FILE: B-220613 86-1 CPD 131
DATE: February 5, 1986
MATTER OF: ADAK Communications Systems, Inc.
BIDS - INVITATION FOR BIDS - CANCELLATION - AFTER BID OPENING - NOT
REQUIRED - DEFECTIVE SOLICITATION
Cancellation, after bid opening, of invitation for bids to provide
radio repair and maintenance services, because of discrepancies in the
amount of radios to be serviced, is unreasonable where award would
result in satisfying the government's needs and would not prejudice
bidders.
ADAK Communications Systems, Inc. (ADAK), protests the Department of
the Air Force's post-bid opening cancellation of invitation for bids
(IFB) No. F41800-85-B-8322. ADAK, the low bidder, requests that it be
awarded the costs of preparing its bid and pursuing its protest with
this Office. The protest is sustained, but the request for
reimbursement of the protester's costs is denied.
The IFB involved the maintenance and support of fixed, mobile and
portable radios on-site at Kelly Air Force Base, Texas, in
government-furnished facilities. Section B of the solicitation asked
for fixed monthly prices to provide routine maintenance services for a
specific quantity of radios listed by type and location under 20 line
items. The IFB also requested unit prices to provide an indefinite
quantity of other services, such as emergency repairs, as required by
the Air Force. Section C of the IFB contained an inventory of the
radios to be serviced.
After bid opening, the second low bidder filed a protest with the Air
Force alleging that the specifications were defective because of an
inconsistency between sections B and C of the IFB. Specifically, one of
the maintenance items listed in section B covered a fixed quantity of 15
portable radios while section C listed 150 portable radios at the
location covered by the item; another maintenance item in section B
stated a fixed-quantity of 75 portable radios while section C listed
160. (A few other items contained minor discrepancies of 3 or less
radios.) The IFB provided that section B took precedence over section C.
Because the Air Force decided that section B of the IFB did not
accurately reflect the Air Force's need for services for the larger
quantities of equipment specified in section C of the IFB, the Air Force
determined to cancel the IFB and resolicit.
The Air Force contends that section B, with its fixed quantities of
radios, would have obligated the contractor to maintain only the lesser
quantities of portable radios specified in section B, and that it would
have been improper to award the contract with the intention of
subsequently adding additional requirements. The Air Force asserts that
the discrepancy is significant, and points out that factoring ADAK's
unit prices with the correct quantities of radios would increase ADAK's
bid by more than one-third. The Air Force also asserts that it needs a
requirements contract for the maintenance services, rather than a
fixed-quantity type of contract.
ADAK contends that none of the bidders was prejudiced by the
inconsistencies, and the Air Force could have met its needs by awarding
the contract under the IFB. In this regard, ADAK asserts that bidders
were on notice that they would have to maintain all the radios of a
given type under the solicitation. The protester further points out
that the quantities stated in section B can be adjusted through use of
the "Additions or Deletions of Equipment" clause of the IFB which
provides for the addition or deletion of equipment with accompanying
cost adjustments to be based on the contractor's specified monthly
prices. ADAK states that the discrepancy between sections B and C was
therefore a mere technical deficiency that did not prejudice the
bidders.
Because canceling an IFB after bid opening might adversely impact the
integrity of the competitive sealed bidding system, a procuring agency
must have a compelling reason to cancel an invitation after bid opening.
Feinstein Construction, Inc., B-218317, June 6, 1985, 85-1 CPD
Paragraph 648. We have held that the use of specifications which do not
adequately describe the government's actual needs generally provides a
compelling reason to cancel a solicitation. Flight Refueling, Inc.,
B-216709, May 13, 1985, 85-1 CPD Paragraph 536. Cancellation is
improper, however, where no bidder was prejudiced by the discrepancy and
the government would fulfill its needs through the award of the
contract. Twehous Excavating Company, Inc., B-208189, Jan. 17, 1983,
83-1 CPD Paragraph 42.
We find that the cancellation of this solicitation was not proper
because no bidder was prejudiced by the discrepancy and the government
could have met its needs through award of the contract. Although
section B, which required the contractor to maintain fixed quantities of
base station, mobile, or portable radios at several locations,
specifically stated that section C listed an inventory of the equipment,
there were large discrepancies between sections B and C regarding the
quantity of equipment to be maintained. While in many cases
solicitation inconsistencies may mislead bidders or not accurately
reflect the government's actual needs, such that solicitation
cancellation is appropriate, we believe such a situation does not exist
here. First, in our judgment, these discrepancies were of such a
magnitude -- in one instance a factor of more than 10 -- that they were
patent and bidders were therefore on notice of the discrepancies. No
bidder complained prior to bid opening. Second, the bids were based on
monthly unit prices per radio to be serviced, and there is no indication
that any bid price per radio would have been different depending upon
the actual quantity to be serviced. In fact, bidders were on notice
that the government's needs could be met through the use of the
"Addition or Deletion of Equipment" clause. Finally, when the correct
quantities for these items are used in evaluating prices, the low bid is
not displaced. Consequently, we do not believe that bidders were
prejudiced by the inconsistencies, or that cancellation was necessary.
See Douglas County Aviation, Inc. et al., B-213205 et al., Sept. 27,
1985, 64 Comp. Gen. . . . , 85-2 CPD Paragraph 345; Central Texas
College System, B-215172, Feb. 7, 1985, 85-1 CPD Paragraph 153.
Regarding the Air Force's alleged need for an indefinite-quantity
requirements contract, we note that the IFB already requires the
contractor to provide everything necessary to maintain the fixed
quantity of radios, and provides for fluctuations in the Air Force's
inventory through the "Addition or Deletion of Equipment" clause. The
Air Force, aside from merely stating that it needs a requirements
contract, has not shown that the current IFB fails to describe its needs
adequately.
The protest is sustained. The IFB should be reinstated and the
contract awarded to ADAK.
The protester requests reimbursement of its bid preparation costs and
the costs of filing and pursuing the protest, including reasonable
attorney's fees. The recovery of bid preparation costs is not
appropriate where this Office recommends that the protester receive, or
be considered for the contract award. See Bendix Field Engineering
Corp., B-219406, Oct. 31, 1985, 85-2 CPD Paragraph 496. Regarding the
costs of filing and pursuing the protest, our regulations permit the
recovery of such costs where the protester unreasonably is excluded from
the procurement, except where, as here, we recommend that the contract
be awarded to the protester. 4 C.F.R. Section 21.6(e) (1985); Bendix
Field Engineering Corp., supra. The thrust of our regulations is that
the recovery of costs should be allowed only where the protester did not
receive a fair opportunity to compete for the award, and that where the
protester obtains the award as a result of our recommendations, the
award is a sufficient remedy in itself. Since we recommend award to the
protester, the award of costs is inappropriate.
Comptroller General of the United States
FILE: B-220612 86-1 CPD 97
DATE: January 28, 1986
MATTER OF: Strobe Data, Inc.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
1. Protest against allegedly inadequate specifications is untimely
raised when not filed before bid opening.
BIDS - RESPONSIVENESS - TEST TO DETERMINAE - UNQUALIFIED OFFER TO
MEET ALL SOLICITATION TERMS
2. Since IFB did not require bidders to have previously produced
required system, awardee's lack of previously produced system does not
render its bid nonresponsible. Moreover, there is nothing on face of
awardee's bid that otherwise renders it nonresponsive given that
protester has not shown that the contracting agency unreasonably
evaluated the unsolicited technical data which protester submitted with
its bid.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
TECHNICAL TRANSFUSION PROHIBITION
3. Technical transfusion is concept that relates to unfair
disclosure in negotiated procurement of another proposer's innovative or
ingenious solution to problem. Since agency did not negotiate, but
rather contracted under sealed bid method, there could have been no
technical transfusion in procurement; moreover, GAO finds that
contracting agency's prebid opening efforts to provide information about
requirement to ultimate awardee -- and any other interested concern --
were not unfair, but only efforts made to broaden competition. Further,
contracting agency did not act unfairly in considering protester's offer
of a price reduction if stated contingency were to be accepted.
CONTRACTS - DATA, RIGHTS, ETC. - MISUSE OF TECHNICAL DATA - BY
GOVERNMENT
4. Protester has not shown by clear and convincing evidence that its
proprietary rights have been violated by contracting agency where
protester does not state that alleged proprietary material was marked
proprietary or confidential or disclosed in confidence. Further,
protester states only that data will be disclosed in future by agency,
but does not state that any disclosure has already taken place.
CONTRACTORS - RESPONSIBILITY - DETERMINATION - REVIEW BY GAO -
AFFIRMATIVE FINDING ACCEPTED
5. Protest against contracting agency's finding that awardee is
responsible will not be considered where protester has not shown that
finding was fraudulently made and bid documents did not contain
definitive responsibility criteria.
CONTRACTS - AWARDS - TO OTHER THAN LOWEST BIDDER - OTHER FACTORS
CONSIDERED
6. Statement that award would be made under invitation for bids
based on "price and other factors" does not allow a contracting agency
to award on the basis of other than low bid where low bidder is
otherwise responsible and bid is responsive.
Strobe Data, Inc. (Strobe), protests the award of a Federal Aviation
Administration (FAA) contract to Systems Atlanta, Inc. (Systems), the
low bidder, for five "Data Display Systems" which are to be used for the
display of weather to air traffic controllers in the performance of air
traffic control functions. The contract was awarded under invitation
for bids (IFB) No. DTFA11-85-B-00170 which was issued on June 18, 1985,
as a small business set-aside.
Strobe, the only other bidder, has raised numerous issues about the
award of this contract. Specifically, Strobe generally alleges that:
(1) the IFB's specifications were defective and, in any event, the FAA
allowed Systems to deviate from those specifications in its bid; (2) a
"technical transfusion" may have occurred resulting in the transfer of
allegedly proprietary Strobe data to Systems; and (3) Systems cannot
meet the IFB's specifications and delivery schedule while Strobe's units
allegedly exceed the FAA's needs.
Based on our review of the record, we deny the protest in part and
dismiss it in part.
Strobe alleges that there were problems with the IFB's specifications
regarding, for example, maintenance and error detecting aids, as well as
an alleged excessive requirement for data pages. Moreover, Strobe
insists that the sealed bid method of procurement should not have been
used here or that the IFB should have included a price-related
evaluation factor relating to "wind-shear" information. But Strobe
apparently concedes that it never protested these allegedly defective
specifications prior to bid opening although both Strobe and Systems
posed questions to the FAA about the specifications prior to that time.
As stated by Strobe: "We elected to be helpful rather than litigious."
And in a letter to the FAA's contracting officer transmitted after bid
opening, a Strobe representative said that she should have questioned
the FAA concerning the "sloppiness of the specs," but that she did not
do so because she did not want the FAA engineers to think they were not
competent.
Since the record indicates that Strobe did not protest these
specifications prior to bid opening, we consider this ground of protest
to be untimely filed, and we will not consider it. See Bid Protest
Regulations, 4 C.F.R. Section 21.2(a)(1) (1985).
Under this ground of protest, Strobe alleges that the FAA did not use
the specifications to evaluate Systems' bid and that if the FAA had done
so it would have found Systems' bid nonresponsive. However, Strobe does
not take issue with specific statements contained in Systems' bid other
than stating that Systems does not have "established" products which
conform to the specifications.
FAA's position is that the specifications were applied equally to
both bids. Specifically, the FAA's contracting officer states that
unsolicited data submitted with Systems' bid established that the bid
was responsive.
It is well established that responsiveness is solely to be determined
by examination of the bid (including accompanying data) (see, for
example, 45 Comp. Gen. 221, 222 (1965), and that the determination of
the merits of technical submissions (in this case Systems' unsolicited
bid data) to the contracting agency is the responsibility of that agency
which has considerable discretion in making the determination (see, for
example, BRD Associates, B-220136, Dec. 24, 1985, 85-2 C.P.D. Paragraph
. . .). We find nothing on the face of Systems' bid that contradicts
the FAA's finding of responsiveness. Moreover, Strobe has not shown
that the FAA unreasonably evaluated the technical data which Systems
submitted. Finally, in the absence of a specific IFB clause requiring
the bidder to have previously produced the product sought, Systems was
not required to have previously produced this System. Thus, we cannot
question the FAA's determination that Systems' bid was responsive.
Under this ground of protest, Strobe suggests that Systems' prebid
opening questions to the FAA and the FAA's replies may have resulted in
the technical transfusion of Strobe's proprietary information -- derived
from an earlier FAA contract with Strobe -- to Systems.
Technical transfusion is understood to be the disclosure to other
proposers in a negotiated procurement of one proposer's innovative or
ingenious solution to a problem. B-173677, March 31, 1972 (summarized
in 51 Comp. Gen. 621 (1972)).
This procurement was not negotiated. Consequently, there could not
have been technical transfusion in this sealed bid procurement under the
above definition of the phrase. Even if what Strobe really means by its
allegation of technical transfusion is that the FAA improperly assisted
Systems in preparing its bid, we find no evidence to support that
allegation.
Although the FAA did respond to Systems' inquiries by issuing
amendment No. 3 to the IFB under a cover letter which together made some
changes to the specifications, these documents merely informed Systems
of its right to "design choices" under some of the IFB specifications
and otherwise informed Systems that certain items that it had discussed
earlier in its request for clarification were desirable. We do not
consider these comments to Systems to be unfair assistance, but rather
efforts to broaden competition -- efforts that were presumably directed
to any interested concern.
Finally, on the issue of unfairness, Strobe also alleges that the FAA
conducted improper discussions with Systems after bid opening as to
whether the FAA would deduct $75 from the price of certain components of
the system if "212A type modems are acceptable" instead of the IFB
specified "202's." In reply, the FAA says it conducted no discussions
with Systems concerning price adjustments.
It is not uncommon that bids contain stipulated price decreases upon
the happening of a fixed contingency. So long as the acceptance of the
stipulation is solely within the discretion of the contracting agency --
as was the case with Systems' price contingency -- the acceptance or
rejection of the stipulation does not constitute improper price
negotiations.
As to the allegation that Strobe's proprietary data rights may have
been violated, a protester must prove a violation by clear and
convincing evidence. Andrulis Research Corp., B-190571, Apr. 26, 1978,
78-1 C.P.D. Paragraph 321. To meet this burden, the protester must
demonstrate that: (1) the material was marked proprietary or
confidential or it was disclosed in confidence; and (2) the data
involved significant time and expense in preparation and contained
material or concepts that could not be independently obtained from
publicly available literature or common knowledge. John Baker
Janitorial Services, Inc., B-201287, Apr. 1, 1981. 81-1 C.P.D.
Paragraph 249.
Strobe states that its proprietary product is the "software and
algorithms" furnished under its earlier FAA contract. Strobe does not
specifically state that materials were marked proprietary or
confidential or that they were disclosed in confidence to the FAA.
Further, Strobe does not actually state that the data has been disclosed
improperly by the FAA, but speculates only that its data will be
disclosed at some time to Systems. Moreover, the FAA's position is that
the claimed proprietary data relates to "common knowledge in the
telephone industry" -- a position which Strobe contests.
There is a lack of evidence concerning whether the data in question
was, indeed, disclosed by Strobe in confidence to the FAA. Strobe is
also unsure whether the FAA has even now disclosed the data to Systems.
Thus, we cannot conclude that the protester has proved by clear and
convincing evidence that data has been improperly disclosed even if we
were to assume -- contrary to the FAA's position -- that Strobe's data
does not relate to common knowledge in the telephone industry.
Strobe insists that Systems cannot "produce the promised product." To
advance this argument, Strobe, for example, has furnished us with
alleged statements from a former Systems's employee in which the
employee criticizes Systems' technical and financial capacities. Strobe
also contends that its product is superior and exceeds the solicitation
requirements.
Strobe, therefore, questions whether the FAA should have found
Systems to be a responsible concern. We will not question a contracting
agency's finding that a prospective contractor is responsible unless the
protester shows either that the determination was made fraudulently or
that definitive responsibility criteria in the IFB were not met. 4
C.F.R. Section 21.3(f)(5). Strobe does not allege -- let alone show --
fraud on the FAA's part, and the IFB contained only specifications for
the required system. Consequently, we dismiss this ground of protest.
Alternatively, Strobe alleges that Systems' capability could have
been assessed under the IFB to determine the acceptability of the low
bid given that the IFB stipulated that "price and other factors" would
determine award. We have held that the term "other factors" refers to
factors -- such as responsibility -- which are considered in the award
of any contract and does not allow a contracting agency to award on the
basis of other than the low bid. See 37 Comp. Gen. 550 (1958). Here
the FAA decided that Systems was responsible. Moreover, there is no
authority to award a sealed-bid contract to a concern whose product
exceeds the government's needs -- as Strobe alleges its product does --
where a lower-priced bid from a responsible concern has been submitted.
Protest denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
FILE: B-220611 85-2 CPD 466 DATE: October 25, 1985
MATTER OF: G.A. Braun, Inc.
DIGEST:
CONTRACTS - SMALL BUSINESS CONCERNS - AWARDS - SIZE STATUS - PROTESTS
TO AGENCY - TIMELINESS
Protest that award under a small business set-aside to a firm
alleged to be a large business was improper is denied, where
protester did not file size status protest with the contracting
officer within 5 days after bid opening, as required by the
regulations. Further, Small Business Administration determination
in another procurement that same awardee was other than a small
business was not reached until after bid opening in the protested
procurement; was not brought to the contracting officer's
attention before award; and by its terms was to apply
prospectively only.
G.A. Braun, Inc. (Braun) protests the award of a contract to Jensen
Corporation (Jensen) under Department of the Army invitation for bids
(IFB) No. DAKF19-85-B-0041. We deny the protest.
The IFB, issued as a 100-percent small business set-aside, sought to
procure washers and dryers. Bid opening was held on August 19, 1985,
and on September 16, Braun, a bidder, was notified that award was being
made to Jensen. At that time, Braun orally informed the agency that
Jensen was not a small business concern, and also submitted a written
protest to the contracting officer. Braun attached to the protest an
August 27 Small Business Administration (SBA) decision issued in
connection with another procurement, holding that Jensen was not a small
business concern under the same size standard used in the Army
solicitation: 500 or less employees. The reason, according to the SBA,
was that as of March 1985, 100 percent of Jensen's voting stock was
owned by a large business.
By letter dated September 18, the contracting officer denied Braun's
protest as untimely and refused to terminate Jensen's contract, since
the protest had not been filed within 5 days after bid opening. The
contracting officer, however, assured Braun that Jensen would not be
permitted to compete on future procurements set aside for firms with 500
or fewer employees. Braun protested to our Office on October 2.
Braun reasserts its contention that Jensen is not a small business
concern. Braun further charges that in paragraph 7 of the IFB, the
Small Business Concern Representation, Jensen either must have
misrepresented its status as a small business or correctly certified
that it was not a small business, in which case its bid should have been
rejected as nonresponsive. Braun requests that the Army be required to
terminate Jensen's contract and award a contract to Braun.
Pursuant to 15 U.S.C. Sec. 637(b)(6) (1982), the SBA has conclusive
authority to determine matters of small business size status for federal
procurement purposes. Under the regulations implementing the SBA's
authority, the controlling date for determining size status is the date
of written representation as a small business, submitted as part of a
firm's bid or offer, which the contracting officer may accept at face
value unless it is challenged by another party or he has reason to
question it. 13 C.F.R. Sec. 121.3-8 (1984); Federal Acquisition
Regulation (FAR), 48 C.F.R. Sec. 19.301(b) (1984). If an offeror or
interested party does challenge a firm's self-certification by filing a
protest with the contracting officer, the regulations require that the
matter be forwarded to the SBA. 13 C.F.R. Sec. 121.3-5(a); FAR, 48 C.
F.R. Sec. 19.302. To affect an ongoing procurement, however, the
protest must be filed within 5 days after bid opening; although a
protest filed later than that will be considered, any decision reached
will affect only the firm's eligibility to compete on future small
business set-asides. Id.
In the present case, at the time of the August 19 bid opening, the
contracting officer had no reason to question Jensen's size status, and
thus properly could accept Jensen's self-certification that it was a
small business concern. While Braun thereafter protested Jensen's size
status to the contracting officer, it did not do so until September 16,
more than 5 days after bid opening. Although the August 27 SBA decision
holding that Jensen was not a small business was issued prior to the
award to Jensen, it was brought to the contracting officer's attention
only after the award. Therefore, the award to Jensen was consistent
with the regulations, and with the terms of SBA's August 27 decision,
which states only that Jensen will be prohibited from competing for
future procurements subject to the 500-employee size standard. Finally,
speculation by Braun notwithstanding, there is no evidence in the record
that Jensen was aware, when it submitted its offer, that its stock
ownership arrangement disqualified it as a small business, or that
Jensen otherwise knowingly misrepresented itself as a small business in
its August 19 bid.
Consequently, there is no legal basis for objecting to the
contracting officer's decision to award the contract to Jensen or for
requiring the contracting officer to terminate Jensen's contract.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220610 86-1 CPD 110
DATE: January 30, 1986
MATTER OF: Lanier Business Products, Inc.
BIDS - INVITATION FOR BIDS - SPECIFICATIONS - BRAND NAME -
REASONABLENESS
1. Protest that awardee's brand name product does not comply with
salient characteristics is denied where agency's interpretation of
salient characteristic is reasonable and awardee's product meets the
agency's needs.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - FAILURE TO DILIGENTLY PURSUE PROTEST
2. Allegation that awardee's brand name product does not meet two
salient characteristics in addition to the one named in initial protest
filed 7 weeks after the initial protest is untimely.
Lanier Business Products, Inc. (Lanier), protests the award of a
contract to Sony Corporation of America (Sony) under invitation for bids
(IFB) NO. 4042, issued by the Federal Bureau of Investigation (FBI) for
portable dictating equipment. Lanier alleges that Sony's brand name
equipment was nonresponsive to the salient characteristics listed in the
brand name or equal IFB.
We deny in part and dismiss in part the protest.
The IFB was issued on August 28, 1985, with bid opening on September
18, 1985, for the Lanier model AL/CII, Sony model BM-17 or equals.
Lanier, Sony and Business Equipment Company submitted bids offering the
brand name products. Sony, which bid the BM-17, was the apparent low
bidder. Award was made to Sony, after technical review of the
equipment, on September 27, 1985. Lanier filed its protest here on
October 2, 1985, 1 day after it was notified of the award.
According to Lanier, on September 11, 1985, it notified the
contracting officer's technical representative (COTR) "that the BM-17
could not meet the salient characteristic requirement of one button
control, instead requiring the use of several different buttons for
dictation and edition." Salient characteristic No. 3 in the IFB states
"one button control-it facilitates editing and dictating." Lanier
further states that it advised the COTR that if the BM-17, were bid, it
was then Lanier's position that the COTR must advise the contracting
officer to reject the bid as nonresponsive.
The FBI argues that if Lanier were aware of these facts prior to bid
opening, then the allegation that the BM-17 does not comply with the
salient characteristics is untimely. Lanier contends that the
conversation with the COTR was an oral protest and, consequently, the
protest filed 10 days after bid opening is timely.
We find the protest to be timely, but on another basis.
While Lanier raised the issue with the COTR of the Sony model BM-17's
noncompliance with the salient characteristics, it did not know at that
time whether the model would be proposed by Sony and, if it were,
whether it would be modified to comply with the salient characteristics.
See Potomac Industrial Trucks, Inc., B-203119, Feb. 3, 1982, 82-1
C.P.D. Paragraph 78. Further, the FBI had not taken a position adverse
to Lanier's interest until it had evaluated the offered products and
made an award decision. Therefore, we find Lanier's protest, filed
within 10 days of its receiving notice of award, to be timely and for
consideration.
Lanier's offered model of dictating equipment uses one slide switch
which is moved to one of four positions (i.e., record, stop, play and
review) to accomplish editing and dictating. The Sony model BM-17
employs four separate buttons for editing and dictating labeled dictate,
review, listen and stop. By pushing those four buttons, a person can
dictate and edit on the Sony model.
The FBI interprets the salient characteristic "one-button control" to
mean that the operator can activate each function on the device by
depressing only one button at a time as opposed to depressing multiple
buttons simultaneously.
We find the agency's interpretation of the salient characteristics to
be reasonable. The FBI was attempting to limit acceptable recorders to
those which only required one button to be depressed at a time to
activate a function. This is in contrast to certain types of recorders
which require that two buttons be pressed simultaneously, i.e., both the
play and record buttons must be pressed to record or dictate. This
interpretation is given additional credence by the fact that the Sony
was listed as an acceptable brand-name.
We will not consider Lanier's arguments that Sony's model does not
comply with two other salient characteristics -- end of tape warning and
rechargeable batteries -- which were untimely raised. These issues were
not raised until 7 weeks after the initial protest was filed. New and
independent grounds of protest such as these must independently satisfy
the timeliness requirements. We have held that a protester which is
challenging an award or proposed award on one ground should diligently
pursue information which may reveal additional grounds of protest. See
General Electric Co., B-217149, Jan. 18, 1985, 85-1 C.P. D. Paragraph
60. If Lanier had diligently sought information on the BM-17, it would
have had the information on the date of the award or soon thereafter.
Lanier, as previously noted, did not file the additional allegations in
writing until it commented on the agency report on November 22, 1985,
which was 7 weeks later. These arguments therefore are dismissed as
untimely.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
FILE: B-220608 86-1 CPD 109
DATE: January 30, 1986
MATTER OF: Western Pioneer, Inc., d.b.a. Delta Western
CONTRACTS - NEGOTIATION - AWARDS - PROPRIETY
Neither the omission of a firm from the solicitation mailing list nor
the alleged inadequacy of the Commerce Business Daily notice of the
procurement prevents award and requires resolicitation where there was a
significant effort to obtain competition, reasonable prices were
obtained, and there was no deliberate attempt to exclude the protester
from competing.
Western Pioneer, Inc., doing business as Delta Western (Delta),
protests the proposed award of a contract by the Defense fuel Supply
Center (DFSC), under request for proposals (RFP) No. DLA600-85-R-0161.
The solicitation was for the supply of fuel to various military
activities including the United States Air Force base in Galena, alaska,
for fiscal year (FY) 1986. Delta protests that it was improperly
excluded from participating in the competition because it did not
receive a copy of the solicitation.
We deny the protest.
Background
On December 17, 1984, the protester wrote to DFSC's contracting
office and requested an application for placing the firm on the agency's
bidders list. On January 8, 1985, DFSC sent Delta its standard forms on
which firms can indicate the types of products and geographic areas for
which they would like to receive solicitations. The protester completed
the forms in late March and returned them to DFSC, where they arrived on
April 2.
A Synopsis of the solicitation was published in the Commerce Business
Daily (CBD) on April 4, indicating the fuels that the agency would be
procuring and listing the RFP number and the closing date for receipt of
proposals (May 16, 1985). On April 11, DFSC sent its current bidders
mailing list and the solicitation to the DFSC office that would print
the RFP and mail it to the firms on the list. The record indicates that
standard practice is to obtain the mailing list for a particular
procurement approximately 7-10 days prior to the date the solicitation
is sent to the printer. The agency reports that in this case, the
mailing list that was sent to the printing office was probably obtained
between March 29 and April 3.
On April 15, the Contracting Support Office advised Delta by letter
that the firm had been added to the solicitation mailing list. The next
day, the RFP was issued to the 394 potential bidders on the mailing list
that was included with the RFP when it was forwarded on April 11 for
printing and mailing. Delta was not on this list and it did not receive
a copy of the RFP.
On September 20, Delta's vice president telephoned DFSC to inquire
about the agency's fuel needs for 1986 and to express his firm's
intention to submit an offer. He was advised that the FY 1986
requirement had already been solicited and that it was too late for
Delta to submit an offer. On October 1, Delta filed this protest,
alleging that it had been improperly excluded from competing for the
DFSC contract.
Analysis
Delta contends that the agency's failure to send it a copy of the RFP
for the FY 1986 solicitation violated the Competition in Contracting
Act's requirement for the use of full and open competitive procedures in
Department of Defense procurements. 10 U.S.C.A. Sections 2301,
2305(a)(1) (West Supp. 1985). The protester also cites several Federal
Acquisition Regulation (FAR) provisions that emphasize the basic policy
to permit all responsible sources to submit proposals so that the
government will have the benefit of maximum competition in procuring
goods and services. The protester relies in particular on FAR sections
5.102(a)(1) and 14.205-1(b). Section 5.102(a)(1) provides that the
contracting officer shall maintain a reasonable number of copies of
solicitations publicized in the CBD and, upon request, shall provide or
mail copies, if available, to potential sources not initially solicited.
48 C.F.R. Section 5.102(a)(1) (1984). Section 14.205-1(b) provides
that all eligible and qualified concerns that have submitted
solicitation mailing list applications or that are capable of filling
the requirements of a particular acquisition shall be placed on the
appropriate solicitation mailing list. 48 C.F.R. Section 14.205-1( b)
(1984). /1/ The protester also contends that the synopsis of the
procurement that appeared in the CBD was inadequate because it did not
indicate that it included fuel for the Galena Air Force Base, but
instead stated that the fuel was for delivery to "various inland and
west coast activities."
The propriety of a procurement depends on whether adequate
competition and reasonable prices were obtained -- not whether a
particular firm was given the opportunity to submit a proposal.
Washington Patrol Service, Inc., B-217488, Aug. 16, 1985, 85-2 CPD
Paragraph 178. Further, neither the omission of a firm from the
solicitation mailing list nor the alleged inadequacy of a CBD notice
prevents award and requires resolicitation as long as there was a
significant effort to obtain competition, reasonable prices were
obtained, and there was no deliberate or conscious attempt to exclude
the protester from competing. Solon Automated Services, Inc., 63 Comp.
Gen. 312 (1984), 84-1 CPD Paragraph 473.
On the issue of whether adequate competition was sought, we note that
the agency placed a notice in the CBD and mailed solicitations to all
394 firms on the solicitation mailing list. We consider these actions
to constitute a significant effort to obtain competition. Id.; see
Blast Deflectors, Inc., B-212610, Jan. 9, 1984, 84-1 CPD Paragraph 56.
While Delta suggests that these efforts were inadequate because the CBD
notice did not specifically indicate that fuel for Alaska was included,
we do not find this a sufficient basis to conclude that the agency's
efforts to seek competition were inadequate. /2/ In any event, the
agency advises that 57 offers were actually received in response to the
RFP, including at least three offers for each fuel type for delivery to
Galena. It thus appears that adequate competition actually was
obtained. See Maryland Computer Services, Inc., B-216990, Feb. 12,
1985, 85-1 CPD Paragraph 187.
Concerning the reasonableness of the prices obtained, the agency
states that the prices offered by the firm that is in line for award are
fair and reasonable. A determination concerning price reasonableness is
a matter of administrative discretion which we will not question unless
it is clearly unreasonable or there is a showing of fraud or bad faith.
ORI, Inc., B-215775, Mar. 4, 1985, 85-1 CPD Paragraph 266. On the
record before us, we find no basis to question the determination of
price reasonableness here.
There remains the issue of whether the protester has shown that the
agency made a deliberate or conscious effort to exclude Delta from
participating in the competition. Delta specifically alleges that this
was the case.
Delta contends that DFSC was aware of the firm's interest in Galena
fuel procurements well in advance of the issuance of the FY 1986 RFP and
infers from that knowledge a deliberate and conscious effort on the
agency's part to exclude Delta from competing. The protester refers to
a telephone call it made to DFSC in November 1984, requesting
information about fuel supply solicitations, followed by the December
letter to DFSC, requesting an application for placement on the bidders
mailing list, to show that DFSC was aware of Delta's interest in
competing. Delta also emphasizes that the arrival of its completed
application at DFSC on April 2 was 2 weeks prior to the issuance of the
RFP on April 16, and that the letter from the agency confirming that
Delta had been placed on the bidders list also preceded the RFP mailing.
Delta also describes in detail its involvement in negotiations with
DFSC in February-April of 1985 for a contract to transport petroleum
products to Galena for the FY 1985 requirement. The record indicates
that DFSC had already contracted with another firm, MAPCO, to supply
Galena's fuel requirements, when it engaged in negotiations with Delta
for a separate contract to transport the fuel. However, the agency
later modified the contract with MAPCO to include the transportation of
the fuel and notified Delta that the separate transportation requirement
no longer existed. In response, Delta filed an action in the United
States Claims Court (Western Pioneer, Inc. v. United States, No.
240-85C), challenging the government's procedures. The complaint was
dismissed on procedural grounds. /3/
The protester also reports that in connection with this litigation, a
United States Senator wrote to the Secretary of Defense on June 18 to
express his concern about the procurement practices of DFSC. On July
31, the Defense Logistics Agency responded to the Senator's inquiry,
assuring the Senator that the agency would seek to maximize competition
for future requirements. Delta points our that this letter stated, "The
next solicitation for any transportation to Galena . . . will be issued
by the Fort Richardson (Transportation Officer) in 1986." The protester
notes that negotiations on the FY 1986 fuel supply contract had closed a
week before the letter was sent and concludes, "this pattern of activity
suggests that there may indeed exist a deliberate effort to prevent
Delta from competing for what has historically been a sole source
procurement."
We conclude that none of the circumstances relied on by the protester
adequately establish that the agency deliberately intended to exclude
Delta from the competition. For example, we believe the fact that the
letter advising Delta that it had been placed on the solicitation
mailing list was sent the day before the RFPs were mailed using a list
that did not include Delta reflects only inadvertence on the agency's
part, caused by the difficulties in coordinating the different
administrative tasks involved. (As noted earlier, the agency states
that it customarily obtains the mailing list 7-10 days prior to sending
the RFP, along with the list, to be printed and mailed.) Although the
agency's letter may have induced reliance on Delta's part, we have found
that even a bidder's reliance on the alleged assurances of an agency
that the firm's name would be kept on the bidders list does not
constitute a reason to cancel a solicitation and resolicit. King Kong
Services, B-219807, Aug. 14, 1985, 85-2 CPD Paragraph 171.
Regarding the 1985 transportation contract difficulties, the agency
emphasizes that the requirement there was for the transportation of fuel
and not the supply of fuel, as here. DFSC contends, therefore, that no
conclusions about Delta's interest in the 1986 fuel supply solicitation
were reached or warranted. We think the agency's position is
reasonable. Moreover, even if DFSC could be charged with knowledge of
Delta's potential as a supplier of fuel, we do not consider this proof
of a deliberate attempt to exclude Delta. Rather, we believe that the
public advertisement of the procurement here is evidence that the agency
did not deliberately exclude Delta. See Solon Automated Services, Inc.,
63 Comp. Gen. 312, supra.
Regarding the statements made by the agency in its response to the
Senator's inquiry, we find no inconsistency with these statements and
the actual events. Although negotiations on the FY 1986 fuel supply
contract were closed when the letter was sent, both the letter and the
Senator's inquiry clearly concerned future competition for fuel
transportation, not fuel supply. In this connection, the letter stated
that the f.o.b. point for the supply contracts had not been determined
and that if the contracts were awarded on an f.o.b. origin basis,
transportation would be obtained competitively. This statement is not
inconsistent with the fact that negotiations for the fuel supply
contract were closed (as the closing of negotiations does not
necessarily indicate that award decisions had been made). In any event,
there is no basis to infer from the agency's letter any deliberate
intent to exclude Delta from the FY 1986 fuel supply procurement at
issue here, since the May 16 closing date for receipt of proposals had
already passed when the Senator's inquiry was received.
Accordingly, we conclude that the record does not support a finding
that there was a deliberate attempt by the agency to exclude the
protester from the competition.
Delta also contends that the agency did not comply with the
requirements of 15 U.S.C.A. Section 637(e)(3)(a) (West Supp. 1985) that
a CBD notice of a procurement be published at least 15 days prior to the
issuance of a solicitation. Delta notes that the CBD notice here was
published on April 4, 1985, and the solicitation was issued on April 16,
1985. Delta has not shown how it was prejudiced by the agency's failure
to wait the full 15 days before issuing the solicitation, however, and
it is apparent that this failure did not prevent the protester from
submitting an offer. Accordingly, Delta's contention provides no basis
to sustain its protest. See Tri-Com, Inc., B-214864, June 19, 1984,
84-1 CPD Paragraph 643.
The protest is denied.
Harry R. Van Cleve
General Counsel
(1) Section 14.205-1(b) applies to procurement by sealed bidding.
However, FAR Section 15.403, which applies to procurement by
negotiation, provides that contracting officers shall establish,
maintain and use lists of potential sources in accordance with section
14.205.
(2) We note that in its application for inclusion on the solicitation
mailing list for alaska, Delta was given a choice of indicating that it
was interested in bidding on fuels for delivery either to east
coast/gulf sites or inland area/west coast sites. Delta checked the box
for inland area/west coast. This suggests to us that Delta, as well as
other potential offerors, was aware that Alaska was included in inland
area/west coast.
(3) The court found, however (on the issue of proposal preparation
expenses), that Delta had not shown "any viable basis on which the
amendment of the MAPCO contract could be faulted in the actual
circumstances involved."
FILE: B-220606 85-2 CPD 682
DATE: December 17, 1985
MATTER OF: Grace Industries, Inc.
BONDS - REQUIREMENT - BID, PERFORMANCE, ETC. - ADMINISTRATIVE
DETERMINATION
Protest that bid guarantee, performance and payment bond requirements
unfairly and unreasonably restrict competition is denied where the
contracting officer reasonably determined that bonding requirements were
necessary to protect the government's interest.
Grace Industries, Inc. (Grace), protests the bonding requirements of
invitation for bids (IFB) No. DABT56-85-B-0062, a total small business
set-aside issued by the United States Army Engineer Center (Army), Fort
Belvoir, Virginia, for custodial services. Grace contends that the
bonding requirements unfairly and unreasonably restrict competion.
We deny the protest.
The IFB was issued on September 3, 1985, with bid opening set for
October 3, 1985, and did not contain any bonding requirements.
Amendment No. 0001, issued on September 20, 1985, required a bid
guarantee, a performance bond, and a payment bond. The contracting
officer considered 13 days adequate time for bidders to obtain bonds.
The Army also issued three more amendments which among other things,
extended bid opening until November 13, 1985. Grace's protest was filed
here prior to the initial bid opening date.
The solicitation consolidated certain custodial contracts at Fort
Belvoir. In the past, these custodial contracts had been divided
between two contractors, Centennial One, Inc., and Grace which performed
as subcontractors under the Small Business Administration (SBA) 8(a)
program. The contracting officer determined that the bonds were
necessary because the contractor would have extensive access to
government property and the contractor's nonperformance could have a
detrimental effect upon the entire installation. Also, the contracting
officer reasoned that since consolidation of the custodial contracts
resulted in a much larger contract, which was being solicited as a small
business set-aside instead of an 8(a) contract, bonding requirements
were necessary.
Grace argues that in light of its successful performance under the
8(a) program, the bond requirements are unreasonable because the Army
never required bonds in the past. Grace alleges that the decision to
require bonds was made in bad faith to eliminate Grace from the
competition. The Army responds that in the past, SBA, as the prime
contractor, determined whether to require bonds. Grace further argues
that the bond requirements violate the "full and open" competition
requirement set out in the Competition in Contracting Act of 1984, 41
U.S.C. Section 253, et seq. (West Supp. 1985), because it is a
responsible source, which by virtue of the bonding requirements, will
not be permitted to compete. Grace, in the alternative, contends that
given the size of the bonding requirements, the bid opening time should
have been extended.
While bonding requirements may in some circumstances restrict
competition, we have found that it may be necessary to secure
fulfillment of a contractor's obligations to the government. Harris
System International, Inc., B-219763, Oct. 18, 1985, 85-2 C.P.D.
Paragraph 423. The Federal Acquisition Regulation (FAR), 48 C.F.R.
Section 28.103 2(a), provides that performance bonds may be required
when government property is used by the contractor in performing the
contract. The FAR further provides that a payment bond is required only
when a performance bond is required and it is in the government's best
interest to do so. We have held that we will not disturb a contracting
officer's determination that bonding requirements are needed if the
decision is reasonable and made in good faith because under the
regulations the agency is accorded discretion to determine the need for
bonds. See Harris System International, Inc., supra; Renaissance
Exchange, Inc., B-216049, Nov. 14, 1984, 84-2 C.P.D. Paragraph 534. In
order for our Office to question the requirement, the protester must
establish that the determination to require bonds was unreasonable. Id.
The record shows that the contracting officer made the decision to
require bonds after determining that the contractor would have extensive
access to government property, that nonperformance would detrimentally
affect the operation of the installation, and that there was no history
of past performance by small businesses. In light of these
considerations, we cannot conclude that the contracting officer acted
unreasonably in deciding to require bidders to submit bid bonds. While
Grace attempts to rely on its successful past performance, as the Army
points out that performance occurred under the SBA 8(a) program. There
was no past history in connection with small business set-asides.
Accordingly, we find the contracting officer could reasonably conclude
that bonds were necessary. Grace has failed to show bad faith
establishing the bonding requirements.
Regarding Grace's contention that the bid opening should have been
extended, the Army advises that seven bidders submitted bids by the
scheduled bid opening, that competition was not affected by the bid
preparation time, and that the amendment extending bid opening to
November 13, 1985, in effect renders this aspect of the protest
academic. Since the decision whether to extend or not to extend bid
opening is within the discretion of the contracting officer and we have
held that an amendment of a solicitation which allowed 14 days for
transmittal, consideration and return was reasonable, we do not find
that the contracting officer abused his discretion here. Spede Tool
Manufacturing Company, B-214622, Sept. 11, 1984, 84-2 C.P.D. Paragraph
282; Infinity Corporation, B-202508.3, July 17, 1981, 81-2 C.P.D.
Paragraph 45. Following the issuance of the additional amendments,
Grace had a month and a half before bid opening to secure the bonds.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220604 DATE: October 17, 1985
MATTER OF: Bender Shipbuilding & Repair Co., Inc.
DIGEST:
1. Allegation that a low bidder will be unable
to perform a contract in accordance with
the terms of the solicitation because the
bidder needs to subcontract with other
companies and lacks established credit
concerns the contracting officer's affirmative
determination of the bidder's responsibility
which will not be reviewed by GAO
except under limited circumstances which
have not been alleged.
2. Whether bidder ultimately performs as it
agreed to in its bid is a matter of contract
administration, which is the function
of the contracting agency and not subject
to review by GAO.
3. Allegation that a bidder on a small
business set-aside procurement does not
qualify as a small business because of
associations with other companies to perform
the contract concerns a determination
of small size qualification which is within
the exclusive jurisdiction of the Small
Business Administration and, therefore,
will not be considered by GAO.
Bender Shipbuilding & Repair Co., Inc. (Bender), protests the
proposed award of a contract to G. Marine Diesel of Florida Corp. (GMD)
under invitation for bids (IFB) No. N62381-85-B-0056, issued by the
Military Sealift Command, Department of the Navy, as a total small
business set-aside for the overhaul, drydock, and recertification of the
Navy ship APACHE. We dismiss the protest under the provisions of our
Bid Protest Regulations without securing a report from the Navy since
the protest, on its face, concerns issues that our Office will not
consider. 4 C.F.R. Sec. 21.3(f) (1985).
GMD submitted the two low bids for the work under the IFB. Bender
was the third low bidder. Bender states that GMD has proposed to
perform the work at two shipyards, Tracor Marine, Inc. (Tracor), in Fort
Lauderdale, and Norfolk Shipbuilding & Drydock Company (Norfolk) in
Norfolk, Virginia.
Bender contends that, if GMD's arrangements with these shipyards are
in the form of subcontracts, GMD will be unable to comply with the IFB
requirement that it perform at least 60 percent of the total work,
because of the alleged practice in the industry of having the shipyard
perform the vast majority of the work during drydocking. Alternatively,
Bender argues that if GMD's arrangements with Tracor and Norfolk are in
the form of some other type of af filiation, such as a joint venture,
then GMD would not qualify as a small business and would be ineligible
for award. Bender also contends that since GMD proposes to perform the
work at other facilities over which it has no control, GMD will be
unable to comply with the IFB requirements to drydock the ship within 48
hours after the ship arrives at GMD's yards. Finally, Bender contends
that GMD lacks established credit and may be financially unable to
perform the contract or to furnish performance and payment bonds.
While we have not reviewed GMD's bids, Bender does not allege that
GMD took exception to the drydocking or 60-percent requirements, or that
its bids otherwise were nonresponsive and thus unacceptable. Bender's
contentions that GMD will not be physically or financially able to
perform the contract in accordance with the terms of the IFB concern
GMD's responsibility. The contracting officer must make an affirmative
determination of the bidder's responsibility prior to awarding a
contract, and consideration of all aspects of the bidder's ability to
perform satisfactorily is part of this determination. Our Office will
review such an affirmative responsibility determination only under
limited circumstances not alleged here. 4 C.F.R. Sec. 21.3( f) (5);
J.D. Bertolini Industries, Ltd., B-219791, Aug. 19, 1985, 85-2 C.P.D. P
193. Further, whether GMD actually performs as promised and as
obligated by the government's acceptance of the bid is a matter of
contract administration, which is the function of the contracting agency
and not subject to review by our Office. 4 C.F.R. Sec.21.2(f)( 1).
Bender's allegation that GMD's affiliations may prevent it from
qualifying as a small business also is outside the purview of our
Office. The Small Business Administration, not our Office, has
exclusive authority under 15 U.S.C. Sec. 637(b) (1982) to determine
matters of small business size status for federal procurement purposes.
4 C.F.R. Sec. 21.3(f) (2); Siska Construction Co., Inc., B-217593, June
26, 1985, 85-1 C.P.D.P 724.
The protest is dismissed.
Robert M. Strong
Deputy Associate
General Counsel
FILE: B-220594.2
DATE: February 26, 1986
Dyer and Hennessey, Counsel for Central Mechanical Construction, Inc.
2800 Rockcreek Parkway, Suite 500
North Kansas City, Missouri 64117
Attention: Darcy V. Hennessey, Esq.
Gentlemen:
This is in reference to your letter to our Office dated January 16,
concerning our decision, Central Mechanical Construction, Inc.,
B-220594, Dec. 31, 1985, 85-2 C.P.D. Paragraph 730.
We denied Central's protest that the awardee's (N.G. Adair, Inc.) bid
was nonresponsive due to an apparent attempt to modify the bid on the
bid envelope; the United States Army Corps of Engineers did not act
improperly in making the award to Adair. We did state our view that the
contract should be in the amount of Adair's original bid rather than the
higher amount of the attempted modification. The Corps has advised our
Office by letter of January 22 (copy enclosed), however, that it will be
unable to follow our suggestion since award was made at the higher
amount just before the protest was filed, and that it cannot legally
reduce the price at this point.
Under the circumstances, we will take no further action in the
matter.
Sincerely yours,
Harry R. Van Cleve
General Counsel
Enclosure
FILE: B-220594 85-2 CPD 730
DATE: December 31, 1985
MATTER OF: Central Mechanical Construction, Inc.
BIDS - AMBIGUOUS - TWOCONFLICTING PRICES FOR SAME ITEM
1. A bid that is ambiguous as to price need not be rejected if it is
low under all reasonable interpretations.
AGENTS - OF PRIVATE PARTIES - AUTHORITY - CONTRACTS - SIGNATURES -
TIME FOR SUBMITTING EVIDENCE
2. Authority of agent to submit bid modification may be established
after bid opening.
BIDS - MODIFICATION - BEFORE BID OPENING - AMBIGUITY ALLEGATION
3. A modification increasing the low bid, but not to more than the
second low bid written on the envelope that contained the bid, should
not be considered where circumstances indicate that the bidder obtained
a possible advantage thereby, unless the bidder can establish that the
higher bid was intended; otherwise, the contract amount should be at
the lower price.
Central Mechanical Construction, Inc. (Central), protests award of a
contract to N.G. Adair, Inc., under United States Army Corps of
Engineers solicitation No. DACA41-85-B-0298, issued for the replacement
of heating and air-conditioning facilities at Fort Riley, Kansas.
Central contends that Adair's bid is ambiguous; that it improperly was
modified at bid opening; and that the agent who wrote the bid
modification did not have authority to do so. On these grounds, Central
asserts that Adair's bid should be rejected as nonresponsive and, as a
result, that the contract should be awarded to Central, the second low
bidder, along with costs and attorney's fees. In the alternative,
Central seeks bid preparation costs.
We do not agree that Adair's bid should be rejected as nonresponsive.
The bid modification, however, which increased the bid but still kept
it below Central's, should not be accepted.
Bid opening under the solicitation took place on September 25, 1985,
at 3 p.m. Shortly before that time, a clerk from the contracting office
relayed a message to Adair's representative, asking the representative
to call Adair's offices. Corps employees directed the representative to
a public telephone, and the representative later returned to the bid
opening room and submitted Adair's bid. According to both Central and
the contracting officer, after Adair's bid, the sixth out of seven bids,
was taken from the sealed envelope and read aloud as $1,622,000, Adair's
representative drew the officer's attention to the following statement
written in the corner of the envelope: "Add to our total bid for all
buildings $199,000. H.S. for N.G. Adair Inc." The contracting officer
added the $199,000 to Adair's bid of $1,622,000 and then went on to open
the seventh, and final bid. Adair's bid of $1,622,000 was low and
remained low even as modified to $1,821,000. Central bid $1,931,700.
The contracting officer reports that the bid opening office does not
normally examine bid envelopes and that, as a matter of office practice,
opens the envelopes, removes the contents, clips the contents together,
and hands them to the reader. Furthermore, the contracting officer
contends that the procedural irregularities surrounding Adair's bid
modification -- lack of signature and not enclosed in a sealed envelope
with solicitation number and address for bid submission on front -- are
minor and waivable, and that the bid is not ambiguous and speculates
that Adair's agent was instructed to modify the bid through the
telephone call that preceded bid opening.
Central first argues that Adair's bid must be rejected as ambiguous
because the writing on the envelope reasonably could be interpreted as
merely an internal note to parties within Adair, with the bid inside the
envelope already including the additional $199,000, as well as a
modification of the bid inside the envelope. However, even a bid that
is ambiguous, that is, subject to two reasonable interpretations, need
not be rejected if the bid is low under both. Ideker, Inc., B-194293,
May 25, 1979, 79-1 C.P.D. Paragraph 379.
Central also claims that the agent who signed Adair's modification
was not clearly authorized by Adair to do so. Evidence of the authority
of a bid signatory may be presented after bid opening, however, and it
is left for the contracting officer to determine the amount and weight
of evidence required. Dragon Services, Inc., B-208081, July 27, 1982,
82-2 C.P.D. Paragraph 86. The contracting officer in the present case
concluded, essentially, that verification of the modified bid price by
Adair's president, N. G. Adair, 1 day after bid opening sufficed to
establish the representative's authority to modify Adair's bid. We see
no basis to question that view.
Finally, Central contends that the unusual manner in which Adair's
modification was submitted should render the bid nonresponsive. In this
respect, bid modifications should be submitted in sealed envelopes
bearing the proper address, the solicitation number, the name and
address of the bidder, and the time specified for receipt. Federal
Acquisition Regulation (FAR), 48 C.F.R. Section 52.214-5 (1984).
Responsiveness concerns whether a bid constitutes an offer to
perform, without exception, the exact thing called upon in the
invitation. Vintage Services, Inc., B-190445, Jan. 11, 1978, 78-1 C.P.
D. Paragraph 25. Adair's bid complied with all the invitation's
material provisions and was responsive. See FAR, 48 C.F.R. Section
14.301.
Notwithstanding our finding that Adair's bid was responsive, we are
concerned with the Corps' decision to accept the bid at the modified
price, since we believe Adair's submission of its modification on the
outside corner of the bid envelope provided Adair a possible advantage
over other bidders. The writing was so inconspicuous in size and
location on the envelope that the contracting officer did not see the
writing until Adair's agent drew his attention to it after the bid was
opened and read aloud. At that time, five other bids had been read and
Adair thus knew all but one of the other bid prices. Had it suited
Adair's interest, that is, had there been a bid less than $199,000 more
than the bid in Adair's envelope, the firm's representative could have
kept silent to insure that the bid would have been low. Furthermore,
Adair could have effectively renounced the modification after the
opening by claiming that the agent lacked authority to modify; that the
undated writing was an Adair internal note; or that the modification
had already been incorporated into the bid price. The manner of the
modification thus afforded Adair an option it either could exercise or
refrain from exercising depending on its relative standing among other
bidders.
Under the circumstances and although Adair's bid was responsive as
discussed above, we believe the contract award amount should be
$1,622,000 unless Adair can prove that it initially intended to bid
$1,821,000. That proof should be pursued under the regulations
applicable to mistakes in bids, which permit upward correction of a low
bid where the bidder provides clear and convincing evidence establishing
the existence of both a mistake and the intended bid price. FAR, 48
C.F.R. Section 14.406.
Because we do not find for Central, its claims for protest costs,
attorney's fees and bid preparation costs are denied.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220593 86-1 CPD 96
DATE: January 28, 1986
MATTER OF: DSP Technology, Inc.
BIDS - INVITATION FOR BIDS - SPECIFICATIONS - MINIMUM NEEDS
REQUIREMENT - ADMINISTRATION DETERMINATION - REASONABLENESS
1. Specifications are not unduly restrictive of competition where
the agency presents a reasonable explanation of why the specifications
are necessary to meet its minimum needs and the protester fails to show
that the restrictions are clearly unreasonable.
CONTRACTS - PROTESTS - BASIS FOR PROTEST REQUIREMENT
2. The General Accounting Office has no legal basis to question the
use of specifications that allegedly are not restrictive enough to meet
an agency's needs.
BIDS - PREPARATION - COSTS - NONCOMPENSABLE
3. Bid preparation costs and the cost of pursuing a protest will not
be granted where the General Accounting Office finds no violation of
applicable statutes or regulations.
DSP Technology, Inc. protests the terms of invitation for bids (IFB)
No. DNA002-85-B-0121, issued September 4, 1985 by the Defense Nuclear
Agency (DNA). The protester alleges that the specifications are unduly
restrictive of competition.
We deny the protest.
The IFB solicited bids for five data recorder systems with an option
for five additional units. This equipment is to be used for recording
high explosive test results at White Sands Missile Range, New Mexico.
DSP contends that DNA's specifications can only be met by a system
produced by Pacific Instruments, Inc., citing 25 requirements that it
believes are based upon the Pacific Instruments system and are not
justified by the actual needs of the agency. For example, DSP complains
that it is unnecessary for the IFB to specify (1) the "protocol" or
exact manner in which the system's controller is to communicate with its
recorder; (2) that all connectors must be mounted on the rear of the
rack enclosure; and (3) that the recorder enclosures must be 7 inches
in height. These requirements are all present in the Pacific
Instruments system.
When a protester challenges specifications as unduly restrictive of
competition, the procuring agency bears the burden of presenting prima
facie support for its position that the restrictions are necessary to
meet its actual minimum needs. This requirement reflects the agency's
obligation to create specifications that permit full and open
competition to the extent consistent with the agency's actual needs. 10
U.S.C.A. Section 2305(a)(1) (West Supp. 1985). The determination of the
government's minimum needs and the best method of accommodating those
needs are primarily matters within the contracting agency's discretion.
Bataco Industries, Inc., B-212847, Feb. 13, 1984, 84-1 CPD Paragraph
179. Consequently, once the agency establishes support for the
challenged specifications, the burden shifts to the protester to show
that the specifications in dispute are clearly unreasonable. Sunbelt
Industries, Inc., B-214414.2, Jan. 29, 1985, 85-1 CPD Paragraph 113.
Specifications based upon a particular product are not improper in
and of themselves, and an argument that a specification was "written
around" design features of a competitor's product is not itself a valid
basis for protest where the agency establishes that the specification is
reasonably related to its minimum needs. Amray, Inc., B-208308, Jan.
17, 1983, 83-1 CPD Paragraph 43. Nor is a specification improper merely
because a potential bidder cannot meet its requirements.
In response to DSP's protest, the agency states that in 1984 it
sought to replace its analog tape recording equipment by issuing a
solicitation with general specifications for digital recording
equipment. DNA purchased seven systems from the only bidder, Pacific
Instruments. (According to the agency report, the protester was among
the 21 prospective sources solicited, but it did not submit a bid.) Now,
the agency seeks additional equipment that will be compatible with the
Pacific Instruments systems.
DNA states that, even though admittedly more restrictive than the
specifications used in 1984, the current specifications accurately
reflect its legitimate, minimum needs. For example, DNA argues that the
required protocol for communication between the controller and recorder
is necessary to ensure capatibility between old and new equipment, and
DNA provides examples of different protocols that would present
communication problems. Regarding the requirement that all connectors
be mounted on the rear of the rack enclosure, DNA maintains that
experience at the test site has proven that rear mounting provides the
most efficient arrangement for pre-cabling the instruments, which in
turn reduces costs, eliminates wiring mistakes, and aids maintenance and
access. Also, the agency argues that requiring recorder enclosures to
be 7 inches in height insures mechanical and physical compatibility
between the new and old systems, so that a unit may be removed for
repair and replaced without the necessity for a substantial
rearrangement of equipment.
Agencies may restrict competition where it can be shown that
compatibility with existing government equipment is required. Sperry
Univac, B-212914, Sept. 5, 1984, 84-2 CPD Paragraph 255. In our
opinion, the agency has made such a showing in this case.
DSP interprets the agency's statements that the specifications were
intended to insure compatibility with existing equipment and
standardization to mean that DNA intended to require complete
interchangeability. The protester argues that the IFB did not indicate
this intention and that the specifications included insufficient
mechanical, physical, and dimensional characteristics of the existing
Pacific Instruments equipment to permit other firms to provide a system
that will be fully compatible and interchangeable. In the protester's
opinion, DNA should have either prepared such specifications or
conducted a sole source procurement with Pacific Instruments.
We find no evidence in the procurement record filed with our Office
that DNA intended to impose compatibility requirements in addition to
those stated in the specifications. As noted above, agencies are
required to develop specifications to permit full and open competition,
and we find no merit in an argument that the agency should have drafted
more restrictive specifications in order to meet the protester's
definition of the agency's minimum needs. Here, DNA drafted
specifications that it believes will result in compatibility sufficient
to meet the agency's needs, and we have no legal basis to question them.
See Cincinnati Bell Telephone Co., 62 Comp. Gen. 124 (1983), 83-1 CPD
Paragraph 41; Drexel Heritage Furnishings, Inc., B-213169, Dec. 14,
1983, 83-2 CPD Paragraph 686.
Since we have found no violation of applicable statutes or
regulations, the protester is not entitled to its bid preparation costs
or the cost of pursuing a protest with our Office. Feinstein
Construction, Inc., B-218317, June 6, 1985, 85-1 CPD Paragraph 648.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220591 85-2 CPD 696
DATE: December 20, 1985
MATTER OF: Chesapeake and Potomac Telephone Company
BIDS - AMBIGUOS - NONRESPONSIVE BID
Where specifications require that duct be cleaned, bid that states
price is based on the ducts being cleared is ambiguous and should be
rejected as nonresponsive.
The Chesapeake and Potomac Telephone Company (C&P) protests the
rejection of its bid under invitation for bids (IFB) No.
DAMD17-85-B0041, issued by the Department of the Army for installation
of an underground telephone cable system at Fort Detrick, Maryland. C&
P protests the Army's rejection of its low bid as nonresponsive. We
deny the protest.
C&P's bid was initially rejected because it failed to acknowledge
amendment No. 0001 to the IFB. This amendment required the removal of
some existing cable. C&P contends that the amendment was not material
and therefore its failure to acknowledge the amendment should be waived
as a minor informality.
In its report to our Office concerning the protest, the Army has
taken the position that C&P's bid was nonresponsive not only for its
failure to acknowledge the amendment, but also because C&P qualified its
bid by stating its price "is based on the ducts being cleared." The IFB
specifications in section 3.8.18 instructed that: "Prior to pulling in
the above-mentioned underground cable, rod and clean the duct specified
for use in accordance with drawing . . . ." It is clear that the
contractor is required to clear the duct before installing the
underground telephone cable.
C&P argues that the language it used merely documented information
provided to C&P during the site inspection by the Army representative,
and was intended to clarify C&P's understanding of bid requirements and
not to impose additional conditions on the services requested. It is
not clear what C&P means by this argument. C&P may be contending that
the language was meant as an acknowledgment of the work encompassed in
amendment No. 0001 to the IFB. The language C&P used, however, is far
from a clear statement of acknowledgment. While it is indeed possible
that C&P was only intending to acknowledge the amendment, it is also
possible that the broad language used was intended to deal with more
than the amendment itself. This is so because the specifications
required clearning more than 5000 feet of duct, while the amendment
dealt only with removing existing cable from a 750 foot length of duct.
Also, clearing the duct includes more tasks than removing existing
cable, e.g., removing obstructions of the duct caused by the
infiltration of dirt and pushing a rod through the duct. Moreover, C&
Pitself does not explicitly indicate that it was aware of the exact
contents of amendment 0001 when it submitted its bid. Thus, we are not
inclined to read C&P's language as simply acknowledging the amendment.
Consequently, we must consider what other effect C&P's language had on
its bid.
To be responsive, a bid as submitted must represent an unequivocal
offer to meet the IFB specifications. Sabreliner Corp., 64 Comp. Gen.
325 (1985), 85-1 C.P.D. Paragraph 280. If the bid is subject to more
than one reasonable interpretation, under one of which the bid is
nonresponsive, the bid must be rejected as nonresponsive. Solenergy
Corp., B-208111.2, Oct. 8, 1982, 82-2 C.P.D. Paragraph 318.
It is apparent that the duct clearing requirement is a material item
of work and that the extent of clearing needed is a contingency item for
which a contractor is supposed to assume the risk under the contract.
In this case, although C&P's statement in the bid schedule could mean
that C&P will clear the ducts and the bid price included this work, it
could also mean that the ducts must be cleared before C& Pbegins work
and that the bid price does not include clearing the ducts. This would
remove a potential contingency from C&P's bid price which other bidders
included in their bid prices. Under this interpretation, C&P's bid
clearly would be nonresponsive. Since C&P's bid is subject to two
interpretations, one of which would make the bid nonresponsive, we
concur that its bid was nonresponsive.
In light of our conclusion that the statement in C&P's bid makes the
bid nonresponsive, we need not consider C&P's failure to acknowledge
amendment No. 0001. The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220590 86-1 CPD 47
DATE: January 15, 1986
MATTER OF: TriCom, Inc.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTOR
1. Protest challenging agency's evaluation of protester's proposal
for leasing automatic data processing equipment is timely where filed
within 10 working days after protester learned that it would not receive
award; protest did not have to be filed before date for submission of
proposals because it concerns agency's evaluation method, not evaluation
factors themselves.
ADVERTISING - COMMERCE BUSINESS DAILY - AUTOMATIC DATA PROCESSING
EQUIPEMENT
2. Synopsis in Commerce Business Daily required before placing order
under nonmandatory schedule contract for automatic data processing
equipment is intended to test the market to determine whether there are
nonschedule vendors interested in competing for the requirement at
prices that would make competition practicable. Synopsis is not a formal
solicitation document and need not describe the evaluation factors to be
used by the agency in the same detail as an actual solicitation.
CONTRACTS - FEDERAL SUPPLY SCHEDULE - NONMANDATORY ITEMS -
REQUIREMENTS FOR USE
3. Agency decision to procure automatic data processing equipment
under nonmandatory schedule contract is reasonable where proposal from
protester, a nonschedule vendor, does not offer dollar credits toward
upgrading existing equipment, a feature critical to meeting agency's
needs at the lowest cost, and provides significantly lower level of
support services than schedule vendor.
CONTRACTS - PROTESTS - ALLEGATIONS - BIAS - UNSUBSTANTIATED
4. Protester does not meet its burden of presenting virtually
irrefutable proof that contracting officials had a specific and
malicious intent to harm the protester where protester's contention that
they acted in bad faith is completely unsubstantiated.
TriCom, Inc. protests the decision by the Export-Import Bank of the
United States to place an order with IBM Corporation to lease with an
option to purchase an IBM model 4341-M12 central processing unit (CPU)
and an IBM 3370-A2 disk drive under General Services Administration
(GSA) schedule contract No. GS00K85-01S-5911 for automatic data
processing (ADP) equipment. TriCom contends that its proposal should
not have been rejected by the Bank since it offered the equipment and
related services at a lower price than IBM. We deny the protest.
As required by the Federal Information Resources Management
Regulation (FIRMR), 41 C.F.R. Section 201-32.206(f) (1985), the Bank
published a notice in the Commerce Business Daily (CBD) on May 31, 1985,
announcing its intent to place a delivery order with IBM under its
nonmandatory ADP schedule contract and inviting other potential offerors
to submit proposals for the equipment. Because the disk drive model to
be ordered was incorrectly listed in the May 31 synopsis, the Bank
published a second notice in the CBD on August 21, correctly listing the
Bank's requirement for conversion of an IBM model 4341-L11 CPU to a
4341-M12 CPU, and one IBM model 3370-A2 disk drive, and further
detailing the Bank's needs. The August 21 synopsis stated that the
order would be placed with IBM under the federal lease to ownership
plan, an arrangement under which the procuring agency obtains dollar
credits toward upgrading existing equipment based on amounts already
paid by the agency for leasing the existing equipment. The synopsis
also stated that the order would be on an all or none basis and that
related technical support would be furnished by IBM, including marketing
presentations, capacity and other planning studies, installation, and
evaluation and other advisory studies. The synopsis indicated that
proposals for equivalent items were to be submitted to the Bank by
September 5, but that no contract award would be made based on proposals
submitted in response to the notice. See FIRMR, 41 C.F.R. Section
201-32.206(f)(2)(iv).
By letter dated August 29, TriCom submitted a proposal for lease of
the model 4341-M12 CPU only. /1/ For the 30-month lease term sought by
the Bank, TriCom offered a monthly rate of $5,350; IBM's schedule rate
for the same term was $10,800. With regard to technical support
services, TriCom's proposal stated that "(f)ull marketing and planning
services are available from TriCom Inc. at no additional charge." TriCom
also stated that "(s)hould the Bank elect to purchase the equipment
during the term of the lease, credits will be accumulated on monies
previously paid."
On September 10, the Bank's ADP equipment review panel evaluated
TriCom's proposal. Based on a comparison of the TriCom proposal with
the terms of an order placed with IBM under the GSA schedule contract,
the panel concluded that the Bank's needs would be best served by
placing an order with IBM. According to the Bank, the principal grounds
for its decision were the benefits to the Bank of the dollar credits
toward equipment upgrade available under an IBM order, as well as the
substantial value to the Bank of IBM's technical support services, which
were not matched by TriCom. Specifically, the Bank states that the
upgrade credits provision is beneficial because it minimizes the cost of
upgrading existing equipment as either ADP technology or the Bank's
needs change. In fact, the Bank anticipates upgrading the model
4341-M12 CPU prior to expiration of the 30-month lease, in order to meet
its plan to expand its management information system. In comparison,
under TriCom's proposal, which did not offer upgrade credits, the Bank
would be required to pay TriCom the entire amount due under the lease
and then resell the existing equipment before it could acquire the
upgraded equipment, at a considerably higher total cost than under the
upgrade credits arrangement with IBM.
With regard to the technical support services, the Bank calculated
the value of the services offered by IBM as equal to $100,900 annually,
or approximately $8,400 a month. The more limited services offered by
TriCom were valued at $1,716 a month. By offsetting the estimated value
of IBM's support services ($8,400) against its price for the monthly
lease ($10,800), the Bank estimated the net cost of placing an order
with IBM would be $2,400 a month; applying the same formula to TriCom,
$3,634 a month. Thus, despite IBM's higher lease price, the Bank
concluded that placing an order with IBM would result in an overall cost
saving. TriCom argues that it offered a lower-priced proposal than IBM,
and that the Bank's comparison of the two proposals was improper with
regard to the upgrade credits provision and the value of the support
services.
The Bank first contends that the protest is untimely because it
involves a challenge to the evaluation factors listed in the CBD
synopsis and therefore should have been filed prior to September 5, the
date for submission of proposals from nonschedule vendors. See Bid
Protest Regulations, 4 C.F.R. Section 21.2(a)(1) (1985). We disagree.
As discussed further below, the protester's arguments concern the manner
in which its proposal was evaluated by the Bank, not the evaluation
factors themselves. Under section 21.2(a)(2) of our regulations, 4
C.F.R. Section 21.2(a)(2), the protest, thus, had to be filed within 10
working days after the protester knew or should have known the basis of
its protest, in this case, when TriCom was notified on September 16 that
the Bank had ordered the equipment from IBM. Since the protest was filed
with our Office on September 27, the ninth working day after TriCom was
notified, the protest is timely.
With regard to the Bank's evaluation of its proposal, TriCom
initially argues that, contrary to the Bank's conclusion, its proposal
did provide for upgrade credits. In its comments on the Bank's report,
TriCom for the first time elaborates on this contention, stating that
the equipment it offers would be leased under an arrangement with
another firm, First Municipal Leasing, which has a schedule contract
with GSA. We find this argument to be without merit. TriCom's proposal
itself provided only for credits toward the purchase of the equipment
being leased; it does not refer to upgrade credits or to any
arrangement with First Municipal Leasing. In any event, the Bank states
that it has been advised by GSA that no schedule contract exists with
First Municipal Leasing. Thus, in our view, it was reasonable for the
Bank to conclude that TriCom did not offer the upgrade credits feature.
Further, since TriCom does not dispute the Bank's position that upgrade
credits are important for meeting the Bank's needs at the lowest cost,
there is no basis on which to disturb the Bank's conclusion that placing
an order with IBM, which offered upgrade credits, would result in
overall cost savings to the Bank.
TriCom next argues that it would have offered the same technical
support services as IBM did, if the Bank's requirement for the services
had been included in the CBD synopsis. The protester also contends that
the synopsis should have specified the importance of the support
services relative to price. As noted above, the synopsis did list the
support services to be provided by IBM. It is also clear that TriCom
was aware of the requirement, since its proposal stated that "full
marketing and planning services" would be available at no charge.
Further, we think that the protester was adequately informed by the
synopsis that there would be a detailed evaluation of support services.
As explained in the FIRMR, the CBD synopsis which precedes placing an
order under an ADP schedule contract is not a formal solicitation
document; rather, it is a device to test the ADP market to determine
whether there are nonschedule vendors interested in competing for the
requirement at prices that would make competition practicable. If
evaluation of the responses indicates that a competitive acquisition
would be more advantageous to the government, a formal solicitation
normally would be issued, and all vendors, including schedule vendors,
invited to compete. See FIRMR, 41 C.F.R. Section 201-32.206(f)(2)(
iv),(g); International Systems Marketing, Inc., B-215174, Aug. 14,
1985, 85-2 CPD Paragraph 166. Thus, in our view, the synopsis need not
describe the evaluation factors to be used by the agency in the detail
required in an actual solicitation; rather, the regulations require
that the synopsis list general information regarding the equipment
sought, including quantities, make and model, and support requirements.
See FIRMR, 41 C.F.R. Section 201-32.206(f)(2); CMI Corp., B-210154,
Sept. 23, 1983, 83-2 CPD Paragraph 364.
Finally, before placing an order under an ADP schedule contract, the
Bank must find that the schedule items provide the lowest overall cost
alternative, considering price and other factors, including contractor
support. See FIRMR, 41 C.F.R. Section 201-2.001 (definition of "lowest
overall cost"), section 201-32.206(g)(2)(i). Here, TriCom challenges
the Bank's valuation of IBM's support services, questioning their
estimated value relative to the lease price. According to TriCom, IBM's
own estimate of the value of its services (approximately $500,000
annually) is inflated; TriCom states, without elaboration, that the
services are worth no more than 30 percent of the estimate. /2/
TriCom's estimate of the value of the services is based solely on a
conversation with an unnamed computer software support firm.
While recognizing that determining the value of IBM's support
services must be based on estimates, the Bank reasonably attempted to
quantify the value of the services by relying on historical data
regarding IBM services to the Bank. The Bank did not simply accept
IBM's own estimate of the value of the services; rather, the Bank
performed its own calculation of the cost of replacing the services, and
ultimately estimated their value at $100.900 annually, an amount
significantly lower than the IBM estimate of $500,000 annually. As
noted above, the only support TriCom offered for its position that the
Bank's estimate was unreasonable is its conversation with another
computer firm about which no details are provided. As a result, we see
no basis on which to challenge the Bank's method of estimating the value
of the IBM support services.
Finally, TriCom contends without further explanation that Bank
officials acted in bad faith with regard to TriCom and were motivated
solely by their interest in continuing the lease with IBM. This
argument is without merit. As discussed above, the record reasonably
supports the Bank's conclusion that placing its order with IBM would
result in the lowest overall cost. TriCom's allegation of bad faith is
completely unsubstantiated; as a result, TriCom has failed to meet its
burden of presenting virtually irrefutable proof that the contracting
officials, who are presumed to act in good faith, had a specific and
malicious intent to harm TriCom. See Business Communications Systems,
Inc., B-218619, July 29, 1985, 85-2 CPD Paragraph 103.
The protest is denied.
Harry R. Van Cleve
General Counsel
(1) Although the synopsis indicated that the order would be placed on
an all or none basis, the protester and the Bank agree that Bank
officials told TriCom that its proposal for the CPU alone would be fully
considered and would not be regarded as not meeting the Bank's
requirements solely for failure to offer the disk drive as well. While
TriCom argues that the Bank subsequently rejected its proposal because
it offered only the CPU, the record of the Bank's evaluation of TriCom's
proposal supports the Bank's position that its rejection of the proposal
was not based on TriCom's failure to offer both pieces of equipment.
(2) It is not clear from TriCom's submission whether it is contending
that the services are worth 30 percent of the IBM estimate of $500,000
annually or 30 percent of the Bank's estimate of $100,900 annually.
FILE: B-220589 86-1 CPD 108
DATE: January 30, 1986
MATTER OF: University of Dayton Research Institute
CONTRACTS - NEGOTIATION - SOLE-SOURCE BASIS - DETERMINATION NOT TO
USE - SCOPE OF GAO REVIEW
1. GAO will not review protest that the government should procure an
item from a particular firm on a sole-source basis even where the
protester claims its proprietary position makes it the only firm
qualified to do the work.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT IN REQUEST
FOR BEST AND FINAL OFFERS
2. Protest against agency's call for second round of best and final
offers raised after the last date for receipt of offers is untimely.
GENERAL ACCOUNTING OFFICE - JURISDICTION - CPATENT INFRINGEMENT
3. Basis for protest that awardee may have infringed on protester's
patents is not appropriate for review by GAO.
The University of Dayton Research Institute (UDRI) protests the award
of a contract to Alloy Surfaces, Inc. (Alloy), under request for
proposals (RFP) No. N00189-85-R-0016, issued by the Naval Air Rework
Facility (NARF), Cherry Point, North Carolina. The RFP was issued for a
braze cleaning system to be used for cleaning aluminum and titanium
alloys by eliminating surface oxides.
The protest is dismissed in part and denied in part.
UDRI contends that since Alloy did not respond to the initial RFP by
the closing date, and since NARF improperly reopened the solicitation,
and Alloy the submitted a proposal, Alloy was not eligible for award.
UDRI also argues that prior to the issuance of the RFP it submitted an
unsolicited and unique proposal to NARF for a fluorocarbon cleaning
system and NARF should have awarded UDRI a contract based on that
proposal because it was based on a unique and innovative idea. In this
connection, UDRI alleges that the RFP's specifications were based on the
proprietary information submitted by UDRI. UDRI also protests NARF's
request for a second round of best and final offers as being unnecessary
and only for Alloy's convenience and that NARF improperly evaluated its
proposal by adding a $300,000 license fee to its fixed price of
$642,823, for a total of $942,823, thus making its price higher than
Alloy's $810,000 offer. Finally, UDRI alleges that Alloy may be
infringing on UDRI's patents.
UDRI submitted an unsolicited proposal for a braze cleaning system to
NARF, which UDRI states was based on four UDRI patents, on August 29,
1983. NARF issued this RFP on October 26, 1984, with a closing date of
November 26. UDRI was the only offeror to have submitted its proposal
by the original closing date. NARF states that during a preprosal
conference conducted on November 9, certain questions were raised at the
conclusion of the conference concerning the required location for gas
bottles and delivery terms which were not fully addressed in the RFP and
participants were advised that a written amendment to the solicitation
would be issued. NARF states that the amendment was not issued prior to
the closing date and the contracting officer inadvertently failed to
extend the closing date. However, in December, amendment 0002 reopened
the solicitation and was issued to all of the offerors originally
solicited.
Under the circumstances, we do not believe NARF acted improperly in
setting a new proposal receipt date to allow offerors, including Alloy,
to propose on the changes in the amendment. In any case, UDRI should
have protested this matter at that time in order to be timely and for
consideration under our Bid Protest Regulations. 4 C.F.R. Section
21.2(a)(2) (1985).
UDRI's contention that it should have been awarded a contract based
on its initial, unsolicited proposal is essentially an argument that
NARF should have restricted competition and awarded a sole-source
contract. However, our Office does not consider it appropriate to
review a protest that an agency should procure an item from a particular
firm on a sole-source basis. Ingersoll-Rand, B-205792, Jan. 8, 1982,
82-1 C.P.D. Paragraph 26. This is so even where the protester claims
that its proprietary position makes it the only firm qualified to do the
work. Marker-Modell Associates, B-215049, May 25, 1984, 84-1 C.P.D.
Paragraph 576.
UDRI next contends that NARF required it to include a licensing
agreement with its offer. In response to this requirement, UDRI
submitted a licensing agreement at a cost to the government of $300,000
in addition to UDRI's fixed price of $642,823. UDRI states that since
it was the government that insisted that it submit the licensing
agreement, the government, in effect, caused UDRI's total evaluated
offer of $942,823 to be higher than Alloy's offer of $810,000. UDRI
states that its offer should have been evaluated instead at $642,823,
making it low.
NARF denies that it insisted upon a licensing agreement and the
imposition of a fee. NARF states that UDRI insisted that its processes
were patented and a license would have to be executed.
The solicitation itself did not require a licensing agreement. UDRI
was requested, during negotiations and in reference to the paragraph
entitled "Cost of Technology," of UDRI's cost proposal, to "please
provide a copy of the licensing agreement, and the cost for the
technology transfer if the Government will be charged for this."
(Underscoring supplied.) The record before us shows therefore that UDRI
was not required to insert a license fee and that the fee would be added
only if UDRI chose to do so. Therefore, we find that NARF properly
evaluated UDRI's price by combining the license fee as a cost to the
government with its basic price. This basis of protest is denied.
UDRI also alleges that Alloy was awarded the contract even though it
asserted that the use of data provided to the government by its
unsolicited proposal was restricted. Accordingly, UDRI contends that
Alloy should also have been assessed a licensing fee. Alloy, however,
was only asserting that its proprietary information should not be
released to UDRI in response to UDRI's Freedom of Information Act
request. Alloy did not assert, as UDRI did, that its proprietary
information required that the government pay a licensing fee. This
basis of protest is denied.
UDRI protests NARF's holding a second round of best and final offers.
UDRI was solicited for a second round of best and final offers by
letter dated September 5, 1985. That notice stated that "Offerors may
submit revised proposals which will be considered in the evaluation of
award, provided it is received no later that 12:00 p.m. September 11,
1985." UDRI did not protest this request for a second round of best and
final offers until well after the date for receipt of the final offers.
In procurements where proposals are requested, alleged improprieties
which do not exist in the initial solicitation, but which are
subsequently incorporated into the solicitation must be protested not
later than the next closing date for receipt of proposals following the
incorporation. 4 C.F.R. Section 21.2(a)(1). Accordingly, this basis of
protest is untimely and is dismissed. Sony Corporation of America,
With regard to UDRI's allegation that Alloy may be infringing its
patents, this serves no basis for objection to award to Alloy since
patent infrigements are not encompassed within our bid protest function.
Presto Lock, Inc., B-218766, Aug. 16, 1985, 85-2 C.P.D. Paragraph 183.
The protest is dismissed in part and denied in part.
Harry R. Van Cleve
General Counsel
FILE: B-220584 86-1 CPD 38
DATE: January 14, 1986
MATTER OF: Sixth and Virginia Properties
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES - FILING
PROTEST WITH AGENCY
1. Protest will not be dismissed for failure to provide the
contracting officer a copy of the protest 1 day after filing as required
by GAO Bid Protest Regulations, since the 3-day delay in the agency's
receipt of the protest did not delay proceedings.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
ADMINISTRATIVE DISCRETION
2. Since contracting officials enjoy a reasonable degree of
discretion in the evaluation of proposals, where solicitation for offers
for the lease of office space required space in a "quality building,"
determination by contracting officials that the architectural structure
of building does not impair its utility for the purpose intended will
not be disturbed by GAO in the absence of a showing that the agency
determination was arbitrary or unreasonable.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT IN REQUEST
FOR BEST AND FINAL OFFERS
3. Protest filed after closing date for receipt of best and final
offers, alleging, in essence, that offers were improperly evaluated is
untimely and will not be considered on the merits, since method of
evaluation used was as stated in the solicitation and, therefore,
protest involves alleged solicitation defect which was apparent prior to
closing.
Sixth and Virginia Properties (Westin), owner of the Westin Building
in Seattle, Washington, protests the rejection of its offer and the
award for the lease of office space to First and King Building
Associates (King Associates), owner of the 83 King Street Building. The
award was made under solicitation for offers (SFO) No. 10PEL-85-08
issued by the General Services Administration (GSA) for office space to
occupied by the National Park Service (NPS). Westin contends that the
awardee's offer was nonresponsive to the solicitation and that the
agency's price evaluation method was deficient. We deny the protest in
part and dismiss it in part.
GSA contends initially that the protest should be dismissed on the
procedural basis that Westin failed to provide a copy of the protest to
the contracting officer within 1-working day after the protest was
received in the General Accounting Office, as required by our Bid
Protest Regulations. 4 C.F.R. Section 21.1(d) (1985).
Westin's protest was received in our Office on September 26, 1985.
GSA states that the contracting officer did not receive a copy of the
protest until October 1, 1985, which was 3 working days later, and that
exhibits accompanying the protest to our Office (most of which consisted
of prior correspondence between GSA and NPS) did not reach the
contracting officer until 5 working days later. We note, however, that
GSA's headquarters office and the regional office involved received
telephonic notice of the protest the day after it was filed in our
Office, and that the contracting officer's statement in full response to
the protest was dated October 1, the same day he received his copy of
the protest. Furthermore, the administrative report on the protest was
filed 5 working days prior to the date it was due. The essence and
purpose of the requirement for filing a copy of the protest with the
contracting agency therefore was otherwise effected. Since the delay in
the agency's receipt of the protest and accompanying exhibits did not
result in a delay of the protest proceedings and no evidence has been
presented by the agency to show that it was prejudiced by late receipt
of the protest documents, the protest will not be dismissed under 4
C.F.R. Section 21.3(f). Container Products Corp., B-218556, June 26,
1985, 64 Comp. Gen. . . . , 85-1 C.P.D. Paragraph 727; Hewitt, Inc.,
B-219001, Aug. 20, 1985, 85-2 C.P.D. Paragraph 200.
In September 1984, while the NPS was located in the Westin Building,
the NPS expressed a need for an automated data processing (ADP) room,
for which the Westin Building was not equipped. In view of the
scheduled July 1986 expiration of the Westin lease then in effect, and
the expense required to equip the area then occupied by the agency with
an ADP room, GSA determined that it would be in the government's best
interest to compete a new NPS lease which would include its requirement
for an ADP facility.
In November 1984, GSA advertised the requirement for a 5-year lease
of 25,600 to 28,300 square feet of office space. In response, eight
potential sites were listed and approved by NPS during a market survey
conducted in February 1985. The SFO was issued in March, with receipt
of best and final offers requested by April 1985. After the issuance of
several amendments and an addendum stipulating that the government would
accept occupancy prior to the expiration of the NPS lease then in
effect, receipt of best and final offers was extended until September 5.
On September 9, 1985, the lease was awarded to the low offeror, King
Associates, at its evaluated price of $13.45 per square foot ($344,320
per annum), and Westin, whose evaluated price was the next low offer at
$16.53 per square foot ($423,168 per annum) protested the award.
In its protest, Westin contends that the building offered by the
awardee does not meet the solicitation requirements that the space be
located in a "quality building" and ". . . have a potential for
efficient layout . . .." The protester argues that 83 King Street is not
a quality building because it was originally built as a warehouse in
1904, and although it was placed on the List of Historic Structures in
1982 and renovated to meet modern safety requirements, each of its
floors is characterized by 2-foot square vertical columns on 12-foot by
19-foot centers -- a total of approximately 77 columns per floor. The
protester also contends that because of this aspect of the building's
structure, it has no potential for an efficient layout. The protester
further suggests that 83 King Street is not a quality building because
of the presence of certain steel cross braces which were installed to
meet seismic safety standards. The contracting officer states that
prior to its issuance of the solicitation, GSA personnel inspected the
architectural design and layout of the space offered at the 83 King
Street Building and determined that the columns and bracing would not
significantly, if at all, impair the efficiency or productivity of the
NPS.
The evaluation of proposals is primarily within the discretion of the
contracting agency, not our Office. Since the agency must bear the
burden of problems resulting from a defective evaluation, our review is
limited to an examination of whether the agency's evaluation was fair
and reasonable and consistent with stated evaluation criteria. TRS
Design & Consulting Services, B-218668, Aug. 14, 1985, 85-2 C.P.D.
Paragraph 168; The City of Spartanburg, B-214161, Nov. 2, 1984, 84-2
C.P.D. Paragraph 487.
We note that although the solicitation stipulates that the space
offered must be located in a "quality building of sound and substantial
construction," the solicitation does not define that requirement in
terms of the architectural features of which the protester complains.
The protester has not shown that these features render the building
inadequate or unsuitable for use by the NPS, nor has the protester shown
that GSA's evaluation of the awardee's proposal was unreasonable. Since
the protester's allegations are not, alone, sufficient to meet its
burden of proof that GSA's determination was unreasonable, the protest
is denied on this point. TRS Design & Consulting Services, B-218668,
supra, 85-2 C.P.D. Paragraph 168 at 7.
The protester also states that the 83 King Street Building is located
in a high crime area of Seattle and is bordered on the west side by "an
elevated double deck expressway" 60 feet from the building. Westin
further states that the noise and distraction from the expressway
traffic and the effect upon employee morale of the relocation to a
"relatively unsafe area of the city" will result in a 15- to 20-percent
loss in productivity. On the basis of these contentions, the protester
challenges GSA's price evaluation based solely upon the rental cost.
The protester also concludes that since GSA's projection of savings in
the amount of approximately $70,000 per year over the life of the lease
represents 2.5 percent of the NPS employee's payroll, the award to King
Street Associates is not cost effective.
This argument is essentially a challenge to the manner in which
prices were evaluated, which was set forth in the solicitation, and, as
such, constitutes an allegation of a defect in the solicitation that was
apparent before the closing date for receipt of proposals. Our Bid
Protest Regulations require that protests based upon alleged
improprieties in a solicitation must be filed prior to the closing date.
4 C.F.R. Section 21.2(a)(1). Since Westin's allegations concerning the
method of price evaluation was raised in its protest which was filed
after award was made, they are untimely and will not be considered on
the merits. William A. Stiles, Jr.; Piazza Construction, Inc.,
B-215922; B-215922.2, Dec. 12, 1984, 84-2 C.P.D. Paragraph 658;
affirmed in William A. Stiles, III -- Reconsideration, B-215922.3, Feb.
19, 1985, 85-1 C.P.D. Paragraph 208; see also, Rapid American Corp.,
B-214664, Dec. 26, 1984, 84-2 C.P.D. Section 696.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
FILE: B-220582.3 86-1 CPD 281 DATE: March 21, 1986
MATTER OF: Canon U.S.A., Inc.--Request for Reconsideration
DIGEST:
PURCHASES - PURCHASE ORDERS - FEDERAL SUPPLY SCHEDULE - PURCHASE
PROPRIETY
Prior decision is affirmed where the protester has not shown in
its request for reconsideration that GAO erred in concluding that
an agency's award of a purchase order for six microfilm
reader/printers to other than the low priced supplier under a
Federal Supply Schedule contract on the basis of greater
maintenance availability was a legally sufficient justification
for the award and did not constitute an improper "fracturing" of
the agency's real needs.
Canon U.S.A., Inc., requests reconsideration of our decision in
National Micrographics Systems, Inc; Canon U.S.A., Inc., B-220582 et
al., Jan. 9, 1986, 86-1 C.P.D. P . In that decision, we concluded that a
contracting agency's determination to purchase six microfilm reader/
printers from other than the low priced supplier under a mandatory,
multiple-award Federal Supply Schedule (FSS) contract was supported by a
sufficient legal justification in accordance with the applicable
regulations. We also concluded that the protesters had not prevailed in
their assertion that the agency's acquisition constituted an improper
"fracturing" of a much larger requirement with the intent to evade the
maximum order limitation stipulated in the FSS contract. Canon urges
that our prior decision is legally erroneous on several points and,
therefore, should be reversed. We affirm that decision.
The Bureau of the Public Debt (Bureau), Department of the Treasury,
had identified a need for microfilm reader/ printers utilizing the newer
plain paper technology to replace the reader/printers in current use
which require dry silver paper. In order to evaluate the comparative
performance of plain paper reader/printers available for purchase, the
Bureau requested various vendors to furnish their products for
operational demonstration and testing at the Bureau's Parkersburg, West
Virginia location. (There was no formal solicitation.) National
Micrographics Systems, Inc. (NMS), an FSS supplier for both Canon and
Minolta reader/ printers, furnished units manufactured by each firm to
the Bureau for a 2-week evaluation under actual working conditions. Two
other vendors also furnished units for testing. The Eastman Kodak
Company responded to the Bureau's request, but its product was
unavailable for onsite testing at Parkersburg and was instead evaluated
for a 1-day period at Kodak's own facility by Bureau representatives.
As the result of its comparative evaluation, the Bureau determined
that the print quality of the Kodak product was superior to that of any
other plain paper reader/printer tested. The Bureau judged that the
print quality of the Canon and Minolta products was good, but also found
certain objectionable features in the Canon product, principally with
regard to its side-ejection of print copies and its capability for
threading short reels of microfilm. In addition, the Bureau was
concerned that NMS would not place maintenance personnel in Parkersburg
until the Bureau had ordered at least 10 units, but would provide
service from its regional office located some 75 miles from Parkersburg.
Although Kodak offered maintenance at an annual per unit price that was
$249 higher than that offered by NMS, Kodak technicians were located in
Parkersburg. Accordingly, the Bureau determined that it was justified in
awarding a purchase order to Kodak even though it was not the low priced
supplier.
In their original protests, NMS and Canon urged that the Bureau's
comparative evaluation was fundamentally unfair because the Kodak unit
had not been tested for an extended period of time under actual working
conditions, but had been selected after only a 1-day demonstration at
Kodak's own facility. The protesters vigorously disputed the Bureau's
finding that the Canon model had certain objectionable operational
features and questioned the Bureau's determination that the print
quality of the Kodak model was superior. In the latter regard, NMS and
Canon noted that the Kodak printer component, in fact, was manufactured
by Minolta and was the same component used in the Minolta model that had
been evaluated.
Moreover, the protesters objected to the Bureau's determination that
selection of Kodak was warranted because the firm offered greater
maintenance availability by having service representatives located in
Parkersburg. The protesters contended that the service provided by NMS
would be adequate to meet the Bureau's maintenance needs and noted that
it was less expensive on a per-unit basis than Kodak's. NMS and Canon
asserted that it was improper for the Bureau to require virtual onsite
maintenance when this requirement had never been communicated to the
various vendors.
Finally, the protesters urged that the Bureau had stated an actual
need for an eventual total of 75 microfilm reader/printers and,
therefore, that its purchase of six units with end-of-the-year funds
constituted an impermissible "fracturing" of what should have been a
full and open competition for the entire requirement.
In our January 9 decision, we concluded that the Bureau's decision to
purchase from Kodak was proper. We emphasized the position of this
Office that an agency's justification for purchasing from a higher
priced FSS supplier is not subject to legal objection unless that
justification is shown to have no reasonable basis. Olivetti Corp. of
America, B-195243, Sept. 21, 1979, 79-2 C.P.D. P 212. Applying that
standard of review, we pointed out that the Federal Property Management
Regulations (FPMR), which govern purchases from the General Services
Administration's multiple-award FSS's, expressly provide that greater
maintenance availability may serve as a justification for purchases made
at other than the lowest schedule price. FPMR, 41 C.F.R. Sec.
101-26.408-3(b)(6)(iii) (1985). Therefore, although certain aspects of
the Bureau's comparative evaluation were in controversy, it was our view
that the Bureau's determination that Kodak would provide greater
maintenance availability was a legally sufficient justification to award
the purchase order to Kodak.
Moreover, to the extent NMS and Canon had asserted that the Bureau's
purchase of only six units constituted an improper "fracturing" of its
real needs, we concluded that the protesters had not met their burden of
proof. In order to have prevailed in their assertion, it was our view
that the firms would have had to show that the acquisition of the six
units was metely the first in a series of several purchase orders to be
placed with the specific intent to evade the maximum dollar limitation
stipulated in the FSS contract. We found no evidence in the record that
served to make such a showing.
In its present request for reconsideration, Canon contends that our
prior decision is legally erroneous on several points. Canon argues that
our decision ignored the fact that the Bureau's evaluation was unfairly
conducted and, therefore, that the evaluation provided no reasonable
basis for the Bureau's determination that the Kodak product was
superior. Canon also contends that we erred in concluding that the
allegedly greater maintenance availability offered by Kodak was a
legally sufficient justification for the firm's selection, since the
Bureau had never established its actual minimum maintenance needs. In
this regard, Canon contends that our conclusion was based on the
erroneous assumption that the Kodak product would provide more reliable
performance and, hence, that there was no basis for us to find that
selection of the Kodak product, even with more available service, would
ultimately result in equipment malfunctions of shorter duration.
Finally, Canon urges that we have simply misapplied the applicable
regulations and prior precedent of this Office by holding that the
Bureau's acquisition could not be characterized as an improper
"fracturing" of a much greater actual requirement.
Contrary to Canon's belief, we did not ignore the fact that the Kodak
product had not been evaluated under actual working conditions for an
extended period of time as had the other reader/printers. We did not
specifically address the technical issues in controversy in our decision
because any extended analysis of those issues was not necessary to reach
our ultimate conclusion. We recognized that the Bureau's limited
evaluation of the Kodak product might create some doubt as to the
validity of its technical determinations but, also aware of the fact
that there had never been a formal solicitation for the units, we could
not conclude that the Bureau's action was a departure from the basic
rule of federal procurement that all offerors be treated equally. Cf.
Union Carbide Corp, 55 Comp. Gen. 802 (1976), 76-1 C.P.D. P 134 (an
agency's change in the "ground rules" applicable to a negotiated
procurement must be effectively communicated to all offerors to allow
for competition on an equal basis). Here, there was no express
representation by the Bureau that all products would be evaluated for a
specific length of time under specified conditions. Moreover, the
Bureau reported that it had evaluated the Kodak product under the same
criteria as it had evaluated the other units, i.e., acceptance of short
reels of microfilm, quality of prints, ergonomics of the work station,
etc. Therefore, even if the Kodak unit was not tested under the same
working conditions for the same period of time, we could not say that
the evaluation was inherently "illegal" in the sense urged by Canon.
In any event, we continue to believe that our prior decision properly
concluded that the greater maintenance availability offered by Kodak
constituted a sufficient legal justification to uphold the award to the
firm. It is true, as Canon notes, that justifications for purchases from
other than the low priced supplier under an FSS contract should be based
on the agency's specific, definite needs and should be clearly
expressed. FPMR, 41 C.F.R. Sec. 101-26.408-3(a). However, we do not
agree with Canon's assertion that the Bureau's justification for
purchase from Kodak on the ground of greater maintenance availability
failed to meet that standard. In our view, it is obvious that the Bureau
had a need to minimize equipment "down-time" and consequent disruptions
in print production. In this regard as well, it is also obvious that the
maintenance offered by NMS was less than what the Bureau deemed as
adequate to meet that need.
We did not find that the Kodak product would prove to be more
reliable, only that "service personnel located in the same city will be
able to respond more quickly to maintenance requests as they arise." We
do not accept the argument that the maintenance offered by NMS out of
its regional office, located some 75 miles distant from Parkersburg,
would necessarily meet the Bureau's minimum maintenance needs, where the
Bureau determined that the service response times would range from 2 to
4 hours.
Thus, since the Bureau's administrative report reasonably articulated
its justification for purchasing from other than the low priced FSS
supplier, in part on the ground of greater maintenance availability 1/,
the award to Kodak was legally supportable. Cf. National Office
Systems, Inc., B-201133, Mar. 18, 1981, 81-1 C.P.D. P 210; Copylease
Corp. of America, B-196820 et al., Jan. 6, 1981, 81-1 C.P.D. P 2
(protests sustained where agency justificat"ons for purchases from
higher priced FSS suppliers shown to be unreasonable or otherwise not
clearly expressed in the record).
We also find no merit in Canon's argument that our prior decision
erred in concluding that the Bureau's purchase of six units was an
improper "fracturing" of a larger requirement. As we noted in our
decision, FSS contracts provide maximum dollar limitations (here
$100,000) "above which agencies may not submit orders and contractors
may not accept orders." FPMR, 41 C.F.R. Sec. 101-26.401-4(c) (1). Thus,
agencies may not evade such limitations by splitting an actual larger
requirement into several small orders, each within the dollar limit
specified, since the maximum order limitation applies to both a single
purchase order or to a series of purchase orders placed within a short
period of time. Quest Electronics, B-193541, Mar. 27, 1979, 79-1 C.P.D.
P 205.
However, applying our holding in Quest to the situation, we concluded
that the Bureau's acquisition of only six units, even though it
apparently had an eventual need for 75 units, could not be characterized
as an improper "fracturing" of its real needs because there was simply
no evidence that it intended to place any more orders with Kodak, each
within the $100,000 limitation, so that it could ultimately acquire all
75 units without conducting a full and open competition. This is clearly
distinguishable from the factual situation in Quest where the agency
placed nine purchase orders with an FSS supplier on a single day, each
within the applicable dollar limitation, and the total amount of the
orders was far in excess of that limitation.
Rather, the record established that the Bureau, although requiring a
total of 75 units at some future point, had a need for only 6 units at
the time it p1a,ed the order because it had just recently a,quired the
capability to computer index its microfilm and only needed a limited
number of units that could access such computer indexing until a greater
amount of microfilm was made compatible with that use. We do not
believe, as Canon asserts, that our de,ision in Quest implies that
improper "fracturing" immediately arises when the agency knows that it
has an actual need for a quantity greater than the one ordered.
Instead, that case specifically stands for the legal proposition that an
agency cannot seek to evade a maximum dollar limitation stipulated in an
FSS contract by intentionally splitting a known present requirement into
a series of smaller orders. Since there is nothing in the record to
suggest that the Bureau intended to do so here, the protesters could not
prevail in their assertion that the acquisition of the six units
represented an impermissible "fracturing."
Finally, we find no merit in Canon's assertion that the Bureau's
action was violative of the Federal Acquisition Regulation, Sec. 6.301(
c) (FAC 84-5, Apr. 1, 1985), which provides that contracting without
providing for full and open competition shall not be justified either on
the basis of a lack of advanced planning or concerns related to the
amount of funds available (such as the expiration of fiscal year funds).
In fact, the Bureau had planned to,eplace its reader/printers with those
using the newer plain pape, technology during fiscal year (FY) 1986. The
Bureau acquired the six units in question because funds for their
purchase became available in FY 1985, and it had a present need fo,
those units with respect to the limited amount of computer indexed
microfilm compatible with their use. In our view, this represents
neither a lack of advance planning nor necessarily a precipitous
expenditure of funds set to expire.
The decision is affirmed. See Wheeler Brothers, Inc., et al.--
Request for Reconsideration, B-214081.3, Apr. 4, 1985, 85-1 C.P.D. P
388.
Harry R. Van Cleve
General Counsel
1/ Although Canon correctly points out that FPMR, 41 C.F.R. Sec.
101-26.408-3(b) (6) (iii), provides that greater maintenance
availability should result in longrun savings greater than the
difference in purchase prices, we believe it is only reasonable to
assume that Kodak's apparent ability to provide quicker response to
maintenance problems as they arise will enhance the Bureau's
productivity and performance, thus tending to offset Kodak's
approximately $3,500 higher item price.
FILE: B-220582; B-220582.2 86-1 CPD 22
DATE: January 9, 1986
MATTER OF: National Micrographics Systems, Inc.; Canon U.S.A., Inc.
CONTRACTS - FEDERAL SUPPLY SCHEDULE - AWARDS - PROPRIETY
1. When a contracting agency awards a purchase order to other than
the low priced supplier under a mandatory, multiple-award Federal Supply
Schedule, GAO's standard of review in such matters requires a clear
showing that the agency's justification for doing so has no reasonable
basis before GAO will legally object to the award. Thus, the agency's
determination that the higher priced schedule supplier would provide
greater availability of maintenance is a legally sufficient
justification to uphold the award.
CONTRACTS - FEDERAL SUPPLY SCHEDULE - ORDER LIMITATION - SPLITTING
REQUIREMENTS
2. In order to prevail in an assertion that the agency's acquisition
of six microfilm reader/printers under a Federal Supply Schedule (FSS)
contract constituted an improper "fracturing" of a much larger
requirement, it would have to be shown that the present acquisition is
merely the first in a series of several purchase orders to be placed
with the purpose of evading the maximum order limitation stipulated in
the FSS contract, and GAO finds no evidence in the record which would
serve to make such a showing.
National Micrographics Systems, Inc. (NMS), and Canon U.S.A., Inc.,
protest the award of purchase order No. PD-P-847 to the Eastman Kodak
Company by the Bureau of the Public Debt (Bureau), Department of the
Treasury. The order is for six microfilm reader/printers and
accessories for use at the Bureau's Parkersburg, West Virginia location,
and was placed under Kodak's mandatory, multiple-award Federal Supply
Schedule (FSS) contract. /1/ NMS and Canon complain that the purchase
order was awarded to a higher priced schedule contractor absent a
sufficient justification for doing so, in violation of the applicable
procurement regulations. We deny the protest.
Background
The Bureau identified a need for microfilm reader/printers utilizing
the newer plain (bond) paper technology /2/ and requested various
vendors to furnish units for operational demonstration and testing.
NMS, an FSS schedule supplier of both Canon and Minolta reader/
printers, and two other vendors furnished units for a 2-week evaluation
at the Bureau's Parkersburg location. Although Kodak responded to the
Bureau's request, the firm's product was unavailable for on-site testing
and was instead evaluated for a 1-day period at Kodak's own facility by
Bureau representatives.
Although the FSS schedule prices for the Canon and Minolta reader/
printers are both lower than the schedule price for the Kodak reader/
printer (with accessories, $12,006.60 and $14,864.30, respectively,
versus $15,573.40), the Bureau determined as the result of its
evaluation that purchase of the Kodak product was justified.
In this regard, the Bureau judged that the print quality of the Kodak
product was above average in comparison to the other reader/ printers
tested, and noted that the unit had a "masking" feature that would
reduce the amount of toner used. Although the print quality of the
Canon model was deemed to be good, the Bureau felt that the unit did not
thread short reels of microfilm at an acceptable level because the film
leader had to be clipped to a point before it could be fed into the
machine. The Bureau also noted that the Canon model ejected the print
copy to the aide of the operator's workstation, which was felt would
cause an excessive amount of operator movement in order to retrieve the
prints.
The Bureau found no objectionable features in the Minolta model and
judged that its print quality was good. However, the Bureau noted that
the Minolta model, as well as the Canon, would be serviced from NMS'
Charleston, West Virginia, regional office, some 75 miles from
Parkersburg, and that a separate maintenance contract would have to be
negotiated with NMS. In contrast, Kodak offered maintenance on its FSS
contract, and, although at an annual per unit price that was $249 higher
than the maintenance offered by NMS, Kodak technicians were located in
Parkersburg. Accordingly, the Bureau awarded the purchase order to
Kodak. Delivery of the reader/printers has been suspended pending our
resolution of the protest.
NMS and Canon strenuously argue that the Bureau's operational
evaluation was highly questionable. The firms note that the Kodak
product was only tested for a very short time at Kodak's own facility,
and was not subjected to testing in the same work environment as were
the other reader/printers. The firms dispute the Bureau's finding that
the Canon model has certain objectionable operational features, and also
question the Bureau's determination that the print quality of the Kodak
model is superior by noting that the Kodak printer component is, in
fact, manufactured by Minolta, and is the same component used in the
Minolta model that was tested.
Analysis
Purchases from the General Services Administration's multiple-award
FSS's are governed by the Federal Property Management Regulations
(FPMR), which provide that each purchase of more than $500 per line item
made from a multiple-award schedule by agencies mandated to use these
schedules shall be made at the lowest delivered price available under
the schedule unless the agency fully justifies the purchase of a higher
priced item. FPMR, 41 C.F.R. Section 101-26.408-2 (1985); see also the
Federal Acquisition Regulation, Section 8.405-1(a) (Federal Acquisition
Circular 84-5, Apr. 1, 1985).
However, determinations as to the needs of the agency and which
products on the FSS meet those needs are matters primarily within the
jurisdiction of the agency and with which we will not interfere unless
they clearly appear to involve bad faith or are not based on substantial
evidence. 52 Comp. Gen. 941, 944 (1973). Thus, although the agency,
after determining its minimum needs, is required to procure from the
lowest priced supplier on the schedule unless it makes an appropriate
justification for purchase from a higher priced supplier, a legal
objection to the agency's justification is not warranted unless it is
clearly shown to have no reasonable basis. Olivetti Corp. of America,
B-195243, Sept. 21, 1979, 79-2 CPD Paragraph 212.
Applying this standard of review to the present matter, we cannot
conclude that the Bureau's decision to purchase from Kodak was clearly
improper. The mere fact that the Kodak model shares the same printer
component with the Minolta model does not establish that the print
quality of the Kodak reader/printer reasonably could not have been found
to be superior. As the Bureau states, "the evaluation of print quality
was based on the consensus judgment of several managers with many years
of experience in providing photoprints to the public and appropriate
governmental agencies." In any event, we need not reach this or other
specific technical issues in controversy for purposes of this decision
because we believe the Bureau's determination that Kodak would provide
greater maintenance availability than NMS constituted a legally
sufficient justification to award the purchase order to Kodak.
The record establishes that NMS would not provide on-site maintenance
until the Bureau had purchased 10 or more units, but rather would
provide maintenance from its Charleston office, some 2 hours distant
from Parkersburg. The Bureau concluded that because Kodak has service
personnel located in Parkersburg, any disruptions due to equipment
malfunction would be of shorter duration. Although NMS and Canon argue
that the maintenance service provided by NMS out of its Charleston
office would more than meet the Bureau's minimum needs, we think that
service personnel located in the same city will be able to respond more
quickly to maintenance requests as they arise. We also note that,
contrary to the firms' position, the Bureau did not, in fact, require
on-site maintenance, but rather determined that central service location
and response time were factors to be considered during the operational
evaluation. Since the FPMR, 41 C.F.R. Section 101-26.408-3(b)(6) (iii),
specifically provides that greater maintenance availability may serve as
a justification for purchases made at other than the lowest schedule
price, the award to Kodak cannot be viewed as legally objectionable for
this reason.
NMS and Canon also assert that the Bureau's purchase violates the
FPMR by "fracturing" its real needs. In this regard, the FPMR, 41 C.F.
R. Section 101-26.401-4(C)(1), notes that the FSS provide maximum dollar
limitations "above which agencies may not submit orders and contractors
may not accept orders." As termed by NMS and Canon, "fracturing" occurs
when an agency seeks to evade the maximum order limitation specified in
an FSS contract by splitting its actual requirements into several
smaller orders each within the dollar limit specified, since the maximum
order limitation applies to both a single purchase order or to a series
of purchase orders placed within a short period of time. Quest
Electronics, B-193541, Mar. 27, 1979, 79-1 CPD Paragraph 205. Because
the Bureau's actual requirement is apparently for a total of 75
reader/printers, NMS and Canon assert that it was improper to use
end-of-the-year funds to acquire the six units in issue and not to
compete formally the entire requirement. The record does not support
this assertion.
The Bureau states that it has only ordered six units at this time
because it has just recently acquired the capability to computer index
its microfilm. According to the Bureau, the prime reason for purchasing
new reader/printers was to obtain equipment which can rapidly access the
appropriate part of each microfilm reel which has been computer indexed,
and that only microfilm produced in the past several months has been so
indexed. Therefore, the Bureau states that it can effectively use only
a limited number of units until a greater amount of microfilm is made
compatible for such use.
Moreover, with regard to the use of end-of-the-year funding, the
Bureau states that the new reader/printers were budgeted for procurement
in Fiscal year (FY) 1986. However, because of delays in procuring other
equipment that had been budgeted for FY 1985, it was necessary that
there be a certain amount of procurement rescheduling, and the
reader/printers scheduled for purchase in FY 1986 were acquired with the
limited funding that became available in FY 1985.
We do not believe that this situation can be characterized as an
improper "fracturing" of the Bureau's actual requirement, since the
Bureau in fact has a need for only six reader/printers at this time. In
order to prevail in their assertion, NMS and Canon would have to show
that the present acquisition is merely the first in a series of several
purchase orders to be placed with the purpose of evading the maximum
order limitation stipulated in the FSS contract, and we find no evidence
in the record which would serve to make such a showing.
The protests are denied.
Harry R. Van Cleve
General Counsel
(1) FSC Group 67, Part IV, Section B, FSC Classes 6720, 6730, 6740,
6750. Contract No. GS-00F-69669.
(2) The earlier type of reader/printers in use by the Bureau requires
dry silver paper which, although providing copies of high print quality,
is much more expensive than plain paper.
FILE: B-220581 86-1 CPD 55
DATE: January 16, 1986
MATTER OF: Data Transformation Corporation
CONTRACTS - PROTESTS - MOOT, ACADEMIC, ETC. QUESTIONS
1. Protest that a contract awarded under the Small Business Act
Section 8(a) has been improperly extended beyond the incumbent's 8(a)
program eligibility is dismissed as academic when the agency does not
exercise the option for the extension.
CONTRACTS - NEGOTIATION - SOLE-SOURCE BASIS - JUSTIFICATION -
DETERMINABLE FACTORS
2. A sole-source award may be justified on the basis of urgent and
compelling circumstances when ongoing, necessary services would
otherwise be interrupted and only the incumbent can meet the
government's needs within the required time.
Data Transformation Corp. (DTC) protests the Federal Aviation
Administration (FAA) award of a sole-source contract for services
relating to the maintenance and operation of the FAA Headquarters
Computer Facility to Input Output Computer Services, Inc. (IOCS). The
protester argues that the award represents an improper extension of a
contract initially authorized under the Small Business Act, section 8(
a), 15 U.S.C. Section 637(a) (1982), since the incumbent contractor was
no longer eligible for 8(a) status at the time of the extension. The
protester also argues that the sole-source award cannot be justified on
the basis of an urgent and compelling need for the services.
We dismiss the protest in part and deny it in part.
A 3-year contract for this requirement had been awarded to the Small
Business Administration (SBA) and had been subcontracted to IOCS under
the 8(a) program. This contract expired on September 30, 1985, with no
option years remaining.
In September 1984, the Department of Transportation (DOT) adopted a
plan to consolidate FAA and other DOT headquarters computer operations
under a single, centrally managed 5-year contract. However, for reasons
that are not clear from the record, DOT found that it could not execute
a consolidated DOT-wide contract in time to cover FAA's requirements for
FY 1986.
On May 14, 1985, a synopsis was published in the Commerce Business
Daily to advertise the DOT/FAA requirement. The synopsis provided
prequalification criteria which prospective offerors would have to meet
in order to receive a copy of the request for proposals (RFP) for the
consolidated requirement. Prequalification was based on written
responses to the criteria. The synopsis also indicated DOT's intention
to extend the existing contracts (the FAA contract with IOCS and a
separate DOT contract with another contractor) to cover fiscal year (FY)
1986, if no firms were found that satisfied the prequalification
requirements.
Thirty-three firms responded, including DTC, but only one was
considered qualified under the announced criteria. That one expressed
no interest in the FY 1986 requirement, wanting only to participate in
the consolidated DOT/FAA procurement.
DOT declined to take further procurement action on the FAA
requirement, and returned it to FAA for action. In September, FAA
modified the existing IOCS contract to include an extension option to
cover FAA's requirement for FY 1986.
DTC argues that the contract may not be awarded on a sole source
basis except under the 8(a) program, and that IOCS is no longer eligible
under this program.
The agency reports that after investigating the circumstances, it
agrees that it would have been improper to contract further with IOCS
under the 8(a) program. It therefore has not exercised the option to
extend the contract, but instead has awarded a 120-day contract to IOCS
to continue performance until the services of a new 8(a) contractor can
be acquired.
The alleged impropriety of the extension of the 8(a) contract is
rendered academic by the agency's decision not to exercise the option.
We will not consider an issue when, as here, the agency has altered its
actions so that no useful purpose would be served by our decision. See
Midwest Holding Corp., B-219926, Sept. 26, 1985, 85-2 CPD Paragraph 344.
This portion of the protest is therefore dismissed.
DTC also protests that the interim award to IOCS is improper,
contending that "there is no legal or compelling operational or safety
needs that can justify letting a contract in the manner proposed in
FAA's (report)." The thrust of the protester's argument is that the
FAA's requirement is neither compelling nor urgent, and that other
contractors were available with the necessary personnel, training,
expertise and experience required to perform the contract.
Section 303(c) 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), 41
U.S.C.A. Section 253(c)(1) (West Supp. 1985), provides that an executive
agency may use procedures other than competitive where the services are
available from only one responsible source and no other service will
satisfy the needs of the agency. See also Federal Acquisition
Regulation (FAR) Section 6.302-1 (FAC 84-5, April 1, 1985).
The agency report states that the FAA Headquarters Computer Facility
provides computer and word processing support services throughout FAA
headquarters and indirectly influences the operation of computer
facilities located at FAA regional and center offices. These services
are required 24 hours a day, 7 days a week. The agency argues that it
would incur serious injury if it could not obtain trained, proficient
personnel to operate the facility without interruption. In these
circumstances, the agency contends that its requirement for the services
was of unsusual and compelling urgency, and therefore justified the
award to IOCS, as the only qualified contractor available to immediately
continue performance until a new contract can be awarded. In this
connection, the appropriate justification was signed by the contracting
officer and approved by the competition advocate as required by CICA.
A sole-source award is justified where the agency reasonably
concludes that only one known source can meet the government's needs
within the required time. See WSI Copr., B-220025, Dec. 4, 1985, 85-2
CPD Paragraph. . . .
Here, the record indicates that FAA was not aware that it would need
to handle its own procurement, separate from DOT, for FY 1986 until it
was determined that a general, DOT-wide contract could not be awarded in
time to cover FAA's interim requirements. At that point, IOCS was the
only company known to be qualified to perform the work. Although the
requirement had been synopsized in the CBD, none of the firms that
responded and were interested in the FY 1986 contract were considered
qualified to take over the performance of these services. Thus, the
lack of advance planning on the part of the procuring activity does not
appear to us to have been a factor in the requirement to award the
interim contract.
DTC's contention that other contractors were available and able to
immediately continue performance is simply not supported by the record.
Although DTC disagrees with the agency's assessment of the required
level of experience and expertise for the performance of this contract,
our Office will not question an agency's judgment of its actual minimum
needs unless there is a clear showing that the determination is
unreasonable. Information Systems & Networks Corp., B-218642, July 3,
1985, 85-2 CPD Paragraph 25. Here, the protester has made no such
showing.
In these circumstances, we believe the FAA's determination to
negotiate a limited, interim contract with IOCS was reasonable on its
face. This portion of the protest is therefore denied as is the
protester's request for attorneys' fees and the cost of pursuing the
protest. 4 C.F.R. Section 21.6(a) (1985).
Finally, DTC requests that it be permitted to compete for the
proposed 8(a) procurement for these services. However, that is a matter
for SBA to determine since the CICA does not mandate competition in the
award of 8(a) contracts. Hence, we will not review the award or
proposed award of 8(a) subcontracts with the SBA absent a showing of
possible fraud or bad faith on the part of government officials or that
regulations may have been violated. Cassidy Cleaning, Inc., B-218641,
June 24, 1985, 85-1 CPD Paragraph 717. We find no evidence of these
factors present, and dismiss this issue.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
FILE: B-220580.2 86-1 CPD 125
DATE: February 4, 1986
MATTER OF: Systems and Facilities Corporation
CONTRACTS - PROTESTS - INTERESTED PARTY REQUIREMENT - DIRECT INTEREST
CRITERION
Request for consultant for reinstatement of protest against
requirements of request for proposals, dismissed because of filing of
parallel case with General Services Board of Contract Appeals, is
dismissed because consultant lacks direct interest in procurement.
Systems and Facilities Corporation (SAF) requests reinstatement of
its protest against request for proposals (RFP) No. SSA-RFP-86-0014
issued by the Social Security Administration for the acquisition of
computer terminals. The request for reinstatement is denied.
We dismissed SAF's original protest against this RFP in Systems and
Facilities Corp., B-220580, Dec. 15, 1985, 85-2 CPD Paragraph . . .,
because Memorex Corporation, a potential offeror, files a protest with
the General Services Board of Contract Appeals (GBSCA) raising some of
the same objections to this solicitation as were raised by SAF in its
protest to us. (Protest of Memorex Corporation, GSBCA No. 8233-P). On
December 18, 1985, the parties to the Memorex protest filed a joint
motion for dismissal of the protest based on their acceptance of a
negotiated resolution of their objections to the RFP. On December 19,
1985, the GSBCA dismissed Memorex's protest with prejudice to the rights
of the parties to file another protest concerning the issues before the
GSBCA. The record shows that although SAF was aware of the GSBCA
proceeding, SAF was not a party.
Our dismissal of SAF's protest followed full development of the
record in accordance with our Bid Protest Regulations, 4 C.F.R. part 21
(1985). The agency, in its response to SAF's protest, challenged SAF's
status as an interested party under our regulations, 4 C.F.R. Section
21.1, on the basis that SAF is a consulting organization and not a
supplier of terminal equipment. In its final comments on the protest,
SAF did not rebut the agency; it merely pointed out that several
interested parties, many of them terminal providers, had filed comments
with us in support of its protest.
We did not address the issue of SAF's status as an interested party
in our dismissal of SAF's protest because Memorex's filing of a related
protest with the GSBCA was dispositive under our regulations. 4 C.F.R.
Section 21.3(f)(6). However, we now find that SAF is not an interested
party.
In determining whether a protester is sufficiently interested to
permit our consideration of its protest, we examine the extent to which
the protester possesses a direct and identifiable economic interest in
the procurement and the issues raised. Storage Technology Corp.,
B-216719, Nov. 28, 1984, 84-2 CPD Paragraph 584. Where there are
intermediate parties that have a greater interest than the protester, we
have generally viewed the protester as too remote from the cause to
establish interest within the meaning of our regulations. National
Treasury Employees Union, B-216188, Sept. 10, 1984, 84-2 CPD Paragraph
278; American Satellite Corp. (Reconsideration), B-189551, Apr. 17,
1978, 78-1 CPD Paragraph 289. We generally do not consider consulting
organizations to have sufficient direct interest absent evidence that
they represent, or are authorized to represent, particular bidders or
offerors. Don Strickland's Consultant and Advisory Service, B-217178,
B-217388, Feb. 5, 1985, 85-1 CPD Paragraph 141. Absent evidence that
SAF is authorized to represent a particular offeror or potential offeror
in this procurement, we find that SAF has not established the necessary
degree of direct interest in this RFP.
The request for reinstatement is dismissed
Ronald Berger
Deputy Associate General Counsel
FILE: B-220580 85-2 CPD 674
DATE: December 16, 1985
MATTER OF: Systems and Facilities Corporation
CONTRACTS - PROTESTS - ABEYANCE PENDING CONTRACT APPEALS BOARD ACTION
Protest of allegedly restrictive specifications is dismissed where
another potential offeror files a protest with the General Services
Board of Contract Appeals raising essentially some of the same issues.
Systems and Facilities Corporation (SAF) has filed a protest against
request for proposals (RFP) No. SSA-RFP-86-0014 issued by the Social
Security Administration for the acquisition of terminals and related
communications equipment.
SAF contends that the RFP is unduly restrictive of competition.
Memorex Corporation, another potential offeror, has filed a protest
against this same procurement with the General Services Board of
Contract Appeals (GSBCA). Memorex's protest essentially involves some
of the same issues as SAF's protest to our Office, and other firms have
intervened in the protest before the GSBCA.
Our Bid Protest Regulations provide that a procurement that is the
subject of a GSBCA protest may not be the subject of a protest here
while the protest is before the board. The rule reflects the statutory
intent inherent in the Competition in Contracting Act of 1984, Pub. L.
No. 98-369, Title VII, Sections 2713 and 2741, that there be mutually
exclusive administrative forums for resolving challenges to procurements
subject to the Brooks Act, 40 U.S.C. Section 759 (1982). See Resource
Consultants, Inc., B-218634.2, Nov. 21, 1985, 65 Comp. Gen. . . ., 85-2
CPD Paragraph . . .; Comdisco, Inc., B-218276.2, Apr. 4, 1985, 85-1 CPD
Paragraph 391.
Since Memorex's protest of this procurement is pending before the
GSBCA, we dismiss SAF's protest.
Ronald Berger
Deputy Associate General Counsel
FILE: B-220576 DATE: October 10, 1985
MATTER OF: Lion Brothers Company, Inc.
DIGEST:
Protest is dismissed as academic where agency has resolved issue in
favor of the protester and awarded it a contract.
Lion Brothers Company, Inc. ( Lion Brothers), protests the rejection
of its bid as nonresponsive under solicitation No. CO-23-85, issued by
the Immigration and Naturalization Service (INS), and the cancellation
of the solicitation.
However, we have been advised informally by INS that it has concluded
that the bid submitted by Lion Brothers is responsive and that award
will be made to Lion Brothers.
Since Lion Brothers will be awarded the contract, the protest is
academic and will not be considered on the merits. See Keen Surveys,
B-214523, July 26, 1984, 84-2 C.P.D.P116.
The protest is dismissed.
Robert M. Strong
Deputy Associate
General Counsel
FILE: B-220575 85-2 CPD 354
DATE: September 27, 1985
MATTER OF: Adam II, Ltd.
BIDS - PRICES - BELOW COST - NOT BASIS FOR PRECLUDING AWARD
1. There is no legal basis to object to an award of a contract to a
bidder that allegedly submitted a below-cost bid. A bid may be rejected
as unreasonably low only if the contracting officer also determines that
the bidder is nonresponsible.
CONTRACTORS - RESPONSIBILITY - DETERMINATION - REVIEW BY GAO -
AFFIRMATIVE FINGING ACCEPTED
2. Protests against affirmative determinations of responsibility are
only reviewed under limited circumstances, and submission of an
allegedly below-cost bid is not one of those circumstances.
DIGEST:
Adam II, Ltd. protests the proposed award of a contract to Apex
International Management Services, Inc. under solicitation No.
F08650-85-B-0074, a two-step formally advertised procurement for the
construction of military family housing at Patrick Air Force Base,
Florida. Adam II argues that Apex's bid under the second step of this
procurement should be rejected because Apex's costs do not conform to
its technical proposal.
We dismiss the protest.
In effect, Adam II argues that Apex has submitted a below-cost bid
and is trying to "buy-in" on the contract. In Adam II's opinion, this
action requires the Air Force to reject the Apex bid as nonresponsive.
We do not agree. There is no legal basis to object to an award
solely on the basis of a below-cost bid. Command Systems, B-218093,
Feb. 15, 1985, 85-1 CPD Paragraph 205. To reject a bid as unreasonably
low requires that the contracting officer also determine that the bidder
in question is nonresponsible. NonPublic Educational Services, Inc.,
B-204008, July 30, 1981, 81-2 CPD Paragraph 69. This is not the case
here, however. Rather, every indication is that the contracting officer
has made an affirmative determination that Apex is a responsible bidder.
Insofar as Adam II's protest can be construed as questioning Apex's
responsibility, our Office does not review protests against affirmative
determinations of responsibility absent a showing of possible fraud on
the part of the procuring officials or that definitive responsibility
criteria in the solicitation have not been applied. SAI Comsystems
Corp., B-196163, Feb. 6, 1980, 80-1 CPD Paragraph 100. Neither
exception is present here. Therefore, we have no basis to question the
proposed award to Apex.
The protest is dismissed.
/s/ Ronald Berger
Deputy Associate General Counsel
B-220574.4 May 14, 1986
BIDS - INVITATION FOR BIDS - AMENDMENTS - FAILURE TO ACKNOWLEDGE -
BID NONRESPONSIVE
Bidder who failed to acknowledge a material amendment to solicitation
may not have such failure waived since, generally award of a formally
advertised contract must be made to the low responsible bidder who has
submitted a responsive bid.
The Honorable Billy Tauzin
Member, United States House of
Representatives
2439 Manhattan Boulevard, Suite 304
Harvey, Louisiana 70058
Dear Mr. Tauzin:
This is in reply to your request of April 7, 1986, for our comments
on the correspondence enclosed by you from B. F. Carvin Construction
Co., Inc. (Carvin), concerning the award of a contract for replacement
of roofing under invitation for bids (IFB) No. N62467-85-C-7249 issued
by the Southern Division, New Orleans Area, Naval Facilities Engineering
Command (NAVFAC).
Carvin essentially is questioning our decision in West Alabama
Remodeling, Inc., B-220574, Dec. 26, 1985, 85-2 C.P.D. P 718. In that
decision, we sustained West Alabama's protest against the Navy's award
of the contract to Carvin under the IFB referenced above.
The Navy accepted Carvin's bid which failed to acknowledge an
amendment which changed the requirement for roof shingles to a class "A"
shingle with a warranty of 20 years from a class "C" shingle with a
warranty of 15 years under the unrevised IFB. The Navy concluded this
amendment had a trivial effect on the price and that, based on this
conclusion, the failure to acknowledge the amendment could be waived.
We disagreed with the Navy's action because we found that the amendment
change was material and thus could not be waived. Under these
circumstances, we determined that Carvin's bid was nonresponsive and
that the Navy's award to Carvin was improper. We recommended that the
Navy terminate the contract with Carvin.
While ordinarily we would have recommended award to the next eligible
bidder, the Navy stated that the class "C" shingle with a 15-year
warranty would have met its needs. The Navy further stated that its
intent by issuing this amendment requiring class "A" shingles was to
increase competition because class "C" shingles with a 15-year warranty
were thought to be generally unavailable. In view of the Navy's
statement, we concluded that the restriction to one type of shingle with
a 20-year warranty was an overstatement of the government's needs. We
recommended cancellation of the IFB and resolicitation on a less
restrictive basis.
NAVFAC subsequently requested reconsideration of our decision and in
West Alabama Remodeling, Inc.--Reconsideration, B-220574.2, Feb. 7,
1986, 86-1 C.P.D. P 141, we affirmed our decision. By letter of March
27, 1986, the Navy advised us that it would comply with our
recommendation to terminate the award to Carvin and to resolicit the
requirement.
By letter to our Office of March 5, 1986, a month after our decision
affirming our initial decision, Carvin argued that its failure to
acknowledge the amendment properly was waived by tbe contracting
officer. Additionally, Carvin argued that the amendment did not affect
the contract price or performance and its bid price was $21,000 less
than the West Alabama Remodeling, Inc., bid price. We viewed Carvin's
letter as a request for reconsideration.
Our Bid Protest Procedures, 4 C.F.R. part 21 (1985) applicable to
this protest, provide that reconsideration may be requested by the
protester, any interested party who submitted comments during the
consideration of the protest, and any agency involved in the protest. 4
C.F.R. Sec. 21.12 (1985); Jarvis B. Webb Company; Eaton Kenway, Inc.--
Reconsideration, B-218110.2, Feb. 11, 1985, 85-1 C.P.D. P 181. Since
Carvin was on notice of the protest, but did not comment thereon, Carvin
was not eligible to request reconsideration.
This above-cited provision limits those parties who are eligible to
request reconsideration of a decision of this Office, consistent with
our belief that to the maximum extent possible our decisions should be
final, thus ensuring the prompt resolution of protests and the least
necessary disruption of the procurement process. In this connection,
the Competition in Contracting Act of 1984, 31 U.S.C.A. Sec. 3554(a) (1)
(West Supp. 1985), provides that GAO shall provide an expeditious
resolution of protests.
Carvin was on notice of the protest and had an opportunity to
participate in the bid protest process where it could have raised the
issues it now seeks to have us consider. Thus, under those
circumstances, we think our dismissal of Carvin's request to further
consider the matter, 5 months after it received notice of the protest,
was proper.
In any event, Carvin's allegations were raised by the Navy in the
protest and we considered and denied these allegations in our initial
protest decision and our decision in response to the Navy's request for
reconsideration. In this connection, Carvin argues, as did the Navy,
the amendment, was not material and the Navy properly waived it.
However, as we pointed out in our decision, warranty provisions are
generally material requirements of a solicitation. We found that here
the effect of the warranty revision was to guarantee that the shingle
would last 5 years longer. Therefore, while arguably the amendment had a
minimal effect on price, it represented a significant change in the
contractor's legal obligation. In these circumstances, we concluded
that the requirement could not be waived and Carvin's bid was
nonresponsive.
With regard to Carvin's argument that award to the firm would result
in savings to the government since it was the low bidder, we
consistently have held that a nonresponsive bid may not be accepted,
notwithstanding any savings it might represent to the government, since
such acceptance would compromise the integrity of the competitive
bidding system. The Homer D. Bronson Co., B-220162, Nov. 22, 1985, 85-2
C.P.D. P 591. Moreover, the IFB overstated the Navy's needs and a
resolicitation on the less restrictive basis should result in lower
prices.
Finally, Carvin's letter to you requests that Carvin be given proper
notice of termination so that it can assert any remedies it may have
concerning the termination. This is a matter that is handled by the
procuring activity. As noted above, on March 27, the Navy indicated
that consistent with our recommendation it would terminate for the
convenience of the government its contract with Carvin. Thus, we would
expect the Navy to notify Carvin of its action in the near future and
Carvin can assert any claims it may have under the disputes clause of
its contract.
We are furnishing copies of the decisions cited in this letter. As
requested, we are returning the correspondence enclosed with your April
7 letter. We trust that this information is helpful.
Sincerely yours,
Harry R. Van Cleve
General Counsel
FILE: B-220574.2 86-1 CPD 141
DATE: February 7, 1986
MATTER OF: West Alabama Remodeling Inc. -- Reconsideration
BIDS - INVITATION FOR BIDS - AMENDMENTS - FAILURE TO ACKNOWLEDGE -
MATERIALITY DETERMINATION
An irregularity in a bid is material when the irregularity is a
variation from the exact requirements of the invitation for bids (IFB);
therefore, a bid which fails to acknowledge an IFB amendment that
increased a warranty from 15 to 20 years is nonresponsive.
The Naval Facilities Engineering Command (NAVFAC), Department of the
Navy, requests reconsideration of our decision in West Alabama
Remodeling, Inc., Dec. 26, 1985, 85-2 C.P.D. Paragraph . . . , in which
we sustained a protest against award of a contract to B. F. Carvin
Construction Co., Inc. (Carvin), for the replacement of roofing on
family housing and other work.
We sustained the protest because we found that Carvin's bid should
have been rejected as nonresponsive for failure to acknowledge an
amendment to the invitation for bids (IFB) that increased the warranty
on the roofing shingles from 15 to 20 years. We indicated that the
5-year increase in warranty was a material change in the IFB because it
represented a significant enhancement in the quality of the shingles.
In the request for reconsideration, NAVFAC contends that the 5-year
increase in warranty is not a material change in quality. The basis for
this contention is that the IFB contains a standard 1-year warranty and
that whether a 15- or 20-year warranty accompanies the shingle makes no
material difference because NAVFAC would not choose one shingle over
another because of the difference in shingle warranty. In the
circumstances, NAVFAC contends that Champion Road Machinery Corp.,
B-216167, Mar. 1, 1985, 85-1 C.P.D. Paragraph 253, cited in the December
26 decision, is distinguishable.
We affirm our prior decision.
Although the IFB contains a standard 1-year warranty of construction,
the warranty is specific that it is "in addition to any other warranties
in this contract." The shingle warranty is one of the additional
warranties. The amendment to the shingle warranty changed that warranty
to require a 20-year guarantee. Although NAVFAC states that the
warranty was incidental to the shingle and that it would not have
selected one type of shingle over another because of the difference in
the warranty period, the fact remains that the warranty was stated in
the IFB as a requirement for the shingle and the clause was specifically
amended to provide for a 20-year period.
The measure of whether a bid is responsive to an IFB is whether it
meets the stated requirements of the IFB. J. D. Bertoline Industries,
Inc., B-219791, Aug. 19, 1985, 85-2 C.P.D. Paragraph 193. The
intentions of the contracting agency unexpressed in the IFB have no
bearing upon the responsiveness of the bid. Whether an irregularity in
a bid is material depends on whether the irregularity is a variation
"from the exact requirements of the invitation." Federal Acquisition
Regulation (FAR), 48 C.F.R. Section 14.405 (1984). The variation is
material when it has more than a trivial or negligible effect on
quality. FAR, supra. As we indicated in the December 26 decision, a
reduction of 5 years from a 20-year warranty represented a significant
reduction in quality.
We disagree with NAVFAC that Champion Road Machinery International
Corp., B-216167, supra, is distinguishable from the present case. In
both cases, the bidder offered a shorter warranty than was required by
the IFB. As we held in the Champion decision, an offer of a shorter
warranty than is required by an IFB is a material qualification
rendering the bid nonresponsive.
Comptroller General of the United States
FILE: B-220574 85-2 CPD 718
DATE: December 26, 1985
MATTER OF: West Alabama Remodeling, Inc.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES - FILING
PROTEST WITH AGENCY
1. Although protester filed a copy of the protest with the
contracting officer 1 day late, GAO will consider the merits of the
protest since the contracting agency had prior knowledge of the basis of
the protest and completed the report before the report was due and was
not prejudiced in the preparation of the report by the protester's
delay.
BIDS - INVITATION FOR BIDS - AMENDMENT - FAILURE TO ACKNOWLEDGE - BID
NONRESPONSIVE
2. Bidder's failure to acknowledge a material IFB amendment renders
bid nonresponsive.
BIDS - INVITATION FOR BIDS - CANCELLATION - AFTER BID OPENING -
DEFECTIVE SOLICITATION
3. Overstatement of government's needs is a material solicitation
deficiency requiring cancellation of the solicitation and
resolicitation.
West Alabama Remodeling, Inc. (West Alabama), protests the contract
awarded to B.F. Carvin Construction Co., Inc. (Carvin), under invitation
for bids (IFB) No. N62467-85-B-7249 issued by the Southern Division, New
Orleans Area, Naval Facilities Engineering Command (NAVFAC), for the
replacement of roofing on family housing and other work.
Carvin failed to acknowledge in its bid amendments to the IFB that,
among other things, upgraded the class of roofing shingles from "C" to
"A" and increased the warranty on the shingles from 15 to 20 years.
The protest is sustained.
NAVFAC contends that we should not consider the protest because the
protester filed a copy of the protest with the contracting officer 1 day
late. However, despite the late receipt of the copy, the contracting
agency report indicates that the contracting agency had prior knowledge
of the basis of protest because the protester discussed the award and
expressed its intention to file a protest with the agency prior to
filing the protest here. Further, the contracting agency completed the
report 1 day early. Thus, the contracting agency was not prejudiced in
the preparation of the report by the protester's delay. Therefore, we
will consider the merits of the protest. See Colt Industries,
B-218834.2, Sept. 11, 1985, 85-2 C.P.D. Paragraph 284.
NAVFAC waived the failure to acknowledge the amendments as de
minimus. Essentially, the basis for this determination with respect to
the shingles was that a class "A" shingle was no more expensive than a
class "C" shingle and that the class "A" installation cost was less
expensive than the class "C" installation cost. In that regard, NAVFAC
reports that the class "C" shingle would have been adequate for its
purpose, but that an investigation indicated that class "C" shingles
were not generally available. Therefore, NAVFAC states that, since the
class "A" shingle would do the job as well, the IFB was amended to
require the class "A" shingle to promote competition.
However, it is unnecessary for us to consider the waiver on the
foregoing basis. In our view, the increase in warranty from 15 years to
20 years was a material change in quality. While NAVFAC dismisses the
increase in warranty as merely a contractual obligation, the effect of
the warranty is to guarantee that the shingle will last 5 years longer
and, therefore, represents a significant enhancement in quality.
Further, we have held that the terms of a warranty are material and that
an offer of a shorter warranty than is required by an IFB is a material
qualification rendering the bid nonresponsive. Champion Road Machinery
International Corp., B-216167, Mar. 1, 1985, 85-1 C.P.D. Paragraph 253.
In the circumstances, Carvin's bid should have been rejected as
nonresponsive. Performance on the contract awarded to Carvin has not
started. NAVFAC should terminate the contract.
Ordinarily, we would recommend that award be made to West Alabama if
it was eligible for award. However, NAVFAC has indicated that class "C"
shingles with a 15-year warranty would have been adequate for its needs
and that the purpose of the amendment was to increase competition. If
this is the case, the specifications should have been open to
alternative classes with standard manufacturer's warranties rather than
restricted to a single class with a 20-year warranty. The restriction
was an overstatement of the government's needs. Overstatement of the
government's needs is a material solicitation deficiency requiring
cancellation of the IFB and resolicitation. The Burgmeier Company;
Artec, a Division of Kimball International, B-209710, B-209710.2, May
23, 1983, 83-1 C.P.D. Paragraph 552.
Comptroller General of the United States
FILE: B-220570.2 86-1 CPD 364 DATE: April 15, 1986
MATTER OF: NDT-1, Inc.--Request for Reconsideration
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
RECONSIDERATION REQUESTS - ERROR OF FACT OR LAW - NOT ESTABLISHED
Prior decision is affirmed where the arguments raised in the
request for reconsideration do not show that the prior decision
was erroneous.
NDT-1, Inc. (NDT), requests that we reconsider our decision in NDT-1,
Inc., B-220570, Nov. 20, 1985, 85-2 C.P.D. P 576, in which we held that
the National Aeronautics and Space Administration (NASA) properly
canceled a solicitation for sealed bids for the nondestructive testing
of pressure vessels at the Lewis Research Center (Center), Cleveland,
Ohio, as a result of its determination that sufficient funds were not
available to make an award. NDT had submitted the low bid under
invitation for bids (IFB) No. 3-157670, which was canceled.
As set forth in our November 20, 1985, decision, the agency advised
that the decision to cancel the solicitation was based on the withdrawal
of funds for the procurement as the result of the need to fund an
emergency investigation of an explosion at the Center. NASA also pointed
out that the services required under the canceled solicitation were also
included as part of contract No. NAS3-24754 awarded on August 28, 1985,
for engineering, technical and support services necessary for
recertification of systems, including pressure vessels.
In its request for reconsideration, NDT in part alleges that the
November 20, 1985, decision failed to indicate that bids had been opened
prior to the agency's cancellation of the solicitation. Notwithstanding
NDT's assertions, the November 20, 1985, decision expressly advised that
the sealed bids "were opened by the agency on August 23." Accordingly,
we applied the rule that cancellation of a solicitation after bids have
been opened and prices have been exposed is not permitted unless a
cogent and compelling reason for cancellation exists. International
Alliance of Sports Officials, B-211049; B-211049.2, May 24, 1983, 83-1
C.P.D.P 562. We also stated that an agency's determination that funds
are not available for contract obligation is a sufficient reason to
cancel a solicitation and it is not our role to question the
unavailability of funds. Id. and Genco Tool and Engineering Co., 61
Comp. Gen. 281 (1982), 82-1 C.P.D. P 175.
NDT asserts that the unavailability of funds is not one of the nine
compelling reasons for the cancellation of a request for sealed bids
which are set forth in Federal Acquisition Regulation (FAR), Sec.
14.404-1 (c) (Federal Acquisition Circular (FAC) No. 84-5, Apr. 1,
1985). However, the FAR expressly provides that an agency may cancel a
solicitation after bid opening when "cancellation is clearly in the
public's interest." FAR, Sec. 14.404-1 (c) (9) (FAC No. 84-5, Apr. 1,
1985). This language is sufficiently broad to encompass the present
situation where funds are not available.
NDT contends that even if FAR, Sec. 14.404-1 (c) (9), permits
cancellation of a solicitation due to lack of sufficient funds, such
provision is inapplicable here because "funds were available." As set
forth in our November 20 decision, NASA reported that funds which would
have been available for award under the IFB were used to fund the
emergency investigation of an explosion at the Center. 1/
NASA did award a negotiated contract for engineering and related
services for the recertification of systems at the Center, including
nondestructive testing of pressure vessels, under a different
solicitation after bids were opened under this protested IFB. As we
pointed out in the November 20 decision, however, the management of an
agency's funds generally depends on the agency's judgment concerning
which projects and activities shall receive increased or reduced funding
and a contracting agency has an unquestionable legal right to cancel a
solicitation when sufficient funds are not available. Somers
Construction Company, Inc.--Reconsideration, B-193929, July 24, 1979,
79-2 C.P.D. P 54.
NDT asserts the services required under this IFB were not originally
included under negotiated contract NAS3-24754 and that, upon
cancellation of the IFB, such services were added to the negotiated
procurement. Accordingly, NDT asserts that even if the agency could
properly cancel the IFB due to lack of funds, the "transfer of services"
from the IFB to the negotiated contract violated section 14.404-1 (e) of
the FAR ( FAC No. 84-5, Apr. 1, 1985), which sets forth the
circumstances under which an acquisition may be completed through
negotiations following the cancellation of an IFB. However, in our
opinion, this provision of the FAR is not applicable here since the
services in question were not transferred to the negotiated procurement
as a result of the cancellation of the IFB. The record before us, which
includes a copy of the request for proposals (RFP) upon which contract
NAS3-24754 is based--RFP No. 3-563787-- shows that upon its issuance on
April 15, 1985, about 2 months prior to the issuance of the IFB, the RFP
clearly included the "nondestructive testing" of pressure vessels in
addition to the other requested engineering and related services.
The agency reports that, even if funds had not been directed for the
emergency investigation of the explosion, the Center would not have
awarded a contract under the IFB since the scope of work under the
negotiated procurement included the same nondestructive testing services
which were being procured under the IFB. The agency states that the
internal purchase request which formed the basis of the IFB was
initiated to obtain the nondestructive testing services on an interim
basis until a contract under the RFP was awarded. NASA advises that due
to inadvertent delays, the IFB was not issued until June and, as a
result of two amendments to the solicitation, the bid opening date was
extended to August 23, 1985. The agency states that it was not until
the August bid opening that the two different procurement sections
carrying out each procurement action realized that the delays
encountered on the IFB moved it into the timeframe of the award under
the negotiated procurement. The agency advises that once it became
known that the Center would have two contracts under which the
nondestructive testing could be performed it decided that it would be
appropriate to cancel one of the procurement actions. The agency
indicates that since the IFB was only for the nondestructive testing of
pressure vessels for a limited period of time, whereas the negotiated
procurement was for the entire recertification program (including
nondestructive testing of pressure vessels) for an extended period (up
to 3 years with the exercise of options) it elected to proceed with
award under the negotiated procurement. Under the circumstances, we
cannot conclude that the agency would have acted improperly if it had
canceled the IFB even if adequate funds therefor had been available,
since the agency reasonably determined that its minimum needs would be
better met by making an award under the negotiated procurement. See
generally Baucom Janitorial Services, Inc., B-210216, May 31, 1983, 83-1
C.P.D. P 584 and Security Management Associates, B-214186, July 23,
1984, 84-2 C.P.D.P 83. We note that the agency points out that the
nondestructive testing under the negotiated contract will be performed
at a slightly lower cost.
Finally, NDT contends that the IFB should not have been canceled
since the agency failed to comply with the provisions of FAR, Sec.
14.404-1(a) (2) (FAC No. 84-5, April 1, 1985), in not anticipating
cancellation prior to bid opening. The provision cited states that
every ef fort should be made to anticipate changes in a procurement
prior to bid openings In his report on the request for reconsideration,
the contracting officer advises that it was not until after the bid
opening that the NASA contract specialist involved learned that funds
were not available for award under the IFB due to the explosion at the
Center. In any event, an agency may cancel a solicitation no matter
when the information providing the basis for cancellation first arises.
Marmac Industries, Inc., B-203377.5, Jan. 8, 1982, 82-1 C.P.D.P 22.
Accordingly, the November 20, 1985, decision is affirmed.
Harry R. Van Cleve
General Counsel
FOOTNOTES
1/ We note that NDT now questions the agency's statement that an
explosion occurred at the Center since the Center has not presented
documentation concerning the explosion. This issue has been untimely
raised by NDT, since it is raised more than 3 months after NDT received
the agency's October 23 report which cited the explosion. See 4 C.F.
R.. Sec.21.2(a)(2) (1985).
FILE: B-220570 85-2 CPD 576 DATE: November 20, 1985
MATTER OF: NDT-1, Inc.
DIGEST:
BIDS - INVITATION FOR BIDS - CANCELLATION - AFTER BID OPENING -
INSUFFICIENT FUNDING
Agency properly canceled a solicitation for sealed bids where
it determined that sufficient funds were not available to make an
award.
NDT-1, Inc. (NDT), protests the cancellation of invitation for bids
(IFB) No. 3-157670 issued by the National Aeronautics and Space
AdministratiTn (NASA) for nondestructive testing of pressure vessels at
the Lewis Research Center, Cleveland, Ohio (Center).
We deny the protest.
The IFB was issued on June 12, 1985. Six sealed bids were submitted
and were opened by the agency on August 23. NDT submitted the low bid
and NASA anticipated that award would be made to NDT. On September 25,
1985, the requesting activity--the Center's Facilities Engineering
Division-- advised the contracting officer that funds for the
procurement under the IFB were no longer available and, accordingly, the
solicitation was canceled. The agency advises that the funds for the
procurement were withdrawn so that such funds could be used to fund an
emergency investigation which resulted from an explosion in the cooler
system in the altitude exhaust system located in the Center's Engine
Research Building. NASA advises that the decision was based on the
immediate need for the investigation and the fact that the funds for the
procurement in question were not yet obligated. NASA also points out
that the services required under the IFB for nondestructive testing of
pressure vessels were also included as part of contract No. NAS 3-24754
awarded on August 28, 1985, pursuant to a request for proposals which
had been issued on April 15 by another procurement section fmr
engineering, technical, and support services necessary for
recertification of systems, including pressure vessels. Thus, the agency
notes that it would have canceled the IFB under which NDT competed even
if there had not been the need to withdraw the funds from such
procurement for the emergency investigation.
The protester contends that, since funds were available to carry out
nondestructive testing of pressure vessels under the negotiated
contract, funds were available to carry out the procurement under the
IFB which was canceled.
Cancellation of a solicitation after bids have been opened and prices
have been exposed is not permitted unless a cogent and compelling reason
for cancellation exists. International Alliance of Sports Officials,
B-211049;, B-211049.2, May 24, 1983, 83-1 C.P.D. P 562. Our Office has
held that an agency's determination that funds are not available for
contract obligation is a sufficient reason to cancel a solicitation and
that it is not our role to question the unavailability of funds. Id. and
Genco Tool and Engineering Co., 61 Comp. Gen. 281 (1982), 82-1 C.P.D. P
175. An agency has an unquestioned legal right to cancel solicitations
because of lack of funds since the management of an agency's funds
generally depends on the agency's judgment concerning which projects and
activities shall receive increased or reduced funding. Somers
Construction Company, Inc.-- Reconsideration, B-193929, July 24, 1979,
79-2 C.P.D. P 54. Accordingly, we find that NASA's determination to use
the funds originally earmarked for testing of pressure vessels under
this IFB for an investigation of the explosion represents a valid reason
to cancel the IFB.
Since the unavailability of funds was by itself a sufficient basis
for the cancellation of the IFB, we need not consider the matter as to
whether the inclusion of the testing of vessels under the negotiated
contract awarded August 28 also provided a proper basis for the
cancellation of the IFB. See Military Base Management, Inc., B-216309,
Dec. 4, 1984, 84-2 C.P.D. P 619 at 3.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220569 86-1 CPD 29
DATE: January 13, 1986
MATTER OF: Loren Preheim
BIDS - INVITATION FOR BIDS - AMENDMENTS - FAILURE TO ACKNOWLEDGE -
BID RESPONSIVE
Contracting officer properly accepted a bid that failed to
acknowledge a solicitation amendment which merely relaxed a portion of
the agency's requirements.
Loren Preheim protests the award of a contract to Richard Newman
under invitation for bids (IFB) No. R6-20-85-43 issued by the Forest
Service. Preheim contends that Newman's bid should have been rejected
as nonresponsive because Newman failed to acknowledge an amendment prior
to bid opening. We deny the protest.
The IFB contained line items for road maintenance work at three
different geographical areas. Awards were to be based on the low,
responsive bid for each item. As issued, the IFB required road surface
compaction using an "8 - 10 ton pneumatic steel or equivalent vibrating
roller." The amendment added two commas. As amended, the IFB called for
an "8 - 10 ton pneumatic, steel, or equivalent vibrating roller."
Eighteen bids were submitted. The low bid on item 1 was rejected as
nonresponsive for reasons unrelated to the protest. Newman, the second
low bidder, did not acknowledge the amendment. However, the contracting
officer determined that Newman's failure to acknowledge could be waived
as a minor informality.
Preheim contends that the amendment was material and that it, as the
third low bidder, should have been awarded item 1. Preheim says the
original IFB allowed only a pneumatic steel or equivalent vibrating
roller, while the amended IFB allowed a pneumatic, a steel or any other
equivalent vibrating roller. According to the protester, the original
language allows the contractor to use a pneumatic steel vibrating
roller, equipment which differs from a pneumatic or steel vibrating
roller. Preheim argues that the amendment cannot be waived because its
effect on cost depends on what equipment each bidder has available.
Preheim also asserts, without explanation, that the amendment could
affect the quality of work.
The Forest Service argues that the amendment merely corrected an
obvious typographical error. It indicates that while vibrating steel
rollers are commonly available, there is no such thing as a pneumatic
steel vibrating roller, which would have to be custom built. In the
circumstances, the Forest Service asserts, the amendment, by allowing a
vibrating steel roller, lessened the solicitation requirement. Since
Newman's bid was the low responsive bid, the Forest Service contends,
award to Newman would not prejudice any other firm.
A bid which does not include an acknowledgment of a material
amendment must be rejected because absent such an acknowledgment, the
bidder is not obligated to comply with the terms of the amendment, and
its bid is thus nonresponsive. Emmett R. Woody, B-213201, Jan. 26,
1984, 84-1 CPD Paragraph 123. An amendment is material, however, only
if it would have more than a trivial impact on the price, quantity,
quality or delivery terms the government would have to accept were it to
award a contract not containing the amendment. Federal Acquisition
Regulation, 48 C.F.R. Section 14.405 (1984).
We agree with the Forest Service that no offeror would be prejudiced
by award to Newman. At worst, Newman offered to use a pneumatic steel
vibrating roller that, the record shows, would have to be custom built,
but which would be equivalent to the roller required by the amended
solicitation and therefore, would conform to the amended solicitation.
Perhaps Newman simply read the IFB as requiring only what the amendment
requires. Regardless of Newman's intent, however, its bid was the low
responsive bid and Newman's failure to acknowledge the amendment does
not allow it to avoid its obligation to use acceptable compaction
equipment.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220567 85-2 CPD 712
DATE: December 24, 1985
MATTER OF: Manufacturing Sciences Corporation
BIDS - INVITATION FOR BIDS - CANCELLATION - REINSTATEMENT - NOT
REQUIRED - PROTESTOR NOT ENTITLED TO AWARD
1. Where agency's requirement for solicited items is substantially
reduced from that on which bids were submitted, reinstatement of
solicitation canceled after bid opening because of price
unreasonableness is not appropriate.
BIDS - PREPARATION - COSTS - NONCOMPENSABLE - INVITATION PROPERLY
CANCELED
2. Claim for bid preparation costs and costs of pursuing protest are
denied where there is no showing that the government acted arbitrarily
or capriciously with respect to the claimant's bid.
Manufacturing Sciences Corporation (MSC) protests the cancellation of
Department of Energy (DOE) solicitation No. DE-FB02-85ER40208 for the
fabrication of depleted uranium sheets to be used in the construction of
calorimeters for high energy physics experiments. MSC argues that DOE
acted improperly by canceling the solicitation after bid opening without
first making a determination as to reasonableness of its price.
We deny the protest.
The solicitation was for uranium sheets to be used in experiments at
three laboratories: Harvard/CERN, Standard Linear Accelerator Center,
and Fermi National Accelerator Laboratory. The solicitation called for
four orders, each consisting of many different quantities of sheets.
Order A was for sheets associated with the Harvard/CERN experiment;
Order B for sheets required for the Stanford experiment; Order B.B was
an alternate order for Stanford based on different specification
requirements; and Order C was for sheets associated with the Fermi
experiment.
Bids were solicited for a basic quantity and two option quantities.
The basic requirement consisted of all of Order A and designated line
items of Order B/Order B.B and Order C. The remainder of Orders B/B.B
and C were divided between option 1, to be exercised no later than March
1986, and option 2, to be exercised no later than June 1987.
The solicitation provided that the government would evaluate offers
by adding the total price for both options to the total price for the
basic requirement and required submission of bids for all the orders and
quantities, including both Orders B and B.B, although the agency
intended to award only one of the two. Award was to be made on an all
or none basis.
DOE received two bids, one from MSC and one from CERCA. CERCA's bid
was rejected as nonresponsive because it deviated from the
solicitation's delivery schedule, did not contain prices for all the
quantities solicited and did not provide for the required 120 day bid
acceptance period. MSC's bid at $8,083,706.44 (with Order B) and
$8,292,871.05 (with Order B.B), while responsive, was not considered
reasonable because it exceeded the government estimate and because MSC's
prices for the quantities that both MSC and CERCA bid on exceeded
CERCA's prices by substantial amounts. On September 9, 1985, DOE
informed MSC that the solicitation had been canceled pursuant to the
Federal Acquisition Regulation (FAR), 48 C.F.R. Section 14.404-1(c)(6)
(1984), because only one acceptable bid was received and the contracting
officer could not determine the reasonableness of the bid price.
DOE indicated that it had not at that time decided whether to open
negotiations with MSC pursuant to FAR 14.404-1(e)(1) or to resolicit.
On September 17, DOE notified MSC that it intended to resolicit the
requirement, and on September 23, MSC filed this protest.
Subsequently, by letter of October 1, DOE was notified that the
Stanford experiment would not use uranium sheets; DOE argues that this
results in a significant reduction in the supplies required by the IFB
and provides an additional justification for the cancellation.
Because of the potential adverse impact on the competitive bidding
system of canceling an IFB after bid prices have been exposed, the
contracting officer must have a compelling reason to cancel. 48 C.F.R.
Section 14.404-1(a)(1). A change in the agency's requirements after the
opening of bids so that the solicitation no longer properly reflects the
agency's minimum needs constitutes such a compelling reason. Tecom,
Inc., B-213815.2, Aug. 6, 1984, 84-2 CPD Paragraph 152.
At the time the solicitation was issued, DOE's requirement for
uranium sheets reflected the needs of three different laboratories. DOE
now is informed by Stanford that it will use lead, rather than uranium,
as the material in its calorimeter, thereby eliminating a need for
uranium sheets in its experiment. Since the Stanford experiment
accounted for about 40 percent of the total requirement, we think the
elimination of the Stanford requirement results in a substantial
reduction in the total DOE requirement encompassed by the IFB.
MSC points out that the withdrawal of Stanford from the procurement
results primarily in a reduction in the option quantity, while having
little effect on the base requirement. While it is true that most of
the Stanford requirement (Order B/B.B) was part of the option quantity,
the solicitation provided that the low bidder would be determined by
adding the option quantity prices to the prices bid on the base
quantities, so that elimination of the quantity involved would have a
major impact on the bid evaluation. /1/ Furthermore, since the
solicitation required that bids be submitted on all orders and
quantities specified, bidders who could not compete for an award
containing the Order B/B.B quantities may compete for the reduced
requirement. Under the circumstances, we believe that the elimination
of the Stanford requirement provides a valid basis for not reinstating
the solicitation. In light of this conclusion, we need not consider the
protester's arguments concerning the propriety of the agency's initial
basis for cancellation.
MSC does also argue that cancellation was not appropriate in any
event because the quantity changes could have been negotiated with it
after award. Generally, however, the integrity of the competitive
bidding system precludes an agency from awarding a contract competed
under a given set of requirements with the intention of materially
changing those requirements after award. Kings Point Mfg., Co. Inc.,
B-210757, Sept. 19, 1983, 83-2 CPD Paragraph 342. It is clear from the
record here that the elimination of Order B/B.B from the requirement
would have a material impact on the bid prices and possibly on the
ability of a firm to bid. Thus, award to MSC in view of this change
would have been improper.
Finally, MSC argues that in the event that we determine not to
reinstate the canceled solicitation, it is entitled to bid preparation
costs and its cost of pursuing this protest. We disagree. A
prerequisite to entitlement to bid preparation costs as a result of
cancellation of a solicitation is a showing that the government acted
arbitrarily or capriciously with respect to the claimant's bid. M&M
Services, Inc., B-218029, Mar. 27, 1985, 85-1 CPD Paragraph 360. Here,
we have concluded that cancellation constituted a reasonable exercise of
discretion by the agency. The recovery of bid preparation cost is
accordingly inappropiate. Similarly, since we have determined that the
cancellation was proper the protester does not qualify for the
reimbursement of its cost of pursuing the protest. Bid Protest
Regulations, 4 C.F.R. Sections 21.6(d) and (e) (1985).
The protest is denied.
Harry R. Van Cleve
General Counsel
(1) The record shows that one-third of MSC's total evaluted bid
prices for all orders represented prices for Orders B or B.B.
FILE: B-220565 85-2 CPD 673
DATE: December 16, 1985
MATTER OF: AMG Associates, Inc.
CONTRACTS - NEGOTIATION - AWARDS - PRICE DETERMINATIVE FACTOR
1. Contracting officer properly may decide in favor of a technically
lower rated proposal in order to take advantage of its lower cost, even
though cost was the least important evaluation criterion, where he
reasonably determines that the cost premium involved in making an award
to the higher rated, higher priced offeror is not jusitifed in light of
the acceptable level of technical competence available at the lower
cost.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION - COST
REALISM - SCOPE OF GAO REVIEW
2. Agency determinations resulting from a cost realism analysis will
not be disturbed unless they clearly lack a reasonable basis, and the
protester has not shown that the agency's determinations were
unreasonable in this case.
AMG Associates, Inc. protests the proposed award of a
cost-plus-fixed-fee (CPFF), level-of-effort contract to Specialty
Systems, Inc. (SSI) under request for proposals (RFP) No.
N00140-84-R-1178, a small business set-aside, issued by the Naval
Regional Contracting Center, Philadelphia, Pennsylvania for technical
and engineering services to support software tasks for common automatic
test equipment. The Navy determined that the proposal submitted by AMG,
the incumbent contractor for this requirement, was not sufficiently
superior from a technical standpoint to justify award at its higher
proposed costs. AMG disputes this finding and argues that its proposal
was clearly technically superior. AMG also argues that the Navy did not
properly evaluate the realism of SSI's proposed cost. /1/
We deny the protest.
Background
For award purposes, the solicitation listed the following five
evaluation criteria:
(1) Corporate Past Performance
(2) Personnel Resources
(3) Management Approach, Organization and Staffing/Subcontracting
(4) Contractor Facilities
(5) Cost and Cost Realism
The solicitation stated that factors (1) and (2) were equal and most
important, while the remaining factors were listed in descending order
of importance. Concerning the Cost and Cost Realism criterion (factor
(5)), the solicitation advised offerors that although cost was the least
important factor, it nonetheless was important, and that "the degree of
its importance will increase with the degree of equality of the
proposals in relation to the other factors on which selection is to be
based."
The solicitation also included a detailed list of tasks, and provided
precise minimum qualifications and level-of-effort estimates for certain
labor categories -- such as senior project engineer, computer facility
manager, electronics engineer, and operations supervisor. The offeror's
proposed labor rate times the estimated manhours for each category, plus
the offeror's proposed fee, basically provided the basis for cost
evaluation.
Two firms, SSI and AMG, submitted proposals. The Navy evaluated the
initial technical and cost proposals, and both firms were determined to
be in the competitive range. /2/ These firms were subsequently
requested to provide best and final offers.
The best and final offers of the two firms were evaluated with regard
to technical factors and cost reasonableness and realism. The agency
found the offeror's responses to its technical concerns satisfactory.
The results of the cost analysis were as follows:
TABLE OMITTED
The Navy's adjusted amounts reflected Defense Contract Audit Agency
(DCAA) recommendations and other adjustments deemed necessary to project
the total actual cost of the proposed CPFF contract.
While AMG's proposal was found by the Navy to be superior in
corporate experience, the proposals were considered equal with respect
to all other technical factors, and the technical difference between the
two proposals was not considered to be sufficiently significant to award
the contract to AMG at a premium cost. Therefore, the Navy's technical
evaluators recommended that SSI be awarded the contract.
Technical Evaluation
AMG disputes the Navy's determination that there was not a sufficient
technical difference between AMG's and SSI's technical proposals to
justify award to AMG at its higher proposed cost. Since the Navy did
not numerically score the technical proposals, AMG relies on descriptive
statements appearing in certain portions of the technical evaluation
narrative reports to support its contention regarding the superiority of
its proposal. Specifically, AMG argues that its proposal was clearly
superior in the areas of Corporate Past Performance and Personnel
Resources.
AMG notes that with respect to Corporate Past Performance, the Navy's
evaluation of initial proposals found AMG's experience to be "highly
acceptable" while SSI was only found to be "acceptable." AMG also notes
that a subsequent narrative statement by the evaluators highlighted
areas where AMG's experience with various types of equipment was
evaluated "much higher" than SSI's experience. AMG asserts that
experience in these areas relates to almost all of the work encompassed
by the RFP.
With respect to Personnel Resources, AMG points to a statement in the
evaluation report that the "AMG proposal contains somewhat more depth in
numbers." In addition, AMG notes that SSI was initially evaluated by the
Navy as only "conditionally acceptable," because the SSI proposal
improperly designated its president as filling two separate full-time
positions, senior principal engineer and president. AMG also alleges
that, even according to the Navy, SSI would have to expend 15,000 extra
manhours (15-17 personnel) and require an additional 2 or 3 Navy
personnel during the contract start-up period (first 4-8 months) to
perform satisfactorily. The protester asserts that this proves its
proposal is superior.
In response, the Navy emphasizes that the use of descriptive terms in
the evaluation reports indicating superiority of the AMG proposal in the
area of Corporate Past Performance was not intended to describe AMG
superiority with respect to the entire range of contract services from a
corporate experience standpoint. The Navy states that while AMG does
show greater overall depth and breadth of corporate experience, SSI
demonstrated relevant and meaningful past corporate experience.
Specifically, SSI provided a description of previous contracts that were
similar in nature to the work contemplated by this RFP and submitted a
description of previous tasks performed and actual work samples related
to the tasks in the RFP. Thus, while the record shows that the Navy in
fact found AMG's experience superior, the record also shows that SSI's
experience was considered more than adequate to meet the agency's needs.
Concerning Personnel Resources, the agency report indicates that SSI
corrected the deficiency which was the basis for finding its initial
proposal conditionally acceptable for this criterion (one employee
filling two positions). With respect to the extra man-hours that SSI's
proposal allegedly would require, the evaluation report merely notes
that, during the start-up period, a lower level of efficiency equivalent
to 15,000 manhours can be expected from SSI in tasks involving
compilers, and that an additional 2,000 government manhours will be
required as a result. The Navy states that this lower level of
efficiency does not mean that SSI would employ or be reimbursed by the
government for additional manhours during this period; rather, the Navy
merely estimated that SSI would complete less tasks than AMG during the
early contract performance period. The Navy indicates that it expects
SSI to be as efficient as AMG after the start-up period. /3/ The Navy
reports that it considered this matter in its technical evaluation, and
estimated that its cost impact was insignificant. In this connection,
even if the cost of 15,000 extra manhours, using the protester's own
estimate of SSI's true burdened labor rate, were added to SSI's proposed
cost, SSI would still be significantly lower than AMG from a cost
standpoint.
Accordingly, despite AMG's assertions to the contrary, the record
shows that the Navy reasonably considered the proposals to be
essentially equal with respect to all technical factors, except
Corporate Past Performance. The Navy's technical personnel conducted a
cost/technical tradeoff analysis and concluded that AMG's technical
superiority did not justify a contract award at its higher price.
Specifically, the Navy determined that a cost premium of 3-5 percent
over the realistic cost of SSI would be justified to obtain AMG's
technically higher rated services. Since the difference in cost was
much greater (approximately 27 percent), the contracting officer decided
to award the contract to SSI.
We have recognized that in a negotiated procurement selection
officials have the discretion to make determinations concerning cost/
technical tradeoffs and the extent to which one may be sacrificed for
the other is governed only by the tests of rationality and consistency
with the established evaluation factors. Grey Advertising, Inc., 55
Comp. Gen. 1111 (1976), 76-1 CPD Paragraph 325. Thus, even when cost is
the least important evaluation criterion, we will uphold an award to a
lower priced, lower scored offeror where it is determined that the cost
premium involved in making an award to a higher rated, higher priced
offeror is not justified in light of the acceptable level of technical
competence available at the lower costs. The BDM Corp., B-202707, Oct.
28, 1981, 81-2 CPD Paragraph 354. The determining element is not the
difference in technical merit, per se, but the considered judgment of
the procuring agency concerning the significance of that difference.
Hager, Sharp & Abramson, Inc., B-201368, May 8, 1981, 81-1 CPD Paragraph
365.
Here, AMG has, at most, presented some evidence indicating that its
proposal was technically superior in certain areas. Indeed, the Navy
does not dispute this. However, the contracting officer made a
considered judgment, based on overall technical and cost considerations,
to award the contract to SSI as the most advantageous offeror. The
record shows that the contracting officer specifically considered
whether the additional technical merit offered by AMG was worth the
considerable extra expense associated with the proposal. The
contracting officer determined that the difference in technical merit
was not significant, particularly in view of the great difference in
cost. This is exactly the kind of decision making which is vested in
the discretion of selection officials, and we find no basis to object to
it here. Accordingly, this basis for protest is denied. /4/
Cost Realism Analysis
In its initial protest, AMG alleged that the Navy failed to conduct
any cost realism analysis of SSI's cost proposal as required by the
terms of the RFP. Moreover, AMG alleged that the Navy selected SSI as
the successful offeror based on SSI's low, unrealistic estimated costs.
AMG contrasts SSI's allegedly unrealistic cost with its own cost that is
"based upon its past actual experience and upon realistic projections
derived therefrom."
In its report, the Navy explained that an independent cost realism
analysis was performed on SSI's cost proposal with fully audited rates,
adjusted as necessary, based on a DCAA audit. In its comments, the
protester now primarily asserts that the Navy improperly accepted "at
face value" SSI's proposed payroll costs, which are allegedly
unrealistically low. In support of its position, the protester has
submitted a salary survey by a trade journal indicating that actual
market salary rates are considerably higher than the direct labor rates
proposed by SSI, especially when the personnel experience and
qualification requirements of this RFP and the prevailing salaries in
the geographical area of the place of contract performance are taken
into account. Further, AMG asserts that SSI will employ, in part,
current AMG employees who are paid in excess of SSI's proposed rates.
In this connection, the protester has submitted, among other things,
affidavits from four current employees who have been offered employment
by SSI at or above their current levels.
We have consistently held that a contracting agency's analysis of
competing cost proposals involves the exercise of informed judgment, and
we therefore will not disturb a cost realism determination unless it
lacks a reasonable basis. Prospective Computer Analysts, B-203095,
Sept. 20, 1982, 82-2 CPD Paragraph 234. The extent to which proposed
costs are examined is a matter of agency discretion. Systematics
General Corp., B-214171, Jan. 22, 1985, 85-1 CPD Paragraph 73. Where
the agency has reviewed the offeror's proposed costs against a DCAA
audit report, as well as against its own estimate, we have found the
cost analysis technique a reasonable exercise of the agency's
discretion. See JVAN, Inc., B-220357, Aug. 28, 1981, 81-2 CPD Paragraph
184.
We are not persuaded that the Navy's cost realism analysis was
faulty. The DCAA reviewed SSI's proposed labor and overhead rates and
did not find them understated. Specifically, DCAA found that SSI's
proposed direct labor cost primarily consisted of the personnel costs of
SSI's subcontractor, which were based on actual average rates, by labor
category, currently being paid. Similarly, SSI's own labor rates were
found to be based primarily on its existing work force for similar work.
The Navy independently reviewed the rates against DCAA's report, as
well its own costs negotiator's cost realism estimate, and found no
basis to question them. Moreover, we note that the Navy's independent
review of SSI's proposed rates specifically indicates that DCAA reviewed
both the actual rates available and the offers made to new hires, /5/
and determined that the proposed rates were realistic. In our view,
this approach to assessing cost realism was reasonable, and we do not
consider a potentially self-serving trade journal article sufficient
evidence to prove the contrary.
Concerning the offers made to four AMG employees at salaries
equivalent to or greater than they currently earn, we note that the
protester has not indicated what these salaries are, or demonstrated
that they actually exceed the labor rates for the applicable labor
category proposed by SSI. Accordingly, AMG simply has failed to meet
its burden of affirmatively proving its case in this respect.
The protester also alleges that the Navy's cost analysis failed to
take into account certain relocation expenses of SSI for employees not
currently located in the geographical area of contract performance. The
agency states, however, that the solicitation required offerors to
include in their proposals the maximum amount to be reimbursed for
relocation costs, and that SSI inserted "O" in the line item included
for that purpose.
The protest is denied.
Harry R. Van Cleve
General Counsel
(1) AMG also asserts that SSI is ineligible for award because SSI's
relationship with its subcontractor is allegedly "the legal equivalent
of a joint venture agreement," so that SSI does not qualify as a small
business concern. Our Office does not consider size status protests as
the Small Business Administration (SBA) has conclusive authority to
determine questions of size status. Mark Dunning Industries, Inc.,
B-217500, Jan. 18, 1985, 85-1 CPD Paragraph 68. We understand that the
contracting officer forwarded AMG's size status protest to SBA, that SBA
found SSI qualified as a small business and that AMG has appealed this
determination to the SBA Office of Hearings and Appeals.
(2) The Navy did not numerically score the technical proposals;
rather, short narrative descriptions were used to evaluate the
proposals. The contracting officer states that AMG has not discussed
the results of the technical evaluation with him and has never requested
a debriefing.
(3) AMG also alleges that this technical deficiency violates section
L71, paragraph 2(b) of the RFP. However, that provision requires only
that all personnel be fully trained prior to reporting for work, and
that any initial training will be at the contractor's expense. We do
not think that the agency's conclusions about SSI's initial performance
efficiency indicate that SSI's staff will be untrained, in violation of
the cited RFP section.
(4) In a late submission to our Office, the protester cites our
decision, DLI Engineering Corp., B-218335, June 28, 1985, 85-1 CPD
Paragraph 742, for the proposition that a markedly superior higher-cost
proposal must receive an award unless the award to the inferior
lower-cost proposal is supported by "extremely strong justification." In
that decision, however, one competing proposal was "nearly perfect,"
while the other was merely "average." No such marked technical
difference exists here.
(5) The evaluation documents indicate that only 10 of the proposed 62
employees will be new hires.
B-220561.2 April 8, 1986
BIDS - OPENING - TIME FOR OPENING DETERMINATION
The bid opening officer's declaration of bid opening time,
based on the bid opening room clock, must be regarded as prima
facie evidence of the correct time to resolve inevitable
differences of reported times. Absent a clear indication that the
bid opening room clock showed a different time than announced, or
that the officer's reliance on the clock was unreasonable under
the circumstances, the authorized declaration of the bid opening
time establishes that a subsequently hand-delivered bid is late.
The Honorable Jeff Bingaman
United States Senate
Dear Senator Bingaman:
This responds to your letter dated February 17, 1986, on behalf of K.
L. Conwell Corporation regarding the Air Force's rejection of Conwell's
bid under invitation for bids (IFB) No. F29650-85-B-0017, and our
decision of January 23, 1986 (B-220561), that denied Conwell's protest
of the Air Force's action.
The Air Force rejected Conwell's bid as late because a Conwell
representative hand-delivered the bid after the bid opening officer had
declared the arrival of 10:30 a.m.--the bid opening time established by
the IFB--and had commenced reading the bid submitted before that time.
The problem arose in this case because while the bid opening officer
relied on the time shown on the clock in the bid opening room, an Air
Force employee in the bid depository room, upon receiving the Conwell
bid, telephoned a local bank's time report and recorded a time of 10:29
a.m. on the bid's envelope.
Applicable procurement statutes do not detail the procedures for
sealed bidding, but do state, in pertinent part, that sealed bids shall
be opened publicly at the time and place stated in the solicitation. 10
U.S.C.A. Sec. 2305(b)(3) (West Supp. 1985).
The basic purpose of this requirement is to prevent even the
appearance of opportunities for fraud or undue advantage which might
occur if bidders could submit their bids after the time set for bid
opening. Therefore, the general rule is that a bid must be in the hands
of the bid opening officer, or other government representative
authorized to receive it, at the scheduled time for opening. Federal
Acquisition Regulation (FAR), 48 C.F.R. Sec. 14.304-1 (1984). Further,
a basic rule governing sealed bidding is that a bidder is responsible
for delivering its bid to the proper place at the proper time, and the
late delivery of a bid generally requires its rejection.
The basic question in Conwell's case is what determines the arrival
of the bid opening time, and whether the bid opening officer's conduct
in declaring the time caused an otherwise timely submitted bid to be
late.
The FAR provides that the bid opening officer must decide when the
time set for opening bids has arrived, inform those present of the
decision, and proceed with bid opening unless the officer has reason to
believe that bids of an important segment of bidders have been delayed
for causes beyond their control and without their fault or the normal
governmental process is interrupted so that the scheduled opening of
bids is impractical. In our view, the time used by the bid opening
officer must be regarded as prima facie evidence of the correct time to
resolve inevitable and irreconcilable differences of reported times.
Unless there is a clear indication that the bid opening room clock
showed a different time than that announced by the bid opening officer,
or that the officer's reliance on the clock was unreasonable under the
circumstances, the authorized declaration of the bid opening time is
determinative of when the time for bid opening has arrived and therefore
whether a bid is late.
In Conwell's case, there was nothing in the record establishing that
the bid opening room clock in fact showed a time before 10:30 a.m. when
the bid opening officer declared bid opening. There also was nothing
showing that the officer's reliance on the bid opening clock was
unreasonable. The fact that a bank's telephonic time report
subsequently indicated a time minutes behind the bid opening room's
clock does not establish that the bid opening officer's action was
unreasonable. While Conwell alleged that the Air Force used the
telephonic report in place of its malfunctioning time/date machine to
record the receipt of mailed bids, the time/date stamp does not control
the declaration of bid opening, and it is undisputed that Conwell's bid
was submitted after that declaration and the reading of the awardee's
bid had commenced. Therefore, consistent with the rules regarding
sealed bidding and the need to protect the integrity of the competitive
bidding systems, we found that the Air Force properly rejected Conwell's
bid since it was late and the government was not the paramount cause of
lateness.
The case you cite in your letter, Veterans Administration--Request
for Advance Decision, 62 Comp. Gen. 196 (1983), 83-1 CPD P 141, is
considerablv different from Conwell's case. In the 1983 case, a
government employee improperly returned a timely submitted bid to the
possession of the bidder who thereafter returned the bid to the
government's possession after the time set for bid opening, but before
the opening of any bids. The government considered the bid timely after
a determination that the integrity of the competitive bidding system
would not be compromised. In Conwell's case, on the other hand, the bid
was submitted late as lateness is determined under applicable legal
standards, and there was no basis for finding that any improper
government action was the cause of the late delivery.
We note your statement that our decision in this case makes it appear
that we are reluctant to find against the government in bid protests.
In fact, in cases such as this, involving late hand-carried bids, we
have sustained protests because of some kind of improper government
action that caused the bid to be late, even though there are no
provisions in the procurement regulations that allow acceptance of a
hand-carried bid that is received late, regardless of the reason for the
lateness. See, e.g., All-States RR Contracting, Inc., B-216048.2, Feb.
11, 1985, 85-1 CPD P 174; Scot Inc., 57 Comp. Gen. 119 (1977), 77-2 CPD
P 425; LeChase Constr. Corp., B-183609, July 1, 1975, 75-2 CPD P 5; 51
Comp. Gen. 69 (1971); see also The Standard Products Co., B-215832,
Jan. 23, 1985, 85-1 CPD P 86; Hydro Fitting Mfg. Corp., 54 Comp. Gen.
999 (1975), 75-1 CPD P 331 (where we applied similar standards to
telegraphic bids). We would have denied the protests had we relied
solely on the traditional approach reflecting existing regulatory
provisions. The Conwell protest was denied not because of any
reluctance on our part to sustain protests, but because under the law
the government did not act improperly.
We trust that this letter responds to your concerns about our
decision. We understand that the Air Force will provide you with a
response to particular questions Conwell raised regarding the agency's
bid opening practices and procedures.
Sincerely yours,
Harry R. Van Cleve
General Counsel
FILE: B-220561 86-1 CPD 79
DATE: January 23, 1986
MATTER OF: K. L. Conwell Corporation
BIDS - LATE - REJECTION - PROPRIETY
Where the bid opening officer receives a hand-carried bid after
declaring the arrival of the 10:30 a.m. bid opening time as shown on the
bid opening room clock, but at 10:29 a.m. according to a recorded
telephonic time report, the agency properly rejected the bid as late.
The bid opening officer's declaration is determinative of lateness
unless shown to be unreasonable under the circumstances
K. L. Conwell Corporation (Conwell) protests the rejection of its bid
as late under invitation for bids (IFB) No. F29650-85-B0017 issued by
Kirtland Air Force Base, New Mexico (Air Force) for the renovation of
the interior and addition to the Officers' Club. Conwell contends that
it should be awarded the contract because its low bid was in government
hands one minute prior to the deadline for bids.
The protest is denied.
The IFB, as amended, required that bids be submitted by 10:30 a.m.,
August 23, 1985, to Room 100, Building 499, Kirtland Contracting Center.
The Air Force states that at approximately 10:20 a m., on August 23,
1985, there were no bids in the bid depository in room 100, but minutes
later a Flinchum Construction Co. representative hand-carried a sealed
bid to the bid opening room, located close to the depository room. The
bid opening officer states that she announced, by the clock in the bid
opening room, that it was 10:30 a.m., the time set for bid opening by
the IFB, and that no further hand-carried bids would be accepted.
The Air Force states that a Conwell representative appeared in the
doorway of the bid opening room at 10:32 a.m., as shown on the clock in
the bid opening room, while Flinchum's bid was being read. Seeing that
bid opening was in progress, he threw an envelope to the ceiling near
the bid depository room. The envelope was picked up by an Air Force
employee who was informed by the Conwell representative that it was a
bid. Another employee in the bid depository room recorded the time of
"10:29 a.m." on the envelope and signed it after calling a bank
recording for the time because the time/date stamp machine in the bid
depository room was out of order. The Conwell representative then
accompanied an Air Force employee to the bid opening room where
Conwell's bid envelope was presented to the bid opening officer. After
noting the time of "10:29 a.m." on the envelope, the bid opening officer
opened and read Conwell's bid. Subsequently, the Air Force rejected
Conwell's bid as late because it was delivered after bid opening had
commenced.
Conwell contends that under the Federal Acquisition Regulation (FAR),
48 C.F.R. Section 14.304-1(c) (1984), the only acceptable evidence to
determine the time of receipt of its bid is the time of "10:29 a.m."
that is recorded on its bid envelope and that the bid opening officer's
interpretation of the correct time is irrelevant. Conwell also states,
and the Air Force has not denied, that on a subsequent occasion when it
delivered a bid to the same bid depository room, the Air Force employee
again called the bank recording to determine the time of receipt because
the time/date stamp machine was still out of order.
As a general rule, a bidder is responsible for delivering its bid to
the proper place at the proper time. Late bids may be considered only
as provided for in the solicitation. The late bid provision
incorporated in the IFB, found at 48 C.F.R. Section 52.214-7 (which is
identical to FAR Section 14.304-1), applies to bids sent by mail. In
this case, Conwell hand-carried its bid, so the IFB provision does not
apply. Consolidated Marketing Network, Inc., B-217256, Mar. 21, 1985,
85-1 CPD Paragraph 330; Chemical Waste Management, Inc., B-215382,
Sept. 10, 1984, 84-2 CPD Paragraph 274. Moreover, contrary to Conwell's
contention, nothing in the solicitation or in federal regulations or
decisions of our Office require that the timely receipt of hand-carried
bids be proven only by a time-date stamp or other documentary evidence
maintained by the government installation. Instead, where the issue is
whether a hand-carried bid is timely received, all relevant evidence in
the record may be considered. All-States Railroad Contracting, Inc.,
B-216048.2, Feb. 11, 1985, 85-1 CPD Paragraph 174.
The record indicates that the Conwell representative arrived with its
bid either one minute prior to or two minutes after the time set for bid
opening. Thus, the question raised for consideration is who determines
that the correct time set for bid opening has arrived. Under FAR, 48
C.F.R. Section 14.402-1(a), the bid opening officer must decide when the
time set for opening bids has arrived and must inform those present of
that decision. That section also requires the bid opening officer to
personally and publicly open all bids received before that time.
The bid opening officer used the clock in the bid opening room to
determine the time set for bid opening. The bid opening officer's
declaration of bid opening time is determinative of lateness unless it
is shown to be unreasonable under the circumstances. See B-164625, July
11, 1968 (a bid opening officer did not abuse his authority where he
declared bid opening based on the clock in the bid opening room, later
shown to be two minutes faster than a telephonic time report); see also
Blount Brothers Corp., B-212788, Oct. 31, 1983, 83-2 CPD Paragraph 521.
Aside from the telephonic report, the record contains no evidence,
and Conwell does not allege, that the bid opening officer acted
unreasonably in declaring bid opening based on the bid opening room's
clock. The difference of a very few minutes between that clock and
telephonic report is not sufficient in itself to render the declaration
unreasonable. See B-164625, supra. Although Conwell argues that the
opening of its bid demonstrated the Air Force's belief that its bid was
timely received, and therefore its bid must be accepted, we have held
that the opening of a bid does not mandate its consideration. Chestnut
Hill Construction, Inc., B-216891, Apr. 18, 1985, 85-1 CPD Paragraph
443.
The protest therefore is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220560 85-2 CPD 554 DATE: November 13, 1985
MATTER OF: J.M. Cashman, Inc.
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES - FILING
PROTEST WITH AGENCY
1. Where agency knew the specific aspect of the procurement to
which the protester objected in a protest at that level,
subsequent protest to GAO will not be dismissed on the basis that
the actual agency-level filing was not sufficiently detailed.
CONTRACTS - SMALL BUSINESS CONCERNS - AWARDS - SET-ASIDES -
WITHDRAWAL - PROPRIETY
2. GAO will not object to a contracting officer's
pre-bid-opening decision to withdraw a small business set-aside
and issue the solicitation on an unrestricted basis where the
record does not show the official abused his discretion in
determining that offers from at least two responsible small
businesses could not reasonably be expected.
J.M. Cashman, Inc., protests the U.S. Army Corps of Engineers'
decision not to set aside for small businesses invitation for bids (IFB)
No. DACW33-85-B-0051 for maintenance dredging of the Thames River in
Connecticut. Although the IFB as originially issued was set aside, the
contracting officer subsequently concluded that the Corps could not
reasonably expect offers f rom two responsible small businesses and,
therefore, withdrew the set-aside by amendment to the invitation.
Cashman contests the contracting officer's conclusion.
We deny the protest.
The Corps' New England Division, upon issuing the IFB as a set-aside
for small business, received protests from two large business firms
complaining that the division had set aside every dredging project that
year. The firms argued that while set-asides might be appropriate for
small projects, the scope of work involved in this deep draft dredging
effort was so extensive that large businesses should be permitted to
compete, as they had on past projects of this type and size.
In response to these protests, the contracting officer proceeded to
review the history of earlier similar dredging projects. This review
showed that in the past, the Department of the Navy had been responsible
for dredging the Thames River and had procured the services on an
unrestricted basis, with large businesses winning the competitions.
Further, the history of four deep draft dredging procurements in the
general geographical area, requiring the same type of equipment needed
to perform the Thames River work, showed that, of four small businesses
that had requested plans and specifications, only Cashman bid on all
four (winning one), with one other firm, Hydrodredge, bidding on two.
Based on this information, the contracting officer, with the
concurrence of the activity's small business adviser, decided that a
set-aside was inappropriate under the Federal Acquisition Regulation
(FAR), 48 C.F.R. Sec. 19.502-2 (1984), which requires a set-aside only
where there is a reasonable expectation of offers from at least two
responsible small business concerns and that award will be at a
reasonable price. The contracting of ficer therefore withdrew the
restriction by amending the IFB.
Cashman asserts that Hydrodredge tried to bid on a third project, but
the bid was rejected as late. Cashman further asserts that both it and
Hydrodredge bid on a fifth, earlier contract and argues that the Corps
should have included that project in its historical analysis. Cashman
also states that since the last deep dredging project, a new small
business has been formed and questions how the contracting officer could
assume that this firm would not compete if the procurement in issue were
restricted. Finally, Cashman suggests that the limited degree of small
business competition on the reviewed unrestricted procurements is
misleading, since small businesses that might have bid against similar
size firms probably chose not to bid against large businesses.
Initially, the Corps argues that the protest should be dismissed
without considering its merits. The Corps points out that under section
21.2(a) (1) of our Bid Protest Regulations, 4 C.F.R. part 21 (1985), a
protest alleging an apparent solicitation impropriety, like the decision
not to restrict a procurement, must be filed with either the contracting
agency or our Office before bid opening in order to be timely. While
Cashman initially filed with the Corps shortly before bid opening--the
protest to our Office was filed within 10 working days after the Corps
opened bids without acting on Cashman's complaint (see section 21.2(a)
(3))--the Corps notes that the pre-bid-opening complaint stated only
that any award under the invitation was protested, without providing any
basis for complaint. The Corps argues that this f iling was inadequate
under section 21.1 (c) (4) of our Regulations, which requires that a
protest include a detailed statement of its legal and factual grounds.
We will not dismiss the matter. Cashman states, and the Corps does
not dispute, that before protesting to the Corps, Cashman had numerous
conversations with contracting officials about its concern. Since the
agency knew of the specific aspect of the procurement to which the
objection was being made in the pre-bid-opening protest, dismissal of
the matter for the reason argued, particularly at this point in the
protest process, is not warranted. Cf. Marine Logistics Corp.,
B-218150, May 30, 1985, 85-1 C.P.D. P 614.
As to the protest's merits, it is not clear why the Corps originally
set this procurement aside. We see no legal basis, however, to object
to the decision to withdraw the restriction.
The judgment as to whether there is a reasonable expectation that
offers will be received from a sufficient number of small businesses to
warrant a set-aside under FAR, 48 C.F.R. Sec. 19.502-2, basically
involves a business decision within the broad discretion of the
contracting officials, and our review generally is limited to
ascertaining whether those officials have abused that discretion.
Automated Datatron, Inc., B-218284, May 9, 1985, 85-1 C.P.D. P 516.
We appreciate Cashman's argument that the history of limited small
business bidding on unrestricted procurements should not be held to
establish a lack of small business interest on restricted ones.
Nevertheless, the fact is that an agency must have some basis on which
to make the judgment whether a set-aside is warranted, and we believe
prior related procurement history necessarily is an appropriate and
important consideration in that respect. See Mantech International
Corp., B-216505, Feb. 11, 1985, 85-1 C.P.D. P 176. Here, the Corps'
historical analysis encompassed four of its more recent deep draft
dredging jobs and, while the Corps could have gone back in time and
included one or more jobs for its review, we see nothing improper in the
agency's basing its judgment on the actual results of its most recent
projects. Further, Cashman's suggestion that there was a new small
business that might have been interested in bidding on a set-aside
clearly does not establish, without any input from the new firm, that
the Corps reasonably could expect it to submit an offer.
Under the circumstances, we cannot say that the contracting officer
abused his discretion in withdrawing the set-aside. The protest is
denied.
Harry R. Van Cleve
General Counsel
FILE: B-220559.2 85-2 CPD 608
DATE: November 26, 1985
MATTER OF: Earth Resources Consultants, Inc. -- Request for
Reconsideration
CONTRACTS - PROTESTS - MOOT, ACADEMIC, ETC. QUESTIONS - SOLICITATION
CANCELED
1. Where GAO's bid protest authority over objections to solicitation
provisions is limited to matters that concern a proposed contract for
the procurement of property or services, GAO is not the proper forum to
consider the agency's alleged misuse of the protester's proprietary
information since the challenged solicitation has been canceled and,
hence, there is no longer a proposed contract in issue.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
RECONSIDERATION REQUESTS - ERROR OF FACT OR LAW - NOT ESTABLISHED
2. Prior dismissal of a protest as academic due to the agency's
cancellation of the challenged solicitation is affirmed since the
protester's mere speculation as to the agency's future course of action
in satisfying the requirement is not a valid reason for GAO to consider
the merits of the protest.
Earth Resources Consultants, Inc. (ERC) requests reconsideration of
our October 10, 1985, dismissal of its protest alleging that invitation
for bids (IFB) No. DACA45-85-B-0121, issued by the Army Corps of
Engineers, improperly contained ERC's proprietary and trade secret
information. We dismissed the protest as academic because the
solicitation was being canceled due to lack of funding. ERC now
requests reconsideration of our prior dismissal on the ground that
cancellation of the IFB was not sufficient to render the protest
academic. We affirm that dismissal.
In its original protest, ERC asserted that the Corps had utilized the
firm's proprietary and trade secret information in preparing the IFB in
violation of an agreement not to disclose the information to third
parties. ERC requested that this Office direct the Corps to cancel the
solicitation; refrain from further disseminating the information; ask
all parties receiving the IFB to return their copies to the Corps; and
notify these parties that ERC regarded the information as proprietary.
However, the Corps shortly thereafter informed this Office that the
solicitation was being canceled because funding for the project had
expired at the end of fiscal year 1985, and it was not certain when
fiscal year 1986 funding would become available. Accordingly, we
dismissed ERC's protest as academic pursuant to our Bid Protest
Regulations, 4 C.F.R. Section 21.3(f) (1985), which provides for
dismissal of a protest when the protest is otherwise not for our
consideration. In this regard, it has been our general view that
cancellation of a challenged solicitation renders the protest academic.
The Wheelabrator Corp., B-219419, July 29, 1985, 85-2 CPF Paragraph 107.
In its request for reconsideration, ERC argues that cancellation of
the solicitation, although one of the forms of corrective action
originally requested, is not sufficient to render the protest academic
because copies of the IFB remain in the possession of third parties who
have not been advised by the Corps that the IFB contains ERC's
proprietary information.
Moreover, ERC asserts that it may be possible for the Corps to award
the requirement when funding becomes available without the need to
publicize the action. ERC refers to the Federal Acquisition Regulation
(FAR), Section 5.202(a)(2) (FAC 84-5, Apr. 1, 1985), which provides that
a contracting agency need not publicize notice of a proposed contract
action in the Commerce Business Daily (CBD) when the contract action is
to fulfill a need for supplies or services that 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 and not comply with the specified CBD
publication procedures. Therefore, in ERC's view, this provision
indicates that the Corps could, without notice, award a contract to a
party in possession of ERC's proprietary information without ever
formally reissuing the solicitation.
We find nothing in ERC's request for reconsideration to establish
that our prior dismissal was legally or factually erroneous. See
Department of Labor -- Reconsideration, B-214564.2, Jan. 3, 1985, 85-1
CPD Paragraph 13.
With regard to the fact that third parties still retain copies of the
solicitation and have not been advised that it contains ERC's
proprietary information, the fundamental issue as to the Corps' alleged
misuse of that information has never been decided on the merits. /1/
Our bid protest authority over objections to solicitation provisions is
limited to matters that concern a proposed contract for the procurement
of property or services. 31 U.S.C.A. Section 3551(1) (West Supp.
1985). Since the solicitation has been canceled and, hence, there is no
longer a proposed contract in issue, we do not have a basis upon which
to consider the alleged misuse of ERC's proprietary information. Thus,
at this time, this Office is not the proper forum to consider the
question.
We also believe that ERC errs in relying on section 5.202(a)(2) of
the FAR to support its argument that the protest is not academic. The
Corps has advised this Office that there are no immediate plans to
reissue the solicitation, but that it will be reissued sometime in
fiscal year 1986 when funding becomes available. Accordingly, it is
speculative for ERC to assert that, even though the contemplated project
involves the removal of toxic wastes, the Corps, on the ground of
urgency, will select one of the firms in possession of ERC's information
for the award without ever publicizing the proposed action or formally
reissuing the solicitation. The mere existence of that possibility is
not a valid reason for us to consider the merits of the protest. See
Aviation Enterprises, Inc. -- Reconsideration, B-215662.4, Dec. 3, 1984,
84-2 CPD Paragraph 603.
Our prior dismissal is affirmed.
Harry R. Van Cleve
General Counsel
(1) The Corps has expressly denied the allegation.
FILE: B-220557 85-2 CPD 353
DATE: September 27, 1985
MATTER OF: Security Engineered Machinery
DIGEST:
BIDS - INVITATION FOR BIDS - SPECIFICATIONS - BRAND NAME OR EQUAL -
SALIENT CHARACTERISTICS - CONFORMABILITY REQUIREMENTS
In "brand name or equal" procurement, "equal" product need not meet
unstated features of brand name item, but only item's salient
characteristics expressed in the solicitation.
Security Engineered Machinery protests the Department of the Navy's
issuance of a delivery order to Fail Safe Destruction Systems for a
security disintegrator for which both firms have Federal Supply Schedule
(FSS) contracts under the multiple award schedule program of the General
Services Administration (GSA).
We dismiss the protest.
The request for quotations (RFQ), issued on a brand name or equal
basis, identified Security's Model 1012 as the brand name product and
listed several salient characteristics of that product. Security quoted
a price of $12,110 for its Model 1012 while Fail Safe quoted a price of
$11,250 for its Model FS12. Award was made to Fail Safe as the low
quoter.
While apparently conceding that Fail Safe's product met the listed
salient characteristics, Security nevertheless argues that Fail Safe's
equipment fails to meet minimum safety requirements of the Occupational
Safety and Health Administration (OSHA). Security further contends that
its equipment has features such as a safety chock, extended hopper, and
reinforced security screen which Fail Safe's equipment does not; the
protester asserts that these features are necessary for safe operation
of the equipment. Security therefore concludes that the Navy improperly
failed to consider the cost of modifying Fail Safe's equipment to meet
safety requirements during evaluation of quotations.
In a brand name or equal procurement, products need not meet unstated
features of the brand name item, but only the item's salient
characteristics expressed in the solicitation. Scanray Corp., B-215275,
Sept. 17, 1984, 84-2 CPD Paragraph 299. Here, the solicitation clearly
informed quoters of the salient characteristics that equal equipment was
required to meet. Since these characteristics did not include the
safety features that Security alleges are necessary, there was no
requirement that Fail Safe's equipment have those features.
Furthermore, the agency could not properly consider the cost of the
safety features in evaluating the quotations since the solicitation did
not provide for the consideration of those costs. See Stewart &
Stevenson Services, Inc., B-215899, Aug. 13, 1984, 84-2 CPD Paragraph
173.
To the extent that Security is protesting that the specifications,
with only the listed salient characteristics are defective or otherwise
improper, Security's protest is untimely and not for consideration on
the merits under our Bid Protest Regulations, 4 C.F.R. Section 21.2(a)(
1) (1985), which require that protests based upon alleged improprieties
apparent on the face of the solicitation be filed prior to the initial
closing date for receipt of quotations. See Workshops for Retarded
Citizens, B-216787, Oct. 29, 1984, 84-2 CPD Paragraph 475. Security did
not file its protest until after contract award.
The protest is dismissed.
/s/ Ronald Berger
Deputy Associate General Counsel
FILE: B-220556 85-2 CPD 623
DATE: December 3, 1985
MATTER OF: Langaker Marine, Inc.
BONDS - BID - SURETY - OBLIGATION TO GOVERNMENT - ABSENCE OF
AUTHORIZED SIGNATURE ON BOND
Where surety's power of attorney form attached to bid bond fails to
designate the individual who signed the bond on behalf of the surety as
an attorney-in-fact authorized to bind the surety, the agency properly
determined the bond to be defective and the bid nonresponsive because it
is not clear whether the surety would be bound.
Langaker Marine, Inc. (Langaker), protests the rejection of its low
bid under invitation for bids (IFB) No. R10-85-38 issued by the Forest
Service for the construction of a log conveyor system. The agency's
contention, which Langaker disputes, is that Langaker's bid bond was
defective and the bid was, therefore, nonresponsive. We deny the
protest.
Langaker's bid was accompanied by a bid bond naming Safeco Insurance
Company of America (Safeco) as the surety. The bond was signed on
behalf of Safeco by Doris M. Adams, who was identified as
attorney-in-fact. However, a Safeco power of attorney form attached to
the bond, which lists attorney(s)-in-fact designated by Safeco to bind
the company, failed to designate Adams as an attorney-in-fact.
Langaker explains that Adams name inadvertently was omitted from the
power of attorney form. However, the firm states that the contracting
officer knew that Adams was authorized to bind Safeco because in
connection with another Forest Service procurement, Adams was designated
as an attorney-in-fact on a Safeco power of attorney form. On this
basis, Langaker contends that the contracting officer should have
determined the firm's bid to be responsive. In support of its
contention, Langaker cites, General Ship & Engine Works, Inc., 55 Comp.
Gen. 422 (1975), 75-2 C.P.D. Paragraph 269, in which we held that the
evidence required to establish the authority of a particular person who
signed a bid bond on behalf of the bidder is for the determination of
the contracting officer and can be provided after bid opening.
A bid bond or bid guarantee is a type of security that assures that
the bidder will not withdraw its bid within the time specified for
acceptance and, if required, will execute a written contract and furnish
payment and performance bonds. Federal Acquisition Regulation (FAR),
Section 28.001. The purpose of the bid bond is to secure the liability
of a surety to the government if the bidder fails to fulfill these
obligations. Desert Dry Waterproofing Contractors, B-219996, Sept. 4,
1985, 85-2 C.P.D. Paragraph 268; Minority Enterprise, Inc., B-216667,
Jan. 18, 1985, 85-1 C.P.D. Paragraph 57; O.V. Campbell and Sons
Industries, Inc., B-216699, Dec. 24, 1984, 85-1 C.P.D. Paragraph 1.
Thus, a bid bond in the proper amount is regarded as defective,
rendering the bid nonresponsive, if it is not clear that it will bind
the surety. Sevcik-Thomas Builders and Engineers Corp., B-215678, July
30, 1984, 84-2 C.P.D. Paragraph 128. The reason for this is that under
the law of suretyship no one can be obligated to pay the debts or to
perform the duties of another unless that person expressly agrees to be
bound. Andersen Construction Co.; Rapp Constructors, Inc., 63 Comp.
Gen. 248 (1984), 84-1 C.P.D. Paragraph 279. We have held that it is not
proper to consider the reasons for the nonresponsiveness, whether due to
mistake or otherwise. A.D. Roe Company, Inc., 54 Comp. Gen. 271 (1974),
74-2 C.P.D. Paragraph 194.
General Ship & Engine Works, 55 Comp. Gen., supra, and other cases
cited by the protester, concerned the authority of an individual to sign
the bond on behalf of the bidder. In those cases, we held that the bid
may be considered for award because it was clear that the surety was
bound. See e.g., Sevick-Thomas Builders and Engineers Corp., B-215678,
supra. We have also noted that with respect to a bidder (unlike a
surety) "there is a separate agreement in the form of a bid" which
establishes the bidder's obligation to the government and upon
acceptance of that agreement, the bidder is fully bound to perform.
General Ship & Engine Works, Inc., 55 Comp. Gen., supra.
In this case, however, the surety's power of attorney form
authorizing certain individuals to bind the surety did not include the
individual who signed the bond on behalf of the surety. This created an
uncertainty whether the signer was duly authorized to bind the surety.
See, Desert Dry-waterproofing Contractors, B-219996, supra; O. V.
Campbell & Sons Industries, B-216699, supra; Hydro-Dredge Corporation,
B-214408, Apr. 9, 1984, 84-1 C.P.D. Paragraph 400. Since there is a
legitimate question whether the surety could be bound on the bond, the
bid properly was rejected as nonresponsive. See Truesdale Construction
Co., Inc., B-213094, Nov. 18, 1983, 83-2 C.P.D. Paragraph 591. Although
Langaker submitted with its protest a letter from Safeco stating the
company's intent to act as surety for this bid, evidence outside the bid
documents cannot properly be considered in determining the
responsiveness of the bid. Minority Enterprises, Inc., B-216667, supra.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220550 85-2 CPD 477 DATE: October 28, 1985
MATTER OF: Schubert Industries, Inc.
DIGEST:
BIDS - RESPONSIVENESS - FAILURE TO FURNISH SOMETHING REQUIRED -
DESCRIPTIVE LITERATURE
Protest concerning rejection of "equal" bid in response to
brand name or equal solicitation is dismissed. Bid did not
include descriptive literature to establish that item offered met
salient characteristics and the protester has not supported its
contention that the failure should be waived as a minor
technicality.
Schubert Industries m Inc. protests the rejection of its bid for 346
mattresses under invitation for bids (IFB) No. 263-85-B(80)-0110 issued
by the National Institutes of Health. The IFB solicited bids for
Surerest segmented mattresses, or equal. Schubert's bid was rejected as
non-responsive because it did not contain descriptive literature to
enable the contracting officer to establish that the product offered,
tne Schubert Chiropedic mattress model number 401 2m was equal to the
brand name product. Schubert maintains that its failure to submit
descriptive literature was a minor technicality and that as a result of
rejecting its bid, the agency will pay $81,310 for mattresses instead of
$19,722. We dismiss the protest.
The IFB included the standard brand name or equal clause which
permits bidders to offer equal products but requires that offerors
include descriptive material to allow the government to determine
whether their products meet the salient characteristics of the brand
name product described in the IFB. Bidders were specif ically cautioned
that the equality of the product offered would be determined from the
information furnished with their bids and that they should furnish, as a
part of their bids, all descriptive material necessary for this purpose.
To be responsive to a solicitation containing the standard brand name
or equal clause, a bid offering an equal product must contain sufficient
descriptive material to permit the contracting officer to assess whether
the offered product possesses the listed characteristics. See, e.g.,
Bearse Mfg. Co., B-218220, May 7, 1985, 85-1 C.P.D. P 509. The failure
to submit such descriptive information cannot be waiveh as a minor
informality or irregularity. Vista Scientific Corp., B-210416, Apr. 5,
1983, 83-1 C.P.D. P 365, because without descriptive material the
purchasing activity will ordinarily be unable to determine whether
offerors intend to furnish prohucts meeting the government's needs as
reflected in the salient characteristics. Pure Air Filter
Internationale, et al., 56 Comp. Gen. 608 (1977), 77-1 C.P.D. P 342.
Here, the protester submitted no descriptive material with its bid.
It contends that its failure was a minor technicality, but it has not
explained why this is so. Moreover, the protester has not identified in
its protest what the characteristics of its model 4012 mattress are. In
the circumstances, the protester has failed to state a legally
sufficient basis of protest as required oy our Bid Protest Regulations,
4 C.F.R. Sec. 21.1(e), 21.3(f) (1985).
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
FILE: B-220549.2, B-220373, B-220796, B-220843 86-1 CPD 18
DATE: January 8, 1986
MATTER OF: Eastern Metal Products & Fabricators, Inc.
BONDS - BID - SURETY - AFFADAVIT (STANDARD FORM 28) - DEFICIENCIES -
NONDISCLOSURE OF OTHER BOND OBLIGATIONS
Agency may properly reject a bid based on a finding that bidder's
individual sureties on a bid bond are unacceptable because they failed
to disclose outstanding obligations in their Affidavits of Individual
Surety.
Eastern Metal Products & Fabricators, Inc. (Eastern) protests the
rejection of its bids under invitation for bids (IFB) Nos.
F44600-85-B-0087, F44600-85-B-0085, F44600-85-B-0082, F44600-85-B-0066
issued by the Langley Air Force Base for various repair and construction
projects. Eastern was the low bidder or in line for award under each
IFB. The Air Force rejected Eastern's bids because it found that the
bid bonds submitted with the bids were deficient.
We deny the protests.
Under each IFB, bidders were required to submit bid bonds equal to 20
percent of their bid prices. Eastern was bonded by individual rather
than corporate sureties and submitted a completed Affidavit of
Individual Surety (Standard Form 28). Item 10 of the Affidavit required
the individual sureties to disclose all other bonds on which they were
listed as sureties at the time they executed the bid bond for Eastern.
After bids were opened, the Air Force investigated the acceptability of
the individuals proposed by Eastern as sureties. The Air Force
discovered that the named sureties had pledged the same assets under a
number of additional solicitations which the sureties had not disclosed
on the affidavits submitted with the bids. For example, under IFB No.
F44600-85-B-0066, the Air Force indicates that it discovered that one
surety had provided bonds for seven contractual actions and the other
surety had provided bonds for three contractual actions that were not
disclosed and for which the potential for liability still existed. In
addition, the Air Force notes that under IFB No. F44600-85-B-0087 a
surety failed to disclose that the same assets were pledged on a
solicitation issued by the Department of the Navy that had the same bid
opening date. Although the actual number of contracts and/or bids which
were not disclosed by the sureties varied with each affidavit, the Air
Force argues that a pattern of nondisclosure was clearly evident.
In addition, the Air Force indicates that its investigation was
limited to two nearby Department of Defense (DOD) installations and that
there are five other DOD activities in the area. Based on the pattern
of nondisclosure, the Air Force argues that it is reasonable to assume
that the sureties may have additional outstanding obligations which have
not been disclosed. The Air Force indicates that the dollar amount of
the sureties' outstanding obligations exceeds the value of the pledged
assets and that the Air Force was justified in rejecting the bids.
Eastern contends that the Navy's investigation was biased and
inaccurate. Eastern argues that the individual sureties disclosed all
obligations on which they were low and where award was anticipated, and
that no disclosure was necessary for solicitations where Eastern was not
in line for award. In addition, Eastern alleges that the sureties
liability on some of the bonds which the Air Force asserts should have
been disclosed is purely speculative since the contracts involved have
been completed or substantially completed. Eastern argues that the
individual sureties disclosed all information and that the sureties net
worth was adequate to cover the bonds in question.
