equal weight on the cost and technical evaluation
factors. If these calculations are done in this particular instance the
resulting quotient for Actus Corporation, et al. is 15,984
($12,260,000.00 divided by 767), and the comparable figure for San Diego
Diversified is 16,405."
Actus believes that, instead of considering cost and technical
factors as approximately equal in weight, the Navy actually selected the
lowest cost proposal which met "minimum in-house criteria which were not
stated in the RFP." Actus charges that the Navy gave greater weight to
the lower cost offered by Diversified than to the higher technical score
given to Actus' proposal by the Technical Evaluation Board. In sum,
Actus concludes that it should have been awarded this contract based
upon its lower cost per technical point ratio.
The RFP specifically stated in paragraph 1C.1 that award would be
made on the basis of the' "ost advantageous" offer "cost or price and
other factors, specified elsewhere in this solicitation, considered."
The RFP then set out in section 4 a very detailed technical evaluation
manual which described precisely how technical proposals would be
evaluated. In its written answers to preproposal questions, the Navy
indicated that the term "other factors" referred to the technical
features of a proposal as evaluated in accord with the RFP's technical
evaluation manual. In paragraph 4A.2 of the "Introduction" to this
technical evaluation manual, the RFP stated the major evaluation areas
and the percentage of relative weight assigned to each evaluation area,
as follows:
b. Site Engineering 10%
c. Dwelling Unit Design 50%
d. Dwelling Unit Engineering 10% and Specifications Technical
Evaluation Total 100%"
Thus, while the relative importance of price vis-a-vis technical
factors was not expressed in the RFP, the technical factors and their
importance relative to other technical factors were clearly stated.
Regarding the emphasis placed upon price by the Navy in the selection
process, as the protester notes, we have previously held that where, as
here, an RFP indicates that cost will be considered, without explicitly
indicating the relative weight to be given to cost versus technical
factors, it must be presumed that cost and technical considerations will
be considered approximately equal in weight. See Medical Services
Consultants, Inc. et al., B-203998 et al., supra, 82-1 CPD P 493.
Moreover, we have specifically held that, even where price is not listed
at all as an evaluation factor, it should be obvious to all offerors
that, if proposals are otherwise equal, the overall cost to the
government would be an important factor, since cost must be considered
in every competitive procurement. Multinational Agribusiness Systems
Inc., B-201447, June 15, 1981, 81-1 CPD P 482. Furthermore, as
indicated above, the RFP (in paragraph 1C.1) specifically put offerors
on notice that price would be an important consideration in the
selection decision. Thus, we think it is clear from the RFP and general
procurement principles that price was to be a key element of the award
decision.
In considering protests against an agency's evaluation of
proposals, we will not evaluate the proposals anew and make our own
determination as to their acceptability or relative merits. Bendix
Field Engineering Corp., B-219406, Oct. 31, 1985, 85-2 CPD P 496.
However, we will examine the record to determine whether the evaluation
was consistent with the evaluation criteria. See Deuel and Associates,
Inc., B-212962, Apr. 25, 1984, 84-1 CPD P 477.
Where, as here, the RFP does not assign weights to technical factors
and cost upon which a selection is to be based, the selection officials
retain considerable discretion in determining the significance of
technical point score differentials in making technical/cost tradeoffs.
Association for the Education of the Deaf, Inc., B-220868, Mar. 5, 1986,
86-1 CPD P 220 at 5. Their decision, the manner in which they use the
results of technical and cost evaluations, and the extent, if any, of
technical/cost tradeoffs are governed only by the tests of rationality
and consistency with established evaluation criteria. Id. Thus, Actus'
contention that the Navy was required to award the contract to it
because Actus' price per technical point ratio was slightly lower than
Diversified's price per technical point ratio is not persuasive. Since
the RFP did not provide a formula demonstrating how price and technical
scores would be used in the selection process, the selection officials
were free to use any reasonable method to select the most advantageous
proposal as long as price and technical scores were given approximately
equal weight and the evaluation was conducted in a manner which was
consistent with the RFP's stated evaluation scheme.
Where selection officials reasonably regard technical proposals as
being essentially equal, cost or price may properly become the
determinative factor in making an award, even where the RFP evaluation
scheme assigns cost less importance than technical factors. Id. at 6;
SETAC, Inc., 62 Comp. Gen. 577 (1983), 83-2 CPD P 121. Here, where
price was not assigned any weight relative to technical considerations
and therefore must be considered approximately equal to the technical
factors in the selection process, it is even more apparent that lower
cost or price could properly be the deciding factor since the agency
considers the proposals to be essentially technically equal.
We have reviewed all of the evaluation materials, including the
unexpurgated copies of the Technical Evaluation Board's report and the
Source Selection Board's report, and examined the proposals submitted by
Actus and Diversified in light of the protest issues raised by Actus.
We conclude that the technical evaluation was conducted in general
compliance with the RFP's technical evaluation manual. While we are not
at liberty to discuss the details contained in the Source Selection
Board's and the Technical Evaluation Board's reports, we can verify that
the evaluation appears to have been very thorough, included virtually
every significant area of the technical evaluation manual, and gave
proper emphasis to technical areas based upon the weights assigned each
evaluation factor in the technical evaluation manual (quoted above).
The Technical Evaluation Board gave the four highest quality
proposals total technical scores ranging from a high of 767 points
(Actus) to a low of 703 points (Diversified), while the four lowest
quality proposals were given total scores in the range from 664 points
to 423 points. The Source Selection Board considered the four proposals
(including Actus' and Diversified's proposals) with the highest
technical ratings to be "high quality technical proposals each of which
provided a significant amount of amenities with few undesirable
features." The record also shows that the Source Selection Board
considered the four highest technically rated proposals to be of "almost
equal quality" and that the Source Selection Board attempted without
success to find anything significant which set one proposal above the
others on technical grounds alone.
Ultimately, the Navy selected Diversified's proposal for award,
because it was essentially technically equal to the highest rated
proposal (Actus) but represented a savings of approximately $727,000
over that proposal, and $687,000 over the next lowest cost proposal in
the "high quality" rated category. Moreover, the Navy determined that
Diversified's proposal represented the "lowest overall cost" to the
government.
We find nothing in the record to suggest that Diversified's proposal
received a higher technical rating than was reasonable and consistent
with the stated evaluation criteria. See The Orkand Corp., B-224541,
Dec. 31, 1986, 86-2 CPD P 723. In view of the fact that Actus'
proposal was only rated 9 percent higher in technical quality than
Diversified's proposal, we cannot find unreasonable the Navy's
determination that the proposals were essentially technically equal. We
have upheld determinations that technical proposals were essentially
equal despite differentials significantly greater than the one here.
See, for example, Lockheed Corp., B-199741.2, July 31, 1981, 81-2 CPD P
71 (where the differential was more than 15 percent). Accordingly, the
Navy's decision to save approximately $687,000 by awarding to
Diversified was reasonable.
Actus also alleges that the Source Selection Board preferred
proposals offering townhouse configurations over those offering
apartment configurations and that this bias improperly entered into the
selection process even though the RFP did not indicate that the Navy
preferred townhouses. However, assuming for the sake of argument alone
that the Source Selection Board actually preferred townhouses over
apartments, we cannot see how Actus was competitively prejudiced by the
Board's alleged bias since Actus itself proposed only a townhouse
configuration. See Micro Research, Inc., B-220778, Jan. 3, 1986, 86-1
CPD P 9 at 3. Furthermore, in its report on this protest, the Navy
rebutted Actus' allegation and pointed out that Actus had offered no
evidence to support the charge. When it commented on the Navy's report,
Actus did not refute the Navy's arguments or comment further on this
issue. Therefore, we consider Actus to have abandoned this protest
issue and need not consider it further. See Military Base Management,
Inc., B-224128, Nov. 26, 1986, 86-2 CPD P 616.
Finally, Actus has requested that it be reimbursed the costs of
preparing its proposal. However, since we find the protest to be
without merit, we deny the claim for costs. COMSAT International
Communications, Inc., B-223953, Nov. 7, 1986, 86-2 CPD P 532.
The protest is dismissed in part and denied in part.
Harry R. Van Cleve
General Counsel
Matter of: McBer and Company
File: B-225453
Date: February 11, 1987
Protest against total small business set-aside is denied where
protester argues that small businesses are by virtue of their size less
qualified than large businesses to perform, but does not show that
contracting officer's determination that offers will be received from at
least two responsible small businesses was unreasonable.
McBer and Company protests the Navy's designation of request for
proposals (RFP) No. N00600-86-R-5787 as a total small business
set-aside. The RFP sought offers for leadership and management
education and training services for 1 base year and 2 option years.
McBer argues that it is not in the government's interest to set the
procurement aside since small businesses by virtue of their size will
not be able to deliver as high quality service as would a large
business. We deny the protest.
The Federal Acquisition Regulation (FAR), 48 C.F.R. Sec. 19.502-2
(1986), directs that an acquisition be set aside for exclusive small
business participation if the contracting officer determines that there
is a reasonable expectation that offers will be obtained from at least
two responsible small businesses and award will be made at a reasonable
price. The decision to set aside a procurement is basically a business
judgment within the broad discretion of the contracting agency, so we
will not question a set-aside decision unless an abuse of discretion is
clearly shown. Anchor Continental, Inc., 65 Comp. Gen. 270 (1986), 86-1
CPD P 137.
McBer, in essence, contends that the contracting officer, in
considering whether to set the procurement aside, should have taken into
account the impact of the small business set aside upon the quality of
the work that would be provided.
Specifically, McBer says that in this case a small business will not
be able to perform the training services because a business which is
small enough to meet the applicable small business size standard of $3.5
million in average annual receipts would need to devote so substantial a
percentage of its annual business and staff to this one contract that it
would have no other clients or work. Further, the protester argues that
a small business will not have the corporate experience in prior
contracts required by the solicitation and will most likely have to
subcontract at least part of the effort to a large business because most
small businesses simply do not possess the resources to do the job
themselves.
McBer has cited no authority for its proposition that a contracting
officer must make a comparative evaluation of the qualifications of
potential small business and large business offerors and determine which
can better perform the service before deciding to set a procurement
aside, and we are aware of none. The regulations do require that the
contracting officer determine that at least two responsible small
businesses can be expected to submit offers. FAR, 48 C.F.R. Sec.
19.502-2. In this regard, the agency need not make a determination
tantamount to an affirmative determination of responsibility. It is
only obligated to make an informed business judgment that there is a
reasonable expectation of receiving offers from small firms that are
capable of performing the contract. Fermont Division, Dynamics
Corporation of America, et al., 59 Comp. Gen. 533 (1980), 80-1 CPD P
438. While the protester says it will do a better job than any small
business, it does not argue that small business would be unable to
perform and it has not shown that the contracting officer's judgment to
set this procurement aside was unreasonable.
Finally, as far as McBer's complaint that a portion of the services
might be subcontracted to a large business is concerned, we note that
subcontracting with a large business under a service contract set aside
for small business is not legally objectionable. Industrial Disposal
Systems, Inc., B-220493, Oct. 17, 1985, 85-2 CPD P 419.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: AquaSciences International, Inc.--Request for
Reconsideration
File: B-225452.2
Date: February 5, 1987
Where protester has not shown that government officials acted
fraudulently or in bed faith in refusing to issue certificate of
competency, dismissal of protest is affirmed.
AquaSciences International, Inc. (ASI), requests that we reconsider
our dismissal of its protest against the contracting officer's
determination of nonresponsibility and the Small Business
Administration's (SBA's) subsequent refusal to issue a certificate of
competency (COC). We dismissed the protest because our Office generally
does not review such matters unless the protester can show either that
government officials may have acted fraudulently or in bad faith or that
SBA failed to consider vital information bearing on the firm's
responsibility. Franklin Wire & Cable Co.-- Reconsideration,
B-218557.2, et al., June 5, 1985, 85-1 C.P.D. P 644.
In its request for reconsideration, ASI argues that its protest
should not have been dismissed because it alleged that the contracting
agency (the Department of the Army) acted in bad faith by failing to
submit to SBA, for its COC determination, information which ASI supplied
to the Army that ASI believes supports ASI's position that it is a
responsible contractor (that information was ASI's rebuttal to the
pre-award survey), and SBA acted in bad faith or fraudulently in denying
a COC on grounds other than those relied on by the Army.
Upon reconsideration, we affirm our dismissal.
The Army provided SBA with a copy of the pre-award survey. ASI was
afforded the opportunity to rebut the survey to the SBA. As discussed
below, we believe that the SBA did consider all information submitted by
the Army and ASI concerning ASI's responsibility. In any case, the
burden is on the contractor to submit all relevant information proving
it is responsible when applying to the SBA for a COC. See Federal
Acquisition Regulation (FAR), 48 C.F.R. Sec. 19.602-2(a) (1986); R.S.
Data Systams, 65 Comp. Gen. 74 (1985), 85-2 C.P.D. P 588, aff'd, 65
Comp. Gen. 132 (1985), 85-2 C.P.D. P 687.
ASI also contends that the contracting officer acted in bed faith by
not delaying his determination on ASI's responsibility until ASI
responded to concerns raised in the pre-award survey. The contracting
officer reports that ASI failed to provide additional documentation
concerning the pre-award survey by a cut-off date established after the
deficiencies were brought to ASI's attention. Although ASI disputes the
date of the cut-off, a procuring activity is not required to delay an
award decision indefinitely while a bidder attempts to cure the causes
of its nonresponsibility. See Roarda, Inc., B-204524.5, May 7, 1982,
82-1 C.P.D. P 438. In this case, we conclude ASI was treated fairly.
ASI also argues that SBA acted fraudulently or in bad faith by
refusing to issue a COC for a reason different from that given for the
Army's determination of nonresponsibility. The record shows that the
contracting officer found ASI nonresponsible on the basis that it lacked
adequate planning, had no facility or equipment to produce the item, no
employees to perform the contract, and no vendor commitments made
directly to ASI. SBA, in refusing to issue the COC, stated that it
found no sufficient reason for disagreeing with the decision of the
contracting officer, end that it considered ASI's performance plan to be
inadequate.
In any event, contrary to ASI's belief, the COC procedure is not
limited to a consideration of the deficiencies found by the contracting
officer. While SBA may evaluate information supplied by the contracting
officer, it makes its own independent investigation of a firm's
responsibility. See 13 C.F.R. Sec. 125.2 (1986). We have found it is
reasonable, following an independent evaluation, for SBA to refuse to
issue a COC for a reason different from the contracting officer's.
Certified Testing Corp., B-212242, Nov. 8, 1983, 83-2 C.P.D. P 542; ALS
Electronics Corp., B-178033, Feb. 22, 1974, 74-1 C.P.D. P 92.
ASI also contends that SBA failed to consider vital information
bearing on its responsibility. According to ASI, SBA did not consider
the impact of material cost discounts on the cost of contract
performance, the likelihood that ASI would receive progress payments on
the contract, the relative closeness of ASI's bid price to other
bidders, or that ASI had in excess of $5,000,000 available to it.
Our review of the record, however, shows that SBA considered all this
information, but that this information did not resolve SBA's questions
about ASI's ability to successfully perform the contract. SBA concluded
that there were too many indications of inadequate project planning to
certify to ASI's competence to perform the contract successfully. ASI
apparently disagrees with SBA's conclusion, rather than with the facts
on which the conclusion was based. Such a disagreement does not show a
reasonable possibility that ASI was denied a COC due to fraud or bad
faith or provide our Office with other grounds on which to undertake an
independent review of SBA's decision. See Franklin Wire & Cable Co.,
B-218557, et al., May 7, 1985, 85-1 C.P.D. P 511.
In comments on the agency report prepared in response to ASI's
request for reconsideration, ASI argues for the first time that a member
of the pre-award survey team exhibited blatant bias against ASI at a
pre-award survey meeting, and that the member's conduct tainted the
nonresponsibility determination.
Our Bid Protest Regulations do not permit a piecemeal presentation of
evidence, information, or analyses. Where, as here, a party submits in
its request for reconsideration an argument that it could have presented
at the time of the protest, but did not, the argument does not provide a
basis for reconsideration. Joseph L. De Clerk and Associates,
Inc.--Reconsideration, B-221723.2, Feb. 26, 1986, 86-1 C.P.D. P 200.
The dismissal is affirmed.
Harry R. Van Cleve
General Counsel
Matter of: Le Don Computer Services, Inc.
File: B-225451.2; B-225451.3
Date: April 28, 1987
1. Protest alleging that contracting agency improperly waived
equipment demonstration requirement for the awardee, permitted technical
transfusion of some of the protester's proposal, engaged in improper
price prompting, and entered into certain agreements only with awardee
is denied. The Navy reasonably determined that the awardee's equipment
met contract requirements based on performance under prior contract and
trade show demonstration and protester has not alleged nor shown any
prejudice resulting from waiver of the demonstration, and there is no
evidence of improper technical transfusion, price prompting, or
agreements.
2. Protester's request for reconsideration of prior decision is
dismissed as academic where all issues addressed in the earlier
decision, which is subject of reconsideration request, have been dealt
with at length on the basis of an expanded record in the present
decision denying the protest.
Le Don Computer Services, Inc., has protested the award of a contract
to Online Products Corporation (Online) under Request for Proposals
(RFP) No. N00600-88-R-1660, issued by the Naval Regional Contracting
Center, Washington, D.C., for hardware, software installation, and
maintenance services for a computer-assisted medical instruction system
for the Naval Health Sciences Education and Training Command.
Le Don alleges that the Navy: (1) effectively amended the RFP by
improperly deleting a testing requirement; (2) improperly permitted
technical transfusion of some of Le Don's proposal; (3) engaged in
improper price prompting; and (4) improperly entered into certain
agreements during negotiations only with Online.
We deny the protest.
On February 18, 1986, the Navy issued the RFP seeking an indefinite
quantity, fixed-priced contract for hardware, software, and maintenance
support over a 5-year period for the computer-assisted medical
instruction system. This system is used by Navy Medical Corps schools
and hospitals in the United States and abroad. The purpose of this
system is to reduce student attrition rates, to increase medical
readiness, and to increase skill levels at Navy medical schools. This
system also augments traditional training methods used in medical
schools.
The RFP's initial closing date was March 18, 1986. Award was to be
made to the offeror submitting the lowest overall technically acceptable
offer. Four offerors submitted proposals by the initial closing date.
In a technical evaluation dated May 9, 1986, the Navy subsequently found
all four offers unacceptable as submitted but capable of being made
acceptable. The Navy held discussions with all offerors to allow them
an opportunity to correct deficiencies in their proposals.
Subsequently, on May 20, 1986, the contracting officer requested final
proposals which were submitted by May 30, 1986. Evaluation of the
revised proposals showed that the proposals of Le Don and one other
offeror were now considered to be acceptable. Le Don then requested
that the Navy add an economic price adjustment clause to the RFP. The
Navy added the requested clause to the RFP and thereafter afforded all
offerors the opportunity to submit a second round of final proposals by
September 22, 1986. In its second best and final offer, Le Don revised
its approach to the maintenance of equipment used by Navy schools abroad
and reduced its price from its initial offer of $2,568,228 to
$1,463,138. On October 17, 1986, the contract was awarded to Online
based on its low, evaluated price.
Le Don argues that the Navy effectively waived for Online an
"operational capability demonstration" (OCD) while requiring other
offerors to perform this demonstration on their own systems. Le Don
points out that clause M.7 of the RFP, Performance Validation, requires
that all offerors had to perform an operational capablity demonstration
which would show that the "equipment and software proposed" can perform
all mandatory requirements and evaluated optional features offered in
the proposal. Further, the RFP stated that the demonstration should
permit the Navy to unequivocally determine the presence and adequacy of
each feature and capability. Yet, according to Le Don, Online's system,
as finally proposed, was not so tested.
The Navy has replied to this ground of protest by arguing that it saw
no need to perform a demonstration test on Online's finally-proposed
system since the Navy had previously tested "essentially the same
equipment" under a 1985 contract. According to the Navy, the Online
system tested earlier demonstrated in the field its capability to
fulfill the requirements of this RFP because the 1985 contract involved
an "identical system application" for use at Navy hospitals and
medical schools. Further, the Navy states that since the system under
the 1985 contract was purchased and tested, the Navy has not required
more stringent functional or performance capabilities.
In reply, Le Don argues that the prior Online system differs from the
present system in several areas involving microcomputer, power
considerations, printing functions, and hard disc. Further, Le Don
argues that Online is proposing under this RFP a new microcomputer which
has not yet been tested and a new disc player which had not been
"formally announced" for business marketing purposes contrary to an RFP
requirement. Moreover, Le Don argues that its understanding with the
Navy was that the demonstration was to be an "on-site" demonstration of
actual equipment, not a "technical evaluation of equipment literature."
Notwithstanding Le Don's technical objections, the Navy insists that
it has "indeed received assurance" that Online's finally-proposed system
will perform as required by the specifications so as to fulfill, for all
practical purposes, the RFP's statement that the demonstration is
"intended to provide reasonable assurance to the Navy that the proposed
system does, in fact, have the required capabilities." In this
connection, the Navy points out that we previously have permitted an
agency to waive a testing requirement where the waiver is not arbitrary
or prejudicial to the protester. See Sperry-Univac, B-195028, Jan. 3,
1980, 80-1 C.P.D. P 10 at page 4. We have taken this position because
even if testing requirements are waived, the waiver does not affect the
contractor's legal obligation to furnish a conforming system.
In response to the Navy's waiver argument, Le Don argues that the
waiver was simply contrary to its reading of the RFP which Le Don
considered to preclude the submission of substitute, untested equipment
in its final offer. Nevertheless, Le Don does not allege that
substituted equipment would have affected its proposed prices. Further,
there is no indication in the record that Online knew this demonstration
would be waived when it submitted its final offer and price.
Le Don specifically alleges that the Navy has not shown how Online
demonstrated its capability to meet certain features required for the
microcomputer, printer functions, the hard disk and power
considerations. We disagree. The Navy has reasonably demonstrated, in
our view, that it did obtain appropriate assurances that Online's
finally-proposed system would comply with all requirements so as to
render a formal demonstration unnecessary. In fact, with regard to
certain of the essential equipment and required software the agency has
actually seen the items perform. Specifically, with respect to the
requirements to create, write and read from a ram disk, the printer
buffer, print spooling capability, the hard disk and operations using
foreign sources of power, the record indicates that the Online system's
capability either had been demonstrated previously under the Navy's 1985
contract with Online for virtually the same system or was demonstrated
at a computer trade show the previous year. We find that, although no
formal demonstration under this RFP was conducted, the agency reasonably
established the system's operational capability prior to awarding Online
the contract.
Le Don also argues that the OCD could not be waived because Online is
proposing use of a new microcomputer which is untested. The Navy states
that the IBM-compatible computer proposed by Online merely enhances the
computer used by Online in the system purchased under the 1985 contract.
For example, the IBM compatible computer proposed in Online's second
best and final offer and the computer that is part of the previously
tested system both have an Entel 8,888 central processing unit and both
can use a Microsoft disc operating system. The enhancements concern
reduced power demand (65 watts versus 130 watts previously required).
Also, the IBM compatible computer now proposed contains one 20 megabyte
hard disc drive in addition to one 360 kilobyte floppy disc drive. The
computer currently used only has a 360 kilobyte floppy disc. In these
circumstances, since the earlier computer equipment demonstrated its
ability to perform the same mission that is the subject of this
procurement, we do not find unreasonable the Navy's finding that the
enhanced equipment can also perform the mission.
Le Don also asserts that the disc player was not formally announced
(commercially available) as required by the RFP. The Navy responds that
the Pioneer LDV 4200 disc player proposed by Online in its second best
and final offer is an enhancement of the LDV 1000 which Pioneer
discontinued. The Navy further states that the LDV 4200 functions
essentially the same as the LDV 1000 currently being used to perform
Online's 1985 contract. The record shows that key features of the LDV
1000 and the LDV 4200 are identical. For example, both models have:
full random access to 54,000 frames of video (30 minutes); two sound
channels; and variable play speeds. The enhancement in the LDV 4200 is
that it can be controlled manually as well as by computer whereas the
LDV 1000 is computer controlled and has no manual control.
The Navy's position is that the enhanced disc player's earlier
version so demonstrated the acceptability of the player that there was
no need for performance testing of the disc player. While Online's
proposed disc player was not formally announced contrary to the express
RFP provision that the equipment be "formally announced for marketing
purposes on or before the closing date of the RFP," the apparent purpose
of the provision was to prevent offerors from introducing
technologically new equipment rather than to exclude unannounced
equipment which, objectively, is merely enhanced equipment functionally
and substantially equivalent to existing, previously-tested equipment.
Thus, we do not question the Navy's acceptance of Online's disc player.
Further, Le Don does not argue that it would have substituted
unannounced "enhanced equipment" at a lower price had it known of the
Navy's intent. Thus, Le Don was not prejudiced by the Navy's
interpretation of this provision.
Based on this record, we do not consider this waiver of formal
demonstration testing to be unreasonable or prejudicial since there is
no allegation, let alone any showing by Le Don, that it would have
offered acceptable substitute equipment at a price below that of the
award price had it been permitted to revise its finally-proposed
equipment.
Le Don argues that the Navy disclosed aspects of Le Don's offer to
Online during the contracting process because several items in Online's
final proposal are allegedly too similar to items proposed by Le Don to
be simply the result of coincidence. For example, Le Don complains that
the integration and test procedure submitted by Online in its final
offer is very similar to that proposed by Le Don during a preaward
facilities audit, which required a description of Le Don's quality
assurance procedure. Additionally, Online's final offer completely
changed its maintenance concept to allegedly contain the major
components of the mail-in, mail-back maintenance system proposed by Le
Don.
In reply, the Navy states that the maintenance method finally
proposed by these offerors is neither unique nor proprietary and, in
fact, is widely known. Also, the contract negotiator, contracting
officer, and technical evaluator, by affidavits, deny they informed
Online of Le Don's maintenance strategy or of Le Don's integration and
test procedure.
Given the absence of any evidence of a leak, recognizing that the
Navy denies that any leak took place, and given the Navy's position that
the maintenance system proposed is neither proprietary nor unique, which
Le Don does not dispute, we deny this ground of protest.
Le Don points out that in a Navy evaluation report there appears the
statement that "Online is encouraged to propose the best
price/performance system meeting the specifications" and that this
statement is not found in the evaluation of any other offeror's
proposal. Le Don suggests that this statement reflects impermissible
price prompting on the Navy's part and resulted in a drastic revision of
Online's price and technical proposal as transmitted at the final offer
stage.
However, the Navy insists that neither the contract negotiator, the
contracting officer, nor the technical evaluator disclosed Le Don's
prices or informed OnLine of its relative price standing. Specifically,
the Navy states that offerors received evaluation reports which
addressed technical deficiencies only and that the notice of
deficiencies to Online contained no express suggestion--nor hint of
suggestion--that Online should reduce its price.
We do not think that the statement quoted above, encouraging Online
to submit its best price and performance system was improper, but merely
good advice which should have been obvious to all offerors without the
Navy's specific statement. Le Don does not allege nor does the record
indicate that the Navy disclosed to Online or any offeror any firm's
prices or competitive standing. While the record does not contain an
explanation for Online's price reduction in its second best and final
offer, we have no basis to conclude that the price reduction resulted
from any improper agency action. Therefore, we deny this ground of
protest.
Le Don also alleges, and the Navy denies, that the Navy improperly
entered into certain understandings with Online regarding maintenance
and installation assistance without giving similar assurances to Le Don,
which gave Online an unfair competitive advantage.
Le Don suggests that the Navy gave Online a fixed delivery schedule
without giving Le Don the same information. There is no support for Le
Don's allegation in the record. Amendment four of the RFP contained a
delivery schedule which indicated the schedule was for evaluation
purposes only and that the schedule did not obligate the Navy to order
the equipment in the time periods shown. Moreover, the Navy denies that
it did otherwise "firm-up" the RFP delivery schedule. There is no
indication that Online based its offer on any information other than
that contained in the RFP.
Le Don also suggests that the Navy gave improper assurance to Online
that the Navy would assist with installation. The Navy points out that
the RFP clearly stated that the contractor was ultimately responsible
for installation. Also, the Navy insists that it did not give any other
informal assurance to Online about installation. Also, Online states in
its offer that it "understands that it is responsible for the successful
installation of the... system, irrespective of the installation support
being given by the Navy." Although Online's proposal contains an
statement that the Navy would provide installation, which the Navy
agrees is contrary to the RFP statement, it is clear that when Online's
other statement is considered, that Online understood it was ultimately
responsible for the installation, regardless of the extent of Navy
support.
Finally, Le Don asks that we reconsider our dismissal in Le Don
Computer Services, Inc., B-225451, Jan. 9, 1987, 87-1 C.P.D. P , which
involved basically the same issues denied above, although on the basis
of a more limited record than that now before us.
Since we have considered and found without merit Le Don's protest
under the expanded record before us now, we consider Le Don's request
for reconsideration to be academic and we dismiss it.
Harry R. Van Cleve
General Counsel
Matter of: De La Rue Giori, SA-- Request for Reconsideration
File: B-225447.3
Date: June 15, 1987
Prior decision is affirmed on reconsideration where protester merely
reiterates previously denied arguments and has not shown any error or
fact or law that would warrant reversal or modification of previous
decision.
De La Rue Giori, SA requests reconsideration of our March 19, 1987
decision, De La Rue Giori, SA, B-225447, 87-1 C.P.D. P 310, denying its
protest of the award of a contract to Hamilton Tool Company under
request for proposals (RFP) No. BEP-85-73 (N), issued by the Bureau of
Engraving and Printing, Department of the Treasury. The prior decision
is affirmed.
The RFP solicited the design, fabrication, installation, testing, and
evaluation of a web intaglio currency press designed to print the face
and back image of U.S. currency in one pass through the press--a
capability that would render the press the first of its kind to be put
into production. The principal issue in its protest, as Giori itself
recognized, was whether its technical proposal was properly evaluated in
the area of project management, one of five technical evaluation
criteria set forth in the RFP. Specifically, the protester contended
that, although prior to the submission of proposals it had begun
development of a press such as that required under the subject
solicitation and had, thus, completed start up activities for the
project, the Bureau improperly failed to credit Giori's proposal with
any of the five possible points allocated for the project management
subcriterion, "start up activities." Giori further alleged that the
conduct of the procurement was unfair in that the Bureau orally
requested and obtained a third best and final offer (BAFO) from both of
the other final competitors for the contract but did not afford Giori
the same opportunity, and that the Bureau violated the Federal
Acquisition Regulation (FAR), 48 C.F.R. Sec. 15.611 (a) (1986), because
it failed to confirm the oral request for BAFOs in writing.
We denied the protest on the basis of our finding that the Bureau
acted within its discretion in evaluating proposals in accordance with
the evaluation criteria as set forth in the RFP, upon which basis it
determined that award should be made to Hamilton since Hamilton
submitted the technically superior proposal. We further concluded that
Giori's allegation that it was not afforded an opportunity to submit a
third BAFO was without merit because the record indicated to the
contrary, and even though the agency's failure to follow its oral
request with a written confirmation as required by the FAR was a
procedural deficiency, it did not render the procurement fatally flawed
since the record indicated that all offerors including Giori had notice
of the request and responded to it.
In its request for reconsideration, Giori contends that we (1) failed
to address properly the principal basis of its protest--that is, that
the Bureau improperly scored Giori's proposal in the area of start up
activities; (2) inaccurately represented the facts concerning the
Bureau's "alleged" request for third BAFOs; and (3) did not address
Giori's allegation that the Bureau failed to justify its award of the
contract to a higher priced offeror.
In its request for reconsideration, Giori asserts that our denial of
its protest concerning the evaluation of its technical proposal under
"start up activities" is flawed because it conflicts with facts recited
elsewhere in the decision. Giori has constructed its factual
"conflicts" by paraphrasing our decision, selectively quoting from it
and attributing to our Office as its own factual findings statements we
quoted from Giori's technical proposal and agency documents.
We noted in our March 19 decision that the RFP clearly stated under
the section entitled, "Evaluation Factors for Award," that the primary
objective of the evaluation of proposals was to insure selection of the
source that "affirmatively demonstrates in its written proposal that it
offers optimum satisfaction with regard to performance, schedule and
cost." (Emphasis in original.) We further noted that Giori failed to
address the matter of start up activities in its proposal, even after
the Bureau on three separate occasions during discussions directed the
protester's attention to the weakness of its proposal in that area and
specifically requested Giori to "provide additional information on how
you intend to manage "start up activities" . . . ." (Emphasis in
original.)
However, Giori's only written response to that solicitation
requirement and the Bureau's requests for additional start up
information was provided in a telex stating, in essence, that the firm
was working on a press with printing capabilities required by the Bureau
and was in the process of conducting developmental tests on that
product. No specific details or information regarding the subject of
start up activities for building and providing a press for the Bureau's
use was ever written in the proposal. Thus, contrary to Giori's
statement in the request for reconsideration that "its protest is simply
that its proposal was not evaluated on the same basis as those of other
offerors with references to the criteria of "start up activities," our
prior decision explained that under the provisions of the RFP, the
agency could not fairly give Giori full credit for that requirement (or
for other elements of the project management plan requirements) because
Giori never presented as a part of its proposal a complete written
response for that evaluation criterion. Moreover, we have held that
regardless of how low in price and capable an offeror may be, technical
evaluations are based on the information submitted in proposals, and the
offeror assumes the risk of having its proposal rejected if it does not
submit an adequately written proposal. Henderson Aerial Surveys, Inc.,
B-215175, Feb. 6, 1985, 85-1 C.P.D. P 145 at 3; Twin City Construction
Co., B-222435, July 25, 1986, 86-2 C.P.D. P 113 at 3.
In our previous decision, we also considered and denied Giori's
allegation that the Bureau did not afford the firm an opportunity to
submit a third BAFO as it did with respect to other offerors. Giori
asserts that we erred in concluding that the agency did not violate the
FAR by failing to confirm, in writing, its oral, third request for
BAFOs, and in so holding, we "condoned" such action not only by the
Bureau but other federal agencies. Giori's argument is incorrect.
The conclusion of the decision is devoted to an explanation of why in
our view the record did not support Giori's assertion that no oral
request for a third BAFO was ever made of it, and we end that discussion
with the statement:
". . . while the agency's failure to follow the oral request
with a written confirmation was a procedural deficiency, it was
not prejudicial to any offeror since all had notice of the request
and responded to it."
In its request for reconsideration, Giori also seeks to reargue the
underlying issue of whether the agency did, in fact, orally request of
it a third BAFO. Such a reargument provides no basis for
reconsideration. See Federal Contracting Corporation--Request for
Reconsideration, B-224064.2, Nov. 3, 1986, 86-2 C.P.D. P 512.
Finally, Giori's charge that our decision did not address its protest
allegation that the Bureau failed to justify the award based on a higher
priced offer is without merit since that was not an issue initially
raised in Giori's protest. The protest alleged that the Bureau did not
"base the award on the factors set forth in the RFP's evaluation
criteria," and as an example pointed to the fact that award was made
based on a higher priced proposal. In our decision, we noted that the
Bureau evaluated offers based on the written proposals in accordance
with the evaluation scheme set forth in the RFP. Since cost
considerations were subordinate to technical considerations, it was not
improper for the Bureau to make award based on a higher priced
technically superior offer.
Since the protester has not shown any error of fact or law in our
prior decision, it is affirmed.
Comptroller General
of the United States
Matter of: Miller Printing Equipment Corp.
File: B-225447.2
Date: March 24, 1987
Award of contract for prototype currency printing press for the
Bureau of Engraving and Printing is proper where record shows that: (1)
Bureau's decision was made on valid technical evaluation of submitted
proposals; (2) meaningful discussions were held with protester in area
of proposal which was considered at first deficient and then weak; and
(3) award was not the result of improper political influence or bias.
Miller Printing Equipment Corporation protests the Bureau of
Engraving and Printing's decision to award a firm-fixed price contract
to Hamilton Tool Company for a "Web Intaglio Printing Press" under
request for proposals (RFP) No. BEP85-73(N). Specifically, the RFP
required the contractor to "design, construct, factory test, deliver and
install the press , and thereafter conduct an acceptance test, and an
extended test and evaluation on the performance of the press ." The
contractor was to supply all labor, materials, and supplies and provide
the Bureau with a press which had satisfied the acceptance test
requirements, along with the requisite documentation, associated
equipment, and training.
We deny the protest.
The RFP provided for five technical evaluation standards in
descending order of importance (except for the second and third
standards which were equally weighted), as follows: technological
approach; project management plan; offeror's experience and capacity;
qualifications of professional staff; and implementation cost. All of
these standards together were worth a maximum weight of 75 points.
As to the importance of price, the RFP assigned a maximum weight of
25 points under a mathematical formula, which assigned the lowest-priced
technically acceptable proposal the maximum possible number (25) of
price points. All other proposals were to receive proportionally fewer
price points depending on how close (or how far away) the proposed
prices were to the lowest priced proposal. The RFP further provided
that technical proposals were to show merit in the following areas to be
considered acceptable: management experience and competency,
demonstrated production proven intaglio printing technology,
development, manufacturing and implementation of intaglio printing
equipment, documentation and training, maintenance, complex electronics,
including computer system technology, and applications, intaglio web
press technology, including automated control, paper handling, inking
and impression subsystems and web drying, and, finally, ergonomics.
The Bureau received four proposals, including ones from Miller and
Hamilton, by the RFP's closing date on October 10, 1985. One proposal
was considered to be noncompetitive and eliminated from consideration.
The proposals of Miller, Hamilton, and one other offeror, De La Rue
Giori, were all considered to be competitive. Hamilton received
substantially more technical points than either Miller or Giori who were
scored relatively equal. All of these offers were then each sent a
Bureau letter on November 21, 1985, which listed deficiencies and
weaknesses in the offeror's proposal, and required a response from each
offeror by January 3, 1986.
On January 16, 1986, the Bureau notified the three remaining offerors
again in writing concerning further clarifications requested. Responses
were due by January 27, 1986. Also during the week of January 26, 1986,
a visiting committee from the Bureau toured the offerors' designated
sites to confirm the level of intaglio web capability of each firm. The
visiting committee attempted to assess the level of user training
required to learn to operate the existing press; maintenance complexity
of the equipment; user satisfaction with equipment and vendor; the
level of availability of the equipment--its mean time between failure
and mean time to repair; the stability of the equipment; and
ergonomics.
After evaluations of the information received on January 27, 1986,
letters dated March 21, 1986, were sent to all parties concerned
requesting "best and final" offers. These letters also contained RFP
amendment No. 5 which added an unpriced option for a second printing
press to the RFP and stated that responses were due by April 14, 1986.
This option was subsequently deleted by amendment No. 6, dated July 14,
1986.
After the Bureau decided that the unpriced option added by amendment
No. 5 was "inappropriate," a second "best and final" was requested by
letter dated July 14, 1986, and sent to all parties concerned and
required a response by July 28, 1986. The letter stated that changes
could be made to both technical and business proposals and required the
submission of cost and pricing data.
Oral discussions were held with each company on August 12, 1986,
concerning its cost and price data. On August 15, 1986, a request for
more detailed cost information was confirmed in writing with each
company. The letter also provided additional technical information that
could have had a bearing on the price offered.
On September 8, 1986, each remaining offeror was requested by
telephone to submit a third "best and final" offer which was due by
September 16, 1986.
Upon later oral request, each company provided an extension in
writing dated October 1, 1986, to the acceptance period of its proposal.
As to the evaluation of final offers, which was completed after the
on-site investigations of late January 1986, Hamilton still received a
higher score than the other two offerors who were quite closely ranked.
As to price, Giori received the maximum number (25) of points because of
its low offer. Miller's price was slightly higher than Hamilton's
price. The final summary of technical and price points was as follows:
Miller Giori Hamilton
Technical 56.64 54.3 61.70
Price 19.22 25. 19.75
Total 75.86 79.3 81.45
Based on this evaluation result, the Bureau awarded a contract to
Hamilton on October 21, 1986, for the press at a price of $10,196,504.
Miller has four basic grounds of protest. First, Miller alleges that
the Bureau failed to evaluate its proposal in accordance with the
evaluation criteria stated in the RFP; second, the Bureau allegedly
failed to conduct meaningful discussions with Miller when it requested
Miller to submit a third final offer emphasizing only cost and pricing
data; third, the procurement process was allegedly marked by "basic
irregularities which compromised the integrity of the process and
prejudiced Miller"; and fourth, that Hamilton was purchased by another
company after award and that most likely the management team, which was
evaluated by the Bureau as capable of doing the work, may change after
the sale.
The determination of the relative merits of technical proposals is
the responsibility of the contracting agency since it must hear the
burden of any difficulties incurred by reason of a defective evaluation.
Culp/Wesner/Culp, B-212318, Dec. 23, 1983, 84-1 C.P.D. P 17. Further,
contracting officials have broad discretion in performing that
evaluation function. Grey Advertising, Inc., 55 Comp. Gen. 1111
(1976), 76-1 C.P.D. P 325. Our Office will question an agency's
evaluation only upon a clear showing of unreasonableness. American
Coalition of Citizens with Disabilities, Inc., B-205191, Apr. 6, 1982,
82-1 C.P.D. P 318. Mere disagreement with an agency's evaluation does
not show that the evaluation is unreasonable. Intelcom Educational
Services, B-220192.2, Jan. 24, 1986, 86-1 C.P.D. P 83.
Miller argues that the Bureau refused to give its proposal
appropriate credit for the company's "oroven technology"; that the
Bureau's proposal evaluation was faulty in the areas of currency
"spoilage rates" and "ink drying process"; and that the evaluation of
Miller's management capability was erroneous.
A. Technology Credit
Miller argues that a proper application of the above RFP standard
requiring offerors to show "demonstrated... technology" would have
resulted in higher merit given to Miller's proposal as compared with
Hamilton's. In reply, the Bureau argues that its proposal evaluation
group was seeking an experienced manufacturer of web and intaglio
presses to use technology existing in the marketplace, but in a
different configuration, to manufacture a press to the Bureau's
specifications. However, the Bureau emphasizes that "nowhere in the
specifications" was there a requirement for an existing press and that
the "prototype press" the Bureau was seeking does not exist in
commercial operation any place in the world. Consistent with this
understanding, the Bureau awarded both Miller and Hamilton full
evaluation points for demonstrating this technology. Thus, Miller was
given full credit for its demonstrated technology. While Miller argues
in effect that Hamilton should have been downgraded in this area, we see
no basis in the record to agree with Miller.
For example, the Bureau found that Hamilton had demonstrated
experience building both intaglio and web printing presses and that the
proposal submitted by Hamilton was based on a design that demonstrated
an understanding of what had to be done.
B. Spoilage Rate
The RFP specified a spoilage rate of no more than 8 percent.
Miller's proposal was rated incomplete in this area because the Bureau
felt the company merely proposed compliance at rates of 3 percent and,
later, 6 percent without showing how Miller was going to achieve
compliance.
Miller states that its existing presses had a proven record of
spoilage rates of less than 6 percent, which rate should have been
accepted without question since there are only "insubstantial"
differences between its existing press and the RFP press. The Bureau,
on the other hand, argues that it is "specious" to suggest that spoilage
rates of an existing press built to different specifications indicates
the spoilage rate to be expected from a "yet-to-be-built" press.
We think the Bureau's position is reasonable. We note the Bureau
sought clarification from Miller as to how it intended to comply with
the spoilage rate requirement, but Miller merely responded with a
statement that it would comply. In the circumstances, we think the
Bureau properly rated the proposal incomplete.
C. Ink Drying Process
The Bureau also criticized Miller's proposal for a lack of clarity
and specificity as to how Miller would fulfill all RFP requirements
described for this process. Miller cites the performance of its ink
dryer on the company's existing press as proof that all requirements
would be met. The Bureau points out, however, that Miller initially
proposed a dryer which the Bureau considered to be too short. When this
matter was raised with Miller, it merely stated that it would expand the
dryer. No discussion was presented of how Miller would determine the
proper length of the dryer.
Miller essentially contends that the Bureau failed in its negotiation
sessions to lead the company into the specific area of perceived
deficiencies in the company's proposal. Specifically, Miller argues
that, during the "negotiations" leading to the Bureau's request for
third final offer, the Bureau did not advise or otherwise give notice to
Miller that Miller's technical proposal was deficient in the area of
project management. After Miller's submission of its first final offer,
in which Miller complied with a request to clarify certain aspects of
its project management plan, the Bureau allegedly took no further action
in its discussions with Miller which would have given Miller notice that
its project management plan was still deficient. Instead, negotiations
preceding the oral request for a third final offer allegedly focused
only upon the need for additional cost and pricing data from Miller. As
a result, Miller was allegedly not put on notice that its project
management plan required amplification beyond that provided in
compliance with the request for the first final offer.
In reply, the Bureau argues that it did conduct meaningful
discussions with Miller because the company was given three direct
opportunities to improve its project management proposal by Bureau
letters of November 21, 1985, January 16 and March 21, 1986, which
communicated first a deficiency and later a weakness in this area.
Specifically, after initial technical evaluations of proposals, by
letter of November 21, 1985, the Bureau pointed out technical and
informational deficiencies to offerors. Miller was specifically advised
that program management was considered an informational deficiency and
that:
"You need to think out the approach to managinq this program
and provide the Bureau with a plan that shows an understanding of
the management and technical problems involved. The philosophy of
the firm in solving these problems, how the resources available
will be employed to manage, coordinate, produce and start up the
press need to be discussed."
Miller was requested to address this matter and the response was
evaluated. In a January 16, 1986 letter, the Bureau advised Miller that
"Your response concerning Miller's project management plan
was acceptable, but weak. Please provide any additional
information you deem appropriate."
Finally, in the Bureau's letter of March 21, 1986, requesting a best
and final offer, the Bureau stated that:
"In regard to your Project Management Plan, clarify your
proposed project leader's, Mr. Barman, position within your
company, including to whom he is responsible for reporting."
The Bureau states that Miller's initial proposal was considered
deficient in the area of program management and the above-quoted
statement of the Bureau's November 21 letter to Miller clearly
identified this area as a deficiency. In contrast, the Bureau states
that its January 16 letter showed that, while Miller's proposal had
improved, the proposal was still considered weak. Although the Bureau's
second and third calls for best and final offers in March and September
of 1986, did not explicitly state whether Miller's proposal in the area
of project management was weak as opposed to deficient, the Bureau
states that Miller's proposal was still rated weak and it should have
been so understood.
We agree with the Bureau. This is not a case where the area of
weakness was never pointed out to the offeror during the course of
discussions. Clearly, Miller was advised during the course of the
initial discussions that its management plan was "acceptable, but weak.
Please provide any additional information you deem appropriate."
Subsequently, Miller was asked to clarify its proposed project leader's
position within the company.
While discussions must be meaningful, the content and extent of
competitive negotiations is a matter of judgment to be exercised by the
contracting officer based on the particular facts of the case at hand.
Federal Acquisition Regulation (FAR), 48 C.F.R. Sec. 15.610 (1986). Our
cases and the cited regulation provide that the contracting officer
should advise an offeror of deficiencies in its proposal so that they
may be corrected. The FAR provides, however, that the contracting
officer should not engage in technical leveling, that is, help an
offeror to bring its proposal up to the level of the other proposals
through successive rounds of discussions, such as by pointing out
weaknesses resulting from the offeror's lack of diligence, competence,
or inventiveness in preparing the proposal.
With these rules in mind, we find that the contracting officer
adequately advised Miller that its proposal was weak in the area of
management. While Miller faults the contracting officer for not
continuing to point out this weakness during the successive rounds of
discussions, we think Miller essentially expected the contracting
officer to engage in technical leveling. Once the Bureau pointed out to
Miller that its management proposal was weak, it was then Miller's
responsibility to improve that aspect of its proposal. See Technical
Serv. Corp., B-216408.2, June 5, 1985, 85-1 C.P.D. P 640, where we
stated:
"The protester seems to be objecting to the fact that after
receiving its response, the agency did not ask further questions
about its management information system. . . . However, an agency
is not required to help an offeror along through a series of
negotiations so as to improve its technical rating until it equals
that of other offerors. Decilog, Inc., B-206901, Apr. 5, 1983,
83-1 C.P.D. P 356."
Miller argues that the award to Hamilton resulted from "strong
political influence" to award to a 100 percent domestic manufacturer.
Miller also contends this pressure caused the removal of one Bureau
employee who was dedicated to a fair award. Moreover, Miller requests
that we investigate certain allegations involving two auditors who
allegedly work for either the Defense Contract Audit Agency or the
Inspector General's Office of the Department of the Treasury. These
individuals are stated to have information on the contracting process.
The record shows that while the Bureau received many congressional
inquiries concerning the status of the contracting process, it does not
show that the award resulted from political pressure. As to the Bureau
employee who was removed, according to Miller, because of political
pressure, the Bureau points out that the employee in question was not
removed, and that she was only acting as the contracting officer's
subordinate up to the time of the selection of the successful offeror by
the contracting officer. Our review of the record indicates that the
award was made to Hamilton based on the evaluation scheme in which
Hamilton scored higher technically than Miller and Hamilton's price was
lower. There is no showing that the award resulted from political
pressure.
Miller also suggests that the Bureau's employee who had "project
responsibility" for this contract award chose a "close personal friend,"
who was known to be prejudiced against Miller, to attempt to negatively
influence the Bureau's proposal evaluation panel against Miller during
the onsite evaluation of Miller. However, it is the position of the
Bureau that the proposal evaluation was made on the hasis of the
information submitted with the Miller proposal and the on-site visit and
not on the basis of extraneous materials. In any event, the record
shows that Miller's final technical score--including the specific score
for project management-- improved after the on-site visit. Therefore,
the record contradicts Miller's suggestion that the individual in
question detrimentally influenced the company's technical score.
Finally, with regard to Miller's request that we investigate the role of
the two auditors, the record simply does not indicate they had any role
in the selection process and we decline to consider the matter further.
With regard to the sale of Hamilton's business, the Bureau states
that although this sale was completed on December 31, 1986, Hamilton's
operating management, including its president and key technical
personnel, are the same so that the Bureau is of the opinion that the
"management and technical terms are still in place and are expected to
remain so." In any event, since the sale occurred after award, the issue
is one of contract administration which our Office does not review. See
Development Alternatives, Inc., B-217010, Feb. 12, 1985, 85-1 C.P.D. P
188.
We therefore deny the protest as to each of the four grounds raised
by Miller.
Harry R. Van Cleve
General Counsel
Matter of: De La Rue Giori, SA
File: B-225447
Date: March 19, 1987
1. Agency did not exceed the discretion committed to it in concluding
that protester's failure adequately to address in its written proposal
how it planned to manage the project, including start-up activities,
despite repeated requests that it do so could not be compensated for by
its preliminary work on a prototype machine of the same general design
as that being procured.
2. Record does not support protester's contention that it was not
given the same opportunity as other offerors in the competitive range to
submit a third best and final offer.
De La Rue Giori, SA, protests the award of a contract for an intaglio
printing press to Hamilton Tool Company under request for proposals
(RFP) No. BEP-85-73(N), issued by the Bureau of Engraving and Printing,
Department of the Treasury. The principal issue presented by Giori is
whether its proposal was properly evaluated with respect to one
technical criterion stated in the RFP. Giori maintains that its
proposal was not properly evaluated and that if the points improperly
deducted from its score were restored, it would be entitled to award as
the highest-ranking offeror when both technical factors and price are
considered.
The protest is denied.
According to Bureau documents, it must find a way to print
increasingly larger volumes of banknotes within the physical confines of
its present facility. The Bureau's solution to this problem is to
procure a web press (i.e., one fed by a continuous roll of paper rather
than with sheets of paper) which would be capable of printing both the
front and back of a banknote, in one pass through the press, by the
intaglio method (engraving in which the design is hollowed out from the
surface of the background). Such a press would have a production output
capacity equal to three or four of the Bureau's current sheet fed
currency presses yet occupy less floor space than two of the sheet fed
presses.
This press will be the first of its kind to be put into production.
Its unique aspect is that it will print both the front and back of the
banknote in a single pass through the press. The record indicates that
other countries which currently print banknotes on web presses print one
side of the note, rewind the web, reverse it, and then print the other
side of the note in a second pass through the press.
The design which the Bureau seeks would eliminate the need for
rewinding the web and passing it through the press a second time. This
design, according to the Bureau, although never before put into
production, is unique only in that it requires new application of
existing technology using components the majority of which should have a
manufacturing history.
Consistent with these requirements, the RFP sought firm fixed-price
proposals for the design, fabrication, test and evaluation of a web
currency press "designed to print the Intaglio Face and Back image of
U.S. currency using electroformed (or equal reproductions of steel
engravings) plate cylinders in one pass through the press producing
print quality which equals or exceeds current production methods."
Training of Bureau personnel, spare parts, documentation, ancillary
support equipment (if needed) and delivery were to be included in each
offeror's price. The period of performance was stated as 40 months,
during which would occur preliminary and final design reviews, factory
inspection tests, site preparation, delivery and installation of the
press, delivery of spare parts, extended test and evaluation at the
Bureau, the final acceptance test, training of Bureau personnel and the
furnishing of the contractor's final report.
After an extensive procurement process, which included negotiations,
the Bureau awarded a contract to Hamilton Tool, whose top technical
ranking and 2nd-ranked price of approximately $10.2 million resulted in
its receipt of the highest number of total award points. Giori's
third-place technical ranking and low price of approximately $8 million
resulted in a second-place ranking overall.
In its protest of the award to Hamilton, Giori has raised a number of
issues characteristic of those encountered in a negotiated procurement.
These issues center on whether proposals were evaluated fairly and in
accordance with the criteria set forth in the solicitation and on
whether all offerors were given an equal opportunity to submit best and
final offers (BAFO's). In the course of Giori's protest, however, one
issue predominates over all the others: whether Giori's proposal
properly was evaluated under the project management evaluation
criterion. Giori's comments on the agency report, although lengthy,
clearly state that " the Bureau's failure to apply the evaluation
criteria to that area in accordance with the . . . criteria listed in
the RFP is Giori's complaint in its protest" and that " t his protest
concerns the Bureau's application of the evaluation criteria
identified in the RFP for the Project Management Plan." In broad
outline, Giori's argument--which we discuss in detail below--in that the
Bureau arrived at an "absurd result" under this criterion because it
penalized Giori for not having explained, in its proposal, how it
planned to manage certain activities which Giori, to the Bureau's
knowledge, had already accomplished in actual practice. Giori argues
that were the points improperly deducted under this criterion restored
to its proposal, it would become the highest-ranked offeror and thus,
entitled to the award.
The pertinent RFP provisions concerning the manner in which proposals
were to be evaluated and an offeror selected for award stated:
M-2 PROPOSAL EVALUATION
a. The prime objective of proposal evaluation is to insure
impartial, equitable, and comprehensive evaluation of competitive
proposals and to insure selection of that source which
affirmatively demonstrates in its written proposal that it offers
optimum satisfaction with regard to performance, schedule, and
cost. Emphasis in original.
b. In addition to proposal evaluation as stated herein, the
government reserves the right to visit offeror locations for the
purpose of more comprehensive evaluation of vendor capability with
respect to the requirements of this solicitation.
M-3 TECHNICAL PROPOSAL EVALUATION CRITERIA
Factors Weights
a. Technological Approach. The specific 30 present day
technology employed in response to BEP requirements;
comprehensiveness of the technical proposal; ability of basic
design to facilitate later addition of secondary examining and
finishing equipment with a minimum of space and cost; soundness
of the design concepts to be employed; and the degree that the
design approach maximizes productivity, maintainability, and
reliability objectives of the press.
b. Project Management Plan. (Organization 15 and Structure).
The specific management philosophy, methods, techniques, and human
resource utilization of the Offeror's plan shall be sufficiently
logical and thorough to ensure that the contractor will obtain all
the detailed facts required to develop fully supportable
conclusions and recommendations and will at least meet the
objectives and cover the requirements of this project. The plan
shall include start up activities and liaison with BEP and
subcontractors as appropriate.
c. Offeror's Experience and Capacit. 10
d. Qualifications of Professional Staff. 10
e. Implementation Cost. 5
Total 75
M-4 SELECTION FOR AWARD
a. In evaluating proposals the Government will assign AWARD
POINTS (TECHNICAL PROPOSALS & PRICE OFFER POINTS) where 100 is the
maximum number of possible award points.
In computing PRICE OFFER POINTS, the lowest priced technically
acceptable proposal automatically receives the maximum number of
possible PRICE OFFER POINTS. (Note: Since technical
considerations are considered to be approximately three (3) times
as important as price, it would be 75 and 25 points respectively).
Other than the lowest offeror would receive proportionately
fewer points.
c. Notwithstanding the computation of Award Points as described
in paragraph (a) above, award will be made to the offeror (1) who
submits a technically acceptable proposal, and (2) whose proposal
provides the quality/cost relationship along with other relevant
factors that is most advantageous to the Government from among the
proposals received from responsible offerors in the competitive
range. Although numerical ratings shall be used as guide in
contractor selection, the right is reserved to select a contractor
who may not have the highest numerical rating (technical and price
combined)." Emphasis in original.
With respect to the preparation of technical proposals, the RFP
instructed offerors:
A. General
The technical proposal will he an important consideration in
the award of a contract..., therefore it should be sufficiently
comprehensive and detailed, in a format readily interpretable by
the government, to enable complete evaluation of the offeror's
capability to satisfactorily fulfill the government's
requirements. The offeror will respond to each requirement within
this RFP, element by element. The technical proposal shall
consist of a technical approach, a project management plan, record
of the quality and nature of your firm's experience....
B. Technical Approach
Each offeror must provide a detailed technical approach....
C. Project Management Plan Each offeror must provide a detailed
project management plan that identifies and discusses the
following:
1. The specified management philosophy methods, techniques, and
human resource utilization that the offeror will employ to
accomplish this project.
2. The extent of required contractor and BEP Liaison.
3. Start-up activities.
D. Offeror's Experience and Capacity
Offeror's record of experience should set forth in detail
verifiable objective evidence of successful development and
preparation of similar equipment for other organizations.
Giori's protest focuses on the evaluation of its proposal under the
"Project Management Plan" criterion, especially with regard to "start-up
activities," as described in section M-3 b. of the RFP and paragraph II.
C. of the technical proposal preparation instructions.
Four proposals were received by the October 10, 1985, due date and
were referred to a technical evaluation panel. In early November 1985,
the panel recommended that one proposal be dropped from further
consideration, which subsequently did occur. With regard to the three
remaining proposals submitted by Giori, Hamilton and Miller Printing
Equipment Company, as to each of which the panel felt there was a high
probability of improvement to a fully satisfactory level, the panel
submitted detailed comments and requests for clarifications. With
regard to the adequacy of Giori's proposal concerning "project
management," the panel stated:
"The proposal does not address sufficiently the management
philosophy proposed including liaison and interface methods and
procedures with subcontractors and the Bureau, nor does it provide
sufficient details as to the start-up plans proposed. Fully 20%
of the proposal evaluation score is contained in the above
responses."
The panel also suggested with regard to Giori, as well as for
Hamilton and Miller, that the firm be requested to provide a date when
the panel could review and discuss the firms' accomplishments in web
intaglio printing through a site visit.
As its "Project Management Plan," Giori presented three block
diagrams in which it identified: (1) its principal subcontractors; (2)
those individuals at Giori's Lausanne, Switzerland, headquarters
responsible for various aspects of the program; and (3) responsible
individuals at its subcontractor in Wuerzberg, West Germany, which was
to build the press. It also outlined a schedule of how frequently the
managers at various levels were to report to their superiors and Giori
would consult with its subcontractors and the Bureau. The proposal
clearly left to some time after contract award, however, the
establishment of any specific task schedules necessary for completion of
the project; no detailed plans in this respect were presented.
Essential to an understanding of Giori's protest, however, and as
explained in its proposal, was the fact that between the issuance of a
prior Bureau solicitation for such a system and the issuance of this
solicitation, Giori had built at its subcontractor's plant an
experimental or prototype web intaglio press for the printing of
banknotes, front and back, in one pass through the press. 1/ Giori's
approach to designing and building a press for the Bureau was based on
certain tests it had performed on its prototype.
The "Project Management" section of Hamilton's initial proposal, by
contrast, was much more expansive and detailed than Giori's. It
described how the company was to organize itself for the completion of
the project, how during contract performance the company would control
and implement changes affecting the physical characteristics of the
press, in what areas and how it would effect liaison with the Bureau.
The last included including the facilitation of the Bureau's monitoring
of Hamilton's progress on a day-to-day basis through a Hamilton-supplied
computer modem link placing the Bureau online with the data collection
network in Hamilton's plants. Hamilton also addressed the
implementation of start up activities as illustrated by a detailed
Milestone Pert chart showing the scheduling and integration of contract
tasks from the date of award through delivery of the final report, and
covered the management arrangements for the factory inspection test,
equipment installation, equipment start up and training. The technical
evaluation panel had no comment on this aspect of Hamilton's proposal.
On November 21, 1985, the Bureau sent letters to the three offerors
asking each to provide additional information in the areas of concern to
the technical evaluation panel. With respect to Giori, the panel's
comment about the inadequacy of the firm's discussion of "Project
Management" was transmitted verbatim, except for the observation that it
represented 20 percent of the technical score.
In its response of December 20, 1985, Giori devoted about one
typewritten page to project management, in which it stated that in view
of the continuous contact which exists between it and its manufacturers
and suppliers, it proposed a program whereby within 15 days of contract
award it would meet with those firms "in order to define the details of
designing, manufacturing, delivery and testing of all the equipment to
be supplied" to the Bureau, and within 30 days of contract award would
present this program to the Bureau. It also proposed the periodic
submission of reports to and the holding of meetings with the Bureau and
the attendance of the firm's representatives during erection of the
press and the evaluation, acceptance and training phases of the
contract.
On January 16, 1986, the Bureau again wrote Giori about "various
weaknesses" the technical evaluation panel had noted in the firm's
November 21, 1985, submission. In this letter, the reference to the
project management plan was more pointed:
a. items 1 and 2
The information provided was weak. Please provide any
additional information you deem appropriate.
b. item 3
Provide additional information on how you intend to manage
"start up activities," and ink testing and related concerns."
Emphasis in original.
Giori was requested to submit any revision to its proposal as a
result of these and other comments by January 27, 1986.
In its reply of that date, Giori simply referred the Bureau to its
prior submissions with regard to items 1 and 2. As for item 3, Giori
replied:
"We consider that also for this part the basic concept is
explained in our original proposal. We do not clearly understand
what you mean by ink testing and start-up activities. Our
proposal was based on the fact that, as we were working on the
project of a web press printing front and back in one pass dollar
like currency, we are at the very advanced stage of a practical
testing activity for paper, inks, engravings, etc. We are ready
to communicate to the Bureau at the very beginning of the
project the results of those tests if necessary. The visit of
your delegation in Wuerzburg will be helpful to ascertain the
degree of development in this field. If you consider that the
above is a misinterpretation of your request please specify in
detail your wishes."
Also during the week of January 26, 1986, a visiting committee from
the Bureau toured the offerors' designated sites to confirm the level of
intaglio web capability of each firm. The visiting committee attempted
to assess the level of user training required to learn to operate the
existing press; maintenance complexity of the equipment; user
satisfaction with equipment and vendor; the level of availability of
the equipment--its mean time between failure (MTBF) and mean time to
repair (MTTR); the stability of the equipment; and ergonomics.
The Miller and Hamilton intaglio web presses which the committee
examined did not print front-and-back in one pass through the press but
were being operated in production environments. The Giori press was its
prototype demonstrated at Wuerzburg. Since the Giori press had not been
delivered to a customer, user satisfaction could not be measured and
MTBF and MTTR data did not exist because the press had not been run in a
production environment. Because of incidents which occurred during
operation the committee concluded that press stability had not been well
demonstrated and there was a problem in maintaining print quality with
increasing operating speed.
On the whole, the committee concluded that there was no basis for
disqualifying any of the offerors as each possessed demonstrated
experience in designing and building functional intaglio web printing
machines. The committee also offered the following assessments: (1) in
terms of the amount of work to be done to produce a press for the Bureau
Giori was "ready to start final design," Miller was "almost at the same
point" and Hamilton appeared to be "slightly further back," (2) about
the same ranking would apply as to the offerors' ability to deliver a
satisfactory press in 42 months; and (3) in terms of the perceived
benefits which each could potentially deliver, Hamilton appeared able to
produce the best overall design and the other two firms ranked somewhat
lower based on their more restricted view of creative systems
engineering and program management.
In mid-February, 1986, the technical evaluation panel completed its
evaluation of the revisions to proposals received on January 27.
Hamilton scored higher than Giori as to "Technical Approach," "Project
Management," and "Staff Qualifications," equaled Giori in
"Implementation," and was lower than Giori as to "Experience and
Capacity." The most marked difference was in ratings for "Project
Management." On the whole, Hamilton's score was higher.
The panel acknowledged that the scores under "Project Management" and
"Staff Qualifications" may have been more related to writing style than
capability since all three offerors were capable firms. Nevertheless,
the panel stated, it elected to score proposals by applying the RFP
criteria to what was presented in the written proposals. With regard to
Giori's low score in "Project Management," the panel was of the opinion
that the written information provided would not warrant an increase in
score. The panel recognized that Giori's approach of designing products
at its own expense in-house for sale as off-the-shelf designs, which
required little external project management effort, did not lend itself
well to evaluation under this criterion. The panel mentioned but did
not adopt a less rigorous standard for Giori under "project management"
in view of the "relatively advanced state of development" of its
prototype.
