Matter of: Gemma Corporation
File: B-222548.3
Date: February 17, 1987
DIGEST
Protest against award to higher priced offeror whose technical
proposal was deemed "far superior" in technical merit when compared with
protester's proposal, is denied where proposal evaluation standards gave
greater weight to technical merit and lesser weight to cost and where
protester has not shown that the contracting agency's evaluation of the
submitted proposals or the award was unreasonable.
DECISION
Gemma Corporation has protested the award of a contract to Science,
Engineering & Analysis, Inc. (SEA), by the Department of the Navy under
request for proposals (RFP) No. N00123-85-R-0789, issued by the Naval
Regional Contracting Center, Long Beach, California. The
cost-plus-fixed-fee contract is for technical services for the test and
evaluation of training range programs referred to as the Mobile Sea
Range (MSR) system for battle group exercises in an "openocean"
electronic warfare environment. The contractor is to furnish the
required services, materials, facilities, and equipment to prepare
program technical data software and analysis, revise program documents,
develop management information systems and reports, and provide
technical management for these exercises.
Gemma alleges that the Navy's selection of SEA was unreasonable. We
deny the protest.
BACKGROUND
The RFP listed technical, cost, and management evaluation standards
in descending order of importance. Technical considerations were stated
to be more important than either cost or management; however, cost was
stated to be worth more than management considerations. Under the
technical standards, offerors were asked, for example, to demonstrate
understanding of the major contract work areas and to provide a definite
technical approach for sample delivery orders. Under technical
approach, offerors were also asked to provide resumes of key personnel
as well as evidence of a firm commitment of the key employees to the
contract. Under management, proposals were to be evaluated with
"particular value" given to engineering and project management
experience. Under cost, offerors were advised that the importance of
cost in the selection process would depend upon the "equality of the
other factors among the proposals being evaluated"--that is, "all other
things being equal, cost can be the determining factor." Offerors were
further informed that cost would also be evaluated on the basis of cost
realism.
The Navy states that timely offers were received on August 14, 1985,
from four offerors, including Gemma and Systems Engineering Technology
Associates Corporation (SETAC). The technical portions of the proposals
were scored in August 1985 and further evaluated in October 1985.
As a result of the technical evaluation of the proposals, the Navy
determined that one offeror, SCCI, was technically unacceptable, and
that while Gemma was considered marginally acceptable, Gemma did not
appear to have a realistic chance of obtaining award of the contract
without major changes in its technical proposal and significant
additional cost data submittals. SEA was found to have submitted the
superior technical proposal in all areas evaluated. The only comparable
offer was SETAC's, a contractor that was suspended at the time it
submitted its proposal and who later sold its interest to SRS
Technologies (SRS), resulting in the exclusion of SETAC's offer. We
upheld the exclusion of that proposal in SRS Technologies, B-222548.2,
Aug. 21, 1986, 86-2 C.P.D. P 208.
Because SEA had the highest ranked offer (cost, technical and
management factors considered), the contracting officer determined that
SEA was the only competitive offeror. Accordingly, a competitive range
of one, composed of SEA was established. Nevertheless, the Navy says
that it subsequently included Gemma in the competitive range in an
"attempt to foster competition."
The Navy then conducted oral discussions with Gemma and SEA capped
with a letter request for best and final offers in May 1986. The Navy's
letter to Gemma stated that the Navy had identified major deficiencies
in Gemma's cost and technical proposal, and Gemma's proposal was
considered to bemarginally acceptable. Further, in its letters to Gemma
and
SEA, the Navy clarified the RFP's evaluation criteria, stating that
their rank, in descending order of importance, was technical, cost, and
management approach; that under technical, "Understanding," "Personnel
Qualifications," and "Corporate Experience" were to be evaluated; and
that under "Cost," "estimated total cost to the Government" and "cost
realism" were to be evaluated.
Best and final offers were received on June 6, 1986. Gemma's best
and final cost proposal was $2,295,957; SEA's was $2,709,148. Although
SEA revised certain areas of its proposal, no changes were made in the
key personnel that it had originally proposed. Evaluation of the
technical proposals resulted in the following scores:
Gemma SEA, Inc.
Corporate Experience 23.9 35.5
Personnel Qualifications 24.5 34
Technical Understanding 23 35.5
Management Approach 22.5 36
The Navy's review of Gemma's low costs showed that not all elements
proposed were considered to be realistic. Nevertheless, Gemma's
proposal was given the maximum score for cost for the purpose of
mathematical comparison. However, this concession to Gemma did not
affect the proposed selection of SEA's proposal as the one having the
greatest overall merit, including cost considerations, especially since
the Navy considered SEA's technical proposal, as evidenced by the ahove
scores, to be "far superior" to Gemma's technical proposal.
Concerning the Navy's use of technical and cost factors, contract
selection officials have broad discretion in determining the manner and
extent to which they will make use of the technical and cost evaluation
results. Lockheed Corp., B-199741.2, July 31, 1981, 81-2 C.P.D. P 71.
Where the contracting agency's selection official has made a cost/
technical tradeoff, the question is whether the tradeoff was reasonable
in light of the solicitation's evaluation scheme. Petro-Engineering,
Inc., B-218255.2, June 12, 1985, 85-1 C.P.D. P 67. Further, it is
well-established that the evaluation of proposals is a matter within the
discretion of the contracting agency subject only to a test of
reasonableness. Harbert International, Inc., B-222472, July 15, 1986,
86-2 C.P.D. P 67. Based on our review of the record, as discussed
below, we cannot question the Navy's evaluation of proposals or the
award to SEA.
SOURCE SELECTION
In its initial protest, Gemma argued in rather general terms that the
Navy had not justified the award to SEA at a 16 percent higher proposed
cost given Gemma's position that there was not a "sufficient technical
differential" between the proposals of the two offerors.
In reply, the Navy argued in detail that SEA's proposal was worth the
cost premium involved. Specifically, the Navy argued that SEA had a
firm understanding of the program requirements, competent personnel with
relevant experience, excellent management/corporate experience and that
SEA's proposal contained "no deficient risk assessment or deficiencies."
By contrast, the Navy found Gemma's proposal to contain: (1) general
information which was also lacking in depth and technical knowledge
concerning the MSR system to the extent that the proposal was considered
deficient; (2) proposed personnel who, while having a high degree of
education, had little or no experience with the program or subsystem
support except for a few individuals whose experience was primarily in
the software area and who were, in any event, insufficient in proposed
numbers; (3) deficient corporate experience in that the proposed
contract work required experience in MSR programs and Gemma's major
experience appeared to be in other than range programs and more in
anti-submarine warfare; and (4) proposed subcontractors who had little
or no experience to provide support.
Additionally, the Navy found medium to substantial risks associated
with: (1) Gemma's ability to perform the requirement; (2) Gemma's
limited experience in pertinent areas; and (3) Gemma's capacity to
respond to short deadline requirements given its insufficient proposed
personnel.
After reviewing the Navy's report, Gemma has taken issue in several
respects with the Navy's rationale for awarding the contract to SEA.
First, Gemma argues that the Navy's criticism of its proposal for
lacking understanding of the MSR system gave improper weight to RFP task
J, MSR operational support, which was allegedly only 1 of 19 work tasks.
Contrary to Gemma's position that this deficiency related to only RFP
task J, which involved 5 percent of the contract tasks, the deficiency
also relates to tasks K, O, P, K, O, R, and S, which also expressly cite
MSR requirements and involve 60 percent of the work requirements.
In any event, the Navy is of the view that even if Gemma had received
full credit on technical understanding, this fact would not have
affected the award selection especially given the perceived superior
merit of SEA's proposal and since there were two other technical
evaluation standards (Personnel Qualifications and Corporate
Experience), the scoring of which would have diluted any increased
technical understanding score of Gemma's. Consequently, and based on
our review of the record, we cannot agree that the Navy's evaluation of
the technical understanding evaluation standard was unreasonable as
concerns the two proposals.
Next, Gemma argues that the Navy improperly evaluated Gemma's
corporate and personnel experience and, in any event, allegedly failed
to give adequate notice of this deficiency during discussions. Further,
Gemma insist that the information which it provided to the Navy clearly
shows that its proposed personnel have experience in all required areas
and, moreover, are more than adequate in number to meet the contract's
requirements. Finally, Gemma insists that its prior corporate
experience shows considerable MSR experience.
As to Gemma's concern about the adequacy of the Navy's discussion of
this perceived weakness in personnel, we cannot question the Navy's
position that its discussions with Gemma were sufficient on this point
to raise a broad range of concerns about Gemma's personnel.
Specifically, the Navy informed Gemma in detail of its perceived
weakness, discussed above, in this area by informing Gemma that it had a
limited number of proposed engineers with knowledge/experience in range
systems and range instrumentation.
As to the Navy's actual evaluation of Gemma's proposed personnel, we
view Gemma's criticisms as evidencing a mere disagreement with the
Navy's evaluation without a further showing of the unreasonableness of
that evaluation. It is well-established that the protester's mere
disagreement with the contracting agency's evaluation does not render
the evaluation unreasonable. See General Management Systems, Inc.,
B-214246, Sept. 25, 1984, 84-2 C.P.D. P 351. Related to this issue is
Gemma's allegation that the Navy improperly evaluated SEA's proposed
personnel who, the protester maintains, were not committed to the
contract by the RFP as required. Nevertheless, the Navy insists that
under the "Key Personnel" clause of the RFP (and the resulting SEA
contract) only the Navy may permit SEA to substitute key personnel who
are otherwise committed to the contract. We see no basis to question
the Navy's analysis.
Concerning corporate experience, although Gemma argues that it has
provided task work to the Navy on the MSR program, the Navy insists, as
noted above, that Gemma's major experience appeared to have been more in
anti-submarine warfare rather than in the MSR program. By contrast, the
evaluation shows that the Navy considered SEA to have showed a great
deal of demonstrated experience with MSR in contrast to Gemma's position
that SEA does not have this experience. Again, we view Gemma's
position--and its position that the Navy also improperly evaluated the
experience of Gemma's proposed subcontractors--as evidencing mere
disagreement with the Navy's evaluation but not evidence, in itself,
that the Navy's proposal evaluation was unreasonable.
OTHER ISSUES
Two other issues are raised by Gemma. First, Gemma complains that
the Navy improperly denied Gemma a 5-day preaward notice of the
impending small business set-aside award to SEA allegedly in an attempt
to deny Gemma the opportunity to submit a preaward protest. In reply,
the Navy insists that there was a genuine urgency to award the contract
in November 1986 given the expiration of the prior contract for similar
work. Although Gemma contests this urgency rationale, the alleged
improper failure to give the notice does not provide a basis to disturb
an otherwise valid award. See Columbia Research Corp., B-193154, May,
15, 1979, 79-1 C.P.D. P 353.
Second, Gemma argues that the Navy improperly changed the work
statement of the RFP before awarding the contract. The Navy, however,
insists that it has not changed the work statement, and we have no basis
to question the Navy's position.
We deny the protest.
Harry R. Van Cleve
General Counsel
FILE: B-222530.3 DATE: July 2, 1986
MATTER OF: Eaglevision Management Services, Inc.--
Request for Reconsideration
DIGEST:
1. Protesters must comply with requirement to furnish a copy of a
protest filed with the General Accounting Office (GAO) to the
contracting officer even where protester has previously advised
contracting officer of the problem and of its intent to pursue
"administrative hearings" since agency must be advised of what exactly
is being protested at GAO.
2. Oral notification of basis for protest is sufficient to start
10-day period for filing a protest running and the protester may not
delay filing a protest until the receipt of written justification of
protest basis.
Eaglevision Management Services, Inc. (EMS), requests reconsideration
of our dismissal of its protest against the rejection of its bid for
bond deficiencies under Eglin Air Force Base invitation for bids No.
F08651-86-B-0052. We dismissed the protest because EMS failed to
furnish--as required by our Bid Protest Regulations, 4 C.F.R. QQ 21.1(d)
(1986)--a copy of its protest to the contracting officer within 1
working day after the protest was filed with our Office.
We affirm the dismissal.
The EMS protest was filed with our Office on May 13, 1986. As of May
21, the date we dismissed the protest, the contracting officer had not
received a copy of the protest. EMS states that its April 30 letter to
the contracting officer set forth the facts which later served as the
basis for the protest submitted here and advised that EMS "will seek
administrative hearings to determine the validity of their EMS
bonding...." Accordingly, EMS contends that the contracting officer was
provided with notice of the protest basis and that EMS fully complied
with the requirement in 4 C.F.R. Sec. 21.2(d).
The Competition in Contracting Act of 1984, 31 U.S.C. Sec. 3554
(Supp. II 1984), and our implementing regulations impose a strict time
limit of 25 working days for an agency to file a written report with our
Office from the date of our telephonic notice of the protest. 4 C.F.R.
Sec. 21.3(c). Extensions are considered exceptional and are sparingly
granted. Further, we generally must issue a final decision within 90
working days after the protest is filed. Permitting delays in
furnishing copies of protests to the contracting agency would hamper
contracting agencies' abilities to comply with the statutorily imposed
time limitation for filing a report and could frustrate our efforts to
provide effective and timely consideration of all objections to
procurement actions. See Gilbert-Tucker Associates, Inc.--Request for
Reconsideration, B-220731.2, Nov. 12, 1985, 85-2 CPD P 541.
The EMS April 30 letter sent to the contracting officer did not
obviate the need for filing a copy of the protest with the contracting
officer. Even where a protester has had previous communications with
the contracting officer regarding disagreements on the manner in which a
procurement was conducted, the protester must still file a copy of the
protest filed here with the contracting officer so that the agency can
know exactly what is being protested to our Office. See Washington
State Commission for Vocational Education--Reconsideration, 64 Comp.
Gen. 682 (1985), 85-2 CPD P 59; Gilbert Tucker Associates,
Inc.--Request for Reconsideration, supra.
In any event, according to the contracting agency, telephone
conversations between the contracting officer and EMS occurred on April
18 and April 24. During the April 18 conversation, EMS was informed of
the reason its bid was being rejected. Therefore, EMS was informed of
the basis of protest on April 18. At no time during these two
conversations did EMS protest the bid rejection. Under 4 C.F.R. Sec.
21.2(a) (2), EMS had 10 working days after April 18, or until May 2, to
file a protest with our Office or the agency. Although EMS states that,
on April 30, it received written confirmation from the contracting
officer, the prior oral notification of the basis for protest is
sufficient to start the 10-day period for filing a protest running when
subsequent agency confirmation merely reiterates the basis of protest.
Auburn Timber, Inc.--Request for Reconsideration, B-221523.2, Feb. 20,
1986, 86-1 CPD P 182. Finally, even if the EMS April 30 letter to the
contracting officer is viewed as an agency protest, the letter was not
received by the contracting agency until May 8. Therefore, the protest
filed with our Office on May 13 was untimely.
Accordingly, the dismissal is affirmed.
Harry R. Van Cleve
General Counsel
Matter of: American Federal Contractor, Inc.
File: B-222526
Date: July 25, 1986
DIGEST
1. A surety must disclose all oustanding obligations,
regardless of the actual risk of liability on them. Moreover, for
payment and performance bonds, obligation does not end on contract
completion date, but continues until warranty period has expired.
2. Where a bidder's individual surety fails to disclose an
outstanding obligation, either pending completion of performance
on a contract or during a warranty period, the agency properly may
find the bidder to be nonresponsible, based on its surety's
nondisclosure.
3. A determination that a small business concern is
nonresponsible, based on the failure of its surety to disclose an
outstanding obligation, need not be referred to the Small Business
Administration for consideration under its Certiticate of
Competency procedures.
DECISION
American Federal Contractor, Inc. protests its rejection as
nonresponsible due to the failure of an individual surety to disclose
other obligations in connection with invitation for bids (IFB) No.
N62467-84-B-0930. The Department of the Navy issued the IFB as a small
business set-aside, seeking a Damage Control Trainer for the Armed
Forces Reserve Center, Oklahoma City, Oklahoma.
We deny the protest.
Bidders were required to submit bid bonds equal to 20 percent of
their bid prices. Because the protester was bonded by two individual
sureties, rather than a corporate surety, a completed Affidavit of
Individual Surety (Standard Form 28) for each was required. Item 10 of
the Affidavit required the individual sureties to disclose all other
bids on which they were obligated at the time they executed the bid bond
for American.
American submitted the apparent low bid at opening on March 4, 1986.
Both of the firm's individual sureties, in response to Item 10 of the
Affidavit, stated that they had no outstanding bond obligations.
However, the Navy, in its review of the sureties, discovered that one of
the individuals also appeared as surety on performance and payment bonds
for contract No. N62467-85-C-7756, covering repair of a basketball court
at the Naval Air Station in Kingsville, Texas. Accordingly, by letter
dated April 18, 1986, the Navy notified the protester that its bid had
been rejected in accord with the Federal Acquisition Regulation (FAR),
Sec. 14.404-2(i) (1984). The contracting officer stated that the
surety's failure to disclose this other obligation made it impossible to
determine its acceptability as an individual surety and rendered
American's bid inadequate.
The protester alleges that all work on the Kingsville contract had
been completed by September 21, 1985. The Navy disagrees, and has
submitted for the record documents showing that due to a dispute over
the painting of lines on the basketball court, which was not completed
until April 27, 1986, the government did not establish beneficial
occupancy until May 2, 1986. The Navy is assessing liquidated damages
in the amount of $2,680 because of American's failure to meet the
contract completion date.
American responds that the Navy acted in bad faith in its
administration of the Kingsville contract, and that by listing an
obligation on that contract, its surety "would have been condoning the
Navy's incompetent administration."
Notwithstanding the dispute, the contract on which the surety had
executed the payment and performance bonds was subject to a warranty
which extended for 1 year beyond the completion or acceptance of the
work. The obligation of the surety remained outstanding until the
expiration of the warranty. Sureties are specifically placed on notice
of this continuing obligation by the terms of the Performance Bond
(Standard Form 25). See Singleton Contracting Corp., B-216536, Feb.
25, 1985, 85-1 CPD P 355. Thus, even if we accept the protester's
completion date of September 21, 1985, the surety would have been
obligated on the Kingsville contract until September 21, 1986,
approximately 6 months after bid opening date for the protested
contract. A surety must disclose all outstanding bond obligations,
regardless of the actual risk of liability on those obligations, to
enable a contracting officer to make an informed determination of the
surety's financial soundness. Dan's Janitorial Services, Inc., 61 Comp.
Gen. 592 (1982), 82-2 CPD P 217. Under the FAR, 48 C.F.R. Sec.
28.202-2(a), the contracting officer must consider the outstanding
obligations of an individual surety when determining surety
acceptability. Item 10 of the Affidavit requires the surety to list
"all other bonds on which he is surety" and clearly indicates the duty
of the surety to disclose all such obligations, without exception.
Singleton Contracting Corp., supra. The contracting officer may
consider a surety's failure to disclose fully all outstanding
obligations as a factor in a responsibility determination. Norse
Construction, Inc., B-216978, Feb. 25, 1985, 85-1 CPD P 232. Further,
determinations of nonresponsibility based on the inadequacy of
individual sureties need not be referred to the Small Business
Administration for consideration under its Certificate of Competency
procedures, even if, as here, the bidder is a small business.
Consolidated Marketing Network, Inc., Request for Reconsideration,
B-218104.2, June 12, 1985, 85-1 CPD P 675; Clear Thru Maintenance,
Inc., 61 Comp. Gen. 456 (1982), 82-1 CPD P 581.
We conclude that American's surety was required to disclose its
obligations under the Kingsville contract. While the protester now
asserts that its surety has no other outstanding obligations, the
contracting officer was aware of at least the diputed one because both
procurements were by the same command, and, since he had no way of
knowing whether the surety had other obligations, also undisclosed, that
exceeded the assets listed in the bid bond, could properly be concerned
about the net worth of the surety. We therefore find that the Navy
properly rejected the bid in accord with FAR, 48 C.F.R. Sec.
14.404-2(i), which states that a bid shall be rejected if the bid
guarantee does not conform to the requirements of the IFB.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: SRM Manufacturing Company
File: B-222521, B-222522
Date: July 31, 1986
DIGEST
1. Protests against the rejection of offeror's unsolicited, revised
low proposals as late, filed more than 10 days after the basis of the
protest was known, are untimely under General Accounting Office Bid
Protest Regulations.
2. Award may be made on the basis of initial proposals, without
discussions, wherw the solicitation notified offerors that award might
be made without discussions and acceptance of an initial proposal will
result in the lowest overall cost to the government at a fair and
reasonable price based on adequate competition and prior cost
information.
3. Protest of the awardee's financial and technical capabilities to
perform the contract concern the contracting agency's affirmative
determination of the awardee's responsibility which will not be
questioned absent a showing of fraud or bad faith by procuring officials
or that definitive criteria in the solicitation were not met.
4. Since as the fourth low offeror, the protester's direct economic
interest is not affected by the award of the contract, protester is not
an interested party under General Accounting Office Bid Protest
Regulations to protest the contracting agency"s failure to conduct
discussions and its determination of the awaruee's responsibility.
DECISION
SRM Manufacturing Company (SRM) protests the awards of
firm-fixed-price contracts to Chatel Engineering Company (Chatel) under
requests for proposals (RFP) Nos. F41608-86-R-1234 (1234) and F41
608-85-R-2722 (2722) issued, as small business set-asides, by the
Department of the Air Force, Kelly Air Force base, Texas for inner and
outer tubes for a practice bomb. SRM contends that the contracts should
have been awarded to SRM based on its unsolicited, low revised offers
submitted after the closing date for receipt of proposals. SRM also
alleges that discussions should have been held prior to award, that
Chatel is not financially responsible because of a negative financial
evaluation in a preaward survey, and that Chatel is not technically
capable of performing the contracts.
The protest filed under RFP 1234 is dismissed in part and denied in
part. The protest filed under RFP 2722 is dismissed.
FACTS
Both RFPs advised offerors that the contract would be awarded to the
responsible offeror whose offer, conforming to the solicitation, was the
most advantageous to the government, cost and other factors considered.
See Federal Acquisition Regulation (FAR), 48 C.F.R. Sec. 52.215-16
(1985). The contract award provision also advised that initial offers
should contain the offeror's best terms from a cost and technical
standpoint because award may be made on the basis of initial offers
received. Id. The RFPs further stated that late offers, received after
the closing date, would be subject to the FAR provision governing late
submissions. See 48 C.F.R. Sec. 52.215-10.
Seven offerors responded to RFP No. F41608-86-R-1234 by the January
17, 1986 closing date and nine proposals were received in response to
RFP 2722 by the Februry 4, 1986 closing date. Chatel was the low
offeror under both solicitations. 1/ On February 5, 1986, the Air Force
notified all firms responding to RFP 2722 that Chatel was the low
offeror in order to allow for challenges of Chatel's small business size
status. Subsequently, on February 12, 1986, the protester
hand-delivered to the contracting agency unsolicited, revised proposals
for both procurements that reduced its prices below Chatel's. The Air
Force advised SRM that its revised proposals were late submissions under
the terms of the RFPs and could not be considered. Chatel was awarded
the contract under 1234 on April 9, 1986 and the contract under 2722 on
April 11, 1986.
RFP 1234
SRM contends that it should have been awarded the contract under RFP
1234 because its revised proposal was lower than Chatel's proposal.
Under our Bid Protest Regulations, a protester is required to file its
protest with our Office not later than 10 days after the basis of the
protest was known or should have been known. 4 C.F.R. Sec. 21.2(a)(2)
(1986). Since SRM was informed on February 12, 1986 that its revised
proposal would not be considered, this protest contention, filed with
our Office on April 21, 1986, is dismissed as untimely.
With respect to SRM's contention that discussions were required to be
held prior to award of the contract, the Air Force states that it
determined pursuant to FAR, 48 C.F.R. Sec. 15.610(a), that discussions
were not required. Under that FAR provision, discussions are not
required where the solicitation notifies offerors of the possibility
that award night be made without discussions, discussions are not held
prior to contract award, and acceptance of an offeror's initial proposal
will result in the lowest overall cost to the government at a fair and
reasonable price based on the adequacy of competition and prior cost
information. Since the record indicates that the requirements of FAR,
48 C.F.R. Sec. 15.610(a), were net in this case, the contract was
properly awarded without discussions. See Technical Servs. Corp., 64
Comp. Gen. 245 (1985), 85-1 CPD P 152.
SRM also alleges that Chatel is not financially responsible because
it received a negative financial evaluation as the result of a preaward
survey, and that it lacks the technical capability to perform the
contract. The negative financial evaluation only related to the
inadequacy of Chatel's accounting system for the purpose of
administering progress payments. The preaward survey also found that
Chatel was satisfactory in all other areas, including technical
capability. The Air Force subsequently determined that Chatel was
responsible.
A preaward survey's findings are not determinative of a prospective
contractor's responsibility; rather, the authority to determine a
prospective contractor's responsibility rests with the contracting
agency which is vested with a wide degree of discretion and business
judgment. See Martin Elecs., Inc., B-221248, Mar. 13, 1986, 86-1 CPD P
252. The agency has broad discretion in determining the degree of
reliance that should be placed on a preaward survey and may make
independent evaluations. Id. Our Office will not question the agency's
affirmative responsibility determination unless there is a showing of
fraud or bad faith by contracting officials, or that definitive
responsibility criteria in the solicitation have not been net. Trail
Blazer Servs., B-220724, Feb. 12, 1986, 86-1 CPD P 275. In this case,
the protester has not shown that either exception applies to the Air
Force's independent evaluation of Chatel's financial responsibility or
to the Air Force's acceptance of the preaward survey's finding that
Chatel was responsible in all other areas.
SRM's protest under RFP 1234 is dismissed in part and denied in part.
RFP 2722
SRM's protest against the rejection of its late revised proposal
submitted under RFP 2722 also is untimely because, as under RFP 1234,
the Air Force advised the protester on Feb. 12 that the proposal would
not be considered and SRM failed to file its protest within the 10-day
period for protest. 4 C.F.R. Sec. 21.2(a)(2), supra.
With regard to the allegations concerning discussions and the
awardee's responsibility, SRM is not an interested party to protest
these matters. An interested party is defined in the Competition in
Contracting Act of 1984 31 U.S.C. Sec. 3551(a) (Supp. II 1984), and our
implementing regulations, 4 C.F.R. Sec. 21.0(a), 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." Since SRM is the fourth low offeror, its economic interest is
not directly affected by the award of the contract to Chatel and its
protest under RFP 2722 is dismissed.
Harry R. Van Cleve
General Counsel
FOOTNOTES
1/ Under RFP 1234, Chatel was initially the second low offeror but
became the low offeror after the apparent low offeror received a
negative evaluation on its preaward survey and did not file for a
Certificate of Competency with the Small Business Administration.
Matter of: Ernie Green Industries, Inc.
File: B-222517
Date: July 10, 1986
DIGEST
1. Protest alleging that agency publicly disclosed proprietary
information and conducted an auction is dismissed where protest was not
filed within 10 days of the time the basis of the protest became known.
2. Protest alleging bad faith by an agency in negotiating a contract
under section 8(a) of the Small Business Act is denied where protester
has not presented proof that agency officials had specific and malicious
intent to injure protester.
DECISION
Ernie Green Industries, Inc. (EGI) protests any award made under
request for proposals (RFP) No. DAAA09-85-R-1126 and requests
cancellation of that solicitation. RFP-1126 is a competitive small
business set-aside and was issued by the U.S. Army Armaments, Munitions
and Chemical Command (AMCCOM), Rock Island, Illinois. EGI charges that
AMCCOM publicly disclosed EGI pricing information and then, in effect,
conducted an auction by opening negotiations with other firms. EGI also
charges that AMCCOM deliberately delayed dealing with it on a related
solicitation, RFP No. DAAA09-85-R-0517, in order to make EGI
noncompetitive on RFP-1126.
We dismiss as untimely EGI's protest that AMCCOM disclosed
proprietary information and conducted an auction. We deny the protest
on the remaining issue.
AMCCOM issued RFP-1126 on September 4, 1985, for 66,000 wits of the
M13 Decontaminating Apparatus. EGI responded with a proposal on
November 29. On December 4, AMCCOM sent a mailgram to EGI, via the
Small Business Administration (SBA), concerning this and other on-going
procurements of the M13 Decontaminating Apparatus, which contained a
reference to the price EGI had submitted in its proposal, and which EGI
received on December 9. AMCCOM conducted negotiations under the RFP
from February 5 to March 5, 1986.
EGI's first basis for its protest concerns AMCCOM's December 4
mailgram. EGI charges that this correspondence constituted public
disclosure of proprietary information.
We dismiss the protest on this issue since the matter was not timely
raised. Our Bid protest Regulations require a protest like EGI's to be
filed in our Office no later than 10 days after the basis of the protest
became known or should have become known. 4 C.F.R. Sec. 21.2(a)(2)
(1986). EGI received the mailgram on December 9, 1985, but EGI did not
protest until April 21, 1986. Moreover, EGI's contentions appear to be
without merit. The mailgram in question was directed only to the SBA
and EGI. EGI has presented no evidence that anvone outside the
government obtained access to the information or that competition was
affected in any way. Rather, EGI merely notes that two potentially
competing firms were located in the same general area as the SBA office
that received the mailgram. Our Office will not sustain charges of
improper price disclosure where there is no indication that competition
was affected and the charges are based on conjecture and inference.
Beech Aerospace Services, Inc., B-219362, Aug. 20, 1985, 85-2 C.P.D. P
203; Dynal Associates, Inc., B-197348, July 14, 1980, 80-2 C.P.D. P 29.
EGI's next basis for protest relates to the negotiations AMCCOM
conducted under RFP-1126. EGI maintains that such negotiations, coupled
with the alleged disclosure discussed above, constituted an improper
auction. We again conclude that EGI's protest is untimely. By letter
dated February 5, 1986, AMCCOM advised EGI that it would be conducting
negotiations concerning RFP)-1126. Since EGI did not raise the issue of
an auction until April 1986, its protest on this matter does not comply
with our regulations' 10-day timeframe. In any case, even if we
considered this issue on its merits, EGI would be unsuccessful. As
stated above, there is no evidence of public disclosure of pricing data;
EGI's charge that AMCCOM conducted an auction presumes such disclosure.
EGI's final basis for protest concerns RFP-0517, issued by AMCCOM on
July 16, 1985, to the SBA for award to EGI under the authority of
section 8(a) of the Small Business Act, 15 U.S.C. Sec. 637(a) (1982).
The product involved in RFP-0517 is the same one solicited under
RFP-1126. EGI charges that AMCCOM intentionally delayed the award under
that solicitation to preclude EGI from improving its cometitive position
with respect to RFP-1126; EGI contends that if the contract under
RFP-0517 had been timely negotiated and awarded, EGI, as an existing
producer at that point, could have submitted a lower offer on RFP-1126.
A contracting officer is given broad discretion to let contracts
under section 8(a) of the Small Business Act upon such terms and
conditions as may be agreed upon by the procuring agency and the SBA.
Accordingly, our review of actions under the 8(a) program generally is
limited to determining whether regulations have been followed and
whether there has been fraud or bad faith on the part of government
officials. Forway Industries, B-217046, Nov. 26, 1984, 84-2 C.P.D. P
573. To show that the contracting officer or SBA officials acted in bad
faith, the protester has the heavy burden to present irrefutable proof
that these officials had a specific and malicious intent to injure the
protester. Prospect Associates, Ltd., B-218602, June 17, 1985, 85-1
C.P.D. P 693.
EGI's charge of bad faith centers on the determination by AMCCOM,
contracting officer as to the fair market price for the solicited items.
On August 26, EGI offered to supply 20,000 units at a price of $435.02
each. By letter dated October 16, AMCCOM advised EGI that the fair
market price for the items would be no more than $182.25. Subsequently,
at EGI's request, AMCCOM agreed to increase the quantity from 20,000 to
40,000 units, and EGI then lowered its price to $219.00 per unit.
AMCCOM later decreased its estimate of the fair market price even
further, after receiving offers under RFP-1126. Since EGI's final price
reduction, AMCCOM has declined to award the 8(a) contract, citing EGI's
high price as the primary impediment.
We deny EGI's protest on this issue. The procurement regulations
generally preclude a section 8(a) award at more than the fair market
price, to be determined through a price or cost analysis and by
considering factors like commercial prices for similar products and
in-house cost estimates. Federal Acquisition Regulation, 48 C.F.R. Sec.
19.806 (1984). In reaching a decision concerning the fair market price
for purposes of award under RFP-0517, the AMCCOM contracting officer
considered offers under yet another competitive small business set-aside
for the M13 Decontaminating Apparatus (RFP No. DAAA09-85-R-0576) as well
as EGI's own offer on RFP-1126, which was considerably less than its
offer under the 8(a) procurement. We see nothing wrong with that
approach or analysis, and we therefore cannot conclude that EGI's
allegations concerning AMCCOM's negotiations under RFP-0517 constitute
irrefutable evidence of intent to injure the firm.
The protest is dismissed in part and denied in part.
Harry R. Van Cleve
General Counsel
Matter of: Canadian Commercial Corporation
File: B-222515
Date: July 16, 1986
DIGEST
1. Where protest alleging an impropriety contained in a pre-closing
date solicitation amendment was not filed prior to the closing date for
receipt of initial proposals, protest is untimely and will not be
considered by the General Accounting Office.
2. Protest concerning various procurement irregularities that
allegedly occurred during the course of a procurement that was filed
more than 10 working days after the protester knew or should have known
of the bases for protest is untimely and will not be considered by the
General Accounting Office.
3. Protest that agency did not debrief protester and that notice of
award was late is dismissed since these are procedural matters which do
not affect the validity of the award.
DECISION
Canadian Commercial Corporation (CCC) 1/ protests the award of a
fixed-price contract to Rois Manufacturing Company, Inc. (Rois), under
request for proposals (RFP) No. DLA120-85-R-1071, issued by the Defense
Personnel Support Center, Defense Logistics Agency (DLA), Philadelphia,
Pennsylvania, for a quantity of medical chests. CCC principally
contends that its proposal was improperly excluded from consideration
without the firm's having been afforded the opportunity to submit a best
and final offer. CCC also alleges that various irregularities occurred
during the course of the procurement.
We dismiss the protest.
The solicitation was issued on April 29, 1985, and, as amended,
established a closing date of August 30, 1985. The solicitation
generally provided that award would be made to the responsible offeror
whose offer is the most advantageous to the government, cost or price
and other factors specified in the solicitation considered. 2/ Since the
requirement had been procured historically on a sole-source basis from
Rois, DLA, on July 15, issued an amendment advising Rois that "they
were now in a competitive situation."
Prior to the closing date, CCC expressed concern to DLA, based on
information obtained from CCC's subcontractor, about the availability in
the marketplace of a "Nielson" latch, which was a required component of
the end item. CCC recommended that offerors be permitted to substitute
a "Sessions" latch for the "Nielson" latch. On August 29, a meeting was
held between representatives of CCC and DLA procurement officials. The
latter advised CCC that because they were uncertain whether the
"Sessions" latch was technically acceptable, CCC could submit alternate
offers, one offer based on the use of the "Sessions" latch, and a second
offer based on use of the "Nielson" latch. DLA also advised CCC that
if, but only if, the "Sessions" latch were approved for use in the
proposed contract, the solicitation would be amended to revise the
specifications to permit all offerors to propose based upon use of that
latch. 3/ CCC's proposal did not offer different prices for two
alternate latches, but merely conditioned its offer on the use of "all
Nielson", or "all Sessions" type latches, and further conditioned
delivery on the availability of a sufficient number of "Nielson"
latches.
The contracting officer, without amending the solicitation to permit
the use of the "Sessions" latch, proceeded to evaluate proposals. On
December 17, 1985, in response to a DLA request for an extension of its
acceptance period, CCC expressed concern that the delay in making award
was creating "serious administrative problems" for the firm. In
response, on December 30, 1985, the contracting officer then sent the
six highest-priced offerors, including CCC, a notice that they were no
longer considered to be in the "competitive range." The use of the
"Sessions" latch was disapproved by DLA engineers for technical reasons
on February 7, 1986. Award was made to Rois, the low offeror, on
February 28, 1986. CCC was advised of the award on March 14. CCC
protested to DLA by letter dated March 27. The protest was denied on
April 4. This protest was filed April 18.
If a protest has been filed initially with the contracting agency,
any subsequent protest to this Office will be considered if it is filed
within 10 days of when the protester learns of initial adverse agency
action on the protest, provided that the agency level protest complied
with the time limitations prescribed in our regulations. 4 C.F.R. Sec.
21.2(a)(3) (1986). Generally, 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 proposais must
be filed prior to the closing date for receipt of initial proposals. 4
C.F.R. Sec. 21.2(a)(1). In procurements where proposals are requested,
alleged improprieties which do not exist in the initial solicitation but
which are incorporated by amendment must be protested before the next
closing date for receipt of proposals. Id. In other cases, protests
must be filed not later than 10 working days after the basis of protest
is known or should have been known, whichever is earlier. 4 C.F.R. Sec.
21.2(a)(2).
CCC, which has incorporated by reference its agency-level protest in
its protest to our Office, has filed what is, in most respects, an
untimely protest. CCC's allegations, and our responses, follow.
1) DLA afforded an unfair advantage to Rois over other offerors by
informing that firm that it was in a "competitive situation."
DLA's advice to Rois was contained in an amendment, dated July 15,
1985, that was issued prior to receipt of proposals. Since this alleged
impropriety was contained in a solicitation amendment and was not
protested to the agency prior to the closing date (August 30, 1985), we
consider this matter to be untimely under 4 C.F.R. Sec. 21.2(a)(1). (In
any event, it is proper to advise a firm with no prior competition that
a competition is being conducted. See National Data Corp., 61 Comp.
Gen. 328 (1982), 82-1 CPD P 313.)
2) DLA improperly excluded the firm from the "competitive range" in
December 1985, thereby deprving it of the benefit of written or oral
discussions not allowing the firm an opportunity to submit a best and
final offer with a substantially reduced price.
As stated above, under the terms of the solicitation the basis for
award was price alone and the contracting officer, on December 30, 1985,
sent the six highest-priced offerors, including CCC, a notice that they
were no longer considered to be in the "competitive range." Upon receipt
of this notice, CCC knew that DLA was not going to hold discussions with
it or allow it to submit a best and final offer. Yet, it did not file
its agency protest concerning this matter until March 27, 1986, much
later than 10 working days after the basis for protest was known.
Therefore, this protest ground is untimely. 4 C.F.R. Sec. 21.2(a)(2).
3) DLA failed to notify CCC at the earliest practicable time that its
proposal was no longer eligible for award.
If CCC considered the evaluation period to have been unreasonable in
view of the fact that DLA solicited no further submissions from offerors
after the August 30 closing date, it should have protested the matter to
this Office or to the agency at the latest upon receipt of the rejection
notice of December 30. It failed to do so until March 27, more than 10
working days after the basis for protest was known or should have been
known. The protest ground is therefore untimely. 4 C.F.R. Sec.
21.2(a)(2).
4) The solicitation's specifications, by requiring only a "Nielson"
latch, were overly restrictive since a "Sessions" is a fully acceptable
substitute.
CCC's proposal offered "all Nielson" or "all Session" type latches.
Upon receipt of DLA's rejection notice, CCC knew or should have known
that a "Sessions" latch was unacceptable because the contracting officer
had failed to issue an amendment as promised if use of the "Sessions"
latch would be permitted. Further, a meeting was held on January 28,
during which CCC was told in detail the basis for rejection of its
offer. This was confirmed by letter from DLA dated February 26, 1986,
explaining the agency's position concerning the "Nielson" and "Sessions"
latches. Yet, CCC failed to protest this matter to the agency until
March 27, more than 10 working days after the basis for protest was
known or should have been known. Accordingly, it is untimely and will
not be considered further. 4 C.F.R. Sec. 21.2(a)(2).
5) DLA did not notify CCC of the award until "two weeks after the
fact" so that CCC could not take advantage of the requirement that an
agency direct the contractor to cease performance if a protest is filed
within 10 days of the date of contract award. See 4 C.F.R. Sec.
21.4(b).
This matter is generally procedural in nature and does not affect the
validity of the contract award. See Employment Perspective, B-218338,
June 24, 1985, 85-1 CPD P 715 at 19. Furthermore, had CCC filed its
other protest issues in a timely manner, it would have benefited from
the "stay" provisions of the Competition in Contracting Act of 1984
(CICA). Specifically, CCC was notified on December 30 that its offer
was rejected, but it did not even protest to the agency until March 27.
At the time it received the rejection notice, it was aware that award
would be made to another firm. Had a protest on this issue (and others
that became ripe on December 30) been timely filed in accordance with
CICA, the withholding of award provision of CICA, 31 U.S.C. Sec. 3553
(Supp. II 1984), would have been in effect. In any event, since the
protester's offer was fifth low and was therefore not in line for award,
it suffered no prejudice by the delay.
6) DLA failed to grant CCC a debriefing.
DLA states that it did not schedule a debriefing because it is not
required when a contract is awarded on the basis of price alone, which
is the case here. Federal Acquisition Regulation, Sec. 15.1003(a) (FAC
No. 84-7, April 30, 1985). Although this basis for its protest may be
timely--the protester raised the issue with DLA within 10 working days
of the notificatiotn of award to Rois--this issue is not one that this
Office ordinarily will consider because the scheduling of a debriefing
is a procedural matter that does not involve the validity of an award.
See Pan Am World Services, Inc., B-215308.5, Dec. 10, 1984, 84-2 CPD P
641. We therefore also dismiss this aspect or the protest.
CCC requests reimbursement or proposal preparation costs and the
costs of pursuing this protest. However, in view of the fact that we
are dismissing the protest and have not found any violation of statute
or regulation, we deny this request. 4 C.F.R. Sec. 21.6(d).
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
FOOTNOTES
1/ In accordance with standard procedures for Canadian purchases, CCC
was the prime contractor which submitted a proposal on behalf of Hammel
Gears, Inc., a Canadian firm and its proposed subcontractor. See the
Department of Defense Federal Acquisition Regulation Supplement, 48
C.F.R. Subpart 225.71 (1985). Because of identity of interest and for
the sake of simplicity, we refer to both firms in this decision as CCC.
2/ The RFP, however, did not require offerors to submit competing
technical proposals and did not specify any other factors besides cost
or price elsewhere in the solicitation. Thus, the basis for award was
price alone.
3/ DLA reports that none of the seven other offerors that submitted
proposals expressed any concern regarding the availability of the
"Nielson" latch, including a second Canadian firm.
Matter of: B-222485
File: Blue Cross and Blue Sheild of Virginia
Date:July 11, 1986
DIGEST
1. General Accounting Office (GAO) will consider untimely protest
issues on the merits where issues are before a court of competent
jurisdiction and court has expressed interest in a GAO decision.
2. Allegation that contract award for the delivery of mental health
services violates Congressional mandate to reduce costs because
awardee's proposed price exceeds agency's current coats for these
services is without merit where authorizing legislation for this program
contains no requirement that contract price be limited in such a manner.
3. Agency did not abuse its discretion by awarding contract to a firm
that did not comply with state licensing requirements for insurance
companies since offeror's failure to comply with state and local
licensing requirements is a matter between the offeror and state and
local officials which does not affect the legality of the award.
4. General Accounting Office (GAO) will not reevaluate proposals or
substitute its judgment for that of agency evaluators who have
considerable discretion. Rather, GAO will examine record to determine
whether agency judgment was reasonable and in accord with evaluation
criteria.
5. Award to higher-priced, technically-superior offeror is not
objectionable where solicitation states that technical considerations
are significantly more important than price.
Blue Cross and Blue Shield of Virginia (Blue Cross) protests the
award of a contract to Alliance Alternative Delivery Systems Corp.
(Alliance) under request for proposals (RFP) No. MDA906-85-R-0008 issued
by the Office of the Civilian Health and Medical Program of the
Uniformed Services (OCHAMPUS), Department of Defense. The RFP was
issued to obtain an alternate approach for the delivery of comprehensive
mental health services for all OCHAMPUSeligible beneficiaries in the
Tidewater area of Virginia. Blue Cross argues that the award to
Alliance the higher priced, higher technically rated offeror, violated
the authorizing legislation for this program which was to assist
OCHAMPUS in reducing costs. Also, Blue Cross contends that Alliance's
proposal should have been rejected because Alliance was not licensed as
an insurance company under Virginia state law at the time it submitted
its offer. In addition, Blue Cross argues that OCHAMPUS misapplied the
technical and cost evaluation criteria contained in the RFP.
We deny the protest.
Subsequent to filing this protest, Blue Cross filed suit in the
United States District Court for the Eastern District of Virginia (Civil
Action No. 86-0374-R). By order dated June 25, 1986, the court
requested that our Office consider the protest. While we find that some
of the issues raised by Blue Cross are untimely, we nonetheless consider
them in view of the court's interest. See Freedom Industries, Inc.,
B-212371, Nov. 28, 1983, 83-2 CPD P 617.
Under 10 U.S.C. Sec. 1092(a) (Supp. III 1985), OCHAMPUS is authorized
"... to conduct studies and demonstration projects on the health care
delivery system of the uninformed services with a view to improving the
quality, efficiency, convenience and cost effectiveness of providing
health care services... to members and former members and their
dependents." The current RFP was issued under this authority and is
considered an "at risk" demonstration project since it requires the
contractor to provide all required services without any adverse effect
on beneficiaries, at a firm, fixed price. The contractor is responsible
for either providing the care through contracted providers or for paying
for the care provided by noncontracted providers. It is expected that
the contractor will utilize a case management system to ensure that the
appropriate level of care is being provided and to reduce unnecessary
services. The contractor will attempt to shift the delivery of mental
health care services from more expensive hospital and residential
treatment centers to less expensive hospitalization and outpatient
settings.
Although OCHAMPUS indicates that reducing mental health costs is an
objective, the RFP advised offerors that technical evaluation factors
were significantly more important than price. The major evaluation
factors, in descending order of importance, were listed as follows:
a) Technical Approach
b) Management Plan
c) Personnel Resources
d) Corporate Experience
Technical approach was identified as being significantly greater in
importance than the other factors. Offerors were advised that proposals
must not merely offer to provide mental health services but that a
"definite approach" in meeting the government's requirements must be
submitted.
The RFP was issued on June 17, 1985 and a preproposal conference was
held. Five amendments to the RFP were subsequently issued and five
proposals were received by the closing date for receipt of offers.
Evaluations were conducted by a separate Source Selection Evaluation
Board (SSEB) and Business Proposal Evaluation Team (BPET) and after the
initial evaluation, all five offerors were considered within the
competitive range. Four of the five offerors responded to the agency's
request for best and final offers and on February 3 through 7, 1986, the
SSEB and BPET reevaluated the proposals. The results of this evaluation
were reviewed by an executive review council which was responsible for
making recommendations to the Source Selection Authority. Alliance was
ranked first technically and remained first after OCHAMPUS factored in
its proposed price. Blue Cross was ranked last technically but was
ranked third overall because of its lower proposed price.
After a preaward survey, OCHAMPUS awarded the contract to Alliance on
April 2 and Blue Cross' protest of the award was filed with our Office
on April 11. Despite the pending protest, continued performance was
authorized on April 18. See 31 U.S.C. Sec. 3553(d)(2) (Supp. II 1984).
Statutory Requirements
Blue Cross argues that 10 U.S.C.A Sec. 1092 was enacted to assist
OCHAMPUS in holding down spiraling health care costs and that the award
to Alliance, at a price which exceeds OCHAMPUS' currant costs for these
services, violates this congressional mandate and constitutes an abuse
of discretion. The protester argues that awarding the contract to an
offeror whose price is higher than current costs makes a mockery of the
Congressional directive.
Despite Blue Cross' assertion to the contrary, we find no statutory
requirement that OCHAMPUS award this contract at a price lower than its
current costs for providing these services. In this regard, we note
that Blue Cross has quoted no language from the statute which arguably
supports its position. Moreover, while the the legisiative history does
indicate that Congress was concerned with escalating military health
care costs, other factors were also to be considered in establishing
such a demonstration project. S. Rept. No. 98-174, 98th Cong., 1st
Sess. (1983). Section 1092(a)(i) lists cost effectiveness as only one
of four areas Congress sought to improve in the military health care
system and the quality, efficiency and convenience of health care
services were also to be considered in establishing demonstration
projects under this authority. Since Congress has not limited the
contract price of any award made under section 1092, we conclude that an
award which exceeds current costs is not at variance with the statute
authorizing OCHAMPUS to contract for these services.
Compliance with License Requirement
Blue Cross argues that Alliance's offer should have been rejected
because Alliance was not a licensed insurance company under Virginia
state law at the time it submitted its proposal. The protester contends
that the Virginia Insurance Code requires an insurance company to obtain
a state license prior to engaging in any insurance business in the state
and that Alliance's submission of a proposal under this RFP is
tantamount to the conduct of insurance business. Although amendment No.
0003 to the RFP clearly stated that offerors need not be licensed prior
to the submission of proposals but could obtain a license within 120
days of award, Blue Cross argues that Virginia law in this area is not
preempted by federal law and that the RFP cannot be used to excuse a
breach of state law. Blue Cross contends that OCHAMPUS' failure to
follow state law is evidence of bad faith and constitutes an abuse of
discretion.
We find the protester's position to be without merit. The failure of
an offeror to comply with state and local licensing requirements
generally is a matter between the offeror and state and local officials
which does not affect the legality of the contract award. 53 Comp. Gen.
51 (1973); 51 Comp. Gen. 377 (1971); see also Cadillac Ambulance
Service, Inc., B-220857, Nov. 1, 1985, 85-2 CPD P 509. This is so
because government contracting officers, as a general rule, are not
competent to pass upon the question of whether a particular local
license or permit is legally required to perform a government contract
and, for this very reason, the matter is made the responsibility of the
contractor. Whether Virginia's particular requirements would apply to
this contract and preclude Alliance from performing is a decision to be
made by state authorities, and if Virginia subsequently determines that
a license is required, the state may enforce its requirements, provided
the application of state law is not in conflict with federal laws or
policies or does not in any way interfere with the execution of federal
powers. See Leslie Miller, Inc. v. Arkansas, 352 U.S. 187 (1956).
Should Virginia's enforcement of its requirements eventually preclude
Alliance from performing, Alliance then may be found in default and the
contract terminated. The award itself, at this point, however, is not
improper. 51 Comp. Gen. 377, supra.
Technical Evaluation
Blue Cross contends that the record fails to support the agency's
technical evaluation of and contract award to a higher priced offeror.
The protester argues that Alliance's proposed price was much higher and
that the technical difference between the proposals was not sufficient
to justify the additional cost.
Blue Cross also argues that its proposal was not fairly evaluated.
OCHAMPUS rated Blue Cross' proposal unsatisfactory for failure to
provide a description for developing and maintaining systems of records
and failure to provide an explanation of how all systems were to be
integrated. In addition, Blue Cross' proposal was rated less than
satisfactory because it did not provide sufficient information regarding
its overall organization and because its corporate experience was also
considered less than satisfactory. The protester asserts that it
provides extensive information in these areas which apparently was
ignored by the agency. It points out that it has more than 50 years of
relevant experience and asserts that its rating in this area is a
glaring example of unfairness and constitutes an abuse of discretion.
Blue Cross complains that OCHAMPUS has only provided selective
disclosure of the agency's evaluation and argues that fairness requires
that OCHAMPUS make a complete disclosure of its technical evaluation as
well as Alliance's.
OCHAMPUS has not disclosed to the protester the actual technical
scores of each offeror nor has the agency released Alliance's option
year prices since the actual point scores are considered confidential
and OCHAMPUS does not release option year prices prior to exercise of
the option. OCHAMPUS argues that there were many deficiencies remaining
in Blue Cross' best and final technical proposal and that the agency's
source selection statement clearly supports the agency's conclusions.
In addition, although Blue Cross did submit the lowest overall price
over the potential contract period of 3 years, OCHAMPUS notes that
technical factors were significantly more important than price under the
RFP. OCHAMPUS indicates that it used a "best buy" analysis which
factored in the respective weights for technical and price. Under this
analysis, Alliance's proposal was ranked first overall while Blue Cross
low price only increased its relative ranking from fourth out of four to
third.
The determination of relative merits of a proposal, particularly with
respect to technical considerations, is primarily a matter of
administrative discretion, and the exercise of that discretion will not
be disturbed unless it is shown to be arbitrary or in violation of the
procurement laws or regulations. General Mgmt. Systems, Inc., B-214246,
Sept. 25, 1984, 84-2 CPD P 351. Our Office will not reevaluate
technical proposals. Leo Kanner Assocs., B-213520, Mar. 13, 1984, 84-1
CPD P 299.
Here, Blue Cross has a fundamental disagreement with OCHAMPUS
concerning the adequacy of the information provided with its proposal.
However, the protester's mere assertion that the agency ignored
information contained in its proposal does not establish that OCHAMPUS'
conclusions were unreasonable or arbitrary. OCHAMPUS determined that
Blue Cross failed to provide sufficient information regarding its claim
processing system, its organizational relationships between claims
processing and case management, and failed to provide sufficient detail
on its generalized approach to systems design. For example, Blue Cross
failed to discuss anticipated problems from implementing a case
management system and did not describe an approach for adding providers
during the contract. OCHAMPUS noted that payment to providers was
approximately 50 percent of current reimbursement rates with the
remaining being paid from an incentive pool on a quarterly basis. There
was concern that providers would drop from the project because of a cash
flow problem and Blue Cross failed to discuss how it would attract and
maintain providers in sufficient numbers to perform the contract. Also,
while Blue Cross indicated in its proposal that every facility under its
management had experienced a drastic reduction in costs, Blue Cross did
not provide sufficient information explaining how the quality of care
was maintained with the lowered costs. In addition, there was no
coordination between Blue Cross' claims processors and case managers and
Blue Cross did not address the use of claims data in the case management
system. We note that an agency's technical evaluation is dependent upon
the information furnished in the proposal and the burden is clearly upon
the offeror to submit a proposal that is adequately written. Although
the protester characterizes the information it submitted as extensive,
we find the record reasonably supports the agency's conclusions.
In addition, our review of the record provides no basis to conclude
that the evaluators were unfair or arbitrary in their assessment of
either firm's proposal. Concerning the evaluation of its corporate
experience cited by Blue Cross as a glaring example of unfairness, we
note that this contract is a demonstration project which called for a
creative nontraditional approach to the provision of mental health
services. Blue Cross' abundant claims processing experience was not
considered directly relevant to this type of project in which case
management was emphasized. Furthermore, the record shows that the same
standards were utilized by OCHAMPUS in evaluating the corporate
experience of all the offerors.
Overall, OCHAMPUS concluded that Alliance had significant experience
working cooperatively with the military and their dependents and that
Alliance proposed a superior case management system which would result
in a significant reduction in the cost of providing mental health care
to OCHAMPUS beneficiaries. Our review of the record shows that OCHAMPUS
followed the evaluation scheme set forth in the RFP in making this
determination and, while Blue Cross disagrees with the scoring of its
proposal in certain areas, we cannot conclude that the evaluation lacked
a reasonable basis.
With respect to Blue Cross complaint that award was improperly made
to the higher priced offeror, we point out that the agency was not
required to make award on the basis of low price. The RFP provided that
price would not be controlling and indicated that technical concerns
were significantly more important than price. In light of the
difference in technical merit between the Blue Cross and Alliance
proposals, we see no basis to object to the agency's award decision.
Concerning Blue Cross' allegation that the agency selectively
disclosed information concerning its evaluation, OCHAMPUS did provide
Blue Cross with a summary of the evaluation of its best and final offer.
In addition, we note that the relevant documents related to the
evaluation process were made available for our review. To the extent
the protester contends that it also should receive access to these
documents, its sole recourse is to pursue the remedies provided under
the Freedom of Information Act, 5 U.S.C. Sec. 552 (1982). See RCA
Service Co., B-219636, Nov. 4, 1985, 85-2 CPD P 518.
Finally, we note that Blue Cross contends that OCHAMPUS delayed
scheduling a debriefing in this matter in order to delay the filing of a
protest and that OCHAMPUS was not forthcoming with information
concerning Blue Cross' alleged deficiencies. There is no evidence that
OCHAMPUS intentionally delayed the debriefing in this case and, in any
event, this allegation, as well as the contention that the debriefing
was inadequate, are procedural matters which do not affect the propriety
of the award. Systems Research Laboratories, Inc., B-219780, Aug. 16,
1985, 85-2 CPD P 187.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Ace Amusements, Inc.
File: B-222479
Date: July 14, 1986
DIGEST
Protest that agency acted deliberately to exclude protester from the
competition and failed to obtain reasonable prices is denied, since
protester fails to prove allegations.
DECISION
Ace Amusements, Inc. (Ace) protests the award of a contract under
request for proposals (RFP) No. DAKF48-86-R-NAF-0023 issued by the
Department of the Army, Ft. Hood, Texas, requiring the contractor to
furnish, install, and maintain coin operated amusement vending machines
(such as jukeboxes and video and pinball games) at various Ft. Hood
recreation facilities. 1/ Ace contends that the Army acted deliberately
to prevent it from competing for the contract. The protest is denied.
The RFP, issued on June 20, 1985, initially solicited offers to cover
a contract period from September 1, 1985, through August 31, 1986, with
options for renewal through August 31, 1990, 2/ and established the
closing date for receipt of proposals as July 9,1985. When the RFP was
issued, however, Ace was performing the solicited services under a
contract awarded to it in February 1982 by the Ft.Hood Army and Air
Force Exchange Service (AAFES), which contract provided for renewal
options through February 1987. The base contract period of the
solicitation under protest, therefore, overlapped the final option year
of Ace's AAFES contract.
It appears from the record that the protester's 1982 contract with
AAFES was for the provision of amusement vending machine services not
only at AAFES facilities (which are not at issue in this protest) but
also on behalf of Morale, Welfare and Recreation (MWR) facilities, and
clubs, at Ft. Hood. It is the service for these latter users, to which
we will refer as the nonappropriated fund, which is the subject of RFP
-0023. It does not appear that the nonappropriated fund itself directly
contracts for these services but that other entities--such as
AAFES--contract on its behalf. According to a memorandum in the file,
the nonappropriated fund, dissatisfied with the maintenance of machines
and the contractor's unwillingness to place machines in requested
locations under the existing AAFES contract, sought to independently
contract for these services through the Ft. Hood Contracting Division,
Directorate of Contracting and Commercial Activities, which issued RFP
-0023. The nonappropriated fund subsequently invoked an agreement it
had with AAFES for the termination of these services, and AAFES has
directed the protester to remove the machines it had provided the
nonappropriated fund under the AAFES contract.
Although it is not entirely clear whether Ace received a copy of the
solicitation at the time of its issuance on June 20, 1985, the record
does indicate that on July 11, Ace was given a copy of the solicitation
and of amendment OO01, issued on that same day, by which the time for
receipt of offers was "temporarily postponed." At that time, Ace
inquired of the Ft. Hood Contracting Division concerning its issuance of
RFP -0023 for services which Ace was then under contract with AAFES to
perform for a period that would overlap the period covered by the
subject RFP. According to the Army, it informed the protester that it
did not "handle" or get involved in AAFES contracts.
The protester then inquired at the AAFES contracting office
concerning the Army's issuance of an RFP for services Ace was under
contract with AAFES to provide. The record indicates that the AAFES
officials advised Ace to the effect that the Army was not authorized to
contract for the services Ace was then performing under the AAFES
contract. According to Ace, AAFES said it had no knowledge of RFP -0023
and referred the protester to the Army; the Army contracting officials
disclaimed any knowledge of the AAFES contract with Ace; and the
nonappropriated fund office, on behalf of which the Army conducted the
procurement, claimed it could not discuss the matter.
By amendment 0002, dated October 15, 1985, the closing date for
receipt of offers was reestablished as November 4, and by amendment
0003, the closing date was changed to December 20. Award was made on
February 21, 1986, to Central Music Co., the sole offeror.
When, on March 17, 1986, apparently after receiving notice of the
award of RFP -0023, Ace inquired of the Army why it was not given an
opportunity to compete for the contract, the Army stated that it had
mailed to Ace amendments 0002 and 0003 in October and November,
respectively. Ace maintains that it never received either of those
amendments.
Ace contends that the Army and the AAFES failed to provide it with
information necessary for Ace to bid on the solicitation, and directly
and intentionally misled Ace when it attempted to obtain clarification
concerning the procurement. Ace further alleges that the Army failed to
establish that it delivered to Ace, or that Ace received, a copy of the
amendments which reestablished the date for receipt of proposals, and
that the Army failed to obtain adequate competition and reasonable
prices.
The Army denies that it acted deliberately to preclude Ace from
competing for the contract. Ace was listed among the nine firms on the
bidders mailing list, and the record indicates that amendment 0003, the
final change to the date for submission of offers, was sent to all
bidders on that list. The agency emphasizes that the solicitation
package provided to ACE listed the Ft. Hood Contracting Division as the
point of contact regarding the solicitation (including the names and
telephone numbers of two employees at that office), but that Ace
consulted with end accepted the advice of, AAFES with respect to the
procurement. We note that during the 8 month period between July 16,
1985, and March 17, 1986, there is no record of any inquiry made by Ace
of Army contracting officials concerning the status of RFP -0023. Ace
states that it was "led to believe" that the solicitation Issued in July
1985 was postponed "due to confusion and problems" surrounding the
procurement and, for that reason it took no further action following its
receipt of the amendment 0001 notice of postponement of receipt of
offers.
Certainly some confusion resulted from the fact that one organization
(Ft. Hood Contracting Division) had issued a solicitation for services
whose period for performance overlapped that of an existing contract
which the protester had with another organization (AAFES), and where
both the proposed contract and part of the existing contract actually
were for the benefit of a third organization (the nonappropriated fund).
It does not appear that the relationship of these three organizations,
as it related to this contract, was ever comprehensively explained by
anyone to the protester, to whom the parties involved simply represented
"the Army."
Based on the record in this case, it appears that this situation may
have reflected some misunderstanding, particularly on the part of AAFES,
concerning the Army's authority to contract for the subject services on
behalf of the nonappropriated fund. The question of the Army's
authority to contract for the services in spite of Ace's existing
contract with AAFES was finally resolved by the contracting offices not
sent to it in an attempt to preclude it from competing. Under the
circumstances in this case, we do not conclude that the agency
deliberately, or otherwise, denied Ace the opportunity to compete.
Denver X-Ray Instruments, Inc., B-220963, Nov. 15, 1985, 85-1 C.P.D. P
562.
Further, we do not consider it legally necessary or appropriate to
disturb the Army's award based on Ace's objections to the competition
and prices obtained by the Army, in view of the agency's solicitation of
nine firms and its award of the contract on more favorable terms than
that of the last option year of Ace's contract with AAFES. See
International Association of Fire Fighters, B-220757, supra.
The protest is denied.
Harry R. Van Cleve
General Counsel
FOOTNOTES
1/ We have jurisdiction over this protest, even though the
procurement is for a nonappropriated fund activity, because the
procurement is conducted by the Department of the Army, a federal
agency. See Artisan Builders, B-220804, Jan. 24, 1986, 65 Comp. Gen.,
86-1 C.P.D. %% 85
2/ The contract period was subsequently amended to run from February
6 1986, or date of award (whichever is later) to February 5, 1987, with
options to renew through February 5, 1991.
FILE: B-222478 DATE: July 7, 1986
MATTER OF: ICSD Corporation
DIGEST:
1. Award on an initial proposal basis is proper where the
solicitation advises offerors of this possibility and the record clearly
demonstrates that acceptance of an initial proposal will result in the
lowest overall cost to the government, based on full and open
competition and prior cost experience.
2. General Accounting Office dismisses a protest concerning an
alleged solicitation ambiguity because it was filed after the date for
receipt of initial proposals. Protests based on alleged improprieties
apparent on the face of a solicitation must be filed before the receipt
of initial proposals.
3. Where a procurement has not been set aside for small business, the
agency has no legal basis for giving preferential treatment to small
business firms in the selection process.
4. Protester fails to meet burden of proof and the General Accounting
Office denies protest, where protester merely raises general allegations
regarding propriety of proposal evaluation and has not furnished any
evidence refuting record which shows that proposals were evaluated in a
manner consistent with solicitation "Evaluation Factors for Award"
provision.
ICSD Corporation protests the award of a contract to Lear Seigler,
Inc., under request for proposals (RFP) No. N60530-85-R-0389, issued by
the Naval Weapons Center, China Lake, California, for a quantity of
land-based gyrocompasses, known as north finding modules. The protester
primarily protests the fact that the Navy made award on the basis of
initial proposals. Additionally, the protester maintains that the
solicitation was ambiguous and the evaluation defective. We deny the
protest in part and dismiss it in part.
The RFP, issued on September 9, 1985, contemplated a fixed-price
contract for the manufacture and testing of 298 north finding modules to
serve, among other applications, as a subsystem of the Modular Universal
Laser Equipment (MULE) system. The MULE is a portable system that uses
a laser beam to determine relative target location and to designate
targets for laser-guided weapons. The RFP also requested offers on
three first article test units (although this requirement could be
waived in certain cases) and the rework of those units.
The evaluation criteria to be utilized were listed in the RFP as
follows, in descending order of importance: (1) price, (2) technical
factors, and (3) management. Although not announced in the RFP, the
Navy assigned respective weights of 50, 40, and 10 percent to these
criteria. Proposed prices were weighted by comparing the lowest price,
which received the maximum possible (50) points, to the specific
offeror's price.
Three firms submitted proposals and all were included in the
competitive range; the protester's proposal was considered "marginally
acceptable" with a high risk factor. Lear Seigler, Inc., received the
highest technical point score, and its proposed price was the lowest.
Scores and prices of the three offerors were as follows:
Technical and Total Management Proposed Cost Weighted
Offeror Score Price Score Score Lear Seigler 37 34 $5,145,330 50 87.34
Sperry Corp. 35.76 $6,604,486 38.95 74.71 ICSD, 25.71 $5,244,800 49.05
74.76
The Navy determined, without holding discussions, that Lear Seigler's
offer was most advantageous to the government, price and other factors
considered, because of the firm's technically superior proposal and
lowest cost. Further, the agency determined that Lear Seigler's price
was fair and reasonable based on adequate price competition. The agency
awarded a contract to Lear Seigler on April 7, 1986.
The protester argues that the Navy's failure to conduct discussions
and request best and final offers was not in the best interest of the
government. It maintains that due to a decrease in its costs that
occurred after it had submitted an initial proposal, it could have
lowered its price if best and final offers had been requested. Further,
it contends that discussions could have clarified deficiencies cited by
the Navy in the firm's proposal.
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 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 10 U.S.C.A. Secs.
2305(a)(2)(B)(ii); 2305(b)(4)(A)(ii) (West Supp. 1985); Federal
Acquisition Regulation (FAR) Sec. 15.610(a)(3) (FAC 84-5, Apr. 1, 1985;)
see Cerberonics, Inc., B-220910, Mar. 5, 1986, 86-1 CPD P 221.
The RFP here incorporated by reference the "Contract Award" clause,
FAR Sec. 52.215-16, section (c) of which expressly advises offerors that
the government may award a contract "on the basis of initial offers
received, without discussions," and that offerors thus should include
their best terms in their initial proposals. The agency determined that
there was adequate price competition, based on the receipt of the three
proposals, all of which had been included in the competitive range.
Additionally, the agency's analysis of prior cost experience shows that
the unit price for the modules awarded to Lear Seigler here was $17,157,
while the unit price under the same firm's current contract for the
requirement, awarded on May 3, 1985, was $21,922. Before that, the unit
price under a Sperry Corporation contract awarded on December 20, 1983,
was $52,359.
Although the protester now states, after award, that it could have
lowered its prices, there is no indication in the record that the agency
had reason to believe that discussions would have resulted in a more
advantageous price, particularly since it states that it could waive the
first article requirement for Lear Siegler, but could not have done so
for ICSD, since that firm was not a prior producer. 1/ Accordingly, we
find that the agency met the statutory requirement for full and open
competition, resulting in an award with the lowest cost to the
government.
The protester also contends that the solicitation is ambiguous
concerning best and final offers. The protester acknowledges that the
previously discussed FAR clause stated that award could be on the basis
of initial proposals; however, the protester states it relied on
another clause in the RFP, concerning submission of a small business
subcontracting plan, which allegedly stated that best and final offers
would be received.
We dismiss this basis of protest as untimely, since our Bid Protest
Regulations require that protests based on alleged solicitation
deficiencies apparent on the face of a solicitation be filed before the
closing date for submission of initial proposals. 4 C.F.R. Sec.
21.2(a)(1) (1986); Tracor Applied Sciences, B-219735, Sept. 26, 1985,
85-2 CPD P 343. However, we note that the clause in question, entitled
"Small and Small Disadvantaged Business Subcontracting Plan," does not
specifically state that best and final offers will be requested.
Instead it states that if an offeror is successful, after the receipt of
best and final offers, it may be required to submit a small business
subcontracting plan on an expedited basis.
Finally, ICSD complains that the Navy failed (1) to consider its
status as a small business concern and (2) to follow the RFP evaluation
criteria. Since the solicitation here was not set aside for small
business, there was no legal basis for the Navy to give special
consideration to this status. Norfolk Ship Systems, Inc., B-219404,
Sept. 19, 1985, 85-2 CPD P 309. As for the protester's claim that the
agency failed to follow listed evaluation criteria, the record shows
that the source selection board provided a narrative for each of the
offerors on each of the RFP evaluation factors, and that the contracting
officer adopted the selection board's recommendations. The protester
does not specify which criteria were not followed or otherwise rebut the
Navy's report. Therefore, we consider the protester not to have met its
burden of proof on this protest ground. Muschong Metal & Mfg. Co.,
B-221410, Apr. 4, 1986, 86-1 CPD P 327.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
FOOTNOTES
1/ ICSD's unit price of $14,394 was the lowest offered unit price.
Its total price for the entire quantity of north finding modules,
however, was offset by its highest total offered price for the first
article test units, which the Navy waived for Lear Siegler.
Matter of: Nebraska Aluminum Castings, Inc.--Claim
File: B-222476.6, B-222476.7
Date: September 15, 1987
DIGEST
Claim for monetary damages arising from rejection of bid as
nonresponsive is denied where General Accounting Office (GAO) previously
denied the protest and affirms prior positions that agency's actions
leading to the bid rejection and GAO and agency reliance on recent GAO
decisions, was not improper or based on bias.
DECISION
Nebraska Aluminum Castings, Inc. (NAC), claims $118,525 for protest,
bid preparation and other costs under 31 U.S.C. Sec. 3702 (1982),
resulting from the Department of the Army's rejection of its bid as
materially unbalanced under invitation for bids (IFB) No.
DAAK01-85-B-B060. Previously, pursuant to our Competition in
Contracting Act (CICA) bid protest function (31 U.S.C. Sec. 3551(1)
(Supp. III 1985)), we issued three decisions and two letters sustaining
the Army's action and denying NAC's claim for protest and bid
preparation costs. Nebraska Aluminum Castings, Inc., B-222476, June 24,
1986, 86-1 CPD P 582, aff'd on reconsideration, B-222476.2, Sept. 23,
1986, 86-2 CPD P 335, B-222476.3, Nov. 4, 1986, 86-2 CPD P 515, letter
to NAC, B-222476.4, Nov. 25, 1986, letter to Senator J. James Exon,
B-222476.5, Dec. 23, 1986. We deny the claim.
In previously denying NAC's protest and claim for costs, we applied
the CICA mandate that we must determine that a solicitation, proposed
award, or award of a contract does not comply with statute or regulation
before such costs may be granted. Since our prior decisions were
adverse to NAC, in that we found no violation of statute or regulation
concerning the rejection of NAC's bid and the award to the incumbent,
there was no basis to allow recovery of the claimed costs. NAC and the
Army have debated the possible exclusivity of our CICA claims authority
over our general claims settlement authority under which the claim is
filed.
However, since we continue to find no basis to object to the Army's
rejection of the bid, we see no need to discuss this matter. NAC itself
acknowledges that the requisite showing for relief under 31 U.S.C. Sec.
3702 is no less stringent than under CICA.
Briefly, the facts concerning this procurement are the following.
After the low bidder under the IFB was determined to be nonresponsible,
the Army also found NAC, the next low bidder, to be nonresponsible due
to its lack of experience in producing the required item. Because of
NAC's status as a small business concern, the matter was referred to the
Small Business Administration (SBA) for a certificate of competency
(COC) determination. The SBA determined that NAC was a responsible
prospective contractor to perform the work and advised the Army that it
would issue a COC to NAC unless the Army chose to appeal the
determination. Shortly before the appeal period expired, the Army
rejected NAC's bid as nonresponsive on the ground that it was materially
unbalanced with respect to the firm's first-article pricing.
In the first decision, we concluded that the Army had properly
rejected NAC's bid as materially unbalanced because the firm's
first-article prices were grossly inflated ($22,510 for each of 10
first-article units versus $19.17 per production unit). This action
reflected our holdings in the earlier decisions upon which the Army had
relied. Edgewater Machine & Fabricators, Inc., B-219828, Dec. 5, 1985,
85-2 C.P.D. P 630; Riverport Industries, Inc., 64 Comp. Gen. 441
(1985), 85-1 C.P.D. P 364, aff'd on reconsideration, B-218656.2, July
31, 1985, 85-2 C.P.D. P 108. In those decisions, we held that a bidding
scheme which grossly front loads first-article prices as a means to
obtain unauthorized contract financing renders the bid materially
unbalanced, per se, so as to require its rejection as nonresponsive.
The rationale is that an award to a firm submitting grossly inflated
first-article prices will provide funds to the firm early in the
contract performance period to which it is not entitled if payment is to
be measured on the basis of the actual value of the firstarticles (i.e.,
the legitimate costs associated with the production and testing of the
articles for acceptability); therefore, this situation presents the
same evils as a prohibited advance payment. See Riverport Industries,
Inc.Request for Reconsideration, supra.
Much of NAC's present claim is based upon arguments that have been
considered and reconsidered several times; therefore, we will limit our
discussion to those issues which we believe directly bear on the
arguments advanced to support the claim. NAC now contends that the
claim should be allowed based on a prejudicial government course of
conduct which prevented the fair and honest consideration of its bid.
NAC points out that the agency's actions showed that the agency never
seriously intended to award to any firm other than the incumbent. NAC
says that, in bad faith, the agency disqualified the NAC bid by
neglecting to give due notice of the unbalanced bid rule in the
solicitation, by retroactively applying the Riverport rule, and by
giving preferential treatment to the awardee in ignoring a similar bid
defect and in granting an improper bid extension. Furthermore, NAC
alleges that prior to submitting its bid it received advice from the
legal office at the procuring activity to the effect that its pricing of
the bid was proper as the agency was only interested in the total price
for the units. NAC accuses our Office of contributing to this course of
conduct by unreasonably acquiescing in the retroactive application of
our two decisions upon which the agency found NAC nonresponsive.
NAC accuses the Army of bad faith in issuing the IFB without a clear
warning to bidders that a bid in the form of NAC's would be rejected as
nonresponsive and the fact that the agency relied on a new General
Accounting Office rule, announced in the Riverport decisions, issued
just prior to the IFB.
The initial Riverport decision was issued on April 1, 1985, almost 5
months prior to the issuance of this IFB on August 27, 1985. The Army
requested reconsideration of the decision, and the decision was affirmed
on July 31, 1985, about 1 month prior to the IFB's issuance. The
Edgewater decision, issued 3 months after the IFB and about 4 months
prior to the nonresponsive bid determination, recommended that the Army
take steps to discourage this type of bidding. (In 1986, the Army
formally implemented the decisions by issuing guidance to its
contracting activities for use of an appropriate solicitation clause.)
We held in those two decisions that the absence of a warning clause
did not justify ignoring the nonresponsiveness of the unbalanced bid.
Thus, the Army could not validly distinguish our decisions requiring the
rejection as nonresponsive of a front-end loaded bid, like NAC's, and
give NAC preferential treatment. While the incumbent awardee's bid was
also unbalanced, but to a much lesser degree (compared to NAC's bid of
$22,510 each ($1,222.41 each)), we did not apply the Riverport rule
since we assumed that no firstarticles would be required from an
incumbent contractor. The incumbent was in fact awarded the contract
without being required to furnish a first-article. The Army conduct
evidences the proper application of our decisions, and hardly
demonstrates bias or bad faith.
As for the possible misleading pre-bid agency legal advice that
front-end loading a first-article price was proper, we have already
twice concluded that NAC had no basis upon which to rely on such advice
given the solicitation's admonition that such advice was not binding.
In this connection, we note that early in the procurement NAC wrote a
letter to the contracting officer requesting advice on unbalancing and
the contracting officer responded in writing that NAC should seek advice
from its legal counsel. Further, it is not clear who at the agency
provided the last minute advice, how the question was posed by NAC or
what knowledge this person had of unbalancing rules, including the
Riverport decisions. In these circumstances, NAC relied at its risk on
the advice it sought and received.
In further support of its argument of bias, NAC notes that the Army,
before rejecting NAC's bid as nonresponsive, attempted to deny NAC an
award on the basis that NAC was nonresponsible and that the Army only
rejected NAC as nonresponsive when it appeared that the SBA would issue
a COC. NAC stresses that the agency had no basis to find it
nonresponsible based, in part, on the urgency of the procurement, but so
found merely as a pretext to deprive NAC of the award. According to
NAC, the Defense Contract Administration Services Management area, Cedar
Rapids, was misled concerning the urgency of the procurement by a
possibly biased Army technical specialist related to a former procuring
activity contracting officer, who is now a sales representative for the
incumbent. The Army stands by its statement that urgency was involved
and advises that the technical specialist was not related to the former
contracting officer. The agency justification for the nonresponsibility
finding was based on NAC's lack of experience in producing the item
which is a valid concern in such matters. We find nothing in the record
showing that agency personnel questioned NAC's responsibility based on
anything other than, as the agency states, "an honest opinion."
NAC also attempts to show bias by the fact that the agency did not
raise responsiveness until "late in the game" after SBA issued the COC
just prior to the appeal period expiration and 6 months after opening,
despite several prior indications that the NAC bid was responsive. For
a similar situation, see Islip Transformer & Metal Co., Inc., B-225257,
Mar. 23, 1987, 87-1 C.P.D. P 327. The last minute determination of
nonresponsiveness appears to have resulted not from any bias toward NAC,
but from the procuring activity's lack of awareness of the Riverport and
Edgewater decisions. At the time of the contracting officer's decision,
the Army had not yet disseminated guidance on the Riverport rule. The
contracting officer was advised of the rule upon forwarding the COC
appeal to the Assistant Secretary of the Army for Research, Development,
and Acquisition. While the contracting officer was on constructive
notice of the Riverport rule and, therefore, initially should have
rejected the NAC bid as nonresponsive, when he actually obtained
knowledge of our prior decisions, he was required to apply them to NAC's
bid. As we have often said, an agency will not be faulted for taking
the proper action, even if it initially did so for an unsupportable
reason.
The final argument is that we improperly applied the
Riverport-Edgewater rule against NAC alone, out of context and
retroactively. NAC points out that we did not enforce the rule against
the bidders in those cases.
In both Riverport and Edgewater award had been made and we concluded
that the unbalanced bids properly should have been rejected. In view of
the circumstances involved in those cases, we did not recommend
termination of the contracts. Here the agency properly applied the rule
of those cases and rejected NAC's unbalanced bid. Therefore, we fail to
see any uneven application of the rule of Riverport and Edgewater. We
have continued to apply the Riverport rule. In Islip Transformer &
Metal Co., Inc., supra, and Microtech, Inc., B-225892, Apr. 29, 1987,
87-1 C.P.D. P 453, we denied protests against rejections of low bids
unbalanced similarly to NAC's. In those cases, the protesters were
found nonresponsive after SBA actually issued a COC following the
agencies' findings of nonresponsibility.
The claim is denied.
Comptroller General
of the United States
Matter of: Harbert International, Inc.
File: B-222472
Date: July 15, 1986
DIGEST
GAO cannot question exclusion of protester's proposal from
competitive range where proposal reasonably was found deficient in some
areas to the extent that a completely new proposal would have been
necessary in order for the proposal to have been considered to be
competitive.
DECISION
Harbert International, Inc. (Harbert), has protested its exclusion
from the competitive range under Request for Proposals (RFP) No.
DAKF71-85-R-0204, issued by the Department of the Army for base
operations support and services under a cost-plus-award fee contract at
the Palmerola Air Force Base, Honduras, for a base period of May 1,
1986, through September 30, 1986, with additional 1-year options for
fiscal years 1987, 1988, 1989, and 1990, respectively. Harbert contends
that its proposal was not "grossly" deficient and should have been
admitted to at least the initial competitive range of proposals received
under the RFP. We deny the protest.
Harbert also requests that we release certain information which the
Army has refused to release to the company. To the extent that
Harbert's request is under section 3553(f) of the Competition in
Contracting Act of 1984, 31 U.S.C.A. Secs. 3551-3556 (West Supp. 1985),
the contracting agency has the primary responsibility for determining
which documents are subject to release. Employment Perspectives,
B-218338, June 24, 1985, 85-1 C.P.D. P 715. To the extent Harbert is
requesting disclosure of the Army's documents under the Freedom of
Information Act, 5 U.S.C. Sec. 552 (1982), only the contracting agency
and the courts have authority under the act to determine what
information agencies must disclose. However, we have considered the
information in reaching our decision.
The Army determined that Harbert's proposal should not be considered
to be within the competitive range because it did not have a reasonable
chance of being selected for award given the Army's perception of the
proposal's deficiencies. Harbert, on the other hand, contends that the
Army has incorrectly evaluated its proposal in a number of respects and
its proposal does deserve to be considered to be within the competitive
range.
The evaluation of proposals and the resulting determination as to
whether an offeror is in the competitive range is a matter within the
discretion of the contracting activity, since it is responsible for
defining its needs and the best methods of accommodating them. Maxima
Corp., B-220072, Dec. 24, 1985, 85-2 C.P.D. P 708. Generally, offers
that are unacceptable as submitted and would require major revisions to
become acceptable are not for inclusion in the competitive range. See
Essex Electro Engineers, Inc.; ACL-Filco Corp., B-211053.2, B-211053.3,
Jan. 17, 1984, 84-1 C.P.D. P 74. Further, we have held that, in
reviewing an agency's evaluation, we will not evaluate the proposal de
novo, but instead will only examine the agency's evaluation to ensure
that it had a reasonable basis. Syscon Corp., B-208882, Mar. 31, 1983,
83-1 C.P.D. P 335.
The Army explains that while Harbert is the incumbent contractor for
the current contract at the Air Base, there are significant differences
in the scope of the work required under this RFP and Harbert's current
contract. The Army states that these differences include: (1) the RFP
requirement for certain facilities to be constructed (referred to as an
"industrial complex"); (2) the management of the supply system at the
base now being accomplished by federal employees; (3) total operation
of the "DAS-3" computer system in Honduras and Panama; and (4)
maintenance of communication/electronic equipment not currently being
performed by Harbert.
The RFP stated the significant evaluation standards to be Technical,
Management, Quality Control, and Cost in descending order of importance.
Technical was weighted approximately twice as important as any of the
other standards. Also, although cost was not to be scored or weighted
as such, cost was to be fully evaluated to the extent that award would
be made based on the proposal "which has the best overall value to the
Government."
Notwithstanding the increased scope of work described in the RFP
compared with the scope of work found in Harbert's existing contract,
the Army considered that Harbert's proposal maintained its scope of
responsibility at Harbert's current contract level, rather then the
increased level set forth in the RFP as determined by the Army.
Although Harbert argues that the Army has not established the validity
of its comparison of the RFP to Harbert's current contract, we consider
the Army's statement that the RFP reflects substantially increased
requirements to be accurate in the absence of contradictory evidence
which has not been furnished by Harbert. See Freedom N.Y., Inc.,
B-219676, Dec. 6, 1985, 85-2 C.P.D. P 635.
For example, the Army considers that Harbert's management proposal
showed lack of knowledge of the supply function and Harbert's intent to
maintain its scope of responsibility at the contract's present level
rather than the increased requirement described in the RFP. For
example, the Army refers to Harbert's statement in its proposal
reserving Harbert's right to change current supply forms and records
(other than those specified by "Government directives") currently
utilized by federal employees.
The Army concluded that this statement indicated that Harbert was
contemplating reduction in supply forms and raised doubts concerning
Harbert's recognition of the expanded scope of work regarding supplies
required under the RFP. Harbert argues that it would not have altered
"Government forms"; however, it is clear that Harbert was contemplating
the possible ellmmnation of supply fowrm now being used by federal
employees--those forms not specifically required by "Government
directives"--otherwise Harbert would have not made this statement.
Harbert was reserving--to some unspecified degree--the right to
determine the records requirement of the supply function as it saw fit.
Under these circumstances, we find reasonable the Army's view that
Harbert's proposal raised serious concerns regarding Harbert's
understanding of the expanded scope of supply work required under the
RFP and its commitment to meet RFP supply function requirements.
The Army also found Harbert's proposal for equipment necessary for
the supply function to be inadequate as the proposal seemed to be based
on the amount of current equipment available to Harbert rather than on
an assessment of the additional equipment needed to meet the increased
scope of the RFP. In reply, Harbert states that the RFP contained a
"small amount of data" on which to base an equipment proposal. However,
the RFP provided data concerning the estimated workload of supply
operations. Moreover, Harbert did not question the adequacy of the RFP
in this area before submitting its proposal. In these circumstances, we
find reasonable the Army's finding of a deficiency in this regard.
Again, the Army reasonably found that Harbert's offer raised concerns
that Harbert had not considered the increased scope of the supply
function of this RFP or the cost of meeting the increased scope of the
supply function. Although Harbert insists that it, nevertheless,
proposed equipment based on the RFP and not based on its present
operations, this bare statement simply questions the Army's evaluation
judgment that Harbert's supply equipment proposal simply did not reflect
the increased scope of work required under the RFP. This questioning,
itself, does not show that the Army's judgment is unreasonable, however,
for it is well-established that the protester's mere disagreement with
the contracting agency's evaluation does not render the evaluation
unreasonable. See General Management Systems, Inc., B-214246, Sept. 25,
1984, 84-2 C.P.D. P 351.
The Army has listed several other inadequacies in Harbert's proposal
to which Harbert has replied in considerable detail. Based on our
review of the record, we nevertheless cannot conclude that Harbert's
discussion establishes the Army's unreasonableness in excluding the
company's proposal from the competitive range.
For example, in several areas of proposal deficiencies--DAS-3
computer operations, methodology for certain transporation services, and
the "Facilities Engineer" function--it is our view that Harbert simply
disagrees with the Army's evaluation without showing that the evaluation
is unreasonable. Specifically, under DAS-3 computer operations, Harbert
insists--contrary to the Army's evaluation--that the computer personnel
which the company proposed have the required qualifications, yet Harbert
has not established on the record its proposed employees'
qualifications. Under transportation services, Harbert argues that it
did provide all required details of these services. Under Facilities
Engineer, Harbert insists that it adequately staffed this function
contrary to the Army's view. In all of these areas, we find that the
Army reasonably found Harbert's proposal deficient.
Further, in two other areas of the RFP--linen services and industrial
complex facilities--Harbert's proposal directly conflicted with the RFP.
The RFP required that all linen services were to be offered on a daily
basis. Nevertheless, Harbert stated that it would provide the "dates
and times" that these services would be available--thus, reserving the
apparent right to deviate from a daily schedule of services if Harbert
so desired.
Harbert also failed to address adequately the RFP requirement for a
plan and cost of industrial complex facilities required by the RFP. An
amendment to the RFP provided that:
"Para. C.4.1 of the RFP Regarding the Industrial Complex.
The plan for the industrial complex is for evaluation.... The
contractor shall provide all facilities... All costs... will be
included in item 0001 upon award ofcontract."
Paragraph C.4.1 of the RFP described the facilities involved in the
industrial complex and required the contractor to vest title to the
facilities to the government at the end of the contract.
Harbert proposed to rent certain existing facilities to the
government and to unilaterally "establish at the end of the contract a
fair market price" for industrial complex facilities that would serve as
a basisfor sale of the facilities to the government instead of directly
vesting title to the facilities in the government at the end of the
contractas the RFP provided. Thus, Harbert proposed that the company
would sellthe facilities to the Army at a price determined by Harbert at
the end ofthe contract, instead of establishing the cost of the
facilities in its offer as required by the RFP. Additionally, Harbert
submitted neither a cost nor a plan for these facilities even though
Harbert admits that both were required under RFP amendment No. 0001.
Although Harbert argues that it was not in a position to provide a cost
and plan because the RFP allegedly lacked sufficient detail, Harbert did
not question this requirement prior to submission of offers and we find
there was adequate information to enable offerors to respond to this
requirement.
Given these proposal inadequacies, the Army is also of the view that
Harbert's proposed contract costs were understated, compared with the
government estimate, because the proposal did not provide sufficient
equipment, facilities, and personnel.
Given the above inadequacies, which we cannot question, we consider
it unnecessary to discuss the Army's other findings regarding Harbert's
proposal. In our view, the above inadequacies support, in themselves,
the Army's decision to exclude Harbert's proposal.
Harbert has cited our decision in Magnavox Advanced Products and
Systems Co., B-215426, Feb. 6, 1985, 85-1 C.P.D. P 146, in which we
expressed the view to the United States Claims Court, which had sought
our views, that a proposal did not appear "grossly deficient" even
though it had deficiencies in 12 areas, and two of those areas involved
requirements that Magnavox (the only competing offeror) could not meet
without "substantial design and cost consequences." We also told the
court that "we might have been inclined to recommend" that Magnavox's
proposal be included in the competitive range if other offerors had
competed.
Given the contingent nature of our opinion to the court, the decision
cannot be considered to hold that the Magnavox proposal, containing 12
deficiencies and found technically unacceptable, was considered to be
within the competitive range. Furthermore, the decision was not
intended to establish any strict guidelines as to the number of
deficiencies which would justify exclusion of an offer from the
competitive range. Rather, the basic principles, noted above, at the
beginning of our discussion of Harbert's proposal and also stated in the
Magnavox decision, are for application in resolving Harbert's protest.
Harbert correctly notes that the Army has not applied the phrase
"grossly deficient" to Harbert's proposal. Nevertheless, the Army has
stated that Harbert's proposal did not have a reasonable chance of being
selected for award which we equate to the Army's finding of a grossly
deficient proposal. Although Harbert further argues that the Army's
findings are not specifically related to technical, management, or
quality control areas, we consider that the criticisms apply to the
substance of Harbert's proposal regardless of whether the noncost
criticisms are considered to relate to technical or management
considerations. Given the noncost deficiencies, the Army also had
serious cost criticisms with regard to Harbert's proposal.
Since the substance of Harbert's proposal reasonably was found
deficient in some areas to the extent that a completely new proposal
would have been necessary in the supply function and with respect to the
industrial complex, we must conclude that Harbert's proposal was
properly excluded from the competitive range.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-222465 DATE: July 7, 1986
MATTER OF: IMR Systems Corportion
DIGEST:
Although an agency is required to solicit as many sources as
practicable when it uses other than competitive procedures based on the
existence of an unusual and compelling urgency, an agency is justified
in negotiating a contract with the only source it knows is capable of
commencing performance immediately when the agency reasonably determines
that the urgent nature of its requirement precludes the consideration of
other sources.
IMR Systems Corporation protests the sole-source award by the Food
and Drug Administration (FDA) of contract No. 223-86-1302 to the Maxima
Corporation. The contract is for management of the document control
room at FDA's Center for Drugs and Biologics (CDB) in Rockville,
Maryland. IMR complains that it was improperly denied an opportunity to
compete for the contract, even though it had advised the agency prior to
award that it believed it was qualified to perform the services
required. We deny the protest.
The agency reports that it had decided sometime prior to July 1985,
to contract for the operation of the CDB document control room and to do
so through a section 8(a) contract with the Small Business
Administration (SBA). 1/ The document control room processes a number of
reports and other submissions incident to the FDA's drug review
responsibilities. On July 31, 1985, the SBA authorized the FDA to
negotiate with two firms, Maxima and Technassociates, Inc., both of
which subsequently received a request for proposals. By letter dated
Auqust 22, however, Technassociates informed the FDA that it would not
be submiting a proposal because, it said, the solicitation contained a
number of uncertainties that made it undesirable to contract on a
fixed-price basis. FDA then proceeded to negotiate only with Maxima.
At the conclusion of the negotiations, and after security clearances
had been obtained and a preaward audit performed, FDA and Maxima agreed
on February 28, 1986, to the terms of a contract, performance of which
would commence on March 17. The agency forwarded the proposed contract
to the SBA for approval. On March 5, however, the agency learned
through its Small and Disadvantaged Business Utilization Specialist
(SADBUS) that the SBA was reluctant to agree to the contract because it
believed that the Standard Industrial Classification (SIC) the FDA had
used (SIC 7379, with a limit on average annual receipts of $12.5
million) was incorrect and that Maxima did not qualify as a small
business under the proper SIC. The agency reports that it attempted to
obtain a formal decision from the SBA on the matter, but was
unsuccessful. With the proposed contract commencement date of March 17
approaching, the FDA wrote to the SBA on March 14 to request that the
SBA either sign the contract or provide the basis for its refusal to do
so. By letter dated March 19, the SBA informed the agency that it would
not sign the contract, citing an incorrect SIC code and the FDA's
failure to follow prescribed procedures as the reasons for this
decision.
The agency reports that even before the SBA's refusal to sign the
proposed 8(a) contract, it was experiencing difficulties in the document
control room. The staffing level had dropped from six to two full-time
employees, and a serious backlog in the processing of work had
developed. When contractor operation of the control room did not
commence on March 17 as anticipated, some former agency control room
personnel were required temporarily to resume control room work. After
SBA refused to sign the proposed 8(a) contract, the agency determined
that the lack of proper control room staffing was an urgent and
compelling circumstance that justified a non-8(a), sole-source award to
Maxima under 41 U.S.C. Sec. 253(c)(2) (Supp. II 1984). A contract was
signed on March 28; no other sources were solicited.
IMR does not contest the agency's determination that urgent and
compelling circumstance justified its use of other than competitive
procedures. Rather, the basis for the protest is that in failing to
solicit an offer from IMR, the agency violated 41 U.S.C. Sec. 253(e),
which provides that whenever an agency uses other than competitive
procedures under section 253(c) (2), it must request offers from as many
potential sources as practicable under the circumstances. IMR states
that it had made known to the agency its interest concerning this
procurement through numerous contacts, both oral and written, with the
agency's SADBUS. IMR has submitted copies of its letters to the SADBUS,
which assert that firm's ability to assume responsibility for control
room operations with as little as 3 to 5 days notice.
The agency reports that even thouqh its SADBUS may have known of the
protester's interest in this procurement, the agency's contracts office
did not. Moreover, says the agency, the urgent need for a contractor to
operate the control room precluded consideration of other sources. In
this connection, the contracting officer notes that considerable time
was consumed in negotiating the proposed 8 (a) contract with Maxima
because of the need for security clearances and an audit of Maxima's
proposed costs.
Under the Competition in Contracting Act of 1984, an agency is
permitted to procure goods or services using other than competitive
procedures when the agency's need is of such an unusual and compelling
urgency that the government would be seriously injured if the agency
cannot limit the number of sources solicited. 41 U.S.C. Sec. 253(c)
(2). In such circumstances, however, an agency must solicit as many
potential sources as practicable. 41 U.S.C. Sec. 253(e); TMS Buildings
Maintenance, B-220588, Jan. 22, 1986, 65 Comp. Gen.. , 86-1 CPD P 68.
In this connection, we have said that an agency usinq the urgencv
exception may limit the competition to the only firm it reasonably
believes can perform the work promptly and properly. Arthur Young &
Co., B-221879, June 9, 1986, 86-1 CPD P ; Gentex Corp., B-221340, Feb.
25, 1986, 86-1 CPD P 195.
We find it unnecessary to resolve the issue of whether the
contracting officer knew or should have known of IMR's interest in
operating the document control room. Suffice it to say that the urgent
need to provide for contractor operation of the control room simply made
it impracticable to solicit any other sources.
The record indicates that at least until March 5, the agency was
proceeding on the assumption that Maxima would be assuming
responsibility for operation of the control room on or about March 17.
When it learned that the SBA might be reluctant to sign the 8(a)
contract, the FDA attempted to elicit the SBA's position on the matter
but did not receive an official response from the SBA until March 27.
By this time the control room was experiencing backlogs in its
processing work and the agency determined that its need for a contractor
was urgent if it was to avoid missing statutory processing deadlines.
IMR does not question the propriety of this determination.
Faced with the urgent need to contract for control room services, the
agency decided to enter into a solesource contract with Maxima, the only
source the agency knew was capable of commencing contract performance
immediately. While there may have been other sources, including IMR,
capable of performing the required work, the time involved in soliciting
and evaluating other offers precluded the consideration of such other
sources. In reaching this conclusion, the agency obviously relied on
its recent, lengthy experience in negotiating the proposed 8(a) contract
with Maxima, a process that included a cost audit and security
clearances. Although expedited procedures could have been used once the
agency formally was informed on March 27 of the SBA's decision not to
sign the proposed 8(a) contract, the agency's conclusion that even
expedited negotiations with another source would not have allowed for a
contractor to begin performance immediately was reasonable under the
circumstances. IMR's contention that it could have commenced
performance with as little as 3 to 5 days notice does not account for
the time involved in selecting a qualified contractor, even using
expedited procedures. In short, we find that the agency's solicitation
of only one source was justified. See Authur Young & Co., B-221879,
supra.
Moreover, the agency's sole-source contract with Maxima is for a
period of only 6 months. At the end of the 6-month period, the agency
should either contract for the required services under the 8(a) program
or conduct a procurement using full and open competitive procedures,
under which, of course, IMR would be entitled to compete. We note that
Maxima's contract includes options allowing the agency to extend the
period of performance up to two additional 12-month periods and a
further additional period of 5.5 months. In our view, the urgent
circumstances in this case justified the award of a short-term,
sole-source contract, but did not justify the inclusion of options. A &
C Building and Industrial Maintenance Corp., 64 Comp. Gen. 565, 85-1
CPD P 626. Thus, the exercise of those provisions should not be
considered. By letter of today, we are so advising the head of the
agency.
Because we conclude that the agency did not act unreasonably in
awarding a contract to Maxima without soliciting other sources, we deny
the protest.
Harry R. Van Cleve
General Counsel
FOOTNOTES
1/ Under Section 8(a) of the Small Business Act, 15 U.S.C. Sec.
637(a) (1982), the Small Business Administration (SBA) enters into
contracts with government agencies and arranges for the performance of
such contracts by awarding subcontracts to socially and economically
disadvantaged small business concerns. The SBA and the contracting
agencies enjoy broad discretion in arriving at section 8(a) contracting
arrangements. Inter Systems, Inc., B-220056.2, Jan. 23, 1986, 86-1 CPD
P 77.
Matter of: GTE Telecom Inc.--Reconsideration
File: B-222459.4
Date: May 14, 1987
DIGEST
1. Where protest to General Accounting Office (GAO) was filed more
than 10 working days after basis for it was known to the protester, so
that the protest was untimely, fact that a copy of the protest was filed
with contracting agency within the 10-day period is irrelevant, since
filing of a protest with GAO means receipt in our Office.
2. While there is nothing objectionable in a protester pursuing
additional, more detailed, information to support its arguments, doing
so does not justify delaying filing a protest based on the grounds
already known.
DECISION
GTE Telecom Inc. requests that we reconsider our April 16, 1987,
dismissal of its protest as untimely under Corps of Engineers request
for proposals (RFP) No. DACA51-86-R-0015, to acquire telecommunications
equipment. We affirm the dismissal.
Under our Bid Protest Regulations, a protest must be filed with the
General Accounting Office or the contracting agency 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). Here, the award was made to another
firm on February 26, and GTE was given a debriefing on the award on
March 26. Based on this debriefing, GTE submitted an April 6 letter to
our Office, which we received April 15, purporting to put the government
on notice that a protest would be forthcoming after confirming
information was obtained, and further stating that the protest was based
on four allegations: the Corps failed to conduct meaningful discussions
with GTE; the Corps failed to disclose significant information; the
Corps attempted a technical leveling of the competitors' proposals; and
the Corps improperly made award based on price despite inadequate
information.
Since the April 6 letter raised four specific alleged deficiencies in
the award, we considered it clear that GTE was in possession of
sufficient information--whether received at or before the debriefing--to
proceed with its protest, and that awaiting confirming information thus
was not a proper basis to delay filing a protest. Because we did not
receive the April 6 letter until April 15, more than 10 working days
after the March 26 debriefing, we found the protest grounds untimely
raised.
GTE requests reconsideration for two reasons. First, GTE states that
it sent a copy of its April 6 letter by overnight mail to the
procurement official designated in the RFP, and seems to imply that this
satisfied the 10-day filing requirement. (April 7 is within 10 days
after March 26). We disagree.
While a copy of this letter would serve to notify the Corps of a
protest to our Office (or an intent to protest in the future), GTE has
presented no evidence (for example, a delivery receipt) that it in fact
sent a copy of the letter to the Corps by overnight mail or, if so, that
the Corps ever received it. In any event, an agency's receipt, within
the 10-day period, of a copy of a protest to our Office that we do not
receive until after the filing period expires does not serve to make the
protest timely, since the timeliness of a protest to our Office is
measured by when we receive the filing. 4 C.F.R. Sec. 21.2(b); see
Data Processing Services, B-225443.2, Dec. 18, 1986, 86-2 C.P.D. P 683.
GTE's second basis for reconsideration is merely a restatement of the
view, expressed in its April 6 letter, that it needed information
confirming its protest bases before it could file a protest. As we
determined in dismissing the protest, however, GTE clearly was aware of
the reasons it believed the award was improper, apparently based on the
debriefing. See Dayton T. Brown, Inc.-- Reconsideration, B-223774.4,
Jan. 21, 1987, 87-1 C.P.D. P 75.
As GTE has not shown that dismissal of its protest was based an error
of law or fact, we affirm the dismissal.