The Affidavit of Individual Surety is a document separate from the
bid bond itself and serves solely as an aid in determining the
responsibility of an individual surety. Consolidated Services, Inc.,
B-206413.3, Feb. 28, 1983, 83-1 CPD Paragraph 192. We have held that a
contracting agency may properly consider the failure of an individual
surety to disclose outstanding bond obligations as a factor in
determining the responsibility of the bidder. Singleton Contracting
Corp., B-216536, Mar. 27, 1985, 85-1 CPD Paragraph 355; Dan's
Janitorial Service, Inc., 61 Comp. Gen. 592 (1982), 82-2 CPD Paragraph
217. A surety must disclose all other bond obligations under Item 10 of
the Affidavit, regardless of the actual risk of liability on those
obligations, to enable the contracting officer to make an informed
determination concerning the surety's financial soundness. Id. For
this reason, Item 10 of the Affidavit provides space for the surety to
list "all other bonds on which (he is) surety."
In reviewing a bidder's responsibility, the contracting officer is
vested with a wide range of discretion and business judgment, and this
Office will defer to the contracting officer's decision unless the
protester shows that there was bad faith by the procuring agency or that
there was no reasonable basis for the determination. C.W. Girard, C.M.,
64 Comp. Gen. 175 (1984), 84-2 CPD Paragraph 704.
We believe that, regardless of the actual liability that may remain
on any outstanding bonds, a continuing pattern on the part of Eastern's
sureties in failing to disclose the bond obligations provides the
contracting officer with a reasonable basis upon which to find the
protester nonresponsible. Consolidated Marketing Network, Inc. --
Request for Reconsideration, B-218104.2, June 12, 1985, 85-1 CPD
Paragraph 675. Although Eastern argues that its sureties' liability on
certain bonds is minimal or nonexistent, that is a judgment that must be
made by the contracting officer based on a full disclosure of the
surety's undertakings; the surety may not usurp the contracting
officer's discretion by deciding whether or not to disclose the
existence of potential liability on the bond. The record shows that
Eastern's sureties did not fully disclose all other bonds on which they
were sureties, and we conclude that the Air Force had a reasonable basis
to reject Eastern's sureties for their nondisclosure.
Eastern also alleges that the Air Force's actions amounts to bias
against the firm. Since we have determined, however, that the
contracting officer's actions in finding Eastern's sureties unacceptable
were reasonable and Eastern has submitted no independent evidence of
bias, Eastern's allegation is mere speculation and does not meet the
protester's burden of affirmatively proving its case.
The protests are denied.
Harry R. Van Cleve
General Counsel
FILE: 220546 DATE: April 7, 1986
MATTER OF: Cheif Petty Officer Samuel L.
PAY - RETIRED - SURVIVOR BENEFIT PLAN - REMARRIAGE OF MEMBER - SPOUSE'S ANNUITY ELIGIBILITY
A retired Navy petty officer's general
agreement to "continue to maintain his
military benefits" for his family,
included in a separation agreement he
executed in 1974, is not an agreement to
elect to "provide an annuity" for his
former wife under the Survivor Benefit
Plan. Under the laws then in effect
military
retirees could not provide survivor
annuity coverage for a former spouse and
consequently such general language in a
separation agreement executed then may not
be construed to include the election of
annuity coverage for his former wife.
Moreover, the agreement placed him under
no obligation to provide annuity coverage
for his former wife later when the laws
were amended to permit military retirees
voluntarily to elect coverage for a former
spouse to the exclusion of a current
spouse. Hence, after the petty officer
died his widow rather than his former wife
was entitled to his Survivor Benefit Plan
annuity.
The question in this case is whether the current or the former spouse
of a deceased Navy petty officer is entitled to his Survivor Benefit
Plan annuity. 1/ The former spouse's claim is based on a provision of a
separation agreement entered into in 1974 and subsequently approved by
court order in divorce proceedings that "the husband shall continue to
maintain his military benefits for his entire family * * *." On the
basis of the facts presented, and the applicable provisions of statute,
we conclude that the former spouse did not gain entitlement to a
Survivor Benefit Plan annuity under this agreement, and the annuity is
consequently payable to the current spouse.
Background
Chief Petty Officer Samuel L. Anderson was transferred from active
service with the Navy to the Fleet Reserve in 1973. At that time he was
married to Barbara L. Anderson. They separated, and in July 1974 they
entered into a written separation agreement which included the following
provision:
"IT IS FURTHER understood and agreed that the husband shall
continue to maintain his military benefits for his entire family
which includes insurance, medical, dental, and any and all other
miscellaneous type benefits."
A court of the State of Washington subsequently approved the
separation agreement in divorce proceedings and incorporated the
agreement in the final decree of dissolution of marriage rendered on
March 2, 1978, terminating the marital relationship between Chief
Anderson and Barbara L. Anderson.
On August 6, 1983, Chief Anderson married Macel M. Anderson. Macel
M. Anderson remained his wife until April 21, 1985, when he died.
At the time Chief Anderson retired from active naval service in 1973
he chose to become a participant in the Survivor Benefit Plan and to
have spouse coverage under that Plan. He thus chose to receive retired
pay at a reduced rate in order to provide an annuity for his surviving
spouse following his death.
Following Chief Anderson's death in April 1985 the Navy Finance
Center commenced payment of a Survivor Benefit Plan annuity to his
widow, Macel M. Anderson. Barbara L. Anderson, through her attorney,
subsequently suggested that she, instead, might be entitled to the
annuity as a former spouse beneficiary, based on the quoted provision of
the separation agreement. Navy officials now question whether the
annuity should be paid to Barbara L. Anderson rather than Macel M.
Anderson on the basis of the 1974 separation agreement, under a 1984
amendment to the Survivor Benefit Plan which concerned written
agreements to elect to provide an annuity to a former spouse.
Analysis and Conclusion
The Survivor Benefit Plan, 10 U.S.C. Sec. 1447-1455, was established
by the Congress in 1972 as an income maintenance program for the
dependents of deceased service members. 2/ Under the original
legislation, there was no general authority for a retiree to elect
coverage for a former spouse, and upon a divorce a retiree's former
spouse lost annuity coverage under the plan. 3/
In September 1983 Congress amended the Survivor Benefit Plan to
enable a retiree voluntarily to elect coverage for a former spouse to
the exclusion of a current spouse. 4/ A person who on the date of
enactment of the amendment, September 24, 1983, was a participant in the
Plan providing coverage for a spouse, was given 1 year to elect coverage
for a former spouse. 5/
In addition, in October 1984 Congress further amended the Survivor
Benefit Plan to treat the situation where a Plan participant entered
into a "voluntary written agreement" to elect "to provide an annuity" to
a former spouse incident to divorce proceedings, and the agreement was
incorporated in a court order, but the participant then fails or refuses
to make the election. The amendment requires, then, that the
participant "shall be deemed to have made such an election * * * ." 6/
This is the amendment brought into question by the Navy finance
officials in this case. The legislative history of that 1984 amendment
reflects that while a retiree's election to provide an annuity for a
former rather than a current spouse was to remain a voluntary act of the
retiree, the Congress recognized that the issue of whether a Plan
participant would designate a former spouse as a beneficiary could very
well become an item of negotiation in a divorce settlement. Congress
concluded that if a Plan participant voluntarily agreed in writing to
make such an election, the former spouse should be entitled to rely upon
that agreement. 7/
In the present case, Chief Anderson never agreed in writing
specifically to designate Barbara as a Plan beneficiary. While he did
agree in July 1974 to "continue to maintain his military benefits for
his entire family," under the provisions of the Survivor Benefit Plan
legislation then in effect he could not, as a matter of law, have
continued to maintain spouse coverage under the Plan for Barbara after
their divorce. Hence, we are unable to conclude that the general
language of the July 1974 separation agreement at issue may be
considered a voluntary written agreement to elect to provide an annuity
under the Survivor Benefit Plan for Barbara after their divorce. 8/
Moreover, after the law was subsequently amended to permit the
designation of a former spouse as a beneficiary under the plan, their
separation agreement was not renegotiated or modified, nor did Chief
Anderson elect to provide annuity coverage for Barbara within the 1-year
election period. Rather, he allowed the Plan annuity coverage to remain
in effect for his then current spouse, Macel M. Anderson. In these
circumstances, we do not find that Chief Anderson ever entered into a
courtapproved agreement to elect to provide a Survivor Benefit Plan
annuity for his former spouse, Barbara L. Anderson. Consequently, our
view is that he cannot be "deemed to have made such an election" under
the 1984 amendment to the Survivor Benefit Plan referred to by the
concerned Navy finance officials, and we conclude on the contrary that
his widow, Macel M. Anderson, is entitled to the annuity.
Acting Comptroller General
of the United States
FOOTNOTES
1/ This action is in response to a request for an advance decision
submitted under the provisions of 31 U.S.C. Sec. 3529 by the Disbursing
Officer, Navy Finance Center. The request was forwarded here by the
Commander of the Navy Finance and Accounting Center after it was cleared
through the Department of Defense Military Pay and Allowance Committee
and assigned submission number DO-N-1456.
2/ Public Law 92-425, September 21, 1972, 86 Stat. 706. See,
generally, S. Rep. No. 1089, 92d Cong., 2d Sess., reprinted in 1972 U.
S. Code Cong. & Ad. News 3288.
3/ See Brigadier General Fred A. Treyz, USAF, Retired, Deceased,
B-217739, December 19, 1985, 65 Comp. Gen. . Under the original
legislation, plan participants could provide annuity coverage for a
former spouse only if they were unmarried and had no dependent child,
and the former spouse had an "insurable interest" in them. 10 U.S.C.
Sec. 1448(b) (1970 ed., Supp. III 1973).
4/ See 10 U.S.C. Sec. 1448(b) (3), as amended by Public Law 98-94,
Sec. 941(a) (2), September 24, 1983, 97 Stat. 614, 652. See also S.
Rep. No. 174, 98th Cong., 1st Sess. 255-257, reprinted in 1983 U.S.
Code Cong. & Ad. News 1081, 1145-1147.
5/ Public Law 98-94, Sec. 941 (b), 97 Stat. 614, 653.
6/ See 10 U.S.C. Sec. 1450 (f) (3), as amended by public Law 98-525,
Sec. 644, October 19, 1984, 98 Stat. 2492, 2545.
7/ See S. Rep. No. 500, 98th Cong., 2d Sess. 221-222 (1984).
8/ Compare Brigadier General Fred A. Treyz, USAF, Retired, Deceased,
65 Comp. Gen. , supra, concerning an annuity election made in 1983 in
favor of a former spouse under a preexisting agreement specifically
requiring such election contingent on the subsequent amendment of the
Survivor Benefit Plan by the Congress to allow former spouse annuity
coverage.
FILE: B-220545 85-2 CPD 575 DATE: November 20, 1985
MATTER OF: Ray, Inc.
DIGEST:
CONTRACTS - SMALL BUSINESS CONCERNS - AWARDS - SMALL BUSINESS
ADMINISTRATION'S AUTHORITY - CERTIFICATE OF COMPETENCY - CONCLUSIVENESS
As a general rule, GAO will not review a contracting officer's
determination of a small business bidder's nonresponsibility since
the Small Business Administration has statutory authority to
determine conclusively whether a small business firm is
responsible.
Ray, Inc., a small business, protests the contracting officer's
determination that Ray is nonresponsible under Defense Industrial Supply
Center reguest for quotations No. DLA5OO-85-Q-BMX2, a small purchase.
The agency advises that this matter has been referred to the Small
Business Administration (SBA) for consideration under the certificate of
competency (COC) procedures.
The SBA has statutory authority to review a contracting officer's
determination of a small business concern's nonresponsibility and to
determine conclusively the responsibility of the concern by issuing or
declining to issue a COC. 15 U.S.C. Sec. 637(b)(7)(A) (1982).
Consequently, we will not undertake an independent review of the
contracting officer's nonresponsibility determination, since such review
would be tantamount to a substitution of our judgment for that of the
SBA. Apollo Bedding, Inc., B-218502.2, May 17, 1985, 85-1 C.P.D. P 570.
We note that the agency cites the Federal Acquisition Regulation, 48
C.F.R. Sec. 19.602-1(a)(2) (1984), for the proposition that referral to
the SBA is not necessary if small purchase procedures are being used,
and states it nevertheless elected to refer its nonresponsibility
determination to SBA. We point out that section 401 of the recently
enacted Small Business and Federal Procurement Competition Enhancement
Act of 1984, Pub. L. No. 98-577, 98 Stat. 3066, 3079 (1984), requires
that contracting agencies refer nonresponsibility determinations to SBA
even where small purchase procedures are utilized. Sess Construction
Co., 64 Comp. Gen. 355 (1985), 85-1 C.P.D. P 319.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
FILE: B-220540 DATE: March 31 1986
MATTER OF: James A. Sisler - Continuation of Per Diem
During Illness While on Temporary Duty
SUBSISTENCE - PER DIEM - ILLNESS, ETC. - WHILE ON TEMPORARY DUTY
Employee became seriously ill and was hospitalized while on temporary
duty. Under 5 U.S.C. Sec. 5702(b) and paragraphs 1-7.5b(1) and 1-8.4b of
the Federal Travel Regulations per diem or actual subsistence expenses
shall be continued for a period not to exceed 14 calendar days unless a
longer period is approved. The employee' s own actual subsistence
expenses in a high rate geographical area are allowed for the entire
period of his hospitalization. However, the employee's claims for the
cost of his wife's motel room and the rental expenses of the car, which
was not authorized on his travel orders and was rented and used solely
by his wife, are denied.
Mr. V. Joseph Startari, an authorized certifying officer with the
Department of Energy (DOE), has requested an advance decision on whether
the reclaim voucher of Mr. James A. Sisler may be certified for payment.
For the following reasons, we conclude that Mr. Sisler's actual
subsistence expenses in a high rate geographical area (HRGA), as we have
outlined below, may be certified for payment, but his claim for his
wife's motel room and her car rental expenses may not be paid.
The record shows that Mr. Sisler, an employee of DOE, was authorized
to travel from Washington, D.C., to Oak Ridge, Tennessee, and return for
temporary duty (TDY). After checking in at his motel on September 26,
1984, Mr. Sisler suf fered a heart attack. Upon the advice of Mr.
Sisler's doctor, Mrs. Sisler and their two sons immediately flew to Oak
Ridge.
While in Oak Ridge, Mrs. Sisler stayed in Mr. Sisler's motel room
from September 27 to October 3, 1984. Between October 4 and October 8,
1984, Mrs. Sisler was able to lodge at no cost in a vacant hospital
room. In addition, Mrs. Sisler rented a car from September 27 to
October 4, 1984, because there was a lack of adequate local commercial
transportation to accommodate the unusual hours required for travel
between the motel, hospital, and eating facilities. On October 9, 1984,
Mr. Sisler was transported back to Washington, D.C.
On audit of his original voucher, Mr. Sisler, s claim for actual
subsistence for hotel expenses during the period from September 27 to
October 3, 1984, in the amount of $264.81 was disallowed on the ground
that Mr. Sisler did not incur this expense since he was hospitalized.
In addition, Mr. Sisler's claim for reimbursement for the cost of
renting a car from September 27 to October 4, 1984, in the amount of
$176. 35 was disallowed on the ground that it was not used to perform
government business by Mr. Sisler, but was used solely by Mrs. Sisler.
Furthermore, Mr. Sisler's travel authorization did not authorize, nor
did any subsequent modifications authorize the use of a rental car.
After the disallowance, Mr. Sisler submitted a reclaim voucher in the
total amount of $441. 16, consisting of a claim for $264.81 for his
wife's motel room costs and a claim for reimbursement of $176.35 for car
rental expenses. Mr. Sisler contends that he is entitled to
reimbursement for both items because these expenses were incurred as a
result of his being away from his permanent duty station on TDY and the
emergency situation.
The statute which governs the reimbursement of expenses of employees
who become incapacitated while on TDY away from their permanent duty
station is 5 U.S.C. Sec. 5702(b) (1982), which provides:
(b) Under regulations prescribed under section 5707 of this title, an
employee who, while traveling on official business away from his
designated post of duty or, in the case of an individual described under
section 5703 of this title, his home or regular place of business,
becomes incapacitated by illness or injury not due to his own
misconduct, is entitled to the per diem allowance and appropriate
transportation expenses to his designated post of duty, or home or
regular place of business, as the case may be."
The statute is currently implemented, in relevant part, by paragraph
1-7. 5b(1) of the Federal Travel Regulations, FPMR 101-7 (November
1981), incorp. by ref. 41 C.F.R. Sec. 101-7.003 (1983) (FTR), which
provides:.
"(1) Continuation of per diem. Whenever a traveler takes leave of
absence of any kind because of being incapacitated due to his/her
illness or injury not due to his/her own misconduct, the prescribed per
diem instead of subsistence, if any, shall be continued for periods not
to exceed 14 calendar days (including fractional days) in any one period
of absence unless, under the circumstances in a particular case, a
longer period is approved."
Furthermore, since Mr. Sisler's travel was to the HRGA of Oak Ridge,
Tennessee, which for the period of time involved here had a maximum
actual subsistence expense allowance of $64 per day, FTR para. 1-8.4b is
also relevant and provides as follows:
"b. Illness or injury. The provisions of 1-7.5b applicable to per
diem instead of subsistence shall also apply to the allowance of
subsistence expenses."
This statute and the implementing regulations were designed to
prevent the imposition on government employees of the inequitable
hardships which result from becoming incapacitated by illness or injury
while away on government business. Thus, these authorities are to be
liberally construed in order to accomplish the statute's equitable
purposes. See Billy J. Stafford, B-203080, June 8, 1982, and cases
cited therein. Indeed, our Office has held that the language of FTR
para. 1-7.5b(1) is mandatory and vests no discretion in administrative
officials to deny an employee per diem for a sick leave period otherwise
coming within the terms of that regulation. B-144985, March 3, 1961.
The provisons of the FTR quoted above clearly govern Mr. Sisler's
claim. Since Mr. Sisler was incapacitated, and those paragraphs require
that his actual subsistence expenses shall be contined for periods not
to exceed 14 calendar days, payment of Mr. Sisler's claim for his own
actual subsistence expenses is authorized.
Although he was hospitalized, Mr. Sisler, through payments to the
hospital, incurred substantial expenses for lodging and meals during his
hospitalization from September 27 to October 9, 1984. It is clear that
the subsistence expenses (room and board) incurred in a hospital are
reimbursable under FTR paragraphs 1-7.5b(1) and 1-8.4b, quoted above.
See Billy J. Stafford, cited above. As to the portion of the total
hospital bill that may be allocable to room and board, we held in
B-171933, March 19, 1971, that it was not unreasonable to conclude that
room and board expenses were at least $40 a day where the total hospital
bill was $65 a day. We have not been furnished information as to Mr.
Sisler's hospital costs, but, given the recent escalation of hospital
costs generally, it is reasonable to assume that the room and board
portion was at least $64 a day. Thus, we conclude that Mr. Sisler is
entitled to be reimbursed for his hospital room and board expenses not
to exceed the $64 a day rate allowable in the Oak Ridge area. His
entitlement is subject, however, to FTR paragraph 1-7.5b(3) which
provides for a reduced allowance if the traveler receives
hospitalization under any Federal statute, other than 5 U.S.C. Secs.
8901-8913 (Federal employees' health insurance).
In regard to Mr. Sisler's claims of $264.81 for his wife's motel room
costs and of $176.35 for the rental cost of the car, which was rented
and used solely by his wife, we view these as personal expenses of Mrs.
Sisler. We note that Mr. Sisler was never authorized to rent a car at
government expense, and we are not aware of any statutory or regulatory
authority that would allow either his wife or him to be reimbursed for
such car rental expenses, even though Mr. Sisler became ill while on
TDY. See Charles E. Law, B-198299, October 28, 1980, and FTR para.
1-1.3b (reimbursable travel expenses are conf ined to those expenses
essential to the transacting of official business).
Accordingly, Mr. Sisler's actual subsistence expenses may be
certified for payment as outlined above, but his claims for his wife's
motel room costs and car rental expenses may not be paid.
FILE: B-220535 DATE: October 22, 1985
MATTER OF: Galaxy Distributing, Inc.
DIGEST:
Bid was properly rejected as nonresponsive
where the descriptive literature required to
be submitted contained a legend stating that
design and specifications are subject to
change without notice because there is
nothing else in the bid indicating that the
legend was not intended to affect the bidder's
obligations under its bid.
Galaxy Distributing, Inc. protests the rejection of its bid under
invitation for bids (IFB) No. DAKF23-85-B- 0171 issued by the Department
of the Army for three types of computer printers. Galaxy's low bid was
determined to be nonresponsive because the descriptive literature
submitted with its bid for each of the three items contained a legend
stating that specifications are subject to change without notice. Award
was made to the second low bidder, Wordplex Corporation, whose
descriptive literature contained a similar phrase, which was crossed
out. Galaxy contends that it has been a government supplier for
approximately 2 years and its bids have never been rejected as
nonresponsive hecause of similar legends on its descriptive literature.
Galaxy further argues that the phrase is included on almost all
specification sheets and that the manufacturers do not permit its
removal. We dismiss Galaxy's protest.
The IFB required, and warned in three places, that bidders must
submit with their bids complete descriptive literature or that the bid
would be considered nonresponsive and rejected. Where, as here, the
government requires descriptive literature and uses it to determine
precisely what the hidder is offering and will be hound to furnish if
awarded the contract, any statement in the literature that
specifications are subject to change is a material deficiency rendering
the bid nonresponsive. See, e.g., North Park Village Homes, Inc.,
B-216862, Jan. 31, 1985, 85-1 CPDP 129. We have permitted exceptions
only where it was reasonably clear from the face of the bid that a
"subject to change" legend was not intended to reserve the right to the
bidder to change the offered product or to deviate from any of the
government's material requirements. Syntrex, Inc., et al., 63 Comp.
Gen. 360 (1984), 84-1 CPDP 522.
In order to determine whether the legend did improperly reserve the
right to alter the of fered product, we must examine the bid as a whole.
See North Park Village Homes, Inc., B-216862, supra. Here, although
Galaxy is offering products not manufactured by it, there is nothing in
its bid such as a cover letter which states that Galaxy is offering
units from stock or units already manufactured which meet all of the
specification requirements. See Burley Machinery, Inc., 55 Comp. Gen.
592 (1975), 75-2 C.P.D. P 411. As a result, we find that the
uncontradicted legend on the literature submitted by Galaxy not only
reserved the manufacturer's right to alter its product's specifications,
but it granted Galaxy the right to supply units with characteristics
other than those listed in the descriptive literature. Therefore,
Galaxy's bid was properly rejected as nonresponsive. North Park Village
Homes, Inc., B-216862, supra. The fact that an agency in the past may
have erroneously accepted Galaxy's bids which contained such a legend
is, of course, not a justification for repeating the error here. See
id.
Since Wordplex deleted the legend from its descriptive literature,
the legend did not qualify Wordplex's bid. Regardless of whether the
bidder has the authorization from the manufacturer to remove a
restrictive legend from its literature, when the bidder submits a
conforming bid that does not contain a "subject to change" legend, the
bidder is legally bound to supply the item offered in its bid without
any specification changes. Therefore, such a bid, unlike the
protester's, is responsive.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
B-220532
September 8, 1986
APPROPRIATIONS - IMPOUNDING - IMPOUNDMENT CONTROL ACT
H.R. 4888, by eliminating the one-House veto of deferrals, would
solve the Impoundment Control Act's Chadha problem. GAO endorses
provisions requiring the President to specify for each deferral dates
certain on which he will release the deferred budget authority, and
prohibiting withholding after the date certain. GAO recommends deleting
or altering the bill's provision requiring the Comptroller General to
promulgate and apply standards defining Antideficiency Act deferrals, as
opposed to fiscal policy deferrals. Such provision may be subject to
constitutional challenge in light of Bowsher v. Synar.
The Honorable Jack Brooks
Chairman, Committee on
Government Operations
House of Representatives
Dear Mr. Chairman:
This responds to your May 28, 1986 request for our views on H.R.
4888, 99th Congress. H.R. 4888 would amend the Impoundment Control Act
of 1974 (the Act) in several ways. The bill would require the President
to specify for each deferral a date certain on which he will release the
budget authority reported as deferred. The President could not withhold
budget authority for any reason after the date certain. For all funds,
the date certain could be no later than the last day on which enough
time remains before expiration to prudently obligate it. For multi-year
funds, a limit on deferral duration of 365 days also applies, end in no
event could any funds be permitted to lapse as a consequence of a
deferral. Redeferrals would be prohibited.
H.R. 4888 would also require the Comptroller General to prescribe
standards for determining whether or not a deferral proposes to withhold
budget authority exclusively for a purpose authorized by 31 U. S.C.
Sec. 1512(c)(1) (the Anti-deficiency Act), end in a manner which
improves the management and administration of the budget authority,
without diverging from the policies, purposes, and objectives of the
Congress in making such budget authority available. The Comptroller
General would review each deferral message to determine whether it
complied with those standards. If he determined that a proposed
deferral did not comply, he would report that determination to both
Houses of Congress, end the deferral would, under the bill, be treated
as a rescission proposal.
As we said in our July 21, 1986 letter to you commenting on H.R.
4205 (B-222693), we support the requirement of H.R. 4888 that the
President specify dates certain on which he will release budget
authority proposed for deferral, and the bill's prohibition on
withholding after the date certain. Indeed, as the sponsors
acknowledge, this approach is based on a suggestion of ours. 132 Cong.
Rec. H3249 (daily ed. May 22, 1986).
Such amendments would, we believe, prevent many if not all of the
kinds of deferrals which many Members now find objectionable. For
example,
since the bill limits such deferrals to a maximum of 365
days, the Executive would no longer be able to propose indefinite
deferrals of no-year funds. The Congress would not have to enact
legislative disapprovals of deferrals to ensure timely release of the
funds (unless it wanted the funds released earlier than the date
specified in the President's message).
These amendments would also overcome constitutional objections to the
Act, held to exist by the United States District Court for the District
of Columbia in New Haven v. United States, No. 86-0455 (D.D.C. May 16,
1986). The district court, citing Immigration and Naturalization
Service v. Chadha, 462 U.S. 919 (1983), concluded that the Act's
one-House disapproval of deferrals constituted an unconstitutional
legislative veto, and struck down the entire deferral procedure of the
Act, both the President's authority to defer and the congressional
disapproval mechanism. Because deferred budget authority, under H.R.
4888, would have to be released on the date certain without
congressional action, a one-House veto is avoided.
H.R. 4888 would add a new section 1018 to the Act. As proposed,
section 1018 would require the Comptroller General to promulgate and
apply standards for determining whether a deferral is an Anti-deficiency
Act deferral, and authorize the Comptroller General to convert policy
deferrals to rescissions. In light of the Supreme Court's recent
decision in Bowsher v. Synar, 54 U.S.L.W. 5064 (U.S. July 7, 1986),
section 1018 could raise further constitutional challenges to the Act,
resulting in lengthy and complex litigation. Whatever the outcome of
any such litigation, the efficacy of the challenged procedure could be
impaired at least untll the litigation was complete. An amendment to
the bill could avoid this situation without, we believe, sacrificing the
interests of the Congress.
The requirement in the bill for reclassification by this Office of
policy deferrals results from the concerns of many Congressmen that the
President is taking advantage of doubts about the constitutionality of
the Act's current procedure for one-House disapproval of deferrals.
Knowing that the Congress, in reaction to the Chadha decision, has been
reluctant to use the one-House disapproval to overturn such deferrals,
the President has, in this view, used the deferral process to achieve
substantive change in priorities established by the Congress in
appropriation acts. The President has most often asserted changes in
fiscal policy with successive reimpoundments of multiyear funds, or
prolonged withholdings pending legislative transfer of the deferred
funds. In other instances of fiscal policy deferrals, the President has
deferred until the end of the fiscal year budget authority which was
transferred from trust funds to other accounts for non-trust fund
purposes for only one fiscal year. Although the deferred budget
authority, at the end of the fiscal year, would revert to the trust fund
the deferral in such instances could result in the defeat of the purpose
for which the Congress transferred the budget authority. Or, in a
variation of this the President has deferred for a full fiscal year
"permanent, indefinite" borrowing authority which the Congress has made
available for only one fiscal year.
In the Synar decision, the Supreme Court held unconstitutional the
Comptroller General's role in the deficit reduction process under the
Balanced Budget and Emergency Deficit Control Act of 1985, Pub. L. No.
99-177. Under that Act, the Comptroller General, each fiscal year, was
to estimate federal revenues and expenditures, and to specify budget
reductions necessary to meet the Act's deficit target for that fiscal
year. The Court found these functions to be executive in nature:
"Interpreting a law enacted by Congress to implement the legislative
mandate is the very essence of "execution" of the law." 54 U.S.L.W. at
5069. As an agent of the Congress, the Court held, the Comptroller
General may not undertake executive functions. The Court said that
"once Congress makes its choice in enacting legislation, its
participation ends. Congress can thereafter control the execution of
its enactment only indirectly--by passing new legislation." Id.
By requiring the Comptroller General to promulgate standards
governing deferrals and to apply those standards to Presidential
actions, the bill is open to constitutional challenge. Deleting this
portion of H.R. 4888 would eliminate the possibility of such challenge,
without defeating the purpose for the requirement. We believe that the
provisions of the bill, which would require the President to specify
dates certain for each deferral on which he will release the deferred
funds, which would prohibit withholding after the date certain, and
which would prevent redeferrals and deferrals of multi-year funds for
more than 365 days, would minimize, and possibly eliminate, the problems
arising from fiscal policy deferrals. Thus, for example, this bill
would effectively preclude successive reimpoundment of multi-year funds.
Similarly, prolonged withholdings pending legislative transfer would be
constrained by the requirement to release the funds for obligation no
later than the date certain.
An alternative, which would also escape constitutional suspicion,
would be for the Congress to define legislatively those impoundments
which will no longer be classified as deferrals, rather than directing
the Comptroller General to do so. In that event, such impoundments
would be classified as rescissions by rule of law, not by the
Comptroller General.
If the Congress should prefer this alternative, we would propose that
because of the conceptual difficulty of articulating precise definitions
of Anti-deficiency Act deferrals, as opposed to fiscal policy deferrals,
the Congress in the Act simply enumerate those kinds of withholdings
which would be classified as rescission proposals. The Congress could
amend section 1012 of the Act to add a new subsection (c) as follows:
"(c) Whenever the President proposes to
(1) reserve budget authority which has been reserved
previously;
(2) reserve budget authority pending the enactment of
legislation to transfer that budget authority to another account
or pending enactment of a budget proposed by the President
reducing a subsequent fiscal year's appropriation to the same
account by the amount of the reservation;
(3) reserve budget authority which the Congress has transferred
from a trust or revolving fund to another account for only one
fiscal year; or
(4) reserve other permanent, indefinite budget authority (for
example borrowing authority) a part of which the Congress has
designated for use in one particular fiscal year; such
reservations shall be treated as if transmitted under subsection
(a) of this section."
If the Congress, however, decides not to alter H.R. 4888, we would
suggest a technical amendment to the new section 1018(b)(1). As
currently drafted, section 1018(b)(1) would require the Comptroller
General to review Presidential special messages within 5 days of the
receipt of the message by the Congress. This time limitation should be
deleted. Rarely is 5 days sufficient to review a message to verify the
information reported therein, and to develop information the Congress
will need in its consideration of the message. It is not unusual for a
message to contain 25 or more deferrals; and, the messages often
provide little information regarding the justification for and impact of
the deferrals. We review and report to the Congress on all messages as
expeditiously as possible, and we will continue to do so.
Sincerely yours,
Comptroller General
of the United States
B-220532 July 9, 1986
The Honorable Henry B. Gonzalez
House of Representatives
Dear Mr. Gonzalez:
As you know, this Office is required to comment on impoundments
proposed by the President under the Impoundment Control Act (the Act).
2 U.S.C. Sec. 685(b). On March 12, 1986, in his fourth special message,
the President reported a deferral (D86-60) of $700 million of budget
authority made available to the Farmers Home Administration (FmHA) from
the Rural Housing Insurance Fund (the Fund), for loans under title V of
the Housing Act Of 1949, as amended.
This deferral was disapproved by the Urgent Supplemental
Appropriations Act, Pub. L. No. 99-349, July 2, 1986. The Office of
Management and Budget has indicated to us that the $700 million deferred
will be released for obligation during the week of July 7. We will
monitor the Administration's actions to assure release of the funds.
In your joint letter with Representative Stan Lundine of March 24,
1986, you suggested that the deferral should be reclassified as a
rescission proposal. As you pointed out, the Department of Agriculture
originally proposed a rescission of this budget authority. That
characterization was changed to a deferral by OMB.
We have examined the FmHA deferral and discussed this issue at length
with OMB and FmHA officials. OMB recently assured us that the funds
would be released in time to be prudently obligated in fiscal year 1986,
unless the Congress first enacted a law either repealing the $700
million or disapproving the deferral. For that reason, no legal basis
existed to object to the characterization of the withholding as a
deferral.
We are enclosing a copy of our report of today to the Congress on
this deferral.
Sincerely yours,
Comptroller General
of the United States
FILE: B-220531 85-2 CPD 681
DATE: December 17, 1985
MATTER OF: The W.H. Smith Hardware Company
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
TECHNICAL ACCEPTABILITY - ADMINISTRATIVE DETERMINATION
1. Agency determination that alternate product is technically
unacceptable is reasonable where the alternate product did not comply
with a material specification provision.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - REJECTION - PROPRIETY
2. Where the initial reason advanced by the agency for rejection of
an offer is not substantiated, but the record establishes that a
sufficient basis for the agency action existed at the time the agency
made its decision, the rejection is not legally objectionable.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - TECHNICAL
ACCEPTABILITY - OFFEROR'S REPONSIBILITY TO DEMONSTRATE
3. Where the solicitation listed an approved source item and
provided that offerors of alternate products were required to submit
sufficient information to permit agency evaluation, but did not call for
product testing, the agency is not required to accept offer of product
samples and either test items itself or submit them to outside testing
laboratory.
The W.H. Smith Hardware Company (Smith) protests the award of a
contract to Sunbury Supply Company (Sunbury) under request for proposals
(RFP) No. DLA700-85-R-2522 for fluid level control flush valves issued
by the Defense Construction Supply Center, Defense Logistics Agency
(DLA). Smith contends that its lower priced alternate product was
improperly evaluated and rejected by DLA, since it was equivalent to the
approved source item offered by Sunbury.
We find the protest without merit.
The RFP called for three contract line items (CLIN's) for quantities
of the valves to be delivered to different locations. The valves were
listed by national stock number and were described as being adjustable
over a 9-1/2 inch to 14 inch range and constructed of stainless steel
control components with "Celcon" component parts. The valves were to be
of an anti-siphon type with special configuration for salt water
application. Two models manufactured by Fluidmaster, Inc., were listed
as approved items.
Under clause L30 of the RFP, offerors were advised that while the
approved items had been determined to be acceptable, "neither detailed
specifications nor other data may be available for evaluating technical
acceptability of other products." Offerors offering alternate products
were required to furnish drawings, specifications or other data
necessary to clearly describe the characteristics and features of the
product being offered. Such products were required to be identical to
or physically, mechanically and functionally interchangeable with the
listed product. The data submitted was required to be sufficient to
establish this equality. The clause further provided that if the
government could not make such a determination by contract award date,
the product may be considered technically unacceptable. Clause L30 did
not indicate that the government would conduct any testing in making
this evaluation, but emphasized the requirement for detailed supporting
material to permit agency evaluation of alternate products.
Smith offered as an alternate product a Coast Foundry valve. Smith's
proposal included manufacturer's literature which it argues shows
equivalence to the listed Fluidmaster valves. In its proposal, Smith
also offered to provide samples of its product and the Fluidmaster valve
to the government for testing. DLA determined that Smith's alternate
product was unacceptable because it utilized a plastic part where
stainless steel was required in a control component. The low offeror, O
& S Supply, was found technically unacceptable for the same reason.
Smith's offer was second low on CLIN's 0001 and 0002, but it was higher
than Sunbury on CLIN 0003, at $3.85 versus the $3.83 Sunbury unit price.
After DLA determined that Smith was technically unacceptable, award for
all three CLINs was made to Sunbury.
Smith argues that both the Fluidmaster models and its product, the
Coast Foundry valve, have stainless steel control components. Smith
contends that the control components are the valve and orifice which
permit water flow and cutoff. Smith asserts that the plastic connecting
link and adjustment clip on the Coast Foundry valve, which DLA found
technically unacceptable, is not a control component. Moreover, Smith
points out that the Fluidmaster valve uses a plastic lever arm which
serves the identical function, so that even if this piece is considered
a control component, the approved source item also contains a plastic
component.
A review of the technical proposals shows that both the Fluidmaster
and Coast Foundry models have plastic components in the assembly which
activates the valve to stop the flow of water. While the Coast Foundry
model has a plastic connecting link and adjustment clip, the Fluidmaster
has a plastic lever arm to which the connecting link is attached. As
the Fluidmaster model, the approved item, has plastic in the same area
of the item which DLA considered to be a "control component," we find
the rejection of Smith's proposal as technically unacceptable for this
reason to be questionable.
However, the solicitation also required that the valve be adjustable
over a 9-1/2 inch to 14 inch range. The Coast Foundry valve has an
adjustment range of 4 inches to 12 inches. In our view, this is a
material specification and Smith's failure to offer a product which
complied with this requirement constituted a reasonable basis for
rejection of the proposal. In reviewing the protest, our concern is
whether, in light of the record, the agency's decision was supportable
in light of the circumstances as they existed, and not whether the
decision was properly supported by the basis advanced by the agency at
the time it took the action. Tri-Com, Inc., B-214864, June 19, 1984,
84-1 C.P.D. Paragraph 643. Thus, while the record does not establish
the propriety of the rejection of Smith's proposal on the basis of the
plastic component, because the record does show that DLA had a
reasonable basis for its decision to reject Smith's offer as technically
unacceptable, we find the rejection to be legally unobjectionable.
Smith has also protested that, despite its offer to provide samples,
DLA failed to perform a proper evaluation of its product because of
DLA's failure to test the product, or submit it to an independent
laboratory for testing. However, the solicitation did not provide for
testing of alternate products. On the contrary, it made clear that the
determination would be made from information submitted with the offer.
We have held that under these circumstances the agency is under no
obligation to test any alternate products, and it is the offeror's
responsibility to submit sufficient data for technical evaluation.
Compressor Engineering Corp., B-213032, Feb. 13, 1984, 84-1 C.P.D.
Paragraph 180.
Finally, Smith contends that Sunbury's proposal was unacceptable
because under paragraph 12 of its Standard Form 33 (Discount for Prompt
Payment) Sunburn inserted "net 20 days." However, this has no effect on
the acceptability of Sunbury's proposal because the Federal Acquisition
Regulation, 48 C.F.R. Section 52.232-8 (1984), makes it clear that
prompt payment discounts are no longer considered in the evaluation of
offers. Further, the solicitation, in a note on page 13, advised
"Payment terms (e.g., net 20) offered by the contractor will not be
deemed 'required payment dates.'"
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-22053000 DATE: October 11, 1985
Peterson Associates
DIGEST:
Protest that proposal should not have been rejected is dismissed as
academic where the protester's offered price is substantially higher
than the proposed awardee's price and there is no evidence or allegation
that the awardee's proposal was unacceptable. The protester therefore
would not be in line for the award even if the protest were resolved in
its favor.
Peterson Associates (Peterson) protests the rejection of its proposal
and the proposed award of a contract to Aeronca Electronics, Inc.
(Aeronca), under request for proposals (RFP) No. DAAH03-85-R-F116,
issued by the Department of the Army for a Comtal computer system or
equal. We dismiss the protest as academic.
The procurement was a total small business set-aside, and Peterson's
proposal was rejected for failing to conform to all essential RFP terms
because Peterson indicated in the "Small Business Concern
Representation" that the offered system would not be produced or
manufactured by a small business concern. Peterson claims, however,
that it completed the representation in the only manner possible for a
small business offering the brand name Comtal system since, according to
Peterson, Comtal is a division of 3M Corporation, not a small business.
Peterson argues that it was improper to reject its proposal based on a
proper representation that the specified brand name equipment is not
produced by a small business.
A protest allegation is academic and will not be considered where the
protester would not be in line for the award even if the protest were
resolved in the firm's favor. Evans, Inc., B-216260.2, May 13, 1985,
85-1 C.P.D. P 535. Here, Peterson's offered price of $96,025 is
substantially higher than Aeronca's $63,365.85 price. As Peterson has
submitted no evidence that Aeronca's proposal was technically
unacceptable, we have no reason to believe that Aeronca would not have
received the award even had Peterson's proposal not been rejected. The
protest therefore is academic.
Robert M. Strong
Deputy Associate General Counsel
FILE: B-220527
DATE: December 16, 1985
MATTER OF: Economic Development Administration -- Ratification of
Grant Acceptance as Obligating Prior Year Appropriation
APPROPRIATIONS - FISCAL YEAR - AVAILABILITY BEYOND - FEDERAL AID,
GRANTS, ETC.
1. Economic Development Administration offer of a public works grant
to Town of Franklin, Connecticut and State of Connecticut jointly, was
conditioned on acceptance of the offer by both parties before September
30, 1983, the end of the fiscal year. An unauthorized agent for the
applicant Town purported to accept the offer on the last day of the
fiscal year and her action was, in effect, ratified 6 months later by
the Town Council which would have been authorized to accept the grant
offer. However, at the time of the attempted ratification, the grant
offer was no longer available for acceptance, having expired on the same
date that the appropriation to fund the grant lapsed.
APPROPRIATIONS - FISCAL YEAR - AVAILABILITY BEYOND - FEDERAL AID,
GRANTS, ETC.
2. Ratification of an unauthorized action taken in a prior fiscal
year may serve to authorize a charge to the prior year's funds only if
the Government received and accepted the benefit of property or services
provided by a contractor, or if, in a grant situation like this, the
agency had actually awarded the grant and the grantee had expended its
own funds for grant purposes in reliance on the erroneous award.
The General Counsel of the Department of Commerce has asked for our
decision concerning whether the Economic Development Administration
(EDA) obligated fiscal year 1983 funds when it made an offer of a grant
to the Town of Franklin, Connecticut, that was accepted within the
fiscal year by an official of the town who lacked authority to accept
the grant offer. For the reasons given below, we conclude that there
was no valid obligation of fiscal year 1983 funds.
In 1983, the Town of Franklin, Connecticut, together with the State,
applied for an EDA grant to partially fund the development of an
industrial park project under title I of the Public Works and Economic
Development Act of 1965, as amended, 42 U.S.C. Sections 3121-3246h. EDA
made the Town an "Offer of Grant," dated September 29, 1983. The
document provided:
"Acceptance of this Grant offer must be returned to the
Economic Development Administration prior to September 30, 1983."
This offer was accepted by Grace B. Curran, First Select-woman of the
Town, on September 30, 1983. Her authority to accept the offer was
certified by the Assistant Town Clerk. Notwithstanding this
certification, Ms. Curran's authority had been limited by the Town,
which makes decisions affecting expenditures of public funds by citizen
referenda. In this instance, acceptance of the grant required a
non-Federal commitment of 50 percent of the estimated project costs.
While the State of Connecticut committed funds for approximately half of
the non-Federal share, the balance would have to come from the sale by
the Town of a local bond issue.
According to the minutes of the town meeting, Ms. Curran was
authorized to apply for the grant:
"Subject to the Town's acceptance, at a later town meeting, of
the state and federal grants for the project."
Two unsuccessful referenda were held on November 1, 1983 and early in
1984, on whether the Town should accept the grant. In March of 1984,
the EDA regional director wrote Ms. Curran asking whether the Town
intended to go forward with the grant. The grant was finally approved
at a Town meeting held April 10, 1984.
EDA may have had actual knowledge of the fact that the Town failed to
approve the grant at the November 1, 1983 Town Meeting because,
according to the Inspector General, the Assistant Secretary for Economic
Development received a letter dated December 7, 1983, from the Chairman
of a group called "Concerned Citizens of Franklin," so stating. Also,
an attorney for the Town says that an EDA legal memorandum discussed the
second referendum, and that EDA instructed the Town to request a formal
grant extension if a favorable referendum was obtained. On the other
hand, the General Counsel says that EDA did not learn until April 10,
1984, when the Town approved the grant, that Ms. Curran did not have
actual authority to accept the grant on September 30, 1983.
The appropriation for the grant was available for obligation only
during fiscal year 1983. This means that EDA had to complete its grant
award to the Town of Franklin by September 30, 1983, in order to prevent
the funds in question from lapsing. EDA's usual grant practice is to
make an offer of a grant which requires a formal acceptance by the grant
recipient within a stated time period. Since the grant appropriation in
this case could only be obligated during fiscal year 1983, EDA made it
clear that the offer would expire after September 30, 1983, unless it
received the Town's acceptance prior to that date. /1/
There is no doubt that the document that EDA received prior to
September 30, 1983, was not an authorized acceptance by the Town of
Franklin. Even if Federal grant funds had actually been disbursed, the
Town would not be committed in any way to carry out the purposes of the
grant (although of course it would have to return these funds.).
Therefore, no grant relationship was formed prior to the expiration of
the availability of the grant funds. Nevertheless, we have been asked
by the granting agency and the grantee whether we agree with their
theory under which the purported acceptance can be considered to be
within the terms of the offer.
The General Counsel argues that an obligation of fiscal year 1983
funds did take place because the Town ratified the faulty earlier
acceptance and that, under general rules of agency, such a ratification
relates back to the time of the unauthorized acceptance.
We do not accept this argument. The EDA grant offer was clearly
conditioned on acceptance within a limited period of time, coinciding
with the limited time in which funds to make the grant award remained
available. No theory of agency or relation-back can serve to extend the
period of time in which obligations can be charged to a time-limited
congressional appropriation. In other words, this was not a situation
in which the offer could be considered to remain open until such time as
one of the parties either withdrew or completed the agreement with a
valid acceptance. See Restatement of Agency, Second, sec. 90.
The General Counsel's office told us that the EDA relied on two
Comptroller General decisions in arriving at its position. He cites
Matter of Rust Tractor Co., 58 Comp. Gen. 789 (1979), and Matter of Fish
and Wildlife Service -- Fiscal Year Chargeable on Ratification of
Contract, 83-1 CPD 75, January 6, 1983. Both are procurement decisions,
involving ratification by a contracting officer of services ordered by
an unauthorized Government official in the prior fiscal year. In both
cases, the Government had received the benefit of the services provided,
and funds were available to pay for them during the fiscal year in which
they were ordered. We held that the later ratification "related back"
and served to make valid the unauthorized commitment. The General
Counsel's office thought that these same principles should apply to the
Town of Franklin case.
There is a very significant difference, in our view. In both the
cited procurement cases, the Government had received the benefit of the
services provided in good faith by a contractor. It would have been
unconscionable to accept such a benefit and avoid payment by relying on
a procedural irregularity. The principle of ratification, like its
sister principles, payment under quantum meruit or quantum valebat, are
based on considerations of unjust enrichment. If the contractors in
those cases had never provided the unauthorized services ordered in the
prior fiscal year, any subsequent "ratification" would not relate back
but would be regarded as a new contract for services, chargeable to the
current fiscal year.
The General Counsel also states that EDA did not know that the
September 30 letter from the First Selectwoman was not a valid
acceptance until it received notice of the action by the Town at an Aril
10, 1984 meeting where, for the first time, the Town accepted the grant
offer. He appears to believe that because EDA had no reason to doubt
the validity of the September 29 acceptance letter, the appropriation
can be considered to have been validly obligated. Whether EDA did or did
not have actual notice that the Town previously disapproved acceptance
of the grant offer is not entirely clear. There appears to be some
differences of opinion on that point, according to information provided
in the Inspector General's audit report and in a letter from the
Attorney General of the State of Connecticut.
It is not necessary for us to resolve that issue of fact. Although
31 U.S.C. Section 1501(a) requires an agency to file documentary
evidence of a contract or other commitment executed during the period of
availability of the funds it seeks to charge, the document must itself
be valid in order to obligate the appropriation. If the contract or
other agreement is substantively flawed, as it was here due to the
absence of a valid acceptance, the procedural act of filing the document
cannot serve to preserve the funds beyond their expiration date in order
to give the parties more time to correct the flaw.
In the present case, the Government made a time-limited offer which
was not accepted in the time required. By the time the Town Council
acted, there was no offer left to accept. The offer had expired by its
own terms. The result might have been different if the grant had
actually been awarded to the town within FY 1983, and if the town had
expended its own funds to carry out the grant purposes in reliance on
the erroneous award. It is not disputed that this never happened. Our
decision merely restores EDA and the Town to the status that existed
prior to the grant offer and attempted acceptance.
Acting Comptroller General of the United States
(1) We note that the September 30 acceptance does not meet the
literal requirement of the offer which would have required acceptance
"prior" to that date. We do not think this is a problem because it is
clear that EDA was seeking a commitment by the close of the fiscal year
on September 30.
FILE: B-220526.2 86-1 CPD 259 DATE: March 17, 1986
MATTER OF: Merret Square, Inc.
DIGEST:
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION - ERRORS -
NOT PREJUDICIAL
1. Protest against the successful offeror's failure in its cost
proposal to price separately annual rent and maintenance, under a
solicitation for the construction and lease of military family
housing units, is denied where the deviation did not operate to
deprive the protester of an award to which it was otherwise
entitled and had no significant adverse impact on the government's
interest.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - UNBALANCED - NOT
AUTOMATICALLY PRECLUDED
2. The concept of bid unbalancing generally is not relevant to
a negotiated procurement in which cost or price is not the primary
basis for source selection. Thus, the fact that the successful
offeror under a solicitation for the construction and lease of
military family housing units may have loaded an unknown amount
for maintenance into its annual rent is immaterial where the basis
for award was not the lowest total annual rent, but rather the
most favorable cost/ quality ratio between total annual rent and
technical merit.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - QUALIFICATION OF
OFFERORS - ADEQUACY OF FINANCES, PERSONNEL, FACILLITIES, ETC.
3. Whether the successful offeror under a negotiated
procurement has sufficient financial backing to perform the
contemplated effort directly relates to the firm's responsibility
as a prospective contractor. By awarding the contract, the agency
has in fact determined the firm to be responsible, and GAO does
not review affirmative determinations of responsibility except in
limited circumstances not present here.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - BEST AND FINAL - ONE
TECHNICALLY ACCEPTABLE OFFER
4. Final negotiations with one offeror to obtain a small
reduction in price were not improper where only that firm remained
within the agency's revised competitive range.
Merret Square, Inc., protests the award of a contract to Hunt
Building Corporation under request for proposals (RFP) No.
N62470-85-RP-00054, issued by the Department of the Navy. The
procurement is for the construction and lease of military family housing
units in the Norfolk, Virginia area. Merret principally complains that
the award to Hunt is improper because Hunt's cost proposal deviated from
a material requirement of the solicitation. We deny the protest.
Background
The procurement is pursuant to 10 U.S.C. Sec. 2828(g) (Supp. I 1983),
as added by section 801 of the Military Construction Authorization Act
of 1984, which provides that the Secretary of a military department may
enter into a contract for the lease of family housing units to be
constructed on or near a military installation within the United States
under the Secretary's jurisdiction at which there is a validated
deficit. in family housing. 10 U.S.C. Sec. 2828(g) (1). Each contract
must be awarded through the use of competitive procedures and may
provide for the contractor to operate and maintain the housing
facilities for the term of the lease, which is not to exceed 20 years.
10 U.S.C. Sec. 2828(g) (2) and (4). No contract may be entered ifi nto
until the Secretary of Defense submits to the appropriate committees of
Congress a written economic analysis (based upon accepted life cycle
costing procedures) demonstrating that the proposed contract is cost
effective in comparison with alternative means of furnishing the same
facilities. 10 U.S.C. Sec. 2828(g)(6)(A).
The RFP contemplated the award of a contract for the construction of
300 family housing units which the contractor would then lease to the
government at a fixed annual rate for a 20-year period, with maintenance
and management of the units during the life of the contract provided by
the contractor. The RFP called for a technical evaluation of the
offeror's design, construction and maintenance plans. Cost proposals
were evaluated on the basis of the annual combined shelter rent (lease)
and maintenance rent over the anticipated 20-year period; shelter rent
was required to remain the same for each year of the lease, but
maintenance rent was allowed to increase to reflect inflation. The RFP
expressly required offerors to price shelter and maintenance rent
separately "to facilitate the Government's economic analysis." Further,
offerors were required to submit with their proposals a copy of the
financing commitments they had obtained for the project.
The underlying objective of the procurement was to determine whether
contractor construction and lease of the units would be more cost
effective than government construction. Accordingly, the RFP advised
that an economic analysis would be prepared and submitted for
congressional review. As stated in the RFP, $25 million was the amount
calculated by the Navy to represent the maximum life cycle net present
value (LC-NPV) cost for the government construction alternative, and
offerors were cautioned that any proposal with a total LC-NPV in excess
of that amount would be rejected as nonconforming. For purposes of
source selection, the total LC-NPV cost of each proposal was divided by
the number of points the proposal received as the result of the
technical evaluation.
The total LC-NPV cost of each proposal was determined by initially
multiplying the proposed first-year shelter rent by a present dollar
discount factor of 6.851 and the maintenance rent by a present dollar
discount factor of 10.594. (The discount factor was higher for
maintenance rent because this element is allowed to increase over the
lease period because of inflation.) The two products were then combined
to determine if the total LC-NPV of the proposal exceeded the $25
million ceiling.
Hunt proposed a first-year shelter rent of $3,649,000 and a
first-year maintenance rent of $0. Accordingly, the firm's total LC-NPV
was determined to be $24,999,299:
$ 3,649,000 x 6.851 = $ 24,999,299
$ 0 x 10.594 = $ 0
Total LC-NPV = $ 24,999,299.
When this figure was divided by 752, the number of technical
evaluation points the Hunt proposal received, the cost/quality ratio of
Hunt's offer was $33,244 per point, the lowest among all offerors.
Therefore, the Navy concluded that Hunt's offer was most advantageous to
the government, and the firm was selected for the award.
In comparison, Merret proposed a first-year shelter rent of
$2,901,600 and a first-year maintenance rent of $392,400, resulting in a
total LC-NPV of $24,035,947. Division of Merret's total LC-NPV by 636,
the number of technical evaluation points the firm's proposal received,
resulted in a cost/quality ratio of $37,792 per point.
Merret contends that Hunt's offer was nonconforming to a material
requirement of the RFP because Hunt failed to propose a separate price
for maintenance rent. Merret urges that Hunt included maintenance rent
within shelter rent for the express purpose of avoiding the $25 million
cost ceiling. The protester calculates that if Hunt had proposed even a
nominal first-year maintenance rent of $200, this figure, when
multiplied by the applicable present dollar discount factor of 10.594,
would have caused Hunt's total LC-NPV to exceed $25 million, thus
requiring its rejection. 1/
Merret asserts that it is unreasonable to assume that Hunt would
provide maintenance for the number of units involved in the project at
zero or even nominal cost, since the government's estimate for
first-year maintenance was $300,000 (increasing to $600,000 a year for
the rest of the lease period), and Merret's own first-year maintenance
rent was $392,400, the lowest among all offerors. Merret believes that
the only motivation for Hunt to offer zero maintenance rent was to hide
its actual maintenance rent within the shelter rent so that the
maintenance figure would not be subject to the higher discount factor
multiplier of 10.594, thus mathematically avoiding a total LC-NPV
exceeding the $25 million ceiling.
Merret also urges that Hunt's cost proposal is mathematically
unbalanced because the firm's shelter rent includes an unknown amount
for maintenance and, therefore, the shelter rent figure is artificially
inflated and fails to reflect Hunt's actual costs for that element of
its of fer. Merret asserts that Hunt's cost proposal is materially
unbalanced as well because Hunt's of fer does not become lower than
Merret's until the 16th year of the lease, even allowing Merret's
first-year maintenance rent of $392,400 to increase 4 percent per year
as a result of inflation, as contemplated by the solicitation.
Therefore, Merret contends that the award to Hunt is not in the
government's best economic interest since the lease may be terminated
prior to the end of the 20-year period, and the government will have
paid Hunt a higher amount than if the contract had been awarded to
Merret.
In addition, Merret contends that the award to Hunt is improper
because Hunt's financial institution has withdrawn its backing for the
project. Merret notes that the financial institution specifically
withdrew its commitment because of differences with Hunt over basic
business practices--differences Merret believes were directly related to
the manner in which Hunt structured its cost proposal.
Finally, Merret asserts that Hunt was impermissibly allowed to reduce
its offer by some 5 percent at the behest of the cognizant congressional
committee reviewing the economic analysis of the Norfolk project
submitted pursuant to 10 U.S.C. Sec. 2828(g) (6)(A), supra. Merret
notes that it also offered a substantial reduction in both its
first-year shelter and maintenance rent, but that the Navy refused to
entertain its offer because it had already selected Hunt for the award
subject to final congressional approval. Merret believes that it was
improper to conduct final cost negotiations with only Hunt.
Analysis
In Chrysler Corp., B-182754, Feb. 18, 1975, 75-1 C.P.D. P 100, upon
which Merret relies, we held that bids were properly rejected where the
protester's pricing structure reasonably indicated an intent to avoid a
statutory price limitation. That case involved a congressionally
mandated ceiling on the basic price of automobiles being procured for
the government, a ceiling which did not extend to additional systems and
equipment. The protester apparently sought to circumvent the statutory
limitation by loading part of its basic vehicle prices into the prices
for additional equipment, the latter of which were therefore
artificially inflated. However, we believe that case is not controlling
here. Unlike the matter in Chrysler, where only one bid element was
subject to a price ceiling, the $25 million cost maximum at issue here
applied to the total LC-NPV of the proposals, that is, to the shelter
and maintenance rents in combination, and not to either item separately.
Therefore, because only the "bottom line" LC-NPV figure determined
whether a proposal exceeded the $25 million ceiling, we do not agree
with the protester that our decision in Chrysler requires rejection of
Hunt's proposal, despite the fact that Hunt may have deviated from the
RFP requirement to price the two rent elements separately.
Furthermore, this deviation works no competitive prejudice to Merret
because, even if Merret had been allowed to load all of its maintenance
rent into its shelter rent as Hun, allegedly did, the firm's proposal
still would no, have obtained a cost/quality ratio superior to Hunt's.
By way of illustration, if Merret's first-year maintenance rent of
$392,400 is added to its first-year shelter rent of $2,901,600, the
resulting total of $3,294,000, when multiplied by the discount factor of
6.851, yields a total LC-NPV of $22,567,194. If this figure is then
divided by Merret's technical score of 636, the firm's cost/quality
ratio, the basis for award, is still higher than Hunt's ($35,483 versus
$33,244). Thus, even if we were to conclude that the Navy acted
improperly by not requiring Hunt to price its shelter rent and
maintenance rent separately, this does not provide a basis to sustain
the protest because the deficiency did not operate to deny Merret an
award to which it was otherwise entitled. See Lingtec, Inc., B-208777,
Aug. 30, 1983, 83-2 C.P.D. P 279.
Moreover, we do not believe that the manner in which Hunt structured
its cost proposal has any significant adverse effect upon the
government's interest. In this regard, by not separately pricing its
maintenance rent, Hunt's offer is not subject to any allowable increase
due to inflation and Hunt bears the risk that its fixed annual shelter
rent does not sufficiently cover the costs for increased maintenance
over the life of the lease because of inflation. It is true, as Merret
emphasizes, that the lease agreement provides that maintenance rent also
is subject to deflation, and that the maintenance rent may be decreased
at the government's option to reflect the contractor's decreased costs
in maintaining the units. However, we do not believe the fact that the
government will not be able to enjoy such reductions in the future
because Hunt's offer is fixed at its annual shelter rent required the
agency to reject Hunt's offer. The RFP generally contemplates that
maintenance rent will continue to increase over the life of the lease
because of inflation. In this regard, we note that the RFP specifically
provides that maintenance rent "will be allowed to escalate at a rate
pegged to the 'Economic Indicators' prepared . . . by the Council of
Economic Advisors . . . (currently approximately 4 percent)." In
addition, as previously noted, the discount factor for maintenance rent
used in evaluating the cost proposals was adjusted for inflation.
We also note that even though the RFP provides that repair costs
shall be negotiated annually between the government and the contractor
and shall be adjusted at the same rate and time as maintenance rent,
Hunt bears a greater burden because it seemingly has precluded itself
from any upward adjustment in those costs by not pricing a separate
maintenance rent. Similarly, by not providing a separate maintenance
rent, Hunt has also precluded itself from receiving an incentive fee
award for exceptional performance of maintenance services. (As provided
for in the RFP, the contractor's entitlement to such an award will be
determined on an annual basis in an amount not to exceed 5 percent of
the maintenance rent.)
In sum, Hunt's failure to price maintenance rent separately did not
prejudice any other offeror and does not have an inherently adverse
impact on the government's interest. In our view, the only party
potentially harmed by this deviation to any significant extent is Hunt
itself, since the firm will not be entitled to any price adjustments
during the course of the lease due to expected inflation.
We also find no merit in the protester's assertion that Hunt's
proposal is both mathematically and materially unbalanced. 2/ Although
we have recognized that the concept of unbalancing may apply in limited
circumstances to negotiated procurements, see TLM Berthing, Inc.,
B-220623, Jan. 30, 1986, 86-1 C.P.D. P , it is only relevant where cost
or price constitutes a primary basis for source selection. In that
situation, the fact that one element of a cost proposal carries a
significantly disproportionate share of the total cost of the work plus
profit so as to be mathematically unbalanced may create a reasonable
doubt that an award will ultimately result in the lowest overall cost to
the government. Id.
However, in the present matter, lowest total LC-NPV cost was not
determinative as to award, but rather award was based on the ratio
between LC-NPV cost and the number of technical evaluation points a
proposal received. Thus, an offeror proposing a higher total combined
rent over the life of the lease (discounted to present dollars) could be
eligible for the award if the cost premium were offset by a higher
technical score. This is a classic example of a negotiated procurement
in which the contracting agency, consistent with stated evaluation
criteria, makes a reasoned tradeoff between cost and technical merit to
determine the most advantageous offer. See Grey Advertising, Inc., 55
Comp. Gen. 1111 (1976), 76-1 C.P.D. P 325. Hunt's proposal was selected
for award because the technical quality of its proposal in terms of the
design and construction of the housing units overcame the higher premium
the government would have to pay in leasing the units from Hunt over the
20-year period. Since ultimate cost was not the paramount basis for
source selection, we think it immaterial that Hunt's proposal, by
loading unknown maintenance costs into shelter rent, arguably may have
been mathematically unbalanced.
Moreover, we do not believe that Hunt's offer is so extremely
front-loaded that Hunt will receive funds in the early years of the
lease far in excess of the amount it would be entitled to if payment
were measured on the basis of actual value received. See Edgewater
Machine & Fabricators, Inc., B-219828, supra n.2. In Edgewater, we
recognized that an extremely front-loaded offer suffers from the same
evil as an advance payment and is merely a device to obtain unauthorized
contract financing. Id. at 4. In this situation, however, although Hunt
may have included maintenance rent within its shelter rent, the cost of
maintenance to be provided in each year of the lease will be compensated
directly from the fixed shelter rent. Therefore, we do not believe that
Hunt's cost proposal structure represents gross front-loading within the
meaning of Edgewater since the measure of reimbursement remains the same
throughout the life of the lease.
We also find no merit in the protester's assertion that an award to
Hunt is improper because its financial backer withdrew its commitment
for the project. Although it is true that, after receipt of best and
final offers, the financial institution in question expressly withdrew
its commitment because of business differences with Hunt, this
institution subsequently advised Hunt prior to award that it would be
willing to work out an agreement with the firm to finance the project.
Despite whatever difficulties that may have arisen after Hunt submitted
its proposal, the record shows that Hunt's proposal included a copy of
the original financial commitment and, therefore, the firm clearly
complied with the RFP's requirement that each offer include a copy of
the financing commitment obtained.
Moreover, contrary to Merret's assertion, we do not believe that the
withdrawal of this commitment after receipt of best and final offers
rendered Hunt's proposal unacceptable. In our view, the question of
whether Hunt has sufficient financial backing for the project directly
involves the firm's responsibility as a prospective contractor. By
awarding Hunt the contract, the Navy has in fact determined that Hunt is
responsible. See the Federal Acquisition Regulation (FAR), 48 C.F.R.
Sec. 9.1052(a)(1) (1984); Ameriko Maintenance Co., B-216247, Sept. 12,
1984, 84-2 C.P.D. P 287. This Office does not review aff irmative
determinations of responsibility absent a showing of possible fraud or
bad faith on the part of procuring officials or an allegation that
definitive responsibility criteria were misapplied. Ameriko Maintenance
Co., B-216247, supra, 84-2 C.P.D. P 287 at 2. Merret has made no attempt
to show that the Navy acted in bad faith in determining Hunt to be
responsible to perform the contract and, even if the solicitation's
requirement for a financial commitment could be construed as a
definitive responsibility criterion, Hunt apparently still has that
commitment. Accordingly, we find no basis to question the Navy's
selection of Hunt for the award even though there may have been some
difficulties surrounding its financial backing for the project.
Finally, Merret contends that the award is improper because, at the
behest of the House Committee on Appropriations, the Navy sought and
obtained a 5-percent price reduction from Hunt, but refused to entertain
a similar offer from Merret. Merret urges that the committee expressly
directed the Navy to seek a price reduction by renegotiating with
"current bidders," which Merret argues necessarily included itself.
Merret contends that the Navy therefore acted improperly by not
considering the firm's offer to reduce its annual shelter rent and
maintenance rent, respectively, to $2,445,259 and $384,000. We do not
accept the firm's argument.
The facts reveal that, after the Navy selected Hunt for the award,
the committee advise, the Department of Defense (DOD) by letter of
December 4, 1985, that it had reviewed the economic analyses submitte,
by DOD for proposed family housing contracts at three installations.
One of these involved the Navy's Norfolk project, and the other two
involved construction and lease of units at Army installations. The
committee found the propose, costs for the Norfolk project and for one
of the Army's projects to be too high. Accordingly, the committee
expressly directed DOD "to take whatever steps are necessary to reduce
the costs of these projects including re-negotiation with current
bidders or re-bidding them."
By subsequent letter of December 13, after the Navy had apparently
sought an initial price reduction from Hunt, the committee directly
advised the Navy that, "After reviewing the results of the renegotiation
with the contractor, the Committee still feels its cost is too high."
The committee reminded the Navy that its options of either
"renegotiation or rebidding remain." The Navy was then able to obtain a
5-percent price reduction from Hunt, and the committee consequently
approved the Norfolk project.
It is a fundamental principle of federal procurement law that if,
after receipt of best and final offers, an agency deems it to be clearly
in the government's interest to reopen negotiations, it must reopen
negotiations with all offerors still within the competitive range and
request additional best and final offers. FAR, Sec. 15.611 (c) (FAC
84-5, Apr. 1, 1985); see also Mayden & Mayden, B-213872.3, Mar. 11,
1985, 85-1 C.P.D. P 290. Therefore, the question to be resolved is
whether Merret remained within the competitive range at the time the
Navy reopened negotiations with Hunt--that is, whether the Navy still
viewed Merret as having a reasonable chance of being selected for award.
See Information Systems & Networks Corp., B-220661, Jan. 13, 1986, 86-1
C.P.D. P .
In this regard, we have held that there is nothing improper per se in
an agency's making more than one competitive range determination and in
dropping a firm from further award consideration, so long as the firm's
exclusion was ultimately justified. See BASIX Controls Systems Corp.,
B-212668, July 2, 1984, 84-2 C.P.D. P 2. Although the Navy has not
characterized its action here as a competitive range revision, we
believe this is what essentially occurred. As already noted, Merret's
technical proposal received a quality rating significantly inferior to
Hunt's, a percentage difference between the scores of some 18 percent.
Even though Merret's total LC-NPV cost was lower than Hunt's by some 4
percent, it is apparent that the Navy had ultimately concluded that
Merret's technical proposal was not amenable to meaningful improvement
through further negotiations so as to have any possibility of becoming
the more advantageous offer. Thus, relative to Hunt's much higher
technical score and consequently superior cost/quality ratio, Merret was
no longer considered to have a reasonable chance of receiving the award,
a determination tantamount to a competitive range justifiably revised to
include only one offeror. See Information Systems & Networks Corp.,
B-220661, supra. Accordingly, we cannot object to the Navy's action in
holding final competitive range negotiations with Hunt to obtain a small
reduction in price. Id.
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ $ 3,648,800 x 6.851 = $ 24,997,928.80
$ 200 x 10.594 = $ 2,118.80
Total LC-NPV = $ 25,000,047.60
2/ Generally, unbalanced bidding entails two aspects. The first is a
mathematical evaluation of the bid or offer to determine whether each
item carries its share of the cost of the work plus prof it, or whether
the bid or offer is based on nominal prices for some work and enhanced
prices for other work. The second aspect--material unbalancing--
involves an assessment of the cost impact of a mathematically unbalanced
bid. A bid is materially unbalanced if there is a reasonable doubt that
the award will result in the lowest ultimate cost to the government.
Applicators, Inc., B-215035, June 21, 1984, 84-1 C.P.D. P 656. In
addition, a bid or offer that is mathematically unbalanced in the
extreme should be rejected, even if low, since it suffers from the same
defect as an advance payment. Edgewater Machine & Fabricators, Inc.,
B-219828, Dec. 5, 1985, 85-2 C.P.D. P 630.
FILE: B-220523 86-1 CPD 17
DATE: January 8, 1986
MATTER OF: Anthra Pharmaceuticals, Inc.
CONTRACTS - SMALL BUSINESS CONCERNS - AWARDS - STATUS OF SMALL
BUSINESS - OTHER THAN IN SET-ASIDES
Protest against the contracting agency's decision not to enter into
research contracts with the protester, a small business, under a
solicitation issued pursuant to the Small Business Innovation
Development Act, is denied where the record shows that the protester's
principal investigators are full-time university employees, whereas the
solicitation requires that for the small business to be eligible for
award, an investigator's "primary employment" must be with the offeror.
Anthra Pharmaceuticals, Inc. protest the failure of the Department of
Health and Human Services (HHS) to award the firm a contract based on
the proposals Anthra submitted in response to solicitation No. PHS85-3
for small business innovative research in areas of scientific interest
to the Public Health Service (PHS). The solicitation was part of HHS's
effort under the Small Business Innovation Development Act, 15 U.S.C.
Section 638 (1982), which requires certain agencies to reserve a portion
of their research efforts for award to small business firms, and
authorizes the agencies to award "funding agreements" based on the
evaluation of proposals submitted in response to solicitations issued
pursuant to the statute. /1/ We deny the protest.
Anthra states that HHS found both of its proposals, for the synthesis
of analogs of clinically active anticancer agents, to be of sufficient
scientific merit and feasibility to warrant awards. Anthra contends
that HHS failed to make awards, however, because it improperly
determined that the principal investigators for the two research
projects were not primarily employed with Anthra as required by the
terms of the solicitation and the Small Business Administration (SBA)
Policy Directive, 50 Fed. Reg. 917 (1985), that provides guidance to
participating agencies for the conduct of their fiscal year 1985 small
business innovative research programs.
The solicitation listed a number of research topics for various PHS
components, for which proposals could be submitted. Firms were advised
that their submissions would be judged on a competitive basis /2/ and
evaluated based on soundness and technical merit (40 percent); the
qualifications of the principal investigator and staff (30 percent);
the proposed research's potential for technological innovation and/or
commercial application (20 percent); and facilities and research
environment (10 percent). Offerors also were advised of the approximate
number of firm, fixed-price contracts that would be awarded for each of
the listed PHS components.
The solicitation required, in a provision entitled "Eligibility,"
that in order for an organization to be eligible for award, the "primary
employment" of the principal investigator must be with the organization
at the time of award and during the conduct of the proposed project.
The provision defined the term "primary employment" as meaning that
"more than one-alf of the principal investigator's time is spent in the
employ of the small business." Both the requirement and the definition
are set out in the SBA policy Directive. While HHS found Anthra's
proposals to be technically meritorious, the proposals revealed that the
two principal research investigators for the proposed projects were
full-time university faculty members and directors of university
laboratories. Information developed during the evaluation of the firm's
proposal also revealed that the arrangement the investigators had with
Anthra appeared to be contrary to the established policies of their
respective universities, which prohibited more than 1 day per week of
outside consulting activities. HHS decided that Anthra therefore did
not meet the solicitation's eligibility criterion, and declined to enter
into any contracts with the firm; the record indicates that but for
this eligibility problem, HHS would have funded Anthra's proposals.
Anthra argues that its proposed principal investigators are involved
with Anthra to a significant extent above and beyond their University
employment. According to Anthra, its principal investigators are
founding members and current officers and directors of the firm, and as
such are fully committed to the success of Anthra through time, effort,
and financial investment. Anthra points out that it specifically stated
in its proposals that the investigators were devoting 41 hours per week
to the company, accomplished by utilizing after-university work hours,
weekends, holidays, and university vacation time. As to the policies of
their universities regarding outside employment, Anthra alleges that the
universities only prohibit financially-compensated outside activities
during a faculty member's regular employment hours, and place no
constraints on activities outside regular employment hours other than to
restrict teaching at another college or university without obtaining
prior approval.
HHS takes the position that the principal investigator eligibility
requirement would becomes a shame if it accepted the proposition of an
81-hour week for an investigator, 40 hours of which are spent in the
employ of a non-small business organization. In HHS's view, this would
mean that any scientist with a regular 40-hour per week, full-time job
would be eligible as long as he asserted that he would work another 41
hours per week for a small business research firm. HHS points out that
several proposals submitted in response to the solicitation had similar
eligibility problems, and in all cases except Anthra's the eligibility
questions were resolved satisfactorily either by replacement of a
principal investigator or by the principal investigator agreeing to
reduce his university employment to a part-time basis.
We find that it was reasonable for HHS to conclude that Anthra did
not meet the solicitation's eligibility criterion. Solicitations must
be read reasonably, see Byrd Tractors, Inc., B-212449, Dec. 13, 1983,
83-2 C.P.D. Paragraph 677, and in our view a requirement that the
offeror be the principal investigator's primary employer, so that more
than half his time is spent in the offeror's employ, simply is not met
where the investigator already has a full-time, 40-hour per week job
with someone else. Under Anthra's approach of proposing investigators
that would work 41 more hours per week for the offeror, a firm seeking
funding could propose a principal investigator who works elsewhere any
number of hours per week beyond 40 -- 50, 60, etc. -- on any number of
other efforts so long as the offeror says that the person will work that
same number of hours plus 1 -- 51, 61, etc. -- on the research project.
We do not think that type of approach meets the understanding commonly
reflected in a "primary employment" requirement of any sort,
particularly one as defined in the SBA Policy Directive and this
solicitation. Accordingly, we are not prepared to conclude that HHS was
compelled to accept Anthra's proposals on the basis submitted.
The protest is denied.
Harry R. Van Cleve
General Counsel
(1) These funding agreements can take the form of contracts (as
here), grants, or cooperative agreements. 15 U.S.C. Section 638(e)(3).
(2) Such a competitive selection of research proposals solicited
pursuant to the Small Business Innovation Development Act comes within
the definition of "competitive procedures." See 41 U.S.C.A. Section
259(b)(5) (West Supp. 1985) (added by section 504 of the Small Business
and Federal Procurement Competition Enhancement Act of 1984, Pub. L.
98-577).
FILE: B-220522.2
DATE: October 17, 1986
MISCELLANEOUS TOPICS - FEDERAL ADMINISTRATIVE/LEGISLATIVE MATTERS -
EXECUTIVE BRANCH PERSONNEL - VACANCIES - TEMPORARY APPOINTMENT -
DURATIONS
1. Provisions of the Vacancies Act, 5 U.S.C. Sections 3345-49
(1982), govern the filling of vacancies in those offices which require
Senate confirmation in the Departments of Labor and Education, except
where there is specific statutory authority to fill such vacancies. The
Vacancies Act applies to the position of Director of the Women's Bureau
within the Department of Labor and to the positions of Assistant
Secretary for Vocational and Adult Education and Assistant Secretary for
Civil Rights within the Department of Education. The Vacancies Act
limits acting appointments to fill such positions to 30-days duration.
MISCELLANEOUS TOPICS - FEDERAL ADMINISTRATIVE/LEGISLATIVE MATTERS -
EXECUTIVE BRANCH PERSONNEL - VACANCIES - TEMPORARY APPOINTMENT -
DURATIONS
2. Actions by individuals occupying offices subject to the Vacancies
Act which are taken subsequent to the expiration of 30-day time
limitation set forth in 5 U.S.C. Section 3348 (1982) are of uncertain
validity. Accordingly, at the end of the 30-day period, such
individuals should refrain from taking any further action in an acting
capacity.
The Honorable William Proxmire
Ranking Minority Member
Subcommittee on Labor, Health and Human Services, and Education
Committee on Appropriations
United States Senate
Dear Senator Proxmire:
This is in response to your letter dated March 28, 1986, in which you
requested our review of the applicability of the Vacancies Act to
various officers of the Departments of Labor and Education serving in an
acting capacity in positions requiring Senate confirmation. As shown
below, we conclude that the Vacancies Act is applicable to all of the
positions in question and that those officers who serve more than 30
days in an acting status in such positions are in violation of the Act.
As you will recall, we concluded in our letter of June 9, 1986, that the
Vacancies Act applied to various similar positions in the Department of
Health and Human Services. /1/
The following persons continue to serve in an acting status in
positions that require confirmation by the Senate:
TABLE OMITTED
The following information has been provided our Office by the
Department of Labor concerning the service of Jill H. Emery in an acting
capacity. Ms. Emery was appointed by the Secretary to serve in her
present capacity as Acting Director of the Women's Bureau. /2/ She is
the Deputy Director, a position considered the first assistant to the
Director. Ms. Emery has never been confirmed by the Senate in any
capacity. Ms. Shirley Dennis was nominated by the President on July 12,
1986, to serve as Director of the Women's Bureau. We understand that
the Senate has not conducted hearings on this nomination.
On the date of your request, March 28, 1986, four additional interim
appointees were serving in acting capacities in the Department of Labor.
However, subsequent to your request, these positions have been filled
by persons confirmed by the Senate. /3/
The following information has been provided our Office by the
Department of Education concerning the two officers, indicated above,
presently serving in acting capacities. Both of these persons were
appointed by the Secretary to serve in their present "acting"
capacities, and were serving as Deputy Assistant Secretaries, positions
considered first assistants to the respective offices of Assistant
Secretary to which they have been appointed. Neither of these
individuals has ever been confirmed by the Senate in any capacity.
There are no nominees presently before the Senate for either of these
positions. /4/
In addition, the Department of Education has informed our Office that
the position of Director, National Institute of Education, has remained
vacant since March 31, 1985. Also, on the date of your request, March
28, 1986, the position of Director, National Institute of Handicapped
Research, was occupied by an interim appointee serving in an acting
capacity. However, subsequent to your request, that position has been
filled by David B. Gray, who was confirmed by the Senate on March 21,
1986, and appointed on March 30, 1986. /5/
The positions of Assistant Secretaries were established under Title
II of the Department of Education Organization Act, effective October
17, 1979, 93 Stat. 671, 20 U.S.C. Section 3412(b) (1982). This section
provides:
"(1) There shall be in the Department --
"(C) an Assistant Secretary for Vocational and Adult Education;
* * * * *
"(F) an Assistant Secretary for Civil Rights;
"(2) Each of the Assistant Secretaries and the General Counsel
shall be appointed by the President, by and with the advice and
consent of the Senate."
The Appointments Clause of the Constitution, Article II, section 2,
clause 2, provides that officers of the United States must be appointed
with the advice and consent of the Senate, except when the Congress
clearly vests the full appointment power for a particular position or
class of positions by law "in the President alone, in the Courts of Law,
or in the heads of Departments." See Scully v. United States, 193 F.
185, 187 (C.C.D. Nev. 1910).
The so-called Vacancies Act, 5 U.S.C. Sections 3345-3349 (1982),
provides methods for the temporary filling of vacancies created by the
death, resignation, sickness or absence of the head of an executive
department or military department or the head of a bureau thereof whose
appointment is not vested in the head of the department or in the
President alone. Section 3346 provides that when an officer of a bureau
of an executive department or military department whose appointment is
not vested in the head of the department dies, resigns, or is sick or
absent, unless otherwise directed by the President under section 3347,
his first assistant shall perform the duties of the office until a
successor is appointed or the absence or sickness stops.
Section 3347 provides that, instead of a detail under section 3345 or
3346, the President may direct the head or another officer of an
executive department or military department, whose appointment is vested
in the President, by and with the advise and consent of the Senate, to
perform the duties of the office until a successor is appointed or the
absence or sickness stops. Section 3349 makes the methods described in
the preceding sections the sole means for filling the vacancies
described therein, except in the case of a vacancy occurring during a
recess of the Senate.
Section 3348 of title 5, United States Code, provides that a vacancy
caused by death or resignation may be filled temporarily under section
3345, 3346, and 3347 for not more than 30 days.
The current provisions of the Vacancies Act are derived from the Act
of July 23, 1868, ch. 227, 15 Stat. 168. The time limit now set forth
in section 3348 was originally 10 days and was increased to 30 days by
the Act of February 6, 1891, ch. 113, 26 Stat. 733.
It has long been held by the Attorney General that after a vacant
position has been temporarily filled under the Vacancies Act the power
conferred by the Act is exhausted and the President does not have the
authority to appoint either the same or another officer to temporarily
fill the Office for an additional period. 16 Op. Atty. Gen. 596 (1880);
18 Op. Atty. Gen. 50 (1884); Id. at 58; 20 Op. Atty. Gen. 8 (1891).
As the intent of the Vacancies Act is to preclude unreasonable delays
in submitting nominations for offices subject to Senate confirmation, we
have adopted the view that the 30-day limitation contained in 5 U.S.C.
Section 3348 runs only during the period that there is no name before
the Senate for confirmation by that body. See 56 Comp. Gen. 761 (1977).
Also see Williams v. Phillips, 482 F.2d 669 (D.C. Cir. 1973). But see
United States v. Lucido, 373 F. Supp. 1142 (E.D. Michigan, 1974),
wherein the court in effect stated that, notwithstanding that a name had
been submitted to the Senate for confirmation, an appointment under the
Vacancies Act would terminate at the end of the 30-day period set forth
in 5 U.S.C. Section 3348. Accord, 32 Op. Atty. Gen. 139 (1920).
The 30-day limitation placed on temporary appointments by 5 U.S.C.
Section 3348 applies by its express terms only to appointments or
designations made under the Vacancies Act. Accordingly, the limitation
contained in section 3348 is not applicable where vacancies are filled
pursuant to authority other than the Vacancies Act.
By its express terms the Vacancies Act is applicable to the executive
departments and military departments. Section 101 of title 5, United
States Code (1982), sets forth the executive departments. The executive
departments include the Departments of Labor and Education.
The positions filled by the three acting officials under
consideration here all require appointment by the President by and with
the advice and consent of the Senate, and are, therefore, subject to the
Vacancies Act. None of the three officials has been nominated for the
position in which they are serving. Thus, the 30-day limitation set
forth in 5 U.S.C. Section 3348 is applicable to all such appointments.
Additionally, we note that although the President submitted the
nomination of Ms. Shirley Dennis on July 12, 1986, as indicated above,
to serve as Director of the Women's Bureau, Department of Labor, this
nomination came more than 4 months into the tenure of Ms. Jill H. Emery
as Acting Director. Therefore, it is clear that such a nomination on
July 12, 1986, could not cure service that had become invalid on March
31, 1986, under the 30-day limitation period imposed by operation of the
Vacancies Act as explained above. Had a nomination been made prior to
the expiration of the 30-day period, the view adopted by our Office, as
explained above, would have tolled the limitation period for as long as
the nomination was under consideration by the Senate. See Williams v.
Phillips, supra. However, once the limitation period has run, there is
no basis for continued service of an "acting" appointee.
Finally, we note that the position of Assistant Secretary for
Vocational and Adult Education in the Department of Education has been
without a nominee for more than a year. This appears to be precisely
the sort of "unreasonable" delay the Vacancies Act was enacted to
prevent. In the absence of any other statutory authority to fill the
three positions enumerated above on a temporary basis outside the
Vacancies Act, we conclude that the 30-day limit is applicable.
As we indicated to you in our letter dated June 9, 1986, concerning
the applicability of the Vacancies Act to various officers of the
Department of Health and Human Services, the legal status of actions
taken by temporary appointees under the Vacancies Act who continue to
serve in an acting capacity beyond the 30-day time limitation is
uncertain.
Those actions may possibly be viewed as acts performed by a de facto
officer. A de facto officer or employee is one who performs the duties
of an office or position with apparent right and under color of
appointment and claim to title of such office or position. William A.
Keel, Jr., B-188424, March 22, 1977, and decisions cited. In general we
have held that acts performed while a person is serving in a de facto
status are valid and effectual insofar as concerns the public and the
rights of third persons. 42 Comp. Gen. 495 (1963); see also 63 Am.
Jr.2d Public Officers and Employees Section 518.
With regard to defective or invalid appointments, the general rule is
stated in 63 Am. Jur.2d Public Officers and Employees Section 504 (1972)
as follows:
"* * * the general rule is that when an official person or body
has apparent authority to appoint to public office, and apparently
exercises such authority, and the person so appointed enters on
such office, and performs its duties he will be an officer de
facto, notwithstanding that there was want of power to appoint in
the body or person who professed to do so, or although the power
was exercised in an irregular manner."
It is not clear, however, whether the Courts would apply the de facto
doctrine where a statute specifically precluded the continued occupancy
of the position. In 32 Op. Atty. Gen. 139 (1920), the Attorney General
advised the Undersecretary of State, who inquired as to what action he
and the officers of the Department of State should take upon the end of
his 30-day period of service as Acting Secretary of State pursuant to
the Vacancies Act:
"It is probably safer to say that you should not take action in
any case out of which legal rights might arise which would be
subject to review by the courts."
In 56 Comp. Gen. 761 (1977), we considered the effect of actions
taken by the Acting Insurance Administrator, Department of Housing and
Urban Development, who had continued to serve beyond the 30-day time
limitation set forth at 5 U.S.C. Section 3348. We stated that when it
is too late to offer the advice set forth by the Attorney General in 32
Op. Atty. Gen. 139, the secretary of the department should consider
ratification of those actions and decisions already taken which she
agreed with to avoid any further confusion as to their binding effect.
As we further noted in our letter to you dated June 9, 1986, since
your original request of June 21, 1972, to our Office concerning the
applicability of 5 U.S.C. Section 3348 to the temporary appointment of
Mr. L. Patrick Gray III as Acting Director of the Federal Bureau of
Investigation, we have been called upon by members of the Congress to
issue many decisions concerning other officials in the various executive
branch departments and agencies. Although our decision holding that Mr.
Gray's continued service as Acting Director was prohibited by law /6/
resulted in the President's contemporaneous action in nominating Mr.
Gray to be the permanent Director, our more recent decisions finding
various executive branch officers serving in violation of the Vacancies
Act have had less than the desired salutory effect. In fact, there now
seems to be a discernible pattern for executive branch agencies to take
exception to our decisions on Vacancies Act questions and, supported by
the Department of Justice, to ignore the holdings of these decisions.
Our interpretation of the Act has consistently recognized that its
application can only be superseded in the case of statutes that provide
specifically for an alternate means of filling a particular office. The
executive agencies take the view that the Act can be overcome by the
general authority of a cabinet secretary to assign functions and
delegate authority within a department.
You have also asked what enforcement authority exists in the
Vacancies Act itself and what is the most appropriate remedy for
appointments in violation of the Act. The Vacancies Act does not
contain any specific enforcement authority or remedy for violations. In
other situations we have recognized that we have the authority to
disallow salary payments from appropriated funds for purposes that are
contrary to law. See 53 Comp. Gen. 600 (1974). However, the "acting"
official in Vacancies Act cases is usually one who is otherwise entitled
to the salary of his or her permanent position. Hence, we have not to
date exercised this authority in such cases.
We trust that the above information serves the purpose of your
inquiry concerning the applicability of the Vacancies Act to the
enumerated positions within the Departments of Labor and Education.
Sincerely yours,
Comptroller General of the United States
(1) B-220522, published at 65 Comp. Gen. . . . (1986).
(2) The position of Director of the Women's Bureau was established by
Public Law 66-259, effective June 5, 1920, 41 Stat. 987, 29 U.S.C.
Section 12 (1982). This section provides that the director shall be
"appointed by the President, by and with the advice and consent of the
Senate."
(3) George R. Salem was confirmed as Solicitor of Labor on August 1,
1986, and was appointed August 4, 1986; Salvatore R. Martoche was
confirmed as Assistant Secretary of Labor for Labor Management Standards
on May 21, 1986, and was appointed June 22, 1986; John A. Pendergrass
was confirmed as Assistant Secretary of Labor for Occupational Safety
and Health, on May 21, 1986, and was appointed on May 22, 1986; and
Paula V. Smith was confirmed as Wage and Hour Administrator on May 21,
1986, and was appointed June 2, 1986.
(4) On February 11, 1986, the President nominated Barbara Lerner to
be Assistant Secretary for Civil Rights. However, her nomination was
subsequently withdrawn.
(5) In addition, subsequent to March 28, 1986, three additional
positions became vacant, but have been refilled by persons confirmed by
the Senate for these positions as follows: Deputy Under Secretary for
Management was vacated on May 10, 1986, and is now occupied by Mary M.
Rose who was confirmed on August 9, 1986, and appointed on August 11,
1986; Deputy Under Secretary for Intergovernmental & Interagency
Affairs was vacated on July 5, 1986, and is now occupied by Peter R.
Greer who was confirmed on June 10, 1986, and appointed on July 7, 1986;
and the Commissioner, Rehabilitative Services Administration was
vacated on September 2, 1986, and is now occupied by Justin W. Dart, Jr.
who was confirmed on August 9, 1986, and appointed on September 3, 1986.
(6) B-150136, February 22, 1973.
FILE: B-220518.2 86-2 CDP 541
DATE: November 10, 1986
MATTER OF: ITT Base Services, Inc.; RCA Corporation; and Pan Am
World Services, Inc.
PROCUREMENT - SOCI-ECONOMIC POLICIES - LABOR STANDARDS - CONSTRUCTION
CONTRACTS - MINIMUM WAGE GUARANTEES - GOVERNMENT ESTIMATES
1. Protest that the agency's estimate of the amount of work covered
by Davis Bacon Act minimum wage requirements is based on inaccurate
information is denied where the record does not establish the claimed
inaccuracies.
PROCUREMENT - SOCI-ECONOMIC POLICIES - LABOR STANDARDS - CONSTRUCTION
CONTRACTS - WORKER CLASSIFICATION - PROPRIETY
2. When criteria used by the procuring agency to classify previous
repair and minor construction work as subject to the Davis Bacon Act
reasonably reflect the requirements of the statute, they may be used to
estimate the amount of Davis Bacon Act work offerors should expect to
perform under a subsequent contract.
PROCUREMENT - SOCI-ECONOMIC POLICIES - LABOR STANDARDS - CONSTRUCTION
CONTRACTS - MINIMUM WAGE GUARANTEES - GOVERNMENT ESTIMATES
3. Protest that agency's estimate of the amount of work included
under Davis Bacon Act minimum wage requirements is based on prior work
that was not performed by government employees and will not be included
in the contract is denied where the allegation is unsupported by the
record.
PROCUREMENT - SOCI-ECONOMIC POLICIES - LABOR STANDARDS - CONSTRUCTION
CONTRACTS - MINIMUM WAGE GUARANTEES - GOVERNMENT ESTIMATES
4. Protest that procuring agency used terms for estimating work
covered by the minimum wage requirements of the Davis Bacon Act that are
inconsistent with the definition of those terms in agency regulations
governing organizational responsibilities and accounting requirements is
denied where those regulations were not drafted to implement the Act.
ITT Base Services, Inc. (ITT), RCA Corporation (RCA), and Pan Am
World Services, Inc. (Pan Am), protest that the Department of the Army
failed to comply with an earlier decision of this Office, Dynalectron
Corp., B-220518, Feb. 11, 1986, 65 Comp. Gen. . . ., 86-1 CPD Paragraph
151, concerning the application of the Davis Bacon Act, 40 U.S.C.
Section 276(a) (1982), to request for proposals (RFP) No.
DAKF06-85-R-0052. The procurement involves a cost comparison under
Office of Management and Budget Circular A-76 to determine whether the
Army should continue performing base maintenance services at Fort
Carson, Colorado, with government personnel or have them performed by a
commercial firm. In our earlier decision, we held that the Army had
overstated the amount of work subject to the minimum wage requirements
of the Davis Bacon Act to the detriment of commercial firms in the cost
compairson process. We now conclude that the Army's revised
solicitation complies with the Act's requirements, and we deny the
protest.
The Contracting Division, Fort Carson, issued the solicitation on
February 1, 1985, seeking offers to perform base operations and
maintenance services on a cost-plus-award-fee basis. It plans to award
a contract for a base year and 4 option years if commercial performance
proves more economical than continued performance by government
employees. The services include a broad spectrum of activities such as
operation of the base railroad and water systems and road maintenance,
as well as a category entitled "project work," which involves separate
work orders for repair and minor construction projects that use
carpentry, plumbing, electrical, and similar skills.
In Dynalectron, we found that the solicitation estimate of the number
of contractor employees subject to the minimum wage requirements of the
Davis Bacon Act was erroneous because it was premised upon a misreading
of that Act. In particular, we concluded that the Army erred when it
applied the Davis Bacon Act's minimum wage requirements to all project
work simply because the cumulative total of the estimated work orders
exceeded the Act's $2,000 threshold, rather than applying the $2,000
threshold to each individual work order. Additionally, we questioned
the classification of certain activities, such as repairing a meat
slicer, as falling within the Davis Bacon Act, since such work was not
"construction, alteration and/or repair, including painting and
decorating, of public buildings or public works" as required by the
statute. This misclassification was important because Davis Bacon Act
wage rates are generally higher than those for comparable skills under
the Service Contract Act, 41 U.S.C. 351-358 (1982), which is otherwise
applicable. The more work that offerors must consider as subject to the
Davis Bacon Act for purposes of preparing cost proposals, the higher
those proposals will be relative to the Army's estimate for performing
the work with government employees.
In response to our decision, the Army issued amendment No. 17 to the
solicitation to correct its estimate of work subject to the Davis Bacon
Act. This included establishing a $2,000 threshold for Davis Bacon Act
activities initiated under the "project work" category and lowering the
estimated number of staff days covered by the Act by approximately 10
percent. The Army's revised estimate was prepared by reviewing all
orders issued for repair work on the installation during a sample
period, October 1, 1985, through March 4, 1986, and separating them into
those that would be governed by wage rates prescribed by the Davis Bacon
Act and those within the Service Contract Act. These labor hours were
then used to estimate the amount of Davis Bacon Act activity which would
be required each year under the base support contract.
ITT first questions whether a number of work orders should have been
included in the sample group categorized by the Army and used to
estimate the amount of Davis Bacon Act work. The protester's concerns
stem largely from the brevity of the work descriptions in the Army's
work papers, but prove to be unsubstantiated in light of additional
information supplied by the Army. For example, ITT asserts that the job
listed as "Vinyl Siding Misc. Bldg.," with an estimated cost of
$480,407, was contracted out to a private construction firm and should
not have been counted as work performed by Fort Carson's government
employees during the sample period. The Army explains that this item
covered work done by its employees to prepare the buildings for the
installation of siding, not the actual installation of siding, which was
done under contract. Similarly, ITT contends that a $208,588 project
described as "Tent City Renovation" was actually performed in 1984, well
in advance of the sample period. The Army explains that although Tent
City was initially constructed in 1984, its renovation was initiated
during the period reviewed. In our view, only one of ITT's concerns
about the sampling group is valid -- the estimated cost to replace a
3-way valve should have been $144,237 instead of $13,379 -- but that
error involved only the cost estimate, and did not affect the Davis
Bacon Act labor estimate. /1/
ITT argues that the Army should have used work orders completed
during the sample period rather than work orders issued. According to
the protester, this would have permitted analysis on the basis of actual
labor expended, which is more accurate than the estimated amount of
labor used to initiate work orders. The Army responds that its
estimates were established by trained estimators using standard
estimating techniques.
Assuming that accurate records of completed work were readily
available, they would have provided the most accurate record of Davis
Bacon Act work. We think, however, that the estimated hours are a
reasonable indicator of Fort Carson's experience, and ITT has not
suggested that the estimates are biased or inherently inaccurate in a
manner that would increase the Army's estimate of Davis Bacon Act work
as opposed to other work. Consequently, we do not believe that the Army
was required to use actual workload figures as a basis for its
estimates.
ITT alleges that even if the sample group of work orders provides a
valid basis for analysis, that analysis was not performed properly and
resulted in misclassification of repair services as Davis Bacon Act
work. In this regard, ITT questions the Army's technique of simply
categorizing all the work orders reviewed as subject to either the Davis
Bacon Act or the Service Contract Act without regard to the contractor's
responsibilities for facilities operation and maintenance. According to
ITT, repair work incident to maintenance must be classified under the
Service Contract Act. Therefore, ITT argues, the Army should determine
whether each work order in the sample group concerns a project within
the scope of the RFP provisions addressing facilities operation and
maintenance; those that are, ITT concludes, involve repair incident to
maintenance which should be classified under the Service Contract Act.
Applying this method of analysis, ITT concludes that the Army
improperly classified 120 of 370 work orders as subject to the Davis
Bacon Act, since there are specific operation and maintenance provisions
of the performance work statement that might encompass the work. For
example, because the contractor must operate and maintain a natural gas
distribution system, which includes repair or replacement of
malfunctioning gas valves, ITT contends that a $50,000 repair/
replacement project for gas valves is "repair incident to maintenance"
and already included in the maintenance provisions of the RFP.
The Davis Bacon Act's minimum wages apply to segregable projects
under this procurement that exceed $2,000 and consist of "construction,
alteration, and/or repair, including painting and decorating, of public
buildings or public works." 40 U.S.C. Section 276a(a); Dynalectron
Corp., supra. The implementing regulation, 29 C.F.R. Section 5.2(i)
(1986), distinguishes Davis Bacon Act projects from "servicing or
maintenance work" and identifies a long list of examples of Davis Bacon
Act "construction activity," including "buildings, structures, and
improvements of all types," "power lines," "rehabilitation and
reactivation of plants," and "excavating, clearing and landscaping." The
regulation, 29 C.F.R. Sections 5.2(j) and (k), includes within the
coverage of the Davis Bacon Act:
". . . all types of work done on a particular building or work
at the site thereof . . . all work done in the construction or
development of the project, including without limitation,
altering, remodeling, installation (where appropriate) on the site
of items fabricated off-site . . . ."
In light of the statute and implementing regulations, we agree with
the protester that repair activity that is in the nature of "servicing
and maintenance work," rather than "construction activity" should not be
considered Davis Bacon Act work. Distinguishing between these two types
of activities, however, may be difficult, and some repair activities
could reasonably be categorized as either Davis Bacon Act or Service
Contract Act repair work depending upon the context in which they are
performed.
The Army classified the sample pool of work orders based on a list of
criteria. An activity that constituted routine, day-to-day work to
extend the life of an item, system, or component was considered Service
Contract Act work, while, for example, major work involving
modifications to upgrade a facility, use new technology, standardize
components, or expand capacity was considered Davis Bacon Act work.
Other criteria used to identify Davis Bacon Act work included
"installation of components not previously existing," "relocation of
facilities," and "extension of utility systems."
Under the Army's analysis, the reconstruction of roads, bridges and
culverts would be considered Davis Bacon Act work, even though the
contractor is generally responsible for road maintenance. Again, the
repair and replacement of utility distribution systems is classified as
Davis Bacon Act work, even though the contractor must operate and
maintain base utility systems. We believe that the criteria used by the
Army for classifying work orders are appropriate, and that the work
considered to fall within the Davis Bacon Act is not included within the
operation and maintenance provisions of the RFP. The RFP defines
"maintenance" as "work on equipment and facilities routinely
accomplished to preclude breakdown or deterioration." Certainly, in some
contexts, work such as repairing a roof would be considered repair
incident to maintenance and would be included within the contractor's
operation and maintenance reponsibilities. In other contexts, such as
repairing major roof damage or failure, the work is properly considered
to be Davis Bacon Act "construction, alteration, and/or repair . . . of
public buildings or public works." In our opinion, the Army's criteria
for classifying Davis Bacon Act work orders reasonably capture this
distinction.
ITT also alleges that the estimated quantity of Davis Bacon Act work
in this solicitation is out of line with the estimated quantities in
solicitations covering comparable work at other Army installations.
According to ITT, comparable base maintenance contracts estimate only
5-15 percent of the work as Davis Bacon Act activity, while the estimate
for Fort Carson approximates 35 percent of the total work. This
disparity, ITT argues, reflects a misinterpretation of the labor laws in
Fort Carson's case.
The Army responds that the estimated extent of Davis Bacon Act work
at Fort Carson is not out of line with either the Army's estimates or
its experience at other installations. The Army cites 5 planned
solicitations with Davis Bacon Act estimates of 30, 15, 64, 20 and 26
percent, and its experience at 3 installations where the actual rates
have been 20, 40 and 20 percent. Finally, the Army explains that the
differences in the age of its installations, the variation in the scope
of support contracts, and the fact that some installations are using, on
an experimental basis, separate task order contracts for minor
construction result in wide divergence in the amount of Davis Bacon Act
activity encompassed within the Army's support contracts.
The Army has provided reasonable explanations for the different
percentage estimates of Davis Bacon Act type activities at its
installations and has shown that the estimates rates elsewhere are
comparable to Fort Carson's in many instances. Consequently. we have no
reason to question our conclusion that the Army's method of classifying
Davis Bacon Act work was reasonable.
RCA contends that the Army's review and categorization of past work
orders at Fort Carson is inconsistent with Army Regulations, in
particular AR 420-10, which prescribes the functions and
responsibilities of the Directorate of Engineering at the base level and
defines "maintenance" broadly to include work undertaken to prevent
damage to a facility, while "repair" is limited to the restoration of a
failed property or facility, and "construction" is limited to the
erection of new facilities or additions. RCA also argues that AR
420-16, which establishes procedures for the use of particular funding
accounts, distinguishes between funds allocated for repair and
maintenance and those allocated for construction, and limits
construction to 15 percent of maintenance and repair funds. To be
consistent with these regulations, RCA contends, the Army may classify a
work order as Davis Bacon Act work only if it falls within one of the
two narrow definitions of "construction" or "repair" in AR 420-10, and
all other activity is maintenance, covered by the Service Contract Act.
The Army regulations in question use terms -- such as "construction,"
"repair" and "maintenance" -- that are involved in determining whether a
particular project falls within the Davis Bacon Act or the Service
Contract Act. However, these regulations prescribe organizational
functions and responsibilities within the Army and govern proper use of
Army accounts; they do not interpret federal labor laws. The
regulations and the definitions included in them were not drafted to
serve the purpose RCA suggests, i.e., to implement the Davis Bacon Act
and Service Contract Act. We therefore cannot agree that they should
have been used by the Army in its application of federal labor laws to
the contract work.
Finally, Pan Am points out that the Army's sample of Fort Carson's
work orders includes more than 53 projects with a dollar value exceeding
$25,000, with many of those well in excess of that figure, up to
$480,407. Pan Am asserts that the Army's estimate of Davis Bacon Act
work for Fort Carson includes work that, in light of its magnitude, may
have been contracted-out for accomplishment, rather than accomplished by
the government work force.
The Army reports that the figures in question were extracted directly
from work orders performed by Fort Carson's employees during the sample
period, and this is consistent with the Army's explanation of the
specific work some of the larger jobs involved, such as preparing
buildings for siding. Pam Am's speculation to the contrary is
unsupported and insufficient to establish its case. See Isometrics,
Inc., B-219057.3, Jan. 2, 1986, 86-1 CPD Paragraph 2.
The protest is denied.
Harry R. Van Cleve
General Counsel
(1) We note one obvious error in the sampling group not raised by
ITT, the inclusion of project FH00001J for snow removal in both Davis
Bacon Act and Service Contract Act labor categories. However, the 120
hours involved are insignificant and would not have had a meaningful
affect on the labor hour estimates.
FILE: B-220517.2 85-2 CPD 607
DATE: November 26, 1985
MATTER OF: Emerson Electric Co. -- Reconsideration
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
RECONSIDERATION REQUESTS - ERROR OF FACT OR LAW - NOT ESTABLISHED
Prior dismissal of untimely protest is affirmed where protester fails
to show the dismissal was based on any errors of fact or law.
Emerson Electric Co. (Emerson) requests reconsideration of our prior
dismissal of its protest under request for proposals (RFG) No.
N66001-85-R-0068, issued by the Naval Ocean Systems Center, San Diego,
California (Navy) for a "Lightweight Battlefield Surveillance Radar
Electronics Package." Emerson filed a protest against the contracting
officer's request for best and final offers on a cost sharing basis
where the original solicitation contemplated a contract on a
cost-plus-fixed-fee basis. We dismissed the protest as untimely because
it did not comply with our Bid Protest Regulations requirement that a
solicitation impropriety, which did not exist in an original RFP but
subsequently is incorporated into the RFP, must be protested not later
than the next closing date for receipt of proposals. 4 C.F.R. Section
21.2(a)(1) (1985).
Emerson states that it has not alleged an impropriety in the
solicitation, but has protested the contracting officer's request for
best and final offers on a cost sharing basis.
According to the protester's submission, the request for best and
final offers incorporated a change in the RFP regarding the contract
type. Such a change, if challenged, constitutes an alleged solicitation
impropriety. See Battelle Memorial Inst., B-218538, June 26, 1985, 85-1
CPD Paragraph 726; SAFECOR, B-218613, May 16, 1985, 85-1 CPF Paragraph
559.
Alternatively, Emerson has requested consideration of this protest
under the significant issue exception to our timeliness rules. 4 C.F.
R. Section 21.2(c). We review an untimely protest under this exception
only where the protest involves a matter of widespread interest or
importance to the procurement community that has not been considered on
the merits in a previous decision. Harry Kahn Assoc., Inc., B-216306.2,
June 28, 1985, 85-1 CPD Paragraph 739. The exception is strictly
construed and used sparingly to prevent our timeliness rules from being
rendered meaningless. Id. We have previously considered protests
concerning the use of requests for best and final offers to change
solicitation requirements. E.g., Avitech Inc., B-214749, Sept. 17,
1984, 84-2 CPD Paragraph 297. Moreover, we fail to see why the issue
would be of widespread interest or importance to the procurement
community. Emerson merely alleges that the change of the contract type
was unfair because Emerson had been induced to participate in the
procurement by the initially-stated basis for payment. Under the
circumstances, we do not believe the protest raises a significant issue
as to warrant invoking the exception to our timeliness requirements.
See Victaulic Co. of America, B-217129, May 6, 1985, 85-1 CPD Paragraph
500.
Since Emerson has not raised any factual or legal grounds warranting
the reversal of our prior dismissal, the dismissal is affirmed. See
BECO Corp. -- Reconsideration, B-219350.2, June 20, 1985, 85-1 CPD
Paragraph 707.
Harry R. Van Cleve
General Counsel
FILE: B-220512.3 85-2 CPD 662
DATE: December 13, 1985
MATTER OF: BCI Communications Systems, Inc.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
1. Protest against alleged defective specification in step one of
two-step, sealed bidding procurement filed after closing date for
receipt of step-one technical proposals is untimely.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTOR
2. Protest not filed within 10 working days after the protester knew
or should have known the basis for protest is untimely and will not be
considered.
BCI Communications Systems, Inc. (BCI) protests the National
Aeronautics and Space Administration's (NASA) refusal to allow BCI to
compete in step two of a two-step, sealed bidding procurement for
telecommunications requirements under NASA solicitation No. W-10-34654/
HWD.
We dismiss the protest without requiring the submission of an agency
report, pursuant to our Bid Protest Regulations, 4 C.F.R. Section 21.3(
f) (1985), because on its face the protest is untimely.
BCI alleges that NASA has refused to allow it to compete in the
second step of this procurement because NASA believes that BCI does not
have the "Demonstrated Capabilities" specified in subparagraph L.1.4.1
of the solicitation regarding the ability to install and cut over a
system the size and complexity of the one specified for NASA
Headquarters. Admitting that its own demonstrated capabilities "come
slightly short of the requirement in this solicitation," BCI points out
that it maintains contractual working agreements with South Central Bell
Advanced Systems and has been a subcontractor to Bell Atlanticom
Systems, Inc. (Bell), which relationships should allow BCI to meet the
demonstrated capabilities test. Still, on October 25, 1985, BCI reports
that the contracting officer notified BCI that NASA would not relax the
requirement for proven capability and that BCI's technical proposal
therefore was considered to be unacceptable, thus, in BCI's words,
"ignoring BCI's relationship with South Central Bell." Furthermore, BCI
argues that since the potential awardee, Bell allegedly is using a
subcontractor to qualify, BCI should be afforded the same opportunity.
BCI filed its protest with our Office on November 13, 1985.
To the extent BCI protests against the specifications, a protest
against alleged solicitation improprieties which are apparent prior to
the closing date for receipt of initial proposals (here, the closing
date of the step-one request for technical proposals issued as part of
the two-step procurement) must be filed with either the contracting
agency or our Office prior to the closing date for receipt of technical
proposals. 4 C.F.R. Section 21.2(a)(1) (1985); Birdsboro Corp.,
B-218100, Feb. 11, 1985, 85-1 C.P.D. Paragraph 180. Since BCI did not
protest the solicitation requirement for demonstrated capabilities
until, by its own admission, after the contracting officer refused to
allow it to compete in step two of the procurement, BCI's protest
concerning the allegedly defective specification is untimely and will
not be considered.
Moreover, a protest based upon other than apparent solicitation
improprieties must be filed not later than 10 days after the basis of
the protest is known, or should have been known, whichever is earlier.
4 C.F.R. Section 21.2(a)(2) (1985). BCI admits that it was notified by
the contracting officer on October 21, 1985, that in view of the
solicitation's requirement for demonstrated capabilities, it would be
precluded from competing in step two of the procurement. Thus, BCI's
protest filed November 13, 1985, more than 10 working days after that
notification, is untimely. See Taurio Corp., B-219008.2, July 23, 1985,
85-2 C.P.D. Paragraph 74. Similarly, the issue relating to the
disparate treatment vis-a-vis Bell is untimely.
The protest is dismissed.
Robert M. Strong
Deputy Associate General Counsel
FILE: B-220512 DATE: October 11, 1985
MATTER OF: The Chesapeake and Potomac Telephone Company
DIGEST:
Protest that National Aeronautics and Space
Administration's acquisition methodology set
forth in the solicitation is overly restrictive
and not based upon proper evaluation of
alternative methods for procuring the subject
telecommunications system, filed after the
closing time for the receipt of proposals, is
untimely since it concerns apparent solicitation
improprieties and, thus, had to be
raised before that time.
The Chesapeake and Potomac Telephone Company protests the National
Aeronautics and Space Administration's (NASA) Request for Technical
Proposals No. W-10-34654/HWD, on the grounds that the agency's
acquisition methodology set forth in the solicitation is overly
restrictive and not based upon proper evaluation of alternative methods
for procuring the telecommunications system covered by the solicitation.
We dismiss the protest.
The solicitation, which was issued August 12, 1985, required that
proposals be submitted by 2:30 p.m. on September 30. We received this
protest at 3:31 p.m. on September 30. Our Bid Protest Regulations
require that a protest based on an alleged impropriety that is apparent
prior to the closing date set for receipt of proposals be filed before
the time set for receipt. 4 C.F.R. Sec. 21.2( a) (1) (1985); see
Interactive Systems Corporation, B-200218, Oct. 6, 1980, 80-2 C.P.D. P
245. Since NASA's acquisition methodology was apparent on the face of
the solicitation, the protest, filed after proposals were received, is
untimely.
Robert M. Strong
Deputy Associate General Counsel
FILE: B-220511.2 85-2 CPD 661
DATE: December 13, 1985
MATTER OF: Peripheral Business Systems
CONTRACTS - PROTESTS - ABEYANCE PENDING - CONTRACT APPEALS BOARD
ACTION
Protest involving the procurement of personal computers, which is
also the subject of a protest pending before the General Services
Administration Board of Contract Appeals (GSBCA), is dismissed in
deference to the binding effect of a GSBCA decision on the federal
agency involved, subject to appeal to the United States Court of Appeals
for the Federal Circuit.
Peripheral Business Systems (PBS) protests the rejection of its
proposal as technically unacceptable and the award of a contract to
Computerland of San Diego under request for proposals (RFP) No.
N66001-85-R-0295 issued by the Department of the Navy, Naval Ocean
Systems Center (Navy), San Diego, California, for personal computers.
PBS contends that it should be awarded the contract because its proposal
complied with the specifications, was lower priced, and was not
thoroughly evaluated by the Navy.
After PBS filed this protest with our Office, Computer Lines filed a
protest on this same procurement with the General Services
Administration Board of Contract Appeals (GSBCA) contending that there
was a long delay in the issuance of the postaward notice, that its
proposal was improperly rejected as technically unacceptable and that
the contract award was not made to the lowest bidder. PBS and PML
Systems, another interested party, intervened in the GSBCA proceedings.
PBS was granted "permissive intervenor" status because it filed this
protest with our Office. The General Services Administration also was
granted intervenor status on the question of whether the Navy's
procurement was properly authorized.
Under our Bid Protest Regulations, after a procurement or proposed
procurement is protested to the GSBCA, the same procurement may not be
the subject of a protest to this Office while the protest is before the
GSBCA. 4 C.F.R. Section 21.3(f)(6) (1985). This language effectively
provides that once the GSBCA has exercised juridiction, any protest to
this Office involving the same procurement will be dismissed without
consideration in deference to the binding effect of a GSBCA protest
decision on the federal agency involved, subject to appeal to the United
States Court of Appeals for the Federal Circuit. Comdisco, Inc.,
B-218276.2, Apr. 4, 1985, 85-1 C.P.D. Paragraph 391; Resource
Consultants, Inc., B-218634.2, Nov. 21, 1985, 65 Comp. Gen. (blank),
85-2 C.P.D. Paragraph (blank).
The protest therefore is dismissed.
Ronald Berger
Deputy Associate General Counsel
B-220500
September 12, 1986
DISBURSING OFFICERS - RELEIF - ERRONEOUS PAYMENTS - NOT RESULT OF BAD
FAITH OR NEGLIGENCE
Relief is granted Army disbursing official under 31 U.S.C. Sec.
3527(c) from liability for three improper payments resulting from
payee's negotiation of 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 official
and subsequent collection attempts are being pursued. However, we
recommend that Army develop guidelines for dealing with payees
requesting more than one substitute check within a relatively short
period of time.
Mr. Clyde E. Jeffcoat
Principal Deputy Commander
U.S. Army Finance and Accounting Center
Indianapolis, Indiana 46249
Dear Mr. Jeffcoat:
This responds to your requests of March 4 and April 22, 1986, that we
relieve Captain (CPT) W. P. Ruggia, Finance Corps, DSSN6410, Finance and
Accounting Officer, Rock Island Arsenal, Rock Island, Illinois, under 31
U.S.C. Sec. 3527(c) for three improper payments totalling $558.65,
payable to Ms. Vada L. Shelby. For the reasons stated below, relief is
granted. However, we are concerned about the lack of guidelines for
dealing with persons requesting more than one substitute and/or
replacement check within a relativeiy short period of time.
In this case the payee, Ms. Shelby, over a period of less than 7
months, from March 1, through September 13, 1982, requested and received
five separate substitute payments, totalling $1,027.05. (We have
previously granted relief to CPT Ruggia for two improper payments made
to Ms. Shelby totalling $468.40, B-220500, December 16, 1985). In each
instance, the payee alleged within the proper time frame that the
original check had not been received and in each instance CPT Ruggia
issued the substitute instrument on the day the stop payment request was
made. A summary of the events is presented below:
Amount Date of Date of Debit
of Original Substitute Voucher Resignation
Check Check Check Date Date of Payee
$128.04 2/23/82 3/1/82 7/25/84 10/29/82
$244.40 3/9/82 3/15/82 7/25/84
$234.20 7/27/82 7/30/82 2/16/83*
$186.21 8/10/82 8/16/82 7/17/84
$234.20 9/3/82 9/13/82 3/2/83*
* Relief has been granted in these cases. B-220500, December 16,
1985.
As you can see from the chart, the debit vouchers from Treasury
indicating that a loss had occurred did not come in until after Ms.
Shelby had resigned. Further, the debit vouchers were not received at
the same time or in the sequence that the losses occurred. As a result,
CPT Ruggia forwarded the losses to USAFAC at different times.
We received the relief request for the checks issued in July and
September 1982 on September 20, 1985. The submission contained no
indication that Ms. Shelby had on three other occasions requested and
received substitute payments. However, we did contact USAFAC on October
2 and October 16, 1985, to find out what procedures, if any, had been
taken when Ms. Shelby came in for what we assumed was the second time.
We were informed that in September when Ms. Shelby applied for a
substitute check, her request had to be personally approved by CPT
Ruggia. On the basis of this information, we granted relief.
Your second relief request on behalf of CPT Ruggia pertaining to Ms.
Shelby was dated March 4, 1984, and involved the August 1982 check.
Included in your submission was a military police report investigating
three substitute payments, the August check and the two checks issued in
March 1982. On March 19, 1986, we contacted USAFAC to find out the
status of the losses resulting from the March checks. We were told that
these cases were being processed for relief and that we would receive
them as soon as possible. Your third relief request on behalf of CPT
Ruggia involving Ms. Shelby was dated April 22, 1986.
After receiving your third request, we again requested information on
what steps were taken by CPT Ruggia, in view of the fact that Ms.
Shelby had repeatedly claimed nonreceipt of her original paychecks and
that she had requested and received five substitute instruments. We
were informed that in September CPT Ruggia personally interviewed Ms.
Shelby and counseled her to have her paychecks sent directly to either a
bank or post office box.
As you are aware, this Office has authority under 31 U.S.C. Sec.
3527(c) to relieve a disbursing officer from liability when the record
indicates that the disbursing officer acted within the bounds of due
care as established by applicable regulations, that there is no evidence
of bad faith on the part of the disbursing officer and that a diligent
effort was made to collect the overpayment. 62 Comp. Gen. 91 (1982).
If we apply this standard individually to the overpayments made to
Ms. Shelby the standard would be met in each instance. It is only when
the overpayments are viewed collectively that it becomes unclear whether
CPT Ruggia exercised due care in issuing five separate substitute
payments to the same payee within a period of less than 7 months.
CPT Ruggia issued the substitute checks on the basis of Ms. Shelby's
allegations that she had not received her original paychecks and her
request for stop payment. Following standard procedures, CPT Ruggia
issued the substitute checks to Ms. Shelby on the days she made the
requests for stop payments. While we do not question this procedure for
the first or even second request, when Ms. Shelby came in for the third
time, we believe CPT Ruggia should have delayed issuing the substitute
payment whiie he attempted to verify from the Department of Treasury the
status of the previously issued instruments. In addition, we think that
CPT Ruggia should have counseled Ms. Shelby at that time to have her pay
deposited directly in a financial institution where its receipt could be
verified. Obviously, CPT Ruggia was aware of the problem when he did
counsel Ms. Shelby after the fifth occasion.
There are no Army regulations requiring that a finance officer delay
issuing a substitute check to a payee who had,in the past, claimed
non-receipt, nor are there regulations or guidelines requiring a finance
officer to verify the status of previously issued checks. The Army's
policy is to issue substitute checks within 3 days after the date of the
original check, when there is no indication of fraud on the part of the
payee. The purpose of this policy is to avoid the creation of hardship
to individuals where payments are denied. 63 Comp. Gen. 337 (1984).
Under these circumstances, and in view of the fact that we had
previously granted relief to CPT Ruggia for the third and fifth
payments, we will grant relief here.
Nevertheless, we think that the Army should develop guidelines for
handling multiple requests by the same payee for substitute payments.
The content of such guidance would, of course, be up to the Army to
determine. However, we suggest that after the second request for stop
payment within a 6month period, the payee 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 would recommend that after a substitute check has
been issued on two previous occasions, steps 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 also would allow
collection of the overpayments while the employee is still employed.
If the stop payment request is for the payee's final pay check, we
would also recommend that the finance officer verify tne status of any
previously issued substitute payment before issuing the substitute
check.
Finally, we would find it helpful if, in the future, your relief
request includes information on whether the payee has at any time
received a substitute check and if so what the status of the checks are.
This information should be available since under Army regulations,
records of substitute checks issued must be retained by the finance and
accounting officer for a period of 3 years. AR-37-103, para. 4-165.
Sincerely yours,
(Mrs.) Rollee H. Efros
Associate General Counsel
FILE: B-220493 DATE: Octover 17, 1985
MATTER OF: Industrial Disposal Systems, Inc.
DIGEST:
1. GAO does not review affirmative determination
of responsibility unless protester shows that
determination may have been made fraudulently
or that definitive responsibility criteria in
the solicitation were not met.
2. Solicitation requirement that bidder be
regularly established in rubbish hauling
business is not definitive responsibility
criterion.
Industrial Disposal Systems, Inc. (IDS), protests against an award of
a contract to Durrah Corporation (Durrah) under solicitation No.
541-20-86, issued as a small business labor surplus area set-aside by
the Veterans Administration (VA) for hauling rubbish from the VA
hospital in Brecksville, Ohio.
IDS points out that the solicitation requires that bidders be
regularly established in the business. IDS contends that Durrah does
not satisfy this requirement. Also, IDS contends that Durrah, if
awarded the contract, will subcontract a substantial portion of the work
to a firm that is not a small business.
The protest is dismissed.
IDS's contention that Durrah does not satisfy the requirement that
bidders be regularly established in the rubbish hauling business is a
challenge to Durrah's responsibility. Our Office does not review an
agency's affirmative determination of a bidder's responsibility unless
the protester shows either that the determination may have been made
fraudulently or that definitive responsibility criteria in the
solicitation were not met. Rolen-Rolen-Roberts International et al.,
B-218424, et al., Aug. 1, 1985, 85-2 C.P.D. P 113. Neither exception
applies here. IDS does not allege fraud. Further, the requirement that
a bidder be regularly established in the business is not a definitive
responsibility criterion. Rolen-Rolen-Roberts International et al.,
B-218424 et al., supra.
Moreover, once the contract is awarded, compliance with contract
requirements is a matter of contract administration and is the
responsibility of the procuring agency rather than our Office. Mann
Rental Service, B-216868, Oct. 31, 1984, 84-2 C.P.D. P 493. In any
event, we note that subcontracting with a large business firm under a
service contract set aside for small business is not legally
objectionable. Mann Rental Service, B-216868, supra.
Robert M. Strong
Deputy Associate
General Counsel
FILE: B-220479 DATE: March 10, 1986
MATTER OF: George W. Mackson - Second Househunting Trip
DIGEST:
OFFICERS AND EMPLOYEES - TRANSFERS - TRANSPORTATION - FOR HOUSE
HUNTING - DISALLOWANCE
Employee who was permanently transferred from Cincinnati to
Cleveland, Ohio, seeks reimbursement for costs of second
househunting trip. The claim is denied since an employee may be
reimbursed travel and transportation expenses for only one round
trip between the localities of the old and new duty stations for
the purpose of seeking residence quarters. 5 U.S.C. Sec. 5724a(
a)(2) (1982); Federal Travel Regulations para. 2-4.1a (Supp. 4,
August 23, 1982).
This decision is in response to a request by Ms. Bonnie Mathews,
Authorized Certifying Officer, Internal Revenue Service (IRS),
Department of the Treasury, for a determination as to whether the costs
of a second househunting trip by Mr. George W. Mackson, an employee of
the agency, are reimbursable. The claim was disallowed by IRS. Mr.
Mackson has submitted a reclaim travel voucher requesting reimbursement
of the costs incurred during his second round trip to seek residence
quarters at his new duty station. For the reasons stated later, only one
round trip by the employee may be reimbursed, and his claim is denied.
In November 1984, Mr. Mackson was authorized a permanent change of
official station from Cincinnati to Cleveland, Ohio. He was authorized a
househunting trip for the period November 14 through November 23, 1984.
Mr. Mackson signed an application to lease a residence in Cleveland on
November 16, 1984. Four days were required to process the application.
The employee elected to return to Cincinnati tp await the approval or
disapproval of the lease. The lease was approved on November 20, 1984.
The date of occupancy of the new residence was November 27, 1984. The
execution of the lease was required prior to his transfer. Mr. Mackson
therefore made a second round trip to Cleveland to sign the lease.
Mr. Mackson states that had he remained in Cleveland during the
period the lease was being approved, the cost of per diem for 4 days at
$50 per day would have totaled $200. The cost of his second trip to
Cleveland was $175. He therefore contends that he effectuated a savings
to the Government of $25.
Section 5724a(a) (2) of title 5, United States Code, 1982, provides
that the expenses incurred in seeking permanent residence quarters at a
new official station may be allowed "only for one round trip in
connection with each change of station of the employee." The
implementing regulation, paragraph 2-4.1a, Federal Travel Regulations,
FPMR 101-7 (Supp. 4, August 23, 1982) (FTR), incorp. by ref., 41 C.F.R.
Sec. 101-7.003 (1985), provides for payment of travel and transportation
expenses of the employee for "one round trip between the localities of
the old and new duty stations for the purpose of seeking residence
quarters."
In our recent decision, Riva Fralick, et al., B-217519, April 18,
1985, 64 Comp. Gen. 472 (1985), we affirmed our earlier interpretation
of the statutory provision, and the predecessor regulatory provision, to
mean that only one round trip, not several round trips, between the
localities of the old and new duty stations to seek residence quarters
is contemplated.
Here, the fact that Mr. Mackson may have ef fectuated a savings to
the Government by returning to Cincinnati during the period his
application to lease a residence in Cleveland was being processed, and
his required return to Cleveland to sign the lease prior to his
transfer, does not establish a basis for derogation or waiver of the
express provisions of the statute and regulations or create additional
entitlement to reimbursement. Fralick, supra.
Accordingly, the reclaim travel voucher submitted by Mr. George W.
Mackson, for reimbursement of the costs of a second househunting trip in
connection with his change of official station from Cincinnati to
Cleveland, Ohip, may not be certified for payment.
Acting Comptroller General
of the United States
FILE: B-220476.2 85-2 CPD 451 DATE: October 23, 1985
MATTER OF: Midwest Holding Corporation--Request
for Reconsideration
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
RECONSIDERATION REQUESTS - ADDITIONAL EVIDENCE SUBMITTED - AVAILABLE BUT
NOT PREVIOUSLY PROVIDED TO GAO
Information available to show a protest is timely must be
submitted at the time of the initial protest and not with a
request for reconsideration of the dismissal of the initial
protest.
Midwest Holding Corporation requests that we reconsider our dismissal
of September 27, 1985 of its initial protest B-220476 filed on September
26, 1985, concerning the rejection of its low quotation submitted to the
Department of the Air Force in response to request for quotations (RFQ)
No. F0470O-85-Q-4646. We dismissed the protest as untimely under our
Bid Protest Regulations, 4 C.F.R. Sec. 21.2(a)(2) (1985), because the
protest was not filed within 10 working days after the basis of protest
was known, or should have been known. Midwest contends that the
dismissal was the result of an ambiguity in its initial protest. We
affirm the dismissal.
Our Office will reconsider a decision when the party asking us to do
so specifies any errors of law made or information not previously
considered. See 4 C.F.R. Sec. 21.12(a). Information not previously
considered refers to information which was previously overlooked by our
Office or information which the requester did not have access to when
the initial protest was pending. S.A.F.E. Export Corp.--Reguest for
Reconsideration, B-215022.4, Sept. 17, 1984, 84-2 C.P.D. P 298.
The part of Midwest's initial protest on which we primarily based the
dismissal reads as follows:
"Midwest submitted one of three bids for air cooled
refrigeration units under the solicitation. On August 20, 1985,
Midwest received the Governments notice that, although Midwest was
low bidder, its bid was not technically acceptable. Specifically,
the Government stated that a 'Technical Evaluation by using
organization states dimensions on iow bid item unacceptable,' See
Abstract of Award appended hereto as Exhibit '1.'"
Midwest now contends that while it learned of the rejection of its
bid on August 20, it did not learn of the basis for its protest until it
received the abstract of award on September 23. Since its initial
protest was received by us on September 26, Midwest believes that it was
timely.
We have recently held that protesters have the obligation to furnish,
at the time they initially protest to us, all relevant information
bearing on the timeliness of tne protest. See Global Crane
lnstitute-Request for Reconsideration, B-218120.2, May 28, 1985, 85-1
C.P.D. P 606. In that case, we affirmed our dismissal of the protest as
untimely because the protester did not advise us, until it requested
reconsideration, that it previously nad filed a timely protest with the
contracting agency; had that information been provided in the protest
initially, we would have viewed the protest as timely. In affirming the
dismissal, we pointed out that in view of the statutory requirements for
prompt resolution of protests imposed by the Competition in Contracting
Act of 1984, 31 U.S.C.A. Sec. 3554(a)(1) (West Supp. 1985), it generally
would be inappropriate for us to later consider information that the
protester could have presented initially.
We think the same rationale applies here. Midwest knew when it
learned of the basis for protest, yet did not indicate that in its
protest; instead, it referred to a much eariier date which made the
protest, on its face, untimely. Under these circumstances, we will not
now consider the protest on the merits.
The prior dismissal is affirmed.
Harry R. Van Cleve
General Counsel
FILE: B-220471 86-1 CPD 8
DATE: January 3, 1986
MATTER OF: Hayes International Associates
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTOR
Protest is untimely where a detailed statement of the factual and
legal grounds for it is not filed within 10 working days after the
protester knows or should have known the grounds. Mere notice of an
intent to protest in the future is not sufficient for timeliness
purposes.
Hayes International Associates protests the award of a contract to
the Vac-Hyd Corporation under request for proposals (RFP) No.
DAAC83-85-R-0047, issued by the Corpus Christi, Texas, Army Depot.
Hayes questions the contracting officer's decision to make an award
without negotiating with it and challenges Vac-Hyd's status as a small
business concern. The protester also alleges that contracting officials
must have told Vac-Hyd how Hayes priced its offer, so that Vac-Hyd could
offer a price just below that of Hayes. Finally, Hayes asks why its
prompt payment discount was not evaluated, since with the discount, the
Hayes offer would have been low.
We dismiss the protest as untimely.
The RFP, issued June 3, 1985, solicited offers for a
requirements-type contract for the repair of government furnished T53
Compressor Rotor Blades. The Army received 14 offers; Vac-Hyd's was
low at $5.94 per item for a total price of $445,500. Hayes' was second
low at $6.13 per item for a total price of $459,750. On July 25,
without holding discussions, the Army awarded the contract to Vac-Hyd
and notified Hayes and the other unsuccessful offerors. A synopsis of
the award was published in the Commerce Business Daily (CBD) on August
2.
It is unclear on what date Hayes actually learned of the award.
However, the record shows that Hayes was aware of the contracting
officer's decision no later than August 23, for on that date it prepared
a letter and sent a telegram to our Office, both stating that Hayes
"will be protesting the award" and that "formal protest will be
submitted as of this date." We received the telegram on August 26 and
the letter on August 29; however, we never received further specific
grounds for protest. Since both the letter and the telegram expressed
only an intent to protest, we did not treat them as a formal protest and
did not open a file. This is consistent with our Bid Protest
Regulations, which require a detailed statement of the factual and legal
grounds for protest and copies of relevant documents. 4 C.F.R. Section
21.1(b)(4) (1985).
Subsequently, on September 26, we received a letter from Hayes that
contained specific grounds for protest. Since no file had been opened
on Hayes' earlier submissions, and since the September 26 letter made no
reference to Hayes' earlier correspondence and was worded so that it
appeared that Hayes was submitting a protest for the first time, we
opened a file based on this letter. Only after our receipt of the
agency's administrative report did it become apparent that Hayes had
first learned the grounds of its protest much earlier than September 26.
Our Office regards bid protests as serious matters that require
effective and equitable procedural standards, so that the parties have a
fair opportunity to present their cases and so that protests can be
resolved without unduly disrupting the government's procurement process.
Therefore, our regulations establish specific deadlines for filing with
our Office, and these deadlines are strictly construed. William A.
Stiles, III -- Reconsideration, B-215922.3, Feb. 19, 1985, 85-1 C.P.D.
Paragraph 208.
Under our regulations, Hayes was required to file its protest not
later than 10 working days after the basis for it was known or should
have been known, whichever was earlier. 4 C.F.R. Section 21.2(a)(2).
As indicated above, Hayes should have known its basis of protest in
early August, either from the contracting officer's notice to
unsuccessful offerors or the CBD synopsis. Since the earliest
communication from Hayes to our Office was received on August 26, it
appears that even that submission was untimely.
In any event, as noted above, neither Hayes' initial telegram nor
letter set forth a detailed statement of the legal and factual grounds
of protest, and the September 26 letter which did so is clearly
untimely. In this regard, the time for fixing the date of a protest for
timeliness purposes is when the protest is actually filed, and not when
the protester indicates an intent to file in the future. Decom Systems,
Inc., B-215167, Sept. 24, 1984, 84-2 C.P.D. Paragraph 333.
We therefore find the protest untimely. For the benefit of the
protester, however, we point out the following:
First, a contracting agency may make an award without holding
discussions when it can be clearly demonstrated from the existence of
full and open competition or accurate prior cost experience with the
product or service that acceptance of an initial proposal without
discussions would result in the lowest overall cost to the government.
See 10 U.S.C.A. Section 2305(b)(4)(A)(ii) (West Supp. 1985), as amended
by the Competition in Contracting Act of 1984. Here, without
consideration of prompt payment discounts (discussed below), acceptance
of Vac-Hyd's offer did result in the lowest overall cost to the
government. Further, it was in accord with the solicitation, which
indicated that the low offeror would receive the award.
Second, the Small Business Administration has conclusive statutory
authority to determine matters of small business size status for federal
procurement purposes and, therefore, our Office does not consider size
status protests. 15 U.S.C. Section 637(b)(6) (1982); Mark Dunning
Industries, Inc., B-217500, Jan. 18, 1985, 85-1 C.P.D. Paragraph 68.
Third, when improper conduct on the part of government officials is
alleged, the protester has the burden of proof, and our Office will not
rely on inferences alone to find such midconduct. Monarch Engineering
Co., B-218374, June 21, 1985, 85-1 C.P.D. Paragraph 709.
Finally, the procurement regulations now provide that prompt payment
discounts will not be considered in determining the lowest offer. FAR,
48 C.F.R. Section 14.407-3; Tri-State Laundry Services, Inc. d/b/a
Holzberg's Launderers and Cleaners, B-218042, Feb. 1, 1985, 85-1 C.P.D.
Paragraph 127. Under current regulations, an offered prompt payment
discount may be taken if it is earned by the government; it does not,
however, play a role in the evaluation of offers.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
B-220466, B-222333, B-223113
December 9, 1986
APPROPRIETIONS/FINANCIAL MANAGEMENT - ACCOUNTABLE OFFICERS - CASHIERS
- LIABILITY - ILLEGAL/IMPROPER PAYMENTS - QUANTUM MERUIT/ VALEBANT
DOCTRINE
APPROPRIETIONS/FINANCIAL MANAGEMENT - ACCOUNTABLE OFFICERS -
CERTIFYING OFFICER - LIABILITY - ILLEGAL/IMPROPER PAYMENTS QUANTUM
MERUIT/VALEBANT DOCTRINE
Internal Revenue Service (IRS) request for relief from liability
pursuant to 31 U.S.C. Sec. 3528(b) on behalf of five certifying officers
who erroneously certified for payment a total of $4,003.15 in imprest
fund replenishment vouchers for improperly procured moving services at
the Parkersburg, West Virginia District of the IRS is unnecessary.
Under the equitable jurisdiction of GAO's claims settlement authority,
31 U.S.C. Sec. 3702 (1982), this Office authorizes payment of the
laborers invoices under a theory of quantum meruit. IRS is authorized
to cure the def iciency in each accountable officer's account by making
an accounting adjustment, debiting the appropriate account from which
the laborers invoices properly may be paid, and crediting the
appropriate accounts of the accountable officers in question. For
similar reasons, an imprest fund cashier who was required by IRS to
reimburse her account as a consequence of a similar improper payment
should be reimbursed.
Mr. Billy J. Brown
Assistant Regional Commissioner
Central Region
Internal Revenue Service
550 Main Street
Cincinnati, Ohio 45202
Dear Mr. Brown:
This is in response to your letter dated September 11, 1985,
requesting relief from liability on behalf of five Internal Revenue
Service (IRS) certifying officers. The certifying officers in question
certified for payment a total of $4,003.15 in imprest fund replenishment
vouchers which included charges for improperly procured casual labor at
the IRS Parkersburg, West Virginia District. This letter also concerns
the liability of Ms. Garnet Powell, an imprest fund cashier at the
Parkersburg IRS office, who was required to reimburse an imprest fund in
the amount of $217.50 as a consequence of a similar improper
expenditure.
It is not necessary to relieve any of the accountable officers in
question. Although we agree with IRS that the replenishment vouchers in
question were not payable from the small purchases imprest fund nor were
proper contracting procedures followed, we find that all the elements
justifying payment for the services on a quantum meruit basis are
present in this case. As explained more fully below, we authorize the
IRS to make the proper accounting adjustments, with the result that the
proper agency accounts will be debited in amounts representing the fair
value of the services performed. These amounts should then be credited
to the imprest funds from which the original payments were made. The
resulting overpayment in Ms. Powell's fund should then be reimbursed to
her.
On several occasions from April 1983 to mid-1984, IRS officials at
the Parkersburg IRS Facilities Management Branch acquired the services
of non-IRS personnel to move furniture and other equipment in the local
area. No formal contracts were awarded for the services. In each
instance an employee at the Facilities Management Branch used small
purchase procedures to pay temporary, casual laborers to accomplish the
task. Following each job, a completed invoice was submitted to an
imprest fund cashier, indicating that the services had been received and
requesting payment to the laborers. Each time, the cashier paid the
requested amounts out of the Branch small purchases imprest fund and
submitted replenishment vouchers to a regional certifying officer,
requesting issuance of replenishment checks. Each replenishment voucher
was certified as correct and proper by the certifying officer. Five
different certifying officers were involved, over a 16-month period.
In August 1984, a newly-appointed chief of the Facilities Management
Branch refused to authorize payment of an imprest fund replenishment
voucher which included charges for casual labor, similar to the vouchers
here in question, on the ground that it was improper to use the small
purchases imprest fund for the payment of such expenses. (As a result
of the refusal of the Branch Chief to authorize payment of the voucher,
Ms. Powell, an imprest fund cashier at the Parkersburg IRS office was
required to reimburse the imprest fund in the amount of $217.50. Ms.
Powell's independent request for reimbursement of those funds is
discussed below. An IRS investigation resulted in a finding that
previous payments by five certifying officers totalling $4,003.15 had
violated regulations and procedures concerning the use of the small
purchase imprest funds. IRS has requested relief from liability on
behalf of those certifying officers under 31 U.S.C. Sec. 3528(b) (1982).
As mentioned above, we concur with IRS that the casual
laborers'services constituted personal services. The IRS Imprest Fund
Handbook (IRM 1724) expressly limits the use of the small purchases
imprest fund to make cash payments for non-personal services only. In
addition, IRS officials failed to follow proper procurement practices.
The acquisition of personal services without regard to the hiring
requirements of title 5 of the United States Code is not authorized
except when the existence of an emergency is properly documented. While
the IRS could, of course, have obtained moving services by awarding a
non-personal services contract, the proper contracting procedures, such
as publishing announcements or receiving bids, were not followed.
Notwithstanding the improprieties in the procurement of the moving
services in question, under GAO's equitable claims settlement authority,
31 U.S.C. Sec. 3702 (1982), the Comptroller General may authorize the
reimbursement of a party who has performed a service for the Government,
in spite of the failure to follow proper contracting procedures. Where
the performance by one party has benefitted 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.
See, e.g., Bouterie v. Carre, 6 So.2d 218, 220 (La. App. 1942); Kintz
v. Read, 626 P.2d 52, 55 (Wash, App. 1981); B-212256, September 18,
1984.
This Office, accordingly, may authorize payment under a theory of
quantum meruit when certain conditions are met. We must make a
threshold determination that the services would have been a permissible
procurement had the proper procedures been followed. We must then find
that (1) the Government received and accepted a benefit; (2) the
contractor acted in good faith; and (3) the amount claimed represents a
reasonable value for the benefit received. 64 Comp. Gen. 395, 405
(1985); 63 Comp. Gen. 579, 584 (1984).
We conclude that all of the elements necessary for payment of the
casual labor expenses in question on the basis of quantum meruit are
present in the case at hand. Had we been asked after the services were
performed but before payment was made, we would have authorized the
payments. We have no reason to question that the procurement of the
moving services by the IRS would have been permissible had proper
contracting procedures been followed. The IRS does have authority to
contract for moving services, although possibly not on a personal
services basis. IRS points out that it has a specific accounting code
to record the cost of laborer expenses involved in moving furniture and
equipment. Additionally, it is clear here that the Government received
and accepted a benefit. An IRS internal audit uncovered no evidence
that the work was not completed satisfactorily. Further, there is no
indication that the laborers in question did not act in good faith.
Finally, the IRS audit did not find any indication that excessive rates
were charged by the movers. Accordingly, we conclude that the laborers'
invoices constitute the reasonable value of the services performed and
are payable under a theory of quantum meruit.
IRS, accordingly, is authorized to make an accounting adjustment,
debiting the appropriate account from which the laborers' invoices
properly may be paid, and crediting the appropriate accounts of the
certifying officers in question.
This will cure the deficiency in the accounts of the five certifying
officers, making relief from liability unnecessary. We assume that
sufficient funds remain available in the appropriate account (or "M"
account) to accomplish this accounting transaction.
We have received a letter from Ms. Powell, an imprest fund cashier at
the Parkersburg IRS Office. Ms. Powell was required by IRS to reimburse
her imprest fund in the amount of $217.50 as a consequence of the
refusal of the Branch Chief to authorize payment of an invoice for
moving services in that amount. Ms. Powell requests repayment of those
funds.
Although IRS correctly determined that the $217.50 payment made by
Ms. Powell was improper, we conclude that, for reasons identical to
those put forth above in the discussion of the liability of the five
certifying officers, the deficiency in Ms. Powell's account should be
cured by debiting the appropriate account from which the laborer's
invoice in question can be paid, and crediting Ms. Powell's account.
Ms. Powell may then be reimbursed in the amount of $217.50.
Sincerely yours,
(Mrs.) Rollee Efros
Associate General Counsel
FILE: B-220465 86-1 CPD 95
DATE: January 28, 1986
MATTER OF: Tumpane Services Corporation
CONTRACTS - PROTESTS - INTERESTED PARTY REQUIREMENT - POTENTIAL
CONTRACTORS, ETC. NOT SUBMITTING BIDS, ETC.
1. 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 that firm was unable to submit a proposal because of
its uncertainty concerning the applicability of a state leasehold excise
tax which would affect offeror's price.
CONTRACTS - NEGOTIATION - REQUESTS FOR PROPOSALS - PRICING
REQUIREMENTS - TAXES
2. Where request for proposals requires that the contract price
include all applicable taxes, state leasehold excise tax which is of
doubtful applicability must be included in an offer.
CONTRACTS - NEGOTIATION - REQUESTS FOR PROPOSALS - PRICING
REQUIREMENTS - TAXES
3. Where solicitation requires that the contract price include all
applicable taxes and prospective offerors have information which is
needed to compute amount of state leasehold excise tax, prospective
offeror could have prepared offer including an amount for state
leasehold excise tax of doubtful applicability.
Tumpane Services Corporation (Tumpane) protests that the uncertain
applicability of the Washington State leasehold excise tax makes it
impossible to prepare a price proposal under request for proposals (RFP)
No. 10PN-NCS-0408 issued by the General Services Administration (GSA)
for operation of the GSA Fleet Management Center in Vancouver,
Washington. This solicitation was issued as part of a cost comparison
under Office of Management and Budget Circular No. A-76 to determine
whether it is less expensive to contract out the work instead of
performing it in-house.
We deny the protest.
Initially, GSA argues that Tumpane did not submit an offer under this
RFP and therefore is not an interested party for purposes of filing a
protest on this procurement. Tumpane reports that it attended the
preproposal conference and site visit and was in the process of
preparing its proposal when it filed this protest prior to the closing
date for the receipt of proposals. An interested party is defined in
the Competition in Contracting Act of 1984 (CICA), 31 U.S.C.A. Section
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. Section 21.0(a) (1985). Under CICA and our
implementing Bid Protest Regulations, Tumpane's interest as a potential
competitor if the protest is successful is sufficient for it to be
considered an interested party. See Deere & Co., B-212203, Oct. 12,
1983, 83-2 C.P.D. Paragraph 456.
The RFP requires that the contract price include all applicable
federal, state and local taxes. Tumpane is uncertain whether the
Washington State leasehold excise tax is applicable to contracts with
the federal government due to pending litigation challenging the
applicability of this tax. It further argues that, assuming the
Washington State leasehold excise tax is applicable here, the tax is
based on the fair market rental value of government furnished facilities
and equipment, but that the RFP does not provide data such as the age,
condition and estimated useful life of the government furnished items
which are necessary for determining the rental value of those items
possibly subject to the tax. Therefore, it argues that it cannot
determine the amount of the tax. Tumpane asserts that the closing date
for the receipt of proposals should have been delayed until the
Washington State Department of Revenue (Department of Revenue)
determined the applicability and the amount of the leasehold excise tax.
GSA responds that it is the protester's burden to ascertain whether
any taxes apply and to include an amount for taxes in its offer. GSA
argues that, since Tumpane was aware of the Washington State leasehold
excise tax, the solicitation listed all of the government furnished
items, and there was a site visit allowing offerors to examine the
management center, Tumpane had available all of the information
necessary to determine an amount for the leasehold excise tax.
Unless otherwise specified in the RFP, an RFP clause requiring that
the contract price include all applicable taxes constitutes notice to
all offerors that offers will be evaluated on a tax-included basis and
places the burder on the offeror to ascertain whether any taxes apply
and to include the amount of such taxes in its price. See NASCO
Products Co. -- Reconsideration, B-192116, Feb. 16, 1979, 79-1 C.P.D.
Paragraph 116. This burden is placed on offerors because they generally
are more familiar with the application of state and local taxes than is
the contracting officer. Nearly all of the states and numerous
localities impose taxes, and the applicability of state and local taxes
varies from state to state and from one locality to another. Trail
Equipment Co., B-206975, Apr. 20, 1982, 82-1 C.P.D. Paragraph 366.
Additionally, contracting agencies generally are not sufficiently
familiar with offerors' operations, e.g., whether or not the offeror
intends to use all of the government furnished items, to make
determinations concerning applicability of taxes to the contract, and it
would be inappropriate to impose on them the burden of examining the tax
situation of each offeror who may elect to submit an offer. See J & W
Welding and Fabrication, B-209430, Jan. 25, 1983, 83-1 C.P.D. Paragraph
92.
The purpose of soliciting offers on a tax-included basis is to limit
the government's payment obligation to the price offered -- the
contractor could not claim at a later date that the government should
reimburse the firm for any taxes that the firm ultimately has to pay
which allegedly were not contemplated when the offer was submitted. See
The Goodyear Tire & Rubber Co., B-203212, Mar. 1, 1982, 82-1 C.P.D.
Paragraph 172.
Here, Tumpane has objected to GSA's proceeding with this procurement
without having the Department of Revenue determine whether the
Washington State leasehold excise tax applies to this contract and, if
so, the amount of the tax. Tumpane suggests that GSA was required to
refer the tax question to Washington State. As indicated above, Tumpane
was required under the RFP to include the Washington State leasehold
excise tax in its contract price even though it was not certain that the
tax applied in this case and thus it was Tumpane's responsibility to
consider the tax in pricing its offer. Under these circumstances, the
agency was not required to delay the closing date and refer the
determination of the tax's applicability to Washington State.
Tumpane also argues that without the aid of the Department of
Revenue, it could not determine the amount of the Washington State
leasehold excise tax and therefore could not prepare an intelligent
offer. We disagree. As a contractor, the burden is on Tumpane to
determine the amount of the tax. The record indicates that the
solicitation listed all of the government furnished items and that
offerors had the opportunity to examine these items during the on-site
visit. Furthermore, as a contractor in this field of operations,
Tumpane should be familiar with the type of items involved here, e.g.,
overhead lubrication reels and motor oil pumps, and their value. We
think Tumpane should have had sufficient information to assess the fair
market rental value of the government furnished items and then compute
the amount of tax to include in its offer. We note that although
Tumpane may not have known the exact fair market rental values and would
have to estimate those values in order to compute the amount of tax to
include in its offer, risk is inherent in most contracts and offerors
are expected to allow for that risk in computing their offers. See
Palmetto Enterprises, B-190060, Feb. 10, 1978, 78-1 C.P.D. Paragraph
116. Thus, the determination of the amount of the Washington State
leasehold excise tax also does not provide a basis for delaying the
closing date.
We, therefore, conclude that Tumpane had the information necessary to
prepare a price proposal which took into consideration the magnitude of
the Washington State leasehold excise tax and, thus, GSA was not
required to postpone the closing date and refer this matter to the
Department of Revenue. See DEL-JEN, INC., B-219950, Sept. 18, 1985,
85-2 C.P.D. Paragraph 301.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220464
DATE: January 15, 1986
COMPENSATION - REMOVALS,SUSPENSIONS, ETC. - BACKPAY - COMPUTATION
An employee removed from civilian service overseas and consequently
required to vacate rent-free government quarters is, upon reinstatement
with backpay, entitled to receive a living quarters allowance. The
living quarters allowance is a compensable item of backpay under these
circumstances because the law and regulations governing the housing of
overseas employees provide that such employees are entitled to a living
quarters allowance when government quarters are not furnished
free-of-charge.
Mr. Robert E. Taylor
Clerk of the Board
U.S. Merit Systems Protection Board
Washington, D.C. 20419
Dear Mr. Taylor:
This is in response to your request of September 23, 1985, for an
advisory opinion on a backpay issue involved in Greco v. Department of
the Army, MSPB Docket No. DC07528310592 COMP-REM. Specifically, the
issue is whether an employee is entitled to receive a living quarters
allowance as part of a backpay award if he was not receiving the
allowance but was residing in rent-free government quarters at the time
of his removal. For the reasons which follow, we believe that a living
quarters allowance is a proper element of backpay under the
circumstances presented.
Based on your letter and the accompanying materials, it appears that
the relevant facts are as follows. Mr. Anthony A. Greco was removed
from his position as Supervisory Employee Relations Specialist with the
Department of the Army in Germany and was required to vacate
government-furnished quarters. After returning to the United States,
Mr. Greco appealed his removal to the Washington Regional Office of the
Merit Systems Protection Board (MSPB). Before the regional office
adjudicated the merits of the action, Mr. Greco entered into a
settlement agreement with the Army and withdrew his appeal. The
agreement, approved by the presiding official, provided in relevant part
that:
"The agency shall cancel the removal action * * * and restore
appellant to duty effective 15 March 1983 with all back pay,
leave, retirement and all other entitlements that appellant would
have earned or received during the time period covered by the
personnel actions at issue."
Mr. Greco filed a petition for enforcement of the settlement
agreement, contending that the Army had failed to comply with several
terms of the agreement. In particular, Mr. Greco maintained that under
the above-quoted provisions he was entitled to but had not received a
living quarters allowance and per diem payments covering the period of
his separation. The Washington Regional Office issued a compliance
decision finding that Mr. Greco was not entitled to a living quarters
allowance because he was residing in government quarters rather than
receiving an allowance on the date he was separated. The presiding
official distinguished the Court of Claims decision in Urbina v. United
States, 428 F.2d 1280 (Ct. Cl. 1970), discussed below, stating that a
living quarters allowance would have been recoverable under that
decision only if the appellant had been receiving the allowance at the
time of his separation. Also the presiding official found that Mr.
Greco was not entitled to receive per diem expenses.
Mr. Greco filed a petition for review with the MSPB. You state that,
in his petition, Mr. Greco challenges only the presiding official's
determination that he is not entitled to receive a living quarters
allowance as part of the "backpay" and "entitlements" awarded him under
the settlement agreement. Fundamentally, Mr. Greco argues that, had he
not been removed from the Army, he would have continued to enjoy the
benefit of rent-free government housing. Since he cannot be afforded
the benefit of government housing retroactively, Mr. Greco asserts that
he is entitled to a living quarters allowance under the provisions of 5
U.S.C. Section 5923 (1982) and its implementing regulations. As
discussed more fully below, the statute and regulations cited by Mr.
Greco provide that a living quarters allowance will be paid to an
employee who is not furnished government quarters while stationed in a
foreign area.
Mr. Greco argues alternatively that, if a living quarters allowance
is not payable, he is entitled to reimbursement for the housing costs he
incurred in the United States during the period of his separation. In
support of this alternative argument, Mr. Greco cites Payne v. Panama
Canal Co., 607 F.2d 155, 165 (5th Cir. 1979). In Payne, the U. S.
Court of Appeals for the Fifth Circuit held that an employee improperly
separated from employment in the Canal Zone was entitled to the
difference between the costs he incurred for private housing in the
United States and the cost of the rental housing he would have been
provided in the Canal Zone under the authority of 5 U.S.C. Section 5911.
In its response to Mr. Greco's petition for review, the Department of
the Army maintains that he is not entitled to a living quarters
allowance because he was not receiving the allowance at the time of his
separation. Furthermore, the Army likens the living quarters allowance
claimed by Mr. Greco to per diem and commuting expenses incurred as a
consequence of an unjustified or unwarranted personnel action, noting
that the Court of Claims has disallowed the latter expenses on the basis
that they do not constitute "pay, allowances, or differentials" within
the purview of the Back Pay Act of 1966, as amended, 5 U.S.C. Section
5596 (1982).
Against this background, you have asked for our opinion whether: (1)
a living quarters allowance is a proper element of the backpay awarded
to Mr. Greco; and (2) if not, whether he may recover housing expenses
he incurred during the period of his separation.
At the outset, we note that it is not disputed that Mr. Greco would
have been entitled to recover a living quarters allowance as part of his
backpay award if he had been receiving the allowance at the time of his
separation. In Urbina v. United States, cited above, 428 F.2d at 1285,
the Court of Claims held that a wrongfully dismissed civilian employee
of the Air Force who had been receiving a living quarters allowance in
Japan was entitled to receive the allowance during the entire period of
his dismissal, even though he spent part of that period in the United
States. The court in Urbina reasoned that the living quarters allowance
payable to civilian employees in foreign areas represents an "allowance"
compensable under the Back Pay Act, and that retroactive restoration of
this monetary benefit comports with the Back Pay Act's mandate that an
employee "for all purposes * * * (must be) deemed to have performed
service for the agency" during the period of wrongful separation. See
also Normal J. Raymond, 59 Comp. Gen. 261 (1980), in which we followed
Urbina with respect to a similarly-situated employee. Accordingly,
recognizing that a living quarters allowance constitutes a compensable
element of backpay under the Urbina decision, regardless of whether the
employee was actually present in the foreign area during the period of
his separation, the question for our determination is whether the Back
Pay Act authorizes the allowance for an employee who was not receiving
it but was residing in government quarters at the time he was separated.
The Back Pay Act of 1966, codified as amended in 5 U.S.C. Section
5596, provides in relevant part that:
"(b)(1) An employee of an agency who, on the basis of a timely
appeal or an administrative determination * * * is found by
appropriate authority under applicable law, rule, regulation, or
collective bargaining agreement, to have been affected by an
unjustified or unwarranted personnel action which has resulted in
the withdrawal or reduction of all or part of the pay, allowances,
or differentials of the employee --
"(A) is entitled, on correction of the personnel action, to
receive for the period for which the personnel action was in
effect --
"(i) an amount equal to all or any part of the pay, allowances,
or differentials, as applicable which the employee normally would
have earned or received during the period if the personnel action
had not occurred, * * *; and
"(B) for all purposes, is deemed to have performed service for
the agency during that period * * *." (Emphasis added.)
In commentary accompanying the Back Pay Act, Congress explained that
the authority for awarding a reinstated employee the "pay, allowances,
or differentials" he would have received but for an unjustified or
unwarranted personnel action was designed to enforce the principle that
a government employee should be made whole following the correction of
such an action. Thus, Congress expressed the intention that the phrase
"pay, allowances, or differentials" would "cover everything to which
such officer or employee normally would have been entitled if the
personnel action had not occurred," but suggested that the scope of the
remedy would be defined more fully in implementing regulations. H.R.
REP. No. 32, 89th Cong., 1st Sess. 5 (1965).
Regulations implementing the Back Pay Act, set forth in 5 C.F.R.
Section 550.803, define the "pay, allowances, and differentials" payable
on correction of an improper personnel action as "monetary and
employment benefits to which an employee is entitled by statute or
regulation by virtue of the performance of a Federal function."
Additionally, Federal Personnel Manual (FPM) Supp. No. 990-2, bk. 550,
S8-3 (Inst. 73, April 20, 1984) states that:
"As long as a monetary or employment benefit * * * is one that
the employee is entitled to by statute or regulation and is
received by virtue of the performance of a Federal function, it
constitutes 'pay, allowances, and differentials' * * *."
The provisions of 5 U.S.C. Section 5912 (1982), pertaining to
civilian employees stationed in foreign areas, state that such employees
may be furnished government-owned or rented quarters without charge.
Under 5 U.S.C. Section 5923 (1982), an employee stationed in a foreign
area who is not provided government quarters may be granted a living
quarters allowance designed to cover a substantial portion but not all
of his private housing expenses. The implementing regulations in DOD
Instruction 1400.25-M, CPM ch. 592 (November 9, 1981), provide in
relevant part that:
"SUBCHAPTER 2. QUARTERS ALLOWANCE
"2-1. General.
"b. The LQA (living quarters allowance) is payable to eligible
civilian employees when government-owned or rented quarters are
not provided without charge at the employee's permanent duty
station in a foreign area.
"2-2. Eligibility.
"a. Employees recruited in the United States * * * for duty in
a foreign area either will be furnished government quarters
without charge or will be paid a quarters allowance as prescribed
in Chapter 100, DSSR (Department of State Standardized Regulations
(Government Civilians, Foreign Areas))." (Emphasis added.)
The Standardized Regulations cited in the DOD Instruction provide in
section 132.12 that:
"The LQA grant to any employee (not newly appointed or
transferred) * * * shall commence as of the latest of the
following dates:
"a. the date the employee ceases to occupy quarters for which
he/she pays no rent; (or)
"d. the date expenses for quarters are incurred." (Emphasis
added.)
We interpret the above-quoted regulations as vesting an employee with
an entitlement to the living quarters allowance authorized by 5 U. S.C.
Section 5923 if he is assigned to duty in a foreign area and is not
provided rent-free government housing. See 44 Comp. Gen. 365 (1964), in
which we adopted the same interpretation with respect to the predecessor
to 5 U.S.C. Section 5923 and its implementing regulations. Accordingly,
applying the backpay standards discussed above, we conclude that an
employee stationed in a foreign area who is required to vacate
government quarters as the result of an unjustified or unwarranted
personnel action is entitled upon correction of the action to receive a
living quarters allowance. It is not material that the employee was not
actually receiving a living quarters allowance on the date of his
separation because, under 5 U.S.C. Section 5923 and its implementing
regulations, the employee's entitlement to a living quarters allowance
would vest as soon as he is required to vacate government quarters and
begins to incur housing expenses. See 44 Comp. Gen. 365, cited above.
Furthermore, we do not agree with the Army's suggestion that the
living quarters allowance in question must be disallowed on the basis
that it is an "incidental expense" similar to per diem and commuting
expenses. The Court of Claims and our Office have held that per diem
and mileage expenses associated with a separated employee's interim
employment are not compensable under the Back Pay Act because, although
such expenses may result from an improper personnel action, they do not
represent benefits an employee would have received had the personnel
action not occurred. See Morris v. United States, 595 F.2d 591 (Ct.
Cl. 1979); and Jack M. Haning, 63 Comp. Gen. 170 (1984). In contrast,
the effect of paying a living quarters allowance to an employee denied
government housing because of an improper personnel action is to restore
a monetary benefit he would have received but for the personnel action.
See generally Ralph C. Harbin, 61 Comp. Gen. 57 (1981). See also FPM,
ch. 550, Section 8-5a (Inst. 262, May 7, 1981), distinguishing
incidental expenses from allowances constituting a form of remuneration
for services an employee would have performed had he not been separated.
Accordingly, for the foregoing reasons, we conclude that Mr. Greco is
entitled to receive a living quarters allowance as part of the backpay
awarded him under his settlement agreement with the Army. In view of
this conclusion, we need not address Mr. Greco's alternative argument
that he is entitled to recover housing costs incurred in the United
States based on Payne v. Panama Canal Co., discussed previously.
Finally, we recently received correspondence from Mr. Greco's counsel
dated November 21, 1985, a copy of which was sent to you. The letter
expresses some disagreement with the content of your request for our
advisory opinion. Specifically, Mr. Greco's counsel alleges that: (1)
your request omits some factual information pertaining to Mr. Greco's
claim for a living quarters allowance; and (2) your request incorrectly
suggests that the issue of Mr. Greco's entitlement to per diem was not
presented in his petition for review. We have evaluated the factual
information presented by Mr. Greco's counsel, but have found that it
does not affect the legal conclusions we have reached.
Furthermore, we decline to comment on the question of Mr. Greco's
entitlement to per diem, since you have not presented that question to
us.
Sincerely yours,
Harry R. Van Cleve
General Counsel
cc: Mr. Anthony A. Greco
c/o Peter B. Broida, Esq.
Passman and Broida
1717 K Street, N.W.
Suite 1102
Washington, D.C. 20006
Paul N. Bley, Esq.
Department of the Army
Office of the Staff Judge Advocate
Headquarters V Corps
APO, New York 09079
FILE: B-220463 85-2 CPD 553 DATE: November 13, 1985
MATTER OF: L&R Paint Contracting
DIGEST:
CONTRACTS - PROTESTS - MOOT, ACADEMIC ETC. QUESTIONS - CORRECTIVE
ACTION, PROPOSED, TAKEN, ETC BY AGENCY
Protest by small business firm of agency's failure to submit
the matter of protester's responsibility to the Small Business
Administration (SBA) for a Certificate of Competency (COC)
determination is dismissed as academic because the agency has
since referred the matter to the SBA whose determination to issue
or not issue the COC is final.
L&R Paint Contracting protests the rejection of its low bid by the
Forest Service, Department of Agriculture. The Forest Service found L&
R, a small business firm, to be nonresponsible and issued Purchase Order
No. 43-67T0-5-76 to another bidder with a higher price, without
referring the matter of L&R's responsibility to the Small Business
Administration (SBA) for a Certificate of Competency (COC)
determination. When L&R protested, the Forest Service ordered the
awardee to suspend performance.
We dismiss this protest because the issue it presents has become
academic.
The Forest Service agrees that it was improper to make an award to
the higher bidder without referring the matter of L&R's responsibility
to the SBA. That agency is authorized by statute, 15 U.S.C. Sec. 637(
b)(7) (1982), to certify conclusively all elements of a small business
firm's responsibility. American Contract Services, B-218039.2, June 12,
1985, 85-1 C.P.D. P 674. The Forest Service has now referred the matter
to the SBA and has given assurances that if a COC for L&R is issued, the
purchase order award issued to the awardee will be canceled and an new
purchase order will be made to L&R. If the SBA declines to issue a COC
for L&R, L&R will be ineligible for award because the SBA's
determination is final.
Ronald Berger
Deputy Associate
General Counsel
FILE: B-220459.2 86-1 CPD 540 DATE: June 10, 1986
MATTER OF: C&W Equipment Co.--Reconsideration
DIGEST:
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
TECHNICAL TRANSFUSION PROHIBITION
Prior decision is affirmed where additional facts regarding agency's
discussions with the offeror selected for award do not establish that
the agency engaged in technical leveling or technical transfusion during
those discussions.
C&W Equipment Co. requests reconsideration of our decision in C&W
Equipment Co., B-220459, Mar. 17, 1986, 86-1 CPD P 258, in which we
denied a protest that the Veterans Administration, in discussions with
the awardee, International Laundry Machinery, Inc., engaged in technical
leveling and technical transfusion in violation of the Federal
Acquisition Regulation (FAR), 48 C.F.R. Secs. 15.610 (d) (1) and (2)
(1984).
We affirm our prior decision.
On November 20, 1985, C&W protested the award of a contract to
International under request for proposals (RFP) No. M6-Q88-85, for
furnishing and installing a laundry system in a new building at the VA
Medical Center in Houston, Texas. On March 20, shortly after issuance
of our decision denying the protest, we received a letter that our
Office previously had requested in which the VA addressed matters
discussed in C&W's response to the administrative report. C&W contends
that the March 20 submission by the VA disclosed new facts regarding the
procurement that warrant reconsideration of our decision.
C&W's protest largely consisted of claims that specific questions or
comments made to International during discussions constituted technical
leveling and/or technical transfusion. In its March 20 letter, the VA
offered more detailed explanations of the challenged questions than had
been contained in the administrative report. These explanations are
consistent with our prior understanding of the purpose for the
questions, based upon our reading of the procurement record.
Briefly stated, the discussions that C&W complains about, including
relevant details supplied in the VA's March 20 letter, are as follows:
1. The VA told International that small piece folders must be in
tandem with folding tables. C&W argues that International's tables
already met the requirement in the sense that the firm proposed placing
them one behind the other. According to C&W, the VA really wanted
International to place the tables at a 90 degree angle as C&W had done.
The VA, apparently understanding the term "in tandem" to mean being used
in conjunction with or together, states that International's tables were
not in tandem, and, after this requirement was pointed out, the firm
independently decided to place its tables at a 90 degree angle.
2. The VA pointed out to International that its finished goods
conveyor fell 11 feet short of its second flatwork ironer. C&W claims
that this constituted improper coaching; the VA believes it merely
pointed out "an uncomplicated, easily correctable deficiency."
3. The agency told International: "Conveying uniforms and patient
clothing needs to be addressed. How does it work?" C&W states that
"conveying" patient clothing was not required by the RFP, and that the
idea originated with C&W. The VA responds that International's
proposals showed two conveyors drawn diagonally across each other, and
the agency only wished to know how the conveyors functioned.
4. C&W contends that according to its supplier, when C&W offered a
garment finisher that was in excess of the RFP requirements, the VA
conveyed this information to International, causing it to upgrade its
equipment, similarly. The VA denies such a contact and suggests that
International may have learned about C&W's offer from their common
supplier.
5. The VA asked International whether its "Auto Valet" size should be
"F" instead of "E." C&W states that it included descriptive literature
in its proposal and a design drawing referring to a size F Auto Valet
uniform delivery system, and that the VA's question was intended to
prompt International also to offer a size F. The VA states that
International's proposal was apparently ambiguous regarding the letter
designation of the Auto Valet equipment offered, and the agency wished
to know if the letter designations related to capacity of the equipment.
The solicitation provided that award would be made to the offeror
proposing the lowest price for a laundry system meeting the VA's
requirements. Neither International's nor C&W's initial proposals were
acceptable. Concluding that both were reasonably susceptible of being
made acceptable, the VA pointed out numerous deficiencies in the
proposals before seeking best and final offers.
In our prior decision, we found that C&W had not established that the
VA statements cited constituted improper coaching intended to bring
International's proposal up to that of C&W (i.e., technical leveling),
or that the VA disclosed information in C&W's proposal that resulted in
improvement of International's proposal (i.e., technical transfusion).
The detail provided in the VA's March 20 letter is consistent with that
view. For example, in our decision we stated that a reasonable reading
of the VA's advice about small piece folders being "in tandem" with
folding tables was that the agency wished the tables to be used in
conjunction with each other not that a particular angle was required.
The March 20 letter merely confirms our view of the agency's
understanding of the term "in tandem" and the purpose for its comment to
International. C&W has not established that the VA engaged in technical
leveling or transfusion. Rather, we believe that taken as a whole, the
record shows that the agency engaged in meaningful discussions with the
offerors by pointing out weaknesses and deficiencies as required by the
procurement regulation. FAR, 48 C.F.R. Sec. 15.610.
Additionally, we note that in each of the areas in which C&W claims
that the VA disclosed information about its proposal, the protester
states or implicitly acknowledges that International's proposal met the
RFP requirements before the alleged disclosures. As discussed above,
selection for award was based upon the lowest cost, acceptable proposal.
Thus, even if some or all of the allegedly improper disclosures
actually occurred, they would not have improved International's
prospects for selection since its proposal was otherwise acceptable and
offered the lowest cost.
We affirm our prior decision.
Harry R. Van Cleve
General Counsel
FILE: B-220459 86-1 CPD 258 DATE: March 17, 1986
MATTER OF: C&W Equipment Co.
DIGEST:
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - DISCUSSION WITH ALL
OFFERORS REQUIREMENT - "MEANINGFUL" DISCUSSIONS
1. Improper technical leveling does not occur merely because an
agency, during discussions, advises an offeror whose proposal is
susceptible to being made acceptable that it does not meet certain
specifications and requests it to address further particular
aspects of its proposed system. Pointing out deficiencies is part
of the agency's responsibility to conduct meaningful discussions.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
TECHNICAL TRANSFUSION PROHIBITION
2. Improper technical transfusion has not occurred where the
record reveals no evidence that during discussions, the agency
conveyed to an offeror, either directly or indirectly, a better
technical approach that allegedly has been proposed by a
protester.
CONTRACTS - PERFORMANCE - SUSPENSION - PENDING FINAL RESOLUTION OF
PROTEST
3. Where an agency inadvertently discloses a protester's
proposal to the only other offeror, but not until after award, the
protester is not prejudiced by the error in the present
procurement.
CONTRACTS - NEGOTIATION - DISCLOSURE OF PRICE, ETC. - INADVERTENT
4. Competition in Contracting Act of 1984 provision generally
requiring agencies to stay contract performance if the General
Accounting Office (GAO) notifies them of a protest filed with it
within 10 days of award does not apply to agency-level protests,
so there is no legal basis for GAO to object to continued
performance.
C&W Equipment Co. protests the award of a contract to International
Laundry Machinery, Inc. under request for proposals (RFP) No.
M6-Q88-85, issued June 28, 1985, by the Veterans Administration
Marketing Center, Hines, Illinois. The solicitation covers furnishing
and installation of a "complete and workable" laundry system for a new
building at the VA Medical Center in Houston, Texas.
C&W primarily protests that in discussions with International, the VA
engaged in technical leveling and technical transfusion in violation of
the Federal Acquisition Regulation (FAR), 48 C.F.R. Secs. 15.610(d) (1)
and (2) (1984). C&W alleges that the VA improperly helped International
to revise its proposal, initially found unacceptable, so that it met the
agency's minimum needs, and improperly disclosed C&W's unique design
details to International. C&W contends that the VA's disclosure of
proprietary information (including providing International with a copy
of its proposal as part of the agency report) precludes a fair
recompetition. C&W therefore requests that we direct the VA to award a
contract to it.
We deny the protest.
The record indicates that the VA found both C&W's and International's
proposals, submitted on August 20, 1985, technically deficient. However,
the contracting officer and the technical evaluation team determined
that both proposals were susceptible to being made acceptable. The VA
first requested additional technical information; it then requested
best and final offers. C&W's final price was $3,001,154, and
International's was $2,899,988. In accord with the solicitation, which
stated that award would be based on the lowest price for an overall
system meeting the VA's requirements, the agency awarded a contract to
International on September 30, 1985.
C&W protested to the contracting officer, then to our Office,
alleging that the VA's negotiation procedures were unfair. C&W contends
that International is not technically capable of designing a workable
laundry system for VA's Houston facility and that the VA actually
directed International to make major changes in the size and
configuration of its equipment, in several instances using C&W's design
and technical information. According to C&W, its own higher-priced
proposal merely required verification and minor changes.
Technical leveling is defined as helping an offeror to bring its
proposal up to the level of the other proposals through successive
rounds of discussions, for example by pointing out weaknesses resulting
from the offeror's lack of diligence, competence, or inventiveness in
preparing a proposal. See FAR, 48 C.F.R. Sec. 15.601 (d) (1); 51 Comp.
Gen. 621 (1972); E-Systems, Inc., B-191346, Mar. 20, 1979, 79-1 C.P.D.
P 192. Technical transfusion is defined as disclosure by the government
of technical information pertaining to a proposal that results in
improvement of a competing proposal. FAR, 48 C.F.R. Sec. 15.601 (d) (2).
In order for discussions to be meaningful, however, agencies must point
out weaknesses, excesses, or def iciencies in proposals unless doing so
would result in one of these prohibited practices. Joule Engineering
Corp.--Reconsideration, 64 Comp. Gen. 540 (1985), 85-1 C.P. D. P 589.
We do not believe that C&W has shown that the VA engaged in either
technical leveling or technical transfusion here.
C&W bases its protest primarily on a VA document entitled "Report of
Contact," dated August 21, 1985, which contains a list of 20 questions
and comments that the VA submitted to International. For example, the VA
pointed out that International's proposal offered only 7,200 pounds of
flatwork storage instead of 10,000 pounds; one sewing machine instead
of two; and a 40-foot sorting belt instead of the 42-foot belt
specified.
We find that the pointing out of such deficiencies was part of the
VA's responsibility to conduct meaningful discussions with an offeror
that was in the competitive range because its proposal had been
determined to be reasonably susceptible of being made acceptable. We
note that the VA pointed out similar deficiencies in C&W's proposal.
For example, the VA's "Report of Contact" shows that the agency advised
C&W that it had not included either a central vacuum system or water
system tanks on its equipment list, although both were specif ied. In
addition, the VA asked C&W whether its proposed system included two
required 20-horsepower air compressors and requested that the firm show
their location on its drawings.
In our opinion, the questions submitted to International did not
constitute improper coaching with the intent of bringing International's
proposal up to C&W's level. See System Development Corp. et al.,
B-204672, Mar. 9, 1982, 82-1 C.P.D. P 218 at 27. We therefore deny C&W's
protest with regard to technical leveling.
With regard to the technical transfusion issue, C&W complains, for
example, that the VA transfused its design for patient clothing conveyor
rails to International. The record does not support this contention. The
RFP did not call for a specific design for this equipment, and the
"Report of Contact" indicates that the VA merely advised International
that "Conveying uniforms and patient clothing needs to be addressed."
C&W also alleges that the VA improperly disclosed proprietary data
concerning its proposed placement of laundry folding tables at a
90-degree angle to small piece folders. According to the protester, the
VA directed International to redesign its system using the same
arrangement. The "Report of Contact," however, indicates only that the
VA advised International that "Small piece folders (should be) in tandem
with folding tables." A reasonable reading of this advice is that the VA
wished the tables to be used in conjunction with the folding equipment,
but did not necessarily require a particular angle of placement. In any
event, there appear to be only a limited number of possible
arrangements, and we do not believe that the VA's advice to
International in this regard rises to the level of technical leveling.
Although C&W presents,ther examples of alleged technical leveling, we
find them without support. We therefore deny C&W's protest on this
basis.
C&W also protests the VA's handling of proprietary information and
requests that our Office direct the VA to establish proper procedures
for handling such material. C&W advised the agency in a cover letter
attached to its original proposal that "many aspects of our bid are
proprietary. . . and no portion or concept may be disclosed or utilized
either directly or indirectly to elements outside of the government." As
noted above, C&W alleges that despite this restriction on disclosure,
evaluators improperly revealed portions of its proposal during
discussions. In addition, C&W complains that the agency improperly sent
its complete proposal to International as an attachment when
disseminating copies of its report to our Office to interested parties.
A protester must prove by clear and concerning evidence that
proprietary rights have been violated. Andrulis Research Corp.,
B-190571, Apr. 26, 1978, 78-1 C.P.D. P 321. To meet this burden, the
protester must demonstrate that (1) the material was marked proprietary
or confidential or was disclosed in confidence; and (2) the data
involved significant time and expense in preparation and contained
material or concepts that could not be independently obtained from
publicly available literature or common knowledge. John Baker Janitorial
Services, Inc., B-201287, Apr. 1, 1981, 81-1 C.P.D. P 249.
In this case, although C&W attempted to establish the proprietary
nature of its proposal in a cover letter individual pages of the
proposal were not marked as proprietary, and we note that a substantial
number were copies of standard manufacturers' literature and clearly
cannot be considered proprietary. In this regard, it is up to offerors
to mark clearly those portions of a proposal that they wish to restrict,
rather than expect agency officials to make this decision for them. As
also noted above, the VA denies that evaluators disclosed C& W's
restricted materials during negotiations, and C&W has merely speculated
that disclosure occurred at this time. In these circumstances, C&W has
not satisfied its burden of proving that its proprietary rights were
violated prior to award.
It appears, however, that the VA, in disseminating copies of its
report to our Office to interested parties, as required by our Bid
Protest Regulations, 4 C.F.R. Sec. 21.3(c) (1985), inadvertently sent
International a copy of C&W's proposal. In view of our resolution of C&
W's protest, we cannot conclude that C&W was prejudiced in this
procurement by the erroneous transmittal of its proposal. (In fact, it
appears that C&W may have received a copy of International's proposal,
as well as of evaluation sheets that the VA asked us to review in
camera, with its own copy of the VA report.) To the extent that C&W
alleges that it will be prejudiced in future procurements, we are aware
of no appropriate remedy. See Youth Development Associates, B-216801,
Feb. 1, 1985, 85-1 C.P.D. P 126.
Finally, C&W protests that the VA improperly permitted International
to continue contract performance despite the fact that the firm
protested to the agency within 10 days of award. The Competition in
Contracting Act of 1984, 31 U.S.C.A. Sec. 3553(d) (1) (West Supp.
1985), generally requires agencies to stay performance if our Office
notifies them within 10 days of award of a protest filed here. The
provision does not apply to agency-level protests, however, and we
therefore have no legal basis for objecting to continued performance.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220451 86-1 CPD 265 DATE: March 18, 1986
MATTER OF: Fry Communications, Inc.
DIGEST:
BIDS - INVITATION FOR BIDS - SPECIFICATIONS - MINIMUM NEEDS
REQUIREMENT - ADMINISTRATION DETERMINATION - REASONABLENESS
Requirement that "Compano only" typeset be used to print
certain casebound books is not unduly restrictive where agency's
minimum needs require typeset consistency with previous volumes
published and agency's determination that only one typeset will
meet this requirement is not unreasonable.
Fry Communications, Inc. protests the specifications used in an
invitation for bids (IFB) issued by the United States Government
Printing Office (GPO) for the printing of casebound books and paperbound
books for the State Department, Program B428-S. Fry argues that the IFB
restriction limiting the acceptable typeset to "Compano only" is unduly
restrictive of competition because it precludes Fry from offering an
equivalent typeset.
We deny the protest.
The solicitation for this requirement was initially issued on
February 21, 1985, and at that time the IFB required the contractor to
furnish"Palatino with italic" and "Palatino semibold" typesets.
Although alternate typesets would not be considered, the IFB indicated
that manufacturers' generic equivalents would be accepted.
Fry's bid price was $230,017.28 and at bid opening, Fry was the
apparent low bidder. During the preaward survey, it was discovered that
Fry intended to utilize a generic equivalent and State Department
officials, assisting in the survey, determined that the generic typeset
proposed by Fry was incompatible with the typeset used in previous
books. The State Department requested that GPO cancel the IFB because it
was "unsuitable to the Department's needs," and by letter dated June 17,
GPO notified Fry that the solicitation was canceled.
A new solicitation was issued on September 30 with a bid opening date
of November 18. By letter dated June 1 0, the State Department had
advised GPO that the only acceptable typesets are Palatino and
Baskerville and GPO's new solicitation reflected these requirements and
also indicated that no generic equivalents would be accepted.
Subsequently, GPO received an inquiry from Sogitec, Inc., concerning
the acceptability of the Compano typeset. Sogitec further advised GPO
that if the State Department required the same typeset as used in
previous volumes, it should be specifying a Compano typeset rather than
Palatino. After verifying within GPO that previous volumes had been
printed in Compano and after conferrinq with State Department officials,
GPO issued amendment No. 0001 on October 16, deleting Palatino, and
substituting Compano.
GPO received four bids on the scheduled opening date and Sogitec,
with a bid of $221,365.24, was the apparent low bidder. Fry, because it
did not have access to a proprietary Compano printer, submitted a joint
venture bid in the amount of $300,326.44.
Initially, we note that Sogitec argues that Fry is not an interested
party under our Bid Protest Regulations, 4 C.F.R. Sec. 21.0 (1985). The
solicitation stated as follows: "Subcontracting: The predominant
production function is photocomposition." Based on this statement,
Sogitec contends that bidders are required to be primarily engaged in
photocomposition in order to submit a bid. Sogitec argues that Fry does
not meet this requirement and since Fry's joint venture partner has not
joined in the protest, Fry has no standing because Fry itself could not
have submitted a bid.
Our Office will only consider protests brought by parties having a
legitimate interest in the procurement. In making this determination, we
consider a variety of factors, includinq the nature of the issues raised
and the benefit or relief sought by the protester. Communique, Inc.,
B-219391, Sept. 5, 1985, 85-2 C.P.D. P 271. In our view, the
solicitation language cited by Sogitec does not establish as a
precondition to submitting a bid that the bidder must be predominantly
engaged in photocomposition. Cf. Urban Masonry Corp., B-213196, Jan. 3,
1984, 84-1 C.P.D. P 48 (requirement that firm be "regularly engaged for
a minimum of 5 years in the erection of architectural precase concrete
units" constituted a definitive responsibility criterion). If Fry is
successful in its protest, Fry would be a potential competitor on the
resolicitation in its own right, and therefore, Fry has the requisite
direct economic interest to be an interested party. Swan Industries--
Request for Reconsideration, B-218484.2, May 17, 1985, 85-1 C.P.D. P
569.
Fry contends that there is no basis to restrict the typeset to
Compano only since equivalent typesets, like Palatino, are available and
are virtually identical to Compano. In this regard, Fry has submitted
samples of Compano and Palatino and argues that there is no distinction
between the two which would lead to any inconsistency in the typesets of
the volumes. Fry complains that the Compano typeset requires access to a
proprietary typesetter and that only a limited number of bidders have
such access. Fry argues that equivalents, such as Palatino, are more
easily produced, are more readily available, and will equally satisfy
the agency's needs.
GPO recognizes the confusion regarding the required typeset, but
argues that the State Department has a bona fide need for a typeset
which will match its previous volumes. GPO indicates that this typeset
will be used to print additional volumes of the State jepartment's
Foreign Relations and American Foreign Policy, and that the same
type-set is required to maintain typeset consistency throughout the
series. Although a typeset may be designated an equivalent and share the
same general characteristics, GPO argues that each typeface is unique
and that the State Department's minimum needs require that the same
typeset be used. GPO contends that utilizing different typesets would
detract from the aesthetics of the set and would be inconsistent with
the State Department's high publishing standards for these publications.
In addition, GPO contends that many firms have access to the
proprietary Compano typesetter and that effective competition was
obtained since four firms submitted bids. Also, GPO notes that Sogitec's
low bid on the allegedly restrictive specification was lower than Fry's
bid on the solicitation which permitted generic typesets.
Generally, when a protest challenges a specification as unduly
restrictive of competition, the burden is on the procuring agency to
establish prima facie support for its position that the restriction
imposed is necessary to meet its minimum needs. R.R. Mongeau Engineers,
Inc., B-218356, et al., July 9, 1985, 85-2 C.P.D. P 29. In our review of
the issues, we examine the adequacy of the agency's position not simply
with regard to the reasonableness of the rationale asserted, but also
the analysis given in support of these reasons in order to assure that
the agency's explanation will withstand logical scrutiny. ITT Carrier
Terminal Systems, B-218653, Aug. 8, 1985, 85-2 C.P.D. P 148.
Based on the record, we are unable to conclude that GPO's
determination to require the use of the same typeset as used in previous
editions is unreasonable. We have recognized that an agency's need for
uniformity of appearance can properly lead to a specification which
assures consistency with the agency's previous acquisition and, in our
view, GPO may properly reguire that the publication of different volumes
in a series be printed with a typeset that ensures such consistency. See
B-173372, Aug. 19, 1971. This is especially the case where, as here, the
agency has set high publishing standards for the publications and the
aesthetics and appearance of the set is an important consideration.
Furthermore, although Fry asserts that eguivalent typesets are virtually
identical, a comparison of the Compano and Palatino samples submitted by
Fry to prove its point shows that, while the general characteristics are
similar, discernible differences between the two are readily apparent.
In addition, we point out that GPO received four bids on the
allegedly more restrictive IFB, and Sogitec's bid price was lower than
that submitted by Fry on the initial solicitation. Thus, the record
clearly shows that a reasonable price was obtained. Accordingly, we find
that GPO has established a reasonable basis for the Compano only
requirement and we cannot agree with Fry that this provision unduly
restricts competition. Saxon Corp, B-214977, Aug. 21, 1984, 84-2 C.P.D.
P 205.
We deny the protest.
Harry R. Van Cleve
General Counsel
FILE: B-220450.2 86-1 CPD 94
DATE: January 28, 1986
MATTER OF: Affiliated Van Lines, Inc. -- Reconsideration
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
RECONSIDERATION REQUESTS - ERROR OF FACT OR LAW - NOT ESTABLISHED
Prior decision, holding that contracting officers are not required to
question the validity of a required license or permit that is submitted
by a bidder before award and that is valid on its face in the absence of
some appropriate indication that the license may not be valid, is
affirmed where the protester fails to present facts or legal arguments
which were not previously considered.
Affiliated Van Lines, Inc. requests reconsideration of our decision
in Affiliated Van Lines, Inc., B-220450, Dec. 13, 1985, 85-2 CPD
Paragraph . . . , dismissing its protest that the Army improperly
awarded a contract for moving and storage services to Victory Van and
Storage, Inc. under invitation for bids (IFB) No. DABT39-85-B-0183.
Affiliated alleged that Victory does not hold a valid operating
certificate from the Interstate Commerce Commission (ICC) to provide the
services, as required by the solicitation.
We affirm the prior decision.
Affiliated alleged in its original protest that Victory does not hold
a current valid operating certificate because: 1) the certificate was
originally issued to a separate and distinct corporation, Family Moving
and Storage Company, Inc., that has been suspended in the State of
Oklahoma and that has no operating authority within that state; and 2)
Family has never properly transferred its ICC operating authority to
Victory and has no legal authority to effect any such transfer because
of its suspension. Thus, in our prior decision, we characterized the
thrust of Affiliated's protest as a contention that the contracting
officer should not have accepted Victory's ICC certification because the
authority originally issued to Family Moving and Storage could not
properly have been transferred to anyone.
We dismissed the protest because we found that the ICC certificate
submitted to the contracting officer by Victory was valid on its face,
and we stated that contracting officers are not required to go beyond
such a certification in the absence of some appropriate indication that
the certification is not valid. We further stated that Affiliated had
failed to state a valid basis for protest because the protester did not
suggest that the contracting officer, prior to award, had any valid
basis to question the validity of Victory's certification since the
public documents in the possession of the contracting officer indicated
that a change of name from Family Moving and Storage to Victory had been
granted to Victory by the ICC.
Affiliated's reconsideration request reiterates the argument in its
original protest that the public documents indicating only a change of
name were sufficient to place the contracting officer on notice of the
alleged invalidity of the operating certificate. Affiliated argues that
the name change procedure cannot effectuate a transfer of ICC operating
authority, and that the contracting officer should have known this.
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. Section 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 CPD Paragraph 707. Repeating its
argument that the Army had appropriate indication that Victory's
certification was not valid does not meet this standard. Id.
While Affiliated believes that in the absence of specific indication
that the certificate of operating authority originally issued to Family
had been transferred to Victory the contracting officer should have
questioned the certificate's validity, we think the contracting officer
was reasonable in relying on the apparently valid certificate
accompanied by the change of name order issued by the ICC. Affiliated's
mere disagreement with our prior decision provides no basis for
reversing the decision. Mayden & Mayden -- Reconsideration, B-218422.2,
May 13, 1985, 85-1 CPD Paragraph 539.
The prior decision is affirmed.
Harry R. Van Cleve
General Counsel
FILE: B-220450 85-2 CPD 660
DATE: December 13, 1985
MATTER OF: Affiliated Van Lines, Inc.
BIDDERS - QUALIFICATIONS - LICENSE REQUIREMENT - ADMINISTRATIVE
DETERMINATION
Contracting officers are not required to question the validity of a
required license or permit that is submitted by a bidder before award
and that is valid on its face in the absence of some appropriate
indication that the license may not be valid.
Affiliated Van Lines, Inc. protests the award of a contract to
Victory Van and Storage, Inc. for moving and storage services under
invitation for bids (IFB) No. DABT39-85-B-0183, issued by the Department
of the Army, Fort Sill, Oklahoma. Affiliated contends that award to
Victory was improper because Victory does not hold a valid operating
permit from the Interstate Commerce Commission (ICC) to provide the
services, as required by the solicitation.
We dismiss the protest.
The solicitation specifically required each bidder to have a valid
ICC certificate of operating authority to engage in transportation
services as a common carrier by motor vehicle. Victory represented in
its bid that it possessed a valid certificate of operating authority
from the ICC (certificate No. MC-15143). Moreover, Victory submitted
this certificate to the contracting officer. The certificate, on its
face, was valid and current in all respects. The contracting officer
therefore determined Victory to be responsible and awarded the contract
to that firm.
Affiliated nevertheless questions the validity of Victory's operating
certificate. Specifically, Affiliated states that Victory does not hold
a current valid permit because: 1) the permit was originally issued to
a separate and distinct corporation, Family Moving and Storage Company,
Inc., that has been suspended in the State of Oklahoma and that has no
operating authority within that state; and 2) Family has never properly
transferred its ICC operating authority to Victory and has no legal
authority to effect any such transfer because of its suspension.
The protester has also submitted certain public documents to our
Office that were previously reviewed by the contracting officer. These
documents show that: 1) the Corporation Commission of the State of
Oklahoma, on September 10, 1982, approved a change of name application
from Family and changed its records to reflect the name of Victory on
the State of Oklahoma motor carrier operating certificate previously
issued to Family on January 15, 1969; and 2) the ICC issued a similar
order, dated April 24, 1985, to reflect a name change from Family to
Victory on the certificate of public convenience and necessity
previously issued to Family on May 10, 1982.
The thrust of Affiliated's protest is that the contracting officer
should not have accepted Victory's ICC certification because, the
protester asserts, the authority originally issued to Family Moving and
Storage could not properly have been transferred to anyone. As noted
above, however, the ICC certificate submitted to the contracting officer
was valid on its face, and contracting officers are not required to go
beyond such a certification in the absence of some appropriate
indication that the certification is not valid. See generally New Haven
Ambulance Service, Inc., 57 Comp. Gen. 361 (1978), 78-1 CPD Paragraph
225. The protester does not suggest that the contracting officer, prior
to award, had any valid basis to question the validity of Victory's
certification.
Accordingly, we believe that Affiliated has failed to state a valid
basis for protest; therefore, we are dismissing its protest without
requesting a report from the agency. See 4 C.F.R. Section 21.3(f)
(1985).
Ronald Berger
Deputy Assiciate General Counsel
FILE: 220449 86-1 CPD 288 DATE: March 24, 1986
MATTER OF: Pease & Sons, Inc.
DIGEST:
CONTRACTS - NEGOTIATION - AWARDS - PROPRIETY - UPHELD
1. There is no basis to question agency's selection of
contractor for the design and construction of a commissary, where
the awardee's proposal offered the best cost to quality point
ratio and the initial protest filed by the fourth-ranked offeror
does not state how evaluation was inconsistent with criteria set
forth in solicitation.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DEBRIEFING CONFERENCES - ISSUES PROVIDING
PROTEST BASIS
2. Specific challenges to agency's point scoring of
protester's and awardee's proposals, first raised orally at bid
protest conference 6 weeks after protester had been debriefed by
agency and first submitted in writing in post-conference comments,
are untimely. Allegations should have been filed within 10
working days of the debriefing.
CONTRACTS - PROTESTS - ALLEGATIONS - UNSUBSTANTIATED
3. Allegation that agency violated Competition in Contracting
Act of 1984 by not conducting discussions with "all" offerors is
without merit where record shows that agency did conduct
discussions with both offerors in the competitive range, from
which the protester was excluded.
Pease & Sons, Inc. (Pease) protests the award to Hoffman Construction
Company of Washington (Hoffman) of a firm-fixed-price contract under
request for proposals (RFP) No. DACA67-85-R-0036 issued by the Army
Corps of Engineers, Seattle District (Corps). Pease contends that it
should have received the award because it offered a lower cost proposal
than the awardee. Further, Pease contends that the Corps made award
without discussions in violation of the Competition in Contracting Act
of 1984 (CICA), 41 U.S.C.A. Sec. 253b(d)(1)(B) (West Supp. 1985).
We deny the protest in part and dismiss it in part.
The Corps issued this RFP using the one-step turnkey method for the
design and construction of a military commissary at Fort Lewis,
Washington. Offerors were required to submit separate cost and
technical proposals and the RFP specified that award would be made to
that responsible offeror whose proposal was determined to be the best in
terms of cost per quality point ratio and in the best interests of the
government. The RFP cautioned that award would not necessarily be made
to the offeror with the lowest cost proposal.
Evaluation of technical proposals was to be based on the following
evaluation criteria listed in descending order of importance:
1. Building engineering and
installed equipment quality 50%
2. Building design 20%
3. Site engineering 10%
4. Site design 10%
5. Energy conscious design
and engineering 10%
The solicitation stated that after quality points were
assigned to technical proposals, the price rating would be determined by
the following formula:.
$ Price = $ Per Quality Point Quality Point Rating
The Corps received six proposals by the August 22,
1985, deadline for receipt of initial technical proposals. Following
evaluation of all six proposals, negotiations were then conducted with
the two offerors who were determined to be in the competitive range
based on the technical evaluation and cost. These two offerors were
those who offered the most advantageous price per quality point.
Hoffman's initial proposal received the highest technical ranking of 600
points and was at a price of $9,739,000, which resulted in a price per
quality point of 816,232. The other firm included in the competitive
range received a score of 529 points for its technical proposal and at a
price of $8,992,000, it earned a price per quality point of $16,998.
Excluded from the competitive range were those proposals ranked 3
through 6 in the technical evaluation, with scores ranging from 451 to
372 points.
Among the proposals excluded from the competitive range was that of
Pease which, with a technical score of 451, ranked third out of six in
the technical evaluation. Pease's price of $8,156,870 was second low.
Therefore, in terms of orice per quality point, the protester's proposal
was the fourth highest at 818,086. After negotiations, the Corps
determined that Hoffman's proposal was in the best interests of the
government considering both technical quality and price and made award
to Hof fman on October 30, 1985, in the amount of $9,960,000. In
comparison with the protester's proposal, the Corps paid approximately
22 percent more for a facility whose quality it judged almost 40 percent
better.
By letter dated October 31, 1985, the protester was notified of the
award and, at its request, a debriefing conference was held on November
13, 1985. According to the Corps, it explained that the purpose of the
2-hour meeting:
"... was to answer any questions the firm had, to relay the
perceptions of the technical evaluation team reqarding their proposal,
to provide the firm with an opportunity to review the winning proposal,
and to give guidance to assist the firm in making a better response next
time since the Corps intends to do more turnkey projects in the future."
Pease was given "a matrix comparing the maximum points that could be
achieved, the winner's points and their points broken out by category,"
"a list of strong and weak points developed by the evaluation team" and
"an opportunity to review the winning proposal." The debriefing ended
with a question-and-answer session. 1/ Pease's initial letter of
protest was dated the following day and received by us 1 day later.
In its initial correspondence, Pease advanced two general grounds for
protest: (1) that the Corps improperly accepted an offer at a higher
price than Pease offered; and (2) that in contravention of CICA, the
Corps made award without discussions with "all" offerors.
We think the protester's reasoning with respect to the first ground
for protest may be summarized as follows: the relative importance of
cost and technical factors was not specified in the RFP, as a result of
which offerors did not know how the price per quality point ratio was to
be used in the award decision and could not tell whether the Corps
intended to achieve a minimum standard at the lowest cost or whether
cost was secondary to quality. "More importantly," the protester
asserts, where, as here, the RFP indicates that both technical and cost
factors are to be evaluated, and there is no contrary indication, both
factors are approximately equal in weight. Thus properly evaluated,
Pease's cost advantage would have overcome any technical superiority of
Hoffman's offer. In fact, since both firms offered a "similar
product,"2/ "the record cannot contain any justification" for paying
$1.8 million more for the Hoffman design. Pease concludes that
Hoffman's contract should be terminated for the convenience of the
government and award made to Pease.
As for this basis for protest, the Corps argues that Pease's
assertion that price should have been the determinative factor is
misplaced, since the RFP specifically provided for the consideration of
technical quality through the cost per quality point evaluation scheme.
Pease's objections to the solicitation's proposal evaluation provisions,
the agency maintains, are untimely because they were not filed prior to
receipt of proposals. And, since Hoffman's proposal was the most highly
rated under the cost per quality point evaluation scheme set forth in
the RFP, award properly was made to that firm.
Discussion
The protester's assertions that the solicitation's proposal
evaluation scheme was unclear and that one could not tell from the RFP
whether the Corps "intended to achieve a minimum standard at the lowest
cost or whether cost was secondary to quality" are untimely. These
concerns should have been raised prior to receipt of initial proposals,
when any deficiency which may have existed could have been corrected
without harm to the competitive process, not after the competition has
been completed and the results known. See 4 C.F.R. Sec. 21.2(a)(1)
(1985).
In any event, we are not persuaded that the terms under which
proposals would be evaluated were as unclear as the protester suggests.
As the Corps points out, "cost per quality point" is an established
method for evaluating major design-and-construct projects such as this
and the evaluation methodology was set forth in detail in the RFP. We
do not believe one reasonably could conclude that the Corps only was
seeking a "minimum standard at the lowest cost" in view of a number of
solicitation provisions to the contrary, including the advice, under the
heading "Design Freedom," that "Innovative, creative or cost-saving
proposals which meet or exceed (design and construction) requirements
are encouraged and will receive additional quality points accordingly."
Under the evaluation scheme contained in the RFP, Hoffman's price of
$16,232 per unit of quality ("quality point") represented the best value
to the government. The protester's price of $ 18, 086 per quality point
ranked fourth out of six. Absent evidence of mathematical error in the
price computation, in order to establish its entitlement to award, the
protester must demonstrate that the technical evaluation was
inconsistent with the criteria stated in the RFP, i.e., that Hof fman's
technical score should have been lower or Pease's greater, or both, such
that the price per quality point ratio would change in Pease's favor.
In its initial letter of protest, Pease spoke in generalities and
addressed none of the specifics of the technical evaluation of
proposals. It "(questioned) whether the Corps really needs a 'gold
plated' " commissary, asserted (as we indicated above) that its proposed
facility was similar" to the awardee's, and--in what amounts to a
reversal of the usual burden of proof--suggested that it was the Corps'
obligation to establish the reasonableness of its selection. Pease did
not, however, discuss any particular evaluation criterion nor attempt to
show why the scores assigned to it or to Hoffman may have been in error.
For example, under the criterion "Energy conscious design and
engineering," Pease fared poorly when compared to Hoffman, a fact
disclosed during, and the subject of some discussion at, the debriefing
which preceded the filing of Pease's protest; yet there is no mention
of this matter in the protest. We therefore have no basis on which to
conclude that the Corps' selection of Hoffman was unreasonable based on
Pease's initial protest.
At the conference on this protest held on December 30, 1985, Pease
for the first time challenged with specificity the agency's evaluation
of its proposal and Hoffman's, and its position in this regard was not
definitively reduced to writing until it filed its post-conference
comments simultaneously with the Corps' on January 10, 1986. Although
Pease knew of these specific grounds for protest as of the time of the
debriefing, it failed to raise these issues within 10 working days f rom
that date as required by our Bid Protest Regulations, 4 C.F.R. Sec.
21.2(a) (1). Consequently, we will not now consider these bases of
protest.
Pease's second basis for protest is that the Corps violated 41 U.S.
C.A. Sec. 253b(d) (1)(B) (West Supp. 1985) by making award to Hoffman
without conducting discussions with "all" offerors. This argument is
without merit. The Corps did conduct discussions with the two offerors
which it determined were within the competitive range, which is all that
it was required to do. See Federal Acquisition Regulation, Sec.
15.610(b) (FAC 84-5, Apr. 1, 1985).
The protest is denied in part and dismissed in part.
FOOTNOTES
1/ Although Pease may not have been satisfied by the information it
received at the debriefing, we fail to understand its assertions that
the Corps had offered "no explanation" for the difference in evaluation
results and that its reasons for making an award to Hoffman were
"unknown."
2/ This idea is variously stated in Pease's protest: both offerors
"were offering to provide the exact end product--a fully usable grocery
store in strict compliance with the "RFP;" Hoffman's design was "only
slightly or no better than" Pease's design; the two designs were
"equivalent;" "architecturally, structurally and mechanically" the two
are "virtually identical." At the same time, however, Pease
characterizes Hoffman's design as "gold p1ated."
FILE: B-220444 86-1 CPD 163
DATE: February 14, 1986
MATTER OF: SysteMetrics, Inc.
CONTRACTS - NEGOTIATION - CONFLICT OF INTEREST PROHIBITIONS -
ORGANIZATIONAL - AGENCY RESPONSIBILITIES
1. An agency reasonably determined that a potential organizational
conflict of interest existed where the protester's status as the current
contractor for a related effort would tend to impair its objectivity in
performing the subsequent contract and the steps taken by the protester
to eliminate the conflict were deemed to be inadequate.
CONTRACTS - NEGOTIATION - CONFLICT OF INTEREST PROHIBITIONS -
DISCLOSURE OF CONFLICT REQUIREMENT IN RFP - PROPRIETY
2. Where a contracting agency has a reasonable basis to exclude a
firm from the competition because of an organizational conflict of
interest, this determination properly may be made during the actual
evaluation and source selection process when the conflict becomes clear
to the agency, even though the solicitation itself did not expressly
provide that the firm or other offerors of the same status would be
ineligible to receive the award.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - PREPARATION - COSTS -
DENIED
3. Where a solicitation provision clearly puts offerors on notice
not to rely on the oral representations of agency personnel, an offeror
must suffer the consequences of its reliance upon such advice.
Therefore, although a firm may have detrimentally relied upon oral
advice into submitting a proposal for a contract it was ultimately
precluded from receiving because of a potential organizational conflict
of interest, the firm is not entitled to recover its proposal
preparation costs since it was reasonably excluded from the competition.
SysteMetrics, Inc. (SMI) protests a determination by the Department
of Health and Human Services (HHS) to exclude its proposal submitted
under request for proposals (RFP) No. 81-85-HHS-OS from further award
consideration because of a potential organizational conflict of
interest. The procurement was initiated by HHS' Office of the Inspector
General for the performance of a "National Diagnosis Related Group
Validation Study." SMI, which is currently performing a contract for
HHS' Health Care Financing Administration, complains that the agency
improperly determined that a potential organizational conflict existed
with regard to its simultaneous performance of that contract. We deny
the protest.
Background
Under Medicare's Prospective Payment System, payments for inpatient
operating costs are based upon a fixed, predetermined amount for each
case according to the particular Diagnosis Related Group (DRG) into
which the case has been classified by the health care provider. In
order to monitor the performance of hospitals receiving Medicare
reimbursement payments, 54 Peer Review Organizations (PROs) have been
established nationwide to review hospital admissions and discharges to
see if DRG classifications were correct and supported by the entire
medical record in each specific case. Under SMI's current contract with
HHS' Health Care Financing Administration (hereinafter the "SuperPRO"
contract), the firm acts in an oversight capacity by reviewing the
performance of each of the 54 PROs. A principal objective of the
"SuperPRO" contract is to validate the determinations made by PROs with
respect to hospital admission reviews and DRG validations.
The purpose of the "National Diagnosis Related Group Validation
Study" at issue in this protest is to assure, through the review of
medical records from a select sample of hospitals receiving Medicare
reimbursements, that the DRG assignments made by the hospitals are
substantiated by the records and that the admissions and services
provided were appropriate. Among the principal objectives of the effort
(hereinafter the DRG Validation Study) are: (1) to determine the amount
of DRG errors in the hospital record sample and project nationwide error
rates; (2) to determine the impact of errors on a case mix index; and
(3) to compare the findings of PROs in conducting DRG validations with
the contractor's own findings.
The RFP excluded PROs from competing for the DRG Validation Study
contract by specifically providing that:
"(PROs) and full or part-time employees of these organizations
will not be considered as potential offerors because of conflict
of interest inherent in the review of the DRG Validation which
they may have previously conducted."
SMI, as the contractor for the Health Care Financing Administration's
"SuperPRO" contract, was concerned that its status in that regard would
cause HHS to assume that this would present a potential organizational
conflict of interest. SMI therefore contacted the contracting office to
ascertain whether its "SuperPRO" role would result in its exclusion from
the competition, but was orally advised by HHS personnel that this would
present no problem.
SMI then submitted a proposal for the DRG Validation Study at a
cost-plus-fixed-fee amount of $528,073. The firm's proposal was
initially evaluated, but HHS concluded that SMI's role in the "SuperPRO"
contract created a potential conflict of interest principally because
the firm could be in the position of reviewing the same medical records
for the DRG Validation Study that it had reviewed under the "SuperPRO"
contract. Accordingly, SMI's proposal was not considered further, and
the award was made to another firm.
SMI contends that HHS improperly determined that a potential conflict
of interest existed because of its status as the "SuperPRO" contractor.
SMI asserts that the scope of work for the DRG Validation Study does not
include the review of any work it performs under the "SuperPRO"
contract, since, under the DRG Validation Study, it would not be
evaluating its own previous evaluation of a particular PRO.
According to SMI, a PRO is concerned with determining from medical
records whether hospitals are making valid DRG assignments and,
therefore, whether these hospitals are being correctly reimbursed by
Medicare. In performing the "SuperPRO" contract, SMI asserts that it is
not evaluating particular DRG assignments for the purpose of ensuring
that Medicare is being correctly charged, as it would be under the DRG
Validation Study contract, but rather is determining whether each PRO
has adequately performed its task of validating the DRG's assigned by
particular hospitals. Since, as SMI urges, the two efforts have
dissimilar objectives, the firm believes that there is no potential
conflict of interest even if it should have occasion to review the same
medical record, and accordingly, that it is entitled to the award of the
DRG Validation Study contract as the low offeror. /1/
Alternatively, SMI argues that even if a potential conflict of
interest should exist, the firm took positive steps in its proposal to
eliminate the conflict. SMI notes that its proposal included a
memorandum to all personnel proposed to work on the DRG Validation Study
contract should the firm receive the award. This memorandum, primarily
devoted to the protection of confidential patient data, provided, in
pertinent part:
"In your review, should you receive a medical record for which
any of the following situations would apply, you are required to
identify such in advance and exclude yourself from any further
involvement in the review of any such medical record:
" Any role in coding the record for DRG reimbursement or any
role in any prior review, adjudication or legal interest in the
case. . . ."
Consequently, SMI argues that this proposal memorandum should have
addressed HHS' concerns as to the potential for an organizational
conflict of interest since the affected personnel would be required to
sign a document agreeing to abide by its terms and would be precluded
from evaluating any medical record under the DRG Validation Study which
they had evaluated under the "SuperPRO" contract. Moreover, SMI asserts
that, in any event, personnel involved in the "SuperPRO" contract were
not proposed to work under the DRG Validation Study contract.