Face-to-face negotiations were conducted in late February and early
March, 1986. On March 21, the Bureau issued amendment No. 5 to the RFP,
which added an "unpriced option" for the purchase of an additional
press, provided that the contractor was to furnish a "turnkey"
installation, and made other changes. Concurrently with this amendment,
the Bureau sent letters to the offerors asking each to address a number
of general and specific points. Best and final offers in response
thereto were due by April 14. Among the specific points of which Giori
was asked to take note was the following:
"After review of your response to our January 16, 1986 letter
concerning the weakness of the information provided in regards to
your Project Management Plan you responded by directing us to
existing information in your offer as if we omitted reading that
portion of the proposal. Apparently, you did not understand that
we had read it, but found it to be weak."
In responding to this point in its BAFO, Giori outlined its history
and its general approach to product development, which it stated was to
investigate new technologies in conjunction with its specialized
subcontractors, seek engineering solutions, conduct a testing program
and, if the results warrant, construct a prototype. These principles
had been applied in the construction of the press at Wuerzburg, Giori
stated, and similarly would be applied in the performance of the
Bureau's contract. Giori also outlined the principles by which it would
coordinate with its subcontractors and the Bureau and respond to changes
or modifications.
In mid-April, the technical evaluation panel scored the revised
proposals. Although in comparison with the Febsruary scoring, Giori
gained a fraction of a point under "Technical Approach" and slightly
improved as to "Project Management," the scores otherwise remained
unchanged and the relative standing of the offerors remained the same
(Hamilton first, Giori last) with "Project Management" the most
significant disparity. When price was taken into account, however,
Giori's total score was slightly higher than Hamilton's. The Department
of the Treasury did not accept the Bureau's recommendation to make award
to Giori at that point, however, apparently because of deficiencies it
perceived in the procurement, which were corrected in amendment No. 6 to
the RFP, issued on July 14.
Amendment No. 6 deleted the unpriced option for an additional press
and the requirement for a "turnkey" installation. Instead, Bureau
personnel were to install the press with technical assistance from the
contractor. In a letter which accompanied amendment No. 6, the Bureau
asked for the submission of a second BAFO by July 28 in which offerors
could take these changes into account and with which cost and pricing
data was requested.
In early August, further negotiations were conducted at the Bureau
which concentrated on pricing matters. By letter of August 15 to each
offeror, the Bureau confirmed those discussions, asked for additional
cost information and provided additional information about the Bureau's
requirements concerning section 8.0 of the RFP's specifications for
plate cylinder manufacturing equipment. Responses were received by
August 22.
On September 8, according to the Bureau, it orally requested the
submission of a third BAFO by September 16. On that date Giori sent a
message confirming that its "second best and final offer dated July 22,
1986, is fully valid until September 30, 1986, and that the technical
specifications for this machine remains unchanged."
At the conclusion of this process, Giori's and Miller's technical
scores remained unchanged while Hamilton's was reduced by 1 point
because of a change made to its proposal. When prices were taken into
account, the final standing of the offerors was as follows:
Hamilton Giori Miller
Price 19.75 25.00 19.22
81.45 79.30 75.86
The technical score difference of 7.4 points between Hamilton and
Giori reflects the award to Giori of zero points out of a maximum of
five under the "start-up activities" subcriterion of the "Project
Management" criterion. The total evaluation score difference is 2.15
points.
There then occurred an exchange of memoranda between the Bureau and
the Department of the Treasury as to the appropriate award to be made
under these circumstances, which culminated with the Bureau's
recommendation to award to Hamilton as the firm which had earned the
greatest number of award points. Such an award, the contracting officer
stated, would be consistent with the evaluation criteria stated in the
RFP and was warranted because the technical advantages of the Hamilton
proposal outweighed the cost savings proposed by Giori. The contracting
officer further noted that Hamilton had addressed the requirements of
the "Project Management Plan," specifically liaison with the Bureau and
start up. Acknowledging the view expressed in an earlier memorandum
that Giori's score in "Project Management" should be "reinterpreted,"
the contracting officer observed that Hamilton did comply with the
solicitation requirements and earned the scores that it was assigned.
In its protest, Giori points out that if it had received the five
points assigned to start-up activities for evaluation purposes, its
combined technical and cost score would have been higher than
Hamilton's. The Bureau's award to it of zero points under that
subcriterion, Giori argues, was "without a rational basis" as
illustrated by the following example:
"What if the Bureau issued an RFP for a car with eight wheels
instead of four. And, as part of the evaluation, the agency
stated it would evaluate and assign points for each offeror's
plans to start up its design and building of the eightwheeled car.
Joe's Bicycle Shop and Ford submit bids. Joe's Bicycle Shop,
which has built cars, but has never built a car with eight wheels,
submits a very complete and elaborate plan for its start-up to
design, develop and produce a car with eight wheels. Ford submits
a Proposal that indicates that Ford has designed, developed, and
fabricated a car with eight wheels that can meet the
specifications. Clearly, it would be unreasonable to penalize
Ford, the more advanced offeror, because it did not need to
start-up. Yet, that is exactly what the Bureau did in its
evaluation of Giori ."
We do not believe Giori's analogy holds true for the following
reasons. Here, the Bureau obtained competition from three
well-qualified firms pursuant to an RFP which emphasized that the
evaluation process was to "insure selection of that source which
affirmatively demonstrates in its written proposal that it offers
optimum satisfaction with regard to performance, schedule and cost."
(Emphasis in original.) Giori's initial proposal was weak as to its
"Project Management Plan," a matter which was brought to its attention
three times during discussions. On the second of those occasions, the
Bureau specifically asked Giori to "provide additional information on
how you intend to manage "start up activities," and ink testing and
related concerns." (Emphasis in original.) Giori did not offer a
detailed explanation of how it intended to manage such aspects of
contract performance. The essence of its position was that it was
working on the problems posed by the Bureau's design concept by
conducting tests on the prototype press in Wuerzburg.
The visiting committee which witnessed a demonstration of the
prototype acknowledged that its possession put Giori slightly ahead of
its competitors in terms of the amount of work to be done to produce a
satisfactory press within the anticipated contract period (although the
committee also judged Hamilton able to produce the best overall design).
The prototype press, however, was not being operated in a production
environment, its reliability was difficult to assess and some problems
were encountered during its demonstration. It does not appear to have
been a perfected product which could "meet the specifications" as did
the Ford car in the protester's example.
Giori could not be given full credit for a project management plan on
the basis of its written proposal because it never presented a complete
plan in writing. It could only receive credit under the subcriterion,
in the words of Bureau memoranda, through the application of a "less
rigorous standard" than that applied to the other offerors' proposals or
through a "reinterpretation" of its score by which an imputed plan would
be substituted for lack of written proposal content.
The Bureau did consider taking a less rigorous approach to scoring
Giori's proposal under the "Project Management Plan" criterion, an
approach which would have required some speculation since Giori's
management plan was not laid out in the firm's written proposal. The
Bureau appeared to envision a relationship, however, reflected in the
RFP, in which the contractor would work closely with the agency, as a
part of which it would reveal its management plans. Hamilton fulfilled
that requirement, Giori did not, and in the final analysis the Bureau
declined to speculate and instead evaluated the written proposals as
initially contemplated.
Although the protester characterizes the Bureau's action as a triumph
of form over substance, we do not find that the Bureau exceeded the
bounds of the discretion committed to it in concluding that award should
be made to Hamilton on the basis of its technically superior proposal.
The protester also alleges that the Bureau requested a third BAFO
from Hamilton and Miller but denied the same opportunity to Giori. The
agency states that it requested the third BAFO by telephone "due to a
shortage of time" and did not confirm the oral request in writing.
Giori argues that this action on the part of the Bureau was unfair and
in violation of the Federal Acquisition Regulation. The record does not
support this allegation.
On September 16, which the agency states was the due date for the
third round of BAFO's, Giori sent a telex to the Bureau stating that it
confirmed its "second" BAFO and that "the technical specifications for
this machine remains unchanged." Although the protester's telex on one
hand might appear to be only a confirmation of a previous BAFO, that the
protester was given an opportunity to revise its offer is indicated by
its statement that there were no changes to its technical
specifications. Had this simply been a response to a request for
confirmation of the second BAFO there would have been no occasion for
the protester to expressly decline to change any technical
specifications. Thus we conclude that this allegation is without merit
since it is not supported by the record. While the agency's failure to
follow the oral request with a written confirmation was a procedural
deficiency, it was not prejudicial to any offeror since all had notice
of the request and responded to it.
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ This is the Bureau's second attempt to procure this equipment. We
previously sustained a protest by Hamilton against an award to Giori on
the basis that the Bureau significantly relaxed its requirements in
discussions with Giori and did not permit other offerors to compete on
the altered requirement. The Hamilton Tool Co., B-218216, May 17, 1985,
85-1 C.P.D. P 566.
Matter of: CC Distributors, Inc.
File: B-225446
Date: February 18, 1987
1. Contracting officer properly may reopen discussions and request
second round of best and final offers under request for proposals for
operation of a supply store where, based on comparison with existing
contract prices and general knowledge of the market, contracting officer
determines that all offerors' unit prices for hundreds of supply items
are too high.
2. Contracting agency does not create improper auction by reopening
discussions and requesting second round of best and final offers where
there is no indication that agency's purpose was to give one offeror a
competitive advantage or that agency established a price goal for
offerors or disclosed their relative price standing.
3. Contracting agency letter to offerors satisfies basic requirements
in Federal Acquisition Regulation for written request for best and final
offers where it states that discussions have been reopened, indicates
the areas of concern with each offeror's proposal, and calls for
submission of revised proposals as best and final offers.
CC Distributors, Inc. challenges the Air Force's decision to request
a second round of best and final offers under request for proposals
(RFP) No. F16602-86-R-0011 for a Contractor Operated Civil Engineering
Supply Store (COCESS) at Barksdale Air Force Base, Louisiana. The
protester argues that the Air Force had adequate information to make
award based on the first round of best and final offers and that its
request for a second round created an improper auction among the
offerors. We deny the protest.
The RFP, issued on May 9, 1986, called for operation of a COCESS at
Barksdale AFB as the source of supply for over 300 items of hardware and
equipment listed in exhibit A to the RFP. Several offerors, including
the protester submitted proposals by the initial closing date, July 31.
1/ Discussions then were held with all the offerors, with best and final
offers due by October 6.
According to the Air Force, after reviewing the best and final
offers, the contracting officer concluded that all the offerors had
either overpriced or underpriced by a significant margin a large number
of the supply items listed in exhibit A of the RFP. As a result, on
October 24, the contracting officer sent each offeror a letter advising
that discussions were reopened because "information available including
pricing at this time is inadequate to reasonably justify contractor
selection and award based on the best and final offers received." The
letter enclosed the exhibit A submitted by each offeror with its first
best and final offer, indicating the items which the contracting officer
found either excessively or nominally priced. The letter concluded by
advising each offeror to resubmit an exhibit A, with any revisions, as
its "best and final proposal" by November 7.
On October 31, CC Distributors filed its protest with our Office
challenging the decision to request a second round of best and final
offers. By letter dated November 4, the Air Force notified all the
offerors under the RFP that the due date for a second round of best and
final offers was postponed indefinitely pending resolution of the
protest.
With regard to reopening discussions after submission of best and
final offers, Federal Acquisition Regulation (FAR), 48 C.F.R. Sec.
15.611 (c) (1986), provides:
"After receipt of best and final offers, the contracting
officer should not reopen discussions unless it is clearly in the
Government's interest to do so (e.g., it is clear that information
available at that time is inadequate to reasonably justify
contractor selection and award based on the best and final offers
received). If discussions are reopened, the contracting officer
shall issue an additional request for best and final offers to all
offerors still within the competitive range."
In this case, the contracting officer based the decision to reopen
discussions on her finding that all the offerors had either overpriced
or underpriced many of the more than 3000 supply items in exhibit A when
compared with the prices available under the current contract and the
contracting officer's general knowledge of the market. In the
contracting officer's view, making award to any of the offerors on the
basis of their first best and final offer could result in the Air Force
paying over 1000 percent more than a fair and reasonable price for many
items. Thus, the contracting officer concluded that no award reasonably
could be made under the RFP without reopening discussions and giving the
offerors an opportunity to revise their prices.
The protester maintains that it was unreasonable for the Air Force to
reopen discussions simply for price revisions. We disagree. In our
view, reopening discussions clearly was in the government's interest as
provided in FAR, 48 C.F.R. Sec. 15.611 (c), since any award made on the
basis of the first best and final offers would result in prices the
agency considered too high for a significant part of its needs under the
RFP. Further, the decision to reopen discussions without requesting
anything more than best and final offers does not create an improper
auction, where, as here, there is no indication that the contracting
agency's purpose was to give one offeror a competitive advantage or that
the agency established a price goal for the offerors or disclosed their
relative price standing. Action Mfg. Co., B-222151, June 12, 1986, 86-1
CPD P 546.
The protester disputes the contracting officer's determination that
its proposed pricing is unbalanced, arguing that its proposal does not
rely on enhanced prices for some items to compensate for losses on other
nominally priced items. 2/ Even if, as the protester argues, an
offeror's pricing approach is reasonable based on its competitive
position and its assessment of the risk involved in an indefinite
quantity contract such as this one, its prices still may be unreasonably
high if the contracting officer finds that the supplies can be obtained
for substantially less, as in this case, by comparison with the prices
under the current contract. See International Alliance of Sports
Officials, B-211549, Jan. 24, 1984, 84-1 CPD P 110. Further, even
assuming the contracting officer's concern about prices did not apply to
the protester's proposal, once the decision was made to reopen
discussions with some of the offerors, all the offerors in the
competitive range, inluding those whose proposals were not considered
deficient, also would have had to have been given an opportunity to
submit new best and final offers. 3/ See Weinschel Engineering Co.,
Inc., 64 Comp. Gen. 524 (1985), 85-1 CPD P 574.
The protester also contends that the Air Force's October 24 letter
did not comply with FAR, 48 C.F.R. Sec. 15.611 (b), regarding the
contents of a written request for best and final offers, because the
letter did not state specifically that discussions were concluded or
that it was an opportunit to submit a best and final offer, and did not
refer to the standard FAR provision governing late submissions,
modifications and withdrawals. We disagree. The October 24 letter
stated that discussions were reopened; identified the areas in each
offeror's proposal which should be reexamined; and concluded that the
revised exhibit A to be submitted by the November 7 due date would
constitute each offeror's "best and final proposal." As a result, the
letter clearly put the offerors on notices that a second round of best
and final offers was to be submitted; the protester itself interpreted
the letter this way. In addition, under these circumstances the
letter's failure to refer to the standard late submissions clause is a
minor deficiency since there is no indication that the omission
prejudiced any of the offerors.
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ Because award has not yet been made, much of the information
provided by the Air Force, including the number and identity of the
offerors and their proposals, was submitted to our Office in camera.
2/ While the Air Force report on the protest refers to the offerors'
pricing as "unbalanced," it is clear from the record that the
contracting officer's principal concern was that in her view the prices
offered were in many instances too high.
3/ Contrary to the protester's argument, we see no reason why under
these circumstances the contracting officer would have been required to
reject the offers found to have proposed prices which the agency
considered too high, instead of reopening discussions.
Matter of: Age King Industries, Inc.--Reconsideration
File: B-225445.4
Date: September 21, 1987
Prior decision withdrawing recommendation for corrective action
(termination of awarded contract) is affirmed on reconsideration where
the protester has not shown any error of fact or law and has provided no
new information which would warrant reversal of that decision.
Age King Industries, Inc. requests reconsideration of our decision in
Age King Industries, Inc.--Reconsideration, B-225445.3, July 29, 1987,
87-2 CPD P 107, modifying, B-225445.2, June 17, 1987, 87-1 CPD P 602,
withdrawing our recommendation that contract No. DLA500-87-C-0203 be
terminated.
We affirm our prior decision.
Briefly, where the contracting officer refers a nonresponsibility
determination of a small business bidder to the Small Business
Administration (SBA), the SBA has 15 business days or such longer time
as may have been agreed upon to issue or not issue a certificate of
competency (COC). Federal Acquisition Regulation (FAR), 48 C.F.R. Sec.
19.602-2(a) (1986). Here, the SBA missed its deadline for responding
and, thereupon, the Defense Logistics Agency (DLA) awarded the contract
to another firm, F&H Manufacturing Corporation. In our initial
decision, Age King Industries, B-225445.2, supra, we sustained the
protest by Age King because SBA, albeit after the deadline, informed DLA
of the issuance of a COC prior to DLA taking any action in reliance on
the missed deadline. We stated that where, prior to making an award,
the agency is informed of the issuance of a COC, the agency cannot
thereafter knowingly award a contract to other than what it knows to be
the low, responsive, responsible bidder as certified by the SBA.
Accordingly, we recommended termination of the F&H contract.
Subsequently, on reconsideration requested by DLA, Age King
Industries, B-225445.3, supra, we withdrew our recommendation that the
contract awarded to F&H be terminated for convenience because DLA had
continued performance on the contract (Age King filed its protest more
than 10 calendar days after award; see 31 U.S.C. Sec. 3553(d) (1) (Supp
III 1985)), and established that termination was not in the government's
interest because of the advanced stage of the procurement and high
termination costs. Instead, we awarded bid preparation and protest
costs to Age King.
In its request for reconsideration, Age King alleges that the F&H
contract that DLA reported to our Office as being almost complete was
not the same contract that Age King had protested. In this regard, DLA
indicated in its request for reconsideration that an Industrial
Specialist visited F&H's manufacturing facility and found that work
under contract No. DLA500-87-C-0203 (the contract at issue) was 93
percent complete and delivery of the solicited items anticipated by
August 1, 1987. A copy of the "Plant Visit Request/Report" was included
with DLA's reconsideration request to our Office. Age King did not
receive a copy of this document and insists that DLA has confused the
contract under dispute with a similar contract, No. DLA500-87-M-4687,
awarded to F&H more recently.
We have confirmed that the "Plant Visit Request/Report" refers to the
same contract as the one that Age King had protested. Further, we also
confirmed with DLA that there was no mistake regarding this matter. By
letter dated September 8, 1987, DLA assures us that the contract awarded
to F&H originally for 6,000 crank handles, No. DLA500-87-C0203, is the
one originally protested by Age King and the one discussed by DLA in its
request for reconsideration.
Since Age King has not shown any error of fact or law in our previous
decision, and has provided no new information, we affirm our prior
decision.
Comptroller General
of the United States
Matter of: Age King Industries, Inc.--Reconsideration
File: B-225445.3
Date: July 29, 1987
Recommendation that contract be terminated is withdrawn on
reconsideration where agency continued performance because it was
notified of the protest more than 10 calendar days after award, and
agency now establishes that termination is not in the government's
interest. Protester, however, is entitled to bid preparation and
protest costs.
The Defense Logistics Agency (DLA) requests reconsideration of the
recommendation for corrective action made in our decision in Age King
Industries, Inc., B-225445.2, June 17, 1987, 87-1 CPD P . We withdraw
the recommendation contained in that decision. However, we find the
protester is entitled to costs.
Briefly, the protester, Age King Industries, Inc., was the low bidder
under invitation for bids (IFB) No. DLA500-86-B2090, issued by DLA as a
small business set-aside for 6,000 crank handles. The contracting
officer determined that Age King was not a responsible, prospective
contractor and referred the matter to the Small Business Administration
(SBA), the agency authorized by statute (15 U.S.C. Sec. 637(b) (7)
(1982)) to certify conclusively as to all elements of a small business
concern's responsibility by issuing a certificate of competency (COC).
Federal Acquisition Regulation (FAR), 48 C.F.R. Sec. 19.601 (1986).
Unless the SBA and the contracting agency agree to a longer period,
the SBA must take specific action in response to a COC referral within
15 business days. FAR, 48 C.F.R. Sec. 19.602-2(a). The contracting
officer is authorized to proceed with the acquisition and award a
contract to another offeror, if the SBA fails to issue a COC within 15
business days or within such longer time as may have been agreed upon by
the agency and the SBA. FAR, 48 C.F.R. Sec. 19.602-4(c).
Here, DLA and SBA agreed to a deadline of January 23, 1987 for SBA to
give notice to DLA of its intent to issue a COC to Age King. The SBA
missed this deadline but informed DLA of the issuance of the COC on
February 2, 1987 before DLA took any contract action in reliance on the
missed deadline (F&H Manufacturing Corporation, the awardee, was told to
resume performance of its contract on February 3, 1987, after DLA knew
that a COC would be issued to Age King). 1/
We held that if an agency, after the SBA misses its deadline, has no
notice of the issuance of a COC, it can proceed with award action to the
responsible bidder that is eligible for award. However, where, prior to
making an award, the agency is informed of the issuance of a COC albeit
after the deadline is missed, the agency cannot thereafter knowingly
award a contract to other than what it knows to be the low, responsive,
responsible bidder as certified by the SBA. We therefore sustained the
protest and recommended that the contract with F&H be terminated for the
convenience of the government, and that a contract be awarded to Age
King.
DLA does not challenge our conclusion that F& H was improperly
directed to resume work after DLA was notified of SBA's issuance of the
COC to Age King or that Age King was improperly denied the contract
award. Rather, DLA requests that our recommendation for corrective
action be withdrawn because work under the F&H contract is 93 percent
complete. Further, F&H expects to complete delivery of all items by
August 1, 1987. DLA did not suspend performance pending our decision
because Age King filed its protest more than 10 calendar days after the
award. See 31 U.S.C. Sec. 3553(d) (1) (Supp. III 1985).
In determining the appropriate corrective action on an improperly
awarded contract when the agency is not required to suspend performance,
we consider all the circumstances surrounding the procurement, such as
the seriousness of the procurement deficiency, the degree of prejudice
to other interested parties or to the integrity of the competitive
procurement system, the good faith of the parties, the extent of
performance, the cost to the government, the urgency of the procurement,
and the impact of the recommendation on the contracting agency's
mission. 4 C.F.R. Sec. 21.6(b) (1986).
Based on the information submitted by DLA on reconsideration, we do
not believe that termination of F&H's contract is in the best interest
of the government. In similar situations, we have found that the
advanced stage of the procurement and high termination costs support a
finding that termination is not feasible. See NI Industries, Inc.--
Reconsideration, B-218019.2, Aug. 8, 1985, 85-2 CPD P 145. Therefore,
we withdraw our recommendation.
We find, however, that the protester is entitled to protest and bid
preparation costs. The reasonable costs of filing and pursuing a
protest, including attorney's fees, may be recovered where the agency
has unreasonably excluded the protester from the procurement, except
where our Office recommends that the contract be awarded to the
protester and the protester receives the award. 4 C.F.R. Sec. 21.6(e).
Additionally, the recovery of costs for bid preparation may be allowed
where the protester was unreasonably excluded from the competition and
no other practicable remedy is available. Id.; Consolidated
Construction, Inc., B-219107.2, Nov. 7, 1985, 85-2 CPD P 529. Our
previous finding that Age King was improperly deprived of the award has
not been challenged by DLA. Accordingly, by separate letter of today,
we are advising the Director of DLA of our determination that Age King
be allowed to recover its costs of filing and pursuing its protest,
including attorney's fees, and its bid preparation costs. See Computer
Data Systems, Inc., B-218266, May 31, 1985, 85-1 CPD P 624. Age King
should submit its claim for such costs directly to DLA. 4 C.F.R. Sec.
21.6(f).
Comptroller General
of the United States
1/ Contract performance by F&H had earlier ceased as a result of a
prior protest. Thus, while the contract had been initially awarded to
F&H prior to DLA's referral of Age King's responsibility to SBA, all
parties treated SBA's consideration of Age King's responsibility as the
equivalent of a pre-award COC proceeding, especially in view of the
stop-work order that had been issued to F&H as a result of the prior
protest. In our initial decision, we adopted this view.
Matter of: Age King Industries, Inc.
File: B-225445.2
Date: June 17, 1987
Where the contracting officer refers a nonresponsibility
determination to the Small Business Administration (SBA) under the
certificate of competency (COC) procedures, and SBA does not notify the
agency of its intended issuance of a COC within the prescribed time
period, but the contracting officer nevertheless receives such advice
from the SBA prior to taking any contract action, the agency is bound by
the COC determination and must make award to the low, responsive,
responsible bidder as certified by the SBA.
Age King Industries, Inc. protests the award of a contract to F&H
Manufacturing Corporation under invitation for bids (IFB) No.
DLA500-86-B-2090, issued as a small business setaside by the Defense
Industrial Supply Center, Defense Logistics Agency (DLA), Philadelphia,
Pennsylvania for 6,000 crank handles. Age King contends that DLA
illegally directed F&H, the second low bidder, to resume work under its
suspended contract (contract performance had ceased as a result of a
prior protest), despite notice from the Small Business Administration
(SBA) that the SBA was going to issue a certificate of competency (COC)
to Age King, the low, responsive bidder which was therefore entitled to
the award.
We sustain the protest.
The regulations that govern COC proceedings provide that when a
contracting officer determines that a small business concern is not a
responsible, prospective contractor, the contracting officer must
withhold award and refer the matter to the SBA, the agency authorized by
statute (15 U.S.C. Sec. 637(b)(7) (1982)) to certify conclusively as to
all elements of a small business concern's responsibility. Federal
Acquisition Regulation (FAR), 48 C.F.R. Sec. 19.6021(a) (1986). Unless
the SBA and the contracting agency agree to a longer period, the SBA
must take specific action in response to a COC referral within 15
business days. FAR, 48 C.F.R. Sec. 19.602-2(a). The contracting
officer is authorized to proceed with the acquisition and award a
contract to another offeror, if the SBA fails to issue a COC within 15
business days or within such longer time as may have been agreed upon by
the agency and the SBA. FAR, 48 C.F.R. Sec. 19.602-4(c).
The solicitation was issued on June 10, 1986 and established a bid
opening date of July 10, 1986. Six bids were received. Age King
submitted the low bid of $15.95 each (approximately $95,000 total),
while F&H was second low with a bid of $16.95 each (approximately
$101,000 total). In its bid, Age King represented itself as a small
business concern and as a regular dealer in the supplies offered. Age
King did not check the box in the solicitation to indicate that it was a
manufacturer of the supplies or that the supplies would be manufactured
by a small business concern. However, elsewhere in the solicitation,
Age King did list its own plant in Chicago, Illinois as the location of
the manufacturing facility where the supplies would be produced. On
August 19, 1986, Age King sent a letter to the contracting officer
stating that Age King was a manufacturer and that its failure to check
the appropriate box in the solicitation was a clerical error.
Subsequently, a pre-award survey was performed and the survey
officials, in a report dated September 5, 1986, found Age King to be
satisfactory in technical capability, quality assurance capability,
financial capability and packaging capability but recommended that no
award be made to the firm because of unsatisfactory production
capability (the survey team found that Age King could not meet the
180-day delivery schedule due to the lead time required for castings).
Shortly thereafter, on September 30, 1986, the contracting officer
rejected the F&H bid as nonresponsive "due to ambiguities about its
manufacturing status which cannot be resolved from the face of the
bid." The contracting officer then awarded the contract to F&H on
October 10, 1986.
Age King was informed of the rejection of its bid and the award to
F&H in late October 1986, and protested to our Office on October 31,
1986. In its protest, Age King argued that the erroneous representation
in its bid that it was only a regular dealer and not a manufacturer was
a minor informality which should be waived and which did not affect the
responsiveness of its bid. Age King also requested that DLA suspend
performance by F&H and refer the matter of its responsibility to SBA for
possible issuance of a COC. On November 12, 1986, DLA suspended
performance under the F&H contract because the "protest was received
within ten (10) days of Age King's learning of the contract award." As
a result of the protest, the contracting officer reconsidered his
position and decided that Age King's bid was responsive. DLA and the
protester then entered into a "settlement agreement" under which DLA
would treat the firm's bid as responsive and would refer the matter of
Age King's responsibility to SBA for possible issuance of a COC in
return for Age King withdrawing its protest which it did on November 26,
1986.
On December 8, 1986, the contracting officer referred the question of
Age King's responsibility ("capacity") to the SBA and included in his
referral the negative pre-award survey and other information relating to
Age King's responsibility that had been generated by DLA. SBA
subsequently established, by letter of December 19, 1986, a closing date
of January 14, 1987 for a decision by SBA as to the issuance of a COC.
This deadline was then mutually extended to January 23, 1987, when, on
January 7, SBA also agreed to consider Age King's financial
responsibility in its COC determination.
On January 16, 1987, one week before the deadline, an official of the
SBA Chicago District Office called the contracting officer and relayed
the following information:
"This is to alert you that we are recommending a COC.... You
will receive an official call from SBA Regional Office next week.
. . . We have visited the contractor's plant and were able to
refute all negative factors... . D ocumentation to back up a COC
. . . will be submitted to the Regional Office for approval of a
COC."
There is a factual dispute as to the events that followed. According
to DLA, no telephone call or any other form of communication was
received by anyone at DLA by January 23, 1987, the closing date. DLA
has submitted several affidavits in support of its position from
officials who were present at DLA during this period. According to the
industrial specialist at the SBA Regional Office, he called the
contracting officer on Friday, January 23, 1987 and talked to an
unidentified "individual who stated that he was the only one in the
office due to a snow storm." The SBA official allegedly informed this
individual of the SBA's intentions and left a message for the
contracting officer to call him; this call was never returned. DLA
denies that any individual at its office received this message and has
submitted the time and attendance records of the contracting officer
which show that the contracting officer was present at work on Friday,
January 23, 1987 despite the snowstorm.
On January 26, 1987, the following business day, the SBA Regional
Office sent the contracting officer a letter stating that the SBA
Regional Office intended to issue a COC to Age King. The SBA further
stated that Age King had a positive cash flow and established credit and
that the firm had assured the SBA that delinquency problems had been
resolved. On February 2, 1987, prior to receiving SBA's letter of
January 26, DLA was informed by an SBA official by telephone that the
letter had been issued by SBA, which intended to issue the COC. In this
same telephone conversation, the DLA representative told the SBA
official that since SBA had not provided notice of the intended COC
prior to the closing date of January 23, DLA would proceed with "award
procedures" to another offeror despite the intended issuance of the COC.
On the following day, February 3, knowing that SBA had determined Age
King to be entitled to a COC, and not previously having taking any
contract action in reliance on the missed deadline, DLA directed F&H to
resume work under the suspended contract. On this same day, February 3,
DLA received the official letter from SBA dated January 26.
DLA's sole basis for not awarding the contract to Age King is its
contention that SBA missed its deadline of January 23, 1987 for giving
notice of its intent to issue a COC to Age King. 1/ DLA's argument is
simple. The SBA was required to inform DLA of its decision by the
deadline but did not do so. According to DLA, it was therefore free to
direct F&H to resume performance of its contract (the equivalent of an
award to another offeror), notwithstanding the fact that, on February 2,
1987, it received notice of the issuance of the COC before it notified
F&H to resume performance.
Generally, after the 15-day or other agreed upon period has expired,
the agency can properly make an award to another bidder when the SBA has
not acted on the COC. Kan-Du Tool & Instrument Corp., B-210819, June
21, 1983, 83-2 CPD P 12. We agree that SBA did not properly notify DLA
before the deadline date. At best, the SBA left a message with an
unidentified DLA official and the agency denies ever having received the
message. We do not think that this is proper notification. In this
regard, the prior SBA district office notification of January 26, that a
CCC was being recommended to the Regional Office also did not prevent
DLA from proceeding with the resumption of F&H's contract where final
approval was still required from the Regional Office. See Ken Com,
Inc., 59 Comp. Gen. 417 (1980), 80-1 CPD P 294.
However, we do not think that the regulation (FAR, 48 C.F.R. Sec.
19.602-4(c)), permitting the contracting officer to proceed with award
if the SBA fails to issue a COC within the agreed timeframe, can be
construed to authorize award where the agency has actual notice of the
issuance of the COC prior to taking any contract action. Such an
interpretation would conflict with the basic responsibility of the
contracting officer to make award to the low, responsive, responsible
bidder. As stated above, the SBA is authorized by statute to certify
conclusively as to all elements of a small business concern's
responsibility. Thus, a determination by the SBA to issue a COC is a
statutorily authorized finding that a low, responsive small business
bidder is responsible and therefore entitled to award. Under sealed
bidding procedures, agencies, absent circumstances not present here, are
required to make an award, after the bids have been opened, to the
responsible bidder that submits the lowest, responsive bid. FAR, 48
C.F.R. Secs. 14.404-1(a)(1) and 14.407-1 (a). In this regard,
information bearing on a bidder's responsibility may be received and
considered at any time prior to award. Guardian Security Agency, Inc.,
B-207309, May 17, 1982, 82-1 CPD P 471. Further, where an agency
determines a bidder to be nonresponsible and new material information
bearing on the bidder's responsibility becomes available prior to award
to another bidder, the agency is required to re-examine its initial
nonresponsibility determination in light of the new information received
prior to award. Mercury Consolidated, Inc. B-212077.2, Aug. 17, 1984,
84-2 CPD P 186, aff'd upon reconsideration, B-212077.3 et al., Oct. 24,
1984, 84-2 CPD P 459.
We think these principles are applicable here. If the agency, after
the SBA misses its deadline, has no notice of the issuance of a COC, it
can proceed with award action to the responsible bidder that is eligible
for award. However, where, prior to making an award, the agency is
informed of the issuance of a COC albeit after the deadline established,
we think that the agency cannot thereafter knowingly award a contract to
other than what it knows to be the low, responsive, responsible bidder
as certified by the SBA. In short, we do not think that an agency can
disregard notice of the issuance of a COC if no award has yet been made
and the government is not otherwise materially prejudiced by honoring
the COC determination, despite the missed deadline.
Consequently, DLA's resumption of performance under F&H's contract in
the face of the advice from the SBA that Age King would be issued the
COC was improper. The protest is sustained. We therefore recommend
that the contract with F&H be terminated for the convenience of the
government, and that a contract be awarded to Age King, absent any
appeal by DLA of the Regional Office's COC determination. See J.R.
Youngdale Construction Co., Inc., B-219439, Oct. 28, 1985, 85-2 CPD P
473.
Comptroller General
of the United States
1/ While the contract had been initially awarded to F&H prior to
DLA's referral of Age King's responsibility to SBA, all parties have
treated SBA's consideration of Age King's responsibility as the
equivalent of a pre-award COC proceeding, especially in view of the
stop-work order that was issued to F&H. We adopt this view.
Matter of: CACI, Inc.-Federal
File: B-225444
Date: January 13, 1987
Protest that technically acceptable proposal, lower in cost than
awardee's, was improperly not selected for award is denied since the
successful proposal reasonably was considered better technically and
technical considerations under the solicitation were of greater
importance to the government than cost.
CACI, Inc.-Federal (CACI), protests the award of a requirements
contract to Berlitz Language Centers of America, Translation Services
Division (Berlitz), by the Department of Justice (DOJ) under request for
proposals (RFP) No. JREIR-86R-0031. The RFP was for providing on-site
interpreter services in numerous foreign languages for administrative
immigration proceedings nationwide for a period of approximately 1 year
with options for 4 additional years. Although DOJ has not released any
detailed information to the protester concerning the evaluation of
proposals, because it believes this information to be privileged, CACI
nevertheless asserts that DOJ failed to follow its announced criteria in
evaluating proposals and that CACI should have received the award as the
lower-cost technically acceptable offeror.
We deny the protest.
The RFP provided that the selection of the successful offeror would
be made on the basis of price and other factors; the government
reserved the right to award a contract to other than the offeror
submitting the lowest total price and to award the contract to the
offeror whose proposal represented the "greatest value" to the
government. The RFP, which contemplated the submission of separate
technical and business management proposals, stated that technical
quality was the most significant evaluation factor while cost was the
least important factor. The solicitation's instructions for preparation
of technical proposals cautioned offerors that technical proposals
should be "specific and complete," and should address the stated
evaluation factors. The solicitation listed the following three
technical evaluation criteria and their respective weights:
1. Personnel Qualifications (35 percent)
2. Technical Approach (35 percent)
3. Corporate Experience (30 percent)
The solicitation also cautioned offerors that as proposals become
more equal in technical merit, the evaluated cost would become more
important. In this respect, the solicitation stated that options would
be evaluated by adding the total price of the services for the option
periods to the total price of the services for the basic period. Four
firms submitted proposals. DOJ evaluated the initial technical and cost
proposals, and subsequently also evaluated best and final offers which
were only requested from CACI and Berlitz. DOJ rated the technical
proposal of Berlitz to be technically superior to the proposal of CACI
in all three technical evaluation areas. The evaluation results of the
best and final offers (two rounds) from a cost standpoint were as
follows:
CACI $3,663,270.00
Berlitz $4,048,194.00
Thus, CACI was low in cost by $384,924 for the 59-month performance
period. Based on the technical superiority of the Berlitz technical
proposal, DOJ determined that award should be made to Berlitz despite
its higher price.
CACI disputes this determination by DOJ. We will limit our
discussion to the major findings of the DOJ technical evaluators with
respect to the proposals of Berlitz and CACI.
As a preliminary matter, DOJ, in its agency report, and although the
contract had already been awarded to Berlitz, classified both the
Berlitz and the CACI proposals and all evaluation documents as
privileged and not releasable outside our Office. Since under these
restrictions we would not be able to write a decision except in the most
vague terms, we contacted DOJ and requested clarification and an
explanation for these restrictions. DOJ stated that it was concerned
that, should our Office recommend resolicitation of this requirement, no
firm receive a competitive advantage from released information.
Otherwise, DOJ does not object to release of this information in our
decision. Since we are denying the protest, we are therefore releasing
the major findings of the DOJ technical evaluators although we still
will withhold details unnecessary to our decision. However, our
decision is based on a review of all relevant reports and exhibits
submitted to our Office by DOJ.
DOJ evaluators, in evaluating proposals with respect to personnel
qualifications (factor 1), found that Berlitz proposed stringent
screening, testing, and evaluation of prospective interpreters.
Specifically, Berlitz, which has locations nationwide, proposed to
screen all applicants on the basis of educational level, work
experience, and references followed by personal face-to-face interviews
and oral testing of interpreters. Berlitz also proposed to give
applicants instructions and a briefing in ethics and courtroom
procedures prior to being assigned to a courtroom. The evaluators found
that CACI, on the other hand, has a centralized operation which does not
allow the firm to personally interview and test applicants. Rather,
CACI screens and test applicants only by telephone which DOJ feared
could result in the selection of unqualified interpreters. With respect
to administrative staffing, the DOJ evaluators found that Berlitz
proposed to provide 316 hours of administrative support per week among
eight translation and language centers while CACI only proposed to
provide between 109 and 150 hours of administrative support per week.
With respect to technical approach (factor 2), the evaluators noted
that Berlitz had a large decentralized staff throughout the country in
72 locations and proposed operational hours of 6 a.m. to 10 p.m. (EST).
CACI, with its centralized location, proposed fewer operational hours.
The evaluators also found that Berlitz had in place an automated billing
system which would permit Berlitz to submit timely invoices correlated
to a bi-weekly billing cycle. CACI currently has a manual billing
system. Further, DOJ evaluators found that while Berlitz recruits from
all 72 of its locations, CACI uses only one person (less than full time)
for recruiting.
Regarding corporate experience (factor 3), the evaluators found that
Berlitz had extensive experience (more than 100 years) as a corporation
whose primary function is providing interpreter services. Further, DOJ
determined that Berlitz demonstrated more extensive experience in
courtroom interpreter services than did CACI whose experience primarily
was limited to its incumbent administrative immigration interpreter
services.
The contracting officer accepted the findings of the technical
evaluators and Berlitz was awarded the contract because its proposal was
judged to be superior in all major technical areas and was therefore the
most advantageous as a whole despite its higher cost.
In reviewing selection decisions, we have pointed out that the
contracting agency is primarily responsible for determining which
technical proposal best meets its needs, since it must bear the major
burden of any difficulties incurred by reason of a defective evaluation.
Training Corp. of America, Inc., B-181539, Dec. 13, 1974, 74-2 CPD P
337. Accordingly, we consistently have held that procuring officials
enjoy a reasonable range of discretion in the evaluation of proposals
and in the determination of which offer or proposal is to be accepted
for award, and that such determinations are entitled to great weight and
must not be disturbed unless shown to be unreasonable or in violation of
the procurement statutes or regulations. See METIS Corp., 54 Comp. Gen.
612 (1975), 75-1 CPD P 44. Further, where the solicitation indicates
that technical excellence is more important than cost considerations to
the procuring agency, we have upheld awards to concerns submitting
superior technical proposals even though the awards were made at costs
higher than those proposed in lower rated technical proposals. See
Riggins & Williamson Machine Co., Inc., et al., 54 Comp. Gen. 783
(1975), 75-1 CPD P 168.
As stated previously, DOJ has not released any of its evaluation
reports to the protester. Thus, the principal factual basis for CACI's
allegations concerning improper evaluation is CACI's claim to be a
highly experienced firm with 2 years of experience in providing
interpreter services to DOJ as the incumbent. According to CACI, this
experience should have afforded the firm an "enormous technical
advantage" over other competing firms and, based on this assumption,
CACI therefore suggests that its proposal must have been misevaluated.
Our review of the record provides no legal basis to object to DOJ's
decision. Our review indicates that DOJ strictly adhered to the stated
RFP evaluation criteria and that CACI's proposal was evaluated
technically inferior to the Berlitz proposal. Further, it appears to us
that the DOJ evaluators could rationally evaluate the proposals as they
did. For example, the Berlitz proposal indicates that Berlitz does
offer a nationwide network of locations from which it proposed stringent
screening, testing, and evaluation of prospective interpreters,
including face-to-face interviews. CACI admits that it relies on the
telephone for recruiting. Whiie CACI argues that recruiting by
telephone meets the solicitation's minimum requirements, we find that
there is a rational basis for DOJ to rate the Berlitz proposal superior
to the CACI proposal in this area. As a further example, we have
verified that the Berlitz proposal demonstrates much more extensive
experience in courtroom interpreter services than does CACI's proposal.
Again, while CACI argues that it meets the minimum requirements for
corporate experience set forth in the solicitation, we find that DOJ
could rationally have rated the Berlitz proposal, representing 100 years
corporate experience in interpreter services, to be superior. Moreover,
Berlitz offered an automated billing system and more hours of
adminstrative support then did CACI.
In short, we think that the record indicates that DOJ reasonably
evaluated the Berlitz proposal as technically superior. 1/ The fact that
the protester objects to the evaluation, and perhaps believes its own
proposal was better than as evaluated by DOJ, does not render the
evaluation unreasonable. Honeywell, Inc., B-181170, Aug. 8, 1974, 74-2
CPD P 87. We have also recognized that in a negotiated procurement
selection officials have the discretion to make determinations
concerning cost/technical tradeoffs and the extent to which one may be
sacrified for the other is governed only by the tests of rationality and
consistency with the established evaluation factors. Grey Advertising
Inc., 55 Comp. Gen. 1111 (1976), 76-1 CPD P 325. Here, we have no basis
to disagree with DOJ that the technically superior Berlitz proposal
merited the premium cost of $384,924.
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ CACI also complains that DOJ improperly penalized the firm for not
having certain K'anjobal (a Mayan Indian language) interpreters on the
East Coast. CACI alleges that it did comply with this requirement.
However, based on our review of the evaluation documents, we find this
to be a minor issue which would not have affected the ultimate selection
of the successful offeror. Since Berlitz clearly demonstrated technical
superiority in all major areas, we find that there is no basis to
conclude that any misevaluation concerning the K'anjobal interpeters
could have prejudiced CACI by depriving the firm of an award to which it
was otherwise entitled. See Employent Perspective, B-218338, June 24,
1985, 85-1 CPD P 715; Lingtec, Inc., B-208777, Aug. 30, 1983, 83-2 CPD
P 279.
Matter of: Delta Computec, Inc.
File: B-225442
Date: February 9, 1987
Protest against the adequacy of the agency's evaluation of the
awardee's experience in the type of work called for by the solicitation
is denied where the record shows a reasonable basis for the evaluation
that is consistent with the solicitation's technical evaluation
criteria.
Delta Computec, Inc. (Delta), protests the award of a fixed-price
contract to Telos Field Engineering (Telos) under request for proposals
(RFP) No. 86-17, issued by the Library of Congress (Library) to maintain
the Library's computer equipment for 36 months. Delta argues that the
Library improperly evaluated Telos' experience. We deny the protest.
The RFP required remedial and preventive maintenance services,
including spare parts, on an on-call basis for the Library's Data
General, Four Phase, and IBM computers and their associated hardware as
listed on the solicitation's equipment schedule. The RFP asked for
separate maintenance prices for the equipment in each of the three
computer categories. The selection of the awardee was to be based 75
percent on the offeror's proposed price and 25 percent on the offeror's
demonstrated experience and satisfactory performance in maintaining
computer hardware of a similar size and nature. The solicitation also
set forth a technical evaluation point scale based on the number of
years of an offeror's demonstrated maintenance experience. According to
the scale, 1 year or less of experience would receive no evaluation
points and 5 years or more would receive the full 25 technical
evaluation points. From 3 to 20 points would be given for between 1 and
5 years experience.
The Library received seven proposals for maintenance of the Data
General equipment portion of the RFP. The Library determined that three
of the offerors lacked any demonstrated experience in maintaining
similar equipment and eliminated them from the competition. The other 4
offerors, including Delta and Telos, received the full 25 points, in
accordance with the RFP's evaluation criteria, for having 5 or more
years of maintenance experience. Since these four offerors were found
to be technically capable and also equally qualified in terms of
experience to perform the maintenance work called for by the RFP, the
Library decided no discussions were necessary, and the offerors'
initially-proposed prices became the dispositive factor in making the
award. Award in the amount of $352,872 was made to Telos as the offeror
having the lowest offered price.
Delta, the second low offeror at $392,040, contends that Telos should
not have received the full 25 points for maintenance experience. Delta
alleges that Telos has no experience in maintaining at least 14 types of
Data General equipment listed in the RFP. Delta asserts in this regard
that certain of the items of equipment are so new to the computer
industry that it is impossible for Telos to be experienced in servicing
similar equipment because no such similar equipment exists. Delta
argues that it was prejudiced by the unwarranted high evaluation of
Telos' experience because even with the award evaluation weighted 75
percent in favor of price, Delta's superior experience as the incumbent
contractor maintaining Data General equipment for the Library should
have outweighed the small difference in price between the two proposals.
The Library disputes Delta's allegation that the Library's Data
General equipment is so new that Telos cannot have the experience needed
to maintain it; in the Library's view, the ability of a company to
service and maintain computer hardware is essentially transferable from
one type of computer unit to another. The Library also maintains that
an experienced computer service company will hire or train employees
that might be needed for equipment relating to a particular contract and
that good technicians with an adequate electronics background can be
trained rather easily to work on various types of computers that
basically are similar. The Library states that its evaluators contacted
all the maintenance references in Telos' proposal to ascertain whether
the computers Telos had serviced were similar to the Library's Data
General computers, and that these contacts established that Telos'
proposal in fact reflected 5 or more years experience in servicing Data
General and comparable equipment. Thus, the Library asserts that it
properly determined that Telos had the experience to justify receiving
the full 25 technical evaluation points.
The determination of the relative merits of proposals, particularly
with regard to technical considerations, is primarily the responsibility
of the contracting agency, not our Office, since the agency must bear
the burden of any difficulties resulting from a defective evaluation.
Litton Systems, Inc., Electron Tube Division, 63 Comp. Gen. 585 (1984),
84-2 C.P.D. P 317. In light of this standard, we consistently have held
that procuring officials enjoy a reasonable degree of discretion in
evaluating proposals, and that their judgments will not be disturbed
unless shown to be arbitrary or in violation of procurement laws and
regulations. Vibra-Tech Engineers, Inc., B-209541.2, May 23, 1983, 83-1
C.P.D. P 550.
Delta has not established that the Library's evaluation of Telos'
maintenance experience was unreasonable. In its proposal, Telos
represented that it was a proven, experienced hardware maintenance firm
with 16 years of experience. In support of the representation, Telos
listed a number of its prior maintenance contracts at other government
agencies within the last 10 years, which Telos indicated were directly
related to the Library's maintenance requirements. As noted above, the
Library's evaluators contacted these listed references to ascertain
whether the computers were similar in nature to the Library's and
determined that they were. In addition, the record shows that the
evaluators queried these references as to the length of the services
provided by Telos, Telos' overall effectiveness and technical
capabilities, and any problems encountered with Telos' performance. As
indicated, the Library's evaluators concluded from these contacts that
Telos' overall technical capabilities were very good and that no
problems had been encountered with Telos' performance. With regard to
Delta's complaint that Telos lacks experience in maintaining the exact
type of Data General equipment that the Library has, we note that the
RFP's evaluation criteria did not specify that an offeror's maintenance
experience be with any particular type of computer, only that the
experience be on computers similar in size and nature to the Library's
computers.
In our view, Delta's argument that Telos should not have received the
full 25 technical evaluation points because some of its experience is on
other machines, essentially reflects only a difference in judgment
between Delta and the Library as to the quality of Telos' maintenance
experience. Disagreement between the protester and the agency over such
a technical consideration is not sufficient, in itself, to establish
that the agency's judgment was unreasonable. National Council for Urban
Economic Development, Inc., B-213434, Aug. 1, 1984, 84-2 C.P.D. P 140.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Collins & Aikman--Request for Reconsideration
File: B-225439.4
Date: February 5, 1987
Requirement that protest based on alleged impropriety incorporated
into solicitation by amendment be filed before the next closing date for
receipt of proposals applies where protester received amendment 10 days
before next closing date but did not file protest until after closing
date because it was allegedly unaware of deadline in General Accounting
Office Bid Protest Regulations.
Collins & Aikman requests that we reconsider our dismissal of its
protest of an amendment to the General Services Administration's request
for proposals (RFP) No. FCNH-F8-1887-N for various types of carpet. We
dismissed Collins' protest as untimely since it was not filed until
after the closing date for receipt of best and final proposals. We
affirm the dismissal.
Collins explains that it received the amendment on December 9, 10
days before the December 19 closing date for receipt of best and final
proposals. Since the amendment contained several changes, the protester
did not notice the change in the specification to which it objects until
shortly before the closing date. Although it claims to have made
numerous attempts to contact the contracting officer, it was unable to
reach him prior to submission of its best and final offer on the 19th.
The protester argues that it was unaware of the requirement in our
Bid Protest Regulations, 4 C.F.R. Sec. 21.2(a) (1) (1986), that a
protest of an impropriety incorporated into a solicitation by amendment
be filed not later than the next closing date for receipt of proposals.
Collins also notes that when it contacted our Office on December 23, it
was instructed that it would have 10 working days within which to file a
protest.
We will waive the requirement that protests of improprieties in an
amendment be filed prior to the next closing date where the protester
does not receive the amendment which creates the alleged defect in time
to file a protest before the next closing date. The Big Picture Co.,
B-210535, Feb. 17, 1983, 83-1 CPD P 166. Here, however, Collins
received the amendment 10 days before final proposals were due, and had
a reasonable opportunity to study the amendment and to file a timely
protest. See Cosmos Engineering, Inc., B-217430, Jan. 18, 1985, 85-1
CPD P 62. The fact that the protester did not notice that the amendment
pertained to the type of carpet it offered until shortly before the
proposal due date does not change the result, since the protester alone
was responsible for this oversight. Further, the fact that Collins was
unaware that it had to file its protest prior to the next closing date
for receipt of proposals is not relevant. Protesters are on
constructive notice of our regulations since they are published in the
Federal Register end in the Code of Federal Regulations. Engineers
International Inc.--Reconsideration, B-219760.2, Aug. 23, 1985, 85-2 CPD
P 225.
Finally, although Collins claims that it was given misleading advice
when it called our Office, the protester did not contact our Office
until December 23, 4 days after its deadline for filing a protest had
passed and thus it cannot argue that it missed the deadline due to its
reliance on this informal advice.
The prior dismissal is affirmed.
Harry R. Van Cleve
General Counsel
Matter of: Interface Flooring Systems, Inc.
File: B-225439
Date: March 4, 1987
1. Protest to General Accounting Office (GAO) after denial of
agency-level protest challenging specifications as defective is timely
even though filed more than 10 days after receipt of initial proposals
under challenged solicitation where protester reasonably concluded from
the contracting officer's statements that receipt of proposals did not
represent adverse action on the protest, and subsequent protest to GAO
was filed within 10 days after protester received agency's formal denial
of the protest.
2. Contention that contracting agency's decision to allow offerors to
propose alternate backing materials for carpet tiles is inconsistent
with applicable specification because the alternate materials do not
meet the shrinkage standard in the specification is without merit where
protester fails to show that the alternate materials exceed the maximum
shrinkage rate.
3. Specification for antimicrobial carpet is ambiguous and vague
since it does not adequately describe the type of antimicrobial activity
or level of effectiveness required.
Interface Flooring Systems, Inc. protests any award for antimicrobial
carpet and Class 2 vinyl hardback carpet tiles under request for
proposals (RFP) No. FCNH-F8-1887-N7-22-86, issued by the General
Services Administration (GSA). Interface maintains that (1) the
specification in the RFP for vinyl hardback tile is defective because it
permits the use of alternate backing materials which do not meet the
shrinkage standard in the applicable general federal specification; and
(2) the specification for antimicrobial carpet is ambiguous with regard
to the type and degree of antimicrobial activity required. We sustain
the protest in part and deny it in part.
The RFP, issued on June 18, 1986, provided for award of indefinite
quantity Federal Supply Schedule contracts for various types of floor
coverings, including carpet, carpet tiles, and carpet cushions. On July
14, Interface filed a protest with GSA challenging as defective the
specifications for antimicrobial carpet and vinyl hardback carpet tile.
Initial proposals then were received on July 29, followed by best and
final offers on September 23. GSA subsequently denied Interface's
protest by letter dated October 9, which was received by Interface on
October 15.
Interface then filed its protest with our Office on October 29. That
same date, GSA awarded a contract to J&J Industries, Inc. for one of the
two line items for antimicrobial carpet. 1/ On December 3, GSA
authorized continuation of performance under the contract
notwithstanding the protest based on its finding under the Competition
in Contracting Act of 1984 (CICA), 31 U.S.C. Sec. 3553(d)(2)(A)(ii)
(Supp. III 1985) that urgent and compelling circumstances significantly
affecting interests of the United States would not permit delaying
contract performance until the protest is resolved. In addition, on
January 13, 1987, GSA authorized the award of contracts for the line
items for vinyl hardback carpet tiles, based on its finding under CICA,
31 U.S.C. Sec. 3553(c)(2), that urgent and compelling circumstances
would not permit further delay in making those awards.
As a preliminary matter, GSA argues that the protest is untimely
because it was not filed within 10 days after the due date for initial
proposals, July 29. We disagree. As discussed above, Interface filed a
protest with GSA on July 14, raising the same issues as the current
protest to our Office. Interface maintains, and GSA does not dispute,
that before the initial closing date, the protester telephoned the
contracting officer to request a decision on the protest. According to
Interface, the contracting officer stated that GSA would not issue a
decision on the protest until after submission of initial offers on July
29. Interface states further that during the following month, it
telephoned the contracting officer again with regard to the protest, and
was advised that no decision on the protest would be issued until after
submission of best and final offers. After receiving GSA's request for
best and final offers, issued on September 10, Interface was advised by
the contracting officer that a decision on the protest would be issued
prior to contract award, but not before receipt of best and final
offers, due September 23. On October 15, Interface received from GSA a
letter dated October 9, denying the protest. On October 29, the tenth
working day after receiving the GSA letter, Interface filed its protest
with our Office.
Under our regulations, protests challenging specifications as
defective generally must be filed with either the contracting agency or
our Office before the due date for initial proposals. Bid Protest
Regulations, 4 C.F.R. Sec. 21.2(a) (1) (1986). Where, as here, the
protest is filed first with the contracting agency, a subsequent protest
to our Office must be filed within 10 days of adverse action on the
protest by the agency. 4 C.F.R. Sec. 21.2(a) (3). Acceptance of
initial proposals in the face of a protest generally constitutes adverse
agency action triggering the 10-day filing requirement. Federal
Acquisition Management Training Service, B-220070, Nov. 26, 1985, 85-2
CPD P 604.
We have held that a protest is timely even when filed more than 10
days after receipt of proposals, however, when the contracting officer
indicated to the protester that the decision to proceed with receipt of
proposals should not be interpreted to mean that the protest had been
denied, and the subsequent protest to our Office was filed within 10
days after the agency's formal denial of the protest. Centurial
Products, 64 Comp. Gen. 858 (1985), 85-2 CPD P 305. Similarly here, in
view of the contracting officer's statements to Interface that no
decision on the protest would be made until initial, and then best and
final, offers were received, it was reasonable for Interface to conclude
that GSA's receipt of proposals as originally scheduled did not
represent adverse action on its protest, and to await GSA's formal
response to the protest before filing with our Office. Since the
protest was filed here within 10 days after Interface's receipt of the
GSA letter denying the protefist, we find that the protest is timely.
As Interface states, the general federal specification for vinyl
hardback carpet tile, in effect since 1972, provides in part that the
shrinkage rate of the tile may not exceed .08 percent. In January 1986,
GSA issued a technical requirements booklet which modifies various
provisions of the 1972 specification. Paragraph 16 of the booklet
provides as follows: 2/
"Tufted Carpet Tiles
Whenever PVC Hardback or Class 2 Vinyl Cushioning is specified
in the Item Listing, Purchase Description or Specification,
alternatively, the following materials may be furnished in a
hardback construction.
EVA (Ethylene vinyl acetate) Atactic Polypropylene APP PE
(Polyethylene)"
Interface argues that this provision is inconsistent with the
original 1972 specification because it allows the use of alternate
backing materials (EVA, APP, and PE) which do not meet the .08 percent
shrinkage requirement set out in the specification. We find this
argument to be without merit.
GSA first argues that Interface's challenge to the revised
specification for vinyl hardback tiles is untimely because Interface did
not raise the specific basis for its protest-- the alleged noncompliance
of the alternate backing systems with the shrinkage standard--until the
bid protest conference at our Office and its subsequent written comments
on the GSA report. While Interface's initial protests to GSA and our
Office challenged the performance characteristics of the alternate
materials in general terms, those performance characteristics included
shrinkage. GSA's October 9 reply to Interface's initial agency-level
protest, specifically discussed the shrinkage issue, referring in
particular to shrinkage testing data supplied to GSA by Interface. 3/ We
believe it is appropriate to consider Interface's challenge to the
revised specification as it relates to the shrinkage standard because
Interface's initial protest letter referred in general to performance
characteristics which included shrinkage. Further, GSA apparently was
on notice of the specific basis for Interface's objection from the time
the initial protest to GSA was filed.
As support for its argument that the alternate materials do not meet
the shrinkage standard in the 1972 specification, Interface relies on
test results showing that certain carpet tiles made with two of the
alternate backing materials, EVA and APP, have shrinkage rates exceeding
the .08 percent standard. In our view, this information at most
demonstrate the shrinkage properties only of the particular products
tested since, as we read the record, carpet tiles using the same base
material for the backing may have different characteristics depending on
the precise formulation used. Thus, for example, while Interface has
submitted test results for one APP-based backing which exceeds the .08
percent shrinkage standard, other test results submitted by another
offeror under the RFP show not only that its own APP-backed product
meets the shrinkage standard, but also that certain PVC-based backings,
one of the original materials allowed by the 1972 specification, fail to
meet the shrinkage standard. In addition, Interface has submitted no
evidence regarding the shrinkage rate of PE, the third alternate backing
material listed in the revised specification.
Since we find that Interface has failed to show that carpet tiles
using the alternate backing materials necessarily exceed the maximum
shrinkage rate in the specification, we deny this ground of the protest.
With regard to the requirement for carpet with antimicrobial
properties, paragraph 15 of the applicable technical requirements
booklet provides in pertinent part as follows:
"Protection is to be contained in the yarn, in the backing or
by other means. Carpet shall demonstrate antibacterial activity
against Gram negative bacteria and Gram positive bacteria;
antifungal activity against key fungi; and shall be unaffected
after carpet samples have been subjected to repeated washings
following recognized laboratory procedures." 4/
Interface argues that this specification does not adequately describe
either the type or degree of antimicrobial activity the carpet is
required to demonstrate or the means by which that activity will be
measured. Specifically, Interface maintains that the requirement for
"antibacterial activity" and "antifungal activity" is ambiguous since it
reasonably could be interpreted to call for actually destroying bacteria
and fungi; merely inhibiting their growth; or both.
Further, Interface maintains that the provision does not specify the
degree of initial or long-term antimicrobial effectiveness required, and
fails to identify how the antimicrobial properties of the carpet will be
measured. According to Interface, the language calling for "repeated
washings following recognized laboratory procedures" is vague since it
does not specify the number or type of washings to be performed, and
gives no indication of what constitutes "recognized laboratory
procedures." In addition, by stating that the antimicrobial properties
of the carpet are to be "unaffected," the specification fails to
indicate what, if any, reduction in effectiveness over time will be
acceptable.
With regard to the type of antimicrobial activity required, GSA
argues that the specification clearly calls only for "inhibition" of the
growth of bacteria and fungi. We disagree. In our view, the terms used
in the specification-- "antibacterial activity" and "antifungal
activity"--on their face reasonably can be interpreted to mean any one
or all of the antimicrobial effects described by Interface (destroying
microbes, inhibiting their growth, or both). In addition, as part of
its report on the protest, GSA submitted literature describing the four
principal products used to add antimicrobial properties to carpet tile.
That literature confirms Interface's contention that the terms used in
the specification are subject to more than one reasonable
interpretation, since the available products have different
antimicrobial effects. Specifically, two of the products work only as
poisons which, after ingestion by microbes present in the carpet tile,
render them incapable of reproduction; the effect of these products
thus is to inhibit the growth of the microbes. A third product is
described as working as a "sword," which, rather than inhihiting growth,
instantly kills the microbes. A fourth product functions as both a
poison and a "sword"; the advantage of this product is said to be that
it helps ensure against development of microbial mutations resistant to
the poison alone.
Whether any of these products meets GSA's requirement for
antihacterial and antifungal activity depends on how the terms in the
specification are interpreted. For example, if the specification is
interpreted to require actually destroying the microbes--in our view, a
reasonable interpretation--only products acting as "swords" would be
acceptable; the two products acting as poisons would not meet the
requirement. Further, while an offeror could overcome the ambiguity in
the specification by offering a product capable of both destroying
microbes and inhibiting their growth, Interface maintains, and GSA does
not dispute, that the different products vary in cost, and thus the
offeror's price is affected by the product he selects.
With regard to the level of effectiveness of the products and the
testing methods used to establish both their initial and longer term
effects, the product literature shows that different manufacturers use
different tests which vary both as to testing techniques and measurement
standards. The testing techniques described include a visual inspection
of a treated area for the presence of bacteria; a quantitative analysis
of bacterial and fungal growth; and a qualitative test measuring the
"zone of inhibition" or distance around the carpet where fungus will not
grow. Further, regarding the methods used to measure the duration of
the antimicrobial effects, the product literature shows a wide variety
of methods, ranging from 3 to 100 washings of sample carpet and
including one or more different cleaning methods such as steam cleaning,
shampooing, and dry powder cleaning. Thus, for example, one product
claims that no bacterial growth is noticed on visual inspection after 20
shampoos of the carpet, while another product claims it produces a "zone
of inhibition" after 100 "washings."
As a general rule, offerors must be given sufficient detail in an RFP
to allow them to compete intelligently and on a relatively equal basis.
The specifications must be free from ambiguity and describe the
contracting agency's minimum needs accurately. Amdahl Corp., et al.,
B-212018, et al., July 1, 1983, 83-2 CPD P 51. In this case, the
specification is both ambiguous and vague since, as discussed above, it
does not adequately describe the type of antimicrobial activity or level
of effectiveness required. Because of these defects in the
specification, offerors cannot determine which carpet product will meet
GSA's needs. For example, Interface states that the standard
antimicrobial carpet tile it offers consists of a basic tile with an
antimicrobial agent in the fiber, to which Interface adds another
antimicrobial agent, "Intersept," to the carpet backing. According to
Interface, it could offer the basic tile without Intersept at a
substantially lower price. Since the specification fails to describe
GSA's needs adequately, however, Interface cannot determine whether the
lower priced product would be acceptable.
GSA argues that the specification does not describe the antimicrobial
properties required more precisely because antimicrobial carpet is a
relatively new product for which the carpet industry has not yet
developed standard measurements or testing techniques. In effect, GSA
maintains that because the carpet industry has not yet developed
standards defining the properties of the product GSA seeks, the agency
is justified in allowing the offerors to propose whatever product they
choose, along with their own tests supporting their claims for the
product's performance. The flaw in GSA's position, however, is that it
permits each offeror to define the specification for itself, and to the
extent they do so differently, the offerors are not competing on an
equal basis. See North American Reporting, Inc., et al., 60 Comp. Gen.
64 (1980), 80-2 CPD P 364.
Further, in order to determine whether any offeror's product meets
the specification, GSA will have to decide whether the antimicrobial
activity claimed by the offeror (and presumably supported by its own
tests) is sufficient to meet GSA's needs. It is unclear how GSA will
make this determination, since it admittedly has not yet established any
standards for initial or long-term effectiveness; however, since GSA
apparently believes that it will be able to determine if a product meets
its requirements after award is made, we see no justification for
failing to disclose those requirements in the specification itself.
Since we find that the specification for antimicrobial carpet is
ambiguous and vague, we sustain the protest on that ground.
Accordingly, we recommend that GSA terminate for convenience the
contract already awarded and recompete both line items for the carpet
using a new specification which more clearly sets out GSA's
requirements. 5/ In addition, we find that Interface is entitled to
recover the costs of filing and pursuing the protest, since, by
successfully challenging the specification for antimicrobial carpet,
Interface has helped enhance competition under the RFP. See Southern
Technologies, Inc., B-224328, Jan. 9, 1987, 66 Comp. Gen. , 87-1 CPD P
.
We, however, deny Interface's request for recovery of its proposal
preparation costs, because it chose to submit a proposal despite its
view that the specifications were defective. 4 C.F.R. Sec. 21.6(e).
The protest is sustained in part and denied in part.