Harry R. Van Cleve
General Counsel
Matter of: Twin City Construction Company
File: B-222455
Date: July 25, 1986
DIGEST
Proposal for construction services that was ranked unacceptable
for failure to include required information regarding manpower and
equipment properly was excluded from the competitive range where
the deficiencies reasonably caused the proposal to be ranked
fourth and unacceptable in comparison to the three proposals
included in the competitive range.
DECISION
Twin City Construction Co. protests the rejection of its proposal as
being technically unacceptable under request for proposals (RFP) No.
DACA45-86-R-0004, issued by the U.S. Army Corps of Engineers for the
construction of a field maintenance shop at Ellsworth Air Force Base,
South Dakota. Twin City essentially complains that its proposal's
deficiencies were minor, that the awardee's proposal was similarly
deficient, and that Twin City's offered price was lower than the
awardee's.
We deny the protest.
The RFP stated that offerors should propose the shortest practicable
construction period, and required that each offeror submit a
"mini-network" showing the calendar days for all activities. The
mini-network was required to include "delivery times on all critical
items in the construction schedule and the proposed methods, manpower
and equipment necessary to meet the proposed schedule."
The elements of the mini-network were to be evaluated under the RFP's
Schedule evaluation factor, which was weighted 50 percent of all
factors. The remaining factors were Price and Previous Experience,
weighted 40 percent and 10 percent, respectively. The RFP provided that
each proposal would be point-scored, using a formula with the above
weights, to determine a competitive range for discussions and/or award.
The Corps received 10 proposals, two of which were immediately rejected
as being unacceptable. The remaining eight proposals ranged in price
from $4,630,500, offered by Morgan & Oswood Construction Co., to
$5,085,000, offered by the eventual awardee--Groathouse Construction Co.
The protester offered the fifth lowest price of $4,840,000. After
point-scoring the proposals, the Corps selected a competitive range of
three, excluding Twin City's fourth-ranked proposal from the competitive
range. The ranking of the top four proposals, out of a possible 1,000
points, was as follows:
Schedule & Previous Experience Price Total
Groathouse 490 321 811
Morgan & Oswood 389 375 764
Henry H. Hackett & Sons 410 350 760
Twin City 380 349 729
The Corps determined that Twin City's proposal required major
revisions to have a chance for award, and therefore excluded it from the
competitive range. In particular, the Corps concluded that Twin City's
mini-network failed to show the proposed manpower and equipment;
indicated that floor slabs would be placed before the interior
foundations, interior walls, and roofing in violation of the RFP's
specifications; and did not appear to allow adequate time to acquire
reinforcing steel. The Corps also considered Twin City's project
history a weakness because it showed only four projects of $4,000,000 or
more and contained no evidence of satisfactory completion within the
required time frame. (The RFP requested such information for up to 10
projects.) The Corps conducted discussions with the three firms in the
competitive range, and subsequently awarded the contract to Groathouse
at a price of $4,996,450.
The protester contends that the rejection of its proposal was
unreasonable in light of the fact that it offered a lower price than the
awardee and only a 1-day longer construction period. The protester
asserts that it was not practicable nor meaningful to submit detailed
manpower charts until after the award. The required listing of
equipment, the protester contends, was unnecessary since the project
required only readily-available construction equipment. Twin City
further argues that Groathouse's proposal was not meaningfully more
informative regarding manpower and equipment. While Twin City does not
dispute that its proposed schedule for placing floor siabs and its prior
experience were weaknesses, the protester maintains that Groathouse's
proposal contained similar deficiencies. Regarding the reinforcing
steel, Twin City has supplied a subcontractor's letter stating its
ability to comply with Twin City's schedule. Finally, Twin City asserts
that all the perceived deficiencies in its proposal easily could have
been resolved through reasonable discussions. It is not our function to
reevaluate an offeror's proposal, although we will review an agency's
evaluation to ensure that it was reasonable and consistent with
requirements of law and the stated evaluation factors. Simulators Ltd.,
B-219804, Dec. 4, 1985, 85-2 CPD P 625. In this respect, there
generally is no requirement to include in the competitive range offers
that are unacceptable as submitted and would require major revisions to
be made acceptable. Metric Sys. Corp., B-218275, June 13, 1985, 85-1
CPD P 682; Marvin Eng. Co., B-214889, July 3, 1984, 84-2 CPD P 15.
Rather, the burden is on the offeror to submit an initial proposal that
is written adequately. Metric Sys. Corp., B-218275, supra.
Our review indicates that Twin City's mini-network consisted of a
flow chart showing in calendar days the sequence of accomplishing the
major construction tasks, and failed to include any information
regarding Twin City's proposed manpower and equipment. Since the RFP
specifically required that the mini-network include such information and
expressly stated that the elements of the mini-network along with the
proposed time frame would comprise 50 percent of the evaluation, the
Corps' determination to reject Twin City's proposal was consistent with
the stated evaluation scheme.
Twin City's argument that the omitted information is immaterial, and
that the Corps evaluation therefore was unreasonable, lacks merit since
the information clearly relates to the offeror's ability to perform the
work as required by the solicitation within the proposed time frame.
The notion that the Corps should be compelled to select a contractor
based only on price and the proposed time schedule, notwithstanding that
the solicitation specifically requested details regarding manpower and
equipment, demonstrates a misunderstanding of contracting by
negotiation, in which the evaluation of technical factors must be based
on information contained in the proposal. E.g., Pharmaceutical Sys.,
Inc., B-221847, May 19, 1986, 86-1 CPD P 469. No matter how capable an
offeror may be, it runs the risk of having its proposal rejected if it
does not submit an adequately-written proposal. See Health Management
Assocs. of America, Inc., B-220295, Jan. 10, 1986, 86-1 CPD P 26. The
complete lack of information regarding manpower and equipment deprived
the Corps of any basis to evaluate Twin City's understanding, expertise,
and resources to perform the work in comparison to the other offerors.
This informational deficiency alone could have provided a reasonable
basis for the Corps' scoring and rejection of Twin City's proposal
without discussions. See Western Graphtec, Inc., B-212971, May 14,
1984, 84-1 CPD P 517; Fed. Home Maintenance, B-214609, Mar. 27, 1984,
84-1 CPD P 363.
The record does indicate that Groathouse's proposal had some of the
same weaknesses as Twin City's proposal--Groathouse proposed to place
the floor slabs before the roofing was completed, and its project
history included only one project of $4,000,000 or more. This fact does
not mean that Twin City's proposal was evaluated unreasonably or
unfairly, however, since Groathouse's proposal did not have
informational deficiencies like Twin City's regarding manpower and
equipment. Further, Groathouse's proposal itself received only 490
points out of a possible 600 points for Schedule and Previous
Experience, which indicates that points were deducted for its
weaknesses.
Regarding the reinforcing steel, the protester has offered no
evidence to show that the Corps' concern about the steel's availability
was unreasonable except to include the subcontractor's letter assuring
that the steel was available. This letter was not a part of the
proposal, and the Corps had no duty to conduct discussions to inquire
about the steel's availability after Twin City's proposal properly was
excluded from the competitive range. See Instructional Development
Corp.--Request for Reconsideration, B-220935.4, Dec. 13, 1985, 85-2 CPD
P 664.
Twin City argues that the Corps disregarded the fact that Twin City's
price was less than Groathouse's. This factor was taken into account in
the scoring of proposals, and Twin City's proposal still was only the
fourth-ranked one. Since the proposal otherwise was unacceptable in
comparison to the three higher ranked proposals, its lower price did not
require that it be included in the competitive range. See Delcor Int'l,
B-221230, Feb. 13, 1986, 86-1 CPD P 160.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-222454 DATE: July 3, 1986
MATTER OF: Mainmark Associates, Ltd.
DIGEST:
A restriction limiting offerors to proposals to furnish office space
divided on not more than two contiguous floors is not shown to be unduly
restrictive when the protester does not submit evidence overcoming the
contracting agency's prima facie showing that the restriction is needed
to promote office efficiency and security.
Mainmark Associates, Ltd. (Mainmark), protests the solicitation
requirements of solicitation for offers (SFO) NEG-SMD-502 issued by the
General Services Administration (GSA). The SFO calls for 19,000 net
square feet of office space to house the 9th Marine Corps District
Headquarters, but restricts consideration to buildings in which this
space is located on no more than two contiguous floors. Mainmark
contends that this limitation unduly restricts competition and excludes
its property from consideration.
We deny the protest.
The building Mainmark seeks to have considered consists of 19,000
square feet on four floors, including a basement level. The contracting
officer has notified Mainmark that the property, which GSA inspected
prior to issuing the SFO, does not meet the two-floor requirement and
cannot be considered. Mainmark contends that the solicitation is unduly
restrictive in that it excludes bidders who could furnish the required
square footage, but who cannot do so on only two floors.
In response to allegations of restrictiveness, a procuring agency
bears the burden of presenting prima facie support for its requirement
by presenting evidence that the restriction is necessary to meet its
actual minimum needs. DSP Technology, Inc., B-220593, Jan. 28, 1986,
86-1 CPD P 96. According to GSA, the restriction is justified in this
instance because the Marine Corps requires office space located on no
more than two contiguous floors in order to insure operational
efficiency. GSA notes that contiguous space restrictions are not new
for facilities leased for the Marine Corps and have heen imposed here
because the use of less restrictive arrangements tends to make staff
supervision and informal meetings more difficult. In addition, GSA
reoorts that security would he diminished without the restriction
because it would be more difficult to control access to four floors than
to only two floors.
In our view, GSA has established prima facie support for restricting
consideration to buildings for which the 19,000-square-foot area
requirement can be met by leasing no more than two floors. The
government's view that scattering of employees can adversely affect
office efficiencv and security is reasonable on its face. Moreover,
divided equally between two floors, the space requirement can be met by
two areas, each with dimensions of only 100 x 100 feet per floor (100
ft. by 100 ft. x2 floors would yield 20,000 square feet). Five
organizational units of the 9th Marine Corps Headquarters staff are to
be located in this soace. The Marine Corps would prefer a single-floor
layout, but has agreed with GSA that its five units can be divided
between two floors. To allow offerors to divide the small area required
among four floors, increasing the likelihood that organization units
must be split and that personnel will he scattered, can reasonably be
viewed as making no sense if alternative properties are available at
reasonable prices. The record shows that GSA has identified 10 sites
that do meet the requirement.
Since GSA has established prima facie support for the disputed
requirement, the burden shifts to Mainmark to show that the requirement
in dispute is unreasonable. Logistical Support, Inc., B-208763, Apr.
22, 1983, 83-1 CPD P 436. Mainmark disagrees with the agency's
two-floor restriction, but has submitted no evidence to establish that
the restriction is unreasonable. Of course, the mere fact that a
protester disagrees with an agency's conclusions regarding its needs
does not make the determination unreasonable. Lanier Business Products,
Inc., B-212072, Jan. 23, 1984, 84-1 CPD P 94.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Israel Military Industries
File: B-222448.6
Date: May 19, 1987
DIGEST
An invitation for bids may be canceled after bid opening and the
exposure of bid prices when a compelling reason exists for doing so.
Agency has a compelling reason to cancel the invitation where agency
determines that solicitation requirements fail to reflect the agency's
need because a required product is no longer available and award based
on revised requirement is expected to result in lower overall price to
the government.
DECISION
Israel Military Industries (IMI) protests the post-bidopening
cancellation of invitation for bids (IFB) No. DAAH01-86-B-0002, issued
by the Department of the Army for a specified quantity of launchers (LAU
68 D/A launchers and LAU 61 C/A launchers) for the HYDRA 70 Rocket
System. IMI also protests the Army's decision to resolicit the
requirements. We deny the protest.
The solicitation was issued on October 7, 1985, and, as amended,
established February 6, 1986, as the bid opening date. Seven bids were
received with Urdan Industries, Ltd., and IMI the apparent low and
second low bidders, respectively. Urdan apparently withdrew its bid1/
and IMI then became the lowest responsive bidder subject to a preaward
survey. On August 27, 1986, IMI was advised that it was found to be
nonresponsible because the firm had not obtained a price quote for
RX-2370A, the required thermal coating compound. On September 4, IMI
filed an agency-level protest challenging the nonresponsibility
determination. Without resolving the merits of the protest, the
contracting officer issued an amendment on December 23 canceling the IFB
because of "significant changes in the solicitation requirements and the
specifications." On January 2, 1987, and February 5 and 19, the agency
published notice in the Commerce Business Daily of its intent to solicit
rocket launchers at increased quantities, including the rocket launchers
required under the canceled IFB. This protest by IMI followed.
The thrust of IMI's protest is that the Army lacks any cogent or
compelling reason to cancel the solicitation some 10 months after bid
opening. IMI argues that the agency's alleged justification for
cancellation, i.e., significant changes in the solicitation requirement
and the specifications, is a subterfuge designed to avoid awarding the
contract to the firm and that such actions should not be sanctioned by
our Office. IMI requests that the original solicitation be reinstated
and the contract awarded to it as the lowest responsive, responsible
bidder.
The Army responds that cancellation of the original solicitation was
premised on several factors: (1) a technical deficiency in the
specifications made the original specifications obsolete; (2) revisions
to the specifications would significantly lower prices; and (3) a
significant increase in the item quantity is needed.
The specifications required that bidders furnish a thermal coating
compound, RX-2370A, which is on the qualified product list (QPL) for
MIL-C-81945 and which is produced by only one manufacturer, Phizer, Inc.
The agency reports that the contracting officer learned subsequent to
bid opening that Phizer discontinued the manufacture of RX-2370A because
it contains asbestos, a known carcinogen. The contracting officer was
further advised that Phizer was offering a nonasbestos thermal compound,
RX-2390 as a replacement product but that this compound had to be
evaluated for purposes of determining if it could be included on the QPL
for MIL-C-81945. (QPL approval of the replacement compound is expected
for the new IFB). The contracting officer concluded that the agency's
needs, as identified by the specifications, could not be met and any
contract awarded thereunder could not be performed.
Additionally, the agency asserts that cancellation was also based on
cost data obtained from Phizer in October 1986 which indicated that use
of RX-2390 in lieu of the discontinued RX-2370A compound would
significantly reduce the production cost of each launcher because the
new compound was less expensive. Specifically, the Army reports that by
letter dated October 2, the Army requested that Phizer provide cost
estimates for the two compounds in quantities of 80,000 to 100,000
pounds shipped in 55 gallon drums. In an October 6, 1986, letter
received from Phizer, that firm's quote for 80,000 to 100,000 pounds of
RX-2390 packaged in 55 gallon drums was $8.95 per pound as compared to
$14.92 per pound for RX-2370A. It further advised that RX-2370A was no
longer in production. The Army states that the net price difference
between these two products would lower the cost of each LAU 68 D/A
launcher by $130, and for each LAU 61 C/A by $206, for a total decrease
in production quantity cost of approximately $628,326. Moreover, the
agency notes that Phizer stated that it had quoted RX-2370A at $25 per
pound in "late r 1985." The agency was unable to determine if any bids
received were based on the $25 per pound quote. In any event, the
contracting officer decided that in order to minimize any prejudice to
bidders, occasioned by the disparity in price quotes given by Phizer,
and because of the expectation of lower prices, the IFB would be
canceled and the specifications revised to incorporate the less
expensive substitute compound which would meet the government's actual
needs.
An IFB may be canceled after bid opening only when there is a cogent
and compelling reason to do so. Federal Acquisition Regulation (FAR),
48 C.F.R. Sec. 14.404-1 (a)(1) (1986). We will not question a
contracting officer's decision to cancel so long as it reflects a
reasoned judgment based upon the investigation and evaluation of
information available at the time the decision is made. Mid Atlantic
Communications, B-221277, Mar. 27, 1986, 86-1 C.P.D. P 294 at 3. Where
it is determined that the specifications contained in an IFB do not
adequately describe the government's actual needs or an agency finds
after bid opening that the needs of the government can be satisfied by a
less expensive method differing from than on which bids were solicited,
the best interests of the government requires cancellation of the IFB.
International Trade Overseas, Inc., B-221824, Apr. 1, 1986, 86-1 C.P.D.
P 310; Uffner Textile Corp., B-204358, Feb. 8, 1982, 82-1 C.P.D. P 106.
In its response to the agency report, the protester concedes that if,
in fact, the price for the new compound is less than the price for the
old compound, the contracting officer would have a compelling reason to
cancel since any award based on bids originally received could result in
the awardee obtaining a windfall profit through use of the lower priced
compound. However, IMI disputes the agency's position that RX-2390 is a
lower priced substitute compound.
The protester has provided an affidavit from the individual within
Phizer with primary responsibility for issuing price quotations for the
thermal compound, which that person states that the price for RX-2390,
"quantity, packaging and other factors being equal" will be more than
the price for RX-2370A, the discontinued compound. Thus, the affidavit
seems to contradict the same individual's October 6, 1986, price
quotation to the Army for RX-2370A and RX-2390, since he now indicates
the original compound is less expensive than the replacement compound.
The record establishes that the Army reasonably determined that its
present need could be met by the use of RX-2390, a substitute thermal
coating compound which was not a requirement of the original IFB, and
that the original compound is no longer available. The agency, in our
view, properly relied upon the pricing information submitted to it by
Phizer in concluding that an award under the original solicitation would
result in bidders being treated unfairly and disparately and be more
costly to the government.
In its letter of October 6, 1986, Phizer represented its January 1986
cost estimates for RX-2370A varied from $14.92 to $25 per pound and that
its present cost estimate for RX2390 was $8.95 per pound. In conjunction
with its protest, IMI has submitted an affidavit of March 13, 1987,
regarding the price estimate for the two compounds which now appears to
contradict what Phizer advised the Army in October and on which the Army
relied to justify cancellation of the IFB. Phizer's employee does not
explain this seemingly contradictory information. There is no
suggestion in the record that the agency had reason to question Phizer's
initial pricing information which it was advised would be used for
government estimates of the rocket launchers. We thus conclude that the
contracting officer reasonably relied on Phizer's letter of October 1986
and had a reasonable basis to cancel the IFB based on the expected
reduced prices for the launchers by requiring use of the replacement
compound.
Finally, IMI contends that instead of canceling the IFB because an
additional quantity of rocket launchers are needed, the Army should
issue a separate solicitation for the additional requirements above
those contained in the original IFB as contemplated by FAR, 48 C.F.R.
Sec. 14.4041(a) (3). However, in view of our finding that cancellation
of the IFB was proper based on the agency's reasonable expectation of
reduced prices for the launchers, we need not consider whether the other
grounds relied on by the Army also provided a proper basis for
cancellation. NDT-1, Inc., B-220570, Nov. 20, 1985, 85-2 C.P.D. P 576.
The protest is denied.
Harry R. Van Cleve
General Counsel
FOOTNOTE
1/ Initially, both Urdan's and IMI's bids were rejected by the Army
as nonresponsive for reasons not germane to this protest and both firms
protested the agency's action to our Office. Before resolution of the
protests, the Army reversed its position and we therefore dismissed the
protests.
Matter of: Micronesia Media Distributors, Inc.
File: B-222443
Date: July 16, 1986
DIGEST
1. Agency properly rejected proposal because of failure to propose
adequate staffing since curing the deficiency would have required a
major rewrite of the proposal.
2. Since the agency's technical evaluation in a negotiated
procurement is based upon information submitted with the proposal, the
burden is on the offeror to submit an adequately written proposal from
the outset.
DECISION
Micronesia Media Distributors, Inc. (MMD), protests the rejection of
its proposal under request for proposals (RFP) No. F64719-85-R-0082,
issued by the Air Force Contracting Center, Clark Air Base, Republic of
the Philippines, for the distribution and sale of the Pacific Stars and
Stripes (PSS) newspaper and PSS-selected books/periodicals in the
Philippines, Thailand, Indonesia, and Diego Garcia. 1/ MMD's offer was
rejected for failure to: (1) provide adequate staffing; (2) indicate
the required experience in periodical/bookstore operation; and (3)
adequately address proposed operating expenses. MMD complains that it
was unfairly evaluated in each of those respects.
We deny the protest.
The RFP sought a contractor, on a firm, fixed-price basis, to operate
and maintain a far flung publications distribution network, 7 days a
week, for PSS. The contractor is responsible for a large inventory of
PSS publications, facilities, property, equipment and vehicles. The
contractor also must promote the sale of PSS publications.
The RFP, as amended, provided for a joint Air Force/PSS evaluation of
the offers on the basis of three technical factors, in descending order
of importance: experience, organization, and operation. Offerors were
advised to address each of the three technical factors in their
proposals by submitting (1) a detaiied narrative of prior business
experience; (2) a detailed organizational plan listing employees for
each function at each location, employee experience levels, and
anticipated salary levels; and (3) a detailed marketing plan showing
innovation, practicality and consideration of market environment,
regulations and resources.
The RFP provided for award to the technically acceptable, responsible
offeror with the lowest evaluated price. Also, the RFP urged offerors
to inspect the sites where the services were to be performed.
The Air Force itself initially evaluated MMD's proposal, which
offered the lowest price of the three received, and had serious concerns
about MMD's proposed levels of manning and pay. The Air Force was
fearful that MMD's proposed field operations would not have sufficient
personnel to handle the volume of business anticipated. Nevertheless,
the Air Force contemplated an award to MMD on the basis of its lowest
overall price. PSS, however, did not agree with the Air Force
conclusion and argued that MMD was technically incapable of performing
the required services. Upon considering PSS's objections and in view of
its own initial concerns, the Air Force rejected MMD's offer.
We first note that the Air Force uses the concept of
nonresponsibility as well as that of technical acceptability in
describing why it rejected MMD's offer, and MMD accordingly does the
same in its protest. Responsibility involves capability to perform the
work. Federal Acquisition Regulation, 48 C.F.R. Sec. 9.1039(b) (1984).
A determination as to technical acceptability, however, involves the
graded assessment of the relative merits of individual proposals, see
Sea-Land Service, Inc., B-219665, et al., Dec. 17, 1985, 85-2 C.P.D. P
677, although technical evaluation criteria may include what otherwise
would be traditional responsibility factors. See Wickman Spacecraft &
Propulsion Co., B-219675, Dec. 20, 1985, 85-2 C.P.D. P 690.
Responsibility arises only after the evaluation of proposals is
completed and the prospective contractor is selected. Marine Design
Technologies, Inc., B-221897, May 29, 1986, 86-1 C.P.D. P 502. It is
clear from the protest record that MMD's offer was found technically
unacceptable.
MMD raises several objections to the rejection of its offer stressing
that it submitted the lowest price. We need only discuss what MMD
admits was the primary basis for its exclusion--faiiure to understand
the number of personnel required--since it is dispositive of the
protest.
MMD concedes that it proposed insufficient personnel. MMD contends,
however, that the manning problems and shortage reflected in its offer
resulted from the Air Force's failure to fuifill an alleged oral
promise, made after MMD initially submitted its offer, to provide a tour
of all of the sites where the contract wouid be performed. MMD argues
that it cured the deficiency when it then promised that it would use the
same level of staffing as the incumbent contractor, until it could study
the matter. MMD argues that it was entitled to resolve this, and any
other deficiencies, through further negotiations and the submission of a
best and final offer.
Proposal evaluation is a matter within the contracting agency's
discretion, because it is that agency that is responsible for
identifying its needs and the best methods of accommodating them. Joule
Technical Corp., B-197249, Sept. 30, 1980, 80-2 C.P.D. P 231. Our
Office therefore will not question the contracting agency's evaluation
of a proposal absent a showing that the agency's determination was
unreasonable. Ecological Consulting, Inc., B-208539, Feb. 14, 1983,
83-1 C.P.D. P 151.
We see nothing improper in the rejection of the protester's offer.
The RFP clearly provided for a joint Air Force/PSS evaluation of
proposals. While the Air Force alone initially found MMD's proposal
acceptable, despite certain concerns, this was not the result of a joint
evaluation, and PSS took strong exception to the Air Force
determination. As indicated above, MMD's proposal was rejected
primarily for its failure to provide adequate staffing, and MMD, in the
protest, admits that the proposal was deficient in that respect. Since
curing the deficiency would have required a major rewrite of, MMD's
proposal--which MMD claims it cannot undertake until it has studied the
matter further--the offer propoerly was rejected. See Potomac
Scheduling Co.; Axxa Corp., B-213927, et al., Aug. 13, 1984, 84-2 C.P.D.
P 162. Moreover, once an offer properly warrants being rejected, the
contracting agency has no duty to conduct further negotiations with the
firm, including requesting a best and final offer. Science
Applications, Inc., B-193229, May 23, 1979, 79-1 C.P.D. P 369.
We also find no merit in MMD's contention that the inadequacies in
its proposal were the result of the Air Force's failure to fulfill an
alleged oral promise, made to MMD before PSS's input into the
evaluation, to provide a tour of all of the sites where the contract
would be performed. The RFP expressly stated that offerors were urged
and expected to undertake site visits, yet MMD chose to submit its
proposal having visited only one of the numerous sites covered by the
contract. In a negotiated procurement the burden is on the offeror from
the outset to submit an offer that is acceptable on its face, or
reasonably susceptible of being made acceptable. Marvin Engineering
Co., Inc., B-214889 July 3 1984 84-2 C.P.D. P 15. The fact that the Air
Force may have intimated to MMD, at a point after the firm submitted its
initial offer, that sites still could be visited does not excuse MMD's
submission of what, on further government evaluation, was found not to
be an adequately written initial proposal because MMD did not really
understand the government's staffing requirements.
The protest is denied.
Harry R. Van Cleve
General Counsel
FOOTNOTES
1/ The Air Force is conducting this procurement on behalg of PSS, a
nonappropriated fund instrumentality. Our Office has jurisdiction to
decide such protests under section 2741 of the Competition in
Contracting Act of 1984, 31 U.S.C. Sec. 3552 (Supp. II 1984). Artisan
Builders, B-220804, Jan. 24, 1986, 65 Comp. Gen. , 86-1 C.P.D. P 85.
Matter of: Kreonite, Inc.
File: B-222439
Date: July 11, 1986
DIGEST
1. Agency decision to negotiate, requesting competitive proposals in
lieu of sealed bids, is justified where the agency forsees a need for
discussions and the basis for award reasonably includes technical
considerations in addition to price and price-related factors.
2. Protest that solicitation is defective because it does not contain
evaluation criteria stating the relative importance of agency's
requirements is denied where the solicitation advises offerors of the
basis upon which award will be made, states the agency's minimum
requirements and the importance of those requirements.
3. Agency's requirement for stainless steel photographic processor
tanks does not unduly restrict competition where agency establishes
prima facie case that the restriction is legitimately related to its
minimum needs and protester, while disagreeing with the agency's
technical judgment, fails to clearly show that the agency's
determination of its minimum needs has no reasonable basis.
DECISION
Kreonite, Inc. (Kreonite) protests defects in request for proposals
(RFP) No. F42600-86-R-71090 issued by the Air Force. The RFP solicited
photographic processors end other associated items primarily for use in
mobile vans and portable shelters by military intelligence activities.
The RFP also solicited a variety of support and technical services for
this equipment. Four proposals, including Kreonite's proposal, were
received in response to the RFP. 1/
Kreonite contends that the Air Force improperly failed to apply
sealed bidding procedures to the procurement, which instead requests
proposals under negotiated procedures. Kreonite also contends that the
solicitation evaluation scheme is defective and that the requirement for
stainless steel processor tanks unduly restricts competition.
We deny the protest.
Kreonite contends that since the processors solicited are commercial
products available under Federal Supply Schedule (FSS) contracts at
listed prices, award should be made on the basis of price under sealed
bidding procedures.
The Air Force responds that while the processors are available under
FSS contracts from two contractors, the solicitation also requires
support and technical services which cannot be procured under FSS
contracts. Further, the Air Force explains that technical proposals are
required to demonstrate that the numerous technical requirements
contained in the solicitation statement of work will be met. The Air
Force maintains that the evaluation of technical proposals and
discussions will enable it to assure the contractor's full understanding
of these requirements and identify and revise any problem areas.
We do not find that the Air Force acted improperly. While the
Competition in Contracting Act of 1984 (CICA) eliminates the statutory
preference for procurement by formal advertising (now sealed bids), the
statute provides specific criteria for determining whether sealed bids
or competitive proposals should be requested. See 10 U.S.C.A. Sec.
2304(a)(2)(A) (West Supp. 1986). Specifically, sealed bidding is
required if:
"(i) time permits the solicitation, submission, and evaluation
of sealed bids;
"(ii) the award will be made on the basis of price and other
price-related factors;
"(iii) it is not necessary to conduct discussions with the
responding sources about their bids; and
"(iv) there is a reasonable expectation of receiving more than
one sealed bid...."
We do not agree with the protester that the circumstances here
mandate the use of sealed bids. Such use is proper where the award will
be made on the basis of price and price-related factors. The basis for
award here is not limited to price-related factors; the Air Force also
seeks technical proposals demonstrating that the equipment offered will
meet the agency's stated requirements. This was a first time
competitive procurement of these items end the solicitation was sent to
six processor manufacturers, only two of which held FSS contracts. The
Air Force decision was based on the need to assure that all offerors'
proposed equipment met the statement of work. Under these
circumstances, we will not question the Air Force's judgment that a
negotiated procurement with an opportunity for discussions is warranted.
See The Saxon Corp., B-221054, Mar. 6, 1986, 86-1 C.P.D. P 225; Essex
Electro Engineers, Inc., B-221114, Jan. 27, 1986, 65 Comp. Gen. , 86-1
C.P.D. P 92. This was a business judgment by the contracting officer
that Kreonite has not shown to be unreasonable.
Next, Kreonite refers to paragraph 1.3 in the solicitation statement
of work which reads as follows:
"... This equipment will be used in the military intelligence
environment and as such will be required to operate under heavy
usage with maximum reliability and less than optimum maintenence
available at many locations. This equipment will be deployed
world wide and will therefore be subject to temperature extremes
in shipment and storage. Frequent movement and handling of
machines for depot overhaul or redeployment is required and
therefore machines and their components must not be sensitive to
vibration or impact encountered during such movement. Equipment
operated in a military environment must be more durable than
equipment operated in a commercial environment. In order to meet
these requirements stainless steel construction to include tanks,
rackwalls and major structural components shall be utilized to the
maximum extent possible in lieu of plastics in these areas to
insure extended usage life and serviceability under all
conditions."
Kreonite complains that the solicitation fails to instruct offerors
how to meet the requirements in this paragraph. For instance, Kreonite
states that while, under the terms of this paragraph, the contractor is
required "to insure an extended usage life and serviceability under all
conditions," the solicitation provides no "standards" as to how to meet
this requirement. Kreonite also believes that the solicitation should
contain technical evaluation factors to inform offerors of the relative
importance of the Air Force's "general statements of requirements"
contained in this paragraph.
The Air Force responds that the solicitation advises offerors that
award will be made to the responsible offeror whose offer, conforming to
the solicitation, will be most advantageous to the government, cost or
price and other factors specified in this solicitation considered.
Based on this language, the Air Force intends to make award to the
lowest priced offeror meeting the agency's minimum needs contained in
the statement of work. In this regard, the Air Force points out that
the statement of work contains minimum technical requirements for each
processor including minimum requirements for adapters, chemical mixing
blend systems, chemical storage, processing times and spare parts kits.
Further, with respect to Kreonite's assertion that the soiicitation
fails to instruct offerors how to "insure extended equipment usage
life," the Air Force points out that paragraph 1.3 clearly advises
offerors that processor tanks, rackwalls and major components
constructed of stainless steel will meet the agency's requirements.
We find no impropriety with respect to the Air Force's evaluation
scheme. Men a soiicitation specifies that award will be made on the
basis of "price and other factors," award must go to the lowest-priced
responsible offeror whose proposal is determined technically acceptable.
Pikes Peak Water Co., B-211984, Mar. 16, 1984, 84-1 C.P.D. P 315; Los
Angeles Community College District, B-207096.2, Aug. 8, 1983, 83-2
C.P.D. P 175. The Air Force proposes to make award on this basis here.
Further, we find that paragraph 1.3 adequately advises offerors of
the agency's requirements and their importance. The paragraph clearly
states the agency's need for certain stainless steel processor parts end
explains the agency's reasons for requiring primarily stainless steel
components. For instance, the paragraph states that stainless steel
will more readily withstand temperature extremes to which the processors
will be exposed and, thus, the use of stainless steel components
enhances equipment durability. This paragraph places offerors on notice
that processors with certain stainless steel parts are required and we
fail to see how specific evaluation criteria would help offers in
meeting this requirement. In our view, the solicitation, which informs
offerors of the basis upon which proposals will be evaluated, states the
agency's minimum technical requirements, and the reasons for those
requirements, provides offerors with adequate information to prepare
their proposals. See Pikes Peak Water Co., B-211984, supra.
The remaining issue concerning paragraph 1.3 is Kreonite's contention
that the requirement for stainless steel processor tanks was "contrived
so as to achieve a sole source to Hope Industries, Inc." which
manufactures processors with stainless steel tanks. Kreonite, which
apparently offers some stainless steel parts, but plastic processor
tanks, argues that the Kreonite plastic tanks are equal or superior to
the Hope stainless steel tanks. In support of this, Kreonite has
submitted technical data from Kreonite engineers which essentially
explain the advantages of Kreonite processors over Hope processors. For
instance, Kreonite states that "while it is true that the Hope
stainless steel tanks have a higher tensile strength than the Kreonite
plastic tanks ... the Kreonite tanks have greater impact resistance"
than stainless steel tanks.
The Air Force responds that in the past plastic processor tanks have
been subject to "melt down" as a result of defective temperature control
units or have cracked from rough handling during transport, and that it
decided it would be more economical to procure steel tanks which would
better "withstand the abusive environment experienced by government
organizations in the field." Thus, while the Air Force does not dispute
that plastic type tanks are in some respects more desirable than steel
tanks (for instance, the Air Force states plastic tanks are lighter than
steel tanks), the agency maintains that, for its purposes, the steel
tanks are better suited.
The determination of the government's minimum needs, the method of
accommodating those needs, and the technical judgments upon which those
determinations are based are primarily the responsibility of the
contracting agency. Herblane Industries, Inc., B-215910, Feb. 8, 1985,
85-1 C.P.D. P 165. The agency is most familiar with the conditions
under which the goods have been used in the past and will be used in the
future. We therefore will not question an agency's determination of its
minimum needs unless there is a clear showing that the determination has
no reasonable basis. Eaton Leonard Corp., B-215593, Jan. 17, 1985, 85-1
C.P.D. P 47. However, when a protester challenges a specification as
unduly restrictive of competition, it is incumbent upon the agency to
establish prima facie support for its contention that the restrictions
are reasonably related to its actual needs. Men the agency has
established this support, the burden is on the protester to show that
the requirements complained of are arbitrary or otherwise unreasonable.
Allied Materials and Equipment Co., Inc., B-219528, Oct. 24, 1985, 85-2
C.P.D. P 457; Syva Co., B-218359.2, Aug. 22, 1985, 85-2 C.P.D. P 210.
In this regard, specifications based upon a particular product are
not improper in and of themselves, and a protest that a specification
was "written around" design features of a competitor's product fails to
provide 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 C.P.D. P 43. A specification is not
improper merely because a potential bidder cannot meet its requirements.
UNICO, Inc., B-217255, Aug. 7, 1985, 85-2 C.P.D. P 138; Tooling
Technology, Inc., B-215079, Aug. 6, 1984, 84-2 C.P.D. P 155.
We find that the Air Force has established a prima facie case for
requiring stainless steel processing tanks. The agency has determined
that stainiess steel tanks provide maximum reliability for the military
intelligence users of this equipment. The military intelligence users
of this equipment have found that plastic tanks, when subject to
temperature extremes or vibration, melted or cracked, while steel tanks
were better able to withstand the adverse conditions to which they had
been exposed and were relatively maintenance free.
While the protester disagrees with the Air Force that plastic tanks
are less reliable than steel tanks, it does not deny that certain
disadvantages to plastic tanks exist, but rather explains that there are
iimits to these disadvantages. For instance, Kreonite concedes that
plastic has lower strength than stainless steel, but indicates that the
plastic tanks are able to withstand a 30 foot fall. Further, while the
Air Force states plastic tanks may be flammable, Kreonite contends its
plastic tanks did not burst into flames when the tanks are subjected to
a propane torch.
Even accepting these statements by the protester, they do not show
that plastic tanks are as suitable as stainless steel tanks for the Air
Force's purposes. In our view, it is reasonable, given the Air Force's
need for reliable, durable and relatively maintenance free equipment
that the agency procure the strongest, most heat resistant material it
can obtain. See Allied Materials and Equipment Co., B-219528, supra.
Therefore, we do not find unreasonable the Air Force's decision to
restrict the procurement of processor tanks to stainless steel tanks.
Finally, Kreonite complains that while the Air Force indicated on the
solicitation cover sheet that this procurement was "restricted," it
failed to provide statutory justification by checking the appropriate
box on the cover sheet for using other than competitive procurement
procedures. Although the record shows that initially the procurement
was to be restricted to known sources, in fact, the solicitation was
issued to all interested sources (14 solicitation packages were issued)
end no source was precluded from submitting an offer. Therefore, we
have no basis to conclude that the procurement was "restricted."
The protest is denied.
Harry R. Van Cleve
General Counsel
FOOTNOTES
1/ We note that in October 1985, the Air Force published a notice in
the Commerce Business Daily announcing its intent to enter into a
sole-source contract for the processors with Hope Industries, Inc. In
response to this notice, Kreonite protested the intended sole-source
award arguing that Kreonite could provide the solicited processors. As
a result, the Air Force issued the present solicitation under
competitive procedures.
FILE: B-222437 DATE: July 1, 1986
MATTER OF: Webb Designs, Inc.
DIGEST:
1. Protest that a competitor allegedly used the protester's
proprietary bid samples, descriptive literature and testing data in its
bid without the protester's consent constitutes a dispute between
private parties that is not for consideration under General Accounting
Office Bid Protest Regulations.
2. Allegation that competitor's bid was nonresponsive because the bid
samples submitted by the competitor were proprietary to protester is
denied, where bid unequivocally offered to provide product conforming to
specification requirements and the contracting officer had no knowledge
that the bid samples allegedly belonged to the competitor.
3. Allegation that bid is nonresponsive because it did not contain
bid sample of certain item is without merit where solicitation did not
specifically require sample of item.
4. Protest that the product to be supplied will not comply with the
specifications is a matter of contract administration for consideration
by the agency, not General Accounting Office.
5. Allegation that awardee lacked ability to perform the contract
concerns the bidder's responsibility, the affirmative determination of
which is not considered by General Accounting Office except under
limited circumstances not present here.
Webb Designs, Inc. (Webb), protests the March 10, 1986, award of a
contract to Gary Raub & Associates (Raub), the low offeror, under
request for proposals (RFP) 600-72-86, issued by the Veterans
Administration (VA) Medical Center, Long Beach, California. The
solicitation was a total small business set-aside which sought offers
for a woven blind automatic leveling system. Webb contends that Raub's
offer should have been rejected as nonresponsive 1/ to the solicitation
requirements. Webb also argues that Raub was not a responsible offeror.
The protest is dismissed in part and denied in part.
Initially, Webb contends that Raub improperly used Webb's proprietary
samples of the woven blind in its bid. Webb asserts Raub removed Webb's
label, affixed its own name and represented that the submitted samples
were its (Raub's) own. Also, Webb contends that Raub misappropriated
and converted for Raub's use the descriptive literature concerning the
automatic leveling system developed by Webb, which was Webb's
proprietary data. Webb also argues that Raub misappropriated a Webb
proprietary report received from the United States Testing Company
(USTC) regarding fire retardancy tests conducted on the Webb "Curaflame"
woven blind and submitted the report to the contracting officer,
representing that it belonged to Raub.
A competitor's alleged use of another firm's proprietary data or
information presents a dispute between two private parties that is not
for consideration under our Bid Protest Regulations. See Austin
Company, Advanced Technology Systems, B-212992, Mar. 1, 1984, 84-1
C.P.D. P 257, and SETAC, Inc., B-209485, July 25, 1983, 83-2 C.P.D. P
121. The courts, rather than this Office, are the appropriate forum to
determine the rights of the parties regarding proprietary data. See
Telemechanics, Inc., B-203428, B-203643, B-204354, Oct. 9, 1981, 81-2
C.P.D. P 294. Thus, we dismiss Webb's allegations that Raub improperly
used Webb proprietary information in its bid.
Webb also asserts that since Raub did not submit its own samples of
the woven blind, but used samples produced by Webb, Raub's bid should be
rejected as nonresponsive. We disagree. Responsiveness concerns
whether a bidder has offered unequivocally to provide supplies and
services in conformity with the material terms and conditions of the
solicitation. See Power Test, Inc., B-218123, Apr. 29, 1985, 85-1
C.P.D. P 484. The record indicates that Raub submitted these samples
which were labeled as belonging to Raub. The contracting officer had no
basis for a finding that the samples submitted by Raub did not belong to
Raub and did not represent the characteristics of the items Raub
intended to supply under the contract. Thus, we deny this aspect of
Webb's protest.
Next, Webb alleges that Raub failed to submit a sample of the
automatic leveling system, a required feature of the blinds solicited,
before bid opening as required by the solicitation. Webb maintains that
without this sample there is no way to determine whether Raub's leveling
system complied with the specification requirement. However, the
solicitation did not require bidders to submit a sample of the automatic
leveling system. The standard bid sample clause, Federal Acquisition
Regulation (FAR), 48 C.F.R. Sec. 52.214-20 (1985), was included in the
solicitation. That section provides, in pertinent part, that "Bid
samples, required elsewhere in the solicitation, must be furnished as
part of the bid... ." Although the bid sample clause was included in the
solicitation, specific bid samples were not required anywhere else in
the solicitation. Thus, while certain bid samples were submitted by
bidders, there was no specific requirement that bidders provide a
leveling system sample.
Webb further alleges that Raub failed to submit descriptive
literature prior to bid opening as required by the solicitation. Raub
indicated in its bid, "Bid samples and descriptive literature submitted
under separate cover." The bid opening officer stated that he received
the descriptive literature, as well as the woven blind samples, at the
time of bid opening. Webb has not introduced any evidence disputing
this report, and we have no basis to question the VA's statement. See
Unico, Inc., B-216592, June 5, 1985, 85-1 C.P.D. P 641.
Webb contends that Raub will be unable to comply with the
solicitation requirement that the yarn for the blinds be Verel-Rayon and
Verel-Flax since Verel was a product which has been discontinued by the
manufacturer and Webb allegedly is the only firm which maintains an
inventory of this material for use in its woven blind material. Raub
did not take exception to this solicitation requirement. Therefore,
Raub is required to comply with this requirement. Whether it does so is
a matter of contract administration, for consideration and resolution by
the VA; it is not a matter cognizable under our Bid Protest
Regulations. See Spacesaver Systems, Inc., B-218581, May 8, 1985, 85-1
C.P.D. P 515.
Finally, Webb argues that Raub was a nonresponsible bidder because
Raub's use of Webb's samples and information clearly indicated that Raub
lacked the ability to perform the contract. Before awarding the
contract, the contracting officer necessarily determined that Raub was
responsible. See 48 C.F.R. Sec. 9.103 (1985). Our Office does not
review protests concerning affirmative determinations of responsibility
absent a showing of possible fraud on the part of procuring officials or
that the solicitation contained definitive responsibility criteria that
were not applied. See Joiner Van and Storage Service, Inc., B-218438,
Apr. 24, 1985, 85-1 C.P.D. P 469. Neither exception is alleged here.
This aspect of the protest is dismissed.
The protest is dismissed in part and denied in part.
Harry R. Van Cleve
General Counsel
FOOTNOTES
1/ We recognize that the solicitation designated the procurement as
an RFP and that the concept of responsiveness, which is associated with
formally advertised procurements, does not generally apply to negotiated
procurements. See, e.g., True Machine Co., B-215885, Jan. 4, 1985, 85-1
C.P.D. P 18. However, VA states that the contracting officer
erroneously designated this procurement as an RFP. Consequently, he
conducted this procurement as a sealed bid procurement without any
objection from the offerors or bidders.
Matter of: Ira T. Finley Investments
File: B-222432
Date: July 25, 1986
DIGEST
1. 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 proposals
and consistent with the criteria set forth in the solicitation.
Where the relevant factual information was correctly presented to
the selection official, technical rankings were not disturbed and
differences in technical point scores were not considered
determinative, a minor error in point scoring does not invalidate
the evaluation.
2. Requirement to conduct meaningful discussions does not
obligate agencies to identify every aspect of a technically
acceptable proposal that receives less than a maximum score,
particularly where the subject matter, the number of passenger
airline seats available at the local airport, does not appear to
be within the offeror's control.
3. Protest alleging that a solicitation contains an improper
evaluation criterion, or that it did not contain certain necessary
criteria, is untimely when it is not filed until after the closing
date for receipt of initial proposals.
4. Where a solicitation does not indicate in relative terms the
importance of cost, technical, and business management factors, it
must be presumed that each will be considered approximately equal
in weight.
DECISION
Ira T. Finley Investments protests the Federal Aviation
Administration's (FAA) proposed award to Embry-Riddle Aeronautical
University of a 20-year lease for the facilities and services needed to
support the agency's management training school.
The Mike Monroney Aviation Center, Oklahoma City, Oklahoma, issued
the solicitation for offers, No. DTFA-02-84-R-00584, on August 29, 1984,
with an amended closing date of January 15, 1985. Finley primarily
contends that the FAA failed to evaluate either its own or
Embry-Riddle's proposal properly.
We deny the protest in part and dismiss it in part.
BACKGROUND
The FAA has operated a management training school on the campus of
Cameron University in Lawton, Oklahoma, since 1971. For a variety of
reasons, including Cameron's desire to reclaim the dormitory space the
FAA occupies, the FAA sought new faciiities, including classrooms,
offices, a dining hall, and student housing. The soiicitation, issued
under authority delegated by the General Services Administration,
contemplates a 10-year lease with two 5-year option periods. In
addition to facilities, the contractor will provide building and grounds
maintenance, security, linen and maid service, desk services, student
housing, and meals.
The FAA received 10 proposals, all of which it included in the
competitive range. After advising offerors of the weaknesses and
deficiencies in their proposais and making factfinding visits to all
sites, the source evaluation board completed negotiations, requested
best and final offers, and submitted its findings to the source
selection official on September 3, 1985. That official selected
Embry-Riddle on the basis of its relatively low proposed price, the
excellent, low-risk nature of its business management proposal, and its
acceptable technical proposal. The FAA publicly announced its selection
on March 14, 1986, and sent written notices to the unsuccessful offerors
on March 18; Finley filed its protest here on March 24.
TECHNICAL CONSIDERATIONS
Finley first contends that the FAA did not evaluate technical
proposals in accord with either the criteria set forth in the
soiicitation or the agency's evaluation plan. The solicitation listed
six major factors (with a total of 31 subfactors) for consideration. In
descending order of importance, these were: location, facilities,
service plans, community resources, proximity to Department of
Transportation Headquarters in Washington, D.C., and procurement
preference programs plans, i.e., plans for subcontracting with small,
minority, and women-owned businesses. Of 1,000 possible technical
points, Embry-Riddle received 770, while the protester received 730.
According to Finley, the improper evaluation caused it to lose enough
points to affect its ranking materially. Finley asks that both its
proposal and Embry-Riddle's be reevaluated by independent, impartial
evaluators.
In reviewing protests against the propriety of a technical
evaluation, it is not the function of our Office independently to
evaluate proposals. AT&T Technology Systems, B-220052, Jan. 17, 1986,
86-1 CPD P 57. Rather, the determination of the relative desirability
and technical adequacy of offers is primarily a function of the
procuring agency, which enjoys a reasonable range of discretion. Id.
Consequently, we will question an agency's technical evaluation only
where the record clearly shows that it was conducted arbitrarily or
capriciously. Id. Furthermore, the protester has the burden of
affirmatively proving its case, and mere disagreement with a technical
evaluation does not satisfy this requirement. A.B. Dick Co.,
B-211119.3, Sept. 22, 1983, 83-2 CPD P 360, aff'd on reconsideration,
B-211119.5, Apr. 17, 1984, 84-1 CPD P 424.
We cannot conclude that in this case the agency's selection was
either arbitrary or capricious. While the agency arguably should have
awarded Embry-Riddle fewer points under the location criterion, this
would not have affected Finley's ranking vis-a-vis Embry-Riddle's in the
technical area. An item-by-item analysis of those portions of the FAA's
evaluation that Finley challenges follows.
Location
Finley questions the FAA's failure to give its proposal the maximum
score for location, arguing that its proposed site on the property of
the Lawton Municipal Airport is secluded, free from distraction, and
otherwise appropriate for a school.
The FAA downgraded Finley's proposal under the subcriterion "Retreat
Atmosphere" because its building site was near a light industrial area;
was close to a moderately busy highway; and, in the opinion of the
evaluators, appeared "stark, bare, and devoid of trees and shrubs."
Finley argues that the airport authority has agreed to establish a
general beautification program, a fact that evaluators recognized; they
noted, however, that Finley's proposal offered no information as to the
extent or timing of that effort. Judging by photographs in the file,
Finley's proposed site is a flat grassy lot located in a light
industrial area on the Lawton Municipal Airport property. By
comparison, Embry-Riddle's proposed location on several acres in the
Palm Coast planned community near Daytona Beach, Florida, is immediately
surrounded by trees. In the FAA's judgment, the Embry-Riddle site has a
retreat atmosphere that is highly conducive to study. Given these
considerations, we see no basis to question the FAA's evaluation of
either site. Finley's strong disagreement is not an adequate basis for
disturbing the evaluators' judgment.
Finley also objects to the FAA's evaluation of the distance from
Embry-Riddle's proposed site to the nearest commercial airport under
another location subcriterion. Finley points out that although
Embry-Riddle was evaluated on the basis of its facility being just 30
miles from Daytona Airport, the FAA's own source evaluation board report
states that EmbryRiddle's proposed site is 31.8 miles from the airport.
Finley also asserts that it visited the site, measured the distance to
the Daytona Airport on two separate occasions, and found that the
distance is actually 32.6 miles. Accordingly, Finley argues,
Embry-Riddle should have been given only 18 points--the score assigned
for sites located 31 to 40 miles from an airport--rather than the 36
points assigned for sites 21 to 30 miles from an airport.
The FAA responds that the source evaluation board report should have
stated that the Embry-Riddle site is 30 miles from the Daytona Airport.
The FAA reports that due to a mistake on the part of an individual
member of the evaluation team, the 31.8-mile distance was inadvertently
included in the source evaluation board report. Consequently, the FAA
contends, the correct distance was the 30 miles proposed by Embry-Riddle
and adopted by the FAA in its final evaluation.
Where the only evidence on an issue of fact is the conflicting
statements of the protester and contracting officials, the protester has
not carried its burden of proving the case. Xerox Special Information
Systems, B-215557, Feb. 13, 1985, 85-1 CPD P 192. Here, the FAA's own
source evaluation board report furnishes evidence supporting the
protester's allegation, even though the FAA now disavows that evidence.
Therefore, we must assess the facts on the basis of the entire record,
without benefit of presumption.
Judging from the maps Embry-Riddle furnished with its proposal, there
is only one direct route from the Daytona Airport to its proposed site,
since both are close to the same interstate highway. Just how the exact
distance between the two locations should be measured is not specified
in the solicitation, and it is possible to vary it depending on the
points between which the distance is measured, i.e., from (1) the
entrance to the airport property, (2) the airport parking lot, or (3)
the main door of the passenger terminal to the proposed facility. The
FAA advises that it used the map provided with Embry-Riddle's proposal
to measure the distance, but the scale of that map does not permit
measurement accurate enough to resolve this dispute.
Given this record, and taking into account the FAA's failure to
provide other information to substantiate its position, we adopt the
distance in the source evaluation board report, 31.8 miles. Even if we
use this figure, however, and subtract 18 points from Embry-Riddle's
total technical score, the firm still outranks Finley with 752 points,
compared with Finley's 730.
Also under the location criterion, Finley objects to the FAA's
evaluation of the number of passenger seats available on scheduled
airlines serving Lawton on weekdays. Finley argues that the number of
seats actually available is twice that stated in its proposal--414 each
for Monday, Tuesday and Wednesday and 476 each for Thursday and
Friday--because inbound seats should be counted separately from outbound
seats. 1/ Consequently, Finley argues, it should have been given 53
points--the score assigned for airports with 800 or more seats available
each weekday--not the 13 points assigned for airports with 350 to 499
seats available each weekday.
Alternatively, Finley argues that the FAA should have used the higher
seating figures in an information packet given FAA evaluators when they
visited Lawton Municipal Airport during their tour of Finley's proposed
site. In any event, Finley believes that the FAA should have probed
this matter during the course of negotiations.
The FAA replies that it. scored airline seating availability in
accord with the information that offerors provided. 2/
Since Finley's proposal indicated weekday passenger seating that fell
in the preestablished range of 350-499, it received 13 points.
Similarly, since Embry-Riddle's proposal indicated that some 3,441
passenger seats were available each weekday at the Daytona Airport, it
received the maximum 53 points.
In our opinion, the FAA cannot be faulted for scoring Finley's
proposal in accord with the information furnished in its proposal. See
Joseph L. De Clerk and Associates, Inc., B-220142, Nov. 19, 1985, 85-2
CPD P 567. In this regard, in Numax Electronics Inc., B-210266, May 3,
1983, 83-1 CPD P 470, when replying to a protester's argument that
information contained in the pre-award survey should have been
considered during evaluation of its technical proposal, we said:
"A technical evaluation must be based upon the information
contained in the proposal, so that no matter how capable an
offeror may be, it runs the risk of losing the competition if it
does not submit an adequate proposal. Blurton, Banks &
Associates, Inc., B-205865, August 10, 1982, 82-2 CPD P 121.
Thus, if the survey of Numax's premises was conducted in
connection with this procurement (it is not clear from the record
whether the survey Numax refers to was conducted with respect to
this procurement or some other procurement), the use of the
survey's results for evaluation purposes would be improper. Thus,
Numax is misguided to the extent it believes the preaward survey
should be used as a substitute for information that should have
been included in its written proposal."
Consequently, it was incumbent upon Finley to modify its proposal if it
wished to be evaluated on the basis of the seating data contained in the
airport's information packet, or on the basis of counting inbound
passenger seats separately from outbound. The 13 points Finley received
are all that it was entitled to receive for the number of weekday
passenger seats it proposed for Lawton Municipal Airport.
As for Finley's assertion that the FAA should have pointed out the
number of passenger seats available at the Lawton Municipal Airport as a
weakness or deficiency, the FAA reports that it did not do so because it
believed there was nothing an offeror could do to increase the number of
seats made available by scheduled air carriers. In these circumstances,
we find that the FAA's use of the seating data contained in Finley's
proposal was unobjectionable.
Facilities
Finley also contends that its proposal was improperly downscored for
its ability to accommodate fluctuations in enrollment either through
expansion or use of other nearby facilities or through reconfiguration
of proposed space. Finley contends that its proposed facility can
accommodate fluctuations by expansion, which its design facilitates, and
by turning over to the FAA an extra classroom in the building that is
not included in the FAA's initial lease. Finley also points out that
its offer identified a number of nearby facilities where additional
classes could be held. As for reconfiguration of its proposed facility,
Finley argues that its non-load-bearing stud walls can be easily
relocated to suit the FAA's desires.
The FAA replies that Finley's proposal received 6 out of 24 points
for future expansion because the only additional space available at the
facility for a classroom is the dining hall, which is usable only when
meals are not being served. The FAA points out that the drawings Finley
submitted do not show an additional nonleased classroom. The FAA
advises that the nearest additional sleeping quarters are more than 4
miles from the site Finley proposed, and that additional classroom space
is similarly distant. According to the FAA, the fact that the facility
is designed so that it can be expanded is unsatisfactory, due to the
extended period needed for design and construction of a new wing.
Finally, as to ease of reconfiguration of the existing space, while both
Finley and Embry-Riddle proposed nonload-bearing, relocatable interior
stud walls, Embry-Riddle subdivided much of its administrative space
with movable acoustic partitions, which can be relocated with even
greater ease.
As to Finley's contention that its facility would contain an
additional nonleased classroom available for future FAA expansion, the
drawings Finley furnished show only eight classrooms, the required
number, as the FAA asserts. The seeming inconsistency may be explained
by the additional gross floor area available in Finley's proposed
facility over and above the minimum space the FAA required. If Finley
intended to retain nonleased of fice or classroom space within the FAA
facility, it neither expressed this intent in its proposal nor indicated
the location of the nonleased space in its drawings. 3/ Thus, Finley,
not the FAA, is to blame for any possible misunderstanding in this area.
As to the other considerations, the FAA's evaluation appears amply
supported by the record and is, accordingly, within the evaluators'
legitimate discretion.
Service Plans
Finley further contests the FAA's lowering of its score for building
maintenance. The FAA explains that Finley proposed to furnish just one
engineer because the facility, being new, would require little
maintenance and because routine mechanical servicing of systems such as
air conditioning would be subcontracted. Although Embry-Riddle also
proposed to build a new facility, it offered to furnish a backup
repairman, and it provided more comprehensive information on its
maintenance plans. Given these differences, we believe that the FAA's
award of 33 points to Embry-Riddle for this subcriterion, as opposed to
28 for Finley, is amply supported by the record.
In addition, Finley challenges the FAA's evaluation of the telephone
service proposed for students residing in the dormitory. Finley points
out that its proposed installation of one pay phone for each 12.5
students more than satisfies the minimum requirement of one phone per 15
students. According to Finley, if the FAA wanted a telephone in each
room, it should simply have asked for that. Consequently, Finley
argues, the FAA's failure to point out this alleged deficiency in
Finley's proposal was improper, since the deficiency was readily
correctable.
The FAA replies that student telephone service was evaluated in
strict accord with the solicitation criteria and the FAA's evaluation
plan, which awarded 9 points to EmbryRiddle, based on its offer to place
a telephone in each room, and 2 points to Finley, based on its proposed
12.5 students per telephone. Further, the FAA contends, the applicable
Department of Transportation Source Selection Order prohibits suggesting
ways to improve proposals when pointing out weaknesses and deficiencies.
Since the FAA fully understood Finley's proposed level of service, and
since that level of service satisfied the specified minimum
requirements, the FAA argues that it could not have pointed out the
number of telephones as a weakness or deficiency.
We agree that it would be difficult to do so without directly
suggesting that the offeror propose additional telephones, which would
lead to technical leveling. When a proposal is considered to be
acceptable and in the competitive range, the agency is under no
obligation to discuss every aspect of it that has received less than the
maximum score. Bauer of America Corp. & Raymond International Builders,
Inc., A Joint Venture, B-219343.3, Oct. 4, 1985, 85-2 CPD P 380. Here,
although the solicitation stated that offerors would be given credit for
service beyond the minimum specified, Finley elected to propose service
very near the minimum level, presumably for cost reasons. Given these
circumstances, we believe that Finley had adequate notice of the
government's intentions and that the FAA had no duty to point out this
deficiency.
Community Resources
Finley also contends that its proposal should not have received a
lower rating than Embry-Riddle's under the criterion "Community
Resources." According to Finley, there is a wide variety of cultural and
entertainment activities available in the Lawton area, including art,
theater, sports, music, and dining, and so it should have received the
highest possible rating under the subcriterion "Recreation/Entertainment
Opportunities for Students." Finley also questions the FAA's downscoring
of its proposal under the subcriterion "Public Transportation for
Students, "even though none is available, since Finley offered to
provide such transportation on a reimbursable basis. In any event,
Finley argues, Lawton's recreational activities are in walking distance,
being, with few exceptions, within a 4-mile radius of the proposed
facility.
The FAA recognized Lawton's numerous recreational advantages and gave
Finley 5 out of 7 possible points for this subcriterion. Embry-Riddle
received 7 points on the basis of its location near the Atlantic Ocean,
the yearround opportunities for swimming, golf, tennis, and hiking
within approximately 2 miles of its proposed site, and the fact that it
is well suited for taking advantage of other activities in central
Florida, such as Daytona Beach, Disney World, and Epcot Center on
weekends. As to local public transportation for students, Finley
received 16 points, which took into account the firm's offer to make
transportation available for recreational purposes on a reimbursable
basis. Embry-Riddle, by comparison, received only 11 points in this
area. We see no basis to question the FAA evaluators' findings under
this subcriterion simply because Finley disagrees with them.
BUSINESS MANAGEMENT CONSIDERATIONS
Finley also protests the FAA's evaluation of its financial
capabilities. The FAA rated Embry-Riddle's financial capability as
"superior" and Finley's as "satisfactory," since Embry-Riddle has firm
commitments in place for both the construction and permanent financing
of the facility, while Finley did not offer such firm commitments.
Because its proposed financing arrangements complied with the
solicitation's minimum requirements, Finley contends that it should have
received the highest possible rating in this area. Finley argues that
it did not have to submit evidence of a firm commitment until after
award, since neither the solicitation nor the contracting officer, when
the matter was discussed during negotiations, required such. According
to Finley, Embry-Riddle's ability to obtain a firm commitment results
from its association in this project with one of the world's largest
conglomerates, ITT, so that comparatively evaluating financial condition
creates an unfair competitive advantage for large business
organizations.
The FAA replies that the solicitation specifically stated that as
part of its assessment of business management capabilities, the FAA
would evaluate each offeror's ability to provide financing for the
facility. This firm commitment led the FAA to assess Embry-Riddle's
proposal as an excellent risk, while Finley's less firm commitments led
the FAA to assess its proposal as a moderate risk. The FAA argues that
it was proper to assess the comparative degree of risk for each
offeror's financing, rather than simply to determine whether an offeror
met the minimum requirements for financing.
The solicitation stated that offerors would be "evaluated on their
financial capabilities, including their ability to adequately finance
contract operations." In appropriate circumstances, and where the
solicitation so apprises offerors, financial condition may be used to
assess the relative merits of individual proposals. See Delta Data
Systems Corp. v. Webster, 747 F.2d 197, 200 (D.C. Cir. 1984); Sea-Land
Service, Inc., B-219665 et al., Dec. 17, 1985, 85-2 CPD P 677. Here,
the solicitation did apprise offerors of the FAA's intent, and the
agency therefore was not limited to determining whether a particular
offeror satisfied, or did not satisfy, the minimum requirements for
financing set forth in it. Any objection by Finley to that procedure
should have been filed before the time set for receipt of proposals. 4
C.F.R. Sec. 21.2 (1986); Prospective Computer Analysts, Inc., B-221414,
Feb. 27, 1986, 86-1 CPD P 206.
As to the validity of the FAA's assessment of relative financial
capability, Finley's argument that Embry-Riddle's association with ITT
in this project creates an unfair competitive advantage suggests that
Finley itself recognizes Embry-Riddle's superior financial capability.
And, of course, Finley's objections to any competitive advantage that
large business firms may have are also untimely, since the solicitation
did not preclude offers from large businesses. Id.
Additional Considerations
Finley further objects to the source selection official's failure to
consider the adverse impact that moving the FAA's management training
school would have upon the town of Lawton and upon the level of
instruction at the school. Finley also questions the preference stated
in the solicitation for colleges and universities offering strong
aviation, business, and public administration programs.
Finley is essentially protesting the solicitation terms--for failing
to include certain considerations and for including another
consideration. Our Bid Protest Regulations require that protests based
upon alleged improprieties in a solicitation that are apparent before
the closing date for receipt of proposals be filed by that date. 4
C.F.R. Sec. 21.2(a)(1). Finley's protest on these bases was filed more
than a year after the closing date. Therefore, it is untimely and we
will not consider it. Prospective Computer Analysts, Inc., B-221414,
supra. We dismiss the protest on these bases.
SUMMARY: TECHNICAL AND BUSINESS MANAGEMENT
We believe that the FAA's evaluation of technical and business
matters, including risk assessment, is supported by the record. Finley
has shown only that 18 technical points, relating to the distance from
Embry-Riddle's proposed site to the Daytona Airport, do not appear to be
in keeping with the preestablished scoring scheme. It does not appear
that the slight reduction in Embry-Riddle's technical score would have
made a difference in its overall standing vis-a-vis Finley.
Therefore, we believe that the source evaluation board report formed
a proper basis for the selection official's decision.
PRICE AND COST CONSIDERATIONS
Finley contends that the total difference in cost between its
proposal and Embry-Riddle's is much greater than the FAA suggests, so
that the selection official erred when he relied upon lower cost as a
consideration supporting award to Embry-Riddle. Finley argues that the
selection decision improperly took into account only offerors' proposed
prices and ignored unique program costs, for example, relocation of FAA
personnel and student transportation, that the FAA will incur, but that
will differ from site to site. Finley points out that such costs will
have a significant impact upon total costs the FAA will actually incur.
Finley argues that even when the FAA considered both proposed prices and
unique program costs, it downplayed the difference by focusing on the
estimated difference between its own and EmbryRiddle's proposed costs,
when adjusted for the present value of money, rather than the other
methods of comparing proposed costs which indicated greater cost
differences.
The FAA replies that unique program costs were only one component of
the cost evaluation. Further, unlike the specific prices proposed for
leasing and operating the facility, unique program costs are outside the
contract and are subject to much greater market fluctuations. In this
regard, the primary component of unique program costs, the air fares
associated with student travel, is subject to extreme price
fluctuations. For this reason, the cost of travel for each offeror was
estimated as a range, although a set figure (the middle of the range)
was used for comparison purposes. The FAA concludes that given the
speculative nature of unique program costs and the fact that price was
only one of three equally important areas of consideration--technical,
business management, and price--the choice of Embry-Riddle was a
reassonable and proper exercise of the selection official's discretion.
In a negotiated procurement, award need not be made to a firm
offering the lowest cost unless the solicitation so specifies. Ray
Camp, Inc., B-221004, Feb. 27, 1986, 86-1 CPD P 205. Moreover, where
the solicitation does not indicate the relative importance of the
evaluation factors, it must be presumed that each will be given
approximately equal weight in making an award. Riggins Co., Inc.,
B-214460, July 31, 1984, 84-2 CPD P 137.
The FAA here considered two separate sets of costs, namely, the
offeror's proposed price for leasing and operating the facility, which
represent a contractual obligation, and the unique program costs
associated with each proposed facility. Each offeror's price was
evaluated over the 20-year maximum span of the lease on the basis of (1)
total proposed price; (2) total proposed price as adjusted for
5-percent inflation over the contract life; and (3) total proposed
price as adjusted for inflation, then discounted to reflect the present
value of money. 4/ The latter figure, without consideration of unique
costs, was the figure used in the selection. Finley and Embry-Riddle's
proposed prices were evaluated as follows:
20-Year Adjusted for
Costs Inflation Present Value
Finley
Facility Lease
and Operation $44,932,200 $64,260,283 $35,397,148
Unique
Costs $24,920,600 $41,198.123 $20,953,427
Embry-Riddle
Facility Lease
and Operation $47,282,220 $64,979,100 $34,220,312
Unique
Costs $38,659,920 $63,789,711 $32,535,264
The source evaluation board report furnished this information, and a
good deal more dealing with price and cost estimates, for the source
selection official's consideration. We therefore cannot agree with the
contention that the report downplayed the significance of the
differences in cost and price between the proposals. While Finley has
not said so, it may be objecting to placing any reliance upon estimates
that are adjusted for the present value of money. If so, such
objections are untimely, since the solicitation advised offerors that
costs were to be evaluated in this manner. 4 C.F.R. Sec. 21.2.
As to the alleged lack of emphasis the source selection official
placed upon unique costs, that official had broad discretion in
determining the manner and extent this factor should be used in
selection. Intelcom Educational Services, Inc., B-220192.2, Jan. 24,
1986, 86-1 CPD P 83. The emphasis that the official placed on the
offerors' proposed prices, as compared with the lack of emphasis on
unique program costs, appears reasonable in light of the predictability
of contract costs and the high degree of uncertainty associated with air
fares and the other elements of unique program costs. Moreover, this
treatment is consistent with the solicitation, which, after describing
the various aspects of the offeror's proposed contract price that would
be evaluated, stated that " i n addition, FAA will consider program
unique costs." We therefore see no basis to question the selection
decision in this regard.
Finley also asserts that the FAA improperly ignored its offer to
provide shuttle bus service for incoming and departing students at a
cost significantly less than the taxi fares the FAA used to evaluate
Finley's unique costs. The FAA responds that although Finley's final
technical proposal offered to provide shuttle bus service, pricing
information was inadequate, so that the service could not be evaluated.
The mere mention of a monthly rate in Finley's final technical
proposal did not bind Finley, and we agree that it was not adequate for
purposes of price evaluation. Finley should have incorporated its
proposed price for operating the shuttle service into its total price
for operating the facility; this would have permitted evaluation of the
shuttle bus service over the 20-year period of the lease, with allowance
for inflation and the present value of money, as was the case for all
other prices proposed for operation of the facility. We therefore deny
Finley's protest concerning the FAA's cost evaluation.
CONCLUSION
Compared with Finley's proposal, Embry-Riddle's proposal was somewhat
higher technically, appreciably higher in business management, and
slightly lower in evaluated cost for facility lease and operation. In
conclusion, we find the source selection official's consideration of
technical, business management, and cost factors rational and consistent
with the evaluation criteria.
The protest is dismissed in part and denied in part.
Harry R. Van Cleve
General Counsel
FOOTNOTES
1/ Embry-Riddle appears to have proposed on this basis, but it was
entitled to the maximum number of points for the category under either
method.
2/ Actually, the FAA scored Finley on the basis of 390 seats, a
figure apparently attributable to another proposal offering a site in
Lawton. Since both Finley's proposed seats and the seats that the FAA
evaluated fell within the 350 to 499 range, Finley suffered no prejudice
from this error.
3/ If Finley did intend to retain space in the leased facility for
non-FAA purposes, such intent would be inconsistent with the requirement
for exclusive use of the leased facility and presumably would result in
a downgrading of Finley's proposal.
4/ Because the proposed costs of operation were escalated for
inflation while the cost for leasing remained as proposed, offers with
differing ratios of facilities to operational costs were affected
differently by the evaluation process, with the result that the relative
position of the offerors was changed by the evaluation process.
Matter of: Sage Diagnostics
File: B-222427
Date: July 21, 1986
DIGEST
1. A protest alleging that evaluation of the protester's experience
was improper and not based on the stated criteria is denied where the
record shows that the agency's downgrading of the protester's proposal
for lack of experience directly related to the work to be performed was
reasonable and the requirement was encompassed by the stated evaluation
criteria and subcriteria.
2. Where bias is alleged, the protester has the burden of
affirmatively proving its case, and the General Accounting Office (GAO)
will not attribute unfair or prejudicial motives to procurement
officials on the basis of inference or supposition. Where the record is
completely devoid of evidence supporting some of the protester's
inferences and refutes others, GAO will deny the protest.
3. Award of a contract to a higher priced offeror is proper where the
awardee received the highest overall score under an evaluation formula
that gave four times as much weight to technical factors as to price.
DECISION
Sage Diagnostics protests the United States Customs Service's award
of a contract for technical assistance in improving its intelligence
capabilities under request for proposals (RFP) No. CS-86-029. The
protester contends that the agency's evaluation of technical proposals
was not in accord with stated criteria; that the process unfairly
favored the awardee, who may have had "inside" information; and that
Sage should have been selected for award on the basis of its superior
technical proposal and lowest price.
We deny the protest.
BACKGROUND
Customs issued the RFP on December 31, 1985 as a total small business
set-aside, soliciting offers for a fixed-price, level-of-effort contract
for an estimated 2,000 hours of assistance to be furnished over a
12-month period. The contractor generally is to study and review
various aspects of Customs' intelligence operation and periodically to
submit its findings to the Commissioner. According to the statement of
work, the primary objective is to improve the agency's intelligence
capabilities with respect to the professionalism of its staff, tactical
intelligence support, and support to marine and air anti-smuggling
operations. The contractor is also to monitor progress in the areas of
intelligence training and automated data systems and to assist in the
implementation and expansion of inter-agency agreements.
The solicitation provided that proposals would be evaluated under
five criteria, with maximum points assigned to each as follows:
experience, 35 points; knowledge of intelligence ADP and
telecommunications activities, 15 points; organizational
qualifications, 10 points; methodology and work plan, 20 points; and
cost, 20 points. Award was to be made to the offeror whose proposal
provided the quality/cost relationship most advantageous to the
government. The RFP further provided that although numerical ratings
would be used as a guide to contractor selection, the agency might not
make award to the technically acceptable offeror having the lowest
estimated cost.
Eleven firms submitted proposals; five, including the protester and
Richard Chillemi, the awardee, were included in the competitive range.
After discussions and submission of best and final offers on March 3,
1986, the technical and cost scores of the awardee were 73 and 18,
respectively, for a combined score of 91, while those of the protester,
which ranked third, were 64 and 20 for combined point score of 84. 1/
The contracting officer determined that the offer submitted by Chillemi
was most advantageous to the government and awarded the contract to that
firm.
DISCUSSION
Technical Evaluation
Sage initially contends that the evaluation of technical proposals,
particularly with respect to experience, was neither performed properly
nor conducted in accord with the stated criteria. Additionally, Sage
argues that its score was improperly reduced for lack of a particular
type of experience--in mini-computer systems--that was not required by
the RFP.
In reviewing protests against allegedly improper evaluations, our
Office will not substitute its judgment for that of the contracting
agency, but rather will examine the record to determine whether the
agency's judgment was reasonable and in accord with listed criteria and
whether there were any violations of procurement statutes and
regulations. See ORI, Inc., B-215775, Mar. 4, 1985, 85-1 CPD P 266.
After examining this record in its entirety, we find that Customs,
downgrading of Sage's experience was not unreasonable. First, the
record supports the evaluation panel's view that the personnel proposed
by the protester had no direct experience in law enforcement. All three
members of the evaluation panel were uniformly concerned with Sage's
lack of specific experience in this area. The key personnel proposed by
Sage, as noted by one evaluator, only had related experience with the
military or the Central Intelligence Agency. Due to this perceived
weakness, Sage's proposal received an average of 3 points less for
experience than Chillemi's.
Customs did not completely discount related experience, as
demonstrated by the relatively high score it awarded Sage, compared with
other offerors in the competitive range, for this criterion. Customs
nevertheless acted reasonably in desiring experience directly relating
to its own law enforcement needs, and we think this consideration is
related to and encompassed by the listed evaluation subcriteria covering
(1) knowledge and experience in the role of the Customs Service, and (2)
experience in designing and developing law enforcement applications.
As for Sage's allegation that Customs improperly downgraded its
proposal for stressing a large-scale centralized operation and for lack
of experience in mini-computer systems, we find this contention to be
without foundation. A debriefing document submitted for the record by
Sage states that Sage failed to demonstrate knowledge in the area of
"mini-nationally coordinated systems with individual data bases." This
need was clearly reflected in the statement of work, which indicated
that one objective of the contract was to establish an automated data
system capable of communicating directly with the field. This objective
is not inconsistent with the two ADP evaluation subcriteria that
generally require experience developing, establishing, and monitoring a
national network system in support of tactical operations. The overall
system required by Customs is large. However, as reflected by the
solicitation, this system will be decentralized, and each mini-system
will have an individual data base that must be coordinated with the
others. We therefore deny the protest concerning evaluation of Sage's
experience.
Bias
Sage next alleges that the evaluation process for this procurement
was a mere formality, used only to ratify the prior selection of
Chillemi. Referring to Chillemi's proposal, which admittedly
demonstrated a first-hand awareness of the problems within Customs'
intelligence program, Sage speculates that the awardee may have been
given "inside" information not available to the other competitors. Sage
next alludes to a significant reduction in price in Chillemi's best and
final offer as evidence that Chillemi may have been given improper
information, since all other offerors either increased or retained their
original prices. Sage also suggests that Chillemi's propcsal was
upgraded (from 85to 91 points) during the evaluation of best and final
offers because it alone was given precise advice concerning its
weaknesses during discussions. One final example of Customs' favoritism
toward the awardee, Sagestates, was the agency's "gratuitous" addition
of $3,795 to Chillemi's final proposal price of $61,379.
In cases where bias is alleged, the protester has the burden of
affirmatively proving its case, and we will not attribute unfair or
prejudicial motives to procurement officials on the basis of inference
or supposition. Ted L. Biddy and Associates, Inc., B-209297 et al.,
Apr. 22, 1983, 83-1 CPD P 441.
Here, Sage's allegations concerning the revisions Chillemi made
during the preparation of its best and final offer and Customs' review
of this proposal are based entirely on inference. The record is devoid
of evidence suggesting that Chillemi may have been apprised of
information not provided to other offerors during proposal preparation
or during discussions. In fact, the record clearly shows that an
increase of 3 points in Chillemi's score is directly attributable to its
strengthing of the resumes of its proposed personnel in its best and
final offer.The firm's price reduction is attributable to Chillemi's
elimination of labor costs for an administrator/secretary position.
This action was inaccord with the solicitation, which provided that
firms were to offer a fixed price for not to exceed 2,000 hours of
professional services. Support personnel costs were not to be included
in this level of effort, but were to be included as overhead or general
and administrative costs. Chillemi erroneously did not so include these
costs, but instead indicated that they would be submitted on a
reimbursable basis. 2/ Customs states that it added $3,795 to
Chillemi's best and final offer to accountfor this obvious omission.
Custom's then rescored Chillemi's proposal, giving it one less point
under the cost criterion to account for thiscorrection. 3/
We find that the arguments presented by Sage to be insufficient to
demonstrate bias, and we regard them as mere speculation. Lithographic
Publications, Inc., B-217263, Mar. 27, 1985, 85-1 CPD P 357.
Accordingly, we deny this basis of Sage's protest.
Award Selection
Finally, Sage contends that it should have been selected for award
because of its superior technical proposal and its lowest price. In a
negotiated procurement, unless the solicitation so specifies, there is
no requirement that award be made on the basis of lowest price. Rather,
the procuring activity has discretion to select a higher-rated, higher
cost technical proposal if doing so is consistent with the evaluation
scheme of the solicitation and is deemed worth the difference in cost.
See Litton Systems, Inc., Electron Tub Division, 63 Comp. Gen. 385
(1984), 84-2 CPD P 317.
Here, the source selection official concurred with the evaluation
panel's finding that Chillemi's proposal was most advantageous to the
government, technical and price factors considered. Since the basis for
this determination was the overall point scores received by the
offerors, which were calculated in accord with the formula set forth in
the solicitation that gave four times as much weight to technical
considerations as to price, we also deny the protest on this basis.
CONCLUSION
The protest is denied, as is Sage's claim for bid preparation costs
and attorney's fees.
Harry R. Van Cleve
General Counsel
FOOTNOTES
1/ The scores of the other three firms in the competitive range are
not at issue here.
2/ The RFP provided that travel and incidental expenses required
under the resulting contract were to be reimbursed on the basis of
actual expenses incurred. Apparently, Chillemi, in revising its
proposal, concluded that clerical costs also were an incidental expense
to be reimbursed as incurred.
3/ Arguably, the agency should have gone back to Chillemi for
clarification before correcting this mistake. See the Federal
Acquisition Regulation, 48 C.F.R. Sec. 15.607(a) (1984). We cannot
conclude that the protester was prejudiced by the agency's failure to do
so, since the agency reduced the point score for the awardee's cost
proposalto reflect the amount added to overhead to cover the cost of
support personnel.
Matter of: Display Sciences, Inc.
File: B-222425
Date: July 9, 1986
DIGEST
Protester is not an "interested party" to object to the cancellation
of a solicitation where the protester would not have received award if
the solicitation had not been canceled since its bid was nonresponsive
to a material requirement.
DECISION
Display Sciences, Incorporated (Display Sciences), protests the
cancellation of invitation for bids (IFB) No. DAHA90-86-B-0001 issued
December 30, 1985, for the procurement of 276 video cassette projectors.
The protest is dismissed.
The IFB for the procurement of the video cassette projectors was
issued on a brand name or equal basis and specified "Display Sciences,
Inc. Model No. AV50S or Equal." The list of salient characteristics of
the brand name model which was required by the agency was set forth on
pages 37 and 38 of the solicitation. One of the salient characteristics
required that the "picture size" be "25" to 70" diagonal (adjustable
focus)."
A total of seven bids were received at bid Opening on February 12,
1986. Four bidders, including Display Sciences, offered the brand name
item, Display Sciences Model No. AV50S, and three bidders offered a
projector system which incorporated the "SONY FP-60" "Vidimagic" video
projector. One of the four bidders who offered the brand name item also
offered at a lower bid price as alternate items several systems based on
the SONY projector.
Display Sciences submitted with its bid unsolicited descriptive
literature on its model AV50S projector. This literature provides, in
pertinent part, that the picture size focus was "adjustable from 25" to
66" measured diagonally. Based on his review of the unsolicited
descriptive literature submitted by Display Sciences with its bid, the
contracting officer determined that cancellation of the solicitation was
proper since the brand name item apparently did not meet the salient
characteristic set forth in the solicitation for picture size. The
contracting officer advises that on March 4, 1986, he mailed out notices
to bidders that the solicitation had been canceled because of defective
specifications. Specifically, the notice advised that unsolicited
literature furnished by the manufacturer of the brand name product
indicated that such product did not meet the salient characteristic with
regard to picture size. We note that the contracting officer further
advises that the solicitation was also deficient in that the salient
characteristics for minimum audio output and for viewing screen size
were "ambiguous." Furthermore, the contracting officer advises that the
solicitation on a brand name or equal basis was overly restrictive since
he believes that the video cassette projectors should have been obtained
on the basis of detailed "generic" specifications and he states that
based on the bids submitted he was concerned about "price
reasonableness."
Display Sciences has objected to the cancellation of the solicitation
on the basis that prior to cancellation it offered to provide the
contracting officer with evidence which it asserts would establish that
the picture size of its brand name projector in fact has an adjustable
focus of from 25" to 72". The protester states that a sworn statement
by its president and a prior brochure on the Display Sciences Model
AV50S which were presented to the contracting officer after bid opening
on March 5 clearly establish that the Model AV50S was fully capable of
projecting the required 70" picture (both the statement and the brochure
provide that model AV50S has a picture size which is adjustable from 25"
to 72" measured diagonally). The protester advises that it also
provided a list of nine companies which use Display Sciences Model AV50S
for a picture size of up to 72" so that the contracting officer could
independently determine the capability of the brand name projector with
regard to picture size. The protester asserts that the solicitation
should not have been canceled, but that award should have been made to
either itself or one of the other bidders who offered Display Sciences
Model AV50S because such model does, in fact, meet the solicitation's
salient characteristic for a picture size adjustable up to 70" measured
diagonally.
We need not consider the propriety of the cancellation because we
conclude that Display Sciences is not an interested party under our Bid
Protest Regulations to raise this issue.
Neither Display Sciences nor the agency asserts that the minimum
needs of the government would have been satisfied by a picture size
adjustable up to 66" rather than the required 70". Although the agency
states that the solicitation appears to have been defective in that the
specified brand name item appears to have been incapable of meeting the
solicitation's salient characteristic for picture size, it does not
indicate that the picture size of 66" offered by Display Sciences in its
bid could meet its actual minimum needs. To the extent that the
contracting officer views the solicitation as unduly restrictive, he
states that it is because the solicitation was issued on a brand name or
equal basis rather than on the basis of detailed "generic"
specifications. In addition, the thrust of the protester's contention
is not that an adjustable picture size of 66" will, in fact, meet the
agency's needs, but that its product, model AV50S, does, in fact, meet
the solicitation's requirements for picture size since the projector
focus is adjustable up to 72". Under the circumstances, it appears that
even if the solicitation had not been canceled Display Sciences would
not have been entitled to award since its bid would have been properly
for rejection as nonresponsive.
A bid is responsive only if it is an unequivocal offer to meet all of
the material terms and conditions of the IFB. Data Control/North Inc.,
B-205726, June 21, 1982, 82-1 C.P.D. P 610. Where unsolicited
descriptive literature contains the same model number or name as the
equipment offered in the bid, there is a sufficient relationship between
the bid and the descriptive literature so that the literature may not be
disregarded. Loge/Spatial Data Systems, Inc., B-205016, May 17, 1982,
82-1 C.P.D. P 465. Thus, if the literature describes a product that
does not conform to a material requirement of the IFB the effect of the
literature renders the bid nonresponsive by qualifying the otherwise
responsive bid. Minnesota Mining and Manufacturing Co., B-212004, Nov.
17, 1983, 83-2 C.P.D. P 578 and Devault Manufacturing Co., B-195959,
Jan. 7, 1980, 80-1 C.P.D. P 18.
Here, as a result of the unsolicited descriptive literature on the
model AV50S, showing a picture size adjustable up to 66", which Display
Sciences submitted with its bid, the protester's bid was nonresponsive
to the solicitation's requirement for a picture size adjustable up to
70". Upon acceptance of its bid by the government, Display Sciences
would be bound only to the terms of its bid, as qualified by the
unsolicited descriptive literature. See id. at 3. Thus, even if the
contracting officer had determined that cancellation of the solicitation
was improper because the brand name projector, in fact, meets the
solicitation's requirement for a 70" picture size, Display Sciences
would have been ineligible for award since in its bid it qualified its
obligation to provide a projector with a picture size of up to 70".
Accordingly, its bid was properly for rejection as nonresponsive.
Although the protester may have sought to explain after bid opening that
it was offering a projector which had a picture size which was
adjustable up to 72" it is well settled that a bidder may not explain
the meaning of an apparently nonresponsive bid after bid opening. Id.
at 2-3, and L.H. Morris, Electric Inc., B-219732, 85-2 C.P.D. P 392.
Under the circumstances, it does not appear that Display Sciences is
an interested party to the cancellation of the solicitation since it
would not have received award if the solicitation had not been canceled.
See 4 C.F.R. Sec. 21.1(a) (1986) and Beckman Instruments Inc.,
B-220794; B-220795, Feb. 20, 1986, 86-1 C.P.D. P 178 at 5. We note
that it appears that at least one of the bidders which offered the
Display Sciences Model AV50S projector submitted a bid which was
responsive to the terms of the solicitation since that bid was
unambiguous and did not take any exception to the material terms of the
solicitation. However, none of the bidders other than the protester,
offering the brand name item has protested the cancellation of the
solicitation and Display Sciences' status as a supplier to such bidders
does not make it an "interested party" for the purpose of protesting the
cancellation action. See N.F. Electronic Instruments, B-219661.2, Feb.
14, 1986, 86-1 C.P.D. P 161. Accordingly, the protest filed by Display
Sciences is dismissed.
Display Sciences requests its bid preparation costs and the costs of
filing and pursuing its protest. In view of our decision dismissing the
protest of the cancellation of the solicitation such claims are denied.
Norfolk Shipbuilding and Drydock Corp., B-219988.3, Dec. 16, 1985, 85-2
C.P.D. P 667 and DSP Technology Inc., B-220593, Jan. 28, 1986, 86-1
C.P.D. P 96.
The protest is dismissed.
Robert M. Strong
Deputy Associate General Counsel
Matter of: United Digital Networks, Inc.
File: B-222422.3
Date: April 6, 1987
DIGEST
Protester may recover the costs it incurred in filing and pursuing
its protest as well as its bid preparation costs where the agency
unreasonably excluded the protester from the competition, the firm did
not receive the award our Office recommended, and no other remedy is
available.
DECISION
United Digital Networks, Inc. (UDN), has submitted a claim for bid
preparation costs and the costs of filing and pursuing its protest,
including attorney's fees, as a consequence of a protest that we
sustained in its favor in our decision in United Digital Networks, Inc.,
B-222422, July 17, 1986, 86-2 C.P.D. P 79. The protest concerned
invitation for bids (IFB) No. 500-72-85, issued by the Veterans
Administration for a telephone and public address system. We find UDN
entitled to the claimed costs.
In our decision, we held that the VA improperly permitted GTE, Inc.,
to correct mistakes in its bid and, consequently, improperly awarded a
contract to that firm. We sustained the protest and recommended that
the VA terminate the contract with GTE and award a contract to UDN.
The VA terminated the contract with GTE for the convenience of the
government on December 8, 1986. By letter dated December 29, the VA
notified UDN that due to a delay in site preparation and changes in
state-of-the-art technology the agency was canceling the IFB and would
not make an award under the protested solicitation. UDN's claim is in
response to this information.
According to our Bid Protest Regulations, 4 C.F.R. Sec. 21.6(d), (e)
(1986), implementing the Competition in Contracting Act of 1984, 31
U.S.C. Sec. 3554(c) (Supp. III 1985), a protester that had a substantial
chance for award may recover bid preparation costs where the firm was
unreasonably excluded from the competition and no other remedy
enumerated in our Regulations is appropriate. See The Department of the
Navy, et al.--Request for Reconsideration, B-220327.2, et al., Apr. 23,
1986, 86-1 C.P.D. P 395.
The VA argues that we should deny UDN's claim. The agency, citing
our decision in Asbestos Abatement of America, Inc.-- Request for
Reconsideration, B-221891.2, et al., Aug. 5, 1986, 86-2 C.P.D. P 146,
asserts that for our Office to find that the VA unreasonably excluded
UDN from the procurement, the protester must demonstrate that the agency
was guilty of fraud or bad faith, a burden that, according to the VA,
UDN has not met.
The VA misreads our standard for recovery of costs. The decision the
VA cites involves a reconsideration of Asbestos Abatement of America,
Inc., B-221891, et al., May 7, 1986, 86-1 C.P.D. P 441, where the
protester challenged the Department of Health and Human Services' (HHS)
cancellation of a small business set-aside. We found the cancellation,
based on the fact that the responsive bid submitted under the setaside
was unreasonable in price, was legally unobjectionable. In considering
the protester's claim for bid preparation and protest costs, we noted
there was no evidence HHS acted in bad faith in issuing the set-aside,
that is, that HHS induced the protester into submitting a bid when there
was no chance the firm would receive an award, a point that we
reiterated in the reconsideration decision. However, the "key fact," as
we put it, in denying the claim initially was that the protester was not
unreasonably excluded from the procurement because there was a
compelling reason to cancel the solicitation.
A protester asserting that a procuring agency improperly accepted a
bid thus does not have to show that the agency acted in bad faith to
demonstrate that the firm was unreasonably excluded from the
competition. Rather, it is sufficient that the agency's improper action
tainted the procurement process and denied the protester the opportunity
to receive a contract award. See Computer Data Systems, Inc., B-218266,
May 31, 1985, 85-1 C.P.D. P 624. By improperly correcting GTE's bid,
the VA prevented UDN from receiving the award and, since the VA has
decided not to procure the telephone system at this time, no other
remedy enumerated in our Regulations is appropropriate. See 4 C.F.R.
Sec. 21.6( a) (1)-(5). Consequently, UDN is entitled to reimbursement
of its bid preparation costs.
We also find that UDN is entitled to recover the reasonable costs of
filing and pursuing its protest, including attorney's fees. These costs
are recoverable where the agency Unreasonably excluded the protester
from the procurement, except where our Office recommends that the
contract be awarded to the protester and the firm receives the award. 4
C.F.R. Sec. 21.6(d), (e). The VA suggests in this regard that since UDN
will be given the opportunity to compete for the requirement when the
agency resolicits for the telephone system the firm's claim for protest
costs should be denied. While we have held that where a protester is
given the opportunity to compete for the award, recovery of protest
costs is inappropriate, Hobart Brothers Co., B-222579, July 28, 1986,
86-2 C.P.D. P 120, all UDN would be getting here is the potential
opportunity to compete on some future solicitation. UDN is entitled to
recover its protest costs in such circumstances. See EHE National
Health Services, Inc., 65 Comp. Gen. 1 (1985), 85-2 C.P.D. P 362;
Consolidated Bell, Inc., B-220425.2, Aug. 18, 1986, 86-2 C.P.D. P 192.
UDN should submit its claim for costs directly to the VA. 4 C.F.R.
Sec. 21.6(f).
Comptroller General
of the United States
FILE: B-222422 DATE: July 17, 1986
MATTER OF: United Digital Networks, Inc.
DIGEST:
Discrepancies between unit and extended prices and between total cost
and costs of line items that comprised that total may not be corrected
where the intended bid cannot be ascertained from the bid and the bidder
provides no other evidence to establish the allegedly intended bid.
United Digital Networks, Inc. (UDN), protests a contract award to
GTE, Inc., by the Veterans Administration (VA) under invitation for bids
(IFB) No. 500-72-85. UDN asserts that GTE submitted a nonresponsive bid
and that the VA improperly permitted GTE to correct mistakes in the bid.
We sustain the protest.
The procurement, to obtain a telephone and public address system at
the VA Medical Center in Albany, New York, was conducted in two steps.
The VA received and evaluated technical proposals in the first step.
The protest concerns the second step, under which those offerors with
acceptable technical proposals submitted their bids.
The step-two IFB requested the bidder to choose from among lease,
lease with option to purchase and purchase option plans; the protest
concerns the purchase option only. For whichever plan the bidder chose,
the firm had to provide costs for the replacement of a telephone system
and the installation of a public address system, including, for each
system, costs for maintenance, follow-on service and growth, and data.
As part of its submission, each bidder was required to complete a bid
worksheet showing the various cost elements of the system, and a Bid
Proposal Summary Form. The documents were very detailed and in a number
of places required the bidder to provide the totals of entries made
elsewhere in the forms.
Four bids were submitted in response to the IFB, with GTE and UDN
bidding on the purchase option. The contracting officer noted that GTE
had reproduced the worksheet and Bid Proposal Summary Form in a
computerized version, and that GTE's Summary Form did not include the
required totals for the system components. The contracting officer took
subtotals from another part of GTE's Summary Form, calculated a total
bid for GTE and, after reviewing all four bids, announced that GTE
submitted the apparent low bid of $1,743,931.82. UDN's bid of
$1,767,814 was second low--less than $24,000 more than GTE's.
Immediately after bid opening, the contracting officer called GTE and
requested that a GTE representative verify GTE's bid total. The
representative stated that he believed the total was $1,814,271.02,
which is $70,339.20 more than the announced total, but that he would
check and call back. That same day, before the GTE representative
called back, the VA received a modification to GTE's Summary Form, which
increased the cost of the telephone system, the major part of the
purchase, by $70,339.20, from $1,586,584.91 to $1,656,924.11. Later
that afternoon, the contracting officer informed GTE that since the
modification was received after bid opening it could not be accepted,
but that GTE could submit a mistake-in-bid claim. The GTE
representative subsequently advised that GTE's total bid was
$1,743,931.82, the amount stated at bid opening.
After bid opening, the contracting officer sent the four bids to the
contracting officer's technical representative for a line-by-line cost
analysis of the bid worksheets and attachments. During this review, the
technical representative found a multiplication error with respect to
maintenance in the telephone system worksheet that accompanied GTE's
bid. As submitted, the bid, with the underscored figures being GTE's
entries, showed:
"B. Maint (2-10 yrs.) MRC $1,154.00 x 108 x .773 = $315,967.50" The
technical representative noted that correct arithmetic extension of
$1,154 is $96,340.54, so that the error had the apparent effect of
overstating GTE's bid by $219,626.96. The contracting officer so
informed GTE, and asked the firm either to verify the new total or to
submit a mistake-in-bid claim.
GTE responded that, in fact, there was an error in that line and that
documentation would be provided. GTE also alleged that there was
another mistake in the same document, dealing with the
installation/purchase cost, in the amount of $70,339.20. GTE explained
that the error resulted when a secretary transferred the wrong figures
from GTE's internal worksheet onto the sheet that was submitted to the
VA with GTE's bid. The alleged difference is: A. INSTALLATION/PURCHASE
Submitted Corrected
2. EPABX Switch/Console/ $601,996.86 $531,651.66
Management and Directory System
9. Total EPABX Installation/ $906,572.21 $836,233.01
Purchase Cost
GTE, however, neither provided documentation to show how the error was
made nor referenced the worksheet error regarding maintenance.
Over the next few months, the VA contacted GTE a number of times to
obtain documentation on the alleged errors in GTE's bid. In response,
GTE submitted a letter explaining GTE's pricing procedure; a copy of
the worksheet to show $96,340.54 as the correct intended bid for
maintenance; a copy of GTE's internal contract pricing sheet which
showed $836,233.01 as the total telephone installation/purchase price,
with an affidavit from GTE's director stating that the internal
worksheet was prepared prior to bid opening and was used as the basis of
the prices submitted in GTE's bid; and a letter explaining how GTE
determines its bid prices.
The contracting officer forwarded GTE's request for bid correction,
including the letters and internal pricing sheet, to VA headquarters in
Washington, D.C., and requested an administrative determination whether
bid correction could be permitted. The reviewing official determined
that the error in the worksheet concerning maintenance could be
corrected as a clerical error, and that there was sufficient evidence to
show GTE's mistake and intended installation/ purchase bid.
While reviewing GTE's bid, the official also noted that the true
total of the line items on the worksheet pertaining to the telephone
system was $1,656,924.11, not $1,586,584.91 as entered in the worksheet;
as stated above, GTE had submitted a late modification to change the
telephone system bid on the other submission--the Summary Form--to the
higher figure. The official corrected this as a clerical error, and the
VA awarded a contract to GTE. The contract price includes $96,340.54
for maintenance and apparently reflects the balancing effect of
increasing the telephone system total by $70,339.20 and decreasing the
installation/purchase cost by the same amount. Performance has been
withheld pending the outcome of this protest.
PROTEST AND DISCUSSION
UDN asserts that the VA improperly permitted GTE to correct the
mistakes in its bid. UDN also argues that GTE's bid was nonresponsive
because GTE did not use the attachments in the IFB and did not include
its total costs on the Bid Proposal Summary Sheet. Finally, UDN
requests reimbursement of the costs it incurred in pursuing this protest
and in submitting its bid.
Under the Federal Acquisition Regulation (FAR), 48 C.F.R. Sec.
14.406-2 (1984), a contracting officer is authorized to correct a
clerical mistake in a bid without further agency approval after the
bidder verifies the intended bid. Tektronix, Inc., B-219981, Nov. 27,
1985, 85-2 C.P.D. P 611. 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, while we agree with the VA that mistakes were apparent from the
face of GTE's bid, we cannot agree that the intended bid was apparent.
The VA assumed that the error in the worksheet maintenance item was in
the extended total of $315,967.50, rather than in the unit price of
$1,154, and that the error in the telephone system entry on the
worksheet was in the stated total rather than in one of the numerous
line items that comprised that total. The VA, however, does not assert
that either the extended price for maintenance or the entered telephone
system total was so out of line with the government estimate or with the
other bids that the only reasonable explanation for the errors was in
those totals. See DeRalco, Inc., B-205120, May 6, 1982, 82-1 C.P.D. P
430. Indeed, we note that GTE's entered extended total for maintenance
is much more consistent with UDN's extended total of $350,633 than with
the $96,340.54 total to which the VA corrected the bid. While the VA's
analysis provides one explanation for the errors, it is just as likely
that the mistake in the maintenance entries was in the unit price and
the mistake in the telephone system total was in one of the line items
that comprised it. Under such circumstances, it was improper for the VA
to correct either error as an apparent clerical error. See Broken Lance
Enterprises, Inc., 57 Comp. Gen. 410 (1978), 78-1 C.P.D. P 279.
Since those are not correctable as clerical errors, whether they, as
well as whether the alleged mistakes involving the installation/purchase
costs, otherwise are correctable must be determined pursuant to FAR, 48
C.F.R. Sec. 14.406-3(a). Under this provision, an agency may permit a
bidder to correct mistakes in its bid if the bidder provides clear and
convincing evidence of the existence of the mistake and the bid actually
intended. The VA's decision to permit GTE to correct the errors in its
bid is unreasonaole in light of that requirement.
GTE did not submit any documentation to support its allegation that a
mistake existed or its intended bid for maintenance. Thus, the only
evidence that this mistake exists is in the bid itself. Since we have
concluded that the bid did not establish GTE's intended bid in that
respect, there is no basis on which correction of this mistake may be
permitted. Concerning the telephone system total, although GTE's late
modification attempting to increase a similar entry elsewhere in the bid
might be viewed as evidence of the bid for the telephone system that the
firm actually intended, see Schoutten Construction Co., B-215663, Sept.
18, 1984, 84-2 C.P.D. P 318, we have no reason to believe that the
original bid actually was mistaken in that regard and not rethought.
The late modification simply does not establish GTE's intended bid by
the clear and convincing evidence required to permit correction.
The VA contends that the correction of the installation/purchase
total was proper because the internal pricing sheet and explanation
submitted by GTE established by clear and convincing evidence that GTE
intended to bid $836,233.01 rather than $906,572.21. We do not agree.
First, there is no indication in GTE's bid that the total is in error.
The total is the correct total of its eight components, and the VA does
not assert that the total is out of line with the other bids. See
Russell Drilling Co., 64 Comp. Gen. 698 (1985), 85-2 C.P.D. P 87.
Second, although a bidder's worksheets may provide sufficient
evidence to permit correction of a mistake in bid, if they show how the
mistake occurred and the intended bid price, Tektronix Inc., B-219981,
supra, the 21 line items on GTE's single contract pricing sheet do not,
in most instances, correspond to the line items on the form submitted to
the VA with GTE's bid, and there is no indication as to how the costs of
the individual line items were calculated. See A&J Construction Co.,
Inc., B-213495, Apr. 18, 1984, 84-1 C.P.D. P 443. Further, although GTE
asserts that a secretary transferred the wrong numbers from the internal
pricing sheet to the form submitted with GTE's bid, there is no number
on the internal pricing sheet close to the $906,572.21 figure GTE
entered in its bid for the total installation/purchase cost; while the
secretary may have made a typographical error, this is not established
by the evidence in the record. Consequently, the evidence submitted by
GTE was not sufficient to permit GTE to correct its bid in this respect.