SMI also contends that HHS acted improperly by deciding well into the
procurement process that its status as the "SuperPRO" contractor
presented a potential conflict of interest, since, as expressly provided
in the RFP, the agency had originally determined that only PROs should
be excluded from the competition. SMI urges that it relied upon
erroneous advice from the agency into submitting a proposal, and,
therefore, the firm seeks as an alternative remedy the recovery of its
proposal preparation costs.
Analysis
The Federal Acquisition Regulation (FAR) recognizes that an
organizational conflict of interest exists when the nature of the work
to be performed under a proposed government contract may, without some
restriction on future activities, result in an unfair competitive
advantage to the contractor, or impair the contractor's objectivity in
performing the contract work. FAR, 48 C.F.R. Section 9.501 (1984).
Applicable here, the FAR also provides that contracts involving
consulting services shall not generally be awarded to a contractor that
would evaluate its own activities without proper safeguards to ensure
objectivity and protect the government's interest. FAR, Section
9.505-3(b).
HHS contends that SMI's current performance of the "SuperPRO"
contract will impair the firm's objectivity in performing the proposed
DRG Validation Study because the two efforts overlap to a certain extent
in terms of their objectives. As HHS explains, the "SuperPRO" contract
calls for the review of patient records from a sample of some 40,000
cases reviewed by the PROs nationwide, whereas the DRG Validation Study,
in part, seeks the review of 2400 randomly selected cases that had
previously undergone PRO review. Because of the size of the "SuperPRO"
sample, HHS was concerned that the same cases could be included in both
efforts, so that SMI potentially could be reviewing a case under the DRG
Validation Study that it had, or was currently reviewing, under the
"SuperPRO" contract, hence affecting the firm's objectivity. HHS states
that it has already identified two cases in the DRG Validation Study
Sample which SMI has reviewed under the "SuperPRO" effort.
In one case, SMI disagreed with the particular PRO's determination
that the hospital had made an incorrect DRG assignment on the patient's
medical record. In the other case, SMI rejected the hospital's DRG
assignment and the PRO's concurrence in that assignment, and concluded
that another DRG coding was appropriate. HHS contends that these
examples illustrate that SMI will be unable to provide objective
findings to the Office of the Inspector General when the firm has
already provided its findings on these cases to the Health Care
Financing Administration. HHS states that a biased finding in even one
case, given the presumption that SMI would tend to reach the same result
in a subsequent review, will cause large-scale statistical distortion
when projecting national error rates, one of the principal objectives of
the DRG Validation Study. Accordingly, HHS contends that SMI was
properly excluded from any further award consideration because of this
potential conflict of interest.
This Office has consistently held that the responsibility for
determining whether a firm has a conflict of interest if a firm is
awarded a particular contract and to what extent a firm should be
excluded from the competition rests with the procuring agency, and we
will not overturn such a determination except when it is shown to be
unreasonable. Acumenics Research and Technology, Inc., B-211575, July
14, 1983, 83-2 CPD Paragraph 94. Since HHS has already identified
actual patient cases to be included in the DRG Validation Study sample
which have already been reviewed by SMI under the "SuperPRO" contract,
we see nothing unreasonable in the agency's determination that a
potential conflict of interest would be inherent in making an award to
SMI. The very fact that SMI recognized in its proposal that HHS would
be concerned that its "SuperPRO" role created a potential conflict
discredits its present argument that the two efforts are unrelated.
Furthermore, contrary to SMI's assertion, we do not believe that HHS
acted improperly by deciding well into the procurement process that the
firm's "SuperPRO" status required its exclusion from further award
consideration, even though the RFP had expressly provided that only
PRO's would be excluded. Although we agree with SMI that a contracting
agency has the responsibility to identify and evaluate potential
organizational conflicts of interest as early in the procurement process
as possible, FAR, Section 9.504(a)(1), we do not believe that there was
a failure of that duty here. In our view, the record fairly suggests
that the potential conflict of interest only became clear to HHS upon
its initial evaluation of SMI's proposal. In any event, we have held
that a contracting agency may properly disqualify a firm because of an
organizational conflict of interest even though no prior notice was
given the firm. See LW Planning Group, B-215539, Nov. 14, 1984, 84-2
CPD Paragraph 531; Acumenics Research and Technology, Inc., B-211575,
supra. We note that our conclusion in those cases specifically related
to a situation where there was no notice given in a prior contract that
the firm would be excluded from the follow-on contract, but we think our
view is equally applicable where, as here, the agency later has a proper
basis to exclude a firm for conflict of interest reasons even though the
solicitation itself did not expressly provide that the firm, or other
offerors of the same status, would be ineligible to receive the award.
With regard to SMI's assertion that it took positive steps in its
proposal to eliminate the conflict, we must assume that HHS regarded
these measures as inadequate. Although the proposal memorandum, in
fact, recognized that a potential conflict could exist, SMI acknowledges
that the memorandum was broadly drawn, with the primary emphasis on
protecting the confidentiality of patient data, and that there was no
mention of the "SuperPRO" effort. Therefore, despite language in the
memorandum that proposed personnel were to exclude themselves from the
review of any medical record where they had "any role in any prior
review," it is apparent HHS concluded that this was not an adequate
safeguard to ensure the firm's objectivity in performing the DRG
Validation Study and to protect the government's interest. FAR, Section
9.505-3(b), supra. Since SMI's proposal received a full initial
technical evaluation, the fact that the evaluation narratives repeatedly
state that SMI failed to describe in its proposal approaches to avoid
the potential conflict reasonably indicates that the memorandum was
fairly considered and found to be insufficient.
To the extent SMI complains that contracting personnel advised the
firm that its status as the "SuperPRO" contractor would not disqualify
it from the competition, it is well settled that where a solicitation
provision clearly puts offerors on notice not to rely on the oral
representations of agency personnel, an offeror must suffer the
consequences of its reliance upon such advice. Jensen Corp., 60 Comp.
Gen. 543 (1981), 81-1 CPD Paragraph 524. Here, the RFP incorporated the
standard clause set forth at FAR, Section 52.215-14 (FAC 84-5, Apr. 1,
1985), which provides that any oral explanations or instructions given
before the contract award will not be binding. Thus, despite the
allegation that statements from agency personnel may have led SMI into
submitting a proposal for a contract it was ultimately precluded from
receiving, that advice neither binds the government to consider SMI's
proposal now nor requires the procurement to be recompeted. See
Tri-State Laundry Services, Inc. d/b/a Holzberg's Launderers and
Cleaners, B-218042, Feb. 1, 1985, 85-1 CPD Paragraph 127. We think it
clear that SMI's attempt to have its employees disqualify themselves if
necessary shows that SMI knew at the time it submitted its proposal that
a potential conflict of interest existed because of its activity in the
"SuperPRO" contract notwithstanding the alleged oral assurances to the
contrary. We therefore find SMI's exclusion to be a reasonable exercise
of discretion under the circumstances.
Concomitantly, there is no legal basis to allow SMI's recovery of its
costs of preparing the proposal. Our Bid Protest Regulations, 4 C.
F.R. Section 21.6(d) and (e) (1985), provide that such costs are only
recoverable where the agency has unreasonably excluded the protester
from the procurement. Since HHS reasonably determined that SMI's
"SuperPRO" status created a potential organizational conflict of
interest so as to require the firm's exclusion from further award
consideration, the firm is not entitled to recover its proposal
preparation costs even though it may have incurred those costs as the
result of reliance upon oral advice from agency personnel. See Ernaco,
Inc., B-218106, May 23, 1985, 85-1 CPD Paragraph 592.
The protest is denied.
Harry R. Van Cleve
General Counsel
(1) SMI's proposed cost was some 13 percent lower than the awardee's
proposed cost, but, in fact, the firm was not the low offeror.
FILE: B-220442.2 85-2 CPD 619
DATE: December 2, 1985
MATTER OF: Farrell Lines, Inc. -- Reconsideration
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - "GOOD CAUSE" EXCEPTION APPLICABILITY
1. Where basis for protest arose on receipt of materials requested
under the Freedom of Information Act, protester's assertion that it
received so much information that it needed more than 10 working days to
review the material before protesting does not warrant consideration of
the untimely protest under the timeliness exception for good cause,
which is limited to circumstances where some compelling reason beyond a
protester's control prevented a timely filing.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SIGNIFICANT ISSUE EXCEPTION - NOT FOR
APPLILCATION
2. GAO will not consider an untimely protest under the timeliness
exception for significant issues where the matter raised is not of
widespread interest or importance to the procurement community.
Farrell Lines, Inc., requests that we reconsider our November 14,
1985, dismissal of its untimely protest against the procurement
procedures used by the Military Sealift Command (MSC) in connection with
solicitation No. N00033-85-R-1008 for the charter of barge system
vessels. Farrell asks that we consider the merits of its protest under
section 21.2(c) of our Bid Protest Regulations, 4 C.F.R. part 21 (1985),
which states that an untimely protest may be considered for good cause
shown or where it raises issues significant to the procurement
community.
We affirm our dismissal.
Farrell knew the basis for its protest by October 4, when it received
the last in a series of documents requested from MSC under the Freedom
of Information Act (FOIA), but did not file the protest until November
13, by letter of that same date. We dismissed the matter pursuant to
section 21.2(a)(2) of our Bid Protest Regulations, which requires that a
protest like Farrell's be filed within 10 working days after the basis
for it is known.
Farrell contends that the exception in section 21.2(c) for good cause
should apply essentially because it took MSC a long time to respond
fully to Farrell's request for information on the procurement and
because the volume of material Farrell received from MSC after its FOIA
request was so great that the firm needed more than 10 working days to
examine it.
The good cause exception to our timeliness requirements is limited to
circumstances where some compelling reason beyond a protester's control
prevented the timely filing of a protest. Mounts Engineering --
Reconsideration, B-218102.2, Apr. 16, 1985, 85-1 C.P.D. Paragraph 435.
MSC's alleged delay in providing information to Farrell is relevant only
in terms of when Farrell knew its basis for protest; here, the record
is clear that the very latest Farrell knew its protest basis was October
4. We consistently have held that a protest based on materials received
pursuant to an FOIA request will be considered timely only if filed
within 10 days of receipt of the information on which the protest is
based (assuming the protester diligently pursued the information's
release). See, e.g., Carrier Corp. B-214331, Aug. 20, 1984, 84-2
C.P.D. Paragraph 197. The fact that the FOIA request resulted in the
agency's furnishing the requester a large number of documents over a
period of time does not warrant invoking the exception.
Farrell also suggests that its protest should be considered under
section 21.2(c) because it raises a significant issue.
An issue is significant within the meaning of section 21.2(c) of our
Regulations only where it involves a matter of widespread interest or
importance to the procurement community that has not been considered on
the merits in a previous decision. Harry Kahn Associates, Inc.,
B-216306.2, June 28, 1985, 85-1 C.P.D. Paragraph 739. We construe the
exception strictly and use it sparingly to prevent our timeliness rules
from being rendered meaningless. Id. We have no reason to believe that
the procurement community in general would be interested in the issue
Farrell's protest raises, which basically involves the evaluation of
offers and the resultant award under this paraticular solicitation. See
Taurio Corp., B-219008.2, July 23, 1985, 85-2 C.P.D. Paragraph 74.
Our dismissal of Farrell's protest is affirmed.
Harry R. Van Cleve
General Counsel
FILE: B-220437.3 86-1 CPD 318 DATE: April 3, 1986
MATTER OF: Triple P Services, Inc.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES - FILING
PROTEST WITH AGENCY
1. Protest will not be dismissed for failure to furnish the
contracting officer a copy of the protest 1-day after filing as
required by Bid Protest Regulations, where the 1-day delay in
doing so did not delay protest proceedings.
BIDS - INVITATION FOR BIDS - SPECIFICATIONS - SITE VISITS
2. Where the solicitation for custodial services provided
information on the buildings to be cleaned and specifically
advised bidders that they were expected to visit the site in order
to satisfy themselves regarding all conditions that might affect
the cost of contract performance, protest that the specifications
should have provided the specific numbers of items to be cleaned
is without merit because the contracting agency is not required to
draft specifications in order to eliminate the need for site
visits.
Triple P Services, Inc. (Triple P) protests the failure of the
Department of the Navy (Navy) to provide detailed information regarding
the scope of required custodial services under invitation for bids (IFB)
No. N62467-85B-6717, issued by the Naval Air Station, Pensacola,
Florida.
The protest is denied.
Preliminarily, the Navy argues that the protest should be dismissed
because Triple P failed to provide a copy of the protest to the
contracting officer within 1 working day after the protest was filed
with us, as required by our Bid Protest Regulations at 4 C.F.R. Sec.
21.1 (d) (1985). A protest may be dismissed for failure to comply with
this requirement. 4 C.F.R. Sec. 21.1(f).
While the protest was filed in our Office on January 10, 1986, the
Navy states that it did not receive a copy of the protest until January
14, 1986, 2 working days later. The agency report was due in our Office
by February 19, 1986, and was received on that date. Since the delay in
the agency's receipt of its copy was only 1 day and did not result in a
delay of the protest proceedings, Triple P's failure to furnish a copy
of the protest to the procuring activity within 1 working day after
filing in our Office does not require dismissal of the protest.
Container Products Corp., B-218556, June 26, 1985, 64 Comp. Gen. 85-1
CPD P 727.
The required custodial services included basic cleaning and servicing
restrooms. The IFB's specifications included detailed layout diagrams
of the 109 buildings to be serviced, with restrooms designated. The
specifications also included charts which identified each building by
number and indicated for each building the square footage by types of
flooring, the number of rooms, and the level of occupancy and traffic
density by congestion codes (high, medium and low). Those buildings
with restrooms that had to be cleaned twice daily were clearly
identified.
The IFB stated that bidders were urged and expected to inspect the
site where services are to be performed, and to satisfy themselves
regarding all the conditions that might affect the cost of contract
performance. The IFB also advised bidders that, in the Navy's view, it
was impractical to determine the exact nature of the work and site
conditions under which the work was to be performed without an
inspection.
The Navy states that Triple P visited three of the 109 buildings
covered by the IFB, but failed to request an inspection of the rest of
the buildings. Instead, Triple P requested information that allegedly
should have been in the IFB--that is, the population to be served, the
square footage of chalk boards to be cleaned, the number of drinking
fountains to be cleaned, and the number of sinks, commodes and urinals
in restrooms which are required to be cleaned either daily or twice
daily. The protester also inquired about the total number of lighting
tubes and total length of all lighting fixtures. The Navy states that
the request was not made within the time specified in the IFB (at least
15 days prior to bid opening) and that, in any case, the information
requested was not data that was readily available.
The responsibility for drafting proper specifications to meet the
government's minimum needs is the contracting agency's. In preparing
for a procurement, the agency must develop specifications in such a
manner as is necessary to achieve full and open competition "with due
regard to the nature of the property or services to be acquired." 10 U.
S.C.A. Sec. 2305(a) (1) (West Supp. 1985). Where it is not possible to
draft exact specifications, the agency is not required to spend great
sums of money in order to eliminate the need for site visits by
prospective bidders. See Consolidated Maintenance Co., B-196184, Mar.
18, 1980, 80-1 CPD P 210.
In this case, the specifications in conjunction with the layout
diagrams and the opportunity for an on-site inspection afforded
prospective bidders an adequate basis on which to compete intelligently.
The protester has not shown that the agency had the requested
information readily available, and there is no question but that it
would have been burdensome to compile the information. See Telephonics
Corp., B-194110, Jan. 9, 1980, 80-1 CPD P 25. On the other hand, it
would seem that custodial services, by their nature, often require
computing prices based principally on visual inspections. While
computing prices based on such inspections might involve an element of
risk, we have recognized that some risk is inherent in most types of
contracts, and bidders are expected to allow for that risk in computing
their bids. Thus, the mere presence of some risk does not render a
solicitation improper. Consolidated Maintenance Co., B-196184, supra.
Furthermore, we note that 20 bidders responded to the IFB, and while
Triple P's bid was just over $9,000,000, five times greater than the
government estimate, 17 bids were less than $2,000,000, and most bids
were close to, or below, the government estimate of $1,447,100. It thus
is apparent that other bidders were ableto compete on an equal basis,
and were not prejudiced by the alleged lack of detailed information.
We therefore find no merit in Triple P's protest that the
solicitation failed to provide sufficiently detailed information. The
protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220436.2 86-1 CPD 429 DATE: May 5, 1986
MATTER OF: MacDonald Plumbing & Heating, Inc.--
Request for Reconsideration
BIDS - INVITATION FOR BIDS - AMENDMENTS - FAILURE TO ACKNOWLEDGE -
BID NONRESPONSIVE
1. Low bidder's failure to acknowledge a solicitation amendment
which, among other things, required the removal of asbestos,
renders the bid nonresponsive, even if state law governs the
method for removal of asbestos, since such law cannot obligate a
contractor to perform any particular work without its consent.
BIDS - INVITATION FOR BIDS - AMENDMENTS - FAILURE TO ACKNOWLEDGE -
WAIVER - SIGNIFICANCE OF AMENDMENT
2. Failure to acknowledge a material amendment may not be
waived as a minor informality even though impact on bid price of
the work added by the amendment is de minimus, when the amendment
also has an impact on the quality of performance.
MacDonald Plumbing and Heating, Inc., requests reconsideration of our
decision, N.B. Kenney Company, Inc., B-220436, Feb. 4, 1986, 65 Comp.
Gen. , 86-1 CPD P 124, in which we sustained Kenney's protest against
the proposed award of a contract to MacDonald under invitation for bids
(IFR) No. OARM-85-014-JC, issued by the Department of Labor. We affirm
our prior decision.
The IFB called for the replacement of the central heating plant at
the Grafton, Massachusetts, Job Corps Center. We concluded that the
agency should have rejected MacDonald's low bid as nonresponsive because
the firm failed to acknowledge an amendment which changed bid opening to
an earlier date and increased the scope of the work by requiring the
removal of asbestos insulation and the replacement of fan coil heaters
with new ones meeting certain specifications. The amendment also changed
previously-announced Davis Bacon wage rates.
In its request for reconsideration, MacDonald argues that in
Massachusetts (where the work was to be performed), removal of asbestos
is governed by state law, which requires contractors to follow federal
guidelines. MacDonald therefore argues that its failure to acknowledge
the amendment was not grounds for rejection of its bid. Further,
MacDonald states, the value of the addenda was no more than $1,000, or
less than 2/10 of 1 percent of MacDonald's bid price. Since the dif
ference between its own and the nextlow bid was $31,000, MacDonald
contends that its failure to acknowledge the amendment should be waived.
A bidder's failure to acknowledge a material amendment generally
renders the bid nonresponsive and thus unacceptable since, absent
acknowledgment, the government's acceptance of the bid would not legally
obligate the bidder to meet the government's needs as identif ied in the
amendment. See Jose Lopez & Sons Wholesale Fumigators, Inc., B-200849,
Feb. 12, 1981, 81-1 CPD P 97. Under the Federal Acquisition Regulation
(FAR), however, a contracting officer may corresct or waive a minor
informality, an immaterial defect, or a variation of a bid from the
exact requirements of the invitation, so long as the correction or
waiver is not prejudicial to other bidders. Failure to acknowledge an
amendment falls under the regulation when the amendment is only a matter
of form and has no effect on price, quantity, quality, or delivery of
the item bid upon. See FAR, 48 C.F.R. Sec. 14.405(1984).
With regard to MacDonald's first contention, in the absence of an
acknowledgment of the amendment, we do not believe that the firm would
be legally obligated to perform the additional work required by the
amendment, i.e., removal of asbestos and replacement of fan coil
heaters. Although the method for removing asbestos may be governed by
state law, which requires contractors to follow federal guidelines, such
law cannot obligate a firm to perform any particular work at any
particular time without its consent. Since the solicitation, as
originally issued, did not specifically require removal of asbestos
insulation, and since there are other possible methods for dealing with
this hazard (for example, containment), the existence of state law does
not obviate the need for MacDonald to acknowledge the amendment.
As for MacDonald's second argument, the FAR provision permitting
correction or waiver of a bidder's failure to acknowledge an amendment
goes beyond considersation of the impact on price and the relative
standing of bidders. It also includes impact on quality, quantity, and
delivery. See 52 Comp. Gen. 886 (1973); Federal Aviation Admin.,
B-193238, Feb. 27, 1979, 79-1 CPD P 136, aff'd on reconsideration, Apr.
3, 1979, 79-1 CPD P 231. Even if we assume that MacDonald correctly
characterizes the impact of the additional work on its own bid price as
de minimus, we believe it is clear that if the successful contractor
were not legally obligated to remove the additional asbestos and to
perform the other work covered by the amendment, the quality of
performance would be affected. Accordingly, MacDonald's failure to
acknowledge the amendment may not be waived as a minor informality.
Doyan Construction Co., Inc., 63 Comp. Gen. 214 (1984), 84-1 CPD P 194;
McKenzie Road Service, Inc., B-192327, Oct. 31, 1978, 78-2 CPD P 310.
Our prior decision is affirmed.
Comptroller General
of the United States
FILE: B-220434.2 85-2 CPD 593 DATE: November 22, 1985
MATTER OF: C.F. Electronics, Inc.
DIGEST:
BIDS - RESPONSIVENESS - BRAND NAME OR EQUAL PROCUREMENT
When the solicitation in a "brand name or equal" procurement
requires that the bid specify the model number of the item to be
supplied, the bidder may not be permitted to supply the model
number after bid opening since that would give the bidder the
opportunity to make a nonresponsive bid responsive.
C.F. Electronics, Inc. protests the rejection of its low bid
submitted in response to invitation for bids (IFB) No.
DAAB07-85-B-H168, a "brand name or equal" solicitation issued by the
Department of the Army for power supplies. The Army rejected the bid as
nonresponsive because C.F. Electronics had failed to provide the
manufacturer's name and the model number for the item it intended to
supply, as required by the IFB.
C.F. Electronics' protest concedes that the required model number and
documentation were not provided to the agency until more than a week
after bid opening. C.F. Electronics contends that this oversight
amounts to no more than a minor technicality providing no basis for a
finding of nonresponsiveness. We do not agree.
A bid that lacks a required model or part number under a "brand name
or equal" solicitation neither commits the bidder to provide a specif ic
product nor permits the agency to determine exactly what it is agreeing
to purchase. Such a bid is nonresponsive because it is not an
unqualified offer to provide the exact thing called for by the
solicitation, that is, the brand name product or an "equal" that meets
the required salient characteristics of the brand name product.
Moreover, the bidder may not be permitted to supply the required model
number after bid opening since this would give the bidder the option to
make a nonresponsive bid responsive, and thus to receive or reject the
award. See MEMM General, Inc., B-210939, May 31, 1983, 83-1 C.P.D. P
579.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
FILE: B-220431 86-1 CPD 250 DATE: March 13, 1986
MATTER OF: Analytics, Inc.
DIGEST:
CONTRACTS - PROTESTS - BASIS FOR PROTEST REQUIREMENT
1. Where protester, which submitted lower-priced, acceptable
offer, argues that contracting agency has not justified payment of
price premium to successful offeror even where noncost factors are
more important than cost, protest states a valid basis of protest
and will not be dismissed.
CONTRACTS - NEGOTIATION - AWARDS - TO OTHER THAN LOW OFFEROR
2. Contracting agency may award to offeror submitting higher
cost proposal where cost is of lesser importance than noncost
considerations, if the superiority in the higher cost proposal is
reasonably considered by the agency to be worth the price premium
involved. Therefore, contracting agency may reasonably decide to
pay price premium for proposal it regards as superior because
lower-priced, acceptable proposal has weaknesses in two key
technical areas.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - NEW ISSUES - UNRELATED TO ORIGINAL PROTEST BASIS
3. Protest against alleged lack of meaningful discussions is
untimely when filed--as new ground of protest--more than 10
working days after protester should reasonably have been aware of
this basis of protest.
Analytics, Inc. (Analytics), has protested the award of a contract to
Management Consulting and Research, Inc. (Management), under Air Force
request for proposals (RFP) No. F33657-85-R-0063, issued by
Wright-Patterson Air Force Base for a specialized cost analysis study
support contract. The estimated cost of this indefinite quantity
contract is a minimum of $10,000 and a maximum of $16,000,000.
Analytics contends that the award at a substantially higher hourly
cost has not been justified by the Air Force especially given the
favorable evaluation of Analytics' proposal by the Air Force. We find no
merit to the protest.
The RFP informed offerors that the purpose of the contract was to
expand the Air Force's capability to provide high quality cost,
schedule, and financial management support" to Air Force units. The RFP
also stated that the contract would be awarded to a company which would
have the
"... technical capability to assess cost and schedule
implications of existing and projected technological advances, as
well as being able to evaluate the impact of new and innovative
acquisition strategies."
Section "M" of the RFP further provided that proposals would be
evaluated under two "primary evaluation considerations"--technical/
management and cost/price--of which cost/price was lesser in importance.
As to cost, the RFP stated that:
". . . while cost to the Government is a consideration in this
solicitation, (cost) will not be the overriding basis for contract
award. The offeror's proposed price, and other aspects of cost
which can be reasonably defined will be evaluated . . . to
determine the combination of factors most advantageous to the Air
Force. Therefore, the Air Force reserves the right to award a
contract at other than the lowest price."
The Air Force reports that it received four proposals under the RFP
and that "discussions were held with each of feror and weaknesses
pointed out." After evaluating final offers under the RFP, the Air Force
determined that Management's proposal was "technically superior to that
of Analytics, and represented the proposal most advantageous to the
government on the basis of technical merit and cost."
Analytics contends that the Air Force has not justified the award at
a higher price especially since Analytics' proposed hourly "composite
weighed average rate" used for evaluating and comparing costs was 50
percent lower than Management's rate and Analytics' proposal was
considered technically acceptable. Specifically, Analytics argues that:
(1) the Air Force has not shown that Management's proposal was
technically superior to Analytics' proposal; (2) Analytics has recently
been awarded a contract with a statement of work which is identical to
that found in the protested contract; (3) the successful awardee
allegedly intended to subcontract the work to Analytics-- thereby
showing the essential technical equality of Analytics and Management
especially given Analytics' good performance history; (4) the RFP
services "were complex, but by no means exotic or state-of-the-art";
consequently, the Air Force should have given more weight--rather than
hardly any weight at all--to cost in the selection of the contractor as
was contemplated by the listing of cost as the second of two primary
evaluation factors; and (5) the Air Force did not conduct meaningful
discussions with Analytics concerning the weaknesses in the company's
proposal as reported to the company at a debriefing held on November 15,
1985.
The Air Force first argues that we should dismiss the protest under
our Bid Protest Regulations, 4 C.F.R. Sec. 21.3(f) (1985), because
Analytics' protest fails to state a valid basis of protest. The Air
Force refers to our decision in Systems Research Laboratories, Inc.,
B-219780, Aug. 16, 1985, 85-2 C.P.D. P 187, in which we dismissed a
protest based solely on the initial allegation that the protester should
have been awarded a contract as the low, technically acceptable offeror
under a solicitation which stated that cost was the "least important"
evaluation standard.
In dismissing the protest, we pointed out that where a solicitation
for a negotiated procurement advises offerors that technical
considerations are more important than cost, the contracting agency may
conclude that it is more advantageous to the government to award the
contract to an offeror with a superior technical proposal, even though
its price is higher than that associated with other technically
acceptable proposals, if the lower prices are offset by the advantages
of the technically superior proposal. Barber-Nichols Engineering Co.,
B-216846, Mar. 25, 1985, 85-1 C.P.D. P 343. Consequently, an offeror is
not automatically entitled to award merely because it offered the lowest
price. Henderson Aerial Surveys, Inc., B-215175, Feb. 6, 1985, 85-1
C.P.D. P 145. We further pointed out that the government is not
obligated to make award to the low offeror in a negotiated procurement,
unless the solicitation specifies that cost will be the determinative
factor. In Systems Research, the solicitation did not state that award
would be made on the basis of the lowest priced, technically acceptable
proposal. Rather, offerors were clearly on notice that cost would be
only one (the least important) of the specific considerations in
determining the successful offeror.
Unlike the protester in Systems Research, Analytics does not contend
it was automatically entitled to award merely because the company had
submitted the lowest-priced, technically acceptable offer. Instead,
Analytics argues that the Air Force has not justified why it was willing
to pay a much higher price for Management's services compared with the
lower price found in Analytics' technically acceptable proposal.
Therefore, we do not agree with the Air Force that the precedent
established in the Systems Research decision should result in the
dismissal of Analytics' protest.
In considering the merits, we note that the Air Force has refused to
release many of the contract evaluation documents to Analytics;
however, we have reviewed those documents in the course of deciding this
protest. Nevertheless, our discussion of the Air Force's evaluation
findings is necessarily limited because of the restriction.
Analytics acknowledges that the Air Force formally advised the
company of the results of its evaluation of Analytics' proposal on
November 15, 1985, after the Air Force's contract award to Management.
At that time, Analytics was told of the "strengths and significant
weaknesses" of its proposal. Specifically, the Air Force found
significant weaknesses in Analytics' "Cost/Schedule Control Systems"
(this involves the contractor's ability to conduct review team planning
for cost research, training of review teams, and providing performance
analysis support to program offices to identify cost/schedule variances
and project estimates) and "Program Planning, Control, Integration, and
Analysis" (the requirement involves program schedule analysis and the
conducting of research for use in planning documentation). These areas
were considered important to the Air Force's overall needs. By contrast,
the Air Force did not list any significant weaknesses in Management's
proposal.
As noted above, an agency may conclude, consistent with the
evaluation criteria, that an award to a higher-priced superior proposal,
rather than a lower-priced, technically acceptable offer is justified if
the lower price is offset by the advantages of the technically superior
proposal. Barber-Nichols Engineering Co., B-216846, supra.
Based on our review of the record, we find reasonable the Air Force's
source selection decision which was based on a finding that Management's
proposal was superior to all other proposals and constituted the best
value to the government. For example, the Air Force considered that
Management's proposal showed an outstanding technical approach. Further,
Management's proposal was also found to: (1) demonstrate a thorough
knowledge of program control functions and regulatory/directive
guidance; and (2) contain a management approach of significant
importance since the company's corporate president would serve as
project director--thus arguably enhancing, in our view, corporate
accountability for the work to be done. On the other hand, Analytics'
proposal was found to have weaknesses in two key areas, cost/schedule
control systems and program planning and analysis.
In response to the Air Force's conclusion regarding weaknesses in its
offer, Analytics insists that the weaknesses were not significant
because its proposal was otherwise found to be acceptable. It is not
uncommon, however, that proposals included in the competitive range may
still be considered to have significant weaknesses--especially when
compared with proposals found to be superior or entitled to higher
scores. See Fairchild Weston Systems, Inc., B-218470, July 11, 1985,
85-2 C.P.D. P 39. Since the RFP expressly stated as factors for
evaluation an offeror's experience and capability in the areas of cost/
schedule control systems and program planning control, integration and
analysis, the Air Force reasonably could find that these weaknesses were
significant, and that a proposal which more satisfactorily addressed
these areas would be a better value to the government.
Further, as noted above, Analytics argues from alleged facts--its
recent contract award under an identical work statement, and the alleged
attempt of Management to subcontract with Analytics under this
contract--that its experience and capability generally meets the RFP
requirements. These allegations are irrelevant, however, to the issue of
whether the Air Force abused its discretion in determining the
superiority of Management's proposal and the acceptability of Analytics'
proposal as written and transmitted to the Air Force. Further, we see
no evidence in the record before us that the Air Force abused its
discretion in evaluating the respective corporate experience of
Analytics and Management.
Consequently, and based on our review of the record, we find that the
Air Force has not abused its discretion in determining that Analytics'
proposal has the above significant weaknesses and that Management's
technical proposal was entitled to be considered "superior."
Analytics' also argues that the Air Force should have given more
weight to cost since, in Analytics' view, the services were not
"state-of-the-art." Nevertheless, the RFP clearly informed offerors that
cost was second in importance to technical approach as well as being a
primary evaluation standard. Our prior cases, as noted above, clearly
permit a proper award to other than the low offeror on a showing of
proposal superiority--found to be present in Management' s
proposal--even if there are other competitive, lower-priced proposals
when cost, as under this RFP, is only one proposal evaluation standard
(not the most important) and the contracting agency determines the
proposal superiority is worth the price premium to be paid.
Consequently, we cannot conclude that the Air Force violated the RFP
evaluation standards by giving improper weight to noncost considerations
in the selection of Management, and we cannot find that the Air Force
unreasonably determined to pay the price premium involved.
Finally, in its December 31, 1985, comments on the Air Force's report
on the protest, Analytics has argued for the first time that the Air
Force failed to conduct meaningful discussions with it concerning the
above significant proposal weaknesses which the Air Force notified
Analytics of on November 15, 1985. It is well-established that a
protester may delay the filing of its protest until after a debriefing
when the information available earlier left uncertain whether there was
any basis for protest. Trellclean, U.S.A., Inc., B-213227.2, June 25,
1984, 84-1 C.P.D. P 661.
It is also well-established that new protest issues must
independently satisfy the timeliness requirements of our Bid Protest
Regulations. Le-Gals, Inc., B-212531. 2, Oct. 5, 1984, 84-2 C.P.D. P
386.
Since Analytics became aware of the Air Force's view that its
proposal contained significant, specific weaknesses as of November 15,
1985, the company should reasonably have been aware of any issue
concerning lack of meaningful discussions about those specific
weaknesses as of that same date. Consequently, Analytics should have
filed a separate protest concerning this new issue within 10 working
days of November 15 in order to satisfy the timeliness requirements of
our Bid Protest Regulations. Since the company first raised this issue
on December 31, more than 10 working days after November 15, the issue
is untimely filed and will not be considered.
Protest denied, in part, and dismissed, in part.
Harry R. Van Cleve
General Counsel
Matter of: Consolidated Bell, Inc.
File: B-220425.2 86-2 CPD 192
Date: August 18, 1986
CONTRACTS - PROTESTS - PREPARATION - COSTS - COMPENSABLE
Protester may recover the costs it incurred in filing and pursuing
its protest as well as its proposal preparation costs where the agency
unreasonably excluded the protester from the competition and no other
remedy is available.
Consolidated Bell, Inc., has submitted a claim for proposal
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 Consolidated Bell, Inc.,
B-220425, Mar. 11, 1986, 86-1 C.P.D. P 238. The protest concerned
request for proposals (RFP) No. KECS-85-025, issued by the General
Services Administration (GSA) for IBM or equal personal computers and
associated peripheral equipment.
In our decision, we held that GSA unreasonably found Bell's proposal
unacceptable. We also held that GSA improperly awarded the contract on
the basis of initial proposals because it was not clear that the award
was at the lowest overall cost to the government--the record showed it
probably would have cost less to contract with Bell. We sustained the
protest and recommended that GSA terminate the contract and award a
contract to Bell or enter into discussions under the RFP, and include
Bell in those discussions.
GSA has informed our Office that the contract was terminated for the
convenience of the government on April 30, 1986. The agency further
advises, however, that the contract was funded with fiscal year 1985
funds, which GSA notes cannot be used to procure the equipment in 1986,
and that because no fiscal year 1986 funds are available no award can be
made under the protested solicitation. In response to this information,
Bell has requested reimbursement for the costs it incurred in submitting
its proposal and in pursuing its protest.
Our Bid Protest Regulations, implementing the Competitiom in
Contracting Act of 1984, provide that a protester may recover the
reasonable costs of filing and pursuing a protest, including attorney's
fees, where the agency unreasonably excluded the protester from the
procurememt except where our Office recommends that the contract be
awarded to the protester and the firm receives the award. The protester
may recover proposal preparation costs where it has beem unreasonably
excluded from the competition and no other remedy enumerated in our
regulations is appropriate. 4 C.F.R. Sec. 21.6(d), (e) (1986). Here,
by failing to evaluate Bell's proposal properly and by failing to hold
discussions, GSA, in effect, unreasonably excluded Bell from the
competition. Since no other remedies are available, by separate letter
we are advising the Administrator of GSA that Bell is entitled to
recover reasonable protest and proposal preparation costs. Bell should
submit its claims for these costs directly to the agency. 4 C.F.R. Sec.
21.6(f).
Comptroller General
of the United States
FILE: B-220425 86-1 CPD 238 DATE: March 11, 1986
MATTER OF: Consolidated Bell, Inc.
DIGEST:
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION - CRITERIA
- APPLILCATION OF CRITERIA
1. Agency unreasonably found protester's proposal technically
unacceptable where the technical evaluation panel failed to
evaluate the proposal in accordance with the solicitation
provisions.
CONTRACTS - NEGOTIATION - AWARDS - INITIAL PROPOSAL BASIS - PROPRIETY
2. Agency improperly awarded a contract on the basis of initial
proposals where it is not clear the contract was awarded at the
lowest overall cost to the government.
Consolidated Bell, Inc. protests the award of a contract by the
General Services Administration (GSA) under request for proposals (RFP)
No. KFCS-85-025.
We sustain the prptest.
The RFP was issued on August 12, 1985, to procure 91 IBM personal
computers, model number 5170-99 or equivalent, and associated peripheral
equipment, to be installed at 19 locations throughout the United States.
The RFP included 12 line items, with space for entries by the offeror
for each of line items 1001-1008. For example, the first line item
appeared as follows:
"Item Description ......... Qty Unit Unit Price Total Amount
1001 IBM-PC/AT ............ 91 .. EA
Enhanced System, (IBM
#5170-99) or equal
Quoting on:
Manufacturer Name ......... Brand ......... Model
On September 12, the closing date for the receipt of initial
proposals, GSA received 10 offers. These offers were evaluated by a
technical evaluation panel, and five proposals, not including the one
submitted by Bell, were considered acceptable. GSA determined that it
received adequate competition and reasonable prices, and on September 30
awarded a contract based on the initial proposals.
The evaluation panel found Bell's proposal unacceptable because Bell
did not include model numbers for line items 1001-1008 (Bell only
repeated the brand names); did not insert a manufacturer's name or
model number for line item 1004; inserted "NB," which the panel assumed
meant "no bid," in the first space under line items 1007 and 1008; and
did not address line items 1009 (operator manuals) and 1010 (cabling).
Bell essentially contends that it obviously was offering the brand name
models for all of items 1001-1008. The firm also questions, with respect
to items 1007 and 1008, how GSA could have assumed "NB" meant "no bid"
instead of "name brand" since Bell in fact included in the schedule unit
and extended prices for those items. Bell further contends that when
submitting the offer it told the contracting officer that the prices for
items 1009 and 1010, for which the schedule did not provide a place to
insert prices, were included in the prices for the other items.
In our view, GSA should not have rejected Bell's offer. First, we
think GSA's interpretation of "NB" as "no bid" for items 1007 and 1 008
was unreasonable. GSA's interpretation ignores the fact that not only
did Bell bid the name brand for every other item, but inserted unit and
extended prices for items 1007 and 1008 in the same way it did for items
1001-1006. We think it was clear from the proposal that Bell was
offering the name brand for items 1007 and 1008 at the prices specified.
Concerning Bell's failure to include model numbers for line items
1001-1 006, and a manufacturer's name or model number for line items
1004, 1007 and 1008, paragraph C.9(b) of the RFP provided: "Unless the
bidder clearly indicates in his bid that he is offering an 'equal'
product, his bid shall be considered as offering a brand name product
referenced in the solicitation." Bell in no way indicated it was
offering an equal item for any of the eight line items and Bell, by its
insertion of a price, clearly indicated its intent to submit an offer
for each one. Consequently, we find that in accordance with paragraph
C.9(b) it was incumbent upon GSA to evaluate Bell's proposal on the
basis of brand name and model numbers specified in the RFP. Bell's
failure to include model numbers or, for items 1004, 1007 and 1008,
manufacturer's names, thus was not a proper basis for GSA to reject the
firm's proposal.
GSA also asserts that Bell's proposal is unacceptable because Bell
did not address line items 1009 and 1010. Line item 1009, and paragraph
C.8 of the RFP, advised of ferors that they must supply all manuals that
normally would accompany the of fered equipment, and the associated
charge, if any. Line item 1009 also required the offeror to submit, with
its proposal, a list of all manuals that will be provided "(and price,
if any)." Paragraph C.8 further specified "any cost to the government
for these materials" should be entered in the offer. Since the line item
thus did not require a price, and the solicitation specifically
recognized that offerors might choose to supply the manuals at no cpst
to the government, Bell's failure to include a price for line item 1009
should not have been deemed fatal to the offer. Nor do we believe that
Bell's proposal should have been rejected because Bell did not submit a
list of the manuals that would be supplied, since there is no indication
in the RFP that this list was needed to evaluate proposals and, pursuant
to line item 1009 and paragraph C.8, the successful offeror would be
required to provide the manuals in any event.
Line item 1010 was for the cost of cabling for the networks, and was
listed as an optional item. Offerors were instructed to respond to this
line item in accordance with paragraph C. 1.5, which provided that for
the purpose of the cost evaluation offerors should prepare their bids
for cabling based on the installation in a 600 square foot room of a
typical network comprised of five work stations separated from each
other by 15 feet. Offerors were advised to bid the cable cost per foot
and the cost for a typical network, and to multiply the network total by
19 to obtain the total cost for all required networks.
Initially, it is unclear whether offerors were, in fact, required to
propose a cost for cable. Paragraph M.2.2, "Evaluation of Prices," did
state that "optional features, if any, will . . . be evaluated," and
paragraph C.1.5 appears to have required the offeror to propose a cost
for cabling. However, paragraph L.2.2., "Response to System
Requirements," stated that offerors were not required to furnish
"evaluated optional features," and continued:
"If possible, however, the offeror should provide the features
at a price less than the associated dollar value fiqure listed in
the Solicitation Document--because that dollar value figure
represents the assessment which shall be levied against the
proposal during evaluation, if the feature is not offered."
Also, paragraph M.1, "Evaluation of Proposals," stated that in
evaluatinq a proposal's cost to the government, an assessment will be
made for the evaluated optional features which an offeror did not
satisfactorily propose. We have reviewed the solicitation documents and
we have not found an assessment cost for line item 1010. Our reading of
these provisions leads us to conclude that offerors could reasonably
interpret these provisions as not requiring them to propose a cost for
line item 1010.
Moreover, we find that even if offerors were required to submit a
cost for line item 1010, Bell's proposal should not have been rejected
without GSA's giving Bell the opportunity to enter discussions and
submit a revised proposal.
GSA asserts that award of the contract on the basis of initial
proposals was proper because, pursuant to the Federal Acquisition
Regulation, 48 C.F.R. Sec. 52. 15-016 (1984), the solicitation advised
offerors of this possibility, and because there had been adequate
competition to demonstrate that award would result in a fair and
reasonable price; GSA cites our decision in D.K. Associates, Inc.,
B-213417, Apr. 9, 1984, 84-1 C.P.D. P 396, as supporting award in those
circumstances. That exception to the qeneral requirement for discussions
in a negotiated procurement no longer applies, however. Rather, under
the Competition in Contracting Act of 1984, 41 U.S.C.A. Sec. 303B(d)
(1) (B) (West Supp. 1985), a contracting agency may make an award on the
basis of initial proposals, where the solicitation advises offerors of
that possibility, only if the competition or prior cost experience
clearly demonstrates that acceptance of an initial proposal will result
in the lowest overall cost to the qovernment. See Boston Intertech
Group, Ltd., B-220045, Dec. 13, 1985, 85-2 C.P.D. P 657.
The report GSA has furnished our Office shows that the award was for
all equipment and optional items (cabling and maintenance) to an offeror
that proposed to supply the equipment (line items 1 001-1 0 10) for
8546, 141, maintenance at $75 per hour, and cabling at $222 per network.
Bell of fered to supply the equipment for $526,015, and maintenance at
$35 per hour. Thus, without maintenance the difference between the
awardee's cost proposal, which includes the cost of cable, and Bell's
cost proposal, which we will assume does not include the cost of cable,
is approximately $20,000. Our review also shows that other offerors
proposed to supply cable for an average of $250 per network, so that
adding the probable cost of cabling 19 networks to Bell's offer still
leaves the cost of contracting with Bell below the award price. Given
our view that GSA unreasonably found Bell's proposal otherwise
unacceptable, we believe that under CICA the agency should have either
awarded a contract to Bell or, if GSA needed to get a cabling price from
the firm, opened discussions with Bell and other offerors, and requested
best and final offers, to determine which offeror would perform at the
lowest overall cost to the government.
Bell also protests that it did not receive a complete solicitation
package, asserting that pursuant to a Freedom of Information Act request
filed after its offer was rejected it received more solicitation
documents than it had been furnished originally. GSA responds that
although a better RFP package could have been prepared, the material
furnished Bell initially was sufficient for the firm to prepare an
offer. Because of our conclusion above, it is not necessary to address
this protest issue.
The protest is sustained. By separate letter, we are recommending
that GSA either terminate the awarded contract and award one to Bell, if
otherwise appropriate, or enter into discussions under the RFP, to
include Bell. If best and final offers show that a firm other than the
awardee is entitled to the contract, GSA should terminate the awarded
contract and award a new one. If the current awardee submits the best
proposal, and the price is different than the contract price, the
contract should be modified accordingly. See Datapoint Corp., B-186979,
May 18, 1977, 77-1 C.P.D. P 348.
Acting Comptroller General
of the United States
FILE: B-220424 85-2 CPD 587 DATE: November 21, 1985
MATTER OF: R&R Roofing and Sheet Metal, Inc.
DIGEST:
BIDS - RESPONSIVENESS - FAILURE TO FURNISH SOMETHING REQUIRED -
STANDARD REPRESENTATIONS AND CERTIFICATIONS - WAIVER - AS MINOR
INFORMALITY
Failure to complete nonmaterial representations and
certifications in a bid does not render the bid nonresponsive.
R&R Roofing and Sheet Metal, Inc. (R&R), protests that the bid
submitted by H.T. Boggs Company (Boggs) to the Bureau of Prisons in
response to solicitation No. 6-28-001, for work to be done at a federal
correctional institute in Ashland, Kentucky, is nonresponsive because it
fails to include several representations and certifications. We dismiss
the protest.
R&R alleges that Boggs failed to provide the following information in
its bid:
Previous Contracts and Compliance Reports
Notice for Requirement for Affirmative Action to Ensure Equal
Employment Opportunity
Certification of Independent Price Determination
Contingent Fee Representation and Agreement
Type of Business Organization - Formal Advertising
Parent Company and Identifying Data
Small Business Concern Representation
Small Disadvantaged Business Concern Representation
Women Owned Small Business Concern Representation
Certification of Non-Segregated Facilities
A bidder's failure to complete certifications and representations
that have no bearing on whether the bid constitutes an unequivocal offer
to provide the product or service does not affect the bid's
responsiveness. See K.P.B. Industrial Products, Inc., B-210445, May 24,
1983, 83-1 C.P.D. P 561. Pursuant to the federal Acquisition
Regulation, 48 C.F.R. Sec. 14.405 (1984), such a defect in a bid,
defined as one that has little or no effect on price, quantity, quality,
or delivery, can be waived or corrected.
The cited regulation expressly states that the certifications
involving Previous Contracts and Compliance Reports and Affirmative
Action Compliance are not material. Therefore, bids lacking these
certifications remain responsive.
Further, our Office has held that FAR, 48 C.F.R Sec. 14.405, also
encompasses the Certification of Independent Price Determination, the
Contingent Fee Representation and Agreement, the Type of Business
Organization item, the Parent Company and Identifying Data item and the
Small Business and Small Disadvantaged Business Representations, so that
noncompletion of these items generally does not render a bid
nonresponsive. Dependable Janitorial Service and Supply, B-190956, Apr.
13, 1978, 78-1 C.P.D. P 283.
The Certification of Non-Segregated Facilities and the Women Owned
Smail Business Concern Representation are of the same nature as the
above-cited represesntations in that compietion of the items is not
necessary to determine whether a bid meets the requirements of the
specifications and, therefore, does not involve responsiveness of the
bid. In this respect, we further note that submission of an offer in
itseif is sufficient to signai a Certification of Non-Segregated
Facilities, according to the language of this item.
Boggs' failure to compiete the representations and certifications
cited by R&R thus does not render the bid nonresponsive. The protest is
dismissed.
Robert M. Strong
Deputy Asssistant
General Counsel
FILE: B-220423, B-220423.2 86-1 CPD 264 DATE: March 18, 1986
MATTER OF: Datron Systems, Inc.
DIGEST:
CONTRACTS - TWO-STEP PROCUREMENT - STEP ONE - OFFERS OR PROPOSALS -
DISCUSSION WITH ALL OFFERORS REQUIREMENT - "MEANINGFUL" DLISCUSSIONS
1. Protest alleging that agency failed to conduct meaningful
discussions because deficiency, for which proposal was rejected,
was not raised by agency in clarification requests or deficiency
notices is denied where clarification requests and deficiency
notices were intended only to be part of the ongoing evaluation
process to determine which proposals were acceptable.
CONTRACTS - TWO-STEP PROCUREMENT - STEP ONE - OFFERS OR PROPOSALS -
EVALUATION - TECHNICAL ACCEPTABILITY
2. Although an agency should make reasonable efforts under step
one of a two-step procurement to qualify proposals for
participation in the second round, technically unacceptable
proposals may, nonetheless, be rejected in step one.
CONTRACTS - PROTESTS - ALLEGATIONS - UNSUBSTANTIATED
3. Allegation that proposal for a telemetry antenna system
complied with a reasonable interpretation of the solicitation's
requirement for automatic tracking and that agency advised
protester that such an approach would be acceptable is denied
where the record fails to show that either the specification or
the agency mislead the protester concerning the requirements
imposed.
CONTRACTS - TWO-STEP PROCUREMENT - STEP ONE - OFFERS OR PROPOSALS -
EVALUATION - TECHNICAL ACCEPTABILITY
4. Allegation that proposal should not have been found
technically unacceptable nor reasonably susceptible of being made
acceptable is denied where, despite protester's disagreement,
agency reasonably concluded that a major redesign of protester's
proposed system would be required to correct the deficiency.
CONTRACTS - PROTESTS - ALLEGATIONS - UNSUBSTANTIATED
5. Allegation that agency should have disclosed additional
information concerning the intended use of the solicited telemetry
antenna is denied where there is no showing that specification was
insufficient to apprise protester of what was required and where
full compliance with the specification would have satisfied the
agency's requirements.
Datron Systems, Inc. (Datron) protests the rejection of its technical
proposal under step one of a two-step sealed bid acquisition conducted
by the Air Force under request for technical proposals (RFTP) No.
F08606-85-R-0007. The RFTP was issued for the design, fabrication and
installation of a telemetry antenna system and associated technical
data, training and information, with an option for three additional
units. The antenna system is to be utilized as part of the integrated
tracking system in direct support of the Trident D5 missile program.
Arguing that the Air Force failed to conduct meaningful discussions with
the firm, or to reasonably evaluate its proposal, Datron contends it was
wrongfully excluded from the procurement.
We deny the protest.
Background and Protest
The two-step process is a hybrid method of procurement combining the
benefits of sealed bids with the flexibility of negotiation. The step
one procedure is similar to a negotiated procurement in that the agency
requests technical proposals and any needed clarifications. After
evaluation, discussions may be held, and revised proposals may be
submitted. Step two is conducted in accordance with sealed bid
procedures, with the exception that the competition is limited to only
those firms that submitted acceptable proposals under step one. See, e.
g., Lockheed Califorina Co., B-218143, June 12, 1985, 85-1 C.P.D. P 676.
The RFTP was issued on August 2, 1985, and included a requirement
(paragraph 3.2.4.7) that the system include an Automatic Tracking Mode,
in which the antenna automatically tracks radiating sources under
specified conditions-- including velocities to 10 degrees per second and
accelerations to 5 degrees per second squared in winds up to 55 miles
per hour--with a tracking error no greater than.05 "RMS" (basically an
average error). The of ferors were advised to document their
understanding of the requirements and the technical soundness of their
approach, specifically including documentation of antenna tracking
capabilities. The RFTP's evaluation critria were soundness of approach
and understanding of the job, to be applied to three technical area
items: Antenna Hardware Engineering. Installation and Checkout; and
Logistic Support.
A preproposal conference, attended by representatives of Datron and
Toronto Ironworks Systems, Inc. (TIW), was held on August 12, at which
the Air Force responded to a variety of questions raised by the two
offerors. The record shows that Datron contacted the Air Force on August
20 and 21 with additional questions including a request for
clarification of the Automatic Tracking Mode requirement about which
Datron was unclear. The Air Force orally advised Datron that the
requirement would not be changed, and on August 23 sent a letter to all
offerors addressing the other questions raised by Datron. Both Datron
and TIW submitted proposals by the September 3 closing date for receipt
of proposals.
A Technical Evaluation Board (TEB) was convened to evaluate the
proposals and after an initial review, clarification requests (CRs) and
def iciency notices (DNs) were sent to Datron and TIW. Datron received 5
DNs and 18 CRs while TIW received 1 DN and 31 CRs. Both offerors
submitted additional information and the TEB completed its evaluation.
On October 17, Datron was notif ied that its proposal was not
technically acceptable nor reasonably susceptible of being made
acceptable, and that the firm would be excluded from further
consideration. The TEB found that Datron had failed to comply with
paragraph 3.2.4.7 and that a major redesign of Datron's proposal would
be required to remedy the defect. 1/
Datron protested this determination to our Office on November 5,
arguing that the Air Force's actions were improper because the Air Force
failed to discuss with Datron the deficiency on which the determination
of unacceptability was based. Datron also asserted that it complied with
a reasonable interpretation of this requirement and that, in any event,
its proposal was susceptible to being made acceptable through
discussions. Based on the information contained in the agency's report,
Datron filed an additional protest alleging that the Air Force's
evaluation relied on unstated solicitation requirements and placed undue
weight on the Automatic Tracking Mode requirement. Despite the pending
protest, the Air Force commenced sole-source negotiations with TIW and
awarded the contract to the firm on January 8, 1986, because of urgent
and compelling circumstances.
Whether Meaningful Discussions Were Required
Regarding its protest that the Air Force failed to conduct meaningful
discussions, Datron alleges that it was not until receipt of the Air
Force's October 17 letter rejecting its proposal that the firm first
received any indication that its response to the RFTP's Automatic
Tracking Mode requirement was considered unacceptable. Datron states
that it had two telephone conversations with the Air Force prior to
submitting its proposal, that it advised the Air Force of its proposed
response to paragraph 3.2.4.7 and, that if the response was technically
unacceptable, the Air Force should have advised Datron of this fact.
The Air Force did not issue the firm a deficiency notice concerning its
technical response to paragraph 3.2.4.7., and issued only one clarif
ication request for two additional diagrams which Datron had failed to
provide and which, according to Datron, illustrated the textual material
already contained in its proposal.
Datron argues that the Air Force was required to make reasonable
efforts to qualify as many technical proposals as possible and, since
there was only one other offeror in the competition, the Air Force
should have advised Datron of the problem and provided the firm an
opportunity to correct the deficiency.
The Air Force asserts that it did not conduct technical discussions
and that the information it requested from both Datron and TIW was
required by the TEB in order to complete the technical evaluation of the
proposals. The Air Force states that CRs and DNs were issued for this
purpose only, and argues that the Air Force was under no obligation to
conduct discussions with Datron in view of its subsequent determination
that Datron's proposal was not technically acceptable nor reasonably
susceptible of being made acceptable. The Air Force points out that the
RFTP advised offerors that a final determination concerning
acceptability could be made without discussions and contends that its
actions were consistent with this provision.
The essential purpose of discussions is to advise offerors whose
proposals are deemed acceptable or reasonably susceptible of being made
acceptable of deficiencies in their proposals and give them an
opportunity to revise their proposals. See Burroughs Corp., B-211511,
Dec. 27, 1983, 84-1 C.P.D. P 24. In negotiated procurements, once the
agency has determined which offers are acceptable or reasonably
susceptible to being made acceptable and stand a reasonable chance for
award, the agency must conduct discussions with those offerors, whose
proposals are in the competitive range, except when it is clear from the
existence of full and open competition or accurate prior cost experience
that the acceptance of an initial proposal without discussions would
result in the lowest overall cost to the government. See 10 U.S.C.A.
Sec. 2305(b)(4) (West Supp. 1985).
Of course, in step one of two-step sealed bids there is no
competitive range determination as in negotiated procurements since step
one does not include price offers. The agency must determine, however,
which proposals are acceptable or reasonably susceptible of being made
acceptable. While an agency may enter into discussions for that purpose,
it is not required to do so. The requirement for meaningful discussions
generally is not applicable where the agency requests information to
complete its evaluation of which proposals are acceptable or reasonably
susceptible of being made acceptable through subsequent discussions.
Anchor Conveyors, Inc. et al., B-215624 et al., Oct. 23, 1984, 84-2
C.P.D. P 451.
Here, the Air Force issued the CRs and DNs to aid the TEB in the
ongoing evaluation process, and prior to the receipt of the information
requested, no determination as to the acceptability of Datron's proposal
was made. The information requested, such as the diagrams illustrating
Datron's response to paragraph 3.2.4.7, were considered necessary by the
TEB in order to complete its technical evaluation and decide whether the
proposals were technically acceptable, reasonably susceptible of being
made acceptable or technically unacceptable. Under these circumstances,
the Air Force was not required to voice its concern regarding Datron's
proposal, either in its conversations with Datron or in the CRs or DNs
which were issued. Id.; See also Metric Systems Corp., B-218275, June
13, 1985, 85-1 C.P.D. P 682.
Once an offeror's proposal is found so def icient that it is not
reasonably susceptible of being made acceptable, there is no requirement
that the agency conduct discussions, informing the offeror of
deficiencies in its proposal and af fording it an opportunity to revise
the proposal. Federal Acquisition Regulation (FAR), 48 C.F.R. Sec.
14.503-1(e)(2) (1984); Anchor Conveyors, Inc. et al., B-215624 et al.,
supra; Burroughs Corp., B-211511, supra. Although an agency should make
reasonable ef forts under step one to qualify proposals for
participation in the second round of the competition, unacceptable
proposals nonetheless may be rejected in step one. Lockheed California.
Co., B-218143, supra. Accordingly, we believe the sole remaining issue
for our review is whether the Air Force's evaluation of Datron's
proposal was reasonable and in accordance with the specifications and
stated evaluation criteria. Reasonableness of Evaluation
Datron argues that its proposal should have been deemed at least
susceptible of being made acceptable because the Automatic Tracking Mode
requirement was subject to several plausible interpretations and Datron
complied with a reasonable interpretation of the requirement. Datron
contends that it sought clarification of the automatic tracking
requirement because the specification could be interpreted as imposing
requirements that its proposed system could not meet. Datron apparently
assumed that the conditions set forth in paragraph 3.2.4.7 defined a
worse-case situation that need not be met in all circumstances, and that
proposing a reasonably compliant system would satisfy the Air Force.
Datron argues that its interpretation was conf irmed during the August
21 telephone conversation, the fact that the Air Force's August 23
letter made no mention of the inquiry concerning the automatic tracking
provision, and the Air Force's failure to issue a DN regarding Datron's
proposed automatic tracking.
The August 21 conversation was recorded by the Air Force contract
negotiator in a contemporaneous memorandum as follows:
"DATRON QUESTION: . . . Can the spec be altered because the
requirement of tracking error of .05 degrees with an acceleration
rate of 3 degrees per second squared . . . cannot be achieved? We
(Datron) expect to achieve . . . approximately .6 to .7 degrees
tracking error. This amount of error could possibly cause loss of
automatic track.
"ESMC ANSWER: No change in the requirement in the
specification. Include in proposal Max tracking error that can be
tolerated and still maintain automatic track. Include what
acceleration rate that the proposed system would support and not
exceed the tracking error, and would allow the system to maintain
automatic track."
Datron states that it understood this exchange to mean that its best
efforts would be acceptable to the Air Force. As a result, Datron
contends that it reasonably believed it submitted a proposal which met
the Air Force's stated requirements.
The Air Force argues that the automatic tracking requirement was
clearly stated. The Air Force contends that this should have been
clearly evident from the August 21 conversation in which the Air Force
advised Datron that the specif ication would not be changed. The Air
Force contends that it never withdrew or altered the specification and
that there was no basis for Datron to assume that its proposed system
would be acceptable. With respect to the failure to include this
particular question and answer in the August 23 letter, the Air Force
states that the information was not included because Air Force personnel
believed that its disclosure might harm Datron's competitive position by
indicating Datron's proposed design.
It is undisputed that in response to Datron's repeated requests to
change the specification, Datron was advised that no change would be
made, and the plain language of paragraph 3.2.4.7 was that its
requirements had to be met. Moreover, it is clear that Datron believed
that the Automatic Tracking Mode requirement could be interpreted in a
manner that its proposed system could not meet. While the protester did
inquire to the agency about this, the protester admits that it received
what it considered insufficient clarification from the Air Force. The
protester therefore contributed to the situation in which it finds
itself, and cannot rely on its own interpretation. See Avantek, Inc., 55
Comp. Gen. 735 (1976), 76-1 C.P.D. P 75. Datron should have protested
the allegedly ambiguous specification prior to the closing date for
receipt of proposals. 4 C.F.R. Sec. 21.2(a)(1) (1985); GM Industries,
Inc., B-216297, May 23, 1985, 85-1 C.P.D. P 588.
Furthermore, while Datron relies on the Air Force's failure to
address the Automatic Tracking Mode requirement in the August 23 letter
or in a DN, these circumstances merely bolstered Datron in its own
assumptions, and did not change the requirement or the reasonableness of
Datron's interpretation. Accordingly, we do not conclude that Datron's
interpretation was reasonable, or that the firm was misled concerning
the requirements of paragraph 3.2.4.7.
Datron also contends that, even based on the Air Force's
interpretation of the requirement, its proposal was clearly susceptible
of being made acceptable. Datron points out that the only area in which
the Air Force considered its proposal unacceptable was tracking error
performance and that in all other aspects its proposal completely
complied with the RFTP's requirements. Datron argues that to comply
fully with the Automatic Tracking Mode requirement, it would have needed
only to revise 10 pages of its proposal and change a small handful of
components on one circuit board. Under these circumstances, Datron
contends that there was no reasonable basis for the Air Force to
conclude that its proposal was not reasonably susceptible of being made
acceptable.
Furthermore, Datron argues that the Air Force's determination of
unacceptability was based on an evaluation which was not consistent with
the stated requirements. Datron contends that the RFTP did not indicate
that the Air Force required a telemetry antenna capable of providing
metric data, which basically defines the position of a target in space,
or that the system's function included tracking launches to quickly
assess the danger of the launch vehicle returning over land (range
safety). Datron suggests that if it had known these facts, its proposal
would have fully complied with the requirements of paragraph 3.2.4.7.
Datron also complains that the Air Force placed undue weight on the
Automatic Tracking Mode requirement by equating the evaluation of this
provision to one-third of the total. Since there were no weights
specified in the RFTP, Datron states that it was reasonable to assume
that all requirements were of equal importance. Since the specification
for the automatic tracking requirement was only two pages long and
Datron complied with part of the provision, Datron contends that its
proposal should have received a sufficient number of points to be
considered reasonably susceptible of being made acceptable.
The Air Force argues that Datron's proposal was properly determined
to be technically unacceptable and not reasonably susceptible of being
made acceptable. The Air Force states that when the entire
specifications for the antenna system is considered, there are three
main structural requirements which include tracking and reliability. As
a result, the Air Force contends that one-third of the overall design
objectives that must be taken into account directly involve the
antenna's tracking capability. The Air Force argues that tracking and
tracking accuracy must be treated on a design system approach and that
Datron's proposed system falls approximately 800 percent below the
solicitation's specified performance requirements. In addition, the Air
Force contends that to allow Datron to merely change a few pages in its
proposal without a full system design analysis would present a
significant technical risk since the required redesign will place much
more stress on the system.
The Air Force also contends that Datron's proposal was evaluated in
conformance with the RFTP's requirements and that the specification
provided Datron with sufficient information to provide a conforming
proposal. In this regard, the Air Force argues that a telemetry antenna
is a generic term, often including metric capabilities, and that the use
of that term should not have been misleading since the nature of the
data required was specified in the solicitation.
Regarding the allegedly undue weight on paragraph 3.2.4.7 in the
evaluation, the Air Force states that it did not assign heavy weight to
this requirement by itself but, consistent with the RFTP's evaluation
criteria, recognized that the deficiencies in this area had a
deleterious effect on the entire Antenna Hardware Engineering area of
the technical evaluation. In summary, the Air Force argues that the
solicitation requirements were not changed, and that Datron's proposal
was fairly evaluated and properly rejected as unacceptable.
Our review of an agency's technical evaluation under an RFTP is
limited to the question of whether the evaluation is reasonable.
Rapistan, A Division of Lear Seigler, Inc., B-215837, Nov. 23, 1984,
84-2 C.P.D. P 549. In making this assessment, we will accept the
considered judgment of the procuring activity unless it is shown to be
erroneous, arbitrary or made in bad faith. Guardian Electric Mfg. Co.,
58 Comp. Gen. 119 (1978), 78-2 C.P.D. P 376; Herblane Industries, Inc.,
B-215910, Feb. 8, 1985, 85-1 C.P.D. P 165. Moreover, we have
consistently held that it is not the function of our Office to resolve
technical disputes between the parties. Lockheed California Co., supra.
The protester, who bears the burden of proof, has not shown that the
Air Force unreasonably determined Datron's proposal to be unacceptable.
The agency may reject a proposal that fails to meet essential
requirements, FAR, Sec. 14.503-1(e)(2), and the record indicates that
Datron's proposed system could lose automatic track under the conditions
specified in the RFTP. The Air Force imposed the stringent tracking
requirements to ensure that the Trident II missiles, which the system is
to track, are not lost during flight since the loss of the data to be
gathered could lead to delays in the developmental testing program.
Automatic tracking also is an essential safety feature since it alerts
the agency to deviations in the planned flightpath so that the agency
can take the necessary corrective action. The Air Force maintains that
Datron's proposed system cannot be modified to achieve tracking under
the RFTP's specified flight conditions without basically changing the
system. The Air Force states that such a change would not be
satisfactory without a total system design analysis.
Although Datron strongly disagrees with the Air Force's assessment of
the level of effort required to modify Datron's proposal, Datron has not
disputed the Air Force's determination that the required changes would
place many times more stress on Datron's proposed system or that the
tracking performance of its current design is more than 800 percent
below the performance specified in the RFTP. While Datron contends that
it could convince the Air Force that the changes would not pose a
significant technical risk, we find that a proposed design which falls
that far below the solicitation's requirements may properly be rejected
as unacceptable.
In addition, we see no merit to Datron's allegations that its
proposal was evaluated based on unstated requirements or evaluation
criteria. While Datron asserts that it should have been advised
expressly that the Air Force required an antenna with metric
capabilities and that range safety was an important consideration, we
see no reason to require that the Air Force disclose this information
where full compliance with the specif ications would have satisfied the
agency's requirements in these areas.
Furthermore, the record shows that the Air Force did not unduly weigh
paragraph 3.2.4.7, but rather determined that the deficiency in Datron's
proposed system was of such a magnitude that it impacted on over
one-third of the specifications. The RFTP indicated that technical
proposal would be evaluated for soundness of approach and understanding
of the job, and we see nothing improper in the Air Force's rejection of
a proposal where its proposed design for tracking and tracking accuracy
is seriously flawed and impacts on one-third of the overall design
objective.
Finally, we note that Datron also alleged that the Air Force failed
to evaluate the limits of permissible tracking error on the basis stated
in the RFTP, which provided for an average error rate of .05. The
protester believed that the Air Force used an absolute limit of .05
variation since the Air Force repeatedly used the .05 limit in its
report. The Air Force responded that it did use the average rate, and
presented calculations to support its position that Datron's proposal
was technically unacceptable based on an average error rate. Datron has
not disputed this analysis and we therefore conclude that the
permissible tracking error was properly evaluated.
The protest is denied.
Harry R. Van Cleve
General Counsel
1/ The TEB also found that Datron had proposed an inadequate
"confidence level" for meeting the required delivery schedule. The Air
Force no longer asserts this reason as justification for excluding
Datron's proposal.
FILE: B-220421.2 86-1 CPD 280 DATE: March 21, 1986
MATTER OF Consolidated Bell, Inc.--Reconsideration
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
RECONSIDERATION REQUESTS - ERROR OF FACT OR LAW - NOT ESTABLISHED
Prior decision denying protest is affirmed on reconsideration
where the protester cites a regulation applicable only to
construction contracts in connection with a personal computer
procurement and does not show any other error of law or fact that
would warrant reversal of the prior decision.
Consolidated Bell, Inc., requests reconsideration of our decision,
Consolidated Bell, Inc., B-220421, Feb. 6, 1986, 86-1 C.P.D. P , in
which we denied the firm's protest against the placement of order No.
40 AANE 503415 with one of the General Services Administration's (GSA)
computer stores, known as the Off ice of Technology Plus. We affirm our
prior decision.
The protested order was for the Department of Commerce's National
Oceanic and Atmospheric Administration, which had submitted a
requisition for an International Business Machines Corporation (IBM)
Personal Computer System, Model PC-AT. We concluded that the agency
acted reasonably in not considering Consolidated's alternate "NB or
Equal" price of $13,000, since the agency had specif ied a particular
make and model and the offer was for an "equal" system that Consolidated
did not identify or describe in any way. After comparing Consolidated's
quote of $14,000 for the name brand with the GSA computer store's price
of $13,881.87, Commerce placed an order with the latter.
Our Bid Protest Regulations require that a request for
reconsideration contain a detailed statement of the grounds upon which a
reversal or modif ication of the initial decision is warranted. 4 C.
F.R. Sec. 21.12(a) (1985). The request must specify errors of law or
fact or information available to our Office at the time of the original
decision that was not considered. Connector Technology Corp.--Request
for Reconsideration, B-218780.3, June 18, 1985, 85-1 C.P.D. P 697.
In its request for reconsideration, Consolidated refers to the
Federal Acquisition Regulation, 48 C.F.R. Sec. 52.236-5 (1984), Material
and Workmanship, a clause that is required to be included in
solicitations when a fixedprice construction contract is contemplated.
This clause provides that references to brand names, make, or catalog
numbers shall be regarded as establishing a standard of quality and
shall not limit competition. Since the subject procurement was not a
fixed-price construction contract, however, the clause is inapplicable.
Further, even if the individual receiving Consolidated's quote "NB or
Equal $13,000" understood that he had the option of accepting either the
brand name or the equal, as Consolidated now contends, he could not have
considered the "equal," since Consolidated did not submit any
descriptive literature or otherwise identify what it was offering or
demonstrate the equality of its proposed personal computer.
Consolidated has failed to show that our prior decision contains
legal or factual errors that would warrant its reversal or modification.
Our prior decision is affirmed.
Harry R. Van Cleve
General Counsel
FILE: B-220421 86-1 CPD 136
DATE: February 6, 1986
MATTER OF: Consolidated Bell, Inc.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTOR
1. Protest against the placement of an order for a personal computer
system with the General Services Administration's computer store, the
Office of Technology Plus, at a price allegedly higher than that quoted
by the protester, is timely where filed within 10 days of when the
protester learns of the price paid for the computer system.
CONTRACTS - REQUESTS FOR QUOTATIONS - SPECIFICATIONS - BRAND NAME
REQUIREMENT
2. Protest that an agency failed to consider a brand name or equal
quotation before ordering a computer system from the General Services
Administration's Computer Store is without merit where the agency
specified a brand name system and the offer was for an "equal" system
that was not identified or described in any way.
Consolidated Bell, Inc. protests the placement of order No. 40 AANE
503415 with one of the General Services Administration's computer
stores, known as the Office of Technology Plus. The order was for the
Department of Commerce's National Oceanic and Atmospheric Administration
(NOAA), which submitted a requisition dated June 3, 1985, for an
International Business Machines Corporation (IBM) Personal Computer
System, model PC-AT, to be installed and operable within 30 days after
the receipt of the order. The protester contends that it submitted an
acceptable brand name or equal quote of $13,000, which was lower than
the $13,881.87 price obtained by the agency.
We deny the protest.
Commerce reports that for the purpose of obtaining quotations, in
July 1985 the contracting officer issued copies of the requisition
document to five firms believed capable of providing the computer
system. Among these was Consolidated, which submitted a quote of
$14,000 with the handwritten notation "NB (Name Brand)" next to the
price. Beneath this was written "NB or Equal $13,000." Consolidated did
not provide a written explanation regarding the meaning of this quote or
submit any descriptive literature with it. Commerce states that it did
not consider the $13,000 quote to be an offer for the IBM system
required, and since the GSA computer store's price of $13,881.87 was
deemed favorable, it placed an order with the store on September 5.
On October 16, the protester contacted the NOAA program officer and
expected user of the computer system, who informed Consolidated that the
agency had already ordered the system from the GSA computer store. On
October 18, Consolidated contacted a new contracting officer (the
original one had been replaced), who informed it that an order could be
placed with the computer store without competitive bidding and without
synopsizing in the CBD. Consolidated states that it first learned of
the computer store price on October 31; it protested to our Office on
November 1. Consolidated argues that its own lower price requires an
award to it.
Commerce argues that the protest is untimely under our Bid Protest
Regulations, 4 C.F.R. Section 21.2(a)(2) (1985), which require a protest
to be filed not later than 10 days after the basis for it is known or
should have been known, which ever is earlier. Commerce refers to our
decision in Storage Technology Corp., B-194549, May 9, 1980, 80-1 CPD
Paragraph 333, in which we held that a protest filed more than 10
working days after the protester knew of the agency's intent to make
award to another firm was untimely. Commerce contends that the basis
for protest in this case arose on October 16, so that the protest should
have been filed by October 31.
It is our practice to resolve any doubt about timeliness in favor of
the protester. See Weardco Construction Corp., B-210259, Sept. 2, 1983,
83-2 CPD Paragraph 296. Although Consolidated was informed on October
16, that an order already had been placed, Consolidated apparently did
not learn of the order price until October 31. Since the protest is
based on the agency's award at a higher price, we find that the protest
is timely.
We note first that the Office of Technology Plus, as GSA's computer
stores in Washington, D.C., Philadelphia, and Atlanta are known, is a
nonmandatory source of supply for federal agencies. Before placing
orders (limited to $100,000 each) for microcomputer products with one of
the computer stores, agencies are required to determine whether their
requirements could be met at a lower overall cost through any of several
alternative methods of procurement, including GSA's multiple award ADP
schedule contract program, formal soliciation, or a small purchase. See
Federal Information Resources Management (FIRM) Bulletin 6, June 25,
1984.
Here, the agency received quotations before ordering from the
Computer store. The price offered by Consolidated for the IBM system
was $14,000, which was higher than the $13,881.87 computer store price.
Although Consolidated offered an alternate "NB or Equal" price of
$13,000, NOAA's request was for a particular system and did not provide
for an "or equal" system. Even if an "or equal" had been acceptable,
the protester did not submit any descriptive literature or otherwise
identify what it was offering or demonstrate the equality of its
proposed system. Accordingly, we think the agency acted reasonably in
not considering Consolidated's alternate offer.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220413 86-1 CPD 173
DATE: February 19, 1986
MATTER OF: ADAK Communications Systems, Inc.
BIDS - INVITATION FOR BIDS - CANCELLATION - AFTERBID OPENING - NOT
REQUIRED - DEFECTIVE SOLICITATION
Post-bid opening cancellation of solicitation based on agency
determination that a requirements contract with estimated quantities
should have been used instead of a contract specifying fixed quantities
is unreasonable where (1) solicitation included "Additions or Deletions
of Equipment" clause which would have allowed some fluctuations in
quantities; and (2) record does not show that the stated fixed
quantities so misrepresented the agency's needs that bidders would be
misled or an award would not satisfy the government's minimum needs even
with the clause.
ADAK Communications Systems, Inc. protests the Department of the Air
Force's post-bid opening cancellation of invitation for bids (IFB) No.
F41800-85-B-9722. ADAK, the low bidder, requests that the IFB be
reinstated and that it be awarded the costs of preparing its bid and
pursuing its protest with our Office. The protest is sustained, but
ADAK's request for reimbursement of its costs is denied.
The IFB involved the on-site maintenance and support of various types
of radios located at Brooks Air Force Base, Texas, for fiscal year 1986,
with two option years. Section B of the IFB, the bid schedule, asked
for monthly prices for routine maintenance on fixed quantities in each
of the three categories of radios-- fixed, mobile, and portable. Section
C of the IFB contained an inventory listing of the radios by individual
serial numbers, the totals corresponding to the quantities listed in
section B. The IFB also requested unit prices on estimated quantities
of radios for other services such as emergency repairs.
Due to a protest filed against a similar solicitation for maintenance
and support of radios at Kelly Air Force Base, Texas, the Air Force,
prior to making an award under the instant IFB, decided to see if the
government's needs were correctly stated. Upon review, the Air Force
determined that the IFB incorrectly described the government's needs by
stating fixed quantities of radios for routine maintenance when the
government's needs actually were for estimated quantities and,
therefore, a requirements contract. The Air Force also determined that
the estimated quantities of radios that probably would require routine
maintenance would be larger than the fixed quantities set forth in the
IFB, and that the fixed quantities in section B of the IFB therefore
were not reasonably accurate representations of the government's actual
needs. The Air Force canceled the IFB because of this inadequacy.
ADAK contends that bidders were not prejudiced by the IFB'S failure
to indicate estimated quantities of radios for routine maintenance, in
lieu of fixed quantities, and that the Air Force could meet its needs by
awarding a contract under the IFB. ADAK points out that some changes in
the quantities set forth in section B of the IFB would be possible under
the "Additions or Deletions of Equipment" clause in section C of the
solicitation, since the clause provided for additions or deletions to
the inventoried equipment on a continuing basis, with accompanying cost
adjustments to be based on the contractor's specified price. ADAK
concludes that since bidders were on notice that they were responsible
for fluctuating quantities of radios, there existed no basis for
canceling the IFB.
Because the cancellation of an IFB after bid opening could adversely
affect the integrity of the competitive sealed bidding system, a
procuring agency must have a compelling reason to cancel an invitation
after opening. Dyneteria, Inc., B-211525.2, Oct. 31, 1984, 84-2 C.P.D.
Paragraph 484. We have held that the use of specifications which do not
adequately describe the government's actual needs generally provides a
compelling reason to cancel a solicitation. Garrison Construction Co.,
B-211359.2, Oct. 31, 1983, 83-2 C.P.D. Paragraph 515. Cancellation is
improper, however, where no bidder was prejudiced by a solicitation
inadequacy, and the government would fulfill its actual needs through
the award of the contract. A to Z Typewriter Co., et al., B-215830.2,
et al., Feb. 14, 1985, 85-1 C.P.D. Paragraph 1985; Twehous Excavating
Co., Inc., B-208189, Jan. 17, 1983, 83-1 C.P.D. Paragraph 42. We find
that the cancellation of this IFB was improper.
While it may be that the Air Force's needs would have been expressed
best in a requirements contract, the Air Force has not established that
award based on the quantities as stated would prejudice bidders or
prevent the Air Force from satisfying its minimum needs. In this
regard, we agree with ADAK that even if the quantity of radios to be
maintained fluctuated somewhat, the terms of the Addition/Deletion
clause would require the contractor to maintain new radios at a price
based on the formula in the clause. The clause provides:
"Addition or deletion of equipment may occur during the
contract period. Cost of added or subtracted equipment will be
based on the unit price per item per month, or 1/30 of the monthly
rate for each day less than a complete month."
The Air Force argues that the Addition/Deletion clause would not
cover increased quantities since the clause was intended merely to allow
for substitution of new radios for radios that were scrapped and sent to
salvage, not to increase or decrease the quantity of radios. We
disagree. The Air Force's underlying intention notwithstanding, the
Addition/Deletion clause, by its clear terms, contemplates possible
increases or decreases in equipment, not just substitutions. We
consider significant in this regard the fact that the clause provides
for a cost adjustment for additions or deletions; if the only purpose
of the clause was to permit the substitution of radios, it appears there
would be no need for such a cost adjustment provision. The Air Force
does not indicate why, under its interpretation, cost adjustments might
be necessary.
We would be inclined to agree with the Air Force that stating a fixed
quantity instead of an estimate could necessitate cancellation where the
fixed quantity is a gross misstatement of the agency's actual needs.
See generally Ace Van & Storage Co., et al., B-213885, et al., July 27,
1984, 84-2 C.P.D. Paragraph 120. The record, however, contains no
evidence that this is the case here. Although the Air Force states that
the fixed quantities are not reasonably accurate and that the estimated
quantities would be higher, the Air Force nowhere indicates its actual
estimate, or even hints at the magnitude of the difference between the
estimate and the fixed quantity. Absent evidence that the fixed
quantities were inadequate in this regard, there is no basis for finding
that bidders would be misled and thus prejudiced, or that the Air Force
would not be able to meet its needs with an award under the IFB.
The protest is sustained. The IFB should be reinstated and the
contract for radio maintenance services at Brooks Air Force Base awarded
to ADAK, if found to be otherwise eligible for the award.
As for ADAK's request for reimbursement of its costs, the recovery of
bid preparation costs is not appropriate where our Office recommends
that the protester receive the contract award. 4 C.F.R. Section 21.6(
e) (1985). Likewise, the protester cannot recover the costs of filing
and pursuing the protest where we recommend that the contract be awarded
to the protester. Id. The recovery of costs will be allowed only where
the protester does not receive a fair opportunity to compete for award;
where the protester does obtain the award as a result of our decision,
we consider the award to be a sufficient remedy in itself. Bendix Field
Engineering Corp., B-219406, Oct. 31, 1985, 85-2 C.P.D. Paragraph 496.
Comptroller General of the United States
FILE: B-220412; B-220412.2 86-1 CPD 233 DATE: March 10, 1986
MATTER OF: Ohmeda; LSL Industries, Inc.
DIGEST:
CONTRACTS - PROTESTS - MOOT, ACADEMIC, ETC. QUESTIONS - CORRECTIVE
ACTION PROPOSED, TAKEN, ETC. BY AGENCY
1. Protest of agency's rejection of bid for failure to
acknowledge receipt of IFB amendment is dismissed as academic
where agency determines that amendment was not material and waives
protester's failure to acknowledge receipt of it.
BIDS - INVITATION FOR BIDS - AMENDMENTS - FAILURE TO ACKNOWLEDGE -
WAIVER - SIGNIFICANCE OF AMENDMENT
2. Agency properly waived bidder's failure to acknowledge
receipt of IFS amendment because amendment--which relaxed a
portion of the agency's requirements by providing alternative
specifications and clarified the original solicitation by
providing information that was incorporated by reference in the
solicitation as issued--was not material.
BIDS - INVITATION FOR BIDS - AMENDMENTS - FAILURE TO ACKNOWLEDGE -
BID NONRESPONSIVE
3. Amendment to IFB which added entire specification for one
item was material, and bidder's failure to acknowledge the
amendment rendered its bid nonresponsive as to that item.
Ohmeda, a division of the BOC Group, Inc., protests the rejection of
its bid under invitation for bids (IFB) No. DLA120-85-B2786 issued by
the Defense Logistics Agency (DLA) for Macintosh and Wisconsin
laryngoscope kits. Ohmeda's ostensibly low bid was rejected as
nonresponsive for failure to acknowledge receipt of an amendment.
Subsequent to the filing of Ohmeda's protest, the agency determined that
with respect to item 1 of the solicitation--the requirement for the
Macintosh laryngoscope kits--the amendment was not material; it
therefore waived as a minor informality Ohmeda's failure to acknowledge
the amendment as to item 1. Ohmeda's failure to acknowledge the
amendment as to item 2, however, was not waived because the amendment
was determined to be material as to that item. LSL Industries, Inc., the
second low bidder on item 1, protests the agency's action waiving
Ohmeda's failure to acknowledge the amendment as to item 1.
Ohmeda's protest is dismissed in part and denied in part; LSL's
protest is denied.
With reference to item 1, the amendment provided for an alternative
type of battery handle and surface finish, as well as an alternative
identification marking for the Macintosh laryngoscope, and added for
informational purposes the Defense Personnel Support Center (DPSC)
drawings numbers and their revision dates. 1/ With reference to item 2,
the amendment added the entire specif ication. 2/
Ohmeda's Protest
Ohmeda protests that it did not receive a copy of the amendment and,
for that reason, its bid on the two items should not be found
nonresponsive for failure to acknowledge receipt of the amendment.
Ohmeda states that because of its "previous bid activity" with the DPSC,
it has on file "all relevant specifications" for the items being
procured under the subject solicitation. Ohmeda further states that
since the amendment only cited specif ications already incorporated by
reference in the solicitation and postponed the bid opening date by 1
day, its bid price would not have been affected by the amendment.
The agency explains that Ohmeda was not sent a copy of the amendment
due to a computer program malfunction and a clerical error, which
together resulted in the omission of Ohmeda's name from the solicitation
mailing list (SML).3/ With respect to Ohmeda's contention that since it
never received the amendment, it should not be deemed nonresponsive for
not acknowledging it, DLA argues that where, due to clerical error, an
agency fails to provide a bidder with a copy of a material solicitation
amendment, the bidder's failure to acknowledge that amendment renders
its bid nonresponsive, and that the agency may make award under the IFB
absent a showing by the bidder of a deliberate agency attempt to
preclude it from bidding and provided that adequate competition and
reasonable prices were obtained. In support of this position, the agency
cites our decision, Triple A Shipyards, B-218079, Feb. 6, 1985, 85-1
C.P.D. P 149.
As previously stated, the agency waived Ohmeda's failure to
acknowledge the amendment as to item 1 on the basis that the amendment
was not material to that item because it only added alternative
specifications and information that was incorporated by reference in the
solicitation as it was originally issued. Since Ohmeda expressed its
intention to be bound by the requirements of the specification for item
1 by referencing in its bid the specification that was incorporated by
reference, the agency determined it to be the low, responsive bidder for
that item.
As to item 2, however, the agency determined that the amendment was
material because the specification for that item, which was totally
omitted in the original solicitation, was added by the amendment. Thus,
it is the agency's position that Ohmeda's bid must be considered
nonresponsive with respect to item 2 because Ohmeda did not acknowledge
receipt of the amendment or allege a deliberate effort on the agency's
part to exclude it from competing, and the two remaining responsive
offers for that item provide adequate competition.
LSL's Protest
LSL protests the agency's action in finding Ohmeda the low,
responsive bidder on item 1, arguing that the amendment is material with
respect to item 1, as well as item 2. LSL maintains, therefore, that
because Ohmeda did not acknowledge the amendment, its bid is
nonresponsive. We note, however, that, in essence, LSL simply asserts
that the amendment was material as to item 1, but offers no analysis of
the effect of the amendment or legal support for its contention.
Discussion
A bidder's failure to acknowledge receipt of a material amendment to
an IFB renders its bid unacceptable because, absent such an
acknowledgment, the bidder is not legally obligated to comply with the
terms of the amendment, and its bid is, therefore, nonresponsive. Power
Service, Inc., B-218248, Mar. 28, 1985, 85-1 C.P.D. P 374. An amendment
is material if it affects the bidder's price or the quantity, quality,
delivery, or the relative standing of the bidders. Federal Acquisition
Regulation (FAR), 48 C.F.R. Sec. 14.405 (1984). An amendment that merely
clarif ies an existing solicitation requirement is not material; thus,
a bidder's failure to acknowledge receipt of such an amendment may be
waived as a minor informality. Uffner Textile Corp., B-215991, Nov. 30,
1984, 84-2 C.P.D. P 591; see also Gibraltar Industries, Inc.,
B-218537.3, July 1, 1985, 85-2 C.P.D. P 24.
Item 1
As originally issued, the IFB set forth the specification for item 1
as follows:
"Item Description
"Larynogoscope Infant-Child-Adult, Macintosh shall be in
accordance with military specification MIL-L-36628B dated August
4, 1978, with the following exceptions:
"PAR 3.3.2 Battery Handle, in Last Sentence"
The remainder of the item description was inadvertently omitted from
the IFB. The referenced military specification states in the last
sentence of paragraph 3.3.2:
"... Style, design and dimensions of the handle shall be in
strict accordance with DPSC Drawing 24276, for Type I or Type II
design."
With respect to that paragraph, the amendment added:
"Delete 'design' and substitute 'or Type III design.'"
It is evident that this change only provided a third design
alternative to those already stated in the specification.
The amendment also provided an alternative to the requirements in the
military specification for the finish of the laryngoscope blade
assemblies. The military specification requires in the first sentence of
paragraph 3.4:
"... Finish of the laryngoscope blade assemblies shall be
mirror and satin as designated on DPSC Drawing 20473."
With reference to this specification, the amendment adds after the
word "satin" in that sentence, "or entirely satin."
The military specification also requires in paragraph 3.5:
". . . Larynogoscope blades manufactured from class 3 material
shall also be marked 'stainless.' "
Under the amendment, the blades are required to be marked "stainless"
or "S.S."
It is readily apparent that these changes only provided alternatives
to the requirements already stated in the military specification. As to
item 1, the amendment also listed the revision dates of the applicable
drawings referenced in the military specification for the laryngoscope
battery handle, blade finish, and blade lamp. Since each of the drawings
bears its own latest revision date and since the military specification
states that copies of the drawings "should be obtained from the
procuring activity or as directed by the contracting officer," the
listing of the drawing numbers and their latest revision dates in the
amendment was apparently provided for informational purposes only,
because incorporation of the military specification by reference, in any
event, would bind the bidder to compliance with its requirements. See
Uffner Textile Corp., B-215991, supra, 84-2 C.P.D. P 591 at 3.
In view of the incorporation of military specification MIL-L-36628B
in the solicitation as originally issued and the fact that the amendment
otherwise relaxed the specifications for item 1 in that it simply
permitted additional design alternatives, we find that the amendment
imposed no additional obligations on the bidder. Gibraltar Industries,
Inc., B-218537.3, supra, 85-2 C.P.D. P 24 at 3. Because Ohmeda's bid
incorporated the military specif ication, it was legally bound to comply
with its terms. We conclude, therefore, that the agency could properly
waive Ohmeda's failure to acknowledge receipt of the amendment as to
item 1. Since the agency has so determined, Ohmeda's protest of the
rejection of its bid as to item 1 is now academic and, accordingly, is
dismissed. See IBI Security Service Inc., B-217444, Aug. 19, 1985, 85-2
C.P.D. P 189. LSL's protest of the agency's action in this regard is
denied. Gibraltar Industries, Inc., B-218537.3, supra, 85-2 C.P.D. P 24
at 3.
Item 2
Ohmeda contends that the amendment was not material as to item 2 as
the agency maintains but, as in the case of item 1, was only
informational and, therefore, its failure to acknowledge receipt of the
amendment with respect to item 2 should also be waived as an
informality. As a basis for this argument, the protester maintains that
even though the original solicitation omitted the specifictions for item
2, it was aware of the specifications for that item because it has bid
before to DLA on the laryngoscope required by that item and because the
solicitation listed the item's national stock number (NSN). Thus, Ohmeda
contends that the amendment would not have af fected its bid. Ohmeda
further contends that the next low bid on item 2 was 46 percent higher
than its bid and, therefore, reasonable prices were not obtained
The sole description of item 2 in the IFB as originally issued was in
the Schedule where prices were to be entered. Item 2 was referred to
there as "NSN: 6515-00-346-0480 Laryngoscope, Child-Adult, Wisconsin."
In section "C" of the IFB, "Description/Specification," the
specifications for item 2 were totally omitted through error.
The agency states that the NSN consists of "descriptive nomenclature"
which identifies the supply class of the item, but the government's
specifications are not inherent in that number. The agency further
maintains that the government's specific needs for item 2 were
accurately and fully described only in military specif ication
MIL-L-36696A and the changes to it made by the amendment. Therefore, the
bidder's reference to the NSN would not legally bind the bidder to meet
the government's requirements.
The protester has provided no information which would tend to support
its contention that the specifications were inherent in, or were
incorporated by reference in, the NSN. Unlike item 1 where the
specification was incorporated by reference in the original
solicitation, there was nothing in the original solicitation to inform
the bidder of the government's specific requirements with respect to
item 2. In this regard, we note that Ohmeda's bid on item 2 mentions
only the NSN; it makes no reference to the military specification
applicable to that item.
A contract based on Ohmeda's bid on item 2 would not create a clear,
legal obligation to meet the government's needs as identified by the
amended IFB. See Belfort Instruments, Co., B-218561, Aug. 6, 1985, 85-2
C.P.D. P 135. Since the amendment stating the government's specific
needs changed the requirements for item 2 in a way that affects the
quality as well as the relative standing of the bidders, it was material
and Ohmeda's failure to acknowledge receipt of the amendment as to item
2 rendered its bid nonresponsive. See Doyon Construction Co., Inc.,
B-212940, Feb. 14, 1984, 84-1 C.P.D. P 194. The fact that the next low
bid was higher than Ohmeda's bid does not alter the consequences here
since Ohmeda was not bound to the same requirements as were the other
bidders who acknowledged the amendment. Moreover, the integrity of the
competitive bidding process outweighs any monetary savings that might
accrue to the government as a consequence of waiving a material
deficiency in any particular bid. See Rozier, Sidbury & Co., Inc.,
B-216741, Jan. 18, 1985, 85-1 C.P.D. P 58.
Ohmeda's protest of the rejection of its bid with respect to item 2
is denied.
Harry R. Van Cleve
General Counsel
1/ The drawings numbers are listed in military specification
MIL-L-36628B, specif ied for compliance in the solicitation as
originally issued.
2/ The specification data provided by the amendment was inadvertently
omitted from the IFB, apparently due to a computer malfunction.
3/ The agency advises that to correct this situation, the DPSC
Medical Directorate has directed all appropriate procurement personnel
to add Ohmeda to their SML and that the Procurement Operations Support
Office will monitor the SML to ensure that in the future, Ohmeda is on
the list for requested items.
FILE: B-220410 85-2 CPD 552 DATE: November 13, 1985
MATTER OF: Royal Flush Janitorial Seryices, Inc.
DIGEST:
CONTRACTS - PROTESTS - INTERESTED PARTY REQUIREMENT - SUSPENDED,
DEBARRED,ETC. CONTRACTORS
The General Accounting Office will not consider a protest filed
by a debarred contractor because it is not an interested party
since it is ineligible to receive an award even if the protest
were sustained.
Royal Flush Janitorial Services, Inc. protests the award to any
bidder other than itself under invitation for bids No. N62472-85-B-4926
issued by the Naval Facilities Engineering Command.
We dismiss the protest.
Subsequent to the filing of the protest, we have been advised that
Royal Flush appears on the March 1985 Consolidated List of Debarred,
Suspended and Ineligible Contractors, having been debarred by the
General Services Administration. The termination date of the debarment
is December 1985. A debarred contractor is not eligible to receive a
contract. Federal Acquisition Regulation, 48 C.F.R. Sec. 9.405 (1984).
Our Bid Protest Regulations, 4 C.F.R. Sec. 21.1 (a) (1985), require
that a protesting party be interested in order to maintain a protest
before this Office. An interested party is defined as "an actual or
prospective bidder or offeror whose direct economic interest would be
affected by the award of a contract or by the failure to award a
contract." Since Royal Flush is not eligible for award even if its
protest were sustained, it is not an interested party.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Council
FILE: B-220406.2 85-2 CPD 645
DATE: December 10, 1985
MATTER OF: Dismas House of Kentucky, Inc.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
RECONSIDERATION REQUESTS - ERROR OF FACT OR LAW - NOT ESTABLISHED
1. Contention that awardee had not met definitive responsibility
criterion, first raised in request for reconsideration but without any
identification of such criterion does not provide a basis for
reconsideration. Moreover, this contention based on same allegations
made in original protest, is untimely and will not be considered since
the request was not filed within 10 days of filing the original protest,
the date on which, at the latest, the protester knew or should have
known the basis of protest.
GENERAL ACCOUNTING OFFICE - JURISDICTION - CONTRACTS - PERFORMANCE -
CONTRACT ADMINISTRATION MATTER
2. Whether awardee will actually perform in accordance with terms of
contract is a matter of contract administration which is not for GAO
consideration.
Dismas House of Kentucky, Inc. request reconsideration of our
decision, Dismas House of Kentucky, Inc., B-220406, Nov. 4, 1985, 85-2
CPD Paragraph . . ., dismissing its protest challenging the award of a
contract to Bannum Enterprises under request for proposals (RFP) No.
274-046-5, issued by the Federal Bureau of Prisons for residential care
for federal offenders in a community residential treatment center. We
deny the request for reconsideration.
In its original protest, Dismas House argued that Bannum was not
capable of providing the services called for in the RFP because it had
not obtained -- and would be unable to obtain -- the requisite zoning
permit for a residential treatment facility. The protester also argued
that Bannum had a history of unsatisfactory performance and lacked
business integrity. We dismissed the protest on the grounds that the
protester's contentions amounted to a challenge of the contracting
agency's affirmative determination of the awardee's responsibility, and
that we would not review such a determination absent a showing that it
was the product of bad faith or fraud or that definitive responsibility
criteria in the solicitation had not been met. Bid Protest Regulations,
4 C.F.R. Section 21.3(f)(5) (1985). We noted that the protester had not
argued, nor did we see any evidence, that either of the above exceptions
applied in this instance.
In its request for reconsideration, Dismas House now contends that
Bannum did not satisfy an alleged definitive responsibility criterion in
the solicitation requiring zoning clearance for its facility. It cites
no language from the solicitation regarding zoning, however, and
presents no argument as to why zoning clearance should be regarded as a
definitive responsibility criterion. Thus, it appears that the
protester 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 affirmative determinations of
responsibility. It has not, however, by its mere referral to definitive
responsibility criterion, without any identification of such criterion,
sufficiently established that such criterion exist.
Moreover, our regulations do not contemplate such piecemeal
presentation of arguments as we have here, 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 CPD Paragraph 651. Since
Dismas House's request for reconsideration relies on the same
allegations raised in its original protest, the basis for its argument
that the solicitation's definitive responsibility criterion had not been
met 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. Section 21.2(a)(2). Since
Dismas House's request for reconsideration was not filed until November
18, considerably more than 10 days after the original protest was filed
on October 30, it cannot be considered as timely raising the issue.
Sermor, Inc. -- Request for Reconsideration, B-219173.2, Oct. 28, 1985,
85-2 CPD Paragraph 470.
Dismas House also points out that on November 8, 1985, a local court
issued a restraining order prohibiting Bannum from operating a half-way
house and maintains that the awardee will not be able to perform. The
agency has determined Bannum to be responsible based on the information
available at that time and awarded that firm the contract. Whether
after award the firm will actually perform in accordance with the terms
of the contract is a matter of contract administration which is not for
our consideration. 4 C.F.R. Section 21.3(f)(1).
Finally, Dismas House reiterates its view that its performance under
the contract would be superior in various respects to the awardee's
performance. Our reconsideration procedure is reserved for review of
alleged errors of law and information not previously considered in the
prior decision. 4 C.F.R. Section 21.12(a). As we have already
considered and dismissed these arguments, we will not consider them
here.
The request for reconsideration is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220406 85-2 CDP 502 DATE: November 4, 1985
MATTER OF: Dismas House of Kentucky, Inc.
DIGEST:
CONTRACTORS - RESPONSIBILITY - DETERMINATION - REVIEW BY GAO -
AFFIRMATIVE FINDING ACCEPTED
1. GAO will not review a challenge to a contracting agency's
affirmative 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.
CONTRACTS - PROTESTS - BASISFOR PROTEST REQUIREMENT
2. Protester's disagreement with the contracting agency's
evaluation of the relative merits of the protester's and the
awardee's proposals is not a basis on which to challenge award of
the contract where the protester does not contend that the agency
improperly applied the evaluation criteria in the solicitation or
otherwise violated applicable procurement laws or regulations.
Dismas House of Kentucky, Inc. protests the award of a contract to
Bannum Enterprises under request for proposals (RFP) No. 274-046-5,
issued by the Bureau of Prisons for residential care for federal
offenders in a community residential treatment center. We dismiss the
protest.
The protester first contends that Bannum is not capable of
satisfactorily providing the services called for by the RFP because
Bannum has not ohtained the necessary local zoning permit for the
residential treatment center. According to the protester, Rannum will
not be able to secure the permit due to community opposition and because
the deed to the property which Bannum proposes to use prohibits its use
for the type of facility contemplated. The protester also maintains that
Bannum has a history of unsatisfactory performance and lacks business
integrity.
By questioning the awardee's ability to perform under the contract,
the protester is challenging the contracting agency's aff irmative
determination that the awardee is a responsible offeror. Because such a
determination is based in large part on the contracting officer's
subjective judgment, our Office will not consider a protest challenging
such an affirmative 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 have not been met. William A. Stiles, Jr., et al., B-215922,
et al., Dec. 12, 1984, 84-2 C.P.D. P 658; Bid Protest Regulations, 4
C.F.R. Sec. 21.3(f)(5) (1985). Here, the protester does not contend,
and we can see no evidence, that either exception applies.
The protester also contends that its performance under the contract
would be superior in various respects to the awardee's performance.
Specifically, the protester argues that the award to Bannum is not in
the federal offenders' best interest because Bannum is not accredited by
the American Correctional Association and lacks community support. The
protester's mere disagreement with the contracting agency over the
relative merits of the two proposals is not a basis on which to
challenge the award of the contract, however; to prevail, the protester
must show that the agency improperly applied the evaluation criteria in
the RFP or that the award otherwise was improper under the applicable
procurement laws and regulations. Since the protester does not contend
that the RFP requires offerors to be accredited or to demonstrate
community support, and presents no other evidence that the agency
improperly evaluated the proposals, this ground of its protest presents
no basis on which to disturb the award of the contract to Bannum.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
FILE: B-220405 85-2 CPD 551 DATE: November 13, 1985
MATTER OF: Omaha Ambulance Service, Inc.
DIGEST:
CONTRACTORS - RESPONSIBILITY - DETERMINATION - REVIEW BY GAO -
AFFIRMATIVE FINDING ACCEPTED
GAO does not review affirmative determination of prospective
contractor's responsibility absent showing of possible fraud or
bad faith on the part of contracting officials or allegation that
definitive responsibility criteria in solicitation were
misapplied.
Omaha Ambulance Service, Inc. (Omaha), protests the award of a
contract for ambulance services to Metro Ambulance of Omaha under
Veterans Administration Medical Center solicitation No. 636-1-86. Omaha
contends that the awardee should have been found nonresponsible because
its past performance has been deficient, allegedly because of the use of
unsafe and improperly equipped vehicles and of unqualified personnel.
Omaha also protests that another bidder that certified itself as being a
small business is not small.
Regarding Metro Ambulance's responsibility, the award to it
represents that the contracting agency found the firm was responsible.
Sylvan Service Corp., B-219077, June 17, 1985, 85-1 C.P.D. P 694. Our
Office does not review protests against affirmative determinations of
responsibility unless there is a showing of possible fraud or bad faith
on the part of contracting officials or an allegation that the
solicitation contained definitive responsibility criteria which the
contracting agency misapplied. Id. Neither condition is applicable
here.
Since Omaha has presented no basis to question the award, the other
bidder's small business size status is not relevant. We point out,
however, that size status protests are considered by the Small Business
Administration, not this Office.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
FILE: B-220400 85-2 CPD 507 DATE: November 1, 1985
MATTER DF: William Everett
DIGEST:
CONTRACTS - PROTESTS - AUTHORITY TO CONSIDER - ACTIVITIES NOT
INVOLVING FEDERAL PROCUREMENT
To be subject to review by GAO under the Competition in
Contracting Act of 1984, a protest must pertain to a procurement
of property or services by a federal agency. A protest concerning
a lease of government property therefore will not be considered,
since a lease is a type of sale, not a procurement of property or
services. Protests concerning sales will be reviewed by GAO only
where the federal agency involved has agreed to such review.
William Everett protests the award by the Navy of a lease for two
parcels of agricultural land at the Concord Naval Weapons Facility,
Concord, California. The protester contends that small businesses have
not been receiving a sufficient share of the leases, and the two leases
at issue therefore should have been set aside for small husinesses. The
protest is dismissed.
Under the Competition in Contracting Act of 1984 (CICA), 31 U.S.C.A.
Sec. 3551(1) (West Supp. 1985), our Office is authorized to review
protests concerning proposed contracts for the "procurement of property
or services" by a federal agency. Here, the protest concerns a lease of
government land by the Navy, and, as such, it does not involve a
procurement of property or services within the meaning of CICA. Rather,
a lease is a type of sale by a federal agency, and, as our Bid Protest
Regulations indicate, we will review protests concerning sales by a
federal agency only if the agency agrees in writing to have its protests
decided by our Office; the Navy has not done so. See 50 Fed. Reg.
14,770 (1985) (notice of agreement by the Forest Service and the Neneral
Services Administration to have protests concerning sales considered by
Ceneral Accounting Office). As a result, there is no basis for review
of the protest by our Office. See Equity Federal Savings Bank,
B-219318, July 24, 1985, 64 Comp. Gen. , 85-2 C.P.D. P 1.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
FILE: B-220399.2 DATE: June 16, 1986 86-1 CPD 552
MATTER OF: Corporate Health Examiners, Inc.
CONTRACTS - NEGOTIATION - AWARDS - TO TOHER THAN LOW OFFEROR
1. In negotiated procurements there is no requirement that award be
made on the basis of the lowest cost. The procuring agency has the
discretion to select a higher technically rated offeror if doing so is
consistent with the evaluation scheme in the solicitation.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - NEW ISSUES - UNRELATED TO ORIGINAL PROTEST BASIS
2. New grounds of protest initially presented subsequent to General
Accounting Office's receipt of agency report on the protest are
dismissed as untimely where it appears that new protest is based on
information known to the protester at agency debriefing on its proposal
which was held prior to the filing of the original protest.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - PRICES - UNPROFITABLE
3. The submission of a below-cost or a low prof it offer is not
illegal and provides no basis for challenging an award of a firm,
fixed-price contract to a contractor who is determined to be
responsible.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
REASONABLE
4. General Accounting Office in camera review of proposals and
evaluation score sheets and summaries shows that the agency's technical
evaluation of proposals was fair and reasonable.
Corporate Health Examiners (Corporate Health) has protested the award
of two contracts to EHE/National Health Services Inc. (EHE) under
request for proposals (RFP) No. 3059 issued by the Federal Bureau of
Investigation, Department of Justice (FBI). The solicitation was for
preemployment and fitness for duty physicals and health analysis for FBI
and Drug Enforcement Administration (DEA) personnel in the New York and
Philadelphia field offices and for the respective headquarters
facilities in Washington, D.C. 1/
The protests of the awards for medical services for the New York
field offices and for Washington, D.C. are denied in part and dismissed
in part.
Under the RFP, issued by the FBI on August 13, 1985, the government
reserved the right to award a single firm, fixed-price contract, or
separate contracts for each location, for the period through September
30, 1986, with the option to extend performance for four additional
periods of 1 year each.
The deadline for the receipt of initial proposals was September 26,
1985, and both the protester's and EHE's proposals were determined to be
in the competitive range for New York and Washington, D.C. Following
discussions Corporate Health and EHE submitted their best and final
offers by the January 21, 1986, due date.
On February 3, the FBI awarded contracts for medical services in New
York City and Washington, D.C. to EHE and on February 13, Corporate
Health protested to this Office these two awards. By letter dated
February 27, the agency advised us that it determined under 31 U.S.C.
Sec. 3553(d) (2) (Supp. II 1984) that it is in the best interests of the
United States to proceed with performance of the contract for medical
services in Washington, D.C., notwithstanding the pendency of this
protest.
Corporate Health asserts with regard to the award for the New York
field offices that the agency misapplied the RFP's evaluation criteria
and that if the evaluation factors had been properly applied the agency
would have awarded the New York portion to it. The protester asserts
that although agency officials had advised it that the differences
between its technical proposal and that of EHE were "minimal," the
agency awarded the contract to EHE at a price almost $20,000 higher than
the protester's.
The solicitation's evaluation scheme allocated a total of 700 points
for a proposal's technical approach and 300 points for lowest cost.
Thus, the technical score comprised 70 percent of the total evaluation
score and the price score comprised the remaining 30 percent. Under the
evaluation scheme the lowest priced proposal would receive the full 300
points and the other proposals would be awarded fewer points
corresponding to their proportionately higher prices.
While the agency has advised that it provided Corporate Health with a
debriefing of its proposal on February 7, the agency has denied the
protester access to the awardee's proposals, the evaluation score
sheets, and evaluation summaries relating to the awardee, all of which
have been submitted to this office for an in camera review in connection
with the protest. Our discussion of the contents of such material is
necessarily limited because of the agency's restriction on their
disclosure. See Raytheon Support Services Co., B-219389.2, Oct. 31,
1985, 85-2 C.P.D. P 495.
The agency advises that its technical evaluation of the proposals was
conducted by three independent evaluation teams consisting respectively
of DEA personnel, FBI headquarters personnel and FBI New York field
office personnel. Another individual, an employee of the FBI laboratory
in Washington, D.C., evaluated the laboratories which the offerors
proposed to use. EHE's proposal received a total of 917 points in the
evaluation--680 technical points and 237 points for cost whereas
Corporate Health received a total of 867 points--567 technical points
and 300 points for cost.
In its protest filed on February 13 with this Office the protester
has not challenged the reasonableness of the agency's evaluation per se
but contends that the two firms had submitted offers which were
technically equal so that award should have been made to it as the
low-priced offeror. The agency disagrees with the protester's contention
that its proposal was technically equal to that of EHE's proposal. The
FBI states that it views EHE's technical proposal, which was rated 113
points higher than the protester's proposal, as being "markedly
superior."
Generally, an offeror in a negotiated procurement is not
automatically entitled to award merely because it offered the lowest
price. Henderson Aerial Surveys, Inc., B-215175, Feb. 6, 1985, 85-1 C.
P.D. P 145. There is no requirement in a negotiated procurement that
award be made on the basis of lowest cost or price to the government
unless the solicitation so provides. Systems Research Laboratories,
Inc., B-219780, Aug. 16, 1985, 85-2 C.P.D. P 187. We have consistently
upheld awards to offerors with higher technical scores and higher costs,
so long as the result is consistent with the evaluation criteria and the
procuring agency determines that the technical difference outweighs the
cost or price difference. Kelsey-Seybold Clinic, P.A., B-217246, July
26, 1985, 85-2 C.P.D. P 90.
Here, all three evaluation teams and the employee who evaluated the
laboratories rated EHE's technical proposal as being superior, overall,
to Corporate Health's proposal and the narrative summaries by the
evaluation teams are consistent with the 113-point higher technical
rating received by EHE. On the basis of our in camera review we
therefore conclude that the agency had a reasonable basis to decide that
EHE's technical proposal was superior to that of the protester.
Furthermore, we find the award to EHE, even though EHE's price of
$157,437 was approximately $20,000 higher than the protester's, was
consistent with the solicitation's evaluation criteria which accorded
the technical evaluation a weight of 70 percent of the total evaluation.
Notwithstanding the emphasis on the technical criteria in the
solicitation's evaluation scheme the protester asserts that cost, not
technical superiority, was to be the primary consideration for contract
award under the solicitation. This contention rests upon a statement in
a November 13 agency report to our Office concerning a prior protest
under this solicitation. See Metro Medical Downtown, B-220399, Dec. 5,
1985, 85-2 C.P.D. P 631. In its report responding to Metro Medical's
protest of the FBI's failure to provide it with a copy of the RFP, the
agency concluded with the statement that it was attempting to "award
this contract to the lowest responsive bidder who adequately meets our
needs . . . . No effort, conscious or otherwise, has been made to
exclude any bidder."
The protester's contention is without merit. As set forth above, the
solicitation's evaluation scheme clearly emphasizes technical
considerations over cost. The solicitation, not an agency report
submitted in response to an earlier protest by another party on a
different issue, provides the basis for the proposal's evaluation
scheme. Thus, we reject the protester's contention that price was the
most important factor for award.
Finally, at the conference held on this protest and in its subsequent
comments on the conference and the agency report the protester for the
first time objects to the agency's alleged "misevaluation" of its
technical proposal. For example, Corporate Health disputes the findings
of the evaluators that its medical facility in New York lacks separate
waiting rooms for men and women. It would appear, and the protester has
not indicated otherwise, that the information forming the basis for this
ground for protest was known to Corporate Health as a result of the
February 7 debriefing which it received from the agency.
Each new basis for protest first raised after the initial filing of a
protest must independently meet the timeliness requirements of our Bid
Protest Regulations. See Westinghouse Electric Corp., B-215554, Sept.
26, 1985, 85-2 C.P.D. P 341. Accordingly, this new ground for protest
is dismissed as untimely since it was filed with our Office more than 10
working days after the basis therefor apparently became known to the
protester. See 4 C.F.R. Sec. 21.2(a)(2) (1985).
EHE also received an award under the solicitation for the performance
of medical services in Washington, D.C. EHE's proposal received higher
scores than Corporate Health's proposal in the technical evaluation and
for low cost. EHE's total point score was 996-- 696 technical points
and 300 points for offering the low price. Corporate Health received a
total point score of 910 points-- 652 technical points and 258 for cost.
In its best and final offer EHE proposed a price of $163,725 compared
with Corporate Health's best and final offer in the amount of $208,342.
Corporate Health contends that the agency improperly made award to
EHE since a "cost realism evaluation" of EHE's proposal has not been
conducted. The protester maintains that the FBI should have performed a
"cost realism (should cost') analysis" because, even though EHE offered
the lowest "estimated cost" its "proposed costs" are unrealistic.
At the outset, we note that the solicitation provided that a firm,
fixed-price contract, or contracts, would be awarded. A firm,
fixed-price contract provides for a definite price which is not subject
to adjustment and this contract type places upon the contractor the risk
and responsibility for all contract costs and resulting profit or loss.
Federal Acquisition Regulation (FAR), 48 C.F.R. Sec. 16.202 (1984).
Accordingly, "cost realism" bears little relationship to a firm,
fixed-price contract where the prime concern is cost quantum. Los
Angeles Community College District, B-207096.2, Aug. 8, 1983, 83-2 C.P.
D. P 175 at 4. Since a firm, fixed-price contract, in fact, was awarded
pursuant to the solicitation for the medical services in Washington, D.
C., a cost realism analysis was not required prior to award of the
contract. See Clausing Machine Tools, B-216113, May 13, 1985, 85-1 C.
P.D. P 533.
We have recognizd that at the discretion of the procuring agency a
solicitation for a firm, fixed-price contract may provide for a cost
realism analysis for such purposes as measuring an offeror's
understanding of the requirements of a solicitation. See Los Angeles
Community College Districts, B-207096.2, supra, 83-2 C.P.D. P 175 at 4.
In this regard, the protester contends that such an analysis should have
been performed for this procurement for two reasons.
First, the protester maintains that the RFP requires a cost realism
evaluation because its evaluation criteria include a formula for
determining an offeror's "evaluated cost" and "weighted cost score."
These phrases, however, are not related to the determination of the
"realism" of an offeror's "costs" as there is no mention in the
solicitation of "cost realism" nor is there any provision in the
solicitation which provides for a "cost realism analysis." The RFP
formula at issue is simply a method of allocating point values to
proposals consistent with the firm, fixed-prices offered. This approach
has been used in other firm, fixedprice procurements. See, e. g.,
Henderson Aerial Surveys, Inc., B-215175, supra, 85-1 C.P.D. P 145 at 3.
Offerors were to use cost "matrix" forms attached to the RFP "for
setting out pricing." There is nothing in these matrices which would
indicate that they were to be used as part of a cost realism evaluation
or analysis. The matrices essentially stated the approximate quantity
of each medical service needed by the agency and required that the
offeror indicate the "unit price" and the "total price" for each of the
medical services to be provided and to indicate the sum of all of the
total prices. The matrix for Washington, D.C., as amended, also
requested offerors to submit the unit and total price of the "physician
hourly fee" for the number of hours set forth in the matrix by the
agency. The FBI states that the amended pricing matrix for Washington,
D.C. was the result of its requirement that medical consultation be
provided in addition to the required physical examinations and medical
tests. Since these matrices requested prices for the required medical
services and not the offeror's cost, these matrices cannot be construed
as relating to cost realism. Therefore, we cannot conclude that the RFP
provisions for the entry and pointscoring of prices required that a cost
realism analysis be performed.
Second, Corporate Health asserts that a cost realism analysis is
required by FAR, 48 C.F.R. Secs. 15.803(a) and 15.805-3. The
regulations cited by the protester respectively concern an agency's
disclosure of cost and pricing data and techniques of cost analysis;
they do not require that a cost realism analysis be conducted for a
firm, fixed-price contract.
In its comments on the protest conference and the agency report
Corporate Health now asserts that the agency has failed to conduct a
price analysis of EHE's proposal price as is required by FAR, 48 C.F.R.
Sec. 15.805-2, and that such a price analysis would have resulted in a
"downgrading" of EHE's proposal. The protester points out that the
agency did not indicate in its March 21 report on the protest that it
had carried out a price analysis of EHE's proposal. We dismiss this
ground for protest as untimely.
Since Corporate Health's February 13 protest was predicated on its
contention that the agency failed to carry out a "cost realism"
evaluation prior to award to EHE, there was no reason for the agency to
include in its report discussion of price analysis as required by FAR,
48 C.F.R. Sec. 15.805-2. If the protester suspected that a proper price
analysis of proposals may have not been carried out it should have
raised that matter as one of the grounds in its initial protest and not
wait to see if the matter of price analysis was addressed in the
agency's report. Even if the date of receipt of the agency report,
March 21, were viewed as the date that the basis of the protest
regarding price analysis was first known to the protester, its
subsequent protest concerning the lack of a price analysis, filed with
our Office on April 8, is clearly untimely. See 4 C.F.R. Sec. 21.2(a)(
2) (1985). We note that a price or cost analysis based on cost or
pricing data generally is concerned with whether an offeror's prices are
higher than warranted considering its costs, Digital Equipment Corp.,
B-219435, Oct. 24, 1985, 85-2 C.P.D. P 456, rather than whether they are
too low.
The protester also asserts that EHE's price for the medical services
in Washington, D.C. is unrealistically low and that as a result it will
be impossible for EHE to carry out the contract using properly qualified
physicians. Furthermore, Corporate Health asserts that EHE cannot abide
by its proposal price during the term of the contract and thus will
attempt to pass on to the FBI significant cost increases in each of the
option years permitted under the contract. 2/ The protester asserts that
EHE's much lower price constitutes an improper "buy-in."
To the extent that Corporate Health is now alleging that EHE cannot
perform at its offered price, it is essentially challenging the agency's
determination prior to award that EHE is a responsible contractor. Our
Office does not consider protests concerning affirmative determinations
of responsibility absent a showing that the determination may have been
made fraudulently or in bad faith or that definitive responsibility
criteria in the solicitation were not met. 4 C.F.R. Sec. 21.3(f) (5)
(1985); Bobwreen Consultants Inc., B-218214.4, Sept. 27, 1985, 85-2
C.P.D. P 558. Neither exception is alleged here by the protester.
Furthermore, the submission of a below-cost or a low profit offer is not
illegal and provides no basis for challenging an award of a firm,
fixed-price contract to a responsible contractor. The regulations
require only that the contracting officer take appropriate action to
ensure that losses due to below cost awards are not recovered. FAR, 48
C.F.R. Sec. 3.501-2(a).
We do note that at the conference and in its comments on this protest
the agency advised that EHE may have omitted one cost element from its
price for conducting the stress tests. Although some of the specific
information regarding this matter are regarded as proprietary
information by the agency, as indicated by the agency at the protest
conference, it appears to the agency that in pricing the stress tests
for Washington, D.C., EHE omitted the price of the physicians' hourly
fee from the price of the stress test. The agency advises that it
therefore evaluated EHE's proposal on the basis of a higher price which
it believes is actually involved (we note that by letter dated January
22, EHE verified its price for the stress tests as indicated in its best
and final offer) and even with this adjustment EHE remained the low
offeror although the price differential between its low offer and that
of Corporate Health was reduced (thus increasing Corporate Health's
point score). Although the protester has not objected to the agency's
evaluation of EHE's price proposal on an adjusted price basis it
contends that this apparent omission in EHE's price indicates that EHE
was incapable of performing, a circumstance which emphasizes the need
for a price analysis and casts doubt on the credibility of the agency's
technical evaluation. As is set forth above, with certain exceptions
not applicable here, our Office does not consider protests of
affirmative responsibility determinations and the protest that the
agency did not conduct a price analysis as required by FAR, 48 C.F.R.
Sec. 15.805-2, is untimely.
Concerning the protester's doubt about the credibility of the
agency's evaluation of EHE's proposal, it is neither our function nor
our practice to conduct a de novo review of proposals or to make an
independent determination of their relative merit since the evaluation
of proposals is the function of the procuring agency requiring the
exercise of informed judgment. We will question the procuring agency's
evaluation only where such evaluation was clearly unreasonable. See
Battelle Memorial Institute, B-218538, June 25, 1985, 85-1 C.P.D. P 726
at 4. Our in camera review of EHE's technical proposal and the
evaluation's score sheets and summaries does not establish that the
agency's technical evaluation of EHE's proposal was unreasonable. Thus,
we see no reason to question such evaluation. In addition, our review
of the record before us indicates that the agency's estimate of the
actual intended price of the stress tests to be conducted by EHE was
reasonable. Even if we presume that EHE did in fact commit an error in
pricing that item, which it seems to deny, it appears that the agency's
price adjustment for the purpose of evaluating EHE's price was
reasonable and that EHE was properly determined to be the low-price
offeror. We point out that the protester has not alleged that but for
the possible error in EHE's pricing of this one task Corporate Health
and not EHE would have submitted the low priced best and final offer.
On the contrary, the protester persists in accusing EHE of an improper
"buy in" which, as we have stated above, does not present a proper basis
for a legal objection to award.
Corporate Health also requests attorney's fees together with its
proposal preparation costs. In view of our decision denying in part and
dismissing in part its protests, its claim for these costs is 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 protests are denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
FOOTNOTES
1/ Only the awards for the New York and Washington, D.C. areas are at
issue because the protester received award for medical services for the
philadelphia field offices.
2/ The RFP provides that the offeror's unit prices will "prevail
through the first (1) option year if exercised."
FILE: B-220399 85-2 CPD 631
DATE: December 5, 1985
MATTER OF: Metro Medical Downtown
CONTRACTS - NEGOTIATION - COMPETITION - ADEQUACY
Where as result of Commerce Business Daily synopsis agency
distributed copies of solicitation to 24 firms on which four have
submitted offers, thus obtaining full and open competition, GAO will not
sustain protest of firm which did not compete because apparently through
oversight it was not added to solicitation mailing list which agency did
not use in any event. GAO recommends, however, that in future agency
take measures to insure that interested firms are added to solicitation
mailing lists and that such lists are used.
Metro Medical Downtown protests the failure of the Federal Bureau of
Investigation, Department of Justice, to provide it with a copy of
solicitation No. RFP 3059 issues August 13, 1985, for the procurement of
medical services -- administering pre-employment and fitness for duty
physical examinations for personnel of the FBI and the Drug Enforcement
Administration (DEA) on location in the New York City and Philadelphia
Field Offices of the FBI and DEA and their respective headquarters
facilities.
This decision is issued pursuant to the express option provision in 4
C.F.R. Section 21.8 (1985) and is rendered within 45 calendar days of
the date the protest was filed.
We deny the protest.
The protester advises that in April 1985 it learned that the FBI was
a purchaser of medical examination services in the New York City area.
Metro Medical states that it contacted the FBI procurement office in
Washington, D.C. to insure that it would receive copies of solicitations
for such services and that in accordance with the verbal advice it
received it requested, by letter dated April 22, 1985, that it be added
to the FBI's appropriate solicitation mailing list. However, Metro
Medical did not receive a copy of RFP No. 3059, issued some 4 months
later. Not until October 21, Metro states, did it learn that the FBI
had obtained offers under that solicitation for medical services and
that the "bid period" had closed on September 26. Metro Medical
requests that the solicitation be reopened so that it may submit its
offer for consideration.
The agency advises that Metro Medical was not placed on the
solicitation mailing list since that firm had not filed the required
Standard Form (SF) 129 -- Solicitation Mailing List Application. The
FBI advises that it is normal practice for it to mail a SF-129 to
interested potential offerors so that they can submit the completed form
and be placed on the mailing list. The agency states that if it failed
to follow this standard procedure with regard to Metro Medical's
expression of interest, such failure was unintentional and the result of
an oversight. In any event, the agency states, its failure to place
Metro Medical on the solicitation mailing list was not material to Metro
Medical's failure to submit a timely offer under the solicitation since
the agency did not use the solicitation mailing list for the
solicitation under protest. The solicitation was synopsized in the June
7, 1985, edition of the Commerce Business Daily (CBD), as a result of
which the FBI received a total of 24 requests for the solicitation. The
agency advises that six concerns attended an August 27 preproposal
conference and that four proposals were submitted by the September 26
deadline for receipt of proposals.
Given the specificity of Metro Medical's letter requesting that it be
added to the solicitation mailing list, we think it would have been
appropriate for the FBI to have done so even though the application was
not made on the SF 129 prescribed for this purpose. It appears,
however, that even if Metro Medical's application had been by way of an
SF 129, it would not have been sent a copy of the solicitation because,
for reasons which are unexplained, the FBI did not use its solicitation
mailing list. The applicable regulations make clear that these lists
are to be used by procuring agencies to promote competition. See
Federal Acquisition Regulation Sections 14.203-1 and 14.205-4(a),
Federal Acquisition Circular 84-5, April 1, 1985. Nevertheless, we note
that in response to the CBD synopsis, 24 firms requested copies of the
solicitation, of which four have submitted offers. There is no
indication that reasonable prices have not been offered. In view of the
number of firms which requested and received copies of the solicitation
as a result of the CBD notice and of the number of offers received, we
think full and open competition was achieved. Since the FBI appears to
have obtained competition for this procurement, we do not sustain Metro
Medical's protest. We are recommending to the FBI, however, that in the
future it take measures to insure that interested potential offerors are
added to solicitation mailing lists and that those lists are used.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220396 85-2 CPD 644
Date: December 10, 1985
MATTER OF: Scott Huber Essick
CONTRACTS - GRANT-FUNDED PROCUREMENTS - GENERAL ACCOUNTING OFFICE
REVIEW
GAO does not review complaints concerning the award of contracts
under federal grants.
Scott Huber Essick complains about the rejection of all bids and
cancellation of invitation for bids No. PAK/0468/85-006 for quantities
of self-propelled compactors, hydraulic backhoes, truck cranes, and
other specified excavation equipment.
The Agency for International Development (AID) advises that the
solicitation was issued by Connell Bros. Company, Ltd., acting as agent
for the government of Pakistan, and that the procurement was to be
funded by an AID grant. Since our Office no longer reviews complaints
concerning the award of contracts under grants, we dismiss the matter.
See 50 Fed. Reg. 3978 (1985); The George Sollitt Construction Co., 64
Comp. Gen. 243 (1985), 85-1 C.P.D. Paragraph 150.
Robert M. Strong
Deputy Associate General Counsel
FILE: B-220395 86-1 CPD 117
DATE: February 3, 1986
MATTER OF: Eastern Maintenance Services, Inc.
BONDS - BID - SURETY - NET WORTH
Contracting officer's reliance upon tax value, rather than fair
market value, of individual bid bond surety's real estate holdings in
computation of his net worth is reasonable where surety failed to
provide the contracting officer with adequate information regarding the
location and value of these holdings. It was the surety's
responsibility to provide the contracting officer with sufficient
information upon which to base a determination of responsibility.
Eastern Maintenance Services, Inc. protests the Air Force's rejection
of its bid under IFB No. FO9607-85-B0016 for shelf-stocking and
custodial services at the Moody Air Force Base (Georgia) Commissary.
The contracting officer rejected Eastern's bid due to that firm's
failure to establish the financial adequacy of one of its individual bid
bond sureties.
We deny the protest.
Eastern submitted the fourth lowest bid in response to the
solicitation. The agency rejected the two low bidders for failure to
submit bid bonds, and the third low bidder for deficiencies relating to
its bond. The solicitation required a bid guarantee of 20 percent of
the bid price, and Eastern submitted a bond with a penal amount of
$22,680 listing two individual sureties. /1/ The first surety indicated
a net worth of $3,859,736 on her Affidavit of Individual Surety
(Standard Form 28); the other indicated a net worth of $1,553,800.
Neither individual completed item 10 of the affidavit which required
information regarding his or her outstanding surety obligations. In
addition, the second surety failed to specify his other liabilities
(item 7), the location of his real estate (item 8), and the amount of
assessed valuation of this realty for taxation purposes (item 8).
In response to requests by the contracting officer for the missing
information, both sureties submitted lists of the bid and performance or
payment bonds on which they were sureties. In addition, the second
surety represented that he had no other liabilities, and submitted a
list identifying the tow, state, common name, and fair market value of
each piece of his realty. He neglected, however, to provide the
assessed value of this property for tax purposes. The contracting
officer apparently accepted the additional information from the first
surety as she raised no further questions concerining the first surety's
responsibility.
Because the second surety failed to include the assessed valuation of
the real estate and because of the rather sketchy description of the
properties supplied by the surety the contracting officer contacted the
county tax offices where the listed properties were supposedly located.
While she found that the surety did indeed have extensive real estate
holdings in these counties, the descriptions and the value assigned the
various properties by the tax offices did not match the descriptions
provided by the surety. For example, the contracting officer was unable
to verify at all the existence of the "Pineview Farm," valued by the
surety at $327,000, /2/ or the properties listed by the surety as
"Residence & Lot-Bunce Farm" and "Wade Land - I95," valued at $20,000
and $50,000, respectively. In view of the problems in identifying the
real estate from the descriptions provided by the surety, the
contracting officer used the descriptions and assessed value provided by
the county tax offices in totaling the value of the surety's real
estate. Using this method she calculated the value of the surety's real
estate holdings to be $420,280. In the list provided to the contracting
officer after bid opening, the surety contended that his real estate
holdings were worth $1,402,000. Using the contracting officer's
valuation of the real estate, the surety's net worth would be at most
$977,520, /3/ while using the surety's most recent figures it would be
$1,458,800. The protester admits that the surety's outstanding bond
liabilities total $1,371,314.73; thus, if the contracting officer's
method of calculating the surety's net worth was proper, its net worth
is not sufficient to cover its outstanding bond liabilities and the bond
was properly rejected. Despite the protester's objections, we think the
contracting officer acted reasonably under the circumstances.
The protester's objections to the contracting officer's actions
center primarily on her use of the assessed value of the land for tax
purposes rather than the fair market value assigned by the surety. The
protester argues that it is common knowledge that property is assessed
for tax purposes at less than its market value and that in the locations
in question those assessments are 5 years old. Further, the protester
argues that the contracting officer should have been able to verify
easily the listed real estate at the county tax offices.
We disagree.
The adequacy of a surety's net worth is a matter of responsibility
which may be established anytime before contract award. Consolidated
Services, Inc., B-206413.3, Feb. 28, 1983, 83-1 CPD Paragraph 192.
Since such a determination involves the exercise of subjective business
judgments we will not disturb it unless it is shown to be unreasonable.
See CWC Inc., B-209383, Oct. 19, 1982, 82-1 CPD Paragraph 347. In this
regard, we think it was the surety's obligation to provide the
contracting officer with sufficient information to clearly establish its
responsibility; that is, that it had sufficient financial resources to
meet its bond obligations. See Manufacturing Systems International,
B-212173, May 30, 1984, 84-1 CPD Paragraph 586.
The problems here were caused first by the surety's failure to
include any reasonable description of the location of the real estate or
its assessed valuation for tax purposes on its original surety
affidavit. Further, even when the surety was given the opportunity to
amend his initial inadequate affidavit he persisted in supplying
imprecise location descriptions and again failed to include the assessed
valuation for tax purposes. The contracting officer contacted the local
tax offices and found that the real estate records listed holdings which
did not match those described in the list submitted by the surety. In
these circumstances, we think she acted reasonably in discounting the
values assigned to the real estate by the surety and using the listings
and the valuation contained in the counties' records.
The protest is denied.
Harry R. Van Cleve
General Counsel
(1) Federal Acquisition Regulation, 48 C.F.R. Section 28.202-2
(1984), requires that two individual sureties must execute the bond,
each of whom must have a net worth equal to the penal sum of the bond.
(2) After the contracting officer determined the surety
nonresponsible the Air Force did locate a tract owned by the surety of
approximately half the size of "Pineview Farm" listed by the surety with
a tax value of $47,420.
(3) In arriving at this figure we did not subtract the $500,500
listed by the surety on the original affidavit as real estate
encumbrances since the contracting officer was not able to verify all
the real estate originally listed and we do not have any information
regarding the encumbrances that pertain to the real estate verified by
the contracting officer.
FILE: B-220394 86-1 CPD 150
DATE: February 11, 1986
MATTER OF: Pacific Coast Utilities Service, Inc.
BIDS - INVITATION FOR BIDS - CANCELLATION - AFTER BID OPENING -
COMPELLING REASONS ONLY
1. Contracting agency lacked compelling reason to cancel invitation
for bids (IFB) for waste collection services where alleged inconsistency
between two IFB provisions -- the bid schedule calling for a lump sum
bid for numerous items including trash containers, and another provision
calling for the trash containers to be bid as a separate item -- is
resolved by a reasonable interpretation of the IFB, and award under IFB
as so interpreted would meet agency's needs without prejudice to any
bidder.
BIDS - INVITATION FOR BIDS - CANCELLATION - AFTER BID OPENING -
COMPELLING REASONS ONLY
2. Omission of standard descriptive literature clause is not a
compelling reason to cancel an IFB where IFB contains a provision
requiring submission of descriptive literature showing compliance with
detailed specifications also included in the IFB, and contracting agency
makes no showing that failure to use language in standard clause
resulted in prejudice to bidders or affected agency's ability to
determine whether a bidder's product met the IFB specifications.
Pacific Coast Utilities Service, Inc. protests the cancellation of
invitation for bids (IFB) No. N62474-85-B-9178, issued by the Navy for
solid waste collection and disposal services at Camp Pendleton,
California. The protester contends that the Navy lacked a compelling
reason to cancel the IFB. We sustain the protest.
The IFB, issued on April 25, 1985, called for a lump sum bid for each
of two bid items, a definite quantity of solid waste collection and
disposal services for one year (bid item 0001), called the "fixed-price,
lump sum" portion of the contract), and an indefinite quantity of
additional collection and disposal services for the same year (bid item
0002, called the "indefinite quantity" portion). Three bids were
received at bid opening on July 16. The apparent low bidder, Bay Cities
Disposal, subsequently withdrew its bid; as a result, the protester, as
the second low bidder, became eligible for award. By letter dated
October 17, however, the Navy notified the protester that the IFB would
be canceled due to "an inadequate and ambiguous specification." As
discussed in detail below, the primary reason for the cancellation,
explained for the first time in the Navy's report on the protest,
concerns the requirement that the contractor provide trash containers to
all residential family dwellings as part of its performance under bid
item 0001, the definite quantity portion of the IFB. /1/
The bid schedule as amended provided that the bid for item 0001 was
to reflect the bidder's price for performance of the definite quantity
portion of the contract as specified in sections 00004 and 00005 of the
IFB, with the exception of the items included under bid item 0002, the
indefinite quantity portion of the contract. Similarly, section 00001,
clause 17.1 provided that the bid for the definite quantity portion of
the contract was to include all work except that listed in the Schedule
of Indefinite Quantity Work; clause 17 also provided that the specific
work items comprising the definite quantity portion of the contract were
identified in the Schedule of Deductions in section 00004 of the IFB.
The Schedule of Deductions listed the work items to be performed by
quantity and called for the contractor to insert a unit price by item.
The Schedule described 12 tasks in all, and provided that the sum of the
total prices by task was to equal the lump sum bid for bid item 0001,
the definite quantity portion of the contract. The Schedule was to be
used to calculate payment deductions for unsatisfactory performance, and
was to be submitted within 15 days after award.
The Navy's decision to cancel the IFB was based on an alleged
ambiguity in the IFB regarding the contractor's obligation to furnish
residential trash containers as part of the definite quantity portion of
the contract. With regard to the requirement, the Schedule of
Deductions provided as follows:
TABLE OMITTED
Clause 11.5 of section 00004, referred to in the Schedule, described in
greater detail the contractor's obligation to provide residential trash
containers, listing the required size and other specifications of the
containers. /2/
The clause also stated:
"All containers provided, either initially or as replacements,
shall be bid as a separate item on the contract and shall become
the property of the Government upon delivery." (Emphasis in
original.)
Despite this provision for separate pricing of the containers, the bid
schedule, as noted above, called only for a lump sum bid for all the
work items; it did not include a line item for a separate bid on the
containers.
Although a contracting officer has broad discretion to cancel an IFB,
there must be a compelling reason to do so after bid opening, because of
the potential adverse impact on the competitive bidding system of
cancellation after bid prices have been exposed. See Federal
Acquisition Regulation (FAR), 48 C.F.R. Section 14.404-1(a)(1) (1984);
Alliance Properties, Inc., B-219407, Sept. 18, 1985, 64 Comp. Gen. . .
. , 85-2 CPD Paragraph 299. The fact that a solicitation is defective
in some way does not justify cancellation after bid opening if award
under the IFB would meet the government's actual needs and there is no
showing of prejudice to other bidders. Browning-Ferris Industries of the
South Atlantic, Inc., B-217073 et al., Apr. 9, 1985, 85-1 CPD Paragraph
406.
Here, in the Navy's view, due to the fact that the IFB in section
00004, clause 11.5 called for separate pricing of the trash containers
but lacked a corresponding line item on the bid schedule, it was unclear
to bidders whether they were to include the price for providing the
containers in their bids, and, if so, whether to include it under bid
item 0001 or 0002. Thus, the Navy asserts, cancellation of the IFB was
justified because the Navy could not be sure that award to any of the
bidders would meet the Navy's need for the contractor to provide the
trash containers. The protester disagrees, arguing that the IFB clearly
called for bidders to include the price of the trash containers in the
lump sum bid for bid item 0001.
As noted above, the IFB advised bidders that bids for the definite
quantity portion of the contract were to include the price of the
containers. Specifically, section 00001, clause 17 referred bidders to
the Schedule of Deductions in section 00004 of the IFB, which listed the
requirement to provide trash containers as one of the tasks included in
bid item 0001. Similarly, the bid schedule itself referred bidders to
section 00004 for a description of the scope of work. In light of these
references to furnishing the trash containers as part of the performance
required under bid item 0001, we find unreasonable the Navy's contention
that it was unclear whether bidders were to include the price of the
containers in the lump sum bid due to the sentence in section 00004,
clause 11.5 of the IFB calling for the containers to be priced
separately. The Navy contends that a bidder could list and price all
the tasks included in bid items 0001 and 0002, but "forget" to include
the price of the containers due to the provision calling for separate
pricing of the containers. We find this contention implausible. If, as
the Navy suggests, the bidders drew up their bids by adding together all
the tasks to be performed under the IFB, they necessarily would include
the price of furnishing the containers since it is listed as a work item
under the Schedule of Deductions.
The Navy does not explain why the provision for separate pricing of
the containers was included in the IFB. In our view, reading the IFB as
a whole, the only reasonable interpretation is that the Navy sought a
separate price for its own information, since the Navy was to retain
ownership of the containers. Consistent with this interpretation, there
is no indication in the IFB, nor does the Navy contend, that the
containers were intended to be treated as a separate item for bid
evaluation purposes; on the contrary, section 00001, clause 18.1 of the
IFB provides that bids will be evaluated on the basis of the aggregate
sum of the total bid prices for bid items 0001 and 0002. Further, to
the extent that there is any inconsistency between the bid schedule and
the provision for separate pricing of the containers, section 00004,
clause 8 of the IFB, the order of precedence clause, advises bidders
that precedence is to be given to the bid schedule, which clearly
requires the price of the containers to be included in the lump sum bid
for item 0001.
Accordingly, we find that, reading the IFB as a whole, the only
reasonable interpretation is that the lump sum bid for item 0001 was to
include the price for the trash containers. Award under the IFB
therefore will meet the Navy's needs as set out in the IFB. In
addition, the Navy does not contend, and we see no evidence in the
record, that any of the bidders misinterpreted the IFB and omitted the
trash containers from their lump sum bids. Thus, there is no indication
that the bidders were prejudiced or failed to bid on a common basis. As
a result, we find that the Navy lacked a compelling basis for canceling
the IFB, since award under the IFB will meet the Navy's needs without
prejudice to the bidders.
The Navy also stated that the IFB failed to include the standard
clause set out in FAR, 48 C.F.R. Section 52.214-21 regarding submission
of descriptive literature, which, in this case, was required to
demonstrate the bidder's compliance with the size, material and other
specifications listed in the IFB for the trash containers. Section
00004, clause 11.5 of the IFB did provide, however, that "(t)he
Contractor shall submit descriptive literature with his bid which
clearly shows that containers being provided meet the minimum
specifications listed herein." Whether the omission of the standard
descriptive literature clause is relied on as a basis for the
cancellation is unclear; the Navy's report states only that the
omission itself "may not constitute a compelling reason" for
cancellation, but that, together with the alleged deficiency in the bid
schedule, it supports the cancellation.
In any event, omission of a mandatory clause is not a sufficient
basis for cancellation, standing alone; rather, cancellation is
appropriate only where bidders are prejudiced by the omission or the
government's needs will not be met by award under the solicitation. See
Linda Vista Industries, Inc., B-214447 et al., Oct. 2, 1984, 84-2 CPD
Paragraph 380. Here, the Navy does not contend that the failure to use
the language of the standard clause resulted in prejudice to the bidders
or affected the Navy's ability to determine whether the trash containers
met the IFB specifications, and we see no basis on which to conclude
that it did. As noted above, section 00004, clause 11.5 of the IFB
required bidders to submit descriptive literature. The protester
maintains, and the agency does not dispute, /3/ that the protester did
not submit descriptive literature with its bid, but that the agency
nevertheless proposed to accept the bid because it concluded that the
awardee would have to meet the solicitation's detailed specifications
for the containers, whether or not the literature was included with its
bid. It thus appears that the agency did not need to have the
literature submitted with the bid as the clause required. Since the
agency seems to have waived the requirement, and since it is clear that
any awardee under the solicitation would have to meet the container
specifications, we find that the omission of the standard descriptive
literature clause was not a compelling reason to cancel the IFB.
In view of our conclusion that award under the IFB is proper, we
sustain the protest against cancellation of the IFB. By separate letter
to the Navy, we are recommending that the IFB be reinstated and award be
made to the protester as the low bidder, if that firm's bid is found
responsive and the firm responsible.
The protest is sustained.
Comptroller General of the United States
(1) The protester states that in a conversation with the contracting
officer before the Navy's October 17 letter was received, the protester
was advised that the cancellation was based on the omission of a
standard descriptive literature clause, and two other allegedly
deficient provisions in the IFB. The protester's initial submission
addresses these issues in detail. Since the Navy does not now rely on
the latter two deficiencies as justification for the cancellation, we
need not address them.
(2) The other provisions referred to in the Schedule -- Section
00005, clause 3.14.2, and Appendix 6 -- describe requirements for
stenciling the containers and a collection schedule, and do not bear the
Navy's decision to cancel the IFB.
(3) While the protester included a detailed narrative of the events
regarding its failure to submit descriptive literature with its bid, the
agency ignored the subject in its protest report.
FILE: B-220393 86-1 CPD 36
DATE: January 14, 1986
MATTER OF: Thomas Engineering Company
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
1. Protest alleging that specifications in request for proposals
unduly restrict competition and create a sole source procurement is
untimely when not filed before the closing date for receipt of initial
proposals.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - DISCUSSION WITH ALL
OFFERORS REQUIREMENT - "MEANINGFUL" DISCUSSIONS
2. Protest that discussions were allegedly inadequate is denied
where protester repeatedly indicated it could not meet mandatory
requirement, and, therefore, proposal was properly determined to be
technically unacceptable.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
TECHNICALLY UNACCEPTABLE PROPOSALS - COST, ETC. NOT A FACTOR
3. Where a proposal is properly rejected as technically
unacceptable, offered cost is irrelevant as the proposal could not be
considered for award.
Thomas Engineering Company (TEC) protests the award of a contract to
Honeywell Information Systems (Honeywell) under request for proposals
(RFP) No. FGA-D1-XU319-N-8-13-85 issued by the General Services
Administration (GSA) for data communications equipment, including visual
display terminals, printers and modems. TEC argues that its proposal
generally satisfied the requirements of the RFP but, because GSA failed
to conduct adequate discussions with TEC, TEC's proposal was rejected as
being technically unacceptable. In addition, TEC complains that award
was made at a price 83 percent greater than TEC's offered price.
We dismiss the protest in part and deny it in part.
Proposals were received from TEC, Honeywell and Micro Research by the
closing date of August 13, 1985. The record shows that on August 15,
1985, GSA's technical team phoned TEC to clarify whether TEC's proposal
conformed to the minimum requirements outlined in the RFP. On August
16, TEC confirmed in writing its answers to questions raised by GSA the
previous day. TEC notified GSA that its offered terminals did not
comply with the RFP mandatory requirement for a 72 line vertical scroll.
On that date, TEC's proposal was evaluated as being technically
unacceptable due to its failure to comply with "mandatory requirement"
C.3.(a)(1)(f) of the RFP - 72 line vertical scroll on the display
terminals. Micro Research's equipment initially appeared to meet the
RFP's minimum requirements, but ultimately did not pass a benchmark
demonstration, and, therefore, was rejected as technically unacceptable.
Honeywell's equipment was determined to be technically acceptable.
Price negotiations were conducted with Honeywell and award was made to
that company on September 30.
TEC argues that it was improper for GSA to reject its proposal as
technically unacceptable without discussions concerning TEC's ability to
provide the required 72 line vertical scroll on its display terminals.
TEC contends that in any case the 72 line vertical scroll feature is not
essential to meet the government's minimum needs and that it was
included to eliminate competition, and that requiring this feature
resulted in a sole source award to Honeywell.
GSA states that both Honeywell and Micro Research submitted offers
which complied with the 72 line scroll requirement. Moreover, GSA
argues that TEC's contention, raised after the award to Honeywell, that
the 72 line scroll requirement exceeds the government's minimum needs
and, therefore, is unduly restrictive of competition is an allegation of
a solicitation impropriety which is untimely raised. GSA states that,
since the RFP clearly required terminals to have the 72 line vertical
scroll, it was incumbent upon TEC to protest this point prior to the
closing date for receipt of proposals. 4 C.F.R. Section 21.2( a)(1)
(1985). We agree.
Our Bid Protest Regulations require that protests based upon
solicitation improprieties which are apparent before the closing date
for receipt of proposals must be filed prior to that date. 4 C.F.R.
Section 21.2(a)(1). We view a protest that a requirement exceeds the
government's minimum needs, is unduly restrictive of competition, or
tends to create a sole-source procurement, to be a complaint against the
solicitation. See Julie Research Laboratories, Inc., B-219364, Aug. 23,
1985, 85-2 C.P.D. Paragraph 222; Unico, Inc., B-218950, July 29, 1985,
85-2 C.P.D. Paragraph 106. Therefore, TEC's protest against the
solicitation, filed after award, is untimely. 4 C.F.R. Section
21.2(a)(1); Unico, Inc., B-218950, supra.
TEC argues that it was given an insufficient opportunity to negotiate
the possibility of providing the 72 line vertical scroll capability. As
noted above, in response to a GSA inquiry on August 15, TEC admitted its
offer did not comply with this mandatory requirement. The record
further indicates that, in a conversation between a TEC representative
and GSA, on September 20 (10 days prior to award to Honeywell) TEC
indicated that the 72 line scroll capability could be provided in 3 to 6
months, and therefore was not available at the time. Although TEC
offered to deliver terminals without the 72 line scroll capability and
later add that feature at no additional cost, GSA determined that the
feature would be required immediately so that it could conduct a
benchmark test on the offered equipment, as provided for in the RFP.
Whether a proposal is technically acceptable is within the discretion
of the contracting agency and this Office will not disturb an agency's
decision to exclude an offeror from the competitive range unless that
determination is unreasonable. B & D Supply Co. of Arizona, Inc.,
B-210023, July 1, 1983, 83-2 C.P.D. Paragraph 50. When an agency
determines that a proposal is technically unacceptable, it is not
required to conduct discussions with the offeror. B & D Supply Co. of
Arizona, Inc., B-210023, supra. As discussed below, we cannot conclude
that GSA's determination that TEC's proposal was unacceptable was
unreasonable.
Although TEC argues that GSA should have conducted more detailed
discussions with it prior to rejecting the TEC offer as technically
unacceptable, TEC has not shown that any inadequacy in discussions
prejudiced it by depriving the firm of an opportunity for award. See
Employment Perspectives, B-218338, June 24, 1985, 85-1 C.P.D. Paragraph
715. TEC stated that it would take 3 to 6 months for it to provide the
required 72 line scroll capability and, therefore, it did not have
equipment available for benchmark testing and installation. The RFP
made it clear that the 72 line scroll requirement was essential and
mandatory and that failure to meet it would require rejection of a
proposal. Under these circumstances, we conclude that it was reasonable
for GSA to reject TEC's offer as technically unacceptable without any
additional discussions.
TEC also argues that its proposal was improperly rejected due to
TEC's failure to provide an RS-422 printer/terminal interface. GSA
states, however, that TEC's proposal to meet the interface requirement
was considered acceptable. We find that this factual question need not
be resolved here since TEC's offer was properly rejected for other
reasons, as stated above.
Finally, TEC contends that acceptance of its offer could save GSA
thousands of dollars. However, TEC's offered price is irrelevant here
because its offer properly was rejected as technically unacceptable.
Logistic Services International, Inc., B-218570, Aug. 15, 1985, 85-2 C.
P.D. Paragraph 173.
The protest is dismissed in part and denied in part.
Harry R. Van Cleve
General Counsel
FILE: B-220392; B-220392.2; 86-1 CPD 227 DATE: March 7, 1986
B-220392.3
MATTER OF: Libby Corporation, Lincoln Electric
Company; Miller Electric Mfg. Co.;
DIGEST:
Protest that design specifications for welding machines can be met by
only one producer and, therefore, unduly restrict competition are
without legal merit where the agency established that design
specifications are necessary to standardize nmilitary welding machines
and the protesters do not show that the agency's justification for
standardization is clearly unreasonable or that a different standard
design would increase the likelihood of competition.
Southwest Mobile Systems Corporation Protests that design
specifications for welding machines can be met by only one
producer and, therefore, unduly restrict competition are without
legal merit where the agency establishes that design
specifications are necessary to standardize military welding
machines and the protesters do not show that the agency's
justification for standardization is clearly unreasonable or that
a different standard design would increase the likelihood of
competition.
Four different firms, Libby Corporation, Lincoln Electric Company,
Miller Electric Mfg. Co., and Southwest Mobile Systems Corporation,
protest the specifications in invitation for bids (IFB) No.
DAAA09-8-B-0787, issued by the United States Army Armament, Munitions,
and Chemical Command, Rock Island, Illinois. The protesters argue that
only the Hobart Brothers Company can meet the specifications and,
therefore, the specifications unduly restrict competition. The Army has
postponed bid opening pending our decision.
We deny the protests.
The Army issued the IFB on June 21, 1985, for the 5-year acquisition
of 1,361 trailer-mounted welding shops 1/ and an additional single-year
acquisition of 91 welding machines. This procurement resulted from a
decision by the Army in 1978 to standardize welding shops and machines
in its inventory. In 1979, the agency surveyed commercially available
welding equipment and, in 1980, it sought offers for the production of
two prototype trailer-mounted welding shops, along with technical data
to be used in developing standard specifications for a welding shop and
machines. Of the firms involved in this protest, only Libby and Hobart
submitted technical proposals to design and manufacture the prototypes.
Libby subsequently withdrew from the competition, and Hobart, the only
remaining offeror, received the award. The Army reviewed and modified
the technical data supplied by Hobart, resulting in the military
specifications for a welding shop and welding machine included in the
current solicitation. Positions of the Parties
The protesters contend that the welding machine specifications
essentially describe a Hobart commercial product. They state that 90
percent of the drawings are of Hobart components--either detailed design
drawings or source-controlled drawings of parts available only from
Hobart or Hobart's suppliers. The protesters state that no welding
machine producer can compete with Hobart, since it would cost
approximately $3.6 million to retool a facility to produce the
Hobart-based machine. Consequently, they argue that, in effect, the Army
is conducting a sole-source procurement from Hobart in violation of the
requirement for agencies to obtain full and open competition contained
in the Competition in Contracting Act of 1984 (CICA), 10 U.S. C.A. Sec.
2304(a) (West Supp. 1985).
The protesters state that several commercial welding machinee can
meet the Army's needs, and that if the Army used performance
specifications instead of detailed design specifications in the current
procurement, the agency would save at least 20 percent because of
increased competition.
In response, the Army describes its efforts to standardize welding
shops and machines while obtaining as much competition as possible. It
states that it revised the drawings and specifications produced by
Hobart to open up tolerances, identify multiple sources, and use
government and industry standard specifications; in this regard, the
Army replaced approximately 150 Hobart parts numbers with military,
federal, or industry standard parts numbers. In addition, the Army
changed the thickness of materials selected for many sheet metal and
fabricated parts to match sizes generally stocked by steel warehouses,
and it reduced the original package of 1,800 drawings to 914.
The Army agrees with the protesters that despite this effort the
specifications require certain compenents either to be built in accord
with a Hobart design or purchased directly from Hobart. According to the
Army, however, no more than seven items with an estimated total cost of
about $1,000 would have to be purchased directly from Hobart in order to
meet the specifications. The Army estimates that these seven items
represent only about 3.7 percent of the total cost of a welding shop.
Moreover, the Army states that the closest Hobart commercial welder to
that described in the IFB lacks numerous features required by the
specifications; the Army lists many examples of such features in its
administrative report. In the agency's opinion, Hobart, like other
potential bidders, will have to make many changes to its commercial
welder before that product will be able to comply with the
specifications.
While the Army believes that its decision is justified by the need
for timely and efficient field support, it also believes that
standardization of design is a less expensive way of meeting that need
than competition based on performance specifications. The agency has
provided its estimate of additional costs that would be incurred each
time it purchased welding shops and machines based upon performance
specifications. These costs include $400,000 for a spare parts inventory
and $1.4 million for establishing and maintaining material stock numbers
for components. The Army estimates the total additional costs for each
type of welding machine procured to be $4.1 million.
GAO Analysis
Where, as here, protesters challenge specifications as being unduly
restrictive of competition and submit some support for that proposition,
the procuring agency must establish prima facie support for its position
that the restrictions it imposes are reasonably related to its needs.
Deere & Co., B-212203, Oct. 12, 1983, 83-2 C.P.D. P 456. This
requirement reflects the agency's obligation to create specifications
that permit full and open competition consistent with the agency's
actual needs. 10 U.S.C.A. Sec. 2305(a) (1). However, contracting
officials are familiar with the conditions under which the goods or
services have been used in the past and are in the best position to know
the government's actual needs. Therefore, if the agency provides the
necessary support for the specifications, the burden then shifts back to
the protester to show that the specifications are clearly unreasonable.
Bataco Industries, Inc., B-212847, Feb. 13, 1984, 84-1 C.P.D. P 179.
Specifications based upon a particular manufacturer's product are not
improper in and of themselves, and a protest alleging that
specifications were "written around" design features of a competitor's
product is without merit where the agency establishes that the
specifications are reasonably related to its minimum needs. Amray, Inc.,
B-208308, Jan. 17, 1983, 83-1 C.P.D. P 43.
There are many reasons why an agency's minimum needs impose some
restrictions on competition. One recognized need is to standardize the
equipment used by the agency. Julie Research Laboratories, Inc.,
B-199416, June 16, 1981, 81-1 C.P.D. P 493; Jazco Corp., B-193993, June
12, 1979, 79-1 C.P.D. P 411. Here, the Army has determined that its
welding needs require standardization, and the protesters have not shown
that determination to be unreasonable.
As the protesters point out, except for the welding machine engine,
welding equipment has a life expectancy of approximately 12 years. The
welding shops will be deployed throughout the world. Army personnel must
be trained in the use, maintenance, and repair of the equipment, and the
agency must publish and distribute maintenance and repair manuals. An
extensive spare parts inventory must be developed and maintained for
each type of welding machine purchased by the Army. The Army estimates
that with necessary testing, training, provisioning, etc., it requires 2
years and, as noted above, $4.1 million to place a new welding shop and
welding machine into field use.
The protesters argue that the Army has overestimated the effort
necessary to support an inventory of diverse welding machines. They
state that training costs are relatively low, that provisioning and
manual costs should be under $ 100,000, and that commercial parts for
many welding machines are readily available worldwide. One of the
protesters (Libby) obtained prices for welding machines from another
protester (Miller) and from Hobart. Based upon these quotations, Libby
contends that machines purchased from Hobart based upon the design
specifications will cost over $12 million more than machines purchased
competitively using performance specifications. The protesters'
disagreement with the Army about the savings to be achieved by
standardization is the essence of their protest. Mere disagreement,
however, does not establish that the agency's judgment is unreasonable.
Polyembrane Systems, Inc., B-213060, Mar. 27, 1984, 84-1 C.P.D. P 354.
The protesters' estimates of the relative costs of standardization are
unsupported and, therefore, speculative and do not meet their burden of
establishing that the use of design specifications exceeds the actual
needs of the Army.
We have no evidence that the Army intends to narrow the field of
competition or to favor Hobart specifically. The specifications in this
procurement grew out of a procurement in 1980 that was unrestricted, and
the protesters at that time had the opportunity to submit offers to
develop standard prototypes. Similarly, the specifications here do not
exclude any welding machine producer; no firm has claimed that it
cannot meet the specifications, only that Hobart has an advantage. See
Julie Research Laboratories, Inc., B-199416, supra, where, in a case
similar to this one, we upheld the Army's designation, following a
competitive procurement, of "required source" and "suggeeted source"
components because of a standardization requirement. Moreover, the
protesters have not suggested any way in which Hobart's claimed
advantage can be reduced short of using performance specifications, so
that different models of welding machines would be acceptable. In other
words, the protesters have not suggested that a different design would
increase competition, only that the Army should eliminate any design
requirements that prevent offerors from proposing a variety of slightly
modified commercial welding machines.
We conclude that the Army undertook to draft military specifications
that would permit full and open competition while standardizing the
welding shops and machines used by the military. The protesters have not
established that the decision to do so was unreesonable, or that
standardization can be achieved in any other manner that would increase
the likelihood of competition.
While we deny the protests, we note that whether the Army's 8-year
standardization effort will achieve the economies and full and open
competition sought will not be known until the current specifications
are used to procure welding machines. In view of the statutory
requirement for agencies to draft specifications that permit full and
open competition consistent with their actual needs, the Army has a duty
to monitor the results of its welding machine procurements to insure
that the current specifications are not restrictive.
The protests are denied.
Harry R. Van Cleve
General Counsel
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-220390.3 86-1 CPD 222 DATE: March 6, 1986
MATTER OF: Systematics, Inc.
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTOR
Protest against the agency's termination of a purchase order is
untimely where the protester did not file the protest in our
Office within 10 working days after it learned of the basis of
protest.
Systematics, Inc. (Systematics), protests the termination of a
purchase order for a mechanized movable shelving system awarded to it by
the Navai Underwater System Center (NUSC) under request for quotations
(RFQ) No. N66604-85-Q-F351. NUSC canceled the order because the award
process was deficient.
Prior to the closing date, two quoters, which included Systematics,
were advised during a site visit that they could submit alternative
designs to the RFQ's listed specifications using existing shelving.
Award was made to Systematics on the basis of its alternative design.
After a protest from Donnegan Systems, Inc. (Donnegan), NUSC determined
that award to Systematics was improper because the specifications did
not reflect its minimum needs, the RFQ was not properiy amended, and
quoters did not compete on an equal basis. Systematics contends that the
order should not have been canceied on the basis of the Donnegan
protest.
We dismiss the protest as untimely.
NUSC reports that Systematics had both oral and written notice of its
decision to terminate the order no later than December 17, 1985. In a
letter addressed to our Office dated December 10, 1985, which also was
sent to Systematics via Federal Express, NUSC advised our Office that
the Donnegan protest was moot because it intended to terminate the
purchase order to Systematics. Further, on December 17, 1985, NUSC
specifically advised Systematics by telephone of its decision to
terminate the order and the reason behind the termination, namely, the
Donnegan protest. Written confirmation of the decision, including copies
of the Donnegan protest and the termination order, was sent to
Systematics on December 20, 1985. Systematics protested the termination
by letter dated December 30, 1985, which was received by our Office on
January 3, 1986.
Under our regulations, a 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. Sec. 21.2(a)(2) (1985). Moreover,
our regulations provide that the term filed means receipt of the protest
submission in our Office. See 4 C.F.R. Sec. 21.2(b).
While Systematics argues that the order was not legally canceled
untii December 20, 1985, it is clear that it knew of the action by
December 17.
Since Systematics knew of the basis of protest on December 17, 1985,
and did not file its protest until January 3, 1986, we find the protest
untimely. See Brink Construction Co., B-219413, B-219413.2, July 11,
1985, 85-2 C.P.D. P 43.
The protest is dismissed.
Robert M. Strong
Deputy Associate General Counsel
FILE: B-220390 85-2 CPD CPD 521 DATE: November 4, 1985
MATTER OF: Stacor Corporation
DIGEST:
CONTRACTS - PROTESTS - INTERESTED PARTY REQUIREMENT - DIRECT INTEREST
CRITERION
Protester who did not bid is not an interested party under
GAO's Bid Protest Regulations because protester's interest as a
supplier to dealer who bid on IFB is too remote.
Stacor Corporation (Stacor) protests irregularities that allegedly
occurred in the award under invitation for bids (IFB) No.
N66604-85-Q-F351 issued by the Naval Underwater Systems Center, Newport,
Rhode Island, for a high density mobile storage system.
Stacor, a manufacturer of storage systems, did not bid on the IFB,
but protests that neither it nor its dealer, Donnegan Systems, which bid
on the IFB, was advised that bidders could utilize old shelving in
preparing their bids. Stacor alleges that the Navy's user office orally
advised Donnegan 1 day prior to bid opening that the use of old shelving
was a possibility. We dismiss the protest.
To be considered under our Bid Protest Regulations, a protest must be
filed by an interested party within the meaning described in our
Regulations. An interested party is defined as an actual or prospective
bidder or offeror whose direct economic interest would be affected by
the award of a contract or by the failure to award a contract. 4 C.F.R.
Sec. 21.0(a) (1985). Furthermore, our Office no longer considers
subcontractor protests except where the subcontract is by or for the
government. 4 C.F.R. Sec. 21.3(f) (10); Polycon Corporation, B-218304;
B-218305, May 17, 1985, 85-1 C.P.D. P 567.
In determining whether a protester is sufficiently interested so as
to permit our consideration, we examine the extent to which there exists
a direct relationship between the questions raised and the party's
asserted interest and the degree to which that interest is established.
Where there are intermediate parties that have a greater interest than
the protester, we have generally considered the protester to be too
remote to establish interest within the meaning of our Bid Protest
Regulations. See Don Strickland's Consultant and Advisory Service,
B-217178; B-217388, Feb. 5, 1985, 85-1 C.P.D. P 141.
Since Stacor did not submit a bid, it is not an actual or prospective
bidder, but solely a supplier, and its interest is too remote to have
the required direct economic interest in the outcome of the procurement.
Therefore, we will not consider the protest.
The protest is dismissed.
Robert M. Strong
Deputy Associate General Counsel
FILE: B-220388 85-2 CPD 500 DATE: October 31, 1985
MATTER OF: National Firehawk Foundation
DIGEST:
GENERAL ACCOUNTING OFFICE - JURISDICTION - COOPERATIVE AGREEMENTS
GAO generally does not review complaints regarding an agency's
decision not to enter into a cooperative agreement with the
complainant.
The National Firehawk Foundation (Firehawk) complains of the refusal
of the United States Fire Administration, Federal Emergency Management
Agency, to enter into a cooperative agreement with Firehawk to develop
community volunteer programs to prevent arson.
We generally do not review complaints concerning the award of
cooperative agreements, unless there is some showing that the agency is
using a cooperative agreement where a contract is required, or that a
conflict of interest exists. Innocept, Inc., B-208065, Sept. 13, 1983,
83-2 C.P.D. P 317. We limit our review because the awards of
cooperative agreements are not significantly controlled by statutes and
regulations having the force and effect of law, as are the awards of
procurement contracts, and our involvement therefore would result in
interference with the administration by executive branch agencies of
their financial assistance programs. Id.
Firehawk's complaint does not come within the limited scope of our
review of cooperative agreements. The complaint therefore is dismissed.
Robert M. Strong
Deputy Associate General Counsel
FILE: B-220387 85-2 CPD 556 DATE: November 14, 1985
MATTER OF: Harris Corporation RF Communications Division
DIGEST:
SMALL BUSINESS ADMINISTRATION - CONTRACTS - CONTRACTING WITH OTHER
GOVERNMENT AGENCIES - PROCUREMENT UNDER 8(A) PROGRAM - REVIEW BY GAO
GAO will not review a contracting agency's decision to satisfy
its requirement through a section 8 (a) subcontract when a
protester, arguing that the agency is acting in bad faith, fails
to proyide sufficient evidence indicating that agency may be
acting in bad faith.
The Harris Corporation, RF Communications Group, protests the Federal
Aviation Administration's decision to conduct a procurement under
section 8(a) of the Small Business Act, 15 U.S.C. Sec. 637(a) (1982).
Harris alleqes that in issuing request for technical proposals (RFTP)
No. DTFAOl-86-R-06409, the FAA is acting in had faith and using the 8(a)
program "to limit competition for major subcontracted items valued in
the millions of dollars."
We dismiss the protest.
The FAA issued the RFTP on September 24, 1985, to five 8(a) firms,
advising them that this procurement is part of the FAA's efforts to
fulfill the requirements of the National Radio Communications System--
avoice and data high frequency radio system that, upon completion, will
be installed at 45 sites around the world. The system will provide
essential communications for the National Airspace System during
emergencies when normal telecommunications may be interrupted. Among
other things, the solicitation requires that the successful 8(a) firm
supply such items as radio transceivers, voice encryptors, and adaptive
processors.
According to Harris, the FAA's main purpose in limiting this
procurement to 8(a) firms is to see that the radio equipment is
purchased from the Collins Communications Systems Division of Rockwell
International. In Harris' opinion, the specifications that the
successful 8(a) firm must use to subcontract for the required equipment
will restrict that firm to Collins-produced equipment. Although Harris
admits that the specifications state that the equipment can be Collins
"or equal," 1/ it argues that the use of the term "or equal" is merely
pro forma, because the specifications are written in such a way that
only Collquns can meet them. Harris further points out that it has
approached a number of the 8(a) firms involved in the project about
being their subcontractor for the equipment, but has found that none of
them are prepared to consider any supplier other than Collins.
In further support of its allegation of bad faith, Harris argues that
this is not the first time that the FAA has tried to restrict the
procurement of these particular items to just Collins. According to
Harris, the FAA issued a solicitation in July 1984 for identical radio
equipment, and the specifications were written to favor Collins. Harris
states that it requested the FAA either to delete certain
Collins-produced items from the requirement or supply them as
government-furnished-equipment because Collquns refused to sell those
items to any other offeror. In addition, Harris states that it was
forced to ask the FAA to furnish technical details on seven major
specification areas so that it could submit a compliant offer.
Apparently as a result of these requests, the FAA decided to cancel the
solicitation, but not without also promising to send Harris a copy of
any solicitation that it might issue in the future for identical or
similar equipment. However, Harris notes that it was in fact never
resolicited or even advised of the FAA decision to use the 8(a) program
to satisfy the requirement now being protested.
Under section 8(a) of the Small Business Act and implementing
regulations, 13 C.F.R. Sec. 124. 1-1 (1985), the Small Business
Administration (SBA) is authorized to enter into contracts with any
government agency with procuring authority and to arrange the
performance of such contracts by letting subcontracts to "socially and
economically disadvantaged" small business concerns. In the past, we
have recoqnized that section 8(a) authorizes a contractinq approach that
in general is not subject to the competitive and procedural requirements
of the procurement regulations and the statutory provisions they
implement. Advance, Inc., B-213002, Feb. 22, 1984, 84-1 C.P.D. P 218.
Recently, we held that the Competition in Contracting Act of 1984
(CICA), Pub. L. No. 98-369, 98 Stat. 1175 (1984), did not change the
established rules in this area. See, for example, Cassidy Cleaning,
Inc., B-218641, June 24, 1985, 85-1 C.P.D. P 717.2/ Therefore, as in the
past, our Off ice will not review the award of 8(a) subcontracts absent
a showing of possible fraud or bad faith on the part of government off
icials or that regulations may have been violated. 4 C. F.R. Sec.
21.3(f) (4) (1985); Advance, Inc., supra.
Harris has alleged bad faith on the part of FAA contracting officials
and specifically points to what it believes to be a pattern of favoring
Collins over other possible suppliers. However, the protester bears a
very heavy burden of proof when alleging bad f aith by government
officials. A finding of bad faith requires irrefutable proof that the
contracting off icer had a specif ic and malicious intent to injure the
protester. Prior procurement practices, inefficiency, or negligence do
not suffice to meet this high standard., Calplant Engineering Services,
Inc., et al. B-212734 et al., Sept. 29, 1983- C.P.D. P 391.
Harris has not furnished us with the degree of proof needed to invoke
our review on the basis of possible bad faith. In effect, Harris asks
us to infer bad faith from the FAA's past and present actions; however,
inference and supposition is not sufficient to meet the heavy burden of
proof in this area. See, for example, Prospect Associates Ltd.,
B-218602, June 17, 1985, 85-1 C.P.D. P 693.
Moreover, it does not appear from the solicitation that the 8 (a)
subcontractor is merely to procure the Collins radio equipment for FAA
use, serving, in effect, as a "pass through." Rather, the successful 8(
a) firm must install communications units at 45 sites in the nine FAA
reqions, furnishing control consoles, antennas, and protection devices.
In addition, it must provide logistical support, i.e., training,
maintenance, and spare parts.
Under the circumstances, then, we have no grounds for reviewing the
decision to award under the 8 (a) program. The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
1/ The specifications actually require eguipment that is
interoperable, compatible, and/or equal with existing Rockwell
equipment.
2/ This decision interprets those sections of CICA which amended the
Armed Services Procurement Act of 1947, 10 U.S.C.A. Sec. 2301 et seq.
(West Supp. 1985). We found that Congress did not intend section 8(a)
program awards to be affected by CICA. We reached this conclusion by
examining the relevant CICA language, the relevant language of the Small
Business and Federal Procurement Competition Enhancement Act of 1984,
Pub. L. No. 98-577, 98 Stat. 3086 (1984)--which amended the original
CICA amendments--and the legislative history of those two acts. The FAA
is subject to the Federal Property and Administrative Services Act of
1949, 41 U.S.C.A. Sec. 253 et seg. (West Supp. 1985), but the CICA
amendments to title 41, as well as the subsequent amendments made by
Pub. L. No. 98-577 to the CICA amendments affecting title 41, are
identical to those made to title 10. Therefore, our finding in Cassidy
Cleaning that CICA has no impact on the 8(a) program is applicable here
as well.
FILE: B-220386 86-1 CPD 16
DATE: January 8, 1986
MATTER OF: Arrowhead Construction, Inc.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTOR
1. Protest challenging contracting agency's decision, evident from
solicitation, not to publicly open bids in procurement using simplified
small purchase procedures is untimely, since protest was not filed
before date for submission of bids.
CONTRACTS - AWARDS - PROPRIETY - UPHELD - AMENDED IFB
2. Protest challenging contracting agency's decision to award a
contract to a firm which did not attend allegedly mandatory site visit
is timely where filed within 10 days after the protester was notified
that award would not be made to either of the only two bidders who had
attended the site visit.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
3. Agency properly could award contract to firm which did not attend
initial site visit as required by original solicitation since amendment
to solicitation providing for second site visit effectively superseded
requirement for attendance at initial site visit and, in any event, even
assuming the amended solicitation retained the site visit requirement, a
firm's failure to attend a site visit is not a valid basis to reject an
otherwise acceptable offer.
Arrowhead Construction, Inc., protests the rejection of its bid under
invitation for bids (IFB) No. N62477-85-B-2163, issued by the Navy for
installation of a paint booth at the Marine Corps Development and
Education Command, Quantico, Virginia. We dismiss the protest in part
and deny it in part.
The solicitation /1/ was issued on September 11, 1985, as a small
business set-aside using the simplified procurement procedures for small
purchases. See 10 U.S.C.A. Section 2304(g) (West Supp. 1985), as
amended by the Competition in Contracting Act of 1984; 15 U.S.C.
Section 644(j) (1982); Federal Acquisition Regulation (FAR), 48 C.F.R.
part 13 (1984). The solicitation provided that all prospective bidders
were required to attend a site visit to be held on September 26. The
solicitation also contained two provisions stating that the bids
received would be "privately opened." The protester and one other
potential bidder, Air Conditioning Services, attended the site visit on
September 26.
Amendment No. 1 to the solicitation was issued on September 27,
indefinitely postponing the date for submission of bids. Amendment No.
2 was issued on October 3, setting October 10 as the new bid opening
date and advising bidders that a site visit would be held on October 8.
The protester and the other firm which had attended the September 26
site visit also attended the site visit on October 8, along with two
other firms which had not attended the first site visit, Phillip C.
Clarke Electrical Contractors and another firm.
On October 10, bids were received from three firms, as follows:
The government estimate was $7,316.
The protester was notified that day that neither its bid nor the bid
submitted by Air Conditioning Services was the low bid; the contracting
official, however, did not advise the protester of the amount of the low
bid or the identity of the low bidder. The protester then sent a letter
dated October 14 to the Navy, calling it a "potential Protest of Award"
and raising certain improprieties the protester believed had taken place
in the procurement. The letter resulted in a meeting between the
protester and contracting officials on October 17. On October 24, the
protester filed its protest with our Office.
The protester challenges the propriety of the procurement on two
grounds, contending that it was improper (1) not. to hold a public bid
opening; and (2) to award a contract to a bidder who had not attended
the site visit on September 26. The Navy contends that both these
issues are untimely raised because the Navy's intentions not to open
bids publicly and to hold a second site visit were apparent before the
bid opening date from the solicitation and amendments. Accordingly, the
Navy argues, the protester was required to file its protest on these
grounds before bid opening. See Bid Protest Regulations, 4 C.F. R.
Section 21.2(a)(1) (1985).
We agree that the protest is untimely to the extent that it
challenges the Navy's failure to hold a public bid opening. The
solicitation twice states that bids would be opened "privately." As a
result, the protester was on notice of this alleged impropriety from the
face of the solicitation and was required to file its protest on this
ground before bid opening on October 10. 4 C.F.R. Section 21.2( a)(1).
Since the protest was not filed until October 24, it is untimely.
In any event, we find the protester's argument without merit. As a
preliminary matter, we note that the terminology used throughout the
solicitation is not uniform -- referring in different places to "sealed
bids," "quotes," and "proposals" -- and thus could have caused confusion
among participating firms regarding whether the Navy intended it as a
request for quotations, an IFB, or a request for proposals. In
addition, the solicitation cited a superseded statutory provision
authorizing the use of negotiated procedures for small purchases (10 U.
S.C. Section 2304(a)(3)) /2/ as the basis for the planned "private"
opening of bids.
Despite the poor drafting of the solicitation, however, it is clear
that the Navy properly could contract for installation of the paint
booth asing the simplified small purchase procedures, which apply to
purchases under $25,000. FAR, 48 C.F.R. Section 13.000. The FAR small
purchase procedures are intended to minimize the administrative cost
that otherwise might equal or exceed the cost of acquiring relatively
inexpensive items or services. See FAR, 48 C.F.R. Section 13.102;
Gradwell Co., Inc., B-216480, Feb. 8, 1985, 85-1 CPD Paragraph 166. In
contrast to other procurements, the small purchase procedures require
only that the procurement be conducted "to promote competition to the
maximum extent practicable." 10 U.S.C.A. Section 2304(g)(4); FAR, 48
C.F.R. Section 13.106(b). For purchases over $1,000, the contracting
officer must solicit quotations from a reasonable number of qualified
sources, taking into account the price and administrative cost of the
purchase. FAR, 48 C.F.R. Section 13.106(b). Quotations generally may
be solicited orally, FAR, 48 C.F.R. Section 13.106(b)(2), and there is
no requirement that the firms submitting quotations be advised of the
other quotations received. Thus, the fact that the Navy did not hold a
public "bid opening" was not improper. Further, the Navy complied with
the requirement for promoting competition to the maximum extent
practicable by soliciting and receiving quotations from three firms and
awarding the contract to the firm offering the lowest price.
With regard to the protester's second basis of protest -- the
propriety of making an award to a firm which did not attend the first
site visit -- we find this issue timely raised. While, as the Navy
argues, the Navy's plan to hold a second site visit was apparent from
amendment No. 2 to the solicitation, the protester was not on notice
that the Navy planned in effect to waive the requirement for attendance
at the first site visit until the protester was advised after bid
opening on October 10 that the Navy had rejected both its bid and the
bid from the only other firm which had attended both site visits. Since
the protest was filed on October 24, within 10 days after the protester
was put on notice on October 10, the protest on this ground is timely.
4 C.F.R. Section 21.2(a)(2).
We nevertheless find the protester's argument to be without merit.
First, in our view, the only reasonable interpretation of the provision
in amendment No. 2 announcing the second site visit is that it
superseded the site visit requirement in the original solicitation; we
see no reasonable basis on which the Navy could limit the procurement to
those firms which had attended the initial site visit, as the
protester's interpretation would require. In any event, a bidder's
failure to make a site visit, even where the solicitation so requires,
is not a valid basis on which to reject an otherwise responsive bid.
Edward Kocharian & Co., Inc., 58 Comp. Gen. 214 (1979), 79-1 CPD
Paragraph 20. Accordingly, even assuming that the solicitation
contained a mandatory site inspection provision, a firm's failure to
attend the site visit would not provide a basis on which to reject its
offer.
The protest is dismissed in part and denied in part.
Harry R. Van Cleve
General Counsel
(1) As discussed further later, the Navy's intention was to issue a
request for quotations using the FAR small purchase procedures. The
solicitation, however, was issued as an IFB. We will refer to it as the
"solicitation" and to the participating firms and their protations as
"bidders" and "bids."
(2) The current authority for the use of small purchase procedures is
10 U.S.C.A. Section 2304(g) (West Supp. 1985).
FILE: B-220385 86-1 CPD 104
DATE: January 29, 1986
MATTER OF: BDM Management Services Co.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - BEST AND FINAL -
EVALUATION - EVALUATION BY LESS THAN FULL PANEL
1. Protest that a member of the evaluation team was not present when
second best and final offers were reviewed has no merit since there is
no requirement that all members evaluate revised proposals and no bias
has been demonstrated.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
TECHNICAL ACCEPTABILITY - ADMNISTRATIVE DETERMINATION
2. Protest against evaluation of protester's technical proposal is
denied where review shows that the evaluation was reasonable and
followed the evaluation criteria.
CONTRACTS - NEGOTIATION - AWARDS - TO OTHER THAN LOW OFFEROR
3. Protest that protester should have received award because its
proposal was technically acceptable and low in cost is denied where the
procurement was negotiated, the solicitation provided that technical
factors were more important than cost, and the selecting official
reasonably determined that the awardee's superior technical proposal was
worth the higher cost.
BDM Management Services Company protests the award of a contract to
AMEX Systems Incorporated under request for proposals (RFP) No.
DAAH01-85-R-A836 issued by the United States Army Missile Command to
procure system operation and maintenance support for its National
Training Center Instrumentation System (NTC-IS).
We deny the protest.
The RFP was issued on April 26, 1985, and required offerors to
respond by June 14 in accordance with technical, management and cost
criteria. The Army received four proposals by the closing date and,
after evaluation, placed them all in the competitive range. Discussions
then were conducted, and all offerors were requested to submit best and
final offers by September 3. After reviewing the best and final offers,
however, the evaluation board determined that it needed additional
information to evaluate the offerors' costs. Discussions therefore were
reopened, and offerors were requested to specific questions by September
17 in further best and final offers.
The evaluation board then determined that AMEX's proposal was
superior, and recommended award to that firm; AMEX had received the
highest technical and management score and the highest combined
technical, management and cost score. The source selection official
reviewed the evaluation and agreed that the technical superiority of
AMEX's proposal was significant enough to outweigh the cost difference
between the AMEX and BDM offers, and therefore to justify an award to
AMEX. The contract was awarded to AMEX on October 23, following a
proposal debriefing.
BDM first protests that the proposal evaluation was unfair because
one of the persons who evaluated BDM's initial proposal and first best
and final offer was not present when the firm's second best and final
offer was evaluated. BDM believes that if this member had been present,
its technical proposal would have been rated higher. As evidenced by a
source selection board memo, however, discussions were reopened and
second best and final offers were requested to evaluate the cost
proposals, not to evaluate the technical proposals, and BDM responded in
that context. Inclusion of the member in question in the Army's review
of BDM's second best and final offer thus would not have changed the
results of the technical evaluation. In any event, except where there
is a question of bias, we have held that all members of a technical
evaluation team need not rescore offerors' revised proposals.
Vibra-Tech Engineers Inc., B-209541.2, May 23, 1983, 83-1 C.P.D.
Paragraph 550. Accordingly, this protest basis is denied.
BDM also protests that the Army's decision to award the contract to
AMEX at a cost 22.7 percent higher than BDM's cost was not justified.
BDM questions whether its technical proposal could have been evaluated
so much lower than AMEX's that the 22.7 percent cost difference would
not outweigh any technical differences in the proposals.
To the extent BDM is protesting that the evaluation of its technical
proposal was improper, it is not the function of our Office to evaluate
the proposals and make our own determinations. Proposal evaluation,
particularly concerning technical considerations, considerations, is
primarily a matter of judgment for the contracting officer. Our review
is limited to considering whether the evaluation was fair and reasonable
and in accordance with the stated criteria. Kelsey-Seybold Clinic,
P.A., B-217246, July 26, 1985, 85-2 C.P.D. Paragraph 90.
Here, the evaluation criteria, listed in section M of the RFP,
provided that proposals would be evaluated according to the adequacy
with which they responded to each listed area of consideration and
satisfied the statement of work. Three major areas for evaluation were
listed -- technical, management, and cost -- which were to be weighted
40 percent, 30 percent, and 30 percent, respectively. Under the
technical and management categories, evaluation subfactors were listed
in descending order of importance. The RFP further provided that the
award would be made to the offeror whose approach was most advantageous
to the government as determined according to the criteria.
We have reviewed the evaluation criteria and the Army's evaluation of
BDM's proposal. The Army found that although BDM's proposal was
technically acceptable, the offer was weak in a number of areas. For
example, the Army found that in logistics, the most important technical
subfactor, BDM incorrectly estimated the lines of code, did not
adequately address its assessment of the software to be supported, and
did not demonstrate that BDM adequately understood a cable consumption
problem. The agency also found that BDM's proposal did not demonstrate
that the firm fully understood the requirement for software maintenance.
Notably, while all these deficiences were pointed out to BDM during its
debriefing, BDM has not questioned them in the course of this protest.
Given these factors, we have no basis on which to find that the
evaluation of BDM's proposal was unreasonable. Airtronix, Inc.,
B-217087, Mar. 25, 1985, 85-1 C.P.D. Paragraph 345.
As to awarding to AMEX even though BDM's proposal was technically
acceptable and lower in cost, in negotiated procurements where
discussions are conducted there is no requirement that the award be
based on cost, but only that it be consistent with the evaluation scheme
in the solicitation. An agency therefore is free to award to a higher
priced, technically superior offeror where technical factors are more
important than cost if the lower prices are offest by the advantages of
the technically superior proposals. Martin Marietta Data Systems, et
al., B-216310, et al., Aug. 26, 1985, 85-2 C.P.D. Paragraph 228. Thus,
for example, under an evaluation scheme similiar to that used by the
Army, we have approved a contract award to the offeror that submitted a
technically superior offer where that offeror's cost proposal was 20
percent higher than that of the other offerors. Prison Health Services,
Inc., B-215613.2, Dec. 10, 1984, 84-2 C.P.D. Paragraph 643.
The present RFP, as noted, provided that technical factors were worth
40 percent and cost and management factors each were worth 30 percent.
A review of the evaluations shows that AMEX received substantially
higher technical and management scores than BDM received. As discussed
above, the Army found that BDM's proposal was technically acceptable,
but contained a number of deficiences, while AMEX's proposal was
technically superior. The Army found that AMEX's proposal showed in
depth knowledge of the NTC-IS, clearly reflected that AMEX knew the
system requirements and operational needs of the NTC-IS and, overall,
presented a negligible risk. The selecting official specifically
determined that the superiority of AMEX's technical proposal warranted
the higher price. Since that decision clearly was consistent with the
RFP's evaluation scheme, and since it is reasonably supported in the
record, we have no legal basis on which to object to the award to AMEX.
See Fairchild Weston Systems, Inc., B-218470, July 11, 1985, 85-2 C.P.D.
Paragraph 39.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220384 86-1 CPD 149
DATE: February 11, 1986
MATTER OF: Ametek, Straza Division
CONTRACTS - NEGOTIATION - AWARDS - TO OTHER THAN LOW OFFEROR
1. Agency decision to award to higher cost, technically superior
proposal is proper so long as it is consistent with stated evaluation
criteria and rationally based.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
TECHNICAL ACCEPTIBILITY - ADMINISTRATIVE DETERMINATION
2. Agency determination that offeror's lack of an existing software
package to operate with a particular computer is a technical weakness is
reasonable where the solicitation identified compatible software as
desirable and listed proven technology as an evaluation factor.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
REASONABLE
3. Agency's downgrading of proposal in which costs of developing
software are not specified is reasonable where the protester does not
indicate anywhere in its proposal that it intends to absorb such costs
itself.
Ametek, Straza Division, protests the award of a contract to RD
Instruments under request for proposals (RFP) No. WASC-85-00260 issued
by the National Oceanic and Atmospheric Administration (NOAA),
Department of Commerce. The solicitation called for an Acoustic Doppler
Current Profiler, a system that measures water velocity from a moving
ship through use of sonar echoes and provides data processing and
display.
We deny the protest.
The RFP, issued on August 5, 1985, was for a fixed-price contract for
one system, with an optional second system. It required a system
comprised of commercially available, off the shelf, hardware and stated
that the manufacturer must have manufactured this type of equipment and
demonstrated performance in actual field applications. The system was
to consist of, among other items, a data acquisition logging system with
software and display. The solicitation noted that it was "desirable"
that the data acquisition system and software be compatible with an
International Business Machines (IBM) PC/XT, and that it was "highly
desirable" that software be capable of real time, simultaneous data
acquisition, processing and display compatible with an IBM PC/XT with
floppy disk and/or streaming tape drive. The data acquisition system
was required to be capable of transferring data to an IBM PC/XT. The
solicitation also required hardware and software costs to be detailed
separately.
The RFP provided for evaluation of technical proposals in three
areas, in descending order of importance: (1) meets requirements; (2)
technical approach; and (3) proven technology. Price proposals were
evaluated separately on the basis of each offeror's total proposed price
as compared to other technically qualified offerors. Technical factors
were accorded a 60 percent total evaluation weight, and cost 40 percent.
The solicitation further stated that award would not necessarily be
made to the lowest priced offeror.
NOAA received proposals from two firms, Ametek and RD Instruments.
Of 1,500 available points, the committee evaluating the technical
proposals gave Ametek a score approximately 200 points less than RD
Instruments. Ametek received all the available points in the cost
evaluation. As a result, Ametek's final score was, out of a total of
2,500 points, 138 points lower than that of RD Instruments. The source
selection official determined that because the RD Instruments proposal
was technically superior and had received the higher overall point
score, award to that firm was in the best interest of the government.
Ametek alleges that NOAA did not follow the RFP selection criteria in
evaluating the technical aspects of its proposal and improperly awarded
the contract to an offeror with a higher proposed cost. Specifically,
Ametek challenges NOAA's determination with regard to Ametek's lack of
an existing software package to operate with the IBM PC/XT computer and
its failure to identify the cost of development of the software in its
cost breakdown. The protester also asserts that although NOAA awarded
the contract on September 30, the agency did not send Ametek a
debriefing letter detailing the reasons for its rejection until October
10, thereby preventing Ametek from protesting the award in time to stay
performance of the contract. Since Ametek did not file its protest
until October 23, NOAA had proceeded with performance.
Ametek now argues that the solicitation required off-the-shelf
hardware, not software, and that it was merely "desirable" that software
be IBM PC/XT compatible. The firm's offer was for off-the-shelf
hardware. Therefore, according to the protester, NOAA improperly
penalized it for not having an off-the-shelf software package. Ametek
states that it has had a working software package for some time, and
that this software merely requires translation into the IBM/PC format.
In addition, Ametek complains that it deliberately did not identify the
cost of development of the software because it intended to absorb these
costs, not pass them on to NOAA. Moreover, Ametek asserts that since
the contract was to be awarded on a fixed-price basis, NOAA should have
assumed its proposal was complete, rather than improperly penalizing it
for not allocating funds to development of the software package in its
cost proposal.
NOAA responds that the solicitation called for a field-tested,
off-the-shelf system with software compatible with the IBM PC/XT, which
Ametek admitted it had not yet developed, and that, consequently, proven
technology was the evaluation factor on which Ametek was weakest. NOAA
also points out that the RFP required a separate cost breakdown for
hardware and software and that Ametek's failure to articulate its
intention to absorb the cost of software development, combined with its
unrealistically low price for the data acquisition system hardware, and
by implication, software development, led the agency to question
Ametek's understanding of solicitation requirements.
In considering the propriety of NOAA's technical evaluation, our
function is not to evaluate the proposals anew and make our own
determinations as to their acceptability or relative merits. The
determination of the relative desirability of proposals, particularly
with respect to technical considerations, is primarily a matter for
judgment of the contracting officials. Skyways, Inc., B-201541, June 2,
1981, 81-1 CPD Paragraph 439. Our review of NOAA's technical evaluation
is limited to considering whether the evaluation was fair and reasonable
and consistent with the evaluation criteria set forth in the RFP. See
Deuel and Assocs., Inc., B-212962, Apr. 25, 1984, 84-1 CPD Paragraph
477.
The solicitation here clearly required a data acquisition system with
software and display that was capable of transferring data to an IBM
PC/XT. Ametek has not questioned the agency's statements that it
desired compatibility with the IBM PC/XT to assure the timely processing
of data and preferred a system that could do so simultaneously with data
acquisition. Of the three evaluation criteria, "proven technology," in
our opinion, revealed NOAA's intent to evaluate the scope and quality of
offerors' past experience with similar systems and equipment. The
procurement record demonstrates that the technical evaluation committee
scored Ametek's proposal 10, 13, and 20 percent lower, respectively, on
the evaluation factors "meets requirements," "technical approach," and
"proven technology." Ametek acknowledged in its proposal that it had yet
to develop the required software, and nowhere in its submission did it
refer to the cost of software development, either as a budgeted item or
as a "no cost" item. Accordingly, we find reasonable NOAA's view that
the combination of Ametek's lack of an existing IBM PC/XT compatible
software package and the conspicuous absence of funds for the
development of such software indicated a lack of understanding of the
scope and cost of the work involved.
Ametek also complains that NOAA improperly accepted an offer with a
higher cost than it proposed. We do not agree. NOAA's award to a
higher cost, higher technically rated offeror was consistent with the
evaluation criteria set forth in the RFP. In a negotiated procurement,
there is no requirement that award be made on the basis of lowest cost
unless the solicitation so provides. Henderson Aerial Surveys, Inc.,
B-215175, Feb. 6, 1985, 85-1 CPD Paragraph 145. The RFP here indicated
the relative importance of cost versus technical criteria and stated
that award was not necessarily to be made to the lowest priced offeror.
We have consistently upheld awards to offerors with higher technical
scores and higher costs, so long as the result is consistent with the
evaluation criteria and the procuring agency had determined that the
technical difference is sufficiently significant to outweigh the cost
difference. Kelsey-Seybold Clinic, P.A., B-217246, July 26, 1985, 85-2
CPD Paragraph 90.
In this case, the source selection official concluded that the higher
cost of the RD Instruments proposal resulted primarily from the
existence of compatible software, and that the performance of the
existing RD Instruments system in actual field applications justified
this higher cost, particularly since Ametek's proposal did not reflect
any software development costs. We do not find unreasonable his
conclusion that RD Instruments' proposal was the most advantageous to
the government.
In view of this conclusion, we need not consider Ametek's additional
protest issue regarding NOAA's alleged delay in sending the debriefing
letter and its decision to proceed with performance.
We deny the protest.
Harry R. Van Cleve
General Counsel
FILE: B-220382 85-2 CPD 499 DATE: October 31, 1985
MATTER OF: Dial One Interthermal
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
1. Protest based upon alleged improprieties in a solicitation
which are apparent prior to bid opening must be filed before that
time in order to be timely.
CONTRACTS - PROTESTS - CONTRACT ADMINISTRATION - NOT FOR RESOLUTION
BY GAO
2. Whether contractor will comply with contract terms during
performance is a matter of contract administration which GAO will
not consider.
Dial One Interthermal (Dial One) protests the award of a contract
under invitation for bids (IFB) No. F04607-85-B-0029 issued by the
Department of the Air Force for the maintenance and repair of
refrigeration systems at 11 Air Force bases. We dismiss the protest.
Dial One alleges that the IFB's design makes it impossible for a
small business bidder like Dial One to provide the required repair and
maintenance services without having to use subcontractors or authorized
dealers to cover the Air Force bases located outside the bidder's own
geographic area. According to Dial One, the use of subcontractors or
authorized dealers to perform the work is prohibited by the terms of the
IFB.
Under our Bid Protest Regulations, 4 C.F.R. Sec. 21.2(a) (1) (1985),
protests based upon alleged solicitation improprieties which are
apparent prior to bid opening must be filed before that time.
Consequently, to the extent Dial One's postaward protest concerns either
the IFB's geographic coverage or the IFB's alleged prohibition against
the use of subcontractors or authorized dealers, it is untimely and will
not be considered on the merits.
Dial One also alleges that it is the common practice of the awarded
contractor to use subcontractors or authorized dealers to perform the
type of work described by the solicitation. An allegation that the
awardee's performance may violate a contract term such as the provision
limiting subcontracting is a matter of contract administration which is
not for our consideration. See Hayes International Corp., B-218301.2,
June 11, 1985, 85-1 C.P.D. P 667.
Finally, Dial One asserts that the line item bids for initial
repairs, a component of the contract work, should have been minimal in
view of the IFB's stated requirements and notes that the bids received
by the Air Force nevertheless ranged from $2,000 to $116,000 for initial
repairs. Dial Dne protests that the IFB at least should have contained a
requirement that a bidder provide a material price list to justify the
amount bid for initial repairs. We dismiss this protest ground,
however, since our Regulations, as noted above, require a protest
against alleged apparent solicitation improprieties to be filed prior to
bid opening.
Dial One's protest is dismissed.
Robert M. Strong
Deputy Associate General Counsel
B-220381.2 June 3, 1986
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE FUNCTION - SCOPE OF
REVIEW OF AGENCY ACTIONS
The General Accounting Office (GAO) advises a member of Congress that
issues about bid protest procedures raised by an unsuccessful protester
do not warrant legislative consideration. GAO states that (1) its
review function is properly limited to determining whether agency
officials have violated applicable statutes and regulations; (2) its
timeliness rules for initiating a protest appear to be reasonable and
equitable; (3) and basing protest decisions on confidential information
would not adequately protect the rights and interests of all the
parties.
The Honorable William L. Armstrong
United States Senator
311 Steele Street
Denver, Colorado 80206
Dear Senator Armstrong:
This is in response to the letter of March 21, 1986 from your Staff
Assistant, Joann L. Gelvin, requesting our views on concerns about our
bid protest procedures expressed in correspondence from Mr. Don T.
Moore, president of Power Line Models, Inc. Ms. Gelvin also expressed
your interest in whether legislation might be helpful with respect to
matters raised by Mr. Moore.
Mr. Moore's firm recently protested to our Office concerning the
Department of Energy's selection of Uhl and Lopez Engineers, Inc. for
work at the Los Alamos National Laboratory, Los Alamos, New Mexico. The
protest raised essentially three issues. Power Line Models believed
that its proposal was unfairly evaluated, that the agency's evaluation
panel was biased, and that a potential conflict of interest arose when
the awardee was acquired by another contractor for the Department of
Energy.
We reviewed the procurement record and concluded that there was a
reasonable basis for selection of Uhl and Lopez. Both firms' proposals
were considered to be excellent, and they tied in the total number of
points awarded. Since two out of three evaluation panel members had
ranked Uhl and Lopez first, the panel recommended that firm for
selection. We also concluded that Power Line Models was merely
speculating regarding bias on the part of the evaluation panel, and we
found no evidence of a potential conflict of interest. As a result of
these findings, we denied the protest.
Based on the experience of Power Line Models in this recent protest,
Mr. Moore believes that our bid protest procedures do not provide a
satisfactory means of ensuring compliance with the procurement laws and
regulations. He suggests that several aspects of our procedures should
be revised. We address each of his concerns below. Burden of Proof
Mr. Moore states that in a bid protest proceeding, the burden of
proof is on the protester, and that the General Accounting Office (GAO)
will not "second guess" an agency's selection decision. He contends
that GAO's review standard prevents "valid" protests from being
sustained. It is true that protesters bear the burden of establishing
their cases, in the sense that GAO will not substitute its preference in
matters that are primarily reserved for the judgment of an agency, so
long as the agency did not violate the law or otherwise abuse its
discretion. On the other hand, as discussed below, when the protester
and the agency differ with respect to an issue of fact, we accept the
version that is more likely in light of evidence in the record.
When issues involving the exercise of discretion by a contracting
agency are raised, we review the agency action to determine whether it
lacks a reasonable basis, so as to be regarded as arbitrary and
capricious. Wickman Spacecraft & Propulsion Co., B-219675, Dec. 20,
1985, 85-2 CPD P 690. The same standard of review is used by the United
States Claims Court and the federal district courts in considering
lawsuits that are similar to bid protests in the sense that they are
brought by disappointed bidders or offerors seeking declaratory and
injunctive relief against agency contracting decisions. See Drexel
Heritage Furnishings, Inc. v. United States, 7 Cl. Ct. 134, 142 (1984);
Princeton Combustion Research Laboratories, Inc. v. McCarthy, 674 F.2d
1016, 1021-1022 (3d Cir. 1982); M. Steinthal and Co. v. Seamans, 455
F.2d 1289, 1300-1302 (D.C. Cir. 1971).
This standard recognizes that the contracting agency, not GAO or any
other reviewing body, is responsible for its procurement actions. It is
not, nor should it be, our function to "second guess" a decision that is
within an agency's legal discretion. For example, in connection with
its protest, Power Line Models wanted our Office to reevaluate the
technical merits of the proposals. If we had been the procuring agency,
we might have rated the two offerors higher on some criteria or lower on
others--the evaluators themselves differed regarding the relative
strength and weaknesses of the firms. Our function, however, was
properly limited to determining if agency officials acted unreasonably
or otherwise violated applicable statutes and regulations. In Power
Line Models case, the two competitors were exceedingly closely ranked,
and we could not conclude that the technical evaluations and the
selection of Uhl and Lopez were unreasonable.
With respect to disputed questions of fact, we do not assume that an
agency's presentation is correct. On the contrary, where there is a
conflict hetween the protester's and the agency's versions of the facts,
we will accept the protester's version if the evidence in the record
supports the protester's assertions over the agency's. See, e. g.,
Price Waterhouse--Reconsideration, B-220049.2, Apr. 7, 1986, 86-1 CPD P
(GAO accepted the protester's account of discussions with the agency):
CoMont Inc., B-219730, Nov. 14, 1985, 65 Comp. Gen. , 85-2 CPD P 555
(GAO accepted the protester's statement that it was not orally advised
of a change in a solicitation); Automated Datatron, Inc., et al.,
B-215399 et al., Dec. 26, 1984, 84-2 CPD P 700 (GAO accepted the
protester's assertion that an irregularity in its proposal was the fault
of the agency).
Mr. Moore's contention that our standard of review forecloses the
ability of protesters to prevail is not borne out by the record.
Enclosed is a copy of our report to the Congress regarding bid protests
in fiscal year 1985. Enclosure G to the report summarizies sustained
cases and others in which corrective action was recommended.
Our Bid Protest Regulations, 4 C.F.R. Sec. 21.2(a)(2) (1985),
generally require a protest to be filed within 10 working days after the
basis for the protest is known. Mr. Moore is concerned about the
difficulty of obtaining evidence in that 2 week period.
We believe that the 10-working day rule is reasonable and equitable.
It does not begin to run in the first instance until the protester has
evidence upon which to base its protest, i.e., more than mere suspicion
or rumor. Moreover, our regulations do not preclude the protester from
submitting additional information in a timely manner after a protest is
filed. For example, we recently reconsidered a decision denying a
protest and sustained the protest based upon information discovered by
the protester after we issued our initial decision. Pacific Sky Supply,
Inc.--Reconsideration, B-219749.2, Apr. 2, 1986, 65 Comp. Gen. , 86-1
CPD P . Also, often the information that a protester wishes us to
consider is included in the procuring agency's administrative report,
and need not be separately obtained and filed by the protester.
Our 10-working day rule represents an effort to balance the needs of
the protester for time to prepare its case and the needs of parties to
obtain a final resolution of the dispute as quickly as possible.
Raising a legal objection to the award of a government contract is a
serious matter. At stake are not only the rights and interests of the
protester, but those of other interested parties, often including an
intended or actual awardee of a contract, as well as the contracting
agency. Effective and equitable procedures are necessary so that
parties have a fair opportunity to present their cases and protests can
be resolved in a reasonably speedy manner. See Cessna Aircraft Co. et
al., 54 Comp. Gen. 97 (1974), 74-2 CPD P 91. In the past we have
revised our timeliness rule for initiating protests when we believed
that it did not accomplish these goals. See 40 fed. Reg. 17979 (1975)
(extending the period for filing a protest from 5 to 10 working days).
The current rule does not, however, appear to be unreasonable or be
inequitable.
Mr. Moore's final concern involves the risk to employees of the
procuring agency that is inherent in submitting information to the GAO
in support of a protest (presumably in the nature of potential
retribution by others in the agency). He advocates that we interview
agency personnel individually so that they can submit information
confidentially.
Possible reprisals for agency "whistle-blowers" cannot be
satisfactorily addressed in the context of an adversarial forum such as
our bid protest proceedings. Our procedures are designed to provide an
opportunity for all interested parties to address the legal issues and
facts raised in a protest to the extent permitted by law and regulation.
The Congress emphasized the importance of this policy in the
Competition in Contracting Act of 1984, 31 U.S.C.A. Sec. 3553(f) (West
Supp. 1985), by requiring procuring agencies to disclose all documents
relevant to a protest that would not give a party a competitive
advantage and that the party is otherwise authorized to receive.
The proposal by Mr. Moore that we consider, as a basis for decision,
the testimony of an individual-- without disclosing the individual's
identity or, in order to prevent disclosure of his identity, the
testimony itself--raises substantial questions of fairness to the other
parties involved. We do not believe that our consideration of evidence
provided by one party on a confidential basis--except as may be
necessary because of applicable law or regulation--would adequately
protect the rights and interests of the other parties to the protest.
While we cannot accept evidence secretly, if a government employee
confidentially discloses to a protester facts that can be established
through means other than his own testimony and the protester asserts
those facts, we will of course consider them to the extent they are
supported by evidence in the record.
The Congress recently codified our bid protest authority in the
Competition in Contracting Act of 1984. We are currently reviewing our
regulations and practices based on our first year of experience under
the act to determine whether changes in our regulations may be
justified. While we do not currently envision any changes that relate to
the concerns expressed by Mr. Moore, we will consider his corresoondence
during the course of that review. Further, at this time, we do not
believe any legislative consideration with respect to Mr. Moore's
concerns is warranted.
We trust that this letter responds to your interest in the matters
raised by Mr. Moore.
Sincerely yours,
Harry R. Van Cleve
General Counsel
Enclosure
FILE: B-220381 86-1 CPD 208 DATE: February 28, 1986
MATTER OF: Power Line Models, Inc.
DIGEST:
CONTRACTS - PROTESTS - ALLEGATIONS - BIAS - UNSUBSTANTIATED
1. Protester has the burden of proving bias on the part of
agency evaluators, and the General Accounting Office will not
attribute unfair or are judicial motives on the basis of inference
or supposition.
CONTRACTS - CONFLICTS OF INTEREST - PROHIBITIONS - GENERALLY
2. Protest that pre-award acquisition of offeror by another
firm performing work for the procuring agency established an
organizational conflict of interest is without merit where the
acquiring firm had no involvement in the development of the
project being procured, so as to gain an unfair competitive
advantage, and was not otherwise prohibited from seeking and
performing the contract.
CONTRACTS - ARCHITECT, ENGINEERING, ETC. SERVICES - PROCUREMENT
PRACTICES - EVALUATION OF COMPETITORS - APPLICATION OF STANDARD
3. The determination of the relative merits of offerors
competing for architect-engineer services is primarily the
responsibility of the procuring agency, and the determination and
award decision will not be disturbed unless it is arbitrary or in
violation of Procurement laws and regulations.
Power Line Models, Inc. protests the Department of Energy's selection
of Uhl and Lopez Engineers, Inc. to perform engineering services in
connection with the upgrade and expansion of an electricgl power
distribution system for the Los Alamos National Laboratory, Los Alamos,
New Mexico. The protester alleges that there were a number of
irregularities in the procurement.
We deny the protest.
On July 13, 1985, the Department of Energy published in the Commerce
Business Daily (CBD) a request for expressions of interest from
engineering firms to perform investigations, studies, recommendations,
design activities, and inspection during the construction phase of a
restoration project for the Los Alamos power distribution system. The
procurement was conducted under special procedures prescribed in the
Brooks Act for the acquisition of architectengineer services. See 40 U.
S.C. Secs. 541-54 (1982); Federal Acquisition Regulation (FAR) part 36
(FAC 84-5, Apr. 1, 1985). The CBD announcement stated that selection for
negotiation and award would be based upon the following three criteria,
listed in order of importance: (1) the firm (experience and technical
competence in comparable work, success in meeting design schedules and
estimating construction bid costs, and proposed project organization,
delegation of authority, and assignment of responsibility); (2) the
design team (proven capabilities in the field of electrical power
distribution, and experience, technical expertise, and demonstrated
competence in planning, design, testing, and inspection of complex
electrical power distribution systems): and (3) project management (the
experience and qualification of the project manager, and experience and
management planning capability for similarly complex projects).
Nine firms submitted expressions of interest by the August 16
deadline, and the Department of Energy selected four for discussions.