Comptroller General
of the United States
1/ Since GSA was not advised by our Office that the protest had been
filed until October 30, the day after award was made, the statutory
suspension of contract award pending resolution of a protest did not
apply. See CICA, 31 U.S.C. Sec. 3553(c)(1).
2/ These requirements in the general federal specification and the
booklet are all incorporated into the subject solicitation.
3/ As Interface points out, GSA's October 9 letter does not
acknowledge that the 1972 specification establishes a maximum shrinkage
rate of .08 percent; instead, the letter states only that rates in
excess of .08 percent (specifically, 0.1 percent and 0.2 percent)
represent a commonly accepted standard. Despite this language in the
October 9 letter, GSA does not contend that its decision to allow use of
the alternate backing materials constitutes an implicit waiver of the
shrinkage standard in the 1972 specification. On the contrary, GSA
maintains that the alternate backing materials do meet the original
shrinkage standard.
4/ Under the first article test provisions of the solicitation, after
award is made the contractor is required to test a sample of the carpet
to verify compliance with the specification. The test results then are
to be submitted to GSA for approval.
5/ As noted above, the RFP contained two line items for antimicrobial
carpet. GSA made award and authorized performance of the contract
notwithstanding the protest under one line item; no award has yet been
made for the second line item.
Matter of: R. S. Data Systems, Inc.
File: B-225437
Date: March 11, 1987
Agency has a compelling reason for cancellation of invitation for
bids after bid opening when it fails to include Service Contract Act
provisions, and the omission may prejudice bidders with regard to their
prices for option years.
R. S. Data Systems, Inc., protests the cancellation, after opening,
of invitation for bids (IFB) No. DAAD05-86-B-5980, issued by the United
States Army Test and Evaluation Command, Aberdeen Proving Ground,
Maryland. The solicitation, a 100-percent small business set-aside,
covered keypunch services for the U.S. Army Publications Center in
Baltimore. R. S. Data asserts that the Army lacked a compelling reason
to cancel the IFB after bid opening, in violation of the procurement
regulations, and did so solely to prevent it from obtaining the award.
We deny the protest.
The record indicates that during the evaluation of 28 bids received
and opened on September 16, 1986, the price analyst discovered that the
solicitation did not incorporate by reference three clauses generally
required for service contracts. 1/ The contracting officer confirmed the
omission and determined that it created a reasonable doubt as to whether
all bidders had been bidding on an equal basis. The contracting officer
therefore canceled the solicitation on October 7, 1986.
The protester argues that the clauses can be inserted into the
contract after award through an administrative modification. Moreover,
the protester contends, as standard clauses, they are recognized by all
bidders to be inherent in any service contract, particularly where, as
here, the solicitation did include a Department of Labor wage
determination. Thus, according to the protester, the failure
specifically to identify these clauses in the solicitation does not in
any way change the Army's actual needs or impair the validity of the
competitive procurement. The protester concludes that the cancellation
violated the Federal Acquisition Regulation (FAR), 48 C.F.R. Sec.
14.404-1 (1986), which requires that the government have a compelling
reason to cancel an IFB after opening because of the potential adverse
impact on the competitive bidding system of cancellation after prices
have been exposed.
The solicitation required bid prices for a base period of 1 year and
four 1-year options, all of which were to be evaluated. The Army states
that although the solicitation included a wage determination for the
first year, it was not possible to determine whether bidders had ignored
the wage determination because the service contract clauses had been
omitted. In addition, some bidders had escalated their option year
prices, although the omitted price adjustment clause prohibits this.
The protester correctly states that, as a general rule, a defective
solicitation need not be canceled so long as the government's needs will
he met by an award under it and no bidder is prejudiced. Here, the
government's needs arguably could have been met, since the omitted
Service Contract Act provisions would be incorporated in any awarded
contract under the "Christian doctrine." See Linda Vista Industries,
Inc., B-214447, et al., Oct. 2, 1984, 84-2 CPD P 380, citing G. L.
Christian & Assocs. v. United States, 160 Ct. Cl. 1, 312 F.2d 418,
motion for rehearing denied 160 Ct. Cl. 58, 320 F.2d 345, cert. denied,
375 U.S. 954 (1983).
We think, however, that there was a clear possibility of prejudice to
bidders which makes the cancellation here proper. Some firms may have
assumed the application of the Service Contract Act and bid on that
basis, while others may have not made such an assumption. The fact that
some bidders did not comply with the omitted " Fair Labor Standards Act
and Service Contract Act--Price Adjustment" clause in pricing option
years indicates that at least those bidders may not have been aware of
the Service Contract Act's application to the contract. Under these
circumstances, it is irrelevant that the protester, the second-low
bidder under the defective solicitation, believed it was in line for
award after the low bidder withdrew. Compare Linda Vista Industries,
Inc., supra (omission of mandatory value engineering clause does not--
affect evaluation of bids and therefore does not require cancellation
and resolicitation).
Moreover affording protection to service workers and thereby
furthering the purposes of the Service Contract Act is a "compelling
reason" to cancel an IFB after bid opening in order to resolicit,
incorporating both the wage determinations and contract clauses relevant
to the Service Contract Act. NonPublic Educational Services, Inc.,
B-207751, Mar. 8, 1983, 83-1 CPD P 232. While the IFB here included a
firstyear wage determination, it did not include a multitude of
obligations imposed upon contractors by the omitted clauses. For
example, the wage determination alone does not require compliance by
subcontractors or address the contractor's obligation to adjust wages
and fringe benefits during option years. Accordingly, once the omission
of the clauses was brought to the contracting officer's attention, the
contracting officer was acting within the scope of his authority in
canceling the IFB. See also DWS, Inc., B-217199, Aug. 30, 1983, 83-2
CPD P 287.
To the extent that R. S. Data alleges that the Army canceled the
solicitation merely to avoid making award to it, the protester has
presented no probative evidence to support its allegation. We will not
attribute prejudicial motives to contracting officials on the basis of
inference or supposition, and we deny the protest on this basis.
Because the original solicitation was properly canceled, there is no
legal basis for R. S. Data to recover the costs of either preparing its
bid or pursuing this protest. 2/ 4 C.F.R. Sec. 21.6(d) (1986);
Cellular Prod. Serv., Inc., B-222614, July 3, 1986, 86-2 CPD P 32.
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ The omitted clauses were "Contract Work Hours and Safety Standards
Act--Overtime Compensation," Federal Acquisition Regulation (FAR), 48
C.F.R. Sec. 52.222-4 (1985); "Service Contract Act of 1985, as
Amended," Defense Acquisition Regulation (DAR), Sec. 7-1903.41 (a) (DAC
76-49, Jan. 1984); and "Fair Labor Standards Act and Service Contract
Act - Price Adjustment (Multi-Year and Option Contracts)," DAR Sec.
7-1905 (b) (DAC 76-20, Sept. 1979). The agency advises us that it uses
the DAR clauses in solsicitations for services because Service Contract
Act coverage is not provided in the current FAR. See Item VII, FAC
84-1, Mar. 1984.
2/ In a related protest to the Army, R. S. Data requested that no
award be made under the resolicitation, request for proposals No.
DAAD05-87-R-5026, issued November 25, 1986, until our resolution of this
protest. We note that the Army has postponed indefinitely the due date
for proposals under the new solicitation, which incorporates the omitted
Service Contract Act clauses.
Matter of: Keener Manufacturing Company
File: B-225435
Date: February 24, 1987
Protest that agency deprived incumbent contractor of opportunity to
bid because aqency did not provide it with a solicitation or otherwise
inform incumbent that a new solicitation had been issued is denied where
incumbent was informed of solicitation by Commerce Business Daily
announcement and record shows that reasonable efforts were made to
distribute solicitation and that four aids were received.
Keener Manufacturing Company protests the proposed award of a
contract under invitation for bids (IFB) No. 5FCG-17-86-056, issued by
the General Services Administration (GSA), for its annual requirements
for shipping and stocking tags. Keener complains that even though it
was the incumbent contractor the agency failed to provide it with a copy
of the solicitation prior to the bid opening date. We deny the protest.
The procurement was synopsized in the Commerce Business Daily (CBD)
on June 17, 1986. The synopsis, however, erroneously indicated that the
solicitation would be issued on or about June 7, 1985. The synopsis
also stated that the bid opening date would be 30 days after the
solicitation was issued and provided that the contract would run from
November 1, 1986, or date of award, whichever was later, thru October
31, 1987. Further, the synopsis included the name and phone number of
the contract specialist handling the procurement in GSA's Chicago
office.
On July 1, GSA's Chicago office sent Keener a letter to advise the
firm that "procurement responsibility for the FSC 8135 items covered by
-Keener's- contract(s) GS05F13478 is being transferred effective July 1,
1986," to GSA's New York office. The letter, received by Keener on July
7, included a New York contact point.
On July 2, the solicitation was issued by GSA's Chicago office with a
bid opening date of August 1. 1/ Four timely bids were submitted.
Keener did not bid.
The protester claims that it never received a copy of the
solicitation and argues that the June 17 CBD announcement did not
constitute proper notice of the procurement because it contained an
erroneous solicitation issuance date. Further, the protester says that
it saw the June 17 CBD announcement, but expected that another
announcement would be issued to correct the error. According to Keener,
the July 1 letter that transferred procurement authority to the New York
office corrected the CBD notice. Although Keener says that it was
"confused" when it received the letter since the CBD notice indicated
that the solicitation would come from Chicago, it read the July 1 letter
as advising it to expect a new solicitation from New York.
Although GSA admits that Keener was not on its computer created
bidder's list or on the contract specialist's handwritten bidder's list,
it maintains that the solicitation was sent to Keener. In this regard,
GSA reports that its contract specialist says that she mailed a
solicitation to all firms, including Keener, that submitted bids on the
previous solicitation.
Under the Competition in Contracting Act of 1984 (CICA), agencies are
required when procuring property or services to obtain full and open
competition through the use of competitive procedures. 41 U.S.C. Sec.
253(a)(1)(A) (Supp. III 1985). "Full and open competition" is obtained
when "all responsible sources are permitted to submit sealed bids or
competitive proposals." Id. Secs. 259(c) and 403(7). Consequently, we
will give careful scrutiny to an allegation that a firm was not provided
an opportunity to compete for a particular contract. Trans World
Maintenance, Inc., 65 Comp. Gen. 401 (1986), 86-1 CPD P 239.
Nevertheless, we think an agency meets CICA's full and open competition
requirement when it makes a diligent, good-faith effort to comply with
statutory and regulatory requirements regarding notice of the
procurement and distribution of solicitation materials and obtains a
reasonable price. The fact that inadvertent mistakes occur in this
process should not in all cases be grounds for disturbing the
procurement. NRC Data Systems, B-222912, July 18, 1986, 65 Comp. Gen.
, 86-2 CPD P 84.
Here, although it appears that the agency made a good faith effort,
we have some question regarding GSA's procedures used to distribute the
solicitation. The contract specialist says she mailed copies to those
who responded to last year's solicitation but kept no written evidence
of exactly which of these firms such as Keener not on the bidder's list
were sent solicitations. Thus, it is difficult to tell for sure whether
a solicitation was actually sent to the protester.
Nevertheless, the June 17 CBD announcement, of which Keener says it
was aware, provided adequate notice of the new solicitation so that
Keener as a reasonably prudent firm should have requested a solicitation
or at least inquired as to when it would be issued.
The statement in the June 17, 1986, announcement, that the
solicitation would be issued on June 7, 1985, was an obvious error.
Based on the information in the CBD notice that GSA contemplated a
contract starting in November 1986 and running until October 1987, we
think that any prospective contractor would know that bids were being
solicited for future requirements of shipping and stocking tags. It was
the duty of the firm seeing that notice to either request a solicitation
from GSA or inquire as to when the solicitation would be issued.
Certainly, Keener, as an incumbent contractor, should have known,
despite the error, that its interests were being affected by the CBD
announcement.
Further, we do not believe that the protester acted reasonably in
concluding not to inquire further when it received the July 1 letter
informing it that the authority over the items under its current
contract had been transferred to New York. That letter did nothing to
clear up the error in the CBD notice and if anything it should have
stimulated Keener into making an inquiry.
In view of the protester's failure to respond to the CBD notice and
the fact that four bids were received, we see no basis to disturb the
procurement.
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ GSA explains that since requirements for the items had already
been submitted to the Chicago office, the solicitation was issued by
that office while the bid opening would take place in the New York
office.
Matter of: Lenzar Optics Corporation
File: B-225432
Date: March 4, 1987
1. Protest that RFP was tailored to favor traditional optics
technology is untimely since alleged improprieties apparent in the
solicitation should have been protested prior to the date for receipt of
initial proposals.
2. Where RFP placed emphasis on minimizing technical risk and on
assuring that system to be acquired would perform as specified,
contracting agency did not act arbitrarily in ranking a proposal to
furnish proven equipment as superior to innovative, but less well proven
design which the agency believed would perform less satisfactorily.
3. Protester has not established contention that agency failed to
properly consider price reduction where record does not show that
reduced prices were actually proposed. Moreover, any price reduction
submitted after the closing date for receipt of best end final offers
could not be considered without reopening discussions because protester
was not otherwise in line for award.
Lenzer Optics Corporation protests the award of a contract to
Contraves-Goerz Corporation under request for proposals (RFP) No.
DAAA02-85-R-9003, issued by the Army CommunicationsElectronics Commend
for electro-optical packages (television camera systems, including
technical date and support). The protester asserts that the RFP favored
what Lenzar characterizes as old technology. Lenzar asserts that its
proposal offered a unique, light weight catadioptric zoom lens system,
while Contraves-Goerz offered a less attractive design and is a foreign
owned firm. Lenzar also says the Army arbitrarily and capriciously
failed to reevaluate its proposal in light of reduced costs resulting
from the award of a second government contract.
We dismiss the protest in part end deny it in part.
The RFP called for the award of a fixed-price contract for three low
light level television systems with options to acquire up to three
additional systems. The contractor was also to furnish technical
support, including the design, fabrication and installation of shock
mounts that will permit a camera to be installed on a high mobility
multi-purpose wheeled vehicle. The equipment is to be used by the
Military Intelligence Battalion, 9th Infantry Division, as part of a
long range electro-optical system.
Award was to be made based on three evaluation factors listed in
descending order of importance: (1) technical approach, (2) management,
personnel and facilities, and (3) cost. Technical approach was broken
down into numerous subfactors, with soundness of approach, reliance on
proven technology, and the Army's assessment of the extent to which each
vendor's proposed program would conform to the specifications as the
most important considerations.
Contraves-Goerz and Lenzar each submitted proposals 1/ that were
found to be within the competitive range. Following discussions and
best and final offers, the Army ranked Lenzar's proposal as technically
acceptable. ContravesGoerz's proposal was evaluated as superior,
reflecting the Army's judgment that it combined lower technical risk
with far better expected performance at low light levels. Moreover,
Lenzar's proposal was higher in price, at $1,310,349, compared with
Contraves-Goerz's price of $978,907. Accordingly, the Army selected
Contraves-Goerz's proposal for award.
Although Lenzar complains that the solicitation was tailored to the
type of technology that Contraves-Goerz offered, which according to the
protester is comparatively heavy and bulky, any complaint regarding the
terms of the solicitation is untimely. To be considered timely, our
regulations require protests concerning alleged improprieties that are
apparent in a solicitation to be filed prior to the closing date for
receipt of initial proposals. Bid Protest Regulations, 4 C.F.R. Sec.
21.2(a) (1) (1986). The RFP requirements and evaluation criteria
employed here were apparent from the outset. This portion of Lenzar's
protest is therefore dismissed.
Lenzar argues that it proposed a unique, technically superior system,
which should have been preferred over ContravesGoerz's system.
Compmtitive proposals must be evaluated solely on the basis of factors
specified in the solicitation. Computer Data Systems, Inc., B-223921,
Dec. 9, 1986, 86-2 CPD P 659. Moreover, an agency's evaluation of
proposals is a judgmental process, which our Office will not question
absent a showing that it acted arbitrarily or in violation of
procurement statutes or regulations. Orange State Consultants,
B-223030, July 15, 1986, 86-2 CPD P 69. The protester has not shown
that the evaluation here was improper.
The RFP placed great emphasis on minimizing technical risk and on
assuring that the system would perform as specified. Although the
record indicates that the Army's evaluators were impressed with Lenzar's
proposed design, Contraves-Goerz's proposal was rated higher because its
system had been produce before, while Lenzar's system had not been
marketed in the proposed configuration. Further, the evaluators found
that Contraves-Goerz's more conventional design would perform much
better in low light conditions, a conclusion that Lenzar has not
disputed. In the circumstances, we have no basis upon which to question
the reasonableness of the Army's technical evalvation.
Lenzar's argument that Contraves-Goerz is a foreign owned firm and
thus should not have gotten the award is likewise without merit. The
Buy American Act, 41 U.S.C. Secs. 10(a)10 (d) (1982), does not prohibit
awards to foreign firms or the procurement of foreign products, but
merely establishes a preference evaluation system favoring domestic
products. California Mobile Communications, B-224398, Aug. 28, 1986,
86-2 CPD P 244. In any event, Contraves-Goerz certified that it will
furnish domestic products under its contract, and the Army, therefore,
properly concluded that the Buy American preference did not apply. See
Spectrum Leasing Corp., B-218323.3 et al., July 11, 1986, 86-2 CPD P 56.
Finally, we consider Lenzar's complaint that the Army failed to
properly evaluate its price. According to Lenzar, it advised the Army
at the time it submitted its cost and pricing data that its costs would
be reduced if it were successful in obtaining a second contract for
which it was then competing. Subsequently, well after the closing date
for receipt of best and final offers, Lenzar informed the agency that it
had been awarded the second contract. In Lenzar's view, the Army's
evaluation of its proposed price should have taken into account the new
lower cost at which it could have performed the work.
The fact that Lenzar's costs may have declined does not establish
what portion of the savings it would have been willing to pass on to the
government under this solicitation for a fixed-price contract. More
important, there is no evidence in this record that Lenzar ever
submitted a written proposal reducing its prices. Moreover, the Army
could not have considered such a price reduction had one been submitted
after the date for receipt of best and final offers unless discussions
were reopened, allowing Contraves-Goerz to also amend its proposal,
since the protester was not already in line for award. Merret Square,
Inc., B-220526.2, Mar. 17, 1986, 86-1 CPD P 259.
The protest is dismissed in part and denied in part.
Harry R. Van Cleve
General Counsel
1/ Contraves-Goerz submitted four proposals; Lenzar submitted one.
Throughout, we refer only to the Contraves-Goerz proposal that was
selected for award.
Matter of: KAL Maintenance, Inc.
File: B-225429
Date: February 24, 1987
Federal Acquisition Regulation, 48 C.F.R. Sec. 14.404-1(e) (2) does
not prohibit the reinstatement of a solicitation and the award of a
contract thereunder where the solicitation was erroneously canceled; an
award there under would serve the government's needs; and a
resolicitation would only prejudice those bidders whose prices have been
exposed and afford the protester an opportunity to improve upon its
eighth-ranked competitive position.
KAL Maintenance, Inc. (KAL) protests the award of a contract to
All-Star Maintenance, Inc. (ASMI) under invitation for bids (IFB) No.
F22608-86-B-0010. This IFB was issued by the Department of the Air
Force to obtain maintenance services for military family housing units
at Columbus Air Force Base, Mississippi. KAL contends that the Air
Force acted improperly in reinstating the solicitation after
cancellation. We deny the protest.
The protested solicitation was issued on June 10, 1986; bids were
opened on August 26. After bid opening, ASMI was found to be the low
bidder; KAL was the eighth low bidder. 1/
Subsequent to bid opening, but prior to award, the Air Force's
Contract Review Committee alerted the contracting officer to the fact
that the IFB did not incorporate the provisions of the Davis-Bacon Act.
The Committee stated that, without incorporating that Act's provisions,
the IFB was defective and would result in a flawed contract, and advised
the contracting officer to cancel the solicitation. Based on this
advice, and under the authority of the Federal Acquisition Regulation
(FAR), 48 C.F.R. Sec. 14.404-1(c)(9) (1986), 2/ the contracting officer
canceled the solicitation on September 25, 1986.
On October 2, the Air Force obtained additional information which
indicated that the Davis-Bacon Act did not, in fact, apply to this
procurement; therefore, it concluded that the cancellation had been
improper. Accordingly, the solicitation was reinstated and the contract
was awarded to ASMI on October 21.
The protester does not dispute that the IFB was canceled in error.
It simply argues that once an IFB has been canceled "in the public's
interest" there is no alternative but to conduct a new competition
because the FAR, 48 C.F.R. Sec. 14.404-1(e) (2), provides: "If the
-IFB- has been cancelled for the reasons specified in paragraphs (c) .
. . (9) . . . the contracting officer shall proceed with a new
acquisition."
Counsel for the protester made the identical argument before us in
ADAK Communications Systems, Inc., B-222546, July 24, 1986, 86-2 C.P.D.
P 103, and for the same reasons we rejected that contention in ADAK, we
reject it here.
Although, as the protester points out, the FAR, 48 C.F.R. Sec.
14.404-1 (e) (2), does not expressly state that it applies only to IFB's
which have been canceled properly, we think it logical to apply it only
in that context, because the provision's purpose is to prescribe a
second competition where the results of the first have been invalidated
by some defect. It permits the government to set things aright--through
revising the specifications, for example--and obtain competation based
upon an accurate statement of the government's needs. Here, the
original IFB in fact was not defective (although for some time after bid
opening the Air Force erroneously thought that it was) and it did result
in competition from 17 bidders, including the protester. Since an award
under the original IFB would serve the government's needs, a second
competition would only prejudice those bidders whose prices have been
exposed and afford the protester, the eighth low bidder, an opportunity
to improve its competitive position. See ADAK, supra; Woodson
Construction Co., Inc.--Reconsideration, B-221530.2, May 23, 1986, 86-1
C.P.D. P 483; Suburban Industrial Maintenance Co., B-188179, June 28,
1977, 77-1 C.P.D. P 459. Reinstatement therefore is necessary to
protect the integrity of the competitive procurement system by avoiding
an unfair bidding situation after the bids were made public. See ADAK,
supra; Lanier Business Products, Inc., B-203977, Feb. 23, 1982, 82-1
C.P.D. P 159. The Air Force's reinstatement of the solicitation and
award to ASMI thereunder was proper and the protest is denied.
Harry R. Van Cleve
General Counsel
1/ At the outset, the Air Force argues that KAL is not an interested
party due to its comparatively high bid. We do not agree since, if the
protest were sustained, KAL would have an opportunity to bid again and
thus has a sufficient economic interest in the outcome. See 3M
Deutschland GmbH, B-221841, May 20, 1986, 86-1 C.P.D. P 473.
2/ This section states:
"(c) Invitations may be cancelled and all bids rejected before
award but after opening when, consistent with paragraph (a) (1)
above, the agency head determines in writing that--
"(9) For -reasons other than those listed in subsections 1-81,
cancellation is clearly in the public's interest."
Matter of: Detroit-Armor Corporation
File: B-225422
Date: February 26, 1987
1. Protester is not required to file its protest within 10 days of
contract award notice, where it diligently pursues award details through
a debriefing and a Freedom of Information Act request. Protest filed
within 10 days of debriefing is timely.
2. The protester and contracting agency dispute whether there was a
preaward contact to confirm the protester's proposal. If no contact was
made, as the protester contends, since the solicitation permitted award
on an initial proposal basis, the agency properly rejected protester's
low offer which did not include a material component of the solicited
target system. If there was contact, as the agency maintains, it did
not constitute discussions because the protester was not afforded an
opportunity to revise or modify its proposal. Therefore, award was
properly made on the basis of initial proposals after a determination
that the offered price was fair and reasonable.
Detroit-Armor Corporation (Detroit-Armor) protests the award of a
firm-fixed-price contract to Caswell International Corporation (Caswell)
under request for proposals (RFP) No. USSS86-29 issued by the U.S.
Secret Service (Secret Service) for the removal and replacement of
existing target mechanisms and the target control system at the
Beltsville Judgemental Range, Maryland. Detroit-Armor contends that its
low offer was improperly rejected in favor of Caswell's proposal which
did not comply with certain specification requirements; that the Secret
Service did not allow Detroit-Armor to view Caswell's proposal at the
debriefing; and that since the RFP's specifications were based on
Detroit-Armor's product specifications and its price was lower, the
contract should have been awarded to Detroit-Armor or all offers should
have been rejected and the requirement resolicited.
The protest is denied.
The RFP required the contractor to furnish three items: a compact,
table-top master control console, target mechanisms, and a hand-held
module capable of controlling target mechanisms. The RFP also required
that the manufacturer furnishing the equipment have no less than 5 years
of experience in the fabrication and installation of target equipment
and that the offeror submit with its proposal, a list of five
representative completed tarqet equipment installations in continuous
use for 5 years. The RFP's evaluation factors for award advised that
contract award would be made in accordance with the Federal Acquisition
Requlation (FAR), 48 C.F.R. Sec. 52.215-16 (1986), under which award may
be made on the basis of initial offers without discussions.
Detroit-Armor's low proposal was priced at $64,771, and Caswell's
second low proposal was priced at $94,400. The technical panel's report
noted that Detroit-Armor's proposal offered only two of the three
required components--target mechanisms and a portable radio command
computer console with an attached hand-held console; a fixed and
installed master control console was not included. According to the
agency, during the technical evaluation of the proposals, DetroitArmor
was contacted to confirm that a separate master control console would
not be provided. The panel report states that an unidentified
Detroit-Armor representative advised that only the portable console,
which could be placed on a table, would be provided and that a separate
master control console would not he provided. The technical evaluation
panel concluded that all three main components of the target system were
necessary for proper operation at the intended location and determined
that Detroit-Armor's proposal was technically unacceptable. The
contracting officer (CO) determined that Caswell's proposal met the
minimum needs of the government at a price that was fair and reasonable
based upon a comparison of prices received in response to the
solicitation and a value analysis performed by technical personnel. The
contract was awarded to Caswell on the basis of initial offers received
on September 29, 1986. Detroit-Armor received formal notification of
the contract award on October 3, 1986. After a debriefing held on
October 21, 1986, Detroit-Armor filed its protest on October 23, 1986.
The Secret Service contends that Detroit-Armor's protest is untimely
under our Bid Protest Regulations, 4 C.F.R. Sec. 21.2(a) (2) (1986),
which require that a protest be filed not later than 10 working days
after the basis for protest is known or should have been known. The
Secret Service states that Detroit-Armor knew on October 3, 1986, that
the contract had been awarded to Caswell and was required to file its
protest within 10 working days. Rather than filing a protest, the
Secret Service states that Detroit-Armor called the CO 5 days after
award notification to determine whether there was a typographical error
in its proposal. After being advised on October 9, 1986, that there was
no typographical error, Detroit-Armor requested a debriefing that was
held on October 21, 1986. During this period, Detroit-Armor also
requested certain pertinent procurement documents, including a copy of
Caswell's contract, under the Freedom of Information Act (FOIA). (The
documents were received after the protest was filed.) Detroit-Armor
contends that as a result of the debriefing, it concluded that
irregularities had occurred during the procurement and that its October
23 filing is therefore timely.
The October 3 notification merely advised Detroit-Armor that an award
had been made to Caswell and that Detroit-Armor's proposal took
exception to the specifications. Detroit-Armor diligently proceeded to
obtain the award details. In these circumstances, we conclude that the
protest filed within 10 days of the debriefing was timely filed.
Raytheon Support Servs. Co., B-219389.2, Oct. 31, 1985, 85-2 CPD P 495.
Detroit-Armor concedes that, although it intended to provide a master
control console, it inadvertently failed to offer the console in its
proposal. The protester contends that the Secret Service knew that
Detroit-Armor had and could provide this equipment since it based the
specifications on DetroitArmor's specifications for the master control
console. The protester denies that any of its representatives were
contacted or, if contacted would have advised the agency that the
omitted component would not be supplied. If there were any questions in
this regard, the protester contends that the Sales Manager who signed
the proposal should have been contacted, not an unidentified
representative.
The dispute surrounding the preaward contact with DetroitArmor does
not affect our conclusion that the agency properly rejected the
protester's proposal. If no contact was made, since the RFP permitted
award on an initial proposal basis an agency may properly reject a low
offer which does not include a material component of a solicited system.
Proffitt and Fowler, B-219917, Nov. 19, 1985, 85-2 CPD P 566. If
there was contact, we fail to see how it constituted discussions as
Detroit-Armor contends. Whoever was contacted apparently was not
afforded an opportunity to revise or modify its proposal, but merely to
confirm the proposal contents. In any event, no matter who was called,
if anyone, the agency would not be precluded from awarding on an initial
proposal basis merely because an unacceptable lower offer could be made
acceptable through discussions. Marvin Eng. Co., Inc., B-214889, July
3, 1984, 84-2 CPD P 15. Consequently, the Secret Service properly
awarded the contract on the basis of initial proposals.
Detroit-Armor also contends that Caswell failed to provide operating
manuals and that Caswell could not have met the RFP requirement to
provide with the proposal a list of five prior representative target
equipment installations. With respect to the operating manuals, the RFP
did not require that manuals be submitted with the proposals. In this
regard, we note that whether Caswell ultimately provides the operating
manuals in performing the contract is a matter of contract
administration and is not for consideration under our bid protest
function. Motorola Communications & Elec., Inc., B-223715, Sept. 19,
1986, 86-2 CPD P 325. Concerning the second basis of protest, Caswell
provided a list of five installations that was reviewed by the technical
evaluation panel and found to be satisfactory. In its comments on the
agency report, Detroit-Armor contends that Caswell's list does not
include installations using the type of equipment required by the RFP.
The specifications only required a list of five representative completed
target equipment installations. Contrary to the protester's contention,
the RFP did not require that the installed target equipment be the same
type of equipment specified in the RFP. Detroit-Armor's contention
therefore lacks merit.
The protester further contends that the Secret Service did not allow
it to see Caswell's proposal at the debriefing. In response, the Secret
Service states that the debriefing was held in accordance with the FAR,
48 C.F.R. Sec. 15.1003, under which debriefing information need only
include the government's evaluation of the significant weak or deficient
factors in a proposal, and need not include a point-by-point comparison
of offerors' proposals. Although the FAR provision does not require
contracting agencies to provide unsuccessful offerors with copies of
competitors' proposals, the protester subsequently obtained a copy of
Caswell's proposal through a FOIA request. Therefore, we see no
prejudice in this regard.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Pacific Sky Supply, Inc.--Award of Costs
File: B-225420.2
Date: August 17, 1987
Award of costs of filing and pursuing protest, including attorney's
fees is qranted for issues on which protester prevailed in initial
decision, where protester has been excluded unreasonably from
competition and our original recommendation, as reasonably implemented
by agency, does not in fact result in protester having opportunity to
compete for award.
By this decision, we award Pacific Sky Supply, Inc., its costs of
filing and pursuing its protest, including attorney's fees.
Pacific Sky Supply, Inc., initially protested to our Office in
October, 1986, the Department of the Air Force's award of various line
items to United Technologies Corporation, Hamilton Standard Division,
under solicitation No. FD206086-55538. The contract is for the
acquisition of spare parts for the C-130 aircraft. Pacific Sky argued
in its original protest that the Air Force had unreasonably excluded it
from competing for award of various line items contained in the
solicitation by awarding a sole-source contract to Hamilton Standard
under 10 U.S.C. Sec. 2304(c) (1) (Supp. III 1985), without first
adequately synopsizing the proposed contract award as required by law.
Specifically, Pacific Sky complained that 15 line items had been awarded
to Hamilton Standard but that adequate notice had been published for
only two of those items. The protester also specifically requested that
we award it the costs of filing and pursuing its protest, including
attorney's fees.
In our original decision, we held that Pacific Sky was unreasonably
excluded from an opportunity to compete for the 13 contract line items
which were not properly synopsized. Pacific Sky Suppply, Inc.,
B-225420, Feb. 24, 1987, 87-1 CPD P 206. Our recommendation in that
decision stated in pertinent part:
". . . we are recommending . . . that, to the extent consistent
with agency needs, . . . the line items ... be resynopsized
and Hamilton Standard's contract with respect to those items be
terminated for the convenience of the government if public
response to the synopsis now indicates that a competitive
procurement should be conducted."
By letter dated May 6, 1987, the Air Force has informed our Office
that, due to the urgency of the agency's need for the requirements under
the 13 contract line items, they will not at this time resynopsize the
requirements. Thus, the agency will not provide Pacific Sky or any
other prospective contractor an opportunity to express an interest in
the procurement. We note that the agency also stated that it is in full
compliance with our recommendation since that recommendation provides
that its implementation should be "consistent with agency needs."
We have no basis to object to the agency's implementation of our
recommendation in light of the urgency of its needs for the contract
requirements; an urgency determination has been properly made under 10
U.S.C. Sec. 2304(c) (2) (Supp. III 1985), and the Air Force documented
this determination. However, we believe that circumstances warrant the
award of the costs of filing and pursuing the protest, including
attorney's fees, to Pacific Sky. Our Bid Protest Regulations, 4 C.F.R.
Sec. 21.6(e) (1987), permit the recovery of protest costs where the
contracting agency has unreasonably excluded the protester from the
procurement, except where this Office recommends that the contract be
awarded to the protester and the protester receives award. Where,
however, a protester has been unreasonably excluded from the competition
because of an improper sole-source determination, we have found the
award of costs appropriate. The Aydin Corporation; Department of the
Army--Request for Reconsideration, B-224908.3, et al., May 19, 1987,
87-1 CPD P 527. Accordingly, we modify our original decision to include
an award of the costs of filing and pursuing its protest, including
attorney's fees, to Pacific Sky. We limit the award of costs to those
costs incurred in protesting the 13 line items on which Pacific Sky
prevailed in our initial decision, since we expressly denied the protest
as to the two line items which were properly awarded under 10 U.S.C.
Sec. 2304(c) (2) (Supp. III 1985). Interface Flooring Systems,
Inc.--Claim for Attorney's Fees, B-225439.5, July 20, 1987, 87-2 CPD P .
Therefore, we recommend that the protester's entitlement to protest
costs should be reduced accordingly. Pacific Sky should submit its
claim for reimbursement of these costs directly to the Air Force, and if
the parties cannot reach agreement within a reasonable time, this Office
will determine the appropriate amount to be paid. 4 C.F.R. Sec.
21.6(f).
Comptroller General
of the United States
Matter of: Pacific Sky Supply, Inc.
File: B-225420
Date: February 24, 1987
1. An agency violated the statutory requirement for adequate
presolicitation notice of proposed contract actions by publishing a
synopsis of its intent to issue a solesource solicitation which only
identified two out of 15 items to be acquired and gave no indication
that there were other items beyond the two described.
2. The sole-source award of certain items to the only known approved
source was proper under the "compelling urgency" exception of 10 U.S.C.
Sec. 2304(c)(2) where the items were indeed critical and where the
agency had neither the data needed to procure the items competitively
nor the time necessary to qualify a new source.
Pacific Sky Supply, Inc. (Pacific) protests the award of a contract
to United Technologies Corporation, Hamilton Standard Division (Hamilton
Standard), under certain solicitations issued by the Department of the
Air Force. The procurement was for the acquisition of spare parts
applicable to the C-130 aircraft and was awarded to Hamilton Standard on
a sole-source basis. Pacific complains that the Air Force failed to
synopsize properly the contemplated acquisition and thereby deprived it
of an effective opportunity to compete. We sustain the protest in part
and deny it in part.
The Air Force published notice in the June 26, 1986, Commerce
Business Daily (CBD) of its intent to issue solicitation No.
FD2060-86-55538 (No. -55538) to Hamilton Standard for the acquisition of
varying quantities of three specific parts items, identified by National
Stock Number and part number, for use in the C-130 aircraft. The CBD
notice made no reference to any other items to be procured.
The notice provided that a sole-source award to Hamilton Standard was
contemplated under the authority of 10 U.S.C. Sec. 2304(c) (1) (Supp.
III 1985), which provides, as pertinent here, that a military agency may
use other than competitive procedures when the needed property or
services are available from only one responsible source and no other
property or services will satisfy the agency's needs. 1/ This statutory
provision is implemented by the Federal Acquisition Regulation (FAR), 48
C.F.R. Sec. 6.302-1 (1986).
Because the CBD notice synopsized a proposed sole-source action, it
specifically referenced "Note 22," which, as set forth in the Department
of Defense Supplement to the Federal Acquisition Regulation (DFARS), 48
C.F.R. Sec. 205.207(d)(70) (1985), advises potential offerors that,
notwithstanding the government's intent to solicit and negotiate with
only one source, interested firms may identify their interest and
capability to respond to the requirement or may submit proposals which
will he considered by the government for purposes of determining whether
to conduct a competitive procurement if received within 45 days of the
CBD synopsis.
On October 14, the Air Force synopsized in the CBD the award of a
contract to Hamilton Standard for three identified parts items "and 23
other line items" applicable to the C-130 aircraft. Upon Pacific's
request, the Air Force advised the firm that the requirement had been
synopsized on June 26 as part of solicitation No. -55538. Pacific then
protested the award on the ground that the Air Force failed to synopsize
properly all of the items which it intended to award on a sole-source
basis, thus precluding Pacific from a reasonable opportunity to compete
for those items which it could supply.
The administrative record as developed in response to the protest has
established that the sole-source award to Hamilton Standard for the 26
items was actually a consolidation of five different requirements. In
this regard, contract items 0001 and 0002 were awarded to the firm under
the authority of 10 U.S.C. Sec. 2304(c)(2), as implemented by the FAR,
48 C.F.R. Sec. 6.302-2, which provides that an agency may use other than
competitive procedures when the agency's need for the supplies or
services is of such an "unusual and compelling urgency" that the United
States would be seriously injured unless the agency is permitted to
limit the number of sources from which it solicits offers. Here, the
Air Force's justification for invoking 10 U.S.C. Sec. 2304(c) (2) was
that both items 0001 and 0002 were urgently needed to avoid critical
"work stoppage" and "stock out" situations, Hamilton Standard being the
only qualified supplier. These two sole-source acquisitions were not
synopsized in the CBD in accordance with the FAR, 48 C.F.R. Sec.
5.202(a) (2), which excuses presolicitation notice of proposed contract
actions under the "compelling urgency" conditions of 10 U.S.C. Sec.
2304(c) (2) if compliance with the prescribed CBD publication time
periods (see the FAR, 48 C.F.R. Sec. 5.203) would seriously injure the
government.
Contract line items 0003 through 0017 were in fact part of
solicitation No. -55538, which had been synopsized on June 26. Of these
15 items, only items 0006 and 0015 were identified in that CBD notice.
(The third item identified in the synopsis apparently was not part of
solicitation No. -55538 when issued and was not awarded.)
The remaining items awarded, 0018 through 0024, were part of two
other solicitations which Pacific does not assert were improperly
synopsized.
Accordingly, Pacific's protest against the award to Hamilton Standard
principally concerns items 0003 through 0017, only two of which were
identified in the June 26 CBD notice. Pacific complains that the
agency's failure to describe the remaining 13 items or to give any
indication that more items than the two identified were part of the
acquisition precluded it from requesting a copy of the solicitation and
submitting an offer for those items it had the capability to furnish,
thus unreasonably excluding it from the procurement.
The firm also challenges the award of contract line items 0001 and
0002 on the ground that the agency was required to solicit other offers
before proceeding to award the items on a sole-source basis under the
"compelling urgency" conditions of 10 U.S.C. Sec. 2304(c) (2). Pacific
asserts that, especially with regard to item 0001, the Air Force had
knowledge that numerous potential sources existed. The firm's argument
is founded upon 10 U.S.C. Sec. 2304(e), which in part provides that an
agency proceeding to use other than competitive procedures under 10
U.S.C. Sec. 2304(c) (2) nevertheless "shall request offers from as many
potential sources as is practicable under the circumstances."
We agree that items 0003 through 0017 (excepting items 0006 and 0015)
were not properly synopsized. The Small Business Act, as amended, 15
U.S.C. Sec. 637(e) (1) (A) (1982), provides that an agency intending to
solicit hids or proposals for a contract for property or services
expected to exceed $10,000 shall furnish notice of the proposed
solicitation to the Secretary of Commerce for publication in the CBD.
It is mandatory that the CBD notice include "an accurate description" of
the property or services to be acquired, including, as appropriate, the
agency's nomenclature, National Stock Number or other part number, and a
brief description of the item or similar information to assist a
prospective offeror in making "an informed business judgment as to
whether a copy of the solicitation should be requested." 15 U.S.C. Sec.
637(f) (1). These statutory provisions are implemented by the FAR, 48
C.F.R. Secs. 5.201 and 5.207.
In a recent case involving the parallel presolicitation notice
requirements of the Competition in Contracting Act of 1984 (CICA), 41
U.S.C. Sec. 416, we held that an agency's failure to synopsize
adequately its acquisition needs was a failure to conform to the CICA's
overriding mandate that "full and open competition" be obtained.
Reference Technology Inc., B-222487, Aug. 4, 1986, 86-2 CPD P 141.
There, we found that the proposed contract had been improperly
synopsized because the CBD notice, while identifying various microfilm
items, had failed to mention that the agency was also acquiring optical
disk equipment, a requirement which formed part of the resulting
solicitation. We concluded that the protester, a manufacturer of such
equipment, was prejudiced by the agency's failure to provide the
statutorily required notice of its requirement, and that full and open
competition, in consequence, had not been obtained. Id. at 2.
We reach the same result here. Because the June 26 CBD notice only
referenced two of the 15 parts items which comprised the resulting
solicitation issued to Hamilton Standard on a sole-source basis, it
clearly did not conform to the "accurate description" requirement of 15
U.S.C. Sec. 637(f) (1), supra. Although the Air Force contends that
Pacific was not prejudiced by this lack of adequate notice because the
firm was not an approved source for the items, we believe that the
agency's argument misses the point.
The fundamental purpose of the presolicitation notice requirement is
to improve small business access to acquisition information and thereby
enhance competition by identifying contracting and subcontracting
opportunities. FAR, 48 C.F.R. Sec. 5.201 (c); see also Morris
Guralnick Assocs., Inc., B-214751.2, Dec. 3, 1984, 84-2 CPD P 597.
Therefore, it is immaterial that Pacific was not an approved source at
the time the CBD notice was published. As already indicated, firms
interested in an acquisition are to be given the opportunity to submit
an offer even though the agency contemplates the making of a sole-source
award. DFARS, 48 C.F.R. Sec. 205.207(d)(70), supra; see also the FAR,
48 C.F.R. Sec. 5.207(e) (3). It is significant to note that the FAR
provides no exception to the statutory notice requirement for a
prospective sole-source award to the only presently approved source
under the authority of 10 U.S.C. Sec. 2304(c)(1), supra. Cf. the FAR,
48 C.F.R. Secs. 5.202(a)(1)(12) (which delineate the specific
exceptions to the notice requirement).
The Air Force also urges that its own internal regulation allows it
to limit the number of items that are described in the CBD notice. In
this regard, the Air Force Supplement to the Federal Acquisition
Regulation (AF FAR Sup), Sec. 5.207(b) (4) (iii), Apr. 1, 1984,
provides that the agency need list in the synopsis the stock numbers of
only the six items of highest value if the contract is for a large
number of items. The Air Force frankly concedes that, because of a
"clerical error," the June 26 CBD notice listed only the three items of
highest value, but the agency nevertheless contends that this
description was sufficient to put Pacific on notice of the overall
nature of the acquisition. The Air Force notes that Pacific could have
requested and obtained a copy of the solicitation, but chose not to do
so.
We find no merit in the agency's argument. The statutory
presolicitation notice provisions make it clear that their fundamental
purpose of improving access to procurement information so as to enhance
competition is not served by a notice which gives only a limited or
vague indication of the overall nature of the acquisition. Although we
appreciate that an acquisition such as that in issue here may involve a
large number of items, we do not believe that the identification of only
a few of those items, even if of the hiqhest dollar value, constitutes
"an accurate description" of the contemplated acquisition or serves to
assist a propective offer in making "an informed business judgment" as
to whether it should request a copy of the solicitation. We agree with
Pacific that a prospective offeror should not bear the risk of relying
upon a poorly drafted notice when deciding whether or not to compete.
Hence, we conclude that AF FAR Sup, Sec. 5.207(b)(4)(iii), is
inconsistent with 15 U.S.C. Sec. 637(f) (1). At a minimum, any notice
identifying only the six highest value items should also state the
number and nature of the other items being acquired. In any event, even
under the Air Force's own regulation, the June 26 CBD notice was
inadequate since it listed only three parts items rather than the
prescribed six.
Therefore, because the CBD notice of June 26 was legally insufficient
to convey the agency's actual requirements, we conclude that Pacific was
unreasonably excluded from an opportunity to compete for contract line
items 0003 through 0017 (excepting items 0006 and 0015, which were
properly described). Reference Technology Inc., B-222487, supra. By
separate letter of today, we are recommending to the Secretary of the
Air Force that, to the extent consistent with agency needs, items
0003-0005, 0007-0014, and 0016 and 0017 be resynopsized and Hamilton
Standard's contract with respect to those items be terminated for the
convenience of the government if public response to the synopsis now
indicates that a competitive procurement should be conducted. We
further recommend that the agency consider revising AF FAR Sup, Sec.
5.207(b) (4) (iii), so that it more closely conforms with the statutory
presolicitation notice requirements.
We do not allow Pacific its claimed costs of filing and pursuing the
protest, including attorney's fees. Since we have recommended that the
items in question be resynopsized, Pacific will now receive a full and
fair opportunity to express any interest it may have in competing for
them. Accordingly, the recovery of protest costs would be
inappropriate. See The Hamilton Tool Co., B-218260.4, Aug. 6, 1985,
85-2 CPD P 132.
To the extent Pacific has challenged the award of line items 0001 and
0002 to Hamilton Standard on a sole-source basis, we find nothing to
indicate that the agency's actions were objectionable. As already
indicated, 10 U.S.C. Sec. 2304(c) (2) allows an award to be made on a
sole-source basis when the requirement is of a "compelling urgency."
Although the firm contends that the Air Force violated 10 U.S.C. Sec.
2304(e) by not requesting offers from other potential sources, the
record does not show that such requests would have been "practicable in
the circumstances." Id.
We conclude from our review that the immediate acquisition of both
items was critical to the activity's mission. For example, with regard
to item 0001, the Air Force states that "-a- work stoopage condition
exists on repair of an end item in the... Propeller Shop due to the lack
of this component." As to item 0002, the Air Force states that there
was"a rapidly approaching stock out position of this item."
The fact that numerous potential sources had indicated an interest in
supplying the predecessor part number for item 0001, which had been
sought competitively, does not compel us to conclude, as urged by
Pacific, that the agency in the circumstances was required to solicit
from these sources before proceeding under 10 U.S.C. Sec. 2304(c) (2) to
award the item to Hamilton Standard as the only approved source. The
record shows that item 0001 was changed to a new part number for which
there was a lack of data in the Air Force's possession, and that the
part had been upgraded to an emergency requirement. We have held that
an agency's decision to award a sole-source contract to the only known
qualified source is proper where the agency has neither the data needed
to conduct a competitive procurement nor the time necessary to qualify a
new source, which appears to be the case here. See Aerospace
Engineering and Support, Inc., B-222834, July 7, 1986, 86-2 CPD P 38.
We note that Pacific has made no persuasive argument that it could have
met the agency's urgent need for either item 0001 or item 0002. See
Gentex Corp., B-221340, Feb. 25, 1986, 86-1 CPD P 195. Hence, we
conclude that the agency's sole-source actions concerning these two
items were not improper.
The protest is sustained in part and denied in part.
Comptroller General
of the United States
1/ The Air Force invoked the authority of 10 U.S.C. Sec. 2304(c) (1)
here on the ground that the government had insufficient data on the
needed items since the data was held by Hamilton Standard as proprietary
to the firm. See the Federal Acquisition Regulation, 48 C.F.R. Sec.
6.302--1(b)(2) (1986).
Matter of: Minnco, Inc.
File: B-225419.3, B-228095
Date: August 25, 1987
1. General Accounting Office does not consider allegations of
antitrust violations.
2. General Accounting Office will not review a contracting agency's
decision that a firm is responsible except in limited circumstances.
3. Whether or not a firm actually performs in compliance with
contract requirements is a matter of contract administration, which the
General Accounting Office does not review as part of its bid protest
function.
Minnco, Inc., protests the Defense Logistics Agency's (DLA)
acceptance of the bid submitted by Speakman Co. under invitation for
bids No. DLA700-86-B-1017, and of Speakman's offer in response to
request for proposals No. DLA700-87-R0317. The solicitations are for
two separate requirements for shower assemblies.
We dismiss the protests.
Minnco first contends that the prices Speakman submitted reflect
predatory price cutting in violation of the antitrust laws. Such
matters, however, are appropriate for resolution by the Department of
Justice, not under our Office's bid protest function. See Baltimore
Electronics Associates, Inc., B-217499, Jan. 16, 1985, 85-1 C.P.D. P 46.
Minnco next argues that Speakman lacks business integrity and
therefore should be found nonresponsible. We will not consider this
issue either. Our Office will not review a contracting agency's
decision that a firm is responsible absent a showing that the decision
was made fraudulently or in bad faith, or that definitive responsibility
criteria in the solicitation were not met. 4 C.F.R. Sec. 21.3(f) (5)
(1987). Neither exception is involved here.
Minnco's final argument is that Speakman's shower system does not
meet the minimum mixing valve flow rate required by the specifications.
The bid Speakman submitted in response to DLA's invitation for bids
was responsive, that is, the firm did not take any exception in the bid
to any of the specifications. As to the other procurement, the record
includes a letter from DLA to Minnco stating that Speakman has confirmed
in writing that it will manufacture items that meet the flow rate
specifications. DLA evidently has decided that Speakman is capable of
furnishing items that in fact conform, and the government's acceptance
of the company's bid and offer will obligate Speakman to supply
compliant shower assemblies. Dura Electric Fluorescent Starter
Division, B-225323, Mar. 2, 1987, 87-1 C.P.D. P 234; Motorola
Communications and Electronics, Inc., B-225613, Jan. 27, 1987, 87-1
C.P.D. P 91. Whether Speakman actually does so is a matter of contract
administration, which our Office does not review. See Martin
Advertising Agency, Inc., B-225347, Mar. 13, 1987, 87-1 C.P.D. P 285.
The protests are dismissed.
Robert M. Strong
Deputy Associate
General Counsel
Matter of: Bencor-Petrifond-Casagrande
File: B-225408.2, B-225827
Date: April 10, 1987
Proposal preparation costs may be recovered where protester, who had
substantial chance of receiving the award, was unreasonably excluded
from consideration and no other remedy is appropriate.
The Bureau of Reclamation, Department of the Interior, requests
approval of an agreement between the Bureau and Bencor-Petrifond, a
joint venture, settling a protest, B-225827, by Bencor-Petrifond and
suggesting that our recommendation for corrective action in
Bencor-PetrifondCasagrande, B-225408, Mar. 6, 1987, 97-1 C.P.D. P ,
involving another joint venture, is not practicable. We have treated
the request for approval as a request for reconsideration of our
recommendation, which we now modify.
In Bencor-Petrifond-Casagrande, B-225408, supra, we sustained a
protest against the Bureau's award of a contract, without discussions,
to Soletanche & Rodio under request for proposals (RFP) No.
6-SP-40-03900. The contract was for the fixed-price-construction of a
concrete diaphragm wall in an abutment adjoining the Navajo Dam on the
Colorado River storage project. We recommended that the Bureau open
discussions and, if the evaluation of the resulting best and final
offers established that the award of the contract to an offeror other
than Soletanche was appropriate, that the Bureau terminate the contract
and make another award.
On March 16, 1987, Bencor-Petrifond filed a protest against another
Bureau of Reclamation procurement under RFP No. 7-SP40-04900/DC-7710
for similar work at the Fontenelle Dam, Wyoming. This latter protest is
premised, in part, on the contention that the Bureau provided the RFP to
BencorPetrifond too late for Bencor-Petrifond to prepare its proposal.
As part of the parties' proposed settlement, the Bureau and
Bencor-Petrifond agree that termination of the existing contract on the
Navajo Dam is not practicable, and BencorPetrifond agrees to accept its
proposal preparation costs as an alternative remedy. The Bureau has
extended the closing date on the Fontenelle Dam procurement to allow
BencorPetrifond sufficient time to prepare its proposal.
BencorPetrifond has agreed to withdraw the latter protest if this
settlement is approved.
We allow the recovery of proposal preparation costs where the
protester had a substantial chance of receiving the award but was
unreasonably excluded from the competition and none of the remedies
listed in our Bid Protest Regulations at 4 C.F.R. Sec. 21.6(a)(2)-(5)
(1986) is appropriate. Our recommendation in Bencor-Petrifond
Casagrande, B-225408, supra, that the Bureau reopen the competition was
based on the record then before us, which provided no evidence that such
action would not be appropriate. This recommendation precluded award of
proposal preparation costs.
The proposed settlement, however, reflects Bencor-Petrifond's
agreement with the Bureau that the Navajo Dam project involves the
safety of the dam and Bencor-Petrifond's concurrence that it would be
impracticable for the Bureau to interrupt performance by terminating the
contract and reawarding to another offeror. Absent evidence to the
contrary, we have no basis to question this accord and conclude,
therefore, that it would be impracticable for the Bureau to reopen the
competition.
As no other corrective action is appropriate, and since we believe
that Bencor-Petrifond would have had a substantial chance of award if
the Bureau had held discussions in this procurement, Bencor-Petrifond
may be allowed the recovery of its proposal preparation costs; the
prior recommendation therefore is modified in that regard. The protest
on the Fontenelle Dam project is closed without further action.
Comptroller General
of the United States
Matter of: Bencor - Petrifond - Casagrande
File: B-225408
Date: March 6, 1987
Determination, in the face of unresolved uncertainties in proposals,
that contract award for $2 million more than protester's offer and $4
million more than agency's estimate satisfies requirement of Competition
in Contracting Act that contracts awarded on basis of initial proposals
be at lowest overall cost to the government is unreasonable.
Bencor - Petrifond - Casagrande (Bencor), a joint venture, protests
the Bureau of Reclamation's award of a contract to Soletanche & Rodio
under request for proposals (RFP) No. 6-SP-40-03900. We sustain the
protest.
The RFP was for the fixed-price construction of a concrete "diaphragm
wall" in an abutment adjoining the Navajo dam on the Colorado River
storage project. According to the RFP, the diaphragm wall will act as a
barrier to seepage that is endangering the abutment. The RFP identified
the four major technical factors that would be evaluated as, in order of
importance: (1) concrete diaphragm wall construction, (2) key
personnel, (3) corporate or company experience, and (4) safety.
The RFP instructed offerors to provide complete and detailed
technical proposals. With regard to key personnel, the RFP stated that
offerors should provide detailed resumes for the personnel in
specifically-identified key positions, and provide narrative
descriptions of the structure and function of job site and home office
management. The technical evaluation was worth 70 points; cost was
worth 30 points. The RFP cautioned offerors that the Bureau might award
the contract on the basis of initial proposals.
The Bureau's technical evaluation report noted deficiencies or
uncertainties in all of the proposals. With regard to Soletanche, for
instance, the report questioned Soletanche's proposed placement of its
desanding plant and Soletanche's proposal to use bulldozers to move
riprap onto the abutment prior to constructing a work platform; the
Bureau thought a different method should be used. Bencor's proposal was
downgraded principally for a lack of detail in discussing certain
factors, lack of discussion of Bencor's project management, and a
perception that Bencor lacked experience with the new rock milling
technology to be used on this project. The technical evaluation did not
include any consideration of costs. Bencor was ranked fourth; the
technical evaluation report recommended that negotiations be conducted
only with the top three ranked offerors.
The Bureau's cost evaluation report, on the other hand, included the
results of the technical evaluation and recommended that negotiations,
if any, be held with the top four ranked competitors, including Bencor.
Bencor's cost was approximately $7.8 million; Soletanche's cost was
about $9.8 million. The Bureau's estimate was $5.8 million.
The Bureau awarded the contract to Soletanche on September 25, 1986,
without discussions. The Bureau advised Bencor of the award by letter
dated October 15, 1986, more than 10 days after the award, and Bencor's
protest followed shortly thereafter.
Bencor contends the Bureau's award of the contract to Soletanche will
not result in the lowest overall cost to the government, and asserts
that the Bureau therefore improperly failed to conduct discussions as
required by the Competition in Contracting Act of 1984 (CICA). In this
latter regard, Bencor asserts that it would not have been difficult to
provide a narrative description of its management, and notes that one of
its joint venturers, Casagrande S.P.A., was the developer of the new
rock milling technology to be used on this project and, consequently,
has considerable experience in its use. Bencor contends that it should
have been afforded the opportunity in discussions to address the
Bureau's questions. Bencor also challenges the propriety of the
Bureau's delay in advising Bencor of the award of the contract.
The Bureau points out that technical factors were more important than
cost and notes that our Office often has stated that an agency properly
may award a contract to a higher-priced, higher-ranked offeror, citing
Serv-Air, Inc.--Reconsideration, 58 Comp. Gen. 362 (1979), 79-1 C.P.D.
P 212. The Bureau also asserts that Bencor was not in the competitive
range 1/ in any event, in the opinion of the technical evaluation team,
so Bencor would not have been included in discussions even if they had
been held. The Bureau contends that Bencor could not, therefore, have
been prejudiced by the Bureau's failure to conduct discussions.
The Bureau's advocacy of the reasonableness of its cost/ technical
tradeoff in the selection of Soletanche on the basis of initial
proposals is misplaced. Under CICA, an agency may award a contract on
the basis of initial proposal where the solicitation advises offerors of
that possibility and the existence of full and open competition or
accurate prior cost experience clearly demonstrates that acceptance of
an initial proposal will result in the lowest overall cost to the
government. 41 U.S.C. Sec. 253b(d) (Supp. III 1985); Federal
Acquisition Regulation (FAR), 48 C.F.R. Sec. 15.610 (a) (3) (1986).
Otherwise an agency must conduct discussions with all offerors within
the competitive range. FAR, 48 C.F.R. Sec. 15.610(b).
Consistent with these requirements, we have approved awards based on
initial proposals where the agency demonstrates clearly that the award
resulted in the lowest overall cost. See, e.g., Yourdon, Inc.,
B-222416, July 3, 1986, 86-2 C.P.D. P 30, and ICSD Corp., B-222478, July
7, 1986, 86-2 C.P.D. P 37, under the similar CICA requirement of 10
U.S.C. Sec. 2305 (Supp. III 1985); Cerberonics, Inc., B-220910, Mar.
5, 1986, 86-1 C.P.D. P 221. Conversely, we have objected to contracts
awarded on the basis of initial proposals where it was unclear that the
award resulted in the lowest overall cost to the government. See
Hall-Kimbrell Environmental Services, Inc., B-224521, Feb. 19, 1987,
87-1 C.P.D. P ; Consolidated Bell, Inc., B-220425, Mar. 11, 1986, 86-1
C.P.D. P 238. In our judgment, this matter falls within that second
line of cases.
As a threshold matter, we note that the Bureau relies only its
technical evaluation for the assertion that Bencor would have been
excluded from the competitive range and thus was not prejudiced by the
lack of discussions. The RFP, however, specified that cost would be
considered in establishing the competitive range, and the only document
in which both cost and technical factors were considered, the cost
evaluation, recommends that Bencor be included in the competitive range.
Also,the FAR states that when there is doubt as to whether a proposal
is in the competitive range, it should be included. FAR, 48 C.F.R. Sec.
15.609(a). In these circumstances, we believe that Bencor should have
been included in the competitive range if one had been established for
the purpose of conducting discussions and, indeed, we think it likely
the firm would have been included.
The Bureau admits that all offerors were technically acceptable, and
the Bureau's evaluation does not demonstrate that Bencor's proposal was
so deficient that Bencor would have had no chance of award if
discussions had been held. In this respect, we note particularly that
informational deficiencies of the type the Bureau noted in Bencor's
proposal generally are suitable for correction through discussions and,
in fact, Bencor has substantially rebutted the Bureau's principal
objections during this protest. Moreover, there were technical
uncertainties in Soletanche's proposal which the technical evaluation
report recommended be resolved during negotiations.
We also think that in view of the above-noted unresolved
uncertainties, the $2 million difference between Soletanche's offer and
Bencor's is especially significant. Where an agency may be able to
resolve uncertainties and achieve cost savings, such as seems the case
here, discussions should be held. Sperry Corp., 65 Comp. Gen. 195
(1986), 86-1 C.P.D. P 28; Decision Sciences Corp., B-196100, May 23,
1980, 80-1 C.P.D. P 357. We simply cannot conclude that acceptance of
Soletanche's initial proposal, itself not entirely clear as to technical
matters, at an amount $2 million greater than the protester's offer and
$4 million greater than the agency's own estimate, satisfies the CICA
requirement for award at the lowest overall cost to the government.
The protest is sustained.
We recommend that the Bureau reopen discussions under the RFP. If
the result of discussions and the evaluation of best and final offers
establishes that award of the contract to an offeror other than
Soletanche is appropriate, we further recommend that the Bureau
terminate the existing contract with Soletanche and make another award.
In this respect, we recognize that Bencor's protest was not filed within
10 days of the award of the contract, and the Bureau continued
performance during the pendency of the protest. See 4 C.F.R. Sec. 21.4
(1986). Nevertheless, we also must recognize that the cause of Bencor's
delay in protesting was not the firm's own lack of diligence, but the
agency's failure to notify Bencor of the award in time to allow the firm
to file an earlier protest (the agency delayed 3 weeks) and preserve its
opportunity under CICA to compete for the full contract. Moreover,
since the record does not indicate that the government ever actually
reevaluated its $5.8 million estimate, we seriously question how an
award at $9.8 million without discussions can be considered reasonable
and in the government's interest.
Comptroller General
of the United States
1/ The competitive range is comprised of those offerors in a
particular procurement that have a reasonable chance of award. Federal
Acquisition Regulation, 48 C.F.R. Sec. 15.609 (1986).
Matter of: Dan-D, Inc. and Fluidaire Equipment Co., Inc., a joint
venture
File: B-225404; B-225404.2
Date: February 17, 1987
1. Value Engineering Change Proposals (VECP's) are made to existing
contracts, not as proposals made before a contract is awarded.
Therefore, agency properly rejected protesters' VECP included as part of
its offer prior to award, because to consider the VECP (which deviated
substantially from the solicitation's requirements) the agency would
have placed other offerors which properly submitted proposals responsive
to the solicitation's requirements, at an unfair competitive
disadvantage.
2. Contention that agency's minimum needs can be met at a reduced
cost by a sewage system which deviates substantially from the request
for proposal's (RFP) specifications, constitutes an allegation that the
RFP is unduly restrictive. Because protests based upon alleged
improprieties in a solicitation which are apparent prior to the closing
date for receipt of initial proposals must be filed prior to that date,
this contention, raised after the award, is untimely.
3. Contracting agency properly may award a contract on the basis of
initial proposals, without discussions, where the solicitation advises
offerors of that possibility and award will be at the lowest overall
cost to the government.
Dan-D, Inc., and Fluidaire Equipment Co., Inc. (protesters), a joint
venture, protest the award of a contract to Willett Construction Co.
(Willett) under request for proposals (RFP) No. DAKF10-86-R-0177, issued
by the Department of the Army, for the replacement of a sewage lift
station at Hunter Army Airfield, Georgia.
We deny the protests in part and dismiss them in part.
The RFP, issued on August 5, 1986, stated that award would be made to
the responsible offeror submitting the lowest priced offer responsive to
the requirements of the RFP. The solicitation also incorporated Federal
Acquisition Regulation (FAR) clause, 48 C.F.R. Sec. 52.215-16 (1985),
which states that the government may award a contract on the basis of
initial offers received, without discussions, and warns offerors that
each initial offer should contain the offeror's best terms from a cost
or price and technical standpoint.
By the closing date for receipt of initial proposals, September 4,
1986, five proposals were received. Willett submitted the lowest price
proposal, $353,475, approximately 2 percent below the government's
estimate. The protesters' proposal was the highest of the five, priced
at $445,100. However, with its proposal, the protesters submitted a
value engineering change proposal (VECP) which, if accepted, would have
reduced its proposal price by over $200,000. In its VECP, the
protesters offered to supply submersible pumps as well as wet well
mounted pump stations versus the dry pit sewage pump stations which were
required by the solicitation.
The Army determined that it could not accept the protesters' VECP for
a number of reasons. First, the Army recognized that VECP's are change
proposals made to existing contracts and therefore the protesters' VECP
was premature and could not be considered, since it was submitted before
a contract was awarded. See Federal Acquisition Regulation (FAR), 48
C.F.R. Secs. 52.248-3(b), (c) (1) and (e) (3) (1986); CompuDyne Corp.,
44 Comp. Gen 784 (1965)
The Army also recognized that it could not properly accept the
protesters' VECP without giving all other offerors an opportunity to
submit alternate proposals allowing submersible pumps/wet well mounted
pump stations. However, the Army decided that such action was not
necessary because the Director of Engineering and Housing at Hunter Army
Airfield had, during the design stages of the project, already analyzed
the acceptability of submersible pumps/wet well pump stations and
determined that they were unsatisfactory because, among other reasons,
they are subject to rapid deterioration of critical parts (e.g.,
bearings, shafts, seals, etc.) and they are not readily accessible for
inspections, maintenance and repair. Award was made to Willett, without
discussions with any offeror, on September 29, 1986.
By letter dated October 1, 1989, the protesters submitted to the Army
a protest of the award of the contract to Willett.
The protesters complained that award was made on initial proposals
without negotiations. In addition, the protesters argued that under the
FAR there was no reference as to when VECP's should be submitted and
therefore the Army could properly have considered its preaward VECP.
Finally, the protesters argued that the system offered in its VECP was
technically equal or superior to the system solicited.