The VA and GTE also assert that UDN's protest should be denied
because GTE's bid was low as corrected and uncorrected. In this regard,
we have held that where it is clear that the intended 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 C.P.D. P 125, or to correct its bid, see R&R Contracting,
Inc., B-217412, Mar. 1, 1985, 85-1 C.P.D. P 260, even where the intended
bid cannot be determined exactly. We do not agree that the facts
presented by the present protest clearly establish that GTE's bid would
be low if corrected, however. The parties' assertion appears to presume
that all the errors (the largest of which is the maintenance cost
correction downward by $219,626.96) are correctable, or none are. We
note, however, that if only the error for the total cost of the phone
system is corrected--an upward correction--so that the maintenance cost
is counted as $315,967.50 as entered, and the installation/purchase cost
also is considered as entered, GTE's total bid price no longer would be
low. Since it thus is not clear that GTE's corrected bid would remain
low in every situation, GTE may not correct its bid or waive the alleged
errors on this theory.
Because of the conclusion we have reached we need not consider UDN's
allegation that GTE's bid was nonresponsive.
By separate letter to the Administrator of Veterans Affairs, we are
recommending that the VA terminate, for the convenience of the
government, the contract awarded to GTE and award the contract to UDN,
if UDN is otherwise eligible to receive the award. Since we are
recommending that the contract awarded to GTE be terminated and a
contract be awarded to UDN, the protester is not entitled to protest or
bid preparation costs. 4 C.F.R. Sec. 21.6 (1986).
The protest is sustained.
Comptroller General
of the United States
Matter of: Yourdon, Inc.
File: B-222416
Date: July 3, 1986
DIGEST
Protest against award of contract on the basis of initial proposals
is denied where the solicitation advised offerors of that possibility
and where a price analysis based on the other offers received and the
actual cost of the same services under the previous contract demonstrate
that acceptance of an initial proposal will result in the lowest overall
cost to the government at a fair and reasonable price.
DECISION
Yourdon, Inc. protests the Department of the Army's contract award to
BTG, Inc. under request for proposals (RFP) No. DABT60-86-R-0005, for
the instruction of certain courses at the Computer Science School, Fort
Benjamin Harrison, Indiana. Yourdon contends that the agency improperly
awarded the contract on the basis of initial proposals, without holding
any discussions.
We deny the protest in part and dismiss it in part.
Four proposals were received in response to the RFP. The technical
evaluation board reviewed these proposals and determined that only the
proposals submitted by Yourdon and by BTG were acceptable. BTG's offer
was low.
Under Section M-5 of the RFP, "Basis of Award," the solicitation
advised prospective offerors that award would be made to that offeror
who submitted an acceptable technical/managerial proposal, and had the
lowest evaluated price for satisfactory completion of the requirement.
This section of the solicitation also included a notice that a contract
could be awarded without any discussions, on the basis of initial
offers, in accordance with Federal Acqisition Regulation (FAR) Sec.
52.215-16 "Contract Award."
A contract specialist conducted a price analysis, comparing the
proposed prices with each other, with the actual cost of the sane items
under a different contract, and with the independent government
estimate. The agency determined on this basis that the prices received
in response to the RFP were fair and reasonable, and that award to BTG
on the basis of its initial proposal would result in the lowest cost to
the government. The contract specialist recommended that award be made
on a firm fixed-price basis to BTG, without establishing a competitive
range or conducting negotiations.
The protester contends that the agency cannot clearly demonstrate
that acceptance of the most favorable initial proposal would result in
the lowest cost to the government. In support of this contention,
Yourdon notes that its initial proposal included an "8-volume technical
and managerial reference library," and that the decision to omit this
one expense would have reduced Yourdon's cost and made its proposal
lower in price than BTG's.
The agency argues that it had specifically reserved the right to make
an award based on initial proposals, and that it was proper to do so in
this case because the price of the low proposal was reasonable.
Regarding the protester's argument that it could have reduced its price
if discussions had been held, the agency notes that the solicitation
required the contractor to provide training aids and instructional
materials, and that the protester could not simply reduce its price by
omitting the texts it had proposed. Alternatively, the agency asserts
that to the extent inexpensive texts could be substituted for the
proposed reference books, the protester had exercised its business
judgment in offering the more expensive materials and had been placed on
notice that the contract might be awarded without negotiations.
Under the Competition in Contracting Act of 1984, award may be made
on the basis of initial proposals 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 proppsal will result in the lowest overall cost
to the government. 10 U.S.C.A. Sec. 2305(a)(2)(B)(ii), (b)(4)(A)(ii)
(West Supp. 1985). As previously noted, the RFP incorporated the FAR
"Contract Awards" clause, 48 C.F.R. Sec. 52.215-16 (1984). This
provision expressly advised offerors that the government might award a
contract "on the basis of initial offers received, without discussions,"
and that offerors thus should include their best terms in their initial
proposals. In these circumstances, we believe the RFP gave prospective
offerors sufficient notice that discussions might not be held. In our
view, the protester should have known that it had to present its most
advantageous offer in its initial proposal, or risk having no
opportunity to amend its proposal after negotiations. See GM
Industries, Inc., B-218331, Apr. 15, 1985, 85-1 CPD P 431. We therefore
find no merit to the contention that the agency should have conducted
negotiations in an attempt to reduce the costs associated with certain
aspects of the protester's proposal, such as the texts Yourdon proposed.
With respect to Yourdon's allegation that the agency has not clearly
demonstrated that award to BTG would "result in the lowest overall cost
to the Government at a fair and reasonable price," as required by FAR
Sec. 15.610(a) (3), we note that BTG's price (for the initial contract
period as well as each of the 3 option years) was the lowest of the four
offers received. It also was significantly lower than the previous
contractor's offer under this RFP, as well as the price paid for the
same seervces under the previous contract. Under these circumstances,
we find no basis to question the agency's determination that based on
the actual competition and prior cost experience, the FAR requirements
for award on an initial proposal basis were satisfied. 1/
The protester also alleges that the RFP statement of work contained
obvious errors, such as having courses scheduled to take place during
holidays, and that the RFP was therefore so flawed that it is unlikely
that an award decision could be made without holding discussions. To
the extent this portion of the protest is based on alleged improprieties
apparent on the face of the solicitation, it is untimely and will not be
considered. Our Bid Protest Regulations provide that such protests must
be filed with our Office prior to the initial closing date for receipt
of proposals, but Yourdon did not protest this issue until after the
award had been made. See 4 C.F.R. Sec. 21.2(a) (1) (1985). To the
extent this portion of the protest may support Yourdon's basic premise
that negotiations were required, we find it to be without merit. The
agency points out that the class schedule in the RFP notified offerors
that the dates established for courses were subject to being changed by
plus or minus 3 working days. Any adjustments in this area could
therefore be made after award, and would not require negotiations.
Accordingly, we find no merit to Yourdon's contentions in this regard.
Yourdon contends that discussions were not held because the award was
rushed improperly. The protester notes in this regard that "it took
over 4 months to get the solicitation issued, but only 19 days to
award," and concludes that the agency was more concerned with starting
performance on schedule than it was in obtaining the best value. The
agency responds that only four proposals were received, and that the 3
person evaluation board did not require more than 2 days to complete
their evaluation. The agency states that this left ample time for the
contract specialist to perform the price anaysis.
Our review of the record in this case simply gives no indication that
the protester was prejudiced by the pace and duration of the Army's
evaluation and award decision process. The Army, and not our Office,
was in the best position to determine the amount of time necessary to
conduct a satisfactory evaluation of proposals in this procurement, and
the Army believes it devoted sufficient time and effort to the
evaluation here. Our Office is concerned only with whether the
evaluation was fair, reasonable, and consistent with the stated
evaluation criteria. See Hoboken Shipyards, Inc. et al., B-219428 et
al., Oct. 17, 1985, 85-2 CPD P 416 at 14. There is no evidence that the
evaluation did not meet this standard and we have already found that the
contract award without discussions was proper here. We therefore deny
this basis of protest.
The protester also has questioned the awardee's qualifications as a
known training firm." This basis of the protest essentially is a
challenge to the contracting agency's affirmative determination that BTG
is a responsible offeror. Our Office will not consider a protest of an
affirmative responsibility determination unless there is a showing
either that the determination may have been made fraudulently or in bad
faith, or that definitive responsibility criteria have not been met.
Trail Blazer Services, B-220724, Feb. 12, 1986, 86-1 CPD P 275. Neither
circumstance is present here; accordingly, we dismiss this ground of
Yourdon's protest.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
FOOTNOTES
1/ We note that Yourdon challenges the relevance of the prior
contract price because the contract allegedly was awarded on a sole
source basis. The agency states, however, that the prior solicitation
was issued on a competitive basis, although only one offer was received.
Thus, the prior contract in fact was not a sole source contract. See
FAR Sec. 6.003.
File: B-222413.2
Date: May 25, 1990
Matter of: Tycho Technology, Inc.
DIGEST
Protest that agency was required to issue a new solicitation to test
market before exercising an option is denied where agency reasonably
determined that option was the most advantageous offer based upon
informal price analysis, considering product availability and other
factors.
COUNSEL
Mr. Karl Kneisel, for the protester.
James K. White, Esq., and Stacia Davis Le Blanc, Esq., Office of the
General Counsel, Department of Commerce, for the agency.
Susan K. McAuliffe, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DECISION
Tycho Technology, Inc., protests the proposed exercise of an option by
the National Oceanic and Atmospheric Administration (NOAA), Department
of Commerce, to procure additional wind profilers from Unisys
Corporation under contract No. NA-86-QA-C-101. Tycho challenges the
informal price analysis upon which the agency based its determination to
exercise the option and argues that the agency should have issued a new
solicitation instead.
We deny the protest.
The basic contract was awarded by NOAA, through the National Data Buoy
Center of the National Weather Service, to Sperry Corporation, now
Unisys, on June 18, 1986, for the design, development, testing, and
delivery of prototype wind profiler systems and three production units,
as the result of a full and open competition in which seven offerors,
including Tycho, submitted proposals. The contract included options for
additional production units. The agency has procured 30 additional
units under Option 3 of the contract. Here, the agency proposes to
procure five additional wind profiler systems under option 4 which,
under the terms of the modified contract, may be exercised through
December 31, 1990. These five wind profilers are proposed for use by
the agency's Alaskan Region National Weather Service to monitor the
volcano plume and ash fallout from Mount Redoubt that is causing air
traffic disruption in the Anchorage, Alaska area. The profilers would
provide air traffic controllers with necessary information to route
aircraft away from the volcano plume area. The agency has determined
that exercising option 4 under it existing contract, at a unit price of
$424,367, is the most advantageous method, price and other factors
considered, of procuring the five wind profiler systems.
Tycho contends that the agency's informal price analysis is an
insufficient basis for its proposed exercise of the option. Rather,
Tycho argues that without issuing a new solicitation, the agency cannot
adequately determine that the exercise of the option is "the most
advantageous method of fulfilling the Government's need, price and other
factors . . . considered," as required under Federal Acquisition
Regulation (FAR) Sec. 17.207(c)(3) (FAC 84-49). The protester basically
maintains that on resolicitation, Tycho would likely offer a price lower
than Unisys' option price. Tycho also alleges that its January 4, 1990
proposal appears to have been ignored by the agency.
The agency points out that an informal analysis of prices or an
examination of the market which indicates "that the option price is
better than prices available in the market or that the option is the
more advantageous offer" is one of three methods specifically set forth
in the FAR as a basis for determining whether to exercise an option.
FAR Sec. 17.207(d) (2). NOAA states that it fully evaluated Tycho's
unsolicited proposal and found that Tycho's unit price of $465,421 was
in excess of the option price of $424,367, and that it did not include
certain other additional items, such as training and manuals, which were
included in Unisys' contract option price. NOAA further contends that
in light of its scheduling and environmental considerations, its
concerns about hardware, communications and satellite compatibility, and
the fact that a market survey of the five remaining original offerors
indicated that no other current supplier was available, it properly
determined that the proposed exercise of option 4, which also offered
the lowest price, was the most advantageous method of fulfilling the
government's needs. We agree.
Our Office will not question the exercise of an option unless the
protester shows that applicable regulations were not followed or that
the agency's determination to exercise the option, rather than conduct a
new procurement, was unreasonable. Automation Management Corp.,
B-224924, Jan. 15, 1987, 87-1 CPD Par. 61. The FAR grants contracting
officers wide discretion in determining what constitutes a reasonable
informal price analysis or examination of the market for available
prices. See Action Mfg. Co., 66 Comp. Gen. 463 (1987), 87-1 CPD Par.
518. The FAR provides, however, that if it is anticipated (e.g.,
through an informal price analysis) that the best price available is the
option price or that the exercise of the option presents the more
advantageous offer, the contracting officer should not issue a new
solicitation to test the market. FAR Sec. 17.207(d)(1).
In this case, since we find no basis to question the propriety of the
agency's informal price analysis, we do not find that NOAA was required,
as the protester suggests, to issue a new solicitation in order to test
the market. As stated above, the FAR specifically provides that an
informal price analysis is a proper method of determining whether an
option is the more advantageous offer, and that if as a result of such
analysis it is anticipated that the option price is the best price
available, a new solicitation should not be issued. FAR Sec.
17.207(d)(2); FAR Sec. 17.207(d)(1). Here, the agency properly
executed a "determination and findings" authorizing the exercise of
option 4 based upon the results of its informal price analysis which
included its evaluation of Tycho's proposal and a market survey of
potential suppliers. The record shows that when Tycho's offered price
is compared to Unisys' contract option price, considering the same
optional equipment and services, Tycho's proposed unit price is about
$40,000 higher than the option unit price, which would result in a total
price disparity of approximately $200,000 for the five wind profilers.
1/ The agency also found that, unlike Unisys' option price, Tycho's
price did not include the provision of information manuals, or on-site
and factory training. We find reasonable the agency's determination
that its proposed exercise of the option offers the best price
available.
Further, we find that other factors support the exercise of this
option. First, we note the relatively short period of time available to
set up the profilers, due to adverse weather conditions and an immediate
need to direct air traffic from the plume area. The exercise of the
option eliminates the need to delay for testing to ensure the
compatibility of Tycho's product with the present communications system.
Second, the agency currently maintains $1 million of spare parts to
support the Unisys system which will be used to support the units
procured under this option. Tycho has not shown that these concerns are
unreasonable. Therefore, we find that the agency reasonably determined,
in accordance with the requirements set out at FAR Sec. 17.207(c), that
the exercise of option 4 under its existing contract provided the most
advantageous offer to the government.
The protest is denied.
James F. Hinchman, General Counsel
FOOTNOTES
1/ Tycho alleges that its current model includes additional features
such as data processing not available under the Unisys basic model and
which Unisys offered as separately priced optional items. Thus, Tycho
asserts that the agency's comparative evaluation of costs is flawed.
The record shows, however, that the agency's cost comparison was based
on the same features and that these features are included in Unisys'
option price.
Matter of: Integrity Management International, Inc.
File: B-222405.4
Date: February 26, 1987
DIGEST
1. Compelling reason exists to cancel invitation for bids (IFB) after
bid opening where specifications do not adequately describe government's
actual needs.
2. While issuance of certificate of competency is conclusive as to
matters of responsibility, it does not require the contracting agency to
make award under a defective IFB where agency reasonably decides that a
compelling reason exists for canceling the IFB.
3. Protester who unsuccessfully challenges contracting agency's
grounds for canceling IFB is not entitled to recover its bid preparation
costs or the costs of filing and pursuing the protest, since the
cancellation was proper; or costs incurred in anticipation of receiving
award under the canceled IFB, since no legal basis exists for recovering
such costs.
DECISION
Integrity Management International, Inc. protests the cancellation of
invitation for bids (IFB) No. DAKF03-86-B0014, issued by the Army for
food services at Fort Hunter Liggett and Fort Ord, California. The
protester challenges the Army's grounds for canceling the IFB and
requests recovery of the costs it incurred in anticipation of receiving
award under the IFB, as well as its bid preparation costs and the costs
of filing and pursuing the protest. We deny the protest and the request
for costs.
The IFB, issued on November 5, 1985, as a small business set-aside,
called for award of a fixed-price requirements contract for full food
services, including meal preparation and dining facility attendance
service. From November 6 through August 20, 1986, 18 amendments to the
IFB were issued. While most involved postponing the bid opening date
and other minor revisions, at least five of the amendments made numerous
substantive changes to the IFB. Amendment No. 15, for example, was
issued on July 31 in response to a protest to our Office by another
bidder, Luzon Services, Inc. (B-222405.2, withdrawn July 28, 1986),
contending that various provisions of the IFB were defective.
Because of the delay resulting from the amendments, the basic
contract period was changed from January 1 - April 30, 1986, to October
1, 1986 - April 30, 1987, with two 1-year options. Bid opening was held
on September 3. Sixteen firms submitted bids ranging from $5.6 million
to $24 million; the government estimate was $16.2 million.
After the apparent low bidder was allowed to withdraw its bid, the
protester, the second low bidder, was in line for award. Because of the
difference between the protester's bid ($9.1 million) and the government
estimate ($16.2 million), however, the contracting officer found the
protester nonresponsible, concluding that the protester lacked the
financial capacity to incur a potential $7 million loss over the life of
the contract. On September 26, the contracting officer sent a request
to the Small Business Administration (SBA) for possible issuance of a
certificate of competency (COC) for the protester. By letter dated
October 24, the Army notified the protester that the IFB had been
canceled. According to the Army, the contracting officer received
notice from the SBA on October 27 that a COC had been granted to the
protester. On November 3, the protester filed its protest with our
Office.
The protester challenges the Army's grounds for the cancellation and
argues that, once the SBA issued the COC, it was entitled to receive
award under the IFB as the lowest responsive, responsible bidder. The
protester also contends that, even if the cancellation was proper, it
should be allowed to recover the costs it incurred in anticipation of
receiving the contract award, as well as its bid preparation costs and
the costs of filing and pursuing the protest. We find these arguments
to be without merit.
Under the Federal Acquisition Regulation (FAR), 48 C.F.R. Sec.
14.404-1 (a) (1) (1986), a contracting agency may cancel an IFB after
bid opening where there is a compelling reason to do so. The use of
specifications which do not adequately describe the government's actual
needs generally provides a compelling reason for cancellation. FAR, 48
C.F.R. Sec. 14.404-1(c) (1); PetroElec Construction Co., Inc.,
B-216932, Mar. 27, 1985, 85-1 CPD P 356.
Here, the Army states that the IFB was canceled because of numerous
defective provisions which either misstated the Army's needs or made it
virtually impossible for the bidders to determine the Army's actual
requirements. With regard to the description of the Army's needs, for
example, the estimate in the IFB for the number of meals to be served
was based on a 3-month period which the Army later determined was not
representative of typical troop strength; the IFB also failed to
provide for incorporation into the contract of the quality assurance
plan referenced in one of the technical exhibits. As examples of
defects in the IFB which could affect the preparation of bids, the IFB
required field feeding of troops but had no provision in the bidding
schedule for payment for the service, and lacked any workload data with
regard to the requirement that the contractor pick up, deliver and
unload food supplies. In addition, in the Army's view, the sheer number
of amendments caused great difficulty in accurately tracking the
revisions to the IFB.
In our view, these IFB provisions, which are representative of
numerous additional defects the Army found in the IFB, together with the
wide range of bids received, support the Army's conclusion that its
requirements were not clearly stated in the IFB. Further, the protester
does not address the defects identified by the Army, and, in fact, in
its comments on the Army's report on the protest, concedes that the IFB
was defective. Accordingly, we see no basis on which to question the
contracting officer's conclusion that the IFB was so defective as to
justify cancellation.
Since the cancellation was proper, there is no merit to the
protester's contention that it was entitled to award under the IFB once
the SBA issued it a COC. Even assuming, as the protester contends, that
the COC was issued before the IFB was canceled, 1/ the issuance of a COC
only precludes the agency from requiring the bidder to meet any other
standards of responsibility, if a contract is to be awarded; it does
not compel the agency to make award under a defective solicitation.
Intercomp Co., B-213059, May 22, 1984, 84-1 CPD P 540, aff'd on
reconsideration, B-213059.2, July 9, 1984, 84-2 CPD P 21.
The protester also contends that the defects in the IFB should have
been apparent to the Army much earlier in the procurement, and that, by
failing to cancel the IFB sooner, the Army induced the protester to
incur costs in anticipation of receiving the contract. The protester
argues that it should be allowed to recover these costs, as well as its
bid preparation costs and the costs of filing and pursuing the protest.
We disagree.
As a preliminary matter, a contracting agency is not precluded from
canceling an IFB after bid opening simply because, prior to bid opening,
it failed to correct a deficiency in the IFB. Meds Marketing, Inc.,
B-213352, Mar. 16, 1984, 84-1 CPD P 318. Since we do not find the
cancellation of the IFB improper, we have no basis under our Bid Protest
Regulations to allow the protester to recover either its bid preparation
costs or its protest costs. 4 C.F.R. Sec. 21.6(d) and (e) (1986);
Contemporary Roofing, Inc., B-222691, June 2, 1986, 86-1 CPD P 510.
Finally, we know of no basis for allowing a protester to recover costs
incurred in anticipation of receiving a contract award. MIMCO, Inc.,
B-210647.2, Dec. 27, 1983, 84-1 CPD P 22.
The protest and the request for costs are denied.
Harry R. Van Cleve
General Counsel
FOOTNOTE
1/ The contracting officer states that the SBA letter advising of the
issuance of the COC, dated October 20, was received on October 27; the
IFB cancellation notice to the protester was dated October 24. The
protester states that it "suspects" that the Army received the SBA
letter before October 27, and that, in any event, the cancellation
notice, while dated October 24, was not postmarked until October 28,
after the contracting officer states that the SBA letter was received.
B-222392
October 16, 1987
DIGEST
On reconsideration, relief is granted an Army supervising financial
officer for an improper payment. Additional information submitted
supports conclusion that the officer maintained and policed an adequate
system of procedures and controls to avoid errors.
Brigadier General B. W. Hall
Deputy Commander
U.S. Army Finance and Accounting Center
Indianapolis, Indiana 46249
Dear General Hall:
This is in response to your request of July 21, 1987, that we
reconsider our decision to deny relief to Lt. Col. David B. Armstrong,
Finance Corps, DSSN 6321, Finance and Accounting Officer, 106th Area
Finance Support Center, APO New York, for an improper payment of $533.06
in his account. On the basis of the additional information furnished in
your submission, we grant relief.
The improper payment occurred when a Treasury check representing the
tax refund of Reginald and Bobette Woods was cashed over two fraudulent
endorsements. In our original decision, we denied relief because the
record presented to us did not contain the necessary evidence to support
a relief request under 31 U.S.C. Sec. 3527(c). However, in your request
for reconsideration you have provided information furnished by
Lieutenant Colonel Armstrong, including a copy of the check cashing
procedures in effect when the improper payment was made, that
demonstrate that Lieutenant Colonel Armstrong maintained an adequate
system of procedures and controls to avoid errors and took steps to
ensure the system's implementation and effectiveness. Therefore, it
appears that the loss involved here was a result of criminal activity
over which Lieutenant Colonel Armstrong had no control. Accordingly, on
the basis of the information provided in your reconsideration request,
we grant relief.
Sincerely yours,
(Mrs.) Rollee H. Efros
Associate General Counsel
FILE: B-222385 DATE: July 14, 1986
MATTER OF: Coultas Logging, Inc.
DIGEST:
Timber sale officer properly reopened an oral auction after he had
made an ambiguous announcement about the time remaining for submitting
bids that resulted in half the bidders losing an opportunity to submit
higher bids.
Coultas Logging, Inc. (Coultas), protests the oral auction procedures
used by the Forest Service, U.S. Department of Agriculture, in the Lolo
National Forest Borax Timber Sale. After announcing that bidding had
closed with Coultas' bid, the sale officer extended the time for oral
bidding because other bidders immediately expressed a desire to bid.
Coultas still was the successful bidder, but wants the benefit of the
lower price it offered before the auction was extended.
The oral auction included only those bidders who had previously
submitted sealed, written bids meeting a minimum acceptable bid price
established by the announcement of the sale. Prior to beginning the
auction, the sale officer advised the four participating bidders that
after the correct total for the previous high bid had been posted, there
would be only 1 minute to submit a new bid. The bidders were further
advised that an announcement would be made when 45 seconds of the minute
had elapsed. Bidders were asked if they had any questions regarding
these instructions, and none was raised.
After Coultas submitted the high bid of $7.25 per thousand board feet
the sale off icer announced "45 seconds," and the 1 minute period then
elapsed without any further bid being submitted. The sale officer
announced that bidding was closed. Two of the bidders participating in
the auction immediately protested, stating that they believed the 45
second announcement to mean that 45 seconds remained in which to bid.
Coultas and the remaining bidder stated that they had understood the
instruction to be that the 45 second announcement meant that 15 seconds
remained for submitting a bid. Coultas stated that if bidding were
reopened it would protest this action. The sale officer determined that
in view of the misunderstanding of the rules and the desire of bidders
to continue bidding, it was in the government's best interest to clarify
the ground rules and reopen the bidding. After bidding was resumed,
Coultas was the eventual successful bidder with a price of $16.25.
The Forest Service contends that the sale was conducted in accordance
with the applicable timber sale regulations and the general principles
of federal contract law. Pointing out that 36 C.F.R. Sec. 223.89(a)
(1985) provides that sale procedures shall insure that "open and fair
competition" occurs and "that the Federal Government receives not less
than fair market value for the public resource," the agency contends
that the fair market value of the sale had not been established prior to
the reopening. The agency further contends that in view of the
confusion regarding the sale procedures, the sale officer acted
reasonably in taking time to clarify the bidding rules and then resuming
bidding. Coultas argues that reopening the bidding was improper since 1
minute had elapsed after Coultas' bid of $7.25, the sale officer
allegedly had announced the contract was awarded to Coultas, and all
bidders had been instructed on the rules governing the auction.
We conclude that the sale officer's decision to reopen bidding was
proper. First, as the forest service points out, the oral auction
procedures had to insure open and fair competition. 36 C.F.R. Sec.
223.89(a). Although the sale officer had instructed bidders that an
announcement would be made 45 seconds into the bidding period, that did
not preclude other announcements. The announcement of "45 seconds" was
ambiguous regarding whether 45 seconds remained or had transpired in the
1-minute bidding period. Consequently, the four bidders were divided
equally in their understanding of the time announcements, resulting in
two bidders losing the opportunity to submit higher bids. The sale
officer should have announced either that "45 seconds have elapsed" or
"15 seconds remain." The procedures therefore were not adequate to
insure open and fair competition.
Further, the auction itself did not effect a binding
contract since applicable regulations provide that an award is made upon
a satisfactory showing of the highest bidder's ability to meet financial
requirements and any other conditions of sale, and that the forest
Service, retains discretion to reject all bids or to reject individual
bids under certain circumstances. See 36 C.F.R. Sec. 223.100. Given
the confusing announcement of the time for bidding and the fact that the
auction itself did not result in a binding contract, we do not think
that the sale officer abused his discretion in clarifying the ground
rules and reopening the bidding.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Technical Sergeant Crafton E. Barnett, USAF Excess Weight
- Household Goods
File: B-222382
Date: July 10, 1987
DIGEST
1. The question of whether and to what extent authorized weights have
been exceeded in the shipment of household goods by members of the
uniformed services is a matter primarily for administrative
determination. Ordinarily, the administrative determination will not be
questioned in the absence of evidence showing it to be clearly in error.
2. Evidence of the weight of household goods when placed in
nontemporary storage is not determinative of the weight of these goods
when taken out of storage so as to relieve the member of his liability
for excess weight based on the higher line-haul shipment. The heavier
line-haul weight may be due to several factors including the use of
different scales, the use of storage materials which are not removed
before shipping, and moisture absorption while in storage.
3. The long standing practice of the government to accept the lesser
weight when the same household goods are reweighed does not apply
separately to a shipment in storage and to a line-haul shipment so as to
relieve the member of his liability for excess weight. The rule applies
only to the line-haul shipment, which was not reweighed. 49 C.F.R.
Sec. 1056.7 (1985).
DECISION
The Director, Department of the Air Force, Joint Personal Property
Shipping Office (JPPSO) San Antonio, Texas, requests reconsideration of
our Claims Group's settlement of November 25, 1985. The settlement
partially relieved the indebtedness of Air Force Technical Sergeant
Crafton E. Barnett for excess costs of $319.96, in connection with the
transportation of his household goods to his home of record upon his
retirement. The question presented is whether the lower weight recorded
for the household goods in storage or the higher weight recorded for the
line-haul transportation of the household goods to the member's home of
record is the applicable weight for the determination of his
indebtedness. For reasons that follow, we concluded that Sergeant
Barnett is liable for the higher weight.
BACKGROUND
In June 1978, Sergeant Barnett made three separate shipments of
household goods and personal effects from Guam to his new permanent duty
station, Shaw Air Force Base, South Carolina. The shipments were
rerouted to Greer, South Carolina, since the member had retired, and
Greer was his home of record. In addition to the three overseas
shipments, Sergeant Barnett had one lot of household goods in
nontemporary storage in Kissimmee, Florida. The household goods in
storage weighed 3,340 pounds, and they were billed and paid for by the
government on this basis. However, when the household goods were
shipped from Kissimmee to Greer, they were weighed again. Thus, the
government was billed for the line-haul shipment on the basis of the new
weight of 4,570 pounds, and freight charges were paid for on that basis.
Both the storage and line-haul shipment weights are supported by valid
weight certificates.
The combined weight of Sergeant Barnett's household goods exceeded
his weight allowance by 1,768 pounds, since members in the grade of
Sergeant Barnett were authorized to ship 8,000 pounds of household goods
in connection with retirement to home of record. 1/ This resulted in a
total indebtedness of $319.96, of which a portion ($226.62) has been
collected from the member's retired pay.
Sergeant Barnett protested his indebtedness because of the
discrepancy of 1,230 pounds between the weight of the household goods in
storage and its later delivered weight. Our Claims Group agreed with
the member and accepted the lower stored weight mainly on the basis that
it is the government's longstanding practice to accept the lesser weight
when the same household goods are reweighed.
The Director, JPPSO, requests a reconsideration of our Claims Group's
settlement on the basis that it conflicts with previous decisions of
this Office, that it would sponsor inconsistent application of the
rules, and that it would discriminate against those who previously paid
their debts according to these precedents.
OPINION
Section 406 of title 37, United States Code, provides for the
transportation of household effects of members of the uniformed services
to and from such places and within such weight allowances as may be
prescribed by the Secretary concerned. Implementing regulations are
contained in Chapter 8 of Volume 1 of the Joint Travel Regulations.
Under the law and regulations, the question of whether and to what
extent authorized weights have been exceeded in the shipment of
household effects is a matter primarily for administrative
determination. We ordinarily do not question an administrative
determination in that regard in the absence of evidence showing it to be
clearly in error. Major General William C. Burrows, USAF, B-198264, May
6, 1980.
In this case, there are certified weight certificates for both the
household goods in storage and for the same goods when they were
shipped, and the government was billed for and paid charges on that
basis. The Air Force has made an administrative determination that the
line-haul weight was correct, in spite of the discrepancy between the
stored and delivered weight. In the absence of any additional evidence
that an error did occur, we are bound by the Air Force determination.
Air Force regulations provide for a reweigh in this type of situation.
See paragraph 10003d, Personal Property Traffic Management Regulation
DOD 4500.34-R. However, the regulation is procedural in nature, and the
failure to fully follow procedural or instructional regulations standing
alone is not sufficient to relieve the member of the chargas for excess
weight. Major Arthur D. Eiff, USAF, B-207950, February 8, 1983.
The Director, JPPSO, is correct when he states that previous
decisions of this Office conflict with our Claims Group's determination.
In addition to the decision cited by the Director, JPPSO, B-156988,
August 2, 1965, reconsideration denied, B-156988, April 10, 1967, this
Office has had other occasions to decide cases in which the weight of
the goods when placed in storage differed from the weight of the goods
when taken out of storage. In the recent case of Lieutenant Colonel
Robert P. Moore, USAF, B-220877, June 25, 1986, we held that evidence of
the weight of household effects when placed in nontemporary storage is
not determinative of the member's liability because a higher weight when
the goods are taken out of storage may be due to several factors,
including the use of different scales, the use of storage materials
which are not removed before shipping, and moisture absorption while in
storage. See also B-153673, June 8, 1964.
We realize that 1,230 pounds is a rather large weight discrepancy;
however, the probability that there was an error in the weight
certificate for the goods when delivered to storage is equal to the
probability that an error occurred in the weight of the goods when
shipped to the home of record. Furthermore, there is no additional
supporting evidence to allow us to reach a contrary result.
We also agree with the Director, JPPSO, that, in the context of this
case, the longstanding practice of the government to accept the lesser
weight when the same household goods are reweighed does not apply. This
principle is more than a practice since it is usually published in the
carrier's tariff or tender and is provided for by regulation. See 49
C.F.R. Sec. 1056.7(c) (1985). See also Charles L. Eppright, B-210713,
March 28, 1984. However, this rule applies to each individual line-haul
shipment. See 49 C.F.R. Sec. 1056.7 (1985). Thus, we agree with the
Director, JPPSO, that this principle would not apply to household goods
placed in storage some 4 years earlier. It only applies to the shipment
out of storage, and since that shipment was not later reweighed, the
certified weight certificate of 4,570 pounds is the correct measure of
the member's liability.
Accordingly, there is no basis to conclude that the Air Force's
determination to use the line-haul weight of 4,570 pounds was incorrect.
Our Claims Group's settlement of November 25, 1985, is overruled, and
the member is liable for the uncollected portion of his debt of $93.34.
Comptroller General
of the United States
FOOTNOTE
1/ See 1 Joint Travel Regulation, para. M8003 (Change 301, March 1,
1978).
Matter of: Raymond W. Leone - Request for Backpay
File: B-222379
Date: April 10, 1987
DIGEST
1. This Office will not inquire into matters relative to a grievance
since such matters are within the jurisdiction of the employing agency
and the Office of Personnel Management. However, if an employee is
found to have undergone an unjustified or unwarranted personnel action,
we will authorize the payment of backpay under the provisions of the
Back Pay Act, 5 U.S.C. Sec. 5596 (1982).
2. Army civilian employee is not entitled to backpay and substitution
of sick leave for leave without pay on the sole basis of a favorable
grievance examiner's recommendation. The recommendation was denied at a
higher level, and the failure of Army officials to forward the
recommendation within 8 days as prescribed by agency regulations does
not take away the agency's discretionary authority to deny a
recommendation since the timeframes are only procedural guidelines.
DECISION
BACKGROUND
Mr. Raymond W. Leone, an employee of the Department of the Army, has
appealed the determination by our Claims Group in its settlement
Z-2844297, February 21, 1986, which denied his claim for backpay and
substitution of sick leave for leave without pay (LWOP). For the
reasons that follow, we uphold our Claims Group's determination.
Mr. Leone is currently employed by the Department of the Army, Fort
McPherson, Georgia, and was formerly employed by the Department of Army
in Europe. It was during this period of his employment in Europe that
the present claim arose. In January 1981, Mr. Leone accepted a
reassignment to another Army organization within Europe. A replacement
was recruited for his old position, and after his position had been
committed, Mr. Leone submitted his resignation with an effective date of
April 10, 1981. He was later granted an extension of his resignation
date by the Army to April 24, 1981. Before the effective date of his
resignation, Mr. Leone accepted a position with the Army in Fort Hood,
Texas, and he attempted to cancel his impending resignation. The Army
denied his request on the basis that the position was committed to a
replacement, and the Army placed Mr. Leone on LWOP so that he would not
have a break in service prior to his reporting to Fort.Hood in June
1981. Mr. Leone also applied for sick leave during the period he was on
LWOP, but his request was denied by the Army on the basis that it would
require a retroactive conversion of his LWOP to sick leave.
Mr. Leone filed a formal grievance on August 9, 1981, in which he
alleged that the Army refused to accept cancellation of his resignation,
that he was coerced into taking leave without pay, and that he was
denied a request to substitute sick leave for LWOP. The period of his
claim is from April 25 through June 7, 1981, and he is asking for
backpay and applicable cost of living and housing allowances, as well as
substitution of sick leave.
The United States Army Civilian Appellate Review Agency (USACARA)
found that Mr. Leone voluntarily chose to resign without any coercion.
However, the USACARA grievance examiner recommended, for various
reasons, that Mr. Leone be granted the relief he was seeking. Mr.
Leone's activity commander rejected the USACARA grievance examiner's
recommendation on April 13, 1982. The activity commander's decision was
later upheld by Headquarters, United States Army Europe and Seventh
Army, on August 2, 1982. 1/
Mr. Leone has continued to pursue his claim over the years 2/ and
filed a request with this Office to order the Army to award him backpay
for an unjustified personnel action under the provisions of 5 U.S.C.
Sec. 5596 (1982). Our Claims Group issued a settlement certificate on
February 21, 1986, denying Mr. Leone's request on the basis that this
Office does not have jurisdiction to review allegations of
irregularities in agency grievance procedures.
OPINION
Mr. Leone bases his request for reconsideration on the Army Civilian
Personnel Regulations (CPR) pertaining to grievance procedures. He
contends that such regulations are mandatory in effect and that because
the Army failed to transmit the USACARA grievance examiner's
recommendation to the next command level within 8 days, as prescribed by
CPR 771.3-13, the recommendation became final. He states that agencies
are not free to ignore their own regulations, and he cites to the case
of Spann v. McKenna, 615 F.2d 137 (3rd Cir. 1980), as authority for this
argument. Hence, he states that he is entitled to backpay under the
provisions of 5 U.S.C. Sec. 5596 (1982), and that we should order the
Army to comply with its regulations.
The General Accounting Office will not inquire into matters relative
to a grievance. Such matters are within the jurisdiction of the
employing agency and the Office of Personnel Management (OPM). Samuel
H. Stern, B-202098, April 22, 1982, Donald J. Tate, B-203622, January
19, 1982, and 5 C.F.R. Sec. 771.304 (1986). This Office will, however,
award backpay under the provisions of the Back Pay Act, 5 U.S.C. Sec.
5596 (1982), if an employee is found to have undergone an unjustified or
unwarranted personnel action. An unjustified or unwarranted personnel
action is defined in 5 C.F.R. Sec. 550.803 (1986), and refers to the
violation of a "regulation or mandatory personnel policy."
In addressing the issue as to whether the Army violated a
nondiscretionary administrative regulation in not forwarding the USACARA
grievance examiner's recommendation to the next command level within 8
days, we do not regard this regulatory provision as being absolute or
nondiscretionary in nature. The regulation merely provides procedural
guidelines for the Army to follow in processing grievances. This
conclusion is substantiated by the fact that the regulation does not
provide for any specific remedy or penalty in those circumstances where
the 8-day period is exceeded. In fact, the regulation contains many
other suggested guidelines that were not adhered to in this case,
including Mr. Leone's failure to submit a formal grievance within 5 days
after completion of informal proceedings. CPR 771.3-4a(2). Although
the USACARA grievance examiner held that extenuating circumstances
prevented Mr. Leone from filing a timely response, nevertheless the
submission did not conform to regulatory guidelines. We also note that
the USACARA's investigation took 7 months to complete and was therefore
not completed within the 35-day period prescribed in CPR 771.3-4a(4).
Mr. Leone also alleges that regulations pertaining to grievances as
published by OPM in the Federal Personnel Manual likewise have a
mandatory effect. However, we would point out that OPM's role in this
area is to review agency grievance systems and see that they are in
compliance with published guidelines. See 5 C.F.R. Sec. 771.304 (1986).
In fact, OPM originally published a suggested 90-day time limit for
completion of grievances. 5 C.F.R. Sec. 771.110 (1975). Such provision
is no longer published in the Code of Federal Regulations, and we have
held that such provision was merely a guideline. Stern, supra at page
6.
Mr. Leone also cites to the case of Spann v. McKenna, cited above, in
support of his contention that the Army must comply with its own
grievance procedures. However, we believe the Spann case does not
compel that result. In Spann a civilian employee of the Army
transferred between two positions at the same grade level. The
appointment to the new position was cancelled, and the employee was
reappointed to his former position without an opportunity to object to
these actions in advance. The employee grieved, and the USACARA
grievance examiner concluded that the cancellation and reassignment were
defective because of a failure by the Army to comply with its personnel
regulations governing the involuntary reassignment of civilian
employees. The grievance examiner held that the decision was binding on
the Army based on a CPR provision since it involved a procedural defect.
A higherlevel official in a USACARA regional office amended the
grievance examiner's decision to make it a recommendation rather than a
final and binding decision. The Army rejected the recommendation and
upheld the cancellation, and the employee filed suit in Federal court.
In Spann, the court upheld the USACARA grievance examiner and stated,
615 F.2d 137 at 140, that:
"The regulation imposes finality only on a finding "of a
regulatory or procedural defect." Findings of substantive defects,
by contrast, result only in recommendations to responsible of
ficials. See CPR 771.3-13. Since the grievance examiner's final
and binding decision does not affect the substantive merits of any
personnel action, the responsible official may repeat the action
if he proceeds in accordance with the regulations and procedures
that the grievance examiner has found applicable."
The case was remanded for disposition consistent with its holding.
The USACARA grievance examiner in Mr. Leone's case made a finding of
substantive defects and, as the quoted language in Spann indicates, such
finding results only in a recommendation to responsible officials. In
fact, both the court and Mr. Leone cite to the very same provision of
the Army regulations, CPR 771.3-13, but the court concludes that a
substantive grievance is only a recommendation.
Accordingly, since the USACARA grievance examiner's report was only a
recommendation, it was discretionary and did not have to be followed by
Army officials. Therefore, Mr. Leone's claim for backpay on this basis
is denied.
Comptroller General
of the United States
FOOTNOTES
1/ Although the record in this case is substantial, the final denial
of the grievance is not contained in the record.
2/ Several petitions to the Merit Systems Protection Board were
denied on the basis of lack of jurisdiction. MSPB Docket No. DC
07528510353, October 31, 1985; MSPB Case No. DC 07528211402, November
9, 1982.
Matter of: William L. Schaeffer, et al. - Premium Pay Night
Differential Pay Claims
File:
B-222378
Date: March 13, 1987
DIGEST
1. Three employees filed claims with their agency in 1985 for night
differential under 5 U.S.C. Sec. 5545 for overtime hours during the
period January 1, 1977, through. February 28, 1983. Those claims were
not received in the General Accounting Office (GAO) until March 20,
1986. Therefore, that portion of the claims which arose prior to March
20, 1980, may not be considered since 31 U.S.C. Sec. 3702(b) (1) (1982)
bars consideration of all claims presented to GAO more than 8 years
after the date the claims first accrued. Further, the filing with an
administrative office does not satisfy the requirement of the barring
act.
2. Employees working as petroleum inspectors are not entitled to
night differential under 5 U.S.C. Sec. 5545 for overtime performed prior
to February 28, 1983, since the nature of their work is not predictable
enough to allow the agency to schedule their hours in advance.
DECISION
This decision is in response to a request from Peter H. Tovar,
Chief, Accounting and Finance Division, Defense Logistics Agency. It
concerns the entitlement of three employees in the Los Angeles regional
office, Defense Contract Administration Services, to receive night
differential pay during the period January 1, 1977, through February 28,
1983.
SIX-YEAR BARRING ACT
Under 31 U.S.C. Sec. 3702(b) (1) (1982), a claim against the
government must be received here within 6 years of the date that claim
first accrued. We have held that timely receipt of a claim is a
condition precedent to a claimant's right to have that claim considered
on its merits. Furthermore, the filing of a claim with any other
government agency does not satisfy the requirements imposed by this
provision. Frederick C. Welch, 62 Comp. Gen. 80 (1982). We have also
held that a backpay claim accrues on the date the services were rendered
and on a daily basis for each day services are rendered thereafter. 29
Comp. Gen. 517 (1950); and Burke and Mole, 62 Comp. Gen. 275 (1983).
Our file shows that the earliest correspondence received in this
Office concerning the three claims for night differential pay was the
agency letter received here on March 20, 1986. Therefore, any
compensation claim which arose prior to March 20, 1980, is forever
barred from consideration. That portion of the claims which arose
during the period March 20, 1980, to February 28, 1983, is not so barred
and may be considered on the merits. We conclude, however, that the
claimants are not entitled to night differential pay for the period
after March 20, 1980, for the following reasons.
NIGHT DIFFERENTIAL
The claimants, Messrs. William L. Schaeffer, Jr., Cyril B. Coenen
and Ray D. Bronken, are all employed as petroleum inspectors by the
Defense Contract Administration Services, Los Angeles Region. They are
classified and paid under the General Schedule. Their duties,
generally, involve monitoring the loading or off-loading of petroleum
tankers. The tankers are required to lay off shore and can only dock
when called upon. As a result, while the inspectors do have regularly
scheduled duty hours, there are times when they are called in on an
on-call or emergency basis. The Defense Contract Administration
Services cannot schedule the inspectors' additional work since the
agency has no control over tanker docking and off-loading and it is
those events which cause the inspectors to be called to duty at odd
hours.
The law governing night, standby, irregular and hazardous duty
differential pay for General Schedule employees is found in 5 U.S.C.
Sec. 5545 (1982). Subsection (a) thereof authorizes the payment of
night differential of 10 percent of basic pay for "regularly scheduled"
work performed between the hours of 6 p.m. and 6 a.m.
The night differential pay claims of Messrs. Schaeffer, Coenen and
Bronken, are each broken down into three categories:
a. For overtime performed between 1800 - 2400 hours.
b. For continuation of duty overtime performed between 2400 - 0600
hours.
c. For "Call-Out" overtime performed between 2400 - 0600 hours.
According to the agency, category a night differential has been paid
in each case, but in categories b and c, it has not been paid and has
been submitted here as questionable, especially category c, on the basis
that it is administratively uncontrollable.
The claimants contend that our decision James Barber, et al., 63
Comp. Gen. 316 (1984), controls their entitlement. They also assert
entitlement based in part on regulations contained in the Federal
Register dated January 28, 1983. They have suggested that those
regulations provide, in all instances, that agencies are required to
control and schedule employees' weekly work load in advance, and if they
fail to do so, premium pay will be paid for work performed outside
regularly scheduled hours. However, as stated in James Barber, et al.,
63 Comp. Gen. at 321, the revised regulations may not be applied
retroactively. Thus, the principles stated in 59 Comp. Gen. 101 (1979)
govern employees' entitlement to night differential for work performed
between January 1977 and February 28, 1983. We held in 59 Comp. Gen.
101 that occasional overtime performed by an employee between the hours
of 6 p.m. and 6 a.m. which falls within a regularly scheduled tour of
duty, but not necessarily the employee's own, results in the payment of
night differential. 1/ Further, as part of the test to establish
regularly scheduled work, we stated in Customs Special Agents, B-191512,
October 27, 1978, that the overtime involved need not be subject to a
fixed hours-of-work schedule, but it must occur so frequently and at
such regular intervals as to fall into a predictable and discernible
pattern.
From the description of the type of work required to be performed by
the present claimants it is evident that it is virtually impossible for
any needed overtime work to be administratively scheduled in advance.
From the itemization by each of the claimants of the hours they worked
over nearly a 3-year period (March 20, 1980, through February 28, 1983),
it is equally evident that it was infrequent and at highly irregular
intervals, without any predictable pattern. In view thereof, night
differential payments may not be allowed for any of the situations
described in categories b and c. Accordingly, their claim is denied.
Collateral to the above, we note that in April and May 1985, each of
the three claimants were paid night differential on the basis of our
decision 59 Comp. Gen. 101, supra, for the overtime hours in category a,
for the entire period claimed from January 1, 1977, through February 28,
1983. Thus, the agency paid some amounts in violation of the 6-year
limitation period contained in 31 U.S.C. Sec. 3702(b) (1) (1982), and
ordinarily such erroneous payments should be recouped. See
Transportation Systems Center, 57 Comp. Gen. 441 (1978).
However, under the provision of 5 U.S.C. Sec. 5584 (1982), waiver of
a debt to the United States is authorized where there is an
administrative error, and no fault exists on the part of the employee
who received the payment. Under 4 C.F.R. Sec. 91.4(b) (1986), waiver
may be granted by the head of the agency when the amount of the
overpayment is not more than $500. Therefore, since the erroneous
amounts are less than $500 in each case, they should be considered for
waiver by the agency. If the issue of waiver cannot be resolved by the
agency, it should be forwarded to us for determination.
Comptroller General
of the United States
FOOTNOTE
1/ We were informally advised by the agency that category a overtime
was apparently paid on this basis.
Matter of: Major General Francis R. Gerard, USAFR
File: B-222331
Date: June 23, 1987
DIGEST
Under 10 U.S.C. Sec. 1331 members of the Reserve who reach age 60 and
have the requisite years of creditable service may apply for and receive
retired pay. Once a member has been granted retired pay under 10 U.S.C.
Sec. 1331, however, he or she may not be retained on active duty or in
active service under 10 U.S.C. Sec. 676.
DECISION
We have been asked to decide whether Major General Francis R. Gerard,
a Reserve officer in the New Jersey Air National Guard, may receive
retired pay under 10 U.S.C. Sec. 1331 and still maintain an active
status by virtue of being retained in an active status under 10 U.S.C.
Sec. 676. For the following reasons we conclude that a member who is
retained in active service under 10 U.S.C. Sec. 676 may not
simultaneously receive retired pay under 10 U.S.C. Sec. 1331.
BACKGROUND
Before reaching age 60 and thereby qualifying for retired pay under
10 U.S.C. Sec. 1331, General Gerard was retained in active service by
the Secretary of the Air Force under 10 U.S.C. Sec. 676. General
Gerard is of the view that, except for those periods when he performs
active or inactive duty for which he receives pay, he is entitled to
receive retired pay commencing when he attained age 60 and
simultaneously continue to remain in active service. This view is based
on our decisions which hold that a member's entitlement to retired pay
under 10 U.S.C. Sec. 1331 is not contingent on the member maintaining a
Reserve status. It is argued that since a member need not maintain any
status in order to receive retired pay for which he has qualified under
10 U.S.C. Sec. 1331, the fact that he is retained in active service
under 10 U.S.C. Sec. 676 and continues to receive credit toward the
computation of his retired pay should not preclude him from receiving
retired pay at the same time. As additional support for this view it is
noted that no specific provision of law precludes a member from
receiving retired pay under 10 U.S.C. Sec. 1331 and remaining in active
service.
ANALYSIS
As a general rule once a member of the Reserve qualifies for retired
pay by virtue of reaching age 60 and having at least 20 years of Federal
service, any additional service he performs is not creditable, nor may
such service be used in the computation of his retired pay under 10
U.S.C. Sec. 1331. See B-149907, October 20, 1960. An exception to this
general rule is provided by section 676 of title 10, which provides that
a Reserve member who has qualified for retired pay may be retained with
his consent on active duty or in active service and receive credit for
his service for all purposes.
As noted above, we have held that once an individual qualifies for
retired pay under 10 U.S.C. Sec. 1331, he need not maintain a Reserve
status to receive retired pay under that statute and its predecessor
laws. See 48 Comp. Gen. 699 (1969). The rationale behind this holding
is based on the congressional intent that a member of the Reserves who
has performed the requisite years of service and is discharged from his
Reserve component is still entitled to retired pay on attaining 60 years
of age. 28 Comp. Gen. 510 (1949). Additionally, a Reserve member's
entitlement to retired pay is not contingent on the member maintaining a
specific status such as that required for members of the Regular
components, since retired pay under 10 U.S.C. Sec. 1331 is in the nature
of a pension. See 48 Comp. Gen. 699, supra.
Thus, while a Reserve member may be in a retired status or no longer
have any status and receive retired pay under 10 U.S.C. Sec. 1331, it
does not follow that a member receiving such retired pay may be retained
in an active status and continue to receive credit for service performed
subsequent to receiving retired pay. Without specific statutory
authority, being in a status to receive retired pay and in an active
status would be inherently contradictory. In this regard, 10 U.S.C.
Sec. 676, which authorizes members who have achieved the qualifications
for retired pay under 10 U.S.C. Sec. 1331 to remain in an active status,
contemplates that they not leave active status, since it provides that
they be "* * * retained on active duty or in service in a reserve
component * * *." Grahl v. United States, 336 F.2d 199 (Ct. Cl. 1964);
Navarro v. United States, 155 Ct. Cl. 717 (1961). As the court in
Navarro observed, 10 U.S.C. Sec. 676 "in effect distinguishes the
concept of retention "on duty" in service, implying a continuing
relationship, to that of retirement from service, implying severance * *
*." 155 Ct. Cl. at 720. Therefore, once an individual elects to receive
retired pay under 10 U.S.C. Sec. 1331, he no longer has an active status
in which he can be retained.
In view of the foregoing, it is our view that once a reservist
qualifies for and elects to receive retired pay under 10 U.S.C. Sec.
1331, the authority of 10 U.S.C. Sec. 676 would no longer operate.
Accordingly, General Gerard may be retained in active service as a
Reserve officer under the authority of 10 U.S.C. Sec. 676, and service
performed during this retention period is creditable for all purposes.
However, if he chooses to receive retired pay, he may no longer hold
"retained" status as provided for in 10 U.S.C. Sec. 676.
Comptroller General
of the United States
Matter of: Airports Unlimited, Inc.
File: B-222324.2
Date: July 25, 1986
DIGEST:
1. Dismissal of protest for failure to furnish a copy to the
contracting officer within 1 day of filing with the General
Accounting Office (GAO) is not warranted where, as here, the
protester pursued its protest with the agency so the contracting
officer had actual knowledge of the grounds which formed the basis
of the protest and the protester, whose agency level protest was
never addressed by the agency, could have timely refiled the
protest with GAO when its agency level protest was later denied.
2. Where a contracting officer refers a nonresponsibility
determination to the Small Business Administration under the
certificate of competency procedure, the contracting officer is
required to withhold award for 15 business days.
3. Certificate of competency referral is received by the Small
Business Administration (SBA) for purposes of calculating the
15-day period for withholding award when the referral letter is
received in the cognizant SBA Regional Office. Post Office
receipt of deiivery is better proof of receipt than date stamp on
referral letter or office log of correspondence received.
4. The Small Business Administration (SBA) has conclusive
authority to review a contracting officer's nonresponsibility
determination by issuing or refusing to issue a certificate of
competency (COC). The General Accounting Office (GAO) generally
will not review a contracting officer's nonresponsibility
determination since such a review would be tantamont to a
substitution of its judgment for that of the SBA. While GAO has
reviewed nonresponsibility determinations relating to small
business bidders where the SBA refused to review the determination
or where the nonresponsibility determination was not referred to
the SBA it will not review a nonresponsibility determination where
SBA reviewed the matter but simply failed to issue a timely COC.
DECISION
Airports Unlimited, Inc., protests the award of a contract to We Try
Harder, Inc., under invitation for bids (IFB), No. FAPM-V5-67812-S,
issued by the General Services Administration (GSA) for leasing an
indefinite quantity of five different types of automobiles. Airports
contends that GSA illegally awarded the contract before time had expired
for the Small Business Administration (SBA) to issue a certificate of
competency (COC) to Airports. We deny the protest.
Regulatory Framework
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. 19.602-1(a) (1985). 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).
Facts
The solicitation, issued on November 4, 1985, contained five line
items. When bids were opened on December 5, Airports was the apparent
low bidder on line items 1, 3, 4 and 5. Based on this a preaward survey
was requested to determine that firm's responsibility to perform the
contract at an estimated award amount of approximately $3.9 million.
Subsequently, Airports was allowed to withdraw its bid on items 4 and 5.
Consequently, on January 22, the contracting officer informed the GSA
Credit and Finance Office that the estimated award amount for the
preaward survey should be adjusted downward to $1.3 million since
Airports was only eligible for award of items 1 and 3.
On January 27, the contracting officer received the GSA Credit and
Finance Office's recommendation that no award be made to Airports
because that firm lacked financial responsibility. Since Airports is a
small business, on February 13 the contracting officer forwarded by
certified nail the nonresponsibility determination to SBA's New York
Regional Office for consideration under the COC procedures. On February
21, the contracting officer received the return receipt for the referral
letter, signed and dated as having been received by SBA on February 18.
During a series of phone calls between GSA and officials in SBA's New
York Regional Office, a dispute arose as to the date that SBA received
the COC referral. The contracting officer, based on the return receipt,
believed that the referral was received by SBA on February 18, and thus
argued that the 15 days for SBA consideration of the referral was to
expire on March 11. SBA officials, however, advised GSA that they did
not receive the referral until February 19, so the 15-day period was to
expire on March 12. GSA officials also denied an SBA request for an
extension of the 15 days, arguing that it was imperative that award be
made as soon as possible because the manufacturers' cut-off dates for
current model year vehicle orders under the contract were only 2 weeks
away and orders had to be placed by customer agencies before those
dates. Finally, on March 11, GSA officials informed SBA that GSA would
proceed with award to the next low bidder if a written notice of SBA's
intention to issue a COC was not received by GSA by the close of
business that day. During the conversation the record shows that SBA
indicated to GSA that it had not decided whether it would issue Airports
a COC.
According to GSA, on March 11, at approximately 4:45 p.m. (after the
contracting office closed at 4:30 p.m.), since no notice of a COC was
received from the SBA, the contracting officer awarded a contract to We
Try Harder for items 1, 2 and 3. On March 12, at approximately 4:00
p.m., the Regional Coordinator of the SBA's New York Regional Office
called and informed the contracting officer that SBA was going to issue
Airports a COC. The contracting officer responded that award had
already been made to the next low bidder since notice was not received
from SBA within the 15-day timeframe prescribed by the regulations. GSA
also states that it received a wire from SBA on March 13, at 9:58 a.m.,
indicating that a COC had been issued to Airports.
Protest
Airports' argues that GSA illegally awarded the contract on March 11
before the expiration of the required 15 days for SBA consideration of
the COC and that the SBA's March 12 phone call to the contracting
officer notified GSA of the issuance of a COC within the required 15-day
referral period.
Airports maintains that GSA's February 13 referral Letter was not
received by SBA until February 19, so that the 15-day period for SBA
consideration of the COC lasted through March 12. In support of its
position, Airports has submitted affidavits of two officials responsible
for COC referrals in SBA's New York Regional Office. Both affidavits
state that the contracting officer's referral letter "was received by
the New York Regional Office on February 19, 1986." The SBA officials
refer to a copy of a mail log and a copy of GSA's February 13 referral
letter with a dated receipt stamp. The mail log contains a handwritten
entry for Airports' COC referral which indicates that the referral was
received on February 19. The copy of the February 13 referral letter
submitted by the protester has a receipt stamp but the date is
illegible; only the digit "9" is visible, although the affidavit from
one SBA official states that "the original clearly shows February 19 as
the stamped date." From this evidence, Airports concludes that the 15
days for SBA's decision on the COC began with the receipt of GSA's
letter on February 19 and that GSA was prohibited from making the award
until after March 12. Airports further maintains that the phone call
from SBA to the contracting officer on March 12 notified GSA, that a COC
had been issued within 15 days after the referral from SBA as required
by FAR, 48 C.F.R. Sec. 19.602-2(a).
Alternatively, Airports requests that we reverse GSA's
nonresponsibility determination, since according to the protester, that
initial determination was erroneously based on an incorrect contract
value.
Procedural Issue
As a preliminary matter, GSA urges us to dismiss the protest because
Airports failed to comply with section 21.1(d) of our Bid Protest
Regulations which requires that a copy of the protest be furnished to
the contracting officer within 1-day after the protest is filed with our
Office. 4 C.F.R. Sec. 21.1(d) (1986). Although the protester says that
it sent a copy of its protest to the contracting officer, GSA did not
receive a copy of the protest until March 27, 6 working days after the
protest was filed in our Office on March 19.
We initially dismissed the protest on March 25 because GSA informed
us that it had not received a copy of the protest as required by 4
C.F.R. Sec. 21.1(d). We subsequently reopened the protest because we
found out that Airports had also pursued its protest with the
contracting officer. Although the contracting officer may not have
timely received a copy of the submission filed with our Office, he had
received a timely agency level protest on substantially the same grounds
2 days after the protest was filed with our Office. The contracting
officer had not responded to Airports' agency level protest. Since
Airports' protest to GSA was still pending, the protester could have
timely refiled its protest with this Office and complied with the 1-day
rule if its agency level protest was later denied. Thus, a dismissal in
these circumstances would have constitued a technicality which would not
have served a useful purpose. See Dixie Box & Crating, B-221866, May
21, 1986, 86-1 CPD P 475. We think that we correctly reopened the
protest and therefore will consider its merits.
Discussion
We first consider Airport's contention that the COC referral from GSA
was not received until February 19. There is nothing in the FAR
defining when receipt of the notice of a COC referral occurs. FAR, 48
C.F.R. Sec. 19.602. In the absence of a specific definition, we
conclude that a COC referral is received for the purpose of establishing
the 15-day period when the agency letter is actually received in the
cognizant SBA Regional Office. See, for example, Bid Protest
Regulations, 4 C.F.R. Sec. 21.2(b). The certified return receipt,
which was attached to GSA's February 13 referral letter, indicates that
the letter was received by the SBA on February 18. The return receipt,
which shows that the addressee was the "Asst. Reg. Adm. for Regional
Programs, Small Business Admin. 26 Federal Plaza, Room 29-118, New
York, N. Y. 10007," has on it a February 18, 1986, delivery date. In
the receipt's signature blank is a signature that is not entirely clear,
although not completely illegible. The first initial is clearly an "R"
while the last name begins with an "L" and has 3 or 4 letters.
While the protester speculates that the return receipt card must have
been signed, dated and returned on February 18, by someone in a central
mailroom for federal agencies at the Federal Plaza Building, the
evidence submitted by Airports--affidavits of SBA officials, the SBA
mail log and the date stamped copy of GSA's referral letter--does not
refute the February 18 date on the return receipt. This evidence, in
fact, is not inconsistent with the routing of GSA's referral letter to
the responsible SBA officials after receipt in the Regional Office on
February 18. For instance, the mail log submitted by the protester,
which indicates receipt of the referral on February 19, lists only COC
referrals and no other mail, so it actually appears to be a log for COC
referrals in the particular SBA section responsible for COC processing
in the SBA's New York Regional Office. If that is the case, the log
merely indicates receipt of the Airports referral by the responsible SBA
section on February 19, and does not preclude receipt by the SBA
Regional Office on the previous day.
Similarly, the stamp on the letter does not show that the letter was
not received by the SBA mailroom. In fact, we are informally advised by
our New York Regional Office, which is located in the same building as
the SBA Regional Office, that there is no central mailroom serving the
entire building but that each agency's mail is delivered to its own
office.
We conclude then, that GSA's referral was received by the SBA
Regional Office on February 18. Since GSA did not agree to an extension
for COC processing 1/, the SBA had 15 days to issue a COC after receipt
of the referral. FAR, 48 C.F.R. Sec. 19.602-4(c). Since the SBA's time
for processing the referral expired on March 11 the contracting officer
was free to award the contract to the next low bidder when the COC was
not issued on or before that date.
Finally, Airports states that since it was effectively deprived of
its right to have SBA consider the matter, our Office should review
GSA's initial nonresponsibility determination. The SBA, however, has
conclusive authority to review a contracting officer's nonresponsibility
determination by issuing or refussing to issue a COC. 15 U.S.C. Sec.
637(b)(7). We will not generally review a contracting officer's
nonresponsibility determination relating to a small business bidder,
since such a review would be tantamount to a substitution of our
judgment for that of the SBA. Aero Engineering Corp., B-219745, Sept.
24, 1985, 85-2 CPD P 331. Our Office generally limits its review of the
COC process to cases in which the protester shows either possible fraud
or bad faith on the part of the contracting officer or where SBA failed
to consider vital information bearing on the bidder's responsibility.
Id. As the protester notes, we have, however, reviewed agency
determinations of nonresponsibility because the SBA refused to review
the COC referral, General Painting Company, Inc., B-219449, supra, or
because the nonresponsibility determination was not referred to the SBA.
See C.W. Girard, C.M., 64 Comp. Gen. 175 (1984), 84-2 CPD P 704.
Here, however, the SBA reviewed GSA's nonresponsibility determination
regarding the protester but simply failed to issue a COC within the
required time. Under these circumstances, we will not review the
nonresponsibility determination. Security Unlimited Enterprises, Inc.,
B-199860, B-199907, Dec. 10, 1980, 80-2 CPD P 421.
The protest is denied.
Harry R. Van Cleve
General Counsel
FOOTNOTES
1/ The decision whether to grant an extension for processing a COC is
within the contracting agency's discretion. General Painting Co., Inc.,
B-219449, Nov. 8, 1985, 85-2 CPD P 530.
B-222308.2; B-222309.2; B-222310.2;
FILE: B-222796.2; B-222823.2; DATE: July 8, 1986
B-222846.2, B-222897.2
MATTER OF: S.A.F.E. Export Corporation--Request for
Reconsideration
DIGEST:
The General Accounting Office affirms a decision holding that the
proposed debarment of one firm extends to an affiliated firm when the
affiliated firm, in a request for reconsideration, presents no evidence
to support an allegation that it was denied due process. Although the
affiliated firm was not specifically named in the debarment notice, as
required by applicable requlations, the uncontradicted record shows that
the ownership and officership of the two firms is such that notice to
one constitutes actual notice to the other.
S.A.F.E. Export Corporation requests reconsideration of S.A.F.E.
Export Corp., B-222823 et al., Apr. 28, 1986, 65 Comp. Gen. , 86-1 CPD
P 413, in which we found that the proposed debarment of S.A.F.E. OHG and
its affiliates encompassed S.A.F.E. Export and that under our Bid
Protest Regulations, 4 C.F.R. Sec. 21.0(a) (1986), S.A.F.E. Export was
not an interested party entitled to maintain protests. The firm also
requests reconsideration of S.A.F.E. Export Corp., B-222823 et al.,
Apr.30, 1986, 86-1 CPD P , in which we found that the debarment was
effective throughout the executive branch. We affirm our decisions.
As stated in the first decision cited above, the U.S. Army
Contracting Agency, Europe, advised S.A.F.E. oHG and affiliated
companies by letter dated February 7 that they were being proposed for
debarment for a 3-year period beginning on February 14. S.A.F.E. Export
was not specifically named in this letter. In our initial decision, we
noted that the applicable Federal Acquisition Regulation (FAR), 48
C.F.R. Sec. 9-406(b) (1984), states that debarments can only be extended
to affiliated companies where the affiliate is specifically named in the
notice of proposed debarment and is given an opportunity to respond to
the proposed action. We found, however, that the Army's failure to
comply with the precise terms of the regulation in this case was a mere
procedural defect, not affecting the validity of its decision to exclude
S.A.F.E. Export from the subject competitions. This was because the
record showed that S.A.F.E. Export had actual notice of the proposed
action and, thus, an ooportunity to respond. We concluded that the Army
properly had viewed the February 7 notice of debarment as applying to
S.A.F.E. Export. Furthermore, in the second decision cited above, we
found that this action was effective throughout the executive branch
under FAR, 48 C.F.R. Sec. 9.406(c).
In its requests for reconsideration, S.A.F.E. Export does not deny
that it had actual notice of the proposed debarment, which was imposed
on March 28, retroactive to February 10. Rather, S.A.F.E. Export now
contends that we improperly construed the regulatory requirement that
each affiliate be specifically named in a notice of proposed debarment.
The rights afforded all entities under this regulation, S.A.F.E. Export
posits, stem from the due process rights afforded by the Fifth Amendment
to the Constitution. The Army's actions effectively denied it these
constitutional rights, S.A.F.E. Export maintains, because it was not
given adequate notice that the intended debarment applied specifically
to it or an opportunity to respond. S.A.F.E. Export also questions the
authority of the debarring official to extend the proposed debarment
throughout the executive branch.
Due process of law does not guarantee any particular form of
procedure; it protects substantial rights. Mitchell v. W.T. Grant Co.,
416 U.S. 600, 610 (1974). In this case, the uncontradicted record
supports our conclusion that the ownership and officership of S.A.F.E.
oHG and S.A.F.E. Export are such that notice to one constituted actual
notice to the other. S.A.F.E. Export states that it has never conceded
its affiliation with S.A.F.E. oHG, and it argues that the Army's
debarment letter demonstrates ignorance of the firms' ownership and
officership. S.A.F.E. Export, however, has not provided us with
affidavits or any other documentary evidence that would indicate that
the ownership and officership of the two firms are not the same as they
were in 1982 when, as noted in our prior decision, S.A.F.E. Export
served as a domestic maildrop for S.A.F.E. oHG and when E.J.P. Tierney,
who signed the current protests and requests for reconsideration, was
the principal officer and employee of both firms. In the absence of
such evidence, we can only conclude that S.A.F.E. Export's rights were
protected by the Army's actions.
As for S.A.F.E. Export's allegations concerning the extension of its
debarment throughout the executive branch, this action, as we stated in
our decision of April 30, was mandated under applicable regulations.
See FAR, 48 C.F.R. Sec. 9.406-1(c).
We affirm our prior decision.
Harry R. Van Cleve
General Counsel
Matter of: Audit Company - Pioneer Van Lines, Inc.
File: B-222263
Date: August 10, 1987
DIGEST
The General Services Administration deducted as overcharges the
difference between the charges billed by the carrier on a combination of
rates and a through rate applicable from the Storage-In-Transit location
to destination. In view of the tender's plain language, there is no
merit in the carrier's contention that for delivery of household goods
shipments more than 50 miles from the Storage-In-Transit point, two
rates are applicable: a drayage rate for the first 50 miles and a
linehaul rate applicable for the miles beyond. Clearly, only one rate,
whichever is higher, is applicable. GSA's action is sustained.
DECISION
The Audit Company, on behalf of Pioneer Van Lines, Inc. (Pioneer),
requests review of a deduction of freight charges taken by the General
Services Administration (GSA) pursuant to 31 U.S.C. Sec. 3726 (1982).
We sustain GSA's action.
BACKGROUND
GSA's deduction is based on an audit determination that Pioneer
collected overcharges on a bill for the transportation of a shipment of
household goods, weighing 3,001 pounds, from its Storage-In-Transit
(SIT) location in Hyattsville, Prince George's County, Maryland, to its
final destination in Columbus, Ohio, a distance of 396 miles. 1/
A tender rule governing delivery from storage contains rates for
drayage to final residences located not over 50 miles from the SIT
location, and for the transportation of shipments more than 50 miles
from SIT. For shipments over 50 miles the rule refers to linehaul rates
published in another tender section. Since the shipment was transported
more than 50 miles from SIT to final residence (396 miles), the issue is
whether only the linehaul rate is applicable for transportation from SIT
to final residence, as contended by GSA, or whether the drayage rate,
otherwise applicable for shipments transported not over 50 miles, should
be combined with the linehaul rate for transportation over 50 miles, as
contended by the carrier.
Pioneer's protest to GSA's action requires consideration of different
interpretations of provisions in Military Rate Tender 20-H (MRT), which
was drafted by Pioneer's publishing agent, the Household Goods Carriers'
Bureau. The main portion of the Tender that is in contention here is
item 108-D of Section 2 (Additional Services), which provides rules and
pick-up or delivery transportation rates to apply on SIT shipments.
Paragraph 1 of item 108-D states that the rates apply to drayage of SIT
shipments from the destination SIT warehouse to the final residence.
Paragraph 2 states:
"For distances over a 50 mile radius within CONUS, 2/ apply the
rates in Section 3, Schedule A (CONUS) or the applicable rate from
Schedule A thru S in this item, whichever is greater."
GSA and Pioneer agree on the rates that would be applicable sunder
their respective theories. Section 2 contains an $8.70 per
hundredweight drayage rate and Section 3 contains an $11.75 per
hundredweight linehaul rate. Since the $11.75 linehaul rate is greater
than the $8.70 drayage rate and item 108-D requires application of the
greater rate, GSA contends that the $11.75 linehaul rate is applicable
alone, that is, not in combination with the drayage rate. Pioneer,
however, would apply a combination of the two rates so as to charge the
$8.70 rate for the first 50 miles plus the $11.75 linehaul rate for the
distance in excess of 50 miles, for a total of $20.45 per hundredweight
for the shipment.
Pioneer bases its combination theory on the first few words of item
108-D, paragraph 2. Pioneer interprets "for distances over a 50 mile
radius * * *" to mean that the $11.75 linehaul rate in Section 3 applies
only from the 51st mile to the destination point. Therefore, the $8.70
drayage rate in Section 2 must be added for the distance from 0 to 50
miles. Pioneer contends that for GSA's interpretation to prevail, item
108-D, paragraph 2 would have had to read, "when distances from point of
storage to final destination exceed 50 miles * * *."
We cannot agree with the carrier. The tender as a whole is clear
that whichever delivery rate is applicable, the drayage rate or linehaul
rate, it applies from the SIT point through to the destination. An
illustration of clarity on this point appears on the face sheet of
Section 3.
Although the language in paragraph 2 instructs application of the
Section 3 rates to "distances over a 50 mile radius" the face sheet of
Section 3 provides that the linehaul rates published therein apply on--
"Shipments which are picked-up or delivered from
storage-in-transit beyond 50 miles from storage warehouse; refer
to Item 108." (Emphasis supplied.)
This language, instructing application of the rates from the SIT
point, undercuts Pioneer's contention that the rates apply only from the
51st mile, and provides substantial support for GSA's interpretation.
As a result, we accept GSA's interpretation that the rate of $11.75 in
Section 3, Schedule A was applicable from the SIT location in Maryland
to Columbus, Ohio.
Accordingly, we sustain GSA's overcharge findings.
Comptroller General
of the United States
FOOTNOTES
1/ These services followed the International Through Government Bill
of Lading (ITGBL) movement of the shipment from Korea on GBL No.
FP-168051, issued by the U.S. Air Force. The charges for the ITGBL
transportation are not in issue.
2/ CONUS means continental United States.
Matter of: Senior Community Service Employment Program
File: B-222248
Date: March 13, 1987
DIGEST
The Equal Employment Opportunity Commission questions whether it may
be a "host" agency under the Senior Community Service Employment
Program, which is funded by federal grant and administered under federal
statute by the American Association of Retired Persons. The Commission
may properly act as a "host" agency in this context since this would not
contravene the provisions of 31 U.S.C. Sec. 1342, which prohibits
federal agencies from accepting voluntary services from private citizens
in the absence of statutory authority.
DECISION
The issue presented in this matter is whether the Equal Employment
Opportunity Commission (EEOC) may serve as a host agency in using
enrollees of the Senior Community Service Employment Program for
part-time clerical work, notwithstanding that by law federal agencies
are generally prohibited from accepting voluntary services. 1/ We
conclude that this general prohibition does not apply to the enrollees
in the program at issue, so that EEOC may properly accept their services
for part-time clerical work.
BACKGROUND
The Senior Community Service Employment Program is administered by
the American Association of Retired Persons, a nongovernmental
organization, under a federal grant and an agreement with the Secretary
of Labor, as authorized by subchapter IX of Chapter 35, title 42 of the
United States Code, 42 U.S.C. Secs. 3056-3056f.
Under this program economically disadvantaged persons over 55 years
old are enrolled and placed in positions with a view toward ultimately
providing them permanent employment. While the enrollees are involved
in the program, their salaries are paid out of the grant monies given to
the American Association of Retired Persons. Consequently, services are
rendered to host establishments free of charge. This being the case,
EEOC requests our determination on the question of whether it is barred
from accepting the enrollees'services by the prohibition contained in 31
U.S.C. Sec. 1342, which provides that " a n officer or employee of the
United States Government * * * may not accept voluntary services * * *
or employ personal services exceeding that authorized by law except for
emergencies involving the safety of human life or the protection of
property."
DISCUSSION
The prohibition contained in 31 U.S.C. Sec. 1342 relates to voluntary
services rendered by private persons without authorization of law, such
as might afford a basis for future claims for pay or compensation
against the federal government. See 23 Comp. Gen. 272, 274 (1943).
Thus, in the absence of specific statutory authority, federal agencies
are generally prohibited from accepting voluntary services offered by
individuals. 60 Comp. Gen. 456 (1981).
In 54 Comp. Gen. 560 (1975) we considered a program administered
under the statutory authority of the Comprehensive Employment and
Training Act (CETA), 29 U.S.C. Secs. 801 et seq. (1976 ed., repealed),
and we concluded that the prohibition against the acceptance of
voluntary services did not apply to that program due to the statutory
terms of the CETA legislation. We are of the opinion that the Senior
Community Service Employment Program now in question is sufficiently
similar to warrant application of the reasoning expressed in that
decision.
In 54 Comp. Gen. 560, supra, we considered the language adopted by
the Congress in section 608 of CETA, which authorized the Secretary of
Labor to use the services and facilities of federal agencies as well as
the resources of public and private entities in the performance of his
functions under CETA. We concluded that the Congress had therefore
intended to make available for purposes of the program whatever
facilities of the federal government could be useful in accomplishing
its purposes. A provision of law governing the Senior Community Service
Employment Program contained in 42 U.S.C. Sec. 3056a(c) states:
"In carrying out the provisions of this subchapter, the
Secretary is authorized to use, with their consent, the services,
equipment, personnel and facilities of Federal and other agencies
with or without reimbursement, and on a similar basis to cooperate
with other public and private agencies and instrumentalities in
the use of services, equipment and facilities."
In light of the similarity between the two provisions we are of the
opinion that the Congress similarly intended to authorize the Secretary
of Labor to use federal agencies in the administration of the program in
question. In addition, we note that the legislative history of the 1975
congressional enactment which established the current Senior Community
Service Employment Program makes it clear that the Congressintended it
to be the statutory basis for extending and consolidating programs which
previously had been administered under CETA and related enactments. 2/
Since it is clear that this program is in many respects akin
to CETA in its administration, we are of the opinion that " u nder the
circumstances considering that the services in question will arise out
of a program initiated by the Federal Government, it would be anomalous
to conclude that such services are proscribed as being voluntary within
the meaning of 31 U.S.C. 1342 ." 54 Comp. Gen., supra, at page 561.
Accordingly, we conclude that EEOC may properly become a host agency
under the Senior Community Service Employment Program.
Comptroller General
of the United States
FOOTNOTES
1/ Mr. William (ILLEGIBLE) Acting Director, Personnel Management
Services, (ILLEGIBLE) our decision in this matter.
2/ Public Law 94-135, Sec. 113, November 28, 1975, 89 Stat. 713,
720. See H.R. Rep. 67, 94th Cong., 1st Sess. 11, et seq. (1975); and
S. Rep. No. 255, 94th Cong., 1st Sess. 13, 15, 29 (1975). It is also to
be noted that a federal agency's acceptance of the services of persons
participating in federally funded programs, of this type, does not
result in an impermissible augmentation of the agency's appropriations.
Community Work Experience Programs, B-211079.2, January 2, 1987.
Matter of: Hi-Grade Logging, Inc.--Reconsideration
File: B-222230.2; B-222231.2
Date: July 18, 1986
DIGEST
Request for reconsideration that alleges facts and makes arguments
that could have been presented at the time of the protest does not
provide a basis for reconsideration.
DECISION
Hi-Grade Logging, Inc. (Hi-Grade), requests that we reconsider our
decision in Hi-Grade Logging, lnc., B-222230, B-222231, June 3, 1986,
86-1 CPD P , that its bid properly was rejected as late under the Pinky
Salvage and Rubadub Salvage Timber Sales conducted by the Forest
Service, Department of Agriculture. We deny the request for
reconsideration.
Hi-Grade hand-delivered its bid moments after the bid opening officer
declared the 10 a.m. time set for bid opening had arrived and commenced
opening bids. Hi-Grade alleged that the bid opening officer's
declaration of the time was inaccurate, and that its bid was delivered
before the time set for bid opening. We held that the bid opening
officer's declaration of the bid opening time was determinative of
lateness unless shown to be unreasonable under the circumstances. We
found that the protester failed to make such a showing and therefore its
bid properly was rejected as late.
In its request for reconsideration, Hi-Grade contends for the first
time that, in this case, the Forest Service departed without notice from
its established practice of setting the bid opening room clock based on
a telephonic time recording. Hi-Grade asserts that it relied on this
practice being followed and alleges that the bid opening room clock was
approximately 1 minute ahead of the time recording. Hi-Grade argues
that, under these circumstances, the bid opening officer's declaration
of bid opening time was unreasonable.
Our Bid Protest Regulations require that a request for
reconsideration contain a detailed statement of the factual and legal
grounds for reconsideration, specifying any errors of law or information
not previously considered. 4 C.F.R. Sec. 21.12(a) (1986). Information
not previously considered means information that was not available to
the protester when the initial protest was filed. Marco Crane & Rigging
Co.--Request for Reconsideration, B-220618.2, Nov. 27, 1985, 85-2 CPD P
612. Our regulations do not contemplate the piecemeal presentation of
evidence, imformatiom, or analyses. Where a request for reconsideration
alleges facts and makes arguments that could have been presented at the
time of the protest, the request does not provide a basis for
reconsideration. See Joseph L. De Clerk & Assocs.
Inc.--Reconsideration, B-221723.2, Feb. 26, 1986, 86-1 CPD P 200.
If the Forest Service had an established practice of setting its
clocks according to the telephonic time report, Hi-Grade clearly knew
this fact when it filed its initial protest. It was obvious from the
agency report responding to the protest that the Forest Service did not
call the telphonic time recording until after bid opening, and if
Hi-Grade perceived this action to be contrary to the agency's
established procedure for checking the bid opening time, Hi-Grade should
have raised this argument in the initial protest. We will not consider
the argument now.
The request for reconsideration is denied.
Harry R. Van Cleve
General Counsel
FILE: B-222201 DATE: July 2, 1986
MATTER OF: Renaissance Enterprises, Inc.
DIGEST:
1. Small Business Administration determination that the awardee of a
contract, set aside for small businesses, was a large business does not
affect the validity of the contract award where the contracting agency
properly determines not to issue preaward notices to apprise offerors of
the intended awardee due to urgency of procurement and awards the
contract before the protester can file a size protest.
2. Under a solicitation for double bedroom accommodations with a
minimum "sleeping area" of 90 square feet per person, the contracting
agency reasonably determines that the awardee's offered condominiums,
with a total floor space (including bedrooms) well exceeding 90 square
feet per person, is acceptable where it is clear that the square footage
requirement is based on single-room accommodations, and multiple-room
accommodations are permitted.
3. Even if protester offering motel-type accommodations interpreted
solicitation's requirement for a sleeping area of 90 square feet per
person to require bedrooms with 90 square feet, acceptance of a
competitor's offer of more spacious multiple-room condominiums having
bedrooms with less than 90 square feet per person does not prejudice
protester where the condominiums exceed the agency's basic requirements
and the protester does not allege that it could have offered comparable
accommodations at a lower price.
4. Allegation that the awardee will not be able to provide
accommodations for transient personnel in accordance with solicitation
requirements involves the contracting agency's determination of the
awardee's responsibility which will not be reviewed absent a showing of
possible fraud or bad faith by procurement officials or the failure to
apply definitive responsibility criteria.
5. Preaward survey is not a legal prerequisite to an affirmative
determination of responsibility.
Renaissance Enterprises, Inc. (Renaissance) protests the award of a
fixed-price, indefinite-delivery requirements contract to Ocean Resorts,
Inc. (ORI) under request for proposals (RFP) No. F38606-86-R-0008,
issued as a total small business set-aside by the Department of the Air
Force, Myrtle Beach Air Force Base, South Carolina, for transient
quarters from March 2 to April 16, 1986. The Air Force needed the
quarters because runway closure at Seymour Johnson Air Force Base, North
Carolina, resulted in increased personnel deployment to Myrtle Beach Air
Force Base. Renaissance contends that ORI is not a small business, that
ORI's offer took exception to the RFP, and that ORI is incapable of
providing the number of quarters required by the RFP. The protester
asks that the contract be terminated and that any damages and costs,
including attorney's fees, be awarded to Renaissance.
The protest is dismissed in part and denied in part.
The RFP, issued on February 10, 1986, requested proposals by February
20, 1986, due to the urgency of the requirement for accommodations. The
RFP stated an estimated requirement for 281 double bedroom
accommodations (doubles) and 155 single bedroom accommodations
(singles). The RFP required doubles with a minimum "sleeping area" of
90 square feet per person for lower ranking enlisted personnel. Singles
having a minimum sleeping area of 150 square feet were required for
higher ranking enlisted personnel, and singles with a minimum sleeping
area of 250 square feet were required for all officers, warrant officers
and civilians.
The RFP solicited daily prices for each type of accommodation, and
provided that an award would be made to a single responsible offeror
based on the lowest aggregate price, computed by multiplying the unit
prices for each type of quarters by the estimated requirement for that
type of quarters and totaling the results.
The protester and ORI submitted the only acceptable proposals. ORI's
proposal offered daily rates of $40 per double and $20.00 per single
(totaling $675,648) while the protester's proposal offered rates of
$56.00 per double and $30.50 per single (totaling $945,530). The Air
Force awarded ORI the contract on February 24, 1986, and determined to
proceed with performance based upon a determination that the quarters
were urgently needed.
Regarding the contention that ORI is not a small business, ORI
certified in its offer that it was a small business, and the contracting
officer had to accept the certification unless he had reason to question
it. Federal Acquisition Regulation (FAR), 48 C.F.R. Sec. 19.302(b)
(1984). The record does not indicate that the contracting officer,
before making the award, had any information inconsistent with ORI's
certification. Based on the urgency of the procurement, the Air Force
proceeded to award the contract without issuing preaward notices of the
intended awardee. When notified of the award to ORI, the protester
timely filed a protest of ORI's size status with the contracting
officer. The matter then was referred to the Small Business
Administration (SBA) for its consideration, and SBA decided that ORI was
not a small business.
Applicable regulations expressly permit the contracting officer not
to issue preaward notices of the intended awardee where it is determined
that urgency necessitates award without delay. FAR, Sec. 15.1001 (b)
(2) (FAC 84-13, Feb. 3, 1986). Since the Air Force awarded the contract
before the size protest based on such an urgency determination, the
award was proper. Triple A Shipyards, B-213738, July 2, 1984, 84-2 CPD
P 4.
Upon determining that ORI was a large business, the SBA recommended
that the Air Force should terminate the contract for convenience. The
Air Force, however, decided not to terminate the contract. In this
regard, we note that at the time of SBA's determination, Mar. 20, 1986,
approximately 700 personnel already had been lodged in the awardee's
accommodations. Under these circumstances, where the personnel
apparently could not have been relocated without expenses and
disruptions that were unwarranted for the few weeks remaining in their
temporary deployment to Myrtle Beach Air Force Base, we cannot question
the Air Force's action in not terminating ORI's contract. See Solon
Automated Servs., Inc., B-198670, Nov 18, 1980, 80-2 CPD P 365.
Regarding the acceptability of ORI's offer, ORI offered condominiums
that included living space other than bedrooms with a total floor space
that well exceeded 90 square feet per person, although the bedrooms
alone did not have 90 square feet per person under double occupancy.
The protester argues that the RFP's requirement for 90 square feet of
"sleeping area" per person meant that the bedrooms themselves alone had
to have 90 square feet per person, and, stherefore, ORI's offer was
unacceptable. The Air Force contends that ORI's accommodations more
than met the Air Force's needs which were based on the requirement for
90 square feet of "net living area," stated in Air Force Regulation 90-9
(Oct. 21, 1984).
It is clear that the minimum requirements of the RFP were for
motel-type bedroom accommodations meeting the stated size requirements
and having simple furnishings (i.e., beds, dresser or chest of drawers,
desk chair and lounge chair) in addition to a bathroom and closet space.
Because the RFP required clock radio and televisions for "each sleeping
room or shared TV/living room area," it is similarly clear that offers
of condominiums with shared living rooms also were acceptable. While
the requirement of 90 square feet of sleeping area per person obviously
would be applicable to the basic motel-type accommodations, we think it
is not reasonable to read the requirement as applying to a bedroom when
the bedroom, rather than being the entire accommodation offered, is just
one room in a condominium with other living-area space.
Even if the protester believed that the requirement applied
regardless of the type of accommodations offered, we note that the
awardee's condominiums appear to be much more spacious than the
protester's, 1/ and the protester does not contend that it could have
provided similar quarters at a lower price. Thus, we fail to see how
the protester was prejudiced by the Air Force's acceptance of
accommodations that basically exceeded the RFP's minimum requirements.
See Charles V. Clark Co., 59 Comp. Gen. 296 (1980), 80-1 CPD P 194.
The protester alleges that ORI does not have sufficient
accommodations to meet the RFP's terms and that the agency failed to
conduct an adequate preaward survey of ORI. In effect, this allegation
challenges the Air Force's determination of ORI's responsibility. Our
Office does not not review affirmative determinations of responsibility
absent a showing of possible fraud or bad faith on the part of
procurement officials or the failure to apply definitive responsibility
in the solicitation. 4 C.F.R. Sec. 21.3(f)(5); Interstate Equip.
Sales, B-222213, Mar. 19, 1986, 86-1 CPD P 274. The protester has made
no showing that either exception applies here. In any event, we have
held that a preaward survey is not a legal prerequisite to an
affirmative determination of responsibility. See Xtek, Inc., B-213166,
Mar. 5, 1984, 84-1 CPD Sec. 264.
The protest is dismissed in part and denied in part.
Harry R. Van Cleve
General Counsel
FOOTNOTES
1/ An Air Force memorandum, dated March 27, indicates that ORI,s
smallest condominium was a two-bedroom facility that had no more than
four people assigned to it and contained approximately 1,200 square feet
of total living area, whereas the protester offered motel-type units,
typically having a total living area of approximately 290 square feet.
B-222189
December 5, 1986
Digest
The General Accounting Office will not object to the solicitation and
payment of rates for the transportation of domestic household goods by
the Military Traffic Management Command or the General Services
Administration whether the transportation charges simply reflect
increased valuation from the current 60 cents per pound per article to
$1.25 per pound of net weight, or are expressed as valuation charges.
Thomas M. Auchincloss, Jr., Esq.
Counsel for Household Goods Carriers'
Bureau
Rea, Cross & Auchincloss
Suite 700
One Thomas Circle, N.W.
Washington, D.C. 20005-5897
Dear Mr. Auchincloss:
Your letter of October 8, 1986, on behalf of the Household Goods
Carriers' Bureau, Inc., asks for review of an informal opinion contained
in a letter of August 14, 1986, to Colonel Joseph R. Marotta, Director
of Personal Property, Headquarters, Military Traffic Management Command,
from Acting Assistant General Counsel, David F. Engstrom, of our Office.
Mr. Engstrom's letter indicated that a proposal to solicit rates for
the transportation of domestic household goods shipments, which would
include a valuation charge for a minimum valuation of $1.25 per pound
times a shipment's net weight, appeared to be inconsistent with the
government's policy of self-insurance. The opinion distinguished
between such an additional valuation charge and a proposal to solicit
transportation rates which include an increase of released value (from
the current 60 cents per pound per article to $1.25 per pound of net
weight). The latter proposal was not considered to be inconsistent with
the Government's self-insurance policy.
In view of concerns subsequently expressed by you, another carrier
organization and Military Traffic Management Command representatives, we
have considered this matter further. As a result, in a conference held
on October 23, 1986, in the General Accounting Office, our Deputy
General Counsel, James F. Hinchman, advised Colonel Marotta that we
would not object to the proposed solicitation which would include a
separate valuation charge.
We hope that this satisfies the purpose of your request. We are
furnishing a copy of this letter to Colonel Marotta.
Sincerely yours,
Harry R. Van Cleve
General Counsel
Matter of: Motorola, Inc.
File: B-222181
Date: July 11, 1986
DIGEST
Protest that agency improperly relaxed solicitation specifications in
order to accept low proposal is sustained where technical data included
in the awardee's offer reveals noncompliance with minimum requirements
listed in the solicitation. Claim for proposal preparation costs and
reasonable costs of filing and pursuing the protest is granted where the
protester was unreasonably excluded from receiving the contract award,
and the contract has been fully performed.
DECISION
Motorola, Inc. (Motorola) protests the award of a contract by the
Department of the Air Force under request for proposals (RFP) No.
F24604-85-B-A015 for the procurement of portable radios to be used by
security police on Malmstrom Air Force Base. Motorola contends that the
Air Force relaxed its specifications in order to accept the offer by
California Mobile Communications (CMC), and that award to CMC was
therefore improper.
We sustain the protest.
BACKGROUND
The RFP called for portable radios with a minimum pcwer output of 5
watts and with FM noise of -60 db. Under "additional specifications,"
the solicitation required that the radios meet or exceed procedures
under "Mil. Spec. 810 D," and that they be "Factory Mutual certified for
nonincendiary devices (Class I, Div. 2, Gps A, B, C, and D) and
intrinsically safe (Class I and II, Div. 1 amd 2, Gps. C, D, E, F and
G)."1/ The RFP was later amended to change the FM noise requirement to
-55 db, and the Mil. Spec. 810 D requirement was changed to Mil. Spec.
810 C.
The protester alleges that CMC's radio does not satisfy the RFP
requirement that it be intrinsically safe in Class I and II, Div. 1 and
2, groups C and F. Motorola apparently bases this allegation on
published technical specifications prepared by CMC's supplier,
Transworld, and included in CMC's offer. These specifications indicate
that the offered radio is intrinsically safe for Classes I, II, and III,
Division 1, Groups D, E, and G, and nonincendive for Class I, Division
2, Groups A, B, C, and D.
The Air Force contends that the intrinsically safe requirements, as
defined in the National Electrical Code, are simply expressed in
different ways in the RFP and in the Transworld technical data,
resulting in confusion in this case. The Air Force asserts that
"nonincendiary" and "intrinsically safe" have the same effect, for
purposes of this requirement, so that Transworld technical data showing
that the offered radio is approved as "Nonincendive Class I, Division 2,
groups A, B, C, D," can be used to satisfy the "intrinsically safe"
requirement in these same groups.
ANALYSIS
We do not find these arguments persuasive. The relevant
specifications require that the radio be certified, in various "classes"
and "divisions," as nonincendiary for Groups A, B, C and D and
intrinsically safe for Groups C, D, E, F, and G. As previously stated,
Transworld's published technical data states that the offered radio is
approved as intrinsically safe for Groups D, E, G and as nonincendive
for Groups A, B, C, D. Thus, the Transworld radio apparently is not
approved as intrinsically safe for groups C and F, as required by the
specifications.
The National Electrical Code states that "intrinsically safe"
equipment and wiring are incapable of releasing sufficient electrical
energy under normal and abnormal conditions to cause ignition of a
specific hazardous atmospheric mixture. Abnormal conditions will
include accidental damage to any part of the equipment or wiring,
insulation, or other failure of electrical components, application of
overvoltage, adjustment and maintenance operations, and other similar
conditions.
"Nonincendive" also refers to a low-energy system which, when used in
the designated atmosphere groups, will not result in an ignition-capable
spark, but it is a significantly less stringent standard because it does
not include any consideration of abnormal conditions. 2/ We therefore
cannot conclude that where, as here, a radio is approved as nonincendive
in group C, it also is intrinsically safe in that atmosphere should
abnormal conditions exist. 3/
The Transworld technical data did not show that the radio offered by
CMC was approved for all conditions specified by the mandatory
specifications in the RFP. Accordingly, we find that award to CMC was
improper because the product offered does not meet the minimum
specification requirements, and sustain the protest on this basis.
Because the contract was fully performed on May 23, 1986, corrective
action in the form of contract termination is not possible. See Bid
Protest Regulations, 4 C.F.R. Sec. 21.6(b) (1985); Consolidated
Construction, Inc., B-219107.2, Nov. 7, 1985, 85-2 CPD P 529. There
remains, however, the issue of whether the protester is entitled to
recover its bid or proposal preparation costs and the costs of filing
and pursuing its protest. We will allow a protester to recover its bid
preparation costs only where (1) the protester had a substantial chance
of receiving the award but was unreasonably excluded from the
competition, and (2) any remedy recommended is not one delineated in 4
C.F.R. Sec. 21.6(a) (2-5). See EHE National Health Services, Inc.,
B-219361.2, Oct. 1, 1985, 85-2 CPD P 362. In addition, we will allow
the recovery of the costs of filing and pursuing a protest where the
protester unreasonably is excluded from the procurement, except where we
recommend that the contract be awarded to the protester, and the
protester receives the award. 4 C.F.R. Sec. 21.6(e).
In this connection, we note that as an initial basis for protest,
Motorola has argued that the RFP requirement that the radios have a
5-watt power output was relaxed in order to make award to CMC, which
allegedly offered a 4.5 watt radio. The Air Force responded that the
specifications required the radio to have a 5-watt power output before
the intrinsically safe feature was added, and that CMC's radio already
included this feature. The agency report states that "it is commonly
known in the industry that adding this feature reduces wattage." The
agency appears to be arguing, in essence, that while it required a
5-watt radio, it expected the wattage to be somewhat lower when the
radio was used in its intrinsically safe mode. The agency does not,
however, agree with the protester's construction of the specifications,
i.e., that the actual wattage of the radio in its intrinsically safe
mode was irrelevant. This disagreement is apparent from the contracting
officer's statement that "Motorola's radio would not have been approved
even if they were the low bidder," because the radio proposed by
Motorola has a
power output of only 2 watts when used in its intrinsically safe
mode.
The Air Force's position, then, is that while the specifications
stated 5 watts, it did not actually require a full 5-watt power output
after the intrinsically safe feature was added, and that while it would
accept 4.5 watts, it would not accept 2 watts. In our view, this is not
an accurate reflection of the specifications as they appeared in the
RFP. While there is some technical disagreement about whether the
wattage was to be measured before or after the radio was modified to be
intrinsically safe, it is clear that the specifications do not disclose
to offerors any range within which a reduction in power would be
acceptable. We therefore cannot agree with the agency's argument that
Motorola's offer was technically unacceptable. Motorola was entitled to
rely on the RFP as indicating the government's actual minimum needs, see
Tandem Computers, Inc., B-221333, Apr. 14, 1986, 65 Comp. Gen. , 86-1
CDP P 362, and Motorola should have received the award based on the
specifications it was asked to meet.
We conclude that Motorola had a substantial chance of receiving the
award under the specifications as written and that it was unreasonably
excluded from the competition because the award to CMC was based on a
technically noncompliant offer. Thus, Motorola is entitled to recover
its proposal preparation expenses as well as the reasonable costs of
filing and pursuing its protest. See 4 C.F.R. Sec. 21.6(e).
The protest is sustained.
Acting Comptroller General
of the United States
FOOTNOTES
1/ The "Class" and "Division" describe a location with specified
conditions. Thus, Class I locations are those in which flammable gases
or vapors may be present in sufficient quantities to produce ignitable
mixtures. The presence of combustible dust creates Class II locations.
The divisions within a class specify the normal operating conditions
within the location. The groups define atmosphere within the location
specified, e.g., Group C defines atmospheres containing gases such as
cylopropane, ethyl ether, ethylene, or gases or vapors of equivalent
hazard. Source R.E. Palmquist, Guide to the 1984 Electrical Code.
2/ We have been informally advised by the National Fire Protection
Association (publisher of the National Electrical Code) that although
the term "nonincendive" is not defined in the Code, its meaning is as
defined above.
3/ Although the Transworld technical data also fails to list group F
as intrinsically safe, we have been advised that this group is a
classification from the previous electrical code, and is now represented
by groups E and G, which, as indicated above, the Transworld
specifications do list.
Matter of: Casey & Glass, Inc.--Reconsideration
File: B-222132.2
Date: July 28, 1986
DIGEST
Decision is affirmed on reconsideration where firm requesting
reconsideration fails to establish the existence of an error of
law or fact in the decision.
DECISION
Casey & Glass, Inc. (C&G) requests that we reconsider our decision in
Bracco Construction Co., B-222132, May 5, 1986, 85-1 C.P.D. P 433, in
which we sustained Bracco Construction Company's protest of the award of
a contract to C&G under invitation for bids (IFB) No. N62467-81-B-0812,
issued by the Department of the Navy for a cold storage warehouse at the
Naval Air Station, Corpus Christi, Texas. We found that the Navy
improperly rejected Bracco's bid as late, and we recommended that the
Navy terminate C&G's contract for convenience and award a contract for
the requirement to Bracco. C&G alleges that Bracco's bid in fact was
late.
We affirm our decision.
The IFB originally scheduled bid opening for 3 p.m. on December 3,
1985. By amendment 0002, the Navy, among other things, rescheduled bid
opening to December 17. The amendment, however, contained a clerical
error, stating that bid opening was postponed "from 2:30 p.m." on
December 3 to 2:30 p.m. on December 17. Personnel at the facility,
recognizing the error in the amendment, proceeded to conduct the
December 17 bid opening at 3:00 p.m., the customary time for bid opening
at the facility.
Bracco, the second low bidder, was in line for award after the low
bidder withdrew from the competition because of an error in its bid.
C&G then protested to the Navy against the acceptance of Bracco's bid,
claiming that Bracco submitted its bid at 2:33 p.m., 3 minutes late.
Thereafter, the Navy notified Bracco that its bid would not be
considered and awarded to C&G. Bracco protested to our Office that its
bid was not late, contending that although it submitted the bid prior to
2:30 p.m., Navy personnel acting under the erroneous assumption that bid
opening was at 3 p.m., presumed they had half an hour until the bid
opening and, therefore, were slow in their handling of Bracco's bid,
resulting in the bid being stamped late. The Navy, noting that Bracco's
time/date stamped bid envelope was lost, attested to the veracity of
Bracco's explanation and recommended that we sustain Bracco's protest.
Based on a preponderance of evidence in the record indicating that
Bracco's bid was submitted to Navy personnel before bid opening, we
sustained Bracco's protest.
In requesting reconsideration, C&G states that the bid receipt room
is located in a part of the Navy facility separate from the bid opening
room. C&G argues that while Bracco may have been in the bid opening
room before 2:30 p.m., this does not refute C&G's allegation that Bracco
entered the bid receipt room after 2:30 p.m. and submitted its bid.
C&G's argument, however, does not warrant reversing our decision. The
issue is not in which room Bracco was located at the time designated in
the solicitation for bid opening but, as we stated in our decision,
whether Bracco surrendered control of its bid to government contracting
personnel by that time. We considered this issue in our original
decision and concluded that Bracco's bid was submitted timely to Navy
contract personnel prior to the time set for bid opening.