On October 7, the agency announced its selection of Uhl and Lopez for
negotiation in accord with FAR, Sec. 36.606. This protest followed; the
Department of Energy has delayed award pending its resolution. Biased
Evaluation Panel
Power Line Models first questions whether Uhl and Lopez had an unfair
advantage because of a prior relationship with the contracting office
and the members of the evaluation panel. The procurement record
establishes that the Department of Energy Los Alamos Area Office
originally planned for the work to be performed under an existing
contract with the Burns and Peters Group, with Uhl and Lopez
participating as a subcontractor. The office reversed this decision
after determining that the work was outside the scope of the Burns and
Peters contract and that a solesource award could not be justified. The
agency acknowledges, however, that during the 6-month period before
public announcement of the procurement, representatives of Uhl and Lopez
met with Department of Energy officials on at least three occasions to
discuss the firm's qualifications and interest in the Los Alamos
project.
The protester believes that it is unusual for the agency to hold
three meetings with a prospective contractor and states that after the
procurement was announced in the CBD, the Department of Energy denied
its own request for a site visit because of staff limitations and the
necessity of extending a similar opportunity to all interested firms.
Power Line Models also argues that a fair selection could not be made by
a panel including individuals who participated in the agency's plans to
negotiate a sole-source contract that would have been contrary to
provisions of the Competition in Contracting Act of 1984, 41 U.S.C.A.
Sec. 253 (West Supp. 1985).
Protesters have the burden of proving bias on the part of selection
officials, and we will not attribute unfair or prejudicial motives to
those officials on the basis of inference or supposition. Reliability
Sciences, Inc., B-205754.2, June 7, 1983, 83-1 C.P.D. P 612. While three
meetings with an interested firm to discuss a planned project may be
unusual, the agency lists nearly a dozen engineering firms that visited
the Los Alamos Area Office to discuss forthcoming work during the period
in question here. We cannot say that the opportunities extended to Uhl
and Lopez evidenced bias or constituted an impropriety on the part of
the agency. See Kelsey-Seybold Clinic, P.A., B-217246, July 26, 1985,
85-2 C.P.D. P 90. Moreover, it is reasonable for agencies to restrict
meetings with interested firms after a procurement has been announced in
order to ensure that all prospective offerors are treated equally. We
also do not believe that the role of selection panel members in the
agency's initial consideration of having the work performed under an
existing contract establishes bias in this new procurement. The
protester's contention in this regard is mere speculation.
Organizational Conflict of Interest
The protester's second ground for protest concerns the acquisition of
Uhl and Lopez by another architect-engineer firm, Holmes and Narver,
Inc., which occurred on or about October 8, 1985. (Holmes and Narver
performs work at the Los Alamos National Laboratory under a subcontract
with the University of California. Power Line Models believes that a
potential conflict of interest exists because Uhl and Lopez may have
gained access to information not available to other competitors.
After Department of Energy selection officials learned of the Uhl and
Lopez acquisition, the agency investigated whether the subcontract under
which Holmes and Narver worked at Los Alamos prohibited it from
competing for the protested procurement. The agency also undertook to
find out if the firm had participated in the developmental phase of the
project in question and would have an unfair competitive advantage in
follow-on work. She procurement record contains memoranda by the project
engineer and the technical advisor to the selection panel, both of whom
state that Holmes and Narver played no role in development of the
current project. The Holmes and Narver subcontract only prohibits the
firm from competing for follow-on services for work performed at Los
Alamos under the University of California contract. Based upon this
evidence, the chairman of the evaluation panel found that the
acquisition of Uhl and Lopez by Holmes and Narver placed no bar upon the
agency's contracting with the former in this case.
We agree. The mere fact of a prior or current contractual
relationship does not in itself create an organizational conflict of
interest. See Information Ventures, Inc., et al., B-219989 et al., Dec.
16, 1985, 85-2 C.P.D. P 668. Such a conflict exists where the nature of
the work to be performed under a contract may, without some restriction
on future activities, result in an unfair competitive advantage to the
contractor. FAR, 48 C.F.R. Sec. 9.501. We do not find that the
acquisition of Uhl and Lopez created a potential organizational conflict
of interest. Moreover, the Department of Energy has no obligation to
equalize any competitive advantage that Uhl and Lopez may have gained
through a previous relationship with Holmes and Narver that resulted in
the acquisition. Advantages resulting from a firm's own particular
business circumstances are not unfair unless they result from a
preference by the contracting agency. See Information Ventures, Inc. et
al., supra. We find no evidence of either a competitive advantage
received by Uhl and Lopez or preference in the agency's consideration of
the firm. Evaluation
Power Line Models also contends that the selection of Uhl and Lopez
was not based upon the evaluation criteria listed in the CBD
announcement. Specifically, the protester believes that its own
qualifications and experience in electric power engineering such as will
be required under this contract far exceed those of Uhl and Lopez.
Power Line Models also believes it was improperly downgraded for a lack
of extensive prior work for the government and for its relatively small
size. The protester argues that it has more specialists in electric
power engineering comprising its design staff than does Uhl and Lopez.
In reviewing protests about an agency's selection of a contractor for
architect-engineer services, our function is not to reevaluate the
offeror's experience and capabilities or to make our own determination
about the relative merits of competing firms. Rather, our review is
limited to determining whether the agency's selection was reasonable,
rather than arbitrary, and in accord with applicable statutes and
regulations. See Y.T. Huang & Assoc., Inc., B-217122 et al., Feb. 21,
1985, 85-1 C.P.D. P 220. Additionally, the protester bears the burden of
affirmatively proving its case, and the fact that a protester does not
agree with an agency's evaluation does not render the evaluation
unreasonable.
We have reviewed the procurement record, including the scoring sheets
for each member of the evaluation panel. While the evaluators differed
regarding the relative strengths and weaknesses of the competing firms,
we cannot say that the selection of Uhl and Lopez had no reasonable
basis. Power Line Models and Uhl and Lopez tied in total number of
points awarded, and evaluators considered both their design teams and
project management to have excellent qualifications. Since two out of
three voting evaluation panel members ranked Uhl and Lopez first,
however, the panel recommended that firm for selection.
The record shows that evaluators considered the size of Power Line
Models' staff and the relative size of comparable projects previously
undertaken by the firm to be minor weaknesses. While reasonable
arguments can be made about this view, we cannot conclude that the final
selection here was contrary to the evaluation criteria, arbitrary, or in
violation of any statute or regulation. Tne procurement record does not
reflect any concern by evaluators about the relative amount of past work
for the government, as opposed to commercial projects, by Power Line
Models.
Finally, in its response to the agency report, the protester states
that it learned that Uhl and Lopez contracted with an electrical
engineer to conduct power system analyses relative to the Los Alamos
project, using the facilities of a private utility, and "unofficially"
provided the results to the Department of Energy. The protester states
that this is evidence of a lack of expertise and capability by Uhl and
Lopez, and would further have biased the evaluation panel because of the
familiarity of Uhl and Lopez with the project. We do not agree that, if
Uhl and Lopez sought independent analyses regarding the contract work,
this necessarily establishes that the firm should have been rated lower
that Power Line Models, and, as stated above, we find no evidence of
bias in the evaluation record.
We deny the protest.
Harry R. Van Cleve
General Counsel
FILE: B-220380 85-2 CPD 506 DATE: November 1, 1985
MATTER OF: Mechanical Equipment Company, Inc.
DIGEST:
BIDS - RESPONSIVENESS - EXCEPTION TAKEN TO INVITATION TERMS - SMALL
BUSINESS REQUIREMENTS
1. Bid on total small business set-aside which indicates in the
appropriate block that not all supplies to be furnished will be
the product of a small business concern is not responsive and may
not be considered for award because bidder would be free to
furnish supplies from a large business and thus defeat the purpose
of the set-aside.
BIDS - RESPONSIVENESS - DETERMINATION- ON BASIS OF BID AS SUBMITTED
AT BID OPENING
2. Bid on total small business set-aside rejected as
nonresponsive because bidder indicated that not all supplies to be
furnished will be the product of a small business concern may not
be cured or defect waived as a minor informality since respon-
siveness must be determined from material available at bid opening
and postooening explanations cannot be considered to correct a
nonresponsive bid.
Mechanical Equipment Company, Inc. (MECO) protests the rejection of
its bid under invitation for bids (IFB) No. N00104-85-B-0933 issued by
the Department of the Navy as a total small business set-aside. MECO's
bid was rejected as nonresponsive because it indicated that not all
supplies to be furnished would be manufactured by a small business.
We deny the protest. We do so without obtaining a report from the
contracting agency, since it is clear from the information furnished by
MECO that the protest is without merit. 4 C.F.R. Sec. 21.3(f) (1985).
The IFB contained the standard Small Business Concern Representation
set forth in the Federal Acquisition Regulation (FAR), 48 C.F.R. Sec.
52.219-1 (1984). MECO indicated in that representation that it was a
small business concern but that "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." As a result, the Navy rejected
the bid as nonresponsive.
MECO argues that its bid is responsive since the Notice of Small
Business Set-Aside, 48 C.F.R. Sec. 52.219-6, requires manufacturers to
provide end items manufactured by small business concerns and MECO
submitted its bid with this provision being applicable. Also, MECO
argues that the Small Business Representation clause is ambiguous and
that MECO mistakenly interpreted the words "all supplies" to include all
raw materials and components which would be purchased to complete the
contract. MECO asserts that the ambiguity should be resolved in its
favor and its misinterpretation should be waived or corrected.
While we have held that the failure to complete the small business
size status portion of the representation is a waivable minor
informality, Extinguisher Service, Inc., B-214354, June 14, 1984, 84-1
C.P.D. P 629, we have distinguished this from the second portion of the
representation which concerns a matter of responsiveness because it
involves an obligation to provide supplies manufactured by a small
business concern, a key element of a small business set-aside for
supplies. If a bid on a small business set-aside fails to establish the
legal obligation of the bidder to furnish supplies manufactured or
produced by a small business, the bid is nonresponsive and must be
rejected. See Mauntaineer Leathers, Inc., B-218453, May 6, 1985, 85-1
C.P.D. P 505, and decisions cited therein. Here, despite MECO's
representations elsewhere in its bid, MECO also represented that not all
the supplies it furnished would be the products of a small business
concern. As such, MECO's bid does not legallv obligate the contractor
to furnish small business products consistent with the set-aside, but
rather creates an ambiguity which requires rejection of the bid. Polan
Industries, B-218720.2, May 30, 1985, 85-1 C.P.D. P 617; ATD-America,
Co., B-217290, Jan. 23, 1985, 85-1 C.P.D. P 91.
Further, postopening explanations cannot be used to waive the
objectionable certification, or otherwise to correct a nonresponsive
bid, even where the government could obtain a lower price by accepting
the corrected bid. Basic Marine, Inc., B-215236, June 5, 1984, 84-1 C.
P.D. P 603; Mechanical Mirror Works, Inc., B-210750.2, act. 20, 1983,
83-2 C.P.D. P 467. Accordingly, since MECO's intent to supply items
manufactured by a small business concern was not clearly ascertainable
from the face of the bid, the contracting officer properly rejected the
bid as nonresponsive.
MECO's assertion that it misinterpreted the Small Business Concern
Representation clause used in the solicitation due to the ambiguity of
that clause does not provide a basis for accepting MECO's bid. This
same assertion was considered and rejected as a basis for protest in
Mountaineer Leathers, Inc., B-218453, supra, where we stated as follows:
"... Although the law in this situation is well-settled and
does not provide a basis for accepting Mountaineer's bid, there
have been a number of recent cases, such as those cited throughout
this decision--in which bidders have alleged that they submitted
nonresponsive bids through misinterpreting the Small Business
Concern Representation clause (Federal Acquisition Regulation
(FAR), 48 C.F.R. Sec. 52.219-1 (1984)). We are, therefore, by
letters of today, expressing our concern to the FAR Secretariat
and to the Administrator, Small Business Administration, that this
may be an appropriate matter for review and consideration of
clarifying changes to the wording of the Small Business Concern
Representation clause."
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220378.2 86-1 CPD 325 DATE: April 4, 1986
MATTER OF: Associates for Research and Training,
Inc.--Request for Reconsideration
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
RECONSIDERATION REQUESTS - ERROR OF FACT OR LAW - NOT ESTABLISHED
Decision which held that protest was rendered academic when the
agency advised that funding for requirement was unavailable is
denied on reconsideration where the agency rebuts the protester's
allegations that the requirements were obtained through other
means or that the funding determination was improper.
Associates for Research and Training, Inc. (Associates), requests
reconsideration of our decision in Associates for Research and Training,
Inc., B-220378, Jan. 17, 1986, 86-1 C.P.D. P 59, in which we dismissed
Associates' protest against the cancellation of request for proposals
(RFP) No. N00600-85-R-1135, a total small business set-aside, issued by
the Naval Regional Contracting Center (Navy), Washington, D. C., for a
manager training program.
In its initial protest, Associates alleged that its proposal was
improperly rejected as technically unacceptable and the solicitation was
improperly canceled because no acceptable proposals were received.
However, in light of the Navy advising that it had no plans to resolicit
because funding for the requirement was unavailable, we dismissed the
protest as academic. We found that no useful purpose would have been
served by issuing a decision where the protester would not gain a
remedy. Moreover, we concluded that even if the original decision to
cancel, no acceptable proposals, was improper, the lack of funding was
an appropriate basis to support the cancellation.
In its request for reconsideration, Associates requests that we
consider the protest on the merits because it believes that the Navy's
determination that no funds were available for the procurement was
improper. It alleges that the Navy granted authorization for students
to obtain training from a source not involved in the initial competition
and thereby did indirectly that which it supposedly had no funding to do
directly.
The Navy has advised that the 1985 requirement was canceled in total
and that two-thirds of the 1986 training budget was canceled and the
availability of the remaining one-third is questionable. The Navy
further advised that no training has been requested from any other
agencies, that no authorization has been granted to any students to
obtain training on their own, and that currently there are no funds to
procure for any 1986 requirements on any basis, competitively or
otherwise.
In view of the Navy's response, Associates' request for
reconsideration is denied as it does not show any errors of fact or law,
which warrant reversal of that decision. 4.C.F.R. Sec. 21.12(a) (1985).
Harry R. Van Cleve
General Counsel
FILE: B-220378 86-1 CPD 59
DATE: January 17, 1986
MATTER OF: Associates for Research and Training, Inc.
CONTRACTS - PROTESTS - MOOT, ACADEMIC, ETC. QUESTIONS - SOLICITATION
CANCELED
Allegation that the Navy improperly rejected protester's proposal as
technically unacceptable is rendered academic where the Navy advises
that no funding for the canceled solicitation remains available.
Associates for Research and Training, Inc. (Associates), protests
the cancellation of request for proposals (RFP) No. N00600-85-R-1135, a
total small business set-aside, issued by the Naval Regional Contracting
Center (Navy), Washington, D.C., for a manager training program.
Associates alleges that its proposal was improperly rejected as
technically unacceptable.
We dismiss the protest.
The Navy contends that the protest is academic because all offers
were found to be technically unacceptable and the RFP was canceled.
Further, following the cancellation and protest, the Navy advises that
it has no plans to resolicit because no funding for the requirement
remains available.
Ordinarily, when a protester protests a canceled solicitation, the
cancellation in itself would not render the protest academic because the
relevant question to be resolved is the propriety of the reason for
cancellation. Since the reason for the cancellation by the Navy was the
alleged technical unacceptability of Associate's proposal, leaving no
acceptable proposals, the cancellation cannot render the protest
academic because the propriety of the Navy's determination of technical
unacceptability is still unresolved. See Magnavox Advanced Products and
Systems Co., B-215426, Feb. 6, 1985, 85-1 C.P.D. Paragraph 146.
However, in light of the Navy's disclosure that no funding for the
requirement remains available, we find that the protest is academic.
See 4 C.F.R. 21.3(f) (1985). It would serve no useful purpose to issue
a decision where the protester would not gain a remedy.
Regarding the Navy's original decision to cancel on the basis that no
proposals were acceptable, even if we assume the Navy's action was
improper, the lack of funding which was mentioned for the first time in
the Navy's supplemental report is an appropriate basis to support the
cancellation here. See AMRAY, Inc., b-210490, Feb. 7, 1983, 83-1 C.P.
D. Paragraph 135.
The protest is dismissed.
Robert M. Strong
Deputy Associate General Counsel
FILE: B-220374 85-2 CPD 534 DATE: November 8, 1985
MATTER OF: Westinghouse Electric Corporation
DIGEST:
BIDS - RESPONSIVENESS - WHAT CONSTITUTES
Apparent low bid which took no exception to specifications is
not nonresponsive hecause of a letter the bidder sent to the
agency after bid opening indicating an inability to comply with
the solicitation's Underwriters' Laboratories listing requirement
hecause bid responsiveness is determined as of bid opening and
thus letter was relevant only to the issue of bidder
responsibility, not responsiveness.
Westinghouse Electric Corporation protests the proposed award of a
contract for variable frequency controllers to Johnson Controls, the
apparent low bidder under invitation for bids (IFB) No. 652-65-85,
issued by the Veterans Administration Medical Center, Richmond,
Virginia. Westinghouse is a supplier of controllers to the second lowest
bidder, Maddox Supply Company, and is protesting on that firm's behalf.
Westinghouse contends that the agency must reject the bid from Johnson
Controls as nonresponsive.
We dismiss the protest under section 21.3(f) of our Bid Protest
Regulations, 4 C.F.R. Sec. 21.3(f) (1985), because it does not state a
valid basis for protest.
Westinghouse contends that Johnson Controls' bid is nonresponsive
because its controllers are not listed by Underwriters' Laboratories
(U.L.) as required by the solicitation. Westinghouse says that even
though Johnson Controls took no exception in its bid to the U.L.
listing requirement, the company sent a letter to the agency stating
that its controllers are not U.L. listed, but have been approved by
another testing laboratory.
A bid, to be responsive, must comply in all material respect to the
terms of the solicitation. Provost's Small Engine Service, Inc.,
B-215704, Feb. 4, 1985, 85-1 C.P.D. P 130. Responsiveness is determined
at bid opening on the basis of the bid submitted. Eclipse Systems,
Inc., B-216002, Mar. 4, 1985, 85-1 C.P.D. P 267. In this case, bids
were opened on September 27, 1985, and the letter from Johnson Controls
dated October 4 was received several days later. Because the letter did
not accompany the bid, the letter does not render the bid nonresponsive.
By Westinghouse's own admission, the bid itself contained no exceptions
to the specifications requirements, and therefore the bid must be viewed
as responsive.
The letter, however, does raise the question of the ability of
Johnson Controls to comply with the requirements of the IFB, and that is
a question of bidder responsibility, see E.J. Murray Company, Inc., et
al., B-212107, et al., Mar. 16, 1984, 84-1 C.P.D. P 316, which the
contracting officer must resolve in the af f irmative prior to award.
Federal Acquisition Regulation, 48 C.F.R. Sec. 9.103(b) (1984). This
Office generally does not review an agency's affirmative determination
of responsihility except in circumstances not present here.
We point out, however, that we have long viewed requirements for
certification by particular testing firms such as U.L. as unduly
restrictive of competition. See 33 Comp. Gen. 573 (1954); Arctic
Marine, Inc., 8-182321, May 14, 1975, 75-1 C.P.D. P 311. It may be
proper in some cases for a solicitation to require a product that
conforms to the standards of a particular testing firm, Gulf Coast
Defense Contractors, Inc., B-212641, Feb. 28, 1984, 84-1 C.P.D. P 243,
or to state that the certificate or label of that testing firm will be
accepted as evidence that the offered product meets applicable
standards. 33 Comp. Gen. at 576. However, the absence of such a token
of approval should not automatically exclude a product that in fact
conforms to such standards.
The protest is dismissed. By separate letter of today, we are
informing the Administrator of Veterans Affairs of our concern regarding
the U.L. listing requirement.
Ronald Berger
Deputy Associate
General Counsel
FILE: B-220369 86-1 CPD 130
DATE: February 5, 1986
MATTER OF: Heyl & Patterson
BIDS - RESPONSIVENESS - DESCRIPTIVE LITERATURE - UNSOLICITED -
ALLOWING FOR NONCONFORMING EQUIPMENT - BID RESPONSIVE
Protest contending that awardee's bid was nonresponsive because it
was accompanied by unsolicited technical brochures describing systems
not in compliance with the specifications is denied. The bid when read
with the brochures was not ambiguous because the brochures cannot
reasonably be interpreted as describing systems the awardee intended to
deliver.
Heyl & Patterson (H&P) protests the award of a contract to Westmont
Industries by the Department of the Navy under invitation for bids (IFB)
No. N62472-85-B-1471. H&P contends that Westmont's low bid should have
been rejected as nonresponsive because it was qualified by attached
unsolicited literature describing products that did not comply with the
IFB's specifications.
We deny the protest.
The IFB asked for bids to provide 85 small cranes and monorail
systems, including options, for the Naval Submarine Base, Kings Bay,
Georgia. The cranes were to be of various types and lifting capacities
and had to be designed to operate with controls permitting three
distinct hoist speeds. The IFB further provided that before fabrication
could commence, the contractor had to conduct an independent design
verification and obtain the Navy's approval of the design and
fabrication drawings to which the cranes would be built. The IFB warned
the bidders that if a bid included any identifying data, such as part
numbers, in connection with the description of the equipment, the bid
would be considered nonresponsive, unless the bid clearly indicated that
the equipment offered was in complete conformance with the
specifications.
Westmont's bid took no exceptions to the specifications and made no
reference to four brochures submitted with its standard bid form. One
brochure, which is not in controversy, was a general description of
Westmont's capabilities. The other three brochures each contained
technical descriptions of previously manufactured crane systems that had
stepless variable speed controls.
H&P contends that because Westmont submitted the descriptive
technical brochures without any indication that they were not intended
to qualify its bid, it is reasonable to conclude that Westmont intended
to provide crane systems with stepless variable speed controls. H&P
asserts that this conflicts with the specifications requiring that the
cranes operate at three distinct speeds because it is impossible to
obtain distinct speeds with such controls. Westmont insists that the
brochures were provided only to show its capability to perform the work
required by this IFB.
The Navy concluded that because the brochures described cranes
Westmont had provided to other customers and did not address the IFB's
requirements, which were for cranes with capacities ranging from 1/2 to
10 tons, they were submitted only to show Westmont's past experience and
general capabilities. It therefore made the award to Westmont.
Generally, where unsolicited descriptive literature appears to
describe the equipment offered in the bid, the literature must be read
as a part of the bid and if it describes a product that may not conform
to the IFB's specifications, the bid is ambiguous and must be rejected
as nonresponsive. McGraw-Edison Co., et al., B-217311 et al., Jan. 23,
1985, 85-1 CPD Paragraph 93. This is so because a bid is responsive
only if it is an unequivocal offer to meet all of the material terms and
conditions of the IFB. Data Controls/North Inc., B-205726, June 21,
1982, 82-1 CPD Paragraph 610.
This general rule, however, does not require that a bid be
automatically rejected as nonresponsive if it includes unsolicited
descriptive literature; rather, the bidder's intent must be ascertained
from the entire bid including the unsolicited literature. 49 Comp. Gen.
851 (1970); Brown Boveri Electric, Inc., B-209338, Apr. 1, 1983, 83-1
CPD Paragraph 342. If the literature creates an ambiguity as to what
the bidder intended, or if the material is reasonably susceptible of
being interpreted as reflecting the bidder's intention to have the
literature treated as a qualification of the bid, the bid must be
rejected as nonresponsive. Id.
In our view, Westmont's bid when read with the unsolicited brochures
was not ambiguous because the brochures could not reasonably be
interpreted as reflecting an intention to qualify Westmont's bid. None
of the brochures cited a model number or gave any indication that it
described equipment that Westmont would deliver. One of the brochures
described a system made up of 44 cranes with lifting capacities of 15 to
20 tons that had been delivered to the Department of Energy. The second
brochure pertained to a 10 ton capacity crane system and indicated that
it was for "BLDG 4-20" and "BLDG 4-21." The Navy points out that there
are no buildings at Kings Bay with such numbers. The third brochure
described a 34 ton capacity system but did not indicate for whom it was
made. The IFB required systems with lifting capacities of only 1/2, 2,
or 5 tons, except for two systems with 10 ton capacities. Under these
circumstances, we agree with the Navy that the unsolicited descriptive
literature submitted by Westmont clearly was not intended to describe
the equipment the firm intended to deliver, and therefore did not render
its bid nonresponsive.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220368 86-1 CPD 78
DATE: January 23, 1986
MATTER OF: G&L Oxygen and Medical Supply Services
ADVERTISING - COMMERCE BUSINESS DAILY - INFORMATION - DATE OF BID
OPENING, ETC. - CONSTRUCTIVE NOTICE FROM PUBLICATION
1. The publication of a procurement in the Commerce Business Daily
(CBD) constitutes constructive notice of the solicitation and its
contents even where the agency failed to send the protester a copy of
the solicitation.
ADVERTISING - COMMERCE BUSINESS DAILY - INFORMATION - DATE OF BID
OPENING, ETC. - CONSTRUCTIVE NOTICE FROM PUBLICATION
2. Where an announcement in the CBD dated August 13, 1985, contains
an obvious typographical error, in which the supply of services from
October 1, 1985, through September 30, 1985 (instead of September 30,
1986), is called for, the incumbent contractor should have known that
its interests would be affected and accordingly the error did not
deprive it of adequate notice.
G&L Oxygen and Medical Supply Services (G&L) protests the award of a
contract for the provision of home oxygen therapy services to B-Mar
Oxygen Services (B-Mar) under invitation for bids (IFB) No. 627-2-86
issued by the Veterans Administration (VA) Medical Center, Newington,
Connecticut.
We dismiss the protest.
G&L had been the incumbent contractor based on a contract beginning
September 26, 1983. A renewal clause in that contract provided as
follows:
"At the option of the Government, the right is reserved to
renew this contract by serving notice in writing thirty days prior
to the termination date of the contract. The Government will
limit the exercise of the option to two renewals and the maximum
period of the contract through the exercise of options will be
limited to three years."
The basic contract was renewed for 1 year on September 26, 1984. G&
Lalleges that on August 1 and 7, 1985, it requested that the contract be
renewed again, but no response was received from the VA.
On October 15, 1985, G&L was informed by the contracting officer that
an award had been made to B-Mar. G&L protested here on October 18,
1985.
G&L contends that B-Mar is not a small business as is required by the
solicitation and that the contracting officer failed to send G&L a
solicitation and deliberately prevented G&L from participating in the
competition.
The VA states that although G&L did request renewal of its contract,
the contracting officer informed G&L that in view of deficiencies in G&
L's performance, G&L's contract was in jeopardy. Moreover, G&L never
requested a copy of the solicitation from the VA. Further, the VA
points out that the renewal clause reserved to the government the right
to renew the contract by serving notice 30 days prior to the termination
date of the contract. Since the VA did not give such notice to G&L, the
VA contends that as of July 30, 1985 (30 days prior to the August 30
termination date), G&L had notice that the VA was not renewing the
contract.
The VA also states that on August 13, 1985, the new procurement was
announced in the Commerce Business Daily (CBD) with a bid opening date
of September 26. The VA contends, therefore, that since G&L did not
protest until October 18, its protest is untimely and should be
dismissed.
G&L responds that since its contract was renewed in 1984 without the
required 30-day notice, the 30-day notice requirement was voided for
this 1985 contract. G&L also argues that it never received actual or
constructive notice of the solicitation. In this regard, G&L points out
that the CBD notice stated a requirement for ". . . home use oxygen for
beneficiaries of the VA for the VA Medical Center, Newington, CT for the
period 1 Oct. 85 through 30 Sept. 85. . . ." It is G&L's contention that
this CBD notice calling for a termination date of September 30, 1985,
was wholly ineffective in providing notice to G&L that the subsequent
year's services (85-86) were being solicited by the IFB.
With regard to the clearly obvious typographical mistake in the CBD
announcement, i.e., calling for a contract period of October 1, 1985,
through September 30, 1985, instead of September 30, 1986, we think that
any prudent contractor would know that a contract was being solicited
for a future requirement of home use oxygen services. It was the duty
of the contractor to either request a solicitation from the VA or at
least inquire as to when the contract period was to run. Certainly,
G&L, as incumbent contractor at the Newington VA Medical Center, should
have known, despite the typographical mistake, that its interests were
being directly affected by the CBD announcement. Accordingly, we find
that the error in the CBD announcement did not deprive G&L of adequate
notice. (Compare Morris Guralnick Associates, Inc., B-214751.2, Dec. 3,
1984, 84-2 C.P.D. Paragraph 597, wherein we found that a CBD notice
improperly listed under the wrong classification of the CBD was not
considered adequate.)
We have held that the publication of a procurement in the CBD
constitutes constructive notice of the solicitation and its contents.
Detroit Broach and Machine, B-213643, Jan. 5, 1984, 84-1 C.P.D.
Paragraph 55. This is so even where an agency fails to send the
protester a copy of the solicitation. Aurora Spectrum International,
B-214162, Feb. 13, 1984, 84-1 C.P.D. Paragraph 185. Although G&L argues
that the VA's action in conducting this procurement and the prior
renewal resulted in G&L delaying its protest, this does not excuse G&L
from compliance with our bid protest timeliness requirements. Our Bid
Protest Regulations, 4 C.F.R. Section 21.2(a)(1) (1985), require that
protests based upon alleged solicitation improprieties which are
apparent before bid opening date must be filed before bid opening date.
These regulations provide objective criteria for application by our
Office to all protests before us and may not be waived by the actions or
representations of the contracting agency. Detroit Broach and Machine,
B-213643, supra. Accordingly, the protest is untimely.
Moreover, even if the protest were timely, we do not find that the
agency action violated the Competition in Contracting Act of 1984, 31
U.S.C.A. Section 3551, et seq. (West Supp. 1985).
We are mindful of the recent decision, The Thorson Company, General
Services Board of Contract Appeals, No. 8185-P, October 30, 1985,
reprinted in 85-3 B.C.A. 918,516 (CCH 1985), in which the Board held
that the Competition in Contracting Act's requirement for "full and open
competition" was violated when an incumbent contractor did not receive
solicitation material for a follow-on contract with the procuring agency
and, thus, did not submit its offer by the closing date. The Board
found that the protester's late proposal was excusable. The Board's
decision appears to have been based on the fact that the agency may be
able to enlarge the number of participants in the procurement process
beyond a single potential contractor whose price had not yet been
revealed and that no award had been made.
We have recently held that a procuring agency's failure to solicit a
potential bidder, even an incumbent contractor, does not provide a
compelling reason for resolicitation where there is no showing that the
agency made a deliberate or conscious attempt to preclude the bidder
from competing, neglected to make a significant effort to obtain
adequate competition, or failed to obtain reasonable prices.
Leavenworth Office Equipment, B-220905, Nov. 12, 1985, 85-2 C.P.D.
Paragraph 543.
Although it is unclear why the VA did not send G&L a copy of the
solicitation, we do not think that G&L has shown that the VA made a
deliberate or conscious attempt to preclude it from competition.
Moreover, in light of the four other bids under this solicitation, the
fact that award had been made before the protest was filed and since
there is no showing that the VA failed to obtain reasonable prices, we
find this case distinguishable from The Thorson Company case.
In regard to G&L's allegation that B-Mar is not a small business, our
Office does not consider questions concerning small business size status
determinations. Siska Construction Company, Inc., B-217593, June 26,
1985, 85-1 C.P.D. Paragraph 724.
The protest is dismissed.
Harry R. Van Cleve
General Counsel
FILE: B-220367.4 86-1 CPD 411 DATE: April 28, 1986
MATTER OF: Shannon Services, Inc.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
TECHNICAL ACCEPTABILITY - ADMINISTRATIVE DETERMINATION
1. Each procurement is a separate transaction and the action
taken on any one procurement does not govern the conduct of all
similar procurements. Prior determination of technical
unacceptability does not require continued similar determination
under subsequent solicitation for the same services.
CONTRACTS - SMALL BUSINESS CONCERNS - AWARDS - SMALL BUSINESS
ADMINISTRATION'S AUTHORITY - SIZE DETERMINATION
2. The Small Business Administration has conclusive statutory
authority to determine matters of small business size status for
federal procurements, and therefore the General Accounting Office
will not consider an allegation that the low bidder is not a small
business concern.
CONTRACTS - NEGOTIATION - AWARDS - TO OTHER THAN LOW OFFEROR
3. Where the solicitation in a negotiated procurement advises
that technical factors are more important than cost, the
government may conclude that it is more advantageous to award a
contract to an offeror with a superior technical proposal even
though its proposed costs were not low.
Shannon Services, Inc., protests the anticipated award of a contract
to Rice Services under request for proposals No. DABT35-85-R-0147,
issued by the Army for dining facility operation services at Fort Dix,
New Jersey.
We dismiss the protest.
Shannon first asserts that in a prior procurement for these services
in 1984, Rice Services was considered technically unacceptable and
eliminated from further consideration. This assertion provides no basis
for protest. Even if the assertion is true, what happened under a prior
solicitation has no relevance to the present procurement. Each
procurement action is a separate transaction, and the acceptability or
unacceptability of an offeror's proposal under one procurement has
nothing to do with subsequent procurements. See Gross Metal Products,
B-215461, Nov. 27, 1984, 84-2 CPD P 577.
Shannon also asserts that Rice Services may not be a small business
and therefore may be ineligible for any contract award under this small
business set-aside. Under the Small Business Act, 15 U.S.C. Sec. 637(
b)(6) (1982), the Small Business Administration has conclusive authority
to determine matters of small business size status for federal
procurements. Bay Cities Refuse Servs., Inc., B-220164, Sept. 6, 1985,
85-2 CPD P 277. Consequently, we do not review such matters. 4 C.F.R.
Sec. 21.3(f)(2) (1985)
Finally, the protester complains that any final award determination
should be based on a cost comparison which would entitle it to award
because it proposed lower costs than Rice Services. The solicitation,
however, did not indicate that award would be made on the basis of the
least costly, technically acceptable proposal; rather, it clearly
provided that technical factors were significantly more important than
cost. Where a solicitation for a negotiated procurement advises
offerors that technical factors are more important than cost, the
procuring agency may determine that it is more advantageous to the
government to award the contract to an offeror with a superior technical
proposal, even though its cost is higher than that associated with other
technically acceptable proposals, if the advantage of the technically
superior proposal offset the cost advantages of other proposals. See
Systems Research Laboratories, Inc., B-219780, Aug. 16, 1985, 85-2 CPD P
187. Shannon does not allege any reason for finding that the Army
unreasonably has made such a determination.
Shannon therefore has not presented any valid basis for protest.
Accordingly, pursuant to 4 C.F.R. Sec. 21.3(f), the protest is
dismissed.
Ronald Berger
Deputy Associate
General Counsel
FILE: B-220367.3 86-1 CPD 334 DATE: April 7, 1986
MATTER OF: Ariston Prepared Foods, Inc.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF COMMENTS ON AGENCY'S REQUEST
DIGEST:
A protest file that was closed because the protester's comments
on the agency report were not received within 7 working days after
the protester received the report, as reguired by the Bid Protest
Regulations, will not be reopened where the protestesr simply
relied on the mail for timely delivery of comments and delivery in
fact was not timely made.
Ariston Prepared Foods, Inc. requests reconsideration of our
dismissal of its protest under request for proposals (RFP) No.
DABT35-85-R-0147, issued by the Department of the Army. We dismissed
Ariston's protest because Ariston failed to comoly with our Bid Protest
Regulations' requirement that the protester, within 7 working days after
receiving the agency's report on the protest, either: 1) file comments
on the report; 2) file a statement requesting that the case be decided
on the existing record; or 3) request an extension for submitting
comments. 4 C.F.R. Sec. 21.3(e) ( 1985). Ariston contends that it
mailed our Office a statement requesting that we consider the protest on
the existing record and requests that we reopen the file. We find no
basis to reconsider the dismissal.
Our records show that after our receipt of the aqency report, we
received no communication from Ariston concerning the protest until the
filing of its request that we reopen the file. Although Ariston argues
that it mailed a statement to our office expressing continued interest
in the protest, the term filed means "receipt of the protest submission
in the General Accounting Office"; a protester makes use of the mails
at its own risk, and any delay or failure in the delivery of the mail
does not provide a basis for waiving our Bid Protest Regulations.
California Short Hand Reporting--Request for Reconsideration,
B-221173.2, Feb. 18, 1986, 86-1 CPD P.
Both our published regulations and our notice to Ariston
acknowledging its protest expressly notified Ariston that under 4 C.F.
R. Sec. 21.3(e) the protester, within 7 working days of receipt of the
agency report, had to file written comments or advise our office to
decide the protest on the existing record. The acknowledgment further
warned that unless we heard from the protester by the seventh day after
the report was due, we would close our file. It therefore was incumbent
upon the protester to exercise the due diligence and care necessary to
meet the requirements.
Our regulations are designed to establish effective and equitable
standards both so that parties have a fair opportunity to present their
cases and so that protests can be resolved in a speedy manner. Bannum
Enterprises-- Reconsideration, B-221274.2, Feb. 25, 1986, 86-1 CPD P .
We require a statement of continued interest in pursuing a protest
because once protesters read the agency report they sometimes change
their minds about the merits of their protests, and thus the requirement
for an expression of continued interest prevents unduly delaying the
procurement process while this Office would be preparing a decision the
protester was no longer interested in receiving. Id.
Since Ariston had the opportunity to express continued interest in
the protest, our reopening the file would be inconsistent with our
purpose of providing a fair opportunity for protesters to have their
objections considered without unduly disrupting the procurement process.
The request for reconsideration is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220367 86-1 CPD 177
DATE: February 20, 1986
MATTER OF: United Food Services, Inc.
CONTRACTS - NEGOTIATION - REQUESTS FOR PROPOSALS - SUBMISSION DATE
ADMINISTRATIVE DETERMINATION
1. Contention that request for proposals did not allow enough time
for preparation of response and unfairly favored participants in prior
procurement is without merit where agency received 12 proposals, 8 from
firms which did not participate in prior procurement.
CONTRACTS - NEGOTIATION - ADMINISTRATIVE DETERMINATION - ADVERTISING
V. NEGOTIATION
2. Protest against use of negotiated procurement procedures for
acquisition of food services is denied where complexity of requirements
and need to assure quality of performance provided reasonable basis for
use of negotiated procedures.
CONTRACTS - NEGOTIATION - COST-TYPE - TECHNICAL/COST JUSTIFICATION
3. Determination to use cost-type contract, based on uncertainties
attributable to lack of prior experience with contracting for food
services, complexity and breadth of requirements, initiation of new
recycling program, and awareness of local landfill problems which could
complicate disposal and recycling efforts to an unknown degree, is
reasonable.
United Food Services, Inc. (United) has filed a protest against
request for proposals (RFP) No. DABT35-85-R-0147 issued by the
Department of the Army for food services at Fort Dix, New Jersey.
The protest is denied.
This RFP, issued on September 21, 1985, with a closing date of
October 21, 1985, was part of a cost comparison study under Office of
Management and Budget (OMB) Circular A-76 to determine whether to
acquire a contractor to staff, manage and operate dining facilities at
Fort Dix or to retain the facilities in-house. The RFP identifies the
tasks to be performed as the supervision, administration, operation and
sanitation of the dining facilities, including performance of accounting
and reporting functions, supply activities, requisitioning, receipt,
handling, transportation, processing, preparation, service and disposal
of food substances, and the operation of a quality-control program. The
contractor will also be responsible for implementing recycling and
energy conservation programs and for the continuing security of closed
facilities. Offers are to be submitted on a cost-plus-award-fee basis
for a base year and 4 option years.
This RFP is the second in connection with this particular evaluation,
an earlier RFP having been canceled. (The earlier RFP was also the
subject of a protest to our Office, Rice Services, B-218001.2, Apr. 8,
1985, 85-1 CPD Paragraph 400, as was another procurement by the Army for
related services. See Integrity Management International, Inc.,
B-216453, Dec. 13, 1984, 84-2 CPD Paragraph 664.) The RFP identified the
significant technical evaluation factors in order of their importance
as: (1) Comprehension of specification requirements; (2) Organization
and Staffing; (3) General Management; (4) Experience; (5) Phase-in;
and (6) Strike or other job action contingency plan. Cost realism was
also to be evaluated. The procurement was set aside for small business.
United objects to this procurement on three bases: First, United
contends that the Army did not allow enough time for prospective
offerors to prepare proposals and that the short time unfairly favored
offerors who participated in the aborted first procurement. Second,
United asserts that it is possible to provide adequate specifications to
support a sealed bid type procurement. Last, United contends that the
Army's use of a cost-type contract for these services is improper.
Inadequate Time to Prepare Proposals:
United contends that the 30 days the RFP allowed for offerors to
prepare responses was inadequate, given the complexity of the
requirements. United also asserts that this afforded competitors in the
prior canceled procurement a competitive advantage since they would not
have to start from scratch in preparing proposals. In support of its
contentions, United cites a number of procurements for similar services
at other military installations which have allowed longer periods for
offerors to respond. The Army responds that 30 days was adequate time
to prepare proposals for this procurement and, as evidence, points to
the fact that it received 12 responses, 8 of the from firms that did not
participate in the first procurement.
We find United's arguments unpersuasive. The question here is
whether all offerors were treated equally and whether the Government
obtained adequate competition and reasonable prices, not whether any
particular firm was given the opportunity to compete. Avitech, Inc.,
B-216398, Feb. 4, 1985, 85-1 CPD Paragraph 133. As the Army notes, it
received 12 proposals. We have previously considered the receipt of
fewer proposals than this as strong evidence of adequate competition.
See, e.g., The Kuljian Corp., B-203717, Aug. 28, 1981, 81-2 CPD
Paragraph 185. Moreover, we note that the 30 days provided by the Army
comports with the requirement of the Federal Acquisition Regulation
(FAR), Section 5.203(b) (Federal Acquisition Circular (FAC) 84-5, Apr.
1, 1985), that agencies allow at least 30 days response time for bids or
proposals from the date of issuance of a solicitation. In these
circumstances, we find no basis for objection to the time allowed for
response under the RFP.
This basis for protest is denied.
Use of Negotiated Procurement Procedures:
The Army justified its use of negotiated procedures on the need to
evaluate proposals and conduct discussions to assure that offerors had
adequate technical and financial management capabilities and fully
understood the complex requirements of the RFP. The Army asserts that
this is sufficient to justify the use of negotiated procurement
procedures. United contends that these capabilities are always an issue
in procurements and asserts that other military facilities have been
able to conduct sealed-bid (formerly "advertised") procurements for
these services. United asserts that the Army has demonstrated no unique
requirements or complexities in this procurement that require the use of
negotiated procedures and argues that this method of procurement here
circumvents the regulatory preference for sealed bids.
The Competition in Contracting Act of 1984 (CICA) eliminated the
statutory preference for formally advertised (now "sealed bid")
procurements. 10 U.S.C.A. 2304 (West Supp. 1985). Compare United Food
Services, Inc., B-217211, Sept. 24, 1985, 64 Comp. Gen. . . . , 85-2 CPD
Paragraph 326, and cases cited therein.
The criteria which now govern the selection of procurement method are
contained in 10 U.S.C.A. 2304(a)(2), which requires an agency to solicit
sealed bids if:
"(i) Time permits the solicitation, submission, and evaluation
of sealed bids;
"(ii) The award will be made on the basis of price and
price-related factors;
"(iii) It is not necessary to conduct discussions with the
responding offerors about their bids; and
"(iv) There is a reasonable expectation of receiving more than
one sealed bid."
In our judgment, the Army's determination not to conduct a sealed bid
was permissible under subparagraphs (ii) and (iii) of this section.
Initially, we note that this cost-comparison covers the full range of
food service functions for Fort Dix, including the conduct of recycling
and energy conservation programs as well as continuing responsibility
for closed facilities, rather than being a relatively simple "mess
attendant" contract for dining room services. Even United, in its
challenge to the amount of time allowed for proposal preparation,
acknowledges the complexity of the requirements. In a prior case
involving a less comprehensive and complex range of services, we
sanctioned a grantee's determination, under the criteria of OMB Circular
A-102, which is very similar to those above, to use negotiated
procurement methods. See Consolidated Food Management Co., B-217254,
June 12, 1985, 85-1 CPD Paragraph 673. Moreover, we referred in both
Integrity Management International, Inc., B-216453, supra, and Rice
Services, B-218001.2, supra, to the complexity of this procurement and
the evaluation of proposals and, in the latter case, impliedly approved
the use of negotiated procedures when we denied Rice's protest against
its elimination from the competitive range. In our judgment, the Army's
need to assure the quality of performance and the complexity of the
procurement provide a reasonable basis for the determination to conduct
a negotiated procurement. Essex Electro Engineers, Inc., B-221114, Jan.
27, 1986, 65 Comp. Gen. . . . , 86-1 CPD Paragraph . . . .
This basis for protest is denied.
Use of Cost-Type Contract:
The Army justified use of a cost-type contract on the basis that it
had never before contracted for services on this scale at Fort Dix and
that uncertainties in the quantities of meals to be served, the
unpredictability of facility openings and/or closings, the location
(field vs. dining facility) and number of meals, and the lack of data
regarding the requirements of the new recycling program precluded the
estimation of costs with sufficient certainty to allow the use of a
fixed-price type contract. The Army also contends that the use of a
fixed-price contract would not allow the Army any effective means to
assure the quality of performance and points out that Army Regulation
30-1, dated September 30, 1985, recommends against the use of per-meal
fixed-price contracts. The Army argues that it was within the
contracting officer's discretion to consider these factors and asserts
that the contracting officer's decision was reasonable.
United contends that the question is not whether the contracting
officer properly exercised her discretion, but whether the determination
is consistent with the regulations by showing that it was not possible
to use any type of firm fixed-price contract. United asserts that
services of this type have been acquired at other military installations
on a fixed-price basis and contends that the Army has not demonstrated
any unique requirements or uncertainties in this procurement which
justify the use of a cost-type contract. United contends that the
Army's determination is therefore improper.
In the conduct of negotiated procurements under CICA, the head of an
agency of the Department of Defense "may enter into any kind of contract
that the considers will promote the best interests of the United
States." 10 U.S.C.A. 2306(a). This discretion is not unfettered,
however, and the selection of a cost or incentive type contract requires
a determination that the selected contract type is likely to be less
costly or that it is impracticable to obtain the property or services
except by using such a contract. 10 U.S.C.A. 2306(c). Under the FAR,
the selection of the appropriate contract type is committed to the sound
judgment of the contracting officer. FAR, Section 16.103(a), (FAC
84-5).
In the exercise of this judgment, the applicable regulations require
that the use of cost-type contracting be justified on the basis that the
uncertainties involved in contract performance do not permit costs to be
estimated with sufficient accuracy to use any type of fixed-price
contract. FAR, Section 16.301-2. A lack of experience in contracting
for particular goods or services may justify the use of cost-type
contracts until a contracting history adequate to provide a basis for
price determination is established. FAR, Section 16.103(c). Our review
of such determinations is limited to ascertaining whether the decision
was reasonable. Southwest Marine, Inc., B-204136, July 20, 1982, 82-2
CPD Paragraph 60.
We conclude that the Army's determination to use a cost-type contract
was reasonable. The contracting officer specifically cited
uncertainties growing out of the absence of prior contracting for these
services at Fort Dix, coupled with the complexity and breadth of the
requirements, discussed above, and the introduction of a new recycling
program with which the Army had no experience whatsoever, in support of
the determination to use a cost-type contract. The record also reflects
a concern for and awareness of external factors, such as serious
landfill problems in the Fort Dix area, which could affect the
contractor's recycling and disposal efforts to an unknown degree. In
our judgment, these considerations reflect sufficient uncertainty to
establish a reasonable basis for the contracting officer's determination
to use a cost-type contract. Moreover, we do not find United's
references to other procurements at other installations to be persuasive
evidence to the contrary since each procurement must stand alone. Gross
Metal Products, B-215461, Nov. 27, 1984, 84-2 CPD Paragraph 577.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220365 DATE: October 21, 1985
MATTER OF: JJK & Associates
DIGEST:
Protest that firm should have received the
award for a rotary filing system as the
lone acceptable offeror is dismissed where
the agency canceled the solicitation due to
a change in its needs dictated by modifications
in its office floor plan, and the
protester does not challenge the agency's
justification for canceling.
JJK & Associates (JJK) protests the Department of Justice's (DOJ)
decision not to award the firm a contract for a rotary filing system
under request for quotations (RFQ) No. 5-20-014926. JJK believes it was
entitled to the award as the lone acceptable offeror. We dismiss the
protest.
JJK included with its protest a copy of an October 2, 1985, internal
DOJ memorandum indicating that the RFQ was being canceled due to
unanticipated changes in the floor plan of new DOJ office space in which
the files were to be installed. The memorandum explains that the agency
plans to employ an interior designer to redefine its furniture and
equipment needs for the new space.
We have held that cancellation of a solicitation is proper where an
award under the solicitation would not have satisfied the agency's
needs. American Marine Decking Systems, Inc.,B-216580, Mar. 1, 1985,
85-1 C.P.D. P 256. DOJ has determined that its filing equipment needs
have changed due to the floor plan changes, and that the rotary files
under this RFQ thus will not meet its needs. As JJK does not challenge,
or even specifically address, DOJ's position that cancellation therefore
is warranted, we have no basis for questioning the cancellation.
We note that JJK also seems to speculate that the agency may have
been motivated to cancel by a desire to award a contract to another
firm. Such speculation, however, is not sufficient to bring into
question an agency's properly justified decision to cancel a
solicitation. Nuclear Assurance Corp., B-216076, Jan. 24, 1985, 85-1
C.P.D. P 94.
JJK requests that we hold a conference on this matter. As we are not
considering JJK's protest on the merits, however, such a conference
would serve no useful purpose. B-K Manufacturing Co., B-218832, June 6,
1985, 85-1 C.P.D. P 650.
The protest is dismissed.
Robert M. Strong
Deputy Associate
General Counsel
FILE: B-220364 DATE: October 28, 1985
UNITED STATES GENERAL ACCOUNTING OFFICE
WASHINGTON, D.C. 20548
OFFICE OF GENERAL COUNSEL
Pierson, Ball & Dowd
1200 18th Street, N.W.
Washington, D.C. 20036
Attention: Steven B. Clarkson, Esq.
Gentlemen:
This is in response to your letter dated October 18, 1985, regarding
bid protest B-220364, filed on October 15 by Newport News Industrial
Corporation and Simulation Associates, Inc., challenging award to any
other bidder under invitation for bids (IFB) No. 60-972166, issued by
the Tennessee Valley Authority (TVA).
You state that, on October 16, the TVA Board of Directors decided to
make an award under the challenged IFB, despite the pendency of the
protest before our office, in contravention of the requirement in the
Competition in Contracting Act of 1984 (CICA), 31 U.S.C.A. Sec. 3553(
c)(1) (West Supp. 1985), that award be withheld where a protest
challenging the procurement has been filed before award has been made.
You indicate that TVA's decision to proceed with award is based on its
position that, contrary to our recent decision in Monarch Water Systems,
Inc., B-218441, Aug. 8, 1985, 64 Comp. Gen. , 85-2 C.P.D. P 146, aff'd
on reconsideration, B-218441.2, Sept. 25, 1985, 85-2 C.P.D. P , TVA is
not subject to our bid protest jurisdiction under CICA. In view of
TVA's action, you request that Our Office bring suit to compel TVA to
terminate the contract awarded and suspend performance while the protest
is pending.
You point out that TVA's decision to award a contract may preclude
effective relief if the protest ultimately is sustained. In this
regard, your client's position is similar to that of other protesters
earlier this year, when the executive branch initially decided not to
follow CICA's stay provisions. In both those cases and here, while we
recognize the difficulties protesters may face, we nevertheless believe
that hringing suit against the contracting agency would be inconsistent
with the role Congress envisioned for our Office in enacting CICA.
In our view, our role under CICA is to decide the merits of bid
protests and recommend relief in appropriate cases. There is no
provision in CICA authorizing our Office to bring suit, either to compel
agencies to follow the stay provisions or to implement the relief we
recommend. We believe that Congress, if it had intended our Office to
have enforcement authority against federal agencies, would have specif
ically so provided in CICA, as it has in the area of impoundment of
funds. See Impoundment Control Act of 1974, 2 U.S.C. Sec. 687 (1982).
In addition, Congress' intent in CICA was to codify our existing
function as a bid protest review forum. There is no indication in the
legislative history that enforcement action, a significant expansion of
our pre-CICA bid protest function, was contemplated.
In the absence of statutory enforcement authority and in view of the
legislative intent behind enactment of CICA's bid protest provisions, we
believe it would he inappropriate to initiate litigation against one of
the parties to the protest, as you request.
Sincerely Yours,
Harry R. Van Cleve
General Counsel
FILE: B-220364 85-2 CPD 705
DATE: December 23, 1985
MATTER OF: Newport News Industrial Corporation; Simulation
Associates, Inc.
CONTRACTS - PROTESTS - AUTHORITY TO CONSIDER - TENNESSEE VALLEY
AUTHORITY PROCUREMENTS
1. Tennessee Valley Authority (TVA) is subject to GAO bid protest
jurisdiction under the Competition in Contracting Act of 1984 (CICA)
since TVA comes within the statutory definition of a federal agency
subject to CICA and TVA procurements are funded with appropriated funds.
CONTRACTS - PERFORMANCE - SUSPENSION - PENDING FINAL RESOLUTION OF
PROTEST
2. Agency's failure to make the required CICA determination for
continued contract performance during pendency of protest does not
provide a basis to upset an otherwise proper award.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
3. Protest filed after bid opening is untimely to the extent that it
challenges contracting agency's choice of procurement method.
BIDS - RESPONSIVENESS - SOLICITATION REQUIREMENTS NOT SATISFIED -
CONFORMABILITY OF EQUIPMENT, ETC. OFFERED
4. Bid is properly found nonresponsive where bidder concedes that
its equipment deviates from numerous technical specifications in IFB.
Fact that bidder did not explicitly take exception to the specifications
and now contends that it will modify its equipment to fully comply, does
not cure deviations from the specifications evident from technical
information included in the bid.
Newport News Industrial Corporation (NNI) and Simulation Associates,
Inc. (SAI), /1/ protest the rejection of NNI's bid under invitation for
bids (IFB) No. 60-972166, issued by the Tennessee Valley Authority (TVA)
for a full-scale replica of the control room at the Watts Bar Nuclear
Power Plant, Spring City, Tennessee. The protesters contend that the
procurement should not have been conducted using sealed bidding
procedures, and that TVA improperly found that NNI's bid was
unresponsive. We dismiss the protest in part and deny it in part.
As a preliminary matter, TVA challenges our jurisdiction to decide
the protest under the Competition in Contracting Act of 1984 (CICA), 31
U.S.C.A. Section 3551 et seq. (West Supp. 1985), and our Bid Protest
Regulations, 4 C.F.R. part 21 (1985). TVA's arguments have already been
considered and rejected by our Office in Monarch Water Systems, Inc.,
B-218441, Aug. 8, 1985, 64 Comp. Gen. . . . , 85-2 CPD Paragraph 146.
Specifically, we concluded in the Monarch case that TVA meets the
applicable definition in the Federal Property and Administrative
Services Act of 1949 (Property Act) of a federal agency subject to our
bid protest jurisdiction. /2/ We also found that the power program
funds used for TVA procurements constitute a continuing appropriation,
not nonappropriated funds as TVA argues. Since TVA has presented no new
arguments in this case, we see no basis on which to modify our
conclusion in Monarch that TVA is subject to our bid protest authority
under CICA.
Under CICA, 31 U.S.C.A. Section 3553(c), if a protest concerning a
procurement is filed before award, a contract may not be awarded while
the protest is pending, unless the contracting agency determines that
urgent and compelling circumstances significantly affecting the
interests of the United States do not permit withholding award until a
decision on the protest is issued. In this case, TVA, acting on its
position that it is not subject to CICA, awarded a contract under the
IFB on October 16, after the protest was filed. TVA's action, taken
without the required finding of urgent and compelling circumstances,
contravenes the requirement in CICA that award be withheld while the
protest is pending. Nevertheless, an agency's failure to delay award
does not itself constitute a basis for upsetting an otherwise proper
award. Inter-Trade Industries Ltd., B-219353, Sept. 27, 1985, 64 Comp.
Gen. . . . , 85-2 CPD Paragraph 346.
TVA also argues that its procurements are not subject to the Federal
Acquisition Regulation (FAR). As support for this argument, TVA
contends that the FAR is issued under this Office of Procurement Policy
Act (OFPPA), 41 U.S.C. Sections 401 et seq.; since TVA does not fall
with the OFPPA's coverage as defined in 41 U.S.C. Section 403, TVA
argues that it is not subject to the regulations issued under the OFPPA.
TVA's argument is without merit. The OFPPA states that it applies to
"a wholly owned Government corporation fully subject to the provisions
of chapter 91 of title 31." Since 31 U.S.C. Section 9101(3)( M) provides
that TVA is subject to the provisions of chapter 91, we think that TVA
falls within the definition section of the OFPPA. In any event that is
irrelevant to whether TVA's procurements are subject to the FAR.
Rather, as we explained in Monarch, while TVA has broad statutory
authority regarding its contracts and expenditures, absent a
determination to the contrary by the TVA Board, TVA is subject to the
procurement procedures in the Property Act and the FAR. See 39 Comp.
Gen. 426 (1959). Since TVA does not contend that the Board has
determined not to follow the FAR, its provisions apply to this case.
The IFB calls for bids for a replica of a nuclear power plant control
room to be used to train plant operators by simulating different plant
operations and malfunctions and monitoring trainees' responses. The IFB
required submission of a lump-sum bid for the entire system, as well as
separate bids for several optionsl features. The IFB advised bidders
their bids had to demonstrate full compliance with the technical
specifications included as an appendix to the IFB.
Of the three bids received, NNI's was the lowest at $9,239,967,
followed by The Singer Company's bid at $10,936,130, and Westinghouse's
bid at $13,204,900. As discussed in detail below, TVA rejected NNI's
bid as nonresponsive, after determining that NNI's bid failed to comply
with numerous IFB specifications. TVA then made award to Singer, the
second low bidder.
NNI and SAI contend that the procurement should not have been
conducted using sealed bidding procedures. In addition, the protesters
maintain that the NNI bid was responsive, in all respects, and,
therefore, NNI, as the low bidder, should have received the award.
NNI and SAI first argue that since the IFB required submission of
technical proposals, TVA should have used the two-step sealed bidding
procedures, under which technical acceptability is determined first,
with an opportunity for proposal modification, followed by a price
competition. See FAR, 48 C.F.R. subpart 14.5. We find this argument
untimely. As the protesters recognize, TVA's intention to conduct the
procurement using sealed bids was evident from the IFB. Our Bid Protest
Regulations require that protests based on alleged improprieties
apparent on the face of the IFB be filed before bid opening. 4 C.F.R.
Section 21.2(a)(1). Here, the protest was not filed until October 15,
well after bid opening on August 2. As a result, the protesters'
challenge to TVA's choice of procurement method is untimely and will not
be considered on the merits. Behavioral Systems Southwest, B-213065,
Oct. 11, 1983, 83-2 CPD Paragraph 441.
The protesters' next contention is that TVA improperly rejected NNI's
bid as nonresponsive. We find this argument to be without merit. TVA
states that NNI's bid was found not to comply with 26 of the IFB's
technical specifications. NNI and SAI recognize that NNI's bid does not
comply with a number of the specifications, conceding in their protest
comments that its equipment as described in the technical literature
submitted with the bid does not meet all the specifications. For
example, sections 5.2.6 and 5.3.12 of the IFB require that the
simulator's communications controllers, which perform data transmission
from the simulator computer to devices such as terminals, printers and
plotters, be capable of transmitting to, and receiving data from, up to
eight devices at a specified rate (19.2 Kbaud) without loss of data. In
the protest, NNI concedes that its proposed controllers cannot operate
at the specified rate.
As another example, section 5.4.7 of the IFB requires that the
simulator include a hand-held remote control unit which the instructor
can use to control the simulator. The specification at section 8.7 also
requires that the remote control unit have a feedback feature to
indicate that the instructor's command has been received and processed
by the simulator computer. The protesters concede that the product
description in NNI's bid of the remote control unit it proposed to use
did not indicate that it had a feedback capability. In fact, NNI states
in the protest that it would have had to purchase a separate product to
add the feedback feature to the remote control unit.
With regard to these and similar deviations from the specifications,
the protesters argue that, if NNI received the award, it would modify
its equipment to fully comply with the specifications. Further, the
protesters maintain that since NNI's bid did not explicitly take
exception to the specifications, it should be regarded as responsive
despite the fact that the descriptive literature and other technical
information in the NNI bid showed that its system deviated from the
specifications. We disagree. A bid's compliance with specifications
must be determined from the face of the bid itself without resort to
explanations furnished after bid opening. Frontier Mfg. Co., B-215288,
Nov. 11, 1984, 84-2 CPD Paragraph 529. Moreover, even regarding NNI's
failure to take exception as evidence of its intention to comply with
the specifications, such a blanket statement in a bid does not cure the
bid's deviation from the specifications. Modutech Marine, Inc.,
B-207601, Feb. 9, 1983, 83-1 CPD Paragraph 144.
Here, the IFB clearly required that the bids demonstrate compliance
with the technical specifications. Since the technical information
submitted with NNI's bid did not show that its system would comply with
all the specifications, its bid was properly found nonresponsive. See
Zero Mfg. Co., B-210123.2, Apr. 15, 1983, 83-1 CPD Paragraph 416.
Moreover, since TVA properly found NNI nonresponsive on the various
grounds conceded by NNI, we need not consider whether NNI also was
nonresponsive in the remaining areas identified by TVA. Wayne Kerr,
Inc., B-217528, Apr. 18, 1985, 85-1 CPD Paragraph 445.
In addition to recognizing in its protest the various deficiencies in
the NNI bid, the bid itself stated that NNI took exception to four
specifications. /3/ Specifically, NNI proposed a lower power frequency
for the simulator computer system than required; printer paper of a
narrower width than required; and limited, instead of full,on-site
acceptance testing of malfunctions. The protesters argue, however, that
neither of the other two bidders could have complied with the
specifications regarding power frequency and paper width, based on their
assumption that the other bidders' sy0tems used the same equipment as
NNI proposed using. NNI and SSI have offered no support, however, for
their argument that the other bidders failed to comply with these
specifications. The protesters do not argue that no equipment on the
market could comply with the specifications, and do not explain why we
should assume that the other bidders proposed using the same equipment.
NNI and SAI request that we obtain a copy of the awardee's bid to
confirm that TVA used a "standardless and subjective method of
procurement." The protesters' allegations regarding TVA's evaluation of
the other bids are unsubstantiated. We do not conduct investigations in
connection with our bid protest function for the purpose of establishing
the validity of a protester's assertions. Raytheon Support Services
Co., B-216898, Sept. 25, 1985, 85-2 CPD Paragraph 334.
The protest is dismissed in part and denied in part.
Harry R. Van Cleve
General Counsel
(1) SAI would be a major subcontractor if NNI were to receive the
award. The protest was filed on behalf of both firms.
(2) Our interpretation of CICA has subsequently been confirmed by
Congress. Department of Defense Authorization Act of 1986, Pub. L. No.
99-145, Section 1304(d) (Nov. 8, 1985) eliminates the reference to
"executive agency" and makes it clear that our CICA bid protest
authority applies to all federal agencies as defined in the Property
Act.
(3) The bid form provided a space in which bidders were to indicate
any specifications to which they took exception.
FILE: B-220354 85-2 CPD 550 DATE: November 13, 1985
MATTER OF: Capitol Hill Blueprint Co.
DIGEST:
BIDS - EVALUATION - DISCOUNT PROVISIONS - PROPRIETY OF EVALUATION
The Government Printing Office, whose procurement regulations
permit the evaluation of offered prompt payment discounts in
evaluating bids, properly reduced a bid offering an eligible
prompt payment discount, thereby displacing a lower net bid, where
the IFB incorporated by reference a provision that such discounts
would be considered.
Capitol Hill Blueprint Co. (CHBP) protests the award of a contract to
ABC Reprographics, Inc., under an invitation for bids (IFB) issued by
the Government Printing Office (GPO) for the reproduction of drawings,
Program 2897-S. CHBP contends that GPO improperly considered prompt
payment discounts in evaluating the bids. We deny the protest.
CHBP bid $252,398.79 net. ABC bid $263,950.65 and offered a
5-percent discount for payment within 20 days. On evaluation of the
bids, GPO reduced ABC's bid by $13,197.53 for the discount, which made
ABC's bid low at $250,753.12. GPO evaluated the discount because the IFB
incorporated by reference the provisions of Contract Terms No. 1, a GPO
document prepared and issued for the benefit of prospective bidders and
contractors, which expressly provides that prompt payment discounts
offering 20 days or more will be evaluated. In this respect, the
discount provision of Contract Terms No. 1 essentially repeats the
provision at section 1e of GPO's Printing Procurement Regulation, which
governs that agency's procurements. 1/ The in-corporation was effected
by the f irst paragraph of the bid sheet, which provided that, by
submitting a bid, "the bidder agrees to all of the provisions of . . .
Contract Terms No. 1" and by the statement in the discount line itself,
"See provision entitled 'Discounts,' in Part 1 of Contract Terms No. 1.
" Also, section 1 of the IFB's General Terms and Conditions provided:
"CONTRACT TERMS NO. 1: Any contract which results from this Invitation
for Bid will be subject to all terms and conditions of . . . Contract
Terms No. 1."
CHBP complains that the invitation's evaluation provision does not
mention prompt payment discounts, but provides only that the low bid
will be determined by multiplying the quoted prices by the estimated
annual units required. CHBP also notes that the IFB's General Terms and
Conditions state that "In case of conflict between these Specif ications
and Contract Terms No. 1, these specif ications will govern." The
protester contends that the evaluation provision and Contract Terms No.
1 conflict as to whether offered discounts will be evaluated and argues
that the evaluation provison thus must govern, so that discounts are not
evaluated.
We find no legal merit in CHBP's position. Bidders were clearly
notified at a number of places in the invitation to refer to the
provisions of Contract Terms No. 1-- with the discount provision noted
specifically--which were incorporated into and made a part of the IFB
and any resulting contract by reference. As to the protester's
particular point, even considering the IFB's evaluation clause as a
"specification" within the meaning of the provision CHBP cites, there is
nothing in the clause's statement that the government will determine the
lowest bid by applying the prices quoted to the number of units required
that either prohibits or is inconsistent with adjusting the quoted
prices by an offered discount. A solicitation must be interpreted as a
whole, giving effect to every word, clause or sentence. Aerodyne
Systems Engineering Ltd., B-216381, June 6, 1985, 85-1 C.P.D. P 646. We
thus agree with GPO that CHBP should have realized that bid prices would
be adjusted for prompt payment discounts of 20 days or more; any
failure to understand this fact was, in our view, the result of a
failure to read and apply all IFB provisions.
The protester also alleges that it is obvious from the other bids
submitted that CHBP was not the only company that did not know that
offered prompt payment discounts would be considered in the evaluation.
Of the five bids received, two offered 20-day discounts; one offered a
10-day discount; and two (including CHBP' s) offered no prompt payment
discounts. CHBP's allegation thus is based only on inference from the
fact that one other bidder offered no discount and one bidder offered a
discount for payment in less than 20 days. ABC, on the other hand,
states that it was fully aware of the discount evaluation provision and
relied on it in submitting a bid. Inferences like the one CHBP draws
here do not satisfy a protester's burden of proof. Stalker Brothers,
Inc., B-217580, Apr. 26, 1985, 85-1 C.P.D. P 476.
Since, in our view, it was clear from the IFB that prompt payment
discounts of 20 days or more would be applied in evaluating bids, GPO
properly reduced the bid of ABC to reflect the prompt payment discount
offered. The protest is denied.
Harry R. Van Cleve
General Counsel
1/ GPO, as a legislative branch agency, is not subject to the Federal
Acquisition Regulation prohibition against evaluating prompt payment
discounts.
FILE: B-220331.2; B-220397 86-1 CPD 232 DATE: March 10, 1986
B-220398
MATTER OF: Exclusive Temporaries of Georgia, Inc.
DIGEST:
BIDS - INVITATION FOR BIDS - DEFECTIVE - EVALUATION PROCEDURE
Where the evaluation scheme in an invitation for bids provides
no reasonable assurance that award will result in the lowest cost
to the government in terms of actual work performed, the
invitation is defective per se and no bid can be evaluated
properly.
Exclusive Temporaries of Georgia, Inc. (ETG) protests the termination
of its contract for labor services awarded by the Internal Revenue
Service (IRS) under invitation for bids (IFB) No. IRS-SE-85-14. ETG
also protests the failure of the IRS to terminate two similar contracts
for which ETG bid that were awarded to other companies under IFB Nos.
IRS-SE-85-18 and IRS-SE-85-19. ETG contends that the IRS unfairly
terminated its contract because the IFB allegedly was defective but did
not terminate the other two contracts even though the IFBs contained the
same defect.
We deny the protest under IFB No. IRS-SE-85-14 (B-220331.2) and
sustain the protests under IFB Nos. IRS-SE-85-18 (B-220398) and
IRS-SE-85-19 (B-220397).
IFB No. IRS-SE-85-14 invited bids to provide general and semi-skilled
manual laborers. The pricing schedule provided separate line items for
regular and overtime hours for full-time and part-time general laborers.
Although the IFB stated that the agency's estimate for both full-time
and part-time laborers was a total of 11,240 regular hours, bidders were
instructed, for evaluation purposes, to base their bids on an estimate
of 11,240 regular hours for each category of laborers (i.e., 11,240
hours full-time and 11,240 hours part-time). Similar separate line
items were provided for the regular and overtime hours for the fulltime
and part-time semi-skilled laborers. Again, although the estimated total
needs for both types of semi-skilled laborers was 3,560 hours, bidders
were instructed to base their bids on an estimate of 3,560 hours for
each of the semi-skilled categories.
The IFB required prices for all line items and stated that the basis
for award would be the aggregate price for each service category (i.e.,
general and semi-skilled), determined by multiplying the unit price for
each item in the category by the estimated quantity for the item and
then totaling the items. The procurement was subject to the Service
Contract Act of 1965, as amended, 41 U.S.C. MM 351-358 (1982), and wage
determinations from the Department of Labor were included in the IFB.
For the regular and overtime hours for the full-time general
laborers, ETG bid $6.27 and $8.42, respectively; it bid $5.28 and
$7.80, respectively for the part-time general laborers. In addition, ETG
bid $10.55 and $14.34 for the regular and overtime hours of the
full-time semi-skilled laborers and $9.72 and $ 14.34 for the part-time
semiskilled laborers. JBS, Inc., whose intent was to provide only;
part-time personnel, bid $10 and $15 for the regular and overtime hours
of the full-time general laborers and $7.75 and $11.63 for the part-time
general laborers. JBS also bid $10 and $15 for the regular and overtime
hours for the full-time semi-skilled laborers and $11.75 and $17.63 for
the part-time semi-skilled laborers.
After evaluation in accordance with the IFB, IRS determined that the
bid of JBS for the general laborers was approximately $40,000 below that
of ETG, the second low bidder and the incumbent contractor. JBS' bid for
the semi-skilled laborers was approximately $30,000 below ETG's bid.
This was so even though ETG's rates for part-time employees were
considerably less than JBS' rates for the same categories; if ETG had
bid $.10 and $.15 for the part-time employees its bid would have been
lower than JBS' bid.
The contracting officer determined that JBS' bid was nonresponsive
because JBS had not bid hourly rates for the full-time laborers at least
equal to those required by the minimum wage determinations in the IFB.
Award was then made to ETG and JBS protested to our Office. During the
review of JBS' protest, IRS determined that JBS' bid was, in fact,
responsive because the Service Contract Act does not establish what a
bidder must bid but only the minimum that a contractor must pay its
employees. 1/ IRS decided, however, that the contract with ETG should be
terminated and the procurement resolicited because the IFB resulted in
bids that could not be evaluated on an equal basis. IRS determined that
an award made under such circumstances did not give assurance that it
would result in the lowest cost. We then dismissed JBS' protest;
subsequently, ETG protested the termination of its contract.
As a general rule, our Office will not review an agency's decision to
terminate a contract for the convenience of the government, since by law
this is a matter of contract administration for consideration by a
contract appeals board or a court of competent jurisdiction. An
exception to this rule arises, however, when, as here, the termination
was based on the agency's determination that the contract was improperly
awarded to the terminated contractor. See Amarillo Aircraft Sales &
Services, Inc., 63 Comp. Gen. 568 (1984), 84-2 C.P.D. P 269; Medical
Gas & Respiratory Services, Inc., B-216632, Feb. 27, 1985, 85-1 C.P.D. P
246.
An IFB's evaluation scheme must comply with the statutory requirement
for full and open competition. Thus, the evaluation scheme must be
designed to give reasonable assurance that an award to the lowest
evaluated bidder will result in the lowest cost to the government in
terms of actual performance; if it does not, the IFB is defective per
se and no bid can be evaluated properly. T. L. James & Co., B-219444,
Sept. 17, 1985, 64 Comp. Gen. , 85-2 C.P.D.P 296; Southeastern
Services, Inc., et al., 56 Comp. Gen. 668 (1977), 77-1 C. P.D. P 390.
Furthermore, an evaluation method that incorporates more or less work
than the agency expects to be needed does not obtain the benefits of
full and open competition as required by the procurement statutes. Id.
In this case, the evaluation was based on total prices for an
estimated 11,240 regular hours for full-time general employees plus
11,240 regular hours for part-time general employees, when the agency's
actual requirement was for only an estimated total of 11,240 hours that
could be met by using full-time or part-time employees, or both. A
similar "double counting" occurred with respect to semiskilled labor.
Thus, the evaluation included 100 percent more hours than the IRS
anticipated would actually be needed. Moreover, by evaluating bids on
the basis of total prices for supplying all the work with full-time
employees plus all the work with part-time employees without having
required bidders to designate what percentage of the work would actually
be performed by each category, the agency could not reasonably determine
which bid would actually result in the lowest cost to the government.
This is well illustrated by the fact that the evaluation scheme
permitted JBS to submit the low, responsive bid by skewing it prices so
that they were low only in the full-time categories, for which it had no
intention of supplying personnel. 2/ Moreover, an award to any of the
other bidders, including ETG, who based their bids on the IRS'
overstated needs could give no better assurance that it would result in
the lowest cost to the government.
Therefore, IFB No. IRS-SE-85-14 and the competition based on it were
defective, and the termination of ETG's contract to permit
resolicitation under a revised solicitation was reasonable and proper.
See Amarillo Aircraft Sales & Services, Inc., 63 Comp. Gen. 568, supra.
ETG's protest on this matter is denied.
We find the same deficiencies in IFB No. IRS-SE-85-18 and IFB No.
IRS-SE-85-19, which contained the same evaluation scheme as IFB No.
IRS-SE-85-14. We are not persuaded by the argument of IRS that because
no bidder bid nominal rates (as JBS did under IFB No. IRS-SE-85-14), all
bids could and were evaluated on an equal basis with no prejudice to any
bidder. For example, we note that the award under IFB No. IRS-SE-85-18
went to JBS because its price for full-time personnel and its aggregate
bid were low. JBS's price for part-time personnel, however, was higher
than that of ETG.
In our view, no award could be made under any of the three IFBs with
any reasonable assurance that the bidders competed and were evaluated on
a common basis and that the award would result in the lowest cost to the
government. We therefore sustain ETG's protests with respect to the
contracts awarded under IFB Nos. IRS-SE-85-18 and IRS-SE-85-19. These
contracts were awarded for one year beginning on October 1, 1985, and
are about 50 percent complete. We recommend that IRS recompete these
requirments with a revised solicitation and then terminate the present
contracts for the convenience of the government.
ETG's protest under IFB No. IRS-SE-85-14 is denied. Its protests
under IFB Nos. IRS-SE-85-18 and IRS-SE-85-19 are sustained.
Acting Comptroller General
of the United States
1/ The fact that a firm bids a wage rate below the minimum Service
Contract Act rate does not render the bid nonresponsive. See NonPublic
Educational Services, Inc., B-204008, July 30, 1981, 81-2 C.P.D. P 69.
2/ The agency states that JBS has admitted that its actual intent was
to provide the required services by using only part-time personnel.
Matter of: Walter D. Oxford - Overtime Compensation for "Call Back"
Work
File: B-220330
Date: September 11, 1986
COMPENSATION - OVERTIME - IRREGULAR, UNSCHEDULED "CALL -BACK"
OVERTIME
A civilian wage grade employee had finished his regular shift, but
had not yet entered his car to return home, when he was directed to
return to work for an emergency. Since this was a continuation of his
regular shift and not a return to his place of employment, the employee
is only entitled to overtime compensation for the time he actually
worked and not to 2 hours "callback" overtime compensation.
This responds to a November 5, 1985, joint request from Mr. Patrick
J. Meade, Vice President, Tidewater Virginia Federal Employees Metal
Trades Council, and Capt. L. F. Norton, Commanding Officer, Naval Air
Station, Oceana. 1/ The parties request a decision whether the
"callback" provisions of 5 C.F.R. Sec. 532.503(c) and Federal Personnel
Manual ( FPM) Supplement 532-1 entitle Mr. Walter D. Oxford to 2 hours
of overtime compensation when he was required to return to work for 23
minutes after his regular shift had ended. We hold that, because Mr.
Oxford's return to work was in the nature of a continuation of his
regular shift rather than a return to his place of employment, he may
only receive overtime compensation for the time he actually worked.
This case comes to us as a joint request for decision pursuant to the
labor-management relations procedures set forth in 4 C.F.R. Part 22
(1985).
Mr. Oxford, a heavy mobile equipment mechanic, was employed as a wage
grade (prevailing rate) employee by the U.S. Navy Department at Naval
Air Station Oceana, Virginia Beach, Virginia. On April 16, 1985, he
completed his regular shift, clocked out, and left the building. While
he was unlocking his car to go home, he was directed by his supervisor
to return to work because of an emergency situation. Mr. Oxford's time
card shows that he punched out originally at 4 p.m., punched backed in
at 4:02 p.m., and punched out after the emergency at 4:25 p.m.
A grievance was filed by the union on behalf of the employee. The
Commanding Of f icer denied the grievance on July 11, 1985. He found
that Mr. Oxford should only be paid overtime for the time he actually
spent working since the overtime was a continuation of his regular
shift. The Metal Trades Council contends that Mr. Oxford should be paid
for 2 hours of overtime under the callback provision of FPM Supp. 532-1
since he had completed his shift, punched out, and was called back to
work. 2/
Generally, employees can only receive overtime compensation for the
time that they actually perform work. One specific exception to this
rule for wage grade employees is set forth in 5 C.F.R. Sec. 532.503(c)
(1985) as follows:
"(c) Callback overtime work. Irregular or occasional overtime
work performed by an employee on a day when work was not regularly
scheduled for the employee or for which the employee has been
required to return to the place of employment shall be considered
to be at least two hours in duration for the purpose of overtime
pay, regardless of whether the employee performs work for two
hours."
This regulatory provision for prevailing rate employees parallels the
statutory provision for General Schedule employees in 5 U.S.C. Sec.
5542(b)(1). See B-177313, November 8, 1972. The callback provision is
intended to compensate employees for the inconvenience of having to
prepare for work, leave their homes, and travel to their places of
employment. See 65 Comp. Gen. 49 (1985); 40 Comp. Gen. 379 (1960). We
have also held that employees who perform unscheduled overtime that
merges with their regular schedules are not entitled to the minimum
2-hour pay since it does not involve travel to the worksite induced
solely by a recall. 65 Comp. Gen. 49, supra, at 51.
Even if overtime work is unscheduled, it does not entitle an employee
to extra callback compensation if the work is performed in continuation
of the regularly scheduled shift. 45 Comp. Gen. 53 (1965). Punching a
time clock is neither material nor controlling in the determination of
whether an employee has been called back to his place of employment. 40
Comp. Gen. 379, supra, at 382 (Question 1b).
In the present case, the argument that Mr. Oxford should receive
extra overtime compensation is that he had completed his regular shift
and punched out. He did not, however, experience the inconvenience of
having to prepare for work, of leaving his home, or of traveling to his
place of employment. Mr. Oxford did not leave the parking lot and did
not even get into his car. Therefore, we conclude that Mr. Oxford's
overtime was in the nature of a continuation of his regular shift which
does not entitle him to callback pay. We do not believe that the 2
minute break satisfies the regulatory requirement of 5 C.F.R. Sec.
532.503(c) that "the employee has been required to return to the place
of employment * * *."
For the reasons discussed above, Mr. Oxford may not receive overtime
compensation in excess of that for which he actually worked.
Comptroller General
of the United States
FOOTNOTES
1/ Reference 12000, Ser OID/2917.
2/ The collective bargaining agreement between the union and the
Naval Air Station also provides for 2 hours callback pay (Art. IX, Sec.
10).
FILE: B-220329 86-1 CPD 11
DATE: January 6, 1986
MATTER OF: Rodgers-Cauthen, Barton-Cureton, Inc.
CONTRACTS - PROTESTS - MOOT, ACADEMIC, ETC. QUESTIONS - SOLICITATION
CANCELED
Cancellation of an RFQ to establish a blanket purchase agreement for
the procurement of advertising services renders protest of evaluation
procedures academic.
Rodgers-Cauthen, Barton-Cureton, Inc. (RCBC), protests the award of a
blanket purchase agreement (BPA) to Chernoff Silver and Associates under
request for quotations (RFQ) No. F38601-84-A0074 and the subsequent
cancellation of the BPA by Shaw Air Force Base, South Carolina.
We deny the protest.
The BPA was for the provision of recruit advertising services for the
3537th United States Air Force Recruiting Squadron. RCBC alleges that
it was technically qualified and the lowest-priced offeror and should
have received the award.
In its report, the Air Force takes issue with the merits of RCBC's
protest but also states that it has decided a blanket purchase agreement
is an inappropriate vehicle to purchase these recurring advertising
services and has therefore canceled the BPA and will resolicit and award
a requirements type contract. RCBC states that it should still receive
the award since its offered prices and evaluation scores are now public
knowledge. RCBC provides detailed comment on the alleged improprieties
in the Air Force's evaluation of its offer.
In a negotiated procurement, the contracting agency need only
establish a reasonable basis to support a decision to cancel a
solicitation. Hewitt, Inc., B-219001, Aug. 20, 1985, 85-2 C.P.D.
Paragraph 200. We have held with respect to a negotiated contract that
despite the concern over disclosure of prices when a solicitation is
canceled, the changed nature of a contract being solicited is an
adequate basis for cancellation. N.V. Philips Gloellampenfabriken,
B-207485.3, May 3, 1983, 83-1 C.P.D. Paragraph 467, at pp. 14, 15.
Here, the Air Force determined that a BPA was an improper contract type
for procuring these services. The protester has offered no reasons, nor
do we find any, why the Air Force's judgment is erroneous in this
regard. Regarding the exposure of RCBC's prices, an impermissible
auction atmosphere is not created by cancellation and resolicitation
after prices are exposed where these actions are adequately justified.
N.V. Philips Gloellampenfabriken, supra.
Since the type of solicitation and resultant BPA have been determined
to be improper, which RCBC does not challenge, RCBC's protest that its
offer was improperly evaluated and that it should receive the award has
been rendered academic.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220327.2; B-220327.3 86-1 CPD 395 DATE: April 23, 1986
MATTER OF: The Department of the Navy; Yanke Container,
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
RECONSIDERATION REQUESTS - ERROR OF FACT OR LAW - NOT ESTABLISHED
1. The General Accounting Office affirms prior decision where
the request for reconsideration does not establish that the
decision was based on errors of fact or law.
GENERAL ACCOUNTING OFFICE - RECOMMENDATIONS - CONTRACTS - PRIOR
RECOMMENDATION - WITHDRAWN - NOT IN BEST INTEREST OF GOVERNMENT
2. The General Accounting Office (GAO) withdraws its
recommendation to terminate an existing contract, based on belief
that performance had been suspended, when the agency points out in
its request for reconsideration that because it was notified of
the protest more than 10 days after award, it was not required to
suspend performance. Because termination and award to the
protester is therefore neither practicable nor in the best
interest of the government, GAO now finds the protester entitled
to the costs of filing and pursuing the protest and of bid
preparation.
The Department of the Navy and Yanke Container, Inc. request
reconsideration of our decision in Wirco, Inc., B-220327, Jan. 29, 1986,
65 Comp. Gen. , 86-1 CPD P 103, and of the corrective action
recommended in that decision. We initially sustained Wirco's protest
against the rejection of its low bid for failure to acknowledge an
amendment to invitation for bids (IFB) No. N00024-85-B-6270, covering a
first article and various production quantities of torpedo shipping
containers. We found that changes made by the amendment were not
material. Yanke essentially disagrees with that finding and argues that
the bid was nonresponsive. Additionally, both Yanke and the Navy argue
that due to the extent of performance, it is not practicable to
terminate the contract awarded to Yanke and make award to Wirco.
We affirm our decision. However, we withdraw our recommendation for
corrective action, as discussed below.
Yanke first contends that our initial decision is legally incorrect
in that we found that the unacknowledged amendment did not materially
affect delivery requirements. 1/ We therefore held that the protester's
failure to acknowledge the amendment properly could be treated as a
minor informality because Wirco had submitted a price for and was
legally obligated to provide the correct total number of containers. As
we stated, although the Navy theoretically could have required delivery
either sooner or later and in various other combinations, it did not do
so. We believed that the effect on price, if any, of the change in the
delivery schedule was negligible.
Yanke has provided no evidence to the contrary in its request for
reconsideration. We remain unconvinced that the addition of 2
containers to each of 5 previously scheduled deliveries would have more
than a negligible effect on price, and we continue to find that the
change was a matter of form over substance, akin to a typographical
error.
Second, Yanke argues that the amendment materially affected price and
quantity because, by deleting line item No. 0007, it reduced the
required total quantity of containers by 250. Line item No. 0007 was an
option item that was not evaluated; therefore, its deletion had no
effect on the outcome of the bidding.
Yanke next argues that Wirco's bid was inadequate because it did not
include an alternate offer based on a waiver of first article testing.
Yanke could have raised this argument in its comments to the agency
report, but did not do so. It is therefore an untimely basis for
reconsideration. We cannot permit parties to present their claims in a
piecemeal fashion and thereby disrupt procurements for unnecessarily
long periods of time. See Presto Lock, Inc.--Request for
Reconsideration, B-218766.2, Nov. 21, 1985, 85-2 CPD P 581. However, we
note that alternate bids on offer B were not required unless an offeror
believed that it qualified for waiver of the first article requirements.
Yanke's remaining argument--that Wirco did not return the entire bid
package--was previously raised by the agency. Although not discussed in
our initial decision, the argument provides no basis to change that
decision. Failure to return part of a bid package does not
automatically render a bid nonresponsive. Rather, the bid is responsive
if it is submitted in such a form that acceptance would create a valid
and binding contract and require the bidder to perform in accordance
with all the material terms and conditions of the invitation. Werres
Corp., B-211870, Aug. 23, 1983, 83-2 CPD P 243. This is the case where
the omitted pages are incorporated by reference in that part of the bid
package returned to the contracting officer. Here, since the face sheet
of Wirco's standard form 33 indicated that it was page 1 of 78 pages and
included attachments (which in turn included the delivery information),
the omitted pages are considered incorporated.
Our Office will not reverse or modify a decision unless the request
for reconsideration specifies information not previously considered or
demonstrates that errors of fact or law exist in the original decision
that warrant reversal. 4 C.F.R. Sec. 21.12(a) (1985); Evans, Inc.--
Request for Reconsideration, B-218963.2, June 26, 1985, 85-1 CPD Sec.
730. Here, none Yanke's arguments establishes that our prior decision
was incorrect, but only that Yanke disagrees with our findings. We
therefore affirm our initial decision.
The Navy's and Yanke's request for modif ication of our
recommendation is based on the extent of performance of Yanke's
contract. The Navy acknowledges that it "inadvertently" failed to
notify either our Office or Wirco that it had not suspended contract
performance, but states that under the Competition in Contracting Act of
1984 (CICA), 31 U.S.C.A. Sec. 3553(d) (1) (West Supp. 1985), there was
no requirement to suspend performance. 2/
The Navy reports that Yanke has been performing and incurring costs
for approximately 5 months and that nearly 75 percent of the contract is
complete in terms of receipt of materials, plant production readiness,
and fabrication of components; only assembly and delivery remain. The
Navy notes that approximately one-half of the total contract price of
$1,032,208 represents material cost. Further, the Navy reports that
$187,850 in progress payments have been made and that vouchers for an
additional $200,000 have been submitted. According to the agency, in
view of the extent of Yanke's performance, termination costs could
exceed 75 percent of the contract price. Additionally, the agency
states that it lacks sufficient funds both to pay termination costs to
Yanke and award a new contract to Wirco. Accordingly, the Navy requests
that we modify our recommendation to permit Yanke to complete the
contract for the base requirements. The Navy agrees not to exercise the
options in Yanke's contract.
In determining what is the appropriate corrective action on an
improperly awarded contract when the agency is not required to suspend
performance, we consider all the circumstances surrounding the
procurement, i.e., among other things, the seriousness of the
procurement deficiency, the degree of prejudice to other interested
parties or to the integrity of the competitive procurement system, the
good faith of the parties, the extent of performance, the cost to the
government, the urgency of the procurement, and the impact of the
recommendation on the contracting agency's mission. 4 C.F.R. Sec.
21.6(b).
Upon reconsideration, we do not believe that termination of the
contract is in the best interest of the government. We have no basis to
question the Navy's determination of the probable costs of termination.
3/ In similar circumstances, we have found that the advanced stage of
the procurement and high termination costs support a finding that
termination is not feasible. See NI Industries, Inc.-- Reconsideration,
B-218019.2, Aug. 8, 1985, 85-2 CPD P 145. Therefore, we withdraw our
previous recommendation and instead recommend that Yanke complete
performance for the base requirement only.
We find, however, that the protester is entitled to costs. Our
regulations provide that the reasonable costs of filing and pursuing a
protest, including attorneys' fees, may be recovered where the agency
has unreasonably excluded the protester from the procurement, except
where this Office recommends that the contract be awarded to the
protester and the protester receives the award. 4 C.F.R. Sec. 21.6(e).
Additionally, the recovery of costs for bid preparation is allowed where
(1) the protester was in line for award but was unreasonably excluded
from the competition and (2) where the remedy recommended is not one
delineated in 4 C.F.R. Sec. 21.6 (which does not include refraining from
exercising options under the contract). Id.; Consolidated Construction,
Inc., B-219107.2, Nov. 7, 1985, 85-2 CPD Sec. 529.
In comments on the request for reconsideration, Wirco indicates that
it believes it is also entitled to lost profits if Yanke is allowed to
perform the contract. However, our Office has recognized the general
rule that anticipated profits may not be recovered even in the presence
of wrongful government action. See Introl Corp., 64 Comp. Gen. 672
(1985), 85-2 CPD Sec. 35.
Our previous finding, which we affirm, is that the agency's rejection
of Wirco's bid as nonresponsive unreasonably excluded Wirco from
receiving the award. Therefore, Wirco is entitled to recover its costs
of filing and pursuing the protest and of bid preparation. Wirco should
submit an accounting to the Navy, and the protester and procuring agency
should attempt to reach agreement on the amount due. If they cannot do
so in a reasonable time, our Office will determine the amount. 4 C.F.R.
Sec. 21.6(f).
Our prior decision is affirmed and our recommendation withdrawn.
Comptroller General
of the United States
FOOTNOTES
1/ The original bid schedule called for 35 containers; the delivery
schedule attached to the IFB, however, provided for only 5 deliveries of
5 containers each, for a total of 25. The amendment added 2 containers
to each of the previously scheduled deliveries, for a total of 35.
2/ Under CICA, as implemented by the Federal Acquisition Regulation,
Sec. 33. 104(c) (5) (FAC 84-9, June 20, 1985), an agency generally must
suspend oerformance when, within 10 calendar days of award, it receives
notice from our Office that a protest has been filed here. In this
case, the Navy awarded the contract to Yanke on September 10, 1985; we
received and notified the Navy of the protest on September 23. Thus,
the CICA stay provision was not applicable to this contract. We,
however, considered Wirco's protest to be timely under our Bid Protest
Regulations, 4 C.F.R. Sec. 21.2(a) (2), because we received it within 10
working days of award. This finding of timeliness, for purposes of
consideration of a protest on the merits, does not affect the shorter
time limit for purposes of invoking the CICA stay provision.
3/ Wirco suggests that Yanke is in default of the contract for
failure to deliver within 90 days after award, and, therefore, the
government is not liable for termination costs. According to the Navy,
however, the 90-day requirement was for delivery of a first article
(which has been waived for Yanke). Production quantities are not
scheduled for delivery until August 1986, the Navy states.
FILE: B-220326.2 85-2 CPD 672
DATE: December 16, 1985
MATTER OF: Silent Hoist & Crane Co., Inc. -- Request for
Reconsideration
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF COMMENTS ON AGENCY'S REPORT
GAO will not reopen a protest file that was closed because the
protester's comments on the agency report were not received at GAO
within 7 working days after the protester received the report as
required by Bid Protest Regulations.
Silent Hoist & Crane Co., Inc., requests that we reopen its protest
concerning the award of a contract under solicitation No.
DAHC23-85-B-0008 issued by the Oakland Army Base, California. We closed
the file on the protest because the protester failed to submit its
comments on the agency report in a timely manner. We decline to reopen
the case.
Silent Hoist contends that the comments it sent to our Office in
response to the Army's report on the protest were filed within the
required time period under our Bid Protest Regulations, 4 C.F.R. part 21
(1985). The protester states that it received the agency report on
October 30, 1985, and on November 8 mailed its comments to our Office
via regular mail. We received the comments on November 18. The
protester believes that it met the requirements of our regulations
because it mailed the comments within 7 days of the time it received the
agency report.
Our regulations specifically provide that comments on the agency's
report "shall be filed" with this Office within 7 (working) days after
receipt by the protester of the report, and that failure to file
comments (or to file a statement requesting that the protest be decided
on the existing record) within the 7-day period will result in the
dismissal of the protest. 4 C.F.R. Section 21.3(e). Further, our
regulations define the term "filed" regarding protests as receipt of the
submission in this Office. 4 C.F.R. Section 21.2(b). This term refers
not only to the original protest submission, but also refers to comments
on the agency's report. Coliseum Construction, Inc., B-218881.2, July
24, 1985, 85-2 CPD Paragraph 78.
Since we did not receive either Silent Hoist's comments or a request
that we consider the protest on the basis of the existing record until
November 18, more than 7 working days after the time Silent Hoist
received the agency report on October 30, the protest was properly
dismissed pursuant to 4 C.F.R. Section 21.3(e).
Harry R. Van Cleve
General Counsel
FILE: 220320.2 86-1 CPD 501 DATE: May 29, 1986
MATTER OF: ABC Building Services--Request for
Reconsideration
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
RECONSIDERATION REQUESTS - ERROR OF FACT OR LAW - NOT ESTABLISHED
1. Dismissal of one basis of protest is affirmed where protester,
having stated one version of facts relating to timeliness of protest
during initial protest, recharacterizes facts in request for
reconsideration in an effort to cure untimeliness. A protester must
present all relevant facts known to it during initial consideration of
the protest.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - NEW ISSUES - UNRELATED TO ORIGINAL PROTEST BASIS
2. Supplemental protest against alleged ambiguity in a solicitation
is not encompassed within original protest against unfair treatment of
protester occurring during proposal evaluations and unrelated to the
alleged ambiguity; the supplemental basis of protest must independently
meet timeliness requirements.
ABC Building Services requests reconsideration of our decision in ABC
Building Services, B-220320, Jan. 27, 1986, 86-1 CPD P 91. In that
decision, we denied in part and dismissed in part ABC's protest against
an award to W&F Building Maintenance Co., Inc., under request for
proposals (RFP) No. 2-31448, issued by the National Aeronautics and
Space Administration (NASA), Ames Research Center, Moffett Field,
California. ABC contends that we wrongly dismissed one ground of its
protest.
We affirm our prior decision dismissing one basis of ABC's protest.
ABC filed its initial protest with our Office in a mailgram on
September 23, 1985. The firm alleged that NASA unfairly benefited the
incumbent contractor, W&F, by delaying the negotiation process and
failed to seek best and final offers from each offeror in the
competitive range before eliminating ABC on the basis of its higher
probable costs. In a subsequent letter dated October 7 and filed on
October 15, ABC stated that, in light of a debriefing held on September
26, the firm desired to clarify the bases for its protest. In this
letter, ABC first claimed that the historical staffing levels in the
solicitation were ambiguous. In responding to the administrative
report, in which NASA questioned the timeliness of ABC's new basis of
protest, ABC stated that it "first became aware of the discrepancy at
the debriefing." Since the debriefing occurred more than 10 working days
before the issue was presented to our Office, we dismissed that portion
of the protest. See 4 C.F.R. Sec. 21.2(a)(2) (1985).
ABC now asks that we reconsider our dismissal of the issue concerning
an ambiquity in the historical staffing levels, contending that we erred
in determining when the protester knew the basis for its protest, and,
alternatively, that the issue was effectively raised in its original
protest mailgram. The firm has not questioned the remainder of our
decision denying the other bases of its protest.
The protester argues that in referring to the "debriefing" at which
it first became aware of the alleged ambiguity, ABC intended to include
not only the September 26 meeting with NASA, but also "further
debriefing discussions" subsequently conducted with NASA officials by
telephone. It was only during one of the later discussions on October
2, according to ABC, that it "realistically became aware" of the alleged
ambiguity.
ABC's October 7 letter and its October 31 comments on the
administrative report clearly use the term "debriefing" to apply solely
to its September 26 meeting with NASA. In the first paragraph of the
October 7 letter, the protester stated that "a debriefing was held" at
Ames Research Center on September 26, and that " s ubsequent to
debriefing," there were several telephone conversations. Similar
language appears in the October 31 letter. Having stated one version of
the facts to establish timeliness during its initial protest, ABC's
recharacterization of those facts in an effort to cure untimeliness does
not establish an error of fact or law in our prior decision. See NCR
Corporation, Micrographics Systems Division--Reconsideration,
B-207604.2, Sept. 28, 1982, 82-2 CPD P 292. A protester must present
all facts that are relevant and known to it during our consideration of
the protest. We will not take into account evidence on reconsideration
that a party could have but did not furnish earlier. SAFE Export
Corporation--Reconsideration, B-20550 1.2, Jan. 17, 1983, 83-1 CPD P
40.
ABC argues in the alternative that its protest of an ambiguity in the
solicitation was effectively raised in its initial September 23
mailgram. In that filing, ABC stated that NASA's unreasonable delay in
the evaluation and improper rejection if its proposal "afforded the
present contractor an unfair advantage." This broad language, according
to the protester, encompassed any agency action that provided an unfair
advantage to W&F, and ABC's specific allegation that the solicitation
was ambiguous merely clarified and narrowed the basic protest.
We disagree. ABC first complained that actions taken by NASA during
the agency's evaluation of proposals were unfair. Whether the
solicitation as issued contained an ambiguity that worked to the
advantage of the incumbent is an independent basis for protest unrelated
to ABC's other allegations. It must independently satisfy our
timeliness requirements. See Professional Review of Florida, Inc., et
al., B-215303.3 et al., Apr. 5, 1985, 85-1 CPD P 394. As discussed
above, this supplemental basis for protest does not independently meet
the timeliness requirements set forth in 4 C.F.R. 21.2(a)(2).
We affirm our dismissal of one basis of ABC's protest.
Harry R. Van Cleve
General Counsel
FILE: B-220320 86-1 CPD 91
DATE: January 27, 1986
MATTER OF: ABC Building Services
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION - CRITERIA
- APPLICATION OF CRITERIA
1. Protest that an agency improperly considered the cost of
extending a predecessor contract when awarding the successor contract is
denied where the record contains no evidence that the agency considered
such alleged economic incentives in calculating offerors' probable
costs.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
COMPETITIVE RANGE EXCLUSION - REASONABLENESS
2. Federal Acquisition Regulation permits the National Aeronautics
and Space Administration to use alternative source selection procedures,
under which, following discussions, all offerors in the competitive
range must be given a reasonable opportunity to revise and clarify their
proposals by a common cutoff date. Since these procedures are
published, protester should have known that it should have presented its
most advantageous offer or risk elimination from the competitive range.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - DISCUSSION WITH ALL
OFFERORS REQUIREMENT - "MEANINGFUL" DISCUSSIONS
3. When National Aeronautics and Space Administration considers an
offeror's level-of-effort and probable costs to be appropriate for the
technical approach selected, the agency is not required to advise the
offeror that its costs may be so high that it may be eliminated from the
competitive range, since this is a weakness inherent in the offeror's
management approach.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
TECHINICAL SUPERIORITY V. COST
4. When a solicitation states that the Source Selection Official can
determine the weight to be accorded costs factors only after he has
determined the relative merits of proposals from a technical standpoint
and has judged the significance of experience and past performance, a
cost-technical tradeoff and an award to a lower rated but also lower
priced offeror is not legally objectionable.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - NEW ISSUES - UNRELATED TO ORIGINAL PROTEST BASIS
5. Where a protester initially files a timely protest and later
supplements it with new and independent grounds of protest, the
later-raised allegations must independently satisfy the timeliness
requirements of Bid Protest Regulations.
ABC Building Services protests the proposed award to W&F Building
Maintenance Co., Inc., under request for proposals (RFP) No. 2-31448,
issued by the National Aeronautics and Space Administration (NASA), Ames
Research Center, Moffett Field, California. ABC contends that delays in
the negotiation process provided an unfair advantage to the incumbent
contractor, W&F; that NASA improperly failed to seek best and final
offers from each offeror in the competitive range before eliminating ABC
on the basis of higher probable costs; and that the estimate of the
historical staffing levels included in the RFP was ambiguous and also
gave the incumbent an unfair advantage.
We deny the protest in part and dismiss it in part.
BACKGROUND
In the solicitation, issued as a 100-percent small business set-aside
on February 8, 1985, NASA sought janitorial and laboratory glassware
sterilization services. The cost-plus-fixed-fee contract to be awarded
covers a base period of 2 years plus 3 option years (of which only the
first was to be priced by offerors and evaluated by NASA). The amended
closing date for receipt of initial proposals was April 9, 1985.
The RFP set forth the following evaluation criteria:
1. Mission Suitability;
2. Cost;
3. Experience and Past Performance; and
4. Other (including but not limited to financial condition and labor
relations considerations).
The solicitation further provided that these factors were generally
of equal importance.
Only Mission Suitability was numerically scored, with NASA
considering four subcriteria: (1) understanding the requirement; (2)
key personnel; (3) corporate and company resources; and (4) management
plan. Under the Cost criterion, NASA analyzed proposed costs and fees
to determine their validity, the probable cost to the government of
accepting a particular offer, and differences among offerors in the
competitive range. To facilitate offerors' calculations of proposed
costs, NASA included in the solicitation a list of job titles and the
historical staffing levels (for example, 40 janitors/windowwashers) for
each.
Nine offerors responded to the solicitation, and NASA initially
included four in the competitive range. /1/ Of these, ABC received the
highest score for Mission Suitability and an adjective rating of
excellent. W&F was ranked second for this factor, receiving an
adjective rating of good. Offerors were requested to respond to written
questions and submit any proposed revisions by July 15, 1985. NASA
considered ABC's revised proposal excellent; W&F's proposal, although
still considered good, fell to third after this evaluation.
NASA's evaluation with respect to the three other evaluation factors
was based on initial submissions; the offerors were not questioned in
these areas. For the Experience and Past Performance and Other factors,
evaluators found the proposals submitted by ABC and W&F to be virtually
equal. With respect to Cost, however, evaluators found there was an 8.6
percent difference, in W&F's favor, between these two proposals. They
considered this amount significant.
NASA's Source Selection Official ultimately concluded that while
ABC's technical proposal was clearly superior, this superiority was
offset by the firm's high probable costs. W&F's technical proposal,
while lower ranked, was believed to demonstrate that the firm could
satisfy the agency's minimum needs at a lower probable cost. The agency
states that this cost difference was the "overriding factor" in the
Source Selection Official's recommendation to commence final
negotiations leading to a contract with W&F. NASA, however, has
postponed award pending the outcome of this protest, with W&F performing
under an extension to its existing contract in the interim.
ABC's PROTEST
ABC first contends that NASA unreasonably delayed evaluation,
requiring offers to be extended until September 30, 1985. The protester
alleges that this benefited the incumbent contractor by leaving
insufficient time for startup by any other offeror. An extension of
W&F's contract beyond an agreed-upon 30-day phaseout period, ABC
maintains, would be at considerable cost to the government. These
potential costs, ABC states, provided an economic incentive to NASA to
award to the incumbent.
The record does not support ABC's contention that NASA considered
this hypothetical economic incentive when deciding to award the contract
to W&F. It demonstrates that NASA evaluated proposed costs and fees and
calculated probable costs for all offerors, adjusting for such factors
as number of proposed employees and escalating labor rates. The record,
however is completely devoid of any evidence giving credence to ABC's
speculations. Accordingly, this basis of protest is denied.
ABC's second ground of protest is that NASA failed to seek best and
final offers before eliminating its proposal on the basis of higher
probable costs. By letters dated June 28, NASA requested those offerors
whose proposals had been included in the competitive range to respond to
enclosed questions and submit all other proposed revisions by July 15,
1985. ABC contends that these letters did not comport with the Federal
Acquisition Regulation (FAR), 48 C.F.R. Section 15.611 (1984), which
sets forth the information required to be included in a request for best
and final offers. ABC alleges that the letters improperly (1) failed to
advise offerors that discussions had been completed; (2) failed to give
notice that best and final offers were being solicited; and (3) failed
to provide information concerning the handling of late submissions.
ABC does not explicitly argue that the discussions that preceded the
request for revised proposals were not meaningful or that NASA failed to
point out weaknesses or deficiencies in its cost proposal. Rather, it
only appears to be arguing that it should have had yet another
opportunity to revise its proposal. NASA responds that requesting and
receiving revised proposals at the conclusion of discussions was
tantamount to requesting and receiving best and final offers from all
except the offeror ultimately selected -- on the basis of the revised
proposals -- for final negotiations.
Initially, we note that NASA conducted this procurement under its
alternative source selection procedures, 48 C.F.R. Section 1815.617-71
(1984), and in accord with its Source Selection Board Manual. Use of
the alternative procedures is permitted by the FAR, 48 C.F.R. Section
15.613. The NASA regulation provides that in negotiating a cost-type
contract, the contracting officer, at the conclusion of discussions,
shall give each offeror in the competitive range a reasonable
opportunity to revise and clarify its proposal by a common cutoff date.
48 C.F.R. Section 1815.613-71(b)(5).
We find that NASA complied with the above-cited regulation, since it
directed written questions to each offeror and afforded each the
opportunity to revise its proposal by July 15, 1985. We think that in
this case, NASA's actions can be characterized as a revision of the
competitive range, eliminating ABC as a result of its higher probable
costs. NASA's alternative source selection procedures, which do not
specifically mention best and final offers, are published, and the
protester therefore has constructive knowledge of them. ABC therefore
should have known that it should have presented its most advantageous
offer or risk elimination from the competition.
To the extent that ABC is arguing that NASA should have advised it
that its probable costs were considered too high, the record indicates
that NASA specifically did not discuss this because it felt that ABC's
proposed level-of-effort and probable costs were appropriate for the
approach set forth in the firm's Mission Suitability proposal. Under
these circumstances, we do not believe discussions were required, since
NASA considered this to be a weakness inherent in ABC's management
approach. See FAR, 48 C.F.R. Section 15.601(d)(1); 48 C.F.R. Section
1815.613(b)(5)(c); Physicon, Inc., B-219967.2, Dec. 27, 1985, 85-2 CPD
. . . . When ABC's costs remained high in its revised proposal, NASA
reasonably could have eliminated the firm from the competitive range.
Nor do we find, as ABC implies, that the Source Selection Official
was prohibited from making the cost-technical tradeoff that resulted in
the selection of W&F. While the solicitation stated that costs and
other evaluation factors were generally considered equal, it did not
give each factor a precise weight. Rather, it stated that:
"Cost factors are not scored because the weight to be accorded
to them can be judged by the Source Selection Official only after
he has determined the relative merits of the proposals from a
Mission Suitability standpoint and the significance of the
differences in this regard and after he has judged the
significance of Experience and Past Performance factors."
This, in our opinion, permits the type of discretion NASA exercised
here in making the decision to award the contract to W&F after receipt
of revised proposals. Consequently, ABC's second basis of protest is
denied.
ABC's last contention is that the historical daily staffing levels
included in the solicitation were ambiguous, giving the incumbent
contractor an unfair competitive advantage. ABC maintains that it
considered the solicitation's staffing levels as excluding vacation and
sick leave, and that it therefore added labor hours for these purposes.
However, during a debriefing on September 26, 1985, ABC discovered that
NASA and W&F interpreted the staffing levels as already including
vacation and sick leave. According to ABC, this latent ambiguity
accounts for the difference between its own and W&F's proposed costs.
NASA contends that this argument is untimely because it is based upon
an alleged impropriety apparent in the solicitation, and therefore
should have been filed by the closing date for receipt of initial
proposals. We find this basis of protest untimely for a different
reason. ABC first raised it in a letter dated October 7, 1985;
however, we did not receive this letter until October 15. Under our Bid
Protest Regulations, new and independent grounds of protest must
independently satisfy our timeliness requirements. Star Line
Enterprises, Inc., B-210732, Oct. 12, 1983, 83-2 CPD Paragraph 450.
Protests based on other than alleged solicitation defects must be filed,
meaning received, not later than 10 days after the basis of protest is
known or should have been known, whichever is earlier. 4 C. F.R.
Section 21.2(a)(2). Here, ABC admittedly learned of this new basis of
protest during the September 26 debriefing, but it did not protest
within 10 days thereafter. We therefore will not consider the matter.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
(1) The offerors included in the competitive range were ABC, W&F,
Dragon Services, Inc., and Professional/Ohmar, a Joint Venture. The
offers submitted by Dragon Services and Professional/Ohmar were not as
highly rated as the ones submitted by ABC and W&F, and they are not at
issue here.
FILE: B-220316 85-2 CPD 368
DATE: September 30, 1985
MATTER OF: T. S. Head & Associates, Inc.
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTOR
1. When a protest is filed initially with the contracting agency,
subsequent protest filed with GAO more than 10 working days after
protester learns of initial adverse agency action on the protest is
untimely.
CONTRACTS - SMALL BUSINESS CONCERNS - AWARDS - SIZE STATUS - PROTESTS
TO AGENCY - TIMELINESS
2. Protest regarding awardee's small business size status, untimely
filed with the contracting officer (more than 5 days after bid opening),
which results in awardee being found to be other than small is
dismissed. Since size protest was untimely, Small Business
Administration ruling is only prospective in nature and does not affect
this procurement.
T. S. Head & Associates, Inc. (Head), protests the rejection of its
bid as nonresponsive and the award of a contract to Stonhard, Inc.,
under invitation for bids (IFB) No. F09650-85-C0170, issued by the
Department of the Air Force. Head's low bid was rejected as
nonresponsive for failure to acknowledge a material amendment. Head
contends that it never received the amendment and that its failure to
acknowledge the amendment should be waived as a minor informality, since
it would have no effect on its quoted price. Head also contends that
Stonhard is not a small business and thus ineligible for award under
this small business set-aside.
We dismiss the protest.
Head's protest regarding the rejection of its bid as nonresponsive
was initially filed with the Air Force and denied in a letter dated
August 28, 1985. We received Head's protest on September 20, 1985.
Under our Bid Protest Regulations, once a protest has been timely filed
with the contracting agency, any subsequent protest to our Office must
be filed within 10 working days after the protester receives actual or
constructive notice of initial adverse agency action. 4 C.F.R. Section
21.2(a)(3) (1985). Although in its protest Head did not state when it
received the agency's letter denying its protest, we generally estimate
that it takes no more than 1 calendar week for regular mail to arrive.
Technical Documentation, Inc., B-216306, Sept. 21, 1984, 84-2 C.P.D.
Paragraph 327. Since Head did not file its protest here within the
10-day period provided for under our Bid Protest Regulations, its
protest on this issue is untimely and will not be considered. Computer
Technology Associates, B-218350, Mar. 27, 1985, 85-1 C.P.D. Paragraph
362.
Head's protest regarding the small business size status of Stonhard
is also dismissed. In order to affect a specific solicitation, a
protest concerning the small business representation of any offeror must
be received by the contracting officer by the close of business of the
5th business day after bid opening. Federal Acquisition Regulation, 48
C.F.R. Paragraph 19.302(d)(1) (1984). Bid opening was August 2, 1985.
Since Head did not protest to the Air Force until August 12, 1985,
confirmed in writing on August 13, 1985, Head's size protest was
untimely. However, the Air Force forwarded the protest to the Small
Business Administration, which found Stonhard to be other than small.
Since the size protest was untimely, the ruling is only prospective and
does not affect the current solicitation.
While Head contends that the Air Force should act on the size
determination since award was made to a large business, the procurement
was properly conducted in accordance with the Federal Acquisition
Regulation and is not objectionable.
The protest is dismissed.
/s/ Robert M. Strong
Deputy Associate General Counsel
FILE: B-220306 86-1 CPD 84
DATE: January 24, 1986
MATTER OF: Harnischfeger Corporation
BIDS - EVALUATION - PRICE ANALYSIS
Protest alleging that the bid determined low on basis of evaluation
that includes certain transportation costs might not result in the
lowest cost to the government if the bidder changes production sites is
without merit where the bidder is obligated to pay transportation costs
exceeding those used for evaluation purposes and also represents in its
Buy American certification the country of origin for each line item.
Harnischfeger Corporation protests an award to Koehring Company under
invitation for bids (IFB) No. DAAE07-84-B-J104, issued by the United
States Army Tank-Automotive Command, Warren, Michigan, for the
procurement of cranes. Harnischfeger, the second low bidder, contends
that there is no assurance that Koehring's bid is in fact low because,
under the terms of its bid, Koehring may produce cranes in either its
domestic or foreing plants, thereby potentially increasing the
government's shipping costs.
We deny the protest.
Through this two-step sealed bid procurement, the Army sought to
satisfy its needs for two types of 7-1/2-ton, wheel-mounted hydraulic
cranes for a 5-year period. The protest involves the Army's evaluation
of step-two prices for one type, general purpose cranes, of which 968
are to be delivered in stated yearly increments. The Army anticipates a
need for the cranes at various locations in the United States, Korea,
and the Federal Republic of Germany. As a result, the IFB divided some
of the yearly increments into two line items, one requiring preservation
and packing for export and long-term storage (level "B") and the other
requiring preservation and packing for routine applications (level "C").
The solicitation provided that the Army might exercise options to
increase the quantity of each line item by up to 100 percent.
The IFB did not specify that the line items requiring level "B"
preservation and packing would be used in Germany. However, it
designated the number of cranes required at specific locations each
year, and the number for Germany (and for shipment to Hawaii and Korea)
corresponded to the line items requiring level "B" preservation and
packing. Similarly, the numbers for the continental United States
corresponded to the line items requiring level "C" preservation and
packing.
For evaluation purposes, the solicitation provided that for cranes
produced within the United States, the Army would estimate its shipping
costs either from the contractor's plant to the designated delivery
points within the country or, in the case of delivery points outside the
United States, from the contractor's plant to the port of discharge.
For cranes to be produced and delivered in the same foreign country, no
shipping costs were to be assessed.
Three firms submitted bids by the August 30, 1985, opening date.
Koehring's and Harnischfeger's bids listed the number of general purpose
cranes that each would produce annually in Germany and in the United
States; these corresponded to the cranes that the Army estimated would
be required annually for delivery in Germany and in the United States
(including Hawaii and Korea). /1/ The Army evaluated both bids as
having no shipping costs for the cranes produced in Germany. On this
basis, Koehring's evaluated price, $55,351,518, was low, and
Harnischfeger's, $55,721,007, was second low. The Army awarded Koehring
a contract on September 17, and Harnischfeger protests that award.
Harnischfeger argues that the Army's cost evaluation was deficient
because Koehring's bid only states the number of cranes to be produced
annually in Germany and does not tie the place of production to a
particular line item, that is, to a particular type of preservation and
packing. Harnischfeger, on the other hand, did, in its response to the
inspection clause, state where the cranes listed in each line item would
be produced. The significance of this, according to Harnischfeger, is
that Koehring is free to produce cranes in the United States for
shipment to Germany and in Germany for shipment to the United States.
This allegedly could result in the Army paying transportation costs of
approximately $4,000 a crane for overseas shipment, should Koehring
choose to produce its crane on a basis other than the one used for
evaluation. If this happens, Harnischfeger continues, Koehring could
more than offset the approximately $370,000 difference between its bid
and Harnischfeger's by changing the production site of less than 100
cranes. Such a change is a real possibility, in Harnischfeger's
opinion, because production costs are substantially lower in Germany.
Harnischfeger concludes that because award to Koehring may not actually
result in the lowest cost to the government, the Army should have
rejected the bid.
Harnischfeger's arguments fail to note provisions of Koehring's bid
that limit the government's shipping costs and that identify Koehring's
place of production. In particular, paragraph H28 of the IFB provides
that if the contractor ships from a point other than that used for
evaluation purposes, any increase in transportation costs is to be borne
by the contractor. Here, the Army reasonably evaluated Koehring's bid
on the assumption that certain quantities of cranes would be produced
each year at each of the two plants identified in Koehring's bid, and
that these cranes would be delivered where produced. Under paragraph
H28, if Koehring unilaterally switches its production between the two
plants and increases the government's shipping costs, Koehring will bear
those additional costs.
Also, in paragraph K22, the Buy American certification, Koehring
identifies the quantity of cranes to be produced in Germany each year by
contract line item, specifying the line items requiring level "B"
preservation and packing. Koehring's Buy American certification
precludes foreign manufacture of those cranes not identified in its
certification. Hybrid Technology Group, Inc., B-215168, Oct. 3, 1984,
84-2 CPD Paragraph 385. Thus, in our view, Koehring's contract requires
it to produce the cranes required for delivery in Germany (i. e., using
level "B" preservation and packing) at its German plant and to produce
the cranes required for delivery elsewhere at its domestic plant.
Moreover, we fail to see the economic advantage to Koehring from
changing production sites. Harnischfeger concedes that Koehring is
obligated to produce a fixed number of cranes in Germany and in the
United States each year. The firm's annual production costs therefore
will be virtually the same whether a particular crane is produced in one
country rather than another, since the total number produced in each
country may not change.
Harnischfeger asserts that even if Koehring's bid obligates it to
produce the initial contract quantities at the sites used for evaluation
purposes, Koehring will be able to produce option quantities at either
site. Under paragraph H28 discussed above, the contractor is only
liable for transportation costs exceeding those used in the bid
evaluation. Since transportation costs for option quantities were not
evaluated, the contractor would not be liable for transportation costs
irrespective of where it delivers the cranes covered by the option.
As noted above, unless a bidder states in its Buy American
certification that a line item will not be produced in the United
States, the contractor must provide domestic products. We believe that
this obligation extends to all cranes produced under applicable line
items, including quantities increased at the government's option. Thus,
Koehring must supply cranes produced at the firm's United States
facility if the Army exercises an option with respect to the line items
for which Koehring certified cranes would be of domestic origin (i.e.,
those line items requiring level "C" preservation and packing). On the
other hand, for those line items requiring level "B" preparation,
Koehring as well as Harnischfeger only certified that the number of
cranes for delivery in Germany would be produced in Germany. In the
third year, four cranes required for Hawaii and, in the fourth year, 20
cranes required for Korea are to be produced in the United States. If
the Army exercises an option for level "B" cranes in those years, it is
conceivable that, as the protester argues, the contractor will assert
that it may determine where to produce the cranes, since the initial
cranes were to be produced in both Germany and the United States.
We believe that the better interpretation of Koehring's contract is
that it is obligated to produce any option quantities in a manner
consistent with its bid on the base quantities -- including its
designation of production sites, its allocation of production quantities
between those sites, and its Buy American certification tying production
quantities to its German plant by line item. Under this reading of the
contract, if the Army exercised an option for 100 percent of the line
items requiring level "B" preparation and desired all of them for use in
Germany, Koehring would be obligated to produce all but 24 in its German
facility. Using the protester's estimated shipping costs, it would cost
the Army only $48,000 to ship the 24 cranes to Germany. This expense is
considerably less than the approximately $370,000 difference between the
two bids. Irrespective of the requirements of Koehring's contract
regarding the production sites for option quantities, however, the
question is not relevant to determining the low bidder since, under the
terms of the solicitation, option prices were not to be evaluated.
Unless the Army knows in advance where it may require additional cranes
or which delivery site would result in the lowest transportation costs,
possible transportation costs of option quantities cannot reasonably
play a role in determining the low bidder. Consequently, the
possibility that Koehring might claim that it may select the production
locations for some of the cranes under two line items that the Army may
require in the future does not establish that the Army improperly
determined that Koehring was the low bidder.
The protest is denied.
Harry R. Van Cleve
General Counsel
(1) Both Koehring and Harnischfeger proposed to produce in the United
States cranes intended for Hawaii and Korea, which were included in line
items requiring level "B" preservation and packing.
FILE: B-220299.2 85-2 CPD 659
DATE: December 13, 1985
MATTER OF: Audio Intelligence Devices -- Reconsideration
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF COMMENTS ON AGENCY'S REPORT
Dismissal of original protest on the basis that the protester had
failed to pursue the matter after agency report was filed is affirmed
since GAO has no record of protester's alledged telephonic advice that
it wished to have the protest decided on the existing record. GAO's Bid
Protest Regulations contemplate the submission of a written statement
and a protester who fails to submit one does so at its own risk.
Audio Intelligence Devices (AID) requests that we reconsider our
dismissal of its protest under Defense Supply Service-Washington request
for proposals No. MDA903-85-B-0048 and consider the protest on its
merits. We dismissed the protest because we had not received any
communication from AID regarding the contracting agency's report on the
protest. AID contends that "(W)e advised your office by phone that our
intention was to have the protest decided on the existing record."
We affirm the prior dismissal.
The protester has not indicated when and to whom it orally conveyed
its desire for a decision on the merits of this protest and we have no
record of the protester's telephone call. Moreover, our Bid Protest
Regulations specifically provide that the failure to "file" comments or
a "statement" requesting that the protest be decided on the existing
record will result in dismissal of the protest. 4 C.F.R. Section 21.3(
e) (1985). The protester concedes that this provision requires a
written submission, but states that it was not familiar with our
regulations prior to the dismissal of its protest. In this regard, the
protester states that it understood the Acknowledgment of Protest notice
which we sent to it upon receipt of the protest as giving it the option
of filing written comments upon the agency report or orally advising our
Office of its desire that we consider the protest on the existing
record.
The protester does not dispute that once an agency has filed its
report in response to a protest, it is incumbent upon the protester to
express to our Office its continued interest in the case; otherwise, it
will be dismissed. We require some statement of continued interest in a
protest because protesters sometimes change their minds about pursuing
their protests after receiving the agency report. See McGrail Equipment
Company, Inc. -- Reconsideration, B-211302.2, July 21, 1983, 83-2 C.P.D.
Paragraph 106. Absent an expression of continued interest, we have no
way of knowing whether the protest still reflects a real controversy
after the protester has received the agency report; it is our policy
not to rule on academic issues. Rampart Services, Inc. --
Reconsideration, B-219884.2, Oct. 29, 1985, 85-2 C.P.D. Paragraph 481;
Jowa Security Services Inc. -- Reconsideration, B-219355.3, Oct. 18,
1985, 85-2 C.P.D. Paragraph 422.
As the protester recognizes, our regulations contemplate that this
expression of continued interest shall be in the form of a written
statement. In contrast to oral advice, this serves to assure that the
protester's position is made known, with certainty, to those in our
Office responsible for the administration of the protest file in a
proceeding which, in most instances, has resulted in the stay of the
award or the suspension of performance of a government contract.
Here, the protester asserts that it expressed a continued interest in
the case to our "office" by telephone. We have no record of such a
call; certainly none was brought to the attention of our attorney to
whom the protest was assigned or to his supervisor. Although we would
not dismiss a protest solely because the protester's expression of
continued interest in its case was oral instead of written, we do
believe that a protester who relies upon oral communication assumes the
risk that it may not be received by a responsible official. Under the
circumstances, therefore, reopening the file on this protest is not
appropriate.
Harry R. Van Cleve
General Counsel
FILE: B-220295.2 86-1 CPD 157
DATE: February 13, 1986
MATTER OF: Washington Health Services, Ltd.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
1. Protest filed after the closing date for receipt of proposals,
that solicitation requirement for nursing supervisor unduly favors the
incumbent contractor is untimely since it concerns a defect apparent on
the face of the solicitation and should have been filed prior to
closing.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
2. Where solicitation clearly states the value of all the evaluation
criteria, protest against the relative weight given to two of these
criteria is untimely when filed after the date for receipt of proposals.
CONTRACTS - PROTESTS - ALLEGATIONS - UNSUBSTANTIATED
3. Where record indicates that evaluation of protester's proposal
was in accordance with established criteria set forth in solicitation
and the evaluation was reasonable, protest based on offeror's
disagreement with the evaluation is without merit.
CONTRACTS - NEGOTIATION - AWARDS - TO OTHER THAN LOW OFFEROR
4. In negotiated procurement there is no requirement that award be
made on the basis of the lowest cost. The procuring agency has the
discretion to select a higher rated technical proposal instead of a
lower rated, lower cost proposal if doing so is consistent with the
evaluation scheme in the solicitation.
CONTRACTS - PROTESTS - PROCEDURES - INFORMATION DISCLOSURE
5. Authority to determine which documents should be released to a
protester is vested in the contracting agency.
CONTRACTS - PROTESTS - ALLEGATIONS - SPECULATIVE
6. Allegation that procuring agency rewrote procurement records
after the fact and, in response to protest, provided false and
misleading information to justify its position is denied as merely
speculative where not supported by any evidence of record.
Washington Health Services, Ltd. (WHS) protests the rejection of its
proposal under request for proposals (RFP) No. 50-SAAA-6-01060, issued
by the United States Department of Commerce (Commerce). Commerce
determined that the protester's proposal was not under consideration for
award after the submission of best and final offers. WHS contends that
the agency erred and argues that it is the lowest priced, technically
superior offeror, who should be awarded the contract.
For the reasons stated below, we dismiss the protest in part and deny
it in part.
The solicitation contemplated a fixed price contract with
reimbursable items for professional health care services at 10 health
units located within the Metropolitan Washington, D.C. area. The RFP
stated that in considering proposals for negotiation and award,
technical quality would be given greater priority than cost, and it set
forth the following criteria (along with their relative weights) against
which technical proposals would be evaluated:
Nine proposals were received by the July 15, 1985, closing date and
were evaluated by the agency's technical evaluation committee. The
committee found four proposals to be technically acceptable and it
recommended that these four offerors be included in the technical
competitive range. Of those four offers, WHS had the lowest initial
technical score. The contracting officer accepted the committee's
recommendation and commenced negotiations with these offerors. The
agency sent written questions to three of the four offerors in the
technical competitive range concerning both technical and cost aspects
of their proposals. All four offerors were asked for and responded with
best and final offers.
After receipt of best and final offers, including the offerors'
responses to the negotiation questions, the proposals were reevaluated
and the technical scores of two firms, including WHS, were increased.
Although the protester improved its position to third-ranked
technically, the scores indicated that the highest ranked proposal was
considerably superior to the other three, which were then rejected.
WHS objects to the rejection of its proposal and disagrees with
Commerce's evaluation. In this regard, the protester contends: (1)
that the RFP requirement for a nurse supervisor was biased in favor of
the incumbent contractor; (2) its alternate proposal to eliminate the
nurse supervisor position was not properly evaluated; (3) the agency's
rejection of the protester's alternate proposal was improper; (4) its
proposal was not properly read nor given the correct evaluation; (5)
the evaluation factor "experience" was weighted too much; (6) WHS was
not given sufficient credit for one of its key personnel; (7) not
enough weight was given to the evaluation factor "cost"; and (8)
Commerce did not comply with its own regulation regarding award to
women-owned firms.
As a preliminary matter, Commerce argues that to the extent WHS is
challenging the RFP's requirement for a nurse supervisor and the
evaluation scheme that was set forth in the RFP, WHS' protest is
untimely. We agree. Under our Bid Protest Regulations, a protest
alleging an impropriety apparent on the face of an RFP must be filed
prior to the closing date for receipt of proposals. 4 C.F.R. Section
21.2(a)(1) (1985). WHS' protest that the RFP's requirement for a nurse
supervisor favors the incumbent contractor and others to its prejudice
concerns an impropriety which was apparent from the face of the RFP.
See Corvus Systems, Inc., B-211082.3, Feb. 11, 1985, 85-1 CPD Paragraph
173 at 5. Similarly, the evaluation method -- and the relative
importance of experience and cost in the evaluation scheme -- were
apparent on the face of the solicitation. Id. Since the closing date
for receipt of proposals was July 15, 1985, and WHS did not file its
protest until October 9, 1985, these bases of protest are untimely and
will not be considered on the merits.
At the outset, WHS complains that it has not been provided certain
technical evaluation materials that Commerce considers privileged
information and asks that we release those documents to WHS. Contending
that germane information has been withheld by Commerce, WHS asks this
Office to conduct a thorough investigation of this procurement to
determine whether selection of the proposed awardee is in the public
interest. In this regard, WHS alleges that false and misleading
information was given to our Office in a sworn statement by a
procurement official; that the evaluation committee was biased in favor
of the proposed awardee and that the failure of the procurement
officials to fully comply with procurement regulations would result in
"significantly higher health care costs for the U.S. taxpayers."
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. Section 3553(f) (West Supp. 1985); Joseph L. De Clerk &
Associates, Inc., B-220142, Nov. 19, 1985, 85-2 CPD Paragraph 567 at 3.
However, based upon our in camera review of WHS' proposals and all
pertinent evaluation documents, we conclude that Commerce's evaluation
had a reasonable basis and was in conformity with the evaluation
provisions of the solicitation. We have no basis, therefore, to object
to the contracting officer's decision to remove the protester's proposal
from consideration for award.
One of the performance requirements listed in the RFP was that "each
health unit must open on time, with minimum staff." For the Main
Commerce Building, the "minimum staff" was one registered nurse
supervisor plus three registered nurses. The nurse supervisor is
responsible for the supervision of the nursing staff at all the sites.
Since the president of WHS is a registered nurse, the company proposed
as an alternate approach the elimination of the nurse supervisor
position, at some cost savings, with the company's president providing
"first-hand supervision of the nurses in all of the health units." A
principal contention of the protester is that the agency did not give
sufficient weight to the advantages of its alternate approach.
In challenging the propriety of Commerce's technical evaluation of
its alternate proposal which eliminated the nurse supervisor position,
WHS contends that this proposal was essentially "ignored" by the agency.
In support of this position, WHS points to the fact that a best and
final offer was only requested for the proposal which included the nurse
supervisor position. The protester maintains that Commerce improperly
rejected this proposal which was, in its view, "clearly the most
advantageous offer."
Commerce replies that it rejected the protester's alternate proposal
because the agency determined that the nurse supervisor position was
necessary to fulfill the minimum needs of the government for quality
health care services. According to Commerce, a full-time nurse
supervisor, located at the Main Commerce Health Unit, would be
responsible for contract administration and delivery of effective health
care services. More specifically, Commerce states that this requirement
is necessary to provide direct on site availability of this individual
to the contracting officer's technical representative as well as on site
supervision of at least 13 nurses. Additionally, the agency points out
that having a full-time nursing supervisor at the Main Commerce Health
Unit would provide a back-up nurse for the unit in the event that the
other nurses are needed for an emergency or are otherwise occupied.
We have not been persuaded by the protester's submissions that these
concerns of the agency are not well-founded and we therefore conclude
that it was not unreasonable for Commerce to insist upon the provision
of a full-time nursing supervisor. With regard to the cost savings that
acceptance of the protester's alternate proposal would allegedly
achieve, we note that there is no requirement in a negotiated
procurement that award be made on the basis of lowest price or cost to
the government. Blurton, Banks & Associates, Inc., B-211702, Oct. 12,
1983, 83-2 CPD Paragraph 454. The procuring agency has the discretion
to select a more highly rated technical proposal if doing so is in the
government's best interests and is consistent with the evaluation scheme
set forth in the solicitation. Electronic Data Systems Federal Corp.,
B-207311, Mar. 16, 1983, 83-1 CPD Paragraph 264. As we noted above, the
solicitation here allocated 80 percent of the available point score to
technical criteria and only 20 percent to cost.
Here, WHS' price for its alternate proposal was low but it
contemplated elimination of a requirement the agency reasonably deemed
necessary. We have no basis therefore to object to the agency's
rejection of the protester's alternate proposal.
WHS also challenges the overall rating it received for its technical
proposal, alleging that it submitted a proposal superior to all others
in the area of staffing and management. The protester claims that it is
uniquely qualified to operate the employee health units because it is
the most experienced occupational health company in the local area. In
support of its contention that it is better qualified, WHS points out
that its nurses and health unit physicians have extensive occupational
health training and experience; that its corporate president is an
occupational health nurse with years of experience in the field plus
management experience in health unit operations; and, its corporate
medical administrator has demonstrated health unit management experience
inasmuch as he co-founded and actively managed the incumbent health unit
contractor from 1975 until 1983.
In reviewing WHS' claim that the professional and managerial
expertise of its key personnel should have been accorded more weight in
the areas of management capability and experience, we find nothing in
the record that shows the rating received for these two criteria was
unreasonable. For example, the protester states in its protest letter
that it was recently awarded a contract to operate a health unit at
another government agency. At the time WHS submitted its proposal in
response to this solicitation, however, it had never operated a health
unit for a government agency. With respect to the prior individual
achievements of WHS' corporate medical administrator, we note that there
is no requirement that an agency give credit for the accomplishments of
an individual which were achieved during his association with another
firm. See Airtronix, Inc., B-217087, Mar. 25, 1985, 85-1 CPD Paragraph
345 at 5.
WHS next alleges that Commerce violated one of its own procurement
regulations governing women-owned small businesses. Specifically, the
protester states that the agency "ignored" the Federal Acquisition
Regulation (FAR) provision entitled "Utilization of Women-Owned Small
Businesses" which states in relevant part:
"(b) It is the policy of the United States that women-owned
small businesses shall have the maximum practicable opportunity to
participate in performing contracts awarded by any Federal
agency." 48 C.F.R. Section 52.219-13(b) (1984).
The protester asserts that by failing to select either of its
proposals Commerce did not comply with the policy articulated in the
cited regulation. The agency notes, however, that the cited provision
is a required contract clause to encourage the use of women-owned small
businesses in subcontracting. See FAR, 48 C.F.R. Section 19.902. Since
the referenced provision is not applicable to the issue at hand we need
not consider WHS' allegation further. We do note that we are not aware
of any requirement that women-owned businesses be given special "credit"
in the evaluation for award, as the protester suggests.
WHS also alleges that the technical evaluation panel members were not
competent to evaluate the technical proposals stating that the
"individuals involved have not demonstrated any particular competency in
occupational health matters." However, the composition of a technical
evaluation panel is within the discretion of the contracting agency and
we will not review the qualifications of panel members in the absence of
a showing of fraud, bad faith or conflict of interest. Martin Marietta
Data Systems et al., B-216310, et al., Aug. 26, 1985, 85-2 CPD Paragraph
228 at 8. WHS has made no such showing and we have no basis upon which
to consider the matter further.
Finally, WHS alleges that certain agency officials provided false,
misleading and conflicting statements to our Office in order to
"disguise and hide the mishandling of the award." WHS further alleges
that the individuals involved in the technical review "wrote or rewrote
the record after the selection was made, in an attempt to influence
GAO's opinion on any protest." Close scrutiny of the record leads us to
conclude that there is absolutely no evidence in the record which in any
way corroborates WHS' accusations. In view of this lack of any evidence
to support WHS' allegations, we consider them speculative and without
merit. See Consolidated Services Inc., B-206413.3, Feb. 28, 1983, 83-1
CPD Paragraph 192.
The protest is dismissed in part and denied in part.
Harry R. Van Cleve
General Counsel
FILE: B-220295 86-1 CPD 26
DATE: January 10, 1986
MATTER OF: Health Management Associates of America, Inc.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
TECHNICAL ACCEPTABILITY - ADMINISTRATIVE DETERMINATION
The determination of the relative merits of an offeror's technical
proposal is primarily the responsibility of the procuring agency and
will be questioned only upon a clear showing of unreasonableness or that
the procuring agency otherwise violated procurement statutes or
regulations. Protest is denied where the record shows a reasonable
basis for the procuring agency's evaluation of the protester's technical
proposal as unacceptable and therefore not in the competitive range.
Health Management Associates of America, Inc. (HMAA), protests the
Department of Commerce's decision to exclude its proposal from the
competitive range and any award of a contract under request for
proposals (RFP) No. 50-SAAA-6-01060. The RFP sought offers for a firm
fixed-price contract plus reimbursable items, with two 1-year options,
to provide complete occupational health care services for the Department
of Commerce employees at 10 health units in the Washington, D.C.,
metropolitan area. The protester was excluded from the competitive
range because its proposal was determined to be inadequate in three
separate technical areas. HMAA challenges the reasonableness of the
technical evaluation.
We deny the protest.
The solicitation contained two statements of work: one for nine
separate health units and another for the Bureau of Economic Analysis
health unit whose needs differed from the other nine units. The
solicitation listed in descending order of importance the following
factors that would be used to evaluate all proposals:
TABLE OMITTED
Offerors were advised that award would be "influenced by the proposal
which offers the greatest value to the Government in terms of
performance" rather than lowest price.
With respect to the content of the technical proposals (all noncost
considerations -- worth 80 points) the solicitation required each
offeror's proposal to include:
"(1) A discussion of the offeror's experience and success in
the performance of services similar to those requested in this
contract. This should include a list of contracts for similar
services (Government-Industry) in the following format:
(i) Contract No.
(ii) Dollar Value
(iii) User
(iv) Description of Services
(v) Period of Performance
"(2) The resumes of all individuals proposed for work under
this contract. Any personnel not now fulltime employees of the
offeror must be so indicated. In each case a commitment from the
individual offered must be submitted certifying that he will be
available within two (2) weeks after award of contract.
"(3) A specific delineation of how the time and skills of the
proposed individuals will be used under the terms of this
contract. The disposition of their time between this contract and
other work shall be specifically delineated.
"(4) A brief delineation of the methodologies that the offeror
considers to offer the most potential for the solution of the
problem. This should be supplemented with a discussion of the
offeror's special competence in pursuing these approaches.
"(5) A list of corporate facilities, locations and current
staffing."
Nine firms submitted offers in response to the RFP and their
technical proposals were referred to a technical evaluation committee to
determine the proposals' technical merit. The committee found HMAA's
proposal as well as the proposals of four other offerors to be
technically unacceptable. The contracting officer therefore decided to
exclude the protester from the competitive range for negotiation.
Commerce's report on the protest stated that the evaluation was
performed in accordance with the stated evaluation criteria and that
HMAA submitted an unacceptable proposal which in some areas was merely a
"repeat of verbiage" in the RFP while in other areas the protester
stated that it would comply with the requirements but provided little
detail showing how it would do so. Commerce found HMAA's proposal to
have three basic deficiencies and, as a consequence, the protester's
proposal received only 25 of the 80 possible technical points --
substantially below the technical scores of the proposals determined to
be in the competitive range.
In its response to the agency report, HMAA responded to each of the
deficiencies found by Commerce, arguing that the alleged deficiencies
were not deficiencies at all -- that its proposal was acceptable in
those areas. HMAA argues that its proposal was subjected to "arbitrary
and selective review" and Commerce should have included its proposal in
the competitive range.
The evaluation of technical proposals and the resulting determination
of whether an offeror is in the competitive range is a matter within the
discretion of the procuring agency since it is responsible for defining
its needs and the best method for accommodating them. Advanced
Electro-Magnetics, Inc., B-208271, Apr. 5, 1983, 83-1 CPD Paragraph 360
at 4. In reviewing an agency's technical evaluation, we will not
independently determine the relative merit of an offeror's technical
proposal but will only examine the agency's evaluation to insure that it
had a reasonable basis. ID., see also SETAC, Inc., 62 Comp. Gen. 577
(1983), 83-2 CPD Paragraph 121 at 13. Moreover, the protester has the
burden of showing that the agency's evaluation was not reasonable. See
Coherent Laser Systems, Inc., B-204701, June 2, 1982, 82-1 CPD Paragraph
517 at 5.
We find that the technical evaluation of HMAA's proposal and its
exclusion from the competitive range was reasonable. We have examined
the entire record of the technical evaluation in camera -- at the
contracting agency's request -- and find that the evaluation was
performed in accordance with the evaluation criteria set forth in the
RFP.
The RFP states that offerors should submit a staffing plan which
should include: resumes for all full and part time individuals who will
provide services under this contract; a specific delineation of how the
time and skills of the staff members would be utilized at the 10 health
units; certification of availability from each employee and a list of
the offeror's current staff. Commerce found the protester's proposal
deficient in this area, citing the evaluation committee's finding which
questioned the ability of HMAA to provide the 17.5 nurses it had
proposed for the 10 units, noting that the protester had submitted only
three resumes for "nameless" nurses and proposed to fill the additional
nursing slots by offering employment to nurses presently working for the
current health unit contractor. The agency points out that HMAA did not
submit a commitment from any of these nurses that they would accept its
offer of employment. The agency further notes that HMAA did not
delineate in its proposal how the time and skills of its physician would
be allocated among nine of the 10 health units. Accordingly, HMAA was
given only 7 out of a possible 30 technical points in the staffing
category.
HMAA does not dispute the RFP requirements under this criterion
except to challenge any obligation to specify how the physician's time
and skills would be allocated between nine of the 10 units. With
respect to its staffing plan for nurses, HMAA contends that the resumes
of the three unnamed nurses contained in its proposal are indicative of
the "calibre of individual who will be utilized in the staffing" of each
health unit. Further, the protester recites the problems it encountered
in attempting to contact the nurses working under the current contract
regarding possible employment with HMAA if it were awarded this contract
as an impediment to its ability to offer employment commitments from any
of the nurses. The solicitation, however, specifically requires resumes
and employment commitments from employees to be used by an offeror and a
delineation of how the time and skills of employees will be used. We
therefore cannot find unreasonable Commerce's determination that HMAA's
proposal did not propose an adequate staffing plan that would meet the
needs of the health units.
The solicitation also required proposals to demonstrate management
capability to coordinate health services at multiple locations and to
schedule physician's time at all locations effectively. The agency
found that HMAA's proposal did not adequately describe how the health
units would be managed nor show the significant management experience
which HMAA claims it has. Although HMAA provided resumes for its
principal officers to show their areas of experience, the proposal did
not directly discuss the approach to be taken in the coordination and
scheduling of services. HMAA received 10 of 30 possible points for this
criterion.
The solicitation further required offerors to state previous
corporate experience as well as key staff members' experience relating
to industrial or occupational health services. The evaluation committee
found that HMAA's proposal listed no past corporate experience in
providing similar services and that its principal officers' experience
had little relationship to the services required for the proposed
contract. Consequently, the protester received only 8 of 20 possible
points for experience. The protester contends that it was entitled to a
higher score because the combined experience of its corporate officers
clearly evidences prior management experience for occupational health
clinics in various states. HMAA admits that it has "no prior
(corporate) experience" but argues that the "ability of the corporation
to perform is no greater or lesser than the ability of the individuals
heading and supporting the corporation." Additionally, the protester
challenges the evaluation committee's finding that "the key staff
members, the nurses" had limited occupational health experience, stating
that the resumes for the three unnamed nurses show that each had more
than the minimum 1-year experience in this field.
A technical evaluation must be based on information submitted with
the proposal. No matter how capable an offeror may be, if it does not
submit an adequately written proposal, it will not be considered in the
competitive range or in line for discussions in a negotiated
procurement. Basic Technology Inc., B-214489, July 13, 1984, 84-2 CPD
Paragraph 45 at 3. Since the proposal contained only a representative
sample of the resumes for typical nurses to be used -- unnamed
representatives at that; presented no corporate experience; and did
not discuss how the health units' management would be coordinated, we
cannot find that this aspect of Commerce's evaluation was unreasonable.
In short, we find the evaluation of HMAA's proposal to have been
reasonable. Therefore, the protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220291.3 86-1 CPD 46
DATE: January 15, 1986
MATTER OF: Electronic Research Associates, Inc. -- Request for
Reconsideration
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF COMMENTS ON AGENCY'S REPORT
Dismissal of original protest for failure to comment on the agency
report in a timely manner, where protester filed comments 8 working days
after its receipt of the report, is affirmed since protester failed to
comply with our Bid Protest Regulations.
Electronic Research Associates, Inc. (ERA), requests reconsideration
of our dismissal of its protest, B-220291.2, under invitation for bids
No. N00104-85-B-0768, issued by the Department of the Navy (Navy). We
dismissed the protest because ERA did not file its comments on the
Navy's report in a timely manner.
We affirm the prior dismissal.
We received the Navy's report on December 2, 1985, and received ERA's
comments, dated December 12, on December 16. According to ERA, it
received the Navy's administrative report on December 4 and answered it
on December 12. ERA states that it understands it has 10 working days
to respond to the contracting agency's report and, therefore, the
statement in our dismissal notice that it failed to respond within the
time required is incorrect.
Our Bid Protest Regulations specifically provide that comments on the
agency's report shall be filed with this Office within 7 working days
after receipt by the protester of the report, and that failure to file
comments (or to file a statement requesting that the protest be decided
on the existing record) within the 7-day period will result in dismissal
of the protest. 4 C.F.R. Section 21.2(b) (1985); Coliseum
Construction, Inc., B-218881.2, July 24, 1985, 85-2 C.P.D. Paragraph 78.
The purpose of the time requirements in our regulations is to establish
effective and uniform procedural standards that will provide all parties
with a fair opportunity to present their cases. Equally important is
the fact that these standards allow our Office the opportunity to
resolve protests within a statutory 90-day timeframe, so that protests
will not unduly disrupt the government's procurement process. See 31
U.S.C.A. Section 3554(a)(1) (West Supp. 1985), as added by section 2741
of the Competition in Contracting Act of 1984; Rail Company, B-218623,
Aug. 7, 1985, 85-2 C.P.D. Paragraph 141.
Our Bid Protest Regulations are published in the Federal Register,
and protesters are charged with constructive notice of their contents.
International Development Institute, 64 Comp. Gen. 259 (1985), 85-1 C.
P.D. Paragraph 179. In addition, when we acknowledged receipt of ERA's
protest, we specifically advised the company that written comments on
the agency report must be submitted not later than 7 working days after
its receipt of the report. We did not receive ERA's comments until
December 16, 8 working days after ERA states it received the report.
Since ERA's comments were not filed within the prescribed 7-day period,
the protest was properly dismissed, and the file will not now be
reopened.
Harry R. Van Cleve
General Counsel
FILE: B-220289
DATE: February 28, 1986
MATTER OF: Patrick G. Collins -- Real Estate Title Requirements
OFFICERS ANDEMPLOYEES - TRANSFERS - REAL ESTATE EXPENSES - HOUSE
TITLE IN NAME OF ANOTHER
A transferred employee who provided part of the funds to purchase a
residence at his new duty station arranged to have title placed in a
friend's name at the time of the purchase. Although the employee
subsequently married his friend and acquired joint ownership of the
residence, his claim for real estate purchase expenses may not be
allowed. He did not meet the requirement of the applicable regulations
that title to the residence purchased be in the name of the employee or
a member of his immediate family.
The issue in this matter is whether a transferred Federal employee
may be allowed costs incurred in the purchase of a residence at his new
duty station even though neither he nor any member of his immediate
family acquired title to the residence in the purchase transaction. /1/
In light of the applicable provisions of statute and regulation we
conclude that the employee's claim may not be allowed.
In June 1983 Mr. Patrick G. Collins was transferred from a position
with the Interstate Commerce Commission in Indianapolis, Indiana, to a
position with the Department of the Air Force in Dayton, Ohio. The Air
Force, as the receiving agency, undertook the responsibility for his
relocation expenses and issued a travel authorization to him. Together
with other relocation expenses he was authorized reimbursement of real
estate purchase expenses.
On August 16, 1984, Mr. Collins' friend purchased a house in Dayton.
Part of the funds used to purchase the residence were furnished by Mr.
Collins. Subsequently, on September 13, 1984, the friend executed a
quit claim deed giving Mr. Collins an undivided one-half interest in the
Dayton residence. The employee then filed claim in the amount of
$1,245.55 for reimbursement of the buyer's expenses associated with the
August 16, 1984 purchase, including a loan origination fee, amounts paid
for a mortgage title policy, an appraisal fee, legal and related costs,
etc. The Air Force disallowed his claim for the reason that neither he
nor any member of his immediate family acquired title to the property at
the August 16, 1984 purchase.
Mr. Collins has questioned the correctness of the denial of his
claim. He explains that in August 1984 he and his wife were involved in
divorce proceedings, and he had received legal advice to the effect that
his wife would acquire dower rights in any real estate he might purchase
prior to the issuance of the final decree of divorce. Consequently, at
the time of its purchase in August 1984, he arranged to have the title
of the house in Dayton placed in the name of his friend. His friend
gave him a one-half interest in the property a month later, and they
were married in February 1985, after his divorce became final. He
suggests that his claim should be allowed in these circumstances.
The statutory authority for reimbursing a transferred Federal
employee for expenses incurred in the sale and purchase of residences at
the old and new duty stations is contained in 5 U.S.C. Section
5724a(a)(4). The implementing regulations spell out the title
requirements for such transactions. Those regulations provide that
title must be "in the name of the employee alone, or in the joint names
of the employee and one or more members of his/her immediate family, or
solely in the name of one or more members of his/her immediate family."
/2/ The regulations define "immediate family" in terms of a spouse,
child, or other named dependent who bears that relationship to the
employee at the time he reports to his new duty station. /3/ We have
consistently held that the title requirements of the regulations are not
satisfied if, at the time of the purchase for which reimbursement is
claimed, title is not in the name of the employee or a member of the
employee's immediate family. /4/ This is so even where it appears that
the employee may have furnished funds used to pay for the residence.
/5/
In the present case, the employee claims reimbursement of expenses
related to the purchase of a residence that occurred on August 16, 1984,
but he indicates that he arranged to have title to the residence placed
in the name of a person who was not a member of his immediate family.
In our view this did not satisfy the title requirements of the
regulations. We view it as immaterial that the employee may have
furnished some of the funds used to purchase the residence in August
1984, that he may have acquired joint ownership of the residence at some
later time and that he subsequently married the person with whom he held
joint title. The fact remains that neither he nor any member of his
immediate family acquired title to the residence through the purchase
for which he now claims reimbursement. The regulations plainly preclude
reimbursement of expenses for the purchase of a residence when neither
the employee nor a member of the employee's immediate family acquires
title, and those regulations provide no exception for arrangements of
the sort presented here.
Accordingly, we disallow the employee's claim.
Comptroller General of the United States
(1) This action is in response to a request for an advance decision
from the Accounting and Finance Officer, 2750 Air Base Wing,
Wright-Patterson Air Force Base, Ohio. The request was forwarded here
by the Per Diem, Travel and Transportation Allowance Committee after it
was approved and assigned Control Number 85-30.
(2) Federal Travel Regulations (FTR), para. 2-6.1c (Sept. 1981),
incorp. by ref., 41 C.F.R. Section 101-7.003. See also vol. 2 (2 JTR),
para. C14000-1(2).
(3) FTR, para. 2-1.4d. See also 2 JTR, App. D (definition of
"dependent").
(4) See, e.g., Carl A. Gidlund, 60 Comp. Gen. 141 (1980), affirmed
B-197781, September 8, 1982; Adele K. Kauth, B-197929, March 25, 1981;
Reverend Richard A. Houlahan, B-192583, March 14, 1979; and David R.
Taylor, B-189768, June 15, 1978.
(5) See James G. Gasque, B-183048, May 13, 1976.
FILE: B-220287 DATE: March 11, 1986
MATTER OF: Richard G. Mack - Real Estate Expenses
Mortgage Insurance Premium
DIGEST:
OFFICERS AND EMPLOYEES - TRANSFERS - REAL ESTATE EXPENSES - INSURANCE
A transferred civilian employee of the Air Force claims
reimbursement for a mortgage insurance premium he paid at
settlement on purchase of a residence at his new duty station.
Reimbursement for mortgage insurance, as distinguished from
mortgage title insurance, is specifically precluded by the Federal
Travel Regulations (FTR) and Joint Travel Regulations (JTR). In
addition, mortgage insurance to protect the lender against default
is a finance charge which may not be reimbursed under the FTR and
JTR.
This responds tp a request for an advance decision on the issue of
whether a transferred employee may be reimbursed for a mortgage
insurance premium required by a lender in connection with the purchase
of a residence. 1/ We conclude that the charge for mortgage insurance to
protect the lender against a default by the borrower is not reimbursable
under the Federal Travel Regulations.
BACKGROUND
Richard G. Mack, a civilian employee of the Department of the Air
Force, was transferred from Hill Air Force Base, Utah, to Ellsworth Air
Force Base, Sputh Dakota, in November 1983. He purchased a residence at
his new duty station and at settlement was required to pay a mortgage
insurance premium in the amount of $1,775.12 to protect the lender
against a possible default on the mortgage.
Mr. Mack requested reimbursement for this amount from the Personnel
Division at Hill Air Force Base. Air Force off icials there denied
reimbursement, but requested guidance on the issue frpm their
Comptroller. The request was forwarded through appropriate channels to
our Office.
The Air Force request states that there is a need for guidance
concerning payment of a relatively new type of mortgage insurance
premium being charged home buyers. It has caused prpblems for several
months at Hill Air Force Base, and possibly elsewhere as well, which
will continue to recur. Air Force officials were advised by local banks
and the local office of the Department of Housing and Urban Development
that a mortgage insurance premium is for insurance protecting the lender
from the obligor's (home buyer's) default. This insurance cannot be
waived and is a prerequisite to obtaining an FHA or conventional loan.
Apparently the entire premium is collected at settlement.
The Air Force has reviewed our earlier decisions disallowing similar
charges and is aware of the regulation prohibiting payment of finance
charges. It notes, however, that credit reports and loan origination
fees are also finance charges and are now reimbursable items. It also
points out that the Joint Travel Regulations since 1983 have allowed
mortgage title insurance premiums required by the lender and paid for by
the buyer, as well as owner's title insurance if it is a prerequisite to
financing or is inseparable from the lender's policy.
Since mortgage insurance, like loan origination fees and credit
reports, is a required charge by and for the protection of the lender,
the Air Force believes it should also be reimbursable. Since it
anticipates that these claims will steadily increase, the Air Force
requests our decision.
Opinion
A Federal employee who relocates in connection with a permanent
change in station may, under the provisions of 5 U.S.C. Sec. 5724a (1982
and Supp. I, 1983), be reimbursed for certain real estate expenses
incurred in selling his former residence or purchasing a new residence.
This statute is implemented by the Federal Travel Regulations, Chapter
2, Part 6, incorp. by ref., 41 C.F.R. Sec. 101-7.003 (1985) (FTR). For
civilian employees of the Department of Defense, these regulations are
also reflected in Volume 2 of the Joint Travel Regulations (2 JTR) which
must be consistent with the provisions of the FTR.
Various miscellaneous expenses related to the real estate
transactions for which a transferred employee may be reimbursed are
listed in FTR para. 2-6.2d(1), as amended by General Services
Administration Bulletin FPMR A-40, Supplement 4 (August 23, 1982), and
in 2 JTR para. C14002-1d(1) (Change 208, February 1, 1983), both of
which became effective on October 1, 1982. Nonreimbursable miscellaneous
items of residence transactions are listed in FTR para. 2-6.2(d) (2),
and 2 JTR para. C14002-1d(2), the latter of which provides, in pertinent
part:
"(2) Nonreimbursable Items. Except as otherwise provided in subpar.
(1) above, the following items of expense are not reimbursable:
"1. * * * mortgage insurance * * *;
* * * * *
"5. no fee, cost, charge or expense determined to be part of
the finance charge under the Truth in Lending Act, Title I, P.L.
90-321, and Regulation Z issued in accordance with P.L. 90-321 by
the Board of Governors of the Federal Reserve System, unless
specifically authorized in subpar. (1) above; * * *"
We recently considered a similar case concerning an employee of the
Department of the Interior. Daniel T. Mates, B-217822, June 20, 1985.
There we relied on the applicable provisions of the FTR, which contain
language identical to the JTR provisions quoted above. We stated that
the applicable regulations specifically precluded reimbursement for
mortgage insurance, as distinguished from mortgage title insurance.
Similarly, we must conclude that 2 JTR para. C14002-1d(2) (1),
expressly precludes reimbursement for the cost of mortgage insurance.
In addition, as we have previously stated, reimbursement is also
prohibited by 2 JTR para. C14002-1d(2)(5), since it is a finance charge.
Regulation Z lists as an example of a finance charge, "premiums or other
charges for any guarantee or insurance protecting the creditor against
the consumer's default or other credit loss." 12 C.F.R. Sec.
226.4(b)(5) (1985).
The Comptroller General decisions which the Air Force recognized as
prior authority disallowing this type of claim were not affected by the
1983 changes to the Joint Travel Regulations. The prior regulations also
specifically prohibited reimbursement for mortgage insurance. See, for
example, FTR para. 2-6.2d (Supp. 1, September 28, 1981). There was no
change made in 1983 in this regard.
Any change to allow mortgage insurance premiums to be reimbursed
would have to be accomplished by an amendment to the Federal Travel
Regulations which now clearly prohibit reimbursement. We are providing a
copy of this decision and the incoming request to the General Services
Administration for its consideration of this subject.
Accordingly, we hold that Mr. Mack's voucher may not be certified for
payment.
Acting Comptroller General
of the United States
1/ This request for an advance decision originated with Doug Webster,
Chief, Program Management Section, Personnel Division, Hill Air Force
Base, Utah. The request was forwarded through channels to the Per Diem,
Travel, and Transportation Committee, Department of Defense, where it
was approved and assigned control number 85-31.
FILE: B-220283 86-1 CPD 35
DATE: January 14, 1986
MATTER OF: Crown Laundry & Dry Cleaners, Inc.
CONTRACTS - IN-HOUSE PERFORMANCE V. CONTRACTING OUT - COST COMPARISON
- GOCO V. COCO BIDS - EVALUATION - COST ELEMENTS FOR INCLUSION
1. Where solicitation clearly informed bidders that bids would be
compared to the government estimate using Office of Management and
Budget Circular A-76 cost comparison procedures, it was proper for the
contracting agency to use those procedures in comparing government-owned
contractor-operated bids to contractor-owned, contractor-operated bids
in order to determine the lowest cost to the government.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
2. Protester's post-bid opening argument that the agency should have
added rental value of government property to government-owned,
contractor-operated bid for evaluation purposes is dismissed as untimely
where the solicitation did not provide for the use of such a factor; a
protest based on alleged improprieties in a solicitation which are
apparent prior to bid opening must be filed before that time in order to
be timely.
Crown Laundry & Dry Cleaners, Inc. protests the bid evaluation
procedures used in making award to Apex International Management
Services, Inc., under invitation for bids (IFB) No. M00264-85-B-0009,
issued by the Marine Corps as a small business set-aside for base
laundry and dry cleaning services at Quantico, Virginia. We deny the
protest in part and dismiss it in part.
The IFB advised bidders that it was part of a cost comparison to
determine whether it would be more economical to accomplish the work
in-house using government employees, or by contract. This determination
was to be based on a comparison of the low bid with the government's
estimated cost as computed according to the Office of Management and
Budget Circular A-76 cost comparison procedures. Bids were solicited
for either a government-owned, contractor-operated (GOCO) facility using
existing base equipment and facilities, or a contractor-owned,
contractor-operated (COCO) facility using the contractor's own equipment
and facilities. The Corps received five GOCO bids, one from Apex, and
one COCO bid, from Crown. Both Apex's low GOCO bid and Crown's COCO bid
were evaluated as lower in cost than the government's estimated cost for
in-house performance.
Due to the different cost bases of GOCO and COCO bids, the two bids
could not be compared directly. The Corps, in comparing them directly,
used A-76 cost comparison procedures to adjust each bid. In the
process, both bids were increased for evaluations with Apex's GOCO bid
increased $296,582 more than was Crown's COCO bid, to reflect the added
cost to the government for a GOCO operation. This increase
notwithstanding, Apex's adjusted GOCO bid ($1,368,858.23) was found to
represent a more economical method of performance than did Crown's COCO
bid ($1,457,850.52).
Crown contends that the $296,582 factor added to Apex's GOCO bid
based on A-76 procedures was too low. The protester contends that once
the Corps decided to contract based on an A-76 analysis, the policies
and procedures for providing government property to contractors under
the Federal Acquisition Regulation (FAR), 48 C.F.R. Part 45 (1984),
should have been used to compare the low GOCO and COCO bids. Crown
argues that using these provisions would eliminate the cost advantage a
GOCO bidder has over other bidders by virtue of its performance with
government property, by applying, for evaluation purposes, a rental
equivalent factor based on what the government could charge for use of
equipment and property. In contrast, and A-76 comparison, the protester
complains, is based solely on actual purchase cost to the government,
less depreciation. Crown takes the position that a fair rental
equivalent of $1,200,000 should be added to Apex's low GOCO bid to take
into account rent-free use of the laundry and dry cleaning equipment at
Quantico.
We find that the Corps' evaluation method was consistent with the
terms of the IFB, and thus was unobjectionable. Although the IFB did
not explicitly state how the low GOCO and COCO bids would be compared if
necessary, the IFB did provide that bids submitted under the GOCO and
COCO schedules would be compared with the government cost under the A-76
procedures and that, if the lowest bid received was lower than the
government in-house cost, an award under either the GOCO or COCO
schedule would be made. As all offerors thus were on notice that the
procurement would be governed by A-76 cost comparison procedures, and
the IFB contained no other provisions for the comparison of GOCO and
COCO bids, we believe it was sufficiently clear that costs added to a
GOCO bid would be determined using A-76. It thus was proper for the
Corps to use A-76 procedures for purposes of comparing the bids
ultimately, against each other. See generally NI Industries, Inc.,
B-218019, Apr. 2, 1985, 85-1 C.P.D. Paragraph 383.
We point out, furthermore, that we previously have not objected to
the use of an A-76 evaluation scheme for comparing GOCO and COCO bids.
See Crown Laundry & Dry Cleaners, Inc., 61 Comp. Gen. 233 (1982), 82-1
C.P.D. Paragraph 97. Although that case did not involve the same issue
as does the instant one, the A-76 procedures were used there to compare
GOCO and COCO bids, and we found nothing inherently improper in that
approach to selecting a contractor.
Crown's contention that a rental value factor should have been added
to the GOCO bid in order to equalize competition is untimely. Under our
Bid Protest Regulations, a protest based on alleged improprieties in a
solicitation which are apparent prior to bid opening must be filed
before that date. 4 C.F.R. Section 21.2(a)(1) (1985). Here, the only
evaluation factors provided for in the solicitation were based on cost
to the government under the A-76 cost comparison procedures; the IFB
did not provide for adding a rental evaluation factor to GOCO bids.
Therefore, Crown's post-bid opening protest against the Corps' failure
to add a rental evaluation factor to Apex's bid will not be considered.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
FILE: B-220282.3 86-1 CPD 317 DATE: April 3, 1986
MATTER OF: Triple A Shipyards--Request for
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
RECONSIDERATION REQUESTS - ERROR OF FACT OR LAW - NOT ESTABLISHED
Prior decision is affirmed where the protester has not
convincingly shown any factual or legal grounds which would
warrant reversal of the prior decision.
Triple A Shipyards (Triple A) has requested reconsideration of our
decision Triple A Shipyards, B-220282.2, Feb. 7, 1986, 86-1 C.P.D. , in
which we denied in part and dismissed in part Triple A's protest under
invitation for bids (IFB) 8140-85-B-0042, issued by the National Park
Service, Department of the Interior, for drydocking and repair of the
Balclutha, an historic square rigged sailing ship. We affirm our prior
decision.
In its protest, Triple A argued, in part, that the award to Pacific
Dry Dock and Repair Company (Pacific) was defective because it omitted
item 14--"Repair, Renewal of Main Weather Deck"--which was identified in
the IFB as a "base bid" item. As set forth in our February 7 decision,
the agency had advised that since items 26a and 27a-- respectively for
repair and renewal of the main weather deck "Starboard" and "Port"--had
been awarded to Pacific, award of item 14 was unnecessary because the
two other items included the same work required by item 14. Triple A
now requests that we reconsider the February 7 decision on the basis
that information which it had presented in its comments on the agency
report showed that the work required by item 14 was in fact different
from the work required by items 26a and 27a.
Triple A's request for reconsideration indicates that it believes
that its disagreement with the agency concerning the relationship
between the work required by item 14 and items 26a and 27a was dismissed
by our Office as untimely. This is incorrect. While a part of the
protester's grounds for protest was dismissed as untimely, our dismissal
did not involve the matter of the agency's failure to award item 14. In
our February 7 decision, we stated in part that we did not believe that
bidders could anticipate that any of the solicitation's "base bid items"
such as item 14 would be excluded from award. However, we held that the
agency's failure to award item 14 did not prejudice Triple A since the
agency decided to repair and renew the main weather deck using teak
margins and Triple A had only bid on the fir margin alternative for
items 14, 26a, and 27a. Thus, we concluded that Triple A would not have
been eligible for award even if item 14 had been awarded. Since Triple
A was not prejudiced by the agency's failure to award item 14, we found
it unnecessary to determine the validity of the agency's reason for
omitting item 14 from the award.
In order to prevail in a request for reconsideration, the requesting
party must convincingly show either errors of law or fact in our prior
decision which would warrant its reversal. See 4 C.F.R. Sec. 21.12(a)
(1985). Since the relationship between the work required under item 14
and items 26a and 27a was immaterial to whether Triple A was prejudiced
by the agency's failure to award item 14, Triple A has not made such a
showing. Accordingly, our prior decision is affirmed.
Acting Comptroller General
of the United States
FILE: B-220282.2 86-1 CPD 140
DATE: February 7, 1986
MATTER OF: Triple A. Shipyards
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTOR
1. Protest alleging improper actions of contracting officer at bid
opening is untimely where protest was filed over 1 month after bid
opening.
BIDS - RESPONSIVENESS - FAILURE TO FURNISH SOMETHING REQUIRED -
PRICES
2. Bid which indicated "no bid" for one subitem and only offered bid
on the alternative subitem is nonresponsive where the contract awarded
included the subitem for which the "no bid" notation had been entered.
By not bidding on both subitems, each of which requested a different
material, the bidder assumed the risk that its bid would be unacceptable
if the subitem not bid upon was included in the contract awarded.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
3. Protest of alleged ambiguities and defects in solicitation is
dismissed as untimely where the alleged ambiguities and defects were
apparent on the face of the solicitation but were not protested until
after the bid opening.
Triple A Shipyards (Triple A), a division of Triple A Machine Shop,
Inc., protests the rejection of its bid as nonresponsive and award to
Pacific Dry Dock and Repair Co. (Pacific) under invitation for bids
(IFB) No. 8140-85-B-0042, issued by the National Park Service,
Department of the Interior, for drydocking and repair of the Balclutha,
an historic square rigged sailing ship. Triple A's protest is denied in
part and dismissed in part.
The IFB was issued on July 26, 1985, and bids were submitted by three
firms including Triple A and Pacific. Bid opening was on August 26,
1985. The bids submitted by Triple A and another bidder were determined
to be nonresponsive and award was made to Pacific on September 10, 1985.
We note that the other bidder was determined nonresponsive by the
agency for reasons wholly unrelated to any of the matters raised by
Triple A in its protest.
In its initial protest letter, filed in our Office on September 17,
1985, Triple A argued that the agency should not have accepted Pacific's
bid, since Pacific bid on each individual item on the bid schedule, but
did not submit a total bid price for all items. This initial protest
was dismissed by our Office without receiving an agency report on the
issue. Triple A Shipyards, B-220282, Sept. 27, 1985, 85-2 C.P.D
Paragraph 352. We held that since Pacific had entered a bid price for
every item, it had in effect offered to perform as required under the
solicitation and, thus, the failure to enter a total bid price did not
render its bid nonresponsive. Triple A has not requested that we
reconsider our September 27 decision and, therefore, we will not
consider the issue further.
On September 27, 1985, Triple A filed a second protest letter in
which it protested several other aspects of this procurement. Among
other things, the protester objected to the actions of the contracting
officer at the August 26 bid opening, specifically, the contracting
officer's removal of Pacific's bid from the bid opening room in order to
compute the total amount of Pacific's bid and his announcement of only
Pacific's total bid price and not the prices bid by Pacific on the
individual line items.
Our Bid Protest Regulations provide that a protest must be filed
within 10 days after the protest grounds were known or should have been
known. 4 C.F.R. Section 21.2(a)(2) (1985). Since the contracting
officer's allegedly improper actions were known to the protester at the
time of bid opening -- August 26 -- Triple A's protest of these actions
which was filed with our Office on September 27 -- about 1 month after
bid opening -- is clearly untimely and will not be considered on the
merits.
In its September 27 protest, Triple A also protests the contracting
officer's rejection of its bid as nonresponsive and maintains that the
award to Pacific was defective in that it did not include item 14, which
was identified in the IFB as a "base bid item." We discuss these issues
in turn.
There were 27 items set forth in the solicitation schedule: items 1
through 14 were designated as "base bid items," items 15 through 19 as
"contingency items" and items 20 through 27 as "option items." Preceding
the list of bid items, the solicitation provided, in part, that "the
bidder shall insert a bid price opposite each item listed below."
Following the bid items, the solicitation stated:
"Award will be made to one bidder in accordance with the
instructions to bidders. Determination of the low bidder will be
based on the total bid including all contingencies and options."
Triple A indicated "no bid" on subitems 14a, 26a and 27a. The agency
takes the position that Triple A's failure to bid on these subitems made
its bid nonresponsive. Item 14 was for "Repair, Renewal of Main Weather
Deck." Items 26 and 27 were, respectively, for repair and renewal of the
main weather deck "Starboard" and "Port." Subitem "a" under items 14,
26, and 27 specified "With Teak Margines" and subitems "b" specified
"With Fir Margins." In other words, Triple A bid only on fir margins
under items 14, 26, and 27 and indicated "No Bid" for teak margines.
The file shows that award to Pacific under the solicitation included
subitems 26a and 27a, but did not include item 14a. The agency advises
that it was its intent to preserve its flexibility to choose the work to
be performed under the contract until the bids were opened and the costs
of alternate approaches were known. The agency further states that in
view of the fact that the award includes items 26a and 27a, which
included the repairs required under item 14, it determined that award of
item 14 was unnecessary.
Triple A explains that it bid only on the fir alternate items under
items 14, 26 and 27 because it was unable to obtain a firm commitment
for timely delivery of "First European Quality Teak" as required in the
solicitation's statement of work. Based on a statement in the
solicitation indicating the agency's awareness of the shortage of the
requested high grade teak, the protester states it presumed that it "had
an alternate" and priced only the fir.
The solicitation's statement of work concerning items 26 and 27
provided that all material "shall conform" to the standards established
by the statement of work for bid item 14. That statement of work
provided with regard to materials that "all margin planking shall be
First European Quality Teak." This statement of work further provided
that "Depending on availability of quality teak, an alternate method
using douglas fir margin planking may be specified by the CO
(contracting officer)." While the agency could have more clearly stated
its intent to obtain teak margins, we believe that this language was
sufficiently clear to place prospective bidders on notice that, if
possible, the agency intended to make award for teak margin planking
under items 14, 26, and 27. The option permitting the contracting
officer to select douglas fir as an alternate material for the margin
planking apparently was intended to address a situation where teak was
either not available or was only offered at clearly unreasonable prices.
It is clear under the solicitation that the determination as to whether
teak or fir was to be used for the margin planking was a decision to be
made by the contracting officer and not the bidders.
The term "no bid" normally is regarded as expressing a bidder's
intention not to furnish an item so that a "no bid" of a required item
results in an unacceptable bid. See James W. Boyer Co., B-187539, Nov.
17, 1976, 76-2 C.P.D. Paragraph 433. Since the award included teak
margin planking under items 26a and 27a, items for which Triple A
indicated "No Bid," the contracting officer properly determined that the
bid submitted by Triple A was ineligible for award. Where a bidder has
bid under one alternate item, but has failed to bid another alternate,
the bidder runs the risk that it would not be eligible for award should
the government elect to accept an alternate not bid upon. See Casson
Construction Company, Inc., B-198746, Oct. 24, 1980, 80-2 C. P.D.
Paragraph 318 at 3. We therefore deny Triple A's protest of the
rejection of its bid.
Triple A also argues that the award to Pacific was defective because
it omitted item 14, identified in the IFB as a "base bid item." As
stated above, the agency states that in view of the fact that the award
included items 26a and 27a, it determined that award of item 14 was
unnecessary. In addition, the agency maintains that it was not required
to award all base items since the solicitation incorporated by reference
the contract clause set forth at Federal Acquisition Regulation (FAR),
Section 52.214-10, Federal Acquisition Circular 84-5, April 1, 1985,
entitled "Contract Award-Sealed Bidding." That clause provides in
pertinent part that "(t)he government may accept any item or group of
items in a bid, unless the bidder qualifies the bid by specific
limitations.
Notwithstanding the cited clause, the solicitation did indicate that
item 14 would be awarded since it was designated as a "base bid item"
and was to be evaluated for award. While the agency never intended to
issue an award encompassing all bid items, we do not believe that
bidders reasonably could anticipate that any of the "base bid items"
would be excluded from award. Moreover, it is well established that for
purposes of award bid prices must be evaluated against the actual work
to be awarded. Southeastern Services, Inc. and Worldwide Services,
Inc., 56 Comp. Gen. 668 (1977), 77-1 C.P.D. Paragraph 390; Linolex
Systems, Inc., and American Terminals & Communications, Inc., 53 Comp.
Gen. 895 (1974), 74-1 C.P.D. Paragraph 296. However, here the agency's
failure to award item 14 did not prejudice Triple A since the agency
decided to repair the main weather deck using teak margines whereas
Triple A only bid on the fir alternates for items 14, 26, and 27. Thus,
Triple A would not have been eligible for award even if item 14 had been
awarded. See Minnesota Mining and Manufacturing Co., B-212004, Nov. 17,
1983, 83-2 C.P.D. Paragraph 578 at 3. By letter of today, we are
recommending to the Department of the Interior that in similar future
procurements it more clearly set out the manner in which items will be
selected for award and that it set forth price evaluation criteria which
will correspond to the base bid items actually awarded.
Triple A also alleges that the IFB is "confusing and capricious" in
certain other respects. The protester points out that although the
solicitation stated that the low bidder would be determined on the basis
of the total price for all 27 items, the line on the same page which
required bidders to insert a total bid price referred to "items 1
through 25." Triple A also argues that the IFB did not inform
prospective bidders as to how bids were going to be evaluated with
respect to base items 8, 11, and 14, as well as two contingent items and
three option items.
Our Bid Protest Regulations provide that protests based upon alleged
improprieties in a solicitation which are apparent prior to bid opening
shall be filed prior to bid opening. 4 C.F.R. Section 21.2(a)(1)
(1985). Accordingly, since these alleged inconsistencies and
ambiguities were apparent upon reading the IFB, Triple A's objection to
the discrepancy between the solicitation's line for the bidder's "total
bid" and the solicitation's bid evaluation scheme, as well as its
objection to the ambiguity of the IFB regarding the evaluation of
certain items, is untimely and will not be considered by our Office.
See GM Industries, Inc., B-216297, May 23, 1985, 85-1 C.P.D. Paragraph
588.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
FILE: B-220282 85-2 CPD 352
DATE: September 27, 1985
MATTER OF: Triple A Shipyards
DIGEST:
BIDS - RESPONSIVENESS - PRICING RESPONSE - MINOR DEVIATIONS FROM IFB
REQUIREMENTS
Where a bidder enters a bid price for every item on the bid schedule,
the bidder has offered to perform as required under the solicitation and
at a price determinable from the face of the bid. Accordingly, the
bidder's failure to enter a total price did not render the bid
nonresponsive and, instead, may be considered an informality and waived.
Triple A Shipyards (Triple A) has protested award to Pacific Dry Dock
and Repair Co. under invitation for bids (IFB) No. 8140-85-B-0042 issued
by the National Park service, Department of the Interior, for drydocking
of the historic square rigged sailing ship BALCLUTHA. The protest is
dismissed. We do so without having received a report from the
contracting agency since it is clear from its face that the protest is
without merit. 4 C.F.R. Section 21.3(f) (1985).
Triple A advises that the IFB was issued on July 26, 1985, and that
bid opening was on August 26, 1985. According to the protester, bidders
were to complete section B of the solicitation, which consisted of over
20 items identified as "Base Bid Items," "Contingency Items" and
"Option Items" and that blank lines for indicating "Unit Price" and
"Total Amount" followed each item. At the end of the listed items was a
separate line stating "Total Bid" (items 1 through 25), followed with a
blank line on which the bidder was to indicate its total bid price. The
protester states that after opening the bids and announcing the total
bid price submitted by two of the three bidders, the contracting officer
stated that the third bidder -- Pacific -- had not placed a total bid
amount on the form. According to Triple A, the contracting officer left
the bid room, returned a short time later, and announced that the total
price of Pacific's bid was $1,037,255. By letter dated September 10,
1985, the agency advised Triple A that award had been made to Pacific in
the amount of $575,490.
The only ground for protest specifically stated by Triple A is that
Pacific's bid should have been rejected as "not responsive" because of
that bidder's failure to enter a total price. We disagree.
To be responsive the bid as submitted must represent an unequivocal
offer to perform the exact thing required by the solicitation so that
acceptance of the bid will bind the contractor to perform in accordance
with the solicitation's material terms and conditions. See Olympia USA,
Inc., B-216509, Nov. 8, 1984, 84-2 C.P.D. Paragraph 513 at 13. We have
held that when a bidder entered a bid price for every item, it had, in
effect, offered to perform as required under the solicitation.
Accordingly, its failure to enter a total price did not render its bid
nonresponsive and the failure instead was properly considered as an
informality and waived. OTKM Construction Inc., B-219619, Sept. 5,
1985, 64 Comp. Gen. . . . , 85-2 C.P.D. Paragraph . . . at 6, 7. In the
absence of an indication that Pacific failed to provide a price for any
individual item in the bid schedule, its failure to furnish a total bid
price was properly for waiver as a minor informality. Thus, the agency
properly regarded Pacific's bid as responsive.
The protest is dismissed.
/s/ Robert M. Strong
Deputy Associate
General Counsel
FILE: B-22O278 85-2 CPD 549 DATE: November 13, 1985
MATTER OF: Priscidon Enterprises, Inc.
DIGEST:
CONTRACTS - PROTESTS - INTERESTED PARTY REQUIREMENT - DIRECT INTEREST
CRITERION
Consulting firm which is not a potential bidder is not an
interested party under GAO's Bid Protest Procedures.
Priscidon Enterprises, Inc. protests that invitation for bids (IFB)
No. DAKF15-86-B-0001, issued by the Department of the Army, Fort
Sheridan, Chicago, is unduly restrictive of competition. The IFB
solicited bids to provide meals, lodging and transportation for recruits
at the Chicago Military Entrance Processing Station. According to the
protester, the IFB unduly restricts competition to firms that can
provide facilities within a limited geographical "area of
consideration." We dismiss the protest.
The protest was filed by Don Strickland's Consultant and Advisory
Service, on behalf of Priscidon, which was described in the protest as
"a small business, an interested party and a prospective offeror."
However, the record shows that Priscidon and Strickland are the same
entity, that Prescidon has no intention of competing for the contract,
and that, at most, Priscidon is protesting on behalf of an unidentified
third party. Priscidon and Strickland are consulting firms located in
North Carolina.
Our Bid Protest Regulations, 4 C.F.R. Sec. 21.1 (a) (1985), require
that a party be "interested" for its protest to be considered. An
interested party is def ined as "an actual or prospective bidder or
offeror whose direct economic interest would be affected by the award of
a contract or by the failure to award a contract." 4 C.F.R. Sec.
21.0(a). This protest was filed in the name of Priscidon Enterprises,
not in the name of any third party that Priscidon may represent.
Priscidon, however, is not a potential bidder on this solicitation for
hotel services in Chicago and is not, therefore, an interested party.
Don Strickland's Consultant and Advisory Service, B-217460, Jan. 18,
1985, 85-1 C.P.D. P 66.
The protest is dismis d.
Ronald Berger
Deputy Associate
General Counsel
FILE: B-220277 85-2 CPD 317
DATE: September 20, 1985
MATTER OF: Sermor Inc.
DIGEST:
BIDDERS - DEBARMENT - DE FACTO - NONRESPONSIBILITY DETERMINATIONS V.
DE FACTO DEBARMENT
The fact that contracting agency has more than once relied on
negative preaward survey by Defense Contract Administration Services
Management Area (DCASMA) in making a negative determination of
protester's responsibility does not constitute a de facto debarment by
either the contracting agency or DCASMA because such determinations are
subject to the Small Business Administration's independent and
conclusive authority to determine small business responsibility.
Sermor Inc., a small business, protests an award to any other firm
under request for proposals (RFP) No. F41608-85-R-0606 issued by the San
Antonio Air Logistics Center, Kelly Air Force Base, Texas (Air force).
On the basis of a negative preaward survey by Defense Contract
Administration Services Management Area/Orlando (DCASMA), the Air Force
determined that Sermor was nonresponsible. The Air Force advises that
this negative determination of responsibility has been referred to the
Small Business Administration (SBA) for consideration under its
certificate of competency program.
We dismiss the protest.
Sermor objects to the Air Force's reliance on DCASMA's preaward
survey as the basis of its nonresponsibility determination and the Air
Force's alleged refusal to consider information furnished by Sermor to
the effect that Sermor has 80 percent of the parts and dollar value of
the contract in stock. Moreover, because the Air Force has previously
relied on similar DCASMA surveys as the basis for negative
determinations of Sermor's responsibility, Sermor contends that it is
the victim of de facto debarment by DCASMA.
We considered and rejected similar arguments in our decision in
Sermor Inc., B-219173, July 17, 1985, 85-2 C.P.D. Paragraph 56.
Although we are now reconsidering that decision, the reconsideration
does not pertain to the issue of de facto debarment. In the cited
decision, we noted the conclusive nature of SBA's authority to determine
small business responsibility questions and our general policy of not
reviewing negative responsibility determinations involving a small
business. We held that SBA's independent and conclusive determination
of Sermor's responsibility precluded the possibility of contracting
agency action constituting an improper de facto debarment. We find that
the same reasoning is applicable to DCASMA actions which are also
subject to SBA review. We therefore are of the view that the Air
Force's repeated reliance on DCASMA findings as a basis for negative
determinations of Sermor's responsibility does not constitute a de facto
debarment of Sermor by either the Air Force or DCASMA.
/s/ Robert M. Strong
Deputy Associate General Counsel
FILE: B-220274 85-2 CPD 340
DATE: September 25, 1985
MATTER OF: Loundagin Corporation
BIDS - LATE - ACCEPTANCE - DELAY DUE TO IMPROPER GOVERNMENT ACTION
Contracting agency may accept a late bid based on its determination,
which the protester does not challenge, that delay in receiving the bid
was due to government mishandling.
DIGEST:
Loundagin Corporation protests the Navy's failure to award a contract
to Loundagin under invitation for bids (IFB) No. N62474-84-B-5054 for
painting of water storage tanks at the Naval Facility Centerville Beach,
Ferndale, California. We dismiss the protest.
The protester states that on September 6, 1985, the contracting
officer advised Loundagin that she would recommend that award be made to
Loundagin as the low bidder under the IFB. On September 11, however,
the contracting officer informed the protester that another bidder,
James-Carl, whose bid was received after bid opening, was the apparent
low bidder and would receive the award. According to the protester, the
Navy decided to accept James-Carl's late bid because the delay in
receiving its bid was due to mishandling by the government.
The basis of Loundagin's protest is that government mishandling under
no circumstances authorizes acceptance of a late bid. We disagree. A
late bid may be considered for award where it arrives late solely
because of government mishandling either in the process of receiving the
bid, or after receipt of the bid at the government installation. See
Sun International, B-208146, Jan. 24, 1983, 83-1 CPD Paragraph 78;
Federal Acquisition Regulation Section 14.304-1(a)(2) (1984). Here, the
contracting agency made a determination, which Loundagin does not
challenge, that government mishandling was the cause of the late receipt
of the prospective awardee's bid. In light of this determination, the
Navy was not precluded from accepting the late bid.
In addition, contrary to the protester's contention, the fact that
the late bid was not opened along with the other bids at the public bid
opening is not dispositive, since it was proper for the agency to accept
the late bid in this case. In any event, once the bid was received and
opened, it was available for public inspection to the same extent as the
other bids.
The protest is dismissed.
/s/ Ronald Berger
Deputy Associate General Counsel
FILE: B-220273 85-2 CPD 367
DATE: September 30, 1985
MATTER OF: Parker Shane Mfg.
DIGEST:
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - PRICES - UNPROFITABLE
There is no legal basis to object to a below-cost offer. Moreover,
any speculation that the offer may be mistaken does not provide a basis
to protest the award.
Parker Shane Mfg. protests the award of a fixed-price contract to the
Boeing Co. under request for proposals (RFP) No. F34601-85-R-05061
issued by the Department of the Air Force, Tinker Air Force Base,
Oklahoma, for 67 refueling booms. Parker contends that Boeing's item
price, 84.51 percent lower than Boeing's price on a prior contract for
one refueling boom, is indicative of an attempt to eliminate small
business competition by "predatory pricing" and buying-in.
We dismiss the protest.
We have considered previously a contention that an award to a
below-cost or buy-in offeror would restrict free and open competition.
Environmental Aseptic Services Administration, B-218239, Mar. 5, 1985,
85-1 C.P.D. paragraph 276. We indicated that an agency's acceptance of
a buy-in or below-cost, fixed-price offer is not legally objectionable
and does not provide a basis upon which a contract award may be
challenged. Environmental Aseptic Services Administration, B-218239,
supra. Whether an offeror's price is below its cost is a matter for the
contracting officer to consider in determining whether the offeror is
responsible. Alan Scott Industries, B-219096, June 20, 1985, 85-1
C.P.D. Paragraph 706. Our Office, however, does not consider protests
concerning affirmative determinations of responsibility absent a showing
that the determination was made fraudulently or in bad faith or that
definitive responsibility criteria in the solicitation were not met. 4
C.F.R. Section 21.3(f)(5) (1985); Libby Corporation, B-218367.2, Apr.
10, 1985, 85-1 C.P.D. paragraph 412. Neither exception is alleged here.
Parker, in stating that Boeing's price per refueling boom is more
than 80 percent below Boeing's price on a prior contract for one
refueling boom, may be alleging that Boeing's offer contains a mistake.
However, our Office has consistently held that only the contracting
parties (here, the Air Force and Boeing) are in a position to assert
rights and bring forth all necessary evidence to resolve mistake
questions. Libby Corporation, B-218367.2, supra. Therefore, any
speculation by Parker that Boeing may have made a mistake does not
provide a valid basis for protesting the award. Libby Corporation,
B-218367.2, supra.
/s/ Robert M. Strong
Deputy Associate General Counsel
FILE: B-220268, B-220269 DATE: October 21, 1985
MATTER OF: Martin Widerker, Engineer
DIGEST.:
Defensive protests filed prior to award and
limited solely to the issue of the protesting
firm's alleged nonresponsibility are dismissed as
academic upon receipt of advice from contracting
agency that protester is not the apparent low
offeror and that for this reason the issue of
protester's responsibility will not arise.
Martin Widerker, Engineer (Widerker), protests any negative
determination of its responsibility which the Army may make concerning
its offer in response to request for proposal (RFP) No DAJ06-85-R-0124
(GAO file, B-220268) and RFP No. DAJA37-85-R-0675 (GAO file, B-220269)
issued by the U.S. Army Contracting Agency, Europe (Army).
Widerker's protests are defensive in nature and are intended to
preserve Widerker's rights should GAO uphold the Army's negative
determination of Widerker's responsibility under six other RFP's which
Widerker is currently protesting (GAO files, B-219872.1 through
B-219872.6).
The Army advises that Widerker is not the apparent low offeror under
either RFP and that for this reason the issue of Widerker's
responsibility will not arise rendering Widerker's two protests
acadenic. We agree. The protest is academic since regardless of the
outcome of these two protests, the protester is not in line for the
contract award. See Universal Parts and Services, Inc., B-216767,
B-216806, Dec. 12, 1984, 84-2 C.P.D. P 660.
The protest is dismissed.
Robert M. Strong
Deputy Associate
General Counsel
FILE: B-220253 85-2 CPD 592 DATE: November 22, 1985
MATTER OF: Hamilton Sorter Company, Inc.
DIGEST:
CONTRACTS - FEDERAL SUPPLY SCHEDULE - TO OTHER THAN LOW BIDDER OR
OFFEROR - JUSTIFICATION
1. Protest against the issuance of a delivery order to higher
priced Federal Supply Schedule (FSS) contractor by protester with
similar FSS contract is denied where the agency reasonably
determined that awardee met agency's needs and protester did not.
CONTRACTS - PROTESTS - ABANDONED
2. Where agency rebuts an issue raised in the initial protest
and the protester fails to respond to the agency's rebuttal in its
comments to the agency report, the issue is deemed abandoned.
Hamilton Sorter Company, Inc. (Hamilton), protests the issuance of
delivery order No. DLA-710-85-F-1237 by the Defense Logistics Agency
(DLA) to Center Core, Inc. (CCI), for modular furniture. The delivery
order was issued under the General Services Administration multiple
award Federal Supply Schedule (FSS) pursuant to request for quotations
(RFQ) No. DLA-710-85-T-0026. Hamilton contends that the FSS furniture
it offered meets or exceeds all RFQ specifications at a lower price than
CCI's furniture and, pursuant to the Federal Acquisition Regulation
(FAR), 48 C.F.R. Sec. 8.405-1 (1984), it should have been awarded the
contract.
We deny the protest.
Under section 8.405-1 of the FAR, an agency must place orders against
the multiple award FSS which will result in the lowest overall cost
alternative meeting the needs of the government. See Infomation
Marketing International, B-216945.2, Sept. 24, 1985, 85-2 C.P.D. P 325.
However, FAR, Sec. 8.405-1(a) (2) and (5) permit award at other than the
lowest price if a product has one or more special features or
performance characteristics necessary to meet the agency's needs not
present in the lowest-priced FSS product. See Information Marketing
International, B-216945.2, supra. this additional protest ground.
Radionic Hi-Tech, Inc., B-219116, Aug. 26, 1985, 85-2 C.P.D. P 230.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220238.2 85-2 CPD 476 DATE: October 28, 1985
MATTER OF: Freund Precision, Inc.--Reconsideration
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
RECONSIDERATION REQUESTS - ERROR OF FACT OR LAW - NOT ESTABLISHED
Prior decision dismissing protest as untimely is affirmed where
protester fails to show that GAO was in error in finding that
protester became aware of basis of its protest in oral
conversation with contracting agency official.
Freund Precision, Inc. asks that we reopen the file on its protest of
a contract award made by the Defense Logistics Agency (DLA) under
request for proposals No. DLA12O-85-R-1028. As discussed below, however,
because Freund fails to show that our dismissal of its protest against
the rejection of its proposal was in error, our prior decision is
affirmed.
We originally dismissed Freund's protest as untimely. Freund
Precision, Inc., B-220238, Sept. 13, 1985, 85-2 C.P.D. P . We relied on
tne fact that, by its own admission, Freund was aware of the basis of
its protest as a result of an oral conversation with a GLA official, but
failed to file its protest within 10 days of becoming so aware, as
required by our Bid Protest Regulations.
Freund now maintains that the oral information was "nothing more than
rumor," on which a protest could not have been based. We disagree. We
have recognized that although it may oe reasonable for a prospective
protester to wait for written notification of the contracting agency's
reasons for rejecting its proposal, a protester may not delay filing its
protest where it has in fact learned the basis of its protest orally.
A-Rentals, Inc., B-211326.2, Mar. 31, 1983, 83-1 C.P.D. P 580. In this
casem Freund originally admitted having had sufficient knowledge of the
basis of its protest at the time of the oral conversation. Moreover, we
cannot accept Freund's latest account that the information it learned
was a mere rumor. The record snows Freund had dealt with the
above-mentioned DLA official throughout tne course of the negotiation
process. Freund, therefore, had no reason to regard the official's oral
statements as "nothing more than rumor."
Accordinglym as Freund has failed to show that our dismissal of its
protest was in error, our prior decision is affirmed.
Harry R. Van Cleve
General Counsel
FILE: B-220238 85-2 CPD 289
DATE: September 13, 1985
MATTER OF: Freund Precision, Inc.
DIGEST:
CONTRACTS - PROTEST - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTOR
Basis for protest may be learned of orally, and time for filing
protest begins to run from the date oral advice is provided,
notwithstanding that written confirmation is provided later.
Freund Precision, Inc. protests the award of a contract to a
competitor by the Defense Logistics Agency under request for proposals
No. DLA120-85-R-1028. We find the protest to be untimely.
The documents submitted by the protester include a copy of a letter
dated August 15, 1985, in which the protester informs the contracting
agency that it will be protesting "based on the verbal conversation we
had," but that it first wants "written confirmation . . . so that (it)
can formally protest. . . ." It is apparent from this letter that Freund
was aware of its basis for protest at least by August 15. The fact that
it may have learned of that basis orally did not entitle it to wait for
written confirmation before protesting, as our Bid Protest Regulations
at 4 C.F.R. Section 21.2(a) (1985) simply require a protest such as this
to be filed within 10 days of when the basis for protest is known. That
basis may be learned of orally. See, e.g., FLS, Inc., B-212066, July
21, 1983, 83-2 CPD Paragraph 109; A-Rentals, Inc., B-211326.2, Mar 31,
1983, 83-1 CPD 580.
The protest is dismissed.
/s/ Ronald Berger
Deputy Associate General Counsel
FILE: B-220237.2 85-2 CPD 695
DATE: December 20, 1985
MATTER OF: Ballantine Laboratories, Inc.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION - APPROVED
SOURCES - ALTERNATIVES
1. GAO denies protest where the protester offered an alternate
product in lieu of the approved source item specified in the
solicitation and, as a result, was not considered for the award because
the alternate could not be analyzed and approved in time. The
solicitation notified all offerors that the length of time needed to
approve an alternate produce could prevent consideration for the current
contract award.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION - APPROVED
SOURCES - ALTERNATIVES
2. Fact that an agency's procedure for approving alternate products
takes more time than protester believes is necessary does not indicate
that the procedure lacks a reasonable basis.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - REJECTION - PROPRIETY
3. Where protester's offered alternate product was previously
approved under another company's name, but protester failed to point
this out in its offer, agency properly rejected protester's offer.
Ballantine Labs, Inc., protest the award of a contract to Tektronix,
Inc., under request for proposals (RFP) DLA900-84-R-1668 issued by the
Defense Electronics Supply Center (DESC), Defense Logistics Agency
(DLA), Dayton, Ohio. Ballantine states that DLA should not have
rejected the alternate product it offered because first article testing
was not required by the solicitation and, in any event, its product had
first article approval.
For the reasons which follow we deny the protest.
The RFP was issued on April 11, 1984, for replacement spares of a
certain test lead. The RFP described the item as follows:
"NSN 6625-01-040-0714
Test Lead
Tektronix (80009)) P/N 010-6105-03."
This test lead is used with certain Tektronix oscilloscopes for testing
and adjustment of numerous types of military electronic equipment. The
Tektronix item was specified as the required item of supply because the
Tektronix (the original equipment manufacturer) part number for the item
was the only description available which adequately described the
government's requirements.
The solicitation, however, did provide for the submission of
alternate items. Provision H-2, "Products Offered" clause, permitted
firms to offer alternate items that were either identical to or
physically, mechanically, electrically, and functionally interchangeable
with the Tektronix test lead. Offerors were required to furnish all of
the necessary information and data to establish that the alternate
product offered was equal to the Tektronix test lead. If the product
offered had previously been furnished to the government or otherwise
previously evaluated and approved, the offeror was to indicate the
contract and/or solicitation number under which the product was
furnished or approved. Finally, the clause warned offerors proposing
alternate items:
"Failure to furnish complete data and information required to
sufficiently establish acceptability of the product offered may
preclude consideration of the offer. In addition, offerors are
hereby advised that the Government will make every reasonable
effort to determine, prior to award, the acceptability of any
products offered which are within the range of consideration.
However, if such determination cannot be accomplished by the
expected contract award date, the products may be considered
technically unacceptable for this award . . . ."
Ballantine offered its Model 10662A MOD 115 test lead by the May 11
due date. Ballantine states that it repeatedly inquired with DESC as to
the status of the solicitation, but received no information. On
September 12, 1985, more than a year later, Ballantine was notified by
DESC that its offer was not eligible for award "because technical
requirements have been revised to require First Article Testing of all
alternate offers." An award was made to Tektronix for 1,332 test leads
at a unit price of $58.59. Ballantine's unit price offer for that
quantity was $57.75.
Ballantine protests that the solicitation did not require first
article testing. Moreover, Ballantine contends that the contracting
officer should have informed it of the first article test requirement.
Because he did not do so, Ballantine asserts that it lost the
opportunity to show DESC that its item had indeed received first article
approval.
The RFP did not provide for the first article testing. The DLA
explains that in the past, this test lead had been procured on a
sole-source basis from Tektronix, but more recently had been purchased
competitively under a data package which was developed around the
approved Tektronix item. This competitive data package not only
contained the technical criteria that had to be met, but also included a
first article testing requirement. The testing was to assure that the
test leads were compatible with the oscilloscopes. This was critical
since any deficiencies in test leads furnished by alternate sources
could result in erroneous oscilloscope readings.
As a result of previous competitive procurements which had
incorporated the first article data package, Avex Electronic Corp.
(Avex) and Hickok Electrical Instruments (Hickok) had become approved
sources for the test lead. However, prior to this procurement, the
competitive data package was canceled because the Navy determined that
it had been developed from Tektronix data which the government neither
owned nor had the rights to utilize.
Six firms submitted proposals; four of them offered alternate items
of their own manufacture. After receipt of proposals, the Navy
determined that before alternate items could be considered acceptable,
the offerors of such items would have to agree to submit first article
samples for testing and approval. The Navy took this position because
of the prior cancellation of the data package. The offered product and
technical information submitted with Ballantine's proposal did not
demonstrate to the Navy that Ballantine's alternate product was
acceptable absent first article testing. Since provision for first
article testing was not included in the RFP, the Navy decided to delay
taking action under the RFP in order to await the development of a
ongoing attempt to develop a military specification.
In May 1985, however, the contracting officer received notice that to
timely meet the users' needs, because of declining stock levels, he
would have to make an award under the RFP. The Navy projected that if
procurement action was delayed, the item w4uld be out of stock for 6
months. This projection was based on the fact that it would be another
6 months before the military specification, which would contain time
consuming first article testing for nonapproved sources, could be
finalized. The award to Tektronix followed.
Our Office has recognized that, in appropriate circumstances, the
procurement of items on a source-controlled basis is permitted. JGB
Enterprises, Inc., B-218430, Apr. 26, 1985, 85-1 C.P.D. Paragraph 479.
Contracting agencies have considerable discretion in the establishment
of testing procedures and in the absence of a showing that the agency's
actions lack a reasonable basis, we will not substitute our judgment for
that of the agency. T.G.L. Rubber Co., Ltd. B-206923, Sept. 20, 1982,
82-2 C.P.D. Paragraph 239. However, we have also held that the
authority to solicit from an approved source does not preclude the
submission and consideration of proposals from unapproved sources that
can otherwise qualify their products under suitable testing procedures.
Hill Industries, B-210093, July 6, 1983, 83-2 C.P.D. Paragraph 59.
Although this solicitation did not contain a first article test
provision, it clearly warned offerors that while the government would
make every reasonable effort to determine the acceptability of products
offered which are within the range of consideration, if such
determination could not be timely made, the product might be considered
technically unacceptable. We have held that where standardized
performance testing criteria have yet to be developed and the agency
cannot evaluate the alternate item until such criteria are developed,
the contracting officer's rejection of the item is not improper.
Compressor Engineering Corp., B-206879, Oct. 29, 1982, 82-2 C.P.D.
Paragraph 383.
With respect to Ballantine's argument that its product, which it
supplied to Hickok under the prior contract, has been approved under
first article testing, the Navy points out that the item submitted by
Hickok received first article approval on March 23, 1984, more than 1
month prior to the submission of Ballantine's proposal, but that
Ballantine did not indicate in its proposal that its Model 10662A MOD
115 was the item which was submitted by Hickok for first article
approval. As indicated above, the solicitation places the burden on the
offeror to show that its alternate item is approved. Since Ballantine
did not point out that its test lead was the same as the Hickok item,
the Navy had no way of knowing that Ballantine's item had received first
article approval.
Finally, we accept the Navy's explanation of the long delay in
conducting this procurement. From the inception of this procurement,
the Navy was attempting to qualify more offerors and, thus, broaden
competition. During that time the new military specification had not
been developed, so the standards or any first article tests required for
approving products from nonapproved sources had not been established.
It was only when the Navy's inventory position became critical that the
Navy made an award based on the information before it as to which
offerors had first article approval. In this case since the RFP clearly
required offerors which proposed alternate products to furnish data on
these products, we do not think it was unreasonable for the Navy to rely
on the information which Ballantine itself had submitted that did not
show its product had been previously furnished and approved. Thus, even
though the protester complains that the Navy never queried it about its
product during this lengthy period, we think that under these
circumstances the Navy had no duty to communicate with Ballantine
regarding first article testing and product approval requirements.
We note that the Navy is presently considering the information
submitted by Ballantine as part of its protest that the Ballantine test
lead was one which was approved by the Navy under the Hickok first
article contract. The Navy states that its review of this information
will determine whether Ballantine will be eligible for a waiver of first
article test requirements under future procurements.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220236 85-2 CPD 316
DATE: September 20, 1985
MATTER OF: Imperial Oil Company, Inc.
DIGEST:
CONTRACTORS - RESPONSIBILITY - DETERMINATION - REVIEW BY GAO -
AFFIRMATIVE FINDING ACCEPTED
Protest that bidder does not qualify as labor surplus area concern
because less than 50 percent of the manufacturing costs are in a labor
surplus area involves a determination of affirmative bidder
responsibility not for consideration by GAO.
Imperial Oil Company, Inc. (Imperial), protests an award to
Battenfeld-American, Inc. (Battenfeld), by the Defense General Supply
Center, Defense Logistics Agency, Richmond, Virginia, for the supply of
various lubricating oils. Imperial reports that Battenfeld received the
award because it was determined to be a labor surplus area (LSA)
concern. Imperial protests that Battenfeld cannot qualify as an LSA
concern because its cost for manufacturing in the LSA do not exceed 50
percent of its total costs. Additionally, Imperial states that it has
reason to believe that Battenfeld will supply products other than those
that it qualified and that it cannot manufacture its products at its bid
price using qualified products from United States refineries.
We dismiss the protest.
Battenfeld's bid apparently represents that it will perform more than
50 percent of the work in an LSA. Whether Battenfeld will perform the
required amount of work in an LSA relates to the contracting officer's
affirmative determination of Battenfeld's responsibility. Putnam Mills
Corporation, B-218776, June 24, 1985, 85-1 C.P.D. Paragraph 718. This
Office does not review protests against affirmative determinations of
responsibility unless there is a showing of possible fraud or bad faith
on the part of procuring officials or that the solicitation contains
definitive responsibility criteria that have not been applied. 4 C.F.R.
Section 21.3(f)(5) (1985); Pacific Fabrication, B-219837, Aug. 30,
1985, 85-2 C.P.D. Paragraph. . . . Neither exception has been alleged
here.
Similarly, Imperial's contention that Battenfeld cannot perform at
its bid price using using United States refinery products also concerns
bidder responsibility, not for consideration by our Office, inasmuch as
Battenfeld is obligated to perform in accordance with contract
requirements.
Finally, the contention that Battenfeld may not deliver properly
qualified products concerns whether Battenfeld will perform the contract
in accord with all of its terms and specifications. This is a matter of
contract administration. As such, it is the responsibility of the
contracting agency and is not encompassed by our Office's bid protest
function. 4 C.F.R. Section 21.3(f)(1) (1985); Alan Scott Industries et
al., 63 Comp. Gen. 610 (1984), 84-2 C.P.D. Paragraph 349.
The protest is dismissed.
/s/ Robert M. Strong
Deputy Associate General Counsel
FILE: B-220228 85-2 CPD 351
DATE: September 27, 1985
MATTER OF: AUL Instruments, Inc.
DIGEST:
CONTRACTS - PROTESTS - CONTRACT ADMINISTRATION - NOT FOR RESOLUTION
BY GAO
1. Whether a responsive bidder may submit claims during contract
performance for an equitable adjustment is a matter of contract
administration, not for resolution under GAO's Bid Protest Regulations.
CONTRACTORS - RESPONSIBILITY - DETERMINATION - REVIEW BY GAO -
AFFIRMATIVE FINDING ACCEPTED
2. The ability to perform a contract is a matter of responsibility
and GAO generally does not review affirmative determinations of
responsibility.
BIDS - RESPONSIVENESS - PRICING RESPONSE - MINOR DEVIATIONS FROM IFB
REQUIREMENTS
3. A bid should not be rejected as nonresponsive when notation of
NSP (not separately priced) instead of numerical prices is used as NSP
clearly equates with zero dollar costs and indicates the bidder's
affirmative intent to obligate itself to provide the items at no charge
to the government.
AUL Instruments, Inc. (AUL), protests the proposed award to Numax
Electronics Inc. (Numax) under solicitation No. DAAL01-85-B-0790, issued
by the United States Army Electronics Research and Development Command,
for infrared jammers and other end items.
We dismiss the protest in accordance with 4 C.F.R. Section 21.3(f)
(1985), which provides that when, on its face, a protest does not state
a valid basis for protest, the General Accounting Office will dismiss
the protest without requiring the submission of an agency report.
AUL states that the contract requires the contractor to have a secret
security clearance and, while Numax obtained a clearance after bid
opening, at the time Numax was preparing its bid, it did not possess a
valid clearance. Therefore, Numax would not have had access to key
information regarding costing production, alignment and testing of the
item, which was available only through classified documents. AUL alleges
that an award to Numax may be subject to later claims for an equitable
adjustment due to the absence of drawings.
Numax took no exception in its bid to the specifications and,
therefore, its bid was responsive. AUL's speculation that Numax may
later submit a claim under the contract is a matter of contract
administration, not for resolution under our Bid Protest Regulations, 4
C.F.R. Section 21.3(f)(1) (1985).
AUL's second basis of protest is that Numax submitted a nonresponsive
bid when it indicated on its bid that it would not acquire additional
industrial facilities and no special tools, dies, jigs, molds,
manufacturing aids or other special equipment to perform the contract.
AUL appears to argue that since Numax does not have and, therefore,
would need to acquire the specialized items mentioned above, its
statement that it does not have to acquire those items means that it is
nonresponsive and does not have the ability to perform.