On October 20, the protesters filed their protest with our Office,
incorporating the allegations and information found in the agency-level
protest. By letter dated October 28, the protesters amended their
protests to the Army and to our Office to respond to materials received
as a result of a Freedom of Information Act (FOIA) request. In their
October 28 letter, the protesters emphasize that their VECP was clearly
labeled as such, and was not an alternate proposal. Therefore, the
protesters argue that not only would it be prejudicial to the
protesters, but it would also be illegal for the Army to allow other
offerors the opportunity to submit alternate offers based on the changes
suggested in the VECP.
The protesters' main contention is that the Army was required to
evaluate its VECP and to make award to the protesters based on their
lowest priced proposal without giving other offerors a chance to revise
their proposals if the system offered in the VECP is technically
acceptable. We disagree.
As the Army properly determined, VECP's are supposed to be change
proposals made to existing contracts, not proposals made before a
contract is awarded. CompuDyne Corp., 44 Comp. Gen. 784, supra. Value
Engineering incentive clauses are placed in contracts to provide
authority for permissive approved deviations from specifications, etc.,
after contract award to an offeror which was otherwise responsive to the
requirements of the solicitation. CompuDyne Corp., 44 Comp. Gen. 784,
supra. It would be improper to consider a VECP altering the RFP
requirements in the evaluation of a response to a request for proposals
without givinq all competitively qualified offerors a chance to submit
proposals which would alter the requirements of an RFP. CompuDyne
Corp., 44 Comp. Gen. 784, supra.
The Army considered the desirability of the changes offered in the
protesters' VECP. It concluded as it did earlier, that the submersible
pumps/wet well system offered in the VECP would not meet its needs.
Under the circumstances, we believe that the Army acted properly in
rejecting the protesters' preaward VECP. CompuDyne Corp., 44 Comp. Gen.
784, supra.
The protesters argue that the system offered in its VECP is superior
to the system solicited and would create a cost savings to the
government. Essentially, the protesters disagree with the Army's
determination that the system offered in the protesters' VECP would not
meet the Army's minimum needs.
The protesters' arguments concerning the Army's minimum needs
constitute an objection to the requirement for dry pit sewage pump
stations specified in the RFP. Our Bid Protest Regulations require that
protests based upon alleged improprieties in a solicitation which are
apparent prior to the closing date for receipt of initial proposals be
filed prior to that date. 4 C.F.R. Sec. 21.2(a) (1) (1986); Datagate,
Inc., B-225377, Nov. 17, 1986, 86-2 C.P.D. P 573. Therefore, the
protesters' contention that the pumping system offered in its VECP,
(which differs substantially from the solicited system) would meet the
Army's minimum needs, is untimely and will not be considered. Datagate,
Inc., B-225377, supra.
The protesters' final contention is that since this solicitation was
an RFP versus an invitation for bids (IFB), the Army was required to
conduct written or oral negotiations with all offerors prior to making
the award. The protesters state that despite their repeated attempts to
open negotiations "there was no two-way communications."
The Army states that discussions or negotiations were not opened with
any of the offerors. The Army also asserts that based on a comparison
of the government estimate and other proposals submitted on the
specifications contained in the solicitation, the offer submitted by
Willett was determined to be fair and reasonable and at the lowest price
for the government's minimum needs. The Army states that since the
solicitation permitted the award to be made without discussions and none
were considered necessary, negotiations were not held.
Under the Competition in Contracting Act of 1984, a contracting
agency may make an award on the basis of initial proposals where the
solicitation advises offerors of that possibility and the competition or
prior cost experience clearly demonstrates that acceptance of an initial
proposal will result in the lowest overall cost to the government. 10
U.S.C. Sec. 2305(b)(4) (A)(ii) (Supp. III 1985). See The Marquardt Co.,
B-224289, Dec. 9, 1986, 86-2 C.P.D. P 660.
The RFP contained a "Contract Award" clause which specifically
advised offerors to submit their best prices and also cautioned that
award might be based on initial proposals. In addition, the Army has
shown that due to adequate competition, the acceptance of Willett's
proposal will result in the lowest overall cost to the government. See
Automated Industries, and Associates, Inc., B-225181.2, Dec. 3, 1986,
86-2 C.P.D. P 637. Therefore, we conclude that the Army did not act
improperly by making award on the basis of initial proposals.
The protests are denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
Matter of: Alpha Parts & Supply
File: B-225401
Date: January 15, 1987
1. Protest against rejection of proposal as unacceptable because of
inability of protester to qualify as an alternate source under an
approved source solicitation is dismissed as untimely when filed 8
months after protester knew of the reason for rejection of its technical
data package, which constitutes the same basis for its protest.
2. Untimely protest will not be considered under the significant
issue exception to the bid protest timeliness rules where the issues
raised have been considered by our Office on previous occasions.
Alpha Parts & Supply (Alpha) protests the rejection of its proposal
of an alternate product under request for proposals (RFP) No.
DLA500-86-R-0210, issued by the Defense Logistics Agency (DLA) for 2,660
approved source replacement sleeve bearings, NSN 3120-00-343-2652, for
Colt Industries, Fairbanks Morse Engine Division (Colt), engines. Alpha
contends that a technical data package which it submitted for approval
as an alternate source was improperly rejected for failure to contain
recent Colt drawing revisions which Alpha believes may not affect the
form or function of the bearings.
We dismiss the protest as untimely.
On October 17, 1985, Alpha submitted a technical data package to the
DLA Competition Advocate in the Directorate of Contracting and
Production (DISC). Alpha requested evaluation of its package for source
approval for its sleeve bearings described as equivalent to NSN
3120-00-343-2652 (Colt part No. 16701708). Alpha's technical package
included revisions 1 through 4 of drawings issued by Colt. In its cover
letter, Alpha stated:
"Although our product meets or exceeds the quality of the
O.E.M. Original Equipment Manufacturer product, we have recently
found that Colt Industries claims to have revisions to their
drawings for many . . . sleeves. However, we have found there to
be no significant engineering changes, but simply a re-trace of
their original drawing, or a simple data change, etc."
substantiate their revision or is not required to furnish DISC
with the revised drawing, the engineering support activity would
most likely find our product unacceptable because "technically" we
did not furnish the latest revision, even though the product does
in fact meet Colt specifications".
"Therefore, we ask that you be aware of the problems we face
and that should a "revision" be. mentioned by the O.E.M. that the
engineering dept. look closely for a substantial engineering
change."
On November 25, 1985, DLA issued the solicitation at issue, with a
December 26, 1985, closing date and listing Colt as the only approved
source. The RFP contained an alternate product clause providing that
alternate product offers would be considered and evaluated for technical
acceptability and requiring offerors to furnish drawings and other data
sufficient to enable the government to determine that the product was
equal to the listed approved source product.
Alpha submitted an offer for an alternate product, without any
technical data package, stating in its cover letter that its technical
data package was on file at DISC, and requesting the contracting
activity to contact DISC to obtain the status of Alpha's alternate
product.
On January 10, 1986, DISC determined that Alpha's product did not
qualify as an alternate product because Alpha did not include Colt's two
most recent drawing revisions. DISC could not determine if these
revisions were substantive because Colt declined to provide them to DISC
on the grounds that they were proprietary to Colt, and Colt had no legal
or contractual obligation to provide the drawings. By letter dated
February 11, DISC notified Alpha that its request for source approval
had been rejected for this reason.
DLA did not notify Alpha at this time that its offer under the RFP
had been rejected as technically unacceptable. However, because of the
determination that Alpha was not acceptable as an alternate approved
source, DLA conducted price negotiations only with Colt, which had
submitted a late initial offer, on the basis that Colt was the only
eligible source which had submitted an offer. Colt submitted a best and
final offer on August 15. Alpha took no further action until October
14, when it spoke with DLA personnel and learned that an award to Colt
was contemplated in the near future. At that time, Alpha stated to DLA
that it had new information that its technical package of October 17,
1985, was, in fact, complete and accurate. On October 17, 1986, Alpha
requested that DLA review its technical package, and on October 20,
Alpha protested to our Office.
The "new evidence" consists of information which Alpha elicited from
telephone calls on unspecified dates to a subcontractor which Alpha
asserts will be Colt's supplier for the bearings under this contract.
Alpha asserts that this supplier will be manufacturing the bearings to
the same drawing specifications which Alpha provided in its submission
to DISC, without any substantive revision. Colt has indicated that it
does not procure the bearings in question from any supplier, rather it
purchases a casting from a vendor, but due to the nature of many of the
operations, the entire manufacturing process is performed in its
factory, and that several critical operations in this process for the
bearing are not indicated in the drawings which were supplied by Alpha.
DLA argues that Alpha's protest is untimely because the basis for
protest was provided in February when Alpha was notif ied by DISC that
its technical package was inadequate and, therefore, Alpha was being
rejected as an alternate source. Alpha's protest was not filed until
more than 10 days thereafter, as required by our Bid Protest
Regulations, 4 C.F.R. Sec. 21.2(a)(2) (1986). We agree.
Alpha's above-quoted October 17, 1985, letter to DISC stated exactly
the same concerns, whether or not later revisions by Colt were
substantive, which Alpha now raises in its protest. However, when DISC
advised Alpha on February 11, 1986, that its application had been denied
because of the failure to include these revisions, Alpha took no action.
Rather, as Alpha states in its protest filed more than 8 months
later, "when we received the notice of rejection dated February 11 . .
., we generally accepted this rejection because we have in the past had
similar items rejected for the same reason stated by the O.E.M." Alpha
contends that it was entitled to wait for specific rejection of its
proposal under the RFP at issue before it knew of its basis for protest.
However, this position is untenable because, in its offer, Alpha
referenced its prior application with DISC as the basis for its
eligibility as an approved source, and requested DLA to confirm its
eligibility with DISC. Once Alpha received the DISC letter rejecting
its application, Alpha was aware that its technical package was
unacceptable.
While Alpha states that it expected DLA to further review its
technical package before rejecting its offer, this expectation has no
foundation since Alpha took no action in response to the notification
that its technical package was rejected. Further, to the extent that
Alpha is relying on the later evidence, obtained approximately 8 months
after the rejection, the record indicates that Alpha made no earlier
interim efforts to confirm its suspicions that the revisions were not
substantive. Since Alpha did not diligently pursue this basis for
protest, it does not provide a reason for considering the protest
timely. Sun Enterprises, B-221438.2, Apr. 18, 1986, 86-1 C.P.D. P 384.
Alpha also contends that the protest is timely because it raises
issues which it believes are significant to procurement practices and
procedures. See 4 C.F.R. Sec. 21.2(c) (1986). We do not agree. In
order to prevent the timeliness requirements from becoming meaningless,
the significant issue exception is strictly construed and seldom used.
The exception is limited to considering untimely protests that raise
issues of widespread interest to the procurement community and which
have not been considerd on the merits in a previous decision. Emerson
Electric Co.--Reconsideration, B-220517.2, Nov. 26, 1985, 85-2 C.P.D. P
607. Here, the issue of the reasonableness of the rejection of an offer
because of the unavailability to the procuring activity of proprietary
manufacturing drawings which would permit evaluation and acceptance of
an alternate product has been considered by our Office. NAK Engineering
& Consultants, Inc., B-223719, Nov. 25, 1986, 86-2 C.P.D. P 607. We
have also considered the propriety of the use by contracting agencies of
the kind of approved source procurements at issue here, and of the
procedures required for approval of an alternate source. Vac-Hyd Corp.,
64 Comp. Gen. 658 (1985), 85-2 C.P.D. P 2; Pacific Sky Supply, Inc., 64
Comp. Gen. 185 (1985), 85-1 C.P.D. P 53; Astronautics Corp. of America,
B-222414.2, B-222415.2, Aug. 5, 1986, 86-2 C.P.D. P 147. Therefore, the
protest is not for consideration under the significant issue exception.
The protest is dismissed.
Robert M. Strong
Deputy Associate
General Counsel
Matter of: Solano Garbage Company--Reconsideration
File: B-225397.2, B-225398.2
Date: June 5, 1987
Request for reconsideration is denied where based on arguments that
could have been, but were not, raised by protester in course of original
protest.
Solano Garbage Company requests reconsideration of our decision in
Solano Garbage Co., B-225397, B-225398, Feb. 5, 1987, 66 Comp. Gen. ,
87-1 C.P.D. P 125, where we denied protests by Solano under two
solicitations (invitation for bids Nos. F04626-86-B-0014 and
F04626-86-B-0058) for refuse collection and disposal services at Travis
Air Force Base. We deny the request.
Prior Decision
Solano had contended that the solicitations were improper under 42
U.S.C. Sec. 6961 (1982), which requires federal entities to comply with
federal, state and local requirements for the control and abatement of
solid waste and for hazardous waste disposal. Solano argued that,
pursuant to that provision, Travis had to contract with Solano since
Solano had been granted an exclusive franchise for refuse collection in
Fairfield, California, and Travis is within the city limits of
Fairfield. In support of its position, Solano cited our decision in
Monterey City Disposal Service, Inc., 64 Comp. Gen. 813 (1985), 85-2
C.P.D. P 261, in which we interpreted 42 U.S.C. Sec. 6961 as requiring
two federal facilities located within the city limits of Monterey,
California, to follow a city requirement that all inhabitants of the
city have their solid waste collected by the city's exclusive
franchisee.
We found that, as argued by the Air Force, Travis, by virtue of its
size, function and identity as a separate community, was a major federal
facility within the meaning of 40 C.F.R. Sec. 255.33 (1986), one of the
Environmental Protection Agency (EPA) guidelines relevant to the
implementation of 42 U.S.C. Sec. 6961. This regulation provides that
major federal facilities are to be considered "incorporated
municipalities" (i.e., local governments) when states are identifying
responsible governmental agencies for purposes of state plans concerning
solid waste management. We concluded that Travis therefore had local
government status equivalent to Fairfield's and that, because the state
of California, in an October 1981 Plan, had delegated the responsibility
for refuse collection to local government, Travis, like Fairfield, could
provide for its own refuse collection services. Our prior decision
distinguished Monterey on the basis that Monterey did not concern major
federal facilities.
Solano challenges our finding that Travis may provide for its own
refuse collection basically on two grounds: (1) 42 C.F.R. Sec. 255.33
cannot support a finding that Travis is not subject to the Fairfield
requirement since it is only a guideline to assist states in the
development of their respective state plans; and (2) the California
delegation does not envision exemption of major federal facilities from
local requirements.
Our Bid Protest Regulations require that a request for
reconsideration contain a detailed statement of the factual and legal
grounds for the request, specifying any errors of law or information not
previously considered. 4 C.F.R. Sec. 21.12(a) (1986). Our Regulations
do not permit a piecemeal presentation of evidence, information, or
analyses, and where a party raises in its reconsideration request an
argument that it could have, but did not, raise at the time of the
protest, the argument does not provide a basis for reconsideration.
Joseph L. De Clerk and Associates, Inc.--Reconsideration, B-221723.2,
Feb. 26, 1986, 86-1 C.P.D. P 200.
Solano argued the meaning of the regulations in its comments on the
agency's report on the original protest but, although it obviously could
have, Solano did not challenge the force and effect of the regulations
on the ground that they were nonbinding guidelines. The firm also did
not attempt to show how the California Plan supported its position.
These arguments therefore do not now constitute bases for
reconsideration.
In any case, nothing in the cited EPA regulations persuades us that
the provision designating major federal facilities "incorporated
municipalities" was meant to have only a limited advisory effect as
suggested by Solano. Rather, we consider it significant that EPA issued
these regulations in connection with 42 U.S.C. Sec. 6961, and
specifically characterized major federal facilities as municipalities
for purposes of state waste disposal plans such as the California Plan.
However Solano characterizes the EPA regulations, as stated in our prior
decision, they support viewing major facilities like Travis as having
the same status as a local government for purposes of contracting for
its refuse collection. We also note that, contrary to Solano's second
argument, nothing in the portions of the California Plan presented by
Solano expressly subjects major federal facilities to local
requirements. 1/
The request for reconsideration is denied.
Harry R. Van Cleve
General Counsel
1/ Solano also points out that 42 U.S.C. Sec. 6961 further provides
that only the President can exempt a federal entity from complying with
local requirements applicable by the statute and notes that there has
been no Presidential exemption for Travis. This issue is moot, however,
since we have found that Travis is not subject to those local
requirements.
Matter of: Becker and Schwindenhammer, GmbH
File: B-225396
Date: March 2, 1987
1. Contracting officer's nonresponsibility determination is
reasonable where based on preaward survey reports that cite an Army
Criminal Investigation Division report of improper substitution of
materials under a recent contract and include documented instances of
deficient performance under recent contracts. The contracting officer
has no duty to conduct an independent investigation to substantiate the
accuracy of the reports.
2. Nonresponsibility determinations may be based upon the contracting
agency's reasonable perception of inadequate performance even where the
contractor disputes the agency's interpretation of the facts and the
agency did not terminate the prior contracts for default.
3. Multiple nonresponsibility determinations under contemporaneous
procurements do not constitute de facto suspension or debarment where
they are based on the current available information reasonably showing
recent deficient performance under prior contracts.
Becker and Schwindenhammer, GmbH (B&S) protests the Army's
determination that B&S was not a responsible contractor under request
for proposals No. DAJA76-86-R-0318, issued by the U.S. Army Regional
Contracting Office, Frankfurt, Federal Republic of Germany. B&S
contends that the nonresponsibility determination was faulty because it
was based on unsubstantiated accusations that B&S lacked integrity, and
the contracting officer failed to make a reasonable effort to confirm
the accusations or to obtain current information. B&S further argues
that the agency's rejection of its offers under three other contracts
for the same reasons constituted a de facto debarment.
We deny the protest.
The RFP--for repair, maintenance and installation work on a building
at the Army's Kastel Storage Facility--was issued on July 29, 1986. The
closing date for receipt of proposals was August 29. B&S timely
submitted the lowest-priced proposal. In early September, the
contracting officer requested a preaward survey of B&S for this and
another RFP for a similar project.
The initial preaward survey report concluded that B&S was capable of
performing the contract, but cited problems with B&S's past performance,
specifically mentioning contract No. DAJA76-85-C-0065 (contract 0065)
for repair work on a hangar building. Documents in the report indicate
that the basic problem involved performance delays; in addition, there
were allegations of poor workmanship and the unauthorized substitution
of flooring material. The final recommendation, however, was contingent
upon a preaward survey review board (PASRB) decision.
The PASRB, on September 18, recommended no award to B&S. The PASRB
minutes cited an investigation by the Army Criminal Investigations
Division (CID) that found B&S had in July 1986 improperly substituted
materials under contract No. DAJA7685-C-0688 for the renovation of the
American Arms Hotel operated by the U.S. Government in Wiesbaden. The
PASRB minutes also noted performance problems under the same contract.
Lastly, the minutes recounted statements by the Chief, Contracts
Management Division, Director of Engineering and Housing (DEH) Office,
Wiesbaden, that B&S had objected when requested to present required
documentation for final invoices, and by the Inspector, DEH, that B&S
had provided late performance in various instances.
The contracting officer requested a preaward survey for a similar
solicitation, DAJA76-86-R-0337, on September 22, and on the next day the
PASRB recommended no award based on the previous findings. The
contracting officer, in a statement contained in the Army's protest
report, states that he relied on the two preaward survey reports and
PASRB's actions in determining B&S nonresponsible under the solicitation
which is the subject of this protest. Further, the contracting officer
states he confirmed the performance problems under contract 0065 and
contacted the Chief of the Regional Contracting Office, Frankfurt who
asserted that B&S had refused to furnish required inspection reports for
contracts in Wiesbaden and Mainz.
The contracting officer's written nonresponsibility determination
dated September 30 was based upon three factors: (1) the first PASRB's
recommendation of no award, citing the CID finding of improper
substitution of materials under the American Arms Hotel contract; (2)
the second PASRB's recommendation, citing the issuance of a show cause
notice under contract 0065 due to performance delays (also referred to
in the first preaward survey report); and (3) the statement of the
Chief, Regional Contracting Office, Frankfurt that B&S had refused to
furnish required inspection reports.
The protester contends that at the time the contracting officer made
the nonresponsibility determination, current information was available
indicating that B&S had not committed any substantial wrongdoing under
the American Arms Hotel contract and that differing site conditions
caused the delays under contract 0065. B&S argues that the contracting
officer had a duty to ascertain the current status of these contracts
and to confirm allegations of improper substitutions of materials before
determining B&S nonresponsible. B&S characterizes the third
factor--B&S's refusal to furnish required inspection reports--as minor.
B&S points out that the CID investigation was conducted in July 1986,
and did not result in the prosecution of B&S. The protester alleges
that one of its employees mistakenly took from B&S's storage facility
the incorrect material for the American Arms Hotel's window moldings and
that B&S itself discovered and corrected the improperly incorporated
material at no cost to the government.
Further, B&S alludes to a dispute under contract 0065 regarding
whether B&S could remove the existing concrete in the hangar building
down to 50 centimeters as specified in the contract. During performance
B&S uncovered concrete foundation piers that were not identified in the
RFP. B&S ref used to remove the piers, stating that removal might
damage the structure of the building. Although a show cause notice was
issued in July, the government did not terminate the contract for
default, and it appears that the contract was at least substantially
completed by September 30.
The regulations provide that contracts shall be awarded to
responsible contractors only, and list several standards that a
prospective contractor must meet. Federal Acquisition Regulation (FAR),
48 C.F.R. Secs. 9.103 and 9.104-1 (1986). Those standards include a
satisfactory performance record, a satisfactory record of integrity and
business ethics, and the necessary quality assurance measures. FAR, 48
C.F.R. Sec. 9.104-1. The regulations place the burden on a prospective
contractor to affirmatively demonstrate its responsibility, FAR, 48
C.F.R. Sec. 9.103(c), and dictate that in the absence of information
clearly indicating that the prospective contractor is responsible, the
contracting officer shall make a determination of nonresponsibility.
FAR, 48 C.F.R. Sec. 9.103(b). Concerning past performance, the
regulations provide that a prospective contractor that is or recently
has been seriously deficient in contract performance shall be presumed
to be nonresponsible, unless the contracting officer determines that the
circumstances were properly beyond the contractor's control or that the
contractor has taken appropriate corrective action. 48 C.F.R. Sec.
9.104-3(c).
The determination of a prospective contractor's responsibility is the
duty of the contracting officer who is vested with a wide degree of
discretion and business judgment. We therefore will not question a
nonresponsibility determination unless the protester shows bad faith on
the part of contracting officials or that the determination lacks a
reasonable basis. See, e.g., American Bank Note Co., B-222589, Sept.
18, 1986, 86-2 CPD P 316. B&S has not made the requisite showing in
this case. Rather, we find that the record provides a reasonable basis
for the contracting officer's decision.
It is true, as the protester contends, that to be reasonable, the
nonresponsibility determination should be based on current information.
Mayfair Construction Co., B-192023, Sept. 11, 1978, 78-2 CPD P 187. A
current preaward survey report detailing performance deficiencies in
recent contracts or including a criminal investigating agency's report
of misconduct in the performance of recent contracts satisfies this
requirement. See Decker & Co., et al., B-220807 et al., Jan. 28, 1986,
86-1 CPD P 100. There is no requirement that the contracting officer
independently conduct an inquiry to substantiate the accuracy of the
documents. Decker & Co., B-220807 et al., supra. In this case, the
PASRB minutes and the preaward survey reports detailed deficiencies in
recent contracts all of which had occurred within the prior 3 months.
We think that the contracting officer acted properly on this information
in the report. See Mayfair Construction Co., B-192023, supra.
The protester states that the nonresponsibility determination was in
fact based on a lack of integrity or business ethics and argues that
determinations concerning integrity or ethics must be based on
substantial evidence. The contracting officer's reliance on criminal
investigating agency's reports generally provides a sufficient basis for
a nonresponsibility determination.
See Americana de Comestibles S.A., B-210390, Mar. 13, 1984, 84-1 CPD
P 289 (involving a CID investigation); Speco Corp, B-211353, Apr. 26,
1983, 83-1 CPD P 458. This is so regardless of whether the report
results in conviction, or even prosecution. Id.
Here, however, the record shows that the contracting officer
considered the CID report to raise doubts about the ability of B&S to
implement effective quality assurance measures and management, without
regard to B&S's integrity. The information available to him reasonably
supported his doubts. See Martin Widerker, Engineer, B-219872 et al.,
Nov. 20, 1985, 85-2 CPD P 571 (where the basis of nonresponsibility was
prior inadequate performance notwithstanding an ongoing criminal
investigation).
Further, regarding the CID report, B&S argues that the American Arms
Hotel contract was not properly considered in determining its
responsibility since it was not a contract with the U.S. Government.
The Army explains that the contract was for its benefit although the
actual contract was between the host nation and B&S. Regardless of
government involvement, however, a responsibility review is not limited
to obtaining information from government sources. See FAR, 48 C.F.R.
Sec. 9.105-1 (c)(5). The Army therefore properly considered B&S's
recent performance of the American Arms Hotel contract.
The remaining two factors of the contracting officer's determination
also involved concerns about B&S's quality assurance capabilities based
on prior inadequate performance under contract 0065 and the firm's
refusal to submit inspection reports under other contracts. The
performance deficiencies under contract 0065 were documented in the
preaward survey reports, and included not only the delays attributable
to the dispute about the foundation, but also delays in delivering
replacement hangar doors, poor workmanship in repairing the roof, and
the unauthorized substitution of flooring materials. Moreover, the
contracting officer confirmed the deficient performance by contacting
procurement officials involved with the contract. B&S on the other hand
argues that none of the problems were its fault and points out that the
contract was not in fact terminated.
The question of whether B&S's deficiencies were excusable or beyond
the contractor's control is a matter of contract administration, not for
consideration by our Office. Rather, the only question for our review
is whether the contracting officer's nonresponsibility determination was
reasonably based on the information available at the time it was made.
See The Aeronetics Division of AAR Brooks & Perkins, B-222516 et al.,
Aug. 5, 1986, 86-2 CPD P 151. A nonresponsibility determination may be
based upon the contracting agency's reasonable perception of inadequate
prior performance, even where the contractor disputes the agency's
interpretation of the facts and the agency did not terminate the prior
contract for default.
We therefore view the record as providing a reasonable basis for the
contracting officer's determination that B&S's performance deficiencies
under contract 0065 raised doubt about its ability to provide sufficient
quality assurance under the contract. Further, we do not agree with the
protester that its refusal to submit required inspection reports was
minor. By itself it might be, but in conjunction with the other cited
factors the refusal to submit inspection reports casts further doubt on
B&S's ability and willingness to provide quality assurance.
Finally, the protester argues that the determination of
nonresponsibility, in conjunction with two other nonresponsibility
determinations on the same bases, constituted a de facto suspension or
debarment. We have recognized that a firm can only be debarred or
suspended from competing for government contracts for just cause through
the procedures set forth in FAR, 48 C.F.R. subpart 9.4, providing for
procedural due process. Thus, it is improper for a contracting agency
to exclude a firm from contracting with it without following the
procedures for suspension or debarment by making repeated determinations
of nonresponsibility, or even a single determination of
nonresponsibility if it is part of long-term disqualification attempt.
Deloitte Haskins & Sells, B-222747, July 24, 1986, 86-2 CPD P 107.
This, however, is not a case of de facto suspension or debarment,
because the nonresponsibility determinations involved practically
contemporaneous procurements of similar construction services and were
based on current information indicating B&S's lack of responsibility.
See The Aeronetics Division AAR Brooks & Perkins, B-222516 et al.,
supra. The contracting officer stated in the agency report that any
future responsibility determinations regarding B&S would be made
independently on the basis of information available at that time. In
fact, the protester points out that on January 26, 1987, the contracting
officer awarded B&S a contract for similar construction services. The
protester nonresponsibility determinations. See United Aircraft &
Turbine Corp., B-210710, Aug. 29, 1983, 83-2 CPD P 267.
We find that the record as a whole contains sufficient evidence upon
which the contracting officer could reasonably base his
nonresponsibility determination.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Emprise Corporation--Request for Reconsideration
File: B-225385.2
Date: July 23, 1987
Agency determination to reject proposal as technically unacceptable
is unobjectionable where the proposal takes exception to several
solicitation requirements and the agency reasonably concludes that the
offeror's technical approach would require extensive changes to the
agency's testing procedures.
Emprise Corporation requests reconsideration of our decision Emprise
Corporation, B-225385, Feb. 26, 1987, 87-1 CPD P 223, in which we denied
in part and dismissed in part Emprise's protest of the rejection of its
proposal as technically unacceptable in connection with request for
proposals (RFP) No. DAAA21-86-R-0034, issued by the U.S. Army's
Armament, Munitions and Chemical Command, Dover, New Jersey. We affirm
our prior decision.
The RFP was for an automatic test stand module assembly for use in
testing the AGT-1500 gas turbine engine in the M-1 tank. The
solicitation provided for award of a firm, fixedprice contract to the
lowest priced offeror having a technically acceptable proposal. The
proposal from Emprise received 45 out of a possible 100 evaluation
points (the three proposals considered in the competitive range received
scores of 92, 87, and 85 points) and the agency determined that the
proposal was technically unacceptable. Essentially, the agency viewed a
number of technical approaches contained in the proposal as deviating
from solicitation requirements and concluded that the proposal did not
adequately explain the approaches proposed. We concluded that the
Army's determination to reject the proposal was reasonable.
In requesting reconsideration, Emprise lists a number of issues that
it contends were either decided incorrectly in our prior decision or
ignored altogether. Emprise has asked that we address each of these
issues and that we restore the evaluation points that it says the Army
should have assigned to the firm's proposal.
As we said in our prior decision, it is not the function of this
Office to reevaluate technical proposals. Syscon Corp., B-208882, Mar.
31, 1983, 83-1 CPD P 335. Rather, we review the record to determine
whether the agency's evaluation was reasonable and complied with
applicable statutes and regulations. In reconsidering Emprise's
protest, we requested the Army to supplement its initial report with
respect to several of Emprise's specific complaints, and later asked for
more information. Emprise reviewed the Army's responses and submitted
additional comments.
Discussed below are some of the more prominent deficiencies noted in
the Army's evaluation of Emprise's proposal as well as some of the
specific issues Emprise requested us to address. We do not address here
every deficiency contained in the proposal, or every allegation made by
Emprise concerning the conduct of this procurement, because we are
convinced from our review of the record as a whole that the Army did not
improperly exclude the Emprise proposal from the competitive range.
Basically, in addition to taking exception to a number of solicitation
requirements, Emprise's proposal offered to supply a test stand much
different in essential design from what the Army had envisioned.
Although the Army could have discussed the perceived deficiencies with
Emprise, it appears that Emprise's proposal would have required
substantial rewriting in order for it to comply with the Army's
expectations. We have said that an agency need not conduct discussions
with an offeror whose proposal would require major revision. See, e.g.,
Conwal Inc., B-210443, Aug. 8, 1983, 83-2 CPD P 176. This is
particularly so where, as here, other offerors whose proposals received
significantly higher evaluation scores remain in the competitive range.
Emprise said in connection with the initial protest that the
"pivotal" issue in this case involves the solicitation's requirement for
factory testing. Briefly stated, while the solicitation required the
contractor to conduct a test of the completed system at the contractor's
facility, Emprise proposed such a test only after it had installed the
system at the Anniston Army Depot. Emprise contends that this allowed
the firm to lower its proposed costs and argues that its proposal should
have received additional evaluation points because of the firm's close
proximity to Anniston. Emprise concedes that the Army had a right to
incorporate in the solicitation a requirement for factory testing, but
contends that the Army's refusal to waive the requirement in its case
was unreasonable. In this connection, Emprise alleges that the Army
waived the factory test requirement in evaluating another offeror's
proposal.
We find no merit to the protester's position. Emprise stated in its
proposal that the firm did not propose factory testing for two reasons:
(1) the firm has no factory, and (2) the firm had been unable to resolve
the liability and security issues involved in handling a
government-furnished test engine. While Emprise may be convinced that
its approach to testing would be more advantageous than that specified
in the solicitation, the facts remain that the solicitation required a
factory test and that Emprise did not offer in its proposal to comply
with this requirement. We do not think it was unreasonable for the
agency to view the Emprise proposal as deficient in this regard.
There also is no merit to the protester's contention that the agency
waived the factory test requirement for one of the other offerors, Avco.
We reviewed the relevant portion of the Avco proposal and found that it
described two alternatives for meeting the testing requirement, both
involving tests at an Avco facility.
The central component of the testing system being procured is a
dynamometer, a device that absorbs and measures power produced by other
devices. The solicitation contemplated a conventional waterbrake
dynamometer in which water heated during the testing is cooled through a
circulation process. 1/ The protester proposed a waterbrake dynamometer
that would allow the water to convert to steam which then would condense
in a heat exchanger. Emprise contends that its dynamometer would meet
every solicitation requirement and that therefore the Army's rejection
of its proposal was unreasonable.
We concluded in our prior decision that the Army's evaluation was
reasonable given the lack of sufficient assurance in the Emprise
proposal that the system Emprise proposed would be suitable for the
required application, testing of the AGT-1500 engine. Upon further
review of the record, we remain convinced that the agency's evaluation
was reasonable.
One of the principal concerns of the evaluators was that the use of a
steam dynamometer would require changes in testing procedures. The
evaluators were concerned that a substantial effort on the part of the
government would be required to ensure that test data would not be
affected by the use of equipment different than that originally
contemplated. In support of this concern, the Army notes that the
proposal submitted by Avco, which manufactures the AGT-1500 engine,
specifically mentioned ongoing development of a steam dynamometer, but
noted that reliability remained an unanswered question and that
development of testing hardware and software involved increased
technical risk.
Emprise's response to the concerns of the evaluators is that while
Avco may have anticipated difficulties in using a steam dynamometer,
this should not have caused Emprise's proposal to be downgraded.
Emprise argues that the reservations expressed in Avco's proposal were
based on Avco's need to modify its existing system to incorporate a
steam dynamometer while Emprise planned no such modifications. In
addition, Emprise says that the statements in Avco's proposal did not
pertain to testing engines in the class of the AGT-1500.
Based on our review of the relevant portion of the Avco proposal, we
think the proposal supports the concerns of the evaluators regarding the
system Emprise proposed. More important than what Avco may have said in
its proposal about steam dynamometers, however, is what was contained in
Emprise's proposal. In this respect, while Emprise continues to allege
that no changes in testing procedures would be required, the firm has
not shown where in its proposal such assurances are contained.
The agency points out that the dynamometer Emprise proposed was
radically different than the conventional dynamometer contemplated by
the solicitation and offered by the other offerors. Emprise does not
take issue with this assessment. Although the solicitation permitted
offers based on alternate methods, we think the concern of the
evaluators that the alternate technology proposed by Emprise would
require extensive adjustments to testing procedures was reasonable.
The solicitation required the contractor to install the system and be
responsible for stable operation. The Army's position is that although
the RFP did not specifically require the contractor to perform site
work, any site work needed to install and stabilize the system would be
the responsibility of the contractor. In our prior decision, we said
that this was the only reasonable reading of the solicitation. Emprise
stated in its proposal, however, that all site work, including a
concrete slab, equipment foundations, anchors, and grounding loops would
be the responsibility of the government. In addition, the solicitation
required the contractor to provide a remote, bunded 2/ fuel tank, yet
Emprise's proposal indicated that bunding also would be the government's
responsibility.
Emprise now contends that it was merely attempting "to clarify the
division of work along lines that seemed reasonable." Emprise complains
that it would not have been possible to bid a price for site work
because the Army did not specify a site.
Emprise correctly notes that the solicitation did not indicate a
specific site for installation of the test stand. The agency did
indicate the specific site, however, in a pre-closing date site visit
attended by an Emprise representative. We recognize that the
solicitation was not as clear as perhaps it should have been regarding
the responsibility for necessary site work. Nevertheless, in light of
the solicitation provisions making the contractor responsible for the
installation and stable operation of the system, we continue to think
the more reasonable conclusion to be drawn is that all necessary site
work would be the contractor's responsibility. There can be no issue
that the solicitation required a bunded fuel tank. Emprise, however,
proposed having all site work, including bunding, be the responsibility
of the government. In our view, the evaluators reasonably downgraded
the proposal for this exception.
Emprise complains that it did not receive prompt notice of the
agency's rejection of its proposal and that it was required to undergo
an audit by the Defense Contract Audit Agency (DCAA) even after a
determination had been made to reject the proposal on technical grounds.
As the agency now explains, it requested DCAA audits on all offerors at
the time the proposals were received. It postponed notifying Emprise
and another firm that their proposals were not in the competitive range
pending receipt of the results of the audits. The agency subsequently
learned, however, that DCAA had not processed the audit requests and
therefore renewed the requests at that time.
In our view, the Army should not have renewed its request for a DCAA
audit of Emprise since at the time the request was renewed a
determination had already been made to reject the proposal as
technically unacceptable. We find no indication in the record, however,
to support Emprise's speculation that the Army was simply looking for a
reason to reject the Emprise proposal. Moreover, while we recognize
that Emprise may have been inconvenienced by the unnecessary audit,
there is no basis to conclude that the protester's competitive position
with respect to this procurement was affected.
Finally, Emprise contends that it was prejudiced by the agency's
delay in notifying the firm that its proposal had been rejected because
it would have been able to protest earlier and then would have had an
opportunity to submit a timely best and final offer. There is no merit
to this position since, regardless of the timing of the protest, we have
determined that the Army had a reasonable basis for determining
Emprise's proposal to be technically unacceptable. Thus, Emprise would
not have been invited to submit a best and final offer in any event.
Our prior decision is affirmed.
Harry R. Van Cleve
General Counsel
1/ Although the solicitation specified only an absorptiontype
waterbrake dynamometer, which Emprise contends accurately describes the
steam dynamometer it proposed, solicitation paragraph 1.1.10 lists a
cooling tower as one of the requirements of the dynamometer water
system. A cooling tower is a feature of a conventional dynamometer, and
not of the dynamometer proposed by Emprise.
2/ A bunded fuel tank is one surrounded by an embankment.
Matter of: Emprise Corporation
File: B-225385
Date: February 26, 1987
Agency's rejection of offeror's proposal as technically unacceptable
and therefore not in the competitive range was reasonable where the
offeror proposed numerous alternatives to solicitation requirements but
failed to provide sufficient support in the proposal to justify the
quantity or scope of the alternatives proposed.
Emprise Corporation protests the award of a contract by the U.S.
Army's Armament, Munitions & Chemical Command, Dover, New Jersey, to BBC
Brown-Boveri Inc. under request for proposals (RFP) No.
DAAA21-86-R-0034. We deny the protest in part and dismiss it in part.
The RFP solicited offers to supply an automatic test stand module
assembly. The required system will be used to test the AGT-1500 gas
turbine engine used in the M-1 tank. The solicitation stated that the
agency would evaluate proposals based on three major factors--technical,
management, and operations cost--and that, based on these factors, the
agency would rate each proposal as either technically acceptable or
technically unacceptable. According to the solicitation, the
contracting officer then would establish a "zone of consideration"
consisting of all proposals having a reasonable chance for award, and
would conduct negotiations on those proposals. The RFP provided for
award of a firm, fixed-price contract to the lowest priced offeror
having a technically acceptable proposal.
Following the receipt of initial proposals the contracting officer
arranged for technical evaluations of the four proposals received, as
well as for audits of the offerors' costs. In addition, the contracting
officer requested a pre-award survey of Emprise because its experience
appeared to consist primarily of "paper studies," with no relevant
"hand-on" experience.
The technical evaluators determined that the Emprise proposal was
technically unacceptable. The proposal received 45 points out of a
possible 100; the other three proposals received technical scores of
92, 87, and 85. The evaluators noted a number of technical deficiencies
in the Emprise proposal, the details of which are discussed below. The
agency notified Emprise by letter dated August 29, 1986, that since the
technical evaluation showed noncompliance with solicitation
requirements, the proposal was not in the competitive range. After an
exchange of letters concerning a debriefing, a representative from
Emprise called the agency on October 2 and asked for a listing of the
areas in which its proposal was found to be deficient. The protester
prepared and has submitted to this Office a memorandum of that telephone
conversation indicating that the agency identified 11 areas in the
Emprise proposal believed deficient in some respect. Emprise filed a
protest with this Office on October 16.
Emprise bases its protest on four 1/ specific grounds: (1) Emprise
submitted the lowest offer, (2) the firm was not informed prior to
negotiations that its proposal was technically unacceptable, (3) the
agency needlessly required Emprise to undergo a Defense Contract Audit
Agency (DCAA) audit, and (4) the agency's technical evaluation of the
Emprise proposal was inaccurate and biased. Of these, the protester
contends (and we agree) that the propriety of the agency's technical
evaluation is the most important issue.
The evaluation of proposals and the resulting determination as to
whether an offeror is in the competitive range are matters within the
discretion of the contracting activity, since it is responsible both for
defining its needs and for deciding on the best methods of accommodating
them. Harbert International, Inc., B-222472, July 15, 1986, 86-2 CPD P
67. Generally, offers that are unacceptable as submitted and would
require major revisions to become acceptable are not for inclusion in
the competitive range. Essex Electro Engineers, Inc., et al.,
B-211053.2, et al., Jan. 17, 1984, 84-1 CPD P 74. Further, in reviewing
an agency's evaluation we will not reevaluate the technical proposals,
but instead will examine the agency's evaluation to ensure that it had a
reasonable basis and did not constitute a violation of procurement
statutes or regulations. Syscon Corp., B-208882, Mar. 31, 1983, 83-1
CPD P 335.
We have reviewed the protester's technical proposal as well as the
conclusions and recommendations of the agency's technical evaluators.
Discussed below are examples of the deficiencies noted by the
evaluators. It appears that most of the deficiencies involved areas in
which the protester proposed alternate approaches which the agency
viewed as deviating from solicitation requirements. In several
instances, the agency's conclusion was based in large part on Emprise's
failure to provide sufficient explanatory material with the proposal.
Moreover, while the solicitation provided that the government would
consider alternatives to the methods specified in the RFP, we do not
think this provision contemplated alternatives of the quantity or scope
offered by Emprise. Overall, we have no basis to question the agency's
conclusion that the protester's proposal was technically unacceptable
and its resulting decision to exclude the protester from the competitive
range.
The solicitation required the test stand to have a water brake,
absorption dynamometer. A dynamometer is a device for absorbing and
measurinq power from another device, in this case the AGT-1500 engine.
In a water brake type dynamometer the heat energy absorbed is dissipated
in water, causing the temperature of the water to rise. In a
conventional water brake dynamometer--the type contemplated by the
solicitation--the water then is cooled by a circulation process. The
protester proposed a steam dynamometer in which the water would be
allowed to boil, with the steam then condensing in an air-cooled heat
exchanger. The evaluators cited a lack of data in the Emprise proposal
and the need to change test procedures as reasons for downgrading the
proposal on this point.
Emprise contends that its steam dynamometer would function just as
well as the conventional water drake dynamometer. The protester also
contends that test procedures for the AGT-1500 engine would remain
unchanged. In this regard, the protester states that the manufacturer
of that engine (who authored the test procedures) has purchased a steam
dynamometer for its own use and has stated that the device is suitable
for testing any of the turboshaft engines it manufactures.
Upon review of the protester's proposal, we do not necessarily agree
with the agency's statement that the proposal "does not present
supporting data." While, as the agency notes, the proposal does contain
a graph without legends, thus rendering the graph relatively useless,
the proposal also contains some 20 pages of explanatory material on the
proposed steam dynamometer. Therefore, were the alleged lack of data on
the proposed dynamometer the sole reason for downgrading the protester's
proposal in this area, the agency's evaluation might be subject to
question. It appears, however, that the overriding concern of the
evaluators was the issue of how a steam dynamometer would perform the
specific task required, i.e., testing the AGT-1500 engine. According to
the agency, the established enginetesting procedures envision use of a
conventional water brake dynamometer, and the use of a steam dynamometer
would require a substantial effort on the part of the government to
ensure that test data would not be affected by the use of different
equipment. While the protester believes that no changes to the test
procedures would be required, it has not shown that the concerns of the
evaluators in this regard were unreasonable. The protester states that
the AGT-1500 engine manufacturer does not think there would be a
problem, but the proposal contains no support for this statement. We
therefore have no basis upon which to question the agency's
determination that the protester's proposal failed to show that the
proposed alternative equipment would be suitable for the required
application.
Emprise contends that the pivotal issue in this case involves the
solicitation's requirement for factory testing. The firm contends that
its approach to this requirement is responsible for much of the cost
savings contained in its proposal.
The solicitation provided that prior to shipment of the test system,
the contractor would be required to conduct a demonstration test of the
system. Upon successful completion of this test, the government would
give approval for shipment. Final testing and acceptance would occur at
the government installation. Emprise stated in its proposal that it did
not intend to conduct a factory demonstration of its test system.
According to the proposal, the reasons for this were that Emprise does
not have a factory and that the firm has been unable to resolve the
liability and security problems involved in handling a
government-furnished test engine. The agency's evaluators thus noted
that the Emprise proposal failed to meet the solicitation's factory
testing requirement.
Emprise admits that its proposal did not comply with the RFP's
factory testing requirement. The protester has argued at length,
however, concerning the advantages of testing at the government
installation rather than at the contractor's facility, as required. In
particular, Emprise notes that factory testing means greater costs for
the contractor. In the protester's view, the requirement for factory
testing is unreasonable. In our view, the protester is complaining now
about a solicitation requirement that was apparent from the face of the
solicitation. Its objections now to that requirement are untimely. Our
Bid Protest Regulations provide that protests based upon alleged
solicitation improprieties that are apparent prior to the closing date
for receipt of initial proposals must be filed prior to that time. 4
C.F.R. Sec. 21.2(a) (1) (1986). Emprise did not protest the factory
testing requirement until after it learned that the agency had rejected
its proposal as technically unacceptable. We dismiss this aspect of the
protest. Tom Hoch Interior Designs, Inc., B-224291, Sept. 18, 1986,
86-2 CPD P 321.
The Emprise proposal listed a number of items and services that would
be the government's responsibility to provide. Most of the entries
tracked the solicitation's provisions, but the proposal also listed the
following: "All site work including concrete slab, equipment
foundations, anchors, grounding loop, and stub ups for utilities where
required." The protester contends that the solicitation does not require
such site work and that agency personnel so informed it during a
pre-closing date site visit.
The solicitation provides that the contractor will install the test
stand and that all "commissioning" tasks, including labor and material,
will be provided by the contractor. The solicitation provides further
that the contractor will be responsible for stable operation of the test
stand as an integrated system. Finally, the RFP provides that the
contractor shall supply a remotely located and bunded fuel tank. 2/ In
our view, the only reasonable reading of the solicitation is that the
contractor must perform the site work necessary to install and stabilize
the test stand along with the fuel tank. Emprise included none of this
work in its proposal. With respect to what was said during the site
visit, the agency denies that the protester was informed that the
government would be responsible for site work, and the protester's own
notes indicate that the agency's respresentative merely stated that the
government planned on paving the gravel parking lot where the test stand
would be located.
The evaluators noted a number of other deficiencies or weaknesses in
Emprise's proposal. For example, the solicitation required a match
plate coupling system for making the many connections that would be
required between the test engine and the test stand assembly. Emprise
did not offer a match plate system, but offered instead either a system
involving individual connections or, as an alternative, a multipoint
system. The protester also offered an alternative approach to measuring
the flow of oil to the test engine. In both of these instances, as well
as in a number of other areas, the evaluators declined to accept the
protester's alternative approaches because either the proposal did not
contain sufficient documentation to support the alternatives or the
agency's technical personnel previously had considered and rejected the
approach proposed. While the protester continues to believe that its
alternative approaches have merit, those judgments are for the
contracting agency to make, and a protester's mere disagreement with the
agency does not make the agency's evaluation unreasonable. Harbert
International, Inc., B-222472, supra.
Further, Emprise received comparatively lower scores under the
management evaluation factor, primarily because the firm appeared to
lack experience in the work required. The evaluators noted in
particular that Emprise planned to subcontract much of the work. The
protester's lack of experience and in-house capability also become
evident, says the agency, during its analysis of the protester's
proposed staff hours. The proposed engineering hours appeared to be
unrealistically low, while the hours for field installation,
commissioning and training were well over the government's estimate.
The protester says that it disagrees with the agency's judgments in
these areas, but again, a protester's mere disagreement with an agency's
evaluation is insufficient. Harbert International Inc., B-222472,
supra.
Although Emprise may have offered to perform the contract at the
lowest cost to the government, it also submitted what the agency
determined was a technically unacceptable proposal. In this respect,
once a proposal is properly determined to be outside the competitive
range as a result of the technical evaluation, the offeror's potentially
lower price is irrelevant since an offer not within the competitive
range cannot be considered for award. Proffitt and Fowler, B-219917,
Nov. 19, 1985, 85-2 CPD P 566.
The protester complains that DCAA conducted its audit more than 1
month after the Army had determined that the protester's proposal was
technically unacceptable. The protester speculates that the purpose of
the audit therefore might have been simply to find additional reasons to
reject the proposal, which would allow the Army to avoid rejecting the
proposal on technical grounds. While the agency does not explain its
timing of the audit, we see no merit to the protester's claim since it
appears the agency had ample reason to find Emprises' proposal
technically unacceptable.
Finally, the protester complains that the agency's notice to it that
its proposal had been rejected was not timely. The protester contends
that more timely notice would have allowed the protester time to cure
any perceived deficiencies. In this respect, the Federal Acquisition
Regulation, 48 C.F.R. Sec. 15.1001(b) (1) (1986), requires a
contracting officer promptly to notify an offeror whose proposal is
considered unacceptable, but also provides that the notice must state
that a revision of the proposal will not be considered. Thus, even if
the agency could have notified Emprise earlier that its proposal was
unacceptable, this would not have afforded the firm any opoortunity to
improve its proposal.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
1/ Emprise initially raised six grounds for its protest, but withdrew
two of these after receiving the agency's report on the protest.
2/ A bunded fuel tank is one which is surrounded by a dam or trench
to contain any fuel spill.
Matter of: General Electric Company, Mobile Communications Business
File: B-225381
Date: February 6, 1987
Allegation that agency requirement that radio equipment be compatible
with its current equipment is unduly restrictive of competition and
results in a sole-source award is denied where agency requires
compatibility in order to permit voice secure transmissions between
various agency offices and other federal agencies and protester has not
established that this requirement is unreasonable.
General Electric Company, Mobile Communications Business (GE)
protests the specifications in request for proposals (RFP) No. CS-86-058
issued by the U.S. Customs Service, Department of the Treasury, for Data
Encryption Standard (DES) VHF Radio Equipment. The radios, which have a
scrambling capability that allows voice secure transmission, are used by
the Customs Service for intra-agency communication as well as
communication with other law enforcement agencies. GE argues that the
RFP's requirement for compatibility with existing equipment is unduly
restrictive of competition and results in a sole-source procurement.
We deny the protest.
The RFP was issued on June 25, 1986 and specified a closing date of
July 28, 1986. Award of a requirements type contract with option
quantities for a 5-year period was contemplated. The RFP advised
potential offerors that the equipment procured under the RFP must be
compatible with existing voice privacy equipment currently being used in
the Customs Service's Nation-Wide Two-Way Radio Network. That equipment
is manufactured by Motorola, Inc. and uses the DES algorithm and the
one-bit cipher feedback mode of operation.
On July 25, GE requested an extension of the RFP's closing date and
advised the Customs Service that the RFP's compatibility requirement was
preventing GE from competing. The agency denied the request for
additional time and on July 28 GE filed a protest with the Customs
Service alleging that the procurement was effectively a sole-source one
since only Motorola could supply equipment fully compatible with its
own. Nonetheless, GE submitted a proposal to the Customs Service for
evaluation on July 28. By letter dated September 22, the Customs
Service denied GE's protest. The Customs Service advised GE that
compatibility is necessary and that GE's equipment does not meet this
requirement. GE protested this decision to our Office on October 15,
1986.
The Customs Service indicates that the radios using the DES algorithm
and the one-bit cipher feedback mode of operation have been utilized by
the agency and the law enforcement community since 1981. Solicitations
were issued and advertised in the Commerce Business Daily for the past 3
years and the Customs Service argues that GE could have participated in
those procurements but chose not to do so. The Customs Service contends
that there is nothing which precludes GE from designing a radio which
would be fully compatible with its current equipment and points out that
a current contractor for the agency's Air Support Program is currently
providing compatible equipment.
Further, the Customs Service argues that compatibility is essential
to the agency's needs. The Customs Service indicates that various law
enforcement agencies have in the past acquired radios compatible with
its own and that interoperability between the components is necessary to
ensure secure voice transmissions with these agencies. The Customs
Service notes that law enforcement agencies have already invested more
than $120,000,000 in equipment meeting these requirements and that
Customs Service officers must have the capability to talk in the secure
mode with officers from other agencies as well as Customs Service
officers in other regions. The RFP did not specify Motorola's
equipment, only that the DES algorithm and the one-bit cipher feedback
mode of operation be implemented and the Customs Service argues that
this requirement is essential to the agency's minimum needs.
GE argues that its equipment is superior to that offered by Motorola
and that the agency's need for compatibility is exaggerated. Although
GE states that it could manufacture a radio using a one-bit cipher
feedback mode of operation, GE asserts that no manufacturer can produce
a fully compatible radio without Motorola's consent. GE also indicates
that the transmission range of the radios in the secure mode is limited
and this would generally preclude the need for compatibility since the
range of the radios does not permit transmission over great distances.
Further, GE asserts that since, for the purpose of inter-agency
communication, individual agencies have different codes and both
Motorola's and GE's radios must be reloaded with the code of the agency
to be contacted, there is no support for the Customs Service's claim
that only Motorola radios are compatible with the equipment of other
agencies. GE also argues that a substantial investment in existing
equipment does not automatically justify a sole-source award and, if
allowed to continue, this will effectively exclude GE from the market.
GE contends that the agency's actions are improper and contrary to its
obligation to promote full and open competition through the use of
competitive procedures.
When a protester challenges specifications as unduly restrictive of
competition, the procuring agency bears the burden of presenting prima
facie support for its position that the restrictions are necessary to
meet its actual minimum needs. This requirement reflects the agency's
obligation to create specifications that permit full and open
competition to the extent consistent with the agency's actual needs. 10
U.S.C. Sec. 2305(a) (1) (Supp. III 1985). The determination of the
government's minimum needs and the best method of accommodating those
needs are primarily matters within the contracting agency's discretion.
Bataco Indus., Inc., B-212847, Feb. 13, 1984, 84-1 CPD P 179.
Consequently, once the agency establishes support for the challenged
specifications, the burden shifts to the protester to show that the
specifications in dispute are clearly unreasonable. Sunbelt Indus.,
Inc., B-214414.2, Jan. 29, 1985, 85-1 CPD P 113.
Specifications based upon a particular product are not improper in
and of themselves, and an argument that a specification was "written
around" design features of a competitor's product is not itself a valid
basis for protest where the agency establishes that the specification is
reasonably related to its minimum needs. Amray, Inc., B-208308, Jan.
17, 1983, 83-1 CPD P 43. Nor is a specification improper merely because
a potential offeror cannot meet its requirements. Agencies may restrict
competition where it can be shown that compatibility with existing
government equipment is required. DSP Technology, Inc., B-220593, Jan.
28, 1986, 86-1 CPD P 96; Sperry Univac, B-212914, Sept. 5, 1984, 84-2
CPD P 255.
In our view, the Customs Service has presented prima facie support
for its position and GE has not demonstrated that the agency's
compatibility requirement is unreasonable. Although the radios have
limited range when sending voice secure transmissions, the Customs
Service indicates that repeater stations are placed at critical
locations to retransmit the signal. Consequently, the record does not
support GE's assertion that different Customs Service locations cannot
even communicate with each other. As a result, compatibility with other
Customs Service offices throughout the country is not an unreasonable
requirement.
Further, we find no merit to GE's assertion that the Customs Service
has presented no support for its claim that compatibility is required
for inter-agency communication. The need for intra-agency and
inter-agency encrypted communications is supported by documentation the
Customs Service has submitted and is the subject of FED-STD-1027,
concerning DES, with which the Customs Service is attempting, through
this requirement, to comply. Moreover, while the code of the agency
that is to be contacted must be reloaded for either GE's or Motorola's
radios, there is no evidence that GE's radios, unlike Motorola's, would
be able to communicate with those of other agencies using DES conforming
equipment even with the agency's code. We also note that the Customs
Service has not restricted the RFP to only Motorola's radios and that
the Customs Service has purchased compatible equipment from one other
supplier. We think the agency has established that its minimum needs
require equipment that is compatible with its current equipment and that
of other federal law enforcement agencies and the fact that there may
only be one available source does not make that requirement unduly
restrictive. The Trane Co., B-216449, Mar. 13, 1985, 85-1 CPD P 306.
Accordingly, the protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Sigma Systems, Inc.
File: B-225373
Date: February 24, 1987
Army's decision to award a contract concerning a manpower staffing
standards study to a higher rated, higher priced offeror was not
unreasonable where the awardee's technical proposal was considered
superior and worth the cost premium involved.
Sigma Systems, Inc. protests the selection of Standard Technology,
Inc. (STI), for award of a contract under request for proposals (RFP)
No. MDA903-86-R-0061. The RFP was issued by the Department of the Army
and called for offers to conduct the measurement and computation phases
of a manpower staffing standards study in the area of preventative
medicine. Sigma argues that its technical proposal was "substantially
equal" to STI's and therefore, under the express terms of the RFP, Sigma
should have been awarded the contract on the basis of its lower price.
We deny the protest.
The Army issued this solicitation as a total small business set-aside
on July 31, 1986. The RFP provided for selection of the proposal
demonstrating technical superiority, provided it was offered at a
reasonable and realistic price. However, the RFP expressly established
that cost would become the determining factor if, in the government's
judgment, two proposals were found to be substantially equal in
technical merit. Section M-2 of the RFP established the following
technical factors on which the proposals were to be evaluated: 1)
technical adequacy of approach; 2) personnel qualifications and
experience; 3) organizational management; and 4) organizational
experience. The first factor was stated to be of "paramount
importance"; factors two and three were of "secondary importance"; and
factor four was of "tertiary importance." Section M-3 of the RFP further
stated that proposed costs would not be assigned numerical weights and
would be subordinate to technical considerations.
On September 2, 1986, the solicitation's closing date, the Army
received proposals from five firms. On September 16, the technical
evaluation panel found three firms to be in the competitive range;
Sigma and STI were two of these three firms.
On September 22, the Army conducted negotiation sessions with the
firms in the competitive range. Sigma maintains that during its
session, the Army did not challenge its technical approach in any
manner. The Army disputes this, noting that Sigma was given both
general and specific questions to respond to in submitting its best and
final offer. The Army set September 24 as the date for submission of
best and final offers.
On September 26, the Army evaluated the best and final offers.
Sigma's offer contained a price of $389,679; its technical proposal
received a numerical rating of 78.5 on a scale of 100. STI offered a
price of $591,523; its technical proposal received a rating of 85.6. A
breakdown of the ratings revealed that STI scored higher than Sigma in
the first three, moss important rating factors, while Sigma scored
higher than STI in the fourth, least important category.
On September 26, the evaluation panel recommended that the
contracting officer award the contract to STI. In light of STI's higher
price, the contracting officer asked the panel to review its
recommendation, giving specific consideration to relative costs as well
as technical merits. The panel did as requested, preparing a memo dated
September 30, 1986. This memo stated that, despite STI's higher
proposed price, it was the panel's opinion that the Army would "get more
value for its money" by selecting STI.
Relying on the panel's supplemental evaluation, as well as the
initial recommendation, the contracting officer awarded the contract to
STI on September 30, 1986. After a formal debriefing session on October
2, Sigma filed its protest with our Office.
Sigma protests that the technical proposal it submitted should have
been considered substantially equal to STI's, thereby requiring the Army
to award the contract on the basis of price. We do not agree.
The determination of relative merits of a proposal is the
responsibility of the procuring agency since it must bear the burden of
any difficulties incurred by reason of a defective evaluation.
Culp/Wesner/Culp, B-212318, Dec. 23, 1983, 84-1 C.P.D. P 17. Further,
procurement officials have broad discretion in performing that
evaluation function. Grey Advertising, Inc., 55 Comp. Gen. 1111 (1976),
76-1 C.P.D. P 325. Our Office will question an agency's evaluation
only upon a clear showing of unreasonableness. American Coalition of
Citizens with Disabilities, Inc., B-205191, Apr. 6, 1982, 82-1 C.P.D. P
318. Mere disagreement with an agency's evaluation does not show that
the evaluation is unreasonable. Intelcom Educational Services,
B-220192.2, Jan. 24, 1986, 86-1 C.P.D.P 83.
In this case the Army has categorically stated that STI's proposal
was superior to Sigma's and that the two were not substantially equal,
and the record supports the Army's position. The evaluation panel found
that while Sigma discussed adjustments to data collected, it failed to
explain the process to be used in adjusting data upward or downward--an
element the panel believed would critically affect the credence given
the manpower staffing standards. Further, the panel was not satisfied
with Sigma's proposed man-hour allocation for tasks to be performed, nor
with Sigma's apparent willingness to rely on subjective data for its
computations. Finally, the panel referred to the fact that the academic
qualifications of STI's staff were superior to those of Sigma's. From
our review of the record, we do not find the panel's reaction to Sigma's
proposal and its scoring of the two proposals to be unreasonable.
Further, we note that in the Statement of Work accompanying this RFP,
the Army stated that the study solicited was a direct response to
criticism leveled at its previous reliance on subjectively established
manpower requirements. It noted that the study anticipated from this
contract would be used to support the Army's position concerning its
stated manpower requirements with Congress, the Department of Defense
and our Office. Accordingly, in light of the Army's concern over the
accuracy of this study, as well as the relative deficiencies in Sigma's
proposal, we find the Army's determination that STI's proposal was
superior to Sigma's for meeting the Army's needs was reasonable.
Accordingly, award of the contract to STI at a higher price was proper.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: United States Pollution Control, Inc.
File: B-225372
Date: January 29, 1987
1. In reprocurement for services after default by the original
contractor, it was reasonable for the contracting officer to consider
proposal from an offeror who had not participated in the original
two-step procurement, in addition to proposals from offerors who already
had been found technically acceptable in connection with original
procurement, since a contracting officer is authorized to use any terms
and acquisition method deemed appropriate for a repurchase, and
considering the new offeror contributed to maximizing competition and
repurchasing at as reasonable a price as practicable.
2. In reprocurement after default, it was reasonable for the
contracting officer to hold discussions only with offeror who had not
participated in original procurement, since discussions were necessary
to determine technical acceptability of the new offeror's proposal and
did not prejudice other offerors whose proposals already had been found
technically acceptable in connection with original procurement.
3. Contracting agency conducting reprocurement after default does not
engage in technical leveling--improper coaching of an offeror in
successive rounds of discussions--merely by holding discussions with
offeror to determine technical acceptability of its proposal, which had
not been considered under original procurement.
4. Challenge to agency's decision in reprocurement after default to
request best and final offers, without discussions, from offerors whose
proposals already had been found technically acceptable in connection
with original procurement, is untimely when not raised before due date
for best and final offers.
5. Contention that notice of reprocurement was required to be
published in Commerce Business Daily is without merit since
reprocurements are not strictly subject to publication requirements
applicable to regular procurements and, in any event, protester was not
prejudiced by failure to publish synopsis since it had actual notice of
and participated in the reprocurement.
United States Pollution Control, Inc. (USPCI) protests the award of a
contract to Underwood Industries, Inc. under request for proposals (RFP)
No. DLA200-86-R-0082 issued by the Defense Logistics Agency (DLA) to
reprocure hazardous waste disposal services after default by the
original contractor. USPCI's principal contention is that DLA should
not have considered Underwood's proposal under the RFP because Underwood
had not participated in the original procurement. We deny the protest
in part and dismiss it in part.
On April 3, 1986, DLA awarded a requirements contract to
Envirosystems Corporation for hazardous waste disposal services for the
Defense Reutilization and Marketing Office in Jacksonville, Florida and
the surrounding area. The base period of the contract was for 1 year
from the date of award, with an option to extend for 3 months. The
procurement was conducted using two-step sealed bidding procedures as
provided in Federal Acquisition Regulation (FAR), 48 C.F.R. subpart
14.5 (1986). Under step one of the solicitation, DLA received a total
of six acceptable technical proposals from four offerors, Envirosystems,
Chemical Waste Management, USPCI, and Suffolk Services, Inc. (which
submitted three alternate proposals). A technical proposal submitted by
Underwood Industries was not received by DLA until after the due date
for proposals and therefore was not considered. The four offerors found
technically acceptable then submitted bids under step two of the
solicitation, and award subsequently was made to Envirosystems as the
lowest responsive, responsible bidder.
On August 19, Envirosystem's contract was terminated for default.
According to DLA, the waste disposal services were urgently needed after
the contract termination because storage capacity at pickup locations
had been exceeded; several locations were in violation of Environmental
Protection Agency storage permits; and there were potential leaks of
materials due to deterioration of containers caused by weather and
storage conditions. To reprocure the services, the contracting officer
issued a new RFP covering the same locations and performance period as
the original contract. 1/
The reprocurement was not synopsized in the Commerce Business Daily
(CBD); instead, in order to expedite the reprocurement the contracting
officer sent the RFP to USPCI and Chemical Waste Management, the second
and third lowest bidders under the second step of the original
solicitation. 2/ DLA advised USPCI and Chemical Waste Management to
submit only price proposals by September 3, since DLA planned to
incorporate their technical proposals under step one of the original
solicitation into their proposals under the new RFP. On September 2,
Underwood Industries, whose technical proposal under the original
solicitation was not considered because it was received late, notified
the contracting officer of its intention to submit a proposal under the
new RFP. On September 3, Underwood submitted both technical ana price
proposals; USPCI and Chemical Waste Management submitted price
proposals only, as directed by DLA.