C&G next argues that Bracco's submission of its bid before the actual
bid opening is immaterial because bid opening was conducted 30 minutes
after the time designated in the solicitation. According to C&G, our
decision stands for the proposition that the time designated in the
solicitation for the receipt of bids is not controlling over "customary"
times. There is no merit to C&G's argument. The fact that bid opening
was conducted 30 minutes late was of no consequence to our finding. Our
decision is clear that, based on a preponderance of evidence, Bracco's
bid was submitted timely to Navy contracting personnel prior to the time
set in amendment 0002 for bid receipt--2:30 p.m.--not just the actual
bid opening time of 3 p.m.
Finally, C&G believes that, based on a statement in the Navy's
report, it may not have been furnished all of the documents on which our
decision was based. C&G is incorrect, however, since our Office
supplied C&G a copy of the record for the case.
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 is warranted and that it
specify errors of law made or information not considered previoosly. 4
C.F.R. Sec. 21.12(a) (1986). C&G has failed to demonstrate such error,
and our May 5 decision therefore is affirmed.
Comptroller General
of the United States
B-222048
February 10, 1987
DIGESTS
1. Certifying officer erroneously charged and paid obligation from an
improper account and the error was not detected until all funds in
proper account had been spent. While error was negligent, relief may be
granted to certifying official under alternate ground of 31 U.S.C. Sec.
3528(b)(B), since the obligation was incurred in good faith, the
Government received value for the payment, and, at the time the
obligation arose and was paid, there was no law specifically prohibiting
the payment.
2. Where funds to pay prior obligation for reception and
representation expenses were not charged to the proper account and
reserved for payment, and subsequent obligations exceeded a
congressional limit for such expenses, the agency has violated the
Antideficiency Act, 31 U.S.C. Sec. 1341 (a), and should take actions
necessary to report the violation to the President and the Congress
under 31 U.S.C. Sec. 1351.
The Honorable Dennis P. McAuliffe
Administrator, Panama Canal Commission
APO Miami 34011
Dear Mr. McAuliffe:
This responds to a letter written to our Office by Anel E. Beliz,
Director of Public Affairs, Panama Canal Commission (Commission). Mr.
Beliz asked that we relieve him and Mrs. Flor D. de Aguilar of liability
for their improper certification of $1,867 in connection with a cocktail
party sponsored by the Commission. Mrs. de Aguilar, Administrative
Officer for the Office of Public Affairs, also acts as certifying
officer for that office. As discussed below, we are granting the relief
requested for Mrs. de Aguilar. Mr. Beliz is not a certifying officer
and therefore no relief for him is necessary.
In March 1985, the Commission held a cocktail party for shipping
officials and members of the press. Invoices for this party totaled
$1,867. Although our Office was not provided copies of the
certifications, apparently Mrs. de Aguilar certified payment vouchers
which erroneously charged the expenses to the Office of Public Affairs'
operating account. (Mr. Beliz also co-signed the voucher in question.)
The costs should have been charged to the Administrator's reception and
representation account.
Mr. Beliz states that the error was not detected until the end of the
fiscal year. At that time, all the funds in the reception and
representation account had been obligated. Further, the appropriation
funding this account expressly limited funds available for this purpose.
See Pub. L. No. 98-473, 98 Stat. 1837, 1960 (1984). Based on these
circumstances, the Commission has held Mr. Beliz and Mrs. de Aguilar
personally liable for the expenditure. For the following reasons, we
are granting relief.
Under 31 U.S.C. Sec. 3528(a), a certifying officer is responsible for
repaying a payment that is illegal, improper, or incorrect because of an
inaccurate or misleading certificate.
The Comptroller General is authorized to relieve a certifying officer
of liability under the provisions of 31 U.S.C. Sec. 3528(b) if he
decides that--
"(A) The certification was based on official records and the
official did not know, and by reasonable diligence and inquiry
could not have discovered the correct information; or
(B) (i) the obligation was incurred in good faith;
(ii) no law specifically prohibited the payment; and
(iii) the United States Government received value for the
payment."
We have little doubt that the certifying officer did not meet the
relief criterion in paragraph A. She and her Supervisor can fairly be
charged with knowledge of which types of expenses could properly be
charged to the Office of Public Affairs' operating account. Although
the billing document may well have contained some legitimate expense
items for which her office was responsible, as Mr. Beliz suggests, as
well as the cocktail party charges, it appears to us that with
"reasonable diligence and inquiry," she could have identified which
items were which.
Note that her error was not affected by the fact that the
Commission's representation and reception account was depleted. Her
certification would still have been improper even if the representation
account was solvent because operating funds were not available for the
kind of activity for which she paid. We mention this to assure both
Public Affairs officials that by statute neither of them are responsible
for the Antideficiency Act violation that resulted from the overpayment
for the party. (See later discussion.)
Fortunately, the relief criteria for certifying officers are written
in the alternative. The certifying officer must meet Criterion A or B.
It appears to us that all three elements of Criterion (B)--good faith,
no law prohibiting the expenditure, and the receipt of value by the
Government--are present and, accordingly, relief is proper under this
authority.
The Commission does not dispute that the first and third
elements--good faith and receipt of value by the Government--were
present here. However, existence of the second element--no law
prohibiting the expenditure-- requires more discussion in light of the
congressional limit on this account included in the appropriating
legislation.
The record indicates that, after approval by appropriate authorities,
arrangements for the cocktail party were made by telex messages in March
1985. Our Office has taken the position that an obligation of funds is
not dependent upon the clerical act of recording that obligation. See
55 Comp. Gen. 812, 824 (1976). Rather, we have stated that an
obligation arises at the point when the Government enters into a
definite commitment which creates a legal liability of the Government
for the payment of appropriated funds for goods ordered or received.
See B-192282, Apr. 18, 1979. Accordingly, we conclude that an
obligation arose at the time the Commission entered into a legally
binding agreement for the goods and services necessary for the cocktail
party.
We believe that the criteria for relief should be measured against
the transaction at the time the obligation arose and payment was
made--not at the later date when the error was detected. Since funds
were available for this expenditure at the time the obligation arose,
i.e., when the transaction occurred, and there were sufficient funds in
the Commission's account to pay for the party, had the voucher been
presented for payment at that time, payment was not prohibited by law.
Therefore, notwithstanding the fact that the actual certification was
incorrect, because payment was made from the wrong account, we believe
the criteria for granting relief set forth in 31 U.S.C. Sec. 3528(b) (2)
has been met. Accordingly, Mrs. de Aguilar is relieved of personal
liability for her improper certification.
Based on the facts presented, we think the Commission has another
serious problem. A payment was made for a party from an account which
had no funds available for that type of expense. The proper account was
never charged with the expense and as a result, no funds were reserved
to make the payment when it fell due. It seems clear that the
Antideficiency Act, 31 U.S.C. Sec. 1341 (a) (1) (A), was violated, and
that the violation is attributable to the highest ranking officer or
employee in the Administrator's office who was in a position to
authorize the obligation and payment for the party. Since current funds
are not available to make an accounting adjustment which would replenish
the Office of Public Affairs' account, the Antideficiency Act violation
should be reported to the President and the Congress in accordance with
31 U.S.C. Sec. 1351.
Sincerely yours,
(Mrs.) Rollee H. Efros
Associate General Counsel
FILE: B-222045.2 DATE: July 1, 1986
MATTER OF: W.H. Smith Hardware Co.--
Reconsideration
DIGEST:
Where solicitation understates agency's needs, but low offeror's
proposal will meet those needs, award to that offeror rather than a
resolicitation is appropriate where record further indicates that agency
is not likely to obtain greater competition if it resolicits, so that
award on original solicitation will satisfy the "full and open
competition" standard of the Competition in Contracting Act.
The Defense Logistics Agency (DLA) requests reconsideration of our
decision in W.H. Smith Hardware Co., B-222045, May 13, 1986, 65 Comp.
Gen. , 86-1 CPD P , sustaining Smith's protest. We affirm our prior
decision.
Our original decision responded to W.H. Smith's complaint that its
offer for lavatory faucets should not have been rejected and that award
should be made to it. DLA itself determined that Smith's offer in fact
was acceptable and terminated the contract awarded to a higherpriced
offeror. DLA further determined, however, that the solicitation had
been defective, and that it therefore had to resolicit. We held that
the solicitation defects did not warrant resolsicitation and that award
should be made to Smith. DLA, in requesting reconsideration, asserts
that our holding is inconsistent with the Competition in Contracting Act
of 1984 (CICA), Pub. L. 98-369, Tit. VII.
At the outset, we point out that DLA's reconsideration request
technically is untimely. Our Bid Protest Regulations provide that a
request for reconsideration must be received by this Office not later
than 10 working days after the basis for reconsideration is known or
should have heen known. 4 C.F.R. Sec. 21.12(b) (1986). Since the basis
for this reconsideration is the agency's dissatisfaction with our
decision, the request should have been filed within 10 working days of
the agency's receipt of the decision. The agency indicates that it
received the decision on May 19, 1986. The request for reconsideration
is untimely because, although the request is dated and postmarked on May
30, we did not receive it until June 4, 11 working days after May 19.
In light of the agency's concern ahout the lack of consistency between
the recent CICA legislation and our decision, however, we think it is
appropriate to consider the agency's reconsideration request.
The defects in the solicitation that concerned DLA revolve around the
need for a male adapter. First, the agency's need was for faucets with
male adapters, but the solicitation item description contained no
reference to that requirement. Second, two of the three approved
manufacturers part numbers listed in the solicitation as accepteble in
fact were not acceptable because they did not include male adapters. We
held that these defects did not preclude award to Smith under the
solicitation because (1) the solicitation understated the agency's
needs; (2) Smith in fact offered faucets with a male adapter, thus
meeting the agency's needs; and (3) Smith, although offering more than
the specifications required, submitted the low acceptable offer, so that
award to Smith could not be said to be prejudicial to higher-priced
offerors who competed under the solicitation.
DLA now counters that our decision is contrary to the CICA provisions
that require the use of specifications which permit full and open
competition. See 10 U.S.C. Sec. 2305 (a) (1), as added by CICA. DLA
argues that because two of three part numbers listed were incorrect,
potential offerors were misled as to the government's actual needs so
that full and open competition was not obtained. DLA also states that
"the buying center has now determined that there are five manufacturers'
part numbers which are acceptable." Finally, DLA states that it is
unknown whether "Smith's current offer would be the low offer on a
solicitation which accurately reflects the Agency's needs."
We do not believe our decision is contrary to CICA's full and open
competition standard. Although the solicitation did not accurately set
forth DLA's actual needs, the circumstances indicate that full and open
competition was obtained. As DLA points out, "full and open
competition" means that "all responsible sources are permitted to
submit. . . proposals on the procurement." 41 U.S.C. Sec. 403(7) (Supp.
II 1984). Our record indicates that eight different companies, offering
the faucets of five different manufacturers, submitted proposals. Thus,
it appears that the original solicitation, identifying only three
different manufacturers' models as acceptable but including a "Products
Offered" clause which permits suhmission of offers on alternate
products, did not preclude offers of models made by other manufacturers
and in fact such offers were obtained. Second, while the need for male
adapters was not specified and two models listed were incorrect because
they did not include the adapters, the low acceptable offeror did offer
a model with male adapters; we do not find it likely that if the other
vendors, in response to a more accurate item description or acceptable
model numhers, had offered a faucet with male adapters, a more costly
item, they would have done so at prices lower than they submitted for
less costly faucet models. Accordingly, we remain of the view that
award is appropriate under the original solicitation, that there is
little reason to anticipate an increase in the number of offerors on a
resolicitation, and that therefore DLA, despite the deficiencies in its
original solicitation, has obtained full and open competition for this
procurement which has resulted in a low-cost proposal that will meet its
needs.
With respect to DLA's concern that Smith's offer might not be low on
a resolicitation, we point out that the appropriate test is whether a
fair and reasonable low price is obtained on the original solicitation,
not whether vendors, particularly vendors other than the low acceptable
offeror on the initial competition, might decide to lower their prices
on a second competition. See Reyes Industries, Inc., B-219348.3, Apr.
3, 1986, 86-1 CPD P 316.
The prior decision is affirmed.
Comptroller General
of the United States
Matter of: NCR Corporation--Request for Reconsideration
File: B-222037.3
Date: July 30, 1986
DIGEST
Request for reconsideration by an interested party that
participated in the protest is dismissed where the arguments on
which the request is based could have been, but were not, raised
during initial consideration of the protest. In any event, the
arguments offered do not show any error of law or fact in prior
decision holding that contracting agency acted improperly by
granting extensions of dates for operational demonstrations while
denying the protester's request for extension, where all four
offerors asserted the same reason for requesting extensions.
DECISION
NCR Corporation requests reconsideration of our decision in CPT
Text-Computer GmbH, B-222037.2, July 3, 1986, 86-2 CPD P , sustaining
the protest of the Army's decision to allow extensions of dates for
operational demonstrations to only some offerors in connection with
request for proposals (RFP) No. PAENAO-84-R-0004 for microcomputer
systens. We deny the request for reconsideration.
The RFP, issued by the Army on August 20, 1984, called for the
acquisition of microcomputer systems consisting of automatic data
processing (ADP) equipment and software. The systems are to be used by
the Army's Central Accounting Division, a nonappropriated fund activity
which provides accounting support to other nonappropriated fund
activities in various military communities in Europe. Eight offerors,
including the protester, submitted initial proposals.
The Army required offerors to perform operational demonstrations of
the ADP hardware and software proposed. When the Army advised the
offerors of the schedule for demonstrations, four of the eight offerors
requested extensions of the demonstration dates because of conflicting
commitments of personnel and equipment to the Hannover trade fair, a
major exhibition of office automation equipment held annually in Europe,
which was scheduled to be held the week before demonstrations under the
RFP were to begin. The Army initially denied all four requests. Three
of the four offerors (not including the protester) then renewed their
requests for extensions. Based on their renewed requests, the Army
subsequently reversed its initial denial and granted extensions to these
three offerors. The Army's decision to grant an extension to one of the
three offerors was made before the protester's demonstration took place.
We found that the Army had no reasonable basis upon which to
distinguish among the four offerors when considering whether to grant
extensions, since all four relied on the same rationale to support their
requests, the hardship imposed by requiring demonstrations to proceed
shortly after the Hannover trade fair. We also found that the protester
was prejudiced by the Army's denial of its request for an extension,
since, unlike the other offerors, the protester was required to go
forward with its demonstration directly after conclusion of the trade
fair.
NCR, an offeror under the RFP, now challenges our findings, arguing
that the Army was not required to grant an extension to the protester
since, unlike the other three offerors, the protester did not renew its
request after the Army's initial denial. NCR also argues that the
protester was not prejudiced by being denied an extension since the
product it offered did not meet the requirements of the RFP. NCR chose
not to comment on these issues during our initial consideration of the
protest, even though, as an interested party, NCR had the opportunity to
do so. 1/ Where, as here, a party submits in its request for
reconsideration an argument that it could have presented initially, this
argument does not provide a basis for reconsideration. Sovereign
Electric Co.--Request for Reconsideration, B-214699.2, Feb. 12, 1985
85-1 CPD P 183.
In any event, NCR has not shown that our decision is in error.
Contrary to NCR's assertion, the protester's failure to renew its
request for an extension is not significant. Once the Army decided to
grant an extension to one of the four offerors, the Army was required,
as part of its duty to treat offerors equally, to offer extensions to
the other three offerors whose requests were based on the same
rationale. With regard to its second argument--that the protester's
product did not meet the RFP requirements--NCR offers no support for its
coonentioon
We deny the request.
Harry R. Van Cleve
General Counsel
FOOTNOTES
1/ NCR did comment on the other major issue in the protest concerning
issuance of a delegation of procurement authority under the Brooks Act.
FILE: B-222037.2 DATE: July 3, 1986
MATTER OF: CPT Text-Computer GmbH
DIGEST:
1. General Accounting Office has jurisdiction under the Competition
in Contracting Act (CICA) over a bid protest concerning a procurement of
automatic data processing (ADP) equipment and software conducted by the
Army, a federal agency as defined in CICA, even where the end user of
the ADP resources is a nonappropriated fund activity and no appropriated
funds are involved.
2. Challenge to contracting agency's decision to allow extensions of
dates for operational demonstrations to only some offerors which
requested extensions is timely where issue was raised in a protest to
the agency filed within 10 days after the contracting officer confirmed
the protester's speculation that some extensions had been granted.
3. Contracting agency acted improperly by granting extensions of
dates for operational demonstrations to three offerors while denying the
protester's request for extension, where all four offerors asserted the
same reason for requesting extensions (proximity in time of major trade
fair to which personnel and equipment were already committed). The
protester was prejudiced by the agency's unequal treatment of the
offerors since the protester had significantly less time to prepare for
its demonstration than the offerors who were granted extensions.
4. Contracting agency is not required to obtain a delegation of
procurement authority (DPA) from the General Services Administration
(GSA) under the Brooks Act where the value of the procurement (measured
by the proposed awardee's best and final offer) is within the dollar
ceilings for blanket DPAs from GSA.
CPT Text-Computer GmbH (CPT) protests any award under request for
proposals (RFP) No. PAENA0-84-R-0004 issued by the United States Army
Contracting Agency, Europe for microcomputer systems. CPT contends that
it was prejudiced by the Army's unequal treatment of offerors regarding
the scheduling of an operational demonstration of the microcomouter
systems. CPT also maintains that the Army failed to obtain a delegation
of procurement authority (DPA) from the General Services Administration
(GSA), as required by the Brooks Act, 40 U.S.C. Sec. 759 (1982). The
protest is sustained in part and denied in part.
The RFP, issued by the Army on Auqust 20, 1984, called for the
acquisition of microcomputer systems consisting of automatic data
processing (ADP) equipment and software. The systems are to be used by
the Army's Central Accounting Division, a nonappropriated fund activity
which provides accounting support to other nonappropriated fund
activities in various military communities in Europe. Fight offerors,
including CPT, submitted proposals by March 19, 1985, the due date for
initial proposals.
Section L-31 of the RFP, as amended, advised the offerors that the
Army reserved the right to require an operational demonstration of the
ADP hardware and software proposed. By letter to the offerors dated
March 25, the Army confirmed that demonstrations would be required
before April 24. By letter dated April 12, the Army advised each
offeror of the scheduled date for its demonstration. The schedule
allowed two davs for each demonstration over a one-month period from
April 25-26 to May 20-21. CPT's demonstration was scheduled second, on
April 29-30.
On April 15, CPT requested a change in its demonstration date because
of a conflicting commitment to the Hannover trade fair, a major
exhibition of office automation equipment held annually in Europe
scheduled for April 15-26. CPT stated that a great deal of
demonstration equipment was to be installed and many personnel had
already been committed to the trade fair. (CPT had advised the Army of
the possible conflict with the trade fair even before the Army sent the
April 12 letter with the demonstration schedule.) Three other offerors
whose demonstrations were scheduled in late April or early May also
requested changes in the demonstration dates because of conflicting
commitments to the trade fair. By letter dated April 19, the Army
denied all four requests, stating that "no changes to the dates of the
operational demonstrations can be granted."
On April 23, CPT acknowledged the original demonstration dates of
April 29-30. That same day, another offeror renewed its request for an
extension of its demonstration date, reasserting the difficulty it would
encounter in making the necessary equipment and staff already committed
to the trade fair available for the Army demonstration. The Army then
reversed its original decision and granted this offeror a one-month
extension from the originally scheduled dates of April 25-26 to May
23-24. The extension was granted on April 25, before CPT's
demonstration was scheduled to begin on April 29.
The two other offerors who originally had requested extensions also
renewed their requests in late April or early May, after CPT had
completed its demonstration. The Army granted extensions of
approximately one month to these offerors as well. Thus, of eight
offerors, four requested extensions based on the proximity of the
Hannover trade fair to the scheduled demonstration dates. The Army
initially denied all four requests, but later reversed its decision and
granted one-month extensions to three offerors that had renewed their
requests for extended. All demonstrations were completed by June 5.
In mid-October, the contracting officer asked all eight offerors to
extend their acceptance periods to December 31. By letter dated October
22, CPT extended its acceptance period as requested. In that letter,
CPT also stated that it "had reason to believe" that the Army was
conducting discussions with only one offeror and had granted that
offeror an extension of time for its demonstration. The Army replied by
letter dated December 6, received by CPT on December 9, in which the
Army advised CPT that it had been excluded from the competitive range
and confirmed that other offerors had been given extensions to conduct
their demonstrations. The Army incorrectly stated, however, that all
the extensions had been granted after the CPT demonstration was
completed; in fact, as discussed above, one extension was granted
before the CPT demonstration took place. The Army also stated that the
possibility of accommodating the requests for extensions did not become
clear until May, the month after the initial requests were made. At
that point, according to the Army, CPT had already been determined to be
outside the competitive range.
On December 17, CPT filed a protest with the Army challenging the
decisions to exclude CPT from the competitive range and to grant
extensions to the other offerors. A meeting to discuss the protest
allegations was held between CPT and the Army on December 30, during
which the Army clarified that the competitive range determination was
made in late Auqust, not May, as stated in the Army's December 6 letter.
By telex dated December 31, the Army also retracted its statement that
extensions were granted only after CPT completed its demonstration; the
Army acknowledged that one offeror's request was granted before the CPT
demonstration took place. The Army explained its decision to allow the
extensions as follows:
"As you implied, the original demonstration schedule designated
another firm to demonstrate its system before CPT. Refer to this
firm as firm 1. Before any demonstrations, firm 1, CPT and others
came to the government asking for delay in demonstration. All
reguests were denied. Firm 1 later came back to the government
with extenuating circumstances that convinced officials that it
would be reasonable to change the demonstration date. In effect
firm 1 said they could not perform a demonstration. The
contracting officer weighed the matters and changed the
demonstration date. This decision was based on the situation
faced by firm 1 and the consequences the government would face if
firm 1's request was denied. After the initial denial CPT did not
press the issue of delaying the demonstration or the consequences
CPT or the government would face if the dates were not changed."
The Army then denied CPT's protest by letter dated January 28, 1986,
received by CPT on January 30.
CPT filed its protest with our Office on February 13. The Army's
report on the protest was filed on March 24. At a conference held on
March 31, CPT questioned whether the Army had obtained a DPA from GSA
under the Brooks Act before issuing the RFP. On April 3, the Army
advised that it had not applied to GSA for a DPA. By letter dated April
4, CPT then raised as an additional ground of protest that the Brooks
Act required the Army to obtain a DPA before issuing the RFP.
Award has not yet been made.
Jurisdiction
The Army argues that because the microcomputer systems will be used
by a nonappropriated fund activity, our Office lacks jurisdiction under
the Competition in Contracting Act of 1984 (CICA), 31 U.S.C. Secs. 3551
et seq. (Supp. II 1984), to consider CPT's protest. This argument has
been considered and rejected by our Office in Artisan Builders,
B-220804, Jan. 24, 1986, 65 Comp. Gen. , 86-1 CPD P 85. As we
explained in that decision, our jurisdiction under CICA extends to bid
protests challenging procurements conducted by any federal agency; our
jurisdiction does not depend on the intended use of the items being
acquired or the source of the funds for the acquisition. Here, the
procurement is being conducted by the Army, unquestionably a federal
agency as defined in CICA, 31 U.S.C. Sec. 3551 (3). Accordingly, CPT's
protest challenging the procurement is within our jurisdiction under
CICA.
Scheduling the Operational Demonstrations
The protester contends that the Army acted improperly in allowing
other offerors an extension of time in which to conduct the required
demonstration of ADP hardware and software. As discussed further below,
we agree that the Army acted improperly with regard to scheduling the
demonstrations and we find that CPT was prejudiced by the Army's unequal
treatment of the offerors in this regard.
The Army first contends that CPT failed to raise this issue in a
timely manner. We disagree. Under our Bid Protest Regulations, 4 C.F.R
Sec. 21.2(a) (2) (1986), CPT was required to raise this issue in a
protest to the Army or our Office within 10 days of when CPT knew or
should have known of this basis for protest. CPT filed its protest with
the Army on December 17, less than 10 days after it received the Army's
December 6 letter confirming that extensions had been granted to other
offerors. The Army argues that CPT knew that extensions had been
granted to other offerors before it filed its protest with the Army,
since CPT first raised the issue in its October 22 letter to the
contracting officer. In our view, the October 22 letter was intended as
a request for confirmation of speculative information CPT had obtained
from a source other than the contracting officer. We believe that CPT
acted reasonably in seeking to confirm the accuracy of the information
before raising the issue in its protest to the Army.
As discussed above, four of the eight offerors requested extensions
of the demonstration dates because of conflicting commitments to the
Hannover trade fair to be held the week before demonstrations were to
begin. The Army, while initially denying all the requests, subsequently
reversed itself and granted extensions to the three offerors other than
CPT which had renewed their requests for extensions after the Army's
initial denial. The decision to grant an extension to one of the three
offerors was made before the CPT demonstration took place.
The Army's explanation for its disparate treatment of CPT and the
other offerors is that CPT "never claimed that the Hannover trade fair
prevented a demonstration." We find this explanation unpersuasive since
there is no significant difference in the reasons the offerors gave for
requesting extensions. On the contrary, all four offerors relied on the
same rationale, the hardship imposed by requiring demonstrations to
proceed shortly after the Hannover trade fair. We see no reasonable
basis for distinguishing among the offerors when considering their
requests for extensions, particularly since the Army decided to reverse
itself and grant an extension to one offeror even before CPT's
demonstration began.
We also find that CPT was prejudiced by the Army's denial of its
request. The three other offerors which were granted extensions were
given approximately one additional month after the Hannover trade fair
to prepare for their demonstrations. In contrast, CPT was required to
go forward with its demonstration on Monday, April 29, directly after
the conclusion of the trade fair on Friday, April 26, with only the
intervening weekend to prepare its equipment and personnel.
CPT maintains that the lack of time hindered its ability to make a
proper presentation of its product. CPT argues that because it offered
an innovative and sophisticated software product, a clear explanation
and presentation of the software's capabilities were crucial to proper
evaluation of CPT's proposal by the Army evaluation team, many of whom
did not have a technical background. CPT contends that a lack of
familiarity with its software, not deficiencies in the software,
accounted for the Army's decision to exclude CPT's technical proposal
from the competitive range. The Army's technical evaluation concluded,
for example, that CPT's software product was only a "tool" to be used to
create software programs, and therefore did not meet the RFP requirement
for existing demonstrable software. According to CPT, however, its
product is a fully developed program, not simply a tool to write the
Army's own programs which operates in a different manner than other
currently available software, and that the Army's misunderstanding of
CPT's product could have been avoided if CPT had been given the time to
prepare a more detailed presentation that the Army would have more
easily understood. The protester complains that because of its
commitment to the Hannover fair it had no time to tailor such a
non-technical briefing.
As a general matter, any offeror is likely to benefit by having more
time to prepare for a demonstration of its product. This is
particularly true here, where the demonstration involves complex
programs and extensive functions which, in CPT's case, were to be
accomplished using innovative software with which the technical
evaluators might not be familiar. Accordingly, we find that CPT was
prejudiced by being denied the extension which the Army granted to the
other offerors.
In view of our finding, we sustain the protest on this ground. By
separate letter to the Army, we are recommending, as CPT requested, that
the Army allow CPT to conduct another demonstration. The Army then
should reevaluate CPT's proposal based on that demonstration and
determine whether CPT should be included in the competitive range and
allowed to submit a best and final offer.
CPT also raised other issues regarding the conduct of the
demonstrations, principally challenging the Army's failure to notify CPT
of the deficiencies found in its proposal and allow CPT a second chance
to perform the demonstration, and the Army's failure to disclose until
after the protest was filed a checklist of features used to evaluate
CPT's proposal at the demonstration. We need not address these issues
in view of our recommendation that CPT be given another opportunity to
perform the demonstration. Delegation of Procurement Authority
CPT also argues that the Army failed to obtain a DPA for this
procurement as required by the Brooks Act. We find this argument
without merit. 1/
Under the Brooks Act, 40 U.S.C. Sec. 759(a), GSA is given central
authority over the acquisition of ADP resources by federal agencies.
Under 40 U.S.C. Sec. 759(b), GSA may delegate this authority to the
federal agencies themselves. The Federal Information Resources
Management Regulation (FIRMR) establishes blanket DPAs from GSA to
contracting agencies where the value of the procurement is below
designated dollar ceilings; for equipment, the ceiling is a purchase
price of $2.5 million (41 C.F.R. Sec. 201-23.104-1 (c) (1)); for
software, $1 million (41 C.F.R. Sec. 201-23.104-2(c) (1)); and for
maintenance, $1 million annually (41 C.F.R. Sec. 201-23.104-3(b)(1)).
We have examined in camera the best and final offer submitted by the
proposed awardee and we agree with the Army that the prices proposed for
the equipment, software and maintenance called for under the RFP do not
exceed the designated dollar ceilings in the FIRMR. As a result, the
Army was not required to obtain a specific DPA from GSA for this
procurement. Accordingly, we deny this ground of the protest.
The protest is sustained in part and denied in part.
Comptroller General
of the United States
FOOTNOTES
1/The Army argues that the Brooks Act does not apply to this
procurement and that the DPA issue was not timely raised. We need not
address these arguments, however, since assuming the Brooks Act applies
the protester's argument on the DPA issue is clearly without merit.
B-221950
August 19, 1987
DIGEST
It is unnecessary to grant relief to a certifying officer in a case
where the 3-year statute of limitation period has expired. Under these
circumstances, the account in question must be considered settled and
the accountable officer involved cannot be held liable for any erroneous
payment. 31 U.S.C. Sec. 3526(c).
Mr. Larry Wilson
Office of Finance and Management
U.S. Department of Agriculture
Dear Mr. Wilson:
This is in response to your request that we relieve Mr. E.C.
Quintana, certifying officer with the U.S. Forest Service, of liability
for a $5,250 duplicate payment made as a result of his certification
concerning the propriety of that payment. As explained below, Mr.
Quintana is not liable for this payment because his accounts covering
this erroneous certification have been settled by operation of law.
The duplicate payment that had previously been paid for services was
made to Sundance Helicopter, Inc. (SHI), a contractor from which the
Forest Service leased aircraft and crew several times in September 1982.
It appears that Mr. Quintana certified the first voucher for payment
on October 7, 1982, before the Forest Service received an invoice from
SHI. We are unable to determine what prompted Mr. Quintana's initial
certification, which, although unsupported by an invoice, was for the
correct amount owed SHI. Subsequently, upon receiving the SHI invoice,
Mr. Quintana certified a second payment for the same claim. The second
payment was made on November 5, 1982. A letter was sent to SHI on
January 13, 1983, explaining the circumstances of the overpayment along
with a bill for collection of the loss. SHI subsequently declared
bankruptcy and it has been determined that the overpayment is not
recoverable. Your request for relief is dated January 24, 1986; it was
received in this Office on February 3, 1986.
Under 31 U.S.C. Sec. 3526(c), our Office is authorized to settle
accounts of accountable officers, and hence to grant or deny relief,
"within 3 years after the date the Comptroller General receives the
account" except when the loss is due to fraud or criminality by the
accountable officer. As a result of changes in audit methods, accounts
are now retained by the various agencies where they are subject to audit
and settlement by our Office. To reflect this procedural change, our
Office now considers the date of receipt by the agency of substantially
complete accounts, or where accounts are retained at the site, the end
of the period covered by the account, as the point from which the 3-year
period provided for in 31 U.S.C. Sec. 3526(c) begins to run. See 62
Comp. Gen. 498 (1983). Our Office has consistently held that once the
3-year statutory period has expired, the account in question is
considered settled and there is no need for our Office to consider
whether or not to grant relief. Id.
In the present case, you state that the duplicate payment was made in
November 1982, and was discovered during the review of the financial
statement for that period which took place in January 1983. Since there
is no evidence of fraud or other criminality on the part of the
accountable officer involved, the 3-year period within which our Office
is authorized to settle this account expired in January 1986. Our
Office did not receive your request for relief until February 1986;
therefore, the account must be regarded as settled. Accordingly, since
Mr. Quintana can no longer bear any financial liability with respect to
the duplicate payment, there is no need for our Office to consider
whether or not to grant relief.
To avoid this problem in the future, we note that the GAO Policy and
Procedures Manual for Guidance of Federal Agencies requires prompt
reports of financial irregularities, both to avoid the expiration of the
3-year limitation period and to allow our Office an adequate opportunity
to determine whether relief should be granted or denied. Thus, agencies
are required to report irregularities not more than 2 years after the
date the accounts are made available to GAO for audit (that is, the date
the agency has substantially complete accounts). 7 GAO Policy and
Procedures Manual, Sec. 23.14. See also B-221720, May 8, 1986; and
B-217741, October 15, 1985.
Sincerely yours,
(Mrs.) Rollee H. Efros
Associate General Counsel
Matter of: VA--Proposed Amendment of Voucher Payment
SystemsMiscellaneous Supplies for Veterans in Training Programs
File: B-221949
Date: June 30, 1987
DIGEST
GAO approves proposed amendment to Veterans Administration voucher
payment system permitting the waiver of required review and
documentation for unsupported invoices for up to $35 in miscellaneous
supplies provided to veterans in training programs authorized by 38
U.S.C. Secs. 1500-1521. For the purpose of future audits, the agency
should be prepared to demonstrate that a significant number of
inappropriate or false claims have not been revealed; that it will
periodically review the $35 limit; that it will assure that only proper
claims have been submitted; and that it has in force adequate controls
against processing multiple claims of $35 each without appropriate
documentation and review.
DECISION
The Director, Office of Budget and Finance, Veterans Administration
(VA), has requested our decision on whether the VA may amend its voucher
payment system to permit the waiver of required review and documentation
for unsupported invoices for up to $35 in miscellaneous supplies
provided to veterans participating in training and rehabilitation
programs authorized under 38 U.S.C. Secs. 1500-1521 (1982) (the training
provisions).
Support for the proposal can be found in analogous federal
regulations and GAO decisions, and VA has stated that veterans receiving
training under the training provisions can reasonably be expected to
require $35 in miscellaneous supplies each term. For the purpose of
future audits, however, we expect the agency to have in force adequate
controls to protect against inappropriate or false claims by vendors.
BACKGROUND
The VA's current voucher payment procedure requires that all requests
for reimbursement by schools or vendors for training and rehabilitation
services be reviewed by the Department of Veterans Benefits, Vocational
Rehabilitation and Counseling (VR&C) service staff. All charges and
purchases submitted to the VR&C staff for administrative approval must
be supported by invoices or other documentation specifically identifying
the individual items involved. The documentation provides the VR&C
staff with the information necessary to determine whether the submitted
services or purchases are appropriate for the particular veteran's
training program. DVB Circular 28-81-5, revised (1983), Secs. 3a,b,d.
The proposed voucher system would waive the detailed review process for
miscellaneous supply items, allowing the VC&R staff to accept up to $35
in school or vendor charges for miscellaneous supply items per term for
each veteran without reviewing for the "appropriateness" of each
miscellaneous item furnished. Proposed change 1 to DVB Circular
28-81-5, Sec. 3d.
At issue in this case is whether the information furnished under the
proposed waiver is sufficient to support certification for payment, in
view of the federal requirements for the documentation of disbursements
contained in sections 18.2 and 18.3 of title 7 of the GAO Policy and
Procedures Manual for the Guidance of Federal Agencies (policy manual).
DISCUSSION
Section 18.2 of the policy manual provides in part that
"disbursements shall be supported by basic payment documents,
including purchase orders, contracts, receiving reports, invoices,
bills, statements of accounts, etc., showing sufficient
information to adequately account for the disbursements * * *."
Section 18.3 authorizes the use of invoices or bills in place of
prescribed vouchers, if they are sufficiently detailed.
Notwithstanding this requirement for sufficient detail, there is
precedent for the proposed waiver in current federal regulations which
set limits for certain expenses that could reasonably be expected to be
incurred by claimants, and which allow reimbursement of these expenses
without supporting documentation. For example, the Federal Travel
Regulations and Foreign Service Travel Regulations do not require
receipts for allowable cash expenditures of less than $25. See FTR, para
1-11.3, FPMR 101-7, September 1981, as amended, Supp 5, May 20, 1983; 6
FAM 116.3 (1984).
Decisions of this Office also have recognized that in certain
circumstances where the expenses could reasonably be expected to be
incurred by claimants, and detailed documentation is impractical to
obtain, the documentation requirements for disbursements may be relaxed.
For example, we found in B-179724, Jan. 14, 1974, that certain
businesses whose sales frequently comprise small numbers of items having
low unit costs do not ordinarily provide customers with detailed,
itemized receipts. Recognizing the impracticality of requiring
detailed, itemized receipts, and the refusal by some vendors to supply
such receipts, we held that in situations of this type involving small
government purchases, checkout register receipts contain enough
information to allow for the audit of these purchases, and are
sufficient to permit disbursement. B-179724, supra, at 2. Agencies also
have been given discretionary authority to pay unsupported prepaid
freight charges, shown as a separate item on the contractors' invoices,
when the amount claimed as freight is less than $100. To this end, we
have approved a waiver of the requirement that contractors furnish
copies of their freight receipts in support of their billings. See
A-24222, B-121220, Feb. 18, 1977; A-24222, Oct. 23, 1975.
On the basis of the above regulations and decisions, we conclude that
the VR&C staff could waive the requirement for itemized receipts or
vouchers and the detailed review of the appropriateness of each
miscellaneous supply item furnished. Under this procedure, requests
from vendors for payment of up to $35 per veteran per term, which VA
states can reasonably be expected to be incurred in furnishing veterans
with appropriate miscellaneous supply items under the training
provisions, could be reimbursed by VA. In addition to demonstrating
that $35 is a reasonable amount of miscellaneous expenses for each
veteran, for the purpose of future audits the agency should be able to
demonstrate that: (1) prior audits have not revealed a significant
number of inappropriate or false claims; (2) it will periodically
review the $35 limit, and will assure that only proper claims have been
submitted; and (3) it has in force controls which would assure that
multiple claims for an individual veteran, each under $35 but which,
when combined, exceed that amount, will not be processed without
appropriate documentation and review.
Comptroller General
of the United States
File: B-221944-O.M.
Date: March 24, 1989
DIGEST
The Defense Officer Personnel Management Act, Pub. L. No. 96-513,
December 12, 1980, 94 Stat. 2904, repealed 37 U.S.C. Sec. 205(a) (7)
and (8), which had authorized constructive longevity of service credit
for medical and dental officers of the uniformed services based on their
years of professional education. The statute contained a savings clause
that preserved the credit for service members who had been credited with
constructive service upon an original appointment. The savings clause
may be extended to those officers who had been discharged from service
after receiving the constructive credit and later reappointed in the
service after the effective date of the Act.
MEMORANDUM
To: Senior Associate Director, Claims Group (GGD) - Oliver W.
Krueger
From: General Counsel - James F. Hinchman
Subject: Constructive Service Credit - LCDR Karl G. Baer, USNR -
Z-2854796; B-221944.2-O.M.
Returned is your file Z-2854796 relating to the claim of Lieutenant
Commander Karl G. Baer, U.S. Navy Reserve, for constructive service
credit formerly authorized under 37 U.S.C. Sec. 205. For the following
reasons Lieutenant Commander Baer's claim may be allowed.
Lieutenant Commander Baer was initially commissioned in the Navy
Reserve on January 28, 1969. At that time a medical officer of the
uniformed services was entitled to a constructive service credit for
basic pay purposes of 4 years service for medical school and 1 year for
internship under 37 U.S.C. Sec. 205(a) (7) and (8). He received this
service credit in the computation of his basic pay until his discharge
from the Navy Reserve on August 19, 1980. With the enactment of the
Defense Officer Personnel Management Act (DOPMA), Pub. L. No. 96-513,
December 12, 1980, 94 Stat. 2904, the provisions of law authorizing
constructive service credit were repealed effective September 15, 1981.
In 1984, Lieutenant Commander Baer was reappointed a medical officer in
the Navy Reserve. He applied for the constructive service credit but
was refused by the Navy on the grounds that the laws authorizing such
credit had been repealed and that he was not covered by the applicable
savings provision of DOPMA since he was not in the Navy on the effective
date of the act.
The Navy applied section 625(b) of DOPMA to Lieutenant Commander Baer's
circumstances and correctly concluded that he was not entitled to the
service credit under that provision. Section 625(b) provides as
follows:
"(b) (1) Any officer who on the effective date of the Act is an
officer of the Amy or Navy in the Medical or Dental Corps of his
armed force . . . is entitled to include in the years of service
creditable to him for the computation of basic pay and retired pay
the years of service creditable to him for such purposes under
clauses (7) and (8) of section 205(a) of title 37, United States
Code, as in effect on the day before the effective date of this
act."
Since Lieutenant Commander Baer was not an officer in the Medical Corps
on the effective date of the act, he is not entitled to the service
credit saved under this section.
Although this provision is specific in dealing with constructive
service, it is our view that section 625(a) (1) of DOPMA is controlling
in Lieutenant Commander Baer's situation. That section provides as
follows:
"625.(a) The amendments made by this Act do not affect the
crediting of years of service to any person who on the day before
the effective date of this Act . . .
(1) had been credited with years of service upon an original
appointment as an officer or after such an appointment; or. . . ."
The plain language of this section indicates that it was Congress'
intent to preserve service credit for any person who had received credit
as an officer prior to the enactment of DOPMA.
Lieutenant Commander Baer had been credited with constructive service
on his original appointment on the day before the effective date of the
act. Upon reappointment, he became entitled to credit for his previous
actual and constructive service. Accordingly, his claim should be
allowed.
B-221940
October 7, 1987
DIGEST
Although generally meals or snacks may not be provided to government
employees at their normal duty station, limited authority exists under
Government Employees Training Act. Record is insufficient to determine
propriety of expenditure by Internal Revenue Service imprest fund
cashier for coffee, donuts, and coffee pot for use at IRS training
seminars. However, assuming expenditure was improper, relief may be
granted under 31 U.S.C. Sec. 3527(c) since there is no indication of bad
faith and cashier, who initially questioned propriety and subsequently
paid voucher with approvals by proper authorities including a
contracting officer, exercised reasonable care under the circumstances.
G. J. Pellon, Certifying Officer
Internal Revenue Service
Southeast Region
P.O. Box 926
Atlanta, Georgia 30301
Dear Mr. Pellon:
This is in response to your request (your reference RM:F:A:GP) for
relief of Ms. Cynthia F. Mays, imprest fund cashier at the Nashville
District, from liability for improper payments in the amount of $119.63
made in November 1985. For the reasons stated below, relief is granted.
The expenditure in question represents the purchase of coffee, cups,
donuts, and a coffee pot to be used in "Excel Thru People" training
seminars conducted for Internal Revenue Service employees. You, as
certifying officer, denied reimbursement to the imprest fund for these
expenses based on 47 Comp. Gen. 657 (1968).
At the outset, on the record presented, we are unable to determine
with certainty whether the expenditures in question were improper. Your
interpretation of 47 Comp. Gen. 657, supra, was quite correct. As a
general proposition, meals or snacks may not be furnished to government
employees at their normal duty stations. However, meals or snacks may
be authorized as a necessary expense under the Government Employees
Training Act, specifically 5 U.S.C. Sec. 4109, if the agency determines
that this is necessary to achieve the objectives of the training
program. Generally, this requires a determination that attendance at
the meals or snack periods is necessary in order for the employees to
obtain the full benefit of the training. See, e.g., B-193955, September
14, 1979. We do not have enough facts to determine whether this concept
would apply to the "Excel Thru People" seminars. However, even if we
proceed on the assumption that the expenditures were unauthorized, there
is adequate basis in this case to grant relief to the disbursing officer
from personal liability.
Under 31 U.S.C. Sec. 3527(c), we are authorized to relieve a
disbursing officer from liability for an improper payment upon finding
that the payment was not the result of bad faith or lack of reasonable
care on the part of the officer. Application of these standards depends
on the facts and circumstances of the particular case.
The documents you forwarded to us include a letter (undated) from
John C. Stocker, Chief, Resources Management Division, IRS Nashville
District, which states as follows:
". . . At the time the sub-vouchers were presented to the
Cashier for payment, she did question their legality. The Cashier
contacted the Chief Contracting Officer who stated that he had
read a recent decision regarding purchases of this type which
greatly reduced prior restrictions. The Chief Contracting Officer
advised the Cashier to proceed with the disbursements. The Chief
Contracting Officer has since retired and we are unable to locate
the decision to which he referred. With the required approvals on
the necessary forms and the Chief Contracting Officer's specific
approval, the Cashier would not have questioned the purchase
further."
This case is substantially similar to B-211265, June 28, 1983 (copy
enclosed), in which we granted relief to another imprest fund cashier in
your region. We concluded that the cashier in that case "exercised
reasonable care in paying a voucher with approvals by proper authorities
including a contracting officer." The same applies to Ms. Mays in this
case. (We too are unaware of which decision the former contracting
officer may have had in mind, but this is irrelevant since our granting
of relief is premised on the payment being unauthorized.) Also, there is
no indication of bad faith on the part of Ms. Mays. On the contrary,
she did attempt to question the propriety of the payment. Accordingly,
relief is granted and the imprest fund may be reimbursed.
Sincerely yours,
(Mrs.) Rollee H. Efros
Associate General Counsel
Enclosure
Matter of: Howard Management Group -- Claim for Costs
File: B-221889.2
Date: June 17, 1987
DIGEST
A protester is entitled to be reimbursed for its reasonable bid
preparation costs and the costs of filing and pursuing its protest where
acceptance of the recommendation for corrective action became
impracticable because the agency never suspended performance on the
contract it had awarded as required by law and the work had been almost
completed during the agency's consideration of the recommendation.
DECISION
Howard Management Group (HMG) requests a finding by our Office that
it is entitled to reimbursement from the Department of the Navy for its
bid preparation costs and the costs of preparing, filing and pursuing
its protest. HMG had protested the rejection of an amendment to its bid
as late under invitation for bids (IFB) No. N62468-84-B-4144. We
concluded that the Navy's mishandling in the process of receipt of the
modification was the paramount cause of its being late since the Navy
had erroneously informed HMG that it had a telex machine to which
Western Union could transmit the modification when, in fact, it had a
telecopier connected to the telephone network. We therefore sustained
the protest and recommended that the Navy consider HMG's amendment and
that if HMG was found to be the low, responsive and responsible bidder,
the contract awarded to another firm be terminated for convenience and
award made to HMG. Howard Management Group, B-221889, July 3, 1986,
86-2 CPD P 28.
The record shows that the Navy never did suspend performance of the
contract awarded to another firm as required by the Competition in
Contracting Act, 31 U.S.C. Sec. 3554(c) (3) (Supp. III 1985), and did
not execute the required determination and findings (D&F) to allow
performance to continue until June 11, 1986, more than 3 months after it
had been notified of the protest. After we sustained HMG's protest, we
were advised by the Navy that our recommendation could not be followed
since the awarded contract was almost complete.
Thus, the Navy has unreasonably excluded HMG from the procurement,
and no remedy other than reimbursement for costs is presently available.
We, therefore, find HMG entitled to recover its reasonable costs
incurred in the preparation of its bid and the costs of filing and
pursuing its protest, including attorney's fees. 4 C.F.R. Sec. 21.6(d)
and (e) (1986); Associated Healthcare Systems, Inc., B-222532, Sept. 2,
1986, 65 Comp. Gen. (1986), 86-2 CPD P 246; E.H. Pechan & Assocs.,
Inc., B-221058, Mar. 20, 1986, 86-1 CPD P 278.
HMG should submit its claims for such costs directly to the Navy. If
the parties are unable to reach an agreement within a reasonable time,
this Office will determine the amount to be paid. 4 C.F.R. Sec. 21.6(f)
Comptroller General
of the United States
FILE: B-221889 DATE: July 3, 1986
MATTER OF: Howard Management Group
DIGEST:
Agency should have considered protester's late bid modification
because government mishandling in the process of receipt was paramount
cause of the late receipt since the agency erroneously informed
protester it had a telex to which Western Union could transmit the
modification when, in fact, the agency had a telecopier connected to the
telephone network.
Howard Management Group (HMG) protests the award of a contract to Don
Moorhead Construction, Inc. for construction of a water main by the
Department of the Navy under invitation for bids (IFB) No.
N62468-84-B-4144. The Navy refused to consider HMG's late bid
modification and without such modification, HMG's bid was not low. HMG
contends that the delay in the Navy's receipt of the modification was
due to erroneous information it had received from the Navy regarding the
presence of a telex machine at the Navy facility.
We sustain the protest.
The bids were opened at 2:30 p.m., December 3, 1985, with HMG's bid
of $5,000,000 being the highest of the three bids received. HMG,
however, had attempted to reduce its price by $3,200,000 by a telegram
sent at 12:47 p.m. The telegram was not delivered until after bid
opening. HMG contends that the telegram was late because the Navy
furnished it a number for a XEROX Telecopier rather than the telex
number it requested. This machine could not receive Western Union
messages and HMG was not aware that it was not a telex until after bid
opening. 1/ As a result, Western Union's attempts to transmit HMG's
modification were futile until a telegram was delivered to the Navy at
4:57 p.m.
As an initial matter, the Navy contends that the protest is untimely.
The Navy's report contains a memorandum dated December 4 and written by
the contract specialist for this procurement. It states that HMG's
president had called that day and was told that the late modification
could not be considered. Another memorandum, dated February 26, 1986,
by the same contract specialist states that the HMG president had called
to determine the status of the procurement. He was told that award had
been made to the second low bidder after the first low bid had been
withdrawn. The memorandum further states that HMG's president then
insisted that HMG was the second low bidder because of its bid
modification, and that the contract specialist's response was "I told
him that his bid modification was late the day of bid opening and could
not be considered." HMG's protest to our Office was received on February
27.
HMG maintains that its president cannot recall being told on December
4 that the modification could not be considered. He remembers the
conversation as indicating that the contract specialist was uncertain
how the modification would be treated. HMG points to its letter of
December 6 asking the contract specialist to have a size determination
made with regard to the low bidder. HMG contends this supports HMG's
position because it would not have been written if HMG had been told its
modification would not be considered. HMG insists that February 26 was
the first indication it had that its modification was not considered.
We generally resolve disputes over timeliness in the protester's
favor if there is at least a reasonable degree of evidence to support
the protester's version of the facts. Lucco Art Studio, Inc., B-217422,
Feb. 27, 1985, 85-1 CPD P 249. We recognize that the memorandum of
December 4 by the contract specialist is entitled to great weight.
HMG's letter of December 6, however, is inconsistent with HMG having
been told 2 days before that its late modification would not be
considered. We think that this letter raises sufficient doubt as to
what was conveyed to HMG in the December 4 telephone conversation to
warrant consideration of the merits of HMG's protest that was received
in our Office 1 day after HMG was informed that award to another firm
had been made. See Ikard Mfg. Co., Inc. B-192578, Feb. 5, 1979, 79-1
CPD P 80; Conine Rentals, Inc., B-194143, June 26, 1979, 79-1 CPD P
456.
The late bid clause permits a telegraphic bid modification that is
received after bid opening but before contract award to be considered if
the government determines that the late receipt was due solely to
government mishandling after receipt at the government installation. In
order for mishandling to occur, however, the government must first have
possession of the modification. See Hydro Fitting Mfg. Corp., 54 Comp.
Gen. 999 (1975), 75-1 CPD P 331. That was not the case here since the
lack of a telex machine resulted in the failure of Western Union's
several attempts to transmit HMG's modification to the Navy installation
prior to bid opening.
Nevertheless, we have held that a strict and literal interpretation
of the late bid regulations should not be used to reject a bid
modification where it would contravene the intent and spirit of those
regulations. Hydro Fitting Mfg. Corp., supra. Thus, a bid modification
received after bid opening may be considered where there was government
mishandling in the process of receipt that was the paramount cause of
the modification being late and the bidder did not gain the kind of
unfair competitive advantage the regulations were designed to prevent.
CWC, Inc., B-204445, Dec. 15, 1981, 81-2 CPD P 475. For example, in
Hydro Fitting Mfg. Corp., supra, we held that the fact that a telex
machine ran out of paper and prevented the transcription of a
telegraphic bid prior to bid opening constituted government mishandling.
We found that there was no unfair competitive advantage because a copy
of the telegram indicated it was transmitted prior to bid opening and a
copy was also mailed to the agency prior to the time the protester could
have known of the telex malfunction. In Singleton Contracting Corp.,
B-215186, Oct. 29, 1984, 84-2 CPD P 471, we held that the agency's
discontinuance or removal of a telex machine designated in the
solicitation for receipt of telegraphic bids or modifications also
constituted government mishandling. We noted that the codes on the
Western Union message clearly indicated the message had been entered
into the Western Union system in sufficient time to have reached the
agency telex terminal designated in the message if it had been
operative. See also The Standard Products Co., B-215832, Jan. 23, 1985,
85-1 CPD P 86.
We think the situation presented here fits within the rationale of
these cited cases. As in Singleton, supra, the codes on the Western
Union message indicate that the message amending Howard's bid was in the
possession of and transmitted by Western Union at 12:47 p.m. on the day
of bid opening--a time that should have been sufficient for it to reach
its intended destination by the 2:30 p.m. bid opening if the telex was
in existence or by telegram if Howard was aware of the lack of telex
equipment. 2/ Moreover, as in CWC, supra, the agency, not Western Union,
was the paramount cause of the delay.
Thus, we believe that while there was not conscious effort to do so,
the Navy did, in fact, mislead HMG by erroneously referring to its
machine as a "telex" and failing to recognize that its machine was not
capable of receiving messages from Western Union. 3/ We conclude that
the Navy's communication of erroneous information constituted government
mishandling in the process of receipt and was the paramount cause of
HMG's modification being late. We further conclude that under these
circumstances, no unfair competitive advantage will inure to Howard by
consideration of its bid. We therefore believe the modification should
be considered.
By separate letter of today to the Secretary of the Navy, we are
recommending that HMG's bid modification be considered and if HMG is
found to be the low responsive and responsible bidder, that the contract
with Don Moorhead Construction be terminated for convenience and the
award made to HMG.
The protest is sustained.
Comptroller General
of the United States
FOOTNOTES
1/ Telex is a common carrier direct dial teletypewriter switching
service. In the United States, Western Union is the carrier. A
telecopier, on the other hand, is a device for transmitting facsimile
copies of a document over ordinary telephone lines. A telecopier number
is therefore an ordinary telephone number to which the telecopier
equipment is connected; it is not the equivalent of a telex number
since telex service is not connected to the telephone network. In
addition, Western Union has advised us that a telex number can have from
4 to 9 digits. Thus, a Western Union operator would not be aware that
an ordinary telephone number would not, in fact, be a proper telex
number.
2/ The Federal Acquisition Regulation, Sec. 14.303 (a) FAC 84-5),
authorizes the receipt of a telegraphic modification by telephone from
the receiving telegraph office if the telephone message is later
confirmed by a written copy of the telegram that formed the basis of the
telephone call. It seems clear that the receiving telegraph office had
ample opportunity to telephone the content of the message prior to bid
opening if it had not instead attempted to transmit the message via
telex.
3/ The Navy's report still insists it gave its "telex" number to the
protester even though its internal documents indicate that the number
given is for access to the Xerox telecopier.
FILE: B-221888 DATE: July 2, 1986
MATTER OF: Newport News Shipbuilding and
Dry Dock Company
DIGEST:
1. Protest alleging improprieties in a solicitation issued under the
Pub. L. 99-190 test program for overhaul of Navy vessels falls within
the definition of protest in the Competition in Contracting Act (CICA)
since CICA does not require that an award be proposed at the time a
protest is filed and a proposed award within the statutory definition
was contemplated when the solicitation was issued.
2. A protester which did not submit a proposal but is a potential
competitor if the protest is successful is an interested party to pursue
a protest alleging, among other things, that solicitation contains
ambiguously defined work scope.
3. Protest that ambiguities and omissions in the statement of work
preclude a common basis of bidding is denied where the record shows that
offerors have been given access to all information reasonably available
to the agency. To the extent that there are uncertainties as to exactly
what will be required, offerors can take these uncertainties into
account in computing their offers; the mere presence of risk in a
procurement does not make the competition improper.
4. Protest against agency's selection of lowest target price as the
sole evaluation criterion is sustained, and costs for filing and
pursuing the protest, including attorney's fees, are granted. In view
of the unique nature of Pub. L. 99-190's public-private competition, the
Navy should have conducted some type of analysis of the price elements
to ascertain their reasonableness.
5. Where protester raises new grounds of protest in its comments to
the agency report and the grounds were known more than 10 working days
prior to the submission of the comments, the new grounds of protest are
untimely and will not be considered.
6. Under the Competition in Contracting Act of 1984, agencies are
primarily responsible for determining whether to release certain
documents. Nevertheless, decisions on bid protests are based on the
entire record and not merely on those portions that have been released
to the protester.
Newport News Shipbuilding and Dry Dock Company (NNS) protests the
Naval Sea Systems Command's (NAVSEA) January 24, 1986, request for
proposals (RFP) for the overhaul of two nuclear submarines, USS Benjamin
Franklin (SSBN 640) and USS George Bancroft (SSBN 643). NNS contends
that the RFP contains an ambiguously def ined work scope, an improper
evaluation factor of lowest target price, and a fixed-price contract
format which precludes a true, fair and meaningful competition between
public and private shipyards.
We deny the protest in part and sustain it in part.
BACKGROUND
Title II of the Department of Defense Appropriations Act for fiscal
year 1986, Pub. L. No. 99-190, appropriated funds for a test program to
acquire the overhaul of four or more vessels by competition between
public and private shipyards. Specificaily, the act provides:
"That of the total amount of this appropriation made available
for the alteration, overhaul, and repair of naval vessels, not
more than $3,650,000,000 shall be available for the performance of
such work in Navy shipyards: Provided further, That from the
amounts of this appropriation for the alteration, overhaul and
repair of naval vessels, funds shall be available for a test
program to acquire the overhaul of four or more vessels by
competition between public and private shipyards. The Secretary
of the Navy shall certify, prior to award of a contract under this
test, that the successful bid includes comparable estimates of all
direct and indirect costs for both public and private shipyards.
Competition under such test program shall not be subject to
section 502 of the Department of Defense Authorization Act, 1981,
as amended, or Office of Management and Budget Circular A-76: .
. . ."
The two submarines involved in this protest were among the vessels
designated by the Navy for participation in the test program.
On January 24, 1986, the Navy issued letters to NNS and the
Charleston Naval Shipyard (CNSY), 1/ a government-owned and -operated
field activity of NAVSEA, requesting proposals for the overhaul of SSBN
640, SSBN 643, or both ships, on a fixed-price, incentive basis with
50/50 sharelines and ceiling prices set at 130 percent of target cost.
Award was to be made to the responsible offeror submitting the lowest
target price for each ship. On February 26, 1986, NNS protested to our
Office, alleging various solicitation improprieties. NNS submitted a
proposal on the SSBN 640 overhaul by the March 6, 1986, closing date,
but submitted no proposal on the SSBN 643. CNSY submitted a proposal
for both overhauls. After determining that urgent and compelling
circumstances significantly affecting the interest of the United States
would not permit waiting for our decision on NNS's protest, the Navy
assigned both overhauls to CNSY.
JURISDICTION
The Navy asserts that our Office lacks jurisdiction to consider this
matter. According to the Navy, since the Competition in Contracting Act
of 1984 (CICA), 31 U.S.C. Sec. 3551(1) (Supp. II 1984), applies only to
the award of contracts, NNS cannot protest the Navy's assignment of work
to CNSY.
CICA defines a protest as:
"... a written objection by an interested party to a
solicitation by an executive agency for bids or proposals for a
proposed contract for the procurement of property or services or a
written objection by an interested party to a proposed award or
the award of such a contract." 31 U.S.C. Sec. 3551(1), as added
by section 2741 of the Competition in Contracting Act of 1984,
Pub. L. No. 98-369, title VII, 98 Stat. 1175, 1199.
The Navy, in effect, is arguing that by deciding to assign the overhaul
work to CNSY, there is no longer a "proposed award" and, therefore,
there is no statutory basis to consider the protest. However, we do not
interpret CICA so narrowly as to require that an award be proposed at
the time a protest is reviewed in order to be considered by our Office.
In issuing a solicitation, 2/ an agency proposes to award a contract
under the terms and conditions set forth in the solicitation and offers
are submitted on that basis. In our view, a "proposed award," within
the statutory definition, is contemplated under these circumstances and,
therefore, a timely protest of an agency's action concerning the
solicitation will be considered. See Contract Services Company, Inc.,
B-219430, Oct. 28, 1985, 65 Comp. Gen. , 85-2 C.P.D. P 472.
The Navy further argues that its final decision here involves no more
than the allocation of overhauls to the public and private sectors,
which is a matter of executive branch discretion not reviewable by GAO.
To support its contention, the Navy cites our previous decisions that,
generally, we do not review an agency decision concerning whether work
should be performed in-house or by a contractor, since we regard this to
be a matter of executive branch policy not within our bid protest
function. See, e.g, Crown Laundry and Dry Cleaners, Inc., B-194505,
July 18, 1979, 79-2 C.P.D. P 38.
We have considered as an exception to this rule an agency use of the
procurement system to aid in its decisionmaking, spelling out in a
solicitation the circumstances under which the government will or wiil
not award a contract. Joule Maintenance Corp., B-208684, Sept. 16,
1983, 83-2 C.P.D. P 333; Dynateria Inc., B-221089, Mar. 31, 1986, 86-1
C.P.D. P 302. Since the Navy used the procurement system in soliciting
an offer from NNS, we will review the Navy's compliance with applicable
procurement laws and regulations. 31 U.S.C. Sec. 3552, as added by
section 2741 of the Competition in Contracting Act of 1984, Pub. L. No.
98-369, title VII, 98 Stat. 1175, 1199. Our standard of review will
include 10 U.S.C. Sec. 2301, et seq., and the Federal Acquisition
Regulation (FAR) to the extent they do not conflict with the Navy's
broad procurement authority under Pub. L. No. 99-190. 3/ Cf. CoMont
Inc., B-219730, Nov. 14, 1985, 65 Comp. Gen. , 85-2 C.P.D. P 555.
(Though the Department of Housing and Urban Development has
extraordinary authority under the National Housing Act (NHA), we applied
FAR provisions in deciding a protest against a procurement conducted
under NHA absent a determination that regulatory procurement procedures
would impair or affect the carrying out of NHA programs.)
The Navy also argues that NNS did not submit an offer for the SSBN
643 overhaul and, therefore, is not an interested party to protest the
assignment of that overhaul. NNS contends that due to insufficient
available information and lack of clarification by the Navy, it had no
choice but to elect not to submit a proposal. An interested party is
defined in CICA, 31 U.S.C.A. Sec. 3551(2) (West Supp. 1985), as an
"actual or prospective bidder or offeror whose direct economic interest
would be affected by the award of the contract." This statutory
definition of an "interested party" is reflected in the language of our
Bid Protest Regulations, which implement CICA. 4 C.F.R. Sec.21.0(a)
(1985). Under CICA and our implementing Bid Protest Regulations, NNS's
interest as a potential competitor, if the protest is successful, is
sufficient for it to be considered an interested party. See Tumpane
Services Corporation, B-220465, Jan. 28, 1986, 86-1 C.P.D. P 95.
SCOPE OF WORK
NNS protests that the ambiguities and omissions in the statement of
work, specifically the General Clarification provision, preclude a
common basis of bidding. The General Clarification provision states
that:
"The contract target cost and target fee are based on, among
other things, costs incurred by the Contractor under recent
previous submarine overhaul contracts. In arriving at the target
cost and target fee, the parties have assumed that work to be
performed under this contract will be similar to work performed
under those recent previous contracts. It is recognized that some
work may be required to redeliver the ship in accordance with
applicable specifications which, because such work is "abnormal"
or "dissimilar" to work performed under the recent previous
contracts, it cannot be reasonably inferred that the contract
target cost and target fee include amounts for such work. Such
"abnormal" or "dissimilar" work is not included within the work
required to be performed under the specifications of this contract
and shall be performed only pursuant to separately priced
contractual modifications."
According to NNS, NNS and CNSY have experienced different types and
amounts of work on previous submarine overhauls, and there is no "normal
and similar" baseline based on their previous overhaul work. NNS
asserts that it and CNSY are basing their offers on different overhauls,
and there is no way that "normal and similar" can be interpreted to
assure that they are competing for the same scope of work.
The Navy responds that it provided both offerors with an identical
General Description of work, which directed the contractor, in
accordance with specifications, to prepare for and accomplish the
overhaul, refueling and subsequent testing of the reactor plant of the
vessel, and prepare for and accomplish the overhaul, alteration, repair
and subsequent testing of the vessel. The Navy notes that the first
specification cited is the Overhaul Work Package (OWP), a two-volume
document, six inches thick, containing over 300 line items. The Navy
also notes that there are about 50 specifications identified in the
statement of work.
Furthermore, contends the Navy, NNS has not identified any portion of
the OWP, which NNS helped definitize for SSBN 640 during performance of
an overhaul preparation contract, as being ambiguous or containing
omissions. The Navy argues that the General Clarification provision
which NNS cites in support of its ambiguity argument is not a statement
of work requirements but, rather, a general clarification of the work
specifically described in the rest of the statement of work,
specifications, and OWP. According to the Navy, the language simply
states one of the bases upon which the target price is based: costs
under recent previous submarine overhauls. The Navy asserts that the
language indicates the parties assume the work will be similar to work
performed on prior overhauls; to the extent it is not similar, the
contractor will receive a contract adjustment. To the extent that
offerors must calculate into their offers the risks of similar work, the
risk is proper, argues the Navy. The Navy notes that NNS helped draft
the language in 1981 and has agreed to such language in its seven most
recent SSBN overhaul contracts.
Regarding NNS's argument that some jobs are significantly different
from others, the Navy notes that about 85 percent of the work in the
SSBN 640 OWP is identical to the work in the OWP's for the five most
recent nuclear refueling overhauls for the SSBN 640 class completed by
NNS. The Navy also reports that 85 percent of the work in the OWP for a
recent submarine overhaul performed by CNSY is identical to the work in
a recent OWP for an overhaul performed by NNS.
NNS comments that although the OWP language may be identical for a
number of overhaul jobs, as applied to each job, the actual work scope
is different. Each overhaul job is unique, since the extent of repair
and the number of items needing repair or replacement have not been the
same on all overhauls. NNS further comments that the normal and similar
language significantly modifies the OWP and allows the Navy to demand
more work without the accountability or visibility offered when the work
scope is clearly defined. According to NNS, because the amount of work
required is significantly dependent upon the desires of cognizant Navy
personnel, and there is no assurance of uniformity of interpretation or
demand at different locales, a contract form that permits this use of
discretion does not provide a common basis for proposal submission.
Solicitations must be drafted to inform all offerors in clear and
unambiguous terms what is required of them so that they can compete on
an equal basis. Dynalectron Corp., B-198679, Aug. 11, 1981, 81-2 C.P.D.
P 115. Specifications should be free from ambiguity and should describe
the agency's minimum needs accurately. Klein-Seib Advertising and
Public Regulations, Inc., B-200399, Sept. 28, 1981, 81-2 C.P.D. P 251.
There is no legal requirement, however, that a competition be based on
specifications drafted in such detail as to eliminate completely any
risk for the contractor, or that the procuring agency remove every
uncertainty from the minds of every prospective offeror. Dynalectron
Corp., B-220518, Feb. 11, 1986, 65 Comp. Gen. , 86-1 C.P.D. P 151.
NNS has not met its burden of affirmatively proving that the
solicitation lacked sufficient ciarity to permit competition on an
intelligent and equal basis. See Crimson Enterprises, Inc., B-209918.2,
June 27, 1983, 83-2 C.P.D. P 24. NNS has not shown that there is any
information reasonably available to the Navy that offerors have not been
given. NNS has not cited any portion of the OWP as being ambiguous or
containing omissions other than language on particular line items such
as "repair or restore" or "inspect and repair, as necessary." NNS
comments that such language may affect the scope of the overhaul work
because the extent of repair and the number of items needing repair have
not been the same on all overhauls and cannot be determined until the
ship is at the yard and the individual components are disassembled.
NNS's objection to the General Clarification provision is similarly
phrased.
Here, there is no legal requirement that competition be based on
plans and specifications which state the work in detail so as to
completely eliminate the possibility that the successful contractor will
encounter conditions or be required to perform work other than that
specified. See Hero, Inc., B-213225, Dec. 14, 1983, 83-2 C.P.D. P 687.
We have stated that such perfection, while desirable, is manifestly
impracticable in some procurements. See 41 Comp. Gen. 484 at 488
(1962); Gibson & Cushman Dredging Corp., B-194902, Feb. 12, 1980, 80-1
C.P.D. P 122. (Protest that statement of work was not specific was
denied where Corps of Engineers was able to describe dredging services
required, but unable to identify precise dredging and disposal spots
until after performance was to begin.)
We agree with the Navy that the language of the General Clarification
provision indicates the parties assume the work will be similar to work
performed on prior submarine overhauls and, to the extent it is not
similar, the contractor will receive a contract adjustment. With regard
to NNS's contention that there is no assurance of uniformity of
interpretation of the General Clarification provision by Navy personnel,
we have previously held that to the extent that there are uncertainties
as to exactly what government officers will require, offerors can take
these uncertainties into account in computing their offers. See
Industrial Maintenance Services, Inc., B-207949, Sept. 29, 1982, 82-2
C.P.D. P 296. NNS would be protected from arbitrary determinations by
the contracting officer by the standard disputes clause incorporated in
the solicitation. See Richard M. Walsh Associates, Inc., B-216730, May
31, 1985, 85-1 C.P.D. P 621.
STATUTORY CERTIFICATION REQUIREMENT
NNS contends that the Secretary of the Navy has not complied with the
requirement in the DOD Appropriations Act for fiscal year 1986, Pub. L.
99-190, that "The Secretary of the Navy shall certify, prior to award of
a contract under this test, that the successful bid includes comparable
estimates of all direct and indirect costs for both public and private
shipyards." NNS alleges that the Secretary's March 19, 1986, letter to
the Chairman of the Senate Subcommittee on Defense, Committee on
Appropriations, does not comply with the statutory certification
requirement because: (1) at no point does the letter purport on its
face to be a certification; (2) the preestablished criteria mentioned
in the letter have not been divulged; and (3) the Secretary merely
states that he finds the "proposals to be comparable between the private
and public shipyards" and has not certified that the successful bid
"includes comparable estimates of all direct and indirect costs."
On March 19, 1986, the Secretary of the Navy wrote to the Chairmen of
the congressional Committees on Appropriations, Subcommittees on
Defense, stating, in pertinent part, that:
"The FY 86 Department of Defense Appropriations Act
appropriated funds for a test program to acquire the overhaul of
four or more vessels by competition between private and public
shipyards. The law further stipulated that I must certify, prior
to award of a contract under this test, that the successful bid
includes comparable estimates of all direct and indirect costs for
both public and private shipyards.
Proposals from a total of two offerors were received for the
refueling overhaul of the USS BENJAMIN FRANKLIN (SSBN 640).
Charleston Naval Shipyard, Charleston, South Carolina submitted
the low overall bid for the SSBN 640, and is the successful
offeror. Charleston Naval Shipyard is the only offeror for the
USS GEORGE BANCROFT (SSBN 643). We have analyzed the price
proposals for both ships sin accordance with preestablished
criteria, and found the proposals to be comparable between the
private and public shipyards.
Based on this comparability finding, and overall low costs, we
will assign both ships to Charleston Naval Shipyard."
Contrary to NNS's view, we think the letter complies in form with the
statutory certification requirement. 4/
NNS also protests the Navy's solicitation of offers on a fixed-price,
incentive basis, alleging that it precludes a true, fair and meaningful
competition between public and private shipyards. According to NNS, the
fixed-price, incentive concept of a ceiling price is meaningless to a
public shipyard because the public shipyard is under no contractually
enforceable risk. NNS contends that the sole evaluation criterion of
lowest target price is inconsistent with tne congressional mandate
authorizing this procurement and with accepted procurement principles.
NNS, assuming CNSY's proposal was submitted on a cost-reimbursement
basis, argues that the Navy must not only evaluate target price but must
perform a cost realism analysis. Furthermore, argues NNS, it is
difficult to envision how the Secretary of the Navy, without the conduct
of a cost realism study, can properly certify that NNS's and CNSY's
proposals include comparable estimates of all direct and indirect costs.
The Navy contends that there are safeguards against CNSY's alleged
freedom to propose an unrealistically low target cost and target price.
CNSY's proposed target price is constrained by direction from the Navy
as to what costs it must propose, in order to permit the Secretary's
comparable cost certification. CNSY's proposed price is also
constrained because CNSY will not be reimbursed from Operations and
Maintenance, Navy (O&M,N) funds for more than the ceiling price. Costs
above the ceiling price will come from CNSY's Accumulated Operating
Results (AOR) in its Navy Industrial Funds (NIFs) account. 5/ Thus, the
0&M,N funds provided by Congress for the overhauls will not be charged
costs above the ceiling price in the event of an overrun, regardless of
whether a public or private shipyard performs the work.
NNS comments that the latter safeguard is just an accounting practice
and that taxpayer money will still be used to fund cost overruns. We
agree. While we have no doubt that CNSY made a conscientious effort to
formulate a realistic estimate, the fact remains that the government
will pay for any cost-overruns by CNSY from public funds, be they O&M,N
or AOR. In contrast, NNS will absorb any overruns from NNS' own
corporate funds. The CNSY reimbursement arrangement is more closely
analogous to a cost reimbursement type contract than the fixed price
contract NNS was bound to perform, in which the government is legally
obligated to pay the private contractor no more than the ceiling price.
Absent any more effective constraint than the possible AOR deficit, we
believe that the Navy should have conducted some type of cost realism
analysis of CNSY's proposal.
In view of the above, we do not believe the estimate that formed the
basis for the Secretary's certification was properly reviewed or
verified. The Secretary is required to certify that the successful bid
includes comparable estimates of all direct and indirect costs for both
public and private shipyards. In the case of SSBN 640, where there were
offers from both a private and public shipyard, the individual elements
of the bid estimates prepared by CNSY were not reviewed to ascertain
whether they were reasonable. An audit firm reviewed CNSY's bid
estimate to ascertain how it was prepared and what elements it
contained. This audit made no judgment or review of the reasonableness
or quantum of these elements.
Although no formal review under OMB Circular No. A-76 was required,
it is our view that Public Law 99-190 envisions more than an unverified
bid estimate by the public shipyard, in view of the nature of this
public-private competition. That is, we do not believe the estimate for
the public shipyard can be deemed comparable under Public Law 99-190
unless its elements are reviewed as to reasonableness to determine if
they are in line with independent government estimates. A certification
by the Navy without a proper verification that the elements of the
public shipyard's estimate are reasonable would render the purpose of
this certification meaningless.
OTHER ISSUES
In commenting on the agency report, NNS raises two new protest
issues: that CNSY "bought in" to this procurement because its price was
between 20 and 40 percent below the lowest total cost on any previous
SSBN overhaul by CNSY, and that the Navy's determination to award in the
face of this protest because of urgent and compelling circumstances is
an abuse of discretion.
Protest arguments not raised in a protester's initial submission must
independently satisfy the timeliness requirements of our Bid Protest
Regulations, 4 C.F.R. part 21 (1985). Where the protester supplements
its original timely protest with new grounds of protest in its response
to the agency report more than 10 working days after the basis for the
new arguments should have been known, the new grounds are untimely. See
Consolidated Group, B-220050, Jan. 9, 1986, 86-1 C.P.D. P 21. The Navy
notified NNS on March 21, 1986, of its determination in the face of the
protest to assign the overhauls to CNSY for a target price of
$224,166,288. Since we received NNS's comments on April 11, 1986, the
new grounds are clearly untimely and will not be considered. 4 C.F.R.
Sec. 21.2(a)(2).
NNS objects to the Navy's failure to provide NNS with copies of all
documents which the Navy has relied upon in its responses to GAO and
asks GAO to supply NNS with copies of the entire record that we will
consider. However, the authority to determine what documents should be
released to a protester is vested in the contracting agencies, not this
Office. See 31 U.S.C.A. Sec. 3553 (f) (West Supp. 1985). 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. S&Q Corp., B-219420, Oct. 28, 1985, 85-2 C.P.D. P 471.
CONCLUSION
The protest is denied in part and sustained in part. In view of the
urgent need for the overhaul work involved, we do not recommend that
performance of work on the SSBN 640 be disturbed.
We will not grant NNS's request for proposal preparation costs. The
award of proposal preparation costs is only justified where the
protester shows both that the government's conduct towards the protester
was arbitrary and capricious, as opposed to merely negligent, and that,
if the government had acted properly, the protester would have had a
substantial chance of receiving the award. I.E. Levick and Associates,
B-218294.2, Apr. 12, 1985, 85-1 C.P.D. P 424. The record does not show
that, if the Navy had performed a cost realism analysis, NNS would have
had a substantial chance of receiving the award. Accordingly, we deny
the claim for proposal preparation costs.
However, since the protest had merit in part, we recommend that NNS
be allowed to recover its costs for filing and pursuing this protest,
including attorney's fees. See 4 C.F.R. Sec. 21.6(a). NNS should
submit its claim for such costs directly to the Navy.
Comptroller General
of the United States
FOOTNOTES
1/ According to the Navy, NNS is the only nuclear-qualified private
shipyard currently capable of performing complex refueling overhauls of
SSBN submarines, which are nuclear powered and carry ballistic missiles;
CNSY is the only naval shipyard with the capability to perform the
overhauls commencing in fiscal year 1986.
2/ We regard the Navy's letters dated January 24, 1986, to NNS and
CNSY, requesting fixed-price proposals for the overhaul of SSBN 640,
SSBN 643 or both ships and attaching pro forma overhaul contracts, as a
solicitation. We note that the Navy's February 7, 1986, letters to NNS
and CNSY, attaching certain documents to be reviewed and completed as
part of their offers, instructed NNS and CNSY that the pro forma
contracts and the February 7 enclosures should be read as a whole and
interpreted as an RFP for purposes of preparing a proposal.
3/ We note that the Navy advised offerors that the competition was
being conducted under Public L. No. 99-190 title II, using as guideiines
basic underlying procurement principles, including those that may be
reflected in the FAR.
4/ As discussed below, we do not conclude the facts reasonably
supported the certification in the case of SSBN 640.
5/ Work is ordinarily assigned to a public shipyard by a project
order. The NIFs provide the operating capital, which is expended by the
shipyard in performing the work and is reimbursed by the ordering
activity up to the fixed price. If the naval shipyard performs the work
at less than the fixed price, the difference is added by the shipyard to
its AOR. If the naval shipyard performs the work at more than the fixed
price, the difference is taken from the shipyard's AOR. The AOR
operates much like a private company's retained earnings, the net amount
of the business' overruns and underruns on all work.
Matter of: Arthur Young & Company--Reconsideration
File: B-221879.2
Date: July 11, 1986
DIGEST
Request for reconsideration is dismissed as academic where the basis
for the reconsideration request is the existence of an allegedly
improper subsequent procurement which is inconsistent with our prior
decision and where the subsequent procurement action is canceled by the
agency.
DECISION
Arthur Young & Company (AYC) requests reconsideration of our decison,
Arthur Young & Company, B-221875, June 9, 1986, 86-1 CPD P . In that
decision, we denied AYC's protest which contested the sole-source award
by the Department of the Navy of letter contract, No. N00600-86-C-3072,
to Coopers & Lybrand (CL) to partially implement operational
improvements at various Naval Industrial Fund (NIF) activities based on
recommendations devloped by CL under a previous management analysis
contract.
We upheld the sole-source award because we found that the Navy, where
compelled to do so by urgent circumstances, had the authority to limit
the procurement to the only firm it reasonably believed could promptly
and properly perform the work. Specifically, we found that the Navy
reasonably determined that only CL had the immediate knowledge and
experience to perform the work on time. We also stated, however, that
we expected the "Navy, as it has represented to our Office, to continue
to limit the sole-source portion of the total implementation effort to
its immediate urgent needs." The sole-source portion of the
implementation effort, as represented by the Navy to our Office,
included shipyards, public work centers, and naval air rework
facilities, but did not include ordnance stations.
AYC's sole basis for reconsideration is a synopsis which appeared in
the June 6, 1986 edition of the Commerce Business Daily stating that an
agency of the Navy intended to award a sole-source contract to CL for
implementation of operational improvements at certain ordnance
activities. AYC argues that this proposed contract action is
inconsistent with the Navy's report to our Office that was filed during
our consideration of the prior protest. AYC further states that the
proposed procurement was probably initiated by personnel who were
unfamiliar with AYC's prior protest end our decision on that protest.
We have been advised that the proposed contract action that forms the
basis of this reconsideration request has been canceled. Accordingly,
AYC's reconsideration request is dismissed as academic.
Ronald Berger
Deputy Associate
General Counsel
Matter of: Restorations Unlimited, Inc; Wade Associates;
Furniture Craftsman, Inc. --Reconsideration
File: B-221862.2
Date: July 11, 1986
DIGEST
1. Prior decision is affirmed on reconsideration where protesters
have not shown that it contains any error of fact or law.
2. Reasonable basis exists to cancel an RFP for chairs for historic
site where, subsequent to the issuance of the RFP, a private
organization offers to donate the chairs to the government.
3. Request for a conference in connection with a request for
reconsideration is denied since the matter can be promptly resolved
without a conference.
DECISION
The joint venture of Restorations Unlimited, Inc., and Wade
Associates, and Furniture Craftsman, Inc. (protesters), requests that we
reconsider our decision in Restorations Unlimited, Inc.; Wade
Associates; furniture Craftsman, Inc., B-221862, May 28, 1986, 86-1
C.P.D. P 493. In that decision, we denied the protest against the
cancellation of request for proposals (RFP) No. 3-5-93 issued by the
Department of the Interior, National Park Service (Interior), for the
procurement of 760 theatre chairs for the Ford's Theatre National
Historic Site (Theatre) in Washington, D.C. We also denied the
protesters' claim for costs. We affirm our prior decision.
The RFP for the design and fabrication of 760 replica chairs of the
original theatre chairs was issued on May 31, 1985. Four proposals were
received. After the Executive Producer of the Ford's Theatre Society
(Society) 1/, a member of the technical evaluation committee, viewed the
prototypes of the chairs being offered, the Society notified
Interior that it would like to donate the chairs to the Theatre,
thereby eliminating the need for Interior to use appropriated funds to
purchase the chairs. The Society then developed a plan to raise money
for the purchase of the new chairs by selling the old chairs (valued at
$20 each) for $500 each. Since Interior no longer needed to purchase
the chairs under the RFP, the solicitaticn was canceled. Subsequently,
with money raised from the sale of the old chairs, the Society purchased
the new chairs from one of the offerors under the RFP, Joseph's
Refinishing, and donated them to the government.
In our earlier decision, we stated that since Interior decided to
cancel the RFP after the Society offered to donate the chairs to the
Theatre, Interior had a legitimate basis for canceling the RFP due to
the potentially great cost savings. See Business Communications
Systems, Inc. B-218619, July 28, 1985, 85-2 C.P.D. P 103. In addition,
we denied the protesters' argument that Interior may have violated the
laws and regulations which govern the disposal of surplus government
property by transferring the old theatre chairs to the Society for the
Society's sale because Interior was authorized by the General Services
Administration (GSA), pursuant to GSA's jurisdiction under 40 U.S.C.
Sec. 484 (1982) over the disposal of government surplus prcperty, to
dispose of the old chairs in the manner in which it did. Finally, we
found that the protesters were not entitled to their proposal
preparation or bid protest costs because there was no showing that the
government acted in bad faith in issuing the RFP. See Computer Resource
Technology Corp., B-218282.2, July 2, 1985, 85-2 C.P.D.P 14.
In their request for reconsideration, the protesters contend that on
the date the RFP was canceled, October 31, 1985, there was not a
reasonable basis to cancel the RFP because it was not until 3 months
later that Interior received permission from GSA to use the old theatre
chairs to help the Society raise the funds to pay for the new chairs.
Although the record shows that Interior did not receive permission to
dispose of the old chairs through the Society until approximately 3
months after the RFP was canceled, the protesters still have not shown
that Interior lacked a reasonable basis to cancel the solicitation.
Interior canceled the solicitation because the Society agreed to donate
new chairs. As we said before, the potential for such a cost savings is
a reasonable basis on which to cancel an RFP. Business Communications
Systems, Inc., B-218619, supra. The fact that technical details for the
cost savings by way of the donation of the chairs were worked out after
the cancellation of the RFP does not make the cancellation itself
improper. As is evidenced here, all the necessary details were worked
cut, the Society donated the chairs to Interior, and Interior realized a
substantial cost savings. In the circumstances, we conclude that
Interior did have a reasonable basis to cancel the RFP.
The protesters have requested a conference to discuss the issues
raised above. We will not conduct a conference on a reconsideration
request, however, unless the matter cannot otherwise be resolved
expeditiously. Global Associates--Reconsideration, B-212820. 2, Aug.
21, 1984, 84-2 C.P.D. P 203. We do not think a conference is warranted
in this case.
Since the protesters have not shown that our prior decision was based
on any error of fact or law, it is affirmed. Comptroller General of the
United States
FOOTNOTES
1/ The Ford's Theatre Society is a nonprofit, tax-exempt group, set
up by agreement with Interior to assist in the management of the Theatre
and its booking.
FILE: B-221751 DATE: July 11, 1986
MATTER OF: Michael F. Locke
DIGEST:
1. Agency properly exercised its discretion in denying request
to extend temporary quarters subsistence expense eligibility for
an additional 60-day period where the employee's need for further
occupancy of temporary quarters was due to his inability to sell
his former residence in a depressed housing market. Agency
regulations provide that a poor housing market and inability to
sell a former residence generally are not considered compelling
reasons which justify granting an extension. Moreover, the
Federal Travel Regulations provide that an extension may be
granted only when the need for additional time in temporary
quarters is due to circumstances which have occurred during the
initial 60-day period of temporary quarters occupancy.
2. Members of an employee's immediate family joined him at his
new duty station for varying periods after which they returned to
and remained for a substantial period in the family's residence at
the old duty station. Because they had not vacated their
residence at the old duty station and because their travel was for
visitation rather than to relocate to the new duty station, the
employee is not entitled to reimbursement for their travel
expenses or to temporary quarters subsistence expenses for their
stay at the new duty station.
This action is in response to a request for a decision concerning the
temporary quarters subsistence expense entitlement of Michael F. Locke.
1/ The Department of Agriculture asks whether Mr. Locke should have been
reimbursed for temporary quarters subsistence expenses for his
dependents during periods they joined him in temporary quarters at his
new duty station and whether the agency erred in denying Mr. Locke's
request to extend his eligibility for reimbursement of temporary
quarters subsistence expenses for an additional 60-day period. It is
our view that Mr. Locke should not have been reimbursed for temporary
quarters subsistence or travel expenses for his wife and children since
their travel to and stay at the new duty station took place prior to the
date on which they vacated their residence at the old duty station. We
find, in addition, that the agency acted within its discretion in
denying temporary quarters subsistence expense reimbursement for an
additional 60-day period.
Background
Michael F. Locke, an employee of the Office of the Inspector General,
U. S. Department of Agriculture, was transferred to Hyattsville,
Maryland, in January 1985. He was authorized travel and transportation
expenses for himself and his dependents as well as a temporary quarters
subsistence expenses allowance. Mr. and Mrs. Locke arrived in College
Park, Maryland, on January 22, 1985. Their children, who continued to
reside in the family's Florida residence, traveled to the new duty
station on February 16, 1985, and returned to the Florida residence on
February 26, 1985. On March 16, 1985, Mrs. Locke returned to the
family's residence in Florida and remained there until August 1985, when
all of Mr. Locke's dependents relocated to Maryland, Throughout this
period and until October 2, 1985, when the family moved into its new
home in Maryland, Mr. Locke remained in temporary quarters at his new
duty station. Mr. Locke has been reimbursed for his wife's travel to
Maryland in January and for his children's travel to Maryland in
February, as well as temporary quarters subsistence expenses for the
period each stayed with him following that travel. He has also been
reimbursed temporary quarters subsistence expenses for the 60-day period
that he occupied temporary quarters.
On March 11, Mr. Locke submitted a memorandum to his agency
explaining that he had been unable to sell his Florida residence and
requesting that his temporary quarters subsistence eligibility be
extended for an additional 60-day period. The agency denied his request
based on its regulations which specify that an employee's inability to
sell his former residence does not justify granting an extension of the
period for which a temporary quarters subsistence expenses allowance may
be paid. A certifying officer of the Department of Agriculture has
presented several questions regarding whether Mr. Locke should have been
paid for temporary quarters subsistence or travel expenses for his
dependents under these circumstances and whether his request for an
additional 60 days temporary quarters subsistence expenses allowance was
properly denied by the agency. Reimbursements Mr. Locke has received in
connection with his own occupancy of temporary quarters are not in
issue.
Temporary Quarters Allowance
Sections 5724 and 5724a of title 5, United States Code, authorize
reimbursement of certain relocation expenses incurred by employees who
have been transferred in the interest of the government. Those expenses
include an allowance for temporary quarters subsistence expenses
incurred by the transferred employee and members of his immediate
family. 5 U.S.C. Sec. 5724a(a) (3). That allowance is payable in
accordance with implementing regulations set forth in the Federal Travel
Regulations (FTR), Chapter 2, Part 5 (Supp. 10, March 13, 1983), incorp.
by ref., 41 C.F.R. Sec. 101-7.003.
Vacating the Old Residence
Under 5 U.S.C. Sec. 5724a(a) (3) an agency may pay "subsistence
expenses of the employee and and his immediate family for a period of 60
days while occupying temporary quarters when the new official station is
located within the United States." 5 U.S.C. Sec. 5724a(a)(3) (Supp. 1,
1983). As described in the implementing regulations the term "temporary
quarters" refers to lodging obtained for the purpose of temporary
occupancy after vacating the residence occupied when the transfer was
authorized. FTR, para. 2-5.2( c) (Supp. 10, March 13, 1983).
There is no definition of the word "vacate" in the travel
regulations. However, we generally consider a residence to have been
vacated by an employee or a member of his immediate family when the
employee or the particular family member whose entitlement is in
question ceases to occupy it for the purposes intended. In determining
whether the family member has ceased to occupy a residence at his former
duty station, we examine the action taken by an employee and his family
before and after the departure from that residence. The focus of our
inquiry generally has been whether, in light of all the facts and
circumstances, there is objective evidence of intent to vacate the
former residence. Mere statements of an employee's professed intent are
not sufficient by themselves to establish entitlement to a temporary
quarters allowance. Luther S. Clemmer, B-199347, February 18, 1981.
In John M. Mankat, B-195866, April 2, 1980, we denied reimbursement
for temporary quarters for an employee's family since they returned to
the old duty station after 1 week at the new duty station in order to
prevent vandalism at the former residence. In that case, the residence
at the old duty station was left fully furnished and the family was
unsure of when it would be sold or when they could move into a new
residence at the new duty station. In John O. Randall, B-206169, June
16, 1982, an employee's family joined him at the new duty station
several months after he transferred, remained approximately 1 month and
returned to their fully furnished residence at the former duty station.
In George L. Daves, B-215408, February 26, 1986, 65 Comp. Gen. 1986),
the employee's family joined him at the new duty station several months
after he reported for duty, remained for 26 days, and then returned to
their residence at the old duty station. In these cases we found a lack
of intent on the part of family members to vacate the former residence.
Since the dependents had not vacated the former residence, we held that
temporary quarters subsistence expenses were not payable during their
visits to the new duty station.
In the present case, Mr. Locke and his wife traveled to the new duty
station while their children remained in their fully furnished residence
at the old duty station. A month later, the children traveled to the
new duty station for a 10-day visit and returned to the residence at the
old duty station. Shortly thereafter, the employee's wife returned to
the residence at the old duty station. Mrs. Locke and the children
remained in the Florida residence until August 21, 1985, when she moved
permanently to Maryland. The employee returned to Florida on August 23
to oversee shipment of the household goods and returned to Maryland on
August 29, 1985, with the children. The entire family remained in
temporary quarters until October 2, 1985. It is our view that the
record does not provide the objective evidence necessary to support an
inference of intent on the part of Mrs. Locke or the children to vacate
the old residence prior to August 1985. Therefore, Mr. Locke should not
have been reimbursed for temporary quarters subsistence expenses
incurred by Mrs. Locke and the children between January and March 1985.
In addition, because they were incurred for the purpose of visitation
rather than to accomplish the permanent change of station, the travel
expenses incurred by Mr. Locke's dependents in January and February 1985
may not be reimbursed. See George L. Daves, B-215408, supra.
Additional Temporary Quarters Allowances
Under FTR, para. 2-5.2a (1), a transferred employee may be authorized
temporary quarterss expenses for a period of up to 60 days.
Subparagraph 2-5.2a (2) provides that the agency may authorize payment
of temporary quarters subsistence expenses for an additional period of
up to 60 days if the head of the agency determines that there are
compelling reasons for the continued occupancy of temporary quarters and
when there is a demonstrated need for the continued occupancy of
temporary quarters due to circumstances beyond the employee's control
which have occurred during the initial 60-day period. Examples of
compelling reasons provided in the FTR include delay of delivery of
household goods due to strikes, weather and acts of God, inability to
occupy a new residence due to unanticipated problems such as delays in
settlement of new residence or sudden illness or death of the employee
or his family.
For employees of the Department of Agriculture the FTR is further
implemented by Agriculture Travel Regulation DM 2300-1. As amended
December 14, 1984, paragraph 2-5.2a (2) of that regulation provides that
"generally * * * inability, for whatever reason, to sell a residence,
does not by itself justify this extension." It provides in addition that
a "poor housing market" is not considered a compelling reason which will
support the granting of an extension.
The determination to extend the period for occupancy of temporary
quarters is a matter committed by statute to the discretion of the
agency concerned. Specifically, 5 U.S.C. Sec. 5724a(a) (3) provides:
"* * * The period of residence in temporary quarters may be
extended for an additional 60 days if the head of the agency
concerned or his designee determines that there are compelling
reasons for the occupancy of temporary quarters.* * *"
That discretion is required to be exercised in accordance with the
Federal Travel Regulations which impose requirements that the need for
additional time in temporary quarters be due to circumstances beyond the
employee's control which are acceptable to the agency and which have
occurred during the initial 60-day period in temporary quarters. As a
practical matter, this limits an agency's authority to grant an
extension where circumstances existing at the time of transfer, such as
a poor housing market sor high interest rates, affect the employee's
ability to sell his residence at the old duty station.
The fact that an employee has not sold his former residence within
the initial 60-day period may not, in itself, be considered the
circumstance which gives rise to the need for an additional period of
temporary quarters occupancy. That fact may be attributable to a
variety of circumstances, some within the employee's control, such as an
inflated listing price, and some existing prior to the employee's
transfer, such as high interest rates. However, there are particular
circumstances which may arise during the initial period of temporary
quarters occupancy which may affect the employee's ability to sell his
former residence and which would, in our opinion, justify the granting
of an extension. These circumstances may include anything from natural
disasters affecting the physical condition of the property to legal
action affecting the marketability of title to the property.
There is an ambiguity in the Department of Agriculture's regulations
which states that an employee's inability to sell his residence "for
whatever reason" cannot justify the granting of an extension, but
prefaces that seemingly flat prohibition with the word "generally." For
this reason we do not view the Agriculture Department's regulation as
prohibiting the granting of an extension in every case where the need to
occupy temporary quarters for longer than 60 days is due to the
employee's inability to sell his former residence. The Department of
Agriculture has discretion to consider the reasons for the employee's
inability to sell the residence and to grant an extension where the
inability is due to circumstances beyond his control which have occurred
during the initial 60-day period.
In Mr. Locke's case, his request for an extension was supported by
his explanation that he had been unable to sell his former residence due
to a depressed real estate market. Since he has not provided any
information which would indicate that his inability to sell his former
residence was due to circumstances other than a poor housing market
which arose during the first 60 days he occupied temporary quarters, we
find that the agency acted in accordance with applicable regulations in
denying his request for an extension.
Conclusion
In accordance with the discussion above, we find that the Department
of Agriculture acted properly in denying Mr. Locke's request to extend
his eligibility for temporary quarters subsistence expenses. We find,
in addition, that he has been improperly reimbursed temporary quarters
subsistence and travel expenses for periods that his wife and children
visited him at his new duty station prior to the time they vacated their
residence at the old duty station.
Comptroller General
of the United States
FOOTNOTES
1/ The request was made by W. D. Moorman, Authorized Certifying
Officer, National Finance Center, Office of Finance and Management, U.
S. Department of Agriculture, New Orleans, Louisiana.
FILE: B-221749 DATE: July 28, 1986
MATTER OF: Ronald V. Bell, et al. - Retroactive Pay for Hazardous
Duty
DIGEST:
General Schedule employees were performing duties which were
subsequently determined to be compensable under the hazardous duty
differential provided for in 5 U.S.C. Sec. 5545(d) (1982), and
filed claims with the employing agency for retroactive payment of
the differential. Agency requested an advance decision as to the
propriety of making retroactive payment of the hazardous duty
differential. Held, where General Schedule employees engage in a
duty which is subsequently determined by the employing agency as a
hazardous duty, and there is an adequate record of the days and
hours during which the duty was performed, payment therefor may be
granted retroactively.
The issue in this decision is whether General Schedule employees may
receive hazard pay differential retroactively for the period of time
preceding the agency determination of their entitlement thereto. For
the reasons stated below, we hold that the employees in question are
entitled to retroactive hazard pay differential for the period in
question.
BACKGROUND
In June 1985, the Defense Logistics Agency (DLA) concluded a study
whereby it was determined that Quality Assurance Representatives of that
agency were entitled to pay differential under 5 C.F.R. Part 550,
Appendix A, for duties involving exposure to hazardous weather or
terrain, specifically moving from one ship to another at sea by means of
a Jacob's ladder under adverse weather conditions, at night, or when the
seas are high. The DLA field organizations were informed of the study's
conclusions and were directed to institute a practicable method for
paying the hazard pay differential. A number of employees submitted
claims for the pay differential for the period prior to DLA's
determination of their entitlement. For example, four employees have
submitted claims for specific days between November 1984 and May 1985
which met the conditions for the pay differential. By letter dated
January 13, 1986, Roberta K. Peters, Deputy Staff Director, Civilian
Personnel, Defense Logistics Agency, requested an advance decision from
this Office as to the propriety of making the retroactive payments,
having been informally advised by the Office of Personnel Management
that retroactive payments as described above could not be made absent a
Comptroller General decision on the matter. This is in response to that
request.
DISCUSSION
Section 5545(d) of Title 5, United States Code (1982), provides that
an employee engaging in intermittent or irregular duties which involve
unusual physical hardship or hazard, shall receive a pay differential in
addition to the employee's rate of basic pay. Sections 550.901 to
550.907 of Title 5, Code of Federal Regulations (1986), implement the
statute and provide for a 25 percent differential for employees exposed
to hazardous weather or terrain. As noted above, the DLA determined
that its Quality Assurance Representatives were within the coverage of
the above cited provisions. Entitlement to the differential is
therefore not at issue.
The only question at issue is whether the differential can be paid
retroactively to those employees who were engaged in the hazardous duty
prior to DLA's finding that they were covered by the differential. It
should be noted as well that there appears to be no inadequacy in the
records with respect to documentation of the time during which, and the
places at which the hazardous duty was performed.
We have held previously, in the case of prevailing rate employees,
that where it was determined that they were entitled to environmental
differential pay (the equivalent of hazardous duty differential), such
entitlement was retroactive to the date of enactment of the regulations
implementing the differential. See B-180206, July 16, 1974; B-170182,
December 26, 1973; B-163901, May 2, 1973. We have also held that in
cases where it is known that over a period of time employees have
performed duty for which they are entitled to additional pay and doubt
exists only as to the particular days or hours on which the qualifying
work was performed, payment therefor may be made based upon the most
reasonable estimate after consideration of all available records. See
53 Comp. Gen. 789, 793 (1974), and B-184797, September 16, 1976.
In the case at hand, there is nothing which would lead us to
distinguish between the treatment afforded prevailing rate employees as
opposed to General Schedule employees. Moreover, there appears from the
record before us no question as to the adequacy of the documentation
regarding the days or hours during which the hazardous duty was engaged
in. We, therefore, hold that where these General Schedule employees
engaged in a duty which is subsequently determined by the DLA to be a
hazardous duty as defined in 5 C.F.R. Part 550.901 et seq., and there is
an adequate record of the days and hours during which the duty was
engaged in, the employees are entitled to payment for the hazardous duty
retroactively.
Comptroller General
of the United States
Matter of: Transferred Service Members-- Temporary Lodging Expenses
File: B-221732
Date: April 10, 1987
DIGEST
A statute enacted in 1981 provides that a member of the uniformed
services who is ordered to make a permanent changeof-station move may be
allowed up to "four days" of expenses "incurred by the member and the
member's dependents" while occupying temporary quarters. A proposal may
be approved for the issuance of new regulations under that statute which
would authorize service members up to 4 calendar days of temporary
lodging expense allowances for themselves, and up to 4 separate days of
allowances on behalf of their dependents, subject to a maximum limit on
reimbursement of $440.
DECISION
The question presented is whether a proposal to allow service members
up to 4 calendar days of temporary lodging expense allowances for
themselves, and up to 4 additional calendar days of temporary lodging
expense allowances on behalf of their dependents, is permissible under
the authority of the statute which provides that service members ordered
to make a permanent change-of-station move may be allowed up to "fours
days" of subsistence expenses "incurred by the member and the member's
dependents" while occupying temporary quarters. 1/ We conclude that the
statute may be implemented in the manner proposed.
BACKGROUND
Section 404a of title 37, United States Code, provides that:
"(a) Under regulations prescribed by the Secretaries concerned,
a member of a uniformed service who is ordered to make a change of
permanent station--
"(1) from any duty station to a duty station in the United
States (other than Hawaii or Alaska); or
"(2) from a duty station in the United States (other than
Hawaii or Alaska) to a duty station outside the United States or
in Hawaii or Alaska;
"may be paid or reimbursed for subsistence expenses actually
incurred by the member and the member's dependents while occupying
temporary quarters incident to that change of permanent station.