The ability to perform a contract and whether a bidder has the
capacity to perform are matters of responsibility, not of
responsiveness. DAVSAM International, Inc., B-218201.3 Apr. 22, 1985,
85-1 C.P.D. Paragraph 462. We generally will not review an affirmative
determination of responsibility absent a showing of bad faith or that
definitive responsibility criteria in the solicitation were not met.
Career Consultants, Inc., B-203260.2, Nov. 19, 1981, 81-2 C.P.D.
Paragraph 409. There is no showing of bad faith here. Moreover, the
solicitation merely requested information as to whether additional
industrial facilities or special equipment would be required.
Accordingly, Numax's response did not require meeting definitive
criteria of responsibility.
AUL's third basis of protest is that the Numax bid is nonresponsive
because it noted "NSP" instead of numerical prices for many required
data items. We have held, however, that a bid should not be rejected
when NSP (not separately priced) is inserted. Spectrum Leasing
Corporation -- Request for Reconsideration, B-218267.2, Mar. 25, 1985,
85-1 C.P.D. Paragraph 350. An NSP notation clearly equates with zero
dollar costs and indicates the bidder's affirmative intent to obligate
itself to provide the items at no charge to the government.
The protest is dismissed.
/s/ Robert M. Strong
Deputy Associate General Counsel
FILE: B-220224 85-2 CPD 680
DATE: December 17, 1985
MATTER OF: Kings Point Mfg. Co., Inc.
CONTRACTS - NEGOTIATION - REQUESTS FOR PROPOSALS - MINIMUM NEEDS
REQUIREMENT - REASONABLENESS
1. Contention that agency improperly decided to use multiyear
contracting and to solicit option quantities under solicitation is
denied. Where agency has established reasonable basis for using
multiyear contracting and soliciting option quantities, the protester's
disagreement with the agency's conclusions does not establish that the
determination was improper.
CONTRACTS - CLAUSES - ECONOMIC PRICE ADJUSTMENT
2. Contention that agency should have included an economic price
adjustment clause in solicitation is denied because use of such a clause
is discretionary with agency and no abuse of discretion has been shown.
Kings Point Mfg. Co., Inc. (Kings Point), protests against request
for proposals (RFP) No. F09603-85-R-1589, a multiyear solicitation for
cargo nets issued by the United States Air Force. The solicitation's
multiyear contracting format required that offerors submit prices for 2
program years and for options available in each program year. The RFP
further advised that proposals were to be evaluated on a multiyear basis
only. Kings Point contends that the contract format is improper because
it allegedly will restrict competition and will not permit offerors to
submit their lowest possible price. Kings Point argues that the RFP
should be modified in any one of the following ways: (1) provide for a
single-year procurement instead of multiyear; (2) include an Economic
Price Adjustment (EPA) clause; or (3) exclude the second year option.
We deny the protest.
Kings Point contends that future market prices for cargo nets cannot
be predicted because the nylon webbing of the nets is a petroleum-based
product and historically there have been great fluctuations in petroleum
prices. It has submitted statements from suppliers indicating that they
will make price commitments for only limited periods of time. Kings
Point notes, however, that this contract could extend through October
1987. It argues that, consequently, offerors are unable to make a
realistic estimate of prices for these nets beyond 6 months.
Kings Point contends that, since realistic estimates cannot be made,
the multiyear format will require offerors to anticipate price increases
for supplies in their prices to the government and, consequently, the
government will not obtain the lowest fixed price possible. Kings Point
further states that the second year option quantity constitutes a
significant part of the total quantity under the contract and, since the
contractor is forced to consider potential increases in costs in its
option price, there is an increased risk that the government will not
award that option quantity because the price offered will be considered
unreasonable. Kings Point suggests that any one of its three proposed
modifications to the RFP would minimize the "uncontrollable risk of
acquiring materials at fixed cost over the life of this contract."
It is well established that the expression of the government's
requirements in a solicitation must reflect the actual and legitimate
minimum needs of the government. Sentinel Electronics, Inc., B-212770,
Dec. 20, 1983, 84-1 C.P.D. Paragraph 5. We think this principle
necessarily applies to the contracting format used to purchase the
quantities of items which an agency has determined to be necessary.
Here, the Air Force maintains that a multiyear contract with options
represents its actual and legitimate needs.
In this regard, the contracting agency has the primary responsibility
for determining its minimum needs and the method of accommodating them,
and our Office will not guestion an agency's decision concerning the
best method of accommodating its minimum needs absent clear evidence
that those decisions are arbitrary or unreasonable. ASC Pacific Inc.,
B-217188, May 3, 1985, 85-1 C.P.D. Paragraph 497. We therefore will
uphold an agency's rationally based decision to procure on a multiyear
basis and/or include option requirements unless the protester shows that
the decision is clearly unreasonable. A mere difference of opinion
between the protester and the agency concerning the agency's needs is
not sufficient to upset an agency's determination. Hydro-Dredge
Corporation, B-215873, Feb. 4, 1985, 85-1 C.P.D. Paragraph 132.
Kings Point has failed to establish as arbitrary the Air Force's
determination that multiyear contracting for cargo nets is advantageous.
Consistent with the procedures for the use of multiyear contracting
under Federal Acquisition Regulation (FAR), Section 17.103-1 (a)
(Federal Acquisition Circular (FAC) 84-5, April 1, 1985), the
contracting officer determined that the use of such a contract would
result in reduced total costs under the contract and that the Air Force
estimates of both the cost of the contract and the anticipated cost
avoidance through the use of a multiyear contract were realistic. The
Air Force explains that it expects reduced total costs under the
multiyear contracting approach because a larger quantity of nets will be
purchased from one firm, thus establishing a longer production run for
that firm. The Air Force asserts that a longer contract period will
permit the contractor to achieve savings because the firm can stabilize
its work force, reduce its startup and phaseout costs, and make capital
investment improvements. The Air Force expects that these benefits will
permit offerors to submit lower prices than would be submitted under a
solicitation for 1 year's requirements. The Air Force also states that
it was able to make a realistic estimate of the cost of the contract
because its review of the economic market indicated that the prices for
cargo nets are reasonably predictable for the duration of the contract.
As discussed above, Kings Point disagrees with the agency's
determination on the basis of its analysis of the market for cargo nets.
However, a difference of opinion between the protester and the agency
does not establish that the Air Force's determination to use multiyear
contracting was improper. Hydro-Dredge Corporation, B-215873, supra.
Kings Point also has failed to establish as arbitrary the Air Force's
determination under FAR, 48 C.F.R. Section 17.202 (1984), that including
option requirements for both program years was in the best interest of
the government. The contracting officer decided to include the option
requirements for the following reasons: (1) the items are not readily
available on the open market for acquisition by the government; (2) the
option quantities are known firm requirements for which funds are not
available at time of award and (3) market prices for cargo nets are not
expected to change substantially but, in the event an offeror does
expect substantial changes, the options within the 2 program years can
be priced independently and, therefore, an offeror may reflect any
potential increase in production costs in a higher quote for the option
quantities. The Air Force reports that the cargo nets are often damaged
in the field and the procurement history of these nets shows that
quantities greater than previous base year quantities solicited have
been purchased the last 5 years. We have stated that, under the FAR, a
contracting officer may include options in a contract when it is in the
government's best interests. See International Business Investments,
Inc., 63 Comp. Gen. 463 (1984), 84-1 C.P.D. Paragraph 693. Again, Kings
Point essentially disagrees with the Air Force's determinations that the
future market prices are reasonably foreseeable and that the provision
for option quantities under the RFP is in the government's best
interests. We therefore cannot conclude from the record that the Air
Force's decision was improper.
As to the need for an EPA clause, it is the offeror's responsibility
in offering a fixed-price contract to project costs and to include in
the contract price a factor covering any projected cost increases. Risk
is inherent in most types of contracts, but especially in multiyear,
fixed-price contracts such as the one involved here, and offerors are
expected to allow for that risk in computing their offers. See Palmetto
Enterprises, 57 Comp. Gen. 271 (1978), 78-1 C.P.D. Paragraph 116. The
basic purpose of an EPA clause is to protect the government in case of a
decrease in the cost of labor or material and the contractor in the
event of an increase. Galaxy Custodial Services, Inc., et al.,
B-215738, et al., June 10, 1985, 64 Comp. Gen. -- 85-1 C.P.D. Paragraph
658; see FAR, Section 16.203-2 (FAC 84-5, April 1, 1985). However, the
use of an EPA clause is discretionary with the procuring activity, and
we will only question a decision regarding use of an EPA clause where it
is shown to be arbitrary or capricious. Sentinel Electronics, Inc.,
B-212770, supra; Barker & Williamson, B-208236, Nov. 17, 1982, 82-2
C.P.D. Paragraph 454.
In making the determination of whether an EPA clause was appropriate
for this solicitation, the contracting officer considered, among other
factors, knowledge of the items to be acquired, awareness of existing
market conditions, the state of the economy, and the state of the
petroleum market. The contracting officer concluded that there was no
reason to anticipate change in market or labor conditions necessitating
inclusion of an EPA clause. The Air Force states that this conclusion
was supported by discussions held after the issuance of this
solicitation by the contracting officer with two firms which
subsequently submitted offers on this contract. The contracting officer
reports that one firm said that it had no difficulty obtaining vendor
quotes for material for the term of the contract and the other firm said
that the economic risk in proposing on those quotes did not exceed the
risks normally present in this type of business operation.
Although Kings Point challenges the credibility of one of the firms
surveyed, the agency's account of what the other firm said and the
agency's view of the stability of the market for these supplies, in our
view, the agency's consideration of relevant economic factors and its
discussions with two interested firms provided a reasonable basis for
its decision. Since the use of an EPA clause is discretionary, we
cannot find that the Air Force acted improperly by not including an EPA
clause.
We also note that we have been advised by the Air Force that four
offers were received in response to this solicitation and that the low
offer was determined to be reasonable. This indicates that, contrary to
Kings Point's assertions, firms apparently were able to forecast their
costs for this contract and were not restricted by the contract format
from submitting an offer.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220218 85-2 CPD 332
DATE: September 24, 1985
MATTER OF: Richard N. Stockebrand
DIGEST:
BIDS - ACCEPTANCE TIME LIMITATION - BIDS OFFERING DIFFERENT
ACCEPTANCE PERIODS - REJECTION OF BID
1. Bid which offered a bid acceptance period shorter than that
required in a solicitation is nonresponsive and bidder may not modify
bid after opening nor may the deficiency be waived.
CONTRACTS - AWARDS - ERRONEOUS - EFFECT OF SUBSEQUENT ACTIONS
2. Prior improper award where the awardee shortened the bid
acceptance period in the solicitation does not justify the error of
accepting a nonresponsive bid for an award.
Richard N. Stockebrand protests the rejection of its low bid as
nonresponsive under invitation for bids (IFB) No. R5-14-85-86, issued by
the United States Forest Service, for construction work on the East Fork
of New River Trail Bridge, Shasta-Trinity National Forest.
We dismiss the protest pursuant to 4 C.F.R. Section 21.3(f) (1985),
which provides for dismissal of a protest without obtaining an agency
report where it is clear on the face of the protest that it does not
state a valid basis of protest.
The contracting officer determined that the bid was nonresponsive
because the protester limited its bid acceptance period to 30 days while
the IFB specified that bids offering less than a 60-day acceptance
period would be rejected.
The protester states that it did not intend to limit the government's
rights but assumed that the contract would be awarded within 30 days.
It alleges that it read the 60-day acceptance requirement as meaning it
had the right to accept the contract within 60 days and it felt that it
was in both the Forest Service's and its own interest to start contract
performance prior to 60 days. The protester also argues that it should
have been given an opportunity to cure this defect after bid opening
because it was only a minor informality or irregularity in its bid.
Finally, the protester contends that the Forest Service awarded a
contract, under another solicitation, even though the awardee had
included a similar limitation of the acceptance period which violated
the solicitation's requirements. The protester states, therefore, that
the Forest Service is inconsistent in its handling of its bid.
A bidder's intention to comply with the solicitation requirements
must be determined from the face of the bid itself without resort to any
explanation furnished after bid opening. Mobile Drilling Company, Inc.,
B-216989, Feb. 14, 1985, 85-1 C.P.D. Paragraph 199. We have held that
to allow a bidder to extend its bid acceptance period after bid opening
would necessarily be prejudicial to other bidders who offered the
required bid acceptance period because a bidder who offers the longer
acceptance period assumes a greater risk of price or market fluctuations
than a bidder who does not. Charles Vrana and Son Construction Company,
B-218509, Apr. 26, 1985, 85-1 C.P.D. Paragraph 480. Moreover, we have
consistently held that an IFB requirement that a bid remain available
for acceptance by the government for a prescribed time period to be
considered for award is a material requirement and is not waivable or
correctable after bid opening. Charles Vrana and Son Construction
Company, B-218509, supra.
Finally, concerning the protester's contention that the Forest
Service is being inconsistent, we note that although an improper award
may have been made in a prior procurement, it does not justify
repetition of the same error in subsequent procurements. Intex
Insulating Company, B-216583, Oct. 11, 1984, 84-2 C.P.D. Paragraph 401.
Accordingly, the Forest Service's rejection of the protester's bid as
nonresponsive was proper.
/s/ Robert M. Strong
Deputy Associate General Counsel
FILE: B-220216.2 86-1 CPD 45
DATE: January 15, 1986
MATTER OF: Walker's Freight Line
CONTRACTS - CONFLICT OF INTEREST PROHIBITIONS - GENERALLY
1. Award to a firm, one of whose officials is a former employee of
the contracting agency does not automatically indicate that the award
resulted from improper influence or a conflict of interest.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTOR
2. Protest is dismissed with respect to issues first raised in the
protester's comments on the administrative report, since those issues
were not protested within 10 days of the date the basis of protest were
known, or should have been known, to the protester.
Walker's Freight Line (Walker) protests the award of a contract to
Bill White, Inc. (White), under invitation for bids No. CS-LA-85-30,
issued by the United States Customs Service, Los Angeles District, for
cartage services. Walker contends that it is better qualified than the
awardee and alleges that there was a conflict of interest in the award
of the contract to White. We deny the protest in part and dismiss it in
part.
In its protest, Walker states that "(t)here is a hint of foul play"
in the agency's award to White because White's vice president is a
former District Director of the Los Angeles office of the Customs
Service. Walker, however, has submitted no evidence tending to show
that the former Customs Service employee exerted improper influence on
behalf of White or that White received any improper consideration, and
we find no such evidence in the record. The incidence of a former
government employee's subsequent employment with an awardee is not,
alone, sufficient to establish that the award resulted from improper
influence. BOW Industries, Inc., B-216512, Apr. 17, 1985, 85-1 C.P.D.
Paragraph 436 at 4. Since Walker has presented no evidence supporting
its contention, we find no basis to conclude that there was any improper
influence or conflict of interest inherent on the award.
In its comments on the agency report, the protester expands its bases
of protest beyond that articulated in its initial protest. Walker
maintains that although White is a licensed and bonded cartsman, White
does not possess certain operating authorities required by state and
federal authorities, as well as by the solicitation. Walker also
charges that White's bid was below the applicable tariff rate.
These allegations, which essentially concern matters of bidder
responsibility, are untimely. The contract was awarded on August 27
and, according to the agency, all bidders were notified of the award on
that date. Certainly the protester had notice of the award to White at
the latest by September 12, the date of its original protest. Under our
Bid Protest Regulations, a protest must be filed within 10 days of the
date the basis of the protest is known, or should have been known,
whichever is earlier. 4 C.F.R. Section 21.2(a)(2) (1985). Where a
protester initially files a timely protest and later supplements it with
new and independent grounds for protest, those subsequently raised
allegations must independently satisfy the timeliness requirements. Our
Regulations do not contemplate the unwarranted piecemeal development of
protests. Siska Construction Co., Inc., B-218428, June 11, 1985, 85-1
C.P.D. Paragraph 669. Since the protester's challenge to the awardee's
responsibility was not filed with our Office until November 18 -- almost
2 months after the initial protest letter -- it is untimely.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
FILE: B-220215 86-1 CPD 44
DATE: January 15, 1986
MATTER OF: Contel Information Systems, Inc.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
TECHNICAL ACCEPTABILITY - ADMINISTRATIVE DETERMINATION
1. Protest alleging that agency improperly determined awardee's
proposal technically acceptable since awardee's proposal did not offer
to comply with a material technical requirement is denied where agency's
overall evaluation indicates that awardee had not taken any exception to
the requirement.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION - CRITERIA
- APPLLICATION OF CRITERIA
2. Protest alleging that agency improperly relaxed a material
technical requirement is denied where record indicates that agency
evaluated proposals based on the same requirement.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
TECHNICAL ACCEPTABILITY - ADMINISTRATIVE DETERMINATION
3. Protest alleging that awardee's proposed system does not meet the
RFP's technical requirements is denied since agency's determination of
technical acceptability has not been shown to be unreasonable.
CONTRACTS - NEGOTIATION - REQUESTS FOR PROPOSALS - EVALUATION
CRITERIA
4. Allegation that RFP required offerors to price the same
maintenance services twice and that agency improperly evaluated the
duplicative costs is denied where review of the RFP indicates that
duplicative pricing was not solicited.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTOR
5. Protest alleging that awardee's proposal is materially unbalanced
is dismissed as untimely when raised more than 10 working days after the
protester received copy of awarded contract which indicated awardee's
offered prices for the various contract line items.
Contel Information Systems, Inc. (Contel) protests the award of a
contract to Ungermann-Bass, Inc. (U-B) under request for proposals (RFP)
No. N00600-85-R-1291 issued by the Department of the Navy. The RFP was
issued for the supply, installation and maintenance of six local area
networks (LANs) at six Naval Air Rework Facilities (NARFs) across the
United States. LANs are high-speed communications networking systems
which connect information processing equipment over a limited geographic
area. Contel argues that the system proposed by U-B does not meet the
RFP's technical requirements. In addition, Contel alleges that several
contract line item numbers (CLINS) for maintenance are redundant.
Contel argues that the Navy's evaluation of the duplicative items added
$650,00 to its proposal and if the duplicative costs are eliminated,
Contel's offer, rather than U-B's, is low. Also, Contel alleges that
U-B's proposal is materially unbalanced and that the Navy favored U-B by
eliminating a live test demonstration (LTD) requirement from the RFP.
We deny the protest in part and dismiss it in part.
The Navy issued the RFP on March 29, 1985. The solicitation divided
the supplies and services to be provided at each NARF into sixteen
separate lots. Lots 1-7 represented the initial work to be done at each
installation, lots 8-14 specified additional phases of the work, and
lots 15 and 16 represented option quantities. Each lot was further
divided into a number of line items detailing the specific tasks to be
accomplished and offerors were requested to submit their proposals on a
fixed-price, indefinite quantity basis. The RFP advised offerors that
all technical proposals would be evaluated on a pass/fail basis and that
award would be made to the lowest cost, technically acceptable offeror.
The Navy received four proposals and initially none of the four
offerors was found acceptable. Discussions were held and best and final
offers were requested by August 15. The offers received were as
follows:
The Navy found the offers submitted by U-B and Contel acceptable and
on August 30 awarded the contract to U-B, as the lowest, technically
acceptable offeror. Performance has been suspended pending our
resolution of the protest.
Technical Acceptability
Contel indicates that it is a systems integrator and, as such, tests
all available standard commercial products. Although Contel admits that
it has not tested all of the specific equipment offered by U-B for this
procurement, Contel argues that based on its knowledge of U-B's system,
U-B's proposal does not comply with the RFP's technical requirements in
at least three major areas.
First, paragraph 2.2.15, as amended, requires that, after a power
failure, the LAN be fully operable within 120 seconds after power is
restored. Contel argues that U-B's Network Access Units (NAUs) (devices
which provide terminal interface to the LAN) are started sequentially
and that an increment of several seconds is required for each unit to
become operational. Although U-B proposed a new Network Management
Center (NMC), (devices which provide the means to deal with the normal
operation of the LAN including initialization and which download the
software for each NAU after each individual NAU completes its own
internal diagnostic sequence) different from the NMC tested by Contel,
Contel asserts that it is not likely that more than 10-15 units could be
supported in a two-minute recovery period. Contel indicates that a
typical NARF installation includes between 300-400 NAUs and that as a
result, U-B could not possibly meet the requirement.
In addition, Contel alleges that U-B qualified its offer and did not
commit itself to meet the required recovery time. U-B's response to
paragraph 2.2.15 was as follows:
"The NAUs automatically load software to achieve operational
effectiveness after power failure. Since the system has many
components and may be quite large, the LAN will reload as close to
120 seconds as possible; the actual time to reload being
dependent on final network configuration."
Contel argues that this statement does not obligate U-B to meet the
120 second recovery time requirement and that the Navy should have
rejected the proposal for failing to comply with a mandatory technical
requirement. At the very least, Contel complains that the Navy
improperly relaxed a mandatory requirement and that Contel was not
provided an opportunity to submit an offer based on the less restrictive
specification.
Contel also alleges that U-B's commercially available devices do not
provide "directory assistance" as required by the RFP (para. C.2.6.4)
nor does the system permit selective priority of traffic for information
in the system (para. C.2.6.10). Contel argues that the directory
assistance, as it is known in the industry, requires a means for
identifying which users are operating at any given time on which parts
of the system and that this feature is not available on U-B's standard
devices. With respect to U-B's traffic priority scheme, Contel argues
that U-B's system provides for priority access to the system, but is not
capable of providing priority transmittal of the information in the
system as required by the RFP.
The Navy contends that U-B's offer was properly found acceptable.
The Navy asserts that U-B's response concerning the 120 second recovery
requirement complies with the specification and indicates that U-B may
take as long as 120 seconds, but no longer. In addition, the navy
argues that U-B's system can meet the recovery requirement and that
Contel's arguments are based on an incomplete knowledge of the
capability of U-B's equipment.
Concerning the RFP's directory assistance requirement, the Navy
contends that Contel has proposed its own definition of the term and
then argued that U-B fails to meet that definition. The Navy says that
the RFP simply required directory assistance and that the U-B system
allows users to access any other user on the network by referring to a
mnemonic name. The Navy contends that this system, as well as that
provided by Contel, was satisfactory. In addition, the Navy argues that
U-B's system incorporates a priority scheme which permits certain types
of transactions to have precedence over others. The Navy contends that
U-B took no exception to the RFP's requirements and that Contel's
assertions regarding the acceptability of U-B's proposal are without
merit.
As we have often stated, the determination of the merits of a
proposal, particularly with respect to technical considerations, is
primarily a matter of agency discretion, which will not be disturbed
unless it is shown to be unreasonable or in violation of procurement
laws or regulations. See, e.g., CD Systems, Inc., B-217067, Apr. 5,
1985, 85-1 CPD Paragraph 396. The protester has the burden of
affirmatively proving its case and the fact that the protester does not
agree with the agency's technical conclusions does not in itself render
the evaluation unreasonable. Litton Systems, Inc., Electron Tube
Division, 63 Comp. Gen. 585 (1984), 84-2 CPD Paragraph 317.
Based on the record, we find a reasonable basis for the Navy's
determination that U-B's proposal was acceptable. With respect to the
120 second restoral requirement, we agree with Contel that the language
in U-B's proposal concerning this provision is ambiguous and could be
interpreted in a manner which would not obligate U-B to comply with this
requirement. However, the concept of responsiveness does not generally
apply to negotiated procurements, see, e.g., True Machine Co., B-215885,
Jan. 4, 1985, 85-1 CPD Paragraph 18, and the Navy indicates that its
evaluation team considered the response acceptable because of the manner
in which U-B's network was engineered. The Navy indicates that
additional download servers (a standard component of the U-B network
management center) could be added to improve response time as necessary
and with U-B's new and more powerful network management center, the Navy
determined that U-B's proposed system was in compliance with the
required specification. Thus, although Contel's language was not the
clearest, we believe the Navy was justified in concluding that U-B had
not taken exception to the 120 second restoral requirement. Cf., south
Central Bell Advanced Systems, B-216901, Aug. 19, 1985, 85-2 CPD
Paragraph 188.
Furthermore, we disagree with Contel's assertion that the Navy
permitted U-B to submit a proposal based on a less restrictive
specification. The systems proposed by both U-B and Contel were
evaluated by the Navy based on the same requirement and both were found
capable of meeting the 120 second restoral requirement. To the extent
the language contained in U-B's proposal raised a question concerning
U-B's intent to comply with the specification, the Navy has subsequently
advised U-B that it expects U-B to comply with this requirement, and U-B
has indicated that it fully intends to do so at its offered price.
Since the Navy was justified in concluding that U-B had not taken any
exception to the requirement, we do not consider the post-award
clarification of the language contained in U-B's proposal to be an issue
which warrants the reopening of negotiations with all offerors.
Concerning Contel's disagreement with the Navy's technical
conclusions regarding U-B's proposed system, Contel, has not, in our
view, shown the agency's determination to be unreasonable. The Navy
indicates that Contel's arguments do not take into account that U-B has
offered a more powerful network management center nor considered that
additional download servers can be added by U-B to ensure compliance
with the 120 second restoral requirement. With respect to directory
assistance, both the Navy and U-B disagree with the "industry wide"
interpretation of the term proposed by Contel and we see no basis to
conclude that the directory assistance offered by U-B failed to comply
with the requirement set forth in the solicitation. Also, the Navy
indicates that U-B's proposed system is capable of providing priority
transmittal of selective information in the system. Contel, as the
protester, bears the burden of affirmatively proving its case and this
burden is not met where the only evidence is the conflicting statements
of the protester and the agency. Rolm Southern California, B-216955,
Mar. 14, 1985, 85-1 CPD Paragraph 327. The protest on this issue is
therefore denied. /1/
Maintenance Services
Each NARF location had two separate installation periods (Phase I
(Lots 1-7) and Phase II (Lots 8-14) ) and the RFP set forth a separate
CLIN for maintenance services for each phase. In addition, offerors
were required to price maintenance services for two follow-on option
periods: Lots 15 and 16. Contel argues that the maintenance services
priced under Lot 16 duplicated the maintenance services required to be
provided under Phase II for each respective installation. Contel's
prices for Phase II maintenance and for maintenance services under Lot
16 are identical and Contel indicates that it assumed that the Navy
would not evaluate the cost for the same services twice. Contel argues
that the Navy improperly added together these costs in determining
Contel's overall price and that as a result, its offered price was
inflated by over $650,00. Since this amount is more than the difference
between the two proposals, Contel argues that it, rather than U-B, was
the low offeror.
The Navy contends that its cost evaluation was proper. The RFP
indicated that each offeror's overall cost, including option periods,
would be considered and that in calculating Contel's costs, the Navy
added Contel's proposed cost for Phase I and Phase II as well as the two
option periods. The Navy argues that the CLINS under the second option
period (Lot 16) do not represent the same maintenance effort for which
prices were solicited under Phase II but rather represent maintenance
support for Phase I. The Navy disagrees with Contel's assertion that
the solicitation requested duplicative pricing information and argues
that Contel's cost proposal was properly evaluated.
Our review indicates that Contel's allegations are without merit.
For the Norfolk NARF installation for example, the RFP under Phase I
(CLINS 0015AA and 0015AB) requires the maintenance of equipment
identified in CLINS 0013AA-0013AR from contract award through the end of
FY 1987. Under Phase II for that installation (CLINS 0055AA and
0055AB), offerors were required to provide maintenance for equipment
identified in CLINS 0053AA-0053AP through the end of FY 1988. Under
option II (CLINS 0081AC and 0082AC), offerors were required to provide
maintenance services through the end of FY 1988 for the equipment
identified in CLINS 0013AA-0013AR. Clearly, the line items under option
II refer to maintenance services for Phase I equipment which differs
from that required to be priced under Phase II. An analysis for the
other NARF installations yields similar results and accordingly, we
conclude that the RFP did not require offerors to price the same
maintenance services twice as alleged by Contel.
We recognize that Contel has complained that the RFP directions were
vague and has also indicated that no additional costs would be incurred
to provide maintenance for the equipment identified under option II.
However, the fact remains that the maintenance services solicited by the
RFP under option II differed from those required under Phase II and the
Navy acted properly in adding the total cost for the option periods to
the costs proposed by Contel for Phase I and Phase II. In our view, the
solicitation was not vague and clearly identified the different
maintenance services required to be priced under each CLIN. To the
extent Contel priced the same services twice, it was due to the
protester's own error in preparing its proposal. Furthermore, if it is
indeed an error, we are unable to conclude that the Navy should have
been on notice of the mistake and failed in its obligation to conduct
meaningful discussions by not raising the matter with Contel. Cf.,
American Management Systems, Inc., B-215283, Aug. 20, 1984, 84-2 CPD
Paragraph 199.
Remaining Allegations
Contel has also alleged that U-B's proposal is materially unbalanced
and that the Navy favored U-B by eliminating the live test demonstration
provided for by the RFP.
We find the unbalanced proposal allegation untimely. The record
shows that the Navy conducted a debriefing with Contel on September 6,
1985 and at that time provided Contel with a copy of the contract
awarded to U-B which showed U-B's offered prices for the various line
items. Under our Bid Protest Regulations, a protest must be filed
within 10 working days of the date the protester was aware or should
have been aware of the basis for protest. 4 C.F.R. Section 21.2(a)(2)
(1985). In our view, Contel was apprised on September 6 of the facts
which form the basis for its unbalanced proposal allegation and since
the protester did not raise this issue until the bid protest conference
held on October 23, 1985, it is untimely and will not be considered.
GFO-CON, Inc., B-214503, July 3, 1984, 84-2 CPD Paragraph 13. Although
Contel asserts that it is unreasonable to apply this rule in this case
since the contract awarded U-B contained more than 500 line items and
the materially unbalanced aspects of U-B's proposal were difficult to
ascertain, our regulations do not contemplate the piecemeal development
of protest issues and we see no reason why this issue could not have
been raised at an earlier date. Ross Bicycles, Inc. -- Request for
Reconsideration, B-219485.2, July 31, 1985, 85-2 CPD Paragraph 110.
With respect to the Navy's elimination of the RFP's preaward live
test demonstration, Contel argues that commercially available equipment
was required and that U-B's products were not commercially available at
the time U-B submitted its proposal. Contel argues that the live test
would have demonstrated that U-B's equipment was not satisfactory and
that the Navy eliminated the test to provide U-B with additional time to
comply with this requirement. In contrast, Contel argues that the Navy
refused to consider a less expensive software solution proposed by
Contel which was not available at the time initial proposals were
submitted but would have been commercially available by the time of the
live test demonstration.
The Navy indicates that both U-B and Contel were advised that
"commercially available" or "off the shelf" equipment was required to be
offered and that only commercially available equipment at the time
proposals were submitted would be considered. The Navy states that U-B
provided information concerning previous installation of its equipment
and that technical literature and brochures were provided which showed
that U-B's offered equipment was commercially available. We cannot find
the Navy's determination in this regard to be unreasonable and as a
consequence, we do not view the Navy's actions in refusing to consider
equipment proposed by Contel which was not yet available to be evidence
of unfair treatment. To the extent Contel is arguing that the Navy
improperly eliminated the live test demonstration, this allegation is
untimely. This requirement was deleted by amendment No. 0004 to the
solicitation and any protest concerning this change should have been
filed prior to the closing date for receipt of best and final offers. 4
C.F.R. Section 21.2(a)(1).
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel RFP. Contel's arguments appear to be based on its
own knowledge of U-N's standard
(1) We note that Contel has also alleged that U-B's proposed system
does not provide a "frequency agile" RF modem, does not capture usage
statistics, is not able to "artifically load" the network and fails to
provide a "callback" feature as required by the equipment and the Navy
indicates that system proposed by U-B complies with these requirements.
On this record, we are unable to find the agency's conclusions in this
regard to be unreasonable.
FILE: B-220204.2; B-220205.2 DATE: October 18, 1985
MATTER OF: Crimson Enterprises, Inc.--Reconsideration
DIGEST:
Request for reconsideration is denied where
protester neither alleges nor shows that
prior decision was factually or legally
erroneous.
Crimson Enterprises, Inc. (Crimson) requests reconsideration of our
decision, Crimson Enterprises, Inc., B-220204.2, B-220205.2, Oct. 1,
1985, 85-2 C.P.D. P , in which we dismissed Crimson's protest concerning
U.S. Army Corps of Engineers solicitation No. DACA83-85-B-0201. We
deny the request.
Crimson's bids on the procurements included required bid bonds which
had not been signed by a surety representative. Based on our decision
in Truesdale Construction Co., Inc., B-213094, Nov. 18, 1983, 83-2 C.P.
D. P 591, which involved nearly identical facts, we held that since
there is conflicting authority as to whether an unsigned bid bond is
sufficient to bind the surety, the contracting officer properly rejected
Crimson's bid as nonresponsive.
We dismissed Crimson's protest prior to receiving its comments on the
agency's report because it became clear, based on our review of
Truesdale, that Crimson's protest was without merit. Our Bid Protest
Regulations specifically provide for dismissal of a protest as soon as
it becomes apparent that it is without merit. 4 C.F.R. Sec. 21.3(f)
(1985). Crimson has submitted its comments with its reconsideration
request, and asks that we reconsider our decision based on these
comments.
In order to prevail in a request for reconsideration, the protester
must establish that our decision was based on errors of fact or law. 4
C.F.R. Sec. 21.12. Crimson's comments largely urge that our decision in
Truesdale and on its protest will have the negative effect of affording
agencies discretion to determine the acceptability of bid bonds, and to
reject low bids such as Crimson's which would result in cost savings for
the government.
The fact that a protester believes a decision may have a certain
negative impact, however, does not establish that our decision is
incorrect. Crimson asserts neither that we ignored or misinterpreted
material facts, nor that our decision is inconsistent with any statute,
regulation, or other applicable legal authority. We therefore have been
presented with no basis for concluding that our decision is factually or
legally incorrect.
The request for reconsideration is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220204; B-220205
DATE: October 1, 1985
MATTER OF: Crimson Enterprises, Inc.
DIGEST:
The validity of a bid bond that does not include the signature of the
authorized representative of the surety is sufficiently questionable to
warrant rejection of the bid as nonresponsive.
Crimson Enterprises, Inc. (Crimson), protest the rejection of its
bids as nonresponsive to two solicitations: Invitation for bids (IFB)
No. DACA83-85-B-0201 and No. DACA83-85-B-0202, issued by the United
States Army Corps of Engineers for reroofing of family housing quarters
in Hawaii. We dismiss the protests without securing comments from
Crimson on the agency report pursuant to our Bid Protest Regulations, 4
C.F.R. Section 21.3(f) (1985), since the report establishes that Crimson
is not an interested party to protest the one IFB, and that the protest
under the other has no legal merit.
Bids submitted on the solicitations were opened on August 15, 1985.
Crimson submitted the low bid on the first IFB and the second low bid on
the second IFB. The Army States that the low bidder on IFB-0202 is
responsive and responsible, and Crimson thus is not an interested party
within the meaning of our Regulations, 4 C.F.R. Section 21.1(a) to
pursue its complaint, since Crimson would not receive award under this
IFB even if its protest were sustained. Universal Parts and Services,
Inc., B-216767, B-216806, Dec. 12 1984, 84-2 C.P.D. Paragraph 660.
Consequently, we dismiss the protest on this IFB. WE note, however,
that the factual situation is nearly identical with that of the protest
on IFB-0201, so that the merits of both protests are governed by the
same considerations.
The IFBs required the submission of bid bonds. Attached to each of
Crimson's bids was a bid bond dated August 9 and a general power of
attorney from the surety. The general power of attorney listed the
names of several individuals, including a Mr. Robert J. Powell, as
attorney-in-fact authorized to execute a bond in the name of the United
States Fidelity and Guarantee Company. The bond attached to each IFB
bore the name of the surety and the surety's seal. The name of Robert
J. Powell, as attorney-in-fact, was typed on the bond, but the bond was
not signed br Mr. Powell or by any other surety representative. The
contracting officer therefore notified Crimson by letter of August 30
that its bids were nonresponsive since the bonds were defective. In the
meantime, by telegram of August 29, Mr. Robert J. Powell advised that he
indeed issued the bond attached to IFB-0201.
Crimson contends that since the bid bond was "executed" on August 9
with the corporate seals of both principal and surety, the name of the
surety, and the typed name and title of the attorney-in-fact and, in
view of the post-bid-opening advice by the attorney-in-fact, the surety
was bound by the bond as of August 9. Crimson argues that the omission
of the signature, therefore, constituted a minor informality which did
not render the bids nonresponsive.
We considered an almost identical factual situation in Truesdale
Construction Co., Inc., B-213094, Nov. 18, 1983, 83-2 C.P.D. Paragraph
591. There, as here, the surety's representative did not sign the bid
bond, which otherwise bore the surety's seal, the name of the surety,
the proper amount, and the name of the representative typed in the
proper place and to which was attached a power of attorney authorizing
the representative to execute bonds. We noted that a bid bond is a
material part of the bid, so that a defective bond renders the bid
itself nonresponsive, unless the bidding documents establish that the
bond could be enforced if the bidder did not execute the contract. We
further noted that there is no consensus among legal authorities
regarding the effect of a surety's failure to sign a bond: some believe
that a bond sealed and delivered to the obligee is sufficient without
the obligor's signature, while others consider the signature of the
surety's representative a necessary prerequisite to an enforceable bond.
We stated:
"In light of this conflicting legal authority, we cannot
conclude with certainty whether the surety here would be able to
disclaim liability on the bond because of the
absence of the signature of its attorney-in-fact. Thus, we believe that
the contracting officer acted reasonably in concluding that the bond was
defective and therefore rejecting the bid."
For the same reasons expressed in Truesdale, we cannot disagree with
the Corps that Crimson's failure to furnish a bond with the surety's
signature made the validity of the bond questionable and that the bids
thus were nonresponsive.
Moreover, as we further held in Truesdale, a bid which is
nonresponsive cannot be corrected after bid opening to make it
responsive by, for example, advice from the attorney-in-fact that the
bond is viable. See also Allen County Builders Supply, B-216647, May 7,
1985, 64 Comp. Gen. . . . , 85-1 C.P.D. Paragraph 507. Consequently,
the confirmation received from the authorized attorney-in-fact after bid
opening in the present case does not correct the defect, and the Army
was justified in rejecting the bids.
The protests are dismissed.
/s/ Robert M. Strong
Deputy Associate General Counsel
FILE: B-220203.2 86-1 CPD 15
DATE: January 8, 1986
MATTER OF: Zinger Construction Co., Inc. -- Request for
Reconsideration
BIDS - LATE - MODIFICATION - REJECTION
Where only documentary evidence as to time of receipt of bid
modification at government installation shows it was received after bid
opening, it is not necessary to reach the issue of government
mishandling after receipt at installation. Therefore, price
modification was properly rejected as late.
Zinger Construction Company, Inc. (Zinger), requests reconsideration
of our decision in Zinger Construction Company, Inc., B-220203.1, Oct.
30, 1985, 85-2 C.P.D. Paragraph 493. We dismissed Zinger's protest
against the rejection of its bid modification as late by the Naval
Facilities Engineering Command (NAVFAC) under invitation for bids (IFB)
No. N62472-84-B-0665, because we found the protester was not in line for
award with or without timely receipt of its price modification and
Zinger had not demonstrated that Stagg Electric (Stagg), the low bidder,
was ineligible to receive the award. We concluded that, under our Bid
Protest Regulations, Zinger was not an interested party to maintain its
protest.
In its request for reconsideration, Zinger contends that our decision
is erroneous because Stagg's bid is so low as to indicate that there
must be a mistake in the bid. In this regard, Zinger asks us to
reconsider our finding that it is not an interested party because, if
Stagg made a mistake in its bid and is allowed to withdraw the bid or is
determined to be otherwise ineligible for award, acceptance of Zinger's
price reduction would put Zinger in line for award.
In response to Zinger's reconsideration request, we were informally
advised by NAVFAC that Stagg's bid has been determined to be
nonresponsive and has been rejected. Accordingly, consideration of the
merits of Zinger's protest is now appropriate.
For the reasons stated below, we deny the protest.
The solicitation sought bids for various repairs to the Naval and
Marine Corps Reserve Center in New Rochelle, New York. Bid opening was
scheduled for 2 p.m. on Wednesday, September 4, 1985. The IFB provided
that bids would be received at the office of the Northern Division of
NAVFAC, building 77-L. However, Zinger's price modification mailgram
was not received by the designated office until 2:58 p.m. on September
4, 1985, as evidenced by the installation's time/date stamp. Therefore,
the modification was determined to be late and was not considered by the
agency.
Zinger contends that its bid modification was received late at the
office designated for receipt of bids because of mishandling by the
Navy. Zinger supports its assertion that the bid modification was
timely received at the installation by stating that its bid modification
was called in to Western Union on September 3, 1985, and the mailgram
should have arrived at the government installation in advance of the
scheduled bid opening. The record shows that the mailgram was called
into Western Union at 4:25 p.m. on September 3. The protester states
that it has successfully used this method of communication in the past
and notes that both Western Union and the postal service guarantee
next-day delivery of mailgrams. Zinger believes that receipt of its bid
modification by the designated office was somehow delayed by employees
at the Philadelphia Naval Base.
The Federal Acquisition Regulation (FAR), which governs procurement
of services through formal advertising, permits consideration of a bid
or a bid modification not received prior to bid opening, if it was sent
by mail (or telegram if authorized) and it is determined that late
receipt was due solely to government mishandling after receipt at the
government installation. FAR Section 52.214-7(a)(2), Federal
Acquisition Circular No. 84-5, April 1, 1985. The time of receipt at
the installation must be established before the question of government
mishandling can be considered. Allied Electric Inc., B-216548, Mar.
12, 1985, 85-1 C.P.D. Paragraph 304. The only acceptable evidence to
establish the time of receipt at the government installation is the
agency's time/date stamp on the bid wrapper or other documentary
evidence maintained by the installation. Id.
Here, the documentary evidence of receipt maintained by the
installation is the time/date stamp of the office designated for bid
receipt, which indicates that the modification was received after bid
opening. Since the protester has not established that its bid
modification was timely received at the Navy installation prior to the
time of bid opening, we need not reach the issue of whether government
mishandling caused the modification to arrive late at the bid opening
location. Id.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220203 85-2 CPD 493 DATE: October 30, 1985
MATTER OF: Zinger Construction Company, Inc.
DIGEST:
CONTRACTS - PROTESTS - INTERESTED PARTY REQUIREMENT - PROTESTOR NOT
IN LINE FOR AWARD
Where third low bidder protests award to any other firm on the
basis that its price modification mailgram was late due to
government mishandling, the protest is dismissed since protester
is not eligible for award with or without timely receipt of price
modification. Therefore, under our Bid Protest Regulations, the
protester cannot be considered an "interested party."
Zinger Construction Company, Inc. (Zinger), protests the award of a
contract to any other firm under invitation for bids (IFB) No.
N62472-84-B-0665, issued by the United States Naval Facilities
Engineering Command (NAVFAC). The protester contends that its price
modification mailgram was received late at the office designated for
receipt of bids because of mishandling by government personnel. We
dismiss the protest because under our Bid Protest Regulations Zinger is
not eligible to maintain this protest. 4 C.F.R. Sec. 21.1(a) (1985).
We have been advised by NAVFAC that at bid opening on September 4,
1985, the relative standing of bidders was:
Stagg Electric $110,340
Sparango General 184,000
Zinger Construction 208,000
Agency Construction 239,545
According to NAvFAC, had Zinger's price reduction of $59,200 been
accepted as timely received, Zinger would be the second low bidder with
a bid of $148,800.
Under our regulations a party must be an "interested party" in order
to have its protest considered by our Office. Whether a party is
sufficiently interested involves consideration of the party's status in
relation to the procurement and the issues involved. Therm-Air Mfg.
Co., Inc., 59 Comp. Gen. 255 (1980), 80-1 C.P.D. P 119. A party will
not be deemed interested where it would not be in line for award if its
protest were sustained. See Pluribus Products Inc., B-210444, Mar. 7,
1983, 83-1 C.P.D. P 226. Here, the record shows that Zinger would not be
in line for award with or without timely receipt of its price modifica-
tion. Moreover, Zinger has not alleged that Stagg Electric's bid was
nonresponsive nor asserted any other reason why Stagg Electric would not
be eligible for the award. As a result, Zinger does not qualify as an
interested party under our regulations. See Second Source Computers,
Inc., B-216735, Jan. 25, 1985, 85-1 C.P.D. P 100.
The protest is dismissed.
Robert M. Strong
Deputy Associate General Counsel
FILE: B-220200.2 86-1 CPD 363 DATE: April 15, 1986
MATTER OF: Colleague, Inc.--Request for
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
RECONSIDERATION REQUESTS - ERROR OF FACT OR LAW - NOT ESTABLISHED
Where, on the basis of protester's refutation of factual
conclusion in prior decision, protester argues that the
contracting agency deliberately prevented it from competinq by
failing to provide protester a copy of a material amendment, prior
decision is affirmed since the record does not support the
protester's allegations. Additional information provided by
protester does not warrant reversal or modification of previous
decision.
Colleague, Inc., requests reconsideration of our decision in
Colleague, Inc., B-220200, Nov. 25, 1985, 85-2 C.P.D. P 598, in which we
denied its protest of the rejection of its ostensibly low bid for
failure to acknowledge receipt of a material amendment. Colleague's bid
was submitted in response to invitation for bids (IFB) NO.
FNPF1-1732-A-7-10-85 issued by the General Services Administration (GSA)
to satisfy its annual requirements for seven items of portable and
wall-mounted blackboards.
The prior decision is affirmed.
The thesis of Colleague's protest is that GSA, in a conscious and
deliberate effort to preclude it and possibly other bidders from
competing, issued a material amendment to the solicitation 1 day prior
to the initially established bid opening date, but mailed the amendment
only to those f irms whose names appeared on certain pages of the
mailinq list marked with double asterisks. This is "the only possible
explanation" for its failure to receive a copy of the amendment,
Colleague maintains, noting that receipt of the amendment was
acknowledged only by firms whose names were on those pages.
We denied Colleague's protest because, based on the entire record,
the protester did not prove that the agency deliberately failed to mail
it a copy of the amendment or that the agency otherwise consciously
excluded it from the competition. Concerning Colleague's allegation
that the agency mailed copies of the amendment only to bidders listed on
pages bearing asterisk marks, we noted that at least one bidder who
acknowledged the amendment was not listed on those pages. In the
absence of a showing by Colleague that the agency consciously and
deliberately excluded it from the competition, we held that its bid was
properly rejected as nonresponsive, since the bidder bears the risk of
nonreceipt of a solicitation amendment. General Atronics Corp.,
B-217305, Jan. 4, 1985, 85-1 C.P.D. P 20.
In its request for reconsideration, Colleague contends that our
previous decision was erroneous because it was "founded on." the
factually incorrect conclusion that at least one of the bidders who
acknowledged the amendment was not listed on any of the asterisked
pages. The protester states that of the bidders that acknowledged the
amendment, one is listed on an asterisked page under another company
name. On the basis of its allegation that the amendment was sent only
to bidders on the marked pages, the protester argues that the record
"establishes" that GSA did not mail a copy of the amendment to
Colleague, among others, who were not listed on the referenced pages.
GSA maintains that a copy of the amendment was mailed to all bidders
that had been provided a copy of the original solicitation, including
Colleague. In this regard, GSA has submitted an affidavit of the
contract specialist who prepared the amendment and mailed copies to the
solicited firms, so attesting. Although the agency has provided no
explanation of the significance of the asterisks on certain pages of the
mailing list, 1/ it denies that it deliberately attempted to exclude
Colleague or any other bidders from the competition or to influence the
outcome of the bidding.
In its request for reconsideration, the protester also complains that
during a telephone conversation between one of its officials and the
contract specialist prior to bid opening, the contract specialist failed
to advise the protester that an amendment was being considered and did
not include Colleague in a survey of contractors who had bid on previous
solicitations for the item regarding the feasibility of the amendment it
was then considering. As we stated in addressing this argument in our
original decision, since the agency apparently had not reached a final
decision concerning issuance of the amendment, Colleague was properly
advised of the then-current status of the solicitation and bidding
schedule as advertised, and the protester does not deny that it was not
a member of the group of previous bidders to which the agency restricted
its survey.
Colleague is correct, however, in its assertion that all the bidders
(including one listed under a different company name) who acknowledged
receipt of the amendment were listed on the asterisked pages. However,
we do not agree with the protester's conclusion that, based upon this
fact, the record establishes that the agency deliberately failed to
furnish Colleague a copy of the amendment for the purpose of excluding
it from the competition.
As we noted in our previous decision, the record shows that the
agency advised bidders in attendance for the initially scheduled bid
opening of the changes made by the amendment, publicly posted a notice
of the amendment and extended the bid opening by 12 days to allow all
bidders adequate time to receive and acknowledge that amendment, as well
as to modify their bids if they so chose. In regard to the agency's
mailing of the amendment, GSA has submitted an affidavit of its contract
specialist who was in charge of this procurement. The affidavit, dated
January 1, 1986, states:.
"I, the undersigned, to the best of my knowledge
and belief, hereby certify that Amendment Number 1
to Solicitation Number FNP-F1-1732-A-7-10-85
(extended to 7-22-85) was mailed on the afternoon
of July 9, 1985, to all firms whose names appear
on the handwritten mailing list submitted under
Tab H, pages 1 through 27, of GAO Case Number
B-220200. This handwritten mailing list was also
used to distribute the original solicitation. I
personally took the amendments to the Woodbridge
post Office in Virginia and placed them in the
hands of a U.S. Postal employee."
In light of the actions on the agency's part to publicize the
amendment and the affidavit of the contract specialist certifying that
he mailed a copy of the amendment to all firms on the bidders mailing
list, the record cannot be said to establish that GSA acted deliberately
to exclude certain bidders or to thwart competition. Moreover, as a
result of the agency's transmission of the amendment and extension of
the bid opening date to allow bidders sufficient time to respond,
adequate competition was obtained in that four responsive bids were
received. Under these circumstances, we will not infer on the basis of
the information now before us that the agency engaged in improper
procurement practices. We thus conclude that reversal or modification
of our previous decision is not warranted.
However, notwithstanding the evidence of record regarding the
agency's actions to inform bidders of the amendment, we find it highly
unusual that, after the contract specialist mailed a copy of the
amendment to each of the 115 firms on the handwritten bidders mailing
list, only four of nine bidders acknowledged receipt of the amendment
and the names of each of those four firms were among the entries on
those pages marked by asterisks. The anomaly of this situation is
underscored by the fact that the agency has offered no explanation for
the comparatively low number of acknowledgements in relation to the
number of bids submitted, or for the asterisked pages of the bidders
mailing list, or for the fact that all the bidders who acknowledged the
amendment were listed on those pages. Given the general nature of this
procurement and the manner in which the agency states the amendment was
issued and publicized, a majority of the bidders should not fail to
acknowledge receipt of the amendment. Thus, while the record does not
establish that GSA deliberately sought to preclude Colleague or other
firms from competing, it does suggest that there may well have been some
deficiency in the way in which the amendment was transmitted to bidders.
This procurement was subject to the Competition in Contracting Act of
1984 (CICA) and, therefore, GSA was to use "full and open competitive
procedures." See 41 U.S.C.A. Secs. 253(a)(1)(A), 253a(a)( 1), and
403(6)-403(7) (West Supp. 1985); see also Trans World Maintenance,
B-220947, Mar. 11, 1986, 65 Comp. Gen. , 86-1 C.P.D. P at 3. Congress
established "full and open" competition as the new required standard for
awarding contracts because of its strong belief "that the procurement
process should be open to all capable contractors who want to do
business with the Government." House Conference Rep. No. 98-861, 98th
Cong., 2d Sess. 1422 (June 23, 1984). The congressional mandate for
"full and open" competition is vitiated where, as in this case, a
majority of the oids received are nonresponsive for failure to
acknowledge receipt of an amendment. This suggests a significant
failure in the competitive process, even if not the result of deliberate
action to exclude any bidder.
Since a failure to achieve "full and open" competition should, if
practicable, be remedied through a resolicitation in which all capable
prospective contractors have an opportunity to compete, we think it
would have been appropriate for GSA to have rejected all bids and
resolicited when it became apparent that a majority of the bids were
nonresponsive for failure to acknowledge receipt of the amendment.
Accordingly, we recommend to the GSA that, in the future, it take
appropriate action to assure that procurements are conducted in a manner
that provides such an opportunity to capable contractors seeking to do
business with the government.
Harry R. Van Cleve
General Counsel
FOOTNOTES
1/ According to Colleague, the contract specialist reported, through
agency channels, that he has no knowledge of what the asterisks denote.
FILE: B-220200 85-3 CPD 598 DATE: November 25, 1985
MATTER OF: Colleague, Incorporated
DIGEST:
BIDS - INVITATION FOR BIDS - AMENDMENTS - FAILURE TO ACKNOWLEDGE -
BID NONRESPONSIVE
A bid that fails to acknowledge an amendment which reduced the
conttact delivery period is nonresponsive, and the deficiency may
not be waived on the basis that the bidder did not receive the
amendment where the bidder fails to show that, as it contends, the
agency deliberately failed to provide a copy of the amendment and
otherwise consciously acted to exclude the bidder from competing.
Colleague, Incorporated, protests the rejection of its apparent low
bid and the award of five items of a requirements contract to Ghent
Manufacturing, Inc., under invitation for bids (IFB) No.
FNP-F1-1732-A-7-10-85. The IFB was issued bv the Genetal Services
Administtation (GSA) for portable and wall mounted blackboards to be
provided over a period of 1 year. Colleague's bid was rejected as
nonresponsive for failure to acknowledge receipt of an amendment to the
solicitation. The protest is denied.
The IFB, issued on June 10, 1985, initially set bid opening for July
10, 1985, at 2:30 p.m. On July 9, the agency issued an amendment to the
solicitation which reduced the delivery period from 90 days to 70 days
after receipt of orders and extended the bid opening date to July 22 at
2:30 p.m. The agency states that on the day the amendment was issued, a
copy of the amendment was mailed to all bidders on the bidders mailing
list, to which Colleague had been added 2 weeks after the original IFB
was issued. In addition to mailing the amendment to the biddets, the
agency states that the bid opening officer posted a notice of the
changes to the solicitation and, on July 10, informed bidders who were
present for the previously scheduled bid opening of the changes to the
solicitation. Bids that had been submitted by July 10, including
Colleague's, were not opened at that time. Instead, bidders were given
the opportunity to change their bids, provided that revised bids were
received prior to the newly established time for receipt of bids.
Upon bid opening on July 22, eight bids were received in response to
the amended solicitation. Of those bids, four acknowledged receipt of
the amendment. Although Colleague was the apparent low bidder, its bid
was rejected because it failed to acknowledge receipt of the amendment.
Colleague states that it never received a copy of the amendment and
that it was not otherwise notified of the issuance of the amendment.
Colleague also maintains that GSA, by failing to notify Colleague of the
amendment, acted deliberately to exclude it from the competition.
It is well established that the bidder bears the risk of nonreceipt
of a solicitation amendment. Marino Construction Co., Inc., 61 Comp.
Gen. 269, 272 (1982), 82-1 C.P.D. P 167. This rule is based on the
principle that, from the government's point of view, the propriety of a
procurement is determined on the basis of whether adequate competition
and reasonable prices were obtained, not on whether every possible
prospective bidder is afforded an opportunity to bid. Reliable Service
Technology, B-217152, Feb. 25, 1985, 85-1 C.P.D. P 234. Therefore,
where a bidder does not receive and acknowledge a material amendment,
generally its bid must be rejected as nonresponsive unless it is shown
that there was a conscious or deliberate effort on the part of the
agency to exclude the bidder from competing for the contract. See
General Atronics Corp., B-217305, Jan. 4, 1985, 85-1 C.P.D. P see also
Capital Engineering & Mfg. Co., B-213924, Apr. 2, 1984, 84-1 C.P.D. P
374.
Under the Federal Acquisition Regulation, an amendment is material if
it affects the bidder's price or the quantity, quality, or delivery
times of the IFB in more than a trivial or negligible manner. 48 C.F.
R. Sec. 14.405 (1984); See Dovon Construction Co., Inc., 63 Comp. Gen.
214 (1984), 84-1 C.P.D. P 194. The protester argues that the amendment
did not affect the responsiveness of its bid because it was timely
submitted and the firm could have complied with the reduced delivery
period. However, acceptance of Colleague's bid would not have legally
obligated it to meet the government's shorter delivery period required
under the amended IFB and, thus, the bid was nonresponsive. See Doyon
Construction Co., Inc, 63 Comp. Gen. at 217, 84-1 C.P.D. P 194 at 4;
see also TCA Reservations, Inc., B-218615, Aug. 13, 1985, 85-2 C.P.D.
P 163.
Further, we find that Colleague has failed to show that the agency
manifested a deliberate effort to exclude Colleague from competing for
the contract. The protester expresses the view that the report
submitted by the agency in response to its protest shows that at the
time the solicitation was issued, the contracting officer was aware of
instructions from the Director of Procurement, GSA Office of Federal
Supply Services, to various agency regional Directors of Procurement
directing the reduction of delivery periods on certain contracts. The
protester assumes that the contracting officer delayed necessary actions
to effectuate this change until 2 days before bid opening to thwart
Colleague's efforts to compete for the contract. We find this argument
unpersuasive, particularly since the extension under the amendment of
the bid opening date by 12 days provided adequate time for bidders to
receive the amendment and modify their bids if they chose to do so.
Moreover, the documents in the record do not show that the contracting
officer knew of these instructions or, if he did, that he deliberately
failed to execute them under the original solicitation and delayed
necessary procedures to effectuate the reduction by amendment.
The protester further states that the four bidders who acknowledged
the amendment are listed on a series of three asterisked pages included
among several bidders mailing lists. On the basis of this observation,
Colleague concludes that only those bidders listed on the three
asterisked pages were sent copies of the amendment and, since its name
did not appear among the bidders listed on those three pages, the agency
never mailed it a copy of the amendment. We note, however, that at
least one bidder who acknowledged the amendment was not listed on the
referenced pages. The agency report contains what appears to be several
groups of mailing lists, some of which include bidders that do not
appear on other lists. Thus, the protester's argument does not support
the conclusion that the agency delibetately failed to provide Colleague
a copy of the amendment. Moreover, the fact that four bidders
acknowledged the amendment indicates that the agency, in fact, did
transmit the amendment. See Richard Delene Contractors, Inc., B-212797,
Sept. 13, 1983, 83-2 C.P.D. P 321.
Colleague also contends that during a telephone conversation between
the contracting officer and its vice president and general counsel prior
to the date initially set for bid opening, the contracting officer
failed to mention that issuance of an amendment was being considered,
even though the contracting officer was then in the process of surveying
certain other companies to determine the feasibility of reducing the
delivery period. The fact that the agency was then in the process of
assessing the feasibility of reducing the delivery period would seem to
indicate that a final decision had not yet been made to issue the
amendment. Under those circumstances, the contracting officer properly
advised Colleague that the bids were due on July 10, the bid opening
date then established in the IFB. Further, the agency states that the
feasibility survey was conducted upon previous bidders, including the
then-incumbent contractor. Colleague has not contested the agency's
statement in this regard, nor has it claimed that it was included in
this group.
We conclude, therefore, that the protester has not shown that there
was a deliberate effort on the part of the agency to exclude it from
competing for the contract. The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220199.3 85-2 CPD 671
DATE: December 16, 1985
MATTER OF: Action Porta Systems, Inc. -- Reconsideration
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
RECONSIDERATION REQUESTS - ERROR OF FACT OR LAW - NOT ESTABLISHED
A prior decision dismissing a protest is affirmed where the protester
did not show the existence of the limited circumstances under which the
protester's failure to acknowledge a solicitation amendment,
incorporating minimum wage rates determinations under the Services
Contract Act, may be corrected.
Action Porta Systems, Inc. request reconsideration of our decision in
Action Porta Systems, Inc., B-220199.2, Nov. 8, 1985, 85-2 CPD
Paragraph. . . ., where we dismissed Action's protest against the
Department of the Army's rejection of Action's bid as nonresponsive
under invitation for bids (IFB) No. DABT35-85-B-0119 for the rental and
maintenance of portable toilets. We find no error in our original
decision.
The Army rejected Action's bid as nonresponsive because the firm
failed to acknowledge an amendment to the IFB incorporating wage rate
determinations under the Service Contract Act, 41 U.S.C. Sections
351-358 (1982). We dismissed the protest because we found that Action
had not alleged the existence of the limited circumstances under which a
protester may correct its failure to acknowledge a solicitation
amendment incorporating minimum wage determinations. /1/ Action
contends that our conclusion was incorrect, and asserts that its protest
is within the exception established by U.S. Department of the Interior
-- Request for Advance Decision, et al., 64 Comp. Gen. 189 (1985), 85-1
CPD Paragraph 34.
In U.S. Department of the Interior the bidder did not acknowledge an
IFB amendment incorporating a revised wage rate determination under the
Davis-Bacon Act, 40 U.S.C. Section 276a (1982). We noted that the
amendment affected only one labor category (electricians) under the
contract, with the hourly fringe benefits for that category being
increased by $1.00, and that the amount of electrical work required for
the project was minimal, amounting at most to 1500 man-hours of effort.
We concluded that since the increased benefits the contractor would be
required to pay represented only .013 percent of the difference between
the low and second low bids, the agency could treat the low bidder's
failure to acknowledge the wage rate amendment as a minor informality
and permit bid correction after bid opening but prior to award. /2/
Action argues that the facts in its case fulfill all the requirements
of our decision in U.S. Department of the Interior because the amendment
here had no effect on Action's price since Action's actual pay scale is
within the guidelines of the amendment; the contracting officer
originally was amenable to treating Action's failure to acknowledge the
amendment as a minor informality (he later changed his mind), and Action
did acknowledge the amendment after bid opening. We disagree and find
that Action's reading of our decision is too broad.
Action ignores the fact that in U.S. Department of the Interior the
wage rate amendment affected only one labor category employed under the
contract, increased the required fringe benefit payments by only $1.00,
and applied, at most, to 1500 man-hours of effort in an $11.4 million
contract. Our decision that failure to acknowledge the wage rate
amendment there could be treated as a minor informality thus was not
predicated merely on the fact that the wage rate amendment had a de
minimis effect on price, but also on the fact that the actual effect of
the amendment on the low bidder's material contractual obligation was
minimal. Action has not alleged that the same circumstances exist here.
We note that it appears from the record that Action was not legally
obligated under the terms of the IFB to pay any amount under the Service
Contract Act. Instead, it appears that the wage rate amendment that
Action failed to acknowledge incorporated Service Contract Act wage
rates into the IFB for the first time (rather than simply upwardly
revising rates already established in the IFB, as was the case in U.S.
Department of the Interior). Further, Action's allegation that it
already pays its employees more than the wage rates established by the
amendment obviously does not establish that the firm was legally
obligated to do so.
Accordingly, our prior decision dismissing Action's protest is
affirmed.
Harry R. Van Cleve
General Counsel
(1) The general rule is that failure to acknowledge a wage rate
amendment, upwardly revising the wage rate for a labor category to be
employed under the contract, renders a bid nonresponsive because without
acknowledgement of such an amendment a bidder is not legally obligated
to pay the wages prescribed in the amendment. TCA Reservations, Inc.,
B-218165, Aug. 13, 1985, 85-2 CPD Paragraph 163.
(2) We have also permitted a bidder to correct its failure to
acknowledge a wage rate determination amendment where the effect on bid
price was de minimis and the bidder was otherwise obligated under a
collective bargaining agreement to pay wages exceeding the revised wage
rate. See Brutoco Engineering and Construction, Inc., 62 Comp. Gen.
111 (1983), 83-1 CPD Paragraph 9. Action does not allege the existence
of a collective bargaining agreement in this case, however.
FILE: B-220199.2 85-2 CPD 533 DATE: November 8, 1985
MATTER OF: Action Porta Systems
DIGEST:
BIDS - INVITATION FOR BIDS - AMENDMENT - FAILURE TO ACKNOWLEDGE - BID
NONRESPONSIVE
Where a protester does not allege the existence of limited
circumstances under which the protester's failure to acknowledge a
solicitation amendment incorporating minimum wage determinations
under the Service Contract Act may be corrected, the protester's
bid must be viewed as having been properly rejected since such a
failure generally renders the bid nonresponsive.
Action Porta Systems protests the rejection of its bid as
nonresponsive under invitation for bids (IFB) No. DABT35-85-B-0119,
issued by the Department of the Army. We dismiss the protest.
The Army rejected the bid because Action failed to acknowledge one of
two amendments to the IFB. Action states that it never received the
subject amendment, which incorporated wage rate determinations under the
Service Contract Act, 41 U.S.C. Secs. 351-358 (1982). Action also
states that a contracting official advised it to submit a late
acknowledgment with a letter of explanation, which it did. The
protester argues that the amendment would have had no effect on its bid
price and asserts that accepting its bid would save the government
money.
A bidder bears the risk of nonreceipt of a solicitation amendment,
and the fact that a bidder may not have received an amendment is not
relevant unless that failure resulted from a conscious or deliberate
attempt by contracting officials to exclude the bidder from the
competition. Southeast Engineering, B-215855, Sept. 11, 1984, 84-2 C.
P.D. P 283. Action has not alleged that this was the reason for its
nonreceipt of the amendment. Moreover, the failure to acknowledge an
amendment adding a wage rate determination to a solicitation generally
renders a bid nonresponsive, because without the acknowledgment, the bid
does not legally obligate the hidder to pay the waqes prescribed by the
amendment. TCA Reservations, Inc., B-218615, Aug. 13, 1985, 85-2 C.P.D.
P 163.
We have recognized, however, that the failure to acknowledge a wage
rate amendment may be corrected after bid opening under very limited
circumstances. See U.S. Department of the Interior--Request for Advance
Decision, et al., 64 Comp. Gen. 189 (1985), 85-1 C.P.D. P 34 (where the
amendment revised a wage rate for one labor category and had a de
minimis effect on price, amounting to only a 0.013 percent increase in
the original bid price); Brutoco Engineering & Construction, Inc., 62
Comp. Gen. 111 (1983), 83-1 C.P.D. P 9 (where the effect on bid price
was de minimis, only 0.8 percent, and the bidder was otherwise obligated
under a collective bargaining agreement to pay wages exceeding the
revised wage rate). But see Grade-Way Construction v. U.S., 7 Cl. Ct.
263 (1985). The orotester does not allege that any of these
circumstances exists here.
While the protester does contend that it already pays its workers
more than the minimum wage, it provides no evidence to support its
contention, nor does it allege that its intention to comply with the
IFB's requirements, as amended, is manifest from the bid itself. See
TCA Reservations, Inc., B-218615, supra.
Action's alleged reliance on the instruction of a contracting
official to acknowledge the wage rate amendment after bid opening does
not change the result here. Erroneous advice given by an agency
official cannot estop the government from rejecting a nonresponsive bid,
since the agency is reguired to do so by law. Reliable Service
Technology, B-217152, Feb. 25, 1985, 85-1 C.P.D. P 234.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
FILE: B-220192.3 86-1 CPD 217 DATE: March 4, 1986
MATTER OF: Intelcom Educational Services,
Inc.--Request for Reconsideration
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
RECONSIDERATION REQUESTS - ORIGINAL DECISION RENDERED IN RESPONSE TO
COURT REQUEST - COURT NOT INTERESTED IN GAO RECONSIDERATION
Request for reconsideration of prior decision is dismissed
where prior decision was issued in response to a request from a
court and the court has not requested reconsideration of the
decision.
Intelcom Educational Services, Inc. requests reconsideration of our
decision in Intelcom Educational Services, lnc., B-220192.2, Jan. 24,
1986, 86-1 C.P.D. P . We issued that decision in response to a request
from the United States District Court for the Western District of
Washington in connection with Civil Action No. 85-1836D.
It is our policy not to decide matters where, as here, the issues are
before a court of competent jurisdiction unless the court requests that
we do so. 4 C.F.R. Sec. 21.9(a) (1985). Once we have issued that
decision to the court, our involvement in the matter is over unless the
court requests that we reconsider the decision. Since the court has not
expressed any interest in our reconsideration of the prior decision, we
will take no further action on the merits of this matter. See Inventive
Packaging Corp.--Reconsideration, B-214578.2, Aug. 24, 1984, 84-2 C.P.
D. P 223.
Accordingly, the request for reconsideration is dismissed.
Robert M. Strong
Deputy Associate
General Counsel
FILE: B-220192.2 86-1 CPD 83
DATE: January 24, 1986
MATTER OF: Intelcom Educational Services, Inc.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DEBRIEFING CONFERENCES - ISSUES PROVIDING
PROTEST BASIS
1. Where protester does not learn of specific grounds of protest
until agency debriefing, a protest filed within 10 working days after
the debriefing is timely.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION - POINT
RATING - PROPRIETY OF EVALUATION
2. Protest that agency arbitrarily downgraded cost reasonableness of
proposal by 4.5 points and that those additional points would make
protester's overall proposal "technically substantially equal" with
awardee, thereby requiring protester's lowest proposed price to be
controlling factor for award under RFP, is denied since the remaining
12.7-point differential in evaluation scores supports agency's finding
-- otherwise uncontested by protester -- that successful offeror was
technically superior to all other offerors.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
TECHNICAL SUPERIORITY V. COST
3. In a negotiated procurement, award may be made to a higher
priced, higher technically rated offeror as long as the decision to do
so is reasonable and in accordance with the stated evaluation criteria.
Protester's unsupported assertion that its proposal was "technically
substantially equal" to awardee's proposal is not sufficient to show
that contracting agency's determination that awardee was technically
superior to other offerors was unreasonable or that source selection
evaluation was inconsistent with evaluation criteria in the
solicitation.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
ALLEGATION OF BIAS NOT SUSTAINED
4. GAO will not attribute bias to procurement officials on the basis
of inference or supposition; the protester must submit virtually
irrefutable proof that the officials had a specific and malicious intent
to harm the protester. Protester has presented no such evidence and,
therefore, has not met its burden of proof.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - PREPARATION - COSTS
DENIED
5. Protester's claim for proposal preparation costs is denied
because there is no showing that the government acted arbitrarily or
capriciously in evaluation of protester's proposal.
Intelcom Educational Services, Inc. (Intelcom), protests the award to
Management and Training Corporation (MTC) of a cost-plus-award-fee
contract for the operation of the Cascades Job Corps Center located in
Sedro-Woolley, Washington, under Department of Labor (DOL) request for
proposals (RFP) No. 10JC-535-01. Intelcom contends that the contracting
officer arbitrarily downgraded its cost proposal and unreasonably
awarded a contract to a higher priced, "technically substantially equal"
offeror in contravention of the terms of the RFP.
Intelcom also filed suit in the United States District Court for the
Western District of Washington, Intelcom Educational Services, Inc. v.
William E. Brock, Secretary, Dept. Of Labor, Civil Action No.
C85-1836D, seeking injuctive and declaratory relief and raising
substantially the same issues as raised in the protest. The court has
indicated an interest in our decision.
We deny the protest.
The Cascades Job Corps Center is a comprehensive Job Corps Program
operated on a 24-hour basis in the residential setting of Sedro-Woolley,
Washington. In addition to training the enrollees at the center, the
contractor is responsible for providing continuous supervision and
support services while providing for the operation, maintenance, and
protection of all property and equipment at the physical facility which
is leased to the federal government by the state of Washington. The
protester operated the center from October 15, 1982, through September
30, 1985, at which time MTC took over operations under the present
contract award.
The Seattle Regional Office of the Job Corps issued the solicitation
covering continued operation of the Cascades Job Corps Center on March
11, 1985, stipulating in the RFP the following basis for selection for
award:
"Selection for Award
When one proposal is ranked the highest technically, and no
other proposals are technically substantially equal, as determined
by the Contracting Officer, price will not be a controlling factor
in award. (This does not mean, however, that a superior technical
proposal will receive the award regardless of cost; the cost as
negotiated must be reasonable.) when more than one proposal has a
high technical ranking, and the proposals are technically
substantially equal, price becomes a controlling factor.
Substantially equal means proposals grouped at more or less the
same technical level, in terms of final ranking, so that no one
proposal is markedly superior to the others. No specific point
score difference shall be determinative of this, but is shall be a
matter for the Contracting Officer's judgment."
Thus, the RFP provided for award selection based on the proposal
which offered the greatest value to the government in terms of technical
capability and cost, rather than the offer with the lowest estimated
cost; however, the importance of cost in relation to other evaluation
factors would increase where the technical proposals were essentially
equal.
The record shows that five proposals were submitted and the agency
determined that three, including those submitted by MTC and Intelcom,
were within the competitive range. Each offeror in the competitive
range was given a list of concerns, questions and weaknesses compiled
from the source selection panel members' worksheets regarding that
offeror's proposal. Following discussions with each offeror and
submission of best and final offers by July 23, 1985, the nine members
of the source selection panel individually evaluated proposals assigning
numerical weights for each criterion in accordance with weights
identified in the RFP. MTC's offer, which was based on a price (total
estimated cost and fee) of $8,200,850 for the base 2 years of the
cost-plus-award-fee contract, was scored the highest and received a
total score of 83.6 points out of a possible 100 evaluation points.
Intelcom's offer, although based on a total estimated cost and fee of
$7,098,448, was the lowest rated offer receiving 66.4 evaluation points.
The agency advised Intelcom on August 27, 1985, that its offer was
rejected and that award would be made to MTC. On September 6, 1985,
Intelcom filed a protest with this Office under file number B-220192.1
which was dismissed because the protester did not comply with section
21.1(d) of our Bid Protest Regulations (4 C.F.R. part 21 (1985)) which
requires that the agency be furnished with a copy of the protest within
1 day after filing. On September 13, 1985, Intelcom attended a
debriefing at the agency's Seattle Regional Office and, based upon the
information received in that meeting, Intelcom proceeded to file a
second protest with this Office and also filed a complaint in United
States District Court seeking a preliminary injunction staying the
effect of the award of the contract to MTC.
The agency contends that Intelcom possessed all information necessary
to formulate its protest by September 5, 1985, when it was formally
notified by the agency of the reasons for the rejection of its proposal.
Thus, the agency asserts that Intelcom's filing with this Office on
September 24, 1985, was in fact untimely under 4 C.F.R. Section
21.2(a)(2) since it took place more than 10 working days after Intelcom
knew or should have known the bases for its protest. However, we
consider the protest to be timely because it was filed within 10 working
days of the September 13 debriefing, at which the protester became aware
of the evaluation of its cost proposal, and because we recognize that a
protester may delay filing its protest until after a debriefing where
the information available earlier left uncertain whether there was any
basis for protest. Raytheon Support Services Co., B-219389.2, Oct. 31,
1985, 85-2 C.P.D. Paragraph 495 at 6. Moreover, since we have been
requested by the court for our opinion on the merits, we would consider
the protest in anv event. See 4 C.F.R. Section 21.9(a); A.B. Dick
Co., B-211119.3, Sept. 22, 1983, 83-2 C.P. D. Paragraph 360 at 4.
Intelcom contends that the agency arbitrarily downgraded its cost
proposal and unreasonably selected a higher priced offeror. In this
connection, Intelcom argues that if its cost proposal were accorded the
maximum nine evaluation points for the evaluation criterion entitled
"reasonableness of costs" (it received 4.5 points), its resulting
overall score would be considered "technically substantially equal" to
MTC's within the meaning of the RFP's selection provision, causing price
to become the controlling factor for award. In these circumstances,
Intelcom argues that its offered price, which was the lowest of the
three offerors, would put it in line for award.
There is no requirement that an agency award a cost-type contract on
the basis of the lowest proposed costs. Talley Educational Services,
Inc., B-211936, Feb. 14, 1984, 84-1 C.P.D. Paragraph 188; Mitek
Systems, Inc. -- Request for Reconsideration, B-208786.3, May 10, 1983,
83-1 C.P.D. Paragraph 494. Rather, as in any negotiated procurement,
award of a contract need not be made to the offeror proposing the lowest
cost unless required by the solicitation. See A.B. Dick Co.,
B-207194.2, Nov. 29, 1982, 82-2 C.P.D. Paragraph 478. Procurement
officials have broad discretion in determining the manner and extent to
which they will make use of technical and cost evaluation results.
Columbia Research Corp., 61 Comp. Gen. 194 (1982), 82-1 C.P.D.
Paragraph 8. An agency may make cost versus technical tradeoffs, and
the extent to which one may be sacrificed for the other is governed only
by the tests of rationality and consistency with the established
evaluation factors. Grey Advertising, Inc., 55 Comp. Gen. 1111 (1976),
76-1 C.P.D. Paragraph 25. The determining element is the considered
judgment of the procurement officials concerning the significance of the
difference in technical merit among the offerors. Columbia Research
Corp., supra. This Office will question that judgment only upon a clear
showing of unreasonableness. American Coalition of Citizens With
Disabilities, Inc., B-205191, Apr. 6, 1982, 82-1 C.P.D. Paragraph 318.
Furthermore, when a cost-reimbursement contract is involved, the risk
of a cost overrun is borne by the government. Therefore, proposed costs
must be analyzed in terms of their realism since, regardless of the
costs proposed by the offeror, the government is bound to pay the
contractor actual and allowable costs up to the contract ceiling. Thus,
a determination of cost realism requires more than the acceptance of
proposed costs as submitted; rather, the evaluation of competing cost
proposals requires the exercise of informed judgment by the contracting
agencies involved, since they are in the best position to assess
"realism" of cost and technical approaches and must bear the major
criticism for any difficulty or expenses resulting from a defective cost
analysis. Since the cost realism analysis is a function of the
contracting agency, our review is limited to a determination of whether
an agency's cost evaluation was reasonably based and was not arbitrary.
See Raytheon Support Services, Co., B-219389.2, supra, at 3, 4.
In this case, the solicitation did not indicate that award would be
based on the lowest evaluated cost and it is clear that the protester
was not entitled to award simply by having submitted the lowest cost,
technically acceptable proposal. See also Lear Siegler, Inc., --
Reconsideration, B-217231.2, May 30, 1985, 85-1 C.P.D. Paragraph 613.
Instead, the solicitation provided that price would be the controlling
factor only in the event that proposals were evaluated as "technically
substantially equal." Price itself was not an evaluation factor, but the
evaluation scheme did allocate 9 points to the "reasonableness of costs"
-- which the RFP described as an evaluation of the credibility and
reasonableness of the cost proposal relative to the technical proposal.
The record shows that Intelcom's best and final offer received 4.5
out of a possible 9 evaluation points under the "reasonableness of cost"
criterion. The offer was downgraded for evaluated weaknesses in the
areas of Completeness of Cost Data (information provided was
insufficient to permit analysis), Adequacy of Support Data (wage survey
data provided did not support proposed salaries), and Comparison of
Costs Data (protester proposed costs substantially below its current
costs as incumbent operator without indicating how such economies would
be realized). Intelcom disputes each of these findings, and the protest
record contains detailed analyses and responsive arguments on both sides
of the cost reasonableness issue. The protester's essential argument is
that, had its cost proposal received the additional 4.5 evaluation
points available for a maximum 9 points for "reasonableness of cost,"
its new comprehensive score of 70.9 points would have been "technically
substantially equal" to MTC's 83.6 total evaluation point score. Thus,
the protester argues that price should have become the controlling
factor for award selection. We do not accept the protester's premise
that a reduction in the differential between the highest and lowest
scored offerors from 17.2 evaluation points to 12.7 evaluation points
makes those two offerors "technically substantially equal." As a result,
we need not resolve this issue since we conclude as follows that its
resolution in the protester's favor still would not provide a basis to
invalidate the award to MTC.
As set forth in the RFP, the contracting officer's subjective
business judgment, rather than specific point scores, determines whether
proposals are "technically substantially equal," that is, the proposals
in final ranking are not "markedly superior" to the others. The
contracting officer determined that MTC's best and final proposal which
received a total score of 83.6 evaluation points was technically
superior to both the second ranked offer with 70.5 points and Intelcom's
third ranked offer with 66.4 points. Thus, the contracting officer
found that the 13.1-point difference between MTC and the second ranked
offer and the 17.2-point difference betwen MTC and the protester
constituted technical superiority for MTC's proposal within the meaning
of the RFP's award selection provision. Since Intelcom was not
technically substantially equal to MTC, it follows that price was not
the controlling factor and the protester's lower evaluated cost was only
one factor for the contracting officer to consider in determining which
proposal would be most advantageous to the government. The agency
asserts that, even if Intelcom were given the additional 4.5 points for
cost reasonableness, raising its total score to 70.9, MTC's proposal
would still have been considered technically superior and would have
resulted in award to MTC. In view of the fact that Intelcom's upgraded
score would have been virtually the same as that of the second ranked
firm, the record appears to support this argument.
In selecting MTC for award, the agency determined that although
Intelcom's price was lower than MTC's, all evaluation materials and
scores reflected a clear technical superiority on MTC's part which more
than offset the price difference between the two proposals.
Furthermore, the agency questioned the realism of several of the
protester's projected costs which indicates that the price difference
would have narrowed considerably had the agency actually adjusted the
protester's costs to what it considered more realistic levels. Although
the protester generally feels that the agency was arbitrary in making
this determination, it has only offered argument on the agency's cost
reasonableness analysis, which, as indicated above, even if resolved in
favor of the protester, does not close the remaining 12.7-percent gap of
technical superiority between MTC and Intelcom.
The protester has not offered evidence to show that the agency's
technical judgments are in error, arbitrary or otherwise unreasonable --
only that it believes they are wrong. Mere disagreement with the
technical judgments supporting an agency's assessment of its minimum
needs and the best methods for accommodating those needs, however, does
not carry a protester's burden to prove that the agency's technical
conclusions are unreasonable. See Lear Siegler, Inc. --
Reconsideration, B-217231.2, supra, at 5.
In view of Intelcom's failure to provide details or supporting
evidence on any evaluation issue other than cost reasonableness, and
therefore its failure to support its contention that its overall
proposal was technically substantially equal to MTC's, we find no basis
to question the contracting officer's determination that MTC's proposal
was technically superior to the protester's. We find the award to the
technically superior offeror to be reasonable and consistent with the
RFP's award selection criteria which emphasized that technical
superiority would be more important than price, and we have no basis for
disputing the agency's determination that the final price associated
with award to MTC was reasonable. Accordingly, Intelcom's protest of
the award to MTC on this basis is denied.
Intelcom also generally alleges that the evaluation in this case was
conducted "by individuals with an arbitrary bias against Intelcom."
Where, as here, a protester alleges that procurement officials acted
intentionally to preclude the protester from receiving the award, the
protester must submit virtually irrefutable proof that the officials had
a specific and malicious intent to harm the protester, since contracting
officials otherwise are presumed to act in good faith. See Lear
Siegler, Inc., -- Reconsideration, B-217231.2, supra, at 7. Intelcom
has presented no probative evidence to support its allegation in this
respect and, since we will not attribute prejudicial motives to such
officials on the basis of inference or supposition, we find Intelcom has
failed to meet its burden of proof.
Finally, in view of our determination on Intelcom's protest, and
since there is no evidence before us that the government acted
improperly, there is no basis on which to grant Intelcom's claim for
proposal costs and attorney's fees. See Lear Siegler, Inc., --
Reconsideration, B-217231.2, supra, at 8.
Harry R. Van Cleve
General Counsel
FILE: B-220191.2 86-1 CPD 58
DATE: January 17, 1986
MATTER OF: American Seating Company
CONTRACTS - PROTESTS - MOOT, ACADEMIC, ETC. QUESTIONS - CONTRACT
TERMINATED FOR CONVENIENCE
Protest against termination of a contract for the convenience of the
government is academic when the procuring agency lacks the necessary
funds either to resolicit or to reinstate the terminated contract if the
protest is sustained.
American Seating Company protests the termination for convenience of
a delivery order issued to it under request for quotations (RFQ) No.
M38440-5718-3660, issued by the Marine Corps Logistics Base, Albany,
Georgia. American Seating contends that there was not a reasonable
basis for the termination, since its offer complied with the brand name
or equal specifications for office furniture. The protester maintains
that it cannot be determined whether the termination is in the best
interest of the government, since the Marine Corps has not provided a
reason for the action in its report to this Office.
We dismiss the protest.
The termination occurred on October 25, 1985, after Commercial Office
Environments, another offeror, protested to this Office concerning the
propriety of award to American. We dismissed that protest, Commercial
Office Environments, B-220191, Oct. 24, 1985, 85-2 CPD Paragraph 458,
after the Marine Corps advised us by letter dated October 18, 1985 that
after award, it had discovered that American's offer appeared to be
nonresponsive in several areas. Therefore, the Marine Corps stated, it
intended to terminate the contract, review the specifications, revise
them where necessary to reflect the agency's minimum needs, and
resolicit. Under these circumstances we found the protest academic.
We agree with American's statement that the basis for the termination
is not clear, since in its report to this Office the Marine Corps has
not provided any explanation as to why American's offer was
nonresponsive. However, the Marine Corps advises us that it now lacks
the necessary funds either to resolicit or to reinstate American's
contract if we should sustain its protest. The Corps explains that the
funds were deobligated and are no longer available for obligation. See
31 U.S.C. Section 1502 (1982). The Corps further advises that no fiscal
year 1986 funds have been identified for this acquisition and that
therefore a reprocurement of the equipment is not planned. Under these
circumstances, American's protest is also academic, and we dismiss it.
Ronald Berger
Deputy Associate
General Counsel
FILE: B-220191 85-2 CPD 458 DATE: October 24, 1985
MATTER OF: Commercial Office Environments
DIGEST:
CONTRACTS - PROTESTS - MOOT, ACADEMIC, ETC. QUESTIONS - CONTRACT
TERMINATED FOR CONVENIENCE
Protest against an allegedly improper award to another firm is
academic when the contract in question is being terminated for the
convenience of the government because the contracting agency
discovered, after award, that the awardee's offer appeared to be
nonresponsive in several areas.
Commercial Office Environments protests the award of a delivery order
to American Seating Company under request for quotations (RFQ) No.
M38440-5718-3660, issued by the Marine Corps Logistics Base, Albany,
Georgia. Commercial contends that it was impossible for American's
offer to meet the specifications for office furniture because American's
commercial price list does not contain several of the items requested by
the RFQ. According to American, items must be so listed and approved by
the General Services Administration for inclusion in Federal Supply
Schedule furniture contracts.
We dismiss the protest.
By letter dated October 18, 1985, the Marine Corps advised our Office
that after the award to American, it discovered that American's offer
appeared to be nonresponsive in several areas. Therefore, the Marine
Corps states, it intends to terminate American's contract for the
convenience of the government, review the specifications, revise where
necessary to reflect the agency's minimum needs, and resolicit.
Since the award under the original RFQ will be terminated and the
requirement filled under a new solicitation for which the protester will
have an opportunity to compete, Commercial's protest concerning the
propriety of the award to American is academic and not for
consideration. Hill Aviation Logistics, B-218824, May 16, 1985, 85-1 C.
P.D. P 560.
We dismiss the protest.
Ronald Berger
Deputy Associate
General Counsel
FILES: B-220181.2, B-220182.3 DATE: November 25, 1985
The Honorable Daniel K. Inouye
United States Senate
Dear Senator Inouye:
This is in response to your letter dated October 30, 1985, regarding
a recent bid protest decision by our Office, Pacific Allied Products,
Ltd., B-220181, et al., Oct. 18, 1985, 85-2 C.P.D. P . We dismissed
the protest because the protester was not an actual or potential bidder
under the challenged solicitation and therefore was not entitled to
maintain the protest. The protester now has questioned the dismissal
and seeks review of its protest on the merits. You asked for
information regarding our decision, specifically with respect to the
procedures for requesting reconsideration by our Office.
As discussed in detail in our original decision, the Competition in
Contracting Act of 1984 (CICA), 31 U.S.C.A. Sec. 3551 (2) (West Supp.
1985), authorizes our Office to consider bid protests brought by any
interested party, defined as an "actual or prospective bidder or offeror
whose direct economic interest would be affected by the award of the
contract or the failure to award the contract." Prior to the enactment
of CICA, we reviewed protests by subcontractors, in certain limited
circumstances, specifically, where no other immediate party had a
greater interest in the issue raised or where there was a possibility
that a subcontractor's interest would not be adeauately protected if our
bid protest forum were restricted solely to potential awardees. Since,
however, the enactment of CICA, parties which do not meet the statutory
definition are not entitled to have their protests considered by our
Office.
Here, Pacific Allied is a patential supplier to the successful
bidder, but is not itself an actual or potential bidder under the
challenged solicitation. Since CICA's definition of interested party
clearly requires that a protester be an actual or pntential bidder, our
Office is precluded by the terms of the Act itself from reviewing the
protest brought by Pacific Allied in this case. See Julie Research
Laboratories, Inc.--Request for Reconsideration, B-219370.2, Sept. 17,
1985, 85-2 C.P.D. P 294.
With regard to a request for reconsideration of our decision to
dismiss the protest, our Bid Protest Regulations require that such a
request be filed within 10 working days after the basis for
reconsideration is or should be known, in this case, when the protester
received a copy of our decision. 4 C.F.R. Sec. 21.12(b) (1985). Any
such request now would appear to be untimely since, allowing one week
for receipt of the decision by the protester, more than 10 working days
have elapsed since our decision was issued on October 18.
Sincerely yours,
Harry R. Van Cleve
General Counsel
FILE: B-220181, B-220182 DATE: October 18, 1985
MATTER OF: Pacific Allied Products, Ltd.
DIGEST:
To be considered an interested party so as
to have standing to protest under the
Competition in Contracting Act of 1984 and
GAO Bid Protest Regulations, a party must be
an actual or prospective bidder or offeror
whose direct economic interest would be
affected by the award of a contract or the
failure to award a contract. A manufacturer
which may supply its product to the bidders
in a federal procurement, but which is not
an actual or prospective bidder itself, is
not an interested party.
Pacific Allied Products, Ltd. protests any award under invitation for
bids (IFB) Nos. DACA83-85-B-0243 and -0244, issued by the Corps of
Engineers for reroofing of Moanalua Terrace Housing, Oahu, Hawaii. The
protester contends that the specifications in the solicitations are
overly restrictive in that they require the use of only one type of
insulation material. Because we find that the protester is not an
interested party, we dismiss the protests.
Under the Competition in Contracting Act of 1984, 31 U.S.C.A. Sec.
3551(2) (West Supp. 1985), an interested party is defined as an"actual
or prospective bidder or offeror whose direct economic interest would be
affected by the award of the contract or the failure to award the
contract." This statutory definition of an interested party is reflected
in the language of our Bid Protest Regulations which implement the Act.
4 C.F.R.P 21.0(a) (1985). Accordingly, with respect to all bid protests
filed on or after January 15, 1985, the effective date of the Act's bid
protest provisions, only protests involving a direct federal procurement
filed by a party that comes within the statutory definition of an
interested party can be considered. Polycon Corp., 8-218304, et al., May
17, 1985, 64 Comp. Gen. , 85-1 CPDP 567.
Here, the Corps of Engineers' report states that the protester is a
manufacturer of cellular polystyrene, an insulation material originally
listed as acceptable in the specifications, out subsequently deleted by
amendment to the solicitations. The Corps states, and the protester
does not dispute, that, while the protester thus is a potential supplier
to bidders under the solicitations, the protester is not itself an
actual or prospective bidder. As a result, the protester does not
qualify as an interested party under tne Competition in Contracting Act
or our regulations. ADB-ALNACD, Inc., B-218541, June 3, 1985, 64 Comp.
Gen. , 85-1 C.P.D. P 633. The protester argues that it should be
regarded as an interested party because its economic interest as a
manufacturer and potential supplier to the successful bidder is affected
by the Corps' decision to exclude its product. The protester's interest
as a potential supplier is not suf ficient, however, since, as discussed
above, both the Competition in Contr cting Act and our regulations also
require the protester to be an actual or prospective bidder.
The protests are dismissed.
Ronald Berger
Deputy Associate
General Counsel
FILE: B-220180 85-2 CPD 520 DATE: November 4, 1985
MATTER OF: Teqcom, Inc.
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTOR
1. Protest based on agency's failure to provide sufficient
information for the submission of a proposal is untimely where the
protest is not filed within 10 days after the closing date.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTOR
2. Protest concerning the evaluatimn of the protester's
equipment must be filed no later than 10 days after the basis of
the protest is known or should have heen known, whichever is
earlier.
Teqcom, Inc., protests the issuance of purchase order No.
N00189-85-M-1279 by the Department of the Navy to Analytics
Communications Systems (ACS) for two Analytics Model TLC-100 Autodin
interfaces. Teqcom complains that Navy personnel failed to act on
Teqcom's request for information needed for the preparation of its
proposal and that the Navy failed to evaluate Teqcom's devices properly.
We dismiss the protest.
The Navy's June 21, 1985 transmittal of its Commerce Business Daily
(CBD) synopsis for the purchase of these Autodin interfaces appeared in
the CBD on July 3. It required, among other things, that the interfaces
be "AFIS type" 1/ and provided for the consideration of equivalent
devices. The CBD notice called for offers within 30 days from the date
of the notice, and stated that no solicitation document existed.
By letter of July 12, Teqcom conf irmed an earlier conversation with
Navy contracting personnel; provided the Navy with a specific
description of its Autodin interface unit; and requested "details and
the configuration mf the operation into which the unit wmuld be
installed" so it could determine a proposal price. On August 21, Teqcom
phoned Navy contracting persmnnel to complain about not receiving a
response to its earlier request. At that time, Teqcom learned that the
purchase order had been issued to ACS.
The Navy, however, discovered that the purchase order was unsigned,
and ordered ACS tm disregard it, so that Teqcom's equipment description
could be reviewed. Upon this review, which did not include any price
consideration because Teqcom never had submitted a quotation, the Navy
found that Teqcom's equipment lacked AFIS certification. On August 28,
Teqcom was informed that its equipment was unacceptable, and ACS was
reissued the purchase order. The Navy has continued performance of the
contract notwithstanding Teqcom's September 5 protest to our Office,
because the interfaces are essential for intelligence communications and
delay in their pre-testing would be costly and disruptive to other
contract schedules.
Teqcom initially argues that the Navy's failure to provide it with
information prevented Teqcom from responding to the synopsis properly.
We dismiss this protest ground as untimely.
The July 3 CBD notice expressly called for a 30 day response period,
as required by Federal Acquisition Regulation (FAR), 48 C.F.R. Sec.
5.203(b) (1984). Hence, no proposal would be accepted after August 2.
Under our Bid Protest Regulations, protests must be filed no later than
10 working days after the basis of the protest is known or should have
been known, whichever is earlier. See 4 C.F.R. Sec. 21.2(a) (2). Any
protest based on the Navy's failure to provide information needed to
submit a proposal therefore should have been filed within 10 days of
August 2. See Dixie Business Machines, Inc., B-208968, Feb. 7, 1983,
83-1 C.P.D. P 128. Teqcom's protest to our Office was received more
than 1 month after this date, and even if we were to consider Teqcom's
August 21 complaint to the Navy as an oral protest, that complaint was
registered almost 3 weeks after the August 2 response cut-off date.
Under these circumstances, this protest issue is untimely and will not
be considered.
Teqcom raises its second basis for protest in its comments to the
Navy's administrative report, claiming that its unit meets two of the
three categories of testing necessary for AFIS certification, and that
final certification cannot be obtained without placement in a particular
system configuration.
We dismiss these protest grounds also. The record shows that Teqcom
knew by August 30 that the Navy rejected its equipment for lacking AFIS
certification. Teqcom failed to protest this issue, however, until
October 17, when it submitted its comments to the Navy's administrative
report, so the issue is untimely. 4 C.F.R. Sec. 21.2(a)(2). We further
note that, although the Navy has had no opportunity to respond to this
precise issue, the Navy states in its report that complete AFIS
certification is required for successful testing of the Autodin network;
ACS has this certification; and certification of Teqcom's equipment
could take as long as 6 months to complete.
The protest is dismissed.
Robert M. Strong
Deputy Associate General Counsel
1/ This means the interfaces had to be Air Force Intelligence
Service-certified, which requires approval by the Defense Intelligence
Agency.
FILE: B-220174 85-2 CPD 539 DATE: November 12, 1985
MATTER OF: Consolidated Maintenance Company
DIGEST:
CONTRACTS - PROTESTS - MOOT, ACADEMIC, ETC. QUESTIONS - CORRECTIVE
ACTION PROPOSED, TAKEN, ETC. BY AGENCY
1. Protest allegations are academic and not for consideration
by GAO where agency modif ies the challenged solicitation
provisions as the protester requests.
BIDS - INVITATION FOR BIDS - SPECIFICATIONS - MINIMUM NEEDS
REQUIREMENT - ADMINISTRATIVE DETERMINATION - REASONABLENESS
2. In the absence of evidence clearly establishing a
substantial adverse impact on competition, GAO will not object to
an agency's use of minimum manning or equipment requirements to
ensure adequate service.
BIDS - INVITATION FOR BIDS - SPECIFICATIONS - RESTRICTIVE - BURDEN OF
PROVING UNDUE RESTRICTION
3. Protest that requirement for full time (versus part-time)
workers is unduly restrictive is denied where the agency has
supported the requirement and the protester has failed to show
that the requirement is improper or clearly unreasonable.
BIDS - INVITATION FOR BIDS - SPECIFICATIONS - BRAND NAME JOR EQUAL -
SALIENT CHARACTERISTICS - CONFORMABILITY REQUIREMENT
4. Salient characteristics listed in brand name or equal
description are presumed to have been regarded as material and
essential to the agency's needs.
Consolidated Maintenance Company (Consolidated) protests certain
provisions in invitation for bids (IFB) FPL-85-12 issued by the
Department of Agriculture, Forest Products Laboratory, Madison,
Wisconsin (Agriculture), for the procurement of janitorial services.
Consolidated initially objected to seven different clauses contained
in the IFB. Agriculture amended the IBB in response to Consolidated's
protest. Consolidated still objects to six of the amended clauses. We
deny Consolidated's protest.
Consolidated protests against the clause in the IFB which deals with
liquidated damages. Consolidated argues that the sum of $250 per day
for failure to perform is an unenforceable penalty because it could be
applied if a small cleaning task was not performed (for example, if the
contractor failed to clean a single drinking fountain).
Agriculture states in its report on this matter that, in order to
clarify its intention to not charge $250 per day for a contractor's
failure to perform individual cleaning tasks, it amended the IFB. The
amended clause states in a note that the clause shall apply only where
there is either a total failure of the contractor to perform the specif
ied contract work, or the contractor's performance is of such low
quality or quantity that the contract is about to be or has been
terminated for default. This amended clause, therefore, makes it clear
that the selected contractor will not be penalized $250 per day for
minor individual omissions such as the failure to clean a single
drinking fountain.
Consolidated, in its comments on the agency report, expresses concern
that, since in the past liquidated damages have been applied when the
contractor was in partial default due to its failure to perform specific
tasks, this may again happen under this liquidated damages clause. As
stated above, however, the clause is worded so that it applies only when
there is a total failure to perform or if the contract is about to be or
has been terminated for default. The liquidated damages clause does not
apply to "partial default" situations.
Consolidated complains about the listing in the IFB of companies that
have in the past performed the different types of work included in the
IFB. Although the IFB states that the companies are listed for
information purposes only and that bidders should not construe the list
as a requirement to utilize the services of the listed companies,
Consolidated argues that the listing of these companies is unfair to
other companies which could perform the work but are not listed.
Agriculture states that this list was incorporated in the IFB because
on prior occasions numerous contractors, including Consolidated,
inquired as to which companies in the Madison, Wisconsin, area performed
the required services. Agriculture adds that potential bidders
previously indicated that the information in question would be helpful
in the preparation of bids. In view of the fact that the solicitation
makes it clear that the listing is provided for information purposes
only, we see no harm or impropriety resulting from the list.
Consolidated objects to the IFB provision which suggests the minimum
manning level which Agriculture believes is necessary to perform the
required work. Consolidated argues that, although the specification
states that the manning levels are only "suggested," since they are
listed under the heading "general requirements," they could be
considered as required. Consolidated states that required manning
levels"could have an adverse effect on pricing and competition."
Agriculture states that the suggested manning levels appear in the
IFB merely to inform bidders as to how many people Agriculture thought
it would take to do the job, and not as a minimum requirement. Since
the clause in question uses the term "suggested" three times and states
that "personnel requirements may vary due to experience, absenteeism,
turnover, etc.," it is clear that it is intended strictly to give
bidders guidance and not to serve as a requirement. Moreover, we note
that, as here, in the absence of evidence clearly establishing a
substantial adverse impact on competition, we would not question even a
required minimum manning level which an agency believes is necessary to
ensure adequate service. See Linda Vista Industries, Inc., B-214447,
B-214447.2, Oct. 2, 1984, 84-2 C.P.D. P 380.
Consolidated protested the minimum equipment requirement in the IFB.
However, as a result of Consolidated's protest, Agriculture amended the
clause from minimum equipment required to suggested minimum equipment.
Agriculture's amendment of this section of the IFB renders
Consolidated's protest against required equipment academic, and not for
our consideration. See Halifax Engineering, Inc., B-219178, July 22,
1985, 85-2 C.P.D. P 68. In any case, as stated above, in the absence of
evidence establishing a substantial adverse impact on competition, we
would not question even a minimum equipment requirement. Linda Vista
Industries, Inc., B-214447, B-214447.2, supra.
Consolidated objects to the clause which requires the selected
contractor to perform work in buildings from 3:30 p.m. to 1, a.m.,
Monday through Friday, and which states that the entire custodial staff
allotted to the contract shall be present during this entire time except
for illness, injury or other personal reasons approved by the project
manager. Consolidated argues that the workload under custodial
contracts is not constant and the ability to include workers of less
than a full 8-hour shift is essential. Consolidated contends that,
without such flexibility, the cost to the government would be increased
by having, at times, unproductive contractor employees.
Agriculture states that the clause was included in the IFB because of
its experience on a prior contract which permitted part-time workers.
Agriculture argues that the result of allowing part-time workers was
that a wide range of employees were present on a given evening (10-30),
nobody, including the project manager, knew what anybody else was doing,
and work was performed in a rushed and sloppy manner because workers
knew they could leave early. Agriculture states, however, that it
recognizes that occasionally part-time workers may be necessary to
accommodate fluctuations in workload and that therefore it amended the
IFB to permit occasional part-time workers.
The determination of the needs of the government and the best method
of accommodating those needs are primarily the responsibility of the
contracting agency. We will not question the contracting agency's
determination absent a clear showing that it is unreasonable.
Logistical Support, Inc., B-212218, B-212219, Feb. 23, 1984, 84-1 C.P.
DP 231. Once an agency establishes support for its contention that the
restrictions it imposes are needed to meet its minimum needs, the burden
shifts to the protester to show that the requirements complained of are
clearly unreasonable. Polymembrane Systems, Inc., B-213060, Mar. 27,
1984, 84-1 C.P.D. P 354.
Agriculture has established support for its requirement that most
workers be present for the full shift. Consolidated's response merely
argues that it is not the government's responsibility "to shepherd the
contractor," and that the government's intent is to administer this
contract as though it was a personal services contract. Consolidated has
failed, however, to show that the requirement is unreasonable or
improper. See Renaissance Exchange, Inc., B-216049, Nov. 14, 1984, 84-2
C.P.D. P 534.
Consolidated protested the failure of the IFB to list the required
salient characteristics of brand name or equal cleaning products which
the IFB states must be used by the contractor in performing the
janitorial services. In response, Agriculture listed as the salient
characteristics of the cleaning products ingredients of the brand name
products. Additionally, Agriculture required bidders proposing to use
equal products to list the products and product specifications in their
bids. The IFB contained the brand name or equal clause requiring equal
products to meet the salient characteristics listed in the IFB.
Consolidated argues that a list of a product's ingredients is not
necessarily the same as the product's salient characteristics. However,
in this case, Agriculture has made the brand name ingredients the
salient characteristics by listing them as salient characteristics.
Listed salient characteristics are presumed to have been regarded as
material and essential to the agency's needs. The Prime-Mover Co.,
B-201970, Oct. 21, 1981, 81-2 C.P.D. P 325. Consolidated has not stated
why it considers any ingredient to be excessive to the agency's needs.
Thus, Consolidated has presented nothing to rebut the presumption of
materiality and essentiality. Therefore, we find no basis to question
the salient characteristics.
Harry R. Van Cleve
General Counsel
FILE: B-220172 DATE: March 4, 1986
MATTER OF: Buffalo District, Corps of Engineers - Travel Vouchers -
Compromise of Claim
Three employees were determined to have filed false travel vouchers
and were criminally prosecuted. The Department of Justice entered into
a compromise plea agreement with each defendant, which permitted them to
enter a guilty plea to a misdemeanor, and in turn they would make
restitution of the fraudulent amounts. In response to the question
concerning disposition of additional amounts withheld from the employees
for those days tainted by fraud, the agency is advised that only the
Department of Justice is authorized to compromise fraud claims and since
it has done so in this case, monies administratively retained are to be
repaid the defendents, without personal pecuniary liability attaching to
the finance and accounting officer by virtue of such payment. 31 U.S.C.
- 3711(d) (1982).
This decision is in response to a request from an Authorized
Certifying Officer, Army Corps of Engineers, Buffalo District. The
matter involves the personal pecuniary liability of an accountable
officer, in the circumstances described in the submission, in connection
with travel voucher payments which were later found to be fraudulent.
As a result of an investigation of travel voucher fraud conducted by
the Army Crops of Engineers, several cases involving civilian employees
of its Buffalo District were referred to the Department of Justice for
criminal prosecution. Three of the cases which were accepted for
prosecution involved Mr. Andrew G. Augugliaro, Mr. Michael J. Gruber,
and Mr. James J. Stephens.
Subsequent to the Department of Justice referral, the Buffalo
District began to retain unrelated travel reimburse- ment funds due the
employees for their then current travel. These funds were placed in
separate accounts, one for Michael J. Gruber and one for James J.
Stephens. No such account was established for Andrew G. Augugliaro
since there were no agency funds otherwise due him. The amounts
currently in the accounts for Gruber and Stephens total $1,671, and
$1,818, respectively.
On February 6, 1985, the U.S. Attorney was informed by the agency as
to the amounts owed as a result of the fraud. For this purpose, the
calculation was divided into two parts for each employee, the fraud
amount and the amount which, but for the fraud, would have been properly
paid, but which was deemed to be forfeited for each day the expenses
claimed were tainted by the fraud. See 59 Comp. Gen. 99 (1979).
On April 22, l985, the Assistant U.S. Attorney handling these cases
entered into plea agreements with Messers. Augugliaro, Gruber and
Stephens. These agreements provided that as an inducement to be
permitted to enter a plea of guilty to a single count of violating 18
U.S.C. 641 (1982), a misdemeanor, in lieu of more serious felony
charges which could have been brought, each defendant agreed to repay
the amount obtained by fraud (Augugliaro - $6,702.13; Gruber -
$3,784.69; and Stephens - $2,892.22). Additionally, each of them
specifically acknowledged and admitted that he wrongfully, willfully,
knowlingly and frauduently submitted phony travel vouchers to the United
States Government to obtain these monies. We understand that the full
amounts agreed to were paid through the U.S. Attorney's office to the
Corps of Engineers.
By letter dated April 30, l985, from the U.S. Attorney's office to
the Corps of Engineers, Buffalo District, which transmitted copies of
these plea agreements, the District was advised that the monies held in
the retained accounts for Messrs. Gruber and Stephens were to be
refunded to them. That letter further stated that if the money was not
refunded, the U.S. Attorney's office would not be able to defend the
Corps of Engineers in the event of a law suit on the issue.
Based on the above, the following questions are asked:
1. Is the Finance and Accounting Officer precluded from taking
administrative action to collect additional amounts from the three
defendants, based on the Plea Agreements?
2. May the Finance and Accounting Officer refund the monies
retained without suffering personal pecuniary liability as a
result of paying such money?
The answer to both questions is yes.
Section 3711 of Title 31, United States Code, provides in subsection
(a) that the head of an executive agency may compromise a claim of the
Government of not more than $20,000, and in subsection (d) that (a)
compromise under this section is final and conclusive unless gotten by
fraud, misrepresentation, presenting a false claim, or mutual mistake of
fact.
The Federal Claims Collection Standards implementing the above Code
provisions are contained in chapter II of Title 4, Code of Federal
Regulations (1985). Section 101.3(a) thereof provides that the
Department of Justice has exclusive authority to compromise, suspend, or
terminate collection action on claims involving fraud.
It is noted in the present case that the U.S. Attorney's office was
given a detailed accounting by the agency's finance and accounting
office of the amounts found due. That accounting included a listing of
all monies obtained by fraud as well as that which was deemed to be
appropriately forfeited since it represented other travel expenses
payments for days for which a fraudulent claim was made.
Notwithstanding that, the U.S. Attorney's office chose not to attempt to
recover those other amounts, limiting recovery to the specific amount
fraudelently obtained in exchange for a guilty plea to a lesser charge,
presumably, at least in part, to avoid a lengthy and costly trial. In
fact, the Department of Justice has recommended that the additional
amounts withheld be refunded.
While the compromise in question involved an admixture of criminal
charges and restitution, it is our view that it was an appropriate
method of disposing of the matter, since it did establish an appropriate
quid pro quo. Further, it is our view that since payment has been made
under the compromise, that action has terminated all claims of the
government against the individuals arising out of the admitted fraud
during the period in questions.
Since the amount recovered under the agreement is representative of
all sums due, then such sums administratively retained from Messrs.
Gruber and Stephens are not to be repaid to them. Further, an
accountable officer is not liable for an amount paid if the amount is
not recovered because of a compromise. Therefore, personal pecuniary
liability will not attach to the finance and accounting officer by
virture of such repayment. See 31 U.S.C. 3711 (d) (1982).
Comptroller General
of the United States
FILE: B-220168.2 85-2 CPD 620
DATE: November 29, 1985
MATTER OF: Space Dynamics Corporation
CONTRACTS - PROTESTS - MOOT, ACADEMIC, ETC. QUESTIONS - SUSPENDED,
DEBARRED, ETC. CONTRACTORS
GAO will not consider protest that agency improperly canceled
solicitation, because protester has been suspended from government
contracting and is ineligible to receive a government contract and
therefore is not an interested party to protest under Bid Protest
Regulations.
Space Dynamics Corporation (Space Dynamics) protests the cancellation
after bid opening of invitation for bids (IFB) No. N00104-85-B-0674
issued by the United States Navy for air conditioner fan-coil
assemblies. Space Dynamics submitted the low bid, but the solicitation
was canceled because the first article approval clause required to be
included in the solicitation was omitted. Space Dynamics contends that
the cancellation was improper because resolicitation would result in an
impermissible auction situation.
Subsequent to the filing of the protest, we have been advised that
Space Dynamics has been suspended from government contracting and has
been placed on the debarred bidders list. A firm that has been
suspended is precluded from receiving government contracts. Federal
Acquisition Regulation, 48 C.F.R. Section 9-405(a) (1984).
Under our Bid Protest Regulations, a party must be "interested"
before we will consider its protest. 4 .C.F.R . Sections 21.0(a) and
21.1(a) (1985). A party is not interested if it would not be eligible
for award should its protest be upheld. Solid Waste Services, Inc.,
B-218445, B-218445.2, June 20, 1985, 85-1 C.P.D. Paragraph 703. Since
Space Dynamics is suspended and ineligible for award of this contract
even if its protest were sustained, the firm is not an interested party
capable of maintaining a protest. See Jonard Industries Corp.,
B-214013, Feb. 14, 1984, 84-1 C.P.D. Paragraph 199.
The protest is dismissed.
Robert M. Strong
Deputy Associate General Counsel
FILE: B-2210167.2 85-2 CPD 359
DATE: September 30, 1985
MATTER OF: A&M Instrument, Inc. -- Request for Reconsideration
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - TIME FOR FILING - WHAT CONSTITUTES "FILING"
Where protest is initially submitted without a detailed statement of
the legal and factual grounds of protest, but is subsequently followed
by a letter that includes the requisite detailed explanation, timeliness
of the protest must be measured from the date of receipt of the detailed
statement.
A&M Instrument, Inc. requests reconsideration of our September 4,
1985, dismissal of its protest of the award of a contract for
multimeters to John Fluke Co. under request for proposals (RFP) No.
DLA900-85-R-0517 issued by the Defense Logistics Agency. We dismissed
the protest as untimely because the protest, which was initially filed
with the contracting agency, was not filed with our Office within 10
working days after the protester had knowledge of initial adverse agency
action. Bid Protest Regulations, 4 C.F.R. Section 21.2(a)(3) (1985).
We affirm our prior dismissal.
On August 13, we received a telex from A&M that referenced RFP
DLA900-85-R-0517 and stated: "A&M Instrument, Inc. reiterates its
protest of June 11, 1985. Copies of A&M original protest, data package
& DESC reply dated August 5, 1985 to follow week of August 19, 1985." By
letter dated August 29, and received in our Office on September 3, A&M
stated that it was protesting the award to John Fluke Co. under the RFP
cited in its telex and enclosed copies of the documents referenced in
the prior telex that set forth the grounds for its protest. Because the
telex did not set forth a detailed statement of the legal and factual
grounds of protest including copies of relevant documents as required by
our regulations, its receipt in our Office did not constitute the filing
of a protest. 4 C.F.R. Section 21.1(c)(4); B.H. Aircraft., Inc.,
B-218475.2 May 17, 1985, 85-1 CPD Paragraph 568. A&M did not file what
properly could be considered a protest under our regulations until
September 3, when we received A&M's subsequent letter containing a
detailed statement of the protest grounds. Since that letter indicated
that the agency had informed A&M on August 5 that it had denied that
firm's protest, the September 3 protest to our Office was clearly
untimely. See ZB Precision Products, Inc., B-218658, May 10, 1985, 85-1
CPD Paragraph 531.
A&M argues that because it did not actually receive the agency's
letter denying its agency-level protest until August 12, its protest to
our Office is timely. Even assuming an August 12 notification date, the
protest is still untimely. Since A&M's telex did not constitute a
protest, the actual filing date of September 3 makes the protest
untimely regardless of whether A&M was informed of the agency's action
on August 5 or August 12.
We affirm our decision.
/s/ Harry R. Van Cleve
General Counsel
FILE: B-220164 85-2 CPD 277
DATE: September 6, 1985
MATTER OF: Bay Cities Refuse Service, Inc.
BIDS - PRICES - BELOW COST - EFFECT ON BIDDER RESPONSIBILITY
DIGEST:
1. Allegation that low bidder will be unable to perform because of
below-cost bid is a matter of responsibility. GAO does not review
agency's affirmative responsibility determination in absence of a
showing of possible fraud or bad faith, or that solicitation's
definitive responsibility criteria were not met.
CONTRACTS - SMALL BUSINESS CONCERNS - AWARDS - SMALL BUSINESS
ADMINISTRATION'S AUTHORITY - SIZE DETERMINATION
2. Under the Small Business Act, the Small Business Administration
has conclusive authority to determine matters of small business size
status for federal procurements, and therefore GAO will not consider an
allegation that the low bidder is not a small business concern.
BIDS - RESPONSIVENESS - PRICING RESPONSE - MINOR DEVIATIONS FROM IFB
REQUIREMENTS
3. Submission of deduction schedule with bid where solicitation
instructed that the schedule be submitted later does not make bid
nonresponsive.
Bay Cities Refuse Service, Inc. protests the award of a contract to
the apparent low bidder, San Jose Disposal, under invitation for bids
(IFB) No. N62474-85-B-7580 issued by the navy for refuse and trash
collection services at Moffett Field, California. The protester
contends that San Jose Disposal cannot satisfactorily perform the
contract work at its bid price. The protester also argues that San Jose
Disposal's bid should be rejected because that firm may not qualify as a
small business and because, contrary to instructions, it submitted a
schedule of deductions with its bid. We dismiss the protest.
Whether a low bidder can adequately perform a contract at the bid
price is a matter of the bidder's responsibility. Prior to the award of
this or any government contract, the contracting officer must make an
affirmative determination of the offeror's responsibility. Zimmerman
Plumbing and Heating Co., B-211874, June 24, 1983, 83-2 CPD Paragraph
16. Thus, Bay Cities' protest constitutes a challenge to the
contracting agency's affirmative responsibility determination which our
Office will not review absent a showing of possible fraud or bad faith
on the part of contracting officials or an allegation that definitive
responsibility criteria in the solicitation have not been met. Bid
Protest Regulations, 4 C.F.R. Section 21.3(f)(5) (1985); Chambers
Consultants and Planners, B-217503, Feb. 5, 1985, 85-1 CPD Section 143.
The protester did not allege either of these exceptions.
Bay Cities asserts that San Jose Disposal may not be a small business
and therefore may be ineligible for any contract award under what we
assume is a small business set aside. Under the Small Business Act, 15
U.S.C. Section 637(b)(6) (1982), the small Business Administration has
conclusive authority to determine matters of small business size status
for federal procurements. Rut's Delivery Service, B-217286, Apr. 26,
1985, 85-1 CPD Paragraph 474. Consequently, we do not review such
matters. 4 C.F.R. Section 21.3(f)(2).
Finally, the protester complains that San Jose Disposal has submitted
its schedule of deductions even though the solicitation apparently
instructed bidders that the schedule was to be submitted later. While
we recognize that in many cases deduction schedules (used to penalize
the contractor for inadequate performance) are to be submitted after
award as a matter of contract performance, we do not believe that the
early submission of the schedule with the bid would necessarily have any
effect on the responsiveness of the bid. A bid need not be rejected as
nonresponsive merely because it offers more than is required so long as
the bid did not effect the government's right to award a contract
consistent with the terms of the IFB and is not prejudicial to other
bidders. Charles v. Clark Co., Inc., Comp. Gen. 296 (1980), 80-1 CDP
Section 194. The protester has made no such showing.
/s/ Ronald Berger
Deputy Associate General Counsel
FILE: B-220163 85-2 CPD 639
DATE: December 9, 1985
MATTER OF: Daniel R. Hinkle
BIDS - GUARANTEES - BID GUARANTEES - DEFICIENCIES - BID REJECTION
1. Agency official's admittedly erroneous oral advice to a bidder
regarding the amount on which a required 20 percent bid guarantee should
be based does not prejudice the bidder when the guarantee furnished is
defective in other ways in addition to the insufficient amount.
BIDS - GUARANTEES - BID GUARANTEES - IRREVOCABLE LETTER OF CREDIT -
ACCEPTABILITY
2. Protester's bid is properly rejected as nonresponsive where an
irrevocable letter of credit submitted as a bid guarantee does not
identify the solicitation or the work to be performed and does not
contain an expiration date. Enforceability of the letter of credit is
therefore questionable, and the government would not receive the full
and complete protection contemplated by the IFB.
Daniel R. Hinkle protests the rejection of his low bid under
invitation for bids (IFB) No. R6-1-85-74, issued July 16, 1985 by the
Forest Service, U.S. Department of Agriculture. The IFB covered
cafeteria services at the Redmond Air Center, Redmond, Oregon, for a
base period from October 1, 1985 through September 30, 1986, plus 4
option years. The Forest Service found a letter of credit submitted by
Hinkle as a bid guarantee to be materially defective, and it rejected
the bid as nonresponsive.
We deny the protest.
The IFB required each bidder to submit with its bid a bid guarantee
in the amount of 20 percent of the "total bid price." The solicitation
cautioned, in compliance with the applicable Federal Acquisition
Regulation (FAR) provision, that failure to furnish a guarantee in the
proper form and amount by the time set for bid opening might be cause
for rejection of the bid. See FAR, 48 C.F.R. Sections 28.101-4 and
52.208-1 (1984).
The IFB further provided that for each contract year, the government
would guarantee payment for the first 200 days of meal services at $210
per day; this was in addition to the unit prices to be paid, in accord
with the bid schedule, for meals actually served. Hinkle's prices for
the base year appeared as follows on the bid schedule:
TABLE OMITTED
Hinkle's extended prices for the three meals for 1 year, excluding
the guaranteed payment, thus totaled $27,908. Hinkle states that
because he was not certain whether the required 20 percent bid guarantee
was to be based on this total, or whether it was to be based on this
total plus the $42,000 guaranteed by the government, he called the
procurement office in the Deschutes National Forest on July 26, 1985.
Block 10 of the IFB included a telephone number for this office and
instructed bidders to call the procurement clerk for information.
According to Hinkle, the procurement office orally advised him not to
include the $42,000 in computing the amount of the bid guarantee.
Hinkle states that since 20 percent of $27,908 is $5,581.60, he arranged
for an irrevocable letter of credit in the amount of $5,600. At bid
opening on August 16, 1985, however, the contracting officer rejected
the bid because the letter of credit was less than 20 percent of the
"total bid price," including the $42,000 guaranteed by the government.
Hinkle's bank subsequently offered to provide an amended letter of
credit in the amount of $14,000, or slightly more than 20 percent of
Hinkle's $69,908 total; however, the contracting officer refused to
accept it, providing the basis for Hinkle's protest.
In its report on the protest, the Forest Service acknowledges that it
apparently gave Hinkle incorrect information when he called to determine
the basis for the bid guarantee. The agency argues, however, that the
solicitation clearly stated that guarantee was to be based on the "total
bid price," and that the only reasonable interpretation of this price is
that it includes the $42,000 guaranteed by the government. The agency
further argues that Hinkle's bid guarantee was deficient not only as to
the amount. It points out that the letter of credit did not reference
either IFB No. R6-1-85-74 or the cafeteria services at the Redmond Air
Center; did not include a bank identification number unique to the
letter of credit; and did not contain an expiration date. The agency
contends that the letter of credit therefore does not constitute the
firm commitment required by the IFB, because the issuing bank would have
the option not to honor a letter of credit that was not tied to a
specific bid.
We believe it was reasonable for Hinkle to call the number listed in
the solicitation and ask whether his bid bond had to be for an amount
that included the payment guaranteed by the government, or merely for
the amount over and above that which the government would pay. In this
case, there is more than one reasonable interpretation of what
constitutes the "total bid price." We also believe it was reasonable for
Hinkle to rely on the agency's oral advice not to include the $42,000 in
calculating the required bid guarantee. However, we find that Hinkle
was not prejudiced by the erroneous advice, since we agree that the
letter of credit submitted by Hinkle lacks the essentials of a firm
commitment.
A letter of credit is essentially a third-party beneficiary contract.
Upon request of its customer, a financial institution may issue such a
letter to a third party, whose drafts or other demands for payment will
be honored upon the third party's compliance with the conditions
specified in the letter. The effect and purpose of a letter of credit
is to substitute the credit of some entity other than the customer for
the credit of the customer. See Chemical Technology, Inc., B-192893,
Dec. 27, 1978, 78-2 CPD Paragraph 438 and cases cited therein; see
generally Juanita H. Burns et al., 55 Comp. Gen. 587 (1975), 75-2 CPD
Paragraph 400.
The determinative question in judging the sufficiency of any bid
guarantee, including a letter of credit, is whether it could be enforced
if the bidder subsequently fails to execute required contract documents
and to provide performance and payment bonds. See Truesdale
Construction Co., Inc. B-213094, Nov. 18, 1983, 83-2 CPD Paragraph 591.
A bidder need not comply with the exact requirements relating to a bid
guarantee in order for its bid to be considered responsive, so long as
the surety -- in this case the bank issuing the letter of credit --
would be liable notwithstanding any deviations. See J.W. Bateson Co.,
Inc., B-189848, Dec. 16, 1977, 77-2 CPD Paragraph 472.
We find that since the letter of credit submitted by Hinkle did not
refer to the IFB by number or indicate that it was for cafeteria
services at the Redmond Air Center, the contracting officer could not be
sure that it was intended to cover this particular contract or that it
had not also been submitted in connection with bids on other contracts.
Further, since it did not contain an expiration date for presentation of
drafts for payment, it is doubtful whether it could be enforced by the
Forest Service. We therefore do not believe that the government would
receive the full and complete protection it contemplated in drafting the
IFB. See Juanita H. Burns et al., supra. Under such circumstances, we
do not believe that the letter of credit constitutes the firm commitment
required by the IFB.
Hinkle suggests that the agency could have called his bank to
ascertain that it intended to be bound by the letter of credit for the
subject IFB. This would not have been proper, since a nonresponsive bid
cannot be made responsive by actions taken after bid opening. When
required, a bid guarantee is a material part of a bid and must,
therefore, be furnished with the bid. Baucom Janitorial Services, Inc.,
B-206353, Apr. 19, 1982, 82-1 CPD Paragraph 356. When a bidder supplies
a defective bond, the bid itself is rendered defective and must be
rejected as nonresponsive. Truesdale Construction, Inc., supra.
Similarly, the bank's offer after bid opening to provide an amended
letter of credit could not be considered. Id.
Finally, although acceptance of Hinkle's bid might result in a
monetary savings to the government, we have often observed that
maintaining the integrity of the competitive bidding system is more in
the government's best interest than the savings to be obtained by
acceptance of a nonresponsive bid. A.D. Roe Company, Inc., 54 Comp.
Gen. 271 (1974), 74-2 CPD Paragraph 194.
We conclude that the contracting officer properly rejected Hinkle's
bid as nonresponsive. The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220162 85-2 CPD 591 DATE: November 22, 1985
MATTER OF: The Homer D. Bronson Company
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
1. Under GAO Bid Protest Regulations, a protest based upon
improprieties in the terms of an invitation for bids apparent on
the face of the invitation must be filed prior to bid opening.
BIDS - RESPONSIVENESS - EXCEPTIONS TAKEN TOINVITATION TERMS
2. A bid that takes exception to the packaging specifications
of a solicitation is nonresponsive, since, in order to be
considered responsive, a bid must be an unequivocal offer to
provide the exact thing described in the invitation for bids, in
total conformance with the material terms of the solicitation.
BIDS - RESPONSIVENESS - EXCEPTIONS TAKEN TOINVITATION TERMS
3. A bid that includes preprinted terms and conditions that
vary from the terms and conditions in the solicitation is
nonresponsive.
BIDS - COMPETITIVE SYSTEM - PRESERVATION OF SYSTEM'S INTEGRITY -
PECUNIARY DISADVANTAGE TO GOVERNMENT
4. A nonresponsive bid may not be accepted, notwithstanding any
savings it might represent to the government, since such
acceptance would compromise the integrity of the competitive
bidding system.
The Homer D. Bronson Company (Bronson) protests the use of allegedly
improper specifications in Defense Logistics Agency (DLA) solicitation
No. DLA500-85-C-4021 and protests the rejection of its bid as
nonresponsive under the solicitation.
We dismiss the protest in part and deny it in part.
The Defense Industrial Supply Center (DISC), a field activity of DLA,
issued the invitation for bids (IFB) for a supply of brass hinges,
identif ied by stock number. Packaging instructions in the IFB required
that the hinges be packaged individually and marked with a bar code
label.
Bronson submitted the apparent low bid. However, its bid contained
the following notation:
"Please note we are taking exception to your packaging
specifications which call out wrap and label one each with bar
code marking. We are quoting on wrap and label 6 each with bar
code marking, as supplied to you on previous orders. If favored
with your order in this instance be sure this deviation to wrap
and label 6 each with bar code marking is noted."
The Agency concluded that Bronson's intention was to package and
label the hinges in units of six per package and determined the bid to
be nonresponsive to the terms of the IFB on this basis. The Agency also
noted that on the reverse of a cover letter or letterhead accompanying
Bronson's bid, there appeared terms and conditions "repugnant" to other
solicitation clauses. These terms were considered to be an additional
basis for the determination that Bronson's bid was nonresponsive. The
Agency therefore rejected Bronson's bid and awarded the contract to the
next low responsive, responsible bidder.
Although Bronson admits its bid can be considered to be technically
nonresponsive, it nonetheless argues that the reference in its bid to
the packaging requirements was simply an attempt to clarify an incorrect
and misleading packaging specification in the solicitation. The
protester contends that it would be impossible to wrap and label each
hinge with a bar code marking, since the size of the label exceeds the
size of the individual package. According to Bronson, the instructions
should have indicated that while each hinge must be individually
wrapped, the units could then be bundled in an intermediate container to
accommodate the required bar code label.
To the extent Bronson is contending that the specifications should
have been written to permit packaging and labeling the hinges in bundles
of six, Bronson's protest is essentially against a solicitation
impropriety apparent from the face of solicitation. Our Bid Protest
Regulations require that a protest based upon an alleged impropriety in
an IFB be filed prior to bid opening. 4 C.F.R. Sec. 21.2(a)(1) (1985).
Here, 8ronson contends that the notation in its bid was intended to
bring this alleged oversight in the solicitation to the contracting
officer's attention. However, a protester's objection to
specifications, first presented by means of a notation in its bid,
cannot be considered. International Shelter Systems, Inc., B-220750,
Oct. 17, 1985, 85-2 C.P.D. P .
Bronson's protest concerning the impropriety of tne packaging
requirements is therefore untimely and will not be considered on the
merits. See Tonka Equipment Co., B-215724, Dec. 11, 1984, 84-2 C.P.D.
P 647. This portion of the protest is dismissed.
Regarding Bronson's contention that the DLA acted improperly in
rejecting its bid as nonresponsive, we note that in order to be
considered responsive, a bid must be an unequivocal offer to provide the
exact thing described in the IFB, in total conformance with the material
terms of the solicitation. Buckeye Pacific Corp., B-212183, Aug. 30,
1983, 83-2 C.P.D. P 282. Under the Federal Acquisition Regulation,
section 14.404-2(a), any bid that fails to conform to the essential
requirements of the invitation for bids must be rejected. 48 C.F.R.
Sec. 14.404-2(a) (1984). We have neld that this applies also to bids
that are ambiguous with respect to a naterial requirement. Southwest
Boat Corp., B-216016, Sept. 10, 1984, 84-2 C.P.D. P 276.
Bronson argues that its bid complied in all material respects with
the terms of the IFB, but was misconstrued. It alleges that its offer to
"wrap and label 6 each with bar code marking" was incorrectly
interpreted as eliminating the individual wrapping of each piece, as
well as eliminating the individual labeling. In this regard, the firm
contends that its further notation "as supplied to you on previous
orders" should have made clear its intention to wrap the hinges
individually and then bundle six of these in intermediate containers of
sufficient size to accommodate the bar code label. However, the
responsiveness of a bid must be determined from the bid itself; the
agency is not required to research references made in the bid. Pioneer
Industrial Products, B-209131, Mar. 22, 1983, 83-1 C.P.D. P 286.
Furthermore, a bidder may not explain the meaning of its bid after bid
opening because to permit such action would be tantamount to granting an
opportunity to submit a new bid. Southwest Soat Corp., B-216016, supra.
In this regard, we find it evident from the wording of Bronson's bid
that the firm was notifying DLA that it specifically intended to "take
exception" to the packaging specifications. Thus, Bronson's bid was not
an unequivocal offer in total conformance with the material terms of the
IFB. See Military Service of Monterey, B-207704, Aug. 24, 1982, 82-2
C.P.D. P 175. Consequently, we find that the Agency's determination
that Bronson's bid was nonresponsive was proper.
Regarding the protester's claim that DLA is allowing the awardee to
deviate from the packaging requirements in the same way, and its
assertion that the requirement was therefore minor and waivable, the
Agency states that this allegation is not true. The Agency reports,
rather, that the awardee is providing the hinges in individual wrappers
that are large enough to accommodate the required labels. Where the only
evidence on an issue of fact is the conflicting statements of the
protester and the contracting officials, the protester has not carried
its burden of affirmatively proving its case. See Xerox Special
Information Systems, B-215557, Feb. 13, 1985, 85-1 C.P.D. P 192.
Finally, we note that the preprinted terms and conditions included
with Bronson's bid, whether actually intended to modify the
solicitation's terms or conditions or not, plainly rendered the bid
nonresponsive. For example, Bronson's form expressly made its terms and
conditions a part of its bid. Among the terms and conditions at
variance with those included in the solicitation were those relating to
sales and use taxes, payment terms, delivery dates and termination.
Thus, even if its reference to the packaging specifications somehow
could be considered to be acceptable, the bid would nonetheless be
nonresponsive because of the nonconforming terms and conditions of its
bid. Redifon Cmputers Limited--Reconsideration, B-186691, June 30,
1977, 77-1 C.P.D. P 463.
Bronson also stresses that its own bid was low by 25 percent, and
that the potential savings to the government should outweigh what it
characterizes as "a technical ambiguity in semantics." However, we have
consistently held that a nonresponsive bid may not be accepted,
notwithstanding any savings it might represent to the government, since
such acceptance would compromise the integrity of the competitive
bidding system. Bee Eclipse Systems, Inc., B-216002, Mar. 4, 1985, 85-1
C.P.D. P 267.
The protest is dismissed in part and denied in part.
Harry R. Van Cleve
General Counsel
FILE: B-220152; B-220152.2 85-2 CPD 573 DATE: November 20, 1985
MATTER OF: Pauline James & Associates
DIGEST:
CONTRACTORS - RESPONSIBILITY - DETERMINATION - REVIEW BY GAO -
NONRESPONSIBILITY FINDING
1. GAO will not question a contracting officer's
nonresponsibility determination unless the protester can
demonstrate bad faith, abuse of discretion, or a lack of any
reasonable basis for the determination.
CONTRACTORS - RESPONSIBILITY - ADMINISTRATIVE DETERMINATION -
ACCEPTED
2. Although the protester argues that specific evidence of
unsatisfactory performance, financial irresponsibility, and
failure to meet solicitation and certification requirements were
due to circumstances beyond its control or were otherwise
explainable, GAO finds that the contracting officer reasonably
concluded otherwise in making a negative responsibility
determination.
CONTRACTORS - RESPONSIBILITY - DETERMINATION - REVIEW BY GAO -
NONRESPONSIBILITY FINDING BAD FAITH ALLEGED
3. Where bad faith is alleged in connection with a contracting
officer's nonresponsibility determination, the protester has the
burden of affirmatively proving its case and unfair or prejudicial
motives will not be attributed to procurement officials on the
basis of inference or supposition.
CONTRACTING OFFICERS - DETERMINATIONS - NONRESPONSIBILITY -
ADMINISTRATIVE V. JUDICIAL MATTER - PROCEDURAL DUE PROCESS GUARANTEES -
HEARING NOT REQUIRED
4. Since responsibility determinations are administrative in
nature, they do not require the procedural due process otherwise
necessary in judicial proceedings, and a contracting officer may
base a determination of nonresponsibility upon the evidence of
record without affording bidders an opportunity to explain or
otherwise defend against the evidence.
Pauline James & Associates (James) protests the award of two
contracts under invitations for bids issued by the Administrative Office
of the United States Courts (the agency) for court reporting services
for the United States Bankruptcy Court (the court). Contract number USCA
50731 (our B-220152) covers four bankruptcy judges within the geographic
area of Chicago, Joliet, and Geneva, Illinois;, contract number USCA
50738 (our B-220152.2) covers four bankruptcy judges within the
geographic area of Chicago, Waukegan, and Wheaton, Illinois.
The agency reports that, although James submitted the lowest bid on
each of the solicitations, the contracting officer found that James was
nonresponsible based on its unsatisfactory performance under a previous
contract with the court, lack of financial responsibility, and failure
to meet solicitation requirements regarding reporters' certificates and
specific experience qualif ications. (The matter was not referred to the
SBA because the court does not fall within the relevant statutory
definition of "agency" for purposes of the referral requirements.
Lithographic Publications, Inc., B-217263, Mar. 27, 1985, 85-1 C.P.D. P
357 at 2).
James protests to this Office that the contracting officer's
nonresponsibility determination was not supported by the facts of the
case and, therefore, was made in bad faith without affording the
protester an opportunity to respond to the allegations.
We deny the protests.
The record shows that the court provided the contracting officer with
information regarding serious past performance deficiencies by James,
including failures to file transcripts within the prescribed time limits
and failures to respond to inquiries regarding such late transcripts.
James counters that such incidents were precipitated by circumstances
beyond its control, such as attorneys providing erroneous information
regarding dates or the names of presiding judges. The agency stresses
that a responsible court reporting firm would possess sufficient records
to enable it to react more effectively in such situations. Additional
complaints regarding financial responsibility were made by the court
concerning the problem of returned payroll checks which prompted
individual James' reporters to ask the court to intervene on their
behalf. Although James argues that these payment problems were caused by
the staff court reporters themselves, the agency stresses that,
regardless of fault, the financial disputes between James and some of
its employees were having a seriously adverse effect upon James'
performance of the contract and, thus, the operation of the court.
The record further reflects that the agency experienced difficulty in
collecting debts owed by James for federal office space utilized by that
contractor. Although James ultimately admits that a valid debt had been
created concerning the office space, it argues that the agency
contributed to the problem by failing to recoup amounts due by
administrative offset against invoices submitted by James for reporting
services rendered. The agency asserts that James' inaction on this debt
is evidence of financial nonresponsibility.
As a final matter, the agency points out that the solicitations in
question required bidders to submit a brief biographical sketch of each
reporter that the bidder intended to use to provide service under the
contract and set forth the qualifications which each of the contractor's
reporters must have in order to perform reporting services under the
contract. These qualifications included 4 years of courtroom reporting
experience and a certificate of proficiency from the National Shorthand
Reporters Association, or an equivalent organization, as determined by
the contracting officer. The biographical sketches submitted by James
for each solicitation listed several reporters who did not meet the
qualifications requirements of the solicitation. Although James alleges
that one of its unqualified reporters had been used by an interim
contractor and that another of its unqualified court reporters was being
used by the current contractor, James does not contest that several of
its listed reporters did not meet the solicitations' qualifications
requirements for experience and certification.
As a general matter, our Office will not question a contracting
officer's nonresponsibility determination unless the protester
demonstrates bad faith by the agency or a lack of any reasonable basis
for the determination. Lithographic Publications, Inc., B-217263, supra.
The determination of a prospective contractor's responsibility is the
duty of the contracting officer who is vested with a wide degree of
discretion and business judgment. We therefore defer to such judgment
and discretion unless the protester, who bears the burden of proof,
shows that it was abused. Id., citing System Development Corp.,
B-212624, Dec. 5, 1983, 83-2 C.P.D. P 644. Here, the protester has
failed to make the necessary showing. As set out above, the contracting
officer made the nonresponsibility determination on the basis of
specific evidence of unsatisfactory performance, lack of financial
responsibility, and the failure to meet the solicitation's
qualifications requirements. Although the protester suggests that these
incidents were due to circumstances beyond its control or were otherwise
justifiable, we think the contracting officer reasonably concluded
otherwise. Thus, based on the record here, the contracting officer had a
reasonable basis to determine that there were serious questions as to
James' ability to meet contract requirements. Id.
Regarding James' allegation of bad faith on the part of the agency,
the protester has the burden of affirmatively proving its case and
unfair or prejudical motives will not be attributed to procurement
officials on the basis of inference or supposition. Id., citing Ted L.
Biddy and Associates, Inc., B-209297.2, Apr. 22, 1983, 83-1 C.P.D. P
441. The thrust of James' allegation is that the agency acted in bad
faith by not affording an opportunity for the protester to explain the
various incidents leading to the nonresponsibility determination.
However, we have specifically stated that, since responsibility
determinations are administrative in nature, they do not require the
procedural due process, such as notice and an opportunity to comment,
which is otherwise necessary in judicial proceedings. System Development
Corp., B-212624, supra. Therefore, a contracting officer may base a
determination of nonresponsibility upon the evidence of record without
affording bidders an opportunity to explain or otherwise defend against
the evidence. Lithographic Publications, Inc., B-217263, supra.
Accordingly, we deny the protests.
Harry R. Van Cleve
General Counsel
FILE: B-220148 DATE: June 6, 1986
MATTER OF: Internal Revenue Service Installation of
Telephone Equipment in Employee Residences.
APPROPRIATIONS - AVAILABILITY - TELEPHONES
Use of appropriated funds by the Internal Revenue Service (IRS) to
install certain telephone equipment in the residences of IRS customer
"assistors" does not violate the prohibition of 31 U.S.C. Sec. 1348(a)(
1) (1982). GAO has recognized the inapplicability of the prohibition
when the telephone service is one of limited use or it is a service
involving numerous safeguards and the separate service is essential.
Equipment to be installed in the residences of IRS customer "assistors"
has no outcall capability and can receive calls only from IRS switching
equipment, making abuse of the system virtually impossible. Also, an
employee's personal telephone cannot be used with the IRS system, making
installation of a separate line essential.
This decision is in response to a request from Mr. John L. Wedick,
Jr., Assistant Commissioner (Planning, Finance, and Research) of the
Internal Revenue Service (IRS). Assistant Commissioner Wedick requests
a decision regarding the propriety of the use of appropriated funds to
install telephones connected to a centralized switching system in the
residences of IRS customer "assistors." For the reasons set forth below,
we conclude that the installation of the telephone equipment in question
would be proper.
The IRS customer "assistors," in whose residences the equipment in
question is to be installed, are intermittent, part-time employees
without set work hours, who respond to telephone inquiries from
taxpayers seeking tax assistance. The proposal would require the
installation of special switching equipment described by the IRS as
follows:
"A necessary part of the assistor's equipment is a !Collins
answering position' connected to a centralized switching system
which feeds the assistor telephone calls. Although such equipment
necessitates telephone installation, the equipment itself is only
capable of functioning when connected to the Collins answering
system. It has no out-call capability; moreover, the only calls
which can be received are calls which overflow from the district
offices and are distributed to the satellite systems on a strictly
random basis, making it impossible for an employee to use the
installed system to place or receive calls of a personal or
non-official nature."
Background: The use of appropriated funds to install telephones in
private residences is prohibited by 31 U.S.C. Sec. 1348(a)(1) (1982):
"Except as provided in this section, appropriations are not
available to install telephones in private residences or for tolls
or other charges for telephone service from private residences."
This statute generally constitutes a mandatory prohibition against the
use of appropriated funds to pay any part of the expense of furnishing
telephone service to an employee in a private residence, without regard
to the desirability of such service from an official standpoint. See,
e.g. 35 Comp. Gen. 28 (1956); 15 Comp. Gen. 885 (1936). We have
invoked the statutory prohibition even when the employees who would use
the telephone service had no office out of which they could work and
were required to work out of their homes. B-130288, February 27, 1957.
See also 26 Comp. Gen. 668 (1947). In a recent decision, we held that
the statutory prohibition applied even when the volume of Government
business effectively precluded the employee's family from using his
personal telephone. 59 Comp. Gen. 723 (1980).
Nonetheless, although generally the statute has been strictly
applied, there have been instances in which we have determined that the
prohibition was not applicable. We have recognized the inapplicability
of the statutory prohibition when the telephone service is one of
limited use or it is a service involving numerous safeguards and the
separate service is essential. See e.g., 32 Comp. Gen. 431 (1953)
(installation of a special telephone in the residence of the Pearl
Harbor fire marshall); B-128114, June 29, 1956 (installation of direct
telephone lines from an Air Force command post to residences of high
officials).
In 61 Comp. Gen. 214 (1982), we approved the installation of Federal
Secure Telephone Services (FSTS) in the residences of certain high level
civilian and military officials to ensure secure communications in
matters involving national security. The FSTS had several unique
features which supported our holding. The telephone required a special
kay and could be programmed to respond only to a user code. The agency
head was to certify that the telephones were to be used for official
business only and the system was subject to audit to ensure that only
official business was transacted. Finally, the system was to be
installed in the residences of relatively few officials whose status
would minimize the likelihood of abuse. In concluding that the
statutory prohibition was not applicable to the installation of FSTS, we
distinguished several previous cases in which the prohibition has been
strictly applied:
"The cited cases, however, including 59 Comp. Gen. 723, supra,
are distinguishable from the proposal under consideration here.
In the first place, no provisions ware made in those cases to
assure that private calls would not be made since the telephones
to be installed in private residences wars no different than those
normally installed for private use. In this case, access and use
will be controlled. Secondly, the telephones in the cited cases,
while desirable from an official standpoint, were, in essence, to
serve as a convenience for the Government officials involved.
This is because official calls to and from the officials'
residences could have been placed and received, if necessary, from
their private telephones, even though this might have caused some
personal inconvenience. Here, the official calls to or from
private residences could not be made over private telephones
because of the need for security."
Analysis: We conclude that the telephone equipment to be installed
in the residences of the IRS "assistors" meets the criteria set forth in
61 Comp. Gen. 214, above, and constitutes the installation of essential
telephone service of limited use and involving numerous safeguards.
Because of the special character of the equipment to be installed, the
possibility of abuse is minimal. The system has no outcall capability
and all incoming calls are through the IRS switching system, making it
impossible for an employee to use the system for non-official purposes.
This same technical electronic exclusivity makes it impossible to
utilize the employee's own telephone to perform the IRS service.
Accordingly, we conclude that the use of appropriated funds to
install telephone lines and equipment in the residences of IRS customer
"assistors" in the circumstances described by Assistant Commissioner
Wedick would be proper.
Comptroller General
of the United States
FILE: B-220146.2 85-2 CPD 597 DATE: November 25, 1985
MATTER OF: Organization Systems Incorporated -- Reconsideration
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTOR
Under Bid Protest Regulations, protest based on information
provided to protester at debriefing must be filed within 10
working days of the debriefing. Protester's apparent belief that
agency had agreed after debriefing to permit protester to file a
detailed protest within 30 days after receiving information
requested under the Freedom of Information Act does not excuse the
protester from compliance with GAO bid protest timeliness
requirements. Bid Protest Regulations provide objective criteria
to be applied to all protests filed with GAO and may not be waived
by actions or representations of a contracting officer.
Organization Systems Incorporated (OSI) requests reconsideration of
our decision, Organization Systems Incorporated, B-220146, Dct. 31,
1985, 85-2 C.P.D. P . In that decision, we dismissed as untimely OSI's
protest against the award of a contract for communications skills
training courses to Behavioral Research Incorporated (BRI) under request
for proposals (RFP) No. M00027-85-R-0027 issued by the United States
Marine Corps (USMC).
We found that OSI's protest allegations that the technical evaluation
board's (TEB) scoring of its technical proposal was incorrect, that the
TEB was prejudiced against OSI and that the TEB improperly downgraded
OSI's proposal on the basis of factors not identified in the RFP were
based entirely on information which it obtained at its debriefing on
July 2, 1985, and not, as OSI alleged, from information received under
its Freedom of Information Act (FOIA) request on August 26, 1985. Thus,
we concluded that OSI's protest of these issues filed with GAO on August
30, 1985, more than 10 working days after it knew its basis of protest
regarding the technical evaluation of OSI's proposal (July 2) was
untimely filed under our Bid Protest Regulations, 4 C.F.R. Sec.
21.2(a)(2) (1985).
We also concluded that OSI's other protest allegations based on BRI's
proposal were untimely. OSI asserted that BRI's proposal contained
misrepresentations of BRI's qualifications to perform the work and that
BRI's proposal did not describe accurately OSI's performance as the
incumbent under the prior contract which OSI asserts prejudiced the TEB
against OSI. However, the record showed that OSI received the BRI
technical proposal on August 1, 1985, and did not initially protest the
issues raised by BRI's proposal with the agency until, at the earliest,
August 19, 1985. Since the apparent protest to the agency was filed
more than 10 working days after OSI knew its basis of protest, we
concluded that the protest was not filed timely with the agency. 4
C.F.R. Sec. 21.2(a)(2) supra. Also, we pointed out that where the
initial protest is filed untimely with the contracting agency, the
subsequent protest to GAO could not be considered. See Emery Worldwide,
B-218440, May 24, 1985, 85-1 C.P.D. P 603.
OSI refers to its letter of July 2, filed after the debriefing, to
the USMC in which OSI stated it would file a detailed protest within 30
days after receiving all information requested under the FOIA. OSI
states that USMC did not object to this request and, thus, it reasonably
believed the 30-day discovery period was acceptable. OSI states that if
this request was not acceptable, USMC had a responsibility to inform
OSI. Under these circumstances, OSI believed that it could delay filing
a protest until it received and considered the FOIA information. OSI
points nut it filed its protest within 3 days of USMC's final response
to OSI's FOIA request.
As we noted above, we found that OSI's protest against the technical
evaluation of OSI's proposal was based entirely on the debriefing of
July 2, 1985. Thus, under our Bid Protest Regulations, OSI was required
to file its protest within 10 working days of that date.
OSI's apparent belief that the agency approved the requested belay
for filing the protest does not excuse OSI from compliance with our bid
protest timeliness requirements. Detroit Broach and Machine, B-213643,
Jan. 5, 1984, 84-1 C.P.D. P 55. We have stated that our Bid Protest
Regulations provide objective criteria for application by our Office to
all protests before us and may not be waived by the actions or
representations of a procuring agency. See Evans, Inc.--Request for
Reconsideration, B-213289.3, Feb. 27, 1984, 84-1 C.P.D. 240; Glatzer
Industries Corp.--Reconsideration, B-209440.2, Mar. 1, 1983, 83-1 C.P.
D. P 211. Furthermore, our regulations have been published in the
Federal Register and the protester is charged with constructive
knowledge of our filing requirements. Shannon County Gas--
Reconsideration, 64 Comp. Gen. 450 (1985), 85-1 C.P.D. P 384.
We affirm our dismissal of the protest.
Harry R. Van Cleve
General Counsel
FILE: B-220146 85-2 CPD 498 DATE: October 31, 1985
MATTER OF: Organization Systems
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTOR
1. Protest based on information provided to protester at
debriefing filed with GAO more than 10 working days after
debriefing is untimely.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - ADVERSE AGENCY ACTION EFFECT - INTERIM APPEALS
TO AGENCY -- EFFECT ON 10 WORKING DAY GAO FILING PERIOD
2. Where initial protest filed with the contracting agency is
untimely because the protest, based on information received under
Freedom of Information Act (FOIA) request, was filed with the
agency more than 10 working days after the protester's receipt of
the FOIA information, subsequent protest to GAO will not be
considered.
Organization Systems Incorporated (OSI) protests against the award of
a contract for communications skills training courses to Behavioral
Research Incorporated (BRI) under request for proposals (RFP) No.
M00027-85-R-0027 issued by the United States Marine Corp (USMC).
OSI argues that USMC's technical evaluation of its proposal was not
consistent with the evaluation criteria contained in the RFP. OSI also
alleges that BRI, in its technical proposal, did not accurately describe
OSI's performance as the incumbent under the prior contract which
allegedly prejudiced USMC's technical evaluation board (TEB) against
OSI. OSI further asserts that BRI's proposal misrepresented BRI's
qualifications and capabilities to perform the work.
Based on information received in the agency report and in the
protester's comments to the agency report, we conclude that OSI's
protest is untimely and dismiss the protest.
On June 24, 1985, USMC notified OSI that award to BRI was to be made
based on initial offers without discussions as permitted under the RFP.
On June 25, 1985, OSI protested the award of the contract, specifically
challenging the USMC decision to award without discussions, and also
questioning the determination to award to BRI because of OSI's "proven"
technical competence as demonstrated by its previous and current
performance of the contract. OSI requested a debriefing and a copy of
BRI's technical and cost proposal. On July 2, 1985, OSI was given a
debriefing by telephone. OSI was advised that it did not receive the
maximum points allowable under the evaluation scheme in five areas: (1)
design, concept of program of instruction, (2) contractor
qualifications, (3) personnel qualifications, (4) knowledge of agency
needs and (5) quality of instruction material. The contracting officer
also explained why OSI lost points under these evaluation factors. By
letter dated July 1, 1985, but actually written after the debriefing,
OSI stated its belief that its agency protest would be resolved in its
favor. OSI further advised that its "detailed protest (would) be
forwarded within 30 days of receiving copies of . . . (documents
concerning the evaluation) "under the Freedom of Information Act (FOIA).
By letter of July 10, 1985 (received by OSI on July 10), the USMC
contracting officer specifically responded to OSI's protest of June 25.
The contracting officer stated that USMC did not believe discussions
were necessary in this case or advantageous to the government. Also,
with regard to OSI's technical competence, USMC stated that the
numerical ratings assigned OSI had been provided to OSI at its
debriefing and that OSI was found acceptable, but that USMC awarded BRI
the contract because its offer was rated the best technically and
offered the lowest price. USMC then thanked OSI for its interest in the
acquisition and stated that it looked forward to OSI's participation in
future procurements. USMC also advised OSI it would release BRI's
technical proposal.
Also, on or about July 19, 1985, OSI received a copy of a letter from
USMC Headquarters, dated July 12, 1985, responding to an inquiry from a
Congressman on behalf of OSI. OSMC advised that it had reviewed OSI's
concerns, and USMC believed its award to BRI was proper. On July 23,
1985, OSI sent a followup letter to the USMC contracting officer
requesting acknowledgment of OSI's July 1 letter and pointing out that
it had not received BRI's technical proposal which USMC had promised to
send OSI. OSI states that, on July 31, USMC acknowledged receipt of
OSI's correspondence dated July 1 and July 23 and that, on August 1, it
received the BRI technical proposal. By letter dated August 19, 1985,
to USMC, OSI renewed its FOIA request and, for the first time, raised
allegations based on BRI's technical proposal. On August 26, 1985, OSI
received more information in response to its FOIA request. On August
30, 1985, OSI filed its protest with GAO.
In its protest filed with our Off ice on August 30, 1985, OSI for the
first time stated its specific bases of protest concerning the technical
evaluation of its proposal. OSI disputes the scoring by the TEB and
argues that it lost points because the TEB was prejudiced against OSI
and downgraded it for factors not identif ied in the RFP. However, its
protest in this regard is based entirely on information which it
obtained at the debriefing and not from information received under its
FOIA request. Thus, OSI was aware of these bases of protest on July 2,
1985, the date of its debriefing. However, the first time OSI raised
these issues was on August 30, in its protest to our Office.
Our Bid Protest Regulations, 4 C.F.R. Sec. 21.2(a) (2) (1985),
provide that a protest, the basis of which is not apparent on the face
of the solicitation, must be filed within 10 working days after the
protester knew or should have known the basis of protest, whichever is
earlier. Here, OSI ciearly knew its basis of protest regarding the
evaluation of its proposal from the debriefing on July 2, 1985, but did
not protest these issues until its filing with this Office on August 30.
Thus, its protest concerning USMC's technical evaluation of OSI's offer
is untimely. Professional Review of Florida, Inc., et al., B-215303.3,
et al., Apr. 5, 1985, 85-1 C.P.D. P 394.
Furthermore, OSI's protest allegations based on BRI's proposal are
also untimely. The record snows that OSI received the BRI technical
proposal on August 1, 1985, but did not raise its concerns about the
alleged misrepresentations contained in BRI's proposal until its August
19, 1985, letter to the USMC. Even assuming this letter constituted a
protest to USMC and that the letter was delivered to USMC on the same
day it is dated, the protest was not filed timely since our Bid Protest
Regulations require that protests be received in our Office or the
contracting agency within 10 working days after the basis of the protest
is known. 4 C.F.R. Sec. 21.2(a)(2), supra. The letter of August 19,
1985, was filed more than 10 working days after OSI received SRI's
technical proposal. Where the initial protest is untimely f iled with
the contracting agency, a subsequent protest to GAO will not be
considered. See Emery Worldwide, B-218440, May 24, 1985, 85-1 C.P.D. P
603.
In considering the timeliness of OSI's protest to our Office, we
recognize that on June 25, 1985, OSI filed a protest with USMC, and OSI
also asserts it filed a protest on July 2 with the agency after the
debriefing. However, in this correspondence, OSI did not protest the
specific issues it raised in its protest with our Office. Thus, these
earlier filings do not affect our decision that the August 30 protest
which states different bases of protest is untimely. Later-raised
allegations must independently satisfy the timeliness requirements
contained in our Bid Protest Regulations, 4 C.F.R. Sec. 21.2(a) (1985).
See Stalker Brothers, Inc., B-217580, Apr. 26, 1985, 85-1 C.P.D. P 476.
Robert M. Strong
Deputy Associate
General Counsel
FILE: B-220144 85-2 CPD 606
DATE: November 26, 1985
MATTER OF: A.B. Dick Company
CONTRACTS - FEDERAL SUPPLY SCHEDULE - PURCHASES FOR SYSTEM -
MULTIPLE-AWARD SHCEDULE CONTRACT - MINIMUM NEEDS REQUIREMENT -
ADMINISTRATIVE DETERMINATION
Protest against the issuance of a delivery order for printing
equipment to multiple award Federal Supply Schedule contractor by
protester with similar schedule contract is denied where the agency
reasonably determined that only on-line equipment would meet its
requirement, after the protester demonstrated its equipment, which was
not on-line.
A.B. Dick Company (A.B. Dick) protests the issuance of delivery order
No. DAKF15-85-F-2077 by Fort Sheridan, Illinois (Army), to Multigraphics
for the lease of printing equipment with an option to purchase. The
order was placed against Multigraphic's General Services Administration
mandatory multiple award Federal Supply Schedule (FSS) contract No.
GS-00F-69801. A.B. Dick has a similar FSS contract.
We deny the protest.
A.B. Dick alleges that the delivery order was issued in violation of
the Federal Acquisition Regulation (FAR), 48 C.F.R. Sections 8.405-1,
10.001, 10.002 and 10.004(b)(4) (1985), because A.B. Dick offered the
Army printing equipment that would meet its needs, is lower in cost, and
is operationally as reliable as any product available. The Army
responds that the A.B. Dick equipment did not meet the government's
minimum needs for an on-line system so it placed the order with
Multigraphics.
Under FAR Section 8.405-1, an agency must place orders against the
multiple award schedules which will result in the lowest overall cost
alternative to meet the needs of the government. See Information
Marketing International, B-216945.2, Sept. 24, 1985, 85-2 C.P.D.
Paragraph 325. The determination of the minimum needs of an agency and
of which products on the FSS meets these needs is properly the
responsibility of the contracting agency. Moreover, government
procurement officials who are familiar with the conditions under which
supplies and equipment have been and will be used are generally in the
best position to know what constitutes their minimum needs. Therefore,
our Office will not question an agency's minimum need determination
unless it clearly involves bad faith or is not based on substantial
evidence. The fact that the protester disagrees with the determination
does not show that it is unreasonable. See A.B. Dick Company, B-219902,
Oct. 17, 1985, 85-2 C.P.D. Paragraph (blank); Lanier Business Products,
Inc., B-212072, Jan. 23, 1984, 84-1 C.P.D. Paragraph 94, Baker
Manufacturing Company, Inc., B-193963, Aug. 6, 1979, 79-2 C. P.D.
Paragraph 82.
A.B. Dick demonstrated its equipment to the Army prior to the
issuance of the delivery order. However, the Army found that the A.B.
Dick system was unsatisfactory because it was not a complete "on-line"
operation. "On-line" means the entire reproduction process from
platemaking to collating can be done without operator intervention. On
A.B. Dick's system, masters have to be manually removed from the
"stand-alone" platemaker and loaded onto the printing unit. The Army
states that a system with a "stand-alone" platemaker does not satisfy
the government's requirements, since it already has two "stand-alone"
platemakers in the plant and requires a more efficient on-line system.
Additionally, the Army found that the Multigraphics on-line system would
most benefit the government because it totally eliminates operator
handling of masters; it has an electronic monitoring system controlling
the entire system; it has a double detection system for paper jams;
and has compatibility with existing systems and supply inventory.
A.B. Dick takes issue with the Army's evaluation of its equipment
citing several instances where the strengths and weaknesses of its
equipment were misrepresented in a technical exhibit attached to the
agency report on the protest. However, this document was the Army's
technical evaluation of A.B. Dick's equipment before it was demonstrated
to the Army. After the demonstration, the alleged misrepresentations of
A.B. Dick's equipment were not the reasons given by the Army for placing
the order with Multigraphics.
While A.B. Dick points out several of its features comparable to the
features found on the Multigraphics system, the fact remains that A.B.
Dick did not offer on-line equipment. The Army reports that eliminating
operator handling of masters through an on-line sytem will improve the
efficiency of the printing. A.B. Dick does not persuasively question
that determination. Therefore we cannot find that the Army's
determination that A.B. Dick's equipment would not meet its minimum need
was unreasonable.
Moreover, A.B. Dick's contention that the delivery order was issued
in violation of part 10 of the FAR is without merit because those
regulations do not apply to orders placed against multiple award
schedules. See FAR, 48 C.F.R. Section 38.102-2; A.B. Dick Company,
B-219808, Oct. 10, 1985, 85-2 C.P.D. Paragraph (blank).
Finally, A.B. Dick requests that we overturn our decisions in A.B.
Dick Company, B-219808, Oct. 10, 1985, 85-2 C.P.D. Paragraph (blank) and
A.B. Dick Company, B-219902, Oct. 17, 1985, 85-2 C.P.D. Paragraph
(blank), which concern certain orders placed by the Air Force for
printing equipment, because of the alleged misrepresentations by the
Army in this case. However, A.B. Dick has not presented any errors of
law made or information not previously considered in our prior
decisions. See 4 C.F.R. Section 21.12 (1985).
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220142 85-2 CPD 567 DATE: November 19, 1985
MATTER OF: Joseph L. DeClerk and Associates, Inc.
DIGEST:
CONTRACTS - PROTESTS - PROCEDURES - INFORMATION DISCLOSURE
1. Protest that contracting agency refused to provide protester
with access to certain documents for development of its protest is
denied. The contracting agency has the primary responsibility for
determining which documents are subject to release under the
Competition in Contracting Act of 1984.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
COMPETITIVE RANGE EXCLUSION - REASONABLENESS
2. Protest against exclusion of proposal from competitive range
is denied where record shows agency's finding that offeror's
technical proposal was unacceptable was reasonable.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
TECHNICAL ACCEPTABILITY - BASED ON CONTENT OF PROPOSAL
3. A technical evaluation must be based on information
contained in the proposal and, consequently, information contained
in a preaward survey is not a substitute for information that
should have been included in an offeror's technical proposal.
CONTRACTS - NEGOTIATION - PREAWARD SURVEYS - PREPARATION - COSTS
4. Protester's claim for costs incurred in participating in
preaward survey because protester subsequently was excluded from
competitive range is denied where decision to conduct preaward
survey has not been shown to be unreasonable. Consistent with
customary agency procedure, contracting officer initiated preaward
surveys on all offerors before establishing competitive range
apparently to avoid possibility of delay in making award because
the preaward survey was not completed.
Joseph L. DeClerk and Associates, Inc. (JDC), protests the exclusion
of its proposal from the competitive range under request for proposals
(RFP) No. DAAB07-85-R-K038 isssued by the Department of the Army. The
RFP solicited a cost-plus-fixed-fee contract for support for the Army
Readiness Directorate's "material fielding" mission to provide Army
units in the field with necessary combat communications electronic
systems.
We deny the protest.
The RFP listed, under the basis for evaluation, factors, subfactors,
and elements to be evaluated, in descending order of importance. The
most important factor was technical and consisted of a technical
approach subfactor. The RFP advised that "the importance of this
subfactor is in excess of that of all other technical subfactors
combined." The technical approach was subdivided into three elements.
The RFP provided that the first element listed, feasibility of approach,
was more important than the other two technical approach
elements--understanding of problems and completeness, combined. The
other three subfactors under technical were personnel, materials and
facilities, and engineering and technical man-hours. The second factor
was cost consisting of two subfactors-- cost proposal and cost realism.
The third factor was management consisting of a subfactor of past
performance.
The source selection evaluation board (SSEB) evaluated technical
proposals and determined that JDC's and two other offers were
technically unacceptable. The contracting officer concurred in this
judgment and excluded JDC's offer from the competitive range. The
contracting officer notified JDC that its proposal was unacceptable in
critical areas and that JDC's offer would not be included in the
competitive range which consisted of two offerors. The SSEB primarily
found JDC unacceptable in the areas of understanding of the problem, and
engineering and technical man-hours. Specifically, the SSEB determined
that JDC had shown only a very general understanding of the material
fielding process, and especially the fielding team chief function, had
indicated no clear understanding of existing material fielding
publications, and, finally, that it failed to adequately show a level of
effort for each individual system listed in the statement of work. The
contracting officer reports that "after full consideration of the
offeror's proposal and the evaluation of SSEB," he found JDC's proposal
technically unacceptable. The contracting officer further determined
that it was not possible for JDC to make its proposal technically
acceptable without major revisions tantamount to submission of a new
proposal.
JDC contends that its technical proposal was improperly evaluated.
It argues that its of fer did not contain major deficiencies and was
acceptable. It states that it could have clarified any problems during
discussions and was arbitrarily determined outside the competitive
range. Furthermore, JDC points to the fact that the contracting officer
ignored the findings of a preaward survey on JDC conducted by the
Defense Contract Administration Services (DCAS) at the contracting
officer's request. JDC asserts that the survey information was relevant
to its acceptability and should have been considered.
Initially, the protester objects to the Army's "sanitized"
administrative report and the Army's decision to withhold from JDC
documents relevant to the protest. The Army released to JDC only the
contracting officer's response to the protest, the Army's legal
memorandum and a technical evaluation of JDC's initial protest letter.
JDC argues that "GAO should strike from the record all portions of the
agency report not furnished to (JDC)." JDC further asserts that
disclosure of documents concerning the Army's technical evaluation of
JDC would not prejudice the Army or any other interested party.
The Army states that it provided the report except for privileged
information, and that the documents at issue were deleted from the
administrative report supplied to the protester in accordance with
applicable agency regulations and the Freedom of Information Act
procedures.
The Competition in Contracting Act of 1984, 31 U.S.C.A. Sec. 3553(f)
(West Supp. 1985), provides in pertinent part that:
"Within such deadlines as the Comptroller General prescribes,
upon request each Federal Agency shall provide to an interested
party any document relevant to a protested procurement action
(including the report required by subsection (b) (2) of this
Section) that would not give the party a competitive advantage and
that the party is otherwise authorized by law to receive."
Clearly, the contracting agency has the primary responsibility for
determining which documents are subject to release under the above
provision. Although the Army has denied JDC access to the documents
related to the evaluation process, the Army has provided all of these
documents to our Office solely for our review. We have honored the
Army's restriction and reviewed the materials in light of the protest
issues raised, but our discussion is necessarily limited because of the
Army's restriction.
Regarding the merits of JDC's protest, the evaluation of technical
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 method of accommodating them. Generally, offers that are
technically 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; Syscon Corp., B-208882,
Mar. 31, 1983, 83-1 C.P.D. P 335.
Further, we have repeatedly held that, in reviewing an agency's
technical 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. Essex Electro Engineers, Inc.; ACL-Filco Corp.,
B-211053.2; B-211053, supra, 84-1 C.P.D. P 74 at 4; Syscon Corp.,
B-208882, supra, 83-1 C.P.D. P 355 at 2; Decilog, B-198614, Sept. 3,
1980, 80-2 C.P.D. P 169. In addition, the protester bears the burden of
showing the agency's evaluation was unreasonable. Essex Electro
Engineers, Inc.; ACL-Filco Corp., B-211053.2, B-211053.3, supra, 84-1
C.P.D. P 74 at 4.
We find that the Army's technical evaluation of JDC's proposal and
exclusion of the proposal from the competitive range were reasonable.
With regard to understanding of the problem, the agency found that in
many instances, JDC "parroted back" in its proposal solicitation
language or language from other Army information. The Army further
reports that JDC's proposal lacked detail and that JDC failed to propose
an approach which was feasible and showed an understanding of the
government's requirements. In this connection, we previously have found
insufficient proposals which contain restatements of specifications or
which lack detail to satisfy an RFP requirement for specific and
detailed responses. See Essex Electro Engineers; ACL-Filco Corp.,
B-211053.2; B-211053.3, supra.
For example, with regard to "pre-fielding" requirements under the
RFP, that is, "preparatory actions taken in preparation for the
eventual. . . fielding events," the Army found that the JDC proposal
called for team chiefs to be located at five dif ferent locations
throughout the United States. The Army reports its experience is that a
substantial amount of prefielding work (preparation) must be handled at
the central command location, and that the statement of work indicated
at least three prefielding tasks which must be handled at the one
location. The Army determined that JDC had not demonstrated who would
handle these tasks.
JDC responds that, through discussions, it would have indicated that
"prefielding actions" were the responsibility of the JDC project manager
and, second, that, notwithstanding the RFP requirements for pref ielding
tasks, prefielding effort has never been part of the contract
requirements previously, that the prefielding effort generally has been
accomplished by government personnel and most of the prefielding has
been completed.
This explanation concerning prefielding matters under the RFP is
stated in JDC's protest letter and was not in its proposal. Thus, by its
protest explanation, JDC indicates that its discussion of prefielding
work in its proposal was not complete and required further explanation.
Under these circumstances, we find that the Army reasonably found JDC's
proposal to be deficient for failing to explain its approach to
prefielding tasks.
The Army also determined that JDC failed to satisfactorily describe
the prefielding and fielding tasks of the project manager and fielding
team chief and the interrelationship of these two positions. The Army
concluded that, because JDC did not specify how it's organization would
execute what JDC proposed, JDC's proposed approach might not be feasible
and contained "high risk."
In this connection, the Army concluded that JDC did not recognize the
importance of fielding team chiefs, which both JDC and the Army
apparently agree is a key to performance of the contract. For example,
the Army notes that, while JDC stated in its proposal that team chiefs
are the key members of the support organization, it failed to
specifically reference them on the organization chart included in JDC's
proposal. JDC responds in its protest that it would have clarified this
omission during discussions. JDC advises that, although the team chiefs
were not identified as such on the chart, the block identified as "JDC
P1" represents the fielding team chiefs. However, on the face of its
initial proposal, JDC's of fer created confusion concerning the team
chief's role and raised questions as to its understanding of the work.
Also, while JDC argues it did not deemphasize the team chief's role
in its proposal, it placed responsibility for material fielding for each
of 61 pieces of equipment on the project manager, not the fielding team
chief. Since, under JDC's approach, the one project manager would be
located at the directorate headquarters, the Army did not find the
proposal adequately explained how the fielding equipment tasks would be
accomplished at the five diverse locations in the United States and
where, precisely, the fielding team chief would fit in and how the
project manager would relate effectively to the fielding team chiefs in
the five locations. While JDC proposed the project manager for 1
manyear, which was the government estimate, the Army's 1 manyear
estimate assumed a greater amount of work would be handled by the
fielding team chiefs rather than the project manager, thus further
reinforcing the Army's concerns about JDC's understanding of the work.
The Army determined JDC's proposal generally unacceptable concerning
the requirement for providing engineering and technical man-hours under
the technical factor. The criteria under this subfactor required
offerors to demonstrate "sufficiency of quoter's estimate of engineering
and technical man-hours required to accomplish the specified program
using his specif ic technical approach." JDC's consolidated man-hour
list repeated the government's estimate of man-hours without showing how
this estimate related to JDC's specific technical approach. JDC does not
respond specifically to this deficiency, but rather asserts that the RFP
did not require a detailed breakout of level of effort for each
individual system listed in the statement of work. Nevertheless, we
think that, in light of the clear RFP requirement for an estimate of
engineering and technical man-hours needed to accomplish the offeror's
technical approach, the Army properly could conclude that a restatement
of the government's estimate did not satisfy this requirement.
Furthermore, such a response reasonably could raise concerns by the SSEB
as to the adequacy of JDC's proposed technical approach since the
man-hours estimated conflicted, in the agency's view, with JDC's
technical approach.
The protester asserts that the deficiencies the Army found in JDC's
proposal could have been resolved through discussions. JDC failed to
properly explain how its organizational approach would perform the
prefielding work adequately, to demonstrate the project manager's and
team chiefs' ability to carry out JDC's approach and to show the
feasibility of its approach through its man-hour estimate. Under these
circumstances, we think the Army reasonably concluded that JDC's
proposal would require major revisions to become technically acceptable
and reasonably excluded the proposal from the competitive range.
The protester also alleges that the Army improperly refused to
consider information obtained from the preaward survey in its technical
evaluation of JDC's proposal, for example, information allegedly
provided to the Army preaward survey team further explaining the
fielding team chief's role. We have stated that 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 adequately written proposal. Numax
Electronics Incorporated, B-210266, May 3, 1983, 83-1 C.P.D. P 470.
Thus, the Army reasonably limited its technical evaluation to the
information provided in JDC's proposal.
JDC claims entitlement to recovery of its proposal preparation costs
for this RFP and the costs of pursuing this protest. Given our
conclusion that the Army properly excluded JDC from the competitive
range, the claim is denied.
JDC also argues that, if we agree with the Army that the preaward
survey was irrelevant to the selection process, and that the contracting
officer unnecessarily subjected JDC to these procedures, we should award
JDC the costs it incurred in participating in the preaward survey.
However, the Army advises that it is its customary procedure to conduct
the preaward surveys before establishing a competitive range of
potential awardees. Apparently, the preaward surveys are conducted at an
early stage to avoid delay in making award because the preaward survey
has not been completed. In our view, the protester has not shown the
agency's action was unreasonable. We deny JDC's claim for the costs of
its participation in the preaward survey.
Harry R. Van Cleve
General Counsel
FILE: B-220141.2 85-2 CPD 711
DATE: December 24, 1985
MATTER OF: Splendid Dry Cleaners
BIDS - EVALUATION - GOVERNMENT EQUIPMENT, ETC. - PROPRIETY OF
EVALUATION
1. Evaluation factors added to the bids of bidders for a
government-owned, contractor-operated (GOCO) laundry facility are not
shown to be prejudicial to GOCO bidders where the record shows that both
the awardee and the second low bidder were GOCO bidders.
SMALL BUSINESS ADMINISTRATION - CONTRACTS - CONTRACTING WITH OTHER
GOVERNMENT AGENCIES - PROCUREMENT UNDER 8(A) PROGRAM - REVIEW BY GAO
2. Section 8(a) of the Small Business Act, 15 U.S.C. Section 637(a)
(1982), authorizes the contracting officer "in his discretion" to enter
into contracts with the Small Business Administration for subcontracting
to 8(a) firms. Accordingly, GAO will not review the agency's decision
not to contract under the 8(a) program when there has been no showing of
possible fraud or bad faith by government officials or that applicable
regulations have been violated.
Splendid Dry Cleaners protests certain alleged improprieties
contained in invitation for bids (IFB) No. DABT01-85-B-5001, issued by
the Department of the Army for laundry services at Fort Rucker, Alabama.
Splendid requests that the solicitiation be canceled and that a new
solicitation be issued limited to competition by socially and
economically disadvantaged small business firms performing the services
in government-owned facilities.
We deny the protest.
The solicitation invited bids based on providing the services either
in government-owned, contractor-operated (GOCO) facilities or in
contractor-owned, contractor-operated (COCO) facilities. Splendid
contends that the solicitation overstates the costs the government will
incur if award is made on a GOCO basis. These costs are added to GOCO
bid prices for evaluation purposes, and this, Splendid argues, favors
bids based on using COCO facilities to the extent that no GOCO bidder
will be able to win a contract under such an evaluation scheme.
Bids were opened on August 30, 1985. Although Splendid's protest to
this Office was dated August 22, it was not received until after bid
opening. Splendid, however, also sent a letter to the contracting
officer which was received prior to bid opening. This letter, dated the
same day as the protest to this Office, asked for clarification of many
portions of the IFB and contended that the evaluation factors were
grossly unfair to GOCO bidders. Splendid requested that the IFB be
canceled and that a new one be issued restricting the competition to
"small minority-owned disadvantaged businesses" that would perform the
services in government facilities.
Splendid essentially contends that the evaluation factors added to
GOCO bids under the IFB prejudice GOCO bidders because it costs the
government the same amount to maintain the GOCO facilities for
mobilization as it does when the facilities are used by the laundry
contractor. Splendid apparently believes that it is improper to add to
the GOCO bids any costs other than those exceeding the costs the
government would incur if the GOCO facilities were not used. To support
its contention, Splendid provides certain GOCO and COCO bid prices for
the similar Fiscal Year 1983 procurement which purport to show that the
government would have saved $15,975 if it had added to the GOCO bids
only the government's costs exceeding those incurred when the facilities
are idle.
We have reviewed the evaluation factors for the previous procurement,
and we have not found that they were unreasonable. These factors are
similar to the ones complained of for the current solicitation. In any
event, the FY 1983 bid prices are irrelevant to the issue that the
present solicitation unduly favors COCO bidders since both the awardee
and the second low bidder under the present solicitation in fact were
GOCO bidders whose bid prices remained low even after the Army applied
the evaluation factors to which Splendid now objects. Accordingly,
Splendid's protest position that the evaluation factors prejudiced GOCO
bidders by overstating the costs to be incurred if the contract were
awarded on a GOCO basis is without merit. Cf. Crown Laundry and
Cleaners, Inc., 64 Comp. Gen. 179 (1985), 85-1 CPD Paragraph 21.
To the extent that Splendid's August 22 letter to the Army asked
other questions regarding the conduct of the procurement, the Army's
administrative report responds to most of these questions. The report
also identifies those remaining questions that can be answered through
information obtained by Splended under the Freedom of Information Act
(FOIA), 5 U.S.C. Section 552 (1982). In this regard, Splendid contends
that all of its questions should have been answered prior to bid
opening, and the firm requests that action on its protest be deferred
for six months to allow sufficient time for it to gather additional
facts to rebut the Army's explanations concerning the conduct of the
procurement.
Since we know of no requirement that an agency answer all questions
asked by a potential bidder prior to bid opening where the IFB apprises
all bidders of the government's needs in a reasonable fashion, which is
clearly the case here, the fact that the Army did not respond to all of
Splendid's concerns prior to bid opening and has not done so now does
not constitute a valid basis for protest. Furthermore, a six-month
extension of time cannot be granted to Splendid for purposes of
obtaining additional information since this would clearly contravene the
CICA, which mandates that final decisions on protests to this Office be
issued within 90 working days from the date the protest is filed. 31
U.S.C.A. Section 3554(a)(1).
With regard to Splendid's request that a new IFB be issued restricted
to competition by socially and economically disadvantaged small
businesses, the Army states that its Small and Disadvantaged Business
Specialist declined to recommend that the procurement be handled in this
manner. Section 8(a) of the Small Business Act, 15 U. S.C. Section
637(a) (1982), authorizes the Small Business Administration (SBA) to
enter into contracts with any government agency with procuring authority
and then to subcontract performance of the contracts to socially and
economically disadvantaged small businesses. The statute also
authorizes the procuring agency's contracting officer to award contracts
to SBA "in his discretion." Welbilt Electronic Die Corp., B-210289, Feb.
1, 1983, 83-1 CPD Paragraph 114. In the light of the broad discretion
given to contracting officers, we do not review decisions not to
contract under the 8(a) program unless there is a showing of possible
fraud or bad faith on the part of the government officials or that
specific regulations have been violated. Id. Splended has not shown
possible fraud or bad faith here and has identified no applicable
regulations that may have been violated. Thus, we have no basis to
question the Army's decision not to effect an 8(a) procurement for these
services. Cf. M&M Fuel Co., B-215472, Aug. 2, 1984, 84-2 CPD Paragraph
147 (review of agency's decision to contract under 8(a) program because
of specific allegation that SBA regulations were violated).
Splendid also requests that it be reimbursed the expenses incurred in
preparation of the bid which it ultimately did not submit for this
procurement and also for the bids it submitted in previous years in
unsuccessful attempts to obtain a laundry contract at Fort Rucker.
Since it has not been shown that the Army violated any applicable
procurement statute or regulations, these costs are not recoverable.
See Kavouras, Inc. -- Reconsideration, B-219510.2, Aug. 30, 1985, 85-2
CPD Paragraph 256.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220141 85-2 CPD 538 DATE: November 12, 1985
MATTER OF: Crown Laundry and Cleaners, Inc.
DIGEST:
CONTRACTS - PROTESTS - INTERESTED PARTY REQUIREMENT - PROTESTOR NOT
IN LINE FOR AWARD
A protester challenging the government's estimates of the costs
to be added to bids for evaluation purposes, in order to equalize
the competition between bids for laundry services to be performed
in GOCO or COCO facilities, is not an interested party where the
protester would not be in line for award even if the bids had been
evaluated using the costs the protester contends reflect the
government's true costs.
Crown Laundry and Cleaners, Inc. protests the terms of invitation for
bids (IFB) No. DABT01-85-B-5001, issued by the Department of the Army
for laundry services at Fort Rucker, Alabama. We dismiss the protest.
The solicitation invited bids based either on providing the services
in government-owned, contractor-operated (GOCO) facilities or in a
contractor-owned, contractor-operated (COCO) facility. Crown's bid was
the only one based on use of COCO facilities and was the third lowest of
six bids received. The low bid was submitted by Robertson-Penn, Inc.
Crown contends that the solicitation understates the costs the
government will incur if award is made on a GOCO basis, which are to be
added to GOCO bid prices for evaluation purposes, and that the costs to
be added to COCO bids are overstated. This, Crown argues, unduly favors
bids based on using GOCO facilities.
We dismiss the protest because Crown is not an "interested party"
within the meaning of our Bid Protest Regulations, 4 C.F.R. Sec. 21.0(
a) (1985). A party is not considered to be interested and entitled to
have its protest resolved on the merits when it would not be in line for
award even if we sustained its protest. Unico, Inc., B-217135, Mar. 8,
1985, 85-1 C.P.D. P 287.
Crown contends that the costs added to the GOCO bids were understated
by $214,405.00 and the costs added to the COCO bid were overstated by
$42,118.00. If we assume that Crown is correct in both cases and revise
the evaluated bid prices of Robertson-Penn and Crown accordingly, Crown
would still not be entitled to the award. 1/ The addition of $214,405.
00 to Robertson-Penn's evaluated bid price of $1,427,245.59 results in a
total of $1,641,650.59. The subtraction of $42,118.00 from Crown's
evaluated bid price of $1,852,663.19 leaves a total of $1,810,545.19,
which is higher by $168,894.60 than Robertson-Penn's price as revised
above.
We recognize Crown's assertion that the amount of the adjustments it
insists should have been made to GOCO bids does not include some utility
costs that Crown believes are underestimated. Specifically, Crown
questions the Army's estimates of steam and electricity costs and
asserts that it appears that the water and sewer usage amounts do not
include personnel usage of water for drinking, washing and toilets.
Crown contends, however, that it cannot confirm its belief that the
costs were understated and cannot calculate the effect of these
omissions because the Army has provided information that is inadequate
for such a determination. Crown requested information under the Freedom
of Information Act (FOIA), 5 U.S.C. Sec. 552 (1982), but argues that the
Army's response is still unsatisfactory. We have held, however, that a
protester's burden of proving its case is not affected by the alleged
failure of an agency to disclose information under FOIA. Newport
Offshore, Ltd.--Reconsideration, B-219031.3, July 12, 1985, 85-2 C.P.D.
P 48. Since Crown has provided no support for its contention that the
utility cost estimates are understated,2/ we have no basis for
concluding that any increase in utility costs would result in Crown
replacing Robertson-Penn as the low bidder.
We do note that Crown also protested the terms of the previous
solicitation for laundry services at Fort Rucker. This protest, which
involved many of the same issues presented here, was denied. See Crown
Laundry and Cleaners, Inc., 64 Comp. Gen. 179 (1985), 85-1 C.P.D. P 21.
During the pendency of this protest, the Army made a determination
that uninterrupted laundry services were essential and then proceeded
with the award to Robertson-Penn. Crown contends that this
determination was improper. We need not consider this contention since,
in view of our decision that Crown is not an interested party, it is
clear that Crown was not prejudiced by the agency's decision in any
event.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
1/ Crown has not challenged the responsiveness and responsibility of
either Robertson-Penn or the second low bidder.
2/ While, with respect to steam usage, Crown does allege that the
estimates are too low based on its own experience and in comparison with
figures obtained from similar operations, the Army states that its
estimates are based on steam production logs from the last operational
period of the facility. Crown asserts that the reported usage must be
inaccurate, but complains that it cannot comment further because the
Army has not provided it with copies of the logs.
FILE: B-220139 85-2 CPD 710
DATE: December 24, 1985
MATTER OF: Tracor Jitco, Inc.
CONTRACTS - PROTESTS - INTERESTED PARTY REQUIREMENT - NONRESPONSIVE
BIDDER
1. Nonresponsive bidder is interested party to file a protest where
it seeks resolicitation of procurement allegedly conducted on basis of
defective specifications and would have the opportunity to rebid if
requirement is resolicited.
BIDS - INVITATION FOR BIDS - CLAUSES - INDEMNITY CLAUSE
2. Solicitation's inclusion of a clause that the contractor will
save the government harmless from liability for damages caused by the
contractor's fault in providing asbestos monitoring services is not a
deviation from the Federal Acquisition Regulation and thus does not
require prior authorization.
BIDS - INVITATION FOR BIDS - CLAUSES - INDEMNITY CLAUSE
3. Solicitation requirement that the contractor save the government
harmless from liability for damages caused by the contractor's fault in
providing asbestos monitoring services is not unduly restrictive of
competition where the protester complains that the clause allocates
overly burdensome risks to the contractor. The contracting agency has
discretion to offer for competition a proposed contract that imposes
maximum risks on the contractor and minimum burdens on the agency.
BIDS - INVITATION FOR BIDS - CLAUSES - INCORPORATION BY REFERENCE -
PROPRIETY
4. Omission of mandatory insurance clause from solicitation may not
be cured under "Christian Doctrine" since that doctrine does not permit
preaward incorporation of a mandatory provision when it has been
inadvertently omitted.
BIDS - INVITATION FOR BIDS - CLAUSES - MANDATORY - OMISSION EFFECT
5. Where mandatory clause is inadvertently omitted from IFB, award
still may be made if it will meet government's actual needs, and no
other bidder was prejudiced by the omission.
Tracor Jitco, Inc. (Tracor), protests an award under Federal Aviation
Administration (FAA) invitation for bids (IFB) No. DTFA07-85-B-00154.
The IFB requested bids for industrial hygienist services during the
removal of asbestos from the Fort Worth Air Route Traffic Control
Center, Texas. These services include asbestos monitoring and
laboratory analyses. The protester basically contends that the IFB
includes an indemnity clause that is unauthorized and allocates
performance risks in such a manner as to unduly restrict competition.
Notwithstanding the protest, the FAA determined the services were
urgently needed and awarded a contract to Normandeau Associates, Inc.
We deny the protest.
As a preliminary matter, the agency contends that Tracor is not an
interested party to raise these issues since Tracor's bid did not
acknowledge a material amendment to the IFB and therefore was rejected
as being nonresponsive. In addition, the bid was the seventh lowest bid
submitted, so that Tracor was not in line for award even had its bid
been responsive. These facts do not preclude Tracor from being
considered an interested party where Tracor seeks resolicitation of the
procurement on the basis of defective specifications, and would have the
opportunity to rebid if the procurement were resolicited. Olympia USA,
Inc., B-216509, Nov. 8, 1984, 84-2 CPD Paragraph 513; Big State
Enterprises, 64 Comp. Gen. 482 (1985), 85-1 CPD Paragraph 459. We
therefore will consider the protest's merits.
The challenged clause reads as follows:
"SAVE HARMLESS AND INDEMNITY AGREEMENT
The Contractor shall save and keep harmless and shall indemnify
the Government against any and all liability, claims, demands and
costs, of whatever kind and nature, for injury to or death of any
person or persons and for loss or damage to any property
(Government or otherwise) occurring in connection with or in any
way incident to or arising out of performance of this contract
which result in whole or in part from the fault or negligence of
the Contractor, or any subcontractor, or any employee, agent, or
representative of the Contractor or any subcontractor."
Tracor correctly observes that the indemnity clause is not a standard
clause authorized by the Federal Acquisition Regulation (FAR), 48 C.F.R.
Parts 1 through 52 (1984), and argues that the use of the clause is
inconsistent with the FAR. The protester maintains that the clause
significantly expands the scope of a contractor's liability under
standard FAR clauses by requiring the contractor to assume the risk of
liability for all damages caused in part by the contractor regardless of
whether the contractor was the predominant cause. In this regard,
Tracor notes that the IFB's clause "Protection of Government Buildings,
Equipment, and Vegetation" (required to be included in solicitations for
services at government installations) imposes liability for damage to
government property only where caused by the contractor's failure to use
reasonable care. FAR, 48 C.F.R. Section 52.237-2. Also, the clause
"Limitation of Liability -- Services" (required to be included in
service contracts over $25,000) ends the contractor's liability for the
loss of or damage to government property when the government accepts
work performed under the contract. FAR, 48 C.F.R. Section 52.246-25.
Tracor contends that the indemnity clause constitutes a "deviation"
from the FAR, since that term is defined by FAR, 48 C.F.R. Section
1.401(a), to include the use of a solicitation provision that is
inconsistent with the FAR. A deviation requires special authorization
under FAR, 48 C.F.R. Section 1.403 or Section 1.404 (pertaining to
individual and class deviations, respectively), from the head of the
agency or his designee. Tracor asserts that the agency's failure to
obtain such authorization therefore precludes the use of the clause.
Unlike these FAR clauses, which impose liability on the contractor
where the contractor has failed to use reasonable care or up to the
point of acceptance of the work, the challenged clause literally seems
to impose liability for loss or damage beyond the point of acceptance
and whenever the loss is due to the contractor's "fault." Whether this
clause would in fact be interpreted in this way we need not decide,
however, because even if the protester's interpretation is correct we
are not persuaded that the clause is inconsistent with the FAR. The FAR
clauses that the protester cites as establishing limitations on a
contractor's liability are mandatory clauses, applicable to a broad
variety of contracts, for the purpose of protecting the government
against foreseeable potential damage to government property. They
reflect a stated general policy that the government will act as
self-insurer by relieving contractors of liability for loss or damage to
government property that results from defective services and occurs
after acceptance of the services except when contractor liability can be
preserved without increasing the contract price. FAR, 48 C.F.R.
Section 46.803. At the same time, the FAR recognizes that at times it
may be appropriate to provide for greater protection to the government.
For example, the FAR contemplates that the standard warranty clauses may
not be appropriate for every situation, and therefore a contracting
officer, in accordance with agency procedures, may use a warranty that
varies from standard warranty clauses in the FAR. FAR, 48 C.F.R.
subpart 46.7. We believe that the indemnity clause protecting the
government against a particular harm, not generally contemplated by the
FAR, is not a deviation.
Tracor also argues that the indemnity clause is overly burdensome and
unduly restricts competition since it requires the bidder to assume the
risk of potential liability without regard to the extent the contractor
is at fault, and because insurance companies allegedly are not writing
new policies providing coverage for liability related to asbestos
exposure.
The determination of the needs of the government and the best method
of fulfilling those needs is primarily the responsibility of the
contracting agency. We will not question the agency's determination
unless it is shown to be unreasonable. Logistical Support, Inc.,
B-212218 et al., Feb. 23, 1984, 84-1 CPD Paragraph 231. We believe the
protester has failed to show that the FAA's use of the indemnity clause
is unreasonable.
The use of such a clause is not uncommon. While Tracor maintains
that the clause requires the contractor to assume full liability where
its fault or negligence contributes only 1 percent of the cause of
damage and the government's fault the remaining 99 percent, the
protester has presented no evidence that such an indemnity clause has
been construed to impose full liability on a contractor where its fault
was not the predominant cause of damage. Furthermore, as regards the
risk of liability without insurance, the mere presence of risk in a
solicitation does not make the solicitation inappropriate or improper.
Starlite Services, Inc., B-219418, Oct. 15, 1985, 85-2 CPD Paragraph
410. It is within the agency's discretion to offer for competition a
proposed contract that imposes maximum risk on the contractor and
minimum burdens on the agency. Massman Constru. Co., B-204196, June 25,
1982, 82-1 CPD Paragraph 624. We also note the fact that 9 other firms
submitted bids, which suggests that the clause was not so burdensome as
to preclude competition.
Tracor also contends that the solicitation is defective because the
required clause captioned "Insurance -- Work on a Government
Installation," FAR, 48 C.F.R. Section 52.228-5, was not included in the
IFB. Tracor does not contend that it was prejudiced by the omission,
but expresses concern whether the FAA, in determining the awardee
responsible, considered whether the awardee was covered by adequate
insurance to protect the government's rights under the indemnity clause.
The agency admits that the clause is needed and requests that it be
read into the contract by operation of law as in G.L. Christian and
Associates v. United States, 312 F.2d 418 (Ct. Cl. 1963).
We agree that the "Christian Doctrine" calls for the incorporation of
certain mandatory contract provisions into otherwise properly awarded
government contracts. However, we must still consider the effect of the
omission of the clause on the competition because the doctrine cannot be
used to incorporate mandatory provisions into an IFB before award when
they have been inadvertently omitted, Rainbow Roofing, Inc., 63 Comp.
Gen. 452 (1984), 84-1 CPD Paragraph 676. We conclude that the IFB was
defective because it did not contain a mandatory clause. Linda Vista
Industries, Inc., B-214447 et al., Oct. 2, 1984, 84-2 CPD Paragraph
380. The mere fact that an IFB is defective, however, does not mean
that it need be canceled. Where an award under the IFB would serve the
actual needs of the government and would not prejudice other bidders,
cancellation and resoliciation is inappropriate. Id. The FAA has
submitted a copy of an insurance provider's statement, dated before
award, indicating that the required insurance had been or would be
issued to the awardee. Thus, we do not believe that the omission of the
insurance clause was prejudicial to the other bidders. The protester
does not even allege that it would have been able to submit a lower bid
if it had to obtain insurance coverage. We therefore believe the award
was proper.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220136 85-2 CPD 709
DATE: December 24, 1985
MATTER OF: BRD Associates
CONTRACTS - REQUEST FOR QUOTATIONS - PURCHASES ON BASIS OF QUOTATIONS
- EVALUATION PROPRIETY
1. Contracting agency's determination to reject protester's
quotation was not unreasonable where request for quotations required
polypropylene fabric, but protester's offer of olefin fabric and
subsequent clarification left doubt that polypropylene fabric would be
furnished.
CONTRACTS - REQUEST FOR QUOTATIONS - PURCHASES ON BASIS OF QUOTATIONS
2. Failure to complete in quotation sections on equal opportunity,
affirmative action, and price representation is not significant because
quotation price is below dollar amount that makes equal opportunity
section applicable and affirmative action section and price
representation section are only informational.
CONTRACTS - REQUEST FOR QUOTATIONS - PURCHASES ON BASIS OF QUOTATIONS
3. Issues as to contractor's rapid performance under contract,
agency's delay in informing protester of contract award and alleged
factual errors by agency in reporting dates and times of phone calls to
protester will not be considered, since issues do not affect the
validity of the award.
BRD Associates (BRD) protests the award of a purchase order for
wrapped edge polypropylene fabric panels to Performance Contracting,
Inc. (Performance), under request for quotations (RFQ) No.
N66001-85-Q-0199/EF, issued by the Naval Ocean Systems Center, San
Diego, California (Navy).
BRD essentially questions the Navy's technical evaluation of its
quotation. We deny BRD's protest.
It is not the function of our Office to evaluate technical
submissions made to the government by competing firms. See Leo Kanner
Associates, B-213520, Mar. 13, 1984, 84-1 C.P.D. Paragraph 299. The
determination of the merits of these technical submissions is the
responsibility of the contracting agency which has considerable
discretion in making that determination. Consequently, we will not
question an agency's technical evaluation unless the protester shows
that the agency's judgment was unreasonable or in violation of the laws
and regulations. See Science Information Services, Inc., B-207149.2,
Nov. 29, 1982, 82-2 C.P.D. Paragraph 477. Based on our review of the
record, discussed below, BRD has not shown that the Navy's technical
evaluation of its proposal was unreasonable.
The RFQ states that, "if other than brand name is quoted, furnish
specification sheet and the brand name for technical evaluation."
However, the RFQ inadvertently omitted a brand name. Nevertheless, BRD
submitted a sample and a specification sheet for evaluation. The Navy's
technical evaluator noted that BRD described its proposed fabric as
having a "wrap" of "continuous filament olefin" and having a "shute" of
"continuous filament olefin with nylon." Given this description, the
evaluator concluded that BRD's sample did not conform to the requirement
for polypropylene fabric.
The contracting officer attempted to clarify the technical
nonacceptability by phoning BRD and requesting clarification as to the
chemical properties/composition of the sample submitted. The
contracting officer reports that BRD stated that its sample was 100
percent polypropylene, because olefin and polypropylene are the same
thing -- a technical statement that the Navy's technician disputes. The
Navy decided to reject BRD's low quotation because the "BRD submittals
did not clearly show that BRD's material met the stated salient
characteristics." The contracting officer awarded the contract to
Performance, the next lowest technically acceptable quoter. Performance
completed delivery of the fabric about a month later.
BRD notes that the information sheet which it submitted to the Navy
clearly stated that its fabric was polypropylene. However, BRD does not
deny that it also proposed an olefin wrap and an olefin with nylon
shute.
As to the statement about olefin, BRD does not deny that, at the time
the contracting officer sought technical clarification, BRD informed the
Navy that olefin and polypropylene are the same thing -- a statement
which BRD implicitly concedes is not precise, for BRD now admits that
not all olefins are polypropylenes. Consequently, BRD has not shown
that the Navy unreasonably considered the company's explanation of its
quotation to be, at a minimum, ambiguous as to BRD's actual intent to
furnish polypropylene wrap instread of another oletin material which was
not polypropylene. Further, given BRD's insistence on affirming its
ambiguous statement at the time the awardee was being determined, we
cannot conclude that the Navy unreasonably decided to forego further
questioning of BRD about the fabric BRD was actually going to furnish.
As to BRD's statement about a nylon shute, BRD argues that the RFQ:
"did not indicate 100 percent polypropylene. . . . That is a term
. . . used exclusively by the Owens Corning specification sheets.
. . ."
Nevertheless, since the RFQ expressly stipulates that the fabric be
polypropylene, the reasonable inference from the RFQ requirement is that
only polypropylene fabric is to be proposed -- contrary to what BRD
proposed for the shute.
Given the above analysis, we cannot conclude that BRD has shown that
the Navy's technical evaluation of its quotation was unreasonable.
Besides this main issue, BRD has noted in its comments on the Navy's
report that in its quotation Performance did not complete the sections
on price representation, equal opportunity and affirmative action.
Performance's quotation of $22,320 is not subject to the equal
opportunity section. The section states that it is applicable to offers
of $50,000 or more. Thus, Performance was not required to complete the
section.
As to the affirmative action section, it is merely for informational
purposes (representations regarding the quoter's previous contracts
subject to affirmative action requirements and current affirmative
action programs on file) and does not purport to bind the quoter to any
course of action or other obligation. Consequently, the section may be
completed after quotations are received. Borinquen Bus Service, Inc.,
B-190395, Apr. 17, 1978, 78-1 C.P.D. Paragraph 292.
As to Performance's failure to complete the price representation
section (which asks whether the quotation price is based on a published
price, price charged other customers or other basis), we do not consider
this omission to be significant, since the procurement is competitive
and the section is also for informational purposes.
Finally, BRD raises other protest issues, namely: (1) the
contractor's "rapid delivery response" under the contract; (2) the
delay in receiving notice of award until nearly 2 weeks after award;
and (3) alleged errors as to dates and times of the Navy's reported
phone calls to the protester. However, none of these issues, even if
resolved in the protester's favor, affect the validity of the award.
Consequently, we will not consider these issues.
Harry R. Van Cleve
General Counsel
FILE: B-220133 DATE: March 13, 1986
MATTER OF: Robert F. Novak - Real Estate Expenses - Loan
Origination Fee - Mortgage Discount
DIGEST:
OFFICERS AND EMPLOYEES - TRANSFERS - REAL ESTATE EXPENSES - LOAN
ORIGINATION FEE
In connection with his purchase of a house at his new duty
station, a transferred employee was advised that he would have to
pay a 3 percent loan origination fee. However, at the closing the
fee was stated and collected as a 1 percent loan origination fee
and a 2 percent discount fee. The agency permitted reimbursement
of only the 1 percent fee. Since HUD states that the customary and
reasonable rate for a loan origination fee is 3 percent; since
there is no indication that the interest rate on the employee's
mortgage was adjusted downward upon payment of the 2 percent fee;
and since both the lending institution and the settlement agent
state that the percentage split is solely a function of the
lender's accounting method, we find that the 2 percent fee is not
a finance charge. Therefore, the employee is entitled to recover
the additional 2 percent fee to the extent his total recovery will
not exceed the statutory limit.
Conrad R. Hoffman, Director, Office of Budget and Finance, Veterans
Administration (VA), requests our decision concerning Mr. Robert F.
Novak's reclaim for a 2 percent fee classified by the employee as a
"loan origination fee." For the reasons stated below, we find that the 2
percent fee does represent a part of the loan origination fee and Mr.
Novak may be reimbursed to the extent that his recovery will not exceed
the statutory limit.
BACKGROUND
Effective April 2, 1984, Mr. Novak was transferred from Marion,
Indiana, to Butler, Pennsylvania, where he purchased a new home for
$48,000. Incident to his transfer and subsequent purchase, Mr. Novak
submitted an application for reimbursement of real estate expenses in
the amount of $3,033.50. However, his gross recovery was only $2,079.50
of the $3,033.50 claimed. Mr. Novak's only challenge to the
reimbursement amount concerns the loan origination fee. 1/
When Mr. Novak entered into a conventional loan agreement with
Merrill Lynch Mortgage Corporation (Merrill Lynch), he was informed that
a 3 percent loan origination fee of $1,365 was required. Nonetheless,
at the time of closing on November 30, 1984, Merrill Lynch requested
that the $1,365 be collected as a 1 percent origination fee of $455 and
a 2 percent discount fee of $910. The Disclosure/ Settlement Statement
lists item No. 801 as a loan origination fee of "1%," and item No. 802
as a loan discount of "2%."
The VA reimbursed Mr. Novak for the 1 percent loan origination fee of
$455, apparently concluding that the discount fee represented a
nonrecoverable finance charge. In suspending reimbursement for the
additional 2 percent, the agency did acknowledge that the Pittsburgh,
Pennsylvania, Office of the Department of Housing and Urban Development
(HUD) reported that a 3 percent loan origination fee is reasonable and
customary for the Butler area. It nevertheless accepted Pittsburgh HUD's
ambiguous instruction that the term "loan origination fee" as used by
conventional lenders is not necessarily synonymous with that term as
used by government-supported lenders in concluding that the discount fee
was a nonreimbursable finance charge. The agency also noted that none of
the information provided lists the percentage rate for the
administrative costs incurred in processing the loan.
Mr. Novak reclaimed reimbursement for the disallowed 2 percent fee.
He asserts that discount fees normally apply to VA loans, and since he
secured a conventional loan, the 2 percent could only represent a part
of the reimbursable loan origination fee. In addition, Mr. Novak
submitted correspondence from both Merrill Lynch and the settlement
agent, Lawyer's Abstract Company, which states that the percentage split
is purely an internal function of Merrill Lynch's accounting method;
Merrill Lynch's home office accounting department requires the division
to determine the respective amounts to credit the home and branch
offices. Further, Mr. Novak submitted the Pittsburgh HUD office letter
stating that a 3 percent loan origination fee for a conventional home
mortgage is reasonable and customary for the area.
Against this background, the VA questions whether Mr. Novak may
recover an amount in excess of the 1 percent loan origination fee
already remitted.
DISCUSSION
Under 5 U.S.C. Sec. 5724a(a) (4) (1982), an employee may be
reimbursed for expenses incurred in the sale and/or purchase of a
residence pursuant to a permanent change of duty station. Effective
October 1, 1982, the implementing regulations were amended to permit
reimbursement for loan origination fees. Specifically, para. 2-6.2d of
the Federal Travel Regulations, FPMR 101-7 (Supp. 4, August 23, 1982),
incorp. by ref., 41 C.F.R. Sec. 101-7.003 (1983) (FTR), was altered to
read, in relevant part, as follows:
"d. Miscellaneous expenses.
"(1) Reimbursable items. The expenses listed below are
reimbursable in connection with the sale and/or purchase of a
residence, provided they are customarily paid by the seller of a
residence in the locality of the old official station or by the
purchaser of a residence at the new official station to the extent
they do not exceed amounts customarily paid in the locality of the
residence.
* * * * *
"(b) loan origination fee;
* * * * *
"(2) Nonreimbursable items. Except as otherwise provided in
(1), above, the following items of expense are not reimbursable.
* * * * *
"(b) interest on loans, points, and mortgage discounts; * *
*."
In commentary accompanying the amended provisions of FTR para.
2-6.2d, the General Services Administration explained that the term
"loan origination fee" refers to a lender's administrative expenses in
processing a loan. 47 Fed. Reg. 44,566 (1982). Similarly, we have held
that the term "loan origination fee" as used in FTR para. 2-6.2d(1) (b),
refers to a fee which is assessed on a percentage-rate basis to
compensate the lender for expenses of originating the loan, processing
documents, and related work. See Robert E. Kigerl, 62 Comp. Gen. 534
(1983); 62 Comp. Gen. 456 (1983). Furthermore, we recently noted that
the term "loan origination fee" has been used by lending institutions
not only to refer to a charge for administrative expenses, but also to
mortgage discounts or "points." Roger J. Salem, 63 Comp. Gen. 456, 458
(1984). Simply stated, the discount represents prepaid interest and is
intended to compensate the lender for the fact that the interest rate on
the mortgage is lower than that available from alternative investment
opportunities.
Consistent with the well-established policy prohibiting payment of
interest expenses, the provisions of FTR para. 2-6.2d(2)(b) supra,
expressly preclude reimbursement for interest, points, and mortgage
discounts. Based on this specific prohibition, we have disallowed
reimbursement for any charge that represents a mortgage discount. See,
e.g., Mark W. Spaulding, B-214757, September 5, 1984; 63 Comp. Gen. at
458.
However, in Mr. Novak's situation, we find that the 2 percent fee
must be regarded as a reimbursable loan origination fee rather than a
mortgage discount. In short, the record amply demonstrates that the 2
percent fee is not a finance charge.
We have already, in effect, held that we will not be bound by a
lending institution's characterization of a particular payment. See
Roger J. Salem, 63 Comp. Gen. at 458. Thus, the conclusion that the 2
percent fee in question is in fact a discount fee does not necessarily
follow simply because the Disclosure/Settlement Statement denominates it
as such. Moreover, the record reveals several factors that strongly
support Mr. Novak's claim that the 2 percent discount fee is actually
part of the loan origination fee.
In contrast to the vast majority of cases where similar claims have
been denied, there is nothing in the file that indicates that the
interest rate on Mr. Novak's mortgage was adjusted downward once the
$910 fee was paid. See, e.g., Christopher P. Jolly, B-217081, March 8,
1985. We note here, as we did in Jolly, B-217081, supra, that this lack
of evidence does not mean that the entire fee is reimbursable. FTR para.
2-6.2(d)(1) limits reimbursement for loan origination fees to the amount
customarily charged in the area of the employee's new residence. The
record, even on this point, clearly favors Mr. Novak. It is well
established that the rate provided by the local HUD office gives rise to
a rebuttable presumption as to the amount customarily charged. See,
e.g., Jolly, B-217081, supra. According to a letter written by the
Pittsburgh HUD office, the customary and reasonable loan origination fee
for the Butler, Pennsylvania, area is the exact amount claimed by Mr.
Novak, 3 percent. 2/
In addition, there is no confirmation by the lending institution that
the 2 percent fee represents an interest charge. Cf. Barry C. Nilson,
B-218946, November 12, 1985. On the contrary, letters from both Merrill
Lynch and the Lawyer's Abstract Company state that the 2 percent fee is
a part of the loan origination fee; the percentage split is due solely
to Merrill Lynch's accounting system.