DLA then held discussions with Underwood and concluded that its
proposal was technically acceptable. On September 12, all three
offerors were advised to submit best and final offers by September 19.
The initial and final price proposals received were as follows:
Underwood $ 855,150 $ 887,350
USPCI 1,268,666 1,218,796
Chemical Waste 1,675,511 1,621,686
Award was made to Underwood on September 25. UPSCI then filed its
protest with our Office on October 14. 3/
USPCI's principal contention is that DLA should not have considered
Underwood's proposal in connection with the reprocurement because the
proposal had not already been evaluated and found technically acceptable
under the original solicitation. USPCI also argues that (1) DLA was
prohibited from conducting discussions with Underwood by a standard
clause included in the new RFP which provided that bids would be
evaluated without discussions, and (2) DLA engaged in technical leveling
by conducting discussions with Underwood regarding the technical
acceptability of its proposal. We find these arguments to be without
merit.
Underlying USPCI's specific arguments is its general contention that
the reprocurement constituted a new acquisi-- tion and thus was subject
to the general FAR provisions applicable to regular procurements. We
disagree. Contrary to USPCI's argument, DLA's issuance of the new
solicitation does not convert the reprocurement into a new acquisition
fully subject to the FAR. Rather, since DLA was repurchasing the same
services for the same locations and time period covered by the original
solicitation, the new RFP constituted a reprocurement after default as
defined in FAR, 48 C.F.R. Sec. 49.402-6.
Although we review reprocurements to determine if the contracting
agency acted reasonably, the statutes and regulations governing regular
procurements are not strictly applicable. TSCO, Inc., 65 Comp. Gen. 347
(1986), 86-1 CPD P 198. Rather, the contracting officer may, as
authorized by the standard default clause, use any terms and acquisition
method deemed appropriate for the repurchase, provided that competition
is obtained to the maximum extent practicable and the repurchase is at
as reasonable a price as practicable.
FAR, 48 C.F.R. Sec. 49.402-6(a) and (b). In this case, we find that
it was reasonable for the contracting officer to consider the Underwood
proposal in connection with the reprocurement, since doing so served
hoth goals established by the FAR: maximizing competition, by
increasing the number of offers considered, and repurchasing at the
lowest practicable price, since Underwood's price was significantly
lower than both USPCI's and Chemical Waste Management's prices. TSCO,
Inc., supra.
Similarly, we see no basis to object to the contracting officer's
decision to hold discussions with Underwood regarding its technical
proposal. Limiting discussions to Underwood did not represent unequal
treatment of the other two offerors, as USPCI contends, since the
discussions were held only to determine Underwood's technical
acceptability, a determination already made with regard to USPCI and
Chemical Waste Management in connection with the original solicitation.
As USPCI states, the new RFP incorporated by reference FAR, 48 C.F.R.
Sec. 52.214-10, the standard clause providing for evaluation of bids
without discussions. That clause, which applies only to invitations for
bids, see FAR, 48 C.F.R. Sec. 14.201-6(e)(2), was included in the
original step two solicitation calling for sealed bids from the offerors
found technically acceptable under step one. Since the RFP subsequently
issued for the reprocurement in effect duplicated the original step two
solicitation, it also inadvertently incorporated that clause by
reference. Despite the inclusion of the clause, the solicitation was
denominated an RFP and the reprocurement conducted in accordance with
the rules governing the solicitation of competitive proposals, which
provide for discussions with offerors. 10 U.S.C. Sec. 2305(b)(4)(A)
(Supp. III 1985). Consequently, once the contracting officer decided to
consider the Underwood proposal, it was reasonable to hold discussions
with Underwood also, since discussions were necessary to determine
Underwood's technical acceptability and did not prejudice USPCI, whose
proposal had already been found technically acceptable.
Further, there is no merit to USPCI's contention that the discussions
with Underwood constituted technical leveling, which is defined as
helping an offeror bring its proposal up to the level of other proposals
through successive rounds of discussions, such as by pointing out
weaknesses resulting from the offeror's lack of diligence, competence,
or inventiveness in preparing a proposal. FAR, 48 C.F.R. Sec.
15.610(d)(1); Raytheon Ocean Systems Co., B-218620.2, Feb. 6, 1986,
86-1 CPD P 134. Here, not only were there no successive rounds of
discussions, but there is no indication that DLA improperly coached
Underwood in any way.
USPCI also contends that DLA created an improper auction among the
offerors by requesting best and final offers from USPCI and Chemical
Waste Management even though no technical deficiencies were identified
in their proposals. This issue is untimely since it was not raised
before September 19, the date best and final offers were due. Bid
Protest Regulations, 4 C.F.R. Sec. 21.2(a)(1) (1986); Research Analysis
and Management Corp., B-218567.2, Nov. 5, 1985, 85-2 CPD P 524. In any
event, even in regular negotiated procurements where discussions are
held, it is not improper for the contracting agency to request best and
final offers, without discussions, from those offerors whose proposals
have no technical deficiencies. Weinschel Engineering Co., Inc., 64
Comp. Gen. 525 (1985), 85-1 CPD P 574.
Finally, USPCI challenges DLA's failure to publish a notice of the
reprocurement in the CBD. As discussed above, the publication
requirements associated with regular procurements are not directly
applicable to reprocurements after default. In any event, USPCI was not
prejudiced by the failure to publish a CBD notice since it had actual
notice of the reprocurement upon receipt of the new RFP.
USPCI requests that it be allowed to recover its proposal preparation
costs and the costs of filing and pursuing the protest. Since we find
the protest to be without merit, we deny the request for costs. 4
C.F.R. Sec. 21.6(d), (e).
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
1/ Specifically, the base period under the new RFP ran through April
2, 1987, the remaining term under the original contract, with an option
to extend for 3 months.
2/ According to DLA, the new RFP was not sent to the other offeror
found technically acceptable under the original RFP, Suffolk Services,
due to uncertainty concerning the firm's responsibility and because the
contracting officer did not consider Suffolk's prices under the prior
solicitation to be competitive.
3/ Because the agency received notice of the protest more than 10
days after award was made, DLA was not required to suspend performance
under the contract. Competition in Contracting Act of 1984, 31 U.S.C.
Sec. 3553(d)(1) (Supp. III 1985). USPCI maintains that it was not
notified of the award in time to invoke the suspension provision; DLA
disagrees, stating that USPCI was orally advised on September 26 that
award had been made on September 25. In any event, the applicability of
the statutory suspension is determined by reference to the date of
award, not the date the protester received notice of the award.
Matter of: Consulting and Program Management Services, Inc.
--Request for Reconsideration
File: B-225369.2
Date: July 15, 1987
1. Resolicitation under revised specifications, rather than award to
protester, is appropriate remedy where solicitation requirements
exceeded agency's minimum needs and unduly restricted competition.
2. Although protester will have an opportunity to compete for award
under resolicitation, it is entitled to recover the costs of filing and
pursuing its protest, including reasonable attorney's fees, where the
schedule for resolicitation deprives the protester of the opportunity to
compete, and be awarded a contract, for the basic contract period.
Consulting and Program Management Services, Inc. (CPMS) requests
reconsideration of our decision in Consulting and Program Management,
B-225369, Feb. 27, 1987, 66 Comp. Gen., 87-1 CPD P 229. In that
decision, we sustained CPMS' protest against award of a contract to
Massachusetts Technological Laboratory, Inc. (MTL) under request for
proposals (RFP) No. L/A 86-19, issued by the Department of Labor (DOL)
for property management services. CPMS, however, questions our
recommendation that the agency resolicit its requirement for property
management services and argues that we should instead recommend award to
CPMS. We affirm our prior decision.
CPMS originally protested the award on the ground that the individual
staff members proposed by MTL failed to satisfy experience and
qualification requirements for each of several labor categories set
forth in the solicitation. In agreeing with CPMS, we rejected the
agency's apparent interpretation of the solicitation that one
individual's experience could offset another individual's failure to
meet the stated experience requirements. We found that, whatever the
agency's intent, the only reasonable interpretation of the solicitation
was that these were individual, rather than collective, staff
requirements. Since we also found that individuals on MTL's proposed
staff did not meet the minimum qualifications set forth for each labor
category, we concluded that the award was improper and sustained the
protest.
In considering the appropriate remedy, we recognized that DOL
maintained that our literal interpretation would make the experience
requirements more restrictive than intended and create a sole-source
procurement, since only CPMS could satisfy them. We also noted that
contracting officials had been so concerned about the possible
restrictiveness of the requirements before the solicitation was issued
that they modified the restrictions for selected labor categories.
Finally, we noted that the contracting officer stated at the
administrative conference that the transition from CPMS to MTL had been
achieved without problems. These facts led us to find that the
experience requirements, under the only reasonable interpretation,
exceeded the agency's minimum needs. Because only three small
businesses had submitted proposals, we also reasoned that the overstated
requirements may have deterred other prospective offerors from
competing. We thus concluded that the only appropriate remedy was a
resolicitation of the requirement with a solicitation reflecting DOL's
true needs, and subsequent termination of MTL's contract in the case of
a different outcome.
In its request for reconsideration, CPMS maintains that, rather than
recommend resolicitation, we should instead recommend termination of
MTL's contract and an award to CPMS under the original solicitation.
CPMS claims that there is no factual basis for the conclusion that the
experience requirements in the solicitation exceeded the agency's
minimum needs, and argues that we should not have considered MTL's
performance under the new contract. In any case, CPMS alleges that
there has been a deterioration of service under MTL. DOL, on the other
hand, continues to maintain that the experience requirements in the
original solicitation, when interpreted as individual rather than
collective requirements, exceed the agency's minimum needs and unduly
restrict competition. The agency denies that MTL's performance under
the contract is unsatisfactory.
We decline to alter our prior recommendation or to question the
agency's evident intention to relax the experience requirements.
In fashioning an appropriate remedy where we have sustained a
protest, we will take into account all relevant information. Where, as
here, the issue is whether solicitation requirements were unduly
restrictive, the agency's view of the awardee's performance under the
contract in question, we believe, is relevant. In any event, our
recommendation was based on the several facts noted above--not primarily
MTL's performance--all of which indicated that, while MTL did not meet
the experience requirements as we found they must be interpreted, DOL
never intended that the requirements be interpreted so restrictively.
CPMS's emphasis on the quality of MTL's performance is misplaced,
since, even if that performance were shown to be deficient, DOL
nevertheless considers less stringent experience requirements adequate
for its needs. In asking us to find that DOL's minimum needs can only
be satisfied by a contractor whose employees satisfy more stringent
experience requirements than the agency considers necessary, CPMS, in
effect, is proposing that we require the agency to adopt more
restrictive minimum needs. This determination generally is within the
discretion of the agency, not our Office. CAD/CAM On-Line, Inc.,
B-226103, Mar. 31, 1987, 87-1 CPD P 366. Moreover, since the objective
of our bid protest function is to insure full and open competition for
government contracts, our Office generally will not review a protest
that has the explicit or implicit purpose of reducing competition; a
protester's presumable interest as the beneficiary of a more restrictive
specification is not protectable under our bid protest function.
Ingersoll-Rand Co., B-224706 et al., Dec. 22, 1986, 86-2 CPD P 701.
Although CPMS expresses concern that DOL way be relaxing the
experience requirements only in response to the protest, CPMS has not
demonstrated, and we find no reason to assume, that this is the case.
The agency has recently advised our Office that the synopsis of its
solicitation appeared in the Commerce Business Daily on June 18, and
that it intends to make award before the expiration of the base year for
MTL's contract on September 30, 1987. CPMS maintains that the agency
must fully implement our recommendation within 60 days of the decision,
and that DOL's delay thus is improper. In support of its contention,
CPMS cites the Competition in Contracting Act of 1984 (CICA), 31 U.S.C.
Sec. 3554(e) (Supp. III 1985), which provides that the head of the
procuring activity must report to the Comptroller General if our
recommendation has not been fully implemented within 60 days of the
agency's receipt of the recommendation.
We do not interpret CICA as requiring full implementation of our
recommendations within 60 days under all circumstances. Rather, we view
the reporting requirement as recognizing that implementation within 60
days may be impracticable in certain instances. We read the provision
as requiring agencies to exert their best efforts to implement our
recommendations within 60 days and to notify our Office within 60 days
if full implementation is not possible within that period.
Here, DOL notified our Office of its proposed schedule within 60 days
after the issuance of our decision. Although DOL's schedule will result
in a new award as late as 7 months after our initial decision, we do not
find this delay to be unreasonable, since DOL is contemplating
significant revisions to the experience requirements, must evaluate new
offers, and may again need to undertake negotiations. Accordingly, we
are unwilling to conclude that DOL abused its discretion in proposing
that any new contractor commence performance in October. See Furuno
U.S.A., Inc.-- Reconsideration, B-221814.2, June 10, 1986, 86-1 CPD P
540 (details of implementing recommendation for corrective action are
within the sound discretion and judgment of the contracting agency).
We find that CPMS is entitled to the costs of filing and pursuing its
protest, including reasonable attorney's fees. Our Bid Protest
Regulations, 4 C.F.R. Sec. 21.6(e) (1986), limit the recovery of
protest costs to situations where the contracting agency has
unreasonably excluded the protester from the procurement, except where
we recommend that the contract be awarded to the protester and the
protester receives the award). We have construed this to mean that
where our recommendation will afford the protester an opportunity to
compete for award under the solicitation, the recovery of protest costs
generally is inappropriate. See Genisco Technology Corp., B-224201.2,
Feb. 18, 1987, 87-1 CPD P 180. Here, however, the agency's schedule
for resolicitation deprives the protester of any opportunity to compete,
and be awarded a contract, for the basic contract period. Under these
circumstances, CPMS is entitled to recovery of protest costs. E. H.
Pechan & Associates, Inc., B-221058, Mar. 20, 1986, 86-1 CPD P 278; see
Allstate RentA-Car Inc., B-225633, May 1, 1987, 66 Comp. Gen. , 87-1
CPD P .
Our prior decision, as modified to allow for protest costs, is
affirmed.
Acting Comptroller General
of the United States
Matter of: Personnel Decisions Research Institute
File: B-225357.2
Date: March 10, 1987
1. An agency's determination of whether proposal is in the
competitive range is a matter of agency discretion which the General
Accounting Office will not disturb absent a clear showing that agency's
determination lacked a reasonable basis. Proposal which was reasonably
found to be so deficient in its technical adequacy--the most heavily
weighted evaluation criterion--that major revisions would have been
required to make it acceptable was properly excluded from the
competitive range.
2. Protest that agency improperly evaluated proposal on basis of
levels of agency standards not stated in the request for proposals (RFP)
is denied since there is no requirement that RFP precisely specify
acceptable level of effort and manner of performance where solicitation
calls for a performance oriented research and analysis project which, by
its nature, lends itself to individual standards of quality and
competitiveness.
Personnel Decisions Research Institute (PDRI) protests the exclusion
of its proposal from the competitive range under request for proposals
(RFP) No. MDA903-86-R-0214 issued by the Department of the Army, Defense
Supply Service Washington (DSS-W). The RFP was for a
cost-plus-fixed-fee contract for a job analysis study of Army military
and civilian comptroller jobs. PDRI contends that its proposal was
improperly and unfairly evaluated. The protester requests relief in the
form of the termination of the contract and award instead to PDRI and/or
award of the costs of preparing its proposal and filing and pursuing
this protest. Alternatively, PDRI requests that the procurement be
recompeted under a solicitation revised for clarity.
We deny the protest.
Under the terms of the RFP, technical proposals were to be evaluated
in the following three categories, in descending order of relative
importance: technical adequacy, personnel qualifications, and
organizational experience. The RFP does not state the maximum point
scores to be allocated for each of the three areas of evaluation;
however, it does state that technical adequacy is the most important
factor, but personnel qualifications and organizational experience
together will receive greater weight than technical adequacy. The
solicitation also provides that cost proposals will be subordinate to
technical considerations and evaluated separately from technical
proposals but will not be assigned numerical weights.
According to the RFP statement of work, the analysis of military and
civilian jobs in the comptroller field in the Army is the objective of
the work called for by this solicitation. The RFP sets forth as one of
the essential purposes of the study the examination of whether, as
thought by the Army, its civilian ana military comptrollers perform
essentially identical work and, therefore, that the civilian and
military comptroller jobs are interchangeable. The RFP further states
that due to funding considerations the basic job analysis contract must
be for civilian personnel, with an option for the job analysis of
military personnel--that option to be exercised within 1 year of award
of the basic contract, although the option would "probably run
concurrently with the basic contract." In view of the somewhat complex
variables necessitated by these funding considerations, the statement of
work states that proposals are to "describe how the work would be
accomplished if the two job analyses civilian and military occur
concurrently or consecutively" and provide the cost of a combined offer,
i.e., for the basic contract and the option, in addition to the cost of
separate offers for the basic contract to be followed by the option
contract. To facilitate the provision of this information, the
statement of work provided data on the geographical locations of
civilian and military comptrollers as well as their job series and
ranks.
The work required by the RFP included determining the tasks to be
included in the comptroller job inventory and interviewing a sampling of
job incumbents. The sampling size and makeup were "to be determined by
the contractor . . . subject to the Army Civilian Personnel Center
CIVPERCEN approval." Using the geographic distribution for the civilian
and military comptroller populations provided in the solicitation,
offerors were to develop a preliminary sampling plan to be included in
their proposals.
Of the 11 proposals received in response to the solicitation, the
three-member evaluation panel determined that two proposals were in the
competitive range. The evaluation panel rejected the proposal of PDRI,
the third ranked offeror, as technically unacceptable, having no
reasonable chance for award, because major revisions would have been
necessary to make the proposal acceptable. The agency made award to the
highest-ranked offeror, whose proposed cost was less than that of the
second-ranked firm.
Subsequent to the agency debriefing concerning the technical
evaluation of its proposal, PDRI filed its protest alleging, generally,
that: (1) certain criteria against which its proposal was evaluated
were "either stated unclearly and vaguely or not specified at all in the
solicitation" and, therefore, its proposal may not have been evaluated
by the same criteria as were all other proposals; (2) unknown to it
until the debriefing, certain evaluation criteria under which its
proposal was excluded were unreasonable or unduly restrictive; and (3)
some of the evaluation panel's conclusions regarding PDRI's proposal
were "simply untrue."
It appears to us that PDRI was provided a rather thorough debriefing
of the weaknesses the panel perceived in its proposal in all three
rating categories, and PDRI has taken issue with every one of them. The
points of contention are numerous, vary widely in their significance,
sometimes reflect misunderstandings of the evaluators' conclusions, in
some instances consist of differences in opinion among professionals as
to what constitutes "good science," and were not always rebutted by PDRI
following its receipt of the agency report. We have considered all
these contentions and conclude that, on the whole, they do not show PDRI
to have been the victim of arbitrary conduct, and that it is not
necessary for us to discuss all of them in order to arrive at a
decision, particularly with regard to the "Personnel Qualifications" and
"Organizational Experience" criteria as to which PDRI's point score
ranking placed it in the midst of the two firms in the competitive
range, nor even with regard to most deficiencies identified by the
evaluation panel under the single most important criterion--"Technical
Adequacy"-- because two fundamental deficiencies in PDRI's proposal
related to that criterion are dispositive of the protest. These
deficiencies concern the protester's failure to provide the computer
hardware and software resources necessary to performance of the contract
and deficiencies in its interview sampling plan.
The RFP required that the contractor "provide computer hardware and
software" to analyze job analysis responses using the task
inventory/Comprehensive Occupational Data Analysis Package (CODAP)
methodology. In its offer PDRI stated that it:
". . . had made tentative arrangements with the U.S. Air Force
Human Resources Laboratory (AFHRL) to use their computer system
with the latest version of CODAP. We will, however, require an
official communication from CIVPERCEN to AFHRL requesting this
use."
In the Army's view, PDRI's proposal failed to meet the RFP
requirement that the contractor was to provide computer hardware and
software since it proposed to use government resources--specifically,
Air Force hardware and software-- over which, according to the Army,
neither PDRI nor the Army has control. The evaluation panel, therefore,
concluded that the protester's proposal was "not technically adequate"
in this major respect.
In its protest, PDRI states it was informed at the debriefing that
its failure to provide hardware and software but to use government
equipment to conduct the CODAP analysis was the major weakness of its
proposal, and that "the reviewer implied strongly that the contractor
was to own the hardware and software." (Emphasis in original.) The
protester argues that the alleged requirement that the offeror "own" the
hardware and software it proposes to use was, on one hand, not clearly
stated in the solicitation, and on the other hand, was an unreasonable
and unnecessarily restrictive requirement. The protester defends the
arrangement it proposed for the use of computer equipment by stating
that in a telephone conversation with an AFHRL official prior to
submitting its proposal, it received the agreement of that official that
PDRI would be given access to the AFHRL system "upon written request
from CIVPERCEN." The protester further defends its proposed arrangement
by maintaining, in essence, that AFHRL's computer is the only computer
on which the most recent version of CODAP (ASC II) is currently
installed and that the use of this most recent version is necessary in
order to achieve the "best possible data analysis."
The agency first unequivocally denies that PDRI was penalized or
faulted because it did not own the computer equipment or software it
proposed to use, and denies that it established an undisclosed
restrictive or additional ownership requirement. Rather, the Army
emphasizes that the RFP contained the more general requirement that the
contractor "provide" these resources. (That this was the Army's
interpretation is supported by our in camera examination of the
proposals included in the competitive range, which indicates that those
offerors do not own the nonqovernment computer equipment they proposed
to use.) In responding to PDRI's arguments, the chairman of the
evaluation panel indicated that during the evaluation of the protester's
proposal he inquired of the AFHRL official, who PDRI says agreed to its
proposed use of Air Force equipment, as to whether the firm had
"requested free computer support as stated in their . . . proposal."
According to the panel chairman, the official responded in the negative.
1/ The agency further states that many computers are capable of running
CODAP and many universities and private companies are experienced in
using that program. The Army also indicates it was aware of the AFHRL
computer equipment and its capability prior to the issuance of the
solicitation and that it considered and rejected the prospect of
providing government computer equipment for the project. For that
reason, the AFHRL resources were not listed in the RFP as among the
government-furnished supplies or services to be provided to the
contractor.
The technical evaluation panel thus determined that the protester
failed to comply with the requirement that it provide the computer
equipment to run CODAP and states that this deficiency was "so serious
that it almost considered PDRI's proposal nonresponsive for this reason
alone." PDRI maintains that "the Agency alleges this technical
deficiency as a strategy for unfairly and unreasonably asserting that
PDRI "had no reasonable chance for award." The protester further
expresses the view that the Army has chosen for award a proposal which
offers a technically inferior data analysis, whereas it proposed the
best possible data analysis procedure.
Since the contracting agency is responsible for defining its needs
and the best methods of accommodating them, the evaluation of proposals
and the determination of competitive range is a matter primarily within
the discretion of the procuring agency, and we will not overturn that
determination in the absence of clear evidence that it had no reasonable
basis or is in violation of federal procurement laws or regulations.
Proffitt and Fowler, B-219917, Nov. 19, 1985, 85-2 C.P.D. P 566 at 4;
Maxima Corp., B-220072, Dec. 24, 1985, 85-2 C.P.D. P 708 at 3. Offers
which are technically unacceptable as submitted and would require major
revisions to be made acceptable should not be included in the
competitive range. Harbert International, Inc., B-222472, July 15,
1986, 86-2 C.P.D. P 67.
The evaluation score sheets indicate that because PDRI assumed that
the Army would request the use of Air Force equipment and offered no
alternative for the provision of computer equipment, the proposal, in
the first instance, was adjudged technically unacceptable in the manner
it proposed to carry out the job analysis, per se.
One dispositive consideration in the determination as to whether the
Army's evaluation was reasonable with respect to this aspect of the
protester's proposal is the fact that PDRI's proposal to "provide" the
computer equipment was, as it specifically stated, conditioned upon the
Army's request for the use of Air Force equipment. In view of such a
conditional offer without an alternative means of providing the
equipment, as required by the RFP, we find that the proposal did not
conform to that requirement. Moreover, while the protester maintains
that it received an oral conditional agreement from an AFHRL official,
it produced no evidence either to the contracting agency or to our
Office that AFHRL did, in fact, agree to the arrangement it proposed.
Thus, exclusion of the proposal from the competitive range on this basis
was not improper since it would have required major revisions to be made
acceptable in this area. Forecasting International Ltd., B-220822. 3,
Apr. 1, 1986, 86-1 C.P.D. P 306; Micronesia Media Distributors, Inc.,
B-222443, July 16, 1986, 86-2 C.P.D. P 72 at 3.
PDRI also implies that it had a reasonable expectation that the Army
would find its proposed computer hardware and software arrangement
acceptable because the agency previously accepted a similar proposal in
which the protester was awarded a contract for a job analysis using
CODAP. The Army indicates, however, that in the situation to which PDRI
refers, the Army chose not to request the use of AFHRL equipment, but
because the proposal contained an alternative means of providing the
equipment required, PDRI was awarded the contract. The Army further
states (and PDRI unpersuasively contests the Army's account) that its
previous request for the use of AFHRL equipment in connection with that
prior contract was authorized only when, during the performance of the
contract, the agency learned that--contrary to its proposal--PDRI had
failed to budget properly for the alternative plan (which the Army had
accepted), and thus the timely execution of the contract was
jeopardized.
Notwithstanding the validity or merits of these arguments and
defenses raised by the protester and the agency, the fact that the
agency previously authorized or cooperated with a proposed performance
procedure which was not contemplated by the RFP in some other
procurement does not justify a proposal offering less than what the
subject RFP requires, because each procurement must stand upon its own
proprieties. See Discount Machinery & Equipment, Inc., B-223547, Aug.
29, 1986, 86-2 C.P.D. P 242. Here, the RFP expressly stated that it was
the contractor's responsibility to "provide" the computer resources
necessary for the performance of this contract, which resources, the
record shows, are readily available in the commercial marketplace. PDRI
did not offer to provide these resources. It proposed that the
government provide these resources, apparently at no cost to PDRI but
not at no cost to the government. There may be instances where the
government decides that it is in its interest to make government-owned
resources available to a contractor and advises all competitors for the
contract of that fact in the solicitation. This is not such a case; in
fact, the record shows that the Army considered and rejected that
alternative before the RFP was issued. Under these circumstances, we do
not think it unreasonable for the evaluation panel to have concluded
that it was a major deficiency in PDRI's proposal for it not to have
included the provision of the computer resources essential to the
performance of the contract.
If PDRI believed (as it seems to suggest) that the only method of
providing the government's actual needs was through AFHRL, that judgment
would necessitate the conclusion that the RFP was defective in that it
did not provide for, or require such use--a matter which, in order to
have been timely considered, should have been raised prior to the
closing date for receipt of proposals. 4 C.F.R. Sec. 21.2(a) (1)
(1986).
PDRI proposed an interview sample consisting of approximately 250
civilian and 50 military personnel out of a total of 9,119 and 1,217,
respectively; it proposed to conduct interviews at five civilian
locations and one military location out of 168 total locations. 2/ The
Army states that PDRI's sampling plan for the selection of employees to
be interviewed to develop the task inventory was unacceptable because
the number of interviews proposed was insufficient to cover adequately
the comptroller function and, therefore, to accomplish the RFP
objective.
In its protest PDRI states that it learned at the debriefing that the
evaluation panel considered its sampling plan deficient because (1) "any
proposed interview sample of less than 500 individuals was considered
too small due to the "complex" nature of the career program"; (2) a
proposal to visit less than 20 sites was unacceptable; and (3) PDRI did
not propose to visit "major commands" that were considered to be
required interview locations. The protester expresses the view that if
there were fixed thresholds of 500 interviewees and 20 interview sites,
that information should have been stated in the solicitation so that all
offerors would be "on an equal footing with respect to these fixed
requirements and thus make the award more competitive."
The Army states that it had an estimate of the number of samples
which it considered necessary for a properly designed task inventory,
but that its estimate was not designed to constitute a required number
of interview sites to be visited in order to successfully accomplish the
RFP objective. The agency further states that it did not object to the
number of interview sites proposed by PDRI, but it objected to the
selection of sites PDRI proposed because the selection showed that the
protester did not consider relevant variables such as "overseas sites
where most of the military population resides, . . . small comptroller
shops where work may be performed quite differently" than at larger
shops, and other locations which would assure the inclusion of certain
comptroller jobs excluded in PDRI's proposed sampling. Although the
protester argues that it chose interview sites on the basis of locations
having the largest concentration of comptrollers, the Army states that
the basis of its evaluation of the sampling plan was whether the plan
adequately covered the study population set forth in the RFP.
Further, in regard to the adequacy of its sampling plan, PDRI makes
the similar contention that it was unfair of the evaluation team to
negatively evaluate its proposal on the basis that PDRI did not include
any European locations and two specific Corps of Engineers locations
among the sites it would visit, because, if offers were to be judged on
the basis of whether they proposed travel to specific locations,
including European sites, that should have been stated in the RFP.
The Army maintains that the desirability of conducting interviews at
European sites was implicit in the RFP by virtue of the exclusion from
this solicitation of a prohibition against travel outside the
continental United States and the inclusion of information showing a
major presence of military finance officers (military occupational
speciality (MOS) 44s) and comptrollers (MOS 45s) in Europe.
Where, as in this case, a solicitation calls for the conduct of a
performance oriented research and analysis project, there is no
requirement that the manner in which offerors are to fulfill the
required tasks be specified in the RFP, and the fact that an offeror's
response in certain areas of evaluation differs from the expectations of
the contracting agency does not render the RFP's requirements vague or
ambiguous. See Digital Radio Corp., B-216441, May 10, 1985, 85-1 C.P.D.
P 526 at 6. Accordingly, we do not consider that the RFP was defective
for failure to contain information necessary for the proper preparation
of proposals on the basis that it did not specify numerical criteria
that would be deemed to constitute successful interview sampling
proposals. See Intelcom Support Services, B-222547, Aug. 1, 1986, 86-2
C.P.D. P 135 at 4.
The protester further argues concerning its sampling plan that it
proposed to interview a relatively low number of military comptrollers
because of the statement in the RFP statement of work that "the
Department of the Army believes that its civilian and military
comptrollers perform essentially identical work." Although this
statement does appear in the RFP statement of work, the solicitation
also specifically provides that one essential purpose of the comptroller
job analysis is to determine whether, as thought by the Army, the
military and civilian comptroller jobs are, in fact, interchangeable.
In other words, when the Army's statement of its view concerning
military and civilian jobs is read in context, it is clear that the
question of the interchangeability of the jobs is one matter to be
resolved through the study solicited. Thus, to the extent that PDRI
limited the number of military comptrollers it proposed to interview
because of the referenced statement, its proposed interview sampling was
based on a misinterpretation of the statement of work, the meaning of
which should have been clear from the context of the statement, as well
as from all the information in the RFP, taken as a whole.
It is apparent that the most serious deficiencies in the protester's
proposal were in the category of technical adequacy, the most heavily
weighted of the three evaluation categories. In view of the technical
deficiencies discussed, as well as the nature and extent thereof, we
agree with the agency's determination that the proposal would have
required major revisions in order to be made technically acceptable.
Our review of the record provides no basis to conclude that, as a
general matter, the Army's exclusion of PDRI's proposal from the
competitive range was arbitrary or unreasonable, since in our view, the
technical inadequacies alone support the agency's decision.
The protest is denied. In view of this result, the protester's
claims for the costs of preparing its proposal and filing the protest
are denied. Forecasting International Ltd., B-220622.3, supra, 86-1
C.P.D. P 306 at 7.
Harry R. Van Cleve
General Counsel
1/ While the protester does not state that it requested "free"
computer support of AFHRL, we note that in its comments on the agency
report on this point, the protester only reaffirms that it received the
AFHRL official's agreement by telephone and offers no proof of any kind
of commitment for the use of the Air Force's computer equipment. The
protester also states that it is a not-for-profit organization, and
asserts that as such, it may under certain AFHRL provisions use the
computer equipment in question without charge.
2/ The protester proposed to interview at one military site if the
option for the military comptroller job analysis were exercised
concurrently with that for civilian personnel.
Matter of: Hoffmann Research Associates
File: B-225357
Date: February 25, 1987
1. Where on basis of protest as initially filed, General Accounting
Office cannot conclude that it was unreasonable of agency to exclude
from the competitive range the protester's proposal, which ranked 6th of
11 technically, protester's lower estimated costs would not require that
it be included in the competitive range.
2. Specific objections to the evaluation of the protester's proposal,
first raised in protester's comments on administrative report, but which
are based upon information provided at a debriefing held after
protester's initially filed protest but more than 10 days before
comments were filed in the General Accounting Office are untimely and
will not be considered on the merits.
Hoffmann Research Associates (HRA) protests the award to Advanced
Research Resource Organization (ARRO) of a costplus-fixed-fee contract
under request for proposals (RFP) No. MDA903-86-R-0214 issued by the
Department of the Army, Defense Supply Service-Washington (DSS-W), for a
job analysis study of Army military and civilian comptroller jobs. HRA
alleges that its proposal was "substantially equal" to that of the
awardee, but that HRA's proposal was wrongfully eliminated from the
competitive range and the contract unjustifiably awarded to ARRO at an
estimated 77 percent higher cost.
We deny the protest in dart and dismiss it in part.
The solicitation provides that award will be made to the responsible
offeror whose conforming offer "is determined to be the best overall
response, price or cost and other factors considered." The solicitation
further provides for the technical evaluation of proposals under the
following three categories, in descending order: technical adequacy,
personnel qualifications, and organizational experience. While the
solicitation does not specify maximum point scores to be allocated for
the stated evaluation factors, it does state that of the three
categories, technical adequacy is most important, but personnel
qualifications and organizational experience together will be given
greater weight than technical adequacy. The solicitation also stated
that cost proposals would be subordinate to technical considerations,
and would be evaluated separately from technical proposals, but would
not be assigned numerical weights. The record shows that 11 proposals
were received, two of which were determine to be within the competitive
range.
By letter dated September 11, 1986, the agency informed HRA that its
proposal had been "evaluated in accordance with the evaluation factors"
set forth in the solicitation, and that " b ased upon this evaluation,
it has been determined that your proposal will not be included in the
zone of consideration." HRA responded to the notice by letter dated
September 18, in which it requested a debriefing and informed the agency
that it would protest the award of a contract at a cost which exceeded
the cost proposed by HRA. By letter dated September 26 (which HRA
states it received on October 7), the agency informed HRA that the
contract was awarded to ARRO on the basis of the evaluation factors set
forth in the solicitation. The letter further indicated that the
contract price exceeded that which HRA proposed by $153,309, and stated:
". . . the evaluation panel's determination . . . reflect s .
. . only upon the aspects of the manner in which you would
conduct this particular project, as presented in your proposal."
On October 10, HRA filed with our Office a protest in which HRA
contended, in general terms, that because of its prior experience in
performing a similar Army contract, the completeness of its proposal,
and lack of latitude for "unique approaches to the research design," its
technical proposal must have been substantially equal to the awardee's.
Since the proposals probably differed only as to "minor aspects," HRA
argued, the Army's award at a higher estimated cost than the protester's
was improper.
The Army initially argues that HRA's October 10 protest is untimely
under 4 C.F.R. Sec. 21.2(a)(2) (1986) because it was not filed within 10
days of the date HRA was informed by the Army's September 11 letter of
the exclusion of its proposal from the competitive range. HRA contends
that its protest is timely since it was filed within 10 days of October
7, when HRA first learned of the protest basis--that the Army improperly
excluded its "substantially equal" proposal from the competitive range
and awarded the contract at a higher estimated cost. HRA states further
that prior to October 7, it was not able to state a specific basis for
protest as required by our Bid Protest Regulations, 4 C.F.R. Sec. 21.1
(c) (4), because of the "vague generalities" stated in the Army's
September 11 letter and the agency's alleged unwillingness to discuss
the specific reasons for excluding HRA's proposal. We resolve this
issue in favor of the protester.
Under 4 C.F.R. Sec. 21.2(a) (2), to be timely a protest must be filed
within 10 days after the basis of protest is known or should have been
known. A protest must, however, set forth a detailed statement of the
legal and factual grounds of protest, 4 C.F.R. Sec. 21.1 (b)(4), and is
subject to dismissal for failure to comply with this requirement. We
have held that where the information available to a potential protester
leaves uncertain whether there exists a basis for protest, a protest
filed within 10 days of the event by which the offeror should or does
become aware of the specific grounds for the protest is not untimely.
See Dynalectron Corp.-- Request for Reconsideration, B-219664.3, May 13,
1986, 86-1 C.P.D. P 452 at 3-4; Raytheon Support Services Co.,
B-219389.2, Oct. 31, 1985, 85-2 C.P.D. P 495 at 6. But cf., Continental
Telephone Co. of California, B-222458.2, Aug. 7, 1986, 86-2 C.P.D. P
167, where the protest was untimely even though the protester argued,
unpersuasively, that it was unable to provide sufficiently specific
details earlier. In this instance we find that HRA's protest that the
agency improperly excluded its proposal from the competitive range is
timely since it was filed within 10 days after the protester learned of
the agency's award to an offeror whose contract cost was higher than
that which the protester proposed.
Concerning the merits of the protester's argument that its allegedly
substantially equal proposal was improperly excluded, the record shows
that among the 11 proposals received, HRA's proposal ranked sixth in the
overall technical evaluation. HRA received a total technical score of
50 points (out of a possible 100), which was 16.6 points lower than the
awardee's technical score. In view of these evaluation results, which
based on the general allegations made in HRA's October 10 letter we
cannot conclude were unreasonable, HRA's proposal was not determined to
be substantially equal to the awardee's proposal. Thus, as between HRA
and the awardee, the awardee's technically superior proposal was the
determinative factor for award. Since HRA's proposal was unacceptable,
its lower estimated cost would not require that it be included within
the competitive range. See Delcor International, B-221230, Feb. 13,
1986, 86-1 C.P.D. P 160. HRA's October 10 protest is, therefore,
denied.
On October 24, the agency debriefed HRA concerning the evaluation of
its proposal. Based on information obtained at the debriefing, HRA
first raised a number of detailed and specific objections to the
technical evaluation of its proposal in the comments responding to the
administrative report, which HRA filed in our Office on December 4. In
the comments the protester contends that it was improperly and unfairly
evaluated and that the technical deficiencies cited by the evaluation
panel at the dehriefing are either nonexistent or so trivial that they
easily could have been clarified. The protester expresses the view that
the panel should have known that it would perform certain tasks not
discussed in its proposal because it had done them in a
previously-awarded Army contract for the performance of another job
analysis "virtually identical" to that being solicited in the subject
procurement. The protester further alleges in its comments that the
proposal was downgraded because the evaluation committee chairman was
professionally incompetent to judge certain aspects of the proposal and
was biased against the firm because of disagreements that arose between
HRA and the same panel committee chairman, who served as the contracting
officer's representative during the performance of the previous
contract.
The Army argues that the specific allegations concerning the
evaluation of the proposal raised in HRA's comments on the
administrative report are untimely because the protester learned of
these matters at the October 24 debriefing and, therefore, should have
protested them within 10 days of the debriefing.
We agree. As we previously stated, a protester may delay filing a
protest if the information it has is insufficient to afford a statement
of legally sufficient grounds of protest or, indeed, to determine
whether a protest basis exists. However, the protester must file its
protest within 10 days of the time it becomes aware of the protest
basis. Thus, we have held that a protest is timely where it was filed
within 10 working days of a debriefing at which the protester became
aware of details regarding the evaluation of its proposal which, prior
to the debriefing, were unavailable. Intelcom Educational Services,
Inc., B-220192.2, Jan. 24, 1986, 86-1 C.P.D. P 83 at 4.
On the other hand, where the protester learns of details which form
the basis of a protest or, as here, additional bases of protest not
previously stated, such protest issues are subject to the requirement
for being filed in our Office within 10 days of the time the protester
knew or should have known of those bases, even though our decision on an
earlier filed protest by the same firm concerning the same procurement
is still pending. See Pease and Sons, Inc., B-220449, Mar. 24, 1986,
86-1 C.P.D. P 288 at 6.
Documents submitted by HRA show that all of the new issues it raises
in its comments on the administrative report (which it alleges the
agency refused to discuss prior to the debriefing), were addressed at
the October 24 debriefing. We thus conclude that the protest issues HRA
filed on December 4, based on information obtained at the October 24
debriefing, are untimely and, therefore, will not be considered. 4
C.F.R. Sec. 21.3(f).
Harry R. Van Cleve
General Counsel
Matter of: Kal Maintenance, Inc.
File: B-225355
Date: January 29, 1987
Air Force regulation that generally prohibits the use of performance
and payment bonds in nonconstruction contracts does not preclude a
requirement for such bonds where the contracting officer's determination
to require them is based on the fact that (1) a contract for similar
services at another installation was terminated for default and (2) the
procuring activity historically has had difficulties with contractors
performing similar services.
Kal Maintenance, Inc. protests the terms of invitation for bids (IFB)
No. F49642-87-B-0049, issued September 5, 1986 by the Washington Area
Contracting Center, Andrews Air Force Base, Maryland, for military
housing maintenance services. Kal Maintenance contends that the
requirement for performance and payment bonds violates applicable Air
Force regulations and unduly restricts competition.
We deny the protest.
The Air Force has postponed bid opening on this small business
set-aside indefinitely pending the resolution of this protest. The
agency contemplated the award of a contract having a base period of 9
months (from January 1 through September 30, 1987) with three 1-year
options. The contractor is to provide all personnel, equipment, tools,
material, supervision, and other items or services necessary to perform
the required maintenance at Andrews Air Force Base and two other
facilities located in Brandywine and Davidsonville, Maryland. The work
includes maintenance management, service calls, and change of occupancy
maintenance, which entails restoration of walls, appliances, floors, and
windows. It also includes painting, preventive maintenance, and
cleaning for 2,084 units of military family housing, recurring installed
equipment maintenance, equipment facilities maintenance, and operation
of a "U-Fix-It" store.
At issue is whether the IFB's requirement that the successful
contractor furnish a 100 percent performance bond and a 20 percent
payment bond violates the applicable Air Force regulation governing the
use of such bonds for other than construction contracts. This
regulation, promulgated on January 6, 1986, provides in pertinent part:
"Performance and payment bonds shall not be required in other
than construction contracts unless there is a documented history
of prior default by contractor in the particular type of work to
be required. Additionally, documentation of the inherent or
recurring nature of such default, and the reasons therefore, must
be prepared before a determination to use such bonds can be made."
Air Force Federal Acquisition Regulation Supplement Sec. 28.107-1
(Jan. 6, 1986).
The procuring activity justified the inclusion of the bond
requirements in this solicitation on two grounds. First, the activity
referred to the default of a contractor performing this type of work at
Wright Patterson Air Force Base, Ohio. Second, the activity referred to
the problems it has historically encountered with contractors performing
this type of service.
Kal Maintenance construes the regulation as constituting a clear
prohibition against such bona requirements on nonconstruction contracts
except where there is an actual history of prior default by contractors
performing similar work. The protester argues that the one isolated
instance of default at Wright Patterson Air Force Base and with prior
contractors does the fact that the procuring activity has had
difficulties not establish that default of these contracts is of an
inherent or recurring nature. The protester thus maintains that the
solicitation must be amended.
In a recent decision, we addressed identical concerns regarding the
inclusion of bond requirements in a solicitation for multi-family
housing maintenance at Hickam Air Force Base, Hawaii. DWS, Inc.,
B-224300, Dec. 18, 1986, 86-2 CPD P . In that case, the Air Force
justified the bond requirements by reference to the same instance of
default at Wright Patterson, as it cited here, as well as to the poor
performance by the incumbent and another prior contractor.
In the DWS decision, we construed the Air Force regulation as
limiting the discretion afforded contracting officers under the Federal
Acquisition Regulation (FAR), 48 C.F.R. Sec. 28.103-1 (1986), in
determining whether to include bond requirements in a nonconstruction
contract. Under the Air Force regulation, we stated, only after a
showing of prior default could the contracting officer look at
additional matters, and then for the sole purpose of deciding whether
the default is of an inherent or recurring nature. In DWS, we found
that the Air Force's justification satisfied this regulatory scheme,
that is, that the single instance of default at Wright Patterson
satisfied the requirement that a history of prior default in similar
contracts be shown, and that the unsatisfactory performance under the
current and predecessor contracts at Hickam demonstrated that the
default was of an inherent or recurring nature.
For the same reasons, we find that the Air Force's inclusion of the
bond requirements in the protested solicitation for services at Andrews
is proper. As we stated in our prior decision, a single instance of
default at Wright Patterson is sufficient to show a history of default,
and the poor performance of prior contractors at Andrews demonstrates
that such default may be of an inherent or recurring nature.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: List Processing Co., Inc.
File: B-225353
Date: February 5, 1987
Protest alleging that awardee's proposal does not comply with the
specifications in several respects is denied, since agency's
determination that awardee's proposal was acceptable had a reasonable
basis and fact that protester does not agree with agency's conclusion
does not itself render the evaluation unreasonable.
List Processing Co., Inc. (LPC), protests the award of a contract to
Computer Network Corporation (Group I Software) under request for
proposals (RFP) 86-RFP-01, issued by the Selective Service System. The
RFP was issued for a United States Postal ZIP+4 (9 digits) software
package to be used in the operation of the mailing system at Selective
Service's Data Management Center (DMC) at Great Lakes, Illinois. LPC
argues that Group I's package did not comply with the specifications in
several respects. Also, LPC complains that Group I offered an
unrealistically low price.
We deny the protest.
The RFP was issued on June 16, 1986. Three offers were received
which included offers from Group I and the protester. Technical
discussions were held with all three firms and operational tests of the
software packages proposed by Group I and the protester were conducted
at DMC prior to Selective Service's request for best and final offers.
The third firm did not complete the operational test requirements and
withdrew from the procurement. Both of the remaining firms were
determined to be technically acceptable. Since LPC's price of $32,200
was significantly higher than Group I's price of $19,365, Group I was
determined to be the lowest, technically acceptable offeror and award
was made to that firm on September 24.
LPC contends that Group I's software does not meet the RFP
requirement that the software system take advantage of the IBM virtual
storage access method (VSAM) file structure available on the Selective
Service mainframe computer. The protester also argues that Group I's
software is not capable of ZIP code validation and assignment of ZIP+4
in a single pass of the sorted Selective Service input file as required
by the RFP. Further, according to the protester, Group I's software
does not meet the RFP requirement for random access of the master file.
Finally, LPC says that Group I's price was unrealistically low.
Selective Service states that the software system provided by Group I
does, in fact, meet the three RFP requirements cited by the protester.
In each instance, the agency states that Group I's proposal offered the
disputed feature and in each case the evaluation team observed that the
software performed the function during the operational test.
LPC has failed to prove its contentions. In response to the agency's
report, the protester has restated its suspicions but has offered no
evidence that Group I's software does not meet the three disputed
requirements. Moreover, LPC's interpretation of the disputed
requirements appear to be too narrow. The RFP requirement for a single
pass system, for example, is merely recited, without explanation.
According to the protester, Group I's software is not a single pass
system because, LPC believes, it consists of three steps, each of which
processes a record in turn. LPC acknowledges, however, that all three
steps may occur as part of one operation, which is the most we believe
the solicitation required. Consequently, we have no basis upon which to
object to the selection.
Finally, LPC contends that Group I's price was unrealistically low.
The solicitation did put offerors on notice that unrealistically low
prices may be considered as evidence of lack of technical competence or
of a failure to understand contract requirements. Here, however, the
agency evaluators determined that Group I's proposal was acceptable and
its price realistic. In any event, the submission of a below cost or
low profit offer is not illegal and provides no basis in itself for
challenging the award of this firm fixed-price contract. ORI Inc.,
B-215775, Mar. 4, 1985, 85-1 CPD P 266.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Dr. Francis G. Stehli -- Travel Expenses
File: B-225352
Date: September 21, 1987
A member of the Energy Research Advisory Board was issued a
round-trip airline ticket for travel to attend a 3-day Board meeting in
Seattle which was due to end on a Friday afternoon. His return flight
to his home in Oklahoma City was scheduled for Saturday. When the
meeting ended several hours earlier than anticipated on Friday, he
decided to return to Oklahoma City that afternoon on a different airline
at an additional cost of $223. Because he unilaterally altered the
approved travel schedule, his reimbursement for the additional expense
incurred is limited by the constructive cost of the approved travel.
His claim for $223 may be paid only in the amount he would originally
have been allowed that Friday and Saturday if he had not departed from
Seattle earlier than scheduled.
An authorized certifying officer of the Department of Energy requests
a decision on the question of whether Dr. Francis G. Stehli, a member of
the Energy Research Advisory Board, may be reimbursed $223 he paid in
cash for airfare related to his attendance at a Board meeting. In the
described circumstances, he may be reimbursed on a limited,
constructive-cost basis.
Dr. Stehli was Dean of the College of Geosciences at the University
of Oklahoma and a member of the Energy Research Advisory Board when the
Department of Energy asked him to travel from Oklahoma City, Oklahoma,
to Seattle, Washington, to attend a quarterly meeting of the Board on
Wednesday, Thursday, and Friday, August 14, 15, and 16, 1985. He
received no compensation for his services, but was authorized
reimbursement of his travel expenses.
The agency arranged for a round-trip ticket to be issued to Dr.
Stehli for travel on Frontier Airlines and scheduled his return travel
from Seattle for Saturday, August 17. When the meeting ended several
hours earlier than anticipated on Friday, he decided not to remain
overnight in Seattle. Frontier Airlines then informed Dr. Stehli that
he could no obtain a reservation for a Friday departure, and he arrange
for return transportation that afternoon with another airline. He did
not seek agency approval for the new arrangement, but instead exchanged
the ticket he had been issued and made an additional out-of-pocket
expenditure of $223 to obtain a new ticket from the other airline.
Recognizing that the $223 cash ticket purchase exceeded the General
Services Administration's (GSA) $100 limit for non-emergency cash
purchases of passenger transportation services, the Energy Research
Advisory Board requested GSA to approve the cash transaction under 41
C.F.R. Sec. 41.203-2. GSA refused to approve payment for the entire
amount on the view that the agency's original travel arrangements, which
provided for Dr. Stehli's return on Saturday via Frontier, were
determined to be most advantageous to the Government, and concluded that
any additional cost was the traveler's responsibility.
GSA did, however, recommend partial reimbursement on the following
basis:
"Had Dr. Stehli remained in Seattle and departed according to
schedule he would have only paid the cost of the overnight stay in
a hotel and if necessary his meals.* * * He may be reimbursed up
to, but not over, the amount he would originally have been allowed
while on travel."
The Department of Energy now requests our review of the conclusions
reached by GSA in the matter.
Members serving without pay on advisory committees established by the
Secretary of Energy when called away from their homes or regular places
of business may be allowed travel expenses, including per diem in lieu
of subsistence, as authorized by 5 U.S.C. Sec. 5703. See 42 U.S.C. Sec.
7234. Members of advisory committees, generally, have been recognized
as being subject to the same travel provisions and principles as
Government employees traveling on official business. Cultural Property
Advisory Committee, 64 Comp. Gen. 34 (1984). As such, their travel is
subject to the Federal Travel Regulations, FPMR 101-7 incorp. by ref.,
41 C.F.R. Sec. 101-7.003 (FTR). Although GSA based its determination on
provisions of paragraph 1-2.2b-1 of the FTR, which concerns authorized
methods of transportation, we believe reimbursement should be based on
consideration of paragraph 1-3.4, which provides:
"b. Reduced rates.
"(1) Use of special lower fares.
"(a) Through fares, special fares, commutation fares, excursion
fares, and reduced-rate round trip fares shall be used for
official travel when it can be determined before the start of a
trip that this type of service is practical and economical to the
Government.* * *
* * * * *
"c. Unequal fares available. * * * when common carriers furnish
the same method of travel at different fares between the same
points for the same type of accommodations, the lowest cost
service shall be used unless use of a higher cost service is
administratively determined to be more advantageous to the
Government."
We have held that under these provisions of the regulations, an
employee must bear the added expense of higher cost airline tickets
purchased to obtain an earlier return than scheduled from a temporary
duty assignment, in the absence of an agency determination that the
higher cost service is more advantageous to the Government. See
B-179696, March 18, 1974.
In the present case, no determination was made by the agency that Dr.
Stehli's change in itinerary, and use of higher cost airline service
than approved, was advantageous to the Government, and we are
consequently unable to conclude that he is entitled to full
reimbursement of the additional costs he incurred through his unilateral
decision to deviate from the approved schedule. In keeping with the
general principle that Government personnel may be reimbursed on a
constructive travel basis when they deviate from officially approved
travel itineraries, however, we would not object to the implementation
of GSA's recommendation that Dr. Stehli be reimbursed in an amount not
to exceed the traveling expenses he would have been allowed had he
adhered to the approved schedule. Compare, Laxman S. Sundae, B-185652,
December 28, 1976; 29 Comp. Gen. 485 (1950), and 6 Comp. Dec. 93
(1899).
Comptroller General
of the United States
Matter of: Steven L. Karty - Relocation Expenses Temporary v.
Permanent Duty Station
File: B-225351
Date: June 2, 1987
An employee's permanent duty station was to be relocated to larger
quarters at a new site approximately two miles distant from the old duty
station. Due to the need for extensive renovation of the new quarters,
the employee and others were quartered at an interim location, which was
closer to the employee's residence, for a period of 9 months. Upon the
subsequent move to the newly renovated quarters, the employee claims
entitlement to relocation expense reimbursement, contending that the
interim move was a permanent change of station and that when the move
was made to final destination, it increased his commuting distance more
than 10 miles. The claim is denied. Whether an assignment to a
particular location is temporary or permanent is a question of fact. In
this case the record shows that the interim location was clearly a
temporary duty station and that the employee's subsequent move to the
renovated office space does not entitle him to relocation expenses.
This decision is in response to a request from the Chief, Accounting
and Finance Division, Defense Communications Agency (DCA). It concerns
the entitlement of one of its employees to be reimbursed permanent
change of station relocation expenses. We conclude that the employee is
not so entitled, for the following reasons.
Mr. Steven L. Karty was employed by the DCA in October 1983, located
in its Systems Engineering Support Division (Code G630), at DCA
Headquarters, 8th Street and So. Courthouse Road, Arlington, Virginia.
At that time, Mr. Karty resided at 1605 North Brunswick Street, Sterling
Park, Virginia.
In early 1984, due to a need for office space suitable for special
access program work for the Code G630 division, the agency decided to
move Mr. Karty's division out of DCA headquarters. Space was located at
Arlington Hall Station, Arlington Boulevard at South Jackson Street,
Arlington, Virginia, approximately 2 miles from DCA Headquarters. 1/
However, due to the deteriorating condition of the building at Arlington
Hall Station, considerable renovation work was required. On June 4,
1984, pending construction funding approval and actual renovation,
elements of the Code G630 division, including Mr. Karty's office, were
moved to offices at the Mitre Corporation complex on Dolley Madison
Boulevard, McLean, Virginia, a location even closer to Mr. Karty's
Sterling Park residence. This move lasted until February 27, 1985, at
which time the Code G630 division personnel were relocated to the
renovated quarters at Arlington Hall Station. At the time of this
latter move, Mr. Karty still resided at 1605 North Brunswick Street,
Sterling Park, Virginia.
Mr. Karty asserts eligiblity to relocate his residence based on the
contention that the move made to the Mitre Corporation complex was a
permanent change of station and that when he was transferred to
Arlington Hall Station in February 1985, this constituted another
permanent change of station which resulted in an increase to his
commuting distance to that new station of more than 10 miles.
The agency states that there was an immediate need to relocate the
division in which Mr. Karty was employed and that since the larger
permanent quarters at Arlington Hall Station had to be renovated, the
move to the Mitre complex was only an interim move. In this regard, DCA
notes that none of the Code G630 division employees involved in the
move, including Mr. Karty, had their duty station designation changed to
reflect the move to the Mitre complex. All employees retained
Arlington, Virginia, as their designated permanent duty station.
The provisions of law governing entitlement of Federal employees to
be reimbursed for expenses of travel, transportation and subsistence are
contained in chapter 57 of Title 5, United States Code, and implementing
regulations. Under the provisions of chapter 2 of the Federal Travel
Regulations, FPMR 101-7 (September 1981) (FTR), an employee may not be
reimbursed relocation expenses incident to a temporary duty assignment
away from his permanent duty station or place of abode from which he
commutes daily to his duty station. Entitlement to be reimbursed such
expenses arises only when the employee is transferred on a change of
official station for permanent duty. Under FTR para. 2-1.5b(1), which
governs short distance transfers, the relocation of a residence is not
considered as incident to a change of station for expense reimbursement
purposes unless the one-way commuting distance from the old residence to
the new official duty station has been increased at least 10 miles more
than the distance was from the old residence to the old official duty
station.
We have held that the question as to whether an assignment to a
particular location is to be considered a temporary duty assignment or a
permanent duty assignment is a question of fact to be determined from
the orders directing the assignment, the duration of the assignment, and
the nature of the duties to be performed under those orders. See Peter
J. Dispenzirie, 62 Comp. Gen. 560 (1983); and Peck and Snow, B-198887,
September 21, 1981. Further, the agency designation of an employee's
permanent duty station as being at a particular location is not
necessarily determinative. Frederick C. Welch, 62 Comp. Gen. 80 (1982).
Neither the law nor the FTR contain a definition of "permanent duty
station" or "temporary duty station." However such terms are defined in
Appendix D of Volume 2, Joint Travel Regulations. The term "permanent
duty station" is defined, in part, as being the building or other place
where an employee regularly reports for duty. The term "temporary duty
station," is defined as being the place of duty to which an employee is
assigned for a temporary period of time in connection with government
business from which he will proceed or return to his permanent duty
station.
In the present situation, because of the need for larger and
specialized office space, the agency searched for adequate permanent
accommodations. If the newly found Arlington Hall Station
accommodations had not required extensive renovation, then Mr. Karty's
division would have immediately moved there. In such case, since the
new permanent duty station was only approximately 2 miles away from the
old permanent duty station, the entitlement claimed by Mr. Karty could
not have arisen. FTR paragraph 2-1.5b(1), above.
Clearly, the decision was made to move the G63O division from DCA
Headquarters to new permanent quarters. Since the Arlington Hall
offices could not be occupied due to needed renovation work, the
division would have to be located elsewhere as an interim measure. The
agency chose offices at the Mitre complex where other elements of DCA
were already located. On the basis of the reported circumstances of the
present case, it is our view that such duty station was temporary and
that the permanent change of station move which occurred was from DCA
Headquarters to Arlington Hall Station. Accordingly, Mr. Karty is not
eligible to relocate his residence incident to that move and be
reimbursed those expenses by the government.
We note that if the move to Mitre was to be considered a temporary
duty move, DCA suggested that Mr. Karty might be entitled to roundtrip
mileage from his place of residence to that location during the period
in question. Paragraph C4458 of Volume 2, Joint Travel Regulations
(JTR), change 215, September 1983, provides:
"* * * Temporary duty travel by privately owned conveyance may
be authorized or approved from home or domicile to a place of
temporary assignment and return without requiring the employee to
report first to his headquarters or regular place of duty. In
authorizing such travel, the travel-directing official will
consider the interests of the Government with regard to mission
requirements, relative expense, and practicability." Underscoring
supplied.
Mr. Karty's normal commuting trip from his residence in Sterling Park
to both his old or his new permanent station in Arlington required him
to pass near the interim duty point it McLean. In view of the fact that
he benefited significantly by the reduced commuting time and distance
during the period June 3, 1984, to February 27, 1985, we do not believe
it would be appropriate to reimburse Mr. Karty for that travel.
Comptroller General
of the United States
1/ Mr. Karty's residence to duty location commuting distance and
travel time would be reduced by this move.
Matter of: Martin Advertising Agency, Inc.
File: B-225347
Date: March 13, 1987
1. Protest that agency should have found protester's offer more
desirable than the awardee's is denied, since a protester's mere
disagreement with the contracting agency's evaluation does not render
that evaluation unreasonable, and the record does not otherwise suggest
the evaluation was improper.
2. An agency, during negotiations, does not have to discuss elements
of a proposal that are not deficient; it is not the agency's
responsibility to help a firm whose proposal, although acceptable,
simply is not the best one in the competition, to bring the proposal up
to the level of the other ones.
3. Whether or not a firm actually performs in compliance with
contract requirements is a matter of contract administration, which the
General Accounting Office does not review as part of its bid protest
function.
Martin Advertising Agency, Inc., protests the award of a contract to
the Clearwater Sun under a request for proposals (RFP) issued by the
Public Affairs Office of MacDill Air Force Base, Florida, for a
commercial enterprise installation newspaper, the "Thunderbolt." Martin,
the incumbent, essentially argues that its proposal to publish the
newspaper was better than Clearwater's and questions why, if the Air
Force did not think so, the agency did not help Martin improve or
explain its offer during negotiations. Martin also complains that the
Air Force discriminated against the firm, and that Clearwater is not
performing the contract properly.
We deny the protest in part and we dismiss it in part.
The Air Force issued the solicitation on September 8, 1986, in
accordance with the procedures for obtaining commercial enterprise
newspapers set forth in Air Force Regulation 190-1 (April 15, 1985). In
this type of agreement, the right to sell and circulate advertising to
Air Force readers generates revenue for the contractor, so that the
government does not pay the contractor any money. 1/
The RFP as issued specified general requirements for the publication,
and stated that a selection group would hear oral presentations; review
data furnished by the offerors and independently secured data; and
visit offerors'sites. The RFP provided that the group would investigate
each offeror's competence, reliability, and technical, production and
business capabilities and resources, and would choose "the best
obtainable product and service."
Three proposals were received in response to the RFP, and were
reviewed by the selection group, which was comprised of eight
representatives from various base activities. The Air Force held
discussions and then issued a revised RFP, which requested best and
final proposals by November 12. The revised RFP stated that proposals
were to be evaluated on frequency of processed color capability, quality
of graphic display, availability of back-up production personnel and
equipment, and extra color offered, in addition to compliance with the
size, color process, type and pick-up delivery requirements of the
original statement of work. The request for best and final proposals
reiterated that the primary criterion for selection was the acquisition
of the best obtainable product and service. Based on the comments of
the selection group, the chair person chose the Clearwater Sun for award
and, according to the Air Force, notified all offerors of the decision
by telephone on November 14; Martin received a letter of confirmation
on November 20. On December 1, in response to a request Martin filed
with the Air Force pursuant to the Freedom of Information Act (FOIA), 5
U.S.C. Sec. 552 (1982), Martin received copies of the other offerors'
proposals. Martin filed its protest with our Office on December 4.
The Air Force initially argues that Martin's protest of the
evaluation of proposals is untimely since Martin was notified of award
on November 14 and did not protest to our Office until December 4. In
this respect, according to our Bid Protest Regulations Martin had to
protest these issues no later than 10 working days after the basis of
protest was or should have been known. 4 C.F.R. Sec. 21.2(a)(2) (1986).
We find the protest timely in that regard, however, because Martin did
not receive copies of Clearwater's initial or best and final proposals
until December 1, and Martin could not have known what Clearwater was
offering, in contrast to its own offer, until that date.
As to whether Martin's offer should have been judged better than
Clearwater's, the record shows that the Air Force found Clearwater's
proposal to be superior to Martin's at both the initial and best and
final stages with regard to all evaluation factors. It is not the
function of our Office to determine independently the relative merit of
proposals, Georgetown Air & Hydro Systems, B-210806, Feb. 14, 1984, 84-1
C.P.D. P 186, but rather to review whether an evaluation was
unreasonable or in violation of procurement laws or regulations. Joule
Engineering Corp.--Reconsideration, 64 Come. Gen. 540 (1985), 85-1
C.P.D. P 589. Martin basically is questioning the Air Force's
evaluation judgment. However, that, in itself, does not provide a legal
basis for our Office to object to the award, since it is
well-established that a protester's mere disagreement with the
contracting agency's evaluation does not render that evaluation
unreasonable. See Harbert International, Inc., B-222472, July 15, 1986,
86-2 C.P.D. P 67. Martin has offered no evidence, other than
disagreement, to rebut the Air Force's evaluation of proposals, and
there is nothing in the protest record that convinces us that the Air
Force's relative assessment of proposals was unreasonable. Accordingly,
we will not question the agency's judgment in this regard.
We also find no legal merit in Martin's complaint that the Air Force
did not help Martin improve, or let the firm explain, its initial offer
during negotiations. The record shows that the Air Force included all
three offerors in the competitive range and invited all offerors to
"present" their proposals to the reviewing committee. After
Clearwater's presentation, and after the other offeror's presentation,
the committee asked a number of questions relating to transportation
problens, color separations, company location, printing presses, quality
control procedures, copy deadlines, and size of the work force.
Examples of the offerors' work were distributed. Clearwater was also
questioned about its computer link-up, delivery system, advertising
layout delivery date, photo reproduction quality and editorial changes.
The committee did not ask Martin any questions after the firm's
presentation since the committee was fully familiar with Martin's work
as Martin was the incumbent.
The committee then went on to recommend the selection of Clearwater,
citing the offeror's superior graphics, color and copy quality, as well
as the advantage of utilizing the professionable capability of a large,
technically advanced company. The committee noted that Martin "had not
listed any specifics in their proposal" and that its presentation did
not indicate any services beyond the minimum required. The Air Force
then revised the RFP to include the evaluation factors listed above and
requested best and final proposals from all offerors.