In the case of a change of permanent station described in clause
(1) of this subsection, the period for which such expenses may be
paid or reimbursed may not exceed four days. In the case of a
change of permanent station described in clause (2) of this
subsection, the period for which such expenses may be paid or
reimbursed may not exceed two days and such payment or
reimbursement may be provided only for expenses incurred before
leaving the United States (other than Hawaii or Alaska).
* * * * *
"(c) A member may not be paid or reimbursed more than $110 a
day under this section."
Implementing regulations adopted through action of the Per Diem,
Travel and Transportation Allowance Committee are currently contained in
Part H of Chapter 5, Volume 1 of the Joint Federal Travel Regulations
(JFTR, para. U5700-U5710). Concerning the number of days a service
member may be paid the temporary lodging expense allowance, the
regulations authorize payment for up to 4 days for a permanent
change-ofstation move from any duty station to a duty station in the
United States, other than Hawaii or Alaska. 1 JTR, para. M4601. If
the permanent change of station is from a duty station in the United
States (other than Hawaii or Alaska) to a duty station outside the
United States or in Hawaii or Alaska, the temporary lodging expense
allowance is only authorized for up to 2 days. JFTR, para. U5705. The
regulations further provide:
"* * * A member may not be paid or reimbursed more than a
combined total of $110 per day under this Part for temporary
lodging expenses TLE incurred by the member and/or dependents.
The period of time allowed (two or four days) will begin for the
member and all dependents when either the member or any dependent
begins use of temporary quarters for which TLE is claimed. The
time period will run concurrently for the member and all
dependents. The member may occupy temporary lodgings at one
location while the dependents occupy temporary lodgings at another
location, however, the temporary lodgings must be occupied on the
same days. For example if the member claims TLE for temporary
lodgings occupied for four days from 1 to 4 November at one
location, there is no entitlement to TLE for the dependents at
another location unless the dependents occupied temporary lodgings
on any day(s) from 1 through 4 November. If the member and
dependents occupy temporary lodgings on different days, the member
may elect the days for which TLE is claimed." JFTR, para. U5710.
Thus, under the current regulations, service members are allowed a
maximum of up to 4 days' payment of the temporary quarters expense
allowance. The days for which the allowance is claimed need not be
consecutive, but each day's payment covers the concurrent expenses of
the member and all dependents. Although service members may occupy
temporary lodgings at one location while one or more of their dependents
occupy temporary lodgings at another location, the temporary lodgings
must be occupied on the same calendar day or days in order for service
members to be eligible for reimbursement of both their own expenses and
the expenses of their dependents.
The Chairman of the Per Diem, Travel and Transportation Allowance
Committee indicates that a proposal has been advanced that the
regulations be changed, and the Chairman requests our decision on the
question of whether the statutory provisions of 37 U.S.C. Sec. 404a are
broad enough to permit the regulations to be changed to authorize
service members reimbursement of up to $110 per day for temporary
lodging expenses incurred by them and by their dependents when the
member and a dependent occupy temporary lodgings on different calendar
days. The Chairman indicates that the change contemplated by this
proposal would authorize reimbursement for the combined temporary
lodging expenses, not to exceed a total of $110 per day, incurred by a
service member on the first day (assume calendar day November 1) the
member personally occupied temporary lodgings, and by a dependent on the
first day (assume calendar day November 20) that particular dependent
occupied such lodgings. Reimbursement for each additional day would be
allowed in the same manner.
As we understand the proposal, it would authorize reimbursement of
expenses up to a total amount of $440 when service members and their
dependents occupy temporary quarters during different 4-day intervals.
A hypothetical case based on the Chairman's description could apparently
involve these circumstances:
1st Day 2d Day 3d Day 4th Day
Expenses Expenses Expenses Expenses
Member Nov. 1 $ 60 Nov. 2 $ 60 Nov. 3 $ 60 Nov. 4 $ 60
Depend- Nov. 20 70 Nov. 21 70 Nov. 22 70 Nov. 23 70
ents
Total Expenses 130 130 130 130
Max. allowable 110 110 110 110
In this hypothetical example the service member, under the proposed
amendment to the regulations, would be allowed 4 calendar days of
temporary lodging expenses for himself for the period from November 1 to
November 4, and 4 additional calendar days of expenses on behalf of his
dependents for the period from November 20 to November 23. November 1
and 20 would be counted as a single "day" for reimbursement entitlement
purposes, however, and consequently reimbursment would be limited to
$110 for that "day." Through the use of this method of reimbursement,
the member would be paid 4 "days" of temporary quarters expenses at the
maximum daily rate of $110, in the total amount of $440.
ANALYSIS AND CONCLUSION
Statutory authority for the temporary lodging expense allowance in
question was added to the United States Code by the Uniformed Services
Pay Act of 1981. 2/ The wording of the statutory provision, 37 U.S.C.
Sec. 404a, quoted above, directs that the period for which the expenses
may be paid or reimbursed may not exceed "four days," except that the
period may not exceed "two days" in the circumstance where a member is
moving from a duty station in the continental United States to an
overseas duty station.
The legislative history of the provision indicates that it was
intended that total reimbursement for a family would be limited to $440,
or $220 in the case of a family moving to an overseas duty station. 3/
The statutory language directs that reimbursement is for expenses
"incurred by the member and the member's dependents" for 4 days, or 2
days in the case of an overseas move, and we have found nothing in the
terms of the statute or its history which would preclude applying the
statute in the manner suggested. Hence, we have no objection to the
proposed change in the regulations.
The question presented is answered accordingly.
Comptroller General
of the United States
FOOTNOTES
1/ This action is in response to a request for decision received from
the Chairman of the Per Diem, Travel land Transportation Allowance
Committee.
2/ Public law 97-60, Sec. 122, October 14, 1981, 95 Stat. 989,1002.
3/ S. Rep. No. 146, 97th Cong., 1st Sess. 12, reprinted in 1981 U.S.
Code Cong. & Ad. News 1484, 1495; and H.R. Rep. No. 265 (Conf.), 97th
Cong., 1st Sess. 28, reprinted in 1981 U.S. Code Cong. & Ad. News 1550,
1557.
FILE: B-221677 DATE: July 21, 1986
MATTER OF: Emily R. Cooper - Relocation Expenses Service Agreement
DIGEST:
An Agriculture employee, who signed a 1-year service agreement
after a relocation at Government expense, left Agriculture after
11 months and accepted employment with the Federal Deposit
Insurance Corporation (FDIC). Although the FDIC is not an agency
covered by the relocation statutes, we conclude that employment
with the FDIC is Government service for the purposes of a
relocation service agreement.
ISSUE
The issue presented in this decision is whether an employee who was
reimbursed by the Department of Agriculture for relocation expenses and
agreed to remain in Government service for 12 months has broken that
agreement by leaving Agriculture after 11 months and accepting
employment with the Federal Deposit Insurance Corporation (FDIC), a
mixedownership Government corporation. We hold that while the FDIC is
not covered under the relocation statutes, employment with the FDIC is
Government service for the purposes of a service agreement under the
relocation statutes.
BACKGROUND
This decision is in response to a letter from the Office of Finance
and Management, Department of Agriculture, concerning the payment of
relocation expenses to Ms. Emily Cooper, a former employee of
Agriculture.
In September 1984, Ms. Cooper transferred to a new duty station while
employed by Agriculture and was reimbursed for her relocation expenses.
In connection with that transfer, she signed a service agreement
obligating herself for 1 year of Government service. See 5 U.S.C. Sec.
5724(i) (1982). However, after 11 months, Ms. Cooper accepted
employment with the FDIC, and Agriculture questions whether employment
with the FDIC qualifies as Government service since the FDIC is excluded
from coverage under the relocation statutes. See 5 U.S.C. Sec. 5721
(1982).
We have received comments from both Ms. Cooper and the FDIC arguing
that while the FDIC is not covered under the applicable relocation
statutes, employment with the FDIC is clearly Government service.
OPINION
As noted above, an employee who transfers at Government expense must
sign a service agreement "* * * to remain in the Government service for
12 months * * *" after the transfer, unless separated for reasons beyond
the employee's control and acceptable to the agency concerned. 5 U.S.C.
Sec. 5724(i) (1982). Neither the statute nor the applicable
regulations contained in the Federal Travel Regulations 1/ define
further the term "Government service", but we note that the Court of
Claims has held that "Government service" does not mean "agency service"
and that an employee need not remain with the same agency for 12 months
in order to fulfill the service agreement. Finn v. United States, 192
Ct. Cl. 814 (1972).
The question posed by Agriculture is whether an employee may fulfill
the service agreement by transferring to an agency not within the scope
of the relocation statutes. As to whether the FDIC is subject to the
relocation statutes, we note that section 5721 of title 5, United States
Code, defines "agency" for the purposes of coverage under the relocation
statutes and specifically excludes a Government controlled corporation.
The Federal Travel Regulations define an "agency" as including wholly
owned Government corporations but excluding Government controlled
corporations. FTR para. 2-1.4(c)(1).
A Government corporation is defined in 5 U.S.C. Sec. 103(1) (1982)
as a corporation owned or controlled by the Government, but a Government
controlled corporation is defined as not including a corporation owned
by the Government. 5 U.S.C. Sec. 103(2) (1982). Government
corporations are also defined in 31 U.S.C. Sec. 9101 (1) as either
mixed-ownership or wholly owned Government corporations, and the FDIC is
defined as a mixed-ownership Government corporation. 31 U.S.C. Sec.
9101(2)(C) (1982). In view of these statutory definitions and the
language of the FTR, cited above, we conclude that the term Government
controlled corporation refers to mixed-ownership Government
corporations. See 25 Comp. Gen. 7 (1945). Therefore, we hold that the
FDIC, as a mixed-ownership Government corporation, is excluded from
coverage under the relocation statutes.
Although the FDIC is excluded from coverage under the relocation
statutes, we believe employment with the FDIC is "Government service"
for the purposes of a relocation service agreement. As noted above, the
FDIC is a mixedownership Government corporation, and the courts have
held that the FDIC is a Federal agency for many purposes. See ROCAP v.
Indiek, 539 F.2d 174 (D.C. Cir. 1976); and Rauscher Pierce Refsnes,
Inc. v. Federal Deposit Insurance Corporation, 789 F.2d 313 (5th Cir.
1986). Our decisions have also recognized the Federal status of the
FDIC. See 35 Comp. Gen. 1 (1955); and 25 Comp. Gen. 7, cited above.
Since the relocation statute refers only to "Government service"
rather than service with an agency within the scope of the relocation
statutes, we hold that employment with the FDIC, a Government
corporation, constitutes Government service for the purposes of 5 U.S.C.
Sec. 5724(i).
Accordingly, we conclude that Ms. Cooper has not violated her 1-year
service agreement by accepting employment with the FDIC.
Comptroller General
of the United States
FOOTNOTES
1/ Federal Travel Regulations, incorp. by ref., 41 C.F.R. Sec.
101-7.003 (1985).
FILE: B-221670 DATE: July 29, 1986
MATTER OF: Malcolm J. Clark
DIGEST:
A wage grade employee employed in Alaska by the Federal
Aviation Administration who converted from a wage grade position
to a General Schedule position had his pay set erroneously based
upon the highest wage grade rate earned in a wage grade position
held outside Alaska rather than the appropriate Alaska wage grade
rate. The error continued through subsequent pay increases
including employment with the Bureau of Land Management. Waiver
was allowed for the period the employee accepted the overpayments
in good faith, but the denial of waiver is sustained for pay
periods the employee received overpayments after being notified an
error had been made.
Mr. Malcolm J. Clark requests reconsideration of our Claims Group's
denial of his application for waiver of the amount of $1,206.62 of his
debt to the United States. The debt arose from erroneous payments
received after converting from a wage grade position to a General
Schedule position and having his pay determined using erroneous wage
grade rates. In light of the applicable provisions of law, our Claims
Group's denial is sustained.
Mr. Clark was transferred from a wage grade position outside the
Alaska region to a General Schedule position in Alaska with the Federal
Aviation Administration (FAA) on September 18, 1977. He was employed as
a GS-9, step 10. He was promoted from GS-9 to GS-11 on June 17, 1979,
and his salary was set erroneously as a GS-11, step 8, instead of step
5. On October 7, 1979, Mr. Clark received a promotion to a GS-12. At
this time, his salary was set erroneously as a GS-12, step 6, instead of
step 2. On October 5, 1980, Mr. Clark was downgraded to GS-11. Due to
an administrative error, his salary was set erroneously as GS-11, step
10, instead of step 8. He was paid at the GS-11, step 10, rate until
October 3, 1981.
Mr. Clark was transferred to the Bureau of Land Management,
Department of the Interior, on October 4, 1981. Based upon his previous
salary at the FAA, he was paid at the GS-11, step 10, rate. The FAA
then determined that their method of converting wage grade employees to
the General Schedule position was erroneous and that it was necessary to
correct Mr. Clark's payments during the period that he was employed by
them. As a result of this action, they determined that he was overpaid
$6,636 from June 17, 1979, through October 4, 1981.
It was also necessary for the Bureau of Land Management to correct
Mr. Clark's payments when they learned that he was transferred in an
erroneous step. As a result of this action, he was overpaid $2,226.62
from October 4, 1981, through April 2, 1983. Thus, the total of all
overpayments was $8,862.62. He was notified of his overpayments by the
FAA on June 8, 1982.
In his original request for waiver dated November 15, 1982, Mr. Clark
stated that he had no knowledge of the error in the salary he received
prior to notification by the FAA and that since he was unaware of a
problem, he took no steps to correct any overpayment. Our Claims Group
determined that he acted in good faith in accepting the erroneous
payments totaling $6,636 while he was employed by the FAA and waived
their collection. The erroneous payments totaling $1,020 for the pay
periods October 4, 1981, through May 29, 1982, made by the Bureau of
Land Management were also waived due to their having been accepted in
good faith. The remaining $1,206.62 requested for waiver was denied on
grounds that Mr. Clark was partially at fault in not notifying
appropriate officials at the Bureau of Land Management of the correction
in his salary for the time he was employed at the FAA. In his appeal
from the denial, he contends in essence that at the time he was notified
by the FAA of the errors, he believed that the payments were correct
when made and that the Bureau of Land Management was not required to
base their salary amounts on the corrected FAA payments.
The provision of law authorizing the waiver of claims of the United
States against employees arising out of erroneous payments of pay, 5
U.S.C. Sec. 5584, permits such waivers only when the collection of the
erroneous payments would be against equity and good conscience and not
in the best interests of the United States and only when there is no
indication of fraud, misrepresentation, fault, or lack of good faith on
the part of the employee, or any other persons having an interest in
obtaining the waiver.
The word "fault" has been interpreted as including something more
than a proven overt act or omission by an employee. Fault is considered
to exist if in light of all the facts it is determined that an employee
exercising reasonable diligence should have known that an error existed
and taken action to have it corrected. The standard employed by this
Office is to determine whether a reasonable person should have been
aware that he was receiving payment in excess of his proper entitlement.
George R. Beecherl, B-192485, November 17, 1978.
It has been consistently held that when an employee is aware of an
overpayment of pay when it occurs, he is not entitled to relief under 5
U.S.C. Sec. 5584. If he accepts such an overpayment, knowing it to be
erroneous, he cannot reasonably expect to retain it and he should make
provision for its repayment. In such case, collection of this
overpayment is not considered to be against equity and good conscience,
or contrary to the best interests of the United States. Beatrice M.
Lansdown, B-201815, March 25, 1981.
In the present case, all overpayments in question Mr. Clark received
before he was notified by the FAA on June 8, 1982, of the error in
setting his salary when he was transferred to the General Schedule
position were accepted in good faith and collection would be against
equity and good conscience and not in the best interests of the United
States. After receipt of such notice, even though he may not have
agreed with it, Mr. Clark was alerted to the possibility of continued
error in his pay. He had a duty to notify appropriate officials in the
Bureau of Land Management of the error in his pay grades discovered by
the FAA and to inquire whether the errors would affect his pay at the
Bureau. Since he did not do so, we cannot find him free from fault in
accepting the overpayments for the pay periods May 30, 1982, through
April 2, 1983, in the amount of $1,206.62 after having notice of an
error. Rosaslie L. Wong, B-199262, March 10, 1981.
Accordingly, the action of our Claims Group denying waiver of the
$1,206.62 in overpayments is sustained.
Comptroller General
of the United States
FILE: B-221662 DATE: July 28, 1986
MATTER OF: Miguel H. Cintron
DIGEST:
Federal employees may be allowed reimbursement of their
expenses when they reserve hotel accommodations for an official
travel assignment and forfeit the room deposit because the
assignment is subsequently canceled, but only if they exercise
reasonable prudence in minimizing the costs involved. Hence, an
employee of the Army Corps of Engineers may not be reimbursed for
a forfeited room deposit where it appeared that he could have
avoided the forfeiture if he had taken reasonable action to notify
the hotel promptly after learning of the cancellation of his trip,
and he failed to take that action.
The question presented in this matter is whether a Government
employee may be reimbursed for the expense of guaranteed motel room
reservations secured in preparastion for a temporary duty assignment
that was canceled. 1/ In view of the particular facts of record, we
conclude that reimbursement may not be allowed.
Background
The claimant, Mr. Miguel H. Cintron, is an environmental engineer
employed with the Army Corps of Engineers at Omaha, Nebraska. On
Friday, July 19, 1985, he reserved rooms for himself and three fellow
employees at a motel in Edgewood, Maryland, for the evening of Sunday,
July 21, 1985, in preparation for a temporary duty assignment they were
scheduled to perform at Aberdeen Proving Grounds, Maryland. Mr. Cintron
used a credit card charge account to advance the motel $151.20 for
guaranteed room reservations Sunday evening for himself and the other
three employees.
At approximately 9 a.m. on the morning of Sunday, July 21, Mr.
Cintron was informed through a telephone call to his home that the
temporary duty assignment had been canceled. He did not notify the
motel of the cancellation until the following day, however, and as a
result he forfeited the amount advanced for the guaranteed room
reservations. In support of his claim for reimbursement of the $151.20
expense incurred in the matter, he furnished the following explanation
for his delay in notifying the motel:
"* * * I did not have the telephone number of the motel at home
and did not have a key to the building (Corps office). * * * On
Monday, 22 July 1985, early in the morning from the office, I
called the motel and told them that we were not coming. This was
too late, as the motel manager indicated the rooms were guaranteed
and that my credit card account would be billed for the four
people I had reserved rooms for. * * *"
The Chief of the Finance and Accounting Division, Army Corps of
Engineers, subsequently denied Mr. Cintron's claim and provided this
statement of reasons:
"Most commercial lodging establishments allow reservations to
be canceled until 6 p.m. on the date of arrival. * * * In this
case, it would seem Mr. Cintron should have known the name of the
motel since he made the reservation and was scheduled to travel to
the motel on 21 July. He should have been able to obtain the
telephone number through directory assistance and cancel the
reservation before 6 p.m."
Mr. Cintron now questions the correctness of this denial of his claim,
and has submitted a reclaim voucher.
Analysis and Conclusion
Section 5702 of title 5, United States Code, provides that under
regulations prescribed by the General Services Administration, an
employee may be reimbursed for the necessary expenses of official
travel.
Statutory regulations adopted by the General Services Administration
are contained in the Federal Travel Regulations. Further directives
issued through the Department of Defense which apply to civilian
employees of the Army are contained in Volume 2 of the Joint Travel
Regulations. Those regulations contain no provisions prescribing the
specific conditions under which employees may be reimbursed when they
have paid deposits for hotel reservations and their travel assignments
are subsequently canceled. The regulations provide generally, however,
that an employee is expected to exercise the same care in incurring
expenses that a prudent person would exercise if traveling on personal
business. 2/
We have held that reimbursable travel costs may include forfeited
room deposits, and that when employees reserve hotel accommodations for
a temporary duty asignment and forfeit the room deposit because the
assignment is canceled, the Government will reimburse reasonable costs
incurred. 3/ We have also expressed the view, consistent with the
applicable regulations, that employees in that situation have a
responsibility to exercise reasonable prudence and are thus required to
take reasonable steps to minimize the costs involved by notifying the
hotel promptly upon learning of the cancellation of their assignment. 4/
In the present case, the Army Corps of Engineers in effect determined
that Mr. Cintron did not exercise reasonable prudence, in that he took
no action to avoid the forfeiture of the room reservation deposit after
he was informed of the cancellation of the temporary duty assignment on
the morning of July 21, 1985. Mr. Cintron has provided no explanation
nor is there any other information in the record to refute the agency's
finding that Mr. Cintron could have avoided the forfeiture if he had
used directory assistance to notify the motel by telephone that morning
of the cancellation of his trip. Hence, we have no basis to disturb the
agency's determination in the matter, and we conclude that Mr. Cintron's
claim was properly denied.
The voucher, which may not be processed for payment, will be retained
here.
Comptroller General
of the United States
FOOTNOTES
1/ This action is in response to a request for an advance decision
received from Mr. L. C. Williamsen, Finance and Accounting Officer,
Omaha District, Army Corps of Engineers, concerning the propriety of
certifying a voucher in the amount of $151.20 in favor of Mr. Miguel H.
Cintron.
2/ Federal Travel Regulations, para. 1-1.3a incorp. by ref., 41
C.F.R. Sec. 101-7.003; Joint Travel Regulations, vol. 2, para. C1058-1.
3/ See Chris C. Rainey and Sidney A. Morse, 59 Comp. Gen. 612,
613-614 (1980).
4/ Darvin L. Lee, B-198699, October 6, 1980.
FILE: B-221630 DATE: July 10, 1986
MATTER OF: Mike Monroney Aeronautical Center (FAA) Compensatory Time
or Overtime
DIGEST:
For nearly 2 years, certain FAA payroll employees were given
the option of using compensatory time in lieu of overtime pay.
One group of employees worked four 10-hour days the first week of
each pay period and took Friday off. Although such overtime work
normally would be considered "regularly scheduled" for which
compensatory time is not available, we conclude that this was
essentially an informal extension of the flexible work schedule
worked in prior years. These employees are not entitled to
overtime compensation for such "regularly scheduled" overtime work
where they did not work more than 40 hours in thats workweek.
Other employees who worked frequent or sporadic overtime on an
irregular or unscheduled basis were properly entitled to
compensatory time for such work and are not entitled to additional
compensation.
This matter comes to us as a joint submission from the Federal
Aviation Administration (FAA), Mike Monroney Aeronautical Center and the
American Federation of Government Employees, Local 2282 (union). 1/ We
are asked whether certain agency employees who worked overtime and
received compensatory time off are entitled to overtime Day for those
extra hours worked, and if so, how the compensatory time already taken
should be accounted for. We hold that the employees who worked
irregular or occasional overtime are not entitled to overtime payments,
and that employees who worked four 10-hour days with the fifth day off
are not entitled to overtime where their hours of work did not exceed 40
hours per week.
BACKGROUND
Between November 3, 1980, and March 20, 1982, employees of the FAA
payroll office in Oklahoma City, Oklahoma, participated in an
alternative work schedule experiment in which 10-hour days were worked
on the first and last 4 workdays of each pay period, and the intervening
Fridays and Mondays were taken off, This work schedule was chosen to
accommodate the payroll office workload, which reached its peak during
the first 3 days of each pay period, when time and attendance reports
for prior pay periods were entered into agency computers.
Beginning March 21, 1982. the FAA discontinued the compressed work
schedule experiment and scheduled all payroll employees to workweeks of
8 hours per day, 5 days per week. All overtime worked from March 1982
until June 1983 was paid under title 5, United States Code, or the Fair
Labor Standards Act (FLSA), as applicable.
Effective June 12, 1983, the FAA offered payroll employees the option
of earning and using compensatory time since, according to the FAA
submission, "* * * budgetary constraints would not permit this continued
level of overtime payments." Compensatory time was offered to these
employees following an informal agreement between the agency and the
union.
Based on the time and attendance reports submitted by the agency,
there were three employee work patterns established for the period from
June 12, 1983, to March 19, 1985. One group of employees worked 10
hours per day, 4 days per week, during the first week of each pay period
and took off Friday of that week through the use of compensatory time
earned during the first 4 days of that week. A second group frequently
worked overtime during the first and sometimes the second week of each
pay period and received compensatory time for the hours worked. The
third group of employees worked overtime infrequently and sporadically,
and either received premium pay or took compensatory time off. During
this period, the agency continued to schedule all employees to workweeks
of 8 hours per day, 5 days per week.
On March 19, 1985, compensatory time off was no longer offered to
payroll employees who worked overtime. Although it is not clear in the
record before us why the FAA discontinued the practice of offering
compensatory time for overtime work, one agency document states the the
FAA realized compensatory time cannot be granted for regularly scheduled
overtime. The union filed two grievances with the agency alleging that
cessation of the compensatory time option was improper and violated
their negotiated agreement. Both grievances were denied by the
Aeronautical Center director on June 18, 1985.
The issue we are asked to decide was not the subject of the
grievance. Rather, we are asked whether employees who took compensatory
time off from June 12, 1983, to March 19, 1985, are entitled to premium
pay for the hours they worked overtime, and if so, how the compensatory
time off taken by the employees should be accounted for. The FAA report
states that these payroll employees are nonexempt under the FLSA and
that they have received their full entitlements under FLSA.
OPINION
Statute and regulations
Under section 5542 of title 5, United States Code, "hours of work
officially ordered or approved in excess of 40 hours in an
administrative workweek, or * * * in excess of 8 hours in a day
performed by an employee are overtime work and shall be paid,"
generally, at a rate of one and one-half times the employee's basic rate
of pay. Title 5 further provides, as follows:
"Sec. 5543. Compensatory time off.
"(a) The head of an agency may
"(1)
on request of an employee, grant the employee compensatory time
off from his scheduled tour of duty instead of payment for an
equal amount of time spent in irregular or occasional overtime
work; and
"(2) provide that an employee whose rate of basic pay is in
excess of the maximum rate of basic pay for GS-10 shall be granted
compensatory time off from his scheduled tour of duty equal to the
amount of time spent in irregular or occasional overtime work
instead of being paid for that work under section 5542 of this
title." (Emphasis added.)
Office of Personnel Management (OPM) regulations define irregular or
occasional overtime work as "overtime work that is not part of an
employee's regularly scheduled administrative workweek." 5 C.F.R. Sec.
550.103(f) (1986). A regularly scheduled administrative workweek, in
turn, for a full-time employee, means "the period within an
administrative workweek * * * within which the employee is regularly
scheduled to work." 5 C.F.R. Sec. 550.103(n). Work which is scheduled
in advance of an administrative workweek is regularly scheduled work
under OPM regulations. 5 C.F.R. Sec. 550.103(p). See James Barber, et
al., 63 Comp. Gen. 316, 319 (1984).
Heads of agencies are required to "schedule an employee's regularly
scheduled administrative workweek so that it corresponds with the
employee's actual work requirements." 5 C.F.R. Sec. 610.121(b) (1).
Furthermore, the regulations state that if an agency knowingly fails to
do so, the employee is entitled to premium pay for that period of work
as if it were regularly scheduled. In this regard, it must be
determined that the head of the agency: "(i) Had knowledge of the
specific days and hours of the work requirement in advance of the
administrative workweek, and (ii) had the opportunity to determine which
employee had to be scheduled, or rescheduled, to meet the specific days
and hours of that work requirement." 5 C.F.R. Sec. 610.121(b)(3).
First group
In the present case, the first group of employees described above
should not have been authorized compensatory time for working more than
8 hours per day during the first week of each pay period. Although the
overtime work was not scheduled in advance (five 8-hour days were
scheduled), these employees consistently worked four 10-hour days, and
it appears that the agency failed to schedule the employee's
administrative workweek to correspond with the employees's actual work
requirements. See 5 C.F.R. Sec. 610.121 (b). Thus, hours of work in
excess of 8 hours for this group of employees normally would be
considered "regularly scheduled" overtime.
We note, however, that these employees generally did not work more
than 40 hours during the first week of the pay period. Thus, if we
converted the compensatory time to overtime hours, the employees would
have worked only 32 hours of regular time, and they would have to be
charged annual leave for the Friday they took off each week.
We believe that what occurred here was an informal extension of the
flexible and compressed work schedule used by these employees from 1980
until 1982. Thus, to the extent that this first group of employees
worked four 10-hour days and did not work more than 40 hours in that
first week of the pay period, we conclude that they are not entitled to
additional compensation for performing "regularly scheduled" overtime.
See 5 U.S.C. Sec. 6123 (Supp. I, 1983). Any additional hours of work
beyond 40 hours per week performed by this group of employees would
appear from the record before us to be "irregular and occasional"
overtime which may be compensated with compensatory time. Second and
third groups
As to the second and third groups of employees, we note that the time
and attendance records for that period reflect either erratic patterns
of overtime work during both the first and second weeks of the pay
period or sporadic overtime worked a few times each year. This would
not constitute regularly scheduled overtime because the reports before
us do not provide sufficient evidence of (1) agency knowledge of the
specific work requirements prior to the workweek, and (2) which employee
would work the overtime. Therefore, these employees would be deemed to
have worked "irregular or occasional" overtime, and they were entitled
to compensatory time off if they chose it in lieu of premium pay.
Alison Palmer, B-180142, August 6, 1975.
CONCLUSION
Accordingly, employees who worked four 10-hour days with the fifth
day off are not entitled to additional compensation for "regularly
scheduled" overtime. Other employees who worked frequent or sporadic
overtime were entitled to earn and use compensatory time for such
irregular or occasional overtime and are likewise not entitled to
additional compensation.
Comptroller General
of the United States
FOOTNOTES
1/ This request has been handled as a labor-relations matter under 4
C.F.R. Part 22(1986).
FILE: B 221607.2 DATE: July 7, 1986
MATTER OF: Action Manufacturing Company
DIGEST:
1. Protest that a single award in a procurement limited to
mobilization base producers is contrary to the terms of the solicitation
and agency policy is without merit where selection of a single awardee
is consistent with the evaluation factors set forth in the solicitation
and agency policy prescribes a single award under conditions present in
the protested procurement.
2. General Accounting Office denies a protest that a single award in
a mobilization base procurement will eliminate competition in future
procurements where the protester provides no support for its bare
assertion that only active manufacturers will be able to compete
effectively for the agency's future requirements.
Action Manufacturing Company protests the award of a contract to
Bulova Systems and Instruments Corporation for M567 and M935 fuzes under
request for proposals (RFP) No. DAAA09-85-R-1716, issued by the United
States Army Armament, Munitions and Chemical Command. Action, which
currently produces the fuzes under another contract, contends that under
the terms of the solicitation, it should have received a partial award
for the fuzes. The firm also alleges that in several respects the
procurement was not conducted in accord with applicable statutes and
regulations.
We deny the protest.
The RFP, which was issued on November 20, 1985, sought alternative
offers for M567 fuzes, M935 fuzes, and the Army's combined requirements
for M567 and M935 fuzes (422,258 and 505,312 respectively). Offerors
could propose prices for delivery on either an f.o.b. destination or
f.o.b. origin basis or for both; they could also propose either with or
without first article testing. The solicitation provision addressing
possible combinations of awards, paragraph M-4, which is central to
Action's protest, states as follows:
"This solicitation and the range of quantities and delivery
rates proposed are for the purpose of allowing the Government to
select a single award, or combination of multiple awards, which
will satisfy the current production requirements and at the same
time retain one or more suppliers in an active state with
capability to accelerate production to a higher production rate at
some future date, if required. The Government expects that one or
more offerors participating in this competitive procurement action
will be unsuccessful and may not receive any award as a result of
this solicitation...."
The same paragraph reserves the government's right to make that
combination of awards determined to be in the best interest of the
government, price and other factors considered, and states that:
"Principal among such other factors will be the potential
guantitative mobilization production reguirement for the supply
item involved and the ability of firms selected for award to
respond to such potential future demands by the Government for
increased production beyond the guantities initially awarded as a
result of this solicitation." (Emphasis in original.)
Three companies submitted proposals, including Bulova and Action.
The Army concluded that Bulova's offer for all the fuzes, delivered
f.o.b. origin and without first article testing, represented the lowest
cost to the government. On February 27, the Army awarded a contract to
Bulova for the total requirements for both fuzes. This protest
followed.
Action contends that a total award to Bulova will reduce the number
of firms in the mobilization base, which is allegedly contrary to the
purpose of the solicitation and the evaluation factors listed in the
RFP. The firm also alleges that the award will create a single source
for future requirements and cause an increase in future prices, in
violation of the Competition in Contracting Act of 1984. Pub. 98-369,
Part VII. Action also alleges that the agency failed to follow
regulatory requirements for negotiated procurements because it did not
conduct discussions.
As a preliminary matter, the Army argues that since the RFP alerted
offerors to the possibility that only one award might be made, Action
should have protested before the date for receipt of initial proposals.
See Bid Protest Regulations, 4 C.F.R. Sec. 21.2(a) (1) (1986) (protests
based upon alleged solicitation improprieties apparent before the date
for receipt of initial proposals must be filed by that date).
We do not view Action's protest as contending that a single award
would be improper in every case. Action argues that in light of the
particular offerors and prices offered, under applicable statutes,
regulations, and policies the agency should have made a multiple award.
The protest thus does not relate to a deficiency in the solicitation
apparent before the date for receipt of proposals, and it is not
untimely.
Reduction of the Mobilization Base
The Competition in Contracting Act of 1984 provides that agencies
should "promote the attainment and maintenance of essential capability
in the defense industrial base and the capability of the United States
for industrial mobilization." 10 U.S.C. Sec. 2301(b)(4) (Supp. II 1984).
In furtherance of this policy, agencies may use noncompetitive
procedures to award to a particular source or sources in order to
maintain availability of property or services in a national emergency or
to achieve industrial mobilization. 10 U.S.C. Sec. 2304(c)(3).
Pursuant to this authority, the Army limited competition in this
procurement to current mobilization base producers, which are "Planned
Producers" participating in the Department of Defense (DOD) Industrial
Preparedness Production Planning Program. See True Machine Co.,
B-215885, Jan. 4, 1985, 85-1 CPD P 18.
A firm is not required to be actively manufacturing an item to be a
current mobilization base producer. Initially, a firm must have
indicated its willingness to produce specified military items in a
national emergency by completing a DOD Form 1519, "DOD INDUSTRIAL
PREPAREDNESS PROGRAM PRODUCTION PLANNING SCHEDULE." Government
production planning officials then survey the facilities in question and
negotiate a production planning schedule that is incorporated in the
DOD Form 1519. A firm is considered a mobilization base producer after
completion and approval of its DOD Form 1519. Id. In this case, the
Army states, there are nine firms with a DOD Form 1519 on file for the
fuzes being procured.
In alleging that a single award to Bulova is contrary to the Army's
stated desire to maintain the mobilization base, Action confuses the
Army's need for mobilization base producers with a need for such
producers to be actively manufacturing the fuzes. See National Presto
Industries, Inc., B-195679, Dec. 19, 1979, 79-2 CPD P 418 at 6. The RFP
states the Army is using its authority to restrict competition in order
to retain the availability of the mobilization base. It does not state
that the agency plans to keep any particular number of mobilization base
producers actively manufacturing fuzes. A single award will not reduce
the mobilization base (i.e., the number of firms with a DOD Form 1519 on
file), and, consequently, we do not find that a single award is
inconsistent with the agency's desire to maintain the current
mobilization base.
The protester claims that the RFP evaluation factors effectively
require that more than one mobilization base producer be actively
manufacturing the fuzes. We disagree. The only factors discussed in
the solicitation are price and the capability of the awardee to increase
production to meet potential requirements, and the agency's selection
was consistent with those factors. The Army's review of Bulova's
capacity, incorporated in the firm's DOD Form 1519, showed that the firm
could increase production in excess of potential requirements, and
Bulova offered the lowest price for the fuzes. Consequently, we deny
this ground of Action's protest.
Limitation of Future Competition
The protester claims that an award to Bulova of the total Army
requirement will result in only one source for future procurements and
higher prices, and that this is contrary to the Competition in
Contracting Act of 1984.
The protester does not refer to any particular section of the Act to
support its allegation, and we are not aware of one that is clearly
applicable in this context. Moreover, the protester has not established
the factual premise for the claim, i.e., that unless it is awarded a
contract for at least part of the current requirement, the firm will not
be competitive in future procurements. Action simply asserts that once
it completes its current contract for producing fuzes, any future
purchases "will most likely" have to be from Bulova on a sole-source
basis. The protester states that "it is not inconceivable" that it may
lose some, if not all, of its "know-how" concerning the manufacture of
the fuzes. Action does not provide any information regarding the
investment and time necessary to initiate production, the nature of the
manufacturing "know how" that may be lost, how many of its current
employees are essential for it to compete in the future, or any other
evidence in support of its factual assertion.
According to Action, before it entered the market for supply of the
fuzes, Bulova enjoyed a monopoly and priced its fuzes higher than it
does currently. Yet, the protester provides no information about how it
entered the market and why it cannot do so in the future. The
protester's bare statements provide no basis for us to find that the
Army's failure to make multiple awards in this instance will reduce or
eliminate Action's competitive position in future procurements.
Discussions
The protester alleges that the Army violated the Federal Acquisition
Regulation (FAR) by not conducting discussions with offerors. The FAR,
48 C.F.R. Sec. 15.610(a) (3) (FAC 84-5, April, 1985), provides that
discussions need not be conducted in negotiated procurements where it
can be clearly demonstrated f rom full and open competition or prior
cost experience that acceptance of the most favorable initial proposal
without discussion would result in the lowest overall cost to the
government at a fair and reasonable price. Action has not suggested
that Bulova's price is not fair and reasonable, or any other reason why
this exception from the general requirement for discussions is not
applicable. Consequently, we deny this basis for protest.
The protest is denied.
Harry R. Van Cleve
General Counsel
Matter of: Claim of Manchester Airport Authority for Reimbursement
of Oil Spill Clean-up Expenses
File: B-221604
Date: March 16, 1987
DIGEST
Airport Authority that contracted and paid for services to halt and
clean up an oil spill on Army property may be paid on quantum meruit
basis because services constituted a permissible procurement at a fair
price which the Government would otherwise have had to provide itself
and for which the Army received a benefit.
DECISION
The Manchester Airport Authority (MAA), City of Manchester, New
Hampshire, seeks reimbursement from the Department of the Army for
$10,795.96 for services provided in cleaning up an oil spill. The Army
forwarded the claim to GAO for settlement as a doubtful claim. 1/ In its
administrative report, the Army recommended favorable consideration of
the claim because:
"* * * the U.S. Army did receive benefit of the service and
would have had to contract for the clean-up if Manchester Airport
Authority had not done so."
Based on our review of the documents submitted, it is our conclusion
that the MAA may be paid on a quantum meruit basis.
FACTS
This claim arose from clean-up services paid for by the MAA of an oil
spill that occurred on the grounds of the U.S. Army Reserve Center at
Grenier Field in Manchester, New Hampshire, in 1982. It appears that
following several weeks of heavy rains, a storm drainage sewer near an
Army building on the Reserve Center grounds, adjacent to MAA land,
backed up, overflowed on the grass surrounding the drain, and left a
residue of oil. Upon discovering the spill, the Army initially
contracted with a commercial oil clean-up crew to pump the oil from the
drain and to locate an apparent blockage in the pipes which it assumed
was the cause of the spill. The contractor advised the Army that the
problem was greater than first anticipated because oil continued to flow
from the storm sewer. The Army ordered work stopped on the contract and
paid $1,673 to the private contractor for the unsuccessful clean-up
attempt.
On June 4, the Army contacted the MAA and State water pollution
officials and asked their assistance in locating the source of the oil
contamination. It requested, in addition, help in locating the original
plans of the drainage system, since it was suspected that the major
source of the contamination could be from the abutting airport land and
buildings. All of the land occupied by the airport and the Army Reserve
Center had originally been owned by the Air Force, which had transferred
part of it to the Army and sold the rest to the MAA. The MAA studied
the drainage system, using old Air Force plans it had located, and
identified one or more possible sources of the problem: 1) the basement
of Precision Airlines, Inc., an airport lessee of the MAA; 2)
underground storage tanks next to Precision's building; and/or 3) an
Army motor vehicle maintenance building.
A few days later, MAA retained a private company, Jet-Line Services,
to investigate the problem and perform necessary clean-up services.
Jet-Line worked over a 2-week period and was able to successfully clean
the drainage system and stop the oil flow from causing additional
pollution on adjacent property. Jet-Line billed the MAA for $23,091.91,
which MAA was able to reduce to $21,591.91 by taking advantage of a
prompt payment discount. MAA at first attempted to bill the Army for
the full amount it had paid, but, upon the Army's refusal, agreed to
reduce its claim to $10,795.96 and to pursue Precision for the remaining
half.
It appears to be the Army's contention that Precision was the
principal source of the contamination, as there was evidence of
deliberate dumping of oil through a floor drain in Precision's boiler
room. The MAA has suggested that the spill was caused by the Army's
lack of maintenance of the drainage system, and that the oil was from
"years of residue collected in an oil trap built by the Air Force and
turned over to the Army without direction." 2/
DISCUSSION
As the Army's administrative report points out, there are three
possible grounds on which MAA's claim can be considered -- tort,
contract, or quantum meruit. In August 1982, MAA did file a claim with
the Army under the Federal Tort Claims Act, which the Army denied in
1983. MAA did not file suit within the time period prescribed by law.
Hence, the Army's denial is final and conclusive, and the tort theory
may not be considered further.
It is undisputed that there was no formal contract between the Army
and the MAA for the clean-up services. The Army considered whether it
could apply its authority under applicable procurement regulations to
ratify unauthorized commitments, but found that there had been no
commitment by Army personnel to reimburse MAA. This also is a
determination that is solely within the Army's jurisdiction to make.
Hence, the only remaining theory for us to consider is payment on the
basis of quantum meruit. In applying this theory, it is not necessary
for us to determine the exact cause of the contamination, because the
doctrine is based not upon legal liability but upon the equitable
concept of unjust enrichment. In 62 Comp. Gen. 337 (1983), for example,
we recognized that even when goods or services are provided under a void
contract:
"* * * the Government is obliged to pay the reasonable value of
the goods or services on an implied contract for quantum meruit or
quantum valebat." Id., at 338-39.
In 64 Comp. Gen. 727, 728 (1985), we stated the test for quantum
meruit recovery as follows:
"We must first make a threshold determination that the goods or
services would have been a permissible procurement had the formal
procedures been followed. * * *
"Next we must find that the Government received and accepted
the benefit, the persons seeking payment acted in good faith, and
the amount claimed represents the reasonable value of the benefit
received."
In that case, a telephone company, at its own initiative and without
the knowledge of the Government, installed an emergency, auxiliary
generator to restore telephone service during a power failure at a
missile testing site. Here the Army not only had knowledge of the
service provided by the MAA but it initiated the request for assistance
and, according to the airport manager, gave conflicting information as
to its willingness to pay for the service.
There is no question that the Army could have contracted for the oil
clean-up services itself. The entire oil spill occurred on Army
property even though it may have been at least partially caused by
actions taken on adjacent property. The Army officials contracted and
paid for initial clean-up efforts, and sought assistance from the MAA
and State officials only when this attempt failed.
There is also no question that the Army received a benefit. This is
evidenced by the statement in the administrative report that the Army
would have had to contract for the services if the MAA had not done so.
The good faith of the MAA in this matter has not been questioned. Work
was begun under an emergency situation when all parties feared that
failure to find the source of the oil spill and correct it could lead to
serious contamination of adjacent land and water. Furthermore, by its
prompt payment of Jet-Line's bill, the MAA was able to reduce the
parties' cost through the substantial discount that was offered.
Finally, an official at the Army's Environmental and Energy
Management Off ice at Fort Devens has stated that the cost of the
services appeared to be "reasonable" and "competitively priced." 3/ We
therefore accept the amount claimed as the reasonable value of the
benefit Army received.
In view of the foregoing, we conclude that the standards for quantum
meruit recovery have been met. The Army may therefore pay the MAA's
claim in the amount of $10,795.96.
Comptroller General
of the United States
FOOTNOTES
1/ GAO Policy and Procedures Manual for Guidance of Federal Agencies,
(ILLEGIBLE) 5.1.
2/ Letter to GAO from City of Manchester Department of Aviation, May
31, 1985.
3/ Memorandum by Robert Nicoloro to Contracting Division, Fort
Devens, Mass., July 18, 1984.
B-221578
September 29, 1987
DIGEST
1. GAO does not have jurisdiction to resolve disputes involving
payment of interest on transportation claims, including Government bills
of lading. Its general claims authority under 31 U.S.C. Sec. 3529 has
been superseded by the more specific authority conferred on the General
Services Administration (GSA) by the Transportation Act of 1940, as
amended, 31 U.S.C. Sec. 3726, which has authority to audit
transportation payments and effect settlements of amounts in dispute,
although claimants could ask GAO to review GSA decisions.
2. GSA regulations are ambiguous on the question as to whether
disputes concerning Prompt Payment Act interest payments on
transportation claims are to be resolved by the originating agency's
Board of Contract Appeals or by the General Services Administration
under the Transportation Act of 1940. In either case, GAO has no
initial jurisdiction to resolve such disputes.
Ms. Betty Deaver, Certifying Officer
United States Department of Agriculture
Office of Finance and Management
National Finance Center
P.O. Box 60,000
New Orleans, Louisiana 70160
Dear Ms. Deaver:
This is in response to your request of January 3, 1986 for a decision
as to whether the Mollerup Moving and Storage Company is entitled to
payment of interest, under the Prompt Payment Act, 31 U.S.C. Secs.
3901-3906 (1982), for an 18 month period from the date it claims to have
submitted its first request for payment until payment was actually made
(your reference: A-2 WDM). You had refused to pay the claim on the
grounds that interest under the Act did not begin to accrue until you
had received a properly documented and certified bill. In brief, this
case involves a dispute between the contractor and your agency as to
when the contractor initially submitted a properly completed billing
within the meaning of the Act and agency requirements.
At the outset, may I start with sincere apologies for the inordinate
length of time that we have kept you waiting for a reply to this
request. Through an unfortunate records mix-up, your request only
recently came to my attention.
As you know from the telephone conversation Jeremy Hutton of my staff
had on September 9 with Jeanne Di Gange of your office, the General
Accounting Office does not have jurisdiction to resolve this kind of
dispute. Our general claims authority under 31 U.S.C. Sec. 3529 has
been superseded by the more specific authority conferred on the General
Services Administration (GSA) by the Transportation Act of 1940, as
amended, 31 U.S.C. Sec. 3726. In 62 Comp.Gen. 203 (1983), we held that
the GSA is the agency with authority to audit Government bills of lading
(GBL) and effect settlements of amounts in dispute, although claimants
could ask us to review GSA decisions.
To further complicate matters, GSA regulations governing procedures
for consideration of transportation claims indicate that, with regard to
Prompt Payment Act claims, the GSA may have delegated authority to
consider these claims to the originating agency, in this case, the
Department of Agriculture Board of Contract Appeals. 41 CFR Sec.
101-41.6042(b) provides:
"Claims concerning any interest that may be payable will be
resolved in accordance with the provisions of the Contract
Disputes Act of 1978, 41 U.S.C. Sec. 601 et seq." Emphasis added
It is unclear as to whether this regulation means that GSA itself
will resolve Prompt Payment Act disputes, following principles
established by past Board decisions in this area or whether, for this
particular kind of transportation contract claim, it intends that the
Board itself resolve the matter. In neither case would GAO have
jurisdiction to consider your claim. We would therefore suggest that
you contact whomever you work with in the transportation unit of GSA to
get an initial interpretation as to whether GSA or your Board of
Contract Appeals would be the proper forum for consideration of this
claim.
It should also be noted that the prescribed period for paying a
contractor for receipt of goods or services under the Prompt Payment
Act, 31 U.S.C. Sec. 3903(1) (B) applies only if, pursuant to paragraph A
of that subsection, there are no other terms and conditions "specified
in the contract" (or the tariff, if this shipper is publicly regulated).
This is a factual question, the answer to which was not readily
apparent from the file materials you submitted. You may wish to
complete your file by determining the applicable period before
submitting the claim for resolution.
Again, we apologize for the delay and regret that we cannot be of
further assistance.
Sincerely yours,
(Mrs.) Rollee H. Efros
Associate General Counsel
Matter of: Staff Sergeant Willie E. Brower - Family Separation
Allowance Entitlements
File: B-221521
Date: May 22, 1987
DIGEST
A member of the Air Force (husband) assigned to an overseas
unaccompanied tour is married to another member (wife) who is also
assigned to an unaccompanied tour at a separate duty station. The wife
has a child from a previous marriage and they have a child from their
marriage to each other. The two children had been living with the
members as part of one household and continue to share the same
household with the husband's mother in the United States while their
parents are assigned overseas. The husband may not receive family
separation allowances on account of the child of their marriage if his
wife is currently receiving family separation allowances on account of
her child of a previous marriage, since the children are members of the
same class of dependents. The additional expenses intended to be
covered by the family separation allowances have been reimbursed to the
wife under her family separation allowances. If the husband were to
also receive the allowance, the family unit would, in effect, be paid
twice for the same expenses.
DECISION
This action is in response to a request for an advance decision from
the U.S. Air Force reqarding payment of family separation allowances. 1/
The issue presented is whether Staff Sergeant Willie E. Brower, USAF,
whose wife is also a service member, may receive family separation
allowances based on a child of their marriage when his wife receives a
family separation allowance based on her own child from a previous
marriage, and both children reside in the same household. Sergeant
Brower has another child, who resides separately with the child's
non-military mother. It is our view that payment of the family
separation allowance may not be made to Sergeant Brower since the
purpose of the allowance is to provide reimbursement for expenses
involved in running a split household when a member is separated from
his dependents due to military orders. Under these circumstances,
Sergeant Brower's wife is already receiving the allowance for their
mutual household, and Sergeant Brower does not qualify for the allowance
based on his other child because he is not separated from that child due
to military orders.
BACKGROUND
This case involves two Air Force enlisted members who are married to
each other and assigned to separate duty stations in Korea where they do
not reside together. They are both assigned to unaccompanied 2/ tours
of duty, the wife at Kusan Air Base and the husband at Osan Air Base.
The wife has a child from a previous marriage, and the husband has an
illegitimate child of a previous relationship for whom he is required to
pay child support. They also have a child of their current marriage.
Both the wife's child of her previous marriage and the child of the
current marriage resided with the members prior to their unaccompanied
assignments, and both children are currently residing with the husband's
mother in a house owned by the members in the United States. The
husband's other child lives with his or her non-military mother.
The wife receives basic allowance for quarters at the withdependent
rate based on her claiming the child of her previous marriage as her
dependent. The husband receives basic allowance for quarters at the
with-dependent rate based on his claiming as a dependent the child for
whom he pays support. The wife has been receiving a family separation
allowance, type II, based on her child by the previous marriage since
she has been stationed in Korea. The husband, Sergeant Brower, has
requested that he receive family separation allowances types I and II on
the basis of his separation from the child of his current marriage.
ANALYSIS
Provisions of law governing the payment of basic allowance for
quarters and family separation allowances to members of the uniformed
services are contained in chapter 7 of title 37, United States Code.
Section 401 of title 37 defines the term dependent for the purposes of
chapter 7 to include a member's "spouse" and "unmarried child,"
including under certain conditions, a stepchild, an adopted child, and
an illegitimate child. However, when two members marry, generally
neither may claim the other as a dependent for purposes of these
allowances. 37 U.S.C. Sec. 420. If they have a child, only one of them
may claim the child as a dependent for an allowance. 54 Comp. Gen. 665
(1975).
Basic allowance for quarters, authorized by 37 U.S.C. Sec. 403, is an
allowance intended to reimburse a member for the costs of private living
quarters when he is not furnished with government quarters adequate for
himself and his dependents, if he has dependents. This allowance is
payable at a "without-dependents" rate and at a higher "with-dependents"
rate for members who have qualifying dependents. The higher
with-dependents allowance is paid at a single rate regardless of the
number of dependents. When two members are married to each other and
are living together as a family unit, both may receive the quarters
allowance but only -one member may receive it at the higher
with-dependents rate based on the single class of dependent children,
which includes children of the members' current marriage and children of
prior relationships. This is because only one set of quarters need be
provided for the family unit, notwithstanding that some of the children
for personal reasons (such as being in the custody of another) may not
live with the family unit. Warrant Officer Ronald G. Hull and Petty
Officer Doris H. Hull, 62 Comp. Gen. 666 (1983); and 54 Comp. Gen. 665
(1975).
When the members are residing separate and apart due to their duty
assignments, however, their quarters allowances are determined on an
individual basis since the members must maintain separate quarters due
to their military assignments. When that is the case, and each has a
child or children of a previous relationship and the children do not all
live together, each member may receive a quarters allowance at the
with-dependent rate. Hull, supra; and Sergeant Harold L. Sandkulla,
Jr., 59 Comp. Gen. 681 (1980). 3/
Family separation allowances are authorized by 37 U.S.C. Sec. 427,
and are of two types, referred to in the regulations as types I and II
or FSA I and II.4/ Type I is authorized by section 427(a), which
provides that a member of the uniformed services with dependents who is
on permanent duty outside the United States is entitled to a monthly
allowance equal to the basic allowance for quarters payable to a member
without dependents in the same pay grade if (1) the movement of the
member's dependents to his permanent station or a place near that
station is not authorized at government expense, and (2) government
quarters are not available for assignment to the member. This is in
effect an additional quarters allowance for the member who must use his
or her basic allowance for quarters to provide quarters for the
dependents who are not authorized to move to the overseas duty station.
Family separation allowance type II is authorized by section 427(b),
which provides that a member with dependents is entitled to a monthly
allowance equal to $60 if, among other conditions, the movement of the
member's dependents to his permanent station or a place near that
station is not authorized at government expense. This allowance may be
paid in addition to FSA I. The purpose of FSA II is to defray
miscellaneous extra expenses incurred for running a split household
caused by the member's military assignment. Sergeant Victoire E.
McDonald, 60 Comp. Gen. 154 (1981).
Thus, for a member to qualify for either type of family separation
allowance, the member's separation from the dependents must be because
transportation of the dependents is not authorized to or near the new
duty station. See Department of Defense Military Pay and Allowances
Entitlements Manual, paragraphs 30303, 30304. That is, the separation
must be due to military requirements, not because a separate home is
maintained for personal reasons, such as where custody of a dependent
child is in someone other than the member. See Sergeant Major Alexander
Titoff, B-211693, July 15, 1983.
In this case, both members have been assigned to unaccompanied tours
of duty in Korea. Sergeant Brower's illegitimate child, whom he claims
as his dependent for basic allowance for quarters purposes, is in the
custody of his or her mother and, thus, is separated from Sergeant
Brower for personal reasons, not because of military requirements.
Therefore, Sergeant Brower's separation from that child would not
qualify him for FSA I or II.
The two other children, one the child of Sergeant Brower's current
marriage and the other a child of his wife's previous marriage, resided
with Sergeant Brower and his wife as a family unit until they were
assigned to Korea. These two children now continue to reside as a
family unit in the same residence with Sergeant Brower's mother. Both
members' separation from these children is the result of military
orders; thus, that requirement for FSA has been met. The wife has
claimed one of the children as her dependent for basic allowance for
quarters and she has been receiving FSA II on the basis of that child.
Presumably she would also receive FSA I on that basis were government
quarters not available for her.
Since Sergeant Brower may not receive FSA on the basis of his
separation from the illegitimate child for which he receives the basic
allowance for quarters, the question arises whether he may claim the
child of his current marriage for that purpose. As previously
indicated, that child already resides with the child of the wife's
former marriage, in a household established when Sergeant Brower and his
wife were assigned to Korea, and no additional expenses were incurred
with regard to establishing an additional residence. When the children
are together as a family unit, such as the two children living together
in this case, they must be considered as a single class of dependents
which may not be divided for the purpose of allowing each of the two
members to claim the same allowance. Cf. Sergeants Mason and Smith, 64
Comp. Gen. 121 (1984), concerning basic allowance or quarters
entitlements in somewhat similar circumstances. Since the wife is
receiving the quarters allowance and FSA based on one of that class, she
is considered as receiving it based on the entire class. Thus, to allow
the husband also to receive FSA based on a member of that class would
be, in effect, paying duplicate allowances for the family unit.
Accordingly, family separation allowance may not be paid to Sergeant
Brower on behalf of the child of his current marriage in these
circumtances.
Acting Comptroller General
of the United States
FOOTNOTES
1/ The request was made by Captain R. E. Knox, USAF, Accounting and
Finance Officer, Headquarters 51st Tactical Fighter Wing (PACAF), APO
San Francisco, California, and was given Department of Defense Military
Pay and Allowance Committee Number DO-AF-1467.
2/ An "unaccompanied" tour of duty is one in which the member is not
entitled to have his or her dependents at the duty station at government
expense.
3/ That, presumably, is the basis upon which Sergeant Brower's wife
in this case receives the allowance at the with-dependent rate based on
the child of her previous marriage who, together with the child of her
present marriage, lives with the husband's mother in the United States.
It is also the basis upon which Sergeant Brower receives the allowance
at the with-dependent rate based on his illegitimate child who is in the
custody of his or her mother.
4/ Applicable regulations are found in Department of Defense Military
Pay and Allowances Manual, paragraphs 30301 et seq.
B-221447
June 1, 1987
DIGEST
Request for reconsideration by Veterans Administration of prior
decisions denying relief of accountable officer for unexplained loss of
patient funds from two-part drop safe is granted where new evidence
suggests that there was uncontrolled access to the bottom portion of the
safe which provides as independent basis for relief.
Mr. Conrad R. Hoffman
Director, Office of Budget
and Finance
Veterans Administration
Dear Mr. Hoffman:
You requested that we reconsider our decision B-221447, November 21,
1986, reaffirming our previous denial for relief, B-221347, April 2,
1986, to Mr. David C. Foulk, Medical Administrative Assistant, for the
loss of $2,000 in cash accepted by Mr. Foulk from a patient upon
admittance to the Veterans Administration Medical Center in San
Francisco. Upon examining the new evidence provided by you, we now
grant relief.
As we explained in our previous decisions, Mr. Foulk is an
accountable officer who has incurred an unexplained loss for which he is
personally liable. We are authorized to grant relief if we can
independently agree with the Veterans Administration (VA) recommendation
that Mr. Foulk be relieved. In order to relieve him from pecuniary
liability, we must have affirmative evidence that the loss was not the
result of his negligence.
The loss of $2,000 was discovered when a patient tendered a receipt
for that amount upon his discharge, and the sum was found missing from
the after-hours safe. The initial submission for relief indicated that
an internal investigation cited procedural irregularities and a
malfunctioning drop safe as possible causes of the unexplained loss of
funds. These possible explanations for the loss were eliminated by Mr.
Foulk's statement that the money had dropped from the demonstrably
unsecure top part of the safe, where eight people including Mr. Foulk
had access, to the secure bottom portion of the safe. The bottom
portion of the safe required that two other individuals, one with a key
and the other with the combination, jointly open that portion of the
drop safe. In the record before us in the earlier submissions, this
joint procedure appeared to ensure accountability for funds in the lower
portion of the safe. As such, we denied relief in our initial decision
explaining that the accountable officer's statement, discounting any
personal negligence without any further evidence explaining the loss,
was not a sufficient basis for relief. In your initial request for
reconsideration you failed to include any new evidence which would
explain the loss and we therefore affirmed the previous denial of
relief.
In your current request, you note that the Director of the Medical
Center requested an outside investigation into the security of the safe
in which the lost funds were placed. You submit a report from the safe
expert consulted which suggests that the bottom portion of the drop
safe, previously assumed secure, could be compromised relatively easily.
Specifically, the expert reported that the bottom portion of the safe
could be opened without a key since the lock was not of a high security
nature. The report concludes, therefore, that the individual with the
bottom safe combination could open the safe without the assistance of
the holder of the key.
This new evidence puts into question a fundamental assumption that
once the funds were dropped into the bottom portion of the safe the
joint opening procedure controlled access and ensured accountability.
We find that there was in fact a lack of accountability for the funds
after they were in the bottom portion of the safe because that portion
could be compromised, permitting uncontrolled access. As such, we are
unable to place responsibility for the loss definitely on Mr. Foulk
because another person had uncontrolled access to the funds after Mr.
Foulk dropped them into the bottom portion of the safe. This provides
an independent basis for relief under our decisions. See B-214080,
March 25, 1986 and B-191440, May 25, 1979.
In light of the new evidence indicating the potential for
uncontrolled access to these funds by another person, we find that Mr.
Foulk cannot be held responsible for the loss. Relief is granted
accordingly.
Sincerely yours,
(Mrs.) Rollee H. Efros
Associate General Counsel
FILE: B-221352.2 DATE: July 9, 1986
MATTER OF: Trend Western Technical Corporation--
Request for Reconsideration
DIGEST:
1. Prior decision upholding contracting agency determination to
exclude six staff positions from Office of Management and Budget
Circular A-76 cost comparison is affirmed where the protester has not
demonstrated that the agency acted improperly or in bad faith in finding
that the six employees will perform governmental functions and will be
retained to perform the functions whether the commercial activity under
study is performed by government employees or contracted out.
2. Argument first presented by protester in request for
reconsideration will not be considered where the protester knew the
basis for the argument no later than the date of its comments on the
agency report responding to the initial protest, more than 3 months
prior to the request for reconsideration. GAO's Bid Protest
Regulations, 4 C.F.R. part 21 (1986), do not permit the piecemeal
presentation of information or arguments and parties that fail to submit
all relevant information for our initial presentation do so at their own
peril.
3. Office of Management and Budget Circular A-76 cost comparison
guidelines concerning the number of contract administrators whose cost
is to be included in the cost of contract performance must be
interpreted in light of the general requirement that cost comparison
studies consider all significant costs both for government and contract
performance.
Trend Western Technical Corporation (Trend Western) requests
reconsideration of our decision in Trend Western Technical Corporation,
B-221352, May 6, 1986, 86-1 C.P.D. P 437, wherein we denied its protest
against the determination made by the Department of the Navy (Navy)
pursuant to Office of Management and Budget (OMB) Circular A-76 that the
United States Marine Corps could provide base operating support at the
Marine Corps Recruit Depot (MCRD) in San Diego, California, at a lower
cost than Trend Western. The facts and legal arguments were set forth
in detail in our original decision and will not be restated here, except
where necessary to resolve this request for reconsideration.
We deny Trend Western's request for reconsideration.
Although in our prior decision we rejected Trend Western's claim of
error as to several elements of the cost comparison, we agreed with the
contentions of the protester and the agency that other aspects of the
cost comparison were in error. Nevertheless, since the net effect of
correcting the errors would only be to reduce the cost advantage of
in-house performance to $400,848, we denied Trend Western's protest
against the determination that MCRD personnel could provide base
operating support at a lower cost than Trend Western. Our decision did
not consider the merits of Trend Western's arguments concerning the
omission of certain partial man-years from the in-house cost estimate
since, even if we were to resolve this issue in favor of the protester,
this would reduce the advantage of in-house performance by no more than
an additional $63,592.
In its request for reconsideration, Trend Western challenges our
decision as it relates to the exclusion of certain staff positions from
the cost comparison and to the calculation of one-time conversion costs
and contract administration costs.
EXCLUDED STAFF POSITIONS
In its initial protest, Trend Western challenged the agency's
determination to exclude six staff positions (the facilities maintenance
officer, assistant maintenance off icer, operations off icer, budget
analyst, budget assistant, and secretary) from the cost comparison on
the basis that the work performed by those staff members involves
governmental-in-nature (GIN) functions related to the determination of
work to be performed and budgeting for it. The effect of this alleged
improper omission of staff positions was to reduce the cost of in-house
performance by $1,129,860.
In our prior decision, we noted that paragraph 7 of OMB Circular
A-76, as revised Aug. 4, 1983, specifically excludes governmental
functions from its coverage. Such functions, which are so intimately
related to the public interest as to mandate performance by government
employees, include activities which require either the exercise of
discretion in applying government authority or the use of value
judgments in making decisions for the government. We recognized that
the projection by an agency of personnel changes resulting from a
conversion is largely a judgmental matter. World Maintenance Services
Inc., B-217536, May 14, 1985, 85-1 C.P.D. P 540; Mercury Consolidated,
Inc., 63 Comp. Gen. 411 (1984), 84-1 C.P.D. P 612. We also indicated
that the determination by an agency of the size of a GIN residual staff
and the number of employees required to generally accomplish the
performance work statement (PWS) is largely a management decision
involving judgmental matters that are inappropriate for our review.
Furthermore, we stated our view that the agency should be free to make
its own management decisions on staffing levels so long as they are not
made fraudulently or in bad faith and so long as the subsequent cost
comparison is done in accordance with the established procedures. Dwain
Fletcher Co., B-219580, Sept. 27, 1985, 85-2 C.P.D. P 348.
We concluded that Trend Western had not shown that the agency acted
improperly or in bad faith in determining that the six staff positions
are responsible for performing GIN functions and that the remaining
staff positions included in the in-house cost estimate are sufficient to
perform the work required under the PWS.
In its request for reconsideration, Trend Western concedes the
"agency's right to withhold governmental functions from the commercial
activity under study" and acknowledges that "the six employees in
question may in fact perform some governmental functions." Although
Trend Western continues to maintain that the six employees are needed to
perform work included in the PWS, it believes that whether they are in
fact needed for such work is beside the point. Rather, according to
Trend Western, the "point of the issue is that the six personnel are in
the MEO most efficient organization with PWS duties specified in the
MEO" and, therefore, they must be included in the in-house cost
estimate.
We do not agree with Trend Western that merely because the six staff
positions were included in the MEO study's organizational chart, the
labor costs associated with those positions had to be charged to the
cost of having government employees do the work in-house. As we pointed
out in our initial decision, although the six employees are included in
the proposed table of organization for the Maintenance Branch, the MEO
study specifically indicates, and the Navy confirms, that they will be
performing GIN functions. We also noted that the Navy specifically
denies that the six employees will be performing work included in the
PWS. Trend Western did not then and has not now demonstrated otherwise.
Accordingly, Trend Western has provided our Office with no additional
information or arguments to show that our earlier decision was factually
or legally erroneous. See 4 C.F.R. Sec. 21.12(a) (1986).
Cost of Material and Labor
The execution of job orders approved under the contract normally will
be delayed pending receipt of any material required to complete the job
and the scheduling of the job. Thus, at the end of each performance
period (the contract is for 1 base year and 4 option years) there will
remain unexecuted job orders for which approval has been received and
the material has been ordered.
The solicitation provides that the material necessary to accomplish
the tasks designated in the PWS, but not listed therein as furnished by
the government, must be provided by the contractor. The solicitation,
however, indicates that at the start of the first contract year the
government will provide to the contractor at no cost to the contractor
the material necessary to complete previously approved job orders
awaiting scheduling. Further, the solicitation warns offerors not to
include in their offers the cost of the labor required to complete the
previously approved job orders since the contractor will be paid
additional money outside the contract for such costs. The solicitation
also requires the contractor to complete within the time specified on
the job order any job order issued during the effective period of the
contract but not completed within that time.
In our prior decision, we found no basis upon which to question the
agency's decision to charge the cost of the labor to complete the job
orders previously approved but not yet executed at the start of the
contract as a cost of contracting out but not as a cost of in-house
performance. The Navy indicated that its MEO, based on the normal
workload for the maintenance function, already includes the labor cost
to perform the job orders previously approved but not yet executed at
the beginning of the contract and that there will be no additional labor
cost to the government for these job orders. Furthermore, the Naval
Audit Service had certified that all staff positions which would perform
the work required by the PWS were fully costed in the government's
in-house cost estimate and the agency appeals board which initially
considered Trend Western's appeal determined that the work required
under the PWS could be accomplished by the personnel costed in the
in-house cost estimate. On the other hand, if the Navy contracts out
the maintenance function, then the government will be required to pay
the contractor approximately $188,730 over and above the contract price
as payment for the additional labor. Accordingly, we were unable to
conclude that the Navy lacked a reasonable basis for determining that a
conversion to contract performance will result in an additional,
one-time conversion cost to the government of approximately $188,730.
In its request for reconsideration, Trend Western argues that the
fact that the contractor "is required by the PWS to complete all job
orders outstanding at the end of the contract... offsets the fact that
the MCRD Marine Corps Recuit Depot would provide all necessary labor
and materials, at no cost to the contractor, to execute all work orders
outstanding at the start of the contract."
We point out, however, that while the PWS provides that the
contractor shall complete any job orders issued during the contract but
not executed within that time, the Supplement to OMB Circular A-76, part
IV, ch. 2, section "D," subsection 1, requires that the personnel costs
for accomplishing the requirements specified in the PWS be included in
the in-house personnel cost estimate.
To the extent that Trend Western is now suggesting that the in-house
cost estimate fails to include the cost of labor required to perform the
job orders approved during the last performance period of the contract
but not yet executed at the end of the contract, i.e., that the in-house
cost estimate does not include the cost of labor included in Trend
Western's bid as work required of the contractor under the PWS and thus
is defective, this newly presented argument is untimely and we will not
consider it. Although Trend Western knew of MCRD's position concerning
the $188,730 conversion cost no later than when it filed its February
19, 1986, comments on the report responding to its initial protest, it
did not raise this argument in rebuttal until it filed its request for
reconsideration on May 27, more than 3 months later. Our regulations,
however, do not permit the piecemeal presentation of information or
arguments to our Office and we have held that parties that fail to
submit all relevant information for our initial consideration do so at
their own peril. See Swan Industries--Request for Reconsideration,
B-218484.2, B-218485.2, May 17, 1985, 85-1 C.P.D. P 569.
To the extent that Trend Western is arguing that the in-house cost
estimate does not in fact already include the cost of labor to perform
job orders not yet completed at the beginning of the contract, Trend
Western has provided no evidence to refute the Navy's contrary
assertion. Accordingly, we have no basis to conclude that our prior
decision was factually or legally in error.
CONTRACT ADMINISTRATION COSTS
In its initial protest, Trend Western contended that the Navy
improperly added the cost of eight contract administrators to Trend
Western's proposal in spite of the fact that the Supplement to OMB
Circular A-76, part IV, ch. 3, table 3-1, provides that only four
contract administrators are to be used on a contract with this size
staff for cost comparison purposes. Trend Western initially raised this
issue with the administrative appeals board and the board concluded that
the number of contract administrators to be charged to Trend Western's
proposal should be reduced to six.
The record shows that MCRD applied to the proper agency authority
(the Commandant of the Marine Corps) for a waiver of the
four-contract-administrator limit. Because the Western Division of the
Naval Facilities Engineering Command--the usual Navy administrators for
this type of contract--is not located near MCRD and, therefore, Navy
Public Works Center personnel would administer the offsite contract
functions in conjunction with MCRD personnel who would administer the
onsite contract functions, a waiver was granted. Essentially, MCRD, the
Commandant of the Marine Corps, and the administrative appeals board all
agreed that this particular contract would require more than four
administrators because the contract requirement encompassed both onsite
and offsite administration.
In these circumstances, we held that the protester's mere
disagreement with contracting officials over the number of
administrators necessary to assure that the contract would be faithfully
executed provided no basis for our Office to overturn the appeals
board's finding that the waiver was at least in part valid.
In its request for reconsideration, Trend Western indicates that " w
e do not contest the number of contract administrators that the Navy may
want or need to assure the faithful performance of the contract, and do
not object to the Public Works Center performing off-site
administration." Instead, Trend Western argues that the waiver of the
fourcontract-administrator limit was improper because, according to
Trend Western, the function under study is the real property maintenance
activity at MCRD and that function is neither technically specific nor
geographically dispersed. In other words, Trend Western contends that
the function under study does not include the offsite contract
administrators at the Public Works Center.
The Supplement to OMB Circular A-76, part IV, ch. 3, section "C,"
recognizes that the actual number of administrators necessary for a
particular contract may vary and, therefore, provides a mechanism by
which the table 3-1 limit may be waived. We believe that the cost
comparison guidelines in this regard must be interpreted in light of the
general requirement that cost comparison studies "consider all
significant costs both for Government and contract performance."
Supplement, part IV, ch. 2, section "A," subsection 1.
Accordingly, we conclude that the "function under study" can
reasonably be viewed as including those contract administrators required
to assure that the contract will be faithfully executed. A contrary
interpretation would result in the exclusion from the cost comparison of
a significant cost of contract performance, the cost of offsite contract
administrators. Since Trend Western challenges neither the necessity
for the additional contract administrators nor the appropriateness of
using offsite contract administrators, we still see no basis for our
Office to overturn the appeals board's finding that the waiver was at
least in part valid.
The request for reconsideration is denied.
Harry R. Van Cleve
General Counsel
Matter of: Heritage Visual Sales, Ltd.--Reconsideration
File: B-221226
Date: July 6, 1987
DIGEST
In response to Heritage Visual Sales' request for reconsideration of
B-221226, February 6, 1986, denying quantum valebant claim for payment
for its distributor's erroneous shipment of an extra set of videotapes,
Defense Logistics Agency investigated to determine whether the
government had physical possession of the tapes or ever received
quantifiable benefit. Inability to locate tapes and Heritage's failure
to show more than receipt of package that may have contained tapes falls
short of requisite showing of benefit to the government necessary for
recovery.
DECISION
M.L. Johnson Enterprises (Johnson) requests reconsideration of our
decision in Heritage Visual Sales, Ltd., B-221226, February 6, 1986, in
which we found that the failure to establish receipt, acceptance and use
of a duplicate set of 26 videotapes of the television series World at
War, erroneously sent to the Defense General Supply Center (DGSC) of the
Defense Logistics Agency, precluded recovery of a claim for $16,770.
For the reasons stated below, we are still unable to allow the claim on
the basis of the present record.
Johnson is the distributor for Heritage and has been assigned the
right to make a claim for the alleged erroneous duplicate shipment of
videotapes. In our previous decision, we concluded that since there was
not a contract, either express or implied-in-fact, for the shipment of a
second set of World at War videotapes, the only basis on which we could
authorize payment would be on a theory of quantum meruit/quantum
valebant, which was explained as follows:
"Where a performance by one party has benefited another, even
in the absence of an enforceable contract between them, equity
requires that the party receiving the benefit should not gain a
windfall at the expense of the performing party. The law thus
implies a promise to pay by the receiving party whatever the goods
or services are reasonably worth. Assuming the procurement would
have been permissible if proper procedures had been followed (or
more accurately in this case, if the Govermment had in fact
intended to procure the items), we can allow payment on a quantum
meruit/ quantum valebant basis only if (1) the Government received
and accepted a benefit, and (2) the contractor acted in good
faith. The amount allowable is measured by the reasonable value
of the benefit received. E.g., 63 Comp. Gen. 579, 584 (1984);
B-207557, July 11, 1983." B-221226, Feb. 6, 1986 at 2.
In his request for reconsideration, Merton L. Johnson, President of
Johnson Enterprises, submitted United Parcel Service (UPS) tracers for
each of three shipments of tapes, including the two shipments for which
payment was made. UPS Tracer #T07493538, dated March 14, 1984, for the
disputed shipment, shows that three parcels, described as containing
tapes and having a declared valuation of $300 were picked up by UPS on
January 20, 1983, and delivered at Dover Air Force Base on January 24,
1983 as evidenced by a receipt signed by a person identified as
"Morris." Although return of the parcels was requested, they were never
returned or paid for.
Upon receipt of the request for reconsideration of our earlier
decision, we sent copies of the materials sent to us by the requester to
the DGSC and asked them to attempt to locate the person who signed for
the incoming shipment and to determine, if possible, whether the
government still had possession of the tapes in question, could
determine what had happened to them or had ever used the tapes or in any
way received a benefit from them.
In a letter dated January 8, 1987, M. Jo Hendley, counsel to the
DGSC, informed us that they were unable to locate the person who had
signed for the shipment. She was able to identify the individual as
Sherri Morris, an employee at the Dover Air Force Base at the time of
the shipment, who was authorized to sign for incoming shipments.
However, Ms. Morris subsequently married and left her position at the
Air Force Base. Despite efforts by the contracting officer to locate
Ms. Morris, which included contacting various offices at the Base, the
DGSC was unable to locate her or even determine her married name.
We have also been provided with a letter dated December 12, 1986 from
the Office of the Library Director, Headquarters, United States Army,
Europe (USAREUR), and Seventh Army, which summarizes the investigations
conducted in West Germany. This letter states in pertinent part:
"4. All contracted materials were shipped to REMO Remote Site
Library Support Center , which until August 1984, was located at
the U.S. Army Printing and Publication Center Europe (USAPPCE) in
Rodelheim, a suburb of Frankfurt. Because HQ V Corps Library
Branch had limited space to receive and break-down shipments for
distribution, the Office of the Library Director allowed their
shipments to be received at REMO with the proviso that they be
responsible for the inventory of their orders.
"5. In March 1984, Mr. James Dorrian, HQ V Corps Librarian, was
queried by DGSC concerning an alleged duplicate shipment from
Heritage. Mr. Dorrian coordinated his search and response with
the staff of the Office of the Library Director and REMO. Our
search confirmed that only those items requisitioned were
received. A duplicate shipment had not been received.
"6. In February 1985, the Office of the Library Director, was
also queried about the matter. As requested, we compared
contracts, distribution documents and inventory records to
physical items on hand. Our investigation yielded the same
results as the HQ V Corps search conducted in March 1984....
"7. Mr. James Dorrian, HQ V Corps Librarian, and Ms. Bonnie
Klein, HQ USAREUR Special Services Librarian, who conducted the
search and investigation for the alleged duplicates are prepared
to sign affidavits stating that a physical search was completed
and only those items requisitioned were received by HQ USAREUR and
HQ V Corps."
The additional materials submitted by the claimant and searches
conducted at our request by DGSC have failed to demonstrate that the
government received any benefit from receipt of the duplicate tapes.
The only change in the fact situation presented in our earlier decision
has been a showing that three packages were sent by the claimant and
received by the government at Dover Air Force Base. Even if it were
established beyond question that these packages contained the missing
tapes, this would not be enough to warrant recovery.
In the request for reconsideration, claimant states:
"The question of whether the Air Force can find the video tapes
at this late date is beside the point. The contractor has no
control over the tapes once they are delivered to the Air Force,
and if they have been lost or stolen after receipt by the Air
Force, that is the Air Force's responsibility."
Regardless of the validity of this statement if we were dealing with
goods supplied under contract or purchase order, it is not true where,
as here, the goods were not ordered by the government but shipped as a
result of the vendor's mistake. Since it is clear that there was no
contract for the duplicate tapes, the only basis for recovery is, as
noted earlier, quantum meruit/quantum valebant. One of the essential
efements of recovery under this theory is benefit to the government,
which is not the same as loss to the claimant. This element is missing
in this case in that there has been no showing that the duplicate tapes
were ever used by the government or that the government in any way
received a benefit from them.
Accordingly, there can be no recovery under this claim, and our prior
decision is affirmed.
Comptroller General
of the United States
Matter of: Verda L. Campbell - Lump-Sum Payment for Annual Leave
File: B-221067
Date: June 1, 1987
DIGEST
Former employee claims backpay equal to amount agency deducted from
her lump-sum leave payment to cover overpayments of pay for periods of
alleged absence without leave. It is within agency's administrative
discretion to place employees who refuse to comely with order to report
to work on leave without pay. In view of the administrative discretion
which exists with respect to determinations concerning absence from
duty, and in the absence of any finding by an appropriate authority of
an unjustified or unwarranted personnel action, her claim is denied.
DECISION
Ms. Verda L. Campbell, a former employee of the United States Army
Forces Command, Fort McPherson, Georgia, asks for a review of the Army's
actions in deducting an amount of money sufficient to cover overpayments
of pay for periods of absence without leave (AWOL) from the lump-sum
payment due her for unused annual leave after her resignation. Ms.
Campbell seeks to recover as backpay the sum of $1,756.80 withheld from
her lump-sum annual leave payment. For the reasons set forth below, we
hold that Ms. Campbell's claim for backpay must be denied.
BACKGROUND
The Army served Ms. Campbell with a letter, dated May 8, 1985,
proposing her removal from Government service and setting forth the
reasons for her proposed removal, including charges for AWOL. Without
objection or grievance, and prior to a decision concerning this proposed
removal, Ms. Campbell submitted her resignation dated June 16, 1985,
with a proposed effective date of July 5, 1985. The Notification of
Personnel Action (SF 50) documenting the resignation included both the
reasons of health offered by Ms. Campbell, and the agency finding that
Ms. Campbell resigned after being notified of a proposed removal action
for alleged excessive AWOL and alleged insubordination.
The Army reports that the retroactive charges for excessive AWOL
resulted from Ms. Campbell's failure to inform her supervisor of a
reduction in the number of course credits for which she was enrolled at
the University of Texas in connection with a government-approved program
for the Fall 1984 semester. This reduction in course load had the
effect of changing Ms. Campbell's student status from full-time to
part-time and reducing her pay entitlement. Ms. Campbell did not
request or receive approval from her supervisor for this significant
deviation in her approved long-term training curriculum and when the
Army subsequently learned of this unauthorized curriculum reduction, Ms.
Campbell's supervisor ordered her back to work at her permanent duty
station. Ms. Campbell refused this order and in fact never reported
back to work prior to her resignation. After receiving Ms. Campbell's
resignation, the Army elected not to proceed with its proposed removal
action and processed her payment for accrued unused annual leave by
offsetting $1,756.80 from her final leave payment to cover salary
overpayments for the periods of AWOL when Ms. Campbell refused to report
back to work.
Although Ms. Campbell had neither objected to nor grieved her
proposed removal by the Army prior to her resignation, she filed a
petition on August 30, 1985, with the Merit Systems Protection Board
(MSPB), appealing the agency's action in issuing a proposal to remove
her from federal service and deducting monies from her lump-sum leaves
payment for the alleged AWOL. The Presiding Official of the MSPB issued
an initial decision, Verda L. Campbell v. Department of the Army, Docket
No. DA-7528510570 (October 31, 1985), which cited the voluntariness of
her resignation and her failure to establish a matter the MSPB would
review as bases for dismissing the appeal for lack of jurisdiction. Ms.
Campbell did not appeal that decision.
OPINION
In bringing her claim to this Office, Ms. Campbell rejects the Army's
"retroactive" change of her status to AWOL during the period of her
failure to comply with the Army's back-to-work order. 1/ However, in the
absence of evidentiary arguments that the Army's actions in her case
constituted an unjustified or unwarranted personnel action within the
meaning of the Back Pay Act, 5 U.S.C. Sec. 5596, Ms. Campbell has failed
to provide a legal basis on which he claim may be paid. In short, she
has failed to meet her burden of proving the Government's liability to
refund the monies claimed by her as required by 4 C.F.R. Part 31 (1986).
Under the Back Pay Act, backpay may be awarded only when the employee
is found by an appropriate authority to have been affected by an
unjustified or unwarranted personnel action. After her resignation Ms.
Campbell was advised by letter dated August 15, 1985, by the Fort
McPherson Finance end Accounting Office concerning her indebtedness to
the Federal Government as a result of the charges to AWOL and the
reasons for the deductions to recoup the monies which she had
erroneously received in salary for those periods of unexcused absence.
The Army found that, based on a review of the case, there wee no basis
to conclude that the deductions made from the lump-sum annual leave
payment to cover the repayment of the period which had been
retroactively charged to AWOL were either unjustified or unwarranted.
In addition, as indicated above, there has been no finding by the Merit
Systems Protection Board that the pay deductions were unjustified or
unwarranted as a result of her appeal.
We have consistently recognized that the placing of an employee in an
AWOL status is a matter of administrative discretion and that it is
legally proper for an administrative officer to take such action when an
employee voluntarily end without authorization absents herself from an
official duty status. See 44 Comp. Gen. 274 (1964); B-159452, April
26, 1976; and Anita M. Blaicher, B-186095, April 26, 1976.
In the present case, therefore, we conclude that Ms. Campbell's
supervisors acted within their authority in retroactively changing her
status to AWOL during the period she failed to comply with the lawful
order to return to work, and the consequent offsetting of her lump-sum
leave payment to reimburse the Government for salary overpayments during
that period. Since Ms. Campbell has offered no evidence to rebut the
propriety of the Army's actions here, and since no appropriate authority
has determined that Ms. Campbell underwent an unjustified or unwarranted
personnel action incident to her claim, she is not entitled to backpay
or leave restoration.
Her claim is disallowed accordingly.
Comptroller General
of the United States
FOOTNOTES
1/ It appears that the Army erroneously carried Ms. Campbell in a
duty status during this period, thereby requiring a retroactive
adjustment to show her status as AWOL.
B-221037
September 15, 1987
Digests
1. Clean Air Act Sec. 172(b), 42 U.S.C. Sec. 7502(b), does not
require Environmental Protection Agency to find "stage II" vapor
recovery controls (installed on gasoline pumps to capture emissions) to
be a reasonably available control measure without making an independent
determination whether that treatment is warranted.
2. Although Environmental Protection Agency's (EPA) study of
technology installed on automobiles to control vapor emissions while
refueling under Sec. 202(a) (6) of Clean Air Act, 42 U.S.C. Sec. 7521
(a) (8), does not preclude EPA from declaring controls installed on gas
pumps (stage II controls) to be reasonably available control measure
(RACM), we cannot say that EPA must now declare stage II as RACM and
require that it be put in place.
3. Clean Air Act, 42 U.S.C. 7502(b) (2), requires Environmental
Protection Agency (EPA) to provide for implementation, by areas which
have not achieved national ambient air quality standard for ozone by
statutory deadline, "of all reasonably available control measures"
(RACM). Despite this language, dictum in Court of Appeals decision
suggests that EPA might have a basis for not requiring adoption of all
RACM, if required standard could be achieved without all. National
Steel Corp. v. Gorsuch, 700 F.2d 314 (8th Cir. 1983).
The Honorable John D. Dingell
Chairman, Subcommittee on Oversight
and Investigations
Committee on Energy and Commerce
House of Representatives
Dear Mr. Chairman:
You have asked us (by copy of a letter to the Environmental
Protection Agency) to comment on the legal arguments in a draft brief.
Pursuant to section 172(b) of the Clean Air Act, 42 U.S.C. Sec. 7502(b),
states which have failed to meet air quality standards by the statutory
deadline must provide for adoption of "all reasonably available control
measures." The brief concludes that stage II vapor recovery controls,
which prevent release into the atmosphere, during automobile refueling,
of benzene and gasoline vapors, by means of equipment installed on
gasoline pumps, are a reasonably available control measure. Therefore,
the brief argues, the Environmental Protection Agency (EPA) must require
use of stage II. An alternative technique, onboard controls, controls
the same pollutants by means of equipment installed in automobiles.
We disagree with the draft brief's assertion that stage II controls
are presumptively a reasonably available control measure (RACM). In our
view, there is no requirement in the law or legislative history for the
EPA to find stage II to be RACM although it is, of course, within its
discretion to do so. Moreover, the draft brief's assertion that
Congress recognized stage II as presumptively RACM is contradicted by
the legislative history of section 172( b), which indicates that the
Congress expected that EPA and the states would make RACM
determinations.
We concur with the draft brief that EPA's ongoing study of onboard
technology, required by the Clean Air Act, does not preclude EPA from
now declaring stage II to be RACM. However, we cannot say that EPA must
now declare stage II a RACM and require that it be put in place. In
this regard, although EPA has submitted to the Office of Management and
Budget, a draft notice of proposed rulemaking in which it concludes that
onboard controls are the best alternative for controlling refueling
emissions, EPA observed that there may be instances where it is feasible
and reasonable for states to implement stage II controls in
nonattainment areas as an interim measure for controlling refueling
emissions while waiting for onboard controls to take effect.
Finally, even if EPA were to consider stage II as RACM, a decision by
the Court of Appeals for the 6th Circuit suggests that EPA might have a
basis for not requiring stage II in revised SIPs if attainment could be
achieved without it.
Our views are discussed more fully in the enclosure.
We hope this will be helpful to you. Under our usual procedure, this
opinion will be available to the public 30 days from its date, unless
you release it sooner.
Sincerely yours,
Comptroller General
of the United States
Enclosure
ENCLOSURE
I. Background
As required by section 110 of the Clean Air Act, 42 U.S.C. Sec.
7410, EPA as established national ambient air quality standards for the
protection of the public health and environment for several pollutants,
including ozone. Each state was required to submit to EPA a state
implementation plan (SIP) describing its program for attainment and
maintenance of the standards.
The original deadline for attainment was 1975. Because many states
failed to meet that deadline, 1977 amendments to the Clean Air Act
permitted states to revise their SIPs to provide for attainment of ozone
standards by December 31, 1982, or, if not possible by 1982 despite
implementation of all reasonably available measures, by December 31,
1987. The 1977 amendments specified that the revised SIPs were, among
other things, to "provide for the implementation of all reasonably
available control measures as expeditiously as practicable". Clean Air
Act, Sec. 172(b) (2), 42 U.S.C. Sec. 7502(b)(2).
The draft brief contends that stage II is a reasonably available
control measure (RACM) and challenges EPA's approval of revised SIPs
that do not provide for stage II controls. The draft brief argues that:
(1) Stage II is presumptively a RACM; (2) Section 172(b) requires the
implementation of all RACM; and (3) EPA's study of onboard technology,
pursuant to a statutory requirement, does not exempt EPA from requiring
stage II as a RACM.
II. Is Stage II "Presumptively" a RACM?
The draft brief, arguing that stage II controls are "presumptively" a
RACM, attempts to demonstrate that EPA's statutory discretion to declare
particular pollution control measures to be RACM is less in the case of
stage II than in the case of other techniques. The brief relies on
legislative history, prior EPA rulemakings, documents, and policy
statements, as well as on two jurisdictions' actual experience with
stage II.
The draft brief never states exactly what is meant by saying that
stage II is presumptively RACM. In a legal sense, a presumption is an
evidentiary rule that shifts the burden of proof or persuasion to the
party denying the facts or proposition at issue. As applied here, the
draft brief uses the concept to mean that the Congress found stage II to
be a RACM, but left it open to EPA or others to rebut that finding.
Under this theory, Congress left EPA with less discretion to decide
whether stage II was RACM in the first instance, than with respect to
all other control measures.
In our view, there is no requirement in the law or legislative
history for EPA to find stage II to be RACM without making an
independent determination whether that treatment is warranted.
Moreover, the brief's assertion that Congress recognized stage II as
presumptively RACM is contradicted by the legislative history of section
172(b), which indicates that Congress expected EPA and the states to
make RACM determinations.
Section 172(b) was primarily derived from the Senate version (S. 252,
95th Cong.) of the 1977 amendments to the Clean Air Act. The Senate
report explained that the bill did not define reasonable measures,
leaving this determination to state and local officials in cooperation
with EPA so as to preserve flexibility and take into account varying
local a regional conditions. S. Rep. No. 127, 95th Cong., 1st Sess. 40
(1977).
During debate on the bill, Senator Muskie, chairman of the
Subcommittee on Environmental Pollution, recognized the respective roles
of EPA and the states in determining reasonable measures: Senator
Muskie stated that, if EPA determines that all reasonable measures have
not been adopted by the state, EPA is required to promulgate additional
reasonable measures. 123 Cong. Rec. 18019 (1977)
As the draft brief notes, the 1977 amendments to the Clean Air Act
included several provisions related to stage II. Section 108(f), 42
U.S.C. Sec. 7408(f), directed EPA to issue information about strategies
to reduce pollutants, including "programs to control vapor emissions
from fuel transfer . . . ." A report of the Senate Committee on
Environment and Public Works said that "it is assumed that most of the
list of strategies will be found" to be RACM. S. Rep. No. 127, 95th
Cong., 1st Sess. 39 (1977). This is at best inconclusive.
Several other sections in the amendments which the draft brief cites
in support of the proposition that stage II is presumptively RACM set
forth conditions, limitations, or standards for any stage II regulations
EPA might issue. Clean Air Act Secs. 202(a)(5), 323, 324, 42 U.S.C.
Secs. 7521 (a) (5), 7624, 7625. Although these provisions would affect
the use of stage II, they would apply, by their terms, only if EPA
promulgated stage II regulations.
Congress may have assumed stage II was RACM, but it left to EPA the
task of making this determination.
The draft brief points out that EPA has previously characterized
stage II as a reasonably available control, explicitly in a 1976
guidance memorandum and by implication in an information document
published in 1978. Stage II was listed as a reasonably available
transportation control measure in an April 1978 EPA workshop, and
examined as a RACM in a February 1979 EPA study. Also, EPA's 1981 Final
Policy on approval of SIPs stated that vapor recovery is RACM.
Moreover, California and the District of Columbia have implemented stage
II.
EPA responds that it does not believe that a legal duty arises from
its previous statements about stage II. EPA also says that it has never
required that a state include stage II as RACM as a condition for SIP
approval, or otherwise defined stage II as RACM in any SIP or other
rulemaking. (Letter from Lee Thomas, EPA Administrator, to Chairman
Dingell, dated January 20, 1987.)
EPA's previous statements about stage II do indeed suggest that
agency officials may have considered stage II to be RACM. However,
since EPA never took final regulatory action concerning stage II, we
believe that EPA is not legally bound by its earlier position.
On the other hand, the brief is correct that stage II is in use in
two jurisdictions and that at one time EPA seemed to have assumed that
stage II was reasonably available. Although EPA has suggested that what
is RACM in one state may not be RACM in another, it has failed to
explain clearly its current position on whether stage II is RACM and, if
not, why not. We do not read the Clean Air Act as in effect removing
from EPA the discretion to decide whether or not stage II is RACM, but
we are sympathetic to the position in the brief that EPA should provide
"fully articulated reasonable grounds" for concluding that stage II is
not RACM.
III. Does EPA's Study of Onboard Controls Exempt EPA From Requiring
Stage II?
The draft brief also contends that section 202(a) (6) of the Clean
Air Act, 42 U.S.C. Sec. 7521 (a) (6), which requires EPA to study
onboard technology to determine its feasibility and desirability in lieu
of stage II, does not excuse EPA from requiring stage II as RACM under
section 172(b). We agree that at EPA's study of onboard technology does
not preclude EPA from now declaring stage II to be RACM in nonattainment
areas.
We find support in the structure of the Clean Air Act itself:
section 172(b) only applies to nonattainment areas and requires
expeditious implementation of "all RACM." Section 202(a) (6) requires
EPA to consider onboard or stage II as a national requirement--that is,
in both attainment and nonattainment areas--and to look at various
factors, including cost.
Moreover, anticipating that EPA might issue stage II regulations,
Congress specifically enacted several provisions, discussed above,
directly related to stage II controls (Clean Air Act Secs. 202(a) (5),
324, and 325). Congress did not condition the applicability of these
provisions on EPA's onboard decisionmaking process. In fact, the House
Report (section 202(a) (6) was derived from the House version of the
1977 Amendments) explicitly stated that
"The Committee's action in providing the new authorities
-concerning onboard technology and vapor recovery fill pipe
standards- . . . is not intended in any way to limit or affect
the authority or duty of the Administrator with respect to the
promulgation of vapor recovery regulations under the Clean Air
Act." H.R. Rep. No. 294, 95th Cong., 1st Sess. 304 (1977).
We therefore disagree with EPA's position, stated in its January 20
letter, that to require stage II as a RACM would render section 202(a)
(8) a nullity. However, as we explained in answer to the argument that
stage II is RACM, we cannot say that EPA must now declare stage II as
RACM and require that it be put in place. In fact, as we stated in our
report to you (GAO/RCED 87-151, August 7, 1987), EPA has submitted a
draft notice of proposed rulemaking to the Office of Management and
Budget in which EPA concludes that onboard controls are the best
alternative for controlling refueling emissions and also observes that
there may be instances where it is feasible and reasonable for states to
implement stage II controls in nonattainment areas as an interim measure
for controlling refueling emissions while waiting for onboard controls
to take effect.
IV. Does Section 172(b) Require All RACM?
The draft brief further points out that section 172(b) requires that
SIPs for nonattainment areas provide for adoption of all RACM, and
concludes that EPA has no discretion to allow fewer than all measures.
Thus, in this view, even if a nonattainment area can reach attainment by
1987 without stage II, the nonattainment area is foreclosed from
implementing fewer than all reasonably available measures, and therefore
must implement stage II (assuming that stage II is RACM).
EPA has not directly responded to this argument. Since EPA has not
yet decided whether stage II is RACM, the brief's argument about the
interpretation of "all" is premature. However, in one case (admittedly
under somewhat different statutory language), a federal appeals court
suggested tha if the required air quality could be achieved with fewer
than all reasonably available measures, EPA might permit that result,
even though adoption of such measures was "mandatory."
In National Steel Corp., Great Lakes Steel Div. v. Gorsuch, 700 F.2d
314 (6th Cir. 1983), a case concerning a requirement in section 172(b)
(3) for SIPs in nonattainment areas to require the adoption, "at a
minimum, of reasonably available control technology," or RACT, EPA
offered to approve state plans which could demonstrate attainment as
expeditiously as practicable without requiring RACT--an administrative
exemption to an otherwise mandatory requirement under section 172(b)
(3). The court ruled that RACT is mandatory under section 172(b) (3),
but also in effect accepted EPA's proposed alternative, saying that the
state "could have avoided RACT requirements . . . by otherwise
demonstrating attainment as expeditiously as practicable." 700 F.2d at
322, 324. In terms of the overriding purpose of the statute--the
attainment of national ambient air quality standards--this result makes
sense, even though the literal wording of the law makes it somewhat
problematical.
Under the draft brief's reasoning, EPA would have to require SIPs to
contain each and every reasonably available pollution control method,
even if some were duplicative of others. However, as National Steel
illustrates, a court might conclude that despite the requirement of
section 172 for all RACM, something less than that might be acceptable
if attainment were still achieved.
Matter of: Flight Resources, Inc.--Reconsideration
File: B-220680.4
Date: July 15, 1986
DIGEST
Request for reconsideration of prior decision is denied where the
request contains no statement of the facts and legal grounds warranting
reversal or modification but merely restates arguments made by the
protester and considered previously by the General Accounting Office.
DECISION
Flight Resources, Inc. requests reconsideration of our dismissal of
its protest regarding solicitation No. DTFA15-85-R-10011, issued by the
Federal Aviation Administration (FAA), Department of Transportation, to
obtain proposals for the operation of a general aviation facility at
Washington National Airport. Flight Resources had protested that the
FAA had changed requirements during the Step 1 negotiations of this
two-step sealed bidding procurement to the extent that a new
solicitation should have been issued to all potential offerors,
including Flight Resources whose late Step 1 proposal had been rejected.
We dismissed the protest on the basis that Flight Resources was not an
interested party entitled to protest changes to the terms and conditions
that occurred during or after proposal evaluation when those issues
affected only the parties to the competition. Flight Resources, Inc.,
B-220680.3, June 3, 1986, 65 Comp. Gen. , 86-1 CPD P.
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. The W.H. Smith Hardware Co.--Reconsideration,
B-219327.5, Oct. 30, 1985, 85-2 CPD P 488.
Flight Resources presents no new facts or arguments to indicate error
in our previous decision. The request merely restates arguments made by
Flight Resources and previously considered by our Office. Thus, while
the request for reconsideration clearly reflects Flight Resources'
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
FILE: B-220592 DATE: October 4, 1985
MATTER OF: JRR Construction Company, Inc.
DIGEST:
Contracting officer's award of a contract to the second low
bidder following an initial determination by the Small Business
Administration that the low bidder is other than small, without
waiting for the result of an appeal to the SBA's Off ice of
Hearings and Appeals, is proper and does not constitute an abuse
of the contracting officer's discretion.
JRR Construction Company, Inc. protests the award of a contract to
Tempo West, Inc. under invitation for bids (IFB) No. DACA2l-85-B-0007,
issued as a small business set-aside by the United States Army Corps of
Engineers. The procurement was for the construction of a troop barracks
at Fort Bragg, North Carolina. We dismiss the protest.
JRR, the low bidder, contends that the Corps should not have awarded
the contract to Tempo, the second low bidder, because a final ruling as
to JRR's size status has not been issued by the Small Business
Administration's (SBA) Office of Hearings and Appeals. JRR is appealing
a decision by the SBA's Chicago Regional Office that the firm is other
than a small business concern.
JRR asserts that the contracting officer acted improperly in making
the September 26, 1985 award for reasons of urgency in order to protect
the public interest, as evidenced by the fact that the contracting
officer asked JRR after the Chicago Regional Office rendered its initial
decision on September 10 to extend its bid through October 31, thus
apparently allowing additional time for resolution of JRR's appeal. JRR
contends that the award constitutes an abuse of discretion and is
clearly not in the public interest given that JRR's bid is some $410,000
lower than Tempo's.
Under the Federal Acquisition Regulation (FAR), 48 C.F.R. Sec.
19.302(h)(1) (1984), when a size status protest has been f iled, a
contracting of f icer may not make an award until the SBA Regional
Administrator has issued a determination or until 10 working days after
SBA's receipt of the protest, whichever occurs first. Although the FAR
provides for an appeal from an initial SBA size determination by any
concern that has been adversely affected, 48 C.F.R. Sec. 19.302(i), once
an initial determination has been issued, there is no requirement that
the contracting officer then continue to withhold award pending a final
ruling on an appeal from that determination. H. Angelo & Co., Inc.,
B-218573, May 9, 1985, 85-1 C.P.D. P 519. Similarly, although to make
an award before the initial 10 days expire the contracting officer must
make a finding that the award is necessary to protect the public
interest, 48 C.F.R. Sec. 19.302(h)(1), supra, there is no such
requirement for justifying an award during the appeal period. H. Angelo
& Co., Inc., B-218573, supra, at 2. Therefore, since the contracting
officer's actions here were consistent with the FAR, there is no legal
basis for asserting that the award to Tempo was improper or otherwise
constituted an abuse of the contracting officer's discretion.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
Matter of: Economic Development Administration--Claim for
Expenditures by Town of Franklin, Connecticut
File: B-220527
Date: August 11, 1987
DIGEST
The First Selectman of the Town of Franklin, Connecticut (Town),
accepted a fiscal year 1983 Economic Development Administration (EDA)
grant for the Town. However, unknown to EDA, the First Selectman did
not have the authority to accept the grant, so that there was no valid
grant from EDA in fiscal year 1983. See B-220527, December 16, 1985.