While noting that Mr. Novak is incorrect in his assertion that
discount fees do not normally apply to conventional loans, we
nevertheless find, based on the foregoing evidence, that the 2 percent
fee is not a finance charge, rather it is a part of the loan origination
fee. Thus, Mr. Novak is entitled to reimbursement for the 2 percent fee.
However, we must limit his recovery to $320.50.
Under 5 U.S.C. Sec. 5724a(a)(4) (Supp. I 1983), an employee may be
reimbursed for expenses incurred in purchasing a residence pursuant to a
permanent change of station, but that reimbursement cannot exceed 5
percent of the purchase price or $7,500, whichever is less. 5 U.S.C.
Sec. 5724a(a) (4) (B)(ii) (Supp. I 1983). In Mr. Novak's case, 5 percent
of the $48,000 purchase price, $2,400, is the statutory ceiling on his
recovery and, because he has already received $2,079.50, Mr. Novak is
not entitled to recover an amount exceeding $320.50. Patricia A.
Grablin, B-211310, October 4, 1983.
Comptroller General
of the United States
1/ The VA's denial of a $10 Airborne fee and a $34 tax service fee
was properly accepted by Mr. Novak and is not at issue here.
2/ Further, we note the instances in which we have permitted the
recovery of loan origination fees based only on HUD's statement of the
customary rate. See Thompson and LoSoya, B-217603, B-217584, September
4, 1985.
FILE: B-220132 85-2 CPD 605
DATE: November 26, 1985
MATTER OF: NJCT Corporation
CONTRACTS - FEDERAL SUPPLY SCHEDULE - PURCHASE FOR SYSTEM -
MULTIPLE-AWARD SCHEDULE CONTRACTS - MINIMUM NEEDS REQUIREMENTS -
ADMINISTRATIVE DETERMINATION
1. GAO will not object to an agency's determination that an offered
product does not meet its minimum needs unless the determination is
unreasonable. Where the protester's descriptive literature submitted
with its price quotes shows that the product it is offering does not
meet the agency's stated salient requirements, the agency properly may
reject the protester's quotes. Moreover, the offeror's blanket
statement of compliance with all requirements does not make the offer
acceptable.
CONTRACTS - REQUESTS FOR QUOTATIONS - SPECIFICATIONS - BRAND NAME OR
EQUAL - "EQUAL" PRODUCT EVALUATION
2. When a design feature, such as size or weight, is specified as a
salient characteristic, a product offered as being equal to a stated
brand name must meet that characteristic precisely.
CONTRACTS - FEDERAL SUPPLY SCHEDULE - MULTIPLE SUPPLIERS - AGENCY
ISSUANCE OF A REQUEST FORQUOTATIONS - EVALUATION PROPRIETY
3. Where it is necessary, an agency properly may obtain additional
technical information from a Federal Supply Schedule offeror beyond what
the offeror furnishes along with its response to the agency's request
for schedule price quotation.
CONTRACTS - REQUESTS FOR QUOTATIONS - SPECIFICATIONS - BRAND NAME OR
EQUAL - "EQUAL" PRODUCT EVALUATION
4. Protester's offered product should not have been rejected for
failing to meet a certain salient feature where the offered product of
the awardee also did not meet this feature. However, rejection for this
reason did not prejudice protester, and thus is not cause for disturbing
the award, since protester's offered product was rejected for other
valid reasons.
NJCT Corporation protests the Department of the Army's issuance of a
delivery order to Johnson-Lancaster, Inc. for an automatic dishwasher
under the General Services Administration Federal Supply Schedule (FSS).
We deny the protest in part and dismiss it in part.
Before placing the delivery order, the Army issued a request for
quotations (RFQ) to FSS vendors on the multiple award FSS for food
service equipment, specifying a Hobart C-Line automatic rack conveyor
dishwasher or equal. The RFQ listed 10 salient characteristics that the
equal product had to have and asked vendors to submit technical
literature for evaluation. NJCT, along with its price quotations,
submitted standard technical brochures for the Champion PR-36 model
dishwasher and the Vulcan A64 model dishwasher.
The Army evaluated the seven responses it received to the RFQ, and
found NJCT's quotes for the Champion and Vulcan models lower than
Johnson-Lancaster's quote for the Stero SCT-90 model dishwasher. The
agency, relying on the brochures furnished by NJCT, found unacceptable
both the Champion and Vulcan models offered by the company because they
lacked a number of the required features. For example, neither model
had the floor clearance required by the RFQ. Johnson-Lancaster's
offered model was found to meet all the RFQ's salient characteristics,
and an order was placed under that firm's FSS contract.
NJCT contends that the Champion and Vulcan dishwashers it offered did
meet the RFQ requirements. The company argues that certain errors were
made by the Army in evaluating its technical data. NJCT also argues
that its technical data established that its offered Champion equipment
would meet all salient requirements by the statement therein that
optional model accessories would be furnished "when specified."
The Army argues that NJCT has failed to prove that its evaluation of
NJCT's technical literature was unreasonable. The agency states that
NJCT's Champion dishwasher, in addition to not having 10 racks, had only
a 14 gauge stainless steel tank rather than 16 gauge as specified in the
RFQ. Also, the required floor clearance, as stated in the RFQ's salient
characteristics, was 8-1/2 inches, but the clearance for NJCT's Champion
model was only 6 inches. The Army further states that NJCT's literature
failed to include any information regarding whether the dishwasher met
salient characteristics for steam pressure and whether the dishwasher
had a table limit switch.
As to the Vulcan model that NJCT offered, the Army states that
besides not having 10 racks, its racks did not meet the RFQ's
dimensional requirements. The Army further states that the RFQ's
prewash pump motor requirement was for 1-1/2 horsepower motor, but the
literature provided by NJCT stated that such a motor was not available.
Finally, the Army states that like the Champion model NJCT offered, the
floor clearance for the Vulcan model dishwasher was less than 8-1/2
inches.
Federal agencies must procure from a multiple-award FSS at the lowest
price consistent with their minimum needs. American Sterilizer Co.,
B-212933, Jan. 26, 1984, 84-1 C.P.D. Paragraph 122. The determination
as to which offered products meet those needs is primarily within the
jurisdiction of the procuring agency, and we will not interfere unless
the determination is shown to be unreasonable. See Quest Electronics,
B-193541, Mar. 27, 1979, 79-1 C.P.D. Paragraph 205.
We cannot find that the Army's determinations regarding the
unacceptability of NJCT's offered products were unreasonable. In
general, where a protester's descriptive literature shows that its
product fails to conform to stated salient characteristics, the offer
properly must be rejected. See Jensen Corp., B-216746, Jan. 17, 1985,
85-1 C.P.D. Paragraph 49. NJCT has provided us with no evidence or
argument to dispute the Army's finding that the Champion model
dishwasher it offered had less than the required number of racks and had
less than the required floor clearance. Indeed, NJCT indicates in its
comments on the Army's protest report that the model has 8 racks and a
floor clearance of 7 inches. Further, NJCT admits that the tank on the
Champion model is 14 gauge stainless steel rather than the required 16
gauge steel. In addition, NJCT has provided us with nothing that would
show that the Army, in evaluating the firm's offer, unreasonably relied
on the literature's failure to include information on steam pressure and
whether the Champion model had a table limit switch.
With regard to the Vulcan model that NJCT offered, the company argued
without any support in its protest letter that the "model matches the
dimensions in the specifications." NJCT made no mention of the size of
the prewash pump motor and the floor clearance of the Vulcan model. In
its comments on the Army's protest report, NJCT makes no argument at all
regarding the acceptability of the Vulcan model. Where an agency
specifically rebuts issues raised in the initial protest and the
protester fails to comment on the agency's rebuttal in its comment, we
will consider these issues to have been abandoned by the protester.
Radionic Hi-Tech, Inc., B-219116, Aug. 26, 1985, 85-2 C.P.D. Paragraph
230. In any event, NJCT simply has failed to prove that the Army's
evaluation of its literature on the Vulcan model dishwasher was
unreasonable.
NJCT also contends that it is not necessary that an equal item have
the same design characteristics as the brand name item and, therefore,
the contracting agency cannot conclude that differences in design
characteristics automatically make a product not equal. We, in fact,
have held that when a salient characteristic is stated in general terms,
the equal product need not meet the characteristic exactly as the brand
name product does; it need only be functionally equivalent to the brand
name in meeting that characteristic. Cohu, Inc., B-199551, Mar. 18,
1981, 81-1 C.P.D. Paragraph 207. Here, however, the RFQ set forth in
very specific terms the design features that the equal product had to
meet. When a design feature, such as size or weight, is specified, the
equal product must meet that requirement precisely. Id.
Accordingly, we have no legal basis to object to the Army's
evaluation of NJCT's offers. In this respect, it is not relevant that
NJCT's technical literature for the Champion dishwasher states that
option model accessories would be furnished when specified. A blanket
statement of compliance is not sufficient to cure descriptive literature
that fails to meet salient requirements. R.A. Miller Industries, Inc.,
B-215084, Sept. 24, 1984, 84-2 C.P.D. Paragraph 332.
NJCT also protests that Johnson-Lancaster's offer should not have
been accepted. NJCT argues that Johnson-Lancaster submitted no
appropriate literature on the Stero SCT-90 model dishwasher, because the
literature submitted was on the Stero ST 76 model instead. NJCT further
contends that the ST76 literature shows that the dishwasher should have
been found to be noncompliant with the RFQ's salient characteristics
because: (1) the frame and feet are not stainless steel, (2) the
machine's voltage does not range between 200 and 230, (3) steam pressure
and pounds of steam per hour are not indicated, (4) the prewash motor is
less than 1-1/2 horsepower, (5) common drains and exhaust vent hoods are
optional features, and (6) there are only 7 racks.
From our review of the literature submitted by Johnson-Lancaster, we
find no support for NJCT's arguments. While the literature submitted by
Johnson-Lancaster was for the Stero ST 76 model, the company attached a
note that stated that the SCT-90 was similar to the ST76, the
differences being the SCT-90 is 90 inches with a 1-1/2 horsepower
scrapper (prewash motor) and a 2 horsepower wash. In our opinion, it
was reasonable for the Army to assume that, except for the differences
outlined by Johnson-Lancaster, the technical literature on the ST 76
also described the SCT-90.
As to the precise deficiencies alleged by NJCT, Johnson-Lancaster's
literature specifically states that the feet of the offered dishwasher
are stainless steel and that a stainless steel frame is optional. The
literature also indicates that the machine's voltage is in the required
range. Still further, the literature shows a steam pressure of 20
pounds flowing with a maximum steam consumption of 417 gallons an hour.
Common drains, vent hoods, and stainless steel frame are shown on
Johnson-Lancaster's literature as optional items.
NJCT further complains that Johnson-Lancaster was given an
opportunity to explain the technical literature it submitted in response
to the RFQ, particularly with respect to features described in the
literature as optional, but NJCT was not afforded the same benefit of
explanation.
We see nothing objectionable in the Army's apparent verification that
the features noted in Johnson-Lancaster's literature as optional in fact
would be furnished if a delivery order were issued to the company. We
have held that before placing an order under the FSS, where it is
necessary an agency may obtain additional information beyond what the
offeror furnishes in response to the RFQ. Amray, Inc., B-209481, June
6, 1983, 83-1 C.P.D. Paragraph 608. We realize that the Army also could
have afforded NJCT the opportunity to rectify any informational
deficiencies in the technical literature it submitted. Nevertheless,
given the fact that NJCT's literature revealed several structural
deficiencies in its equipment, such as insufficient floor clearance and
the wrong gauge of stainless steel, that were not curable through the
submission of additional literature, we cannot say that the Army acted
unreasonably in not requesting additional information from NJCT.
We do note that Johnson-Lancaster's literature states that its
offered model has only seven racks. A contracting agency cannot enforce
a requirement against one offeror while waving it for others without
violating the fundamental principle that all offerors must be treated
fairly and equally. Recyc Systems, Inc., B-216772, Aug. 23, 1985, 85-2
C.P.D. Paragraph 216. Applying this standard here, we find that the
Army should not have found NJCT offered equipment lacking for failure to
have 10 racks since it accepted Johnson-Lancaster's equipment despite
the fact that it has only 7 racks. However, since we have found that
the Army's reliance on several other deficiencies in NJCT's equipment
was a proper basis for rejecting the company's offer, NJCT was not
prejudiced. That is, even if the Army had treated NJCT the same as it
treated Johnson-Lancaster as to the number of racks for the dishwasher,
NJCT still would not have been entitled to an award because its offered
product was otherwise unacceptable.
Finally, NJCT asserts that Johnson-Lancaster in fact will not supply
the type of dishwasher called for by the RFQ and that inspection at the
destination point for the delivered machine would confirm this. We
dismiss this issue, however, because an allegation that the awardee's
performance may violate a contract term or requirement involves a matter
of contract administration, which is the responsibility of the
contracting agency, not our Office. Eclipse Systems, Inc., B-216002,
Mar. 4, 1985, 85-1 C.P.D. Paragraph 267.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
FILE: B-220129
DATE: January 29, 1986
MATTER OF: Robert C. Woolfork
OFFICERS AND EMPLOYEES - TRANSFERS - TEMPORARY QUARTERS - TIME
LIMITATION
Employee transferred to the Defense Contract Administration Services
Region, Los Angeles, California, may not be reimbursed for temporary
quarters and subsistence expenses incurred more than 6 months after he
reported for duty at his new official station. Since the employee's
family did not vacate the residence at his old duty station, his claim
for reimbursement must begin within 30 days following his arrival at the
new duty station.
Mr. Robert C. Woolfork, an employee of the Defense Logistics Agency
at Lamoore, California, was transferred to Downey, California, reporting
for duty at his new duty station on February 16, 1982, with relocation
expense authorized. He requested a travel advance of $812, which was
paid on June 4, 1982. When he did not file a travel voucher within the
required time, payroll deductions began on November 11, 1982, to recover
the advance. On November 29, 1982, he submitted a voucher claiming
temporary quarters subsistence expenses in the amount of $931.50 which
were incurred during the period September 17 to October 16, 1982. The
agency disallowed Mr. Woolfork's claim on the basis that he had not
occupied temporary quarters within the time allowed.
At Mr. Woolfork's request the agency has asked for a decision as to
his entitlement to temporary quarters expenses. /1/ It is his
contention that he was delayed from occupying temporary quarters because
his travel advance was not processed until June 1982 and that the
regulations requiring occupancy of temporary quarters within 30 days
should not apply to this situation. For the reasons stated below, we
sustain the agency's denial of Mr. Woolfork's claim.
Payment of subsistence expenses of an employee and his family while
occupying temporary quarters in connection with a permanent change of
duty station is authorized by 5 U.S.C. Section 5724(a)(3) (1982), as
implemented by Chapter 2, Part 5 of the Federal Travel Regulations,
incorp. by ref., 41 C.F.R. Section 101-7.003, and further implemented by
chapter 13 of Volume 2, Joint Travel Regulations, for employees of the
Department of Defense. Paragraph 2-5.2e of the Federal Travel
Regulations (as reflected in para. C13005.1 of 2 JTR (Ch. 177, July 1,
1980)) requires occupancy of temporary quarters to begin not later than
30 days from the date the employee reports to his new duty station or,
if not begun during this period, not later than 30 days from the date
the family vacates the residence at the old duty station.
The regulations do not prohibit reimbursement of temporary quarters
expenses for claims commencing between the period ending 30 days after
the employee reports for duty at the new duty station and the 30-day
period beginning when the family vacates the residence at the old duty
station. 54 Comp. Gen. 13 (1974). However, where the employee's family
does not vacate the residence at the old duty station, occupancy of
temporary quarters must commence within 30 days of the employee's
transfer. Daniel J. Turner, B-211341, July 12, 1983, and Robert C.
Kelly, B-189998, March 22, 1978.
There is nothing in the record to indicate that the employee's family
vacated the residence at the old duty station. Accordingly, Mr.
Woolfork's eligibility expired 30 days after he reported for duty in
Downey. The fact that his travel advance was delayed cannot be used as
a basis for an exception to that rule. Accordingly, Mr. Woolfork's
claim for temporary quarters expenses may not be paid.
Acting Comptroller General of the United States
(1) This decision was requested by the Chief, Accounting and Finance
Division, Office of the Comptroller General Logistics Agency. It was
forwarded through the Per Diem, Travel and Transportation Allowance
Committee and assigned PDTATAC Control No. 85-28.
FILE: B-220122 B-220122 2 DATE: October 22, 1985
MATTER OF: Techniarts Engineers and Contractors;
Hamilton Communications Consultants,
Inc.
DIGEST:
Protest against a n award to another firm at
a higher cost is academic when the contract
in question is terminated for the convenience
of the government because the contracting
agency determined after award that
a significant amount of the work could be
performed in-house at a substantial savings.
Two firms, Techniarts Engineers and Contractors and Hamilton
Communications Consultants, Inc., protest the award of a contract to
Northeastern Communications Concepts, Inc. under request for proposals
No. 105-23-4-EA, issued by the United States Information Agency (USIA)
for the design, construction and installation of radio broadcast
studios.
We dismiss the protests.
Both firms contend that they submitted acceptable technical proposals
that were lower in cost than Northeastern's. They therefore question
the legality of the award and request our Office to investigate the
matter.
By letter dated October 4, 1985, the USIA advised our Office that on
September 13 it had terminated the contract with Northeastern for the
convenience of the government. The agency states that this action
resulted from its determination that a significant amount of the work
called for by the contract could be performed in-house at a substantial
savings. The agency also indicates that it "remains to be decided"
whether it may find it necessary or advisable to have any portion of the
work performed by a contractor.
Since the contract has been terminated for the convenience of the
government, Techniart's and Hamilton, s protests concerning the
propriety of the award to Northeastern are academic, and we will not
consider them. Midwest Holding Corp., B-219926, Sept. 26, 1985, 85-2 C.
P.D. P ; Hill Aviation Logistics, B-218824, May 16, 1985, 85-1 C.P.D.
P 560.
We dismiss the protests.
FILE: B-220119
DATE: December 9, 1985
MATTER OF: National Federation of Federal Employees, Local 1437
GENERAL ACCOUNTING OFFICE - JURISDICTION - LABOR-MANAGEMENT RELATIONS
- REQUESTS FOR DECISIONS - DECLINED
It is the policy of the Comptroller General to decline jurisdiction
in matters pending resolution in grievance proceedings initiated under
the laws governing Federal labor-management relations, if one of the
parties indicates a preference to have the dispute settled through
arbitration and objects to a review of the matter in the General
Accounting Office. Hence, jurisdiction is declined on an agency's
request for a decision concerning allegedly fraudulent travel and
transportation allowance claims submitted by an employee, where it
appears the matter is pending arbitration and the employee's union
objects to the agency's referral of the case to the General Accounting
Office for review.
A Finance and Accounting Officer of the Department of the Army
questions whether a civilian employee can be held financially liable for
certain allegedly fraudulent travel and transportation allowance claims.
/1/ The employee and his union object to our consideration of that
question, however, suggesting that our review would improperly interfere
with ongoing grievance proceedings in the case. We decline jurisdiction
because of those objections.
The employee involved in this matter holds a metallurgist position,
grade GS-12, at the Army Armament Research and Development Center,
Dover, New Jersey. He is a member of Local 1437 of the National
Federation of Federal Employees.
The employee received an authorization in 1980 to relocate himself,
the members of his family, and the family's household goods at
Government expense from Salem, Oregon, to Dover, New Jersey, when he was
initially hired by the Department of the Army. At that time he claimed
and was paid amounts as reimbursement of his necessary travel and
transportation expenses.
In August 1984 the employee was removed from his position on grounds
of fraud relating to the claims he had submitted in 1980 for
reimbursement of his expenses incurred in moving from Oregon to New
Jersey. The National Federation of Federal Employees invoked
arbitration on his behalf in subsequent grievance proceedings brought to
contest his removal. A settlement agreement concluded in arbitration in
February 1985 by and among the union, the employee, and the employing
agency stipulated that the employee's "removal, effective August 10,
1984, will be cancelled, and a suspension without pay will be
substituted in place of the removal. This suspension will terminate on
February 10, 1985, at 2400 hours."
In April 1985 the concerned Army Finance and Accounting Officer
notified the employee that he was indebted to the United States in the
amount of $6,941.73 because of overpayments of travel and transportation
allowances he had received for his move from Oregon to New Jersey in
1980. The union filed another grievance on the employee's behalf,
contending that the proposed collection improperly contravened the
settlement agreement concluded in arbitration. At a meeting
subsequently held in May 1985 in compliance with the grievance
procedures prescribed in the collective bargaining agreement, the union
and the employee argued that it was their understanding the settlement
was supposed to have resolved all issues concerning the alleged fraud.
When the agency proposed to refer the matter here for resolution, the
union objected and indicated that it would again invoke arbitration if
the collection action were continued. We have been advised by the
National Federation of Federal Employees that it has in fact invoked
arbitration in this matter.
The Civil Service Reform Act of 1978 revised chapter 71 of title 5,
United States Code, which now governs Federal labor-management
relations, and which contains provisions for collective bargaining
agreements and grievance procedures. /2/ Under those provisions,
arbitration awards that may result from grievance proceedings are
subject to review by the Federal Labor Relations Authority and not by
our Office. /3/
Our Office does have broad statutory responsibilities for settling
monetary claims brought by and against the United States, and for
deciding questions presented by the accounting officers of the
Government concerning the propriety of expenditures of public funds.
/4/ Because specific rules have been established by law to govern
collective bargaining agreements and grievance procedures, however, we
have issued regulations delineating the circumstances in which we will
render decisions related to expenditures which are of mutual concern to
agencies and labor organizations. /5/ Those regulations provide that we
will not review or comment on the merits of an arbitration award which
is final and binding. /6/ Moreover, we will not otherwise issue a
decision or comment on the merits of a matter which is subject to
grievance procedures, if we find that it is more properly within the
jurisdiction of the Federal Labor Relations Authority and that our
assertion of jurisdiction would be disruptive to the grievance and
arbitration process. /7/ Generally, therefore, our policy is to decline
jurisdiction in matters pending in grievance proceedings if one of the
parties objects to our review, and indicates a preference to have the
controversy instead resolved through arbitration. /8/
In the present case, it does not appear that a final and binding
arbitration award has ever been issued. However, it does appear that
grievance proceedings are now pending on the issue of whether the
employee has any remaining monetary obligation to the Government on
account of the allegedly fraudulent travel and transportation allowance
claims he submitted in the course of his Federal employment in 1980.
Since it further appears that this issue is subject to resolution in
arbitration, and the employee and the union have objected to our review
of the substantive merits of the controversy, we find that an assertion
of jurisdiction on our part would unduly interfere with the grievance
process.
Accordingly, we decline jurisdiction in this matter.
Acting Comptroller General of the United States.
(1) This action is in response to a request for a decision dated June
7, 1985, from Mr. Bernard F. McCullough, Finance and Accounting Officer,
Headquarters United States Army Armament, Munitions and Chemical Command
(AMSMC-CPF(D)), Dover, New Jersey. The request was forwarded here by
the Office of the Comptroller of the Army (DACA-FAZ-GL), on August 21,
1985.
(2) Public Law 95-454, approved October 13, 1978, 92 Stat. 1111,
1191. See 5 U.S.C. Sections 7103(8), (9), and (12); and 7111-7123.
(3) 5 U.S.C. Section 7122(a).
(4) See 31 U.S.C. Sections 3529, 3702.
(5) Part 22 of title 4, Code of Federal Regulations.
(6) See 4 C.F.R. Section 22.7(a).
(7) See 4 C.F.R. Sections 22.7(b), 22.8; and Gerald M. Hegarty, 60
Comp. Gen. 578, 580 (1981).
(8) See, e.g., American Federation of Government Employees, Local
2459, 62 Comp. Gen. 274 (1983); Ira Schoen and Melissa Dadant, 61 Comp.
Gen. 15, 19 (1981); Samuel R. Jones, 61 Comp. Gen. 20, 25 (1981); and
Eleanor Mickelson, B-208399, June 3, 1983.
FILE: B-220104
DATE: August 4, 1986
MATTER OF: Gerald S. Mathews - Liability for Indirect
TRAVEL EXPENSES EMPLOYEES - HOME LEAVE - PERSONAL CONVENIENCE TRAVEL
1. State Department employee was authorized home leave pending
reassignment. Consultation at State Department, Washington, D.C., was
authorized prior or after home leave provided expenses may not exceed
that which would have been incurred had consultations occurred after
home leave. Foreign Service Travel Regulations require all official
travel be performed directly by "usually traveled route" which is one or
more routes essentially the same in cost and traveltime. Employee
elected to perform home leave after consultations in Washington, D.C.
Therefore, his claim for reimbursement for actual travel expenses is
denied since he is limited to constructive cost of direct travel from
Washington, D.C., to new duty station in Mexico City, Mexico.
TRAVEL EXPENSES - OVERSEAS EMPLOYEES - HOME LEAVE - PERSONAL
CONVENIENCE TRAVEL
2. State Department employee was transferred from Tijuana, Mexico, to
Mexico City, Mexico, with home leave en route and consultations at State
Department. Baggage handling claim cannot be allowed as it was incident
to travel segment found not to be authorized but for the personal
convenience of employee. Additionally, reimbursement for passport
photographs for family members cannot be allowed where family members
did not participate in relocation travel. Further, claim for long
distance telephone calls to shipping agent, American Embassy in Mexico
City, and to State Department may be paid if proper agency official
after reexamination determines calls were for official business.
Gerald S. Mathews, a State Department employee with a family, was
transferred from Tijuana, Mexico, to Mexico City, Mexico, with home
leave authorized en route at Las Vegas, Nevada, and consultations at
State Department, Washington, D.C. The employee's family did not
accompany him to Mexico City. Since travel orders limited travel
reimbursement to cost had home leave been taken before consultations in
Washington, D.C., and since employee did not begin home leave travel
until after consultations in Washington, D.C., employee's reimbursement
is necessarily limited to constructive reimbursement of transportation
which would have been incurred by traveling on a usually traveled route
between Washington, D.C., and Mexico City, Mexico. When a traveler
deviates from a usually traveled route for personal convenience, the
traveler must bear the extra expense for the portion of the journey
which is by an indirect route. This decision sustains a denial of Mr.
Mathews' request for additional reimbursement for relocation travel made
by our Claims Group on April 10, 1985.
Under travel orders dated December 28, 1981, Mr. Mathews and his
family were authorized to transfer from Tijuana, Mexico, to his new post
in Sydney, Australia, with approved home leave en route at Las Vegas,
Nevada. In addition Mr. Mathews alone was authorized consultation days
at the State Department, Washington, D.C., after home leave. However,
his orders provided that the "actual consultation in the Department may
be performed prior, during, or after home leave provided that the cost
to the Government may not exceed that which would have been involved for
travel and related expenses had such consultation been performed as
authorized," after completion of home leave. In fact, Mr. Mathews'
itinerary included travel from San Diego, California, on January 5,
1982, by train, with a connection in Los Angeles, California, and a
stopover in New Orleans, Louisiana, arriving in Washington, D.C., for
consultations on January 9, 1982. While in Washington, D.C., for
consultations and training, Mr. Mathews was advised that his substitute
new assignment would not be Sydney, Australia, as provided by his travel
orders but that his new assignment had not as yet been determined. Mr.
Mathews departed Washington, D.C., on February 6, 1982, for his home
leave having completed training and consultations but without knowing
the location of his new duty assignment. Mr. Mathews departed
Washington, D.C., by train arriving in Chicago, Illinois, for an 8-day
visit with his mother. He departed Chicago by train on February 18,
1982, and arrived in Las Vegas on February 20, 1982, for home leave.
While on home leave, and reportedly on approximately March 15, 1982, Mr.
Mathews received notice from the State Department that his new
assignment would be Mexico City, Mexico. This was confirmed by amended
travel orders sent by electronic mail dated April 16, 1982, and
reportedly received by Mr. Mathews on April 19, 1982. On May 6, 1982,
Mr. Mathews concluded his home leave and departed Las Vegas for Mexico
City, Mexico, utilizing a combination of train, ship, and air
conveyances with connections in Los Angeles, California, and Puerto
Vallarta, Mexico, before arriving in Mexico City on May 10, 1982. This
itinerary included travel aboard the S.S. Santa Maria from Los Angeles
to Puerto Vallarta during the period of May 6-10, 1982.
The authorized certifying officer approved reimbursement for Mr.
Mathews' train travel from San Diego to Las Vegas and from Las Vegas to
Washington, D.C., via Chicago--although actually traveled in reverse--
as direct travel to home leave destination and to Washington, D.C., for
consultation and training. The certifying officer noted, that, although
Mr. Mathews' travel orders allowed him to take home leave before,
during, or after his consultations at the State Department, his
reimbursement must be restricted to an amount not to exceed "that which
would have been involved for travel and related expenses had such
consultation been performed" after home leave was completed. Had Mr.
Mathews completed his home leave prior to his consultation and training
in Washington, D.C., he would have been expected to travel directly from
Washington, D.C., to his new duty assignment wherever it ultimately
turned out to be. In Mr. Mathews' case, it ultimately became Mexico
City although, as noted above, initially it was to be Sydney, Australia.
Mr. Mathews argues that such direct air travel from Washington to
Mexico City would have been impossible without an additional return trip
to Washington, since he was on home leave when he received a notice of
assignment to Mexico City.
The Foreign Service Act of 1980, 22 U.S.C. Sec. 4081 (1982), gave the
Secretary of State the authority to prescribe regulations for the
payment of specified relocation expenses for Foreign Service Officers.
The regulations implementing 22 U.S.C. Sec. 4081 are the Foreign Service
Travel Regulations published in 6 FAM, which covers travel and
relocation expenses for all Foreign Service Officers and employees of
State, AID, and USIA.
In setting forth the requirement for "direct travel," paragraph 131.2
of 6 FAM states that all official travel must be by a usually traveled
route. The definition of a "usually traveled route" is set out in
paragraph 117v of 6 FAM as follows:
"v. Usually Traveled Route
"One or more routes which are essentially the same in cost to
the Government and in travel time. Selection of usually traveled
routes will depend on the authorized mode or combination of modes
* * *."
In delineating the responsibility of a traveler for extra expenses
incurred as a result of indirect travel, and in defining the limitations
on reimbursement for costs incurred on that portion of a trip which is
traveled by indirect route, paragraphs 131.3-1 and 131.3-2a provide as
follows:
"131.3 Indirect Travel
"131.3-1 Personal Responsibility of Traveler for Extra Expenses
"When a traveler deviates from a usually traveled route for
personal convenience, the traveler must bear the extra expense for
the portion of the journey which is by an indirect route or for
accommodations superior to those authorized. Transportation
request forms are issued only for official travel.
"131.3-2 Limitations on Reimbursement
"a. Reimbursement for costs incurred on that portion of the
journey which is traveled by indirect route is limited to the
total cost of per diem, incidental expenses, and transportation by
less then first-class air accommodations (regardless of mode of
travel used in indirect travel, * * * which would have been
incurred by traveling on a usually traveled route."
Therefore, although Mr. Mathews' travel orders arguably allowed him
to travel the routes he selected, his travel orders do make clear that
he cannot be reimbursed on the basis of having traveled these routes
because such reimbursement would exceed the cost of direct travel from
Washington, D.C., to Mexico City, Mexico. In addition, paragraphs 114
and 115 of 6 FAM provide:
"114 Payment of Official Travel Expenses
"In accordance with the provisions of law and these
regulations, Foreign Service employees and the members of their
family are entitled only to actual and necessary expenses incurred
in the performance of official travel. Travelers are expected to
make a conscientious effort to minimize costs of official travel
and to assume costs of a personal nature and any additional
expenses incurred for personal convenience.
"115 Responsibility of Traveler
"Employees and their dependents traveling under official travel
authorizations are expected to use the most direct and expeditious
routes consistent with economy and reasonable comfort and safety.
By the same token, employees are expected to exercise good
judgment in the costs they incur for all official transportation
expenses as if they were personally liable for payments."
Reimbursement in accordance with Mr. Mathews' route selection would
clearly be inconsistent with the obligation outlined above since he
elected, for personal reasons, to take home leave after his consultation
in Washington. As the above quoted provisions found in paragraphs
131.3-1 and 131.3-2 make clear, when a traveler deviates from a usually
traveled route for personal convenience, the traveler must bear the
extra expense for the portion of the journey which is by an indirect
route. Reimbursement for costs incurred on that portion of the journey
which is traveled by indirect route is limited to the total cost of per
diem, incidental expenses, and transportation by less than first-class
air accommodations (regardless of mode of travel used in indirect
travel) which would have been incurred by traveling on a usually
traveled route. In addition, leave is charged for any excess
traveltime.
The fact that Mr. Mathews was not notified of his change of duty
station until he was on home leave in Las Vegas is irrelevant since he
had already elected to take such leave after his Washington
consultation. Thus, his maximum constructive basis (Washington to final
duty station) had already been established at that time. Accordingly,
Mr. Mathews' claim for actual expenses in lieu of constructive expenses
is denied.
Mr. Mathews also requests reconsideration of the denial of his claim
for $14 for baggage handling incident to his voyage aboard the S.S.
Santa Maria from Los Angeles to Puerto Vallarta during the period of May
6-10, 1982; $41.35 for long distance telephone calls made during the
period of March 15-25, 1982, while on home leave; and $7.50 incurred
for dependents' passport photographs.
Since reimbursement for Mr. Mathews' actual travel expenses aboard
the S.S. Santa Maria is not reimbursable for the reasons explained
above, the baggage handling charges also may not be reimbursed.
Additionally, paragraph 141h, 6 FAM, provides reimbursement for
passport photographs when actually incurred and necessary. However,
since Mr. Mathews' dependents did not accompany him on his relocation
travel, their passport photograph expenses would not be reimbursable
since they were not necessarily incurred. Although Mr. Mathews points
out that his wife did accompany him to Mexico City in September 1982 for
the purpose of pick up and delivery of his privately-owned vehicle,
necessitating the use of her passport with photograph, we note that this
travel was not incident to his relocation travel in May 1982.
Under 31 U.S.C.A. Sec. 1348(b) (1982), appropriated funds are
available only for long distance telephone calls made in the transaction
of public business. That section requires the head of an agency or his
designee to certify that such calls are necessary in the interest of the
Government before payment for such calls is made.
Our Office has held that section 1348(b) imposes on the appropriate
agency official the responsibility to determine, after investigating all
of the facts involved in a given situation, whether a long distance call
was on public business and was necessary in the interest of the
Government. 56 Comp. Gen. 28 (1976); 44 Comp. Gen. 595 (1965). We
will not substitute our judgment for that of the official designated
under section 1348(b) because the agency official is in a better
position than we are to examine the facts involved in each case and
determine whether a call is in the interest of the Government. Dr.
Stuart T. Brown, B-197266, September 22, 1980, and cases cited therein.
The record before us does not indicate that a properly designated
official has made a determination that Mr. Mathews' calls were official
in nature. However, we note that the denial was apparently made by a
certifying officer when his voucher was first presented. Since that
date Mr. Mathews has presented further information explaining the nature
of his telephone calls, and we further note that the calls were to the
State Department, U.S. Embassy, and the Dispatch Agent, who we presume
handled Mr. Mathews' household goods. Thus, an authorized approving
official should reexamine the calls to be certain that the facts support
the determination made. If, upon reexamination, the approving official
determines that the calls were in fact official business, we would not
object to payment.
Accordingly, reimbursement for Mr. Mathews' travel from Washington,
D.C., to Mexico City, Mexico, will be limited to transportation by less
than first-class air accommodations. Action should be initiated by the
State Department to recoup from Mr. Mathews the transportation cost of
$720 paid by Government Travel Request for the voyage aboard the Delta
Lines S.S. Santa Maria from Los Angeles to Puerto Vallarta. A
reexamination of the phone calls should be made as noted above.
Comptroller General
of the United States
FILES: B-220092,B-220093,B-220552 85-2 CPD 596
DATE: November 25, 1985
MATTER OF: Dynamic Instruments, Inc.
DIGEST:
CONTRACTS - NEGOTIATION - SOLE-SOURCE BASIS - ADMINISTRATIVE
DETERMINATION - REASONABLE BASIS
1. Sole-source awards based on safety considerations and
urgency to satisfy agency's interim requirement pending the
completion of competitive acquisition are not unreasonable where
awardees are the only firms capable of supplying the equipment
within the required timeframe.
CONTRACTS - NEGOTIATION - REQUESTS FOR PROPOSALS - SPECIFICATIONS -
RESTRICTIVE - UNDUE RESTRICTION NOT ESTABLISHED
2. Protest that specifications for vibration analysis equipment
are unduly restrictive is denied where restrictions imposed are
reasonably related to the agency's actual needs.
CONTRACTS - NEGOTIATION - REQUESTS FOR PROPOSALS - SPECIFICATIONS -
MINIMUM NEEDS - NOT OVERSTATED
3. Allegation that solicitation does not represent agency's
minimum needs is denied where protester fails to establish that
agency determinatidn of its needs was unreasonable.
Dynamic Instruments, Inc. (DI), protests the award of two sole-source
contracts and the competitive award of a third contract by the
Department of the Navy for vibration analysis equipment. DI contends
that the sole-source awards were not proper since DI and other
manufacturers are capable of providing vibration analysis equipment
which will satisfy the Navy's needs. In addition, DI complains that the
competition which was conducted was in effect a sole-source procurement
because of the highly restrictive aspects of the solicitation. DI
requests that it be provided an equal opportunity to compete for the
Navy's requirements for this equipment.
We deny the protests.
Background
Vibration analysis equipment is utilized by the Navy to monitor
vibration levels of various dynamic components in Navy helicopters and
attempts to locate potential failures in these components before they
occur. The Navy indicates that destructive vibration has been
identified as the cause of several catastrophic helicopter failures and
that vibration analysis equipment has contributed significantly to
helicopter safety and to the reduction of helicopter mishaps.
Chadwick-Helmuth Company, Inc., and Scientific Atlanta (8A) produced
the first generation of vibration analysis equipment and the equipment
manufactured by these two firms is widely used by the Navy. Due to
significant technological advances in this area, the vibration analysis
equipment purchased from these firms no longer represents
state-ofthe-art technology. Recognizing this fact, the Navy initiated a
competitive procurement to obtain vibration Analysis Test Sets (VATS) to
utilize the new technology and to provide a second generation of fully
militarized vibration analysis equipment. The solicitation for this
procurement was issued in January 1985, and DI submitted a proposal.
Award has not been made, and the Navy indicates that it will be 2-1/2 to
3 years before delivery of equipment obtained under this solicitation
could be expected to occur. DI's protests concern the Navy's
acquisition of vibration analysis equinment to satisfy its interim
needs.
Sole-Source Awards
The Naval Air Systems Command (NAVAIR) states that it had an urgent
and compelling need for vibration monitoring equipment for the H-1, H-2,
H-3 and H-46 helicopters. Although NAVAIR recognizes that DI and other
firms have currently developed more sophisticated equipment (VATS), only
the equipment produced by Chadwick-Helmuth and SA has been currently
tested and approved for use. NAVAIR states that SA and Chadwick-Helmuth
equipment has been used in the helicopter fleet for some time and that
it has been fully integrated into the maintenance and support system
procedures for the aircraft on which it is used. NAVAIR indicates that
additional vibration analysis equipment is immediately needed to avoid
the loss of aircraft and lives and that the additional time required to
test and qualify any new equipment, including DI' s, was unacceptable.
As a result, NAVAIR decided to procure first generation equipment
from Chadwick-Helmuth and SA on a sole-source basis. Both units could
be delivered by the respective contractors within 30 days, and NAVAIR
indicates that it is purchasing only the minimum quantity necessary to
ensure helicopter safety while awaiting the development and testing of
more sophisticated equipment under the pending VATS procurement. NAVAIR
contends that under these circumstances, the sole-source awards were
justified.
DI argues that the equipment purchased by NAVAIR is only marginally
acceptable and that the Navy's safety objectives could best be served by
procuring current state-of-the-art technology. DI contends that there
is no evidence to support NAVAIR's claim of urgency and that the
equipment it offers could significantly improve the Navy's ability to
locate and solve vibration-related problems. DI argues that normal
competitive procedures should have been utilized and that the firm
should have been allowed to compete for the Navy's interim requirements.
In determining the propriety of a sole-source award, the standard
this Office has applied is one of reasonableness; unless it is shown
that the contracting agency's justification for such an award is
unreasonable, we will not question it. Microcom Corp., B-218296, July
3, 1985, 85-2 C.P.D. P 23. Under the Competition in Contracting Act of
1984 (CICA), pub. L. No. 98-369, 98 Stat. 1176 (1984), to be codified at
41 U.S.C. Sec. 253(c), an agency may use procedures other than
competitive procedures when the property and services are available from
only one responsible source and no other type of property or service
will satisfy the agency's needs or where the need is of such an unusual
and compelling urgency that the government would be seriously injured
unless the number of sources solicited are limited. See also Federal
Acquisition Regulation, MM 6.302-1, 6.302-2, FAC 84-5, April 1, 1985.
Furthermore, the contracting officer must in writing justify the use of
other than competitive procedures and this justification must be
approved by the appropriate agency official. 41 U.S.C. Sec. 253(c) as
added by CICA. We have recognized that a military agency's assertion
that there is a critical need for certain supplies carries considerable
weight, and the protester's burden to show unreasonableness is
particularly heavy. The Willard Co., Inc., B-199705, Feb. 18, 1981,
81-1 C.P.D. P 102.
Here, NAVAIR's decision was based on its determination that safety
considerations did not permit the delay incident to the testing and
qualification of new equipment. This decision was properly documented
bv NAVAIR and, despite DI's assertion that no evidence of urgency has
been presented, the record clearly indicates that additional vibration
monitoring equipment is currently needed by the Navy and that without
this equipment, helicopter safety will be adversely affected. In our
view, NAVAIR has established a critical need for the equipment and,
since DI has not disputed that additional time would be required to test
and approve the equipment developed by DI, we have no basis to challenge
the agency's decision that only Chadwick-Helmuth and SA could provide
the equipment needed within the required timeframe.
With respect to DI's assertion that its equipment is more
sophisticated and could better satisfy NAVAIR's current needs, we note
that urgency would not permit the qualification of a new source. NAVAIR
indicates that the equipment purchased is adequate for its current needs
and the January 1985 solicitation for the selection of more
technologically advanced vibration equipment, as mentioned, has given DI
the opportunity to qualifv its equipment. There is no evidence that the
quantity procured by NAVAIR was for other than current needs and, based
on the record, we see no basis to object to the sole-source awards.
Restrictive Solicitation
The Naval Air Enqineering Center (NAEC) issued request for proposals
(RFP) No. N68334-85-F-1670 for 56 vibration analyzers. The vibration
analyzers are to be sent to locations with H-53 helicopters to allow the
Navy to perform maintenance actions crucial to the aircraft's safety.
NAEC indicates that this requirement was also urgently needed because of
an increased accident rate for the H-53 helicopter and the potential for
additional accidents and loss of life. NAEC, unlike NAVAIR, believed
that DI and one other, in addition to Chadwick-Helmuth and SA, could
possibly have units readilv available since those firms had submitted
offers on the VATS procurement. Consequently, those firms were also
solicited.
DI did not submit a proposal. DI protested to our Office alleginq
that the 30-day delivery requirement contained in the RFP was too
restrictive. In addition, DI Complained that the RFP's technical
requirements are that of Chadwick-Helmuth's model currently used by the
Navy and that the specifications do not represent the Navy's
requirements.
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 it imposes are
reasonably related to its actual needs. Once the agency establishes
this support, the burden is on the protester to show that the
requirements complained of are arbitrary or otherwise unreasonable.
Eaton Leonard Corp., B-215593, Jan. 17, 1985, 85-1 C.P.D. P 47.
Concerning the agency's delivery requirement, NAEC indicates that
helicopter safety required that the vibrational analyzers be delivered
expeditiously. Vibration monitoring equipment is utilized in performing
helicopter maintenance and NAEC indicates that the failure to detect
destructive vibration could result in the ooeration of unsafe
helicopters. Although DI notes that the helicopter crashes occurred in
1983-84 and questions the current urgency, NAEC is attempting to prevent
a recurrence of similar mishaps, and delays in obtaining this equipment
increase the likelihood that additional accidents could occur. We find
that the Navy has established a prima facie basis for the delivery
requirement and DI has not met its burden of showing it to be
unreasonable.
Furthermore, while DI has complained that the specifications
represent Chadwick-Helmuth's vibration analyzer, DI has not challenged
any specific provision as restrictive. NAEC states that the
specifications for the vibration analyzers were developed by Navy
engineers based on their knowledge of equipment currently in use as well
as general engineering knowledge. We note that SA's vibration analyzer,
as well as Chadwick-Helmuth' s, was found technically acceptable by NAEC
so that more than one firm satisfied the RFP's requirements. In
addition, DI's unsupported allegations that the RFP does not accurately
reflect NAEC's minimum needs do not satisfy DI's burden of affirmatively
establishing that NAEC's determination of its needs was unreasonable.
See Champion Road Machinery International Corp., et al., B-211857 et
al., Dec. 13, 1983, 83-2 C.P.D. P 674. Accordingly, we find no basis to
conclude that the RFP is restrictive or does not reoresent the agency's
actual needs.
Finally, we note that in its comments to the agency report, DI has
raised two additional grounds for protest. DI contends that NAEC
exceeded its $500,000 authorization limit for this procurement and has
also alleged that NAEC failed to include in the RFP a requirement to
"balance drive shafts" which was identified in earlier correspondence
from NAVAIR to NAEC as a capability which should be obtained.
We dismiss DI's latter allegation as untimely since this concerns a
solicitation impropriety which should have been raised prior to the
closing date for receipt of proposals. Bid Protest Regulations, 4 C.F.
R. Sec. 21.2(a) (1) (1985). With respect to NAEC's failure to stay
within its dollar limitation, NAEC has informally advised our Office
that a waiver for this procurement was obtained.
The protests are denied.
Harry R. Van Cleve
General Counsel
FILE: B-220091 86-1 CPD 67
DATE: January 22, 1986
MATTER OF: Industrial Refrigeration Service Corporation
CONTRACTS - NEGOTIATION - COMPETITION - RESTRICTIONS - UNDUE
RESTRICTION - NOT ESTABLISHED
1. Agency's use of noncompetitive procedures (provided for under the
Competition in Contracting Act) on a procurement for the completion of a
terminated contract at a medical center is unobjectionable where the
agency reasonably determined that conditions at the worksite were
dangerous and threatened the well-being of the patients, so that there
was no time to conduct a full competition.
CONTRACTS - NEGOTIATION - COMPETITION - RESTRICTIONS - UNDUE
RESTRICTION - NOT ESTABLISHED
2. Where agency properly determined due to urgent circumstances that
it must use noncompetitive procedures provided for under the Competition
in Contracting Act, agency properly may limit the number of sources to
those firms it reasonably believes can promptly and properly perform the
work, and is not required to solicit all firms which express interest in
performing work.
Industrial Refrigeration Service Corporation (Industrial) protests
the award of a contract to South Texas Mechanical Services, Inc. (South
Texas) by the Veterans Administration (VA) to complete the work which
had been partially performed under Industrial's previously terminated
contract No. V580C-674-84, for the replacement of two water chillers in
the VA Medical Center in Houston, Texas. Industrial contends that it
was improperly excluded from competing for the reprocurement.
We deny the protest.
The VA awarded contract No. V580C-674-84 to Industrial on June 25,
1984. Performance on the contract was suspended on February 22, 1985,
however, because of perceived deficiencies in Industrial's work
associated with asbestos removal. After the VA performed an inspection,
the VA terminated Industrial's contract for default on February 27,
1985. In order to have the terminated work completed, the VA executed a
surety takeover agreement whereby a third party was permitted by the
parties to perform the work on behalf of the surety.
Industrial appealed the default termination of its contract to the VA
Board of Contract Appeals. On or about August 5, 1985, the VA agreed to
convert the default termination to a termination for the convenience of
the government. On August 29, industrial's surety advised the VA that
it would provide no further performance and on September 4, the VA
formally rescinded the surety takeover agreement.
According to the VA, on September 5, a meeting was held by the VA
medical center's supply and engineering officials. It was determined
that the failure of the contractor to complete the project had created
an extremely hazardous situation that had to be resolved immediately.
South Texas and Neva Corporation, two firms with recent satisfactory
performance records on VA work were contacted on September 6 to
determine if they would submit prices for the completion of the project.
Prices were submitted and award was made to South Texas on September 16
based on unusual and compelling urgency as authorized by 41 U.S.C.A.
Section 253(c)(2) (West Supp. 1985).
Industrial states that by letter dated September 6, it notified VA
contracting personnel of its desire to bid on the remaining work under
the contract but was refused the opportunity. Industrial contends that
the VA's refusal to permit it to submit an offer for the completion
contract violated both the Competition in Contracting Act of 1984 (CICA)
and provisions of the Small Business Act as amended, specifically, 15
U.S.C. Section 637(b)(7)(A) (1982), dealing with bidder responsibility.
As indicated above, the VA relied on 41 U.S.C.A. Section 253(c)(2)
(West Supp. 1985) to justify award to South Texas with competition
limited to the two firms solicited. That provision authorizes an
executive agency to use noncompetitive procedures when:
"the executive 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." In using noncompetitive procedures, however, the
executive agency must request offers from "as many potential
sources as is practicable under the circumstances." 41 U.S.C.A.
Section 253(e) (West Supp. 1985).
We believe the VA's decision that there was sufficient urgency to use
noncompetitive procedures and to exclude the protester under these
procedures was reasonable. The justification states that due to the
lack of progress and the abandonment of the project by the surety's
subcontractor, two surgery suites had to be shut down, and continued
delays jeopardized the well-being of the patients. In addition, debris
left behind created a hazardous condition. Moreover, the justification
states that the surety's subcontractor left uncovered piping which was
sweating and dripping to the extent that equipment, controls, electrical
panels and the electrical distribution system were in jeopardy of being
destroyed.
The VA states that it did not solicit a proposal from Industrial due
to the urgency of the situation and the determination, made by the Chief
of Supply Service of the Medical Center, that Industrial was not a
responsible contractor to perform the work. The VA states that the
determination was based on Industrial's unsatisfactory performance under
two recent medical center construction contracts, the subject water
chiller replacement contract which was terminated (initially for
default, then converted to convenience of the government) and an energy
management system contract under which Industrial had been issued 5 cure
notices and is currently being considered for default termination. The
VA states that in accordance with the Federal Acquisition Regulation
(FAR), 48 C.F.R. Section 36.2 (1984), an unsatisfactory performance
evaluation is being prepared for Industrial's performance under these
two contracts.
The VA concluded that because the well-being of the patients was
being jeopardized, an exigent situation existed, and a limited
competition was called for. The VA competition advocate concurred, and
as a result the agency asked two firms known to have satisfactory work
experience to submit offers and ultimately awarded a contract to the low
offeror.
We think the VA's action was reasonable under the circumstances. It
is clear that there was an urgency situation, and it is also clear that
in light of the urgency the agency was not in a position to solicit a
large number of firms. We think what the VA did here, limiting the
competition to firms with satisfactory work experience which, in the
VA's view, could promptly and properly finish the work, was consistent
with CICA and, in fact, we have already upheld the VA's action in
limiting this procurement as it did. See Reliance Machine Works, Inc.,
B-220640, Dec. 18, 1985, 85-2 C.P.D. Paragraph . . . .
The protester refers to the VA's statement in its protest report that
the reason Industrial was not solicited was because it was determined
nonresponsible. The protester asserts that since it was a small
business, the VA cannot preclude Industrial from competing because of
its alleged nonresponsibility without first referring the matter to the
Small Business Administration for a certificate of competency
determination. 15 U.S.C. Section 637(b)(7)(A). Although the agency
states that it viewed Industrial as nonresponsible, we think that under
the urgency justification for use of noncompetitive procedures under
CICA, it properly could limit the sources solicited to those that it
reasonably believed could perform the work and to which it could expect
to make a prompt award. Accordingly, in view of Industrial's prior
record of performance, we do not believe the VA was required to solicit
Industrial.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220088.2; B-220089.2 DATE: October 8, 1985
MATTER OF: The Swanson Associates, Inc.
DIGEST:
Request for reconsideration of decision
dismissing protest is denied where the
protester has not shown that the agency's
nonresponsibility determination
subsequent denial of a Certificate of Competency
(COC) by the Small Business
Administration (SBA) resulted from possible
fraud or bad faith on the part of government
officials. Neither agency communications
with the SBA concerning the
protester's ability to perform nor the
agency's failure to return the COC referral
to SBA for reconsideration constitute
sufficient evidence of fraud or bad faith.
The Swanson Associates, Inc. requests reconsideration of our decision
to dismiss its protests against the General Services Administration's
(GSA) award of security guard contracts under solicitation Nos. GS-1
lC-50081 and GS-11C-5U043. We dismissed the protests because we will
not review the denial by the Small Business Adminis tration (SBA) of a
Certificate of Competency (COC) absent a showing of possible fraud or
bad faith on the part of government officials. Swanson was denied a
COC, but had not made such a showing.
We deny Swanson's request for reconsideration.
Swanson argues that it was not protesting SBA's refusal to issue a
COC but instead was protesting GSA's improper and unfair attempts to
influence SBA to decline denials of COCs. We find that the showing of
possible fraud or bad faith had not been made because the Federal
Acquisition Regulation (FAR), 48 C.F.R. P 19.602-3 (1984), encourages a
complete exchange of information between the agency and SBA to resolve
any disagreement about a concern's ability to perform, and we believe
this regulation clearly provides for agency communications with SBA that
may influence SBA's decision to issue a COC. Therefore, we do not
consider such communications to constitute evidence of fraud or bad
faith. See Cal Pacific Fabricating, Inc., B-214946, May 22, 1984, 84-1
CPD P 552.
In addition, we note that SBA makes its own independent investigation
of a firm's responsibility. See FAR, 48 C.F.R. Sec. 19.602-2(a) (2).
Accordingly, SBA's denial of a COC is not based exclusively, if at all,
on information supplied by the agency in any event.
With respect to GSA's failure to return the COC matter to SBA after
SBA indicated that it would reconsider its position if GSA requested it
to do so, we are aware of no requirement that an agency return a COC
referral to SBA for reconsideration under these circumstances.
Moreover, Swanson has submitted no evidence to establish that GSA's
failure to do so here resulted from fraud or bad faith. Therefore, we
find no basis for our review of Swanson's protest on this issue.
The request for reconsideration is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220087.5 86-2 CDP 314
DATE: September 18, 1986
MATTER OF: American Television Systems -- Request for
Reconsideration
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
RECONSIDERATION REQUESTS - ERROR OF FACT OR LAW - NOT ESTABLISHED
Request for reconsideration is denied where protester fails to show
any error of law or fact in prior decision holding that contracting
agency properly canceled invitation for bids (IFB) for design and
installation of a local area network since agency's needs had changed to
require a more extensive system than described in the IFB.
American Television Systems (ATS) requests reconsideration of our
decision in American Television Systems, B-220087.3, June 19, 1986, 86-1
CPD Paragraph 562, in which we denied ATS' challenge to the Navy's
decision to cancel invitation for bids (IFB) No. N00024-85-B-6408 for
the design and installation of a local area network (LAN). Since ATS
had failed to show any errors of law or fact in our prior decision, we
deny the request for reconsideration.
The basic portion of the IFB was for the design of a LAN, a
broad-band cable system linking various data processing equipment
belonging to the Naval Air Systems Command (NAVAIR) and the Naval Sea
Systems Command (NAVSEA) at their Crystal City building complex in
Arlington, Virginia. The IFB also included option items for materials
and supplies for installation of the system. In an earlier protest, we
held that the procurement was for automatic data processing (ADP)
equipment within the meaning of the Brooks Act, 40 U.S.C. Section 759
(1982), and the Federal Information Resources Management Regulation
(FIRMR), 41 C.F.R. Section 201-2.001 (1985). Since the Navy had not
obtained a delegation of procurement authority (DPA) from the General
Services Administration (GSA) as required by the Brooks Act and the
FIRMR, we held that the Navy was without authority to conduct the
procurement. Accordingly, we recommended that the Navy apply for a DPA
from GSA, recognizing that compliance with the Brooks Act and the FIRMR
might require revising the IFB. See Plus Pendetur Corp., et al., 65
Comp. Gen. 258, (1986) 86-1 CPD Paragraph 107.
By letter dated March 28, 1986, the contracting officer advised ATS,
the apparent awardee under the IFB, that the IFB had been canceled. The
contracting officer relied on two principal factors to support the
decision to cancel: (1) the Navy's needs had changed so that a more
extensive system than called for under the IFB was required; and (2)
additional procurement planning efforts and revisions to the IFB were
required to comply with the Brooks Act and the FIRMR. With regard to
its changed needs, the Navy stated that the Naval Data Automation
Command, the command responsible for acquisition of ADP resources for
the Navy, had determined that any LAN in the Crystal City area should be
developed together with all the Navy commands located in that area, not
just NAVAIR and NAVSEA, and, as a result, the Navy now required a
different, more extensive LAN than called for under the IFB. We found
that this change in the Navy's minimum needs was a compelling reason
sufficient to justify cancellation of the IFB.
In its request for reconsideration, ATS reiterates its disagreement
with the Navy's position that the system called for under the IFB will
not meet the Navy's expanded need for a LAN serving all the Navy
commands in the Crystal City area. Specifically, ATS characterizes the
LAN called for under the IFB as an "infinitely expandable network" and
contends that the addition of buildings or equipment to the system would
not affect the LAN's ability to meet the Navy's needs.
In its comments on the request for reconsideration, the Navy
elaborates on how its needs for a LAN have changed due to the
requirement to include all the Navy commands in the Crystal City area.
The Navy states that it must ascertain the topologies, /1/
communications workloads, and ADP equipment inventories of all the
commands which will use the LAN in order to select an appropriate
design. The original IFB was based on the Navy's estimates of the
communications needs of only two commands, NAVAIR and NAVSEA; since it
now requires a LAN serving all the Navy commands in Crystal City, the
Navy states, it first must determine the communications needs of the
additional commands before it can select an appropriate design for the
LAN. Accordingly, the Navy plans to study existing LAN technologies and
the Navy commands' communications needs /2/ and then use the study data
to develop specifications leading to award of a contract for design of
the LAN. After the design is selected, either the LAN will be installed
pursuant to an option under the design contract, or the Navy will
conduct a separate procurement for installation.
In its request for reconsideration, ATS does not dispute the Navy's
position that the communications needs of all the user commands are
crucial factors in selecting an appropriate LAN design. Rather, ATS
states generally that the LAN it offered under the canceled IFB is
capable of accommodating any changes in scope or technology that the
Navy may require. Beyond its conclusory statements regarding the
capability of its proposed LAN, however, ATS offers no specific
explanation or support for its contention. For example, ATS cites
several provisions in the IFB, such as the listing of Crystal City
NAVSEA device types and inventory, but does not explain how these
provisions support its assertion that the IFB called for a system which
could meet any of the Navy's needs that might arise in the future. ATS
thus has shown no basis to change our original finding that the Navy's
decision to cancel the IFB was reasonable in light of its changed needs.
ATS also argues that if the Navy regarded the requirement to add all
the commands to the LAN as changing its minimum needs, it would have
canceled the IFB as soon as it was advised of the requirement in
December 1985, rather than waiting to cancel until March 1986. The fact
that the Navy did not cancel the IFB sooner than it did has no bearing
on whether the Navy's changed needs justify the cancellation. See
Chrysler Corp., B-206943, Sept. 24, 1982, 82-2 CPD Paragraph 271. ATS
also challenges the other grounds relied on by the Navy as justification
for canceling the IFB. Since we have affirmed our original finding that
the change in the Navy's minimum needs was a sufficient basis for
cancellation, we need not consider ATS' contentions regarding the other
grounds relied on by the Navy.
Since ATS has failed to show any error of law or fact in our original
decision, the request for reconsideration is denied.
Harry R. Van Cleve
General Counsel
(1) The term "topology" refers to the physical configuration of the
network through which the data communications flow.
(2) We referred to the Navy's plan to conduct a design study in our
original decision. In its reconsideration request, ATS contends that
our reference to the design study must have been based on ex parte
communications between our Office and the Navy, since ATS was unaware of
the Navy's plan to conduct the study. The Navy advised us of its
intention to conduct a design study in a letter dated May 13, 1986, sent
pursuant to our request that we be advised by the Navy of action taken
in response to our recommendation for corrective action in the Plus
Pendetur decision. Further, contrary to ATS' assertion, no award for
the design study of this project has yet been made, as both our prior
decision on ATS' protest and the Navy report make clear.
FILE: B-220087.3 DATE: June 19, 1986 86-1 CPD 562
MATTER OF: American Television Systems
BIDS - INVITATION FOR BIDS - CANCELLATION - AFTER BID OPENING - SCOPE
OF WORK CHANGED
Contracting agency properly canceled invitation for bids (IFB) for
design and installation of a local area network where agency's needs
have changed to require more extensive system than described in IFB.
Since the procurement is principally for design of an integrated system,
the changes necessary to meet agency's expanded needs are not the
equivalent of an additional quantity under a solicitation for a supply
of items. The agency's new requirements thus cannot properly be the
subject of a separate solicitation. Award cannot be made under the
original IFB with the intention of modifying the contract to accommodate
the new requirements.
American Television Systems (ATS) protests the cancellation of
invitation for bids (IFB) No. N00024-85-B6408 issued by the Navy for the
design and installation of a local area network (LAN). The protester
maintains that the Navy lacked a compelling reason to cancel the IFB.
We deny the protest.
The basic portion of the IFB was for the design of a LAN, a
broad-band cable system linking various data processing equipment
belonging to the Naval Sea Systems Command (NAVSEA) and the Naval Air
Systems Command (NAVAIR) at their Crystal City building complex in
Arlington, Virginia. The IFB also included option items for materials
and supplies for installation of the system. In an earlier protest, we
held that the procurement was for automatic data processing (ADP)
equipment within the meaning of the Brooks Act, 40 U.S.C. Sec. 759
(1982), and the Federal Information Resources Management Regulation
(FIRMR), 41 C.F.R. Sec. 201-2.001 (1985). Since the Navy had not
obtained a delegation of procurement authority (DPA) from the General
Services Administration (GSA) as required by the Brooks Act and the
FIRMR, we held that the Navy was without authority to conduct the
procurement. Accordingly, we recommended that the Navy apply for a DPA
from GSA, recognizing that compliance with the Brooks Act and the FIRMR
might require revising the IFB. See Plus Pendetur Corp., et al.,
B-220087 et al., Jan. 30, 1986, 65 Comp. Gen. , 86-1 CPD P 107.
By letter dated March 28, 1986, the contracting officer advised ATS,
the apparent awardee under the IFB, that the IFB had been canceled. The
contracting officer relied on two principal factors to support the
decision to cancel: (1) the Navy's needs had changed so that a more
extensive system than called for under the IFB was required; and (2)
additional procurement planning efforts and revisions to the IFB were
required to comply with the Brooks Act and the FIRMR. In addition, as a
result of the Navy's determination that the IFB no longer met its
minimum needs, the funds originally available for the procurement were
reprogrammed to other Navy projects. The Navy now intends to acquire
the design portion of the requirement under an existing services
contract and subsequently conduct a new procurement for the LAN
equipment and installation.
Because of the potential adverse impact on the competitive bidding
system, an IFB may be canceled after bid prices have been exposed only
where there is a compelling reason for the cancellation. Federal
Acquisition Regulation (FAR), 48 C.F.R. Sec. 14.404-1(a)(1) (1984);
Dyneteria, Inc., B-211525.2, Oct. 31, 1984, 84-2 CPD P 484. Changing the
requirements of a procurement after bid opening to express properly the
contracting agency's minimum needs generally constitutes a compelling
reason for cancellation. Arcwel Corp., B-221380, Mar. 18, 1986, 86-1
CPD P 269. Here, we find that the Navy's need for a different, more
extensive LAN was a compelling reason for canceling the IFB.
The IFB called for a LAN linking two Navy commands, NAVAIR and
NAVSEA, in their Crystal City building complex. According to the Navy,
in December 1985 (after the IFB was issued in August), the Naval Data
Automation Command, the command responsible for acquisition of ADP
resources for the Navy, determined that any LAN in the Crystal City area
should he developed together with all the Navy commands located in that
area, not just NAVAIR and NAVSEA. In addition, the Navy states that
since the IFB was issued, there have been relocations of Navy personnel
and equipment in the Crystal City area which would affect the design of
the LAN. As a result, the contracting officer concluded that
cancellation of the IFB was appropriate because the LAN described in the
IFB no longer represented the Navy's minimum needs. 1/
ATS concedes that the Navy's current actual needs require expansion
of the system specified in the original IFB. ATS argues, however, that
the design called for under the IFB can be modified to accommodate the
expansion. According to ATS, the required changes should be regarded
merely as an additional quantity of items already called for under the
IFB. Thus, ATS argues, instead of canceling the IFB, the Navy should
either issue a separate solicitation for the additional requirements as
contemplated by FAR, 48 C.F.R. Sec. 14.404-1 (a) (3), or, after award is
made under the IFB, modify the contract to accommodate the additional
requirements. We disagree.
The FAR provision relied on by ATS, section 14.404-1 (a) (3), states
that an IFB generally should not be canceled due solely to increased
requirements for the items being acquired; instead, award should be
made under the original IFB and the additional quantity acquired under a
new procurement. This provision, however, applies only where an agency
is acquiring a supply of items, not where the procurement is for
services needed to perform specific work. Feinstein Construction, Inc.,
B-218317, June 6, 1985, 85-1 CPD P 648. Beyond stating that the design
called for by the IFB could be expanded to meet the Navy's current
needs, ATS offers no evidence to show that the expanded requirements are
suitable for procurement separate from the basic system described in the
original IFB. On the contrary, while the IFB contains option items for
materials and supplies, the primary portion is for design and
installation of an integrated system. Further, a contracting agency may
not, as ATS suggests, award a contract competed under given
specifications with the intention of significantly modifying its terms
after award. Intercomp Co., B-213059, May 22, 1984, 84-1 CPD P 540.
Since we find that the change in the Navy's minimum needs was a
sufficient basis for canceling the IFB, we need not consider whether the
other grounds relied on by the Navy also provided a proper basis for
cancellation. NDT-1, Inc., B-220570, Nov. 20, 1985, 85-2 CPD P 576.
The protest is denied.
Harry R. Van Cleve
General Counsel
FOOTNOTES
1/ Section 14.404-1(c) of the FAR, 48 C.F.R. Sec. 14.404-1(c),
authorizes the head of the contracting agency to determine if an IFB
should be canceled after bid opening. Under section 14.404-1 (c) of the
Department of Defense FAR Supplement (DFAR), this authority is delegated
to the contracting officer. ATS contends that the delegation of
authority in the DFAR is without effect because the provision was not
published in the Federal Register as required by 41 U.S.C. Sec. 418b
(Supp. II 1984). In fact, the DFAR provision was published for public
comment in the Federal Register on April 4, 1985. See 50 Fed. Reg.
13,353 (1985).
FILE: B-220085.2 86-1 CPD 172
DATE: February 19, 1986
MATTER OF: Descomp Inc.
CONTRACTS - PROTESTS - ALLEGATIONS - UNSUBSTANTIATED
1. Allegation that awardee's bid should have been found
nonresponsive because awardee's facility is not located within a 110
mile radius of the Capitol is without merit where solicitation only
specified that pickup and delivery locations must be within that
geographic area.
BIDS - INVITATION FOR BIDS - SPECIFICATIONS - RESTRICTIVE
2. Protest alleging that agency should not have eliminated a
geographic restriction is without merit where agency reasonably
determines that its needs could be met without imposing such a
restriction and agency determines that requirement constitutes an
unjustified restriction on competition.
CONTRACTS - PROTESTS - AUTHORITY TO CONSIDER - CONTRACT
ADMINISTRATION MATTERS
3. Whether an awardee performs in compliance with contract
requirements is a matter of contract administration not for
consideration under Bid Protest Regulations.
Descomp, Inc. (Descomp) protests the award of a contract for data
entry services to Keypunch, Inc. (Keypunch) under Department of Housing
and Urban Development (HUD) invitation for bids (IFB) No. HC-14255.
Descomp, the second low bidder, alleges that HUD has misinterpreted the
IFB's geographic restriction and that, based on a proper interpretation,
the Keypunch bid is nonresponsive because the Keypunch facility is not
located within the required geographic area. We deny the protest.
While the protest was pending in our Office, Descomp filed suit
against the government in the United States District Court for the
District of Delaware (Civil Action No. 85-575-JJF). The bases for the
suit are substantially the same as those presented to our Office in the
protest. The court, by order of October 1, 1985, denied Descomp's
motion for a temporary restraining order. We dismissed the protest on
October 17, 1985 because the court had not indicated an interest in our
decision. HUD awarded the contract to Keypunch the next day.
Subsequently, in an order dated October 21, 1985, the court requested
that we decide Descomp's bid protest.
Descomp was the incumbent contractor and has provided HUD with the
required data entry services since approximately 1971. The last
contract for this requirement was awarded to Descomp in 1982 pursuant to
Request for Proposals (RFP) No. HC-10735. That RFP, and previous
solicitations, all contained a similar mandatory geographical
restriction which was stated as follows:
All services required shall be performed within a 110 mile
radius of the United States Capitol Building, Washington, D.C.
Due to the Department's need for rapid turnaround, in some
instances, and the need for close liaison between the contractor
and government personnel, the geographical limitation is mandatory
and represents actual requirements of the work to be performed."
The RFP also required pickup and delivery locations to be within the
District of Columbia. In contrast, the current IFB contained only the
following requirement:
"(2) Pickup and delivery locations will be within 110 miles of
the Capitol, and in accordance with instructions received from
GTR/GTM."
Descomp contends that, although HUD had replaced the geographic
restriction with a requirement that only pickup and delivery locations
be within a 110 mile radius of the Capitol, HUD nevertheless intended to
continue the mandatory geographic restriction as applied in previous
solicitations. Descomp argues that HUD's requirements have not changed
from past years and that there was no rational basis to eliminate the
geographic restriction. Descomp claims that HUD's actions are based on
a misinterpretation of the current IFB requirement, and since Keypunch's
facility is located more than 110 miles from the Capitol, Keypunch
should have been declared nonresponsive.
We find Descomp's protest without merit. The language of the current
IFB clearly does not require that a contractor's facility be located
within 110 miles of the Capitol, but only that pickup and delivery
locations be located within that area. In addition, the record shows
that HUD intentionally removed the geographic restriction found in
previous solicitations and inserted the performance requirement in its
place because the agency believed the geographic restriction was
unnecessary and constituted an unjustified restriction on full and fair
competition. Accordingly, we see no evidence that HUD intended to apply
the same geographic restriction used in past years, and, in view of the
plain language of the requirement, HUD's interpretation of the clause to
mean that only pickup and delivery locations must be within a 110 mile
radius of the Capitol is clearly reasonable. /1/
Furthermore, we disagree with Descomp's contention that the
geographical restriction as interpreted in previous RFPs should be
imposed to ensure satisfactory performance. First, it is well
established that it is the responsibility of the contracting agency to
determine its minimum needs and the best method to accommodate these
needs. Eaton Leonard Corp., B-215593, Jan. 17, 1985, 85-1 CPD Paragraph
47. Second, we note that the basic principle underlying federal
procurement is that competition is to be maximized; providing all
qualified sources an equal opportunity to compete for government
contracts. Joint Committee on Printing of the Congress of the United
States -- Request for Advance Decision, 64 Comp. Gen. 160 (1984), 85-1
CPD Paragraph 17. HUD determined that its needs could be met without
imposing the broad geographic restriction contained in prior
solicitations. This provides no basis for legal objection since the law
requires the use of the least restrictive procurement approach possible.
In fact, for this reason an assertion that a solicitation should be
made more restrictive is generally not reviewable by this Office. Olson
and Assocs. Engineering, Inc., B-215742, July 30, 1984, 84-2 CPD
Paragraph 129
Lastly, we note that Descomp complains that Keypunch has been unable
or unwilling to fulfill the "24-hour turnaround" terms of the contract
and that HUD has Knowingly allowed the condition to continue. We point
out that there is no evidence that the Keypunch bid took any exception
to this requirement. Moreover, whether a bidder performs a contract in
compliance with contract requirements is a matter of contract
administration and not for consideration under our Bid Protest
Regulations. Meditech, Inc., B-217428, Jan. 16, 1985, 85-1 CPD
Paragraph 45.
The protest is denied.
Harry R. Van Cleve
General Counsel
(1) HUD also argues that Descomp's protest is untimely since the
change was apparent from the solicitation and therefore should have been
protested prior to bid opening. 4 C.F.R. Section 21.2(a)(1) (1985). We
agree. Although Descomp claims that it was unaware of HUD's
interpretation of this clause until a later date, the wording of the
requirement in the current IFB should have placed Descomp on notice of
the proposed change. In view of the court's request for our opinion on
the merits, however, we have discussed the protest issues. 4 C.F.R.
Section 21.9.
FILE: B-220082.2 85-2 CPD 729
DATE: December 31, 1985
MATTER OF: California Scaffold Corporation
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTOR
1. Protest alleging that bid was submitted on an "all or none" basis
and that agency improperly made only a partial award to the protester is
untimely when filed more than 10 working days after the partial award to
the protester since agency's actions are inconsistent with protester's
alleged "all or none" qualification.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - FREEDOM OF INFORMATION ACT REQUEST INVOLVEMENT
2. Protest challenging procuring agency's determination that bid
price for one line item is unreasonable is timely where filed within 10
working days of the protester's receipt, under the Freedom of
Information Act, of agency's price analysis.
BIDS - PRICES - REASONABLENESS - ADMINISTRATIVE DETERMINATION
3. A contracting officer's determination concerning price
reasonableness is a matter of administrative discretion which GAO will
not question unless the determination is clearly unreasonable or there
is a showing of possible fraud or bad faith.
California Scaffold Corporation (CSC) protests the partial rejection
of its bid by the Department of the Navy under invitation for bids (IFB)
No. NOO244-85-B-0233 for the provision of fixed and rollable
scaffolding. CSC, part of a joint venture that submitted the only bid
under the IFB, was awarded a contract for the rollable scaffolding. The
Navy rejected CSC's bid for the fixed scaffolding based on a
determination that CSC's price for this item was unreasonable. CSC
alleges that the Navy did not properly evaluate CSC's price for the
fixed scaffolding, and that the Navy lacked a cogent and compelling
reason justifying its failure to award this item. In addition, CSC
alleges that its bid was on an "all or none" basis and, since it was
awarded a contract for the rollable scaffolding, it is also entitled to
a contract for the fixed scaffolding.
We deny the protest in part and dismiss it in part.
Initially, we note that the Navy argues that CSC's protest is
untimely. The Navy contends that it advised CSC on September 4 that no
award for fixed scaffolding would be made to the firm. Since CSC did
not file its protest until October 3, the Navy argues that the protest
should not be considered on the merits. In addition, the Navy indicates
that a partial award for the rollable scaffolding was made to CSC on
August 30 and contends that this action should have put CSC on notice
that its bid was not considered to contain an "all or none"
qualification. The Navy contends that this issue therefore should have
been raised within 10 working days of the award date.
Clearly CSC's acceptance of the partial award for rollable
scaffolding is inconsistent with its allegation that it qualified its
bid on an all or none basis. In any event, CSC did not raise this issue
in a timely fashion. The Navy's partial award to CSC for rollable
scaffolding clearly demonstrated that the Navy did not believe that it
was required to accept CSC's entire bid. The Navy's actions were
inconsistent with the all or none interpretation of the bid asserted by
CSC and since CSC did not raise this issue within 10 working days of the
August 30 award date, it will not be considered.
To the extent the protester challenges the Navy's withholding the
award based on a determination of price unreasonableness, the protester
did not learn of the basis for the determination until recently. The
price analysis was contained in a memorandum which CSC obtained under
the Freedom of Information Act. Since there is nothing in the record
which indicates that CSC failed to file its protest within 10 days of
receiving the document, we find this allegation timely and we will
consider it on the merits. See Bancroft Investors, B-219915, Nov. 19,
1985, 85-2 CPD Paragraph . . . .
The Federal Acquisition Regulation (FAR), 48 C.F.R. Section
14.404-1(a)(1) (1984), provides that after bids have been opened, award
must be made to the lowest responsible bidder unless there is a
compelling reason to reject all bids and resolicit. The regulation also
provides that a solicitation may be canceled after bid opening if, where
only one bid is received, the contracting officer cannot determine that
the price is reasonable. FAR Section 14.404-1(c)(6) (FAC 84-5, Apr. 1,
1985). A determination of unreasonableness involves broad discretion on
the part of the contracting officer and will not be disturbed absent a
showing of fraud or bad faith. Security Fence Co., B-218587, July 22,
1985, 85-2 CPD Paragraph 67; Mid South Industries, Inc., B-216281, Feb.
11, 1985, 85-1 CPD Paragraph 175. In this regard, we have recognized
that a determination of price reasonableness properly may be based on a
comparison with such things as a government estimate, past procurement
history, current market conditions, or any other relevant factor. Omega
Container, Inc., B-206858.2, Nov. 26, 1982, 82-2 CPD Paragraph 475.
Here, the IFB specified estimated quantities for various heights of
fixed scaffolding and bidders were requested to provide "per week" and
"per month" unit prices. The contracting officer multiplied the listed
quantities for each subitem by CSC's "per week" and "per month" unit
prices and compared the totals to the unit prices under a prior
solicitation multiplied by the same estimated quantities. The prior
prices included those of the incumbent contractor. As a result of this
comparison, CSC's price for the fixed scaffolding was found unreasonably
high (more than 36 percent higher than the incumbent's price).
CSC does not disagree with the Navy's conclusion that the totals used
for comparison purposes showed a significant price difference. Rather,
CSC argues that the IFB's estimated quantities are unrealistic and that
the contracting officer should not have utilized these estimates in
evaluating CSC's price. CSC further argues that under the IFB, the Navy
was required to aggregate the total price for fixed and rollable
scaffolding, and that under this method, CSC's overall price is not out
of line with past procurement prices for the same requirement.
We find nothing improper in the price analysis which was conducted by
the Navy. The record shows that the Navy used the estimates solely to
project a quantity for comparing CSC's prices with the prices under
prior solicitations. Under these circumstances, the accuracy of the
estimated quantities is irrelevant. As regards CSC's assertion that
only its total price for all items should have been examined for
reasonableness, we point out that the contracting officer was not
determining which bidder was low for the purpose of an aggregate award,
but whether the offered price for a particular item was unreasonable.
Accordingly, we do not believe that CSC has shown that the
contracting officer abused her discretion in any manner by finding CSC's
price for fixed scaffolding unreasonable and canceling that portion of
the IFB.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220080.2 85-2 CPD 589 DATE: November 22, 1985
MATTER OF: Events Analysis Inc.--Reconsideration
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
RECONSIDERATION REQUESTS - ERROR OF FACT OR LAW - NOT ESTABLISHED
Prior decision is affirmed on reconsideration since protester
has not shown any errors of law or fact which warrant reversal of
that decision.
Events Analysis, Inc. (Events), requests reconsideration of our
decision in Events Analysis, Inc., B-220080, Oct. 29, 1985, 85-2 C.P.D.
P , in which we dismissed Events' protest of the exclusion of its
proposal from the competitive range as not for consideration under our
bid protest function because cancellation of the solicitatsion rendered
the protest academic. We affirm the dismissal.
Events asserts, in its request for reconsideration, that our
dismissal without an "investigation" constitutes "a very narrow legal
interpretation of the applicable case law" and generally reasserts that
Events was harmed by the Defense .Supply Service's decision to cancel
the request for proposals at the expiration of the fiscal year allegedly
to avoid a "GAO investigation."
In dismissing the initial protest, we noted that the bid protest
provisions of the Competition in Contracting Act of 1984 (CICA), 31 U.
S.C. Sec. 3551-3556 (West Supp. 1985), which provide for the Comptroller
General to decide bid protests, define a "protest" as a written
objection to a solicitation by an executive agency" for the procurement
of property or services" or the proposed award of such a contract. 31
U.S.C. Sec. 3551. Accordingly, we concluded that because no award would
be made by the agency, the protest was academic.
In our view, a protest is not an "investigation," but an objection to
the propriety of the award or proposed award of a contract.
Consequently, where no award is contemplated, we will close our files
because the matter is not within our jurisdiction. Since Events has not
shown any error of fact or law in our prior decision, the dismissal is
affirmed. See 4 C.F.R. Sec. 21.12(a) (1985).
Harry R. Van Cleve
General Counsel
FILE: B-220080 85-2 CPD 483 DATE: October 29, 1985
MATTER OF: Events Analysis, Inc.
DIGEST:
CONTRACTS - PROTESTS - MOOT, ACADEMIC, ETC. QUESTIONS - SOLICITATION
CANCELED
Protest that offeror's proposal was improperly determined to be
outside the zone of further consideration and firm was denied an
opportunity to submit a best and final offer is rendered academic
by cancellation of solicitation. GAO will not retain jurisdiction
of a protest, despite the protester's request to do so, when the
solicitation has been canceled.
Events Analysis, Inc. (Events), protests the determination that its
proposal was outside the zone of further consideration and the denial of
an opportunity to submit a best and final offer unuer request for
proposals (RFP) No. MDA9O3-85-R-0071 issued by the Defense Supply
Service (DSS) for evaluation of the Army's safety program. The
protester essentially contends that it was "unfairly" denied the
opportunity to submit a best and final offer. We dismiss the protest.
After the protest was filed, the contracting officer notified all
offerors by an amendment that effective October 1, 1985, the RFP was
canceled because funds for the procurement expired on September 30,
1985, the end of the fiscal year.
Events advises our Office that it does not wish to withdraw its
protest, alleging that DSS canceled the solicitation as a means of
evading our review of the agency's "flawed" procurement practices. The
protester urges us to "investigate" the circumstances surrounding this
procurement so as to prevent their recurrence.
Generally, cancellation of a solicitation renders a protest such as
this academic. If a protester is unwilling to withdraw, we will dismiss
the matter. Bee The Wheelabrator Corporation, B-219419, July 29,
1985,--85-2 C.P.D. P 107. Our bid protest authority is applicable only
to the award or proposed award of a contract and where, as here, as the
result of the cancellation of a solicitation no award will be made, we
will not retain jurisdiction of a protest. See 31 U.S.C. Sec. 3551
(West Supp. 1985).
The protest is dismissed.
Robert M. Strong
Deputy Associate General Counsel
FILE: B-220078 85-2 CPD 694
DATE: December 20, 1985
MATTER OF: Beech Aerospace Services, Inc.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
1. Protest of alleged improprieties in solicitation for two-step
sealed bidding is untimely where alleged improprieties were apparent
prior to bid opening but the protest was filed subsequent to bid
opening. Untimely filed protest will not be considered under the
significant issues exception to GAO's timeliness rules where issues have
been previously considered by GAO.
CONTRACTS - PROTESTS - INFORMATION EVALUATION - SUFFICIENCY OF
SUBMITTED INFORMATION
2. Grounds of protest which were not accompanied by any factual
details when protest was initially presented are dismissed. GAO Bid
Protest Regulations provide in part that protests filed with GAO must
set forth a detailed statement of the legal and factual grounds of
protest including copies of relevant documents.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - NEW ISSUES - UNRELATED TO ORIGINAL PROTEST BASIS
3. New grounds of protest initially presented subsequent to GAO's
receipt of agency report on the protest are dismissed as untimely.
Where a protester initially files a timely protest and later supplements
it with new and independent grounds for protest, the later-raised
allegations must independently satisfy GAO's timeliness requirements.
GAO Bid Protest Regulations do not contemplate the piecemeal
presentation of arguments or grounds for protests.
BIDS - "BUYING IN" - NOT BASIS FOR PRECLUDING AWARD
4. Protest alleging that solicitation resulted in a "buy-in" by
awardee is dismissed, since the possibility of a "buy-in" is not illegal
and does not provide a basis upon which an award may be challenged.
Beech Aerospace Services, Inc. (Beech), protests award to Dynalectron
Corporation (Dynalectron) under solicitation No. N68520-85-B-9076, an
invitation for two-step sealed bidding, issued by the Department of the
Navy for the procurement of maintenance and material support for the
Navy's T-34C and T-44A aircraft. Beech, the incumbent contractor under
the prior contract for these services, requests that the award under the
solicitation be canceled and that the procurement be resolicited on the
basis that the solicitation's requirements for engine overhaul were
confusing and, therefore, the solicitation should have been amended to
incorporate clarifying questions and written answers provided by the
contracting officer to the bidders. In addition, the protester contends
that the price evaluation criteria of the solicitation did not ensure an
accurate and fair determination of the lowest overall bid price. The
protester also alleges that the Navy's withholding of "acquisition
procedures" from the terms of the solicitation has resulted in a
situation where a "buy-in" apparently occurred.
The protest is dismissed.
Under the two-step sealed bidding method of procurement, the first
step consists of the request for the submission, evaluation and (if
necessary) discussion of a technical proposal. No pricing is involved.
In the second step, sealed-price bids are invited from those firms which
submitted acceptable technical proposals in step one. See Federal
Acquisition Regulation, Section 14.501, Federal Acquisition Circular No.
84-5, April 1, 1985.
The Navy advises that the solicitation was issued on April 26, 1985,
to 38 potential offerors and that proposals in step one were received
from seven firms. The agency determined that all seven firms would
remain in the competetion for step two, and all seven firms submitted
bids by the September 3 bid opening date. Dynalectron submitted the low
bid and, therefore, was awarded the contract on September 13. On
September 16, Beech filed its protest in our Office. By letter dated
September 25, 1985, the Navy advised our Office that the head of the
contracting activity has determined that the continued performance of
the contract awarded to Dynalectron is in the best interest of the
United States notwithstanding the protest. See 31 U.S.C. Section 3553(
d)(2) (West Supp. 1985).
The Navy reports that during the solicitation process, it received
and answered a total of 165 questions from offerors and that all
questions and answers were provided in writing to all offerors. Beech
contends that the solicitation's provisions were confusing with regard
to the requirements for engine overhaul and that clarifying questions
and answers provided by the contracting officer relating to the
requirements for engine overhaul of the aircraft should have been
incorporated into the bid solicitation by amendment. Beech notes that
the confusion regarding engine overhaul was evidenced by the several
questions which had been submitted by bidders prior to the submission of
bids. Improprieties apparent under step two of a two-step procurement
must be protested prior to the time set for the opening of bids. See
GEO-CON, Inc., B-214503, July 3, 1984, 84-2 C.P.D. Paragraph 13; 4
C.F.R. Section 21.2(a)(1) (1985). Since Beech's protest of the
allegedly "confusing" provisions relating to engine overhaul was not
submitted to our Office until September 16 -- subsequent to the
September 13 bid opening -- this protest issue is untimely.
Another contention raised by the protester is that the price
evaluation criteria set forth in section M-4 of the solicitation did not
ensure an accurate and fair determination of the lowest overall price in
step two of the procurement. We note that the protester does not
contend that evaluation of bid prices was not in accordance with the
price criteria set out in the solicitation. Since the protest is based
on the price criteria as set out in the solicitation and not on the
agency's failure to evaluate the bids received on the basis of the
criteria in the solicitation, this protest issue is untimely because it
was filed after the bid opening date. See 4 C.F.R. Section 21.2(a)(1),
supra.
The protester contends that even if the above grounds of protest
regarding engine overhaul and the price evaluation criteria are
untimely, such protest issues should be considered by our Office under
the "significant issues" exception to our timeliness rules. See 4 C.F.
R. Section 21.2(c) (1985). Under the significant issue exception, we
will only consider untimely protests when the issue or issues raised are
of widespread significance to the procurement community and have not
been previously considered. Knox Manufacturing Co. -- Request for
Reconsideration, B-218132, Mar. 6, 1985, 85-1 C.P.D. Paragraph 281. We
construe this exception strictly and use it sparingly to prevent our
timeliness rules from being rendered meaningless. WAECO Power, Inc.,
B-218036, Feb. 13, 1985, 85-1 C.P.D. Paragraph 224. Neither of the
above two grounds for protest falls within the exception since the
issues of ambiguities in a solicitation and alleged improprieties in a
solicitation's price evaluation criteria have been the subject of prior
decisions of this Office. With regard to the former issue, see IBI
Security Service, Inc., B-217446, June 27, 1985, 85-1 C.P.D. Paragraph
732, and Cincinnati Bell Telephone Co., 62 Comp. Gen. 124 (1983), 83-1
C.P.D. Paragraph 41. With regard to the latter issue, see AC, Inc.,
B-215993, Dec. 31, 1984, 85-1 C.P.D. Paragraph 4, and Williams Elevator
Co., B-210049, Sept. 15, 1983, 83-2 C.P.D. Paragraph 327.
In its September 16 protest, Beech also alleges that the contract as
awarded differs from the solicitation and that the Navy withheld
available information regarding cost of material and procedures that
affected the ability of bidders to respond with their best offers. The
protester also alleges that certain "acquisition procedures" that were
withheld from the bidders affected the contract cost and later were
added into the contract after award.
In its protest, Beech provided no details whatsoever concerning these
grounds for protest. Furthermore, the Navy advises that Beech had not
filed a prior protest with it concerning this procurement and that there
had been no prior discussion between the protester and agency
representatives concerning the matters under protest. Our Bid Protest
Regulations provide in part that protests filed with this Office must
set forth a detailed statement of the legal and factual grounds of
protests, including copies of relevant documents. See 4 C. F.R.
Section 21.1(b)(4) (1985). This filing requirement was necessitated as
a practical matter by provisions in the Competition in Contracting Act
of 1984, which require this Office to notify the contracting agency of a
protest within 1 day after its filing and further require that the
agency generally furnish this Office with a report responding to the
protest within 25 working days after such notice. 31 U.S.C. Section
3553(b) (West Supp. 1985). See The Pangborn Company -- Reconsideration,
B-218087.3, Mar. 11, 1985, 85-1 C.P.D. Paragarph 298. Since Beech's
protest letter did not provide any details of the factual basis for its
allegations that the Navy withheld from the solicitation material
information on costs and "acquisition procedures," such grounds for
protest are properly for dismissal. We note that at the conference on
this protest and in its subsequent written comments, Beech provided
additional details on these allegations. However, such information
furnished on a piecemeal basis does not satisfy the protester's
responsibility to provide a detailed statement on the factual grounds of
its protest. See A&M Instrument, Inc. -- Request for Reconsideration,
B-220167.2, Sept. 30, 1985, 85-2 C.P.D. 359; Allied Bendix Aerospace,
B-218869.2, June 6, 1985, 85-1 C. P.D. Paragraph 651.
At the conference and in its subsequent written comments, the
protester has made a number fo specific allegations concerning the
impropriety of the solicitation and price evaluation process which are
not set forth in its initial protest. These allegations pertain to
Beech's contention that the solicitation and evaluation process do not
ensure that the government's minimum needs are met by the lowest
responsible bidder since the solicitation both overstates and
understates the actual needs of the government under the procurement.
For example, Beech contends that the bid schedule for aircraft parts set
forth in attachment 1, annex 6, of the solicitation grossly overstates
the government's actual needs for engine "vane rings" under the
procurement; Beech bases this argument upon its experience with certain
aircraft parts gained as the incumbent under earlier contracts. As
another example of an allegation not raised until the bid protest
conference and the subsequent comments to our Office, Beech states that
by message dated September 6, which it received on September 8, the Navy
advised the contracting activity that National Stock Number (NSN)
material would be provided by the contractor. Beech advises that
attachment 1, annex 7, to the solicitation had provided that such NSN
material would be furnished by the government and that the change in
policy as a result of this message would result in the addition of $11
million of contractor-provided material which was not set forth in the
solicitation and, thus, was not a part of the price evaluation formula.
These and the other new allegations or grounds for protest which were
first presented either at the conference on the protest or in Beech's
subsequent comments are untimely. Where a protester files a timely
protest and later supplements it with new and independent grounds for
protest, the later-raised allegations must independently satisfy the
timeliness requirements. Our Bid Protest Regulations do not contemplate
the unwarranted piecemeal development of protests. See Baker Company,
Inc., B-216220, Mar. 1, 1985, 85-1 C.P.D. Paragraph 254. Furthermore,
our regulations do not contemplate a piecemeal presentation of arguments
or information even where they relate to the original grounds for
protest. See Allied Bendix Aerospace, B-218869.2, supra, 85-1 C.P.D.
Paragraph 651 at 2. Since the new allegations and grounds of protest
first presented by Beech at either the conference on the protest or in
its subsequent written comments to our Office are based either on
alleged improprieties apparent on the face of the solicitation or on
information known to the protester at the time its initial protest was
filed, such allegations and grounds for protest are dismissed as
untimely. See 4 C.F.R. Sections 21.2(a)(1) and (2) (1985). See A&M
Instrument, Inc. -- Request for Reconsideration, B-220167.2, supra.
Lastly, Beech alleges in its protest that the omission of
"acquisition procedures" from the solicitation as alleged above created
a situation under which an intentional "buy-in and recover later" bid
apparently occurred. The possibility of a "buy-in" is not illegal and
does not provide a basis upon which an award may be challenged. Seaton
Van Lines, Inc., B-217298, Jan. 8, 1985, 85-1 C.P.D. Paragraph 26. We
note that contracting officers, however, are required to take
appropriate action to ensure that losses resulting from below-cost
bidding or a "buy-in" are not recovered through change orders or
otherwise. Command Systems, B-218093, Feb. 15, 1985, 85-1 C.P.D.
Paragraph 205.
In accordance with the above, the protest is dismissed.
Robert M. Strong
Deputy Associate General Counsel
FILE: B-220075; B-220075.2 85-2 CPD 684
DATE: December 18, 1985
MATTER OF: DDL Omni Engineering
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
ADMINISTRATIVE DISCRETION
1. Procuring officials enjoy a reasonable degree of discretion in
evaluating proposals and GAO will not disturb an evaluation where the
record indicates that the conclusions reached in the evaluation were
supported by information in the proposals and were consistent with the
evaluation criteria set forth in the solicitation.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION - CRITERIA
SUBCRITERIA -- REASONABLY RELATED TO CRITERIA
2. Contracting agency's failure to indicate in evaluation scheme all
of the training programs that would be considered under a corporate
experience evaluation factor is unobjectionable where the solicitation
clearly indicated that such related experience would be considered;
while a contracting agency must identify major evaluation areas in the
solicitation, the agency need not identify the various aspects of each
factor which may be taken into account.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
TECHNICAL ACCEPTABILITY - ADMINISTRATIVE DETERMINATION
3. Agency's determination that awardee's technical proposal was
substantially equal to the protester's despite a 0.35 point (on scale of
10) difference is reasonable where the awardee's proposal was scored
higher under the two most important evaluation factors comprising 60
percent of the evaluation; whether a given point spread between
proposals indicates that the higher rated proposal is significantly
superior is a matter largely within the contracting agency's discretion.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION - COST
REALISM - SCOPE OF GAO REVIEW
4. Agency's determination that awardee's proposed costs were
realistic was proper where based on complete cost data and consideration
of all proposed costs. Fact that protester believes different approach
in considering cost realism would have led to more accurate analysis is
not sufficient to impugn the agency's determination since the extent to
which costs will be examined generally is a matter within the agency's
discretion.
JOINT VENTURES - QUALIFICATIONS - IMPUTED FROM ONE VENTURER TO THE
JOINT VENTURE
5. Certain qualifications of individual members of a joint venture
-- including past compliance with equal employment opportunity
requirements and security clearances -- properly may be considered by a
contracting agency in evaluating the qualifications of the joint
venture, where the individual members will perform all contract work.
CONTRACTORS - RESPONSIBILITY - DETERMINATION - REVIEW BY GAO -
AFFIRMATIVE FINDING ACCEPTED
6. Whether a joint venture is a legal entity eligible for a contract
award is a matter of the joint venture's responsibility, the affirmative
determination of which GAO generally will not review.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT IN REQUEST
FOR BEST AND FINAL OFFERS
7. Allegation that agency should have made multiple awards is
untimely and will not be considered where protester was advised in
request for best and final offers that single award would be made and
did not raise the allegation before the due date for best and final
offers.
DDL Omni Engineering (DDL) protests the award of a contract to
Military Training Associates (MTA) under request for proposals (RFP) No.
N00030-86-R-0061, issued by the Department of the Navy for training
services supporting the Fleet Ballistic Missile/Strategic Weapon System
(FBM/SWS) Training Program. DDL contends that the Navy failed to
evaluate cost and technical proposals in accordance with the RFP and
that the resulting award to MTA was improper. We deny the protest in
part and dismiss it in part.
The RFP contemplated the award of a 1-year cost-plus-fixed-fee,
level-of-effort contract, with four additional 1-year options. The
services to be provided were broken into two separate items for proposal
purposes, and the RFP provided for either separate contract awards for
the items or a single combined award to one offeror. The RFP also
provided that while technical capability was of paramount importance,
cost (including cost realism) would be evaluated and would assume
greater importance in the overall evaluation in the case of
substantially equal technical proposals. The technical evaluation
criteria were listed in section N as follows, in order of descending
importance: technical approach/personnel; management approach/
corporate experience; and facilities. Section L set forth the factors
that would be considered under each criterion.
Four proposals, including those of DDL and MTA, were received by the
June 24, 1985 initial closing date, and immediately were forwarded to
the technical evaluation panel for review. The raw evaluation scores
then were forwarded to the award review panel, which found the
evaluations supportable and applied predetermined weights to the
criteria (Technical/Personnel -- 30 percent each, Management/Corporate
Experience -- 15 percent each; Facilities -- 10 percent) in calculating
initial proposal final scores. DDL and MTA received final scores of
6.60 and 5.90 (on a scale of 10), respectively. The contracting officer
determined that both firms' costs were reasonable and realistic, and
thus included DDL and MTA in the competitive range (along with a third
firm, Control Data Corporation (CDC)) for negotiation purposes.
Negotiations were conducted with each offeror, and by letters of
August 7 offerors were presented questions to be addressed in their best
and final offers, due August 16. These letters also advised that a
single award combining both items would be made and that sub-line item
costs submitted with initial cost proposals need not be recalculated and
resubmitted; only line item costs now were required. The best and
final offers were evaluated anew under the scoring plan. The raw scores
again were forwarded to the review panel which, after reaching agreement
on the scoring, again applied the predetermined weights. The final
weighted scores and proposed costs were as follows:
TABLE OMITTED
The review panel determined that the 0.35 point difference between
the high and low scores did not indicate a significant difference in the
three offerors' technical capabilities. The difference in the DDL and
MTA scores largely was attributable to the less important evaluation
categories; MTA was rated superior to DDL under the key Technical
Approach criterion and was essentially equal to DDL in the other key
category, Personnel. Based on these considerations, the panel rated the
proposals substantially equal and, in view of the $2.7 million cost
advantage represented by MTA's proposal, recommended award to MTA on
September 6.
DDL alleges a number of improprieties in the technical and cost
evaluations which, DDL asserts, led the Navy to conclude erroneously
that MTA's proposal was essentially equal in quality to DDL's, resulting
in an award to MTA based on its lower proposed cost. DDL also
challenges the Navy's evaluation of MTA's proposed cost.
DDL argues that the evaluation under the Personnel criterion was
faulty in several respects. First, it claims the Navy scored MTA too
high in view of MTA's alleged failure to include bona fide employee
agreements in its proposal covering employees currently working for DDL
and CDC; section L of the RFP provided that proposals would not be
evaluated as highly absent such agreements for proposed future
employees.
The Navy explains in its report, and the record shows, that MTA did
submit bona fide employment agreements for all but one employee for whom
such agreements were required. MTA included only 10 current DDL
employees, and no CDC employees, in its proposal and, based on the
absence of an agreement for one of the DDL employees, MTA was awarded
only 9 of a possible 10 points for this factor. DDL submitted
agreements for all proposed future employees and accordingly received
all 10 possible points. This allegation therefore is without merit.
DDL contends that the Navy improperly evaluated the two firms'
personnel since MTA's personnel allegedly lacked the FBM/SWS program
experience specified as an evaluation consideration, but apparently were
rated more highly than DDL's experienced personnel based on having
college degrees in fields not directly related to FBM/SWS.
We point out at this juncture that the determination of the relative
merits of proposals is primarily the responsibility of the contracting
agency, not our office. It is the contracting agency that must bear the
burden of any difficulties arising from a faulty evaluation. Litton
Systems, Inc., Electron Tube Division, 63 Comp. Gen. 585 (1984), 84-2
C.P.D. Paragraph 317. Our standard for reviewing matters of technical
evaluations reflects this consideration. We repeatedly have expressed
our view that procuring officials enjoy a reasonable degree of
discretion in evaluating proposals, and we will not question their
judgments in this regard absent a showing that those judgments are
unreasonable or contrary to procurement laws and regulations. See, e.
g., Petro-Engineering, Inc., B-218255.2, June 12, 1985, 85-1 C.P.D.
Paragraph 677.
The Navy again responds, and the record again shows, that the premise
of DDL's argument is incorrect. MTA's personnel in fact were found to
have significant FBM/SWS program experience; of 27 proposed key
personnel, 20 possessed between 10 and 20 years of FBM/SWS experience.
MTA also demonstrated substantial experience at the working level,
submitting 15 optional resumes of employees having 10-20 years of
FBM/SWS experience. Although DDL's extensive FBM/SWS personnel
experience was scored highly (1955.5 points), MTA's experience in
FBM/SWS programs, together with its edge in education -- section L of
the RFP, as amended during the course of the procurement, specifically
indicated that education would be evaluated -- was deemed sufficient to
warrant scoring MTA's proposal essentially equal to DDL's (1952.9
points) under the Personnel criterion. We find no basis for concluding
that the Navy's judgment in this regard was unreasonable based on the
proposals, or otherwise was inconsistent with the evaluation scheme set
forth in the RFP.
DDL maintains that MTA was scored too high under the Corporate
Experience criterion. It asserts that none of the joint ventures
comprising MTA had any experience in FBM/SWS programs, and believes the
Navy improperly took into account the FBM/SWS experience of certain MTA
employees.
The Navy concedes that MTA had little corporate FBM/SWS experience,
but points out that MTA accordingly was scored very low on this factor;
the record indicates that MTA received only 5.3 of a possible 30 points
(DDL received 25 points). MTA's overall score for Corporate Experience
was 752.8 out of 1500 points (still substantially lower than DDL's score
of 1113.4), due to MTA'S experience with other training programs. For
example, MTA received 26 of 30 points for the Navy Training Plans
factor. We find no basis for concluding that MTA'S Corporate Experience
score was unduly inflated; the assigning of only approximately 50
percent of the total available points seems to us a reasonable means of
reflecting MTA's limited FBM/SWS experience. Further, we find no
evidence that the Navy improperly substituted personnel experience in
evaluating MTA's corporate experience.
DDL objects to the Navy's consideration of three experience areas --
Department of Defense training programs; TRIDENT SSBN Command and
Control Systems and Hull, Mechanical and Electrical training programs;
and SSBN Unique Sonar training programs -- not specified in the RFP's
evaluation scheme. DDL claims that evaluation of these additional
programs not specified in the RFP resulted in a reduction of its score
under this criterion and an increase in MTA's score.
As the Navy points out, while agencies must identify major evaluation
areas for a procurement, they need not identify the various aspects of
each factor which may be taken into account. Technical Services Corp.,
64 Comp. Gen. 245 (1985), 85-1 C.P.D. Paragraph 152. Although DDL is
correct that the RFP did not specify precisely what categories of
experience would be considered, section L did advise offerors to
emphasize in their proposals "experience directly related to the
statement of work, particularly Navy Training programs and the FBM/SWS
program." We believe the wording of this provision was sufficient to put
offerors on notice that related experience other than Navy training
programs and the FBM/SWS program would be considered. It also appears
that the other programs evaluated were reasonably related to the
corporate experience criterion, so that we find it was reasonable for
the Navy to evaluate the offerors' corporate experience in them.
DDL argues that the evaluation scheme in the RFP, as applied by the
Navy, was deficient since technical capability was to be of paramount
importance, but no significant discrimination between offers was made.
DDL asserts that, in order to give effect to the emphasis on technical
capability, the Navy should have viewed the 0.35 point differential
between DDL and MTA as significant enough to warrant making award to
DDL.
The fact that offerors were scored close technically does not
evidence any impropriety in the evaluation. The evaluation scoring
would be deficient, i.e., unreasonable, only if it were shown that the
scoring clearly did not reflect the quality of the proposals when
considered in light of the evaluation criteria in the RFP. We have
found no deficiencies in the evaluation areas challenged by DDL, and
thus find nothing objectionable in the fact that the proposals received
relatively close scores.
There also was nothing improper in the Navy's determination that the
0.35 point different in DDL's and MTA's technical scores was
insignificant. Whether a given point spread between two proposals
indicates a significant superiority in the higher scored proposal
depends on the circumstances of each procurement and is primarily a
matter within the contracting agency's discretion. Culp/Wesner/Culp,
B-212318, Dec. 23, 1983, 84-1 C.P.D. Paragraph 17. As explained
previously, the Navy did not consider the difference in DDL's and MTA's
scores an indication that DDL's proposal was materially superior to
MTA's, particularly in light of MTA's higher combined scores under the
Technical Approach and Personnel criteria, which carried 60 percent of
the total scoring weight. We find that the Navy's determination in this
regard was reasonable and that its consideration of cost in making award
was in accordance with the evaluation scheme and, therefore,
unobjectionable. DDL's mere disagreement with the Navy on this point is
not sufficient to establish otherwise. See Harrison Systems Ltd., 63
Comp. Gen. 379 (1984), 84-1 C.P.D. Paragraph 572.
DDL challenges the Navy's determination that MTA's cost proposal was
realistic, that is, that it reasonably reflected the costs likely to be
incurred by MTA in performing the contract. More specifically, DDL
believes the Navy's cost realism analysis was deficient since the Navy:
(1) failed to submit the cost proposals to the Defense Contract Audit
Agency (DCAA) for a detailed audit of the proposed direct labor rates;
(2) failed to consider whether MTA was planning on using uncompensated
overtime in performing; and (3) did not confirm that MTA would incur no
general and administrative (G&A) expenses at the joint venture level as
it proposed.
We have held that a contracting agency's analysis of cost proposals
so involves the exercise of informed judgment that we will not disturb
an agency's cost realism determination absent a showing that it lacks a
reasonable basis. See, e.g., Prospective Computer Analysts, B-203095,
Sept. 20, 1982, 82-2 C.P.D. Paragraph 234. The extent to which proposed
costs will be examined generally is a matter within the contracting
agency's discretion, Robert E. Derecktor of Rhode Island, Inc., et al.,
B-211922, et al., Feb. 2, 1984, 84-1 C.P.D. Paragraph 140; the agency
need not necessarily conduct an in-depth cost analysis or verify each
and every cost item in an offeror's proposal. Hager, Sharp & Abramson,
Inc., B-201368, May 8, 1981, 81-1 C.P.D. Paragraph 365. Applying this
standard here, we find no basis for objecting to the Navy's
determination that MTA's proposed costs were realistic.
The Navy evaluated MTA's and the other offerors' labor rates -- the
most significant cost element in this level-of-effort contract -- by
considering whether a given rate would result in an appropriate salary
for a given category of employee (e.g., senior engineer). This approach
was favored by the Navy over a comparison with past salaries since it
believed verification of past salaries would be difficult or impossible.
The Navy's analysis was made in light of detailed line item and
sub-line item cost breakdowns in initial proposals, covering each labor
category; each offeror's current cost or pricing data; and each
offeror's certification that the labor rates were DCAA-approved. The
Navy also noted that MTA proposed a reasonable, realistic 3 percent wage
escalation for each option year and offered its employees a good overall
compensation plan generally. /1/ While DDL believes there existed more
reliable methods for evaluating labor rates, the Navy's approach does
not appear per se unreasonable and clearly was based on a substantial
amount of cost data.
DDL suspects that MTA has a policy of having its employees work
uncompensated overtime -- overtime hours for which the employee is not
reimbursed and which therefore would not be reflected in MTA's proposal.
DDL concludes that, due to federal wage and hours laws, the Navy could
end up paying MTA time-and-a-half for these hours of labor. The Navy
replies, however, that MTA did not propose uncompensated overtime hours
and that, even if DDL's speculation as to MTA's policy is correct, MTA
would not be paid time-and-a-half since the RFP specified that no
overtime payments were authorized under the contract. We find nothing
in the record supporting DDL's speculation as to MTA's business
policies, or suggesting that the Navy overlooked the possibility of
uncompensated overtime in analyzing proposed costs. In any case, we
find the Navy's position reasonable.
We also find nothing unreasonable in the Navy's determination that
MTA's proposed G&A expenses were realistic. Unlike DDL and CDC, MTA,
organized as a joint venture, reduced its overall costs, including G&A
expense and fee, by proposing to subcontract all of the work out to the
members of the joint venture. The member companies would incur G&A
expenses and charge a proportionate fee based on the amount of work
performed (just as any other subcontractor), but the joint venture
(which is no more than a combination of the member companies) then would
not have to add its own additional G&A expenses and fee on top of these
costs. DDL and Control Data both added G&A expense and fee on top of
their subcontract costs.
The record shows that the Navy scrutinized MTA's proposed G&A expense
and fee arrangement. In fact, the Navy clearly recognized that these
costs were responsible for a large portion of the difference in DDL's
and MTA's proposed costs. The Navy found that it was realistic to
anticipate such significant savings based on both MTA's joint venture
arrangement and MTA's willingness, in effect, to perform the contract
with a significantly lower overall fixed fee. As with the cost realism
analysis generally, DDL would have us reanalyze the likelihood that
MTA's G&A expenses will be as proposed. As stated above, however, our
review is limited to considering whether the Navy unreasonably
determined that MTA's proposed costs are realistic. We find no basis
for questioning the Navy's approach or determination as to MTA's
proposed G&A costs.
DDL contends that MTA falsely certified in its proposal that it was
entitled to modified cost accounting standards (CAS) coverage and that
it had complied with equal employment opportunity/affirmative action
requirements under prior contracts. The record contains no evidence
conclusively indicating whether MTA was entitled to modified CAS
coverage but, even assuming MTA's allegation in this regard is correct,
we do not believe an offeror's mistaken belief that it is entitled to
the modified coverage is, by itself, a proper basis for withholding an
award. In any case, the Navy included the standard CAS provision in
MTA's contract, so the certification had no practical effect. DDL
suggests that this certification may have led the Navy to conduct an
inadequate cost realism analysis. We already have examined this matter
and have concluded that the Navy conducted a reasonable cost realism
analysis.
As for MTA's certification that it had complied with affirmative
action requirements on prior contracts, the Navy requested Department of
Labor equal employment opportunity clearances on each MTA joint venturer
prior to award. As Labor granted clearances for each joint venturer,
this aspect of the protest is without merit. To the extent DDL's
argument is founded on the fact that MTA, a newly formed joint venture
for this procurement, could not have had a history of equal employment
opportunity compliance, it also has no merit. As the Navy correctly
points out in its report, we have held that certain qualifications of
individual members of a joint venture properly may be considered in
evaluating the qualifications of the joint venture. Parker-Kirlin,
Joint Venture, B-213667, June 12, 1984, 84-1 C.P.D. Paragraph 621. We
see no reason why the joint venturers' compliance with equal employment
opportunity requirements should not be imputed to the joint venture
where, as here, the joint venturers themselves will perform essentially
all of the work under the contract.
DDL maintains that the award to MTA was improper because, contrary to
a mandatory requirement in the RFP, MTA did not have a security
clearance prior to award. Each of MTA's joint venturers did have the
requisite clearances and the Navy deemed this sufficient, but DDL
submits that this did not satisfy the RFP requirement that MTA, the
offeror, have its own clearance. We find the allegation to be without
merit.
The Navy states that the security clearance requirement was for the
purpose of assuring that the contractor would be able to handle
classified information as necessary to perform the contract. Since, as
noted, the joint venturers will be performing all of the work under this
solicitation, and since each joint venturer possessed a valid security
clearance of at least "secret," as required, we think the Navy
reasonably determined that MTA satisfactorily complied with the security
clearance requirement prior to award. The Navy might have opted to
adhere to DDL's strict reading of the requirement by simply delaying the
award until MTA formally was issued a clearance in its own name
(ultimately issued on October 22). Given the Navy's view that the joint
venturer's existing clearances were sufficient to enable MTA to perform,
however, we do not believe such a delay was necessary.
DDL speculates that MTA may not be constituted as a legal entity
eligible to receive the award here. Whether a firm is a legal entity to
which a contract can be awarded also concerns the firm's responsibility.
As indicated above, we will not review the Navy's affirmative
determination. F&H Mfg. Corp., B-206320, Apr. 27, 1982, 82-1 C.P.D.
Paragraph 392.
DDL raises additional arguments which we will not consider. First,
DDL argues that, instead of making a single award to MTA based,
ultimately, on its low proposed cost, the Navy should have made separate
awards to DDL and CDC, since their proposals each were technically
superior on one of the two RFP items and, combined, would have been
technically superior to MTA'S single proposal. DDL claims the RFP
required multiple awards where combining proposals on the two items
would result in a higher technical evaluation than any single proposal.
Under our Bid Protest Regulations, protest allegations based on
alleged improprieties incorporated in the solicitation must be asserted
no later than the next closing date for receipt of proposals following
the incorporation. 4 C.F.R. Section 21.2(a)(1) (1985). DDL and the
other offerors were advised in the Navy's August 7 letters requesting
best and final offers that the Navy had decided to make a single award.
It should have been clear to DDL at this point that the Navy's
determination had been based on considerations other than taking
advantage of the most highly rated proposal on each item; no matter
what the quality of the proposals after the final evaluation, a single
award would be made. As DDL first raised this allegation in its
comments dated October 29, it is dismissed as untimely.
DDL also questions for the first time in October 29 comments how a
joint venture such as MTA possibly can fulfill the Navy's apparent
requirement for considerable management control under this contract.
DDL's original September 16 protest letter reveals that DDL was aware
then that MTA was a joint venture, and we fail to see why DDL's concerns
as to the management capability of a joint venture could not have been
raised at that time. We thus find that this allegation, too, is
untimely. In any case, we have reviewed the Navy's evaluation of MTA
under the Management Approach criterion (which carried a weighted value
of only 15 percent) and find no basis for questioning the scoring of MTA
in this area.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
(1) DDL had speculated in its original protest that MTA planned to
pay salaries 25 percent below some employees' current levels. Given the
Navy's determination that MTA's total compensation plan is reasonable
and our review of all offerors' proposed labor rates, we find no basis
for this assertion.
FILE: B-220073.3 86-1 CPD 106
DATE: January 30, 1986
MATTER OF: Ibex Ltd. -- Reconsideration
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF COMMENTS ON AGENCY'S REPORT
Request that protest file, closed due to protester's failure to
comment on the agency's report, be reopened because agency report did
not adequately apprise protester that it constituted the report required
to be filed under our Bid Protest Regulations is denied where agency's
response was identified as the report on the protest and no comments
were filed within 7 working days of its receipt.
Ibex, Ltd., requests reconsideration of our dismissal of its protest
concerning the rejection of its bid as nonresponsive under invitation
for bids (IFB) No. N62474-84-B-4616 issued by the Department of the
Navy. We closed the case because Ibex did not file its written comments
to the Navy's protest report within the 7 day period prescribed by our
Bid Protest Regulations, 4 C.F.R. Section 21.3(e) (1985). We decline to
reopen the case.
Ibex's original protest was filed on November 8, 1985 and the
scheduled due date for the Navy's protest report on the matter was
December 17. Our Office received the report on December 11 and Ibex
indicates that it received its copy at approximately the same time.
Ibex failed to file comments or request that we consider the protest on
the basis of the existing record and, on December 30, we issued a
dismissal notice and closed our file in the matter.
Ibex contends that the document received from the Navy failed to
adequately apprise Ibex that it was the report contemplated by 4 C.F.R.
Section 21.3(c) of our Bid Protest Regulations. The Navy's report was a
four-page letter addressed to our Associate General Counsel and Ibex
indicates that it interpreted this letter as a response to a personal
request for information. Ibex argues that the letter failed to indicate
that it was the report required to be filed under 4 C.F.R. Section
21.3(c) and furthermore, that the report failed to comply with this
provision since it did not respond to all of the protest issues raised
nor were there any documents attached as required by the regulation.
Ibex also notes that it received the letter before the scheduled due
date.
Under 4 C.F.R. Section 21.3(c), the contracting agency is required to
file a complete report on the protest within 25 working days from the
date it receives notice of the protest. The regulation further provides
that relevant documents, as appropriate, shall be included and that the
report should be fully responsive to all allegations of the protest
which the agency contests.
The Navy's submission in the first sentence clearly stated that it
was being filed in response to our "request for a report on the protest
of Ibex, Ltd . . . ." Although not addressing every issue raised by
Ibex, the Navy focused on one of several bases upon which the Ibex bid
was found nonresponsive. The agency argued that Ibex's bid was properly
rejected as nonresponsive for that one reason alone and that the protest
filed by the firm should be denied. We note that there is no
requirement that the agency specifically cite the regulation in filing
its report and, in any event, we find that the Navy's response was
identified in such a manner so as to place Ibex on notice that it
constituted the agency's report on the protest filed by the firm.
Moreover, despite Ibex's allegations regarding the adequacy of the
report, Ibex was not entitled to idly await the receipt of a
"satisfactory" report to the detriment of the expeditious resolution of
protests as required by the Competition in Contracting Act, Pub. L. No.
98-369, 98 Stat. 1175 (1984). See Del-Jen, Inc. -- Reconsideration,
B-218136.3, June 10, 1985, 85-1 CPD Paragraph 659. Our acknowledgment
notice of Ibex's protest advised Ibex that it should receive the report
by December 17, that we would assume it would receive the report when we
received ours and that unless we heard from the firm by the 7th working
day thereafter, we would close our file. If Ibex had contacted our
Office during this time period, as our notice advised, any question sit
had regarding the report submitted by the Navy would easily have been
clarified.
In addition, we note that our dismissal notice was sent after the
protester's comment period from the scheduled due date of the agency's
report had expired. Therefore, had Ibex not received any report from
the Navy as the protester alleges, Ibex was required to notify our
Office of this fact within the 7 day period. AAA Engineering &
Drafting, Inc. -- Reconsideration, B-218283.2, May 28, 1985, 85-1 CPD
Paragraph 607.
Since Ibex neither submitted comments on the Navy's report nor
advised our Office within the 7 day period of its alleged nonreceipt,
our dismissal of the protest is affirmed.
Harry R. Van Cleve
General Counsel
FILE: B-220072 85-2 CPD 708
Date: December 24, 1985
MATTER OF: Maxima Corporation
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
COMPETITIVE RANGE EXCLUSION - REASONABLENESS
1. Protest that agency improperly excluded proposal from the
competitive range is denied where GAO's in camera review of the
evaluation documents shows that the agency's finding that offeror's
technical proposal was unacceptable was reasonable and the record
further indicates that offeror's proposed cost was significantly higher
than costs proposed by offerors included in the competitive range.
CONTRACTS - PROTESTS - ALLEGATIONS - BIAS - UNSUBSTANTIATED
2. When a protester alleges bias, it has the burden of affirmatively
proving its case and unsupported allegations of bias do not satisfy this
burden.
Maxima Corporation (Maxima) protests its exclusion from the
competitive range under request for proposals (RFP) No.
N60921-85-R-A183 issued by the Department of the Navy, Naval Surface
Weapons Center, for product assurance technical support for naval ships,
systems and equipment. Maxima argues that, as a result of procedural
irregularities and bias on the part of an evaluator, Maxima's proposal
did not receive a fair, impartial evaluation in accordance with stated
criteria in the RFP.
We deny the protest.
The RFP solicited a cost-plus-fixed-fee contract. The RFP stated
that award would be made to the offeror whose proposal offers the
greatest value to the government. Proposals were to be scored on both
technical capability and cost with technical factors considered
approximately four times as important as cost. The RFP listed
capability of employees, past corporate experience, and management as
the main technical criteria in descending order of importance. Each of
these criteria contained several subcriteria.
Proposals were received from five offerors and were evaluated and
scored by a technical evaluation panel (TEP). The TEP also prepared a
written critique of each proposal intended to substantiate the scoring,
and the source selection official was to base his decision on the
written narratives. Three of the five firms submitting offers were
included in the competitive range. However, by letter dated August 30,
1985, Maxima was notified that it was eliminated from the competitive
range due to both technical and cost considerations.
Specifically, Maxima was notified that its proposal was excluded from
the competitive range because it was deficient under each of the three
major technical criteria and because its cost proposal compared
unfavorably to the other proposals considered technically acceptable.
Also, the record indicates that Maxima's cost including fee was 30
percent greater than the average of those offers included in the
competitive range.
Initially, Maxima complains that its ability to show how the
evaluations were improperly conducted is hampered by the Navy's refusal
to permit Maxima to have certain source selection and evaluation
documents. Maxima requests that it be provided with copies of documents
that the Navy provided to GAO, but refused to give to Maxima. It is
apparent that the information withheld is considered confidential
because this is an ongoing procurement.
The Competition in Contracting Act of 1984, 31 U.S.C.A. Section
3553(f) (West Supp. 1985), provides in pertinent part that:
"Within such deadlines as the Comptroller General prescribes, upon
request each Federal Agency shall provide to an interested party
any document relevant to a protested procurement action (including
the report required by subsection (b)(2) of this Section) that
would not give the party a competitive advantage and that the
party is otherwise authorized by law to receive."
While the source selection information may not be released to the
protester, GAO will review the documents supplied in light of the
protest issues raised. Our discussion of the documents is necessarily
limited in view of the ongoing evaluation of proposals. See Raytheon
Support Services Co., B-219389.2, Oct. 31, 1985, 85-2 C.P.D. Paragraph
495.
Maxima argues that it should have been included in the competitive
range. Essentially, Maxima argues that since it is presently performing
satisfactorily on a comparable contract for the Navy, the fact that it
was poorly evaluated under this RFP must reflect a bias against it on
the part of one of the proposal evaluators.
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. Western
Graphtec, Inc., B-212971, May 14, 1984, 84-1 C.P.D. Paragraph 517.
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. Paragraph 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. Paragraph 335.
The record indicates that Maxima was determined technically
unacceptable under all of the major technical criteria. Under the
criterion "capability of employees," the contracting officer reported
four deficiencies in Maxima's proposal: (1) proposed personnel did not
meet the RFP qualification requirements; (2) not enough personnel were
proposed in some elements; (3) personnel were proposed without the
breadth and depth of experience required; and (4) personnel were not
equipped through academic training or experience to perform professional
level product assurance work. Under the technical criterion of
"corporate experience," the contracting officer stated that Maxima
submitted only a minimum amount of sample data and that over 50 percent
of the data was rated unacceptable. Finally, under the criterion of
"management" the contracting officer commented that the management plan
proposed was not acceptable and it did not demonstrate that the company
has the capability to manage contracts of this type.
With regard to the Navy's determination that Maxima's proposal was
deficient under the criterion of employee capability, our review of the
record indicates that the Navy evaluated proposals in accordance with
the RFP evaluation criteria. For example, the RFP provided that
required personnel such as the project manager and engineers have
specified years of experience in the product assurance work required by
the contract, have proficiency in disciplines such as engineering and
have specific education degrees. The record supports the TEP finding
that the majority of Maxima's proposed staff did not meet these stated
RFP requirements and that Maxima's proposed personnel did not have the
academic training or personnel experience the RFP required to perform
product assurance work.
Maxima argues that the personnel it proposed are essentially the same
personnel working on the current contract for the Navy which is
allegedly "broader in scope than the instant RFP." Maxima contends that
it is performing successfully on the current contract and since it has a
thorough knowledge of the skills of its people, the number and quality
of the personnel proposed are sufficient for the proposed work.
However, the Navy responds that the personnel proposed by Maxima are
not essentially the same personnel working on the current contract. The
Navy asserts that since a large percent of the current contract is being
performed by a subcontractor and Maxima has proposed to use a different
subcontractor for the subject contract, the personnel proposed are not
those who are currently performing the contract. In this regard, the
Navy states, for example, that of the 19 individuals proposed by Maxima
under the senior product assurance analyst category, only three have
charged any hours to the current contract during the months of May, June
and July 1985, and that less than 5 percent of the hours billed under
this category reflect work performed by personnel proposed under the
instant RFP. The Navy argues, therefore, that, notwithstanding the fact
that Maxima is currently performing a similar contract with the use of a
subcontractor, the Navy properly concluded that Maxima's proposal
reflects an unacceptable level of employee capability. On this record,
we have no basis to question the Navy's explanation in this regard.
The RFP also required offerors to propose an adequate number of
personnel of the correct professional composition and the correct skills
mixture as specified in the estimates of work and personnel assignments.
Although Maxima contends that it offered an adequate amount and quality
of staff to satisfactorily perform the required work, our review of the
record shows that the Navy evaluation in this regard was reasonable.
For example, the RFP states that 15 to 25 percent of the work
assignments will likely be in the area of integrated logistics support
(ILS). The resumes of Maxima's proposed staff, however, reflect the
fact that only one part-time employee has ILS as his primary discipline.
We find, therefore, that the Navy reasonably concluded that Maxima's
proposal was inadequate in this area.
Concerning the Navy's conclusion that Maxima's proposal was
unacceptable under the criterion of corporate experience, Maxima argues
that it seems unreasonable for over 50 percent of its sample data to be
considered unacceptable when 11 out of 19 of the samples were
deliverables to the Navy under Maxima's current contract for similar
work.
The record indicates that the sample data were evaluated for
soundness, technical excellence, and relevance to work required under
the RFP which were the criteria stated in the RFP. The record further
indicates that the TEP reasonably found that some of the data were
barely relevant to the statement of work subtasks, that some data were
considered too simplistic and did not indicate breadth of experience,
and that some were only partially prepared by Maxima or its proposed
subcontractor.
Although Maxima contends that it should not have been penalized under
the stated RFP criteria for the fact that subcontractors or consultants
performed some of the work involved in the sample data submitted, we do
not agree. Offerors were required to state what percent of the sample
work was performed in-house and we think, therefore, that it was logical
and reasonable for the Navy to take into consideration the amount of the
sample work that was actually performed by the offeror or its proposed
subcontractor in evaluating corporate experience. See Columbia Research
Corp., B-202762, Jan. 5, 1982, 82-1 C.P.D. Paragraph 8.
With regard to the Navy's finding that Maxima submitted an
unacceptable management plan which did not demonstrate that Maxima had
the capability to adequately manage contracts of this type, Maxima
argues that such a conclusion must be unreasonable because Maxima is
currently managing a similar contract for the Navy.
The Navy contends, however, that although Maxima is the incumbent
contractor, it cannot rely on the government's knowledge of its
abilities, but must clearly delineate its capabilities in its proposal.
Barber-Nichols Engineering Co., B-216846, March 25, 1985, 85-1 C.P.D.
Paragraph 343. In this connection the Navy TEP found that Maxima did
not address, or addressed superfically, areas of management of one of
the Navy sites under the RFP -- the White Oak facility. Specifically,
Maxima did not address the need for an on-site manager for White Oak.
Also, the TEP found that Maxima's selected subcontractor, which had
vital contract performance responsibilities, had an out-of-state
operations office and no commitment for a local office, and that the
proposal did not address adequately the coordination of work with the
subcontractor, Maxima and the Navy. Based on these deficiencies in
Maxima's offer, we cannot object to the Navy's finding that Maxima's
management plan was unsatisfactory. The Navy's knowledge of Maxima's
capabilities based on its current contract, however, would not establish
how Maxima proposed to manage this particular contract.
The record indicates that Maxima failed through its offer to propose
staffing which met RFP requirements, to demonstrate its corporate
capabilities through the required work product samples, or to provide an
adequate management plan. Under these circumstances, we find that the
Navy reasonably concluded that Maxima's proposal would require major
revisions to become technically acceptable. Given this determination
and the fact that Maxima's proposed cost was not competitive with those
offers included in the competitive range, we think the Navy reasonably
excluded the proposal from the competitive range.
Finally, Maxima alleges that one member of the TEP, who has been the
contracting officer's technical representative (COTR) under Maxima's
current contract with the Navy, is biased against Maxima. Maxima
suggests that this allegedly biased evaluator influenced the TEP to
score Maxima's offer low. As evidence of bias, Maxima alleges that the
COTR stated publicly that Maxima's work on the current contract was not
acceptable.
When a protester alleges bias, it has the burden of affirmatively
proving its case; unsupported allegations do not satisfy this burden,
J.L. Associates, Inc., B-201331.2, Feb. 1, 1982, 82-1 C.P.D. Paragraph
99, nor does establishing the mere potential for improprieties.
Computer Sciences Corp., B-201800, Apr. 17, 1984, 84-1 C.P.D. Paragraph
422. We will not attribute unfair or prejudicial motives to procurement
officials on the basis of inference or supposition. See Architectural
Preservation Consultants; Resource Analysts, Inc., B-200872, et al.,
Dec. 8, 1981, 81-2 C.P.D. Paragraph 446.
The Navy denies that the evaluation was biased. In response to
Maxima's allegation that the COTR publicly criticized Maxima, the Navy
states that there was never any public criticism, but rather the
criticism was made privately to members of Maxima's management team. In
any event, with regard to the evaluation of proposals under this RFP,
Maxima has failed to show that the COTR was biased against Maxima in the
evaluation of Maxima's proposal. The TEP, which included the COTR,
scored the proposals prior to preparing a written narrative of the
evaluation of each offer and recommending a competitive range to the
contracting officer. The contracting officer, not the COTR, made the
final determination to exclude Maxima. We also note that although a
number of subcriteria were scored by a panel which included the COTR,
Maxima received its highest score under the subcriterion that was solely
scored by the COTR who was allegedly biased against Maxima.
Also, there is no indication from the record that removal of the COTR
from the TEP would have affected Maxima's standing in the competition.
Even where bias is shown, we will deny a protest if there is no
indication that the bias adversely affected the protester's competitive
standing. Ted L. Biddy and Associates, Inc., B-209297; B-209297.2,
Apr. 22, 1983, 83-1 C.P.D. Paragraph 441.
Harry R. Van Cleve
General Counsel
FILE: B-220071 85-2 CPD 532 DATE: November 8, 1985
MATTER OF Satellite Services, Inc.
DIGEST:
CONTRACTORS - RESPONSIBILITY - DETERMINATION - REVIEW BY GAO -
NONRESPONSIBILITY FINDING
An agency may properly determine a bidder to be nonresponsible
and reject a bid based on a finding that the bidder's individual
sureties on a bid bond are unacceptable because they failed to
disclose outstanding bond obligations on their Affidavits of
Individual Surety.
Satellite Services, Inc. (SSI) protests the rejection of its bid
under invitation for bids (IFB) No. F04605-85-B0033, issued by the
Department of the Air Force, March AFB, California, for transient
aircraft maintenance services. The Air Force rejected SSI's bid on
grounds that the bid bond submitted with it was deficient. We deny the
protest.
Under the IFB, bidders were required to submit bid bonds equal to 100
percent of their bid prices. Because SSI was bonded by individuals
rather than a corporate surety, a completed Affidavit of Indvidual
Surety (Standard Form 28) for each of its two individual sureties also
was required. Item 10 of the Affidavit specifically required the
individual sureties to disclose all other bonds on which they were
listed as sureties at the time they executed the bid bond for SSI.
When the low bidder under the solicitation was permitted to withdraw
from the competition because of a mistake in its bid, SSI, as
second-low, appeared to be next in line for award. The contracting
officer, however, subsequently found the firm to be nonresponsible
because its bid bond failed to provide good and sufficient surety
inasmuch as its individual sureties, as a result of other obligations,
exceeded their bonding capabilities. The contracting officer also based
his determination on the fact that the firm's individual sureties failed
to disclose other outstanding obligations on this and other bids as
specifically required. The contracting officer thereupon rejected SSI's
bid.
We need only consider the contracting officer's second basis for
rejecting SSI's bid. As stated above, Item 10 of the Affidavit
specifically required the individual sureties to disclose "all other
bonds." Both of SSI's individual sureties responded by inserting the
word "none" in Item 10. Soon after bid opening, the contracting officer
discovered, upon checking with other Air Force installations, that both
sureties failed to disclose other bonds on which they were sureties at
the time they executed the bonds for SSI. In fact, at least the
following bond obligations of the sureties were outstanding at the time
of the contracting officer's informal check with the Air Force
installations (the contracting officer only checked with Air Force
installations and did not check with other government installations):
PERFORMANCE PAYMENT BOND
CONTRACT AMOUNT BOND BOND COVERAGE
Pease AFB 50% 20% $271,804.18
($388,291.68)
Charleston AFB 25% 25% $241,623.50
($483,247.00)
K.I. Sawyer AFB 50% 50% $190,627.23
($190,627.23)
The contracting officer also found these same sureties firmly
obligated on at least 3 other bid bonds totaling $157,189.60. According
to the contracting officer, SSI's individual sureties indicated in Item
10 of these other hid bonds that they had no outstanding bond
obligations whatsoever. Based on his informal survey, the contracting
officer states that the sureties' obligations exceed their bonding
capacity. SSI does not deny the existence of these other bond
obligations but generally argues that these obligations should be
"prorated" because substantial work has been completed under the
contracts.
In response to why the sureties failed to disclose all bond
obligations, SSI states that it had been told by unnamed Air Force
contracting officers in the past that Item 10 of the Affidavit should
only be used to list bid bonds rather than performance and payment
bonds. In response to why the sureties did not list at least 3 bid
bonds, SSI states that it "was not the apparent low bidder on any of
those solicitations and in fact was the third, fourth, and fifth bidder
and not in line (for) an award." SSI acknowledges that it was not
initially in line for award under this solicitation either.
A surety must disclose all outstanding bond obligations, regardless
of the actual risk of liability on those obligations, to enable the
contracting officer to make an informed determination of the surety's f
inancial soundness. Dan's Janitorial Service, Inc., 61 Comp. Gen. 592
(1982), 82-2 C.P.D. P 217. Since Item 10 of the Affidavit provides
space for the surety to list "all other bonds on which (he is) surety,"
we believe that the duty of the individual surety to disclose all such
obligations, without exception, is clear. Singleton Contracting Corp,
B-216536, Mar. 27, 1985, 85-1 C.P.D.P 355. Moreover, a contracting
agency may consider the failure of a surety to disclose fully all
outstanding bond ubligatiuns as a factor in its responsibility
determinatiun. Id.
In reviewing a bidder's respunsibility, the cuntracting officer is
vested with a wide range uf discretiun and business judgment, and this
Off ice will defer to the cuntracting uff icer's decisun unless the
prutester shuws that there was bad faith by the procuring agency ur that
there was no reasunable basis fur the determinatiun. C.W. Girard, C.M.,
64 Comp. Gen. 704 (1984), 84-2 C.P.D. P 704.
We believe that, regardless of the actual liability that may remain
on any uutstanding bunds, a pattern of nundisclusure uf the bund
ubligatiuns of SSI's individual sureties on this and uther bids provides
the cuntracting ufficer with a reasunable basis upon which to find the
prutester nonrespunsible. In this connection, we further believe that
any determinatiun by the cuntracting officer uf the adequacy uf bunding
must be made based on a full disclusure uf the individual surety's
undertakings; it is nut a determinatiun that can be made by a surety's
nut disclusing the existence uf potential liability un outstanding
bunds. See Consolidated Marketing Netwurk, Inc.--Request fur
Reconsideration, B-218104.2, June 12, 1985, 85-1 C.P. D. P 675.
The protest is denied.
Harry R. Van Cleve
General Cuunsel
FILE: B-220070 85-2 CPD 604
DATE: November 26, 1985
MATTER OF: Federal Acquisition Management Training Service
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - ADVERSE AGENCY ACTION EFFECT - SOLICITATION
IMPROPRIETIES
Protest of alleged solicitation defects is untimely where the firm
initially protested to the contracting agency prior to the closing date
for receipt of proposals, but did not protest to GAO within 10 working
days of closing. Where the agency does not take corrective action
requested regarding solicitation defects, closing constitutes the
initial adverse action on an agency-level protest.
Federal Acquisition Management Training Service (FAMTS) protests any
award of contract under solicitation No. 00600-85-R-2755, issued by the
Naval Regional Contracting Center, Washington, D.C., for services
relating to a series of procurement training courses.
We dismiss the protest as untimely.
FAMTS initially protested to the agency by letter of July 16, 1985,
alleging improprieties apparent on the face of the solicitation and
requesting that the solicitation be canceled and reissued. The
protester contended that the solicitation should have been issued as a
total small business set-aside; that it should have been divided into
smaller units in order to enhance competition; and that the Statement
of Work as written was unreasonably restrictive.
The closing date for recipt of proposals was July 19, 1985. On
September 5, the contracting officer responded to FAMTS' initial
protest, and on September 13, FAMTS filed this protest with our Office.
FAMTS characterizes the protest as an "appeal" of its protest before the
agency, and has incorporated the July 16 protest herein. Although the
protester has added some arguments and comments to the initial protest,
the bases of protest are the same.
Section 21.2(a) of our Bid Protest Regulations requires that, if a
protest is filed initially with a contracting activity, a subsequent
protest to this Office must be filed within 10 working days after the
protester has "actual or constructive knowledge of initial adverse
agency action." 4 C.F.R. Section 21.2(a)(3) (1985). The quoted phrase
is a term of art that is construed to include knowledge that the agency
proceeded with the receipt of proposals in the face of the protest.
Computer Dynamics, Inc., B-217585, Jan. 25, 1985, 85-1 CPD Paragraph
106. Here, since the protest was filed in our Office on September 13,
some 8 weeks after the July 19 closing, the protest is untimely.
Furthermore, the fact that an agency later formally denied the
agency-level protest, as the Navy did here, does not alter the
protester's responsibility to conform to the filing requirements of our
Bid Protest Regulations in protesting to our Office. Id.
The protest is dismissed.
Ronald Berger
Deputy Associate General Counsel
FILE: B-220069 85-2 CPD 651
DATE: December 12, 1985
MATTER OF: Timeplex, Inc.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - BEST AND FINAL -
AMBIGUOUS - CLARIFICATION PROPRIETY
An agency was not obligated to seek verification or clarification of
a best and final offer where the record shows that the agency, while
aware of a discrepancy in the offer, reasonably assumed that its
interpretation of the offer was correct.
Timeplex, Inc. protests the award of a contract to Dataproducts New
England, Inc. under request for proposals (RFP) No. F19630-85-R-0002,
issued by the Department of the Air Force for Tempest-certified time
division multiplexers, /1/ statistical time division multiplexers, a
network control facility, software, and support services. The
procurement contemplated the award of a firm-fixed-price, indefinite
delivery, indefinite quantity contract not to exceed 96 months in
duration. Timeplex asserts that the award was improper because the Air
Force failed to afford the firm the opportunity to verify its best and
final cost proposal. We deny the protest.
Background
The RFP's evaluation criteria at section M provided that the award
would be made to that offeror whose proposal met all mandatory
requirements of the solicitation and which offered the lowest overall
present value contract life cycle cost (LCC) to the government. Section
M also stated that the offerors' pricing data must be submitted in the
format indicated in sections B and L of the RFP.
Section B provided various pricing tables (hereinafter B-tables) in
which offerors were to list the various hardware and software items,
descriptions, minimum/maximum quantities, unit purchase prices, unit
monthly maintenance charges, and any special pricing provisions
proposed. The RFP stated that the B-tables would be used by the
government for evaluating the proposals in accordance with the
government's LCC evaluation model, and as the basis for verifying that
all items necessary to meet the solicitation requirements were in fact
proposed and appeared in the price tables exactly as required.
Section L of the RFP provided offerors with instructions for
preparing the required "Expected Contract Life Cycle Cost Summary" table
(hereinafter L-table). The L-table was to be a summary of the various
prices contained in the B-tables, and was to reflect, on a fiscal year
basis, the expected contract life cycle costs for each cost element
being evaluated.
Four firms submitted proposals in response to the RFP. Discussions
were held, and one of the offerors ultimately withdrew from the
competition. Upon completion of discussions, the Air Force requested
the submission of best and final offers (BAFOs) and cautioned that any
BAFO which contained changes which were not adequately explained, or
which failed to provide "complete traceability" from the offeror's
previous position, might not be considered credible for purposes of the
final evaluation and source selection.
The Air Force performed LCC evaluations on the basis of the B-tables
provided in the offerors' BAFOs. Discrepancies were noted between each
of the firms' L-tables and the Air Force's calculations. With respect
to Timeplex's BAFO, the agency found that its own LCC evaluation was
$7.3 million, while Timeplex's L-table reflected a cost of only $5.9
million.
The Air Force states that it recomputed its LCC evalution and
reviewed Timeplex's initial proposal to see if there were any special
pricing provisions or discount factors not carried forward to the BAFO.
The Air Force concluded that there was no evidence of error in
Timeplex's B-tables. Accordingly, the Air Force concluded that its $7.3
million LCC evaluation based upon the B-tables in Timeplex's BAFO was
correct, and that the cost summaries provided by the firm in the L-table
had been erroneously calculated. The Air Force determined that this
discrepancy between its LCC evaluation and Timeplex's L-table was not a
sufficient reason to reopen discussions and, accordingly, awarded the
contract to Dataproducts as the offeror proposing the lowest contract
LCC to the government.
After being notified of the award to Dataproducts at a present value
contract price of $6.7 million, Timeplex contacted the Air Force to
ascertain the Air Force's evaluated LCC for Timeplex's BAFO and how the
Air Force had arrived at that amount. Upon being informed, Timeplex
indicated that it had identified an error in its proposal, but that the
submitted L-table was in fact correct. During a subsequent debriefing,
Timeplex stated that it had prepared the L-table first because of time
constraints, and then had intended to structure those costs summaries
back into its B-tables. The firm asserted that the B-tables were in
error as it had intended to offer monthly maintenance for the
multiplexers on the basis of one installed configuration (two
multiplexer units), rather than on a per unit basis. The firm
acknowledged that the B-tables should have stated a unit monthly
maintenance charge of $170 or should have specified that the $340 as
stated was on a "per pair" basis.
Timeplex contends that because its L-table, directly calculated from
the firm's proposal worksheets, was correct and showed a total offered
price of $5.9 million, it was entitled to the award as the low evaluated
LCC offeror. Timeplex strenuously urges that the Air Force, upon
observing the wide discrepancy between the Air Force's LCC evalution
(based upon the B-tables) and Timeplex's submitted L-table, was
obligated to notify the firm of a suspected mistake and give it an
opportunity to verify its BAFO. Timeplex therefore asserts that the Air
Force's failure improperly displaced it as the low offeror. We do not
agree.
Analysis
The Federal Acquisition Regulation (FAR), 48 C.F.R. Section 15.607
(1984), sets forth procedures with respect to mistakes in competitive
proposals disclosed prior to award. /2/ Generally, contracting officers
must examine all proposals for minor informalities or irregularities and
apparent clerical mistakes; communications with offerors to resolve
such matters are not viewed as discussions unless they would prejudice
other offerors. FAR, 48 C.F.R. Section 15.607(a). Otherwise, mistakes
are usually resolved through the normal course of discussions. FAR, 48
C.F.R. Section 15.607(b). However, when award is to be made without
discussions, and the contracting officer suspects a mistake in a
proposal, the regulations provide that he shall advise the offeror of
the suspected mistake, or identify the area of the proposal containing
the mistake, and request verification. FAR, 48 C.F.R. Section
15.607(c)(1). The regulations do not expressly deal with a situation
where an error is suspected as a result of what is contained in a BAFO.
See Klein-Sieb Advertising & Public Relations, Inc., B-194553.2, Mar.
23, 1981, 81-1 CPD Paragraph 214 (a case involving the analogous
provision of the Defense Acquisition Regulation, which is now superseded
by the FAR, 48 C.F.R. Section 15.607, supra).
In this case, we agree with the Air Force that the mistake Timeplex
allegedly made in its B-tables was not a minor informality or
irregularity or apparent clerical mistake within the meaning of the FAR,
48 C.F.R. Section 15.607(a). As provided by the FAR, 48 C.F.R. Section
14.405 (referenced in section 15.607(a)), a minor informality or
irregularity is one that is merely a matter of form rather than
substance, and which may be waived or corrected without prejudice to
other offerors as having an immaterial effect on price, quantity,
quality, or delivery when contrasted with the total cost or scope of the
supplies or services being acquired. Clearly, the error made by
Timeplex in the B-tables is not a minor informality or irregularity
because it has a material effect on price and correction of the mistake
would displace another offeror. Moreover, the alleged misstatement as
to intended monthly maintenance charges does not constitute an apparent
clerical error because it does not involve a simple mathematical
mistake, examples of which are set forth in the FAR, 48 C.F.R. Section
14.406-2(a) (also referenced in section 15.607(a)).
The requirement in section 15.607(c) that the contracting officer
request verification where a mistake is suspected also is inapplicable
because that section only deals with mistake situations where the award
is to be made without discussions, which is not the case here. There
were numerous discussions between the agency and Timeplex prior to the
submission of BAFOs, and the Air Force states that there was never any
suspicion of mistake in the firm's initial proposal. In fact, Timeplex
does not dispute that the alleged mistake first arose in its BAFO, and
as previously noted, the FAR simply does not address this situation.
Nevertheless, we do not think this necessarily excuses an agency from
requesting verification of a BAFO where a mistake is suspected.
Accordingly, the principal question to be resolved here is whether the
Air Force was on notice of a mistake in Timeplex's BAFO.
We do not accept Timeplex's assertion that the Air Force was on
notice of a mistake in Timeplex's BAFO due to the large discrepancy
between the B- and L-tables. As the Air Force states, it assumed that
Timeplex had merely miscalculated the various cost summaries in the
L-table, which, the Air Force emphasizes, served only as a summary of
the prices listed in the B-tables, and was not the basis for award. We
think that the Air Force's assumption was reasonable, given that the
normal procedure would have been to calculate the L-table summaries from
the various pricing elements stated in the B-tables. In this regard, we
fail to see how the Air Force could have known that Timeplex had
prepared its BAFO by first calculating the L-table summaries directly
from its worksheets and then attempting to structure those summaries
back into the B-tables. In short, although the Air Force was obviously
aware of the discrepancy, we do not find any evidence that it was on
notice of a mistake in the B-tables concerning the monthly maintenance
charge for multiplexers since that charge was clearly stated in the
B-tables on a unit price basis. /3/ Therefore, we do not find that the
Air Force was on notice of a potential error in Timeplex's offer
requiring verification. See Centennial Systems, Inc., B-201853.2, Apr.
16, 1982, 82-1 CPD Paragraph 350.
Furthermore, we find no legal support in the cases cited by Timeplex
for its position that the Air Force acted improperly by not reopening
discussions. For example, in American Management Systems, Inc.,
B-215283, Aug. 20, 1984, 84-2 CPD Paragraph 199, we held that where an
offeror's proposal indicated a unit charge of $2.50 per tape/per day in
one area of its proposal, and the price for tape storage in other areas
of the proposal reflected a unit charge of $2.50 per tape/per year, the
contracting officer was on notice of a material deficiency which should
have been resolved through discussions. That case is clearly
distinguishable from the present matter, however, because the
discrepancy there was apparent on the face of the initial proposal and
should have been detected during proposal evaluation. In essence, in
that case, the agency's action was a failure to conduct meaningful
discussions. Here, the alleged mistake was not apparent in Timeplex's
initial proposal but only arose in its BAFO after discussions had been
concluded.
The protest is denied.
Harry R. Van Cleve
General Counsel
(1) "Tempest" equipment has been certified by the National
Communications Security Subcommittee on Compromising Emanations as fully
meeting specified standards for the suppression of compromising
electromagnetic emanations. Multiplexers are transmitting and receiving
circuits which can carry two or more distinct signals simultaneously.
(2) The alleged mistake here was first asserted by Timeplex after
award, but the firm argues that the discrepancy between the B-tables and
L-table in effect "disclosed" a mistake to the Air Force prior to award.
(3) In this connection, we note that the review undertaken by the Air
Force after discovering the discrepancy between Timeplex's B- and
L-tables included an examination of Timeplex's Federal Supply Schedule
price list, which had been submitted with the firm's initial proposal.
The agency found that all maintenance charges were on a per unit basis,
and that Timeplex did not offer a "per pair" maintenance plan.
FILE: B-220067 86-1 CPD 66
DATE: January 22, 1986
MATTER OF: Western Alaska Contractors
CONTRACTS - MODIFICATION - REFORMATION - MISTAKE IN BID PRICE
Where contract was awarded to low bidder which alleged mistake in its
bid before award and parties agreed that contractor could pursue mistake
claim, contract should be reformed to increase price in amount equal to
an electrical subcontractor's quotation, because bid workpapers contain
clear and convincing evidence that electrical subcontractor's quotation
was mistakenly omitted from bid. However, contract should not be
reformed to reflect claimed markup on electrical subcontractor's
quotation, because bid workpapers do not show any markup or percentage
used to compute markup for subcontract work nor do workpapers show any
pattern of applying markup on individual cost items.
Western Alaska Contractors requests our review of the Army Corps of
Engineers' denial of its preaward request to correct a mistake in its
low bid submitted in response to invitation for bids No.
DACA85-85-B-0036 issued by the Alaska District of the Corps for
construction of miscellaneous mechanical and electrical maintenance and
repair projects at Shemya Air Force Base. Notwithstanding the alleged
mistake, Western Alaska was awarded the contract at its uncorrected bid
price of $2,455,000. The parties agreed, however, that Western Alaska
could present its preaward claim for bid correction to our Office for
resolution.
We find that Western Alaska's contract should be reformed to allow
upward correction representing the amount of a subcontractor quotation
which was inadvertently omitted by Western Alaska from its bid.
However, Western Alaska's request for correction in an additional amount
representing markup on the omitted subcontractor quotation is denied.
The basic facts are not in dispute. Six bids were received by the
Corps in response to the invitation, ranging from Western Alaska's low
bid of $2,455,000 to the highest bid of $3,947,957. Western Alaska's
bid was $741,000 (approximately 23 percent) below the next low bid and
$149,000 (approximately 6 percent) below the government estimate of
$2,604,000. Because its bid was considerably below all other bids and
the government estimate, Western Alaska checked its bid prices, and,
Shortly after bid opening, Western Alaska notified the Corps that it had
discovered that an electrical subcontractor's quotation of $237,483,
plus its markup of 32.67 percent of that amount ($77,586), had
erroneously been omitted from its bid price. Thus, Western Alaska
requested that the Corps allow it an upward correction of $315,069 which
would increase Western Alaska's total bid price to $2,770,069.
Western Alaska submitted its worksheets, memoranda documenting
subcontractor quotations it had received by telephone, and a sworn
statement by one of its partners certifying that all documents submitted
were the original documents used in calculating the bid and explaining
how the error occurred. Upon review of these materials, the contracting
officer determined that, while the worksheets confirmed the existence of
this mistake, Western Alaska should not be permitted to correct its bid
because it had failed to produce clear and convincing evidence of its
intended bid price. The matter was then referred to the Corps' Office
of the Chief of Engineers for additional consideration. Ultimately, the
Office of the Chief of Engineers agreed with the contracting officer's
findings and denied Western Alaska's request for correction. Western
Alaska subsequently accepted award of the contract at the original bid
price and the parties agreed that Western Alaska could present its claim
to our Office for resolution. Accordingly, Western Alaska has pursued
its claim before our Office and our decision is based upon a review of
all of the material previously presented to the corps, additional
correspondence submitted by the parties to our Office, and a conference
which we granted at Western Alaska's request.
According to Western Alaska, the mistake occurred as follows.
Western Alaska received a telephone quotation from its electrical
subcontractor in the amount of $237,483, and a new estimator entered
this amount on the bid spreadsheet in a column labeled "ELEC." Western
Alaska received a telephone quotation from its mechanical subcontractor
only 12-15 minutes before bid opening. The estimator entered the
mechanical subcontractor's quotation in a separate column of the
spreadsheet labeled "MECH" instead of putting both subcontractor
quotations in the same column as is the normal Western Alaska practice.
Since the mechanical subcontractor's quotation was 23 percent lower than
the only other subcontractor quotation for mechanical work, Western
Alaska decided to use it in the last few minutes before bid opening. In
the haste caused by the decision to use the new mechanical subcontractor
quotation, only the figure for the mechanical subcontract was
transferred to the bid summary worksheet which was used to prepare the
bid. Thus, because of the rush to compile the bid and because the
subcontractor quotations had originally been entered in two separate
columns on the spreadsheet, the electrical subcontract quote was
inadvertently omitted from the bid summary sheet and the markup for this
portion of the work was not calculated and added to the bid price.
Western Alaska asserts that the markup it would have added to its bid
for the electrical subcontractor's work can be computed by working
backwards from the figures which appear on its bid summary sheet which
shows a "subtotal" of $1,867,000 and a "basic bid" total of $2,477,000.
According to Western Alaska, the difference of $610,000 is entirely
comprised of markup and is equal to 32.67 percent of the subtotal.
Using the same percentage to calculate markup on the electrical
subcontractor quotation results in $77,586 additional markup. Thus,
Western Alaska wants to modify its present contract to reflect the
electrical subcontract ($237,483) plus markup ($77,586) for a total
upward adjustment of $315,069.
Essentially, the Corps admits that Western Alaska has provided
evidence in its worksheets that the electrical subcontractor quotation
was not carried forward from the spreadsheet to the bid summary sheet
for eventual incorporation into the bid. However, the Corps takes the
position that it is not possible to tell with certainty what Western
Alaska actually intended to bid. The Corps points out that the 32.67
percent now used by Western Alaska to compute markup does not appear
anywhere in the worksheets supplied by Western Alaska. The Corps also
points out that there are a number of unexplained discrepancies between
the figures which appear in the bid summary sheet and the figures used
in the bid. For example, the largest single discrepancy is contained in
the bid summary worksheet which shows a total bid of $2,477,000, or
$22,000 more than the total which Western Alaska actually bid. The
Corps further cites several instances in which Western Alaska rounded up
certain figures from its bid worksheets before transferring those
figures to the bid summary sheet. Moreover, the Corps argues that
Western Alaska has not explained why it waited until just a few minutes
before bid opening to transfer its electrical subcontractor quote to its
bid summary sheet when, in fact, this quote was received 2 days earlier.
Thus, the Corps concludes that Western Alaska has not provided
sufficient evidence of its intended bid to justify correction.
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.
Section 14.406-3(a) (1984). In judging the sufficiency of the evidence,
we consider factors such as the closeness of the corrected bid and the
next low bid as well as the range of uncertainty in the intended bid.
In general, the closer an asserted intended bid is to the next low bid,
the more difficult it is to establish that it was the bid actually
intended and, for this reason, correction may be disallowed when a
corrected bid would come too close to the next low bid. See Crimson
Enterprises, Inc., B-213239, May 8, 1984, 84-1 C.P.D. Paragraph 513.
See also Aleutian Constructors, B-215111, July 12, 1984, 84-2 C.P.D.
Paragraph 44. In this respect, we note that Western Alaska's bid would
still be $425,931 below the next low bid if the full $315,069 upward
correction were allowed.
From our examination of Western Alaska's workpapers, we conclude that
there is indeed clear and convincing evidence that Western Alaska merely
neglected to carry the electrical subcontractor's quotation of $237,483
forward from the spreadsheet to the final summary worksheet and the bid
itself. The workpapers contain memoranda of telephone quotations
received from an electrical subcontractor and a mechanical
subcontractor. The exact figures contained in each telephone quotation
memorandum are then listed in separate columns in the earliest workpaper
-- the spreadsheet. However, Western Alaska's final workpaper -- the
bid summary sheet -- contains only the mechanical subcontractor's quoted
price but not the price quoted by the electrical subcontractor.
Furthermore, the workpapers show that subtotals representing all other
cost components were transferred from the initial spreadsheet to the
final bid summary sheet. Western Alaska's explanation of how the
electrical subcontractor's quote was omitted when figures were
transferred from one workpaper to another is plausible in view of the
last minute substitution of one subcontractor for another and the
inexperience of the estimator. Thus, we conclude that it is clear that
the electrical subcontractor quotation of $237,483, was erroneously
omitted from the calculation of Western Alaska's bid.
Concerning the markup of $77,586 which Western Alaska claims it would
have added to its bid based upon the amount of the electrical
subcontractor's quotation, we agree with the Corps that the evidence
does not show that this amount would have been added to Western Alaska's
bid if the electrical subcontractor's quotation had not been erroneously
omitted. The worksheets contain no indication that a particular
percentage was used by Western Alaska to calculate markup for any
particular direct cost item. Furthermore, comparison of the individual
cost components contained in the spreadsheet and in the final bid
summary worksheet with the prices charged for those items in the actual
bid reveals no consistent pattern for adding markup to various cost
items. In our view, the omission of any worksheet entries which would
show any markup related to subcontract work and the lack of any
consistent pattern of applying markup to individual cost elements are
significant. See Franco, B-214124, May 1, 1984, 84-1 C.P.D. Paragraph
488 at 8. While Western Alaska argues that the markup can be calculated
by working from its bid summary worksheet in the manner described above,
we do not agree. In fact, the bid summary worksheet shows a figure of
$500,000 for "overhead & fee." Thus, it appears that Western Alaska may
have used a flat fee to incorporate markup into its bid rather than
adding a particular percent for markuo to individual cost items, and,
therefore, Western Alaska might not have increased the markup charged in
its bid at all. In any event, we agree with the Corps that the amount
of any additional markup related to the electrical subcontract work is
at best speculative. Accordingly, we conclude that Western Alaska has
not presented clear and convincing proof of the amount of any additional
markup it intended to bid, and, therefore, the contract should not be
modified to adjust for markup. See Pneumatic Construction Co.,
B-207871, Aug. 31, 1982, 82-2 C.P.D. Paragraph 193.
Western Alaska argues that it should be allowed to correct for both
the omitted electrical subcontract work and related markup because its
bid will remain low despite whatever range of uncertainty there might be
in determining its intended markup. In support of this argument,
Western Alaska cites several prior decisions of our Office, including
Fortec Contructors, B-189949, Nov. 15, 1977, 77-2 C.P.D. Paragraph 372,
as well as the decision by the United States Court of Claims in Chris
Berg, Inc. v. United States, 426 F.2d 314 (Ct. Cl. 1970), as standing
for the proposition that bid correction should be allowed even where the
intended bid cannot be established with certainty as long as the range
of uncertainty is relatively small compared to the difference between
the corrected bid and the next low bid.
While we agree that, in limited circumstances, correction can be
allowed even when the intended bid cannot be determined exactly and that
such correction is not inconsistent with the standard of requiring clear
and convincing evidence of the intended bid (see, for example, Dadson
Corp., B-210413, June 7, 1983, 83-1 C.P.D. Paragraph 618 and Western
States Construction Co., Inc., B-191209, Aug. 29, 1978, 78-2 C. P.D.
Paragraph 149), we do not believe that the circumstances of the present
case present a narrow range of uncertainty regarding the claimed markup.
As stated above, our review of the workpapers shows no evidence that
any markup above the flat $500,000 figure for "overhead & fee" would
have been added because of the electrical subcontract work. In any
event, we have held that, if there is a range of uncertainty regarding
the intended bid, correction should place the contractor at the bottom
end of that range, not at the top end of the uncertain range as Western
Alaska claims here. See Vrooman Constructors, Inc., B-218610, Oct. 2,
1985, 85-2 C.P.D. Paragraph 369 at 4. Thus, we believe that the
evidence supports correction of the omission of the electrical
subcontractor quotation but not markup based upon that quotation.
In connection with the Corps' concern over a number of discrepancies
it found in the various workpapers submitted by Western Alaska, we do
not view the alleged discrepancies as precluding correction in this
case. Several of the alleged inconsistencies appear to be the result of
the bidder's rounding off its figures during the calculation of its bid
prices; such rounding off does not preclude correction of an erroneous
bid if the intended bid can be shown from the workpapers. See George C.
Martin, Inc., B-187638, Jan. 19, 1977, 77-1 C.P.D. Paragraph 39 at 4;
see also Chris Berg, Inc. v. United States, supra. Moreover, most of
the discrepancies which were found by the Corps concern portions of the
worksheets which have little relation to the type of error claimed by
Western Alaska or to the type of work affected by the error;
accordingly, these discrepancies do not preclude correction since the
failure to transfer the electrical subcontract quotation to the bid has
been established by clear and convincing evidence. Franco, B-214124,
supra, 84-1 C.P.D. Paragraph 488; Active Fire Sprinkler Corp., 57 Comp.
Gen. 438 (1978), 78-1 C.P.D. Paragraph 328. Finally, in view of the
fact that Western Alaska's uncorrected bid was for a total of $2,455,000
and the largest discrepancy pointed out by the Corps was only $22,000 or
less than one percent of the total bid price, the alleged discrepancies
are de minimis, having only a negligible combined effect on the bid
price, and do not preclude correction. Chris Berg, Inc. v. United
States, supra; see also Dadson Corp., B-210413, supra, 83-1 C.P.D.
Paragraph 618.
We therefore recommend that the Corps reform Western Alaska's
contract to increase the price by $237,483, representing the omitted
electrical subcontract quotation.
Harry R. Van Cleve
General Counsel
FILE: B-220066 85-2 CPD 669
DATE: December 16, 1985
MATTER OF: Polaris, Inc.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION - COST
REALISM ANALYSIS - REASONABLENESS
1. There is no merit to a contention that the contracting agency
improperly adjusted the protester's proposed indirect costs for cost
realism based on Defense Contract Audit Agency (DCAA) recommended rates
where the protester was given a copy of the DCAA audit report and had an
opportunity either to change or justify its proposed rates in its best
and final offer, but did not do so, and the agency reasonably concluded
that the proposed rates remained unrealistic.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION - COST
REALISM ANALYSIS - REASONABLENESS
2. Where a contracting officer recommends that a technical score
given to an offeror be increased and also determines that the
protester's cost proposal should be upwardly adjusted to reflect cost
realism, the source selection authority's concurrence in those
recommended changes to form the basis for his award decision is not
subject to challenge where the decision is both reasonable and
consistent with the solicitation's established evaluation scheme.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - QUALIFICATION OF
OFFERORS
3. Generally, it is within a contracting officer's discretion not to
conduct a preaward survey, and such a decision will not be reviewed
absent a showing of possible fraud or bad faith.
Polaris, Inc. protests the proposed award of a contract to John M.
Cockerham and Associates, Inc. (JMCA) under request for proposals (RFP)
No. DASG60-85-R-0039, issued by the Department of the Army, Ballistic
Missile Defense Systems Command. The procurement is for the acquisition
of automatic data processing services to support the activity's
management information system, and contemplates the award of a
cost-plus-fixed-fee contract for a one-year period, with an option to
renew the contract for two additional two-year periods. Polaris
complains that the proposals were not evaluated properly and that the
Army's source selection decision was unreasonable. We deny the protest.
Background
The RFP provided that the award would be made to that responsible
offeror whose proposal was determined to be most advantageous to the
government, technical, management, total evaluated cost, and other
factors considered. The RFP also stated that the cost evaluation would
include both the basic performance period and the option periods and
advised that evaluated cost was of secondary importance relative to
technical considerations, but could become dominant if technical
proposals were found to be generally comparable.
Nine proposals were received in response to the RFP. Upon initial
evaluation by the activity's proposal evaluation team, only the
proposals of Polaris and JMCA were determined to be within the
competitive range. The Polaris proposals /1/ received identical
technical scores that were some 8 percent higher than JMCA's score.
Discussions were held, and best and final offers were then requested and
submitted.
After evaluating the best and final offers, the proposal evaluation
team determined that Polaris' proposals should retain the same technical
score. JMCA's score was slightly increased because the firm had
provided a requested clarification in one area of its offer. The
proposal evaluation team then concluded that selection of Polaris would
be most advantageous because Polaris was the incumbent contractor for a
portion of the work included in the RFP and award to Polaris thus would
ensure continuity of service.
However, the contracting officer did not agree with the evaluation
team's conclusions for several reasons. Pertinent here, the contracting
officer determined that the evaluation team had erroneously scored
JMCA's proposal in the area of personnel experience by downgrading the
proposal for not providing specific identification of and resumes for
the programmer data base technician and operator/data entry positions.
The contracting officer determined that the RFP did not require the
submission of this information for other than key personnel.
Accordingly, he recommended that the firm's total technical score be
raised so that it then became some two percent lower than Polaris' score
for proposals "A" and "B". /2/
In addition, the contracting officer considered Polaris' best and
final total proposed costs unrealistically low because the firm had not
based its indirect costs (labor, overhead and general and administrative
(G&A) expense) on the recommended Defense Contract Audit Agency (DCAA)
rates that were provided to both Polaris and JMCA during discussions.
The contracting officer noted that JMCA had utilized those rates whereas
Polaris had not. JMCA's best and final offer was some $2,000 less than
Polaris' best and final proposal "A" and some $63,000 less than the best
and final proposal "B". After Polaris' proposed costs for Proposals "A"
and "B" were upwardly adjusted for cost realism purposes to reflect the
DCAA rates, Polaris' offers became some $150,000 and $200,000 higher,
respectively, than JMCA's best and final offer.
The contracting officer recommended that JMCA be awarded the contract
as it was the low evaluated total cost offeror, and because the two
percent difference in technical point scores was considered to be
insignificant. The source selection authority concurred with the
contracting officer's recommendation and selected JMCA for the award.
Polaris primarily challenges the source selection decision on the
grounds that: (1) the Army improperly adjusted the firm's best and
final offer for cost realism purposes without affording the firm the
opportunity to correct any deficiencies through discussions and (2) that
the source selection authority's recommendation to award to JMCA was
improper because it was based on the contracting officer's unilateral
decision to increase JMCA's technical score and upwardly adjust Polaris'
best and final proposed costs as the result of the cost realism
analysis. Polaris also contends as a corollary issue that the
contracting officer erred in deciding to waive a preaward survey of
JMCA.
Analysis
(1) Cost Realism Adjustment
The Federal Acquisition Regulation, 48 C.F.R. Section 15.605(d)
(1984), recognizes that in awarding a cost-type contract such as
contemplated here, an offeror's proposed costs should not be
controlling. Accordingly, evaluated costs rather than proposed costs
provide a sounder basis for determining the most advantageous proposal
to the government, Teledyne Ryan Aeronautical, 56 Comp. Gen. 635 (1977),
77-1 CPD Paragraph 352, and contracting agencies must perform a cost
realism analysis before awarding a cost-type contract. Dynamic Science,
Inc., B-214111, Oct. 12, 1984, 84-2 CPD Paragraph 402. Because the
agency clearly is in the best position to make determinations as to the
realism of proposed costs, this Office will not question those
determinations unless they are shown to be unreasonable. Management
Services, Inc., B-206364, Aug. 23, 1982, 82-2 CPD Paragraph 164.
Here, the Army upwardly adjusted the indirect cost rates in Polaris'
best and final offer for cost realism purposes based on DCAA's
recommended rates. The Army states that, during the course of
discussions, Polaris was advised that DCAA's projected labor overhead
and G&A rates had been relied upon by the Army in evaluating Polaris'
initial offer, and that Polaris was furnished with a copy of DCAA's
audit report prior to submitting its best and final offer. However,
Polaris notes that the audit report stated that DCAA's findings were
"qualified" by the absence of a 5-year budget, since DCAA could not
precisely determine what effect the existence of such a budget would
have had on its findings. Polaris states that it then developed a
5-year budget and that the indirect costs rates contained in its best
and final offer reflected that budget. Polaris points out that it
informed the Army of this prior to submitting its best and final offer,
and that it advised the Army that it completely disagreed with DCAA's
"qualified" projected rates. Accordingly, in Polaris view, the cost
realism analysis which resulted in an upward adjustment to the firm's
best and final offer was flawed because it was based upon DCAA's
"qualified" projected rates which had been computed in the absence of
the 5-year budget.
Polaris also asserts that the Army improperly did not advise Polaris
that DCAA's "qualified" rates would be utilized in the cost realism
analysis of best and final offers and did not afford the firm the
opportunity to refute or rebut the DCAA report through further
discussions. Polaris asserts in this regard that the contracting
officer expressly reopened discussions after the receipt of best and
final offers, but never made any reference to the continued use of the
DCAA "qualified" rates in evaluating the firm's best and final cost
offer.
We find no basis to object to the use of DCAA's indirect rates in
evaluating Polaris' best and final offer for cost realism purposes. The
Army states that when it reviewed Polaris' best and final offer, which
contained indirect rates reflecting the firm's new 5-year budget, the
firm's indirect rates were still considered to be unrealistically low,
especially in the last two option years (the only years showing any cost
savings over JMCA's proposal). For example, the agency states that
Polaris' G&A rate in its original proposal (absent a 5-year budget) was
16 percent, whereas the DCAA recommended rate was 20 percent. In its
best and final offer, Polaris' G&A rate for the five contract years was,
respectively, 16 percent, 15.9 percent, 13.6 percent, 13.6 percent and
12.1 percent. Since these rates were found to remain unrealistically
low notwithstanding Polaris' new 5-year budget, we see no basis upon
which to question the reasonableness of the determination to adjust
Polaris' best and final offer to reflect cost realism. See Management
Services, Inc., B-206364, supra.
To the extent that Polaris contends that the Army was required to
conduct further discussions so that the firm could explain or refute the
findings in the DCAA audit report, we find that the contention is
without merit because Polaris clearly had the opportunity to do so in
its best and final offer. In this regard, the contracting officer's
letter to Polaris requesting the submission of its best and final offer
specifically stated that:
"Following is a summary of cost and fee amounts discussed. The
contractor was provided a copy of the DCAA Audit Report after
negotiations."
We believe that the only reasonable assumption to be drawn from this
language is that the Army expected that the indirect rates recommended
by DCAA would be used by Polaris in preparing its best and final offer,
and that those rates would form the basis for any subsequent cost
realism analysis, unless Polaris demonstrated in its best and final
offer that any alternative rates proposed by the firm were reasonable.
Thus, Polaris had the opportunity to demonstrate that its best and
final indirect rates were reasonable and realistic, and the firm could
have taken specific objection to the rates recommended in the audit
report by explaining how its new 5-year budget obviated the DCAA's
original findings. However, the firm simply stated in the cover letter
to its best and final offer that the indirect rates proposed were now
"reflective" of its new budget. Under these circumstances, we find that
the Army met its obligation to conduct meaningful discussions by
advising the firm of the unrealistic cost elements noted in its initial
proposal, and by affording the firm the opportunity to explain or
correct those perceived deficiencies through submission of a best and
final offer. See ATI Industries, B-215933, Nov. 19, 1984, 84-2 CPD
Paragraph 540.
Polaris also relies upon a recent decision by the United States Court
of Appeals for the District of Columbia Circuit. In Delta Data Systems
Corp. v. Webster, 744 F.2d 197 (D.C. Cir. 1984), the court held that
although an agency is not required to discuss with an offeror every new
piece of information that comes to the agency's attention, it is an
abuse of the agency's discretion to act on the basis of information
which is of uncertain effect, is critical to the source selection
decision, and which the offeror is likely to be able to interpret or
explain through discussions, without affording the offeror the
opportunity to do so. Hence, Polaris contends that because the
allegedly flawed cost realism analysis was crucial to the source
selection decision, the holding in Delta Data Systems is applicable
here. We do not agree.
Unlike the situation in Delta Data Systems, where the offeror was not
given an opportunity to refute the negative financial information that
was critical to the agency's source selection decision, Polaris had an
opportunity to explain or refute the DCAA audit report in its best and
final offer. As previously discussed, we find nothing in the record to
support the firm's assertion that it was unaware that the report would
be utilized by the Army in evaluating its best and final offer.
To the extent Polaris alleges that the Army improperly reopened
discussions after the receipt of best and final offers without advising
it of the continued utilization of DCAA's "qualified" rates, and without
giving it an opportunity to revise its proposal, the Army categorically
denies that discussions were reopened. The Army states that a
contracting specialist contacted Polaris by telephone after the best and
final closing date only to request Polaris to verify that the cost of
acquiring another computer system was not included in Polaris' direct
costs for Proposal "B." We note that Polaris' own letter responding to
the contracting specialist's telephone call and specifically refers to
the call as a "clarification request." Accordingly, we find Polaris'
allegation without foundation.
(2) Propriety of Source Selection Decision
Polaris argues that the source selection authority's recommendation
to award to JMCA was improper because it was reached only after the
contracting officer had unilaterally increased JMCA's technical score
and upwardly adjusted Polaris' proposal as the result of the cost
realism analysis. Polaris emphasizes that the Army's proposal
evaluation team recommended Polaris for the award, but that the
recommendation was changed by the contracting officer before the matter
reached the level of the source selection authority. In Polaris' view,
since the evaluation results were altered before the source selection
authority made his decision, that decision was not valid.
The record does not support Polaris' allegation that the contracting
officer unilaterally rescored Polaris' proposal. Rather, the
contracting officer's alleged changes to the technical evaluation
results actually were couched in terms of a recommendation to the source
selection official. The record shows that before concurring with this
recommendation, the source selection authority made an independent
determination that JMCA's technical score should be increased.
In this connection, the source selection authority's decision
memorandum states that after consulting with two members of the proposal
evaluation team to ascertain their scoring rationale, the source
selection authority agreed with the contracting officer that JMCA's
proposal in the area of personnel experience had been given too low a
score by the evaluators. The memorandum goes on to state "As Source
Selection Authority, I hereby rescore personnel . . . ." The source
selection authority then determined that the proposals were technically
equal, and that award should be made to JMCA as the low cost offeror.
It is well-settled that, in a negotiated procurement, source
selection officials are generally bound neither by the technical scores
nor by the recommendations of technical evaluators. Grey Advertising,
Inc., 55 Comp. Gen. 1111 (1976), 76-1 CPD Paragraph 325. The only
limitation on this broad discretion is that the selection authority's
use of the results of technical and cost evaluations must be reasonable
and consistent with the RFP's stated evaluation factors. See New Mexico
State University/Physical Science Laboratory, B-215348, Nov. 6, 1984,
84-2 CPD Paragraph 504. On the basis of the record before us, we find
no impropriety in the source selection authority's decision to rescore
JMCA's proposal. Furthermore, as previously discussed, we find nothing
objectionable in the determination to adjust Polaris' best and final
offer to reflect DCAA's recommended indirect rates.
Regarding the decision to select JMCA for award, we have consistently
held that source selection officials may reasonably determine that
competing proposals are essentially equal in technical terms although
there may be a percentage difference in the technical point scores. In
Grey Advertising, Inc., 55 Comp. Gen. 1111, supra, we found a
determination of technical equality to be reasonable where the point
difference was 15.8 percent, and we have reached the same conclusion
where there was a 14.4 percentage difference. Harrison Systems Ltd., 63
Comp. Gen. 379 (1984), 84-1 CPD Paragraph 572. We see no basis to
question the determination here that the 2 percent difference in
technical scores was insignificant. Therefore, since the RFP
specifically provided that evaluated cost might become dominant when a
finding of essential technical equality was made, and JMCA's total
evaluated cost was low, we believe that selection of JMCA for the award
was reasonable. See Systematics General Corp., B-214171, Jan. 22,
1985, 85-1 CPD Paragraph 73.
(3) Waiver of Preaward Survey
As to the contracting officer's decision to waive a preaward survey
on JMCA, we have held that a preaward survey is not a legal prerequisite
to an affirmative determination of responsibility. Accordingly, it is
within the contracting officer's discretion not to conduct a preaward
survey, and we will not review such a decision absent a showing that the
contracting officer may have acted fraudulently or in bad faith. Freund
Precision, Inc., B-216620, Oct. 23, 1984, 84-2 CPD Paragraph 456. No
such showing has been made here.
The protest is denied.
Harry R. Van Cleve
General Counsel
(1) Polaris submitted two alternate proposals, "A" and "B",
respectively offering on-site and off-site performance of the required
services.
(2) Because this is still a preaward situation, the Army has
furnished the source selection documents to this Office for our in
camera review, and has not provided the precise technical scores to
Polaris. Instead, in the administrative report as furnished to both
this Office and Polaris, the Army has expressed the difference in
technical scores in terms of percentages. Although the Army has not
informed Polaris as to JMCA's total best and final proposed cost, the
Army has clearly indicated in its report the monetary difference between
JMCA's proposed cost and Polaris' proposed costs as subsequently
adjusted for cost realism purposes.
FILE: B-220065.2 85-2 CPD 560 DATE: November 15, 1985
MATTER OF: Memoquex
DIGEST:
CONTRACTS - PROTESTS - MOOT, ACADEMIC, ETC. QUESTIONS - SOLICITATION
CANCELED
A protest of the; agency's rejection of a proposal is
dismissed as academic where the agency canceled the solicitation
under which the proposal was submitted.
Memorex protests the rejection of its proposal as technically
unacceptable under request for proposals (RFP) No. N00600-85-R-1166
issued by the Naval Regional Contracting Center for ADP tape drives and
related equipment.
Memorex contends that although its proposal was initially considered
acceptable, the Navy now proposes to reject the Memorex proposal because
the equipment offered does not have a tape rewind speed of 50 seconds
per 2400 feet as required by the solicitation. Memorex argues that this
requirement exceeds the agency's needs and further asserts that the Navy
proposes to accept another offeror's proposed IBM model 3420-8, which
the protester argues does not meet the size requirements of the
solicitation. Finally, Memorex complains that the Navy improperly called
for a second round of best and final offers when it should have made
award to Memorex based on that firm's initial best and final offer.
The Navy has advised our Office that the solicitation has been
canceled because funding for the equipment expired at the end of the
fiscal year. Our Office will not consider a protest when the underlying
solicitation is canceqled since the cancellation renders the protest
academic. Triumph United Corp., B-217482, Feb. 14, 1985, 85-1 C.P.D. P
200.
Accordinuly, the protest is dismissed.
Ronald Berger
Deputy Associate General Counsel
FILE: B-220064, B-220182.2 85-2 CPD 658
DATE: December 13, 1985
MATTER OF: Western Roofing Service
BIDS - INVITATION FOR BIDS - AMENDMENT - FAILURE TO ACKNOWLEDGE - BID
RESPONSIVE
Amendment requiring performance of significant work by certain date
if not material, and bidder's failure to acknowledge the amendment thus
does not render its bid nonresponsive, since the amendment did not
increase the bidder's obligations under the original invitation for
bids.
Western Roofing Service protests the determination by the Corps of
Engineers that the potential awardee under invitation for bids (IFB)
Nos. DACA83-85-B-0243 and -0244 is responsive despite its failure to
acknowledge an amendment to the IFBs. We deny the protests.
The IFBs, issued on August 7, 1985, called for reroofing of Moanalua
Terrace Housing, Oahu, Hawaii. The IFBs were amended twice, on August
23 and 29. The second amendment provides as follows:
"FISCAL YEAR MAINTENANCE AND REPAIR PROJECT For any fiscal year
maintenance and repair project awarded in September 1985, the
contractor is required to have completed significant contract work
prior to January 1, 1986. Completion of contract work may be
evidenced by performance of signifcant work at the site, or in the
event the physical on-site evidence of performance does not exist,
by documentary evidence that significant costs have been incurred
or that materials have been ordered for the contract work.
Failure, prior to January 1, 1986, to either perform significant
work at the site or furnish documentary evidence that significant
costs have been incurred or material has been ordered shall
constitute failure to prosecute diligently the contract work
within the meaning of the General Contract Clause entitled Default
(Fixed-Price Construction)."
According to the Corps, the amendment implemented an Army policy
directive intended to ensure that work under the contract was for
genuine needs of the fiscal year in which the contract was awarded and
funded.
Bid opening was held on September 6. The low bidder under the IFBs,
DeNarde Construction Company, failed to acknowledge amendment No. 2
under both IFBs. The contracting officer decided that DeNarde's bids
were responsive despite its failure to acknowledge the amendment, based
on his determination that it was not a material amendment. The
protester challenges the contracting officer's determination, arguing
that the amendment imposed additional legal obligations on the
contractor and changed the legal relationship between the contractor and
the government by revising the performance schedule to require
significant work before January 1, 1986, Award has not yet been made
pending resolution of the protest.
A bid that does not include an acknowledgment of a material amendment
must be rejected because, absent such an acknowledgment, the bidder is
not obligated to comply with the terms of the amendment, and its bid
thus is nonresponsive. Great Lakes Dredge & Dock Co., B-213551, Dec.
13, 1983, 83-2 CPD Paragraph 681. An amendment is material, however,
only if it has more than a negligible effect on price, quantity,
quality, or delivery of the item or services bid upon, Federal
Acquisition Regulation, 48 C.F.R. Section 14.405(d)(2); Owl Resources
Co., B-210094, Apr. 29, 1983, 83-1 CPD Paragraph 461, or if the
amendment changes the legal relationship between the parties as, for
example, if the amendment increases the contractor's obligations.
Versailles Maintenance Contractors, Inc., B-203324, Oct. 19, 1981, 81-2
CPD Paragraph 314. Conversely, failure to acknowledge an amendment
which imposes no substantial or different requirements on the bidders
may be waived. Emmet R. Woody, B-213201, Jan. 26, 1984, 84-1 CPD
Paragraph 123.
In this case, the original IFBs set completion deadlines of 330 days
for one project, 410 days for the other. With regard to the schedule
for performance, the IFBs required that the contractor commence work
within 7 days after receiving the notice to proceed and then "prosecute
the work diligently." Under the amendment, the contractor is required to
complete "significant contract work" before January 1, 1986; failure to
do so is made a basis on which to terminate the contract for default.
The Corps argues that the amendment did not materially change the
contractor's obligation with regard to the rate of performance in view
of the original requirement that work be commenced within 7 days and
performance proceed diligently. The protester disagrees, arguing that
the amendment increased the contractor's obligation. We recognize that
award was not made by September 30, 1985, and therefore the clause no
longer applies to any contract awarded under the IFBs. The protester
argues, however, that it had to consider the clause when it submitted
its bids and that DeNarde gained an advantage because it did not have to
adjust its bids to account for the increased obligation which the
protester contends was added by the amendment.
We are unpersuaded by the protester's position because, while the
protester argues that the amendment required accelerated performance, it
has offered no evidence to show how its proposed work schedule, and,
consequently, its bids, were affected by the requirement that
significant work be performed by January 1. Moreover, while the
amendment does not define the degree of work which constitutes
"significant work," based on a reasonable interpretation of the term, we
find that commencing work as required after the Corps' planned September
1985 award date, and proceeding diligently thereafter, would necessarily
result in completion of significant work by the January 1 deadline.
Accordingly, we find that the amendment was not material because it did
not change the contractor's obligation under the original IFBs. As a
result, DeNarde's failure to acknowledge the amendment did not render
its bids nonresponsive.
The protests are denied.
Harry R. Van Cleve
General Counsel
FILE: B-220062 86-1 CPD 43
DATE: January 15, 1986
MATTER OF: DSP, Inc.
CONTRACTS - PROTESTS - ALLEGATIONS - UNSUBSTANTIATED
1. Protest by incumbent contractor that agency has vastly
understated the number of service calls required to be performed is
denied since allegation is based upon protester's misinterpretation of
what repair items should be treated as service calls.
CONTRACTS - PROTESTS - ALLEGATIONS - UNSUBSTANTIATED
2. Protest that agency's estimates for painting, termite repair,
roof repair and floor refinishing are inaccurate is denied where record
does not establish that estimate is not based on the best information
available.
CONTRACTS - PROTESTS - ALLEGATIONS - UNSUBSTANTIATED
3. Allegation that solicitation is defective because it does not
include a specific provision which offers incentives to contractors to
make cost-cutting suggestions is denied since law does not require that
a specific incentive clause for this purpose be included in every
solicitation which is issued.
DSP, Inc., protests any award under invitation for bids (IFB) No.
F41612-85-B-0046 issued by the Department of the Air Force for the
maintenance of military family housing units at the Sheppard Air Force
Base, Texas. DSP, the incumbent contractor, contends that the IFB does
not provide an accurate estimate nor an adequate description of the work
to be accomplished. In addition, DSP argues that the IFB is defective
since it does not contain the incentives allegedly required by 10
U.S.C.A. Section 2301(b)(5) (West Supp. 1985) to encourage contractors
to take actions which reduce costs.
We deny the protest.
The IFB was issued on June 10, 1985, and solicited bids on a
fixed-price basis for the period October 1, 1985, to September 30, 1986,
with two 1-year options. Three amendments were issued and, at bid
opening, the Air Force received nine bids. DSP did not submit a bid,
but filed this protest with our Office prior to bid opening. The Air
Force indicates that the work has been moved in-house pending the
resolution of this protest.
The IFB is divided into several line items. Item No. 0001 requires
bidders to provide a fixed monthly price for all services and materials
necessary for maintaining the family housing units. The actual work to
be performed under this item is further divided into five categories,
including management, service calls, change of occupancy maintenance
(COM), recurring equipment maintenance and recurring exterior facilities
maintenance. In addition, the IFB specifies a different job response
time for service calls and COMs and differing penalties for failure to
complete work within the required time for these two categories.
Item No. 0002 is the total estimated cost of materials for which the
contractor may be reimbursed under the contract and the IFB requires
bidders to price this item at $210,000. Items Nos. 0003-0006 are for
painting, termite repair, roof repair and floor refinishing and are
reimbursed on a per-square-foot basis after the deduction of a stated
minimum quantity.
DSP argues that the Air Force has vastly understated the number of
service calls under item No. 0001 and, as a result, concealed from
bidders the true amount of work actually required. The IFB estimates an
average of 1,041 service calls per month and a yearly estimate of 588
units for which COM is required. DSP contends that there are, in fact,
some 25,000 additional service calls per year that should be disclosed
in the IFB. DSP indicates that the Air Force conducts pretermination
inspections of units prior to vacancy and that work which is discovered
at that time is routinely deferred until the COM rather than
accomplished as a service call. DSP indicates that the performance
period for work to be accomplished under a COM is much more stringent
and that the Air Force's failure to disclose the fact that approximately
two-thirds of all "service call" items will be performed in this manner
is improper.
With respect to item No. 0002, DSP contends that it was only
reimbursed $28,000 in material costs this past year. DSP argues that
the difference between this amount and the $210,000 indicated in the IFB
is an additional cost of which bidders should be made aware. Also, DSP
contends that the actual orders for items Nos. 0003-0006 ranged from
0-30 percent of the government's estimate. DSP argues that the IFB is
defective, precludes full and open competition and requests that an
amended solicitation be issued and the requirement recompeted.
The Air Force argues that the estimates contained in the IFB are
accurate and that the IFB provides an adequate basis for bidders to
submit intelligent bids. The Air Force indicates that its estimate for
item No. 0001 was based on historical data and, in this regard, the Air
Force states that DSP was required to perform an average of 1036 service
calls per month and that 446 units were turned over to DSP for COM this
past year. The Air Force contends that the additional "service calls"
alleged by DSP are based on DSP's interpretation of What constitutes a
service all under the contract and that DSP has improperly added
together COM items and service calls to arrive at its inflated total.
In addition, the Air Force indicates that under the IFB, contractors
are to bear the cost of all materials, parts and supplies up to $50 per
item per job order and that reimbursement is made only for costs above
that amount. Also, the Air Force states that the estimates for the
remaining items were derived from engineering estimates. The Air Force
indicates that exterior painting estimates were based on the type of
material on each unit and its age and condition. The estimate for major
roof repair was based on repairs being required from major storms and
was not necessarily predictable. Also, the estimate for major termite
damage repair represented the engineers best estimate and the major
floor refinishing estimate was based not only on prior experience, but
also on planned changes in the type of flooring to be used. The Air
Force argues that it utilized a logical basis to estimate the quantities
in the solicitation, that adequate competition was obtained and that
DSP's protest should be denied.
As a general rule, a procuring agency must give sufficient detail in
the IFB to enable bidders to compete intelligently and on a relatively
equal basis. Hero, Inc., 63 Comp. Gen. 117 (1983), 83-2 CPD Paragraph
687. Where estimates are provided in a solicitation, there is no
requirement that they be absolutely correct. Rather, they must be based
on the best information available and present a reasonably accurate
representation of the agency's anticipated actual needs. Aleman Food
Service, Inc., B-219415, Aug. 29, 1985, 85-2 CPD Paragraph 249. It is
the protester's burden to establish that the stated estimates are not
based on the best information available or are otherwise deficient.
Richard M. Walsh Assocs., Inc., B-216730, May 31, 1985, 85-1 CPD
Paragraph 621.
DSP's argument that the Air Force's information concerning service
calls is vastly understated is based upon its assertion that the
solicitation requires repair items identified by Air Force housing
inspectors during a pretermination inspection to be treated as service
calls rather than repaired during COM. The solicitation, however,
defines COM (para. 2.2.4) to include the inspection, repair, maintenance
and service of the housing units vacated. In addition, the solicitation
states (para. 5.3.1) that work items identified during a pretermination
inspection are to supplement the total requirements of Technical exhibit
9, which lists the items required to be checked by the contractor during
a COM. In our view, these provisions, when rea together, clearly
demonstrate that the work items identified by Air Force inspectors are
additional work items to be repaired under the COM provisions rather
than as service calls. Accordingly, we cannot agree with DSP that the
estimates provided by the Air Force for item No. 0001 are misleading.
Furthermore, to the extent DSP is alleging that information
concerning the number of work items found by the Air Force during
pretermination inspections should be released to prospective bidders, we
note that there is no requirement that a solicitation be so detailed as
to eliminate all performance uncertainties. Aleman Food Service, Inc.,
B-219415, supra. Here, prospective bidders were on notice that items
identified by the Air Force inspectors were to be repaired during COM
and, presumably, each bidder is knowledgeable enough to recognize the
efforts and risks associated with that expectation. Talley Support
Services, Inc., B-209232, June 27, 1983, 83-2 CPD Paragraph 22. The
government is under no obligation to eliminate risk from a procurement
entirely and bidders are expected to exercise business judgment in
preparing their bids. Operational Support Services, B-215853, Dec. 3,
1984, 84-2 CPD Paragraph 607. As stated above, the basic rule for
solicitation requirements is that they be unambiguous, state minimum
needs accurately and provide for equal competition. We are unable to
conclude that the solicitation requirement for COM does not meet this
standard.
We also find without merit DSP's arguments concerning the remaining
items specified in the solicitation. Item No. 0002, for which bidders
were required to bid $210,000, is the Air Force estimate of the total
cost of materials for which bidders may be reimbursed. The solicitation
further specifies that bidders will be required to pay the first $50 per
item per job order and that the Air Force will reimburse the contractor
only for costs above this threshold. The solicitation does not indicate
that $210,000 will be reimbursed to the contractor, as alleged by DSP,
and, as a result, we disagree with DSP's assertion that the difference
between this amount and the amount actually reimbursed is an "additional
cost" required to be disclosed by the Air Force.
In addition, we are unable to conclude that the Air Force's estimates
for items Nos. 0003-0006 were not based on the best information
available. The Air Force indicates that its estimates for these items
were based on engineering estimates, prior experience and planned
changes for future requirements. Although DSP has alleged that the
amounts actually ordered under these items for the past year were
minimal, an agency is not required to base its estimates solely on
historical data. Hero, Inc., supra. In our view, DSP has not
established that the Air Force abused its discretion in relying on its
engineering estimates and that the Air Force's estimates are not based
on the best information available.
DSP also argues that the solicitation is defective because it does
not include a specific incentive clause for the contractor allegedly
required by 10 U.S.C.A. Section 2301(b)(5). Section 2301(b)(5) states
as follows:
"(b) Further, it is the policy of Congress that procurement
policies and procedures for the agencies named in section 2303 of
this title shall be in accordance with the requirements of this
chapter -- . . . . .
(5) provide incentives to encourage contractors to take actions
and make recommendations that would reduce the costs to the United
States relating to the purchase or use of property or services to
be acquired under contracts;"
DSP argues that this provision requires the Air Force to include a
provision in the solicitation which offers incentives to contractors to
make cost-cutting suggestions.
We disagree with DSP's interpretation of the requirements imposed by
this provision. Section 2301 sets forth a broad congressional statement
of defense procurement policy. See H.R. Rep. No. 861, 98th Cong., 2d
Sess 1431 (1984). Although Congress intended that agencies encourage
contractors to make cost-cutting suggestions and provide incentives for
contractors to do so, there is nothing in the language of the provision
which requires that a specific incentive clause for this purpose be
included in every solicitation which is issued. Accordingly, we find
DSP's argument that the solicitation is defective for this reason to be
without merit.
Finally, we note that DSP has alleged that the Air Force deliberately
withheld relevant information from its agency protest report, that the
report was not responsive and that it should be disregarded because it
was not made in a timely manner. These allegations are without
foundation. The Air Force's response to this protest addressed the
issues which DSP raised with our Office and all replies were filed by
the Air Force in a timely manner.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220060.2 DATE: October 8, 1985
MATTER OF: Ratcliffe Corporation--Request for Reconsideration
DIGEST:
Protest based on alleged solicitation improprieties apparent prior to
the closing date for receipt of initial proposals must be filed before
that date.
Ratcliffe Corporation (Ratcliffe) requests reconsideration of our
September 12, 1985, dismissal of its protest, where we found Ratcliffe
untimely for failure to protest an alleged solicitation impropriety
prior to the closing date for receipt of initial proposals. Ratcliffe
claims it was misled by the contracting officer into believing that a
protest before the closing date was unnecessary because the solicitation
requirement might be relaxed during negotiations. We affirm our
dismissal.
Initial proposals in response to solicitation No. 10PN-NBD-5770,
issued by the General Services Administration (GSA) for the procurement
of an all-terrain track vehicle to be used by the Western Area Power
Administration at Fort Peck, Montana, were due by July 23. Ratcliffe
first protested on September 11, complaining that section C(7) of the
solicitation, which set forth clutch, transmission and speed
requirements for the vehicle, was too restrictive because it excluded a
vehicle utilizing a hydrostatic transmission drive system.
We dismissed the protest because our Bid Protest Regulations require
that a protest based upon alleged solicitation improprieties apparent
prior to the closing date for receipt of initial proposals be filed
before that date. 4 C.F.R. ! 21.2(a)(1) (1985). The purpose of this
time limitation is to enable the contracting agency or our Office to
decide an issue while it is most practicable to take effective action
where the circumstances warrant. For instance, if Radcliffe had
protested the allegedly restrictive requirement to GSA or our Office
before the closing date, then the matter could have been reviewed early
in the procurement process. If the protest were found to have merit,
the solicitation could have been amended and all potential offerors thus
put on notice of the agency's actual requirement before deciding whether
to compete, and the best approach to take in preparing their proposals.
See System Development Corporation and International Business Machines,
B-204672, Mar. 9, 1982, 82-1 C.P.D. P 218.
Ratcliffe's present allegation that it was misled by the contracting
officer with respect to the time to protest does not excuse the
untimeliness of the complaint. Our Regulations have been published in
the Federal Register, and protesters therefore are charged with
constructive knowledge of our filing rules. Shannon County Gas--
Reconsideration, B-218232.2, Apr. 2, 1985, 64 Comp. Gen. , 85-1 C.P.D.
P 384. Moreover, Ratcliffe's allegation is based only on the firm's
admitted inference from a conversation with the contracting officer that
he would revise the specifications to include Ratcliffe's equipment if
the firm's offered price was, in the protester's words, "competitively
1ow." Ratcliffe also admits that when it contacted the requiring field
office,which the contracting officer told Ratcliffe was "inflexible" on
the issue, the office representative "was not open to discussion
regarding this matter." In these circumstances, it was incumbent on
Ratcliffe to protest before the competition began, and we see no reason
to waive our timeliness rules.
Our dismissal is affirmed.
Harry R. Van Cleve
General Counsel
FILE: B-220058.4 86-1 CPD 394 DATE: April 23, 1986
MATTER OF: Federal Aviation Administration--
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
RECONSIDERATION REQUESTS - ERROR OF FACT OR LAW - NOT ESTABLISHED
1. Request for reconsideration is denied where the agency
merely reiterates arguments which GAO addressed in the previous
decision.
CONTRACTS - FEDERAL SUPPLY SCHEDULE - ORDER LIMITATION - EXCESS OF
LIMITATION
2. An agency qenerally may not place an order in excess of the
maximum order limitation in a firm's Federal Supply Schedule
contract.
The Federal Aviation Administration (FAA) requests that we reconsider
our decision in Kavouras, Inc., B-220058.2 et al., Feb. 11, 1986, 86-1
C.P.D. P 148, in which we sustained the second protest of Kavouras,
Inc., against the issuance of delivery order No. DTFA07-85-D01740 by
the FAA to Alden Electronics for the procurement of remote weather radar
display equipment from the General Services Administration's (GSA)
Federal Supply Schedule (FSS). We found that the FAA improperly placed
an order with Alden in excess of Alden's maximum order limitation (MOL).
We recommended that the FAA reimburse Kavouras the cost of filing and
pursuing its protest, including attorney's fees, because Kavouras was
excluded unreasonably from the procurement and, because performance had
been completed, we could not recommend any other relief.
We deny the request for reconsideration.
As background, we note that Kavouras initially protested that the FAA
engaged in auction techniques by accepting Alden's lower-than-FSS price
after meetinq with Kavouras, and that the FAA improperly evaluated the
parties' contracts and prices. We denied Kavouras' protest, finding,
among other things, that Kavouras had failed to furnish probative
evidence of a price auction and that the record showed no improper
evaluation. See Kavouras, Inc., B-220058, Dec. 23, 1985, 85-2 C.P.D. P
703. As we noted in that decision, Kavouras, in its comments to the
FAA's report, protested that the order with Alden exceeded Alden's MOL.
We segregated this issue as an independent protest, accepted submissions
from the parties, and ultimately rendered the second decision and
recommendation that the FAA now challenges.
In its request for reconsideration, the FAA first notes that our Bid
Protest Regulations, 4 C.F.R. Sec. 21.6 (1985), require that a
contractor be excluded "unreasonably" from the procurement to recover
protest costs. The FAA contends that because Kavouras had an
opportunity to submit technical and cost proposals, the firm was not
excluded unreasonably from the procurement. Further, the FAA argues
that its award to Alden in excess of Alden's MOL did not violate Federal
Property Manaqement Regulation (FPMR), 41 C.F.R. Sec.
101-26.401-4(c)(1) (1985), which provides:
"Federal Supply Schedules stipulate maximum dollar limitations
above which agencies may not submit orders and contractors may not
accept orders. "
That regulation, the FAA contends, is merely a statement of the rights
and duties of parties to an FSS contract and not a prohibition against
placing orders in excess of the MOL where the agency and the contractor
agree to waive or modify the terms of the FSS contract. The FAA further
argues in this respect that the regulation is no more than a guideline
because its language, specifically the use of the verb "may," is
permissive and, thus, does not intend to bind agencies.
Under our Regulations, a reguest for reconsideration must specify any
errors of law made in the decision or information not considered
previously. 4 C.F.R. Sec. 21.12( a). Here, the FAA essentially
restates the arguments that it presented in the second protest and which
we addressed in our decision. We found, for example, that "the FAA's
improper placing of an order with Alden clearly had the effect of
precluding Kavouras from an open competition," and we noted that the
FPMR does not contemplate that a contractor may ratify an improper
order. Moreover, while the FAA did not expressly argue that the use of
the word "may" in the regulation is permissive, not mandatory, the
regulation's clear intent is to withhold permission to exceed the MOL
from the parties involved.
Our Office will not reconsider a decision based on a party's
reiteration of arguments already addressed. See H.L. Carpenter Co.--
Reconsideration, B-220032.2, Jan. 3, 1986, 65 Comp. Gen. , 86-1 C.p.D.
P 3. Accordingly, we will not reconsider our decision based on this
portion of the FAA's request.
The FAA also argues, in the alternative, that even if the FPMR
provision is considered binding on agencies, it does not convey any
rights on contractors like Kavouras because it "is no more than an
internal administrative directive." The FAA contends that its violation
of this requlation does not confer upon Kavouras a right to protest
costs.
We find no merit in the FAA's argument. Our decision did recognize
that the government, not the contractor, is the beneficiary of the
regulation's protection. We stated that an MOL clause is placed in a
requirements contract to enable the government to explore the
possibilities of securing lower prices for larger quantities exceeding
the limitation. Our recommendation that Kavouras be awarded protest
costs, however, was based on the fact that the FAA's improper award to
Alden resulted in denying Kavouras an opportunity to attempt to secure
an order in an open competition. The FAA's argument provides no basis
for our Office to reconsider our view.
Next, the agency argues that because the FPMR, 41 C.F.R. Sec.
101-26.401-4(c) (2), permits nonmandatory users of the FSS (like the
FAA) with requirements in excess of an MOL to forward those requirements
to GSA, there is some form of discretion granted to agencies to place
orders in excess of MOLs. (The regulation requires mandatory users to
forward such orders to GSA.) The FAA contends that had it forwarded its
requirements to GSA, that agency probably would have authorized the
award to Alden.
The FAA's view of the effect of the cited regulation is incorrect.
The regulation clearly does not intend to relieve nonmandatory-using
agencies from compliance with MOLs. Rather, it intends to give such
agencies the option, when their orders exceed MOLs, either to solicit
the requirements themselves or forward the requirements to GSA to
solicit for the agency. In any event, the FAA's speculation as to what
GSA would have done certainly is an insufficient reason to overlook the
fact that the FAA's actions violated the applicable regulations.
Finally, the FAA attempts to distinguish Computer Data Systems, Inc.,
B-218266, May 31, 1985, 85-1 C.P.D. P 624, a case on which we relied in
our second decision in awarding protest costs, from the facts of this
case. The FAA states that Computer Data Systems involved an agency's
erroneous evaluation of an awardee's cost proposal, whereas this case
involves no improper evaluation of technical or cost data. We point out,
however, that we relied on Computer Data Systems simply to support the
legal proposition that, under our Regulations, protest costs, including
attorney's fees, may be allowed where the agency has excluded a
protester unreasonably from the procurement and we have not recommended
that the protester be awarded the contract. The FAA's factual
distinction thus is irrevelant.
We deny the request for reconsideration.
Comptroller General
of the United States
FILE: B-220058.2; B-220058.3 86-1 CPD 148
DATE: February 11, 1986
MATTER OF: Kavouras, Inc.
CONTRACTS - FEDERAL SUPPLY SCHEDULE - ORDER LIMITATION - EXCESS OF
LIMITATION
1. Where contractor's General Services Administration Federal Supply
Schedule contract sets forth a maximum order limitation (MOL) on the
"total dollar value of any order" placed with the contractor and where
the agency places an order with the contractor in excess of the
contractor's MOL, that order is improperly placed.
CONTRACTS - PROTESTS - PREPARATION - COSTS - COMPENSABLE
2. Recovery of the cost of filing and pursuing its protest,
including attorney's fees, is permissible where the agency unreasonably
has excluded the protester from the procurement, except when our Office
recommends that the contract be awarded to the protester and the
protester ultimately receives the award.
Kavouras, Inc., protests the issuance of delivery order No.
DTFA07-85-D-01740 by the Federal Aviation Administration (FAA) to Alden
Electronics (Alden) for the procurement of remote weather radar display
equipment from the General Services Administration's (GSA) Federal
Supply Schedule (FSS). Kavouras complains that the FAA's order to Alden
exceeded the maximum order limitation (MOL) in Alden's FSS contract and,
thus, was improper. We sustain the protest. We also dismiss Kavouras'
request for reconsideration of our prior decision on this procurement as
moot.
We decided Kavouras' initial protest of this procurement, filed on
September 10, 1985, in Kavouras, Inc., B-220058, Dec. 23, 1985, 85-2 C.
P.D. Paragraph . . . . There, Kavouras protested that the FAA engaged
in auction techniques by accepting Alden's lower-than-FSS price after
meeting with Kavouras, and that the FAA improperly evaluated the prices
and contracts of Kavouras and Alden. We denied Kavouras' protest,
finding, among other things, that Kavouras had failed to furnish
probative evidence of a price auction and that the record showed no
improper evaluation of either Kavouras' or Alden's contract or prices.
Based on information in the FAA's report, Kavouras, in its October 28
comments on the report, protested that the FAA's order to Alden was in
excess of Alden's MOL. We segregated this issue as an independent
protest (B-220058.2) and accepted submissions from the parties.
Kavouras, in the meantime, has requested reconsideration of our denial
(B-220058.3), which we also address below.
Kavouras' present argument is that since Alden's FSS contract
provides that no order for rentals or purchases shall exceed $125,000,
the FAA order to Alden, which was for more than $131,000, was improper.
The FAA reports that the contracting officer thought that the MOL was
based on the purchase price for each line item and, since no line item
cost exceeded $125,000 and "the contracting officer in good faith
believed that the MOL clause had not been breached," the order should be
upheld. We agree with Kavouras.
We have noted in the past that the purpose of placing an MOL clause
in requirements contracts is to enable the government to explore the
possibilities of securing lower prices for larger quantities exceeding
the limitation. 49 Comp. Gen. 437 (1970). An order may not be placed
by the ordering activity, nor may an order be accepted by the
contractor, where a maximum limitation has been placed on the dollar
amount of each order and the dollar amount of the items to be purchased,
known at the time the order is ready to be placed, exceeds the MOL as
stated in the contract. Id. at 439; Federal Property Management
Regulation (FPMR), 41 C.F.R. Section 101-26.401-4(c)(1) (1985).
Here, Alden's MOL clause provides that:
"The total dollar value of any order for rental or purchase
placed under this contract shall not exceed $125,000 (based on the
government purchase price of each line item)."
We disagree with the contracting officer's reading of the clause, as the
clause clearly links the $125,000 limit with "the total dollar value" of
the order. By stating parenthetically that this limit shall be based on
the price of each line item, the clause merely presents how the total
dollar value of the order is to be derived, i.e., by adding the prices
for each line item. As stated above, the FAA placed an order with Alden
for more than $131,000. Under our prior decisions and the FPMR, this
order was improper. Moreover, the FAA's assertion that the contracting
officer believed, in good faith, that there was no breach of the MOL
clause does not alter the fact that an order from the FSS was placed
improperly.
We hope that the FAA argues that Alden somehow waived the MOL by
accepting this order from the FAA. The regulations, however, clearly
state that "agencies may not submit orders and contractors may not
accept orders" in excess of a contractor's MOL. FPMR, 41 C.F.R.
Section 101-26.401-4(c)(1). The regulations thus do not contemplate
that a contractor, in effect, may ratify an improper order, so that
Alden's failure to object to the FAA's order in excess of Alden's MOL is
immaterial.
As we pointed out in our initial decision, and irrespective of
Kavouras' protest, because this procurement involves equipment under the
FSS contract group 58, part VI, nonmandatory telecommunications
schedule, the FAA, by placing an order directly against the FSS, failed
to comply with the requirements of section 201-40.008 of the Federal
Information Resources Management Regulation, 4; C.F.R. Section
201-40.008 (1985). That regulation requires that the agency consider
the availability of other sources by publishing a synopsis in the
Commerce Business Daily at least 15 days before placing an order in
excess of $50,000 against a nonmandatory telecommunications schedule
contract. Based on the responses of nonschedule vendors, the agency
would consider whether placing the order would be the least costly
alternative.
We initially found that Kavouras was not prejudiced by the FAA's
failure to comply with section 201-40.008 because Kavouras had an
opportunity to submit a price quote and have that quote evaluated and
because Kavouras is not an intended beneficiary under the regulation, as
the regulation's intent clearly is to open competition to nonschedule
vendors where cost effective to the government.