The purpose of negotiations is to lead all offerors having a
reasonable chance at being selected into the areas of their proposals
that require amplification, or to point out weaknesses or deficiencies
in them, and then to afford the firms the opportunity to revise their
offers. See Furuno U.S.A., Inc., B-221814, Apr. 24, 1986, 86-1 C.P.D. P
400. We think that the Air Force met its obligation in that respect.
The Air Force considered Martin's proposal, both as initially submitted
and revised, to have met the agency's requirements and to be technically
acceptable, so there were no deficiencies or uncertainties that required
discussions. In evaluating the relative merits of the firms' proposals,
the Air Force concluded that Martin's proposal simply was inferior to
Clearwater's. As a general matter, the items that are to be discussed
during negotiations are those weaknesses in the offeror's own proposal
relative to the solicitation requirements, not the merits of a
competitor's offer or how to help the offeror bring its proposal up to
the level of other proposals. See generally 51 Comp. Gen. 621 (1972).
We note here that Martin suggests that the Air Force's request for
best and final offers was a subterfuge to allow Clearwater to match
Martin's proposal. It is clear from the record, however, that the Air
Force considered Martin's proposal to be inferior, rather than superior,
to Clearwater's before issuing the request; moreover, the issuance of
such a request to offerors with whom the agency negotiated, and who
still have a chance at the award, is procedurally correct upon
completion of the discussions. See Joseph L. De Clerk and Associates,
Inc., B-221723, Feb. 10, 1986, 86-1 C.P.D. P 146.
Martin also alleges that the community will be inconvenienced by a
change in publisher, and that the award to Clearwater constitutes
discrimination against Martin, a woman-owned small business.
As indicated above, our Regulations provide that to be timely a
protest must be received in our Office within 10 working days after the
basis of protest was or should have been known. 4 C.F.R. Sec.
21.2(a)(2). Oral notification of the basis of protest is sufficient to
start the running of the 10-day period for filing a protest; a
protester may not delay filing its protest until receipt of some written
notification that merely reiterates the information transmitted orally.
Pacific Fabrication--Request for Reconsideration, B-224065.2, Sept. 9,
1986, 86-2 C.P.D. P 277.
In contrast to the issue we have treated on the merits, Martin did
not need to know the contents of Clearwater's offer to protest these
matters, so that the protest is untimely as to these issues. We note
for the record, however, that the Air Force's evaluation contains no
evidence of the alleged discrimination.
Finally, Martin challenges the awardee's compliance with the
contract's delivery terms and the required tabloid size of the paper,
and asserts that Clearwater did not publish during the week after award.
Whether a contractor actually performs according to the solicitation's
requirements, however, is a matter of contract administration, which is
the responsibility of the contracting agency and is not reviewable under
our Bid Protest Regulations. 4 C.F.R. Sec. 21.3(f) (1); Satellite
Services, Inc., B-219679, Aug. 23, 1985, 85-2 C.P.D. P 224.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
1/ Although appropriated funds are not involved, since the Air Force
is conducting this procurement our Office has jurisdiction to decide
Martin's protest under the Competition in Contracting Act of 1984, 31
U.S.C. Sec. 3552 (Supp. III 1985). Artisan Builders, 65 Comp. Gen. 240
(1986), 86-1 C.P.D. P 85; Micronesia Media Distributors, Inc.,
B-222443, July 16, 1986, 86-2 C.P.D. P 72.
Matter of: Ingersoll-Rand Company
File: B-225346; B-225348; B-225349
Date: March 6, 1987
Protests raising the same issues as those resolved in a recent
decision on protests by the same protester and involving the same agency
and awardee are dismissed because no useful purpose would be served by
further consideration of the protester's complaint.
Ingersoll-Rand (Rand) protests three contract awards to Compressor
Engineering Corporation (CECO) by the Defense Logistics Agency (DLA)
under request for quotations (RFQ) Nos. DLA700-86-O-EA64,
DLA700-86-Q-E843 and DLA700-86-OE744. Each of these RFQs requested
prices to provide parts for use in oil free compressors for which Rand
was the original manufacturer. Rand contends that it was treated
unfairly by DLA in these procurements, because CECO's products were
subjected to qualification acceptance tests that were different from and
less stringent than those required of Rand in previous procurements for
the same items.
We dismiss these protests.
The issues raised by Rand in these protests are virtually identical
to those considered and denied in our decision in Ingersoll-Rand Co.,
B-224706 et al., Dec. 22, 1986, 86-2 CPD P 701. In that decision, we
rejected Rand's contention that the 2,000-hour acceptance tests that it
was required to conduct at its own expense in earlier procurements
should have been required of all other offerors on the two solicitations
in question, because no such testing requirements had been included in
the solicitations and because proposals must be evaluated only on the
basis of factors specified in the solicitations. (Likewise, we note
that there are also no testing requirements in the three RFQs that Rand
is now protesting.) For the same reason, we rejected Rand's argument
that DLA should have added the agency's costs of testing the products to
CECO's prices. In addition, we pointed out that a protester's
presumable interest as the beneficiary of a more restrictive
specification is not protected under our bid protest function.
In another recent decision, Ingersoll-Rand Co., B-225052, Jan. 27,
1987, 87-1 CPD P , we dismissed Rand's protest because the issues it
raised were identical to those resolved in the December 22, 1987,
decision (cited above) and the awardee and contracting agency were also
the same. We determined that no useful purpose would be served by our
further consideration of those issues. It is clear from Rand's present
protests and its comments on DLA's report on these protests that the
issues raised are again the same as those resolved by our Office in the
December 22, 1986, decision, and Rand has presented no new arguments or
evidence in support of its allegations. Again, we see no useful purpose
to be served by our further consideration of them.
The protests are dismissed.
Ronald Berger
Deputy Associate
General Counsel
B-225343-O.M.
June 26, 1987
1. Section 502(c) (1) of the Housing Act of 1949, 42 U.S.C. Sec.
1472 (c) (1), generally prohibits FmHA from accepting prepayment of
section 515 (rural housing loans), approved after December 21, 1979,
unless it takes action to obligate the borrower to utilize the assisted
housing for the same purpose, for a period of 15 years or 20 years,
depending upon how the project is financed. At any time, Secretary of
Agriculture may permit other uses of prepaid property if he determines
no need exists for such housing or that Federal or other financial
assistance provided to the residents of such housing will no longer be
provided.
2. Although Gillanders v. Smith, an unreported 1986 District Court
memorandum decision granted a preliminary injunction to enjoin private
defendants from evicting low-income tenants from certain section 515
subsidized apartment buildings even though loans were made before
December 21, 1979, this ruling does not constitue a ruling on the merits
of the case and is of no precedential value but was issued to lessen
economic hardship on tenants prior to jury trial on issue of whether
FmHA can refuse prepayments. GAO may report on issues raised by case but
should not express opinion on issues raised prior to decision.
3. Under the section 515 Housing Program, the income of tenants would
not be considered with regard to post-1979 loans only where prepayment
sought prior to 15 or 20 period and then only to determine if need still
exists for such housing.
4. Despite the general policy in Housing Act against displacement of
tenants, there is no specific prohibition on accepting or requesting
loan prepayments that would lead to displacement of tenants where
prepayment would otherwise be authorized. It if unclear if conflicting
policy under 42 U.S.C 1472(b) (3),requiring refinancing or graduation
whenever Secretary determines borrowers income or earning capacity would
make him eligible for financing from private credit sources, applies to
section 515 loans.
Date: June 26, 1987
To: Assistant Comptroller General, RCED J. Dexter Peach
Attn: Associate Director, RCED - John H. Luke
From: Associate General Counsel - Rollee H. Efros
Subject: Request for Legal Opinion on Farmers Home Administration's
(FmHA) Acceptance of Section 515 Loan Prepayments--B-225343-O.M.
This refers to your request for assistance in responding to the
Chairman of the House Subcommittee on Banking, Housing and Community
Development's request for a legal opinion on the Farmers Home
Administration's (FmHA) practice of accepting prepayments of rural
rental housing loans approved prior to December 21, 1979, under the
program authorized by section 515 of the Housing Act of 1949, 42 U.S.C.
Sec. 1485. In preparing this opinion we obtained the position of FmHA
as stated in a letter sent to GAO by Michael C. Wilkinson, Deputy
Administrator, Program Operations, FmHA dated February 18, 1987 (FmHA
letter). Your questions and our responses follow:
1. "Whether the Housing Act of 1949, as amended, permits borrowers to
voluntarily refinance or prepay their section 515 loans without being
requested to do so by FmHA."
Section 502(c) (1) of the Housing Act of 1949, 42 U.S.C. Sec.
1472(c) (1), appears to generally prohibit FmHA from accepting
prepayment of section 515 (rural housing) loans approved after December
21, 1979, the date of enactment of the section, unless it takes action
to obligate the borrower to utilize the assisted housing for the same
purpose, for a period of 15 years if the project is not receiving
credits for low-interest loans under 42 U.S.C. Sec. 1490a(a) (1) (B),
Sec. 1490a(b) or section 8 housing assistance. The restrictive period
is extended to 20 years from the date of approval, if after December 21,
1979, for all other section 515 loans. However, prior to the end of the
15 or 20 year period, the Secretary of Agriculture may permit the
prepaid property to be used for other purposes if he determines:
" . . . that there is no longer a need for such housing and
related facilities to be so utilized or that Federal or other
financial assistance provided to the residents of such housing
will no longer be provided."
While the prepayment restrictions do not apply to section 515
contracts entered into before December 21, 1979, the Secretary of
Agriculture is required to give displaced tenants "a priority for
relocation in alternative housing" assisted under section 514 or 515
programs. 42 U.S.C. Sec. 1472(c) (2). This preference applies only
where the contract is prepaid or refinanced on or after October 8, 1980
and if displacement occurred because of rent increases, a change in use
of the housing or other changes caused by prepayment or refinancing.
Id.
The FmHA letter agrees that, "with appropriate notification to FmHA,"
all loans made prior to December 21, 1979, may be prepaid at any time
barring existence of a restriction in a contract because of a servicing
action. It notes that other section 515 loans may be prepaid at the
option of the borrower after the appropriate 15 or 20 year period has
elapsed and even before that time:
". . . if the State Director determines that there is no longer
a need for such housing and related facilities to be so utilized
or that Federal or other financial assistance provided to the
residents of such housing will no longer be provided."
We have found no reported decision interpreting the prepayment
provision. The case you submitted to us, Gillanders v. Smith, (E.D.
Calif. Civ. No. S-86-867 EJG), is an unreported memorandum decision
issued on November 26, 1986, in which District Court Judge Edward J.
Garcia granted a preliminary injunction to enjoin private defendants
from evicting lowincome tenants from certain apartment buildings
constructed and subsidized under the section 515 program and to enjoin
FmHA from allowing buildings to be withdrawn from the section 515
program by accepting prepayment of construction loans. The preliminary
injunction does not constitute a ruling on the me rits of the case but
was issued because the court found that the economic harm that
defendants would suffer through delaying the eviction and the
inconvenience that FmHA would experience from delaying prepayment would
be less than the hardship that the plaintiffs would suffer by being
removed from their homes in a situation in which there was found to be
no satisfactory alternative housing available. The injunction is still
in effect and the case is currently scheduled for a jury trial on
November 30.
The Gillanders case is significant because the loans at issue were
made prior to December 21, 1979 and are not specifically subject to the
15 or 20 year restrictions on utilization of the property. The court
found that plaintiffs had raised serious litigable questions as to
whether the FmHA has discretion to refuse prepayment of the section 515
loans, as to whether due process requirements had been violated by the
lack of notice or opportunity to be heard given to plaintiffs prior to
FmHA's prepayment decision and the cancellation of their rent subsidies,
and as to whether defendants' action had a discriminatory impact in
violation of Title VII of the Fair Housing Act (42 U.S.C. Sec. 3604(b)).
While recognizing that the FmHA regulation applicable to prepayment of
section 515 loans, 7 C.F.R. Sec. 1965.90, does not impose the same
prepayment condition for loans approved prior to December 21, 1979 as
those after that date, plaintiffs contended that FmHA had authority to
refuse prepayment under circumstances provided under 7 C.F.R. Sec.
1965.87 which provides:
"The Administrator of the Farmers Home Administration may, in
individual cases, make an exception to any requirements of this
Subpart not inconsistent with the authorizing statute if the
Administrator finds that application of the requirement would
adversely affect: (a) the interest of the Government; or (b) the
immediate health or safety of the tenants or the community. The
Administrator will exercise the authority only at the request of
the State Director. The State Director will submit the request
supported by data which demonstrates the adverse impact,
identifies the particular requirement involved, shows proper
alternative courses of action, and identifies how the adverse
impact will be eliminated."
Although the court's memorandum stated that the court had not
concluded that the plaintiffs had shown a likelihood of success on the
question of whether FmHA had discretion to refuse prepayment requests on
pre-1979 contracts, it found that this issue was a fair question for
litigation and was a sufficiently serious question to support
preliminary injunctive relief. The effect that permitting prepayment of
the section 515 loan would have on the tenants, the community and the
government program was found to meet the requirements of the regulation
in that replacement cost to the government for each low income housing
unit would be $41,000 and that there was no available alternative
housing in the area.
FmHA argued that the government did not have the discretion to refuse
prepayment for pre-1979 contracts and that plaintiffs we reattempting to
do what Congress refused to do, i.e., impose restrictions on prepayment
of loans approved prior to the effective date of the prepayment
restrictions. The defendants also contended that the court was
misreading the regulation which was intended to permit exceptions that
favor prepayment and not exceptions that favor tenants seeking to
contest such action. The court was unconvinced by FmHA's interpretation
of the regulation in light of a comprehensive national housing policy
giving a high priority to low income housing and which, at 42 U.S.C.
Sec. 1471(g), states that:
" t he programs authorized by this subchapter shall be carried
out, consistent with program goals and objectives, so that the
involuntary displacement of families and businesses is avoided"
emphasis added .
This memorandum decision, in itself, is not of any precedential value
because it merely granted a preliminary injunction pending litigation of
this issue and several others not relevant to your questions.
Furthermore, it did not reach a conclusion on the issue of whether FmHA
could refuse to accept prepayment of pre-1979 section 515 contracts. It
appears to us that FmHA is probably correct in its interpretation of the
law because the more specific and recent statute limiting its discretion
in refusing pre-1979 prepayments would usually prevail over general
statutory provisions stating an intent to provide low-income housing and
a general policy against displacement of low-income tenants.
However, under GAO policy, while we can summarize the provisions of
the Housing Act and report on the issues raised and status of the
Gillanders case, any report to Congress on this issue should not express
an opinion on the specific issues to be resolved by the courts. See GAO
Report Manual 5-17.
"2. In accepting loan prepayments, must FmHA consider the income of
tenants, not borrowers, in accepting loan prepayments or requesting
borrowers to refinance section 515 loans?"
With regard to post-1979 loans, the only circumstance in which income
of tenants would be considered under the prepayment provision would be
when the Secretary wants to permit prepayment of the loan prior to the
expiration of the applicable 15 or 20 year period. Prepayment prior to
the end of such period is only permitted upon a determination
"that there is no longer a need for such housing and related
facilities to be so utilized . . . ." 42 U.S.C. Sec. 1472(c)(1).
The Secretary would consider income of tenants with regard to
prepayment of pre-December 21, 1979 loans only to determine if such
tenants:
"are displaced due to a change in the use of the housing, or to
an increase in rental or other charges, as a result of such
prepayment or refinancing...." 42 U.S.C. Sec. 1472(c)(2).
Under FmHA regulations, the District Director is required to send a
report to the State Director on each prepayment case that includes the
income range of the tenants presently in the project. 7 C.F.R. Sec.
1965.90(d). Neither the law nor FmHA regulations require consideration
of the income of the borrowers in prepayment cases.
The FmHA letter stated that when loans are eligible to be prepaid,
FmHA is required to accept prepayment at the borrower's request.
Therefore tenant income and displacement may not be considered.
However, in those cases in which the State Director is required to
determine whether or not to accept prepayment, tenant income "and the
concomitant rent overburden and displacement are required to be taken
into account."
"3. Does the Housing Act of 1949 prohibit FmHA from accepting loan
prepayments or requesting financing if it would lead to involuntary
displacement of tenants?"
Despite the general policy in the Housing Act against displacement of
tenants, there is no specific prohibition on accepting or requesting
loan prepayments that would lead to displacement of tenants where
prepayment would otherwise be authorized. FmHA may not accept an offer
to or request prepayment of section 515 loans within the applicable 15
or 20 year period without obligating the borrower to continue utilizing
the facilities for the purposes of the rural housing program. While
this would provide some protection for tenants, this does not guarantee
that specific tenants would not be displaced provided the housing is
still utilized in the program. Even this requirement can be
circumvented by a finding, prior to the end of the period, that such
housing is no longer needed.
Furthermore, there is a conflicting policy under 42 U.S.C. Sec.
1472(b) (3) that requires refinancing or graduation of loans whenever
the Secretary determines that the borrower's income or earning capacity
would make him eligible for financing from private credit sources. This
provision does not apply to "guaranteed" loans so it is unclear as to
whether insured loans under the section 515 program would be subject to
this provision. FmHA believes that section 1472(b) (3) requires it to
"request graduation whenever the borrower's circumstances permit it . .
. . " However, the FmHA letter also states that:
". . . we are taking the position that we will only make the
request if, after graduation of the loan, the housing will
continue to serve the population which the original loan was
intended to serve."
The FmHA letter takes the same position as was taken with regard to
the first question and stated that voluntary prepayment must be accepted
under certain conditions (loans approved prior to December 21, 1979 and
not subject to restrictive use provisions because of servicing actions)
and may be accepted in others (when the appropriate 15 or 20 year
restrictive period has lapsed, or prior to the end of the period if the
State Director makes the necessary determinations with regard to
utilization need or Federal or other financial assistance to residents
of such housing is terminated). In neither case is involuntary
displacement of tenants directly considered. However, the Gillanders
case may eventually lead to a different result.
Matter of: John F. Hein
File: B-225342
Date: April 15, 1987
An employee may not be reimbursed temporary quarters subsistence
expenses while temporarily renting a home he planned to purchase at his
new duty station, notwithstanding the fact that he was furnished
erroneous information by employees of his agency.
We are asked whether Mr. John F. Hein, an employee of the U.S.
Customs Service, is entitled to temporary quarters subsistence expenses
during the period he rented a home at his new duty station which he
intended to purchase. 1/ The fact that he and his family occupied the
house on a rental basis prior to purchase does not change the fact that
the house may not be considered temporary quarters, since he intended to
purchase the home and use it as his permanent residence. Therefore, he
is not entitled to temporary quarters subsistence expenses.
On March 30, 1986, Mr. Hein transferred from Chicago, Illinois, to
Miami, Florida. He states that on May 12 or 13, 1986, he telephoned the
National Finance Center, U.S. Customs Service, and was advised that the
Government would honor his claim for temporary quarters subsistence
expenses even though he rented the home he was about to purchase in
Miami as his permanent residence. Mr. Hein indicates that on the basis
of advice that he would receive reimbursement if he presented a rent
receipt to verify his lodging costs, he subsequently rented the home
before purchasing it. He claims temporary quarters subsistence expenses
for himself and family in the amount of $3,140.64, including meals and
lodging costs for the rented home. The period of temporary quarters
claimed was from July 1 through August 21, 1986, the day before he
completed the purchase of the home.
The National Finance Center denied his claim for the reason that the
home was his permanent residence rather than temporary quarters and that
any erroneous advice he received from an employee of the National
Finance Center leading him to believe his claim would be honored did not
constitute a basis for authorizing reimbursement.
Temporary quarters subsistence expenses may be authorized for a
limited period after vacating the residence at the old duty station and
before occupying the permanent residence at the new duty station.
Entitlement requires the quarters to be temporary rather than permanent,
as set forth in Federal Travel Regulations, para. 2-5.2c (Supp. 10,
March 13, 1984), incorp. by ref., 41 C.F.R. Sec. 101-7.003 (1984). This
paragraph provides that if the employee moves into quarters initially
intending them to be temporary quarters they may be considered temporary
even though they later become a permanent residence. The employee must
establish to the satisfaction of the employing agency that he or she
initially intended the quarters to be temporary. Paragraph 2-5.2c
states, "In making this determination the agency should consider such
factors as: the duration of the lease, movement of household effects
into the quarters, type of quarters, expressions of intent, attempts to
secure a permanent dwelling, and the length of time the employee
occupies the quarters."
In Mr. Hein's case there is no question that he intended to remain in
the rented quarters. Before renting the house he states that he
telephoned the National Finance Center and reported that "he was about
to purchase the home," thereby indicating an initial intent to make the
home his permanent residence. We have denied temporary quarters
subsistence expenses where the employee rents the home that he intends
to later purchase as his permanent residence, even though final
settlement of the purchase has not taken place. James W. Pierce,
B-202103, July 16, 1981. Therefore, since Mr. Hein never intended the
residence to be temporary, his claim for temporary quarters subsistence
expenses must be denied.
The fact that Mr. Hein may have received erroneous advice from a
Government employee that his claim would be honored and that he relied
on the advice before renting the home does not provide a basis for
allowing his claim. We have repeatedly held that although it is
unfortunate when an employee receives information in this type of
circumstance, this does not bind the Government to pay an unauthorized
claim. See, John Pradarits, 56 Comp. Gen. 131 (1976).
Accordingly, for the foregoing reasons Mr. Hein's claim for temporary
quarters subsistence expenses may not be paid.
Comptroller General
of the United States
1/ Mr. Thomas E. Garrison, Chief, Travel Section, U.S. Customs
Service, National Finance Center, requested our decision.
Matter of: E.M. Brown, Inc.
File: B-225340
Date: April 7, 1987
The withdrawal of a bid in person is not the exclusive method that
can be utilized for that purpose, since a bid can be withdrawn in person
by a bidder prior to bid opening or by mail or telegraphic notice
received in the Office designated in the solicitation prior to bid
opening.
E.M. Brown, Inc. protests the award of a contract to Earthmovers
Unlimited under invitation for bids (IFB) No. SCS-70-PA-86 issued by the
United States Department of Agriculture for the restoration of an
abandoned mine project in Pennsylvania. Brown contends that the agency
erred in accepting a late bid withdrawal and the substitution of a new
bid from Earthmovers.
We deny the protest.
The agency reports that when the bids were opened on November 25,
1986, two bid envelopes were in hand from Earthmovers. The first
envelope opened contained Earthmovers' initial bid of $66,489.00; the
second envelope contained Earthmovers' withdrawal of the first bid and a
new bid of $43,366.50. Brown's bid of $52,540.00 was the next low bid.
Brown protested to our Office contending that the contracting officer
had carried Earthmovers'second bid with the withdrawal of the initial
bid into the bid room after all of the other bids had been opened.
Brown further contends that Earthmovers did not withdraw its first bid
in person, contrary to the requirements of the Federal Acquisition
Regulation (FAR), 48 C.F.R. Sec. 52.214-7(f) (1985), which states as
follows:
"(f) A bid may be withdrawn in person by a bidder or its
authorized representative if, before the exact time set for
receipt of bids, the identity of the person requesting withdrawal
is established and that person signs a receipt for the bid."
It is the agency's position that Earthmovers' withdrawal and
substitute bid were received prior to bid opening and were in the
possession of the bid opening officer at the time bids were opened, that
is, that the contracting officer did not bring the Earthmovers' letter
of withdrawal and its replacement bid with him when he entered the bid
opening room after opening commenced. Furthermore, the agency asserts
that the withdrawal of a bid in person is not the exclusive means by
which a bid can be effectively withdrawn.
In comments on the agency report, the protester appears to have
abandoned its allegation that the Earthmovers' documents were late. 1/
Instead, it focuses on the lack of any withdrawal of the Earthmovers'
bid in person, and that the bid was not withdrawn prior to bid opening
because the withdrawal was included with the new bid and thus the agency
did not become aware of the withdrawal until after the time set for bid
opening. We find no merit to this protest.
One method for bid withdrawal is the one cited by the protester and
referred to above, that is, withdrawal by an authorized representative
in person prior to the time set for receipts of bids. Under the plain
language of the clause and other provisions of the solicitation,
however, personal withdrawal is by no means the exclusive method that
can be utilized. "A bid may be withdrawn in person by a bidder"
(emphasis added) or it "may be modified or withdrawn by written or
telegraphic notice if such notice is received in the office specified
in the solicitation by the time specified for receipt of bids." 48
C.F.R. Sec. 52.214-5(b). The obvious purpose of these requirements is
to prevent fraud or abuse of the competitive bid system. Thus, as in
the case of a bid submission, a written withdrawal or modification of a
bid need only be in the possession of the designated government office
by the time set for bid opening. Actual knowledge by government
officials of the written withdrawal of a bid prior to bid opening is not
required.
The record shows that Earthmovers not only called the contracting
office about its intended bid withdrawal but that the envelope
containing the withdrawal and the replacement bid arrived at the
designated office before the exact time set for the opening of bids.
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ There is no evidence on the record to rebut the agency's
contention that the Earthmovers' documents were in the possession of the
bid opening officer at the time opening commenced and therefore the
protester has not met its burden of proof. Xerox Special Information
Systems, B-215557, Feb. 13, 1985, 85-1 CPD P 192.
Matter of: Consolidated Aeronautics
File: B-225337
Date: March 27, 1987
Protest that description of aircraft scrap residue in a sale
invitation for bids was misleading because it did not identify specific
aircraft type included is without merit where description was broad
enough to encompass scrap from various aircraft and protester could have
inspected lot to determine what was included in it.
Consolidated Aeronautics protests the award of Item 97 to Aim
Enterprises, Inc. under an invitation for bids (IFB) covering Sale No.
27-6417, conducted by the Defense Reutilization and Marketing Service
(DRMS), Defense Logistics Agency. 1/ Consolidated principally contends
that because certain material in the item was grossly misdescribed, the
misdescribed material should be reoffered for sale with a proper
description so that Consolidated and all interested parties have an
opportunity to compete for the purchase.
We deny the protest.
The IFB's index listed Item 97 as "Aluminum, Wrecked Aircraft,
Scrap," and the schedule stated "ALUMINUM, WRECKED AIRCRAFT AND IRONY,
SCRAP: Consisting of wing sections, fuselage, parts of helicopter (F14)
with ferrous and nonferrous and other material not to exceed 5% of total
weight.... 15,000 pounds."
The IFB's standard conditions urged bidders to inspect the property
prior to bidding. Because Consolidated's Bidders' List Application did
not indicate any interest in scrap, as opposed to usable, aircraft
parts, the firm was not sent a copy of the IFB.
After the issuance of the IFB, but before the inspection date, the
sales activity received 7240 pounds of "wrecked A-4 aircraft scrap."
The agency added this scrap to the property already in Item 97, without
amending the IFB's Item 97 description. This was done under the sales
activity's operating procedures that permit additions to scrap lots of
material of identical description up until the inspection date.
Aim was the high bidder at $.165 per pound, and Marie Ward was second
high at $.161. Two other bidders in the $.11-.12 range completed the
competition. The high bidder and the third high bidder had inspected
the property prior to bidding and after the A-4 material was added to
Item 97. Based on its high bid, Aim was awarded the contract.
About 1 month later, Consolidated protested the award, stating that
it had recently learned that Item 97 contained A-4 aircraft residue,
which is more valuable than F-14 aircraft residue. Only two portions of
the lot are now at issue, a tail assembly and an ejector seat. (The
record is unclear as to what percentage of Item 97 these items comprise,
but it appears that it is not a major portion.) The agency has withheld
delivery of these items until the protest is resolved.
The agency first argues that Consolidated is not an interested party
and that the protest is untimely. The agency asserts that Consolidated
is not an interested party because it did not submit a bid, and is an
untimely protester because the alleged misdescription of Item 97 should
have been raised prior to bid opening. We find no merit to either
point. Consolidated did not submit a bid because it allegedly was
misled as to what was being offered; it is clear that it is interested
in bidding on the A-4 residue. Thus, we view Consolidated as having the
requisite financial interest to be an interested party. See 4 C.F.R.
Sec. 21.0(a) (1986). Similarly, because Consolidated alleges that it
was misled by the IFB description and only learned later that A-6 scrap
was involved, the protest does not involve a solicitation defect
apparent on the face of the IFB; therefore, Consolidated was not
required to protest before bid opening. See 4 C.F.R. Sec.21.2(a).
Consolidated contends that A-4 aircraft residue is five times more
valuable than the F-14 residue which, the protester alleges, was what
the Item 97 description indicated. Because of the description,
Consolidated alleges, it did not inspect the lot or inquire further upon
receipt (source unstated) and review of the IFB prior to the opening
date.
The protester concludes that adding the A-4 residue without amending
the Item 97 description thus resulted in a substantial misdescription of
the sale property, which violated the solicitation's representation that
the property descriptions were to be based on the best information
available to the sales office.
The agency points out that the Item 97 description did not indicate
that only F-14 parts were included in the item and that the scrap nature
of the A-4 parts substantially reduced the value of these parts compared
to usable A-4 parts. The agency points out that the general description
in Item 97 encompassed A-4 scrap, despite the lack of specific reference
to that aircraft. At worst, the agency characterizes any possible
misdescription as an innocent error of judgment.
We find no basis to recommend a reoffer of the contested A-4 residue
for sale. While we think it would have been preferable for the agency
to have amended the description to reflect the A-4 parts since
apparently A-4 parts have a greater value than some other aircraft scrap
parts, we do not believe the agency was required to amend the
description or that Consolidated should have been misled. Item 97, in
our judgment, should not have been read as describing only F-14 aircraft
scrap. While "(F14)" was included in the description, the overall
description of wrecked aircraft, scrap, consisting of wing sections and
fuselage, indicates that more may be included than F-14 parts.
Certainly, the location of the term "(F14)" in the description,
immediately following "parts of helicopter," suggests that the protester
at the very least should have inquired as to what was meant since an
F-14 is not a helicopter. Moreover, although descriptions are
represented to be "based on the best information available to the sales
office," the sale terms and conditions also state that the government
"makes no warranty . . . as to quantity, kind, character, quality,
weight, size or description . . . ." Consolidated admits it knew there
was A-4 residue at the sales activity and it could have availed itself
of the inspection rights set forth in the solicitation, as did the high
and one of the other three bidders. That it did not do so because A-4
parts were not described is not persuasive--the protester does not
allege that in sales solicitation descriptions for scrap lots each
aircraft type represented by the scrap must be specifically identified.
Finally, the government appears to have received a reasonable price
for the lot, as four bidders participated, and the high bidder inspected
the lot before opening.
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ We consider this protest under 4 C.F.R. Sec. 21.11 (1986) as the
Defense Logistics Agency, by letter dated January 13, 1987, has agreed
to our considering bid protests involving its surplus property sales.
Matter of: National Federation of Federal Employees
File: B-225335.2
Date: February 5, 1987
A union local which represents federal employees is not an interested
party eligible to bring a protest because it is not an actual or
prospective bidder or offeror under the solicitation.
The National Federation of Federal Employees (NFFE) protests the
inclusion of Total Exposition Concept, Inc., and Eastern Maintenance and
Services, Inc., in the competition for a contract award under invitation
for bids (IFB) No. 03-86-B60041, issued by the Department of
Transportation, Federal Aviation Administration (FAA). We dismiss the
protest.
The procurement is being conducted pursuant to Office of Management
and Budget Circular No. A-76 to determine whether to contract for
services or continue performing them in-house with federal employees.
NFFE argues that Total and Eastern should not be permitted to compete
because they allegedly have threatened not to hire NFFE members if
awarded the contract.
Under the Competition in Contracting Act of 1984, 31 U.S.C. Sec.
3551 (2) (Supp. III, 1985), and our Bid Protest Regulations, 4 C.F.R.
Sec. 21.0(a) (1986), a protest may be brought only by an "interested
party," defined as an actual or prospective bidder or offeror whose
direct economic interest would be affected by the award or failure to
award the contract involved. Here, the protester, a union local
representing federal employees, is not an actual or prospective bidder
or offeror under the solicitation being challenged. As a result, the
protester is not an interested party eligible to maintain a protest.
National Association of Government Employees Local R7-23, B-221713, Apr.
3, 1986, 86-1 C.P.D. P 322.
NFFE argues that we should review its protest because the potential
bidders on the procurement are not aware of the companies' intentions.
Our authority to consider bid protests is defined by CICA, however, and
that authority simply does not extend to protests filed by other than an
interested party, as that term is defined in the act.
In any case, the propriety of actions that may be taken by a bidder
after receiving a contract award are matters of contract administration,
which are for consideration by the contracting agency, not our Office.
4 C.F.R. Sec. 21.3(f) (1)
The protest is dismissed.
Robert M. Strong
Deputy Associate
General Counsel
Matter of: H-V- Allen Co., Inc.
File: B-225326, B-225327, B-225879
Date: March 6, 1987
1. Contracting agency's decision to proceed with bid opening under
invitation for bids (IFB) in face of protest filed with agency before
bid opening constitutes adverse agency action on protest, and subsequent
protest to General Accounting Office is untimely where filed more than
10 working days after bid opening.
2. Protester qualifies as interested party despite its status as
fourth low bidder where protester seeks resolicitation of procurement on
the basis of defective specification and would have an opportunity to
rebid if the procurement were resolicited.
3. Under IFB for installation of fire sprinkler system, contracting
agency properly may include requirement that contractor have state fire
sprinkler contractor's license (1) in the interest of avoiding possible
interruption to contract performance due to state's efforts to enforce
licensing requirement; and (2) where seismic area in which agency
facilities are located requires special technical skills on part of
sprinkler contractor which contracting officer decides are best assessed
by state board through the licensing process.
H.V. Allen Co., Inc. protests any award under three solicitations
issued by the Navy: invitation for bids (IFB) No. N62474-85-B-5296 (IFB
-5296), for installation of fire protection systems at the Naval Supply
Center, Oakland, California; IFB No. N62474-84-B-4753, for repairs to
the fuel farm at the Defense Fuel Support Point, Norwalk, California;
and IFB No. N62474-86-B-B417, for installation of a fire sprinkler
system in Building 221 at the Naval Station, San Diego, California. The
protester challenges as unduly restrictive of competition the
requirement in each of the
IFBs that the contractor possess a California fire sprinkler
contractor's license. We dismiss as untimely the protest concerning IFB
-5296 (Naval Supply Center, Oakland) and deny the other two protests.
Allen initially filed its protest under IFB -5296 with the
contracting agency on November 11, 1986; bid opening was held as
scheduled on November 13. The Navy states, and Allen does not dispute,
that it was orally advised that its protest had been denied on November
13, followed by a written denial of the protest received by Allen on
November 17. Allen then filed its protest with our Office on December
1.
Where, as here, a protest is first filed with the contracting agency,
any subsequent protest to our Office must be filed within 10 working
days of actual or constructive knowledge of initial adverse agency
action on the protest. Bid Protest Regulations, 4 C.F.R. Sec. 21.2(a)
(3) (1986). The Navy's decision to proceed with bid opening on November
13 without taking corrective action in response to the protest
constituted adverse agency action, 4 C.F.R. Sec. 21.0(e), and since the
protest to our Office was not filed until December 1, more than 10
working days later, the protest is untimely. BST Systems, Inc.--Request
for Reconsideration, B-218628.2, June 11, 1985, 85-1 CPD P 670. We
dismiss the protest concerning IFB -5296.
The Navy also argues that Allen lacks the direct economic interest
necessary to qualify as an interested party to maintain the protests
because it was the fourth low bidder under all three IFBs. We disagree.
A protester is an interested party regardless of its standing in the
order of bids where, as here, the protester seeks resolicitation of the
procurement on the basis of a defective specification and would have the
opportunity to rebid if the procurement is resolicited. Tracor Jitco,
Inc., B-220139, Dec. 24, 1985, 85-2 CPD P 710.
Each of the IFBs in part requires installation of a fire sprinkler
system and specifies that the contractor 1/ must have a "valid C-16
State of California fire sprinkler contractor's license." Allen
challenges the licensing requirement, arguing that it unduly restricts
competition from out-of-state contractors. We find Allen's argument to
be without merit.
According to the Navy, there are two reasons for including the
licensing requirement in the IFBs: (1) the license is required by the
state of California, which has jurisdiction for this purpose over the
facilities where the work will be performed; and (2) the seismic area
in which the facilities are located calls for special technical skills
on the part of sprinkler installers which, in the Navy's view, are
better assessed by the state certifying board through the licensing
process than by the contracting officials. The protester disagrees with
the Navy's justification for the licensing requirement, arguing that
California does not have jurisdiction over the facilities involved and
that the licensing process does not reflect any special expertise on the
part of the sprinkler installer which is not already required by the
specifications in the IFB.
With regard to the significance of California's licensing
requirement, Allen's contention that California has no jurisdiction over
the facilities where the work is to be performed apparently is based on
its belief that a state can never exercise jurisdiction over a federal
facility. In fact, a state may enforce a licensing requirement against
a federal contractor provided it does not conflict with federal laws or
interfere with federal powers. See R.K. Burner Sheet Metal, Inc.,
B-222799, Apr. 25, 1986, 86-1 CPD P 410. In any event, whether
California ultimately would be found to have jurisdiction is not
dispositive, since a contracting agency properly may include a local
licensing requirement in an IFB where it concludes that contract
performance may be delayed due to the state's effort to enforce
compliance with the licensing requirement. William B. Jolley, B-208443,
Nov. 17, 1982, 82-2 CPD 455; United Security Services, Inc., 53 Comp.
Gen. 51 (1973).
A licensing requirement also may be included in an IFB where the
contracting officer determines that only performance by a licensed
contractor will meet its minimum needs. United Security Services, Inc.,
supra. Here, the Navy states that the seismic area in which the Navy
facilities are located requires technical expertise on the part of the
sprinkler contractor which can most effectively be determined through
the state's licensing process, a position which on its face is
reasonable, in our view. While the protester disagrees with the Navy, it
offers no support for its position other than conclusory statements
questioning the effectiveness of the licensing process. As a result, we
see no basis on which to object to the Navy's determination regarding
the value of the licensing requirement in selecting a qualified
contractor.
Finally, we find Allen's request for a conference on the protests,
first made in its comments on the Navy's reports, to be untimely. Our
Bid Protest Regulations require that conferences be held no later than 5
days after receipt of the agency report, and specify that a request for
a conference should be made at the earliest possible time in the protest
proceedings. 4 C.F.R. Sec. 21.5(a) (b). Thus, as a practical matter, a
conference request must be made before the agency report is received in
order to schedule the conference within the regulatory timeframe. H.L.
Carpenter Co.--Reconsideration, 65 Comp. Gen. 184 (1986), 86-1 CPD P 3.
In any event, a conference only provides a forum for an oral exchange
between the parties; the protest ultimately is decided only on the
written record. Here, Allen had a full opportunity to present its
arguments and respond to the Navy's position in its comments on the
Navy's reports.
The protester also has asked that we conduct an investigation into
the Navy's practice of including a state licensing requirement in
procurements for fire sprinkler systems. As discussed above, the
protester has shown no basis on which to question the reasonableness of
the Navy's decision to include the licensing requirement in the IFBs at
issue here. Consequently, we see no reason to review further the Navy's
practice in this area.
The protest concerning IFB -5296 is dismissed; the other two
protests are denied.
Harry R. Van Cleve
General Counsel
1/ IFB No. N62474-86-B-B417 (San Diego) was amended to require that
the "installer" of the sprinkler system, rather than the contractor,
possess the state license.
Matter of: Dura Electric Fluorescent Starter Division
File: B-225323
Date: March 2, 1987
1. Award to bidder on basis of Buy American Act certification that
firm will supply domestic products must be preceded by contracting
officer decision that bidder is capable of doing so, and General
Accounting Office does not review such affirmative responsibility
determinations except in limited circumstances.
2. Where bidder certifies in accordance with the Buy American Act
that it intends to supply a domestic product, it is obligated to do so
upon acceptance of its bid, and whether the firm in fact meets its
obligation is a matter of contract administration, which the General
Accounting Office does not review.
3. Failure of proposed awardee to appear on certified manufacturers
list does not render firm ineligible for award where solicitation
provides alternatively that firms not on list will be required to meet
first article test requirements.
Dura Electric Fluorescent Starter Division protests the award of any
contract to Radionic Hi-Tech, Inc., under Defense Logistics Agency (DLA)
invitation for bids (IFB) No. DLA40086-B-A442, for a quantity of
fluorescent starters. We dismiss the protest in part and deny it in
part.
Dura first alleges that more than 50 percent of the components of the
starter Radionic, the proposed awardee, will furnish are of foreign
origin so that, in accordance with the Buy American Act, 41 U.S.C. Secs.
10a-d (1982), an evaluation factor should have been added to Radionic's
bid. Dura maintains that, with application of this factor, Dura's bid
would be low, entitling it to the contract award.
Radionic completed the Buy American Act certification in the IFB to
the effect that it would supply domestic products, and DLA obtained
verification from Radionic that its starter contains only one foreign
component comprising less than 50 percent of the total component cost.
The government's acceptance of the bid must be preceded by a finding
that Radionic indeed is capable of furnishing domestic items, i.e., is a
responsible concern; our Office does not review affirmative
responsibility determinations except in limited circumstances, which are
not applicable here. 4 C.F.R. Sec. 21.3(f) (5) (1986). Moreover,
acceptance of Radionic's bid will obligate the firm to supply domestic
products, and whether Radionic in fact complies with that obligation is
a matter of contract administration, which our Office also does not
review. 4 C.F.R. Sec. 21.3(f) (1); Despatch Industries, Inc.,
B-225063, Nov. 5, 1986, 86-2 C.P.D. P 524.
Dura also contends that the proposed award would be improper because
Radionic is not included on the Certified Ballast Manufacturers Latest
Monthly Listing, which Dura suggests is a prerequisite to award,
according to the IFB. As DLA states in its protest report, however,
page 2 of the IFB specifically provides that manufacturers (Radionic bid
as a manufacturer) not included in the Monthly Listing instead would be
required to meet first article testing requirements. Thus, Radionic's
omission from the Monthly Listing did not render the firm ineligible for
award.
Dura states that as of November 1986, Radionic had not received first
article approval from the General Services Administration (the agency
apparently charged with that function). The first article test
requirement will be part of Radionic's contract, however, and is not a
precondition to Radionic's receiving the award. Again, whether Radionic
ultimately complies with this contract requirement will be a matter of
contract administration, within the ambit of the contracting agency, not
our Office.
The protest is dismissed in part and denied in part.
Harry R. Van Cleve
General Counsel
Matter of: Robert W. Ralston
File: B-225311
Date: July 13, 1987
A Department of the Army employee who was selected to attend the
Armed Forces Staff College in Norfolk, Virginia, may not be reimbursed
subsistence expenses based on the rate for family-type government
quarters he and his family occupied in Norfolk when they accompanied him
during his training. The Army follows a policy of not paying for family
quarters for its civilian employees selected to attend the staff
college. Although he was invited to bring his family, he was advised in
advance that only the single-type quarters rate was authorized for him.
Consistent with this advice, he was paid on the single-rate basis, as
provided in Volume 2 of the Joint Travel Regulations (JTR), para. C4552.
This is in accord with the general rule that agencies are obligated to
pay only the subsistence expenses of their employees in such cases.
Betty D. Gardner, B-214482, September 7, 1984, distinguished.
This is in response to a request for an advance decision regarding a
Department of the Army civilian employee's entitlement to subsistence
payments based on the cost of family-type quarters he and his family
occupied when they accompanied him on his training assignment at the
Armed Forces Staff College. 1/ In light of the limitations the Army
generally imposes upon the payment of subsistence expenses to civilian
employees who are away from their permanent duty stations on temporary
duty (TDY) or in training, and in accordance with prior Comptroller
General decisions addressing this issue, we are unable to authorize
payment in this case since the employee decided to take his family with
him after being informed that he would only be reimbursed for his
personal subsistence expenses.
Mr. Robert W. Ralston, a civilian employee at the U.S. Army
Strategic Defense Command, Huntsville, Alabama, was selected to attend
the Armed Forces Staff College in Norfolk, Virginia, from January 22
through June 26, 1986. In the selection letter Mr. Ralston received
from the Commandant of the College, he was encouraged to bring his
family with him to Norfolk to accompany him during his stay.
Mr. Ralston's travel orders, issued January 10, 1986, authorized his
travel only, but stated that government quarters were available at the
staff college for $658 per month, which rate applied to government
family quarters. Pursuant to Mr. Ralston's inquiry whether the agency
would pay for his family to accompany him during his training
assignment, the agency finance and accounting officer responded on
January 13, 1986, that in accordance with the Joint Travel Regulations
(JTR), Volume 2, para. C4552-2i(3) (c), Mr. Ralston would be entitled to
46 percent of the daily high-cost area rate in the amount prescribed for
the Norfolk area increased by the amount paid for government quarters at
the single-occupancy rate. On January 19, Mr. Ralston departed
Huntsville for his training in Norfolk and took his family with him. He
and his family occupied government family quarters at the staff college
for which Mr. Ralston paid the family rate of $657.56 per month. He,
however, was reimbursed monthly by his agency based on only the single
rate.
The Army has determined that Mr. Ralston's reimbursement for
subsistence expenses must be limited to the rate for singletype
government quarters. Mr. Ralston asks review of that determination on
the bases that he was encouraged to bring his family to the college, the
college assigned him family quarters, and his travel order referred to
government quarters at the family rate. He also states that because he
received the finance officer's advice that he would be reimbursed only
at the single rate shortly before he left for Norfolk, he was unable to
dispute the matter until he returned from the training assignment. As
support for his position, he refers to a 1984 decision of our Office,
concerning another employee who attended the staff college, wherein we
allowed the family rate in computing the subsistence allowance.
Pursuant to the Training Act, 5 U.S.C. Secs. 4101-4118, an agency may
authorize and pay for all or a part of the expense of training for an
employee under regulations prescribed by the Office of Personnel
Management (OPM). The expenses that may be paid or reimbursed include
all or part of the "necessary costs" of the employee's travel and
subsistence expenses, including per diem as provided under 5 U.S.C. Sec.
5702. See 5 U.S.C. Secs. 4109(a) and 4118(a)(8).
Under this authority, OPM has prescribed guidelines for payment of
the subsistence expenses of "an employee" during an assignment lasting
more than 30 days, such as Mr. Ralston's. 5 C.F.R. Sec. 410.603(b) and
(c) (1986). Consistent with these guidelines, civilian employees of
Department of Defense agencies are authorized training subsistence
payments in accordance with Joint Travel Regulations (JTR), Volume 2,
para. C4552. Subparagraph C4552-2i(3) (c) provides that:
"Training subsistence payments for training programs of more
than 30 calendar days located within high cost areas in the
continental United States designated in Appendix E includes
Norfolk will be:
* * * * *
"2. If Government quarters are available * * * 46% of the
applicable maximum amount prescribed in Appendix E for the high
cost area concerned increased by the amount paid for Government
quarters * * *."
It is under these provisions that Mr. Ralston was advised by the
finance officer prior to departure for Norfolk that his subsistence
would be 46 percent of the area rate plus the cost of single-type
government quarters.
The general rule, as applied in prior Comptroller General decisions
regarding the payment of subsistence expenses of an employee's family
when family members accompany the employee on temporary duty or
training, is that the government is not obligated to pay the travel
expenses of the family, only those of the individual employee.
Additional expenses incurred by the employee's family are personal
expenses of the employee that must be borne by him. See 59 Comp. Gen.
245 (1980); B-158941, May 4, 1966. This is in accord with the
provisions of the law and regulations which provide for payment of all
or part of the subsistence expenses of the employee.
As noted previously, however, Mr. Ralston cites a Comptroller General
decision in which we held that collection of the additional amount
should not be made from a civilian employee of the Defense Logistics
Agency who resided in family-type government quarters at the Armed
Forces Staff College and was paid at a rate that included an allowance
for government family quarters. Betty D. Gardner, B-214482, September
7, 1984. In that case, however, not only did the employee discuss the
matter in advance with agency representatives who advised her that she
was entitled to the family quarters rate, but the agency authorized that
rate in writing prior to the employee's leaving on the assignment, and
she was reimbursed on that basis. It was not until after the employee
completed her training assignment that the agency sought to modify her
entitlement to that amount. We indicated that in order to revoke her
entitlement at that point, it would have to be determined that an
"apparent error" had occurred regarding her per diem authorization. We
stated that the question in her case did not involve additional per diem
for her dependents, but whether she was improperly reimbursed for
occupying family housing. Based on the facts, we determined that no
"apparent error" existed since the authorized per diem rate did not
clearly conflict with any law or regulation and the agency's policy of
not computing per diem based on the family housing rate was
unascertainable by the employee. Thus, the decision in the Gardner case
does not stand for the proposition that agencies must pay for family
housing when employees attend long-term training courses or TDY.
The facts of Mr. Ralston's case are clearly distinguishable from
those of the Gardner case. Before he left his permanent duty station
for the staff college, Mr. Ralston was informed that the Army would pay
only a per diem rate that included single-occupancy housing in
government quarters located in the vicinity of the college, he was paid
on that basis, and he never was authorized per diem at a rate that
included family housing. Therefore, his case does not involve a
modification of his travel orders. These differences preclude us from
basing a decision in this case upon the analysis set forth in the
Gardner decision.
Accordingly, we affirm the agency's decision to deny Mr. Ralston's
claim for additional reimbursement of subsistence expenses.
Comptroller General
of the United States
1/ The request for decision was submitted by the Commander, Finance
and Accounting Division, U.S. Army Missile Command, Redstone Arsenal,
Alabama.
Matter of: Marc D. Theriault - Highest Previous Rate Prospective Pay
Rate
File: B-225305
Date: June 24, 1987
An employee was transferred from a position with the United States
Army in Panama, in grade CZ-6, step 2 ($12,612), to a position with the
United States Navy in Florida, in grade GS-6, step 1 ($16,040). The
employee asserts his pay should have been set at step 2 of his new
grade, contending that Panama Area Personnel Board had set a higher pay
scale in 1982 to become fully effective over 21 months beginning in
January 1983. While the final part of that pay increase did not become
effective until shortly after his transfer in September 1985, he claims
credit for it for pay-setting purposes under highest previous rate rule.
The claim is denied. Use of the highest previous rate rule applies
only to the highest rate of basic pay actually received, not a
prospective rate of pay an employee might have received had he remained
in his former position. See Banaag S. Novicio, 64 Comp. Gen. 17 (1984).
This decision is in response to a request from the Employment
Director, Consolidated Civilian Personnel Office, Jacksonville Naval Air
Station. It concerns the entitlement of one of its employees to have
his rate of basic pay set at step 2 of grade GS-6, rather than the pay
of step 1 of that grade upon transfer in September 1985. We conclude
that he was only entitled to the pay of step 1, for the following
reasons.
Mr. Marc D. Theriault was an employee of the United States Army in
the Republic of Panama, performing the duties of an Emergency Medical
Technician, grade CZ-699-6, step 2 ($12,612 per annum). On September 1,
1985, he received a lateral transfer to the Mayport Branch Clinic, Naval
Hospital, Jacksonville, Florida, to the position of Industrial Hygiene
Technician, grade GS-699-6, with basic pay set at step 1 ($16,040 per
annum). Due to administrative error, Mr. Theriault's pay was adjusted
to step 2 of that grade on November 6, 1985. The error was discovered
and corrected on August 14, 1986, and his pay rate was returned to grade
GS-6, step 1. 1/ Effective August 31, 1986, Mr. Theriault received his
within grade increase to step 2.
Mr. Theriault contends that his pay rate on transfer should have been
established at grade GS-6, step 2, based on the highest previous rate
rule. He says that in September 1982, while he was employed by the Army
in Panama, the Panama Area Personnel Board approved a plan whereby the
then-existing pay scale was to be increased by 100 percent over a
21-month period. In January 1983, it was increased by 20 percent and in
January 1984, by an additional 20 percent. The final 60 percent was
given on September 29, 1985, nearly 1 month after his transfer. It is
his view that even though he was transferred on September 1, 1985, he
should be entitled to credit for that last pay increase for pay-setting
purposes since he could have worked until that date and then
transferred.
The establishment of an employee's rate of pay upon change of
position or type of appointment is governed by regulations issued by the
Office of Personnel Management pursuant to 5 U.S.C. Sec. 5334 (1982) and
published as 5 C.F.R. Part 531 (1986). Subsection 531.203(c) of those
regulations authorizes, generally, that the salary to be paid an
employee on transfer may be established at any rate of the employee's
current grade which does not exceed the highest previous rate of pay an
employee received prior to transfer. An exception to that rule is that
if the highest previous rate of basic pay falls below step 1 of the
employee's current grade, his current rate of pay is to be set at step 1
of the grade.
We have held that the highest previous rate rule applies only to the
salary previously earned by the employee. See Banaag S. Novicio, 64
Comp. Gen. 17 (1984) and decisions cited. A prospective rate of pay
that an employee might become entitled to receive had he remained in his
former position is not salary previously earned. Since Mr. Theriault's
pay rate in his new position, which was set at step 1 of grade GS-6,
exceeded the highest previous rate of pay he actually received while
employed by the Army in Panama, the agency's action is correct.
Comptroller General
of the United States
1/ The overpayment was waived by our Claims Group by letter,
Z-2879561, January 21, 1987.
Matter of: Para Scientific Company
File: B-225302
Date: March 25, 1987
1. Protest that solicitation clause--requiring offerors for
multiyear, multiple-award Federal Supply Service contracts to
demonstrate that their anticipated total sales under the contract are at
least $25,000--is ambiguous is untimely when submitted after the closing
date for receipt of proposals.
2. Agency properly rejected offer for Federal Supply Schedule
contract where record does not demonstrate that offeror met minimum
sales requirement set forth in solicitation, and agency's determination
based upon sales records supplied by offeror was reasonably based.
Para Scientific Company protests the rejection of its offer submitted
in response to solicitation No. M5-Q52-87 issued by the Veterans
Administration (VA) to obtain multiyear, multiple-award Federal Supply
Service (FSS) contracts to supply in vitro diagnostic substances,
reagents and test sets for the period from January 1, 1987 through
December 31, 1989. The VA states that the offer was rejected because
Para's anticipated sales to the government were not expected to meet the
anticipated sales requirements specified for the new contract.
We dismiss the protest in part and deny it in part.
The General Services Administration (GSA) normally is responsible for
FSS procurements but it has delegated to the VA authority for the
procurement of items that come within FSS Group 65, Part VII, which
includes the items which are the subject of this procurement. GSA has
determined that it is economically feasible to retain a company on a
multiple-award schedule contract only if its past sales experience
indicates sufficient demand for that company's products to warrant the
expense of negotiating and administering a contract with it. Venusa,
Ltd., B-214538, July 30, 1984, 84-2 CPD P 124. In previous contracts
the threshold for retention was $10,000 in anticipated sales over the
term of the contract. By letter of February 27, 1986, however, GSA
issued a change to its FSS Clause Manual, effective on the same date,
increasing the threshold for retaining a contractor to anticipated sales
of $25,000. Accordingly, the following clauses were included in the
present solicitation:
"I-FSS-639 INSUFFICIENT SALES (APR 84):
Where previous reports of orders received under an item for a
manufacturer's equipment indicate insufficient volume to warrant
its continuance, the government may discontinue its inclusion in
the schedule."
"I-FSS-639-A CONTRACT AWARD SALES CRITERIA (JAN 86):
Normally a contract will not be awarded unless anticipated
sales are expected to exceed $25,000.
It is the policy of the Government not to contract for a
product when the anticipated purchases of the item will be less
than $2,000 for a one year period. Contractors should not offer
products which do not meet this criteria."
Para's offer was among the 138 offers received by the VA and it
indicated that Para's sales under a previous contract which covered
1,062 items were only $11,083 for calendar year 1985. The contracting
officer conciuded that based upon the low sales the offer did not
warrant further consideration. The contracting officer also stated,
"With a total of 1,062 items I seriously doubt any individual item
reached the $2,000 threshold." Accordingly, Para's offer was rejected
for failure to meet the sales retention thresholds.
Para protested to the VA contending that clause I-FSS-639A does not
require previous sales of $25,000 per year but only that anticipated
sales for the term of the contract be $25,000 and that its total sales
to all customers exceeded $25,000. Para also stated that it had not
been told that the sales retention threshold had been changed from
$10,000 to $25,000 for the procurement.
The VA denied the protest by letter of November 17, 1986, stating
that only sales to the government could be considered when determining
whether a company meets the retention threshold. The VA also reexamined
the prior sales to the government reported by Para in calendar years
1983, 1985, and for the first two quarters of 1986. In this 2-1/2-year
period, Para's sales under the contract totaled $19,952. The VA
extrapolated from this figure and calculated that Para's sales to the
government over a 3-year period would be approximately $23,940. Thus,
the VA concluded that Para's offer was properly rejected because its
total sales to the government for the 3-year contract period were not
expected to exceed the $25,000 sales threshold.
To the extent that Para contends that the $25,000 threshold
requirement in the solicitation was ambiguous, the protest is untimely.
Our Bid Protest Regulations, 4 C.F.R. Sec. 21.2(a) (1) (1986), require
that protests based upon alleged improprieties in a solicitation which
are apparent prior to the closing date for receipt of initial proposals
be filed prior to that date. The closing date for receipt of proposals
here was September 12, 1986, and the record contains no indication that
Para submitted a protest objecting to any provision in the solicitation
to either the VA or our Office prior to that date. With regard to
Para's statement that it was not told of the threshold increase, we
point out that the solicitation clearly stated that the anticipated
total sales threshold was $25,000.
Para concedes that it cannot demonstrate that its anticipated sales
for each individual item offered are $2,000 per year. Indeed, Para
challenges the VA to show that any of its proposed awardees who are
distributors "or the majority of those awardees in the past" have met
this requirement. Para requests that we undertake an investigation to
determine if the old and the proposed awardees have complied with the
requirement. In this regard, we point out that it is the protester that
has the burden of affirmatively proving its case and that our Office
will not conduct an investigation to establish whether the protester's
speculations are valid. Alan Scott Industries, B-223121.3 et al., Aug.
6, 1986, 86-2 CPD P 163.
In our opinion, the VA reasonably rejected Para's offer as not
meeting the $25,000 prior sales requirement. While there is some
confusion in the record as to whether the threshold for sales to the
government was to be based upon a 1-year period or the entire 3-year
period of the present contract, the record shows that the VA ultimately
gave Para the benef it of allowing the less stringent 3-year period.
The VA used figures supplied by Para for contract sales for a total of
2-1/2 years and projected that Para's sales for a 3-year period would be
only $23,940, or below the threshold. Thus, it appears that the VA was
quite liberal in interpreting both the solicitation clause and prior
sales records in Para's favor, and even then Para did not qualify based
upon the minimum anticipated required sales to the government.
Finally, Para contends that clause I-FSS-639-A does not require that
an offeror meet both the anticipated sales minimums. We do not agree.
There is nothing in the wording of this clause reflecting an intent that
the offeror needs to comply with only one of the minimum sale
requirements. Such an interpretation would be unreasonable as it would
conflict with the VA's purpose in imposing the requirement which is to
reduce its contract acquisition and administration expenses. In any
event, as the VA found that Para's anticipated sales did not meet the
minimum for total sales and Para has conceded that its anticipated sales
for each item offered do not meet that minimum, Para has met neither
requirement. Accordingly, we conclude that the VA acted reasonably in
rejecting Para's offer.
The protest is dismissed in part and denied in part.
Harry R. Van Cleve
General Counsel
Matter of: Digital Devices, Inc.
File: B-225301
Date: March 12, 1987
1. Agency properly determined that a proposal was technically
unacceptable based on descriptive material submitted with the best and
final offer where the agency reasonably concluded from the material that
the offeror's equipment would not possess an essential feature required
by the solicitation.
2. Where an agency properly determines that a particular proposal is
technically unacceptable based on material submitted with the best and
final offer, it is not required to reopen negotiations to permit the
offeror to demonstrate the merits of its proposal.
3. In the absence of a finding that the agency unreasonably excluded
the protester from the procurement, the protester is not entitled to
recover the costs of preparing its proposal or of filing and pursuing
its protest.
Digital Devices, Inc. protests the award of a contract to SOLTEC
Corporation under request for proposals (RFP) No. DAAL02-86-R-9597,
issued by the U.S. Army Laboratory Command, Adelphi, Maryland. Digital
contends that the agency improperly determined the firm's best and final
offer was technically unacceptable. Digital does not now seek the award
of the contract, but claims that it is entitled to the costs of
preparing its proposal and of filing and pursuing his protest. We deny
the protest and the claim for costs.
The solicitation is for an 8-channel signal recorder for use in a
testing system. Initially, the agency attempted to procure the
equipment by soliciting sealed bids, but canceled the invitation for
bids (IFB) after determining that all of the bids received were
nonresponsive. With respect to ital Devices, the agency reports that
one of the reasons the firm's bid was considered nonresponsive was that
the bid was not accompanied by sufficient descriptive literature.
Digital had submitted a brief description of its signal recorder that
did not address the specific requirements set forth in the IFB. The
agency decided to continue the procurement by soliciting competitive
proposals, citing Federal Acquisition Regulation (FAR), 48 C.F.R. Sec.
15.103 (1986), and informed the firms that had submitted bids of the
schedule for negotiations and of the date for submission of best and
final offers. Award was to be made to that responsible offeror whose
proposal was technically acceptable and whose price was lowest.
The record shows that negotiations with each of the firms covered the
solicitation requirements that, based on its review of the descriptive
literature submitted with the bids, the agency believed would not be met
by the equipment offered. Among the requirements discussed with Digital
was solicitation paragraph C.4(e), which read as follows: "Selectable
pre and post-trigger delays from 100% pre-trigger to 100% post-trigger
for all channels simultaneously, with at least three (3) steps in
between." According to the agency, this feature would provide the
capability to capture and view a signal or waveform either prior to or
after a triggering event. The period over which the signal must be
subject to capture, says the agency, must extend from 100 percent of the
length of the record prior to the triggering event (the "record" is
comprised of a number of "samples") to 100 percent of the length of the
record subsequent to the triggering event. The agency says that
equipment not possessing this capability is unacceptable.
The protester submitted a best and final offer in the amount of
$27,490. Included with the offer was a detailed description of the
firm's proposed signal recorder. This material stated: "A pre or post
sample trigger is also available and may be selected by a PC I/O
personal computer input/output post instruction. This trigger may be
selected to precede or follow the actual sample trigger by 1 period, .75
period, .5 period, or .25 period, and is available on the back panel
through BNC connectors." The agency interpreted this statement as
indicating that Digital's proposed equipment had two distinct triggers.
One trigger, the "actual sample trigger," would establish a sampling
rate. A second trigger, the "pre or post sample trigger" would be
capable, concluded the agency, of altering the sampling rate established
by the actual sample trigger. The agency noted that Digital's equipment
thus appeared to allow for triggering variability from one sample to the
next, but did not appear to permit triggering variability over a record
length, which is comprised of many samples. Further, there was no
indication that Digital's equipment would allow for triggering
variability for all channels simultaneously. Because it appeared that
Digital's proposed equipment would not provide the capability
contemplated by solicitation paragraph C.4(e), the agency determined
that the proposal was technically unacceptable and awarded a contract
for $39,441.60 to SOLTEC, the only offeror that had submitted a
technically acceptable proposal. The government's estimate had been
$41,000.
Digital filed a protest with this Office complaining that the agency
did not have a valid reason for rejecting the firm's offer. Digital
noted that its proposed price was lower than SOLTEC's and that the
agency's letter to Digital advising of the award to SOLTEC specifically
acknowledged that Digital's proposed equipment would have the capability
required by paragraph C.4(e) of the solicitation. In its report on the
protest, the agency explains that its rejection letter to Digital should
have stated that Digital's signal recorder would not conform to
paragraph C.4(e); the omission of the word "not" was inadvertent, says
the agency. In any event, the protester contends that the wording of
its proposal was clear and that its equipment would meet the
requirements of the RFP. Digital argues that if the agency had any
doubts concerning this, it should have requested the firm to clarify the
proposal rather than simply reject what Digital says was its "first,
post-discussion technical submission."
The principal issue here is whether the agency properly determined
that Digital's proposal was technically unacceptable following the
receipt of best and final offers. In this respect, the evaluation of
proposals is primarily the responsibility of the procuring agency, and
we will not question an agency's technical evaluation unless a protester
shows that the agency's evaluation was unreasonable or in violation of
the procurement statutes or regulations. Xerox Special Information
Systems, B-215557, Feb. 13, 1985, 85-1 CPD P 192. A protester bears the
burden of showing that the evaluation was unreasonable, Sun Enterprises,
B-221438.2, Apr. 18, 1986, 86-1 CPD P 384, and the mere fact that the
protester may disagree with the agency's evaluation does not render the
evaluation unreasonable. Harbert International, Inc., B-222472, July
15, 1986, 86-2 CPD P 67. Further, where the agency offers specific
technical reasons for the rejection of a proposal as technically
unacceptable, the protester at least must explain why it believes the
agency's position is incorrect. International Imaging Systems,
B-224401, Sept. 15, 1986, 86-2 CPD P 302.
In this case, the agency defends its determination that Digital's
bests and final offer was technically unacceptable on the basis that it
appeared that the firm's signal recorder would have two distinct
triggers that would not provide the trigger delay capability required by
solicitation paragraph C.4(e), and that there was no indication in the
offer that the triggering variability of Digital's proposed equipment
would, as required, extend to all channels simultaneously. From our
reading of the descriptive material Digital provided with its best and
final offer, we cannot conclude that the agency's interpretation of this
material was unreasonable. Moreover, while Digital says that its signal
recorder "would meet the specifications of the RFP," the firm does not
allege that its equipment would perform the same trigger delay function
the agency says is required, nor has it attempted to offer any
explanation at all of its view that the agency's understanding of the
firm's best and final offer was incorrect. Thus, since the agency's
evaluation of Digital's offer has not been shown to have been
unreasonable or otherwise improper, we have no basis to question it.
We also find no merit to the protester's suggestion that after
evaluating the best and final offers the agency was required to seek
clarification concerning whether Digital's proposed equipment would
comply with the requirement of solicitation paragraph C.4(e). A best
and final offer that does not comply with required terms of the
solicitation properly may be rejected as technically unacceptable. ITT
Telecommunications Division, B-185546, July 9, 1976, 76-2 CPD P 24.