The Town expended funds for the project in fiscal year 1984 after the
receipt of an EDA letter extending the period for project construction.
By use of the doctrine of equitable estoppel the Town seeks to prevent
EDA from denying that there was a valid grant. Since the Town knew that
its official lacked the authority to accept the grant, its actions, and
not any affirmative misconduct on the part of EDA, were responsible for
the expenditure of funds for the project. Therefore, the doctrine of
equitable estoppel is not applicable to this case. Also, there was no
new grant offer, renewal, or ratification of the prior year's offer, in
fiscal year 1984. Accordingly, the Town may not recover its expenses
from EDA.
DECISION
The attorney for the Town of Franklin, Connecticut (Town) has
requested that we consider the Town's claim for reimbursement of
expenditures which are said to have been made in reliance upon the
promise of funds from the Economic Development Administration (EDA) of
the Department of Commerce.
In our decision B-220527, December 16, 1985, we concluded that EDA
did not obligate fiscal year 1983 funds when it made an offer to the
Town that was accepted by the First Selectman who lacked the authority
to accept the grant offer. Accordingly, there was no valid grant. The
Town's attorney now contends that a claim for expenditures of
$101,670.95 should be honored because of a promissory estoppel against
EDA based on the Town's reasonable detrimental reliance on EDA's promise
to make the grant. We disagree.
We have contacted the Department of Commerce for its comments on this
issue as well as for additional information relating to this matter. We
received a May 19, 1986, memorandum prepared by the Chief, Contract Law
Division of the Department's Office of Assistant General Counsel for
Finance and Litigation, a memorandum from the Assistant General Counsel
for Finance and Litigation, dated July 21, 1986, and a letter from the
Assistant Secretary for Economic Development, dated December 1, 1986.
Pursuant to our request the Town's attorney on October 9, 1986, sent
copies of correspondence between EDA and the Town. By letter dated
March 16, 1987, the attorney supplied receipts supporting a claim for a
total of $101,670.95. Also included was a copy of correspondence
between the Chairman of the Concerned Citizens of Franklin and the
Assistant Secretary.
BACKGROUND
On September 29, 1983, an "Offer of Grant" was made by EDA to the
Town for industrial park improvements. The offer provided that
acceptance was to be made prior to September 30, 1983. The First
Selectman of the Town accepted the of fer on September 30, 1983, and the
Assistant Town Clerk certified the First Selectman's authority to accept
the offer. However, notwithstanding the certification, the First
Selectman did not have acceptance authority.
On November 1, 1983, the Town held a referendum on the Industrial
Park Project. In his letter of December 7, 1983, the Chairman of the
Concerned Citizens of Franklin informed the Assistant Secretary for
Economic Development that the question voted on was "To Accept the
Proposed Industrial Park Project" and that the proposal was defeated.
The Chairman included copies of several documents to this effect,
including the explanatory text supplied to voters which explained that
the issue was "To Accept the Federal Economic Development Agency Grant
for the Industrial Park Project." In his January 3, 1984, reply to the
Chairman, the Assistant Secretary stated that the Town had not notified
EDA that the offer of grant had been rejected, and indicated that the
information would be forwarded to the Philadelphia Regional Office.
The Inspector General described what happened subsequently, as
follows:
"On February 9, 1984, the Chairman of the Concerned Citizens
wrote to EDA again, advising it that the Town planned to hold a
second referendumon this issue. The letter states, ". . . The
plan that the Government granted is now being changed, and we urge
you to scrutinize this entire package . . . ."
"In response to this letter, EDA's Philadelphia Regional
Counsel issued an opinion to program staff on February 15, 1984.
The opinion recommended that the project be deobligated if the
second referendum was rejected by the Town's citizens. This
opinion also urged program officials "... to make sure that the
project has not changed . . . ." The second referendum on this
issue was held on February 16, 1984. EDA's offer of grant was
rejected again. On February 27, 1984, EDA was notified in a
letter from the Chairman of the Concerned Citizens that the
Industrial Park Project had been voted down a second time."
Subsequently, on March 8, 1984, the EDA Regional Director wrote to
the First Selectman. He noted that although construction was to start
180 days after EDA approval on September 29, 1983, no final plans and
specifications had been received. The letter asked for information as
to the Town's intentions respecting the project. The Regional Director
indicated that reasonable extensions are considered and usually granted
to assist a grantee to meet the requirements and conditions of a grant.
On March 19, 1984, the First Selectman responded to the Regional
Director. She said that because of alleged irregularities in the last
referendum a new referendum would "decide the future of this project.
If negative I will send a letter recommending the Grant be recaptured by
the U.S. Dept. of Commerce."
On March 29, 1984, the Regional Director wrote to the First
Selectman. Based on the prior letter and a conference call, it was
agreed that if the vote were negative the Town would request termination
of the grant. If positive, a formal request for an extension of time
would be submitted for the Assistant Secretary's approval. The Chairman
of the Franklin Economic Development Commission wrote to the Regional
Director on April 12, 1984. He said that the referendum held on April
10, 1984, authorized acceptance of the EDA grant and authorized the
Town's consultant to begin design work. The letter requested an
extension of 180 days for the start of construction with work beginning
on September 27, 1984. The Chairman stated as follows: "The recent
organizational changes in the community resulted in delaying the Town's
process of accepting the grant."
On June 1, 1984, the Regional Director replied to the Chairman of the
Economic Development Commission. The request for approval of a time
schedule was granted provided construction was started no later than
September 24, 1984.
In July 1984, an audit conducted by the Department of Commerce's
Office of Inspector General questioned the validity of the grant
acceptance. According to the Town's attorney the Town has spent
$101,670.95, primarily for engineering studies. No grant funds have
been received from EDA in payment for these expenses.
In an August 15, 1984, letter to the First Selectman, the Town's
attorney opined that EDA is estopped from denying that there was a valid
acceptance of the grant in fiscal year 1983. He noted that many
referendums had been had on the grant, to the knowledge of EDA. He
pointed out the Regional Counsel's opinion of February 15, 1984, had not
mentioned the lack of a valid acceptance by the Town in fiscal year
1983. Regarding the EDA letters of March 8 and 29, 1984, and the letter
granting the 180-day extension, the attorney noted that at no time did
EDA indicate that there was any problem concerning a valid acceptance of
the grant offer during the 1983 fiscal year.
In response to our request for information, the Assistant Secretary
for Economic Development stated as follows:
"The exchange of information in the correspondence between
EDA's Philadelphia Regional Director and the Town's First
Selectman is consistent with EDA's mistaken impression that funds
for the project had been properly obligated during fiscal year
1983 by the Town's acceptance on September 29, 1983.... EDA's
Regional Director believed that the grant to the Town was a valid
fiscal year 1983 obligation, and the inquiry in fiscal year 1984
was routine postapproval monitoring directed to finding out why no
progress was being made in carrying out the project.
"EDA believed that the referenda conducted by the Town related
to (1) how the details of the project were to be accomplished, or
(2) if the project was to be undertaken at all -- not to the
question of whether the Town would accept the grant. EDA became
aware of that issue only when it was raised by the Department's
Office of the Inspector General."
ANALYSIS
Equitable estoppel is the doctrine by which a person may be precluded
by his act or conduct, or silence when it is his duty to speak, from
asserting a right which he otherwise would have had. Black's Law
Dictionary, 483 (5th ed. 1979). To apply this doctrine against the
government four requirements must be met:
1. The government must know the facts.
2. The government must intend that its conduct shall be acted
on, or must so act that the party asserting estoppel has a right
to believe it is so intended.
3. The party asserting estoppel must have been ignorant of the
facts.
4. The party asserting estoppel must reasonably rely on the
other's conduct to its substantial injury. T.R.W., Inc. v. FTC,
infra, 950, 951.
Based on similar requirements that were set forth in United States v.
Georgia-Pacific Co., 421 F.2d 92 (9th Cir. 1970), we held that the
government was estopped from denying the existence of a contract between
itself and a bidder, because of the procuring activity's misfeasance.
53 Comp. Gen. 502 (1974). Under TRW, Inc. v. F.T.C., 647 F.2d 942 (9th
Cir. 1981.) and cases cited therein, the government action upon which
estoppel is based must amount to affirmative misconduct, which is
something more than mere negligence.
We now consider the elements of equitable estoppel, all of which are
necessary to sustain the contention that the United States is prevented
from denying that there was a valid grant made to the Town in fiscal
year 1983.
First, did EDA know that the First Selectman did not have the
authority to sign the grant agreement? The information of record shows
that the issue of her authority was first raised in the Inspector
General's audit in July 1984. The Assistant Secretary for Economic
Development states that EDA became aware of this issue only when it was
raised by the audit. However, the Chairman of the Concerned Citizens of
Franklin's letter to him dated December 7, 1983, indicated that the
November 1 referendum, which was defeated, was for the purpose of
accepting the grant. Other correspondence between the Department and
the Town, as well as correspondence from the Chairman of the Concerned
Citizens, received prior to July 1984, was not clear as to the reason
for the additional referenda. We are not aware of a statement to the
Department that the First Selectman's signing of the grant agreement was
unauthorized and that the Assistant Town Clerk's certification of her
authority was incorrect.
The December 7, 1983, letter from the citizens group to the Assistant
Secretary should have caused EDA to investigate the necessity for
acceptance by the Town of a grant thought to have been already accepted
by it on September 30, 1983. The Assistant General Counsel for Finance
and Litigation has stated that notice of expenditures was first received
in a letter of December 11, 1984, from the First Selectman to the
Secretary of Commerce. However, EDA's failure to inquire so as to learn
of the true circumstances is not so egregious as to amount to
affirmative misconduct so that the government would be held to know of
the Town's lack of authority to accept the grant in fiscal year 1983.
Second, did EDA intend that the Town would proceed with the grant
following receipt of the June 1, 1984, letter from the Regional
Director? This letter granted an extension of time for project
completion provided construction was begun no later than September 24,
1984. EDA clearly intended the Town to rely on the letter in beginning
construction. However, EDA believed that the grant was valid.
Third, was the Town of Franklin ignorant of the facts? The First
Selectman knew of her lack of authority and that the Assistant Town
Clerk's certification was wrong. This information was known by the
party seeking estoppel and not known by the party against whom the
doctrine is asserted.
Fourth, did the Town rely on EDA's conduct to its detriment? The
Town relied on the EDA letter of June 1, 1984, which granted an
extension of time for project completion, and procured services in
furtherance of the project. However, EDA in issuing the letter had
relied on the Town's certification that its grant acceptance of
September 30, 1983, was valid.
In dealing with this matter we have also considered if the fiscal
year 1983 EDA grant offer might have been renewed or ratified in the
following fiscal year or a new offer made. The Assistant General
Counsel has told us that EDA had both program authority and funds under
which a grant might have been made in fiscal year 1984. However, the
Assistant Secretary has stated that EDA did not intend to make a grant
to the Town of Franklin in fiscal year 1984 since the agency was under
the mistaken impression that the fiscal year 1983 grant offer had been
validly accepted. The Department of Commerce's correspondence does not
by its terms make a new grant offer, nor does it expressly renew or
ratify the 1983 offer. Neither has the Town indicated that it received
a new, revised, or ratified offer in 1984. Accordingly, we find that
there was no valid grant from EDA to the Town of Franklin in fiscal year
1984.
CONCLUSION
In summary, it appears to us that the Town's expenditure of
$101,670.95 for grant purposes, although there was no valid grant,
resulted primarily from the conduct of its own officials. The First
Selectman signed the grant agreement without authority to do so, and the
Assistant Town Clerk incorrectly certified to the First Selectman's
authority. It was the acts of the Town officials and not EDA which
prevented a valid grant award. EDA did not withhold knowledge of these
acts from the Town.
All of the requirements necessary to estop the government have not
been established. Therefore, in the case before us we are of the
opinion that the doctrine of equitable estoppel should not be applied
against the government, and that it is not prevented from denying the
existence of an industrial park development grant from EDA to the Town
of Franklin in fiscal year 1983. Also, as there was no new grant offer,
renewal, or ratification of the prior year's offer, in fiscal year 1984,
we think that the Town of Franklin's claim for project expenses should
be denied.
Comptroller General
of the United States
FILE: B-220486 DATE: October 4, 1985
MATTER OF: Pan Am Aero
DIGEST:
1. GAO will not review a challenge to a contracting agency's
aff irmative responsibility determination where there is no
allegation or showing that the contracting officials acted
fraudulently or in bad faith, or that the solicitation contained
definitive responsibility criteria that have not been met.
2. Protester's contention that the contracting agency was
required by procurement regulations to find the prospective
awardee non-responsible based on unsatisfactory performance on a
prior contract is without merit since poor prior performance does
not automatically render a firm ineligible for future contracts.
Pan Am Aero protests the award of a contract to Oscar Pollack
Associates under invitation for bids No. N52470-85-B-4014, issued by
the Navy for grounds maintenance services in the Panama Canal Zone. Pan
Am challenges the Navy's determination that the awardee is capable of
performing the contract. We dismiss the protest.
Because a contracting officer's determination that a bidder is
capable of performing a contract is based in large part on subjective
judgment, our Office will not consider a protest challenging such an aff
irmative responsibility determination unless there is a showing either
that the determination may have been made fraudulently or in bad faith
by contracting officials, or that definitive responsibility criteria in
the solicitation may not have been met. Tudor Inns of America, Inc.,
B-218944, June 11, 1985, 85-1 C.P.D. P 671; Bid Protest Regulations, 4
C.F.R. Sec. 21.3( f) (5) (1985). Here, the basis of Pan Am's protest is
that the Navy was required to find the awardee nonresponsible based on
(1) the fact that the Army had terminated for default a prior contract
for grounds maintenance in the Canal Zone awarded to a firm in which the
awardee was a key employee; and (2) an alleged misrepresentation by the
awardee as to the reasons for terminating that contract. Pan Am does
not argue that either exception under which we will consider protests
concerning affirmative responsibility determinations applies here.
Instead, Pan Am asserts that procurement regulations require a
nonresponsibility determination in this case.
Pan Am relies on the Federal Acquisition Regulation (FAR), Sec. 9.
104-3 and the Navy Acquisition Regulation Supplement Sec. 9.105-290 as
support for its contention that the termination for default of the prior
contract required that the awardee be found nonresponsible. FAR, Sec.
9. 104-3( c) recognizes that the contracting officer is to consider
deficiencies in past performance when making a responsibility
determination, and provides that a prospective awardee that recently has
been "seriously deficient" in contract performance will be presumed to
be nonresponsible unless the contracting officer finds that the
circumstances were beyond the awardee's control or that corrective
action has been taken. Similarly, section 9.105-290(a) of the Navy's
supplemental regulations provides that unsatisfactory past performance
"shall be sufficient to make a decision of nonresponsibility." In Pan
Am's view, these regulations require a finding of nonresponsibility
whenever prior unsatisfactory performance is shown.
Unsatisfactory past performance does not automatically render a firm
inelligible for future contract awards, however; rather, performance
history is only one of several factors an agency should take into
account when considering a prospective contractor's responsibility. See
Turbine Engine Services--Request for Reconsideration, B-218477.2, June
25, 1985, 64 Comp. Gen. , 85-1 C.P.D. P 721; FAR, Sec. 9.104-1.
Contrary to Pan Am's interpretation, there is no basis in the FAR or the
Navy's regulations for automatically finding a prospective awardee
nonresponsible on the basis of past performance, without also
considering the awardee's current capability to perform the contract.
Thus, even assuming that the awardee in this case can be held
accountable for the poor performance of the prior contractor, the Navy
was not required as a result to find the awardee nonresponsible for
purposes of the current contract.
With respect to the Pan Am's second contention, that the awardee
misrepresented to the Navy that the sole basis for the termination of
the prior contract was the contractor's failure to provide a performance
bond, when in fact the contract was terminated for unsatisfactory
performance as well, so that the awardee should be found lacking
business integrity, and, therefore, nonresponsible, Pan Am of fers no
evidence that such a misrepresentation was made. In addition, we see no
reason to assume that the Navy accepted the awardee's characterization
of the basis for termination of the prior contract, since full
documentation of the termination decision was available in the Army's
files also located in the Canal Zone. In any event, the contracting
officer's determination that the awardee is capable of performing the
current contract, despite the prior termination for default, is an af
firmative responsibility determination that will not be reviewed except
in circumstances not alleged or in any way evident in this case.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
Matter of: Federal Electric Corporation
File: B-220418.2
Date: April 1, 1987
DIGEST
Protest from an offeror which is not in line for award if the protest
is upheld is dismissed because the protester does not have the requisite
direct economic interest required to be considered an interested party
under GAO Bid Protest Regulations.
DECISION
Federal Electric Corporation (FEC), protests the cancellation of
request for proposals (RFP) No. DABT51-84-R-0034, issued by the
Department of the Army for staffing, operation and administration of the
Directorate of Engineering and Housing at Fort Bliss, Texas. The RFP
implements Office of Management and Budget (OMB) Circular A-76 and the
RFP is used to determine whether the services should be provided by a
contractor or by government personnel. The decision is based on a cost
comparison between the current government inhouse ooerations and the
contractor selected under the RFP in accordance with the RFP selection
criteria.
We dismiss the protest based on the contracting activity's report, in
accordance with 4 C.F.R. Sec. 21.3(f) (1988), which provides that when
the propriety of a dismissal becomes clear only after information is
provided by the contracting agency we will dismiss the protest at that
time.
FEC claims that the cancellation decision is unreasonable and seeks
reinstatement of the RFP. Our Bid Protest Regulations, 4 C.F.R. Sec.
21.0(a) and 21.1(a) (1986), require that a party be "interested" before
we will consider its protest. We have held that a protester is not
interested where it would not be in line for award if its protest were
upheld. C.A. Parshall, Inc., B-220650; B-220555.2, Jan. 14, 1986, 86-1
C.P.D. P 38. Here, the Army report indicates that only the highest
ranked offeror would compete in the cost comparison and that FEC is 6th
in line for award after evaluations. Thus, even if its protest was
sustained and the RFP reinstated, FEC still would not be eligible for
award. Accordingly, FEC is not an interested party to challenge the
Army's decision to cancel the RFP. See Gracon Corp., B-219663, Oct. 22,
1985, 85-2 C.P.D. P 437.
The protester has also reguested proposal 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, supra.
Robert M. Strong
Deputy Associate General Counsel
FILE: B-220392.4 DATE: July 8, 1986
MATTER OF: Engineered Air Systems, Inc.
DIGEST:
1. General Accounting Office denies a protest that the contracting
agency failed to compare the cost of a multiyear bid with the cost of a
bid for the first program year requirements, as required by applicable
procurement regulations, when the record estahlishes that the agency
conducted such a comparison in accord with the terms of applicable
regulations.
2. Protest that procuring agency improperly failed to consider
inflation in comparing the costs of a multiyear bid with the estimated
cost of procuring the same items in independent annual acquisitions is
untimely, where the cost comparison method was specified in the
solicitation and in applicable regulations, and the protest was not
filed before bid opening.
Engineered Air Systems, Inc., protests the award of a contract by the
United States Army Armament, Munitions, and Chemical Command, Rock
Island, Illinois, to Hobart Rrothers Company under invitation for bids
(IFB) No. DAAA09-85-B0787. Engineered Air Systems contends that its
multiyear bid to provide trailer-mounted welding shops offers a lower
overall evaluated cost to the government than does Hobart's single-year
bid.
We deny the protest in part and dismiss it in part.
The Army issued the solicitation on June 21, 1985, for the 5-year
acquisition of 1,361 welding shops, or, in the alternative, a
single-year acquisition of 237 welding shops. 1/ The RFP also sought
bids for a single-year acguisition of 91 welding machines. Six firms
suhmitted bids for both the single-year and multiyear alternatives.
The agency determined that Hobart had submitted the lowest bid for
the single-year alternative, an evaluated unit price of $21,520.60,
while the protester had submitted the lowest bid for all 5 years, an
evaluated unit price of $22,304.99. The Army concluded that the cost to
the government would be lower if it obtained needed welding shops in
five successive independent acquisitions rather than on a multiyear
basis. On March 24, the agency awarded a contract to Hobart for welding
shops and welding machines on a single-year basis; it has suspended
performance pending our decision on the protest.
Engineered Air Systems first argues that the Army failed to compare
the cost of its multiyear bid with the cost of Hobart's single-year hid
as required by the Federal Acquisition Regulation (FAR). In multiyear
procurements, agencies are generally required to compare the lowest
overall evaluated cost of buying the total requirement under a multiyear
acquisition with the lowest overall evaluated cost of buying the total
reguirement in successive independent acquisitions. FAR, 48 C.F.R. Sec.
17.103(a) (1984). The cost comparison method to be used by the Army is
set forth in the solicitation (page 52 of the IFB) and the FAR, 48
C.F.R. Sec. 17. 103(e). The prescribed cost comparison requires that
the lowest evaluated unit price for the first program year requirement
be multiplied hy the total number of units required by the multiyear
alternative. Administrative costs are then added to this numher and the
result compared with the lowest offer on the multiyear alternative.
We find that, in evaluating Hobart's bid for comparison purposes, the
Army multiplied the firm's unit price for the first program year times
the total number of welding shops required during the 5-year period and
added estimated administrative costs for quality assurance and
engineering that would he incurred if the Army's requirements were met
through annual acquisitions. This amount, considered to be the cost of
purchasing 1,361 welding shops in five separate acquisitions, was added
to Hobart's bid for welding machines. The agency then compared this
total, $29,914,862.87, to the protester's total bid of $31,0180,742.55.
Thus, the Army conducted a cost comparison in accord with FAR, 48 C.F.R.
Sec. 17.103(e), and the terms of the IFB, and we deny this ground of
Engineered Air Systems' protest.
The protester also contends that any comparison conducted by the Army
that failed to include a factor for inflation is improper. Engineered
Air Systems argues that it is not reasonable to assume that the Army can
separately purchase welding shops in the second through fifth orogram
years for the same price as in the first. If only a minimal factor for
anticipated inflation is included in the evaluation, according to
Engineered Air Systems, its multiyear bid would be low.
The solicitation and regulation are not ambiguous regarding how Army
intended to compare the multiyear and single-year acquisition
alternatives. There is no provision for including estimated inflation
in the comparison. Engineered Air Systems' basis for protest--that the
comparison method set forth in the solicitation is unreasonable--was
apparent prior to hid opening. Our Bid Protest Regulations require that
protests based upon alleged improprieties in a solicitation which are
apparent prior to bid opening must he filed prior to bid opening. 4
C.F.R. Sec. 21.2(a)(1)(1986).
While we dismiss this ground of protest as untimely, we believe that
a oresent value analvsis, which adjusts for inflation and the costs of
borrowing associated with different rates of expenditures, is necessary
to compare the costs of a single multiyear contract with the estimated
cost of successive annual acquisitions. See GAO, Analysis of DOD's
Fiscal Year 1985 Multiyear Procurement Candidates at 9-10 (NSIAD-85-9,
Oct. 25, 1984). We are recommending to the FAR Secretariat that it
consider revising 48 C.F.R. Sec. 17.103(e) to require the use of a
present value analysis in cost evaluations in multiyear procurements.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
FOOTNOTES
1/ Welding shops include a welding machine and all other equipment
usually required for welding operations, from leather aprons and goggles
to cylinders of acetylene gas and cutting torches. The welding machine
represents the majority of the cost of the welding shop, and its design
determines the design of much of the auxiliary equipment in the shop.
FILE: B-22032100 DATE: October 2, 1985
MATTER OF: New Hampshire Ball Bearings, Inc.
DIGEST:
Protest requesting that price modification submitted several
weeks after closing date under oral request for quotations be
considered for award is dismissed since procuring agency's
expressed intent (in letter requesting best and final quotations)
was to consider only quotations submitted before closing date.
New Hampshire Ball Bearings, Inc., protests the award of an Army
contract to another concern for 21,704 bearings under oral request for
quotations (RFQ) No. 85-Q-H051 issued by the Army's Aviation Systems
Command, St. Louis, Missouri. The protester, who was not the low quoter
under the RFQ, argues that it should now be permitted to lower its
quotation -- several weeks after the July 31, 1985, closing date for the
RFQ--in order to be eligible for award of part of the requirement.
We dismiss the protest.
The Army's July 16, 1985, request to the protester for best and final
quotations stated that "all quotes must be received by (July 31, 1985)."
We consider this statement as expressing the Army's intent to consider
only those quotations submitted prior to the closing date. This
approach is permissible. Cf. Lanier Business Products, B-198913,
September 12, 1980, 80-2 C.P.D. P 194, where we said:
"We find no 'late quotations' provision in the RFQ which would
permit quoters to submit amended quotations after the closind
date;, nor are we aware of any requirement mandating the inclusion
of a late quotations provision here. In essence, the RFQ
contained the VA's implied promise to consider only those
quotations submitted prior to the closing date. In our view, of
ferors were not entitled to amend quotations after the closing
date since that would permit competition on "an unequal basis.
Cf. Ikard Manufacturing Company, B-192308, October 25, 1978, 78-2
C.P.D. 301, where we took no objection to the rejection of a late
quotation, in part because the RFQ did not contain a late
quotation provision."
Protest dismissed.
Robert M. Strong
Deputy Associate
General Counsel
FILE: B-220317 DATE: October 1, 1985
MATTER OF: Edsal Machine Products, Inc.
DIGEST:
A bid submitted in response to a total small business set-aside
that failed to indicate the bidder's intention to furnish supplies
manufactured by small business firms was properly rejected as
nonresponsive because the bidder would be free to furnish supplies
manufactured by large business firms and thus defeat the purpose
of the set-aside. The bidder's blanket statement in its bid that
it would comply with all terms and conditions of the IFB does not
make the bid responsive.
Edsal Macnine Products, Inc. protests the rejection of its oid as
nonresponsive by the Department of the Army under invitation for bids
(IFB) No. DAAK01-85-B-8069, a total small business set-aside for tne
purchase of camouflage support poles. Edsal contends tnat its failure
to certify, in the Small Business Concern Representation clause, that
all supplies to be furnished under the contract would be manufactured or
produced by small business concerns was not a proper basis for a finding
of nonresponsiveness, since Edsal had clearly stated in an amendment to
the IFB that "all other terms and conditions of the bid package will be
met." We dismiss the protest.
The Small Business Concern Representation clause requires that the
bidder certify that it is, or is not, a small business concern and that
all, or not all, supplies to be furnished will be manufactured or
produced by a small business concern in the United States, its
possessions, or Puerto Rico. See Federal Acquisition Regulation (FAR),
48 C.F.R. Sec. 52.219-1 (1984). We have held that the failure of a
bidder to complete the small business size status portion of the
representation is a minor informality that can be corrected or waived.
Extinguisher Service, Inc., B-214354, June 14, l984, 84-1 C.P.D. P 62.
We have also held, however, that the second portion of the
representation, requiring the bidder to certify whether or not the
supplies will be produced by small business firms, involves a matter of
responsiveness. Mechanical Mirror Works, Inc., B-210750.2, Oct. 20,
1983, 83-2 C.P.D. P 467. The basis for that holding is that, in the
absence of the certification, the small business contractor could defeat
the purpose of the set-aside program by providing supplies manufactured
by large business firms if its own interests so dictated. See DuHadaway
Tool and Die Shop, Inc., B-216082, Aug. 29, 1984 84-2 C.P.D. P 239.
Edsal's blanket statement in the IFB amendment that the supplies
would conform to all terms and conditions does not cure the
nonresponsiveness of Edsal's bid that resulted from its failure to
complete the certification. See Interface Flooring Systems, Inc.,
B-206399 et al., Apr. 22, 1983, 83-1 C.P.D. P 432. In order to be
responsive, a bid must represent an unequivocal offer to provide the
requested items in conformance with the solicitation's material terms.
Beta Construction Co., B-216176, Dec. 11, 1584, 84-2 C.P.D. P 648.
Where, as here, a bidder fails to make a specif ic commitment in a
clause intended for that purpose, a mere blanket statement of compliance
does not establish the required unequivocal commitment, but at best
renders the bid ambiguous. Moreover, since the responsiveness of a bid
must be determined from the bid itself without resort to explanations
given after bid opening, Edsal's post-opening expression of its intent
to produce all supplies itself cannot be considered in connection with
the responsiveness determination. ATD-American Co., B-217290, Jan. 23,
1985, 85-1 C.P.D. P 91.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
FILE: 220300 DATE: October 7, 1985
MATTER OF: The Bartow Group-Architects
DIGEST.:
1. GAO will not consider a protest that the agency should have
completed negotiations to have the protester's contract modif ied
instead of canceling the negotiations and soliciting competitive
proposals, posals, since the purpose of the bid protest process is
to insure that free and open competition is obtained to the
maximum possible extent.
2. A claim for additional payment under a contract is a matter
for resolution under the contract's disputes clause and the
Contract Disputes Act of 1978.
Bartow Group-Architects (Bartow), which has a contract with the
General Services Administration (GSA) to provide architectural services
in connection with the expansion of the Federal Archives and Records
Center in Seattle, Washington, protests the issuance of a notice in the
Commerce Business Daily soliciting proposals for on-site construction
inspection services at the Center. Bartow argues that GSA, which had
initiated contract amendment negotiations with Bartow to include the
work, should complete those negotiations and modify the firm's contract
by change order.
We will not consider a protest that an agency should issue a change
order rather than conduct a competition, see Feinstein Construction,
Inc., B-207506, June 7, 1982, 82-1 C.P.D. P 548, since the purpose of
our bid protest process is to insure that free and open competition is
obtain to the maximum practicable extent. Turbine Components Corp.,
B-216079, Jan. 18, 1985, 85-1 C.P.D. P 55. We note in this respect that
Bartow evidently is not precluded from the competition for the award of
any contract for the construction inspection services. Thus, the firm
is in a position to use whatever effort it has already expended to its
benefit in preparing a proposal in response to the Commerce Business
Daily notice.
Bartow complains that at the request of GSA it invested a substantial
amount of time and money preparing a fee proposal before GSA canceled
the negotiations to have its contract amended. To the extent that
Bartow is seeking reimbursement, under its contract, for the cost of
preparing the fee proposal, the firm's remedy is to pursue the matter
under the contract's disputes procedure and the Contract Disputes Act of
1978, 41 U.S.C. Sec. 601-613 (1982), which establishes procedures for
resolving such claims. See Gricoski Detective Agency, B-216020, Aug.
22, 1984, 84-2 C.P.D. P 214.
Bartow's protest is dismissed.
Robert M. Strong
Deputy Associate General Counsel
FILE: B-220220.2 DATE: October 7, 1985
MATTER OF: Radionics, Incorporated--Reconsideration
DIGEST:
Protest filed more than 10 working days after protester learned
of initial adverse agency action--agency determination that
protester's proposal was technically insuff icient--in response to
protest filed with agency is untimely. Protester's continued
pursuit of protest with contracting agency does not alter this
result.
Radionics, Incorporated, requests reconsideration of our notice of
September 10, 1985, which dismissed its protest against the award of a
contract for certain items under United States Marine Corps (USMC)
request for proposals No. M67004-84-R-0187.
We dismissed the protest as untimely because it was not filed with
our Office within 10 working days following initial adverse agency
action on a protest filed with the USMC. Our action was in accordance
with our Bid Protest Regulations, 4 C.F.R. Sec. 21.2(a) (3) (1985),
which provide that when a protest has first been filed with the
contracting agency, any subsequent protest to this Office must be filed
within 10 working days after the protester knew or should have known of
initial adverse agency action on its protest to the agency.
We affirm the dismissal.
The record shows that by telegram dated July 2, 1985, to the agency,
Radionics initially protested the award of a contract under this
solicitation to any firm other than itself. It challenged the agency's
method of evaluating drawings which were submitted to demonstrate the
technical sufficiency of Radionics' proposal and contended that the
deficiencies found in its drawings were insignificant. The contracting
officer responded to the protest by letter of August 1. The letter
stated that the method of evaluation used was proper, cited examples of
technical problems with Radionics' drawings and concluded that
Radionics' proposal was "technically insuf f icient." Radionics then
requested that the agency reconsider acceptance of its proposal, but, on
September 9, before receiving a response to the reconsideration request,
it filed its protest with this Office.
We considered the contracting officer's letter of August 1 to
constitute initial adverse agency action on Radionics' protest. Since
Radionics'subsequent protest to our Of f ice was not filed until
September 9, more than 1 month later, we dismissed the latter protest as
untimely.
In its request for reconsideration, Radionics essentially disputes
our characterization of the August 1 letter as adverse agency action.
Radionics argues that the August 1 letter did not represent an adverse
agency action on its protest because the letter only stated that its
proposal was technically insufficient, not that its protest was
officially denied. It adds that it continued to pursue the matter with
the agency after receiving the August 1 letter and never received a
denial of its protest. Radionics believes that it filed its protest
with our Office prior to any adverse agency action, since it has not
received an official denial of its protest from the agency, and its
protest therefore is timely.
We disagree. Adverse agency action is any action or inaction which
is prejudicial to the position taken in a protest filed with an agency.
Weitzul Construction, Inc., B-216036, Feb. 12, 1985, 85-1 C.P.D. P 184.
Even if we assume that the August 1 letter was not a denial of
Radionics' protest, the contracting off icer's determination that
Radionics' proposal was not technically suf f icient was prejudicial to
the firm's protest that award not be made to any fmirm other than
itself. Moreover, the f act that Radionics continued to pursue this
matter with the agency does not extend the time for protesting to GAO.
BHT Thinning, B-217105, Jan. 16, 1985, 85-1 C.P.D. P 44.
Harry R. Van Cleve
General Counsel
FILE: B-220178 DATE: October 4, 1985
DIGEST
GAO has no objection to Federal Acquisition Circular 84-11 which
amends the following parts of the Federal Acquisition Regulation with
respect to the following issues: part 3, restriction on sales to the
government by subcontractors; parts 7, 14 and 15, purchases of supplies
in economic quantities; part 9, prequalification requirements.
UNITED STATES GENERAL ACCOUNTING OFFICE
WASHINGTON, D.C. 20548
OFFICE OF GENERAL LEGAL COUNSEL
B-220178 October 4, 1985
Ms. Margaret A. Willis
FAR Secretariat
General Services Administration
Dear Ms. Willis:
This responds to your letter of August 30, 1985, requesting our
comments on Federal Acquisition Circular 84-11. The circular amends the
Federal Acquisition Regulation (FAR) to implement the Department of
Defense Authorization Act, 1985, Pub. L. 98-525, and the Small Business
and Federal Procurement Competition Enhancement Act of 1984, Pub. L.
98-577, with respect to restrictions on subcontractor sales to the
government, purchases of supplies in economic quantities, and prequalif
ication requirements.
Under part 3 of the FAR, as amended, contractors are prohibited from
restricting sales of any item directly to the government by an actual or
prospective subcontractor in connection with either the current or any
follow-on contract. In addition, under parts 7, 14 and 15, offerors
will be invited to state in their offers whether the quantity of
supplies sought by the government is economically advantageous to the
government and, if not, to recommend and quote prices on more
advantageous quantities. Finally, in part 9, with regard to prequalif
ication requirements -- that is, if an offeror must complete testing or
other quality assurance requirements prior to award--the FAR as amended
requires agencies to justify qualification requirements, to ensure that
the requirements are available to all offerors, and to permit offerors
to demonstrate their abilities to meet these requirements up to the time
of award.
We have no objection to the amendments.
Sincerely yours,
Harry R. Van Cleve
General Counsel
File: B-220119.1
Date: November 14, 1988
Matter of: Fraudulent Travel Claims
DIGEST
1. Evidence that claimant submitted false receipts in support of
vouchers for travel and transportation services that were not rendered
and expenses that were not incurred is sufficient to overcome the
presumption in favor of honesty and fair dealing.
2. Agency that sustains its burden of proof on fraudulent claims is
entitled to recoupment. Recoupment by deductions from employee's
current pay account is consistent with the purpose of 31 U.S.C. Sec.
3711(c) (1).
3. Claimant who submitted fraudulent claims is not entitled to
reimbursement even after expenses for travel and transportation are
actually incurred approximately one year later.
DECISION
The claimant was removed from employment after an investigation
disclosed that he had submitted fraudulent vouchers. He was
subsequently reinstated pursuant to a negotiated settlement agreement
which did not address his indebtedness to the government as a result of
the fraudulent vouchers or the method of recoupment. The claimant now
asks us to determine that the vouchers were not fraudulent and to order
the agency to return all money recovered by payroll deductions. We hold
that (1) the evidence in the record is sufficient to show that the
claimant submitted fraudulent vouchers and (2) recoupment by payroll
deductions was appropriate.
BACKGROUND
The claimant in this case is employed by the Department of the Army,
Armament Research and Development Center (USAARDC), Picatinny Arsenal,
Dover, New Jersey. He was issued permanent change of station (PCS)
travel orders in January 1980 authorizing travel and transportation
costs for himself and his family from Salem, Oregon, to Sparta, New
Jersey. During September, October and November of 1980, the claimant
received payment based on vouchers he submitted to the Army Finance and
Accounting Office claiming reimbursement for his travel and
transportation costs in the amount of $6,941.73. The claimant and his
family did not actually travel to New Jersey until July 1981. He did
not actually move his household goods until December 1981.
An investigation conducted by the Department of Defense Inspector
General disclosed that the receipts the claimant submitted in support of
the vouchers for travel and transportation were false. As a result of
the investigation, the claimant was removed from federal service in
August 1984 on grounds of fraud relating to the claims he submitted in
1980.
In September 1984 the National Federation of Federal Employees, Local
1437 (NFFE), invoked arbitration on the claimant's behalf during
grievance proceedings brought to contest his removal. A pre-hearing
settlement agreement reached between the claimant, the NFFE and the
USAARDC stipulated that the claimant's removal would be cancelled and a
suspension without pay substituted in place of the removal. The
agreement was silent as to whether the claims were fraudulent, as to the
claimant's indebtedness to the government and as to the method of
government recoupment.
In April 1985 the Finance and Accounting Officer at USAARDC, Dover,
notified the claimant in writing that he was indebted to the government
for $6,941.73, the amount paid based upon the fraudulent vouchers
submitted in 1980, and that the agency intended to initiate collection
by payroll deduction in May 1985.
The NFFE again invoked arbitration on the claimant's behalf to contest
the agency's proposed collection action. Simultaneously, the agency
Finance and Accounting Officer requested a decision from the Comptroller
General on the claimant's liability. We declined jurisdiction pending
the outcome of the arbitration. 1/ After a hearing in which the claimant
and an attorney for NFFE filed appearances, the arbitrator determined
that the issue of recoupment of monies paid the claimant was not
arbitrable. The NFFE unsuccessfully sought a review of this
determination from the Federal Labor Relations Authority (FLRA) which
held that it had no jurisdiction to review the NFFE's exceptions to the
arbitrator's determination. 2/
The claimant now requests us to determine that he did not commit fraud
against the government and to order the agency to refund monies which
have been recouped from him through payroll deductions and cease making
the deductions from his paycheck.
ANALYSIS AND CONCLUSION
Our prior decisions express a clear standard with respect to alleged
fraudulent claims against the government:
". . . the burden of establishing fraud rests upon the party
alleging the same and must be proven by evidence sufficient to
overcome the existing presumption in favor of honesty and fair
dealing. Circumstantial evidence is competent for this purpose,
provided it affords a clear inference of fraud and amounts to more
than suspicion or conjecture. However, if, in any case, the
circumstances are as consistent with honesty and good faith as
with dishonesty, the inference of honesty is required to be
drawn." Charles W. Hahn, B-187975, July 28, 1977.
The agency has met its burden of proof in this case since its
investigation clearly reveals that the employee submitted fraudulent
receipts in support of claims for funds from the government. The
claimant admitted during the investigation that he and not his travel
agency placed the "Paid in Full, July 6, 1980" notation on the statement
submitted; that the airline tickets described on the voucher were never
issued or paid for; that his family did not actually leave their home
in Oregon until July 31, 1981; and that he knew when he prepared and
submitted the travel vouchers that the tickets were not purchased from
the travel agent identified on the voucher. The investigation further
revealed that the claimant knew the transportation document he submitted
was an estimate and that the moving company identified on the voucher
did not actually perform any moving services in 1980 for him. The
claimant admitted that he did not move his household goods until
December 1981 and that he used a different moving company from the one
identified in the submitted voucher.
Counsel for the claimant advances several defenses on his behalf.
First, counsel argues that since the claimant had no prior experience
with travel and transportation vouchers, he reasonably believed that if
he did not file the vouchers within 6 months he would not be reimbursed
at all. However, the agency Finance Accounting Office indicated that an
employee is usually informed that he is permitted 2 years from his
reporting date to move his household goods and transport his family
based on PCS orders. 3/ In any event, the claimant's concern about a
need to file for reimbursement within 6 months obviously would not
justify submitting fraudulent claims.
Second, counsel suggests that the settlement agreement claimant entered
into precludes the agency from initiating recoupment from the claimant.
The settlement agreement, however, is silent on the issue of recoupment.
Furthermore, the agency's cancellation of claimant's removal is not
dispositive of the fraudulent claims. We have consistently held that
where differing standards of proof apply, a prior action is not
dispositive of a later recoupment action. 69 Comp. Gen. 357 (1981).
Thus, the claimant's reinstatement pursuant to the agreement does not
dispose of the indebtedness. There is no reason to even suspect that
failure to raise the issue in the agreement meant that the government
waived recoupment.
Counsel for claimant advances the defense that the vouchers are merely
inaccurate and not fraudulent. However, the evidence clearly shows that
the claimant submitted false receipts in support of vouchers for travel
and transportation services that were not rendered. This evidence
standing alone is "sufficient to overcome the existing presumption in
favor of honesty and fair dealing." Hahn, supra.
Applying the Hahn standard to the facts in this case, we find that the
agency has sustained its burden of proof on the fraudulent claims.
Recoupment by payroll deductions from employee's current pay account is
consistent with 31 U.S.C. Sec. 3711(c) (1).
Finally, the claimant cannot obtain reimbursement on the basis of the
travel and transportation costs that actually were incurred in 1981
subsequent to the fraudulent claims. We view the fraudulent submissions
as vitiating any payment of travel and transportation claims arising out
of this transaction. See Clyde L. Brown, B-206543, Sept. 8, 1982, and
cases cited; 44 Comp. Gen. 110, 115-116 (1964). But cf., 41 Comp. Gen.
285, 287-288 (1961).
Comptroller General of the United States
FOOTNOTES
1/ National Federation of Federal Employees, Local 1437, B-220119, Dec.
9, 1985.
2/ The FLRA concluded that the arbitrator's determination related to a
matter covered by 5 U.S.C. Sec. 7512 (removal), which is excepted from
FLRA review pursuant to 5 U.S.C. Sec. 7122(a). See, NFFE, Local 1437,
24 FLRA No. 79 (Dec. 24, 1986).
3/ See, Federal Travel Regulations, para. 2-1.5a(2).
FILE: B-220074 DATE: October 2, 1985
MATTER OF: Ideamatics, Inc.
DIGEST:
1. Protest against the cancellation of an
original solicitation is untimely and will
not be considered on the merits when it is
filed 5 months after the cancellation, in
the context of a protest against award under
a resolicitation.
2. Whether a proposed subcontractor has
violated a contractual relationship with a
protester is a dispute between private
parties and is thus beyond the scope of the
bid protest function.
3. Allegation that agency has interfered with
the protester's contractual relations hy
sending a copy of a solicitation directly to
the protester's subcontractor under an
earlier solicitation is without merit, since
subcontractor apparently requested solici-
tation and agency is required to obtain full
and open competition in procurements.
4. Argument that protester was eliminated from
competition only 2 weeks after its proposal
was submitted does not demonstrate that the
possible selection for award of its pro-
posed subcontractor under an earlier solici-
tation is due to favoritism on the part of
the agency.
5. When protest is dismissed as without legal
merit, no useful purpose would be served by
holding a bid protest conference, and
request for proposal preparation costs and
attorney's fees will be denied.
Ideamatics, Inc. protests any award to the Department of Civil
Engineering, University of Texas at Austin, under request for proposals
(RFP) No. HC-14362, issued by the Department of Housing and Urban
Development (HUD), Washington, D.C.
HUD issued the RFP on July 23, 1985, soliciting offers for ad hoc
enforcement testing for its Manufactured Housing Program. Ideamatics
argues, in effect, that it should be given the award and that the
University of Texas should be allowed to participate in this testing
program as an Ideamatics subcontractor or not at all.
We dismiss the protest.
HUD originally tried to satisfy this testing requirement in October
1984 when it issued RFP No. HC-12839. However, it only received one
offer, and this was from Ideamatics. Ultimately, the agency decided
that RFP-12839 did not meet its needs, and on April 16, 1985, it
canceled the solicitation. When it notified Ideamatics of the
cancellation, HUD also informed the protester that it would be issuing
another solicitation in the near future.
In developing its proposal for the original RFP, Ideamatics states,
it had contacted the Department of Civil Engineering at the University
of Texas to see whether the University wanted to help Ideamatics prepare
its proposal and act as a subcontractor if Ideamatics received the
award. The University agreed to participate, apparently entered into a
"teaming agreement" with Ideamatics, and provided the protester with
certain information needed to prepare the proposal.
After the cancellation and resolicitation under RFP-14362, Ideamatics
states, it attempted to renew its earlier arrangement with the
University, but learned that the school was no longer interested in
working with Ideamatics. HUD had sent a copy of the solicitation
directly to the University, apparently upon request, and the school had
decided that it would either submit a proposal on its own or work with
some other contractor. Ideamatics subsequently arranged to have the
University of Maryland act as its subcontractor. However, just 2 weeks
after Ideamatics submitted its proposal in response to the
resolicitation, HUD notified the company that it was not in line for the
award. Ideamatics then filed this protest.
The grounds of Ideamatics' protest can be summarized as follows:
(1) HUD never adequately explained why Ideamatics was not
awarded a contract under the original solicitation, RFP-12839;
(2) The University's decision to act on its
own violates its contractual relationship with Ideamatics;
(3) HUD intentionally interfered with Ideamatics' contractual
relationship when it solicited the University under RFP-14362,;
(4) HUD's hasty rejection of Ideamatics' proposal under
RFP-14362 indicates a biased, improper evaluation with the
objective of directing the contract award to the University; and
(5) Pending award, the agency has arranged on a noncompetitive
basis for the University to perform a portion of the testing as a
subcontractor to another HUD contractor for the Manufactured
Housing Program.
Ideamatics requests that we recommend termination of any contract
already awarded, direct either award to Ideamatics or the issuance of a
new solicitation, and order that Ideamatics be reimbursed for its costs
of pursuing the protest as well as for its attorney's fees.
Our Bid Protest Regulations provide that, as a general rule, protests
must be f iled in our Office not later than 10 working days after the
basis of the protest is known or should have been known, whichever is
earlier. 4 C. F.R. Sec. 21.2( a) (2) (1985). If Ideamatics believed
that the cancellation of RFP-12839 was somehow improper, it should have
filed a protest with our Office not later than the lOth working day
after it learned of the cancellation, specifying its reasons for
opposing the agency's action. In fact, Ideamatics did not complain
ahout the cancellation until almost 5 months after it had occurred.
Clearly, then, this ground for protest is untimely and cannot be
considered on the merits.
Regarding the University's alleged violation of a contractual
relationship, Ideamatics has not produced any evidence that its "teaming
agreement" with the University survived the cancellation of RFP-12839.
It appears that this agreement was for a limited purpose--that is,
preparing the proposal and, if successful, entering into a more
permanent prime contractor/subcontractor relationship--and was also
dependent upon the continued viability of RFP-12839. If there is an
existing contractual relationship, the protester has not shown that it
includes any agreement by the University not to compete with Ideamatics
for future government contracts. In any event, we will not consider a
breach of contract allegation because that is essentially a dispute
between private parties and as such is beyond the scope of our bid
protest function. See, for example, Morse Typewriter Co., Inc.,
B-212636.2, Sept. 27, 1983, 83-2 C.P.D. P 383.
We also see no valid ground of protest in Ideamatics' allegation that
HUD intentionally interfered with its contractual relationship with the
University. As mentioned above, the protester has not shown that its
agreement with the University was as extensive as it has implied, and we
know of no statute or regulation that requires an agency to investigate
the extent and nature of a potential contractor's business relations
with all other potential contractors before it sends that contractor a
copy of the solicitation. Therefore, we fail to see how HUD's sending a
copy of RFP-14362 directly to the University rises to the level of
interference with Ideamatics' contractual relations.
More importantly, contracting agencies are required to obtain full
and open competition in their procurements, which means that all
responsible sources are permitted to submit sealed bids or competitive
proposals. See 41 U.S.C. Sec.Sec. 253 and 403 (West Supp. 1985), as
amended by the Competition in Contracting Act of 1984, Pub. L. 98-369,
title VII. HUD's provision of a copy of the solicitation to the
University as a prospective prime contractor clearly is in accord with
this statutory requirement.
As to Ideamatics' argument that HUD evaluated its proposal for
RFP-14362 in a biased and improper manner, we point out that the
determination of the relative merits of a proposal is primarily a matter
of administrative discretion, and the fact that a protester disagrees
with the agency's evaluation does not render the evaluation
unreasonable. Airtronix, Inc., B-217087, Mar. 25, 1985, 85-1 C.P.D. P
345. Moreover, we have held that when improper conduct on the part of
government officials is alleged, the protester has the burden of proof,
and our Off ice will not rely on inferences alone to find such
misconduct. Davey Compressor Co., B-215028, Nov. 30, 1984, 84-2 C.P.D.
P 589.
Ideamatics has presented nothing more than its own suspicions--based
on its elimination from competition 2 weeks after its proposal was
submitted--to support its allegation that the agency is trying to direct
the award to the University. Without proof that HUD's decision is based
on anything more than the relative merit of competing proposals, our
Office has no basis to question the agency's actions.
As to Ideamatic's last allegation, i.e., that the University is now
doing some test work for another HUD contractor, we point out that even
if this is so, it involves the administration of an ongoing contract,
and our Office does not review such matters under our bid protest
function. See, for example, Window Supply Co., B-218043, Jan. 28, 1985,
85-1 C.P.D. P 112.
Since Ideamatics has not stated a valid basis of protest, we dismiss
the protest pursuant to our Bid Protest Regulations, 4 C.F.R. Sec. 21.3
(f), without requesting a report from the agency. In view of this
dismissal, we also find that the conference Ideamatics has requested
would serve no useful purpose. Cushman Electronics, Inc., B-207972,
Aug. 5, 1982, 82-2 C.P.D. P 110. Finally, since Ideamatics' protest is
without legal merit, its request for proposal preparation costs and
attorney's fees is disallowed. E.H. Morrill Co., B-214556, May 3, 1984,
84-1 C.P.D. P 508.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
FILE: B-220054.2 DATE: October 2, 1985
MATTER OF Delta Petroleum Company, Inc.
DIGEST:
A protest that is refiled after GAO dismissed an earlier
protest based on the same grounds because the protester failed to
provide the contracting agency with a copy within 1 day after the
protest was filed with GAO must independently satisfy the
timeliness requirements of the GAO Bid Protest Regulations.
Delta Petroleum Company, Inc. protests the failure of the Defense
Logistics Agency to award it a contract for all line items for packaged
oil products set aside for small business firms under invitation for
bids (IFB) No. DLA4OO-85-B-01 00. This protest was received by our
Office on September 23, 1985.
We dismiss the protest because it is untimely. Our Bid Protest
Regulations, 4 C.F.R. Sec. 21.2(a) (2) (1985), require that protests be
f iled not later than 10 working days after the basis of protest is
known or should have been known, whichever is earlier.
On September 10, we received a protest from Delta based on the same
grounds and pertaining to the same procurement as this one does. That
protest was dismissed because Delta failed to provide a copy of the
protest to the contracting agency within 1 day after the protest was
filed with our Office as required by section 21.1 (d) of our Bid Protest
Regulations. The requirement to furnish a copy of the protest to the
agency within the 1-day period was necessiated by the strict time limits
imposed by the Competition in Contracting Act of 1984 (CICA), 31
U.S.C.A. Sec.Sec. 3551-3556 (West Supp. 1985). Any delay in providing
a copy of the protest to the contracting agency necessarily delays the
protest proceedings and frustrates our efforts to provide effective
consideration of all objections to agency procurement actions within
the statutory time limitations imposed by CICA. Storage Technology
Corp., B-218148.2, Mar. 11, 1985, 64 Comp. Gen. , 85-1 C.P.D. P 300.
Since the initial protest was dismissed, the refiled protest must be
treated as the initial protest and must independently satisfy the
timeliness requirements of our Bid Protest Regulations. See Security
Assistance Forces and Equipment International, Inc., B-193695, June 9,
1980, 80-1 C.P.D. P 398; Crestwood Furniture Co., B-195109, Oct. 15,
1979, 79-2 C.P.D. P 255, aff'd on reconsideration, B-195109.3, Jan. 21,
1980, 80-1 C.P.D. P 59. We have been informed by the agency that Delta
was notified by letter of August 15 that it had been awarded a contract
for 17 of the 40 line items set aside for small business firms and that
on August 28 Delta representatives attended a meeting with the
contracting off icer during which the reasons why Delta was not awarded
the 23 other line items were discussed.
Therefore, it is clear that by August 28, Delta was aware of the
grounds for its protest and should have protested within 10 working days
of that date (September 12). Koenig Mechanical Contractors, Inc.,
B-217571, Apr. 4, 1985, 85-1 C.P.D. P 389. Instead, it was not until
September 23 that we received the refiled protest from Delta. This
protest is untimely.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
File: B-219998.9; B-233697
Date: March 27, 1989
Matter of: Cantu Services, Inc.
DIGEST
1. Protest against Army's cancellation of a request for proposals for
dining services is denied where the contracting officer reasonably
determined that the solicitation should be canceled because a lack of
funds required that the agency reduce its requirements by 28 percent.
2. Regulation which requires that a resolicitation of a canceled
solicitation be issued to all firms originally solicited cannot be
construed as requiring the size eligibility of a particular bidder to
dictate whether a resolicitation is restricted to small business or not.
3. Claim for proposal preparation costs is denied where cancellation
of solicitation was proper.
DECISION
Cantu Services, Inc., protests the Army's cancellation of request for
proposals (RFP) No. DABT51-85-R-0025 for dining facility services at
Fort Bliss, Texas, and the agency's resolicitation of the requirement
under RFP No. DABT51-88-R-0187. Cantu alleges that the new solicitation
is substantially the same as the original, and therefore the
cancellation of the original solicitation was improper. It also claims
its proposal preparation costs.
We deny the protest and the claim.
The Army issued RFP No. DABT51-85-R-0025 on July 8, 1985, as part of a
cost comparison under Office of Management and Budget (OMB) Circular
A-76. After conducting negotiations, requesting two rounds of best and
final offers and amending the solicitation 17 times, the Army canceled
the RFP on May 4, 1988, stating that budgetary constraints reduced the
agency's requirements for the solicited services, and that these
reductions were of such magnitude that a complete revision of the RFP
work statement would be required.
The new solicitation, RFP No. DABT51-88-R-0187, was issued September
30. It deletes certain dining facility and attendant services contained
in the original solicitation. Additionally, the new solicitation
differs in that it guarantees the successful offeror award of at least a
portion of the services, regardless of the outcome of the A-76 cost
comparison.
The protester argues that the solicitation should not have been
canceled because the new solicitation is not substantially different
from the original. In this regard, the protester states that the
statements of work for the two solicitations are virtually identical
except for the closing of some dining facilities, the consolidation of
others, and the alteration of some of the dining facilities from full
food service facilities to management and food production facilities.
The protester maintains that the relatively minor changes in the
solicitation do not constitute the required cogent and compelling reason
needed in order to justify the cancellation of a solicitation under
these circumstances.
Contracting agencies have broad discretion in determining when it is
appropriate to cancel a solicitation. In a negotiated procurement, such
as the one here, 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 Par. 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 Par. 541.
We do not agree with the protester's argument that the proper standard
here is that normally applicable to sealed bid procurements. It may be
true, as the protester argues, that responding to the original
solicitation required the investment of considerable resources and that
some of the offerors under the original solicitation may not be able to
compete under the resolicitation. Nevertheless, these factors have
nothing to do with the fact that offers were not exposed under the
canceled RFP, and therefore do not constitute a basis for applying other
than the normal reasonableness standard to this negotiated solicitation.
See CooperVision, Inc., B-229920.2, Mar. 23, 1988, 88-1 CPD Par. 301.
As far as the cancellation itself is concerned, the agency states that
a reduction in funding necessitated a reevaluation of its minimum needs.
Accordingly, the agency reduced its dining facility and service
requirements by 28 percent in the new solicitation. Additionally, we
are informed that the new solicitation differs substantially from the
old one in that it guarantees the successful offeror award of at least
the dining facility attendant services, regardless of the outcome of the
A-76 cost comparison. Under the old solicitation, if the low offeror
was not successful under the A-76 cost comparison, it would be awarded
no contract at all. Furthermore, the agency has discovered that two
individuals who were major contributors to the creation of the
government's Most Efficient Organization for the purpose of the cost
comparison were also members of the Source Selection Evaluation Board
(SSEB). To rectify this possible compromise, the Army states that it
would have brought the solicitation review process to a halt in order to
convene an entirely new SSEB.
Despite the protesters arguments to the contrary, we have often held in
cases such as this that a significant change in the agency's
requirements--we consider a 28 percent reduction to be significant--or
even a potential for cost savings constitute legitimate grounds for
canceling a negotiated solicitation. Gradwell Co., Inc., B-230986, July
7, 1988, 88-2 CPD Par. 19; The Big Picture Co., B-224112.2, Mar. 2,
1987, 87-1 CPD Par. 252. In this case, we think that in view of all the
factors set forth above, the contracting officer exercised his
discretion reasonably in deciding to cancel the RFP and to resolicit the
requirement in a reduced form and under a changed format. Cantu
insists, however, that considering the substantial investment made by
the offerors under the original solicitation the cancellation just
cannot be deemed reasonable. While it is indeed unfortunate that Cantu
and other offerors may have incurred costs in pursuing the award under
the original solicitation, this fact has no bearing on the propriety of
the cancellation. Environmental Tectonics Corp., B-224770, Nov. 19,
1986, 86-2 CPD Par. 591.
Cantu also argues that the new solicitation should not have been issued
as a small business set-aside. While eligible as a small business under
the original solicitation, a small business set-aside, Cantu has since
lost its small business size status because of its economic growth, and
is therefore precluded from participating in the new competition. Cantu
bases its argument on Federal Acquisition Regulation (FAR) Sec.
15.606(b) (4) which requires that upon issuance of a new solicitation, "
( t ) he new solicitation shall be issued to all firms originally
solicited Cantu argues that because the Army was required to "issue" it
a solcitation, the Army also was required to allow it to participate.
In this regard, the protester states that since as a large business it
cannot compete under the current solicitation, the set aside must be
withdrawn and the solicitation reissued on an unrestricted basis.
The cited regulation, in our view, is intended only to require that all
offerors who were originally solicited are in fact provided with a copy
of the new solicitation. This regulation cannot be construed as
requiring the size eligibility of a particular bidder to dictate whether
a resolicitation is restricted or not. Whether a particular
solicitation should be set aside for small business is governed by FAR
Sec. 19.502-2, which requires that a solicitation be set aside for small
business if there is a reasonable expectation that offers will be
obtained from at least two responsible small businesses at reasonable
prices. The protester does not argue nor does the record show that the
set-aside was inconsistent with FAR Sec. 19.502-2.
Cantu finally argues that it should be reimbursed for its proposal
preparation costs. Since we have found the cancellation proper, Cantu's
claim for reimbursement of its proposal preparation costs is denied.
Bid Protest Regulations, 4 C.F.R. Sec. 21.6(d)(e) (1988); American
Technical Communications, B-230827, July 15, 1988, 88-2 CPD Par. 56.
The protest and the claim are denied.
James F. Hinchman, General Counsel
File: B-219850
Date: November 23, 1987
Matter of: Staff Sergeant Jeffry A. Collins - Reconsideration - Use
of Foreign Air Carrier
DIGEST
General statements by a service member and his travel agent that U.S.
air carrier service from Honolulu to Tokyo en route to Okinawa was
unavailable on the date the member traveled do not provide adequate
justification for use of a foreign air carrier when the transportation
officer has denied certification for such travel. Adequacy of
justification for use of a foreign carrier is determined in accordance
with the Fly America Act standards of unavailability set forth in Joint
Travel Regulations, Vol. 1, para. M2150. Absent certification of
justification under those standards by the transportation or other
appropriate officer, reimbursement for travel may not be made. Sergeant
Jeffry A. Collins, USAF, B-219850, February 19, 1986, affirmed.
DECISION
This action is in response to a request for reconsideration of our
decision, Sergeant Jeffry A. Collins, USAF, B-219850, February 19, 1986.
In that case, Sergeant Collins was denied travel expenses because he
and his family traveled to Okinawa in November 1980, pursuant to orders
for a permanent change of station, on a foreign air carrier without
providing adequate justification for use of the foreign air carrier. We
noted that the applicable regulation in effect at the time of the
travel, Joint Travel Regulations, Volume 1 (1 JTR), paragraph M2150,
requires the use of air carriers in accordance with the Fly America Act,
49 U.S.C. App. Sec. 1517. Paragraph M2152, 1 JTR, requires that travel
by foreign air carriers be supported by a certificate or memorandum
setting forth the justification for use of a foreign air carrier.
Sergeant Collins and his family were originally to travel by
government air transportation from Travis Air Force Base, California, to
Okinawa. However, for personal reasons, he chose to visit Hawaii on the
way to Okinawa and fly on a commercial airline with the understanding
that he was obligated to pay all additional expenses. This alternate
travel was approved by his superiors.
In his original claim, Sergeant Collins asserted that he was unaware
of the requirement to use U.S. air carriers, but he also stated that
U.S. air carrier service was unavailable to Okinawa. We pointed out,
however, that the Comptroller General's decisions and guidelines require
that the determination be made by a transportation or other appropriate
officer that U.S. air carrier service was unavailable. We also pointed
out that applicable regulations require that the traveler use U.S. air
carrier service, if available at the origin, to the farthest practicable
interchange point on a usually traveled route. We noted that Sergeant
Collins had not submitted a statement of justification to the Air Force,
nor had he indicated that he had attempted to use U.S. air carrier
service on any portion of his travel.
In his request for reconsideration Sergeant Collins acknowledges that
U.S. flag airlines were available from California to Hawaii, and he does
not claim that portion of the trip. He claims, however, that U.S. air
carrier service was unavailable from Honolulu, Hawaii, to Tokyo, Japan,
and from Tokyo, Japan, to Okinawa, Japan, due to overbookings and flight
cut backs by the U.S. air carrier, Northwest Orient.
The portion of the travel from San Francisco to Honolulu was
performed on November 22, 1980. The remainder of the travel from
Honolulu via Tokyo to Okinawa was performed November 27-29, 1980.
Sergeant Collins, in support of his claim, has submitted a statement
dated April 29, 1986, from Mr. Ward H. Percifield, President of All
Points Travel, who booked the flights, which states that the Collins
family:
"* * * were put on Japan Air Lines because, to the best of our
knowledge, no American Flag carrier was available for the dates he
had to travel---- 22 November, 1980."
The Air Force Traffic Management Officer states that a certificate of
nonavailability of a U.S. air carrier cannot be issued since the Air
Force is unable to verify the availability of U.S. air carrier service
during that period. The Air Force recommends disapproval of the claim
because the documents submitted do not support Sergeant Collins' claim.
As noted above, Comptroller General decisions and guidelines and
applicable regulations require that the determination of unavailability
be made by a transportation or other appropriate officer. In the
present case, no such determination has been made.
We have generally held that an employee's unsubstantiated
justification certificate is not itself sufficient to authorize
reimbursement for the use of a foreign air carrier. John King, Jr., 62
Comp. Gen. 278 (1983). However, we have allowed reimbursement to an
employee who certified nonavailability of U.S. air carrier service for
his own travel, under limited circumstances. In Nelson P. Fordham, 62
Comp. Gen. 512 (1983), the traveler claimed that U.S. air carriers were
unavailable for the first portion of his temporary duty travel. Since
the unavailability was due to a general airline strike and was
externally verifiable, we found it was sufficient to allow reimbursement
to the traveler.
It is our view that reimbursement may not be allowed on the basis of
the record before us in the present case. The travel agent, in a
statement made 5-1/2 years after the travel was performed, does state
that to the best of his knowledge no American air carrier was available.
However, Since it appears that Sergeant Collins and the travel agent
were unaware of the applicable travel restrictions at the time the
flights were booked, it is unclear whether they fully considered the
availability of U.S. air carriers and possible alternate travel times
when the bookings were made.
In this regard we note that the travel agent's statement refers to
November 22, the beginning of the travel, rather than the portion
performed November 27-29 for which Sergeant Collins is claiming. In
addition, the transportation officer denied certification of
nonavailability since nonavailability was not verifiable, and the Air
Force recommends that payment not be made. Thus, there is insufficient
justification for the Collins' travel on a foreign air carrier. Absent
sufficient justification, we are unable to allow reimbursement for
Sergeant Collins, travel.
Accordingly, the previous decision sustaining the disallowance of the
claim is affirmed.
Comptroller General
of the United States
Matter of: Terry R. Carlstrom
File: B-219845
Date: June 9, 1987
DIGEST
Employee may not be reimbursed for real estate expenses incurred
incident to settlement which took place 3 months beyond the maximum
3-year period within which real estate transactions must be completed
under paragraph 2-6.2e of the Federal Travel Regulations. The fact that
sale was delayed by actions of renters who remained in possession after
they had ceased paying rent and had defaulted under terms of contract by
which they agreed to purchase the employee's former residence does not
toll the running of the 3-year period of limitation, which may not be
waived or modified regardless of the circumstances responsible for the
delayed settlement.
DECISION
Mr. Terry R. Carlstrom, an employee of the National Park Service, has
appealed Settlement Certificate Z-2864529, March 9, 1987, issued by our
Claims Group, which denied his claim for reimbursement of real estate
expenses incurred in the sale of his residence incident to his change of
official station. For the reasons stated below, we sustain the Claims
Group's settlement and hold that the relocation expenses claimed may not
be reimbursed.
Mr. Carlstrom was authorized a change of permanent duty station from
Anchorage, Alaska, to Washington, D.C. He reported for duty at his new
official duty station on August 8, 1982. In connection with his
transfer to Washington, D.C., Mr. Carlstrom was authorized reimbursement
for real estate expenses incurred in selling his former residence in
Alaska. Mr. Carlstrom has explained that his Alaska residence was
placed on the market in June 1982 and was occupied by renters beginning
in August 1982. On September 6, 1984, Mr. Carlstrom and the couple then
renting the house executed an agreement under which the renters agreed
to purchase the house after the sale of other property which they owned
but not later than June 1, 1985.
In March 1985, the buyers defaulted and discontinued making all
payments. They did not vacate the premises until May 1, 1985, and,
ultimately, Mr. Carlstrom obtained a judgment against them to cover
certain of his losses.
On July 13, 1985, Mr. Carlstrom entered into a contract to sell his
Alaska residence to another purchaser. That sale was not closed until
November 14, 1985, 3 months beyond the maximum 3-year period within
which an employee must consummate the sale of his former residence in
order to receive reimbursement for real estate sale expenses. Because
closing did not occur until more than 3 years after August 8, 1982, the
date he reported to his new duty station, Mr. Carlstrom's claim for real
estate expenses was denied by the National Park Service. That denial
was upheld by our Claims Group, which cited the fact that the
regulations providing a maximum 3-year period within which real estate
transactions must be completed may not be waived or modified even though
an employee is unable to complete the purchase or sale transaction for
reasons beyond his or her control.
Upon appeal from the Claims Group's determination, Mr. Carlstrom
claims that the time limit of 3 years should be extended by the 8-month
period that "a dishonest buyer occupied the house and caused it to be
removed from the market." Mr. Carlstrom points out that the actual
closing date of the house sale transaction, November 14, 1985, would
fall several months short of the extended time limit of 3 years and 8
months.
The statutory authority for reimbursement of real estate expenses
incurred by civilian employees upon change of official station is found
in 5 U.S.C. Sec. 5724a(a)(4) (1982). The implementing regulations are
contained in the Federal Travel Regulations (Supp. 4, Oct. 1, 1982),
incorp. by ref., 41 C.F.R. Sec. 101-7.003 (1984) (FTR). The time
limitation for completion of transfer-related real estate transactions
is found in FTR, para. 2-6.1e.
As in effect at the date of Mr. Carlstrom's transfer from Anchorage
to Washington, D.C., paragraph 2-6.1e of the FTR provided that an
employee had 1 year from the date he reported for duty at his new
official station to complete the sale of his residence at his old duty
station. As then applicable, there were provisions under which an
employee could obtain a 1-year extension, giving him an aggregate period
of 2 years within which to finalize the sale of his former residence.
Effective October 1, 1982, paragraph 2-6.1e of the FTR was amended to
provide for an initial 2-year period, with an additional 1-year
extension, which would allow the employe a maximum period of 3 years
within which to complete real estate transactions. This amendment was
applicable to employees whose time to complete real estate transactions
had not expired prior to August 23, 1982, and, thus, gave Mr. Carlstrom
an initial 2-year period within which to complete the sale of his Alaska
residence. James H. Gordon, 62 Comp. Gen. 264 (1983). In July 1983,
Mr. Carlstrom was granted a 1-year extension, giving him an aggregate
period of 3 years within which to consummate the sale of his Alaska
residence. This 3-year period ended on August 7, 1985, a little over 3
months prior to November 14, 1985, the date when settlement finally took
place.
This Office has consistently held that the above-cited regulation has
the force and effect of law. William R. Walberg, 58 Comp. Gen. 539
(1979). The time limit it establishes may not be waived or modified
even when the employee's failure to meet that limit is due to the
recalcitrance of tenants occupying the employee's former residence under
a lease with an option to purchase. Neil McKinney, B-217186, April 3,
1985. In Jerald W. Duxbury, B-219222, December 20, 1985, we considered
a case very similar to Mr. Carlstrom's in which the transferred employee
entered into a purchase agreement with individuals who were in
possession of the property on the date the purchase agreement was
executed and who failed to consummate the purchase in accordance with
the terms of that agreement. The transferred employee sued for specific
performance and, upon failing to obtain that relief, placed the house
back on the market. The sale to another purchaser was ultimately
consummated 5 months after the 3-year entitlement period established by
FTR, para. 2-6.2e had ended. As does Mr. Carlstrom, the employee in
that case claimed that the 3-year period of limitation was tolled by
conditions beyond his control, namely litigation and occupancy of his
former residence by the defaulting purchaser. We specifically held that
these circumstances did not provide a basis to waive or modify the
3-year limit and that there is no basis for "tolling" or suspending the
running of that time limitation.
Consistent with the above-cited authorities, there is no legal basis
to allow Mr. Carlstrom's claim for reimbursement of real estate expenses
incurred in connection with the sale of his former Alaska residence.
We, therefore, sustain the denial of Mr. Carlstrom's claim by our Claims
Group's Settlement Certificate Z-2864529, dated March 9, 1987.
Acting Comptroller General
of the United
FILE: B-219834 DATE: October 31, 1985
MATTER OF: Bureau of Land Management, Hyder Townsite
DIGEST:
Bureau of Land Management (BLM) may properly pay
$18,244.92 jointly to a BLM trustee and an Alaska
townsite representative for deposit in an account
in a local bank for the benef it of the townsite.
Because the townsite in question is not incorpo-
rated, applicable BLM regulations require that
funds from sale of lots and assessments be used by
the BLM trustee "in making public improvements."
A local bank account with joint control consti-
tutes a reasonable mechanism for expending the
funds in question.
This decision is in response to a request from Mr. Edward P.
Greenberg, Chief of the Division of Finance, Bureau of Land Management,
(BLM) Department of the Interior. Mr. Greenberg requests a decision
regarding the propriety of certification of a cneck in the amount of
$18,244.92, made payable jointly to a BLM trustee and a representative
of a townsite in Alaska, for the purpose of depositing those funds in an
account in a local bank for the benefit of the townsite. For the
reasons set forth below, this Office would have no objection to
certification of the check in question.
BACKGROUND
Hyder Townsite is an unincorporated community located in southeast
Alaska. Hyder Townsite was established in 1923 under section 11 of the
Act of March 3, 1891 (formerly codified at 43 U.S.C. Sec. 732 (1970)),
which provides for a survey of the townsite and the appointment by BLM
of a townsite trustee, who is responsible for disposing of lots by award
or by sale. See 43 C.F.R. Sec. 2565 0-3 - 2565.9 (1984).1/ BLM
regulations require the trustee to issue deeds to occupants and sell
unoccupied lots. Id. at Sec.Sec. 2565.4 - 2565.5. The regulations
further provide that the trustee may use proceeds from the sale of lots
and other trust income under certain conditions to make public
improvements:
"Final report of trustee; disposition of unexpended moneys and
unsold lots.
"After the disposal of a suff icient number of lots to pay all
expenses incident to the execution of the trust, including the
cost of the subdivisional survey, the trustee will make and
transmit to the Bureau of Land Management his final report of his
trusteeship, showing all amounts received and paid out and the
balance remaining on hand derived from assessments upon the lots
and from the public sale. The proceeds derived from such sources,
after deducting all expenses, may be used by the trustee on
direction of the Secretary of the Interior, where the town is
unincorporated, in making public improvements, or, if the town is
incorporated such remaining proceeds may be turned over to the
municipality for the use and benefit thereof. After the public
sale and upon proof of the incorporation of the town, all lots
then remaining unsold will be deeded to the muncipality, and all
muncipal public reserves will, by a separate deed, be conveyed to
the muncipality in trust for the public purposes for which they
were reserved." Id. at Sec. 2565.7 (emphasis added).
Because of a lawsuit, which has been pending for several years, the
last lot sale for Hyder Townsite was held in 1975. 2/ Further, because
the community has been reluctant to incorporate, the townsite trust
account has remained open many years longer than the BLM regulations
apparently contemplate. Currently, the amount of $18,244.92 is held in
a Treasury suspense account for Hyder Townsite.
The residents of Hyder Townsite have requested that the balance of
funds be transferred to a local bank account on their behalf. The
signature of the BLM trustee and the townsite representative would be
required to withdraw these funds from the account for public improvement
purposes.
ANALYSIS
Initially, we note that BLM must act in accordance with its own
regulations regarding townsite administration. Statutory regulations,
such as those applicable here, which are otherwise valid, have the force
and ef fect of law, and may not be waived by the agency in individual
cases. 60 Comp. Gen. 15, 26(1980).
Here, the pertinent BLM regulation provides that net income to the
trustee from sales and assessments "may be used by the trustee on
direction of the Secretary of the Interior, where the town is
unincorporated, in making public improvements, or, if the town is
incorporated such remaining proceeds may be turned over to the
municipality for the use and benefit thereof." Id. at Sec. 2565.7.
Accordingly, because Hyder Townsite is not incorporated, the funds in
question may be used only "by the Trustee on direction of the Secretary
of the Interior in making public improvements."
Accordingly, BLM may not unconditionally transfer the funds in
question to any "representative" of Hyder Townsite or take any other
action which relieves the Hyder Townsite trustee of his fiduciary
responsibility under the regulation to ensure that the funds are used
"in making public improvements."
However, we conclude that BLM's proposed action in this case would
not constitute an impermissible transfer of the funds in question to the
townsite representative. Under the BLM proposal, the Hyder Townsite
trustee would retain control over the funds because his signature would
be necessary to withdraw funds from the account for public improvement
purposes. The use of a bank account requiring the signatures of both
the townsite trustee and a townsite representative constitutes a
reasonable mechanism by which the trustee may administer the funds and
ensure that the funds are "used in making public improvements." There is
no requirement in the law or regulations that the townsite community
have no element of control in the decision-making process.
Accordingly, this Of fice has no objection to certification for
payment of a check for $ 18,244.92 made payable jointly to a BLM trustee
and a representative of Hyder Townsite for the pur- pose of depositing
those funds in an account in a local bank for benefit of the townsite.
Comptroller General
of the United States
1/ The Federal Land Policy and Management Act of 1976 repealed
section 11 of the 1891 law. Pub. L. No. 94-579, Sec. 703(a), October
21, 1976, 90 Stat. 2790. However, the Act included a savings clause
providing: "Nothing in this Act shall be construed as terminating any
land use right or authorization existing on the date of approval of this
Act." Id. Sec. 701, 90 Stat. 2786. Accordingly, because the Hyder
Townsite was established under section 11 prior to its repeal, that
statute and its associated regulations remain applicable to BLM
administration of the Hyder Townsite.
2/ There are currently 64 lots and 10 blocks remaining undeeded.
File: B-219740.3
Date: February 23, 1989
The Honorable David Pryor
Chairman, Subcommittee on Federal Services, Post Office, and Civil
Service
Committee on Governmental Affairs
United States Senate
Dear Mr. Chairman:
This is in response to your recent inquiry as to the legality of the
determination by the Office of Personnel Management (OPM) to extend
coverage under the Federal Employees Health Benefits Program (FEHBP) to
certain temporary Schedule C employees.
By Interagency Advisory Group memorandum dated February 1, 1989, OPM
determined to provide FEHBP coverage for individuals occupying
"Identical Temporary Schedule C" (ITC) and "New Temporary Schedule C"
(NTC) positions. Temporary appointments to these positions, as
authorized by 5 C.F.R. Sec. 213.3302 (1988), "may be made for 120 days,
with one additional extension of 120 days." According to OPM, these ITC
and NTC positions are used during the transition between Presidential
Administrations and are filled by individuals who will be appointed to
permanent positions in the new Administration. For the reasons stated
hereafter, we conclude that OPM's determination is inconsistent with its
current FEHBP regulations. The definition of "employee" in the FEHBP
statute, 5 U.S.C. Sec. 8901(1) (1982), does not include
"(iv) an employee excluded by regulation of the Office of
Personnel Management under section 8913(b) of this title . . . ."
Section 8913(b) of title 5 provides OPM with discretionary authority to
prescribe regulations necessary to carry out the FEHBP, including the
authority to prescribe the conditions under which an employee is
eligible to enroll in an approved health insurance benefits plan and the
authority to exclude an employee on the basis of the nature and type of
employment. Under this authority, OPM has issued regulations which
exclude from FEHBP coverage (among other categories of exclusions)
employees serving under appointments of 1 year or less.
Thus, 5 C.F.R. Sec. 890.102 (1988) provides, in part:
"(c) The following employees are not eligible:
"(1) An employee serving under an appointment limited to 1 year or
less, except an acting postmaster, and a Presidential appointee
appointed to fill an unexpired term."
Section 890.102(e) of the regulations provides:
"The Office of Personnel Management makes the final determination
of the applicability of this section to specific employees or
groups of employees."
In response to our request for comments, the OPM General Counsel, by
letter dated February 22, 1989, argues that the ITC and NTC employees
are distinguishable from other temporary employees since they are
appointed with the expectation that they will soon receive permanent
Schedule C appointments and since they may be converted to permanent
Schedule C positions without first being listed on an appropriate
register. Based on that distinction, the OPM General Counsel contends
that OPM properly exercised its discretionary authority in 5 C.F.R.
Sec. 890.102(e) to extend FEHBP coverage to these ITC and NTC
employees.
We recognize that OPM has the regulatory authority to include and
exclude certain classes of employees for purposes of FEHBP coverage.
However, we believe that OPM acted in a manner inconsistent with its own
regulations by allowing the ITC and NTC temporary employees health
insurance coverage since the applicable regulation, 5 C.F.R. Sec.
890.102(c)(1), expressly and unequivocally excludes employees serving
under an appointment of 1 year or less, with two specific exceptions not
applicable here. The exclusion under 5 C.F.R. Sec. 890.102(c) (1) of
temporary employees serving under appointments of 1 year or less applies
equally to all such appointments, including ITC and NTC appointments. 1/
We also recognize that OPM has reserved authority under 5 C.F.R. Sec.
890.102(e) to make final determinations concerning the applicability of
section 890.102. However, while this authority provides OPM with
discretion to interpret the regulation, it cannot be used to waive or
ignore the plain terms of the regulation.
We therefore conclude that the current provisions of its statutory
regulations do not support OPM's determination to grant ITC and NTC
employees health insurance benefits coverage.
Sincerely yours,
Comptroller General of the United States
FOOTNOTES
1/ Only employees who are not members of an excluded class have a right
to health insurance benefits. Anderson v. United States, 5 Cl. Ct.
573, 580 (1984), aff'd, 764 F. 2d 849 (Fed. Cir. 1985).
FILE: B-219732 DATE: October 8, 1985
MATTER OF: L. H. Morris Electric Inc.
DIGEST:
1. A bidder is responsible for receipt of amendments unless it
is shown that the contracting agency made a deliberate effort to
exclude the bidder from competing. Where no such effort is shown,
a bid that fails to acknowledge a material amendment is properly
rejected as nonresponsive.
2. Bid's failure to acknowledge an amendment adding terms
necessary to meet local legal requirements for construction
project may not be waived as being trivial since the terms are
necessary to meet county requirements and there is no showing that
those requirements could be met by severing and procuring anew a
negligibie portion of the project.
3. Negotiations are not permitted in a procurement using sealed
bidding.
L. H. Morris Electric Inc. (Morris) protests the rejection of its
low bid as nonresponsive for failure to acknowledge an amendment to
invitation for bids (IFB) DTFA 11-85-B-00167, issued by the Federal
Aviation Administration (FAA) for the construction of runway
improvements at the Corvallis Municipal Airport in Benton County,
Oregon.
The protest is denied.
Amendment No. 1 to the IFB included three drawings that required an
additional crushed rock walkway, the installation of a disconnect switch
and conduit risers on wood posts, the addition of two extra inches of
asphalt to driveway connections, the use of 24-inch rather than a
30-inch steel pipe under the county road and the construction of
culverts tnat are 12-inches by 28-feet of concrete rather than 12-inches
by 20-feet of corrugated metal. According to FAA, most of the changes
were made to meet county legal requirements for driveway connections to
county roads and for certain types of culverts.
Five bids were received in response to the IFB, ranging from Morris'
low bid of $47,987 to $84,326. The next low bid was $63,209. Morris
clearly indicated on its bid that it had received no amendment. The
other four bidders acknowledged receipt of the amendment. The FAA,
estimating that the amendment's changes will cost an additional $1,400,
determined that the amendment involves requirements that are material as
to price and quality, and rejected Morris' bid because it failed to
acknowledge the amendment.
Morris alleges that it never received the amendment, and that the
amendment would not have affected its price. Further, Morris contends
that the FAA, before rejecting the bid, should have conducted
discussions regarding the impact of the amendment on price.
It is well established that a bidder bears the risk of not receiving
IFB amendments unless it is shown that the contracting agency made a
deliberate effort to exclude the bidder from competing. TCA
Reservations, Inc., B-218615, Aug. 13, 1985, 85-2 C.P.D. P 163; Triple
A Shipyards, B-218079, Feb. 6, 1985, 85-1 C.P.D. P 149. Where a bid
fails to acknowledge a material amendment, the bid is nonresponsive and
generally must be rejected since the government's acceptance of the bid
would not legally obligate the bidder to meet the terms of the
amendment. Power Service, Inc., B-218248, Mar. 28, 1985, 85-1 C.P.D. P
374.
We believe the amendment here is material since its terms are
necessary to meet county legal requirements, and there is no showing
that those requirements otherwise can be met by severing and procuring
anew a negligible portion of the project. See Leslie & Elliott Co.,
B-216676, Feb. 19, 1985, 64 Comp. Gen. 279, 85-1 C.P.D. P 212, aff'd,
Ryan Electric Co.--Reconsideration, B-218246.2, Apr. 1, 1985, 85-1
C.P.D. P 366. The FAA determined that the impact is material, and
Morris has not rebutted that determination. Under these circumstances,
we agree with FAA's determination.
Regarding Morris' willingness to comply with the amendment's
requirements at no cost, the government may not permit a bidder after
bid opening to cure the failure to acknowledge a material amendment.
Grade-Way Constr. v. United States, 7 Cl. Ct. 263 (1985). A bidder's
intention to comply with the material terms of an IFB must be manifest
from the bid itself and may not be provided by explanations after bid
opening. TCA Reservations, Inc., B-218615, supra. Since Morris' bid did
not reflect its intention to be bound by the material construction
changes, it was properly rejected as being nonresponsive.
Finally, with regard to Morris' contention that discussions should
have been conducted, we note that negotiations are not permitted in a
procurement using sealed bidding. See W.M. Grace, Inc., B-1 97192, Jan.
10, 1980, 80-1 C.P.D. P 33.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-219681.2 DATE: October 23, 1985
MATTER OF: Lion Brothers Company, Inc.--Reconsideration
DIGEST:
GAO will not reopen a protest file closed because more than 7
working days after the contracting agency report was received (on
the scheduled due date) the protester had not commented on the
report or stated an interest in having the protest decided on the
existing record. GAO's acknowledgment of the protest gave notice
that the protest file would be closed in that event and reopening
the file would be inconsistent with expeditious consideration of
the protest.
Lion Brothers Company, Inc. (Lion Brothers), requests that we reopen
the file on its protest under request for proposals (RFP) USSS-85-7.
We will not reopen the file.
We closed the file because the report on the protest was received
from the contracting agency on the scheduled due date, September 19,
1985, and more than 7 working days later we had not received any
communication from Lion Brothers regarding the protest.
The August 14, 1985, acknowledgment of the protest sent to Lion
Brothers by our Office gave notice to Lion Brothers of the date we
expected to receive the contracting agency report, that we would assume
that it receives the report when we receive ours and that under section
21.3(e) of our Bid Protest Regulations, 4 C.F.R. Sec. 21.3(e) (1985), it
had an obligation within 7 working days after the report is received to
submit written comments or state that it wants the protest decided on
the existing record. Lion Brothers failed to comply with this
obligation. The notice stated that, if we did not hear from Lion
Brothers by the seventh working day, we would close the file.
Lion Brothers states that it did not receive a copy of the report
until October 3, 1985, and used this date as the date from which the 7
days was to start to run. However, in our acknowledgment notice, which
Lion Brothers claimed not to have received until September 19, 1985,
although the date stamp on the notice indicates that it was received on
August 19, 1985, we stated that the protester was to notify GAO promptly
if it had not received the report by the due date. If there was no such
notification requirement, the protester could idly await the report for
an indefinite period of time to the detriment of the protest system
generally, as well as our ability to resolve protests expeditiously as
required by the Competition in Contracting Act. See Del-Jen,
Inc.--Reconsideration, B-218136.3, June 10, 1985, 85-1 C.P.D. P 659.
Therefore, when Lion Brothers did not receive the report on the due
date, they should have notified our Office promptly.
Accordingly, our dismissal of the protest, for the reason that after
receipt of the report more than 7 days lapsed and no communication was
received from Lion Brothers concerning the protest, is affirmed. See
Del-Jen, Inc.-- Reconsideration, B-218136.3, supra.
Harry R. Van Cleve
General Counsel
FILE: B-219585-3 DATE: October 23, 1985
MATTER OF: Dunbar & Sullivan Dredging Co.--
Request for Reconsideration
DIGEST:
GAO will not reopen a protest file closed because more than 7
working days elapsed after the date anticipated for receipt of the
contracting agency report and after the report was received before
the protester's comments were filed in our Office. GAO's
acknowledgment of the protest gave notice to the protester that
receipt of the report would be presumed to be on the anticipated
date, but the protester failed to advise us of lack of receipt
within the 7-day comment period as required by our Bid Protest
Regulations.
Dunbar & Sullivan Dredging Co. (D&S) requests reconsideration of our
dismissal of its protest concerning the award of a contract by the
Department of the Army, Corps of Engineers (Army), under solicitation
No. DACW49-85-B-0019. He received the agency report on September 19,
1985, and closed our file on October 3, 1985, because D&S had not filed
a statement of continued interest in the protest within 7 days after
receipt of the agency report as required by our Bid Protest Regulations,
4 C.F.R. Sec. 21.3(e) (1985). 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 extension of
the period for submitting comments within the 7-day period will result
in the dismissal of the protest.
We affirm the dismissal.
D&S asserts that it received the agency report on September 24, 1985,
and timely filed its comments on October 3, 1985, the seventh working
day thereafter. We note that the comments were filed in our Office on
October 3, after the dismissal notice had been sent to D&S.
Our acknowledgment notice, sent to D&S shortly after its protest was
filed, stated that the agency report should be received by September 20,
1985, and that D&S should promptly notify our Office if it did not
receive the report by that date. The notice further advised that unless
we heard from D&S, we would assume it received a copy of the report when
we received ours. This notice made clear to the protester that our
Office would presume that the 7-day comment period commenced, at the
latest, on September 20, 1985, the due date listed for the report,
unless we were notified tnat the protester had not received the report
by the stated due date. Del-Jen, Inc.--Reconsideration, B-218136.3,
June 10, 1985, 85-1 C.P.D. P 659. No such notice was received by our
Office.
The effect of the presumption regarding receipt of the report is to
place the slight burden on the protester to advise us if it did not
receive an agency report when due, since we otherwise would have no way
of knowing whether or not the protester received the report. Our Office
generally is required to issue a final decision within 90 working days
after the protest is filed, while the contracting agency is afforded 25
working days after notification of the protest to prepare its report.
31 U.S.C. Secs. 3553, 3554, as added by the Competition in Contracting
Act, Pub. L. No. 98-369, 31 U.S.C. Sec. 2741, 98 Stat. 1175, 1199
(1984). If there were no requirement that a protester notify our Office
of its failure to receive a report, then the protester could idly await
the report for an indefinite time to the detriment of tne protest system
generally, as well as to our ability to resolve bid protests
expeditiously. See AFL-CIO Applachian Council Inc.--Reconsideration,
B-218090.2, May 10, 1985, 64 Comp. Gen. , 85-1 C.P.D. P 528.
Since D&S neither filed comments nor notified our Office within the
7-day period that it had not timely received the agency report, our
dismissal is affirmed.
Harry R. Van Cleve
General Counsel
File: B-219546.2
Date: January 30, 1989
DIGEST
An employee may not be reimbursed for a tax service fee or a broker fee
as relocation expenses. Both fees are finance charges under the Truth
in Lending Act, Regulation Z, since they are fees imposed in connection
with the extension of credit. Except as specifically provided, the
Federal Travel Regulations preclude reimbursement for finance charges.
Ms. Sue Wolohan
Chief, Accounting Section
Internal Revenue Service
Department of the Treasury
841 Chestnut Street
Philadelphia, PA 19107
Dear Ms. Wolohan:
This is in response to your letter of December 9, 1988, reference:
RM:F:A, concerning the claim of Mr. Joseph F. Kump, an employee of the
Internal Revenue Service. Mr. Kump seeks reimbursement for a tax
service fee and a broker fee as relocation expenses in connection with
his transfer from Philadelphia, Pennsylvania, to Wilmington, Delaware.
In our opinion, both the tax service fee and the broker fee are finance
charges under the Truth in Lending Act, Regulation Z, 12 C.F.R. part
226, and therefore are not reimbursable under the Federal Travel
Regulations (FTR) which govern the reimbursement of relocation expenses.
1/
The FTR, para. 2-6.2d(1), lists those miscellaneous settlement expenses
which are reimbursable, while para. 2-6.2d(2) specifically precludes
reimbursement for finance charges as defined under the Truth in Lending
Act, Regulation Z, 12 C.F.R. part 226. The tax service fee was paid to
Citicorp Mortgage, Inc., the lender, to establish an account for the
payment of real estate taxes by the lender. The broker fee, which was 1
percent of the loan, was paid to BFG Financial Services for services
rendered in obtaining the mortgage. This fee was in addition to a
1-percent loan origination fee which has been reimbursed by the agency.
Both of these fees appear to be service charges imposed incident to the
extension of credit and as such they constitute finance charges which we
have consistently held are not reimbursable under the Federal Travel
Regulations. 2/
Sincerely yours,
Henry R. Wray, Senior Associate General Counsel
FOOTNOTES
1/ FTR, para. 2-6.2d (Supp. 4, Aug. 23, 1982), incorp. by ref., 41
C.F.R. Sec. 101-7.003 (1987).
2/ John S. Derr, B-215709, Oct. 24, 1984; Ronald J. Walton, B-215699,
Oct. 2, 1984.
FILE: B-219524 DATE: October 3, 1985
MATTER OF: MetaMetrics Inc.
DIGEST:
1. GAO will not disturb contracting agency's determination that
protester's offer is technically unacceptable for failure to
propose- personnel meeting minimum education and experience
requirements where the protester has not established that the
determination was unreasonable or in violation of procurement
statutes or regulations.
2. Contracting agency's rejection of offer as technically
unacceptable is reasonable where offeror submits resumes of
proposed key personnel for evaluation and one of the individuals
does not meet education and experience requirements.
MetaMetrics Inc. protests the award of a contract to Caliber
Associates, Inc., under request for proposals (RFP) No.
N00604-85-R-0041, issued on February 7, 1985, by the Naval Supply
Center, Pearl Harbor, Hawaii. The RFP sought proposals to analyze and
evaluate a 3-year family advocacy project. The project is designed to
demonstrate the effectiveness of a coordinated approach by the military
services and the state of Hawaii in providing a broad spectrum of
services to prevent and remedy family violence within the military.
MetaMetrics contends that the Navy improperly determined that its
proposal was technically unacceptable.
For the reasons set forth below, we deny the protest.
Three proposals were received by the Navy in response to the RFP. A
Navy technical evaluation panel determined that MetaMetrics' proposal
was unacceptable in the area of personnel education and experience.
Clause M21( a) of the RFP requires that proposed key personnel "possess
a graduate degree in the health, social, or behavioral sciences." The
term "key personnel" is defined in the solicitation to mean those
persons whose resumes were submitted by an offeror in its proposal for
evaluation by the Navy.
According to MetaMetrics' proposal, two of the five staff members for
whom MetaMetrics submitted resumes did not have graduate degrees. (One
of the individuals has virtually completed his doctorate degree in
Economics. His education was not cited as a deficiency by the
evaluation panel and, consequently, is not an issue here.) Clause M21(
a) also requires offerors to provide "documented evidence of
research/evaluation activities in the area of child abuse, neglect, and
spouse abuse in military family settings for a minimum of 4 years." The
evaluation panel concluded that neither the company nor any of its
proposed staff had this experience.
In light of this technical evaluation, the contracting officer asked
MetaMetrics to provide additional information to establish that its
proposed personnel met the minimum education and experience
requirements. The firm's response repeated the information contained in
its proposal regarding- the academic degrees of the proposed staff.
MetaMetrics also stated that its proposed principal researcher had
conducted research on child abuse, neglect, and spouse abuse in military
family settings while managing social work programs for a military
service. In support of this statement, the firm reported that on two
occasions its principal researcher had developed forms for collecting
data on child and spouse abuse and had provided "intensive evaluation
and consultation" for several military family advocacy programs.
The technical evaluation panel reviewed MetaMetrics' additional
submission and concluded that, while the proposed principal researcher
had extensive clinical treatment, consultation, and program management
experience in the field, he did not have the necessary research /
evaluation experience. Again, the contracting officer asked MetaMetrics
to address the minimum experience requirements. The firm responded
generally that its principal researcher had performed research and
evaluation in the areas of family violence and family advocacy, but that
he had not conducted intensive, long-term evaluations.
Notwithstanding MetaMetrics' additional submissions, the Navy
concluded that the firm's proposed personnel did not meet the minimum
education and experience requirements of the RFP. Following the Navy's
award of a contract to Caliber on July 5, 1985, MetaMetrics protested to
our Office.
In considering a protest of this nature, we do not reevaluate
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 of f icials 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 the procurement statutes and
regulations. Essex Electric 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 af f irmatively 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.
We believe that the Navy's evaluation of MetaMetrics' technical
proposal was reasonable. MetaMetrics' proposal includes a resume for a
staff member without a graduate degree in the health, social, or
behavioral sciences. In its comments on the Navy report, MetaMetrics
contends that the individual involved, an analyst and project secretary,
was not key to the conduct of the project. MetaMetrics argues that it
was unreasonable to apply the minimum educational qualif ications to all
proposed personnel. Since MetaMetrics included in its proposal a resume
for the proposed staff member and the RFP def ined "key personnel" as
those for whom resumes were submitted, we think that the Navy reasonably
considered the requirements for key personnel to be applicable. Cf.
Numax Electronics Inc., B-210266, May 3, 1983, 83-1 C.P.D. P 470 (where
the resumes of proposed personnel do not establish that they meet the
experience requirements stated in the RFP, rejection of the proposal as
technically unacceptable is reasonable).
Further, we find no documentation in MetaMetrics' proposal
establishing that the firm or any of its staff have conducted
research/evaluation activities in the area of child abuse, neglect and
spouse abuse in military family settings for 4 years. MetaMetrics
asserts in its protest letters that its principal researcher has 10
years of such experience, but provides no evidence of this in addition
to its previous submissions to the Navy. Although MetaMetrics takes
issue with the Navy's determination that its proposed team does not meet
the minimum qualif ication standards, the protester has submitted no
evidence indicating that the Navy's technical conclusions were
unreasonable.
Accordingly, we find no basis to object to the Navy's determination
that MetaMetrics' proposal was technically unacceptable. We deny the
protest.
Harry R. Van Cleve
General Counsel
File: B-219495.2; B-233323.2
Date: March 20, 1989
DIGESTS
1. General Accounting Office has no comments on Federal Acquisition
Regulation (FAR) case No. 85-32, a proposed rule to revise FAR Parts 14,
15, and 52 to implement Public Law Nos. 98-577 and 98-591, which require
offerors in certain noncompetitive acquisitions to certify that the
prices offered to the government for parts or components sold to the
public are not higher than the offerors' lowest commercial prices, or
justify higher prices in writing.
2. General Accounting Office has no comments on Federal Acquisition
Regulation (FAR) case No. 88-56, a proposed rule to add paragraph (c) to
FAR section 47.104-4 and a contract clause at FAR section 52.247-65
concerning the submission of commercial freight bills to the General
Services Administration for audit.
Margaret A. Willis
FAR Secretariat
General Services Administration
Dear Ms. Willis:
This responds to your letter of November 29, 1988, requesting our
comments on Federal Acquisition Regulation (FAR) case Nos. 85-32 and
88-56.
FAR case No. 85-32 is a proposed rule to revise FAR Parts 14, 15 and 52
to implement Public Law Nos. 98-577 and 98-591, which require offerors
in certain noncompetitive acquisitions to certify that the prices
offered to the government for parts or components sold to the public are
no higher than the offerors' lowest commercial prices, or justify higher
prices in writing. FAR case No. 88-56 is a proposed rule to add
paragraph (c) to FAR section 47.104-4 and a contract clause at FAR
section 52.247-65 concerning the submission of commercial freight bills
to the General Services Administration for audit.
We have no objection to the proposed changes.
Sincerely yours,
James F. Hinchman, General Counsel
FILE: B-219343.3 DATE: October 4, 1985
MATTER OF: Bauer of America Corp. & Raymond
International Builders, Inc., A Joint
Venture
DIGEST:
1. Requirement for meaningful discussions does not obligate
agencies to identify every aspect of a technically acceptable
proposal that receives less than a maximum score, nor does it
require agencies to advise offerors of the relative standing of
their price proposals.
2. Where an agency does not discuss concerns about proposed
key personnel, but the record indicates that even if the offeror
were awarded the maximum score for this criterion, in view of its
higher proposed price, the relative standing of offerors would not
change, the lack of discussions provides no basis to sustain the
protest.
3. Protest that an agency's inclusion of certain elements of a
protester's technical approach in an amendment to the solicitation
resulted in an unfair technical transfusion is untimely where this
contention, which involves an alleged solicitation impropriety, is
not raised before the next closing date for receipt of proposals
following the amendment.
4. Awardee's inadvertent f ailure expressly to acknowledge an
amendment to a solicitation on the standard form attached to its
best and final offer does not affect the validity of the award
where the record demonstrates that the awardee's best and final
offer incorporated the work required under the amendment.
Bauer of America Corp. & Raymond International Builders, Inc., A
Joint Venture, protests the award of a firm-fixed price contract to
RECOSOL, Incorporated under request for proposals (RFP) No.
4-SP-40-02380, issued by the Bureau of Reclamation, Department of the
Interior. The contract is for repair of Fontenelle Dam in Lincoln
County, Wyoming.
Bauer contends that Interior failed to conduct meaningful discussions
because it did not identify def iciencies in Bauer's technical and cost
proposals; that the agency's incorporation of certain elements of
Bauer's proposal in amendments to the solicitation amounted to an
improper technical transfusion; and that Interior should have excluded
RECOSOL from award due to RECOSOL's failure to acknowledge a material
amendment to the solicitation.
We deny the protest in part and dismiss it in part.
BACKGROUND
Interior issued the solicitation on December 3, 1984 for the
construction of a test section of a proposed concrete diaphragm wall
that is designed to prevent the possible failure of the dam. The RFP
set forth the following technical evaluation criteria: concrete
diaphragm wall construction (practicality and suitability of methods);
key personnel; corporate experience; and safety. These criteria were
assigned maximum point scores of 65, 15, 15, and 5, respectively. Price
scores were to be established by dividing the lowest offer by the offer
heing scored and multiplying this fraction by 100. The technical score
comprised 70 percent of the total evaluation score, and the price score
comprised the remaining 30 percent.
Interior received initial proposals from six firms. Three were
determined to be within the competitive range; of these, Bauer's
received the lowest technical score, 85.8, and RECOSOL's the highest,
94.5. Taking price into consideration, Bauer's ranked third with a
total of 87.96 points, while RECOSOL's remained high with 96.15. (The
second-ranked proposal is not at issue here.)