In light of our decision of today, we believe Kavouras is entitled to
be reimbursed the cost of filing and pursuing its protest, including
attorney's fees, as requested, since award to Alden was improper
irrespective of the evaluation of Alden versus Kavouras. To recommend
that a competition be conducted now, however, would be impracticable, as
the FAA placed its order with Alden on September 4, 1985, based on what
the FAA determined was an urgent and compelling need to have the
equipment in place by September 30.
Our Bid Protest Regulations, implementing the Competition in
Contracting Act of 1984, 41 U.S.C.A. Section 253, et seq. (West Supp.
1985), provide for the recovery of the costs of pursuing a protest,
including attorney's fees, where the agency unreasonably has excluded
the protester from the procurement, except when our Office recommends
that the contract be awarded to the protester and the firm ultimately
receives the award. 4 C.F.R. Section 21.6(d), (e) (1985). We have not
recommended award to Kavouras, and the FAA's improved placing of an
order with Allen clearly had the effect of precluding Kavouras from an
open competition to meet the agency's needs. In these circumstances,
Kavouras is entitled to recover the costs of protesting. See Computer
Data Systems, Inc., B-218266, May 31, 1985, 85-1 C.P.D. Paragraph 264.
The protest is sustained.
Since we sustain Kavouras' protest, and since we are affording the
firm the only relief practicable, we dismiss Kavouras' request for
reconsideration of our earlier decision concerning this procurement as
moot.
Comptroller General of the United States
FILE: B-220058 85-2 CPD 703
DATE: December 23, 1985
MATTER OF: Kavouras, Inc.
CONTRACTS - PROTESTS - BURDEN OF PROOF - ON PROTESTOR
1. The protester has the responsibility to present sufficient
evidence to prove its case. Where an agency denies a protester's
contention that the agency engaged in an improper price auction by
obtaining a price from the protester and using the protester's price to
secure a lower price from another contractor, and the protester fails to
furnish probative evidence to the contrary, the contention is
speculative and the protester has not met its burden of proof.
CONTRACTS - FEDERAL SUPPLY SCHEDULE - PRICES - REDUCTIONS - AFTER
AWARD
2. A Federal Supply Schedule contractor may institute a general
price reduction in its schedule contract during the contract period,
provided the reduction is applied to all federal agencies for the
duration of the contract.
CONTRACTS - FEDERAL SUPPLY SCHEDULE - GENERALLY
3. Purchase from a Federal Supply Schedule does not require common
cutoff date for receipt of best and final offers.
CONTRACTS - PROTESTS - ALLEGATIONS - UNSUBSTANTIATED
4. Protest that the agency improperly included an installation fee
in the evaluation of the protester's price quotation, even though the
protester's Federal Supply Schedule contract contained no such fee, and
that the agency failed to include an installation fee in the evaluation
of the awardee's price quotation, even though such a fee is contained in
the awardee's Federal Supply Schedule contract, is denied where the
record shows that the protester expressly included an installation fee
in its price quotation and the awardee omitted the installation fee in
its price quotation.
Kavouras, Inc., protests the issuance of delivery order No.
DTFA07-85-D-01740 by the Federal Aviation Administration (FAA) to Alden
Electronics (Alden) in the amount of $131,193.66 for the procurement of
remote weather radar display equipment from the General Services
Administration's (GSA) Federal Supply Schedule (FSS). Kavouras complains
that in accepting Alden's lower-than-FSS price after meeting with
Kavouras, the FAA engaged in auction techniques. Kavouras also contends
that the FAA improperly evaluated the prices and contracts of Kavouras
and Alden. /1/ We deny the protest.
On July 23, 1985, the FAA received an unsolicited proposal from
Kavouras, which has an FSS contract for the equipment. On August 29,
Kavouras representatives met with FAA personnel to submit a modification
to Kavouras representatives that the firm's price was the lowest offered
to the government -- relative, apparently, to Alden's schedule price for
the equipment -- and that Kavouras therefore probably would be awarded
the contract.
On August 30, FAA personnel met with Alden representatives and
received a proposal containing a price lower than Kavouras' price and
lower than Alden's FSS contract price. Based on Alden's lower price and
what the FAA determined was an urgent need for weather radar at flight
service stations, the order was issued to Alden on September 4.
Kavouras protests that by accepting a lower price quote from Alden
after meeting with Kavouras, the FAA engaged in auction techniques and a
de facto "one-sided negotiated procurement" that should have included a
common cutoff date for the receipt of best and final offers. In support
of this position, Kavouras points to Alden's "fortuitous" submission of
a low price 1 day after Kavouras met with FAA personnel and suspects
that FAA personnel informed Alden of the agency's probably purchase of
equipment from Kavouras, thus providing Alden with the opportunity to
undercut Kavouras' price. Kavouras complains that had the FAA informed
Kavouras of Alden's price reduction, Kavouras could have submitted a
price reduction of its own.
The FAA reports that discussions with Alden and Kavouras concerned
the technical aspects of their equipment and were not for the purposes
of price negotiation. Alden's price reduction, the FAA states, was
unsolicited, and its acceptance by FAA personnel was not improper.
Further, the FAA responds that it was under no obligation to notify
Kavouras that Alden had revised its prices or to set a common cutoff
date for the receipt of best and final offers, as it was not conducting
a negotiated procurement.
With regard to Kavouras' contention that the FAA engaged in a price
auction by first obtaining a price from Kavouras and then using that
price to negotiate a lower price from Alden, we have held that a
protester has the responsibility to present sufficient evidence to prove
its case. Where an agency denies the protester's contention and the
protester fails to furnish the required evidence, the contention must be
regarded as speculative only, and the protester has not met its burden
of proof. See The Trade Group, B-212544, Oct. 24, 1983, 83-2 C. P.D.
Paragraph 484.
The record is not clear as to what prompted Kavouras or Alden to
submit what the FAA states were unsolicited proposals. A contractor may
institute a general price reduction in its FSS contract during the
contract period, provided an equivalent price reduction is applied to
sales to all federal agencies for the duration of the contract. Lanier
Business Products, Inc., B-211641, Oct. 25, 1983, 83-2 C.P.D. Paragraph
493. We have no basis on which to conclude that Alden's reason for
reducing its price was any less legitimate, or more suspicious, than was
Kavouras'. Kavouras fails to offer any probative evidence that the FAA
used Kavouras' quotation to solicit a lower price from Alden, aside from
the fact that Alden reduced its price after Kavouras met with FAA
personnel. This circumstance alone, however, is not enough to prove
Kavouras' contention that the FAA conducted an improper auction between
the two firms. Thus, we deny this portion of Kavouras' protest.
Furthermore, we disagree with Kavouras' characterization of this
purchase as a negotiated procurement requiring a common cutoff date for
the receipt of best and final offers. This procurement was an attempt
to secure supplies from the FSS. When an agency uses the simplified
purchasing procedures under the FSS, it is entitled to issue delivery
orders directly to schedule contractors for the supplies its desires.
Under these circumstances, an agency, like the FAA, is not required to
set a common cutoff date for the receipt of best and final offers. See
Federal Acquisition Regulation (FAR), 48 C.F.R. Section 8.401 (1984).
Moreover, we note that Kavouras was not prejudiced by the FAA's action,
as Kavouras had an opportunity to submit its price. Had the FAA
attempted to secure a lower price from Kavouras based on Alden's reduced
price (which appears to be what Kavouras desires), the FAA would have
engaged in the same type of auction of which Kavouras complains.
Kavouras next protests that in evaluating its price, the FAA included
an $800 per site installation charge for Kavouras' equipment, though
such a charge does not appear in Kavouras' FSS contract. Further,
Kavouras contends that the FAA failed to include site installation
charges for Alden's equipment in its evaluation of Alden's price, even
though such charges are contained in Alden's FSS contract. This FAA
action, Kavouras complains, misrepresented Kavouras' price as more than
Alden's price. Kavouras argues that the FAA should have compared the
prices of each contractor's equipment without consideration of site
installation charges.
The FAA reports that Alden does not charge an installation fee for
its equipment. The FAA states that although Kavouras' per unit price
initially appears lower than Alden's per unit price ($9,012.80 /2/ as
compared to $10,091.82), Kavouras' overall cost to the FAA would be more
than Alden's because Kavouras charges a greater monthly
maintenance/access fee than does Alden and because Kavouras charges a
site installation fee. When accounting for Kavouras' fees, Kavouras'
equipment costs $10,396.48 per unit as compared to Alden's cost of
$10,091.82.
We find no merit in Kavouras' argument. As we stated above,
contractors have the opportunity to lower their FSS prices during the
contract period. The record shows, and the FAA informally advises us,
that Alden lowered its price by eliminating its installation fee.
Conversely, we find in Kavouras' submission to our Office, and in the
FAA report, two separate price quotes from Kavouras that include an
installation charge of $800 per site. In short, it appears that Alden
took advantage of an FSS contractor's general opportunity to lower its
price and, as a consequence, Alden's cost to the FAA was lower than
Kavouras' unsolicited offer. Under these circumstances, we find no
basis for Kavouras to complain, and we deny this portion of Kavouras'
protest.
Additionally, we note that this contract involves equipment under the
FSS contract group 58, part VI, nonmandatory telecommunications
schedule. Orders placed against a GSA nonmandatory telecommunications
schedule contract (including a multiple-award schedule) are subject to
the requirements of section 201-40.008 of the Federal Information
Resources Management Regulation, 41 C.F.R. Section 201-40.008 (1985).
This regulation, promulgated by GSA, provides that a contracting agency
may not place an order in excess of $50,000 against a nonmandatory
telecommunications schedule contract without first considering the
availability of other sources by publishing a synopsis in the Commerce
Business Daily at least 15 days before placing the order. The synopsis
announces the intent to place an order and, based on the responses of
nonschedule vendors, the agency determines whether placing the order
would be the least costly alternative. If an evaluation of the
responses indicates that placing the order would not be the least costly
alternative, the contracting agency should issue a formal solicitation
and invite all vendors, including schedule vendors, to compete. See
Kavouras, Inc., B-219508, Nov. 12, 1985, 85-2 C.P.D. Paragraph . . . .
The FAA, by placing an order directly against the schedule, failed to
comply with the requirements of section 201-40.008. Kavouras, however,
had an opportunity to submit a price quote and had that quote evaluated,
so that Kavouras was not prejudiced. Further, Kavouras is not an
intended beneficiary under the regulation, as this regulation's intent
clearly is to open competition to nonschedule vendors where cost
effective to the government. Nevertheless, and notwithstanding that we
cannot find that an auction took place here, we point out that had the
FAA met its responsibilities under this regulation the appearance of
impropriety that the purchase from Alden raised certainly would have
been avoided.
The protest is denied.
Harry R. Van Cleve
General Counsel
(1) Kavouras has another protest in connection with this procurement
pending before our Office concerning Alden's maximum order limitation,
which Kavouras raised in its comments to the FAA's report in this
protest. A decision on this issue is forthcoming.
(2) This figure accounts for Kavouras' 14-percent aggregate discount,
which the FAA failed to include when comparing costs initially. As
shown above and in the FAA's report, this was of no prejudice to
Kavouras, as Kavouras' overall cost, with the discount, is higher than
Alden's.
FILE: B-220057 85-2 CPD 303
DATE: September 18, 1985
MATTER OF: National Minority Research Development Corporation
DIGEST:
CONTRACTS - NEGOTIATION - LATE PROPOSALS AND QUOTATIONS - HAND
CARRIED
Proposal hand-delivered after time specified for receipt must be
rejected as late, even though the cause of the delay, an automobile
accident, was beyond the offeror's control.
National Minority Research Development Corporation protests the
rejection of its proposal in response to solicitation No. NIH-TW-85-15,
issued July 12, 1985 by the Department of Health and Human Services'
National Institutes of Health (NIH), Bethesda, Maryland. The protester
asks that the ate proposal be considered because National's president
was involved in an automobile accident while attempting to deliver it.
We dismiss the protest.
According to National, its proposal was being hand-carried by the
company's president on August 30, 1985. While proceeding to the
location designated for receipt, the car in which the president was a
passenger experienced a malfunction of the wheel rods that caused the
driver to lose control of the car and run into an embankment adjoining
the highway. The president states that he departed the scene of the
accident and telephoned the contracting officer, who advised him to get
to the agency as soon as possible. After an unsuccessful attempt to
catch a cab, the president finally was able to flag down a motorist who
drove him to NIH. However, he arrived after the designated time for
receipt of proposals.
Bidders and offerors are responsible for the timely delivery of their
bids or proposals, and late delivery generally requires rejection. See
the Federal Acquisition Regulation (FAR), 48 C.F.R. Sections 14.304-1
and 15.412 (1984). A proposal that is hand-carried by an offeror and
arrives late can only be considered if the paramount cause of delay is
wrongful government action and if consideration of the proposal would
not compromise the integrity of the competitive procurement system.
"Wrongful government action," in this context, means affirmative action
on the government's part, such as improper or conflicting delivery
instructions, that made it impossible for the hand-carried proposal to
be timely delivered. See T.E. Deloss Equipment Rentals, B-214029, July
10, 1984, 84-2 CPD Paragraph 35. There is no evidence here of any
government impropriety that would fall within this exception.
We recognize that the accident in this case was beyond the
protester's control. Nevertheless, the FAR clause that permits
consideration of late submissions applies to only those sent by mail (or
telegram if authorized) unless the proposal is the only one received.
48 C.F.R. Section 52.215-10. We have held that where an offeror chooses
to hand-carry a proposal rather than use a method of delivery specified
in the late proposal clause, and a delay in delivery does occur, the
proposal is not for consideration even if the delay resulted from
unanticipated causes. For example, we have held this clause provided no
basis to consider a late proposal where the messenger carrying it was
delayed by a snowstorm. O.N.D. Production, Inc., B-194312, Apr. 13,
1979, 79-1 CPD Paragraph 267. Similarly, we upheld the rejection of a
hand-carried proposal that was received 5 minutes after the time set for
receipt of proposals where the lateness was due to unexpected traffic
delays. Briggs Engineering and Testing Co., Inc., B-192943, Oct. 3,
1978, 78-2 CPD Paragraph 256. The result was the same even when the
traffic delay was caused by roadblocks set up to divert traffic from an
area subject to sniper fire. Data Pathing, Inc., B-188234, May 5, 1977,
77-1 CPD Paragraph 311.
While application of the rule in this case, as in the cited cases,
may seem harsh, we believe it is required by the need to treat all
offerors fairly and equally and to maintain the integrity of the
competitive system. See Phelps-Stokes Fund, B-194347, May 21, 1979,
79-1 CPD Paragraph 366. Accordingly, we find no basis to excuse the
lateness of National's proposal, which NIH properly rejected.
The protest is dismissed.
/s/ Ronald Berger
Deputy Associate General Counsel
FILE: B-220056.2 86-1 CPD 77
DATE: January 23, 1986
MATTER OF: Inter Systems, Inc.
CONTRACTS - PROTESTS - ALLEGATOIONS - BIAS - UNSUBSTANTIATED
Where protester, the incumbent contractor, alleges bad faith on the
part of agency officials in their failure to consider it for a follow-on
section 8(a) contract but fails to offer irrefutable proof in support of
the allegation, the protester has not met its burden of proof. The
protest therefore is denied.
Inter Systems, Inc. (ISI), a minority-owned small business concern,
protests the Environmental Protection Agency's (EPA) failure to consider
ISI for a follow-on to its section 8(a) contract to provide technical
support for the operation and maintenance of the Office of Research and
Development Information system. ISI, the incumbent contractor, contends
that the EPA deliberately, and in bad faith, led ISI to believe that its
contract performance was satisfactory, that ISI detrimentally relied on
this belief and that the EPA should, therefore, be required to consider
ISI for the follow-on section 8(a) contract.
The protest is denied.
Section 8(a) of the Small Business Act, 15 U.S.C. Section 637(a)
(1982), authorizes the Small Business Administration (SBA) to enter into
contracts with government agencies and to arrange for the performance of
such contracts by letting subcontracts to socially and economically
disadvantaged small business concerns. The thrust of the section 8(a)
program is to insulate participants from open price competition with
established firms until the section 8(a) firms are capable of so
competing. See Winfield Mfg. Co., Inc., B-218537, June 12, 1985, 85-1
CPD Paragraph 679. SBA and contracting agencies enjoy broad discretion
in arriving at section 8(a) contracting arrangements and, therefore, our
review of actions under the section 8(a) program is limited to
determining whether applicable regulations have been followed and
whether there has been fraud or bad faith on the part of government
officials. Winfield Mfg., Co., Id.
A protester alleging bad faith by government officials bears a very
heavy burden of proof. In order to show bad faith, a protester must
offer irrefutable proof that an agency action was taken with the
specific and malicious intent to injure the protester. Atlantic
Petroleum Corp., B-215472., April 12, 1985, 85-1 CPD Paragraph 417.
ISI alleges that EPA required ISI to subcontract with SCI Data
Systems (SCI) for the performance of work under the contract. ISI
contends that during contract performance, EPA's project officer
interfered with its management of the subcontract by dealing directly
with SCI and that the project officer steadily decreased ISI's
management hours while increasing SCI's management hours, thereby
effectively reducing ISI's control over its subcontractor and work
performed under the contract.
ISI also contends that the EPA deliberately and, in bad faith, led
ISI to believe that its contract performance was satisfactory and that
ISI detrimentally relied on that belief. ISI asserts that if EPA found
ISI's performance unsatisfactory, EPA was required to provide written
notice by the Federal Acquisition Regulation, 48 C.F.R Section 46.407(
g) (1984). ISI alleges that although EPA notified the SBA, in writing,
of its dissatisfaction with ISI, ISI was not so notified.
In sum, ISI contends that EPA's failure to provide written notice of
unsatisfactory performance, and the transfer of management hours to SCI
provide evidence of the EPA project officer's malice and intent to
damage ISI.
Although ISI alleges that it was provided with no written notice of
EPA's dissatisfaction with its contract performance, the record
indicates, and ISI does not deny, that at a number of meetings EPA
expressed its concerns about the effect ISI's high personnel turnover
rate was having on contract performance, and about the unacceptability
of the Prime Implementation Plan, one of the tasks required by the
contract. While written notice may not have been provided, the lack of
such notice does not support ISI's contention that it reasonably relied
on its belief that its contract performance was satisfactory.
With regard to the transfer of management hours, ISI has provided no
evidence in support of its allegation that the project officer increased
SCI's management hours with the specific intent to injure ISI. EPA
refutes the allegation and states that SCI's total level of effort
remained constant throughout contract performance. The record indicates
that ISI utilized 20 employees to accomplish approximately 6.5 workyears
of effort while SCI had a staff of five to accomplish approximately 5
workyears of effort. The project officer states that, at one point, ISI
fired its entire middle management staff, including the program manager,
and that ISI requested that EPA redirect its program manager workhours
to other categories.
Where the only evidence on issues of fact is the conflicting
statements of the protester and the contracting agency, the protester
has not carried the burden of proving its case. Shaw Food Services Co.,
B-219415.2, Sept. 23, 1985, 85-2 CPD Paragraph 320. Agency officials
are presumed to be competent and to act in good faith, and we will not
attribute improper motives on the basis of inference or speculation.
P-III Associates, B-213856.2, July 31, 1984, 84-2 CPD Paragraph 136.
Moreover, we note that notwithstanding SBA's initial concerns with
regard to the failure to consider ISI for the follow-on contract, SBA
subsequently authorized EPA to negotiate with another firm for that 8(a)
contract after EPA outlined the basis for its dissatisfaction with ISI's
contract performance.
With regard to ISI's allegation that the EPA forced ISI to use SCI as
a subcontractor, we note that ISI has also brought those allegations to
the attention of the Offices of the Inspector General of the SBA and
EPA. We therefore will not address those allegations. Although the
record indicates that the EPA did work directly with SCI, ISI's
subcontractor, there is insufficient evidence in the record to support a
finding of bad faith.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220052 86-1 CPD 57
DATE: January 17, 1986
MATTER OF: AT&T Technology Systems
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
PROPRIETY
Protest that agency did not require the awardee to meet all RFP
requirements and that award therefore was improper is denied where in
camera review indicates that the awardee unconditionally offered a
system meeting the agency's requirement and the agency determined that
the system in fact met the RFP requirements.
AT&T Technology Systems (AT&T) protests the award of a contract to
Rockwell International Corporation, Collins Transmission Division
(Rockwell), under Department of the Army request for proposals (RFP) No.
DAAD07-85-R-0039, for an Optical Fiber Cable and Multiplex System. The
system is used for transmitting voice and data signals between specified
points.
We deny the protest.
The RFP, issued on April 18, 1985, provided that an award would be
made to the firm that offered the best buy, to be determined by
comparing the proposed prices with the evaluated numerical ratings of
the technical proposals. On July 11, the closing date for the receipt
of initial proposals, the Army received four offers, two of which, those
submitted by AT&T and Rockwell, were included in the competitive range.
The Army held discussions with both offerors and requested that each
submit a best and final offer (BAFO). Evaluation of the BAFOs yielded
scores of 78.04 and 65.68 for Rockwell's and AT&T's proposals,
respectively. Given that AT&T's cost proposal was 32 percent higher
than Rockwell's cost proposal, the Army determined that Rockwell offered
the best buy to the government and awarded a contract to that firm.
Before proceeding to the merits of the protest, we note that Rockwell
has asserted that its proposal is comprised entirely of proprietary
information that should not be disclosed to AT&T or other parties. AT&T
has filed a Freedom of Information Act (FOIA) request seeking this
information but, to date, has not been given access to Rockwell's
proposal or related agency documents. Accordingly, while we have
reviewed Rockwell's proposal and the evaluation materials in camera, our
discussion of specific aspects of Rockwell's proposal is limited. See
generally C.M.P. Inc., B-216508, Feb. 7, 1985, 85-1 C.P. D. Paragraph
156.
The Optical Fiber Cable and Multiplex System transmits voice and data
signals to specified locations within the Army base and is comprised of
a number of pieces of electronic equipment or hardware. When a signal
is generated, it flows into the system and onto a "jackfield" where the
individual voice frequency circuits "terminate." The voice frequency
channels then flow into a channel bank (here, the D4 channel bank) where
up to 48 voice frequency channels are multiplexed, or transmitted, into
two 24-channel DS1 digital signals. The individual DS1 digital signals
then enter onto a second jackfield and terminate. From this point, the
signals flow into the multiplexer where up to 24-channel DS1 signals are
multiplexed into a single DS3 signal. The single DS3 signal then
terminates on a coaxial jackfield known as the DS3 Network Interface.
At this point, a DS3 encryption device may be inserted to encode
transmissions. With or without the device, the electrical signals are
then converted to optical signals, which flow into an Optical Patch
Panel and terminate. They can then be transmitted over the fiber optic
cable.
AT&T's protest arguments are based on its review of Rockwell product
catalogs, and its belief that Rockwell offered its Digital Multiplex
Lightwave System 45 (DML-45) to meet the Army's requirements. AT&T
argues that the DML-45 does not meet the requirements of the RFP
purchase description, first, because the DML-45 performs three required
functions (multiplexing up to 28 of the 24-channel digital signals into
one optical signal) in one component. AT&T maintains that because the
equipment's multiplex and optical interface functions are performed in
one component, the system does not comply with paragraph 3.3.9 of the
purchase description, which requires access to the
multiplexer-to-the-optical interface.
Second, AT&T alleges that because the DML-45 multiplexes the digital
signal into an optical signal rather than an electrical signal, it
cannot comply with paragraphs 3.3.9 and 3.3.10.1 and AT&T Technical
Advisory 34 (TA34), incorporated in the RFP. Paragraph 3.3.9 and TA34
require electrical output. Paragraph 3.3.10.1 requires access to the
multiplexer at the optical interface for purposes of adding an
encryption device and, according to AT&T, this requirement cannot be met
without electrical output. AT&T speculates that Rockwell may have
modified the DML-45 to comply with the electrical output requirement,
but AT&T asserts that, if upgraded in this manner, the DML-45 then would
not comply with an additional requirement under paragraph 3.3.10.1 that
the multiplexer-to-optical interface be designed such that normal
operation can be accomplished without circuit or equipment modification.
AT&T also asserts that if the DML-45 is modified to permit access to
the DS3 signal to comply with paragraphs 3.3.9 and 3.3.10.1, the offered
equipment would not satisfy paragraph 3.1.2, which states that the
assembly or module shall not be specially made or modified to meet the
requirements of the procurement, except to meet special
"crypto-signaling" compatibility.
Third, AT&T asserts that the DML-45 cannot comply with purchase
description paragraph 3.5.2 and RFP amendment no. 1 without violating
purchase description paragraph 3.1.18. According to AT&T, its review of
DML-45 literature shows that the DML-45 can comply with paragraph 3.5.2
and amendment no. 1 (concerning the provision of an automatic switch for
the fiber cable) only if it is upgraded. AT&T alleges that any such
upgrade would cause certain other components of the DML-45 to become
obsolete, a direct violation of paragraph 3.1.18.
In reviewing protests against the propriety of a technical
evaluation, it is not the function of our Office to independently
evaluate technical proposals. See A.B. Dick Co., B-211119.3, Sept. 22
1983, 83-2 C.P.D. Paragraph 360. Rather, the overall determination of
the relative desirability and technical adequacy of offered equipment is
primarily a function of the procuring agency which, we have recognized,
enjoys a reasonable range of discretion in proposal evaluation. Id.
Consequently, we will question an agency's technical evaluation only
where the record clearly shows that the evaluation was conducted
arbitrarily or capriciously. See DDL Omni Engineering, B-220075,
B-220075.2, Dec. 18, 1985, 85-2 C.P.D. Paragraph . . .
The record shows that the Army reviewed the BAFOs submitted by AT&T
and Rockwell and found that Rockwell's proposal complied with all of the
RFP requirements, including those on which AT&T's protest is founded.
Indeed, the Army rated Rockwell's system superior overall to AT&T's
offered system.
The Army states that, contrary to the principal assumption underlying
the protest, Rockwell did not propose its DML-45 system alone but,
rather, offered it as only a part of a total system. The Army found
that this system as a whole complied with the RFP's purchase
description. Specifically, concerning paragraphs 3.3.9 and 3.3.10.1,
the Army found that Rockwell, in fact, did offer a system that has
electrical output and is compatible with the coaxial jackfield and which
permits the insertion and removal of encryption equipment without
interfering with the system operation, as required. Thus, according to
the Army, the modifications AT&T speculates might have taken place to
make the DML-45 compliant in fact were not necessary. The Army does
concede that certain equipment offered by Rockwell will have to be
modified to meet the requirements for future system expansion. The Army
states, however, that, contrary to AT&T's speculation, any modifications
would be relatively minor and would not cause any components of the
offered equipment to become obsolete.
We have reviewed the record and find no basis for taking exception to
the Army's technical conclusions. The Army has made specific
determinations that Rockwell's equipment satisfies each of the RFP
requirements cited by AT&T, and Rockwell's proposal reasonably supports
these determinations. For example, the proposal expressly provides, in
connection with paragraph 3.3.10.1, that an encryption device can be
inserted and removed without interfering with the system's normal
operation; the Army has confirmed that Rockwell's system, in fact, has
this capability. Moreover, AT&T's speculation that Rockwell's system
will require extensive modifications to comply with certain RFP
requirements is unfounded. the Army has determined that only minor
future modifications -- modifications it deems acceptable under the RFP
-- will be required for the system Rockwell has offered.
We recognize that AT&T was not in a position to present anything more
than speculative arguments due to the claimed proprietary rights in, and
resultant nondisclosure of, Rockwell's proposal and the evaluation. The
fact remains, nonetheless, that the record simply contains no evidence
that the Army's technical conclusions were incorrect. We thus have no
basis for sustaining the protest on this ground.
To the extent AT&T may believe Rockwell will be unable to meet its
commitment to fulfill the Army's requirements, this consideration is a
matter of contract administration which is within the ambit of the Army,
not our Office. See Data Products New England, Inc., et al., B-199024,
Jan. 9, 1981, 81-1 C.P.D. Paragraph 16.
AT&T also alleges that the Army relaxed certain RFP requirements in
accepting Rockwell's proposal. AT&T asserts that, during discussions,
it was told to include in its BAFO network isolation at two points, a
network interface at certain points, and network synchronization. AT&
Tstates that it complied with these requests and, as a result, had to
increase its cost proposal. Based on Rockwell's low cost proposal, AT&
T asserts that Rockwell could not have been required to meet these
requirements.
The Army responds that, contrary to AT&T's speculation, Rockwell did
offer network isolation and network interface. The Army explains it was
unnecessary to request these features during discussions specifically,
because Rockwell included them in its initial proposal. The Army
reports it did not require Rockwell to provide network synchronization
because this was not an RFP requirement. The Army denies it ever told
AT&T to include this feature in its system.
We have reviewed Rockwell's proposal and find that Rockwell did
propose network isolation and network interfacing at the required
locations in its system. We also have examined the RFP and the rest of
the record and find neither any stated requirement for network
synchronization, nor any evidence that AT&T was told during discussions
that this was a required feature.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220050 86-1 CPD 21
DATE: January 9, 1986
MATTER OF: Consolidated Group
CONTRACTS - NEGOTIATION - SOURCE SELECTION - BOARD, COMMISSION, ETC.
- OVERRULED BY SOURCE SELECTION
1. Source selection official has the ultimate responsibility for
determining what, if any, significance to attach to the technical and
cost scores given offers by the source evaluation board. Source
selection official properly could decide to disregard scores and base
award selection on review of record.
CONTRACTS - NEGOTIATION - SOURCE SELECTION - BOARD, COMMISSION, ETC.
- DETERMINATION PROPRIETY
2. Decision of source selection official to award contract to a
higher cost, technically superior offeror is not objectionable where
award on that basis is consistent with the RFP's evaluation criteria and
the source selection official adopted the source evaluation board's
determination that the higher cost was justified because awardee's
proposed approach of strong, centralized management overseeing numerous
local subcontractors entailed less performance risk than protester's
proposed approach of using large specialized subcontractors managed by
new, untried organization.
CONTRACTS - SUBCONTRACTORS - LISTING - INVITATION REQUIREMENT
3. List of proposed subcontractors required by solicitation was not
intended for evaluation purposes, but related to contract administration
and the offeror's responsibility that is, its ability to perform.
Therefore, agency evaluators were not required to downgrade proposal for
failure to list subcontractors.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
EXPERIENCE RATING
4. Protest allegation that agency evaluators failed to downgrade
proposal because firm does not have necessary experience required by
solicitation is denied. Solicitation provision which required that
"(t)"he offeror's (stated) competence and experience . . . demonstrate
his ability to handle general merchandise plus one of the three
categories of conveyances: vehicles, aircraft, or watercraft" merely
required that the competence and experience as stated in its technical
proposal show its capability to perform specified work, and agency
evaluators determined that offeror had such capability.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - BEST AND FINAL -
EVALUATION
5. Protest that technical score was reduced in evaluation of revised
best and final offer even thougn agency did not change technical
requirements and offeror did not change its technical approach or
capabilities from its initial proposal is rejected where revised best
and final offer did not respond to perceived deficiencies regarding
personnel and capability, and agency evaluation of these issues was fair
and reasonable and consistent with evaluation criteria.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION - COST
REALISM ANALYSIS - REASONABLENESS
6. Protest that certain cost assumptions in evaluating offerors'
cost proposals unfairly narrowed margin between protester's and
awardee's cost score is rejected where the agency evaluators presented a
reasonable basis for their use of these cost assumptions and, in fact,
protester was not adversely affected by use of these assumptions.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - NEW ISSUES - UNRELATED TO ORIGINAL PROTEST BASIS
7. Where protester raises new ground of protest in its comments to
the agency report and the ground was known more than 10 working days
prior to the submission of the comments, the new ground of protest is
untimely and will not be considered.
Consolidated Group (Consolidated) protests the award of a contract to
Northrop Worldwide Aircraft Services, Inc. (Northrop), under request for
proposals (RFP) No. CS-85-34 for the management of seized and forfeited
property handled by the United States Customs Service (Customs).
Consolidated asserts that award by Customs to Northrop was unreasonable
and not consistent with the evaluation criteria under the RFP and that
award should have been made to Consolidated as the highest rated
offeror.
We deny the protest in part and dismiss it in part.
The RFP solicited a cost-plus-award-fee contract. Offerors were to
submit separate technical and business (cost) proposals containing
information specified by the RFO. The RFP provided for award to the
offeror which "provides the quality/cost relationship that is the most
advantageous to the government." The RFP identified three specific
technical evaluation criteria and the listed maximum number of points a
proposal could receive for each criteria, as follows: (1) understanding
- 15 points; (2) capability - 35 points; and (3) approach - 30 points.
In addition to the maximum of 80 points for technical factors, the RFP
assigned 30 points as the maximum score a proposal could receive for
cost.
The Source Evaluation Board (SEB) found four proposals to be in the
competitive range. The initial technical ranking of these proposals was
as follows: National Systems Management Corp. (National) (75.25
points), Consolidated (72.25 points), Boeing Services International,
Inc. (Boeing) (70.50 points), and Northrop (67.25 points). the SEB then
gave each firm in the competitive range the same list of questions
concerning technical and business issues and had each firm make an oral
presentation to the SEB. The SEB then reevaluated and rescored the
proposals, but the technical rankings remained the same.
Customs requested best and final offers from the four firms.
Offerors were instructed that business proposals in the best and final
offers should be revised from a total cost basis to a unit cost for each
work category and should respond to any issues which were noted in an
audit conducted of each proposal by the agency.
All four firms submitted best and final offers. The best and final
offers were reviewed by the SEB, and no changes occurred in the
technical ratings. However, in the process of source selection,
additional questions arose concerning each offeror's capability to
perform. Consequently, negotiations were reopened in order to clarify
specific points regarding corporate capabilities, use of subcontractors,
qualifications of core management, and ability to accommodate changes in
workload. Each firm made another oral presentation to the SEB regarding
these issues and then submitted revised best and final offers.
The final numerical scoring for each offeror was as follows:
TABLE OMITTED
Despite the fact that Consolidated received the highest score, the
SEB recommended to the source selection official that award be made to
Northrop primarily because Northrop's proposed approach of strong,
centralized management entailed less risk than Consolidated's proposed
approach. The source selection official followed the recommendation of
the SEB and selected Northrop for award.
Consolidated first asserts that the award to Northrop lacked a
rational basis and was not consistent with the RFP award criteria.
Consolidated argues that, since its offer received a higher score than
any of the other offers, it was entitled to the award under the RFP.
Consolidated points out that some discretion in selection would be
permissible if the technical superiority of one offer warrants the
additional cost but, since the consolidated and Northrop offers were
essentially equal tehcnically, cost should be the determining factor and
this would have resulted in award to consolidated as the low cost
offeror. It also asserts that the decision to award to Northrop because
Northrop's offer entailed less risk involved consideration of a factor
which was not included in the RFP as a basis for evaluation.
We have held that, as a general rule, our Office will defer to the
source selection official's judgment. Bank Street College of Education,
63 Comp. Gen. 393 (1984), 84-1 C.P.D. Paragraph 607. The selection
decision and the manner in which such an offical uses the results of the
technical and cost evaluations and the extent, if any, to which one is
sacrificed for the other are governed only by the tests of rationality
and consistency with established evaluation factors. InterAmerica
Research Associates, Inc., B-219650, Dec. 21, 1985, 85-2 C.P.D.
Paragraph . . . .
In considering protests such as this, we do not conduct a de novo
review of the technical proposals or make an independent determination
of their acceptability or relative merit. Cadillac Gage Co., B-209102,
July 15, 1983, 83-2 C.P.D. Paragraph 96. That is the function of the
selection official who is to exercise informed judgment and sound
discretion. Macmillan Oil Co., B-189725, Jan. 17, 1978, 78-1 C.P.D.
Paragraph 37. Our review is limited to examining whether the evaluation
was fair and reasonable and consistent with the stated evaluation
criteria. Cadillac Gage Co., B-209102, supra. We will question a
selection official's determination concerning the technical merits of
proposals only upon a clear showing of unreasonableness, abuse of
discretion or violation of procurement statutes or regulations. Bank
street College of Education, supra. The fact that the protester
disagrees with the selection official's conclusion does not itself
render the evaluation unreasonable. Kaman Sciences Corp., B-190143,
Feb. 10, 1978, 78-1 C.P.D. Paragraph 117.
The thrust of Consolidated's protest in this regard is that the
source selection official's decision to award to Northrop lacked a
reasonable basis because the basis for the decision was not consistent
with the stated evaluation criteria. We disagree with Consolidated and
find that the award selection was reasonable and in accord with the
stated award selection factors.
Initially, we note that Consolidated's reliance on the point scores
as an indication of its alleged superiority is misplaced. Numerical
point scores, when used for proposal evaluation, are useful as guides
for intelligent decision-making. Unless a solicitation sets forth a
precise numerical formula and provides that a contract will be awarded
to the offeror whose proposal receives the highest number of points,
award need not be made on that basis. Troy State University,
B-212274.2, Aug. 15, 1984, 84-2 C.P.D. Paragraph 182. Here, there was
no such statement that the highest scored offeror would be awarded a
contrac. Offerors were specifically advised that:
"Although numerical ratings may be used as a guide in
contractor selection, the right is reserved to select a contractor
who may not have the highest numerical rating (technical and cost
combined)."
Thus, while the numerical scores, of course, must be considered by
the source selection official, the selection official ultimately decides
what, if any, significance is to be given the scores.
With regard to the selection of Northrop for the award, we cannot say
that the determination that Northrop's offer was technically superior
and worth the additional cost was unreasonable or inconsistent with the
RFP factors for award. The source selection official concurred with the
SEB's conclusion that Northrop's offer was superior to Consolidated's
because Northrop's offer involved less risk than Consolidated's offer.
Customs reports that risk was a particular concern because, for the
first time, Customs was attempting to establish overall management of
seized property at the national level. Customs believed that, while
property management on the national level has the potential for
increased revenue, risk existed in this national-level approach by
increasing the potential for large-scale fraud and abuse, amplification
of errors, and inefficiencies in operations due to the expanded
administrative overhead.
The SEB examined the offerors' proposed methods of approach in order
to determine which approach would most likely reduce the risk of these
potential problems occurring. The record supports the SEB view that
Consolidated is a recently formed joint venture composed of two firms --
one which has experience in the criminal justice system and the other
which is a liquidator of general merchandise -- that proposed to manage
large, specialized subcontractors for particular items such as cars and
art works for each area of operation. The SEB found that Northrop was a
large firm with 28 years of experience in government contracting and it
proposed to provide centralized management oversight. The SEB concluded
that there would be less risk of administrative difficulties if the
contract was performed by Northrop, a large, experienced contractor
which offered strong, centralized management.
Consolidated states that there is no risk involved in contracting
with consolidated because the firm offered an alternative proposal under
which it would run the project on a no cost basis, and it offered to
post a performance bond of any amount to insure performance. It further
states that there is actually more risk in contracting with Northrop
because Northrop's proposed approach is similar to Customs' current
approach which has lost money and Northrop has no experience in
performing government contracts concerning property management.
Consolidated notes that it has performed many property management
contracts in the private sector.
Consolidated has not shown unreasonable the agency's finding that a
strong, centralized management overseeing numerous subcontractors, such
as that offered by Northrop, would reduce the risk involved in this new
effort. Customs explains that a similar approach by Customs to that
proposed by Northrop was not profitable because the management of seized
property was not Customs' primary mission and its personnel were not
suited for these duties. Customs further points out that a contractor
having sole responsibility for these duties, on the other hand, could
reasonably be expected to perform more efficiently and to be profitable
using this approach.
Furthermore, the record indicates that Consolidated did not offer a
no-risk, no-cost proposal. Consolidated's initial business proposal
indicated that the total cost of its system for each option year would
be at no cost and would result in a net profit for Customs. However, in
Consolidated's subsequent modification prepared in response to the
revised costing instructions, the only mention of a no-cost offer was in
Consolidated's cover letter which stated that Consolidated proposes to
perform at no cost and with the highest net profit to the government.
Other than this statement, Consolidated's best and final offer does not
contain a no-cost proposal and the cover letter to the best and final
offer stated that the agency "should consider the old assumptions and/or
costs to be superseded by the new." Thus, contrary to Consolidated's
claim, there is no indication that Consolidated submitted an alternative
no-cost proposal that the SEB should have considered. As to the
performance bond offered by Consolidated, a performance bond merely
guarantees that a firm will perform a contract and, if the contractor
defaults and fails to complete the contract, that the surety will
complete the contract or pay damages up to the limit of the bond. The
bond does not provide any motivation to perform efficiently or
economically and it does not guarantee against the other risks expressed
by Customs. We also note that Consolidated has not shown that its more
decentralized approach addresses concerns such as the potential for
amplification of errors.
The selection of a contractor which can best perform a contract
involves a choice between methods of operation and the acceptance of a
certain level of risk. the agency has decided that it cannot afford the
risk that Consolidated's method of operation poses, and Consolidated has
not shown that the decision not to select Consolidated's proposal
because it represented greater risk than Northrop's in this particular
procurement situation is unreasonable. See Laser Photonics, Inc.,
B-214356, Oct. 29, 1984, 84-2 C.P.D. Paragraph 470.
We note that the use of the degree of risk to differentiate between
proposals was not unreasonable since the element of risk is clearly
related to the evaluation criteria of capability and approach. Under
the criterion of capability, an "(o)fferor (was required to) demonstrate
his ability to handle the magnitude and scope of the work involved,"
while under the criterion of approach, an "(o)fferor (was required to)
indicate approach for carrying out the elements of this contract." While
technical evaluations must be based on the stated evaluation criteria,
the interpretation and application of such criteria often involve
subjective judgments. Thus, we will not object to the use of evaluation
factors not specifically stated in the RFP where they are reasonably
related to the specified criteria. Our concern in considering an
objection to the use of an evaluation factor not specifically stated in
the RFP is whether it is so reasonably related to the specificed
criteria that the correlation is sufficient to put offerors on notice of
the additional criteria to be applied. National Biomedical Research
Foundation, B-208214, Sept. 23, 1983, 83-2 C.P.D. Paragraph 363.
Applying this standard, we find no basis for objecting to the evaluation
of the risk of performance problems because the degree of risk present
is clearly related to the approach used and the ability of the firm to
perform the contract.
Finally, with regard to the selection official's decision,
Consolidated is correct in stating that cost should be the determinative
factor if two proposals are rated technically equal. However, it is
permissible to award the contract to other than the lowest cost offeror
if the RFP so provides and the source selection official's decision to
do so is reasonable and consistent with the established evaluation
scheme. Schneider, Inc., B-214746, Oct. 23, 1984, 84-2 C.P.D. Paragraph
448. The RFP provided that:
"Cost will not be so controlling as to preclude award to an
offeror whose costs of performance are higher if the technical
superiority of the offer warrants the additional cost involved in
the award of a contract to that offeror."
The source selection official agreed with the SEB recommendation
that, despite Northrop's and Consolidated's having essentially equal
technically scores, Northrop's proposal was, in fact, technically
superior to Consolidated's due to the proposed method of approach. As
discussed above, the record provides a rational basis for the decision
that Northrop's proposal was technically superior. Accordingly, under
the RFP, Customs was not required to award the contract to Consolidated
as the lowest cost offeror.
Consolidated asserts that Northrop should have been downgraded in
certain areas and that Consolidated was improperly downgraded in other
areas and, consequently, its proposal should have been regarded as
technically superior to Northrop's. In this connection, Consolidated
states that Northrop's proposal should have been downgraded because
Northrop failed to list its proposed subcontractors as required by the
RFP and because Northrop's only relevant experience is managing
aircraft, which is only 1 percent of the Customs inventory.
With regard to the requirement to list subcontractors, the
solicitation referred to subcontractors twice. first, in a section
entitled "Contract Administration Data," the solicitation provided that
the offeror's proposal shall identify all subcontracts/consultant
arrangements proposed for this effort. This obviously relates to
contract administration and, generally, such information need not be
provided until after the contract is awarded. Second, in the section
entitled "Instructions, Conditions, and Notices to Offerors," the
solicitation specified information required for proposed subcontracts.
However, a list of subcontractors was not required in the section
entitled "Evaluation Factors for Award," nor were subcontracts discussed
in those parts of the instructions section which advised offerors what
to include in their technical and business proposals. Thus, in our
view, the solicitation did not require subcontractor information for
purposes of evaluation, but rather solicited the information for
reviewing the manner in which an offeror proposed to perform and would
actually perform, which are matters of responsibility and contract
administration, respectively. See Linde Construction, B-206442, Mar. 17,
1983, 83-1 C.P.D. Paragraph 271. Under these circumstances, the agency
did not act improperly in not downgrading Northrop for failing to list
its subcontractors. Furthermore, we note that the SEB recognized that
Northrop did not list its proposed subcontractors. The SEB was
satisfied by the firm's plan to initially utilize contractors currently
providing services to customs, if they could meet standards established
by Northrop and had a record of satisfactory past performance, and to
later consolidate its subcontract operations to the extent economically
feasible.
As to Northrop's alleged lack of relevant experience, Consolidated
points to the solicitation requirement that in the technical proposal
"(t)he offeror's competence and experience will demonstrate his ability
to handle general merchandise plus one of the three categories of
conveyances: vehicles, aircraft or watercraft" and argues that this
provision established a threshold requirement of experience which
Northrop failed to meet because it has no experience in general
merchandise. Consolidated, however, has misinterpreted this
solicitation provision. This provision does not require previous
experience in handling general merchandise; it merely requires that the
offeror demonstrate that its competence and experience, which apparently
may be in personal property management and/or other areas will enable it
to handle general merchandise plus one of the three listed categories of
conveyances. The agency evaluators determined that Northrop is able to
handle general merchandise and at least one of the listed categories,
and Consolidated has not shown that this was an unreasonable
determination. Thus, we find that Northrop's proposal was evaluated
reasonably and in accordance with the evaluation criteria.
Consolidated also asserts that its technical proposal was improperly
downgraded. First, it states that its technical score was reduced from
its initial point score on the basis of its revised best and final offer
even though the agency did not change the original technical
requirements or the scope of work and Consolidated did not change its
technical approach or capabilities or present any new information in its
revised . . . final offer. Consolidated argues that the reasons given
for reducing its technical score were not rationally related to the
evaluation criteria or its project organization or design.
Initially, the fact that a proposal is downgraded during the
evaluation process is not improper even though the concerns brought out
in the final evaluation of the protester's proposal existed in its
initial proposal. The evaluators apparently expected that in
presentations and revisions, Consolidated would remedy the deficiencies
in its proposal; however, in the evaluators' view, Consolidated did not
correct its deficiencies. See C.D. Systems, Inc., B-217067, Apr. 5,
1985, 85-1 C.P.D. Paragraph 396. As long as the agency evaluation was
fair and reasonable and consistent with the evaluation criteria, we will
not substitute our judgment for the agency's finding that Consolidated's
proposal was less acceptable than it was when initially evaluated.
Electronic Data Systems Federal Corp., B-207311, Mar. 16, 1983, 83-1
C.P.D. Paragraph 264.
The reductions in Consolidated's technical score were in the
criterion of capability, primarily for the firm's failure to propose a
definite replacement for project manager for operations and the firm's
failure to adequately answer questions relating to managerial,
capability and operational skills in its revised best and final offer.
As to the project manager, Consolidated states that its proposed manager
would be available to perform the contract and that it offered to
present backup candidates to the SEB for every managerial position.
However, Consolidated never presented a definite replacement whose
credentials the evaluators could examine to assure themselves that
Consolidated could capably perform the contract in the event the
proposed manager was not available. On this record, Customs' concern
was reasonable since the project manager is the most significant
position in terms of overall daily operational responsibility, and the
proposed project manager was offered another position during the
evaluation process and, therefore, it was entirely possible that he
would not be available to perform the contract for Consolidated.
The other basis for downgrading Consolidated's technical score was
Consolidated's failure to adequately answer questions relating to
capability. We think the record reasonably supports the agency's
finding that Consolidated's final offer did not adequately address the
agency's concern regarding Consolidated's capability. The SEB examined
the capabilities of the joint venture and of the proposed personnel to
provide successful personal property management.
As to general capability, the SEB concluded that Consolidated failed
to satisfactorily present itself as one entity that Customs could deal
with on all aspects of the project. The record indicates that the
evaluators considered this a major problem because Consolidated as a
newly formed organization did not have a performance record and,
therefore, its capability was unknown and that only one member of the
joint venture had any experience in personal property management. The
record further indicates that the evaluators were concerned that
Consolidated was to be managed by a variety of committees, but the
relationships and accountability of these committees were not clearly
stated, and that Consolidated did not present evidence that its
organization has proven, institutionalized management systems for
directing, organizing, staffing, and controlling the project. These
factors led to the conclusion that the overall organization did not
demonstrate prior experience in personal property management as an
organization. The evaluation documents also indicate that the
committees and project staff assembled by Consolidated largely included
individuals who had never worked together.
With regard to individual experience, the evaluators found that more
than half of the personnel offered did not have directly related
experience and that those with experience were to serve on management
committees and not in management roles on the project staff. In its
final presentation, Consolidated did not present any additional
information which changed these judgments and, thus, for these reasons,
Consolidated's capability score was reduced.
Consolidated contends that the alleged problems in its logistics and
management do not exist and that, in previous stages of the evaluation
process, it had answered all of the questions raised by the SEB. It
stresses that, as a joint venture, its capability must be evaluated as
an entity and, as an entity, it has the required capabilities.
Consolidated acknowledges that one member of its joint venture does not
have experience in personal property management, but points out that its
other member is vastly experienced. It also contends that the members
of its committees are qualified and the relationship between its
committees and the lines of authority is clear and that these committees
cover usual corporate functions.
The SEB considered the fact that Consolidated is a joint venture and
the experience of its member organizations. However, in assessing the
general capabilities of the offeror, the SEB examined not only the
components of the joint venture, but also the entity itself: its
organization and staff. The SEB found, for example, that none of the
individuals filling the four key positions on the project staff were
experienced in personal property management. In this connection, the
SEB specifically noted that if Consolidated's proposed project staff had
offered more personnel from the experienced member of the joint venture
in key positions, the evaluation of the firm's capability would have
been different. Thus, the SEB did consider Consolidated as a joint
venture, and its evaluation of the capability of the firm and its
individual personnel has not been shown to be unreasonable.
Despite the fact that the SEB had originally rated Consolidated's
proposal highly, the failure of the firm to provide a definite
replacement for the project manager and to adequately address certain
managerial issues raised in discussions provided a reasonable basis for
finding the proposal less acceptable than when it was originally
considered.
Consolidated also complains that the change in cost proposal
instructions adversely affected its rating. It states that the change,
in addition to comparing proposals on a unit-cost basis instead of on a
total-cost basis, instructed offerors to use certain cost assumptions in
preparing these proposals. Consolidated asserts that the assumptions
did not accurately reflect its technical approach and were highly biased
in favor of Northrop's multisubcontractor approach and, as a result,
although it remained the low offeror, the margin between its cost score
and Northrop's was reduced.
The SEB explains that it was unable to determine the best price under
the initial evaluation of cost proposals because each offeror made
assumptions or interpretations which made uniform comparison of
proposals impossible. Our review of the cost proposals supports this
position. Therefore, the request for cost proposals with more specific
details appears to be reasonable. We also note that our review of the
costs proposed by Northrop and Consolidated indicates that the number of
points received for cost by Northrop was, in fact, less under the
revised cost instructions than it would have received under the
evaluation of its initial cost proposal. Therefore, contrary to its
assertion, Consolidated was not prejudiced by the change.
In this connection, we note that, as to the cost assumptions and also
the changes in technical scores and the ultimate selection of Northrop,
Consolidated has suggested that Customs was biased and its actions were
all a pretext designed to justify award to Northrop. The protester has
a heavy burden of proving bias on the part of evaluators or the
selection official, and unfair or prejudicial motives will not be
attributed to those individuals on the basis of inference or
supposition. Kelsey-Seybold Clinic, P.A., B-217246, July 26, 1985, 85-2
C.P.D. Paragraph 90. Consolidated suggest bias based upon the fact that
changes were made during the evaluation process. We do not find any
merit in its speculation in this regard. We have found that all of the
agency's actions were reasonable and consistent with the evaluation
criteria.
Finally, in its comments on the agency's report, Consolidated
contends for the first time that no new information was requested for
submission with revised best and final offers and that it was not in the
government's best interest for agency evaluators to reopen negotiations
after the initial best and final offers were received. Consolidated
argues that the reopening of negotiations was in violation of Federal
Acquisition Regulation, Section 15.611(c) (Federal Acquisition Circular
84-5, April 1, 1985).
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
it original timely protest with a new ground of protest in its response
to the agency report more than 10 working days after the basis for the
new argument should have been known, the new ground is untimely. See
Radionic Hi-Tech, Inc., B-219116, Aug. 26, 1985, 85-2 C. P.D. Paragraph
230. Consolidated was aware that the agency was reopening negotiations
in July 1985. Since we received Consolidated's comments on October 20,
the new ground is clearly untimely and will not be considered. 4 C.F.R.
Section 21.2(a)(2).
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
FILE: B-220049.2 86-1 CPD 333 DATE: April 7, 1986
MATTER OF: Price Waterhouse--Reconsideration
DIGEST:
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - DISCUSSION WITH ALL
OFFERORS REQUIREMENT - "MEANINGFUL" DISCUSSIONS
1. The General Accounting Office affirms its decision
sustaining a protest that the agency did not conduct meaningful
discussions with all offerors in the competitive range, where the
only probative evidence filed with GAO, including an affidavit by
the chairman of the evaluation panel, supports the protester's
contention.
GENERAL ACCOUNTING OFFICE - RECOMMENDATION - CONTRACTS - PRIOR
RECOMMENDATION - AFFIRMED
2. A decision sustaining a protest and recommending additional
discussions with the offerors and oossible contract termination
will not be reconsidered based upon the estimated costs of
termination where, although the protest was filed within 10 days
of award, the agency proceeded with performance of the contract
upon a finding that to do so would be in the best interest of the
government, since the General Accounting Office is required by the
Competition in Contracting Act to disregard such costs in
recommending a protest remedy.
GENERAL ACCOUNTING OFFICE - RECOMMENDATION - CONTRACTS - PRIOR
RECOMMENDATION - AFFIRMED
3. Previous disclosure of an offeror's ceiling price for a
fixed-price, incentive contract does not constitute grounds for
changing GAO's recommendation that discussions be reopened where
the offeror's target price and incentive formula were not
disclosed, prejudice to the parties would be minimal, and the
agency failed in its obligation to conduct meaningful discussions
in the first instance.
The Department of the Treasury requests reconsideration of our
decision in Price Waterhouse, B-220049, Jan. 16, 1986, 65 Comp. Gen. ,
86-1 CPD P 54. In sustaining the protest, we conclulded that the agency
failed to conduct meaningful discussions with the protester. Treasury
raises a number of grounds for reconsideration, including a contention
that we failed to consider evidence in the record establishing that
meaningful discussions were conducted.
We affirm our prior decision.
Price Waterhouse protested the selection of Arthur Young & Company
under solicitation No. A-85-9 to design, develop, and implement a
department wide payroll system. Only Price Waterhouse and Arthur Young
were in the competitive range for the fixed--price, incentive contract.
In their initial proposals, both firms estimated levels of effort to
perform the work greatly in excess of the government's estimates. After
discussions, Arthur Young reduced its estimated level of effort by about
30 percent and its price by almost 50 percent. Price Waterhouse
slightly raised its level of effort and price, so that, after best and
finals, Arthur Young's price was less than one-half of Price
Waterhouse's.
Upon learning of the award to Arthur Young and the contract ceiling
price, Price Waterhouse protested on September 9, 1985, alleging that
either the firms did not compete on the same basis or Treasury accepted
a below-cost proposal, which Price Waterhouse believed would undermine
the integrity of the procurement system because of unusual opportunities
for change orders and follow-on contracts at artificially high prices.
Subsequently, the protester learned from the administrative report
that Treasury considered it to have "grossly overestimated" much of the
level of effort required, and that Treasury recognized this early in the
procurement. As a result, during a conference at our Office on October
21, Price Waterhouse argued that Treasury failed to indicate during
discussions that the firm had overestimated the level of effort required
and had actually encouraged the firm to increase its effort in some
areas.
In its comments on the agency report and conference, Price Waterhouse
provided sworn affidavits by the four representatives that participated
in discussions with Treasury. Each of them stated that, except for the
agency's preference tnat fewer tasks be initiated in the first contract
year to ease funding constraints in that year, Treasury mentioned no
concern about the protester's proposed levels of effort or cost. The
Price Waterhouse representatives stated that Treasury officials
indicated that Price Waterhouse had underestimated the scope of work for
several project tasks. Price Waterhouse also provided a letter it
received from Treasury following the discussions that stated concerns
about the Price Waterhouse proposal and was intended to assist in
preparing a best and final offer. The letter generally involved areas
in which the agency apparently believed that the firm had underestimated
the scope of the project.
Based upon the record before us, we concluded that Treasury had not
conducted meaningful discussions with Price Waterhouse because it had
not expressed its concern that Price Waterhouse substantially
overestimated the effort necessary on key portions of the work. We
sustained the protest on this basis. Since we had no evidence regarding
the subject of discussions between Arthur Young and the agency, we noted
that if Arthur Young had been told of Treasury's concern about its
estimated levels of effort and price, this would raise an additional
question regarding equal treatment of the offerors.
Information in the Record
Treasury contends that our Office engaged in soeculation about
Treasury's actions and failed to accept a statement contained in the
record as establishing that the agency conducted meaningful discussions
with Price Waterhouse. The statement was as follows:
"PW (Price Waterhouse) was consistently above the estimated
level of hours set by Treasury for each task on the basis of
contractors with far less experience than PW. Moreover, PW
allocated an excessive number of hours to top management officials
and senior consultants for tasks that could primarily be completed
by its project leaders and analvsts. The government recognized
this early on in the procurement, and it was its position during
the factfinding session that PW was encompassing too much, that
its proposal was too heavy, and that costs should be scaled down."
This statement gave rise to emphatic denials by Price Waterhouse at
the bid protest conference and in each of the supplementary affidavits
by Price Waterhouse representatives. The protester pointed out that the
statement was made in a legal analysis by a Treasury attorney who did
not attend the discussion sessions, and that there is no support for the
assertion in the contracting officer's statement of facts or in other
documents submitted with the administrative report. The Treasury
attorney reported in response to a telephone request for confirming
documents that the quoted statement only related to the agency's
"position" and did not record what Price Waterhouse was actually told.
Consequently, at the conference and on two subsequent occasions, our
Office asked Treasury to supplement the record to establish what the
agency actually did tell the offerors. 1/ We requested the entire
record concerning the discussions, including agendas, summaries or
minutes, notes taken by participants and any other evidence of the
contents of the meetings. We also agreed that, if the agency believed
necessary, it could provide contemporary materials such as affidavits to
ensure that the record accurately reflected the discussions, subject to
our Office's final determination regarding whether the contemporary
materials were appropriate to receive under our regulations.
On January 15, the day before we issued our decision on the protest,
the agency provided an affidavit by the chairman of the evaluation panel
and a letter to Treasury from Arthur Young summarizing the discussions.
Pursuant to CICA, 31 U.S.C.A. Sec. 3555(a) (West Supp. 1985), and our
regulations, 4 C.F.R. Sec. 21.3(g) (1985), we did not consider the late
filing since it would have delayed issuance of our protest decision.
In sustaining Price Waterhouse's protest, we did not infer or presume
that the withheld documents or the affidavit and letter filed on January
15 were favorable or unfavorable to Treasury. Nor did we fail to
consider the statement in Treasury's legal analysis regarding its
position about Price Waterhouse's cost. On the record before us at that
time, the only probative evidence was that submitted by the protester,
and we reached our decision based upon that evidence.
Treasury also argues that the affidavit by the evaluation committee
chairman and the Arthur Young letter filed with our Office on, January
15 establish that meaningful discussions were conducted and that our
decision was wrong. We disagree.
The chairman of the evaluation committee claims the offerors were
apprised of Treasury's serious concerns about the estimated levels of
effort and prices through two statements made by Treasury at the
discussion sessions. First, he states that he began each session bv
stating that the costs proposed for several large deliverables to be
initiated in 1985 were more than the agency had projected. Arthur
Young's summary of these discussions reports that Treasury asked the
following question:
"Treasury anticipates that TUPS (the project) involves several
large deliverables which need to be funded in FY 1986. To
facilitate Treasury's funding process, please indicate how the
deliverables might be divided into smaller but nevertheless
logical contract deliverables."
Price Waterhouse confirms that Treasury conveyed its desire that the
offerors "restructure the project so that performance of fewer tasks
would begin during the first fiscal year." Thus, while concerned about
fiscal year 1986 costs, the agency apparently requested the offerors to
postpone some work rather than having indicated that some reduction in
total cost would be appropriate.
Second, the affidavit states that by questioning the staffing and
cost of a review panel that each firm proposed, Treasury adequately
conveyed its concerns. Each offeror proposed a reiew panel consisting
of four individuals, which was primarily to be available for
consultation. We do not believe that discussion of efficient staffing
and proposed use of a small group providing auxiliary support to the
contract effort met Treasury's obligation to apprise Arthur Young and
Price Waterhouse of significant concerns that the work had been largely
overestimated and overpaid.
The Arthur Young letter submitted to us by Treasury is dated August
2, l985, and states that it provides technical clarification to the
firm's proposal. It restates and answers the questions asked by
Treasury during discussions. None of the questions recounted by Arthur
Young indicate that Treasury raised its concerns about the firm's
estimated levels of effort and price other than the inquiry about the
work of Arthur Young's review panel.
Treasury has neither confirmed nor denied that additional documents
relating to discussions exist. We again conclude that Treasury failed
to conduct meaningful discussions with all offerors in the competitive
range, and affirm our prior decision.
Remedy
Treasury asks that we reconsider our recommendation that the agency
conduct another round of discussions, request revised proposals, and
terminate Arthur Young's contract if Price Waterhouse is the successful
offeror. Treasury claims that because Arthur Young's price has been
disclosed, allowing further proposals in effect would constitute an
auction. On the other hand, Treasury suggests that Arthur Young might
raise its price and the government could ultimately pay more for the
payroll system.
Conducting meaningful discussions with all offerors in the
competitive range is a statutory obligation whenever it cannot be
clearly demonstrated that acceptance of an initial proposal will result
in the lowest overall cost to the government. 41 U.S.C.A. Sec. 253b(d)
(West Supp. l985). under this standard, Treasury was clearly obligated
to apprise both offerors of its concern over estimated levels of effort
and resulting price. While the agency has not provided us with the
complete record of discussions, the evidence before us supoorts our
finding that meaningfull discussions were not conducted with the
protester and may not have been conducted with Arthur Young. Only
Arthur Young's ceiling price has been revealed by Treasury; its target
price, incentive fee formula, and staffing levels have not been
disclosed. Under these circumstances, we believe that any prejudice to
the parties from reopening discussions would be clearly outweighed by
the Harmful effect on the integrity of the competitive procurement
system if the agency's action is not remedied. See Honeywell
Information Systems, Inc., 56 Comp. Gen. 505 (1977), 77-1 CPD P 256.
The agency also argues that it will incur considerable cost if it
must terminate the current contract, and that we should have considered
these costs in making our recommendation.
When the head of a procuring activity decides, under 31 U.S.C.A.
Sec. 3553(d) (2)( A)(i), to continue performance of a protested contract
based on a finding that to do so would be in the best interest of the
government, we are required to make recommendations without regard to
any cost or disruption from terminating, recompeting, or reawarding the
contract. 31 U.S.C.A. Sec. 3554(b)(2). The purpose for this
requirement was explained in the Conference Report accompanying the bill
enacted as the Deficit Reduction Act of 1984, which contained CICA, as
follows:
"Before notifying the Comptroller General that continued
performance of a disputed contract is in the government's best
interest ... the head of the procuring activity should consider
potential costs to the qovernment from carrying out relief
measures as may be recommended by the Comptroller General if the
protest is subsequently sustained. This is to insure that if the
Comptroller General sustains a protest, such forms of relief as
termination, recompetition, or re-award of the contract will be
fully considered for recommendation. Agencies in the past have
resisted such recommendations on the grounds that the government's
best interest would not be served by relief measures of this sort
because of the added expenses involved. This provision is
designed to preclude that argument in the future, and thus to
avoid prejudicing those relief measures in the Comptroller
General's review."
H.R. Rep. No. 861, 98th Cong., 2d Sess. 1436 (1984). Prior decisions
of our office cited by Treasury, American Sterilizer Co., B-219021,
Sept. 20, 1985, 85-2 CPD P 313, and Arthur Young & Co., B-216643, May
24, 1985, 85-1 CPD P 598, in which we considered termination costs in
recommending a remedy, did not involve an ageny finding under 31
U..S.C.A Sec. 3553(d) 2(A) (i). They are not relevant to this
proceeding.
We affirm our decision.
Acting Comptroller General
of the United States
FOOTNOTES
1/ As we noted in the protest decision, the record of discussions
should have been included in the original administrative report. The
protester's contention that Treasury misled it during discussions is
really a refinement of its original argument that the offerors did not
compete on the same basis. In its protest letter, Price Waterhouse
stated that the discussions with Treasury confirmed to the protester
that it had not overestimated the required level of effort, and that the
firm had increased its price and estimated levels of effort in response
to Treasury advice. The Competition in Contracting Act of 1984 (CICA),
31 U.S.C.A. Sec. 3553(b)(2) (West Supp. 1985), requires agencies to
submit to our Office "a complete report (including all relevant
documents) on a protested procurement." The record of discussions with
both offerors is clearly relevant to Price Waterhouse's protest as
initially filed.
FILE: B-220048 85-2 CPD 622
DATE: December 3, 1985
MATTER OF: Rainbow Navigation, Inc.
CONTRACTS - PROTESTS - ALLEGATIONS - UNSUBSTANTIATED
1. Protester's statements and actions during the procurement process
are inconsistent with its contentions that RFP did not permit services
offered by awardee or was misleading in that regard.
CONTRACTS - PROTESTS - CONTRACT ADMINISTRATION - NOT FOR RESOLUTION
BY GAO
2. Whether contractor performs in a manner consistent with the
contract involves a matter of contract administration for the
contracting agency that GAO does not review.
Rainbow Navigation, Inc. (Rainbow), protests the award of contract to
Trailer Marine Transport Corporation (TMT) under request for proposals
(RFP) No. N00033-85-R-8507 issued by the Military Sealift Command (Navy)
for the transportation of military cargo between the United States and
Praia de Vittoria, Azores.
Rainbow contends that the award should not have been made to TMT
because Rainbow construes the RFP as soliciting lift on/lift off (LoLo)
services at Praia de Vittoria and, therefore, TMT's offer of a roll on/
roll off (RoRo) service did not comply with the RFP. Alternatively,
Rainbow contends that, if the RFP was not restricted to LoLo proposals,
Rainbow was misled by the RFP into believing that it was restricted.
Additionally, Rainbow contends that the RFP is defective because it
contemplates a shipping service utilizing a tug/barge system and the
Azores authorities object to that system offered by Rainbow and TMT. In
the circumstances, Rainbow contends that the award should be terminated
and the procurement recompeted.
We deny the protest.
The Navy points to language in the RFP calling for a self-sustaining
shipping service as permitting either a RoRo and LoLo operation.
Rainbow's construction of the RFP and alleged misdirection by the RFP
are inconsistent with Rainbow's own statements and actions. For
example, while Rainbow contends that the RFP led it to believe that RoRo
services were not acceptable under the RFP, we note that at the
preproposal conference, Rainbow asked if RoRo facilities were available
at Praia da Vittoria. Such an inquiry is not consistent with a view
that the RFP did not permit RoRo services or was misleading in that
regard. Further, we note that at the suggestion of the contracting
officer and another military representative, Rainbow and other offerors
made a trip to Praia da Vittoria to ascertain if facilities were
available there for RoRo. Such a trip is likewise inconsistent with a
view that the RFP only solicited LoLo services or was misleading in that
regard. It is significant too that, although Rainbow offered a LoLo
configuration, its proposal noted that its vessel was capable of RoRo
operation if port facilities should improve. Such a note is
inconsistent with Rainbow's alleged reading of the RFP as precluding
RoRo operations.
Further, while the local authorities in the Azores may object to the
use of a tug/barge system at Praia da Vittoria, the Navy was unaware
that the local authorities had any objection to the system in the RFP
when award was made. Whether TMT now performs in a manner consistent
with the contract involves a matter of contract administration for the
contracting agency that we do not review.
Harry R. Van Cleve
General Counsel
FILE: B-220045 85-2 CPD 657
DATE: December 13, 1985
MATTER OF: Boston Intertech Group, Ltd.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES - FILING
PROTEST WITH AGENCY
1. Protest will not be dismissed for failure to furnish the
contracting officer a copy of the protest within a day after filing with
GAO as required by GAO's Bid Protest Regulations where the delay did not
hamper the protest proceedings.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - REJECTION - FAILURE
TO MEET SOLICITATION REQUIREMENTS
2. Agency decision to reject an offer is proper where the technical
proposal is so deficient that it would require major revisions to be
made acceptable.
CONTRACTS - NEGOTIATION - AWARDS - INITIAL PROPOSAL BASIS - PROPRIETY
3. Award on an initial proposal basis, without discussions, is
proper where the solicitation advises offerors of this possibility and
the competition clearly demonstrates that acceptance of an initial
proposal will result in the lowest overall cost to the government.
CONTRACTS - PROTESTS - INTERESTED PARTY REQUIREMENT - PROTESTOR NOT
IN LINE FOR AWARD
4. Since the protester's offer was properly eliminated from the
competition and the protester is therefore ineligible for the award, it
is not an interested party to protest the acceptability of one of the
remaining eligible offers.
Boston Intertech Group, Ltd. protests both the rejection of its
proposal and the proposed award of a contract to Foundation Instruments,
Inc., under request for proposals (RFP) No. N00123-85-R-0708, issued by
the Naval Regional Contracting Center, Long Beach, California.
We deny the protest in part and dismiss it in part.
The RFP was issued as a total small business set-aside on May 20,
1985. It solicited offers for the fabrication and installation of a
fiber optic high data rate network at the Pacific Missile Test Center,
Port Mugu, California. Five firms submitted offers. Of these offers,
three, including Boston Intertech's, were determined to be technically
unacceptable for failure to comply with minimum RFP requirements. The
technically acceptable offers were submitted by Foundation and by
Advanced Fiberoptics Corporation, with prices of $600,199 and
$1,092,995, respectively. The Navy determined, without holding
discussions, that Foundation was the technically acceptable, low offeror
and in line for the award.
Upon learning of the proposed award to Foundation, Advanced
Fiberoptics filed a size protest with the contracting officer arguing,
in effect, that Foundation is nothing more than a sales office in the
United States for a large Canadian company. The contracting officer
subsequently referred the matter to the Small Business Administration
(SBA) for that agency's decision as provided for in the Federal
Acquisition Regulation (FAR), 48 C.F.R. Section 19.302 (1984).
On September 4, Boston Intertech protested orally to the contracting
officer. The company complained about: the rejection of its proposal
as technically unacceptable; the decision not to hold technical
discussions with the offerors; whether Foundation qualifies as a small
business; and whether it was proper for the agency to contract with
Foundation in view of restrictions imposed by the Buy American Act and
the fact that more than 50 percent of the items Foundation intends to
supply allegedly are manufactured in either Canada or Norway. The
contracting officer, however, did not respond favorably to Boston
Intertech's arguments. Therefore, on that same day, September 4, Boston
Intertech prepared a protest to our Office. We received Boston
Intertech's letter on September 6, but the contracting officer did not
receive a copy of the letter until September 11.
As a threshold matter, the Navy believes that the protest should be
dismissed because of the company's failure to furnish a copy of its
protest letter to the contracting officer not later than 1 day after it
filed the protest in our Office, as required by section 21.1(d) of our
Bid Protest Regulations, 4 C.F.R. part 21 (1985).
The purpose of section 21.1(d) is to prevent any delay that would
hamper the ability of the contracting agencies to meet the 25 working
day statutory deadline for filing protest reports with our Office.
Container Products Corp., B-218556, June 26, 1985, 64 Comp. Gen.
(blank), 85-1 CPD Paragraph 727. Section 21.1(f) of our regulations
gives us the discretion to grant exceptions to this requirement, and we
believe that an exception is called for here. We base this
determination on the fact that the contracting officer had actual
knowledge of the grounds of Boston Intertech's protest on September 4;
that we received the agency report 2 days before the statutory deadline;
and that the agency did not formally refer to the protester's failure
to meet the 1-day requirement until it filed its administrative report.
Rosemount, Inc., B-218121, May 16, 1985, 85-1 CPD Paragraph 556.
Therefore, it is clear that the delay in the contracting officer's
receipt of Boston Intertech's protest letter did not hinder the agency's
ability to meet the 25-day statutory deadline, and a strict application
of section 21.1(d) would serve no useful purpose. We will consider the
protest on the merits.
In reviewing complaints like Boston Intertech's concerning the
evaluation of technical proposals, it is not our function to reevaluate
the proposals and make our own determination about their relative
merits. Rather, that determination is the responsibility of the
contracting agency, since it is the agency that is most familiar with
its own needs and will have to bear the burden of any difficulties
resulting from a defective evalution. We will not question the decision
of procuring officials in evaluating proposals unless it is shown to be
arbitrary or in violation of the procurement laws and regulations.
Essex Electro Engineers, Inc., et al., B-211053.2, et al., Jan. 17,
1984, 84-1 CPD Paragraph 74.
Here, the contracting officer found that Boston Intertech's proposal
failed to provide the information requested on pages 24 and 25 of the
RFP involving the sections entitled, "Technical Approach Taken,"
"Potential for Completing the Task in Terms of the Request for
Proposals," and "Risk Assessment." The contracting officer points out
that the RFP cautioned offerors that the technical proposal must include
sufficient information on those topics, and on "Understanding of the
Requirements," to enable the agency's technical personnel to evaluate
the offers. In the contracting officer's opinion, it would require a
complete revision of Boston Intertech's technical proposal to overcome
the proposal's informational deficiencies. Rather than allow this, the
contracting officer decided to eliminate Boston Intertech from the
competition and consider only Foundation's and Advanced Fiberoptics'
proposals for the award.
An agency reasonably may reject a proposal for "informational"
deficiencies that are so material that major revisions and additions
would be required to make the proposal acceptable. PRC Computer Center,
Inc., et al., 55 Comp. Gen. 60 (1975), 75-2 CPD Paragraph 35. Here,
Boston Intertech disagrees with the contracting officer's decision, but
does not provide us with any grounds on which to find the evaluation
arbitrary or in violation of the procurement laws or regulations.
Therefore, we will not question the contracting officer's exercise of
discretion in this matter.
Further, as a general rule, a contracting agency may make an award on
the basis of initial proposals, without holding discussions or
requesting best and final offers, provided that (1) the solicitation
advises offerors of this possibility, and (2) the competition clearly
demonstrates that acceptance of an initial proposal will result in the
lowest overall cost to the government. 10 U.S.C.A. Section 2305(a)(2)(
B)(ii), (b)(4)(A)(ii) (West Supp. 1985). The Navy's RFP specifically
advised offerors that discussions might not be held, and we have no
basis to object to the award price. Moreover, Boston Intertech's offer
was so deficient that the firm clearly would not have been included in
discussions in any event. See PRC Computer Center, Inc., et al., supra.
Accordingly, we cannot find improper the contracting officer's decision
to make an award on an initial proposal basis.
In this connection, Boston Intertech complains that it received its
copy of the RFP so late that it was unable to attend the on-site
inspection held on June 19, 1985. In the protester's opinion, because
it was forced to rush the preparation of its proposal, the contracting
officer should have allowed discussions concerning "site survey matters
in relation to the technical responsiveness of the proposal." This
portion of Boston Intertech's protest is untimely, however. The late
receipt of the RFP and the protester's inability to attend the on-site
inspection were matters that Boston Intertech was fully aware of prior
to the date for the receipt of proposals, and it should have protested
before that date. 4 C.F.R. Section 21.2(a)(1).
Since the protester's offer was properly eleiminated from the
competition, and since the firm therefore is ineligible for the award,
Boston Intertech is not an interested party under section 21.0(a) of our
regulations to protest the remaining issues; even if Boston Intertech
were correct on these issues, the firm would not be in line for award.
See ASEA Inc., B-216886, Feb. 27, 1985, 85-1 CPD Paragraph 247.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
FILE: B-22041.3 85-2 CPD 450 DATE: October 23, 1985
MATTER OF: Sermor, Inc.
DIGEST:
CONTRACTS - PROTESTS - SAME ISSUE(S) RAISED IN PRIOR CASE BY SAME
PROTESTOR
Protest against award is dismissed where the bases of protest
are the same bases as those previously presented to GAO (in a
preaward protest) and dismissed as either insufficient or
untimely.
Sermor, Inc., a small business, protests the award of a contract to
Kan-Du Tool & Instrument Corp. (Kan-Du) under request for proposal (RFP)
No. F09603-84-R-4072 issued by Warner Robins Air Logistics Center,
Robins Air Force Base, Georgia (Air Force).
We dismiss the protest.
Sermor previously protested (B-220041) the Air Force determination
that Sermor was not a responsible offeror for purposes of the instant
RFP. We dismissed the protest after learning that the Air Force had
referred the question of Sermor's responsibility to the Small business
Administration (SBA) and that SBA had declined to issue a certificate of
competency (COC) to Sermor. Sermor then sought reconsideration
(B-220041.2) elaborating on its initial objection to the Air Force
nonresponsibility determination and alleging fraud by SBA. We affirmed
the dismissal because of the absence of any showing that it had been the
result of either errors of fact or of law, since Sermor's initial
objection to the Air Force action was an insufficient statement of a
ground of protest which could not be cured by providing an explanation
in the course of requesting reconsideration and since the allegation of
SBA fraud was untimely. Sermor, Inc.--Reconsideration, B-220041.2, Oct.
8, 1985, 85-2 C.P.D. P .
Although the instant protest (B-220041.3) is couched in terms of an
objection to the award to Kan-Du, Sermor's bases of protest remain the
same, i.e., that Sermor is the low, responsive, responsible offeror and
that, but for improper Air Force and SBA action, it would have received
the award. These bases of protest have been dismissed before for the
reasons stated above and will not be considered anew simply because an
award has now been made to Kan-Du under the RFP.
Robert M. Strong
Deputy Associate
General Counsel
FILE: B-220041.2 DATE: October 8, 1985
MATTER OF: Sermor, Inc. -- Reconsideration
DIGEST:
Determination to dismiss protest, without obtaining agency report,
under 4 C.F.R. ! 21.3(f) is affirmed on reconsideration where protester
fails to establish that determination was based on either errors of fact
or of law.
Sermor, Inc., a small business, requests reconsideration of our
September 9, 1985, dismissal of its September 5, 1985, protest. Sermor
protested award to any other firm, claiming that it was entitled to the
award as the low responsive, responsible bidder. We dismissed the
protest, under section 21.3(f) of our Bid Protest Regulations, 4 C.F.R.
! 21.3(f) (1985), after learning from the Air Force that the question of
Sermor's responsibility had been referred to the Small Business
Administration (SBA) and that SBA had declined to issue a certificate of
competency (COC) to Sermor.
On reconsideration, Sermor contends: (1) GAO improperly relied on
oral advice from the Air Force as a reason for dismissing Sermor's
protest without affording Sermor an opportunity to comment; (2) SBA
acted fraudulently, or in bad faith, in its review of Sermor's
application for a COC; and (3) the Air Force and the Defense Contract
Administration Services Management Area/Orlando (DCASMA) are improperly
determining that Sermor is not responsible.
In order to prevail in its request for reconsideration, Sermor must
show either errors of fact or of law in our prior decision. Bid Protest
Regulations, 4 C.F.R. ! 21.12(a) (1985); O. V. Campbell & Sons
Industries, Inc.-- Reconsideration, B-218661.2, May 6, 1985, 85-1 C.P.
D. P 506. On reconsideration, we find that Sermor has not met this
burden and, therefore, affirm our prior decision dismissing its protest.
Sermor filed a similar protest against an Army procurement which was
the subject of our decision in Sermor, Inc., B-219173, July 17, 1985,
85-2 C.P.D. P 56. On August 7, 1985, Sermor filed a request for
reconsideration of B-219173. The basis for the request for
reconsideration of B-219173 is substantially the same as Sermor's
instant request for reconsideration.
In both requests for reconsideration Sermor objects to GAO's
dismissal of its protests on the basis of oral information provided by
the contracting agency. Section 21.3(f) of our Bid Protest Regulations
provides, in part, that:
". . . 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." 4 C.F.R. ! 21.3(f) (1985).
In such circumstances, contracting agencies are not required to file
an agency report and interested parties are not afforded an opportunity
to file written comments.
Also, in both requests for reconsideration, Sermor alleges the same
basis for fraud and bad faith by SBA. So far as the instant protest is
concerned, we find the issue untimely. We understand that SBA denied a
COC regarding the instant procurement on May 15, 1985. We assume that
Sermor received this determination not later than 1 calendar week after
issuance. See Unico, Inc., B-218065.2, Mar. 11, 1985, 85-1 C.P.D. P
297. Our Bid Protest Regulations require protests to be filed within 10
working days after the protester knew or should have known the basis for
the protest. 4 C.F.R. Sec. 21.2(a)(2) (1985). Since Sermor should have
known of SBA's rejection of its application for a COC by May 23, 1985,
and it was able to fully articulate its allegation of fraud or bad faith
on August 7, 1985, when it filed for reconsideration of B-219173, we
find the issue would have been untimely even if it had been raised in
Sermor's September 5, 1985, protest of this procurement. The issue
therefore is untimely and will not be considered on its merits. Memorex
Media Products Group, B-219810, Aug. 12, 1985, 85-2 C. P.D. P 161.
Finally, Sermor seeks to elaborate, on reconsideraton of its initial
September 5, 1985, contention that:.
"The PCOs are holding negative government action against Sermor
when the FAR's state that the contractor cannot be held liable/
responsible for acts of the government in their contractual
capacity."
Our Bid Protest Regulations require that a protest contain a detailed
statement of the legal and factual grounds for protest and copies of any
relevant documents. 4 C.F.R. ! 21.1(c)(4) (1985). In our view, the
above statement is an insufficient statement of a ground of protest.
Since we would not consider this allegation as initially presented,
United Telecontrol Electronics, Inc., B-219024, July 1, 1985, 85-2
C.P.D. P 8, we will not consider it on reconsideration. This deficiency
is not cured by Sermor's attempt to reserve the right to supplement its
initial filing by denoting it:
". . . a preliminary notice of . . . protest. Expanded protest
grounds will be forwarded by separate letter . . ."
We have held such piecemeal filing improper and not for our
consideration. Mid-Continent Adjustment Company, B-219397, Sept. 11,
1985, 85-2 C.P.D. P .
Accordingly, Sermor has failed to provide a basis upon which to
modify our dismissal of its protest and that determination therefore is
affirmed.
Harry R. Van Cleve
General Counsel
FILE: B-220037 85-2 CPD 572 DATE: November 20, 1985
MATTER OF: Alliance Properties, Inc.
DIGEST:
CONTRACTORS - RESPONSIBILITY - DETERMINATION - REVIEW BY GAO -
AFFIRMATIVE FINDING ACCEPTED
Allegation that low bidder is affiliated with a debarred
corporation constitutes a protest to an affirmative determination
of responsibility which our Office will not review in the absence
of a showing of fraud or bad faith on the part of contracting
officials or a failure to apply definitive criteria of
responsibility.
Alliance Properties, Inc. (Alliance), the apparent third low bidder
under invitation for bids (IFB) No. DTCG3485-B-0019 issued by the Coast
Guard, protests the award of a contract under that solicitation to DWS
Inc. (DWS), the low bidder, or Ralph Construction, the second low
bidder.
We dismiss the protest.
Alliance protests that DWS is ineligible for award because of its
affiliation with a debarred contractor, Jets Venture Capital Corporation
(Jets). As evidence of DWS's affiliation with Jets, Alliance points out
that a Dun and Bradstreet report indicates that DWS is 49 percent owned
by Jets.
The Coast Guard, prior to finding DWS responsible and as part of the
preaward survey conducted on DWS, determined that there was no
affiliation between DWS and Jets.
Alliance's dispute of the Coast Guard's finding constitutes a
challenge to an affirmative determination of responsibility which our
Office will not review in the absence of a showing of possible fraud or
bad faith on the part of contracting officials or that the solicitation
contains definitive responsibility criteria that allegedly have not been
applied. Moore Service, Inc., B-212054, Dec. 6, 1983, 83-2 C.P.D. P648;
Columbus Marble Works, Inc., B-193754, Aug. 21, 1979, 79-2 C.P. D. P
138; Dyneteria, Inc., B-186823, Oct. 18, 1976, 76-2 C.P.D. P 338.
Neither exception has been shown here.
Alliance also protests that the Coast Guard improperly accepted a
late bid from Ralph Construction, the second low bidder. However, since
we find no basis upon which to question an award to DWS, the low bidder,
we need not consider the protest against the second low bidder.
The protest is dismissed.
Robert M. Strong
Deputy Associate General Counsel
FILE: B-220036 85-2 CPD 689
DATE: December 19, 1985
MATTER OF: Harnischfeger Corporation
BIDS - RESPONSIVENESS - DESCRIPTIVE LITERATURE - INDICATION THAT ITEM
OFFERED FAILED TO MEET SPECIFICATIONS
1. Where an invitation for bids requires the submission of
descriptive literature to establish conformance with the material
specifications of the solicitation, a bid must be rejected as
nonresponsive if the literature submitted evidences nonconformity with
the specifications or is otherwise ambiguous.
BIDS - RESPONSIVENESS - DESCRIPTIVE LITERATURE - ADEQUACY
2. The inadequacy of submitted descriptive literature may not be
cured by explanations offered after bid opening under the fundamental
principle of sealed bidding that responsiveness must be determined on
the basis of the bid as submitted.
Harnischfeger Corporation protests the award of a contract to Grove
Manufacturing Company under invitation for bids (IFB) No.
DACW01-85-B-0106, issued by the Army Corps of Engineers. The
procurement was for the acquisition of two 20-ton self-propelled
hydraulic cranes. Harnischfeger asserts that the Corps improperly
rejected its apparent low bid as nonresponsive, and the firm also
contends that Grove Manufacturing's bid was nonresponsive. We deny the
protest in part and sustain it in part.
Section C of the IFB set forth certain mandatory specifications that
the offered equipment had to meet, and bidders were required to submit
descriptive literature with their bids to demonstrate compliance with
those specifications in accordance with the Federal Acquisition
Regulation, 48 C.F.R. Section 14.202-5 (1984). Bidders were cautioned
that the failure of their descriptive literature to show such compliance
would require rejection of their bids. Bids were opened on July 31,
1985, and the results were as follows:
(1) Harnischfeger Corp. . . . . . . $213,700.00
(2) American Equipment . . . . . . 220,471.20
(3) Grove Manufacturing . . . . . . 221,922.00
(4) Pettibone Corp. . . . . . . . . 225,630.00
(5) Gilchrist Machinery . . . . . . 258,956.00
(6) FMC Corp. . . . . . . . . . . . 275,800.00
Both Harnischfeger and American Equipment offered to furnish the P&
HOmega 120D 20-ton crane. However, the contracting officer, upon
examination of the submitted descriptive literature for that model,
determined that it did not meet a material specification of the IFB and,
accordingly, rejected both bids as nonresponsive.
At issue in this case, the IFB provided that the crane's hydraulic
system was required to have a full-flow return line replaceable
cartridge filter with bypass protection to filter all hydraulic fluid to
a 25 micron rating. The descriptive literature for the P&H Omega crane
stated that the model's hydraulic system filtered "all but 44 gpm
(gallons per minute) . . . to 7 microns on return to the reservoir." The
contracting officer determined from this statement in the descriptive
literature that the crane did not meet the full-flow filtering
requirement since it indicated that the remaining 44 gpm was not
filtered. Accordingly, the Corps awarded the contract to Grove
Manufacturing, the next lowest, responsive bidder.
Harnischfeger urges to the contrary that the statement in its
descriptive literature did not indicate that the P&H Omega 120D did not
meet the full-flow filtration requirement. Rather, Harnischfeger states
that the remaining 44 gpm in fact is filtered to 10 microns, which
exceeds the agency's minimum requirement for 25 micron filtration.
Harnishfeger points out that it informed the contracting officer of this
by letter after receiving notice of the agency's rejection of its bid.
Harnischfeger contends that it was unreasonable for the contracting
officer to conclude solely from the statement in the literature that the
firm would not comply with the full-flow filtration requirement.
It is well-settled that an agency properly rejects a bid as
nonresponsive where the bidder submits descriptive literature as
required that shows that the product it is offering does not conform to
the material specifications set forth in the IFB. A.O. Stilwell Co.,
Inc., B-216804, Apr. 30, 1985, 85-1 CPD Paragraph 486. This is because
of the fundamental principles of sealed bidding that responsiveness
concerns a bidder's unequivocal offer to provide supplies or services in
total conformity with the material terms and conditions of the
solicitation, and that responsiveness must be determined on the basis of
the bid as submitted. Continental Telephone of California, B-213255,
Apr. 17, 1984, 84-1 CPD Paragraph 428. Thus, even if the offered
product in fact possesses the required features, bid rejection is
required when the literature does not clearly show conformance with the
requirements. Id. We will not disturb the agency's determinations
concerning the adequacy of required descriptive literature absent a
clear showing of unreasonableness, abuse of discretion, or a violation
of procurement statutes and regulations. Washex Machinery Corp.,
B-214591.2, Sept. 25, 1984, 84-2 CPD Paragraph 352.
Here, we can raise no objection to the agency's determination that
the descriptive literature submitted by Harnischfeger failed to show
that its offered crane met the full-flow filtration requirement. The
statement in the literature explicitly referred to all but 44 gpm.
Although we recognize that the literature does not state that the
remaining 44 gpm of hydraulic fluid is not filtered, the literature
fails to demonstrate affirmatively that the remaining fluid is filtered,
or, if in fact filtered, that it is filtered to 25 microns as required
by the IFB.
Accordingly, since Harnischfeger's submitted literature evidenced
nonconformity with a material requirement of the IFB, or, at best,
created an ambiguity with regard to meeting that requirement, the
contracting officer was compelled to reject the bid as nonresponsive.
Emerson Electric Co., B-212659, Nov. 4, 1983, 83-2 CPD Paragraph 529.
Although the firm furnished a letter to the agency after bid opening
stating that the remaining fluid was actually filtered to 10 microns,
this is of no consequence because a nonresponsive bid may not be cured
by explanations offered after bid opening. E.I. du Pont de Nemours &
Co., Inc., B-208263, Dec. 27, 1982, 82-2 CPD Paragraph 578.
However, we find merit in Harnischfeger's assertion that Grove
Manufacturing's bid was nonresponsive due to a failure of the firm's
descriptive literature to demonstrate compliance with certain material
specifications. Harnischfeger contends that Grove Manufacturing's
literature failed to show that the firm's offered crane met the
full-flow filtration requirement, as well as the requirements for a
diesel engine with replaceable wet-type cylinder liners, an engine spark
arrestor muffler, and rim-type case steel wheels.
With regard to the full-flow filtration requirement, Grove
Manufacturing's literature for its offered crane provided that the
hydraulic filter was a "return line replaceable cartridge with bypass
protection and filter bypass indicator. 25 micron rating. Tank
mounted." We need not reach the issue of whether this language, as the
agency asserts, clearly indicates the filtration of all hydraulic fluid
because we find that Grove Manufacturing's literature was deficient in
other specification areas. Although the literature stated that the
engine was a General Motors Model GMA4-53N diesel, and provided various
specifications for that engine, it did not demonstrate that the engine
had wet-type replaceable cylinder liners. The literature did not
provide any reference to the type of wheels being provided, nor did it
state that the engine was equipped with a spark arrestor muffler. We
also independently note that Grove Manufacturing's literature provided
that the crane was equipped with 14.00 X 24" tires as standard equipment
(with larger sizes optional), whereas the solicitation required a
minimum tire size of 16.00 X 24". We find no other indication in its
bid that Grove Manufacturing was offering to provide the crane equipped
with the larger-size tires at the stated bid price. Cf. IFR, Inc.,
B-203391.4, Apr. 1, 1982, 82-1 CPD Paragraph 292 (bid clearly obligated
bidder to supply at a firm price modified version of commercial item
meeting all requirements including features listed as options in
bidder's catalog).
Because descriptive literature was required to be supplied here to
establish conformance with the specifications, we believe that the Corps
acted unreasonably in determining that Grove Manufacturing's literature
was adequate to demonstrate compliance with the specifications discussed
above. We note that none of these specifications are indicated to be
other than material. Thus, the Corps apparently did not review Grove
Manufacturing's submitted literature with an equal degree of scrutiny,
and the firm's bid should not have been accepted.
Accordingly, by separate letter of today, we are recommending to the
Secretary of the Army that the agency terminate Grove Manufacturing's
present contract for the convenience of the government and resolicit the
requirement.
The protest is denied in part and sustained in part.
Acting Comptroller General of the United States
FILE: B-220034 85-2 CPD 548 DATE: November 13, 1985
MATTER OF: Alliance Machine Company
DIGEST:
BIDS - RESPONSIVENESS - EXCEPTIONS TAKEN TO INVITATION TERMS
1. Bid must be rejected as nonresponsive when cover fietter
accompanying bid incfiudes standard commerciafi term disclaiming
fiiabifiity for consequential damages, since it deviates
materiafily from the sofiicitation.
BIDS - MISTAKES - CORRECTION - NONRESPONSIVE BIDS
2. A nonresponsive bid may not be corrected through
mistake-in-bid procedures.
BIDS - COMPETITIVE SYSTEM - PRESERVATION OF SYSTEM'S INTEGRITY -
PECUNIARY DISADVANTAGE TO GOVERNMENT
3. A nonresponsive bid may not be accepted even though it would
result in monetary savings to the government since acceptance
would be contrary to the maintenance of the integrity of the
competitive bidding system.
Alliance Machine Company (Alliance) protests the Department of the
Navy's rejection of its bid as nonresponsive under invitation for bids
(IFB) No. F62472-85-B-1450, the second step of a two-step sealed bid
procurement of overhead cranes for the Naval Submarine Base, Kings Bay,
Georgia. The Favy rejected Alliance's bid as nonresponsive because its
cover letter limited the remedies available to the government under
several IFB provisions. Alliance argues that it inadvertently included
its commercial terms in its cover letter, that the terms did not limit
the government's rights and that it should have been permitted to
correct the mistake in its bid.
We deny the protest.
Alliance included the following statement in a cover letter submitted
with its bid:
"Our quotation is contingent upon the following clarification/
exception:
In no event under any circumstances or conditions will The
Alliance Machine Company be responsible for any claims arising
from special, indirect or consequential damages from any losses
resulting from the failure of the equipment, or noncompliance with
any law, acts, codes, om ordinances, nor contingent liability due
to delays except as provided by the terms of Liquidated Damages,
Page 20, Item F4."
Alliance alleges that this language is normally used in bids to
commercial enterprises and was inadvertently included in its bid.
Alliance argues that its negation of special, indirect or consequential
damages does not limit the rights of the government because the
government could not legally assert such damages. According to
Alliance, even if the cover letter language were included in a contract,
the government would have all the rights it would have had absent the
language.
The Navy argues that the language was specif ically prepared for this
IFB, since it cites the Liquidated Damages clauie and the page of the
IFB involved. Regarding Alliance's contention that the government
retained the rights it would have had abient the cover letter language,
the Navy contendi that the language qualifies the IFB's Limitation of
Liability High Value Items clause and the Default clause.
Alliance responds that the Limitation of Liability High Value Items
clause is not incorporated in the solicitation. Further, Alliance argues
that the rights of the government, as provided for under the Default
clause, are fully intact iince the Liquidated Damages provision
specifies that the government may terminate the contract if the company
fails to deliver supplies within the specified time.
We find that Alliance's statement limiting its liability for claims
arising from consequential damages provides sufficient cause for the
Army to reject its bid as nonresponsive. It is a basic principle of
federal procurement law that, to be considered for award, a bid must
comply in all material respects with the IFB so that all bidders will
stand on an equal footing and that the integrity of the competitive
bidding system will be maintained. Fluke Trendar Corp., B-196071, Mar.
13, 1980, 80-1 C.P.D. P 196. Bids containing standard commercial terms
and conditions which deviate from material solicitation requirements
must be rejected as nonresponsive. Avantek, Inc., B-219622, Aug. 8,
1985, 85-2 C.P.D. P 150; Williamsburg Steel Products Co., B-185097,
Jan. 23, 1976, 76-1 C.P.D. P 40. Further, we have recognized that a bid
condition which qualifies a bidder's liability for special or
consequential damages materially affects the substance of the bid and
renders it nonresponsive. B-175097, May 12, 1972; B-146207, June 30,
1961. Although Alliance contends otherwise, we note that it is well
settled, that the government can recover consequential damages under a
claim for breach of the warranty clause contained in the contract. See
U.S. v. Franklin Steel Products, Inc., 482 F. 2d. 400 (9th Cir. 1973)
cert. denied, 415 U.S. 918 (1974). Since Alliance's bid is
nonresponsive at least in this respect, it is not necessary to decide
whether the bid is nonresponsive to other provisions.
Alliance's contention that a mistake contributed to the
nonresponsiveness of its bid affords no basis for relief because the
mistake-in-bid procedures are not available to cure a nonresponsive bid.
Avantek, Inc., B-219622, supra. A bid that is nonresponsive may not be
corrected after bid opening, since the nonresponsive bidder would
receive the competitive advantage of electing to accept or reject the
contract after bids were exposed by choosing whether to make its bid
responsive. Central States Bridge Co., Inc., B-219559, Aug. 9, 1985,
85-2 C.P.D. P 154.
Alliance states that rejecting its bid will cost the government
approximately 1.3 million dollars. Although rejection of Alliance's bid
may result in additional cost to the government on this procurement, in
order to maintain the integrity of the competitive bidding system, a
nonresponsive bid may not be accepted even though the government could
save money by accepting it. Central States Bridge Co., Inc., B-219559,
supra.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220033 85-2 CPD 636
DATE: December 6, 1985
MATTER OF: Aerojet Techsystems Company
BIDS - RESPONSIVENESS - PRICING RESPONSE - MINOR DEVIATIONS FROM IFB
REQUIREMENTS
1. Bid which offered prices for option quantities for Fiscal Year
(FY) 1987 conditioned on the exercise of quantities in the FY 1986
option year was responsive since the only reasonable interpretation of
the solicitation was that the agency intended to exercise FY 1986 option
quantities as a prerequisite to the exercise of FY 1987 option
quantities.
BIDS - INVITATION FOR BIDS - AMENDMENT - ACKNOWLEDGEMENT - BIDDER
BOUND BY AMENDED IFB
2. Where bidder crosses out line item under bid schedule with
notation indicating item was deleted because of a specific amendment,
but bidder acknowledges subsequent amendment reinstating item, only
reasonable interpretation of bid is that bidder is bound by the
subsequent amendment to supply item.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST
3. GAO will not consider protest by interested party where protest
was untimely submitted as part of comments on agency report concerning
protest of another bidder.
BIDS - INVITATION FOR BIDS - CANCELLATION - AFTER BID OPENING -
ADMINISTRATIVE DETERMINATION
4. Invitation for bids (IFB) for Navy mines may be canceled after
bid opening where agency learns that manufacturer of specific battery
power unit component required under IFB is having production
difficulties and that the battery may not perform properly.
Aeroject Techsystems Company (Aerojet) protests the rejection of its
bid as nonresponsive under solicitation No. N00024-84-B-6287, a
two-step, formally advertised procurement conducted by the Naval Sea
Systems Command (Navy) for the purchase of a quantity of MK 65
Quickstrike Mine (MK 65) components. /1/
Also, Gould Defense Systems, Inc., Ocean Systems Division (Gould), in
comments filed as an interested party to Aeroject's protest, challenges
the Navy's determination that its bid was nonresponsive and also
questions the propriety of the Navy's completion of the acquisition by
negotiation.
We sustain Aerojet's protest, and dismiss Gould's protest.
Under the first step of this solicitation, Aerojet, Gould and
Frequency Engineering Laboratories (FEL) were determined to have
submitted acceptable technical proposals and were requested to submit
bids under the invitation for bids (IFB). The IFB called for a firm
Fiscal Year (FY) 1985 quantity of 524 units. The IFB also called for
optional quantities for FY 1986 and FY 1987. The quantities were
solicited in "stepladder" quantities of 500, 600 and 745 for FY 1986 and
500, 600 and 700 for FY 1987. Under the IFB, the lowest priced bidder
was to be determined by adding the base year price and the price bid on
the highest stepladder quantity under each option year.
In response to the IFB, the bidders submitted a base-year price and a
separate price for each of the step-ladder quantities established for
the option years. Aerojet inserted additional pages to the schedule to
show the different option prices for the 500, 600 and 700 quantities in
FY 1987 depending on which stepladder quantities had been exercised in
FY 1986.
The Navy determined that Aerojet's bid was nonresponsive because
Aerojet conditioned its prices for FY 1987 option quantities on the
exercise of various option quantities in FY 1986, and that Aerojet
improperly omitted from its bid one item for delivery of certain
engineering data. FEL and Gould were determined nonresponsive because
of their failure to indicate whether they intended to use government
property.
The contracting officer canceled the IFB because he determined that
all of the bids received were nonresponsive. The contracting officer
also determined, pursuant to Federal Acquisition Regulation (FAR)
Section 15.103 (Federal Acquisition Circular (FAC) 84-5, April 1, 1985),
that it was proper to complete the acquisition by using negotiation
procedures without issuing a new solicitation.
Aerojet contends that, by the terms of the solicitation and
applicable FAR provisions, it properly could condition its FY 1987
option prices on the exercise of the FY 1986 option. Aerojet points out
that FAR Section 17.204(c) states that an option period should provide
adequate lead time to the contractor to ensure continuous production
which Aerojet alleges would not occur if there was no production during
the second year. Moreover, Aerojet contends that no purchase of units
during the second year, followed by an attempt to order units for year
3, would be inconsistent with the delivery schedule set out in the IFB.
We find Aerojet's argument persuasive. A bidder logically would
conclude from reading the IFB that both options would have to be
exercised sequentially. The schedule for the basic quantity provides
for delivery of quantities through June 1988. Under the FY 1987 option,
deliveries begin in the Fall of 1989. Thus, if the FY 1986 option was
not exercised, there would be a gap in deliveries of over 12 months. In
our view, it is unreasonable to conclude from the solicitation that the
Navy would exercise the FY 1987 option without first exercising the FY
1986 option. The Navy's position appears to be inconsistent with the
FAR statement that option periods should provide adequate lead time for
continuous production. Our view is confirmed by the Navy's subsequent
amendment to the solicitation which makes the exercise of the FY 1986
option a prerequisite to the exercise of the FY 1987 option.
The contracting officer also determined Aerojet nonresponsive because
Aerojet's bid allegedly failed to bind Aerojet to deliver data
concerning engineering services to be performed by the contractor.
Under the IFB, the price for the data was to be included in the price
for engineering services. The data delivery requirement was deleted by
amendment 0006 to the IFB. The Navy apparently inadvertently deleted
the item. The Navy issued amendment 0007 which stated, in pertinent
part, that "Contract Line Item . . . (for data) was deleted in error in
Amendment 0006 and is hereby reinstated."
Aerojet acknowledged Amendments 0006 and 0007. However, in the
schedule where the data delivery item appeared, the line item was
crossed out. Next to the item is a notation in the margin "A0006." The
Navy determined that the bid did not indicate clearly Aerojet's
recognition that the item had been reinstated and concluded that the bid
was also nonresponsive on this basis.
A bid must be given a reasonable interpretation and read in its
entirety. See James S. Jackson Co., Inc., B-211741, 83-2 C.P.D.
Paragraph 84. Here, Aerojet acknowledged amendment 0007 which
unequivocally reinstated the data requirement. Also, the crossing out
of the item was accompanied by a notation which in effect indicated it
was "crossed out," that is, deleted, because of amendment 0006. Under
these circumstances, we find Aerojet's bid showed Aerojet's intent to be
bound to supply the data requirement, and was responsive with regard to
this item.
Thus, we find that the Navy was incorrect in its determination that
Aerojet's bid was nonresponsive.
We note that Gould, in its filing of September 17, 1985, as an
interested party to Aerojet's protest, argues that the Navy also
improperly determined that Gould's bid was nonresponsive. Gould's bid
was determined to be nonresponsive for failure to submit required
information regarding the use and rental value of government production
and research property. However, the record shows that on August 22,
1985, Gould was advised of the rejection of its bid as nonresponsive,
and the basis for the rejection.
Our Bid Protest Procedures, 4 C.F.R. Section 21.2(a)(2) (1985),
provide that protests shall be filed not later than 10 days after the
basis of a protest is known or should have been known, whichever is
earlier. Since Gould did not protest the Navy's determination that its
bid was nonresponsive within the prescribed 10-day period, any comments
by Gould concerning its responsiveness are untimely.
Ordinarily, under these circumstances, we would recommend the Navy
consider an award to Aerojet. However, the Navy asserts that, even if
we find Aerojet's bid was responsive, it had an independent basis for
cancellation. The Navy advises that the manufacturer of the battery for
the mine which is a significant part of the procurement has advised the
Navy that it is having difficulties in the production of the battery.
As a result, on the resolictation, the Navy omitted the requirement for
pricing battery items. The Navy states that if award were required
under the original solicitation, it would be receiving supplies of
doubtful usefulness and require the contractor to subcontract with a
producer which concedes it is having battery production problems. The
Navy also states it is reviewing its needs to determine if another
battery can be used.
Thus, the agency advises that the original solicitation no longer
accurately reflects its needs since it would result in the purchase of
potentially defective batteries, the power unit of the mine. While
Aerojet contends that the problems with the required batteries are an
acceptable risk which a responsible contractor reasonably could
anticipate under the contract, and that Aerojet is willing to accept the
risk of the batteries nonperformance, we agree with the Navy that it has
the right to revise the solicitation to preclude the purchase of
nonfunctioning batteries and to permit the Navy to find alternate
acceptable batteries. Since award under the original solicitation would
provide no assurance of performance in accordance with the Navy's actual
needs, cancellation of the solicitation is proper on this basis.
PetroElec Construction Co., Inc., B-216932, Mar. 27, 1985, 85-1 C.P.D.
Paragraph 356.
We also note that the Navy has amended the solicitation to change the
evaluation criteria in certain respects. The amendments are designed to
protect the government from receiving skewed bids, which may result if
only one of the stepladder option quantities are evaluated as provided
under the IFB. See Telex Communication, Inc., B-211236, July 25, 1983,
83-2 C.P.D. Paragraph 122. In view of our conclusion above, we do not
consider whether this change itself constitutes adequate justification
for a resolicitation.
The contracting officer's decision to cancel the second step and
subsequently complete the acquisition by negotiation was based on the
contracting officer's finding that there were no responsive bids under
the IFB. As the protester points out, the FAR permits the contracting
officer to cancel an IFB and to complete the acquisition through
negotiation without issuance of a new solicitation where no responsive
bids are received. FAR Sections 14.404-1(c)(6) and 14.404-1(e) (FAC
84-5, April 1, 1985). Since we find that Aerojet's bid was responsive,
the contracting officer's justification for conducting a negotiated
acquisition is no longer applicable. Under the circumstances the Navy
should make a determination concerning the resolicitation consistent
with the provisions of FAR.
We sustain Aerojet's protest and dismiss Gould's protest.
Harry R. Van Cleve
General Counsel
(1) Aerojet contends that the evaluation criteria under the amended
solicitation is "arbitrary and irrational" in that it gives the unit
prices bid for the 1987 option three times the weight of the unit prices
bid for the basic quantity and the Fiscal Year (FY) 1986 option.
However, this allegation has been rendered academic by an amendment to
the solicitation issued after the protest. This amendment, which the
protester has not challenged, revised the evaluation factors to provide
that the price bid for the FY 1987 option year quantities "will not
inordinately outweigh" the price bid for the basic quantity and FY 1986
option buy.
FILE: B-220032 85-2 CPD 586 DATE: November 21, 1985
MATTER OF: H.L. Carpenter Company
DIGEST:
BIDS - INVITATION FOR BIDS - SPECIFICATIONS - MINIMUM NEEDS
REQUIREMENT - ADMINISTRATION DETERMINATION - REASONABLENESS
1. Contracting agency has the primary responsibility for
determining its minimum needs and drafting requirements that
reflect those needs. We will not question an agency's assessment
of its minimum needs where a protester fails to show that the
agency's determination is unreasonable.
BIDS - ESTIMATES OF GOVERNMENT - BASIS OF ESTIMATE
2. When solicitinq for a requirements contract, an agency must
base its estimated quantities on the best information available.
There is no requirement, however, that these estimates be perfect.
BIDS - INVITATION FOR BIDS - SPECIFICATIONS - ADEQUACY
3. Allegations of vague or ambiquous solicitation provisions
are rejected where requirements are stated clearly and those
allegations are based on an unreasonable interpretation of the
solicitation.
H.L. Carpenter Company (Carpenter) protests that solicitation No.
DAKF40-85-B-0092, issued by the Department of the Army for the operation
of furniture repair facilities at Fort Bragg, North Carolina, includes
ambiguous and misleading solicitation provisions. We deny the protest
in part and dismiss it in part.
The solicitation was issued August 12, 1985. Carpenter, the incumbent
contractor, filed its protest in our Office on September 3. A series of
five amendments to the solicitation was issued at various times between
the publication of the solicitation and September 24. Amendment 3,
issued on September 6, extended bid opening indefinitely.
While we address most of Carpenter's complaints below, we note
initially that Carpenter's protest appears to center on two underlying
issues. First, Carpenter seems to suggest that other bidders will bid
too high or too low as they are not privy to what Carpenter believes to
be accurate information concerning solicitation requirements. Second,
Carpenter claims that the Army, in administering the contract, will
require more or less performance from the contractor than stated in the
solicitation and the resultant contract.
We fail to see how Carpenter will be prejudiced if bidders bid too
high for the solicitation, however, as that increases Carpenter's
chances for contract award. In any event, with regard to this claim and
Carpenter's fear that bidders will bid too low, we believe, as discussed
below, the solicitation contains adequate information on which bidders
may base their bids. Further, contracting officials are presumed to act
in good faith, and we therefore will not anticipate that the Army will
violate contract provisions after award.
Among its numerous allegations, Carpenter complains that the
solicitation breaks the required work down into too many items, and that
delivery order provisions, Performance Work Statement (PWS) paint stock
requirements for more than one color, and contractor record-keeping
requirements in the solicitation are burdensome and confusing to
potential contractors and/or agency personnel. Additionally, Carpenter,
the incumbent contractor, complains that site visits provided for in the
solicitation will interfere with its operations. We find no legal merit
in Carpenter's complaints.
A contracting agency has the primary responsibility for determining
its minimum needs and drafting requirements that reflect those needs.
Analytics Inc., B-21509-2, Dec. 31, 1984, 85-1 C.P.D. P 3. Even
burdensome requirements are not objectionable provided they reflect the
government's minimum needs. Id. This Office will not question an
agency's assessment of its needs unless a protester shows that the
agency's determination is unreasonable. Gulf Coast Defense Contractors,
Inc., B-212641, Feb. 28, 1984, 84-1 C.P.D. P 243.
Upon review of the record, we find no legal basis to object to the
solicitation requirements. Carpenter has not proven that the detailed
work item list does not reflect the Army's needs. Further, the Army
states that the delivery order provisions are prescribed by the Federal
Acquisition Regulation (FAR), 48 C.F.R. Sec. 52.216-19 (1984), and,
while gray is the primary color to be used under the PWS, the Army needs
the contractor to maintain at least a limited stock of other colors as
well. Moreover, the Army states that site visits will not take place in
the contractor's immediate work area. Because Carpenter fails to
provide us with any evidence, aside from its disagreement with the
agency, that these provisions, or the report and record requirements
imposed on the contractor, are unreasonably burdensome, these protest
grounds are denied. See Stabbert and Associates, Inc., B-218427, June
17, 1985, 85-1 C.P.D. P 692.
Carpenter also protests that several solicitation and PWS clauses are
ambiguous and violate the FAR. The provision defining unbalanced bids,
Carpenter argues, fails to explain the methodology to be used in
determining a bid to be unbalanced. Carpenter asserts that PWS section
5.3.1, which states that the annual workload is variable with historical
seasonal trends, is an inadequate substitute for setting workload
requirements based specifically on the most current information
available; section 5.3.2 fails to provide parameters for maintenance
performed on orders from the contracting officer or his representative;
and section 5.3.3 improperly gives the contracting officer the right to
order the contractor to perform work "outside of the scope of this
contract." Additionally, Carpenter complains that the solicitation
clause Mobilization and Other Contingency Planning, which authorizes the
contracting officer to issue change orders if reserve forces are
mobilized or in another emergency, does not set forth sufficient
parameters for the performance that might be required.
Our Office will reject allegations concerning vague or ambiguous
solicitation provisions where those allegations are based on an
unreasonable interpretation of the solicitation and the requirements are
stated clearly. International Business Investments, Inc., B-215081, Feb.
25, 1985, 85-1 C.P.D. P 228.
We have read the solicitation provisions in question, and we find no
improper requirements or ambiquity. The solicitation's definition of an
unbalanced bid as one"based on prices significantly less than cost for
some items and... significantly ovetstated for other items" is
reasonably descriptive and, indeed, similar to our own. 1/ Further, the
Army informs us that the specific workload requirements stated in the
solicitation are based on Carpenter's past history, and we see nothing
wrong in the caution in PWS section 5.3. 1 that the workload has varied
with seasonal trends. In this respect, estimated quantities need
reflect only the reasonably accurate representations of the agency's
anticipated actual needs. D.D.S. Pac, B-216286, Apr. 12, 1985, 85-1 C.
P.D. P 418.
Further, we see no basis to object to PWS section 5.3.2, which simply
states that the contracting officer or his representative may direct the
contractor to maintain furniture scheduled to be issued to the
activities at Fort Bragg, and we see nothing illegal or prejudicial to
Carpenter in PWS section 5.3.3. That section, though using the language
"outside of the scope of this contract," simply intends that work
performed outside a certain geographic area (Annex A-5), to be ordered
only infrequently, will be compensated under a separate payment
schedule. Additionally, the mobilization and contingency clause (section
H 6) appears clear enough to inform bidders that supernormal efforts
will be required by them during events which, by definition, are
uncertain, uncommon and unplanned. In short, we view these provisions
as reasonable; Carpenter has failed to show the contrary and,
therefore, we deny these protest grounds.
Carpenter next complains that PWS section 5.3.4 and Abnex A-6 violate
FAR, 48 C.F.R. Sec. 16.506 (ordering by activities). Specifically,
Carpenter objects to the requirement in section 5.3.4 that the
contractor crossreference and complete three identification blocks on DA
Form 2407. Carpenter also argues that Annex A-6 does not include the
names of all activities authorized to order work under the contract. We
also deny these protest grounds.
Carpenter has not shown how these provisions have an impact on the
preparation of bid costs for the solicitation, or how they will
prejudice Carpenter. Further, with regard to Annex A-6, the Army states
that a list of activities will be provided on contract award; such a
List was not provided in the solicitation because names of activities
change frequently and, in any event, all activities at Fort Bragg are
included under the solicitation. Under these circumstances, Carpenter's
objections are without merit.
Carpenter also protests that one building set aside for refinishing
furniture has been prohibited from such use by base fire safety
personnel and, therefore, all bidders should be informed of a third
building to be provided. The Army states that another building has been
provided and that the correction of safety concerns will be completed by
January 1986. We fail to see, and Carpenter does not establish, what
impact a different building for furniture refinishing will have on the
preparation of bids here. There has been no change in inventory or
workload or any other aspect of cost as a result.
Carpenter next complains that the classification of employees in the
Department of Labor Wage Determination bears little resemblance to the
job descriptions in the solicitation and that the contracting officer
should not have relied on this allegedly misleading data in formulating
the solicitation.
The Army reports that the wage rates and job descriptions contained
in the solicitation were furnished by the Department of Labor. This
Office does not review wage rate determinations, which are established
by the Secretary of Labor pursuant to the Service Contract Act of 1965,
as amended, 41 U.S.C. Sec. 351, et sea. (1982); Crimson Enterprises,
Inc., B-214193, Feb. 10, 1984, 84-1 C.P.D. P 172. Rather, the
Department of Labor is the appropriate forum in which to complain about
a determination. Crimson Enterprises, Inc., B-214193, supra. Moreover,
we note that the wage determination states clearly that employees "not
listed herein shall be classified by the contractor so as to provide a
reasonable relationship between such classes and those listed herein."
Thus, this protest ground is dismissed.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
1/ See, e.g., Ted L. Riddy and Associates, Inc., B-209297; B-209297.2,
Apr. 22, 1983, 83-1 C.P.D. P 441 (mathematically unbalanced bid occurs
where the offer is based on nominal prices for some work and enhanced
prices for other work).
FILE: B-220031 85-2 CPD 693
DATE: December 20, 1985
MATTER OF: Internal Revenue Service -- Request for Reconsideration
GENERAL ACCOUNTING OFFICE - RECOMMENDATIONS - CONTRACTS - PRIOR
RECOMMENDATION - WITHDRAWN - CHANGED REQUIREMENTS
GAO withdraws its prior recommendation that the contracting agency
not renew the remaining 2 option years of the awarded contract and
instead resolicit for those years, since the agency states that because
of its anticipated future needs, it will not be exercising the final
option year of the contract. Further, the agency has established that a
competition for its needs for the 1 remaining option year would not be
in the government's best interest.
The Internal Revenue Service (IRS) requests that we withdraw our
recommendation for corrective action in Centennial Computer Products,
Inc. -- Reconsideration, B-212979.2, Aug. 22, 1985, 85-2 C.P.D.
Paragraph 208. For the reasons set forth below, we are withdrawing the
recommendation.
Initially, we note that the IRS also has requested reconsideration of
our holding in the above decision that the rejection of the proposal
Centennial Computer Products (Centennial) submitted in response to
request for proposals (RFP) No. IRS-83-053 could not be justified on the
grounds given by the agency. The IRS has presented us with several new
technical arguments in support of its position that Centennial's
proposal properly was rejected, and has asked for a conference to
develop and explain further the technical considerations involved in its
decision to reject the offer. In addition, Centennial has filed a claim
with our Office for reimbursement of the substantial costs allegedly
incurred in preparing its proposal. We will address the merits of the
IRS's reconsideration request and whether Centennial is entitled to
recover such costs in a forthcoming decision. We are issuing the
present decision at this time because circumstances establish that,
irrespective of the merits of the rejection of Centennial's proposal, it
no longer is practicable to implement our recommendation for corrective
action as discussed below. This approach permits the agency to proceed
with future procurement plans immediately, and allows the time and
opportunity for full treatment of all relevant technical issues before
we render a decision on the other matters.
The IRS issued the RFP for the lease of tape, disk, and cache/disk
subsystems to enhance the computer system at its Detroit Data Center.
The IRS eliminated Centennial from the competitive range because the
rate of access to "cache memory" during the second benchmarking of
Centennial's equipment exceeded the RFP's limitations.
In Centennial Computer Products, Inc., B-212979, Sept. 17, 1984, 84-2
C.P.D. Paragraph 295, we held that the IRS improperly had determined
from the results of a second benchmark of Centennial's equipment that
the company's rate of access to cache memory did not meet the RFP's
requirement. However, we did find that a comparison of the results of
the second benchmark with those of Centennial's first benchmark
supported the IRS's assertion that, in violation of the RFP, Centennial
"fine tuned" its equipment for the second benchmark by slowing down the
noncache operation of its system in order to meet an RFP requirement
that cache memory operation be more than 50 percent faster than noncache
operation. We further found support from a comparison of the results of
the two benchmarks for the IRS's position that Centennial failed to have
a required data save device on its cache controller to prevent data from
being lost in the event of a power failure.
We modified our decision in Centennial Computer Products, Inc. --
Reconsideration, B-212979.2, supra, to sustain Centennial's protest. We
held that the IRS's statements in response to Centennial's request for
reconsideration established that significant changes from the first
benchmark in fact were made in running the second benchmark. Therefore,
the test results from the second benchmark could not be compared to the
test results of the first benchmark to substantiate the IRS's
conclusions, especially since there were other logical and acceptable
explanations for Centennial's second benchmark results.
The contract awarded under the RFP, including the exercise of four
1-year options, does not extend beyond 60 months -- the anticipated life
of the computer system at the IRS's Detroit Data Center. While we noted
in the reconsideration decision that the first option year was nearly
over and that it was not feasible for the IRS to resolicit for the
upcoming option year, we recommended that the agency not renew the
contract for the remaining 2 option years and instead resolicit its
requirements for those years.
The IRS contends that in view of its future requirements, a
resolicitation would be unduly burdensome (evaluation of offers, new
benchmark, etc.) and costly. The agency states that the Detroit Data
Center computer system, of which the cache/disk subsystem is a party,
will be replaced at or near the beginning of the final option year.
Consequently, the agency would quite likely only be soliciting for a
1-year period, not for 2 years. The IRS further states that if a
contractor other than the current one did receive the award for the
1-year period, it would take at least 3 months to transfer the data to
the contractor's cache/disk subsystem, which the agency asserts would be
very disruptive to the operation of the Detroit Data Center. Finally,
the IRS argues that, given the natural advantages that the current
contractor would have, it would be difficult to find offerors who would
be able or willing to compete for a 1-year contract to develop
cache/disk requirements for a 4-year-old computer system.
We withdraw our recommendation that the IRS resolicit its cache/disk
requirements for the final 2 option years of the awarded contract, since
we have no reason to dispute the agency's position that resolicitation
would serve no useful purpose in light of the agency's anticipated
timeframe for replacing the entire computer system at the Detroit Data
Center and the probable lack of competition. In this regard, we note
that Centennial and the awardee were the only offerors who responded
originally. Moreover, in commenting on the IRS's request for withdrawal
of our recommendation for corrective action, Centennial implies that its
real interest at this point is in assuring that the IRS's procurement
plans for the future will involve full and open competition and will not
reflect an unwarranted predisposition towards the current contractor's
equipment. The IRS advises that any cache/ disk requirements for the
computer system that will replace the current one will be procured as
part of the complete replacement acquisition, and we have no reason to
believe that the IRS will not attempt to maximize competition to the
greatest degree practicable or otherwise will not act fairly towards
offerors other than the current contractor.
Accordingly, our recommendation for resolicitation of the IRS's
remaining 2 option year requirements under the awarded contract is
withdrawn.
Acting Comptroller General of the United States
FILE: B-220028 85-2 CPD 717
DATE: December 26, 1985
MATTER OF: Aquasis Service, Inc.
CONTRACTS - LABOR STIPULATIONS - SERVICE CONTRACT ACT OF 1965 -
MINIMUM WAGE, ETC. DETERMINATIONS - UNION AGREEMENT EFFECT
1. Contracting officer acted properly when he forwarded a copy of
the protester's collective bargaining agreement to the Department of
Labor, but did not change the Service Contract Act wage rate
determination in the solicitation because he reasonably determined that
the collective bargaining agreement would not affect the contract to be
awarded under the solicitation as the collective bargaining agreement
did not come into effect until after the proposed start date of the new
contract.
GENERAL ACCOUNTING OFFICE - JURISDICTION - LABOR STIPULATIONS -
SERVICE CONTRACT ACT OF 1965
2. GAO does not review the wage rate determinations issued by the
Department of Labor in connection with solicitations subject to the
Service Contract Act.
Aquasis Services, Inc., protests the proposed award of a contract to
Robertson-Penn, Inc., by the Department of the Army pursuant to
invitation for bids (IFB) No. DAHC30-86-B-0002 for operation of a dry
cleaning facility at Fort Myer, Virginia. Aquasis, the incumbent
contractor, complains that the agency failed to incorporate in the
solicitation a specific notice of a collective bargaining agreement
negotiated prior to bid opening or a wage rate reflecting that
agreement. According to the protester, this will result in its being
underbid since, as the incumbent contractor, only it will be obligated
to pay the wage rates and benefits in the agreement unless they are
incorporated into the solicitation.
The protest is denied in part and dismissed in part.
The protester argues that the solicitation included a Department of
Labor (DOL) wage rate determination, specifying the minimum wage and
fringe benefits to be paid, required under the Service Contract Act of
1965, 41 U.S.C. Sections 351-358 (1982), that was inconsistent with the
collective bargaining agreement negotiated prior to the September 5,
1985, bid opening. The protester argues that since it notified the
agency of the agreement on August 14, the agency should have withdrawn
the wage rate determination in the solicitation and requested from DOL a
new determination based on the collective bargaining agreement. Pending
receipt by the agency of the new determination, the protester contends
the agency should have amended the solicitation to include the notice
provided for in Defense Acquisition Regulation (DAR) Section 7-2003.85,
/1/ which, in essence, states that a new wage rate determination has
been requested and that if a wage rate is not incorporated into the
solicitation, the terms of the collective bargaining agreement between
the union and incumbent contractor would apply.
The agency states that it was unnecessary to request a new wage rate
determination from DOL or to amend the solicitation to incorporate the
DAR notice because the Service Contract Act requirement that a successor
contractor abide by the terms of a predecessor contractor's collective
bargaining agreement is not applicable here. The agency maintains that
since Aquasis' agreement was not effective until October 1, the planned
start date of the successor contract, the agreement never actually
applied to the employees under the predecessor contract and, thus, would
not bind any successor contractor other than Aquasis. It is the
agency's view that it complied with the applicable regulations when it
forwarded a copy of Aquasis' agreement to DOL and informed the protester
that the agreement did not affect the solicitation.
The Service Contract Act requires a successor contractor to pay
service employees employed on the contract the same wages and benefits
provided for in a collective bargaining agreement to which the employees
would have been entitled if they were employed under the predecessor
contract. 41 U.S.C. 353(c) (1982); SEACO, Inc., B-211226, Aug. 1,
1983, 83-2 CPD Paragraph 146. In order for the Service Contract Act to
apply, however, the collective bargaining agreement must be applicable
to work performed under the predecessor contract. 29 C.F.R. Section
4.163(f) (1985). DOL's regulations specifically state that the act is
not applicable "if the predecessor contractor entered into a collective
bargaining agreement for the first time, which did not become effective
until after the expiration of the predecessor contract." Id.
The record here shows that while the collective bargaining agreement
was negotiated during the term of the predecessor contract, it was not
to become effective until October 1, the proposed start date of the
successor contract. In these circumstances, where the solicitation had
already incorporated a current Service Contract Act wage determination,
we think the contracting officer acted properly by providing a copy of
the bargaining agreement to DOL and advising the protester that he had
done so and that he did not intend to amend the solicitation or request
a new wage rate determination. See DAR Section 12-1005.2.
The protester's disagreement with the contracting officer's action
here is, in essence, that the wage determination in the solicitation
should be changed to conform with its bargaining agreement. This Office
does not review wage rate determinations under the Service Contract Act.
Any challenge to the wage determination contained in the solicitation
must be processed through the administrative procedures established by
the DOL and set forth at 29 C.F.R. Section 4.55. See Geronimo Service
Co., B-210008.2, Feb. 7, 1983, 83-1 CPD Paragraph 131.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
(1) Since the Federal Acquisition Regulation (FAR) and Department of
Defense FAR Supplement coverage pertaining to the Service Contract Act
have not yet been issued, the provisions of Defense Acquisition
Regulation, section XII, part 10, are to be followed.
FILE: B-220026 85-2 CPD 358
DATE: September 30, 1985
MATTER OF: AAR Brooks & Perkins
DIGEST:
CONTRACTS - PROTESTS - INTERESTED PARTY REQUIREMENT - SMALL BUSINESS
SET-ASIDE
1. Where a large business protester is ineligible for award under a
total small business set-aside, GAO will not consider its objection to
not being furnished a copy of the solicitation since the protester is
not an interested party whose direct economic interest would be affected
by a resolution of this issue.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
2. Protest against the set-aside of the solicitation for small
business, which was publicized through a Commerce Business Daily notice,
is untimely since the protest was filed more than 1 month after the
closing date set forth in the notice.
AAR Brooks & Perkins (AAR) protests the Air Force's failure to
furnish the Company with solicitation No. FD2050-85-82237, issued by
McClellan Air Force Base, Sacramento, California, for a quantity of
litter support brackets for the C130 aircraft. We dismiss the protest.
The requirement initially was synopsized in the June 10, 1985,
edition of the Commerce Business Daily (CBD), listing several qualified
manufacturers of the aircraft part, including the protester, and
specifying a closing date of July 26. According to AAR, the company
made two telephonic requests for the solicitation and was informed on
both occasions by Air Force contracting personnel that the firm would be
sent the solicitation. AAR alleges that after it received no response
to these requests, it again contacted the Air Force contracting
personnel on August 21 and was told that award was ready to be made
under the solicitation. On August 22, AAR also was told that the
solicitation had been changed to a total small business set-aside and
that an amended notice to that effect had been published in the CBD.
On August 30, AAR filed a protest with our Office. AAR contends
that, as one of the sources listed in the CBD notice, it automatically
should have received the solicitation and that the Air Force's failure
to furnish the solicitation, despite repeated requests from AAR,
unfairly deprived the company of an opportunity to compete for the
award. With regard to the solicitation later being changed to a small
business set-aside, AAR contends that the Air Force failed to announce
this properly because AAR reviewed the editions of the CBD subsequent to
June 10 and found no notice of the change.
We find that AAR is not an interested party to protest the Air
Force's failure to furnish it a copy of the solicitation. To be
considered an interested party so as to have standing to protest, a
party must be an actual or prospective bidder whose direct economic
interest would be affected by the award of a contract or the failure to
award a contract. Electronic Systems U.S.A., Inc., B-219754, Sept. 5,
1985, 85-2 C.P.D. Paragraph. . . . The Air Force informally has advised
us that AAR is a large business. AAR therefore was ineligible for award
under the solicitation since it was restricted to small businesses and,
consequently, is not an interested party. Tri-States Service Company,
B-211862, Sept. 26, 1983, 83-2 C.P.D. Paragraph 374; Gibraltar
Industries, B-212023, June 24, 1983, 83-2 C.P.D. Paragraph 17. As for
AAR's charge that the Air Force did not announce the small business
set-aside, a superseding synopsis of the requirement appeared in the
June 17 edition of the CBD which stated that the proposed procurement
would be a total small business set-aside, the size standard for which
was no more than 1,000 employees.
AAR also makes a general assertion that the Air Force failed to
provide for full and open competition. To the extent that AAR is
challenging the propriety of the small business set-aside by this
assertion, the company's protest is untimely filed and will not be
considered on the merits. Regardless of whether AAR actually knew of
the June 17 CBD notice, when a procuring agency publishes a synopsis of
a procurement in the CBD, protesters are charged with constructive
notice of the solicitation and its contents. Aurora Spectrum
International, B-214162, Feb. 13, 1984, 84-1 C.P.D. Paragraph 185.
Where, as here, the synopsis contains the solicitation closing date, any
protest against alleged improprieties in the solicitation must be filed
prior to that date. See Detroit Broach and Machine -- Reconsideration,
B-213643.2, July 12, 1984, 84-2 C.P.D. Paragraph 43. We further note
that the synopsis of June 17 specified the same July 26 closing date as
the original notice of which AAR was aware.
The protest is dismissed.
/s/ Robert M. Strong
Deputy Associate General Counsel
FILE: B-220025 85-2 CPD 626
DATE: December 4, 1985
MATTER OF: WSI Corporation
CONTRACTS - NEGOTIATION - SOLE-SOURCE BASIS - ADMINISTRATIVE
DETERMINATION - REASONABLE BASIS
1. Contracting agency substantially complied with procedures in the
Competition in Contracting Act of 1984 for the award of a sole source
contract when agency published the required notices and prepared an
adequate justification which was approved by the appropriate agency
official.
CONTRACTS - NEGOTIATION - SOLE-SOURCE BASIS - ADMINISTRATIVE
DETERMINATION - REASONABLE BASIS
2. Sole source procurement was justified where the contracting
agency reasonably determined that only one source could satisfy the
agency's needs by the required time.
WSI Corporation protests the Air Force's decision not to issue
request for proposals (RFP) No. F49642-85-R-0275 for optimized computer
flight planning services for the Military Air Command, and instead
obtain the services through exercise of an option under an existing
contract with Lockheed DataPlan, Inc. We deny the protest.
On September 29, 1979, the Air Force entered into a contract with
Lockheed calling the conversion and integration of Lockheed's Jetplan
software system with the Air Force's computer system to produce
optimized computer flight plans. The conversion phase, followed by
prototype testing of the software, was scheduled to be completed by the
end of fiscal year 1980. The contract also contained options for
leasing and operation of the integrated software system, renewable
annually through fiscal year 1985, a total of 5 years after the initial
conversion and testing were scheduled to be completed. The contract
also provided that its total duration was not to exceed 6 years.
Due to a delay of approximately 2 years in the schedule for
completing the initial phase of the contract, the first option for
operation of the system, originally to begin in fiscal year 1981, was
not exercised until fiscal year 1983. In addition, the Air Force and
Lockheed agreed to modify the contract to change the option period from
October 1980 through September 1985, to October 1982 through September
1987. The Air Force subsequently exercised the options for operation in
fiscal years 1984 and 1985.
In preparation for continuing operations in fiscal year 1986, the Air
Force at first decided not to exercise the option under its existing
contract with Lockheed. Instead, in February 1985, the Air Force had
published a notice in the Commerce Business Daily (CBD) announcing its
plan to enter into a new sole source contract with Lockheed for
operation in fiscal year 1986, with options for two additional years.
In response to the notice, the protester advised the Air Force that it
also could provide the required flight planning services. As a result,
in March 1985 the Air Force had published in the CBD another notice,
this time indicating that a competitive solicitation would be issued and
requesting interested offerors to submit requests for the solicitation.
The Air Force subsequently determined that it would not be possible
for offerors other than Lockheed to complete the necessary software
conversion in time to be operational by October 1, 1985, when services
under the existing option contract with Lockheed would end. The Air
Force then published a CBD notice in late July 1985, announcing that it
had decided to exercise the option for services in fiscal year 1986
under the existing contract with Lockheed.
The record does not indicate why the Air Force changed its original
plan to negotiate a sole source contract with Lockheed in favor of
exercising the option. In any event, the effect of exercising the
option in this case was equivalent to issuance of a sole source contract
to Lockheed. In view of our finding, discussed in detail below, that
the agreement with Lockheed was properly justified as a sole source
award, we need not address whether the agreement also satisfied the
requirements in Federal Acquisition Regulation (FAR), 48 C.F.R. Section
17.207, for exercise of an option. See Varian Associates, Inc.,
B-208281, Feb. 16, 1983, 83-1 CPD Paragraph 160.
In connection with the initial decision to negotiate a sole source
contract with Lockheed for fiscal year 1986, the contracting officials
in early January 1985 prepared a justification substantially as required
by 10 U.S.C.A. Section 2304(f) (West Supp. 1985), as amended by the
Competition in Contracting Act of 1984 (CICA), Pub. L. No. 98-369, 98
Stat. 1175, 1187, and FAR, 48 C.F.R. Sections 6.303, 6.304, for the use
of other than competitive procedures when the property or services
needed are available from only one source and no other type of property
or services will satisfy the agency's needs. 10 U.S.C.A. Section
2304(c)(1). Although the CICA amendments regarding the use of other
than competitive procedures were not effective until April 1, 1985, the
Air Force considered CICA's requirements apparently in anticipation of
entering into a contract with Lockheed in September 1985.
The justification contains the principal elements required by 10 U.
S.C.A. Section 2304(f)(3), primarily a description of the contracting
agency's need for continuous operation of the flight planning services
in fiscal year 1986 and a detailed statement, discussed further below,
explaining why only Lockheed could provide the necessary software and
services in the required time. With regard to the Air Force's plans for
subsequent procurements, the justification states that the services will
be procured from an outside contractor only until fiscal year 1988, when
the Air Force plans to have its own flight planning software system in
place. The justification was approved by a number of Air Force
officials, from the contracting officer through the head of the
contracting activity, as required by 10 U.S.C.A. Section 2304(f)(1)(B).
The Air Force also complied with the requirements in 10 U.S.C.A.
Section 2304(f)(1)(C) and 41 U.S.C.A. Section 416 for publication of
notice of proposed procurement actions. As noted above, the Air Force
first published a CBD notice of its intent to award a sole source
contract on February 4. When the protester then expressed interest in
the procurement, the Air Force published a second notice on March 26,
indicating that a competitive solicitation would be conducted. The
third CBD notice, published on July 22, indicated that the option with
Lockheed would be exercised.
While notice of the agency's intent to issue a sole source contract
generally is to precede preparation of the justification under 10 U.S.
C.A. Section 2304(f)(1)(C), we do not believe that the issuance of the
notice in this case after the justification had been prepared affected
the validity of the justification. Specifically, there is no indication
that the Air Force's needs had changed or that other sources lacking the
necessary software in January when the justification was prepared could
or did develop it in the intervening few months. Moreover, the purpose
of the notice requirement -- to advise potential offerors of the
opportunity to compete -- was served in this case since the protester
was notified of the Air Force's plans. The Air Force subsequently
considered the protester's proposal, as required by 10 U. S.C.A.
Section 2304(f)(1)(C), and then issued the notice of competitive
solicitation in March. In addition, the Air Force complied with the
requirement in 41 U.S.C.A. Section 416, as added by CICA, that award not
be made until at least 45 days after the solicitation notice is issued,
since the option with Lockheed was not exercised until September 29,
more than 45 days after the final CBD notice was published on July 22.
Thus, in our view, the Air Force substantially complied with the
procedures prescribed by CICA before award of a sole source contract.
With regard to the substance of the Air Force justification, the
primary reason for procuring the services from Lockheed was that that
firm was the only source capable of providing the services within the
required time. As the Air Force explains, no firm except Lockheed
currently has software compatible with the Air Force's hardware, and a
substantial, time-consuming conversion effort would be required before
any other firm's software would be ready for operational use.
Specifically, the justification concludes that a competitive procurement
of the operation services would require an additional 4 to 7 years for
development of a statement of work by the Air Force, negotiation of the
contract, and the software modification, development and testing
necessary before an offeror other than Lockheed could begin operations.
/1/ In the interim, the Air Force would have to revert to using its
prior outdated software, with projected losses of $13 million annually
in fuel cost savings. In addition, the Air Force found that its ability
to meet its wartime requirements would be adversely affected, since
without the flight plans, its aircraft would be operating under less
than optimal cargo to fuel load ratios.
We will closely scrutinize sole source procurements under 10 U.S.C.
A. Section 2304(c)(1). Where, however, the agency has substantially
complied with the procedural requirements of 10 U.S.C.A. Section 2304(
f), we will not object to the sole source award unless it is shown that
there is no reasonable basis for the contracting agency's stated grounds
for using that exception to the requirement in 10 U.S.C.A. Section
2304(a)(1)(A) that the agency obtain full and open competition through
use of competitive procedures. In our view, the agency properly
justified the award to Lockheed on the basis that the services were
available from only one responsible source and no other type of services
will satisfy it needs. First, it was reasonable for the Air Force to
conclude that it required continuous services as of October 1, 1985, in
view of the significant cost savings and enhanced performance realized
through use of optimized flight plans. In addition, while the protester
challenges the agency's ultimate determination that timely conversion of
any other offeror's software was not possible, the protester has
presented no evidence to support its claim that its software could be
converted in time to provide continuous service. In fact, the protester
recognizes that some lead time would be necessary for developing a
competitive solicitation and for offerors to complete the preparatory
work necessary before operation could begin, and for this reason does
not contend that Lockheed's current contract for 1986 should be
terminated.
The protester argues, however, that the Air Force would not allow it
to demonstrate its software and therefore had no basis on which to
conclude that the software conversion could not be done in a reasonable
time. According to the Air Force, however, at a meeting with Air Force
officials on March 15, the protester conceded that its software was
capable of performing only three of the 12 elements of the flight
planning services required. In addition, the Air Force officials
concluded that in terms of its compatibility with the Air Force
hardware, the protester's software would require a significant
conversion effort. Since the protester has offered no evidence other
than its bare representations to rebut this technical determination, we
see no basis on which to question the Air Force's findings.
Accordingly, we find that it was reasonable for the Air Force to enter
into a sole source contract with Lockheed on the basis that only
Lockheed could provide the necessary services in the required time. See
Rolm Corp., B-213865, July 9, 1984, 84-2 CPD Paragraph 23.
Finally, the protester argues that, rather than continuing to make
sole source awards to Lockheed, the Air Force should develop a
competitive solicitation in fiscal year 1986 and then conduct a
competitive procurement in subsequent years, an approach which we have
approved in appropriate cases. See University Research Corp., 64 Comp.
Gen. 273 (1985), 85-1 CPD Paragraph 210. We do not find it appropriate
to require such an effort in this case. The Air Force states that it is
developing its own software system to be operational by late fiscal year
1988, so that operation services will be procured from an outside
contractor for only 2 more years after the 1986 agreement with Lockheed
expires. Based on the Air Force's estimate of 4 to 7 years of
preparatory work, which the protester has not rebutted, it would not be
feasible to conduct a competitive procurement and perform the necessary
software conversion in time for another offeror to provide operation
services in fiscal years 1987 and 1988.
The protest is denied.
Harry R. Van Cleve
General Counsel
(1) While the justification did not specifically state that no other
type of services could meet the agency's needs as required by 10 U.S.C.
A. Section 2304(c)(1), it is clear from the justification that the basis
of the agency's decision to contract with Lockheed is that any other
contractor would have to develop its own software, i.e., provide another
type of service, and that could not be accomplished within a reasonable
time.
FILE: B-220017.2 86-1 CPD 162
DATE: February 14, 1986
MATTER OF: C-R Control Systems, Inc.
BIDS - RESPONSIVENESS - SOLICITATION REQUIREMENTS SATISFIED - OFFERED
PRODUCTS ONQUALIFIED PRODUCTS LIST
1. Where an invitation requires that offered products be on a
qualified products list, a bid of an item on the list is responsive
notwithstanding competitor's complaint that the product does not comply
with the specification and, thus, should not be on the list, since bid
did not take exception to the specification.
BIDS - INVITATION FOR BIDS - SPECIFICATIONS - QUALIFIED PRODUCTS -
LISTING - REMOVAL FROM LIST
2. Whether a product should have been removed from a qualified
products list before bid opening is a matter for the determination of
the qualifying agency, and the General Accounting Office will not
question the agency's judgment unless it is shown not to have a
reasonable basis.
BIDS - INVITATION FOR BIDS - SPECIFICATIONS - QUALIFIED PRODUCTS -
LISTING - REMOVAL FROM LIST
3. Protest after bid opening that product should be removed from a
qualified products list is not a basis for questioning responsiveness of
the bid.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTOR
4. Additional ground of protest concerning agency's minimum needs is
untimely where it is initially raised in comments to the agency report
more than 10 working days after the protester knew or should have known
of the basis for the protest.
C-R Control Systems, Inc. protests the award to Automated Power
Systems, Inc. of a contract for 1,980 12-volt solid-state flashers used
in aids-to-navigation lamps under invitation for bids (IFB) No.
DTCG36-85-B-00069, issued by the United States Coast Guard. The
procurement was limited to qualified products list (QPL) sources. C-R
Control and Automated Power were the only manufacturers with flashers on
the QPL at the time of bid opening. C-R Control contends that the
Automated Power flashers do not comply with the specifications required
for a qualified product, so that both the placement of Automated Power's
unit on the QPL and the award were improper. Alternately, C-R Control
argues that the specifications are ambiguous.
We deny the protest in part and dismiss it in part.
Background
A solid-state flasher is an electrical device that periodically
interrupts the power to an electric light beacon, thus causing the
beacon to flash. Those purchased here are to be used to flash lamps in
beacon assemblies on buoys or fixed structures in or around navigable
waters. A beacon assembly consists of a lantern with lens, a 12-volt
lampchanger containing one lamp in burning position and at least one
spare lamp able to move into burning position when so controlled, and a
flasher.
The IFB, issued on July 29, 1985, required the offered products to be
manufactured in accordance with Coast Guard Purchase Description No.
181D, dated December 1983 and changes 1 and 2, and to have been
previously tested and approved for inclusion on the QPL established in
conformance with that specification. The QPL, dated August 8, 1985,
included both Automated Power and C-R Control flashers. Award was made
to Automated Power on September 30, 1985, and this protest followed.
The specifications required the flasher to contain circuitry capable
of sensing a filament failure in the lamp and then activating the
lampchanger to place a new lamp in the burning position. At the time of
bid opening for the flasher procurement, the only qualified lampchanger
was manufactured by C-R Control.
Automated Power previously sold flashers to the Coast Guard pursuant
to a contract awarded in July 1983. As a result of the failure of two
of its flashers, Automated Power prepared a failure analysis report for
the Coast Guard, dated February 4, 1985. Automated Power concluded that
high voltage spikes generated by the lampchanger when rotating a new
lamp into position damage a transistor in the flasher, and cause the
flasher to fail after an average of 50 lamp changes. In March, the
Coast Guard Commandant issued a telex message to the field describing
the problem and prescribing a modification to the lampchanger. To
eliminate the damaging voltage spike, the message prescribed the
installation of a surge suppression diode between two terminals of the
lampchanger at the next scheduled visit to the beacon assembly or prior
to installation in the field. The message added that the specification
for the flasher would be modified to incorporate protection of the
flasher circuitry from high voltage spikes generated by the lampchanger.
To obtain flashers that would be required in the interim, the Coast
Guard initiated this procurement before modifying its specification for
flashers and establishing a new QPL. Consequently, purchase of
Automated Power's flashers require the Coast Guard to attach protecting
diodes to the lampchangers that do not already have them. A new
specification was issued in August 1985, specifically requiring that
flashers be designed so that they will no be damaged by voltage spikes
from the lampchangers.
C-R Control Protest
C-R Control contends that the Automated Power flasher does not comply
with several requirements of the specifications. C-R Control maintains
that the Automated Power flasher does not have a required surge
suppression capability so that the flasher fails to operate properly
after several lampchanger cycles. According to the protester, this is
contrary to the purchase description requirement that flashers be
designed to "emphasize long, trouble-free life" and "the maximum in
reliability." Additionally, the protester states that, with the diode
modification to the lampchanger, the flasher-lampchanger system does not
have the required protection against reverse-polarity and short
circuits. Further, the protester contends that the Automated Power
flasher terminal slots necessary for electrical connections are not of a
uniform width throughout their length as required by the specification,
and that the transistor damaged by voltage spikes is rated much lower
than required by good engineering design.
According to C-R Control, the Coast Guard should either have rejected
Automated Power's bid as nonresponsive to the IFB, or waived for all
bidders the requirements of the specification that are not met by
Automated Power. C-R Control states that it could have provided a lower
bid for flashers if it omitted surge suppression, self-protection
features and terminal slots of a uniform width. In response to the
agency report, which argues that the specification does not require
surge suppression as claimed by C-R Control, the protester contends that
the specification is at least ambiguous regarding this feature and
should be amended. In addition, C-R Control asserts that, if the Coast
Guard's reading of the specification is correct, then the specified
flashers do not meet the minimum needs of the government because they
require the agency to install protecting diodes. Finally, the protester
argues that the cost of installing the protecting diodes should be added
to Automated Power's bid so that bidders are treated equally.
Coast Guard Response
The Coast Guard believes that C-R Control errs in an overly
restrictive interpretation of the specifications. The agency maintains
that the specifications do not require that flashers have surge
suppression, or specify a number of lamp changes that must be
accomplished before flasher failure. The prescribed test for compliance
with the specification only requires one lamp change. According to the
agency, any shortcomings in performance of the awardee's flasher are
attributable to the inductance of the motor on the lampchangers, which
is larger than that required by the lampchanger specification and, after
a significant number of lamp changes, may damage the flasher.
The Coast Guard explains that its decision to install a diode on the
lampchanger to protect the flasher from damaging voltage spikes does not
establish that the flasher was improperly designed. The agency also
states that Automated Power's flasher has reverse-polarity and short
circuit protection. The agency does not disagree that installation of
the diode on the lampchanger prevents the flasher's reverse-polarity and
short circuit protection from also protecting other parts of the system.
However, this was not a requirement of the flasher specification, and
the agency believes that any risk in this area is minimal.
The Coast Guard also questions C-R Control's interpretation of the
specifications for flasher terminal slots. According to the agency, the
specification does not describe the shape of the slots, only their order
and general location. They need only be a certain size at one end, not
at both ends as alleged by C-R Control. The Coast Guard states that the
uniform width of C-R Control's terminal slots are "nice to have," but
not necessary.
Finally, the agency maintains that the addition of a diode, costing
approximately $2.00, is far less than the $13.00 and $19.00 differences
(depending on the type of flasher rhythm) between the Automated Power's
and C-R Control's bid prices.
Analysis
We first point out that Automated Power's bid was clearly responsive
to the IFB. The solicitation required that offered items be on the QPL,
and Automated Power's flasher was on the QPL at the time bids were
opened. The firm's bid then offered, without exception, to furnish
products in compliance with the applicable specification. See McIntyre
Engineering Co., Inc., B-190136, Mar. 7, 1978, 78-1 CPD Paragraph 177.
Where questions are raised before bid opening regarding whether a
product is properly included on a QPL, the activity that prepared the
QPL has the responsibility for determining it the product conforms with
the specification and whether or should be retained on the list.
Federal Acquisition Regulation, 48 C.F.R. Section 9.203 (1984). We will
not question the agency's judgment in this respect in the absence of a
showing that the judgment did not have a reasonable basis. D Square
Engineering Co., B-213581 et al., May 9, 1984, 84-1 CPD Paragraph 515;
McIntyre Engineering Co., Inc., B-190136, Aug. 29, 1978, 78-2 CPD
Paragraph 148. Here, before issuing the solicitation, the Coast Guard
considered the failures of the Automated Power flasher, and determined
that it complied with the specification and should be placed on the QPL
until the specification is amended and a new list established. C-R
Control has not shown that this determination was unreasonable.
The flasher specification does not expressly require incorporation of
a surge suppression capability or other method for protecting the
flasher from damage from voltage spikes induced by the lampchanger.
Moreover, C-R Control has not established that when the specification
was drafted the likelihood of such voltage spikes eventually disabling
the flasher was so clear that a requirement for protection from such
spikes should be inferred from general specification requirements for a
"long, trouble-free life." Thus, we do not believe the specifications
require surge suppression or are ambiguous in this respect. The Coast
Guard also considered the fact that the installation of a diode on the
lampchanger prevents the reverse-polarity or short circuit protection of
Automated Power's flasher from extending to the other elements of the
beacon assembly. We agree with the agency that this is not a deficiency
in the flasher, since the flasher itself contains the self-protective
features required by the specification. Consequently, we deny this
portion of the protest.
In its response to the agency report, the protester asserted that
there is a problem with the type of transistor selected for use in the
Automated Power flasher. C-R Control submitted the transistor
manufacturer's literature to establish that the transistor is not
designed to operate with the electrical load condition permitted in the
lampchanger to which it is connected. In effect, the protester argues
that a requirement for good engineering practice inherent in the
specification requires use of a higher-rated transister. This claim and
the claim that the terminal slots of the flasher are not uniform in
width first arose in this protest, after bid opening. Thus, they do not
provide grounds to question the Coast Guard's earlier determination to
place the Automated Power flasher on the QPL notwithstanding previous
failures, or to question the responsiveness of Automated Power's bid in
this procurement. See McIntyre Engineering Co., Inc., B-190136, supra,
78-1 CPD Paragraph 177.
C-R Control argues that the flasher specification cannot reflect the
agency's minimum needs unless it requires a surge suppression
capability. We consider this argument to be untimely. Protest
contentions 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 a new ground of protest more than 10
working days after the basis for the new argument should have been
known, the new ground is untimely. See Radionic Hi-Tech, Inc.,
B-219116, Aug. 26, 1985, 85-2 C.P.D. Paragraph 230.
The protester's minimum needs contention is based upon the same
failures of the Automated Power flashers that gave rise to the remainder
of its protest. The issue was not raised until December 2, almost two
months after the initial protest was filed. While we dismiss this
additional basis for protest, we note that agencies are required to
develop specifications to permit full and free competition, 41 U.S.C.A.
Section 253(a) (West Supp. 1985). Consequently, we find no merit in
arguments that specifications should be more restrictive in order to
meet a protester's definition of an agency's minimum needs. See DSP
Technology, Inc., B-220593, Jan. 28, 1986, 86-1 CPD . . . ; Joseph
Pollak Corp., B-209899, Dec. 23, 1982, 82-2 CPD Paragraph 573.
Finally, the protester argues that in the bid comparison the Coast
Guard should have increased Automated Power's bid to include the
agency's costs of installing protective diodes on lampchangers. The
protester is in essence asking that the Coast Guard pay the protester
for a capability of its flasher that was not required by the
specification. Automated Power's bid was responsive; there is no basis
for penalizing the firm for not offering an additional feature.
We deny the protest in part and dismiss it in part.
Harry R. Van Cleve
General Counsel
FILE: B-220015 85-2 CPD 505 DATE: November 1, 1985
MATTER OF: Rexroth Corporation
DIGEST:
CONTRACTS - NEGOTIATION - AWARDS - INITIAL PROPOSAL BASIS - PROPRIETY
1. An award based on initial proposals, without holding
discussions, is proper where the solicitation advised offerors of
the possibility and there was adequate competition to demonstrate
that award would result in a fair and reasonable price.
CONTRACTS - NEGOTIATION - LATE PROPOSALS AND QUOTATIONS -
MODIFICATION OF PROPOSALS - PRICE REDUCTION
2. Contracting agency's decision not to open negotiations after
receiving a late price reduction from one offeror--and to proceed
with an award based on initial proposals-- is reasonable where the
expenses of conducting preaward surveys on the intended awardee
and its subcontractor already have been incurred and thus will
diminish the potential dost saving, and the firm offering the late
reduction did so 2 months after the initial closing date, only, it
appears, after determining from the preaward survey activity the
identity of the intended awardee, so that the firm thus would
enjoy a competitive advantage not contemplated by the normal
procurement process if negotiations were held.
Rexroth Corporation protests the award of a contract to York
Industries, Inc. under request for proposals (RFP) No. N00140-84-R-1309
issued by the Department of the Navy for arresting gear engine
components to be used on Navy ships. Rexroth alleges that the Navy
abused its discretion when it made the award on the basis of initial
proposals with knowledge that Rexroth wanted to revise its proposed
costs downward. We deny the protest.
The Navy received six price offers in response to the RFP by the May
6, 1985 closing date. The RFP did not require the submission of
technical proposals and no evaluation factors other than price were
contained in the solicitation. In accordance with the RFP, the Navy
evaluated the offerors' prices on the basis of the price proposed for
the basic contract quantity of one ship set of arresting gear components
and one option set of such components. York had the lowest evaluated
price, $1,705,640. Rexroth's price of $1,739,999.68 was evaluated
second low.
After conducting a preaward survey of York, the Navy found the
company to be nonresponsible. Because York was a small business
offeror, the Navy forwarded its preaward survey to the Small Business
Administration (SBA) for a determination whether the SBA should issue a
certificate of competency. At about the same time that the Navy was
considering York's responsibility, Rexroth submitted two written price
reductions, the first in a July 1 letter, reducing its initial price
offer to approximately $1,640,300, and the second in a July 24 letter,
further reducing it to approximately $1,602,300, a price $103,340 below
York's. The SBA issued a certif icate of competency to York, and the
Navy, ignoring Rexroth's offered price reductions, concluded that an
award to York on the basis of its initial proposal would be in the best
interest of the government. The Navy awarded the contract to the
company on August 20.
Rexroth argues that although its late price reductions per se could
not be accepted by the Navy, they were substantial enough to indicate
that opening negotiations and requesting best and final price offers,
rather than making an award on the basis of the initial price proposals,
would prove highly advantageous to the government.
As a general rule, a contracting agency may make an award on the
basis of initial proposals, without holding discussions or requesting
best and final offers, provided that the solicitation advised offerors
of this possibility, and there has been adequate competition to
demonstrate that the award will result in a fair and reasonable price.
Consolidated Industries, Inc., B-210183, Aug. 25, 1983, 83-2 C.P.D. P
249. Both requirements were satisfied here. Clause L59 on page 37 of
the RFP informed offerors that award may be made based on initial
proposals, without discussions, and that initial offers thus should be
submitted on the price and technical terms most favorable to the
government. Further, since the variation between the three low offers
was only 7 percent, and York's price compared favorably with the prices
paid under two prior contracts for arresting gear components, the Navy
determined that the price submitted by York was fair and reasonable, and
was based on adequate competition. We find no basis for questioning the
Navy's determination. See True Machine Co., B-215885, Jan. 4, 1985,
85-1 C.P.D. P 18.
The question remains whether, notwithstanding the above general rule,
the Navy should have opened negotiations based on Rexroth's proposed
price reductions.
We have held that an agency may, but is not automatically required
to, open negotiations where one offeror submits a late modification that
reduces its price. Gemma Corp., B-218389.2, Aug. 30, 1985, 85-2 C.P.D.
P 252. Negotiations need not be opened where award is to be made on an
initial proposal basis unless a potentially significant proposed price
reduction, or some other proposed modification, indicates that
negotiations would be highly advantageous to the government. Timex
Corp., B-197835, Oct. 10, 1980, 80-2 C.P.D. P 266.
The contracting officer determined that the potential savings
indicated by Rexroth's proposed price reduction were not sufficient to
warrant disruption of the procurement process in this case. The
contracting officer's position was based in part on the fact that
Rexroth's price reduction was not offered until July 24, more than 2
months after the initial closing date, and after the expense of
conducting the preaward surveys had been incurred. The contracting
officer also was influenced by the fact that (as indicated in a June 20
letter from Rexroth to the Navy) Rexroth had become aware, possibly from
the preaward survey activity, that York was in line for the award as the
low offeror. Rexroth's proposed reductions were submitted after the Navy
received the June 20 letter, and the contracting officer believed it was
inadvisable to open negotiations based on a price reduction from an
offeror which knew the identity of the likely awardee.
Although we do not consider the potential 6 percent cost saving
indicated by Rexroth's proposed reduction unimortant, we believe the
contracting officer's determination not to open negotiations was
reasonable under the circumstances. The contracting officer properly
factored the time and expense of York's preaward survey into his
consideration of the potential savings from opening negotiations. In
this regard, we do not believe that offerors generally should be
permitted to disrupt unilaterally, and thereby postpone, an orderly
procurement procedure by offering late price reductions. To hold
otherwise would defeat the purpose of the solicitation's late proposal
provisions--to alleviate confusion, to assure equal treatment of all
offerors, and to maintain the integrity of the competitive system.
Timex Corp., B-197835, supra.
Moreover, we share the contracting officer's view that where it
appears one offeror has determined the identity of the intended awardee
during the pendency of an award based on initial proposals, it is
reasonable not to accept a proposed price reduction from that offeror as
a basis for opening negotiations. Although there is no indication in
the record that Rexroth had knowledge of York's offered price, a firm's
knowledge of the low offeror in a procurement based on price competition
automatically signals the firm that it must lower its price to be
considered for the award. This knowledge could place the firm in a
significantly advantageous competitive position if negotiations were
held. Such a competitive advantage is not contemplated by the normal
procurement process; the prohibition against revealing the identities
of the offerors on a negotiated procurement avoids this situation.
While offerors cannot be prevented from gaining information by, as
Rexroth puts it, "reading the tea leaves of a procurement," no offeror
is entitled, in circumstances like those here, to impose a reopening of
a competition to enable it to utilize information so acquired.
Rexroth asks that we advise the Navy not to exercise the option under
York's contract without first issuing a new solicitation to determine
whether more favorable prices will be available for the option
quantities. As the Navy states in its report that it intends to comply
with all regulatory requirements in deciding whether to exercise the
option, we will not consider this matter. See Bobnreen Consultants,
Inc., B-218214, Feb. 27, 1985, 85-1 C.P.D. P 251.
Rexroth requests its proposal preparation costs and attorney's fees.
We will not allow recovery of these costs where, as here, we find the
protest to be without merit. 4 C.F.R. Sec. 21.6(a) (1985); John C.
Kohler Co., B-218133, Apr. 22, 1985, 85-1 C.P.D. P 460.
Rexroth's protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220013 85-2 CPD 537 DATE: November 12, 1985
MATTER OF: Action Manufacturing Company
DIGEST:
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
ADMINISTRATIVE DISCRETION - COST/PRICING EVALUATION
Cost evaluation of proposals conducted by an agency under the
authority of the Arsenal Statute, 10 U.S.C. Sec. 4532(a) (1982),
for the purpose of determining whether supplies can be obtained
from government-owned, contractor-operated (GOCO) factories on an
economical basis may be made by comparing cost proposals of
contractor-owned and -operated plants with out-of-pocket cost
proposals of GOCO contractors which exclude those costs that would
be incurred by the GOCO contractors whether or not a particular
contract is awarded to a GOCO plant.
Action Manufacturing Company protests the terms of request for
proposals (RFP) No. DAAA21-95-R-0276, issued by the Army Armament,
Munitions and Chemical Command, Dover, New Jersey. The solicitation, as
amended, permitted the participation as offerors of operating
contractors of GOCO (government-owned, contractor-operated) facilities,
as well as private COCO (contractor-owned, contractor-operated) firms.
Action maintains that the basis on which offers from GOCO plant
operators are to be evaluated by the Army under the amended solicitation
is unfair, contrary to the requirement for full and open competition in
the Competition in Contracting Act of 1984 (CICA), 10 U. S.C.A. Sec.
2304(a) (1) (A) (West Supp. 1985), and results in unequal competition.
We deny the protest.
The solicitation requested proposals for full scale engineering
development, fabrication, and delivery of a quantity of rocket
propellant grains and ignition delay assemblies for use in a military
projectile propulsion system. The RFP contemplated the award of a
costplus-incentive-fee contract. As amended, the solicitation required
GOCO offerors to submit two cost proposals, one on a "fully funded"
basis and the other on an "out-of-pocket" cost basis. However, the RFP
provided that cost evaluation of GOCO operator proposals would be based
solely on the "out-of-pocket" cost proposal. Further, the solicitation
defined "out-of-pocket" costs as follows:
"Out-of-Pocket Cost. At a minimum, all direct labor and direct
material costs shall be considered as out-of-pocket. Also
included would be any other cost directly attributed to the
performance of the work order for products or services and which
would not be incurred except for such work order. It should not
include any amounts which do not represent actual expenditures by,
or loss of savings to, the Government which are directly
attributed to production for such products or services in the
Government plant. Loss of savings is defined as only those
savings that would result in actual accrual to the Government.
Allocations of overhead, fixed costs, etc., which do not represent
a change in actual expenditures are not savings to the
Government."
The Army has received proposals from both GOCO and COCO offerors.
As noted above, Action, a potential COCO contractor, objects to the
Army's basis for evaluating GOCO cost proposals solely on an
"out-of-pocket" basis because Action believes that this evaluation
scheme results in preferential treatment of GOCO contractors and places
COCO contractors at a severe economic disadvantage. Specifically, Action
argues that COCO contractors must include in their proposals all
economic burdens and overhead, including utilities, sewage disposal,
telephone service, and rental or depreciation of physical facilities;
GOCO contractors do not. Consequently, according to Action, the
solicitation creates three classes of offerors: 1) GOCO offerors that
will be evaluated solely on the basis of direct material and labor
costs; 2) COCO offerors that are given credit for evaluation purposes
under other provisions of the solicitation for voluntary, partial use of
government equipment; and 3) COCO offerors that will not use any
government facilities or equipment and that will therefore be evaluated
on the basis of a"total cost bid." Actions contends that this unequal
competition violates the "full and open" competition requirements of
CICA, since true economic cost to the government as a whole, including
depreciation of facilities and equipment, ought to be evaluated by the
Army in selecting a successful proposal.
In response, the Army states that this evaluation scheme is
sanctioned by the provisions of the Arsenal Statute, 10 U.S.C. Sec.
4532(a) (1982), as consistently interpreted by our Office. We agree.
The statute provides that:
"The Secretary of the Army shall have supplies needed for the
Department of the Army made in factories or arsenals owned by the
United States, so far as those factories or arsenals can make
those supplies on an economical basis. "
In our report, B-143232, December 15, 1960, to the Chairman,
Subcommittee for Special Investigations, House Committee on Armed
Services and to the Secretary of Defense, we stated that the Arsenal
Statute makes it mandatory to use government arsenals and
government-owned factories to manufacture or produce all of its needs
which could be so manufactured or produced on an economical basis. We
also stated that the words "Government-owned factories" include both
government-owned government-operated, and government-owned
contractor-operated, industrial facilities, and that the words
"economical basis" were intended to require a comparison of all costs
incurred by the government as a result of producing an article in
government-owned facilities with the price at which the article could be
purchased from a private manufacturer. In addition, we said that in
determining under this statute whether an article could have been
produced on an "economical basis," it would have been improper to
include in the evaluation of such cost any amount which did not
represent an actual expenditure by, or loss of savings to, the
government which was directly attributable to such production. In our
view, the basic concept of the statute was a requirement that
government-owned industrial facilities should not be permitted to lie
idle if it would be possible to use such facilities at a cost to the
government no greater than the cost of procuring such needs from private
industry. Similarly, we stated to the Secretary of Defense:
" . . . The words economical basis, as used in 10 U.S.C. 4532(
a), are to be construed to mean a cost to the Government which is
equal to or less than the cost of such supplies to the Government
if produced in privately owned facilities, and it is our opinion
that this statute requires the cost of production in Government
plant to be computed on the basis of actual out-of-pocket cost to
the Government."
See also Olin Corp., 57 Comp. Gen. 209 (1978), 78-1 C.P.D. P 45; 53
Comp. Gen. 40 (1973).
It has thus been our long-standing interpretation that GOCO
contractors must be evaluated on the basis of "out-ofpocket" costs, that
is, excluding those costs which would be incurred by the GOCO contractor
whether or not a particular contract was awarded to the GOCO plant. See
57 Comp. Gen., supra. The Army's position here is consistent with that
interpretation.
Further, we think that the general CICA requirement for full and open
competition has been met where competitive offers have been solicited
and received from COCO and GOCO contractors even though GOCO contractors
may have a competitive advantage. In this regard, we have stated that
the government is not obliged to compensate for the competitive
advantage a firm may enjoy in a procurement, such as by incumbency,
unless such advantage results from a preference or unfair action by the
contracting agency. See, e.g., Systems Engineering Associates Corp.,
B-208439, Jan. 31, 1983, 83-1 C.P.D. P 97. Here, the alleged unfair
action by the contracting agency, evaluation of GOCO proposals on an
"out-of-pocket" cost basis, is required by the Arsenal Statute. Thus,
the competitive advantage enjoyed by GOCO firms are explicitly
sanctioned by law. Moreover, we see nothing in CICA which alters this
evaluation scheme in procurements conducted by an agency under the
authority of the Arsenal Statute.
Finally, the protester relies upon and cites, as the only regulatory
support for its position, the Federal Acquisition Regulation, 48 C.F.R.
Secs. 45.205, 52.245-9 (1984), which, according to the protester,
requires this solicitation to contain a "Use and Charges Clause"
(generally requiring evaluation of costs of government furnished
equipment in the possession of an offeror). We merely note that this
clause is only required for consolidated facilities contracts,
facilities use contracts, fixed price contracts, or when government
production and research property, is provided on other than a rent-free
basis. See 48 C.F.R. Sec. 45.302-6(c). These circumstances are not
present here.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220012 85-2 CPD 595 DATE: November 25, 1985
MATTER OF: Zodiac of North America, Inc.
DIGEST:
CONTRACTS - DATA, RIGHT, ETC. - DISCLOSURE - PRIOR TO AWARD - NO
EVIDENCE TO SUPPORT ALLEGATIONS
GAO will not recommend award to the protester rather than the
low responsive bidder where the protester does not present clear
and donvincing evidence that the solicitation's specifications and
drawings package is derived from proprietary technical data and
drawings.
Zodiac of North America, Inc. (Zodiac), protests award of a contract
to any bidder but itself under invitation for bids (IFB) No.
N00024-85-B-2292 issued by the Department of the Navy for the
procurement of Combat Rubber Raiding Craft (Small). Zodiac contends
that award to any other bidder under the solicitation would be improper
since the solicitation's specifications and accompanying drawings were
derived without its authorization from proprietary technical data and
drawings which it had furnished the Naval Sea Systems Command. We deny
the protest.
The IFB, issued by the Naval Sea Systems Command (Navy) on June 28,
1985, provided in pertinent part that the craft shall be in accordance
with the requirements of specification NAVSEA T900S-A-G-SBS-010, June
14, 1985--"Specifications for Construction of a Combat Rubber Raiding
Craft (Small), Outboard Motor Powered"--including the attached drawings
Nos. 5103945 and 5103946. Notwithstanding the protest, the Navy has
proceeded with award to the low bidder, RFD-Patten, on the basis of a
written determination by the head of the procuring activity that urgent
and compelling circumstances affecting the interests of the United
States would not permit waiting for a decision. See 31 U.S.C. Sec.
3553(d)(2) (West Supp. 1985).
Zodiac, in a protest filed the day before bid opening, argues that
award under the solicitation to any bidder other than itself would be
improper since the solicitation's specifications and related drawings
are based upon proprietary technical data which Zodiac had developed at
its own time and expense. Specifically, Zodiac asserts that the
solicitation's specifications were derived from "privileged and
protected" technical data, bearing restricted rights legends, which it
furnished to the Navy. Zodiac states that the drawings accompanying the
solicitation's specifications duplicate specific technical design
details of Zodiac's model K-40 inflatable rubber craft which are wholly
proprietary to Zodiac and which were protected against unauthorized
disclosure by restrictive rights legends imposed on each of the
drawings. Zodiac has provided photographs of the Zodiac K-40 which it
asserts highlight the craft's proprietary features. Of the five bids
received, Zodiac's was second low.
In response to the protester's allegations, the agency states that
the solicitation's specifications and attached drawings were in no way
developed on the basis of proprietary data or drawings furnished by
Zodiac, but were independently developed for the Navy by NKF Engineering
Corp. (NKF) under an April 1984 contract for the development of a new
specifications and drawings package for future procurements of Combat
Rubber Raiding Craft. The Navy advises that Zodiac did provide it with
one drawing of its K-40 craft but that such drawing was not furnished
pursuant to any contractual requirement, did not bear either a
restricted rights legend or any other proprietary marking, and there was
no written or oral agreement regarding its use. Moreover, the Navy
advises, although there was no agreement with the protester limiting the
Navy's right to use or distribute the drawing of the Zodiac K-40 craft,
the Navy did not provide the drawing to either NKF or to any other
contractor. The Navy stresses that the development of the Combat Rubber
Raiding Craft performance specifications and drawings package was
accomplished independently by NKF using Navy-owned boats and Navy
military specifications and drawings.
According to the agency, in August 1984, NKF furnished it with the
preliminary specifications and drawings for the craft and that this
material was released to industry for comments. In September 1984, the
Navy contracted with two firms for the production of prototype craft
based on the preliminary specifications package. The Navy advises that
on January 29, 1985, it modified an existing April 1983 contract with
Zodiac for a quantity of Zodiac K-40 and K-50 model inflatable boats to
include the construction of three prototype boats using the preliminary
craft specifications and drawings which had been developed by NKF.
These prototype boats, the Zodiac X-40, were delivered to the Navy in
February 1985. The Navy notes that no technical data or drawings
relating to the K-40 or K-50 boats were ever delivered to the Navy by
Zodiac pursuant to either the contract for delivery of such boats or
under any other contract.
On May 7, 1985, Zodiac's April 1983 contract with the Navy was again
modified to provide that Zodiac would provide the Navy with technical
data and drawings for the three prototype (Zodiac X-40) boats. The
drawings provided by Zodiac of the prototype boat did not bear a
restrictive rights legend or any other marking that would indicate that
the material was to be restricted as proprietary. A brochure on the
Zodiac X-40 prototype boats, which contained technical data sheets on
the boats, was stamped on each page with a restricted rights legend.
However, the Navy states, neither the drawings nor the brochure was ever
provided to NKF or used by Navy personnel during the preparation of the
specifications and drawings for the Combat Rubber Raiding Craft. The
Navy points out that a comparison between the data and drawings
delivered by Zodiac for the prototype boats and the specifications and
drawings used in the solicitation under protest demonstrates significant
dissimilarities between Zodiac's data and the Navy's design for the
craft.
In appropriate circumstances, where it has been clearly established
that the government's use of proprietary data or trade secrets in a
solicitation violates a firm's proprietary rights, we may recommend that
the contracting agency either make a sole-source award to the protester
or, if possible, cancel the solicitation and resolicit without using the
protester's data. NEFF Instrument Corp., B-216236, Dec. 11, 1984, 84-2
C.P.D. P 649. However, the protester must prove by clear and
convincing evidence that its proprietary rights have been violated.
Wayne H. Coloney Co., Inc., B-211789, Aug. 23, 1983, 83-2 C. P.D. P
242. In other words, the protester has the burden of affirmatively
proving its case. John Baker Janitorial Services, Inc., B-201287, Apr.
1, 1981, 81-1 C.P.D. P 249. The protester must show that its material
was marked proprietary or confidential or must show that the proposal
was disclosed to the government in confidence. Also, the protester must
show that the material involved significant time and expense in
preparation and that it contained material or concepts that could not be
independently obtained from publicly available literature or common
knowledge. Id. and Porta Power Pak, Inc., B-196218, Apr. 29, 1980, 80-1
C.P.D. P 305.
Zodiac has not provided sufficient evidence to establish the
proprietary nature of the drawings which it had furnished the agency.
Our review of the record shows, contrary to Zodiac's allegations, that
the drawing of the Zodiac K-40 boat, which the Navy states it received
from Zodiac, does not contain a restricted rights legend or any other
printed statement which would indicate that such drawing was regarded as
proprietary or confidential in nature. Likewise, our review of the
drawings of the Zodiac X-40 prototype boat furnished the Navy by Zodiac
shows that such drawings do not bear a restricted rights legend or any
other indication that such drawings were considered by Zodiac as
proprietary. The Navy has informally advised us that the drawings which
were furnished with its report on the protest are the original drawings
provided by Zodiac and are not reproduced copies. Zodiac has not
refuted the Navy's statement that none of the drawings furnished by
Zodiac bear a notation that such material is restricted as proprietary.
Furthermore, Zodiac has not rebutted the agency's position that except
for the one drawing of its model K-40 rubber inflatable boat, Zodiac has
not provided the Navy with any other technical data or drawings
regarding the Zodiac model K-40 or K-50 boats.
While the brochure furnished by Zodiac on its model X-40 prototype
boat bears restrictive rights legends, Zodiac has not stated why such
material was properly proprietary in nature. Furthermore, as set forth
above, the Navy advises that it did not provide the technical data on
the Zodiac X-40 boat prototype to either NKF or any other Navy
contractor and Zodiac has not specifically alleged that the Navy
released the information contained in the model X-4O brochure. Indeed,
Zodiac's protest, in which it names only its model K-40 boat, appears to
relate solely to the Navy's alleged improper use of proprietary
technical data and drawings pertaining to the K-40 model. In any case,
Zodiac has not specified in what respect the Navy's specifications and
drawings package for the craft has improperly incorporated Zodiac
proprietary data and has not rebutted the Navy's statement that there
are substantial differences between Zodiac's technical data and the
specifications and drawings package developed by NKF.
On the basis of the record before us, we conclude that Zodiac has not
met its burden of demonstrating by clear and convincing evidence that
the specifications and drawings of the solicitation were derived from
technical data which is proprietary to Zodiac. Accordingly, the protest
is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220006.2 85-2 CPD 282
DATE: September 9, 1985
MATTER OF: International Service Corporation
DIGEST:
CONTRACTS - PROTESTS - BASIS FOR PROTEST REQUIREMENT
Protest that apparent low bid should be rejected as unbalanced is
dismissed for failure to state a valid basis for protest where the
protester says only that the bidder's price for an item is too low, but
does not allege that the bid contains enhanced prices for other items or
that acceptance of the bid might not result in the lowest cost to the
government. Such a protest is actually a challenge to the apparent low
bidder's responsibility, a matter that GAO generally does not review.
International Service Corporation protests any award of a contract to
R.G.& B, Inc. under solicitation No. 65503-85-B-0035, which Elison Air
Force Base, Alaska, issued for maintenance of base family housing. We
dismiss the protest.
The protester argues that the agency must reject the apparent low bid
submitted by R.G.& B, Inc. because that firm's bid for item No. 001 --
furnishing all labor, materials and transportation necessary to maintain
1163 housing units, mechanical rooms and garages -- is "significantly
less than cost." The protester alleges that R.G.& B, Inc. cannot perform
the work required by this item for the amount that it bid, which the
protester says is 34 percent lower than the current contract for this
work despite a 30 percent increase in wages alone in the 3 years since
that contract was awarded. The protester contends that the R.G.& B,
Inc. bid should be declared nonresponsive, citing in support of this
contention a solicitation provision that states that a bid that is
materially unbalanced as to prices for basic and option quantities may
be rejected as nonresponsive. The bid submitted by R. G.& B, Inc. is
unbalanced, implies the protester, because its price for basic bid item
No. 001 is only 48 percent of its total bid while this item historically
has constituted between 60 and 70 percent of the work to be performed.
A determination of whether an allegedly unbalanced bid is
nonresponsive involves a two-step analysis. The bid first must be
mathematically unbalanced in that it contains nominal prices for some
items and enhanced prices for others. A mathematically unbalanced bid
may be accepted for award. Central Texas College, B-216388, Sept. 26,
1984, 84-2 CPD Paragraph 361. To be rejected as nonresponsive, a
mathematically unbalanced bid must also be materially unbalanced, which
means there must be a reasonable doubt that acceptance of the bid
ultimately will result in the lowest cost to the government.
International Shelter Systems, Inc., B-218167, May 15, 1985, 64 Comp.
Gen. . . . , 85-1 CPD Paragraph 549.
The protester has not made a case for viewing the bid from R.G.& B,
Inc. as materially unbalanced. While the protester contends that the
prices submitted by that firm for the basic item No. 001 may be only
nominal, the protester does not allege that other prices in the bid are
enhanced. Moreover, even if it could be shown that the bid is
mathematically unbalanced, there is not even an allegation that the bid
is materially unbalanced, that is, that it may not result in the lowest
cost to the government. See Porta-John Corp., B-218080, Mar. 19, 1985,
85-1 CPD Paragraph 325.
Although the protester has styled its protest as one questioning the
responsiveness of an allegedly unbalanced bid, the thrust of the protest
is that the protester believes that, at least with respect to item No.
001, the bid submitted by R.G.& B, Inc. is below cost. The submission
of a below-cost bid is not illegal, however, and the government cannot
withhold award merely because a responsive bid is below cost. Alan
Scott Industries, B-219096, June 20, 1985, 85-1 CPD Paragraph 706.
Whether a low price is so low that the bidder will not be able to
perform the contract satisfactorily is a question concerning the
bidder's responsibility, Libby Corp., B-218367.2, Apr. 10, 1985, 85-1
CPD Paragraph 412, a question the contracting officer must resolve in
the affirmative prior to award. Federal Acquisition Regulation, 48
C.F.R. Section 9.103 (1984). This office does not review affirmative
responsibility determinations unless it is shown that the determination
may have been made fraudulently or in bad faith or that definitive
responsibility criteria stated in the solicitation may not have been
met. Bid Protest Regulations, 4 C.F.R. Section 21.3(f)(5) (1985). The
protester has alleged neither of these exceptions here.
Because the protester has failed to state a valid basis for protest,
the protest is dismissed. 4 C.F.R. Section 21.3(f); Command Systems,
B-218093, Feb. 15, 1985, 85-1 CPD Paragraph 205.
/s/ Ronald Berger
Deputy Associate General Counsel
FILE: B-220006 85-2 CPD 650
DATE: December 12, 1985
MATTER OF: Ralph Construction, Inc.
BIDS - LATE - MISHANDLING DETERMINATION - CERTIFIED MAIL
1. Late bid sent by certified mail 4 days before opening may not be
considered for award where there is no indication that government
mishandling was the paramount cause of the lateness. The fact that the
protester may have delayed submission of the bid while awaiting a return
telephone call from the contracting agency concerning bid opening time
does not constitute mishandling or provide a basis for consideration of
the late bid.
BIDS - LATE - ACCEPTANCE - PREJUDICIAL TO OTHER BIDDERS
2. When agency receives six bids and the apparent low bid is less
than the previous contract price for the same services, there is no
reason to question the contracting officer's determination that
reasonable prices have been obtained or to consider a late bid that is
lower than the lowest timely bid.
Ralph Construction, Inc., protests the rejection of its bid as late
under invitation for bids (IFB) No. F65503-85-B-0035. The solicitation,
issued July 22, 1985, by the Department of the Air Force, is for the
maintenance of family housing at Eielson Air Force Base, Alaska. Bids
were requested for the basic period from October 1, 1985, to September
30, 1986, plus two 1-year options.
We deny the protest.
The Air Force amended the IFB three times. Amendment 002, issued on
August 8, changed the specifications and erroneously indicated that the
time and date for receipt of bids, originally scheduled for 10 a.m. on
August 21, had been extended; however, no new time or date was
specified in the amendment. Upon realizing the error, on August 12 the
contracting officer issued amendment 003, which indicated that bid
opening would remain at 10 a.m. on August 21.
On August 16, the protester states, its representative called the
contracting office to ascertain the correct bid opening time. The Air
Force reports that most of its personnel were at a squadron picnic and
the individual who took the call was unaware of the status of the
procurement and, therefore, unable to answer the question raised by
Ralph. She apparently took a message, but the contract buyer never
received it.
The Air Force states that amendment 003 was mailed to all prospective
bidders, including Ralph. Ralph, however, contends that it did not
receive this amendment until August 24, i.e., after bid opening. The
firm argues that the agency's failure to return its initial or
subsequent telephone calls, also made on August 16, caused its bid to be
late. Alternatively, Ralph contends that government mishandling
accounts for the lateness of the bid, which was postmarked August 17,
but not received by the contracting officer until 1:25 p.m. on August
21. Ralph seeks consideration of its bid or preparation costs and
attorney's fees.
The Federal Acquisition Regulation (FAR), 48 C.F.R. Section 14.304-1
(1984), permits consideration of a bid received at the office designated
in the solicitation after bid opening if it is received before award is
made and it (1) was sent by registered or certified mail not later than
the 5th calendar day before the date specified for receipt of bids or
(2) was sent by mail and it is determined by the government that the
late receipt was due solely to mishandling by the government after
receipt at the government installation. Since, as indicated above, the
postmark on Ralph's certified mail receipt is August 17, the bid cannot
be considered under the 5-day rule.
As for mishandling after receipt at the government installation,
according to the Air Force, the general procedure is for Eielson
employees to pick up mail at the U.S. Postal Service facility located on
the base and deliver it to a central point, where it is sorted and
distributed. For certified mail, the employees note the time it is
actually picked up. Here, the record indicates that Ralph's bid was
picked up at 12:10 p.m. on the day of bid opening.
Generally, a protester must establish the timely receipt of a bid or
modification at the government installation before we will consider
alleged mishandling. X- Tyal International Corp., B-202434, Jan. 7,
1982, 82-1 CPD Paragraph 19. In the absence of the type of evidence of
timely receipt that is acceptable under the late bid clause, i.e., the
time/date stamp on the bid wrapper or other documentary evidence of
receipt maintained by the installation, the question of government
mishandling is irrelevant. Allied Electric, Inc., B-216548, Mar. 12,
1985, 85-1 CPD Paragraph 304; Eliscu & Co., Inc., B-211617, Jan. 17,
1984, 84-1 CPD 75.
Ralph argues that an exception to the above rule should be made in
view of the unreturned telephone calls. The agency, while acknowledging
that at least one call was not returned, states that it has no record of
subsequent calls from Ralph and suggests that the protester failed
diligently to pursue the matter, thereby contributing to the lateness of
its bid.
In our opinion, Ralph cannot argue that its bid was mishandled by the
government, in that the telephone call or calls occurred before the bid
was even mailed. We are also of the opinion that Ralph should have made
additional attempts to obtain clarification as to the time and date of
bid opening and/or acted on the assumption that bids remained due at 10
a.m. on August 21. The fact that Ralph delayed submission of the bid
while awaiting oral advice from the agency does not constitute
mishandling or provide a basis for its consideration.
Regardless of whether Ralph timely received the amendment that
indicated that bid opening had not been extended, it was faced with a
discrepancy between the originally scheduled opening time and an
amendment which indicated that the bid opening had been extended, but
did not contain a new time or date. In such a case, Ralph could not
reasonably have assumed that bid opening had been extended until some
indefinite time in the future. See Avantek, Inc., 55 Comp. Gen. 735
(1976), 76-1 CPD Paragraph 75.
Regarding Ralph's contention that its unopened bid for a 3-year
period (a base year plus two 1-year options) should be considered
because it is approximately $500,000 less than the apparent low bid, our
Office has held that a late bid cannot be considered on the basis that
it may offer the government certain advantages over those which have
been timely received. See Jack Burney, B-218426, Apr. 24, 1985, 85-1
CPD Paragraph 468.
Ralph also argues that since its unopened bid was lower than the
lowest timely bid, reasonable prices were not obtained. The record
discloses that the Air Force received six bids and that the apparent low
bid is less than the previous contract price for the same services.
This suggests that reasonable prices were obtained. A determination of
price reasonableness properly may be based upon comparisons with such
things as a government estimate, past procurement history, current
market conditions, or any other relevant factors. Omega Container,
Inc., B-206858.2, Nov. 26, 1982, 82-2 CPD Paragraph 475. We find no
basis to question the contracting officer's determination in this
regard, and we conclude that the agency properly refused to consider
Ralph's bid.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-220005 85-2 CPD 257
DATE: August 30, 1985
MATTER OF: Tri-County Corrugated, Inc.
DIGEST:
CONTRACTORS - RESPONSIBILITY - DETERMINATION - FACTORS FOR
CONSIDERATION - CONCLUSIVE BIDDING
Protest that other bidders failed to arrive at their bid prices
independently, thus violating certificate of independent pricing
determination, is dismissed. Whether bidder may have engaged in
collusive bidding is one circumstance to be considered by the
contracting officer in determining whether bidder is a responsible,
prospective contractor. Moreover, GAO will not consider a challenge to
an affirmative determination of responsibility in the absence of a
showing of possible fraud or bad faith.
Tri-County Corrugated, Inc. (Tri-County), protests any award of
contract No. N62467-85-C-5903 to American Refuse Service (American) or
World Refuse Service (World) under a solicitation issued by the
Department of the Navy for refuse collection. We dismiss the protest.
Tri-County contends that American and World failed to arrive at their
bid prices independently, thus violating the solicitation's certificate
of independent price determination. In support of its contention,
Tri-County alleges that American and World are closely held corporations
owned and operated by close relatives, one of whom is the president of
American and vice president of World. In addition, Tri-County points
out that the bids submitted by the two firms were precisely $40,000
apart.
If Tri-County means to suggest that the two firms acted jointly in
preparing their proposals, then we note that collusive bidding is a
matter for the determination of the contracting officer who, if he
perceives evidence of collusion, is expected to report the situation to
the Attorney General. Federal Acquisition Regulation, Sections 3.103
and 3.303, 48 C.F.R. Sections 3.103 and 3.303 (1984). Further, whether
a bidder in line for award may have engaged in collusive bidding is to
be considered in the contracting officer's determination of
responsibility. Our Office will not consider a challenge to an
affirmative determination of responsibility where, as here, there has
been no showing of possible fraud or bad faith. See DelRocco & Sons,
Inc., B-218314, Mar. 22, 1985, 85-1 C.P.D. Paragraph 339.
The protest is dismissed.
Robert M. Strong
Deputy Associate
General Counsel
FILE: B-220004.3 86-1 CPD 56
DATE: January 17, 1986
MATTER OF: Integrity Management International, Inc.
CONTRACTS - PROTESTS - ALLEGATIONS - UNSUBSTANTIATED
Protester's allegation that lower bidders were nonresponsive for
failing to submit amendments and manning documents is without merit
where low bidder withdrew its bid and second low bidder submitted the
necessary documents and the only evidence to show that it did not is the
protester's conflicting allegation.
Integrity Management International, Inc. (IMI), protests the proposed
award of invitation for bids (IFB) No. N00604-85-B-0091, issued by the
Naval Supply Center (Navy), Pearl Harbor, Hawaii, for mess attendant
services. IMI, the third low bidder, alleges that the two lower bidders
were nonresponsive to the IFB.
We deny the protest.
IMI alleges that neither Olympic Truck Cleaners (Olympic), the low
bidder, nor Renaissance Exchange, Inc. (RE), the second low bidder,
submitted amendment No. 0005 and manning documents, which were required
by the IFB. The Navy reports that while Olympic did not submit manning
documents and amendment No. 0005, it has been permitted to withdraw its
bid on the basis of a mistake. Further, the Navy advises that RE
submitted all amendments and manning documents with its bid. A copy of
these documents is part of the Navy's report. The Navy reports that at
bid opening, it erroneously announced that RE had not submitted
amendment No. 0005; however, after further review, the amendment was
found to be included with the bid.
IMI contends, on the basis of the Navy's response to its Freedom of
Information Act (FOIA) request for the amendments and manning documents
of Olympic and RE, that there was collusive bidding because the bidders
appear to have submitted the same manning documents. Alternatively, IMI
alleges that the Navy could have mistakenly included Olympic's manning
documents as part of RE's bid, which means that RE's bid still should
have been rejected as nonresponsive.
Concerning the alleged nonresponsiveness of Olympic's bid, since it
was permitted to withdraw, the issue is academic. Further, the Navy
advises that IMI is misinformed about the identity of the bidder from
which manning documents and amendment No. 0005 were not received.
Olympic did not submit either document. RE submitted both with its did,
as previously indicated. From our examination of the FOIA response, it
appears that the Navy fowarded RE's manning documents in response to the
FOIA request for Olympic's and then sent them again when IMI requested
RE's documents. There is no evidence that RE did not submit manning
documents or that Olympic and RE submitted the same manning documents,
save IMI's allegations that the Navy mistakenly made Olympic's manning
documents a part of RE's bid. Therefore, IMI has not met its burden of
affirmatively proving these allegations since there is only conflicting
evidence from the the Navy and IMI, in which case we are compelled to
accept the Navy's explanation of the facts involved here. See Intermen
Corporation, B-217378, Mar. 29, 1985, 85-1 C.P.D. Paragraph 378.
Harry R. Van Cleve
General Counsel
FILE: B-220002
DATE: December 13, 1985
MATTER OF: Professional Data Services, Inc.
CONTRACTS - NEGOTIATION - AWARDS - PROPRIETY - UPHELD
1. Contracting agency properly selected for award the proposal that
received the highest evaluated score for technical factors and price
where the evaluation was reasonable and consistent with the
solicitation's evalution scheme.
CONTRACTS - NEGOTIATION - PRICES - BELOW COST - EFFECT ON
RESPONSIBILITY
2. No statute or regulation precludes an award of a fixed-price
contract simply because the offeror may have proposed wage rates below
the applicable Department of Labor minimum wage determinations. While
the risk that the offeror may have to pay higher rates than indicated in
its proposal may be a factor in determining the offeror's
responsibility, GAO does not review a determination that an offeror is
responsible except in limited circumstances.
Professional Data Services, Inc. (PDSI) protests the award of a
fixed-price contract to DDD Co. under request for proposals (RFP) No.
67-3K06-85 issued by the Department of Agriculture, for administrative
support services for the Procurement and Warehouse Section (PWS) at the
National Agriculture Library Building. PDSI essentially argues that the
agency's evaluation of proposals did not conform with the RFP's stated
evaluation scheme.
We deny the protest.
The work covered by the RFP included controlling and processing
procurement documents; responding to inquiries from purchasing offices,
vendors, and the finance office; mail handling and distribution;
performing some librarian functions concerning procurement resources;
and providing receptionist and various other services. The PWS has
yearly business of approximately $14 million and receives 250-300
telephone calls daily.
The RFP's stated evaluation scheme explained that proposals would be
evaluated as follows:
TABLE OMITTED
The RFP stated that Price would be evaluated by adding an offeror's
price for the basic period and each of three 1-year options and
assigning the lowest priced proposal the maximum 40 points. The other
proposals would be assigned fewer points in proportion to their higher
prices. An amendment, responding to prospective offerors' preproposal
questions, advised that Price would be the determining factor only if
two or more proposals were technically equal.
The three proposals included in the competitive range were evaluated
as follows:
TABLE OMITTED
The agency conducted discussions and requested best and final offers.
The evaluation results are listed below:
TABLE OMITTED
The increased prices mainly resulted from the offerors proposing more
personnel in response to the agency's concern, expressed during
discussions, that staffing was inadequate. All best and final offers
proposed basically the same number of staff-hours (PDSI proposed 39,164
hours, DDD 39,132 and RAI 38,260). Based on the superior score of DDD's
proposal, the agency selected that proposal for award.
The protester contends that the RFP directed offerors to propose
highly skilled personnel and that PDSI's proposal was priced higher than
the other proposals because PDSI proposed more highly qualified
personnel. In PDSI's view, the agency ignored this stated emphasis and
made award to a contractor offering a clerical staff at a commensurate
price. PDSI requests that we reevaluate its proposal in light of the
stated evaluation scheme and rule that PDSI should be awarded the
contract based on its proposal's technical excellence.
The Office does not independently review proposals to determine which
offer is most advantageous to the government; rather, our review is
limited to examining whether the contracting agency's evaluation was
fair, reasonable and consistent with the stated evaluation scheme.
Aurora Films, B-216706, Jan. 22, 1985, 85-1 CPD Paragraph 81. We will
question the agency's evaluation only upon a clear showing of
unreasonableness, abuse of discretion, or violation of procurement
statutes or regulations. Id.
Our review indicates that the agency's evaluation did conform to the
evaluation scheme. Contrary to the protester's contention, the RFP did
not direct offerors to propose highly skilled personnel as opposed to
clerical workers. The RFP's evaluation scheme weighted technical
factors 50 percent more important than Price, but there was no emphasis
on providing especially qualified employees. In this regard, the
evaluation factor of Key Personnel was worth only 10 points, 75 percent
less important than Price. Furthermore, the RFP clearly indicated that
the required tasks were clerical in nature since it described the
positions of the government employees who previously performed the work
as Procurement Clerk (Supervisory), Procurement Clerk, Clerk-Typist, and
Student Aides.
Moreover, the agency's evaluation of proposed personnel did not rank
PDSI superior to DDD. While PDSI scored slightly higher than DDD in
Technical Understanding and Approach, DDD outscored PDSI in Past
Corporate Experience and Key Personnel.
We believe the record supports the reasonableness of the agency's
scoring. Apparently, one reason that PDSI did not receive higher scores
for Technical Understanding and Approach was because PDSI submitted an
unnecessarily elaborate proposal that in part was confusing regarding
what was being offered. An offeror has the burden of submitting an
adequately written proposal permitting the agency to make an intelligent
evaluation, and failure to do so justifies lowering the proposal's
score. ATI Industries, B-215933, Nov. 19, 1984, 84-2 CPD Paragraph 540.
Regarding Past Corporate Experience, the agency noted that most of
PDSI's experience had been in systems design and development, which
probably exposed the firm to valuable experience concerning document
control, but was not directly applicable to the RFP's requirements. The
protester has not challenged this conclusion. DDD, on the other hand,
had more direct experience in administering an office responsible for
controlling large numbers of documents.
The agency downgraded PDSI's proposal under Key Personnel because the
proposed project manager lacked supervisory experience. DDD's proposed
project manager had supervisory experience, and the resume of its
proposed personnel showed appropriate experience and qualifications to
perform the work. We therefore believe the agency's evaluation provided
a proper basis for selecting DDD's proposal for award.
The protester argues that the agency amended the RFP eliminating
Price as a factor. The protester construes the amendment that Price
would be the determining factor only if two or more proposals were
technically equal as having changed the RFP's evaluation scheme by
eliminating Price as a factor, except where there were technically equal
proposals. The amendment clearly did not eliminate Price as a factor
but stated only that Price would become the determining factor among
technically equal proposals. Moreover, the award was proper even under
the protester's interpretation since DDD outscored PDSI under the
technical factors and aside from Price.
The protester also argues that DDD's prices were based on wages that
failed to comply with the Department of Labor's minimum wage
determination, under the Service Contract Act, incorporated in the RFP.
There is no statute or regulation that precludes an award of a
fixed-price contract simply because the offeror may have proposed wage
rates below the applicable minimum wage determinations. Uniserv Inc.,
et al., B-218196, et al., June 19, 1985, 85-1 CPD Paragraph 699. A
contractor is bound to the wage determinations even where its proposal
indicates its prices were based on lower rates. The risk that an
offeror will be required to pay higher wages conceivably could
jeopardize the offeror's ability to perform the proposed contract so as
to justify a determination that the offeror is nonresponsible. In this
case, however, DDD was determined to be responsible, and our Office does
not review an affirmative determination of responsibility absent a
showing of either possible fraud on the part of the procuring officials
or that definitive responsibility criteria in the RFP have not been met.
Id. PDSI does not allege that either circumstance applies here.
Further regarding the minimum wage, PDSI complains that DDD's prices
for the option years did not include escalation. We point out that the
RFP incorporated by reference a clause, captioned "Fair Labor Standards
Act and Service Contract Act Price Adjustment," that provided for a
price adjustment where the contractor is compelled to increase
employees' wages to comply with a new wage determination. See Serv-Air,
Inc; AVCO, 60 Comp. Gen. 44 (1980), 80-2 CPD Paragraph 317. Thus, the
failure to include escalation did not indicate that the offeror cannot
pay its employees the applicable minimum wage rates.
Finally, the protester speculates that the agency expressed concerns
during discussions that PDSI initially did not propose sufficient
staffing in order to cause PDSI to raise its prices and to benefit a
favored offeror. The record contains no basis in fact to support this
allegation. All three proposals in the competitive range initially
proposed a staff of five persons. In addition, all offerors were
advised that the agency's estimate for the work was 7.3 persons, and
that the agency was concerned how the offerors could perform the
proposed work with just five persons.
We therefore find no merit in PDSI's protest, and the protest is
denied.
Harry R. Van Cleve
General Counsel
FILE: B-220000.4 85-2 CPD 702
DATE: December 23, 1985
MATTER OF: Swager Communications, Inc. -- Reconsideration
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
RECONSIDERATION REQUESTS - ERROR OF FACT OR LAW - NOT ESTABLISHED
Prior decision dismissing a protest is affirmed where question raised
in the protester's original submission did not state a valid basis for
protest and was untimely raised.
Swager Communications, Inc. requests reconsideration of our decision,
Swager Communications, Inc., B-220000.2, Nov. 21, 1985, 85-2 CPD
Paragraph . . . , in which we dismissed the firm's protest against the
award of a contract under request for proposals No. 85-R-0669-0134,
issued by the Agency for International Development (AID). We dismissed
the protest because the firm's submission essentially consisted of a
series of questions concerning the conduct of the procurement, but did
not raise specific allegations of agency misconduct so as to provide any
adequate basis for protest. Moreover, to the extent that the protest
could be read as raising specific issues for our consideration
concerning the acceptability of its competitor's product, the issues
were untimely raised since the protest was not filed within 10 working
days after Swager knew or should have known of its bases for protest.
Swager requests reconsideration of our November 21 decision because
of the issue concerning the possible disclosure of proposal information
by two AID evaluators during the evaluation process. In its original
submission, Swager had questioned why the evaluators had been removed
from their positions; in the firm's stated view, this was "proof" that
AID suspected irregularities in the conduct of the procurement. Swager
now states in its request for reconsideration that AID is currently
investigating the matter, and the firm apparently believes that the
issue therefore constitutes an adequate basis for this Office to
consider the protest. We do not agree.
As we emphasized in our prior decision, the protester has the burden
of proving its case, and we will not conduct investigations for the
purpose of establishing whether a protester may have a valid basis for
protest. See William A. Stiles, III -- Reconsideration, B-215922.3,
Feb. 19, 1985, 85-1 CPD Paragraph 208. Thus, the mere question raised
as to why AID removed the evaluators from their positions was legally
and factually insufficient for our consideration of the matter. See Bid
Protest Regulations, 4 C.F.R. Sections 21.1(c)(4), 21.1(e) (1985).
Moreover, Swager's request for reconsideration in fact confirms that
it was aware several months prior to filing its original protest on
November 13 of suspected misconduct on the part of the evaluators. In
this regard, the firm states that it first reported the matter to AID in
July of 1985. Consequently, the issue was not raised with this Office
until well beyond the expiration of the 10-working day period imposed by
our regulations for the timely filing of protests alleging other than
solicitation improprieties. See 4 C.F.R. Section 21.2(a)( 2).
Swager has clearly failed to meet its burden to show that our prior
decision contains legal or factual errors which would warrant its
reversal or modification. See Department of Labor -- Reconsideration,
B-214564.2, Jan. 3, 1985, 85-1 CPD Paragraph 13.
Accordingly, our prior decision is affirmed.
Harry R. Van Cleve
General Counsel
FILE: B-220000.3 86-1 CPD 186
DATE: February 24, 1986
MATTER OF: Cosmos Engineers, Inc.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
TECHNICAL ACCEPTABILITY - SCOPE OF GAO REVIEW
1. GAO will not disturb a determination by a contracting agency of
the relative desirability and technical adequacy of proposals absent a
clear showing that the determination was arbitrary or unreasonable.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - DISCUSSION WITH ALL
OFFERORS REQUIREMENT - "MEANINGFUL" DISCUSSIONS
2. Protest that meaningful discussions were not conducted with the
protester concerning the inadequacies in its experience is denied. The
solicitation called for, and the protester submitted, detailed
information in this regard. Therefore, GAO agrees with the agency's
apparent determination that the inadequacies in the proposal represented
weaknesses in the firm's actual experience that could not be remedied
during discussions, rather than inadequacies in the firm's demonstration
of its experience in its proposal.
Cosmos Engineers, Inc. protests the award of a contract to Harris
Corporation under request for proposals (RFP) No. REDSO-WCA-Liberia
85-R-0669-0134, issued by the Agency for International Development
(AID), Regional Economic Development Services Organization, Aibdjan,
Ivory Coast. The procurement was for broadcasting and electronic
equipment and related services for the Liberian Rural Communications
Network. /1/ Cosmos contends that AID improperly evaluated its proposal
and failed to conduct meaningful discussions with the firm.
We deny the protest.
The RFP stated that a technical evaluation committee would evaluate
technical proposals according to the following evaluation criteria:
understanding of the project requirements and responsiveness to the
specifications (25 points); applicable experience in performing similar
type contracts (20 points); qualifications of contractor personnel (15
points); compliance with specifications for supplies, equipment and
technical materials, and schedules for installation (15 points); total
price (25 points). The RFP further indicated that the evaluated
technical and price scores would be consolidated to determine overall
scores (100 points maximum) and select the most advantageous proposal to
the government.
Of five proposals received, four were determined by AID to be in the
competitive range. After discussions and two rounds of best and final
offers, the technical evaluation committee's final evaluation of
proposals resulted in the following rankings:
Harris 93 points
Cosmos 80 points
Swager 71 points
Scientific 67 points
AID thereafter awarded the contract to Harris for a total price of
$2,195,000; Cosmos had proposed a price of $1,986,656.
In a postaward notification to Cosmos, the contracting officer
informed the firm of the award to Harris and stated that the Cosmos
proposal was not selected because "(i)t was weak in the area of
experienced personnel, with particular regards to broadcast equipment
installation." More specifically, the contracting officer stated that
with respect to experience, Cosmos' proposal was "Notably missing . . .
personnel and company experience in providing and installing broadcast
facilities," and that with respect to personnel qualifications, Cosmos'
proposal was "Notably missing . . . experience in radio broadcasting,
overseas experience, and work with the U.S. Government on similar
activities." Cosmos then filed this protest.
The protester disputes the contracting officer's conclusions
concerning the weakness of its proposal with respect to the two factors
of experience and personnel qualifications. Regarding these two
factors, Cosmos maintains that information concerning its experience and
personnel qualifications was not "notably missing" from its proposal and
that the contracting officer's contrary findings in his postaward
notification are clearly erroneous. Cosmos argues, for example, that
its proposal demonstrated that it had designed and installed a prototype
low frequency antenna for the Federal Emergency Management
Administration and a "Trident" telecommunications center, including
broadcast transmitters, for the Navy. Cosmos also states that its
proposal identified an experienced Liberian subcontractor which would
assist Cosmos in the installation of the equipment. In addition, the
protester asserts that the resumes of its key personnel, which were
included with the proposal, identify extensive and broad experience in
telecommunications and broadcasting, both domestic and overseas,
including Africa.
Generally, it is not the function of our Office to independently
evaluate the technical adequacy of proposals. Westinghouse Electric
Corp., 57 Comp. Gen. 328 (1978), 78-1 CPD Paragraph 181; Decision
Sciences Corp., B-182558, Mar. 24, 1975, 75-1 CPD Paragraph 175. The
overall determination of the relative desirability and technical
adequacy of proposals is primarily a function of the procuring agency,
which enjoys a reasonable range of discretion in the evaluation of
proposals. Struthers Electronics Corp., B-186002, Sept. 10, 1976, 76-2
CPD Paragraph 231. Therefore, we will not disturb such determinations
absent a clear showing of unreasonableness, abuse of discretion, or
violation of procurement statutes or regulations. Bank Street College
of Education, 63 Comp. Gen. 393 (1984), 84-1 CPD Paragraph 607.
Concerning the two evaluation factors of experience and personnel
qualifications, the scoring of the technical evaluation committee was as
follows:
TABLE OMITTED
The narrative accompanying the technical evaluation committee scoring
indicates that, with respect to experience, Harris demonstrated broad
experience in broadcasting that was unmatched by any competitor. The
committee also noted that Harris had extensive African experience,
including experience in Nigeria and Liberia. Concerning personnel
qualifications, the committee noted that the structure of Harris' home
office management, with its extensive overseas experience, inspired
particular confidence.
Regarding the experience reflected in Cosmos' proposal (which
included an extensive "capabilities brochure"), the committee found
relevant only one antenna project that the firm had performed for the
United States Information Agency. Moreover, the committee specifically
found that Cosmos had no previous African experience. In this regard,
AID states that Cosmos provided no details concerning the assistance to
be provided to Cosmos by its Liberian subcontractor, and that, in any
event, AID was primarily evaluating the experience of Cosmos as a prime
contractor. With respect to personnel qualifications, the committee, in
its short narrative, stated generally that Cosmos' proposed personnel
lacked experience in radio broadcasting, overseas experience, and past
similar work for the government.
We have reviewed the proposal submitted by Cosmos and all AID
evaluation documents. For the reasons that follow, we think that Cosmos
has failed to show that AID improperly or unreasonably evaluated its
proposal.