While an agency sometimes may seek to clarify nor uncertainties in
particular proposals, Emerson Electric Co., B-213382, Feb. 23, 1984,
84-1 CPD P 233, where the information sought from an offeror is
essential to determining the acceptability of the proposal the agency's
request for information constitutes the reopening of negotiations, RCA
Service Co., B-219643, Nov. 18, 1985, 85-2 CPD P 563, and an agency has
no legal duty to reopen the competition to permit a single offeror
another chance to demonstrate the merits of its proposal. The
Management and Technical Services Company, a subsidiary of the General
Electric Co., B-209513, Dec. 23, 1982, 82-2 CPD P 571. Here, the
agency's memorandum of the telephone negotiations with Digital lists
solicitation paragraph C.4(e) as one of the specific requirements
discussed with Digital. It appears, therefore, that the firm had the
benefit of discussions on this point, but simply failed to address the
requirement clearly in its best and final offer.
Finally, the protester's offer to supply its signal recorder at a
price less than SOLTEC's is not a relevant consideration. Because the
agency reasonably determined Digital's proposal to be technically
unacceptable, the proposal could not be considered for award regardless
of the lower proposed price. Xerox Special Information Systems,
B-215557, supra.
The protest is denied. Since we conclude that the agency did not
unreasonably exclude the protester from the procurement, the protester
is not entitled to recover the costs of preparing its proposal or of
filing and pursuing this protest. Bid Protest Regulations, 4 C.F.R.
Sec. 21.6(d) and (e)(1986).
Harry R. Van Cleve
General Counsel
Matter of: Silvics, Inc.
File: B-225299
Date: February 24, 1987
Normal delay in forwarding carrier-delivered offer from mailroom to
office designated for receipt, with result that offer was not received
by required time, does not warrant considering the late offer where the
delivery was not expedited because the carrier's envelope was not marked
with information as to the solicitation number, deadline for receipt,
and ultimate destination of the proposal.
Silvics, Inc., protests the determination by the Forest Service that
Silvics' proposal, submitted in response to request for proposals (RFP)
No. R6-86-225N for reforestation on lands in the Pacific Northwest
region, could not be considered because it was late.
We deny the protest.
The closing date for receipt of proposals was November 5, 1986, at 11
a.m. The RFP required that hand-carried offers be received in room G07
of the Forest Service building. Silvics' offer, sent by Federal
Express, was rejected as late because the contracting officer, who
received the proposal that day through the Forest Service's internal
mail-handling system, noted the offer was time/date stamped at 11:24
a.m. Silvics protests that the records of its delivery agent, Federal
Express, indicate that the actual time of delivery to the Forest Service
mailroom was 9:37 a.m. Silvics contends that the proposal therefore was
late due to faulty agency procedures and government mishandling after
receipt.
An offer is late if it does not arrive at the office designated in
the solicitation by the time specified. Equitec Properties Co.,
B-224317, Sept. 19, 1986, 86-2 C.P.D. P 327. An offer delivered to an
agency by Federal Express or other commercial carrier is considered to
be hand-carried and, if it arrives late, can only be considered if it is
shown that the sole or paramount cause for the late receipt was some
government impropriety. Rodale Electronics Corp., B-221727, Apr. 7,
1986, 86-1 C.P.D. P 342. Improper government action in this context is
affirmative action that makes it impossible for the offeror to deliver
the proposal on time. Econ, Inc., B-222577, July 28, 1986, 86-2 C.P.D.
P 119. A late proposal should not be considered, however, if the
offeror (or its agent) significantly contributed to the late receipt by
not acting reasonably in fulfilling the firm's responsibility to insure
delivery to the proper place by the proper time. Id; Rodale
Electronics Corp., B-221727, supra.
Initially, we note the parties dispute the actual time of receipt of
the offer by the Forest Service. The agency states that it has no
record of its own as to the precise time Federal Express delivered
Silvics' proposal to the Forest Service mailroom beyond the time/date
stamp on the inner envelope of the proposal package. The Forest Service
asserts that since the Federal Express outer envelope did not identify
the contents as a proposal, the package was not time/date stamped until
11:24, when a clerk opened the Federal Express envelooe and noted that
the inner envelope was identified as a proposal. The proposal was then
delivered to the contracting officer before the next scheduled mail run.
The protester responds that the Federal Express log contains the
signature of a Forest Service employee and the time of delivery recorded
as 9:37 a.m. (The log has deliveries recorded sequentially: the
preceding entry is 9:35 a.m., and the subsequent entry is 9:41 a.m.)
We need not resolve the issue, however. The reason is that even if
we were to accept tne Federal Express log as accurate, we do not find
that the Forest Service's delay in forwarding the package from the
mailroom to its ultimate destination was the sole cause of the late
receipt.
An offer received at the designated place after it was due is
considered late even if it was received by the agency by the time
specified but at some location other than the required one--such as a
mail room--if the offeror did not allow sufficient time for the proposal
to pass through any intermediate stops and reach the designated office
on time. Systems for Business, B-224409, Aug. 6, 1986, 86-2 C.P.D. P
164.
When a proposal is placed in an envelope provided by a commercial
carrier for overnight delivery, the required information as to the
solicitation number, deadline for receipt and ultimate destination may
no longer be apparent from the outside envelope. Unless the outside
envelope is clearly marked with all this information--and Silvics does
not allege that its Federal Express envelope was--the offeror generally
is considered to have contributed to any delay in delivery. Systems for
Business, B-224409, supra.
The Forest Service reports that its mailroom procedures require
prompt delivery of courier-received mail which, the agency explains,
means that delivery is not delayed until the next normal mail run.
Also, if a courier-delivered package is identified as a bid or proposal
on the wrapper, it is time/date stamped upon receipt in the mailroom;
otherwise, mail is time/date stamped when it is opened in the ordinary
course of business. We see nothing wrong with these procedures, and it
is apparent from the record that, assuming Silvics' offer was received
in the mailroom at 9:37 a.m., it would have been delivered before 11
a.m. if the outside envelope had been appropriately marked. We
therefore cannot conclude that the Forest Service was responsible for
the fact that Silvics' proposal, delivered to the agency mailroom
instead of to room G07 as required, did not reach the contracting
officer by the 11 a.m. deadline.
Silvics further asserts that the late acceptance of its proposal
would not prejudice any competitors since this was not a sealed bid
solicitation where bids were to be opened publicly and award was to be
made to the lowest bidder.
The reason for the late proposal rules, however, is that the manner
in which the government conducts its procurements must be subject to
clearly defined standards that apply equally to all so that fair and
impartial treatment is ensured. There must be a time after which offers
generally may not be received. To permit one offeror to deliver its
proposal after the closing time inevitably would lead to confusion and
unequal treatment of offerors and thereby would tend to subvert the
competitive system. While we realize that by application of its late
proposal rules the government at times may lose the benefit of proposals
that offer terms more advantageous than those received timely,
maintaining confidence in the competitive system is of greater
importance than the possible advantage to be gained by considering a
late proposal in a single procurement. Equitec Properties Co.,
B-224317, supra.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Reimbursement for Permanent Change of Station Travel by
Privately Owned Aircraft
File: B-225296
Date: June 2, 1987
An employee who was authorized to perform permanent duty travel by
privately owned automobile as advantageous to the Government but instead
flew his privately owned airplane may be reimbursed his expenses only to
the extent those expenses do not exceed the constructive cost of such
travel by common carrier.
This decision is in response to a request from a certifying officer
with the National Security Agency (NSA), for our opinion concerning the
entitlement of an employee to reimbursement for permanent
change-of-station travel he performed in his own airplane. The employee
submitted a voucher by which he requested reimbursement for his mileage,
per diem, and an airplane tie-down fee in the amount of $1,177.80. In
accordance with provisions of Volume 2 of the Joint Travel Regulations
(JTR), the NSA limited his reimbursement to $194.75--the amount of the
expenses he would have incurred had he used a commercial carrier. Given
the circumstances of the case, the NSA has correctly determined the
employee's entitlement.
By a travel order dated June 14, 1985, the employee was transferred
from Fort Meade, Maryland, to Sunnyvale, California, with a reporting
date of August 1, 1985. That order authorized permanent duty travel by
privately owned automobile as advantageous to the Government. The
employee's wife and daughter each drove an automobile to Sunnyvale
between July 25 and July 30 and were granted a per diem allowance and
mileage for their travel. The employee flew his privately owned
airplane to his new duty station between July 23 and 25.
Because the employee had not been authorized to use his privately
owned airplane the NSA, citing JTR paragraph C4661-2, compared the
expense of his travel by privately owned airplane with the cost of
common carrier transportation and limited his reimbursement to the
lesser amount. The NSA calculated those expenses as follows:
Privately Owned Airplane Commercial Carrier
Mileage Allowance: 1,045.80 Baltimore 0830
Tie-down fee: 7.00 23 July Arrive
Grand Total $1,177.80 San Francisco 1200
Airfare 179.00
Taxi 10.00
Grand Total $194.75
The NSA correctly interpreted the JTR's in determining the employee's
entitlement to reimbursement. Paragraph C4250-1 of JTR part F, Chapter
4, which concerns allowances for the use of privately owned conveyances
for permanent duty travel, provides as follows:
"Reimbursement for all permanent duty travel by privately owned
airplane or motorcycle and renewal agreement travel by privately
owned automobile, including per diem, is determined under par.
C2151-3 and will not exceed the cost of travel by common carrier."
While paragraph C2151-3a provides that the use of a privately owned
automobile for permanent change-of-station travel will be considered as
advantageous to the Government and mileage reimbursement allowed for
that method of travel, paragraph C2151-3b provides that the use of a
privately owned aircraft will be considered as advantageous to the
Government only "when it is determined that the cost of such travel at
the rate of $0.45 per mile * * *, including per diem for the actual
travel period, not in excess of the time required to complete the trip
at a rate of 300 miles per calendar day, is less than the cost of travel
by common carrier." Paragraph C2151-3 provides further that computation
for reimbursement of travel by privately owned airplane is to be as
outlined in paragraph C4661.
Paragraph C4661-2d provides that when travel by a privately owned
airplane is not advantageous to the Government (in this situation as
determined by paragraph C2150-3), the total amount of mileage and per
diem, computed on the basis of travel by a privately owned conveyance,
is to be compared with the total constructive travel cost including per
diem by common carrier, and the employee is to be reimbursed in the
lesser amount.
The NSA compared the cost of the employee's travel by privately owned
aircraft and the cost of the same trip by common carrier and correctly
determined he was entitled only to the lesser, constructive cost by
common carrier. There is no basis upon which this Office can waive or
otherwise change the application of these regulations.
Comptroller General
of the United States
Matter of: Dwight Kimsey - Relocation Expenses - Back Pay Act
File: B-225289
Date: February 17, 1987
Employee of Office of Surface Mining Reclamation and Enforcement
requests reimbursement for relocation expenses incurred to return to his
former duty station after his reinstatement was directed by Merit
Systems Protection Board. During the time he had been separated, he had
relocated to accept other employment. Neither the Back Pay Act, 5
U.S.C. Sec. 5596, which prescribes allowable payments when an employee
undergoes an unwarranted personnel action, nor the regulations
implementing section 5596, authorize consequential relocation and moving
expenses when an employee is erroneously separated. Although such
expenses may result from an improper personnel action, they do not
represent benefits an employee would have received had the personnel
action not occurred.
Jed O. Christensen, Director, Office of Surface Mining Reclamation
and Enforcement (OSMRE), Department of the Interior, requests an advance
decision concerning whether Mr. Dwight Kimsey, an OSMRE employee, may be
reimbursed for relocation expenses he incurred following a Merit Systems
Protection Board (MSPB) decision directing his reemployment by that
agency. We hold that neither the Back Pay Act, 5 U.S.C. Sec. 5596
(1982), which prescribes allowable payments when an employee undergoes
an unwarranted personnel action, nor the regulations implementing
section 5596, authorize consequential relocation and moving expenses
when an erroneously separated employee is reinstated. Although such
expenses may resuit from an improper personnel action, they do not
represent benefits an employee would have received had the personnel
action not occurred.
Mr. Kimsey was separated from OSMRE by a reduction-in-force in
January 1982, after he declined to transfer with his
function from Denver, Colorado, to Albuquerque, New Mexico. Mr.
Kimsey filed an appeal with the MSPB, which determined that Mr. Kimsey's
agency function had, in fact, not been transferred to Albuquerque, that
Mr. Kimsey therefore had been erroneously separated, and that he was to
be reinstated with OSMRE in Denver.
Between the time Mr. Kimsey was separated from OSMRE in January 1982
and the effective date of his reinstatement, Mr. Kimsey relocated from
Denver to Cheyenne, Wyoming, to accept private employment. Following
his reemployment with OSMRE in Denver pursuant to the MSPB final
decision, Mr. Kimsey claimed reimbursement for the expenses he incurred
in relocating back to Denver. The agency asks whether or not these
relocation expenses may be added to the computation of the backpay award
due to Mr. Kimsey as part of the implementation of the MSPB's order.
The Back Pay Act, 5 U.S.C. Sec. 5596 (1982), provides, generally,
that an employee who is found by an appropriate authority to have
undergone an unjustified or unwarranted personnel action which results
in the withdrawal or reduction of all or part of his pay, allowances, or
differentials is entitled to receive an amount equal to the pay,
allowances or differentials he normally would have received, less
amounts earned by him elsewhere during the period.
Regulations implementing the Back Pay Act have been promulgated by
the Office of Personnel Management in Title 5, Part 550, Subpart H, of
the Code of Federal Regulations. These regulations provide that an
agency shall compute for the period covered by the corrective action the
pay, allowances, and differentials of the employee as if the unjustified
or unwarranted personnel action had not occurred, but in no case will
the employee be granted more pay, allowances, and differentials than he
would have been entitled to if the unjustified or unwarranted personnel
action had not occurred. 5 C.F.R. Sec. 550.805 (1986).
Mr. Kimsey is not entitled to receive reimbursement for expenses he
incurred in relocating back to Denver since there is no provision in the
Back Pay Act or its implementing regulations for the payment of
incidental expenses incurred by an employee as a consequence of an
unjustified or unwarranted personnel action. It is clear that the Act
authorizes only payment of an amount the employee would have received if
the erroneous personnel action had not occurred.
Therefore, although the expenses for which Mr. Kimsey claims
reimbursement may have been due to his erroneous separation and
subsequent reinstatement, they are not allowances Mr. Kimsey would have
received if he had not undergone the erroneous personnel action. Jack
M. Haning, 63 Comp. Gen. 170 (1984).
Accordingly there is no legal basis upon which this Office can
certify payment of relocation expenses in the circumstances of Mr.
Kimsey's claim, and it is denied.
Comptroller General
of the United States
Matter of: Wilkinson Manufacturing Company
File: B-225280
Date: March 13, 1987
1. Protest contending that the contracting agency improperly allowed
only 30 days for bid preparation, thereby preventing protester from
competing with the two current contractors, is denied since selection of
a bid opening data is within the discretion of the contracting officer
and the fact that a firm is not able to prepare a bid within the time
allowed does not render the procurement improper.
2. Protest contending that a requirement that deliveries begin 90
days after contract award restricts the competition to the two current
contractors who already have the necessary facilities and equipment in
place is denied, since an agency is not required to consider, or attempt
to eliminate, any competitive advantage that a bidder might have because
of its present or past incumbency, unless the advantage results from
preferential or unfair action by the government. The record contains no
evidence of such action by the government in this case.
Wilkinson Manufacturing Company (WMC) protests any award under
invitation for bids (IFB) No. USM 87-08, issued by the Department of the
Treasury for bids to provide copper-plated zinc coin blanks for use by
the United States Mint in the production of one cent coins. WMC
contends that the bid preparation time allowed by the IFB is
insufficient to prepare an adequate bid and that the time allowed for
delivery of the coin blanks after contract award is so short that no
firm other than the two current producers could comply with it. WMC did
not submit a bid for this requirement.
We deny the protest.
The IFB called for bids to supply the Denver and Philadelphia mints
with penny blanks for the base year and provided for an option to supply
a lesser amount for a second year. The IFB specified a bid opening date
30 days from the date of its issuance and it required that initial
deliveries begin 90 days after the contract is awarded. WMC contends
that the 30-day period allowed for the preparation of the bids was too
short since WMC needed a minimum of 60 days to accumulate the
information necessary to prepare a competitive bid. WMC argues that if
it were given an adequate time period to submit a bid, the agency would
obtain a third qualified producer and the increased competition would
save the agency millions of dollars per year.
The agency points out that the Federal Acquisition Regulation (FAR),
48 C.F.R. Sec. 14.202-1 (1986), requires a minimum bid preparation time
of 30 calendar days and lists such factors as urgency, complexity and
anticipated subcontracting as factors that should be considered by the
agency to determine if a longer period is needed. The agency insists
that these factors were considered before it determined that a 30-day
period was adequate for this procurement.
The selection of a bid opening date is within the discretion of the
contracting officer, and the fact that a firm is unable to prepare a bid
within the time allowed does not render the procurement improper if all
firms were treated equally and adequate competition and reasonable
prices were obtained. R&E Electronics, Inc., B-223723, Sept. 8, 1986,
86-2 CPD P 273. Moreover, we note that WMC which has bid several times
previously on similar procurements has not explained why it needs 60
days to prepare a bid for this procurement.
We find no evidence that anyone was treated unfairly or that
reasonable prices were not obtained. The agency has informed us that it
issued 17 bid packages and received 2 responsive bids. Under the
Competition in Contracting Act of 1984 (CICA), 41 U.S.C. Sec. 253(a) (1)
(A) (Supp. III 1985), however, the agencies are required to obtain full
and open competition through the use of competitive procurement
procedures. Full and open competition is defined as permitting "all
responsible sources" to submit sealed bids or competitive proposals.
Id. sections 259(c) and 403(7). Although WMC insists that it should
have been permitted to participate, WMC concedes that it could not meet
the requirements of this procurement because it did not have the
necessary equipment and facilities in place. In our view, therefore,
WMC could not be considered as a "responsible source" within the meaning
of the CICA requirement and there is no evidence that any "responsible
source" was denied an opportunity to compete. The record also indicates
that an extension of the bid opening date to 60 days would have been of
little help to WMC, unless the agency was also willing to extend the
date for first delivery from 90 days to "a minimum of 12 to 15 months."
Under these circumstance, we cannot conclude that the bid preparation
period was unreasonable or that WMC was unfairly precluded from
submitting a bid.
WMC also contends that the requirement that deliveries begin 90 days
after award effectively restricts competition to the two current
producers who already have the necessary facilities and equipment to
produce the blanks. WMC states that there is now no competition because
one of the current producers receives the portion set aside for small
business and the other receives the remainder of the requirement. WMC
insists that its efforts to participate in the penny blank program have
been futile because it has been "disqualified primarily because of the
early delivery date."
The agency points out that the procurement is subject to the
Walsh-Healey Public Contracts Act, 41 U.S.C. Secs. 35-45 (1982), which
requires that the awardee be a manufacturer or a regular dealer and that
in order to qualify as a manufacturer, a bidder must be engaged in a
business that parallels the processes used in making the penny blanks or
demonstrate that it qualifies as a firm newly entering the business in
accordance with the criteria set out in the FAR, 48 C.F.R. Sec.
22.606-1 (b). The agency contends that bidders who meet this
requirement should have no trouble complying with the schedule set for
initial deliveries.
Essentially, WMC is challenging the fairness of the competitive
advantage enjoyed by the two current contractors and it seeks special
treatment from the agency so that it can become a viable competitor to
those contractors. We have, however, consistently held that an agency
is not required to consider, or to attempt to eliminate, any competitive
advantage that a bidder might have because of its present or past
incumbency unless that advantage resulted from preferential or unfair
action by the government. Universal Alarm Services, B-214022, Mar. 5,
1984, 84-1 CPD P 267. We find no evidence in the record of any such
preference or unfair agency action, and we have held that the prior
award of contracts based on legitimate minimum needs considerations does
not constitute unfair agency action. Rolm Corp., B-214052, Sept. 11,
1984, 84-2 CPD P 280.
Moreover, the record indicates that WMC has bid at least twice
previously and did not receive the contract because its prices
substantially exceeded those of the awardees. Thus, the agency was
never required to determine whether WMC could have actually performed in
accordance with the specifications and WMC was not disqualified because
of inability to meet the delivery schedules.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: World-Wide Security Service, Inc.--Reconsideration
File: B-225270.2
Date: March 17, 1987
1. General Accounting Office affirms prior holding that protester's
failure to request a debriefing or to file a protest either with the
contracting agency or the General Accounting Office until 6 weeks after
the agency advises it that its proposed equipment does not meet the
government's needs and that a contract is being awarded to another
offeror renders the protest untimely.
2. When on its face a protest appears to be untimely, a protester who
is in possession of facts that would establish its timeliness, but who
does not initially present those facts to the General Accounting Office,
runs the risk of dismissal and of refusal to reconsider the matter when
the protester subsequently presents all relevant facts.
3. The General Accounting Office will not consider the merits of an
untimely protest or invoke the "significant issue" exception to its
timeliness regulations where the issues raised are not matters of first
impression or of widespread interest to the procurement community.
World-Wide Security Service, Inc. requests reconsideration of a
decision in which we dismissed as untimely its protest against the
rejection of its proposal as unacceptable under request for proposals
(RFP) No. CS-86-051. See World-Wide Security Service, Inc., B-225270,
Dec. 15, 1986, 86-2 CPD P 676. The solicitation, issued by the
Department of the Treasury's Customs Service, was for mobile X-ray
inspection systems.
We affirm our prior dismissal.
As indicated in our decision, the agency informed the protester by
letter dated October 1, 1986, that its proposal did not adequately meet
the needs of the government and that the contract was being awarded to
American Science and Engineering, Inc. Since we did not receive
World-Wide's protest until November 24, more than 6 weeks after the
notification, and since there had been no agency-level protest or
request for a debriefing, we held that the protest was untimely. Our
Bid Protest Regulations require protests to be filed, i.e., received
within 10 working days after the basis for them is or should have been
known. 4 C.F.R. Sec. 21.2(a)(2) (1986).
World-Wide requests reconsideration on the ground that its initial
protest was timely, because it learned only 2 days before its November
17 letter to our Office that the agency had permitted the successful
contractor to demonstrate that it could meet certain criteria in the
solicitation, but did not afford World-Wide a similar opportunity.
World-Wide argues that the agency thus did not provide fair and equal
treatment of offerors. Alternatively, the protester requests that we
consider its protest as raising a significant issue pursuant to 4 C.F.R.
Sec. 21.2(c) because the agency's action allegedly violated the
Competition in Contracting Act of 1984 (CICA).
We still view World-Wide's initial protest as untimely. In it, the
firm alluded to the awardee's opportunity to demonstrate its equipment
and stated that although it had previously demonstrated some of its own
equipment to the Customs Service, it was different from that proposed
for the protested procurement. World-Wide, however, gave no indication
of when it had learned of this allegedly unequal treatment, and in the
absence of other evidence, we assumed that the firm either knew or
should have known of it at approximately the same time as it learned of
the rejection of its own proposal. The burden was on World-Wide to
advise us that it had not learned of this second basis of protest until
2 days before the date of its letter to our Office. When on its face a
protest appears to be untimely, a protester who is in possession of
facts that would establish its timeliness, but who does not initially
provide those facts to our Office, runs the risk of dismissal and of our
refusal to reconsider the matter when the protester subsequently
presents them. See Global Crane Institute--Request for Reconsideration,
B-218120.2, May 28, 1985, 85-1 CPD P 606.
Moreover, had World-Wide diligently pursued the information that
provided its first basis of protest, either by requesting a debriefing
or by filing a protest with the agency or our Office, it might have
learned not only why the agency rejected its proposal, but also of the
awardee's opportunity to demonstrate its proposed equipment.
World-Wide's failure to take action promptly upon receipt of the
rejection letter renders the protest untimely on either ground.
As for review under the significant issue exception, we will review
an untimely protest when the subject matter of the protest is of
widespread interest to the procurement community or involves a matter
that we have not considered in a previous decision. M. C. Dean
Electrical Contracting, Inc.--Reconsideration, B-221992.3, Mar. 12,
1986, 86-1 CPD P 248. We have considered numerous protests alleging
unequal treatment of bidders and offerors. See, e.g., E.C. Campbell
Inc., B-222197, June 19, 1986, 86-1 CPD P 565; Computek Inc., et al.,
54 Comp. Gen. 1080 (1975), 75-1 CPD P 384. Since the issue here
involves only a single offeror, we do not consider it significant within
the meaning of our regulation. See Professional Review of Florida,
Inc., et al., B-215303.3, et al., Apr. 5, 1985, 85-1 CPD P 394 at 6-7.
Further, the protester has not submitted any evidence which indicates
that there has been a violation of CICA.
In any event, we find the protester's argument that it was treated
unfairly without merit. The RFP provided that the agency would test the
safety of the X-ray inspection system by having a pre-award
demonstration performed by all offerors otherwise judged technically
qualified. The agency advises us that World-Wide's proposal received an
average score of 48, and that a minimum score of 60 was needed before an
offeror was asked to demonstrate its proposed system.
We affirm our dismissal.
Harry R. Van Cleve
General Counsel
Matter of: Captain Terry L. Smart, USAF--Temporary Lodging Expense
Allowance
File: B-225262
Date: May 4, 1987
An Air Force officer who was transferred from Arkansas to Texas
claims a temporary lodging expense allowance based on his continued
occupancy of his permanent residence in Arkansas on a rental basis after
the date he sold it. The officer continued to occupy the residence as
his usual place of abode until the date he actually moved out, however,
so that the residence cannot be considered to have been his "temporary"
quarters within the meaning of that term under the applicable statutes
and regulations. Hence, his claim cannot be allowed.
The issue presented in this case is whether an Air Force officer who
was transferred from Arkansas to Texas may be paid a temporary lodging
expense allowance based on his continued occupancy of his permanent
residence in Arkansas on a rental basis after the date of his sale of
the residence. 1/ In the circumstances presented, we conclude that he
is not entitled to payment.
Captain Terry L. Smart, USAF, was transferred from Little Rock Air
Force Base, Arkansas, to Reese Air Force Base, Texas, in November 1985.
On November 12, 1985, he and his wife sold the house that they had owned
and used as their primary residence in Arkansas. They continued to
reside in the house, however, until November 18, 1985, when they
departed for Texas.
Captain Smart has indicated that he and his wife paid $50 per day to
rent their residence in Arkansas from the time they sold it on November
12 to the time they vacated it and moved to Texas on November 18. He
submitted a voucher claiming a temporary lodging expense allowance of
$50 per day for 4 days from November 13 through November 17.
Claims adjudicators of the Air Force Accounting and Finance Center
denied Captain Smart's claim. As the basis for the denial they cited
paragraph M4601, Volume 1 of the Joint Travel Regulations, which
provides that the lodgings for which the temporary lodging expense
allowance is authorized "* * * must, in fact, be a temporary place of
residence." The adjudicators concluded that Captain Smart's rental and
continued use of his primary residence after its sale could not properly
be regarded as the occupancy of "a temporary place of residence" under
the regulations.
Captain Smart has expressed disagreement with this reasoning. He
suggests that he and his wife were, in fact, occupying the house in
Arkansas on a temporary basis from the time they sold it to the time
they had to depart for Texas in compliance with his orders. His claim
has been forwarded here because of the disagreement.
Section 404a of title 37, United States Code, provides that under
regulations prescribed by the service Secretaries, members of the
uniformed services who are ordered to make a change of permanent station
within the United States shall be paid or reimbursed for subsistence
expenses incurred while occupying temporary quarters incident to their
transfer. The statute further provides that the allowance for these
expenses may not exceed a period of 4 days.
Implementing regulations in effect during the time at issue in 1985
were contained in Volume 1 of the Joint Travel Regulations. As
indicated, paragraph M4601 of those regulations provided that the
lodgings for which the temporary lodging expense allowance is authorized
"* * * must, in fact, be a temporary place of residence." 2/
We have not previously had the occasion to consider the application
of these provisions of statute and regulation in situations involving
service members making a permanent change-of-station move who sell their
permanent residence at their old duty station and then continue to
occupy that residence on a rental basis. We note, however, that 37
U.S.C. Sec. 404a was added to the United States Code by the Uniformed
Services Pay Act of 1981, 3/ and that the legislative history of that
Act contains this statement concerning the purpose of the temporary
lodging expense allowance:
"Military members currently incur out-of-pocket expenses
associated with government-directed permanent change of station
moves. The most significant aspects of these unreimbursed
expenses occur at the old and new duty locations when members are
forced to pay for commercial food and lodging because of delays in
departure or, more frequently, delays in obtaining permanent
housing at the new duty station. Unlike Federal civilians, who
are authorized up to 30 days of reimbursements for these types of
expenses, military members in a permanent changeof-station status
within the continental United States now receive no reimbursement,
but must use personal funds. Section 11 of the committee bill
establishes a Temporary Lodging Expenses (TLE) authority to
partially offset the added lodging and subsistence expenses
incurred by service members and their dependents in conjunction
with permanent change-of-station moves." 4/
It thus appears that the legislation was designed to provide service
members with an allowance similar to temporary quarters subsistence
expenses which are authorized for transferred federal civilian
employees.
The language in both the statute applicable to members of the
uniformed services and the statute applicable to civilian employees is
identical, namely: "* * * while occupying temporary quarters * * *. "
5/ Under the regulation governing payment of temporary quarters
subsistence expenses for civilian employees, reimbursement for lodgings
is generally limited to "* * * lodging obtained from private or
commercial sources for the purpose of temporary occupancy after vacating
the residence occupied when the transfer was authorized." 6/ This
regulation was in effect for a considerable period prior to the
enactment of the statute authorizing this allowance for members of the
uniformed services. Thus, we find that this standard is essentially the
same as the one established by regulation for members of the uniformed
services that the lodgings "* * * must, in fact, be a temporary place of
residence."
Concerning the temporary quarters subsistence expense allowed
transferred civilian employees, we have repeatedly and consistently held
that under the applicable regulations employees are ordinarily
ineligible for reimbursement of their expenses incurred while renting
their permanent residence following its sale at their old duty station,
notwithstanding that the rental agreement may be temporary in nature and
may have been entered into in furtherance of their transfer. 7/ As an
exception, we have authorized reimbursement of rental charges assessed
against employees in such situations when it is shown that they were
forced to remain in possession of the premises beyond the intended
departure date due to unforeseen circumstances. 8/ This may occur, for
example, when the moving van breaks down on the moving date. 9/
Reimbursement is authorized in those exceptional circumstances under the
principle that the employees have ceased to occupy the premises as their
usual residence, and may therefore be considered to have "constructively
vacated" the residence as their primary place of abode. 10/
In the present case, it appears that Captain and Mrs. Smart sold
their house in Arkansas, and arranged to rent it for a short time
following the date of the sale, in contemplation of their move to Texas.
It further appears that these arrangements were settled in advance of
the sale, and that they intended to continue to occupy the house as
their permanent and primary place of residence until they actually
vacated the premises on the moving day. Hence, we are unable to
conclude that the house may properly be considered to have been their
"temporary" quarters within the meaning of that term as it appears in
the applicable statutes and regulations.
Accordingly, we deny Captain Smart's claim for the temporary lodging
expense allowance. The voucher, which may not be approved for payment,
will be retained here.
Acting Comptroller General
of the United States
1/ This action is in response to a request for an advance decision
from First Lieutenant Marcia K. Johnson, USAF, Chief, Accounting and
Finance, Reese Air Force Base, Texas, concerning the propriety of
approving a voucher submitted by Captain Terry L. Smart, USAF,
000-00-9987. The request was forwarded here by the Per Diem, Travel and
Transportation Allowance Committee after it was approved and assigned
PDTATAC Control Number 86-18.
2/ The same requirement is now contained in the superseding
provisions of paragraph U5705, Volume 1 of the Joint Federal Travel
Regulations, which became effective on January 1, 1987.
3/ Public Law 97-60, Sec. 122(a)(1), October 14, 1981, 95 Stat. 989,
1002.
4/ S. Rep. No. 146, 97th Cong., 1st Sess. 12, reprinted in 1981 U.S.
Code Cong. & Ad News 1484, 1495.
5/ 37 U.S.C. Sec. 404a and 5 U.S.C. Sec. 5724a.
6/ Federal Travel Regulations, para. 2-5.2, incorp. by ref., 41
C.F.R. Sec. 101-7.003.
7/ Gerald L. Modjeska, 56 Comp. Gen. 481 (1977); Michael J. Johnson,
B-215708, October 11, 1984; James P. Driscoll, B-198920, November 28,
1980.
8/ Patrick T. Schluck, B-202243, August 14, 1981.
9/ Beverly L. Driver, B-181032, August 19, 1974.
10/ Gerald L. Modjeska, supra, 56 Comp. Gen. at page 482; Quinea D.
Minton, B-218886, March 24, 1986.
Matter of: RG & B Contractors, Inc.--Request for Reconsideration
File: B-225260.4; B-225260.5
Date: April 20, 1987
Request for reconsideration is denied where protester fails to
specify any errors of law made or information not previously considered
which would warrant reversal or modification of that decision.
RG & B Contractors, Inc., requests reconsideration of our decision
isn Alaska Mechanical, Inc., B-225260.2, Feb. 25, 1987, 87-1 C.P.D. P ,
in which we sustained Alaska Mechanical, Inc.'s (AMI), protest against
the rejection of its low bid as nonresoonsive hy the United States Coast
Guard under invitation for bids (IFB) No. DTCG35-86-B-60040, for repair
work. RG & B contends that AMI's bid contained an ambiguity, which
should have rendered the bid nonresponsive.
We deny the request for reconsideration.
The IFB was issued on August 20, 1986, with a minimum bid acceptance
period of 60 calendar days, as provided for in blocks 13 and 17 of the
bid form, Standard Form 1442. Amendment No. 0003 to the IFB changed,
among other things, the minimum bid acceptance period to 90 calendar
days. Although AMI acknowledged amendment No. 0003, because it had
inserted 60 calendar days as the acceptance period in its original bid,
the Coast Guard rejected the bid as nonresponsive for containing an
ambiguity.
In its protest to our Office, AMI contended that it demonstrated its
intent to comply with the 90-day acceptance period by acknowledging the
amendment, and that its bid should have been considered responsive in
accordance with our decision in Walsky Construction Co., et al.,
B-216571 et al., May 17, 1985, 85-1 C.P.D. P 562. We sustained AMI's
protest because AMI had acknowledged amendment No. 0003 without taking
exception to any of its terms. We found that AMI's insertion of 60 days
in the original bid form showed compliance with the bid acceptance
period initially desired by the Coast Guard and that by acknowledging
amendment No. 0003, AMI indicated its acceptance of the new terms
contained therein, including the new 90-day bid acceptance period.
Therefore, we recommended award to AMI, if otherwise proper.
RG & B was the second low bidder on the contract. Initially, when
bids were opened, RG & B protested award to AMI with our Office because
it argued that AMI's insertion of 60 days in its bid and acknowledgment
of amendment No. 0003 created an ambiguity in the bid which rendered it
nonresponsive. However, after the Coast Guard elected to reject AMI's
bid as nonresponsive and following AMI's subsequent protest to our
Office, RG & B conditionally withdrew its protest. In view of our
decision sustaining AMI's protest, RG & B requests that we reopen its
original protest and reconsider our decision. The Coast Guard has
awarded the contract to AMI and is continuing performance in the face of
the protest.
In its request for reconsideration, RG & B focuses on the fact that
AMI not only acknowledged amendment No. 0003, but also inserted 60 days
in block No. 17 of Standard Form 1442 which states that "The offeror
agrees to perform the work required at the prices specified below in
strict accordance with the terms of this solicitation if this offer is
accepted by the Government in writing within 60 calendar days after the
date offers are due." Therefore, RG & B contends that whether AMI
intended to be bound by the 90-day bid acceptance period is immaterial
because the fact remains that the evidence presented in the bid shows
that AMI could be permitted to withdraw its bid in 60 calendar days,
since it failed to change its bid acceptance period of 60 days. RG & B
argues that at a minimum there is an ambiguity in the bid acceptance
period and that in Cardkey Systems, B-220668, Jan. 29, 1986, 86-1 C.P.D.
P 105, we held that if a bid is responsive under one interpretation of
an ambiguity, but nonresponsive under another, the bid is nonresponsive.
While RG & B accurately states our rule concerning an ambiguity which
renders a bid nonresponsive, our rule is based on a finding of ambiguity
in the first place. An ambiguity in a bid means that it is subject to
two reasonable interpretations. See Cardkey Systems, B-220668, supra.
Our decision was premised on the conclusion that it was only reasonable
to conclude that AMI intended to comply with the 90-day bid acceptance
period. This is consistent with our decision in Walsky Construction
Co., et al., B-216571 et al., supra, which recognizes that although it
could be argued that bidders were offering the shorter acceptance
period, we believed it was only reasonable to conclude that AMI intended
to comply with the 90-day acceptance period. Therefore, we did not find
that the bid contained the type of ambiguity which was subject to two
reasonable interpretations so as to render the bid nonresponsive.
Since RG & B has not specified any errors of law made or information
not previously considered in our prior decision, we deny the request for
reconsideration.
Comptroller General
of the United States
Matter of: Alaska Mechanical, Inc.
File: B-225260.2
Date: February 25, 1987
Where bidder inserted 60 days as its bid acceptance period in the
original bid form and also acknowledged an amendment that changed the
IFB minimum acceptance period from 60 days to 90 days, the bid should
not have been rejected as nonresponsive because bidder's blanket
acknowledgment of the amendment indicated its acceptance of the longer
bid acceptance period.
Alaska Mechanical, Inc. (AMI), protests the rejection of its bid as
nonresponsive by the United States Coast Guard under invitation for bids
No. DTCG35-86-B-60040 for repair work. AMI's low bid was rejected
because of an ambiguity in the bid acceptance period.
We sustain the protest.
The IFB was issued on August 20, 1986, with a minimum bid acceptance
period of 60 calendar days. Amendment No. 0003 to the IFB changed,
among other things, the minimum bid acceptance period to 90 calendar
days. Although AMI acknowledged amendment No. 0003, it also inserted 60
calendar days as the acceptance period in its bid, which resulted in the
Coast Guard rejecting the bid as nonresponsive for containing an
ambiguity.
AMI contends that it demonstrated its intent to comply with the
90-day minimum acceptance period by acknowledging the amendment, and
that its bid should be considered responsive in accordance with our
decision in Walsky Construction Co., et al., B-216571 et al., May 17,
1985, 85-1 C.P.D. P 562. In that case, the agency had erroneously
inserted the number 10 in the space provided for bidders to insert the
acceptance period of their bids, which conflicted with a provision that
stated that the minimum acceptance period was 30 days. The agency
amended the solicitation by omitting the error and changing the minimum
acceptance period to 60 days. The protester alleged that two bidders
were nonresponsive because they had acknowledged the amendment without
submitting revised bid forms. After recognizing that it could be argued
that these bids on unamended bid forms were offering the 10-day period,
we held that the bids were responsive because it was more reasonable to
assume that, since the bidders had acknowledged the amendment, they
intended to comply with the 80-day bid acceptance period requirement and
that the use of the unamended form was mere oversight.
Here, there were no new bid forms issued but AMI acknowledged
amendment No. 0003 without taking exception to any of its terms.
Moreover, AMI's insertion of 60 days in the original bid form shows
compliance with the bid acceptance period then desired by the Coast
Guard. By acknowledging amendment No. 0003, we find AMI indicated its
acceptance of the new terms contained therein including the new 90-day
bid acceptance period. Walsky Construction Co., supra.
Accordingly, we sustain the protest and recommend award to AMI, if
otherwise proper.
Comptroller General
of the United States
Matter of: Islip Transformer & Metal Co., Inc.
File: B-225257
Date: March 23, 1987
1. Low bid in which the unit price for the fabrication of first
article test items was more than 36 times greater than the unit price
for production items properly was rejected as materially unbalanced
because award, in effect, would have resulted in an advance payment to
the contractor since it would have provided funds early in the contract
performance to which the contractor was not entitled on the basis of
payment for value received.
2. Consideration of a bid, including referral of low bidder to the
Small Business Administration for consideration under certificate of
competency (COC) procedures, and subsequent issuance of a COC, does not
establish irrevocably that a bid is acceptable, nor does it estop the
government from later rejecting the bid as nonresponsive.
Islip Transformer & Metal Co., Inc. protests the rejection of its bid
as nonresponsive under invitation for bids (IFB) No. DAAD07-86-B-U655,
issued by the Army for circuit card assemblies for the Fire Finder Radar
System.
Islip asserts that its bid was improperly rejected on the basis of
the Army's determination that Islip's high price for first article test
units rendered the bid materially unbalanced. Islip asserts that this
cannot support a nonresponsiveness determination because Islip's bid
previously had been found responsive, as a prerequisite to Islip's
referral to the Small Business Administration (SBA), which had issued a
certificate of competency (COC).
We deny the protest.
The IFB, issued on July 9, 1986, called for six items consisting of
four contract line item numbers (CLINS) for the production of a total of
231 circuit card assembly units, plus one solicitation line item number
(SLIN) for the fabrication of two preproduction units for first article
testing, and a SLIN for first article testing and a test report. At bid
opening on September 5, Islip's bid of $125,939.90, including the two
first article testing SLINS, was low, and Systems Integration
Engineering Co.'s bid of $141,980.23 was next low. Based on a preaward
survey, the contracting officer determined that Islip, a small business,
was nonresponsible, and referred the matter to the SBA for consideration
under its COC procedures. SBA determined that Islip was responsible and
issued a COC on October 16.
The Army states that on November 18, while preparing the contract for
award to Islip, the contracting officer became aware that Islip's bid of
$30,000 for two units for the first article fabrication SLIN was
disproportionate to Islip's production CLIN price of $408.90 per unit.
The contracting officer determined that Islip's bid was materially
unbalanced because Islip's first article test fabrication unit price did
not bear any reasonable relation to the actual costs and, therefore,
rejected Islip's bid as nonresponsive. Islip protested this
determination to our Office; award is being withheld pendinq resolution
of the protest.
In determining that Islip's first article price was unbalanced, the
Army considered that the first article was essentially only two
preproduction units. Besides the total production cost for these units
which is less than $817.80 (based on $408.90 per unit multiplied by two
units), the only additional expense associated with the first article is
that of refurbishing the two units to make them serviceable for
designated use after the conclusion of testing, which the Army estimates
will cost less than $100. While Islip asserts that its two first
article test units have to be delivered from a production lot of 15, the
Army points out that the remaining 13 units were to be delivered and
priced under a production CLIN. In this respect, the IFB specifically
provides that:
"First article consists of two (2) units of assemblies
manufactured IAW requirements cited for CLIN 0001. One (1)
approved first article test unit shall be retained at contractor's
plant for use as a reference by qovernment QAR. First articles
not required to be retained must he delivered as part of the final
delivery. See Section C."
Section C, entitled "Fabrication of First Article" states:
"Include under this SLIN all charges for labor and materials
and all other costs allocable to the fabrication of first article
units. For units that will be delivered as part of the production
quantity, only include cost over and above the costs covered by
CLIN 0001. Include costs of refurbishment that may be required
after testing, for acceptance as production quantity."
In response to Islip's initial contention that production costs and
the cost of acquisition of material for units to be delivered
subsequently under a production CLIN were allocable to the first article
fabrication SLIN price, the Army report correctly points out that the
above-quoted solicitation provisions explicitly prohibit such a
practice. Rather, the provisions require that these costs be included
in the production item price.
Islip has not responded in its comments on the agency report to this
point; instead, it now arques that the Army could not disqualify Islip
as nonresponsive because after bid opening the Army had referred Islip's
nonresponsibility finding to the SBA for COC consideration. Islip
contends that the Army's referral to SBA constituted an irrevocable
determination that Islip's bid was responsive. This simply is not so.
A contracting agency's referral of a matter to SBA for consideration
under the COC procedures is not relevant to the question of whether the
bid later properly can be rejected; a COC referral neither waives
nonresponsiveness nor estops the agency from later rejecting a bid
determined to be nonresponsive. Dean's Security Professionals,
B-224429, July 31, 1986, 86-2 C.P.D. P 132; Nebraska Aluminum Castings,
Inc., B-222476, June 24, 1986, 86-1 C.P.D. P 582. Thus, the Army was
not foreclosed from considering the acceptability of Islip's bid
subsequent to the issuance of the COC.
As to the acceptability of Islip's bid, we have held that where a
bidder's pricing scheme grossly front-loads first article prices, this
renders the hid materially unbalanced per se so as to require rejection
of the bid as nonresponsive. Nebraska Aluminum Castings, Inc.--Second
Request for Reconsideration, B-222476.3, Nov. 4, 1986, 86-2 C.P.D. P
515; Edgewater Machine & Fabricators, Inc., B-219828, Dec. 5, 1985,
85-2 C.P.D. P 630. The rationale is that an award to a firm submitting
greatly enhanced first article prices will provide funds to the firm
early in the period of contract performance to which it is simply not
entitled if payment is to be measured on the basis of the actual value
of the first article (i.e., the legitimate costs associated with the
production of the first article) and, therefore, presents the same evils
as a prohibited advance payment. Nebraska Aluminum Castings,
Inc.--Second Request for Reconsideration, B-222476.3, supra; Riverport
Industries, Inc.--Request for Reconsideration, B-218656.2, July 31,
1985, 85-2 C.P.D. P 108.
Here, Islip's first article fabrication price of $15,000 per unit is
more than 36 times greater than its $408.90 unit price for the
production items. Islip's own initial argument that it had included in
its first article fabrication price the cost of additional lot items
which are to be delivered under a production items CLIN establishes that
Islip's first article price was unreasonable because Islip was trying to
recoup costs for production items as well as for first article items.
These costs are for units which the agency will receive and pay for
under the production CLIN and therefore are allocable to the production
CLIN. By not so allocating these costs, Islip materially unbalanced its
bid so that an award to Islip would have given it funds during the first
article period which would have been essentially an interest-free loan
from the government.
Islip has pointed out that the solicitation did not contain an
express notice that unbalanced bidding was prohibited. However, we have
held that even where the solicitation does not contain such express
notice, the rejection of this kind of unbalanced bid is required in
order to maintain the integrity of the competitive system. Nebraska
Aluminum Castings, Inc.--Second Request for Reconsideration, B-222476.3,
supra.
Islip also argues that its first article price is reasonable because
it does not exceed a 25 percent limitation on progress payments prior to
first article approval which is contained in section H-9 of the IFB.
However, this provision is unrelated to the reasonableness of Islip's
first article price. The provision merely sets a ceiling on progress
payments prior to first article approval of the price for the first
article, or 25 percent of the total contract price, whichever is less.
Here, the record establishes that Islip's cost for the first article
fabrication (only one of two first article SLINS) was substantially less
than the $30,000 price which Islip bid. Therefore, this clause would
limit preapproval progress payments to the sum of this lesser amount
plus the price for the first article testing and test reports SLIN, and
it does not establish the reasonableness of Islip's $30,000 first
article fabrication price.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Areawide Services, Inc.
File: B-225253
Date: February 9, 1987
1. Where agency amends solicitation to remove a provision as
protester requested, protest based on that provision is academic.
2. Protest that requirement for bid and performance bonds is unduly
restrictive is without merit since it is within the agency's discretion
whether to require bonding in a solicitation and General Accounting
Office will not upset such a determination made reasonably and in good
faith.
3. There is no requirement that there be a history of performance
problems before a performance bond may be required.
4. An issue which is first raised in a protester's comments on an
agency's report must independently meet timeliness requirements of Bid
Protest Regulations.
Areawide Services, Inc. (Areawide), protests the allegedly
restrictive provisions of invitation for bids (IFB) No. GS11P86MJC0131,
a small business set-aside, issued by the General Services
Administration (GSA), for security guard services at the Casimir Pulaski
Building in Washington, D.C. The grounds of the protest are that the
solicitation improperly included a requirement that bidders obtain a
minimum secret security clearance by the time of bid opening and
requirements for bid and performance bonds.
We dismiss the protest in part and deny it in part.
The solicitation, issued on October 10, 1986, required all
prospective bidders to provide a bid bond equal to 20 percent of the
first year contract price at the time of bid opening and a performance
bond equal to 20 percent of the first year contract price prior to
award. In addition, the solicitation required bidders to possess a
minimum secret security clearance. Bid opening was scheduled for
November 24.
By letter of protest to this Office received November 21, Areawide
objected to the bonding and security clearance requirements of the
solicitation. Shortly before the time originally set for bid opening,
the contracting officer notified all prospective bidders telephonically
of an amendment to the solicitation, which deleted the security
clearance requirement of the solicitation and extended the date for bid
opening to December 10. The amendment is memorialized in a writing
dated November 28. We note as well that on December 10, some 7 bids
were received; Areawide failed to bid upon the solicitation, allegedly
because it was unable to obtain the required bonding.
Since the November 28 amendment removes the security clearance
requirement from the solicitation, thus satisfying the concerns of the
protester, we dismiss this aspect of the protest as academic. IBI
Security Service, Inc., B-217444, Aug. 19, 1985, 85-2 C.P.D. P 189.
As to the propriety of the bonding requirements, Areawide argues
primarily that these requirements were unreasonable and unduly
restricted competition from small businesses. Specifically, the
protester alleges that many government agencies have acquired security
guard services without requiring performance or bid bonds; that GSA has
not pointed to a history of contractor default in previous contracts for
these security services and that the awardee under this contract will
not be entrusted with an amount of government property significant
enough to warrant the bonding requirements of this solicitation. 1/
Areawide argues, moreover, that contractor responsibility can be
established by a preaward survey, thus obviating the need for the
bonding requirements.
The agency responds that the contracting office reasonably determined
that the bonding requirements of this solicitation were in the best
interest of the government and Areawide has not met its burden of
demonstrating that this determination was made unreasonably or in bad
faith; that even if competition may have been restricted, the bonding
requirements were necessary to secure the fulfillment of the
contractor's obligations; that government property will be provided to
the contractor under the contract and that it need not point to a
history of contractor nonperformance in order to reasonably impose
bonding requirements.
We have consistently held that performance bond requirements,
although they may result in a restriction of competition, are a
necessary and proper means of securing to the government fulfillment of
a contractor's obligations under a contract. D.J. Findley, Inc.,
B-221096, Feb. 3, 1986, 86-1 C.P.D. P 121. Although as a general rule,
in the case of nonconstruction contracts, agencies are admonished
against the use of performance bonds, see FAR, 48 C.F.R. Sec.
28.103-1(a), the use of a performance bond is permissible where such a
bond is needed to protect the government's interest. This is so whether
or not the agency's rationale for imposing a performance bond
requirement comes within the four articulated circumstances for a
performance bond in the FAR, 48 C.F.R. Sec. 28.103-2(a). Professional
Window and Housecleaning, Inc., B-224187, Jan. 23, 1987, 87-1 C.P.D. P .
In reviewing a challenge to the imposition of a bonding requirement,
we look to see whether the requirement is reasonable and imposed in good
faith; the protester bears the burden of establishing unreasonableness
or had faith. See D.J. Findley, Inc., B-221096, supra. In a memorandum
for the record dated Octoher 6, the contracting officer states, as one
rationale for including a performance bond requirement, the following:
"Historical data from bid abstracts reveals that a significant
percentage of bidders in the low price range have submitted bids
at or below cost. This results in one (1) to three (3) bid
verification requests by the Contracting Officer for each
solicitation. Once a bid is challenged and the bidder verifies
its bid, the award cannot be denied simply because it chooses to
bid at a loss.... Thus, the risk of performance is substantial and
the Government must have bonding protection."
We cannot say that this rationale is unreasonable or put forth in bad
faith, and the protester has offered no substantive evidence to the
contrary. Moreover, there is no requirement that there be a history of
performance problems before performance bonds may be required. Intelcom
Support Services, Inc., B-222560, July 18, 1986, 86-2 C.P.D. P 82.
Finally, we do not agree with protester's assertion that a preaward
survey obviates the need for a performance bond. A preaward survey is
an evaluation of a prospective contractor's capability to perform a
proposed contract. It does not offer the procuring agency any legal
protection in case of default after award has been made as does a
performance bond. See generally Harris Systems International, Inc.,
B-219763, Oct. 18, 1985, 85-2 C.P.D. P 423. We therefore find that the
imposition of a performance bond requirement was reasonable in this
solicitation and accordingly deny this basis of protest.
As to the bid bond, the FAR, 48 C.F.R. Sec. 28.101-1(a), states, "The
use of bid guarantees shall be required only when a performance bond . .
. is required." Having found the performance bond in this solicitation
proper, we also conclude that the agency properly included a bid bond in
the solicitation.
As a final matter, in its comments upon the agency's report, Areawide
alleges that the contracting officer should have negotiated this
procurement rather than solicit sealed bids. This argument is untimely
raised.
Protest arguments not raised in a protester's initial submission must
independently satisfy the timeliness require ments of our Bid Protest
Regulations, 4 C.F.R. Sec. 21.2 (1986), Radionic Hi-Tech, Inc.,
B-219116, Aug. 26, 1985, 85-2 C.P.D. P 230. Since this basis of
protest is an alleged impropriety apparent upon the face of the
solicitation, it was necessary for Areawide to file a protest in this
Office upon this ground prior to the December 10 bid opening.
Areawide's comments, in which it raises this issue, were filed with our
Office on December 29; this basis of protest is therefore dismissed as
untimely pursuant to our Bid Protest Regulations, 4 C.F.R. Sec.
21.2(a)(1).
The protest is dismissed in part and denied in part.
Harry R. Van Cleve
General Counsel
1/ Under the Federal Acquisition Regulation (FAR), 48 C.F.R. Sec.
28.103-2(a) (1986), entrusting a contractor with government property is
one of four articulated circumstances where the imposition of a
performance bond is suggested as in the government's interest.
Matter of: Reading Products Co., Inc.
File: B-225222
Date: February 10, 1987
1. Protest that the procurement should have been issued as a
100-percent small business set-aside is untimely where it was not filed
until after the closing date for the receipt of initial proposals.
2. Untimely protest will not be considered under the significant
issue exception to the Bid Protest Regulations where the issue raised by
the protester has been considered previously, or under the good cause
exception where there is no showing that some compelling reason beyond
the protester's control prevented the timely filing of the protest.
Reading Products Co., Inc., protests the failure of the Naval
Regional Contracting Center (NRCC) to issue request for proposals (RFP)
No. N00600-86-R-2296 as a 100-percent small business set-aside.
We dismiss the protest.
The RFP was issued on January 27, 1986, on an unrestricted basis.
The closing date for the receipt of initial proposals was February 26.
Reading submitted a proposal, which was determined to be within the
competitive range. Reading's protest against the agency's failure to
restrict the procurement to small business participation was filed with
our Office on November 17. Award has not been made.
Our Bid Protest Regulations require protests based upon alleged
improprieties in a solicitation which are apparent prior to the closing
date for the receipt of initial proposals to be filed prior to the
closing date. See 4 C.F.R. Sec. 21.2(a) (1) (1986). Since the protest
that Reading filed on November 17 was obviously not filed prior to the
closing date of February 26, it is untimely and not for consideration.
The Liberty Consortium, B-215042, Apr. 12, 1985, 85-1 CPD P 416.
Reading argues that even if its protest is untimely it should be
considered since the protest raises a significant issue dealing with a
contracting officer's duty regarding small business set-asides and since
there was good cause due to extenuating reasons for not protesting
earlier. We will review an untimely protest where we determine that the
protest raises issues significant to the procurement system or where
good cause is shown. See 4 C.F.R. Sec. 21.2(c). However, we do not
agree that these exceptions apply here.
In order to prevent the timeliness requirements from becoming
meaningless, the significant issue exception is strictly construed and
limited to protests that raise issues of widespread interest to the
procurement community which have not been considered on the merits in a
previous decision. ITT Telecom Prods. Corp., B-221325 et al., Mar. 21,
1986, 86-1 CPD P 283. The issue raised by Reading has been previously
considered by our Office. See Educ. Technology & Servs., Inc.,
B-211231, Apr. 22, 1983, 83-1 CPD P 449. The good cause exception to
our timeliness rules is limited to circustances where some compelling
reason beyond the protester's control prevented the timely filing of the
protest. ITT Telecom Prods. Corp., supra. Reading has presented no
such reason here.
Accordingly, the protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
Matter of: Inscom Electronics Corporation
File: B-225221
Date: February 4, 1987
To be responsive a bid must reflect an unequivocal offer to provide
the exact product or service called for in the invitation for bids (IFB)
so that its acceptance would bind the contractor to perform in
accordance with the IFB's material terms and conditions. Where a bid
took exception to a material term of the IFB but also stated that it
accepted all terms and conditions of the IFB without exception,
conflicting statements in bid created ambiguity and bid was properly
rejected as nonresponsive
Inscom Electronics Corporation protests the rejection of its low bid
submitted in response to invitation for bids (IFB) No. DAAH01-86-B-A342,
a small business set-aside, issued by the Department of the Army for the
procurement of missile system electronic components. The contracting
officer rejected the bid as nonresponsive because, among other things,
the bid contained a statement which took exception to the IFB's quantity
requirements. Inscom contends that its bid should not have been
rejected because the statement was "inadvertently" included in its bid.
We deny the protest.
The IFB was issued on May 9, 1986, with a bid opening date of June
16, 1986. The IFB contemplated the award of a multiyear,
requirements-type contract that required the contractor upon receipt of
delivery orders to fill all actual purchase requirements for specified
supplies during the contract period. The IFB asked for bid prices on a
firm, current-year requirement for 58 units and four additional order
quantities each for an estimated 58 units to be ordered in future years.
The IFB also indicated minimum and maximum order quantities for future
program years and reserved to the Army the right to order more or less
than estimated quantities within the minimum/maximum limitations set
forth.
Seven bids were received by the bid opening date and Inscom's prices
were low. These prices, however, were contained in a letter dated June
15 (without the bid package) which stated that "Any reduction in
quantity quoted will require permission from Inscom." The letter further
stated that Inscom accepted all terms and conditions of the IFB with no
exceptions. The contracting officer rejected Inscom's June 15 letter
bid as nonresponsive because the bid required Inscom's approval for
ordering other than the estimated quantities.
Inscom's June 15 letter also said that a "formal bid" had been mailed
and should reach the bid office within the next few days. The bid
package, however, arrived at the bid office on June 19 with a postmark
of June 17. As this was 3 days after the specified bid opening date,
the Army did not consider it.
Award was delayed because of the unavailability of funds and was
ultimately made to United Plating Incorporated on October 31 after the
second low bidder refused to extend its bid acceptance period.
Inscom's protest states that the permission-from-Inscom statement in
the June 15 letter "was not part of Inscom's formal submission."
(Emphasis in original.) However, as noted above, Inscom's "formal
submission" (the bid package) was received by the Army 3 days after bid
opening and could not properly be considered for award by itself or as a
modification to Inscom's timely submitted June 15 letter bid. Under the
terms of the Federal Acquisition Regulation (FAR) clause at 48 C.F.R.
Sec. 52.214-7 (1985), "Late Submissions, Modifications, and Withdrawals
of Bids," which the IFB incorporated by reference, any bid or
modification of a bid received after bid opening may not be considered
unless it was sent by registered or certified mail or was late because
of government mishandling. Therefore, the Army's rejection of Inscom's
"formal submission" received on June 18 was proper since the record
reveals no basis for applying any of the exceptions to the late bid
rule.
The sole remaining issue for our consideration is the responsiveness
of the bid letter of June 15. To be responsive, a bid must reflect an
unequivocal offer to provide the exact product or service called for in
the solicitation so that its acceptance would bind the contractor to
perform in accordance with the material terms and conditions of the IFB.
Spectrum Communications, B-220805, Jan. 15, 1986, 86-1 CPD P 49. Any
bid that is materially deficient must be rejected; a defect in a bid is
material if it significantly affects price, quality, quantity, or
delivery. Tabco Products, Inc., B-222632, Aug. 27, 1986, 86-2 CPD P 231
at 3. Accordingly, Inscom's letter bid is materially deficient, and
therefore nonresponsive, because its acceptance would negate the Army's
right to reduce the ordered quantities below the estimated 58 units
without permission from Inscom.
Although Inscom attempts to explain that the permission statement was
included through inadvertence, such explanation could not be considered
by the contracting officer because responsiveness must be determined
from the bid as submitted. Continental Telephone of California,
B-213255, Apr. 17, 1984, 84-1 CPD P 428. Inscom's letter bid which
first took exception to a material provision in the IFB and then
accepted all terms and conditions without exceptions was at best
ambiguous because of these conflicting statements, and it is wellsettled
that an ambiguous bid in such circumstances must be rejected as
nonresponsive. See Hirt Telecon Co., B-222746, July 28, 1986, 86-2 CPD
P 121 at 2.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Shamrock Industries Inc.; Southern Plastics Engineering
Corp. --Reconsideration
File: B-225216.2; B-225216.3
Date: March 18, 1987
1. While an agency may not properly award a contract with the intent
to modify it, when a protester neither alleges nor makes out a prima
facie case that this occurred, a modification executed 5 months after
award is a matter of contract administration, not within the bid protest
jurisdiction of the General Accounting Office.
2. When contract modification is within the scope of an original
contract and is supported by consideration, the contracting officer acts
within his authority in agreeing to it, and in fact is the only person
authorized to execute a change order.
3. A bidder's attempt after opening to modify its bid to provide an
accelerated delivery schedule at the same price cannot be accepted
because it constitutes a late modification.
This decision involves two protests against an allegedly improper
modification of a contract for certain camoflage equipment known as
batten spreaders. The United States Army Troop Support Command, St.
Louis, Missouri, awarded the contract on July 10, 1986, to Bahr, Inc.,
under invitation for bids No. DAAK01-86-B-C057.
We dismiss a protest by Shamrock Industries Inc., and we affirm a
prior dismissal of a similar protest by Southern Plastics Engineering
Corporation.
Southern initially protested the terms and conditions of the
solicitation, which it alleged improperly permitted bidders who had to
undergo first article testing a longer time for delivery than those for
whom such testing was waived. The protester also alleged that the
procuring activity and the awardee intended to negotiate or had
negotiated a contract modification under which significant price
increases would be exchanged for an accelerated delivery schedule.
We dismissed Southern's protest on the first ground because it
involved an alleged deficiency that had been apparent on the face of the
solicitation, but had not been filed, as required by our regulations,
before bid opening. See Southern Plastics Engineering Corp., B-225216,
Dec. 2, 1986, 86-2 CPD P 630. We declined to consider the propriety of
the purported modification, stating that although an agency may not
award a contract with the intent to modify it, Southern had neither
alleged nor made out a prima facie case that this had occurred.
Therefore, we stated, the modification was a matter of contract
administration, and not within our bid protest jurisdiction. Id.
Southern now requests reconsideration because, on the basis of
information obtained under the Freedom of Information Act, it has
learned that the modification, issued November 6, 1986, indeed changed
delivery terms and increased the contract price. In post-award
discussions with the procuring activity, Southern states, it similarly
offered to accelerate delivery at a price that would have been less than
the awardee's. It seeks termination of the awarded contract and
resolicitation.
Shamrock Industries Incorporated, which has not previously protested
concerning this procurement, also alleges that the modification was
improper; argues that the contracting officer is not authorized to make
a unilateral determination that a price increase is offset by
accelerated delivery; and states that it would be willing to perform on
the accelerated schedule without increasing the unit price that it
originally bid. The firm seeks the award as the low bidder.
As we stated in our prior decision, an agency may not properly award
a contract with the intent to modify it. American Television Systems,
B-220087.3, June 19, 1986, 86-1 CPD P 562; U.S. Materials Co.,
B-216712, Apr. 26, 1985, 85-1 CPD P 471. Here, however, the Army states
that the need for accelerated delivery became known only after award and
was ordered by the materiel manager to meet Army commitments. The
contract, awarded in July, was not modified until November. In the
absence of evidence other than the protesters'speculative statements
that a contract was awarded with an intent to modify it, we remain of
the opinion that the protested modification is a matter of contract
administration. See Datastrip Corp., B-217581, Jan. 25, 1985, 85-1 CPD
P 105. The protesters have neither alleged nor shown that the
modification was beyond the scope of the original contract in that the
goods or services to be delivered are different from those covered by
the original solicitation, so as to require a separate, new procurement.
See King-Fisher Co., B-224341, Aug. 28, 1986, 86-2 CPD P 240;
Educational Computer Corp., B-221276, Mar. 7, 1986, 86-1 CPD P 230.
As for Shamrock's allegation that the contracting officer lacked
authority to determine that the accelerated delivery schedule justified
a price increase, since the modification was within the scope of the
original contract, the contracting officer was acting within his
authority in agreeing to it, and in fact was the only person authorized
to execute a change order. No higher-level approval is required. See
Federal Acquisition Regulation, 48 C.F.R. Secs. 43.102, 43.202 (1986).
Such a modification must, as a matter of law, be supported by
consideration, i.e., some benefit flowing to the government. See
generally 58 Comp. Gen. 7 (1978) and court cases cited therein. Here,
the contractor's agreement to deliver earlier than required by the
contract served as consideration for the price increase to which the
contracting officer agreed, and vice versa. Shamrock's protest on this
basis is therefore without legal merit.
Finally, the protesters' offers after bid opening to accelerate their
delivery schedules amount to attempted late modifications of their bids
and, as such, cannot be considered, regardless of whether the government
would achieve a savings that Southern believes would amount to $300,000.
See Tabco Products, Inc., B-222632, Aug. 27, 1986, 86-2 CPD P 231.
We affirm our prior dismissal of Southern's protest and dismiss
Shamrock's protest.
Harry R. Van Cleve
General Counsel
Matter of: Alan Scott Division--Request for Reconsideration
File: B-225210.3
Date: March 6, 1987
Request for reconsideration of prior decision is denied where the
request contains no statement of the facts or legal grounds warranting
reversal or modification but merely restates arguments made by the
protester and considered previously by the General Accounting Office.