Discussions were held during the last 2 weeks of April 1985, after
which Interior requested best and final offers. Except for
incorporating by reference the most recent RFP modif ications, no
offeror changed its technical proposal, and proposed prices were
virtually the same as originally submitted. Consequently, during the
final evaluation Interior again ranked Bauer's proposal third. On May
15, Interior awarded a contract to RECOSOL.
BAUER'S PROTEST
A. Access to Procurement Information
Bauer initially complains that Interior has denied it access to
certain information and documents that it believes would be useful in
the development of its protest. In particular, Bauer refers to those
documents that Interior supplied to our Off ice that were not included
with Bauer's copy of the administrative report.
Under the Competition in Contracting Act of 1984, 31 U.S.C.A. Sec.
3553(f) (West Supp. 1985), the procuring agency has the primary
responsibility for determining which documents are subject to release,
and we will not question the agency determination in the absence of a
showing of fraud or bad faith on the part of contracting officials. See
Employment Perspectives, B-218338, June 24, 1985, 85-1 C.P.D. P 715. No
such showing has been made here. In addition, we have reviewed the
documents in question, and we base our decision on the entire record,
not merely those portions of it that have been provided to the
protester.
B. Adequacy of Discussions
Bauer contends that Interior failed to conduct meaningful discussions
after its initial proposal was included in the competitive range. Other
than discussing two minor matters regarding Bauer's price proposal, the
agency did not point out any deficiencies that had been identified
during the evaluation of Bauer's proposal. Bauer maintains that it
therefore was misled into believing that there were no weaknesses in its
technical or price proposals, and, consequently, it made no revisions in
its best and final offer.
Agencies generally must conduct written or oral discussions with all
responsible offerors within a competitive range, and this includes
advising offerors of deficiencies in their proposals, so that they have
an opportunity to satisfy the government's requirements. Federal
Acquisition Regulation, 48 C.F.R. Sec. 15.610 (1984). This requirement
can be satisfied only when discussions are meaningful, which means that
negotiations should be as specific as practical considerations will
permit. Tracor Marine Inc., B-207285, June 6, 1983, 83-1 C.P.D. P 604.
Agencies are not obligated, however, to af ford offerors
all-encompassing negotiations. The content and extent of discussions
in a given case are matters of judgment primarily for determination by
the agency involved and are not subject to question by our Office unless
without a reasonable basis. Information Network Systems, B-208009, Mar.
17, 1983, 83-1 C.P.D. P 272. Where a proposal is considered to be
acceptable and in the competitive range, the agency is under no
obligation to discuss every aspect of it that has received less than the
maximum possible score. See ADP Network Services, Inc., B-200675, Mar.
2, 1981, 81-1 C.P.D. P 157. Moreover, an agency may not advise an
offeror of its price standing relative to other offerors, although the
agency may inform an offeror that its cost or price is considered too
high or unrealistic. 48 C.F.R. Sec. 15.610(d)(3)(ii).
Bauer's proposal, while not receiving a perfect score for each
criterion, was rated highly by Interior. The technical evaluation panel
gave it relatively high scores for three of four evaluation criteria,
namely, concrete diaphragm wall construction, corporate experience, and
safety. For 16 of 17 subcriteria in these areas, Bauer received scores
that averaged one point or less below the maximum possible. Thus,
weaknesses in three areas were minor, and we believe that Interior was
not obligated to advise Bauer of them. See Dynalectron Corp.--PacOrd,
Inc., B-217472, Mar. 18, 1985, 85-1 C.P.D. P 321.
It is arguable that the agency should have advised Bauer that it was
concerned that proposed key personnel lacked experience in the specific
type of construction necessary for the work on Fontenelle Dam. Of 15
possible points for this criterion, Bauer received only 9.2 (61
percent), while RECOSOL received 14.8 (99 percent). However, even if
Bauer had received the maximum possible points for key personnel, in
view of its higher proposed price, its composite score (92.02) would
have remained below RECOSOL's (96.15). Thus, Interior's failure to
discuss this aspect of Bauer's proposal provides no basis for sustaining
the protest. Cf. Southwest Marine, Inc., B-198701, Aug. 15, 1980, 80-2
C.P.D. P 123 (where discussions and an opportunity to correct a
particular deficiency will not change the relative position of offerors,
we will not consider agency's alleged improper failure to point out the
deficiency).
Bauer also contends that Interior failed to conduct meaningful
discussions with respect to its price proposal. The protester states
that since the contract was to be awarded on a firm-fixed price basis,
it should have been advised whether or not it used realistic cost
estimates in calculating its price.
Interior considered the price proposals of all three offerors in the
competitive range to be quite competitive and, therefore, reasonable.
The agency also had no major concerns about individual line items. The
highest price proposal (Bauer's) and the lowest (RECOSOL's) dif fered by
less than 1 percent. Under the circumstances, we believe that Interior
acted reasonably in not discussing Bauer's price proposal.
C. Technical Transfusion
Bauer next alleges that Interior's incorporation of certain elements
of its proposal in amendments to the solicitation presented to offerors
during discussions resulted in an unfair technical transfusion of an
innovative approach included in Bauer's proposal. Bauer states that one
of the amendments incorporated its testing technique for plotting
excavations. By including this technique in the solicitation, Bauer
argues, Interior gave the other offerors guidance for assuring quality
control and, consequently, made it possible for them to lower their
prices.
This basis of protest is untimely. Under our Bid Protest
Regulations, protests based upon alleged improprieties that do not exist
in an initial solicitation but which are subsequently incorporated must
be protested no later than the next closing date for receipt of
proposals following their incorporation. 4 C.F.R. Sec. 21.2(a) (i)
(1985). Therefore, Bauer's protest concerning the content of the
amendment should have been filed before the May 8 closing date for
receipt of best and final offers. See The Advantech Corp., B-207793,
Jan. 3, 1983, 83-1 C.P.D. P 3. Since Bauer did not file its protest
until June 4, well after this date, we dismiss this basis of protest.
D. Failure to Acknowledge Amendment.
Bauer's final ground of protest is that RECOSOL failed to acknowledge
amendment 6 on Standard Form 1442, the cover sheet submitted with its
best and final offer. Although there is no dispute that RECOSOL
acknowledged this amendment when submitting its initial proposal, Bauer
questions whether RECOSOL is legally bound to perform the work required
by this amendment. Bauer additionally questions whether its and
RECOSOL's best and final offers were for the same work.
The record shows that RECOSOL's initial proposal was incorporated in
its best and final offer and that changes in both the scope and schedule
of work covered by the amendment were included in that of fer. Thus,
RECOSOL's signature on the best and final offer ensures that Interior's
acceptance of it obligates the firm to perform in accord with the terms
of the solicitation, including those set forth in amendment 6. Cf.
First Federal Data Services, B-216487, Dec. 21, 1984, 84-2 C.P.D. P 685
(bidder's failure to acknowledge amendment formally may be waived when
bid clearly indicates that the firm received it). Therefore, RECOSOL's
inadvertent failure to expressly acknowledge this amendment on the cover
sheet of its best and final offer does not affect the validity of the
award.
We dismiss the protest with regard to alleged technical transfusion
and deny the remainder.
Harry R. Van Cleve
General Counsel
FILE: B-219327.4 DATE: October 8, 1985
MATTER OF: The W.H. Smith Hardware Company
DIGEST:
Where a small business concern is
determined to be nonresponsible and the
Small Business Administration refuses to
issue a certificate of competency, GAO
will not review this refusal unless the
protester makes a prima facie showing of
fraud or bad faith, or the failure to
consider information bearing on the
concern's responsibility. Disagreement
over delinquency rate (37 percent versus
16.5 percent) does not amount to showing
of bad faith.
The W.H. Smith Hardware Company (Smith) protests the contracting
officer's determination that the firm was non-responsible and the Small
Business Administration's (SBA) refusal to issue Smith a certificate of
competency (COC) in connection with solicitation No. DLA7OO-85-B-0286
issued by the Defense Logistics Agency (DLA).
We dismiss the protest.
In The W.H. Smith Hardware Company, B-219327, et al., July 24, 1985,
85-2 C.P.D. P 82, Smith initially complained that in connection with
this and four other solicitations, the SBA had delayed making final COC
determinations in order to consider DLA reports which, according to
Smith, improperly assessed the f irm's deliquency ratio on prior
contracts. Smith argued that the DLA's submission of these erroneous"
reports to SBA showed bad faith on the part of DLA contracting of f
icials. We dismissed Smith's protest because the matter of Smith's
responsibility was before the SBA which is authorized to determine
conclusively the responsibility of small business concerns by issuing or
refusing to issue a COC. 15 U.S.C. Sec. 637(b)(7) (1982). In this
regard, we also explained that our Office limits its review of a denial
of a COC to instances in which the protester makes a prima facie showing
of fraud or bad faith on the part of contracting officials or that SBA
failed to follow its own regulations or consider material information in
reaching its decision. The W.H. Smith Hardware Company, B-219327, et
al., supra.
Smith now argues that we should consider its allegation of bad faith
because SBA declined to issue the firm a COC.
To establish bad faith, the courts and our Office require the
presentation of virtually irrefutable proof that government officials
had a "specific and malicious intent" to injure the protester. See
A.R.E. Manufacturing Co., Inc., B-217515, et al., Feb. 17, 1985, 85-1
C.P.D. P 162. Here, SBA's denial of the COC states that it was based on
"all (the) information and data supplied" including reports submitted
from both DLA and Smith concerning the firm's past performance record.
While Smith disputes the conclusion reached by SBA because it disagrees
with the delinquency rate in the contracting officer's referral (33
percent) and contends it should be 16.5 percent, this disagreement does
not amount to a showing of bad faith or provide our Office with other
grounds to undertake an independent review of SBA's decision. See
Franklin Wire & Cable Company, B-218557, et al., May 7, 1985, 85-1
C.P.D. P 511; J.E. McAmis, Inc., B-214516, July 16, 1984, 84-2 C.P.D.
P 51.
Smith also complains that the SBA improperly failed to consider this
COC application separately from other COC applications the firm had
filed with the SBA in connection with other procurements. However,
Smith does not provide any evidence to show that its COC application was
not properly evaluated or that the result would have been different.
The protest is dismissed.
Harry R. Van Cleve
General Counsel
FILE: B-219323 DATE: October 2, 1985
MATTER OF: Fugro Inter, Inc.
DIGEST:
1. When a protester fails to diligently seek
information that would form the basis for
its protest, a protest filed 7 months after
award, although allegedly shortly after
information concerning the basis of protest
is received, is untimely.
2. Claim for proposal preparation costs is not
for consideration where protest is dismissed
as untimely.
Fugro Inter, Inc. protests the award of a contract to McClelland
Engineers, Inc. under request for proposals (RFP) No. C&P:84-267 issued
by Holmes & Narver, Inc., an operating contractor for the Department of
Energy. The solicitation sought proposals for an overwater subbottom
exploratory drilling project in the Marshall Islands. Essentially,
Fugro contends that the award was improper and that it is entitled to
proposal preparation costs because Holmes & Narver did not follow the
technical evaluation criteria set forth in the solicitation, or properly
establish the competitive range. In this regard the protester states
that Holmes & Narver gave too much weight to the cost factor and not
enough to the technical factors in the solicitation. Fugro also argues
that an amendment to the proposal was improperly rejected. Although the
contract was awarded on December 10, 1984, Fugro did not protest to our
Off ice until July 8, 1985. We dismiss the protest as untimely.
By letter of December 17, Holmes & Narver notif ied all offerors,
including Fugro, of the award to McClelland. That letter briefly
described the competitive range determination and the evaluation process
and informed the offerors that a formal debriefing would be scheduled if
there was sufficient interest. Although Fugro maintains that it tried
unsuccessfully to schedule a debriefing with the appropriate official,
it did not protest at that time. Fugro protested to our Office after
that firm was allegedly informed on July 2, 1985 by a Department of
Energy representative that McClelland's equipment was inadequate to
perform the contract.
Our Bid Protest Regulations require that protests be filed within 10
days after the basis for the protest is known or should have been known,
whichever is earlier. Bid Protest Regulations, 4 C.F.R. Sec. 21.2(a)
(2) (1985). A protester has an affirmative obligation to diligently
pursue the information that forms the basis of its protest and if it
does not do so within a reasonable time, our Office will dismiss the
ultimately-filed protest as untimely. See, e.g., South Bend Lathe,
Inc., B-216356, Sept. 24, 1984, 84-2 C.P.D. P 343.
Here, although Fugro maintains it unsuccessfully sought a debriefing
from Holmes & Narver, the protester indicates that it did not formally
request a debriefing until February 14, 2 months after award. 1/ That
firm did not protest to our Office until 7 months after award. Further,
the information the protester received in July regarding McClelland's
alleged performance problems had no direct relation to the basis of
protest. In any event, obtaining information 7 months after award can
hardly be termed as a diligent pursuit. Thus, the protest is untimely
both as to Holmes & Narver's selection of McClelland and its alleged
refusal to conduct a proper debriefing.
In view of the fact that we have not decided Fugro's protest on the
merits, we will not consider Fugro's claim for its proposal preparation
costs. See Daniels & Parker General Contractor, B-218342, May 10, 1985,
85-1 C.P.D. P 529.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
1/ Holmes & Narver states that it offered to make its procurement
personnel available to debrief Fugro. The protester, however, rejected
the debrief ing because Holmes & Narver technical personnel were not
available to attend.
FILE: B-219239.2 DATE: October 2, 1985
MATTER OF: Plastics Design, Inc. -- Request for
Reconsideration
DIGEST:
Detailed factual statement of basis of
protest filed on reconsideration request
later than 10 working days after protester
knew of basis is untimely and will not be
considered.
Plastics Design, Inc. (PDI) requests reconsideration of our decision
Plastics Design, Inc., B-219239, July 26, 1985, 85-2 C.P.D. P . PDI
stated in its original protest that, to help it in the preparation of
its bid price, it asked the contracting officer for the procurement
history of the item being purchased, and that the contracting of ficer
informed PDI that no history existed. According to PDI, it learned
after the award to another firm that the item did have an extensive
procurement history. PDI asserted that had it known the history at the
time it prepared its bid, it would have submitted a lower bid price and
might have received the award. We dismissed the protest because PDI
failed to detail any information in the procurement history to support
its claim of prejudice or to explain how that information would have led
it to bid differently. See 4 C.F.R. Sec. 21.1 (c)(4) (1985). We also
noted that there is no law or regulation that generally requires the
disclosure of the procurement history of items being purchased.
In its request for reconsideration, PDI explains that a major cost
factor in manufacturing the item is tooling. PDI states that had PDI
known the item had been procured previously, PDI--presumably as a
first-time manufacturer of the item--either would not have bid, or would
have bid lower and absorbed some of the tooling costs so as to be
competitive with prior suppliers that had already recovered their
tooling costs.
Under our Bid Protest Regulations, a party requesting reconsideration
must specify the "factual and legal grounds upon which reversal or
modifications is deemed warranted . . . ." 4 C.F.R. P 21.12( a). PDI's
reconsideration request is based on its statement concerning how it
might have structured its bid had it known that another company
previously had supplied the item being procured. That statement,
however, comes too late. Our Bid Protest Regulations require that a
protest, including a detailed statement of the basis for protest, must
be filed not later than 10 working days after the basis of protest is
known or should have been known, whichever is earlier. 4 C.F.R. P
21.2(a)(2). As noted in PDI's original protest letter, PDI learned of
the existence of the procurement history on June 17, 1985, and therefore
should have provided a detailed statement of its basis for protest
within 10 days thereafter. Its original protest contained no such
statement; only in the reconsideration request on August 14, 1985, does
PDI set forth the reason for its protest of the agency's failure to
inform it of the prior procurement history. The statement filed at this
late date obviously is untimely.
Our regulations do not permit piecemeal presentations of arguments,
La Barge Products, B-219345.3, Sept. 5, 1985, 85-2 C.P.D. , and we have
specifically held that parties failing to present all contentions for
our initial consideration do so at their own peril. Second Growth
Forest Management, Inc.--Reconsideration, B-218273.3, et a3., June 3,
1985, 85-1 C.P.D. P 632. Accordingly, we will not consider the
statement at this point and the request for reconsideration is denied.
Harry R. Van Cleve
General Counsel
FILE: B-219223.2 DATE: October 8, 1985
MATTER OF: Big Joe Manufacturing
Company--Request for Reconsideration
DIGEST.:
Request for reconsideration is dismissed where protester raises
no new facts or legal arguments which were not previously
considered while the initial protest was pending.
Big Joe Manufacturing Company requests reconsideration of our
decision in Big Joe Manufacturing Company, B-219223, Sept. 16, 1985,
85-2 C.P.D. P , denying its protest that the specifications in
invitation for bids No. DLA7OO-85-B-4520 unduly restrict competition in
that the specifications exceed the government's minimum needs. The
solicitation was issued by the Defense Construction Supply Center (DCSC)
for order-picking vehicles to be used at various Air Force commissaries.
The protester alleged among other things that the Air Force had not
adequately justif ied the solicitation's power steering requirement. As
a result of this alleged unduly restrictive requirement, the protester
contended that it was unfairly prevented from offering its product in
response to the government's solicitation. We determined that the Air
Force had established a prima facie case for specifying power steering
and that the protester had not shown that the Air Force's position was
arbitrary or otherwise unreasonable. The Air Force provided testing
data which showed that there were significant performance differences
that directly supported a finding that the use of power steering
increased operator control, productivity, and safety. Although the
protester contended that its order-pickers without power steering could
achieve performance standards for steering that should meet the Air
Force's minimum needs, it did not demonstrate in any way that the Air
Force's needs are other than what the testing shows is provided by power
steering.
Under our Bid Protest Regulations, 4 C.F.R. Sec. 21.12( a) (1985), 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. Tritan Corporation--Reconsideration, B-216994.2,
Feb. 4, 1985, 85-1 C.P.D. P 136. Big Joe Manufacturing Company's
request merely indicates its dissatisfaction with our decision by
reasserting its allegation that the government's specification for power
steering unduly and unfairly restricts competition by failing to state
the Air Force's actual requirements. The protester does not present any
new facts which were not previously considered by our Office or which
were not known by the protester at the time of its initial protest, nor
has it specified any error of law in our decision.
Accordingly, since the protester has provided no grounds for this
Office to reconsider our prior decision, we dismiss the request.
Harry R. Van Cleve
General Counsel
FILE: B-219173.2 DATE: October 28, 1985
MATTER OF: Sermor, Inc. -- Request for Reconsideration
DIGEST:
1. Issue raised for first time in request for reconsideration
will not be considered unless the request itself is a timely
protest.
2. Contention that contracting agency officials acted
fraudulently and in bad faith in determining that protester was
not responsible, first raised in request for reconsideration
sideration but based on some allegations made in original protest,
is untimely and will not be considered since the request was not
filed within 10 days of filing of original protest, the date on
which, at the latest, the protester knew or should have known the
basis of protest.
3. Challenge to denial of certificate of competency (C.O.C.) by
Small Business Administration (SBA) on grounds that SBA officials
acted fraudulently and in bad faith, first raised in request for
reconsideration, is untimely and will not be considered since
request was not filed within 10 days after the protester was
notified that its C.O.C. application had been denied, and thus
knew or should have known the basis of protest.
Sermor, Inc., a small business, requests reconsideration of our
decision Sermor, Inc., B-219173, July 17, 1985, 85-2 CPD P 56,
dismissing its protest challenging the Army's determination that Sermor
was nonresponsible under invitation for bids (IFB) No.
DAAEO7-85-B-A070, issued by the Army Tank-Automotive Command, Warren,
Michigan. We affirm our original decision.
In its original protest, Sermor contended that the preaward survey on
which the Army's negative responsibility determination was based did not
fairly consider Sermor's financial capability or its performance on
prior contracts. In addition, because the Army has repeatedly relied on
similar preaward surveys as the basis for finding Sermor nonresponsible,
Sermor contended that it had been debarred de facto by the Army.
The Army advised us that the nonresponsibility determination had been
referred to the Small Business Administration (SBA), which had declined
to issue a certificate of competency (C.O.C.) to Sermor. In light of
SBA's authority under 15 U.S.C. Sec. 637(b)(7) (1982) to conclusively
determine the responsibility of small businesses, we generally do not
review negative responsibility determinations when a small business is
involved, unless there is a showing of possible fraud or bad faith on
the part of government officials. See Bid Protest Regulations, 4 C.F.R.
Sec. 21.3(f)(3) (1985). Since Sermor did not allege, and we saw no
evidence, that the Army contracting officials acted fraudulently or in
bad faith, and Sermor did not challenge SBA's denial of the C.O.C., we
dismissed the protest. In addition, we found no basis on which to
object to the Army's repeated reliance on findings in the preaward
surveys as a de facto debarment of Sermor, in light of SBA's independent
review and conclusive determination of Sermor's responsibility.
In its request for reconsideration Sermor now contends that the Army
contracting officials acted fraudulently and in bad faith in making the
nonresponsibility determination. In addition, Sermor for the first time
challenges the SBA's denial of the C.O.C., alleging fraud and bad faith
on the part of SBA off icials as well. The primary basis of this
contention is that the SBA officials failed to consider evidence which
Sermor believes shows that it is a responsible firm.
We find that Sermor's contentions regarding the Army's
nonresponsibility determination are untimely and therefore will not be
considered. Sermor's allegations of fraud and bad faith are based on
the same factual allegations made in its original protest. Sermor thus
has simply recast its argument in an attempt to bring its protest within
the exception in our regulations under which we will review protests
challenging nonresponsibility determinations. Our regulations do not
contemplate such piecemeal presentation of arguments, however, and we
will not consider allegations raised for the first time in a request
for reconsideration unless the request itself constitutes a timely
protest. Allied Bendix Aerospace, B-218869.2, June 6, 1985, 85-1 C.P.D.
P 651. Since Sermor's request for reconsideration relies on the same
allegations raised in its original protest, the basis for its argument
that the Army officials acted fraudulently and in bad faith should have
been evident, at the latest, when the original protest was filed. Our
regulations require that a protest based on such allegations be filed
within 10 days after the protester knew or should have known the basis
for protest. 4 C.F.R. Sec. 21.2(a) (2). Since Sermor's request for
reconsideration was not filed until August 7, considerably more than 10
days after the original protest was filed on June 18, it cannot be
considered as timely raising the issue.
We also find untimely Sermor's allegations regarding the SBA's denial
of the C.O.C.. Sermor contends in its request for reconsideration that
it was never notified by the SBA that its C.O.C. application was denied.
The SBA states that it sent Sermor a letter dated May 15, 1985,
notifying Sermor of the SBA's decision. While a copy of the letter
addressed to Sermor indicates that it was to be sent by certified mail,
the SBA states that in fact it was sent by regular mail, and, as a
result, there is no receipt showing delivery to Sermor.
Even assuming that Sermor did not receive the SBA's May 15 letter,
however, Sermor concedes that it was notified that award had been made
to another bidder during a telephone conversation with the contracting
officer on June 11. The Amy report states that, during that
conversation, Sermor also was advised that its C.O.C. application had
been denied by SBA; since Sermor does not refute this statement, we see
no basis on which to challenge the Army's contention that the
contracting officer notified Sermor. Moreover, Sermor was involved in,
and thus had contemporaneous knowledge of, the events which occurred
during SBA's consideration of Sermor's C.O.C. application on which
Sermor's allegations of fraud and bad faith are based, primarily, SBA's
failure to consider relevant information regarding Sermor's past
performance and financial capability and an alleged expression of bias
by an SBA official. Thus, Sermor should have raised its challenge to
the SBA determination within 10 days of being notified of award on June
11, since Sermor was already aware of the events on which its argument
is based and should have known that its C.O.C. application had been
denied after the June 11 conversation with the contracting officer.
Since the issue was not raised until the request for reconsideration was
filed on August 7, this basis of protest also is untimely and will not
be considered.
Sermor also objects to our dismissal of its original protest without
giving Sermor an opportunity to comment on the Army's statement that the
nonresponsibility determination tion had been referred to SBA. Section
21.3(f) of our Aid Protest Regulations, 4 C.F.R. Sec. 21.3(f) provides
in pertinent part:
"... When the propriety of a dismissal becomes clear only after
information is provided by the contracting agency or is otherwise
obtained by the General Accounting Office, it will dismiss the
protest at that time."
In such circumstances, interested parties are not af forded an
opportunity to file comments. Here, the Army's statement, which Sermor
does not dispute, that the Army's non-responsibility determination had
been referred to SBA justified summary dismissal of the protest under
our regulations; as a result, Sermor was not entitled to an opportunity
to file written comments before its protest was dismissed. 4 C.F.R.
Sec. 21.3(f) (3); Sermor, Inc. -- Reconsideration, B-220041.2, Oct. 8,
1985, 85-2 C.P.D. P .
Since the protester has failed to demonstrate a basis upon which to
modify our dismissal of its protest, our prior decision is affirmed.
Harry R. Van Cleve
General Counsel
FILE: B-219052 DATE: October 4, 1985
MATTER OF: Anthony R. Teel
DIGEST.:
1. Protest that contracting agency should have requested and
incorporated into its invitation for bids (IFB) a Davis Bacon Act
wage rate determination for an additional labor classification is
based on an alleged impropriety apparent in the IFB, and must be
filed before bid opening to be timely.
2. Protester's pre-bid opening oral discussions with
contracting agency officials did not constitute a timely agency
protest since oral protests are no longer provided for under the
Federal Acquisition Regulation.
Anthony R. Teel, on behalf of W. A. Strom Contracting, Inc., protests
that the Davis Bacon Act wage determination decision incorporated into
Forest Service invitation for bids (IFB) No. Rl-17-85-15 incorrectly
fails to provide a classif ication for ironworkers. We dismiss the
protest as untimely.
The IFB requested bids for the installation of a prefabricated tree
cooler unit and the erection of a warehouse for the Nez Perce National
Forest in Elk City, Idaho. The IFB incorporated a Department of Labor
(DOL) wage determination decision, No. ID-85-5013 (dated Feb. 15, 1985
and published at 50 Fed. Reg. 8567, Mar. 1, 1985), which provided basic
hourly wage rates to be paid for various labor classifications. The
decision did not provide a classification for ironworkers.
Teel contends that the work to be performed properly requires the
services of ironworkers and protests, in effect, that the Forest Service
should have recognized this and proposed such a classification to DOL.
Assuming DOL would have then issued a wage rate for ironworkers, Teel
argues that such a rate should have been incorporated in the IFB.
We find Teel's protest untimely filed. The record reveals that Teel
discussed this matter with the Forest Service contracting off icer and
contract specialist prior to the May 29, 1985 bid opening. Teel stated
that he would protest if the IFB was not amended to provide for
ironworkers. After attending the bid opening, Teel hand delivered to
the Forest Service contract specialist a copy of his written protest
addressed to us. We received Teel's protest after bid opening.
Our Bid Protest Regulations require that protests, such as this one,
based on alleged improprieties apparent in a solicitation, be filed
prior to bid opening. 4 C.F.R. Sec. 21.2(a)(1) (1985). Teel's formal
protest was not filed until after bid opening, and is therefore
untimely. Although we recognize that Teel indicated his dissatisfaction
to the agency prior to bid opening, we cannot view Teel's oral
discussions with the Forest Service as constituting a protest to the
agency since oral protests are no longer provided for under the Federal
Acquisition Regulation (FAR). FAR, Sec. 33. 101, as added by Federal
Acquisition Circular No. 84-6, 50 Fed. Reg. 2268-2270 (Jan. 15, 1985).
Accordingly, the protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
FILE: B-218982 DATE: November 1, 1985
MATTER OF: Claim of Ray M. Waters, Jr. for Taking of
Real Property
DIGEST: On request for reconsideration, we affirm
Z-2854316, Jan. 29, 1985, in which we denied a
claim for $175,000 since the record still pre-
sents a substantial question about whether a
taking of real property by the United States
has occurred due to road closings resulting
from a Federal construction project.
Mr. Ray M. Waters, Jr. has requested reconsideration of our Claims
Group's denial of his claim for $175,000 resulting from an alleged
taking of real property by the United States. Z-2854316, Jan. 29, 1985.
For the reasons stated below, we affirm our decision.
The claimant is the owner of approximately 4.3 acres of land and
improvements located at the Tennessee-Tombigbee Waterway. The claimant
leases the land to Waters Truck and Tractor Co., Inc., which sells and
services large trucks and other heavy equipment.
The record shows that the Board of Supervisors of Lowndes County,
Mississippi, ordered the permanent closure of Old Macon Road and
Mississippi Highway 12 (Old U.S. Highway 82) at the points where these
roads are severed by the Waterway Canal being constructed as part of the
Tennessee-Tombigbee Waterway, a federally-sponsored project. These
closings were made following a request by the United States Army Corps
of Engineers. The claimant maintained that the closings effectively
denied access to his property since the only means of access remaining
is the U.S. Highway 82 bridge across the Tombigbee River. In this
regard, the claimant has asserted that height clearance of the bridge is
inadequate for transportation of equipment sold by his tenant and that
the bridge is old, narrow, unsafe, and restricted as to the types of
vehicles that may cross it, and will become increasingly unsafe because
of lack of maintenance by local authorities. Accordingly, the claimant
argued that the Federal Government's actions amounted to a taking of
real property for which he is entitled to compensation pursuant to the
fifth amendment to the United States Constitution. The $175,000 claimed
represents the alleged difference in appraised market value of the
claimant's property before and after the road closing.
In its administrative report on the claim, the Army Corps of
Engineers has recommended denial. Essentially, the Corps found that
there had not been a compensable taking since the U.S. Highway 82 bridge
provided reasonable access to the property. The Corps also stated that,
under Mississippi Code, section 63-5-51 (1973), permits may be obtained
to move vehicles of greater height than normally allowed on state
highways.
Furthermore, the Corps contended that the claim was based solely on
the special access needs of the claimant's tenant, and suggests that
such needs cannot be the basis for allowing a claim for taking of
property. In his request for reconsideration, the claimant has
presented additional arguments to support his position that a taking has
occurred.
In Z-2854316, Jan. 29, 1985, we concurred with the United States Army
Corps of Engineers' recommendation to deny Mr. Waters' claim. Our
denial primarily was based on our very limited role in considering
claims based on alleged takings of property by the Federal Government.
Thus, we said that"where the record presents a conflict that we cannot
resolve adminis- tratively, our practice is to disallow the claim and
leave the claimant to pursue the matter in the courts."
We think there still exists substantial question about whether a
taking has occurred. It is uncertain whether the Highway 82 bridge
across the Tombigbee River can provide access to the claimant's property
so that the property can continue to be used by the tenant for its
business, and if such access is not possible, whether the property can
be used for other purposes. Accordingly, consistent with our limited
role in adjudicating land condemnation claims, we think it appropriate
to affirm the denial of the claim and leave the claimant his remedies in
the courts. See B-152725, Feb. 19, 1964; B-136783, Dec. 18, 1958.
Comptroller General
of the United States
FILE: B-218973.2 DATE: October 2, 1985
MATTER OF: Indian and Native American Employment
and Training Coalition--Request by
Department of Labor for Reconsideration
DIGEST:
1. An agency's request for reconsideration filed more
than 1 month after the decision is issued is
untimely.
2. Upon termination of a services contract for
default the agency procured the services on a
sole-source basis as a result of its determination
that an unusual and compelling urgency for such
services existed. Where the prior contract indi-
cated no urgent need for such services and since
the record does not indicate any changed circum-
stances, the agency's determination to limit the
source of the procurement to a sole source was
improper.
By letter received on May 24, 1985, the Department of Labor (DOL)
requests reconsideration of our decision in Indian and Native American
Employment and Training Coalition, B-216421, Apr. 16, 1985, 64 Comp.
Gen. , 85-1 C.P. D. P 432, and reports on its actions subsequent to
issuance of that decision. The decision sustained a protest that a
contract modification for technical assistance and training services on
financial management and management information systems to Native
American grantees was beyond the scope of the original contract for
professional accounting and audit services between the agency and
Rodriguez, Roach & Assoc., P.C. (Rodriguez, Roach), and we recommended
to the Secretary of Labor that the contract modification be terminated
for the convenience of the government and that a new solicitation be
issued for the remaining work consisting of on-site technical assistance
and training for the grantees.
In its request for reconsideration, DOL asserts that we did not fully
understand the scope of the original solicitation. The request,
however, is untimely and will not be considered. Our Bid Protest
Regulations require that a request for reconsideration be f iled within
10 working days of when the basis for reconsideration is or should have
been known, whichever is earlier. 4 C.F.R. Sec. 21.12( b) (1985).
While our regulations provide for our consideration of untimely protests
where a significant issue is involved or good cause is shown, 4 C.F.R.
Sec. 21.2(c), there is no similar provision regarding untimely requests
for reconsideration. See Simulators Limited, Inc.--Reconsideration,
B-208418.2, Mar. 17, 1983, 83-1 C.P.D. P 274. Furthermore, an agency's
request for reconsideration is held to the same stringent filing
standard as the request of any other party. Forest Service--Request for
Reconsideration, B-208469.2, Mar. 14, 198-3, 83-1 C.P.D. P 247 and
Dillon Supply Co.--Department of Energy--Request for Reconsideration,
B-203937, Jan. 19, 1982, 82-1 C.P.D. P 41. Accordingly, the Department
of Labor's request for reconsideration, filed more than 1 month after
the issuance of our April 16 decision, is clearly untimely. See Dillon
Supply Co., et al., supra, 82-1 C.P.D. P 41 at 2 and Novak Co.,
Inc.--Reconsideration, 8-217023.2, Jan. 25, 1985, 85-1 C.P.D. P 101.
DOL's letter further advises that the agency did not follow our
recommendation. DOL states that while the kodriguez, Roach contract was
terminated (for default, because of the dissolution of the contractor),
it did not compete the remaining work. Instead, by modification to an
existing contract with Gilbert Vasquez and Company, it called for
Vasquez to provide the remaining work. The agency indicates that
Vasquez was to do this through the use of the original contractor's
former employees as subcontractors. The agency advises that it
justifies this sole-source acquisition under the authority of section
303(c) (2) of the Federal Property and Administrative Services Act of
1949, as added by the Competition in Contracting Act of 1984 (CICA),
Pub. L. No. 98-369, title VII, 98 Stat. 1175, 1176 (1984) (to be
codified at 41 U.S.C. Sec. 253(c)(2)). That section provides that an
executive agency may use procedures other than competitive where the
agency's need for the property or services is of such an unusual and
compelling urgency that the government would be seriously injured unless
the executive agency is permitted to limit the number of sources from
which it solicits bids or proposals. See also Federal Acquisition
Regulation (FAR), Sec. 6.302-2, 50 Fed. Reg. 1726, 1732 (1984), Federal
Acquisition Circular 84-5, April 1, 1985 (to be codified at 48 C.F.R.
Sec. 6.302-2).
The task order that modif ied the Vasquez contract provides for the
on-site technical assistance and training to be furnished by Vasquez to
approximately 35 Native American grantees to be rendered in two phases.
Phase I consists of on-site visits to a minimum of 14 grantee locations.
After evaluation of a progress report submitted by the contractor on
phase I, the agency would determine whether to authorize phase II--the
remaining technical assistance and training. The task order provides
that all work thereunder should be completed no later than August 25,
1985. We have been advised by the agency that Vasquez has completed
performance of both phase I and phase II under the task order.
We cannot agree with DOL's action here.
As required by section 303( f) (1) of the Federal Property and
Administrative Services Act of 1949, as added by CICA (to be codified at
41 U.S.C. Sec. 253(f)(1)), a justification statement for the sole-source
procurement was submitted to and approved by the appropriate agency off
icial. The statement, in justifying the sole-source procurement from
Vasquez on the basis that the need for the services is of an unusual and
compellingly urgent nature, indicated that the training workshops (which
had been conducted by Rodriguez, Roach) must be reinforced on a timely
basis by the on-site technical assistance. The justification stated
that to be effective such on-site technical assistance "must take place
immediately" and that a lapse of several months or more between the
training workshops and the on-site technical assistance would require
that the entire technical assistance and training project be reinstated
at great cost to the government. The justif ication also stated that
the effectiveness of the training and technical assistance is dependent
on the same parties providing both the workshops and the on-site
technical assistance and that the knowledge and experience gained by the
former Rodriguez, Roach staff who will be working with Vasquez cannot be
replicated without considerable cost to the government. Finally, it was
stated, the former Rodriguez, Roach staff members and the Indian
participants have great mutual trust, conf idence and working
relationships which may not be capable of duplication and that such
personnel acquired valuable knowledge and experience by developing and
presenting the training workshops.
We have traditionally subjected sole-source procurements to close
scrutiny. See ROLM Corp. and Fisk Telephone Systems, Inc., B-202031,
Aug. 26, 1981, 81-2 C.P.D. P 180. With the enactment of CICA, Congress
has made it plain that sole-source awards are to be made only when
"truly necessary" and only when properly justified. See H.R. Rep. No.
861, 98th Cong., 2d Sess. 1425-7 (1984) (conference report). We think
that standard is not met in this case.
Section 303(c) (2) of the Federal Property and Administrative
Services Act of 1949, as added by CICA, is the authority upon which the
agency relies for its justification of its sole-source acquisition.
This section provides that an agency may use other than competitive
procedures where the agency's need for the property or services is of
such an unusual and compelling urgency that the government would be
seriously injured unless the agency is permitted to limit the number of
sources from which it solicits bids or proposals. However, section 303(
c) (2) does not provide that a sole-source procurement is appropriate in
every instance where a limitation of procurement sources is justified on
account of the urgency of the agency's needs.
On the contrary, the cited provision requires agencies to obtain
competition from as many sources as practicable, see FAR, P 6.302-2(c)
(2), Federal Acquisition Circular 84-5, April 1, 1985 (to be codified at
48 C.F.R. P 6.302-2(c)(2)); see also H.R. Rep. No. 861, 98th Cong., 2d
Sess. 1425 (1984) (conference report), although agencies are not
precluded from awarding a contract on a sole-source basis under section
303(c) (2) when conditions dictate that only one source is available.
H.R. Rep. No. 861, supra, at 1425. We note that even where a
sole-source procurement is not justified an agency may proceed
expeditiously with a procurement carried out under authority of section
303(c) (2) since notice of procurements under such provision are not
required to be published in the Commerce Business Daily. See subsection
18(c) (2) of the Office of Federal Procurement Policy Act and subsection
8(g) (2) of the Small Business Act as added by sections 303 and 404,
respectively, of the Small Business and Federal Procurement Competition
Enhancement Act of 1984, Pub. L. 98-577, Oct. 30, 1984, 98 Stat. 3066,
3077, and 3083, and the FAR, Sec. 5.202(a)(2), 50 Fed. Reg. 1726, 1728
(1984), Federal Acquisition Circular 84-5, April 1, 1985 (to be codified
at 48 C.F.R. P 5.202(a)(2)).
We think it is instructive to compare the terms of the Vasquez
contract with that formerly held by Rodriguez, Roach. The training
workshops and on-site technical assistance and training requirements
initially were added to the Rodriguez, Roach contract by modification
No. 3 to task order No. 101 effective in September 1984. That
modification provided that up to four workshops would be conducted with
the first workshop completed not later than January 31, 1985, and the
last workshop completed by September 30, 1985. As set forth in our
April 16 decision, the agency had advised us that the four training
workshops had been completed by Rodriguez, Roach. Modification No. 3 to
the task order provided that the on-site technical assistance and
training should be completed not later than December 31, 1985. There is
nothing whatsoever in the language of modification No. 3 which would
indicate that it was crucial or even highly desirable that the training
workshops be promptly followed-up by on-site technical assistance and
training. In fact, under the terms of the contract modification, all of
the workshops, could be conducted early in 1985, as in fact did occur,
and the on-site assistance could be provided late in the year--the only
requirement being that the on-site services be completed by the end of
the calendar year.
Thus, under the terms of the contract modification, the prior
contractor could have waited several months or more between the
completion of the training workshops and the inception of the on-site
assistance. Furthermore, there is nothing in modification No. 3 which
provided that the training workshops were to be completed prior to a
grantee's receiving on-site technical assistance and training, nor did
the modification require each grantee who attended a training workshop
to receive the on-site technical assistance and training. In the
absence of evidence of any changed circumstances since the issuance of
modification No. 3 which would now require that the on-site technical
assistance and training be provided on an urgent basis to the grantees
who had attended the training workshops, we believe that DOL has not
shown that the on-site assistance and training is of such a compelling
nature as to justify procurement of such services under other than
competitive procedures.
Even if DOL had demonstrated that the procurement in question was of
a suff iciently unusual and compelling urgency as to justify limiting
the sources of procurement, we still could not agree that the
circumstances attendant to this procurement dictated that only one
source was available for award. We are not persuaded by the agency's
argument that the same individuals who conducted the training workshops
must also provide the on-site assistance due to the working
relationships they developed incident to the workshops and the knowledge
and experience they gained from developing and presenting the workshops.
DOL has not provided any evidence which would show that the required
services are so unusual that only the former Rodriquez, Roach staff
members could adequately provide such services, or, if that is so, why
only Vasquez could utilize their services as subcontractors.
In view of the above, we do not believe that the agency's sole-source
procurement from Vasquez of the on-site technical assistance and
training services was proper. However, because the services under the
contract modification have already been performed corrective action with
respect to this procurement would not be appropriate. We are, however,
bringing this matter to the attention of the Secretary of Labor.
Comptroller General
of the United States
Matter of: Department of Labor - Disposition of Refunded Social
Security Contributions
File: B-218922
Date: May 18, 1987
DIGEST
Internal Revenue Service refunded Social Security contributions
previously paid over by Department of Labor (DOL) contractor. Refund
included portion which had been withheld from employee wages and an
equal amount contributed by contractor as employer. Portion of refund
representing employer's contribution should have been returned to DOL as
an unallowable contractor cost. However, contractor erroneously
distributed more than half of the total refund to some former employees.
Balance of refund, now in hands of DOL, should be viewed as partial
return of unallowable contract costs and retained by DOL for credit to
disbursing appropriation, and DOL should pursue claim for balance due.
DECISION
This decision responds to a request from the Employment and Training
Administration (ETA), Department of Labor (DOL), for guidance concerning
the proper treatment of Federal Insurance Contribution Act (FICA) taxes
refunded by the Internal Revenue Service (IRS) to SER-Jobs for Progress,
Inc. (SER). DOL officials advise us that SER performed job training
services on a cost-reimbursable basis pursuant to the Manpower
Development and Training Act of 1962 (MDTA), Pub. L. No. 87-415, 76
Stat. 23 (1962). 1/
BACKGROUND
During the years 1971-73, SER employed several hundred MDTA program
employees. During this period, SER withheld FICA taxes from the wages
of its employees and submitted them to the Government, along with an
equal share of employer's taxes. 2/ The employer's tax payments were
charged to the Government as administrative costs. Subsequently, the
IRS ruled that SER and its employees were exempt from the requirements
of FICA and refunded to SER $442,644. This refund consisted of equal
amounts of previously submitted employer and employee taxes, including
interest earned on both shares.
Upon receiving the refund, SER took the position that both the
employees' and employer's shares belonged to the former SER employees
and, therefore, both shares should be considered as allowable contract
costs. Consistent with this position, SER distributed approximately
$310,600 to a group of its former employees. 3/
In contrast to SER's position, DOL auditors questioned whether the
refunded FICA taxes could still be considered as administrative expenses
chargeable against the MDTA contracts. On January 4, 1980, the DOL
contracting officer responsible for these contracts issued a Final
Determination concerning the proper disposition of the refunded taxes.
The contracting officer concluded that the portion of the refund
representing the employer's taxes, along with the interest earned
thereon, did not constitute a proper charge against the contracts and
should be returned immediately to DOL. SER apparently refused to comply
with that ruling.
On December 12, 1982, as a result of continuing efforts to resolve
the matter, SER and DOL executed a "Memorandum of Understanding" under
which SER transferred to DOL all funds remaining in its FICA refund
account. 4/ Thereupon, DOL officials discussed the proper disposition of
the FICA refund with the Social Security Administration (SSA), IRS, and
DOL/ETA's Office of the Solicitor. None of these discussions
effectively resolved the matter. DOL now presents our Office with the
following questions:
1) To whom is the "employer's share" legally due?
2) Does DOL/ETA have the authority to dissburse the
"employees'share" directly to former SER employees?
3) Is SER legally liable to the Government for the portions of
the "employer's share" it disbursed to former employees?
DICUSSION
We first consider who is legally entitled to the "employer's share"
of the FICA refund. We conclude that this portion of the refund
properly reverts to the Government.
The legislation requiring an employer to pay FICA taxes is codified
at 26 U.S.C. Sec. 3111. This section states:
"* * * there is hereby imposed on every employer an excise tax,
with respect to having individuals in his employ * * *."
The courts have long held that an employer's FICA contribution is a
tax "levied upon the privilege of establishing and maintaining the
relationship of employer and employee." See Steward Machine Co. v.
Davis, 301 U.S. 548 (1937); Jones v. Goodson, 121 F.2d 176, 179 (10th
Cir. 1941).
Based on the clear language of the legislation and prior law, we must
conclude that SER's FICA contributions were originally a tax to SER and
therefore a cost of doing business for which the contractor was
reimbursed by DOL under the terms of the contract. Upon IRS'
determination that the expenditure was unnecessary, the previously paid
tax was no longer a legitimate business expense. We agree with the DOL
contracting officer that the "employer's share" ($221,322) of the FICA
refund was not an expense to SER and therefore was not an allowable cost
under the contracts. Accordingly, those funds properly revert to the
Government.
Turning now to the so-called "employees'share," our review of the
record indicates that the division of the amount returned to DOL into
"employer's share" and "employees' share" originated from SER's own
calculations. In our view, this treatment was neither legally compelled
nor legally justified. The only required division was that half of the
total amount refunded by IRS should have been returned to the former
employees and half should have been returned to DOL. 5/ The fact that
SER, in erroneously distributing more than half of the total refund to
some former employees omitted other former employees, does not alter the
fact that half of the total refund was owed to DOL. It is SER that made
the erroneous distribution, and it is therefore SER, not DOL, that
should bear the consequences. Accordingly, with respect to the funds
which SER has returned to DOL, we find no basis for treating those funds
as anything other than a partial return of the "employer's share" of the
FICA refund. Viewed from this perspective, DOL is not holding any
"employees'share." DOL should therefore retain the funds, for credit to
the appropriation originally charged. More specifically, since it has
been over 2 years since that appropriation was available for obligation,
the monies should be credited to the applicable "M" account. 31 U.S.C.
Sec. 1552(b) (1982). Any claims by former employees who did not receive
their full refund are properly directed against SER, not the United
States.
DOL's third question is whether SER is liable to the Government for
the portion of the "employer's share" it improperly disbursed to former
employees. The answer is yes. The fact that SER no longer has
possession of funds which it improperly disbursed does not provide a
basis for relieving SER of its responsibilities under the contracts.
Accordingly, we conclude that SER is liable to DOL for the difference
between the total "employer's share" refunded by IRS and the amount SER
previously returned to DOL. DOL should pursue appropriate collection
efforts to recover these funds.
Acting Comptroller General
of the United States
FOOTNOTES
1/ According to DOL officials, SER was awarded contract numbers MDTA
006-2-0502-000; 099-3-003-001; and 099-4-008-007. Our Office was not
provided copies of the contracts themselves.
2/ The Social Security Act and its subsequent amendments provide a
system of old age and unemployment benefits. 26 U.S.C. Sec. 3101 et
seq. (1982). These benefits are supported by various taxes including
FICA taxes. The FICA tax is a tax paid in part by employees through
withholding (26 U.S.C. Secs. 3101, 3102), and in part by employers
through an excise tax (26 U.S.C. Sec. 3111). Both the employer's and
employee's portions of the FICA tax are based on the wages paid
employees, and the recordkeeping and transmittal of funds are
obligations of the employer.
3/ Documents that we reviewed indicate that 168 former SER employees
received refunds of both the employees' and the employer's share, along
with interest earned on both shares. An additional 12 employees
received only the employees'share, with interest. Finally, 290
employees received no distribution. We were unable to determine SER's
rationale for disbursing the funds in this manner. The dollar amounts
given in various documents in the record are not in total agreement.
Hence, monetary figures in this decision are intended as approximations
only.
4/ Eventually, a total of slightly over $185,630 was transferred from
SER to DOL pursuant to this agreement. The sum of the amount returned
to DOL and the amount SER had already distributed exceeds the amount
refunded by IRS. The difference is attributable to interest SER had
earned on the refund, and a FICA refund from another project unrelated
to this case.
5/ Documents submitted to us suggest that there may have been 12
former employees for whom no employer share was paid, but we cannot
determine this with certainty from the record. If this is true, then the
amount of DOL's claim against SER should be adjusted accordingly.
Matter of: Section 2257 Transfers in Cases of Extraordinary
Emergencies
File: B-218812
Date: January 23, 1987
DIGEST
Section 2257 of title 7 of the United States Code authorizes, at a
maximum, a transfer of 7 percent of an amount appropriated to a
Department of Agriculture "bureau, division, or office", even in cases
of extraordinary emergencies.
DECISION
The Department of Agriculture Inspector General asks whether section
2257 of title 7 of the United States Code authorizes transfers of more
than 7 percent from amounts appropriated to a particular "bureau,
division, or office" in a case of extraordinary emergency. For the
reasons given below, transfers of more than 7 percent cannot be so made.
In B-218812-O.M., July 30, 1985, our Resources, Community and
Economic Development Division asked our Office of General Counsel the
same question in a case involving a $50 million transfer from the
Federal Crop Insurance Corporation's (FCIC) fiscal year 1985
appropriation for administrative and operating expenses to the
appropriation for the FCIC Fund. The Department, at that time,
maintained that section 2257 of title 7 allowed both for transfers and
receipts of more than 7 percent of an appropriation when there was an
extraordinary emergency. The Inspector General now asks for a
Comptroller General decision on the issue.
Section 2257 of title 7 states:
"Not to exceed 7 per centum of the amounts appropriated for any
fiscal year for the miscellaneous expenses of the work of any
bureau, division, or office of the Department of Agriculture shall
be available interchangeably for expenditures on the objects
included within the general expenses of such bureau, division, or
office, but no more than 7 per centum shall be added to any one
item of appropriation except in cases of extraordinary emergency."
(Emphasis added.)
In B-218812-O.M., July 30, 1985, we determined that the exception to
the 7 percent limitation for extraordinary emergencies applied only to
the appropriation receiving the transfer. The phrase in section 2257
"except in cases of extraordinary emergency" is used in the clause
describing the receiving appropriation. Thus, the natural reading of
the sentence is that the exception for extraordinary emergencies applies
only to that appropriation.
This view is supported by the punctuation. Had there been a comma
between the words "appropriation" and "except" in the underlined portion
of section 2257, as quoted above, arguably the phrase might apply to the
transferring appropriation as well. Although punctuation, or the lack
of it, should not necessarily govern the interpretation of a statute,
punctuation is a part of an act and may be considered in its
interpretation, particularly when intent is uncertain. 2A Sutherland,
Statutory Construction, Sec. 47.15 (Sands 4th ed. 1973); Fithian v. St.
Louis & S.F. Ry. Co., 188 F. 842, 845 (C.C. W.D. Ark. 1911).
This reading of the section is more consistent with its intended
limited use. See S. Rep. No. 803, 78th Cong., 2d Sess. 23 (1944); H.R.
Rep. No. 1198, 78th Cong., 2d Sess. 18 (1944). It makes sense that the
Congress put a more restrictive ceiling on the amounts that could be
transferred. By doing so, it insured that the transferring
appropriations would continue to be available to support the activities
for which they were appropriated. This safeguard normally would not be
necessary for the appropriation needing the additional funds.
We, therefore, conclude that the emergency exception to the 7 percent
limit to section 2257 only applies to the receiving appropriation. The
section limits transfers from an appropriation to a maximum of 7 percent
of the amount of the appropriation.
Comptroller General
of the United States
File: B-218798.2
Date: March 7, 1989
DIGEST
An employee, who was assigned to a nearby temporary audit site for a
period of 11 days, used his family automobile for two roundtrips each
day because his spouse drove him to work and picked him up after work
each day. Under the Federal Travel Regulations and the agency's
implementing regulations, the employee is limited to mileage
reimbursement for one roundtrip by his privately owned vehicle each day.
Mr. John McGrath
76 Vine Street
Reading, Massachusetts 01867
Dear Mr. McGrath:
This is in response to your appeal of our Claims Group settlement
limiting your claim for mileage between your residence and a temporary
audit site. 1/
Your claim is for mileage between your residence in Reading,
Massachusetts, and a temporary audit site in Burlington, Massachusetts,
for a period of 11 days in 1984. Since you and your spouse owned only
one vehicle at that time and since other methods of transportation were
impractical or cost-prohibitive, your spouse made two roundtrips of 18
miles between Reading and Burlington each day of your assignment. Our
Claims Group limited your claim to one roundtrip each day, less the
normal rail commuting costs, and denied the balance of your claim,
approximately $40.
We know of no basis to allow your claim. The provision you cite in the
Federal Travel Regulations allows reimbursement of two roundtrips
between the employee's residence and a common carrier terminal. 2/ This
applies only to travel to and from a common carrier terminal.
Furthermore, it is an exception to the normal rules on mileage
reimbursement and is specifically limited to a cost not to exceed the
cost of taxi fare plus tips.
The GAO's own travel regulations, GAO Order 0.300.3, clearly indicate
that mileage shall be computed by one-way distances between the
employee's residence and temporary audit site. See GAO Order 0.300.3,
chap. 2, para. 2b (Sept. 12, 1980). This provision is not inconsistent
with the FTR and is a valid agency implementation of the FTR.
Accordingly, we sustain our Claims Group's determination limiting your
reimbursement to one roundtrip per day.
Sincerely yours,
Robert L. Higgins, Associate General Counsel
FOOTNOTES
1/ Settlement Certificate Z-2863646, Feb. 19, 1988.
2/ FTR, para. 1-4.2c(1) (Supp. 4, Aug. 23, 1982), incorp. by ref., 41
C.F.R. Sec. 101-7.003 (1987).
FILE: B-218767 DATE: October 23, 1985
MATTER OF: Waugh Controls Corporation
DIGEST:
Where invitation for bids (IFB) specifies brand name as modified
or equal, bid which offers brand name and takes no exception to
specifications is responsive to IFB. Bidder of brand name
solicited by IFB need not address all salient characteris- tics in
its descriptive literature since the salient characteristics
merely describe features needed by the agency which the agency has
deter- mined are characteristics of the brand name product bid by
firm.
Waugh Controls Corporation (Waugh) protests the award of a contract
for amplifier sets to Pacific Instruments, Incorporated (Pacific), by
the Department of the Air Force under invitation for bids (IFB) No.
F4065O-85-B0059. Waugh contends that the amplifier sets offered by
Pacific are not responsive to the solicitation.
We deny the protest.
Waugh contends that Pacific's bid is nonresponsive because the
descriptive literature supplied by Pacific with its bid fails to
demonstrate compliance with four characteristics in the specifications:
(1) reliability, that the amplifier shall be designed to maximize
reliability and that the units receive a minimum 100-hour burn-in; (2)
maintainability, that the equipment be obtainable for 25 years,; (3)
part identification, and (4) interchangeability, that the amplifier have
interchangeable and replaceable components.
The Air Force states that Pacific offered the models listed in the
specification and, thus, was responsive to the IFB. The Air Force
further asserts that, by definition, salient characteristics are
descriptive of certain features of the brand name products particularly
required by the government to meet its functional needs, and that, in
any event, the Air Force technical evaluation of Pacific's offer
concluded that the items offered by Pacific were the brand name and
conformed to the specifications.
The IFB provided, in part, that the D.C. amplifier sets offered by
bidders were to meet the requirements of USAF specification No. DDAC-1.
Section 3.1.2 of the specification stated that the D.C. amplifier shall
be "Pacific Model 3100 as modified or equal." Specification DDAC-1 sets
forth eight pages of "performance, design, manufacture and test
requirements for the amplifier sets." The IFB included a clause
requiring bidders to furnish descriptive literature with the bid in
order to establish in detail the design, materials, components,
performance characteristics, and methods of manufacture, assembly,
construction or operation. It further provided that the term
descriptive literature includes only information required to determine
the technical acceptability of the offered product, and does not include
other information such as that used in determining the responsibility of
a prospective contractor or for operating or maintaining equipment.
Finally, the clause advised that failure to provide descriptive
literature which shows that the product offered conforms to the
requirements of the solicitation will require rejection of the bid.
We have recognized that where an agency solicits a brand name or
equal product, an agency may specify characteristics that go beyond
those of the designated brand name product when those characteristics
represent the essential needs of the agency. Potomac Industrial Trucks,
Inc., B-203119, Feb. 3, 1982, 82-1 C.P.D. P 78. In these cases, where,
in effect, a modified brand name is required it is proper to reject a
brand name product which does not show conformance with the salient
characteristics.
Here, Pacific bid the Pacific Model 3100-2049 wideband D.C. amplifier
in response to the specification requirement for "Pacific Model 3100 as
modified" and did not take any exception to the specifications. Pacific
submitted its standard commercial literature for the item. This Pacific
amplifier is the model 3100 amplifier with additional performance
guarantees and test procedures to comply with the IFB requirements. The
Air Force technical evaluation concluded from the Pacific proposal that
the amplifier bid was the brand name item and conformed to the
specifications. We further note that the Air Force previously has
purchased the identical Pacific model 3100-2049 under a solicitation
with the same product salient characteristics as here, and is thus
familiar with the item and its conformity to the specifications. See
Waugh Controls Corp., B-216236.2, Apr. 18, 1985, 85-1 C.P.D. P 441,
where we rejected Waugh's contention that the identical Pacific model
amplifier did not meet the salient characteristics under USAF
specification No. DDAC-1. In these circumstances, we have no basis to
question the Air Force finding that Pacific's bid was responsive. See
Central Power Engineering Corp., B-215658.2 Jan. 23, 1985, 85-1 C.P.D. P
85; Virginia Refrigeration, Inc., B-194495, Aug. 17, 1979, 79-2 C.P.D.
P 129.
Since Pacific bid the brand name item, Pacific's
failure to specifically address the four characteristics in the
specifications did not render the bid nonresponsive. See Sulzer Bros.,
Inc., et al., B-188148, Aug. 11, 1977, 77-2 C.P.D. P 112, where we
stated that, notwithstanding a requirement for descriptive data, a bid
should not be auto- matically rejected for failure to furnish
descriptive data where it is not material. Here, the brand name item
speci- fied in the IFB ("Pacific Model 3100 as modified") met the IFB
specifications and the Air Force properly could conclude that Pacific's
proposal was responsive to the IFB. See Coulter Electronics, Inc.
B-216800, Apr. 23, 1985, 85-1 C.P.D. P 463.
We deny the protest.
Harry R. Van Cleve
General Counsel
FILE B-218735.5 DATE: October 3, 1985
MATTER OF: Hugo Auchter GmbH - Request for
Reconsideration
DIGEST:
Request for reconsideration is dismissed because the period of
performance has lapsed making the issues raised academic.
Hugo Auchter GmbH requests reconsideration of our decision, Hugo
Auchter GmbH, B-217400, July 22, 1985, 85-2 C.P.D.P 64, in which we
denied, dismissed, and sustained in part its protest. The protest
concerned request for proposals No. F61546-84-D-0183 issued by the Air
Force for government requirements for carpet and carpet tiles. We
sustained the protest as to subitems 19AC and 19AD and recommended that
the Air Force not award those subitems to Douglass Industries, Inc., the
proposed awardee. In its request for reconsideration, Auchter argues
that we should have sustained the protest as to all of item 19 because
it alleges that award for that item had to be made on an all or none
basis.
We deny the request as academic because the planned period of
performance has passed and the agency has advised our Office that it
does not intend to make any award under line item 19. See M/A-COM Sigma
Data, Inc., B-202813.4, Sept. 6, 1983, 83-2 C.P.D. P 304.
The request is dismissed.
Robert M. Strong
Deputy Associate eneral Counsel
FILE: B-218730.3 DATE: October 4, 1985
MATTER OF: Air Inc.--Request for Reconsideration
DIGEST:
1. Prior decision is affirmed because protester has failed to
demonstrate that the decision was based upon erroneous
interpretation of fact or law or information not previously
considered.
2. Protest that IFB improperly was advertised rather than
negotiated is untimely when not filed prior to bid opening.
Air Inc. requests reconsideration of our decision in Air Inc.,
B-218730, Aug. 14, 1985, 85-2 C.P.D. P , in which our Office denied its
protest which challenged the award of a contract for a pneumatic
grinder, a total labor surplus area (LSA) set-aside item, to Cooper Air
Tools/DOTCO by the General Services Administration (GSA) under
invitation for bids No. FEP-BA-F0283-A. In our initial decision we held
that GSA properly found Air's bid nonresponsive because the bid as
submitted did not contain an unequivocal commitment to perform the
contract services in an LSA.
In its request for reconsideration, Air contends that our decision is
erroneous and generally raises the same arguments asserted in the
original protest, namely: 1) that its signature on the bid documents
represents the company's intent to he bound to produce the item in an
LSA; 2) that the requirement to designate a place of performance that
is an LSA is not a material term of the solicitation "which must be
established at bid opening," and, therefore, the failure to provide the
necessary information was a minor deviation that could have been waived
by the contracting officer.
Air cites two of our prior decisions (Steelcot Corp., B-174041, Dec.
22, 1971, and Universal Industries, Inc., B-170241, Feb. 16, 1971) as
support for its argument that a bidder's failure to provide in its bid
all of the required information concerning the location of its LSA
plant is a minor deviation which may be waived by the contracting
officer. However, the cases cited by Air are distinguishable because
the LSA bidders in those cases, unlike the protester, had specifically
certified in their bids that they were eligible for an LSA preference.
The remainder of Air's arguments were previously considered by our
Office and Air has not established that our decision denying its
original protest was based on errors of law or failed to take into
account all relevant information.
Air now maintains that the solicitation improperly was advertised and
the award of the subsequent contract was not in compliance with Federal
Acquisition Regulation, 48 C.F.R. Sec. 20.204 (1984). That provision
requires contracting agencies to award total LSA set-asides through
negotiation or restricted LSA advertising. Our Bid Protest Regulations
require that protests concerning alleged improprieties in a solicitation
which, as here, are apparent prior to bid opening must be filed with the
contracting agency or GAO prior to bid opening. 4 C.F.R. Sec. 21.2( a)
(1) (1985). Since these bases for protest are being raised 9 months
after bid opening, they are untimely and will not be considered.
We affirm the prior decision.
Harry R. Van Cleve
General Counsel
FILE: B-218668.2 DATE: October 2, 1985
MATTER OF: TRS Design & Consulting Services -- Reconsideration
DIGEST.:
1. Where misinformation from agency leads one of two offerors
remaining in the competition to miss the original closing date for best
and final offers, and the agency is in a position to correct the effect
of the misinformation prior to award by reopening discussions with both
offerors and setting a new closing date, there is nothing improper in an
agency doing so in lieu of rejecting the offer as late, leaving a single
offeror in the competition.
2. Protester's reconsideration arguments--questioning the agency's
determination that neither the protester's nor the awardee's offered
huildings were within three blocks of public transportation and eating
facilities, and thus were essentially equal in this regard for
evaluation purposes--are without merit where map offered by protester as
evidence does not show that the protester's building offered for lease
is any closer to eating facilities and transportation than the awardee's
building.
3. Reconsideration argument that the agency improperly evaluated the
offerors' prices using a deleted solicitation clause covering the use of
option year lease prices is without merit where record shows agency did
not use option prices in evaluation.
TRS Design & Consulting Services (TRS) requests reconsideration of
our decision, TRS Design & Consulting Services, B-218668, Aug. 14, 1985,
85-2 C.P.D P , in which we denied TRS's protest of the proposed award of
a contract to University Business Center Associates (University) under
solicitation No. GS-09B-38425, issued by the General Services
Administration (GSA) for the lease of office and warehouse space. We
affirm our decision.
TRS contended in its original protest that GSA's requests for
successive rounds of best and final of fers, and the evaluation process,
were deficient. We held that it was proper for the government twice to
reopen discussions after best and f inal offers (BAFO) had been
received, and we also found proper the agency's extension of the third
BAFO closing date after misleading University into missing the original
deadline. With regard to the evaluation of the offers, we found that
GSA reasonably had evaluated the buildings offered by TRS and University
as essentially equal and, thus, properly had selected University's offer
based on its low evaluated cost.
TRS now contends that we erroneously concluded that GSA acted
properly in setting a second closing date for the receipt of third best
and final offers so that GSA could accept University's otherwise late
offer. TRS also contends that we erred in concluding that GSA
reasonably had determined that TRS's building was not within three
blocks of public transportation or eating facilities and, thus, was
essentially equal to University's building for evaluation purposes. TRS
further asserts that, contrary to the statement in our prior decision,
GSA did not evaluate the offerors' final prices under paragraph 31 of
the solicitation, but instead improperly evaluated them under paragraph
32, which had been deleted by amendment prior to the submission of
initial proposals.
Second Closing Date for Third Best and Final Offers
TRS claims that the only purpose of GSA's reopening of discussions
and setting a second date for the receipt of third BAFO's was to enable
the agency to accept University's late BAFO, circumventing the
solicitation's late proposal clause. In this respect, GSA orally
advised University that its offer would not be considered late if sent
by certified mail any time prior to the closing date, even though the
late proposal rules require that an offer sent hy certified mail be sent
5 days before the closing date in order to be considered timely if
received after the closing date. TRS emphasizes that the solicitation's
late proposal clause clearly set forth the procedure for the timely
submission of offers and the consequences of submitting a late of fer.
TRS further emphasizes that the clause specifically stated that all
instructions from the contracting off icer must he in writing and oral
instructions were not binding on the offerors.
TRS, in complaining about our failure to object to GSA's action,
misses the point of our decision on this issue. It is our position,
expressed generally in our decision in ABC Food Services, Inc.,
B-181978, Dec. 17, 1974, 74-2 C.P.D. P 359, the case cited in our
decision on TRS's protest, that where two of ferors are competing for an
award and the agency's actions cause one of the offerors to miss the
deadline for submitting a BAFO, the agency thereafter may correct its
error by establishing a new BAFO deadline. The result in TRS's protest
is consistent with both the equitable considerations underlying our ABC
decision (the case involved a failure to notify an offeror of the BAFO
closing date, which prevented the firm from submitting an offer and
which we concluded should be rectified by reopening negotiations), and
our view expressed in Freund Precision, Inc., B-199364, B-200303, Oct.
20, 1980, 80-2 C.P.D. P 300, that extending the deadline for BAFO's --
even if at the request of a certain offeror -- is unobjectionable where
the extension is intended to enhance competition. GSA's reopening of
discussions certainly enhanced competition since TR would have heen the
only remaining offeror had the closing date not been extended. We find
no language in the late proposal clause, other regulations, or our prior
decisions that would prohihit the establishing of a new closing date
under these circumstances.
Availability of Public Transportation and Eating Facilities
TRS asserts that our decision ignored the fact that it had rebutted
GSA's determination that there were no eating facilities or public
transportation available within three blocks of its building. TRS
contends that it thus was entitled to an advantage over University based
on this evaluation factor, which provided for an evaluation preference
for proximity (three blocks) to transportation and restaurants. TRS
points out that in support of its protest, it submitted a zoning map of
the city of Davis, California, which indicated the location of the two
offered properties and their proximity to public transportation and
eating facilities. According to TRS, hus schedules submitted by GSA
show, when read in conjunction with TRS's map, that there are two bus
stops and a restaurant within three blocks of TRS's property. In
addition, TRS asserts that GSA improperly evaluated both the
availahility of public transportation and the availability of eating
facilities in terms of mileage, rather than the numher of blocks from an
offeror's building, as required by the solicitation.
TRS's arguments do not warrant disturbing our determination that GSA
reasonably rated the two proposals as essentially equal. The
three-block evaluation factor was a means of according an evaluation
advantage to any offered property convenient to eating facilities and
public transportation. Obviously, if it happened that all offered
properties satisfied this convenience factor, no offeror would have an
evaluation advantage over another offeror. GSA found this to be the
case here.
GSA's report stated that there is a bus stop at Pole Line Road and
Fifth Street, less than 1/2 mile from University's property. The
closest bus stop to TRS's building--at Road 103 and Cowell
Street--reportedly is 1/2 mile away. TRS's map does not show otherwise.
Since the stops are approximately the same distance from the
properties, neither offeror was entitled to an evaluation advantage over
the other, whether the measurement is made in inches, feet, blocks or
miles.
GSA's report also stated that the eating facility nearest TRS's
property--People's Choice Restaurant--is approximately 1 mile away. At
the same time, GSA's measurement by auto indicated that there was a
delicatessen, bakery, restaurant and pizza parlor 1/2 mile from
University's property; another pizza parlor and a fast food outlet
within 0.7 miles; and numerous other restaurants about 1 mile away.
TRS's map does not show otherwise. In view of GSA's measurements, it
was reasonable and proper not to accord TRS an evaluation advantage
under the three-block convenience factor.
Cost Evaluation
TRS contends that we improperly assumed in our prior decision that
GSA evaluated the price offers in accordance with the proper evaluation
provision, paragraph 31, which contemplated evaluation of only the
10-year initial lease term and not the 5 option years. In support of
this contention, TRS points out that GSA's report contains several
references to the offers being evaluated in accordance with the deleted
paragraph 32, which had provided for evaluation of the options, and that
GSA stated that one of the reasons third best and f inal of fers were
requested was the need for clarification regarding how the of ferors
should calculate operating cost escalation during the solicitation's
optional renewal periods.
We have reviewed the evaluation documents, and it is clear that GSA
based the cost evaluation solely on the prices offered for the initial
10-year lease term as provided in paragraph 31 of the RFP. The fact
that GSA specifically requested operating cost data for the option
periods does not imply otherwise. This information apparently was
intended merely to insure that a definite option renewal price would be
estahlished in the event of its future exercise. This was not improper.
See Varian Associates, Inc., B-208281, February 16, 1983, 83-1 C.P.D.
P 160.
Our decision is affirmed.
Harry R. Van Cleve
General Counsel
Matter of: Monterey City Disposal Services, Inc.
File: B-218624.3
Date: February 6, 1987
DIGEST
Protest that raises the issue of the propriety of a particular
sole-source award of refuse collection services contract is dismissed
where the same issue is encompassed in the broader issues (propriety of
past, current and future sole-source refuse collection procurements) of
a civil action initiated by the same awardee and the court has not
expressed interest in a General Accounting Office decision.
DECISION
Monterey City Disposal Services, Inc. (Monterey), protests the
Department of the Army's award of a sole-source contract for refuse
collection at Fort Ord, California, to Carmel Marina Corporation
(Carmel) under request for proposals (RFP) No. DAKF03-87-R-0507 (-0507).
We dismiss the protest because the issues raised are before a court of
competent jurisdiction.
The Army awarded Carmel the sole-source contract based on the Solid
Waste Disposal Act, 42 U.S.C. Sec. 6961 (1982), which requires
departments of the executive branch to comply with local requirements
regarding control of solid waste. The Army understood it to be a local
solid waste disposal requirement that only the city franchisee collect
refuse generated within city limits, and since a portion of Fort Ord
falls within the city limits of Seaside and Marina, California, and
Carmel holds the exclusive franchise to collect refuse within those city
limits, the Army canceled a competitive solicitation, and made an award
to Carmel, to comply with the act.
The Army's interpretation of the act is based on a United States
District Court, Northern District of California, decision, Gary Parola
and Monterey City Disposal Service, Inc. v. Casper Weinberger, et al.,
No. C-85-20303WAI, which adopted our decision, Monterey City Disposal
Service, Inc., 64 Comp. Gen. 813 (1985), 85-2 C.P.D. Sec. 261, affirmed,
B-218824.2, B-218880.2, Sept. 18, 1985, 85-2 C.P.D. P 306. These cases
held that, in view of the provisions of the act, federal agencies
seeking waste disposal services for certain federal facilities within
the city of Monterey, California, were required to contract with the
city's franchisee, as called for by local regulations.
Monterey contends in the present case that Fort Ord is not subject to
Carmel's exclusive franchise as sole refuse collector within the city
limits because, unlike in the prior case, neither Seaside nor Marina has
evidenced a clear intent to subject Fort Ord to the local requirement.
Monterey also objects to the Army's awarding of a contract to Carmel in
the face of Monterey's agency protest of the competitive solicitation's
cancellation; the Army's failure to justify its use of noncompetitive
procedures; and the Army's failure to stay performance pending
resolution of the protest.
Carmel has filed suit against the Army in District Court, Carmel
Marina Corp. v. Casper Weinberger, et al., No. C-8620134WAI9(SJ),
asserting Carmel's sole right to collect refuse at Fort Ord, and seeking
a permanent injunction to prevent the Army from contracting with any
other entity for refuse collection at Fort Ord. Although Carmel's suit
is not per se founded on the protested solicitation, the issue of
whether Carmel is entitled to be the exclusive waste disposal contractor
at Fort Ord necessarily encompasses the question of whether Carmel was
entitled to a sole-source award under RFP-0507 and, thus, whether
cancellation of the competitive solicitation was proper. If the court
agrees with Carmel, then it follows that the cancellation and
sole-source award were proper. Conversely, the noncompetitive award
would be improper were the court to hold that Carmel does not have the
exclusive rights it claims by virtue of the act.
We conclude that Carmel's complaint puts at issue the substance of
Monterey's protest. Our Bid Protest Regulations, 4 C.F.R. Sec. 21.3(f)
(11) and Sec. 21.9(a) (1986), provide for the dismissal of any protest
where the matter involved is the subject of litigation before a court of
competent jurisdiction and the court has not expressed an interest in
our opinion. Since the court has not requested our decision, we will
not review the matter.
The protest is dismissed.
Robert M. Strong
Deputy Associate
General Counsel
B-218622.5
January 30, 1987
DIGEST
Prior denial of claim for bid preparation expenses is affirmed where
claimant does contest legal rationale for denial of claim.
Developing Countries Information Research Services
P.O. Box 53190
Washington, D.C. 20009
Attention: Dr. Bijan Sepasy
President
Gentlemen:
You have again requested reconsideration of our decision in Agency
for International Development; Developing Countries Information
Research Services--Reconsideration, B-218622. 2, B-218622.3, Sept. 25,
1985, 85-2 C.P.D. P 336, Reconsidered, Nov. 13, 1985, 87-1 C.P.D. P , in
which we denied your claim for hid preparation expenses incident to the
award of an Agency for International Development (AID) contract to
another firm in June 1984.
As we previously explained in our November 13, 1985, decision, you
are not entitled to these costs since there was no showing that you were
entitled to receive the award under the solicitation in question.
Rather, we found the solicitation to be defective as we explained in our
decision of September 25, 1985.
You have not contested our denial of your claim except to allege that
AID has not recompeted the services under the solicitation as we
originally recommended. Nevertheless, AID now states that it is its
intent to recompete the remaining services in accordance with our
original decision. In any event, AID's decision regarding our
recommendation on the protested contract does not affect in any way the
propriety of our decision denying your claim for bid preparation costs.
We trust this information responds to the comments of your letters.
Sincerely yours,
John F. Mitchell
Group Managing Attorney
FILE: B-218615.2 DATE: October 8, 1985
MATTER OF: TCA Reservations, Inc.--Reconsideration
DIGEST.:
Prior decision denying protest is affirmed where protester
fails to present facts or legal arguments which were not
previously considered.
TCA Reservations, Inc. (TCA) requests reconsideration of our decision
in TCA Reservations, Inc., B-218615, Aug. 13, 1985, 85-2 C.P.D. P ,
denying its protest that the Air Force improperly rejected its bid under
invitation for bids (IFB) No. F41800-84-B-8831 for the bid's failure to
acknowledge a material amendment. The purpose of the solicitation was
to provide the basis for a cost comparison to determine whether to
perform certain word processing services in-house or under contract.
We affirm the prior decision.
TCA alleged in its original protest that it did not receive a copy of
the amendment, and argued that it was the Air Force's responsibility to
insure bidders' timely receipt of amendments. TCA also suggested that
its failure to acknowledge the amendment, which added a new wage rate
and a new work station, should be waived as a minor irregularity since,
according to TCA, its planned wages were higher than the minimum wages
prescribed by the wage rate determination, and because it took into
account the added work station based on the contracting officer's oral
advice that the IFB would be amended.
We denied the protest because it is a well-established rule that a
bidder bears the risk of not receiving IFB amendments unless it is shown
that the contracting agency made a deliberate attempt to exclude the
bidder from competing. Reliable Service Technology, B-217152, Feb. 25,
1985, 85-1 C.P.D. P 234. TCA did not allege that the Air Force
attempted to so exclude TCA. Further, notwithstanding the fact that
TCA's wage plan may have provided higher wages than the minimum wages
prescribed by the amendment, the failure to acknowledge an amendment
that upwardly revises a wage rate generally renders a bid nonresponsive
because without the acknowledgment, the bid does not legally obligate
the bidder to pay the wages prescribed by the amendment. Id.
TCA's reconsideration request reiterates its belief that it was the
Air Force's responsibility to assure bidders' timely receipt of
amendments. In addition, TCA now argues that the Air Force presumably
failed to mail the amendment in a deliberate attempt to eliminate
bidders. In support of this allegation, TCA states that it believes
there was another bid that was determined to be nonresponsive for its
failure to acknowledge an amendment.
Under our Bid Protest Regulations, a request for reconsideration must
contain a detailed statement of the factual and legal grounds upon which
reversal or modification of a decision is deemed warranted and must
specify any errors of law made in the decision or information not
previously considered. 4 C.F.R. Sec. 21.12(a) (1985). 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. BECO Corp.--Reconsideration,
B-219350.2, June 20, 1985, 85-1 C.P.D. P 707. Repeating its argument
that the Air Force had a duty to assure bidders' receipt of amendments
does not meet this standard. See id. Mere disagreement with our prior
decision provides no basis for reversing the decision. Mayden &
Mayden--Reconsideration, B-218422.2, May 13, 1985, 85-1 C.P.D. P 539.
We point out simply that it is not the agency's obligation to ensure
receipt of solicitation amendments by bidders, and it is therefore
prudent for bidders to check with the contracting officer prior to bid
opening to make sure it has received all amendments issued.
TCA's allegation that the Air Force deliberately withheld mailing
amendments (of which there were two) is based only on inferences drawn
from TCA's nonreceipt of the amendment and on the rejection of one of
six other bids for its failure to acknowledge an amendment. Such
inferences are insufficient to support a finding that the Air Force made
a deliberate attempt to exclude TCA from competing. The protester has
the burden of proving its case, and we will not attribute improper
motives to procurement personnel on the basis of inference or
supposition. Serv-Air, Inc., B-216582, Jan. 16, 1984, 85-1 C.P.D. P 42.
The prior decision is affirmed.
Harry R. Van Cleve
General Counsel
FILE: B-218610 DATE: October 2, 1985
MATTER OF: Vrooman Constructors, Inc.
DIGEST:.
Where protester--awarded a contract with the stipulation that
GAO could review the agency's denial of a request to correct
mistakes in the bid--presents clear and convincing evidence of its
mistake, and its alleged intended bid falls within a relatively
narrow range of uncertainty that is not inconsistent with the
clear and convincing evidence rule, GAO recommends reformation to
correct the mistakes in bid.
Vrooman Constructors, Inc. (Vrooman), requests our review of the
Department of the Army Corps of Engineers' (Corps) denial of its
preaward request to correct mistakes in its low bid that was submitted
in response to invitation for bids (IFB) No. OACA45-85-B-0043 issued by
the Corps for a construction project at F.E. Warren Air Force Base,
Cheyenne, Wyoming. Notwithstanding the alleged mistake, Vrooman was
awarded the contract at its bid price of $8,435,000. The parties,
however, stipulated in the con- tract that Vrooman could present its
preaward claim for bid correction to an appropriate authority, thus
preserving Vrooman's right to submit the matter to our Of f ice.
We find that Vrooman's contract should be reformed to correct the
mistakes.
The facts are not in dispute. Six bids were received in response to
the IFB, ranging from $8,435,000 to $15,250,000. Vrooman, the low
bidder, was $1,153,000 (12 percent) below the government's estimate of
$9,588,000 and S1,102,000 (11.6 percent) below the next low bid.
Because of these dif ferences, the Corps asked Vrooman to review and
verify its bid.
Vrooman explains that minutes before bid opening, Vrooman had
developed a written "Final Sheet" containing a base-line price of
$8,950,800 based on summary sheets for the various elements of the bid.
These sheets contained a detailed list of items needed for each major
element of the construction project and the costs of those items.
Anticipating possible lower price quotations from potential
subcontractors for four elements (excavation, mechanical, electrical,
and steel), Vrooman broke those elements out of its final worksheet and
left spaces for reductions. Vrooman lined out two of those areas,
keeping the original amounts, but did reduce the costs of mechanical and
steel based upon telephonic quotations from other sources.
In both cases, the quotations omitted certain items and covered only
part of the work within the element. The Vrooman employee preparing
Vrooman's bid received the summaries of the quotations close to the
deadline for submitting a bid and, in his haste, failed to notice that
the quotations covered only part of the steel and mechanical elements of
the work. He reduced each element by the dif ference between the
previously entered amount and the new quotation, which had the effect of
reducing the base-line price by $515,800 to the amount actually bid.
Vrooman therefore requested correction of its bid to include the
$515,800 and to reflect the original base-line price.
The Corps, while acknowledging that the mistakes were made, denied
Vrooman's request for bid correction because Vrooman's worksheets showed
it had received other quotations for the two elements that were a total
of $79,300 lower than tne amounts for those items in the base-line
price. The Corps decided that Vrooman had failed to establish how the
cost of the omitted work would ultimately have been calculated. The
Corps therefore denied Vrooman's request for correction since the bidder
had failed to meet its burden of providing clear and convincing evidence
of the actually intended bid.
Applicable regulations provide that a mistake in bid alleged before
award may be corrected where the bidder presents clear and convincing
evidence establishing both the existence of the mistake and the bid
actually intended, provided that the correction would not result in the
displacement of a lower bid. Federal Acquisition Regulation, 48 C.F.R.
Sec. 14.406-3(a) (1984).
We agree with the Corps that a bidder generally may not obtain
correction, for even a clearly mistaken bid, based on computations or
recomputations performed after bid opening to cover items for which the
bidder did not intend precise price factors before bid opening. See
General Elevator Company, Inc., 57 Comp. Gen. 257 (1978), 78-1 C.P.D. P
81; Amtech Elevator Services, B-216067, Jan. 11, 1985, 85-1 C.P.D. P
70; J.W. Creech, Inc., B-191177, Mar. 8, 1978, 78-1 C.P.D. P 186.
This Office has also recognized that, in limited circumstances,
correction may be proper even though the intendeo bid cannot be
determined exactly, provided there is clear and convincing evidence that
the intended bid would remain low. R&R Contracting, Inc., B-217412,
Mar. 1, 1985, 85-1 C.P.D. P 260. We have permitted correction where an
intended bid is clearly and convincingly shown to fall within a narrow
range of uncertainty below the next low bid. See Western States
Construction Co., Inc., B-191209, Aug. 29, 1978, 78-2 C.P.D. P 149. The
sufficiency of evidence must be reviewed in relation to how close the
top of the range of uncertainty is to the next low bid. See Sam
Gonzales, Inc., B-216728, Feb. 1, 1985, 85-1 C.P.D. P 125; Dadson
Corp., B-210413, June 7, 1983, 83-1 C.P.D. P 618. The closer the top of
the range of uncertainty is to the next low bid, the greater the risk
associated with trying to establish an intended bid, and correction may
be disallowed where the upper range of uncertainty is too close to the
next low bid. Sam Gonzales, Inc., B-216728, supra; Fortec
Constructors, B-203190.2, Sept. 29, 1981, 81-2 C.P.D. P 264.
In this case, there is no dispute that Vrooman's spread sheets and
final sheet show that Vrooman had intended to price the items whicn were
mistakenly omitted from the bid price. Further, it is not contested
that Vrooman shortly before bid opening had selected subcontractors'
quotations, that included the suosequently omitted items. While
portions of other quotations by themselves or in combination with other
quotations might have yielded lower prices for the omitted items, thus
creating some uncertainty as to the intended bid, the low range of
uncertainty (as indicated by Vrooman's own calculations after bid
opening) is a bid price of $8,871,500--that is $79,300, or 1 percent,
less than the alleged intended bid of $8,950,800. The alleged intended
bid which represents the top of the range of uncertainty is still
$586,200, or more than 6 percent less than the next low bid. Thus, the
undisputed circumstances of this case are that Vrooman's intended bid
clearly falls within a narrow range of uncertainty of which the upper
end is significantly lower than the next low bid.
We believe that under these circumstances, correction is not
inconsistent witn the standard of clear and convincing evidence of the
actually intended bid. We agree with the Corps, however, that Vrooman
mignt have used the other available quotations if it had been aware of
its mistakes and believe that correction should place the contractor at
the bottom of the range of uncertainty. See Chris Berg, Inc. v. United
States, 426 Fed. 2d 314, 316 (Ct. Cl. 1970).
We therefore recommend that the Corps reform Vrooman's contract to
increase the price by not more than $436,500 to a total price of
$8,871,500, representing the bottom of the range of uncertainty as to
Vrooman's actually intended bid.
Comptroller General
of the United States
Matter of: Cardion Electronics--Request for Reconsideration
File: B-218566.4
Date: January 27, 1987
DIGEST
1. General Accounting Office (GAO) affirms decision denying a protest
that specifications for airport surface detection equipment unduly
restricted competition when a GAO audit finds that the specifications
were based on the procuring agency's needs for maintaining and enhancing
airport safety.
2. General Accounting Office (GAO) affirms decision denying protest
that capabiiities required by specifications were beyond the
state-of-the-art and involved severe risk where the protester fails to
demonstrate that specifications were impossible to meet and a GAO audit
finds that they pose no more than the manageable risks commonly accepted
in the industry. Subsequent delays in the performance due to reasons
unrelated to the specifications do not demonstrate their impossibility.
3. Protest that specifications were ambiguous is denied where the
General Accounting Office finds no ambiguity and where in any case there
is no showing of competitive prejudice.
DECISION
Cardion Electronics requests that we reconsider our decision in
Cardion Electronics, B-218566, Aug. 15, 1985, 85-2 CPD P 172. In that
decision, we denied Cardion's protest against the terms and conditions
of request for proposals No. DTFA01-85-R-06426, issued by the Federal
Aviation Administration (FAA) for the supply and instaliation of an
airoort surface detection equipment system known as ASDE-3. We affirm
our August 15 decision.
BACKGROUND
As explained in our prior decision, the FAA uses ASDE, an airport
ground surveillance radar, to provide air traffic controllers with
information on aircraft and vehicles, either stationary or moving,
located on or near airport runways, taxiways, and aprons. The current
system, ASDE-2, is a 20-year old vacuum-tube system that suffers from
serious maintenance problems and is nearly useless in heavy rain.
Accordingly, for a number of years the FAA has been developing
specifications for a system capable of meeting its requirements for the
next 20 years. It seeks a reliable system providing a clear, accurate,
and bright presentation of aircraft and vehicles at or near movement and
holding areas under all weather and visibility conditions. After first
developing an engineering prototype in conjunction with Cardion and
then, in 1982, drafting specifications, in 1984 the FAA issued the
revised ASDE-3 specifications incorporated into the current
solicitation.
In its protest to our Office, Cardion alleged that the ASDE-3
specifications were unduly restrictive of competition because they
either exceeded the FAA's minimum needs, were beyond the state-of
-the-art, or could not be met within the specified delivery schedule.
In particular, Cardion challenged requirements (1) that the ASDE-3 radar
be capable of transmitting over a frequency range of 15.7 GHz to 17.7
GHz (Ku-band) 1/, rather than a narrower frequency range of 15.7 GHz to
16.2 GHz; (2) that a Remote Monitoring Subsystem at each FAA sector
office continuously monitor the operational status and performance of
ASDE, isolate 85 percent of all single failures to the replaceable
circuit board and/or module level, and report the resulting data to the
sector office; and (3) that the Display Processor Subsystem include
certain features such as a split-screen display (in which the radar
screen is divided into several display sections) and the capability to
display data from a number of radars at the same airport on a sinqle
mosaicked display.
The FAA responded that these capabilities were required in order to
meet its minimum needs over the next 20 years. The FAA contended that
the flexibility of separate operating frequencies within the broad
frequency range of 15.7 GHz to 17.7 GHz was necessary in order to reduce
the potential for interference not only from current sources of
electromagnetic emissions, but also from multiple ASDEs in the same area
and from future enhancements to airport communications and surveillance
equipment. The agency defended the requirement for remote monitoring
capability as essential to its goal of meeting future facility
maintenance requirements with a reduced work force. Finally, the FAA
explained that the required display features had been selected in order
to provide the flexibility and capability of handling expected airport
traffic over the next 20 years.
In our August 15 decision, we concluded that the FAA had met its
burden of establishing prima facie support for its contention that the
restrictions it imposed were needed to meet its current minimum needs,
as well as future requirements. We further concluded that Cardion had
failed to show that the requirements were unreasonable.
On September 30, 1985, the FAA made award to United Technologies'
Norden Systems, Inc. Subsequently, on October 18, the Office of the
Inspector General, Department of Transportation, issued a report (No.
AV-FA-6-002) on this procurement. While the Inspector General
recognized that current ASDE-2 equipment is often ineffective during
inclement weather and is expensive to maintain, he criticized the ASDE-3
procurement, primarily on cost-effectiveness grounds. The contract
awarded to Norden provided for the procurement of 17 ASDE-3 units and
afforded the government the option of ordering an additional 25 units at
fixed prices. The Inspector General, however, pointed out that a 1982
cost-benefit analysis had indicated that installation of ASDE-3 units
was economically justified for only 9 of the 23 airports surveyed.
The Inspector General also contended that the agency, by
incorporating the enhancements into the specifications and failing to
use off-the-shelf equipment, had imposed significant developmental risk
and delayed delivery, since the current specifications had not been
subjected to the same, extensive evaluation as that which preceded the
1982 specifications and had not been operationally tested.
The FAA challenged the Inspector General's conclusion concerning the
cost-effectiveness of the ASDE-3 system and contended that he had taken
a "short-sighted view of the safety ramifications of the program," which
will provide "a significant level of safety during periods of fog/rain
and other inclement weather conditions and will assure appropriate
separation of aircraft and vehicles at airports where vision from the
tower cab is restricted by buildings or distance."
Accordingly, in October 1986, FAA exercised its option for additional
ASDE-3 units.
GAO AUDIT
In view of the questions raised by the Inspector General, and acting
pursuant to a congressional request, the Resources, Community, and
Economic Development Division (RCED) of the General Accounting Office
(GAO) undertook an audit of certain aspects of the ASDE-3 Procurement.
Our auditors found that:
". . . FAA's ASDE-3 operational requirements and specification
were, in general, supported because they were based on FAA's
mission needs as required by Office of Management and Budget (OMB)
Circular A-109. GAO also believes that the specification was
within industry state-of-the-art and, consequently, poses
manageable and reasonable schedule and performance risks."
GAO, AIRPORT RADAR ACQUISITION, FAA's Procurement of Airport Surface
Detection Equipment at 3 (RCED 87-18, Dec. 17, 1986).
In reaching these conclusions, the audit report noted FAA's findings
that (1) the ability to employ frequency agility over the larger 2.0 GHz
range is more effective than over the 0.5 GHz band in some
conditions--for example, heavy rain or snow--in obtaining the required
clutter-free display, and (2) the increased spectrum is needed to permit
ease of frequency selection--tuning the ASDE to a different frequency
within the 2.0 GHz band--where interference occurs with other
transmitting devices such as military radars.
The report pointed out that FAA expects to save $100 million annually
when a remote maintenance monitoring capability becomes fully
implemented; it agreed with the agency that it is cheaper to build this
capability into the initial design, rather than to and it later. The
report further pointed out that the capability for a split-screen
display highlights the location of the target aircraft in relation to
other aircraft or key runway intersections by displaying two different
views of the airport surface at one time on one screen. In addition,
the report stated that a mosaicked display integrating the output of two
radars into a single image results in a more sharply defined image of an
aircraft that is at a great distance from the radar antenna or that is
partially obscured by a structure or another aircraft.
With regard to the risks inherent in the specifications, it found
that the specifications did not go beyond the stateof-the-art, compared
favorably with Department of Defense specifications for airborne
electronic equipment, and posed no more than the manageable risks
commonly accepted in the industry. The report noted that a consultant
from the Massachusetts Institute of Technology's Lincoln Laboratory had
concluded in early 1985 that the majority of the features in the
specifications could be found in operating radars and in the radar
specifications of other civil aviation agencies. The report indicated
that the technology for remote maintenance monitoring was generally
available and that the computer programs necessary to support both
split-screen and mosaicked displays were sufficiently developed so as to
present little challenge to potential offerors. It also noted that
Norden had been able to subcontract with two separate firms for a
traveling wave tube offering the required frequency range at
approximately half the expected cost.
Nevertheless, the report found that the display processor and remote
maintenance monitoring systems still pose major risks because of
uncertainties regarding software programming. Thus, for "reasons
unrelated to the specification, namely staffing shortages and
subcontracting delays," Norden faces production schedule slippage. Id.
at 24.
REQUEST FOR RECONSIDERATION
In its request for reconsideration of its bid protest, Cardion
restates many of its original arguments concerning FAA's minimum needs.
We remain unconvinced by these arguments, which we discussed in detail
in our prior decision and which we considered again in connection with
the audit.
With regard to development risk, we note that Cardion itself admits
that "most of the contested features have been demonstrated somewhere,
and thus qualify as state-of-the-art." Although Cardion maintains that
"combinations of these features can result in a formidable design task,"
the audit report found that the specifications posed no more than the
manageable risks commonly accepted in the industry. The fact that
Norden now faces production schedule slippages due to reasons unrelated
to the specifications does not demonstrate that the specifications are
unreasonably risky or that compliance with them is impossible. As we
have previously indicated, the fact that a solicitation may impose a
risk does not render it defective, since some risk is inherent in most
types of contracts. Offerors were expected to allow for such risk in
formulating their offers. See Dyneteria, Inc., B-222773, Aug. 5, 1986,
86-2 CPD P 157; Edward E. Davis Contracting, Inc., B-211886, Nov. 8,
1983, 83-2 CPD P 541. 2/
By means of its protest, Cardion seeks to redefine and reduce the
FAA's needs for the next 20 years, thereby preserving any competitive
advantage that it may have gained from its involvement in the
development of the engineering prototype for the ASDE-3. In resolving
protests under the Competition in Contracting Act of 1984, however, our
duty is to determine whether the procurement statutes and regulations
have been violated. 31 U.S.C. Sec. 3554 (Supp. III 1985). It is not
for us to determine the balance between cost and safety, or to
substitute our judgment for that of the FAA. As we emphasized in our
prior decision, our conclusions as to the required frequency range,
remote maintenance monitoring, and disolay features in no way indicated
that we had also concluded that the ASDE-3 specifications were the most
costeffective, efficient means by which the FAA could satisfy the
requirement for an airport surface detection system. Moreover, the
audit report found the FAA's benefit-cost methodology questionable, and
it recommended changes to which the FAA has agreed.
In our bid protest decision, we held that Cardion had failed to carry
its burden of proving that the specifications were defective under the
procurement statutes and regulations. The conclusion resulting from our
audit that the ASDE-3 operational requirements and specification were
based on FAA,s mission needs confirms our prior bid protest decision in
this regard.
Cardion, in its request for reconsideration, also challenges some of
the other enhancements to the 1984 specifications. To the extent that
Cardion is alleging that these specifications are unduly restrictive and
exceed the FAA's minimum needs, we find the ailegations untimely.
Protests based upon alleged improprieties in a solicitation that are
apparent before the closing date for receipt of initial proposals must
be filed by that date. 4 C.F.R. Sec. 21.2(a)(1) (1986). Accordingly,
we will not consider Cardion's protest of the additional enhancements.
Cardion next questions the determination in our prior decision as to
the untimeliness of its aliegation that the required level of fault
isolation under the remote monitoring system was ambiguous. Cardion
first raised this ground of protest in its comments on the FAA's report.
The audit report found that this alleged impropriety also had been
apparent before the closing date for receipt of initial proposals, and
we therefore dismissed it. Cardion now argues that the ambiguity was
not apparent until it learned, after the closing date, that another
offeror had interpreted the specifications to require a different level
of fault isolation.
Turning to the merits of this argument, we are not convinced that the
specifications were ambiguous. The audit report found that the
specification concerning the required level of fault isolation was
typical of the language used in similar system specifications ana well
understood in the industry, and that the specifications in general were
clearly written. Moreover, since Cardion indicates that it prepared its
proposal with the understanding that the remote monitoring system was
required to isolate faults down to the circuit board or module level,
the level which the FAA maintains was required and which the awardee
offered to meet, we fail to see how Cardion was prejudiced by the
alleged ambiguity. Cf. Analytics Inc., B-215092, Dec. 31, 1984, 85-1
CPD P 3; Contact International, Inc.--Request for Reconsideration,
B-210082.2, Sept. 2, 1983, 83-2 CPD P 294.
Finally, Cardion seeks to recover the costs of preparing its proposal
and of filing and pursuing its protest. Since, however, Cardion has
failed to demonstrate that the award to Norden did not comply with
statute or regulation, we find no basis upon which to allow such costs.
4 C.F.R. Sec. 21.6(d).
Our prior decision is affirmed.
Harry R. Van Cleve
General Counsel
FOOTNOTES
1/ GHz is an abbreviation for giga (1 billion) hertz (cycles per
second). Transmission frequency is established by the number of cycles
per second, and each transmitting system (e.g., a radio station) has its
own assigned operating frequency or frequency range.
2/ We recognize that Cardion, commenting on a draft version of the
report, postulates several risks associated with Norden's use of a
low-power transmitter to provide transmitting capability over a 15.7 to
17.7 GHz frequency range. The final report, however, specifically
addresses this point, noting that the review of the ASDE-3 procurement
did not identify low power as a significant Performance risk. Moreover,
to the extent that any risks exist, the final report indicated that
Norden and FAA should be able to manage them successfully and thereby
meet the specifications.
File: B-218497.2
Date: October 22, 1991
Matter of: Application of Foreign Shipyard Construction Prohibitions
to Inflatable and Rigid Hull Inflatable Boats
DIGEST
1. Navy determination that the Tollefson-Byrnes Amendment to the
"Shipbuilding and Conversion, Navy" appropriation prohibiting foreign
shipyard construction of naval vessels or major components of the hull
or superstructures of naval vessels applies only to vessels appearing on
the Naval Vessel Register, and not to boats as defined in Navy
Regulations, is not unreasonable and therefore entitled to substantial
deference. Therefore, Tollefson-Byrnes Amendment does not apply to
inflatable, or rigid hull inflatable boats.
2. Navy determination that 10 U.S.C. Sec. 7309(a) prohibiting foreign
shipyard construction of vessels for any of the armed forces or major
components of the hull or superstructure of any such vessels applies
only to vessels that have fixed and rigid hulls and superstructures, is
not unreasonable and therefore entitled to substantial deference.
Therefore, 10 U.S.C. Sec. 7309(a) does not apply to inflatable boats but
does apply to rigid hull inflatable boats.
DECISION
This is in response to a request from E. B. Harshbarger, Captain, SC,
USN, Deputy Commander for Contracts, Naval Sea Systems Command,
Department of the Navy, for our views on Navy's construction of the term
"vessels" for purposes of the prohibitions against foreign shipyard
construction contained in the Tollefson-Byrnes Amendment to the
appropriation for "Shipbuilding and Conversion, Navy" and in 10 U.S.C.
Sec. 7309(a) (1988). In particular, the Navy desires our advice on
whether the prohibitions apply to inflatable and rigid-hull inflatable
boats.
The Navy interprets the prohibition on the construction in foreign
shipyards of "naval vessels" in the Tollefson-Byrnes Amendment to mean
only vessels appearing on the Naval Vessel Register. However, because
the prohibition in 10 U.S.C. Sec. 7309 is on the construction in
foreign shipyards of "vessels" as opposed to "naval vessels" in
Tollefson-Byrnes, the Navy interprets 10 U.S.C. Sec. 7309(a) more
broadly than Tollefson-Byrnes, but believes that other language in
section 7309 permits Navy to limit the prohibition's application to only
vessels that have fixed and rigid hulls or superstructures. The Navy
therefore concludes that the Tollefson-Byrnes Amendment does not apply
to either inflatable boats or rigid hull inflatable boats and that
section 7309 does not apply to the former but does apply to the latter.
Based on our review of the statutes, their legislative history, and
historical practices, we do not find Navy's conclusions unreasonable and
therefore do not object to them.
BACKGROUND
In the past, the Navy interpreted the prohibitions in Tollefson-Byrnes
Amendment and 10 U.S.C. Sec. 7309(a) to apply only to vessels listed in
the Naval Vessel Register. Recent amendments to the language of 10
U.S.C. Sec. 7309(a) plus, the decisions of this Office applying the
amended language 1/ have prompted Navy to reevaluate its position and to
include the foreign shipyard construction prohibitions in solicitations
for various boats not on the Naval Vessel Register. However, because
the Navy believes it is not clear that Congress actually intended the
prohibition to apply to boat construction, it sought our opinion.
During our consideration of the issues presented by Navy's request, we
received the views of the Coast Guard 2/, and various representatives of
the shipbuilding industry and foreign governments and considered them to
the extent germane to Navy's request. 3/ Submissions by the Navy and
others focused specifically on whether the prohibitions at issue apply
to boats, particularly inflatable and rigid hull inflatable boats.