Our review of the record indicates that Cosmos' proposal in fact did
not demonstrate experience in performing similar work in Africa, except
that one of its managers (not the firm itself) had experience with the
installation of a relay station in Liberia. Our review of Cosmos'
proposal also confirms AID's statement that Cosmos failed to provide any
significant detail concerning its proposed Liberian subcontractor.
In its protest, Cosmos solely relies on two prior projects that it
performed to support its contention that its proposal was not "notably
missing" information concerning relevant experience. As stated
previously, these two projects were the design and installation of a
prototype low frequency antenna for the Federal Emergency Management
Administration and also a "Trident" telecommunications center, including
broadcast transmitters, for the Navy. AID apparently found that these
projects were not relevant experience, and Cosmos itself has presented
no evidence to demonstrate that the experience it gained from these
projects directly relates to the specific work required under this RFP.
Moreover, the record shows the clear superiority of Harris' proposal in
terms of applicable experience so that these two projects alone would
not, in our view, significantly narrow the firms' respective standings,
even assuming that the projects do reflect relevant experience.
Accordingly, we find no merit in Cosmos' protest of the evaluation
results with respect to experience.
Regarding personnel qualifications, we first note that the record
shows that the overseas experience of Harris' proposed personnel exceeds
that of Cosmos' personnel. Further, given the superiority of Harris'
proposal under the other evaluation factors, and since Cosmos at most
could have received only four additional points under this criterion,
there is no basis to conclude that any misevaluation under this
criterion could have prejudiced Cosmos by depriving the firm of an award
to which it was otherwise entitled. See Employment Perspectives,
B-218338, June 24, 1985, 85-1 CPD Paragraph 715; Lingtec, Inc.,
B-208777, Aug. 30, 1983, 83-2 CPD Paragraph 279. We therefore find no
merit to Cosmos' assertion that the qualifications of its proposed
personnel were misevaluated to the firm's prejudice.
Finally, Cosmos asserts that AID failed to conduct meaningful
discussions with the firm because AID did not specifically point out the
inadequacies perceived in Cosmos' experience and personnel
qualifications. Cosmos contends that it was incumbent on the agency to
advise Cosmos of any weakness or deficiency in its proposal and to
afford the firm an opportunity to revise its proposal accordingly.
Generally, oral or written discussions are required to be held with
all offerors within a competitive range. Such discussions must be
meaningful and, in order for discussions to be meaningful, agencies must
point out weaknesses, excesses or deficiencies in proposals unless doing
so would result in disclosure of one offeror's approach to another or
result in technical leveling when the weakness or deficiency was caused
by a lack of diligence or competence. See Joule Engineering Corp., --
Reconsideration, B-217072.2, May 23, 1985, 64 Comp. Gen. . . . , 85-1
CPD Paragraph 589.
Here, the solicitation expressly requested extensive information
concerning a firm's specific and relevant experience on similar
projects. /2/ As stated previously, Cosmos submitted a "capabilities
brochure" with its proposal which appears to be a complete statement of
its experience. Under these circumstances, we agree with AID's apparent
determination that the inadequacies in Cosmos' proposal were weaknesses
in the actual experience of the firm that could not be remedied during
discussions, instead of inadequacies in Cosmos' demonstration of its
experience in its proposal. /3/ See Cotton & Co., B-210849, Oct. 12,
1983, 83-2 CPD Paragraph 451. We therefore find no abuse of discretion
by the agency in not conducting more extensive discussions than it did.
The protest is denied.
Harry R. Van Cleve
General Counsel
(1) The procurement was financed by an AID loan to the government of
Liberia. Prior to the enactment of Subtitle D of the Competition in
Contracting Act (CICA), 31 U.S.C.A. Section 3551 et. seq. (West Supp.
1985), we decided bid protests based on our authority to adjust and
settle government accounts and to certify balances in the accounts of
accountable officers under 31 U.S.C. Section 3526 (1982). Thus, we
declined to review protests over the award of contracts by foreign
governments using AID loan funds because we viewed the funds involved as
exclusively those of the foreign government since the loan is an
obligation of the foreign government to be repaid with interest. See
Niedermeyer-Martin Co., 59 Comp. Gen. 74 (1979), 79-2 CPD Paragraph 314.
Under CICA, our authority is no longer based upon our "account
settlement" authority, but rather is based on whether the complaint
concerns a procurement contract for property or services by an executive
agency. See 31 U.S.C.A. Section 3551(1) (West Supp. 1985). Since this
procurement is being conducted by AID, a federal agency, we have
jurisdiction to consider the protest. See T.V. Travel, Inc., et al.,
B-218198.6 et al., Dec. 10, 1985, 65 Comp. Gen. . . . , 85-2 CPD
Paragraph 640; Artisan Builders, B-220804, Jan. 24, 1986, 65 Comp.
Gen. . . . , 86-1 CPD . . . .
(2) We need not address Cosmos' contention that meaningful
discussions were not conducted concerning the firms' proposed personnel
since, as discussed above, any deficiency in this regard clearly was not
prejudicial to Cosmos in any event.
(3) We also note that Cosmos does not indicate how it could have
upgraded its proposal in this area, other than stating generally that it
could easily have strengthened and augmented its proposal in this
regard.
FILE: B-220000.2 85-2 CPD 585 DATE: November 21, 1985
MATTER OF: Swager Communications, Inc.
DIGEST:
CONTRACTS - PROTESTS - BASIS FOR PROTEST REQUIREMENT
1. Protest that consists primarily of a series of questions
about the conduct of the procurement which contain no specific
allegations of improper conduct by the agency does not state any
adequate legal basis for protest.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTOR
2. To the extent that a protest letter can be read as raising
specific bases for protest the issues raised are untimely, as the
protest was not filed within 10 working days after the bases for
protest were known.
Swager Communications, Inc. protests the Agency for International
Development's (AID) contract award to Harris Corporation under request
for proposals No. 85-R-0669-0134. The procurement was conducted on a
brand name or equal basis for broadcasting equipment and related
services for the Liberian Rural Communications Network. We dismiss the
protest.
Swager primarily raises a series of questions concerning various
aspects of the procurement, in which Swager was a competitor. These
questions generally concern the agency's decision to cancel a prior
solicitation for the equipment, the agency's request for a second round
of best and final offers under the current solicitation, and the
contents of Harris' proposal. We find that this series of questions
does not state any adequate legal basis for protest.
Our Bid Protest Regulations require that a protest clearly state
legally sufficient grounds of protest. 4 C.F.R. Sec. 21.1(e) (1985).
Swager's series of questions simply requests information about the
circumstances of the procurement, the agency's reasons for its actions,
and Harris' proposal. Such questions do not state a valid basis for
protest because they contain no allegation of specific improper conduct
by the agency that would provide a basis for legal objection to the
procurement procedures followed. In this connection, we note that the
protester has the burden of proving its case, and this Office does not
conduct investigations for the purpose of establishing whether a
protester may have a valid basis for protest. See William A. Stiles
III--Reconsideration, B-215922.3, Feb. 19, 1985, 85-1 C.P.D. P 208.
Further, to the extent that Swager's correspondence can be read as
raising specific bases of protest, we consider the issues raised to be
untimely. For example, Swager contends that the model MW-1 OB
transmitter offered by Harris is not suitable to Liberia's moist climate
and that the Liberian government has had numerous unsolvable problems
with Harris' transmitters in the past. Swager thus implies that Harris'
transmitter cannot properly be considered as equal to the brand name
transmitter specified in the solicitation. We consider this issue
untimely because Swager indicates that it knew, prior to the the request
on September 9, 1985, for a second round of best and final offers, that
the evaluation committee considered Harris' transmitter acceptable. 1/
Our regulations require that protests based on anything other than an
apparent impropriety in a solicitation be filed within 10 working days
after the basis of protest is known or should have been known. 4 C.
F.R. Sec. 21.2(a) (2). Swager has not satisfied that requirement here,
as it did not file this protest until November 13, 1985.
In addition, Swager contends that the agency should have awarded the
contract under the original solicitation, or at the latest, after the
first round of best and final offers. Swager obviously knew this basis
for protest no later than the date the second round of best and final
offers was requested. Therefore, this allegation also is untimely.
We note that Swager has recited a number of facts about the results
of the agency's evaluation of Swager's proposal. The protester has not
alleged, however, that its proposal was evaluated improperly.
Accordingly, we find no basis for our review of the matter.
The protest is dismissed.
Ronald Berger
Deputy Associate
General Counsel
1/ After receipt of initial proposals, the agency informed Harris that
the model MW-1 OB transmitter it offered was unacceptable. AID
instructed Harris that it must propose an acceptable transmitter in its
best and final offer. Harris did propose a substitute transmitter in
its best and final offer, but also protested the agency's rejection of
the model MW-1 OB to the agency and this Office. The protests were
withdrawn after AID informed Harris that it considered the substitute
transmitter acceptable. It thus appears that the transmitter found
acceptable by the agency was not the model MW-1 OB, as the protester
believes.
FILE: B-219999.2 85-2 CPD 276
DATE: September 6, 1985
MATTER OF: Aviation Contractor Employees, Inc. -- Request for
Reconsideration
CONTRACTORS - RESPONSIBILITY - DETERMINATION - REVIEW BY GAO -
AFFIRMATIVE FINDING ACCEPTED
DIGEST:
Prior dismissal of protest concerning low bidders' ability to perform
satisfactorily under below-cost bids is affirmed since protest involves
a challenge to affirmative determinations of responsibility which GAO
generally will not review. Although GAO will review such protests where
bidders' compliance with definitive responsibility criteria is
challenged, there is no support for the protester's contention on
reconsideration that the solicitation at issue contains definitive
responsibility criteria.
Aviation Contractor Employees, Inc. (ACE) requests reconsideration of
our decision to dismiss its original protest, B-219999, filed on August
22, 1985. ACE's protest challenged award to any other bidder under
solicitation No. DABT01-85-B-3003, issued by the Army for rotary wing
flight training at Fort Rucker, Alabama. We affirm the prior dismissal.
In its original protest, ACE contended that the bid prices of the
four lower bidders were too low to allow them to perform satisfactorily.
Briefly, ACE maintained that their bid prices were below the actual
costs of employee compensation which the successful contractor would be
required to incur pursuant to the collective bargaining agreement in
force.
We dismissed the protest because in effect ACE challenged any
affirmative determination of responsibility which the Army might make
regarding the lower bidders, a matter which we will not review absent a
showing that the contracting officer may have acted fraudulent or in bad
faith, or that definitive responsibility criteria in the solicitation
have not been met. Bid Protest Regulations, 4 C.F.R. Section
21.3(f)(5) (1985); Freund Precision, Inc. -- Reconsideration,
B-216620.2, Jan. 4, 1985, 85-1 CPD Paragraph 19. Neither exception was
alleged in ACE's initial protest. In any event, the submission or
acceptance of a below-cost bid, standing alone, is not improper,
assuming the offeror is found responsible, although contracting officers
are expected to take appropriate action to ensure that the contractor
does not recover any resultant losses through change orders or
otherwise. Wall Colmonoy Corp., B-217361, Jan. 8, 1985, 85-1 CPD
Paragraph 27.
In its request for reconsideration, ACE characterizes its original
protest as a challenge to whether below-cost bidders comply with
definitive responsibility criteria in the solicitation. A definitive
responsibility criterion is an objective standard of responsibility,
such as a particular level of specific experience, that a bidder must
possess as a prerequisite to award. Bay Decking Co., Inc., B-216248,
Jan. 22, 1985, 85-1 CPD Paragraph 77. Here, the solicitation required
only that bidders submit bid prices based on various functions to be
performed under the solicitation. ACE offers no support for its
contention that the solicitation contains definitive responsibility
criteria, and we see no basis on which to conclude that it does.
The prior decision is affirmed.
/s/ Harry R. Van Cleve
General Counsel
File: B-219998.8
88-2 CPD 243
DIGEST
PROCUREMENT
Bid Protests
GAO Procedures
Preparation costs
DECISION
FILE: B-219998.2
DATE: February 18, 1986
MATTER OF: Integrity Management International, Inc.
CONTRACTS - NEGOTIATION - REQUESTS FOR PROPOSALS - SPECIFICATIONS -
SITE INSPECTION, CONFERENCES, ETC. - ATTENDANCE OPTIONAL
1. Protest that agency's refusal to permit unlimited site visits
precludes submission of intelligent proposal is denied where
solicitation contains sufficient information to prepare proposals and
there is no obligation on the part of the agency to accommodate
individual preferences of every prospective offeror by providing
unlimited access to facilities for site visitations.
CONTRACTS - NEGOTIATION - COMPETITION - EQUALITY OF COMPETITION -
INCUMBANT CONTRACTOR'S ADVANTAGE
2. Contracting agency has no obligation to compensate for advantages
of incumbent, advantages which are not the result of preferential or
unfair government action in order to equalize the competitive position
of all potential offerors.
ADVERTISING - ADVERTISING V. NEGOTIATION - ADVERTISING WHEN FEASIBLE
AND PRACTICABLE
3. The use of sealed bidding is not appropriate under the
Competition in Contracting Act of 1984 where award will be made on the
basis of technical as well as price-related factors.
Integrity Management International, Inc. protests the Army's refusal
to allow unlimited access to food service facilities for site visits
under request for proposals (RFP) No. DABT51-85-R-0025, which was issued
by the Army as part of a cost comparison under Office of Management and
Budget Circular A-76 to determine whether mess attendant services at
Fort Bliss, Texas, should be contracted out.
We deny the protest.
The solicitation contained the following clause entitled "Site Visit
(Apr. 1984)," as set forth at Federal Acquisition Regulation (FAR), 48
C.F.R. Section 52.237-1 (1984):
"Offerors or quoters are urged and expected to inspect the site
where services are to be performed and to satisfy themselves
regarding all general and local conditions that may affect the
cost of contract performance, to the extent that the information
is reasonably obtainable. In no event shall failure to inspect
the site constitute grounds for a claim after contract award."
Immediately following that clause the RFP stated that a preproposal
conference and site visit were scheduled on July 25 and 26 at Fort Bliss
and provided that the scheduled site visits were to provide offerors
"the opportunity to observe the facilities and equipment." In response
to requests by Integrity and two other firms to schedule individual
visits, the contracting officer determined that no site visits would be
allowed except as set forth in the RFP.
Integrity contends that the Army did not comply with the site visit
clause because prospective offerors were limited to a brief walk through
the areas where services are to be performed. The protester maintains
that the site visit clause allows unlimited access by offerors to work
areas during meal times so that offerors can "satisfy themselves" as to
conditions that may affect performance. There are 19 Fort Bliss dining
facilities under the solicitation and, according to the protester, an
offeror needs to spend time in each facility during meal periods in
order to prepare a proper budget for its proposal.
The Army advises that no individual site visits were scheduled so as
to assure that all offerors would view the facilities under the same
circumstances and to permit it to provide all questions and answers in
writing to all offerors whether or not they attended the visit. The
Army also says that individual site visits would interfere with health
and safety conditions and that scheduling such visits would be an
unreasonable burden since 88 firms received the solicitation. Finally,
the Army maintains that the solicitation contains adequate information
to allow offerors to prepare intelligent proposals.
There is no obligation on the part of the agency to accommodate the
individual preferences of every prospective offeror by providing
unlimited access to facilities for the purpose of site visitations.
BECO Corp., B-217573, May 15, 1985, 85-1 CPD Paragraph 548. Moreover,
the clause in question does not mandate unlimited access as Integrity
suggests, but merely urges prospective offerors to inspect the work site
so as to avail themselves of reasonably obtainable information that may
affect contract performance.
We also note that the protester does not state what kind of
information it would gain from unlimited access that is not already
available. The solicitation, for instance, contains daily estimates of
work volume, hours of operation and detailed serving schedules for each
facility. The solicitation also contains sample menus, cleaning and
housekeeping schedules and detailed descriptions of other services to be
performed by mess attendant personnel. Finally, the solicitation
indicates the number and type of feeding lines, such as short order or
cafeteria, and for each facility, its feeding capacity and the square
footage of kitchen, dining, and storage areas. Based on this
information, we do not see how the Army's refusal to allow unlimited
site visits affected the protester's ability to prepare an adequate
proposal.
Integrity also argues that the Army's restriction of site visits
gives the incumbent /1/ a competitive advantage. A contracting agency
has no obligation to compensate for advantages enjoyed by an incumbent,
where those advantages are not the result of preferential or unfair
government action, in order to equalize the competitive position of all
potential offerors. John Morris Equipment and Supply Co., B-218592,
Aug. 5, 1985, 85-2 CPD Paragraph 128. Here, the agency has provided a
reasonable explanation of its rationale for limiting site visits, and
there is no evidence of preferential or unfair government action in
favor of the incumbent.
Finally, in a letter received after Integrity had commented on the
Army's report, the protester argues that the solicitation should have
been "advertised" rather than "negotiated." The protester contends that
the use of "negotiated procedures" for food service procurements is
inappropriate. As we explain below, we dismiss this issue without
requesting a separate report from the Army.
In the past there was a statutory preference for formal advertising;
negotiation was authorized only where formal advertising was not
feasible or practicable and where one of several other circumstances was
present. See 10 U.S.C. Section 2304(a) (1982). Our concern when a
protester challenged the decision to negotiate was whether the agency
had a legally supportable basis for that decision. Saxon Corp.,
B-216148, Jan. 23, 1985, 85-1 CPD Paragraph 87. The Competition in
Contracting Act of 1984 (CICA), 10 U.S.C.A. Section 2304(a)(2) (West
Supp. 1985), however, changed the basis for using formal advertising
(now called "sealed bids") as opposed to negotiation (now called
"competitive proposals"). Agencies are instructed by CICA to solicit
sealed bids if time permits, the award will be based on price, it is not
necessary to conduct discussions and there is a reasonable chance of
receiving more than one sealed bid. 10 U.S.C.A. Section 2304(a)(2)( A).
An agency is to request competitive proposals if any of the four listed
conditions are not met. 10 U.S.C.A. Section 2304(a)(2)(B).
One of the conditions under section 2304(a)(2)(A) is that "the award
will be made on the basis of price and other price-related factors."
Under the protested solicitation, award will not be based solely on
price and price-related factors, but also on technical evaluation
factors including management capability, organization and staffing.
Integrity does not question the agency's use of factors other than
price. Accordingly, in these circumstances it appears that the Army
properly solicited competitive proposals.
The protest is denied.
Harry R. Van Cleve
General Counsel
(1) Some of the mess attendant services under the solicitation, such
as housekeeping, are currently contracted out, while food preparation
and serving are currently done in-house by government personnel.
FILE: B-219997.2 85-2 CPD 465 DATE: October 25, 1985
MATTER OF: Advanced Electronic Applications, Inc.--
Reconsideration
DIGEST:
CONTRACTS - PROTESTS - ALLEGATIONS - UNSUBSTANTIATED
1. Where protester has furnished nothing which establishes that
contracting agency knew that licensing agreement which formed
basis for sole-source determination was not firm, GAO is unable to
conclude that sole-source determination lacked a reasonable basis
when made.
CONTRACTS - PROTESTS - CONTRACT ADMINISTRATION - NOT FOR RESOLUTION
BY GAO
2. Where contract provides choice of equipment to be furnished,
whether contracting agency accepts one or the other is a matter of
contract administration rather than contract modification that
went beyond the original procurement that we would consider.
Advanced Electronic Applications, Inc. (AEA), requests
reconsideration of our decision in Advanced Electronic Applications,
Inc., B-219997, Sept. 25, 1985, 85-2 C.P.D. P .
We affirm the decision.
In the decision, we held that thy sole-source justification for the
contract with Technical Systems Group (TSG) was not rendered invalid by
the subsequent failure of TSG and AEA to reach a subcontract agreement
after the contract was awarded to TSG. In tnat regard, the Navy had
indicated that, when it made the sole-source award, it understood that
AEA had granted TSG an exclusive license to market the component
involved to the government. We stated that, while events did not
materialize as the parties expected, the government's contract with TSG
did provide for the use of equipment "equivalent" to that of AEA and
that compliance with the contract concerned a matter of contract
administration which is not for our consideration.
In the request for reconsideration, AEA contends that the exclusive
license was conditional upon TSG's and AEA's agreeing upon terms.
However, AEA has furnished nothing which establishes that the Navy knew
when the sole-source award was made that the license was conditional.
It is well established that the protester has the burden of proving its
case. Unico, Inc., B-216592, June 5, 1985, 85-1 C.P.D. P 641. In the
circumstances, we are unable to conclude that the sole-source
determination lacked a reasonable basis when made.
Further, AEA contends that we should not have dismissed the protest
as a matter of contract administration because it involves a
modification that went beyond the original procurement that we would
consider. however, as indicated in the earlier decision, the contract
as awarded did provide for the utilization of equipment equivalent to
that of as an alternative to the AEA equipment. Therefore, we do not
consider the situation to involve a modification outside the terms of
the contract. Thus, whether the Navy receives and accepts equipment
tnat it determined to be equivalent to the AEA product is a matter of
contract administration.
Harry R. Van Cleve
General Counsel
FILE: B-219997 85-2 CPD 339
DATE: September 25, 1985
MATTER OF: Advanced Electronic Applications, Inc.
CONTRACTS - NEGOTIATION - SOLE-SOURCE BASIS - JUSTIFICATION -
TIMELINESS OF DETERMINATION
1. When, at the time sole-source justification was made, contracting
agency had every reason to expect that contract would be performed as
anticipated, justification was valied and was not rendered invalid when
events did not materialize under the contract as parties expected.
CONTRACTS - PROTESTS - CONTRACT ADMINISTRATION - NOT FOR RESOLUTION
BY GAO
2. Compliance with contract performance obligation concerns a matter
of contract administration which is the responsibility of the procuring
activity, not GAO.
DIGEST:
Advanced Electronic Applications, Inc. (AEA), protests that contract
N68786-85-C-3012, awarded by the Department of the Navy to Technical
Systems Group (TSG), should be terminated and resolicited on a
competitive basis.
WE dismiss the protest pursuant to section 21.3(f) of our Bid Protest
Regulations, 4 C.F.R. Section 21.3(f) (1985), because, based upon
information provided by the Navy, it is clear that the matter is not for
our consideration.
The subject contract is a firm, fixed-price supply contract for seven
training systems, including among their components "environmental
communications simulators (ECS)." The contract specifications provide
that the ECS shall be specified AEA model numbers "or equivalent."
Salient features are stated for an equivalent ECS.
The Navy reports that the contract was awarded on a sole-source basis
because TSG alone possessed one of the key components of the training
system and the only known capability of meeting the required operational
date. The Navy also reports that it had discovered from a market survey
it made that AEA was the only manufacturer that had a readily available
ECS capable of meeting the training system requirements. Further, the
Navy states that AEA had granted TSG an exclusive licensing agreement to
market the ECS to the government.
After award of the contract, negotiations between AEA and TSG for a
subcontract for AEA to furnish the ECS failed when AEA refused to agree
to progress payments and to certain Federal Acquisition Regulation
clauses. As a result, TSG terminated the negotiations for the
subcontract. TSG has proposed to the Navy, and the Navy has accepted,
an offer of an equivalent ECS.
Now, because the negotiations between AEA and TSG have failed, AEA
contends that the sole-source justification has become invalid and that
there should be a competition for the program instead of allowing TSG to
perform.
However, a sole-source justification is not rendered invalid by
subsequent events. At the time the justification was made, the Navy had
every reason to expect that the contract would be performed as
anticipated and, thus, the justification was valid at that time. While
events did not materialize as the parties expected, the contract as
awarded did provide for the utilization of equipment "equivalent" to
that of AEA as an alternative to AEA equipment. Compliance with the
contract performance obligation concerns a matter of contract
administration which is the responsibility of the procuring activity,
not our Office. Container Products Corporation, B-218556, June 26,
1985, 85-1 C.P.D. Paragraph 727. Since we have concluded that the
protest is not for our consideration, it is not necessary to address the
Navy's argument that the protest is untimely.
/s/ Robert M. Strong
Deputy Associate General Counsel
FILE: B-219996 85-2 CPD 268
DATE: September 4, 1985
MATTER OF: Desert Dry Waterproofing Contractors
DIGEST:
BONDS - BID - DEFICIENCIES - POWER OF ATTORNEY AUTHORITY
An agency properly determined a bid bond defective and the bid
nonresponsive where the bonding agent who signed the bond did not have a
valid power of attorney to bind the surety. The protester's lack of
negligence does not permit correction of the bond after bid opening to
render the bid responsive.
Desert Dry Waterproofing Contractors (Desert Dry) protests the
rejection of its low bid as nonresponsive because of a defective bid
bond under invitation for bids No. DABT56-85-B-0037, issued by the Army.
Desert Dry asserts that because the defective bid bond was not the
result of the bidder's negligence, and the bonding agent is willing to
correct the defects, Desert Dry should be permitted to submit a valid
bid bond after bid opening.
We dismiss the protest.
The Army determined the bond defective because the bonding agent's
power of attorney had expired, and the bond was submitted on a form
which did not permit issuance of a bond in the amount entered. Desert
Dry asserts that it should be permitted to correct the bid bond after
bid opening.
A bid bond is a type of security that assures that a bidder will not
withdraw its bid within the time specified for acceptance and, if
required, will execute a written contract and furnish payment and
performance bonds. The purpose of a bid bond is to secure the liability
of the surety to the government in the event the bidder fails to fulfill
these obligations. Montgomery Elevator Co., B-210782, Apr. 13, 1983,
83-1 C.P.D. Paragraph 400. The sufficiency of a bid bond depends on
whether the surety is clearly bound by its terms. Truesdale Construction
Co., Inc., B-213094, Nov. 18, 1983, 83-2 C.P.D. Paragraph 591. Under
the law or suretyship, no one incurs a liability to pay the debts or to
perform the duties of another unless that person expressly agrees to be
bound. Andersen Construction Co.; Rapp Constructors, Inc., 63 Comp.
Gen. 248 (1984), 84-1 C.P.D. Paragraph 279.
When required, a bid bond is a material part of a bid and therefore
must be furnished with the bid. Baucom Janitorial Services, Inc.,
B-206353, Apr. 19, 1982, 82-1 C.P.D. Paragraph 356. To permit waiver of
a bid bond requirement or of a failure to furnish a proper bid bond
would make it possible for a bidder to decide after opening whether or
not to have its bid rejected, cause undue delay in effecting
procurements, and create, through the subjective determinations by
different contracting officers of whether waiver is appropriate,
inconsistencies in the treatment of bidders. Minority Enterprises,
Inc., B-216667, Jan. 18, 1985, 85-1 C.P.D. Paragraph 57. When a bidder
supplies a defective bond, the bid itself is rendered defective and must
be rejected as nonresponsive. Hydro-Dredge Corporation, B-214408, Apr.
18, 1984, 84-1 C.P.D. Paragraph 400. The determinative question as to
the acceptability of a bid bond is whether the bid documents establish
that the bond could be enforced if the bidder did not execute the
contract. It is not proper to consider the reasons for the
nonresponsiveness, whether due to mistake or otherwise. A.D. Roe
Company, Inc., 54 Comp. Gen. 271 (1974), 74-2 C.P.D. Paragraph 194.
In this case, the bid bond was signed by a bonding agent who lacked a
valid power of attorney to bind the surety. The Army properly rejected
the bid as nonresponsive based on the submission of an inadequate bid
bond. Hydro-Dredge Corporation, B-214408, supra. Desert Dry's
contention that since the defect was not due to its negligence, Desert
Dry should be permitted to reform the bond constitutes an impermissable
attempt to render a nonresponsive bid responsive after bid opening
through change or explanation. Minority Enterprises, Inc., B-216667,
supra.
We have reached this decision on the basis of the protester's
submission, without requesting an agency report, since the protest on
its face is legally without merit. Design Engineers, B-214658, Apr.
10, 1984, 84-1 C.P.D. Paragraph 408.
Robert M. Strong
Deputy Associate General
Counsel
FILE: B-219994 85-2 CPD 683
DATE: December 18, 1985
MATTER OF: Rotair Industries, Inc.
CONTRACTS - REQUESTS FOR QUOTATIONS - EVALUATION - TECHNICAL
ACCEPTABILITY - SCOPE OF GAO REVIEW
1. Agency's refusal to approve protester as a source for critical
helicopter spare parts is not unreasonable where the protester's offer
of an alternate product is rejected as technically unacceptable because
of failure to furnish all requested data and where the protester has now
shown that the requirement for this data in the solicitation was
unreasonable. The fact that another agency has previously approved the
alternate product does not, by itself, indicate that the procuring
agency's rejection of it was improper.
CONTRACTS - REQUESTS FOR QUOTATIONS - PURCHASES ON BASIS OF
QUOTATIONS - EVALUATION PROPRIETY
2. Failure of agency immediately to apprise protester of
informational deficiencies in its offer is not unreasonable where
procurement was conducted under small purchase procedures, since these
procedures do not contemplate the type of discussions and the
opportunity to submit revised proposals that otherwise may occur in a
negotiated procurement.
CONTRACTS - REQUESTS FOR QUOTATIONS - SPECIFICATIONS - RESTRICTIVE -
"APPROVED SOURCE" REQUIREMENT - QUALIFICATION OF OFFERORS
3. When a nonapproved source for helicopter spare parts has an
opportunity to submit a quote and its offer is the subject of a complete
technical evaluation, rejection does not constitute de facto debarment.
Rotair Industries, Inc., protests the award of a contract to Sikorsky
Aircraft, a division of United Technologies Corporation, under request
for quotations (RFQ) No. DLA500-85-Q-0959, issued by the Defense
Industrial Supply Center (DISC), Philadelphia, Pennsylvania, a field
activity of the Defense Logistics Agency (DLA). Rotair contends that
the contracting agency improperly rejected its offer for helicopter
spare parts and that by delays in the source approval process, has
effectively debarred Rotair.
We deny the protest.
The solicitation, issued on December 26, 1984, under the small
purchase procedures, Federal Acquisition Regulation (FAR) 48 C.F.R.
subpart 13.1 (1984), sought quotations for various quantities of plain,
rod end bearings, Sikorsky Aircraft part number 70103-11007-042.
Offerors were permitted to submit quotes for alternate products as
defined in a standard clause, entitled "Products Offered," incorporated
by reference into the solicitation. The clause requires offerors of
such products to submit all drawings, specifications, or other data
necessary to enable the government to determine whether the alternate
product is either identical to or physically, mechanically,
electronically, and functionally interchangeable with the product
specified. The clause warns offerors that the failure to furnish all
necessary information may preclude consideration of the offer, stating
that the alternate product will be considered technically unacceptable
if acceptability cannot be determined before award.
Rotair, which had requested a copy of the RFQ following a Commerce
Business Daily synopsis on February 4, 1985, submitted a quote for the
primary quantity of 60 bearings and forwarded copies of drawings to the
contracting activity. Subsequently, on March 7, Rotair tendered a
quotation for both the primary and alternate quantities (90 and 120) of
bearings. This quotation, submitted on standard form 18, specified that
Rotair was offering an alternate product. At the same time, pursuant to
a request from the agency, Rotair submitted another drawing and referred
the contracting activity to supporting Sikorsky standards and
specifications that it had previously submitted to DISC's Directorate of
Technical Operations, apparently in connection with an ongoing attempt
to become an approved source; this attempt preceded the protested
procurement.
Between April and July 1985 DISC conducted a technical evaluation and
ultimately concluded that Rotair's offer was not acceptable for six
different reasons. Consequently, the contracting officer rejected
Rotair's offer, notified Rotair of this decision by letter dated August
17, and awarded the contract to Sikorsky on August 12.
As noted above, Rotair had previously attempted to become an approved
source for this particular bearing under agency procedures for approving
products before the issuance of a solicitation. Under these, all user
military services must approve a source before the agency can acquire
items from it. Although Rotair submitted a data package to DISC's
competition advocate in October 1984, it was not until February 1985
that DLA forwarded Rotair's data to the user services. Subsequently,
both the Air Force, noting that certain additional data was needed to
identify the rod end material, and the Navy approved Rotair's bearing.
The Army, however, requested additional information and, the record
indicates, has yet to issue a final determination regarding the
acceptability of Rotair's product.
Rotair first argues that DISC should not have rejected its offer,
since the Air Force and the Navy already have approved it as a source
for the product that DISC found technically unacceptable. Moreover,
Rotair states it has successfully manufactured helicopter parts for 25
years, and has routinely delivered these parts to all three military
services.
In our opinion, the agency's decision was not unreasonable.
Procuring activities are responsible for evaluating the data supplied by
offerors and ascertaining if it provides sufficient information to
determine the acceptability of the product in question. Rowe
Industries, B-215881, Oct. 24, 1984, 84-2 CPD Paragraph 464. We will
not disturb the agency's technical determination unless it is shown to
be unreasonable, which the protester must affirmatively prove.
Panasonic Industrial Co., B-207852.2, Apr. 12, 1983, 83-1 CPD Paragraph
379.
Here, the RFQ warned Rotair of the necessity to furnish all pertinent
information regarding its product to facilitate its technical
evaluation. In addition, the agency requested supplemental data after
receiving Rotair's initial quotation in February. Despite these
requests, the record discloses that Rotair's data package was
incomplete. Specifically, the record indicates that Rotair failed to
provide (1) sufficient supporting specifications for Sikorsky's product
(2) information as to the origin of drawings on test of materials (the
technical evaluation noted that if these were Rotair's they were not
provided, and if they were Sikorsky's, they were source controlled);
(3) the latest OEM (original equipment manufacturer's) drawing for the
assembled item; (4) documentation of tracability/configuration audit
capability; (5) proof of production of the same or technically similar
items; and (6) a statement on the existence and availability of
critical processes and quality assurance procedures.
Rotair alludes to the Air Force's and Navy's approval of it as a
source for the bearings as evidence that DISC's insistence on additional
information was unreasonable. In this regard, the Air Force, while
giving its approval, stated that additional data was required to
identify the rod end material, and the Army has not yet completed its
evaluation. Other than referring to the approval by the Air Force and
Navy, Rotair does not specifically address DLA's contention that without
additional data it could not determine whether Rotair's product was
functionally equivalent to Sikorsky's. Since the bearing being procured
is part of a helicopter rotor blade, and is considered critical, we
cannot find that DISC's rejection of Rotair's proposal as technically
unacceptable -- because of lack of complete documentation -- was
unreasonable. See Pacific Sky Supply, Inc., B-219749, Oct. 11, 1985,
85-2 CPD Paragraph 406.
Rotair next contends that the procedures used to evaluate its product
were deficient. Specifically, Rotair refers to DISC's allegedly
improper failure to apprise it at the earliest time of informational
deficiencies, as outlined in an internal review memorandum dated April
22, 1985. Had it been informed of and given an opportunity to correct
these deficiencies, Rotair alleges it could have provided the additional
data required before DISC awarded the contract to Sikorsky in August.
Rotair also refers to what it alleges is an inordinate amount of time --
more than 200 days -- between submission of its technical package to
DISC's competition advocate in October 1984 and rejection of its quote
for the protested procurement the following August. Rotair alleges that
had this evaluation been conducted in an efficient manner, its product
could have been approved before the subject RFQ was issued or, at the
latest, before award. These two failures, Rotair concludes, violated
statutory and regulatory requirements for full and open competition and
acquisition planning. Moreover, Rotair contends, the agency's actions
have resulted in its de facto debarment from this procurement.
Contracting agencies have considerable discretion in the
establishment of testing procedures. In the absence of a showing that
the agency's actions lack a reasonable basis, we will not substitute our
judgment. JGB Enterprises, Inc., B-218430, Apr. 26, 1985, 85-1 CPD
Paragraph 479. In this case, we believe DISC acted reasonably in
evaluating all offers submitted in response to the RFQ, giving each
offer due consideration and not making an award until the technical
review of submitted data had been completed. The alleged failure
immediately to apprise Rotair of the informational deficiencies in its
offer does not change this conclusion. As noted above, the solicitation
was issued under the small purchase procedures, which do not contemplate
the type of discussions or the opportunity to submit revised proposals
that occur in a full scale negotiated procurement. In this context, we
do not believe that the agency acted improperly by rejecting Rotair's
offer without affording it an opportunity to submit additional
information. See M.F. Services, Inc., B-210954, Jan. 20, 1984, 84-1 CPD
Paragraph 87.
Nor does the considerable time consumed by the prequalification
testing of Rotair's product provide a basis on which to sustain the
protest. The agency points out that the source approval program
conducted by its competition advocate is separate from, and subject to
different requirements than, technical evaluation for a particular
procurement. Moreover, it does not appear that Rotair even advised the
contracting officer of its ongoing attempt to become an approved source
except to refer to a binder of materials submitted to a different agency
official. In any event, Rotair was not prejudiced by the agency's
failure to complete the prequalification, since it was able to submit a
quote and have its alternate product evaluated for this particular
procurement. For the same reason, i.e., that Rotair was able to
compete, we cannot conclude that the firm was effectively debarred from
this procurement.
Finally, we note that the specific requirements for full and open
competition cited by Rotair, 10 U.S.C.A. Section 2304 (West Supp. 1985)
and FAR Section 6.101, Federal Acquisition Circular, No. 84-5, April 1,
1985, became effective after the issuance of this RFQ. Additionally,
these provisions are expressly inapplicable to contracts, such as this
one, awarded under small purchase procedures, where the standard is
maximum practicable competition. See 10 U.S.C.A. Section 2304(q).
We deny the protest.
Harry R. Van Cleve
General Counsel
FILE: B-219993.2 85-2 CPD 707
DATE: December 24, 1985
MATTER OF: Comet Cleaners Company
BIDS - INVITATION FOR BIDS - AMENDMENTS - FAILURE TO ACKNOWLEDGE -
BID NONRESPONSIVE
Bid is nonresponsive when it fails to acknowledge amendment that
changed payment clause from one providing for monthly payment based on
quantities in the contract subject to an adjustment in price if
quantities varied by plus or minus 5 percent to one providing for
payment based on the actual workload quantity.
Comet Cleaners Company (Comet) protests the rejection of its low bid
as nonresponsive under invitation for bids (IFB) No. DAKF23-85-B-0061
issued by Fort Campbell, Kentucky, for operation of a laundry/dry
cleaning facility.
We deny the protest.
Comet's bid was rejected as nonresponsive for failure to acknowledge
a material amendment and for failure to comply with an IFB provision
limiting the price for special one-day laundry service.
The amendment, among other things, changed the payment clause. Under
the original clause, the contractor was to receive a monthly payment
based on the quantities in the contract subject to an adjustment in
price if the quantities varied by plus or minus 5 percent. The
amendment deleted the plus or minus 5 percent adjustment provision and
provided instead that the monthly payment would be made for the actual
workload quantity.
As Comet points out, the amendment is more favorable to the
contractor from the standpoint of increased workload. Under the
amendment, the contractor is paid for the actual quantities services
whereas, under the original clause, the contractor is paid only for
extra quantities when they are 5 percent or more. Where a bidder fails
to acknowledge an amendment that results in a less stringent
requirement, the amendment usually may be waived as a minor informality.
Patterson Enterprises Ltd., B-207105, Aug. 16, 1982, 82-2 C.P.D.
Paragraph 133.
However, at the same time that the amendment is less stringent, it is
more onerous. Under the amendment, the payment to the contractor will
be reduced if the quantities are reduced at all whereas under the
original clause the contractor would have been entitled to the same
payment as long as the quantity reduction did not reach 5 percent.
Here, by failing to acknowledge the amendment, Comet has restricted the
government's right to reduce the price if there is any reduction in
workload. While it may be speculative as to whether the adjustment
provision will become operative, we consider the failure to acknowledge
the amendment as having a material effect upon the government's right to
adjustment. Where bids take exception to contract provisions, we have
considered the bids to be nonresponsive even though it is speculative
whether the government will exercise its rights under the provisions in
administering the contracts. Hewlett-Packard Co., B-216530, Feb. 13,
1985, 85-1 C.P.D. Paragraph 193. Although the failure to acknowledge
the amendment in this case may not have been deliberate, the effect of
the failure is the same as if it were. Accordingly, we agree with the
agency that Comet's bid was nonresponsive.
In view of our conclusion that the failure to acknowledge the
amendment rendered the bid nonresponsive, there is no need to address
the propriety of the other basis upon which the agency determined
Comet's bid to be nonresponsive.
Harry R. Van Cleve
General Counsel
FILE: B-219992.2 85-2 CPD 315
DATE: September 20, 1985
MATTER OF: Aul Instruments, Inc.
DIGEST:
BIDS - INVITATION FOR BIDS - CANCELLAATION - AFTER BID OPENING
ADMINISTRATIVE DETERMINATION
Agency decision to cancel brand name or equal solicitation and
resolicit is not unreasonable merely because of exposure of protester's
bid price where the brand name manufacturer did not receive the
solicitation, the synopsis published in the Commerce Business Daily was
misclassified, and only one responsive bid was received.
Aul Instruments, Inc. protests the cancellation of invitation for
bids (IFB) No. DAAB07-85-B-H034, a brand name or equal solicitation
issued by the Army for a PP-7462 power supply. We dismiss the protest.
The IFB listed a part manufactured by Christie Electric Corporation
as the brand name item. Christie did not submit a bid, however, and of
the three bids received, only one, the protester's, was found
responsive. After bid opening, Christie filed a protest with our Office
stating that (1) despite numerous requests to the contracting agency, it
had not received a copy of the IFB; and (2) the synopsis of the IFB
published in the Commerce Business Daily (CBD) had appeared under the
wrong category heading. The Army then decided to cancel, based on
Christie's absence from the competition and the fact that only one
responsive bid was received.
Because of the potential adverse impact on the competitive bidding
system of cancellation after bid prices have been exposed, a contracting
officer must have a compelling reason to cancel an IFB after bid
opening. Federal Acquisition Regulation (FAR), 48 C.F.R. Section
14.404-1 (1984); Dyneteria, Inc., B-211525.2, Oct. 31, 1984, 84-2 CPD
Paragraph 484. In considering cases involving cancellations, we
recognize that the contracting officer has broad discretion to decide
whether there is a compelling reason to cancel, and we limit our review
to determining whether the exercise of that discretion is reasonable.
Hoyer Construction Co. Inc., B-216825, Feb. 13, 1985, 85-1 CPD
Paragraph 194.
In this case, the protester argues that since it is prejudiced by
cancellation and resolicitation after its bid price has been exposed,
the IFB should not have been canceled. The essence of the Army's
exercise of discretion in deciding whether to cancel, however, is
balancing the impact of exposing bid prices against the need to remedy
the adverse effects on competition of the failure to solicit the brand
name manufacturer, the misclassification of the CBD notice, and the
submission of only one responsive bid. In a somewhat similar case, we
found no basis to object to an agency's decision to cancel and resolicit
given the cumulative impact of the agency's deletion of the incumbent
contractor from the bidders mailing list, the failure to synopsize in
the CBD, and the small number of manufacturers of the item being
procured. See Scott Graphics, Inc., et al., 54 Comp. Gen. 973 (1975),
75-1 CPD Paragraph 302. On the other hand, as the protester notes, in
cases with similar facts we have upheld the agency's decision not to
cancel the solicitation. See, E.G., Solon Automated Services, Inc., 63
Comp. Gen. 312 (1984), 84-1 CPD Paragraph 473. These cases indicate
that it is for the contracting agency in the first instance to decide
whether cancellation is justified, based on its assessment of how best
to preserve the integrity of the competitive bidding system, and that we
will not disturb that particular decision unless the protester is able
to show that it is unreasonable. See Hoyer Construction Co., Inc.,
B-216825, supra. Under the circumstances of this case, we find no basis
to object to the Army's decision to cancel and resolicit, since the
protester has neither alleged nor shown that the Army's exercise of
discretion here was unreasonable.
The protest is dismissed.
Seymour Efros
Associate General Counsel
FILE: B-219989, B-219989.2 85-2 CPD 668
DATE: December 16, 1985
MATTER OF: Information Ventures, Inc.; Harris Consultive Services
CONTRACTS - NEGOTIATION - COMPETITION - EQUALITY OF COMPETITION -
OFFEROR'S SUPERIOR ADVANTAGES - GOVERNMENT EQUALIZING DIFFERENCES
1. A procuring agency has no obligation to equalize a Firm's
competitive advantage because of cost savings that would result from the
firm's simultaneous performance of another government contract unless
such an advantage results from a preference or unfair action by the
contracting agency.
CONTRACTS - NEGOTIATION - CONFLICT OF INTEREEST PROHIBITIONS -
ORGANIZATIONAL
2. Reviewing abstracts of scientific literature for obvious errors
incident to converting them to magnetic tape, where contractor prepared
abstracts and submitted them to procuring agency under another contract,
does not rise to the level of substantive review that would impair a
contractor's objectivity and thus constitute an organizational conflict
of interest.
CONTRACTS - PROTESTS - ALLEGATIONS - UNSUBSTANTIATED
3. Protest alleging that an answer to a request for clarification
was used by the procuring agency to improve another offeror's proposal
is denied where the procurement record does not show that the answer was
used as the basis of questions posed to the other offeror or in
discussions with that offeror.
Information Ventures, Inc. (IVI) and Harris Consultive Services
protest the proposed award of a contract to Peters Technology Transfer,
Inc. under request for proposals (RFP) No. 7068, issued by the United
States Geological Survey (USGS), Department of the Interior. The
solicitation calls for abstracting water resources literature and making
magnetic tape copies of the abstracts for entry into a data base
maintained by the Water Resources Scientific Information Center of USGS.
The protesters contended that Peters had a number of unfair advantages
in the procurment.
We deny the protests in part and dismiss them in part.
The RFP, issued on May 20, 1985 was for a fixed price, indefinite
quantity contract with two 1-year options. It required offerors to
submit separate prices for (1) selecting and abstracting water resources
articles and papers and then converting the abstracts to magnetic tapes
and (2) converting printed abstracts provided by USGS to magnetic tapes.
The abstracts to be provided by the agency currently are prepared by
Peters under another USGS contract, (No. 14-08-0001-22825 (No. 22825),
which requires their preparation from federal government and
federally-fund reports.
The solicitation provided for evaluation of technical proposals in
three areas: Technical competence of key personnel, technical and
management approach, and organizational experience. The first two
factors were given approximately equal weight, and each was given twice
the weight of the third factor. The RFP also stated that price would be
considered in determining which proposal offered the greatest value, and
that between substantially equal technical proposals, price would be a
major factor in the selection.
Of the seven proposals submitted, those of IVI, Peters, and Harris
were determined to be within the competitive range. The USGS committee
evaluating the technical proposals gave them the following numerical
ratings: IVI, 100; Peters 97; Harris, 92. Although IVI and Peters
were closely ranked technically, Peters' total offered price was more
than 30 percent lower than IVI's, while Harris' price was more than 20
0percent higher than IVI's. USGS determined that Peters' price was fair
and reasonable and that an award to Peters was in the best interest of
the government.
IVI's Protest
IVI, the incumbent contractor, alleges that Peters, by virtue of its
incumbency on USGS contract No. 22825, has an unfair advantage in two
respects. First, the firm will presumably store the abstracts that it
types and submits to USGS under contract No. 22825 on magnetic or other
electronic media. When it receives those abstracts under the contract
at issue here, Peters will not have to retype them, but will only need
to make the changes required by USGS and convert the stored abstracts to
magnetic tape. Second, since the RFP states that the contractor must
review the abstracts provided by USGS for obvious errors, IVI argues
that Peters will not have to proofread and correct errors when it
prepares the abstracts under contract No. 22825. With these two
advantages, according to IVI, Peters can offer a price less than that of
other competitors.
Peters is responsible for the accuracy, completeness, format, and
syntax of abstracts submitted under contract No. 22825. Consequently,
it is not clear that it could reduce its cost by not proofreading those
abstracts until they are received back from USGS under the protested
contract, since to do so would risk rejection of the abstracts by USGS
under the first contract. We do agree with IVI that Peters would gain a
cost advantage from having to type the abstracts prepared under contract
No. 22825 only once. However, the government has no obligation to
equalize a competitive advantage that a firm may enjoy because of its
own particular business circumstances or because it gained experience
under a prior government contract unless the advantage results from a
preference or unfair action by the contracting agency. American
Preparatory Institute, B-218291, May 20, 1985, 85-1 CPD Paragraph 573;
Systems Engineering Associates Corp., B-208439, Jan. 31, 1983, 83-1 CPD
Paragraph 97. Thus the issue for our consideration is whether the
government unfairly participated in establishing any competitive
advantage that Peters enjoys.
We find no indication in the record that any advantage Peters may
have gained because of its incumbency on USGS contract No. 22825 was the
result of a preference or unfair action by USGS. IVI has not suggested,
and we are not aware of any evidence, that contract No. 22825 was
awarded to Peters in order to favor the firm in this procurement. The
work was not divided into two contractual efforts in order to assist
Peters -- two contracts have apparently been used for several years.
The mere fact that Peters may prepare and store the abstracts on
electronic media under contract No. 22825 does not establish that USGS
preferred Peters or acted unfairly toward the other offerors. Thus, we
deny this portion of IVI's protest.
IVI also contends that since Peters would be reviewing its own work
under the protested contract, an organizational conflict of interest
would be created. IVI presumably believes that Peters will be less
likely to correct obvious errors in USGS-supplied abstracts or to bring
other possible errors it might encounter to the attention of USGS
because this would reflect negatively on its preparation of the
abstracts under contract No. 22825. USGS responds that the issue of
potential conflict of interest is untimely since failure of a
solicitation to contain a conflict of interest provision must be raised
before the closing date for receipt of initial proposals. USGS further
argues that the solicitation provides for the contractor to return
government-provided abstracts for clarifications and to correct obvious
errors, but does not provide for contractor review for relevance and
content. USGS is to provide the substantive reivew.
Although a protest against the failure of a solicitation to contain a
conflict of interest provision would be untimely, the protest here is
not directed against the solicitation; rather, it alleges that a
conflict of interest arose from the award decision and that this
decision was improper for that reason. We see no basis for viewing this
as untimely.
The determination that an award to a particular firm would result in
an organizational conflict of interest must be made by the procuring
activity, since the agency has the responsibility for balancing the
government's competing interests in (1) preventing bias in the
performance of certain contracts that would result from a conflict of
interest, and (2) awarding a contract that will best serve the
government's needs to the most qualified firm. NAHB Research
Foundation, Inc., B-219344, Aug. 29, 1985, 85-2 CPD Paragraph 248. We
will not overturn such a determination unless shown to be unreasonable.
Id.
IVI has not established that the agency's determination that no
organizational conflict of interest exists because of Peters' incumbency
on USGS contract No. 22825 is unreasonable. Although Peters will
prepare the abstracts to be converted to magnetic tape, we do not
believe that the effort necessary under the protested contract to
discover typographical and other obvious errors rises to the level of a
substantive review which would impair Peters' objectivity. Reviewing
for obvious errors is a minor aspect of the contract work, incidental to
the contractor's job of converting the abstracts to magnetic tape.
Also, since Peters would have to correct the errors itself under this
contract, and presumably included an amount for this effort in its
proposed price, we do not believe that the firm would be less likely to
consider errors in abstracts it previously prepared than if another firm
prepared them. The mere fact of a prior or current contractual
relationship does not in itself create a conflict of interest. See
Varo, Inc., B-193789, July 18, 1980, 80-2 CPD Paragraph 44 at 7.
The protester next contends that the contracting officer, through a
clarification question, obtained information from IVI upon which
subsequent technical questions to Peters were based, thereby technically
leveling the proposals. USGS asked IVI whether its description of the
scope of literature for abstracting was based upon the RFP or on IVI's
experience under the prior contract. According to the agency, this was
intended to alert IVI to the fact that its understanding of the scope of
literature which USGS believed to be broader than that in the prior
contract, should be from the RFP. We find no evidence in the
procurement record, including clarification questions asked of other
offerors and negotiation summaries, that IVI's answer to the question
was communicated to any other offeror or used to improve Peters'
technical proposal.
IVI alleges in its comments on the agency's report that since one of
the key personnel Peters proposed to work on contract No. 22825 did not
authorized submission of her name, Peters may have proposed key
personnel without authority. IVI's allegation is mere speculation and
falls short of satisfying the protester's burden of affirmatively
proving its case. See Edward E. Davis Contracting, B-219524, Jan. 13,
1981, 81-1 CPD Paragraph 20. We deny the protest on the above bases.
IVI asserts that the requirement for separate pricing of two types of
work in the solicitation in some way benefits Peters and restricts
competition. Our Bid Protest Regulations, 4 C.F.R. Section 21.2(a)(1)
(1985), require protests against apparent solicitation improperieties to
be filed prior to the closing date for receipt of proposals. The
solicitation clearly required separate pricing of (1) abstracting water
resources articles and converting those abstracts to magnetic tape, and
(2) converting USGS-prepared abstracts to magnetic tape. Closing date
for receipt of proposals was June 17, 1985. IVI did not protest to our
Office until August 20, 1985. Thus, we find IVI's protest on this issue
to be untimely, and we dismiss it.
Harris' Protest
Harris initially filed comments on IVI's protest, stating that the
USGS had advised that it was entitled to do so as an interested party.
Subsequently, the firm stated that it intended its submission to be
considered as a separate protest, primarily because it was concerned
that IVI might withdraw its protest. Although we initially treated
Harris as an interested party, upon reconsideration we are treating
Harris as a separate protester.
Harris contends that Peters had an unfair competitive advantage and a
conflict of interest; it supports these contentions on the same grounds
as those advanced by IVI. We deny this portion of Harris' protest for
the reasons we denied IVI's protest.
In its comments on the agency's report on IVI's protest, Harris
presents an additional protest issue. Harris contends that it suffered
a competitive disadvantage in not having the same level of "strategic
business intelligence" about the procurement as IVI and Peters.
Apparently, Harris refers to the fact that IVI and Peters, as well as
individuals in those firms, have prepared abstracts under USGS contracts
for a number of years. Harris states that it learned of these facts
around the time of its first protest letter to our Office, dated August
29, 1985. The alleged advantages that both IVI and Peters had in the
competition were not presented as a ground for protest until October 18,
more than a month later.
Our Bid Protest Regulations require that in order to be timely, a
protest on the grounds other than an alleged impropriety in the
solication must be filed within 10 working days after the basis for
protest is known or should have been known. 4 C.F.R. Section 21.2(b)(
2). Harris did not protest the alleged advantages of IVI and Peters
within the time required, and we dismiss that portion of Harris'
protest.
We deny the protests in part and dismiss them in part.
Harry R. Van Cleve
General Counsel
Matter of: Norfolk Shipbuilding & Drydock Corporation Request for
Reconsideration
File: B-219988.8 86-2 CDP 445
Date: October 23, 1986
PROCUREMENT - BID PROTEST - GENERAL ACCOUNTING OFFICE PROCEDURES -
GENERAL ACCOUNTING OFFICE DECISIONS - RECONSIDERATION
Request for reconsideration is denied where protester raises no new
facts or legal arguments which were not previously considered.
Norfolk Shipbuilding and Drydock Corporation (Norfolk) requests that
we reconsider our decision in Norfolk Shipbuilding and Drydock Corp.,
B-219988.7, Sept. 26, 1986, 86-2 C.P.D. P . We denied Norfolk's claim
for proposal preparation costs and the costs of pursuing its protest,
including attorney's fees, following our denial in part and dismissal in
part of its protest, and our denial of its claim for costs, in Norfolk
Shipbuilding and Drydock Corp., B-219988.3, Dec. 16, 1985, 85-2 C.P.D. P
667.
We deny the request for reconsideration.
Norfolk had protested the termination of its contract No.
DAAK01-85-C-B250, awarded by the Army Materiel Command (AMC) for the
construction of four vessels. AMC had terminated Norfolk's contract
because of uncertainty whether the solicitation's purchase description
adequately reflected the agency's needs. In our December 16, 1985
decision, we found no basis to question AMC's decision to terminate the
contract. We also dismissed as premature Norfolk's additional protest
basis that AMC would not change the government's requirements when it
issued a revised solicitation. In view of our decision denying in part
and dismissing in part Norfolk's protest, we denied its claim for
proposal preparation costs and the costs of filing and pursuing its
protest.
In a claim filed with our Office July 24, 1986, Norfolk sought to
recover proposal preparation costs, and the costs of filing and pursuing
its protest, because the Army had transferred the procurement to the
Navy's Military Sealift Command (MSC), which issued a solicitation
Norfolk considered substantially different from the one under which
Norfolk was originally awarded a contract. Norfolk contended that it
could not recover its proposal costs incurred in responding to the
original Army solicitation, which required vessel design, by responding
to the Navy solicitation, which required the supply of existing vessels.
Norfolk asserted that the ability to engage in a recompetition was
crucial to our earlier denial of its claim for proposal preparation
costs.
In our September 26, 1986 decision, we noted five major differences,
enumerated by the Army, between the new specification and that which was
in Norfolk's contract. We pointed out that a prerequisite to
entitlement to proposal preparation costs as a result of cancellation of
a solicitation (and termination of the resultant contract) was a showing
that the agency's actions with respect to the claimant's offer were
arbitrary or capricious. We noted our conclusion in our December 16,
1986, decision that the Army's decision to terminate Norfolk's contract
for the convenience of the government was reasonable in light of the
Army's need to revise solicitation specifications to reflect its actual
needs. We also noted that since we had determined the solicitation
cancellation was proper, Norfolk did not qualify for the reimbursement
of its costs. We pointed out that the ability of Norfolk to engage in a
recompetition played no part in our earlier decision to deny its claim
for costs, contrary to Norfolk's assertion. Furthermore, we noted that
Norfolk's assertion that the solicitation issued by the Navy was
substantially different from that under which it was awarded a contract
only served to support the Army's position that revised specifications
were required to reflect changes in the government's actual needs.
In its request for reconsideration, Norfolk contends that we did not
give any weight to internal Army documents, enclosed with its claim,
which Norfolk believes show the Army's decision to terminate its
contract was arbitrary. The documents indicate that the procuring
activity disagreed with AMC headquarters' direction to terminate
Norfolk's contract.
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) (1986). Information not
previously considered refers to information which was overlooked by our
Office or information to which the protester did not have access when
our initial decision was pending. See Federal Sales Service, Inc.--
Request for Reconsideration, B-222798.3, July 23, 1986, 86-2 C.P.D. P
99.
We did not overlook the internal Army documents which Norfolk
submitted with its claim. The documents merely showed internal
dissension within the Army over the decision to terminate. They did not
show that the Army's decision to terminate Norfolk's contract was
arbitrary. Rather, as we indicated in our denial of Norfolk's claim,
the Army's decision to terminate Norfolk's contract was reasonable in
light of the Army's need to revise solicitation specifications to
reflect its actual needs, as shown by the five major differences in the
new specifications. Norfolk did not dispute the differences. Indeed,
Norfolk contended that the new solicitation was substantially different
from that under which it was awarded a contract. As we noted earlier,
this only serves to support the Army's position that revised
specifications were required.
Since Norfolk has raised no new facts or legal arguments which were
not previously considered, its request for reconsideration is denied.
Harry R. Van Cleve
General Counsel
Matter of: Norfolk Shipbuilding & Drydock Corporation
File: B-219988.7
Date: September 26, 1986
CONTRACTS - PROTESTS - PREPARATION - COSTS - NONCOMPENSABLE
Claim for proposal preparation costs and costs of pursuing protest is
denied where there is no showing that the government acted arbitrarily
or capriciously with respect to the claimant's offer.
Norfolk Shipbuilding and Drydock Corporation (Norfolk) has submitted
a claim for proposal preparation costs and the costs of pursuing its
protest, including attorney's fees, following our denial in part and
dismissal in part of its protest, and our denial of its claim for costs,
in Norfolk Shipbuilding and Drydock Corp., B-219988.3, Dec. 16, 1985,
85-2 C.P.D. P 667. We deny the claim. Norfolk had protested the
termination of its contract No. DAAK01-85-C-B250, awarded by the Army
Materiel Command (AMC) for the construction of four vessels. AMC had
terminated Norfolk's contract because of uncertainty whether the
solicitation purchase description adequately reflected the agency's
needs. We found no basis to question AMC's decision to terminate the
contract. We also dismissed as premature Norfolk's additional protest
basis that AMC would not change the government's requirements when it
issued a revised solicitation. In view of our decision denying in part
and dismissing in part Norfolk's protest, we denied its claim for
proposal preparation costs and the costs of filing and pursuing its
protest.
Norfolk now seeks to recover proposal preparation costs, and the
costs of filing and pursuing its protest, because the Army has
transferred the procurement to the Navy's Military Sealift Command
(MSC), which has issued a solicitation Norfolk considers substantially
different from the one under which Norfolk was originally awarded a
contract. Norfolk contends that it cannot recover its proposal costs
incurred in responding to the original Army solicitation, which required
vessel design, by responding to the Navy solicitation, which requires
the supply of existing vessels. Norfolk asserts that the ability to
engage in a recompetition was crucial to our earlier denial of its claim
for proposal preparation costs.
The Army reports that it transferred the procurement to the Navy's
MSC because of the Navy's obvious expertise in buying vessels, and its
ability to award a contract before the end of the fiscal year, when
funds for the procurement would expire. The Army states that the ships
remain an Army requirement although the Navy is doing the actual
purchasing, and that the specification has been changed to reflect the
Army's current needs. The Army enumerates five major differences
between the new specification and that which was in Norfolk's contract
as follows:
1. The previous specification called for the logistics support
vessel to carry both liquid and dry cargo. The current
specification requires dry cargo only.
2. The previous specification called for new vessels or
conversions of existing vessels; the current requirement is for
existing vessels delivered after 1967.
3. The crew size was 29 and is now 20.
4. The minimum deck area was 10,000 sq. ft. and is now 8,000
sq. ft.
5. The ship speed was 12 knots and is now 10 knots.
A prerequisite to entitlement to proposal preparation costs as a
result of cancellation of a solicitation (and termination of the
resultant contract) is a showing that the agency's actions with respect
to the claimant's offer were arbitrary or capricious. See John C.
Kohler Co., B-218133, Apr. 22, 1985, 85-2 C.P.D. P 460. We concluded in
Norfolk Shipbuilding and Dry Dock Corp., B-219988.3, supra, that the
Army's decision to terminate Norfolk's contract for the convenience of
the government was reasonable in light of the Army's need to revise
solicitation specifications to reflect its actual needs. The recovery
of proposal preparation costs was accordingly inappropriate. Similarly,
since we determined the solicitation cancellation was proper, Norfolk
did not qualify for the reimbursement of its cost of pursuing the
protest. Bid Protest Regulations, 4 C.F.R. Sec. 21.6(d) and (e) (1986);
see Manufacturing Sciences Corp., B-220567, Dec. 24, 1985, 85-2 C.P.D.
P 712. The ability of Norfolk to engage in a recompetition played no
part in our decision to deny its claim for costs, contrary to Norfolk's
assertion.
We also dismissed as premature Norfolk's protest that AMC would issue
a revised solicitation which would be similar to the cancelled
solicitation and would not reflect changes in the government's
requirements, since AMC had not yet issued a revised solicitation.
Norfolk's present assertion that the solicitation issued by the Navy is
substantially different from that under which it was awarded a contract
only serves to support the Army's position that revised specifications
were required to reflect changes in the government's actual needs.
The claim is denied.
Harry R. Van Cleve
General Counsel
FILE: B-219988.4 85-2 CPD 519 DATE: November 4, 1985
MATTER OF: Galveston Houston Company
DIGEST:
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - PREPARATION - COSTS -
DENIED
Recovery of proposal preparation costs and the costs of
pursuing a protest is inappropriate wnere the remedy afforded the
protester is the opportunity to compete in the procurement.
Galveston Houston Company (Galveston) has submitted a claim for
proposal preparation costs and the costs of pursuing its protest,
including attorney's fees, following our September 20, 1985, dismissal
of its protest. The firm had protested the award of a contract for the
construction of four vessels to Norfolk Shipbuilding and Drydock Corp.
(Norfolk) under request for proposals (RFP) No. DAAJ10-85-R-A003, issued
by the Army Materiel Command (AMC). We dismissed Galveston's protest as
academic after AMC notified us that it had terminated Norfolk's contract
and would recompete tne requirement.
We deny Galveston's claim for proposal preparation costs and for the
costs of pursuing the protest, including attorney's fees.
Galveston claims that under the provisions of the Competition in
Contracting Act of 1984, it is entitled to proposal preparation costs
and the costs of pursuing its protest. The basis for Galveston's claim
is that AMC acted arbitrarily by disqualifying the firm for failing to
meet a vessel construction requirement that was not stated in the RFP.
Galveston maintains that the fact that AMC terminated Norfolk's contract
following the filing of the firm's protest here establishes that the
agency knew it acted arbitrarily. The firm concludes that since AMC was
aware that it failed to follow federal procurement regulations in
awarding the contract, it should not be permitted "to escape liability"
for its actions by terminating the protested contract without paying
such costs.
The Competition in Contracting Act of 1984 (CICA), 31 U.S.C. Sec.
3554 (West Supp. 1985), and our Bid Protest Regulations, 4 C.F.R. Sec.
21.6 (1985), provide authority for Mur Office to grant propMsal
preparation costs and the costs of pursuing a protest. We will,
however, only allow the recovery of proposal preparation costs where the
contracting agency has unreasonably excluded the protester from the
competition and no other remedy enumerated in sections 21.0 (a) (2-5) of
our Bid Protest Regulations is appropriate. 4 C.F.R. Sec. 21.6(e). Two
of the remedies enumerated include terminating the protested contract
and recompeting the requirement, which AMC has decided to do here. See
4 C.F.R. Sec. 21.6 (a). Therefore, the recovery of proposal preparation
costs is inappropriate. See Federal Properties of R.I., Inc.,
B-218192.2, May 7, 1985, 85-1 C.P.D. P 508.
Further, our Regulations limit the recovery of the costs of filing
and pursuing a protest to situations where the protester is unreasonably
excluded from the procurement, except where this Office recommends that
the contract be awarded to the protester and the protester receives the
award. 4 C.F.R. Sec. 21.6(e). We have construed this to mean that
where, as here, the protester is given the opportunity to compete for
the award, recovery of the costs of filing and pursuing the protest is
inappropriate. See Federal Properties of R.I., Inc., B-218192.2, supra;
The Hamilton Tool Company, B-218260.4, Aug. 6, 1985, 85-2 C.P.D. P 132.
We therefore also deny the protester's request for the reimbursement of
such costs.
Harry R. Van Cleve
General Counsel
FILE: B-219988.3 85-2 CPD 667
DATE: December 16, 1985
MATTER OF: Norfolk Shipbuilding and Drydock Corporation
GENERAL ACCOUNTING OFFICE - JURISDICTION - CONTRACTS - DEFAULTS AND
TERMINATIONS - REVIEW OF PROCEDURES LEADING TO AWARD
1. GAO will review a termination for convenience when it is based on
an agency determination that the initial contract award was improper.
CONTRACTS - TERMINATION - CONVENIENCE OF GOVERNMENT - PROPRIETY OF
TERMINATION U
2. Agency's decision to terminate a contract for the convenience of
the government is reasonable in light of agency's need to revise
solicitation specifications to reflect its actual needs.
CONTRACTS - PROTESTS - MOOT, ACADEMIC, ETC. QUESTIONS - FUTURE
PROCUREMENTS
3. Where agency terminates contract because it determines that the
solicitation must be revised and the requirement resolicited, protest
that resolicitation will not reflect revisions is premature where
revised solicitation has not been issued.
Norfolk Shipbuilding and Drydock Corporation (Norfolk) protests the
termination of contract No. DAAK-01-85-C-B250 awarded to Norfolk by the
Army Materiel Command (AMC) under request for proposals (RFP) No.
DAA510-85-R-A003. The RFP solicited offers for the construction of four
vessels. AMC decided to terminate Norfolk's contract on the ground that
there is uncertainty whether the solicitation purchase description,
which contains several hundred technical requirements, adequately
reflects the agency's needs.
The protest is denied in part and dismissed in part.
Two of the six offerors who submitted proposals in response to the
RFP protested to this Office that AMC improperly rejected their
proposals on the basis of a vessel design requirement not stated in the
RFP. AMC states that these protests revealed that the evaluation of
proposals, based upon a solicitation purchase description which
inadequately reflected the agency's needs, resulted in an essentially
noncompetitive acquisition. AMC also states that while reviewing the
procedures leading to award, it realized that in written negotiations,
the agency failed to point out many deficiencies in certain offerors'
proposals. Because of these defects in the procurement, AMC was unable
to determine that Norfolk's proposal was the most advantageous to the
government and, therefore, terminated the firm's contract for the
convenience of the government. AMC intends to issue a new solicitation
after completing its review of the technical requirements contained in
the prior solicitation.
Norfolk maintains that the contract termination and resolicitation
are improper. Norfolk points out that AMC determined the firm's
proposal to be the most advantageous to the government and, therefore,
awarded it the contract. Norfolk asserts that to date there has been no
showing that the firm's proposal does not meet the agency's needs or
that those needs have changed. Norfolk also contends that AMC should
not now be allowed to use its subsequent determination that negotiations
were inadequate and that the solicitation specifications require
revision as a basis by which to justify contract termination.
As a general rule, our Office will not review an agency decision to
terminate a contract for the convenience of the government, since by law
this is a matter of contract administration for consideration by a
contract appeals board or by a court of competent jurisdiction.
Amarillo Aircraft Sales and Services, Inc., 63 Comp. Gen. 568 (1984),
84-2 C.P.D. Paragraph 269. However, we will review a termination for
convenience where, as here, it is based upon an agency determination
that the initial contract award was improper. Amarillo Aircraft Sales
and Services, Inc., 63 Comp. Gen. 568, supra; EMS Development Corp.,
B-207786, June 28, 1982, 82-1 C.P.D. Paragraph 631; Michael O'Connor,
Inc.; Free State Builders, Inc., B-183381, July 6, 1976, 76-2 C.P.D.
Paragraph 8.
Termination of a contract is permissible where an agency discovers
subsequent to award of the contract that the solicitation under which
the requirement was procured does not adequately reflect the
government's needs. Hemford Company, B-216811, Feb. 8, 1985, 85-1 C.P.
D. Paragraph 167; EMS Development Corporation, B-207786, June 28, 1982,
82-1 C.P.D. Paragraph 631. We have recognized that a solicitation may
be canceled where the record shows that the solicitation specifications
were deficient. Marmac Industries, Inc., B-203377.5, Jan. 8, 1982, 82-1
C.P.D. Paragraph 22.
Here, AMC reports that it contemplates changes to the specifications
because the solicitation specifications apparently did not adequately
reflect its actual needs. AMC believes that proposal evaluation based
upon such inadequate specifications essentially resulted in a
noncompetitive procurement. The protester has not shown the agency's
position to be incorrect. Therefore, we find no basis to question AMC's
decision to terminate the contract. See EMS Development Corporation,
B-207786, supra.
With regard to Norfolk's contention that it is improper for AMC to
cancel the requirement on the basis of information discovered after
award, we have held that an agency may properly determine to cancel a
solicitation (and terminate the resultant contract) no matter when the
information justifying the cancellation first surfaces. See Chrysler
Corp., B-206943, Sept. 24, 1982, 82-2 C.P.D. Paragraph 271; Marmac
Industries, Inc., B-203377.5, supra.
Further, to the extent Norfolk challenges the agency's intention to
revise the solicitation, this basis for protest is premature. McCarthy
Manufacturing Co., Inc., B-193069, Mar. 7, 1979, 79-1 C.P.D. Paragraph
158. At this time, AMC has not issued a revised solicitation;
accordingly, neither this Office nor Norfolk has any basis to question
the agency's stated position. Advance Energy Control Systems, Inc.,
B-201249, May 20, 1981, 81-1 C.P.D. Paragraph 392; McCarthy
Manufacturing, Co., Inc., B-193069, supra.
Norfolk also argues that a resolicitation of the requirement creates
an impermissible auction since Norfolk's price has been exposed. In
this case, however, the competitive situation on resolicitation will not
be based solely on the exposed price because AMC intends to revise the
specifications and because the time delay of almost 1 year from issuance
of the original solicitation should affect each offeror's price.
Moreover, an impermissible auction is not created by a resolicitation
after prices are exposed where those actions are in accordance with
government legal requirements. See N.V. Phillips Gloellampenfabriken,
B-207485.3, May 3, 1983, 83-1 C.P.D. Paragraph 467; American
Shipbuilding Company, B-207218, B-207218.2, Nov. 9, 1982, 82-2 C.P.D.
Paragraph 424.
Norfolk requests proposal preparation costs and the costs of filing
and pursuing its protest. In view of our decision denying in part and
dismissing in part Norfolk's protest, its claim for these costs is
denied. Digital Radio Corp., B-216441, May 10, 1985, 85-1 C.P.D.
Paragraph 526. Blinderman Construction Company -- Reconsideration,
B-218028, Feb. 20, 1985, 85-1 C.P.D. Paragraph 214.
Harry R. Van Cleve
General Counsel
FILE: B-219987.3 86-1 CPD 332 DATE: April 7, 1986
MATTER OF: W. H. Smith Hardware Co.--Request for
Reconsideration
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
RECONSIDERATION REQUESTS - ERROR OF FACT OR LAW - NOT ESTABLISHED
Review of an agency's decision to cancel a solicitation is
based on whether that action is supported by the record, not on
whether the agency listed every possible justification for the
cancellation. Where protester in its reconsideration request does
not show that original decision approving the agency's
cancellation was in error, fact that there may have been another
unstated reason for canceling the solicitation provides no basis
for reconsideration.
W. H. Smith Hardware Company requests reconsideration of our
decision, W. H. Smith Hardware Co., B-219987.2, Jan. 21, 1986, 86-1 CPD
P 62, in which we denied Smith's protest of the cancellation of
solicitation No. DLA700-85B-1167, issued by the Defense Logistics Agency
(DLA). DLA canceled the solicitation after bids were opened, when it
determined that the solicitation did not contain adequate quality
inspection procedures.
We deny the request for reconsideration.
In our original decision we concluded that DLA had properly canceled
the solicitation after it found that the inspection scheme in the
solicitation was inadequate to insure that defective parts were not
accepted.
The protester argues that it has now discovered that the agency did
not cancel the solicitation because its inspection scheme was
inadequate, but because the agency actually wanted to change the
procurement from one set aside for small businesses to an unrestricted
one.
Our review of a decision to cancel a solicitation is based on whether
the action is supported by the record, not on whether the agency listed
every possible justification for the cancellation. See Military Base
Management, Inc., B-216309, Dec. 4, 1984, 84-2 CPD P 619. We concluded
in our original decision that DLA had the reguired compelling reason to
cancel the solicitation because of the inadequate guality control
procedures and Smith has not shown that our conclusion was in error or
that the reissued solicitation does not contain a more stringent quality
inspection provision. We have been informed by DLA, in fact, that the
solicitation has been reissued with higher level inspection procedures.
Thus, it is irrelevant whether there may have been another, unstated
reason for canceling the solicitation.
The reguest for reconsideration is denied.
Harry R. Van Cleve
General Counsel
FILE: B-219987.2 86-1 CPD 62
DATE: January 21, 1986
MATTER OF: W.H. Smith Hardware Company
BIDS - INVITATION FOR BIDS - CANCELLATION - AFTER BID OPENING -
JUSTIFICATION - INACCURATE SPECIFICATIONS
1. Determination that solicitation's inspection requirements needed
to be upgraded based on user complaints and agency tests constitute a
compelling reason to cancel a solicitation since award under the
original solicitation would not meet the agency's needs.
BIDS - INVITATION FOR BIDS - CANCELLATION - AFTER BID OPENING -
ADMINISTRATIVE DETERMINATION
2. An agency properly may cancel a solicitation after bid opening
regardless of when information justifying cancellation first surfaces.
BIDS - MISTAKES - CORRECTION - AFTER BID OPENING - RULE
3. The exception in the Federal Acquisition Regulation to allow for
the late modification of an "otherwise successful bid" is not applicable
to the low bid submitted in response to a defective solicitation. A bid
which is modified after opening to cure solicitation defect cannot be
accepted because contracts awarded under sealed bidding procedures must
be made on the same terms as offered all bidders.
W.H. Smith Hardware Company protests the cancellation after bid
opening of solicitation No. DLA700-85-B-1167, issued by the Defense
Construction Supply Center (DCSC) for 2,923 aircraft fueling hose
assemblies. DCSC canceled the solicitation in order to alter the
specifications to require higher-level contractor quality control.
Smith contends that the cancellation was improper and requests that the
solicitation be reinstated and the contract awarded to it as the low
bidder.
We deny the protest.
The solicitation was issued on April 30, 1985 and amended on July 25
to increase the quantity and change the specifications. On the August 9
bid opening date, DCSC received three bids, the lowest of which was
submitted by Smith. Meanwhile on May 17, based on a number of
complaints about the poor quality of the fueling hoses, DCSC's Quality
Assurance Specialist requested the Navy to test two samples of the hose.
On September 6, the Navy reported negative test results on the samples.
Based on this information, the quality specialist determined that
serious deficiencies existed in the fueling hoses that created potential
safety hazards and endangered mission capability. He recommended that
the solicitation be amended to upgrade the quality of the fueling hose
assemblies by requiring a higher-level contractor quality control
specified in MIL-I- 45208. Since the quality specialist made the
recommendation after bid opening, DCSC was unable to amend the
solicitation. Instead, it canceled the solicitation with the intention
of issuing a new solicitation that would include the more stringent
inspection requirement.
Smith contends that cancellation was unnecessary, because poor
workmanship was the cause of deficiencies existing in the fueling hose
assemblies. It argues that more stringent inspection procedures are not
needed to correct the problems. According to Smith, a hose size change
which was incorporated into the solicitation by the July 25 amendment
was sufficient to alleviate the fitting problems DCSC is experiencing
with its present hoses. In addition, Smith insists that if the agency
wishes to include MIL-I-45208 inspection procedures, it will comply with
those requirements under its current bid with no increase in price.
Contracting officials have broad discretion in determining whether a
solicitation should be canceled and the requirement reprocured. Power
Equipment Inc., B-213428.3, Oct. 22, 1984, 84-2 CPD Paragraph 427. Due,
however, to the potential adverse impact on the competitive bidding
system of canceling an invitation after bid prices have been exposed,
contracting officers, in the exercise of their discretionary authority,
must find that a compelling reason exists for the cancellation.
Commercial Envelope Mfg. Co., Inc., B-213272, Feb. 15, 1984, 84-1 CPD
Paragraph 206. The presence of a requirement in a solicitation which is
not adequate to meet an agency's needs can constitute a compelling
reason to cancel a solicitation. See Energy Efficient Improvements,
B-218014.3, Apr. 24, 1985, 85-1 CPD Paragraph 466. The fact, however,
that the terms of a solicitation are inadequate in some way does not by
itself constitute a compelling reason. North American Laboratories of
Ohio, Inc., 58 Comp. Gen. 724 (1979), 79-2 CPD Paragraph 106. A
compelling reason exists only where award under the deficient
solicitation would prejudice other bidders or such award would not serve
the government's actual needs. Summerville Ambulance, Inc., B-179049,
July 1, 1985, 85-2 CPD Paragraph 4.
Here, we conclude that the agency did have a compelling reason to
cancel the solicitation. It is clear from the record that the agency
believed that the inspection scheme in the solicitation was inadequate
to insure that it did not accept defective fueling hoses. Its
determination was based both on numerous complaints it received from
users in the field regarding the fuel hoses supplied under prior
contracts, and on the negative results of tests conducted by the Navy.
The protester insists that the problems were the result of a poor
match of the hose and coupling by the prior contractor and argues that
the problem would be cured by the specification change incorporated by
the July 25 amendment together with the original inspection
requirements. The Navy test report indicates that the fueling hoses
were defective in a number of respects (weakness of adhesion at the tube
layer, wrinkles and irregularities in the reinforcement fabric etc.) not
just in the fit of the hose and coupling. While it may be true, as the
protester contends, that the fueling hoses would not fail if made in
accordance with the solicitation specification, in view of the
possibility that failure could well result in personnel injury and
considering the past problems with this item, we do not think that the
agency acted unreasonably in deciding that the inspection provisions in
the solicitation do not meet its needs and canceling the solicitation.
In any event, Smith contends that the agency should not be permitted
to cancel the solicitation after bid opening when it knew or should have
known of the defects in the fueling hoses in time to amend the
solicitation prior to the bid opening. While it is unfortunate that the
agency did not have the testing completed earlier, the fact that
problems with the quality of the fueling hoses had been known prior to
bid opening does not preclude cancellation after opening, if the
solicitation proves inadequate. Ridq-U-Rak, Inc. -- Reconsideration,
B-207124.2, Sept. 24, 1982, 82-2 CPD Paragraph 272.
Although Smith is not convinced, that higher level inspection
procedures are necessary, it argues that it should be permitted to
perform the contract under the initial solicitation in accordance with
the agency's new inspection requirements. It states that it will amend
its bid to include the more stringent inspection requirements at its
current bid price. The protester concludes that such an amendment of
its already low bid can be accepted pursuant to the Federal Acquisition
Regulation, 48 C.F.R. Section 2.214-7(e) (1984), which states that a
late modification of an otherwise acceptable bid which makes the terms
more favorable to the government may be accepted at any time. The
prerequisite for permitting a late modification is that the bid as
originally submitted must already be the low acceptable bid. The W.H.
Smith Hardware Co., B-219405.2, Oct. 25, 1985, 85-2 CPD Paragraph 460.
Since here the agency has decided that the solicitation under which the
protester's bid was submitted did not fully represent the agency's
actual minimum needs, it follows that the acceptance of any of the bids,
including the protester's bid, would result in an award which would not
serve the governments actual needs. Consequently, a bid which is
responsive to a defective solicitation is not an "otherwise successful
bid" to which 48 C.F.R. Section 52.214-7 applies. In essence, the
protester wants the agency to award it a contract whose material terms
are at variance with the IFB. Such an award would be improper since the
award of a contract pursuant to the statute governing sealed bidding
must be made on the same terms as offered all bidders. 10 U.S.C.A.
Section 305(b)(3). (West Supp. 1985); U.S. Materials Co., B-216712,
Apr. 26, 1985, 85-1 CPD Paragraph 471.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-219985 85-2 CPD 666
DATE: December 16, 1985
MATTER OF: Southwest Regional Laboratory
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION - CRITERIA
- ORDER OF IMPORTANCE
1. When a request for proposals is silent as to the relative
importance of cost and technical factors, they must be considered
approximately equal in weight.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
EVALUATION - ADMINISTRATIVE DISCRETION - COST/TECHNICAL TRADEOFFS
2. Procurement officials have broad discretion in determining the
tradeoff between cost and technical advantages in competing proposals,
and GAO will only review such determinations for rationality and
consistency with the established evaluation factors.
CONTRACTS - PROTESTS - ALLEGATIONS - BIAS - UNSUBSTANTIATED
3. Protest that alleged conflict of interest by agency procurement
personnel tainted the evaluation of proposals is denied where it is
based only on inference and supposition.
Southwest Regional Laboratory (SWRL) protests the proposed award of a
contract to Far West Laboratories (FWL) under request for proposals
(RFP) No. NIE-R-85-0003, issued by the National Institute of Education
(NIE). SWRL protests that it should have received the award since its
proposal had been found technically acceptable and its price was low.
SWRL also protests that the evaulation process was tainted by a conflict
of interest because some members of the review panels that evaluated
offers had impermissible connections with FWL.
We deny the protest.
Background
The RFP contemplated the award of a 5-year cost-reimbursement type
contract for the operation of educational research laboratories to serve
each of 8 geographic regions of the United States. SWRL and FWL were
the only firms that submitted proposals for the Western Region.
NIE assigned teams of reviewers to evalute proposals in each of the
regions. In the Western Region, three separate tiers of review were
conducted. In "Tier I", a 6-member "peer review panel" conducted a
detailed technical review of proposals, applying the evaluation criteria
established in the RFP. The review panel scored the proposals in two
ways: they assigned numerical point scores based on the RFP evaluation
factors, and assigned a rank of first or second, according to their
evaluation of the relative merits of the two proposals. The panel
issued an initial decision memo which established that both offerors
were in the competitive range and identified issues that required
further clarification. At this point, the technical scores slightly
favored the SWRL proposal.
The panel then submitted written questions to both offerors for
clarification, and the offerors submitted their responses. Reviewers
also conducted site visits with both firms at this time. The Tier I
panel met to discuss the responses to the clarification questions and
the site visit reports, and to reevaluate the proposals. The Tier I
panel issued a final decision memo, summarizing the evaluations made by
all of the reviewers. Every reviewer ranked FWL as first, and favored
FWL slightly in the numerical score. FWL's final score of 92.17 points
gave it a 9.33 percent advantage over SWRL's final score of 84 points.
"Tier II" of the review was conducted after the Tier I evaluation
process was completed. Described by the agency as a program review,
this stage was for the purpose of evaluating how NIE had conducted the
technical peer review (i.e., Tier I).
After submission of best and final offers, "Tier III" was conducted
by a review panel of independent consultants invited by NIE to further
review all of the materials submitted in the competition and to respond
to specific questions about the two offers. The results of this third
stage of review were considered along with the results of the Tier I
evaluation and cost as the basis for the agency's final selection.
Although SWRL had initially proposed the higher cost, its best and final
offer reflected a substantial reduction and was the low offer. With a
total estimated cost of $11,457,664 for the 5-year period, it was 5.89
percent lower than FWL's $12,281,003.
The contracting officer concluded that award to FWL would be in the
government's best interest. He determined that FWL's technical
superiority outweighed SWRL's cost advantage.
Propriety of Source Selection
SWRL protests that its proposal was rated sufficiently high to
mandate award to it on the basis of its low price. The protester bases
this argument on two alternative theories: first, that the evaluation
criteria expressed in the RFP make cost the paramount element in the
evaluation, and second, that award must be made on the basis of cost,
either because the proposals were essentially equal technically or
because there was not a sufficient difference in the technical merits of
the two proposals to justify paying FWL's higher cost.
Proposal evaluation criteria were set out in section VII of the RFP.
Subsection "A", "Evaluation of Technical Proposals," listed specific
selection criteria that would be used to evaluate technical proposals,
advised offerors that the maximum number of points for all selection
criteria was 100, and indicated the maximum number of possible points
that could be awarded for each criterion. Subsection "B," "Evaluation
of Cost Proposals," stated that cost proposals would be reviewed
separately from technical proposals, and that cost would not be the sole
factor in determining the award. It further stated that cost proposals
would be reviewed to determine whether the budget for the project was
adequate to support the project activities, and whether the costs
proposed were reasonable in relation to the objectives of the project.
The protester argues that since the RFP stated that cost would not be
the sole factor in making the award determination, but did not indicate
either what "other factors" (in addition to cost) were to be considered,
or state the relative importance of cost to the technical factors, cost
must be the paramount element in the evaluation of proposals. /1/ We
disagree. Where an RFP indicates that price will be considered, without
explicitly indicating its importance in relation to technical factors,
cost and technical factors must be considered approximately equal in
importance. Fabrics Plus, Inc., B-218546, July 12, 1985, 85-2 CPD
Paragraph 46. In our view, the RFP statement here, that cost would not
be the sole factor for award, is clearly consistent with such a result.
Accordingly, we find no merit to the protester's position concerning the
relative importance of cost.
We turn then to SWRL's argument that the competition was so close
that the proposals were essentially equal technically, and that cost
should therefore be considered as the determinative factor, or,
alternatively, that FWL's slightly higher technical score does not
justify paying the firm's higher proposed cost.
In considering protests such as this, we do not conduct a de novo
review of technical proposals or make an independent determination of
their acceptability or relative merit, as the evaluation of proposals is
the function of the contracting agency. Cadillac Gage Co., B-209102,
July 15, 1983, 83-2 CPD Paragraph 96. Our review is limited to
examining whether the evaluation was fair and reasonable and consistent
with the stated evalution criteria. Id. The fact that the protester
disagrees with the selection official's conclusion does not in itself
render the evaluation unreasonable. Kaman Sciences Corp., B-190143,
Feb. 10, 1978, 78-1 CPD Paragraph 117.
Here, while it is apparent that the agency considered both offerors
to be qualified to perform the contract, the record does not indicate
that they were evaluated as essentially equal technically. Rather, each
member of the Tier I review panel scored FWL's proposal higher than
SWRL's proposal, and recommended FWL for award. The results of the Tier
III review supported this conclusion. Thus, the record indicates that
the agency analyzed each proposal for areas of strengths and weaknesses
and concluded that FWL's proposal was superior technically. We find,
therefore, that the record simply does not support the protester's claim
that the two proposals were of equal technical merit.
However, SWRL argues further that even if the offers were not
essentially equal technically, the difference between them was not
significant enough to allow the agency to accept FWL's higher price.
Again, we disagree.
We have recognized that in a negotiated procurement, procurement
officials have broad discretion in determining the manner and extent to
which they will make use of the technical and cost evaluation results.
Cost/technical tradeoffs may be made, and the extent to which one may be
sacrificed for the other is governed only by the tests of rationality
and consistency with the established evaluation factors. Grey
Advertising, Inc., 55 Comp. Gen. 1111 (1976) 76-1 CPD Paragraph 325.
Furthermore, in a dispute between the protester and the contracting
agency over the technical superiority of the awardee's proposals, we
will not disturb the agency's decision as to which of the two proposals
is better suited to complete the project contemplated by the RFP unless
the protester shows that decision to be unreasonable or in violation of
the procurement statutes or regulations. Bank Street College of
Education, 63 Comp. Gen. 393 (1984), 84-1 CPD Paragraph 607.
Here, the record includes a detailed account of the various stages of
review. The contracting officer has, for example, summarized in a
memorandum the factors he considered in selecting FWL for award. /2/ He
states that both offerors remained in the competitive range throughout
the review process, but points out that each reviewer deemed FWL's
proposal to be superior in the final analysis. He indicates that FWL's
offer fully responded to the requirements of the RFP and surpassed the
protester's proposal by offering unique and innovative features, and
that FWL more satisfactorily addressed issues raised in negotiation,
while SWRL was considered less responsive to the concerns raised by the
government. In summary, the contracting officer states that the high
technical quality of FWL's proposal, the nature of the proposed work,
and FWL's greater responsiveness to the agency's requests combine to
outweigh the cost advantage offered by SWRL. In these circumstances, we
find no basis to conclude that the contracting officer has abused his
discretion, or that his award determination was not rationally based.
SWRL also alleges that the contract award was improper because the
Tier II and Tier III panels were given different criteria for judging
the Tier I findings than the ones established in the RFP.
It is a well-established principle of federal procurement law that
once evaluation criteria are set forth in a solicitation, the agency
must adhere to these criteria or inform all offerors of any significant
changes and give them an opportunity to revise their offers. York
Industries, Inc., B-210756.2, Apr. 24, 1984, 84-1 CPD Paragraph 463.
However, agencies are required to identify only the major evalution
factors applicable to a procurement and need not explicitly identify the
various aspects of each major factor that might be taken into account.
All that is required is that those aspects not identified be logically
and reasonably related to, or encompassed by, the stated evaluation
factors. Arltec Hotel Group. B-213788, Apr. 4, 1984, 84-1 CPD Paragraph
381.
In this case, the record indicates that the purpose of the Tier II
stage of review was the evalution of the review process itself, and not
the evalution or selection of a proposal for award. Further, Tier III's
purpose was not to conduct a separate technical evaluation of the
proposals, but to weigh all of the evidence in the file, focusing on
areas where questions remained. The record indicates that although the
panel was given a series of questions to guide their review, rather than
simply the evaluation factors in the RFP, the questions did not
introduce any criteria that were not already encompassed by the scope of
the major evaluation factors. Moreover, the Tier I panel had applied
the RFP evaluation factors in selecting FWL, and the Tier III panel
agreed with the Tier I evaluation. In these circumstances, we have no
basis for objecting to the selection of FWL for award.
FWL alleges that the contracting officer and other government
procurement personnel engaged in technical leveling during discussions
with FWL. The protester cites section 15.610(d)(1) of the Federal
Acquisition Regulation (FAR), which prohibits technical leveling and
defines it as "helping an offeror to bring its proposal up to the level
of other proposals through successive rounds of discussion, such as by
pointing out weaknesses resulting from the offeror's lack of diligence,
competence, or inventiveness in preparing the proposal." 48 C.F.R.
Section 15.610(d)(1) (1984).
The record does not indicate that the agency engaged in successive
rounds of discussions to help FWL bring its proposal up to SWRL's level,
but rather that the site visits, clarification questions and
negotiations with the offerors were for the purpose of advising both
offerors of deficiencies in their proposals and resolving uncertainties
about the proposals, as required by the FAR. See 48 C.F.R. Section
15.610(c)-(d). Moreover, we find nothing to show that the deficiencies
found in FWL's proposal resulted from a lack of diligence or competence,
or that the agency provided improper assistance to overcome any weakness
in FWL's proposal. Accordingly, we find no merit to the protester's
contention that the agency engaged in technical leveling.
SWRL also argues that the substantial price reduction in its best and
final offer was arbitrarily evaluated as a negative factor by the
agency. SWRL effected the reduction by proposing a guaranteed indirect
cost rate not to exceed 30 percent, which represented a $2.8 million
reduction from the firm's initial proposal. NIE reports that this
raised a serious concern about the potential impact the price reduction
would have on SWRL's financial solvency and ability to perform
efficiently. SWRL contends that the agency's concerns about SWRL's
price reduction were unfounded because SWRL's proposal set a cost
ceiling on indirect expenses, thus guaranteeing to NIE that this rate
would not be exceeded. The contracting officer's report indicates,
however, that the technical factors in FWL's proposal out-weighed the
cost advantage that SWRL's offer presented, notwithstanding any concerns
about the cost reduction in SWRL's best and final offer. Therefore, we
need not consider whether NIE's concerns about SWRL's proposed costs
were proper.
Alleged Conflict of Interest
SWRL contends that the evaluation process was tainted by a conflict
of interest because two technical review panel members had "close ties"
to FWL. Specifically, SWRL alleges that the team leader of the panel
that reviewed FWL's proposal (the panel for the Western Region) is a
former FWL employee. The protester also contends that the team leader
of a review panel for another region is currently a paid consultant to
FWL, and had an opportunity to influence the evaluation of FWL's
proposal because all the team leaders met to discuss various aspects of
the evaluation process.
Our review of SWRL's protest concerning these alleged conflicts of
interest is limited to determining whether the individuals involved
improperly exerted prejudice or bias on behalf of FWL. Harry Kahn
Associates, B-216306.2, June 28, 1985, 85-1 CPD Paragraph 739.
Moreover, the protester has the burden of proving its case, and
unsupported allegations or assertions of the potential for impropriety
do not satisfy this burden. Id.
The only evidence submitted by SWRL of any improper influence on the
evaluation results here is that based on SWRL's study of the reviewers'
score sheets, the team leader for the Western Region was reviewer No.
6, and reviewer No. 6 was the sole reviewer who rated FWL ahead of SWRL
in the initial scoring. At the outset, we note that SWRL has provided
no support for its contention that reviewer No. 6 in fact was the team
leader. /3/ However, the record before us does demonstrate that
reviewer No. 6 did not give FWL the highest initial score, but in fact
two other reviewers scored FWL higher.
While reviewer No. 6 was the only reviewer that initially scored FWL
higher than SWRL, there was only a 1 point difference in the two scores.
We do not find this sufficient to support a conclusion that the team
leader improperly influenced the evaluation here. Accordingly, we find
that at best, FWL's allegations rest on conjecture and supposition. We
will not attribute unfair or prejudicial motives to procurement
officials on the basis of inference on supposition. Lighting Location
and Protection, Inc., B-215480, Feb. 21, 1985, 85-1 CPD Paragraph 216.
Conclusion
The protest is denied.
Harry R. Van Cleve
General Counsel
(1) To the extent SWRL is protesting that the RFP was improperly
drafted, the protest is untimely. Our Bid Protest Regulations, 4 C.F.
R. Section 21.2(a)(1) (1985), provide that a protest based on alleged
improprieties that are apparent on the face of a solicitation must be
filed prior to the closing date for receipt of initial proposals.
(2) We note that SWRL questions the validity of this memorandum as
support for the source selection because the memorandum was prepared
after the protest was filed. However, this does not affect the validity
of the award as long as the record reflects that a proper basis for the
award actually existed at the time the selection was made. Cadillac
Gage Co., B-209102, supra.
(3) The record before this Office also does not disclose the identity
of reviewer No. 6.
FILE: B-219984 85-2 CPD 482 DATE: October 29, 1985
MATTER OF: Fire & Technical Equipment Corp.
DIGEST:
BIDS - MISTAKES - CORRECTION - DENIAL
Agency did not abuse its discretion by refusing to allow
correctiWn of bid or to cancel solicitation, where correction of
bid mistake would result in displacement of low bidder and the bid
actually intended is not ascertainable substantially from the
invitation and the bid itself.
Fire & Technical Equipment Corp. (Fire-Tec) protests the decision by
the Department of the Navy which denied correction of its bid on
firefighting trucks under invitation for bids (IFB) No.
N62472-85-B-3104. The Navy does not dispute that Fire-Tec's bid may be
mistaken, however, the Navy rejected Fire-Tec's request for a correction
which apparently would have displaced the otherwise low bidder because
the amount of Fire-Tec's intended bid could not be determined from the
IFB and the bid itself.
We affirm the Navy's decision and deny this protest.
The IFB called for four firefighting trucks, assorted testing, and
accompanying literature and documentation, all of which were separate
line items on the schedule of prices. Bid opening on June 19, 1985;
revealed these results:
1. Kovatch Corp. $147,223.52
2. Fire-Tec $158,915.00
3. Carter-Chevrolet $227,473.00
According to Fire-Tec, it mistakenly entered the price of a fire
truck at $31,742 for line item No. 0002 rather than the cost of a first
article test as called for in that line item. The Navy admits that
workpapers submitted by the protester logically support the nature of
protester's mistake and show material costs for a first article test at
$824.50. However, the Navy points out that the worksheets do not show
any labor costs associated with a first article test and, therefore,
there is no way of ascertaining what Fire-Tec actually intended tW bid
on Line Item No. 0002. Moreover, the Navy points out that the
approximately $31,000 difference between the $31,742 figure actually bid
by Fire-Tec for line item No. 0002 and the only figure of $824.50
available for downward correction would displace the otherwise low
bidder. The protester responds that the object of its protest is not to
displace the low bidder but for the Navy to cancel the solicitation and
seek new bids "to create a highly competitive bidding atmosphere" among
the previous bidders.
We believe the Navy acted reasonably in reaching its conclusion. The
Federal Acquisition Regulation (FAR), 48 C.F.R. Sec. 14.406-3(a) (1984)
provides that an agency may permit a bidder to correct a mistaken bid
after bid opening only when the bidder presents clear and convincing
evidence of both the existence of a mistake and of the bid actually
intended; where correction would result in displacement of another
bidder, the intended bid must be ascertainable substantially from the
invitation and the bid itself. In this instance, there is no way in
which the protester's intended bid may be ascertained from the
invitation and the bid itself, and the protester's worksheets--which
protester admits are inconclusive on the actual price it intended to bid
for line item 0002--may not be considered in determin- ing whether the
apparent low bidder may be displaced. Mayrant Constructors, Inc.,
B-215274, June 11, 1984, 84-1 C.P.D. P 617. Therefore, the Navy
properly did not permit correction.
In addition, the agency acted reasonably in refusing protester's
request that the IFB be canceled and the requirement resolicited. FAR,
48 C.F.R. Sec. 14.404-1(a)(1) (1984) provides that the preservation of
the integrity of the competitive bidding system dictates that after bid
opening, award must be made to the responsible bidder with the lowest,
responsive bid, unless there is a compelling reason for not doing so.
The contracting officer's decision as to whether the circumstances
warrant cancellation will not be disturbed by our Office unless that
decision was arbitrary, capricious, or not supported by substantial
evidence. Big State Enterprises, B-218055, Apr. 22, 1985, 64 Comp.
Gen. , 85-1 C.P.D. P 459. Since three bids were received and the
protester has not alleged that adequate competition and reasonable
prices were not obtained for this procurement, we have no reason to
question the reasonableness of the agency's determination that
Fire-Tec's alleged mistake in its bid was not a compelling reason
warranting cancellation of the solicitation. See United States Playing
Card Company, B-217107, Feb. 21, 1985, 85-1 C.P.D. P 219, at 3,4.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-219982.2 DATE: October 17, 1985
MATTER OF: Hartridge Equipment Corporation--Request
for Reconsideration
DIGEST:
1. Prior decision dismissing a protest as
untimnely is affirmed where the request for
reconsideration fails to show either errors
of fact or of law in the prior decision
which warrant its reversal or modification.
2. When a protester continues to pursue an
agency-level protest alleging solicitation
improprieties for several months after the
agency acts adversely to that protest, the
protester has effectively made its choice
of administrative forum and cannot reasonably
complain that the benefit of GAO's
review authority is no longer available to
it.
Hartridge Equipment Corporation requests reconsideration of our
decision in Hartridge Eguipment Corp., B-219982, Sept. 11, 1985, 85-2
C.P.D. P . In that decision, we dismissed Hartridge's protest because
it was not filed within 10 working days after initial adverse agency
action on the firm's earlier agency-level protest.
We affirm our prior decision.
Background
On December 14, 1984, Hartridge filed a protest with the Army
alleging that certain specifications in request for proposals (RFP) No.
DAAAO9-84-R-0624 exceeded the agency's actual minimum needs, and that
others were ambiguous and prevented Hartridge from suomitting a
proposal. The Army continued to receive proposals until the scheduled
December 20 closing date, but did not formally deny Hartridge's protest
until July 31, 1985. Hartridge then protested to this Office on August
16.
We dismissed the protest as untimely under our Bid Protest
Regulations, 4 C.F.R. Sec. 21.2(a) (3) (1985), which provide that if a
protest has been filed initially with the contracting agency, any
subsequent protest to this Office must be filed (received) within 10
working days of formal notification of, or actual or constructive
knowledge of initial adverse agency action. In our prior decision, we
emphasized that "initial adverse agency action" includes tne agency's
continued receipt of proposals as scheduled without taking the
corrective action requested by the protester. 4 C.F.R. Sec. 21.0(e).
Since the proposal closing here occurred as scheduled without the
Army taking any action in response to Hartridge's initial protest, any
subsequent protest to this Office had to be filed no later than 10
working days after December 20 in order to be timely. In our decision,
we pointed out to Hartridge that even though the firm continued to
pursue the matter with the Army after December 20, such continued
pursuit did not toll our filing requirements. We also pointed out that
the firm was not entitled to wait until it received the Army's formal
decision of July 31 Before coming to this Office once the proposal
closing date had passed.
Hartridge now requests reconsideration on the grounds that the
particular circumstances of this case distinguish it from the general
line of cases that hold that a proposal closing in the face of an
agency-level protest constitutes initial adverse agency action.
Hartridge asserts that our reliance upon that basic principle is
inapplicable here because the Army continued to represent to Hartridge
that it was still actively considering the protest and gave no
indication that the protest would be denied.
In this regard, Hartridge reminds us (as we recognized in our prior
decision) that it telegrammed the Army on January 31, 1985, a little
more than 1 month af ter the proposal closing date, to request the Army
to advise the firm of the status of its protest. Hartridge points out
that the contracting officer replied by letter of February 11, stating
that the issues raised by Hartridge in its December 14 protest were
under consideration and that a determination as to the validity of the
protest would be reached in the near future.
In addition, Hartridge now informs us for the first time that two
congressional inquiries were made to the Army on the firm's behalf
between the December 20 closing date and the July 31 denial of its
protest by the agency. Specifically, Hartridge received a letter dated
December 21 from a congressman acknowledging receipt of a copy of
Hartridge's protest and advising Hartridge that the Army had been asked
to keep the congressman apprised of any action taken on the protest.
Subsequently, Hartridge received another letter from the congressman
(dated January 11) with an attached letter from the Army in which the
Army essentially stated that Hartridge's December 14 protest was under
current consideration and that no final decision had been reached. A
similar letter was received from a senator in April.
Accordingly, hartridge urges that the December 20 proposal closing
did not constitute initial adverse agency action because the Army
continued to consider its protest for several months following that
event, and never indicated in any of its communications to either
Hartridge or tnose acting on the firm's behaif that the protest was
deemed to be without merit. In Hartridge's view, no adverse action
occurred until July 31, when the Army finally issued its formal decision
on tne protest. Since Hartridge's subsequent protest to this office was
filed on August 16, within 10 working days after receipt of that
decision, the firm asserts that tne protest was timely and, tnerefore,
must now be considered by this Office on the merits.
Hartridge also urges that the Army's actions "lulled" the firm into
not filing a protest with this Office eariier because the Army continued
to indicate for several months after the proposal closing that the
matter was under active review. Essentially, it is Hartridge's position
that our requirements for the timely filing of protests work an unduly
harsh result in this instance where the firm relied upon the Army's
representations to its detriment, thus inadvertently forfeiting its
right to file a protest in accordance with those requirements.
Analysis
In order to prevail in a request for reconsideration, the requesting
party must show either errors of fact or of law in our prior decision
that warrant its reversal or modification. Department of Labor--
Reconsideration, B-214564.2, Jan. 3, 1985, 85-1 C.P.D. P 13. Hartridge
has not met tnat burden here.
We regard bid protests as serious matters that require effective and
equitable procedural standards so that all parties have a fair
opportunity to present their cases, and so that protests can be resolved
in a reasonably speedy manner without unduly disrupting the government's
procurement process. Ikard Manufacturing Co., B-213606.2, May 21, 1984,
84-1 C.P.D. P 533. Therefore, although we recognize that a party which
alleges a solicitation impropriety may cnoose to protest initially to
the agency, we require the submission of any subsequent protest to this
Office within 10 working days after the agency first acts adversely to
the protester's position by, for example, opening bids or continuing to
receive proposals as scheduled. 4 C.F.R. Sec. 21.0(e), 21.2(a) (3).
This strict requirement is necessary so that corrective action, if
ultimately recommended, is most practicable and, thus, least burdensome
on the conduct of the procurement. See Ray Service Co.--Request for
Reconsideration, B-215959.:2, Sept. 11, 1984, 84-2 CPDP 28-4.
We find no merit in Hartridge's assertion that the Army's actions
somehow excused the firm's failure to file a timely protest with tnis
Office. We note that the only communication concerning the agency's
consideration of the protest that Hartridge received during the 10
working day period after the closing date was the December 21 letter
from a congressman stating tnat he had asked the Army to keep him
informed of any action taken on the protest. We fail to see how this"
lulled" Hartridge into an unwitting forfeiture of its right to protest
to our Office. Certainly, there was no indication f rom the Army that
the proposal closing was not inimical to Hartridge's interest. See
Centurial Products, B-216517, Sept. 19, 1985, 64 Comp. Gen. , 85-2 C.
P.D. P . Therefore, the December 20 closing remained tne operative
event to trigger our filing requirements since it clearly constituted
initial adverse agency action. See Central Air Service, Inc., B-213205,
Feb. 6, 1984, 84-1 CPDP 147.
We are mindful of the fact that the Army's nandling of Hartridge's
protest was less than expeditious and resulted in nothing more than a
cursory response to the issues raised. Nonetheless, by continuing to
pursue tne matter at the agency level for several months after the
proposal closing occurred, Hartridge ef fectively made its choice of
administrative forum, and the firm cannot reasonably complain because
the benefit of our review authority is no longer available to it. See
Experimental Pathology Laboratories, Inc., B-21 1282, July 28, 1983,
83-2 CPD P 136.
Furthermore, given that the solicitation in question was issued more
tnan a year ago, and that the Army has made an award under that
solicitation, our review at this point of a protest against the
specifications would be inconsistent with the intent of our regulations
to provide for expeditious consideration of objections to procurement
actions without unduly disrupting the government's procurement process.
See International Development Institute, 64 Comp. Gen. 259 (1985), 85-1
C.P.D. P 179. To waive our timeliness rules in Hartridge's sole favor
would only serve to compromise the integrity of those rules. See Tracor
Alied Sciences--Reconsideration, B-218051.2, Apr. 12, 1985, 85-1 C.P.D.
P 422.
Our prior decision is affirmed.
Harry R. Van Cleve
General Counsel
FILE: B-219982 85-2 CPD 286
DATE: September 11, 1985
MATTER OF: Hartridge Equipment Corporation
DIGEST:
CONTRACTS - PROTEST - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - ADVERSE AGENCY ACTION EFFECT
1. When a protest alleging solicitation improprieties has been filed
initially with the contracting agency, the agency's continued receipt of
proposals as scheduled without taking the corrective action requested by
the protester constitutes initial adverse agency action, and any
subsequent protest to GAO must be filed within 10 working days after the
proposal closing date in order to be timely.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - ADVERSE AGENCY ACTION EFFECT - INTERIM APPEALS
TO AGENCY EFFECT OF 10 - WORKING DAY GAO FILING PERIOD
2. A protester's continued pursuit of an agency-level protest
following initial adverse agency action does not toll GAO's filing
requirements, and a protester may not wait until it receives the
agency's formal decision on the protest before coming to GAO.
Hartridge Equipment Corporation protests certain specifications under
request for proposals. (RFP) No. DAAA09-84-R-0624, issued by the
Department of the Army for the acquisition of fuel injection test
stands. We dismiss the protest as untimely.
The scheduled closing date for receipt of initial proposals was
December 20, 1984. On December 14, Hartridge Filed a protest with the
Army alleging that the RFP's specifications in certain areas exceeded
the agency's actual minimum needs and that others were ambiguous.
Hartridge did not submit a proposal, and the closing occurred as
scheduled. By telegram of January 31, 1985, Hartridge requested the
Army to advise the firm of the status of its protest and to indicate
when the Army would decide the matter. On February 11, the Army
responded that the protest was currently being considered and that a
determination would be reached shortly.
By letter of July 31, the Army denied Hartridge's protest. Hartridge
then filed a protest with this Office on August 16, which the firm
asserts is timely because it was filed within 10 working days after it
received formal notification of the Army's July 31 denial. We do not
agree.
Our Bid Protest Regulations, 4 C.F.R. Section 21.2(a)(3) (1985),
specifically provide that if a protest has been filed initially with the
contracting agency, any subsequent protest to this Office must be filed
(received) within 10 working days of formal notification of or actual or
constructive knowledge of initial adverse agency action. "Adverse
agency action" is any action or inaction on the agency's part which is
prejudicial to the position taken in a protest filed with the agency,
and includes the agency's continued receipt of proposals as scheduled
without taking the corrective action requested by the protester. 4
C.F.R. Section 21.0(e); Monaco Enterprises, Inc., B-217037, June 7,
1985, 85-1 CPD Paragraph 654.
Since Hartridge knew or should have known that the proposal closing
occurred as scheduled on December 20, the firm therefore was required to
protest to this Office within 10 working days of that date.
Accordingly, the firm's August 16 protest is clearly untimely and will
not be considered. 4 C.F.R. Section 21.3(f)(7).
The fact that Hartridge expressed continued interest in its protest
to the Army, as evidenced by its January 31 telegram, does not alter
this result. Bobnreen Consultants, Inc., B-218214.3, May 31, 1985, 85-1
CPD Paragraph 636. In this regard, it is well-settled that a
protester's continued pursuit of a matter with the agency following
initial adverse agency action does not toll our filing requirements.
Birdsboro B-218100.2, Mar. 11, 1985, 85-1 CPD paragraph 299. Moreover,
although the Army did not deny the protest until July 31, a protester
may not wait until it receives the agency's formal decision on the
protest before coming to this Office once the initial adverse action has
occurred. Monaco Enterprises, Inc., B-217037, supra.
The protest is dismissed.
/s/ Ronald Berger
Deputy Associate General Counsel
FILE: B-219981.4 DATE: June 12, 1986 86-1 CPD 545
MATTER OF: Tektronix, Inc.
BIDS - INVITATION FOR BIDS - CANCELLATION - AFTER BID OPENING -
INSUFFICIENT FUNDING
Cancellation of an invitation for bids (IFB) after bid opening is
proper where funds for the procurement are no longer available.
Contracting agency is not precluded from resoliciting if funds become
available in the future, since there is no evidence that the currant
unavailability of funds is merely a pretext to permit cancellation of
the IFB and resolicitation in the future.
Tektronix, Inc. protests the cancellation by the Marine Corps of
invitation for bids (IFB) No. M00027-85-B0037 for time domain
reflectometers and associated technical data. We deny the protest.
The IFB, issued on April 23, 1985, called for bidders to submit unit
and extended prices for a basic quantity of 100 reflectometers and an
additional option quantity of 100 reflectometers, as well as separate
option prices for related technical data. At bid opening on May 23 bids
were received from two bidders, Tektronix and Biddle Instruments. Award
was made to Riddle on August 5, after the Marine Corps had allowed
Biddle to correct an apparent mistake in its bid for the option
quantity.
Tektronix then filed a protest with our Office challenging the Marine
Corps' decision to permit correction of Biddle's bid. We sustained the
protest, finding that withdrawal of the bid, not correction, was the
appropriate remedy under the circumstances. We recommended that
Biddle's contract be terminated for convenience and award made to
Tektronix if the firm was otherwise eligible. Tektronix, Inc., B-219981,
Nov. 27, 1985, 85-2 CPD P 611.
The Marine Corps agreed to implement our recommendation to terminate
Biddle's contract. In considering whether Tektronix was eligible for
award, the Marine Corps advised Tektronix that there was an apparent
mistake in its bid. Biddle, the other bidder, also filed a protest with
our Office alleging that the Tektronix bid was nonresponsive because it
did not conform to the specifications in the IFB.
The Marine Corps then canceled the IFB on March 20, 1986. 1/ The
contracting officer found that cancellation was warranted in the public
interest in view of the lengthy delay in making award; apparent
deficiencies in both bids received; and allegations of fraud by
Tektronix. The contracting officer also stated that the funds
originally earmarked for the procurement had expired for obligation and
thus were no longer available; that no other funds currently were
available for the procurement; and that it could not be predicted if
funds would become available in the future. Tektronix filed its protest
challenging the cancellation with our Office on April 4.
As a preliminary matter, the Marine Corps contends that 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 the
protest. The Marine Corps argues that protests such as this one which
challenge an agency's decision to cancel a solicitation do not fit the
definition of protest in CICA, 31 U.S.C. Sec. 3551 (1). We recently
rejected this argument in Contract Services Co., Inc., 65 Comp. Gen. 41
(1985), 85-2 CPD P 472, where we concluded that CICA authorizes our
Office to continue to decide protests involving the cancellation of
solicitations even where a resolicitation is not contemplated. The
Marine Corps has made no new arguments which would justify revising our
position. Accordingly, we conclude that we have jurisdiction to
consider the protest by Tektronix.
Cancellation of an IFB where, as here, bids have been opened and
prices exposed is not permitted unless a compelling reason for the
cancellation exists. Federal Acquisition Regulation, 48 C.F.R. Sec.
14.404-1 (a) (1) (1984); Military Bass Management, Inc., B-216309, Dec.
4, 1984, 84-2 CPD P 619. The Marine Corps has offered several grounds
in support of cancellation of the IFB, including the fact that no funds
currently are available for the procurement. An agency's determination
that funds are not available for a procurement is a sufficient reason to
cancel a solicitation, since statutory limitations prevent the award of
a contract when funds are not available, even if the determination is
not made until after bid opening. Spruill Realty/ Construction Co.,
B-209148.2, Jan. 31, 1983, 83-1 CPD P 102. Since the unavailability of
funds is by itself a sufficient basis for cancellation, we need not
consider whether any of the other grounds asserted by the Marine Corps
also provided a proper basis for canceling the IFB. NDT-1, Inc.,
B-220570, Nov. 20, 1985, 85-2 CPD P 576.
The Marine Corps has stated that funds are not currently available
and that it has no plans at present to resolicit; if funds become
available in the future, however, the Marine Corps has said that it will
issue a new solicitation for the reflectometers. Tektronix contends
that the current unavailability of funding is merely a pretext by the
Marine Corps to avoid making award to Tektronix. As a result, Tektronix
argues, if funds become available in the future, the Marine Corps should
be required to reinstate the canceled IFB and make award to Tektronix,
instead of issuing a new solicitation.
To the extent Tektronix is challenging the Marine Corps' decision to
allocate current funds for purposes other than this procurement, we will
not review this determination, since it depends on the Marine Corps'
judgment concerning which projects and activities shall receive
increased or reduced funding. NDT-1, Inc., B-220570, supra.
Moreover, we reject Tektronix's assumption that any future decision
to resolicit if funds become available would necessarily demonstrate
that the Marine Corps' present decision to cancel the IFB was an
improper pretext only, and thus that resolicitation would be improper in
all circumstances. On the contrary, since funds are not available
currently and cancellation thus is proper at present, we see no reason
why the Marine Corps should now be foreclosed from resoliciting if funds
become available in the future. See James M. Carroll-- Reconsideration,
B-221502.3, Mar. 24, 1986, 86-1 CPD P 290. If the Marine Corps decides
to resolicit and Tektronix believes that the circumstances of the
resolicitation demonstrate that the present decision to cancel was
improper at the time it was made, Tektronix may challenge the
resolicitation at that time. Id.
The protest is denied.
Harry R. Van Cleve
General Counsel
FOOTNOTES
1/ After the IFB was canceled, the protest filed by Biddle
challenging the responsiveness of the Tektronix bid was dismissed as
academic.
FILE: B-219981 85-2 CPD 611
DATE: November 27, 1985
MATTER OF: Tektronix, Inc.
CONTRACTS - PROTESTS - INTERESTED PARTY REQUIREMENT - DIRECT INTEREST
CRITERION
1. Protester, the second low bidder, has the direct economic
interest necessary to be an interested party entitled to challenge the
contracting agency's decision to allow the low bidder to correct an
apparent mistake in its bid since, if the protest were sustained, the
low bidder's bid would have to be withdrawn and the protester thus would
be in line for award.
BIDS - MISTAKES - CORRECTION - INTENDED BID PRICE - ESTABLISHEMENT
REQUIRED
2. Contracting agency improperly permitted awardee to correct
mistake in its bid as a clerical mistake since the unit price and
extended price were in agreement and intended bid therefore could not be
determined from the face of the bid.
BIDS - MISTAKES - INTENDED BID PRICE UNCERTAINTY - BID WITHDRAWAL
3. Withdrawal of bid, not correction of mistake in bid, was the
appropriate remedy where the only evidence of the intended bid was the
bidder's price sheet, which lacked any indication of how price was
calculated; the amount of the error in price was substantial; and
corrected bid was close in amount to the second low bid.
Tektronic, Inc. protests the award of a contract to Biddle
Instruments under invitation for bids (IFB) No. M00027-85-B-0037, issued
by the Marine Corps for time domain reflectometers and associated
technical data. Tektronix challenges the Marine Corps' decision to
allow Biddle to correct an apparent mistake in its bid. We sustain the
protest.
The IFB called for bidders to submit unit and extended prices for a
basic quantity of 100 reflectometers and an additional option quantity
of 100 reflectometers, as well as separate option prices for related
technical data. The IFB provided that bids would be evaluated on the
basis of both the basic and option prices for the reflectometers and
technical data. The two bids received, from Biddle and Tektronix, were
as follows:
TABLE OMITTED
Based on the disparity between Biddle's option price and the other
prices, the contracting officer concluded that Biddle might have made a
mistake in its bid for the option quantity. According to the Marine
Corps' report, the contracting officer regarded the error as a clerical
mistake resulting from misplacement of a decimal point, and concluded
that Biddle's intended unit price for the optional quantity was $3500,
not $3.50. The contracting officer then requested that Biddle verify
its intended bid, as required by Federal Acquisition Regulation (FAR),
48 C.F.R. Section 14.406-2(a) (1984), which prescribes procedures for
correction of clerical mistakes. Biddle first responded by letter dated
May 29, 1985, stating that a mistake had been made and requesting a
"rebid." In response to the Marine Corps' request for further
information, Biddle sent another letter, dated July 18, attaching an
internal price sheet showing the unit price for the option quantity as
$3500, and confirming the contracting officer's conclusion regarding
Biddle's intended price.
The contracting officer's recommendation that Biddle be allowed to
correct its bid was reviewed and concurred in by the Marine Corps
Contracts Division Review Board. Award then was made to Biddle on
August 5.
As a preliminary matter, the Marine Corps argues that Tektronix is
not an interested party eligible to maintain this protest. The Marine
Corps points out that both Biddle's original bid ($405,427.50) and its
corrected bid ($755,077.50) are lower than the Tektronix bid ($776,332).
/1/ Since Tektronix thus is not in line for award regardless of whether
Biddle's bid is corrected, the Marine Corps argues, Tektronix is not an
interested party. We disagree. The basis of the protest, discussed in
detail below, is that Biddle's intended bid was not adequately
established, and Biddle therefore should have withdrawn its bid. As a
result, if Tektronix prevailed in its protest and the Biddle bid
consequently was withdrawn, Tektronix, as the only other bidder, would
be in line for award. Under the Competition in Contracting Act of 1984,
31 U.S.C.A. Section 3551(2) (West Supp. 1985), and our Bid Protest
Regulations, 4 C.F.R. Section 21.0(a) (1985), an interested party is
defined as an actual or potential bidder whose direct economic interest
would be affected by the award or failure to award the contract
involved. Here, since Tektronix would be in line for award if its
protest were sustained, Tektronix has the direct economic interest
necessary to be an interested party. See R.H. Whelan Co., B-203248,
Aug. 11, 1981, 81-2 CPD Paragraph 123.
Tektronix first argues that the apparent mistake in Biddle's bid was
not a clerical mistake subject to correction under FAR, 48 C.F.R.
Section 14.406-2. We agree. Section 14-406-2 authorizes the
contracting officer to correct a clerical mistake in a bid without
further agency approval after receiving verification of the intended bid
from the bidder, provided that the intended bid is evident from the face
of the bid. See Engle Acoustic & Tile, Inc., B-190467, Jan. 27, 1978,
78-1 CPD Paragraph 72.
Here, the contracting officer apparently concluded that the error in
the Biddle bid was due to the obvious misplacement of a decimal point,
one example of a clerical mistake subject to correction by the
contracting officer listed in section 14.406-2(a)(1). While we agree
that a mistake was apparent on the face of the bid, we find that it was
not subject to correction as a clerical mistake since the intended bid
could not be determined from the face of the bid as required by section
14.406-2.
An error in a unit price is subject to correction as a decimal point
error, for example, when the extended price is either one-tenth or ten
times greater than the actual product of multiplying the unit price by
the stated quantity. Russell Drilling Co., B-218577, July 25, 1985, 64
Comp. Gen. . . . , 85-2 CPD Paragraph 87; see also Engle Acoustic &
Tile, Inc., B-190467, supra. In such cases, the discrepancy between the
unit and extended prices reveals both the existence of the mistake and
the intended bid. Thus in this case, if Biddle's extended price had
been $350,000, for example, the contracting officer reasonably could
have concluded that the intended unit price was $3500 by dividing the
extended price, which on its face would have seemed reasonable, by the
option quantity. Because the extended price here was consistent with
the unit price, however, the intended price was not evident from the
face of the bid. The error could as reasonably have been due to a
typographical error as a decimal point error; for example, instead of
$3500, the intended unit bid price may have been $3350 or $3735, prices
equally consistent with the other bid prices. In addition, since
Biddle's unit price for the basic quantity was $3940, not $3500, the
basic bid gives no indication that the intended unit price for the
option quantity was $3500. As a result, since the intended bid was not
ascertainable from the face of the bid, it was improper to allow
correction under section 14.406-2 as a clerical error. See Sundance
Construction, Inc., B-182485, Feb. 28, 1975, 75-1 CPD Paragraph 123
(correction as a clerical mistake was improper where intended bid could
not be obtained by multiplying the unit price by the unit quantity.
We agree, however, that a mistake was apparent on the face of the
bid, since Biddle's option price ($3.50) was so obviously low when
compared with its bid for the basic quantity ($3940) and the Tektronix
bid ($3800). Whether it was appropriate to allow the bid to be
corrected therefore should have been determined under FAR, 48 C.F.R.
Section 14.406-3, which prescribes procedures for resolving mistakes not
clerical in nature. Under section 14.406-3(a), a bidder which so
requests may be allowed to correct its bid if both the mistake and the
intended bid are established by clear and convincing evidence. In our
view, the price sheet provided by Biddle, the only evidence Biddle
submitted, is not sufficient to establish the intended bid, particularly
in light of the substantial amount of the error and the relatively small
difference between the corrected bid and the Tektronix bid.
While the mistake-in-bid rules are intended to permit relief to
bidders who make genuine mistakes in their bids, the paramount concern
of the rules is the protection of the competitive bidding system.
Panoramic Studios, B-200664, Aug. 17, 1981, 81-2 CPD Paragraph 144. The
potential for abuse resulting from a decision to allow correction is
protected against by the high standard of proof necessary before
correction is permitted. American Museum Construction Division of Byer
Industries, Inc., B-210022, Mar. 31, 1983, 83-1 CPD Paragraph 337. In
examining whether there is adequate evidence to establish the intended
bid, bidders' worksheets have been found sufficient where they show how
the mistake was made and how the intended bid was calculated. Compare
Coleman Industrial Construction Co., B-207682, Sept. 8, 1982, 82-2 CPD
Paragraph 213 (correction was reasonable where detailed worksheets
showed how the intended bid was calculated and that mistake was due to
clerical error in transcription from worksheets to bid form) with Fortec
Constructors, B-203190.2, Sept. 29, 1981, 81-2 CPD Paragraph 264
(correction was unreasonable where worksheets did not show how amount of
markup was calculated) and Treweek Construction, B-183387, Apr. 15,
1975, 75-1 CPD Paragraph 227 (correction was unreasonable where
worksheets did not show formula for calculating bond premium to be added
to intended bid).
Here, the price sheet submitted by Biddle itemizes its own costs per
unit (a total of $2309.70), but gives no indication of how the $3500
unit price was calculated; the sheet merely has the following notation
at the bottom: "recommended selling price for 2nd-100 units $3,500." In
fact, using the overhead formula shown on the price sheet, Biddle's
minimum list price per unit would be $3857.20 ($2309.70 cost times the
1.67 overhead factor); using this minimum list price as the intended
option price, Biddle's total bid would be higher than the Tektronix bid.
Given that the amount of the asserted error is substantial, raising
Biddle's bid by $349,650, and the difference between the corrected bid
and the Tektronix bid is only $21,254.50, or 2.7 percent, we find that
Biddle's price sheet, which lacks any indication of how the intended bid
was calculated, does not constitute the clear and convincing evidence
required under FAR, 48 C.F.R. Section 14.406-3(a), to permit the
significant upward correction of Biddle's bid in this case. See Sam
Gonzales, Inc., B-216728, Feb. 1, 1985, 85-1 CPD Paragraph 125. As a
result, since the mistake was apparent from the face of the bid, but the
intended bid was not established by clear and convincing evidence, it
was improper to allow Biddle to correct its bid. Instead, the
appropriate remedy was to allow Biddle to withdraw the bid.
The Marine Corps argues that Solon Automated Services, Inc.,
B-214170, Sept. 25, 1984, 84-2 CPD Paragraph 350, in which we upheld the
agency's decision to allow correction, is analogous to this case. We
disagree. In Solon, the awardee had offered the same unit and extended
prices for the base year and two option years, even though the
quantities of equipment covered by the solicitation increased in the
option years. We noted that, because of the format of the solicitation,
the provision advising bidders of the increased quantities for the
option years was easily overlooked, and, in fact, a majority of the
bidders had failed to increase their extended prices. In addition, the
awardee's intended unit price was evident from the bid, and, as a
result, the total price was ascertainable simply by multiplying the unit
price by the correct quantity. Here, in contrast, neither the unit
price nor the extended price indicates Biddle's intended bid; the only
evidence offered is the bare notation on Biddle's price sheet.
By separate letter to the contracting agency, we are recommending
that Biddle's contract be terminated for convenience and that award be
made to Tektronix if the firm is otherwise eligible.
The protest is sustained.
Comptroller General of the United States
(1) The total bids consist of the extended prices for the basic and
option quantities of the reflectometers plus the option prices for the
related technical data.
FILE: B-219979 85-2 CPD 227
DATE: August 23, 1985
MATTER OF: D. A. Elia Construction Corp.
DIGEST:
BIDS - RESPONSIVENESS - RESPONSIVENESS V. BIDDER RESPONSIBILITY
Although solicitation contained a provision requiring the listing in
the bid of contractor qualifications, contracting agency could properly
consider bids which failed to provide qualifications statement at bid
opening, since purpose of provision is to elicit responsibility
information.
D. A. Elia Construction Corp. (Elia) protests the Veterans
Administration's (VA) consideration of any bids, other than Elia's bid,
for project No. 514-068, renovation of building 78, VA Medical Center,
Bath, New York. Elia contends that the five other bids are
nonresponsive because they lack a solicitation-required asbestos
abatement contractor qualification statement.
Elia initially protested to VA contending that lack of the statement
at bid opening was a material defect which VA could not waive as a minor
irregularity or informality. In support of its contention, Elia noted
that: (1) the solicitation required the statement's submission with the
bid; (2) absence of the statement impairs the government's ability to
determine responsibility; and (3) bidders submitting the statement were
precluded from bid shopping and therefore prejudiced if the government
considered the bids of bidders who elected not to submit statements,
since those bidders would be free to bid shop after bid opening. VA
denied the protest citing Devcon Systems Corp., B-197935, July 18, 1980,
80-2 C.P.D. Paragraph 46, which held that, notwithstanding a
solicitation requirement for submission of a subcontracting plan with
the bid, where the solicitation does not state that failure to submit
the plan will result in the bid's rejection as nonresponsive, the matter
relates to responsibility and not to responsiveness and, therefore, the
plan may be provided subsequent to bid opening.
We agree with VA's position and dismiss the protest for failure to
state a valid basis for protest. 4 C.F.R. Section 21.3(f) (1985).
In its protest to our Office, Elia has repeated its contentions
before VA and added the argument that:
". . . The federal government has the ability . . . to make the
demonstration of bidder responsibility on the face of bid
documents a matter of bid responsiveness. This is especially
important when the work to be performed is unusual or dangerous in
nature."
The provision requiring the statement is clearly labeled
"QUALIFICATIONS." In order to establish a basis for the contracting
officer's approval of the proposed asbestos abatement contractor, it
seeks information concerning the contractor's ownership, history,
knowledge of environmental regulations and personnel. Elia seeks to
characterize the provision as an anti-bid-shopping, subcontractor
listing requirement which would make compliance with its terms a matter
of responsiveness. 44 Comp- Gen. 526 (1965); 43 Comp. Gen. 206 (1963).
We disagree. The only thing that the provisions has in common with a
listing requirement is that both require the bidder to name the entity
which will perform the work, if other than the bidder. The similarity
ends there, since the purpose of the provision is to elicit
responsibility information, while the purpose of the listing requirement
is to lock the bidder into a particular subcontractor for a specific
category of work at the time of bid opening. Id.
Robert M. Strong
Deputy Associate General Counsel
FILE: B-219974 DATE: October 21, 1985
MATTER OF: Forfeiture of Annual Leave because
of Suspension
DIGEST:
LEAVES OF ABSENCE - LUMP-SUM PAYMENTS - REMOVAL, SUSPENSION, ETC. OF
EMPLOYEE - REFUND ON REINSTATEMENT
1. A terminated Federal employee is entitled to a lump-sum
payment for unused annual leave upon separation from service, but
must refund the full amount if the separation is subsequently set
aside, because there then no longer exists any proper basis for
the payment. Hence, recoupment of a lump-sum leave payment is
required in the case of an employee who was terminated, but whose
termination was subsequently changed to a suspension in
arbitration proceedings, since the employee would not have
received a separation payment for unused leave if suspension
rather than termination had been the original disciplinary action.
LEAVES OF ABSENCE - ANNUAL - RECREDIT ON RESTORATION AFTER
UNJUSTIFIED REMOVAL - FORFEITED ANNUAL LEAVE
2. Federal employees are generally eligible to carry over no
more than 240 hours of unused annual leave from one year to the
next. An employee who has been suspended from duty without pay,
and who cannot use annual leave, is subject to this maximum leave
carryover limitation. Thus, an employee who was suspended and was
not restored to duty until the next succeeding year forfeited the
number of hours of annual leave in excess of 240 hours which were
credited to his leave account at the time the suspension began.
This matter concerns a Federal employee who was terminated but whose
termination was subsequently changed to an 11-month suspension in
arbitration proceedings. The primary issue is whether the employee,
upon restoration to duty following the suspension, is liable to forfeit
leave under the annual leave carryover limitations prescribed by
statute. We conclude that the employee in this case is subject to a
forfeiture of excess leave, and we overrule a contrary determination
made by our Claims Group. 1/
Background
The employee involved in this matter is a mechanic, grade WG-10, at
an Air Force installation in Missouri. He was terminated on June 22,
1981, for repeated failure to follow the safety rules of his shop. In
subsequent grievance proceedings, an arbitrator found that termination
was an excessive disciplinary measure in the circumstances, and in place
of it the arbitrator substituted a suspension without pay for the period
from June 22, 1981, through May 9, 1982.
The employee received a lump-sum payment for 324 hours of unused
annual leave at the time of his separation in 1981. When he returned to
work in 1982 he was required to refund the lump-sum leave payment.
Also, 240 hours of annual leave were restored to his credit. He was
required to forfeit 84 hours of leave under the annual leave carryover
limitations prescribed by statute.
The employee subsequently filed a claim with our Claims
Group requesting either (1) payment for 84 hours' leave, or (2)
restoration of an additional 84 hours to his leave account. The Claims
Group determined that he was eligible for a recredit of an additional 84
hours to his leave account. Officials of the Air Force Accounting and
Finance Center have since questioned the correctness of that
determination.
Analysis and Conclusion
The statutes governing the leave entitlements of Federal employees
provide that an employee who is separated from Government service is
entitled to receive a lump-sum payment for accumulated and current
accrued annual leave. 2/ If an employee is terminated and the
termination is subsequently set aside, however, the lump-sum leave
payment received at the time of separation is recoupable in the full
amount. 3/
In addition, the leave statutes provide that an employee who is
stationed in the United States may accumulate and carry into a
succeeding leave year a maximum of 30 days, or 240 hours, of annual
leave. 4/ We have held that an employee who cannot use paid annual leave
during a period of suspension from duty is subject to this maximum leave
carryover limitation, and is liable to forfeit annual leave in excess of
the amount allowable at the beginning of the next succeeding leave year.
5/
In the present case, the arbitration award had the effect of
retroactively converting the employee's termination to a suspension
without pay. Thus, his rights are for determination on the basis of
that suspension. If the disciplinary action had originally been a
suspension without pay in 1981, then the employee would not have
received a lump-sum leave payment, and he would have been allowed to
carry only 240 hours of his 324 hours of unused leave forward ward into
the 1982 leave year. Hence, we conclude that he was properly required
to refund the full amount of the lump-sum leave payment he received in
1981, and that he should have been allowed a recredit of only 240 hours,
rather than 324 hours, of annual leave upon his restoration to duty in
1982. 6/
Accordingly, we disallow employee's claim in this matter.
Comptroller General
of the United States
1/ This decision is issued under the authority of 31 U.S.C. Sec.
3702 and 4 C.F.R. Part 32.
2/ See 5 U.S.C. Sec. 5551(a).
3/ See, e.g., Vincent T. Oliver, 59 Comp. Gen. 395 (1980).
4/ 5 U.S.C. Sec. 6304(a).
5/ Restoration of Forfeited Annual Leave, B-209958, Marcn 2, 1983;
Forfeiture of Annual Leave because of Suspension, B-197957, July 24,
1980.
6/ Restoration of the 84 hours of excess leave as suggested by the
Claims Group under the provisions of the Back Pay Act, 5 U.S.C. Sec.
5596, would have been appropriate only if the employee had been
retroactively restored to duty with pay.
FILE: B-219973
DATE: December 9, 1985
MATTER OF: Rose Marie Baron -- Retroactive Salary Increase
APPOINTMENTS - ABOVE MINIMUM STEP IN GRADE - GRADE GS-11 AND ABOVE -
OFFICE OFPERSONNEL MANAGEMENT APPROVAL REQUIREMENT
An employee of the Equal Opportunity Commission was hired with the
understanding she would be appointed at step 4 of grade GS-14. After
actual appointment at minimum step of that grade, it was discovered that
prior approval of the higher rate was not obtained from the Office of
Personnel Management (OPM), due to administrative oversight. Upon
subsequent, but prospective approval of higher step placement by OPM, a
claim for retroactive increase in that pay is made here. The claim is
denied. Under 5 U.S.C. Section 5333, 5 C.F.R. Section 531.203(b), and
General Accounting Office decisions, appointments to grades GS-11 and
above may be made at a rate above the minimum rate of the grade, but
only with prior approval of OPM. Since such appointment is
discretionary and not a right, the employee may not receive a
retroactive increase. See Susan E. Murphy, 63 Comp. Gen. 417 (1984).
This decision is in response to a request from a District Director,
Equal Employment Opportunity Commission (EEOC), concerning the
entitlement of Ms. Rose Marie Baron to receive a retroactive adjustment
in her step-placement and backpay. We conclude that she is not entitled
for the following reasons.
In November 1983, an employment offer was made to Ms. Rose Marie
Baron to become a Supervisory Trial Attorney in the Milwaukee District
Office, EEOC. On the basis of a finding that she had superior
qualifications for the position, it was agreed that her entry salary was
to be established at the rate of step 4 of grade GS-14. However, due to
administrative error, the EEOC failed to file an advance request with
the Office of Personnel Management (OPM) for approval of an appointment
at the higher step of grade GS-14. As a result, when Ms. Baron entered
on duty on November 21, 1983, her rate of pay was established at step 1
of that grade.
Following discovery of the error, the necessary approval was sought
from OPM. However, due to the fact that EEOC failed to furnish
sufficient documentation of her superior qualifications with the
approval request, OPM approval was further delayed. Notice of approval
was eventually issued by OPM on July 15, 1985, in which it was stated
that "Ms. Baron's salary adjustment may not be made effective before
July 11, 1985."
Because OPM admitted in that notice that they would have approved the
request had it been made earlier, but could not make it retroactive due
to their lack of authority to grant backpay, the matter has been
submitted here for resolution.
In decision Susan E. Murphy, 63 Comp. Gen. 417 (1984), which also
involved an EEOC employee with a superior qualification appointment, we
considered the issue of retroactive adjustment in step-placement and
backpay where there was administrative error in failing to file a timely
request with OPM. We denied that claim for the reason that under the
provisions of 5 U.S.C. Section 5333 (1982), and 5 C.F.R. Section
531.203(b) (1983), while appointments may be made at a pay rate above
the minimum rate for grades GS-11 and above, they may only be made with
prior approval of OPM. Further, since such approval is discretionary
and does not involve an employee right granted by statute, delayed
approval of that higher pay rate would not permit a retroactive increase
in pay, even though approval delay was caused by agency error.
It is our view that the situation described in the present case is
indistinguishable from the Murphy case. As a result, we consider that
case to be controlling and Ms. Baron's claim may not be certified for
payment.
Acting Comptroller General of the United States
FILE: B-219968.2 85-2 CPD 679
DATE: December 17, 1985
MATTER OF: Hare Road & Bridge Construction Company
BIDDERS - RESPONSIBILIITY V. BID - RESPONSIVENESS - CONTRACTORS WORK
FORCE - PERCENTAGE USE REQUIREMENT
Agency acted improperly in failing to refer its rejection of a small
business low bidder to the Small Business Administration because it
erroneously concluded that a solicitation provision requiring the
contractor to perform 33-1/3 percent of the project with its own work
force concerned the responsiveness of the bid rather than the bidder's
responsibility.
Hare Road & Bridge Construction Company, an Indian-owned small
business, protests the rejection of its bid as nonresponsive under
Bureau of Indian Affairs (BIA) solicitation No. H65-R-5-8. The
solicitation was a total Buy Indian set-aside for construction work on
the Turquoise Trail, a roadway located on the Hopi and Navajo Indian
Reservations in Arizona. Although award was made to the second low
bidder, the notice to proceed is being withheld pending our decision.
We sustain the protest in part and dismiss it in part.
The contracting officer rejected Hare's bid as "nonresponsive"
because he determined, based on information submitted by Hare after bid
opening, that Hare had not established that it would perform 33-1/3
percent of the work itself or that it had adequate financial capacity or
a satisfactory past performance record.
Hare protested the contracting officer's determination to the agency.
The agency responded, this time stating that Hare had not affirmatively
demonstrated its "responsibility" and affirmed the rejection of Hare's
bid. On August 22, 1985, Hare filed a protest with our Office
complaining that it had been improperly determined to be nonresponsible.
We dismissed the protest because it concerned a nonresponsibility
determination of a small business, a matter for the Small Business
Administration's (SBA) review under its certificate of competency (COC)
procedures. Bid Protest Regulations, 4 C.F.R. Section 21.3(f)(3)
(1985).
Hare subsequently applied to SBA to have that agency consider what
Hare thought was a negative responsibility determination under its COC
procedures. Although the record shows that BIA also referred the matter
to SBA, that agency, by letter dated September 9, returned the matter to
BIA "pending a contracting officer's decision as to the responsiveness"
of the bid. BIA then awarded the contract to the second low bidder,
Little Soldier Enterprises. This protest followed.
Hare argues that all three of the grounds cited by the contracting
officer in rejecting its bid are matters of responsibility, not
responsiveness. The protester, further disputes the contracting
officer's conclusions regarding its financial capacity, past performance
record and its capability to perform at least 33-1/3 percent of the work
itself. In addition, the protester complains that the solicitation
clause requiring the contractor to perform 33-1/3 percent of the work
was improper as it was established long before the project was planned
and was established without permitting the public to comment. As to the
latter contention, we dismiss it as untimely since it concerns an
alleged solicitation impropriety which was not raised until after bid
opening. Bid Protest Regulations Section 21.2( a)(1).
The agency concedes in its protest report, and we agree, that two of
the three reasons cited for the rejection of Hare's bid -- that firm's
alleged lack of a satisfactory record of performance and financial
capacity -- are matters of responsibility. The agency further admits
that the percentage of the work to be performed by the contractor may
also concern Hare's responsibility. We conclude for the reasons cited
below that the percentage of performance also involved a question of
responsibility, which like the other two, should have been referred to
SBA for review under its COC procedures.
The solicitation stated that the successful contractor would be
required to perform "on the site, and with its own organization," work
equivalent to at least 33-1/3 percent of the total. Hare did not take
exception to the requirement in its bid, and all the information upon
which the agency based its rejection of the bid was submitted after bid
opening.
We have held that provisions like this one, which require a
contractor to perform a certain percentage of the work with its own work
force, constitute contract performance requirements. Therefore, we
agree with the protester that compliance with such provisions relate to
bidder responsibility, that is, its performance capability, rather than
bid responsiveness, that is its promise to perform. Delta Elevator
Service Corp., B-208252, Mar. 23, 1983, 83-1 CPD Paragraph 299.
Under the Small Business Act, 15 U.S.C. Section 637(b)(7)(1982), a
small business may not be precluded from an award on the basis of a
nonresponsibility determination without referral of the matter to SBA
for final disposition under COC procedures. Oceanside Moving and
Storage, B-218075.2, May 23, 1985, 85-1 CPD Paragraph 591. Since SBA
has the final authority to issue a COC in these cases, our Office will
not, absent an allegation of fraud or bad faith, review the agency's or
the SBA's conclusions concerning the small business' responsibility. 4
C.F.R. Section 21.3(f)(3).
We therefore conclude that all three grounds cited by the contracting
officer for rejecting Hare's bid were matters of responsibility which
should have been referred to SBA under the COC procedures. Further,
since the protester has not alleged fraud or bad faith, Hare's
contention that BIA's evaluation of its responsibility was erroneous is
not for consideration by our Office. 4 C.F.R. Section 21.3(f)(3). We
recommend that BIA refer this matter to SBA. We further recommend that,
if SBA issues a COC, BIA terminate for the convenience of the government
the contract awarded to Little Soldier and make award to Hare.
The protest is sustained in part and dismissed in part.
Acting Comptroller General of the United States
FILE: B-219967.2 85-2 CPD 723
DATE: December 27, 1985
MATTER OF: Physicon, Inc.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - DISCUSSION WITH ALL
OFFERORS REQUIREMENT - "MEANINGFUL" DISCUSSIONS
1. While competitive range discussions must be meaningful, the
agency need not discuss weaknesses inherent in an offeror's judgment or
approach which, in order to correct, would require substantial proposal
revision and possibly lead to technical leveling. The content and
extent of meaningful discussions in a given procurement are matters
primarily for determination by the agency, and GAO will not question
such a determination unless it is clearly without a reasonable basis.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION - COST
REALISM ANALYSIS - REASONABLENESS
2. Agency's evaluation of cost proposals by scoring and comparing
estimated total contract costs, including estimated material and travel
costs that were provided to all offerors for purposes of preparing cost
proposals, is not unreasonable where the method used is consistent with
the evaluation scheme in the solicitation and provides a sound basis for
weighing the relative merits of the proposals.
CONTRACTS - PROTESTS - ALLEGATIONS - UNSUBSTANTIATED
3. Allegation that contract negotiator's subsequent statements show
that he gave greater weight to experience and responsibility than the
solicitation contemplated is denied where that individual did not
evaluate technical proposals and the agency made no adverse
responsibility determination.
Physicon, Inc. protests the rejection of its proposal under
solicitation No. DAA401-85-R-A980, issued by the U.S. Army Missile
Command, Redstone Arsenal, Alabama,
seeking scientific and technical support services for testing
electromagnetic and nuclear effects on weapons systems. Physicon
contends that the Army failed to conduct meaningful negotiations,
diluted the importance of cost, and gave undue weight to offeror
experience and responsibility during the evaluation process.
We deny the protest.
The Army issued the solicitation on April 29, 1985 as a small
business set-aside. The solicitation contemplated a 3-year time and
materials contract to provide an indefinite quantity of scientific and
technical support to the Army's Electromagnetic and Nuclear Effects
Group. This support includes operating and maintaining test facilities,
planning tests, collecting data, and running tests on weapons systems
for nuclear effects, electromagnetic pulse, electrostatic discharge, and
other analyses.
The solicitation provided that proposals would be evaluated on the
basis of three criteria, namely technical, total contract cost, and
management. Among these, cost was the most important, approximately 1
1/5 times more important than technical, and management was the least
important. In addition, offerors were required to show that personnel
education and experience satisfied minimum requirements of the
solicitation.
As to the technical factor, each offeror was required to demonstrate
its understanding and the adequacy of its proposal by outlining a
proposed method for handling a comprehensive hypothetical task. The
management factor was also evaluated on the basis of this hypothetical
task, although it was considered solely as a question of acceptability
and was not point-scored.
As to cost, the solicitation stated that total proposed cost would be
determined by multiplying the offeror's proposed labor rate by the
stated estimated labor hours for each labor category, and adding to that
(1) the offeror's material handling cost and indirect costs associated
with $5,100,000 in material costs, and (2) indirect costs associated
with $750,000 in travel costs.
Two firms, Physicon and Electro Magnetic Applications, Inc. (EMA),
submitted proposals by the designated June 7, closing date. On July 11,
following completion of technical and cost evaluations, the Army
requested best and final offers without entering into discussions with
either firm. Final offers were received shortly thereafter.
On August 20, the Army advised Physicon of a proposed award to EMA,
and Physicon timely protested that decision. On October 4, the Army
authorized award to EMA for reasons of urgency and provided notice of
that action to this Office. The Army subsequently debriefed Physicon,
and as a result, Physicon supplemented the issues previously raised in
its protest.
Physicon contends that because the Army accepted its technical
proposal as submitted, without conducting technical discussions of any
sort, the Army must have felt that Physicon's technical proposal did not
contain any major weaknesses or deficiencies. Alternatively, Physicon
argues, if the Army believed that Physicon's proposal was deficient,
those deficiencies should have been pointed out and Physicon given an
opportunity to improve its proposal. Hence, Physicon concludes, either
its technical proposal was so strong that discussions were unnecessary
or the Army failed to conduct meaningful negotiations.
In light of the Army's debriefing, in which certain deficiencies in
Physicon's proposal were identified, Physicon argues that at least some
of the perceived deficiencies in its technical proposal should have been
pointed out during discussions because they were susceptible to
improvement had they brought to the firm's attention. As examples,
Physicon points to the Army's criticism of Physicon's failure to show
how it would instrument a particular test (electromagnetic pulse) or to
show its methods for determining criteria for another test
(electrostatic discharge), matters which, Physicon argues, are readily
correctable. Because Physicon was not apprised of these deficiencies
and given an opportunity to revise its proposal, it believes the agency
improperly failed to conduct meaningful discussions with it.
Agencies generally must conduct written or oral discussions with all
responsible offerors within the competitive range. 10 U.S.C.A. Section
2305(b)(4)(B) (West Supp. 1985). This requirement can be satisfied only
when discussions are meaningful, TRS Design & Consulting Services,
B-214001, May 29, 1984, 84-1 CPD Paragraph 578, which means that
negotiators should be as specific as practical considerations will
permit. Tracor Marine Inc., B-207285, June 6, 1983, 83-1 CPD Paragraph
604. However, where the agency considers a weakness in a proposal to be
inherent in the offeror's management judgment, it is not always
necessary to include that matter in discussions. See Federal
Acquisition Regulation, 48 C.F.R. Section 15.610(d)(1) (1984). In this
regard, negotiators should not point out weaknesses resulting from an
offeror's lack of diligence, competence, or inventiveness in preparing
its proposal if such discussions will lead to technical leveling. Id.
We think the record supports the conclusion that the weaknesses in
Physicon's proposal were such that a substantial revision of Physicon's
approach would have been necessary, thus raising the possibility of
technical leveling had the agency's concerns with Physicon's proposal
been pointed out. In this respect, the evaluators' individual
assessments of the Physicon proposal are remarkably consistent. They
all conclude that, although Physicon is strong in the research and
analysis portion of the work, the firm and its employees lack experience
in conducting test in key areas and this lack of experience is elected
in insufficient understanding of how to design and conduct tests.
For example, one evaluator says Physicon has "analyzed the problems
to death, needs more testing with less analysis," "they have heavily
weighed their proposal towards analysis with not enough emphasis on
tests," and "very little experience in testing." Other evaluators
describe Physicon as "heavy in theory, weak in actual testing
experience" "lots of experience in EMP analysis, little in direct test,"
"too heavily analysis oriented," and "they seem to be more 'research'
oriented than 'test' oriented." Moreover, this deficiency in Physicon's
testing experience and understanding was the primary reason for the more
than 8 point difference out of a possible 45 points between the two
offeror's technical scores. EMA, on the other hand, was uniformly
evaluated as having both a very good understanding of all aspects of the
requirement and extensive testing experience.
In this context, the Army's specific concerns with various aspects of
Physicon's proposed testing approach are symptomatic of the Army's
underlying concern, i.e., that Physicon does not possess adequate
testing experience and understanding of how to design and conduct tests
in critical areas of activity. This would not have been cured by
directing the firm's attention to one or more of the specific weaknesses
in its testing approach. One evaluator noted that he believed that
Physicon's weakness in the testing field could be overcome during
contract performance with technical guidance by the agency, but that
this would entail a commitment of personnel and equipment use by the
Army. Thus, for there to have been any difference in the outcome,
Physicon would have had to be told to incorporate significant new
testing capability into its proposal; this, we think, would have
involved a major revision to its proposal and could appear to be
technical leveling. We therefore cannot agree that the Army failed its
obligation to conduct meaningful negotiations.
Physicon also argues that the Army's method for evaluating cost
imporperly reduced the significance of cost, primarily because the Army
included the government's fixed estimate for travel and material costs
in each offeror's total proposed cost. Physicon states that the only
reasonable interpretation of the RFP is that the offeror's proposed
costs would be compared excluding the agency's estimated material and
travel costs. The Army converted proposed costs to point scores by
assigning the maximum number of points to the lowest total cost
(Physicon's) and giving the second lowest (EMA's) a score based upon the
percentage difference between the two. Physicon points out that the
difference in the two firms' proposed costs becomes less significant
when more than $5 million in estimated material and travel costs are
added to each -- the absolute difference remains the same, but their
relative difference will be less.
The RFP does not require exclusion of estimated material and travel
costs in scoring proposals. The cost factor is stated to be "Total
Contract Cost," which clearly implies that all costs to be paid under
the contract will be included. In describing the evaluation of total
proposed cost, the RFP states that offerors are to compute "total
proposed costs" by multiplying loaded hourly labor rates times estimated
hours, and adding indirect material handling costs and indirect material
and travel costs. The solicitation does not state that this "total
proposed cost" rather than the "total contract cost" will be scored.
Since the Army will actually pay material and travel costs under the
contract, inclusion of those amounts in comparing estimated costs
provides a sound basis for weighing the relative merits of the
proposals. Thus, we cannot say that it is unreasonable for the agency
to compare estimated total contract costs, and we find nothing in the
RFP to require otherwise. Moreover, even if the Army had excluded
estimated travel and material costs from the cost evaluation, it is not
likely that it would have made a difference in the outcome in light of
the perceived difference in technical proposals since Physicon's score
would have been increased by less than one point.
Physicon asks us to review the reasonableness of the Army's cost
evaluation method. The firm argues that cost evaluation methods based
upon relative cost differences, such as the one used by the Army, dilute
the signifcance of the cost factor and are inconsistent with its
importance in the evaluation scheme. The protester states, for example,
that it is unreasonable to score two proposals closely when they are
$500,000 apart, even if they are relatively close in amount. In other
words, a $500,000 difference should generate a large point difference
whether the estimated costs are $15 and $15.5 million, or $5 million and
$5.5 million.
Agencies may use a variety of evaluation methods, including
normalizing methods, in evaluating cost proposals, so long as they
provide a reasonable basis for source selection. Francis & Jackson,
Assocs., 57 Comp. Gen. 244 (1978), 78-1 CPD Paragraph 79. There is
nothing inherently unreasonable about scoring the cost factor based upon
relative difference in cost proposals, so long as the use of such an
approach in a given case will not produce a distorted or irrational
result. See, e.g., First Ann Arbor Corp., B-194519, Mar. 4, 1980, 80-1
CPD Paragraph 170; Design Concepts, Inc., B-186125, Oct. 27, 1976, 76-1
CPD Paragraph 365. We do not find that the scores given the cost
proposals here are inconsistent with the relative merits of these
proposals or to the evaluation scheme set forth in the solicitation.
Consequently, we do not believe that the Army's cost evaluation method
was unreasonable.
Physicon further contends that the Army did not adhere to the
relative importance scheme stipulated in the solicitation and, instead,
gave undue weight to prior experience and responsibility. This
assertion is based on an alleged conversation with the Army's contract
specialist, who is reported to have said that Physicon "had not held any
government contracts and that was my concern."
The simple fact is that the contract specialist did not evaluate
Physicon's technical proposal for experience or otherwise, nor was
Physicon found to be nonresponsible. Hence, whatever may have been the
contract specialist's concerns, they were not translated into action
detrimental to Physicon.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-219961 85-2 CPD 722
DATE: December 27, 1985
MATTER OF: Arcwel Corporation
BIDS - PRICES - LEVEL PRICING CLAUSE - BID RESPNOSIVENESS
An unlevel low bid, submitted despite a solicitation requirement for
level pricing, is responsive unless it can be shown that the second-low
bidder conceivably could become low if it were permitted to unlevel its
bid in the same manner as the low bidder.
Arcwel Corporation protests the award of a multiyear contract for
boat cradles to Gallo Machine, Inc. under invitation for bids (IFB) No.
DAAJ10-85-B-A263, issued by the United States Army Troop Support
Command, St. Louis, Missouri. Arcwel, the second-low bidder, contends
that Gallo's apparent low bid was nonresponsive due to a failure to
follow solicitation requirements regarding level pricing.
Because we find that Arcwel was not prejudiced by Gallo's unlevel
bid, we deny the protest.
The Army issued the IFB on May 6, 1985, seeking a total of 816 boat
cradles. The solicitation was structured so that the first program year
requirement was for a base quantity of 93 production units (items
0001AA, 0001AB, 0001AC) and 3 first articles, i.e., pre-production units
(item 0001AD). The base quantity for the second, third, and fourth
program years was 96, 154, and 82, respectively.
The solicitation required bidders to submit the same unit price for
the base quantity (including the pre-production units in the first year)
for all 4 years. Unit prices for option quantities were to be equal to
or less than those for the base quantity. That is, the solicitation
required level pricing. /1/ Additionally, the solicitation provided
that bids would be evaluated by adding extended prices for base and
option quantities to prices for transportation of the cradles from the
contractor to the Army and transportation of government-furnished
equipment to and from the contractor's plant.
The Army opened bids on June 21, 1985. Gallo's low bid, originally
level-priced, had been modified by a TWX so that it was no longer level.
Rather, it was as follows:
TABLE OMITTED
From the above, it can be seen that Gallo failed to level price item
0001AD (the pre-production units) and items 0003, 0005, and 0007 (the
base requirement for the second through fourth years). If Gallo had
priced its bid in accord with the solicitation, it would have bid the
same price for item 0001AD as for items 0001AA, 0001AB, and 0001AC,
since each is a part of the definitive program quantity for the first
program year. Also, Gallo would have bid the same price for items 0003,
0005, and 0007, because each of these items represents a definitive
program quantity for later program years. Additionally, Gallo failed to
price the option year items, 0004, 0006, and 0008, at amounts equal to
or less than the base unit prices, as required by the solicitation.
Arcwel, on the other hand, level priced its bid, offering the same
unit price, $6,140, for each line item except the report, which it
priced at $800. Its transportation costs were evaluated at $342,159.
The total of these items, plus Arcwel's extended prices for the base and
option quantities over the 4 program years was $5,353,199. The Army,
however, concluded that Gallo's failure to level price its bid did not
make the bid nonresponsive, and it awarded Gallo the contract for the
first program year on July 31, 1985.
Arcwel alleges that it was prejudiced by the Army's acceptance of
Gallo's bid. Arcwel believes that had it been permitted to bid in the
same manner as Gallo, that is, by submitting an unlevel bid, it might
have been able to displace Gallo as the low bidder.
The purpose of a level pricing provision is to prevent bidders from
lowering their prices in evaluated portions of a bid and inflating their
prices in unevaluated portions -- to the government's detriment. In
cases dealing with a bidder's failure to level price its bid, the
determinative issue is not whether the bidder violated the level pricing
provision, but whether this deviation worked to the prejudice of other
bidders. Keco Industries, Inc., 64 Comp. Gen. 48 (1984), 84-2 CPD
Paragraph 491. /2/ Other bidders are only harmed by unleveling if they
could have become low by bidding in the same manner, that is by also
unleveling their prices. Id.
We do not believe this was the case here, since it does not appear
that Arcwel would have been low bidder even if it had the opportunity to
unlevel its prices. The highest of Gallo's unlevel unit prices, $6,135
(for the option quantity in the fourth program year), is still less than
Arcwel's level unit price, $6,140. Moreover, of the $187,329 difference
between the two bids, $112,944 represents the difference between
Arcwel's and Gallo's evaluated transportation costs, $342,159 and
$229,215, respectively. This more than offsets Gallo's failure to level
price the three pre-production units for which, as noted above, it bid a
unit price of $13,000. Arcwel does not dispute the fact that these
differences exist, and in our view, it is inconceivable that Arcwel
could have overcome them, even if it had been allowed to unlevel its
prices.
We conclude that even considering the effect of Gallo's unlevel
pricing, Arcwel would not have been low bidder. Therefore, we find that
the Army acted properly in accepting Gallo's unlevel bid.
The protest is denied.
Harry R. Van Cleve
General Counsel
(1) The Federal Acquisition Regulation (FAR) generally provides for
the amortization of costs in multiyear contracts, resulting in identical
or level unit prices. FAR, 48 C.F.R. Section 17.102-3 (1984).
(2) In Keco, option prices were evaluated for purposes of award as
here. We suggested that the failure to level price pre-production units
in the first year could cause prejudice to other bidders analogous to
those cases where a true level option pricing provision was violated.
FILE: B-219956.2 85-2 CPD 656
DATE: December 13, 1985
MATTER OF: ATF Construction Company, Inc. -- Reconsideration
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES - FILING
PROTEST WITH AGENCY
Dismissal of protest because of failure to file copy of protest with
the contracting agency within 1 day of filing with GAO as required under
Bid Protest Regulations is affirmed, notwithstanding protester's
assertion that it relied on advice allegedly provided by GAO attorney.
ATF Construction Company, Inc. (ATF), requests reconsideration of our
dismissal of its protest of the Army's determination that its bid under
solicitation No. DABT10-85-B-021B was nonresponsive. We affirm the
dismissal of ATF's protest.
ATF filed its protest with our Office on August 22, 1985, after
receiving verbal notice that the Army would find its bid nonresponsive.
We dismissed ATF's protest on September 5, 1985, because ATF had not
furnished a copy of its protest with designated contracting agency
personnel within 1 day after the protest was filed with us, as required
under our Bid Protest Regulations. 4 C.F.R. Section 21.1(d) (1985).
ATF asks that we reopen its protest on the basis that it was acting
in accordance with instructions from our Office when it failed to file a
copy of its protest with the Army. In this respect, ATF states that it
spoke by telephone with an attorney in our Office who advised ATF not to
send a copy of its protest to the designated Army personnel until ATF
received notice that it was nonresponsive.
We are unwilling to accept ATF's characterization of the advice it
allegedly received. Although the particular attorney does not recall
the details of the conversation, he specifically denies ever advising
any party filing a protest with this Office not to furnish a copy of the
protest to the contracting agency as required by our regulations. We
think it is highly unlikely that one of our attorneys would have given
advice on such a fundamental question which so clearly conflicts with
the explicit language of the regulation. In our view, it is far more
likely that ATF misunderstood general advice regarding the protest
filing requirements established in our regulations.
The dismissal is affirmed.
Harry R. Van Cleve
General Counsel
FILE: B-219953 85-2 CPD 678
DATE: December 17, 1985
MATTER OF: American Davey Corporation
BIDS - REJECTION - PROPRIETY
Low bid in which F.O.B. origin and destination prices obviously are
reversed must be rejected, even though the bidder confirmed its prices,
where the bid would not be low if corrected.
American Davey Corporation (Davey) protests the proposed rejection of
its bid under invitation for bids (IFB) No. DAAA09-85-B0189 by the Army.
We deny the protest.
The IFB requested bids to supply a quantity of cylinder assemblies,
and asked for prices on both F.O.B. destination and F.OB. origin bases,
with and without first article approval. Davey's bid was as follows:
CHART OMITTED
The Army determined that an award requiring first article approval
was in the government's best interest, and Davey's F.O.B. Destination
price with first article approval was low. The Army noted, however,
that Davey apparently had transposed its prices for F.O.B. Destination
and F.O.B. Origin with first article approval, and that if corrected,
Davey's bid would not be low.
The Army advised Davey by letter that Davey apparently had reversed
its F.O.B. origin and destination prices by mistake. An obvious
reversal of F.O.B. origin and destination prices is correctable as an
apparent mistake under the provisions of the Federal Acquisition
Regulation, 48 C.F.R. Section 14.406-2(a)(3) (1984), if the bidder
verifies the intended bid. In response to the Army's letter, however,
Davey confirmed its bid as stated in the IFB.
The Army contends that this situation gave Davey the discretion to
either accept or decline award of the contract by deciding whether or
not to seek correction of its bid. The Army asserts that in these
circumstances, Davey should not be permitted to waive its error. Davey
states that this principle shouldn't be applied here because Davey had
no knowledge of the other bids.
We agree with the Army. We have held previously that bidders may not
be permitted the discretion, after prices have been revealed, to select
between two prices, one of which results in award and one which doesn't,
since this would afford them as unfair advantage over other bidders.
Hudgins Constr. Co., Inc., B-213307, Nov. 15, 1983, 83-2 CPD Paragraph
570. Under such circumstances, a bid containing an obvious error may
not be accepted even if it is verified. 51 Comp. Gen. 498 (1972).
Moreover, preservation of the integrity of the competitive procurement
system requires application of this basic principle, once bids have been
disclosed at a public opening, without regard to whether the bidder
verifying its mistaken bid had actual knowledge of the other bids.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-219952.2 86-1 CPD 42
DATE: January 15, 1986
MATTER OF: U.S. Shutter Co. -- Reconsideration
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF COMMENTS ON AGENCY'S REPORT
Dismissal of original protest is affirmed, and protest will not be
reopened, where protester failed to file comments on agency report or
request a decision based on the existing record within 7 working days
after receiving the agency report as required by our Bid Protest
Regulations.
U.S. Shutter Co. requests reconsideration of our dismissal of its
protest, B-219952, under solicitation No. DOE/ER-0180/1 for Small
Business Innovative Research issued by the Department of Energy. We
dismissed U.S. Shutter's protest of the rejection of its proposal
because the protester did not file written comments on the agency's
administrative report, or a written statement of continued interest in
the protest, within 7 working days from the date the company received a
copy of the report. We affirm the prior dismissal.
In the request for reconsideration, the protester contends,
essentially, that it was not adequately informed by our Office
concerning our procedures; that neither the Competition in Contracting
Act of 1984 (CICA) (31 U.S.C.A. Sections 3551 et seq. (West Supp.
1985)), nor our Bid Protest Regulations are clear as to the time limits
for filing protester comments on the administrative report; that its
response was received late because it was in the course of delivery over
a weekend and a federal holiday; and that it has been unfairly
"penalized" (by the dismissal of its protest) since the contracting
agency was not penalized for the protester's receipt of the
administrative report 3 days after it was received by our Office.
U.S. Shutter's protest was filed in our Office on August 22, 1985.
On the same date, we informed the protester of the requirement, under
our published Bid Protest Regulations, 4 C.F.R. Section 21.3(e) (1985),
that, within 7 working days of its receipt of the administrative report,
its written comments responding to the report or requesting that the
case be decided on the existing record, must be submitted to our Office.
The notice further advised the protester that if its written response
to the report was not received in our Office by the 7th working day, we
would close our files on its protest.
The Department of Energy timely filed its administrative report with
our Office on September 27; the protester, however, did not receive the
report until October 2. We closed our file in the matter on October 15
because we had not heard from the protester in response to the report.
Subsequently, we received the protester's comments on the report; the
envelope in which the response was sent showed that it was mailed on the
date it should have been received in our Office.
The protester correctly states that the specific "time limits imposed
for the receipt of protester comments to the agency report" are not
addressed in CICA. Rather, the statute authorizes the Comptroller
General to prescribe "such procedures as may be necessary to the
expeditious decision of protests" and requires that these procedures
"provide that the protest process may not be delayed by the failure of a
party to make a filing within the time period provided for the filing."
31 U.S.C. Section 3555(a). Consistent with this statutory mandate, our
Bid Protest Regulations limit the time for the protester to file a
statement indicating continued interest in a protest to 7 working days
after receipt of the agency report. 4 C.F.R. Section 21.3(e). This, as
well as other filing deadlines, are imposed to assure prompt resolution
of protests. Rampart Services, Inc. -- Reconsideration, B-219884.2,
Oct. 29, 1985, 85-2 C.P.D. Paragraph 481. It is our policy not to
reopen a protest file where the protester has failed to respond in a
timely manner to the report, since to do so would be inconsistent with
that purpose. Jowa Security Services, Inc. -- Reconsideration,
B-219355.3, Oct. 18, 1985, 85-2 C.P.D. Paragraph 422.
The protester states that it is not clear from our Bid Protest
Regulations whether the term "filed" means receipt in our Office or
"proof that the comments have been submitted (i.e., by certified mail)"
to our Office. However, our regulations specifically state that,
regarding bid protests at the General Accounting Office, the term
"filed" means receipt of the protest submission in this Office, see 4
C.F.R. Secion 21.2(b), and we have specifically held that this
requirement applies to the submission of protester comments on the
agency report. See Silent Hoist & Crane Co., Inc. -- Request for
Reconsideration, B-220326.2, Dec. 16, 1985, 85-2 C.P.D. Paragraph . . .
; Coliseum Construction, Inc., B-218881.2, July 24, 1985, 85-2 C.P.D.
Paragraph 78.
Although the protester also attributes late receipt of the response
in our Office to its being in the course of delivery over a weekend and
a federal holiday, as we noted previously, the response was not mailed
until the date it was due in our Office. Finally, while the protester
also complains that our dismissal of its protest was an unfair penalty
because the protester received the agency report 3 days later than we
did, the protester in fact was allowed a full 7-day period after it
received the report within which to file its response; therefore, it
was not prejudiced by when it received the report.
The dismissal of the protest is affirmed.
Harry R. Van Cleve
General Counsel
FILE: B-219945 85-2 CPD 287
DATE: September 12, 1985
MATTER OF: Model Industries, Inc.
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
1. Contention that a specification for a brand name or equal product
unduly restricts competition involves an alleged defect apparent from
the face of a solicitation, and any protest on this basis must be filed
before bid opening or the closing date for receipt of initial proposals.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - DISCUSSION WITH ALL
OFFERORS REQUIREMENT - FAILURE TO DISCUSS - SITUATIONS NOT REQUIRING
DISCUSSION
2. Where, in response to a solicitation specifying a brand name or
equal product, protester clearly indicates its intention to provide a
product that does not conform to the salient characteristics listed in
the solicitation, agency's failure to hold discussions with protester or
request its best and final offer is not legally objectionable, since
discussions would not have cured design and dimensional deviations.
Model Industries Inc. protests the award of a contract to Kennedy
Manufacturing Company under request for proposals (RFP) No.
FEP-CN-PN3408-N-7-25-85, issued June 25, 1985 by the General Services
Administration (GSA) for tool cabinets. Model contends that the
purchase description, as written, unnecessarily restricts competition
and favors the brand name Kennedy cabinet. The protester also asks why
its unit, which was acceptable a year ago, is not acceptable now, and
questions GSA's rejection of its proposal without requesting a best and
final offer.
We dismiss the protest.
The RFP, which was issued as a total small business set-aside,
specified Kennedy model No. 3408 or equal. The solicitation contained
the standard clause stating that any offers proposing "equal" products
would be considered for award if the products met the salient
characteristics listed in the RFP. Model offered its eight-drawer
roller cabinet and indicated that its unit would be in accord with a
sketch included with its offer. After reviewing this information, GSA
apparently concluded that the unit offered by Model was not an "equal"
and therefore rejected it.
Model's contention that the purchase description unnecessarily
restricts competition is untimely, since this ground of protest was
evident from the face of the solicitation. Under our Bid Protest
Regulations, protests based on alleged improprieties in an RFP must be
filed before the closing date for receipt of initial proposals. 4 C.F.
R. Section 21.2(a)(1) (1985); Jarrett S. Blankenship Co., B-213473,
June 25, 1984, 84-1 CPD Paragraph 662. Since Model's protest was not
filed until after the closing date, we will not consider this issue.
From the material submitted with the protest, we see that Model
offered a cabinet with a width of 34-9/16 inches, whereas the
specifications required a width of 34 inches. This exceeded the stated
1/2 inch tolerance on overall dimensions. Further, the specifications
required that the drawers operate on 18 gage, 2-piece I beam slides and
be capable of being opened to the fully-opened position. The
information that Model supplied with its offer, copies of which it also
has attached to its protest, does not indicate that the firm intended to
furnish 2-piece I beam slides. According to Model's protest letter, the
firm intended to furnish a 1-piece slide.
When, in a brand name or equal procurement, precise dimensions or
other characteristics are specified, we assume that these are material,
and items that are merely functionally equivalent are not acceptable.
CFE Equipment Corp., B-203082, May 29, 1981, 81-1 CPD Paragraph 426.
Here, the 2-piece requirement was a salient characteristic, and Model's
failure to indicate compliance with this requirement, along with the
slight dimensional deviation, resulted in Model's offer being rejected.
In view of the firm's intention, expressed in its offer and its protest
letter, to provide a product that was not technically acceptable, we do
not believe GSA's failure to conduct discussions with and request a best
and final offer from Model is legally objectionable or prejudicial to
Model. Clearly, discussions would not have cured the design and
dimensional deviations in the cabinet that Model offered.
The protest is dismissed.
/s/ Ronald Berger
Deputy Associate General Counsel
FILE: B-219938 85-2 CPD 692
DATE: December 20, 1985
MATTER OF: Roy Bennett
BIDDERS - IDENTITY - SUFFICIENCY
1. Bid submitted in the name of an unincorporated entity, signed by
an individual as "owner," is responsive and sufficient to obligate the
entity as a sole proprietorship, notwithstanding the bidder's submission
after bid opening of an erroneous certification of incorporation.
BIDS - RESPONSIVENESS - FAILURE TO FURNISH SOMETHING REQUIRED -
STANDARD REPRESENTATIONS AND CERTIFICATIONS - WAIVER - AS MINOR
INFORMALITY
2. The failure to include completed standard representations and
certifications does not affect the bidder's material obligation and,
therefore, may be waived as a minor informality.
Roy Bennett protests the proposed award of a contract to G.C. Self by
the Army under invitation for bids (IFB) No. DAKF24-85-B-0088. We deny
the protest.
The contract is for hauling at Fort Polk, Louisiana. G.C. Self
submitted only the cover page to the IFB and one additional page on
which Mr. Self noted his DUNS number (a commercial identification number
assigned to a business by Dun & Bradstreet, Inc.). The bid was
submitted in the name of Self Diesel Service and signed "G.C. Self
Owner." At the Army's request, G.C. Self returned completed copies of
the IFB's representations and certifications, including a certification
to establish the authority of the signature on the bid to bind a
corporate bidder. Mr. Self checked a box representing that the bidder
was a corporation and stated that the corporation operated under
Louisiana law. The certification of incorporation, however, stated his
name as "owner." Believing that Self Diesel Service was a corporation,
the Army informed Mr. Self that he had incorrectly executed the
corporate certification and requested a corrected one. G.C. Self then
submitted a certification executed by Ray Self, Secretary, certifying
that G.C. Self was the president of the corporation. G.C. Self
subsequently explained that the bid was submitted by a sole
proprietorship, not a corporation.
Roy Bennett asserts that the bid is unacceptable because G.C. Self's
certification was provided late and because there is no corporation
under the laws of Louisiana named "Self Diesel Service Company" which
could have authorized G.C. Self to bid on its behalf. Roy Bennett
contends that G.C. Self's bid therefore must be rejected. Further, Roy
Bennett argues that the bid is nonresponsive for failure to include the
standard representations and certifications provisions of the
solicitation.
The Army contends that the bid was submitted in the name of G.C.
Self - Owner, as a sole proprietorship with no indication that it was
intended to be a corporate bid, and that Roy Bennett's arguments
regarding G.C. Self's corporate status therefore are irrelevant. The
Army states that Mr. Self evidently regarded the certification of
incorporation included in the solicitation as requiring him to show
evidence of incorporation regardless of whether the bid was submitted by
a corporation or not. Since, as the protester points out, there is no
corporation named Self Diesel Service, the Army maintains that the
erroneous representations and certifications submitted after bid opening
do not affect the propriety of an award to G.C. Self as a sole
proprietorship. The Army also states that there is a Louisiana
corporation in the name of "G.C. Self, Inc." which demonstrates that Mr.
Self's attempted representations of corporate status were in good faith.
We agree with the Army. Where it is possible to identify
sufficiently the actual bidder so that the bidding entity would not be
able to avoid an award or to substitute parties, the bid may be accepted
if it is otherwise responsive. See Industrial Design Labs, Inc., 64
Comp. Gen. 8 (1984), 84-2 CPD Paragraph 413. The Army, notwithstanding
some initial confusion, clearly established that the bidder is a sole
proprietorship and there is no corporation for which the bidder can be
mistaken. The bid explicitly incorporates all of the provisions of the
IFB and, therefore, is sufficient to obligate Self Diesel Service, in an
unincorporated capacity as a sole proprietorship, to the IFB's material
terms. Executive-Suite Services, Inc., B-185935, Aug. 2, 1976, 76-2 CPD
Paragraph 109. The bid therefore is responsive. Furthermore, we point
out that the bid's failure to include completed standard representations
and certifications does not affect the bidder's material obligations
and, therefore, may be waived as a minor informality. See Jersey Maid
Distributors, Inc., B-217307, Mar. 13, 1985, 85-1 CPD Paragraph 307.
The bid therefore is responsive and the Army properly may accept the
bid submitted by Mr. Self.
Harry R. Van Cleve
General Counsel
FILE: B-219934.2 86-1 CPD 242 DATE: March 12, 1986
MATTER OF: CDI Marine Company
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES - FILING
PROTEST WITH AGENCY
1. Dismissal for failure to furnish agency copy of protest
within 1 day of filing at GAO as required by GAO Bid Protest
Regulations 4 C.F.R. Sec. 21.1(d) (1985), is not warranted where
agency is already on notice of bases for protest, through prior
letter from protester to agency, and agency is able to submit
protest report within time limit prescribed under Competition in
Contracting Act, 31 U.S.C.A. 3553(b) (2) (A) (West Supp. 1985).
CONTRACTS - PROTESTS - INFORMATION EVALUATION - SUFFICIENCY OF
SUBMITTED INFORMATION
2. It would not be appropriate to dismiss protest for failure
to cite any legal authority or request specific relief where
protest provides all information essential to protest.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTOR
3. Contention that protester was misled in negotiations about
the adequacy of its proposal, first raised in protester's comments
on agency report, is untimely where protester knew of content of
negotiations when it filed initial protest and that its proposal
had not received highest rating. GAO Bid Protest Regulations
require that protests be filed within 10 days of when protester
knew or should have known of basis for protest. 4 C.F. R. Sec.
21.2(a)(2).
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
TECHNICAL ACCEPTABILITY - ADMINISTRATIVE DETERMINATION
4. Contention that evaluation of technical proposals in
procurement of marine engineering and design services was improper
is without merit where record demonstrates that awardee, including
subcontractor, may reasonably be judged to have offered superior
personnel and corporate experience to that proposed by protester.
Absent prohibition in RFP, proposed subcontractor's experience and
personnel may be considered in evaluation.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
5. Where transition costs were not included among the
evaluation criteria, they could not be considered. Consequently,
protest against agency's failure to consider transition costs, not
raised until protester learned of impending award to another
offeror, is untimely because not raised prior to closing date for
receipt of proposals. GAO Bid Protest Regulations require that an
impropriety apparent on the face of a solicitation be filed prior
to the next closing date of solicitation. 4 C.F.R. Sec. 21.2(a)(
2).
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION - COST
REALISM ANALYSIS - REASONABLENESS
6. Challenge to agency's conduct of cost realism evaluation,
which raised protester's costs, is denied where cost was the least
important evaluation factor and protester has not responded to
specific contention that it would not have been selected even if
its proposed costs were realistic or provided evidence that it
could have reduced its costs suff iciently to overcome awardee's
substantial technical advantage.
CDI Marine Company (CDI), the previous contractor, protests the award
of a contract to Marine Services Company (MSC) under request for
proposals (RFP) No. N00140-85-R-BB71 issued by the Department of the
Navy. The protest is dismissed in part and denied in part.
Background
The Navy issued this RFP on July 6, 1984, to acquire marine
engineering and design services to support the Supervisor of
Shipbuilding (SUPSHIP) in Boston. The RFP identified and described
various categories of personnel for which offerors were to propose
hourly labor rates. In addition, offerors were to select from their
personnel at least a minimum number of "key" personnel and provide
resumes and the hourly labor rates for those personnel. The RFP
contemplated the award of a 3-year indefinite-delivery, requirements
contract on a cost-plus-fixed-fee basis.
The RFP specified the evaluation factors, in descending order of
importance, as: (1) personnel, (2) Corporate past experience, (3)
Technical approach/ quality assurance program, (4) Facilities, and (5)
Cost. Cost was to be evaluated on the basis of cost realism. The Navy
received seven proposals. After a technical evaluation by SUPSHIP, the
Navy conducted discussions with offerors in the competitive range and
set the date for the receipt of best and final offers (BAFOs) at July 9,
1985.
The results of evaluation were as follows:
Offeror . Technical Rating .. BAFO ....... Cost Realism
MSC ..... Highly Acceptable . $5,523,132 ... $5,636,340
CDI ..... Acceptable ........ $4,930,850 ... $5,853,784
The Navy awarded the contract to MSC on the basis of MSC's higher
technical rating and lower evaluated cost.
CDI learned of the impending award in a telephone conversation with
Navy personnel in which CDI was advised that MSC had received a higher
overall technical evaluation, especially in the areas of personnel and
corporate past experience, and had a lower evaluated cost. CDI presented
a letter to the Navy on the same day in which CDI expressed its intent
to protest the award. In this letter, CDI contended that, as the
incumbent, it had greater experience with the subject matter of this
particular contract than did MSC and that CDI was the technically
superior, lower cost offeror. CDI also asserted that the Navy failed to
consider the transition costs of moving to a new contractor in its
evaluation and argued that the Navy should have awarded the contract to
CDI.
CDI filed a protest with our Office on substantially the same bases
as expressed in its letter to the Navy. After the Navy's report on CDI's
protest was filed with our Office, CDI requested and received a
debriefing from the Navy. In its comments on the Navy report, CDI
asserted that the Navy's cost realism methodology was improper and
contended that it was misled in negotiations regarding the nature of the
cost realism evaluation and into believing that its proposal required no
further correction or expansion.
The head of the procuring activity authorized contract performance,
notwithstanding the pending protest, under the provisions of the
Competition in Contracting Act (CICA), 31 U.S.C.A. 3553(d) (2)(A) (1)
(West Supp. 1985).
Procedural Questions
Initially, the Navy states that it did not receive a copy of CDI's
August 20 protest to our Office until 2 days after it was filed and
asserts that CDI's protest therefore should be dismissed for failure to
comply with our Bid Protest Regulations, 4 C.F.R. part 21 (1985), which
require that a protester file a copy of its protest with the contracting
officer or designee within 1 day after the protest is filed with our
Office. 4 C.F.R. Sec. 21.1 (d). We do not automatically dismiss protests
on this basis, however, but consider whether the agency otherwise had
knowledge of the basis for the protest and was able to submit its
response to the protest within the time limits prescribed under CICA, 31
U.S.C.A. 3553(b) (2) (A). Colt Industries, B-218834.2, Sept. 11, 1985,
85-2 C.P.D. P 284.
In our judgment, the Navy was aware of the bases for CDI's protest
when it was filed with our Office, notwithstanding the absence of a
timely copy, because the Navy already had CDI's earlier letter, stating
virtually the same objections. Moreover, the 1-day delay in the Navy's
receipt of a copy of the protest does not appear to have hampered the
Navy's ability to file its response to the protest in a timely manner.
In these circumstances, we do not think that the dismissal of the
protest on this basis is warranted.
The Navy also contends that CDI's protest should be dismissed because
CDI's initial protest to our Office failed to cite any legal authority
for CDI's challenge to the Navy's evaluation of proposals or to request
specific relief. In this respect, our regulations require a protester to
set forth a detailed statement of the legal and factual grounds of
protest, including copies of relevant documents, and state the form of
relief requested. 4 C.F.R. Secs. 21.1(c)(4), 21.1(c)(5).
Although CDI's initial protest was not exhaustive, it did identify
the contracting agency, solicitation, and work to be performed, and it
did assert that CDI was the most technically qualified and
cost-effective offeror based on a brief description of its experience,
level of staffing, and qualifications vis-a-vis MSC's, as well as on the
cost difference between CDI's and MSC's BAFOs. The protest also objected
to the Navy's failure to consider transition costs, and requested a
ruling by our Office on the propriety of the award.
In our opinion, this was adequate to provide the information
essential to CDI's initial protest against the Navy's evaluation of the
proposal. Cf. John C. Grimberg Company, Inc.--Reconsideration,
B-219422.2, Aug. 7, 1985, 85-2 C.P.D. P 143. Consequently, it would not
be appropriate to dismiss CDI's protest on this basis.
Nevertheless, some aspects of CDI's protest are untimely under our
regulations. CDI's contention that it was misled in negotiations about
the technical merit of its proposal and a related assertion that CDI was
downgraded for corrections to its proposal that the Navy instructed CDI
to make are untimely. Our regulations require that protests be filed
within 10 working days after the protester knew or should have known of
the basis for the protest. 4 C.F.R. Sec. 21.2(a) (2). Each new basis of
protest raised after the filing of an initial protest must independently
satisfy the criterion. Westinghouse Electric Corp., B-215554, Sept. 26,
1985, 85-2 C.P.D. P 341; Radionic Hi-Tech, Inc., B-219116, Aug. 26,
1985, 85-2 C.P.D. P 230. These allegations arise from Navy comments made
during negotiations and the fact that CDI's proposal was not rated as
highly as MSC's in the key areas of personnel and corporate experience.
CDI was aware of these factors no later than August 14, 1985, when CDI
learned of the impending award of the contract to MSC and the fact that
MSC's proposal was evaluated higher than CDI's, "especially in the areas
of personnel and corporate experience." Since CDI did not raise these
bases for protest until its comments on the Navy's report, these bases
for protest are untimely. Radionic Hi-Tech, Inc., B-2191 16, supra.
Technical Evaluation
CDI's initial protest, which emphasizes CDI's lower proposed costs,
staff qualifications and experience as the incumbent, and its assertion
that the awardee relied in part on a subcontractor to enhance its own
experience, is a challenge of the Navy's evaluation of proposals.
We have held that the determination of the needs of the government
and the best method of satisfying those needs is primarily the
responsibility of the procuring agency, 46 Comp. Gen. 606 (1967), which
therefore is responsible for the overall determination of the
desirability and adequacy of technical proposals. Agencies enjoy a
reasonable degree of discretion in making these determinations, and we
will not question their determinations unless there is a clear showing
of unreasonableness, an arbitrary abuse of discretion, or a violation of
the procurement statutes and/or regulations. Westinghouse Electric
Corp., B-215554, supra.
We find that the Navy's technical evaluation was reasonable. As noted
above, the RFP identif ied personnel and corporate experience as the two
most important evaluation criteria. In responding to these factors,
offerors were required to provide resumes of their "key" personnel,
identifying their experience as it relates to the contract work. They
also were required to discuss the offeror's corporate management and
organizational capability and versatility in all types of naval ship
engineering, as demonstrated in contracts completed within the preceding
5 years. MSC's proposal, including the resources of its
subcontractor--an organization with almost three times as many years of
experience as either MSC or CDI--offered what the Navy considered to be
generally better qualified key project and key senior engineers. In
addition, MSC proposed more than three times as many senior engineers in
a variety of related disciplines. The Navy considered MSC's mix and
breadth of disciplines to be the best of any offeror and concluded that
MSC's proposal was "highly acceptable" while CDI's was "acceptable"
under the Personnel criterion.
The Navy also viewed MSC's experience--with specific reference to
MSC's subcontractor--to be superior to CDI' s, particularly when
considered in light of quality problems which the Navy found in CDI's
performance under the prior contract. The consideration of the extensive
experience of MSC's subcontractor was proper since it was reasonably
related to the announced past experience criterion and was not
prohibited by the evaluation plan in the RFP. Rolen-Rolen-Roberts Int'
1, et al., B-218424.2 et al., Aug. 1, 1985, 85-2 C.P.D. P 113.
In our judgment, the Navy's assessment of these factors was
reasonable. These bases for protest are denied.
Regarding the protester's contention that the Navy should have
evaluated the transition costs of changing contractors, transition costs
may be an evaluation factor in appropriate circumstances but, because
they are a significant cost factor, an agency may only evaluate them if
offerors were advised such costs would be evaluated. See Rockwell Int'l
Corp, 56 Comp. Gen. 905 (1977), 77-2 C.P.D. P 119; Ecology and
Environment, Inc., B-209516, Aug. 23, 1983, 83-2 C.P.D.P 229. Since it
was obvious that the RFP did not contemplate the consideration of
transition costs, any protest that such costs must be considered should
have been filed prior to the closing date for receipt of proposals. 4
C.F.R. Sec. 21.2(a) (1); Olympic Container Corp., B-219424, July 24,
1985, 85-2 C.P.D. P 83.
This basis for protest is dimissed.
Cost Realism
The Navy states that it conducted its cost realism analysis using the
average direct labor rates for proposed personnel times the number of
hours of labor estimated for that category unless the offeror proposed
to use some "key" personnel within a category, in which case the average
labor rates of "key" personnel were used and non-key personnel were
disregarded. The Navy asserts that CDI was apprised of this method of
analysis in negotiations and has provided a statement from its
negotiator in support of this assertion. The Navy also asserts that
given the paramount importance of technical factors in the evaluation,
CDI would not have been selected even if its proposed costs were
considered realistic.
CDI contends that it advised the Navy in negotiations that this
method of analysis would distort the evaluation, because it would
emphasize the higher salaries of key personnel, and understood the Navy
to respond affirmatively, which CDI took to mean that the Navy would
change the method of evaluation. In support of this contention, CDI has
provided an affidavit from its negotiator and a copy of its minutes of
the negotiating session, purportedly reflecting CDI's understanding of
the cost realism evaluation, which CDI states it furnished to the Navy
shortly after the negotiations and to which the Navy never responded.
CDI contends that the Navy's cost realism evaluation method was
unreasonable and states that had CDI known of the basis for the
evaluation, it would have adjusted its BAFO to assure its position as
the lowest cost offeror.
We find that the question of what CDI may have been told or should
have understood from the negotiations need not be resolved since there
is no persuasive evidence that CDI was prejudiced regardless of the
answer. As stated in the RFP, cost was the least important evaluation
factor and CDI has neither responded to the Navy's specific assertion
that CDI would not have been selected even if its proposed costs were
reasonable nor provided evidence that it could have reduced its
realistic costs sufficiently to overcome MSC's substantial technical
advantage in the areas of personnel and corporate experience.
Consequently, we have no basis upon which we might conclude that CDI was
prejudiced by the Navy's conduct of the cost realism evaluation.
Southwestern Bell Telephone Co., B-200523.2 et al., Mar. 5, 1982, 82-1
C.P.D. 203.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
FILE: B-219931 DATE: November 5, 1985
DIGEST
RETIREMENT - CIVILIAN -REEMPLOYED ANNUITANTS - ANNUITY DEDUCTION -
VALIDITY
Administrative Office of the United States Courts questions whether
retirement benefits authorized by 28 U.S.C. Secs. 611, 627, and 677 for
certain officials of the judicial branch may be paid to an eligible
official who accepts post-retirement employment in government service.
The Administrative Office is advised that full retirement benefits may
be paid to such an official because nothing in the applicable
legislation requires suspension or reduction of annuity payments in the
event of the annuitant's reemployment. Furthermore, we have no legal
objections if a reemployed annuitant wishes to temporarily waive the
retirement benefits payable to him under 28 U.S.C. Secs. 611, 627, or
677, during the period of reemployment.
November 5, 1985
The Honorable L. Ralph Mecham
Director, Administrative Office of
the United States Courts
Dear Mr. Mecham:
By letter dated August 19, 1985, you requested our opinion concerning
the payment of retirement benefits to certain officials of the judicial
branch who have elected coverage by the special retirement system
established in 28 U.S.C. Secs. 611, 627, and 677 (1982). Principally,
you question whether the Administrative Office of the United States
Courts, charged with responsibility for administering the special
retirement system, may pay an annuity to an eligible official who
accepts post-retirement employment with the Federal Government. For the
reasons explained below, it is our view that the Administrative Office
may pay an eligible official the full retirement benefits authorized by
28 U.S.C. Secs. 611, 627, and 677, notwithstanding the annuitant's
acceptance of another position in government service.
As you note in your letter, the respective provisions of 28 U.S.C.
Secs. 611, 627, and 677 authorize a special retirement plan for the
Director of the Administrative Office, the Director of the Federal
Judicial Center, and the Administrative Assistant to the Chief Justice
of the United States. The terms of the noncontributory retirement plan,
as outlined in 28 U.S.C. Sec. 611 1/, are as follows. Within 6 months
after taking office, an eligible official may elect coverage under the
special retirement plan and waive coverage by the Civil Service
Retirement System. Under the special plan, an official who has
performed at least 15 years of qualifying service and attained age 65
may retire with a lifetime annuity equal to 80 percent of his salary at
the time of retirement. A covered official who has served for at least
10 years, but has not met the above-described age and service
requirements, may retire with a reduced annuity based on the formula set
forth in the statute. Further provision is made for the retirement of
covered officials who become disabled before meeting the prescribed age
and service requirements.
You note that the statutory provisions described above do not address
the situation of a covered official who, following retirement, accepts
employment in another government position. Anticipating that this
situation may arise, you pose the following questions: (1) may the
Administrative Office pay the full retirement benefits authorized by 28
U.S.C. Sec. 611 to an annuitant who accepts employment in another
government position; and (2) if so, may the retired official waive his
entitlement to an annuity during the period of continued government
service, with the proviso that annuity payments will resume upon
termination of that service?
By way of background to a discussion of your first question, we note
that there are a number of different programs governing the retirement
of federal employees. The statutes underlying some of these programs,
such as the Civil Service Retirement System, specifically provide that a
reemployed annuitant may not receive both retirement benefits and salary
during the period of reemployment. Thus, for example, under the
provisions of 5 U.S.C. Sec. 8344 (1982), an agency or department
reemploying an annuitant under the Civil Service Retirement System must
deduct an amount equal to the retiree's annuity payments from his
salary, and then deposit this amount into the Treasury for credit to the
Civil Service Retirement Fund. Similarly, a person receiving an annuity
under the Foreign Service Retirement System will, upon reemployment in
government service, have the annuity reduced based upon the formula set
forth in 22 U.S.C. Sec. 4064 (1982).
Other retirement statutes like the provisions pertaining to these
judicial officials do not require the withholding or reduction of
retirement benefits in the event an annuitant becomes reemployed, and we
have been confronted with the question whether retirement benef its must
be suspended during an annuitant's reemployment. We have noted that
there is no independent restriction on the payment of retirement
benefits concurrently with salary imposed by the dual employment and
dual compensation laws codified in 5 U.S.C. Secs. 5531-5537 (1982),
because a civilian retiree does not hold a position or receive
compensation within the meaning of those laws. See generally B-144579,
February 1, 1961, and Brunswick v. United States, 90 Ct. Cl. 285 (1940),
discussed below.
We recently held that, in the absence of specific statutory authority
requiring reduction or discontinuance of an annuity, retirement benefits
would not be reduced or suspended when the annuitant is reemployed in
government service. See B-204071, July 29, 1981. In B-204071, we
reexamined prior decisions and concluded we would no longer follow those
decisions holding that even in the absence of specific legislation, dual
payments of annuity and salary were inconsistent with federal retirement
policy. See 16 Comp. Gen. 121 (1936); and 14 Comp. Gen. 586 (1935).
Addressing your first question against this background, we find
nothing in the provisions of 28 U.S.C. Sec. 611 which would require
discontinuance or reduction of a retired judicial official's annuity in
the event he becomes reemployed in a position with another federal
agency under a different pay system. Therefore, in line with B-204071
and the decision in Brunswick, we conclude that the Administrative
Office may continue to pay full retirement benefits during the period of
an annuitant's reemployment.
Regarding your second question, we are aware of no legal authority
which would prohibit a reemployed official from temporarily waiving his
entitlement to the annuity payments authorized by 28 U.S.C. Sec. 611.
Although we have generally ruled that an individual may not waive the
salary fixed for his position by statute, the purpose of that rule is to
enforce 31 U.S.C. Sec. 1342 (1982) (formerly 31 U.S.C. Sec. 665b), which
prohibits the government from receiving voluntary services. See
generally 54 Comp. Gen. 393 (1974); and 27 Comp. Gen. 194 (1947).
Since the annuity payments authorized by 28 U.S.C. Sec. 611 are paid in
recognition of an official's past service, rather than as compensation
for current or future services, the prohibition against voluntary
services would not apply to a retired judicial official desiring to
waive annuity payments during a period of reemployment. Compare 31
Comp. Gen. 505 (1952), involving the retirement salary of a District of
Columbia judge who was subject to recall for duty each year.
The situation of these judicial officials is also distinguishable
from that of retired members of the armed services, who may waive the
receipt of but not the right to military retired pay. See 28 Comp.
Gen. 675 (1949); and Master Sergeant Walter E. Nolan, USAF , Retired,
B-196839, April 24, 1980. A retired member retains a legal claim to all
the retired pay which accrues during his lifetime because he is entitled
to such pay by virtue of his continuing status as a member of the
military service. See generally 53 Comp. Gen. 753 (1974); and 41 Comp.
Gen. 715 (1962). See also United States v. Tyler, 105 U.S. 244 (1881).
In contrast, as noted previously, retired civilian employees generally
are regarded as having relinquished their offices at the time of
retirement.
Accordingly, we see no legal barrier to a judicial official
temporarily waiving an annuity under 28 U.S.C. Sec. 611. We suggest that
your office advise the official under such circumstances that payment of
the annuity waived would not be made for the period during which the
waiver was in effect. See, for example 5 U.S.C. Sec. 8345(d) and 22
U.S.C. Sec. 4047(c),
Sincerely yours,
Comptroller General
of the United States
1/ Hereinafter, we will refer to section 611 as the statute governing
the special retirement plan for all three officials. Although the terms
of section 611 expressly apply only to the Director of the
Administrative Office, section 627 authorizes the same retirement plan
for the Director of the Federal Judicial Center. Section 677 provides
that the Administrative Assistant to the Chief Justice of the United
States may elect coverage under the same retirement plan authorized for
the Director of the Administrative Office under section 611.
FILE: B-219929 85-2 CPD 691
DATE: December 20, 1985
MATTER OF: Roebbelen Engineering, Inc.
BIDS - MISTAKES - CORRECTION - INTENDED BID PRICE - ESTABLISHMENT
REQUIRED
Where a low bidder establishes 2 mistakes in its bid but only
establishes the intended amount for 1 mistake and the second mistake
raises doubt that the intended bid would have remained the low bid, the
bid may not be corrected nor the second mistake waived. The agency may
only permit withdrawal of the bid.
Roebbelen Engineering, Inc. (Roebbelen), the second low bidder,
protests the Department of the Army Corps of Engineers' (Corps) decision
to allow correction of one of two alleged mistakes in the low bid of
Allen L. Bender (Bender) under invitation for bids (IFB) No.
DACA05-85-B-0147 for the constructi4n of the Integration Support
Facility at McClellan Air Force Base, California. Roebbelen basically
argues that correction should not be allowed because Bender's bid, with
the requested corrections, would be approximately 1 percent less than
Roebbelen's bid, and the circumstances fail to indicate clearly that
Bender actually intended to bid lower than Roebbelen.
The protest is sustained.
The solicitation called for bids on three Base Bid items and four
additive items to be awarded to the extent funding was available. Funds
were available for all the additives under the bids of either Bender or
Roebbelen. Bender's and Roebbelen's bids and the requested corrections
are as follows:
TABLE OMITTED
Bender claimed that it made two mistakes totaling $463,000 because it
was required to recalculate and change its bid while taking potential
subcontractors' last minute quotations over the phone. Bender requested
that its bid on Additive Item No. A3 be changed from $27,077 to $279,077
because the "9" was inadvertently omitted. Bender also claimed that
$211,000 was erroneously deducted from the Total Base Bid which should
be changed to read $8,681,000. Bender states that it reduced its Base
Bid by $211,000 because it mistakenly believed that the lowest quotation
for electrical work covered all the items in the Base Bid. Since Bender
received the quotation 10 minutes prior to the 2:00 p.m. bid opening,
Bender states it was unable to get a price itemization, but later
learned that the quotation just covered Base Bid Item No. 1.
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 bidder. Federal Acquisition Regulation, 48 C.
F.R. Section 14.406-3(a) (1984). Applying this standard, the Corps
acknowledged that Bender's $27,077 price for Additive Item No. A3
clearly resulted from an error because the government's estimate for
that item was $207,000 and 14 of the 17 other bids received ranged from
$176,000 to $312,000. The Corps reviewed Bender's summary sheet, bid
subtotals, adding machine tapes and subcontractors' quotations and
determined that Bender clearly and convincingly established both the
existence of the mistake and its intended bid price. The correction was
therefore allowed.
Regarding the second alleged mistake, the Corps concluded that the
bid prices for the Base Bid items were what Bender intended and that any
mistake in failing to confirm the quotation was a mistake in judgment
for which correction or other relief is not available. See Handy Tool &
Mfg. Co., 60 Comp. Gen. 189 (1981), 81-1 CPD Paragraph 27. The Corps,
therefore, denied the request to correct the second mistake and proposes
an award to Bender based on its originally offered prices except for
Additive Item No. A3.
The authority to correct mistakes after bid opening, but before
award, is vested in the procuring agency; because the weight to be
given to the evidence in support of an asserted mistake is a question of
fact, we will not disturb an agency's determination unless it lacks a
reasonable basis. Schoutten Constr. Co., B-215663, Sept. 18, 1984, 84-2
CPD Paragraph 318. In this case, the record provides a reasonable basis
for the Corps' determination that the first mistake was made and of the
intended bid price for that mistake.
Regarding the second alleged mistake, our decisions have recognized
that a bidder's reliance on a potential subcontractor's firm quotation
that omits an item or contains an error is the type of mistake for which
relief may be granted. See MKB Mfg. Corp., 59 Comp. Gen. 195 (1980),
80-1 CPD Paragraph 34; Vrooman Constr., Inc., B-218610, Oct. 2, 1985,
85-2 CPD Paragraph 369; see also J.W. Creech Inc., B-191177, Mar. 8,
1978, 78-1 CPD Paragraph 186. We therefore disagree with the Corps'
determination that Bender made a judgment mistake.
We believe that although Bender's price was based on a
misapprehension of the facts, it was the actually intended bid price,
and it is not possible to determine what Bender would have bid if it had
been aware of its error. In this regard, correction of a mistake is
proper even when the intended bid cannot be determined exactly if it
nevertheless is clear that the intended bid falls within a narrow range
of uncertainty that is significantly below the next low bid. Sam
Gonzales, Inc., B-216728, Feb. 1, 1985, 85-1 CPD Paragraph 125; Western
States Constr. Co., B-191209, Aug. 29, 1978, 78-2 CPD Paragraph 149.
Where there is evidence that a mistake was made but no clear and
convincing evidence of the intended bid price or that the estimated
intended bid price would remain the low bid, the bid may not be
corrected nor may the error be waived; the agency may only permit
withdrawal of the bid. Fortec Constrs., B-203190.2, Sept. 29, 1981,
81-2 CPD Paragraph 264.
The record shows that Bender received quotations from various
electrical subcontractors ranging from $1,431,385 to $1,788,000, aside
from the incomplete quotation of $1,220,000 upon which Bender allegedly
relied. Bender asserts that it would have selected the next lowest
quotation, if it had known of the omission in the lowest quotation.
While Bender might have used the next lowest quotation, the fact remains
that Bender essentially is recalculating its bid based on that
assumption. Except in the rare circumstances where it is clear that the
intended bid falls within a narrow range of uncertainty significantly
below the next low bid, a bidder may not recalculate its bid after bid
opening to reflect a price that was never intended before bid opening.
See J.W. Creech Inc., supra. In this case, by permitting Bender to
recalculate its bid based on the other available quotations, we would be
permitting Bender to choose whether or not to accept an award since use
of the highest quotation would result in raising Bender's total bid
price to $9,634,965, which exceeds Roebbelen's total bid price of
$9,384,000. Permitting such a choice would be inconsistent with the
integrity of the competitive sealed-bidding system and would be
prejudicial to other bidders. See Bruce-Andersen Co., 61 Comp. Gen. 30
(1981), 81-2 CPD Paragraph 310.
Furthermore, Bender's worksheets fail to show an intended Total Base
Bid price of $9,277,965 for which it requests correction, and the
correction would bring Bender's bid within 1 percent of Roebbelen's bid.
The closer an alleged intended bid comes to the next low bid, the
greater is the threat that correction poses to the integrity of the
competitive sealed-bidding system, and therefore the stronger the
evidence must be to establish the intended bid. Sam Gonzales, Inc.,
supra. For this reason, we believe that the uncertainty of Bender's
intended bid, particularly in light of the availability of
subcontractor's quotations that would cause the bid to exceed
Roebbelen's, compels permitting only the withdrawal of Bender's bid.
Under the circumstances, Bender's bid may not be corrected nor the
mistakes waived. The bid must be withdrawn. Fortec Constrs., supra.
We therefore recommend that the Corps award the contract to Roebbelen
if its bid is responsive and the firm is responsible.
The protest is sustained.
Acting Comptroller General of the United States
-- Air Conditioning Services: $11,980
-- the protester: $ 8,862.62
-- Phillip C. Clarke
Electrical Contractors: $ 8,600
Criteria points
1. Staffing Plan 30
2. Management Capability 30
3. Cost 20
4. Experience 20
Ungermann-Bass $13,516,846.49
Contel $14,017,484.23
Martin Marietta $14,894,311.74
ITT/Federal Electric $20,816,826.67
Date: September 14, 1988
Matter of: SAC Management, Inc.
Firm is not entitled to recover proposal preparation costs where it has
not shown that the contracting agency acted improperly in canceling the
solicitation.
SAC Management, Inc., claims it is entitled to recover its proposal
preparation costs as a result of the cancellation of request for
proposals (RFP) No. DABT51-85-R-0025, issued by the Department of the
Army as part of a cost comparison under Office of Management and Budget
(OMB) Circular No. A-76 to determine whether mess attendant services at
Fort Bliss, Texas, should be contracted out. SAC alleges that the
changed circumstances serving as a basis for cancellation were the
result of undue delay on the agency's part in conducting the procurement
and that this negligence deprived the protester of an opportunity to
have its proposal fairly evaluated. We deny the claim for costs.
The RFP was issued on July 8, 1985, and initial proposals were received
on May 8, 1986. Best and final offers (BAFO) were received on September
18, 1987, negotiations were reopened on December 22, and revised BAFOs
were received on January 11, 1988. By letter dated May 4, the Army
canceled the RFP stating that budgetary constraints reduced the agency's
requirements for the solicited services and that these reductions were
of such a magnitude that a complete revision of the RFP work statement
would be required. Offerors were advised that a revised solicitation
would be issued.
The protester argues that the length of time taken between the various
stages of this procurement raises a presumption that the Army failed to
exercise reasonable care in preparing a solicitation which accurately
reflected its needs. In essence, SAC does not dispute that the
significant changes in the scope of its requirements noted by the Army
in its letter of May 4 can serve as a proper basis for cancellation;
rather, the protester argues that it is entitled to proposal preparation
costs because the Army's failure to conduct the procurement in a timely
manner was the principal contributing factor in the cancellation.
In response, the Army argues that delays in the procurement process
were not the result of negligence but were caused by factors outside the
agency's control such as numerous protests, the need to obtain
Department of Labor wage determinations pursuant to the Service Contract
Act of 1965, and the need to implement revisions to OMB's policy
regarding cost comparisons in light of the newly-created Federal
Employees Retirement System.
In order to permit the recovery of proposal preparation costs under our
Bid Protest Regulations, we must find that there exists a violation of a
procurement law or regulation. 4 C.F.R. Sec. 21.6(d) (1988). Here,
while SAC urges that the cancellation was necessitated because of the
agency's negligence, the protester does not argue nor do we conclude
that the alleged negligence made the cancellation of the RFP improper.
Consequently, we have no basis under our regulation to allow the
protester to recover its proposal preparation costs. 4 C.F.R. Sec.
21.6(d); Integrity Management International, Inc., B-222405.4, Feb.
26, 1987, 87-1 CPD Par. 220.
The claim for costs is denied.
James F. Hinchman, General Counsel