Alan Scott Industries requests that we reconsider our decision in
Alan Scott Industries, B-225210.2, Feb. 12, 1987, 87-1 CPD P , in which
we denied in part and dismissed in part its protest against the
rejection of its bid under invitation for bids (IFB) No.
DLA120-85-B-2394, issued by the Defense Personnel Support Center (DPSC)
for retractors. ASI had contended that DPSC improperly determined ASI
to be nonresponsible because of defects in its preaward samples.
We denied the protest against the contracting officer's negative
responsibility determination where the determination was based on a
negative evaluation of preaward samples and the record contained
documentation that provided a reasonable basis for the evaluation
findings and the contracting officer's determination. We held that the
fact that ASI may have been found responsible by other contracting
officers did not show that the contracting officer had acted in bad
faith because nonresponsibility determinations are inherently judgmental
and based upon the circumstances of each procurement. In response to
ASI's complaints that it had not been given the opportunity to examine
the samples to determine the validity of defects found by DPSC, nor been
given access to instruments which ASI believed DPSC used to test its
samples, we noted that the preaward samples were available at DPSC for
bidder examination, and that DPSC had stated that the defects in ASI's
samples were found without the aid of such instruments.
We deny the request for reconsideration.
Under our Bid Protest Regulations, 4 C.F.R. Sec. 21.12(a) (1986), a
request for reconsideration must contain a detailed statement of the
factual and legal grounds upon which reversal or modification is
warranted and must specify any errors of law made in the decision or
information not previously considered. Information not previously
considered refers to information which was overlooked by our Office or
information to which the protester did not have access when the initial
protest was pending. Flight Resources, Inc.--Reconsideration,
B-220680.4, July 15, 1986, 86-2 CPD P 66.
ASI presents no new facts or arguments to indicate error in our
previous decision. The request merely restates arguments made by ASI
and previously considered by our Office, and asserts that our Office was
remiss for not conducting an independent investigation. However, as we
have previously held, the protester has the burdens of proving its case;
we will not conduct investigations for the purpose of establishing
whether a protester may have a valid basis for protest. Nickum &
Spaulding Associates, Inc., B-222468, June 10, 1986, 86-1 CPD P 542.
Thus, while the request for reconsideration clearly reflects ASI's
disagreement with our decision, it does not meet the requirement for a
detailed statement of the factual and legal grounds warranting reversal
or modification, nor provide us with any other basis to reconsider the
protest.
Harry R. Van Cleve
General Counsel
Matter of: Alan Scott Industries
File: B-225210.2
Date: February 12, 1987
1. Protest against contracting officer's negative responsibility
determination is denied where the determination was based on a negative
evaluation of preaward samples and the record contains documentation
that provides a reasonable basis for the evaluation findings and the
contracting officer's determination.
2. Fact that protester may have been found responsible by other
contracting officers does not show that contracting officer acted in bad
faith in making nonresponsibility determination because such
determinations are judgmental and based upon the circumstances of each
procurement.
3. Contracting officer may base nonresponsibility determination on
evaluation of preaward samples which shows protester does not have
capability to produce item in compliance with applicable specifications,
without affording the contractor an opportunity to explain or discuss
the evidence.
4. Protest against restrictive specifications is dismissed as
untimely where protester failed to file written protest to either agency
or General Accounting Office before bid opening.
5. Protest that contracting agency has not given protester
opportunity to examine samples to determine the validity of sample
defects is denied where record shows samples are available at agency for
bidder examination.
Alan Scott Industries (ASI) protests the rejection of its bid under
invitation for bids (IFB), No. DLA120-85-B-2394, issued by the Defense
Personnel Support Center (DPSC), Philadelphia, Pennsylvania, for
retractors. ASI contends that DPSC improperly determined ASI to be
nonresponsible because of defects in its preaward samples.
We deny the protest in part and dismiss it in part.
Section "M," clause 22 of the IFB stated that the purpose for the
preaward samples was to establish the bidder's capability, if awarded
the contract, to produce conforming items. ASI submitted its preaward
samples as requested. Based on tests which revealed defects, DPSC
determined that ASI was not capable of producing an item in compliance
with the specifications, and therefore was ineligible for award. DPSC
found that ASI's samples did not mesh properly, had grind marks, failed
a copper sulfate test and boil test, and contained crevices.
The preaward sample requirement clearly related, by its terms, to a
bidder's responsibility, that is, the firm's ability to meet the
contractual obligation. See F.A.R., Division of Cabot Corp., B-215032,
July 5, 1984, 84-2 C.P.D. P 19. The determination of a prospective
contractor's responsibility is the duty of the contracting officer, who
is vested with a wide degree of discretion and business judgment in
making that determination. Pauline James & Associates, B-220152,
B-220152.2, Nov. 20, 1985, 85-2 C.P.D. P 573. Although the contracting
officer's determination of responsibility should be based on facts and
conclusions reached in good faith, it is appropriate that the final
decision be left to the administrative discretion of the contracting
agency involved since it must bear the effect of any difficulties
experienced in obtaining required performance. Mico Photo Type,
B-223756, Oct. 9, 1986, 86-2 C.P.D. P 413.
For these reasons, our Office generally will not question a
contracting officer's negative determination of responsibility unless
the protester can demonstrate bad faith on the agency's part or the lack
of any reasonable basis for the determination. ICR, Inc., B-223033,
Aug. 13, 1986, 86-2 C.P.D. P 184. ASI has not made the necessary
showing here. Instead, we find the record provides a reasonable basis
for the contracting officer's determination.
For example, ASI alleges that DPSC cites as serious defects minute
grind marks that can only be specified by micron finish, and that these
marks do not affect the end use of the retractor. ASI contends that
DPSC illegally used magnification in the examination of the finish.
DPSC replies that military specification MIL-R-36675, shown on page 5 of
the IFB, classifies grind marks as major defects. According to DPSC,
surgeons are very concerned about instruments with grind marks, and
ASI's nonconformance was observed with normal unaided visual examination
without any magnification.
Similarly, ASI contends that MIL-STD-753A specifically eliminates use
of the copper sulfate test on type 400 stainless steel specified for
surgical instruments. However, as DPSC points out, MIL-STD-753A does
not apply to the IFB. MIL-R-36675, contained in the IFB, prescribes the
copper sulfate test.
Furthermore, although ASI also contends that crevices in an
instrument do not affect the end use of the retractor, DPSC notes that a
crevice is a major defect since the instrument must be finished so as
not to trap foreign matter which could cause contamination in a surgical
procedure.
ASI also complains that DPSC disregarded its completion of previous
contracts for the same instruments. DPSC replies that although the
determination of capability to perform was made on the preaward samples
inspected under the IFB, items submitted by ASI under its last contract
were found defective.
In view of the failure of the preaward samples to comply with the IFB
specifications, it was reasonable for the contracting officer to
conclude ASI was nonresponsible. The fact that ASI may have been found
responsible by other contracting officers does not indicate that the
contracting officer here acted in bad faith. Responsibility
determinations are made based upon the circumstances of each procurement
which exist at the time the contract is to be awarded. These
determinations are inherently judgmental, and two people can reach
opposite conclusions as to a firm's responsibility without either acting
in bad faith. See AMCO Tool & Die, 62 Comp. Gen. 213 (1983), 83-1
C.P.D. P 246.
ASI also protests that it was not given an opoortunity to correct
defects DPSC found in its preaward samples. However, section "M,"
clause 22 of the IFB specifically states that an additional preaward
sample will not be requested or accepted on this solicitation if the
original samples and data are not approved. Moreover, there is no
requirement that a protester be afforded the opportunity sought by ASI.
The contracting officer properly may base a nonresponsibility
determination on the evidence of record without affording the contractor
an opportunity to explain or otherwise defend against the evidence. See
Omneco, Inc.; Aerojet Production Co., B-218343, B-218343.2, June 10,
1985, 85-1 C.P.D. P 660. ASI also alleges that the boil test is
subjective and a means for DPSC to exclude unwanted contractors. This
allegation is untimely raised. The IFB provides that items shall be in
compliance with miltary specificaiton MIL-R-36675, which prescribes the
boil test. Our Bid Protest Regulations require that protests based on
alleged solicitation improprieties apparent on the face of the
solicitation be filed with either the contracting agency or our Office
prior to bid opening. 4 C.F.R. Sec. 21.2(a)(1) and (3) (1986); Delta
Elevator Service Corp., B-224903, Oct. 30, 1986, 86-2 C.P.D. P 501.
Since ASI did not raise its objection to the boil test until after bid
opening, its protest on this issue is untimely and will not be
considered.
ASI also contends that it has not been given the opportunity to
examine the samples to determine the validity of the defects found by
DPSC. However, the record shows that the preaward samples are available
at DPSC for bidder examination.
ASI also complains that DPSC has refused to give it certain
instruments which ASI apparently believes DPSC used to test its samples.
However, DPSC has stated that the defects for ASI's samples were found
without the aid of such instruments.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
Matter of: K-Son Construction Company
File: B-225207
Date: February 10, 1987
1. When a size status protest has been filed with the Small Business
Administration (SBA) against a prospective awardee, the regulations
permit the contracting officer to make award 10 days after SBA's receipt
of the protest.
2. Where a protester initially files a timely protest sand later
supplements it with new and independent grounds of protest, the
later-raised allegations must independently satisfy the General
Accounting Office timeliness requirements.
K-Son Construction Company (K-Son), protests the award of a contract
to Pavex Corporation under invitation for bids (IFB) No.
F02601-86-B-0055, a small business set-aside issued by the Department of
the Air Force for repair of a taxiway at Davis-Monthan Air Force Base,
Arizona. K-Son contends that it was improper for the Air Force to make
award to Pavex while K-Son's small business size status protest against
Pavex was pending with the Small Business Administration (SBA), and
that, in any event, Pavex did not meet the IFB's experience
requirements.
We dismiss the protest.
K-Son protested Pavex's small business size status to the Air Force
on September 25, 1986. The Air Force forwarded that protest to the SBA
on September 26, and the SBA acknowledged receipt of the protest on
October 7. On October 24, the contracting officer awarded the contract
to Pavex because more than 10 working days had passed since SBA's
receipt of K-Son's size status protest--the regulations permit award in
such case--and because the delay of award was hampering flying
operations at the installation.
On November 7, the SBA advised the Air Force that Pavex had been
found to be a large business, and K-Son protested to our Office on
November 14. Pavex filed an appeal of the SBA's size determination on
November 26.
Under the Federal Acquisition Requlation (FAR), 48 C.F.R. Sec.
19.302(h)(1) (1986), when a size status protest has been filed and
forwarded to the SBA, a contracting officer may not make an award until
the SBA Regional Administrator resolves the matter or until 10 working
days after the SBA's receipt of the protest, whichever occurs first.
Here, the SBA acknowledged receipt of K-Son's protest on October 7, and
the Air Force did not award the contract to Pavex until October 24, more
than 10 working days thereafter. Since the contracting officer's
actions were consistent with the FAR, we have no legal basis to object
to the award. See JRR Construction Co., Inc., B-220592, Oct. 4, 1985,
85-2 C.P.D P 383. We point out that where the SBA does not find a
protested firm large until after an otherwise proper award, the SBA
decision does not apply to the acquisition. Longview Construction Co.,
B-222519, Apr. 25, 1986, 86-1 C.P.D. P 408.
K-Son also alleges in its December 30 comments on the Air Force's
protest report that it is evident from Pavex's November 26 appeal to the
SBA that Pavex did not meet the experience requirements for the
solicitation. This issue is untimely, however. Our Bid Protest
Regulations require that a protest based on other than alleged
solicitation improprieties be filed not later than 10 working days after
the basis for protest is known or should have been known, whichever is
earlier. 4 C.F.R. Sec. 21.2(a)(2) (1986). Further, where a protester
initially files a timely protest and later supplements it with new and
independent grounds of protest, the later-raised allegations must
independently satisfy these timeliness requirements. Arndt & Arndt,
B-223473, Sept. 16, 1986, 86-2 C.P.D. P 307. Pavex filed its appeal to
the SBA, with a copy to K-Son, on November 26. K-Son did not raise this
issue with our Office until December 30, clearly more than 10 working
days after it knew the new basis for protest.
The protest is dismissed.
Robert M. Strong
Deputy Associate
General Counsel
Matter of: Brigadier General Charles J. Searock, Jr., USAF
File: B-225205
Date: September 25, 1987
A member of the uniformed services required by Air Force regulations
to live on base who for 30 days is forced to relocate with his
dependents into temporary quarters without kitchen facilities at his
permanent duty station due to uninhabitability of his government
quarters incurred additional expenses for meals. Since the member's
evacuation was necessary for the proper administration of the facility
as well as the personal safety of the member and his family, the member
may be reimbursed the expenses he incurred over and above what he would
have spent for food had he been allowed to remain in on-base housing.
We are asked to decide whether Brigadier General Charles J. Searock,
Jr., USAF, who at the time of this claim was Vice Commander of Tinker
Air Force Base, a command position, may be reimbursed for subsistence
expenses he incurred for 30 days while he and his family occupied
visiting officers quarters (VOQ) due to the uninhabitability of their
on-base housing. 1/ For the reasons to follow, General Searock may be
reimbursed for his food expenses to the extent that these expenses
exceeded his normal monthly food expenses.
In October of 1985, shortly after General Searock and his family
moved into on-base quarters at Tinker Air Force Base, his quarters were
rendered uninhabitable due to unacceptably high levels of chlordane.
Consequently, he and his family moved out of his quarters on October 9,
1985, and temporarily moved into VOQ while awaiting action to clear
quarters and render them livable. On November 8, 1985, General learned
that although efforts had been made to make his quarters livable, the
quarters were still uninhabitable. He, therefore, moved into a
permanent residence off base.
The VOQ lacked any facilities for preparing meals. Therefore, during
the 30 days he was in VOQ, the General and his family purchased all
their meals at commercial establishments. In view of this, General
Searock is seeking reimbursement of $1,680 based on 30 days of meals at
a daily rate of $56 ($14/day for each of the four family members).
Since he received basic allowance for subsistence (BAS) of $109.37
during this period, the General is claiming $1,570.63, the difference
between his expenses of $1,680 and his BAS of $109.37.
As a general rule, members of the military are not entitled to
receive subsistence expenses unless they are in a travel status,
traveling to a new permanent duty station or are performing temporary
duty away from their permanent duty station. See 37 U.S.C. Sec. 404.
Therefore, consistent with this general rule we have held on several
occasions that there is no authority to reimburse members for meal
expenses while they are at their permanent duty station and not in a
travel status. See B-194499, October 31, 1979; B-148084, March 23,
1962.
We have recognized that in certain limited situations there are
exceptions to the general rule that members of the military may not be
reimbursed for lodging and meal expenses while at their permanent duty
station. In a situation very similar to General Searock's, Major Peter
D. Schofield, USA, et al., B-213293, December 7, 1983, we approved
payment of the commercial lodging expenses of two military officers who
had to vacate their government quarters because of the high risk of
explosion from a natural gas leak. As we explained, Congress regularly
authorizes the appropriation of funds to be used for the operation and
maintenance of the armed forces. The reimbursement from operation and
maintenance funds is proper for reasonable costs necessarily incurred by
service members as a result of their compliance with competent military
orders issued to protect personnel from unsanitary or unsafe housing
conditions. Id. See also 52 Comp. Gen. 69 (1972), which held that
where costs are necessarily incurred as a result of competent orders
issued in response to the need for correct management of a military
installation, the costs may be reimbursed out of the operation and
maintenance account. As further explained in a later decision, two
conditions are necessary in order to authorize reimbursement of this
account: (1) the costs incurred must have been the direct result of
compliance with an order issued by competent military authority and (2)
the costs must have been mandatory to provide for the claimant's
habitation. 55 Comp. Gen. 932 (1976).
Air Force Regulation 90-1 requires that an officer in a command
position, such as General Searock, is required to reside in on-base
housing unless such quarters are not available. Therefore, when he was
required to vacate government quarters due to competent orders and he
was advised that his evacuation would be temporary, he acted reasonabiy
in moving with his family into VOQ. His move to VOQ clearly was the
most sensible and economical short-term solution. The expenses he
incurred for meals are to be considered mandatory to his habitation.
Therefore, we consider the meal expenses he incurred as both reasonable
and necessary to the operation and maintenance of the facility, and
therefore payable out of operation and maintenance funds.
While General Searock is entitled to be reimbursed for subsistence
expenses, we view the correct level of reimbursement as being the
additional subsistence expenses he incurred due to his being evacuated.
Had he been able to remain in his on-base housing with a kitchen, he
would have incurred meal expenses but not to the extent he incurred due
to the lack of a kitchen in his VOQ. Consequently, he should be
reimbursed the difference between his normal monthly food expenses and
the meal expenses he incurred during his month in VOQ less the amount
received for basic allowance for subsistence.
Comptroller General
of the United States
1/ Lieutenant Colonel Jack C. Stanley, USAF, Headquarters Oklahoma
City Air Logistics Center (AFLC), Tinker Air Force Base, has requested
this decision.
B-225191
January 13, 1987
Relief is granted Army disbursing official and his deputy under 31
U.S.C. Sec. 3527(c) from liability for improper payment resulting from
payee's negotiation of both original and recertified military checks.
Proper procedures were followed in the issuance of the recertified
check, there was no indication of bad faith on the part of the
disbursing official and his deputy, and subsequent collection attempts
are being pursued. However, for cases involving notices of losses
received after June 1, 1986, where the payee has left the Army or its
employ, we will no longer grant relief if the finance officer delays
more than 3 months in forwarding the debt to your collection division.
Brigadier General B. W. Hall
Deputy Commander for Operations
U.S. Army Finance and
Accounting Center
Indianapolis, Indiana 46249
Dear General Hall:
This responds to your request of November 3, 1986, that we relieve
Lieutenant Colonel (LTC) M.D. Erickson, Finance Corps, DSSN 5577,
Finance and Accounting Officer, U.S. Army Finance and Accounting Center,
Europe, and her deputy, Ms. D.J. Turner, under 31 U.S.C. Sec. 3527(c)
for an improper payment of a $392.68 check payable to Ms. Mary S.N.
White. For the reasons stated below, relief is granted.
The loss resulted when the payee negotiated both the original and a
recertified check. Both checks were in the same amount. The
recertified check was issued on the basis of the payee's allegation that
the original check had not been received and a request for stop payment
had been made. Both checks were issued by the Army under authority
delegated by the Department of the Treasury. 31 C.F.R. Sec. 245.8 and
Treasury Fiscal Requirements Manual for Guidance of Departments and
Agencies, Bulletin No 83-28.
It appears that the issuance of a recertified check in this case was
within the bounds of due care. Id. There was no indication of bad
faith on the part of the disbursing officers and adequate collection
efforts are being made. Accordingly, we grant relief.
Although we have granted relief here, we would like to comment on
Army's collection procedures. GAO has determined that in order to meet
the diligent collection requirement of 31 U.S.C. Sec. 3527(c), the
finance officer must forward losses to your collection division within 3
months from his/her receipt of a notice from Treasury that a loss has
occurred. (A longer time may be required if set-off procedures are
unsuccessfully attempted.) In order to allow Army time to comply with
this policy, GAO agreed not to institute this standard for cases where
the notices of loss were received before June 1, 1986.
To meet GAO's new policy, Army modified its disbursing procedures in
April 1986. Disbursing Policy Message 12-86, April 1986. The changes
in Army's procedures affected both the handling of losses from
substitute and recertified checks. Under these new procedures, losses
from either are recorded in the officer statement of accountability by
means of a journal voucher. Prior to that change, a journal voucher did
not have to be prepared in recertification cases. The new procedures
also require that the finance officer forward the debt to the collection
division. USAFAC (FINCP-FF), within 85 days from receiving notice from
Treasury that a loss has occurred. In addition, the procedures require
that within 90 days from preparing a journal voucher the finance officer
send a relief packet to USAFAC (FINCL-L).
In this case, the notice of a loss (the chargeback) from Treasury was
received by the finance officer in April 1985. As stated above, at that
time Army procedures did not require that a journal voucher be prepared.
However, in recognition of the April 1986 changes in Army's disbursing
procedures, the loss was recorded in the finance officer's June 1986
statement of accountability. At that time the finance officer sent a
relief packet to USAFAC (FINCL-L) but failed to forward the loss to the
collection division. USAFAC (FINCL-L) subsequently forwarded the debt
to your collection division in October 1986.
Although the notice of the loss was received before June 1, 1986, it
was not recorded until after that date. We think that after the journal
voucher was prepared the finance officer should have referred the loss
to the collection division, USAFAC (FINCP-FF), at the same time the
relief packet was sent to USAFAC (FINCL-L).
We are informally advised, however, that Army does not hold its
revised procedures applicable in this case since the chargeback from
Treasury was received prior to the Army's implementation of its new
procedures. Under these circumstances we will not deny relief here.
Nevertheless, we again reiterate, that for cases involving notices of
losses received after June 1, 1986, where the payee has left the Army or
its employ, we will deny relief if the finance office delays more than 3
months in forwarding the loss to your collection division.
Sincerely yours,
(Mrs.) Rollee H. Efros
Associate General Counsel
Matter of: Fraudulent Claim
File: B-225187
Date: June 9, 1987
A fraudulent claim for lodging taints the entire claim for per diem
on days for which fraudulent information is submitted, and per diem
payments will not be made for those days. Where fraud is suspected, the
claim is of doubtful validity and the claimant is left to his remedy in
the courts.
A claimant seeks reconsideration of our Claims Group settlement
issued in 1979, denying his claim for per diem based on an
administrative report of investigation provided by the Department of the
Air Force finding that he was erroneously overpaid $906.43 for
overstated lodging expenses in connection with each day of two
consecutive temporary duty trips to Ellsworth Air Force Base, South
Dakota, from May 16 through November 26, 1975, for which the claimant
submitted two vouchers totalling $4,819.75. Based on the agency's
reasonable suspicion of fraud, our Claims Group denied payment leaving
the individual to his remedy in the courts. By letter dated September
3, 1986, the claimant has resubmitted his claim stating in essence that
although he is willing to forfeit the overstated lodging expenses of
$906.03 from the original per diem claim of $4,819.75, the resulting
difference of $3,913.32 is, in his estimation, an undisputed figure
which he claims the government owes to him.
The affirmation of our Claims Group's 1979 settlement of this claim
is based on the consistent position of this Office in regard to claims
evidencing fraud and therefore of doubtful validity. The resolution of
the claimant's request for reconsideration is governed by the principles
established by our previous decisions at 57 Comp. Gen. 664 (1978) and 59
Comp. Gen. 99 (1979). In the former decision we held that where there
has been a fraudulent claim for lodging, the final settlement voucher
should contain no claim for subsistence expenses for the days covered by
the fraudulent claim. For the purposes of this rule, subsistence
expenses means all of those expenses contemplated within the definition
of per diem. A fraudulent claim for lodging taints the entire claim for
per diem on days for which such fraudulent information was submitted.
The average cost of lodging, and meals and miscellaneous expenses cannot
be considered separate items. Rather, when they are combined they yield
the daily per diem. It is thus each day of per diem which is considered
a separate item for the purposes of evaluating what parts of a voucher
which contains or is supported by fraudulent statements may be paid. 59
Comp. Gen. 99, at 101.
Applying the above principles to this case, we observe that since the
claimant originally submitted discrepant information with regard to
lodging expenses covering each day of the entire period of his temporary
duty, each day of his entire per diem claim is tainted by the suspicion
of fraud. Thus, even if his reclaim voucher were to contain accurate
statements of reduced per diem expenses submitted with verifiable
receipts, no per diem may be paid through settlement by this Office. 57
Comp. Gen. 664 at 667. Moreover, to the extent the record reflects that
the Air Force recouped the entire amount of the voucher payments
covering days for which fraudulent information had been provided, we
observe that it is proper to recoup those portions of the claim which
were based on fraudulent information. 41 Comp. Gen. 285 (1961). In
that case we held that where fraud is suspected, the claim obviously is
of doubtful validity, and under the principles of Longwill v. United
States, 17 Ct. Cl. 288 (1881), and Charles v. United States, 19 Ct. Cl.
316 (1884), the claimant in such cases should be left to his remedy in
the courts.
Accordingly, we affirm the 1978 adjudication of our Claims Group.
Acting Comptroller General
of the United States
Matter of: Robert Veleta - Overtime Compensation Military Leave
File: B-225183
Date: September 3, 1987
An employee's claim for compensation for 8 hours of overtime work
which he claims he would have worked but for being on military leave
while on duty with his Reserve unit may not be allowed because he
presented no evidence that the overtime was regularly scheduled or
approved prior to the administrative workweek.
This action is in response to a request for a decision pursuant to 4
C.F.R. Sec. 22.1 et seq., from the union representing Mr. Robert Veleta
regarding his claim for overtime pay while on military leave for a
period he was serving on active duty in the Reserves. 1/ It is our view
that the overtime involved is not compensable since it was not regularly
scheduled; thus the claim may not be paid.
Mr. Robert Veleta, a civilian employee at the Naval Air Rework
Facility in Jacksonville, Florida, was on military leave during the
period May 10 to May 23, 1986. On May 17, 1986, the employees in Mr.
Veleta's shop were required to work overtime. Mr. Veleta requested pay
for 8 hours of overtime, asserting that he would have worked overtime
and received the pay had he not been on military leave. He submitted a
grievance to the Department of the Navy.
The agency issued a formal grievance decision denying Mr. Veleta's
claim, noting that overtime pay may not be included in the pay Mr.
Veleta received for his military leave period unless the overtime work
was "regularly scheduled." The agency made the determination that, while
he would have been required to work overtime on the day in question had
he not been on military leave, the work was not scheduled in advance of
the administrative workweek, nor was it of a regular and recurring
nature; thus, it did not meet the definition of regularly scheduled
overtime work.
Mr. Veleta's claim is based on 5 U.S.C. Sec. 6323, which requires
that an employee not suffer loss in pay for the period he is away on
military leave. In order for overtime work to be compensable with
respect to an employee on military leave, the overtime duty must have
been "regularly scheduled" and it must be clear that the employee would
have been required to work the overtime. Regularly scheduled work means
work that is scheduled in advance of an administrative workweek. 5
C.F.R. Sec. 550.103(p). We have recognized that the requirement that
the overtime work be regularly scheduled may be distinct from the
requirement that the employee would have been required to work the
overtime. Howard L. Young, B-202864, August 10, 1982, reconsidered,
B-202864, September 2, 1983; and B-226735, May 22, 1987.
In the present case Mr. Veleta asserts that all employees in his shop
were required to work on the date in question and thus he would have
been required to work had he not been on military leave. He also
asserts that he has been unfairly paid less than he would have been had
he not been serving on military duty. However, he has provided no
arguments or evidence showing that the work was regularly scheduled;
that is, scheduled in advance of the administrative workweek. And as
indicated previously, the agency determined it was not scheduled in
advance. Accordingly, we find that the claim must be denied.
Comptroller General
of the United States
1/ The request was submitted by Robert W. Hall, Business Agent, Truck
Drivers, Warehousemen & Helpers of Jacksonville, Local 512,
Jacksonville, Florida.
Matter of: American Contract Services, Inc.
File: B-225182
Date: February 24, 1987
1. When a solicitation includes wage determinations covering a list
of 11 classes of service employees and incorporates a clause by which
standards for wages and fringe benefits of unclassified employees may be
conformed, the General Accounting Office denies a protest alleging that
the solicitation is deficient because it does not also include a wage
determination for a class of employee that the agency does not
necessarily regard as required for contract performance.
2. General Accounting Office denies a protest that color printing
estimates in a solicitation for audiovisual services are defective,
where protester fails to show that the estimates are not based on the
best information available or are otherwise deficient.
3. Alleged violation of a Department of the Air Force regulation
setting forth internal policies for audiovisual services does not
provide a valid basis for protest. Moreover, an agency may reasonably
base a solicitation on a revised regulation that will become effective
during the term of the contract.
4. When a solicitation requires the successful contractor to furnish
equipment described by a brand name or equal, and in response to a
protester's concerns, the agency states that it will amend the
solicitation to include salient characteristics, protest alleging that
lack of information about the equipment prevents bidding on an equal
basis is rendered academic.
American Contract Services, Inc. protests the terms and conditions of
invitation for bids (IFB) No. F08637-86-B0035, issued July 17, 1986, for
audiovisual services at Tyndall Air Force Base, Florida. The agency
amended the solicitation five times, partially in response to questions
raised by the protester and other potential bidders; however, the
protester contends that deficiencies remain. The Air Force has
postponed bid opening indefinitely pending resolution of the protest.
We deny the protest.
The solicitation, a 100-percent small business set-aside,
contemplates a fixed-price requirements-type contract for a base and 4
option years. Bidders are to provide unit and extended prices for
estimated monthly quantities of various audiovisual services. The IFB
lists government furnished property to be operated by the successful
contractor and specifies other equipment to be furnished by the
contractor. Additionally, it incorporates two wage determinations
setting forth minimum wages to be paid under the contract.
American asserts that (1) the wage determinations are defective
because they do not include the job classification of computer graphics
operator; (2) the estimates for color prints overstate the government's
minimum needs and do not conform to the applicable Air Force regulation,
and (3) the IFB fails to specify the quality and type of photo
typesetter and processor to be provided by the contractor.
The Service Contract Act of 1965 requires federal contractors to pay
minimum wages and fringe benefits as determined by the Secretary of
Labor to employees under service contracts exceeding $2,500. 41 U.S.C.
Secs. 351-358 (1982). Department of Labor (DOL) regulations
implementing the Act require agencies to notify DOL of their intent to
enter into such contracts and to list the classes of workers they expect
to employ. 29 C.F.R. Sec. 4.4 (1986). The Air Force in this case
provided DOL with a list of 11 classes of prospective employees, but did
not include computer graphics operators among these. The IFB contains
this list, as well as two blanket wage determinations, one for
administrative support and clerical occupations and the other for
automatic data processing information occupations; together these
encompass 93 classes of service employees.
The IFB also incorporates by reference a clause setting forth
standards by which the wages and fringe benefits for any classes of
employees omitted from the wage determination can be conformed.
Generally, the contractor must take into account the knowledge and skill
levels of unlisted workers and establish wage and fringe benefits that
are reasonably related to those of workers in listed classifications
with the same skills. 29 C.F.R. Sec. 4.6(b)(2).
The protester contends that the Air Force improperly failed to notify
the DOL that because of a recent purchase of computer graphics
equipment, operators would be required. According to the protester,
without a wage determination for computer graphics operators, bidders
cannot compete on an equal basis. The protester believes it could be at
a competitive disadvantage if it offered computer graphics personnel,
since the conforming procedure is not initiated until after award. We
find no merit to this argument. In the ahsence of a collective
bargaining agreement, the question of the proper wage rate for unlisted
classes of service employees is to be submitted to DOL for final
determination. 29 C.F.R. Sec. 4.6(b) (2)(ii). To the extent that the
absence of a particular wage determination will affect bid prices, all
bidders will be affected equally. Moreover, the wage determinations
specify minimum wages; they are not a guarantee that a bidder can
employ the appropriate workforce at those rates. See Broken Lance
Enterprises, Inc., B-201482, Mar. 17, 1981, 81-1 C.P.D. P 203. Some
risk is inherent in projecting costs, and bidders are expected to allow
for that risk in computing their bids. Id. Finally, although the
solicitation required graphics services, it does not appear from the
record that the Air Force had reason to expect that computer graphics
personnel necessarily would be required to perform the contract.
We conclude that the agency complied with its obligation to obtain a
wage determination for inclusion in the IFB. The regulatory procedures
for contractors to establish wage and fringe benefits for omitted
classes of employees provide a reasonable basis for them to estimate
their labor costs for computer graphics operators--if they wish to offer
such employees--and to compete on an equal basis. Consolidated
Marketing Network, Inc., B-224458, Oct. 10, 1986, 86-2 C.P.D. P 422.
We deny the protest on this basis.
The protester next complains that the estimates for color prints are
excessive in comparison to previous color usage at Tyndall Air Force
Base. The protester also contends that the color requirement is not in
accord with Air Force Regulation (AFR) 95-7, "Audiovisual Services"
(Sept. 4, 1984), which requires prior approval of color prints.
Additionally, the protester maintains that half of the estimated number
of prints will be larger than the standard 5 by 7 inch size authorized
by AFR 95-7.
The Air Force responds that AFR 95-7 was written when color
processing cost more than comparable-sized black and white processing.
The agency reports that advancements in technology now make automated
color processing as inexpensive or less expensive than manual black and
white processing. According to the Air Force, AFR 95-7 was rewritten to
reflect the current state of color processing, and the new regulation
AFR 700-32, although not yet effective, will allow the use of color
without prior approval except when black and white negatives are
required for reproduction. The agency reports that it requested and
received approval to base the solicitation upon the forthcoming
regulation to preclude costly changes to the contract which, if options
are exercised, will extend to 1991.
The agency also maintains that the estimated quantities of color
prints are necessary to support the Air Force Engineering and Services
Center. Additionally, the agency reports that AFR 700-32 places no
limitation on the size of color prints.
The responsibility for drafting specifications is primarily that of
the contracting agency, and we will not question an agency's
determination of its minimum needs unless the protester shows that the
determination is clearly unreasonable. Jones Refrigeration Serv.,
B-221661.2, May 5, 1986, 86-1 C.P.D. P 431. When, as here, an agency
solicits bids for a requirements-type contract on the basis of estimated
quantities, it must base its estimates on the best information
available, i.e., on reasonably accurate representations of anticipated
needs. The Big Picture Co., Inc., B-220859.2, Mar. 4 1986, 86-1 C.P.D.
P 218. Since the protester bears the burden of proof, we normally will
not sustain a challenge to an agency's estimates unless the protester
shows that the estimates are not based on the best information
available, misrepresent anticipated actual requirements, or resulted
from had faith or fraud. Id. Space Servs. Int'l Corp., B-207888.4 et
al., Dec. 13, 1982, 82-2 C.P.D. P 525.
In our view, the protester in this case has done no more than
disagree with estimates that reflect the reasoned judgment of the agency
personnel responsible for audiovisual services at Tyndall AFB.
Moreover, AFR 95-7 is an internal Air Force manual; it sets out
executive branch policy that lacks the force and effect of law. See
Julie Research Laboratories, Inc.--Reconsideration, B-216312.2 et al.,
June 12, 1985, 85-1 C.P.D. P 672. Therefore, to the extent the
solicitation does not conform to AFR 95-7, it does not orovide a valid
basis for protest. See Timplex, Inc., et al., B-197346 et al., Apr.
13, 1981, 81-1 C.P.D. P 280. In any event, we view the agency's
determination to draft the solicitation in accord with the forthcoming
regulation as reasonable.
The protester also alleges that the solicitation is deficient with
regard to the contractor-furnished equipment. The IFB requires a photo
typesetter and processor "equal to Compugraphic preview system."
According to the protester, this equipment must perform successfully
with new Air Force equipment that was not in place at the time of the
site visit. The protester maintains that lack of information on this
equipment could cause unequal bidding.
The agency states that upon resolution of the bid protest, it will
amend the solicitation and set forth the salient characteristics of the
Compugraphic equipment "to preclude any confusion as to what is
necessary to satisfy the requirement." In our opinion, this renders the
protest on this basis academic.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Twentyfirst Century Technological Innovations Research
and Development Enterprising
File: B-225179.2
Date: April 1, 1987
In light of agency discretion under Small Business Innovation
Research Program to fund or reject any particular proposal, General
Accounting Office review of agency's rejection of a proposal submitted
under that program is limited to determining whether agency complied
with any applicable regulations and solicitation provisions and whether
agency acted fraudulently or in bad faith.
Twentyfirst Century Technological Innovations Research and
Development Enterprising protests the National Aeronautics and Space
Administration's (NASA) failure to award it Phase I research funds for a
project the firm proposed in response to Subtopic 10.03, "Dynamic Space
Power Conversion Systems," of NASA solicitation No. SBIR 86-1.
Twentyfirst contends that NASA failed to evaluate its proposal properly
and argues that a proper evaluation would have resulted in the funding
of Twentyfirst's project.
We deny the protest.
The solicitation was issued under the Small Business Innovation
Research Program. This program was established under the Small Business
Innovation Development Act (Innovation Act), 15 U.S.C. Sec. 638 (1982
and Supp. III 1985), which requires federal agenci to reserve a portion
of their research and development efforts for awards to small businesses
under solicitations issued pursuant to the Innovation Act. The
solicitation provided for each Phase I proposal to be evaluated on a
competitive basis in accordance with expressly stated evaluation
criteria. These were the scientific/technical merit of the proposed
concept and the proposal's statement of objectives and approach; the
qualifications of the principal investigator, his staff and facilities;
anticipated benefits; and soundness and technical merit of proposed
work plan.
After evaluating Twentyfirst's proposal in accordance with the
criteria, the agency rejected that proposal because it offered no
potential for, or expectation of, any viable emerging technology or
project worthy of funding. The evaluators were not convinced that the
firm had the technical ability to conduct the proposed project because
the principal investigator's (the offeror's) experience and education
was not relevant to the proposed endeavor and because Twentyfirst
provided no information on the facilities to be used in completing the
project. The protester states, in essence, that it strongly objects to
the agency's technical conclusions and argues that a number of important
nations have shown great interest in Twentyfirst's technology.
The selection of research proposals solicited pursuant to the
Innovation Act is a competitive procedure. 10 U.S.C. Sec. 2302(2) (E)
(Supp. III 1985); Anthra Pharmaceuticals, Inc., B-220523, Jan. 8, 1986,
86-1 CPD P 17. However, the law does not require award under this
program to be made to any particular proposer, and a Small Business
Administration Policy Directive specifically provides that the "agency
is under no obligation to fund any proposal or . . . specific number of
proposals . . . and may elect to fund several or none of the proposed
approaches . . . . " Since the agency, therefore, has significant
discretion to determine what proposals, if any, it will accept, our
review in cases such as this is Limited to determining whether the
agency violated any applicable regulations and solicitation provisions
and whether the agency acted fraudulently or in bad faith. Twentyfirst
Century Technology Innovations Research and Development Enterprising,
B-225179, Mar. 17, 1987, 87-1 CPD P .
Here, the agency, in the exercise of its technical judgment,
concluded that the protester's project offered no potential for, or
expectation of, any viable emerging technology or project worthy of
finding. While it is clear that the protester disagrees with the
agency's view, it has not demonstrated that the agency's conclusion
regarding this highly technical project is the result of possible fraud
or bad faith or that there has been a violation of any regulation or
solicitation provision.
We deny the protest.
Harry R. Van Cleve
General Counsel
Matter of: Twentyfirst Century Technology Innovations Research and
Development Enterprising
File: B-225179
Date: March 17, 1987
In light of agency discretion under the Small Business Innovation
Research Program to fund or reject any particular proposal, General
Accounting Office review of agency's rejection of a proposal submitted
under that program is limited to determining whether agency complied
with any applicable regulations and solicitation provisions and whether
agency acted fraudulently or in bad faith.
Twentyfirst Century Technology Innovations Research and Development
Enterprising protests the Strategic Defense Initiative Organization's
(SDIO) failure to award it Phase I research funds for a project the firm
proposed in response to Topic 86-5, "Nonnuclear Space Power and Power
Conditioning," of SDIO solicitation No. 86.1. Twentyfirst contends that
SDIO failed to properly evaluate its proposal and argues that a proper
evaluation would have resulted in the funding of Twentyfirst's project.
We deny the protest.
The solicitation was issued under the Small Business Innovation
Research Program. This program was established under the Small Business
Innovation Development Act (Innovation Act), 15 U.S.C. Sec. 638 (1982),
which requires federal agencies to reserve a portion of their research
and development efforts for awards to small businesses under
solicitations issued pursuant to the Innovation Act. The solicitation
provided for each Phase I proposal to be evaluated on a competitive
basis in accordance with five evaluation criteria. These were the
scientific/technical quality of the proposal; the qualifications of the
principal investigator (the offeror) and his key staff and consultants
and the adequacy of the available facilities; the anticipated benefits
to the total Department of Defense research and development effort; the
adequacy of the proposed effort to show progress toward demonstrating
the feasibility of the concept; and the cost to the government. Each
criterion was weighted equally, except that the first criterion was
given twice the weight of any of the others. The final decision as to
funding was to be based upon this evaluation and other factors,
including possible duplication of other work and program balance.
The agency rejected the protester's proposal because it concluded
that Twentyfirst could not develop a solar device of interest to it. In
this regard, the agency says that Twentyfirst's proposal did not
identify the proposed benefits to SDIO and failed to convince the
evaluators by credible calculations that the project could lead to an
advancement in the state-of-the-art. Further, the evaluators were not
convinced that the firm had the technical ability to conduct the
proposed project because there was no evidence of prior research
experience. In essence, the protester states that it strongly objects
to the agency's technical conclusions and argues that both the President
and the U.S.S.R. are interested in its project.
The selection of research proposals solicited pursuant to the
Innovation Act is a competitive procedure. 10 U.S.C. Sec. 2302(2)(E)
(Supp. III 1985); Anthra Pharmaceuticals, Inc., B-220523, Jan. 8,
1986, 86-1 CPD P 17. However, as the agency points out, the law does
not require award under this program to be made to any particular
proposer, and a Small Business Administration Policy Directive
specifically provides that the "agency is under no obligation to find
any proposal or... specific number of proposals . . . and may elect
to fund several or none of the proposed approaches...." Since the agency
therefore has significant discretion to determine what proposals, if
any, it will accept, our review in cases such as this is limited to
determining whether the agency violated any applicable regulations and
solicitation provisions and whether the agency acted fraudulently or in
bad faith.
In this case the agency, in the exercise of its technical judgment,
concluded that the protester's project was not scientifically feasible.
While it is clear that the protester disagrees with the agency's view,
it has not demonstrated that the agency's conclusion regarding this
highly technical project is the result of fraud or bad faith, or that
there has been a violation of any regulation or solicitation provision.
We deny the protest.
Harry R. Van Cleve
General Counsel
Matter of: Rix Industries, Inc.; Ingersoll-Rand Co.
File: B-225176.3; B-225176.4
Date: March 30, 1987
1. Claims for bid preparation costs and costs of filing and pursuing
protests are denied where protests are dismissed because they have been
rendered academic by changed agency requirements and the withdrawal of
funding for the procurement.
2. Principle enunciated by the court in Keco Industries, Inc. v.
United States, 428 F.2d 1233 (Ct. Cl. 1970), that the government has an
implied-in-fact contract to fairly and honestly consider bids, provides
no basis for recovery of the costs of filing and pursuing a protest.
Keco stands only for the proposition that a claimant is entitled to
recovery of its bid preparation costs if its bid is not fairly and
honestly considered.
3. Where a solicitation has been canceled and the funding for the
requirement withdrawn, the mere fact that the agency may at some point
in the future find it necessary to acquire the items covered by the
canceled solicitation, provides no basis to conclude that the protested
solicitation has not been canceled unequivocally or that the agency has
a current requirement for the equipment covered by the canceled
solicitation.
Rix Industries, Inc. and Ingersoll-Rand Co. claim recovery of their
bid preparation costs under invitation for bids (IFB) No.
N00024-86-B-4053 issued by the Department of the Navy for oil-free high
pressure air compressors (HPACs). IngersollRand also seeks recovery of
the costs of filing and pursuing its protest (B-225176.1) against the
proposed award of the HPAC contract to Rix. In addition, both parties
request reimbursement for the costs of filing and pursuing their
protests against the Navy's subsequent cancellation of the
HPAC solicitation. We deny the claims as the underlying protests are
now academic and will not be decided on the merits.
The Navy issued IFB No. N00024-86-B-4053 on January 17, 1986, seeking
bids for 16 HPACs for base year 1986 with options to purchase 20-28 more
HPACs in 1987, 28-36 more in 1988, and 6-14 more in 1989. The IFB
provided that the options would be evaluated for award purposes.
Bid opening took place on May 28, 1986. Four bids were received, and
Rix was determined to be the low bidder. Ingersoll-Rand, the second low
bidder, filed a protest with the agency against the proposed award to
Rix. Ingersoll-Rand primarily asserted that the IFB contained design
specifications that required the HPACs to be of a "crankshaft" design.
Ingersoll-Rand argued that Rix's bid was nonresponsive because it
offered HPACs that were of a "swash plate" design. The agency denied
Ingersoll-Rand's protest and found that Rix's bid was responsive because
the IFB specifications were performance, not design, specifications.
Ingersoll-Rand subsequently filed a protest against the proposed
award to Rix with our Office. The protest raised the same allegations
as those asserted in Ingersoll-Rand's agency-level protest. In the
course of preparing its report to our Office on this protest, the Navy
determined that the IFB specifications were ambiguous and inadequate.
The agency concluded that the solicitation should be canceled and the
requirement resolicited under revised specifications which clearly would
allow a variety of HPAC designs, including both crankshaft and swash
plate designs.
The Navy's determination to cancel and resolicit was based in part on
a conclusion that the IFB contained both performance and design
specifications and, therefore, was open to conflicting interpretations.
In addition, the Navy found that the spare parts list attached to the
IFB might not be adequate to require delivery of the necessary spare
parts if the agency accepted Rix's swash plate design. The Navy also
concluded that both actual and potential bidders were prejudiced by the
defects in the solicitation as they were not given an equal opportunity
to compete for the Navy's true requirements. The solicitation was
canceled on January 8, 1987.
Both Rix and Ingersoll-Rand protested the agency's cancellation of
the IFB to our Office. Each protester contended that the IFB was not
ambiguous, although each interpreted the IFB differently. Rix also
filed suit in the United States District Court for the Northern District
of California (Civ. No. C-86-7283-DLJ) requesting declaratory and
injunctive relief, and the court requested and advisory opinion from
this Office. 1/ At the request of the parties, we scheduled a conference
at our Office on the merits of the protest. See GAO Bid Protest
Regulations, 4 C.F.R. Sec. 21.5 (1986). At the conference, the attorney
representing the Navy advised the parties and our Office that they had
just learned that the Navy no longer had a requirement for the 94 HPACs
covered by the protested IFB, and that at most, any resolicitation would
be for a quantity of ten. Further, the Navy advised that the funding
for the requirement was no longer programmed. It is this revelation
that gives rise to the parties' request that they be reimbursed for the
costs of filing and pursuing their protest against the cancellation of
the IFB.
The Navy states that of the 94 oil-free HPACs covered by the IFB, 84
were for installation on its FF1052 class ships as replacements for the
oil-lubricated HPACs currently on those ships. This requirement was
reevaluated and found to be inadvisable from a cost and technical
standpoint, and the funding for the requirement therefore was withdrawn.
Specifically, between January and May 1986, concerns arose over the
high cost of replacing the existing oil-lubricated HPACs, particularly
because there were no known functional problems with them. However,
because of safety concerns (chance of fire or explosion with
oil-lubricated HPACs), and the possibility that the service life of the
FF1052s might be extended from 30 to 40 years (which would necessitate
replacing or upgrading the existing HPACs), the requirement was not
changed. Subsequently, a Navy technical personnel learned that the
fleet was experiencing problems with oil-free HPACs installed on other
ships. This information, coupled with the original concern over the
cost of replacing HPACs with no known problems, prompted the decision to
withdraw the funding for the 84 oil-free HPACs for the FF1052 class.
This occurred in October of 1986, and was accomplished by deleting this
requirement from the Chief of Naval Operations (CNO) budget worksheet.
The Navy states that data from the CNO budget worksheet is fed at
least three times a year into a computer data system, and this data is
reviewed by Navy inventory managers at monthly intervals, or on request.
The inventory managers then forward any information concerning changed
requirements to the contracting officer. In this case, the oil-free
HPAC requirement was deleted from the data base on January 21, 1987.
Although the Navy inventory managers learned on February 3, 1987, that
this had happened, they did not advise the contracting officer because
the solicitation for the oil-free HPACs had already been canceled due to
the determination that the specifications were defective.
The Navy states that the contracting officer, as well as the Office
of the General Counsel, actually became aware of the change in
requirements on February 10, 1987, 1 day before the protest conference
at our Office. On that date, Rix's attorney called the Navy Office of
Counsel to inquire about a statement in the Navy's report to our Office
on the Rix and Ingersoll-Rand protests. The statement in question was
that the impact of the disclosure of the bid prices, as a result of the
solicitation's cancellation, would be mitigated by the fact that the new
solicitation would be for a different quantity of HPACs, due to revised
fiscal year requirements. The Navy states that at the time it prepared
the protest report, the contracting officer believed the resolicited
requirement would be for 70-94 units. Due to the call from Rix's
attorney, however, Navy counsel decided to verify the exact status of
the requirement, and learned for the first time that funding for 84 of
the HPACs originally solicited had been withdrawn.
Both Rix and Ingersoll-Rand contend that the agency's delay in
advising the protesters of the change in requirement was inexcusable and
caused them unnecessarily to incur substantial costs pursuing their
protests of the solicitation cancellation. Accordingly, both protesters
seek recovery of those costs, as well as the costs of preparing their
bids. In addition, Ingersoll-Rand asserts that it is entitled to
recover the costs of pursuing its earlier protest against the proposed
award to Rix. In this connection, Ingersoll-Rand asserts that the
Navy's cancellation of the solicitation constitutes an acknowledgment
that Ingersoll-Rand was correct in its contention that Rix's bid was
nonresponsive.
Our authority to allow the recovery of bid preparation costs and the
costs of filing and pursuing a protest is predicated on a determination
by our Office that a solicitation, proposed award, or award of a
contract does not comply with a statute or regulation. 31 U.S.C. Sec.
3554(c)(1) (Supp. III 1985). Where a protest becomes academic and we do
not issue a decision on the merits, there is no basis for the award of
costs. Systems Management American Corp., B-224229, Nov. 10, 1986, 86-2
CPD P 546. In this case, Rix and Ingersoll-Rand's protests against the
cancellation of the solicitation have been rendered academic by the
change in the agency's requirements and the withdrawal of the funding
for the procurement. See Associates for Research and Training, Inc.,
B-220378, Jan. 17, 1986, 86-1 CPD P 59.
The protesters contend, however, that they are entitled to recover
their protest costs because the Navy negligently and unreasonably failed
to notify them promptly that the requirement had changed and the funding
had been withdrawn. In this connection, Rix asserts that an
implied-in-fact contract to treat all bidders fairly and honestly arises
under the procurement process, and argues that the Navy breached that
contract here by failing to monitor the availability of funds and the
status of the requirement. Rix asserts that it was improperly induced
to incur the expense of filing and pursuing its protest against the
solicitation cancellation because of the agency's failure to make an
honest inquiry into its needs before canceling the IFB for other reasons
and before responding to Rix's lawsuit and its protest to our Office.
Rix notes that the agency continually represented that it intended to
resolicit the requirement under revised specifications.
In support of its theory that the Navy violated its impliedin-fact
contract to treat all bidders fairly and honestly, Rix cites Keco
Industries, Inc. v. United States, 428 F.2d 1233 (Ct. Cl. 1970). Keco
stands for the principle, established by the Court of Claims, that if a
claimant's bid is not fairly and honestly considered, the claimant
should be allowed to recover the costs of preparing its bid. See Bell &
Howell Co., 54 Comp. Gen. 937 (1975), 75-1 CPD P 273. Keco does not,
however, provide any support for the proposition that a claimant may
recover the costs of pursuing a protest. Id.; see T & H Co., 54 Comp.
Gen. 1021 (1975), 75-1 CPD P 345.
Further, as previously stated, our authority to award such costs is
predicated on a determination that a solicitation, proposed award or
award of a contract does not comply with a statute or regulation.
Where, as here, a protest is against the cancellation of a solicitation,
the relevant issue is the propriety of the reason for the cancellation.
That issue is academic in this case because the solicitation could not
be reinstated even if we sustained the protest since the requirement has
changed and the funds have been withdrawn.
See Associates for Research and Training, Inc., B-220378, supra, 86-1
CPD P 59. Accordingly, there is no legal basis for the recovery of the
protesters' costs of filing and pursuing their protests. See Bru
Construction Co. B-221383.2, May 27, 1986, 86-1 CPD P 487.
Similarly, we also deny Rix's request for recovery of its bid
preparation costs since there is no legal basis for the recovery of such
costs where the underlying protest is academic. See Systems Management
American Corp., B-224229, supra, 86-2 CPD P 546. To the extent that Rix
is arguing that it is entitled to recover its bid preparation costs
under the Keco standard because the Navy violated its implied-in-fact
contract to deal with Rix fairly and honestly, we find the argument
unpersuasive. The agency actions of which Rix now complains, that is,
its failure to monitor the status of the requirement and the
availability of funds, may have caused Rix to incur the expenses of
filing and pursuing a protest unnecessarily. They did not however,
deprive Rix of a fair and honest consideration of its bid, or of a fair
opportunity for award. Accordingly, they do not give rise to a
successful claim for bid preparation expenses under Keco. See A.R.F.
Products, Inc., 56 Comp. Gen. 201 (1976), 76-2 CPD P 541.
We turn then to Ingersoll-Rand's contention that it is entitled to
recover the costs of pursuing its earlier protest to our Office against
the agency's proposed award to Rix, as well as its bid preparation
expenses. Ingersoll-Rand asserts that the Navy's cancellation of the
solicitation is an acknowledgment that Rix's bid was nonresponsive and
that accepting the bid would have been contrary to statute or
regulation. The protester also argues that had it not been for the
Navy's action in treating Rix's nonresponsive bid as responsive, none of
the expenses incurred in pursuing the protest would have been necessary.
At the outset, we note that the Navy in fact has not acknowledged
that Rix's bid was nonresponsive. The Navy's asserted reason for
canceling the solicitation was not that Ingersoll-Rand's protest had
merit, but, primarily, that the specifications were ambiguous and did
not provide an opportunity for equal competition. Under these
circumstances, we do not consider the mere fact that the agency canceled
the solicitation, after Ingersoll-Rand protested the award to Rix,
adequate to demonstrate that the agency found the protest meritorious.
Moreover, we have denied the recovery of bid protest and preparation
costs even where the agency admits that the protest has merit and takes
corrective action, such as canceling the solicitation, which the
protester does not challenge. See Care Hospital Supply, Inc., B-226002,
Mar. 2, 1987, 87-1 CPD P . The basis for denying recovery under those
circumstances is that the agency's corrective action renders the protest
academic. Id. In this case, IngersollRand did challenge the agency's
cancellation of the solicitation; however, that protest has now become
academic due to the agency's changed reguirements and the withdrawal of
the funding for the procurement. Accordingly, in the absence of any
decision on the merits of either protest, there is no basis for award of
costs. See Systems Management American Corp., B-224229, supra, 86-2 CPD
P 546.
We therefore deny Ingersoll-Rand's request for recovery of its bid
preparation costs and the costs of pursuing its protest against the
proposed award to Rix.
Rix also asserts that the status of the original procurement remains
unclear and that the Navy's equivocation in this regard reflects its
failure to conduct this procurement honestly and fairly. In this
connection, Rix asserts that the Navy has not "unequivocally" canceled
the solicitation since it has stated that replacement of the HPACs for
the FF1052 class ships may become necessary in the future if the service
life of the ships is extended. Rix argues that it would be extremely
unfair if the Navy were to decide later that it will purchase the HPACs.
We find Rix's characterization of the status of the procurement to be
inaccurate. The record shows that the solicitation for the HPACs which
Rix competed under has in fact been canceled. Further, the record shows
that the funds for the HPACs that were to be installed in the FF1052
class ships are no longer programmed. Although the Navy does state that
the SHIPALT for the HPACs has not been canceled, the Navy also states
that the SHIPALT is simply a document that discusses an improvement that
is proposed for a ship or class of ships. The SHIPALT cannot be carried
out, however, if, as in this case, there are no funds programmed for its
accomplishment. In fact, the Navy itself states that if at some time in
the future the service life of the FF1052 class is extended the SHIPALT
can be reprogrammed, or funded, at that time.
Accordingly, the mere fact that the SHIPALT has not been canceled
does not indicate that the agency still has a current requirement for
the HPACs, or that the agency has not unequivocally canceled the
protested solicitation.
We dismiss the protests because they have been rendered academic by
the change in the agency's requirements for the solicited equipment and
the withdrawal of the funds for the procurement. In addition, we deny
the protesters' requests for payment of protest costs and bid
preparation costs.
Harry R. Van Cleve
General Counsel
1/ This lawsuit subsequently was dismissed pursuant to a stipulation
of dismissal without prejudice, entered into by the parties to the suit
on March 10, 1987.
Matter of: Defense Logistics Agency and Small Business
Administration Contract No. DLA100-78-C-5201
File: B-225175
Date: February 4, 1987
There is no basis to find the Small Business Administration (SBA)
liable to a procuring agency for reprocurement costs for defective goods
delivered by a defaulted small business subcontractor under a contract
awarded to SBA pursuant to section 8(a) of the Small Business Act.
SBA's responsibility as a "prime contractor" under the 8(a) program is
only as a conduit in the award process between the procuring agency
whose needs are in issue and the small business subcontractor that will
meet those needs; SBA does not guarantee satisfactory performance by
the subcontractor.
This decision concerns a claim by the Defense Logistics Agency (DLA)
against the Small Business Administration (SBA) for reprocurement costs
for defective goods delivered to DLA by a small business subcontractor
under contract No. DLA10078-C-5201.
DLA asserts that SBA is liable for these costs because SBA
specifically agreed to a Warranty Clause (L67) in its contract with DLA,
and this clause, which is a special clause, and not a general provision
of the contract, provides rights which are "in addition to... any rights
afforded to the government by any other clause in the contract."
Therefore, while the contract provides that the general provisions of
the contract are not operative between SBA and DLA, but are applicable
to SBA's subcontractor, DLA contends that the warranty clause, a special
provision, is not superseded by this language.
SBA contends that the warranty clause is a general provision which is
applicable only to the subcontractor and not to SBA. We agree with SBA.
The contract in question was awarded to SBA by DLA pursuant to
section 8(a) of the Small Business Act, 15 U.S.C. Sec. 637(a) (1982),
which authorizes SBA to enter into contracts with government agencies
for the purpose of arranging for performance of the contracts by
socially and economically disadvantaged small business concerns. Here,
SBA subcontracted with P.F. Industries (PFI) to perform the contract.
PFI delivered certain defective merchandise to DLA under the contract
and subsequently declared bankruptcy, with the result that PFI's
contract was terminated for default. DLA asserts that SBA is obligated
to reimburse DLA for reprocurement costs for the defective merchandise
as a result of a warranty clause, L67, contained in the contract between
DLA and SBA.
The contract between DLA and SBA is a standard form 26 prefaced by a
number of clauses entitled "Special Clauses for 8(a) Contracts." These
clauses provide, in relevant part, that SBA shall perform the
requirements of the prime contract by subcontracting pursuant to section
8(a); that PFI is named as the subcontractor; that PFI is designated
as "contractor" with respect to the remainder of the contract clauses;
and that PFI is required "for and in the stead of the SBA to fulfill
and perform all of the requirements of this prime contract. " In
addition, there is a proviso that: "The general provisions of this
contract are not operative between SBA and DLA but they are applicable
to SBA's subcontractor." In light of this language, the responsibilities
of the "contractor" contained in the subsequent warranty clause, L67, on
which DLA bases its claim of liability on the SBA, refer only to
PFI--designated as "contractor."
In any event, in view of the purposes of the 8(a) program, we have
held that:
"SBA's role in the section 8(a) program, however, while
nominally that of a "prime contractor," actually is that of a
conduit between the contracting agency that has a requirement that
can be met by a small disadvantaged business, and that business;
the only sense in which SBA is expected to "perform" the contract
is by subcontracting the work to an eligible small business firm."
Association of Village Council Presidents, B-208712, July 26,
1983, 83-2 C.P.D. P 126.
Accordingly, there is no legal basis to hold SBA liable to DLA, the
procuring activity, for reprocurement costs arising from a warranty
claim which is properly assessable to the defaulted small business
subcontractor under an 8(a) award. Soil Conservation Service and Small
Business Administration Contract No. AG18scs-00100, B-185427, Sept. 21,
1977, 77-2 C.P.D. P 208.
Harry R. Van Cleve
General Counsel
B-225171
February 10, 1987
General Accounting Office has no comments on Federal Acquisition
Regulation (FAR) case No. 83-7, a proposal to revise FAR Subparts
section 1.105, Subparts 22.3 and 22.4 concerning labor standards and to
add 12 labor standards clauses at FAR sections 52.222-6 through
52.222-17.
Ms. Margaret A. Willis
FAR Secretariat
General Services Administration
Dear Ms. Willis:
This responds to your letter of November 5, 1986, requesting our
comments on Federal Acquisition Regulation (FAR) case No. 83-7, a
proposal to revise FAR section 1.105, Subparts 22.3 and 22.4 concerning
labor standards and to add 12 labor standards clauses at FAR sections
52.222-6 through 52.222-17. These changes are intended to implement
regulations issued by the Department of Labor.
We have no comments on FAR case 83-7.
Sincerely yours,
Harry R. Van Cleve
General Counsel
B-225165; B-225166
January 16, 1987
In response to request for comments on Federal Acquisition Regulation
(FAR) case No. 86-52, a proposal to amend sections of FAR subpart 17.2
and FAR Sec. 52.217-5 concerning contract options, the General
Accounting Office offers suggestions with respect to (1) the
applicability of the revised sections to service contracts, (2) the need
to price all contract options at the time of the initial contract award,
and (3) the need for corresponding changes to Federal Procurement Data
System reporting requirements.
General Accounting Office has no comments on Federal Acquisiton
Regulation (FAR) case No. 86-57, a proposal to add paragraph (b) (2)
(iv) to FAR Sec. 7.105 to require a contracting officer's written
acquisition plan to address competition at the subcontract level, when
such competition is both feasible and desirable.
Ms. Margaret A. Willis
FAR Secretariat
General Services Administration
Dear Ms. Willis:
This responds to your letter of November 4, 1986, requesting our
comments on Federal Acquisition Regulation (FAR) case Nos. 86-52 and
86-57.
FAR case No. 86-52 is a proposal to amend sections of FAR Subpart
17.2, entitled "Options," and FAR Sec. 52.217-5 in response to
recommendations contained in our report, Procurement: The Use of
Unpriced Options and Other Practices Needs Revision, GAO/NSIAD-86-59,
April 1986 (copy enclosed). We recommended on page 21 of that report
that the Secretary of Defense take action to have the FAR amended to
require that all contract options be priced at the time of award of the
initial contract. With regard to existing contracts containing unpriced
options, we recommended that the Secretary ensure that the exercise of
such options be justified and approved as procurements using other than
competitive procedures. We recommended further on page 40 that the FAR
be amended to require that all contract options to extend service
contracts that are likely to be exercised be evaluated in connection
with the award of the initial contract, unless it is determined that not
doing so would be more advantageous to the government. Except for the
comments below, we have no objection to the changes proposed in FAR case
No. 86-52.
Proposed FAR Sec. 17.206 (a) would state that contracting officers
normally should evaluate offers for option quantities when it is likely
that the government will exercise such options. Proposed FAR Sec.
17.206 (b) would provide examples of the conditions under which offers
for option quantities need not be evaluated. Since these proposed
provisons refer to option "quantities," however, it is unclear whether
they would apply only to supply contracts or would apply also to service
contracts, as we recommended in our report. We suggest therefore that
the words "or periods" be inserted after the phrase "option quantities"
wherever it appears in proposed FAR Sec. 17.206.
The proposed amendment of FAR Sec. 17.207 (f) would state that the
exercise of an option must be in accordance with, among other things,
the requirements of FAR Part 6 regarding full and open competition, and
that these requirements can be satisfied only if the option is priced at
an amount specified in, or reasonably determinable from, the terms of
the basic contract. This provision is consistent with the position
expressed in our report that the exercise of an unpriced option should
be considered an acquisition through the use of other than competitive
procedures. The proposed amendment falls short, however, of
establishing a general requirement that contract options be priced at
the time of the initial contract award. We suggest that FAR Subpart
17.2 include a statement that, as a general rule, all options should be
priced at the time of the initial contract award.
Finally, since the exercise of an unpriced option would be considered
the use of other than competitive procedures under proposed FAR Sec.
17.207 (f), it should be reported as such to the Federal Procurement
Data System (FPDS). However, neither the FPDS Reporting Manual,
referred to in FAR Sec. 4.602(b), nor the Department of Defense FAR
Supplement's instructions for reporting to the FPDS, 48 C.F.R. Sec.
204.671-5 (1985), provide for reporting the exercise of an unpriced
option as the use of other than competitive procedures. Therefore, if
the proposed change to FAR Sec. 17.207 (f) is adopted, the Administrator
for Federal Procurement Policy and the Director of the Defense
Acquisition Regulatory Council should be advised to make the appropriate
changes to these requirements.
FAR case No. 86-57 is a proposal to add paragraph (b) (2) ( iv) to
FAR Sec. 7.105 to require a contracting officer's written acquisition
plan to address competition at the subcontract level, when such
competition is both feasible and desirable. We have no comments on this
proposed change.
Sincerely yours,
Harry R. Van Cleve
General Counsel
Enclosure
Item Estimate Unit Extended Corrected
LDA, Inc. $1,426,093.00
31 a. Aggregate Base
Percent of
"0002 Major Repairs as NOT TO EXCEED
Total Price Lump Sum Lump Sum
Performance Periods
Tech. Mgt. Price Total
RANGE ALLOWABLE
"0001 Battery, 24 V, 40 AH, Nickel Cadmium 330 EA
0002 Battery, 12 V, 40 AH, Nickel Cadmium 260 EA
"a. Site Design 30%
Maximum
Technical 61.70 54.30 56.64
Offeror Best and Final Offer (including options)
Initial Final
Total per diem: $ 125.00 23 July Depart
Total per diem $ 5.75