TOLLEFSON-BYRNES
The annual "Shipbuilding and Conversion, Navy" (SCN) appropriation
account makes funds available:
"For expenses necessary for the construction, acquisition, or
conversion of vessels as authorized by law . . . Provided further,
(t)hat none of the funds herein provided for the construction or
conversion of any naval vessel to be constructed in shipyards in
the United States shall be expended in foreign shipyards for the
construction of major components of the hull or superstructure of
such vessel: Provided further, (t)hat none of the funds provided
shall be used for the construction of any naval vessel in foreign
shipyards." 4/
The first proviso quoted (known as the "Tollefson Amendment") first
appeared in the fiscal year 1965 SCN appropriation and the second
proviso quoted (known as the "Byrnes Amendment") first appeared in the
fiscal year 1968 SCN appropriation.
The Navy keys its interpretation of the Tollefson-Byrnes prohibition by
reference to "naval vessels." 5/ In Navy's view, the term "naval
vessels" does not mean "vessels" as defined by 1 U.S.C. Sec. 3.6 Instead
it is a distinct subclass of "vessels" of the Navy, defined in scope by
reference to the Naval Vessel Register.
The use of the term "vessel" 7/ in the SCN appropriation to define the
scope of the use of funds for acquisition purposes, and the use of the
term "naval vessel" in the prohibition regarding foreign construction,
lends support to Navy's determination that "vessels" and "naval vessels"
do not mean the same thing. Since the SCN appropriation is otherwise
available for acquisition of "vessels" for the Navy, it would render the
term "naval vessel" meaningless by interpreting it to mean all
"vessels." 8/
With the foregoing distinction in mind, Navy explains its decision to
construe "naval vessel" to mean only vessels that appear on the Naval
Vessel Register as follows:
"NAVSEA's interpretation of 'naval vessels' for purposes of the
foreign shipyard construction prohibitions was derived from
Chapter 633 of Title 10, entitled 'Naval Vessels' (the same
chapter in which Section 7309 appears). 10 U.S.C. Sec. 7291
authorizes the President to establish, and from time to time
modify, as the needs of the service may require, a classification
of 'naval vessels.' The classification authorized by section 7291
is reflected in the Naval Vessel Register. Since 10 U.S.C. Sec.
7291 authorized the President to establish a classification of
'naval vessels', and since the Naval Vessel Register was (and is)
the means of classifying naval vessels pursuant to section 7291,
NAVSEA concluded that the term naval vessel employed in the
Byrnes-Tollefson Amendments and in the original version of 10
U.S.C. Sec. 7309 would have the same meaning as in section 7291.
"The Naval Vessel Register, issued pursuant to Section 7291 within
Chapter 633 of Title 10, has been promulgated annually since at least
1920, and, therefore, was presumably known to Congress at the time the
foreign shipyard construction prohibitions first arose, at which time
the term 'naval vessel' was selected by Congress, and on the subsequent
date when the prohibitions were codified in the Title 10 Chapter
entitled 'Naval Vessels'."
If Congress has not directly spoken to the precise question at issue,
the construction put on a statute by the agency charged with its
administration is entitled to substantial deference and is generally
affirmed by the courts if reasonable. Chevron U.S.A., Inc. v. National
Resources Defense Council, 467 U.S. at 842-845 (1984). Agency
constructions will be upheld even without a finding that it was the only
construction the agency could have adopted or that it was the
construction a court would have reached if the question had first arisen
in a judicial proceeding. Train v. Natural Resources Defense Council,
Inc., 421 U.S. 60 (1975).
Navy's reference to the Naval Vessel Register to define "naval vessels"
for purposes of the Tollefson-Byrnes Amendment appears reasonable. Navy
is independently authorized by law to classify "naval vessels" and
nothing in the Tollefson-Byrnes Amendment or its history provides any
clear guidance to the Navy that such classifications are not appropriate
for purposes of the Amendment. 9/
SECTION 7309(a) OF TITLE 10, UNITED STATES CODE
In 1982, Congress enacted a permanent prohibition against foreign
shipyard construction. As initially enacted, 10 U.S.C Sec. 7309(a)
provided:
"Sec. 7309. Restriction on construction of naval vessels in
foreign shipyards
"(a) Except as provided in subsection (b) 10/ no naval vessel, and no
major component of the hull or superstructure of a naval vessel, may be
constructed in a foreign shipyard." 11/
In 1984, section 7309(a) was amended to read "no naval vessel, and no
vessel of any other military department. 12/ Emphasis supplied. In
1987, section 7309(a) was again amended to further extend the
prohibition to vessels "for any of the armed forces" 13/ and it now
reads as follows:
"Sec. 7309. Restrictions on construction or repair of vessels in
foreign shipyards
"(a) Except as provided in subsection (b), no vessel to be constructed
for any of the armed forces, and no major component of the hull or
superstructure of any such vessel, may be constructed in a foreign
shipyard."
The Navy construed the term "naval vessel" as initially used in 10
U.S.C. Sec. 7309(a) consistent with its previous construction of the
term "naval vessel" as used in the Tollefson-Byrnes Amendment, i.e.,
vessels appearing on the Naval Vessel Register. The Navy based its
construction on the fact that Congress enacted 10 U.S.C. Sec. 7309(a)
for the purpose of making the Tollefson-Byrnes prohibitions permanent
law. 14/
Just as we must recognize the difference between the term "vessel" and
"naval vessel" when construing the SCN appropriation (and 10 U.S.C. Sec.
7309 as initially enacted), we also must recognize and give effect to
Congress's subsequent elimination of the distinction between "vessels"
and "naval vessels" in 10 U.S.C. Sec. 7309. Certainly, if Navy's
position that the "naval vessels" in Tollefson-Byrnes and the initial
versions of 10 U.S.C. Sec. 7309 is a distinct class of "vessels" is
reasonable, as we think it is, it is not unreasonable to conclude that
Congress's deletion of "naval" from section 7309 should result in a
broader prohibition. 15/ Since "vessels" is a statutory term broadly
defined in 1 U.S.C. Sec. 3 and made expressly applicable to title 10 of
the United States Code, Congress presumably intended the broader
application resulting from its use of "vessels" in the prohibition
contained in 10 U.S.C. Sec. 7309. 16/ Further, there is no evidence in
the legislative history of the amendments to 10 U.S.C. Sec. 7309 that
Congress expected the Navy, notwithstanding the deletion of "naval" from
10 U.S.C. Sec. 7309, to continue applying the prohibition only to
vessels on the Naval Vessel Register. Thus, we agree with Navy that
"vessel" as used in 10 U.S.C. Sec. 7309 is no longer limited to vessels
on the Naval Vessel Register, and should be afforded its normal
statutory usage except to the extent the statutory context indicates
otherwise.
Meaning of Vessel
While Navy asserts that "vessels" in section 7309(a) should be
interpreted by reference to the definition of "vessels" in 1 U.S.C. Sec.
3, Navy cautions that this broad definition of "vessels" must be refined
to achieve consistency with the statutory context, i.e., the purpose and
the language of the provision in which it appears. 17/ Navy views the
limitation of section 7309(a) as applicable to all vessels that have
constant fixed or rigid hulls or superstructures and not to vessels such
as inflatable boats. 18/ (Inflatable boats are generally made of
flexible materials and inflated in order to maintain form and
flotation). 19/
The Navy supports its present construction of "vessels" in 10 U.S.C.
Sec. 7309(a) with an analysis of the legislative evolution of the
foreign shipyard construction prohibitions. Navy points out that the
drafters of the Tollefson Amendment appear to have been concerned with
hulls and superstructures as components of naval vessels, and this
implies something rigid and fixed. Nothing in the Byrnes Amendment
changed this focus. Further, the purpose of section 7309(a) as
initially enacted was to make permanent the Tollefson-Byrnes
prohibitions. Finally, although subsequent amendments to section
7309(a) expanded its reach, there is no indication that Congress wanted
the prohibition to apply to vessels lacking rigid hulls or
superstructures. Therefore, the Navy argues that the term "vessel" in
section 7309(a) must be construed as limited to vessels having rigid or
fixed hulls.
As we discussed earlier, Navy's construction of the statute is entitled
to deference even if it is not the only reading that could be given to
the prohibition. We agree with Navy that the Tollefson Amendment was
intended to apply to something of a more substantial nature than
inflatable boats. 20/ Furthermore, Navy's view is confirmed by reference
to the legislative history of the Tollefson Amendment. In this regard,
the Tollefson Amendment was designed to prevent the construction
overseas and towing to the United States of the midbody sections of
naval vessels, not inflatable boats. 21/ Further, it is reasonable for
Navy to conclude that naval vessels for the purpose of the Byrnes
Amendment comes from the Tollefson Amendment and did not expand its
scope to naval vessels that did not consist of some rigid hull or
superstructure. 22/ Finally, we think the Navy reasonably can conclude
that when section 7309(a) was initially enacted, Congress intended to
continue the rigid hull superstructure qualification and that such
qualification survived subsequent amendments extending the prohibition
to include more than just naval vessels. 23/ Thus any vessel as defined
by 1 U.S.C. Sec. 3 that has a rigid or fixed hull may reasonably be
considered to fall within the prohibition; inflatable boats may
reasonably be considered to fall outside the prohibition.
MEANING OF SHIPYARD
The Navy also has asked for our advice concerning the meaning of the
term "shipyard" as used in the prohibitions. The Navy explains its
concerns as follows:
"It has been suggested that the term 'shipyard' should be given a
definition such as a facility located on the edge of a body of
water and in which ships are built or repaired. Such a definition
would, if applied to the Byrnes-Tollefson Amendments or 10 U.S.C.
Sec. 7309(a), limit the foreign construction prohibitions to such
defined facilities and would permit foreign construction in any
facility not so defined.
"On the other hand, 'shipyard' could be defined to mean any facility
where 'vessels' (however defined) or 'naval vessels' or major components
of the hull or superstructure are constructed. In other words, the term
'shipyard' could be defined to be the place where the subjects of the
statute are to be built."
Applying the first definition of "shipyard" could, as the Navy points
out, lead to inconsistent results. If, in order to avoid the
legislative restriction, one only had to construct a vessel or a major
component of the hull or superstructure at a facility which does not
normally constructs ships or which is not on or proximately located near
a body of water, then the congressional intent to require contracts for
construction of vessels and major components to be performed in the
United States could easily be avoided.
In our opinion, "shipyard" for purposes of the statutory prohibitions
against foreign shipyard construction is any place where "vessels"
otherwise subject to the statutory prohibition are constructed, and need
not have any specific characteristics of size or location to qualify as
such. This would comport with the normal definition of a shipyard as a
place where ships are built. In determining the meaning of statutory
terms, courts generally assume that Congress intended the common,
ordinary usage to apply unless a contrary indication is present. 24/
Thus, in our opinion, for purposes Tollefson-Byrnes and 10 U.S.C. Sec.
7309(a), "shipyard" is the place where "naval vessels" and "vessels" are
made. Furthermore, the legislative history of the Tollefson-Byrnes
Amendment and 10 U.S.C. Sec. 7309(a) only discuss the foreign shipyard
construction prohibition in a geographic sense, i.e., prohibiting
vessels from being constructed outside the United States or overseas,
rather than in a technical sense, i.e., being limited to a specific type
of facility.
Comptroller General of the United States
FOOTNOTES
1/ For example, we held that section 7309(a) as amended in 1984 applied
to a barge of the Army Corps of Engineers used in civil works functions,
Marine Indus., Ltd., B-225722, May 21, 1987, 87-1 CPD Par. 532, at 2,
request for reconsideration denied, B-225722.2, June 24, 1987, 87-1 CPD
Par. 627. We also stated in dictum that section 7309(a) applied to "all
vessels of all military departments."
2/ The prohibition in 14 U.S.C. Sec. 665, which applies specifically to
the Coast Guard, is identical to that in 10 U.S.C. Sec. 7309(a). Thus,
the analysis contained herein applies equally to 14 U.S.C. Sec. 665.
3/ We do not address matters relating to small business set asides or
various international agreements entered into by the United States since
such matters are generally reviewed on a case-by-case basis by the
appropriate forums.
4/ See e.g., Department of Defense Appropriations Act, 1991, Pub. L.
No. 101-511, 104 Stat. 1866 (1990) (emphasis added).
5/ Support for Navy's assertion that it considered "naval vessel" the
operative term for purposes of the Tollefson-Byrnes Amendment may be
found in testimony presented during consideration of the initial version
of 10 U.S.C. Sec. 7309(a). Vice Admiral Earl B. Fowler, Jr. USN,
Commander of the Naval Sea System Command, submitted a prepared
statement concerning the Tollefson-Byrnes Amendment that pointed out
that "naval vessel" is not defined in the Tollefson-Byrnes Amendment.
See, e.g., Hearings on Military Posture and H.R. 5968, Department of
Defense Authorization for Appropriations for Fiscal Year 1983, before
the House Committee on Armed Services, 97th Cong., 2d Sess., 345 (1982).
6/ 1 U.S.C. Sec. 3 provides that for the purpose of statutory
construction:
"The word 'vessel' includes every description of watercraft or
other artificial contrivance used, or capable of being used, as
means of transportation on water."
7/ Since the Congress did not define the term "vessel" in the SCN
appropriation vis a vis construction, acquisition or repairs differently
from the generally acknowledged one found in 1 U.S.C. Sec. 3, we may
presume that it intended to adopt this commonly used term. McCarthy v.
The Bark Peking, 716 F.2d at 134 (2d Cir. 1983), cert. den., 465 U.S.
1078 (1984), reh. den., 466 U.S. 994.
8/ Statutes should not be construed to render any part of it mere
surplusage or meaningless. Zimmerman v. North American Signet Cir., 904
F.2d 347, 353 (7th Cir. 1983).
9/ The Navy includes on the Naval Vessel Register vessels classified as
"naval vessels" and "service craft," but does not include "boats" as
defined by Navy regulations. (Boats are "water-borne craft which
comprises generally the waterborne craft suitable primarily for
shipboard or similar use." 32 C.F.R. Sec. 700.105(h). See also, 32
C.F.R. Sec. 700.105(f), (g) and (1)). See Application of Foreign
Shipyard Construction Prohibitions to Acquisition of Existing Foreign --
Built Naval Vessels, B-218497, July 23, 1985, holding that a floating
drydock listed as a "service craft" on the Naval Vessel Register, is a
vessel for the purpose of Tollefson-Byrnes and 10 U.S.C. Sec. 7309(a).
In view of the latitude conferred upon the Navy to classify "vessels" to
the Naval Vessel Register, we do not find Navy's subclassifications of
"naval vessels" for purposes of the Register unreasonable.
10/ Subsection (b) has provided since its enactment that:
"(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. The President
shall transmit notice to Congress of any such determination, and
no contract may be made pursuant to the exception authorized until
the end of the 30-day period beginning on the date the notice of
such determination is received by Congress."
11/ Pub. L. No. 97-252, Sec. 1127(a), 96 Stat. 758 (1982).
12/ Pub. L. No. 98-473, Sec. 101(h), 98 Stat. 1941 (1984).
13/ Pub. L. No. 100-180, Sec. 1103, 101 Stat. 1146 (1987).
14/ We made the same observation about the original purpose of 10
U.S.C. Sec. 7309(a) in B-218497, July 23, 1985.
15/ The distinction between "naval vessel" and "vessel" also is
supported by the portion of the 1988 amendment which added subsection
(c) to section 7309, providing as follows:
"(c)(1) A naval vessel (or any other vessel under the jurisdiction
of the Secretary of the Navy) the homeport of which is in the
United States may not be overhauled, repaired, or maintained in a
shipyard outside the United States.
"(2) Paragraph (1) does not apply in the case of voyage repairs."
(Emphasis added.)
16/ A time honored maximum of statutory construction is that Congress
enacts laws in contemplation of already existing law, including 1 U.S.C.
Sec. 3. Furthermore, 10 U.S.C. Sec. 101 removes any doubt as to the
definition's applicability to title 10, United States Code.
17/ The context is important in the quest for the meaning of a word
used in a statute. United States v. Bishop, 412 U.S. 346, 356 (1973),
on remand, 485 F.2d 248 (9th Cir. 1973) cert. den., 417 U.S. 931.
18/ Navy argues that "while the Navy considers that the terms 'hull'
and 'superstructure' further define the term 'vessel' in 10 U.S.C. Sec.
7309(a), the Navy recognizes that the term 'hull' can have various
definitions. One definition would lead to vessels that have a constant
fixed and rigid nature. Another definition -- and that shared by many
naval architects -- would lead to vessels that can have a surfaced part
providing for support in the water, i.e., a contrivance capable of being
used as a means of transportation on water as set forth in 1 U.S.C. Sec.
3. Adopting the latter definition of 'hull' would lead to the
conclusion that the statute uses two different terms -- 'hull' and
'vessels' -- for the same meaning. Therefore, in order to provide a
distinct meaning to the term 'hull' and 'vessel', the statute must be
read, regarding 'hull', in the layman's constant fixed and rigid sense
rather than the naval architect's capable of transportation sense."
19/ We concede that inflatable boats fall within the term "vessel" as
defined by 1 U.S.C. Sec. 3. However, the question remains whether an
inflatable boat is a "vessel" in the context of the language of the
prohibition in section 7309.
20/ Navy's determination (that we previously concluded was reasonable)
that the term "naval vessel" excluded "boats" for purposes of the Naval
Vessel Register is consistent with their conclusion in this regard.
21/ See, e.g., 110 Cong. Rec. 8782 (1982); Hearing before the
Subcommittee of the Senate Appropriations Committee on H.R. 10939, the
Department of Defense Appropriations 1965; Cong., 1st Sess., 779-780
(1964).
22/ One might also contend that the Byrnes Amendment prohibition was
totally independent of the Tollefson Amendment and that less substantial
naval vessels were also contemplated. However, this would be
inconsistent with our previous conclusion that the term "naval vessels"
is reasonably construed to include only vessels on the Naval Vessel
Register which does not include boats.
23/ It has been suggested that the prohibition in the Tollefson-Byrnes
Amendment concerning construction of major components of the hull or
superstructure of "naval vessels" to the extent carried over in 10
U.S.C. Sec. 7309(a) to "vessels" should be construed in pari materia
with a similar prohibition set forth in section 27 of the Merchant
Marine Act of 1920, as amended, 46 U.S.C. App. Sec. 883 (1988).
However, we have previously rejected construing the prohibition in
Tollefson-Byrnes in this manner, 48 Comp. Gen. 709, 715 (1969), and
nothing in the language of 10 U.S.C. 7309(a) warrants modifying our
position. Similarly, regardless of whether an inflatable boat is or is
not a vessel for tariff purposes, Seagull Marine v. United States, 475
F. Supp. 158 (Cust. Ct. 1979) reversed 637 F.2d 1083 (C.C.P.A. 1980),
"vessel" as defined for the customs laws is not controlling for purposes
of the Tollefson-Byrnes Amendment and 10 U.S.C. Sec. 7309(a).
24/ Perrin v. United States, 444 U.S. 37 (1979) and Inner City
Broadcasting Company v. Sanders, 733 F.2d 154 (D.C. Cir. 1984).
FILE: B-218477-2 DATE: October 8, 1985
MATTER OF: Delta Coals, Inc.
DIGEST:.
A protest not filed in the General Accounting Office within 10
working days after the pro- tester was orally advised of the basis
of its protest is untimely and will not be considered on its
merits.
Delta Coals, Inc. protests the rejection of its bid as nonresponsive
by the Defense Logistics Agency under invitation for bids (IFB) No.
DLA6OO-85-B-0020, a solicitation to obtain coal. Delta's bid was
rejected because the agency claims it could not determine from the bid
and other information available from the Deparment of the Army and the
Department of Energy that the coal Delta offered would comply with the
IFB's detailed specif ications with respect to such matters as moisture,
carbon, hydrogen, sulfur and ash content.
We dismiss this protest as untimely under our Bid Protest
Regulations, 4 C.F.R. Sec. 21.2(a) (2) (1985) which require that
protests be filed within 10 working days after the basis for protest is
known or should have been known, whichever is earlier.
We received Delta's protest on August 13. On July 29, Delta was
informed by telephone that its low bid had been rejected as
nonresponsive for failure to meet the specification's minimum ash
specification. In its comments on the agency's report, Delta conceded
that it had been informed by telephone on July 29 that its bid was
nonresponsive but insists that it protested within 10 days after
receiving the letter confirming the rejection that it had requested from
the agency.
Delta is mistaken in its apparent belief that the 10 working-day
period did not begin to run until its receipt of the letter confirming
the oral notice of July 29. On the contrary, an oral notification of
the basis of protest is sufficient to start the 10 working-day period
and a protester may not delay filing its protest until receipt of
written confirmation if such delay would result in its protest being
filed after the 10 working day oral notification. Koenig Mechanical
Contractors, Inc., B-217571, Apr. 4, 1985, 85-1 C.P.D. P 389.
Therefore, as Delta's protest was received on the eleventh working
day after it was notified of the rejec- tion of its bid, it is untimely
and will not be considered on its merits.
Ronald Berger
Deputy Associate
General Counsel
Matter of: GTC Group--Reconsideration Request
File: B-218447.5
Date: July 9, 1986
DIGEST
1. Request by performing contractor for an increase in its contract
price does not warrant reversing prior decision recommending award to
that firm since the request does not change the fact that the contractor
was entitled to award as the low responsive bidder.
2. Questions regarding contractor performance, payment and
termination are matters of contract administration for consideration by
the contracting agency, not the General Accounting Office.
DECISION
GTC Group requests reconsideration of our decision in Energy
Maintenance Corp; Turbine Engine Services Corp., 64 Comp. Gen. 425
(1985), 85-1 C.P.D. P 341, aff'd, Turbine Engine Services--Request for
Reconsideration, B-218447.2, June 25, 1985, 64 Comp. Gen. , 85-1 C.P.D.
P 721. In that decision, we held that the United States Coast Guard
improperly had canceled a solicitation for turbine engine overhauls. We
recommended that the Coast Guard reinstate the solicitation and award a
contract to Energy Maintenance Corp. (EMC), the low responsive bidder,
if the firm was otherwise eligible for the award.
The Coast Guard proceeded with a fixed-price contract award to EMC as
we recommended, and EMC has begun performance. GTC, a bidder on the
original procurement, recently obtained information under the Freedom of
Information Act indicating that EMC has requested increases in its
prices for certain contingency items for the repair of two gas turbine
generators. GTC argues that since EMC received the award based on its
low bid (while GTC was denied an award due to its higher bid price),
EMC's request for a price increase should invalidate the award. We
dismiss the reconsideration request.
Our Office will consider a request for reconsideration of a prior
decision only where the requester presents information supposedly
indicating that the decision was legally erroneous or failed to take
into account all facts presented. Bid Protest Regulations, 4 C.F.R.
Sec. 21.12(a) (1986). We found EMC entitled to the award because it was
the low responsive bidder on the solicitation. GTC's argument negates
neither those facts nor the propriety of our legal conclusion based on
those facts.
GTC's reconsideration request actually raises the new question of
whether EMC's actions under the contract warrant contract termination.
Questions regarding contractor performance, payment and termination 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).
Therefore, there is no basis for us to consider GTC's request.
GTC's reconsideration request is dismissed.
Ronald Berger
Deputy Associate
General Counsel
FILE: B-218323.3, B-218785.2 DATE: July 11, 1986
MATTER OF: Spectrum Leasing Corporation
DIGEST:
1. Contracting officer's reliance on blank Buy American certificate
which obligates bidder to supply domestic source end product is not
objectionable where, prior to award, contracting officer had no reason
to suspect that the products being offered were in fact of foreign
origin.
2. When protests are without merit, no basis exists for recovering
bid preparation costs and the costs of pursuing the protests. Further,
the recovery of lost profits is not permitted under any circumstances.
Spectrum Leasing Corporation (Spectrum) protests the award of
contracts to International Data Products Corporation (IDP) under
invitation for bids (IFB) Nos. DACW38-85B-0022 and DACW38-85-B-0032
issued by the United States Army Corps of Engineers, Vicksburg,
Mississippi. Spectrum contends that IDP offered foreign end products
and that the agency improperly failed to apply the Buy American Act
differential to IDP's bids.
We deny the protests.
The IFB's requested bids for microcomputers and certain hardware and
software accessories, and contained a Buy American certificate in which
bidders certified that, except as otherwise indicated, each end product
offered was a domestic source end product. Foreign end products were to
be listed with the country of origin. The IFB provided that a Buy
American Act differential would be applied to the prices of those items
identified as foreign.
The Buy American Act establishes a preference for products mined,
produced or manufactureed in the United States to offset partially the
competitive advantages that may be enjoyed by foreign competition. See
Dawson Construction Co., Inc., B-214070, Feb. 8, 1984, 84-1 CPD P 160.
This preference is implemented by the addition of a differential to the
price bid for a foreign end product. See Autoclave Engineers, Inc.,
B-217212, Dec. 14, 1984, 84-2 CPD P 668. Applicable regulations provide
that, for evaluation purposes, each bid item offering a foreign end
product is to be adjusted by adding to it a factor of 50 percent,
exclusive of duty, or 6 percent, inclusive of duty, whichever results in
the greater evaluated price. Department of Defense (DOD) Federal
Acquisition Regulation (FAR) Supplement, 48 C.F.R. Sec. 225.105 (S-71)
(1) (1985).
Spectrum was the low bidder and IDP was second low under both
solicitations. In evaluating Spectrum's bids, the Army applied the 50
percent Buy American Act differential to the prices for those items
Spectrum identified as foreign, resulting in evaluated prices greater
than IDP's. The Army then evaluated IDP's bids and found that IDP left
the Buy American certificate in both bids blank, thereby certifying that
the products it offered were domestic end products. As a result, no
upward adjustment was made to IDP's bids and the Army awarded both
contracts to IDP. Because the protests of these procurements initially
were filed more than 10 calendar days after the contract awards, the
agency was not required to stay performance of the contracts pending a
decision on these protests and the contracts have been completely
performed.
The Army learned, after the printers in question were delivered and
distributed, that the printers, as well as some of the other products
supplied, were foreign. The Army subsequently determined that it was
impracticable to require IDP to substitute domestic end products for the
supplied foreign end products and therefore negotiated an equitable
adjustment to the contract with IDP to compensate for the firm's failure
to comply with its domestic end product certification. Under the
contract modification, IDP agreed to provide some additional equipment,
some replacement parts, an extended warranty on all foreign end products
furnished, and a training course on the use and maintenance of the
products provided.
Spectrum argues that under both solicitations IDP offered to supply
dot matrix printers and thimble wheel printers manufactured by Japanese
firms--Canon, Inc., and C. Itoh Electronics, Inc., respectively.
Spectrum contends that the Army should not have accepted IDP's Buy
American certification without inquiry because, due to the agency's
expertise in microcomputers, it should have known that many
microcomputer printers, and these well-known brands in particular, were
manufactured outside of the United States. The protester further
contends that the Army should have been on notice of the possibility
that these products were not domestic in origin, because the technical
literature describing the Canon printer submitted with IDP's bids
included the word "Japan" three times. Spectrum contends that, at the
least, these factors should have provided a basis for investigation into
the origin of these products.
The Army responds that there was no indication in IDP's bids that it
was offering anything other than domestic end products and, by leaving
the Buy American certificates blank, IDP was obligated to furnish
Americanmade end products. The Army states that the technical
literature submitted by IDP did not identify or suggest the place of
manufacture of these products. Specifically, it claims that the Canon
literature only established that the firm has an international sales
office in Japan, while the C. Itoh literature made no reference at all
to Japan. Thus, the Army contends that the contracting officer did not
know, nor should have known, that the products offered by IDP were of
foreign origin, and consequently acted properly by relying on IDP's
certification.
Where, as here, a bidder does not exclude any end products from the
Buy American certification in its bid and does not otherwise indicate
that it is offering foreign end products, the government's acceptance of
the bid results in a contractual obligation to furnish domestic end
products. Law Enforcement Associates, Inc., B-205024, Apr. 5, 1982,
82-1 CPD P 304. The bidder's compliance with that obligation is a
matter of contract administration that has no effect on the validity of
the contract award. See Autoclave Engineers, Inc., B-217212, supra;
Hybrid Technology Group, Inc., B-215168, Oct. 3, 1984, 84-2 CPD P 385.
Although an agency should not automatically rely on the certification
when it has reason to question whether a domestic product will be
furnished, see Designware, Inc., B-221423, Feb. 20, 1986, 86-1 CPD P
181, the contracting officer, before award, had no reason to question
IDP's certification of its products as domestic.
First, the record does not establish that the Army had actual
knowledge that the products were of foreign origin.
Second, there is nothing in the IDP bids or the record which should
have caused the Army to suspect that IDP, contrary to its certification
of its products as domestic, was offering foreign end products.
Although the Canon technical literature submitted with IDP's bids
included the word "Japan" three times, these references only indicated
that Canon's international headquarters are located in Japan and that
the literature was printed in Japan. These references do not suggest
that the product offered was a foreign end product. Moreover, the Canon
literature also included the address of an office located in the United
States. We also note that the C. Itoh technical literature submitted
with IDP's bids indicated that the company's headquarters is based in
Los Angeles, California, and did not indicate that C. Itoh is a Japanese
firm or that the product being offered was produced in Japan. Based on
these circumstances, we conclude that the contracting officer acted
properly by relying on IDP's certification.
Spectrum requests that it be reimbursed its bid preparation costs and
its cost of filing and pursuing its protests, including attorney's fees.
However, since we find the protests to be without merit, we deny the
claim for costs. TSCO, Inc., B-221306, Feb. 26, 1986, 65 Comp. Gen. ,
86-1 CPD P 198. The protester also requests that it be allowed recovery
of profits it lost by not being awarded these contracts. There is,
however, no legal basis for allowing an unsuccessful bidder to recover
anticipated profits. Smoke Busters, B-219458, Nov. 1, 1985, 85-2 CPD P
501.
The protests are denied.
Harry R. Van Cleve
General Counsel
FILE: B-218228.2 DATE: October 7, 1985
MATTER OF: Rice Services, Inc.
DIGEST:.
1. Pursuant to the Federal Acquisition Regulation,- 48 C.F.R.
Sec. 52.214-16 (1984), a bid that offers an acceptance period that
is less than that required in the solicitation must be rejected as
nonresponsive.
2. Bid that: includes two dif ferent acceptance periods, one
inserted by the government and the other by the bidder, is
ambiguous and must be rejected as nonresponsive.
3. Agency cannot request a bidder whose bid it has properly
found nonresponsive due to insertion of a 90-day acceptance
period, rather than the 120-day minimum required by the
solicitation, to extend its bid when, at the end of the 120 days,
other bidders are asked to do so.
Rice Services, Inc. protests the allegedly improper action of
contracting of ficials at Fort Knox, Kentucky, in refusing to allow it
to extend its bid in response to invitation for bids (IFB) No.
DABT23-85-B-0019, covering full food and dining services at Fort Knox.
The Army considered Rice's bid nonresponsive because the firm specified
an acceptance period that was less than the minimum required by the IFB.
We deny the protest.
The Army issued the solicitation on January 17, 1985. Because of
problems encountered in the evaluation of the two lowest bidders, on
March 27 the Army extended the contract of the incumbent, Colbar, Inc.,
for a 6-month period. (Rice protested this allegedly improper extension
to the agency, but appears to have abandoned this basis of protest in
submissions to our Office.)
The IFB contained the standard minimum bid acceptance period clause
set forth in the Federal Acquisition Regulation (FAR), 48 C.F.R. Sec.
52.214-16 (1984). Pursuant to the regulation, the contracting of f icer
had inserted 120 as the number of days that bids must remain open, and
the IFB specifically stated that bids which provided less than this
period would be rejected. Rice's bid, however, contained a typewritten
acceptance period of 90 days. Because the 120-day period was to expire
on June 25, the Army, by letter of June 13, requested all responsive
bidders to extend their bids by an additional 60 days. The Army did not
request Rice to do so because, as noted above, it considered the firm's
bid nonresponsive.
The Minimum Bid Acceptance Period clause, as completed
by Rice with the entry of the number "9O," reads in pertinent part:
"c. The Government requires a minimum acceptance
period of 120 calendar days.
"d. In the space provided immediately below, bidders
may specify a longer acceptance period than the
Government's minimum requirement.
"The bidder allows the following acceptance
period: 90 calendar days.
"e. A bid allowing less than the Government's minimum
acceptance period will be rejected.
"f. The bidder agrees to execute all that it has
undertaken to do, in compliance with its bid, if
that bid is accepted in writing within (1) the
acceptance period stated in paragraph (c) above,
or (2) any longer acceptance period stated in
paragraph (d) above."
Rice argues that in rejecting its bid, the Army relied on decisions
of our Office that were rendered before the effective dates of the FAR
and the Competition in Contracting Act of 1984, amending 10 U.S.C.
Sec.Sec. 2301-2311 (West Supp. 1985). According to Rice, these
decisions address "minimum acceptance clauses quite different from the
present FAR clause which the government drafted in the subjunctive
(i.e.,'either A or B if B is larger') rather than the pre-FAR
disjunctive (i.e., 'either A or B')." Rice contends that the FAR clause,
for inclusion in solicitations issued on or after April 1, 1984, differs
from the pre-FAR clause, which "relied upon a single contractor choice
to accept or reject a minimum number of days."
Rice maintains that under paragraph (d) of the FAR clause, above,
bidders may either accept the 120-day acceptance period or choose a
longer period, and that the shorter period of fered by Rice is therefore
inef fective. Rice attempts to distinguish paragraph (e) by arguing:
"The language of paragraphs (c), (d), and (f) precludes the
assignment of any contractual significance to either the omission
of a number, or the insertion of a number not longer than 120
days, in the blank space provided within paragraph (d). Paragraph
(e) addresses situations in which the bidder limits its acceptance
period by putting the government on notice, in a legally binding
manner, that its bid is open for less than the 120-day minimum.
Paragraph (d) by its very terms does not allow a bidder to limit
its bid acceptance period. To a period shorter than 120 days.
(sic)" (Emphasis in original.)
Rice interprets paragraph (f) of the FAR clause as an express promise
to perform the contract if its bid is accepted within 120 days unless a
longer period is inserted in the space provided.
We find no merit to Rice's argument. Contrary to the firm's
assertion, we have held -- pursuant to the FAR -- that a solicitation
provision that requires a bid to remain available for acceptance by the
government for a prescribed time is a material requirement. See, for
example, Central States Bridge Co. Inc., B-219559, Aug. 9, 1985, 85-2
C.P.D. P 154 (solicitation issued June 12, 1985); Legeay, Inc.,
B-218307, May 22, 1985, 85-1 C.P.D. P 338 (solicitation issued January
29, 1985). A bid that does not comply with such a requirement must be
rejected as nonresponsive. Ames Construction, Inc., B-210578, Feb. 14,
1983, 83-1 C.P.D. 156. To hold otherwise affords the bidder that limits
its acceptance period an unfair advantage, because that bidder can
refuse the award after its bid had expired if, for example,
unanticipated increases in costs occur. On the other hand, bidders that
comply with the required acceptance period are bound by the government's
acceptance any time within that period. Amendola Construction Co.,
Inc., B-214258, Feb. 28, 1984, 84-1 C.P.D. P 255.
Although solicitations issued before April 1, 1984, contained
language pertaining to the minimum bid acceptance period which differs
from that of the FAR, the effect of the clause remains the same. The
pre-FAR clause was contained on the first page of standard form (SF) 33,
"Solicitation, Offer and Award," and stated:.
"... the undersigned agrees, if this offer is accepted within
calendar days (60 calendar days unless a different period is
inserted by the offeror) from the date for receipt of offers
specified above, to furnish any or all items upon which prices are
set opposite each item, delivered at the designated point(s),
within the time specified in the schedule."
In order to require a minimum acceptance period, rather than merely
request one, a pre-FAR solicitation also had to include and
cross-reference a "Special Conditions" clause that stated:
"Bids offering less than days for acceptance by the government
from the date set for opening will be considered non- responsive
and rejected."
See International Medical Industries, Inc., 62 Comp. Gen 31 (1982),
82-2 C.P.D. P 386; Professional Materials Handling Co.,
Inc.,--Reconsideration, 61 Comp. Gen. 423 (1982), 82-1 C.P.D. P 501.
In this case, the Army's solicitation, by its terms, requires a
minimum acceptance period of 120 days; it does not merely request that
period. Moreover, the solicitation specifically provides that a bid
allowing less than the minimum acceptance period will be rejected.
Paragraph (d) of the FAR clause plainly would have allowed Rice to
specify an acceptance period longer than 120 days; in our opinion,
however, when read with paragraph (e), it does not permit Rice to
specify a shorter acceptance period and remain responsive.
Although Rice correctly points out that paragraph (f)
indicates that the bidder "agrees to execute all that it has undertaken
to do in compliance with its bid," Rice did not undertake in its bid to
provide a 120-day acceptance period. At best, Rice's bid was ambiguous
as to whether it remained open for 90 or 120 days, and the Army
therefore was required to reject it as nonresponsive. See Southwest
Boat Corp., Sept. 10, 1984, 84-2 C.P.D. P 276; Union Metal
Manufacturing Co., Electroline Division, Nov. 2, 1982, 82-2 C.P.D. P
402.
We conclude that that the Army could not properly have asked Rice to
extend its bid, and we deny the protest.
Harry R. Van Cleve
General Counsel
B-217947, B-226384
March 27, 1987
DIGEST
Relief is granted Army disbursing officials and their deputies under
31 U.S.C. Sec. 3527(c) from liability for three improper payments
resulting from payee's negotiation of both original and substitute
military checks. Proper procedures were followed in the issuance of the
substitute check, there was no indication of bad faith on the part of
the disbursing officials and their deputies and subsequent collection
attempts are being pursued. However, we think that the Army should
develop guidelines for handling multiple requests by the same payee for
substitute payments. In addition, for cases involving notices of losses
received after June 1, 1986, we will deny relief if Army delays more
than 3 months in forwarding the debt to Army's 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 February 13 and March 4, 1987, that
we relieve Lieutenant Colonels (LTC) W.C. Bieneman and W.A. Mullen,
Finance Corps, DSSN 5009, Finance and Accounting Officers, U.S. Army
Training Center and Fort Dix, Fort Dix, New Jersey, and their deputies
Ms. J.A. Woodard and First Lieutenant K.A. Larsen, under 31 U.S.C. Sec.
3527 (c), for three improper payments totaling $1,078.33 payable to Mr.
Robert L. Robinson. For the reasons stated below, relief is granted.
The losses in these cases resulted when the same payee negotiated
both the original and a substitute check on three separate occasions. 1/
In each case, both checks were in the same amount. The substitute
checks were issued on the basis of the payee's allegations that the
original checks had not been received and requests for stop payment had
been made. All of the checks were issued by the Army under authority
delegated by the Department of the Treasury. 31 C.F.R. Sec. 245.8.
It appears that the request for stop payment and the issuance of the
substitute checks in these cases were within the bounds of due care as
established by Army Regulations. See AR 37-103, paras. 4-161, 4-162
and 4-164. There was no indication of bad faith on the part of the
disbursing officers or their deputies and it appears that adequate
collection efforts are now being made. Accordingly, we grant relief.
Although we have granted relief to the disbursing officers and their
deputies, we are nevertheless concerned that four substitute checks were
issued to the same payee within a 1-year period. The third and fourth
checks were issued without verifying the status of the previously issued
checks. It also appears that Mr. Robinson was not counseled to have his
pay deposited directly into a financial institution where its receipt
could be verified.
We recognize that there are no Army regulations requiring that
finance officers delay issuing a substitute check to a payee who had, in
the past, claimed nonreceipt, or that require finance officers to verify
the status of previously issued checks. Nor do Army regulations require
that the finance officer counsel payees to have their pay deposited in a
financial institution. However, as we stated in B-220500, September 12,
1986 and again in B-228017, January 14, 1987, we think that Army should
develop guidelines for multiple requests by the same payee for
substitute payments. The context of such guidance would, of course, be
up to the Army to determine. However, as we previously stated, we
believe that after the payee has made the second request for stop
payment within a 6-month period, he or she should be counseled to have
checks sent directly to a financial institution. This way the Army can
ascertain if the original checks are being received. In addition, we
think that after a substitute check has been issued on two previous
occasions, steps should be taken immediately to verify the status of the
prior issued checks before issuing another one. We understand that
about 30 days after a stop payment request is made, a finance officer
can call the Department of the Treasury's Division of Check Claims and
find out if the check has been negotiated. Information from Treasury
that both original and substitute checks have been cashed on either of
the two previous occasions would provide a basis for refusing to issue
future substitute checks. It would also allow collection of the
overpayments while the payee is still employed. Id.
We also note that the first debit voucher from Treasury involving Mr.
Robinson was received in August 1984. The finance officer did not
verify the status of the other checks issued to Mr. Robinson at that
time. Although the losses had already occurred, had the finance officer
checked with Treasury he would have been able to institute collection
action on all of the checks at this point.
Again, as in B-220500, September 12, 1986, we ask that your relief
requests include information on whether the payee has at any time
received a substitute check and if so what the status of the checks are.
Your first request involving an overpayment made to Mr. Robinson was on
April 2, 1985 (relief granted, B-217947, April 16, 1985). At that time,
the finance office had already received a debit voucher on another
overpayment to Mr. Robinson. However, your submission did not mention
this or that Mr. Robinson had on four separate occasions received
substitute checks. The other two submissions, also involving Mr.
Robinson, did not cross-reference all four substitute checks.
Finally, we are also concerned with the collection action taken
following these three overpayments. Once the debit vouchers were
received from Treasury it was almost 17 months in one instance, over 18
months in another, and 28 months in the third case, before the losses
were referred to your collection division. As we previously indicated
to you, 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 Army delays more than 3 months in forwarding the debt to
your collection division. However, since the debit vouchers involved in
these cases were received prior to that date, we will not deny relief
here.
Sincerely yours,
(Mrs.) Rollee H. Efros
Associate General Counsel
FOOTNOTE
1/ We have previously granted relief to LTC Mullen for an improper
payment made to Mr. Robinson involving another duplicate payment.
B-217947, April 16, 1985.
Matter of: Agnes T. Crouch - Reclassification - Claim for Backpay
File: B-217885
Date: September 25, 1987
DIGEST
A former employee of the Department of the Army is not entitled to
backpay on the basis that she held a position that was reclassified from
grade GS-12 to grade GS-13. The evidence furnished by the Army
indicates that the position was in fact occupied by another employee.
The burden of proof is upon the employee to establish the liability of
the government and her right to payment, and she has not met that
burden.
DECISION
Ms. Agnes T. Crouch, a former employee of the Department of the Army,
has appealed the determination by our Claims Group in its settlement
Z-2863016, Decembet 4, 1986, which denied her claim for backpay. For
the reasons that follow, we uphold our Claims Group's determination.
BACKGROUND
Ms. Crouch was employed as a Personnel Staffing Specialist,
GS-212-12, from November 1974 to November 1978, by the Department of the
Army, Civilian Career Management Field Agency. Ms. Crouch alleges that
from May 1976 to July 1978 she occupied a position classified as a
GS-201-13, Automatic Data Processing (ADP) Career Program Administrator.
Thus, she claims she is entitled to backpay on the basis of our
decision in 53 Comp. Gen. 216 (1973). We held in that decision that
when an agency reclassifies a position to a higher grade, it must within
a reasonable time after the date of the final position classification
either promote the incumbent, if he or she is otherwise qualified, or
else remove him or her. See also 5 C.F.R. Sec. 511.701(b) (1986).
Ms. Crouch has furnished as evidence of her claim a Group Action
Request List prepared by the Army which indicates that she is the
proposed incumbent of a grade GS-13 Personnel Management Specialist
position. The Request List is signed by an approving official with an
effective date of May 19, 1976. In addition, Ms. Crouch has furnished
numerous documents which she signed utilizing the title of ADP Career
Program Administrator and which she states indicates that she held this
grade GS-13 position.
The Army has refuted Ms. Crouch's claim by presenting evidence that
another employee, not Ms. Crouch, occupied the position in question
during the period of her claim. In view of the conflicting evidence,
our Claims Group denied Ms. Crouch's claim since it is our practice to
accept the agency's statement of the facts where the written record
before us presents an irreconcilable dispute of fact between an agency
and an individual claimant.
OPINION
This Office settles claims on the basis of the written record, and
the burden of proof is on the claimant to establish the liability of the
United States and his or her right to payment. Jones and Short et al.,
B-205282, June 15, 1982; 4 C.F.R. Sec. 31.7 (1986). We have also held
that where there is a dispute between an employee and the agency and
where the employee's evidence is of insufficient probative value to
permit payment, we must deny the claim and leave the claimant to his or
her remedy in the courts. Jimmie D. Brewer, B-205452, March 15, 1982,
affirmed on reconsideration, June 14, 1982.
We do not believe that Ms. Crouch has established the liability of
the United States and her right to payment on the basis of the evidence
she has furnished. The Army points out that there was indeed a
reclassification of the position held by Ms. Crouch based on a Request
List dated May 19, 1976, and approved by Mr. John Polaschik, Chief of
the Civilian Career Management Field Agency. However, the Request List
contains the notation "MPR Change Only," which stands for "Master
Position Record" and denotes only an intent to make an organizational
record change. The Army states that it never intended to promote Ms.
Crouch to this position, and that another employee, Ms. Logene H. Soucy
(Boardman), was appointed to this position of Personnel Management
Specialist, GS-201-13, on June 27, 1976.
The Army has furnished numerous documents in support of its
contention that Ms. Soucy held the position, including a letter from Mr.
Polaschik which clearly states that Ms. Soucy was assigned as the ADP
Career Program Administrator in June 1976. Mr. Polaschik further states
that Ms. Crouch may have signed routine documents such as she has
submitted to our Office as evidence but that Ms. Soucy assumed full
responsibility for the ADP program. This is corroborated by Mr. A. L.
Papenfus, who was the Deputy Chief of the Civilian Career Management
Field Agency at that time, and by Ms. JoAnna M. Bryan, a Civilian
Personnel Administrator who was in the same unit (Team III) as Ms.
Crouch. Ms. Bryan states that:
"Ms. Crouch was assigned as a GS-212-12 and assisted Jean Souci
Boardman in administration of the ADP Career Program from 27 June
1976 until Ms. Boardman accepted another assignment. Prior to
June 1976, the administrator duties were performed by the team
leader or one of the GS-13s. Ms. Boardman was replaced by Ms.
Betty Cimino as the Career Program Administrator for the ADP
program."
It is also important to point out here that Ms. Crouch's performance
ratings for January and November 1977 are part of the record, and both
indicate that her position was that of Personnel Staffing Specialist
GS-212-12. The ratings were signed by Mr. Polaschik and Mr. Papenfus as
reviewing officials. Thus, these two supervisors were obviously aware
of Ms. Crouch's duties.
The record also contains a Standard Form 50 with an effective date of
June 27, 1976, reassigning Ms. Soucy to the GS-201-13 position at the
same location code as the one shown on Ms. Crouch's Standard Form 50,
effective November 17, 1974. The record does not contain any additional
Form 50s for Ms. Crouch until 1978, at which time a new location code
appears. There are also numerous other memorandums, letters of
commendation, etc., during the same timeframe on behalf of Ms. Soucy
which refer to Ms. Soucy as the ADP Career Program Administrator,
Operations Branch Team III.
Based on the foregoing, we conclude that Ms. Crouch has not met her
burden of proof and has not established her right to payment since the
Army has produced substantial contrary evidence rebutting her
contention. Accordingly, her claim for backpay is denied, and our
Claims Group's settlement of December 4, 1986, is hereby sustained.
Comptroller General
of the United States
File: B-217790.2; B-221716.2; B-233540
Date: February 23, 1989
DIGESTS
1. General Accounting Office does not support a proposal in Federal
Acquisition Regulation (FAR) case No. 88-33 to delete paragraph (h) from
FAR section 31.205-1, the cost principle on public relations and
advertising costs, because that provision serves to prevent the recovery
of unallowable costs.
2. General Accounting Office supports a proposal in Federal Acquisition
Regulation (FAR) case No. 88-54 to revise FAR section 31.205-33, the
cost principle on professional and consultant services costs.
3. General Accounting Office has no comment on Federal Acquisition
Regulation (FAR) case No. 88-49, a proposal to add provisions on the use
of master solicitations at FAR sections 14. 203-3 and 15.408(d).
Margaret A. Willis
FAR Secretariat
General Services Administration
Dear Ms. Willis:
This responds to your letter of October 28, 1988, requesting our
comments on three proposed changes to the Federal Acquisition Regulation
(FAR). These are FAR case Nos. 88-33, 88-54, and 88-49.
FAR case No. 88-33 is a proposal to revise the cost principle on public
relations and advertising costs by deleting paragraph (h) of FAR section
31.205-1. Paragraph (h) now provides that costs made specifically
unallowable under section 31.205-1 are not made allowable under any of
the other cost principles, for example those dealing with employee
morale (FAR section 31.205-13) or recruitment costs (FAR section
31.205-22). Conversely, costs that are specifically unallowable under
other cost principles are not allowable under section 31.205-1.
The stated reason for deleting paragraph (h) is that it is thought to
be inconsistent with the recent revision of FAR section 31.204(c), which
provides guidance on the allowability of costs to which more than one
cost principle may be relevant. FAR section 31.204(c) provides that in
such circumstances the cost is to be apportioned among the relevant cost
principles. If the cost cannot be apportioned, the cost principle that
"most specifically deals with, or best captures the essential nature of,
the cost" applies.
We would not support deleting paragraph (h) from FAR section 31.205-1.
In our comments on a prior revision of this cost principle (copy
enclosed), we said that we were particularly in favor of that provision
because it would serve to prevent unallowable public relations costs
from being recovered under other cost principles. We continue to
believe that paragraph (h) serves that purpose.
Moreover, we believe the recent revision of FAR section 31.204(c) does
not provide the proper guidance for determining allowability in
situations where more than one cost principle may be relevant. Our
specific concern is that the reference to apportionment suggests that
where the allowability of a particular item is open to question, the
issue may be resolved by allowing part of the item and disallowing the
remainder. In our view, such compromises ought not to be encouraged.
Rather, given the intent of Congress to eliminate unallowable costs
being charged to defense contracts, see 10 U.S.C. Sec. 2324 (Supp. IV
1986), we think that contracting officers should be required to make
determinations that particular costs are either allowable or
unallowable.
FAR case No. 88-54 is a proposal to revise FAR section 31.205-33, the
cost principle on professional and consultant services costs. The
revision would provide examples of costs covered by the cost principle,
specify a number of circumstances under which the costs of professional
and consultant services would be expressly unallowable, and describe
what may be submitted as evidence of the nature and scope of services
provided. We support this proposed revision.
FAR case No. 88-49 is a proposal to add provisions on the use of master
solicitations at FAR sections 14.203-3 and 15.408(d). Master
solicitations are documents containing essential contract provisions for
the procurement of supplies or services that are bought repetitively.
We have no comment on the proposed change.
Sincerely yours,
James F. Hinchman, General Counsel
Enclosure
Matter of: Panama Canal Commission--Catastrophic Insurance Coverage
File: B-217769
Date: July 6, 1987
DECISION
Notwithstanding authorization in section 1419 of Panama Canal Act to
purchase insurance coverage against catastrophic marine accidents,
purchase by Panama Canal Commission of broader "full scope" coverage
would not be illegal since government's general policy of self-insurance
does not apply to Commission. Commission may therefore purchase
insurance based upon an administrative determination of necessity.
DECISION
The Acting Administrator of the Panama Canal Commission (Commission
or PCC) requested our decision on the extent of catastrophic insurance
coverage the Commission may purchase. A letter subsequently received
from the Commission's Office of General Counsel indicates that the
Commission has issued a solicitation for brokerage services for the
procurement of catastrophic insurance. The solicitation asks offerors
to submit two proposals:
"one that contemplates full scope catastrophic coverage, and
another that reflects a limited, conservative interpretation of
the Commission's "marine accident" insurance authorizing
legislation." 1/
The contract award will be for one proposal or the other. The
Commission seeks this opinion for guidance in the selection process.
As the submission notes, in 1985 the Congress added a new provision
to the Panama Canal Act of 1979, section 1419 (codified at 22 U.S.C.
Sec. 3779) which reads as follows:
"The Commission is authorized to purchase insurance to protect
the Commission against major and unpredictable revenue losses or
expenses arising from catastrophic marine accidents." 2/
In ordinary usage, the term "marine" in the present context means
"relating or pertaining to the sea." See, e.g., Black's Law Dictionary.
The term "marine accidents" is defined neither in the statute nor the
legislative history. We must assume therefore that the ordinary meaning
was intended. Thus, the issue here is whether section 1419 is the sole
source of the Commission's legal authority to purchase insurance, in
which event the plain terms of the statute render the full scope
proposal impermissible.
There is a long-standing rule that agencies should not use
appropriated funds to buy insurance without express statutory authority.
E.g., 13 Comp. Gen. Dec. 779 (1907); 19 Comp. Gen. 211 (1939);
B-158766, February 3, 1977. The rationale for the rule is that because
of the government's vast resources, it is generally more economical for
it to be a self-insurer than for it to purchase insurance commercially.
However, as the submission notes, we have previously concluded that the
self-insurance rationale does not apply to the Commission. This is
because the Commission, unlike most agencies, operates on a
self-sustaining basis with its operating funds being derived solely from
outside revenues. The government's resources are not intended to be
available to the Commission. Thus, based on the Commission's funding
arrangement, the rule does not apply to it.
The Commission argues that since the self-insurance rule does not
apply, "the agency is free to obtain the insurance coverage that it
deems necessary and prudent." This is simply an application of the
general principle that, unless otherwise prohibited by law, an agency
may incur an expense which in its discretion it determines to be
reasonably necessary or proper or incident to the accomplishment of its
authorized purpose. The Commission is correct -- unless section 1419
was intended to operate as a limitation on the Commission's authority.
As early as 1982, the Commission was considering the possibility of
purchasing commercial insurance, and there was some opinion at that time
that statutory authority would be necessary. 3/ We have traced the
legislative history of section 1419 in detail. While the term "marine
accidents" appears consistently, this is entirely logical in that marine
accidents constitute the greatest potential for liability based on the
Commission's day-to-day operations. Nowhere did we find any mention of
the Commission's full scope proposal, nor any other indication that the
term "marine accidents" was viewed or intended as a limitation. Rather,
it appears that section 1419 was intended to do no more than provide
authority which was at that time thought necessary. 4/
Accordingly, since the self-insurance rule does not apply to the
Commission, and since we have found no indication that section 1419 was
intended as a limitation, we conclude that the Commission's funds are
legally available to procure the full scope insurance coverage based
upon the Commission's administrative determination of necessity.
Comptroller General
of the United States
FOOTNOTES
1/ "Full scope" coverage would include, in addition to marine
accidents, such things as industrial accidents, civil or labor
disorders, and acts of terrorism.
2/ Pub. L. No. 99-209, section 6(a), 99 Stat. 1718 (Dec. 23, 1985).
3/ E.g., Memorandum of Board Meeting No. 82-2, February 25, 1982,
reprinted in Panama Canal Claims: Hearing Before a Subcomm. of the
House Comm. on Merchant Marine and Fisheries, 98th Cong., 1st Sess.
316-18 (1984). At that time, we had not yet been asked to consider the
question, and had thus not yet had the opportunity to express our view
that the Commission was free to purchase insurance without specific
statutory authority.
4/ E.g., 131 Cong. Rec. H5980 (daily ed. July 22, 1985) (statement of
Rep. Tauzin).
File: B-217666.2
Date: April 7, 1992
Matter of: Anders E. Flodin
DIGEST
1. A transferred employee who rented temporary quarters on a monthly
basis should have the total monthly rent prorated to include all days
which are counted as part of the temporary quarters period, including
days away on personal business since they are part of the consecutive
days of occupancy under 41 C.F.R. Sec. 302-5.2(a) (1991). The days that
the employee performed temporary duty away from his new duty station
interrupted the temporary quarters period and are not to be counted for
purposes of computing daily lodging cost.
2. A courier fee paid to the closing attorney in connection with a
real estate transaction may not be reimbursed unless the courier service
was required by the lender. However, copying costs paid to the closing
attorney may be reimbursed if those costs were related to recording the
property transfer and are customarily paid by the purchaser in the
locality.
DECISION
This decision responds to a request from the Internal Revenue
Service, Department of the Treasury, /1/ concerning the entitlement of
Mr. Anders E. Flodin to be reimbursed additional temporary quarters
subsistence expenses and several real estate transaction expenses which
were disallowed by the agency.
Mr. Flodin was transferred from New Orleans, Louisiana, to Arlington,
Virginia, and reported for duty on May 31, 1990. He performed
unaccompanied travel and began his initial 60 days of temporary quarters
occupancy on that date. Subsequently, he was authorized an additional
60-day period of temporary quarters. The total period of temporary
quarters occupancy was from May 31 through October 7, 1990. During that
period he was on official business away from his new permanent duty
station for 10 days (June 27-29; July 19; and September 1-6). He was
also away on personal business a total of 7 days (June 30-July 3, and
October 5-7). In addition to the cost of lodging and incidental
expenses, he claimed furniture rental for his leased apartment on a
monthly basis beginning June 1, 1990.
The question raised involves the proper method of calculating the
daily cost of lodging and furniture rental for periods of temporary
quarters occupancy when the employee is away from his new station. The
agency takes the position that all days, other than days an employee is
away from temporary quarters on official business, are to be included in
that calculation. Mr. Flodin argues that the only fair way to calculate
the daily rate is to divide the monthly costs by the number of nights a
person actually stayed in those quarters. Thus, in addition to days
away for official business, he would also exclude days away for personal
reasons.
Under the provision of section 302-5.2(a) of the Federal Travel
Regulation (FTR), /2/ once temporary quarters occupancy is begun it
shall be for consecutive days. Absences from temporary quarters for
vacation or other personal reasons do not qualify as an interruption of
the consecutive days requirement so as to permit an extension of the
temporary quarters occupancy period. Thus, those days are to be
included as part of the temporary quarters period for all purposes.
In decision Robert E. Ackerman, B-223102, Sept. 25, 1987, we held
that the daily cost of temporary quarters which are rented monthly
should be prorated over the days of the month for which subsistence
expenses are payable. Any days during that period the employee was away
from those quarters performing temporary duty are to be excluded from
that calculation.
Since the temporary quarters period continues to run when an employee
is away for personal reasons, we believe those days must be counted for
proration purposes. Applying the calculation principle in Ackerman,
supra, to Mr. Flodin's case, his monthly lodging cost during the first
30 days began on May 31, 1990, and extended through June 29, 1990.
However, since the last 3 days of that period were days of temporary
duty away from those quarters and are to be excluded, the daily rate
should be obtained by dividing the monthly lodging costs by the 27 days
of temporary quarters occupancy during that period.
The second 30-day period began on June 30, 1990, and extended through
July 29. During that period Mr. Flodin was away on personal business
from June 30 until the evening of July 4, and on temporary duty travel
on July 19. Therefore, for the purpose of establishing daily lodging
cost, the only day to be excluded would be July 19. The days Mr. Flodin
was away for personal reasons are to be included. Thus, the daily
lodging rate during that period would be the monthly cost divided by 29
days of temporary quarters occupancy. The remaining periods of
temporary quarters occupancy should be similarly calculated.
The same computation method should be used to establish the daily
rate for the furniture rented by Mr. Flodin. However, the monthly
furniture rental began on June 1, 1990, 1 day after he began temporary
quarters occupancy. Therefore, the daily rate for furniture rental
should be separately computed and then combined with other lodging
expenses to obtain a total daily lodging cost.
The disallowed real estate expense items are a courier fee ($60) and
copying costs ($39.50) paid by the employee to the closing attorney. In
decision James A. Schampers, 69 Comp. Gen. 573 (1990), we held that a
courier fee may not be reimbursed unless that service was required by
the lender. Accordingly, if courier service was merely used as a matter
of convenience by the parties concerned, the costs may not be
reimbursed. Mr. Flodin has the burden of proving that the service was
required by the lender.
The agency submission states that the copying costs were paid to the
closing attorney as a "pass through from Fairfax County, VA for costs
associated with recording the property." Under FTR Sec. 302-6.2(c) the
cost of preparing conveyances and other instruments and related
recording fees are reimbursable if customarily paid by the purchaser of
a residence at the new station. Thus, if the copying costs were related
to recording the property transfer and such costs are customarily paid
by the purchaser in Fairfax County, Virginia, they may be reimbursed.
James F. Hinchman,
General Counsel
FOOTNOTES
/1/ Mr. Steve Goldberg, Chief, Office of Travel Management and
Regulations.
/2/ 41 C.F.R. Sec. 302-5.2 (a) (1991).
B-217660
September 8, 1987
The Honorable Lee H. Hamiiton
Chairman, Subcommittee on Europe
and the Middle East
Committee on Foreign Affairs
House of Representatives
Dear Mr. Chairman:
You have requested our legal opinion on the use of Economic Support
Fund (ESF) monies by the Egyptian Government to pay its Foreign Military
Sales (FMS) debt owed the United States. As explained below, we
conclude that the use of ESF monies to pay Egypt's FMS debt was
improper.
BACKGROUND
Foreign Military Sales
The United States in recent years has financed a number of "credit
sales" of military equipment to foreign countries, including Egypt,
under the FMS program, authorized by section 23 of the Arms Export
Control Act, 22 U.S.C. Sec. 2763 (1982). Section 23 provides that the
President is authorized to "finance the procurement of defense articles
. . . by friendly foreign countries." Historically, this financing has
taken the form of either direct U.S. Government loans or federally
guaranteed Federal Financing Bank (FFB) loans.
Economic Support Fund
Section 531 of the Foreign Assistance Act of 1961, as amended, 22
U.S.C. Sec. 2346 (Supp. III 1985), authorizes the provision of "economic
support" to foreign countries "in order to promote economic and
political stability." For that purpose, the Congress annually
appropriates for the Agency for International Development (AID) monies
to make ESF grants. See, e.g., Foreign Assistance and Related Programs
Appropriations Act, 1987, as enacted by Pub. L. No. 99-591, 100 Stat.
3341, 3341-220 (1986). ESF grants are provided either in the form of
project assistance (e.g., the supplying of equipment, services, etc.),
commodity import financing, or, as in the instant case, the transfer of
cash to the grantee's designated bank account.
Subsection (e) of section 531 provides:
"Amounts appropriated to carry out this part shall be available
for economic programs only and may not be used for military or
paramilitary purposes."
22 U.S.C. Sec. 2346(e) (Supp. III 1985).
Prior to 1987, it usually was difficult to determine the actual use
to which ESF cash transfer funds were put, because there was no
practical way for AID to track the funds in question once they were
disbursed to the recipient government and commingled with that
government's own funds. The fiscal year 1987 Foreign Assistance
appropriation act, Pub. L. No. 99-591, 100 Stat. 3341 (1986), however,
included in the ESF appropriation a requirement that after February 1,
1987, countries receiving cash transfer assistance in excess of $5
million maintain those funds in a separate account. Pub. L. No. 99-591,
100 Stat. 3341, 3341221 -3341-222 (1986). This provision is intended to
permit better monitoring by AID of the ultimate end-use of cash transfer
assistance. In the case at hand, AID was able to determine that ESF
funds disbursed to Egypt were used to service Egypt's FMS debt.
FACTS
On March 9, 1987, AID electronically disbursed $115 million in ESF
grant funds to Egypt's Citibank account in Cairo. The account was
established by the Central Bank of Egypt specifically to maintain ESF
cash transfers in a segregated account, as required by the 1987
appropriation act, discussed above.
However, it appears that Egypt later withdrew the entire sum and
deposited it in a commingled account from which the funds were spent.
When Egypt was unable to account for the specific purposes for which the
funds were spent, as required by the statute and the grant agreement,
AID required Egypt to deposit an equivalent amount of funds back into
the separate account and to re-spend them, this time accounting for
their use. As of June 17, 1987, Egypt had redeposited $85 million to
the separate account. Documentation on its disbursements which Egypt
provided to AID to date shows that $51.8 million of the redeposited
funds was used to service Egypt's FMS debt to the United States.
The ESF grant agreement with Egypt included the following special
covenant:
"Section 4.1 No Use for Military Purposes. The parties agree
that the grant proceeds will not be used for financing military or
paramilitary requirements of any kind, including the procurement
of commodities or services for such purpose."
Notwithstanding this covenant and the similar prohibition of
subsection 531(e) of the Foreign Assistance Act, an AID "Program
Assistance Approval Document" dated March 1987, provided that grant
proceeds could be used for, among other purposes, servicing "FMS debt
which, by correspondence between USAID/LEG legal and AID/GC general
counsel , has been determined not to constitute use of AID funds for
military purposes." An AID "Program Implementation Letter," dated March
8, 1987, advised that "use of proceeds to service debt to the U.S.
Government, arising from transactions under our Foreign Military Sales
Act, would not be considered "military or paramilitary use"."
ANALYSIS
It is clear from the documents described above that ESF funds are
being used by the Egyptian Government to pay its FMS debt with AID's
concurrence.
In a November 9, 1986 letter from Kevin F. O'Donnell, AID Senior
Legal Adviser in Cairo to Herbert E. Morris, AID Assistant General
Counsel, it is stated that the enactment in the FY 1987 Foreign
Assistance Appropriation Act, id., requiring separate accounts for all
ESF cash transfer funds in excess of $5 million provided after February
1, 1987 requires that the question of using ESF funds to service FMS
debt must be addressed. Mr. O'Donnell's letter (included in AID's
report to the GAO), states:
"For now, I want to be sure we do not have a potential problem
with the new requirement under the F.Y. 87 legislation that
countries receiving CT -cash transfer- assistance... maintain such
funds in a separate account. In Egypt, all previous CT assistance
has simply been deposited in the Government of Egypt's general
bank account in New York with the funds commingled with other
revenues and the expenditures untraceable in any direct sense . .
. .
"A possibly more serious concern, however, would be traceable
use by the GOE of CT assistance to service its existing Foreign
Military Sales debt to the USG -U.S. Government- . . . .
"It is our expectation that some significant percentage of
upcoming CT assistance from AID will in fact be used to service
this FMS debt. Given the legislative requirement for the
segregated CT account, such GOE use of the proceeds will be
highlighted and the question should therefore be addressed, well
in advance of next February, whether such use would somehow
constitute "military assistance" in violation of the AID
legislation."
Mr. O'Donnell also pointed out that the long-standing AID "negative
covenant," routinely included in all ESF cash transfer grants (that the
proceeds will not be used for financing military requirements of any
kind), which previously was an academic question since actual CT
expenditures were untraceable, will now have to be changed.
AID's current legal position was outlined for us by its General
Counsel, Howard M. Fry, in a letter dated May 5, 1987, and is summarized
below. Mr. Fry stated that he endorsed Mr. O'Donnell's view that the
servicing of FMS loans was not a violation of statute or covenant, and
added these points:
1. Any "military purpose" to which the ESF cash transfer funds
may be put was exhausted years ago when Egypt purchased the
military equipment which gave rise to the FMS debt. Whether the
FMS loan is serviced or not, the military establishment can keep
the equipment and has nothing more to gain.
2. At the time Egypt purchased the military equipment with FMS
credits, it had no reasonable expectation of receiving cash
transfers years later when the FMS debt became due. Therefore,
there is no reasonable linkage between the earlier military
purchase transaction and the subsequent unforeseen availability of
cash transfer assistance.
3. The nature of cash transfer assistance is macroeconomic.
Foreign assistance purposes are achieved by providing "developing
countries" with the foreign exchange needed to meet their
international obligations, including debt payments.
4. Section 531 of the FY 1987 foreign assistance appropriation
act provides in pertinent part:
"The Congress declares that it is the policy and the intention
of the United States that the funds provided in annual
appropriations for the Economic Support Fund which are allocated
to Israel shall not be less than the annual debt repayment
(interest and principal) from Israel to the United States
Government." (Emphasis added.)
There is very little legislative history to help us determine what
constitutes a "military purpose." Over the years, however, it appears to
have been taken for granted that use of ESF funds for military purchases
directly or indirectly by paying off loans received to make such
purchases, were equally forbidden under section 531 of the Act. We
found no further reference to that provision in congressional reports.
However, AID took steps to implement the prohibition soon after
enactment by placing what it termed a "negative covenant" on every ESF
grant instrument. Unlike the more general language of the statute, the
covenant (discussed earlier) prohibited the financing of military or
paramilitary requirements of any kind.
At least as late as 1984, it continued to be AID's position that ESF
funds could not be used to pay FMS debt. In 1984, AID officials
appeared before your subcommittee 1/ hearings on foreign assistance
legislation for fiscal year 1985 to answer questions about a newspaper
article which discussed a confidential State Department cable describing
a meeting in early January 1984 between M. Peter McPherson, AID
Administrator, and Maustafa El Said, Egyptian Minister of Economy and
Foreign Trade. According to the article, Mr. McPherson asked the
Egyptian minister if $103 million would be enough to enable Egypt to
meet its current FMS debt servicing obligations. The AID witnesses
agreed that the quotation from the confidential cable was accurate but
suggested that its import must have been misunderstood. Ms. W.
Antoinette Ford, Assistant Administrator, Bureau for Near East, Agency
for International Development, stated:
"I do not in any way believe that the Administrator said or
thought that a $103 million cash transfer could be used for FMS
debt. It is illegal; he would not do that. That has never been
a concept or the construct of any discussions on the cash
transfer, and I have been a party to those." Hearings, id. at p.
149.
Similar statements were made by Bradshaw Langmaid, Jr., Deputy
Assistant Administrator, Bureau for the Near East, and by Administrator
McPherson himself, who wrote to you on March 5, 1984 to deny the charges
made in the newspaper article. Mr. McPherson said:
"I did not state or imply, directly or indirectly, that U.S.
economic assistance could be used to pay Egypt's FMS indebtedness.
Moreover, the Government of Egypt understands there can be no
linkage between the two."
As indicated earlier, AID's position has changed. Our problem is to
determine in the absence of specific congressional guidance, whether the
use of ESF funds to pay a preexisting FMS debt is consistent with the
statutory prohibition.
We recognize that there very well may be strong policy arguments in
favor of allowing such use. For example, it would ensure that payments
are made on this debt and ESF dollars are spent in the United States.
We also recognize that Program Assistance Documents assure Egypt that
ESF funds could be used to repay FMS debt. Our difficulty in accepting
the AID position is that the debt Egypt is using ESF funds to pay is a
debt to the United States incurred specifically to finance the purchase
of military equipment. In other words, the military equipment was both
provided and financed by the United States Government. In our view,
that results in too close a nexus between the purchase of the military
equipment and the ESF disbursement to be consistent with the statutory
language. There is little distinction between a cash purchase of new
military equipment and payment of a vendor-financed purchase-money debt
for the same kind of equipment. We do not think the Congress intended
that the United States both provide military equipment through the FMS
program and ultimately finance that purchase with ESF funds.
Finally, we do not agree that the "special provision" in section 531
of the FY 1987 foreign assistance appropriation act, pertaining to ESF
appropriations allocated for Israel (quoted earlier), indicates
congressional sanction for use of ESF grant funds to make payments on
FMS obligations. This provision, on its face, does not specifically
authorize Israel or, by implication, any other country to use ESF monies
to pay FMS debt. Although we recognize that the inference AID seeks to
draw from this provision - that the use of ESF monies to pay FMS debt is
permissible - is not wholly unreasonable, we conclude that any such
inference is too tenuous to overcome the direct statutory prohibition of
subsection 531(e) of the Foreign Assistance Act, the close nexus between
the FMS debt payment and the military equipment, and AID's previous
public position.
Accordingly, we conclude that the use of ESF monies to pay Egypt's
FMS debt is improper. This letter will be available for release to the
public in 30 days, unless released earlier by you or your staff.
Sincerely yours,
Comptroller General
of the United States
FOOTNOTE
1/ Hearings and Markup before the Subcommittee on Europe and the
Middle East of the Commitee on Foreign Affairs, House of
Representatives, 98th Cong., 2d Sess., February 8, 1984.
FILE: B-217562 DATE: September 30, 1985
MATTER OF: Claim of Commonwealth of Massachusetts for
$71,533.04
DIGEST:
Consistent with Air Force recommendation,
claim of Commonwealth of Massachusetts for
$71,533.04 for rental of land to the United
States Air Force for the period July 1,
1975 to June 30, 1976 may be paid. It is
uncontroverted that the Air Force returned
to Massachusetts unpaid the voucher
covering rent for the period in question,
and there is no proof that payment was
subsequently made. Moreover, the Air Force
books show that rent was paid for the
period July 1, 1974 to June 30, 1975 but
have no entry for the period in question.
The Commonwealth of Massachusetts requests reconsideration of our
Claims Group's denial of its claim against the United States in the
amount of $71,533.04 for rental of various parcels of land at Otis Air
Force Base for the period July 1, 1975 through June 30, 1976.
Z-2854237, Aug. 24, 1984, aff'g on other grounds Z-2854237, May 16,
1984. For the reasons given below, we reverse and conclude that the
claim should be paid.
In July 1974, the United States Air Force leased various parcels of
land at Otis Air Force Base from the Commonwealth of Massachusetts
(#DACA 51-5-75-293). The lease called for annual rent payments of
$71,533.04 for the years between July 1, 1974 and June 30, 1979.
Thereafter the lease was modified several times. Modification numbers
one and two deleted some of the lands covered by the lease but made no
change in the rent. Modif ication number three further deleted lands
from the lease, and also reduced the rent to $1.00 for the entire
remaining term. Modification number three was effective July 1, 1976.
The original invoice from Massachusetts to the Air Force for the
$71,533 rent payment for the period July 1, 1975 through June 30, 1976
was returned unpaid to the State in January 1977 with a request that it
be corrected to reflect the lease modifications. Although it is not
clear, the Air Force may have mistakenly assumed that the modifica-
tions affected the rent for the rental period in question. In 1982 a
state audit concluded that the $71,533 had not been paid and recommended
immediate collection.
The claim was submitted to the Air Force and subsequently
investigated. The investigation revealed no proof of payment though
most of the Air Force's records covering the period for which rent was
claimed had been destroyed. In February 1984 the Air Force submitted
the claim to this Office for settlement with a recommendation that the
claim be paid, principally on the ground that the original invoice
submitted by Massachusetts should have been paid rather than returned to
the State for adjustment. Subsequently, the Air Force told us
informally that the books which ref lect the Air Force's payments under
the lease indicated that payment was made for the period July 1, 1974
through June 30, 1975, but have no entry showing payment for the period
in question.
In Z-2854237, May 16, 1984, our Claims Group found Massachusetts'
claim barred by the 6-year period of limitations set forth in the
statute authorizing this Office to settle claims against the United
States. 31 U.S.C. Sec. 3702(b) (1). Massachusetts requested
reconsideration arguing that the statute of limitations did not apply to
states. See 31 U.S.C.(b)(1)(B). In its decision of August 24, 1984,
the Claims Group agreed with the State, but again denied the claim since
the Air Force records necessary to justify or refute the claim had been
destroyed. Subsequently, the State again requested reconsideration
contending the Air Force had determined that the rental for the period
in question had not been paid and had recommended payment.
The burden of proof in estaolishing the liability of the United
States is on the claimant. 4 C.F.R. Sec. 31.7; 53 Comp. Gen. 181, 184
(1973); 31 Comp. Gen. 340 (1952). Generally where Government records
have been destroyed pursuant to law or are unavailable due to lapse of
time, and there is no other documentation available from any source to
establish the United States' liability, the claim must be denied. E.g.,
B-187523, November 9, 1976.
The absence of Government records, however, is not an absolute bar to
allowance; a claim may be allowed if there is other satisfactory
evidence tnat the claim is valid and has not been paid. See B-187b77,
April 14, 1977.
In this instance, it is uncontroverted that the Air Force returned
unpaid the voucher submitted by Massachusetts for the rental period in
question, and there is no proof that the rental payment was subsequently
made. Moreover, the record indicates the Air Force did pay
Massachusetts for the period July 1, 1974 through June 30, 1975 but the
Air Force books recording payments have no entry showing payment for the
later period in question. Consistent with a presumption of regularity,
see United States v. One 1971 Ford Truck, 346 F. Supp. 613, 620 (C.D.
Cal 1972), as there is no evidence to the contrary, we can presume that
the payment for 1975-76 would have been recorded had it been made.
Although we still think overly lengthy the period during which the claim
appears not to have been pursued, the described circumstantial evidence,
together with the Air Force's recommendation, is suff icient to warrant
payment of the $71,533.04 claim. Accordingly, we reverse Z-2854237,
Aug. 24, 1984.
Acting Comptroller General
of the United States
FILE: B-217517 DATE: July 28, 1986
MATTER OF: Claim for Backpay - False Statement of Interim Earnings
DIGEST:
Employee filed false statement reporting no interim earnings
during the period covered by his backpay award. Later, upon being
advised that no action would be taken to pay his backpay claim
because of his false statement, employee filed an accurate report
of his interim earnings. We hold that the employee's backpay
claim is tainted by fraud and may not be paid.
This is a request for a decision concerning a claim for backpay by an
employee of the Federal Aviation Administration (FAA). We find that the
claim for backpay is tainted by fraud because of the claimant's false
statement denying any interim earnings. Accordingly, all backpay must
be denied.
FACTS
The claimant had been employed as a GS-11 Air Traffic Control
Specialist and was removed from that position on February 2, 1980. He
filed a grievance challenging his removal under the collective
bargaining agreement then in effect between the FAA and the Professional
Air Traffic Controllers Organization. His grievance was arbitrated and
the arbitrator's award, dated July 29, 1980, ordered his reinstatement
with backpay.
In accordance with the award, the claimant was ordered to report for
work on August 4, 1980. However, he did not report to work on that date
and actually reported on August 11, 1980. He was charged with 1 day
annual leave and 4 days leave without pay. The facility chief believed
that he had delayed reporting to work because he was employed elsewhere.
On September 17, 1980, the claimant signed a statement certifying
that he received no interim earnings from February 2, 1980, through
August 1, 1980. On October 9, 1980, the FAA accounting division
requested the agency security personnel to investigate the claimant's
statement that he had no interim earnings during the period he was
discharged. The preliminary findings were that the claimant had been
employed for a salary of $100 per day.
On January 29, 1981, the matter was referred to the Inspector General
of the Department of Transportation for investigation. The agency
advises that although the U.S. Attorney declined to prosecute the
claimant for criminal charges, the 1983 report of the Inspector General
did reflect the fact that the claimant had submitted a false statement
concerning his interim earnings.
In June 1984, the accounting division advised the claimant that as a
result of his false statement concerning his interim earnings, no action
would be taken to pay him any backpay. The claimant then wrote directly
to the Secretary of Transportation. His letter was referred to the
FAA's Office of the Chief Counsel. That office advised the claimant by
letter dated September 6, 1984, that he had apparently failed to report
$2,125 earned during his employment. The letter further advised that
when a true and accurate statement of his gross outside earnings was
filed with FAA, his backpay would be computed and paid. Upon receipt of
this advice from the FAA Office of Chief Counsel, the claimant filed a
statement dated September 22, 1984, certifying that his interim gross
earnings for the period February 1, 1980, through August 3, 1980, were
$2,125, and requested payment of backpay.
The FAA accounting division subsequently forwarded the case to our
Office for resolution. The accounting division believes the claimant is
not entitled to any backpay. It cites Comptroller General decisions
holding that the fraudulent presentation of a claim vitiates the entire
claim. Thus, in the view of the accounting division, the full backpay
claim of aPproximately $12,000 should be denied because the claimant
filed a false statement denying interim earnings.
The claimant, relying upon the September 6, 1984, letter from the FAA
office of Chief Counsel, believes he is entitled to full backpay, less
the $2,125 of interim earnings.
Upon receipt of the agency's request for a decision, we provided the
claimant with a copy of the agency's request and advised that he could
submit written comments. He did send a short letter denying any and all
allegations of any false claim. He asserts he has been "* * * fully
cooperative with FAA on all matters and explained to an agency official
in 1981, the misunderstanding of subchapter 8 Back pay which led to the
statement dated Sept. 17, 1980." There is no further explanation of
what he told the agency official in 1981 or what misunderstanding
occurred with respect to subchapter 8 backpay.
DISCUSSION
The first issue in this case is whether or not the claim for backpay
is tainted by fraud. If the claim is not tainted by fraud, the claimant
is entitled to backpay less interim earnings of $2,125. If the claim is
tainted by fraud, the second issue is must all backpay be forfeited or
only a portion thereof.
As we noted in 57 Comp. Gen. 664, 668 (1978), it is difficult to
prescribe exact rules concerning proof of fraud or misrepresentation
since the question of whether fraud exists depends on the facts in each
case. We recognize that the failure to report interim earnings
accurately and promptly should not automatically be equated with fraud.
Honest omissions and misunderstanding of the principles governing
offsets of interim earnings from backpay awards can occur, and claimants
should be given the benefit of the presumption of honesty and fair
dealing. B-187975, July 28, 1977; and John V. Lovell, B-215287,
September 12, 1985.
In this case, however, the circumstances make it difficult to
conclude that an honest misunderstanding accounted for the false report
of no interim earnings. The claimant was discharged on February 2,
1980, and was reinstated on August 4, 1980, approximately 6 months
later. His reinstatement was fairly prompt and the period of his
discharge relatively short. This was not a case where long periods of
discharge could account for a lapse in memory about interim earnings.
In fact, he filed the false statement on September 17, 1980, a little
over a month after he left the interim job. We also note that the
amount earned at the interim job was substantial and not likely to be
forgotten or overlooked. We note, too, that not until 4 years later,
September 22, 1984, did the claimant file an accurate statement of his
interim earnings, and that this statement was filed only after he was
informed that his earlier false statement had resulted in suspension of
payment of his backpay award. Thus, the claimant's conduct does not
support an inference of honest error. As stated in 23 Comp. Gen. 907,
910 (1944), the restatement of a claim in a smaller amount after the
Government discovers fraud in the original claim, does not eradicate the
taint of fraud.
Finally, we note that on appeal to this Office, the claimant has not
offered a satisfactory explanation of these circumstances. He did make
a brief reference to a misunderstanding about "subchapter 8" on backpay
(presumably subchapter 8 of the Federal Personnel Manual's Supplement
990-2), but the nature of the misunderstanding is not explained or
documented, nor is any explanation offered for the 4-year delay in
reporting the earnings.
Accordingly, we conclude that this claim for backpay is tainted by
fraud.
Since we have concluded that the claim is tainted by fraud, the next
issue is whether all backpay or only a portion thereof must be
forfeited.
The general rule is that fraud vitiates a claimant's right to the
entire claim. 23 Comp. Gen. 907, cited above. If fraud is suspected,
the claim should be viewed as one of doubtful validity and should be
disallowed, leaving the claimant to pursue the matter in the courts. 44
Comp. Gen. 110, 115-116 (1964).
With respect to claims involving pay and allowances, we have held
that each seParate item of pay and allowances is to be viewed as a
separate claim and the fact that several items may be included in a
single voucher does not afford sufficient basis for the conclusion that
they have lost their character as separate claims. 41 Comp. Gen. 285,
288 (1964). In 57 Comp. Gen. 664, 667 (1978), we held that a separate
claim is one that the employee could claim independently.
In view of the above, the question is, can the period of the backpay
claim be viewed as a series of separate claims, or is the entire backpay
period considered one claim. We believe backpay must be treated as a
single claim. The pay and allowance cases referred to above deal with
how to distinguish between the varied types of pay and travel items
which may, for administrative convenience, be included on the same
voucher. Such items are unrelated or severable. In contrast, backpay
is essentially one entitlement arising out of one personnel action.
Thus, we have held that the Back Pay Act does not require or contemplate
a daily or weekly breakdown of backpay and interim earnings. Rather,
the total amount of outside earnings is to be compared to the total
amount of backpay. 48 comp. Gen. 572 (1969); and 55 Comp. Gen. 48
(1975). Aocordingly, the entire backpay period is to be treated as one
claim. Since, as discussed above, the claim is tainted by fraud, the
entire claim is disallowed.
Accordingly, consistent with the above, the claimant must be denied
all backpay.
Comptroller General
of the United States
Matter of: Claim of Ngu Hung Tran
File: B-217439
Date: June 2, 1987
DIGEST
Since the claimant has not satisfied the burden of proof necessary to
support his claim, claim for rent payments arising from a rental
agreement between the claimant and the United States Army is denied.
Z-2846403-089, Oct. 6, 1986, is affirmed.
DECISION
Ngu Hung Tran asks for reconsideration of Z-2846403-089, Oct. 6,
1986, in which we denied his claim for rent payments totaling $63,984.
For the reasons given below, we affirm the denial of his claim.
Background
By letter of August 23, 1980 to the Secretary of Defense, Mr. Tran
claimed that early in 1974 he entered into a contract with the United
States Army for rental of property including a warehouse, helicopter
field and parking lot, at a rate of approximately $6,398 per month. 1/
Rent payments were to be made every 3 months, with notice of termination
to be given 1 month prior to termination. The rental contract was to
continue unless notice of termination was given. Mr. Tran alleges that
he did not receive payments from July 1974 to April 1975, totaling
$63,984, because the Army's budget was not approved on time. He also
claims he is owed $383,904 for payments between May 1975 and June 1980.
The record suggests that after the United States evacuation from
Vietnam in April 1975, Mr. Tran was incarcerated and tortured by
government authorities, and, as a result, suffered serious injuries.
Apparently, he escaped from Vietnam in July 1979, and reached the United
States in June 1980.
In his letter to the Secretary of Defense, Mr. Tran mentioned that
his dealings were with S. H. Kulp, the Chief of Army Real Estate in
Saigon. Mr. Kulp's statement of the facts differed somewhat from Mr.
Tran's. Mr. Kulp informed the Army that he was responsible for
developing policies and procedures for real estate acquisition. He
stated that rental agreements were not written for more than 5 years,
and more typically were written for a 1-year period with renewal options
at predeveloped rental schedules. Mr. Kulp suggested Mr. Tran's lease
was for a 2-year period that may have begun in mid-1972.
Mr. Kulp was unable to confirm or deny Mr. Tran's statements about
payments in 1974; however, to the best of his knowledge, he thought
that funds for lease payments always were available. He also thought
that the most Mr. Tran could be owed would be rental for the period
between October 1974 and April 1975.
We received Mr. Tran's claim on December 16, 1980. The Army
forwarded Mr. Tran's claim to us to bar running of the 6year period of
limitation in section 3702(b) of title 31 of the United States Code.
Previously the Navy had located two vouchers showing payments to Mr.
Tran under lease USARV-E1515-72, apparently in piasters, on June 9, 1973
and November 20, 1973. The second payment was for the period December
1, 1973 through February 28, 1974. Neither the Army nor the Navy were
able to find any evidence of a lease beyond February 1974. In
Z-2846403, Nov. 30, 1983, our Claims Group denied Mr. Tran's claim on
the ground that it was barred from our consideration by the 6-year
period of limitation set forth in section 3702(b) of title 31 of the
United States Code.
Subsequently, Mr. Tran filed an action against the United States in
the United States Claims Court, essentially for the same amounts and on
the same grounds. Tran v. United States, No. 655-84c (U.S. Cl. Ct.
filed December 10, 1984). In its order of July 18, 1985, the court
found that after Saigon fell and the jurisdiction of both the South
Vietnamese and United States Governments ceased on April 30, 1975, there
was no further contractual relationship between the United States and
Mr. Tran. The court thus concluded that Mr. Tran's claim must have
accrued prior to April 30, 1975, and was therefore barred by the statute
of limitations in section 2501 2/ of title 28 of the United States Code.
At oral proceedings, the court suggested that Mr. Tran's only remedies
were through reexamination by this Office or a private relief bill.
Transcript of the Proceedings at 2630, Tran v. United States, Case No.
655-84c (U.S. Cl. Ct. July 17, 1985). In this regard, the court
suggested that this Office had incorrectly applied the 6-year period of
limitation in section 3702(b) of title 31 to part of Mr. Tran's claim.
Id. at 29.
On reconsideration, our Claims Group acknowledged that its initial
decision about application of the 6-year period of limitations in
section 3702(b) of title 31 was in error. It found that if the lease
had continued to run until April 30, 1975, the claim for payments for
the period after December 30, 1974 would not have been barred.
Nevertheless, the Claims Group found that there was insufficient
evidence to support the claim. Z-2846403-089, Oct. 6, 1986.
Mr. Tran again has requested reconsideration, maintaining that there
is "substantial collateral validation of the fact that the lease did run
until the United States withdrew from Viet Nam." The validation he
relies on is Mr. Kulp's belief that this was so, Mr. Tran's own
statements, and the fact that the United States Government was using Mr.
Tran's land until its withdrawal in April 1975.
Legal Discussion
We agree with the Claims Group's corrected statute of limitations
determination. Mr. Tran's claim was filed with this Office on December
30, 1980. Thus, if he did have a lease agreement with the United States
Army, any payments that were due between December 30, 1974 and April 30,
1975 would not have been barred by the 6-year period of limitations set
forth in section 3702(b) of title 31. We agree with the United States
Claims Court that the United States would have no obligation to pay
amounts claimed between April 1975 and June 1980, even if there had been
a lease agreement covering the period. In this regard the court said:
" t he intervention of hostile forces and the change in governmental
structure" made it impossible for Mr. Tran to make his property
available or for the United States to accept it after April 30, 1975.
Tran v. United States, Case No. 655-846 (U.S. Cl. Ct. July 18, 1985).
Regardless of the statute of limitations issue, however, the evidence
presented by Mr. Tran is not sufficient to support his claim. It is
well established that the burden of proof in establishing the liability
of the United States is on the claimant. 4 C.F.R. Sec. 31.7; 31 Comp.
Gen. 340, 341 (1952). We regret the very painful experience that Mr.
Tran suffered after the American evacuation from Vietnam, and agree that
it would have been next to impossible for him to have retained records
supporting his claim. Nevertheless, what little information we have
been able to gather does not warrant our finding that a lease contract
did exist between Mr. Tran and the United States during the period
December 30, 1974 through April 30, 1975. Other than his own
statements, Mr. Tran has not presented any evidence either that a lease
existed for the period in question or that the Army continued to use his
property until April 1975.
Mr. Kulp, the Army Real Estate official who dealt with Mr. Tran,
recalled the location and use of the area but believed the rental period
began in mid-July 1972. He also guessed that the lease was for a 2-year
period, and thus would have ended in July 1974. Moreover, in conflict
with Mr. Tran's assertions, he believed monies were available for rent
payments during the entire period at issue so that the failure to make
payments was not based on a lack of available funds. Accordingly, we
affirm Z-2846403-089, Oct. 6, 1986.
Comptroller General
of the United States
FOOTNOTES
1/ It appears that this amount was to be paid in piasters.
2/ Section 2501 generally provides for a 6-year statute of
limitations, but allows an additional 3 years for oersons under legal
disabilities or who are beyond the seas when a claim accrues. The court
noted that Mr. Tran's disability ceased in June 1980 when he moved to
the United States. Since the complaint was filed on December 10, 1984,
nearly a year beyond the running of the additional 3-year period, the
court found the claim to be barred.
File: B-217158.2
Date: March 22, 1989
Digest
An employee who was involuntarily discharged from his federal position
and denied severance pay by his agency under 5 U.S.C. Sec. 5595(b)
(1982) based on inefficiency, seeks review of our Claims Group
settlement which sustained that agency action. Based on rulings by the
Merit Systems Protection Board and Court of Appeals for the Federal
Circuit rendered in the claimant's case, the finding of inefficiency is
reasonably based and we conclude that our Claims Group action is
correct.
Alan Dockterman, Esq.
Holland and Dockterman
1513 King Street
Alexandria, Virginia 22314
Dear Mr. Dockterman:
We refer to your letter of October 6, 1988, written on behalf of Mr.
Alexander Brandt, in which you renew your request that we review our
Claims Group Settlement Z-2851884, July 3, 1984, and reconsider Mr.
Brandt's entitlement to severance pay. That settlement sustained the
Department of the Navy's action disallowing such pay based on the Navy
finding that Mr. Brandt's separation was due to his inability to perform
his assigned tasks - inefficiency.
The facts are that Mr. Brandt was indicted by a federal grand jury on
three counts of willful and deliberate federal income tax evasion for
the years 1976, 1977, and 1978. He pled guilty to the charge for the
year 1978, and on July 9, 1982, he was sentenced to 2 years in prison
(actual confinement - 60 days), supervised probation for 3 years, a
$5,000 fine, and 100 hours of community service. As a result of that
conviction, his employer, the Department of the Navy, revoked his
security clearance. Since there were no nonsensitive positions
available to him, Mr. Brandt was discharged from federal service on June
15, 1983.
Mr. Brandt filed a challenge to that action with the Merit Systems
Protection Board (MSPB). The issues considered by the MSPB were whether
Mr. Brandt's security clearance should have been revoked and whether the
basis for discharge--inability to perform assigned tasks -
inefficiency--was proper. Based on its examination of all the evidence,
the MSPB sustained the agency finding that a nexus existed between Mr.
Brandt's conviction of the off-duty crime and revocation of his security
clearance. The Board also concluded that since there were no other
nonsecurity clearance positions available, his removal promoted the
efficiency of the federal civil service and was proper. 1/ Those
findings by the MSPB were affirmed by the United States Court of Appeals
for the Federal Circuit on August 17, 1988. 2/
Notwithstanding the above, you argue that Mr. Brandt should receive
severance pay because the reason for his separation, i.e., loss of
security clearance, is not an event described in 5 U.S.C. Sec. 5595(b)
as constituting cause. Further, you point out that had Mr. Brandt's
position not required a security clearance he would not have been
dismissed from federal service.
The statute governing severance pay clearly precludes payment to an
employee who is removed for cause on charges of misconduct, delinquency,
or inefficiency. 5 U.S.C. Sec. 5595(b) (1). The court opinion you
cited, Sullivan v. United States, speaks to the issue of what
constitutes an involuntary separation when an employee is removed from
the federal service at the expiration of a limited-term appointment. 3/
The court in Sullivan does not suggest that there is any discretion with
regard to the payment of severance pay to individuals removed for cause.
In view of the ruling of the MSPB and the Court of Appeals for the
Federal Circuit, it is our position that the finding of inefficiency is
reasonably based. Therefore, we conclude that the action of our Claims
Group disallowing Mr. Brandt's claim for severance pay is proper.
Sincerely yours,
Robert L. Higgins, Associate General Counsel
FOOTNOTES
1/ MSPB Docket No. DC07528310774, initial decision, Oct. 13, 1983,
affirmed as modified, July 12, 1984.
2/ Brandt v. Department of the Navy, No. 85-542, slip op. at 3 (Fed.
Cir. Aug. 17, 1988).
3/ 4 Cl. Ct. 70 (1983); aff'd, 742 F.2d 628 (Fed. Cir. 1984).
File: B-217114.9
Date: May 20, 1991
DIGEST:
A congressional request asks GAO to address concerns raised by a
constituent. The constituent, an accountable officer, is seeking
information from an agency on a loss that occurred in his account so
that he might be granted relief. The officer was previously denied
relief and had also requested GAO to certify his liability to the
Attorney General under 5 U.S.C. Sec. 5512. Our certification resolved
all of the issues concerning the liability which were within our
jurisdiction, and we will not consider future relief requests.
The Honorable Daniel P. Moynihan
United States Senate
28 Church Street
Suite 203
The Guaranty Building
Buffalo, New York 14202
Dear Senator Moynihan:
This responds to your request, dated September 27, 1990, that we
address certain concerns raised by your constituent, Mr. Paul F. Kane.
Mr. Kane asked for your assistance in obtaining certain information from
the U.S. Army.
As discussed in detail in prior decisions of this Office, Mr. Kane is
an accountable officer who is liable for erroneously paying a number of
fraudulent travel expenses. The expenses were claimed by employees of
the Buffalo District Office of the U.S. Army Corps of Engineers. Under
31 U.S.C. Sec. 3527, Mr. Kane was partially denied relief from his
liability in our decision 65 Comp. Gen. 858 (1986). Mr. Kane's request
for reconsideration of that decision was denied in B-217114.5, June 8,
1990. Mr. Kane has asked for your assistance in his further efforts to
obtain information which he feels will result in his obtaining relief
from his liability.
Prior to his request for assistance from your office, Mr. Kane asked
GAO to take certain actions regarding this matter. First, Mr. Kane
asked us to exclude from his liability amounts which we considered
erroneously paid under our "tainted day" rule. The "tainted day" rule
stated that non-fraudulent per diem travel expenses paid for the same
days as a fraudulent per diem expense are erroneous payments for
determining accountable officer liability. Non-fraudulent expenses
included under our "tainted day" rule amounted to about 50 percent of
Mr. Kane's liability for the erroneous payments.
Second, Mr. Kane asked us to certify the amount of his liability to the
Attorney General under 5 U.S.C. Sec. 5512. Section 5512 provides that
the Attorney General shall bring suit against a government employee
within 60 days of receiving our certification of the amount owed by a
government employee. This process allows a government employee whose
pay has been withheld to satisfy a debt owed to the United States, like
Mr. Kane, to have the issues related to their liability adjudicated by a
U.S. District Court.
In response to Mr. Kane's requests, we recently issued a decision which
limits an accountable officer's liability for erroneously paid
fraudulent per diem expenses. Accountable officers will now be liable
only for the actual fraudulent expenses, rather than all per diem
expenses claimed for any day tainted by fraud. B-217114.7, May 6, 1991,
70 Comp. Gen. (copy enclosed). This decision reduced Mr. Kane's
liability for the erroneous payments to $7,809.36. Because of
collections from both Mr. Kane and the employees who received the
fraudulent payments, Mr. Kane's current outstanding liability is
$3,358.24. We have certified this amount as Mr. Kane's liability to the
Attorney General under 5 U.S.C. Sec. 5512. B-217114.7, May 6, 1991
(copy enclosed).
In his letter to your office, Mr. Kane generally asks for assistance in
obtaining information from Army officials. The importance of this
information to the final resolution of Mr. Kane's liability is not
clear. Regardless, we concluded addressing the issues concerning Mr.
Kane's liability which were within our jurisdiction when we referred
this matter to tie Attorney General under section 5512. To the extent
that Mr. Kane intends to again ask us to relieve him from his liability,
we would decline to consider a further request for relief.
Sincerely yours,
James F. Hinchman, General Counsel
Enclosures
File: B-217114.8
Date: May 20, 1991
DIGEST:
A congressional request asks GAO to address concerns raised by a
constituent. The constituent, an accountable officer, is seeking
information from an agency on a loss that occurred in his account so
that he might be granted relief. The officer was previously denied
relief and had also requested GAO to certify his liability to the
Attorney General under 5 U.S.C. Sec. 5512. Our certification resolved
all of the issues concerning the liability which were within our
jurisdiction, and we will not consider future relief requests.
The Honorable Henry J. Nowak
House of Representatives
Dear Mr. Nowak:
This responds to your requests, dated July 9, 1990, and April 26, 1991,
that we address certain concerns raised by your constituent, Mr. Paul F.
Kane. Mr. Kane asked for your assistance in obtaining certain
information from the U.S. Army.
As discussed in detail in our July 24, 1990, letter to you, Mr. Kane is
an accountable officer who is liable for erroneously paying a number of
fraudulent travel expenses. The expenses were claimed by employees of
the Buffalo District Office of the U.S. Army Corps of Engineers. Under
31 U.S.C. Sec. 3527, Mr. Kane was partially denied relief from his
liability in our decision 65 Comp. Gen. 858 (1986). Mr. Kane's request
for reconsideration of that decision was denied in B-217114.5, June 8,
1990. Mr. Kane has asked for your assistance in his further efforts to
obtain information which he feels will result in his obtaining relief
from his liability.
Prior to his latest requests for assistance from your office, Mr. Kane
asked GAO to take certain actions regarding this matter. First, Mr.
Kane asked us to exclude from his liability amounts which we considered
erroneously paid under our "tainted day" rule. The "tainted day" rule
stated that non-fraudulent per diem travel expenses paid for the same
days as a fraudulent per diem expense are erroneous payments for
determining accountable officer liability. Non-fraudulent expenses
included under our "tainted day" rule amounted to about 50 percent of
Mr. Kane's liability for the erroneous payments.
Second, Mr. Kane asked us to certify the amount of his liability to the
Attorney General under 5 U.S.C. Sec. 5512. Section 5512 provides that
the Attorney General shall bring suit against a government employee
within 60 days of receiving our certification of the amount owed by a
government employee. This process allows a government employee whose
pay has been withheld to satisfy a debt owed to the United States, like
Mr. Kane, to have the issues related to their liability adjudicated by a
U.S. District Court.
In response to Mr. Kane's requests, we recently issued a decision which
limits an accountable officer's liability for erroneously paid
fraudulent per diem expenses. Accountable officers will now be liable
only for the actual fraudulent expenses, rather than all per diem
expenses claimed for any day tainted by fraud. B-217114.7, May 6, 1991,
70 Comp. Gen. (copy enclosed). This decision reduced Mr. Kane's
liability for the erroneous payments to $7,809.36. Because of
collections from both Mr. Kane and the employees who received the
fraudulent payments, Mr. Kane's current outstanding liability is
$3,358.24. We have certified this amount as Mr. Kane's liability to the
Attorney General under 5 U.S.C. Sec. 5512. B-217114.7, May 6, 1991
(copy enclosed).
In his letter to your office, Mr. Kane generally asks for assistance in
obtaining information from Army officials. The importance of this
information to the final resolution of Mr. Kane's liability is not
clear. Regardless, we concluded addressing the issues concerning Mr.
Kane's liability which were within our jurisdiction when we referred
this matter to the Attorney General under section 5512. To the extent
that Mr. Kane intends to again ask us to relieve him from his liability,
we would decline to consider a further request for relief.
Sincerely yours,
James F. Hinchman, General Counsel
Enclosures
File: B-217114.6
Date: July 24, 1990
DIGEST
The joint liability of an accountable officer and an employee who
obtained fraudulent travel reimbursements is not affected by the agency
returning amounts improperly collected from the employee. As part of
its efforts to recover the fraudulent reibursements, the U.S. Army Corps
of Engineers withheld a regular compensation check from the employee
without complying with the requirements of 5 U.S.C. Sec. 5514 (1988).
Correcting the administrative error by releasing the withheld check does
not affect the liabilities of either the employee or the accountable
officer.